“Investment in capital market involves certain degree of risks. The investors are required to read the prospectus and risk factors carefully, assess their own financial conditions and risk taking ability before making their investment decisions.”
PUBLIC ISSUE OF 20,000,000 ORDINARY SHARES
ISSUE DATE OF THE PROSPECTUS: _________________
OFFER PRICE TK. 10.00 EACH AT PAR TOTALING TK. 200,000,000.00
Opening and closing date of subscription:
Opening date of subscription: ______________ Closing date of subscription: _______________
PROSPECTUS
Name of Issuer:
Name of Issue Managers:
Imperial Capital Limited
EBL Investments Limited
&
CAPM Advisory Limited
Page: ii
(a) Preliminary Information and Declarations: (i) Name(s), address(s), telephone number(s), web address(s), e-mail(s), fax number(s) and contact persons of the issuer, issue manager(s),
underwriter(s), auditors, credit rating company and valuer, where applicable;
Issuer
Name & Address Telephone & Fax Number, E-mail, Web Address Contact Person
The Company is not involved with Valuer; Credit rating is not applicable for the issuer. (ii) A person interested to get a prospectus may obtain from the issuer and the issue managers. (iii) “If you have any query about this document, you may consult the issuer, issue manager and underwriter”
Page: iv
(iv) “CONSENT OF THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE OR OFFER OF THESE SECURITIES UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2015. 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, MANAGING DIRECTOR, CHIEF FINANCIAL OFFICER, COMPANY SECRETARY, ISSUE MANAGER, ISSUE MANAGER’S CHIEF EXECUTIVE OFFICER, UNDERWRITERS, AUDITOR(S), VALUER AND/OR CREDIT RATING COMPANY (IF ANY)."
(v) ‘Risks in relation to the First Issue’ “This being the first issue of the issuer, there has been no formal market for the securities of the issuer. The face value of the securities is Tk. 10.00 (Ten) and the issue price is Tk. 10.00, i.e. the face value. The issue price has been determined and justified by the issuer and the issue managers as stated under the paragraph on “justification of issue price” should not be taken to be indicative of the market price of the securities after listing. No assurance can be given regarding an active or sustained trading of the securities or the price after listing."
(vi) ‘General Risk' "Investment in securities involves a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offer. For taking an investment decision, investors must rely on their own examination of the issuer and the offer including the risks involved. The securities have not been recommended by the Bangladesh Securities and Exchange Commission (BSEC) nor does BSEC guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of ‘risk factors’ given on page number(s) 150-156”
(vii) ‘BD Paints Limited’s Absolute Responsibility’ "The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this prospectus contains all material information with regard to the issuer and the issue, that the information contained in the prospectus are true, fair and correct in all material aspects and are not misleading in any respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect."
Page: v
(b) Availability of Prospectus
(i) Names, addresses, telephone numbers, fax numbers, website addresses and e-mail addresses and names of contact persons of the institutions where the prospectus and abridged version of prospectus are available in hard and soft forms; The Prospectus and abridged version prospectus in hard and soft forms of the Company shall be obtained from the following addresses:
Issuer
Name & Address Telephone & Fax Number, E-mail, Web Address Contact Person
Prospectus would also be available on the web sites of BSEC (www.sec.gov.bd) and at the Public Reference Room of the Bangladesh Securities and Exchange Commission (BSEC) for reading and studying.
(ii) Names and dates of the newspapers where abridged version of prospectus was published. Names and dates of the newspapers where abridged version of prospectus was published:
Sl. No. Name of the Newspaper Date of Publication
1
2
3
4
Page: vii
(iii) Definitions and Acronyms or Elaborations Acronyms or Elaborations:
A
“Articles” or “Articles of Association” or “AoA” The Articles of Association of BD Paints Limited, as amended
AGM Annual General Meeting
Allotment Letter of Allotment of shares
B
“Board” or “Board of Directors” or “our Board” The Board of Directors of BD Paints Limited, as duly constituted from time to time including any committees thereof
B.A. Bachelor of Arts
BAS Bangladesh Accounting Standards
BDPL BD Paints Limited
BDT Bangladeshi Taka
BFRS Bangladesh Financial Reporting Standards
BIDA Bangladesh Investment Development Authority
BO A/C Beneficiary Owner's Account
BSEC Bangladesh Securities and Exchange Commission
C
CAPMAL CAPM Advisory Limited
CDBL Central Depository Bangladesh Limited
Certificate Share Certificate
CFO Chief Financial Officer
CIB Credit Information Bureau
Commission Bangladesh Securities and Exchange Commission
“Memorandum” or “Memorandum of Association” or “MoA”
The Memorandum of Association of BD Paints Limited, as amended
M.Com Master of Commerce
M.Sc Master of Science
MBA Masters of Business Administration
MS-Word Microsoft word
N
NAV Net Asset Value
NRB Non Resident Bangladeshi
O
“Our Company” BD Paints Limited, a public limited company incorporated under the Companies Act
Offering Price Price of the Securities of BDPL
P
PE Price to Earnings
R
R & D Research and Development
RJSC Registrar of Joint Stock Companies and Firms
S
Securities Share of BD Paints Limited
Securities Market The Share Market of Bangladesh
Sponsors The sponsor shareholders of BD Paints Limited
Stock Holder Share Holder
Subscription Application Money
T
The Company/Issuer BD Paints Limited, a public limited company incorporated under the Companies Act
TT Telephonic Transfer
U
UK Pound United Kingdom Pound
USD United States Dollar
V
VAT Value Added Tax
W
WDV Written Down Value
Page: ix
Table of Contents CHAPTER (I): EXECUTIVE SUMMARY ................................................................................................ 1
(a) About the industry: .................................................................................................................................... 1
(b) About the Issuer: ........................................................................................................................................ 1
CHAPTER (II): CONDITIONS IMPOSED BY THE COMMISSION .......................................................... 8
DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM: ............................................. 8
CONDITIONS UNDER 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969: ..................... 8
CHAPTER (III): DECLARATION AND DUE DILIGENCE CERTIFICATES .............................................. 15
DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS, INCLUDING THE CEO OF THE
ISSUER IN RESPECT OF THE PROSPECTUS ................................................................................................... 15
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER ................................................................................... 16
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER ................................................................................... 18
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER ................................................................................... 20
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER ................................................................................ 22
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER ................................................................................ 24
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER ................................................................................ 26
CHAPTER (IV): ABOUT THE ISSUER................................................................................................. 27
Particulars of the Company: ............................................................................................................................ 27
Name of the Sponsors and Directors: ............................................................................................................ 27
Particulars of Auditor and Registrar to the Issue: ........................................................................................ 28
Name of the Stock Exchanges where the Securities to be listed: ............................................................. 28
CHAPTER (V): CORPORATE DIRECTORY OF THE ISSUER ............................................................... 29
CHAPTER (VI): DESCRIPTION OF THE ISSUER ................................................................................. 30
(b) General Information: .............................................................................................................................. 31
(c) Capital Structure: .................................................................................................................................... 37
(d) Description of Business: .......................................................................................................................... 44
(e) Description of Property: ........................................................................................................................ 53
(f) Plan of Operation and Discussion of Financial Condition: .............................................................. 71
(a) Internal and external sources of cash;.................................................................................... 72
(b) Any material commitments for capital expenditure and expected sources of funds for
such expenditure; ........................................................................................................................ 72
(c) Causes for any material changes from period to period in revenues, cost of goods sold,
other operating expenses and net income; ........................................................................... 72
(d) Any seasonal aspects of the issuer’s business; ...................................................................... 72
(e) Any known trends, events or uncertainties that may have material effect on the issuer’s
CHAPTER (XI): OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES ...................... 104
CHAPTER (XII): TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM . 105
Benefits from the Company during last five years: .................................................................................. 105
Directors and Subscribers’ Assets to the Company: ................................................................................. 106
CHAPTER (XIII): OWNERSHIP OF THE COMPANY’S SECURITIES................................................... 108
a) The names, addresses, BO ID Number of all shareholders of the company before IPO,
indicating the amount of securities owned and the percentage of the securities represented by
such ownership: ..................................................................................................................................... 108
b) There shall also be a table showing the name and address, age, experience, BO ID Number,
TIN number, numbers of shares held including percentage, position held in other companies of
all the directors before the public issue: ......................................................................................... 113
c) The average cost of acquisition of equity shares by the directors certified by the auditors:
(b) Utilization of the total amount of paid-up capital and share premium, if any, including the
sponsors’ contribution and capital raised of the issuer at the time of submission of prospectus,
in details with indication of use of such funds in the financial statements; ............................... 202
(c) If one of the objects is an investment in a joint venture, a subsidiary, an associate or any
acquisition, details of the form of investment, nature of benefit expected to accrue to the issuer
as a result of the investment, brief description of business and financials of such venture; . 202
(d) If IPO proceeds are not sufficient to complete the project, then source of additional fund must
be mentioned. In this connection, copies of contract to meet the additional funds are required
to be submitted to the Commission. The means and source of financing, including details of
bridge loan or other financial arrangement, which may be repaid from the proceeds of the
issue along with utilization of such funds; ........................................................................................ 202
(e) A schedule mentioning the stages of implementation and utilization of funds received through
public offer in a tabular form, progress made so far, giving details of land acquisition, civil
works, installation of plant and machinery, the approximate date of completion of the project
and the projected date of full commercial operation etc. The schedule shall be signed by the
Chief Executive Officer or Managing Director, Chief Financial Officer and Chairman on behalf
of Board of Directors of the issuer; .................................................................................................. 203
(f) If there are contracts covering any of the activities of the issuer for which the proceeds of sale
of securities are to be used, such as contracts for the purchase of land or contracts for the
construction of buildings, the issuer shall disclose the terms of such contracts, and copies of the
contracts shall be enclosed as annexure to the prospectus; ........................................................ 203
(g) If one of the objects of the issue is utilization of the issue proceeds for working capital, basis
of estimation of working capital requirement along with the relevant assumptions, reasons for
raising additional working capital substantiating the same with relevant facts and figures and
also the reasons for financing short with long term investments and an item-wise break-up of
last three years working capital and next two years projection; .............................................. 203
Page: xiv
(h) Where the issuer proposes to undertake one or more activities like diversification,
modernization, expansion, etc., the total project cost activity-wise or project-wise, as the case
may be; .................................................................................................................................................. 203
(i) Where the issuer is implementing the project in a phased manner, the cost of each phase,
including the phases, if any, which have already been implemented; ..................................... 203
(j) The details of all existing or anticipated material transactions in relation to utilization of the
issue proceeds or project cost with sponsors, directors, key management personnel, associates
and group companies; ........................................................................................................................ 204
(k) Summary of the project appraisal or feasibility report by the relevant professionals not
connected with the issuer, issue manager and registrar to the issue with cost of the project and
means of finance, weaknesses and threats, if any, as given in the appraisal or feasibility
(a) About the industry: Paint has been used over the century in our mankind and it has evidence that it can be found in the cave paintings as well. In today’s life paint is made artificially and being used in many different ways. There are various kind of paints: plastic emulsion, distemper, outer coat (weather proof), synthetic enamel, etc. Plastic emulsion and distemper are close substitutes of each other. Emulsion is basically used in high-end residence all over the country and distempers are cheaper products, having demand in semi-urban and rural markets. Weather coat is growing very fast and presently holds a significant market share. In recent years the paint industry of Bangladesh has been experienced positive growth and the growth has been continued in semi-urban and rural areas. This is because of increasing purchasing power. There is a total of 51 large, medium and small sized companies selling paint in Bangladesh. Of these companies, 45 companies manufacture paint within Bangladesh and 6 companies import paint. The paint Industry is playing an important role in the infrastructure development of the country by ensuring protection to fixed assets. The protection enabled by the paint coatings contributes to the longevity of the structure, resulting in GDP growth of the country. In 2015, the size of Bangladesh's decorative paint market was about Tk 2,550 crore, according to a number of paint manufacturers and Bangladesh Paint Manufacturer’s Association (BPMA). Average growth was around 8 to 10 percent in the last five years. At present, annual consumption stands at about 120,000 tones. Source: https://www.thedailystar.net/supplements/painting-the-future-bright-1331338-dated December 18, 2016
(b) About the Issuer:
Incorporation As Private Limited Company April 17, 2014, & C-115399/14
Name Change Arafat Paint & Chemical Industries Limited was changed to BD Paints Limited on September 04, 2016.
BD Paints Limited carried on business as local manufacturer of different types of paints. The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
Page: 2
(c) Financial Information: Major financial information of BD Paints Limited (BDPL) is as follows:
The Company started its commercial operation on April 17, 2014.
(d) Features of the issue and its objects:
Offer Price Tk. 10.00
Number of Shares 20,000,000
Offer Size Tk. 200,000,000.00
Purpose of Raising Fund Proceeds from Initial Public Offering (IPO) will be used for acquisition of machinery & equipment, construction and other civil works and for IPO Expenses
Date of Implementation Within 21 months after receiving IPO fund
10 Fire Insurance Islami Insurance Bangladesh Limited IIBL/TNB/FC-
0032/09/2018 28-Jul-20
11 BCCI The Barisal Chamber of Commerce & Industry 789 30-Jun-20
12 Explosive License Directorate of Explosive Authority, Barisal 660-3(M)-0063 31-Dec-20
13 ISO 9001:2015 Bureau of Assessment Services INT-000426 2017 9-Jan-21
Page: 4
(f) Promoters’ background: At the time of incorporation of the Company, the following persons were the subscribers to the memorandum:
Sl. No. Name of Promoter Present Status
1 Md. Amir Hossain Sponsor
2 Khaleda Begum Liyly Sponsor
3 Md. Junaed Hossain Sponsor
4 Md. Bellal Khan Managing Director
5 Ms. Farzana Akter Eva Sponsor
6 Md. Amin Ur Rashid Sponsor Shareholder
7 Mst. Shahanaz Akter Sponsor Shareholder
8 Akhfa Nur Sponsor
Their background is stated below: Md. Amir Hossain, Sponsor Md. Amir Hossain, Father’s Name- Late Haji Abdul latif Miah, Mother’s Name- Zinnatun Nesa, Address: House-210, Nadia Villa, South Kalibari Road, Barisal Sadar, Barisal. He was born on 12th February, 1965. He is a reputed businessman having 25 years of experience in the field of paints and chemical related industry. Khaleda Begum Liyly, Sponsor Khaleda Begum Liyly, Husband’s Name- Md. Amir Hossain, Mother’s Name-Rokeya Begum, Address- Address: House-210, Nadia Villa, South Kalibari Road, Barisal Sadar, Barisal. She was born on respective muslim family in the year 1964. She is a reputed businesswoman having 22 years of experience in the field of paints and chemical related industry. Md. Junaed Hossain, Sponsor Md. Junaed Hossain, Father’s Name- Md. Amir Hossain, Mother’s Name- Khaleda Begum, Address: House-210, Nadia Villa, South Kalibari Road, Barisal Sadar, Barisal. He was borne in 18th August, 1984. He is a young promising businessman and has an early entrance in the industry having 10 years of professional business experience. Md. Bellal Khan, Managing Director Md. Bellal Khan, S/O- Late Abdus Sobhan Khan, Mother’s Name- Liyly Begum, Address: Khan Mansion, 617 College Road, Barisal Sadar, Barisal. He was born in 16th August 1985. He completed his B.Sc (Honors), M.Sc. (Statistics) from Jagannath University, Dhaka. After completing his graduation, he engages in the field of business and having 10 years of experience in the field of paints and chemical manufacturing industry. With his dynamic leadership, vision and sincere exertion BD Paints Limited able to get a strong position in the paints market of Bangladesh. He is the honorable member of Dhaka Club, Barisal Club and Rotary Club. He visited India, Thailand, Malaysia, China, Japan and Singapure for business purpose. Ms. Farzana Akter Eva, Sponsor Ms. Farzana Akter Eva, Husband Name- Md. Rasel, Mother’s Name- Khaleda Begum, Address: House-210, Nadia Villa, South Kalibari Road, Barisal Sadar, Barisal born in 1985. She completed Graduation and Master’s degree. After completed her graduation she involved in business and have 10 years of professional experience. Md. Amin-Ur-Rashid, Sponsor Shareholder Md. Amin-Ur-Rashid, S/O- Late Harun-Ur- Rashid, Address: Akon Bari, 453, West Chandkathi, Jhalokathi. He completed his B. Sc (Botani), M.Sc., MBA, L.L.B from National University. In 2001, he started his business career and having 17 years of professional experience in manufacturing industry.
Page: 5
Mst. Shahanaz Akter, Sponsor Shareholder Mst. Shahanaz Akter, Husband’s Name-Md. Azmol Hossain, Mother’s Name-Liyly Begum, Address- Vill- Vodrason, Minar Bari, Narayangonj. She was born on 18th January 1980. She involved in business and having 12 years of professional experience. Akhfa Nur, Sponsor Akhfa Nur, Father’s Name- Late Md. Matiur Rahman, Mother’s Name- Latifa Alam, Address- 202/8, Haji Salimuddin Mollah, Middle Baddah, Gulshan, Dhaka. Her birth date is 1st March, 1985. She involved in business and having 08 years of professional experience.
(g) Capital structure and history of capital raising: The Company intends to issue 20,000,000 ordinary shares of Tk. 10.00 each at par through Initial public offering (IPO) totaling to Tk. 200,000,000.00.
Particulars No. of Shares
Face Value (Tk.)
Issue Price (Tk.)
Amount in Taka
Authorized Capital 100,000,000 10.00 10.00 1,000,000,000
Before IPO:
Paid up capital 50,000,000 10.00 10.00 500,000,000
After IPO:
To be issued through IPO 20,000,000 10.00 10.00 200,000,000
Paid up capital (Post IPO) 70,000,000 10.00 10.00 700,000,000
The Company has raised its paid-up capital in following phases:
Particulars of Allotment
Date of Allotment
Form of Consideration (No. of Shares)
Face Value
of Share (Tk.)
Paid-up Capital
In cash Other than
in cash Bonus
1st (subscriber to the Memorandum &
Articles of Association at the time of incorporation)
Method 1: Net Asset Value (NAV) per share/Equity based valuation 14.35
Method 2: Historical Earnings based valuation 12.14
Method 3: Average market price of similar stock based valuation 1,517.67
Page: 6
(i) Others:
a) DECLARATION OF MATERIAL CHANGES
We, the Issuer, declare that we did not make any material changes including raising of paid-up capital after the date of audited financial statements as included in the prospectus.
Sd/- Md. Bellal Khan Managing Director
b) ISSUE MANAGERS DECLARATION IN CONNECTION WITH ISSUER
We, the Issue Managers, declared that we do not have any connection with the Issuer, nor any connected persons of us are connected with the Issuer. Moreover, we do not have any connection with the connected persons of the Issuer nor hold any securities thereof.
Sd/- Md. Salauddin Sikder FCMA CEO & Managing Director Imperial Capital Limited
Sd/- Tahid Ahmed Chowdhury, FCCA
Managing Director EBL Investments Limited
Sd/- Tania Sharmin
Managing Director & CEO CAPM Advisory Limited
c) MANAGEMENT DECLARATION REGARDING THE FILLING OF PROSPECTUS AND RELEVANT DOCUMENTS We have complied with Companies Act 1994, The Securities & Exchange Rules 1987 and other applicable rules and regulations while furnishing the information in the prospectus. Moreover, we have maintained the requirement relating to the rules, notification, guidelines, and instruction as provided by the Bangladesh Securities and Exchange Commission (BSEC).
The information which has been provided in the prospectus is true, fair and adequate to enable the investors to make a well-informed decision for investment in the proposed issue and such declaration are in accordance with the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015.
Sd/- Md. Bellal Khan Managing Director
Page: 7
d) PRE-IPO & POST IPO SHAREHOLDING STRUCTURE OF SPONSORS AND DIRECTORS
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director 5,000,000 10.00% 7.14%
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director 4,500,000 9.00% 6.43%
5 Mohammad Shaheenul Islam Independent
Director - 0.00% 0.00%
6 Md. Amir Hossain Sponsor - 0.00% 0.00%
7 Khaleda Begum Liyly Sponsor - 0.00% 0.00%
8 Md. Junaed Hossain Sponsor - 0.00% 0.00%
9 Ms. Farzana Akter Eva Sponsor - 0.00% 0.00%
10 Md. Amin Ur Rashid Sponsor
Shareholder 1,500,000 3.00% 2.14%
11 Mst. Shahanaz Akter Sponsor
Shareholder 3,200,000 6.00% 4.57%
12 Akhfa Nur Sponsor - 0.00% 0.00%
Total 25,700,000 51.40% 36.71%
e) TERMINATION CLAUSES OF LEASED DEED MADE WITH BSCIC
• If the Lessee be not desirous of renewing this lease after 99 years the Lessor shall at cost of the Lessee do so for such further period and on such terms, covenants and conditions as the Lessor may then determine.
• If the Lessee be not desirous of renewing the lease after 99 years he shall be at liberty to remove all such buildings, structures & machineries etc. erected or fixed by him within three months of the expiry of this lease or such further time as the Lessor may grant, on payment in advance of the rent for such period, part of month being always counted as a full month. Anything (including buildings & machineries) not removed within the prescribed or extended time shall vest in and be the absolute property of the Lessor frees from all claims whatsoever from anybody and the Lessor may remove the same and recover the cost of doing so from the Lessee.
• In the event of the Lessee failing to quit or give up peaceable possession of the demised property in clean good order and condition on the determination of this lease whether by notice or efflux of time or of such further times as may be allowed to the Lessee, the Lessor may to be forthwith re-enter into or upon the demised property and summarily eject the Lessee or any other persons or person therein without intervention of any Court of Law and may retain as his absolute property free from all claims and encumbrances whatsoever from anybody including the Lessee and/or sell free from such claims and encumbrances whatsoever all or any of the goods or things found upon the demised property. The Lessor may further have the demised property put into clean and good order and condition and all such costs shall be recovered from out of the said sale proceed and /or from the Lessee.
Page: 8
CHAPTER (II): CONDITIONS IMPOSED BY THE COMMISSION DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM: As per provisions of the Depository Act, 1999 and regulations made there under, share of the Company will be issued in dematerialized form only and for this purpose BD Paints Limited will sign an agreement with the Central Depository Bangladesh Limited (CDBL). Therefore, all transfers, transmissions, splitting or conversions will take place on the Central Depository Bangladesh Limited system and any further issuance of shares (including rights and bonus) will also be issued in dematerialized form only. CONDITIONS UNDER 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969:
PART–A
1. The Company shall go for Initial Public Offer (IPO) for 2,00,00,000 ordinary shares of Tk. 10.00
each at par totaling to Tk. 20,00,00,000.00 (Taka Twenty Crore only) following the Securities and Exchange Ordinance, 1969, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the Depository Act, 1999 and rules made there under.
2. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in 4 (Four) national daily newspapers (two in Bangla and two in English), within 02 (two) working days of issuance of this consent letter. The issuer shall post the full prospectus, vetted by Commission, in the issuer’s website and shall also put on the websites of the Commission, stock exchanges, and the issue manager, within 3 (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 the Commission, the stock exchanges and the issue manager a diskette containing the text of the vetted prospectus in “MS -Word” format.
3. The company shall submit 40 (Forty) copies of the printed prospectus to the Commission for official record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper.
4. The issuer company and the issue manager shall ensure transmission of the prospectus and its abridged version for NRBs through email to the Bangladesh Embassies and Missions abroad within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper. A compliance report shall be submitted in this respect to the Commission jointly by the issuer and the Issue Manager within 02 (Two) working days from the date of said transmission of the prospectus.
5. The following declaration shall be made by the company in the prospectus, namely: -
“Declaration about Listing of Shares with the stock exchange (s):
None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy-Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy-Five) days, as the case may be. In case of non-refund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) 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 07 (Seven) days of expiry of the aforesaid 15 (Fifteen) days’ time period allowed for refund of the subscription money.”
Page: 9
6. All applicants shall apply for a minimum lot of 500 shares worth Taka 5,000/- (Taka five thousand only) or its multiples.
7. The IPO shall stand cancelled in case of under-subscription collectively above 35%. In such an event, the issuer and issue manger shall inform the Commission within 2 (two) working days and release the subscription money within 10 (ten) working days after receiving verification report from CDBL and the information from exchanges regarding subscription.
8. 20% of the securities reserved for other general public shall be reserved for ¶wZMÖ ’̄ ¶z`ª wewb‡qvMKvix.
In case of under-subscription under any of sub-categories of eligible investors category or general public category, the unsubscribed portion shall be added to other sub-category of the same category. In case of over subscription in the general public category, the issuer and the issue manager shall jointly conduct an open lottery. In case of over subscription in the eligible investors’ category, securities shall be allotted on pro-rata basis. No eligible investor shall apply for more than 2% (two percent) of the total securities reserved for the eligible investors.
9. An applicant cannot submit more than two applications, one in his/her own name and the other jointly with another person. In case, an applicant submits more than two applications, all applications will be treated as invalid and will not be considered for allotment purpose. In addition, 15% (fifteen) of the application money will be forfeited by the Commission and the balance amount will be refunded to the applicant.
10. The applicants who have applied for more than two applications using same bank account, their application will not be considered for lottery and the Commission will forfeit 15% of their subscription money.
11. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information in the application shall make the application liable to rejection and subject to forfeiture of 25% of the application money and/or forfeiture of share (unit) before or after issuance of the same by the issuer. The said forfeited application money or share (unit) will be deposited in account of the Bangladesh Securities and Exchange Commission (BSEC). This is in addition to any other penalties as may be provided for by the law.
12. 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.
13. Shares not allotted at the time of according this consent, but allotted after listing, in favor of sponsors, directors or shareholders having 10% or more shares, other than alternative investment funds, through stock dividends, shall be subject to a lock-in period of 02(two) years from the date of issuance of the prospectus.
14. If any share of Sponsors/Directors/Promoters is in paper format, it shall be handed over to securities custodian registered with the Commission and shall remain held till completion of lock-in period and the name of the securities custodian shall be furnished to the Commission jointly by the issuer and issue manager, along with a confirmation thereof from the custodian, within one week of listing of the shares with the stock exchange(s). Or they (shares of Sponsors/ Directors/ Promoters) can be demated and shall remain in lock-in under CDBL system and issuer shall submit a dematerialization confirmation report generated by CDBL and attested by Managing Director of the company along with the lock-in confirmation to the Commission within one week of listing of the shares with the stock exchange(s). In respect of shares other than Sponsors/Directors/Promoters the issuer will ensure their lock-in of those shares and submit a statement to this effect to the Commission.
15. The company shall not declare any dividend/bonus shares before listing of its capital with any Exchange from the date of this consent for raising of capital.
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16. The company shall not engage itself into any merger/amalgamation or acquisition activities without taking “No Objection” from the Commission, on the scheme of the said merger/amalgamation or acquisition, as recommended by the Board of Directors, before approval by the shareholders in General Meeting.
PART–B
Application Process
Step-1 (Applicant)
1. An applicant for public issue of securities shall submit application/buy instruction to the Stockbroker/Merchant Banker where the applicant maintains customer account, within the cut-off date (i.e. the subscription closing date), which shall be the 25th (twenty fifth) working day from the date of publication of abridged version of prospectus.
2. The application/buy instruction may be submitted in prescribed paper or electronic form, which shall contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time: (a) Other than non-resident Bangladeshi (NRB) and Foreign applicants shall make the application
money and service charge available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. In case the application is made through a margin account, the application money shall be deposited separately and the Stockbroker/Merchant Banker shall keep the amount segregated from the margin account, which shall be refundable to the applicant, if become unsuccessful.
(b) Non-resident Bangladeshi (NRB) and Foreign applicants shall submit bank drafts (FDD), issued
in favor of the Issuer for an amount equivalent to the application money, with their application to the concerned Stockbroker/Merchant Banker. A Non-resident Bangladeshi (NRB) and Foreign applicant may also submit a single draft against 02(two) applications made by him/her, i.e. one in his/her own name and the other jointly with another person. The draft (FDD) shall be issued by the Bank where the applicant maintains Foreign Currency account debiting the same account and provide the customer with a certificate mentioning the FC account number which has been debited to issue the FDD. The applicant shall also submit the certificate with their application. No banker shall issue more than two drafts from any Foreign Currency account for any public issue. At the same time, the applicant shall make the service charge available in respective customer account maintained with the Stockbroker/Merchant Banker.
(c) Eligible investors shall submit application through the electronic subscription system of
the exchange(s) and deposit the full amount intended to subscribe by the method as determined by the exchange(s).
Step-2 (Intermediary)
3. The Stockbroker/Merchant Banker shall maintain a separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/Merchant Banker shall: a) post the amount separately in the customer account (other than NRB and Foreign applicants),
and upon availability of fund, block the amount equivalent to the application money;
b) accumulate all the application/buy instructions received up to the cut-off date, deposit the amount in the “Public Issue Application Account” maintained with its bank within the first banking hour of next working day of the cut-off date;
c) instruct the banker to block the account for an amount equivalent to the aggregate application money and to issue a certificate in this regard.
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4. Banker of the Stockbroker/Merchant Banker shall block the account as requested for, issue a certificate confirming the same and handover it to the respective Stockbroker/Merchant Banker.
5. For Non-resident Bangladeshi (NRB) and Foreign applicants, the Stockbroker/Merchant Banker shall prepare a list containing the draft information against the respective applicant’s particulars.
6. The Stockbroker/Merchant Banker shall prepare category wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the cut-off date, send to the respective Exchange, the lists of applicants in electronic (text format with tilde ‘~’ separator) format, the certificate(s) issued by its banker, the drafts and certificates received from Non-resident Bangladeshi (NRB) and Foreign applicants and a copy of the list containing the draft information.
7. On the next working day, the Exchanges shall provide the Issuer with the information received from the Stockbroker/Merchant Bankers, the drafts and certificates submitted by Non-resident Bangladeshi (NRB) and Foreign applicants and the list containing the draft information. Exchanges shall verify and preserve the bankers’ certificates in their custody.
8. The application/buy instructions shall be preserved by the Stockbroker/Merchant Bankers up to 6 months from listing of the securities with exchange. Step-3 (Issuer)
9. The Issuer shall prepare consolidated list of the applications and send the applicants’ BOIDs in electronic (text) format in a CDROM to CDBL for verification. The Issuer shall post the consolidated list of applicants on its website and websites of the Exchanges. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not.
10. On the next working day, CDBL shall provide the Issuer with an updated database of the applicants containing BO Account Number, Name, Addresses, Parents’ Name, Joint Account and Bank Account information along with the verification report.
11. After receiving verification report and information from CDBL, the Issuer shall scrutinize the applications, prepare category wise consolidated lists of valid and invalid applications and submit report of final status of subscription to the Commission and the Exchanges within 10 (ten) working days from the date of receiving information from the Exchanges.
12. The Issuer and the issue manager shall conduct category wise lottery with the valid applications within 03 (three) working days from the date of reporting to the Commission and the Exchanges, if do not receive any observation from the Commission or the Exchanges.
13. The Issuer and issue manager shall arrange posting the lottery result on their websites within 06 (six) hours and on the websites of the Commission and Exchanges within 12 (twelve) hours of lottery.
14. Within 02 (two) working days of conducting lottery, the Issuer shall:
a) send category wise lists of the successful and unsuccessful applicants in electronic (text format with tilde ‘~’ separator) format to the respective Exchange.
b) send category wise lists of unsuccessful applicants who are subject to penal provisions as per conditions of the Consent Letter issued by the Commission in electronic (text format with tilde ‘~’ separator) format to the Commission and Exchanges mentioning the penalty amount against each applicant.
c) issue allotment letters in the names of successful applicants in electronic format with digital signatures and send those to respective Exchange in electronic form.
d) send consolidated allotment data (BOID and number of securities) in electronic text format in a CDROM to CDBL to credit the allotted shares to the respective BO accounts.
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Step-4 (Intermediary)
15. On the next working day, Exchanges shall distribute the information and allotment letters to the Stockbroker/Merchant Bankers concerned in electronic format and instruct them to: a) remit the amount of successful (other than NRB and Foreign) applicants to the Issuer’s
respective Escrow Account opened for subscription purpose, and unblock the amount of unsuccessful applicants;
b) send the penalty amount of other than NRB and Foreign applicants who are subject to penal provisions to the Issuer’s respective Escrow Accounts along with a list and unblock the balance application money;
16. On the next working day of receiving the documents from the Exchanges, the
Stockbrokers/Merchant Banker shall request its banker to: a) release the amount blocked for unsuccessful (other than NRB and foreign) applicants;
b) remit the aggregate amount of successful applicants and the penalty amount of unsuccessful
applicants (other than NRB and foreign) who are subject to penal provisions to the respective ‘Escrow’ accounts of the Issuer opened for subscription purpose.
17. On the next working day of receiving request from the Stockbrokers/Merchant Bankers, their
bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the Issuer’s ‘Escrow’ account.
18. Simultaneously, the stockbrokers/Merchant Bankers shall release the application money blocked in the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts and send documents to the Exchange evidencing details of the remittances made to the respective ‘Escrow’ accounts of the Issuer. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions. The Stockbroker/Merchant Banker shall be entitled to recover the withdrawal charges, if any, from the applicant who wants to withdraw the application money, up to an amount of Tk. 5.00 (five) per withdrawal.
19. All drafts submitted by NRB or Foreign applicants shall be deposited in the Issuer’s respective ‘Escrow’ accounts and refund shall be made by the Issuer by refund warrants through concerned stockbroker or merchant banker or transfer to the applicant’s bank account (FC account which has been debited to apply by NRB or foreign applicants) through banking channel within 10 (ten) working days from the date of lottery. Miscellaneous:
20. The Issuer, Issue Manager(s), Stockbrokers and Merchant Bankers shall ensure compliance of the above.
21. The bank drafts (FDD) shall be issued considering TT Clean exchange rate of Sonali Bank Ltd. on the date of publication of abridged version of prospectus.
22. Amount deposited and blocked in the “Public Issue Application Account” shall not be withdrawn or transferred during the blocking period. Amount deposited by the applicants shall not be used by the Stockbrokers/Merchant Bankers for any purpose other than public issue application.
23. The Issuer shall pay the costs related to data transmission, if claimed by the Exchange concerned up to an amount of Tk. 2,00,000.00 (taka two lac) for a public issue.
24. The Stockbroker/Merchant Bankers shall be entitled to a service charge of Tk.5.00 (taka five) only per application irrespective of the amount or category. The service charge shall be paid by the applicant at the time of submitting application.
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25. The Stockbroker/Merchant Banker shall provide the Issuer with a statement of the remittance and drafts sent.
26. The Issuer shall accumulate the penalty amount recovered and send it to the Commission through a bank draft/payment order issued in favor of the Bangladesh Securities and Exchange Commission.
27. The concerned Exchange are authorized to settle any complaints and take necessary actions against any Stockbroker/Merchant Banker in case of violation of any provision of the public issue application process with intimation to the Commission.
PART–C
1. The issue manager shall carefully examine and compare the published prospectus and its abridged
version on the date of publication with the copies vetted by the Commission. If any discrepancy 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 the Commission and the stock exchanges concerned. In this regard, the issue manager shall submit a compliance report to the Commission within 5 working days from the date of such publications.
2. The fund collected through Public Offering shall not be utilized prior to listing with Exchange(s) and that utilization of the said fund shall be affected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc.
3. The company shall furnish status report on utilization of Public Offering proceeds audited by foreign affiliated auditors and authenticated by the board of directors to the Commission and the Exchanges within 15 (Fifteen) days of the closing of each month until such fund is fully utilized, as mentioned in the schedule contained in the prospectus. The issuer shall simultaneously post the status report in its website and Exchanges shall also post the same in company information contained in websites of the Exchanges. In the event of any irregularity or inconsistency, the Commission may employ or engage any person to examine whether the issuer has utilized the proceeds for the purpose disclosed in the prospectus.
4. While auditing the utilization of IPO proceeds, the auditors will perform their jobs under the following terms of reference (TOR) and confirm the same in their report/certificate:
(a) Whether IPO proceeds have been utilized for the purposes/heads as specified in the
prospectus;
(b) Whether IPO proceeds have been utilized in line with the condition (if any) of the Commission’s consent letter;
(c) Whether utilization of IPO proceeds have been completed within the time schedule/implementation schedule as specified in the published prospectus;
(d) Whether utilization of IPO proceeds is accurate and for the purpose of the company as mentioned/specified in the published prospectus; and
(e) The auditors should also confirm that: (i) assets have been procured/imported/constructed maintaining proper/required procedure as well as at reasonable price; and (ii) auditors’ report has been made on verification of all necessary documents/papers/vouchers in support of IPO proceeds making reconciliation with Bank Statement.
5. All transactions, excluding petty cash expenses, shall be affected by crossed cheques or bank
transfers.
Page: 14
6. Proceeds of the public offering shall not be transferred to any other bank account before listing with the Exchange(s). The proceeds shall not be used for any purpose other than those specified in the prospectus without any valid ground. Any deviation in respect of time or purpose of utilization must have prior approval of the shareholders in the general meeting and if approved by the shareholders, the meeting resolution shall be submitted to the Commission and the Exchanges along with reasonable explanations.
7. If any quarter or half-year of the financial year ends after publication of the abridged version of prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the said quarterly/half yearly financial statements in accordance with the Commission’s Notification SEC/CMRRCD/2008-183/admin/03-34 dated September 27, 2009 and Rules 13 of the Securities and Exchange Rules, 1987.
8. In the event of arising issues concerning Price Sensitive Information as defined under the wmwKDwiwUR I
G·‡PÄ Kwgkb (myweav‡fvMx e¨emv wbwl×KiY) wewagvjv 1995 after publication of the abridged version of
prospectus and before listing of its securities with any exchange, the company shall disseminate/transmit/submit the information as price sensitive in accordance with the Commission’s Notification No. SEC/SRMI/200-953/1950 dated October 24, 2000.
PART–D
1. As per provision of the Depository Act, 1999 & Regulations made thereunder, shares will only be
issued in dematerialized condition. All transfer/transmission/splitting will take place in the depository system of Central Depository Bangladesh Ltd. (CDBL) and any further issuance of shares (including rights/bonus) will be made in dematerialized form only.
2. The issuer and the issue manager shall ensure due compliance of all the above conditions, the ‘Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015’ and the listing regulations of the Exchanges.
3. The Commission may impose further conditions/restrictions etc. from time to time as and when considered necessary which shall also be binding upon the issuer company.
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CHAPTER (III): DECLARATION AND DUE DILIGENCE CERTIFICATES
Annexure-A DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS, INCLUDING THE CEO OF THE ISSUER IN RESPECT OF THE PROSPECTUS
[Rule 4 (1)(d)] This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity, accuracy and adequacy 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 actions against any or all of us as it may deem fit. We also confirm that full and fair disclosures have been made in this prospectus to enable the investors to make a well informed decision for investment. Sd/- Sd/- Mrs. Aysha Siddika Md. Bellal Khan Chairman Managing Director Sd/- Sd/- Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director Director Sd/- Mohammad Shaheenul Islam
Independent Director
Date: September 08, 2018
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Annexure-B
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER (IMPERIAL CXAPITAL LIMITED)
[Rule 4 (1) (d)]
To The Bangladesh Securities and Exchange Commission Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited. Dear Sir,
We, the issue manager to the above-mentioned forthcoming issue, state and confirm as follows: (1) We have examined all the documents submitted with the application for the above mentioned public
issue, visited the premises of the issuer and interviewed the Chairperson, Directors and key management personnel of the issuer in connection with the finalization of the prospectus pertaining to the said issue;
(2) On the basis of such examination and the discussions with the directors, officers and auditors of the
issuer, 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.
WE CONFIRM THAT:
(a) The prospectus filed with the Commission is in conformity with the documents, materials and papers relevant to the issue;
(b) All the legal requirements relating to the issue as also in the rules, notification, guidelines, instructions,
etc. framed/issued by the Commission, other competent authorities in this behalf and the Government have been duly complied with;
(c) The disclosures made in prospectus are true, fair and adequate to enable the investors to make a
well informed decision for investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 1994, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 and other applicable laws;
(d) Besides ourselves, all the intermediaries named in the prospectus are registered with the Commission
and that till date such registrations are valid; (e) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting
commitments;
(f) The proposed activities of the issuer for which the funds are being raised in the present issue fall within the ‘main objects’ listed in the object clause of the Memorandum of Association or other charter of the issuer and that the activities which have been carried out till now are valid in terms of the object clause of its Memorandum of Association;
(g) Necessary arrangements have been made to ensure that the moneys to be received pursuant to the issue shall be kept in a separate bank account and shall be used for the purposes disclosed in the use of proceeds section of the prospectus;
(h) All the applicable disclosures mandated in the Bangladesh Securities and Exchange Commission
(Public Issue) Rules, 2015 have been made in addition to other disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision;
Page: 17
(i) We enclose a note explaining how the process of due diligence has been exercised by us in view of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, sponsors experiences etc. We also confirm that the due diligence related process, documents and approval memos shall be kept in record by us for the next 5 (five) years after the IPO for any further inspection by the Commission;
(j) We enclose a checklist confirming rule-wise compliance with the applicable provisions of the
Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 containing details such as the rule number, its text, the status of compliance, page numbers of the prospectus where the rules has been complied with and our comments, if any;
(k) We also declare that we have managed the public issue of following issuers in the last 05 (five) years:
Sd/- Md. Salauddin Sikder FCMA Place: Dhaka CEO & Managing Director Date: February 25, 2019 Imperial Capital Limited
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Annexure-B
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER (EBL INVESTMENTS LIMITED)
[Rule 4 (1) (d)]
To The Bangladesh Securities and Exchange Commission Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited. Dear Sir, We, the issue manager to the above-mentioned forthcoming issue, state and confirm as follows: (3) We have examined all the documents submitted with the application for the above mentioned public
issue, visited the premises of the issuer and interviewed the Chairperson, Directors and key management personnel of the issuer in connection with the finalization of the prospectus pertaining to the said issue;
(4) On the basis of such examination and the discussions with the directors, officers and auditors of the
issuer, 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.
WE CONFIRM THAT: (l) The prospectus filed with the Commission is in conformity with the documents, materials and papers
relevant to the issue; (m) All the legal requirements relating to the issue as also in the rules, notification, guidelines, instructions,
etc. framed/issued by the Commission, other competent authorities in this behalf and the Government have been duly complied with;
(n) The disclosures made in prospectus are true, fair and adequate to enable the investors to make a
well informed decision for investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 1994, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 and other applicable laws;
(o) Besides ourselves, all the intermediaries named in the prospectus are registered with the Commission
and that till date such registrations are valid; (p) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting
commitments; (q) The proposed activities of the issuer for which the funds are being raised in the present issue fall
within the ‘main objects’ listed in the object clause of the Memorandum of Association or other charter of the issuer and that the activities which have been carried out till now are valid in terms of the object clause of its Memorandum of Association;
(r) Necessary arrangements have been made to ensure that the moneys to be received pursuant to the issue shall be kept in a separate bank account and shall be used for the purposes disclosed in the use of proceeds section of the prospectus;
Page: 19
(s) All the applicable disclosures mandated in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 have been made in addition to other disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision;
(t) We enclose a note explaining how the process of due diligence has been exercised by us in view
of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, sponsors experiences etc. We also confirm that the due diligence related process, documents and approval memos shall be kept in record by us for the next 5 (five) years after the IPO for any further inspection by the Commission;
(u) We enclose a checklist confirming rule-wise compliance with the applicable provisions of the
Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 containing details such as the rule number, its text, the status of compliance, page numbers of the prospectus where the rules has been complied with and our comments, if any;
(v) We also declare that we have managed the public issue of following issuers in the last 05 (five)
3 Silco Pharmaceuticals Ltd. (Approved by BSEC on 19 DEC. 2018)
10.00 Cash Dividend -
Stock Dividend -
Sd/- Tahid Ahmed Chowdhury, FCCA Place: Dhaka Managing Director Date: February 25, 2019 EBL Investments Limited
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Annexure-B
DUE DILIGENCE CERTIFICATE BY ISSUE MANAGER (CAPM ADVISORY LIMITED)
[Rule 4 (1) (d)]
To The Bangladesh Securities and Exchange Commission Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited. Dear Sir, We, the issue manager to the above-mentioned forthcoming issue, state and confirm as follows: (1) We have examined all the documents submitted with the application for the above mentioned public
issue, visited the premises of the issuer and interviewed the Chairperson, Directors and key management personnel of the issuer in connection with the finalization of the prospectus pertaining to the said issue;
(2) On the basis of such examination and the discussions with the directors, officers and auditors of the
issuer, 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.
WE CONFIRM THAT: (a) The prospectus filed with the Commission is in conformity with the documents, materials and papers
relevant to the issue; (b) All the legal requirements relating to the issue as also in the rules, notification, guidelines, instructions,
etc. framed/issued by the Commission, other competent authorities in this behalf and the Government have been duly complied with;
(c) The disclosures made in prospectus are true, fair and adequate to enable the investors to make a
well informed decision for investment in the proposed issue and such disclosures are in accordance with the requirements of the Companies Act, 1994, the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 and other applicable laws;
(d) Besides ourselves, all the intermediaries named in the prospectus are registered with the Commission
and that till date such registrations are valid; (e) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting
commitments; (f) The proposed activities of the issuer for which the funds are being raised in the present issue fall
within the ‘main objects’ listed in the object clause of the Memorandum of Association or other charter of the issuer and that the activities which have been carried out till now are valid in terms of the object clause of its Memorandum of Association;
(g) Necessary arrangements have been made to ensure that the moneys to be received pursuant to the issue shall be kept in a separate bank account and shall be used for the purposes disclosed in the use of proceeds section of the prospectus;
Page: 21
(h) All the applicable disclosures mandated in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 have been made in addition to other disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision;
(i) We enclose a note explaining how the process of due diligence has been exercised by us in view
of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, sponsors experiences etc. We also confirm that the due diligence related process, documents and approval memos shall be kept in record by us for the next 5 (five) years after the IPO for any further inspection by the Commission;
(j) We enclose a checklist confirming rule-wise compliance with the applicable provisions of the
Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 containing details such as the rule number, its text, the status of compliance, page numbers of the prospectus where the rules has been complied with and our comments, if any;
(k) We also declare that we have managed the public issue of following issuers in the last 05 (five)
Sd/- Tania Sharmin Place: Dhaka Managing Director & CEO Date: February 25, 2019 CAPM Advisory Limited
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Annexure-C
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER (NBL CAPITAL AND EQUITY MANAGEMENT LIMITED)
[Rule 4 (1)(d)]
To The Bangladesh Securities and Exchange Commission
Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited.
Dear Sir, 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 discussions 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) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker
and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 25,00,00,000 (Twenty Five Crore Only) and we have the capacity to underwrite a total amount of Tk. 1,25,00,00,000 (One Hundred Twenty Five Crore Only) as per relevant legal requirements. We have committed to underwrite for up to Tk. 20,000,000.00 (Two crore) for the upcoming issue.
(b) At present, the following underwriting obligations are pending for us: (Name of issue and amount
underwritten)
Sl. Name of the issue Amount underwritten (Tk.)
1 AB Bank Limited 23,00,00,000.00
2 Aftab Hatchery Limited 12,60,00,000.00
3 Ashuganj Power Station Company Ltd. 6,00,00,000.00
4 Lub-rref (Bangladesh) Limited 3,00,00,000.00
5 Energypac Power Generation Limited 2,50,00,000.00
6 STS Holdings Limited 2,00,00,000.00
7 Popular Pharmaceuticals Limited 1,00,00,000.00
8 Delta Hospital Limited 80,00,000.00
9 Esquire Knit Composite Limited 2,00,00,000.00
10 Mohammed Elias Brothers POY Manufacturing Plant Limited 35,00,000.00
Total 53,25,00,000.00
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(c) 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;
(d) 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 (e) This underwriting commitment is unequivocal and irrevocable.
For the Underwriter: Sd/- Kamrun Naher Chief Executive Officer NBL Capital and Equity Management Limited Date: September 04, 2018
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Annexure-C
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER (BLI CAPITAL LIMITED)
[Rule 4 (1)(d)]
To
The Bangladesh Securities and Exchange Commission
Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited. Dear Sir,
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 discussions 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) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker
and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 175,00,00,000 (Taka One Hundred Seventy Five Crore Only) only and we have the capacity to underwrite a total amount of Tk. 875,00,00,000 (Taka Eight Hundred Seventy Five Crore Only) as per relevant legal requirements. We have committed to underwrite for up to Tk. 20,000,000(Taka Two Crore) only for the upcoming issue.
b) At present, the following underwriting obligations are pending for us:
Sl. No. Name of the Company Underwritten amount in BDT
01. Western Marine Shipyard 50,000,000
02. Lub-rref (Bangladesh) Limited 60,000,000
03. Express Insurance Ltd. 15,000,000
04. AB Bank Ltd. 50,000,000
05. Dhaka Regency Hotel & Resorts Ltd. 9,999,000
06. Southeast Bank Ltd. 1,903,125,000
07. Ashuganj Power Station (APSCL) 50,000,000
08. IPDC Finance Ltd. 40,300,000
09. Modern Steel Mills Ltd. 30,000,000
10. First Security Islami bank Ltd. 41,660,000
11. IFIC Bank Ltd. 150,000,000
12. Dragon Sweater and Spinning Ltd. 20,000,000
Total 2,420,084,000
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c) 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;
d) 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 e) This underwriting commitment is unequivocal and irrevocable.
For the Underwriter: Sd/- Md. Israil Hossain ACS Managing Director BLI Capital Limited Date: September 04, 2018
Page: 26
Annexure-C
DUE DILIGENCE CERTIFICATE BY THE UNDERWRITER (ASIAN TIGER CAPITAL PARTNERS INVESTMENTS LIMITED)
[Rule 4 (1)(d)] To
The Bangladesh Securities and Exchange Commission
Sub: Public Issue of 20,000,000 Ordinary Shares of Tk. 200,000,000.00 by BD Paints Limited.
Dear Sir,
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 discussions 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) We are registered with the Bangladesh Securities and Exchange Commission as a merchant banker and eligible to carry out the underwriting activities. Our present paid-up capital stands at Tk. 250,000,000.00 (Two Hundred Fifty Million only) and we have the capacity to underwrite a total amount of Tk. 1,250,000,000.00 (One Thousand Two Hundred Fifty Million) as per relevant legal requirements. We have committed to underwrite for up to Tk. 30,000,000.00 (Three crore) for the upcoming issue.
(b) At present, the following underwriting obligations are pending for us;
Sl. No. Name of the Company Underwritten amount in BDT
1 Al-Faruque Bags Limited 35,000,000
2 eGeneration Limited 12,500,000
Total 47,500,000
(c) 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;
(d) 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 (e) This underwriting commitment is unequivocal and irrevocable. For the Underwriter: Sd/- Muhammad Fuad Hussain Managing Director & CEO Asian Tiger Capital Partners Investments Limited
Date: September 04, 2018
Page: 27
CHAPTER (IV): ABOUT THE ISSUER (a) Name of the issuer, dates of incorporation and commencement of its commercial operations, its
logo, addresses of its registered office, other offices and plants, telephone number, fax number, contact person, website address and e-mail address; Particulars of the Company:
Particulars Description
Name of the Issuer : BD Paints Limited (BDPL)
Dates of Incorporation : April 17, 2014, & C-115399/14
Name Change : Arafat Paint & Chemical Industries Limited was changed to BD Paints Limited on September 04, 2016.
(b) The names of the sponsors and directors of the issuer:
Name of the Sponsors and Directors: Sponsors:
Sl. No. Name of Promoter Present Status
1 Md. Amir Hossain Sponsor
2 Khaleda Begum Liyly Sponsor
3 Md. Junaed Hossain Sponsor
4 Md. Bellal Khan Sponsor & Director
5 Ms. Farzana Akter Eva Sponsor
6 Md. Amin Ur Rashid Sponsor Shareholder
7 Mst. Shahanaz Akter Sponsor Shareholder
8 Akhfa Nur Sponsor
Directors:
Sl. Director Designation
1 Mrs. Aysha Siddika Chairman
2 Md. Bellal Khan Managing Director
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director
5 Mohammad Shaheenul Islam Independent Director
Page: 28
(c) The name, logo and address of the auditors and registrar to the issue along with their telephone numbers, fax numbers, contact persons, website and e-mail addresses:
Particulars of Auditor and Registrar to the Issue:
BD Paints Limited carried on business as local manufacturer of different types of paints. The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
Date of Incorporation
: April 17, 2014, & C-115399/14
Commencement of its Commercial Operations
: April 17, 2014
Authorized Capital : Tk. 1,000,000,000 divided into 100,000,000 Ordinary Share of Tk. 10.00 each
Paid up Capital : Tk. 500,000,000 divided into 50,000,000 Ordinary Share of Tk. 10.00 each
: Dutch Bangla Bank Limited, Mercantile Bank Limited, Islami Bank Bangladesh Limited, EXIM Bank Limited, Sonali Bank Limited
Compliance Officer
:
S.M. Mamun Ar Rashid
Company Secretary Cell: +8801676380308
Page: 30
CHAPTER (VI): DESCRIPTION OF THE ISSUER
(a) Summary: (i) The summary of the industry and business environment of the issuer. The summary shall
not be one-sided or biased to highlight the issuer or the issue; Summary of the industry: Paint has been used over the century in our mankind and it has evidence that it can be found in the cave paintings as well. In today’s life paint is made artificially and being used in many different ways. There are various kind of paints: plastic emulsion, distemper, outer coat (weather proof), synthetic enamel, etc. Plastic emulsion and distemper are close substitutes of each other. Emulsion is basically used in high-end residence all over the country and distempers are cheaper products, having demand in semi-urban and rural markets. Weather coat is growing very fast and presently holds a significant market share. In recent years the paint industry of Bangladesh has been experienced positive growth and the growth has been continued in semi-urban and rural areas. This is because of increasing purchasing power. There is a total of 51 large, medium and small sized companies selling paint in Bangladesh. Of these companies, 45 companies manufacture paint within Bangladesh and 6 companies import paint. The paint Industry is playing an important role in the infrastructure development of the country by ensuring protection to fixed assets. The protection enabled by the paint coatings contributes to the longevity of the structure, resulting in GDP growth of the country. In 2015, the size of Bangladesh's decorative paint market was about Tk 2,550 crore, according to a number of paint manufacturers and Bangladesh Paint Manufacturer’s Association (BPMA). Average growth was around 8 to 10 percent in the last five years. At present, annual consumption stands at about 120,000 tones. Source: https://www.thedailystar.net/supplements/painting-the-future-bright-1331338 - dated December 18, 2016 Business environment: The Issuer’s business environment is conducive to the business as we have good supply of raw materials. We have skilled labors as well. The wage of labor is reasonable also. Overall, it is a business-friendly situation.
(ii) Summary of consolidated financial, operating and other information.
This information is not applicable for BD Paints Limited since it has neither any subsidiary company nor operates under any holding company.
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(b) General Information:
(i) Name and address, telephone and fax numbers of the registered office, corporate head office, other offices, factory, business premises and outlets of the issuer;
Outlets of the issuer : The issuer company has no outlets.
(ii) The board of directors of the issuer;
Sl. Director Designation
1 Mrs. Aysha Siddika Chairman
2 Md. Bellal Khan Managing Director
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director
5 Mohammad Shaheenul Islam Independent Director
Page: 32
(iii) Names, addresses, telephone numbers, fax numbers and e-mail addresses of the chairman, managing director, whole time directors, etc. of the issuer;
Sl. Name & Address Telephone and Fax No. & E-mail Address
(iv) Names, addresses, telephone numbers, fax numbers and e-mail addresses of the CFO, company secretary, legal advisor, auditors and compliance officer;
Sl. Name & Address Telephone and Fax No. & E-mail Address
Registrar to the issue: The Company is going to IPO under Fixed Price Method. So, no registrar to the issue is required as per amendments to the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015.
(vi) The following details of credit rating, where applicable:
a) The names of all the credit rating agencies from which credit rating has been obtained; b) The details of all the credit ratings obtained for the issue and the issuer; c) The rationale or description of the ratings(s) so obtained, as furnished by the credit rating agency(s); d) Observations and risk factors as stated in the credit rating report.
As per Section 3 of Credit Ratings Companies Rules, 1996, no credit rating report is required by the Company. Moreover, as per Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the issuer/issue has been rated by a credit rating company registered with the Commission for book-building method only.
(vii) Following details of underwriting:
a) The names, addresses, telephone numbers, fax numbers, contact persons and e-mail addresses of the underwriters and the amount underwritten by them;
Name & Address Telephone & Fax Number, E-mail, Web Address Contact Person Amount Underwritten
NBL Capital and Equity Management Limited Tel: +88-02-47118816, +88-02-47118807
20,000,000 Printers Building (8th Floor), 5 Rajuk Avenue, Dhaka-1000.
b) Declaration by the underwriters that they have sufficient resources as per the regulatory requirements to discharge their respective obligations;
Declaration by the NBL Capital and Equity Management Limited
We are one of the underwriters of the Initial Public Offering (IPO) of BD Paints Limited. We will underwrite BDT 20,000,000 (Taka Two Crore) for the upcoming issue on a firm commitment basis. In this connection, we hereby declare that: We have sufficient resources as per the regulatory requirements to discharge our respective obligations. For the Underwriter: Sd/- Kamrun Naher Chief Executive Officer NBL Capital and Equity Management Limited Date: September 04, 2018
Declaration by the BLI Capital Limited We are one of the underwriters of the Initial Public Offering (IPO) of BD Paints Limited. We will underwrite BDT 20,000,000 (Taka Two Crore) for the upcoming issue on a firm commitment basis.
In this connection, we hereby declare that: We have sufficient resources as per the regulatory requirements to discharge our respective obligations. For the Underwriter: Sd/- Md. Israil Hossain ACS Managing Director BLI Capital Limited Date: September 04, 2018
Declaration by the Asian Tiger Capital Partners Investments Limited
We are one of the underwriters of the Initial Public Offering (IPO) of BD Paints Limited. We will underwrite BDT 30,000,000 (Taka Three Crore) for the upcoming issue on a firm commitment basis. In this connection, we hereby declare that: We have sufficient resources as per the regulatory requirements to discharge our respective obligations. For the Underwriter: Sd/- Muhammad Fuad Hussain Managing Director & CEO Asian Tiger Capital Partners Investments Limited Date: September 04, 2018
Page: 36
c) Major terms and conditions of the underwriting agreements.
As per guideline of Bangladesh Securities and Exchanges Commission, 35% of total securities shall have to be underwritten on a firm commitment basis by the underwriter(s), subject to the major terms stated bellow:
(i) The IPO shall stand cancelled if at least 65% of the IPO is not subscribed.
(ii) In case of under subscription, underwriters shall take the under-subscribed securities up
to 35% of the IPO.
(iii) Notwithstanding anything contained in the agreement in case of inconsistency between the provision of the agreement and the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the Public Issue Rules shall prevail.
(iv) Prior to publication of the prospectus, the Company shall have obtained consent from the Bangladesh Securities and Exchange Commission permitting the issue as described in Article 2.01 and providing for payment of underwriting commission 0.40% on the amount underwritten.
(v) The Issuer shall within 10 (Ten) days of the closure of subscription call upon the
underwriter in writing with a copy of said writing to the Bangladesh Securities and Exchange Commission, to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed shares within 15 (Fifteen) days of the date of said notice and the said amount shall have to be credited into shares subscription account within the said period.
(vi) In any case within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days,
the Company shall send proof of subscription and payment by the Underwriters to the Commission.
In the case of failure by the underwriter to pay for the shares within the stipulated time, the Company/Issuer will be under no obligation to pay any underwriting commission under this Agreement.
Page: 37
(c) Capital Structure:
(i) Authorized, issued, subscribed and paid up capital (number and class of securities, allotment dates, nominal price, issue price and form of consideration);
Particulars No. of
Securities Class of
Securities
Allotment Nominal & Form of Consideration
Amount in Taka Dates Amount Issue Price (Tk.)
Authorized Capital 100,000,000 Ordinary Share - - 10.00 - 1,000,000,000
Before IPO:
Issued, Subscribed and paid up capital
50,000,000 Ordinary Share
17-Apr-14 95,000,000 10.00 Cash+Whole
assets and liabilities 500,000,000
23-Apr-15 125,000,000 10.00 Cash+Land
24-May-18 280,000,000 10.00 Cash
After IPO:
To be issued as IPO 20,000,000 Ordinary Share - - 10.00 Cash 200,000,000
Paid up capital (Post IPO) 70,000,000 Ordinary Share - - 10.00 Cash 700,000,000
(ii) Size of the present issue, with break-up (number of securities, description, nominal value and issue amount);
Particulars Percentage No. of Ordinary
Shares Nominal
Value Issue price Issue Amount (Taka)
Initial Public Offering through Fixed Price Method
Eligible investors (EI)
EI excluding mutual funds and CIS
30% 6,000,000
10.00 10.00
60,000,000
Mutual Funds and CIS 10% 2,000,000 20,000,000
General public (GP)
GP excluding NRB* 50% 10,000,000 100,000,000
NRB* 10% 2,000,000 20,000,000
Total 100% 20,000,000 200,000,000
GP excluding NRB*: 10,000,000 Ordinary shares will be reserved for General Public and Small Affected Investors.
Page: 38
(iii) Paid up capital before and after the present issue, after conversion of convertible instruments (if any) and share premium account (before and after the issue);
The Company has no convertible instruments and share premium account.
Particulars Amount in BDT
Paid up capital before the present issue 500,000,000
Paid up capital after the present issue 700,000,000
Paid up capital after conversion of convertible instruments (if any) N/A
Share premium account before the present issue N/A
Share premium account after the present issue N/A
(iv) Category wise shareholding structure with percentage before and after the present issue
and after conversion of convertible instruments (if any); The paid-up capital of the Company is Tk. 500,000,000.00. The Company intends to issue 20,000,000 ordinary shares of Tk. 10.00 each at an issue price of Tk. 10.00 through Initial public offering (IPO) totaling to Tk. 200,000,000.00 under Fixed Price Method.
Category wise shareholding structure with percentage before and after the present issue is as follows:
Sl. No.
Category of Shareholders
No. of Ordinary Shares Hold
Percentage of Holding
Pre-IPO Post-IPO Pre-IPO Post-IPO
1 Director & Sponsor 25,700,000 25,700,000 51.40% 36.71%
2 Institutional 1,512,000 7,512,000 3.02% 10.73%
3 Mutual Funds and CIS - 2,000,000 0.00% 2.86%
4 Individual 22,788,000 32,788,000 45.58% 46.84%
5 Non Resident Bangladeshis (NRBs) - 2,000,000 0.00% 2.86%
Total 50,000,000 70,000,000 100.00% 100.00%
There is no convertible instrument, so no conversion is required.
Page: 39
(v) Where shares have been issued for consideration in other than cash at any point of time, details in a separate table, indicating the date of issue, persons to whom those are issued, relationship with the issuer, issue price, consideration and valuation thereof, reasons for the issue and whether any benefits have been accrued to the issuer out of the issue; The Company issued the following ordinary shares for consideration in other than cash (All assets and liabilities & Land):
Other than cash (all assets and liabilities) of Arafat paints and
Chemical Works, proprietor Mrs. Khaleda Begum
Liyly
For acquisition of business, the said ordinary shares issued to its sole proprietorship
against all assets and liabilities.
Acquisition of business
23-Apr-15
Md. Amir Hossain 1,000,000 Sponsor
Tk. 10.00 Other than Cash
(Land)
As per board decision land was
acquired
No benefits have been
accrued to the issuer out of the
issue
Md. Bellal Khan 500,000 Managing Director
Md. Amin Ur Rashid 500,000 Sponsor
Shareholder
Page: 40
(vi) Where shares have been allotted in terms of any merger, amalgamation or acquisition scheme, details of such scheme and shares allotted;
The Company has not allotted any shares in terms of any merger, amalgamation or acquisition scheme except followings:
Date of Issue/Allotment date
Name of the Allottee
Relationship with the issuer
Issue Price
Consideration and Valuation
Reason for the issue
Total
17-Apr-14 Khaleda
Begum Liyly
Subscriber to the
memorandum 10.00
For acquisition of business, the said ordinary shares issued to its sole proprietorship
against all assets and liabilities.
Acquisition of business (through vendor’s
agreement)
35,000,000
(vii) Where the issuer has issued equity shares under one or more employee stock option
schemes, date-wise details of equity shares issued under the schemes, including the price at which such equity shares were issued; The issuer has not issued equity shares under one or more employee stock option schemes.
(viii) If the issuer has made any issue of specified securities at a price lower than the issue price during the preceding two years, specific details of the names of the persons to whom such specified securities have been issued, relation with the issuer, reasons for such issue and the price thereof; The issuer has not made any issue of specified securities at a price lower than the issue price during the preceding two years.
(ix) The decision or intention, negotiation and consideration of the issuer to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue;
The Company has no decision or intention, negotiation and consideration to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue.
Page: 41
(x) The total shareholding of the sponsors and directors in a tabular form, clearly stating the names, nature of issue, date of allotment, number of shares, face value, issue price, consideration, date when the shares were made fully paid up, percentage of the total pre and post issue capital, the lock in period and the number and percentage of pledged shares, if any, held by each of them;
Name & Position Nature of
Issue
Date of Allotment and Acquisition & date of shares fully paid-up
No. of shares
Face Value & Issue
Price Consideration
Pre IPO %
Post IPO %
Lock in Period*
Number & % of pledge of
shares
Name: Mrs. Aysha Siddika Ordinary
28-Dec-15 (Transfer) 3,500,000 10.00
Cash 9.00% 6.43% 3 Yrs No Pledge
Position: Chairman 24-May-18 1,000,000 Cash Total 4,500,000
Name: Md. Bellal Khan
Ordinary
17-Apr-14 1,000,000
10.00
Cash
14.00% 10.00% 3 Yrs No Pledge 23-Apr-15 1,000,000
Cash+Other Than Cash
Position: Director & Managing Director
24-May-18 5,000,000 Cash
Total 7,000,000
Name: Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Ordinary 11-Jul-16 (Transfer) 1,500,000
10.00 Cash
10.00% 7.14% 3 Yrs No Pledge
Position: Director 24-May-18 3,500,000 Cash Total 5,000,000
Name: Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Ordinary 11-Jul-16 (Transfer) 1,500,000
10.00 Cash
9.00% 6.43% 3 Yrs No Pledge
Position: Director 24-May-18 3,000,000 Cash Total 4,500,000
Name: Mohammad Shaheenul Islam Ordinary N/A N/A N/A N/A N/A N/A N/A N/A
Position: Independent Director
Name: Md. Amir Hossain
Ordinary
17-Apr-14 500,000
10.00
Cash
0.00% 0.00% N/A N/A 23-Apr-15 1,000,000 Other than Cash
Position: Sponsor 11-Jul-16 (Transfer) (1,500,000) Cash Total -
Name: Khaleda Begum Liyly
Ordinary
17-Apr-14 3,500,000
10.00
Other than Cash
0.00% 0.00% N/A N/A 23-Apr-15 1,000,000 Cash
Position: Sponsor 28-Dec-15 (Transfer) (4,500,000) Cash Total -
Name: Md. Junaed Hossain
Ordinary
17-Apr-14 500,000
10.00
Cash
0.00% 0.00% N/A N/A 23-Apr-15 1,000,000 Cash
Position: Sponsor 11-Jul-16 (Transfer) (1,500,000) Cash Total -
Page: 42
Name: Ms. Farzana Akter Eva
Ordinary
17-Apr-14 250,000
10.00
Cash
0.00% 0.00% N/A N/A 23-Apr-15 1,250,000 Cash
Position: Sponsor 28-Dec-15 (Transfer) (1,500,000) Cash Total -
Name: Md. Amin Ur Rashid
Ordinary
17-Apr-14 1,000,000
10.00
Cash
3.00% 2.14% N/A N/A 23-Apr-15 1,000,000
Cash+Other Than Cash
11-Jul-16 (Transfer) (77,300) Cash
Position: Sponsor Shareholder 20-Feb-19 (Transfer) (422,700) Cash Total 1,500,000
Position: Sponsor Shareholder 20-Feb-19 (Transfer) (400,000) Cash Total -
Page: 43
(xi) The details of the aggregate shareholding of the sponsors and directors, the aggregate number of specified securities purchased or sold or otherwise transferred by the sponsor and/or by the directors of the issuer and their related parties within six months immediate preceding the date of filing the prospectus;
Aggregate shareholding of the Sponsors and Directors:
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director 5,000,000 10.00% 7.14%
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director 4,500,000 9.00% 6.43%
5 Mohammad Shaheenul Islam Independent
Director - 0.00% 0.00%
6 Md. Amir Hossain Sponsor - 0.00% 0.00%
7 Khaleda Begum Liyly Sponsor - 0.00% 0.00%
8 Md. Junaed Hossain Sponsor - 0.00% 0.00%
9 Ms. Farzana Akter Eva Sponsor - 0.00% 0.00%
10 Md. Amin Ur Rashid Sponsor
Shareholder 1,500,000 3.00% 2.14%
11 Mst. Shahanaz Akter Sponsor
Shareholder 3,200,000 6.00% 4.57%
12 Akhfa Nur Sponsor - 0.00% 0.00%
Total 25,700,000 51.40% 36.71%
Transferred by the sponsor and/or by the directors of the issuer: Md. Amin Ur Rashid, Sponsor Shareholder transfers 500,000 shares, Mst. Shahanaz Akter, Sponsor Shareholder transfers 300,000 shares and Akhfa Nur, Sponsor Shareholder transfers entire of her shares of the BD Paints Limited within six months immediate preceding the date of filing the prospectus.
(xii) The name and address of any person who owns, beneficially or of record, 5% or more of the
securities of the issuer, indicating the amount of securities owned, whether they are owned beneficially or of record, and the percentage of the securities represented by such ownership including number of equity shares which they would be entitled to upon exercise of warrant, option or right to convert any convertible instrument;
Sl. Name of the Shareholders Position Number of Shares Held Pre IPO %
1 Aysha Siddika Chairman 4,500,000 9.000%
2 Md. Bellal Khan Managing Director 7,000,000 14.000%
There is no event or intent of exercising warrant, option or right to convert any convertible instrument.
Page: 44
(xiii) The number of securities of the issuer owned by each of the top ten salaried officers, and all other officers or employees as group, indicating the percentage of outstanding shares represented by the securities owned.
No employee or executive holds any shares of the Company individually or as a group except the following:
Sl. Name of the Shareholder
Position Address Number of
Shares Held
Pre IPO %
1 Md. Bellal Khan Managing Director
Khan Mansion, 617 College Road, Barisal Sadar, Barisal
7,000,000 14.00%
2 Md. Abul Khayer Shareholder Khara Kandi, Pachar, Shibchor, Madaripur
5,000 0.01%
(d) Description of Business:
(i) The date on which the issuer company was incorporated and the date on which it commenced operations and the nature of the business which the company and its subsidiaries are engaged in or propose to engage in;
BD Paints Limited was incorporated as a Private Limited Company on April 17, 2014 and subsequently converted into a Public Limited Company on July 22, 2014 under Companies Act 1994 with the Registrar of Joint Stock Companies and Firms, Dhaka, Bangladesh under the Companies Act, 1994. The Company changed its name from Arafat Paint & Chemical Industries Limited to BD Paints Limited on September 04, 2016. The Certificate of Incorporation number is C-115399/14. The Company started its commercial operation on April 17, 2014. BD Paints Limited carried on business as local manufacturer of different types of paints. The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
There is no subsidiary company of BDPL. (ii) Location of the project;
BDPL’s factory is situated at Plot # 17, 22, BSCIC Industrial Area, Kawnia, Barisal & Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur and corporate office at Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur.
(iii) Plant, machinery, technology, process, etc.
Plant: BD Paints Limited, which has one manufacturing plant facility in Barisal for the past years, is now looking to scale up and is even weighing the possibility of acquiring assets in Dhaka of that country. The company is vertically integrated in generic paint formulation products manufacturer, marketer, promoter and supplier. There is integrated Building Management System, structural design, dust-free environment, fire management system. We have developed an accurate and reliable method for determining lead concentration and use it for screening all our raw materials and paint formulations. The company is scouting for opportunities to access global presence in both decorative and industrial paints. Machinery: The modern machines are prime key of Quality production of BD-Paints. The Company has set up the brand-new machineries to ensure smooth and high-quality based production. Moreover,
Page: 45
for scale up production and compete in global market BD Paints Limited plans to procure highly and heavy machineries in the current fiscal year. These are- Automatic Multi-Head 20L Painting/Coating Filling Machine, Variable Speed Mixer Machine , Automatic Powder Coating Machine, Coating Water Treatment Equipment, Wall Putty Making Machine etc. Technology: BD Paints Limited has been upgraded and using advanced technology in the paints sector of Bangladesh. The department of Research and Development (R&D) and Total Quality Management (TQM) are furnished with the best technologies in this country. Its manufacturing process heavily integrated technology driven, dynamic in nature and using highly sophisticated state-of-the–art cutting edge technology. Process: BD Paints Limited designs and implements the plant automation from the definition of specifications to the start-up of the unit. The team is composed of paint process experts and automation engineers bringing solutions and anticipating your needs in terms of computer management of formula, recipes. The company obviously maintains total quality system which includes strict monitoring, process to process regulation, true measurement, equipment calibration. Based on our process engineering expertise and experience, BD Paints Limited design and develop innovative solutions, especially dedicated to the paint and coating
industry: − original solutions and systems cleaning − solutions for production organization − new designs of modular workshops, in-line systems etc.
(iv) Details of the major events in the history of the issuer, including details of capacity or
facility creation, launching of plant, products, marketing, change in ownership and/or key management personnel etc.;
History of the issuer
On April 17, 2014 incorporated as a Private Limited Company.
Arafat Paint & Chemical Industries Limited was changed to BD Paints Limited on September 04, 2016.
Converted into a Public Limited Company on July 22, 2014.
Launching of plant On April 17, 2014.
Capacity 5,000.00 M.Ton/Year (as per audit report 2019)
Capital raise (Last) Tk. 280,000,000.00 (Cash consideration) on May 24, 2018.
Products
Different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
Market for the product Local market in Bangladesh
Change in ownership/key management personnel
The followings Directors have been appointed:
1. On January 25, 2018,
Md. Maruful Islam Turan, representative of IBP Agrovet Ltd., appointed as Director;
Jannatul Ferdous Mim, representative of Sabila Sea Foods Ltd., appointed as Director; and
2. On August 26, 2018,
Mohammad Shaheenul Islam appointed as Independent Director for the period of 3 (Three) years.
The followings key management personnel have been appointed:
1. On 10-Apr-16, Md. Faruk Ahmed appointed as Head of Internal Audit & Compliance;
2. On 17-Aug-19, Md. Abul Bashar appointed as Head of Production Department (Chemist);
3. On 1-Aug-16, Md. Masud Rana appointed as In-charge, Engineering Division;
4. On 1-Oct-16, Md. Al-Amin Howlader appointed as Manager-QA Department;
5. On 1-Feb-17, Md. Rasheduzzaman appointed as Manager-Distribution;
6. On 1-Jul-17, S.M. Mamun Ar Rashid appointed as Company Secretary;
7. On 2-Feb-19, Mahamudun Nabi appointed as Head of Marketing & Sales;
8. On 5-Sep-17, Selina Akther appointed as Head of R & D; 9. On 17-Dec-17, Md. Abul Khayer appointed as Chief
Financial Officer.
(v) Principal products or services of the issuer and markets for such products or services. Past trends and future prospects regarding exports (if applicable) and local market, demand and supply forecasts for the sector in which the product is included with source of data;
Principal Products of BDPL: The Company has following products under five categories: 1. Interior Paints (Synthetic Polyvinyl Distemper, Plastic Emulsion Paints, Water Sealer, Wall
putty, Luxury Silk, Easy Emulsion, white Cement, Glycerin power, Chalk power, under Coat Power finale, Perfume Finale, A/C Red Oxide, hammer Paints, BD Thinner, Wood Burnish);
2. Exterior Paints (Weather Coat, Royel Emustion, BD Cem); 3. Wood & Metal (Alphona Synthetic enamel, Primium Synthetic Enamel, Wood Protector); 4. Industrial Paints (Epoxy Paint, Vernish oil, almunium Paints; 5. Marine Paints (Black & Red Oxide, Red Lead Primer).
Market for such Products: All of the products' markets are throughout the Bangladesh. Past trends and future prospects regarding exports (if applicable) In the past we did not export any paints. Hence, there is no trend regarding export. However, in future, there is possibility to export paint in seven sister of India. Local market, demand and supply forecasts for the sector in which the product is included with source of data:
Paint has been used over the century in our mankind and it has evidence that it can be found in the cave paintings as well. In today’s life paint is made artificially and being used in many different ways. There are various kind of paints: plastic emulsion, distemper, outer coat (weather proof), synthetic enamel, etc. Plastic emulsion and distemper are close substitutes of each other. Emulsion is basically used in high-end residence all over the country and distempers are cheaper products, having demand in semi-urban and rural markets. Weather coat is growing very fast and presently holds a significant market share.
In recent years the paint industry of Bangladesh has been experienced positive growth and the growth has been continued in semi-urban and rural areas. This is because of increasing purchasing power. There is a total of 51 large, medium and small sized companies selling
Page: 47
paint in Bangladesh. Of these companies, 45 companies manufacture paint within Bangladesh and 6 companies import paint.
The paint Industry is playing an important role in the infrastructure development of the country by ensuring protection to fixed assets. The protection enabled by the paint coatings contributes to the longevity of the structure, resulting in GDP growth of the country.
In 2015, the size of Bangladesh's decorative paint market was about Tk 2,550 crore, according to a number of paint manufacturers and Bangladesh Paint Manufacturers Association (BPMA). Average growth was around 8 to 10 percent in the last five years. At present, annual consumption stands at about 120,000 tones.
Source: https://www.thedailystar.net/supplements/painting-the-future-bright-1331338 dated December 18, 2016
(vi) If the issuer has more than one product or service, the relative contribution to sales and income of each product or service that accounts for more than 10% of the company’s total revenues;
There is no individual product that account for more than 10% of the Company’s total revenue.
(vii) Description of associates, subsidiary and holding company of the issuer and core areas of business thereof; BD Paints Limited has no associates, subsidiary and holding company.
(viii) How the products or services are distributed with details of the distribution channel. Export possibilities and export obligations; BDPL has its own distribution network to distribute its products throughout the country. All products produced in the factory, are brought to the two warehouses of Barisal & Tongi, Gazipur, then the products are distributed across the country. Company’s product distribution systems are depicted below:
Export possibilities and export obligations: The Company doesn’t have any export obligation as it do not export. However, there is good potential of business for export.
(ix) Competitive conditions in business with names, percentage and volume of market shares of major competitors; BDPL has a number of competitors and some of these are as follows:
Sl. No. Name of the Company Core area of work
1 Roxy Paints Limited Manufacturing Paints
2 Pailac Paints & Chemical Co. Limited Manufacturing Paints
3 Uzala Paints Industry Manufacturing Paints
4 Polac Paint & Chemical Co. Ltd. Manufacturing Paints
6 Unite Paint and Chemical Industries Manufacturing Paints
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There is no market data in respect of percentage and volume of market shares of major competitors.
Apart from this, as per annual report of the listed companies and audited financial statements of BD Paints Limited, the sales amounts are presented below:
Amount in BDT (Million)
Sl. Name of the Company 2018/2019 Period/Year Year End
1 BD Paints Limited 364.52 From 1 Jul 18 to 30 Jun 19 30 Jun
2 Berger Paints Bangladesh Limited
17,733.31 From 1 Apr 18 to 31 Mar 19 31 Mar
There is no data available regarding market shares of the respective listed company in their annual report.
(x) Sources and availability of raw materials, names and addresses of the principal suppliers and contingency plan in case of any disruption; Main raw materials of the BD Paints Ltd. products are Calcium Carbonate, Chalk Powder, Alkyd Resin, Petroleum Resin, Vinyl Acrylic Copolymer, Different types of Pigment, Titanium dioxide, Tylose, Paste, Mineral Turpentine (MTT), Thinner and other chemicals, which the company procures from overseas and Local market. The company has some trusted suppliers of its materials and chemicals. List of leading suppliers is as follows:
Sl. Name of Suppliers
Name of Raw Materials Address Country of
origin
1 GB Chemicals (M) Son Ltd.
Vinyl Acrylic Co-Polymer 1744, Jalan Industri Dua, Taman Industri Bukit Panchor, 14300 NibongTebal, Penang, Malaysia.
Malaysia
2 MIEN Trung Mineral Joint Stock Company
Uncoated Calcium Carbonate Powder
3rd Floor, MTJ Building, No. 104 Hai Thuong Lan Ong StreetVinh City- Nghe An Province, Vietnam.
Vietnam
3 Clariant Chemicals (INDIA) Ltd.
Pigment CC Red Fine Paste, Pigment CC Yellow Fine Paste& CC Black Fine Paste, CC Blue Fine Paste.
8th Floor, B Wing, Reliable Tech Park, Behind Reliable Plaza, Belapur Road, Airoli, Navi Mumbai, Maharashtra, 400708, India.
India
4 Zibo Xinzheng Trading Co. Ltd.
Petroleum Resins Wutai Industrial Park, Linzi District, Zibo, Shandong, P.R. China
China
5 Green Egypt and Jordanian Co.
Chalk Powder 17 Gamal El-fasakhany St. -Almaza, Cairo, Egypt
Egypt
6 Se Tylose GMBH And Co.
Cellulose Ethers-TYLOSE HS 100000 YP2
Rheingaustr. 190-19665203 Wiesbaden, Germany
Germany
7 Jyoti Colours Pvt. Ltd.
HD Alumina Ball Ceramic Grinding Media (10mm) & HD Alumina Ball Ceramic Grinding Media (15mm)
Nanubhai Amin Marg, Industrial Area, P.O. Chemical Industries, Vadodara - 390 003 Gujarat. India.
India
8
The Arasan Aluminium Industries (P) Ltd.
Aluminium Paste Leafing Grade-12L & Aluminium Paste No Leafing Grade-12L
1-C/4 Thiruthangal Road, Sivakasi - 626 123., Tamil Nadu, India.
Titanium Dioxide Rutile Tronox Pigment Plant, Lot 22 Mason Road, Kwinana Beach WA 6167, Perth, Australia
Australia
11
Padma Oil Company Ltd.
Mineral Turpentine (MTT) Padma Bhaban, Strand Road, Chittagong, Bangladesh
Bangladesh
Contingency Plan in case of any disruption: We have been collecting our raw materials from different suppliers from local and international suppliers. Suppliers’ countries are Malaysia, India, Australia, Vietnam, Germany, Egypt, UAE and China. So, we have already contingency plan in there in case of any disruption.
(xi) Sources of, and requirement for, power, gas and water; or any other utilities and contingency plan in case of any disruption;
Power: Electricity connection has been taken from Power Development Board (PDB), Barisal having a capacity of 35 KVA. A diesel generator having capacity of 300 KVA will act as alternative power supply. Gas: No need for production. Water: At different stages throughout the production process in BDPL there requires water which is collected from deep tubewell.
Contingency Plan in case of any disruption: To tackle the disruption of power, Company has installed generator as mentioned in above.
(xii) Names, address(s), telephone number, web address, e-mail and fax number of the
customers who account for 10% or more of the company’s products or services with amount and percentage thereof; There is no customer who purchase 10% or more of the company’s products.
(xiii) Names, address(s), telephone number, web address, e-mail and fax number of the
suppliers from whom the issuer purchases 10% or more of its raw material or finished goods with amount and percentage thereof; No particular suppliers from whom BD Paints Limited purchases 10% or more of its raw material or finished goods.
(xiv) Description of any contract which the issuer has with its principal suppliers or customers
showing the total amount and quantity of transaction for which the contract is made and the duration of the contract. If there is not any of such contract, a declaration is to be disclosed duly signed by CEO or MD, CFO and Chairman on behalf of Board of Directors; The Company has no such contract with principal suppliers or Customers.
Declaration regarding Contract with Principal suppliers or customers We, on behalf of the Board of Directors certify that BD Paints Limited did not enter into any contract with its principal suppliers or customers.
Sd/- Md. Bellal Khan Managing Director
Sd/- Md. Abul Khayer
Chief Financial Officer
Sd/- Mrs. Aysha Siddika
Chairman
on behalf of Board of Directors Dated: September 08, 2018 Dhaka
Page: 50
(xv) Description of licenses, registrations, NOC and permissions obtained by the issuer with issue, renewal and expiry dates; The Company neither obtained any Patent Right/Trademarks nor signed any royalty agreement with any party.
10 Fire Insurance Islami Insurance Bangladesh Limited IIBL/TNB/FC-
0032/09/2018 28-Jul-20
11 BCCI The Barisal Chamber of Commerce & Industry 789 30-Jun-20
12 Explosive License Directorate of Explosive Authority, Barisal 660-3(M)-0063 31-Dec-20
13 ISO 9001:2015 Bureau of Assessment Services INT-000426 2017 9-Jan-21
(xvi) Description of any material patents, trademarks, licenses or royalty agreements;
The Company neither obtained any Patent Right/Trademarks nor signed any royalty agreement with any party. However, it has several regulatory licenses and certificate in order to continue its operation.
(xvii) Number of total employees and number of full-time employees; Number of employees is as follows:
Particulars 2018-2019 2017-2018
Receipt aggregate salary throughout the financial year whose salary was not less then Tk. 3000. 180 172
Receipt aggregate salary throughout the financial year whose salary was less then Tk. 3000. - -
During the year 2019, all the employees were in the permanent payroll of the Company
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(xviii) A brief description of business strategy; A business strategy sets out to achieve the desired goals. Business strategy is defined as long-term business planning. The company strategies are as follows:
1. Increase Fixed Assets: The Company is in planning to invest in fixed assets in order to expand its existing business.
2. Economic Scale: With a view to spreading the fixed cost over more units’ company is trying to increase economic of scale
3. Lower price: In order to get more market share, the Company is trying to be competitive price to deal with its rivals.
4. Product Differentiating: By differentiating in the product line, the Company will be able to make higher price for its specialized product. Hence,
product differentiation is on the mind as well.
(xix) A table containing the existing installed capacities for each product or service, capacity utilization for these products or services in the previous years, projected capacities for existing as well as proposed products or services and the assumptions for future capacity utilization for the next three years in respect of existing as well as proposed products or services. If the projected capacity utilization is higher than the actual average capacity utilization, rationale to achieve the projected levels. With regard to above, a table is presented in the following page:
Total actual capacity and its utilization:
Product Unit
Installed Capacity Capacity utilization for this Products Actual Capacity Utilization (%)
Assumption indicator Assumption's Basis Assumptions Years
30-Jun-20 30-Jun-21 30-Jun-22
Capacity Increase Capacity will be increased as new machineries will be introduced.
12% 28% 7%
Rationale to achieve the projected levels: The Company has projected that the capacity utilization will increase. As the total market is increased day by day and market share of the company is increasing. Hence, the management of the Company thinks that the projected capacity is attainable.
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(e) Description of Property: The written down value of Property, Plant & Equipment’s owned by the company as per audited accounts as on 30 June, 2019 are stated below:
(i) Location and area of the land, building, principal plants and other property of the company
and the condition thereof; The Company has 68.87 decimals land located at Plot # A-17 & Plot # A-22, BSCIC Industrial Area, Kawnia, Barisal. All other assets including building and principal plants are located at the Company’s own registered office, factory & rented corporate office. Registered office: Plot # A-17, BSCIC Industrial Area, Kawnia, Barisal, Factory: Plot # A-22, BSCIC Industrial Area, Kawnia, Barisal and rented factory & corporate office: Plot # 117/3, Noyabari Road, Sataish, Tongi, Gazipur. All of the above-mentioned Property, Plant & Equipment’s are in working good condition.
(ii) Whether the property is owned by the company or taken on lease; All the assets of the Company are in its own name except registered office & factory land which has been taken under 99 (Ninety-Nine) years lease agreement from Bangladesh Small and Cottage Industries Corporation (BSCIC) and rented factory & corporate office at Plot # 117/3, Noyabari Road, Sataish, Tongi, Gazipur.
Page: 54
(iii) Dates of purchase, last payment date of current rent (LvRbv) and mutation date of lands, deed value and other costs including details of land
development cost, if any and current use thereof; Land:
Deed No. Date of
purchase Mutation date
Last payment date of current
rent
(LvRbv)/Premium
R. S Dag No Deed Value
In Tk.
Land development & Other Cost
in Tk.
Area of Land
(Decimal)
Current use
1459 Feb 05, 2017 ** Mar 19, 2019 A-17, BSCIC Industrial Area,
Kawnia, Barisal 900,000
12,240,804
30.99 Factory & Production section, Administrative building
11801/017 Oct 10, 2017 ** Mar 19, 2019 A-22, BSCIC Industrial Area,
Kawnia, Barisal 1,100,000 37.88
Raw Material Store (Ground Floor) & Office (1st Floor), Factory, M.T.T Store, Generator Room 100SFT, Multi Utility
2,000,000 68.87
**Ownership of the land was not transferred through these lease deed. That’s why mutation is in the name of BSCIC.
Page: 55
(iv) The names of the persons from whom the lands has been acquired or proposed to be acquired along with the cost of acquisition and relation, if any, of such persons to the issuer or any sponsor or director thereof;
Name of the persons from whom the land has been acquired
There is no relation of land owner with the Directors and Sponsors of BD Paints Limited.
Land (proposed to be acquired): There is no land proposed to be acquired by the Company.
(v) Details of whether the issuer has received all the approvals pertaining to use of the land,
if required; The Company has received all the approvals pertaining to use of the land BSCIC Industrial Area, Kawnia, Barisal.
(vi) If the property is owned by the issuer, whether there is a mortgage or other type of charge on the property, with name of the mortgagee; There is no mortgage or other type of charge on the property.
(vii) If the property is taken on lease, the expiration dates of the lease with name of the lessor,
principal terms and conditions of the lease agreements and details of payment; No Property is taken by the Company under lease agreement except Company’s factory land.
Lessor Location Plot No. Area of
Plot (Decimal)
Period of Agreement
Total payment
BSCIC Industrial Area
Kawnia, Barisal A-17 30.99 From 16-Aug-2011
to 15-Aug-3010 900,000
BSCIC Industrial Area
Kawnia, Barisal A-22 37.88 From 12-Sep-2011
to 11-Sep-3010 1,100,000
Principal Terms and Conditions of the Lease Agreements:
• That the lessee shall keep the demised property and all buildings, structures and erections from time to time standing therein clean, sanitary and in good order, condition and repair to the satisfaction of the lessor, and in default the lessor may after one month’s previous notice in writing carry out all necessary repairs and the cost thereof shall be paid by the lessee on demand and may recovered from the lessee under the Bengal public demands Recovery Act. 1913.
• That the lessee shall preserve intact the boundaries of the demised property and shall keep the same well demarcated and shall point them out when required by the lessor to do so to any officer duly authorized by him in writing to inspect them. Should any boundary mark be missing the lessee shall report the fact to the lessor, if it is found that any boundary pillars are demolished or lost due to any action of the lessee the cost of replacement of such boundary pillars may be realized from the lessee by the lessor.
• That the lessee shall not without the previous written permission and sanction of the Lessor, sell exchange, gift away, charge mortgage, assigned, sub-let or otherwise dispose of part with or, encumber the demised property. Maximum 50% of the built-up area (i.e. structure on the land) of the plot may be given sub-let after taking necessary permission from the lessor. In special case Board of Directors of BSCIC may consider the appeal of the lessee
Page: 56
for sub-letting more than 50% of the built-up area. An amount equivalent to one month’s rent against each year shall have to be paid to BSCIC and in the event such sanction being given by the Lessor the Lessee shall make a prior payment to the Lessor a fee equivalent to 25% of the market value of the demised property or part thereof so sold. Exchanged or gifted away or changed, mortgaged, assigned sublet or encumbered for a period of 10 years or more and if the period shall be of less than 10 years the fee shall be calculated at the rate of one month’s rent for each year period of the charge, mortgage assignment, sub-lease or other encumbrances transfer fee of old 20 Estate’s will be 200% of the existing price.
• Provided that if it shall be necessary for the lessee for the purpose of development of the industrial project to obtain loans or advance from any loan giving agency, constituted under a Statute, the demised property may be charged or mortgaged as security for such loans or advances. In case of mortgage of the land to the financial institution(s), NOC may be issued in favour of the allottee after full payment of land premium and other charges up-to-date. any reference being made to the Lessor and/without any fees being paid therefor.
• That the lessee shall not without the previous written permission of the lessor use the demised property of any buildings, structure, etc. therein for any purpose other than the declared industrial purpose of the lessee as set forth in this indenture or for allied industries.
• That the lessee shall construct a pacca culvert over the road side drains connecting approach to building of the lessee.
Liquidation policy:
• If the Lessee be not desirous of renewing this lease after 99 years the Lessor shall at cost of the Lessee do so for such further period and on such terms, covenants and conditions as the Lessor may then determine.
• If the Lessee be not desirous of renewing the lease after 99 years he shall be at liberty to remove all such buildings, structures & machineries etc. erected or fixed by him within three months of the expiry of this lease or such further time as the Lessor may grant, on payment in advance of the rent for such period, part of month being always counted as a full month. Anything (including buildings & machineries) not removed within the prescribed or extended time shall vest in and be the absolute property of the Lessor frees from all claims whatsoever from anybody and the Lessor may remove the same and recover the cost of doing so from the Lessee.
• In the event of the Lessee failing to quit or give up peaceable possession of the demised property in clean good order and condition on the determination of this lease whether by notice or efflux of time or of such further times as may be allowed to the Lessee, the Lessor may to be forthwith re-enter into or upon the demised property and summarily eject the Lessee or any other persons or person therein without intervention of any Court of Law and may retain as his absolute property free from all claims and encumbrances whatsoever from anybody including the Lessee and/or sell free from such claims and encumbrances whatsoever all or any of the goods or things found upon the demised property. The Lessor may further have the demised property put into clean and good order and condition and all such costs shall be recovered from out of the said sale proceed and /or from the Lessee.
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(viii) Dates of purchase of plant and machineries along with sellers name, address, years of sale, condition when purchased, country of origin, useful economic life at purchase and remaining economic life, purchase price and written down value;
Sl. Purchase
Date Sellers Name Address
Years of
Sale
Machineries Name
(Description)
Condition when
Purchased Quantity
Country of Origin
Useful Economic
Life at Purchase
Remaining Economic
Life
Machineries Acquisition
value in BDT W.D.V 2019
1 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Roller Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
2,750,000 1,589,204
2 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Mixer Machine
Brand New 2 Sets Bangladesh 20 Years 14 Years 09 Months
3,666,667 1,777,784
3 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Blower Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
375,000 216,710
4 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Heat Machine Brand New 1 Bangladesh 20 Years 14 Years 09 Months
22,000 12,714
5 17/04/2014 M.R Enterprise
College Road, Barisal N/A Water Pump Brand New 2 Bangladesh 20 Years 14 Years 09 Months
40,000 23,116
6 17/04/2014 M.R Enterprise
College Road, Barisal N/A Water Tank Brand New 1 Bangladesh 20 Years 14 Years 09 Months
10,000 5,779
7 17/04/2014 Sanjida Enterprise
Nothullahbad, Barisal N/A Vam tank Brand New 1 Bangladesh 20 Years 14 Years 09 Months
47,000 27,161
8 17/04/2014 Sanjida Enterprise
Nothullahbad, Barisal N/A Water Pump Brand New 1 Bangladesh 20 Years 14 Years 09 Months
15,000 8,668
9 17/04/2014 Sanjida Enterprise
Nothullahbad, Barisal N/A Water Tank Brand New 1 Bangladesh 20 Years 14 Years 09 Months
10,000 5,779
10 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Comprasher Machine
Brand New 2 Bangladesh 20 Years 14 Years 09 Months
370,000 213,820
11 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Air Machine for body
Brand New 2 Bangladesh 20 Years 14 Years 09 Months
270,000 156,031
12 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Cap Machine Brand New 4 Bangladesh 20 Years 14 Years 09 Months
840,000 485,429
13 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Structure Dice Brand New 24 Bangladesh 20 Years 14 Years 09 Months
480,000 188,068
14 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Cap Seal Packing Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
320,000 184,925
15 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Ball Press Machine
Brand New 5 Bangladesh 20 Years 14 Years 09 Months
259,375 101,625
16 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Raping Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
80,000 46,231
17 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Folding Machine
Brand New 2 Bangladesh 20 Years 14 Years 09 Months
15,000 8,668
18 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Shit Cutting Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
350,000 202,262
19 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Joint Machine Brand New 2 Bangladesh 20 Years 14 Years 09 Months
34,000 13,321
Page: 58
20 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Setting Dice Brand New 18 Pcs Bangladesh 20 Years 14 Years 09 Months
202,500 117,023
21 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Structure Dice Brand New 20 Set Bangladesh 20 Years 14 Years 09 Months
1,485,715 628,609
22 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Fitting Rod Brand New 6 Bangladesh 20 Years 14 Years 09 Months
60,000 34,678
23 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Stone Ball Mixer Machine
Brand New 1 Bangladesh 20 Years 14 Years 09 Months
3,200,000 1,349,499
24 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Stone Brand New 250 Kg Bangladesh 20 Years 14 Years 09 Months
340,000 196,509
25 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Printing Manual Machine
Brand New 2 Bangladesh 20 Years 14 Years 09 Months
210,000 121,373
26 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Printing Positive
Brand New 315 Pcs Bangladesh 20 Years 14 Years 09 Months
2,362,500 1,365,451
27 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Printing Farme
Brand New 150 Pcs Bangladesh 20 Years 14 Years 09 Months
1,350,000 780,360
28 17/04/2014 Rafiq Enterprise
College Road, Barisal N/A Steel rake Brand New 10 Pcs Bangladesh 20 Years 14 Years 09 Months
650,000 375,729
29 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Printing Table Brand New 05 Pcs Bangladesh 20 Years 14 Years 09 Months
150,000 86,707
30 17/04/2014 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Skin Rubber Brand New 19 Bangladesh 20 Years 14 Years 09 Months
78,226 45,218
Laboratory Equipment -
31 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Color Spectrometer
Brand New 1 Germany 20 Years 14 Years 11 Months
1,300,000 1,001,503
32 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Gloss Meter Brand New 01 Set Germany 20 Years 14 Years 11 Months
700,000 539,271
33 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Viscometer Brand New 01 Set Germany 20 Years 14 Years 11 Months
1,500,000 1,155,581
34 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Drying Oven Brand New 01 Set China 20 Years 14 Years 11 Months
1,100,000 847,426
35 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Scratch Tester Brand New 5 India 20 Years 14 Years 11 Months
1,200,000 924,465
36 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A DFT Gauge (Elcomer)
Brand New 3 Germany 20 Years 14 Years 11 Months
390,000 300,451
37 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Hegman Gauge
Brand New 6 India 20 Years 14 Years 11 Months
720,000 554,679
38 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Washability Checker
Brand New 2 Germany 20 Years 14 Years 11 Months
1,520,000 1,170,988
39 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Wet film thickness gauge
Brand New 15 India 20 Years 14 Years 11 Months
750,000 577,790
40 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Impact Tester Brand New 10 India 20 Years 14 Years 11 Months
1,300,000 1,001,503
Page: 59
41 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Applicator 200 Micron
Brand New 10 India 20 Years 14 Years 11 Months
400,000 308,155
42 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A S.G Cup 100 ml
Brand New 20 China 20 Years 14 Years 11 Months
400,000 308,155
43 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Flow cup (B-4)
Brand New 25 Bangladesh 20 Years 14 Years 11 Months
1,250,000 962,984
44 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Saging Tester Brand New 3 India 20 Years 14 Years 11 Months
420,000 323,563
45 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Drying Time Recorder
Brand New 2 Germany 20 Years 14 Years 11 Months
1,280,000 990,198
46 1/6/2014 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Barcota 200 micron
Brand New 3 India 20 Years 14 Years 11 Months
600,000 462,232
47 1/6/2014 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Basic Lab Items
Brand New 2 Bangladesh/Chi
na 20 Years
14 Years 11 Months
2,200,000 1,694,852
48 1/6/2014 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Paint Stirrer Mixer
Brand New 2 China 20 Years 14 Years 11 Months
1,680,000 1,294,250
49 1/6/2014 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Paint Dissolver
Brand New 2 China 20 Years 14 Years 11 Months
1,834,316 1,413,133
50 1/6/2014 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A
Paint Laboratory Dispersing equipment
Brand New 2 China 20 Years 14 Years 11 Months
2,100,000 1,617,813
51 1/2/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Ballmin Machine
Brand New 1 Bangladesh 20 Years 15 Years 07 Months
7,755,000 5,684,902
52 1/2/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Mixer Machine ( Small)
Brand New 2 Bangladesh 20 Years 15 Years 07 Months
2,550,000 2,033,720
53 1/2/2015 Nipa Engineering Works
34 Kadomtali, Shampur, Dhaka-1204
N/A Atoritor Machine
Brand New 2 Bangladesh 20 Years 15 Years 07 Months
4,100,000 3,269,903
54 1/2/2015 Nipa Engineering Works
35 Kadomtali, Shampur, Dhaka-1204
N/A Mixer Machine ( Medium)
Brand New 2 Bangladesh 20 Years 15 Years 07 Months
5,000,000 3,987,687
55 1/2/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Big High Speed Mixer
Brand New 1 Bangladesh 20 Years 15 Years 07 Months
5,100,000 4,067,441
56 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A SS Dram (572 Ltr.) with wheel
Brand New 15 pcs Bangladesh 20 Years 15 Years 07 Months
2,400,000 1,914,090
57 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A SS Dram (420 Ltr.) with wheel
Brand New 25 pcs Bangladesh 20 Years 15 Years 07 Months
2,700,000 2,153,351
Page: 60
58 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Measurement Cup
Brand New 05 Set Bangladesh 20 Years 15 Years 07 Months
127,500 101,686
59 1/2/2015 New OviEngineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Hagment Gase
Brand New 03 Set Bangladesh 20 Years 15 Years 07 Months
196,500 156,716
60 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Laboratory Mixture Machine
Brand New 1 Bangladesh 20 Years 15 Years 07 Months
1,650,000 1,315,937
61 1/2/2015 476/B, Malibagh, DIT Road, Dhaka-1217
N/A Iqka Machine Brand New 2 Bangladesh 20 Years 15 Years 07 Months
8,205,726 6,544,373
62 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Atoritor Machine Stone
Brand New 2000 Bangladesh 20 Years 15 Years 07 Months
1,300,000 1,036,799
63 1/2/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Ball Mill Machine Stone
Brand New 2000 Bangladesh 20 Years 15 Years 07 Months
900,000 717,784
64 1/5/2015 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Setting dice Brand New 1 Bangladesh 20 Years 15 Years 07 Months
149,280 120,576
65 1/6/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Adhesive Broiler Machine
Brand New 01 Set Bangladesh 20 Years 15 Years 11 Months
5,850,000 4,745,008
66 1/6/2015 Nipa
Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Power Press Machine
Brand New 01 Set Bangladesh 20 Years 15 Years 11 Months
2,580,514 2,093,087
67 1/8/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Roller Machine (Big)
Brand New 01 Set Bangladesh 20 Years 16 Years 01 Month
3,050,000 2,495,140
68 1/8/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A
Laboratory Mixer Machine (Small)
Brand New 01 Set Bangladesh 20 Years 16 Years 01 Month
650,000 531,751
69 1/8/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Installation & Other Cost
Bangladesh 20 Years 16 Years 01 Month
87,200 71,336
70 1/9/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Triple Roller Machine
Brand New 01 Set Bangladesh 20 Years 16 Years 02 Months
3,570,000 2,933,294
71 1/9/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Medium Mixture Machine
Brand New 01 Set Bangladesh 20 Years 16 Years 02 Months
2,538,275 2,085,576
72 1/9/2015 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Printing Dice/Fram
Brand New 50 Pcs Bangladesh 20 Years 16 Years 02 Months
1,320,000 1,084,579
73 1/1/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Oven Machine
Brand New 01 Set Bangladesh 20 Years 17 Years 06 Months
1,450,000 1,275,909
Page: 61
74 1/1/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Cement paint Ball Mill Machine
Brand New 01 Set Bangladesh 20 Years 17 Years 06 Months
8,666,390 7,625,882
75 1/3/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Atoritor Machine (medium)
Brand New 02 Set Bangladesh 20 Years 17 Years 08 Months
3,240,000 2,875,365
76 1/3/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Mixture Machine
Brand New 02 Set Bangladesh 20 Years 17 Years 08 Months
2,764,865 2,453,702
77 1/6/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Filter Machine Brand New 01 Set Bangladesh 20 Years 17 Years 11 Months
3,750,000 3,370,273
78 1/6/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Atoritor Machine
Brand New 02 Set Bangladesh 20 Years 17 Years 11 Months
10,240,000 9,203,093
79 1/6/2017 Nipa Engineering Works
33 Kadomtali, Shampur, Dhaka-1204
N/A Iqka Machine Brand New 01 Set Bangladesh 20 Years 17 Years 11 Months
3,913,895 3,517,572
80 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Mixture Machine (Small)
Brand New 04 Set Bangladesh 20 Years 18 Years 11 Months
8,500,000 8,041,354
81 1/6/2018 Khan Engineering
189/1 East
Nakhalpara, Tejgaon, Dhaka-1215
N/A Atoritor Machine (Big)
Brand New 04 Set Bangladesh 20 Years 18 Years 11 Months
31,360,662 29,060,294
82 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Mixture Machine (Medium)
Brand New 04 Set Bangladesh 20 Years 18 Years 11 Months
12,500,000 11,825,521
83 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Big High Speed Mixer
Brand New 02 Set Bangladesh 20 Years 18 Years 11 Months
25,500,000 24,124,063
84 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Roller Machine (Big)
Brand New 02 Set Bangladesh 20 Years 18 Years 11 Months
14,200,000 13,433,792
85 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Atoritor Machine Stone
Brand New 5000 Bangladesh 20 Years 18 Years 11 Months
3,250,000 3,074,635
86 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A Ball Mill Machine Stone
Brand New 4500 Bangladesh 20 Years 18 Years 11 Months
2,025,000 1,915,734
87 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A SS Drum 572 Ltr.
Brand New 40 Bangladesh 20 Years 18 Years 11 Months
6,000,000 5,676,250
88 1/6/2018 Khan Engineering
189/1 East Nakhalpara, Tejgaon, Dhaka-1215
N/A SS Drum 420 Ltr.
Brand New 40 Bangladesh 20 Years 18 Years 11 Months
4,500,000 4,257,188
Page: 62
Laboratory Equipment -
89 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Color spectrometer
Brand New 2 Germany 20 Years 18 Years 11 Months
2,600,000 2,459,708
90 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Gloss meter Brand New 2 Germany 20 Years 18 Years 11 Months
1,400,000 1,324,458
91 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A viscometer Brand New 6 Germany 20 Years 18 Years 11 Months
3,000,000 2,838,125
92 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Drying Oven Brand New 6 China 20 Years 18 Years 11 Months
3,300,000 3,121,938
93 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Scratch tester Brand New 10 India 20 Years 18 Years 11 Months
2,400,000 2,270,500
94 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A DFT Gauge (elcomer)
Brand New 6 Germany 20 Years 18 Years 11 Months
780,000 737,913
95 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Hegman Gauge
Brand New 12 India 20 Years 18 Years 11 Months
1,500,000 1,419,063
96 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Wash ability checker
Brand New 6 Germany 20 Years 18 Years 11 Months
4,560,000 4,313,950
97 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Wet film thickness gal
Brand New 60 India 20 Years 18 Years 11 Months
3,000,000 2,838,125
98 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Impact tester Brand New 60 India 20 Years 18 Years 11 Months
7,800,000 7,379,125
99 1/6/2018 Paradise Scientific Company
31, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Applicator 200 Micror
100 India 20 Years 18 Years 11 Months
4,000,000 3,784,167
100 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A S.G cup 100 ml
Brand New 100 China 20 Years 18 Years 11 Months
2,000,000 1,892,083
101 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Flow Cup(B-4)
Brand New 100 Bangladesh 20 Years 18 Years 11 Months
5,000,000 4,730,208
102 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Saging tester Brand New 6 India 20 Years 18 Years 11 Months
840,000 794,675
103 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Drying time recorder
Brand New 6 Germany 20 Years 18 Years 11 Months
3,840,000 3,632,800
104 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Barcota 200 Micron
Brand New 100 India 20 Years 18 Years 11 Months
2,400,000 2,270,500
105 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Basic Lab items
Brand New 5 Bangladesh/Chi
na 20 Years
18 Years 11 Months
5,500,000 5,203,229
Page: 63
106 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Paint Stirrer 112Mixer
Brand New 3 China 20 Years 18 Years 11 Months
2,520,000 2,384,025
107 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Paint Dissolver
Brand New 3 China 20 Years 18 Years 11 Months
2,700,000 2,554,313
108 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A
Paint Laboratory dispersing equipment
Brand New 3 China 20 Years 18 Years 11 Months
3,150,000 2,980,031
109 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Coating thickness meter
Brand New 8 China 20 Years 18 Years 11 Months
1,200,000 1,135,250
110 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Colorimeter 10 Germany 20 Years 18 Years 11 Months
1,300,000 1,229,854
111 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Paints Lab Agitator Equipment’s
Brand New 3 China 20 Years 18 Years 11 Months
2,550,000 2,412,406
112 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Paints shaker Lab Equipment’s
Brand New 3 China 20 Years 18 Years 11 Months
2,700,000 2,554,313
113 1/6/2018 Octopass Scientific Co.
33/2, Hatkhola Road, Tikatoly, Dhaka-1203
N/A Paints Mixer Lab Equipment’s
Brand New 3 China 20 Years 18 Years 11 Months
2,520,000 2,384,025
114 1/6/2018 S.M Scientific Store
26, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A
Laboratory Multi Position Magnetic Stirrer
Brand New 3 China 20 Years 18 Years 11 Months
2,160,000 2,043,450
115 1/6/2018 S.M Scientific Store
26, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Homogenizer Brand New 1 Germany 20 Years 18 Years 11 Months
560,000 529,783
116 1/6/2018 S.M Scientific Store
26, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Lab Mixing equipment
Brand New 3 China 20 Years 18 Years 11 Months
2,280,000 2,156,975
117 1/6/2018 S.M Scientific Store
26, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Paint Mixing equipment
Brand New 3 China 20 Years 18 Years 11 Months
2,100,000 1,986,688
118 1/6/2018 S.M Scientific Store
26, Shahid Nazrul Islam Sarak, Dhaka-1203
N/A Powder Mixing equipment
Brand New 3 China 20 Years 18 Years 11 Months
2,391,965 2,262,899
119 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Atoritor Machine
Brand New 2 China 20 Years 19 Years 10 Months
2,335,235 2,315,775
120 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A High Speed Mixer Machine
Brand New 2 China 20 Years 19 Years 10 Months
1,800,000 1,785,000
121 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Atoritor Machine Stone
Brand New 2000 China 20 Years 19 Years 10 Months
990,000 981,750
Page: 64
122 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Laboratory Mixture Machine
Brand New 2 China 20 Years 19 Years 10 Months
614,365 609,245
123 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Laboratory Atoritor Machine
Brand New 2 China 20 Years 19 Years 10 Months
700,000 694,167
124 1/5/2019 New Ovi Engineering
476/B, Malibagh, DIT Road, Dhaka-1217
N/A Troly Brand New 5 China 20 Years 19 Years 10 Months
10,000 9,917
Total 334,829,670 292,713,242
(ix) Details of the machineries required to be bought by the issuer, cost of the machineries, name of the suppliers, date of placement of order and the date or expected date of supply, etc. No machineries are required to be bought by the issuer except machineries to be bought from IPO proceeds, the details of which are below:
SI. Name of Machineries Name of Supplier Model Country of
Origin Qty
(Nos.)
Date of Placement
of Order
Date or Expected Date of Supply
1 Variable Speed Mixer Machine for Coating, Paint, Resin, Pigment
Shanghai Refined Chemical Machinery Co., Ltd. Shanghai, China
RFD-series China 4
Aft
er
rece
ivin
g IPO
Fun
d
Withi
n 1
8 M
ont
hs A
fter
rece
ivin
g
IPO
Fun
d
2 Platform High-Speed Dissolver Machine for Producing Coating
Shanghai Refined Chemical Machinery Co., Ltd. Shanghai, China
(x) In case the machineries are yet to be delivered, the date of quotations relied upon for the cost estimates given shall also be mentioned; There are no machineries which are yet to be delivered.
(xi) If plant is purchased in brand new condition then it should be mentioned; All plants and machineries of the Company were purchased in brand new condition.
AUDITOR'S CERTIFICATE REGARDING PURCHASED IN BRAND NEW CONDITION OF
MACHINERIES
We do hereby certify that all the equipment’s and machineries of BD Paints Limited amounting to Tk. 334,829,670.00 (including takeover machineries amounting Tk. 32,732,785) as on June 30, 2019 were purchased in brand new condition. There were no re-conditioned or secondhand machineries installed in the Company.
Place: Dhaka Dated: October 26, 2019
Sd/- FAMES & R
Chartered Accountants (xii) Details of the second hand or reconditioned machineries bought or proposed to be bought,
if any, including the age of the machineries, balance estimated useful life, etc. as per PSI certificates of the said machineries as submitted to the Commission; The Company purchased neither any second hand or reconditioned machineries nor any plan to purchase in future. It is mentionable here that BDPL has acquired capital machineries from Khaleda Begum Liyly. The machineries were bought by Khaleda Begum Liyly in brand new condition.
(xiii) A physical verification report by the issue manager(s) regarding the properties as submitted to the Commission;
PHYSICAL VERIFICATION REPORT
Of BD Paints Limited
This is to certify that we have visited the registered office, factory and corporate office of BD Paints Limited on 26 August, 2018, 06 March, 2019 and 14 December, 2019 and we have found the factory as details bellow: Visited and Accompanied by:
Particulars Name & Designation Company
Visited by (Imperial Capital Limited)
: Md. Salauddin Sikder FCMA CEO & Managing Director
Imperial Capital Limited
Visited by (EBL Investments Limited)
: Tahid Ahmed Chowdhury, FCCA Managing Director
EBL Investments Limited
Visited by (CAPM Advisory Limited)
: Tania Sharmin Managing Director & CEO
CAPM Advisory Limited
Accompanied by
: Md. Abul Khayer Chief Financial Officer
BD Paints Limited
: Md. Abul Basher Production Manager
Company Overview BD Paints Limited was incorporated as a Private Limited Company on April 17, 2014 and subsequently converted into a Public Limited Company on July 22, 2014 under Companies Act 1994 with the Registrar of Joint Stock Companies and Firms, Dhaka, Bangladesh under the Companies Act, 1994. The Company changed its name from Arafat Paint & Chemical Industries Limited to BD Paints Limited on September 04, 2016. The Certificate of Incorporation number is C-115399/14.
Page: 66
The Company started its commercial operation on April 17, 2014.
BD Paints Limited carried on business as local manufacturer of different types of paints. The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
There is no subsidiary company of BDPL.
The capital structure of the company is as follows:
Authorized Capital : Tk. 1,000,000,000.00 Paid up Capital : Tk. 500,000,000.00 Proposed IPO Size : Tk. 200,000,000.00 (2.00 Crore Shares @ Tk. 10.00 each) IPO Size (in share) : 20,000,000 Shares Registered & Corporate Office Registered office is situated at Plot # A-17, BSCIC Industrial Area, Kawnia, Barisal. Corporate office is situated at Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur, Bangladesh-rented office. Location of the Factory The factory is situated at BD Paints Limited, Plot # A-17, 22, BSCIC Industrial Area, Kawnia, Barisal and Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur, Bangladesh. Nature of Business The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc. The Company has following products under five categories:
1. Interior Paints (Synthetic Polyvinyl Distemper, Plastic Emulsion Paints, Water Sealer, Wall putty, Luxury Silk, Easy Emulsion, white Cement, Glycerin power, Chalk power, under Coat Power finale, Perfume Finale, A/C Red Oxide, hammer Paints, BD Thinner, Wood Burnish);
2. Exterior Paints (Weather Coat, Royel Emustion, BD Cem); 3. Wood & Metal (Alphona Synthetic enamel, Primium Synthetic Enamel, Wood Protector); 4. Industrial Paints (Epoxy Paint, Vernish oil, almunium Paints; 5. Marine Paints (Black & Red Oxide, Red Lead Primer).
DESCRIPTION OF PROPERTY Owned Building: We have identified that the factory of Plot # A-17, 22, BSCIC Industrial Area, Kawnia, Barisal. Rental Building: We have also identified that the rented corporate office & factory of Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur, Bangladesh.
(a) Land: We have found 68.87 decimals of land at Plot # A-17 & Plot # A-22, BSCIC
Industrial Area, Kawnia, Barisal surrounded by boundary wall.
(b) Rental Land Tongi: We have also found 15,320 sft. of land (rented) for corporate office and factory at Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur surrounded by boundary wall.
Page: 67
(c) Factory Building: Details of the buildings status are discussed below:
Buildings Position (Barishal) Type Total Area
(Sft.) Status of Use
Fabricated Building-1 (Plot A-17), BSCIC, Barisal RCC, Column, Wall-Brick Tin shade One Storied Completed Building)
2,100.00 Office Building & Store
Fabricated Building-2 (Plot A-17), BSCIC, Barisal RCC, Column, Wall-Brick One stories Completed Prefabricated Steel building
(f) ETP plant: BD Paints Limited has an ETP plant in Barisal factory to purify the waste
water produced from the manufacturing process in factory building. During our visit, we found ETP plant is running. Moreover, BDPL has planted varies types of trees around the factory.
During our visit of rented corporate office & Dhaka factory (measuring 15,320 sft.) located at Plot # 117/3, Noyabari Road, Sataish, Tongi, Gazipur, we found the corporate office, factory and warehouse. Besides, BDPL has taken another land (rental, rent agreement for 20 years’) for factory & warehouse measuring 10,500 sft. near the existing factory and corporate office located at Plot # 114/3, Noyabari Road, Sataish, Tongi, Gazipur to meet up the demand on market which is under construction for preparing factory and warehouse. Besides these assets, we have also found other assets like Vehicles, Furniture & fixtures, Computer, Office Equipment, Generator, Water Pump, Water Tank, Printing Positive, Printing Frame, Steel rake, Printing Table, and Skin Rubber. It is also mentionable here that during our visit, we also checked Inventory register and roster (Workers’ duty register) and found satisfactory. We also noticed that most of the machineries of BDPL are in good condition and running well, few types of machinery are out of order. Signboard: The signboard of the Company is well displayed at the registered office & factory and corporate office premises and there is no other office or factory within the said factory premises.
Sd/- Md. Salauddin Sikder FCMA CEO & Managing Director Imperial Capital Limited
Sd/- Tahid Ahmed Chowdhury, FCCA
Managing Director EBL Investments Limited
Sd/- Tania Sharmin
Managing Director & CEO CAPM Advisory Limited
(xiv) If the issuer is entitled to any intellectual property right or intangible asset, full description
of the property, whether the same are legally held by the issuer and whether all formalities in this regard have been complied with; The Company has no intellectual property right or intangible asset.
Page: 70
(xv) Full description of other properties of the issuer;
Particulars
Written down
value as on
30-Jun-19
Vehicles 8,668,208
Furniture & fixtures 6,292,471
Computer 2,567,090
Office Equipment 1,760,554
Generator 206,465
Water Pump 925,649
Page: 71
(f) Plan of Operation and Discussion of Financial Condition:
The issuer’s revenue and results from operation, financial position and changes in financial position and cash flows for the last five years:
Grand Total 717,492,099 666,163,781 333,125,431 279,646,163 248,841,416
(b) Any material commitments for capital expenditure and expected sources of funds for such expenditure; The Company has not yet made any material commitment for capital expenditure except for those that are mentioned under the head ‘Use of Proceeds’ from IPO fund.
(c) Causes for any material changes from period to period in revenues, cost of goods sold, other operating expenses and net income; The company’s revenue and other income as well as operating expenses and net income have continued to change due to increasing production by adding new machine and increase sales volume.
Net Profit after Tax 51,328,318 53,038,350 53,479,268 30,804,747 28,841,416
Causes for changes: Revenues: The company has installed new machineries in order to increase production capacity. As a result, production increased as well as turnover increased. Through installation of new different types of machineries, the Company has been able to produce various types of products as well as to create the market of new products. So, increase of turnover of the company is relevant. Cost of goods sold: The costs of materials to revenue are consistent over the years. Other operating expenses: The Company did not incur any other expenses other than regular expenses during the last four years. Net income: The growth of net profit before and after tax is consistent with the growth of the revenue. No unusual changes have been occurred during the last four years on the above matters.
(d) Any seasonal aspects of the issuer’s business; BDPL supplies its products to its regular buyers, who provide sufficient purchase orders to work throughout the year. As a result, no seasonal aspects adversely affect the business of BDPL.
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(e) Any known trends, events or uncertainties that may have material effect on the issuer’s
future business; At present, there are no known trends, events and/or uncertainties that shall have a material impact on the company’s future business except for those which are naturally beyond control of human being.
The business operation of the Company may be affected by the following events: I. Political unrest
II. Natural disaster.
(f) Any assets of the company used to pay off any liabilities; None of the assets of the company has been used to pay off any liabilities of the company.
(g) Any loan taken from or given to any related party or connected person of the issuer with details of the same; The Company did not take or give any loan from or to any related party or connected person of the issuer.
(h) Any future contractual liabilities the issuer may enter into within next one year, and the impact, if any, on the financial fundamentals of the issuer; The Company has no plan to enter into any contract creating future liabilities for the company except for those which are created in the normal course of business activities.
(i) The estimated amount, where applicable, of future capital expenditure; The Company has no plan for capital expenditure except for those mentioned in the ‘Use of Proceeds’ from IPO fund.
(j) Any VAT, income tax, customs duty or other tax liability which is yet to be paid, including any contingent liabilities stating why the same was not paid prior to the issuance of the prospectus. Updated income tax status for the last 5 years or from commercial operation, which is shorter;
VAT: There is no VAT liability of the Company as on 30 June, 2019. Customs Duty or other tax liabilities: There is no customs duty Liability of the Company as on 30 June, 2019. Income Tax: The Company is a regular tax payer. The TIN number of the company is 687708334761/Taxes Circles-156 (Companies), Taxes Zone-08, Dhaka. Following are the details of income tax related information of the Company:
Accounting year
Assessment Year
Assessment Status
30-Jun-15 2015-2016
As per certificate given by Deputy Commissioner of Taxes (DCT), Taxes Circle-156 (Companies), Taxes Zone-8, Dhaka dated 27.02.2019 the assessment of the Company for the assessment year 2015-2016 has beed completed.
30-Jun-16 2016-2017
As per certificate given by Deputy Commissioner of Taxes (DCT), Taxes Circle-156 (Companies), Taxes Zone-8, Dhaka dated 27.02.2019 the assessment of the Company for the assessment year 2016-2017 & 2017-2018 has been completed. 30-Jun-17 2017-2018
30-Jun-18 2018-2019 Income tax return has been submitted and assessment under process.
30-Jun-19 2019-2020 Not yet submitted.
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(k) Any financial commitment, including lease commitment, the company had entered into during the past five years or from commercial operation, which is shorter, giving details as to how the liquidation was or is to be effected; The Company has following operating lease commitment for its rented corporate office at BD Paints Limited, Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur:
Address Area (Sft) Rent/Sft. Period Rent p/m (Tk.)
BD Paints Limited, Plot # 117/3, Nayabari Road, Sataish, Tongi, Gazipur 15,320 @ Tk. 8.00 Jan 1, 2018 to Dec 31, 2022 122,560/-
(l) Details of all personnel related schemes for which the company has to make provision for in future years; The Company considers its human resources as the most valuable assets and the profitability of company largely depends on the efficient & effective productivity of human resources. The Company provides facilities and incentives to motivate employees for its continued profitability and prosperity.
The following benefits and related scheme are applicable for company’s permanent payroll employees:
Yearly Increment: Upon management approval and salary brackets or scales, annual increments on basic salaries may be given to employees.
Allowances: According to pay scales, allowances are given for expenses such as house rent, conveyance, medical expense and mobile phone facility.
Festival Bonus: Two festival bonuses are paid to each employee.
WPPF & Welfare fund:
The company makes a regular allocation of 5% on net profit after charging such contribution but before tax to this fund as per provision of Bangladesh Labour Law, 2006 and is payable to the workers as define in the said Law.
(m) Break down of all expenses related to the public issue; The following amount to be paid to the Issue Managers, Underwriters and other costs are as follows:
Sl. No. Particulars Basis Amount in BDT (approx.)
A. MANAGERS TO THE ISSUE FEES 4,600,000
1 Managers to the Issue fee Maximum 2% (two percent) of the public offer amount 4,000,000
2 VAT against Issue Management Fees 15% of issue management fees 600,000
B. FEES RELATED TO LISTING WITH THE STOCK EXCHANGES 3,500,000
4 DSE and CSE Annual Fee @ 0.05% on Tk. 100 Crore of paid-up capital and 0.02% on the rest amount of paid-up capital; (minimum Tk. 50 thousand and Maximum Tk. 6 lacs for each exchanges
700,000
5 Fees related to Listing with the stock exchanges @ 0.25% on Tk. 10 Crore and 0.15% on the rest amount of paid up capital range; (minimum 50 thousand and maximum Tk. 1 crore for each exchanges)
2,300,000
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6 Data Transmission Fee for DSE & CSE Fixed 400,000
14 Connection Fee (TK. 500 per month* 12) At Actual 6,000
15 Initial Public Offering fee @.015% of issue size+.015% of Pre-IPO paid up capital 105,000
F. PRINTING AND POST PUBLIC OFFER EXPENSES 8,486,500
16 Publication of prospectus Estimated (to be paid at actual) 650,000
17 Abridge Version of Prospectus and Notice in 4 daily news paper
Estimated (to be paid at actual) 600,000
18 Notice for prospectus, Lottery, Refund etc. in 4 daily news paper
Estimated (to be paid at actual) 250,000
19 Lottery related expenses including BUET fee Estimated (to be paid at actual) 800,000
20 Data Processing and Share Software Charge Estimated (to be paid at actual) 5,890,000
22 Stationary & Other Expenses Estimated (to be paid at actual) 296,500
Grand Total 18,700,000
N.B.: Actual costs will vary if above mentioned estimates differ and will be adjusted accordingly.
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(n) If the issuer has revalued any of its assets, the name, qualification and experiences of the valuer and the reason for the revaluation, showing the value of the assets prior to the revaluation separately for each asset revalued in a manner which shall facilitate comparison between the historical value and the amount after revaluation and giving a summary of the valuation report along with basis of pricing and certificates required under the revaluation guideline of the Commission;
BD Paints Limited has not made any revaluation of its asset.
(o) Where the issuer is a holding or subsidiary company, full disclosure about the transactions, including its nature and amount, between the issuer and its subsidiary or holding company, including transactions which had taken place within the last five years of the issuance of the prospectus or since the date of incorporation of the issuer, whichever is later, clearly indicating whether the issuer is a debtor or a creditor;
The Company has neither any subsidiary nor it operates under any holding company. Hence, no transaction has taken place.
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(p) Financial Information of Group Companies and Companies under common ownership by more than 50%: following information for the last three years based on the audited financial statements, in respect of all the group companies of the issuer, wherever applicable, along with significant notes of auditors:
BDPL has no group companies and companies under common ownership by more than 50%. Hence information under this head is not applicable for the Company.
Particulars Name of
Companies
(1) Date of Incorporation N/A
(2) Nature of Business N/A
(3) Equity Capital N/A
(4) Reserves (In crore) N/A
(5) Sales (In crore) N/A
(6) Profit after Tax (In Crore) N/A
(7) Earnings Per Share & Diluted Earnings Per Share N/A
(8) Net Asset Value N/A
(9) The highest and lowest market price of shares during the preceding six months with disclosures for changes in capital structure during the period, if any securities of the group are listed with any exchange
N/A
(10) Information regarding significant adverse factors relating to the group N/A
(11) Any of the group companies has become sick or is under winding up N/A
(12) The related business transactions within the group and their significance on the financial performance of the issuer N/A
13) Sales or purchase between group companies or subsidiaries or associate companies when such sales or purchases exceed in value in the aggregate ten percent of the total sales or purchases of the issuer and also material items of income or expenditure arising out of such transactions
N/A
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(q) Where the issuer is a banking company, insurance company, non‐banking financial institution or any other company which is regulated and licensed by another primary regulator, a declaration by the board of directors shall be included in the prospectus stating that all requirements of the relevant laws and regulatory requirements of its primary regulator have been adhered to by the issuer; Not applicable.
(r) A report from the auditors regarding any allotment of shares to any person for any consideration otherwise than cash along with relationship of that person with the issuer and rationale of issue price of the shares;
A REPORT FROM THE AUDITORS REGARDING ANY ALLOTMENT OF SHARES TO ANY PERSON FOR ANY CONSIDERATION OTHERWISE THAN CASH ALONG WITH RELATIONSHIP OF THAT PERSON WITH THE ISSUER AND RATIONALE OF ISSUE PRICE OF THE SHARES
We certify that BD Paints limited allotted the following ordinary shares otherwise than cash. The books of accounts of the Company have been verified and found in order.
Date of issue
Persons to whom those are issued
No. of shares allotted
Relationship with the issuer
Rationale of the price
Consideration & Valuation
Reasons for the issue
Benefit from the issue
17-Apr-14 Khaleda Begum Liyly 3,500,000 Sponsor Face Value
Other than Cash for Net Assets
(assets-liabilities)
For acquisition of business, the said ordinary shares Issued to its sole
proprietor against net assets (assets-liabilities)
at the time of business
acquisition.
Acquisition of business
23-Apr-15
Md. Amir Hossain 1,000,000 Sponsor
Face Value
Other than Cash Being
Consideration for Land
As per board decision land was
acquired
Acquisition of land for business purpose
Entire shares transferred
subsequently and ceased to be director
of the company.
Md. Bellal Khan 500,000 Sponsor & Managing Director
Md. Amin Ur Rashid 500,000 Sponsor
Shareholder
Sd/-
Place: Dhaka Date: October 26, 2019
FAMES & R Chartered Accountants
(s) Any material information, which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public There is no material information, which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public
(t) Business strategies and future plans - projected financial statements shall be required only for companies not started commercial operation yet and authenticated by Chairman, two Directors, Managing Director, CFO, and Company Secretary;
Business Strategies: A business strategy sets out to achieve the desired goals. Business strategy is defined as long-term business planning. The company strategies are as follows:
1. Increase Fixed Assets: The Company is in planning to invest in fixed assets in order to expand its existing business.
2. Economic Scale: With a view to spreading the fixed cost over more units’ company is trying to increase economic of scale
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3. Lower price: In order to get more market share, the Company is trying to be competitive price to deal with its rivals.
4. Product Differentiating: By differentiating in the product line, company will be able to make higher price for its specialized product. Hence, product differentiation is on the mind as well.
Future plans In persuasion of aforesaid Strategies BDPL and its experienced team have been working insistently keeping in consideration future as well. BDPL has a planned for acquisition of machineries & equipments, construction of building and other civil works by using IPO proceeds.
(u) Discussion on the results of operations:
1) A summary of the past financial results after adjustments as given in the auditor’s report containing significant items of income and expenditure;
3) The income and sales on account of major products or services; There is no individual major product of the Company.
4) In case, other income constitutes more than 10% of the total income, the breakup of the same along with the nature of the income, i.e., recurring or non-recurring; The Company’s other income is not more than 10% of the total income.
5) If a material part of the income is dependent upon a single customer or a few major customers, disclosure of this fact along with relevant data. Similarly, if any foreign customer constitutes a significant portion of the issuer’s business, disclosure of the fact along with its impact on the business considering exchange rate fluctuations; The Company’s income is not dependent upon a single customer or a few major customers nor foreign customer.
6) In case the issuer has followed any unorthodox procedure for recording sales and revenues, its impact shall be analyzed and disclosed. The issuer has not followed any unorthodox procedure for recording sales and revenues.
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(v) Comparison of recent financial year with the previous financial years on the major heads of the profit and loss statement, including an analysis of reasons for the changes in significant items of income and expenditure, inter-alia, containing the following:
Operating Income 82,024,908 84,858,731 82,250,997 47,391,918 44,371,409
Other Non-Operating Income/(Loss) 890,067 818,604 24,800 - -
Profit before Contribution to WPPF & Welfare Fund 82,914,975 85,677,335 82,275,797 47,391,918 44,371,409
Contribution to WPPF & Welfare Fund (3,948,332) (4,079,873) - - -
Profit before Tax 78,966,643 81,597,462 82,275,797 47,391,918 44,371,409
Income Tax Expenses (27,638,325) (28,559,112) (28,796,529) (16,587,171) (15,529,993)
Net Profit after Tax 51,328,318 53,038,350 53,479,268 30,804,747 28,841,416
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Analysis of reasons for the changes in significant items of income and expenditure: In the last few years, production capacity has been increased by installation of new machinery. As a result, significant revenue has been increased in the year 2017 & 2018.
1) Unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc. The is no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc.
2) Significant economic changes that materially affect or are likely to affect income from continuing operations; There are no significant economic changes that materially affect or are likely to affect income from continuing operations.
3) Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations; At present, there are no known trends, events and/or uncertainties that shall have a material impact on the company’s future business except for those which are naturally beyond control of human being.
The business operation of the Company may be affected by the following events: i. Political unrest; ii. Natural disaster.
4) Future changes in relationship between costs and revenues, in case of events such as future increase in labor or material costs or prices that will cause a material change are known; We are aware of the fact that future is always uncertain that affect business. It is expected that labor and material price will go up in future because of inflation and other factors. However, revenue is always adjusted and follows the trend in line with production cost. Hence, any change in cost will be reflected in sales price.
5) The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices; There is no material increase in sales volume or revenue due to increased sales volume, introduction of new products or services or increased sales prices.
6) Total turnover of each major industry segment in which the issuer operated; Considering the business nature of BDPL, the Company is assumed to operate in Miscellaneous sector.
Year Industry Segment-Miscellaneous Sector
(Amount in million Tk.)
2018-2019 17,733.31
2017-2018 16,483.50
2016-2017 14,622.45
Note: The turnover mentioned above are consist of the turnover of listed similar company namely Berger Paints Bangladesh Limited for the year ended 31 March, 2017, 2018 & 2019.
(Source: Annual Report) 7) Status of any publicly announced new products or business segment;
The Company did not announce new products or business segment.
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8) The extent to which the business is seasonal. BDPL supplies its products to its regular buyers, who provide sufficient purchase orders to work throughout the year. As a result, no seasonal aspects adversely affect the business of BDPL.
(w) Defaults or rescheduling of borrowings with financial institutions or banks, conversion of loans into equity along with reasons thereof, lock out, strikes and reasons for the same etc. during the history of operation of the company;
Rescheduling of borrowings with banks: The Company neither defaulted or rescheduled of its borrowings with financial institutions or banks nor converted any of its loans into equity till to date.
conversion of loans into equity along with reasons thereof, lock out, strikes and reasons for the same etc. during the history of operation of the company There is no history of conversion of loan into equity, lock out and strikes.
(x) Details regarding the changes in the activities of the issuer during the last five years which may had a material effect on the profits or loss, including discontinuance of lines of business, loss of agencies or markets and similar factors; There were no changes in the activities of the Company during the last four years and had not any material effect on the profits or loss, including discontinuance of lines of business, loss of agencies or markets and similar factors.
(y) Injunction or restraining order, if any, with possible implications; There was no injunction or restraining order.
(z) Technology, market, managerial competence and capacity built-up;
Technology: BD Paints Limited has been upgraded and using advanced technology in the paints sector of Bangladesh. The department of Research and Development (R&D) and Total Quality Management (TQM) are furnished with the best technologies in this country. Its manufacturing process heavily integrated technology driven, dynamic in nature and using highly sophisticated state-of-the–art cutting edge technology.
Market The Company discovers different needs and groups in the market place, target those needs and groups that it can satisfy in the superior way and then position its offerings, so that the target market recognize the company’s distinctive offerings and image. The Company is producing different types of products are now market demanded product for furnishing solutions. Market demand says, market has been growing up and the company has good opportunity to maximize market share. It is expected that BD Paints Limited will enjoy more growth in the future, if it continues to be market responsive. Currently, the sectors are growing at 20 percent. Hence, the managements are capable enough to deal with enhancing the capacity of the overall phenomenon of the business capacity.
Managerial competence The management team of the Company is highly professional with having expertise in different field. The management team is led by Mr. Md. Bellal Khan, Managing Director, who has vast experience in the field of manufacturing of paints, chemicals & coating sector. There are also number of Professional and experienced Engineers, Technicians, Chemist, Accountants and Compliance personnel have been working for the betterment of the product as well as company.
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Capacity built-up The company is at the growing up stage of the business. Hence, capacity is increasing to grasp the more market share as there is huge opportunity in the market. In the financial year 2017, the company invested huge amount in plant and machineries. In the financial year 2018, there is also investment for fixed assets sophisticated automated machineries for the company as well as develop products.
(aa) Changes in accounting policies in the last three years; The management of the Company has introduced WPPF & Welfare Fund in the year 2018.
(bb) Significant developments subsequent to the last financial year: A statement by the directors whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the prospectus and which materially and adversely affect or is likely to affect the trading or profitability of the issuer, or the value of its assets, or its ability to pay its liabilities within the next twelve months;
A statement by the directors: In our opinion, there have no such circumstances arisen since the date of the last financial statements as disclosed in the prospectus which materially and adversely affect or is likely to affect the trading or profitability of the BD Paints Limited or the value of its assets, or its ability to pay its liabilities within the next twelve months.
Sd/- Sd/- Mrs. Aysha Siddika Md. Bellal Khan Chairman Managing Director Sd/- Sd/- Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director Director Sd/- Mohammad Shaheenul Islam Independent Director
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(cc) If any quarter of the financial year of the issuer ends after the period ended in the audited financial statements as disclosed in the prospectus, unaudited financial statements for each of the said quarters duly authenticated by the CEO and CFO of the issuer; Unudited first quarter financial statements for the period ended July 01, 2019 to September 30, 2019 are as follows:
BD PAINTS LIMITED Statement of Financial Position
Un-Audited As at September 30, 2019
Particulars Amount in Taka
30.09.2019 30.06.2019
ASSETS
Non-Current Assets 416,760,099 421,492,572 Property, Plant and Equipment 391,123,692 395,856,165 Capital Work in Progress 25,636,407 25,636,407 Current Assets 454,629,244 428,974,217
Inventories 163,233,395 153,590,365 Trade and Other Receivables 153,037,809 139,608,397 Advances, Deposits & Prepayments 51,293,942 50,199,561 Cash and Cash Equivalents 87,064,098 85,575,894 Total Assets 871,389,343 850,466,789 EQUITY & LIABILITIES Shareholders' Equity 733,840,281 717,492,099
Deferred Tax Liability 53,227,568 50,725,779 Current Liabilities 84,321,494 82,248,911
Trade Payables 2,731,964 7,703,304 Provision for WPPF 5,205,885 3,948,332 Liabilities for Expenses 3,697,216 4,211,924 Provision for Income Tax 72,686,429 66,385,351 Total Equity and Liabilities 871,389,343 850,466,789 Net Asset Value (NAV) Per Share 14.68 14.35
Sd/- Sd/ Chief Financial Officer Managing Director
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BD PAINTS LIMITED Statement of Profit or Loss and Other Comprehensive Income
Un-Audited For the period from 1st July 2019 to 30 September, 2019
Particulars
Amount in Taka
01.07.2019 To
30.09.2019
01.07.2018 To
30.09.2018
Sales Revenue 102,512,649 95,935,525 Less: Cost of Sales 62,247,419 58,081,745 Gross Profit 40,265,230 37,853,780 Less: Operating Expenses 14,944,528 13,554,205 Administrative Expenses 9,302,813 8,536,661 Selling & Distribution Expenses 5,641,715 5,017,544 Operating Profit 25,320,702 24,299,575 Other non-operating income / (loss) 1,087,900 1,093,000 Profit before Contribution to WPPF & Welfare Fund 26,408,602 25,392,575 Less: Contribution to WPPF & Welfare Fund 1,257,552 1,209,170
Profit before Tax 25,151,049 24,183,405 Less: Income Tax Expenses 8,802,867 8,464,192 Current Tax Expenses 6,301,078 5,150,895 Deferred Tax Expenses 2,501,789 3,313,298 Net Profit after Tax 16,348,182 15,719,213 Earnings Per Share (EPS) 0.33 0.31
Sd/- Sd/ Chief Financial Officer Managing Director
BD PAINTS LIMITED Statement of Changes in Equity
Un-Audited
For the period ended September 30, 2019
Particulars Share Capital Retained Earnings Total Equity
Balance as at 01-07-2019 500,000,000 217,492,099 717,492,099
Sd/- Sd/ Chief Financial Officer Managing Director
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BD PAINTS LIMITED Statement of Cash Flows
Un-Audited For the period from 1st July 2019 to 30 September, 2019
Particulars
Amount in Taka
01.07.2019 01.07.2018
To To
30.09.2019 30.09.2018 Cash flows from operating activities:
Cash receipts from customers 89,083,238 83,684,950 Cash receipts from others income 1,087,900 1,093,000 Cash payment to suppliers (65,643,700) (53,429,740) Cash payment to employees (11,986,186) (10,295,094) Cash payment to others (8,639,517) (7,831,059)
Cash generated from operations 3,901,735 13,222,057 Cash payment for income tax (2,413,531) (2,314,601)
Net Cash generate from Operating activities 1,488,204 10,907,455
Cash flows from investing activities:
Acquisition of property, plant and equipment - -
Net cash used in investing activities - - Cash flows from financing activities:
Issuance of shares - -
Net cash generated from financing activities - - Net increase/(decrease) in cash and cash equivalents 1,488,204 10,907,455 Cash and cash equivalents at beginning of the year 85,575,894 103,899,039
Cash and cash equivalents at end of the year 87,064,098 114,806,494 Net operating cash flows per share (NOCFPS) 0.03 0.22
Sd/- Sd/ Chief Financial Officer Managing Director
(dd) Factors that may affect the results of operations. There are no such factors that may affect the results of operations.
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CHAPTER (VII): MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
(a) Overview of business and strategies:
Overview of business:
BD Paints Limited was incorporated as a Private Limited Company on April 17, 2014 and subsequently converted into a Public Limited Company on July 22, 2014 under Companies Act 1994 with the Registrar of Joint Stock Companies and Firms, Dhaka, Bangladesh under the Companies Act, 1994. The Company changed its name from Arafat Paint & Chemical Industries Limited to BD Paints Limited on September 04, 2016. The Certificate of Incorporation number is C-115399/14. The Company started its commercial operation on April 17, 2014. BD Paints Limited carried on business as local manufacturer of different types of paints. The principal activities of the company are to manufacture and marketing different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, bdcem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc. There is no subsidiary company of BDPL. Strategies: A business strategy sets out to achieve the desired goals. Business strategy is defined as long-term business planning. The company strategies are as follows: 1. Increase Fixed Assets: The Company is in planning to invest in fixed assets in order to expand
its existing business. 2. Economic Scale: With a view to spreading the fixed cost over more units’ company is trying to
increase economic of scale
3. Lower price: In order to get more market share, the Company is trying to be competitive price to deal with its rivals.
4. Product Differentiating: By differentiating in the product line, company will be able to make higher price for its specialized product. Hence, product differentiation is on the mind as well.
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(b) SWOT ANALYSIS:
S W O T STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
1. Strong Management: The Company has good management to run the company efficiently.
2. Product line variety: The Company’s product line has variety. The Company sells different line of product
3. Modern Machineries: The Company has been using modern machineries that smooth its operation.
4. Technology: The Company has latest tools and technologies to support production.
5. Dedicated Workforce: The Company has dedicated human resources.
1. Low Financial Position: The Company needs more finance to be competitive over its rivals.
2. Inefficient Workforce: Our workforces are not so skilled in comparison with other industry sectors.
3. Poor market share: The company is copetiting with multi-national companies. Hence, at present market share is poor.
4. Slim Profit: Profit margin is slim.
5. Brand image:
Comparatively, at present, company’s brand image is not as high as other companies have.
6. Lower capacity utilization: Capacity utilization is not very. However, soon it will be at the decent level.
1. High Demand: The product demand is high and vibrant.
2. Suppliers Availability: In Paints industry, there are many suppliers. Hence, company has bargaining power over supplier to purchase raw material cheaply.
3. Competitive Wages: The Company has advantage due to low wages comparing to other industry sectors.
4. Easy Bank Loan: For working capital, there is an easy bank loan facility for the company.
1. Intense Competition: There is high rivalry among the competitors to get the market share.
2. Shortage of Power: In our country, there is power shortage which also affects production.
3. Short operational history: Operation history is short.
4. Operating the Company’s activities on leased land: Company has been operating on leased land of 99 years.
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(c) Analysis of the financial statements of last five years with reason(s) of fluctuating revenue or sales, other income, total income, cost of material, finance cost, depreciation and amortization expense, other expense; changes of inventories, net profit before and after tax, EPS etc.
Changes of Inventories 40,917,645 30,923,450 39,128,753 11,382,547 -
Net Profit Before Tax 78,966,643 81,597,462 82,275,797 47,391,918 44,371,409
Net Profit After Tax 51,328,318 53,038,350 53,479,268 30,804,747 28,841,416
EPS 1.03 2.13 2.43 1.40 2.38
Reason of Fluctuation:
Revenue: The company has installed new machineries in order to increase production capacity. As a result, production increased as well as turnover increased. Through installation of new different types of machineries, the Company has been able to produce various types of products as well as to create the market of new products. So, increase of turnover of the company is relevant.
Other Income: Other income has been generated from Wastage sales and Bank interest.
Total Income: Since Revenue is increased, so naturally total income has been increased. Cost of Materials: The costs of materials to revenue are consistent over the years.
Finance Cost and Bank Charge: The Company has no short term or long-term loan from any bank or any financial institution. So, there is no finance cost and extra bank charge which consistent with the revenue. Depreciation and Amortization: The management has increased capacity installing new machineries, build up factory building and other assets. So, depreciation has been charged or increased accordingly. The Company did not amortize any of its capital expenditure during the last four years. Other Expenses: The Company did not incur any other expenses other than regular expenses during the last four years. Changes of inventory: There has been increasing of installed capacity and sales volume over the year. The demand for products is also increasing. So, the management has to maintain sufficient amount of inventory in order to meet the sales order. Thus, inventory is increasing year to year. Net profit before and after Tax and Earnings per Share The growth of net profit before and after tax is consistent with the growth of the revenue. No unusual changes have been occurred during the last four years on the above matters. Earnings per Share are properly calculated through using weighted average number of ordinary shares for each year.
Page: 90
(d) Known trends, demands, commitments, events or uncertainties that are likely to have an effect on the company’s business: At present, there are no known trends, events and/or uncertainties that shall have a material impact on the company’s future business except for those which are naturally beyond control of human being.
The business operation of the Company may be affected by the following events: i. Political unrest; ii. Natural disaster.
(e) Trends or expected fluctuations in liquidity:
There are no trends or expected fluctuations in liquidity.
(f) Off-balance sheet arrangements those have or likely to have a current or future effect on financial condition: There are no off-balance sheet arrangements those have or likely to have a current or future effect on financial condition.
Page: 91
CHAPTER (VIII): DIRECTORS AND OFFICERS
(a) Name, Father’s Name, age, Residential address, Educational qualification, experience and position of each director and nominated director with nomination period, organization name:
SL Name of Director, Father’s Name, Age & Experience Residential Address Educational
Qualification
Name of the Institutions and
Duration for Nominated
Director
1
Name: Mrs. Aysha Siddika
0729-000 College Road, Barisal Sadar, Barisal.
M.A. -
Position: Chairman
Father's Name: Dr. Ali Akbar
Age: 41 Years
Experience: 12 Years
2
Name: Md. Bellal Khan
Khan Mansion, 617 College Road, Barisal Sadar, Barisal
M.Sc -
Position: Managing Director
Father's Name: Late Abdus Sobhan Khan
Age: 33 Years
Experience: 10 Years
3
Name: Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Name: Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
779 Konabari, Gazipur Sadar, Gazipur
HSC 3 Years
(From 25-Jan-18 to 24-Jan-21)
Position: Director
Father's Name: Nurul Islam
Age: 20 Years
Experience: 2 Years
5
Name: Mohammad Shaheenul Islam
Nebedita Hasnahena, Flat # 2D,
12/Cha/2/4, Road # 4, Shyamoli, Dhaka-
1204
MBA & M.Com 3 Years
(From 26-Aug-18 to 25-Aug-21)
Position: Independent Director
Father's Name: Md. Abdul Karim Sikder
Age: 48 Years
Experience: 15 Years
Page: 93
(b) Date of first Directorship and Expiry of Current Tenure of the directors:
Sl. Name of the Director Position Date of first Directorship
Date of Expiration of Current term
1 Mrs. Aysha Siddika Chairman 28-Dec-16 6th AGM in 2020
2 Md. Bellal Khan Managing Director 17-Apr-14 6th AGM in 2020
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director 25-Jan-18 5th AGM in 2019
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director 25-Jan-18 5th AGM in 2019
5 Mohammad Shaheenul Islam Independent
Director 26-Aug-18 7th AGM in 2021
(c) Name of Interest and Involvement in other business or organization of directors:
Sl. Name of Director Designation in BDPL
Directorship/Ownership with Other Companies
Companies Position
1 Mrs. Aysha Siddika Chairman Not involved in other
organization -
2 Md. Bellal Khan Managing Director Not involved in other
organization -
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director Not involved in other
organization -
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director Not involved in other
organization -
5 Mohammad Shaheenul Islam Independent Director Not involved in other
organization -
(d) Statement of if any Directors of the issuer are associated with the securities market in any
manner and any director of the issuer company is also director of any issuer of other listed securities during last three years with dividend payment history and market performance: None of the Directors are involved in securities market in any manner and not have any directorship in any issuer of other listed securities during last three years.
spouse’s mother, spouse’s brother, spouse’s sister) among the directors and top five officers:
i. Family relationship among directors
Sl. Name Designation Relationship
1 Mrs. Aysha Siddika Chairman No relationship
2 Md. Bellal Khan Managing Director Husband of Jannatul
Ferdous Mim
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director No relationship
4 Jannatul Ferdous Mim Nominated by Sabila Sea Foods Ltd.
Director Wife of Md. Bellal Khan
5 Mohammad Shaheenul Islam Independent Director No relationship
ii. Family relationship among directors and top five officers of the company:
There is no family relationship exist between directors and top five management officers except mentioned above.
Page: 94
(f) Brief description of other businesses of the directors:
Mrs. Aysha Siddika Chairman Not involved in other business. Md. Bellal Khan Managing Director Not involved in other business.
Md. Maruful Islam Turan Representative of IBP Agrovet Limited Director Not involved in other business.
Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited Director Not involved in other business. Mohammad Shaheenul Islam Independent Director Not involved in other business.
(g) Short bio-data of each director: Mrs. Aysha Siddika, Chairman Aysha Siddika, Father’s Name: Dr. Ali Akber, Mother’s Name: Setara Begum, Address: 0729-000 College Road, Post Office: Barisal Sadar, Barisal. She was born on 6th January 1977. She completed her Master’s Degree from National University and started her career with involving in manufacturing and paints industry. Md. Bellal Khan, Managing Director Md. Bellal Khan, S/O- Late Abdus Sobhan Khan, Mother’s Name- Liyly Begum, Address: Khan Mansion, 617 College Road, Barisal Sadar, Barisal. He was born in 16th August 1985. He completed his B.Sc (Honors), M.Sc. (Statistics) from Jagannath University, Dhaka. After completing his graduation he engages in the field of business and having 10 years of experience in the field of paints and chemical manufacturing industry. With his dynamic leadership, vision and sincere exertion BD Paints Limited able to get a strong position in the paints market of Bangladesh. He is the honorable member of Dhaka Club, Barisal Club and Rotary Club. He visited India, Thailand, Malaysia, China, Japan, Singapure for business purpose. Md. Maruful Islam Turan, Representative of IBP Agrovet Limited, Director Md. Maruful Islam (Turan), S/O- Md. Nurul Islam, Mother’s Name: Most. Taslima, Address: 587 Kona Bari, Mirpur, Post Office: Nil Nagar-1346, Gazipur Sadar, Gazipur. He was born in 1st August 1985. He started his business career and having 8 years of professional experience in paints manufacturing and chemical industry. Jannatul Ferdous Mim, Representative of Sabila Sea Foods Limited, Director Ms. Jannatul Ferdous Mim, Fathers Name: Md. Nazrul Islam, Mother’s Name: Taslima Begum, Address: 779 Konabari, Gaziur Sadar, Gazipur. She was born in 1st August, 1998. She completed Higher Secondary Certificate and involved in paints and chemical manufacturing business.
Mohammad Shaheenul Islam, Independent Director Mr. Mohammad Shaheenul Islam, Son of Md. Abdul Karim Shikder and Rahima Khatun was born in 31st August 1970. His Present address is Nebedita Hasnahena, Flat No. 2D, 12/Cha/2/4, Road No. 4, Shyamoli, Mohammadpur, Dhaka-1207. He completed his MBA degree from Stamford University and M.Com from Jagannath University. He also completed his B.Com degree from City College, Dhaka and having 15 years of Professional experience.
Page: 95
(h) Loan status of the issuer, its directors and shareholders who hold 10% or more shares in the paid-up capital of the issuer in terms of the CIB Report of Bangladesh Bank: Neither the Company nor any of its Directors or shareholders who hold 10% or more shares in the paid-up capital of the issuer is loan defaulter in terms of the CIB report of Bangladesh Bank.
Page: 96
(i) Name, position, educational qualification, age, date of joining in the company, overall experience (in year), previous employment, salary paid for the financial year of the Chief Executive Officer, Managing Director, Chief Financial Officer, Company Secretary, Advisers, Consultants and all Departmental Heads. If the Chairman, any director or any shareholder received any monthly salary than this information should also be included:
Md. Faruk Ahmed Head of Internal Audit & Compliance
MBA 40 10-Apr-16 11 Roxy Paints Ltd., Gazi Group 420,000
The Company has no permanent advisor and consultant.
Page: 97
(j) Changes in the key management persons during the last three years:
The following changes have been made in the senior key management personnel during the last three years:
Name of the employee Position/Designation Date of Joining/resigned Remarks
Md. Faruk Ahmed Head of Internal Audit & Compliance 10-Apr-16 Appointed
Mahbub Hasan Head of Production Department (Chemist) 2-May-16 Appointed
Md. Masud Rana In-charge, Engineering Division 1-Aug-16 Appointed Md. Al-Amin Howlader Manager-QA Department 1-Oct-16 Appointed Md. Rasheduzzaman Manager-Distribution 1-Feb-17 Appointed S.M. Mamun Ar Rashid Company Secretary 1-Jul-17 Appointed Md. Nazmul Islam Head of Marketing & Sales 1-Sep-17 Appointed Selina Akther Head of R & D 5-Sep-17 Appointed
Md. Abul Khayer Chief Financial Officer 17-Dec-17 Appointed Mohammad Shaheenul Islam Independent Director 26-Aug-18 Appointed
Md. Mustafizur Rahman Head of Production Department (Chemist) 30-Apr-16 Resigned
Md. Abu Taleb Manager (Accounts & Finance) 30-Nov-17 Resigned
Md. Enamul Kabir Howlader Independent Director 26-Aug-18 Resigned Mahbub Chowdhury Head of Production Department (Chemist) 15-Aug-19 Resigned
Md. Nazmul Islam Head of Marketing & Sales 31-Jan-19 Resigned
Page: 98
(k) A profile of the sponsors including their names, father’s names, age, personal addresses, educational qualifications, and experiences in the business, positions or posts held in the past, directorship held, other ventures of each sponsor and present position:
Name, Father’s Name, Age & Personal Address Educational
Qualification
Experience Position/Post Holding in other Venture (Years) Past Present
Name: Md. Amir Hossain
B.A. 30 Years Sponsor &
MD Sponsor
Not involved in other organization
Father's Name: Late Hazi Abdul Latif Miah Age: 53 Years
Personal Address: House # 210, Nadia Villa, South Kalibari Road, Barisal
Name: Khaleda Begum Liyly
B.A. 20 Years Sponsor & Chairman
Sponsor Not involved in
other organization
Father's Name: Md. Moazzem Hossain
Age: 54 Years
Personal Address: House # 210, Nadia Villa, South Kalibari Road, Barisal
Name: Md. Junaed Hossain
MA 12 Years Sponsor & Director
Sponsor Not involved in
other organization
Father's Name: Md. Amir Hossain Age: 34 Years
Personal Address: House # 210, Nadia Villa, South Kalibari Road, Barisal
Name: Md. Bellal Khan
M.Sc 10 Years Sponsor & Director
Sponsor & Managing Director
Not involved in other organization
Father's Name: Late Abdus Sobhan Khan Age: 33 Years Personal Address: Khan Mansion, 617 College Road, Barisal Sadar, Barisal
Name: Ms. Farzana Akter Eva
B.A. 10 Years Sponsor & Director
Sponsor Not involved in
other organization
Father's Name: Md. Amir Hossain Age: 33 Years
Personal Address: House # 210, Nadia Villa, South Kalibari Road, Barisal
Name: Md. Amin Ur Rashid
MBA 15 Years Sponsor & Director
Sponsor Shareholder
Not involved in other organization
Father's Name: Md. Harun Ur Rashid Age: 41 Years Personal Address: North Chandkhaty, Jhalokatu
Page: 99
Name: Mst. Shahanaz Akter
B.A. 12 Years Sponsor
Shareholder Sponsor
Shareholder Not involved in
other organization
Father's Name: Late Abdus Sobhan Khan Age: 38 Years Personal Address: Vodrason, Minar Bari, Narayanganj
Name: Akhfa Nur
MA 8 Years Sponsor & Director
Sponsor Not involved in
other organization
Father's Name: Late Md. Matiur Rahman Age: 33 Years
Personal Address: 202/B, Haji Salimuddin Mollah, Middle Baddah, Gulshan, Dhaka
Page: 100
(l) If the present directors are not the sponsors and control of the issuer was acquired within five years immediately preceding the date of filing prospectus details regarding the acquisition of control, date of acquisition, terms of acquisition, consideration paid for such acquisition etc. No other Director except the followings:
Name Acquisition of Control
Date of Acquisition
Terms of Acquisition
Consideration paid for such Acquisition
Mrs. Aysha Siddika 28-Dec-16 17-Apr-14 N/A Cash
Md. Maruful Islam Turan Representative of IBP Agrovet Limited
25-Jan-18 23-Apr-15 N/A Cash
Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
25-Jan-18 23-Apr-15 N/A Cash
Mohammad Shaheenul Islam 26-Aug-18 - - Appoint as an Independent
Director
(m) If the sponsors or directors do not have experience in the proposed line of business, the fact
explaining how the proposed activities would be carried out or managed: All the directors have adequate knowledge to carry out this line of business.
(n) Interest of the key management persons: There is no other interest with the key management persons except Md. Bellal Khan, Managing Director received monthly remuneration/salaries, and all directors received board meeting fees.
(o) All interests and facilities enjoyed by a director, whether pecuniary or non-pecuniary:
Only Md. Bellal Khan, Managing Dircetor receives monthly remuneration. Besides this, all Directors received board meeting fee.
(p) Number of shares held and percentage of shareholding (pre-issue):
Sl. Name of Director Position Number of
Shares Held
%
Pre-IPO
1 Mrs. Aysha Siddika Chairman 4,500,000 9.00%
2 Md. Bellal Khan Managing Director 7,000,000 14.00%
3 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
Director 5,000,000 10.00%
4 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
Director 4,500,000 9.00%
5 Mohammad Shaheenul Islam Independent
Director - 0.00%
Total 21,000,000 42.00%
Page: 101
(q) Change in board of directors during last three years:
Sl. Name of the Directors Date of Joining
Date of retirement Present Status
1 Mrs. Aysha Siddika 28-Dec-16 6th AGM in 2020 Chairman
2 Md. Maruful Islam Turan Representative of IBP Agrovet Limited
25-Jan-18 5th AGM in 2019 Director
3 Jannatul Ferdous Mim Representative of Sabila Sea Foods Limited
25-Jan-18 5th AGM in 2019 Director
4 Mohammad Shaheenul Islam 26-Aug-18 7th AGM in 2021 Independent
None of the Directors are involve with similar business.
Page: 102
CHAPTER (IX): CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) TO WHOM IT MAY CONCERN This is to certify that the Financial Statements of BD Paints Limited furnished for our audit does not have any transaction during the last four years, or any proposed transaction, between the issuer and any of the following persons:
(i) Any director or sponsor or executive officer of the issuer; (ii) Any person holding 5% or more of the outstanding shares of the issuer; (iii) Any related party or connected person of any of the above persons;
Except the transactions described in the following table:
Sd/- Place: Dhaka; FAMES & R Date: October 26, 2019 Chartered Accountants
Page: 103
(b) Any transaction or arrangement entered into by the issuer or its subsidiary or associate or entity owned or significantly influenced by a person who is currently a director or in any way connected with a director of either the issuer company or any of its subsidiaries or holding company or associate concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the issuance of the prospectus; There is no transaction or arrangement entered into by the issuer or its subsidiary or associate or entity owned or significantly influenced by a person who is currently a director or in any way connected with a director of either the issuer company or any of its subsidiaries or holding company or associate concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the issuance of the prospectus except the transaction mentioned in CHAPTER (IX) (a).
(c) Any loans either taken or given from or to any director or any person connected with the
director, clearly specifying details of such loan in the prospectus, and if any loan has been taken from any such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such loan, rate of interest applicable, date of loan taken, date of maturity of loan. and present outstanding of such loan.
No loan was taken or given from or to Directors or any person connected with the Directors of BD Paints Limited.
Page: 104
CHAPTER (X): EXECUTIVE COMPENSATION
(a) The total amount of remuneration or salary or perquisites paid to the top five salaried officers of the issuer in the last accounting year and the name and designation of each such officer:
Sl. Name Designation
Remuneration/salaries (Tk.)
For the year ended 30.06.2019
1 Md. Bellal Khan Managing Director 1,200,000.00
2 Selina Akther Head of R & D 420,000.00
3 Md. Faruk Ahmed Head of Internal Audit &
Compliance 420,000.00
4 S.M. Mamun Ar Rashid Company Secretary 360,000.00
5 Md. Abul Khayer Chief Financial Officer 360,000.00
(b) Aggregate amount of remuneration paid to all directors and officers as a group during the last
accounting year:
Sl. Name Amount (in Taka)
For the year ended 30.06.2019
1 Managing Director’s Remuneration 1,200,000
2 Board Meeting Fee 190,000
3 Salary and Allowances 38,625,370
(c) If any shareholder director received any monthly salary or perquisite or benefit it must be
mentioned along with date of approval in AGM or EGM, terms thereof and payments made during the last accounting year: Only Md. Bellal Khan, Managing Director is receiving remuneration for their services rendered to the Company. The above-mentioned remuneration was approved in the Annual General Meeting (AGM) dated December 31, 2016.
(d) The board meeting attendance fees received by the director including the managing director along with date of approval in AGM or EGM: The board meeting attendance fees received by all the directors including the managing director which was approved in the Annual General Meeting (AGM) dated November 10, 2015.
(e) Any contract with any director or officer providing for the payment of future compensation:
There is no contract between the Company and any of directors or officers regarding any future compensation to be made to them.
(f) If the issuer intends to substantially increase the remuneration paid to its directors and officers
in the current year, appropriate information regarding thereto: The Company has no plan for substantially increasing remuneration to its directors and/or officers except for those that are paid as annual increment to their salaries.
(g) Any other benefit or facility provided to the above persons during the last accounting year:
No other benefit or facility provided to the above persons during the last accounting year.
CHAPTER (XI): OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES BD Paints Limited did not grant any options to its directors, officers and/or any other employees for the purpose of issuing shares.
Page: 105
CHAPTER (XII): TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM
(a) The names of the directors and subscribers to the memorandum, the nature and amount of
anything of value received or to be received by the issuer from the above persons, or by the said persons, directly or indirectly, from the issuer during the last five years along with the description of assets, services or other consideration received or to be received; Benefits from the Company during last five years: The Directors and subscribers to the memorandum of association have received the following benefits directly or indirectly from the issuer during the last four years: i. Remuneration:
Sl. Name Nature of
relationship
30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18
Amount in Taka
1 Md. Bellal Khan Managing Director - 600,000 1,200,000 1,200,000
2 Md. Amir Hossain Ex-Managing Director 600,000 - - -
7 Jannatul Ferdous Mim (Nominee Director Sabila Sea Food Ltd.)
Director - - - 15,000
8 Maruful Islam Turan (Nominee Director IBP Agrobet Ltd.)
Director - - - 15,000
iii. Factory rent:
Sl. Name Nature of
relationship
30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18
Amount in Taka
1 Md. Amir Hossain Ex-Managing Director 192,150 153,720 153,720 -
Page: 106
iv. Allotment of shares against fund and other consideration: a. Fund: The Directors and subscribers to the memorandum of association have received allotment
of shares against share money deposit during the last four years. b. Other consideration:
Mrs. Khaleda Begum Liyly, Ex-Chairman has received allotment of shares against all assets and liabilities of Arafat Paints and Chemical Works.
Name Relationship
with the issuer
Allotment Issue Price (Tk.)
Form of Consideration Date Amount
Mrs. Khaleda Begum Liyly
Ex-Chairman 17-Apr-14 35,000,000 10.00
All assets and liabilities of Arafat paints and Chemical Works through Vendor's Agreement valuing Tk. 36,037,703
c. Land:
Md. Amir Hossain, Md. Bellal Khan and Md. Amin Ur Rashid has received allotment of shares against land.
Name Relationship
with the issuer
Allotment Issue Price (Tk.)
Method used to determine
the price
Form of Consideration (Land)
Date Amount Area (Decimal)
Deed value
Md. Amir Hossain
Ex-Managing Director
23-Apr-15
10,000,000
10.00 Market price
100.00 10,000,000
Md. Bellal Khan
Managing Director
5,000,000 50.00 5,000,000
Md. Amin Ur Rashid
Ex-Director 5,000,000 50.00 5,000,000
v. Assets (Purchase of land):
(b) If any assets were acquired or to be acquired within next two financial years from the aforesaid
persons, the amount paid for such assets and the method used to determine the price shall be mentioned in the prospectus, and if the assets were acquired by the said persons within five years prior to transfer those to the issuer, the acquisition cost thereof paid by them. Directors and Subscribers’ Assets to the Company: i. BD Paints Limited has received the following fund or assets from its Directors and subscribers to the memorandum during the last four years: a. Fund against allotment of shares: BD Paints Limited has received share money deposit against allotment of shares from the Directors and subscribers to the memorandum of association during the last four years.
Transferor Transferee Relations Deed No.
Date of acquisition
Area of land
(decimal
Deed Value (Tk.)
Selling Price (Tk.)
Method used to
determine the price
BD Paints Ltd.
Md. Amir Hossain
Ex-Managing Director
472 April 26,
2017
100.00 19,176,600 19,176,600
At competitive market price
Md. Bellal Khan
Managing Director
50.00 9,588,300 9,588,300
Md. Amin Ur Rashid
Ex-Director
50.00 9,588,300 9,588,300
Total 200.00 38,353,200 38,353,200
Page: 107
b. Other consideration against allotment of shares: BD Paints Limited has acquired all assets and liabilities of Arafat Paints and Chemical Works from Mrs. Khaleda Begum Liyly, Ex-Chairman against allotment of shares.
Name Relationship
with the issuer
Allotment Issue Price
(Tk.) Form of Consideration
Date Amount
Mrs. Khaleda Begum Liyly
Ex-Chairman 17-Apr-
14 35,000,000 10.00
All assets and liabilities of Arafat paints and Chemical
Works through Vendor's Agreement valuing Tk.
36,037,703
c. Land against allotment of shares: BD Paints Limited has acquired land from Md. Amir Hossain, Md. Bellal Khan and Md. Amin Ur Rashid against allotment of shares.
Name Relationship
with the issuer
Allotment Issue Price (Tk.)
Method used to determine
the price
Form of Consideration (Land)
Date Amount Area (Decimal)
Deed value
Md. Amir Hossain
Ex-Managing Director
23-Apr-15
10,000,000
10.00 Market price
100.00 10,000,000
Md. Bellal Khan
Managing Director
5,000,000 50.00 5,000,000
Md. Amin Ur Rashid
Ex-Director 5,000,000 50.00 5,000,000
The assets were acquired by Md. Amir Hossain, Md. Bellal Khan and Md. Amin Ur Rashid within two years prior to transfer those to the issuer, the acquisition cost thereof paid by them given below.
ii. BD Paints Limited has sold land to Md. Amir Hossain, Md. Bellal Khan and Md. Amin Ur Rashid against cash payment.
Transferor Transferee Relations Acquisition Via Deed
No.
Date of acquisition
Area of land
(decimal)
Acquisition cost Deed Value (Tk.)
Md. Amir Hossain BD Paints Limited
Ex-Managing Director
472 April 26,
2017
100.00 19,176,600
Md. Bellal Khan Managing Director 50.00 9,588,300
Md. Amin Ur Rashid Ex-Director 50.00 9,588,300
Total 200.00 38,353,200
Transferor Transferee Relations Deed No.
Date of acquisition
Area of land
(decimal
Deed Value (Tk.)
Selling Price (Tk.)
Method used to
determine the price
BD Paints Ltd.
Md. Amir Hossain
Ex-Managing Director
472 April 26,
2017
100.00 19,176,600 19,176,600
At competitive market price
Md. Bellal Khan
Managing Director
50.00 9,588,300 9,588,300
Md. Amin Ur Rashid
Ex-Director
50.00 9,588,300 9,588,300
Total 200.00 38,353,200 38,353,200
Page: 108
CHAPTER (XIII): OWNERSHIP OF THE COMPANY’S SECURITIES
a) The names, addresses, BO ID Number of all shareholders of the company before IPO, indicating the amount of securities owned and the percentage of the securities represented by such ownership:
88 Rubel Deb Shareholder SEO, NBL, Ho CRM-3,18, Dilkusha, C/A, Dhaka 1602770045524680 1,000 0.002%
89 Md. Mudabbir Hossain
Shareholder 143/A, South Komlapur, Dhaka-1217, 1204120059773530 500 0.001%
Total 50,000,000 100.00%
Page: 113
b) There shall also be a table showing the name and address, age, experience, BO ID Number, TIN number, numbers of shares held including percentage, position held in other companies of all the directors before the public issue:
SL Name of Director, Address, Age & Experience No. of Share % Position held in Other Organization
Pre-IPO Other Organization Position
1
Name: Mrs. Aysha Siddika
4,500,000 9.00% Not involved in other organization -
Chairman
Address: 0729-000 College Road, Barisal Sadar, Barisal.
Age: 41 Years
Experience: 12 Years
BO ID No.: 1201530062008290
TIN No.: 249737346979
2
Name: Md. Bellal Khan
7,000,000 14.00% Not involved in other organization -
Managing Director
Address: Khan Mansion, 617 College Road, Barisal Sadar, Barisal
Age: 33 Years
Experience: 10 Years
BO ID No.: 1201950068059835
TIN No.: 457268541273
3
Name: Md. Maruful Islam Turan Representative of IBP Agrovet Limited
5,000,000 10.00% Not involved in other organization -
c) The average cost of acquisition of equity shares by the directors certified by the auditors:
To Whom It May Concern
After due verification of books and records, we certify that the average cost of acquisition of share by its directors was Tk. 10/- each. The details breakup of acquisition of shares showing average cost per shares is given below:
Date Allotment/ Transfer
Mrs. Aysha Siddika
Md. Bellal Khan
Md. Maruful Islam Turan
Representative of IBP Agrovet Limited
Jannatul Ferdous Mim
Representative of Sabila Sea Foods Limited
Mohammad Shaheenul
Islam Consideration
Face value
of Share (Tk.)
Chairman Managing Director Director Director Independent
Sd/- Place: Dhaka FAMES & R Dated: October 26, 2019 Chartered Accountants
Page: 116
d) A detail description of capital built up in respect of shareholding (name-wise) of the issuer’s sponsors or directors. In this connection, a statement to be included: -
Mrs. Aysha Siddika Chairman
Date of Allotment/ Transfer of
fully paid- up shares
Consideration Nature of
issue
No. of Equity shares
Face value
Issue Price/Acquisition
Price/Transfer Prices
Cumulative no. of Equity
shares
% Pre- issue
paid up capital
% Post issue paid up capital
Sources of fund
28-Dec-15 Cash Ordinary Share
3,500,000 10.00 10.00 3,500,000 9.00% 6.43%
Own Source 24-May-18 Cash 1,000,000 10.00 10.00 4,500,000
e) Detail of shares issued by the company at a price lower than the issue price: All the shares are issued by the Company at face value of Tk. 10.00 before this issue.
f) History of significant (5% or more) changes in ownership of securities from inception:
Total 4,500,000 7,000,000 3,250,000 3,668,000 4,500,000 5,000,000
Page: 121
CHAPTER (XIV): CORPORATE GOVERNANCE
a) Management disclosure regarding compliance with the requirements of Corporate Governance Guidelines of the Bangladesh Securities and Exchange Commission (BSEC);
The Company declares that it has complied with the requirements of the applicable regulations of Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) and accordingly constitute several committees under the board for good governance. A certificate of compliance from competent authority has been incorporated accordingly. Sd/- Md. Bellal Khan Managing Director
b) A compliance report of Corporate Governance requirements certified by competent authority;
Report to the Shareholders of BD Paints Limited on compliance on the Corporate Governance Code
We have examined the compliance status to the Corporate Governance Code by BD Paints Limited for the year ended on 30 June 2019. This Code relates to the Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated 3 June 2018 of the Bangladesh Securities and Exchange Commission. Such compliance with the Corporate Governance Code is the responsibility of the Company. Our Examination was limited to the procedures and implementation thereof as adopted by the Management in ensuring compliance to the conditions of the Corporate Governance Code. This is a scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance Code as well as the provisions of relevant Bangladesh Secretarial Standards (BSS) as adopted by Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Corporate Governance Code. We state that we have obtained all the information and explanations, which we have required, and after due scrutiny and verification thereof, we report that, in our opinion:
(a) The Company has complied with the conditions of the Corporate Governance Code as
stipulated in the above-mentioned Corporate Governance Code issued by the Commission; (b) The company has complied with the provisions of the relevant Bangladesh Secretarial
Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) as required by this Code;
(c) Proper books and records have been kept by the company as required under the
Companies Act, 1994, the securities laws and other relevant laws; (d) The governance of the company is highly satisfactory.
Place: Dhaka Dated: 19 December, 2019
Sd/-
Md. Shafiqul Alam, FCS, FCA Partner
Ahmed Zaker & Co. CHARTERED ACCOUNTANTS
Page: 122
COMPLIANCE REPORT ON CORPORATE GOVERNANCE CODE
Status of compliance with the conditions imposed by the Commission’s Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated 3 June 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969:
Condition No. Title
Compliance Status (Put √ in the
appropriate column) Remarks (if any)
Complied Not
complied
1. BOARD OF DIRECTORS:
1(1) Size of theBoard of Directors:
The total number of members of a company’s Board of Directors (hereinafter referred to as “Board”) shall not be less than 5 (five) and more than 20 (twenty).
√ - The boards of Directors are
comprised of 5 Directors.
1(2) INDEPENDENT DIRECTORS: All companies shall have effective representation of independent directors on their Boards, so that the Board, as a group, includes core competencies considered relevant in the context of each company; for this purpose, the companies shall comply with the following:-
-
1(2)(a) At least one-fifth (1/5) of the total number of directors in the company’s Board shall be independent directors; any fraction shall be considered to the next integer or whole number for calculating number of independent director(s);
√ -
The number of independent
director of the board of the
company is 1(one)
1(2)(b) For the purpose of this clause “independent director” means a director -
1(2)(b)(i) Who either does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up shares of the company;
√ - -
1(2)(b)(ii) Who is not a sponsor of the company or is not connected with the company’s any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family
√ - -
Page: 123
relationship and his or her family members also shall not hold above mentioned shares in the company: Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members;
1(2)(b)(iii) Who has not been an executive of the company in immediately preceding 2 (two) financial years;
√ - -
1(2)(b)(iv) who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary or associated companies;
√ - -
1(2)(b)(v) who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange;
√ - -
1(2)(b)(vi) who is not a shareholder, director excepting independent director or officer of any member or TREC holder of stock exchange or an intermediary of the capital market;
√ - -
1(2)(b)(vii) who is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code;
√ - -
1(2)(b)(viii) who is not independent director in more than 5 (five) listed companies;
√ - -
1(2)(b)(ix) who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan or any advance to a bank or a Non-Bank Financial Institution (NBFI); and
√ - -
1(2)(b)(x) who has not been convicted for a criminal offence involving moral turpitude;
√ - -
1(2)(c) The independent director(s) shall be appointed by the Board and approved by the shareholders in the Annual General Meeting (AGM);
√ - -
Page: 124
1(2)(d) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days; and
√ - -
1(2)(e) The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) tenure only: Provided that a former independent director may be considered for reappointment for another tenure after a time gap of one tenure, i.e., three years from his or her completion of consecutive two tenures [i.e. six years]: Provided further that the independent director shall not be subject to retirement by rotation as per the ক োম্পোনী আইন, ১৯৯৪ (১৯৯৪ সননর ১৮নং আইন) (Companies Act, 1994).
Explanation: For the purpose of counting tenure of term of independent Director, any partial term of tenure shall be deemed to be a full tenure.
√ - -
1(3) Qualification of Independent Director. -
1(3)(a) Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial laws, regulatory requirements and corporate laws and can make meaningful contribution to the business;
√ - -
1(3)(b) Independent director shall have following qualifications:
1(3)(b)(i) Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of commerce or business association; or
- - N/A
1(3)(b)(ii) Corporate Leader who is or was a top level executive not lower than Chief Executive Officer or Managing Director or Deputy Managing Director or Chief Financial Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal
√ - -
Page: 125
Service or a candidate with equivalent position of an unlisted company having minimum paid-up capital of Tk. 100.00 million or of a listed company; or Explanation: Top level executive includes Managing Director (MD) or Chief Executive Officer (CEO), Additional or Deputy Managing Director (AMD or DMD), Chief Operating Officer (COO), Chief Financial Officer (CFO), Company Secretary (CS), Head of Internal Audit and Compliance (HIAC), Head of Administration and Human Resources or equivalent position and same level or ranked or salaried officials of the company.
1(3)(b)(iii) Former official of government or statutory or autonomous or regulatory body in the position not below 5th Grade of the national pay scale, who has at least educational background of bachelor degree in economics or commerce or business or Law; or
√ - N/A
1(3)(b)(iv) University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or
√ - N/A
1(3)(b)(v) Professional who is or was an advocate practicing at least in the High Court Division of Bangladesh Supreme Court or a Chartered Accountant or Cost and Management Accountant or Chartered Financial Analyst or Chartered Certified Accountant or Certified Public Accountant or Chartered Management Accountant or Chartered Secretary or equivalent qualification;
√ - N/A
1(3)(c) The independent director shall have at least 10 (ten) years of experiences in any field mentioned in clause (b);
√
-
-
1(3)(d) In special cases, the above qualifications or experiences may be relaxed subject to prior approval of the Commission.
No such deviation
occurred
1(4) Duality of Chairperson of the Board of Directors and Managing Director or
Chief Executive Officer. -
1(4)(a) The positions of the Chairperson of the Board and the Managing Director (MD) and/or Chief Executive Officer (CEO) of the
√ - -
Page: 126
company shall be filled by different individuals;
1(4)(b) The Managing Director (MD) and/or Chief Executive Officer (CEO) of a listed company shall not hold the same position in another listed company;
√ - -
1(4)(c) The Chairperson of the Board shall be elected from among the non-executive directors of the company;
√ - -
1(4)(d) The Board shall clearly define respective roles and responsibilities of the Chairperson and the Managing Director and/or Chief Executive Officer;
√ - -
1(4)(e) In the absence of the Chairperson of the Board, the remaining members may elect one of themselves from non-executive directors as Chairperson for that particular Board’s meeting; the reason of absence of the regular Chairperson shall be duly recorded in the minutes.
√ - -
1(5) The Directors’ Report to Shareholders
1(5) (a) The Board of the company shall include the following additional statements or disclosures in the Directors’ Report prepared under section 184 of the Companies Act, 1994 (Act No.
XVIII of 1994):-
1(5)(i) An industry outlook and possible future developments in the industry;
√ - -
1(5)(ii) The segment-wise or product-wise performance;
√ - -
1(5)(iii) Risks and concerns including internal and external risk factors, threat to sustainability and negative impact on environment, if any;
√ - -
1(5)(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin, where applicable;
√ - N/A
1(5)(v) A discussion on continuity of any extraordinary activities and their implications (gain or loss);
- No such event
arose
1(5)(vi) A detailed discussion on related party transactions along with a statement showing amount, nature of related party, nature of transactions and basis of
√ - -
Page: 127
transactions of all related party transactions;
1(5)(vii) A statement of utilization of proceeds raised through public issues, rights issues and/or any other instruments;
√ - N/A
1(5)(viii) An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Share Offer, Direct Listing, etc.;
√
- N/A
1(5)(ix) An explanation on any significant variance that occurs between Quarterly Financial performances and Annual Financial Statements;
√ - N/A
1(5)(x) A statement of remuneration paid to the directors including independent directors;
√ - N/A
1(5)(xi) A statement that the financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity;
√ - -
1(5)(xii) A statement that proper books of account of the issuer company have been maintained;
√ - -
1(5)(xiii) A statement that appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment;
√ - -
1(5)(xiv) A statement that International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there from has been adequately disclosed;
√ - -
1(5)(xv) A statement that the system of internal control is sound in design and has been effectively implemented and monitored;
√ - -
1(5)(xvi) A statement that minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress;
√ - -
Page: 128
1(5)(xvii) A statement that there is no significant doubt upon the issuer company’s ability to continue as a going concern, if the issuer company is not considered to be a going concern, the fact along with reasons there of shall be disclosed;
√ - -
1(5)(xviii) An explanation that significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof shall be explained;
√ -
1(5)(xix) A statement where key operating and financial data of at least preceding 5 (five) years shall be summarized;
√ - -
1(5)(xx) An explanation on the reasons if the issuer company has not declared dividend (cash or stock) for the year;
- N/A
1(5)(xxi) Board’s statement to the effect that no bonus share or stock dividend has been or shall be declared as interim dividend;
- N/A
1(5)(xxii) The total number of Board meetings held during the year and attendance by each director;
√ - -
1(5)(xxiii) A report on the pattern of shareholding disclosing the aggregate number of shares (along with name-wise details
where stated below) held by: --
1(5)(xxiii)(a) Parent or Subsidiary or Associated Companies and other related parties (name-wise details);
√ - N/A
1(5)(xxiii)(b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and Compliance and their spouses and minor children (name-wise details);
√ - -
1(5)(xxiii)(c) Executives; and √ - -
1(5)(xxiii)(d) Shareholders holding ten percent (10%) or more voting interest in the company (name-wise details); Explanation: For the purpose of these clause, the expression “Executive” means top 5 (Five) salaried employees of the company, other than the directors, Chief Executive Officer, Company Secretary,
√ - -
Page: 129
Chief Financial Officer and Head of Internal Audit and Compliance.
1(5)(xxiv) In case of the appointment or reappointment of a director, a disclosure on the following information to the shareholders: -
1(5)(xxiv)(a) a brief resume of the director; √ - -
1(5)(xxiv)(b) nature of his or her expertise in specific functional areas; and
√ - -
1(5)(xxiv)(c) names of companies in which the person also holds the directorship and the membership of committees of the Board;
√ - -
1(5)(xxv) A Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s position and operations along with a brief discussion of changes in the financial statements, among others, focusing on
1(5)(xxv)(a) accounting policies and estimation for preparation of financial statements;
√ -
1(5)(xxv)(b) changes in accounting policies and estimation, if any, clearly describing the effect on financial performance or results and financial position as well as cash flows in absolute figure for such changes;
√ -
Separate WPPF and Welfare
Fund created in 2017-2018 which
is under recognition
1(5)(xxv)(c) comparative analysis (including effects of inflation) of financial performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof;
√ -
Separate WPPF and Welfare
Fund created in 2017-2018 which
is under recognition
1(5)(xxv)(d) compare such financial performance or results and financial position as well as cash flows with the peer industry scenario;
√ - -
1(5)(xxv)(e) briefly explain the financial and economic scenario of the country and the globe;
√ - -
1(5)(xxv)(f) risks and concerns issues related to the financial statements, explaining such risk and concerns mitigation plan of the company; and
√ - -
Page: 130
1(5)(xxv)(g) future plan or projection or forecast for company’s operation, performance and financial position, with justification thereof, i.e., actual position shall be explained to the shareholders in the next AGM;
√
-
-
1(5)(xxvi) Declaration or certification by the CEO and the CFO to the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; and
√ - -
1(5)(xxvii) The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B and Annexure-C.
√ - -
1(6) Meetings of the Board of Directors The company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Code.
√ - -
1(7) Code of Conduct for the Chairperson, other Board members and Chief Executive Officer
1(7)(a) The Board shall lay down a code of conduct, based on the recommendation of the Nomination and Remuneration Committee (NRC) at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company;
√
1(7)(b) The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment,
√
Page: 131
employees, customers and suppliers; and independency.
2. Governance of Board of Directors of Subsidiary Company. – 2(a) Provisions relating to the
composition of the Board of the holding company shall be made applicable to the composition of the Board of the subsidiary company;
- - The company has
no subsidiary
2(b) At least 1 (one) independent director on the Board of the holding company shall be a director on the Board of the subsidiary company;
- - The company has
no subsidiary
2(c) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company;
- - The company has
no subsidiary
2(d) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also;
- - The company has
no subsidiary
2(e) The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company.
- - The company has no subsidiary
3. Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company
Secretary (CS). -
3(1) Appointment
3(1)(a) The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO), a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC);
√ - -
3(1)(b) The positions of the Managing Director (MD) or Chief Executive Officer (CEO), Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit and Compliance (HIAC) shall be filled by different individuals;
√ - -
3(1)(c) The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive position in any other company at the same time;
√ - -
Page: 132
3(1)(d) The Board shall clearly define respective roles, responsibilities and duties of the CFO, the HIAC and the CS;
√ - -
3(1)(e)
The MD or CEO, CS, CFO and HIAC shall not be removed from their position without approval of the Board as well as immediate dissemination to the Commission and stock exchange(s).
√ -
3(2) Requirement to attend Board of Directors’ Meetings The MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board: Provided that the CS, CFO and/or the HIAC shall not attend such part of a meeting of the Board which involves consideration of an agenda item relating to their personal matters.
√ - -
3(3) Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
3(3)(a) The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and that to the best of their knowledge and belief:
√ -
3(3)(a)(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and
√ - -
3(3)(a)(ii) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws;
√ - -
3(3)(b) The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board or its members.
√ - -
3(3)(c) The certification of the MD or CEO and CFO shall be disclosed in the Annual Report
√ - -
Page: 133
4. Board of Directors’ Committee. -
4(i) For ensuring good governance in the company, the Board shall have at least following sub-committees:
4(ii) Audit Committee; and √ - -
4(iii) Nomination and Remuneration Committee.
√ - -
5. Audit Committee. – 5(1) Responsibility to the Board of Directors.
5(1)(a) The company shall have an Audit Committee as a sub-committee of the Board;
√ - -
5(1)(b) The Audit Committee shall assist the Board in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business;
√ - -
5(1)(c) The Audit Committee shall be responsible to the Board; the duties of the Audit Committee shall be clearly set forth in writing.
√ - -
5(2) Constitution of the Audit Committee
5(2)(a) The Audit Committee shall be composed of at least 3 (three) members;
√ -
5(2)(b) The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company excepting Chairperson of the Board and shall include at least 1 (one) independent director;
√ -
-
5(2)(c) All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management background and 10 (ten) years of such experience; Explanation: The term “financially literate” means the ability to read and understand the financial statements like statement of financial position, statement of comprehensive income, statement of changes in equity and cash flows statement and a person will be considered to have accounting or related financial management expertise if he or she possesses
√ - -
Page: 134
professional qualification or Accounting or Finance graduate with at least 10 (Ten) years of corporate management or professional experiences.
5(2)(d) When the term of service of any Committee member expires or there is any circumstance causing any Committee member to be unable to hold office before expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee;
√ - -
5(2)(e) The company secretary shall act as the secretary of the Committee;
√ - -
5(2)(f) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director.
√ -
-
5(3) Chairperson of the Audit Committee
5(3)(a) The Board shall select 1 (one) member of the Audit Committee to be Chairperson of the Audit Committee, who shall be an independent director;
√ -
-
5(3)(b) In the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes.
-
No such event arose
5(3)(c) Chairperson of the Audit Committee shall remain present in the Annual General Meeting (AGM): Provided that in absence of Chairperson of the Audit Committee, any other member
√ - -
Page: 135
from the Audit Committee shall be selected to be present in the annual general meeting (AGM) and reason for absence of the Chairperson of the Audit Committee shall be recorded in the minutes of the AGM.
5(4) Meeting of the Audit Committee
5(4)(a) The Audit Committee shall conduct at least its four meetings in a financial year: Provided that any emergency meeting in addition to regular meeting may be convened at the request of any one of the members of the Committee;
√ -
-
5(4)(b) The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two-third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must.
√ -
-
5(5) Role of Audit Committee
The Audit Committee shall: - 5(5)(a) Oversee the financial reporting
process; √ -
-
5(5)(b) monitor choice of accounting policies and principles; √
-
-
5(5)(c) monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report;
√
-
-
5(5)(d) Oversee hiring and performance of external auditors;
√ -
-
5(5)(e) Hold meeting with the external or statutory auditors for review of the annual financial statements before submission to the Board for approval or adoption;
√
-
-
5(5)(f) Review along with the management, the annual financial statements before submission to the Board for approval;
√
-
-
5(5)(g)
Review along with the management, the quarterly and half yearly financial statements before submission to the Board for approval;
√
-
-
Page: 136
5(5)(h) Review the adequacy of internal audit function; √
- -
5(5)(i) Review the Management’s Discussion and Analysis before disclosing in the Annual Report;
√ - -
5(5)(j) Review statement of all related party transactions submitted by the management;
√ - -
5(5)(k) Review Management Letters or Letter of Internal Control weakness issued by statutory auditors;
√
- -
5(5)(l)
Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors; and
√ -
-
5(5)(m) Oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the Commission: Provided that the management shall disclose to the Audit Committee about the uses or applications of the proceeded by major category (capital expenditure, sales and marketing expenses, working capital etc.) on a quarterly declaration of financial results: Provided further that on an annual basis, the company shall prepare a statement of the proceeds utilized for the purposes other than those stated in the offer document or prospectus for publication in the Annual Report along with the comments of the Audit Committee.
√
- N/A
5(6) Reporting of the Audit Committee
5(6)(a) Reporting to the Board of Directors
5(6)(a)(i) The Audit Committee shall report on its activities to the Board.
√ -
5(6)(a)(ii) The Audit Committee shall immediately report to the Board on the following findings,
if any: -
Page: 137
5(6)(a)(ii)(a) Report on conflicts of interests;
√ -
There was no reportable case
of conflict of interest in the
year
5(6)(a)(ii)(b) Suspected or presumed fraud or irregularity or material defect identified in the internal audit and compliance process or in the financial statements;
√ - There was no such case in the year.
5(6)(a)(ii)(c)
suspected infringement of laws, regulatory compliances including securities related laws, rules and regulations; and
√ -
There was no such case in the year.
5(6)(a)(ii)(d) any other matter which the Audit Committee deems necessary shall be disclosed to the Board immediately;
√ - There was no such case in the year.
5(6)(b) Reporting to the Authorities:
If the Audit Committee has reported to the Board about anything which has material impact on the financial condition and results of operation and has discussed with the Board and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board for three times or completion of a period of 6 (six) months from the date of first reporting to the Board, whichever is earlier.
- - No such event
arose
5(7) Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, including any report made to the Board under condition No. 5(6)(a)(ii) above during the year, shall be signed by the Chairperson of the Audit Committee and disclosed in the annual report of the issuer company.
√ - -
6. Nomination and Remuneration Committee (NRC). -
6(1) Responsibility to the Board of Directors
6(1)(a) The company shall have a Nomination and Remuneration Committee (NRC) as a sub-committee of the Board;
√
-
-
Page: 138
6(1)(b) The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top-level executive as well as a policy for formal process of considering remuneration of directors, top level executive;
√ -
-
6(1)(c) The Terms of Reference (TOR) of the NRC shall be clearly set forth in writing covering the areas stated at the condition No. 6(5)(b).
√ - -
6(2) Constitution of the NRC
6(2)(a) The Committee shall comprise of at least three members including an independent director;
√
-
-
6(2)(b) All members of the Committee shall be non-executive directors;
√ -
- -
6(2)(c) Members of the Committee shall be nominated and appointed by the Board;
√ -
-
6(2)(d) The Board shall have authority to remove and appoint any member of the Committee;
√ -
-
6(2)(e) In case of death, resignation, disqualification, or removal of any member of the Committee or in any other cases of vacancies, the board shall fill the vacancy within 180 (one hundred eighty) days of occurring such vacancy in the Committee;
√ -
No such event
arose
6(2)(f) The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee;
-
No such event
arose
6(2)(g) The company secretary shall act as the secretary of the Committee;
√
6(2)(h) The quorum of the NRC meeting shall not constitute without attendance of at least an independent director;
√
Page: 139
6(2)(i) No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director’s fees or honorarium from the company.
√ -
-
6(3) Chairperson of the NRC
6(3)(a) The Board shall select 1 (one) member of the NRC to be Chairperson of the Committee, who shall be an independent director;
√ - -
6(3)(b) In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly recorded in the minutes;
- No such event
arose
6(3)(c) The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders: Provided that in absence of Chairperson of the NRC, any other member from the NRC shall be selected to be present in the annual general meeting (AGM) for answering the shareholder’s queries and reason for absence of the Chairperson of the NRC shall be recorded in the minutes of the AGM.
√ - -
6(4) Meeting of the NRC
6(4)(a) The NRC shall conduct at least one meeting in a financial year;
√ - -
6(4)(b) The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC;
√ -
-
6(4)(c) The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2)(h);
√
-
-
6(4)(d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC
√
- -
Page: 140
6(5) Role of the NRC
6(5)(a) NRC shall be independent and responsible or accountable to the Board and to the shareholders;
√ - -
6(5)(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board:
√ - -
6(5)(b)(i) Formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following:
√ - -
6(5)(b)(i)(a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully;
√ - -
6(5)(b)(i)(b) the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
√ - -
6(5)(b)(i)(c) remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;
√ - -
6(5)(b)(ii) devising a policy on Board’s diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality;
√ - -
6(5)(b)(iii) identifying persons who are qualified to become directors and who may be appointed in top level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board;
√ - -
6(5)(b)(iv) formulating the criteria for evaluation of performance of independent directors and the Board;
√ - -
6(5)(b)(v) identifying the company’s needs for employees at different levels and determine their selection, transfer or
√ - -
Page: 141
replacement and promotion criteria; and
6(5)(b)(vi) developing, recommending and reviewing annually the company’s human resources and training policies;
√ - -
6(5)(c) The company shall disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.
√ - N/A
7. External or Statutory Auditors.
7(1) The issuer company shall not engage its external or statutory auditors to perform the following services of the company, namely:-
7(1)(i) appraisal or valuation services or fairness opinions;
√ - -
7(1)(ii) financial information systems design and implementation;
√ - -
7(1)(iii) book-keeping or other services related to the accounting records or financial statements;
√ - -
7(1)(iv) broker-dealer services; √ - -
7(1)(v) actuarial services; √ - -
7(1)(vi) internal audit services or special audit services;
√ - -
7(1)(vii) any service that the Audit Committee determines; √ - -
7(1)(viii) audit or certification services on compliance of corporate governance as required under condition No. 9(1); and
√ - -
7(1)(ix) any other service that creates conflict of interest. -
No such event arose
7(2) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company; his or her family members also shall not hold any shares in the said company: Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members.
√ - -
7(3) Representative of external or statutory auditors shall remain present in the Shareholders’ Meeting (Annual General Meeting or Extraordinary
√ - -
Page: 142
General Meeting) to answer the queries of the shareholders.
8. Maintaining a website by the Company. -
8(1) The company shall have an official website linked with the website of the stock exchange.
√ - The Company has
website to be linked after listing
8(2) The company shall keep the website functional from the
date of listing. √ -
The Company has website to be linked after listing
8(3) The company shall make available the detailed disclosures on its website as required under the listing regulations of the concerned stock exchange(s).
√ -
The Company has website to be linked after listing
9. Reporting and Compliance of Corporate Governance. -
9(1) The company shall obtain a certificate from a practicing Professional Accountant or Secretary (Chartered Accountant or Cost and Management Accountant or Chartered Secretary) other than its statutory auditors or audit firm on yearly basis regarding compliance of conditions of Corporate Governance Code of the Commission and shall such certificate shall be disclosed in the Annual Report.
√ - -
9(2) The professional who will provide the certificate on compliance of this Corporate Governance Code shall be appointed by the shareholders in the annual general meeting.
√
-
-
9(3) The directors of the company shall state, in accordance with the Annexure-C attached, in the directors’ report whether the company has complied with these conditions or not.
√
-
-
Page: 143
c) Details relating to the issuer's audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committees operate. In accordance with the currently accepted Best Practice and Corporate Governance Guidelines adopted by Bangladesh Securities and Exchange Commission (BSEC), the Board appointed Audit Committee and remuneration committee comprises of the following: Audit Committee Members Name
Sl. No. Name & Position
1 Mohammad Shaheenul Islam (Independent Director), Chairman of the committee;
2 Jannatul Ferdous Mim, Director (Representative of Sabila Sea Foods Limited)
3 Md. Maruful Islam Turan, Director (Representative of IBP Agrovet Limited)
* The Company Secretary shall act as the secretary of the Committee.
Nomination and Remuneration Committee Members Name
Sl. No. Name & Position
1 Mohammad Shaheenul Islam (Independent Director), Chairman of the committee;
2 Mrs. Aysha Siddika, Chairman;
3 Jannatul Ferdous Mim, Director (Representative of Sabila Sea Foods Limited)
* The Company Secretary shall act as the secretary of the Committee. The terms of reference of the audit committee has been agreed upon as follows:
▪ To review all internal and external audit report.
▪ To recommend the statutory annual audited financial statements to the Board of Directors for approval.
▪ To review the finding of the internal and external auditors.
▪ To review and approve the Annual “Audit Plan” of the Internal Audit Department.
▪ To monitor the implementation of the recommendations of the Internal and External auditors.
▪ To review the performance of the external auditors and make recommendations to the Board regarding their appointment and fees.
▪ To review the quarterly, half yearly and annual financial statements before submission to the Board, focusing particularly on.
▪ To review the company’s statement on internal control systems prior to endorsement by the Board.
▪ The company secretary shall be the secretary of the audit committee. The terms of reference of the remuneration committee has been agreed upon as follows:
▪ To assist the Board in developing and administering a fair and transparent procedure for setting policy on the remuneration of directors and senior management of the Company
▪ Determining the remuneration packages
▪ Review the Annual Confidential Report (ACR) of senior management of the company
▪ Review and oversee the Company's overall human resources strategy.
Page: 144
CHAPTER (XV): VALUATION REPORT OF SECURITIES PREPARED BY THE ISSUE MANAGERS The valuation report of securities offered is prepared and justified by the issue managers (Imperial Capital Limited, EBL Investments Limited & CAPM Advisory Limited) on the basis of the financial and all other information pertinent to the Issue. Qualitative and Quantitative factors for Valuation: Qualitative Justification:
1. Strong Management: The Company has good management to run the company efficiently. 2. Product line variety: The Company’s product line has variety. The Company sells different line
of product 3. Modern Machineries: The Company has been using modern machineries that smooth its
operation. 4. Technology: The Company has latest tools and technologies to support production. 5. Dedicated Workforce: The Company has dedicated human resources.
Quantitative Justification: The issue price at Tk. 10.00 each is justified as details below:
Particulars Amount (in Tk.)
Method 1: Net Asset Value (NAV) per share/Equity based valuation 14.35
Method 2: Historical Earnings based valuation 12.14
Method 3: Average market price of similar stock-based valuation 1,517.67
Method 1: Share price on Net Asset Value (NAV)/Equity based valuation
Sl. No. Particulars Amount (in Tk.)
a) Share Capital 500,000,000
b) Retained Earnings 217,492,099
Total Shareholders' Equity (A) 717,492,099
Number of Share Outstanding as on June 30, 2019 (B) 50,000,000
Net Asset Value per share (without revaluation reserve) as per Audit Report as on June 30, 2019 (A/B)
14.35
Method 2: Historical Earnings based value per share Earnings based Value per share based on Overall Market P/E
Year No. of Share Net Profit after Tax Weight (%) Weighted Average Net Profit after Tax
30-Jun-15 22,000,000 28,841,416 0.1325 3,822,356
30-Jun-16 22,000,000 30,804,747 0.1325 4,082,557
30-Jun-17 22,000,000 53,479,268 0.1325 7,087,614
30-Jun-18 50,000,000 53,038,350 0.3012 15,975,406
30-Jun-19 50,000,000 51,328,318 0.3012 15,460,337
Total 166,000,000 217,492,098 1.0000 46,428,270
Weighted Average Net Profit after Tax 46,428,270
No. of shares outstanding before IPO 50,000,000
Diluted EPS based on weighted Average of Net Profit after Tax 0.9286
Market PE (Considering Lesser P/E of 13.07 & 24.89 is 13.07) 13.07
Earnings based Value per share 12.14
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Calculation of Average Price Earnings of Market & Miscellaneous Sector:
Particulars Aug-19 Sep-19
Oct-19
Average
Overall Market P/E 13.59 13.36 12.26 13.07
Miscellaneous Sector P/E 26.21 25.06 23.39 24.89
Considering Lesser P/E of 13.07 & 24.89 is 13.07 Source: DSE Monthly Review.
Method 3: Average market price of similar stock based valuation
Month end close price
Sl. Date Berger Paints Bangladesh
Limited
1 27-Dec-18 1,344.10
2 31-Jan-19 1,471.70
3 27-Feb-19 1,834.70
4 31-Mar-19 1,797.70
5 30-Apr-19 1,451.80
6 30-May-19 1,428.70
7 30-Jun-19 1,447.90
8 31-Jul-19 1,451.50
9 29-Aug-19 1,573.70
10 30-Sep-19 1,530.30
11 31-Oct-19 1,469.10
12 28-Nov-19 1,410.80
Average Price 1,517.67
Source: DSE Monthly Review.
Average market price of similar stock based valuation (Assumption) 1. The average month end close price of the peer Company from December 2018 to November 2019 is considered.
Rationale for choosing Berger Paints Bangladesh Limited: Only Berger Paints Bangladesh Limited produces paints that’s why BDPL choose this company. The management of the Company in consultation with the Issue Managers has set the issue price at Tk. 10.00 each at par value. Sd/- Md. Salauddin Sikder FCMA CEO & Managing Director Imperial Capital Limited
Sd/- Tahid Ahmed Chowdhury, FCCA
Managing Director EBL Investments Limited
Sd/- Tania Sharmin
Managing Director & CEO CAPM Advisory Limited
CHAPTER (XVI): DEBT SECURITIES The Company has not issued or is planning to issue any debt security within six months.
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CHAPTER (XVII): PARTIES INVOLVED AND THEIR RESPONSIBILITIES
The Issue Managers will act as the managers to the issue for the public issue as described in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 as amended upto September 3, 2019.
(b) Underwriters
(1) NBL Capital and Equity Management Limited; (2) BLI Capital Limited & (3) Asian Tiger Capital Partners Investments
Limited.
The Underwriters will act as the underwriters to the public issue as described in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 as amended upto September 3, 2019.
To express an opinion on these financial statements based on their audit. Auditor will conduct the audit in accordance with Bangladesh Standards on Auditing (BSA).
(d) Cost Auditor No N/A
(e) Valuer No N/A
(f) Credit Rating Company No N/A
Page: 147
CHAPTER (XVIII): MATERIAL CONTRACTS (a) Major agreements entered into by the Issuer:
The following are material agreements have been entered into by the Company:
1. Underwriting Agreements between the Company and the Underwriters; i. NBL Capital and Equity Management Limited; ii. BLI Capital Limited & iii. Asian Tiger Capital Partners Investments Limited.
2. Issue Management Agreement between the Company and; i. Imperial Capital Limited; ii. EBL Investments Limited & iii. CAPM Advisory Limited.
(b) Material parts of the agreements:
Underwriting agreements with:
i. NBL Capital and Equity Management Limited; ii. BLI Capital Limited & iii. Asian Tiger Capital Partners Investments Limited.
Material parts of the agreements
Signing Date: With NBL Capital and Equity Management Limited; BLI Capital Limited & Asian Tiger Capital Partners Investments Limited: September 04, 2018
Tenure: This Agreement shall be valid until completion of subscription of shares and unless this Agreement is extended or earlier terminated in accordance with the terms of this Agreement.
Principal Terms
and Condition:
(i) The IPO shall stand cancelled if at least 65% of the IPO is not subscribed. (ii) In case of under subscription, underwriters shall take the under-subscribed
securities up to 35% of the IPO. (iii) Notwithstanding anything contained in the agreement in case of inconsistency
between the provision of the agreement and the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the Public Issue Rules shall prevail.
(iv) Prior to publication of the prospectus, the Company shall have obtained consent
from the Bangladesh Securities and Exchange Commission permitting the issue as described in Article 2.01 and providing for payment of underwriting commission 0.40% on the amount underwritten.
(v) The Issuer shall within 10 (Ten) days of the closure of subscription call upon the
underwriter in writing with a copy of said writing to the Bangladesh Securities and Exchange Commission, to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed shares within 15 (Fifteen) days of the date of said notice and the said amount shall have to be credited into shares subscription account within the said period.
(vi) In any case within 7 (seven) days after the expiry of the aforesaid 15 (fifteen)
days, the Company shall send proof of subscription and payment by the Underwriters to the Commission.
Page: 148
In the case of failure by the underwriter to pay for the shares within the stipulated time, the Company/Issuer will be under no obligation to pay any underwriting commission under this Agreement.
Issue Management Agreements with: i. Imperial Capital Limited; ii. EBL Investments Limited & iii. CAPM Advisory Limited.
Material parts of the agreements
Signing Date: With Imperial Capital Limited, EBL Investments Limited & CAPM Advisory Limited: July 04, 2018
Tenure: This Agreement shall be valid until completion of subscription of shares and unless this Agreement is extended or earlier terminated in accordance with the terms of this Agreement
Principal Terms and Condition:
(i) According to Article 2.2; the scope of the services to be rendered by the ISSUE MANAGER to the ISSUER under this agreement shall cover Regulatory Compliance, Underwriting Co-operation and after consent tasks.
(ii) According to Article 2.3; The ISSUE MANAGER takes the responsibility to
take such steps as are necessary to ensure completion of allotment and dispatch of letters of allotment and refund warrants to the applicants according to the basis of allotment approved by the Bangladesh Securities and Exchange Commission. The ISSUER undertakes to bear all expenses relevant to share application processing, allotment, and dispatch of letters of allotment and refund warrant. The ISSUER shall also bear all expenses related to printing and issuance of share certificate and connected govt. stamps and hologram expenses.
(iii) According to Article 3.1; without prejudice ISSUER hereby declares that it
agrees to comply with all statutory formalities under Companies Act, Guidelines issued by Bangladesh Securities and Exchange Commission and other relevant status to enable it to make the issue.
(iv) According to Article 6.1; The ISSUE MANAGER hereby undertakes to keep
in strict compliance all information (whether written or oral) proprietary documents and data secured in connection with or as a result of this Agreement (Confidential Information) and shall limit the availability of such information to employees, who have a need to see and use it for the express and limited purpose stated in this Agreement.
(v) According to Article 8.1; The Issuer and ISSUE MANAGER shall ensure
compliance of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, The Listing Regulations of Stock Exchanges, The Companies Act, 1994, the Securities and Exchange (Amendment) Act, 2012 and other relevant rules, regulations, practices, directives, guidelines etc.
(c) Fees payable to different parties
Sl. Name of the Parties Role Fees Payable
1
NBL Capital and Equity Management Limited
Underwriters 0.50% on 35% of the Total IPO amount (i.e. Tk. 350,000.00)
BLI Capital Limited
Asian Tiger Capital Partners Investments Limited
2
Imperial Capital Limited Issue
Manager 2.00% of the public offer amount
EBL Investments Limited
CAPM Advisory Limited
Page: 149
CHAPTER (XIX): LITIGATIONS, FINE OR PENALTY
(a) The following litigations including outstanding litigations against the issuer or any of its directors and fine or penalty imposed by any authority: The issuer or any of its directors was not involved in any of the following type of legal proceedings mentioned below;
(i) Litigation involving Civil Laws (ii) Litigation involving Criminal Laws (iii) Litigation involving Securities, Finance and Economic Laws (iv) Litigation involving Labor Laws (v) Litigation involving Taxation (Income tax, VAT, Customs Duty and any other taxes or duties) (vi) Litigation involving any other Laws
(b) Cases including outstanding litigations filed by the Company or any of its directors:
There is no case including outstanding cases filed by the issuer or any of its directors to any of the following types of legal proceedings mentioned below;
(i) Litigation involving Civil Laws: No cases filed by the company or any of its directors. (ii) Litigation involving Criminal Laws: No cases filed by the company or any of its directors. (iii) Litigation involving Securities, Finance and Economic Laws: No cases filed by the company
or any of its directors. (iv) Litigation involving Labor Laws: No cases filed by the company or any of its directors. (v) Litigation involving Taxation (Income tax, VAT, Customs Duty and any other taxes or
duties): No cases filed by the company or any of its directors. (vi) Litigation involving any other Laws: No cases filed by the company or any of its directors.
Page: 150
CHAPTER (XX): RISK FACTORS AND MANAGEMENT’S PERCEPTIONS ABOUT THE RISKS
(i) Internal risk factors may include, among others:
a) Credit Risk: This is the risk of default on a debt that may arise because of default by the borrower to pay the loan. In operating any business there is always credit risk lies in the business. As there is always lending and borrowing between parties in the form of money and goods.
Management Perception: Credit Risk mainly lies with Financial Institutions. Since BD Paints Limited (BDPL) is involved in manufacturing and marketing of different kind of paints, there is no such credit risk. Regarding credit sales, company tries to ensure credit policy so that operating cycle can be efficient comparing to other competitors.
b) Liquidity Risk: The risk that a company may be unable to meet short term financial demands.
This usually occurs due to the inability to convert its current assets to cash without a loss of capital or income. Liquidity is a common phenomenon of the business. Management Perception: Finance is an arts and science of managing fund so that it can manage working capital in efficient way. BD Paints Limited (BDPL) is also doing its level best to manage working capital management in efficient way to maintain liquidity risk. Management is dealing with accounts payable, inventory and accounts receivable efficiently.
c) Risk associated with the issuer’s interest in subsidiaries, joint ventures and associates: If the
subsidiaries make loss, it affects parent company’s balance sheet. In case of associate, there is chance of decline value of investment in associate company. As for joint venture, a joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it. Management Perception: BD Paints Limited (BDPL) has no subsidiary, associate and joint venture.
d) Significant revenue generated from limited number of customers, losing any one or more of
which would have a material adverse effect on the issuer: There is risk involved in having limited number of customer and losing of that particular customer has negative impact on company’s sales and cash flow as well. Management Perception: The Management is always keen to find out new buyers which boost up the sales. The company generates revenues from selling different kinds of paints products across the country through its dealers. Hence, the company is not dependent on any particular or limited number of customers to operate the business.
e) Dependency on a single or few suppliers of raw materials, failure of which may affect
production adversely: There is also risk involved in having limited number of suppliers as well. Single or few suppliers may exploit the company by price hike, untimely delivery and low quality of product. Management Perception: In business, having many suppliers of raw materials helps to get competitive advantage of cheaper price of raw materials. Because, having many suppliers help to bargain with suppliers over price. In addition, having many suppliers help to maintain doing business efficiently. As we hold the views, we are not dependent on a single or few suppliers. We have many suppliers from different countries that we have also mentioned in the prospectus.
Page: 151
f) More than 20% revenue of the issuer comes from sister concern or associate or subsidiary: Having 20% revenue generation from sister concern or associate or subsidiary makes issuer dependent on others companies. Hence, there is dependency risk. Management Perception: We do not have any sister concerns and associate or subsidiary.
g) Negative earnings, negative cash flows from operating activities, declining turnover or
profitability, during last five years, if any: Negative earning and negative operating cash flow risk is the going concern risk for the entity.
Management Perception: We have been operating our business efficiently. We do not have any negative earning and negative cash flow from operation.
h) Loss making associate/subsidiary/group companies of the issuer: When associate/ subsidiary/group companies of the issuer are loss making, it affects the issuer and there is negative impact on cash flow of issuer and Balance Sheet as well.
Management Perception: We do not have any associate, subsidiary or group of companies.
i) Financial weakness and poor performance of the issuer or any of its subsidiary or
associates: Financial weakness and poor performance of the issuer have negative impact on the company. As a result, it will be tough to pay loan interest, debt service and dividend. Future growth will be hampered.
Management Perception: Sales is one of the key indicators of success of a business if there is good margin of profit. BD Paints Limited (BDPL) has been generating sales growth efficiently.
j) Decline in value of any investment: If investment value decline, it will reduce the profit and
assets as well.
Management Perception: BD Paints Ltd. do not have any investment.
k) Risk associated with useful economic life of plant and machinery, if purchased in second hand or reconditioned: There is obsolescence risk relating to plant and machinery. If the machinery is purchased in second hand or reconditioned, there high risk of repair and maintenance which has impact on profitability of the company. Management Perception: The machineries that are used for BD Paints Ltd. are new machineries.
l) Adverse effect on future cash flow if interest free loan given to related party or such loans
taken from directors may recall: It is loan given and taken from related party and directors as well. If company gives such loan without interest to related party, there is interest burden for the company if the money was taken as loan. On the other hand, if such loans are taken from directors, it will have an impact on the cash flow to pay off the loan to the Directors. Management Perception: There is no as such loan given to related party or loan taken from directors.
m) Potential conflict of interest, if the sponsors or directors of the issuer are involved with one
or more ventures which are in the same line of activity or business as that of the issuer and if any supplier of raw materials or major customer is related to the same sponsors or directors: In these cases, there is high chance of compromise among the related companies because of conflict of Interest. Management Perception: There is no potential conflict of Interest as we do not have any venture which is in the same line of activity.
Page: 152
n) Related party transactions entered into by the company those may adversely affect competitive edge: Related party transaction of the issuer creates conflict of interest which reduces the competitive advantage of the issuer. Management Perception: There is no as such transaction which may adversely affect competitive edge.
o) Any restrictive covenants in any shareholders' agreement, sponsors' agreement or any
agreement for debt or preference shares or any restrictive covenants of banks in respect of the loan/ credit limit and other banking facilities: All information must be known to the potential investor so that investor’s interest may not be hampered in future. So, any restrictive covenants, if it goes against potential investors, will make investors in jeopardy.
Management Perception: There are no restrictive covenants in any shareholders’ agreement, sponsors’ agreement or any agreement relating to debt or preference shares or any restrictive covenants of Banks in respect of loan or credit limit and other banking facilities.
p) Business operations may be adversely affected by strikes, work stoppages or increase in
wage demands by employees: In such case, company’s business operation will be hampered. Management Perception: Different kind of strikes are not new in Bangladesh for long time and our business industries are used to dealing with this phenomenon. In relation to wages, we provide competitive wages among the competitors of us.
q) Seasonality of the business of the issuer: It is the risk involving that company is not doing
business round the year. Management Perception: BD Paints Ltd. manufactures and sells different kind of Paints. The company sells paints products round the years.
r) Expiry of any revenue generating contract that may adversely affect the business: This is the risk of losing customers affecting future sales.
Management Perception: The Company does not have any revenue generating contract that may adversely affect the business.
s) Excessive dependence on debt financing which may adversely affect the cash flow: Excessive dependence on debt causes huge interest burden of the company and high risk of insolvency that may result in bankruptcy.
Management Perception: Company is not dependence on any excessive debt financing and there is no long-term debt as well.
t) Excessive dependence on any key management personnel absence of whom may have adverse effect on the issuer’s business performance: Excessive dependence on key management affects the business if the management is changed in future, which will create vacuum. Besides, if the key management personnel are of bad intention, excessive dependence will also affect the business.
Management Perception: Corporate Governance is well practiced in our company. The company also has well placed organogram in our company. Hence, any change in the key management can be replaced with other persons.
u) Enforcement of contingent liabilities which may adversely affect financial condition: It is the future burden of liabilities that the investors will take on their shoulders. Contingent liabilities reduced the assets or create obligation to pay the liabilities.
Management Perception: We do not have any contingent liabilities which may adversely affect financial condition.
Page: 153
v) Insurance coverage not adequately protect against certain risks of damages: Insurance ensures and protects to deal with uncertainty of future material loss/damage. So, insurance coverage is important for the business.
Management Perception: We have fire insurance is in place.
w) Absence of assurance that directors will continue its engagement with Company after expiry of lock in period: Directors run the company with the accumulated finance from public and other financing source. If directors discontinue running the business, there will be negative impact on business and share price as well. Management Perception: Our directors are involved in the business for long time and they will continue the business after expiry of lock in period.
x) Ability to pay any dividends in future will depend upon future earnings, financial condition,
cash flows, working capital requirements and capital expenditure: Dividend payment is highly dependent on company’s ability to generate profit. If company cannot earn good amount of profit from operation, it is unlikely to pay dividend. Management Perception: The Company has been earning profit and a profitable entity. We are in belief that we will be able to pay dividend from our profit.
y) History of non-operation, if any and short operational history of the issuer and lack of adequate background and experience of the sponsors: If there is any non-operation of the company, it creates negative impression. Apart from this, short operation history indicates company is gathering knowledge and expertise to be competitive in the market. Management Perception: The Company is in paints business for around five years. There was no non-operation history of the company. The company has employed experienced people to run the business under good leadership in the board.
z) Risks related to engagement in new type of business, if any: If it is new business, there is risk of viability of the new business.
Management Perception: There is no as such risk as we are not engaged in any new type of business.
aa) Risk in investing the securities being offered with comparison to other available investment options: If the issue price goes down after floating, there is investment risk for the potential investors.
Management Perception: BD Paints Ltd. is a profitable entity and business growth will continue in the long run. It is not risky in investing securities in comparison with other available investment option.
bb) Any penalty or action taken by any regulatory authorities for non-compliance with provisions of any law: It creates a negative impression on the issuer. Management Perception: There are no as such issues arisen in the history of our company.
cc) Litigations against the issuer for Tax and VAT related matters and other government claims,
along with the disclosures of amount, period for which such demands or claims are outstanding, financial implications and the status of the case: It creates a negative impression on the issuer. Management Perception: No, we did not have any litigation relating to Tax, VAT or other government claims against of our company.
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dd) Registered office or factory building or place of operation is not owned by the issuer: Factory building should be owned by the company. Otherwise, there is risk of hike in factory rent in the years to come and threat of shifting the factory as well. Management Perception: Company’s registered office and factory is situated at Plot # 17, 22, BSCIC Industrial Area, Kawnia, Barisal. Registered and factory officer is owned by the company. Corporate office is at Plot-117/3, Sataish, Noyabari Road, 27, Tongi, Gazipur, which is rented.
ee) Lack of renewal of existing regulatory permissions/ licenses: In this case company is not following the law to renew its all licenses.
Management Perception: There is no such issue relating to lack of existing regulatory permissions/ licenses.
ff) Failure in holding AGM or declaring dividend or payment of interest by any listed securities of the issuer or any of its subsidiaries or associates: Failure in holding AGM or declaring dividend indicates the lack of compliance to the regulatory rules. Failure of payment of interest indicate the poor cash generation to the company to pay interest and debt service. The overall impression will be negative for the company. Management Perception: There is no incident of failure in holding AGM or declaring dividend or payment of interest by the issuers.
gg) Issuances of securities at lower than the IPO offer price within one year: The management
ultimate goal is to maximize the wealth of the company. If share price goes up, it maximizes wealth of the company. On the other hand, if share price goes down, it minimizes the wealth of the company. Management Perception: BD Paints Limited (BDPL) has been profitable entity. It has potentiality to grow in future. We believe that our IPO offer price will not be lower within one year.
hh) Refusal of application for public issue of any securities of the issuer or any of its subsidiaries or associates at any time by the Commission: If any refusal happened in the above cases, it will create negative impression to the issuer. Management Perception: Such cases did not happen for our company.
(ii) External risk factors may include among others:
a) Interest Rate Risks: When interest rate fluctuates, it causes interest risk. Companies who have debt financing are exposed to this risk highly.
Management Perception: In our country, right now, government is in effort to reduce interest rate in single digit so that business can thrive. As for BD Paints Ltd, the Company does not have any long-term debt financing. Hence, BD Paints Ltd. is not vulnerable to Interest rate risk.
b) Exchange Rate Risks: Foreign exchange risk or currency risk is a financial risk that exists when
a financial transaction is denominated in a currency other than that of the base currency of the company. This risk arises when investment's value changed due to the changes in currency exchange rates. Management Perception: In the context of Bangladesh Garments and Textiles Industries is the driving force of economy. Bangladesh is the second largest apparel exporter in the world after China. Bangladesh exported garment items worth around $28 billion in 2017-18 fiscal year. Hence, in order to protect exchange risk, Bangladesh Bank, for over the years, has done tremendous job to keep the exchange rate stable. Moreover, macro-economic variable which is beyond our control and exchange risk is adjusted with price.
c) Industry Risks: Industry risk is related with the factors affecting the company such as Raw Material, labor, demand of the product, government policy to the sector, competitor’s rivalry.
Management Perception: BD Paints Limited is aware of the above fact. Industry risk is inherent in any kind of business. At the moment industry is favoring for operating business.
d) Economic and Political risks: This risk can be described as the likelihood that an investment will
be affected by macroeconomic conditions such as government regulation, exchange rates, or political stability. In other words, while financing a project, the risk that the output of the project will not produce adequate revenues for covering operating costs and repaying the debt obligations. In a nutshell, economic risk refers to the risk that a venture will be economically unsustainable due to various reasons.
Management Perception: Bangladesh economy is enjoying 7% economic growth and expected economic growth by the government is 7.5%. As a result, huge development work is underway by the govt. Hence, huge expensive infrastructure has been under construction that will create employment and per capita income is going up as well. As economy is expanding, so is our business viability and profitability.
Political risks: Bangladesh experienced with political unrest for over the years. Political instability hampers the smooth operation of business.
Management Perception: Nowadays calm and serene atmosphere is prevailing in our country. There is no political chaos as was at the beginning of 2014. Government is industry friendly and trying to its level best to boost up economic activities in the country.
e) Market and Technology-related Risks;
Market risks: BD Paints Limited is operating in a free market economy regime. The company might have to face stiff competition from its competitors.
Management perception: Market risk is dealt with efficiently by the experienced management.
Technology-related risks: Technology always plays a vital role for each and every type of business. Innovation of new and cost-effective technology can increase productivity and reduce costs of production. On the other hand, obsolete technology may have a negative impact on the business.
Management perception: Because of nature of the business BD Paints Limited applies the latest technology to deal with its operation. If it is does not uses latest technology, it will not be able to cope with the competitors.
f) Potential or existing government regulations: Potential or existing Govt. regulations may hamper the smooth operation of the industry.
Management perception: The Company is enjoying good atmosphere in operating our business. Government regulations are favorable for the company.
g) Potential or existing changes in global or national policies: Policies from govt has a positive
or negative impact on any company along with existing changes in globally.
Management perception: Nowadays global and national policies do not change without prior notice. For potential changes in policies, local and global leaders consider different issues including industries opinion. We are optimistic that if any policies change unpredictably, we can improvise with new policies without hampering our smooth operation.
h) Statutory clearances and approvals those are yet to be received by the issuer: Statutory
clearance and approval is imperative for any business to start off. There are many statutory
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clearances and approvals need from the regulatory authority in order to be monitored, controlled and guided.
Management Perception: BD Paints Limited has been running its business for around five years. The company has collected all the statutory clearance to operate the business. Hence, there are no as such risks for the Company.
i) Competitive condition of the business: BD Paints Limited (BDPL) is operating in a free market
economy. The company has to face stiff competition from its competitors.
Management Perception: BD Paints Limited (BDPL) has been in the market over the years. The Company is doing well to be competitive with competitors. Hence, there is always check and balance existed among the rivalry companies.
j) Complementary and supplementary products/services which may have an impact on
business of the issuer: Complementary goods or services that are used in conjunction with another goods or services. Usually, the complementary goods have no value when consumed alone, but when combined with another good or service, it adds to the overall value of the offering. A product can be considered a complement when it shares a beneficial relationship with another product offering. Supplementary goods are two goods that are used together. For example, if we have a car, we also need petrol to run the car. Supplementary goods have a negative cross elasticity of demand. For instance, when price of petrol goes up, demand for petrol and cars goes down.
Management Perception: The Company has not faced any challenges relating to supplementary and complementary products and Management are concerned with the issue. In future, if necessary, management may diversify the product to be competitive over the competitors.
(iii) Other risk factors:
a) Risk related to establishment of all physical structures of the Company on a leased land:
Management Perception: The Company has got leased land in Bangladesh Small and Cottage Industries Corporation (BSCIC) for 99 years. It is government lease and it is renewable. As a result, Management is of the belief that the risk related to establishment of physical structure on leased land in BSCIC is very low.
b) Risk related to short operational history:
Management Perception: The Company is in operation for 4 years. Since the operation of the Company is a profitable entity and grasping the market share as well. As a result, there is sales growth over the years and profit and as well.
c) Risk related to large capital based but low earning based company:
Management Perception: The Company has raised capital of Tk. 28.00 Crore on 24/05/2018. Hence, capital has been larger than earlier. However, capital has been utilized subsequently after 24 May, 2018. Management is of the belief that the earning level will be increased subsequently in the coming years.
d) Risk related to use of IPO proceeds:
Management Perception: The Company is expanding its operation in order to enhance product lines for which the Company needs new machineries and to build civil construction as well. As a result, management believes that there is no risk to use of IPO proceeds within time frame.
e) Risk related to non settlement of Tax of any year of the Company through tax assessment order:
Management Perception: The Company submitted tax return and assessment has been completed on 27/02/2019 for the years 2015 and 2016. Advance income tax has been paid Tk. 1,67,12,494. The Company shall settle the tax soon.
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CHAPTER (XXI): DESCRIPTION OF THE ISSUE
(a) Issue Size: Tk. 200,000,000.00 (b) Number of securities to be issued;
The Company will offer 20,000,000 Ordinary Shares, of these 20,000,000 ordinary shares 30% (i.e. 6,000,000 Ordinary Shares) are reserved for Eligible Investor (EI) excluding mutual funds and CIS and 10% (i.e. 2,000,000 Ordinary Shares) are reserved for Mutual Funds and CIS and 50% (i.e. 10,000,000 Ordinary Shares) to General Public excluding NRB and ¶wZMÖ¯’ ¶z`ª wewb‡qvMKvix and
remaining 10% (i.e. 2,000,000 Ordinary Shares) are reserved for NRB.
(c) Authorized capital and paid-up capital;
Particular Amount in Tk.
Authorized Capital 100,000,000 Ordinary Share of Tk.10.00 each 1,000,000,000.00
Issued, Subscribed and Paid up Capital Before IPO 50,000,000 Ordinary Shares of Taka 10.00 each 500,000,000.00
Initial Public Offering through Fixed Price Method 20,000,000 Ordinary Shares of Taka 10.00 each 200,000,000.00
Post IPO Paid up Capital 700,000,000.00
(d) Face value, premium and offer price per unit of securities;
Face value per Share Tk. 10.00 each
Premium -
Offer Price per Share Tk. 10.00 each
(e) Number of securities to be entitled for each category of applicants;
Category Particular Number of
Shares
Issue Price
per Share
Amount in Tk.
Eligible Investors (EIs)
30% of IPO i.e. 6,000,000 Ordinary Shares shall be reserved for Eligible Investor (EI) excluding mutual funds and CIS
6,000,000
10.00
60,000,000
10% of IPO i.e. 2,000,000 Ordinary Shares shall be reserved for Mutual Funds and CIS
2,000,000 20,000,000
General Public (GP)
50% of IPO i.e. 10,000,000 Ordinary Shares shall be reserved for General Public (GP) including affected small investors (¶wZMÖ¯’ ¶z ª̀ wewb‡qvMKvix)
10,000,000 100,000,000
10% of IPO i.e. 2,000,000 Ordinary Shares shall be reserved for Non-Resident Bangladeshis (NRB)
2,000,000 20,000,000
Total 20,000,000 200,000,000
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(f) Holding structure of different classes of securities before and after the issue;
Sl. No.
Category of Shareholders
No. of Ordinary Shares Hold
Percentage of Holding
Pre-IPO Post-IPO Pre-IPO Post-IPO
1 Director & Sponsor 25,700,000 25,700,000 51.40% 36.71%
2 Institutional 1,512,000 7,512,000 3.02% 10.73%
3 Mutual Funds and CIS - 2,000,000 0.00% 2.86%
4 Individual 22,788,000 32,788,000 45.58% 46.84%
5 Non Resident Bangladeshis (NRBs) - 2,000,000 0.00% 2.86%
Total 50,000,000 70,000,000 100.00% 100.00%
(g) Objective of the issue including financing requirements and feasibility in respect of enhanced
paid-up capital.
Proceeds from Initial Public Offering (IPO) will be used for acquisition of machinery & equipment, construction of building & other civil works and for IPO Expenses.
Use of Proceeds under:
Feasibility report is not required by us since we will expand the existing project.
Sl. Particulars Amount in Tk.
1 Acquisition of machinery and equipment 107,675,248
2 Construction of building & other civil works 73,624,752
3 IPO Expenses 18,700,000
Total 200,000,000
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CHAPTER (XXII): USE OF PROCEEDS (a) Use of net proceeds of the offer indicating the amount to be used for each purpose with head-
wise break-up; Proceeds from Initial Public Offering (IPO) will be used for acquisition of machinery & equipment, construction of building & other civil works and for IPO Expenses.
Use of Proceeds under:
Sl. Particulars Amount in Tk.
1 Acquisition of machinery and equipment 107,675,248
2 Construction of building & other civil works 73,624,752
3 IPO Expenses (Detailed breakdown of IPO expenses in page number 74-75) 18,700,000
Total 200,000,000
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Details of acquisition of machinery and equipment:
SI. Name of Machineries with description Name of Supplier Model Country of
Shanghai Refined Chemical Machinery Co., Ltd. Shanghai, China
RFD-series
China 2 46,500.00 93,000.00 7,792,470
3 Automatic Paint Roller Frame Making Machine
Dongguan Xinsheng Hardware Machinery Co., Ltd.
GT-PR-8R
China 4 35,000.00 140,000.00 11,730,600
4
Automatic Paint Filling Machine (Electronic PLC Based Filling Machine, highly efficient machine with elegant look, multi functional, multi featured machine meets the GMP requirements, computer base circuitry)
FILSILPEK Solutions Pvt. Ltd.
- India 2 35,000.00 70,000.00 5,865,300
5
Automatic Paint Filling Machine with Lid Pressing (Piston Filler, Line Speed, Conveyor Size, Lid Pressing, Control Panel, Air Consumption & Power Requirement)
K & R International - India 2 42,500.00 85,000 7,122,150
7 High Speed Atrator Machine Nipa Engineering - Bangladesh 5 4,500,000 22,500,000 22,500,000
8 High Speed Mixture Machine Nipa Engineering - Bangladesh 5 5,100,000 25,500,000 25,500,000 Total Price 99,698,429 Local Cost of Duty, port charges, C&F, Insurance on Import Machinery (51,698,430) 15% 7,754,765 Transportation, Installation, etc. 222,054
Grand Total: (Total cost for imported Machinery & Local Machinery) 107,675,248
(b) Utilization of the total amount of paid-up capital and share premium, if any, including the sponsors’ contribution and capital raised of the issuer at the time of submission of prospectus, in details with indication of use of such funds in the financial statements; Tk. 95,000,000.00 (Nine Crore Fifty Lac) through cash and other than cash (all assets and liabilities), Tk. 125,000,000.00 (Twelve Crore Fifty Lac) through cash and other than cash (land) and Tk. 280,000,000.00 (Twenty-Eight Crore) through cash totaling Tk. 500,000,000.00 (Fifty Crore) has been raised prior to the public issue on dated April 17, 2014, April 23, 2015 and May 24, 2018 respectively. This fund has already been deployed by the issuer in the following manner:
Accounting Year
Items Amount in
BDT Reflected in Cash Flows
Date of Incorporation
Acquisition of Fixed Assets
35,000,000 In the statement of cash flows, the figure is included in total amount of acquisition property, plant & equipments under the head of investing activities.
2014-15
Acquisition Property, Plant &
Equipments 114,516,531
In the statement of cash flows, the figure is Tk. 94,516,531 & Tk. 20,000,000 included in total amount of acquisition property, plant & equipments & land respectively under the head of investing activities.
Working capital 70,483,469 In the statement of cash flows, the figure is included in total amount of working capital is revenue expenditure under the head of operating activities.
2017 - 18
Machinery, Factory &
Laboratory Equipment
189,887,627 In the statement of cash flows, the figure is included in total amount of acquisition property, plant & equipments under the head of investing activities.
Advance Warehouse Rent
15,000,000 In the statement of cash flows, the figure is included in total amount of cash payment to others under the head of operating activities.
FDR 50,000,000 The figure is shown in financial statements under the head of cash & cash equivalent which has kept in the bank as FDR form in favor of the company.
Cash & cash equivalent
25,112,373
The figure is shown in financial statements under the head of cash & cash equivalent which has kept in the bank account as cash deposit form in favor of the company.
Total 500,000,000
(c) If one of the objects is an investment in a joint venture, a subsidiary, an associate or any
acquisition, details of the form of investment, nature of benefit expected to accrue to the issuer as a result of the investment, brief description of business and financials of such venture; The Company has no objects to investment in such type of ventures by using Use of IPO proceeds.
(d) If IPO proceeds are not sufficient to complete the project, then source of additional fund must be mentioned. In this connection, copies of contract to meet the additional funds are required to be submitted to the Commission. The means and source of financing, including details of bridge loan or other financial arrangement, which may be repaid from the proceeds of the issue along with utilization of such funds; IPO proceeds are sufficient to complete the project.
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(e) A schedule mentioning the stages of implementation and utilization of funds received through public offer in a tabular form, progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, the approximate date of completion of the project and the projected date of full commercial operation etc. The schedule shall be signed by the Chief Executive Officer or Managing Director, Chief Financial Officer and Chairman on behalf of Board of Directors of the issuer;
Sl. No.
Projects Progress made so Far
Approximate date of
Completion of the projects
Projected date of full commercial operation
1 Land Acquisition No land is required to be acquired
- -
2
Acquisition and Installation of machineries and equipments
Acquisition and Installation of machineries and equipments will be started after receiving of IPO fund
Within 18 months after receiving
IPO fund
Within 3 months of
the completion
of the project
3 Civil Construction Construction & other civil works will be started after receiving of IPO fund
Sd/- Md. Bellal Khan Managing Director
Sd/- Md. Abul Khayer
Chief Financial Officer
Sd/- Aysha Siddika
Chairman,
On behalf of Board
(f) If there are contracts covering any of the activities of the issuer for which the proceeds of sale of securities are to be used, such as contracts for the purchase of land or contracts for the construction of buildings, the issuer shall disclose the terms of such contracts, and copies of the contracts shall be enclosed as annexure to the prospectus; There is no contract yet to be engaged by the Company.
(g) If one of the objects of the issue is utilization of the issue proceeds for working capital, basis
of estimation of working capital requirement along with the relevant assumptions, reasons for raising additional working capital substantiating the same with relevant facts and figures and also the reasons for financing short with long term investments and an item-wise break-up of last three years working capital and next two years projection; No objects of the issue are utilization of the issue proceeds for working capital.
(h) Where the issuer proposes to undertake one or more activities like diversification,
modernization, expansion, etc., the total project cost activity-wise or project-wise, as the case may be; The Company has planned to expand its existing projects by Acquisition of Machineries and Equipments and Civil Construction, which have been mentioned in Use of IPO proceeds and projects Implementation schedule.
(i) Where the issuer is implementing the project in a phased manner, the cost of each phase,
including the phases, if any, which have already been implemented; The Company has planned to implement to the existing projects by using IPO proceeds after receiving the funds, which have been mentioned in Use of IPO proceeds and projects Implementation schedule.
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(j) The details of all existing or anticipated material transactions in relation to utilization of the issue proceeds or project cost with sponsors, directors, key management personnel, associates and group companies; There is no existing or anticipated material transaction in relation to utilization of the issue proceeds or project cost with sponsors, directors, key management personnel, associates and group companies.
(k) Summary of the project appraisal or feasibility report by the relevant professionals not
connected with the issuer, issue manager and registrar to the issue with cost of the project and means of finance, weaknesses and threats, if any, as given in the appraisal or feasibility report.
Feasibility report is not required by us since we will expand the existing project.
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CHAPTER (XXIII): LOCK-IN (i) Ordinary shares of the issuer, at the time of according consent to the public issue, shall be subject to lock-in, from the first trading day at the exchange in the
following manner: (a) shares held by sponsors, directors and shareholders holding 10% (ten percent) or more, for 03 (three) years;
(b) in case, any existing sponsor or director of the issuer transfers any share to any person, those transferred shares, for 03 (three) years;
(c) shares allotted to any person, before 4 (four) years or more of according consent to the public issue, other than the persons mentioned in clause (a) and
(b), for 01 (one) year;
(d) shares held by alternative investment funds, for 01 (one) year;
(e) shares held by any person, other than the shares mentioned in clause (a), (b), (c) and (d) above, for 02 (two) years. (ii) The following table indicates the Lock-In status of the shareholders of BD Paints Limited:
CHAPTER (XXIV): MARKETS FOR THE SECURITIES BEING OFFERED Stock Exchanges: The issuer shall apply to the following bourses for listing shares within 7 (seven) working days from the date of consent accorded by the Commission to issue the prospectus:
Declaration about Listing of Shares with Stock Exchanges: None of the Stock Exchanges, if for any reason, grant 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 exchange, 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 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 seven days of expiry of the aforesaid fifteen days’ time period allowed for refund of the subscription money. Trading and Settlement; Trading and Settlement Regulation of the stock exchanges will apply in respect of trading and settlement of the shares of the Company. THE ISSUE SHALL BE PLACED IN “N” CATEGORY
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CHAPTER (XXV): DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED (a) Dividend, voting and preemption rights;
The Share Capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All Shareholders shall have the usual voting rights in person or by proxy in connection with, among others, election of Directors & Auditors and other usual agenda of General Meeting – Ordinary or Extra-ordinary. On a show of hand, every shareholder presents in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present or by proxy shall have one vote for every share held by him or her.
In case of any additional issue of shares for raising further capital, the existing shareholders shall be entitled to Right Issue of shares in terms of the guidelines issued by the BSEC from time to time.
(b) Conversion and liquidation rights; In terms of provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind.
(c) Dividend policy;
i. The profit of the Company, subject to any special right relating thereto created or authorized to be created by the Memorandum and subject to the provisions of the Articles of Association, shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively.
ii. No large dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of Net profit of the Company shall be conclusive.
iii. No dividend shall be payable except out of the profits of the Company or any other undistributed profits. Dividend shall not carry interest as against the Company.
iv. The Directors may from time to time pay the members such interim dividend as in their judgment the financial position of the Company may justify.
v. A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer.
vi. No limitation in payment of dividend is stipulated in any debt instrument or otherwise. (d) Other rights of the securities holders;
In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind. The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the right to receive all periodical statement and reports, audited as well as un audited, published by the company from time to time. The shareholder holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition extra ordinary General Meeting of the company as provided for the section 84 of the Companies Act 1994.
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CHAPTER (XXVI): FINANCIAL STATEMENTS (a) The latest financial statements prepared and audited by the Commission’s panel auditors in
adherence to the provisions of the Securities and Exchange Rules, 1987, the †Kv¤úvwb AvBb, 1994,
International financial Reporting and Auditing Standards as adopted in Bangladesh from time to time and any other law as applicable;
Independent Auditor’s Report
To the Shareholders of BD Paints Limited
Report on the Audit of the Financial Statements Opinion We have audited the financial statements of BD Paints Limited, which comprise the statement of financial position as at June 30, 2019 and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2019, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and comply with the requirements of the Companies Act, 1994, The Securities and Exchange Rules, 1987 and other applicable laws and regulations. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh, and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon; we do not provide a separate opinion on these matters.
Sl Risk Our response to the risk
1.
Carrying value of property, plant and equipment (PPE) Refer to note 3.00 to the financial statements. The Company has reported PPE carrying value of BDT 395.85 million in the financial statements for the year ended 30 June 2019, which represent a significant balance recorded in the statement of financial position.
Our audit procedures included, among others, considering the risk of Property, Plant and Equipment, in addition to we also performed the following substantive audit procedures:
• Assessed compliance with relevant accounting standards.
• We critically assessed and verified the Company’s policy of asset addition.
• We assessed the appropriateness of the value of the assets on test basis.
• We also recalculated the depreciation to assess the sensitivity of the key assumptions including depreciation rate.
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The evaluation of the recoverable amount of these assets requires significant estimates as disclosed in Note 2.09 in determining the key assumptions supporting the expected future cash flows of the business, the utilization of the relevant assets, the forecast revenue and profit.
• We have also considered the adequacy of the Company’s disclosures about the degree of estimation involved in determining the amount of impairment and the sensitivity to key assumptions involved.
• We assessed the appropriateness of the related disclosures in Note 3.00 of the financial statements.
2.
Measurement of deferred tax liability Refer to note 11.00 to the financial statements. Company reported net deferred tax liability totaling BDT 50.7 million as at 30 June, 2019. Significant judgment is required in relation to deferred tax liability as their recoverability is dependent on forecasts of future profitability over a number of years.
We obtained an understanding, evaluated the design and tested the operational effectiveness of the Company’s key controls over the recognition and measurement of deferred tax liability and the assumptions used in estimating the Company’s future taxable income.
• We also assessed the completeness and accuracy of the data used for the estimations of future taxable income.
• We also assessed the appropriateness of presentation of disclosures against IAS-12 Income Taxes;
3. Valuation of Inventories Refer to note 5.00 to the financial statements. Inventories are carried at Tk 153.59 million which represent about 18.05% of the total assets of the Company, inventories are thus a material item to the Financial statements. As described in the accounting policy note 2.11 to the financial statements, inventories are valued at the lower of cost or net realizable values. As such, management is required to make judgments in determining whether inventories are being appropriately valued. Volume of inventories being held by the company at the reporting date and the complexities involved in the accounting and presentation thereof, Inventories has been considered as a key audit matter.
• Tested the operating effectiveness of key controls over Inventories; including observing the process of management’s Year-end inventory count. • Verified a sample of inventory items to ensure that costs have been appropriately recorded. • Tested on a sample basis the net realizable value by comparing costs to recent selling prices and assessing the reasonableness of any resulting write down of inventory items. • Performed cut-off tests to determine that the purchases and sales of the inventories have been captured in the correct accounting period. • Reviewed the historical accuracy of inventory provisions and the level of write-downs.
Other Information Management is responsible for the other information. The other information comprises the information including Director’s report included in the annual report but does not include in the financial statements and our auditors’ report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial
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statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements As part of an audit in accordance with ISAs, we exercise professional judgments and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Company’ financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994 and the Securities and Exchange Rules 1987, we also report the following: a) we have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit and made due verification thereof; b) in our opinion, proper books of accounts as required by law have been kept by the Company so
far as it appeared from our examination of these books; c) the statements of financial position and statements of profit or loss and other comprehensive income
dealt with by the report are in agreement with the books of accounts and returns; and d) the expenditure incurred was for the purposes of the Company’s business.
Sd/- Place: Dhaka, Bangladesh Md. Abdur Rashid FCA Dated: October 20, 2019 FAMES & R Chartered Accountants
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BD PAINTS LIMITED Statement of Financial Position
As at June 30, 2019
Particulars
Notes Amount in Taka
30.06.2019 30.06.2018
ASSETS
Non-Current Assets 421,492,572 417,879,624 Property, Plant and Equipment 3.00 395,856,165 417,879,624 Capital Work in Progress 4.00 25,636,407 - Current Assets 428,974,217 365,888,160
Inventories 5.00 153,590,365 112,672,720 Trade and Other Receivables 6.00 139,608,397 115,424,278 Advances, Deposits & Prepayments 7.00 50,199,561 33,892,123 Cash and Cash Equivalents 8.00 85,575,894 103,899,039 Total Assets 850,466,789 783,767,784 EQUITY & LIABILITIES Shareholders' Equity 717,492,099 666,163,781
Deferred Tax Liability 11.00 50,725,779 39,941,716 Current Liabilities 82,248,911 77,662,287
Trade Payables 12.00 7,703,304 20,101,322 Provision for WPPF 13.00 3,948,332 4,079,873 Liabilities for Expenses 14.00 4,211,924 3,950,003 Provision for Income Tax 15.00 66,385,351 49,531,089 Total Equity and Liabilities 850,466,789 783,767,784 Net Asset Value (NAV) Per Share 23.00 14.35 13.32
Annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd- Sd/- Chief Financial Officer Company Secretary Director Managing Director Signed in terms of our separate report of even date annexed. Sd/- Dhaka Date: October 20, 2019
FAMES & R Chartered Accountants
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BD PAINTS LIMITED Statement of Profit or Loss and Other Comprehensive Income
For the year ended June 30, 2019
Particulars Notes
Amount in Taka 01.07.2018
To 30.06.2019
01.07.2017 To 30.06.2018
Sales Revenue 16.00 364,517,070 339,342,101 Less: Cost of Sales 17.00 227,582,691 206,612,618 Gross Profit 136,934,379 132,729,483 Less: Operating Expenses 54,909,471 47,870,752 Administrative Expenses 18.00 33,429,832 29,849,604 Selling & distribution Expenses 19.00 21,479,639 18,021,148 Operating Profit 82,024,908 84,858,731 Other non-operating income / (loss) 20.00 890,067 818,604 Profit before Contribution to WPPF & Welfare Fund 82,914,975 85,677,335 Less: Contribution to WPPF & Welfare Fund 13.00 3,948,332 4,079,873
Profit before Tax 78,966,643 81,597,462 Less: Income Tax Expenses 27,638,325 28,559,112 Current Tax Expenses 21.00 16,854,262 6,595,379 Deferred Tax Expenses 11.00 10,784,063 21,963,733 Net Profit after Tax 51,328,318 53,038,350 Earnings Per Share (EPS) 22.00 1.03 2.13
Annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd- Sd/- Chief Financial Officer Company Secretary Director Managing Director Signed in terms of our separate report of even date annexed. Sd/- Dhaka Date: October 20, 2019
FAMES & R. Chartered Accountants
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BD PAINTS LIMITED Statement of Changes in Equity
For the year ended June 30, 2019
Particulars Share Capital Retained Earnings Total Equity
Balance as at 01-07-2018 500,000,000 166,163,781 666,163,781
Annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd- Sd/- Chief Financial Officer Company Secretary Director Managing Director
Dhaka Date: October 20, 2019
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BD PAINTS LIMITED Statement of Cash Flows
For the year ended June 30, 2019
Particulars Notes
Amount in Taka
01.07.2018 To
30.06.2019
01.07.2017
To
30.06.2018 Cash flows from operating activities:
Cash receipts from customers 340,332,950 311,054,870 Cash receipts from others income 4,402,629 504,220 Cash payment to suppliers (245,155,314) (220,113,520) Cash payment to employees (38,819,049) (39,837,906) Cash payment to others (43,756,086) (40,947,896)
Cash generated from operations 17,005,130 10,659,768 Cash payment for income tax (8,262,268) (8,451,221)
Net Cash generate from Operating activities (Note-25.00) 8,742,862 2,208,548
Cash flows from investing activities:
Acquisition of property, plant and equipment (8,229,600) (214,514,083) Sales of fixed assets 6,800,000 - Paid for capital work in progress (25,636,407) -
Net cash used in investing activities (27,066,007) (214,514,083) Cash flows from financing activities:
Issuance of shares - 280,000,000
Net cash generated from financing activities - 280,000,000 Net increase/(decrease) in cash and cash equivalents (18,323,145) 67,694,465 Cash and cash equivalents at beginning of the year 103,899,039 36,204,574
Cash and cash equivalents at end of the year 85,575,894 103,899,039 Net operating cash flows per share (NOCFPS) (Note: 24.00) 0.17 0.09
Annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd- Sd/- Chief Financial Officer Company Secretary Director Managing Director Dhaka Date: October 20, 2019
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BD PAINTS LIMITED Notes covering summary of significant accounting policies and other explanatory information
For the year ended June 30, 2019 1.00 REPORTING ENTITY: 1.01 Background of the Company: BD Paints Limited formerly Arafat Paint & Chemical Industries Ltd was incorporated on 17th
April 2014 vide incorporation no C-115399/14, as a private company limited by shares. The name has been changed on 4th September 2016. Arafat Paint & Chemical Industries Ltd was incorporated as a private Limited Company by share to take over the business of M/S. Arafat paints and Chemical Works proprietor Mrs. Khaleda Begum Liyly. She started paint and chemical trading business in the year 2001 under the name & style of Arafat Paint & Chemical Works. Later on, 17th July 2011, she started manufacturing unit to produce paints & Chemical. The company had been converted into a public limited company vide special resolution dated 22th July 2014 under the companies Act, 1994.
1.02 Registered Office of the Company: The registered office of the Company is located at Plot-A-17, BSCIC Industrial Estate, Barisal
and the Factory at A-17,22 BSCIC Industrial Estate, Barisal and having its Corporate office at 117/3 Sataish, Tongi, Gazipur.
1.03 Nature of the business: BD Paints Limited carried on business as local manufacturer of different types of paints. The
principal activities of the company is to manufacturing and selling different kinds paints such as distemper, acrylic emulsion, silk emulsion, synthetic, enamel paint, thinner, aerocem, wood protector, wood burnish, burnish oil, white cement, cement paint, weather coat, wall putty, aluminum paint, glycerin powder, chalk powder, black oxide, red oxide, under coat power finale, perfume finale, general car paint and varnish etc.
2.00 BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS: 2.01 Statements of Compliance: The Financial Statements of the Company have been prepared on a going concern basis under
historical cost convention and in accordance with the International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws & regulation for the company.
2.02 Going Concern: The company has adequate resources to continue its operation for the foreseeable future. As
such, the directors intended to adopt the going concern basis in preparing the financial statements. The current credit facilities and resources of the company provides sufficient fund to meet the present requirements of its existing business.
2.03 Accrual Basis: The financial statements have been prepared, except cash flow information, using the accrual
basis of accounting. 2.04 Components of the Financial Statements: According to IAS-1 “presentation of the Financial Statements” the complete set of financial
statement includes the following components; a) Statement of Financial Position as at June 30, 2019; b) Statement of Profit or Loss and other Comprehensive Income for the year ended June 30, 2019; c) Statement of Changes in Equity for the year ended June 30, 2019; d) Statement of Cash Flows for the year ended June 30, 2019; and e) Notes covering summary of significant accounting policies and other explanatory information for the year ended June 30, 2019.
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2.05 Accounting Policies & Estimates: The preparation of these financial statements is in conformity with IASs/IFRSs which require
management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis and used for accounting of certain items such as provision for expenses and depreciation.
2.06 Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section
183 of the Companies Act, 1994 and as per the provision of “the Framework for the preparation and Presentation of Financial Statements”
2.07 Statement of Cash flows: Statement of Cash flows have been prepared in accordance with IAS-7 "Statement of Cash
Flows" and the cash flows from the operating activities have been presented under direct method considering the provisions of Paragraph 19 of IAS-7 which provides that "Entities are encouraged to report cash flows from operating activities using the direct method".
2.08 Applicable accounting standards: The following IASs and IFRSs are applicable for the financial statements for the year under
review:
IASs: IAS-1 Presentation of Financial Statements; IAS-2 Inventories; IAS-7 Statements of Cash flows; IAS-8 Accounting Policies, Changes in Accounting Estimates and Errors; IAS 10 Events After the Reporting Period; IAS 12 Income Taxes; IAS 16 Property, Plant and Equipment IAS 19 Employee Benefits; IAS 24 Related Party Disclosures; IAS 33 Earnings per Share; IAS 36 Impairment of Assets; IAS 37 Provisions, Contingent Liabilities and Contingent Assets; IAS 39 Financial Instruments: Recognition and Measurement; IFRSs: IFRS 7 Financial Instruments: Disclosures; IFRS 8 Operating Segments; IFRS 9 Financial Instruments; IFRS 13 Fair Value Measurement; IFRS 15 Revenue from Contract with Customers;
2.09 Property, Plant and Equipment: 2.09.1 Recognition and Measurement All Property, Plant and Equipment are stated at cost less accumulated depreciation as per IAS-
16 “Property, Plant and Equipment”. The cost of acquisition of an asset comprises of its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non- refundable taxes.
The cost of replacing part of an item of property, plant and equipment is recognized in the
carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its costs can be measured reliably. The day to day maintenance cost on PPE is recognized in the statements of profit or loss and other comprehensive income as incurred.
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2.09.2 Depreciation: Depreciation on Property, Plant and Equipment other than Land has been computed during the
year using the reducing balance method. Depreciation has been charged on addition when the related property, plant and equipment are available for use as per management intention. Depreciation has been charged at the following rates:
2.09.3 Retirement and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its
use. Gain or loss arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the assets and is recognized as gain or loss from disposal of asset under other income in the statement of profit or loss and other comprehensive income. During the year some machinery and lab equipment has been disposal and nine month depreciation have charged on deposal machinery which is shown in assets schedule.
2.09.4 Impairment: All fixed assets have been reviewed and it was confirmed that no such fixed assets have been
impaired during the year and for this reason no provision has been made for Impairment of Assets according to the IAS 36.
2.10 Revenue Recognition: Recognition of revenue as per IFRS 15;
1. Identify the contact with customer 2. Identify the performance obligations in the contact 3. Determine the transaction price 4. Allocate the transaction price to the performance obligation in the contact 5. Recognize revenue when (or as) a performance obligation is satisfied.
2.11 Valuation of Current Assets: Trade and Other Receivable: These are carried forward at their original invoiced value amount and represents net realizable
value. Management considered the entire bills receivable as good and is collectable and therefore, no amount has been provided for as bad debt in the current year’s account.
Inventories: In compliance with the requirements of IAS-2 Inventories, the Inventories have been valued at
Cost or Net Realizable value whichever is lower, which is consistent with the previous year’s practice. Net realizable value is based on estimated selling price in the ordinary course of business less any further cost expected to be incurred to make the sale.
Name of fixed Assets Rate Rate
2019 2018
Land 0% 0%
Land development 2% 2%
Building 3% 3%
Vehicles 10% 10%
Furniture & Fixture 10% 10%
Factory & Laboratory equipment 5% 5%
Computer 10% 10%
Office Equipment 10% 10%
Generator 10% 10%
Water Pump 5% 5%
Machinery & Equipment 5% 5%
ETP 5% 5%
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2.12 Provisions: A provision shall be recognized when:
a) An entity has a present obligation (legal or constructive) as a result of a past event; b) It is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; and c) A reliable estimate can be made of the amount of the obligation.
2.13 Employees’ Benefit The company has accounted for and disclosed employee benefits in compliance with the
provisions of IAS 19: Employee Benefits. The cost of employee benefit is charged off as revenue expenditure in the year to which the
contributions relate. The company’s employee benefits include the following: Short Term Employee Benefits Short-term employee benefits include wages, salaries, festival bonuses etc. Obligations for such
benefits are measured on an undiscounted basis and are expensed as the related service is provided.
Contribution to Workers’ Profit Participation and Welfare Funds This represents 5% of net profit before tax, after charging the amount contributed by the
company as per provisions of the Bangladesh Labor Act-2006(amendment-2013). The company recognizes contribution to Workers’ Profit Participation and Welfare Fund in the accounts from the year 2018. The fund has been transferred to the respective bank account and disbursement has been done within the period among the worker’s.
2.14 Advances, Deposits and Prepayments Advances are initially measured at cost. After initial recognition advances are carried at cost
less deductions, adjustments or charges to other account heads such as PPE or inventory etc. 2.15 Functional and Presentational Currency: The financial statements are prepared in Bangladeshi Taka which is the Company’s functional
currency. 2.16 Income Tax: Current Tax: Current tax is the expected tax payable on the taxable income for the financial year, using tax
rates enacted or subsequently enacted after the reporting date and any adjustment to tax payable in respect of previous years. Provision for taxation is calculated on the basis of applicable current tax rate as per ITO 1984. The Company had submitted income tax return for the year (2015-16, 2016-17, 2017-18) and the assessment were completed by the Deputy Commissioner of Taxes (DCT). Due to some disagreement with the assessment order, management was apple to tribunal. For the year 2018-2019 income tax return has been submitted and assessment is under process.
Deferred Tax: The company recognized deferred tax as per IAS 12 Income Taxes. Deferred tax is recognized
for all temporary timing difference arising between the carrying value of assets and liabilities and its tax base values. The rate prevailing at the Financial Position date is used for determining the deferred tax.
2.17 Earnings per share: The company calculates Earnings per Share (EPS) in accordance with IAS-33 “Earnings per
Share” which has been shown on the face of the profit or loss and other comprehensive income.
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Basic Earnings: This represents profit or loss at the end of the year attributable to ordinary share holders of the
entity Basic Earnings per Share: This has been calculated by dividing profit or loss attributable to ordinary share holders of the
entity by the weighted average number of ordinary shares outstanding during the year. 2.18 Financial Instruments: A financial instrument is any contract that gives rise to a financial asset to one entity and a
financial liability or equity instrument to another entity as per IAS-39 “Financial Instruments Recognition and Measurement.”
Financial Assets: Financial assets of the company include cash and cash equivalents, equity instrument to another
entity, Trade receivables and other receivables. The Company initially recognizes a financial asset in its statement of financial position when, and only when, the company becomes a party to the contractual provision of the instrument. The company derecognize a financial asset when, and only when; the contractual rights to the cash flows from the financial asset expire or transfer the contractual rights to receive the cash flows of the financial asset.
Financial Liabilities: The Company initially recognizes a financial liability in its statement of financial position when,
and only when, the company becomes a party to the contractual provision of the instrument. The Company derecognizes a financial liability from its statement of financial position when, and only when, it is extinguished, that is when the obligation specified in the contract is discharged or cancelled or expires.
2.19 Cash and Cash Equivalents: According to IAS 7 Statement of Cash Flows, cash comprises cash in hand, short term deposit and
highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in values.
2.20 Events After the Reporting Period: Events After the Reporting Period are those events, favorable and unfavorable, that occur
between the end of the reporting period and the date when the financial statements are authorized for issue. Two types of events can be identified:
Adjusting Events - those that provide evidence of conditions that existed at the end of the
reporting period. Non adjusting Events- those that are indicative of conditions that arose after the reporting
period. Management of the company has taken close look whether any events after the reporting period
exist that need to take into account during the preparation of financial statements. No such events occurred after the reporting period for which adjustment should be given or report should be made.
2.21 Authorization date for issuing Financial Statements: The financial statements were authorized by the Board of Directors on October 20, 2019. 2.22 Comparative Information Comparative information has been disclosed in the respect of previous year for all numeric
information in the financial statements and also the narrative and descriptive information where it is relevant for understanding of the current year’s financial statement.
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2.23 Segmental Reporting: As required by IFRS-8 "Operating Segments", if an entity operates business activities that may
earn revenues or incur expenses, whose operating results are regularly reviewed by the chief operating decision maker and for which discrete financial information is available
The company considers the operation on aggregate basis and manages the operations as a
single operating segment. Hence it is felt that such segment reporting is not required to be disclosed.
2.24 Related Party Disclosure The company carried out a number of transactions with related parties in the normal course of
business and on arms’ length basis. The information as required by IAS-24: Related Party Disclosures has been disclosed in a separate note to the financial statements.
2.25 General:
i) The figure has been rounded off to the nearest taka. ii) The financial Statements have been prepared covering one year from July 01, 2018 to June 30, 2019.
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Amount in Taka 30 June, 2019 30 June, 2018
3.00 Property, Plant and Equipment
These have arrived at as under:
(A) Total Cost
Opening balance 452,947,765 176,249,380 Addition during the year 8,229,600 276,698,385 Adjustment during the year (13,329,804) - 447,847,562 452,947,765 (B) Accumulated Depreciation
Opening balance 35,068,141 25,678,257 Depreciation Charged for the year 19,940,498 9,389,884 Adjustment during the year (3,017,241)
Total: Depreciation 51,991,397 35,068,141 WDV as at 30.06.2019 (A-B) 395,856,165 417,879,624 Property, Plant and Equipment- details are shown in "Annexure- A" 4.00 Capital Work-In-Progress A. Civil Construction
Opening balance - 13,295,230 Addition during the year 25,636,407 48,754,414 Transfer during the year - (62,049,644) 25,636,407 - B. Machinery & Equipment's
Opening balance - 47,356,672 Addition during the year 109,233,404 - 60,478,990
Transfer during the year - (107,835,662) - - Total: (A+B) 25,636,407 -
5.00 Inventories
This consists of the following Raw Materials Note: 17.01 80,039,265 46,541,560 Work-In-Process Note: 17.00 13,065,480 18,025,470 Packing Materials Note: 17.01 9,896,350 8,025,480 Finished Goods Note: 17.00 49,854,520 39,258,760 Spare parts Note: 17.02.1 734,750 821,450 153,590,365 112,672,720
6.00 Trade and Other Receivables This consists of the following
A. Trade Receivable
Opening Balance 115,109,894 86,822,663 Sales during the year 364,517,070 339,342,101 Adjusted/ recovery (340,332,950) (311,054,870) Trade Receivables (Annexure- B) 139,294,014 115,109,894 B. Other Receivable (Interest on FDR) 314,384 314,384 (A+B) 139,608,397 115,424,278 Ageing of Accounts Receivable
More than six months - - Less than six months 139,294,014 115,109,894 139,294,014 115,109,894
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The classification of receivables as required as per Para 4, Schedule XI, part –I of the Companies Act 1994. are given below: Receivables considered good and in respect of which the company is fully secured. - -
Receivables considered good for which the company holds no security other than the debtor’s personal security. 139,294,014 115,109,894
Receivables considered doubtful or bad. - -
Receivable due by directors or other officers of the company or any of them either severally or jointly with any other person or receivable due by firms or private companies respectively in which any director is a partner or a director or a member.
- -
Receivables due by companies under the same management.
- -
The maximum amount due by directors or other officers of the company at any time during the period. - -
Total 139,294,014 115,109,894
7.00 Advances, Deposits & Prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or charges to other account heads such as property, plant and equipment or inventory, or any recurring expenses.
The break-up of the amount is given below:
Advance Income Tax Note: 7.01 24,974,762 16,712,494 Goods and service (L/C Margin) 2,305,000 124,560 VAT Current A/C 929,455 150,680 Security for Warehouse 21,000,000 15,000,000 Security deposit for Electricity (WZPDCL) 42,000 42,000 Employees 935,700 1,850,925 Prepayment (Insurance) 12,644 11,464 Total 50,199,561 33,892,123 7.01 Advance Income Tax Opening Balance 16,712,494 8,261,273 Advance Tax paid during the year (RM Import) 7,832,614 8,451,221 Advance Income Tax on FDR 425,000 - Advance Income Tax on Bank Interest 4,653 -
24,974,762 16,712,494
Disclosure as per Schedule XI, Part I, Para 6 of the Companies Act, 1994 Particulars 30.06.2019 30.06.2018
Advances, deposits & prepayments considered good and in respect of which the company is fully secured.
49,263,861 32,041,198
Advances, deposits & prepayments considered good for which the company holds no security.
Nil Nil
Advances, deposits & prepayments considered doubtful or bad.
Nil Nil
Advances, deposits & prepayments due by directors or other officers of the company or any of them either severally or jointly with any other person or Advance, deposits & prepayment due by firms or private companies respectively in which any director is a partner or a director or a member.
Nil Nil
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Advances, deposits & prepayments due by companies under the same management.
Nil Nil
The maximum amount due by directors or other empolyee of the company at any time during the period.
935,700 1,850,925
8.00 Cash and Cash Equivalents The break-up of the amount is given below: Cash in Hand 1,624,992 997,934 Cash at Bank Note:8.01 33,950,902 52,901,105 Short Term FDR 50,000,000 50,000,000 Total: 85,575,894 103,899,039 8.01 Cash at Bank 33,950,902 52,901,105 One Bank Ltd, Barisal -3527 1,178 2,006,328 Mercantile Bank Ltd, Rampura-13091 19,447 377,845 Mercantile Bank Ltd, Elephant Road -483526 8,170 - Islami Bank Ltd, Barisal-316303 33,856,536 50,340,861 Islami Bank Ltd, Bhanga-92710 28,640 19,213 Islami Bank Ltd, Bhanga-108001 10,435 23,585 Export Import Bank of BD ltd, Uttara Ladies Branch-20133 17,320 133,273 Mercantile Bank Ltd, Elephant Road -87723 9,176 - The bank balance is agreed with respective bank statement.
9.00 Share Capital: Authorized Capital
100,000,000 Ordinary Shares of Tk. 10 each 1,000,000,000 1,000,000,000 Issued, Subscribed & Paid-up Capital: 50,000,000 Ordinary Shares of Tk. 10 each fully paid up 500,000,000 500,000,000
10.00 Retained Earnings The break-up of the amount is given below: Opening Balance 166,163,781 113,125,431 Add: Profit for the year 51,328,318 53,038,350 217,492,099 166,163,781
11.00 Deferred Tax Liability The break-up of the amount is given below: Carrying Value of Fixed Assets (Annexure-A) 395,856,165 417,879,624 As Tax Base (250,925,367) (303,760,436) Total Temporary Difference 144,930,798 - Deferred Tax Liabilities @ 35% 50,725,779 39,941,716 Opening Deferred Tax Liability 39,941,716 17,977,983 Deferred Tax Expenses 10,784,063 21,963,733
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12.00 Trade Payables The break-up of the amount is given below: Opening Balance 20,101,322 30,527,997 Purchase during the year 230,576,856 210,787,885 Adjustment/payment (242,974,874) (221,214,560) Total 7,703,304 20,101,322 Details are shown in "Annexure- C"
13.00 Provision for WPPF: Opening WPPF 4,079,873 - Addition during the year 3,948,332 4,079,873 Adjustment/payment (4,079,873) - Total 3,948,332 4,079,873 Profit before contribution for WPPF 82,914,975 85,677,335 Provision for contribution @5% Profit after WPPF 3,948,332 4,079,873 14.00 Liabilities for Expenses The break-up of the amount is given below: Wages & allowance 1,264,050 1,147,423 Salary & allowances 1,928,900 1,764,431 Director Remuneration 100,000 100,000 Audit Fee 402,500 402,500 Electricity bill 131,765 135,460 Rent 206,560 122,560 BSCIC Rent & Service Charge 91,949 91,949 Other Expenses 86,200 185,680 Total 4,211,924 3,950,003 15.00 Provision for Income Tax The break-up of the amount is given below: Opening Balance 49,531,089 42,935,711 Add: Provision during the year 16,854,262 6,595,379
66,385,351 49,531,089
1st July 2018
to 30th June 2019
1st July 2017 to
30th June 2018
16.00 Sales Revenue This is made up as follows: Gross Sales 419,194,631 390,243,416 Less: VAT 54,677,561 50,901,315 Sales Revenue 364,517,070 339,342,101 17.00 Cost of Sales The break-up of the amount is given below: Materials Consumed Notes:17.01 193,066,271 188,246,830 Manufacturing Expenses Notes:17.02 40,152,190 28,338,958 Opening Work-In-Process 18,025,470 16,745,210 Closing Work-In-Process (13,065,480) (18,025,470) Cost of Goods Manufactured 238,178,451 215,305,528 Opening Finished Goods 39,258,760 30,565,850 Closing Finished Goods (Annexure- D) (49,854,520) (39,258,760) 227,582,691 206,612,618 17.01 Raw Material Consumed The break-up of the amount is given below: Opening Stock of Raw Materials 46,541,560 28,329,790 Opening Stock of Packing Materials 8,025,480 5,425,630 Add: Raw Material Purchased 204,016,266 170,022,830
Page: 231
Import 187,959,013 168,826,835 Local 16,057,253 1,195,995 Add: Packing Material Purchased 24,418,580 39,035,620 Material available for Consumption 283,001,886 242,813,870 Closing Stock of Raw Materials (80,039,265) (46,541,560) Closing Stock of Packing Materials (9,896,350) (8,025,480) Details are shown in (Annexure- E) 193,066,271 188,246,830
17.02 Manufacturing Expenses The break-up of the amount is given below: Wages & Allowance 14,717,275 14,802,560 Carriage Inwards 1,431,820 1,021,560 Electricity Bill 1,423,241 1,251,458 Generator Fuel 1,519,360 1,218,861 Spare parts Notes:17.02.1 2,228,710 1,590,775 Repair & Maintenance 738,845 285,465 Insurance Expense 71,787 61,504 BSCIC Rent & Service Charge 91,949 91,949 Depreciation (Annexure- A) 17,929,203 8,014,826
40,152,190 28,338,958
17.02.1 Spare Parts
Opening balance
821,450 682,790
Purchase during the period
2,142,010 1,729,435 Closing balance
(734,750) (821,450)
Consumption
2,228,710 1,590,775 18.00 Administrative Expenses
The break-up of the amount is given below:
Salary & Allowance
18,148,945 17,310,510
Director Remuneration
1,200,000 1,200,000 Board Meeting Fee
190,000 175,000
Rate & Taxes
220,030 190,120 Entertainment
3,113,520 2,745,860
Electricity Bill
31,072 19,520 Telephone & Mobile Bill
198,700 148,240
Travel & Conveyance
2,514,950 2,274,150 Printing & Stationary
3,270,220 2,531,240
Office Expenses
977,190 765,410 Office Rent Expenses
367,680 150,000
Miscellaneous Expenses
766,680 581,245 Fuel & Oil
165,400 105,470
Repair & Maintenance
448,440 285,450 Bank charge
50,891 32,350
Licence & Renewal
40,063 13,950 Depreciation (Annexure- A)
1,048,161 662,980
Audit Fee
402,500 402,500 Legal & Professional Fee
220,150 220,150
Papers & Periodicals
55,240 35,459 33,429,832 29,849,604
19.00 Selling & distribution Expenses
The break-up of the amount is given below:
Salary and Allowance
5,759,150 5,465,240
Transportation
2,986,680 2,147,850 Advertisement & Publicity
2,302,365 2,204,580
Carriage Outwards
1,649,925 1,541,260 Warehouse rent
1,355,040 735,360
Depreciation (Annexure- A)
963,134 712,078 Sales promotion
6,463,345 5,214,780
21,479,639 18,021,148
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20.00 Other non-operating income / (loss)
The break-up of the amount is given below:
Wastage sales
121,600 452,119
Interest on FDR
4,250,000 314,384 Bank Interest
31,029 52,101
Profit/(Loss) on Sale of fixed assets
(3,512,562) - 890,067 818,604
21.00 Current Tax
The break-up of the amount is given below:
Profit before tax as per accounts (Excluding others income) 78,076,576 81,597,462 Other Income
4,402,629 -
Gain on sales of Fixed Assets as per Tax base 2,705,084 - Accounting depreciation
19,940,498 9,389,884
Tax base depreciation
(56,969,753) (72,143,407) Taxable profit
48,155,034 18,843,939
Current Tax @ 35%
16,854,262 6,595,379 22.00 Earnings Per Share
The break-up of the amount is given below:
Net Income after tax for the year
51,328,318 53,038,350
Weighted Average number of ordinary shares outstanding 50,000,000 24,915,068 Earnings per share (Basic)
1.03 2.13
Weighted Average Number of Shares Weight 2019 2018 50,000,000 Shares 1 50,000,000 - 22,000,000 Shares 1 - 22,000,000 28,000,000 Shares 0.104 - 2,915,068 Weighted Average Number of Shares
50,000,000 24,915,068
23.00 Net Asset Value (NAV) Per Share
Total Assets
850,466,789 783,767,784
Less: Non-Current Liabilities+Current Liabilities 132,974,690 117,604,003 Net Assets
717,492,099 666,163,781
Total Number of Shares
50,000,000 50,000,000 14.35 13.32
24.00 Net operating cash flows per share (NOCFPS)
Net Cash generate from Operating activities 8,742,862 2,208,548 Total Number of Shares
50,000,000 24,915,068
0.17 0.09
25.00 Reconciliation of Net Profit with Cash Flows from Operating Activities:
Profit before Tax
78,966,643 81,597,462 Adjustment for Non Cash & Non Operating Expanses
Depreciation on property, plant and equipment 19,940,498 9,389,884 Capital Loss for Sale of Machinery
3,512,562 -
102,419,703 90,987,346 Adjustment for Current Assets & Liabilities
Increase in Trade & Other Receivables (24,184,120) (28,601,615) Increase in Inventories
(40,917,645) (30,923,450)
Increase in Advance, Deposit & Prepayments (8,045,171) (14,995,581) Decrease in Trade Payables
(12,398,018) (10,426,675)
Decrease in Liability for contribution to W.P.P.F (131,541) - Income Tax Paid (Import)
(8,262,268) (8,451,221)
Increase in Liabilities for Expenses
261,921 539,871 Increase in Liability for contribution to W.P.P.F - 4,079,873
8,742,862 2,208,548
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26.00 Related parties disclosure
The company carried out a number of transactions with related parties. The following are the related parties transactions of the BD Paints Ltd has been disclosed as required by IAS 24 Related Party Disclosures.
(a) Short term employee benefits:
(i) Remuneration
Name Designation Nature of Transaction Amount in (BDT) Amount in (BDT)
2018-2019 2017-2018
Md. Bellal Khan Managing Director Remuneration 1,200,000 1,200,000
Md. Bellal Khan Managing Director Remuneration Payable 100,000 100,000
(ii) Board meeting fee
Name Designation
Nature of Transaction
2018-2019 2017-2018 Amount in (BDT) Amount in (BDT)
Held meeting
Attend meeting
Held meeting
Attend meeting
2018-2019 2017-2018
Aysha siddika Chairman
Board Meeting fee
12 12 12 12 60,000 60,000
Md. Bellal Khan
Managing Director
12 12 12 12 60,000 60,000
Jannatul Ferdous Mim
Nominee Director (Sabila Sea Food Ltd.)
12 7 12 3 35,000 15,000
Maruful Islam Turan Nominee
Director (IBP Agrobet Ltd.)
12 7 12 3 35,000 15,000
Akhfa Nur Ex-Director 12 0 12 5 - 25,000
(b) Post-employee benefits : Nil
(c) Other long term benefits : Nil
(d) Termination benefits : Nil
(e) Share-based payment : Nil
(f) Others : Nil
27.00 Disclosure as per Schedule XI,Part II, Para 3,4,7 & 8 of the Companies Act.1994 27.01 Schedule of Note 5 Para 3 :- Employees Breakup of the expenditure incurred on employees:
Particulars 2018-2019 2017-2018
Receipt aggregate salary throughout the financial year whose salary was not less then Tk. 3000. 180 172
Receipt aggregate salary throughout the financial year whose salary was less then Tk. 3000. - -
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27.02 Schedule of Para 3: (a): Sales Revenue
Particulars 2018-2019 2017-2018
Sales Revenue in BDT. 364,517,070 339,342,101
Sales Revenue in Quantity (M.Ton) 2,033.52 2,181.95 b) No Commission paid to selling agents during the year. c) No brokerage and discount paid on sales during the year. d)(i): Raw Materials Consumed
Particulars 2018-2019 2017-2018
Raw Materials (Value in BDT) 170,518,561 151,811,060
Raw Materials Quantity (Kg) 1,718,071.14 1,579,555.30 (d)(ii): Finished Goods
Particulars 2018-2019 2017-2018
Opening Quantity (M.Ton) 439.49 211.14
Production Quantity (M.Ton) 2,016.01 2,410.31
Clossing Quantity (M.Ton) 421.98 439.49 27.03 Para 4:
The following payments provided or made during the financial year to the directors, including managing director, the managing agent or managers, if any, by the company.
Particulars 2018-2019 2017-2018
a. Managerial Remuneration paid or payable during the year to the directors, including managing directors, a managing agent or manager.
1,200,000 1,200,000
b. Expenses reimbursed to Managing Agent Nil Nil
c. Commission or Remuneration payable separately to a managing agent or his associate Nil Nil
d. Commission received or receivable by the managing agent or his associate as selling or buying agent of other concerns in respect of contracts entered into by such concerns with the company.
Nil Nil
e. The money value of the contracts for the sale or purchase of goods and materials or supply of services, entered into by the company with the managing agent or his associate during the financial year.
Nil Nil
f. Any other perquisite or benefits in cash or in kind stating, approximate money value where applicable. Nil Nil
g. Other allowances and commission including guarantee commission Nil Nil
h Pensions etc. Nil Nil (i) Pensions Nil Nil (ii) Gratuities Nil Nil (iii) Payments from a provident funds, in excess of own subscription and interest thereon Nil Nil (iv) Compensation for loss of office Nil Nil
Page: 235
(v) Consideration in connection with retirement from office. Nil Nil
27.04 Para 7: Capacity Utilization The production capacity and utilization of its are as follows:
Particulars 2018-2019 2017-2018
Quantity in M.Ton
Installed Capacity 5,000.00 5,000.00
Actual Production 2,016.01 2,410.31
Capacity Utilization (%) 40.32 48.21 27.05 Para 8
(a) During the period 1st July 2018 to 30th June 2019 total value of import calculated on CIF basis.
Particulars Amount In TK Amount In TK
Import of raw Materials 187,959,013 168,826,835
Components and Spare parts - -
Capitals goods - -
Total: 187,959,013 168,826,835
(b) Company did not any expenditure in foreign currency during the financial year on account of royalty, know-how, professional consultation fees, interest and other matters.
(c) Value of all raw materials, spare parts and components consumed during the financial year and the value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption:
Particulars
2019
Total Consumption
Import Taka % of Consumption Local Taka % of
Consumption
Raw Materials Consumed 170,518,561 154,495,958 90.60% 16,022,603 9.4%
(d) The amount remitted during the year in foreign currencies on account of dividends. Nil Nil (e) Earnings in foreign exchange classified under the following heads, namely-
(i) Export of goods calculated on F.O.B basis; Nil Nil (ii) Royalty, know-how, professional and consultation feed; Nil Nil (iii) Interest and dividend; Nil Nil (iv) Other income, indicating the nature thereof. Nil Nil
Page: 236
BD PAINTS LIMITED Property, Plant and Equipment
As at June 30,2019 Annexure: A
Particulars
Cost Rate Depreciation Written down
Balance as on
Addition during
Adjustment during
Balance as on
of Balance as
on Charged during
Adjustment during
Balance as on
value as on
01-Jul-18 the year the year 30-Jun-19 Dep. 01-Jul-18 the year the year 30-Jun-19 30-Jun-19
Balance as at June 30, 2019 452,947,765 8,229,600 13,329,804 447,847,562 35,068,141 19,940,498 3,017,241 51,991,397 395,856,165
Balance as at June 30, 2018 176,249,380 276,698,385 - 452,947,765 25,678,257 9,389,884 - 35,068,141 417,879,624 Allocation of Depreciation Total 1st querter 2nd querter 3rd querter
Factory 17,929,203 4,510,520 4,510,520 9,128,533
Administration 1,048,161 247,207 247,207 501,440
Selling & distribution 963,134 240,784 240,784 481,567
19,940,498 4,998,510 4,998,510 10,111,540
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BD PAINTS LIMITED List of Trade Receivables
As at June 30, 2019 Annexure- B
S/L No Name of Customers Address Amount in TK
2019 2018
1 NUR Varities Store Kalir Bazar, Madaripur. 4,592,085 4,278,650
28 A.P.E 18.2 Litre 428 12.8 5,457 389 12.75 4,960 Sub Total 213,096 193,719
Grand Total 9,896,350 8,025,480
(b) Information as is required under section 186 of the †Kv¤úvwb AvBb, 1994 relating to holding company;
This information is not applicable for BDPL.
Page: 249
(c) Selected ratios as specified in Annexure-D;
Auditor's certificate regarding calculation of EPS and Ratios This is to certify that BD Paints Limited. has maintained the following ratios as computed on the basis of the audited financial statements for the year ended June 30, 2019, 2018, 2017, 2016 and 2015.
(ii) NOCFPS to EPS Ratio Net Operating Cash Flow per Share/EPS
0.17 0.17
0.09 0.04
1.62 0.66
0.66 0.47
0.45 0.19
1.03 2.13 2.43 1.40 2.38
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Comparison ratios with the industry average ratios of the same periods:
BD PAINTS LIMITED Industry
Average*
Remark/Explanation
Particulars 30-Jun-19 31-Mar-19
Ratio Ratio
I. Liquidity Ratios:
(i) Current Ratio 5.22 2.23 BDPL's Current Ratio is better than industry average current ratio. (ii) Quick Ratio 2.74 1.39 BDPL'sRatio is better than industry average ratio. II. Operating Efficiency Ratios:
(i) Accounts Receivable Turnover Ratio
2.86 10.93 BDPL's Ratio is not satisfactory with the industry average ratio. (ii) Inventory Turnover Ratio 1.71 4.64 BDPL's Ratio is not satisfactory with the industry average ratio. (iii) Asset Turnover Ratio 0.45 1.80 BDPL's Ratio is not satisfactory with the industry average ratio. III. Profitability Ratios:
(i) Gross Margin Ratio 37.57% 44.08% BDPL's Ratio is satisfactory with the average industry ratio.
(ii) Operating Profit Ratio 22.50% 15.46% BDPL'sRatio is better than industry average ratio.
(iii) Net Profit Ratio 14.08% 11.00% BDPL'sRatio is better than industry average ratio.
(iv) Return on Assets Ratio 6.28% 19.85% BDPL's Ratio is not satisfactory with the industry average ratio.
(v) Return on Equity Ratio 7.42% 28.72% BDPL's Ratio is not satisfactory with the industry average ratio.
(vi) Earnings Per Share (EPS) 1.03 42.07 BDPL's Ratio is satisfactory with the industry average ratio.
(vii) Earnings before interest, taxes, depreciation and amortization (EBITDA) margin
27.97% 17.48% BDPL'sRatio is better than industry average ratio.
IV. Solvency Ratios:
(i) Debt to Total Assets Ratio 0.00 0.00 BDPL's Ratio is Null as the company has no long term & short term debt. (ii) Debt to Equity Ratio 0.00 0.00 BDPL's Ratio is Null as the company has no long term & short term debt. (iii) Times Interest Earned Ratio 0.00 365.40 BDPL's Ratio is Null as the company has no financial expenses. (iV) Debt Service Coverage Ratio 0.00 Not Available BDPL's Ratio is Null as the company has no long term & short term debt.
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V. Cash Flow Ratios:
(i) Net Operating Cash Flow per Share (NOCFPS)
0.17 51.45 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 0.17 1.22 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. *The Industry average ratio is calculated through using the ratio of a listed similar company namely Berger Paints Bangladesh Limited for the year ended March 31, 2019.
BD PAINTS LIMITED Industry
Average*
Remark/Explanation
Particulars 30-Jun-18 31-Mar-18
Ratio Ratio
I. Liquidity Ratios:
(i) Current Ratio 4.71 2.02 BDPL's Current Ratio is better than industry average current ratio. (ii) Quick Ratio 2.82 1.04 BDPL'sRatio is better than industry average ratio. II. Operating Efficiency Ratios:
(i) Accounts Receivable Turnover Ratio
3.36 12.34 BDPL's Ratio is not satisfactory with the industry average ratio. (ii) Inventory Turnover Ratio 2.13 4.38 BDPL's Ratio is not satisfactory with the industry average ratio. (iii) Asset Turnover Ratio 0.56 1.89 BDPL's Ratio is not satisfactory with the industry average ratio. III. Profitability Ratios:
(i) Gross Margin Ratio 39.11% 44.62% BDPL's Ratio is satisfactory with the average industry ratio. (ii) Operating Profit Ratio 25.01% 14.11% BDPL'sRatio is better than industry average ratio. (iii) Net Profit Ratio 15.63% 10.13% BDPL'sRatio is better than industry average ratio. (iv) Return on Assets Ratio 8.75% 19.16% BDPL's Ratio is not satisfactory with the industry average ratio. (v) Return on Equity Ratio 10.62% 29.25% BDPL's Ratio is not satisfactory with the industry average ratio. (vi) Earnings Per Share (EPS) 2.13 7.20 BDPL's Ratio is satisfactory with the industry average ratio. (vii) Earnings before interest, taxes, depreciation and amortization (EBITDA) margin
27.77% 16.50% BDPL'sRatio is better than industry average ratio.
IV. Solvency Ratios:
(i) Debt to Total Assets Ratio 0.00 0.0059 BDPL's Ratio is Null as the company has no long term & short term debt. (ii) Debt to Equity Ratio 0.00 0.0087 BDPL's Ratio is Null as the company has no long term & short term debt.
(iii) Times Interest Earned Ratio 0.00 328.14 BDPL's Ratio is Null as the company has no financial expenses. (iV) Debt Service Coverage Ratio 0.00 Not Available BDPL's Ratio is Null as the company has no long term & short term debt.
Page: 253
V. Cash Flow Ratios:
(i) Net Operating Cash Flow per Share (NOCFPS)
0.09 0.06 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 0.04 0.001 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. *The Industry average ratio is calculated through using the ratio of a listed similar company namely Berger Paints Bangladesh Limited for the year ended March 31, 2018.
BD PAINTS LIMITED Industry
Average*
Remark/ Explanation
Particulars 30-Jun-17 31-Mar-17
Ratio Ratio
I. Liquidity Ratios:
(i) Current Ratio 2.82 1.87 BDPL's Current Ratio is better than industry average current ratio. (ii) Quick Ratio 1.60 1.09 BDPL'sRatio is better than industry average ratio. II. Operating Efficiency Ratios:
(i) Accounts Receivable Turnover Ratio
4.36 14.40 BDPL's Ratio is not satisfactory with the industry average ratio.
(ii) Inventory Turnover Ratio 3.10 4.38 BDPL's Ratio is not satisfactory with the industry average ratio. (iii) Asset Turnover Ratio 0.85 1.97 BDPL'sRatio is satisfactory with the industry average ratio. III. Profitability Ratios:
(i) Gross Margin Ratio 40.08% 48.60% BDPL's Ratio is satisfactory with the industry average ratio. (ii) Operating Profit Ratio 25.58% 16.98% BDPL'sRatio is better than industry average ratio. (iii) Net Profit Ratio 16.63% 12.37% BDPL'sRatio is better than industry average ratio. (iv) Return on Assets Ratio 14.11% 24.42% BDPL's Ratio is not satisfactory with the industry average ratio. (v) Return on Equity Ratio 17.45% 38.47% BDPL's Ratio is not satisfactory with the industry average ratio. (vi) Earnings Per Share (EPS) 2.43 7.80 BDPL's Ratio is satisfactory with the industry average ratio. (vii) Earnings before interest, taxes, depreciation and amortization (EBITDA) margin
27.68% 19.23% BDPL's Ratio is satisfactory with the industry average ratio.
IV. Solvency Ratios:
(i) Debt to Total Assets Ratio 0.00 0.0007 BDPL's Ratio is Null as the company has no long term & short term debt. (ii) Debt to Equity Ratio 0.00 0.0010 BDPL's Ratio is Null as the company has no long term & short term debt. (iii) Times Interest Earned Ratio 0.00 507.94 BDPL's Ratio is Null as the company has no financial expenses. (iV) Debt Service Coverage Ratio 0.00 Not Available BDPL's Ratio is Null as the company has no long term & short term debt.
Page: 254
V. Cash Flow Ratios:
(i) Net Operating Cash Flow per Share (NOCFPS)
1.62 0.08 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 0.66 0.001 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. *The Industry average ratio is calculated through using the ratio of a listed similar company namely Berger Paints Bangladesh Limited for the year ended March 31, 2017.
BD PAINTS LIMITED Industry
Average*
Remark/ Explanation
Particulars 30-Jun-16 2016
Ratio Ratio
I. Liquidity Ratios:
(i) Current Ratio 3.25 0.00
(ii) Quick Ratio 1.81 0.00 II. Operating Efficiency Ratios:
(i) Accounts Receivable Turnover Ratio
4.25 0.00
(ii) Inventory Turnover Ratio 3.38 0.00
(iii) Asset Turnover Ratio 0.67 0.00 III. Profitability Ratios:
(i) Gross Margin Ratio 40.03% 0.00 *In the Industry there has only one listed similar company namely Berger Paints Bangladesh Limited but there has no accounts available for the year 2016. The company has done the accounts for the year ended 31st December, 2015 and for the period ended 31st March, 2017 which is for fifteen months.
(ii) Operating Profit Ratio 22.77% 0.00
(iii) Net Profit Ratio 14.80% 0.00
(iv) Return on Assets Ratio 9.98% 0.00
(v) Return on Equity Ratio 11.66% 0.00
(vi) Earnings Per Share (EPS) 1.40 0.00
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(vii) Earnings before interest, taxes, depreciation and amortization (EBITDA) margin
25.67% 0.00
IV. Solvency Ratios:
(i) Debt to Total Assets Ratio 0.00 0.00
(ii) Debt to Equity Ratio 0.00 0.00
(iii) Times Interest Earned Ratio 0.00 0.00
(iV) Debt Service Coverage Ratio 0.00 0.00 V. Cash Flow Ratios:
(i) Net Operating Cash Flow per Share (NOCFPS)
0.66 0.00
(ii) NOCFPS to EPS Ratio 0.47 0.00
BD PAINTS LIMITED Industry
Average*
Remark/ Explanation
Particulars 30-Jun-15 31-Dec-15
Ratio Ratio
I. Liquidity Ratios:
(i) Current Ratio 3.29 1.83 BDPL's Current Ratio is better than industry average current ratio. (ii) Quick Ratio 1.89 1.83 BDPL'sRatio is better than industry average ratio. II. Operating Efficiency Ratios:
(i) Accounts Receivable Turnover Ratio
5.22 16.89 BDPL's Ratio is not satisfactory with the industry average ratio.
(ii) Inventory Turnover Ratio 3.74 5.43 BDPL's Ratio is not satisfactory with the industry average ratio.
(iii) Asset Turnover Ratio 0.68 2.55 BDPL's Ratio is not satisfactory with the industry average ratio. III. Profitability Ratios:
(i) Gross Margin Ratio 39.85% 42.45% BDPL's Ratio is satisfactory with the industry average ratio. (ii) Operating Profit Ratio 22.83% 15.82% BDPL'sRatio is better than industry average ratio.
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(iii) Net Profit Ratio 14.84% 11.42% BDPL'sRatio is better than industry average ratio. (iv) Return on Assets Ratio 10.05% 29.14% BDPL's Ratio is not satisfactory with the industry average ratio.
(v) Return on Equity Ratio 11.59% 46.21% BDPL's Ratio is not satisfactory with the industry average ratio. (vi) Earnings Per Share (EPS) 2.38 0.07 BDPL'sRatio is better than industry average ratio. (vii) Earnings before interest, taxes, depreciation and amortization (EBITDA) margin
24.97% 17.63% BDPL'sRatio is better than industry average ratio.
IV. Solvency Ratios:
(i) Debt to Total Assets Ratio 0.00 0.0001 BDPL's Ratio is Null as the company has no long term & short term debt. (ii) Debt to Equity Ratio 0.00 0.0002 BDPL's Ratio is Null as the company has no long term & short term debt.
(iii) Times Interest Earned Ratio 0.00 262.25 BDPL's Ratio is Null as the company has no financial expenses. (iV) Debt Service Coverage Ratio 0.00 Not Available BDPL's Ratio is Null as the company has no long term & short term debt. V. Cash Flow Ratios:
(i) Net Operating Cash Flow per Share (NOCFPS)
0.45 0.11 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 0.19 0.002 BDPL's Ratio is satisfactory as Net Operating Cash Flow is positive. *The Industry average ratio is calculated through using the ratio of a listed similar company namely Berger Paints Bangladesh Limited for the year ended December 31, 2015
Page: 257
(d) Auditors report under Section 135(1), Paragraph 24(1) of Part II of Schedule III of the †Kv¤úvwb AvBb, 1994. The report shall include comparative income
statements and balance sheet and aforementioned ratios for immediate preceding five accounting years of the issuer. If the issuer has been in commercial operation for less than five years, the above mentioned inclusion and submission will have to be made for the period since commercial operation;
Auditors’ report Under Section-135 (1) and Para-24(1) of Part-II of Schedule-III of the Companies Act 1994 We have examined the Financial Statements of BD Paints Limited for the year ended June 30, 2019, 2018, 2017, 2016 and 2015 which were audited. In pursuance of Section-135 (1) and Para-24 (1) of Part-II of Schedule-III of the Companies Act 1994, our report is as under: A) Statements of Assets and Liabilities of the company is as under:
D) BD Paints Limited was incorporated in Bangladesh as a Private Limited Company with the
issuance of Certificate of incorporation bearing Reg. No. C-115399/14 dated on April 17, 2014 by the Registrar of Joint Stock Companies & Firms. BDPL converted into public Limited Company on July 22, 2014.
E) The Company started its commercial operation in April 17, 2014.
F) The Company has no subsidiary as on the balance sheet date.
G) No proceeds or part of the proceeds of the issue of shares would be applied directly by the company in the purchase of any business.
H) The Company did not prepare any statement of accounts for the period subsequent to June 30, 2019.
Deferred Tax Liability 50,725,779 5.96% Current Liabilities 82,248,911 9.67%
Trade and Other Payables 7,703,304 0.91%
Provision for WPPF 3,948,332 0.46%
Liabilities for Expenses 4,211,924 0.50%
Provision for Income Tax 66,385,351 7.81%
Total Equity and Liabilities 850,466,789 100%
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BD PAINTS LIMITED Statement of Profit or Loss and other Comprehensive Income
For the year ended June 30, 2019
Particulars Year ended
June 30, 2019
Percentage on Total Turnover
Grand Percentage
Sales Revenue 364,517,070 100%
Sales Revenue 364,517,070 100.00%
Less: Cost of Goods Sold 227,582,691 62.43%
Materials Consumed 193,066,271 52.96%
Manufacturing Expenses 40,152,190 11.02%
Opening Work-In-Process 18,025,470
Closing Work-In-Process (13,065,480)
Cost of Goods Manufacture 238,178,451 65.34%
Opening Finished Goods 39,258,760
Closing Finished Goods (49,854,520)
Gross Profit 136,934,379 37.57%
Operating Expenses 54,909,471 15.06%
Administrative Expenses 33,429,832 9.17%
Selling & distribution Expenses 21,479,639 5.89%
Operating Income 82,024,908 22.50%
Other non-operating income / (loss) 890,067 0.24%
Profit before Contribution to WPPF & Welfare Fund 82,914,975 22.75%
Less: Contribution to WPPF & Welfare Fund 3,948,332 1.08%
Profit before Tax 78,966,644 21.66%
Less: Income Tax Expenses 27,638,326 7.58%
Current Tax 16,854,262 4.62%
Deferred Tax 10,784,063 2.96%
Net Profit after Tax 51,328,318 14.08%
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(f) Earnings Per Share (EPS) on fully diluted basis (with the total existing number of shares) in addition to the weighted average number of shares basis. Future projected Net Income should not be considered while calculating the weighted average EPS;
As per audited financial statement for the year ended June 30, 2019
Particulars Amount in Taka
Net Profit after Tax 51,328,318
Total existing number of Share 50,000,000
Weighted average number of Share 50,000,000
Earnings per Share (EPS)-Fully Diluted Basis 1.03
Earnings per Share (EPS)-Weighted average no. of Share basis 1.03
(g) All extra-ordinary income or non-recurring income coming from other than core operations
should be shown separately while showing the Net Profit as well as the Earnings Per Share;
As per audited financial statement for the year ended June 30, 2019
Particulars Amount in Taka
Profit before Contribution to WPPF & Welfare Fund 82,914,975
Less: Contribution to WPPF & Welfare Fund 3,948,332
Less: Other Non-Operating Income/(Loss) 890,067
Net Profit before Tax except Other Non-Operating Income 78,076,576
Less: Income Tax Expenses 27,638,325
Net Profit after Tax 50,438,251
No. of shares 50,000,000
Earnings per Share (EPS) 1.01
(h) Quarterly or half-yearly EPS should not be annualized while calculating the EPS;
This information is not applicable for BDPL.
(i) Net asset value (with and without considering revaluation surplus or reserve) per unit of the securities being offered at the date of the latest audited statement of financial position. The Company has not revalued any of its assets.
As per audited financial statement for the year ended June 30, 2019
Particulars Amount in Taka
Share Capital 500,000,000
Retained Earnings 217,492,099
Total Shareholders' Equity (without revaluation reserve) 717,492,099
Total Number of Ordinary Share 50,000,000
Net Assets Value (NAV) (without revaluation reserve) at BDT 10.00 per share 14.35
(j) The Commission may require the issuer to re-audit the audited financial statements, if any
deficiency or anomaly is found in the financial statements. In such a case, cost of audit should be borne by the concerned issuer. This information is not applicable for BDPL.
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(k) Following statements for the last five years or any shorter period of commercial operation certified by the auditors:-
(i) Statement of long term and short term borrowings including borrowing from related
party or connected persons with rate of interest and interest paid or accrued;
Certification on statement of long term and short term borrowings including borrowing from related party or connected persons with rate of interest and interest paid or accrued of BD Paints Limited. After due verification, we certify that BD Paints Limited did not take any interest bearing long term and short term loan including borrowing from related party or connected persons and therefore no interest paid or accrued from 17 April 2014 to 30 June 2019.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(ii) Statement of principal terms of secured loans and assets on which charge have been
created against those loans with names of lenders, purpose, sanctioned amount, rate of interest, primary security, collateral or other security, re-payment schedule and status;
Certification on statement of principal terms of secured loans and assets on which charge have been created against those loans with names of lenders, purpose, sanctioned amount, rate of interest, primary security, collateral or other security, re-payment schedule and status of BD Paints Limited.
After due verification, we certify that BD Paints Limited did not take any secured loan from any lender including banks and non-banking financial institution and no charge has been created on any assets from 17 April 2014 to 30 June 2019.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(iii) Statement of unsecured loans with terms and conditions;
Certification on statement of unsecured loans with terms and conditions of BD Paints Limited.
This is to certify that BD Paints Limited did not take any unsecured loan from 17 April 2014 to 30 June 2019. from any institution neither any person.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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(iv) Statement of inventories showing amount of raw material, packing material, stock-in-process and finished goods, consumable items, store and spares parts, inventory of trading goods etc.;
Certification on statement of inventories showing amount of raw material, packing material, stock-in-process and finished goods, consumable items, store and spares parts, inventory of trading goods etc. of BD Paints Limited.
After due verification, we certify that the statement of inventories showing amount of raw material, packing material, stock-in-process and finished goods, consumable items, store & spares parts, inventory of trading goods etc. of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Items Amount in (BDT)
30 June 2019
30 June 2018
30 June 2017
30 June 2016
30 June 2015
Raw material 80,039,265 46,541,560 28,329,790 12,678,355 7,152,468
Packing material 9,896,350 8,025,480 5,425,630 1,340,864 1,214,560
Total 153,590,365 112,672,720 81,749,270 42,620,517 31,237,970
Sd/-
Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(v) Statement of trade receivables showing receivable from related party and connected persons;
Certification on statement of trade receivables showing receivable from related party and connected persons of BD Paints Limited.
After due verification, we certify that the statement of trade receivables showing receivable from related party and connected persons of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Total 139,294,014 115,109,894 86,822,663 60,642,363 37,219,120
Sd/-
Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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(vi) Statement of any loan given by the issuer including loans to related party or connected persons with rate of interest and interest realized or accrued;
Certification on statement of any loan given by the BD Paints Limited including loans to related party or connected persons with rate of interest and interest realized or accrued.
This is to certify that BD Paints Limited did not give any loan to any related party or connected persons from 17 April 2014 to 30 June 2019.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(vii) Statement of other income showing interest income, dividend income, discount received,
other non operating income;
Certification on statement of other income showing interest income, dividend income, discount received, other non operating income of BD Paints Limited.
After due verification, we certify that the statement of other income showing interest income, dividend income, discount received and other non operating income of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Other non operating income 121,600 452,119 24,800 - -
Total 4,402,629 818,604 24,800 - -
Sd/-
Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(viii) Statement of turnover showing separately in cash and through banking channel;
Certification on statement of turnover showing separately in cash and through banking channel of BD Paints Limited.
After due verification, we certify that the statement of turnover showing through cash, banking channel and credit sales of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
In cash 2,530,530 2,156,890 2,512,360 2,215,650 2,015,480
Through banking channel 222,692,526 222,075,317 232,210,757 145,298,771 155,112,369
Credit sale 139,294,014 115,109,894 86,822,663 60,642,363 37,219,120
Total 364,517,070 339,342,101 321,545,780 208,156,784 194,346,969
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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(ix) Statement of related party transaction;
Certification on statement of related party transactions of BD Paints Limited.
After due verification, we certify that the status of related party transactions of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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(x) Reconciliation of business income shown in tax return with net income shown in audited financial statements;
Certification regarding reconciliation of business income shown in tax return with net income shown in audited financial statements of BD Paints Limited.
After due verification, we certify that the status of reconciliation of business income shown in tax return with net income shown in audited financial statements of BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Less: Tax base depreciation (23,819,219) (18,824,910) (25,681,612)
Income shown in tax return 65,209,330 34,609,491 22,854,638
Sd/-
Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(xi) Confirmation that all receipts and payments of the issuer above Tk.5,00,000/- (five lac) were made through banking channel;
Certification on confirmation that all receipts and payments of the BD Paints Limited above Tk. 500,000.00 (five lac) were made through banking channel. This is to certify that all receipts and payments of BD Paints Limited above Tk. 500,000.00 (five lac) were made through banking channel from 17 April 2014 to 30 June 2019.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
(xii) Confirmation that Bank Statements of the issuer are in conformity with its books of accounts;
Certification on confirmation that bank statements of the BD Paints Limited are in conformity with its books of accounts.
This is to certify that the bank statements of BD Paints Limited from 17 April 2014 to 30 June 2019 were in conformity with its books of accounts.
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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(xiii) Statement of payment status of TAX, VAT and other taxes or duties;
Certification on statement of payment status of TAX, VAT and other taxes or duties of BD Paints Limited.
After due verification, we certify that the status of Tax, VAT and other taxes or duties paid by BD Paints Limited from 17 April 2014 to 30 June 2019 was as follows:
Total 63,718,604 59,370,368 56,517,224 31,229,923 29,254,405
Sd/- Place: Dhaka FAMES & R Date: October 26, 2019 Chartered Accountants
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Auditor’s additional disclosure relating to the financial statements for the year ended 30th June 2019
of BD Paints Limited
1) Details party wise schedule of trade and other receivables are shown in note 6 and subsequent
realization as on audit singing date; Response to the above: Party wise subsequent collection of Trade receivables as shown in note no. 6.00 to the financial statements as at 30th June 2019as have been collected by 20th October 2019are as follows:
Trade and Other Receivables
Sl Name of the receivables
Address
Amount in TK
30 June, 2019
Collection up to 20th October,
2019
Balance as on 20th October,
2019
1 NUR Varities Store Kalir Bazar, Madaripur. 4,592,085 2,066,438 2,525,647
Radagongbazar, NearAgrani bank, Raypura, Norshindi
1,522,500 685,125 837,375
45 Ataur Hardware Polash Obda Road Norshindi
1,795,600 808,020 987,580
46 M/S Ismail Hardware Store
157 saleknaiyeb market, Vela nogrnorshindi
1,995,400 897,930 1,097,470
TOTAL:
139,294,014 62,682,306 76,611,708
2) Weather you have obtained copies of balance confirmation against credit sales. If not please
send the same to customers/buyers and incorporate the same in the report; Response to the above: We have sent balance confirmation letter to all 46parties regarding trade receivables. Forty One (41) customers out of the forty six (46) confirmed their balances. Rest of them namely: Anis Enterprise, Lamiya Enterprise, Shikha Enterprise, Morium Hardware and Real Metalhave not answered in writing but verbally confirmed the balance.
3) Provide description for advance against warehouse rent of Tk. 150,00,000 including location &
size of the warehouse. Name of the lessor, period, and other terms of the rent. Also mention whether this warehouse has been rented from any related party or not. Response to the above:
Name of Lessor Loaction Size Rent per month Period
Md. Mamun Or Rashid Sataish, Tongi, Gazipur
15320 sft 122,560/- 5 years
The warehouse has been rented from a third party. There was no relation to related party as per BAS-24.
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4) Weather you have Physically verified cash and cash equivalents Tk. 85,575,894 as on 30 June 2019; Response to the above: We have physically verified cash and cash equivalents as on 30 June, 2019.
5) Details calculation of deferred Tax liabilities as shown in note 11 to the financial statements prepared for the year ended 30 June 2019; Response to the above: Details calculation of deferred Tax liabilities are as follows:
Particulars Amount
Carrying Value of PPE 395,856,165
As Tax Base Value of PPE (250,925,367)
Temporary Difference 144,930,798
Tax rate 35%
Deferred Tax Liabilitiesas on 30 June, 2019 50,725,779
6) Weather the company has formed disbursed and invested WPPF as per the provision of
Bangladesh labourAct-2006 (amendment - 2013). Response to the above: The BD Paints Limited have established Workers Profit participation fund and welfare fund as per section 234 of Bangladesh LabourAct, 2006 (Amendment-2013). Company also constituted a board of trustees as per section 235.Subsequently the company opened a bank account in the name of BD Paints Ltd. (WPPF) in Mercantile Bank Limited, PragatiSarani Branch, Dhaka. In the year 2018-2019 company transferred tk. 4,079,873.00 to trustee account regarding WPPF and disbursement within the period.
7) Compliance of Para 59 of BAS-16 regarding charging deprecation on land development expenses. Response to the above: According to Para 59 of IAS-16 “If the cost of land includes the costs of site dismantlement, removal and restoration, that portion of the land asset is depreciated over the period of benefits obtained by incurring those costs. In some cases, the land itself may have a limited useful life, in which case it is depreciated in a manner that reflects the benefits to be derived from it.” Land development expenses of BD Paints Limited did not include any cost of site dismantlement, removal or restoration as there was no such requirement. Thus, no depreciation was considered on land development cost as included with ‘Land Development’ of BDPaints Limited. Land development expenses of BDPaints Limited which incurred and presented separately for the year ended June 30, 2018 Tk. 12,041,044 was for boundary wall, internal roads etc. which has been depreciated at the rate of 2.00%.
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8) Details calculation sheet of accounting base depreciation schedule for determining the charge of deprecation on addition during the last year ended 30 June, 2019. Response to the above: We submit herewith the details accounting base depreciation schedule &deprecation charge on addition assets during the year ended 30 June, 2019.Details are shown as follows:
Particulars
Cost Rate Depreciation
Written down value as on 30
June 2019
Opening Balance as on
1st July 2018
Addition during the
year
Adjustment during the
year
Closing Balance as on
30 June 2019
of Dep.
Opening
Balance as on 1st July
2018
Dep.
Charge on
addition
Dep. Charge on opening
balance
Total Dep. During the
year
Adjustment during the
year
Accumulated dep.
Land 2,199,760 - - 2,199,760 0% - -
- - - 2,199,760
Land development 12,041,044 - - 12,041,044 2% 80,274 - 239,215 239,215 - 319,489 11,721,555
Building & Civil Construction 71,619,202 - - 71,619,202 3% 690,160 - 2,127,871 2,127,871 - 2,818,031 68,801,171
9) Tax base calculation of depreciation schedule in details. Response to the above: We submit herewiththedetailstax base calculations of depreciation schedule are as follows:
Particulars
Cost Rate Depreciation Written down
Balance as on Addition during Adjustment during Balance as on of Balance as on Charged during Adjustment during Balance as on value as on
01-Jul-18 the year the year 30-Jun-19 Dep. 01-Jul-18 the year the year 30-Jun-19 30-Jun-19
Land 2,199,760 - - 2,199,760 0% - - - - 2,199,760
Land development 12,041,044 - - 12,041,044 5% 602,052 571,950 - 1,174,002 10,867,042
Building & Civil Construction 71,619,202 - - 71,619,202 20% 15,854,970 11,152,847 - 27,007,816 44,611,386
Balance as at June 30, 2019 452,947,765 8,229,600 13,329,804 447,847,562 149,187,330 56,969,753 9,234,888 196,922,195 250,925,367
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10) Whether the company has complied with the provision of the paragraph 20 of IAS-24; Response to the above: According to paragraph 20 of IAS 24 Related Party Disclosures “The classification of amounts payable to, and received from, related parties in the different categories as required in paragraph 19 is an extension of the disclosures requirement in IAS 1 presentation of Financial Statements for information to be presented either in the statement of financial position or in the notes. The categories are extended to provide a more comprehensive analysis of related party balances and apply to related party transactions.” The company has transaction with the key management personnel of the entity for purchase of land in the financial year 2014-2015 from the Directors and Sale of same Land to the Directors in the financial year 2016-2017. There was no payable to relatein the year 2014-2015 and no receivable from them in the year 2016-2017.
11) Detailed of capital work-in progress transferred to civil construction during the year ended on 30-06-2018. Response to the above: Details of capital work-in progress transferred to civil construction during the year ended on 30-06-2018were as follows:
Sl no Particulars Transferred date Amount
1 Building & Civil Construction 01.05.2018 62,049,644
Total 62,049,644
12) Detailed of advance to employees (note 7.00); and
Response to the above: Name wise details of advance to employees wereas follows;
Sl no Name Designation Department Amount
1 Liton Ahmed Accountant Admin 50,000
2 SisirMondol Manager Maintenances Admin 50,000
3 Mr. Dilip Kumar Q,C Manager Admin 50,000
4 MD. Mosharrof Engineer Factory 50,000
5 MD. AnowerHossain Security Factory 35,700
6 MonojGhosh Manager Operation Admin 50,000
7 AtiqurRahaman Manager Coordination Admin 50,000
8 RabbaniShekh Ass: Manager Admin 50,000
9 GolamRabbani Ass: Manager Admin 50,000
10 MD. DelwarHossain Manager HR Admin 50,000
11 LiakotHasan Ass: Manager HR Admin 50,000
12 Md. Sagir Ahmed Manager Admin Admin 50,000
13 Md. Salauddin Ass: Manager Admin Admin 50,000
14 Ashish Kumar Shaha Plant Manager Admin 50,000
15 BinoyKimarShaha Production Manager Admin 50,000
16 MD. Waliullah Logistic & Construction Admin 50,000
13) Detailed of warehouse rent including location, size (note 7.00). Response to the above: Details of warehouse rent including location, size are as follows:
CHAPTER (XXVII): CREDIT RATING REPORT As per Section 3 of Credit Ratings Companies Rules, 1996, no credit rating report is required by the Company. Moreover, as per Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015, the issuer/issue has been rated by a credit rating company registered with the Commission for book-building method only.
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CHAPTER (XXVIII): PUBLIC ISSUE APPLICATION PROCEDURE Step-1 (Applicant) 1. An applicant for public issue of securities shall submit application/buy instruction to the Stockbroker/
Merchant Banker where the applicant maintains customer account, within the cut-off date (i.e. the subscription closing date), which shall be the 25th (twenty fifth) working day from the date of publication of abridged version of prospectus.
2. The application/buy instruction may be submitted in prescribed paper or electronic form, which shall
contain the Customer ID, Name, BO Account Number, Number of Securities applied for, Total Amount and Category of the Applicant. At the same time:
a) Other than non-resident Bangladeshi (NRB) and Foreign applicants shall make the application
money and service charge available in respective customer account maintained with the Stockbroker/Merchant Banker. No margin facility, advance or deferred payment is permissible for this purpose. In case the application is made through a margin account, the application money shall be deposited separately and the Stockbroker/Merchant Banker shall keep the amount segregated from the margin account, which shall be refundable to the applicant, if become unsuccessful.
b) Non-resident Bangladeshi (NRB) and Foreign applicants shall submit bank drafts (FDD), issued in
favor of the Issuer for an amount equivalent to the application money, with their application to the concerned Stockbroker/Merchant Banker. A Non-resident Bangladeshi (NRB) and Foreign applicant may also submit a single draft against 02(two) applications made by him/her, i.e. one in his/her own name and the other jointly with another person. The draft (FDD) shall be issued by the Bank where the applicant maintains Foreign Currency account debiting the same account and provide the customer with a certificate mentioning the FC account number which has been debited to issue the FDD. The applicant shall also submit the certificate with their application. No banker shall issue more than two drafts from any Foreign Currency account for any public issue. At the same time, the applicant shall make the service charge available in respective customer account maintained with the Stockbroker/Merchant Banker.
c) Eligible investors shall submit application through the electronic subscription system of the
exchange(s) and deposit the full amount intended to subscribe by the method as determined by the exchange(s).
Step-2 (Intermediary)
3. The Stockbroker/Merchant Banker shall maintain a separate bank account only for this purpose namely “Public Issue Application Account”. The Stockbroker/Merchant Banker shall:
a) post the amount separately in the customer account (other than NRB and Foreign applicants),
and upon availability of fund, block the amount equivalent to the application money; b) accumulate all the application/buy instructions received up to the cut-off date, deposit the
amount in the “Public Issue Application Account” maintained with its bank within the first banking hour of next working day of the cut-off date;
c) instruct the banker to block the account for an amount equivalent to the aggregate application
money and to issue a certificate in this regard. 4. Banker of the Stockbroker/Merchant Banker shall block the account as requested for, issue a
certificate confirming the same and handover it to the respective Stockbroker/Merchant Banker. 5. For Non-resident Bangladeshi (NRB) and Foreign applicants, the Stockbroker/Merchant Banker shall
prepare a list containing the draft information against the respective applicant’s particulars.
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6. The Stockbroker/Merchant Banker shall prepare category-wise lists of the applicants containing Customer ID, Name, BO Account Number and Number of Securities applied for, and within 03 (three) working days from the cut-off date, send to the respective Exchange, the lists of applicants in electronic (text format with tilde ‘~’ separator) format, the certificate(s) issued by its banker, the drafts and certificates received from Non-resident Bangladeshi (NRB) and Foreign applicants and a copy of the list containing the draft information.
7. On the next working day, the Exchanges shall provide the Issuer with the information received from
the Stockbroker/Merchant Bankers, the drafts and certificates submitted by Non-resident Bangladeshi (NRB) and Foreign applicants and the list containing the draft information. Exchanges shall verify and preserve the bankers’ certificates in their custody.
8. The application/buy instructions shall be preserved by the Stockbroker/Merchant Bankers up to 6
months from listing of the securities with exchange. Step-3 (Issuer) 9. The Issuer shall prepare consolidated list of the applications and send the applicants’ BOIDs in
electronic (text) format in a CDROM to CDBL for verification. The Issuer shall post the consolidated list of applicants on its website and websites of the Exchanges. CDBL shall verify the BOIDs as to whether the BO accounts of the applicants are active or not.
10. On the next working day, CDBL shall provide the Issuer with an updated database of the applicants
containing BO Account Number, Name, Addresses, Parents Name, Joint Account and Bank Account information along with the verification report.
11. After receiving verification report and information from CDBL, the Issuer shall scrutinize the
applications, prepare category wise consolidated lists of valid and invalid applications and submit report of final status of subscription to the Commission and the Exchanges within 10 (ten) working days from the date of receiving information from the Exchanges.
12. The Issuer and the issue manager shall conduct category wise lottery with the valid applications
within 03 (three) working days from the date of reporting to the Commission and the Exchanges, if do not receive any observation from the Commission or the Exchanges.
13. The Issuer and issue manager shall arrange posting the lottery result on their websites within 06 (six)
hours and on the websites of the Commission and Exchanges within 12 (twelve) hours of lottery. 14. Within 02 (two) working days of conducting lottery, the Issuer shall:
a) send category wise lists of the successful and unsuccessful applicants in electronic (text format with tilde ‘~’ separator) format to the respective Exchange.
b) send category wise lists of unsuccessful applicants who are subject to penal provisions as per
conditions of the Consent Letter issued by the Commission in electronic (text format with tilde ‘~’ separator) format to the Commission and Exchanges mentioning the penalty amount against each applicant.
c) issue allotment letters in the names of successful applicants in electronic format with digital
signatures and send those to respective Exchange in electronic form. d) send consolidated allotment data (BOID and number of securities) in electronic text format in a
CDROM to CDBL to credit the allotted shares to the respective BO accounts.
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Step-4 (Intermediary) 15. On the next working day, Exchanges shall distribute the information and allotment letters to the
Stockbroker/Merchant Bankers concerned in electronic format and instruct them to:
a) remit the amount of successful (other than NRB and Foreign) applicants to the Issuer’s respective Escrow Account opened for subscription purpose, and unblock the amount of unsuccessful applicants;
b) send the penalty amount of other than NRB and Foreign applicants who are subject to penal
provisions to the Issuer’s respective Escrow Accounts along with a list and unblock the balance application money;
16. On the next working day of receiving the documents from the Exchanges, the Stockbrokers/Merchant
Banker shall request its banker to: a) release the amount blocked for unsuccessful (other than NRB and foreign) applicants; b) remit the aggregate amount of successful applicants and the penalty amount of unsuccessful applicants (other than NRB and foreign) who are subject to penal provisions to the respective ‘Escrow’ accounts of the Issuer opened for subscription purpose.
17. On the next working day of receiving request from the Stockbrokers/Merchant Bankers, their
bankers shall unblock the amount blocked in the account(s) and remit the amount as requested for to the Issuer’s ‘Escrow’ account.
18. Simultaneously, the stockbrokers/Merchant Bankers shall release the application money blocked in
the customer accounts; inform the successful applicants about allotment of securities and the unsuccessful applicants about releasing their blocked amounts and send documents to the Exchange evidencing details of the remittances made to the respective ‘Escrow’ accounts of the Issuer. The unblocked amounts of unsuccessful applicants shall be placed as per their instructions. The Stockbroker/Merchant Banker shall be entitled to recover the withdrawal charges, if any, from the applicant who wants to withdraw the application money, up to an amount of Tk. 5.00 (five) per withdrawal.
19. All drafts submitted by NRB or Foreign applicants shall be deposited in the Issuer’s respective
‘Escrow’ accounts and refund shall be made by the Issuer by refund warrants through concerned stockbroker or merchant banker or transfer to the applicant’s bank account (FC account which has been debited to apply by NRB or foreign applicants) through banking channel within 10 (ten) working days from the date of lottery.
Miscellaneous: 20. The Issuer, Issue Manager, Stockbrokers and Merchant Bankers shall ensure compliance of the above. 21. The bank drafts (FDD) shall be issued considering TT Clean exchange rate of Sonali Bank Ltd. on the
date of publication of abridged version of prospectus. 22. Amount deposited and blocked in the “Public Issue Application Account” shall not be withdrawn or
transferred during the blocking period. Amount deposited by the applicants shall not be used by the Stockbrokers/Merchant Bankers for any purpose other than public issue application.
23. The Issuer shall pay the costs related to data transmission, if claimed by the Exchange concerned up
to an amount of Tk. 2,00,000.00 (taka two lac) for a public issue. 24. The Stockbroker/Merchant Bankers shall be entitled to a service charge of Tk.5.00 (taka five) only
per application irrespective of the amount or category. The service charge shall be paid by the applicant at the time of submitting application.
25. The Stockbroker/Merchant Banker shall provide the Issuer with a statement of the remittance and
drafts sent.
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26. The Issuer shall accumulate the penalty amount recovered and send it to the Commission through a bank draft/payment order issued in favor of the Bangladesh Securities and Exchange Commission.
27. The concerned Exchange are authorized to settle any complaints and take necessary actions against
any Stockbroker/Merchant Banker in case of violation of any provision of the public issue application process with intimation to the Commission.
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All eligible Stock Brokers and Merchant Bankers shall receive the IPO Subscription. The IPO subscription money collected from successful applicants (other than NRB applicants) by the Stockbrokers/Merchant Bankers will be remitted to the Company’s STD-SME Account No. 1021350263517 with Eastern Bank Limited, Motijheel Branch, Dhaka-1000, Bangladesh for this purpose. The IPO subscription money collected from successful NRB applicants in US Dollar or UK Pound Sterling or EURO shall be deposited to three FC accounts opened by the Company for IPO purpose are as follows:
Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager.
BD PAINTS LIMITED
APPLICATION FOR PUBLIC ISSUE Date:
Name of applicant :
Client Code :
BO ID No. :
Category of applicant :
Name of the Company/Fund :
Number of Shares/Units : ….…………………. Shares of Tk. ……………… each
Total amount in Tk. :
Amount in word :
Mode of payment :
Cheque/Draft information :
Signature of Applicants
Signature of Authorized
Officer
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CHAPTER (XXIX): OTHERS
DECLARATION REGARDING COST AUDIT
This is to inform you that Ministry of Commerce in its Gazette dated 12th January, 2003 ordered 5 companies from power sector and 6 companies from jute sector would be under Cost Audit Compliance. Later on, 3rd December 2009 Ministry of Commerce issued Gazette by which 42 companies from Garments and Textiles sector, 12 companies from Pharmaceutical sector and all the companies involved in manufacturing of Chemical Fertilizer would be under Cost Audit Compliance. Since BD Paints Limited is not bracketed in above mentioned companies, Cost Audit by Cost and Management Accountants is not applicable for “BD Paints Limited”.
Sd/- Md. Bellal Khan Managing Director BD Paints Limited
Sd/- Md. Abul Khayer
Chief Financial Officer BD Paints Limited
Sd/- Md. Salauddin Sikder FCMA CEO & Managing Director Imperial Capital Limited
Sd/- Tahid Ahmed Chowdhury, FCCA
Managing Director EBL Investments Limited
Sd/- Tania Sharmin
Managing Director & CEO
CAPM Advisory Limited
Dated: September 08, 2018
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MANAGEMENT DISCLOSURE
1. It is observed from the company’s land deed no 1459 dated 05.02.2017 & deed no 11801 dated
10.10.2017 that totaling 68.87 decimal of BSCIC land were allotted to Md. Samsuddin Kamal & Mrs Mohananda food product for 99 years. It is also observed that the company has purchased the said land from Md. Samsuddin Kamal & Mrs Mohananda food product but no mutation is made in the name of the company and the company is paying premium to BSCIC instead of rent to land office. Explain the reason with documents; As per Bangladesh gadget additional no- 36.065.012.00.00.022.2010-205 on dated 13 June, 2010 by industry ministry regarding BSCIC plot allotment policy under the head of ownership condition no-1said, any entrepreneur cannot demand the land ownership on the basis of lease deed. Condition no-2 said, allotted plot consider as a lease plot for 99 years. For this reason the company does not have any mutation paper in its own name. As a result company has been paying premium to BSCIC instead of rent to land office.
2. It is observed that the company is started its business since 17/04/2014 but it has obtained Environment Clarence certificate on 19/03/2018, Explain it with documents; BD paints Limited was incorporated on 17.04.2014 and received environment license on 19.03.2018. This is because BPMA (Bangladesh Paint Manufactures’ Association) did not want environment license. Besides, other regulators such as BCCI, BSCIC, Factory and Organization Inspection Authority did not want that. Later, Bangladesh Securities Exchange Commission (BSEC) wanted Environment License. Subsequently we collected environment license on 19.03.2019. However, as paint manufacturer the company has been maintain ETP and other BSCIC compliance for smooth operation.
3. It is observed that the company has started its commercial operation on 17/04/2014 but submitted Income Tax return to NBR for the assessment year 2015-16, 2016-17, & 2017-18 on a single day i.e. on 19/08/18. Explain the reason with documents;
As paints manufacturing company and having been under the BSCIC industrial area, the companies have tried to get Tax Holiday because management of the company believed that the company would get tax holiday. However, the company have not got the tax holiday. Finally, the company has submitted the Tax return on a single day i.e. on 19/08/18.
4. It is observed from auditor’s certificate dated 06/09/2018 regarding payment status of VAT & Tax that the company has not paid any income tax for the income year ended 30 June 2015 & 30 June 2016. Explain; As our company operates in BSCIC, the company expected tax holiday. As a result the company did not pay income tax in the year ended 30 June 2015 and 30 June 2016. Later, Company came to know that it will not get Tax holiday. Subsequently, company submitted tax return and assessment has been completed on 27/02/2019 for the year 2015 and 2016. Advance income tax has been paid tk. 1,67,12,494. We have paid our VAT payment as well.
5. Auditors Certificate at page 267 of the prospectus (certificate # XI) shown that all receipts and payments of the issuer above 5.00 lacs were made through banking channel. However, in page 246 the auditor has certified that in Cash during 30-06-2018 turnover was made for Tk. 21,56,840/-, Explain about this inconsistency;
Auditors certificate at page no 267 of the prospectus (certificate # XI) shown that all receipts and payments of the issuer above 5.00 lacs were made through banking channel. On the other hand at page 246 the auditor has certified that turnover in Cash during 30-06-2018 was made for Tk. 21,56,840/. That is the total cash turnover during the year for BDPL. This amount is just the sum of cash turnover. None of the cash transaction among that amount is above 5.00 lacs.
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6. Justification on going in to IPO for a amount of Tk. 20 crore. Though the company has cash and cash equivalent Tk. 10,38,99,039, advance deposit and prepayments Tk. 3,38,92,123 and working capital Tk. 28,82,25,873 as per audited financial statement for the year ended June 30, 2018;
We have planned to acquire property, plant and equipment of around 31 crore in next 3-year for which tk. 18 crore will be raised from IPO and rest of the amount will be used from FDR and internal source of financing. Regarding prepayment of 3.38 crore, Tk. 1.67 crore was paid against Advance Income Tax and Tk. 1.5 crore was paid in advance against warehouse rent. As for working capital of 28.82 crore, prepayment and cash equivalent has been included in working capital that make working capital around 14 crore and rest around 14.82 is against current liabilities, Inventory and Accounts Receivable, which is in line with sales.
7. It is observed from the draft prospectus that the companies’ current capacity utilization is only
48.21%. Provide explanation regarding why the company needs additional funds for its expansion since 51.79% of existing capacity is still unutilized;
Our capacity utilization was 48.21% as of 30th June, 2018. This is because we shifted our production plant to Bangladesh Small and Cottage Industries Corporation (BSCIC) that hampered our production due to shifting at that time. Management has made extensive effort to increase sales and the market share to compete with the multinational companies. Regarding our product mix, we have different products such as a) Interior Paints, b) Exterior Paints c) Wood & Metal d) Industrial Paints and e) Marine Paints. Each product has different shed of color. Consequently, we need new machineries to introduce new product lines of having different shed of color with high quality and at the same time to save time and cost as well.
8. It is observed from the draft prospectus (page 56 -63) that the company has purchased all its machineries from local sources even some of those are foreign origin. In the process of acquisition how the company ensured the quality of its machineries and why foreign machineries were purchased from local sources. Also mention the name of the local company who produce machineries required for paint industries;
For paint industries, machineries are customized as per requirement. As a result we place order to local companies as per our requirement and local companies assembled the machineries (acquiring locally and from foreign) as per our requirement. The quality of the machineries is quite very good. The name of the local companies is as follows: 1. New Ovi Engineering, 2. Octopass Scientific Co, 3. Paradise Scientific Company, 4.Khan Engineering, 5.Nipa
Engineering Works, 6. S.M Scientific Store, 7. Chittagong Water Treatment System
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9. Analytical review of sales revenue, trade receivable & inventory of the company for the last three years are as follows:
It is observed from the above table that sales revenue during the year 2017 increased by 54.47% which seems very high and unusual. Trade receivable and inventory as on 30 June, 2017 also seems very high. Provide explanation with documents.
The Company has been producing paints products. The principal activities of the company are to manufacture and marketing different kinds of paints in five categories. Sales growth is always in up trend since commercial operation, BD paints limited has always tried to increase its sales, production capacity, exploring new potential share and increasing product lines. After shifted to BSCIC in 2017, the company increased its production capacity by 30% compared to the previous year. As a result in 2017 sales revenue increased by 54% compared to the previous year. In line with sales growth, the company has to increase production as well. Hence, Trade receivable and inventory increased.
