1 “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 offer of 22,500,000 ordinary shares Issue date of the Prospectus: Offer price Tk. 10.00 each (at par), total size of fund to be raised Tk. 225,000,000.00 Opening and closing date of subscription Opening date of subscription: Closing date of subscription: PROSPECTUS Name of Issuer Electro Battery Company Limited 28, Dilkusha C/A, 19 th Floor, Suit# 1901 & 1902, Dhaka- 1000 Phone: +88 02 9898785, Fax: +88 02 9890383 E-mail: [email protected], Web: www.electrogroupbd.com Name of Issue Manager MTB Capital Limited MTB Tower (Level 3), 111 Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka 1000 Phone: +88-02-8321714, Fax: +88-02-8321543 Email: [email protected]Web: www.mtbcap.com
Transcript
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“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 offer of 22,500,000 ordinary shares
Issue date of the Prospectus:
Offer price Tk. 10.00 each (at par), total size of fund to be raised Tk. 225,000,000.00
Opening and closing date of subscription
Opening date of subscription: Closing date of subscription:
(2) (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:
Name & Address Contact Person Telephone, Fax, Email & Web address
Auditor AHMAD & AKHTAR Chartered Accountants BCIC Bhaban (3rd Floor) 30-31, Dilkusha C/A, Dhaka-1000 A Correspondent Member Firm of Russell Bedford International, UK.
(ii) A person interested to get a prospectus may obtain from the issuer, and the issue manager(s). (iii) “If you have any query about this document, you may consult the issuer, issue manager and underwriter”.
(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) “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 (ten), i.e. the face value. The issue price has been determined and justified by the issuer and the issue manager 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) "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 numbers 78 to 85. " (vii) “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.”
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(a) 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:
Name & Address Contact Person Telephone, Fax, Email & Web address Issuer
Electro Battery Company Limited 225/1, New Elephant Road (1st Floor) Dhaka-1205
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) Name and date of newspapers where abridged version of prospectus was published:
Sl# Name of newspapers Date of publication 01 02 03 04
A M AGM Annual General Meeting MD Managing Director Allotment Letter of allotment for shares MTBCL MTB Capital Limited B BO A/C Beneficial owner account or
Depository account
N
BAS Bangladesh Accounting Standard NAV Net Asset Value BDT Bangladeshi Taka NRB Non-resident Bangladeshi BSEC Bangladesh Securities and
Exchange Commission
BFRS Bangladesh Financial Reporting Standard
O
Offering Price Price of the Securities of Electro Battery Company Ltd. being offered
C CDBL Central Depository Bangladesh
Limited
P
Commission Bangladesh Securities and Exchange Commission
P/E Price earnings ratio
Companies Act Companies Act, 1994 (Act. No. XVIII of 1994)
Pound United Kingdom Pound
CEO Chief Executive Officer CFO Chief Financial Officer R CSE Chittagong Stock Exchange
Limited Registered Office Registered Office of EBCL
CIB Credit information Bureau RJSC Registrar of Joint Stock Companies & Firms
D S DSE Dhaka Stock Exchange Limited Securities Shares of Electro Battery Company
Ltd. Sponsors The Sponsor shareholders of Electro
Battery Company Ltd. E Subscription Application Money EBCL Electro Battery Company Ltd. EMCL Energy Metter Company Ltd. T EI Eligible Investor The Company Electro Battery Company Ltd. EPS Earnings per share TIN Tax Identification Number Exchanges Stock Exchanges Tk. Taka ESPL Electro Solar Power Limited EMSL Electro Mechanical Service Limited U EMPL EM Power Limited USD United States Dollar ETSCL Electro Transformer & Switchgear
Company Limited
ELLL Electro Led & Lights Limited V VAT The value added tax F FC Account Foreign currency account W WDV Written Down Value I WPPF Workers' Profit Participation Fund IPO Initial public offering Issue Public issue Issuer Electro Battery Company Limited Issue Manager MTB Capital Ltd.
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TABLE OF CONTENTS
Section (i): Executive summary ...................................................................................................................................... 8 (a) About the industry: ................................................................................................................................................... 8 (b) About the Issuer: ...................................................................................................................................................... 8 (c) Financial information: .............................................................................................................................................. 8 (d) Features of the issue and its objects: ........................................................................................................................ 9 (e) Legal and other Information:.................................................................................................................................... 9 (f) Promoters’ background: ........................................................................................................................................... 9 (g) Capital structure and history of capital raising: ......................................................................................................10 (h) Summary of valuation report of securities: .............................................................................................................10
Section (ii): Conditions imposed by the commission in the consent letter .................................................................11 Disclosure in respect of issuance of security in Dematerialized Form: ........................................................................11 Conditions imposed by the Commission in the Consent Letter: ...................................................................................11
Section (iii): Declaration and due diligence certificates as per annexure- A, B and C .............................................17 Declaration about the responsibility of the directors, including the CEO of the issuer in respect of the prospectus ....17 Due diligence certificate by issue manager (s) .............................................................................................................17 Due diligence certificate by the underwriter(s) ............................................................................................................19 Due diligence certificate by the underwriter(s) ............................................................................................................20
Section (iv): About the Issuer ........................................................................................................................................21 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: .................................................................................................................................................................21 b) The names of the sponsors and directors of the issuer: ............................................................................................21 c) The name, logo and address of the auditors along with their telephone numbers, fax numbers, contact persons, website and e-mail addresses: .......................................................................................................................................21 d) Name of the Stock Exchanges where the specified securities to be listed:...............................................................22
Section (v): Corporate directory of the issuer ..............................................................................................................22
Section (vi): Description of the Issuer ...........................................................................................................................23 (a) Summary: ................................................................................................................................................................23 (b) General Information: ...............................................................................................................................................23 (c) Capital Structure: ....................................................................................................................................................26 (d) Description of Business: .........................................................................................................................................29 (e) Description of property: ..........................................................................................................................................36 (f) Plan of operation and discussion of financial condition: .........................................................................................43
Section (vii): Management’s discussion and analysis of financial condition and results of operations ...................53 (a) Overview of business and strategies: ......................................................................................................................53 (b) SWOT Analysis: .....................................................................................................................................................53 (c) Analysis of the financial statements of last five years with reasons 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 & after tax, EPS etc. .......................................................................................................54 (d) Known trends demands, commitments, events or uncertainties that are likely to have an effect on the company’s
business: .......................................................................................................................................................................55 (e) Trends or expected fluctuations in liquidity ............................................................................................................55 (f) Off-balance sheet arrangements those have or likely to have a current or future effect on financial condition: .....55
Section (viii): Directors and officers..............................................................................................................................56
Section (ix): Certain relationships and related transactions .......................................................................................60
Section (xi): Options granted to directors, officers and employees ............................................................................61
Section (xii): Transaction with the directors and subscribers to the memorandum .................................................62
Section (xiii): Ownership of the Company’s securities ................................................................................................63
Section (xvii) Parties involved and their responsibilities, as applicable .....................................................................75
Section (xviii): Material contracts: ................................................................................................................................76
Section (xix): Litigations, Fine or Penalty ....................................................................................................................77
Section (xx): Risk factors and management’s perceptions about the risks ...............................................................78
Section (xxi): Description of the issue ...........................................................................................................................85
Section (xxii): Use of proceeds .......................................................................................................................................88
Section (xxiv): Markets for the securities being offered ..............................................................................................98
Section (xxv): Description of securities outstanding or being offered ........................................................................99
Section (xxvii): Public issue application procedure: as described in the consent letter ..........................................156
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Section (i): Executive summary (a) About the industry: Globalization of world markets has led to fierce competition in the marketing commodity. Availability of electricity at the right time has become an absolute necessity for the survival of businesses and living. Power technology solutions play a crucial role today for up keeping the businesses and to make life cost effective and competitive. Shortage of power is a major problem in present day. Business operation is hampered for lack of availability of power. Demand of alternative sources of power is increasing. Battery is the most common product for power back up which is widely used all over the world. Battery industry is now the emerging sector in Bangladesh. Demand of battery is increasing day by day. Use of battery is also increases in different purpose to reduce physical labor. Use of solar panel also increases over the decade which increases the demand of battery. Expansion of demand makes the battery market bigger. So, many industries entered in this market to meet up the increasing demand. Now, all types of battery for car, motorcycle, IPS, solar panel are manufactured in Bangladesh. Some of those batteries are exporting in abroad. More than 20 battery manufacturing companies are running their operations in Bangladesh. These companies collect maximum raw materials from abroad and other from recycling. Above 10 lacs batteries are exported to more than 55 countries annually. There are huge opportunities in this industry to contribute in the country’s GDP. (b) About the Issuer: Electro Battery Company Limited was established in November 24, 2008 as a private limited company under the companies Act 1994 and subsequently converted into a public limited company on January 14, 2016. The corporate office of the company is situated at 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000. The factory is located at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka. The Company is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products. (c) Financial information: Major financial information of Electro Battery Company Limited is as follows:
(Amount in BDT) Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013
Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Gross Profit 123,331,170 113,006,591 98,664,337 74,823,377 103,280,020 Profit before Income Tax 77,127,972 57,842,455 46,232,829 24,111,299 37,330,408 Net Profit after Tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505 Total Assets 615,311,704 372,213,959 362,388,240 289,084,471 272,295,346 Share Capital 369,920,000 99,920,000 1,500,000 1,500,000 1,500,000 Retained Earnings 64,250,701 14,117,519 80,547,611 50,496,272 34,823,928 Face Value 10.00 10.00 10.00 10.00 10.00 No. of ordinary shares outstanding 36,992,000 9,992,000 150,000 150,000 150,000 NAV per share 11.74 11.41 546.98 346.64 242.16 Earnings per Share 2.07 1.55 1.24 0.65 0.96
* The Company has changed the face value of its ordinary share from Tk. 100.00 to Tk. 10.00 by passing a special resolution in its extraordinary general meeting held on October 01, 2015 and necessary amendments in capital clause of the Memorandum and Articles of Association were made accordingly.
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(d) Features of the issue and its objects:
Offer price BDT 10.00 Number of shares 22,500,000 Ordinary shares Offer size BDT 225,000,000.00 Purpose of raising fund Proceeds from initial public offering (IPO) will be used for plant &
machineries, Building & other Civil work and IPO expenses. Date of implementation Within 12 months from receiving the IPO fund.
(e) Legal and other Information:
Name of the company Electro Battery Company Limited Private/ public company Public Limited Company Date of incorporation November 24, 2008 Date of commencement of business February 18, 2009 Registration number C-73799(1841)/08
Particulars License Issuer/ Issuing
Authority Certificate/ License
No. Issue Date
Renewal Date
Expiry Date
Certificate of Incorporation
Register Joint Stock Companies and Firms, Bangladesh
C-73799/(1841)/08 24.11.2008 N/A N/A
TIN Certificate National Board of Revenue 212886980102 28.12.2013 N/A N/A
VAT Certificate Customs, Excise and VAT Commissionarate, Dhaka (West)
17121007392 08.08.2012 N/A N/A
Trade License Dhaka South City Corporation 02069709 02.10.2016 09.07.2017 30.06.2018 Trade License Ashulia Union Porishad 155(2017/18) 29.11.2008 10.07.2017 30.06.2018
Fire License Fire Service & Civil Defense, Dhaka
734 24.03.2009 15.06.2017 30.06.2018
Environment Clearance Certificate
Department of Environment 30.26.72.4.23.230210/
77 30.10.2011 23.07.2017 29.10.2017
Membership Certificate
Bangladesh Accumulator & Battery Manufacturers Association
BABMA-013/2016 01.07.2016 01.01.2017 31.12.2017
ISO 14001:2004 ISOQAR LTD. 8593-002 05.03.2012 09.02.2015 05.03.2018 Inspection for Factories and Establishments license
Department of Inspection for Factories and Establishments
16634/Dhaka 29.09.2013 11.06.2017 30.06.2018
Import Registration Certificate
The Import & Export Control Bureau
0193748 11.05.2009 02.07.2017 30.06.2018
(f) Promoters’ background: The following two persons are the promoters of Electro Battery Company Limited: 1. Md. Ansar Uddin Engr. Md. Ansar Uddin, son of late Late Md. Wahed Ali & late Late Mrs. Boru Bibi was born in Madaripur, in 1958. He has completed B. Sc. Engr. (E & E) degree from Khulna Engineering College, Dhaka. Mr. Md. Ansar Uddin is one of the sponsor directors of Electro Battery Company Limited. He is also the Managing Director of the Company. He has a vast experience of more than 31 years in industry and has sound knowledge and technical quality in the relevant area. He is also the head of production of the Company. Mr. Md. Ansar Uddin is involved in many social and cultural organizations. 2. Mrs. Umme Bushrah Umme Bushrah, daughter of Dr. Munshi Siddique Ahmed & Late Mrs. Foyezunnesa Latifa Ahmed and wife of Md. Ansar Uddin, was born in Madaripur, in 1962. She is one of the sponsor Chairman of the Company having more than 25 years of experience in service and business. Umme Bushrah obtained BA (Hon) degree from the University of Dhaka.
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(g) Capital structure and history of capital raising: The present capital structure of the company is as under:
Particulars No. of shares Face value in BDT Amount in BDT Authorized capital 100,000,000 10.00 1,000,000,000 Paid-up capital (as on June 30, 2017) 36,992,000 10.00 369,920,000 Pre-IPO Paid-up Capital 36,992,000 10.00 369,920,000 To be issued as IPO 22,500,000 10.00 225,000,000 Post-IPO Paid-up Capital 59,492,000 10.00 594,920,000
The history of capital raising of Electro Battery Company Limited is as follows:
Allotments No. of shares Face value
Consideration Amount in BDT
In cash Other than cash
(Bonus) As per Memorandum 150,000 10.00 1,500,000 - 1,500,000 December 09, 2015 9,842,000 10.00 18,420,000 80,000,000 98,420,000 March 16, 2017 27,000,000 10.00 270,000,000 - 270,000,000 Total 36,992,000 10.00 289,920,000 80,000,000 369,920,000
(h) Summary of valuation report of securities:
Methods followed Amount in BDT Method-1: Net assets value per share 11.74 Method-2: Historical earning based value per share 20.79 Method-3: Average market price per share of similar stocks 93.93
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Section (ii): Conditions imposed by the commission in the consent letter
Disclosure in respect of issuance of security in Dematerialized 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 Electro Battery Company Limited will sign an agreement with the Central Depository Bangladesh Limited (CDBL). Therefore, all transfers, transmissions, splitting or conversions will take place on the CDBL system and any further issuance of shares (including rights and bonus) will also be issued in dematerialized form only.
Conditions imposed by the Commission in the Consent Letter:
PART–A 1. The Company shall go for Initial Public Offer (IPO) for 2,25,00,000 ordinary shares of Tk. 10.00 each at par totaling
to Tk. 22,50,00,000.00 (Taka twenty two crore fifty lac 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.”
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 in any category 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.
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8. 20% of the securities reserved for other general public shall be reserved for 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 10% (ten percent) of the total securities reserved for the other 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 5% or more shares 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. 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:
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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.
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.
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.
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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. 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.
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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.
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 effected 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;
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(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 effected by crossed cheques or bank transfers. 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
after publication of the abridge 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 there under, 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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Section (iii): Declaration and due diligence certificates as per annexure- A, B and C Annexure- A
Declaration about the responsibility of the directors, including the CEO of the issuer in respect of the prospectus
[See 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/- Mrs. Umme Bushrah
Chairman
Sd/- Md. Emad Uddin
Nominee Director of EMCL
Sd/- Istak Ahmmed
Independent Director
Sd/-
Md. Rafique Ullah Nominee Director of ICB
Sd/-
Md. Ansar Uddin Director & Managing Director
Due diligence certificate by issue manager (s) To The Bangladesh Securities and Exchange Commission Sub: Public Issue of 22,500,000 Ordinary Shares of Tk. 225,000,000.00 by Electro Battery Company 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:
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(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:
(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/- Khairul Bashar Abu Taher Mohammed Chief Executive Officer & EVP MTB Capital Limited
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Annexure - C Due diligence certificate by the underwriter(s) To The Bangladesh Securities and Exchange Commission Sub: Public offer of 22,500,000 Ordinary Shares of Tk. 10.00 of Electro Battery Company 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. 280,900,000.00 (Taka twenty eight crore nine lac) and we have the capacity to underwrite a total amount of Tk. 1,404,500,000.00 (Taka one hundred forty crore forty five lac) as per relevant legal requirements. We have committed to underwrite for up to Tk. 39,375,000.00 (Taka three crore ninety three lac seventy five thousand) for the upcoming issue.
b) At present, the following underwriting obligations are pending for us: (Name of the issue and amount underwritten)
Sl# Name of the issue Amount underwritten (BDT) 1 Summit Shipping Limited 52,500,000 2 SBS Cables Limited 13,600,000 3 Madina Cement Ind. Ltd. 78,375,000 4 Silco Pharmaceutical Ltd. 26,250,000 5 Bashundhara Paper Mills Ltd. 50,000,000 6 AB Bank Limited 100,000,000 7 Silva Pharmaceuticals Ltd 20,000,000.00
Total 340,725,000.00
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/- Khairul Bashar Abu Taher Mohammed Chief Executive Officer & EVP MTB Capital Limited Place: Dhaka Date: October 17, 2017
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Due diligence certificate by the underwriter(s) To The Bangladesh Securities and Exchange Commission Sub: Public offer of 22,500,000 Ordinary Shares of Tk. 10.00 of Electro Battery Company 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 (Taka two hundred fifty million) and we have the capacity to underwrite a total amount of Tk. 1,250,000,000 (Taka one billion two hundred fifty million) as per relevant legal requirements. We have committed to underwrite for up to Tk. 39,375,000.00 (Taka thirty nine million tree hundred seventy five thousand) for the upcoming issue.
b) At present, the following underwriting obligations are pending for us: (Name of the issue and amount underwritten)
Sl# Name of the issue Amount underwritten (BDT) 1. Ananda Shipyard & Slipways Limited 13,640,000.00 2. Aman Cotton Fibrous Limited 7,500,000.00 3. Energypac power Generation Limited 6,520,000.00 4. Supreem Seed Company Limited 22,000,000.00 5. Cutting Edge Industries Limited 25,000,000.00 6. AND Telecom Limited 25,800,000.00 7. AB Bank Limited Rights 150,000,000.00 8. Delta Hospital Limited 8,000,000.00 9. Esquire Knit Composite Limited 10,000,000.00 10 Zaheen Spinning Limited-Rights 228,490,000.00 Total 496,950,000.00
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/- Mohammad Kamrujjaman Chief Executive Officer (CC) Place: Dhaka Date: October 17, 2017
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Section (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 : Electro Battery Company Limited Date of incorporation : November 24, 2008
Date of commencement of commercial operations
: February 18, 2009
Issuer’s logo :
Address of the registered office : 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000 Address of the factory : Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka Telephone number : +88-02-9552060 Fax number : +88-02-9559346 Contact person : Md. Ansar Uddin, Managing Director Website address : www.electrogroupbd.com Email address : [email protected]
b) The names of the sponsors and directors of the issuer:
Particulars Name Designation
Sponsors of the issuer 1. Mrs. Umme Bushrah 2. Md. Ansar Uddin
Independent Director c) The name, logo and address of the auditors along with their telephone numbers, fax numbers, contact persons, website and e-mail addresses:
Particulars of the Auditor:
Particulars Description Name of the auditor : AHMAD & AKHTAR, Chartered Accountants
Logo :
Addresses of the auditor : BCIC Bhaban (3rd Floor), 30-31, Dilkusha, C/A, Dhaka-1000. Telephone number : +880 2 9561289 Fax number : +880 2 9564366 Contact person : Kanchi Lal Das FCA, Partner Website address : www.aacabd.org Email address : [email protected]
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d) Name of the Stock Exchanges where the specified securities to be listed: Particulars Name & Address Logo Contact details
Electro Battery Company Limited was incorporated in November 24, 2008 as a private limited company under Registrar of Joint Stock Companies and Firms (RJSC) vides registration number C-73799/(1841)/08 under the companies Act 1994. It was converted into a public limited company on January 14, 2016.
Date of incorporation : November 24, 2008 Date of commencement of commercial operation
1. Mrs. Umme Bushrah, Chairman 2. Md. Ansar Uddin , Director & Managing Director 3. Md. Rafique Ullah, Nominee Director of ICB 4. Md. Emad Uddin, Nominee Director of EMCL 5. Istak Ahmmed, Independent Director
Issue manager : MTB Capital Limited MTB Tower (Level-3), 111 Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka-1000
Lead banker : Mutual Trust Bank Limited Compliance officer of issuer : Md. Shihab Mahmud, Company Secretary
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Section (vi): Description of the Issuer (a) Summary: (i) The summary of the industry and business environment of the issuer: Globalization of world markets has led to fierce competition in the marketing commodity. Availability of electricity at the right time has become an absolute necessity for the survival of businesses and living. Power technology solutions play a crucial role today for up keeping the businesses and to make life cost effective and competitive. Shortage of power is a major problem in present day. Business operation is hampered for lack of availability of power. Demand of alternative sources of power is increasing. Battery is the most common product for power back up which is widely used all over the world. Battery industry is now the emerging sector in Bangladesh. Demand of battery is increasing day by day. Use of battery is also increases in different purpose to reduce physical labor. Use of solar panel also increases over the decade which increases the demand of battery. Expansion of demand makes the battery market bigger. So, many industries entered in this market to meet up the increasing demand. Now, all types of battery for car, motorcycle, IPS, solar panel are manufactured in Bangladesh. Some of those batteries are exporting in abroad. More than 20 battery manufacturing companies are running their operations in Bangladesh. These companies collect maximum raw materials from abroad and other from recycling. Above 10 lacs batteries are exported to more than 55 countries annually. There are huge opportunities in this industry to contribute in the country’s GDP. (ii) Summary of consolidated financial, operating and other information: Electro Battery Company Limited has no subsidiary, associate or holding company. So consolidation is not applicable. (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:
Name of the board of director Designation Mrs. Umme Bushrah Chairman Md. Ansar Uddin Director & Managing Director Md. Rafique Ullah Nominee Director of ICB Md. Emad Uddin Nominee Director of EMCL Istak Ahmmed Independent Director
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(iii) Names, addresses, telephone numbers, fax numbers and Email addresses of the chairman, managing director, whole time directors, etc. of the issuer:
(iv) Names, addresses, telephone numbers, fax numbers and Email addresses of the CFO, company secretary, legal advisor, auditors and compliance officer:
Name Position Address Telephone, fax & Email
M. A. Halim CFO 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000
(v) Names, addresses, telephone numbers, fax numbers, contact person, website addresses and e-mail addresses of the issue manager(s), registrar to the issue etc.:
Issue Manager : MTB Capital Limited Addresses : MTB Tower (Level 3), 111 Kazi Nazrul Islam Avenue Bangla Motor, Dhaka 1000 Telephone : +88-02-8321714 Fax : +88-02-8321543 Contact person
: Khairul Bashar Abu Taher Mohammed Chief Executive Officer & EVP
(vi) Details of credit rating: The Company is issuing shares at par. As such no credit rating is required.
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(vii) 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 and address Contact person Telephone & fax & e-mail address Amount
Underwritten (BDT)
MTB Capital Limited MTB Tower (Level-3) 111 Kazi Nazrul Islam Avenue Bangla Motor, 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 Underwriter (S)
We are one of the underwriters of the Initial Public Offering (IPO) of Electro Battery Company Limited. We will underwrite BDT 39,375,000.00 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 (s):
Sd/ Khairul Bashar Abu Taher Mohammed Chief Executive Officer & EVP MTB Capital Limited Place: Dhaka Date: October 17, 2017
c) Major terms and conditions of the underwriting agreements.
1. As per guideline of the Bangladesh Securities and Exchange Commission, 35% of the IPO (i.e.; for Tk. 78,750,000.00) shall have to be underwritten by the underwriters, subject to the terms stated as follows:
2. The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 5 (Five) weeks from the date of subscription closer), if any of the following events occur:
(a) Upon closing of the subscription list it is found that the total number of valid applications (in case of under subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the Stock Exchange(s) concerned; or
(b) At least 65% of the IPO is not subscribed.
3. The Company shall issue 22,500,000 Ordinary Shares of Tk.10.00 each in accordance with the consent of the Bangladesh Securities and Exchange Commission and the provisions of this Agreement. The said total issue of 22,500,000 Ordinary Shares at Tk.10.00 each shall be offered to the public for subscription through a prospectus duly approved by the Bangladesh Securities and Exchange Commission (BSEC).
4. Prior to publication of the prospectus the Company shall have to obtain a consent from the Bangladesh Securities and Exchange Commission permitting the issue as described in Article 2.01 and providing for payment of underwriting commission not exceeding 0.50% (zero point five zero percent) on the amount underwritten and no additional commission will be paid on the amount of shares required to be subscribed by the Underwriter.
5. If and to the extent that the shares offered to the public by a prospectus authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of subscription call upon the Underwriter in writing with a copy of the said writing to the Bangladesh Securities and Exchange Commission, to subscribe or procure subscriber to subscribe the shares not so subscribed within the closing date and to pay for in cash in full, inclusive of any premium if applicable, for such unsubscribed shares within 15 (fifteen) days after being called upon to do so. The amount so received shall be credited in the share subscription account of the Company within the said period. If payment is made by Cheque/ Bank Draft by the underwriter it will be deemed that the underwriter has not fulfilled its obligation towards its underwriting commitment under this Agreement, until such time as the Cheque/ Bank Draft has been encashed and the Company’s share subscription account credited.
6. 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.
(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 ordinary
shares Nominal
price Issue price Amount in BDT
Authorized capital 100,000,000 10.00 10.00 1,000,000,000 Issued, subscribed and paid-up capital 36,992,000 10.00 10.00 369,920,000
The Company has raised its paid-up capital in following phases:
Allotments No. of shares Face value Consideration
Amount in BDT In cash
Other than cash (Bonus)
As per Memorandum 150,000 10.00 1,500,000 - 1,500,000 December 09, 2015 9,842,000 10.00 18,420,000 80,000,000 98,420,000 March 16, 2017 27,000,000 10.00 270,000,000 - 270,000,000 Total 36,992,000 10.00 289,920,000 80,000,000 369,920,000
(ii) Size of the present issue, with break-up (number of securities, description, nominal value and issue amount):
Description Securities to be offered Percentage Break-up of Securities
Nominal Value
Issue Amount (BDT)
Offer price BDT 10.00 Each at Par, Total size of fund to be raised BDT. 225,000,000.00
Eligible investor
Mutual Funds 10% 2,250,000 10.00 22,500,000 Other EIs 40% 9,000,000 10.00 90,000,000
Total 100% 22,500,000 10.00 225,000,000 * 9,000,000 Ordinary shares will be reserved for General Public and Small Affected Investors. (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):
Particulars Before the present issue After the present issue Paid-up capital Tk. 369,920,000 Tk. 594,920,000 Convertible instruments Nil Nil
Share premium Nil Nil
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(iv) Category-wise shareholding structure with percentage before and after the present issue and after conversion of convertible instruments (if any):
Sl# Category of shareholders No. of ordinary shares
Total 36,992,000 59,492,000 100% 100% (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 did not issue any of its ordinary shares for consideration in other than cash except bonus share. Details as follows:
Date of issue Person to issue Relationship Issue price Consideration Reason for the issue
December 09, 2015 Md. Ansar Uddin Managing Director 10.00 Bonus share Increased Paid up Capital December 09, 2015 Mrs. Umme Bushrah Chairman 10.00 Bonus share
(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 issued any shares in terms of merger, amalgamation or acquisition scheme. (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 Company has not issued any equity shares under stock option to its employees. (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 Company 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 such 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.
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(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 Date of allotment
No. of Ordinary shares
Face value & Issue price
Consideration Percentage (%) Lock in
period* % of
Pledged shares Pre-IPO Post-IPO
Mrs. Umme Bushrah Chairman 19.11.2008 50,000
Tk.10.00 Cash
7.27% 4.52% 3 years N/A 09.12.2015 2,640,000 Bonus
Md. Ansar Uddin Director & Managing
Director 19.11.2008 100,000
Tk.10.00 Cash
14.76% 9.18% 3 years N/A 09.12.2015 5,360,000 Bonus
Md. Emad Uddin Nominee Director of EMCL 09.12.2015 1,800,000
Tk.10.00 Cash 19.09% 11.87% 3 years N/A 16.03.2017 5,262,808
Md. Rafique Ullah Nominee Director of ICB 16.03.2017 8,000,000 Tk.10.00 Cash 21.63% 13.45% 3 years N/A Istak Ahmmed Independent Director N/A Nil N/A N/A N/A N/A N/A N/A
* Lock-in period of shares starts from the issue date of Prospectus.
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(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: There was no such purchase or sale or otherwise transfer by the sponsor and/or by the directors of the Electro Battery Company Limited and their related parties 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:
Name of shareholder Address Type of ownership Amount of Securities
ICB BDBL Building (12-15th Floors), 8, Rajuk Avenue, DIT Ave, Dhaka 1000, Bangladesh
Director 8,000,000 21.63%
EM Power Ltd. 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000
Shareholder 7,247,192 19.59%
*There is no event or intent of exercising warrant, option or right to convert any convertible instrument. (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: There is no officer holding any securities of the Company except the following: Name of Shareholders Designation Shareholding Amount (BDT) Percentage (%) Md. Ansar Uddin Director & Managing Director 5,460,000 54,600,000 14.76%
(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: Electro Battery Company Limited was incorporated in November 24, 2008 as a private limited company under Registrar of Joint Stock Companies and Firms (RJSC) vides registration number C-73799/(1841)/08 under the companies Act 1994. Subsequently it was converted into a public limited company on January 14, 2016. Corporate information: Particulars Description Date of incorporation as private limited company November 24, 2008 Commencement of commercial operation February 18, 2009 Conversion into public limited company January 14, 2016 Denomination of face value from Tk. 100.00 to Tk. 10.00 October 01, 2015 Authorized capital 1,000.00 Million Issued & paid-up capital 369.92 Million
The Company is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products. Electro Battery Company Limited has no subsidiaries.
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(ii) Location of the project: The factory of Electro Battery Company Limited is situated at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka. (iii) Plant, machinery, technology, process, etc.: Plant & Machinery: The Company has been using latest plant & machineries to produce high quality products. All the machineries are brand new when procured and are in good condition. Technology: Manufacturing process of the company is heavily technology driven, dynamic in nature with cutting edge technology. Process: Total process of the company leads by the trained professionals, strict monitoring and true measurement which provide competitive advantage to the company. (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.:
Date of incorporation Incorporated as a private limited company on November 24, 2008 having Registration No. C-73799/(1841)/08 under the Companies Act 1994, under the Registrar of Joint Stock Companies & Firms of Bangladesh.
Private to public Converted into a public limited company on January 14, 2016. Capacity Installed capacity is 190,000 Pics/ year.
Launching of plant & new products
Product Name Year Electro Solar Battery February 2009 Electro Automotive Battery May 2010 Electro Industrial Battery September 2010 Electro VRLA Battery February 2014 Electro Forklift Battery May 2015 Electro Easy Bike Battery November 2016 Electro Rickshaw Battery November 2016
Date of commercial operation
February 18, 2009
Changes in ownership
Mrs. Umme Bushrah and Md. Ansar Uddin are the sponsors of the Company. Energy Meter Company Limited has been appointed as director on 09-12-2015. Mr. Md. Emad Uddin has been appointed as nominee director of EMCL on
25.07.2017. ICB has been appointed as director on 14-03-2017.
Changes in key management personal
There were no changes in key management personnel.
Appointment of independent director
Mr. Istak Ahmmed has been appointed as independent director on 25-07-2017.
(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: The Company is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products in the local market and it has no export sales. Past Trends: Last 5 years sales of the Electro Battery Company Limited:
The Company has neither made any export in the past nor has any plan of export in near future.
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Future prospects: Overall demand of the industry products are increasing day by day. There is no available published data for future forecast but the Company’s own market survey states that the demand for the products of EBCL is also increasing with the increased demand of the market. For better quality and competitive price of the products, the Company is in the advantageous position and has opportunity of expanding its project in future. (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: The Company has no product or service that accounts for more than 10% of the Company’s total revenues. (vii) Description of associates, subsidiary and holding company of the issuer and core areas of business thereof: Electro Battery Company Limited does not have any associates, subsidiary or holding company except following six sister concerns:
Sl# Name of the Company Relationship 01 Electro Solar Power Limited Sister concern 02 Electro Mechanical Service Limited Sister concern 03 EM Power Limited Sister concern 04 Energy Meter Company Limited Sister concern 05 Electro Transformer & Switchgear Company Limited Sister concern 06 Electro Led & Lights Limited Sister concern
(viii) How the products or services are distributed with details of the distribution channel. Export possibilities and export obligations, if any: The company doing their business through distributor/ dealership channel and sales & marketing team. The company have deferent dealer/distributor in major area of Bangladesh. After receiving order from customers, the dealer/ distributor provide products to customer. The company set their monthly sales target for their distributor point in value of battery. To achieve the target, the company’s sales & marketing team and dealer/ distributor aggressively worked together. The products distribution process flow: Export possibilities & obligations: The Company has neither export its product nor has any plan to export in near future. It has no legal obligation for export.
(ix) Competitive conditions in business with names, percentage and volume of market shares of major competitors: There is huge demand and supply gap for the products of the Company. Being one of the high quality battery products manufacturer in the Bangladesh, the following companies can be considered as major competitors of the Company:
Source: Own market analysis. (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 Electro Battery Company Limited are different types of Acid, Battery Terminal, Battery Container, Battery Carton, Battery Insolation Board etc. which the Company procures from local and overseas market. The Company has some trusted suppliers of its raw materials and chemicals. List of principal suppliers is as follows: Sl# Company Name Address
1 Panna Battery Co. Ltd. Nasir Trade Center (Level # 12), 89, Bir Ullam C. R. Datta Road, Dhaka-1205
2 B.S Chemical Supply 9/A, Wise Ghat Road, Dhaka-1100
3 Zibo International Economic & Technical Coop. Co. Ltd.
No. 145, Zibo City, Shandong, P.R. China
4 Zendine (HK) Ltd. Unit N, 12/F, Century Industrial Centre, 33-35 Au Pui Wan Street, Hongkong
5 Henan Hengming Fengyun Power Source Co., Ltd. No. 8 Xinhui Road, Xinxiang City, Henan , China
6 Industrie Composizione Stampati S.r.L. Sede Legaler, Strada Prov. Le Per Gioia Centro Aziendale Quercete, 81016 San Potito Sannitico (CE), Italy
7 SP Engineering & Consultancy Suite 26-21-05, Prime Midah Heights, Jalan Midah 8, Taman Midah, 56000 Kuala Lumpur, Malaysia
8 Eswari Global Metal Industries Private Ltd. Plot No-96 & 97 Industrial Area, Baikampady, Mangalore-575011, Karnataka-India
9 Polyworld No.15 & 17, Jalan P6/2, Seksyen 6, Bandar Teknologi Kajang, 43500 Semenyih, Selangor D. E. Malaysia
10 D.H. Euro Hi Tech Co. Ltd. 703 HO, Hwanggum Plaza Building, 318-5, Shinjeong Dong, Yang Cheon Ku Seoul, South Korea
11 Jian Shin Resources Corporation. No. 108 Sec.2. Linhai Road, Fangliao Township, Ping Tung County 940, Taiwan
Contingency plan: EBCL has alternative options for purchasing raw materials & chemicals. The Company maintains good relationship with its raw material & chemical suppliers. If any supplier unable or disagree to supply raw materials then the Company will go for next best alternative supplier(s) immediately. (xi) Sources & requirement of power, gas, water & other utilities and contingency plan for disruption: All required utility facilities are available at the project site and those are stated below: Power: The Company meets its required power from Rural Electrification Board (REB). The total sanctioned electricity load for Electro Battery is 500 KVA. The Company has procured a high power electric transformer for smooth supply of electricity. Gas: The Company does not require any gas. Water: The factory requires around 1,000 litter water per day to continue its operation. Required water is supplied by its 2 (two) own tube-wells and distilled water plants.
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Contingency plan: The Company has 2 (two) diesel generator with a production capacity of 400 KVA each to supply power in case of any disruption. The Company has two tube-wells and distilled water plant. Both of those are used regularly and alternatively. (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/services with amount and percentage thereof: There is no such single customer who purchases 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: Electro Battery Company Limited purchase raw materials from different suppliers and have no contractual agreement with any suppliers. The Company purchase raw materials in normal course of business from the best supplier who has proven quality and price experience. Their supplied quantity changes from time to time. As of June 30, 2017 the following companies are supplier of 10% or more raw materials of Electro Battery Company Limited:
Company name Address Phone/ Fax
E-mail & Web
Amount & percentage for the year ended June 30,
2017 Amount (%)
Panna Battery Co. Ltd.
Nasir Trade Center (Level # 12), 89, Bir Ullam C. R. Datta Road, Dhaka-1205
Suite 26-21-5 Prima Midah Heights Kuala Lumpur, 56000, Malaysia
Tel: +60-3-91322680 Fax: +60-3-91322680
91,668,906 16.23%
(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:
Declaration regarding contract with principal suppliers or customers
This is to certify that Electro Battery Company Limited does not have any contract with its principal suppliers or customers.
Sd/- Sd/- Sd/-
M A Halim Md. Ansar Uddin Mrs. Umme Bushrah Chief Financial Officer Managing Director Chairman
(xv) Description of licenses, registrations, NOC and permissions obtained by the issuer with issue, renewal and expiry dates:
Particulars License Issuer/Issuing
Authority Certificate/ License
No. Issue Date Renewal
Date Expiry Date
Certificate of Incorporation
Register Joint Stock Companies and Firms, Bangladesh
C-73799/(1841)/08 24.11.2008 N/A N/A
TIN Certificate National Board of Revenue 212886980102 28.12.2013 N/A N/A
VAT Certificate Customs, Excise and VAT Commissionarate, Dhaka (West)
17121007392 08.08.2012 N/A N/A
Trade License Dhaka South City Corporation 02069709 02.10.2016 09.07.2017 30.06.2018 Trade License Ashulia Union Porishad 155(2017/18) 29.11.2008 10.07.2017 30.06.2018
Fire License Fire Service & Civil Defense, Dhaka
734 24.03.2009 15.06.2017 30.06.2018
Environment Clearance Certificate
Department of Environment 30.26.72.4.23.230210/
bev 77 30.10.2011 23.07.2017 29.10.2017
Membership Certificate
Bangladesh Accumulator & Battery Manufacturers Association
BABMA-013/2016 01.07.2016 01.01.2017 31.12.2017
ISO 14001:2004 ISOQAR LTD. 8593-002 05.03.2012 09.02.2015 05.03.2018 Inspection for Factories and Establishments license
Department of Inspection for Factories and Establishments
16634/Dhaka 29.09.2013 11.06.2017 30.06.2018
Import Registration Certificate
The Import & Export Control Bureau
0193748 11.05.2009 02.07.2017 30.06.2018
(xvi) Description of any material patents, trademarks, licenses or royalty agreements:
The Company obtained neither any patent right/ trademarks nor signed any royalty agreement with any party. (xvii) Number of total employees and number of full-time employees: The Company had 160 employees as on June 30, 2017.
Part/ Full time Number of employees Full time employee 160 Part time employees - Grand Total 160
None of the above employees get less than Tk. 5,300 per month.
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(xviii) A brief description of business strategy: Main business strategies of the Company: Electro Battery Company Limited, is a sister concern of ELECTRO GROUP. Since inception, the Company is manufacturing solar battery to support solar sector. After having enormous appreciation in manufacturing solar battery and by the massive motivational support by telecom sector, EBCL introduced VRLA Battery for BTS (Base Transceiver Station) reserve power source. The product designed and developed based on the latest technology which is suitable for local environment and power condition. EBCL is persistently investing in R&D for continuous development of the products. The consequences of R&D department, Electro Battery Company Limited is facing low warranty problem from the customer. To ensure highest support and series to the valued clients of telecom industry Electro Battery Company Limited maintains its skilled and efficient service team for 24/7. They are ready to provide prompt solution of power back up whenever required. Electro Battery Company Limited is committed to provide uninterrupted power supply at your BTS. In 2009, Electro Battery Company Limited has started manufacturing and marketing battery under the brand name “ELECTRO” especially, solar battery, industrial battery, automotive battery etc. The company is certified by ISO 9001:2008, IEC 61215:2005, ISO 14001:2004 and ISO 18001:2007. (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: The Company is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products. Production capacity and current utilization is as under:
Product Unit Installed capacity Capacity utilization Capacity utilization (%)
(e) Description of property: The Written down value of Property, Plant and Equipment’s owned by the company as per audited accounts as on June
30, 2017 are stated below:
Particulars Amount in BDT Land 13,963,031 Building & Civil Construction 136,924,681 Electrical Line Inst. 112,303 Machineries 78,786,829 Furniture & Fixture 2,076,848 Computer 745,534 Office Equipment 1,479,784 Factory Equipments 892,730 Computer Software 14,706 Fire Equipment 923,020 Vehicles 21,234 Balance as on June 30, 2017 235,940,699
(i) Location and area of the land, building, principal plants and other property of the company and the condition thereof: The Company’s registered office is situated at 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000 and the factory located at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka. The entire assets of the company are located at the Company’s head office and its factory. Details are as under:
Sl# Particulars Location and Area Condition of the Property
01 Land Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka.
Position hold by the company.
02 Building & Civil Construction Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka.
Factory sheds are in good condition.
03 Electrical Line Inst. Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka.
05 Furniture & Fixture At Factory and Head Office Good Condition 06 Computer At Factory and Head Office Good Condition 07 Office Equipment At Factory and Head Office Good Condition 08 Factory Equipment At Factory and Head Office Good Condition 09 Computer Software At Factory and Head Office Good Condition 10 Fire Equipment At Factory and Head Office Good Condition 11 Vehicles At Factory and Head Office Running
(ii) Whether the property is owned by the Company or taken on lease: All the assets of the Company are in its own name. (iii) Dates of purchase, last payment date of current rent ( ) and mutation date of lands, deed value and other costs including details of land development cost, if any and current use thereof:
(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 lands have been acquired Cost of acquisition Relation
Md. Shirajul Islam 3,252,000.00 There is no relation between seller of land and the issuer or any sponsor or director thereof.
(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 approval of pertaining to use of the land. (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:
Name of Mortgagee Deed No. Date Plot No. Area in Decimal Mercantile Bank Limited 34664 24-12-2016 CS & SA: 121; RS: 721 14.00 Mercantile Bank Limited 11511 24-12-2016 CS & SA: 121; RS: 721 09.40 Mercantile Bank Limited 4371 24-12-2016 CS & SA: 122; RS: 721 14.45 Mercantile Bank Limited 20327 24-12-2016 CS & SA: 124; RS: 724 13.00
(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.
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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:
Name of machinery Dates of Purchase Sellers name Address
Years of sale
Condition when purchased
Country of origin
Purchase price including other
related cost
Useful Economic Life When
purchased Remaining
Oxide Mill (With Standard Accessories) 2009 Jiangsu Sanhuan Industry And Commerce Co. Ltd.
Floor3 Building A Soho Plaza 48 Ning Nan Da Dao Nanjing 210012, China
N/A Brand New China 1,418,847 15 15
Fully Automatic Heat Sealing Machine HSM-82-B with Standard Accessories
2017 Jiangsu Soho Germants Co. Ltd.
Floor3 Building A Soho Plaza 48 Ning Nan Da Dao Nanjing 210012, China
N/A Brand New China 6,830,262 15 15
Total 117,745,076 N/A
The written down value of the plant and machineries of Electro Battery Company Limited as on June 30, 2017 is Tk. 78,786,829/-.
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(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.:
Machinery required Costs in BDT Country of origin
Date of placement of
order
Expected date of supply
Auto Grid Casting Machine for E-Rickshaw Battery
4,000,000 China/India
Within 3 month of IPO fund
received
Within 9 month of IPO fund received
Auto Grid Casting Machine for E-Bike Battery 4,500,000 China/India Auto Positive Grid Casting Machine for Maintenance Free E-Rickshaw Battery
3,500,000 China/India
Auto Negative Grid Casting Machine for Maintenance Free E-Rickshaw Battery
3,800,000 China/India
Curing Chamber 2,000,000 China/India Formation Rectifier 2,200,000 China/India Charging Rectifier 2,500,000 China/India Plate Drying Chamber 1,500,000 China/India Plate Cleaning Machine 1,200,000 China/India Assembling Line 22,000,000 China Lead Purification Furnace 2,500,000 China Spectrometer 10,000,000 Germany/USA Charging & Discharging Machine 4,000,000 China/India Acid Filling Machine 2,000,000 China Paste Mixing Machine 1,800,000 China/India Pasting Line 11,000,000 China/India Lead Purification Furnace Fume Control Unit 1,500,000 China Formation Acid Fume Control Unit 1,500,000 China Efluent Treatment Plant 5,000,000 China De-Mineralized (DM) Water Plant 3,000,000 China Grid Casting Fume Control Unit 500,000 China Gray Oxide Mill 12,000,000 China Red Oxide Mill 5,000,000 China Auto Grid Casting Machine for E-Rickshaw Battery
4,000,000 China/India
Auto Grid Casting Machine for E-Bike Battery 4,500,000 China/India Auto Positive Grid Casting Machine for Maintenance Free E-Rickshaw Battery
3,500,000 China/India
Auto Negative Grid Casting Machine for Maintenance Free E-Rickshaw Battery
3,800,000 China/India
Curing Chamber 2,000,000 China/India Formation Rectifier 2,200,000 China/India Charging Rectifier 2,500,000 China/India Plate Drying Chamber 1,500,000 China/India Plate Cleaning Machine 1,200,000 China/India Assembling Line 22,000,000 China Lead Purification Furnace 2,500,000 China Spectrometer 10,000,000 Germany/USA Charging & Discharging Machine 4,000,000 China/India Acid Filling Machine 2,000,000 China Paste Mixing Machine 1,800,000 China/India Pasting Line 11,000,000 China/India Lead Purification Furnace Fume Control Unit 1,500,000 China Formation Acid Fume Control Unit 1,500,000 China Efluent Treatment Plant 5,000,000 China De-Mineralized (DM) Water Plant 3,000,000 China Grid Casting Fume Control Unit 500,000 China Gray Oxide Mill 12,000,000 China Red Oxide Mill 5,000,000 China Total Cost of Machineries 148,700,000
Add: Installation and Other Costs 9,300,000 Total Cost of Battery Manufacturing Plant 158,000,000
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(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 such 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.
Declaration related to machineries being brand new We do hereby declare that all the plants and machineries of the Electro Battery Company Limited as on June 30, 2017 were purchased in brand new condition. There are no re-conditioned or second hand machineries installed in the Company.
Dated: 12 October 2017 Dhaka
Sd/- AHMAD & AKHTAR 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 neither purchased any second hand/ reconditioned machineries nor have any plan to purchase such machineries in future. (xiii) A physical verification report by the issue manager(s) regarding the properties as submitted to the Commission:
Physical verification report by the issue manager of Electro Battery Company Limited This is to certify that we have visited the registered office & factory of Electro Battery Company Limited several times. Lastly, we have visited the factory on July 20, 2017 and found the registered office and factory as details below: Visited and accompanied by:
Particulars Name & Designation
Visited by Issue Manager(s)
Khairul Bashar Abu Taher Mohammad Chief Executive Officer and EVP
MTB Capital Limited
Proshanta Kumar Kar Assistant Manager
MTB Capital Limited
Accompanied by Issuer Electro Battery Company Limited
Company overview: Electro Battery Company Limited is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products in Bangladesh. The Company was incorporated in November 24, 2008 as a private limited company as subsequently converted into a public limited company on January 14, 2016. The Certificate of Incorporation number of the company is C-73779 (1841)/08. The Company started its commercial operation on February 18, 2009.
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Nature of business: Electro Battery Company Limited is engaged in manufacturing and marketing of wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery products in Bangladesh. Products: The Company has five types of battery products:
Description of property: We have identified the registered office and factory of Electro Battery Company Limited as follows: 1. Registered office building:
The registered office of the Company is located at 28, Dilkusha C/A, Dhaka, Bangladesh.
2. Land: We have found that the Company possesses total 50.85 decimal of lands in its own name. The land is situated at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka, Bangladesh where the factory is situated.
3. Factory buildings and sheds:
No. of Buildings
Buildings Description
Type (Brick/Tin/Prefabricated Steel)
Status of usage
Shade -01 1 Stored Pre-fabricated steel structured Shade for manufacturing
Grid Casting, Formatting, Charging & Store Room
Shade-02 1 Stored Pre-fabricated steel structured Shade for manufacturing
Pasting, Filling, Formation & Storage
Shade-03 1 Stored Pre-fabricated steel structured Shade for manufacturing
Pasting, Formation, Charging & Storage
4. Plant & Machinery and Office Equipment: In factory, we found all the machineries which are mentioned in the
prospectus. 5. Generator & transformer: The generator of the company is in good condition and running well. The company has
procured a high power electric transformer for smooth supply of electricity. The company meets its required power from Rural Electrification Board (REB).The total sanctioned electricity load for EBCL is 500 KVA. Beside that the company maintains 2 (two) generator with a production capacity of 400 KVA each.
6. Water pump and distilled water plant: The Company requires huge pure water for production. Its own deep tube-
well and distilled water plant supply the required water and we found those in good condition and running. 7. Vehicles: The company has 07 covered delivery Vans in good condition. 8. Signboard: The signboard of the Company is well displayed at the factory premises. Besides these assets we have also found other assets like Furniture & Fixture, Electrical Installation & Equipment, Office Equipment and Others. It is mentionable here that during our visit, we have checked inventory register and roster (Workers’ duty register) and found satisfactory and all machineries are in good condition and running well. Sd/- Khairul Bashar Abu Taher Mohammad Chief Executive Officer and EVP MTB Capital Limited
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(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. (xv) Full description of other properties of the issuer:
(As per audited financial statement on June 30, 2017) Particulars Amount in BDT Land 13,963,031 Building & Civil Construction 136,924,681 Electrical Line Inst. 112,303 Machineries 78,786,829 Furniture & Fixture 2,076,848 Computer 745,534 Office Equipment 1,479,784 Factory Equipments 892,730 Computer Softwear 14,706 Fire Equipment 923,020 Vehicles 21,234 Balance as on June 30, 2017 235,940,699
(f) Plan of operation and discussion of financial condition: (i) Electro Battery Company Limited was incorporated in November 24, 2008 as a private limited company under Registrar of Joint Stock Companies and Firms (RJSC) vide registration number C-73799/(1841)/08 under the Companies Act 1994. It was converted into a public limited company on January 14, 2016. (ii) The Company's revenues and results from operations, statement of financial position, changes in financial position and statement of cash flows for the last five years are mentioned below: Revenue and results from operation:
(Amount in BDT) Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013
Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Less: Cost of goods sold 552,958,920 508,897,947 444,695,721 302,466,351 388,061,654 Gross Profit 123,331,170 113,006,591 98,664,337 74,823,377 103,280,020 Operating Expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Administrative & Selling Expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Profit from Operation 95,898,031 88,643,674 76,882,370 53,352,683 77,306,208 Financial Expenses 14,913,660 30,801,219 30,649,541 29,241,384 39,975,800 Net profit before charging WPPF for the period 80,984,371 57,842,455 46,232,829 24,111,299 37,330,408
Less: Contribution to WPPF 3,856,399 - - - - Profit before Income Tax 77,127,972 57,842,455 46,232,829 24,111,299 37,330,408 Income tax Expenses 26,994,790 20,244,859 16,181,490 8,438,955 13,998,903 Current Tax 16,605,573 15,978,985 16,181,490 8,438,955 13,998,903 Deferred Tax 10,389,217 4,265,874 - - - Net Profit after Tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505 Earnings per Share (Restated) 2.07 1.55 1.24 0.65 0.96 Earnings per Share(fully diluted-Restated)
1.36 1.02 0.81 0.42 0.63
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Statement of financial position: (Amount in BDT)
Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013 Non-current assets 328,299,968 154,847,772 100,163,236 61,047,311 66,785,637 Property, Plant & Equipment 235,940,700 92,126,141 88,813,044 61,047,311 66,785,637 Capital Work in Progress 92,359,268 62,721,631 11,350,192 - - Current assets: 287,011,736 217,366,187 262,225,004 228,037,160 205,509,709 Inventories 175,093,609 127,193,379 80,527,356 78,665,923 85,082,368 Accounts Receivable 102,987,666 81,922,083 90,592,535 62,672,204 57,810,154 Advance, Deposit and Prepayments 8,629,113 7,811,276 67,879,495 59,708,613 38,837,411 Investment - - 23,021,500 23,021,500 23,021,500 Cash and Cash Equivalents 301,348 439,449 204,118 3,968,920 758,276 Total Assets 615,311,704 372,213,959 362,388,240 289,084,471 272,295,346 Shareholder's Equity and Liabilities Shareholder's Equity 434,170,701 114,037,519 82,047,611 51,996,272 36,323,928 Share Capital 369,920,000 99,920,000 1,500,000 1,500,000 1,500,000 Retained Earnings 64,250,701 14,117,519 80,547,611 50,496,272 34,823,928 Non-current Liabilities 17,176,218 21,326,614 13,401,145 16,699,281 22,188,551 Long Term Loan 2,521,126 17,060,740 13,401,145 16,699,281 22,188,551 Deferred tax liability 14,655,092 4,265,874 - - - Current Liabilities 163,964,785 236,849,826 266,939,484 220,388,918 213,782,867 Accounts Payable 10,013,435 17,134,600 1,798,060 8,920,288 8,700,000 Current Maturity of Long Term Loan 6,941,181 - - - Short Term Borrowings 103,224,333 103,774,888 157,929,070 140,644,653 182,525,386 Creditors & Accruals 43,785,836 26,377,637 44,124,272 27,924,746 22,330,630 Advance Deposit against sales - 560,000 226,850 Share Money Deposit - 89,562,702 63,088,081 42,339,231 - Total shareholders' equity and liabilities
Net Asset Value (NPV) per share 11.74 11.41 546.98 346.64 242.16 Statement of changes in financial position: For the year ended June 30, 2013 to June 30, 2017:
Particulars Ordinary share capital Retained earnings Total Balance as on June 30, 2017 369,920,000 64,250,701 434,170,701 Balance as on June 30, 2016 99,920,000 14,117,519 114,037,519 Balance as on June 30, 2015 1,500,000 80,547,611 82,047,611 Balance as on June 30, 2014 1,500,000 50,496,272 51,996,272 Balance as on June 30, 2013 1,500,000 34,823,928 36,323,928
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Statement of cash flows: Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013 Cash flows from operating activities: Collection from customers 655,224,507 630,574,990 515,439,727 372,427,678 445,283,999 Payment to suppliers, employees and others
Cash generated from operation 30,777,244 77,552,292 43,140,804 51,044,533 50,726,415 Income tax paid (4,763,311) (3,107,337) (6,432,296) (13,561,733) (21,557,591) Payment for financial expenses (14,913,660) (30,801,219) (30,649,541) (29,241,384) (39,975,800)
Net cash flows from operating activities 11,100,273 43,643,736 6,058,967 8,241,415 (10,806,976) Cash flows from investing activities: Acquisition of fixed assets (56,110,435) (4,379,600) (33,208,708) - (1,277,791) Received from Investment in Shares (ESPL)
- 23,021,500 - -
Payment for capital work in progress (127,416,248) (56,450,339) (11,350,192) - Net cash flows from investing activities (183,526,683) (37,808,439) (44,558,900) - (1,277,791) Cash flows from financing activities: Issuance of share capital 270,000,000 18,420,000 - - Share money deposits (89,562,702) 26,474,621 20,748,850 42,339,231 - Received/(Payment) of short term bank loan
Sub total 434,170,701 203,600,221 145,135,692 94,335,503 36,323,928 External sources of cash Long Term Loan 2,521,126 17,060,740 13,401,145 16,699,281 22,188,551 Current Maturity of Long Term Loan 6,941,181 - - - Short Term Borrowings 103,224,333 103,774,888 157,929,070 140,644,653 182,525,386 Sub total 112,686,640 120,835,628 171,330,215 157,343,934 204,713,937 Grand total 546,857,341 324,435,849 316,465,907 251,679,437 241,037,865
b) Any material commitments for capital expenditure and expected sources of funds for such expenditure: The Company has not made any material commitment for capital expenditure except for those mentioned in use of proceeds section in this prospectus. 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, adding new machine, increase sales volume. Successive strong financial performance is the result of unwavering commitment of the promoters, management efficiency, employees’ sincerity, use of appropriate
technology, among others.
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The following table shows the year to year financial performance of the Company and which is increasing due to the company’s long terms vision in this sector, experienced top tier management, favorable economic and government rules and regulations, the commendable repayment culture is contributing for growth of the company.
(Amount in BDT) Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013
Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Cost of goods sold 552,958,920 508,897,947 444,695,721 302,466,351 388,061,654 Operating expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Net profit after tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505
Revenues: Production capacity of the company is increasing due to installing plant and machinery and efficient management team. Resultant, period to period changes in revenues have been arisen. Cost of goods Sold: Increase of cost of goods sold in period to period is in the line with sales volume. Operating Expenses: Operating Expenses include administrative expenses and selling & distribution expenses. Due to increases salary & allowances, Bonus and Sales promotional activities and Increase of operating expenses in period to period is in the line with production and sales volume. Net Income: Net income increase in period to period is in the line with sales volume. d) Any seasonal aspects of the issuer’s business: There is no significant seasonal aspect on the company’s business. e) Any known trends, events or uncertainties that may have material effect on the issuer’s future business: Though there is no known trend, events and uncertainties that shall have a material impact on the company’s future
business, the operation of the company may be affected by the following events:
i) Political unrest ii) Natural disaster iii) Increased competition iv) Entrance of new technology
f) Any assets of the company used to pay off any liabilities: No assets of the Company have been used to pay off any liability. 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 from or given to any loan to any related party or connected person. 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 contractual liabilities other than the normal course of business within next one year that would impact the financial fundamental of the company. i) The estimated amount, where applicable, of future capital expenditure: The Company does not have any plan for future capital expenditure other than as specified in use of proceeds section in this prospectus.
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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: 1. VAT: The Company has VAT registration number 17121007392. It pays VAT in time and submitted return
accordingly and therefore the Company has not any outstanding VAT as on June 30, 2017.
2. Income tax: The E-TIN (Tax Payers Identification Number) of EBCL is 212886980102, Taxes Circle-178 (Company), Tax Zone-09, Dhaka. Year wise income tax status of the Company is as under:
Income Year Assessment Year Status
2016-2017 2017-2018 Preparing for return submission.
2015-2016 2016-2017 The assessment of the assesse (Company) has been completed up to the assessment year 2016-2017.
2014-2015 2015-2016 The assessment of the assesse (Company) has been completed up to the assessment year 2015-2016.
2013-2014 2014-2015 The assessment of the assesse (Company) has been completed up to the assessment year 2014-2015 & tax paid in full up to the assessment year 2013-2014
2012-2013 2013-2014 The assessment of the assesse (Company) has been completed up to the assessment year 2013-2014 and of Income Tax Ordinance, 1984 but tax did not paid in full.
3. Customs duty: There is no such liability outstanding for the company as of June 30, 2017. 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: There is no financial lease commitment with anyone for the last five years. l) Details of all personnel related schemes for which the company has to make provision for in future years: In addition to company’s monthly salary benefits, wages and allowances, the company also provides following benefits
to the employees. (a) Festival bonus: The Company givens two festival bonuses in a year. (b) Performance bonus: All workers at factory get performance bonus who can meet the target. (c) Workers profit participation fund: The Company started worker profit participation fund from 2017 as per
provisions of Labor Laws 2006. (d) Provident Fund: The Company provide provident fund facility to its employee. (e) Transportation facilities: Transportation facilities is available for the company’s’ employee.
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m) Break down of all expenses related to the public issue: Detail of estimated public issue expenses are shown below:
Particulars Nature of expenses Amount in BDT Manager to the issue fees:
Manager to the issue fee Maximum 2% (two percent) of the public
offer amount 1,687,500
VAT against manager to the issue fee @ 15% of the issue management fee 253,125 BSEC fees: Application fee Fixed 50,000 Consent fee @ 0.40% on the public offer amount 900,000 Fees related to listing with the stock exchanges: Prospectus submission fees to DSE & CSE Fixed 100,000
Annual fee to DSE & CSE 0.05% Up to Tk. 100 crore and 0.02% up
above Tk. 100 crore paid up capital 594,920
Listing fee to DSE & CSE
@ 0.25% on 10 crore and 0.15% on the rest amount of paid-up capital: (minimum Tk.
50 thousand, maximum Tk.1 crore for each exchange)
1,984,760
CDBL fees and expenses: Security fee At actual 400,000 Documentation fee At actual 2,500
IPO fee @ 0.015% of issue price + 0.015% of pre-
IPO paid-up capital 89,238
Annual fee At actual 100,000 Connection fee At actual 6,000 Commissions & expenses: Underwriting commission @ 0.50% on underwriting amount 393,750 Auditor certification fee At actual 200,000
Expenses related to printing, publication and others: Abridged version of prospectus and notice in 4 daily newspapers
(Estimated: to be paid at actual) 800,000
Printing of prospectus (Estimated: to be paid at actual) 1,000,000 Notice for prospectus, lottery, refund etc. in 4 daily newspapers
(Estimated: to be paid at actual) 300,000
Currier expenses (Estimated: to be paid at actual) 300,000 Lottery related expenses including BUET fee (Estimated: to be paid at actual) 1,000,000 Data processing & software (Estimated: to be paid at actual) 6,000,000 Administrative & stationary expense (Estimated: to be paid at actual) 838,207 Total 17,000,000 N.B.: Actual costs may vary if above mentioned estimates differ and will be adjusted accordingly. 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: The Company did not revalue any of its assets since inception. o) Where the issuer is a holding/ 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 no holding/ subsidiary/ associate company. Therefore, no such transaction has been made during the last five year.
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p) Financial information of Group Companies under common ownership by more than 50%: ELECTRO Battery Company Limited is a single entity and it has neither any holding company nor any subsidiary. 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; Electro Battery Company Limited is a manufacturing company. 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: Auditor's certificate regarding allotment of shares to promoters or Sponsor shareholders for consideration in cash/other than cash
This is to certify that the paid-up capital of Electro Battery Company Limited as of June 30, 2017 was Tk. 369,920,000 divided into 36,992,000 Ordinary Shares of Tk. 10.00 each. Details are follows:
Date of Allotment Nature of Issue
No. of Shares Issue
Face value
Amount in BDT
Subscribers to the Memorandum & Articles of Association at the time of Incorporation
Cash 150,000 10.00 1,500,000
Ordinary Shares Issued on December 09, 2015 Cash 1,842,000 10.00 18,420,000
Ordinary Shares Issued on December 09, 2015 Stock
Dividend 8,000,000 10.00 80,000,000
Ordinary Shares Issued on March 16, 2017 Cash 27,000,000 10.00 270,000,000 Total 36,992,000 369,920,000
The Company has changed the face value of its ordinary share from Tk. 100.00 to Tk. 10.00 by passing a special resolution in its extraordinary general meeting held on October 01, 2015 and necessary amendments in capital clause of the Memorandum and Articles of Association were made accordingly.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR 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; Electro Battery Company Limited started its commercial operation in February 18, 2009.
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u) Discussion on the results of operations shall inter-alia contain the following: 1. A summary of the past financial results after adjustments as given in the auditor’s report containing significant
items of income and expenditure: Summary of the past financial results and operations are presented below:
3. The income and sales on account of major products or services:
Sl# Name of the product Income of each product Percentage of contribution 1 Electro Solar Battery 179,586,000 26.55% 2 Electro Industrial Battery 294,807,890 43.59% 3 Electro VRLA Battery 57,890,500 8.56% 4 Electro Automotive Battery 49,580,700 7.33% 5 Electro Forklift Battery 37,050,700 5.48% 6 Electro Easy Bike Battery 29,875,600 4.42% 7 Electro Rickshaw Battery 27,498,700 4.07%
Total 676,290,090 100.00% 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 has no other 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 or 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: Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013 Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Cost of goods sold 552,958,920 508,897,947 444,695,721 302,466,351 388,061,654 Gross Profit 123,331,170 113,006,591 98,664,337 74,823,377 103,280,020 Operating Expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Financial Expenses 14,913,660 30,801,219 30,649,541 29,241,384 39,975,800 Net profit before charging WPPF for the period
Less: Contribution to WPPF 3,856,399 - - - - Profit before Income Tax 77,127,972 57,842,455 46,232,829 24,111,299 37,330,408 Income tax Expenses 26,994,790 20,244,859 16,181,490 8,438,955 13,998,903 Net Profit after Tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505 Earnings per Share 2.07 1.55 1.24 0.65 0.96
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.: There are 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 of the company except followings:
Period Description June 30, 2016 Introduction of BAS-12: Income Tax, Deferred tax on investment property. June 30, 2017 Introduction of BAS-19: Employee benefit for employees’ worker profit participation fund.
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: There are no known trends, events or uncertainties that shall have a material effect on the company’s future business
other than the events which is beyond the company’s control. 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: Future is always uncertain and the company is aware of that. In future, labor price or material price may change and business may be affected. But revenue is always adjusted with production cost. So, any change in cost factor 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: After increasing the new machineries from net proceeds of IPO, sales will be increased by around 25%. This increased sale will result a positive increase in total revenue, gross profit and net profit accordingly. 6) Total turnover of each major industry segment in which the issuer operated: There is no information available regarding the total turnover of battery industry which the issuer operated. There is only one listed company similar to this issuer. Turnover of Quasem Drycells Ltd. for the last 5 years is as under:
(Amount in BDT) Particulars 30-06-2016 30-06-2015 30-06-2014 30-06-2013 30-06-2012
7) Status of any publicly announced new products or business segment: The Company has no such information to announce publicly. 8) The extent to which the business is seasonal: There is no such significant seasonal aspect on the company’s business. w) Defaults or rescheduling of borrowings with financial institutions/ 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: The Company neither has defaulted nor rescheduled of its borrowings with financial institute/ Banks nor has converted any of its loan into equity since inception. 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/ 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 five years and had not any material effect on the profits/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: The Company has no injunction or restraining order from any authority. z) Technology, market, managerial competence and capacity built-up: Technology: Electro Battery Company Limited has been using state of the art machineries and technologies in order to produce quality products. Its manufacturing process is heavily technology driven, dynamic in nature with cutting edge technology imported from different countries. Total quality management is leaded by the trained professionals, strict monitoring and true measurement always provided competitive advantage. Market: The core market of the company products are telecommunication sector (i.e. Grameen Phone, Pacific Bangladesh Telecom Ltd , Banglalink, Teletalk, Airtel, Banglalion, QUBEE etc.), Multinational Company (i.e. Coca-Cola), Government sector (i.e. PGCB, BREB), NGO (i.e. Action in Development, Surjer Alo, TMSS) and other local customers. Managerial competence: All the members of the management team of the company are highly qualified, trained & skilled professionals, well experienced and extremely devoted. The management team is leaded by Md. Ansar Uddin, Managing Director who acts for the best interest of the company. The expert team of Electro Battery Company Limited, consists of a good number of professionals from various disciplines, is seasoned and experienced enough to use the facilities for production to fulfill the demand of the target of customers. Successive and sustainable strong financial performance is the result of unwavering commitment of the promoters, management efficiency, employees’ sincerity, use of appropriate technology. Capacity built-up: The Company uses 78.21% capacity of its current installed capacity and is working for increasing capacity to meet up the demand of company’s product. aa) Changes in accounting policies in the last three years: The company has no changes in accounting policies in the last three years except following.
Period Description June 30, 2016 Introduction of BAS-12: Income Tax, Deferred tax on investment property. June 30, 2017 Introduction of BAS-19: Employee benefit for employees’ worker profit participation fund.
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bb) Statement regarding significant developments subsequent to the last financial year: 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 Electro Battery Company Limited or the value of its assets, or its ability to pay its liabilities within the next twelve months.
Sd/- Mrs. Umme Bushrah
Chairman
Sd/- Md. Rafique Ullah
Nominee Director of ICB Sd/-
Md. Emad Uddin Nominee Director of EMCL
Sd/- Istak Ahmmed
Independent Director Sd/-
Md. Ansar Uddin Director & Managing Director
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 or information memorandum, unaudited financial statements for each of the said quarters duly authenticated by the CEO and CFO of the issuer or information memorandum, unaudited financial statements for each of the said quarters duly authenticated by the CEO and CFO of the issuer; No quarter of financial year of the issuer ended after the period ended in the audited financial statements as disclosed in the prospectus. dd) Factors that may affect the results of operations. There are no such factors that may affect the results of operations. Section (vii): Management’s discussion and analysis of financial condition and results of operations (a) Overview of business and strategies: Electro Battery has modern machineries and technology that ensures quality products. It is the cost leader for cheaper labor and special quality. The Company tries to produce goods with cheap cost so that it can get competitive advantages over its competitors. EBCL also believe in providing customizing products to its customer as per need basis so that the company can get maximum market share of its products. Diversification is a continuous process here and it produces wide range of solar, industrial, VRLA, easy bike, automotive, forklift & rickshaw battery for existing and potential customers. Maintain state-of-the-art manufacturing facilities for ensuring best quality products to the customers. EBCL have ISO Certificate 9001:2008 (quality management) standards that are proven effective. The Company always seeks for new opportunities to ensure sustainability and to give stable and long-term return to our investors. (b) SWOT Analysis: Company Background:
Name : Electro Battery Company Limited Industries served : Engineering Factory : Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka Registered office : 28 Dilkusha C/A, 19th Floor, Suite # 1901 & 1902, Dhaka-1000 Managing Director : Md. Ansar Uddin Revenue : 676,290,090 Net profit : 52,497,973 Employees : 160 Main competitors : Rahimafrooz Batteries Ltd., Hamko Industries Limited, Panna Battery Ltd., Rimso etc.
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Particulars Sl. SWOT Variables Description
Strengths
1 Modern machineries The Company is using modern machineries advance technology to produce quality products.
2 Employee benefits EBCL is providing better payment, bonus and food support to its employees during their duty. So, they are happy and committed to the company.
4 Corporate governance The Company exercise good corporate governance and proper delegation of power of the overall management.
5 Safety & security EBCL has adequate security and safety measure for any emergency.
6 Trained labor The Company has sufficient trained labor force both male and female.
7 Low labor cost Comparatively cheaper labor cost from the locality.
8 Raw material supply Trouble free supply of raw material for processing with a wide range of dedicated manufacturers and suppliers.
Weakness
1 Higher interest rate Comparatively higher interest rate on project loan for investment in high value projects.
2 Depreciation The production includes allocation of depreciation on some unutilized resources.
3 Maintenance Maintenance of machineries takes time.
4 Loss in training labor Training and other facilities for unskilled workers sometimes ends in loss.
Opportunity
1 Productivity increase Further increase of productivity, quality and design can minimize cost and maximize profit.
2 Lower cost Comparatively lower cost of raw material and labor. 3 Growth Sharing the growth of neighboring countries. 4 Low transportation Low transportation cost of raw materials.
5 Raw material import Import of raw material in big quantity allows lower cost and favorable trade term.
6 Research & development Company’s own laboratory research can develop new formula
for better quality and price.
7 Government policies Any future change in Government policies may be threat for the Company to survive.
Threats
1 Political unrest Political unrest can be a big threat for the company. 2 Power crisis Crisis in power supply is also a threat to its operation. 3 Import dependency Fully dependent on imported raw material. 4 Entrance of new technology In industrial sector entrance of new technology is always a threat
(c) Analysis of the financial statements of last five years with reasons 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 & after tax, EPS etc.
(Amount in BDT) Particulars 30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013 Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Other income - - - - - Total income 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Cost of goods sold 552,958,920 508,897,947 444,695,721 302,466,351 388,061,654 Financial Expenses 14,913,660 30,801,219 30,649,541 29,241,384 39,975,800 Depreciation 10,074,489 6,145,403 Amortization expense - - - - - Other expense - - - - - Changes of inventories 47,900,230 46,666,023 1,861,433 (6,416,445) (12,940,486) Profit before Income Tax 77,127,972 57,842,455 46,232,829 24,111,299 37,330,408 Net Profit after Tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505 Earnings per Share 2.07 1.55 1.24 0.65 0.96
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Revenue: Increase in installed and utilized capacity of plant and machineries, capacity utilization, supply of sufficient working capital, economics of scale, management expertise, high quality and cost leader, rising market demand increased the revenue of the Company remarkably. Other income: There is no other income during last 5 years. Total income: Since Revenue is increased, so naturally total income has been increased. Cost of goods sold: The costs of materials to revenue are consistent over the years. Financial expenses: Main source of debt finance of the Company is short term & long term bank loan. Finance cost of the company consist of interest on long term & short term loan and bank charges. As the amount of bank loan changes the finance cost also changes accordingly. Depreciation: Depreciation charged on fixed assets over its useful life. It has been calculated using diminishing balance method. Depreciation changes with changes (addition) in fixed assets year to year. Other Expenses: The company did not incur any other expenses other than regular expenses during the last five years. Change in Inventory Inventory turnover and inventory holding period is very much important for Electro Battery Company Limited. Change in cost, demand-supply, production, delivery of products and customer retention policy caused changes in inventory and its holding period. Net profit after tax & EPS: 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 three years on the above matters. (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 or uncertainties that shall have a material impact on the Company’s future
business except for those which are natural and beyond control of human being. Earnings per Share are properly calculated through using weighted average number of ordinary shares for each year. (e) Trends or expected fluctuations in liquidity: There are no trends of 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 agreements those have or likely to have a current or future effect on financial condition.
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Section (viii): Directors and officers (a) Name, Father’s name, age, residential address, educational qualification, experience and position of each of
the directors of the company and any person nominated or represented to be a director, showing the period for which the nomination has been made and the name of the organization which has nominated him:
Name Father’s name Age (years) Residential address Qualification Experience
(years) Position
Mrs. Umme Bushrah
Dr. Munshi Siddique Ahmed
55 House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
BA (Hon) 25 Chairman
Md. Ansar Uddin
Late Md. Wahed Ali
59 House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
B. Sc. Engr. (E & E)
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Director & Managing Director
Md. Rafique Ullah
Late Asad Ullah Patwary
54 41/1, B-4, Green Road, New Market, Dhanmondi, Dhaka- 1205
40 110, Free School Street, Kathalbagan Bazar, New Market, Dhaka-1205
MBA 10 Independent
Director
(b) Date of first directorship and expiry of current tenure of the directors:
Name Position Date of becoming director
for the first time Expiry of current term
Mrs. Umme Bushrah Chairman Inception Next AGM Md. Ansar Uddin Director & Managing Director Inception Next AGM Md. Rafique Ullah Nominee Director of ICB 14.03.2017 Next AGM Md. Emad Uddin Nominee Director of EMCL 25.07.2017 Next AGM Istak Ahmmed Independent Director 25.07.2017 Next AGM
(c) Name of interest and involvement in other business/organization of directors:
Name of Directors & Position Directorship/Sponsorship/ Ownership with
other Companies Type of Business Position
Mrs. Umme Bushrah Electro Solar Power Limited Solar panel
Director Md. Ansar Uddin Director Mrs. Umme Bushrah
Electro Mechanical Service Limited Mechanical Service Director
Md. Ansar Uddin Director Mrs. Umme Bushrah
EM Power Limited Diesel Generator Director
Md. Ansar Uddin Director Mrs. Umme Bushrah
Energy Meter Company Limited Meter
Director Md. Ansar Uddin Director Md. Emad Uddin, Nominee Director of EMCL
Director
Md. Ansar Uddin Electro Transformer & Switchgear Company Limited
Transformer & Switchgear
Director Mrs. Umme Bushrah Director Md. Ansar Uddin
Electro Led & Lights Limited Led Lights Director
Mrs. Umme Bushrah Director Istak Ahmmed Independent Director of EBCL
Meghna Petroleum Ltd Petroleum Director
57
(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 of that issuer: There is no involvement of any director of the EBCL except Mr. Istak Ahmmed is director of a listed s Meghna Petroleum Ltd.
Name of the Issue Listing Year Issue Price Dividend Payment History 2016 2015 2014
Meghna Petroleum Ltd. 2007 10.00 105% C 105% C 10% B (e) Family relationship (father, mother, spouse, brother, sister, son, daughter, spouse’s father, spouse’s mother,
spouse’s brother, spouse’s sister) among the directors and top five officers: There is no relationship among the directors of Electro Battery Company Limited except Chairman, Mrs. Umme Bushrah is the wife of Director and Managing Director Md. Ansar Uddin and Md. Emad Uddin is son of Md. Ansar Uddin & Mrs. Umme Bushrah. (f) Brief description of other businesses of the directors:
Name of Directors & Position Directorship/Sponsorship/ Ownership with
other Companies Type of Business Position
Mrs. Umme Bushrah Electro Solar Power Limited Solar panel
Director Md. Ansar Uddin Director Mrs. Umme Bushrah
Electro Mechanical Service Limited Mechanical Service Director
Md. Ansar Uddin Director Mrs. Umme Bushrah
EM Power Limited Diesel Generator Director
Md. Ansar Uddin Director Mrs. Umme Bushrah
Energy Meter Company Limited Meter
Director Md. Ansar Uddin Director Md. Emad Uddin, Nominee Director of EMCL
Director
Md. Ansar Uddin Electro Transformer & Switchgear Company Limited
Transformer & Switchgear
Director Mrs. Umme Bushrah Director Md. Ansar Uddin
Electro Led & Lights Limited Led Lights Director
Mrs. Umme Bushrah Director Istak Ahmmed Independent Director of EBCL
Meghna Petroleum Ltd Petroleum Director
(g) Short bio-data of the directors: 1. Mrs. Umme Bushrah, Chairman Umme Bushrah, daughter of Dr. Munshi Siddique Ahmed & Late Mrs. Foyezunnesa Latifa Ahmed and wife of Md. Ansar Uddin, was born in Madaripur, in 1962. She is one of the sponsor Chairman of the Company having more than 25 years of experience in service and business. Umme Bushrah obtained BA (Hon) degree from the University of Dhaka. 2. Md. Ansar Uddin, Director & Managing Director Engr. Md. Ansar Uddin, son of Late Md. Wahed Ali & late Mrs. Boru Bibi was born in Madaripur, in 1958. He has completed B. Sc. Engr. (E & E) degree from Khulna Engineering College, Dhaka. Mr. Md. Ansar Uddin is one of the sponsor directors of Electro Battery Company Limited. He is also the Managing Director of the Company. He has a vast experience of more than 31 years in industry and has sound knowledge and technical quality in the relevant area. He is also the head of production of the Company. Mr. Md. Ansar Uddin is involved in many social and cultural organizations. 3. Md. Rafique Ullah, Nominee Director of ICB Mr. Md. Rafique Ullah is nominee director of ICB. He was born in 1962. He is son of Late Asad Ullah Patwary and Late Hasina Akter. He is Deputy General Manager of Investment Corporation of Bangladesh.
58
4. Md. Emad Uddin, Nominee Director of EMCL Mr. Emad Uddin is nominee director of EMCL. He is son of Md. Ansar Uddin & Mrs. Umme Bushrah. He was born in 1990. He has completed BBA from NSU and MBA from AIUB. At present he is working as AGM (procurement) of Electro Group. 5. Istak Ahmmed, Independent Director Mr. Istak Ahmmed is the Independent Director of Electro Battery Company Limited. He was born in November 16, 1976. He is son of Mr. Mohammad Hossain and Mrs. Ambia Hossain. He is the Director of Meghna Petroleum Ltd. and Chairman of Water Aid Ltd. (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 Electro Battery Company Limited nor any of its sponsors/ directors or shareholders who hold 10% or more shares in paid-up capital of the issuer is loan defaulter in terms of the CIB report of Bangladesh Bank. (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 CEO, MD, CFO, CS, 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:
Name Position Qualification Age
(Years) Date of joining
Experience Salary (BDT)
Years Past employment
Md. Ansar Uddin Managing Director B. Sc. Engr.
(E & E) 58 Inception 28 Electro Group 1,980,000
M. A. Halim CFO MBA 61 1/1/2010 31 Electro Group 1,197,000 Md. Shihab Mahmud Company Secretary MBA 34 10 Electro Group 730,800
Syed Shafiqul Hasan Executive Director
Marketing MBA 39 01/09/2015 19 Electro Group 1,008,000
Abdul Mannan Head of Operation Diploma 45 02/01/2005 19 Electro Group 642,600 Md. Feroz Ahmed Manager Marketing M.Sc 35 20/10/2014 8 Orion Pharma 252,000 Md. Mokbul Hossain AGM (Commercial) M.com 44 5/2/2002 23 Electro Group 403,200
Md. Mizanur Rahman Deputy Manager
(IT) B.sc Eng. 34 12/10/2014 8
Airtel Bangladesh Ltd.
441,000
(j) Changes in the key management persons during the last three years. Any change otherwise than by way of retirement in the normal course in the senior key management personnel particularly in charge of production, planning, finance and marketing during the last three years prior to the date of filing the information memorandum. If the turnover of key management personnel is high compared to the industry, reasons should be discussed: Changes in the key management persons during the last three years:
Md. Rafique Ullah appointed as nominee director of ICB on 14.03.2017. Ansar Uddin resigned from nominee director of EMCL on 25.07.2017. Emad Uddin appointed as nominee director of EMCL on 25.07.2017. Istak Ahmmed appointed as independent director on 25.07.2017.
59
(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:
(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.:
Name Acquisition of control
Date of acquisition
Terms of acquisition
Consideration paid for such acquisition
Md. Rafique Ullah Nominee Director of ICB 16.03.2017 No terms of acquisition
Cash Md. Emad Uddin Nominee Director of EMCL
09.12.2015 16.03.2017
Istak Ahmmed Independent Director N/A N/A N/A (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/ managed: All the sponsors/ directors have adequate experience to carry out the existing line of business. (n) Interest of the key management persons: There is no other interest with the key management except board meeting attendance fees received by the directors and Md. Ansar Uddin, Director & Managing Director of EBCL is getting remuneration for his service. (o) All interests and facilities enjoyed by a director, whether pecuniary or non-pecuniary: No other pecuniary or non-pecuniary facilities enjoyed by the directors other than board meeting attendance fees received by the directors and remuneration received by Chairman, Mrs. Umme Bushrah and Managing Director, Md. Ansar Uddin. (p) Number of shares held and percentage of shareholding (pre-issue):
Name Father’s
name Address Age Qualification Experience
Past position
Present position
Holding in other venture
Mrs. Umme Bushrah
Dr. Munshi Siddique Ahmed
House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
55 BA (Hon) 25 Chairman Chairman
Not involved in
other venture
Md. Ansar Uddin
Md. Wahed Ali
House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
59 B. Sc. Engr. (E
& E) 31
Director & MD
Director & MD
Not involved in
other venture
Sl# Name of shareholder Address No. of shares Percentage (%) Shareholdings by the directors
1 Mrs. Umme Bushrah Chairman
House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
2,690,000 7.27%
2 Md. Ansar Uddin Managing Director
House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
5,460,000 14.76%
3 Md. Rafique Ullah Nominee Director of ICB
BDBL Bhaban (14-21th Floor), 8 DIT Avenue, Motijheel, Dhaka-1000
8,000,000 21.63%
4 Md. Emad Uddin Nominee Director of EMCL
House # 492, Road # 9, DOHS Baridhara, Dhaka-1206
7,062,808 19.09%
5 Istak Ahmmed Independent Director
110, Free School Street, Kathalbagan Bazar, New Market, Dhaka-1205
N/A N/A
Total no of shareholding of the directors 23,212,808 62.75%
Total no of shares 36,992,000
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(q) Change in board of directors during last three years: The following changes in the board of directors were happened during last three years: Mr. Ansar Uddin had been resigned and Mr. Emad Uddin appointed as nominee director of EMCL on 25.07.2017. Istak Ahmmed had been appointed as independent director on 25.07.2017. Md. Rafique Ullah had been appointed as nominee director of ICB on 14.03.2017. (r) Director’s engagement with similar business: None of the Directors are involved with similar business. Section (ix): Certain relationships and related transactions a) TO WHOM IT MAY CONCERN This is to certify that, the company does not have any transaction during the last five years, or any proposed transaction, between the issuer and any of the following persons: 1. Any director or sponsor or executive officer of the issuer; 2. Any person holding 5% or more of the outstanding shares of the issuer; and 3. Any related party or connected person of any of the above persons;
Except the transactions described in the following table:
Director Remuneration:
Name Position Amount in (BDT)
30.06.2017 30.06.2016 30.06.2015 30.06.2014 30.06.2013 Mr. Md. Ansar Uddin Managing Director 19,80,000 - - - Board meeting attendance fees 20,000 Total 20,00,000 - - -
The above balance is certified on the basis of books of accounts, records are other supporting documents for the period from 01 July 2012 to 30 June 2017. Sd/- Dated: 12 October 2017 Place: Dhaka
AHMAD & AKHTAR Chartered Accountants
(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/ 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 Section (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 any Directors or any person connected with the Directors of Electro Battery Company Limited.
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Section (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:
(Amount in BDT) Name Designation Paid as 30.06.2016
Md. Ansar Uddin Managing Director Remuneration 1,980,000 M. A. Halim CFO Salary 1,197,000 Md. Shihab Mahmud Company Secretary Salary 730,800 Syed Shafiqul Hasan Executive Director Marketing Salary 1,008,000 Abdul Mannan Head of Operation Salary 642,600
(b) Aggregate amount of remuneration paid to all directors and officers as a group during the last accounting year:
(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: Md. Ansar Uddin, Director & Managing Director of Electro Battery Company Limited have been receiving remuneration for his services to the company. (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 of directors of the Company received Tk. 20,000.00 (Taka twenty thousand) only as board meeting attendance fees during the accounting year June 30, 2017. (e) Any contract with any director or officer providing for the payment of future compensation: There is no such contract between the company and any of its 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: Electro Battery Company Limited has no plan to substantially increase the remuneration paid to its directors and officers in the current year except annual increment. (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. Section (xi): Options granted to directors, officers and employees The Company has not offered any option for issue of shares to any of the officers, directors and employees or to any outsiders.
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Section (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: Directors and subscribers to the Memorandum have not received anything of value or to be received from inception of the company except the remuneration by Md. Ansar Uddin, Director & Managing Director of the Company as mentioned below:
(Amount in BDT) Name Description 30-06-2017 30-06-2016 30-06-2015 30-06-2014 30-06-2013
Md. Ansar Uddin Remuneration 1,980,000 - - - - (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: No assets acquired or to be acquired from the director or sponsor.
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Section (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 by such ownership:
Sl. Name of subscriber Address BO ID Shares % 1 Md. Ansar Uddin 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063671753 5,460,000 14.76% 2 Mrs. Umme Bushrah 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063669861 2,690,000 7.27% 3 Energy Meter Company Limited 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063669463 7,062,808 19.09% 4 ICB BDBL Bhaban (14-21th Floor), 8 DIT Avenue, Motijheel, Dhaka-1000 1201530057974026 8,000,000 21.63% 5 Electro Solar Power Ltd. 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063670783 10,000 0.03% 6 EM Power Ltd. 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063671017 7,247,192 19.59% 7 Electro Led & Lights Ltd. 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063671266 10,000 0.03% 8 Fahima Akter Flat-B-3, 28 Free School Street, Hatirpool, Dhaka. 1605070058683102 1,000 0.00% 9 Mohammad Mostafizur Rahman 73/G-1, Central Road, Flat # 6/A, Dhanmondi, Dhaka 1605070043500637 1,000 0.00% 10 Electro Mechanical Service Ltd. 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 1605070063670229 10,000 0.03% 11 Ishtiaq Ahmed Civil A/A C/A, Flat A1, 34 New Eskaton, Dhaka 1202490000226422 50,000 0.14% 12 Nirzar Kanti De 321, Muradpur High School Road, Po- Gandaria, P.S.-Kadomtali, Dhaka-1204 1202160002007281 20,000 0.05% 13 Md. Ali Hossain Prodhania 14-14/1, Dilu Road, Flat D-3, New Eskaton ,Dhaka 1605070061493491 50,000 0.14% 14 Md. Saiful Islam Helaly 73/G-1, Central Road, Flat # 6/A, Dhanmondi, Dhaka 1605070043500637 300,000 0.81% 15 Khan Md. Naim 914/4, Shahid Bag , Dhaka-1217 1201510034196909 100,000 0.27% 16 Md. Manarul Haque 5/21,Shaheed Salimullah Road , 3rd Floor, Mohammadpur, Dhaka 1605070046067897 100,000 0.27% 17 Apel Mahmud H-5, R-4, Rupnagar Housing Estate , Mirpur-2, Dhaka-1216 1203680040800659 50,000 0.14% 18 Mohammed Ishaque M/S Alam & Brothers, 4/2 Master Mensuion, Terri Bazar, Chittagong 1601880028407188 50,000 0.14% 19 Syed Rafiqul Haq Flat A-4, Plot-365, R # 6, Mirpur DOHS, Dhaka 1205700058597361 300,000 0.81% 20 Habibullah Al Amin 4, New Eskaton Road, Islami Bank Bangladesh Ltd 1603700003067416 20,000 0.05% 21 Sk. Md. Akramuzzaman 73/G-1, Central Road, Flat # 6/A, Dhanmondi, Dhaka 1605070062596251 100,000 0.27% 22 Md. Toufiqur Rahman 254, South Goran, Shantipur, Dhaka-1219 1605070043500637 50,000 0.14%
23 Md. Ahad Sumon Standard Bank Ltd. H.O. Chamber Building (3rd Floor), 122-124, Motijheel, Dhaka-1000
1605070043500637 50,000 0.14%
24 Mohammad Rafiqul Islam 914/2-B Shahidbagh, Post-Shantinagar, Dhaka-1217 1205700058597361 50,000 0.14%
25 MTB Capital Discretionary Portfolio Management
MTB Tower (Level 3), 111 Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka 1000 1605070043500637 500,000 1.35%
26 Mohammad Fakhrul Alam 58/E, Mohakhali, Customs Officers Quarter, Arani Bhaban, Banani Road No-2, Dhaka
1205150062036961 100,000 0.27%
27 Md. Iftekharul Amin Room # 203, IBA, University of Dhaka 1203880057018748 100,000 0.27%
40 10 N/A 110241761175 Nill N/A Director of Meghna
Petroleum Ltd.
66
(c) The average cost of acquisition of equity shares by the directors certified by the auditors: Certificate on average cost of acquisition of equity share by the Directors of Electro Battery Company Limited This is to certify that the average cost of acquisition of equity shares by the Directors of Electro Battery Company Limited have been allotted at face value in cash and bonus. The average cost of acquisition of equity by the directors is Tk. 10.00 each. Name-wise shareholding position, allotment date and consideration are given below:
* The Company has subdivided the face value of its share from Tk.100/- to Tk.10/- by passing a special resolution in its Extra Ordinary General Meeting held on October 01, 2015. The above information is based on books and records provided by the management.
Sd/- Dated: 12 October 2017 Place: Dhaka
AHMAD & AKHTAR Chartered Accountants
67
(d) A detail description of capital built up in respect of shareholding (name-wise) of the issuer’s sponsors/ directors:
Name of the Director
Position
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
Mrs. Umme Bushrah
Chairman 19.11.2008 Cash Ordinary
shares 50,000
10/- 10/-
2,690,000 7.27% 4.52% Own 09.12.2015 Bonus 2,640,000
Md. Ansar Uddin
Director & MD 19.11.2008 Cash Ordinary
shares 100,000
5,460,000 14.76% 9.18% Own 09.12.2015 Bonus 5,360,000
* Denomination of the ordinary shares of Electro Battery Company Limited has been changed from Tk.100 to Tk.10 each on October 01, 2015.
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(e) Detail of shares issued by the company at a price lower than the issue price: No shares have been issued by the company at a price lower than the issue price. (f) History of significant (5% or more) changes in ownership of securities from inception:
Section (xiv): Corporate governance (a) Disclosure by the issuer regarding the compliance position of Corporate Governance Guidelines of the Commission: This is to declare that Electro Battery Company Limited has been complied with the requirements of the applicable regulations of Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) and accordingly constitutes several committees under the board for good governance. A certificate of compliance from competent authority has been incorporated accordingly. Sd/- Md. Ansar Uddin Managing Director Electro Battery Company Limited (b) Certificate of compliance on corporate governance of Electro Battery Company Limited
Certificate of Compliance to the Shareholders of ELECTRO BATTERY COMPANY LIMITED
On conditions of Corporate Governance Guidelines We have examined the compliance status of Electro Battery Company Limited regarding conditions of corporate governance guidelines issued by the Bangladesh Securities and Exchange Commission as stipulated in condition no. 7(i) of the BSEC notification no. SEC/CMRRCE/2006-158/134/Admin/44 dated August 7, 2012. The responsibility for compliance with the conditions of Corporate Governance Guidelines is that of the Board of Directors of the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the statement of compliance reflects the status of the Company’s compliance with the provisions of the conditions of
Corporate Governance Guidelines and report if it does not. Based on our review, we certify that nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance, in all material respects, with the best prac tices contained in the conditions of Corporate Governance as applicable to the Company for the year ended June 30, 2017 Sd/- Ramendra Nath Basak, FCA Partner Shiraz Khan Basak & Co. Chartered Accountants Date: 12 October 2017
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ELECTRO BATTERY COMPANY LIMITED CORPORATE GOVERNANCE COMPLIANCE STATUS REPORT
UNDER CONDITION NO.-7.00 Status of compliance with the conditions imposed by the Commission’s Notification No BSEC/ CMRRCD/ 2006 - 158/ 134/ Admin/ 44 dated 07 August 2012 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 1.0 Board of Directors
1.1 Board’s Size: The number of board members shall not be less than 5 (Five) and more than 20 (Twenty)
√
1.2 Independent Director
1.2 (i) Independent Director: At least one fifth (1/5) of the total number of directors in the company’s board shall
be independent directors √
1.2 (ii) a) Does not hold any share or hold less than one percent (1%) shares of total paid up capital
√
1.2 (ii) b) Not connected with the company’s Sponsor/ Director/
Shareholder who holds 1% or more shares of the total paid up capital on the basis of family relationship
√
1.2 (ii) c) Do not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/ associated Companies
√
1.2 (ii) d) Not a member, director or officer of any stock exchange.
√
1.2 (ii) e) Not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market.
√
1.2 (ii) f) Not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of any statutory audit firm.
√
1.2 (ii) g) Not be an independent directors in more than 3 (three) listed companies.
√
1.2 (ii) h) Not convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a non-bank financial institution (NBFI).
√
1.2 (ii) i) Not convicted for a criminal offence involving moral turpitude.
√
1.2 (iii) Nominated by the board of directors and approved by the shareholders in the AGM
√
1.2 (iv) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days
√
1.2 (v) The board shall lay down a code of conduct of all board members and annual compliance of the code to be recorded
√
1.2 (vi) Tenure of office of an independent director shall be for a period of 3 (three) years which may be extended for 1 (one) term only.
√
1.3 Qualification of Independent Director (ID)
1.3 (i) Independent Director shall be knowledgeable individual with integrity
√
1.3 (ii) The independent director must have at least 12 (twelve) years of corporate management/ professional experiences
√
70
1 3 (iii) In special cases qualification may be relaxed N/A N/A
1.4 Chairman of the board and CEO be different person
√
1.5 Directors report to shareholders
1.5 (i) Industry outlook and possible future developments in the industry
√
1.5 (ii) Segment-wise or product-wise performance N/A 1.5 (iii) Risks and concerns √
1.5 (iv) Discussion on cost of goods sold, gross profit margin and net profit margin
√
1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss
√
1.5 (vi) Basis for related party transaction- a statement of all related party transactions should be disclosed in the annual report
√
1.5 (vii) Utilization of proceeds from public issues, right issues and/ or through any others instruments
√
1.5 (viii) An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Offer, Direct Listing etc.
N/A N/A
1.5 (ix)
If significant variance occurs between Quarterly
Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report
√
1.5 (x) Remuneration to directors including independent directors
√
1.5 (xi)
The financial statements prepared by the management
of the issuer company present fairly its state of affairs, the results of its operation, cash flows and changes in
equity
√
1.5 (xii) Proper books of account of the issuer company have been maintained
√
1.5 (xiii)
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)
International Accounting Standards (IAS)/ Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standards (IFRS) /Bangladesh Financial Reporting Standards (BFRS), 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) The system of internal control is sound in design and has been effectively implemented and monitored
√
1.5 (xvi)
There are no significant doubts 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 thereof should be disclosed
√
1.5 (xvii) Significant deviations from the last year’s operating
results of the issuer company shall be highlighted and the reasons thereof should be explained
√
1.5 (xviii) Key operating and financial data of at least preceding
5 (five) years shall be summarized √
1.5 (xix) If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given
√
1.5 (xx) Number of Board meetings held during the year and attendance by each director shall be disclosed
√
1.5 (xxi) The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by:
71
1 5 (xxi) a) Parent/ Subsidiary/ Associated Companies and other related parties (name wise details):
N/A
1 5 (xxi) b)
Directors, Chief Executive Officer, Company
Secretary, Chief Financial Officer, Head of Internal
Audit and their spouses and minor children (name wise details):
√ -
1 5 (xxi) c) Executives (top five salaried employees of the company other than stated in 1 5(xxi)b):
√ -
1 5 (xxi) d) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details)
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1 5 (xxii) In case of appointment/ re-appointment of a director the company shall disclose the following information to the shareholders:
1 5 (xxii) a) A brief resume of the Director √ 1 5 (xxii) b) Nature of his/ her expertise in specific functional areas √
1 5 (xxii) c) Names of companies in which the person also holds the directorship and the membership of committees of the board
√
2 0 Chief financial officer, head of internal audit & company secretary
2 1 Appointment of CFO, head of internal audit and company secretary and their clearly defined roles, responsibilities and duties
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2 2 Attendance of CFO and the company secretary at board of directors meeting
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3 Audit committee:
3 (i) Audit committee shall be the sub-committee of the board of directors
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3 (ii)
The audit committee shall assist the board of Directors 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
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3 (iii) The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing
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3 1 Constitution of the Audit Committee
3 1 (i) The Audit Committee shall be composed of at least 3 (three) members
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3 1 (ii) Constitution of Audit Committee with Board Members including one Independent Director
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3 1 (iii)
All members of the Audit Committee should be “financially literate” and at least 1 (one) member shall
have accounting or related financial management experience
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3 1 (iv) Filling of casual vacancy in committee √
3 1 (v) The Company Secretary shall act as the secretary of the Committee
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3 1 (vi) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director
√
3 2 Chairman of the Audit Committee
3 2 (i) Chairman of the Audit Committee shall be an Independent Director
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3 2 (ii) Chairman of the audit committee shall remain present in the Annual General Meeting (AGM)
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3 3 Role of Audit Committee 3 3 (i) Oversee the financial reporting process √ 3 3 (ii) Monitor choice of accounting policies and principles √ 3 3 (iii) Monitor Internal Control Risk management process √ 3 3 (iv) Oversee hiring and performance of external auditors √
3 3 (v) Review along with the management, the annual financial statements before submission to the board for approval
√
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3 3 (vi) Review along with the management, the quarterly and half yearly Financial Statements before submission to the Board for approval
√
3 3 (vii) Review the adequacy of internal audit function √
3 3 (viii) Review statement of significant related party
transactions submitted by the management √
3 3 (ix) Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors
√
3 3 (x) Disclosure about the uses/applications of funds raised by IPO/ RPO/ Right issue.
N/A
3 4 Reporting of the Audit Committee 3 4 1 Reporting to the Board of Directors
3 4 1 (i) The Audit Committee shall report on its activities to the Board of Directors
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3 4 1 (ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:
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3 4 1 (ii) a) Report on conflicts of Interests √
3 4 1 (ii) b) Suspected or presumed fraud or irregularity or material defect in the internal control system:
√
3 4 1 (ii) c) Suspected infringement of laws, including securities related laws, rules and regulations:
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3 4 1 (ii) d) Any other matter which shall be disclosed to the Board of Directors immediately
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3 4 2 Reporting of anything having material financial impact to the Commission
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3 5 Reporting to the Shareholders and General Investors √ 4 External/ statutory auditors: 4 (i) Appraisal or valuation services or fairness opinions √
4 (ii) Financial information systems design and implementation
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4 (iii) Book-keeping or other services related to the accounting records or financial statements
4 (vii) Any other service that the Audit Committee determines
√
4 (viii)
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
√
5 Subsidiary company
5 (i)
Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company
N/A
5 (ii) At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company
N/A
5 (iii) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company
N/A
5 (iv) The Minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the Subsidiary Company also
N/A
5 (v) The Audit Committee of the holding company shall also review the Financial Statements, in particular the investments made by the Subsidiary Company
N/A
6 Duties of chief executive officer (CEO) and chief financial officer (CFO):
6 (i) They have reviewed financial statements for the year and that to the best of their knowledge and belief:
√
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6 (i) a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading
√
6 (i) b) 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 √
6 (ii)
There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct
√
7 Reporting and compliance of corporate governance:
7 (i) Obtain certificate of compliance of conditions of corporate governance guidelines of the Commission
√
7 (ii) Annexure attached in the Directors' report √ Sd/- Md. Ansar Uddin Managing Director Electro Battery Company Limited (c) Names of the members of both audit committee and remuneration committee are as follows:
Audit committee members Remuneration committee members Istak Ahmmed, Chairman Mrs. Umme Bushrah, Member Md. Ansar Uddin, Member
Md. Ansar Uddin, Chairman Mrs. Umme Bushrah, Member M A Halim, Member
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. 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.
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Section (xv): Valuation report of securities prepared by the issue manager The management of Electro Battery Company Limited consultation with the issue manager fixed the offering price of the ordinary shares at Tk.10.00 each (at par) based on the calculations and justifications as stated below:
Methods followed Amount in BDT Method-1: Net assets value per share 11.74 Method-2: Historical earning based value per share 20.79 Method-3: Average market price per share of similar stocks 93.93
Calculation of methodologies Method-1: Calculation of net asset value (NAV) per share:
As per audited financial statements Particulars 30-06-2017 Total assets 615,311,704 Less: Total outside liabilities 181,141,003 A. Net assets 434,170,701 B. Number of ordinary shares outstanding 36,992,000 Net asset value (NAV) per share (A/B) 11.74
Method-2: Historical earning based value per share: Historical earning based value calculated on the basis of weighted average net profit after tax for immediate preceding five years. Information extracted from audited financial statements.
Total 47,434,000 156,785,966 1.00 47,235,319 Latest number of ordinary shares outstanding 36,992,000 Weighted average earnings per share 1.28 Average DSE Market P/E (A) 16.28 Historical earning based value 20.79
(A) Average Price Earnings of Market & Sectorial:
Month Sectorial Market September-2017 20.71 16.31
August-2017 26.27 16.33 July-2017 25.25 16.19
Average 24.08 16.28 Considered lower of Market & Sectorial P/E multiple i. e. 16.28
Sources: Monthly review published by Dhaka Stock Exchange Ltd.
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Method 3: Average market price per share of similar stocks: Last one year (month ended) closing share price of similar stocks
Average 93.93 Sources: Monthly review published by Dhaka Stock Exchange Ltd. Electro Battery Company Limited is growing day by day and has a track record of profitability over the years. It has a significant market share and it is a complied company. We have analyzed the financial statements of the company and calculated the above values to set its offer price. After consultation with the company the offer price is set at Tk.10 each (at par) which we think is justified. Sd/- Khairul Bashar Abu Taher Mohammed Chief Executive Officer and EVP MTB Capital Limited Section (xvi): Debt securities Electro Battery Company Limited has not issued or not planning to issue any debt securities within next six months. Section (xvii) Parties involved and their responsibilities, as applicable
Parties involved with EBCL Responsibilities
(a) Issue Manager MTB Capital Limited
The Issue Managers will act as the manager to the issue for the public issue as described in the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015.
(b) Underwriters (i) MTB Capital Limited (ii) GSP 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.
(c) Statutory Auditors AHMAD & AKHTAR Chartered Accountants
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) and other laws and regulations.
Section (xviii): Material contracts: The following are material contracts in the ordinary course of business, which have been entered into by the Company: (a) Major agreements entered into by the issuer: i) Underwriting agreement between the company and the underwriters. ii) Issue management agreement between the company and the manager to the issue. (b) Material parts of the agreements: Underwriting agreement: As per Rule 12 of the Bangladesh Securities of Exchange Commission (Public Issue) Rules, 2015, the board of directors of the issuer company has appointed the following underwriters to carry out the purpose of underwriting: (1) MTB Capital Limited (2) GSP Investments Limited. The Initial Public Offering (IPO) is for 22,500,000 ordinary shares of Tk. 10.00 each at par amounting to Tk. 225,000,000 of Electro Battery Company Limited. As per the guidelines of the Bangladesh Securities and Exchange Commission, 35% of the said amount i.e. 7,875,000 ordinary shares of Tk. 10.00 each at par amounting to Tk. 78,750,000.00 has been underwritten by the underwriters in the following proportion:
Name of underwriters No. of shares underwritten Amount underwritten (BDT) MTB Capital Limited 3,937,500 39,375,000 GSP Investments Limited 3,937,500 39,375,000
Major parts of underwriting agreement:
(i) The Company shall issue 22,500,000 Ordinary Shares of Tk. 10.00 per share for public subscription publishing a prospectus in accordance with the consent of the Bangladesh Securities and Exchange Commission and the provision of this Agreement.
(ii) As per guideline of the Bangladesh Securities and Exchange Commission, 35% of the IPO (i.e.: for Tk.
78,750,000.00) shall have to be underwritten by the underwriters, subject to the terms stated as follows:
The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 5 (Five) weeks from the date of subscription closer), if any of the following events occur:
(a) Upon closing of the subscription list it is found that the total number of valid applications (in case of under
subscription including the number of the underwriter) is less than the minimum requirement as specified in the listing regulations of the Stock Exchange(s) concerned: or
(b) At least 65% of the IPO is not subscribed.
(iii) 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 2.02 and providing for payment of underwriting commission 0.50% (zero point five zero percent) on the amount underwritten.
(iv) If and to the extent that the shares offered to the public by a Prospectus authorized hereunder shall not have been subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of subscription call upon the underwriters in writing with a copy of the said writing to the Bangladesh Securities and Exchange Commission, to subscribe the shares not so subscribed by the closing date and to pay for in cash in full, inclusive of any premium if applicable, for such unsubscribed shares within 15 (fifteen) days after being called upon to do so. The amount so received shall be credited to the share subscription account of the Company within the said period. If payment is made by Cheque/ Bank Draft by the Underwriter, it will be deemed that the Underwriter has not fulfilled his obligation towards his underwriting commitment under this Agreement, until such time as the Cheque/ Bank Draft has been encashed and the Company’s share subscription account credited.
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.
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Issue management agreement:
1. Issue Manager(s) Role
(i) Public offering: a. Act as issue manager and corporate advisor to Electro Battery Company Limited for their upcoming IPO. b. Advise on valuation and pricing of the IPO. c. Prepare the prospectus for the IPO. d. Advise and assist Electro Battery to arrange an underwriting syndicate for the IPO. e. Advise and assist Electro Battery in dealings with regulatory authorities and the stock exchanges. f. Advise on financial strategy for restructuring of offer and modification of projects, if required.
2. The issue manager shall ensure compliance of the Bangladesh Securities and Exchange Commission (Public
Issue) Rules 2015, Listing Rules of the Stock Exchanges, Companies Act 1994, Securities and Exchange Ordinance, 1969 and other relevant rules, regulations, practices, directives, guidelines etc.
3. Neither Electro Battery nor any person acting on its behalf will initiate any discussion concerning the object of
this Agreement, other than with its legal advisers, without first consulting with MTB Capital. EBCL and its management undertake to promptly inform MTB Capital of any inquiries they may receive in this regard. Neither EBCL nor any person acting on its behalf will, directly or indirectly, except through MTB Capital, sell, offer, attempt to offer to dispose of, or solicit any offer to buy, or otherwise approach or negotiate in respect of any matter covered by this Agreement and EBCL confirms that neither EBCL nor any person acting on its behalf has been engaged in any such matter prior to the date of this letter except as disclosed in writing to MTB Capital.
4. Any written or oral advice provided by MTB Capital in connection with its engagement is exclusively for the information of Electro Battery. Senior management of Electro Battery may not disclose such information to any third party or referred to public without the prior written consent of MTB Capital. MTB Capital agrees not to disclose, circulate or to refer to such advice publicly without the prior written consent of Electro Battery.
5. This Agreement shall be governed by, and construed in accordance with the Laws of Bangladesh. In connection with any legal proceedings arising with respect to this Agreement, Electro Battery and MTB Capital hereby irrevocably submit to the jurisdiction of the Bangladesh Courts.
6. All questions of differences whatsoever which may at any time hereinafter arise between the parties hereto or their respective representatives touching these presents or the subject matter hereof or arising out of or in connection thereto respectively and whether as to construction or otherwise shall be referred to a single arbitrator in case the parties agree upon one Arbitrator, otherwise two Arbitrators to be appointed by each party in accordance with the provisions of the Arbitration Act, 2001 (Act - I of 2001) or any statutory modification thereof for the time being.
(c) Fees payable to different parties entered into the agreements:
Sl# Particulars Fees/ Commission (BDT) a) Underwriting agreement with the aforesaid underwriters 0.50% on Underwriting Amount b) Issue management agreement with MTB Capital Limited 0.75% on Issue Size
Section (xix): Litigations, Fine or Penalty (a) There are no litigations including outstanding litigations against the issuer or any of its directors and no fine or penalty has been imposed by any authority regarding the followings: (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.
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(b) There are no outstanding cases filed by the company or any of its directors relating to the followings: (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.
Section (xx): Risk factors and management’s perceptions about the risks An investment in shares involves a high degree of risk. The Company operates in a field involving some internal/ external risk factors and among those some are avoidable others are beyond control which may cause loss. Investors should carefully consider all the information disclosed in this prospectus including the risks and uncertainties described below before making an investment decision in company’s shares. The management of Electro Battery Company Limited perceives the risk factors which are as follows: (i) Internal risk factors a) Credit risk: Credit risk is the risk of default on a debt. It may arise due to default by the borrower to pay the loan. In operating any business there are credit risks as there is always lending and borrowing between parties in the form of money and goods. Management perception: The Company has the ability to pay its own debts and thus no such risk will arise in near future. Credit sales and advance to suppliers, interest free advance against employees’ salary may also arise credit risk. The Company provide advance, credit facility to its loyal and reliable customers who have a good track record of credit and have the ability to repay the debt. The Company has dedicated credit collection team. To mitigate the credit risk, the management of the company follows strong credit control and collections policies. b) Liquidity risk: Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The Company may not be able to convert its current assets to cash or cash equivalent without a loss of capital or income. Management perception EBCL conducts liquidity management in a manner that maintains stability and flexibility in day-to-day funding activities. The Company manages its working capital in efficient way to maintain required liquidity. We are also controlling regular payment of cheque, cash inflow and outflow, maturity of deposits and our access to other funding sources as and when required. c) Risk associated with the issuer’s interest in subsidiaries, joint ventures and associates: Management perception: The Company has no subsidiary, joint ventures and associates. So, no such risk arisen. 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’s business: 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: Our management is always keen to find out new buyers which boost up the sales. We are not dependent on any particular or limited number of customers to operate our 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.
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Management perception: The Company has many suppliers of raw materials and thus, it gets competitive advantage of cheaper price of raw materials. It imports raw materials from different suppliers of different countries and maintaining a good relationship with its suppliers. The management of the company is aware about the risk and continues to search for low cost raw material suppliers from different countries. Electro Battery has alternative options for purchasing raw materials. If any supplier is unable or disagree to supply raw materials then the company will go for next best alternative supplier immediately. f) Risk of generating more than 20% revenue of the issuer’s 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: The Company has no sister concern, associate or subsidiary company, so no such risk will be arisen. g) Negative earnings, negative cash flows from operating activities, declining turnover or profitability, during last five years, if any: Management perception: The Company has positive earnings, increasing turnover and profitability during the last five years. We have been operating our business efficiently and growing day by day. We have positive operating cash flow in last four accounting years. However, there was negative operating cash flow in 2013. It happened due to business growth, increased inventories and receivables, advances, deposits and prepayments in those years that affected our operating cash flow. But it was not threat for us as a going concern. h) Loss making associate or subsidiary or group companies of the issuer: Subsidiary/group companies of the issuer are loss making, it affect the issuer and there is negative impact on cash flow of issuer and Balance Sheet as well. Management perception: The Company has no associate, subsidiary, group companies, so no such risk arises. i) Financial weakness and poor performance of the issuer or any of its subsidiary or associates: Any kind of financial weakness and poor performance of the issuer or any of its subsidiary or associates. Management perception: Sales is one of the key indicators of success of a business if there is good margin of profit. Electro Battery Company Limited has been experiencing with increasing sales growth which is boosting up the profitability for last three years. Current and quick ratios are also in favor of the company. Debt to Equity ratio is less than 1 and it is in decreasing trend which means that company is reducing its dependency on debt capital and we do not have any subsidiary. j) Decline in value of any investment: The value of any type of investment may decline. Management perception: The Company has no such investment. Therefore, no such risk arises. 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 Company has been using brand new machineries since inception. It has no plan to purchase second hand/ reconditioned machineries. Hence, no such risk arises. l) Adverse effect on future cash flow if interest free loan given to related party or such loans taken from directors may recalled: 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 loan are taken from directors, it will have an impact on the cash flow to pay off the loan to the Directors.
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Management perception: EBCL has neither provided any loan to related party nor taken any loan from such related parties. So, it is free from such risk. 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: The sponsors/ directors of the company are not involved with any other business in the same line business and none of its raw material suppliers or major customers are involved in such transaction. 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: All of the transactions of the company are conducted in a normal course of business. 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 or 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 threat. Management perception: There is no such agreement with any shareholders, sponsors or any agreement relating to debt or preference shares having restrictive covenants 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: Employee unrest is part of business and it is important to deal with labor unrest efficiently. EBCL has different incentive packages for their employees so that they can be beneficial to such package. Because they believe that employees are very important part of the business. q) Seasonality of the business of the issuer: It is the risk involving that company is not doing business round the year. Management perception: There is no significant seasonal aspect on the company’s business. 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 did not enter into such contact with any of its customers or suppliers. So, no such risk arises. s) Excessive dependence on debt financing which may adversely affect the cash flow: Management perception: EBCL has very good debt to equity ratio, debt to total asset ratio, time interest earned ratio, debt service ratio in the last five years. So, no such risk arises. 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 is of bad intention, excessive dependence will also affect the business.
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Management perception: Corporate Governance is well practiced in EBCL. The company also has a well-placed organogram. So any change in the key management can be replaced with capable professionals. 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: The Company does not have any contingent liabilities which may adversely affect financial condition. 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: The Company has different insurance coverage for all relating issues that are risky to operating our business. 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 to run the business, there will be negative impact on business and share price as well. Management perception: EBCL is a growing and profitable company. Going for listing also increases the image, compliance issues and overall business of the company. Directors are not involved in any other organizations. So, 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 positive cash flow from operating profit of the
business. If company cannot earn good amount of profit from operation, it is unlikely to pay dividend. Management perception: EBCL have been a profitable entity over a long time and the profit is on the uptrend. So we are in belief that we will be able to pay dividend from our earning 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: History of non-operation indicates weak operational management of the company. Non-operation leads to negative cash flow, incurring of losses and bankruptcy in worst case scenario. Management perception: We know that, if operation is closed for one day it can hamper supply to our customers. In any situation, we do not compromise with our operation. Our company is operating continuously from the inception to till date. For the smooth operation, we are very serious about our responsibilities towards our employees and workers. We have power supply back up with generator for uninterrupted operation as well. Such case did not happen in the history of our company. 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: Right now, EBCL has no plan to engage in 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: We are profitable entity over long time and we have been operating our business efficiently. Therefore, it is not risky in investing securities in comparison with other available investment option.
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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: No penalty or action taken by any regulatory authorities for non-compliance with provisions of any law. 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: If any kind of 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. Management perception: There is no litigation relating to VAT claims outstanding against our company. Tax status of the company is as follows:
Income Year Assessment Year Status 2016-2017 2017-2018 Preparing for return submission.
2015-2016 2016-2017 The assessment of the assesse (Company) has been completed up to the assessment year 2016-2017.
2014-2015 2015-2016 The assessment of the assesse (Company) has been completed up to the assessment year 2015-2016.
2013-2014 2014-2015 The assessment of the assesse (Company) has been completed up to the assessment year 2014-2015 & tax paid in full up to the assessment year 2013-2014
2012-2013 2013-2014 The assessment of the assesse (Company) has been completed up to the assessment year 2013-2014 and of Income Tax Ordinance, 1984 but tax did not paid in full.
dd) Registered office or factory building or place of operation is not owned by the issuer: Registered office & Factory building should be owned by the company. Otherwise, there is risk of hike in office & factory rent in the years to come and threat of shifting the office & factory as well. Management perception: Our factory & registered office is owned by us. ee) Lack of renewal of existing regulatory permissions or licenses: In this case company is not following the law to renew its all licenses. Management perception: All of the regulatory permission and licenses are up to date and duly renewed. 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: The Company is regular in holding AGM and paying interest in regular basis. It has sufficient retained earnings which are engaged for company business for its increased demand and growth. For further fund requirement, the company is going for public issue. It has a plan to declare good dividend to its investors after listing. It has does not have any subsidiary or associates and thus no such risk arisen. 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: Electro Battery Company Limited did not issue any shares at lower than the IPO offer price within one year.
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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: EBCL has no subsidiary or associates. No refusal of application for public issue of any securities of the EBCL's at any time by the commission. (ii) External risk factors may include among others:
a) Interest rate risk: Interest rate risk is associated with the fluctuations in market interest rates which cause a company’s cost of debt to increase. Changes in the Government’s monetary policy also tend to increase the interest rates. High rate of interest may
adversely affect the operating results and financial performance of the company with additional financial charges and squeezes the profit of the company. Management perception: The management of the company is always aware of the interest rates at which the debts of the company are being financed. Management finances both long-term & short-term funds at competitive rates. The Company has been repaying borrowed funds on a continuous basis to reduce such interest rate risk. The present trend of interest rate is negative which is favorable for the company. b) Exchange rate risk: Most of the raw materials used by Electro Battery Electrodes Limited are imported from abroad against payment of foreign currency. Unfavorable volatility or fluctuations of foreign currency to BDT exchange rate may have an impact on the cost structure and profitability of the company. Management perception: The risk of foreign exchange cannot be eliminated fully as we require imported raw materials. However, the management is always alert in minimizing the negative impact of currency fluctuation cost by looking for new sources of raw materials and continuously negotiating with suppliers for reducing price. It always takes steps to hedge all major currency dealings to safeguard the interest of the company. c) Industry risks: i. Market demand: Company’s sales and revenues are depended on the aggregate demand of its products. Any economic recession, changes in requirements, national income and other related factors may cause to decline the market demand of the company products. Management perception: World’s top class raw materials, best quality products, attractive price, strong brand loyalty of the company’s products
to its customers has enabled the company to capture significant market share in the sector. The Company is continuously penetrating into the market and upgrading the quality of the products to minimize the market risks. ii. Raw materials and energy costs: Instability in raw materials and energy costs may hamper the profitability of the company significantly. A recent government decision regarding escalation of electricity prices will put a huge pressure on the product cost of the local business. Management perception: Our management believes that efficient management of inventories, proper sourcing & timing, economic order quantity and efficient handling of credit facilities can reduce the cost of procurement. For power and electricity, Electro Battery Company Limited has own power generator for uninterrupted production. The electricity cost is same for all other competitors. So, it will be adjusted with price accordingly. d) Economic and political risks: Economic risks: The growth of the company could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, commodity and energy prices and various other factors. Any significant changes may adversely affect our business and financials.
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Management perception: Bangladesh economy is booming for last few years. Consistent industrial growth along with increased agricultural production has made the per capita income higher than that of recent years. In addition, favorable government policies and industry friendly policies by other regulatory bodies have proved to be congenial to the economy of the country. The management of the company is aware of such risks. Political risks: Bangladesh is prone to serious unrest in the political condition which produces hartal, road-block and many other barriers to the business. This could also push the cost of the product upwards. Management perception: In the post-independence period, Bangladesh has gone through a variety of political situations. But recently, a stable political atmosphere is prevailing in the country. Both the ruling and opposition parties are committed to the betterment of the country. Political parties are thinking for growth of the country. e) Market and technology related risks: Market risks refer to the risk of adverse market conditions affecting the sales and profitability of the company. Such as, shortage in raw material supplies, inefficient labor supplies, fall in product demand, etc. which signifies the adverse external and internal business environment. Those types of risks may hamper the success of the business. Technological development may obsolescence the old machineries which may hamper the profitability of the company’s overall
business. Management perception: Electro Battery has own research for market and new products to retain the existing market and to attract the new customers. EBCL has setup its project with modern brand new imported machineries. It has a plan for required BMRE/ expansion regularly, if required. It will continuously upgrade its machines and technology as required and any new one comes. So, the risk of obsolete technology is mitigated. f) Potential or existing Government regulations: The Company operates under Companies Act, Taxation policy adopted by NBR, Bangladesh Securities and Exchange Commission (BSEC)’s Rules and Rules adopted by regulatory bodies. Any abrupt changes of the policies formed by those bodies will impact the business of the company adversely. Management perception: Economy of Bangladesh has been developing over the decades because of business friendly Rules and Regulations adopted by the various regulatory bodies of the country. Unless any adverse policies are taken, which may materially affect the industry as a whole, the business of the company will not be affected. Government emphasizes on the growth of local industry to meet the local need. Yet the promoters and the sponsors have endeavor to convince the policy makers for adopting favorable terms and conditions, which will eventually help the industry to compete with the low cost locations in the global arena and to save foreign currency. g) Potential or existing changes in global or national policies: Changes in the existing global or national policies can have either positive or negative impacts for the company. Any scarcity or price hike or global or national policy change may hamper the profitability. Management perception: Political turmoil and the disturbance are bad for the economy and so for the company. The Company can prosper in situation of political stability and a congenial business environment. The management of Electro Battery is always concerned about the prevailing and upcoming future changes in the global or national policy and shall response appropriately and timely to safeguard its interest. h) Statutory clearances and approvals those are yet to be received by the issuer: Management perception: We have collected all the statutory clearance to operate our business. Hence, there is no as such risk for our company. i) Competitive condition of the business: Electro Battery is operating in a free market economy regime. The Company might have to face hard competition from its competitors. Easily availability of global products in the local markets adds to the competition, challenging the profitability of the business.
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Management perception: Bangladesh is the prime source of cheapest labor in the world, gaining comparative advantages for its industries over their global competitors. Other overhead costs are also low in Bangladesh. As a result, the company has been able to maintain its cost of products most competitive. Moreover, over the last few years the company has built a trustworthy relationship with its customers, which helps the company to almost avoid or to lower competition with others. j) Complementary and supplementary products or services which may have an impact on business of the issuer. 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. Section (xxi): Description of the issue (i) Number of securities to be issued: 22,500,000 ordinary shares of Tk. 10/- each (at par) totaling to Tk. 225,000,000/- (ii) Authorized capital and paid-up capital: Authorized capital is Tk. 1,000,000,000/-, pre-IPO paid-up capital is Tk. 369,920,000/- and post IPO paid-up capital is Tk. 594,920,000/-. (iii) Face value, premium and offer price per unit of securities: Face value is Tk. 10/- each with no premium and offer price is Tk. 10/- per share. (iv) Number of securities to be entitled for each category of applicants:
Category Particulars Number of
Shares Issue Price per Share
Amount in BDT
Eligible investors (EIs)
10% of IPO i.e. 2,250,000 Ordinary Shares shall be reserved for Mutual Funds
2,250,000
10.00
22,500,000
40% of IPO i.e. 9,000,000 Ordinary Shares shall be reserved for Other Eligible Investors (EIs)
9,000,000 90,000,000
General public
10% of IPO i.e. 2,250,000 Ordinary Shares shall be reserved for Non- Resident Bangladeshis (NRBs)
2,250,000 22,500,000
40% of IPO i.e. 9,000,000 Ordinary shall be reserved for and General Public
9,000,000 90,000,000
Total 22,500,000 225,000,000 (v) Holding structure of different classes of securities before and after the issue: The Company has issued only ordinary shares. Holding structure of different classes of securities before and after the issue are as follows:
Sl# Category of shareholders Before the present issue After the present issue
(vi) Objective of the issue including financing requirements and feasibility in respect of enhanced paid-up capital. Net proceeds from Initial Public Offering (IPO) will be used for plant & machineries and building & other civil works. Summary of feasibility report with the enhanced paid-up capital is as under: Sl# Particulars Amount in BDT 1 Plant & Machinery 158,000,000.00 2 Building & Other Civil Works 50,000,000.00
Total 208,000,000.00 IPO Expenses 17,000,000.00
Grand Total 225,000,000.00 Apart from above Tk. 17,000,000/- will be used for IPO expenses out of total IPO proceeds. The summery of feasibility report in respect enhanced paid-up capital as prepared by Research and Development Concern is enclosed below: The assumptions for these projections are as follows:
Assumption Indicator Assumption's Basis Assumptions Years
30-Jun-18 30-Jun-19 30-Jun-20
Capacity increase Capacity will be increased as new machineries will be introduced.
35% 25% 10%
Capacity utilization Capacity utilization will be almost same. 70-75% 70-75% 70-75%
Sales revenue increase Sales will be increased for qualitative
products by the increase of sales volume and unit price.
25% 18% 8%
Operating expenses increase/ (decrease)
Operating expenses will be increased due to increase of production and sales. IPO
expense will lead to the higher increase of operating expenses in the year 2018.
Expenses will be reduced in the year 2019 because of no expense in the year.
67% (31%) 15%
Property, plant and equipment addition
Property, plant and equipment will be increased in every year for the purpose of
production increase. 148,894,768 142,480,000 55,371,800
Paid up capital increase
Paid up Capital will be increased by Tk. 225,000,000 through IPO in FY 2017-
2018 225,000,000 - -
Long term loan repayment
The current portion long term loan of 2017 will be paid in 2018 and the current portion will be paid in other subsequent
years.
6,941,181 2,521,126 -
Dividend Dividend is not considered here as the
decision is not predetermined - - -
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ELECTRO BATTERY CO. LIMITED Statement of Financial Position (Projected)
(Figure in Taka)
Particulars Audited Projected
30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 Assets Non-current assets 328,299,968 340,286,062 420,864,658 408,229,584 Property, plant and equipment 235,940,700 340,286,062 420,864,658 408,229,584 Capital work in progress 92,359,268 - - - Current assets 287,011,736 543,968,192 581,036,708 723,597,574 Inventories 175,093,609 267,911,356 292,973,140 366,941,424 Accounts receivables 102,987,666 175,062,540 209,564,251 259,291,931 Advances, deposits & prepayments 8,629,113 34,568,412 36,684,968 47,953,541 Cash & cash equivalents 301,348 66,425,884 41,814,349 49,410,679 Total assets 615,311,704 884,254,254 1,001,901,366 1,131,827,158 Shareholders' equity and liabilities Shareholders' equity 434,170,701 743,144,832 858,021,592 983,495,123 Share capital 369,920,000 594,920,000 594,920,000 594,920,000 Retained earnings 64,250,701 148,224,832 263,101,592 388,575,123 Non-current liabilities 17,176,218 21,026,673 33,614,699 47,175,178 Long term loan 2,521,126 - - - Deferred tax liability 14,655,092 21,026,673 33,614,699 47,175,178 Current liabilities: 163,964,785 120,082,749 110,265,074 101,156,857 Accounts Payable 10,013,435 9,597,385 9,856,812 10,856,105 Current Maturity of Long Term Loan 6,941,181 2,521,126 - - Short Term Borrowings 103,224,333 61,934,600 43,354,220 30,347,954 Creditors & Accruals 43,785,836 46,029,638 57,054,043 59,952,798 Total shareholders' equity and liabilities: 615,311,704 884,254,254 1,001,901,366 1,131,827,158
ELECTRO BATTERY CO. LIMITED Statement of profit or loss & other comprehensive income (Projected)
(Figure in Taka)
Particulars Audited Projected
30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 Revenue 676,290,090 845,362,612 997,527,883 1,077,330,113 Less: Cost of goods sold 552,958,920 677,558,134 798,521,070 861,002,226 Gross profit / (loss) 123,331,170 167,804,479 199,006,813 216,327,887 Less: Operating expenses 27,433,140 45,804,796 31,548,110 36,280,326 Administrative and selling expenses 27,433,140 45,804,796 31,548,110 36,280,326 Operating profit/(loss) 95,898,030 121,999,683 167,458,703 180,047,560 Less: Financial expenses 14,913,660 8,948,196 6,263,737 4,384,616 Net profit before WPPF & tax 80,984,370 113,051,487 161,194,966 175,662,944 Less: Contribution to WPPF 3,856,399 5,383,404 7,675,951 8,364,902 Net profit before tax 77,127,971 107,668,082 153,519,015 167,298,042 Less: Income tax expenses 26,994,789 23,693,951 38,642,254 41,824,511 Current tax 16,605,572 17,322,370 26,054,228 28,264,032 Deferred tax 10,389,217 6,371,581 12,588,026 13,560,478 Net profit for the year 50,133,182 83,974,132 114,876,761 125,473,532 Earnings per share (EPS) 2.07 1.41 1.93 2.11
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Conclusion The feasibility of the project has been conducted and analyzed from the viewpoint of marketing, financial, management and economic aspects and found to be worthwhile. The projected financial results and the profitability estimated based on historical data shows that the project is viable and lucrative. This projection will help the interested parties to have an idea over the Electro Battery Company Limited. Sd/- Sabikunnahar, CEO Research and Development Concern 43/n, (2nd floor), West Raza Bazar Indira Road, Farmgate, Dhaka-1012 Section (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: Sources of fund:
Issue size (number of shares to be issued) Issue Price Amount in BDT 22,500,000 ordinary shares 10.00 each (at par) 225,000,000.00 Less: IPO expenses 17,000,000.00 Net IPO proceeds 208,000,000.00
Use of net proceeds from the IPO: Net proceeds from the IPO will be used for procurement of plant & machinery and building & other civil work. Details of the amount to be used for each purpose are as under:
Sl# Particulars Amount in BDT A. Plant & Machinery 158,000,000.00 B. Building & Other Civil Works 50,000,000.00 Total (A+B) 208,000,000.00
A. Plant & Machinery
Sl# Particulars Technical Specification Country of Origin Unit Price
Plant 10,000 Liter/Day China 3,000,000 1 No. 3,000,000
21 Grid Casting Fume Control
Unit 300 cubic ft China 500,000 6 Nos. 3,000,000
22 Gray Oxide Mill 10 Tons/Day China 12,000,000 1 No. 12,000,000 23 Red Oxide Mill 5 Tons/Day China 5,000,000 1 No. 5,000,000
Total Cost of Machineries 48,700,000 Add: Installation and Other Costs 9,300,000 Total Cost of Battery Manufacturing Plant 158,000,000 * Price of the machineries are assessed, it may differ at the time of purchase. Status: The Company plans to import all the above mentioned machineries after receiving the fund from IPO. No L/C is opened or quotation is placed in this purpose yet. B. Building & Other Civil Works The company have plan to build 5 storied (each floor size is 13000 SFT) building and already completed 3rd floor. The cost of another 3 floor space will incurred from IPO fund approximately amounting to Taka. 5.00 crore
Estimated cost of Building and Civil work Name of Work (Civil Work) Item Name Unit Qty. Unit Rate (BDT) Amount in BDT
Column
M. S. Rod Kgs. 15,000 60 900,000 Cement Bag 3,500 480 1,680,000
Labor Cost Civil - - - 1,103,500 Total Cost of Construction 50,000,000
Terms of contract: As per Annexure-E (B)(21)(f) of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 there is no contract covering any of the activities of the issuer company for which the proceeds of sale of securities from IPO is to be used.
Sd/- Md. Ansar Uddin Managing Director
Sd/- M A Halim
Chief Financial Officer
Sd/- Mrs. Umme Bushrah
Chairman
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(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: Sponsors’ contribution since inception and privately placed funds brought & deployed by the issuer company prior to the public offer and indication of such funds utilization in the cash flow statement is as under:
Accounting year
Fund utilized for Amount in
BDT Reflected in cash flows
2016-2017
Plant & machinery/ BMRE 50,000,000.00 Acquisition of fixed assets under the head investing activities.
Working capital 144,562,702.00 Payment to suppliers under the head operating activities.
Capital work in progress 75,437,298.00 Payment for capital work in progress under the head investing activities.
2015-2016 Capital work in progress 23,420,000.00
Payment for capital work in progress under the head investing activities.
Working capital 75,000,000.00 Payment to suppliers and other operating expenses under the head operating activities.
(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 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. (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# Particulars Progress made so far Approximate date of Completion
Projected date of full commercial operation
01 Plant & Machinery
Acquisition and installation of machineries and equipment’s will be started after receiving of IPO fund
Within 12 months of receiving the IPO fund
Within 3 month of the completion of the project
02 Building & Other Civil Works
After receiving of IPO fund Within 06 months of receiving the IPO fund
-
Sd/-
Md. Ansar Uddin Managing Director
Sd/- M A Halim
Chief Financial Officer
Sd/- Mrs. Umme Bushrah
Chairman on behalf of Board of Directors
(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 been closed as annexure to the prospectus: There is no such 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: The company does not utilize the issue proceed for working capital.
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(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 a plan to implement the expansion by using IPO proceeds, which have been mentioned in use of proceeds section in this prospectus. (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 a plan to implement the expansion by using IPO proceeds, which have been mentioned in use of IPO Proceeds and project implementation schedule. (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 such material transaction with sponsors, directors, key management personnel, associates and group companies in relation to utilization of the issue proceeds. (k) Summary of the project appraisal or feasibility report by the relevant professional 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 of Electro Battery Company Limited
EXECUTIVE SUMMARY Electro Battery Company Limited (EBCL) is manufacturing and marketing of wide range of solar, industrial, IPS, VRLA, easy bike, automotive and forklift battery product. EBCL was incorporated on November 24, 2008 vide registration number C-73799(1841)/08 as a private limited company under the Companies Act, 1994. The company was converted into a Public Limited Company on January 14, 2016. Addresses of registered & corporate head office is 28, Dilkusha C/A, 19th Floor, Suit# 1901 & 1902, Dhaka- 1000 and the factory is located at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka Bangladesh. Every organization has some purposes for the expansion program. Some projections regarding profitability and other financial issues are analysed. EBCL has made projections of financial position and statement of profit or loss and other comprehensive income for the upcoming three reporting years. This feasibility report discusses and shows the various aspects of expansion program of Electro Battery Company Limited. Introduction Electro Battery Company Limited was incorporated on November 24, 2008 as a private limited company under Registrar of Joint Stock Companies and Firms (RJSC) vide registration number C-73799(1841)/08 under the companies Act 1994. Subsequently it was converted into a public limited company on January 14, 2016. Corporate information:
Particulars Description Date of incorporation as private limited company November 24, 2008 Commencement of commercial operation February 18, 2009 Conversion into public limited company January 14, 2016 Denomination of face value from Tk. 100.00 to Tk. 10.00 October 01, 2015 Authorized capital 1,000,000,000 Issued & paid-up capital 369,920,000
Vision To seek the position of leadership for manufacturing and marketing battery products. Mission Our mission is to create a long-term, sustainable value for our customers. We will achieve this by manufacturing, developing, marketing, and supporting products that deliver rapid returns through lower costs and improved customer responsiveness. More importantly, our motto is to enable our customers obtain the best satisfaction and attain duly their business objectives through our dedicated endeavor.
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Nature of Business Electro Battery Company Limited (EBCL) is manufacturing and marketing of wide range battery products. The core markets for the products of the Company are telecommunication sector (i.e Grameen Phone, Pacific Bangladesh Telecom Ltd, Banglalink, Teletalk, Airtel, Banglalion, QUBEE etc.), Multinational company (i.e Coca-Cola), Government sector (i.e PGCB, BREB), NGO (i.e. Action In Development, Surjer Alo, TMSS) and other local customers. Principal Products of the Company The Company is engaged in manufacturing and marketing of wide range of following type battery products:
Utility Consumption Power: The Company meets its required power from Rural Electrification Board (REB). The total sanctioned electricity load for Electro Battery is 500 KVA. The Company has procured a high power electric transformer for smooth supply of electricity. Gas: The Company does not require any gas. Water: The factory requires around 1,000 litter water per day to continue its operation. Required water is supplied by its 2 (two) own tube-wells and distilled water plants. Marketing Aspects Battery industry is now the emerging sector in Bangladesh. Demand of battery is increasing day by day. Use of battery is also increases in different purpose to reduce physical labor. Use of solar panel also increases over the decade which increases the demand of battery. Expansion of demand makes the battery market bigger. So, many industries entered in this market to meet up the increasing demand. Now, all types of battery for car, motorcycle, IPS, solar panel are manufactured in Bangladesh. Some of those batteries are exporting in abroad. More than 20 battery manufacturing companies are running their operations in Bangladesh. These companies collect maximum raw materials from abroad and other from recycling. Above 10 lac batteries are exported to more than 55 countries annually. There are huge opportunities in this industry to contribute in the country’s GDP Electro Battery Company Limited envisages for establish the manufacturing and Marketing of different kind of battery products. In contribution to GDP are the largest manufacturing items for market demand of Bangladesh and is on increasing trend. The Board of Director of the Company has engaged themselves in the business promoting and marketing of Bangladesh for about a decade. During this long period they have worked with numbers of various buyers, their agents with all over the Bangladesh. So, they are fully capable to run this business with profitability. The company has been set up by the promoters having strong track record in same industry sector. They are experience and well learner promoters who have wide marketing experience and are well known in the local Community. It can be said that the company will enjoy a competitive marketing advantage. It is certain that the international and inland market will be maintained the standard and quality of product; sufficient backward linkage industries will not face any difficulty. As the labor cost is very low and Bangladesh to growing this industry, it is possible to maintain the minimum cost of production Distribution of Products The company doing their business through distributor/ dealership channel and sales & marketing team. The company have deferent dealer/distributor in major area of Bangladesh. After receiving order from customers, the dealer/ distributor
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provide products to customer. The company set their monthly sales target for their distributor point in value of battery. To achieve the target, the company’s sales & marketing team and dealer/ distributor aggressively worked together. The products distribution process flow: Weakness
1. Slow to innovate: It is hard to innovate in diversifying new product. 2. Low Financial Position: The Company needs more finance to be competitive over its rivals.
Threats
1. Intense competition: There is high competition in this sector may affect the profitability of the company. 2. Political unrest: Political unrest can be a big threat for the company. 3. Shortage of power: Crisis in power supply is also a threat to its operation.
Methodology We have considered our historical data of last few years’ revenue and expenses. We have also talked to the staffs. The interviews provided us with the relevant information concerning all aspects sales and expenses, The responses to these open-ended questions have allowed us to have a greater depth of knowledge into their opinions and so we were able to address them to the best of our ability. Every interview had a different idea that is important to the effects of the implementation of sales growth, and enough background information was included. Summary of Project Expansion Cost and Means of Finance Cost of the project expansion:
Particulars Amount in BDT Plant & machinery 158,000,000 Building and other civil works 50,000,000 Total project expansion cost 208,000,000
Means of finance:
Particulars Amount in BDT Initial Public Offering 208,000,000 Total means of finance 208,000,000
Financial projections The financial projections for the expansion of Electro Battery Company Limited are highlighted in the table below. These figures account for projections, sales and additional staffing requirements.
The assumptions for these projections are as follows: (Each year calculation is made comparing with respective previous year)
Assumption Indicator
Assumption's Basis Assumptions Years
30-Jun-18 30-Jun-19 30-Jun-20
Capacity increase Capacity will be increased as new machineries will be introduced.
35% 25% 10%
Capacity utilization Capacity utilization will be almost same.
70-75% 70-75% 70-75%
Sales revenue increase Sales will be increased for qualitative products by the increase of sales volume and unit price.
25% 18% 8%
Operating expenses increase/ (decrease)
Operating expenses will be increased due to increase of production and sales. IPO expense will lead to the higher increase of operating expenses in the year 2018. Expenses will be reduced in the year 2019 because of no expense in the year.
67% (31%) 15%
Property, plant and equipment addition
Property, plant and equipment will be increased in every year for the purpose of production increase.
148,894,768 142,480,000 55,371,800
Paid up capital increase
Paid up Capital will be increased by Tk. 225,000,000 through IPO in FY 2017-2018
225,000,000 - -
Long term loan repayment
The current portion long term loan of 2017 will be paid in 2018 and the current portion will be paid in other subsequent years.
6,941,181 2,521,126 -
Dividend Dividend is not considered here as the decision is not predetermined
- - -
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ELECTRO BATTERY CO. LIMITED Statement of Financial Position (Projected)
(Figure in Taka)
Particulars Audited Projected
30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 Assets Non-current assets 328,299,968 340,286,062 420,864,658 408,229,584 Property, plant and equipment 235,940,700 340,286,062 420,864,658 408,229,584 Capital work in progress 92,359,268 - - - Current assets 287,011,736 543,968,192 581,036,708 723,597,574 Inventories 175,093,609 267,911,356 292,973,140 366,941,424 Accounts receivables 102,987,666 175,062,540 209,564,251 259,291,931 Advances, deposits & prepayments 8,629,113 34,568,412 36,684,968 47,953,541 Cash & cash equivalents 301,348 66,425,884 41,814,349 49,410,679 Total assets 615,311,704 884,254,254 1,001,901,366 1,131,827,158 Shareholders' equity and liabilities Shareholders' equity 434,170,701 743,144,832 858,021,592 983,495,123 Share capital 369,920,000 594,920,000 594,920,000 594,920,000 Retained earnings 64,250,701 148,224,832 263,101,592 388,575,123 Non-current liabilities 17,176,218 21,026,673 33,614,699 47,175,178 Long term loan 2,521,126 - - - Deferred tax liability 14,655,092 21,026,673 33,614,699 47,175,178 Current liabilities: 163,964,785 120,082,749 110,265,074 101,156,857 Accounts Payable 10,013,435 9,597,385 9,856,812 10,856,105 Current Maturity of Long Term Loan 6,941,181 2,521,126 - - Short Term Borrowings 103,224,333 61,934,600 43,354,220 30,347,954 Creditors & Accruals 43,785,836 46,029,638 57,054,043 59,952,798 Total shareholders' equity and liabilities:
ELECTRO BATTERY CO. LIMITED Statement of profit or loss & other comprehensive income (Projected)
(Figure in Taka)
Particulars Audited Projected
30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 Revenue 676,290,090 845,362,612 997,527,883 1,077,330,113 Less: Cost of goods sold 552,958,920 677,558,134 798,521,070 861,002,226 Gross profit / (loss) 123,331,170 167,804,479 199,006,813 216,327,887 Less: Operating expenses 27,433,140 45,804,796 31,548,110 36,280,326 Administrative and selling expenses 27,433,140 45,804,796 31,548,110 36,280,326 Operating profit/(loss) 95,898,030 121,999,683 167,458,703 180,047,560 Less: Financial expenses 14,913,660 8,948,196 6,263,737 4,384,616 Net profit before WPPF & tax 80,984,370 113,051,487 161,194,966 175,662,944 Less: Contribution to WPPF 3,856,399 5,383,404 7,675,951 8,364,902 Net profit before tax 77,127,971 107,668,082 153,519,015 167,298,042 Less: Income tax expenses 26,994,789 23,693,951 38,642,254 41,824,511 Current tax 16,605,572 17,322,370 26,054,228 28,264,032 Deferred tax 10,389,217 6,371,581 12,588,026 13,560,478 Net profit for the year 50,133,182 83,974,132 114,876,761 125,473,532 Earnings per share (EPS) 2.07 1.41 1.93 2.11
*** Dividend is not considered Conclusion The feasibility of the project has been conducted and analyzed from the viewpoint of marketing, financial, management and economic aspects and found to be worthwhile. The projected financial results and the profitability estimated based on historical data shows that the project is viable and lucrative. This projection will help the interested parties to have an idea over the Electro Battery Company Limited.
Sd/- Sabukunnahan, CEO Research & Development Concern 43/n, (2nd Floor), West Raza Bazar Indira Road, Farmgate, Dhaka-1215 Section (xxiii): Lock-in (a) Ordinary shares of the issuer shall be subject to lock-in, from the date of issuance of prospectus or commercial
operation, whichever comes later, in the following manner:
(1) All shares held, at the time of according consent to the public offer, by sponsors, directors and shareholders holding ten percent (10%) or more shares, other than alternative investment funds, for 03(three) years.
(2) In case any existing sponsor or director of the issuer transfers any share to any person, other than existing shareholders, all shares held by those transferee shareholders, at the time of according consent to the public offer, for 03 (three) years.
(3) Twenty five percent (25%) of the shares allotted to eligible investors, for 06 (six) months and other twenty five percent (25%) of the shares allotted to them, for 09 (nine) months.
(4) All shares held by alternative investment funds, at the time of according consent to the public offer, for 01
(one) year.
(5) All shares held, at the time of according consent to the public offer, by any person other than the persons mentioned in sub rules (1), (2) and (3) above, for 01 (one) year.
(b) The following table indicates the lock-in status of shares of the shareholders of Electro Battery Company Limited:
Director 1605070063669463 7,062,808 19.09% 09.12.2015
3 years 16.03.2017
4 ICB Director 1201530057974026 8,000,000 21.63% 16.03.2017 3 year 5 EM Power Ltd. Shareholder 1605070063671017 7,247,192 19.59% 16.03.2017 3 year
6 Electro Solar Power Ltd.
Shareholder 1605070063670783 10,000 0.03% 16.03.2017 1 year
7 Electro Led & Lights Ltd.
Shareholder 1605070063671266 10,000 0.03% 16.03.2017 1 year
8 Fahima Akter Shareholder 1605070058683102 1,000 0.00% 16.03.2017 1 year
9 Mohammad Mostafizur Rahman
Shareholder 1605070043500637 1,000 0.00% 16.03.2017 1 year
10 Electro Mechanical Service Ltd.
Shareholder 1605070063670229 10,000 0.03% 16.03.2017 1 year
11 Ishtiaq Ahmed Shareholder 1202490000226422 50,000 0.14% 16.03.2017 1 year 12 Nirzar Kanti De Shareholder 1202160002007281 20,000 0.05% 16.03.2017 1 year
13 Md. Ali Hossain Prodhania
Shareholder 1605070061493491 50,000 0.14% 16.03.2017 1 year
14 Md. Saiful Islam Helaly
Shareholder 1605070043500637 300,000 0.81% 16.03.2017 1 year
15 Khan Md. Naim Shareholder 1201510034196909 100,000 0.27% 16.03.2017 1 year 16 Md. Manarul Haque Shareholder 1605070046067897 100,000 0.27% 16.03.2017 1 year 17 Apel Mahmud Shareholder 1203680040800659 50,000 0.14% 16.03.2017 1 year 18 Mohammed Ishaque Shareholder 1601880028407188 50,000 0.14% 16.03.2017 1 year 19 Syed Rafiqul Haq Shareholder 1205700058597361 300,000 0.81% 16.03.2017 1 year 20 Habibullah Al Amin Shareholder 1603700003067416 20,000 0.05% 16.03.2017 1 year
21 Sk. Md. Akramuzzaman
Shareholder 1605070062596251 100,000 0.27% 16.03.2017 1 year
Shareholder 1605120062108315 200,000 0.54% 16.03.2017 1 year
35 Md. Abdul Hakim Shareholder 1204220062278740 100,000 0.27% 16.03.2017 1 year 36 Md. Nazrul Islam Shareholder 1605070060995794 500,000 1.35% 16.03.2017 1 year
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37 Md. Ariful Islam Shareholder 1601880062077417 50,000 0.14% 16.03.2017 1 year
38 Muhammad Faijunnur Chowdhury
Shareholder 1601880000235998 25,000 0.07% 16.03.2017 1 year
39 Fyzul Kabir Shareholder 1605070062214848 25,000 0.07% 16.03.2017 1 year 40 Md. Taqui Akhter Shareholder 1605070062583580 50,000 0.14% 16.03.2017 1 year 41 H. A Mamun Shareholder 1202010055060934 50,000 0.14% 16.03.2017 1 year 42 Md. Sadiqur Rahman Shareholder 1201470001695029 50,000 0.14% 16.03.2017 1 year 43 Khan Md. Naim Shareholder 1605070046067889 30,000 0.08% 16.03.2017 1 year 44 Md. Nurul Islam Shareholder 1201500018573852 50,000 0.14% 16.03.2017 1 year 45 Md. Rafiqul Islam Shareholder 1203120049558285 50,000 0.14% 16.03.2017 1 year 46 Md. Zakir Hussain Shareholder 1601880033739537 50,000 0.14% 16.03.2017 1 year 47 Obydur Rahman Shareholder 1202880018167586 30,000 0.08% 16.03.2017 1 year
48 Maksuda Akter Santona
Shareholder 1605070061864621 420,000 1.14% 16.03.2017 1 year
49 Md. Masudur Rahamn Shareholder 1203680057496005 100,000 0.27% 16.03.2017 1 year 50 Md. Khurshedul Alam Shareholder 1203560000151958 50,000 0.14% 16.03.2017 1 year 51 Faryal Hafsa Ahmed Shareholder 1202990061454221 100,000 0.27% 16.03.2017 1 year 52 Md. Uzzal Hossain Shareholder 1201590058141403 80,000 0.22% 16.03.2017 1 year 53 Ryan Enterprise Shareholder 1203120049558285 100,000 0.27% 16.03.2017 1 year 54 Ferhana Nabi Shareholder 1201590062639775 100,000 0.27% 16.03.2017 1 year
Total 36,992,000 100% Section (xxiv): Markets for the securities being offered The issuer shall apply to both the stock exchanges in Bangladesh within 7 (seven) working days from the date of consent accorded by the Commission to issue prospectus.
“DECLARATION ABOUT LISTING OF SHARES WITH THE STOCK EXCHANGE(S): None of the Stock 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 be applied for trading and settlement of the shares of the company. The issue shall be placed in “N’’ category with DSE and CSE.
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Section (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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Section (xxvi): Financial Statements
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF
ELECTRO BATTERY CO. LTD. Report on the Financial Statements We have audited the accompanying Financial Statements of Electro Battery Co. Ltd. (the company), which comprises the Statement of Financial Position as at 30 June 2017 and 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 a summary of significant accounting policies and other explanatory information thereon. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), Bangladesh Accounting Standards (BASs), and other Applicable Rules and Regulation 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. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of Electro Battery Co. Ltd. as at 30 June 2017 and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), Bangladesh Accounting Standards (BASs), and other Applicable Rules and Regulation. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act 1994 and The Securities and Exchange Rules 1987, we also report that: (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 account as required by law have been kept by the company so far as it appeared
from our examination of those books; (c) the Statement of Financial Position, Statement of Profit or Loss and other Comprehensive Income, Statement of
Changes in Equity and Statement of Cash Flows dealt with the report are in agreement with the books of account and returns; and
Sd/- Dated: 27 September 2017 Place: Dhaka
AHMAD & AKHTAR Chartered Accountants
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ELECTRO BATTERY CO. LTD. Statement of Financial Position
As at 30 June 2017
Particulars
Notes Amount in Taka
30 June 2017 30 June 2016 Assets Non-Current Assets 328,299,968 154,847,772 Property, Plant & Equipment 4.00 235,940,700 92,126,141 Capital Work in Progress 5.00 92,359,268 62,721,631
Current Assets 287,011,736 217,366,187 Inventories 6.00 175,093,609 127,193,379 Accounts Receivable 7.00 102,987,666 81,922,083 Advance, Deposit and Prepayments 8.00 8,629,113 7,811,276 Cash and Cash Equivalents 9.00 301,348 439,449
Total Assets 615,311,704 372,213,959 Shareholders' Equity and Liabilities Shareholders' Equity 434,170,701 114,037,519 Share Capital 10.00 369,920,000 99,920,000 Retained Earnings 11.00 64,250,701 14,117,519
Non-Current Liabilities 17,176,218 12,810,081 Long Term Loan 12.00 2,521,126 8,544,207 Deferred tax liability 14.00 14,655,092 4,265,874
Current Liabilities 163,964,785 245,366,359 Accounts Payable 15.00 10,013,435 17,134,600 Current Maturity of Long Term Loan 12.00 6,941,181 8,516,533 Share Money Deposit 13.00 - 89,562,702 Short Term Borrowings 16.00 103,224,333 103,774,888 Creditors & Accruals 17.00 43,785,835 26,377,635
Total Shareholders' Equity and Liabilities 615,311,704 372,213,959 Net Assets Value (NAV) per Share 26.00 11.74 11.41 The annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd/- Sd/- Chairman Company Secretary Managing Director CFO
Signed as per our annexed report of even date. Sd/- Dated: 27 September 2017 AHMAD & AKHTAR Place: Dhaka Chartered Accountants
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ELECTRO BATTERY CO. LTD. Statements of Profit or Losss and other Comprehensive Income
For the year ended 30 June 2017
Particulars
Notes Amount in Taka
FY (2016-2017) FY (2015-2016)
Revenue 18.00 676,290,090 621,904,538 Less: Cost of goods sold 19.00 552,958,920 508,897,947 Gross Profit 123,331,170 113,006,591 Less: Operating Expenses 27,433,140 24,362,918 Administrative & Selling Expenses 20.00 27,433,140 24,362,918 Profit from Operation 95,898,030 88,643,673 Less: Financial Expenses 21.00 14,913,660 30,801,219 Net profit before charging WPPF for the period 80,984,370 57,842,454 Less: Contribution to WPPF 22.00 3,856,399 - Profit before Income Tax 77,127,971 57,842,454 Less: Income tax Expenses 26,994,789 20,244,859 Current Tax 23.00 16,605,572 15,978,985 Deferred Tax 24.00 10,389,217 4,265,874 Net Profit after Tax 50,133,182 37,597,596 Earning Per Share (EPS) 25.00 2.07 4.10 Earnings per Share (Restated) 25.00 - 1.55 The annexed notes form an integral part of these financial statements.
Sd/- Sd/- Sd/- Sd/- Chairman Company Secretary Managing Director CFO
Signed as per our annexed report of even date. Sd/- Dated: 27 September 2017 AHMAD & AKHTAR Place: Dhaka Chartered Accountants
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ELECTRO BATTERY CO. LTD. Statement of Change in Equity
For the year ended 30 June 2017 (Amount in Taka)
Particulars Ordinary
Share Capital Retained Earnings
Total Equity
Balance as on 01 July 2016 99,920,000 14,117,519 114,037,519 Allotment of Share (Cash) 270,000,000 - 270,000,000 Net Profit During the Year - 50,133,182 50,133,182 Balance as on 30 June 2017 369,920,000 64,250,701 434,170,701
ELECTRO BATTERY CO. LTD. Statement of Change in Equity
For the year ended 30 June 2016 (Amount in Taka)
Particulars Ordinary
Share Capital Retained Earnings Total Equity
Balance as on 01 July 2015 1,500,000 80,547,612 82,047,612 Bonus Issue 80,000,000 (80,000,000) - Allotment of Share (Cash) 18,420,000 - 18,420,000 Net Profit During the Year - 37,597,596 37,597,596 Adjustment of under provision of Tax - (24,027,689) (24,027,689) Balance as on 30 June 2016 99,920,000 14,117,519 114,037,519
Sd/- Sd/- Sd/- Sd/- Chairman Company Secretary Managing Director CFO
Signed as per our annexed report of even date. Sd/- Dated: 27 September 2017 AHMAD & AKHTAR Place: Dhaka Chartered Accountants
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ELECTRO BATTERY CO. LTD. Statement of Cash Flows
For the year ended 30 June 2017
Particulars Amount in Taka
FY (2016-2017) FY (2015-2016)
A. Cash flows from operating activities Collection from customers & Others 655,224,507 630,574,990 Payment to suppliers, employees and others (624,447,263) (553,022,699) Cash generated from operation 30,777,244 77,552,291 Income tax paid (4,763,311) (3,107,337) Payment for financial expenses (14,913,660) (30,801,219) Net cash in flows/(out flows) from operating activities 11,100,273 43,643,735 B. Cash flows from investing activities Acquisition of fixed assets (56,110,435) (4,379,600) Received from Investment - 23,021,500 Payment for capital work in progress (127,416,248) (56,450,339) Net cash in flows/(out flows) from investing activities (183,526,684) (37,808,439) C. Cash flows from financing activities Issuance of share capital 270,000,000 18,420,000 Share money deposits (89,562,702) 26,474,621 Received/(Payment) of short term bank loan (550,555) (72,741,684) Received/ (Payment) of long term loan (7,598,433) 22,247,097 Net cash in flows/(out flows) from financing activities 172,288,310 (5,599,966) D. Net cash in flows/(out flows) for the year (A+B+C) (138,101) 235,331 E. Cash & cash equivalent at the beginning of the year 439,449 204,118 F. Cash & cash equivalent at the end of the year (D+E) 301,348 439,449 Net Operating Cash flow per share (Note-27.00) 0.46 4.75 Net operating cash flows (NOCF) per share (Restated) - 1.80
Sd/- Sd/- Sd/- Sd/- Chairman Company Secretary Managing Director CFO
Signed as per our annexed report of even date. Dated: 27 September 2017 Place: Dhaka
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ELECTRO BATTERY CO. LTD. Notes, summary of significant accounting policies and other explanatory information
For the year ended on 30 June 2017
1.00 The Company & It's Operation 1.01 Corporate History of the Reporting Entity
Electro Battery Company Limited was incorporated in Bangladesh as a Private Limited Company under The Companies Act-1994, vide incorporation number C-73799(1841)/08 dated 24.11.2008. The Company was converted into a Public Limited Company on 14th January, 2016.
1.02 Address of the Registered & Corporate Office:
The registered office of the company 28 Dilkusha C/A, 19Th Floor, Suite # 1901, 1902, Dhaka-1000, Bangladesh and the factory is situated at Baro Rangamatia, Durgapur, Ashulia, Savar, Dhaka.
1.03 Corporate Business
Electro Battery Company Limited has started manufacturing and marketing Battery under the brand name of “ELECTRO” especially Solar Battery, Industrial Battery, VRLA Battery, Automotive Battery, Froklift
Battery, Easy Bike Battery, Rickshaw Battery etc. 1.04 Capital Structure of the Company
Particulars Taka
Authorized Capital 100,000,000 ordinary shares of Taka 10/= each. 1,000,000,000 Issued, subscribed, called-up and paid-up capital 36,992,000 Ordinary Shares of TK.10/-each. Paid-up 369,920,000 2.00 Basis of preparation of the financial statement 2.01 Basis of Measurement of Elements of Financial statement
The financial statements have been prepared and the disclosures of information made in accordance with the requirements of the Companies Act 1994, the Securities and Exchange Rules 1987 and Bangladesh Accounting Standard (BAS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), Bangladesh Financial Reporting Standard (BFRS) as far as applicable for the company. The Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income have been prepared according to BAS 1 Presentation of Financial Statements based on accrual basis of Accounting following going concern assumption under Generally Accepted Accounting Principles (GAAP) practices in Bangladesh and Statement of cash flows according to BAS-7: Statements of Cash flows.
2.02 Regulatory Compliances
As required by the company, the management complies with the following major legal provisions in addition to the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations:
The Income Tax Ordinance 1984; The Income Tax Rules 1984; The Value Added Tax Act 1991; The Value Added Tax Rules 1991; The Customs Act, 1969; and Bangladesh Labour Law, 2006 (Amendment 2013). 2.03 BAS and BFRS Adopted by the Management
The following BAS and BFRS are applicable and adopted by management for preparation of financial statements for the period ended 30 June 2017.
BAS-1 Presentation of Financial Statements BAS-2 Inventories BAS-7 Statement of Cash Flows BAS-8 Accounting Policies, Changes in Accounting Estimates and Errors BAS-10 Events after the Reporting Period BAS-12 Income Taxes BAS-16 Property, Plant & Equipment BAS-18 Revenue
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BAS-19 Employee Benefits
BAS-21 The Effects of Changes in Foreign Exchange Rates BAS-23 Borrowing Costs BAS-24 Related Party Disclosures BAS-33 Earnings per Share BAS-36 Impairment of Assets BAS-37 Provisions, Contingent Liabilities and Contingent Assets BAS-39 Financial Instruments: Recognition and Measurement BFRS: BFRS 7 Financial Instruments: Disclosures BFRS 9 Financial Instruments BFRS 13 Fair Value Measurement 2.04 Going Concern Basis
The company has adequate resources to continue its operation for the foreseeable future. As such, the directors intended to adopt the going concern basis is 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.
2.05 Accrual Basis
The financial statements have been prepared, except cash flow information, using the accrual basis of accounting.
2.06 Structure, Content and Presentation of Financial Statement
Being the general purpose financial statements, the presentation of these financial statements is in accordance with the guidelines provided by BAS-1: “Presentation of Financial Statements”. A complete set of financial statements comprise:
(i) Statement of financial position as at 30 June 2017; (ii) Statement of Profit or Loss and other comprehensive income for the year ended 30 June 2017; (iii) Statement of Changes in Equity for the year ended 30 June 2017; (iv) Statement of cash flows for the year ended 30 June 2017; and
(v) Notes, summary of significant accounting policies and other explanatory information to the financial statements for the year ended 30 June 2017.
2.07 Presentation Currency
The annexed financial statements are presented in Bangladeshi currency (Taka), which have been rounded off to the nearest Taka.
2.08 Comparative information
Previous period's comparative information have been given for all numerical information in the financial statements and also the narrative and descriptive information where it is relevant for understanding on the current period's financial statement.
Figures for the years 2016 have been rearranged whereever considered necessary to ensure comparability with the current year.
2.09 Reporting Period
The period of the financial statements from 01 July 2016 to 30 June 2017 consistently. 2.10 Date of Authorization
The financial statements were authorized for issue by the Board of Directors of the company on September 27, 2017.
3.00 Accounties Polities 3.01 Revenue
Revenue from sales of Battery is recognized in accordance with BAS-18 "Revenue". (a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;
(b) the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
(c) the amount of revenue can be measured reliably; (d) it is probable that the economic benefits associated with the transaction will flow to the entity; and (e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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3.02 Property, Plant and Equipment 3.02.1 Recognition and Measurement
Property, plant and equipment are capitalized at cost of acquisition and subsequently stated at cost or valuation less accumulated depreciation in compliance with the requirements of BAS-16: Property, Plant and Equipment. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties, non-refundable taxes and un-allocated expenditures etc.
3.02.2 Depreciation on Fixed Assets
Depreciation is provided to amortize the cost or valuation of the assets after commissioning, over the period of their expected useful lives, in accordance with the provisions of BAS-16: Property, Plant and Equipment. Depreciation charged of an asset when the assets are ready for use. Depreciation is charged on all fixed assets on reducing balance method. The Rate of depreciation for this year as below:
Particulars 30 June 2017
Land - Building & Civil Construction 2.5% Electrical Line Inst. 15% Machineries 15% Furniture & Fixture 15% Computer 15% Office Equipment 15% Factory Equipments 15% Computer Softwear 30% Fire Equipment 10% Vehicles 20%
3.02.3 Impairment of Assets
In accordance with the provision of BAS 36, the carrying amount of non-financial assets other than inventories of the company involved in the manufacturing of the products. If any such indication exists, then the asset’s recoverable amount is estimated and impairment losses are recognized in the statement of comprehensive income. No such indication of impairment has been observed till the end of the period.
3.02.4 Disposal of fixed assets
An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. 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 asset and is recognised as gain or loss from disposal of asset under other income in the statement of comprehensive income. There was no disposal of asset during the year.
3.03 Cash and Cash Equivalent
Cash and cash equivalents comprise cash on hand, demand deposits, and short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.04 Inventories
Inventories are measured at lower of cost and ex-factory net realizable value in compliance with “BAS 2:
Inventories”. The cost of inventories is based on weighted average principle and includes expenditure for
acquiring the inventories and bringing them to their existing location and condition. Net realizable value is estimated upon selling price in the ordinary course of business less estimated cost of completion. When the inventories are used, the carrying amounts of those inventories are recognized as expense in the year in which the related revenue is recognized.
3.05 Events After the Reporting Period
In compliance with the requirements of “BAS-10: Events After the Reporting Period” that provide additional
information about the company’s position at the date of the financial position are reflected in the financial statements and events after the reporting period that are not adjusting events are disclosed in the notes when arise.
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3.06 Statement of Cash Flows
The Statement of Cash Flows are prepared in accordance with Bangladesh Accounting Standards BAS-7, Statement of Cash Flows and cash flows from the operating activities have been presented under direct method considering the provision of paragraph 19 of BAS-7.
3.07 Related Party Disclosures
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 BAS 24: Related Party Disclosures has been disclosed
in a separate note (Note-32.00) to the accounts. 3.08 Earnings Per Share
The management calculates Earnings Per Share (EPS) in accordance with BAS-33, Earnings per share, which has been shown on the face of Statement of Profit or Loss and Other Comprehensive Income; the same has been calculated dividing surplus available for ordinary share holders by weighted average number of ordinary shares outstanding at the end of the year (Note-25.00).
Basic earnings
This represents earnings for the year attributable to the ordinary shareholders. As there was no minority interest or extra ordinary items, the net profit after tax for the period has been considered as fully attributable to ordinary shareholders.
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 period.
Weighted Average Number of Ordinary Shares Outstanding Computations of weighted average number of ordinary shares has been shown in note no. 25.01; Diluted Earnings Per Share (DEPS)
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding, for the effect of all dilutive potential ordinary shares. However, dilution of EPS is not applicable for these financial statements as there were no potential ordinary shares during the relevant period.
3.09 Provisions
The preparation of financial statements in conformity with Bangladesh Accounting Standard BAS - 37 Provisions, Contingent Liabilities and Contingent Assets requires management to make estimates and assumption that affect the reported amounts of revenues and expenses, assets and liabilities, and the disclosure requirements for contingent assets and liabilities during and at the date of the financial statements.
In accordance with the guidelines as prescribed by BAS-37 provisions were recognized in the following situations:
(a) when the company has an obligation (legal or constructive) as a result of past events;
(b) when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(c) reliable estimates can be made of the amount of the obligation.
An appropriate level with regard to an adequate provision for risks and uncertainties has been shown in the Statement of Financial Position. An amount recorded as a provision represents the best estimate of the probable expenditure required to fulfill the current obligation on the date of Statement of Financial Position.
3.10 Contingent Liabilities and Assets
Contingent liabilities and assets are current or possible obligations or assets, arising from past events and whose existence is due to the occurrence or non-occurrence of one or more uncertain future events which are not within the control of the company. In accordance with BAS 37 Provisions, Contingent Liabilities and Contingent Assets are disclosed in the notes to the financial statements when arise.
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3.11 Income Tax 3.11.1 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 and incompliance with Finance Act. 2016.
3.11.2 Deferred Tax
Deferred tax liabilities are the amount of income taxes payable in future years in respect of taxable temporary differences. Deferred tax assets are the amount of income tax recoverable in future years in respect of deductible temporary differences arising between the carrying values of assets, liabilities, income and expenditure and their respective tax based. Deferred tax assets and liabilities are measured using tax rated and tax laws that have been enacted or subsequently enacted at the reporting date. The impact on the account of changes in the deferred tax assets and liabilities for the period ended June 30, 2017 has been recognized in the statement of profit or loss and other comprehensive income as per BAS 12 “Income Taxes”.
3.12 Employee Benefits
The company maintains defined benefit plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds.
The company has accounted for and disclosed employee benefits in compliance with the provisions of BAS 19: Employee Benefits.
The cost of employee benefit is charged off as revenue expenditure in the period to which the contributions relate.
The company’s employee benefits include the following: (i) 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.
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.
(ii) Contribution to Workers’ Profit Participation and Welfare Funds
This represents 5% of net profit before tax, contributed by the company as per provisions of the Bangladesh Labor (amendment) Act, 2013. The Company recognizes contribution to Workers Profit Participation and Welfare Fund in the accounts from the year 2017. The fund transfer is under process and will be paid after completion of necessary legal process.
3.13 Foreign Currency Translation
Foreign currency transactions are recorded at the applicable rates of exchange ruling at the transaction date in accordance with BAS-21 (the Effects of changes in Foreign Exchange Rates). Foreign currency transactions translated at the financial position date are charged/ credited to the statement of Profit or Loss and Other Comprehensive Income whenever arise.
3.14 Segment Reporting
As required by BFRS-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.
3.15 Financial Instruments
Non-derivative financial instruments comprise trade receivables, trade payables, cash and cash equivalents and share capital.
Trade Receivables
Trade receivables are recognized initially at invoice value and subsequently measured at the remaining amount less allowance for doubtful receivable at the year end, if any. Receivables from foreign currency transactions are recognized in Bangladeshi Taka using exchange rates prevailing on the date of transaction.
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Trade Payables
Liabilities are recorded at the amount payable for settlement in respect of goods and services received by the company.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash in hand and with banks on current and deposit accounts and short term investments which are held and available for use by the company without any restriction. There is insignificant risk of change in value of the same.
Share Capital
Ordinary shares are classified as equity. Incremental cost directly attributable to the issue of ordinary shares are recognized as a deduction from equity net of any tax effect.
3.16 Financial Risk Management Policies
The company is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The company does not hold or issue derivative financial instruments for speculative or trading purposes.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The majority of the interest rate exposure arises from short and long term borrowings from banks. The company has no significant risk of fluctuations in interest rates.
Foreign Currency Risk
The company is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign currencies. The company primarily utilizes forward exchange contracts with maturities of less than one year to hedge such financial liabilities denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to anticipated purchases, denominated in foreign currencies, for the subsequent period.
Credit Risk
Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the company as and when they fall due.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. However, due to the large number of parties comprising the group’s customer base, Management does not anticipate
material losses from its debt collection. Liquidity Risk
The company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the company operations and to mitigate the effects of fluctuations in cash flows.
Fair Values
The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
The fair value of trade and other short-term receivables are taken to approximate their carrying value. The fair value of financial assets and liabilities approximate their carrying value.
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Amount in Taka
FY (2016-2017) FY (2015-2016)
4.00 Property, Plant and Equipment :Tk. 235,940,700 Opening Balance (At Cost) 130,605,734 121,147,234 Add: Addition During the year 153,889,046 9,458,500 Total Assets Value at cost 284,494,780 130,605,734 Less: Accumulated Depreciation 48,554,081 38,479,593 Written Down Value as on 30 June 2017 235,940,700 92,126,141 Details shown in Schedule-A
5.00 Capital Work in Progress : Tk. 92,359,268 A. Construction of Building: Opening Balance 62,721,631 11,350,192 Add: Addition During the year 39,216,832 56,450,339 101,938,463 67,800,531 Less: Transfer to Building & Construction 97,778,611 5,078,900
Closing Construction of Building 4,159,852 62,721,631 B. Plant & Machinery Addition during the year 88,199,416 -
Total (A+B) 92,359,268 62,721,631
The balance is representing the cost of factory building under construction. When it will be fully constructed and available for use and also Plant & Machinery Addition during the year, when it will be fully installation and available for use, it will be transferred to Property, Plant and Equipment as per BAS 16.
6.00 Inventories : Tk. 175,093,609
Raw Materials 19.01 91,904,111 69,893,749 Packing Materials 458,462 156,985 Store & Spare Parts 845,796 245,825 Work in process 19.00 48,695,620 37,101,220 Finished Goods 19.00 33,189,620 19,795,600 175,093,609 127,193,379
Details shown in Schedule-C, D & E
7.00 Accounts Receivable : Tk. 102,987,666 Name of Client & Purpose FY (2016-2017) FY (2015-2016)
Ava Development Society 5,620,490 5,109,536 Asian Enterprise 2,748,750 - Grameen Shakti 5,037,631 6,618,102 Polli Bondhu 6,533,794 3,212,540 Green Housing & Energy Ltd 5,229,417 4,299,470 Shakti Foundation 2,530,500 - IDF 6,918,670 6,289,700 MM Solar 5,099,034 5,817,304 Grameen Phone 4,156,790 3,778,900 Pacific Bangladesh Telecom Ltd 6,082,174 9,202,794 SDRS 4,038,500 5,845,890 BTCL 4,842,690 - Action In Development 7,036,117 6,396,470 Surjer Alo 4,746,350 2,590,000 International Beverage Pvt. Ltd (IBPL) 668,950 4,244,500 Sun Homes Energy 6,809,550 6,190,500
Maria Battery & Charger 1,750,600 -
New Al Modina Auto House 1,250,000 - New Sudoy Auto Parts 1,284,500 - Sadia Battery House 1,785,600 -
No amount has been due by the Directors, Managing Director, Manager & Other Officers of the company and any of them severally or jointly with any other person.
Disclosure as per Schedule-XI, Part-I, of The Companies Act, 1994 Particulars June 30, 2017 June 30, 2016
Dues within six months 83,002,606 59,996,683 Dues over six months but below nine months 19,985,060 21,925,400 102,987,666 81,922,083 Particulars Taka Taka
i. Receivables considered good in respect of which the company is fully secured
- -
ii. Receivables considered good in respect of which the company holds no security other than the debtor personal security
102,987,666 81,922,083
iii. Receivables considered doubtful or bad - - iv. Receivables due by directors or other officers & staffs - - v. Receivables due from companies under same management - -
vi. The maximum amount of receivable due by any director or other officer of the company
Advance Income Tax 8.01 3,547,648 2,284,337 Letter of Credit 158,425 34,400 Bank Guarantee 377,124 37,500 VAT Current A/c 4,545,916 5,455,039 8,629,113 7,811,276
8.01 Advance Income Tax : Tk. 3,547,648 Income Tax deduction at source -Opening 2,284,337 56,723,095 Add: Advance Income Tax during the year 1,263,311 2,284,337 3,547,648 59,007,432
Less: Adjustment during the year - 56,723,095 3,547,648 2,284,337
9.00 Cash and Cash Equivalents : Tk. 301,348 A. Cash in hand 102,650 - B. Cash at Bank 198,698 439,449 CBL-CD/AC-3001 6,018 57,443 DBBL-14433 7,074 5,984 EBL-5348 33,086 272,941 MTBL (8969) 7,433 8,837 MTBL-2117 7,368 4,225 Meghna Bank-357 53,519 87,460 Mercantile Bank Ltd.-5202 25,553 54 IBBL-618 57,292 - OBL (2007) 1,355 2,505 Total (A+B) 301,348 439,449 The Bank balance are in agreement with respective bank statement balances.
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10.00
Share Capital : Tk. 369,920,000
Authorized Share Capital : Tk. 1,000,000,000 100,000,000 Ordinary Shares of Tk. 10/= each. 1,000,000,000 1,000,000,000
Issued, Subscribed, Called-up and Paid-up Share Capital : Tk. 369,920,000 36,992,000 Ordinary Shares of Tk. 10/-each. Paid-up 369,920,000 99,920,000 The shareholding position of the company are as under:
Names Percentage No. of Shares
Amount in Tk. Amount in Tk.
Md. Ansar Uddin 14.76% 5,460,000 54,600,000 54,600,000 Mrs. Umme Bushrah 7.27% 2,690,000 26,900,000 26,900,000 Energy Meter Company Ltd. 19.09% 7,062,808 70,628,080 18,000,000 Electro Solar Power Ltd. 0.03% 10,000 100,000 100,000 EM Power Ltd. 19.59% 7,247,192 72,471,920 100,000 Electro LED & Lights Ltd. 0.03% 10,000 100,000 100,000 Fahima Akter 0.00% 1,000 10,000 10,000 Mohammad Mostafizur Rahman 0.00% 1,000 10,000 10,000 Electro Mechanical Service Ltd. 0.03% 10,000 100,000 100,000 Ishtiaq Ahmed 0.14% 50,000 500,000 - Nirzar Kanti De 0.05% 20,000 200,000 - Md. Ali Hossain Prodhania 0.14% 50,000 500,000 - Md. Saiful Islam Helaly 0.81% 300,000 3,000,000 - Khan Md. Naim 0.27% 100,000 1,000,000 - Md. Manarul Haque 0.27% 100,000 1,000,000 - Apel Mahmud 0.14% 50,000 500,000 - Mohammed Ishaque 0.14% 50,000 500,000 - Syed Rafiqul Haq 0.81% 300,000 3,000,000 - Habibullah Al Amin 0.05% 20,000 200,000 - Sk. Md. Akramuzzaman 0.27% 100,000 1,000,000 - Md. Toufiqur Rahman 0.14% 50,000 500,000 - Md. Ahad Sumon 0.14% 50,000 500,000 -
Mohammad Rafiqul Islam 0.14% 50,000 500,000 -
MTB Capital Discretionary Portfolio Management
1.35% 500,000 5,000,000 -
Mohammad Fakhrul Alam 0.27% 100,000 1,000,000 - Md. Iftekharul Amin 0.27% 100,000 1,000,000 -
Opening balance 14,117,519 80,547,612 Bonus Share issue - (80,000,000) Net Profit During the year 50,133,182 37,597,596 Adjustment of under provision of tax - (24,027,689) 64,250,701 14,117,519
12.00 Long Term Loan : Tk. 2,521,126
Mercantile Bank 4,161,261 9,897,874 Meghna Bank - -
IDLC 5,301,046 7,162,866 Outstanding balance as on 30 June 2017 9,462,307 17,060,740 Less: Current Maturity of Long Term Loan 6,941,181 8,516,533 Mercantile Bank 4,161,261 5,736,613 Meghna Bank - - IDLC 2,779,920 2,779,920 Long Term Loan (Non-current portion) 2,521,126 8,544,207
Interest payable on Long term loan is included in the current portion of Long term loan.
Above facility has been enjoyed against working capital sanctioned from Mercantile Bank Ltd., Mohakhali Branch, Dhaka and Finance Company IDLC, Gulshan Branch.
Mercantile Bank Ltd. Nature Term Loan
Sanction Limit 18,600,000 Purpose of Loan Machinery
Margin N/A Rate of Interest 11% Execution Date 4 Years Mode of Adjustment Tk. 485,000 Per Month
IDLC Nature Term Loan
Sanction Limit 8,400,000 Purpose of Loan Machinery
Margin N/A Rate of Interest 14.50% Execution Date 4 Years Mode of Adjustment Tk. 231,660 Per Month
13.00 Share Money Deposit : Tk. 0 Energy Meter Company Ltd. - 52,628,081 EM Power Ltd. - 36,934,621 - 89,562,702
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14.00 Deferred tax liability: Tk. 14,655,092 Opening balances 4,265,874 - Add: Provision made during the year 10,389,217 4,265,874 Closing balances 14,655,092 4,265,874 Details shown in Schedule-G 15.00 Accounts Payable : Tk. 10,013,435
ARSHA Trade International 523,680 656,342 Panna Battery Ltd 5,639,958 11,570,250 Arafat Accessories 1,496,516 832,850 B.S Chemical Supply 452,860 881,888 Diamond Insulation Product 458,790 721,406 ESS Paper & Packaging 395,800 556,077 K. Rahman & Brothers 689,580 1,288,287 Ahamad Plastic 356,250 627,500 10,013,435 17,134,600
16.00 Short Term Borrowings : Tk. 103,224,333
LTR & Time Loan 16.02 14,642,096 19,115,919 Bank Overdraft 16.02 88,582,237 84,658,969 103,224,333 103,774,888
Nature Short Term Loan
Sanction Limit 76 Crore Purpose of Loan Raw Materials Lc Margin N/A Rate of Interest 12% Execution Date - Mode of Adjustment (6) Six Month
Sanction Limit 7 Concern At Mercantile Bank Ltd.. Its use any company or seven company. Nature Short Term Loan
Sanction Limit 8.5 Crore Purpose of Loan Raw Materials Lc Margin N/A Rate of Interest 13% Execution Date - Mode of Adjustment (6) Six Month
Sanction Limit 7 Concern At Meghna Bank Ltd.. Its use any company or seven company. 16.01 LTR & Time Loan : Tk. 14,642,096.00
LTR-Mercantile Bank 517,096 528,417 LTR-Meghna Bank 14,125,000 18,587,502 14,642,096 19,115,919
16.02 Bank Over Draft : Tk. 88,582,237.00 Mercantile Bank Ltd. OD A/c 50727 67,260,953 64,059,970
Meghna Bank OD A/c-0030 21,321,284 20,598,999 88,582,237 84,658,969
17.00 Creditors & Accruals : Tk. 43,785,835
Liabilities for Expenses 17.01 2,481,585 2,035,357
Current Tax Payable 17.02 37,447,851 24,342,279
Liability for Workers Profit Participation Fund (WPPF)
17.03 3,856,399 -
43,785,835 26,377,635
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17.01 Liabilities for Expenses : Tk. 2,481,585 Telephone Bill 3,365 2,746 Electricity Bill 237,390 218,477 Salary & Wages 1,836,458 1,569,167 Internet Bill 4,386 3,987 Directors remuneration 165,000 - Audit Fees with VAT 62,500 50,000 Office Rent 35,000 35,000 Others 137,487 155,980 2,481,585 2,035,357 17.02 Current Tax Payable : Tk. 37,447,851.29
Opening balance 24,342,279 41,881,700
Add: Adjustment of under provision of tax
- 24,027,689
Add: Charge for the year 16,605,572 15,978,985 40,947,851 81,888,374 Less: Tax Paid during the year 3,500,000 823,000
Less: Adjustment During the year - 56,723,095 37,447,851 24,342,279
Details shown in Schedule-F 17.03 Workers profit participation fund payable: Tk. 3,856,399
Opening balances - - Add: Provision made during the year 22.00 3,856,399 - 3,856,399 - Less: paid during the year - - Closing balances 3,856,399 - 18.00 Revenue : Tk. 676,290,090 676,290,090 621,904,538
19.01 Raw Materials : Tk. 539,148,069 Opening Balance 69,893,749 51,158,856
Add: Purchase during the year 561,158,431 521,421,338
Raw materials available for Production 631,052,180 572,580,194 Less: Closing balance 91,904,111 69,893,749 Consumption during the year 539,148,069 502,686,445
Festival Bonuses 499,333 463,167 Advertisement 68,617 45,128 Electricity Bill 155,423 91,447 Phone, Fax and Mobile Bill 511,416 461,441 Entertainment Expenses 370,311 357,390 Business development expenses 213,930 110,390 Load & Unload Expenses 1,923,652 1,877,865 Repair & Maintenance 645,624 291,765 Paper and periodicals 156,028 100,210 Delivery Expenses 1,804,073 1,776,430
Bank Charge, Commission & Others 21.01 432,370 316,309 Interest on Bank & Other Finance 21.02 14,481,290 30,484,910 14,913,660 30,801,219
21.01 Bank Charge , Commission & Others : Tk. 432,370
Bank Charge & Commission 432,370 316,309 432,370 316,309
21.02 Interest on Bank & Other Finance : Tk. 14,481,290
Bank Interest 14,481,290 30,484,910 14,481,290 30,484,910
22.00 Workers Profit Participation Fund : Tk. 3,856,399
The Company provides 5% of its profit before Tax as WPPF in accordance with the Bangladesh Labor Act, 2006 (Amendments 2013).
Provision made during the period 3,856,399 - 3,856,399 - 23.00 Current Tax : Tk. 16,605,572
Income tax expenses for the year 16,605,572 15,978,985 Total provision for the period 16,605,572 15,978,985 24.00 Deferred Tax Expense : Tk. 10,389,217
Total Comprehensive Income for the Year 50,133,182 37,597,596 Weighted Average Number of Ordinary Shares (note-25.01) 24,237,802 9,179,501 Earnings per Share (EPS) 2.07 4.10 Earnings per Share (Restated) - 1.55 25.01 Weighted No. of Shares - -
For the year 30 June 2017
Particulars No. of Share Outstandin
g Weight
Weighted average no of
Share
Opening Shares 9,992,000 -
9,992,000
Share Allotment (Dated on 16/03/2017)**
8,956,270 (365/365) 8,956,270
Share Allotment (Dated on 16/03/2017)
18,043,730 (107/365) 5,289,532
Total 36,992,000 24,237,802
** Share money deposit from previous year.
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For the year 30 June 2016
Particulars No. of Share Outstandin
g Weight
Weighted average no of
Share
Opening Shares 150,000 -
150,000
Share Allotment (Dated on 9/12/2015)
1,842,000 (204/265) 1,029,501
Bonus Shares 8,000,000 -
8,000,000
Total 9,992,000 9,179,501 26.00 Net Asset Value (NAV) Per Share
Share capital 369,920,000 99,920,000 Retained earnings 64,250,701 14,117,519 Total shareholders equity 434,170,701 114,037,519 No. of ordinary shares outstanding 36,992,000 9,992,000 Net asset value (NAV) per share 11.74 11.41 27.00 Net operating cash flows per share
Net cash flows from operating activities
11,100,273 43,643,735
Weighted Average Number of Ordinary Shares (note-25.01) 24,237,802 9,179,501 Net operating cash flows (NOCF) per share 0.46 4.75 Net operating cash flows (NOCF) per share (Restated) - 1.80
FY (2016-2017) FY (2015-2016) 28.00 Production Capacity
The production capacity and utilization of its are as follows: Particulars Quantity in Pcs. Installed Capacity 190,000 180,000
Actual Production 148,602 135,574 Capacity Utilization (%) 78.21 75.32 29.00 No. of Employees
Total number of employees are as follows: Particulars No. of Employees
Salary within Tk. 5,300 per month - Salary range above Tk. 5,300 per month 160 Total 160 30.00 Quantity wise schedule of sales as required under Para 3, Schedule XI, Part II of the Companies Act
1994
Quantity wise schedule of sales, raw material consumed and opening and closing stock of finished goods relating to the financial statements for the year ended 30 June 2017 as required under Para 3, Schedule XI, Part II of the companies Act 1994 are given below:
Opening Stock 640,669 489,962 Add: Purchase during the year 8,644,597 8,049,395 Raw Material available for consumption 9,285,266 8,539,357 Less: Closing Stock 896,199 640,669 Raw Material Consumed 8,389,067 7,898,688 (C ) Particulars in respect of opening stock, sales and closing of finished goods:
Particulars 30.06.2017 30.06.2016
Qty in pcs Amount in
Tk Qty in pcs
Amount in Tk
Opening Stock 1,790 19,795,600 1,384 15,300,000 Closing Stock 2,905 33,189,620 1,790 19,795,600 Sales 145,697 676,290,090 133,784 621,904,538 (d) Particulars in respect of Opening Stock and Closing Stock of Inventories
Particulars 30.06.2017 30.06.2016
Qty in kg.pcs Amount in
Tk Qty in kg.pcs Amount in Tk
Raw Materials 896,199
539,148,069
640,669 502,686,445
Work in Process 176,968
48,695,620
135,788 37,101,220
Finished goods 2,905
33,189,620
1,790 19,795,600
31.00 Information as per requirement of Para 8, Schedule XI, Part II of the Companies Act 1994: Disclosure under Para 8, Schedule XI, Part II of the companies Act 1994 are as under:
Particulars FOB/CIF
Basis Value (US Dollar)
Amount in
Taka
Import 69,113 5,529,040 Export - - Disclosure as per requirement of Schedule XI, Part II, Para 8: Raw materials, spare parts, packing materials and capital machinery:
Item Purchase (BDT)
Consumption (BDT)
% of consumption of total purchase Import Local
Raw materials 5,529,040 546,938,291 539,148,069 97.58 Spare parts - 5,595,900 2,035,803 36.38
Packing materials - 3,095,200 1,245,862 40.25 Total 5,529,040 555,629,391 542,429,734 174.21 Value of export: Particulars In foreign currencies (US$) In BDT
Export Total
i) The company has not incurred any expenditure in foreign currencies for the period from 01 July 2016 to 30 June 2017 on account of royalty, know-how, professional fees, consultancy fees and interest;
ii) The company has not earned any foreign exchanges for royalty, know-how, professional fees, consultancy fees and interest;
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iii) The value of export represents for the period from 01 July 2016 to 30 June 2017. Disclosure as per requirement of Schedule XI, Part II, Para 3:
Requirements under Condition No.
Compliance status of
disclosure of Schedule XI,
Part II, Para 3
3(i)(a) The turnover Complied 3 (i)(b) Commission paid to the selling agent Not Complied 3(i)(c ) Brokerage and discount on sales, other than the usual trade discount Not Complied 3(i)(d)(i) The value of the raw materials consumed, giving item wise as possible Complied 3(i)(d)(ii) The opening and closing stocks of goods produced Complied
3(i)(e) In the case of trading companies, the purchase made and the opening and closing stocks
Complied
3(i)(f) In the case of companies rendering or supplying services, the gross income derived from services rendered or supplied
Not Complied
3(i)(g) Opening and closing stocks, purchases and sales and consumption of raw materials with value and quantity break-up for the company, which falls under one or more categories i.e. manufacturing and/or trading
Complied
3(i)(h) In the case of other companies, the gross income derived under different heads Not Complied
3(i)(i) Work-in-progress, which have been completed at the commencement and at the end of the accounting period
Complied
3(i)(j) Provision for depreciation, renewals or diminution in value of fixed assets Complied
3(i)(k) Interest on the debenture paid or payable to the Managing Director, Managing Agent and Manager
Not Complied
3(i)(l) Charge of income tax and other taxation on profits Complied 3(i)(m) Revised for repayment of share capital and repayment of loans Complied
3(i)(n)(i) Amount set aside or proposed to be set aside, to reserve, but not including provisions made to meet any specific liability, contingency or commitment, know to exist at the date as at which the balance sheet is made up
Not Complied
3(i)(n)(ii) Amount withdrawn from above mentioned reserve
3(i)(o)(i) Amount set aside to provisions made for meeting specific liabilities, contingencies of commitments
Not Complied
3(i)(o)(ii) Amount withdrawn from above mentioned provisions, as no longer required Not Complied
3(i)(p) Expenditure incurred on each of the following items, separately for each item: (i) Consumption of stores and spare parts (ii) Power and Fuel (iii) Rent (iv) Repairs of Buildings (v) Repairs of Machinery (vi) (1) Salaries, wages and bonus (2) Contribution to provident and other funds (3) Works men and staff welfare expenses to the extent not adjusted from any previous provision or reserve.
Complied
Disclosure of Advances, Deposits and Pre-payments of Schedule XI of theCompanies Act, 1994: The details
break-up of Advances, Deposits and Pre-payments as per requirement of Schedule XI of the Companies Act, 1994 as stated below:
Particulars 30-06-2017 30-06-2016
Advances, Deposits and Pre-payments exceeding 6 months - - Advances, Deposits and Pre-payments not exceeding 6 months 8,629,113 7,811,276
Other Advances, Deposits & Pre-payments less provission - - Advances, Deposits and Pre-payments considered good and secured - -
Advances, Deposits and Pre-payments considered goods without security 8,629,113 7,811,276
Advances, Deposits and Pre-payments considered doubtful or bad - - Advances, Deposits and Pre payments due by Directors - -
Advances, Deposits and Pre-payments due by other officers (against salary) - -
Advances, Deposits and Pre-payments due from copmpanies under same management - -
Maximum Advances, Deposits & Pre-payments due by Directors - -
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Maximum Advances, Deposits & Pre-payments due by Officers at any time - -
32.00 Related Party Transaction
During the period the Company carried out a number of transactions with related parties in the normal course of business on an arms' length basis. Names of those related parties, nature of those transactions and their total value have been set out in accordance with the provisions of BAS-24: 'Related Party Disclosures' and Para 4, Schedule X, Part II of the Companies Act 1994.
Name & Position Particulars Transaction during the
year /period
Outstanding as on 30.06.2017
Outstanding as on 30.06.2016
Mrs. Umme Bushrah
(Chairman)
Remuneration - - -
Board Meeting
fee 8,000 - -
Md. Ansar Uddin
(Managing Director)
Remuneration 1,980,000 165,000 -
Board Meeting
fee 8,000 - -
Md. Ansar Uddin (Director- Represent by Energy Meter
Co. Ltd.)
Remuneration - - -
Board Meeting
fee - - -
Mr. Md. Rafique Ullah (Director- Represent by
Investment Corporation of Bangladesh)
Remuneration - - -
Board Meeting
fee 4,000 - -
Md. Emad Uddin (Director- Represent by Energy Meter
Co. Ltd.)
Remuneration - - -
Board Meeting
fee - - -
Istak Ahmmed (Independent
Director)
Remuneration -
Board Meeting
fee -
Total 2,000,000 165,000 -
Md. Ansar Uddin one of the Director (Represent by Energy Meter Co. Ltd.) has resigned from Directors panel of ELECTRO BATTERY CO. LTD. dated on 25 July 2017 and his resignation has been granted in the Board Meeting held on 02 June 2017. On the other hand, Md. Emad Uddin (Director- Represent by Energy Meter Co. Ltd.) and Istak Ahmmed (Independent Director) have newly appointed on 25 July 2017 as per decision of board director meeting held on 25 July 2017.
During the period from 01-07-2016 to 30-06-2017, there were 4 (Four) Board Meetings held. The attendance status of all the meetings is as follows:
Istak Ahmmed Independent Director - - Total 14 20,000 Transaction with Key Management Personnel of the entity:
a. Managerial Remuneration paid or payable during the year to the directors, including managing directors, a managing agent or manager.
1,980,000
b. Expenses reimbursed to Managing Agent Nil c. Commission or Remuneration payable separately to a managing agent or his associate Nil
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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
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
f. Any other perquisite or benefits in cash or in kind stating, approximate money value where applicable.
Nil
g. Other allowances and commission including guarantee commission Nil h. Pensions etc.
(i) Pensions Nil (ii) Gratuities Nil (iii) Payments from a provident funds, in excess of own subscription and interest
thereon Nil
i. Share Based payments Nil
As per BAS- 24:
An entity shall disclose key management personnel compensation in total and for each of the following benefits:
95 Separator 495mm,Model-500,600from1600,2000 Pcs 15 18,900 283,500 115,800 1,737,000 108,920 1,633,800 25,780 386,700 96 PE Separator (195 x700m X1.2x0.4)Roll IND Type Roll 6 130,000 14 1,820,000 65 8,450,000 62 8,060,000 17 2,210,000 97 PE Separator (158 x700m X1.2x0.4)Roll IND Type Roll 180,000 28 5,040,000 35 6,300,000 45 8,100,000 18 3,240,000
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98 PE Separator (158 x 900m X 0.8x0.3)Roll IND Type Roll 118,000 16 1,888,000 168 19,824,000 154 18,172,000 30 3,540,000 99 PE Separator (115 x 850m X 1.0x0.3)Roll IND Type Roll 115,000 10 1,150,000 135 15,525,000 127 14,605,000 18 2,070,000 100 GM Separator(148 x 1100m X 0.3)Roll IND Type Roll 116,800 40 4,672,000 228 26,630,400 238 27,798,400 30 3,504,000
30 June 2017 30 June 2016 Computation of Taxable Income IY: 2016-2017 AY: 2017-2018 Accounting Profit before other Income and Tax 77,127,971 57,842,454 Add: Other Inadmissible Allowances Accounting Depreciation 10,074,489 6,145,403 Provision for WPPF 3,856,399 - Less: Items for Separate Consideration Depreciation as per 3rd Schedule 43,614,366 18,333,615 Payment for WPPF ( Previous) - - Total Taxable Income 47,444,493 45,654,242 Rate 35% 35% A. Tax on Total Taxable Income 16,605,572 15,978,985 Other Income - - Rate 35% 35% B. Tax from Other Income - - Total Tax Expenses (A+B) 16,605,572 15,978,985
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ELECTRO BATTERY CO. LTD.
Deferred Tax Calculation as at 30 June 2017
Schedule-G
Deferred tax assets/liability recognized in accordance with the provision of BAS's-12, is arrived as follows: (Amount in Taka)
Particulars Amount in BDT 30 June 2017 30 June 2016
Opening Balance 4,265,874 - Deferred Tax Liability /(Assets) as on 30 June 2017 14,655,092 4,265,874 Increase/(Decrease) of Deferred Tax Liability 10,389,217 4,265,874
Particulars Carrying Amount on Balance Sheet date (Taka)
Tax Base (Taka)
Temporary Differences
(Taka) At 30 June 2017 Property, Plant & Equipment (excluding land), Annexure-F 235,940,699 190,212,610 45,728,089 Addition during the period - - - Temporary difference for lease Assets - - - Liability to Employees (3,856,399) - (3,856,399) Net temporary difference 232,084,300 190,212,610 41,871,690 Applicable Tax rate 35% Deferred Tax Liability/(Asset) 14,655,092 At 30 June 2016 Fixed Assets (At Cost less Accumulated Depreciation)-Excluding Land 92,126,141 79,937,929 12,188,212 Temporary difference for lease Assets - - - Liability to Employees - - - Net temporary difference 92,126,141 79,937,929 12,188,212 Applicable Tax Rate 35% Deferred Tax Liability/(Asset) 4,265,874
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(c) Selected ratios as specified in Annexure-D: Electro Battery Company Limited
Statement of Ratio Analysis The following Ratios have been calculated by the management based on audited financial statements of Electro Battery Company Limited for the year ended 30 June 2017, 30 June 2016, 30 June 2015, 30 June 2014 and 30 June 2013. Selected Ratio as specified in rule 4(1)(d) Annexure D of the Securities and Exchange Commission (Public Issue) Rules, 2015.
Particulars June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013
Result Result Result Result Result I. Liquidity Ratios:
(i) Current Ratio (Times) Current Assets/
1.75 0.92 0.98 1.03 0.96 Current Liability
(ii) Quick Ratio (Times) (Current Assets - Inventory)/
0.68 0.38 0.68 0.68 0.56 Current Liability
II. Operating Ratios:
(i) Accounts Receivable Turnover Ratio Sales/
7.31 7.21 7.09 6.26 14.13 Average Receivables
(ii) Inventory Turnover Ratio (Times) Cost of Goods Sold/
3.66 4.90 5.59 3.69 4.24 Average Inventory
(iii) Assets Turnover Ratio (Times) Sales/
1.37 1.69 1.67 1.34 1.91 Average Total Assets
III. Profitability Ratios:
(i) Gross Margin Ratio (%) Gross Profit/
18.24% 18.17% 18.16% 19.83% 21.02% Sales
(ii) Operating Income Ratio (%) Operating Profit/
13.96% 14.22% 14.15% 14.14% 15.73% Sales
(iii) Net Income Ratio (%) Profit after Tax/
7.41% 6.05% 5.53% 4.15% 4.75% Sales
(iv) Return on Assets Ratio (%) Profit after Tax/
10.15% 10.24% 9.23% 5.58% 9.09% Average Total Assets
(ii) Net Operating Cash Flow per Share/ EPS Net Operating Cash Flow per Share/
0.22 3.07 32.58 84.97 (74.85) EPS
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We have examined the calculation procedure of the above ratios of Electro Battery Company Limited for the year ended 30 June 2017, 30 June 2016, 30 June 2015, 30 June 2014 and 30 June 2013 and no material deviation found in the result. The details calculation is presented in Annexure-A Sd/- Dated: 12 October 2017 AHMAD & AKTAR Place: Dhaka Chartered Accountants
Particulars June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013
June 30, 2017
June 30, 2016
June 30, 2015
June 30, 2014
June 30, 2013
Calculation Calculation Calculation Calculation Calculation Result Result Result Result Result I. Liquidity Ratios:
(i) Current Ratio Current Assets/ 287,011,736 217,366,187 262,225,004 228,037,160 205,509,709
I. Liquidity Ratios: (i) Current Ratio 1.75 1.12 EBCL's Ratio is better than the industry average. (ii) Quick Ratio 0.68 0.40 EBCL's Ratio is better than the industry average. II. Operating Ratios: (i) Accounts Receivable Turnover Ratio 7.31 19.28 EBCL's Ratio is satisfactory with the industry average. (ii) Inventory Turnover Ratio 3.66 2.81 EBCL's Ratio is better than the industry average. (iii) Assets Turnover Ratio 1.37 0.57 EBCL's Ratio is better than the industry average. III. Profitability Ratios: (i) Gross Margin Ratio (%) 18.24% 19.28% EBCL's Ratio is satisfactory with the industry average. (ii) Operating Income Ratio (%) 13.96% 7.93% EBCL's Ratio is better than the industry average. (iii) Net Income Ratio (%) 7.41% 5.52% EBCL's Ratio is better than the industry average. (iv) Return on Assets Ratio (%) 10.15% 3.13% EBCL's Ratio is better than the industry average. (v) Return on Equity Ratio (%) 18.29% 4.17% EBCL's Ratio is better than the industry average. (vi) Basic Earnings Per Share (BEPS) 2.07 1.83 EBCL's Ratio is better than the industry average. (vii) EBITDA Margin 15.67% 18.04% EBCL's Ratio is satisfactory with the industry average IV. Solvency Ratios: (i) Debt to total Assets Ratio 0.18 0.19 EBCL's Ratio is better than the industry average. (ii) Debt to Equity Ratio 4.26 4.26 EBCL's Ratio is better than the industry average. (iii) Times Interest Earned Ratio (Times) 6.43 4.43 EBCL's Ratio is better than the industry average. (iv) Debt Service Coverage Ratio 0.01 0.01 EBCL's Ratio is better than the industry average. V. Cash Flow: (i) Net Operating Cash Flow per Share 0.46 1.28 EBCL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 0.22 0.70 EBCL's Ratio is satisfactory with the industry average.
** The Industry average ratio is calculated by using the ratio of one listed similar companies namely, Quasem Drycell Ltd. for the year ended March 31, 2017 as we have not found same period data (Source: Third quarter Financial Statements). N.B: For wider range of data, we communicate with Bangladesh Bureau of Statistics and Bangladesh Bank. But, we were informed that none of them maintain such ratio with regard to industry concern
I. Liquidity Ratios: (i) Current Ratio 0.92 1.06 EBCL's Ratio is better than the industry average. (ii) Quick Ratio 0.38 0.43 EBCL's Ratio is better than the industry average. II. Operating Ratios: (i) Accounts Receivable Turnover Ratio 7.21 25.89 EBCL's Ratio is satisfactory with the industry average. (ii) Inventory Turnover Ratio 4.90 3.69 EBCL's Ratio is better than the industry average. (iii) Assets Turnover Ratio 1.69 0.73 EBCL's Ratio is better than the industry average. III. Profitability Ratios: (i) Gross Margin Ratio (%) 18.17% 18.99% EBCL's Ratio is satisfactory with the industry average. (ii) Operating Income Ratio (%) 14.22% 7.32% EBCL's Ratio is better than the industry average. (iii) Net Income Ratio (%) 6.05% 4.44% EBCL's Ratio is better than the industry average. (iv) Return on Assets Ratio (%) 10.24% 3.25% EBCL's Ratio is better than the industry average. (v) Return on Equity Ratio (%) 38.35% 4.37% EBCL's Ratio is better than the industry average. (vi) Basic Earnings Per Share (BEPS) 1.55 1.84 EBCL's Ratio is satisfactory with the industry average. (vii) EBITDA Margin 15.24% 15.03% EBCL's Ratio is better than the industry average. IV. Solvency Ratios: (i) Debt to total Assets Ratio 0.32 0.18 EBCL's Ratio is satisfactory with the industry average. (ii) Debt to Equity Ratio 2.88 2.48 EBCL's Ratio is satisfactory with the industry average. (iii) Times Interest Earned Ratio (Times) 2.88 2.48 EBCL's Ratio is better than the industry average. (iv) Debt Service Coverage Ratio 0.15 0.01 EBCL's Ratio is better than the industry average. V. Cash Flow: (i) Net Operating Cash Flow per Share 4.75 2.68 EBCL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 3.07 1.32 EBCL's Ratio is satisfactory with the industry average
** The Industry average ratio is calculated by using the ratio of one listed similar companies namely, Quasem Drycell Ltd. for the year ended June 30, 2016 (Source: Source: Annual Report).
I. Liquidity Ratios: (i) Current Ratio 0.98 1.05 EBCL's Ratio is satisfactory with the industry average. (ii) Quick Ratio 0.68 0.40 EBCL's Ratio is better than the industry average. II. Operating Ratios: (i) Accounts Receivable Turnover Ratio 7.09 32.71 EBCL's Ratio is satisfactory with the industry average. (ii) Inventory Turnover Ratio 5.59 3.22 EBCL's Ratio is better than the industry average. (iii) Assets Turnover Ratio 1.67 0.69 EBCL's Ratio is better than the industry average. III. Profitability Ratios: (i) Gross Margin Ratio (%) 18.16% 18.92% EBCL's Ratio is satisfactory with the industry average. (ii) Operating Income Ratio (%) 14.15% 6.66% EBCL's Ratio is better than the industry average. (iii) Net Income Ratio (%) 5.53% 3.30% EBCL's Ratio is better than the industry average. (iv) Return on Assets Ratio (%) 9.23% 2.27% EBCL's Ratio is better than the industry average. (v) Return on Equity Ratio (%) 44.84% 3.06% EBCL's Ratio is better than the industry average. (vi) Basic Earnings Per Share (BEPS) 1.24 1.25 EBCL's Ratio is satisfactory with the industry average. (vii) EBITDA Margin 15.15% 18.06% EBCL's Ratio is satisfactory with the industry average. IV. Solvency Ratios: (i) Debt to total Assets Ratio 0.47 0.18 EBCL's Ratio is better than the industry average (ii) Debt to Equity Ratio 2.26 0.97 EBCL's Ratio is better than the industry average (iii) Times Interest Earned Ratio (Times) 2.51 1.70 EBCL's Ratio is better than the industry average. (iv) Debt Service Coverage Ratio 0.16 0.97 EBCL's Ratio is satisfactory with the industry average. V. Cash Flow: (i) Net Operating Cash Flow per Share 40.39 2.75 EBCL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 32.58 1.82 EBCL's Ratio is satisfactory with the industry average.
** The Industry average ratio is calculated by using the ratio of one listed similar companies namely, Quasem Drycell Ltd. for the year ended June 30, 2015 (Source: Source: Annual Report).
I. Liquidity Ratios: (i) Current Ratio 1.03 1.06 EBCL's Ratio is satisfactory with the industry average. (ii) Quick Ratio 0.68 0.37 EBCL's Ratio is better than the industry average. II. Operating Ratios: (i) Accounts Receivable Turnover Ratio 6.26 60.09 EBCL's Ratio is satisfactory with the industry average. (ii) Inventory Turnover Ratio 3.69 3.87 EBCL's Ratio is satisfactory with the industry average. (iii) Assets Turnover Ratio 1.34 0.78 EBCL's Ratio is satisfactory with the industry average. III. Profitability Ratios: (i) Gross Margin Ratio (%) 19.83% 18.91% EBCL's Ratio is satisfactory with the industry average. (ii) Operating Income Ratio (%) 14.14% 8.19% EBCL's Ratio is better than the industry average. (iii) Net Income Ratio (%) 4.15% 2.84% EBCL's Ratio is better than the industry average. (iv) Return on Assets Ratio (%) 5.58% 2.21% EBCL's Ratio is better than the industry average. (v) Return on Equity Ratio (%) 35.49% 2.92% EBCL's Ratio is better than the industry average. (vi) Basic Earnings Per Share (BEPS) 0.65 1.16 EBCL's Ratio is satisfactory with the industry average. (vii) EBITDA Margin 15.66% 17.09% EBCL's Ratio is same as the industry average. IV. Solvency Ratios: (i) Debt to total Assets Ratio 0.54 0.20 EBCL's Ratio is satisfactory with the industry average. (ii) Debt to Equity Ratio 1.54 0.95 EBCL's Ratio is satisfactory with the industry average. (iii) Times Interest Earned Ratio (Times) 1.82 4.54 EBCL's Ratio is better than the industry average. (iv) Debt Service Coverage Ratio 0.32 .90 EBCL's Ratio is satisfactory with the industry average. V. Cash Flow: (i) Net Operating Cash Flow per Share 54.94 1.26 EBCL's Ratio is satisfactory as Net Operating Cash Flow is positive. (ii) NOCFPS to EPS Ratio 84.97 0.82 EBCL's Ratio is satisfactory with the industry average.
** The Industry average ratio is calculated by using the ratio of one listed similar companies namely, Quasem Drycell Ltd. for the year ended June 30, 2014 (Source: Source: Annual Report).
I. Liquidity Ratios: (i) Current Ratio 0.96 1.04 EBCL's Ratio is satisfactory with the industry average. (ii) Quick Ratio 0.56 0.40 EBCL's Ratio is satisfactory with the industry average. II. Operating Ratios: (i) Accounts Receivable Turnover Ratio 14.13 87.54 EBCL's Ratio is satisfactory with the industry average. (ii) Inventory Turnover Ratio 4.24 5.78 EBCL's Ratio is better than the industry average. (iii) Assets Turnover Ratio 1.91 1.19 EBCL's Ratio is better than the industry average. III. Profitability Ratios: (i) Gross Margin Ratio (%) 21.02% 17.27% EBCL's Ratio is better than the industry average. (ii) Operating Income Ratio (%) 15.73% 6.72% EBCL's Ratio is better than the industry average. (iii) Net Income Ratio (%) 4.75% 2.39% EBCL's Ratio is better than the industry average. (iv) Return on Assets Ratio (%) 9.09% 2.58% EBCL's Ratio is better than the industry average. (v) Return on Equity Ratio (%) 64.23% 2.04% EBCL's Ratio is better than the industry average. (vi) Basic Earnings Per Share (BEPS) 0.96 0.80 EBCL's Ratio is satisfactory with the industry average. (vii) EBITDA Margin 17.10% 16.03% EBCL's Ratio is satisfactory with the industry average. IV. Solvency Ratios: (i) Debt to total Assets Ratio 0.75 0.17 EBCL's Ratio is satisfactory with the industry average. (ii) Debt to Equity Ratio 1.93 0.95 EBCL's Ratio is better than the industry average. (iii) Times Interest Earned Ratio (Times) 1.93 4.62 EBCL's Ratio is better than the industry average. (iv) Debt Service Coverage Ratio 0.61 3.17 EBCL's Ratio is satisfactory with the industry average. V. Cash Flow: (i) Net Operating Cash Flow per Share -72.05 3.65 EBCL's Ratio is negative as Net Operating Cash Flow is negative. (ii) NOCFPS to EPS Ratio -74.85 3.11 EBCL's Ratio is negative as Net Operating Cash Flow is negative.
** The Industry average ratio is calculated by using the ratio of one listed similar companies namely, Quasem Drycell Ltd. for the year ended June 30, 2013 (Source: Source: Annual Report).
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(d) Auditors report under Section 135(1), Para 24(1) of Part II of Schedule III of the . 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:
Electro Battery Company Limited Auditors' report in pursuance of section 135(1) under Para 24(1) of Part-II of the Third Schedule of the Companies Act, 1994
As required under section 135(1), Para 24(1), Part II of the Third Schedule of Companies Act 1994, we appended below the following financial information of Electro Batter Company Limited for the year ended 30 June 2017 and 30 June 2016 audited by us, 30 June 2015, 30 June 2014 & 30 June 2013 audited by Mohammad Ata Karim & Co. , Chartered Accountants. 1. Electro Battery Company Limited was incorporated on November 24, 2008. 2. The Operating results of the company over the last 5 years operation is as follows: A) Statement of Financial Position:
Assets and Properties June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013
Taka Taka Taka Taka Taka Non-current assets 328,299,968 154,847,772 100,163,236 61,047,311 66,785,637 Property, Plant & Equipment 235,940,700 92,126,141 88,813,044 61,047,311 66,785,637 Capital Work in Progress 92,359,268 62,721,631 11,350,192 - - Current assets: 287,011,736 217,366,187 262,225,004 228,037,160 205,509,709 Inventories 175,093,609 127,193,379 80,527,356 78,665,923 85,082,368 Accounts Receivable 102,987,666 81,922,083 90,592,535 62,672,204 57,810,154 Advance, Deposit and Prepayments 8,629,113 7,811,276 67,879,495 59,708,613 38,837,411 Investment - - 23,021,500 23,021,500 23,021,500 Cash and Cash Equivalents 301,348 439,449 204,118 3,968,920 758,276 Total Assets 615,311,704 372,213,959 362,388,240 289,084,471 272,295,346 Shareholder's Equity and Liabilities Shareholder's Equity 434,170,701 114,037,519 82,047,611 51,996,272 36,323,928 Share Capital 369,920,000 99,920,000 1,500,000 1,500,000 1,500,000 Retained Earnings 64,250,701 14,117,519 80,547,611 50,496,272 34,823,928 Non-current Liabilities 17,176,218 21,326,614 13,401,145 16,699,281 22,188,551 Long Term Loan 2,521,126 17,060,740 13,401,145 16,699,281 22,188,551 Deferred tax liability 14,655,092 4,265,874 - - - Current Liabilities 163,964,785 236,849,826 266,939,484 220,388,918 213,782,867 Accounts Payable 10,013,435 17,134,600 1,798,060 8,920,288 8,700,000 Current Maturity of Long Term Loan 6,941,181 - - - Short Term Borrowings 103,224,333 103,774,888 157,929,070 140,644,653 182,525,386 Creditors & Accruals 43,785,836 26,377,637 44,124,272 27,924,746 22,330,630 Advance Deposit against sales - 560,000 226,850 Share Money Deposit - 89,562,702 63,088,081 42,339,231 - Total shareholders' equity and liabilities 615,311,704 372,213,959 362,388,240 289,084,471 272,295,346 Net Asset Value (NPV) per share 11.74 11.41 546.98 346.64 242.16
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B. Statement of Operating Result:
Particulars June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013
Taka Taka Taka Taka Taka
Revenue 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674 Less: Cost of goods sold 552,958,920 508,897,947 444,695,721 302,466,351 388,061,654 Gross Profit 123,331,170 113,006,591 98,664,337 74,823,377 103,280,020 Operating Expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Administrative & Selling Expenses 27,433,140 24,362,918 21,781,967 21,470,694 25,973,812 Profit from Operation 95,898,031 88,643,674 76,882,370 53,352,683 77,306,208 Financial Expenses 14,913,660 30,801,219 30,649,541 29,241,384 39,975,800 Net profit before charging WPPF for the period 80,984,371 57,842,455 46,232,829 24,111,299 37,330,408 Less: Contribution to WPPF 3,856,399 - - - - Profit before Income Tax 77,127,972 57,842,455 46,232,829 24,111,299 37,330,408 Income tax Expenses 26,994,790 20,244,859 16,181,490 8,438,955 13,998,903 Current Tax 16,605,573 15,978,985 16,181,490 8,438,955 13,998,903 Deferred Tax 10,389,217 4,265,874 - - - Net Profit after Tax 50,133,182 37,597,596 30,051,339 15,672,344 23,331,505 Earnings per Share (Restated) 2.07 1.55 1.24 0.65 0.96 Earnings per Share(fully diluted-Restated) 1.36 1.02 0.81 0.42 0.63 C) Dividend declared:
Particulars June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013
Taka Taka Taka Taka Taka Cash dividend % - - - - - Stock dividend % - - 5,333.33 - - D) Electro Battery Company Limited was incorporated on September 18, 2005 vide registration number C-59061(1067)/05 as a private limited company under the Companies Act, 1994. The Company was converted into a Public Ltd Company on February 14, 2016 under the Companies Act, 1994. E) The Company started its commercial operation in 18 February 2009. F) The Company has no Subsidiary company. 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 prepared accounts for the year ended June 30, 2017 I) Figures related to previous years have been rearranged wherever considered necessary. Sd/- Dated: 12 October 2017 AHMAD & AKTAR Place: Dhaka Chartered Accountants
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(e) Financial spread sheet analysis for the latest audited financial statements: Electro Battery Electrode Ltd
Statement of Financial Position As at June 30, 2017
Particulars Amount Percentage on Total Asset
Grand Percentage
ASSETS Non Current Assets 328,299,968 53.36% Property, Plant & Equipment 235,940,700 38.34% Land 13,963,031 2.27% Building & Civil Construction 136,924,681 22.25% Electrical Line Inst. 112,303 0.02% Machineries 78,786,829 12.80% Furniture & Fixture 2,076,848 0.34% Computer 745,534 0.12% Office Equipment 1,479,784 0.24% Factory Equipments 892,730 0.15% Computer Softwear 14,706 0.00% Fire Equipment 923,020 0.15% Vehicles 21,234 0.00% Capital Work in Progress 92,359,268 15.01% Capital Work in Progress 92,359,268 15.01% Current Assets 287,011,736 46.64% Inventories 175,093,609 28.46% Raw Materials 91,904,111 14.94% Packing Materials 458,462 0.07% Store & Spare Parts 845,796 0.14% Work in process 48,695,620 7.91% Finished Goods 33,189,620 5.39% Accounts Receivable 102,987,666 16.74% Accounts Receivable 102,987,666 16.74% Advance, Deposit and Prepayments 8,629,113 1.40% Advance Income Tax 3,547,648 0.58% Letter of Credit 158,425 0.03% Bank Guarantee 377,124 0.06% VAT Current A/c 4,545,916 0.74% Cash and Cash Equivalents 301,348 0.05% Total Assets 615,311,704 100.00%
SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' Equity 434,170,701 70.56% Share Capital 369,920,000 60.12% Retained Earnings 64,250,701 10.44% Non-Current Liabilities 17,176,218 2.79% Long Term Loan 2,521,126 0.41% Deferred tax liability 14,655,092 2.38% Current Liabilities 163,964,786 26.65% Accounts Payable 10,013,435 1.63% Current Maturity of Long Term Loan 6,941,181 1.13% Share Money Deposit - 0.00% Short Term Borrowings 103,224,333 16.78% Creditors & Accruals 43,785,835 7.12% Liabilities for Expenses 2,481,585 0.40% Telephone Bill 3,365 0.00% Electricity Bill 237,390 0.04% Salary & Wages 1,836,458 0.30% Internet Bill 4,386 0.00% Directors remuneration 165,000 0.03% Audit Fees with VAT 62,500 0.01% Office Rent 35,000 0.01% Others 137,487 0.02% Current Tax Payable 37,447,851 6.09% Liability for Workers Profit Participation Fund (WPPF)
3,856,399 0.63%
Total Shareholders' Equity and Liabilities 615,311,704 100.00%
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Electro Battery Electrode Ltd
Statement of profit or loss & other comprehensive income For the year ended June 30, 2017
Particulars For the year ended June 30, 2017
Percentage on total revenue
Grand percentage
Revenue 676,290,090 100.00% Less: Cost of goods sold 552,958,920 81.76% Raw materials consumed 539,148,069 79.72% Manufacturing Overhead 38,799,271 5.74% 577,947,340 Add: Work in process- Opening 37,101,220 Less: Work in process- Closing 48,695,620 Cost of goods Manufactured 566,352,940 83.74% Add: Finished goods - Opening 19,795,600 Cost of Goods available for Sale 586,148,540 86.67% Less: Finished goods - Closing 33,189,620 Cost of goods sold 552,958,920 81.76% Gross Profit 123,331,170 18.24% Operating Expenses 27,433,140 4.06% Administrative Expenses 12,539,468 1.85% Selling Expenses 14,893,672 2.20% Profit from Operation 95,898,031 14.18% Financial Expenses 14,913,660 2.21% Net profit before charging WPPF for the period 80,984,371 11.97% Less: Contribution to WPPF 3,856,399 0.57% Profit before Income Tax 77,127,972 11.40% Income tax Expenses 26,994,789 Current Tax 16,605,572 2.46% Deferred Tax 10,389,217 1.54% Net Profit after Tax 50,133,182 7.41%
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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:
Particulars Amount in Taka Net profit after Tax 50,133,182 Total existing number of Share 36,992,000 Weighted average number of Share 24,237,802 Earnings per Share (EPS) considering existing no. of shares 1.36 Earnings per Share (EPS) considering weighted average no. of shares 2.07
Calculation of weighted average number of share
Particulars No. of Share Outstanding Weight Weighted average
no of Share Opening Shares 9,992,000 - 9,992,000 Share Allotment (Dated on 16/03/2017)** 8,956,270 (365/365) 8,956,270 Share Allotment (Dated on 16/03/2017) 18,043,730 (107/365) 5,289,532 36,992,000 24,237,802
(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:
Particulars Amount in Taka Net profit before tax 77,127,971 Less: Extra-ordinary income or non-recurring income - Net profit before tax except other income 77,127,971 Less: Current tax 16,605,572 Less: Deferred tax 10,389,217 Net profit after tax except other income 50,133,182 Total existing number of Share 36,992,000 Weighted average number of Share 24,237,802 Earnings per Share (EPS) considering existing no. of shares 1.36 Earnings per Share (EPS) considering weighted average no. of shares 2.07
(h) Quarterly or half-yearly EPS should not be annualized while calculating the EPS:
This information is not applicable for us. (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. Particulars Amount in Taka Share Capital 369,920,000 Retained Earnings 64,250,701 Total Shareholders' Equity 434,170,701 Total Number of ordinary shares 36,992,000 Net Assets Value (NAV) at BDT 10.00 per share 11.74
(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 us.
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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 paid/accrued After due verification, we certify that the Long Term and Short Term Borrowings Including Borrowing from Related Party or Connected Persons of Electro Battery Company Limited for the last five years made up as follows: For the year ended June 30, 2017
Name of the Parties
Nature of Relationship
Nature of Borrowings
Balance as on 30 June 2017 (BDT)
Interest Rate (%)
Interest Paid (BDT)
Interest Accrued (BDT)
Mercantile Bank Lender Long Term 4,161,261 11% 214,303
No outstanding balance of interest for the period
Meghna Bank Lender Long Term - - - IDLC Lender Long Term 5,301,046 14.50% 17,65,907 Sub Total 9,462,307 19,80,210 Mercantile Bank Lender Short Term 6,77,78,049 12% 86,04,751 Meghna Bank Lender Short Term 3,54,46,284 13% 38,96,329 Sub Total 10,32,24,333 1,25,01,080 Grand Total 11,26,86,640 1,44,81,290
For the Year ended June30, 2016
Name of the Parties Nature of
Relationship Nature of
Borrowings
Balance as on 30 June 2016
(BDT)
Interest Rate (%)
Interest Paid (BDT)
Interest Accrued (BDT)
Mercantile Bank Lender Long Term 98,97,874 15% 21,79,548 No
outstanding balance of interest for the period
Meghna Bank Lender Long Term IDLC Lender Long Term 71,62,866 14.50% 7,68,312 Sub Total 1,70,60,740 29,47,860 Mercantile Bank Lender Short Term 6,45,88,387 13% 1,64,77,249 Meghna Bank Lender Short Term 3,91,86,501 14.50% 1,10,59,801 Sub Total 10,37,74,888 2,75,37,050 Grand Total 12,08,35,628 3,04,84,910
For the Year ended June 30, 2015
Name of the Parties
Nature of Relationship
Nature of Borrowings
Balance as on 30 June 2015
(BDT)
Interest Rate (%)
Interest Paid (BDT)
Interest Accrued (BDT)
Mercantile Bank Lender Long Term 1,34,01,145 15% 29,89,746
No outstanding balance of interest for the period
Meghna Bank Lender Long Term - - -
IDLC Lender Long Term - - -
Sub Total 1,34,01,145 29,89,746 Mercantile Bank Lender Short Term 8,11,34,424 14% 1,83,65,185 The City Bank Ltd. Lender Short Term 4,46,85,075 14.50% 42,61,203 IDLC Lender Short Term 3,21,09,571 15.50% 46,98,167 Sub Total 15,79,29,070 2,73,24,555 Grand Total 17,13,30,215 3,03,14,301
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For the Year ended June 30, 2014
Name of the Parties Nature of
Relationship Nature of
Borrowings
Balance as on 30 June 2014
(BDT)
Interest Rate (%)
Interest Paid (BDT)
Interest Accrued (BDT)
Mercantile Bank Lender Long Term 1,66,99,281 15% 454,720
No outstanding balance of interest for the period
Meghna Bank Lender Long Term - - -
IDLC Lender Long Term - - -
Sub Total 1,66,99,281 454,720
Mercantile Bank Lender Short Term 8,37,27,421 15% 1,67,15,149
IDLC Lender Short Term 2,05,51,259 17.50% 19,48,132
The City Bank Ltd. Lender Short Term 3,63,65,973 15.50% 93,00,769
Sub Total 14,06,44,653 2,79,64,050
Grand Total 15,73,43,934 2,84,18,770
For the Year ended June 30, 2013
Name of the Parties Nature of
Relationship Nature of
Borrowings
Balance as on 30 June 2013
(BDT)
Interest Rate (%)
Interest Paid (BDT)
Interest Accrued (BDT)
Eastern Bank Ltd. Lender Long Term 2,21,88,551 15.50% 18,95,631
No outstanding balance of interest for the period
Dutch Bangla Bank Ltd. Lender Long Term - - -
IDLC Lender Long Term - - -
Sub Total 2,21,88,551 18,95,631
Eastern Bank Ltd. Lender Short Term 10,63,98,129 15.50% 1,95,85,866 Dutch Bangla Bank Ltd. Lender Short Term 3,57,01,647 15.50% 1,26,80,722 IDLC Lender Short Term 4,04,25,610 17.50% 46,16,138 Sub Total 18,25,25,386 3,68,82,726 Grand Total 20,47,13,937 3,87,78,357
The above information is certified on the basis of books of accounts, records and supporting bank statements for the period from 01 July 2012 to 30 June 2017. It’s noted that there was no borrowing from related party or connected person
during the period.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
151
(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/other security, re-payment schedule and status After due verification, we certify that the Principal Terms of Secured Loans as per loan agreement and Assets on which Charge have been Created against Those Loans of Electro Battery Company Limited from 01 July 2012 to 30 June 2017 were as follows: Long term Loan:
Particulars 30-June-17 30-June-16 30-June-15 30-June-14 30-June-13 Names of lenders Mercantile Bank Mercantile Bank Mercantile Bank Mercantile Bank Eastern Bank Ltd. Purpose Machinery Machinery Machinery Machinery Machinery Collateral Asset - - - - - Sanctioned Amount - - - - 2,70,00,000 Rate of Interest - - - - 15.50% Primary/Collateral/ Other Security
The above information is certified on the basis of books of accounts, records and supporting bank statements and documents for the period from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
(iii) Statement of unsecured loans with terms & conditions:
Certificate on unsecured loans with terms & conditions of Electro Battery Company Limited for the last five years This is to certify that Electro Battery Company Limited did not take any unsecured loan from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
(iv) 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.: Certification on Statement of Inventories raw material, packing material, stock-in process and finished goods, consumable items, store & spare parts, inventory of trading goods etc. 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 & spare parts, inventory of trading goods etc. of Electro Battery Company Limited for the last five years were as follows:
Total 175,093,609 127,193,379 80,527,356 78,665,923 85,082,368 The above balance is certified on the basis of books of accounts, records are other supporting documents for the period from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
153
(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 Electro Battery Company Limited After due verification, we certify that the statement of trade receivables showing receivables from related party and connected persons of Electro Battery Company Limited for the last five years were as follows:
Name of Client 30-June-17 30-June-16 30-June-15 30-June-14 30-June-13 Asian Enterprise 27,48,750 - - - - Eco distribution Ltd. - - - 32,60,050 1,02,55,014 Srizony Bangladesh - - - 33,16,570 Ava Development Society 56,20,490 51,09,536 1,86,78,380 1,18,25,275 77,59,300 Bright Green Energy Foundation - - - - 17,133 Chief Engineering Architecture - - - 50,000 Golam Mortuza - - - - 12,330 Grameen Shakti 50,37,631 66,18,102 71,09,115 63,01,081 2,89,05,384 PolliBondhu 65,33,794 32,12,540 39,91,650 84,38,955 - Grameen Bitec Ltd - - - - 89,520 Green Housing & Energy Ltd. 52,29,417 42,99,470 29,33,507 19,09,500 24,09,500 Shakti Foundation 25,30,500 - - - - IDF 69,18,670 62,89,700 79,12,500 - - MM Solar 50,99,034 58,17,304 55,32,000 - - Grameen Phone 41,56,790 37,78,900 15,00,000 - - Nabonita - - - - 68,900 Maria Battery & Charger 17,50,600 - - - - Pacific Bangladesh Telecom Ltd. 60,82,174 92,02,794 80,82,000 1,13,69,894 358,200 Patakuri Society - - - - 10,90,000 New Al Modina Auto House 12,50,000 - - - - SDRS 40,38,500 58,45,890 82,31,861 1,45,76,949 16,32,900 New Sudoy Auto Parts 12,84,500 - - - - BTCL 48,42,690 - - - - Sadia Battery House 17,85,600 - - - - Action in Development 70,36,117 63,96,470 18,96,200 - - Surjer Alo 47,46,350 25,90,000 55,20,000 - - Vai Vai Cycle Store 19,30,900 - - - - International Beverage Pvt. Ltd. (IBPL) 668,950 42,44,500 50,30,000 - - Sherpa Power Engineering - - - - 109,772 Solaren Foundation - - - - 56,923 Solar International (Solaric) - - - - 496,685 Sun Homes Energy 68,09,550 61,90,500 26,00,000 - 390,000 UBOMUS 76,04,898 31,06,191 582,750 - - Super Nova - - - - 195,538 TMSS 41,04,600 80,82,000 42,50,000 49,90,500 270,344 Others 51,77,161 11,38,186 67,42,572 - 326,141 Total 10,29,87,666 8,19,22,083 9,05,92,535 6,26,72,204 5,78,10,154 From related party Nil Nil Nil Nil Nil From connected persons Nil Nil Nil Nil Nil Grand total 10,29,87,666 8,19,22,083 9,05,92,535 6,26,72,204 5,78,10,154
The above information certificates on the basis of books of accounts, record and other related document. We also certify that no amount receivable from related party and connected person.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
154
(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 issuer including loan to Related Party or Connected Persons with rate of interest and interest realized/accrued by the Electro Battery Company Limited. This is to certify that Electro Battery Company Limited did not give any loan to any related party or connected person from July 01, 2012 to June 30, 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR 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 Electro Battery Company Limited. This is to certify that Electro Battery Company Limited did not have other income showing interest income, dividend income, discount received and other non-operating income for the last five years.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR 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 Electro Battery Company Limited. After due verification, we certify that the turnover showing separately in cash and through banking channel of Electro Battery Company Limited during last five years were as follows:
Particulars Amount in BDT
30-June-17 30-June-16 30-June-15 30-June-14 30-June-13 In Cash 57,484,658 55,971,408 97,804,810 45,274,767 93,354,918 Through Banking Channel 618,805,432 565,933,130 445,555,248 332,014,961 397,986,756 Total 676,290,090 621,904,538 543,360,058 377,289,728 491,341,674
The above balance is certified on the basis of books of accounts, records and other supporting documents during the period from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
155
(ix) Statement of related party transaction: Certification on Statement of Related Party Transaction of Electro Battery Company Limited
After due verification, we certify that the status of related party transactions of Electro Battery Company Limited for the last five years were as follows: Director Remuneration & Board Meeting attendance fees
Name Position
Amount in (BDT) Year
Ended, June 30,
2017
Year Ended,
June 30, 2016
Year Ended,
June 30, 2015
Year Ended,
June 30, 2014
Year Ended,
June 30, 2013
Mrs. Umme Bushrah (Chairman) Chairman - - - - -
Mr. Md. Ansar Uddin Managing Director
19,80,000 - - - -
Md. Ansar Uddin (Director- Represent by Energy Meter Co. Ltd.)
Director - - - - -
Mr. Md. Rafique Ullah (Director- Represent by Investment Corporation of Bangladesh)
Director - - - - -
Md. Emad Uddin (Director- Represent by Energy Meter Co. Ltd.)
The above balance is certified on the basis of books of accounts, records are other supporting documents for the period from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
(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 Electro Battery Company Limited for the last five years. This is to certify that the income of Electro Battery Company Limited as per Audited financial statements and Income shown in Tax Return are similar during last five years as such there was no matters of reconciliation.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR 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 receipts and payments above Tk. 500,000 (Five lac) were made through Banking channel of Electro Battery Company Limited
This is to certify that all receipts and payments of Electro Battery Company Limited above Tk. 5,00,000 (five lac) were made through banking channel from 01 July 2012 to 30 June 2017.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
156
(xii) Confirmation that Bank Statements of the issuer are in conformity with its books of accounts: Certification on books of accounts of Electro Battery Company Limited are in conformity with bank statements This is to certify that the books of accounts of Electro Battery Company Limited from 01 July 2012 to 30 June 2017 are in conformity with bank statements.
Dated: 12 October 2017 Place: Dhaka
Sd/- AHMAD & AKHTAR Chartered Accountants
(xiii) Statement of payment status of TAX, VAT and other taxes or duties: Certification on status of payment of TAX, VAT and other Taxes/Duties of Electro Battery Company Limited. After due verification, we certify that the status of TAX, VAT and other taxes/ duties payment of Electro Battery Company Limited for the last five years were as follows:
Particulars Payment Status 30-June-17 30-June-16 30-June-15 30-June-14 30-June-13
Section (xxvii): Public issue application procedure: as described in the consent letter 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.
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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.
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 submitted by Non-resident Bangladeshi (NRB) and Foreign applicants and the list containing the drafts and certificates 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.
158
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.
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.
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.
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All eligible Stock Brokers and Merchant Bankers shall receive the IPO subscription. Others: The IPO subscription money collected from investors will be remitted in following bank accounts with Mutual Trust Bank Limited, Principal Branch:
Sl# Account bearing number Account title Currency For Resident Bangladeshis 01 002-0210031873 Electro Battery Company Limited BDT For Non-resident Bangladeshis 02 002-0260005665 Electro Battery Company Limited USD 03 002-0260005674 Electro Battery Company Limited GBP 04 002-0260005683 Electro Battery Company Limited EURO
