ACI Zero Coupon Bond Prospectus

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Issuer Issue Manager

Advanced Chemical Industries Limited (ACI) Alliance Financial Services Limited

‘If you have any query about this document, you may consult issuer, issue manager and underwriter’ Repeat Public Offer

of

Advanced Chemical Industries Limited

ACI 20% Convertible Zero Coupon Bonds ISSUE SIZE

1,335,850 Convertible Zero Coupon Bonds of Tk1,000 each totaling Tk. 1,335,850,000

Private Placement 801,510 Convertible Zero Coupon Bonds of Tk 1,000 each

Total Tk 801,510,000 Public Offering 534,340 Convertible Zero Coupon Bonds of Tk 1000 each Total Tk 534,340,000 Offer value (per lot) Tk. 3,743 (Face value Tk. 5,000)

Conversion Strike Price

1.10 times of Net Asset Value (NAV) per share based on the audited statements of preceding financial year.

OPENING DATE FOR SUBSCRIPTION: 31 January 2010 CLOSING DATE FOR SUBSCRIPTION: 04 February 2010

For Non-Resident Bangladeshi (NRB) Quota, Subscription Closes on: 13 February 2010 MANAGER TO THE ISSUE

Alliance Financial Services Limited (AFSL)

Rahman Chamber (3rd floor),12-13 Motijheel C/A, Dhaka- 1000 Tel: 9515468, 9515469, Fax: 88-02-9515467, www.allfin.org

FACILITY ARRANGER & TRUSTEE

Industrial & Infrastructure Development Finance Co. Ltd (IIDFC) Chamber Building (6th & 7th floor), 122-124 Motijheel C/A, Dhaka-1000

Tel: 9559311-12,9553387, Fax: 88-02-9568987, www.iidfc.com Issue Date of the Prospectus: 30 December 2009

The issue shall be placed in “N” category Credit Rating by

Credit Rating Information and Services Limited (CRISL)

Issue Rating (Zero Coupon Bond) A – (Indicative)

Entity Rating – 2008 A+

Date of Rating Declaration 29 April 2009

“CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE 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 SECURTIES 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, UNDERWRITERS AND/OR AUDITOR.’’

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UNDERWRITERS AB Bank Limited BCIC Bhaban 30-31 Dilkusha C/A Dhaka-1000 Tel: (02)-9560312 Fax : (8802) 9564122-23

Mercantile Securities Limited Paramount Heights

65/2/1 Box Culvert Road Purana Paltan, Dhaka-1000 Tel: (02)-7119654, 7125396 Fax : (8802) 9562780 Bangladesh Mutual Securities Limited

Sharif Mansion (7th floor) 56-57 Motijheel C/A Dhaka-1000

Tel: (02)-7169428,9570624 Fax : (8802) 7123820

Standard Bank Limited

Metropolitan

Chamber Building (3rd floor) 122-124 Motijheel C/A, Dhaka- 1000 Tel: (02)-7175698, 7169134

Fax : (8802) 7176367

Bay Leasing & Investment Limited Printers Building (7th floor)

5, Rajuk Avenue

Motijheel C/A, Dhaka-1000 Tel: (02)-9565026, 9568599 Fax : (8802) 9565027

Trust Bank Limited Peoples Insurance Bhaban 36, Dilkusha C/A

Dhaka-1000 Tel: (02)-9572012-3 Fax : (8802) 9572315

BANCO Trans world (BD) Limited

Ispahani Building (3rd floor) 14-15 Motijheel C/A, Dhaka-1000, Tel: (02)-9569541,9564922

Fax : (8802) 9569612

Union Capital Limited Noor Tower (5th floor) 73, Sonargaon Road Dhaka-1205 Tel: (02)-9662888 Fax : (8802) 8616878 Lanka Bangla Finance Limited

Safura Tower, Level 11 20, Kemal Ataturk Avenue Banani, Dhaka-1213 Tel: (02)-9883701-10 Fax : (8802) 8810998

NAME & CONTACT ADDRESS OF THE AUDITOR

Rahman Rahman Huq Chartered Accountants 9 Mohakhali C/A ( 11th Floor) Dhaka-1212

Tel : 880 (2) 9886450-2 Fax : 880 (2) 9886449

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Definition and elaboration of the abbreviated words and technical terms used in the Prospectus

ACI Advanced Chemical Industries Limited (ACI)

Allotment Letter of allotment for shares/Bonds

BB Bangladesh Bank

BO Beneficiary Owner

CDBL Central Depository of Bangladesh Limited

Certificate Share Certificate/Bond Certificate

CIB Credit Information Bureau

Commission Securities and Exchange Commission

Companies Act Companies Act, 1994 (Act. No. XVIII of 1994)

CSE Chittagong Stock Exchange Limited

DSE Dhaka Stock Exchange Limited

FC Account Foreign Currency Account

FID Financial Institutions Department of Bangladesh Bank

Issue Public Issue of ACI 20% Convertible Zero Coupon Bonds

MP Market Price

NAV Net Asset Value

NBR National Board of Revenue

NRB Non-Resident Bangladeshi

Offer Price Price of the ACI 20% Convertible Zero Coupon Bonds being offered

Registered Office Head Office of the Company

RJSC Registrar of Joint Stock Companies & Firms

SC Share Certificate

SEC Securities and Exchange Commission

Securities/Bonds ACI 20% Convertible Zero Coupon Bonds

Securities Market The Share/Bond Market of Bangladesh

Sponsors The Sponsor Shareholders of Advanced Chemical Industries Limited (ACI)

Stockholder Shareholder of ACI

Subscription Application money

The Company/Issuer Advanced Chemical industries Limited (ACI)

Redemption income Difference between issue price and the face value

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AVAILABILITY OF PROSPECTUS

Prospectus of Advanced Chemical industries Limited (ACI) may be obtained from the Issuer Company, Issue Manager, Underwriters and the Stock Exchanges as follows:

Company & Address Contact Person Telephone Number

THE ISSUER Advanced Chemical industries

Limited (ACI)

ACI Centre, 245 Tejgaon Industrial Area, Dhaka- 1208

Ms. Sheema Abed Rahman Company Secretary

Tel: (02) 9885694-8

Fax : (8802) 9884784,9565257

MANAGER TO THE ISSUE Alliance Financial Services Ltd

Rahman Chamber (3rd floor) 12-13 Motijheel C/A, Dhaka- 1000

Mr. Muhammad Nazrul Islam ACMA Manager

Tel: (02) – 9515468,9515469 Fax: (8802) 9515467

FACILITY ARRANGER & TRUSTEE Industrial & Infrastructure

Development Finance Co. Ltd (IIDFC)

Chamber Building (6th & 7th floor), 122-124 Motijheel C/A, Dhaka-1000 Mr. A.S.M Arif Head of operations Structured Finance Tel: (02)- 9559311-12,9553387 Fax: 88-02-9568987 UNDERWRITERS AB Bank Limited BCIC Bhaban

30-31 Dilkusha C/A, Dhaka-1000

Mr. Kaiser A Chowdhury President & Managing Director

Tel: (02)-9560312 Fax : (8802) 9564122-23 Bangladesh Mutual Securities

Limited

Sharif Mansion (7th floor)

56-57 Motijheel C/A, Dhaka-1000

Mr. Md. Nurul Alam CEO

Tel: (02)-7169428,9570624 Fax : (8802) 7123820

Bay Leasing & Investment Limited

Printers Building (7th floor) 5, Rajuk Avenue

Motijheel C/A, Dhaka-1000

Mr. Mahbubur Rashid Managing Director

Tel: (02)-9565026, 9568599 Fax : (8802) 9565027

Ispahani Building (3rd floor) 14-15 Motijheel C/A, Dhaka-1000

Mr. A. Munim Choudhury Managing Director

Tel: (02)-9569541,9564922 Fax : (8802) 9569612

Lanka Bangla Finance Limited Safura Tower, Level 11

20, Kemal Ataturk Avenue Banani, Dhaka-1213

Mr. Mafizuddin Sarker Managing Director

Tel: (02)-9883701-10 Fax : (8802) 8810998

Mercantile Securities Limited Paramount Heights

65/2/1 Box Culvert Road Purana Paltan, Dhaka-1000

Mr. Musatofa Kamal CEO

Tel: (02)-7119654, 7125396 Fax : (8802) 9562780

Standard Bank Limited

Metropolitan Chamber Building (3rd floor),122-124 Motijheel C/A, Dhaka-1000

Mr. S. A. Farooqui Managing Director

Tel: (02)-7175698, 7169134 Fax : (8802) 7176367

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Trust Bank Limited Peoples Insurance Bhaban 36, Dilkusha C/A,Dhaka-1000

Mr. Iqbal U Ahmed Managing Director

Tel: (02)-9572012-3 Fax : (8802) 9572315 Union Capital Limited

Noor Tower (5th floor)

73, Sonargaon Road,Dhaka-1205

Mr. Ramendra Nath Paul

EVP &Head of Merchant Banking

Tel: (02)-9662888 Fax : (8802) 8616878 STOCK EXCHANGES

Dhaka Stock Exchange Limited.

9/F, Motijheel C/A, Dhaka-1000 DSE Library (02) - 9564601-7

Chittagong Stock Exchange

Limited.CSE Building, 1080 Sheikh Mujib Road, Agrabad, Chittagong-4100

CSE Library (031) - 714632-3

(031) - 720871-3

Prospectus is also available on the websites www.secbd.org, www.aci-bd.com , www.iidfc.com, www.allfin.org. www.dsebd.org, www.csebd.com and Public Reference room of the Securities and Exchange Commission (SEC) for reading and study.

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TABLE OF CONTENTS

Item Page No

Disclosure in respect of issuance of securities in demat form 10

Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969 10

General information 14

Declarations and due diligence certificates 15

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

the prospectus 15

Consent of the Directors to Serve 16

Declaration about filing of prospectus with the Registrar of Joint Stock Companies & Firms 16

Due Diligence Certificate of Manger to the Issue 17

Due Diligence Certificate of the Underwriter(s) 18

Due Diligence Certificate of Trustee To The Issue 19

Risk factors & management perceptions about the risks 20

Statement regarding holding of Annual General Meeting of Advanced Chemical Industries Limited

(ACI) 22

Utilization of proceeds of Advanced Chemicals Industries Limited previous right issues 22

Size of Issue 22

List of Institutional Investors 23

List of Individual Investors 24

Purpose of the Issue 25

Use of proceeds 25

Description of Business 30

Background 30

Important dates and milestone dates of ACI Limited 30

Nature of Business 30

Principal products 30

History of 17 years-ACI Limited 33

Market for the ACI Products 34

Relative contribution to revenue 35

Associate subsidiary/related holding company 36

Distribution of products/services 36

Competitive condition of Business 36

Sources and availability of raw materials and principal suppliers 39

Sources of and requirement for power, gas and water or any other utilities 42

Name of the customers who enjoy 10% or more of the Company’s product/services 42

Contract with principal customers and suppliers 43

Material patents, trademarks, license or royalty agreements 43

Number of employees (as per audited accounts) 45

Capacity and current utilization of facility 45

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Item

Plan of operation and discussion of financial condition 46

Internal and external sources of cash (as per audited accounts) 46

Material commitment for capital expenditure 47

Causes for any material changes from period to period 47

Graphical presentation Of ACI’s performance from 2004 to 2008 48

Seasonal aspect 49

Known trends, events or uncertainties 49

Change in the assets of the Company used to pay off any liabilities 49

Loan taken from holding/parent company or subsidiary company 49

Loan given to holding/parent company or subsidiary company 49

Future contractual liabilities 50

Future capital expenditure 50

VAT, income tax, customs duty or other tax liability 50

Operating lease agreement 50

Financial lease and other financial commitment 50

Personnel related scheme 51

Revaluation of assets 51

Breakdown of all Expenses connected with the Repeat Issue ₅₃

Auditors’ certificate for paid-up share capital 54

Transaction between Holding/Subsidiary Company and the Issuer 54

Directors and officers of the company 55

Description of the Directors 55

Directors Involvement in other organization 56

Family relationship among Directors 58

Family relationship among top Officers 58

Short Description of the Directors 59

CIB Report 60

Description of senior executives and department heads

60

Involvement of Directors and Officers in certain legal proceedings ₆₁

Certain relationships and related transactions ₆₁

Transaction with related parties 61

Directors facilities 62

Executive compensation 62

Remuneration paid to top five salaried officers 62

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Item

Remuneration paid to Director who was not an officer 62

Future compensation to Director or officers 63

Pay increase intention 63

Options granted to Directors, officers and employees 63

Transaction with the Directors and subscribers to the Memorandum 63

Tangible assets per share 63

Ownership of the Company’s securities 63

Composition of Shareholders 63

Shareholding structure 5% or more as on 31 December 2008 63

Share held by Directors 64

Securities owned by the officers 64

Net Asset Value 65

Market for the securities being offered 66

Declaration about listing of shares with Stock Exchange 66

Trading and settlement 66

Description of Securities outstanding or being offered 66

Dividend, voting, pre-emption rights 66

Conversion and liquidation rights 66

Dividend policy 67

Other rights of shareholders 67

Debt securities 67

General concept on Zero Coupon Bond 67

Zero Coupon Bond 67

Convertible Bond 68

Zero-Coupon Convertible Bond 68

Conversion Strike Price 68

ACI 20% Convertible Zero-Coupon Bonds 68

ACI 20% Convertible Zero Coupon bonds at a glance 68

Details of ACI 20% Convertible Zero Coupon Bond 69

Convertibility Option 70

Redemption procedure 70

Early redemption 71

Transferability 71

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Item

Facility arranger & Trustee 71

Conversion Strike Price & Method 71

Convertible Value of the Bond / Conversion Strike Price 71

Conversion date 71

Security Features 71

Rationale for investing In ACI 20% Convertible Zero Coupon Bond 72

Scenario analysis of investing in ACI ZCB 73

Trustee 74

Refund of subscription money 79

Subscription by and refund to non-resident Bangladeshi (NRB) 79

Availability of securities 80

The Offer 80

Application for subscription 80

Allotment 81

Underwriting of Bonds 82

Principal terms and conditions of underwriting agreement 82

Underwriter’s right to represent in the Board of Directors of the Company 83

Commission of Underwriters 83

Right of Underwriters on Company’s Board 83

Material contracts 83

Manager to the issue 83

Commission to the banker to the issue 83

Corporate directory 83

Auditors report to the shareholders 84

Audited Financial Statements 85

Auditors report under section 135(1), Para 24(1) of part II of schedule III to Companies Act, 1994 148

Credit rating report 153

Ratio Analysis 169

Additional Disclosure 170

Application forms 171

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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 there under, 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

1. The Company shall go for Repeat Public Offer (RPO) for 534,340 20% Convertible Zero Coupon Bonds of Taka 1,000 each worth Tk.534,340,000.00 (Taka fifty three crore forty three lac forty thousand) only following the Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations issued there under; 2. The Company shall disseminate the above information to the Stock Exchanges within half an hour of receipt of this letter;

3.The Company shall disseminate the receipt of the Commission’s approval along with the purpose and amount of the issue, price of the bonds etc. as a price sensitive information, as prescribed by the Commission;

4. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in four national daily newspapers (in two Bangla and two English), within 03 (three) working days of issuance of this 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, Trustee, and the issue manager within 03 (three) working days from the date of issuance of this letter which shall remain posted till the closure of the subscription. The issuer shall submit to SEC, the stock exchanges, the Trustee and the issue manager a diskette containing the text of the vetted prospectus in “MS -Word” format.

5. Sufficient copies of prospectus shall be made available by the issuer so that any person requesting a copy may 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 manager. 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.

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

7. The issuer company and the issue manager shall ensure transmission of the prospectus, abridged version of the 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 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 manager within two working days from the date of said dispatch of the prospectus & the forms.

8. The paper clipping of publication of price sensitive information and abridged version of prospectus, as mentioned at condition 3 & 4 above, shall be submitted to the Commission within 24 hours of the publication thereof.

9. The company shall maintain separate bank account(s) for collecting proceeds of the Repeat Public Offer and shall also open FC account(s) to deposit the application money of the Non-Resident Bangladeshis (NRBs) for RPO purpose, and shall incorporate full particulars of said FC account(s) in the prospectus. The company shall open the

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abovementioned accounts for RPO purpose; and close these accounts after refund of over-subscription. 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.

10. The issuer company shall apply to all the stock exchanges in Bangladesh for listing within 07(seven) working days 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.

11. The following declaration shall be made by the company in the prospectus, namely: - “Declaration about Listing of Bonds 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 shall 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.”

12. The subscription list shall be opened and the sale of securities commenced 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. 13. A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable 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”. Application shall be sent by the NRB applicants to the issuer company so as to reach the same to the company by the closing date of subscription for NRB applicants. Application received by the company after the closing date of subscription will not be considered for allotment purpose. 14. The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank, 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.

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

16. Upon completion of the period of subscription for securities the issuer and the issue manager shall jointly provide 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: -

(a) Total number of securities for which subscription has been received; (b) Amount received from the subscription; and

(c) Amount of commission paid to the banker to the issue.

17. The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list of valid and invalid applicants (i.e. 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, NRB application forms

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18. 10% of total public offering shall be reserved for Non-Resident Bangladeshi (NRB) and 10% for mutual funds and collective investment schemes registered with the Commission and the remaining 80% shall be opened 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 issue manager shall jointly conduct an open lottery of all the applicants added together.

19. All the applicants shall first be treated as applied for one minimum market lot of 5 bonds worth Tk.5000/- (face value). 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.

20. 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.

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

22. The company shall issue share allotment letters to all successful applicants within 5 (five) weeks from the date of the subscription closing date. 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 deduction.

For the purpose of refund of application money, the applicant must mention the bank account in the application form the same bank account as available in the database of Beneficiary Owners Account in central depository. After completion of refund, the issuer shall disclose the information in the newspapers where the abridged version of prospectus has been published. A compliance report in this regard shall be submitted to the Commission within 7 (seven) weeks from the date of closure of subscription.

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

24. In the event of under-subscription of the public offering, the entire unsubscribed portion of securities shall be taken up by the underwriter(s). The issuer must notify the underwriter to take up the underwritten bonds 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. 25. Lock-in provision shall be applicable upon conversion of bonds as per applicable rules.

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

Part-B

1. The issuer and the issue manager shall ensure that the abridged version of the prospectus and the full prospectus is published correctly and in strict conformity without any error/omission, as vetted by the Securities and Exchange Commission.

2. The issue manager shall carefully examine and compare the published abridged version of prospectus on the date of publication with the copy vetted by SEC. If any discrepancy/inconsistency is found, both the issuer and the issue

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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.

3. Both the issuer company and the issue manager shall, immediately after publication of the prospectus and its 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.

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

5. The company shall furnish report to the Trustee and the Commission on utilization of RPO proceeds within 15 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.

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

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

8. The issuer and the Trustee shall jointly submit to the Commission an annual status report of the bonds containing among others, details about redemption/ conversion, decisions of the bondholder’s meeting (if any) within 03(three) months from the date of Annual General Meeting of the company.

9. The Trustee shall ensure compliance by the issuer in respect of bondholder’s rights as per the Trust Deed and shall submit to the Commission an annual compliance report within 03 (three months) from the date of Annual General Meeting of the company.

Part C

1. The Issuer shall execute the Trust Deed with the Trustee and register the same under the Trust Act, 1882 and shall submit a copy of the trust deed attested by the Chief Executive Officers of the Issuer, Trustee and the Issue Manager to the Commission.

2. The Issuer shall execute charge agreements with the Trustee. Part D

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

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

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Part E

1.As per provision of the Depository Act, 1999 and regulation made there under, bonds will only be issued in dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system.

An applicant (including NRB) shall not be able to apply for allotment of bonds without beneficial owner’s account (BO account).

2. The issue manager shall also ensure due compliance of all above.

GENERAL INFORMATION

Alliance Financial Services Limited (Issue Manager) has prepared this prospectus based on the information provided by Advanced Chemical industries Limited (the Issuer) and also upon several discussions with Chairman, Managing Director and concerned executives of the Company. The directors including Executive Director of the Advanced Chemical Industries Limited (ACI) and Alliance Financial Services Limited (AFSL) collectively and individually, having made all reasonable inquires, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material aspects 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 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 resident 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. A copy of this Prospectus may be obtained from the Head Office of Advanced Chemical industries Limited (ACI), Alliance Financial Services Limited (AFSL), the Underwriters and the Stock Exchanges where the securities will be traded.

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DECLARATIONS AND DUE DILIGENCE CERTIFICATES

DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS, INCLUDING THE CEO OF THE “ADVANCED CHEMICAL INDUSTRIES 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/- M Anis Ud Dowla Chairman & Director

Sd/- Syed Manzur Elahi

Director Sd/- Md. Humayun Kabir Director Sd/- Najma Dowla Director Sd/- Dr. Arif Dowla

Managing Director and Director

Sd/-

Waliur Rahman Bhuiyan, OBE Director

Sd/-

Shusmita Anis Salam Director Sd/- Waliur Rahman Director Sd/- Wajed Salam Director Sd/-

Sheema Abed Rahman Director and Company Secretary

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CONSENT OF THE DIRECTORS TO SERVE

We hereby confirm that we have been serving as Directors of Advanced Chemical Industries Limited (ACI) and continue to act as Director of the Company

Sd/- M Anis Ud Dowla Chairman & Director

Sd/- Syed Manzur Elahi

Director Sd/- Md. Humayun Kabir Director Sd/- Najma Dowla Director Sd/- Dr. Arif Dowla

Managing Director and Director

Sd/-

Waliur Rahman Bhuiyan, OBE Director

Sd/-

Shusmita Anis Salam Director Sd/- Waliur Rahman Director Sd/- Wajed Salam Director Sd/-

Sheema Abed Rahman Director and Company Secretary

DECLARATION ABOUT FILING OF PROSPECTUS WITH THE REGISTRAR OF JOINT STOCK COMPANIES AND FIRMS

This Prospectus (duly signed & dated) has been filed for registration with the Registrar of Joint Stock Companies and Firms, Bangladesh, as required under Section 138 (1) of the Companies Act, 1994 on or before the date of publication of this prospectus in the newspaper.

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DUE DILIGENCE CERTIFICATE OF MANAGER TO THE ISSUE

Sub: Public Offer of ACI 20% Convertible Zero Coupon Bonds of Tk. 1,000 each aggregating Tk. 1,335.85 million of Advanced Chemical Industries Limited (ACI).

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

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

2 On the basis of such examination and the discussion with the issuer company, its directors and officers, and 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. the draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers relevant to the issue;

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

c. the disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well-informed decision for investment in the proposed issue.

For Manager to the Issue

Sd/-

(Tapan K Podder) Managing Director

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DUE DILIGENCE CERTIFICATE OF THE UNDERWRITER (S)

Sub: Public Offer of ACI 20% Convertible Zero Coupon Bond of Tk. 1000 each for Tk. 1,335.85 million of Advanced Chemical Industries Limited (ACI).

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

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

2. On the basis of such examination and the discussion with the issuer company, its directors and officers, and 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 above mentioned public issue within 15(fifteen) days of calling up thereof by the issuer; and

c. this underwriting commitment is unequivocal and irrevocable. For Underwriter(s) Sd/- Managing Director AB Bank Limited Sd/- Managing Director Mercantile Securities Limited

Sd/- Managing Director

Bangladesh Mutual Securities Limited

Sd/- Managing Director Standard Bank Limited Sd/-

Managing Director

Bay Leasing & Investment Limited

Sd/- Managing Director Trust Bank Limited Sd/-

Managing Director

Sd/- Managing Director Union Capital Limited Sd/-

Managing Director Lanka Bangla Finance Limited

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DUE DILIGENCE CERTIFICATE OF TRUSTEE TO THE ISSUE

Sub: Public Offer of ACI 20% Convertible Zero Coupon Bonds of Tk. 1000 each of Tk. 1,335.85 million of Advanced Chemical Industries Limited (ACI).

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

1. We, while agree to act as trustee to the above mentioned Issue, have examined the Information Memorandum/ draft prospectus, other documents and materials as relevant to our decision; and

2. On the basis of such examination and the discussion with the issuer company, its directors and officers, and 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. the information memorandum/draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers relevant to the issue;

b. all the legal requirements connected with the said issue have been duly complied with;

c. the disclosures made in the memorandum/draft prospectus are true, fair and adequate to enable the investors to make a well-informed decision for investment in the proposed issue; and

d. the Securities and Exchange Commission (Public Issue) Rules, 2006 have been complied with.

For Trustee to the Issue

Sd/-

Managing Director

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RISK FACTORS AND MANAGEMENT PERCEPTIONS

Investment in proposed Convertible Zero Coupon Bond carries fixed return as well as possible capital gain from conversion into shares. Share/Bond market involves risk and investors should carefully consider all the risks and uncertainties associated to the company along with the information provided in the prospectus before taking decision to invest in the Zero Coupon Bonds of Advanced Chemical Industries Limited. The following are the major risk factors considered by the management as of now to the company and its business:

Interest rate risk

Major source of fund for operation of the company and its subsidiaries are the banks and financial institutions which carries interest based on domestic money market. In case of any volatility in the money market the financial expenses may increase significantly which will ultimately reduce the profitability of the company.

Management Perception

The management is aware of the impact of high financial expenses and continuously exploring attractive and competitive sources of fund. As a part of this initiative the management approved the issue of ZCB to the public for the first time in the history of Bangladesh capital market. Project funding cost of the initiatives considered here are expected to considerably come down due to issue of zero coupon bonds. Currently discount rate of the bond is fixed and comparatively lower than the current borrowing rate. So the raising of finance through issuance of ZCB is favorable for the company under the current situation.

Exchange rate risk

The project may face some degree of foreign exchange rate fluctuation risk as the Company imports raw materials against payment of foreign currency.

Management Perception:

The risk of foreign exchange cannot be eliminated fully as we require importing raw materials. However the management is always alert in minimizing the negative impact of currency fluctuation cost by looking for new sources of raw materials or constantly negotiating with suppliers in reducing price. Moreover, the company is fully aware of the risks related to currency fluctuation and as a prudent Company it always takes steps to hedge all major currency dealings to safeguard the interest of the Company. The risk can be mitigated to some extent through exporting a portion of its production which will neutralize negative impact of currency fluctuation.

Industry risk

Competition may increase in the pharmaceutical sector due to entrant of new companies which may ultimately reduce the market share as well as profitability of the company.

Management Perception:

Bangladesh is a developing country where access to healthcare and per capita drug consumption is one of the lowest in the world. With the growth of per capita income demand of the medicines are growing fast. The company is also introducing new drugs to take advantage of the growing demand and change in disease pattern. Moreover, in addition to pharmaceutical business, ACI has other successful business interest in consumer brand and agricultural sector which will continue to generate revenue.

Environmentalists are likely to create pressure on Government for banning use of chemicals for its negative effects on living beings thereby causing closure of business by the Company.

The company is always careful in compliance of Government Regulations regarding use of chemicals. The main goal of ACI is to make the country self sufficient in health, agriculture and other sectors

.

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Market & Technology related risk

ACI’s healthcare and agro based products are based on latest technological developments and marketed for the domestic consumers. With the shrinkage of domestic demand as well as introduction of latest technology in products by its competitors, the company may witness reduction of sales as well as profitability.

Company owns modern technology with R&D infrastructure and shall be able to adapt to any new inventions with moderate investments as it has been doing in the past. Moreover the management is always updated through participation in international fair, symposium, market study etc. about its competitors, growing competition and technological developments. To retain existing market as well as to enter into new segments of the market, the management always takes necessary steps.

Potential or existing Government regulations

Government has given very high priority to the development of healthcare and agricultural sector and policies are favorable. Any adverse change by the Government in fiscal policies relating to ACI’s business may adversely affect Company’s profitability.

Company strictly follows all the laid down regulations for marketing its products and therefore do not foresee any problem in doing the business.

Potential changes in global or national policies

The Company’s product lines mainly consist of healthcare and agro based products which are primarily based on imported raw materials. International price movements affect the whole industry by and large. The plant and machinery will be imported and costs may fluctuate owing to changes of exchange rate.

Any change in the global and national policy will affect the industry as a whole. Financial and operational strength of the company reached to very high level by now and is capable to handle reasonable threats. Company has adequate system and procedures in place to take care of any such event.

Non-operating history

There is no history of non operation in case of ACI Limited. Operational Risk

Current global recession shall have serious influence on the Bangladesh economy by way of reduction of exports and remittances from NRBs. This may reduce the demand of the consumer products of ACI drastically which will reduce sales as well as profitability of the company.

The company has already taken different steps to minimize the impact of global recession towards the profitability of the company. As the current export volume of the Company is not significant, the impact of global meltdown on ACI will be very minimum.

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Statement regarding holding of Annual General Meeting of Advanced Chemical Industries Limited (ACI) (From 1994 to 2007)

Utilization of proceeds of Advanced Chemical Industries Limited previous Right Issues

The company was listed with DSE and CSE without issuing any Initial Public Offering (IPO) and has raised capital through two right issues in the following manner:

Year Particulars No. of Shares Amount (Tk.)

1995 Right Issue (Tk. 10 each at a

premium of Tk. 120) 1,680,000 218,400,000

1998 Right Issue(Tk. 10 each at a

premium of Tk. 10) 7,350,000 147,000,000

All the proceeds of the Right Issues were utilized by the company for its’ capacity enhancement leading to business growth which has also been reflected in the cash flow statement as a part of audit financial statements of the respective years of the company.

SIZE OF ISSUE

Total size of the ZCB is BDT 1,335,850,000 in face value of which BDT 801,510,000 being 60% of the total issue has already been allocated for placement, and subscription will be done along with the public subscription. The Company now offers bonds of BDT 534,340,000 (40% of the ZCBs) through Public Offering with the consent of the SEC.

Particulars Issue Price

Amount (Tk.) Face Value Amount (Tk.) Percentage a. Private Placement 600,010,386 801,510,000 60% b. Public Offering 400,006,924 534,340,000 40% Total 1,000,017,310 1,335,850,000 100%

** Lot Size Tk. 3,743 for face value Tk. 5,000

Sl. No. Accounting Year AGM Dividend Declared AGM held on

1 1994 22nd AGM Bonus 1:1, Cash 35% 14-08-1995

2 1995 23RD AGM Rights 2:5, Cash 35% 05-09-1996

3 1996 24th AGM Bonus 1:4, Cash 30% 20-11-1997

4 1997 25th AGM Bonus 1:5, Cash 30% 23-03-1998

5 1998 26th AGM Rights 1:1, Cash 25% 20-05-1999

6 1999 27th AGM Cash 30% 22-06-2000 7 2000 28th AGM Cash 35% 26-06-2001 8 2001 29th AGM Cash 37.5% 27-06-2002 9 2002 30th AGM Cash 37.5% 08-07-2003 10 2003 31st AGM Cash 40% 22-06-2004 11 2004 32nd AGM Cash 42.5% 22-06-2005 12 2005 33rd AGM Cash 45% 22-06-2006 13 2006 34th AGM Cash 60% 26-06-2007 14 2007 35th AGM Cash 85% 23-06-2008

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Investor who subscribed the amount offered through private placement are as under:

a. Institutional Investors

Sl. No. Name of the Institution Address No. of Lot Subscribed No. of Unit

Subscribed Face Value Issue Price

1 National Credit and Commerce Bank Ltd 7/8, Motijheel C/A Dhaka-1000 20,000 100,000 100,000,000 74,860,000 2 United Commercial Bank Limited 59-60, Motijheel C/A Dhaka-1000 26,716 133,580 133,580,000 99,997,988

3 Bank Asia Limited

Tea Board Building 111-113 Motijheel C/A Dhaka-1000

13,001 65,005 65,005,000 48,662,743

4 Delta Brac Housing

Finance Corp. Ltd. Landmark (9th floor) 12-14 Gulshan North C/A Gulshan 2, Dhaka-1212 8,014 40,070 40,070,000 29,996,402 5 Mobil Jamuna Lubricants Ltd Mobil House CWS © 9, Gulshan - 1 Dhaka-1212 13,358 66,790 66,790,000 49,998,994

6 Lanka Bangla Finance

Limited

20, Kemal ATaturk Avenue , Safura Tower (11th floor) Banani, Dhaka-1213

10,000 50,000 50,000,000 37,430,000

7 BANCO Trans World

(BD) Limited

Ispahani Building (3rd floor), 14-15 Motijheel C/A, Dhaka-1000

5,770 28,850 28,850,000 21,597,110

8 Delta Life Insurance Company Limited

Uttara Bank Bhaban 90, Motijheel C/A Dhaka-1000 5,343 26,715 26,715,000 19,998,849 9 Alliance Financial Services Limited Rahman Chamber ( 3rd Floor) 12-13 Motijheel C/A, Dhaka-1000 2,672 13,360 13,360,000 10,001,296

10 Trust Bank Limited

Peoples Insurance Bhaban

36 Dilkusha C/A Dhaka-1000

2,671 13,355 13,355,000 9,997,553

11 Bangladesh Steel Re-rolling Mills Limited

Ali Mansion

1173/1207 Sadarghat Road, Chittagong

5,343 26,715 26,715,000 19,998,849

12

Ahsania Malaysia Hajj Investment & Finance Co. Ltd

72 Dilkusha C/A Fazlur Rahman Centre Dhaka-1000 1,335 6,675 6,675,000 4,996,905 13 Square Pharmaceuticals Limited Square Centre 48 Mohakhali Commercial Area Dhaka-1212 8,014 40,070 40,070,000 29,996,402 14 Pragati Insurance Limited Pragati RPR Centre 20-21 Kawran Bazar Dhaka - 1215 6,679 33,395 33,395,000 24,999,497

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b. Individual Investors

Sl.

No. Name Address

No. of Lot Subscribed

No. of Unit

Subscribed Face Value Issue Price

1 Mr. Madhab C Das

Appt # 3/C, Sufiany Plaza 10 Avoy Das Lane Tikatully, Dhaka-1203

2,671 13,355 13,355,000 9,997,553

2 Mr. Nurul Haque

Appt # A3, House # 2 Road 34, Gulshan Dhaka-1212 1,335 6,675 6,675,000 4,996,905 3 Mr.Samson H Chowdhury Square Centre 48 Mohakhali Commercial Area Dhaka-1212 2,671 13,355 13,355,000 9,997,553 4 Mr. Anjan Chowdhury Square Centre 48 Mohakhali Commercial Area Dhaka-1212 2,671 13,355 13,355,000 9,997,553 5 Mr. Tapan Chowdhury Square Centre 48 Mohakhali Commercial Area Dhaka-1212 2,671 13,355 13,355,000 9,997,553 6 Capt. M Altafur Rahman

Marine Surveyor & Consultant

Commercial Plot # 10 Between “G” & “H” Block Port Connecting Road, Halishahar H/E, Chittagong- 4216

3,339 16,695 16,695,000 12,497,877

7 Maj M Atiqur

Rahman

A2-8, Kalindi Aptts. Complex, 36, Indira Road Dhaka-1215 3,339 16,695 16,695,000 12,497,877 8 Mr. M Anis Ud Dowla ACI Centre 245 Tejgaon Industrial Area, Dhaka-1208 2,671 13,355 13,355,000 9,997,553 9 Mr. Margub Kabir

House-2A, Apt-A4, NAM Village, Road-1, Block-I, Banani, Dhaka-1213

667 3,335 3,335,000 2,496,581

10 Barrister Rafiqul Huq

Huq and Company 47/1, Purana Paltan Dhaka -1000 4,007 20,035 20,035,000 14,998,201 11 Mr. Samuel S. Chowdhury Square Centre 48 Mohakhali Commercial Area Dhaka-1212 2,672 13,360 13,360,000 10,001,296 12 Ms Ratna Patra Square Centre 48 Mohakhali Commercial Area Dhaka-1212 2,672 13,360 13,360,000 10,001,296 Sub- Total (Tk) 31,386 156,930 156,930,000 117,477,798 Grand Total 160,302 801,510 801,510,000 600,010,386

Note: As per condition of the agreement, the aforesaid individual as well as institutional investors will place their fund immediate before opening of public subscription.

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PURPOSE OF THE ISSUE

As a part of ACI’s vision to look for alternative funding arrangement and be pioneer in undertaking new product in the capital market, ACI Management envisage that raising of money through Zero Coupon Bonds would be an attractive option for the company.

Zero Coupon Bonds have primarily four advantages compared to other debt instruments from the perspective of both issuer and the investors:

The tax free benefits to all investors except bank, insurance and financial institutions. Short to long term tenure thereby addressing the requirement of the issuer.

Convertibility options into ordinary shares of the company – allowing investors to enjoy significant capital gain.

Reduced financing cost for ACI- a positive impact on ACI’s future profitability Overall this bond will create a win-win situation for both ACI and its holders.

USE OF PROCEEDS

ACI Pharmaceuticals is expected to be introducing three new lines of medicine products namely Anti Cancer, Hormone & Steroid and Amino Acid. For this new initiative, Company needs funding facilities to allow it to import capital machinery and carry out construction of physical facilities. Out of the total proceeds of BDT 1.00 billion that will be raised through issuance of zero-coupon bond, BDT 597,194,166 (i.e. approx. 60%) is earmarked for the expansion scheme of the pharmaceuticals division. The rest BDT 402,805,834 (approx. i.e. 40%) of the total fund will be utilized in repayment of its existing short term debt. The repayment would facilitate in bringing down current borrowings with banks and save the company from bearing the high interest rates attached with borrowing capital.

Anti cancer

Cancer is the term we give to a large group of diseases that vary in type and location but have one thing in common: abnormal cells growing out of control.

Chemotherapy is the use of anti-cancer of drugs. Anti-cancer drugs destroy cancer cells by stopping growth or multiplication at some point in their life cycles. Drugs may be administered intravenously (into a vein), orally (by mouth), by injection into a muscle, depending on the drug and the type of cancer.

Reason for Anti cancer drugs

The current statistics shows an increasing number of cancer patients throughout the country. The scarcity and excessive cost of anticancer and other specialized medicines are the emerging problems in treating the ailing humanities of Bangladesh. As Bangladesh is exempted from the WTO regulations until 2016, there will be an ample opportunity for our country to manufacture high-tech patented anticancer and other specialized products at competitive prices to face the post WTO challenges.

Hormone & Steroid

A chemical substance produced in the body that controls and regulates the activity of certain cells or organs. Many hormones and their analogues are used as medication. The most commonly prescribed hormones are estrogens and progestagens (as methods of hormonal contraception and as HRT), thyroxine (as levothyroxine, for hypothyroidism)

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Amino Acid

Amino acids are used by every cell of body and are used to build the proteins that human need to survive. They build the cells, repair tissues, produce enzymes, and play a key role in mental health. There are about 20 natural amino acids. These can be divided into two basic groups: essential and non-essential. The essential amino acids are those which body cannot produce and can be obtained through diet. The nonessential amino acids are just as important for healthy functioning as essential amino acids. Non-essential amino acids are produced by our system, namely the liver is responsible for manufacturing them.

Project Cost (Estimated)

Amount in BDT Particulars

Amino Acid Anti - Cancer Hormone &

Steroid Total

Land & Land Development 5,000,000 5,000,000 5,000,000 15,000,000

Building & Civil Construction 10,000,000 20,000,000 25,000,000 55,000,000

Machinery & Equipment 88,000,000 188,000,000 161,500,000 437,500,000

Installation & Erection 700,000 1,100,000 2,000,000 3,800,000

Office Equipment 186,000 345,000 375,000 906,000

Pre-operating & start-up cost 400,000 550,000 950,000 1,900,000

Contingencies 1,000,000 10,000,000 5,000,000 16,000,000

IDCP 12,503,349 26,568,522 23,633,516 62,705,387

Total Fixed Cost 117,789,349 251,563,522 223,458,516 592,811,387

Net Working Capital 1,290,169 1,470,022 1,622,588 4,382,779

Total Project cost 119,079,518 253,033,544 225,081,104 597,194,166

Financing Plan:

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ID Task Name 9 -J u n 9 -J u l 9 -A u g 9 -S ep 9 -O ct 9 -N o v 9 -D ec 1 0 -J an 1 0 -F eb 1 0 -M ar 1 0 -A p r 1 0 -M ay 1 0 -J u n 1 0 -J u l 1 0 -A u g 1 0 -S ep 1 0 -O ct 1 0 -N o v 1 0 -D ec 1 1 -J an 1 1 -F eb 1 1 -M ar 1 1 -A p r 1 1 -M ay 1 1 -J u n 1 1 -J u l A LAND PROCUREMENT 1 Location Finalization 2 Land Development

B LAYOUT & DESIGN

1 Layout of the Factory

2 Structural Drawing

3 Machinery Drawing

4 Prequalification of Contractor

5 BOQ & work order to the contractor

C CIVIL CONSTRUCTION

1 Civil Construction

2 Electrification

3 Drainage & Plumbing

D MACHINERY PROCUREMENT

1 Selection of the Machinery

2 L/C Opening/Advance

3 Shipment of the Machinery

4 Arrival of Machinery

5 Erection of Machinery

6 Commissioning of the plant

7 Trial Production & validation

8 Commercial Production

E DEVELOPMENT OF RM/PM

1 Qualitative & Quantitative Survey

2 Pack Design

3 Finalizing the RM/PM

4 Order Placement for RM/PM

5 Supply receive of the RM/PM

F REGULATORY PERMITS

1 Environmental Clearance

2 Necessary Licenses

Implementation Schedule of Anti cancer Project

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ID Task Name 9 -J u n 9 -J u l 9 -A u g 9 -S ep 9 -O ct 9 -N o v 9 -D ec 1 0 -J an 1 0 -F eb 1 0 -M ar 1 0 -A p r 1 0 -M ay 1 0 -J u n 1 0 -J u l 1 0 -A u g 1 0 -S ep 1 0 -O ct 1 0 -N o v 1 0 -D ec 1 1 -J an 1 1 -F eb 1 1 -M ar 1 1 -A p r

A

LAND PROCUREMENT

1 Location Finalization

2 Land Development

B

LAYOUT & DESIGN

1 Layout of the Factory

2 Structural Drawing

3 Machinery Drawing

4 Prequalification of Contractor

5 BOQ & work order to the contractor

C

CIVIL CONSTRUCTION

1 Civil Construction

2 Electrification

3 Drainage & Plumbing

D

MACHINERY PROCUREMENT

1 Selection of the Machinery

2 L/C Opening/Advance

3 Shipment of the Machinery

4 Arrival of Machinery

5 Erection of Machinery

6 Commissioning of the plant

7 Trial Production & validation

8 Commercial Production

E

DEVELOPMENT OF RM/PM

1 Qualitative & Quantitative Survey

2 Pack Design

3 Finalizing the RM/PM

4 Order Placement for RM/PM

5 Supply receive of the RM/PM

F

REGULATORY PERMITS

1 Environmental Clearance

2 Necessary Licenses

Implementation Schedule of Hormone & Steroid Project

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ID Task Name 9 -J u n 9 -J u l 9 -A u g 9 -S ep 9 -O ct 9 -N o v 9 -D ec 1 0 -J an 1 0 -F eb 1 0 -M ar 1 0 -A p r 1 0 -M ay 1 0 -J u n 1 0 -J u l 1 0 -A u g 1 0 -S ep 1 0 -O ct 1 0 -N o v 1 0 -D ec 1 1 -J an 1 1 -F eb 1 1 -M ar A LAND PROCUREMENT 1 Location Finalization 2 Land Development

B LAYOUT & DESIGN

1 Layout of the Factory

2 Structural Drawing

3 Machinery Drawing

4 Prequalification of Contractor

5 BOQ & work order to the contractor

C CIVIL CONSTRUCTION

1 Civil Construction

2 Electrification

3 Drainage & Plumbing

D MACHINERY PROCUREMENT

1 Selection of the Machinery

2 L/C Opening/Advance

3 Shipment of the Machinery

4 Arrival of Machinery

5 Erection of Machinery

6 Commissioning of the plant

7 Trial Production & validation

8 Commercial Production

E DEVELOPMENT OF RM/PM

1 Qualitative & Quantitative Survey

2 Pack Design

3 Finalizing the RM/PM

4 Order Placement for RM/PM

5 Supply receive of the RM/PM

F REGULATORY PERMITS

1 Environmental Clearance

2 Necessary Licenses

Implementation Schedule of Amino Project

2009 2010 2011

This schedule (Grid Chart) was prepared based on the assumption that the proceeds would be received in June 2009. However, the implementation schedule will be changed based on the collection of sales proceeds from the issuance of ZCBs.

Sd/- Sd/-

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Advanced Chemical Industries Limited (ACI) Alliance Financial Services Limited DESCRIPTION OF BUSINESS

Background

ACI Limited was established as the subsidiary of Imperial Chemical Industries (ICI) in the then East Pakistan in 1968. After independence, the company was incorporated in Bangladesh in 1973 as ICI Bangladesh Manufacturers Limited as a Public Limited Company. In 1992, the company was divested to local management and the name of the company changed to Advanced Chemical Industries (ACI) Limited. ACI inherited the rich ICI culture of product quality, customer service and social responsibility.

Initially in 1992, ACI started primarily with pharmaceutical business with a turnover of BDT 80 million only but later the new management brought about fundamental changes in the policies and in the year 2008 turnover grew to over BDT 7,365 million. The Company has diversified business interest in pharmaceuticals, agricultural including fishery & livestock and consumer brands. At present, ACI has three strategic business units along with 11 subsidiaries, 3 joint ventures and 1 associate.

ACI is a fast growing conglomerate that has substantial contribution in the economy of Bangladesh. In response to growing demands of the consumers of Bangladesh, ACI has diversified its business to include wide range of products in its portfolio. ACI has started its expansion policy by exploring and strengthening the pharmaceuticals wing further so that it can continue giving unswerving service to the consumers of Bangladesh.

ACI is the first company in Bangladesh to achieve ISO S001 in 1995 for quality management and also the first company to achieve ISO 14000 in 2000 for environmental management system. ACI is also the first company from Bangladesh to become the honorable member of United Nation Global Compact. It is the only Bangladeshi company which was declared as a notable COP (Communication on Progress) recognized by UNGC (United Nation Global Compact). ACI has been accepted as a founding member of community of Global Growth Companies by the World Economic Forum which is the most prestigious business networking organization in the world.

Important dates and milestone dates of ACI Limited

Date Events

1968 : Imperial Chemical Industries Pakistan Manufactures Limited (ICI Pakistan)

was established in the then East Pakistan.

24 January, 1973 : Incorporation of ICI Bangladesh Manufacturers Limited

24 January, 1973 : Commencement of Business

5 May, 1992 : Imperial Chemical Industries Pakistan Manufactures Limited divested 70% of

its shareholding to local management.

5 May, 1992 : The name of the company changed to Advanced Chemical Industries Limited

from ICI Bangladesh Manufactures Limited.

9 March, 1994 : Listed with Dhaka Stock Exchange

October 22, 1995 : Listed with Chittagong Stock Exchange

Nature of Business

ACI Limited is committed to providing customers with a broad range of quality products from its business operations. It has diversified its business in various sectors such as the health care division, consumers’ brands division, and agribusiness division. Other than its three major strategic business units, it has 11 subsidiaries, 3 joint ventures and 1 associate.