“If you have any queries about this document, you may consult issuer, issue managers.

Information Document
Direct Listing in DSE & CSE
of

for

Khulna Power Company Ltd.
Corporate Office: Summit Centre (5th Floor), 18 Karwan Bazar C/A, Dhaka-1215, Bangladesh
Phone: [+8802] 9132437-8; 8125142; 8125433; Fax: [+8802] 9125682; Website: www.khulnapower.com

Offloading of 5,21,48,250 Ordinary Shares of Tk 10.00 each
Listing Date: 15th March 2010 DSE & 18th March 2010 CSE

Indicative Price for Book Building Purpose Tk.162.00 Eligible institutional investors’ bidding on April 04, 05, 06, 2010
Manager to the Issue

Amin Court, 4th Floor (Suite # 404), 31 Bir Uttam Shahid Ashfaqueus Samad Road, Motijheel C/A, Dhaka-1000 Phone: +8802 9559602, +8802 9567726 Fax: +8802 9558330 Web-site: www.aaawebbd.com, e-mail: info@aaawebbd.com

DATE OF THE INFORMATION DOCUMENT
18th March, 2010

Credit Rating Report by Credit Rating Information and Services Limited (CRISL)
Long Term
Entity Rating Outlook Date of Rating AA Stable 16 September, 2009

Short Term
ST-1

“CONSENT OF THE EXCHANGES HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE DHAKA STOCK EXCHANGE & CHITTAGONG STOCK EXCHANGE (DIRECT LISTING) REGULATIONS, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE EXCHANGES DO NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SHARE OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE FOR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/ CHIEF FINANCIAL OFFICER, ISSUE MANGER AND/OR AUDITOR. “THE MONEY (PROCEEDS) AGAINST SALE OF SHARES THROUGH THIS INFORMATION DOCUMENT WILL BELONG TO THE SPONSORS/SHAREHOLDERS CONCERNED. THE COMPANY WILL NOT GET THIS MONEY.”

Availability of Information Document
Information Document of the company may be available at the following address Company Khulna Power Company Ltd. Corporate Office: Summit Centre (5th Floor), 18 Karwan Bazar C/A, Dhaka-1215, Bangladesh Manager to the Issue AAA Consultants & Financial Advisers Ltd. Amin Court, 4th Floor (Suite # 404), 31 Bir Uttam Shahid Ashfaqueus Samad Road (Previous 62-63) Motijheel C/A, Dhaka-1000 Stock Exchanges Dhaka Stock Exchange Ltd. 9/F Motijheel C/A Dhaka –1000 Chittagong Stock Exchange Ltd., CSE Building, 1080 Sheikh Mujib Road, Chittagong. Contact Person
M. Aminur Rahman Financial Controller & Company Secretary

Contact Number 9132437-8 8125142 Contact Number 9559602 9567726 Contact Number 9564601-7

Contact Person Khwaja Arif Ahmed Managing Director & CEO Available at DSE Library

CSE Library

031-714632-3 031-720871-3

Information document is also available on the website www.khulnapower.com, www.aaawebbd.com, www.dsebd.com, www.csebd.com, www.secbd.org and public reference room of the Securities and Exchange Commission (SEC) for reading and study.

Definition and Abbreviations
AAA Allotment BB BO A/C BPC BPDB Certificate Commission Companies Act CSE DESA DESCO DSE Exchanges FC Account FSA FT GOB IFC IPP Issuer KPCL MEMR MW NAV NBFI NBR NRB O&M PBSs PGCB PPA REB Registered Office RJSCF SC SEC Securities T&D Tk AAA Consultants and Financial Advisers Ltd. Allotment of shares Bangladesh Bank Beneficiary Owner’s Account Bangladesh Petroleum Corporation Bangladesh Power Development Board Share certificate Securities and Exchange Commission Companies Act, 1994 (Act No. XVIII of 1994) Chittagong Stock Exchange Dhaka Electric Supply Authority Dhaka Electric Supply Company Ltd. Dhaka Stock Exchange Limited Stock Exchanges Foreign Currency Account Fuel Supply Agreement Fuel Tariff Government of Bangladesh International Finance Corporation Independent Power Producer Khulna Power Company Ltd. Khulna Power Company Ltd. Ministry of Power, Energy and Mineral Resources Megawatt Net Asset Value Non-Banking Financial Institution National Board of Revenue Non Resident Bangladeshi Operation and Maintenance Palli Bidyut Samities Power Grid Company of Bangladesh Power Purchase Agreement Rural Electrification Board Summit Centre (5th Floor), 18 Karwan Bazar C/A, Dhaka-1215, Bangladesh Registrar of Joint Stock Companies & Firms Share Certificate Securities and Exchange Commission Shares of KPCL Transmission & Distribution Taka

Table of contents
Sl. A.

Item
DISPOSAL OF SHARES Details of offloading shares by the existing shareholders as per regulation of DSE & CSE regulation Procedures to be followed for determining price under book building method Indicative price for book building purpose RISK FACTORS AND MANAGEMENT PERCEPTION ABOUT RISK DESCRIPTION OF THE BUSINESS Information about the company Background of the past shareholder Background of Present Shareholders Distribution procedure of products or services Competitive Condition of the Business Sources and availability of raw materials and the names of the principal suppliers Sources of power, gas and water Name of the customer who purchase 10% and more of the company’s products Description of contract with suppliers and customer Description of any material patents, trademarks, licenses or royalty agreements Number of total and full time employees Production capacity and current utilization

Page No. 1 1 2 2 6 10 10 14 15 23 23 25 25 25 25 26 26 27 27 27 27 27 27 28 28 28 28 28 28 29 29 29 29 29 29 29 30 30 30 30 30

B. C.

D.

DESCRIPTION OF THE PROPERTY Location of the power plant and other property and condition of such property Ownership of property Lien on property Expiration date of Leasehold Property PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITION Internal and External Sources of cash Commitment for capital expenditure Material change from period to period as per audited accounts Seasonal aspect Known trends, events or uncertainties Changes in the assets used to pay off any liability Loan taken from the holding/subsidiary company or loans given to those companies Future contractual liabilities Estimated future capital expenditure VAT, income tax, customs duty or other tax liability Sources from which VAT, income tax, customs duty or other liabilities are to be paid Lease commitment Lease Details Personnel related schemes to make provision in future years Break down of issue expenses Revaluation of Asset Last five years’ transactions between the issuer company and its subsidiary/holding company

E.

Auditors certificate on allotment of shares to shareholders including promoters and sponsor shareholders for any consideration otherwise than for cash Material information having impact on the affair of the company DIRECTORS AND OFFICERS Name, Age and Position of all Directors Date of first becoming Director and date of expiry of current term Involvement of Directors with Listed Company in terms of Dividend & Category Involvement of Directors with another Company Family relationship between the directors and officers Short biography of the directors and officers Ownership List of shareholders who owns 5% or more than 5% share of the Company Name and qualifications of the Senior Officers INVOLVEMENT OF THE DIRECTORS AND OFFICERS IN CERTAIN LEGAL PROCEEDINGS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH RELATED PARTIES EXECUTIVE COMPENSATION OPTION GRANTED TO OFFICER, DIRECTORS AND EMPLOYEES TRANSACTION WITH PROMOTERS BENEFIT FROM THE COMPANY TANGIBLE ASSETS PER SHARE OWNERSHIP OF COMPANY’S SECURITIES Ownership List of shareholders who owns 5% or more than 5% share of the Company The shareholding position of ordinary shares DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED Dividend, voting and pre-emption rights of the shares outstanding or being offered Conversion and liquidation rights of any preferred stock outstanding or being offered Limitations on the Payment of dividends to common or preferred stockholders Other material rights of common or preferred stockholders DEBT SECURITIES Terms and conditions of debt securities that the company may have issued or to be issued Principal amount, maturity date, interest rate and other features of all debt securities All other material provisions giving or limiting the rights of the holders of debt Trustees designated by the indenture for outstanding debt or for debt being offered Preference Share Corporate Directory CREDIT RATING REPORT AUDIT REPORT & FINANCIAL STATEMENT Financial Projection Auditors' report under section 135(1) and Para 24(1) of Part II of Schedule III of the Companies Act 1994 Ratio Analyses Additional Disclosure by the Management

30 31 31 31 31 32 32 35 36 38 38 39 39 40 40 40 41 42 42 42 43 43 43 43 44 44 44 44 44 44 44 45 46 61 87 89 91 93

F.

G. H. I. J. K. L. M.

N.

O.

A. DISPOSAL OF SHARES:
1. Details of offloading shares by the Existing Shareholders as per Regulation 5 of Dhaka & Chittagong Stock Exchange (Direct Listing) Regulations, 2006 as amended The existing shareholders of the company shall offload 5,21,48,250 ordinary shares of Tk.10.00 per share worth Tk. 52,14,82,500 (Fifty Two crore Fourteen lac Eighty Two thousand and Five hundred) with a minimum market lot of 100 (Hundred) shares following the Regulation 5 of Stock Exchange (Direct Listing) Regulations,2006 as amended, the Depository Act,1999 and regulations issued there under: i. As resolved in the Board of Directors of KPCL and also as per resolution taken in the EGM of KPCL, 25% or the minimum required by the regulation of the proposed offer (i.e. 5,21,48,250 shares) to be sold to the general public/institutions at Market Price. ii. The information Document, as vetted by DSE/CSE, shall be published in at least two widely circulated national dailies (One in English and one in Bengali) minimum 7 (Seven) days before commencement of trade upon listing by DSE/CSE along with an electronic copy for posting in the web page of DSE/CSE. iii. The company shall simultaneously submit the vetted Information Document with all exhibits to SEC, to the Stock Exchange(s) where it tends to list its securities. iv. The existing shareholders of the company shall sell their shares through brokers of the exchanges upon listing. v. No existing shareholders of the company shall sell more then 50% of his existing shareholdings until the company holds the annual general meeting after completion of one full accounting year of the company upon listing with the exchanges. vi. The conditions stated clauses 4 and 5 are subject to the provision that the existing shareholders shall offer for sell at least 25% (twenty five percent) of the shareholdings in the Company within 30 (thirty )trading days from the date of commencing the normal trading, i.e., after the price of the listed share is discovered and fixed following the book building method as prescribed by SEC through Securities and Exchange Commission (Public Issue) Rules, 2006, to the extent those are applicable or relevant in these respect. vii. A. Allocation/Distribution: 10% (ten percent) of the said 25% shareholdings shall be allocated/distributed to the eligible institutional bidder following the procedures prescribed for determining price under the book building method, balance quantity shall be available for general investors through normal trading system of the stock exchanges. B. Lock-in: There shall be lock-in of 15 (fifteen) trading days from the first trading day on the security issued to the eligible institutional investors through book building method. C. Others: (i) The existing shareholders (i.e. sponsors/directors) shall be restricted from buying the company’s share until completed disposal of the targeted 25% shareholdings. (ii) The selling broker of the existing shareholders shall disclose through the stock exchanges the local number of shares sold everybody along with the cumulative quantity sold and the quantity of unsold shares until completion of sale of the said targeted 25% shareholdings. (iii) Normal trade for general investors begin two days after transfer of the shares allocated to the eligible institutional bidders is completed. viii. SEC decision shall be final on certain matter. Notwithstanding anything contained in these Regulations, in the event of any confusion or difference of opinion on any matter whatsoever, the decision of the SEC shall be final and binding on all concerned. The following declaration shall be made by the company in the Information Document, namely:“Declaration about Listing of Shares with the stock exchanges:
Applications have been made to the Dhaka and Chittagong Stock Exchanges for permission of the shares of the Company for dealing in the said Stock Exchanges and for the quotation of the stock exchanges. After fulfillment of all requirements by the Company, the Exchanges shall list the Company’s shares within three weeks from the date of Publication of the Information Document, as mentioned in regulation 4, under intimation to the Commission, provided there is no contrary opinion of the Commission in this respect. In case of failure to fulfill the requirements by the Company, the Exchanges shall reject the application for listing showing reasons thereof, under intimation to the Securities and Exchange Commission within 60 (sixty) days from the date of application.”

1

viii) The institutional bidders will be allotted security on pro-rata basis at the weighted average price of the bids (within the cut off price) that would be clear the total number of securities being issued to them. 2006. iv) No institutional investors shall be allowed to quote for more than 10 %( ten percent) of the total security offered for sale through book building method. iii) If institutional quota is not cleared at 20% (twenty percent) below indicative price. Procedures to be followed for determining price under book building method i) The indicative price which has been determined by the issuer in association with issue manager and eligible institutional investors shall be the basis for formal price building with an upward and downward band of 20% (twenty percent) of indicative price within which eligible institutional investors shall bid for the allocated amount of security.00 only as follows:SI No 1 2 3 4 5 6 7 Offered by Standard Bank Ltd Continental Insurance Ltd Swadesh Investment Management Ltd Bangladesh Finance & Investment Company Ltd SAR Securities Ltd. in consultation with the issue Manager and price offer from the eligible institutional investors through proper disclosure. ii) Eligible institutional investors bidding shall commence after getting consent from the commission for this purpose. 50% (fifty percent) of bid money deposited by them shall be forfeited by the commission. at Tk 162. vi) The bidding will be handled through the uniform and integrated automated system of the stock exchanges. 3.2.(16)(4)(c) of the Securities And Exchange Commission (Public Issue) Rules. presentation. the issue will be considered cancelled unless the floor price is further lowered within the face value of security. Indicative Price for Book Building Purpose Based on Indicative Price Offers received from seven Institutional Investors from amongst four groups of institutional investors referred in rule 8. x) In case of failure to deposit remaining amount that is required to be paid by institutional bidders for settlement of the security to be issued in their favor. The securities earmarked for the bidder who defaulted in making payment shall be added to the investor quota. ix) Institutional bidders shall deposit their bid with 20% (twenty percent) of the amount of bid in advance to the designated bank account and the rest amount to settle the dues against security to be issued to them shall be deposited within 2 (two) working days prior to the date of opening normal trade for general investors. vii) The volume and value of bid at different prices will be displayed on the monitor of the said system without identifying the bidder. etc. document. subject to maximum of 5 (five) bids. B & B Enterprise Ltd Royal Capital Limited Average Category Financial Institution Insurance company Merchant Banker Non Banking Financial Institution Stock-Dealer (DSE) Stock-Dealer (DSE) Stock-Dealer (CSE) Indicative Price 165 167 160 155 160 165 165 162 2 .B. Provided that. the issuer’s chance to lower the price shall not be more than once. v) Institutional bidding period will be 3 to 5 (three to five) working days which may be changed with the approval of the commission. the Indicative Price for Book Building Purpose is fixed.

It has been successfully supplying reliable power to the national grid since 1998 without any interruption for a single day. satisfactory profitability. sound debt repayment background. Safety is almost risk free like Government short-term obligations. Net Asset Value Per Share(NAVPS) based on financial statements for the year ended 31 December 2009 C. government guarantee against power purchase.865.1 Earnings per share (EPS) A. KPCL plant has also been recognized by the third party inspectors.1x B.2 Average Market P/E of the sector B. Earnings Based Value per share (EBVPS) based on projected financial statement for the year ended 31 December 2010 to 2014 B. surveyors and specialists as the best maintained fuel oil operated power plant. Risk factors are modest and may vary slightly from time to time because of economic conditions. off-taker of KPCL. acknowledges KPCL as the best available and the most reliable power plant for its excellent track record in operation. Qualitative factors: Rationales for fixing indicative price of KPCL A) CRISL has assigned “AA” (pronounced as double A ) rating in the Long Term and “ST-1” rating in the Short Term to Khulna Power Company Ltd.77 * In equivalent face value These companies’ stock prices are greater than their issue prices and face value.53 Average 147. based on financials and other relevant quantitative and qualitative information. Short-term liquidity including internal fund generation is very strong and access to alternative sources of fund is outstanding.106 208. This level of rating indicates a corporate entity with sound credit profile and without significant problems. Market Value Of similar share under Power industry: Company Name Dhaka Electricity Supply Company Ltd Summit Power Limited Face Value (BDT) 10* 10* Six Month Avg. Bangladesh Power Development Board (BPDB). high quality plant.The Indicative Price for Book Building Purpose is justified on the basis of the following qualitative and quantitative factors:A. Most of the companies are operating in their full capacity and they are consistent in their operating performance and market dominance.2) D. government supportive policies for power sector etc.593. B) 3 .2) 6. The above ratings have been done on the basis of its good fundamentals such as sound equity based capital structure. offer higher safety and have high credit quality.46* 3.2 Average Market P/E of the sector A. Price (BDT) 166. The plant availability has always been near to 100%. Earnings Based Value per share (EBVPS) based on financial statement for the year ended 31 December 2009 A.1x A.2 Number of Shares C.314.1 Net Asset Value C.1 Earnings per share (EPS) B.3 Earnings Based Value Per Share (B.79 30 83. Entities rated in this category are adjudged to be of high quality.7 B.3 Net Asset Value Per Share (NAVPS) (C.000 18.62 30 198.08* 129. The strongest reasons are the earning potential of the companies.2) 2. insignificant market risk on demand.3 Earnings Based Value Per Share (A.6 C. The short term rating indicates highest certainly of timely payment.1/C.

the extension of current PPA with BPDB shall take place as a natural consequence. Bangladesh will not be able to meet the increasing demand for power. Currently maximum generation capacity of all public and private power plants together is about 4. Conversion into natural gas will enable the company to earn more revenue as compared to running on furnace oil. the future power plants will be built based on liquid fuel operation. shall be most viable commercially. Finland. the demand and supply gap is 1. In consideration of current generation capacity.C) KPCL never compromises with the quality of operation. Even in the year 2013 many of the BPDB old plants shall retire and many will face shut down or capacity reduction owing to gas shortage iv) v) Therefore. since the gas tariff structure as fixed by BPDB is more attractive than furnace oil based tariff structure. the least cost liquid fuel. the extension of the term of KPCL plant is the imperative for the BPDB to meet the shortage of power. Considering of the increasing demand of power and the 4 . the Govt. for the operation and maintenance of KPCL plant. a world renowned equipment manufacture (also the manufacturer of KPCL plant). The existing shortage in generation capacity of the country shall continue to exist much beyond the year 2013. As a result.3 of PPA has a clear provision that the project is renewable for a further period. There are only few power plants in that region and as such KPCL is required to meet major portion of the demand of that region. available for 365 days of the year and with its 19 generating units. has already adopted a policy to use liquid fuel for generation of electricity. safety of plant and personnel and in that consideration. Therefore. Therefore. KPCL has no system loss or no bad or doubtful debt. Accordingly. J) KPCL’s long eleven years of experience in running liquid fuel power plant and proven record of operation will help KPCL management to run the expansion unit more efficiently and diligently and to achieve more optimization and economy of operation which will contribute to the enhancement of KPCL’s earning. the utilization of the entire capacity of KPCL plant through out the year is almost certain.000 MW.700 MW.700 MW and it will be widen further as a result of the general increase of demand. There is a demand supply gap of 1. also together with the future planning for generation of additional capacity. Extension for another term of the project and Expansion of the capacity for additional 100 MW (+/. E) The strategic location of the KPCL plant at the south-eastern region is an added advantage for KPCL. F) The useful life of KPCL plant is 30 years. G) BPDB is the only buyer of KPCL and thus the revenues are 100% realizable. KPCL plant operation has been certified by Bureau Veritas (BV) on : • Quality Management System (QMS) with ISO 9001 – 2008 • Environmental Management System (EMS) with ISO 14001 – 2007 • Occupational Health and Safety Administration System (OHSAS) 18001 – 2007 D) KPCL plant engines are having the dual fired capability i. subject to agreement in writing by the parties at the latest twelve months prior to the expiry. no further capital investment will be required for the existing plant to carry out another extended term. ii) The KPCL plant is most reliable and efficient plant in the BPDB grid. maintenance. Natural gas is being used in 85% of total generation and due to short supply. Unlike DESCO or DESA. Taking the above into consideration. engaged Wartsila. At present. There will be no further fixed operating expenditure except the variables for the additional unit as the same will be run by the same management and production team. Therefore. Therefore. the natural gas based power plants are in deep crisis.e it can be converted into natural gas whenever gas will be available at the south-eastern region.10 MW): Rationale: i) The Article 2. the power sector will continue to rule as top most demanding and dominating sector in the economy and no other sectors enjoys such a high demand profile. iii) For dwindling natural gas production in the country. when the tenure of the current PPA expires. No further land will be required and the engines are likely to be more efficient for improved technology over the years. KPCL’s revenue earnings and its further growth and future potential is highly certain beyond any doubt. H) In the context of Bangladesh economy.300 MW but country’s peak demand is about 6. the demand for power or the demand of power sector is thriving and insatiable. it is the most flexible and capable to meet BPDB’s ever varying load demand. KPCL plants runs on Furnace Oil. I) The proposed expansion of KPCL plant will enhance the KPCL earnings almost three times higher than the existing one. a few of the existing plants running on gas may face shut down in the near future.

4. in 1998 when KPCL plant was connected to the national grid. Yours faithfully. To The Secretary Dhaka Stock Exchange Limited Dhaka Dear Sir. so the indicative price is just and fair.000 MW and over the last 11 years it has gone up to 1. Sd/Managing Director To The board of directors Chittagong Stock Exchange Limited Chittagong 5 .700 MW. further worsening in future due to gradual increase of demand of the power and the short supply of natural gas. it is optimistic to expect that KPCL will perform better than its Competitors and Peer companies.362 MW in 2015. UNDERTAKING We undertake. 3. to abide by the Listing Regulations of the Dhaka/Chittagong Stock Exchange Limited which presently are. KPCL plant is among the two plants that are running on liquid fuel and thus proposed for expansion which is in process. In view of the above mentioned existing shortage. Most interestingly. Energy sector companies are strong player with huge operating profit and its shareholders have taken the benefit of direct listing from the gain of offloading of shares. at any time to suspend or remove the said shares or securities for any reason which the Exchange considers sufficient in public interest. The company has opened an Escrow account with BRAC Bank Limited “Khulna Power EII Escrow Account” No. for the reasons stated above the Govt. greater liquidity and technological soundness make these companies better player in the stock market. 3. In order to minimize the shortage of power.’s future planning for addition of new generation. So. 3. the demand supply gap was about 1.govt.259 MW in 2013. initiatives are being taken by the Govt. and That our company and /or the security may be de-listed by the Exchange in the event of noncompliance and breach of the Regulations and/or of this undertaking after giving an opportunity of being heard to us. strong fundamental position. of Bangladesh is strongly considering the expansion of KPCL plant capacity by another 100 MW (+/.10 MW). That such provisions in the Articles of Association of our company or in any declaration or basis relating to any security as are or otherwise not deemed by the Exchange to be in conformity with the Listing Regulations of the Exchange shall. be amended to supersede the Articles of Association of our company or the declaration or basis relating to any security.648 MW in 2011.799 MW in 2014 and 4. to welcome private sectors to set up more power plants. Considering the average value and the fact that the company is renowned “Electricity generating company” having well known client’s base and brand image. Superior asset management and earning potential. or hereinafter may be in force. That the Exchange shall have the right. 1501100976943002 for collecting bid money from the eligible institutional bidders under Book Building Method.132 MW in 2012. KPCL is currently in negotiation with BPDB for its expansion for additional capacity of 100 MW (+/-10 MW). the Govt. KPCL is a peer company of these companies which also has a sound financial background and operational efficiency. upon being called upon by the Exchange. has decided to offer the expansion of the capacity of existing power plants which are running on liquid fuel. Therefore. That the Exchange shall not be bound by our request to remove the shares or securities from the ready Quotation List and /or the Cleared List. yet the demand supply gap will be increasing like 2. unconditionally. We further undertake: That our shares and securities shall be quoted on the Ready Quotation List and /or the Cleared List at the discretion of the Exchange.

possibilities of entering new power companies wouldn’t create any industry risk for the company. KPCL doesn’t have such risk. investors should be aware that there are some risks associated with an investment in the Company. is acceptable to BPDB under pass through payment process. Unfavorable volatility or currency fluctuation may affect the profitability of the company. Management Perception: The Company is operated by the plant manufacturer. distribution. b) Exchange Rate Risk: KPCL imports mostly fuel against payment of foreign currency. But the Company has solid revenue source and is highly profitable. Management Perception: Currently. The rate for the financial charges are fixed so. a) Interest Rate Risk: Interest/financial charge are paid against any kind of borrowed fund/ preference shares. demand & supply and distribution is fully under the control of Government. The investors should carefully consider the following risks in addition to the information contained in the prospectus for evaluating the offer and taking decision whether to invest in shares of the company. that is policies related to electricity price fixation. Power companies mainly supply electricity to national power distributors to supply electricity. rules and regulation framed by government. e) Potential or existing Government regulation: The business activities of KPCL is fully controlled by policies. c) Industry Risk: The supply of electricity and alternative energy is not adequate than the demand of it. 6 . Rising of interest rate increases the cost of borrowed fund and consequently it may impact on the profitability.B. Wärtsilä is technologically advanced enough to keep KPCL plant out of such risk. transmission. RISK FACTORS AND MANAGEMENT PERCEPTION ABOUT RISK: As with all investments. Instability in money market and increased requirement for fund may put pressure on interest rate structure. KPCL has working capital debt obligation from several banks and preference shares which are comprised with fixed financial charges. d) Market and technology related Risk: Technology is related to generation. the leading power plant manufacturer and plant operator in the world. So. quantity measuring and maintaining of required electricity generation. Management Perception: KPCL supplies electricity to BPDB in the south-western region of Bangladesh and it’s a dedicated power plant with a guaranteed payment from BPDB and GoB under the PPA. Wärtsilä. KPCL executes favorable and competitive foreign exchange rate from its bankers against its L/C payments. For that reason organizations engaged in generating electricity can’t provide all required amount of electricity. government policies in this regard may impact business operation of KPCL. Moreover. Management Perception: KPCL is fully aware of the risk related to currency fluctuation but practically doesn’t possess any foreign exchange risk as 99% of the Other Monthly Tariff (OMT)is convertible and fuel is being imported through L/C and the exchange rate Sonali Bank Ltd. So.

natural calamities etc: The performance of the company may be affected due to unavoidable circumstances in Bangladesh. the government is expected to continue with the same policy level support for the sector. Dispute with any one operator may lead to adverse repercussions throughout the industry. no major dispute with the government is envisaged. The routine & proper maintenance of the distribution network undertaken by BPDB reduces major disruption due to natural calamities. Political unrest leading to strikes. hortals etc. Moreover. the risk due to natural calamities & political unrest is minimized. the huge shortage of power in the country minimizes the chances of terminating the PPA agreement that mitigates related risks. Additionally. KPCL wants to install additional 7 generation units with the capacity of 15 MW each to generate total 100 MW. But severe natural calamities. g) Operational Risk: Risk associated with limited tenure of the present Power Purchase Agreement: The tenure of the present PPA between the Company and BPDB is limited to 15 (fifteen) years from the date of commercial operation i. With the existing deficit in power generation capacity. war. Thus. power generation is one of the priority sectors of the government. and Earthquake may hamper normal performance of power generation. Therefore. Moreover. KPCL will get compensation under the agreement from BPDB or GoB. But electricity service being considered a daily necessity & in consideration of its use by all irrespective of their political thoughts is always kept out of obstructions. as such political turmoil. f) Potential changes in the global or national policies. Management Perception: On the backdrop of development need for the economy. terrorism.Management Perception: The Power Purchase Agreement with BPDB safeguards KPCL from any changes in government regulation. Yet the company is well prepared for adoption of policies and preventive measures as and when required to reduce the risk. The strategy is to generate and produce more electricity by using fewer big engines with higher fuel efficiency. The PPA agreement is valid for 15 years till 2013 and can be extended upon the consent of both parties. Energy and Mineral Resources is considered to be Government guarantee to protect the Company from single party risk exposure. Risk associated with single party exposure: The BPDB is the single buyer who purchases total electricity generated by the Company. all such above risks are covered under the insurance agreement with CODAN Marine (a subsidiary of RSA Group) to compensate the damages due to such uncertainties in extreme cases. 2013. There is a provision in the PPA for enhancement of the project life. 7 . certainly plays negative impact in any business. Tide. political unrest in the country may adversely affect the economy in general. natural disasters like Cyclone. As such. which sometimes are unpredictable and unforeseen. have the potential to disrupt normal operations of KPCL. Moreover. Management Perception: The risk due to changes in global or national policies is beyond control for any company. The Company’s ability to service its both existing and future financial obligations rest on the BPDB’s ability to meet the tariff payments under the PPA. Management Perception: KPCL is out of the single party risk exposure as it is guaranteed by BPDB for the payment in case the plant runs lower than 50%. till 13th October. the Implementation Agreement signed by the Government through Ministry of Power. L/C issued by BPDB for two months’ minimum guaranteed payment. in case of PPA termination. Furthermore. BPDB and KPCL have been considering to expand the capacity of the Berge Mounted Power Plant utilizing the area of its leasehold property.e. But with prudent rehabilitation schemes and the very effective and quick repair and maintenance lessened the damages caused by such disasters.

Any disruption in supply flow of spares parts will put an adverse impact on power generation. the company has prudent insurance coverage with CODAN Marine which covers all risks package including Machinery Breakdown. Sabotage and Terrorism. Risk associated with supply of raw materials: The main raw material for generating electricity is Heavy Fuel Oil (HFO). . Management Perception: Kuo Oil Pte Ltd. Risk associated with payment: There is an impending risk in the case of delayed payment from BPDB.Risk associated with tariff of electricity: The BPDB is the single buyer who purchases total electricity generated by the Company. hence possibly mitigating risk of any non-payments. GoB through the Implementation Agreement provides sovereign guarantee with regard to payments. BPDB may stop making payments to KPCL resulting into non-payment to its lenders. Tariff for each year is adjusted and indexed from time to time in accordance with the PPA and the said Reference Tariff is used to calculate the Tariff in Effect for any Billing Month during the Term of the Agreement. Management Perception: In this case no risk is associated as BPDB and the Company have predetermined and contracted the terms and condition regarding the tariff of electricity. Additionally. internal conflict among the workers and engineers may also disrupt operation. Management Perception: Under the Operations & Maintenance Contract with Wartsila. Management Perception: KPCL is getting the payment regularly from BPDB. In case of any dispute with BPDB or failure to comply with certain rules and regulations. As per the PPA with BPDB. there is a penalty clause and BPDB needs to ensure minimum guaranteed payment supported by Letter of Credit. Risk associated with supply of spare parts: The power plants are dependent on timely supply of spare parts for smooth operation purpose. Wärtsilä also maintains sufficient spares parts inventory for smooth operation of KPCL plants. Moreover. Business Interruption. Singapore has been supplying Heavy Fuel Oil (HFO) to the Company through United Summit Coastal Oil Limited and the risk of price fluctuation in the global oil market is automatically done by the very FT structure which is based on fuel cost as a pass through item. the Company has signed a Spare Parts Support Agreement (SPSA). In addition. Any interruption of supplies of the fuel to the power plants will hamper the generation of electricity. In addition. the only product of the Company. Risk associated with systems failure and sabotage: System failure may take place resulting into damages for KPCL. Third Party Liability. In these circumstances usually it is the buyer who may determine the tariff value of the electricity generated by the Company. Additionally. 8 . KPCL maintains safety spare parts stock of US$ 2 million. KPCL can source HFO from other sources if Kuo Oil is unable to supply. any equipment and mechanical support will be provided for in case the plant needs to be converted from a fuel based to a gas based plant. Sometimes. there are delays in payment but that is mainly due to administrative reasons. Till date. expressed under two slabs – Other Monthly Tariff (OMT) and Fuel Tariff (FT) where OMT is based on delivered MWh and FT is pass through. Management Perception: There is an agreement with the O & M Contractor and equipment supplier to provide maintenance and equipment support. Moreover. no payment has been defaulted.

and occurs without the faults or negligence. At regular intervals. DOE officials inspect regularly and monitor environmental performance of the plant and till date no non-conformity reported. In case of Political Force Majeure event or change in law. the BPDB will only pay capacity components and energy components to the Company. and is monitored for compliance. Exhaust gas emission is monitored by stack testing annually.2008 • Environmental Management System (EMS) with ISO 14001-2007 • Occupational Health and Safety Administration System (OHSAS) 18001 . compiling all the test and measurement results are submitted to Department of Environment (DOE). Management Perception: The Operations and Maintenance (O&M) contractor of KPCL plant. to the extent that the unit is available and the Government of Bangladesh will pay required amount to cover the capacity component up to 50%. basin water quality and sanitary discharge tested on monthly basis and ambient noise level is measured on monthly basis. k) Risk of “Operation and Maintenance Agreement” by “Wartsila” There is a risk of on non-continuation of “Operation and Maintenance Agreement” (“O&M Agreement) by “Wartsila” Management Perception: In case of discontinuation of the O&M agreement with Wartsila. Moreover.2007 The EMS Manual covers all the elements that are required to be monitored for compliance of ISO 14001 and local Department of Environmental Guidelines. Quarterly reports. plant operation does not pose any hazard to the environment of the plant area and its surroundings. Management Perception: If the Company is affected by a Force Majeure event after commencement of commercial operation. which reduce the nonoperating risk. the existing personnel of the Wartsila can be retained too by KPCL if required. If BPDB is affected by a Force Majeure event after commercial operation. Overall. KPCL shall take over the O&M under own management since Summit and United group have been operating & maintaining their own power plants over 300 MW capacity by themselves. 9 . and elaborate reports are submitted to DOE every year.h) Force Majeure: Force Majeure events are circumstances in which a delay in the performance of any obligation under the PPA is beyond the reasonable control. efficient management and continuous monitoring systems. Similarly. independent auditors or Bureau Veritas carry out surveillance audit to assess the compliance with the EMS of ISO 14001-2007 but so far no non-conformity noted. Management Perception: To overcome these uncertainties. of the parties concerned. Wärtsilä Bangladesh Ltd. For each and every fuel oil delivery and handling. financial loss due to unavailability of the plant after a Force Majeure event will be mitigated by the Company’s insurance policy. Plant operation is certified by Bureau Veritas (BV) on: • Quality Management System (QMS) with ISO 9001 . However. the BPDB will pay the Company. j) Non-Operating history There is no history of non-operation in the case of KPCL. i) Risk associated with environmental pollution: KPCL plant operation may cause air and water pollution which may affect the ecological balance and living condition and health of the people around the plant. it will pay the Company its debt servicing costs less insurance proceeds and / or any available capacity component and energy component received by the company during the Force Majeure period. to the extent that the unit is available. Khulna Plant (WBD-KP) is responsible for environmental management of the project. containment boom is used to minimize the risk of accidental spillage and pollution. the Company has its own extra Engine and fuel backup. ambient air quality by passive sampling method continuously. Under the EMS.

The electrical demand had been consistently higher than available capacity. These two barge-mounted plants were connected to the national grid. less efficient. identified as industrial growth Centres by the Government of Bangladesh.10 million) It is the first independent 110MW barge-mounted power plant that commenced operation in October 1998 under a 15 year PPA from the government (expiry 2013). The barges. shipped as deck cargo on a submersible dry tow ship.93 million (US$ 44. The plant has already changed the economy of the adjacent region directly and positively. the infrastructure to supply electricity to the economy has not kept pace with this growth. The demand supply imbalance has now become a major bottleneck to economic growth. In addition. It has provided employment to over 110 people from the surrounding areas and many of the jobs are technical and managerial in nature. barges.) Ltd. Reliability of electricity supply. transportation services. KPCL project was initially financed by the IFC and the sponsors’ equity with a debt-to-equity ratio of 54:46. KPCL plant was designed to alleviate the severe power shortages in the Khulna and adjacent areas. lowavailability fuel. Significant numbers of jobs have been created at the fuel terminal. is a public limited company which was incorporated as a private limited company in Bangladesh on October 15. The plant consumes about 600 MT of Heavy Fuel Oil daily to generate 110 MW power by the 19 generators on the two barges located in Khalishpur. Description Khulna Power Company Ltd. KPCL shareholders were Coastal Power Company (later Coastal was merged with El Paso Corporation. USA) through its direct wholly-owned subsidiary El Paso Khulna Power ApS. 10 . BPDB signed a Power Purchase Agreement with Khulna Power Company Ltd. The total initial project cost was USD 96.C. Khulna. the plant has contributed significant funds toward social causes in the region. restaurants. whereas available generation is about 4200-4500 MW. The plant conformed to all applicable environmental standards. to help ease the electricity shortage. for a 110 MW floating base load power plant at Khulna. New industrial and commercial establishments have been opened to take advantage of the stable and reliable power. The plant came into operation in October 1998. and other ancillary businesses created to serve the needs of the plant. DESCRIPTION OF THE BUSINESS: Information about the Company Background In 1997 the Bangladesh Power Development Board (BPDB) was faced with the challenge to ease a critically short power supply in the South Western Zone of Bangladesh. When established. In October 1997. (Bangladesh). and high-cost plants in the region. and existing establishments do not require backup generators. Its paid up capital is BDT 2085. Summit Industrial & Mercantile Corporation (Pvt. and generation costs in the area had been very high due to the low efficiency of existing equipment and the heavy use of expensive. The facility displaced the generating capacity of the older. As Bangladesh has enjoyed steady growth in recent years.07 million The principal activity of KPCL is to own and operate barge mounted power plants in Khulna and supply electricity to the national grid of Bangladesh. Peak demand is about 5500-6000 MW. which has been a growing problem over the years. The project was the first IPP implemented under the then new Government of Bangladesh guidelines for private power projects. (Bangladesh) and Wärtsilä Development and Financial Services (Asia) Ltd. The Khulna power project is a fast-track response to the power shortage. has now reached crisis proportions. while improving the overall reliability of the country's power supply. are moored in a closed basin. United Enterprises & Co Ltd. Nine engines generators are mounted on one barge and ten on the other. 1997. Each barge is approximately 91 meters long and 24 meters wide. Now only local shareholders hold 100% ownership of the company.

This is an environmental review category B project. With the area of its leasehold property. KPCL is now discussing the next expansion plan of the company with BPDB which the management wants to finalize within one year. this is backed by other consultants support as and when needed. The company has shown stable performance with steady sales as in any typical utility companies. the state oil company. The operational process has been developed by an expert team. employee health and safety programs. site contamination from past activities. The experience gathered by the management during the implementation of initial 110 MW project will be applied for formulating new strategy in tariff determination and operation of the future projects. and impact management and monitoring. KPCL has prepared an environmental assessment for the project to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. oil transportation safety and spill potential. Management team is professional and has a successful track record and possesses requisite expertise to run the operations. 11 . Accordingly the BPDB and KPCL have been considering the agreements to expand the capacity of its Berge Mounted Power Plant to land based power plant. a globally recognized power plant manufacturer and operator. liquid effluents. The expansion plan will be for 22 years effective from Commercial Operation Date.06/kWh during the January – December 2009 period. A team of skilled technical people are engaged in the operations of the plant. For any technical assistance. Expansion plan During establishment of the company.51/kWh during the January – December 2008 period.The plant is managed by the O&M operator – Wärtsilä. vacant property owned by PADMA. air emissions and noise from construction and plant operation. the project concept envisaged expansion. The company has received power a tariff of BDT 8. No resettlement of residents or economic displacement was required. whereas it received a tariff of BDT 10. KPCL financials is audited by Rahman Rahman Huq. social impacts. The differences between the period was due to tariff slabs variation of cost of fuel and foreign currency rate. the equipment suppliers extend their support. The project is located on an uninhabited. fire prevention and emergency response. Environmental and social issues associated with the project include: site selection and land use. KPCL wants to install additional 110 MW capacities with power generating engines. a member of KPMG. The strategy is to generate and produce more electricity by using fewer engines. liquid and solid waste disposal. maintenance and better return of the expansion project. The proposed site for the project was identified by BPDB in their RFP for the project. Accordingly management took the strategy of negotiating with BPDB for the revised Power Purchase Agreement (PPA) and other project documents for easy operation.

085.000. 1.000. Ltd.930.100. United Enterprises & Co.00 (Ordinary Shares) Tk. Dhaka-1215 : Goalpara. 18 Karwan Bazar. (KPCL) : Summit Centre (5th Floor).9832% 0. : Bangladesh Power Development Board : Wärtsilä NSD OY. Finland : KPCL has 10 and plant has 113 engaged by Wärtsilä O&M operator : 110 MW : 43.) Ltd. Ltd. Khalishpur.0336% Annual General Meeting held in last 5 years: Year 2004 (7th) 2005(8th) 2006(9th) 2007(10th) 2008(11 ) th Date of AGM held 3 May 2005 11 September 2006 24 July 2007 21 June 2008 23 June 2009 Declared dividend 7% Cash Nil Nil 57.53% Cash 10% Cash 12 . Khulna : Tk.00 (Preference Shares) : Summit Industrial and Mercantile Corporation (Pvt.000. 2.5 % : 19 x Wärtsilä 18V32LN : 13th October 1998 49.) Ltd. United Enterprises & Co. Others Company At A Glance Company Name Registered Address Plant Address Paid Up Capital Sponsors Unique Client EPC Contractor Number of Employees Total electric output Electrical efficiency Engine type Year of Starting Operation : Khulna Power Company Ltd.Ownership The ownership structure of KPCL is as follows: Summit Industrial and Mercantile Corporation (Pvt.9832% 49.

Ltd. 13 . But changes were made in the Ownership Structure as El Paso Corporation. (3) Name of associates. for sale of shares in the company per terms of the shareholders' agreement allows existing shareholders first right of refusal and therefore local shareholders – Summit Industrial & Mercantile Corporation (Pvt. However.) Ltd. and United Enterprises & Co. However.1% by Wärtsilä. and one of the largest Hospitals and a private University.. and 6. Ltd.) Ltd. Ltd. (“Summit”) and United Enterprises & Co. Summit and United jointly acquired El Paso shareholding and later Wärtsilä’s share was also acquired by Summit and United.9% ownership by El Paso Energy. joined the consortium in August 1998.9% in KPCL for sale. Pakistan. United has ownership in Bangladesh’s largest private liquid product bulk storage terminal. Philippines). It is also an investor in six Rural Electrification Board (“BPDB”) small power projects. offered its stake of 73.9% stake in KPCL. contribution of more than 10% by any other product to the total revenue of the company doesn’t arise. Wärtsilä is a leading manufacturer of medium speed diesel engines and had successfully developed similar power projects at several locations worldwide. So. and United Enterprises & Co.9% interest. (2) The relative contribution to sales and income of each product or service that accounts for more than 10% of the company’s total revenues: Electricity is the only product of KPCL. El Paso is one of the world’s largest and most diversified natural gas exploration and pipeline companies with an enterprise value in excess of $50 billion. gas pipeline construction on a build-transfer basis. real estates. as part of its global repositioning strategy.(1) Principal Product or Service of the Company: KPCL is engaged in business of generation of electricity and sells the same in bulk to BPDB through its national transmission grid and BPDB distributes the energy in the south-western region of Bangladesh. It has implemented several BPDB small power projects. Consequently. Indonesia. namely – Summit Industrial and Mercantile Corporation (Pvt. the subsidiary/related holding company however there are common directorship in the following related companies: Sponsors KPCL is now fully owned by the local entrepreneur group. The local Shareholders are Summit Industrial and Mercantile Corporation (Pvt. with 73. a wholly owned subsidiary of The Coastal Corporation (“Coastal”). and real estate construction. (KPCL) has no associates. Coastal Power Company. Coastal and El Paso Energy Corporation merged in January 2001 to form El Paso Corporation (“El Paso”). Ltd. the subsidiary/related holding company and their core areas of business: Khulna Power Company Ltd. and has worked very closely with Summit. (“United”). 10% by Summit Industrial and Mercantile Corporation (Pvt.) Ltd. the Khulna Power Project was originally developed by a consortium led by Wärtsilä Corporation (“Wärtsilä”) with which BPDB signed a Power Purchase Agreement (“PPA”). 2008. Summit and United have contributed a combined 20% of the Project’s equity. El Paso was responsible for the management of the Plant up to April. 10% by United Enterprises & Co. As the major equity holder in KPCL with 73. Thereafter. liquid fuel shipping. Reportedly CDC Globeleq has principally agreed to purchase El Paso's interests in Asia on a portfolio basis (Bangladesh..) Ltd. Summit is an investment group with significant holdings in liquid fuel storage terminals. have expressed interest to purchase El Paso's 73. The sponsors have invested total equity capital of US$ 44 million. at the offered price of CDC Globeleq.

It has its own worldwide service network in 80 countries. scheduled and condition-based maintenance. El Paso Energy International pursues a low risk. as a project developer. as well as liquefied natural gas transport and receiving. North America and all other continents. Most of its IPP deliveries were directed to Asia. processing. such as nonO&M service in key ports. It is rich in assets and is fully integrated across in natural gas value chain and is committed to developing new supplies and technologies to deliver energy to communities around the world. It is a major provider of solutions for decentralized power generation and of supporting services. This strategy has helped the company build diversified project portfolios supported by fixed return contracts in countries around the world. 14 . and transmission of natural gas. power-oriented investment strategy. Wärtsilä enhances the business of its customers by providing them with complete lifecycle power solutions. The company has core businesses in production. It plans to expand the business by providing innovative.Background of Past Shareholders EL PASO El Paso. petroleum logistics. gathering. El Paso can export the broader skill set of the entire company to produce significant growth. and merchant energy services. WÄRTSILÄ Wärtsilä Corporation is the leading global ship power and power plant supplier. reliable and valuable service. Wärtsilä takes complete care of customers’ ship machinery and related equipment at every lifecycle stage. These portfolios present significant opportunities to build robust businesses in selected markets where the right combination of economic. power generation. North America’s leading provider of natural gas services was a 73. Wärtsilä plans to contribute to solving the global needs of sea transportation and power generation by developing equipment and services that convert fuels into power efficiently at the lowest possible environmental impact. regulatory and industry conditions exist.9% shareholder in KPCL. as well as operations and maintenance contracts. By focusing on regional business growth.

After the purchase the storage capacity of SUTT expanded from 17200 MT to 65100 MT. Subsequently the two terminals were sold off. the country's first and biggest private sector inland container depot in Chittagong. two of its holdings. SIMCL is one of the largest companies in Bangladesh with a significant interest in infrastructural development. • • • 15 . the SIMCL started to export Urea fertilizer becoming the largest fertilizer exporter in Bangladesh. It has power plants located in various parts of Bangladesh mainly in the suburban industrial areas where there is the greatest need for electricity. the oldest liquid Tanks Terminal depot in Chittagong Port area.) Limited Summit Industrial & Mercantile Corporation (Pvt. That same year SIMCL purchased BTT. The group sponsored the first independent 110 MW barge-mounted power plant KPCL in 1998. the company in addition to the import business started the export of Molasses from Bangladesh. Of these publicly listed companies Summit Power Limited (SPL) accounts for supplying a total of 215 MWs of electricity in Bangladesh. Khulna Power Company (KPCL) continues to flourish till date and is planning on expanding and also going public. Brief overview on Summit Group sister concerns are given in the following: Summit Industrial & Mercantile Corporation (Pvt.000 people. In 1997 the company took another leap in infrastructure development by establishing the first private sector electricity generation plant of 114 MW. tank terminal. petroleum. shipping. properties. three 11 MW power plants for BPDB. polishing and finishing plant. Summit Power Limited (DSE: SUMITPOWER) and Summit Alliance Port limited (DSE: SAPORTL) are publicly listed. SPL has grown over 600 % in the past 10 years resulting in increased efficiency and economies of scale. The group is recognized as a major infrastructure-industry company of Bangladesh employing over 1. in Chittagong port. In 1992. In 1991 SIMCL bought Van Omaren Tanks Terminal becoming the largest private terminal owner and operator in Bangladesh.) Limited (SIMCL) is a holding company established in 1985 sponsoring fourteen different companies. a private sector tank terminal. Brief history of the growth and development of SIMCL • • • SIMCL was incorporated as a private limited company in Bangladesh on 7th December 1985. renaming it to SUTTL. EPC contracting. SUTT further increased after the acquisition of VOTTL.Background of Present Shareholders Summit Industrial & Mercantile Corporation (PVT. They have also pioneered locally the first granite and marble cutting.) Limited – SUMMIT GROUP Summit Group is one of the reputed local conglomerates of the country having interests in power. The year 1989 marked SIMCL's first foray into infrastructure development with the establishment of Summit United Tanks Terminal (SUTT). Out of fourteen different companies. ranging from shipping to power. inland container depot. In 1988. which established SIMCL as the first owner in Bangladesh of a liquid storage tank terminal. trading and so on. which operated on furnace oil.

SIMCL’s financial position at the end of the accounting year as of 31st December 2009 was in a sound and stable position having a total of Taka 593. in conjunction with EL Paso USA and the United Group. OCL owns 15 acres of custom bonded free hold land. This project is yet another inference to the revolutionary nature of SIMCL investment portfolio. which is only 6 km from the country’s largest seaport.000 containers annually. The total turnover for the year was Taka 198 crores with a net profit of Taka178.Hobiganj gas pipe line construction work in Bangladesh In 2000 summit power limited (SPL) was established to set up ‘distributed power’ in Bangladesh. OCL and SAPL together deals with 15% of the country’s import cargo and 30% of the export cargos.) Limited a sister company of SIMCL and substantial share of the following companies: i) National Housing Finance & Investments Limited. in terms of energy development through the formation of USCOL. Chittagong Port. generating 215 MWs of electricity with natural gas as its fuel. In 2004. It also has an empty storage facility for 6. In its year of conception it bought two Ocean going tanker vessels and became the first ISO 9002 certified shipping company in Bangladesh.32 crores. the country’s first 110 MW Barge Mounted power Generation plant. the company set up SCL (Summit Communications Limited) to break into the telecommunication sector to provide much needed revitalization to the Bangladesh’s telecommunications. an energy oil company. Presently SPL has seven power plants providing electricity to 600. Summit Pipeco teamed up with Daquing a company based out of China to execute the EPC of 54 Km Ashuganj. It is located at Patenga Industrial Area of Chittagong on the international airport road. the year was rounded to a close. iii) Bangladesh Commerce Bank Limited • • • • In 2009.70 crores in total assets with a net worth of Taka 560. in association with the United Group. That year also led to the formation of USPCL. an LPG plant in Mongla. created with joint partnership between Summit and United Group. Improvement in the telecommunications sector is a move towards ingratiating Bangladesh into the larger global community. the company formed SAPL to expand its capacity and operations in the container terminal field. SAPL is also traded and publicly listed in the Dhaka Stock Exchange and Chittagong Stock Exchange. OCL can stuff and de-stuff 50. Ocean Containers Ltd.29 crores after tax.000 homes. In 1999 SIMCL partnered the United Group and Wartsila USA to form KPCL. Summit continued its extraordinary growth through the formation of Summit Pipeco Limited in partnership with the Alliance Group. The two companies are both located in Chittagong port and helps facilitate port services.• The year 1999 marked one of the highest rates of growth in the company’s history through the formation of various companies in partnership with other major companies and conglomerates both domestic and international. In 2006. they over 50 acres of freehold land and operates a streamlined modern container handling and empty storage facility with a capacity of 4000 tones.000 TEUs. a shipping company. Finally. The year 1999 also earmarks the establishment and development of USSL. Currently. Ocean Containers Limited (OCL) is a pioneer in the inland container depot and freight stations and is the largest privately owned land container port in Bangladesh. OCL is a custom bonded warehouse. the Summit acquired a Dhaka Stock Exchange membership (Membership # 146) in the name of Cosmopolitan Traders (Pvt. ii) IPDC of Bangladesh Ltd. With the logistic support of its surface transport subsidiary in Ocean Transport 16 .

The company currently operates a fleet of 24 prime movers with 40 feet trailers.. Danzas. The company is also planning to explore energy markets in Sri Lanka and Vietnam.00 MW 11. It is the first company in Bangladesh to have the ISO certification for Inland Container Depot (ICD) and container freight station (CFS) operators. OCL currently caters to the 30% of the garment’s export bound cargoes. liquid storage terminal. SPL’s power plants comprises as follows: i) Ashulia plant ii) Chandina plant iii) Madhabdi plantiv) Rupganj plant v) Jangalia plantvi) Maona plant vii) Ullapara plant 44. Presently SSL operates two tankers with a load capacity of 1. SSL has also implemented ISO 9002 Quality Management System (QMS) in 2001.00 MW 33.) Ltd (CTL) is a holding company involved in port related businesses such as container depot. edible oil and LPG from international market to Bangladesh.) Ltd (CTL) Cosmopolitan Traders (Pvt. This was the first ISO 9002 certified shipping company in Bangladesh. it can deliver containers anywhere in Bangladesh.Company.200 MT respectively. 17 . Summit Power Limited Summit Power Limited (SPL).800 MT and 1. Zim Line etc. Our fully computerized system allows us to keep track of all containers. SPL has so far successfully established seven power plants and is supplying total 215 MW of electricity to the national grid. Summit Shipping Ltd.50 MW 35. the company is striving to establish more power plants around the country. Cosmopolitan Traders (Pvt. Cosmopolitan Traders (Pvt. Kuhene & Nagel. OCL is in discussion with APL-NOL to have long term contract for consolidating their export bound cargoes from Bangladesh.75 MW 24. 1997 as a Private Limited Company.00 MW Considering the immense opportunities.30 MW 33 . is the major shareholder of the shipping company. Subsequent to its incorporation. shipping and other businesses. On June 7. Expansion plans of the company include procurement of ocean going tankers for transportation of furnace oil. Happag-Lloyd.00 MW 33.) Ltd. 2004 the Company was converted to Public Limited Company under the Companies Act 1994. Yang Ming Line. By the year 2004 OCL aims to consolidate 50% export bound cargoes of Bangladesh. (SSL) Summit Shipping Limited (SSL). SPL is the first company signing PPA with BPDB to build small size power project in private sector with the objective of providing electricity to PBS through national Grid. SPL’s shares are quoted on both DSE and CSE. SSL executed a 15-year ‘Transportation Agreement’ with United Summit Coastal Oil Limited (USCOL). a private limited company was incorporated in 2nd June 1998 to operate in transportation of liquid products. SPL was incorporated in Bangladesh on March 30. OCL already has similar arrangement with Maersk-Sealand. OCL clienteles include Maersk-Sealand. Government customs officers and OCL are working round the clock to keep our commitment. a concern of Summit Group is the first Bangladeshi Independent Power Producer (IPP) in Bangladesh and until now the only local company in private electricity generation and supply business providing power to national grid. OCL is an ISO 9001: 2000 Quality Management Certified Company. a sister concern of Summit Group. gas terminal.

The company strives to create professional website for businesses at affordable price. textile mills. The principal client of USCOL is Khulna Power Company Ltd. which requires furnace oil to fire its generators. own and operate basis. to generate the best quality work. Summit Alliance Port is currently spread over an area of 17 acres. USCOL actively participates in sourcing. USA. LTD – UNITED GROUP OF BANGLADESH United Group has grown into one of the leading business houses in Bangladesh since its inception in 1978. The key sectors where the group is currently engaged are power generation. The port has a 40. multi specialty hospital. to other power producers who require oil-based fuel for power generation. polymer industries. real estate developments. The focus is to make sure that the client’s business is SEEN! The web designs/pages are 100% originals and are designed to the highest standards. The excellence of work supported by the company is reflected in the client's satisfaction. (USCOL) United Summit Coastal Oil Ltd. land port services on a build. With extended experience and comprehensive knowledge. SUMCYNET SUMCYNET is an innovative Web Design and Software Development company. Since the beginning of the last decade the objectives of the group has been to participate and take up investment opportunities in selected key infrastructure sectors and enables it to meet the challenges of the new century. USCOL also actively markets its expertise to other barge mounted power plants operational in Bangladesh. heavy construction equipments division. The key sector in which it is engaged includes: Manufacturing Energy& Power generation Broadcasting and communications Port & Maritime transportation Textile mills Real Estate and Constriction Healthcare and Hospital Education 18 ..500 TEUs for storage of empty containers at any time. trading and supplying energy oil in Bangladesh. From its inception the group’s focus has been to invest in key infrastructure areas. striking and interactive updated website. United Group focuses in providing value added services and fostering business including provision of total solutions to an increasingly developing economy of Bangladesh. Everything at Sumcynet Web Design is done in-house.000 TEUs monthly and ICD with handling capacity of about 4. a joint venture between Summit. Located on both sides of the Beach road which is 7 km away from the multipurpose berths of the Chittagong port.United Summit Coastal Oil Ltd. turnkey solutions etc. This company was formed with the goal of managing the furnace oil requirements of the country’s emerging private sector power generation companies. Summit Alliance Port Ltd. experienced professionals. The company is composed of team of talented. United Group’s fundamental strength is its commitment and enthusiasm to provide an excellent service for customers. inspired by life. UNITED ENTERPRISES & CO. Leveraging on the expertise of a major integrated oil company El Paso International USA. The company ensures that clients receive personalized care round the clock. (USCOL).000 sft warehouse capable of handling CFS stuffing upto 1. passenger lift & escalators. Sumcynet believes to have a full understanding of its client's requirements and how to attend to them in the best way possible within their specific time frame. is the first private sector energy oil management company of Bangladesh. The customers are presented with top of the range. shared banking ATM network. international university. United and El Paso International. user-friendly. civil & hydro engineering.

a wide range of life saving antibiotics and other pharmaceutics are predominant in NOVO's product line. Malancha Holdings Ltd In January 2007 Malancha Holdings Ltd. was born out of the necessity for uninterrupted. this company allows its clients to concentrate only on their core business rather than worrying 19 . The company expanded its areas of business covering power generation. United Hospital Ltd United Hospital Ltd was born out of a vision to provide a complete and one-stop healthcare solution to the people of Bangladesh. gynaecology.United Enterprises & Company Limited United Enterprises & Co. was established in mid-July 1978. a glimpse at our cardiology department would reveal that till date we have conducted over 2300 open heart surgeries and over 8300 angiograms and angioplasty operations. cream & ointment (LCO) as well as Powder for Suspension (PFS). With a capacity to house over 450 patients and established across a total covered area of over 400. United Enterprises participated in various nation-building tasks of the GOB. As a matter of fact. the firm has been organized with modern sophisticated technology that is continuously upgraded and standardized to meet the highest level of international standards. a significant quantity of this is presently being used by a large number of local pharmaceutical companies on a daily basis. they are currently manufacturing very specialized pellets of PPIs. Ltd. Through rigorous research and development and thorough dedication. That’s over 12 heart related surgeries per day alone since our inception. quality power supply to the industries housed within the Export Processing Zones (EPZ) of Bangladesh. NOVO Healthcare & Pharma Ltd. orthopaedic and paediatrics of United Hospital are staffed by the most esteemed doctors in their respective fields. fully equipped quality control laboratories and state of the art production plants. Currently operating a 35 megawatt unit in Dhaka EPZ and a 44 megawatt unit in Chittagong EPZ. With its technology and expertise. United Hospital strives each day to be the number one healthcare provider. energetic and skilled professionals are working with a great sense of responsibility to ensure quality of all the products that leave through the factory gates. this hospital is one of the largest private sector healthcare facilities in Bangladesh. maritime transportation and freights and the turnkey solutions and system management. This alone is a testament to how the company has heralded a new era in the Bangladesh Pharmaceutical sector with its ever-evolving portfolio of powerful and precisiontuned pharmaceutical products that help people to live healthier lives. Hematinics. capsules. Departments of cardiology. Utilizing quality ingredients in our manufacturing processes. the hospital has 11 state of the art operation theatres to cater to the needs of our varied patient base. sub-stations. started its journey in 2004 and has since gone on to become one of the most trusted brands by doctors across the various fields of medical practice. liquid.000 sft. NOVO has been successfully manufacturing bulk drugs (RTF Pellets) since its inception. not only within Bangladesh but within the Asia-Pacific region. With its cutting edge technology. young. broadcasting and telecommunications. NOVO's concern for quality is reflected in every aspect of its products – from raw materials to packaging materials. it is the first company in Bangladesh which has been approved by the Drugs Authority (DA) for producing such bulk pellets. Keeping in line with the norm at United Group. Along with various commonly acceptable dosage forms like tablets. NOVO Healthcare & Pharma Ltd. and with the support of very friendly staff. NOVO is also a pioneering company among the other key players in the field of pharmaceutics. In the analytical and the micro biological laboratories. Opening its doors in August 2006 and situated besides the picturesque Gulshan Lake. etc. In fact we are one of the few companies in Bangladesh who have received the World Health Organization (WHO) certification for Current Good Manufacturing Practices from the Drug Directorate. As a matter of fact. As an example.

Having such a campus was thus an absolute necessity. It was surprising that even after a decade of operations. has managed to make its mark as a maker of high quality cotton. polyester and mixed yarns. secure in their knowledge that they reside in one of the finest of localities in the capital. In effect. UIU believes that only by providing the right environment could the desired results it achieved. With an excellent library. we have no plans of stopping now. the factory is nestled in the heart of Burichong.73 megawatts of electricity each. Textile Engineering. Neptune Land Development Ltd.000 functioning spindles being complimented by other high-end European machineries producing roughly 14 tons of yarn a day. Even now the faculty is engaged in designing new disciplines that are relevant for the Bangladesh economic context. a lake beside which to sit and while an evening away. In a country where the textiles industry is one of the major contributors to the GDP and indeed one of the largest earners of foreign exchange. Imagine wide open fields echoing with children’s laughter. it was projected to go under a progressive expansion program and methodical development through scientific research. In the near future. steadily but surely it plans on becoming the largest private university in the country within the next few years. to name a few. proper classrooms and student recreational facilities. it is an ideal place to excel in learning. we hope to increase this capacity to almost 70. and the absolute tranquility of suburbia. However.about their energy requirements. Located a stone’s throw distance away from the US Embassy in Baridhara. Imagine a scenic landscape where all the beauty that nature has to provide resides in perfect harmony with the excellence of Man’s creativity in the field of architecture. It is a model that we plan to replicate across all the EPZs of the country. Pharmacology and Nursing departments. With over 300 acres currently under development in United City and 650 plots already handed over to a most excellent clientele. We can only hope that one day our approach to power generation will make our country a shining beacon within the Asian region. design and creative plan of operation. United International University Proper education solidifies the backbone of a nation – the youth who are destined to lead the country into the future. With 18. As it stands now. well equipped laboratories. where families can start their lives anew. 3750 million and is powered by the latest Wartsila gas engines with the ability to produce 8. the main goal of NLDL is to become the premier and most trusted 20 . In 2003. Established in 1996. 11/33 KV power transformers along with required length of 11 KV distribution lines have been built by MHL under each of the two project sites. Comilla. began its commercial operation as a premium real estate company in 2003 with United City being its flagship project. similar educational institutions were yet to achieve the same. MHL has been regularly providing its surplus energy to the Rural Electrification Board (REB) of Bangladesh. spread over 13 acres of land. It will be the most beautiful setting within one of the largest metropolitan cities in the world. with 1100 full-time dedicated workers managing and operating the plant around the clock.000 spindles initially. A fun fact – that is almost enough high quality yarn to cover over a 1000 kilometres a day. it can simply be described as a piece of heaven in Dhaka. Comilla Spinning Mills Ltd. this makes us the only true independent power generation and distribution company in all senses of the term. High voltage 33/11 KV substations comprising of two 16/25 MVA. Comilla Spinning Mills Ltd. With plans of opening a new major campus to evergrowing student base and faculty. United Group ventured into this noble professional sector by uniting together some of the finest academic minds in the nation under the banner of United International University. thus lighting up thousands of homes across the nation. The total project cost of the plants stand at Tk. the plant has almost 50. They would of course include Accounting. Thus MHL has constructed multidisciplinary infrastructures like power generation. Neptune Land Development Ltd.000 spindles. On top of this unique achievement. high voltage transmissions and distribution and high/low pressure gas pipelines for the project.

Thus. United Makkah Madina Travel & Assistance Co. United Property Solutions Ltd. United Group literally began treading new waters with Hafez Zamiruddin Fisheries Limited and their fleet of fishing trawlers. It is currently involved in the construction and development of residential plots and houses as well as commercial properties. thus further simplifying things for them. these vessels have been assembled locally in their entirety. this company has been organizing such trips for nearly a decade now. Ltd. Hafez Zamirudding Fisheries Ltd. 21 . which has been lauded especially by the many pharmaceutical industries today. was born as a value-based manufacturing unit focused on innovating. which include some of the best known buildings of the city today. and marketing of polyethylene (PET) products. as well as comprehensive liquefied material handling systems for the consumer and industrial bottles. embarked upon its mission to be a facilitator and guide for the hajjis during this holy duty. Providing total real-estate involvement from designing to construction and finally to management. manufacturing. The maiden voyage of the ships saw them venturing into the ever grand Bay of Bengal. the Group has decided to go by its namesake and bring all these different projects under one roof. With ample capacity upwards of 140 tons. As a pioneer in this sector. Over the years United Group has profitably ventured into various segments of the real estate industry. To back up the claim. United Makkah Madina Travel & Assistance Co. United House and the United International University buildings.developer of real estate projects in the nation. While these projects have been completed under several different company banners. they can remain out at sea for a month at a time returning only with their holds filled to the brim with some of the best fish that the Bay has to offer. by the Grace of the Almighty. thus becoming one of the only such real estate ventures to be fully approved by this government body. In early 2009. it only sells land that is absolutely undisputed and owned by the company. United Polymers Ltd. A testament of this lies in the fact that almost all of its dedicated clients have chosen on referrals they get from pilgrims who have honored the company in the past by choosing to travel with the company. we introduced this product to many businesses since our inception. Plastic is one of the core materials needed for many companies .from soda manufacturers to pharmaceutical companies but there was a great lacking in quality plastic botling and other plastic materials Thus United Polymers Ltd. not only saving valuable foreign currency for the country but boosting the blossoming ship building industry. And why not – we plan to take this company to export markets where such products are much sought after and buyers are quite often willing to pay a premium for quality. United Property Solutions Ltd. this company is dedicated to be a comprehensive one-stop solution for people interested to invest in us. With nets and gears designed for white fishing. Notable examples would includes. as opposed to shrimp fishing. With effort and our culture of innovation. This project has been developed according to full compliance with RAJUK guidelines. who just happen to be our dedicated customers even to this day. the United Hospital. was born. become a market leader in this profession. we have developed a full set of PET bottle products of high quality. Recognized as one of the few registered travel agencies authorized to deal with all Hajj and Umrah matters. Ltd. By being fair and honest in its dealings and a strong adherence to the Quran and Sunnah it have. known for her abundant wealth of marine life.

Through significant ongoing investments. Since then it has undergone both infrastructural and civil development of the area. providing a one-stop solution for exporters. 22 . a passenger jetty. United Land Port Teknaf Ltd is situated on 27 acres of land on the banks of the Naaf River at the southernmost point of Bangladesh. including earth filling. cargo jetty and a rest house among other things. importers and the government alike. this is a port of transit for goods between our country and Myanmar.United Land Port Teknaf Ltd. Winning a tender in 2006 from Bangladesh Land Port Authority has enabled to control operations and management of the port while also signing Concession Agreement and Land Lease Agreement with the same. making pontoons. boundary wall construction. warehouses. ULPTL plans to become a fully comprehensive port unit. approach roads.

where natural gas and associated infrastructure is available.269 MW 3. Bangladesh would be looking forward to various sources of finance.044 Ckt km 5.5%. The installed generation capacity was about 5269 MW (as on June 2007) from a meager 88 MW in 1960. currently.578 Ckt km 7. Over the past several years although the demand of power and gas grew in geometric progression. The western zone peak demand is about 1100 MW while its regional generating capacity is only about 600 MW. Notwithstanding the progress made to date. Bangladesh ranks among the lowest countries in the world in terms of electricity consumption per capita. Since natural gas dominates the power sector in Bangladesh. is still among the lowest in the world. or about 64% of the total installed capacity. which is also low compared to many developing countries. Electricity generation grew at about 7% p.467 Ckt km 5. huge investment will be required for generation capacity addition.175 MVA 7. This implies that there is scope for significant growth in power sector. Bangladesh's per capita electricity generation of 165 kWh p. Public sector is not in a position to secure this huge investment for power generation. About 43% of the population has access to electricity. Its distribution networks currently serve only an estimated 43% of the total population of more than 150 million. (5) Competitive Condition of the Business: As power sector is a capital-intensive industry.785 MW 23. weak transmission and distribution systems.a. According to the Power Cell.219 MVA 23 . during last fifteen (15) years compared with average annual GDP growth rate of about 5. The severe shortage of electricity supply is due in part to BPDB’s inadequate generation capacity. In January 2006. Generation Installed Capacity (a) BPDB (b) IPP & Mixed Sector Total Total Maximum Demand Served Total Net Energy Generation Transmission Transmission Line 230 kV 132 kV Total Capacity of Grid S/S 230/132 kV 132/33 kV 3. The table bellow depicts power sector at a glance. Given the huge investment requirement for power development in the country. where the Plant is located. The western zone. and operational difficulties at its existing power plants. a. has mostly smaller and less efficient power plants running on liquid fuel. the power sector in Bangladesh is also affected by a regional imbalance 85% of the country’s generating capacity is located in the eastern zone. at about 170 kWh per capita of energy consumption. The Government has already opened the power sector for private investment and "The Private Sector Power Generation Policy" has been formulated in 1996. In addition to the overall demand-supply imbalance.267 MkWh 1. yet the power sector did not grow as per requirement and gas sector failed to explore its resources and developed its reserve. 95% of electricity comes from conventional thermal power (primarily natural gas) and the remaining 5% through hydroelectric power.(4) Distribution procedure of products or services: KPCL purchases Heavy Fuel Oil from Kuo Oil Pte Ltd. the Bangladesh Power Development Board generated 3400 MW of the country’s 5245 MW of total commercial electricity.872 MW 1. Bangladesh’s first coal-fired power plant began commercial production at the 250-MW Barapukuria facility in Parbotipur.397 MW 5. Singapore and generates electricity as its sole product and then sells to BPDB in bulk for electricity transmission through the national grid to south-western region of Bangladesh.

EA & CEI office performs the functions as specified in the Electricity Act. It purchases power from BPDB at 132 kV.4 kV) Total no. The installed generation capacity of APC is 728 MW comprising steam. of Village Electrified Access to Electricity Per Capita Generation System Loss (T&D) 2. of Agricultural Consumers Total no.42 Million 2 Lac 26 Thousand 50. West Zone Power Distribution Company: WZPDC is a distribution subsidiary of BPDB. Dhaka Power Distribution Company (formerly Dhaka Electric Supply Authority): DPDC (formerly DESA) is responsible for distribution of electricity in a part metropolitan Dhaka and a few adjacent areas. BPDB's retail sale through own distribution accounts for about 32% of total retail sales. established under the Company's Act.360 43% 165 kWh 19. 24 . 11 kV & 0. The gross energy generation is about 25% of total energy generation in public sector. 2009) Currently. of Consumers Total no. Its distribution jurisdiction covers mainly urban areas except Metropolitan City of Dhaka. Power Grid Company of Bangladesh: PGCB. 1994 is a subsidiary of BPDB. Electricity Rule. the GOB has no plans to have additional interconnection systems between the east and west regions since it prefer to transport gas to the western region in order to build gas-fired plants rather than transferring electricity. Sixty seven (67) PBS's are operating at present in rural areas.powercell. Ashuganj Power Company: Ashuganj Power Company is a generation subsidiary of BPDB created in 2002.142 km 10. WDPDC was created under Companies act 1994 to handle distributions in the South West part of the country. DESCO's retail sale accounts for 9% of total national sales.Distribution Distribution Line (33 kV.71. combined cycle and gas turbine generating units. KPCL is the leading supplier of electricity of BPDB. Dhaka Electric Supply Company Limited: DESCO. Rural Electrification Board: REB is responsible for distribution of electricity in rural areas through a system of co-operatives known as Palli Biddyut Samities.gov. It mainly purchases power from BPDB and DESA at 33 kV. Cinematograph Act to control and ensure safety of lives and properties in electricity sector. Bangladesh Power Development Board: BPDB is responsible for generation and distribution of electricity. DPDC's retail sale accounts for about 21% of total sales. it also purchases from IPPs to a small extent. It is fully responsible for high voltage transmission as well as distribution. BPDB's retail sale accounts for about 38% of total retail national sales.30% Source: www. EA & CEI: The office of the Electrical Advisor and Chief Electrical Inspector has been established under section 36 of the Electricity Act 1910.bd (visited September 01. There are a number of Independent Power Producers (IPP) who generate and sell power to BPDB. PGCB is responsible for operation of the grid network of 230kV and 132kV system. Natural gas availability in the western region is also likely to spur further socio-economic developments in the region. established under Companies' Act of 1994 is responsible for distribution of electricity in Mirpur and Gulshan area of the Metropolitan City of Dhaka.

Wärtsilä is also providing operational and maintenance services for the Khulna plant during the duration of BPDB's power purchase agreement. The plant has 110 MW Heavy Fuel Oil fired Diesel engines with Dual fuel capability plant at goalpara. BPDB’s payment obligations are supported by a letter of credit for two months minimum revenues. KPCL’s annual requirement of HFO is about 180000 Metric Ton at 80% dispatch. BPDB has committed to a minimum take or pay requirement at 50%dispatch factor on a monthly basis. The contract includes all aspects of operations and maintenance. any payments in foreign exchange to foreign parties may be paid directly through bank accounts of KPCL located outside Bangladesh. on a pass-through basis. The HFO is stored at Chittagong and transported to Khulna by Tanker Barges. which fixed the long-term operations and maintenance costs for BPDB. adjusted for foreign exchange variations. operations and maintenance expenses.5 MW capacities are installed on two power Berges. KPCL was entered into a 15 years Fuel Supply Agreement with United Summit Coastal Oil Limited for sourcing. HFO is being procured from Kuo Oil PTE Limited. BPDB’s payment obligations are also guaranteed by the Government of Bangladesh pursuant to an Implementation Agreement Revenues are based on a two-part tariff structure . The GoB ensures that the Bangladesh Bank gives KPCL and its contractors. Singapore. however any disruption is met through supply from BPDB and is required for auxiliary use only. including debt servicing and repatriation of earnings. fuel costs and a return to investors. the payment of all FCY received under the Financing Agreements or otherwise by the Company into such accounts and 25 . will be initiated through bank accounts in Bangladesh. consents for operating FCY bank accounts inside Bangladesh (including. with heavy fuel oil as the primary fuel.(6) Sources and availability of raw materials and the names of the principal suppliers: The Khulna plant consists of two Wärtsilä floating baseload plants named Tiger I and Tiger III designed for continuous operation and intended for electricity production. Khulna Wärtsilä provides 19 18V32LN Diesel Engines each of 6. Power: The power requirement is met from company’s own generation. (7) Sources of power. and are designed to cover fixed and variable costs including debt service. (8) Name of the customer who purchase 10% and more of the company’s products: Power generated by KPCL is sold in bulk to Bangladesh Power Development Board (BPDB) pursuant to the term of 15 years Power Purchase Agreement. It will use natural gas as it becomes available in the future. however. The revenues are based on a two-part tariff structure. The Company is now the only IPP in private sector Company which is operated by heavy fuel oil. Khalishpur. and Other monthly Tariff (OMT) Component to cover all other fixed and variable costs. (9) Description of contract with suppliers and customer: Implementation Agreement The IA between KPCL and the GoB states that all the company’s transaction related to the project that require foreign exchange. one of the major oil suppliers in Asia and transported to Chittagong in 17000 MT parcels.a Fuel Tariff (FT) Component. gas and water: Water: The Company uses close circuit cooling system for its generators and the cooling water requirement is very minimal which is supplied from bore well through demineralization plant. BPDB has obligated to purchase the entire electrical output generated by the Plant pursuant to a 15-year PPA. The company shall make available to the GoB the statements and accounts reflecting all such payments. and absorbed a good portion of the operating risk as well enabling BPDB to concentrate on other aspects of their power business. The Barges are permanently moored in manmade lagoon specially created for the purpose and continuously generates electricity to the National Grid. The project has been in operation since October 1998. without limitation. procurement and delivery of Heavy Fuel Oil (HFO) to the plant.

The Operator will pay the Company a penalty of US$ 15. BPDB’s obligations under the PPA are guaranteed by the GOB pursuant to an Implementation Agreement (“IA”). o Other Monthly Tariff (“OMT). of Bangladesh Guarantee) The Minimum Tariff Payment obligations continue through political Force Majeure Events Compensation Amount on Termination to cover 65% of the NPV of the Minimum Tariff Payment for the remaining term of the PPA.15 years. 26 . The revenues are based on a two-part tariff structure. The GoB shall ensure that the Bangladesh Bank gives the Company permission to maintain bank accounts outside Bangladesh. fuel costs and a return to investors. 99% of which is US$ indexed. from commercial operations BPDB commitment to a minimum purchase equivalent to 50% plant factor on a monthly basis Two-part tariff structure o Fuel Tariff (“FT”). Finland Term . hence possibly mitigating risk of any non-payments. with full cost pass through.15 years Operator guarantees an 85% availability rate. and transfer any funds from its accounts in Bangladesh to its accounts maintained outside Bangladesh as are necessary to implement and carry out the project.000 for each percentage below the 85% availability rate to a maximum of 13%. GoB through the IA provides sovereign guarantee with regard to payments. (11) Number of total and full time employees: Number of full time employees KPCL Head Office is 10 people as on 31 December 2009 and in its power plant has 113 employees of Wärtsilä Bangladesh Ltd. licenses or royalty agreements: The company has not entered into any such agreement. plus consequent termination payment liability to KPCL in respect of the O&M Agreement and the Fuel Supply Agreement. trademarks. (10) Description of any material patents. Term .withdrawals there from). thus the total number of employees of KPCL is 123. The PPA commits BPDB to a minimum take-or-pay requirement of 50% dispatch factor on a monthly basis. Power Purchase Agreement (“PPA”) with BPDB BPDB has agreed to purchase the entire electrical output generated by the Plant pursuant to a 15year PPA. The Company may terminate the O&M contract for convenience and without cause upon 90 days of notice and six months fixed O&M fees Fuel Supply Agreement with United Summit Coastal Oil Limited The FSA is co-terminus with the PPA and can also be terminated upon conversion of Plant to natural gas based Plant. O&M Contractor. and are designed to cover fixed and variable costs including debt service. operations and maintenance expenses. Allows KPCL to source its own fuel supply Tariff invoices payable within 45 days of the delivery of invoice Payment Security back-up in the form of Letter of Credit covering two months of Minimum Tariff Payments (and a Govt.. O&M Agreement with Wärtsilä. plus taxes. Fuel price based on MOPS indexation and other costs as per the PPA provisions.

Details of leasehold lands are as follows: Plant Address: Goalpara. Particulars Amount in Taka Power plant Vehicles Building and construction Furniture and fixtures Office equipment Office renovation Total Written Down Value All the machineries imported were in brand new condition. The operator of KPCL Wärtsilä Bangladesh Ltd.00 188. The floating tigers generate electricity for supply to the national grid.00 3.038. Khalishpur. The existing power plants are situated on the leasehold land. the ownership of all the assets as per audited accounts for the year ended 31 Dec. The Plant & machinery and other assets of the company are mortgaged against the working capital loan to the following banks: a) BRAC Bank Limited b) Citibank NA c) Pubali Bank Limited d) Shahjalal Islami Bank Limited e) Standard Bank Limited The leasehold land is approximately 4.133. Each barge is 91.(12) Production capacity and current utilization: Currently. Lessor: BPDB 3.21% which is 12% more than that of 2008.5 meter long and 24 meter wide.00 3.5 MW). Khulna Owner of the land: Padma Oil Co. 2. ISO 14001 certification for excellence in environment management system and OHSAS 18001 for occupational health and safety standard. D. on the west petroleum terminal of Padma Oil Co.307. the power barge Tiger I and Tiger III consist of 19 Wärtsilä diesel engines capable of producing 114MW of electricity.00 33. DESCRIPTION OF THE PROPERTY (1) Location of the power plant and other property and condition of such property: Corporate office of the company is situated at Summit Centre (5th Floor).5 MW (19 Engine x 6.303. But KPCL has total licensed capacity of 110 MW. 2009. described below are in the name of the Company.599.150. In 2009.00 27 . which is a leased property.494. KPCL’s total installed gross generation capacity is 123. Such property is in good operating condition.330.5 MW generating sets that are installed on Two Power Barges are situated at Goalpara. Khulna. and current net generation capacity is 114 MW.7 Acres of land having border on the north by Bhoirab River. Dhaka-1215 and the power plant consists of 19 (Nineteen) 6. 18 Karwan Bazar C/A. has earned the unique distinction of receiving both ISO 9002 for quality management system (QMS). Khalishpur.332. (3) Lien on property: 1.00 47. (2) Ownership of property: Other than land.925. its average monthly utilized capacity is 87. Ltd.400. The company itself owns the entire fixed assets except the lease land. on the east Goalpara Power Grid Station of Bangladesh Power Development Board (BPDB).00 259.

797.746) 3.401 (7.256.00 668.911.854.271) 91. Changes in Rent: Rent payment can be adjusted by 20% in each five years of the contract (4) Expiration date of Leasehold Property The term of indenture is 17 years.427.437.904) 5.155.434.909 (17.154.745 but no shipment is being made.754) 240.00 74. (4) Seasonal aspect: In general.00 1.180.427.160.556 (3.282.693.00 3. 2008 2.174.722) 4.251) 309.500.393.930.156 5.604.718.909 2006 Taka 6. 2015 E.100.100.311.414 9.189.036.000.799) 256.523.159) (101.930.078.714.217) 272.610) (94.593.974) 9.784.059.422.048.000. (3) Material change from period to period as per audited accounts: Particulars Operating revenues Operating expenses General and administrative expenses Other income Exchange gain/(loss) Finance income Financial charges Net profit for the year 2009 Taka 6.584 2008 Taka 8. But in previous years winter season results lower demand for electricity than summer.802) 696.00 1.00 3. (5) Known trends.000.141 2.301) (64. from January 1.827.176.423.496 8.504.235.377.986.243. there is no seasonal impact on the business because of serious dearth of electricity in all seasons.386.430 (5.911.367.000.349) (92.828.000.00 - DEC 31.085.510 (156.698.663.897.306) 2.064 (200.000.085. 28 .480.085.net of current portion (2) Commitment for capital expenditure: KPCL doesn’t have any commitment made for future capital expenditure as of 31 December 2009 except of an Alternator for which procurement order was being initiated amounting to Euro 287.84 per square feet.892.226) 3.292 4.523.713 (195.492.817. events or uncertainties: Force majeure such as political unrest.118 (7.472 (177.483.267.208.345 (5.721) (61.214 2007 Taka 5.664.00 294.197 8. 1998 to January 1.264 (5.931 (5.598 2005 Taka 4.767.431.911.481.827.762. 2009 Internal Ordinary shares Redeemable cumulative class 'A' preference shares Retained earnings Total External Term Loan .Rent payable: Taka 15. hartal and natural calamities are generally known events that may affect the company business.290 2.PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITION: (1) Internal and External Sources of cash: Sources of Cash DEC 31.00 The material changes from period to period have been occurred due the change in Tariff in Effect and change of power generation.587.

620.(6) Changes in the assets used to pay off any liability: Cash disbursement of Tk. Other then above. Duties and taxes are payable for other supplies as per provision of the Private Sector Power Generation Policy of Bangladesh.545 Taka 3. if payable. (12) Lease commitment: The company has signed lease agreement with BPDB for land usage for 17 years starting January 1.242. 2009 to reimburse portion of the term loan.783. SRO No. and the lease commitment as above is being liquidated through repayment of monthly lease rental. (8) Future contractual liabilities: The company has no future contractual liabilities that may have impact on the company’s financial fundamentals. the company is exempted from income tax for a period of 15 years from the date of commercial operation. income tax. (11) Sources from which VAT.268.242.894. c) Custom duty or other liability The Company is exempted to import plant and machinery during construction and all other spare parts up to 10% of the plant & machinery cost without payment of customs duties. During the period.407 3.293 The future minimum lease payments in respect of operating leases as at 31 Dec 2009 are as follows: 31-Dec-08 31-Dec-07 31 Dec-09 Amount due: Not later than one year Later than one year but not later than five years Later than five years Taka 3. there is no plan for capital expenditure in near future under caption ‘material commitment for capital expenditure’ (10) VAT.196 was made during the accounting period ended 31 Dec.955 12. b) Income tax As per the Statutory Regulatory Order (SRO) 1999. (7) Loan taken from the holding/subsidiary company or loans given to those companies: KPCL did neither take any loan from nor give loan to any company for the last five years. are to be made in the ordinary course of business. (9) Estimated future capital expenditure: The management of KPCL is currently in negotiation with BPDP for expansion of its existing plant for an additional capacity of 110 MW which is expected to be in operation by the end of year 2010.891.3. income tax.820 7. rental expenses under non-cancelable operating leases aggregated Tk.242. 13.998 Taka 3.355.955 14. 1998. customs duty or other tax liabilities are to be paid: The payments of duties and taxes on spare part import.955 13. customs duty or other tax liability: a) VAT VAT is not applicable for the company for sale of electricity. (13) Lease Details: The company is obligated under non-cancelable lease for use of land leased out by BPDB that are renewable on a periodic basis at the option of both lessor and lessee.971. 114/99.090 29 .

(18) Auditors' certificate on allotment of shares to shareholders including promoters or sponsor shareholders for any consideration otherwise than for cash We certify that as per the share register and other relevant records maintained by Khulna Power Company Ltd. The fund is administered by a Board of Trustees and is funded by 10% contributions equally from the employees and the company.00 2.000.00 4.00 200.000.000. The fund is managed separately from the company’s assets. no shares have been allotted to promoters or sponsor shareholders for any consideration otherwise than for cash.00 608.000.000.. Provident Fund The Company operates a recognized Contributory Provident Fund for its permanent employees. (17) Last five years’ transactions between the issuer company and its subsidiary/holding company: No transactions have been made between the parties.000.(14) Personnel related schemes to make provision in future years: The Company has training schemes for human resource development and the following retirement benefits for its employees: 1. Sd/Rahman Rahman Huq 30 .00 (16) Revaluation of Asset: KPCL didn’t revalue its assets.500. 1 2 3 4 5 6 7 8 Particulars Issue Management fee Underwriting Commission Application fees DSE & CSE Listing Fees DSE & CSE Annual Listing fees DSE & CSE CDBL Fees Registrar to the Issue Fees Printing and publication Basis of calculation At actual At actual At actual At actual At actual At actual At actual Estimated or At actual Amount 1. 2.000.00 NIL 20.00 500. (15) Break down of issue expenses The breakdown of issue expenses related to direct listing is as under: Sl.000. Gratuity The Company also maintains non-funded Gratuity Scheme for confirmed employees of the company.200.

Moinuddin Hasan Rashid Position Chairman Managing Director Director Director Director Director Director Director Director Director Director Director Director Director Age 55 52 49 54 51 28 26 53 53 52 49 54 54 27 Date of first becoming Director and date of expiry of current term: Name of The Directors Mr. Adeeba Aziz Khan Mr. Ahmed Ismail Hossain Mr. Anjuman Aziz Khan Mr. Abul Kalam Azad Mr. Age and Position of all Directors: Name of The Directors Mr. Hasan Mahmood Raja Mr. DIRECTORS AND OFFICERS Name. Ayesha Aziz Khan Mr. Abul Kalam Azad Mr. Moinuddin Hasan Rashid Date of First becoming directors 20-10-1997 19-07-2009 19-07-2009 29-04-2008 29-04-2008 19-07-2009 19-07-2009 20-10-1997 29-04-2008 29-04-2008 19-07-2009 19-07-2009 19-07-2009 19-07-2009 Date of Expiry of Current Terms Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing 31 . Jafer Ummeed Khan Ms. Muhammed Aziz Khan Mr. Akhter Mahmud Rana Mr. Hasan Mahmood Raja Managing Director F. Faridur Rahman Khan Mr.(19) Material information having impact on the affair of the company: DECLARATION REGARDING SUPPRESSION OF MATERIAL INFORMATION This is to declare that to the best of our knowledge and belief no information. Latif Khan Ms. Akhter Mahmud Rana Mr. that are disclosable has not been suppressed that can change the terms and conditions under which the offer has been made to the public. facts. Jafer Ummeed Khan Mr. Khandaker Moinul Ahsan Shamim Mr. Khandaker Moinul Ahsan Shamim Mr. Hasan Mahmood Raja Mr. Muhammad Farid Khan Mrs. Latif Khan Ms. Anjuman Aziz Khan Mr. Sd/Md. Muhammed Aziz Khan Mr. circumstance. Faridur Rahman Khan Mr. Ayesha Aziz Khan Ms. Ahmed Ismail Hossain Mr. Muhammad Farid Khan Mrs. Adeeba Aziz Khan Mr.

Summit Shipping Ltd. Summit Equities Limited Khulna Power Company Ltd. Ocean Container Ltd. Ltd. Summit Uttaranchal Power Co. Muhammed Aziz Khan Summit Industrial & Merchantile Corporation Pvt. United Summit Coastal Oil Ltd. Khulna Power Company Ltd. Ayesha Aziz Khan Ms. Muhammad Farid Khan Mrs. Summit Communications Limited Summit Investment Ltd. Muhammed Aziz Khan Mr. Ocean Container Ltd. Summit Shipping Ltd.) Ltd.Involvement of Directors with Listed Company in terms of Dividend & Category: Name of The Director Mr. Ltd. Latif Khan Ms. Summit Purbanchol Power Co. Summit Alliance Port Ltd. Ltd. Jafer Ummeed Khan Name of Listed Company where Directors are involved Summit Power Limited Summit Alliance Port Ocean Containers Limited Summit Power Limited Summit Power Limited Summit Alliance Port Limited Ocean Containers Limited Summit Power Limited Summit Alliance Port Limited Ocean Containers Limited Summit Power Limited Summit Alliance Port Limited Ocean Containers Limited Summit Alliance Port Limited Ocean Containers Limited Summit Power Limited Position Chairman Chairman Chairman Director Director Director Director Vice Chairman Director Director Director Director Director Director Director Executive Director Listing Category in DSE/CSE A A N A A A N A A N A A N A N A Involvement of Directors with another Company: Summit Group Name of The Director and associated Companies Mr. Anjuman Aziz Khan Mr. Ltd. Adeeba Aziz Khan Mr. Ltd. Summit Electricity Limited Summit Euro Refinery Ltd. Ltd. Position Chairman & Managing Director Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Director Chairman Chairman Chairman Chairman Chairman Chairman Chairman Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director 32 . Muhammad Farid Khan Summit Corporations Summit Industrial & Mercantile Corporation Pvt. Summit Power Limited Alliance Leasing and Finance Co. Summit Holdings Limited Summit Investment Limited Summit communication Ltd Mr. Cosmopolitan Traders (Pvt. Cosmopolitan Traders (pvt) Ltd. Ltd. Summit Purbanchol Power Co. Summit Uttaranchal Power Co. Summit Power Limited Alliance Leasing and Finance Co. Summit Holdings Limited Summit Electricity Limited Summit Euro Refinery Ltd. Ltd.

Summit Communications Limited Summit Holdings Limited Khulna Power Company Ltd. Khulna Power Company Ltd. Summit Shipping Ltd. Ltd. Latif Khan Summit Industrial & Mercantile Corporation Pvt. Summit Shipping Ltd. Ltd. Summit Equities Limited Summit Alliance Port Ltd. Cosmopolitan Traders (pvt) Ltd. Summit Power Limited Summit communication Ltd Summit Holdings Ltd Cosmopolitan traders (pvt) Ltd Summit Shipping Ltd Managing Director Director Managing Director Chair Person Director Director Director Director Director Director Director Director Director Director Managing Director Director Director Director Director Director Vice Chairman Director Director Director Chairman Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Managing Director 33 . Summit Power Limited Ocean Container Ltd. Ltd. Ms. Summit Purbanchol Power Co. Khulna Power Company Ltd. Cosmopolitan Traders (Pvt. Ltd. Ayesha Aziz Khan Summit Equities Limited Summit Industrial & Mercantile Corporation Pvt. Alliance Terminal Limited Ocean Container Ltd.Mrs. Syenergey Services Summit Purbanchol Power Co. Jafer Ummeed Khan Summit Industrial & Merchantile Corporation Pvt. Khulna Power Company Ltd. Khulna Power Company Ltd. Summit Holdings Limited Alliance Terminal Limited Mr. Summit Uttaranchal Power Co. Ltd. Summit Uttaranchal Power Co. Summit Alliance Port Ltd. Adeeba Aziz Khan Summit Industrial & Mercantile Corporation Pvt. Summit Shipping Ltd. Mr.) Ltd. Summit Alliance Port Ltd. Summit Power Limited Summit Alliance Port Ltd. Anjuman Aziz Khan Summit Power Limited Cosmopolitan Traders (Pvt. Ltd.) Ltd. Ocean Container Ltd. Summit Industrial & Mercantile Corporation Pvt. Ltd. Ltd. Alliance Terminal Limited Sumcynet Limited Summit Communications Limited Summit Holdings Limited Ms. Ltd. Summit Electricity Limited Summit Euro Refinery Ltd.

United Hospital Ltd. Comilla Spinning Mills Ltd. Ltd. United Hospital Ltd. United Polymers Ltd. Sight and Light BM Cine Lab Services Mr. Khulna Power Company Ltd. Akhter Mahmud Rana United Enterprises & Co. Gulshan Properties Ltd. Neptune Land Development Ltd. United Land Port Teknaf Ltd. Hafez Zamiruddin Fisheries Ltd. United Makkah Madina Travel & Associate Co. Chicken King International (BD) Ltd. United Rotospin Ltd. United International University Malancha Holdings Ltd. Mr. Board of Governors Director 34 . Chairman & Managing Director Chairman & Board of Governors Chairman & Managing Director Managing Director Chairman Chairman Chairman Director Director Chairman Chairman Chairman Chairman Director Chairman Chairman Chairman Position Director Member. Board of Governors Director Director Director Director Director Director Director Director Director Director Director Director Managing Director Director Director Member. Ltd. United Management & Trading Services Ltd. Neptune Commercial Ltd. Ltd. United International University Khulna Power Company Ltd. Ahmed Ismail Hossain United Enterprises & Co. Board of Governors Director Director Director Vice Chairman Director Managing Director Director Director Managing Director Director Director Director Managing Director Director Director Chairman Chairman Director Director Director Director Member. United Rotospin Ltd. United Polymers Ltd. United Land Port Teknaf Ltd. Novo Healthcare And Pharma Ltd. United Hospital Ltd. Neptune Properties Ltd. United Management & Trading Services Ltd. United Rotospin Ltd. Gulshan Properties Ltd. Mr. Neptune Properties Ltd. Comilla Spinning Mills Ltd. Ltd. Neptune Land Development Ltd. Gulshan Properties Ltd. Neptune Properties Ltd. Novo Healthcare And Pharma Ltd. Comilla Spinning Mills Ltd. United Makkah Madina Travel & Associate Co. United Makkah Madina Travel & Associate Co. United Polymers Ltd. United Land Port Teknaf Ltd. Khandaker Moinul Ahsan Shamim United Enterprises & Co. KMC Global Food Ltd. Neptune Commercial Ltd.United Group Name of The Director and associated Companies Mr. Hafez Zamiruddin Fisheries Ltd. Ltd. Bari Studio Ltd. Ltd. United International University Malancha Holdings Ltd. United International University Malancha Holdings Ltd. Ltd. Hasan Mahmood Raja United Enterprises & Co. United Management & Trading Services Ltd. Neptune Land Development Ltd. Novo Healthcare And Pharma Ltd. Hafez Zamiruddin Fisheries Ltd. Khulna Power Company Ltd. Neptune Commercial Ltd.

United Rotospin Ltd. Khulna Power Company Ltd. Novo Healthcare And Pharma Ltd. Chairman Brother of Muhammed Aziz Khan. Gulshan Properties Ltd. Gulshan Properties Ltd. Chairman Daughter of Muhammed Aziz Khan. United Management & Trading Services Ltd. United Hospital Ltd. United Polymers Ltd. Khulna Power Company Ltd. Chairman Daughter of Muhammed Aziz Khan. Chairman Brother of Mr. United Makkah Madina Travel & Associate Co. Managing Director 35 . Neptune Commercial Ltd. Hafez Zamiruddin Fisheries Ltd. Mr. Neptune Properties Ltd. Ltd. United Rotospin Ltd. United Polymers Ltd. Chairman Brother of Muhammed Aziz Khan. Khulna Power Company Ltd. Hafez Zamiruddin Fisheries Ltd. Akhter Mahmud Rana Relationship Wife of Muhammed Aziz Khan.Khulna Power Company Ltd. Faridur Rahman Khan United International University Malancha Holdings Ltd. United Makkah Madina Travel & Associate Co. Board of Governors Director Director Director Director Family relationship between the directors and officers: Name of the Director/officer Mrs. United Land Port Teknaf Ltd. Mr. Neptune Land Development Ltd. Neptune Commercial Ltd. Ltd. Board of Governors Director Director Managing Director Director Director Director Director Director Director Director Managing Directors Director Director Director Member. United Land Port Teknaf Ltd. Ayesha Aziz Khan Ms. Adeeba Aziz Khan Mr. United Rotospin Ltd. Abul Kalam Azad United International University Malancha Holdings Ltd. United Hospital Ltd. Novo Healthcare And Pharma Ltd. Comilla Spinning Mills Ltd. United Management & Trading Services Ltd. Ltd. Moinuddin Hasan Rashid United Enterprises & Co. Director Director Director Director Director Director Director Director Director Director Director Director Director Director Member. Jafer Ummeed Khan Mr. Neptune Commercial Ltd. Neptune Properties Ltd. Gulshan Properties Ltd. Hafez Zamiruddin Fisheries Ltd. United Hospital Ltd. Chairman Brother of Muhammed Aziz Khan. Comilla Spinning Mills Ltd. United Land Port Teknaf Ltd. Board of Governors Director Director Director Director Director Director Director Director Managing Director Managing Director Director Director Director Director Member. United Polymers Ltd. Neptune Land Development Ltd. Latif Khan Mr. Farid Khan Ms. Neptune Land Development Ltd. United International University Malancha Holdings Ltd. Hasan Mahmood Raja. Neptune Properties Ltd. Mr. Anjuman Aziz Khan Mr. Comilla Spinning Mills Ltd. United Land Port Teknaf Ltd. Novo Healthcare And Pharma Ltd. Md.

Khan has helped to formulate the Private Sector Power Generation Policy of Bangladesh. Project Director Son of Mr. Mr. Muhammed Aziz Khan. which is formed to represent and to promote the interests of private sector business organizations engaged in the energy sector. Ayesha Aziz Khan. Khan is a business graduate from Dhaka University. Latif Khan was born on 28 December 1958 in Dhaka. After graduation Mr. setting up country's first Inland Container Depot (ICD)-"Ocean Container Ltd". Latif Khan. which is setting up 200 beds for medical services on charitable basis in Dhaka Cantonment. a renowned and pioneering leading business personality in power sector of Bangladesh. Khan has set up "Siraj Khaleda Trust". Anjuman Aziz Khan. Managing Director Short biography of the directors and officers: Mr. Mr. Farid Khan was born in 1960. Mrs. He enthusiastically takes part & contributes to social activities such as to help to acid burn and drug victims to mention a few amongst host of other activities. He returned to Bangladesh in 1997 and thereof joined Summit Group as the Managing Director of Summit Shipping Limited. Mrs. Mr. Ms. Md.. Khan has established himself as a sound and dynamic businessman of the country. Ms. He was a stockbroker and a financial analyst at Prudential Insurance of America where he received numerous sales achievement awards. Mr. He is involved in business since 1980. Mr. Mr. Moinuddin Hasan Rashid Mr. Ltd. which is setting up 200 beds for medical services on charitable basis in Dhaka Cantonment. He was solely instrumental in setting up Liquefied Petroleum Gas (LPG) project and Tanks Terminal in Mongla. Director Born in 1981. Director Mrs. in 1981.a social wing of Summit Group. Khan has established himself as a dynamic and proactive entrepreneur who has built Summit Group-recognized as the largest infrastructure Industrial organization of Bangladesh.a social wing of Summit Group. he worked for over 15 years in the financial sector. Muhammad Farid Khan."Summit United Tanks Terminal". Chairman Mr.Mr. Mr. country's first Independent Power Producer (IPP). He started his business career with trading in plastic compound. Ayesha Aziz Khan has completed her graduation in Economics and Business from the University College of London in 2002 and Masters in Business Administration from Columbia 36 . Anjuman Aziz Khan. He pursued BA in Public Administration at Dhaka University. There. Muhammed Aziz Khan has 22 years of business experience in Summit. Hasan Mahmood Raja. wife of Mr. Director Mr.S. Khan is a member of Siraj Khaleda Trust. Managing Director Uncle of Mr. He was an integral part of the team that pioneered export of molasses and fertilizer from Bangladesh. now known as "South Eastern Tanks Terminal". Khan did his MBA in 1980 from the Institute of Business Administration (IBA). He is also the Chairman of Khulna Power Co. Director Mr. Muhammed Aziz Khan. Hasan Mahmood Raja. He has 36 years of business experience. and subsequently left for higher studies to the U. fertilizer and other commodities. Farid Khan has proved to be an entrepreneur with special skills in the development of new projects. Khan was the Founder President of Bangladesh Energy Companies Association (BECA). Abdur Rahim. Md. She enthusiastically takes part & contributes to social activities such as "Assistance of Blind Children" and "women's entrepreneurship development". First Tanks Terminal. Mr. University of Dhaka. Mr. He also worked as a Financial Officer at Wells Fargo Bank in California.

Mr. Netherlands. Singapore. he joined Summit Group in 1987. Canada. He was associated with different companies of United Group since 1978. New York.. United Hospital Limited. Hong Kong. Ahmed Ismail Hossain. He has extensively traveled in USA. Australia. UAE. Hafez Zamiruddin Fisheries Ltd. USA. Mr. Spain. Germany. Australia. Australia. He is also a Member. particularly of Summit Industrial and Mercantile Corporation (Pvt. Neptune Commercial Ltd. Director of United Enterprises Ltd. Presently. after that she involved herself with Drew & Nepier LLC. Malaysia. He is a member Savar Golf Club. India.. Singapore. Finland. South Korea. Adeeba Aziz Khan. Switzerland. He is also a member of Dhaka Club and Savar Golf Club. Ltd. Finland. She has successfully completed her Bar Vocational Cource fro Inns of Court School of Law. Germany. and Director of United Enterprises Ltd. UK. Director Mr. Singapore as an International Lawyer. UK. Thailand and so on. Khan is holding till date. Adeeba Aziz Khann was born on June 14. Jafer Ummeed Khan. and so on. Singapore. Director Born in 1956. Malaysia. UAE. Hasan Mahmood Raja.. Italy.. Ms. Singapore. 37 . Mr. He is the Managing Director of Hafez Zamiruddin Fisheries Ltd. He is also a member of Dhaka Club and Savar Golf Club. Mr. Canada. Managing Director Born in 1957. India. Japan. Mr. Jafer Ummeed Khan was born on 10th May 1957. Switzerland. Saudi Arabia. United Hospital Limited etc. He spearheaded the development and expansion of Summit Group. United Rotospin Ltd. Kamal Hossain & Associates. Akhter Mahmud Rana has completed ‘A’ Level. Khan is also holding the position of Director in several companies of Summit Group. University of Dhaka.. China. India. Finland. He is the Vice Chairman of United Hospital and Managing Director of Comilla Spinning Mills Limited. Ms.. UK. And Novo Healthcare and Pharma Ltd. Board of Governors (BoG) of United International University. Malaysia. and so on. Spain. and so on. Germany. Board of Governors (BoG) of United International University. Mr. Khandaker Moinul Ahsan Shamim has completed Bachelor of Commerce. Director Born in 1960. UK on 2005. Switzerland.University. Mr. Italy.. From July 2006 she worked with Dr. He has extensively traveled in USA. Akhter Mahmud Rana. Germany.. Mr. He has extensively traveled in USA. which post Mr. Director Ms. Ahmed Ismail Hossain has completed BSS and MSS. Bangladesh as Pupil. He is also a Member. Ms. Canada. 1983. Khan is holding the position of Director in Several Companies. International Relations. Khandaker Moinul Ahsan Shamim. South Korea. China. He has extensively traveled in USA. He is also a Member. After completeing his studies in the United Kingdom. Jafer Ummeed Khan was also unanimously elected as the Vice President of Bangladesh Energy Companies Association. Hasan Mahmood Raja has completed Bachelor of Commerce. India. United Polymer Ltd. Malancha Holding Limited and Khulna Power Company Limited and many more as well as the Chairman. Mr. China. Director Born in 1957. United Polymer Ltd. UK. China. Gulshan Properties Ltd. Board of Governors (BoG) of United International University. Neptune Commercial Ltd. He is also a member of Dhaka Club and Savar Golf Club. Because of his contribution in the power sector. Australia..) Limited and later on Summit Power Limited. Board of Governors (BoG) of United International University. Mr. He is the Chairman and Managing Director of United Enterprises & Co. Malaysia. Canada.

2. Engineer (Electrical & Electronics.. Abul Kalam Azad. Moinuddin Hasan Rashid has completed B. He served on deputation as Technical Director in Bangladesh Shipping Corporation and Bangladesh Inland Water Transport Corporation from 1993 to 1997. He is Director of United Enterprises Ltd.. United Enterprises and Company Limited Number of Share 104. Finland.. Singapore. Netherlands. Faridur Rahman Khan has completed Bachelor of Science. He is also Director of United Polymer Ltd. Narayangonj from 1987 to 1993. Board of Governors (BoG) of United International University. He is also a Member. UAE. Gulshan Properties Ltd.. then he joined in Khulna Power Company Ltd. Soudi Arabia. Germany. Mr. Thailand and so on. Sc in Marine Engineering FCA.. Polymer Ltd. Malaysia.500 % 49. Australia. Director Born in 1955.) Ltd. United Land Port Teknaf Ltd. he worked in Bangladesh Steel & Engineering Corporation in various capacities from 1976 to 1993 starting as Deputy Chief Engineer. He obtained B. and United Land Port Teknaf Ltd. Com Experience 34 years 22 years Designation Project Director Financial Controller & Company Secretary Mr. Malancha Holding Ltd. Board of Governors (BoG) of United International University. He has extensively traveled in USA. He is also a Member. Gulshan Properties Ltd. Mr. Canada.. He is also a Member. Thailand and so on. London. Aminur Rahman Educational Qualifications B. Sc in Marine Engineering from the Merchant Marine University College of Rijeka. UK. Hafez Zamiruddin Fisheries Ltd. Moinuddin Hasan Rashid. Md. UAE. Yugoslavia in 1968. 1 2 Name Md. Hafez Zamiruddin Fisheries Ltd.. Malancha Holding Ltd. Sc. Summit Industrial & Mercantile Corporation (Pvt. Franch. Abdur Rahim was born on 01 January 1947. He is the Managing Director of Neptune Land Development Ltd. Faridur Rahman Khan. Singapore. Director Born in 1955. Hafez Zamiruddin Fisheries Ltd. He has extensively traveled in USA. Mr. He worked on board various vessels of DDG “Hansa” Lines of West Germany upto 1975. Malaysia. India. Neptune Commercial Ltd..500 104. Thereafter. United Hospital. Abdur Rahim M. Abdur Rahim. Pakistan. Ownership List of shareholders who owns 5% or more than 5% share of the Company: Name of the Shareholder Entity 1. India. Md. Name and qualifications of the Senior Officers: Sl.. UK. Board of Governors (BoG) of United International University.261. Pakistan. India.. Afterwards. Malancha Holding Ltd.9832% 49. Neptune Commercial Ltd.261.. Mr.9832% CIB status: Neither the company nor any of its sponsors or directors or associates is defaulter with any bank in terms of the CIB Report of the Bangladesh Bank. M. Japan. 38 . in 1997 as a Project Director and he was actively involved in formation of the company and was pivotal to timely implementation of the project. Neptune Commercial Ltd. Australia.. Mr. United Hospital. Singapore. Gulshan Properties Ltd. Pakistan. Saudi Arabia. Abul Kalam Azad has completed Bachelor of Science. United Land Port Teknaf Ltd. UK. he is also director of United Polymer Ltd. He is the Managing Director of United Hospital and Managing Director of Neptune Properties Ltd. Project Director Mr. Thailand and so on.. Japan.. Soudi Arabia. He has extensively traveled in Australia. France. Malaysia.. He was the General Manager of Khulna Shipyard Ltd from 1982 to 1987 and the Managing Director of Dockyard & Engineering Works Ltd. Canada.Mr. United Land Port Teknaf Ltd. Director Born in 1982.

judgement or decree of any Court of competent jurisdiction against officer. 3. Any nominee for director or officer. 4. Aminur Rahman was born on 01 January 1959. 39 . Any member of the immediate family (including spouse. securities or banking activities. children. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH RELATED PARTIES The Company has no proposed transaction nor had any transaction during the last 2(two) years with following related parties a. parents. finance and company secretarial matters in various multinational companies like Rhone Poulenc. FCA.Mr. Md. as Financial Controller & Company Secretary. director or nominee permanently or temporarily enjoying. director or nominee in the criminal proceedings or any criminal proceedings pending against him. He has attended in various training courses and seminars in home and abroad. He is a Chartered Accountant. Any director or executive officer of the Company b. H. or who was a director or connected in any way with a director at any time during the last three years prior to the publication of the Information Document . including more than 10 years of service in Khulna Power Company Ltd. securities or banking activities. He also obtained his Master degree with honors in Accounting from Dhaka University. INVOLVEMENT OF THE DIRECTORS AND OFFICERS IN CERTAIN LEGAL PROCEEDINGS No officer or director of the Company was involved in any of the following types of legal proceedings in the last ten years: 1. and c. G. brothers. Any order of the Securities and Exchange Commission or other regulatory authority or foreign financial regulatory authority suspending or otherwise limiting the involvement of any officer or director or nominees in any type of business. Any person owning 5% or more of the outstanding share capital of the company d. barring.except related party disclosures. 2. sisters and in-laws) of any of the above persons e. Duncan Brothers Ltd and Oxfam. qualified from the Institute of Chartered Accountants of Bangladesh (ICAB). Loan status: The Company did not take or give any loan from any Director or any person connected with any Director nor did any Director or any person connected with any Director. Any order. Any conviction of an officer. Any transaction or arrangement entered into by the company or its subsidiary for 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 sister concerns. Aminur Rahman. Financial Controller & Company Secretary Mr. Any bankruptcy petition filed by or against any company of which any officer or director or nominee of the Company filing the Information Document was a director. suspending or otherwise limiting the involvement of any officer or director or nominee in any type of business. He is having more than 22 years of service experience in the field of accounts. officer or partner at the time of the bankruptcy. Md.

EXECUTIVE COMPENSATION Remuneration paid to top executives during January to December 2009 is given below. which includes only two personnel paid by KPCL: Sl. 40 . The company did not pay any amount to any director as the company has no policy regarding this.226. J. 1 2 Name Md. DIRECTORS AND EMPLOYEES The company did not grant any option for issue of shares to any officer. TRANSACTION WITH PROMOTERS BENEFIT FROM THE COMPANY Promoters did not receive anything of value directly or indirectly from the company in the last five years.455. OPTION GRANTED TO OFFICER. director and other employees of the company or to any other person outside the country.030.167 to US$ 201.822.I. The Fee includes a fixed fee per month ranging from US$ 162. Promoters’ asset To Company No assets were acquired or are to be acquired from any of the promoters.640 Pay increase intention Except annual increment and allowances.960.583 depending on the plant load factor.00 N. Aggregate amount of 2009 Taka 2008 Taka Salary and allowances 13.703. Wartsila has employed 113 employees and their remuneration is paid by Wartsila from the O&M Fees received from KPCL. There is no contract with any director or officer for the payment of future compensation.00 4.Dec 2009) 5. Abdur Rahim M. Plant Operation and maintenance has been outsourced from Wartsila under Operation & Maintenance Agreement.172 17. Aminur Rahman Designation Project Director Financial Controller & Company Secretary Total Compensation (Jan . K. there is no plan for substantial pay increase to its officers and directors.B.

470.497.284 1.588 2.133.283.332 3.593.787 208.004 1.106 208.668 8.53 The calculation of net assets value per share is given below: 2009 Taka Assets Property.376 1.889 14.276 3.728.000 30.983 1.276 762. 18.000.084.307. 2009. the Net Tangible Asset Value per share stands at Tk.516 701.314.605 12.493.463.691 40.476. TANGIBLE ASSETS PER SHARE As on December 31.652 885.593.53 2008 Taka 3.135.468.548.758.008.104.940. plant and equipment.673 100. of Shares Tangible Asset Value per Share 3.581.L.current maturity portion Dividends payable Preference stock dividends payable Accrued expenses and others Payable for interest and other financial charges Total current liabilities Net current asset Net assets employed No.364 13.915 1.033.511 3.777.463.656.518 1.283.774 3. net Total non-current assets Inventories Accounts receivable Other receivables Advances.185.773 102. deposits and prepayments Cash and cash equivalents Total current assets Accounts payable Working capital loan Term loan .307.526.000 18.332 981.09 41 .722.883.486.761.048 284.565.640.865.908.000 17.209 558.472 1.899.180.270 387.133.314.335.

000 50.000 5.) Ltd.615.0024% 0.M.e. Summit Industrial & Mercantile Corporation (Pvt.000 2.500 5.261. 25% of the existing paid-up capital (i.000 208. 42 .0024% 0.000 1.000 50.593.0024% 0.0024% 0.261.615.000 5.261.0024% 0.0024% 0.000 50.000 5.000 5.. (incorporation in Bangladesh) United Enterprises & Company Ltd.9832% The Shareholding Position of ordinary shares by the Owner of the Company Name of shareholders Summit Industrial & Mercantile Corporation (Pvt) Ltd. after the price of the listed share is discovered and fixed following the book building method as prescribed by SEC through Securities and Exchange Commission (Public Issue) Rules.000 5.042.0024% 0.000 50.000 50.000 50.0024% 0.000 Face Value (Taka) 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Total value (Taka) 1.000 50.500 104.48.042.M.000 5. 2.0024% 0.000 50.000 5.000 50.000 5.930. 2006. OWNERSHIP OF COMPANY’S SECURITIES: Ownership List of shareholders who owns 5% or more than 5% share of the Company: Name of the Shareholder Entity 1. The existing shareholders shall offer for sell 25% (twenty five percent) of the shareholdings in the Company within 30 (thirty) trading days from the date of commencing the normal trading. (incorporated in Bangladesh) Muhammed Aziz Khan Anjuman Aziz Khan Latif Khan Muhammad Farid Khan Jafer Ummeed Khan Ayesha Aziz Khan Adeeba Aziz Khan Hasan Mahmood Raja Ahmed Ismail Hossain K.000 As resolved in the Board of Directors meeting of KPCL and also as per resolution taken in the EGM of KPCL.e.98% 0.000 50.000 5. Ahsan Shamim Akhter Mahmud Rana Faridur Rahman Khan Abul Kalam Azad Moinuddin Hasan Rashid Total % Of Shareholdings 49.500 % 49.000 50.085. 5.0024% 0.000 5.500 104.21.000 5.0024% 100% Total Shares (No) 104.250 shares) to be sold to the general public/institutions at Market Price.000 5. United Enterprises & Company Limited Number of Share 104.000 50.0024% 0.261.0024% 0. to the extent those are applicable or relevant in these respect.9832% 49.000 5.0024% 0.000 50. i.000 50.98% 49.

e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer. selection of Directors & Auditors and other usual agenda of General Meeting – Ordinary or Extra Ordinary. the shares. of the company are freely transferable. Articles of Association of the Company and other relevant Rules in force. pay the members such interim dividend as in their judgments the financial position of the company may justify. 1994 and the Articles of Association of the company. 1994. such holders of securities shall be entitled to convert such securities into ordinary shares if it is so determined by the company. from time to time. Conversion and liquidation rights of any preferred stock outstanding or being offered: If the company at any time issues convertible preference shares or Debenture or Bond with the consent of SEC. audited as well as un-audited. shall be divisible among the members in proportion to the capital paid up on the shares held by them respectively. The Directors shall present the financial statements as required under the Law and International Accounting Standards. In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of shares of in terms of the guidelines issued by the SEC from time to time. the company shall not charge any fee for registering transfer of shares. c) No dividend shall be payable except out of profits of the company or any other undistributed profits. Dividends shall not carry interest as against the Company. subject to any special right relating thereto created or authorized to be created by the Memorandum of Association subject to the provision of the Articles of Association. d) The Directors may. minors or persons of unsound mental health. On a show of hand every shareholder present and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him/her. among others. DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED Dividend. if any. but the Company in its General Meeting may declare a smaller dividend. Subject to the provisions of the Companies Act. consistently applied throughout the subsequent periods and present with the objective of providing maximum 43 . Other material rights of common or preferred stockholders: The Shareholder shall have the right to receive all periodical reports and statements. published by the company from time to time. No transfer shall be made to firms. b) No longer dividend shall be declared than is recommended by the Directors. Shareholders shall have the usual voting right in person or by proxy in connection with. voting and pre-emption rights of the shares outstanding or being offered: 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. The declaration of Directors as to the amount of net profit of the company shall be conclusive.N. Financial Statements will be prepared in accordance with International Accounting Standards. Limitations on the Payment of dividends to common or preferred stockholders: a) The profit of the company.

000.000 1.disclosure as per law and International Accounting Standard to the shareholders regarding the Financial and operational position of the company.000 The City Bank Limited Pubali Bank Limited One Bank Limited Trust Bank Limited 44 . the second anniversary of the issue date.000.000 shares starting from 14 May 2010.000 redeemable cumulative class 'A' preference shares to the above shareholders on 14 May 2008.000 200.000. under ordinary circumstances.000 200. In case of any declaration of stock dividend by issue of bonus shares.000 200.100. O.000 200. all shareholders shall be entitled to it in proportion to their shareholdings on the date of book closure for the purpose. All other material provisions giving or limiting the rights of the holders of debt: Not applicable for KPCL due to the reasons stated above.000 1.000 100.000.000.100.000 1.100. DEBT SECURITIES: Terms and conditions of debt securities that the company may have issued or to be issued: The company does not have any plan to issue Bond or any other debt securities. Preference Share The company issued 1.000 200. 1994.100.000 1.000 1. The shareholders’ holding not less than 10% of the issued/fully paid up capital of the company shall have the right to requisition Extra-ordinary General Meeting of the Company as provided under Section 84 of the Companies Act. are redeemable in five annual equal installments of 220.000 100. Trustees designated by the indenture for outstanding debt or for debt being offered: Not applicable for KPCL due to the reasons stated above.000 1. Name of shareholders Number of shares 600. Principal amount.000.000.000.000 31 Dec 2009 Face value Taka 1. maturity date.000 31 Dec 2009 Total value Taka 600. These shares.000.000 100.000. interest rate and other features of all debt securities: Not applicable for KPCL due to the reasons stated above.000 200.000 31 Dec 2008 Total value Taka 600.

Kamal Hossain & Associates. 23. Manager to the issue AAA Consultants & Financial Advisers Ltd. Dhaka-1000 Principal Banker Citibank NA. 122-124 Motijheel C/A. Bangladesh. Chamber Building.net Legal Adviser Dr. Dhaka Phone: [+8802] 9886450-2 Fax-[+8802] 9886449 E-mail-rrh@citechco. 8126665 Fax-[+8802] 9125682 Power Plants Goalpara. 4th Floor (Suite # 404) 31 Bir Uttam Shahid Ashfaqueus Samad Road (Previous 62-63) Motijheel C/A. Karwan Bazar C/A. Dhaka-1000. Dhaka-1000 Phone: +8802 9559602. Khalishpur Khulna Auditors Rahman Rahman Huq Chartered Accountants 9 Mohakhali C/A. Amin Court. +8802 9567726 Fax: +8802 9558330 45 . Dhaka 1215 Phone: [+8802] 9132437-8. 8125142. Motijheel C/A.Corporate directory Head Office Summit Centre (5th Floor) 18.

Safety is almost risk free like Government short-term obligations. In view of better operating efficiency the revenue of the company reached to Tk.0 RATIONALE Entity Rating: Long Term: AA Short Term: ST-1 Outlook: Stable Rating based on financials of 1H 2009 CRISL has assigned “AA” (pronounced as double A ) rating in the Long Term and “ST-1” rating in the Short Term to Khulna Power Company Ltd. satisfactory profitability. 2009 1. 5.52 million in FY2008 and Tk. these rating will not carry any validity unless the company goes for rating surveillance. KHULNA POWER COMPANY LTD. Moreover. The above ratings have been done on the basis of its good fundamentals such as sound equity based capital structure. 2. KPCL has been operating with comfortable financial profile including good profitability and sustained stability in revenue. net profit reached to Tk. which was Tk.66% in 2007 and 79. However. government guarantee against power purchase. high quality plant. Segunbagicha. the ratings are constrained to some extent by full dependency on O&M operator’s performance.05% in 2008. Hasan Mahmood Raja EQUITY Tk.42 million in FY2008 and Tk. ‘Summit’ and ‘United’ (shareholders of KPCL) has good exposures to run different power plants having more than 200 MW capacity under own management. Structured Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) ensures payment for at least 50% deemed generation. The short term rating indicates highest certainly of timely payment. growing demand for power in the economy and KPCL’s long term power purchase agreement with government depicts low offtake risk for the producer. 6/1A. dependency on imported raw materials. KPCL has consistently achieved better operational performance over the years i. 1997 BOARD CHAIRPERSON Mr.698. CRISL also viewed the company with “Stable” outlook and believes that KPCL will be able to maintain its good fundamentals in FY2009 also.org This is a credit rating report as per the provisions of the Credit Rating Companies Rules 1996.18 million in FY2007. government supportive policies for power sector etc. KPCL is yet to develop core competency and is presently fully depends on O&M operator’s performance.993.com Analysts: Akram H Siblee siblee@crislbd. tariff rate fixed by government etc. However. Long Term Entity Rating Outlook Date of Rating AA Stable Short Term ST-1 16 September.44% in 2006.495. (hereinafter referred “KPCL”) based on financials and other relevant quantitative and qualitative information.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. Muhammed Aziz Khan MANAGING DIRECTOR Mr.e. Dhaka-1000 Tel: 7173700-1 Fax: 88-02-9565783 Email: crisl@bdonline.21 million in FY2007. Entities rated in this category are adjudged to be of high quality. plant factor 89.27% in 1H of 2009. The sound equity base (74% contribution in total capital employed) with low financial leverage made its capital structure stronger. insignificant market risk on demand. Short-term liquidity including internal fund generation is very strong and access to alternative sources of fund is outstanding.86 million Page 1 of 15 . The Long Term and Short Term Ratings of the company are valid for one year and six months respectively.70 million in 1H of FY2009 (6 months operation). Chronic power deficits in the country. 2.32 million in 1H of FY2009 against Tk.160. low return compared to high capital intensiveness. High fuel prices put pressure on profitability as the company can realize about 90% of the fuel cost from BPDB. With the favour of stable oil prices in the international market and low financial expenses. 8. sound debt repayment background. 437. After the above periods. 309. 74. 272. REPORT: RR/287/09 Address: CRISL Nakshi Homes (4th Floor). 74. This level of rating indicates a corporate entity with sound credit profile and without significant problems. pass-through nature of its fuel costs under the tariff guidelines resulting a low fuel price risk for KPCL. PRINCIPAL ACTIVITY Electricity Generation INCORPORATED ON 15 October.org Suman K Kundu suman@crislbd. offer higher safety and have high credit quality. Risk factors are modest and may vary slightly from time to time because of economic conditions.

The Group is keen to invest in power sector. Through a public bidding process the consortium of Wartsila NSD Power Development (Asia) Ltd. With the inception of a small thermo-plastic moulding compound trading company “Sanguine Traders” in 1972.e. 2.949.e. (United) equally own 99. and United Enterprises & Co. KPCL is selling electricity to Bangladesh Power Development Board (BPDB) under PPA between the company and BPDB. Share capital of the group stood at Tk.. Muhammed Aziz Khan started his business career in a specialized business sector.0 CORPORATE PROFILE 110 MW Independent Power Producer 2. Out of the above companies. 21. The major sectors of the Group investment cover power generation.000 shares starting from 14 May 2010. (incorporated in Cayman Island) 6. shipping. 1998. Summit and United 10% each.90%. Rest 0.53 million. 1000 each on May 2008 to four private commercial banks. 18 Karwan Bazar C/A.26 million and net profit during the last period reached to Tk.085. At the end of 2008.) Ltd.000 preference shares of Tk. Dhaka-1215.) Ltd. are publicly listed with both the bourses of the country. However.2 Ownership Structure At present Summit Industrial & Mercantile Corporation (Pvt.10%.43 million outside liabilities. was awarded to establish this power plant in Khulna.1 Summit Group Summit Group is one of the leading investment and industrial business houses in Bangladesh.0 SHAREHOLDERS’ GROUP PROFILE 99.87 million against Tk. The sponsors of Summit Group are targeting the niche sectors of the country and abroad.0336% i. the second anniversary of the issue date.1 The Genesis Khulna Power Company Ltd. 5th Floor. (Summit) and United Enterprises & Co. 5. Summit Industrial & Mercantile Corporation (Pvt.. Liquefied Petroleum Gas (LPG) plant in gas starved area at Mongla. Under his direct leadership Summit Group has become a top tier business establishment within a short period of time and now owns more than 10 companies. Out of these shares. real estate. Two principal evaluation criteria of government were: early commissioning i. El Paso Khulna Power ApS (incorporated in Denmark) were holding 73. civil & hydro engineering. The plant started supply of electricity to the national grid from 13 October. construction. Liquid fuel fired with capacity of 110 Megawatts (MW). 2009 Wartsila sold their holdings equally to Summit and United. this barge-mounted power plant was set up to alleviate the severe power crisis as a faster track solution on short term basis. (KPCL) is an Independent Power Producer (IPP) established in 1997 under the Government initiatives for private power projects. 700 ordinary shares were transferred in favor of 14 individuals at 50 numbers of ‘Class-A’ shares each. .571. tanks terminal. which get different treatment in respect of dividend payment compared to ‘Class-A’ shares. 5. Mr. At the inception. 3. 2. Initially the company was started as private limited company and later in FY2009 converted into public limited company.100. Bagerhat. only Summit Power Limited and Summit Alliance Port Ltd. This has led to the establishment of a barge mounted power plant in Bangladesh namely Khulna Power Company Ltd. trading etc. in an Extraordinary General Meeting (EGM) passed and resolved that the existing category of Ordinary ‘Class A’ and ‘Class B’ shares shall be reclassified as ordinary shares. within 10 months of executing the Power Purchase Agreement (PPA) and the Implementation Agreement (IA) and dual fuel capability. EL Paso and in June. the asset base of the group stood at Tk. Other than ordinary shares.930 ‘Class A & B’ ordinary shares. Later in FY2008. KPCL has issued 1. By considering that gas burning large land based power project requires relatively long preparation and construction period. Container Freight Station in Chittagong etc. The company has planned to go public through direct listing during 2009.9664% of 2. 2009.807. the existing shareholders of the company on 19 July. Ltd. Summit and United each hold 3 ‘Class-B’ ordinary shares. Ltd. The corporate office is located at Summit Centre.720.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.97% shares owned by Summit and United group Page 2 of 15 3. which has been opened to private investment in Bangladesh. Wartsila Development & Financial Services (Asia) Ltd. container depots. El Paso determined share transfer package through a competitive bid and Summit and United as existing shareholder got the first priority to take the package. These preference shares are cumulative and redeemable in five annual installments of 220. 2.

e) Tariff invoices payable within 45 days of the delivery of invoices. E-cash ATM Card Networking System. d) Allows KPCL to source its own fuel supply.395. 4. 60 km Coastal Embankment Rehabilitation Project financed by the World Bank. Runway Overlay Project at Zia International Airport. plus taxes. Broadcasting and Communication. Over the years.2 United Group The United Group is a known name in the business arena of the country. Generators are featured with low NOx and dual fuel capability. 5. land port management services at Teknaf (ongoing) and others. The Group started its business career in 1978. Civil and Hydro Engineering. 3. 343. the Power Purchase Agreement between BPDB and KPCL plays a very important role. 4. shipped as deck cargo on a submersible dry tow ship. Education etc.913. Each barge is approximately 91 meters long and 24 meters wide.16 million liabilities. The riverbank project site provides easy access to fuel shipments by river and is located next to an existing electrical substation and transmission line. its obligations provided under the Implementation Agreement (IA). plus consequent termination payment liability to KPCL in respect of the O&M agreement and Fuel Supply Agreement.58 million. are moored in a closed basin. $/liter versus $/BTU). 99% of which is US$ indexed.482. Narshingdi and Comilla.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.5 MW capacities. Under the tariff structure. three 11 MW power plants in Ashulia. 4. b) BPDB is committed to a minimum guaranteed payment equivalent to 50% plant factor on a monthly basis. since HFO is sold by volume or mass. the asset base of the group stood at Tk. j) BPDB would pay liquidity damages to KPCL in the event of failure by the GOB to meet any of. The barges.1 Plant Location & Production Facilities The plant is located near the city of Khulna. During the last almost three decades of operation.18 million and net profit for the last period reached to Tk.3 Tariff Structure The PPA contains a two-part tariff: fuel tariff (“FT”) and other monthly tariff (“OMT”).0 PROJECT/PLANT DETAILS Plant located at near Khulna city 4. Polymer industries. Guaranteed payment for 50% of deemed generation Page 3 of 15 . Nine engines-generators are mounted on one barge and ten on the other. The PPA inter alia includes the following important provisions: a) The term of the contract is for 15 years from the date of commercial operations.e. The FT reflects the pass-through nature of fuel expenses to the extent that the plant operates at the specified heat rate.500 cubic meters each) and pumps to transfer heavy fuel oil to a buffer tank on either barge. Net worth of the group stood at Tk. At end of 2008. f) Payment security back-up in the form of Letter of Credit covering two months minimum tariff payments.35 million against Tk. Ltd. c) Two part monthly tariff structure: Fuel Tariff (FT). Land port Services. the Group has expanded its business in various sectors of the national economy such as Power Generation. with full cost pass through and Other Monthly Tariff (OMT). Real Estate Development. the Group has completed several large and unique projects that testify its strength and capability in project management. 10. 450 bed State -Of-The-Art hospital. h) Compensation amount on termination to cover 65% of the NPV of the minimum tariff payment for the remaining term of the PPA. with its Flagship company United Enterprises and Co. the fuel cost is calculated in terms of volume rather than energy content (i. The plant consists of two barge-mounted facilities housing of a total 19 Wartsila diesel engine generators of 6. The plant’s shore side auxiliary facilities include two Heavy Furnace Oil (HFO) storage tanks (7. g) The minimum tariff payment obligations continue through political and Force Majeure Events. 16.2 Main Features of PPA Considering the BPDB as the single buyer. Hospital and health care. Textiles. Such projects include the 110 MW barge mounted power plant in Khulna. i) KPCL is required to pay liquidated damages for lower output capacity and short supply of energy.

In the last one and half year’s natural gas production. However. Mr. 70%. Fuel Tariff & Other Monthly Tariff OMTs were quoted for 15 years at 50%. Aziz Khan is a renowned and pioneer business personality in private power sector of Bangladesh. After completion of MBA from Institute of Business Administration of Dhaka University in 1980. In response. and Mineral Resources (MEMR) monitors the overall power sector of the country through the Power Division and Power Cell. At present only 42. noncommercial sources of energy such as biomass are estimated to represent more than half of Bangladesh’s energy consumption. The Board members have sound exposures in the operation and technical aspect of the business. Mr. 95% of electricity comes from conventional thermal power (primarily natural gas) and the remaining 5 percent through hydroelectric power. several IPPs were set up after 1996. account for the payment to the Company for electricity produced on a per Kwh basis.e. Mr. the OMT used will be the same as that quoted for an 80% plant factor. In January 2006. Since much of the country is disconnected from the national electricity grid. Recent move of the Government to increase the tariff rate of gas supply is a major concern to the private power producers. it failed to generate about 850MW and for maintenance and overhauling of plants another 323 MW power could not be generated.69 kilowatthours (kwh) in 2006.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. He is also the chairman of Summit Power Limited. is the Chairman of the company. the government issued the "Private Sector Power Generation Policy of Bangladesh" in 1996 and began to invited proposals from Independent Power Producers (IPPs) in the private sector in order to ease the country’s electricity supply shortage. the private power producers are still in hesitation due to the tariff policy regarding gas supply and power sale etc.1 Board of Directors The Board of KPCL consists of fourteen directors. which is supported by the ADB’s Power Sector Development Program (PSDP) initiated in 2003. and 80% plant factors. 5. The country has an active rural electrification program. yet the power sector did not grow as per requirement and gas sector failed to explore its resources and developed its reserve. since they are involved in diversified business for a long. or about 64% percent of the total installed capacity. Per capita Electricity in Bangladesh is one of the lowest in the world. Hasan Mahmood Raja nominated from United acts as Managing Director of the company. although both the sectors remain dominated by state-owned entities." which encourages development of small local generation projects of up to 10-MW in capacity in underserved areas. At plant factors above 80%. he sponsored the Summit Group. PDB viewed that.Member Board Page 4 of 15 6. Bangladesh’s first coal-fired power plant began commercial production at the 250-MW Barapukuria facility in Parbotipur. Given the poor state-run electricity infrastructure. Since natural gas dominates our power sector in Bangladesh. for gas supply shortage alone.09% percent of the population has access to electricity. the first company in the private sector to go public. 2001) offers attractive incentive packages to IPPs including exemption from income tax for 15 years. 6. the Government also adopted a policy of "Small Power Generation Policy.0 INDUSTRY OVERVIEW The Ministry of Power. 60%. primarily in the more developed eastern zone of the country. Generation and distribution activities have been opened to foreign and private sector. Muhammed Aziz Khan. Side by side with the large IPP projects. Over the last several years although the demand of power and gas grew in geometric progression.0 CORPORATE GOVERNANCE 14. Energy. and together with FT. According to Power Cell. at about 169. transmission and supply situation has deteriorated. Two part tariff i. . nominated from Summit. The Private Sector Power Generation Policy of 1996 (Amended a few clause in September 11. the Bangladesh Power Development Board (BPDB) generated 3400 MW of the country’s 5245 MW of total commercial electricity.

There are also about 200 hand-held fire extinguishers which include foam.05 per MWh during Page 5 of 15 . A guarantee agreement between the company and Ministry of Energy and Mineral Resources (MEMR) also ensures the company regarding the payment obligations of the BPDB in the event of a breach. increased cost of replacement payable. The operator is responsible for the activities necessary to operate the plant except fuel purchase. Md. the engine supplier and previous shareholder of the company. The Khulna power plant has been identified as a Key Point Installation (KPI) by the government of Bangladesh. It has established 42 fire hydrant points covering the key areas.e. marine and non marine liabilities.000 for any month in certain circumstances. Mr. 7. provides leadership in implementing those objectives as well as supervises management of the company’s affairs.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. Army and private security can be utilized. which address all types of emergency that may arise in the plant. finance and company secretarial matters in multinational companies. sabotage and terrorism. under the present electricity situation it is highly probable that government will extend the agreement for the next tenure. KPCL is currently insured all risks packages including machinery breakdown. Summit and United group have been operating different power plants having about 200 MW capacity under own management. who are mainly for support services. Abdur Rahim. Operation & Maintenance is totally outsourced from Wartsilla. default or non-performance of BPDB under the PPA. Under the supervision of the Board. He is also Chairman and Managing Director of United. 6. shipping. The operator shall invoice at variable cost of US$ 5. switchgear room and HFO separator room). the Project Director and Mr. KPCL an independent power producer operates under a 15-year PPA with BPDB. It will also employ and be responsible for all operating personnel. a professional accountant having 22 year of service experience in the field of accounts. Wartsila. The Board formulated strategic objectives and policies for the company. Small management team Operation outsourced form Wartsilla 7. powder and CO2 types. Though the tenure of existing PPA expires on 2013. the supplier of the engines. The existing personnel of the operator can be retained by KPCL. Abdur Rahim. Financial Controller and Company Secretary. The O&M costs include a fixed fee usually of US$ 144. the corporate management team and human resource size of the company is very small. Managing Director looks after the overall operational activities as per the delegation of power and in accordance with the Memorandum and Articles of Association. the plant Operator has taken adequate protection measures to protect the plant. Mr. The corporate management team is headed by Mr. The Operator also established an Emergency Response Plan. the Managing Director of the company. 6. After the expiry O&M agreement in 2013.2 Operating and Maintenance Risk KPCL has signed a 15-year O&M agreement with Wartsila. The company formulated structured ‘Employment Policy’ stating the benefits and privileges entitled by the employees.000 per month prorated for partial months. business interruption. however. Managing Director is aided by Mr. Fuel is independently sourced from Singapore by KPCL and cost of fuel passed through to the BPDB. it may extend to US$ 179. dockyard and power sector. a marine engineer having about 40 years experiences in steel.3 Business Strategy As mentioned earlier. 28 CO2 flooding fixed installation for T1 & T3 (for control room.0 RISK MANAGEMENT Plant is adequately protected 7. Md. Moreover. Mr. It will determine the needed spare parts and supplies and will provide all services necessary to obtain the parts and supplies. Aminur Rahman. a leading supplier of flexible power plants worldwide. Hasan Mahmood Raja. Total human resource stood at 10. Raja was the leading sponsor of the United Group.2 Corporate Management and Human Resources As the core operation of KPCL is completely outsourced from ‘Operation & Maintenance operator’ i. Hence services of the Bangladesh Rifles. KPCL thinks to take over the O&M under own management. Aminur Rahman FCA.1 Plant Protection and Risk Mitigation Wartsila.

3 Counter Party Risk Bangladesh Power Development Board (BPDB) is the only purchaser of electricity from the KPCL.985 74.600 705. 8. KPCL imports fuel on its own account i.70 87.840 416. the OMT portion of the tariff generates sufficient revenues till present period to absorb the price escalation risk.68 80. There has been no dispute with BPDB regarding meter readings or invoice amounts.05 10. . The operator guarantees an annual availability rate for the plant at 85%.985 MWh of energy in FY2007 whereas licensed capacity was 963. In last 12 months.6 Supplies Risk KPCL has formal Fuel Supply Agreement (FSA) with United Summit Coastal Oil Ltd.86 2006 963.301 89.222 79.60 No counter party risk due to huge power shortage Minimum Foreign Exchange Risk Exposes fuel price escalation risk Low supplies risk Indicators Better Operational Performance Licensed Capacity (MWh) [110] Energy Generation (MWh) Net Energy Output (MWh) Plant Factor (%) Economic Efficiency (TK/MWh) Operational Efficiency (%) * 6 Months operation (January – June) Page 6 of 15 KPCL has dispatched 693. full responsibility bestowed on KPCL. FOB cost differential risk.544 74.4 Foreign Exchange Risk KPCL faces minimum foreign exchange risk. the company received payment on an average 10 days ahead of due date. Variable cost will be subject to annual adjustment in certain circumstances.600 MWh in both of the periods.20 2007 963.051.6 per MWh when capacity factor is between 30% and 60%.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. storage. payment security is backed by Letter of Credit covering two months of minimum tariff payments (and a Government of Bangladesh Guarantee). 7.544 MWh of energy to national grid during FY2008 against 718. Low Maintenance Risk the months when capacity factor is below 30% or above 60% and US$ 4. freight. According to the agreement BPDB will pay all the net electricity output delivered to the grid system from the plant with commitment to a minimum purchase equivalent to 50% plant factor on a monthly basis.65 75. KUO Oil (Singapore) PTE LTD. As the plant may not be running at that specified rate due to variation in fuel quality. At present KPCL does not seem counter party risk. (USCOL). The PPA provides exchange rate protection with the pass-through fuel cost and 99% of OMT (Other Monthly Tariff) indexed to the exchange rate as applicable on the date of credit equivalent US dollars in the company’s account. 7.16 73. 7. because the country faces huge power shortage.600 730.44 7.653 764.000 and vice versa.267. USCOL acts only onshore (Bangladesh) in connection with the portion of services of unloading. For each percentage below up to a maximum of 13% the operator will pay KPCL US$15. KPCL faces low supply risk as it can import fuel from any commercially viable supplier and MOPS (Mean of Platts Singapore) indexed fuel costs pass through to BPDB.21 2008 963.600 776. transportation and delivery to the discharge port. 7.5 Fuel Price Escalation Risk The pass through of the fuel cost under the PPA is limited to the fuel cost if the plant was running at the heat rate as specified in the PPA.707 410. The company receives revenue almost fully in US dollars. As additional.e.000 per event and extraordinary expenses for additional work.66 7. a sister concern of Summit and United for only inland carrier. a foreign company.866. supervision of loading). Tariff invoice is payable within 45 days of the delivery of invoice.27 6. Presently there is no foreign currency denominated loan amount. KPCL is responsible for unplanned maintenance in excess of US$100. inspection.384 693. commercially agreed to render the offshore services (such as procurement.419.0 BUSINESS PERFORMANCE *1H 2009 477.987 718. the extra fuel cost will not be passed through and there is a risk that earnings will be affected by extra cost especially in the period of higher fuel prices in the international market However.

Net profit stood at Tk.644 per MT) and 2007 (Tk.05% in FY2008 against 74.44 12. However.66% in FY2007. The company enjoys exemption from tax on income for 15 years from the date of its commercial operation. FY2009 substantially increased from irregular income from EL Paso’s (a previous equity partner) term loan waiver (Tk. Operational Efficiency (energy output to potential output at 100% capacity) also improved in 1H of FY2009 at 87. Cost per MWh of Tk. 23.61 352 2008 4.51 million during 1H of FY2009 against Tk.69 7.16 in FY2008 and Tk. both annualized ROAE and ROACE increased substantially to 35. significant trade debtors and huge raw materials inventory induced to reduce the return on assets.88 6.48 10.23 4.76 5.051.87% and 25. During first half of FY2009.301 MWh against 477.65 in FY2007. Due to fall in net profit by 11.21% from 73. 272. 91. PDB reimburses the fuel cost as per specified quantity of fuel per MW electricity generated. net profit of 1H.25% increase in equity reduced Return on Average Equity (ROAE) to 9.54 7.866.52 35. which were more acute during 2008 (Tk.70 in 1H of FY2009 was lower than Tk.18 million in FY2007.48 million) and reduced financial expenses. By nature power generation industry is very capital intensive. moreover.55 12.58 6. 352 (annualized) at end of 1H of FY2009 against Tk. due to different configuration of engines than specified in PPA.1 FINANCIAL PERFORMANCE Profitability *1H 09 17. Page 7 of 15 .76% at YE2008 and 4.34 88 2007 4. 10.07 5.80 5.267. 309.25 5.81 7. Though total amount of capital employed decreased. 9.840 MWh of installed capacity.66 102 Indicators Sound profitable company Return on Average Assets (ROAA)% Return on Average Equity (ROAE)% Return on Average Capital Employed % Gross Profit Margin% Operating Profit Margin% Net Profit Margin% Earning Per Share(Tk.16% respectively.99% at YE2008 from 7. The profitability is highly influenced by the fuel tariff.27% in 1H of FY2009 and 74.1000) * First Half growth of FY2009 has been annualized KPCL is a highly profitable company and the profitability indicators were stable over the last few years. net energy dispatched was 410.81% at YE2007. 7. 1000 stood at Tk. According to PPA.87 24. The Earning Per Share (EPS) of Tk.01 8. 44. Other than influence of fuel price.32 3. 437. Consequently KPCL can realize about 90% of fuel cost from BPDB and rest 10% put pressure on profitability. While analyzing profitability.58% at YE2008 from 9.70 14. 6.76 11.76 9. However.78% at YE2007. 88 at YE2008. Volatility of oil price in international market was the prime reason of volatility in ratio of economic efficiency over the periods.30% at YE2007.52 million in FY2008 and Tk.99 6. at end of 1H of FY2009.80% and 4. Return on Average Asset (ROAA) has substantially increased to 17. the Return on Average Capital Employed (ROACE) declined further to 6.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.78 9.00 8.996 per MT) when fuel price was sky high than 1H of FY2009 (Tk.52% (annualized) at end of 1H of FY2009 from 4.30 9. The plant factor stood at 89.733 per MT).20% in FY2008 and 75.0 9. In terms of Economic Efficiency (production cost to energy output) the company has improved its performance over last period.30 8. which is volatile in the international market. 26. the burn rate of fuel per MW is higher.86% in FY2007.06 110 2005 4.43 141 2006 4.

31 1.86% in 1H of FY2009. As mentioned earlier.75 2. The cumulative preference shares are redeemable in five annual installments starting from 14 May.05% in 1H of FY2009 against 0. 10.52 at end of 1H of FY2009 against Tk. 2.0 LIQUIDITY AND FUND FLOW ANALYSIS 2008 1.45 Net Asset Value Per Share (Tk. The leverage ratio consists 0. The equity pie is composed of 83. these preference shares are long term liability.37% higher in FY2008 than FY2007. By considering its nature.84% in 1H of FY2009 than FY2008. 9.58% paid up capital and 16. it was 84. 1141.62% at end of 1H of FY2009 against 11. 1000 share increased to Tk. Finance cost to revenue decreased to 0.78% in FY2007.19 times at YE2008.46 3.60 8 2007 1.46 1.05 Finance Cost to Revenue Ratio % 0. The internal capital generation was good and stood at 17. 11. the capital structure revealed that almost 74% of the net capital employed Tk.35 1585.24 8.85 million.88 9.21 * First Half growth of FY2009 has been annualized The cost efficiency (cost of goods sold to sales revenue) was improved in 1H of FY2009 though the ratio was very high in the last several years. outside liabilities stood at Tk. 3386.99 Quick Ratio (X) 0. 1200 million paid for FY2008 and FY2007 respectively as cash dividend.79 2006 1.78 2.59 million and Tk.46% in FY2007.93 0. 2010 at the second anniversary of the date of issue.19 Internal Capital Generation (%) 17.264. Tk.55 Improved cost efficiency Indicators *1H 09 Cost to Revenue Ratio (%) 87.68 1327.24 Administrative Exp to Revenue Ratio % 1. it was 65. Net asset value per TK.21% in 1H of FY2009 against 2. Other than Tk.e.13 2007 90.15 * First Half growth of FY2009 has been annualized Equity based company KPCL is a sound equity based company with good contribution from long term loan in the capital structure. Contribution of raw materials cost to cost of goods sold increased 90.13 2005 87.24% in 1H2009 against 93.06 0. 2.91 times as on 30 June 2009 against 1.52 1141.56% in FY2008 from 85.83 Cash Conversion Cycle 19 * First Half growth of FY2009 has been annualized . KPCL imports furnace oil from Singapore.26% in FY2007.60 2006 91.15 at YE2008.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. however.92 1. C&F of fuel is calculated as the five day (immediately and after 2 days of date of bill of lading) rolling average of MOPS (Mean of Platts Singapore). 208.18 8.13% in FY2008 and 2.18 Indicators *1H 09 2008 Leverage Ratio (X) 0. however. It stood at 87. It revealed that the price of heavy furnace oil decrease by 46. Early payment of IFC term loan and preference share’s dividend.52 11.13 0.39 million was financed by equity i.56 as short term gearing.75% in FY2008 and 1.00 18 2005 1.15 1. At end of 1H of FY2009.2 Cost Efficiency 2008 93.113.36 as long term gearing and 0.23 4. 1196. 1000) 1196.44 million preference dividend.93% in FY2008 and 90.60% in FY2007. high oil prices and freight charges in international market caused to high cost to revenue ratio.30 0.0 CAPITAL STRUCTURE AND LEVERAGE 2007 0.58 million representing the leverage ratio 0. which charged against retained earnings induced to improve the finance cost to revenue ratio in 1H of FY2009.45% at YE2008.52 2. Administrative expense to revenue ratio stood at 1. Against the above equity structure.54 1437.57 2005 1.82 4 2006 1.495.90 44 Page 8 of 15 Indicators *1H 09 Current Ratio (X) 0. Tk.42% retained earnings.

58 million had fully re-paid earlier in FY2008 from the proceeds of redeemable cumulative preference share of TK. the then two foreign sponsors i. Citibank NA. 293. On the over.26 3.e. KPCL enjoys funded limit of Tk.70 (i. 26.968 million for project loan.38 2005 1. 2.000 MT furnace oil in country for on an average 30 days production. it enjoys a large credit limit from different banks (BRAC Bank.e.10 times of debt coverage). As per agreement. 13% utilization of limit) as on 30 June. It is reflected by its liquidity ratio which stood at 0. Debt service coverage ratio stood at 14. Presently. Consequently. The balance i. the outstanding funded bank loan liability was Tk. The remaining balance of IFC loan of Tk. 1.e. 2009. With sound creditability.30 times at end of 1H of FY2009. Shahjalal Islami Bank and Standard Bank). 2009. 2002 $21.55 times in FY2008 due to no long term loan except preference shares in FY2009. In FY2008. 91.31 3. In term of interest coverage ratio. Analysis of the fund flow reveals that the company generated sufficient funds internally to service its debt burden and other liabilities also. out of the above limit. FY2008 and FY2007 respectively.87 million (1.539 million and in October. it revealed that with the company has been utilizing the revolving credit limits duly.06 times and 1. by considering redeemable preferred share as liability. Due to comparatively shorter receivable collection period and lengthy repayment of payables.26 times in FY2008. However. Supplier’s payment can be delayed upto 90 days as per L/C terms. El Paso and Wartsilla provided the amount as ‘Bridge Loan’ in the proportion of 85% and 15% respectively.45 million (1. the interest coverage ratio (including preferred dividend as fixed charge) stood at 4 times in 1H of FY2009.87 million (i. KPCL enjoys good financial flexibility to raise funds from different sources.11 times of debt coverage) and free operating cash flow of Tk 546.109 million and non-funded limit of Tk.22 * First Half growth of FY2009 has been annualized Sound debt servicing capacity Due to sound equity and legal backings. 1.0 FINANCIAL FLEXIBILITY AND SOLVENCY 2008 1.22 times in 1H of FY2009 against 3. due to some compliance fulfillment by KPCL. However. Foreign two sponsors’ loan was partially replaced by IFC loan and remaining amount of foreign sponsors’ loan treated as term loan.54 2006 1. Initially the company made agreement with IFC for $51. Tk.53 Interest Coverage Ratio (X) 87. Remaining balance of Wartsilla’s loan was fully repaid in March.44 4.539 million. 2009.99 times. However. 1999 IFC disbursed $22. liquidity position of the company always remains at modest level. Page 9 of 15 . 1.53 times in 1H of FY 2009 against 1. 316. 12. The cash generation of the company was good to serve the interest obligation against the revolving loan. 1.33 Indicators *1H 09 Debt Service Coverage Ratio (X) 14.e.35 3.48% utilization of the limit) and non funded liability was Tk. the company generated cash flow from operation of Tk 546.440 million as on 30 June. The credit sales/receivables backed by PPA realizable within 45 days induced to reduce average cash conversion cycle to 20-25 days.100 million. The above term loans were being repaid in semi-annual installments for a term of 9 years effective from 15 December 2002. Small cash conversion cycle KPCL is basically an import based (considering volume of raw materials) company requiring significant inventory (heavy furnace oil). While analyzing creditworthiness of the company. Pubali Bank. KPCL has to keep 11.98 million of El Paso loan was waived by El Paso under share transfer deal with Summit and United. IFC delayed to disburse the loan.55 2007 1. the earnings against the fixed cost burden was commendable to 87.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.120. Later in August. the liquidity cycle depends on as early as realization of receivables from BPDB.

the same was also produced in 2004-05. This wide gap between generation and demand is not solely for no new production but also lack of consistent expansion of transmission and distribution channels. Overall. Contents may be used by news media and researchers with due acknowledgement. All rights of this report are reserved by CRISL. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. CRISL does not guarantee the accuracy.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. The profitability. the power sector of Bangladesh falls in a disaster. whereas daily power generation stayed between 3300 MW to 3400 MW. solvency and efficiency of the company improved over the periods. adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. 13.0 CONCLUSION The power sector of Bangladesh has been passing through a critical stage due to many reasons including shortage of production compared to demand. KPCL as a power generation company runs successfully since its commercial operation.] Page 10 of 15 . per capita electricity generation or coverage of population under electricity not achieved as per Power Sector Master Plan (PSMP). END OF THE REPORT [Information used herein is obtained from sources believed to be accurate and reliable. Moreover acute shortage of natural gas makes volatile the power generation.0 Rating • • • • • • • OBSERVATION SUMMARY Comforts Sound equity base Sound debt repayment background High quality plant Satisfactory profitability Government guarantee against minimum power purchase No market risk regarding demand Government supportive policies Rating Concerns: • Fully dependent on O&M operator’s performance • Low return compared to high capital intensiveness • Dependency mainly on imported raw materials • Tariff rate fixed by government Business Challenges: • Volatility of oil international market • Dependency on technology Business Opportunities: • Government Incentives • Increasing demand for electricity prices in foreign 14. the demand of electricity reached to 5500 MW. However. Consequently. According to PBD. Good exposures of the entrepreneurs in power sector and government supportive policy help to maintain company’s present stability.

Ahmed Ismail Hossain Ms.93 3.) 2. Aminur Rahman FCA Managing Director Project Director Financial Controller & Company Secretary Capital History: Year Authorized Capital(M. 15. K. Moinuddin Hasan Rashid Auditor Rahman Rahman Huq Chartered Accountants Key Management Mr. Latif Khan Mr.93 2.0 CORPORATE INFORMATION : 15 October.085.93 2085. Subscribed and Paid-up Capital (M. 1997 13 October.93 2085.93 2. Abul Kalam Azad Mr. Muhammed Aziz Khan Mr. Ayesha Aziz Khan Mrs. Jafer Ummeed Khan Mr.Tk) 2085.085.085. Muhammad Farid Khan Mr. Ahsan Shamim Mr. Adeeba Aziz Khan Mr. Md.93 2.000.000.085. Anjuman Aziz Khan Mr.93 2085.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. Abdur Rahim Mr. 2009 Page 11 of 15 . Faridur Rahman Khan Ms. Akhter Mahmud Rana Mr.085. Hasan Mahmood Raja Mr.93 2.93 Rate of Increase Source of Paid-up Capital Cash Do Do Do Do Do 2004 2005 2006 2007 2008 30 June.085. Tk.00 3.00 Issued. 1998 Chairman Managing Director Director Director Director Director Director Director Director Director Director Director Director Director Date of Incorporation Commencement of Operation: Board of Directors Mr.93 2. Hasan Mahmood Raja Mr. Md.M.

19 --2.90 1.760.0 Financials Balance Sheet (As on 31 December) 1H 2009 Non-Current Assets: Property.69 6.03 Note: Above Financial statements are rearranged for analysis purpose Page 12 of 15 .41 --293.47 595.94 1.858.66 923.735.487. 16.985.93 88.38 --2.23 2.93 294.20 8.981.244.03 27.85 3.62 3.872.398.243.33 1.77 71.34 (12.28 (Amount in Million Taka) 2007 2006 2005 --3.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.39 102.31 208.185.01 312.18 89.10 --911.41 --1.21 48.425.49 8.386.22 --1.81 1.32 15.036.93 240.036.398.495.374.236.758.44 31.87 --386.30 --2.20 1.216.61 2.362.52 --250.58 4.49 --221.51 --3.02 --762.00 10.69 --880.565.99 4.768.085.314.174.70 5.74 2.28 3.40 4.51 181.00 620. Deposits & Prepayments Other Current Assets Cash & Bank Balances Total Current Assets Current Liabilities: Short Term Loan Long Term Loan-CP Trade Creditors Accrued Expenses & others Proposed Dividend Other ST Liabilities Total Current Liabilities Net Current Assets Net Assets Non-Current Liabilities: Long Term Loan/Preference Share Deferred Liabilities Other Non-Current Liabilities Total Non-Current Liabilities Shareholders' Equity: Share Capital Other Reserve Retained Earnings Total Shareholder's Equity Total Equity and LT Liabilities Total Assets 3.072. Plant & Equipment Other Non-Current Assets Total Non-Current Assets Current Assets: Inventories Trade Debtors Adv.07 6.882.54 --1.84 4.300.635.71 1.56 11.085.729.00 46.395.221.72 --316.65 2.64 342.07 6.65 1.03 1.231.53 1.77 5.90 726.60 259.11 429.31 --318.47 5.21 1.19 3.93 912.07 4.565.635.38 8.463.656.01 100.42 2008 3.222.01 7.89 10.580.04 --284.93 409.07 384.92 2.24 442.243.07 228.00 1.37 3.70 220.085.56 4.57 1.54 890.44 --2.00 27.463.55 147.49 3.73 1.41 2.73 885.085.532.858.998.00 30.45 1.02) 3.21 1.386.60 --2.93 1.11 --401.42 3.67 4.19 75.963.51 3.231.91 3.33 13.59 1.380.085.18 771.91 --945.300.526.41 21.88 1.44 2.079.39 4.307.78 1.730.

18 548.39 456.64 437.10 3.714.83 148.57 91.35 72.13 2.89 211.154.51 437.20 7.92 4.81 25.611.762.29 213.21 442.495.66 Sales Revenue COGS Excluding Depreciation Depreciation-Mfg Cost of Good Sold Gross Profit Salary & Allowances Depreciation-Administrative Other Administrative Expenses Profit from Operation Other Income Financial Cost Non Operating Income Non-Operating Exp.311.26 381.66 94.66 1.22 2.62 169. B.86 8.06 5.82 (Amount in Million Taka) 2007 2006 2005 5.61 17. Income Statement (for the year ended 31 December) 1H 2009 2008 8.25 350.698.43 193.18 309.11 9.517.97 434. Profit Before Tax Income Tax Profit After Tax 2.52 543.76 207.54 18.993.49 3.28 0.506.38 5.51 17.44 1.71 41.59 256.550.41 7.64 5.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD.160.16 5.51 495.55 20.52 272.78 272.82 1.19 5.42 7.41 434.23 75.48 6.90 240.19 256.24 Note: Above Financial statements are rearranged for analysis purpose Page 13 of 15 .19 529.91 5.77 3.664.941.243.22 5.24 240.52 4.18 1.70 2.21 4.43 309.79 6.5 173.79 79.04 197.

CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. BB. Overall quality may move up or down frequently within this category. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Continuance of this would depend upon favorable economic conditions or on some degree of external support. Entities rated in this category are adjudged to be of high quality. BBBTriple B (Moderate Safety) BB+.(Minus) sign to indicate that the issue is ranked at the bottom end of its generic rating category. BSingle B (Risky) CCC+.CC. Changing economic circumstances are unlikely to have any serious impact on this category of companies. ASingle A (Adequate Safety) BBB+. Entities might not have required financial flexibility to continue meeting obligations. offer highest safety and have highest credit quality. Entities rated in this category are adjudged to offer moderate degree of safety for timely repayment of financial obligations. Default Grade Entities rated in this category are adjudged to be either already in default or expected to be in default. BBDouble B (Inadequate Safety) B+. DEFINITION Note: For long-term ratings. Entities rated in this category are adjudged to be with high risk. continuance of timely repayment is subject to external support. nearest to risk free Government bonds and securities. offer higher safety and have high credit quality. B. AA. Entities rated in this category are adjudged to be with extremely speculative in timely repayment of financial obligations. AA(Double A) (High Safety) A+. Speculative Grade Entities rated in this category are adjudged to lack key protection factors. however. Risk factors are negligible and risk free.C. This level of rating indicates that a company is under-performing in some areas. which results in an inadequate safety. This level of rating indicates a company as below investment grade but deemed likely to meet obligations when due. BBB. Long-term ratings without any sign denote mid-levels of each group.C(Extremely Speculative) D (Default) Entities rated in this category are adjudged to be of best quality. Timely repayment of financial obligations is impaired by serious problems which the entity is faced with. Risk factors are more variable in periods of economic stress than those rated in the higher categories. Entities rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. Whilst an entity rated in this category might be currently meeting obligations in time through creating external liabilities. Page 14 of 15 . This level of rating indicates entities with very serious problems and unless external support is provided. CRISL assigns + (Positive) sign to indicate that the issue is ranked at the upper-end of its generic rating category and . This level of rating indicates a corporate entity with an adequate credit profile. they would be unable to meet financial obligations. CCDouble C (High Vulnerable) C+. Risks are modest and may vary slightly from time to time because of economic conditions. These entities are however considered to have the capability to overcome the above-mentioned limitations. Entities rated in this category are adjudged to be vulnerable and might fail to meet its repayments frequently or it may currently meeting obligations in time through creating external liabilities. A. CRISL RATING SCALES AND DEFINITIONS LONG-TERM RATINGS OF CORPORATE RATING Investment Grade AAA Triple A (Highest Safety) AA+. Entities rated in this category are adjudged to be very highly vulnerable. CCCTriple C (Vulnerable) CC+.CCC.

Although ongoing funding needs may enlarge total financing requirements. Risk factors are larger and subject to more variation. access to capital markets is good. Market access for liquidity and external support is uncertain. Speculative Grade Speculative investment characteristics. High Grade High certainty of timely payment. Liquidity is not sufficient to ensure discharging debt obligations.CREDIT RATING REPORT ON KHULNA POWER COMPANY LTD. Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding. Default Entity is in default or is likely to default in discharging its short-term obligations. Safety is almost like risk free Government short-term obligations. Risk factors are small. Operating factors and market access may be subject to a high degree of variation. Risk factors are very small. Liquidity factors and company fundamentals are sound. ST-1 ST-2 ST-3 ST-4 ST-5 ST-6 Page 15 of 15 . Moderate Grade Moderate liquidity and other protection factors qualify an entity to be in investment grade. Liquidity factors are strong and supported by good fundamental protection factors. SHORT-TERM RATINGS OF CORPORATE Highest Grade Highest certainty of timely payment. Good Grade Good certainty of timely payment.

In our opinion. 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. in our opinion. on a test basis. An audit also includes assessing the accounting principles used and significant estimates made by management. b) c) d) Dhaka. the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). The preparation of these financial statements is the responsibility of the company’s management. 20 February 2010 Sd/- Rahman Rahman Huq Chartered Accountants . the Securities and Exchange Rules 1987 and other applicable laws and regulations. proper books of account as required by law have been kept by the company so far as it appeared from our examination of these books. as well as evaluating the overall financial statement presentation. as at 31 December 2009 and the related profit and loss account. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). evidence supporting the amounts and disclosures in the financial statements. We believe that our audit provides a reasonable basis for our opinion. An audit includes examining. give a true and fair view of the state of the company’s affairs as at 31 December 2009 and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act 1994. the company’s balance sheet and profit and loss account dealt with by this report are in agreement with the books of account. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. We have audited the accompanying balance sheet of Khulna Power Company Ltd. statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes. and the expenditures incurred were for the purposes of the company's business.Auditors’ Report to the Shareholders of Khulna Power Company Ltd. Our responsibility is to express an independent opinion on these financial statements based on our audit.

100. Sd/Dhaka.940.640.883.915 1.691 40.209 558.787 The annexed notes 1 to 31 form an integral part of these financial statements.376 1.493.565. 20 February 2010 Rahman Rahman Huq .000 294.758.000.526.774 3.960 3.332 3.314.008.511 3.085.361.722.865.000 30.827 3.106 2008 Taka 3.908.780 85.437.004 1.930.865.195 10.673 100.000 668.185.195 3.911 2.net of current portion Deferred liability for gratuity and earned leave Total non-current liabilities Total equity and long term liabilities 12 15 10.133.777.135.Khulna Power Company Ltd.492.180 10.468.761.581.668 8.100.656.983 1.787 Notes Assets Property.332 981. deposits and prepayments Cash and cash equivalents Total current assets Accounts payable Working capital loan Term loan .208.899.652 885.048 284.276 762.000.000.100.276 3.548.314.364 13.000 1.335.106 74. plant and equipment (net) Total non-current assets Inventories Accounts receivable Other receivables Advances.891.476.284 1.728.470.085.283.827 Non-current liabilities Term loan .283.000 1. Sd/Managing Director Sd/Director Sd/Company Secretary As per our report of same date.911 3.084.104.422.462.518 1.472 1.486.307.480.033. Balance Sheet as at 31 December 2009 2009 Taka 3.current portion Accrued expenses and others Payable for interest and other financial charges Total current liabilities Net current asset Net assets employed Shareholders' equity Ordinary shares Redeemable cumulative class 'A' preference shares Retained earnings 4 5 6 7 8 9 10 11 12 13 14 14 2.854.565.270 387.180.889 14.924.773 102.307.892.463.588 2.516 701.314.463.605 12.891.133.497.

414 704.301) 674.862. Profit and Loss Account for the year ended 31 December 2009 Notes 2009 Taka 6.226) 3.500.959 4. 20 February 2010 Rahman Rahman Huq Chartered Accountants .745) 272.Khulna Power Company Ltd.078.155.345 (5.397 (61.483.605.909 (17. Sd/Dhaka.292 446.911.271) 91.327.481.174.893) 696. Sd/Managing Director Sd/Director Sd/Company Secretary As per our report of same date.085.431.477 9.836.044 2008 Taka 8.160.79 20 21 The annexed notes 1 to 31 form an integral part of these financial statements.393.664.472 (177.423.413.97 Operating revenues Operating expenses Gross profit General and administrative expenses Other income Exchange gain Result from operating activities Finance income Finance expenses Net financial expenses Net profit for the year Earning per share (EPS) 16 17 18 19 (64.784.817.217) (173.267.504.523.802) (8.290 2.048.385.584 2.118 (7.718.721) 495.214 0.496 8.

613 (1.593.214 294.000.100.854.000) 696.911 Balance as at 1 January 2008 Issued during the year Dividend paid for the year 2007 Net profit for the year Balance as at 31 December 2008 Preference stock dividend paid Dividend paid for the year 2008 Net profit for the year Balance as at 31 December 2009 .100.492.437.000 2.000.437.000.000) 696.214 3. Statement of Changes in Equity for the year ended 31 December 2009 Particulars Ordinary shares Taka 2.000 (1.930.085.584 3.827 (113.523.367.930.085.000) 272.000.437.000 1.500) (208.200.100.000 2.523.593.085.613 1.200.584 668.000.221.085.000 Retained earnings Taka 1.000 1.914.000 Redeemable cumulative class 'A' preference shares Taka 1.480.930.000.100.000) 272.844.422.307.500) (208.911 Total Taka 3.827 (113.Khulna Power Company Ltd.085.

914.534 2.408.155.783.611.525) (413.198 100.100.992 4.915.504.592) 683.000.500) (208.376 701.909 (31.000.584 (7.924. Cash flow from investing activities: Acquisition of property.343. Cash flow from operating activities: Collection from BPDB Cash paid to suppliers and employees Cash generated from operations Finance income received Interest and other financial charges paid Net cash provided by operating activities B. E.433 8.899.303.656.822) 771.092) 993.343.304.897.408 (5.376 (34. plant and equipment Dividend received from offshore overnight investment Net cash provided by investing activities C.894.096.696) 600. Net cash inflow/(outflow) for the year (A+B+C) Opening cash and cash equivalents Closing cash and cash equivalents (13.792) 970.649.316 9.236.527 6.118.571.749.200.588 (2.000) (1.048.Khulna Power Company Ltd.476 2008 Taka . F.220.104.237) 1. Cash flow from financing activities: Term loan IFC loans ('A' & 'B') Redeemable cumulative class 'A' preference shares Preference stock dividend paid Dividend paid Net cash used in financing activities D.003) 1.000 (1.317.472 (141.825) (670. plant and equipment Sale proceeds of property.972.866.588) (1.000) (335.525) (34.001.132.593.891.899.988) 546.212 100.437.299.196) (113. Cash Flow Statement for the year ended 31 December 2009 2009 Taka A.996 3.135.

000 preference shares of Tk. 18 Karwan Bazar C/A.000 were issued and fully paid up. 2.000.2 Nature of business The principal activity of the company is to set up a nominally rated 110 MW liquid fuelfired. the existing shareholders of the company passed and resolved that the existing category of ordinary class A and class B shares shall be reclassified as ordinary shares.000 each.000 preference shares. 000 each.000 divided into 2.085.000. 1. convertible to dual fuel-fired (liquid gas).000.085.100.000 each and 2. 5th floor.The plant came into operation on 13 October 1998.000 each. on 19 July 2009. (“the company”) was incorporated in Bangladesh on 15 October 1997 as a private limited company under the Companies Act 1994.1 Basis of preparation Statement of compliance The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). barge mounted power plant in Khulna. 1. Bangladesh. The original authorised capital of the company was Tk. The address of the company’s registered office is Summit Centre.1 Reporting entity Company profile Khulna Power Company Ltd. 1. to sell generated power to any legal entity and to acquire fuel required for such power generation from home and abroad. 2. the Companies Act 1994 and the Securities and Exchange Rules 1987. 1. Notes to the Financial Statements as at and for the year ended 31 December 2009 1. The company has converted into public limited company on 19 July 2009 . 1. On 8 January 2007 the authorised capital was increased to Tk. 5. . It was also decided that the face value of each ordinary shares be fixed at TK. 10 each instead of TK. Out of 2. Further.Khulna Power Company Ltd. Dhaka-1215.000. at an extra ordinary general meeting (EGM). 2. Bangladesh for generation of electricity.000. 1. 1. Since inception the company is supplying electricity to the national grid of Bangladesh through selling the same to Bangladesh Power Development Board (BPDB) under Power Purchase Agreement (PPA) between the company and BPDB.000 ordinary shares of Tk.000 divided into 3.930 ordinary shares of Tk.930.

. income and expenses.depreciation Note 5 .deferred liability for gratuity and earned leave Reporting period 2.3 Functional and presentational currency The financial statements (except notes 22 and 23. Exceptions are property. where the currency mentioned as USD for presentation purpose) are prepared in Bangladesh Taka (Taka/Tk/BDT).inventory valuation Note 13 .4 Use of estimates and judgements The preparation of financial statements in conformity with BAS and BFRS requires management to make judgements. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 2. Actual results may differ from these estimates. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements. liabilities.2.2 Basis of measurement The financial statements have been prepared on the historical cost basis. information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes: Note 4 . estimates and assumptions that affect the application of accounting policies and the reported amounts of assets. Estimates and underlying assumptions are reviewed on an ongoing basis. 2. In particular.5 The financial period of the Company covers one year from 1 January to 31 December. plant and equipment where foreign exchange gain or loss arising from foreign currency debts taken to finance the assets is adjusted against the value of the assets as per Companies Act 1994 .accrued expenses and others Note 15 . 3. which is the company's functional currency and have been rounded off to the nearest integer.

2.1 Recognition and measurement Items of property. however. The Effects of Changes in Foreign Exchange Rates .5 Depreciation Depreciation on power plant has been charged considering 30 years of useful life and residual value at 15%. 3. plant and equipment 3. BAS 21.3. in accordance with the Schedule XI Part I of the Companies Act 1994. Repair and maintenance costs are charged as expenses when incurred. not considered material by management. 3. while no depreciation is charged in the year of disposal.1 Property. however requires that such exchange gains/losses be recognised as income/expense in the relevant period.1.3 Subsequent costs The cost of replacing an item of property.1.1. Addition during the year is depreciated for full year irrespective of date of purchase. The difference arising from capitalisation of foreign exchange gain in accordance with the requirements of the Companies Act 1994 is. 3. plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. Adjustment of power plant during the year is the adjustment for foreign exchange loss or gain as stated in note 3.1. if any.1. plant and equipment (PPE) are measured at cost less accumulated depreciation and accumulated impairment losses. The estimated useful lives of assets are as follows: Power plant Vehicles Building and construction Furniture and fixtures Office equipment Office renovation 30 years 4 years 10 years 5 years 5 years 5 years . Cost includes expenditures that are directly attributable to the acquisition of the assets.4 Maintenance activities The company incurs maintenance costs for all of its major items of property.2 Capitalisation of foreign exchange gain or loss Foreign exchange difference arising from project debts foreign currency is adjusted against the value of the assets financed by such debt. plant and equipment are recognised in the profit or loss as incurred. The carrying amount of the replaced part is derecognised. The costs of the day to day servicing of property. plant and equipment. 3.1.

the company has a present legal or constructive obligation that can be estimated reliably. 3.2 Inventories Inventories are measured at cost. are made at the discretion of management. whichever comes earlier. as a result of past events.6 Retirements and disposals An asset is derecognised on disposal or when no future economic benefits are expected from its use.1. The cost of inventories is based on the first in first out principle. When inventories are used. The fuel tariff calculation formula as per PPA between the company and BPDB assures recovery of cost. the carrying amount of those inventories is recognised in the period in which the related revenue is recognised. and are recognised net within 'other income' in the profit and loss account.4 Trade receivables and bad debts Trade receivables are recognised at cost which is the fair value of the consideration given for them. if any. Provision for debts doubtful of recovery.3. . and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. 3. 3. and it is probable that an outflow of economic benefits will be required to settle the obligation.3 Cash and cash equivalents Cash and cash equivalents comprise cash in hand and cash at bank. Gains or losses arising from the retirement or disposal of an item of property.5 Provisions A provision is recognised on the balance sheet date if. 3. plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of the same.

requires balances resulting from transactions denominated in a foreign currency to be converted into Taka at the rate prevailing on the date of the transaction. Finance expenses comprise interest expense on borrowings and other finance related costs. are reviewed at each reporting date to determine whether there is any indication of impairment. other than inventories. 3. The lessor reserves the right to revise the rent after each period of five years and can increase the rent by a maximum of twenty percent for five years. Foreign exchange difference arising from all foreign currency transactions. No such indication of impairment has been raised to date. . are charged or credited to profit and loss account.6 Impairment The carrying amounts of the assets.9 Lease Lease payments under operating lease are recognised as expenses in profit and loss account on a straight line basis over the lease term. plant and equipment to be added or deducted from the value of the assets which were financed by such borrowings. then the assets' recoverable amount is estimated. are to be retranslated at the exchange rates prevailing on balance sheet date. The Effect of Changes in Foreign Exchange Rates. If any such indication exists. which requires all exchange differences arising from foreign currency borrowings for property. Foreign exchange difference arising from project debts is adjusted against the value of the assets financed by such debt.8 Foreign currency transactions BAS 21. denominated in foreign currencies. as provided in the Schedule XI Part I of the Companies Act 1994. 3. Interest income is recognised on accrual basis. 3. All borrowing costs are recognised in the profit and loss account when they accrue using the nominal interest rate stated in related loan agreements. quantum of which is determined by survey of meter reading.10 Finance income and expenses Finance income comprises interest income on funds invested.7 Revenue Revenue is recognised in the profit and loss account upon supply of electricity to BPDB.3. 3. All monetary assets and liabilities at balance sheet date. except for the project debts.

13 Deferred tax As there is considerable uncertainty with regard to the taxation of such companies after the expiry of the tax exemption period. 3. The company maintains a provident fund for all local employees. Although no valuation was done to quantify actuarial liabilities as per Bangladesh Accounting Standard 19 Employee Benefits for the year ended 31 December 2009.12 Provision for tax No provision for tax has been made in the accounts as the company is entitled to tax exemption for a period of 15 years with effect from commencement of commercial production. . The company operates an unfunded gratuity scheme. 3. a provision in respect of which is made periodically covering all permanent employees by applying period of employment to latest basic salary.14 Employee benefit schemes A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.11 Borrowing cost Borrowing costs are recognised as expenses in the period in which they are incurred unless capitalisation of such is allowed as an alternative under Bangladesh Accounting Standard 23 Borrowing Costs . which is a defined benefit scheme. This is a defined contribution scheme as per Bangladesh Accounting Standard 19 Employee Benefits.3. Bangladesh. The company has also a policy of earned leave encashment. an employee is allowed twenty one days earned leave for each completed twelve months of continuous service with a maximum accumulation of one hundred and five days. vide SRO no. management feels it is not possible to make a reasonable estimate of deferred tax assets/liabilities at this stage. 114-Law/99 dated 26 May 1999 issued by Government of Bangladesh. such valuation for only 9 employees is not likely to yield a result significantly different from the current provision. under private sector power generation policy. recognised by the National Board of Revenue. 3. Under this policy.

15. The Institute of Chartered Accountants of Bangladesh (ICAB) had made the following standards effective for accounting periods beginning on or after 1 January 2010. . Dividends paid under such arrangements will be accounted for as interest and charged to Profit and Loss Account.16 Cash flow statement Cash flow statement has been presented under direct method.3. 3.1 Basic earning per share Basic EPS is calculated by dividing the net profit or loss for the year attributable to ordinary shareholders by the number of ordinary shares outstanding during the year. 3. redeemable cumulative preference class ‘A’ shares will be treated as liability.15 Earnings per share The company presents basic earnings per share (EPS) data for ordinary shares. 3. (a)     BAS 32: Financial Instruments Presentation (b)     BAS 39: Financial Instruments: Recognition and Measurement (c)     BFRS 7: Financial Instruments: Disclosures Currently the company presents its redeemable cumulative class ‘A’ preference shares as an equity instrument and dividend paid on such preference shares has shown in Statement of Changes in Equity.17 New standards not yet adopted Bangladesh Accounting Standards 8 “Accounting policies: Changes in Accounting estimates and Errors” para 30 requires that an entity makes certain disclosures when it does not apply a new BAS/BFRS that has been issued but is not yet effective. However after adoption of above standards.

000 Depreciation Adjustment during the year** Taka (27.340. Property.330 33 3.740 (38.191.400 259.007.555 1.629.192.577 190.299.133.003 (380. Total depreciation has been allocated in the financial statements as follows: 2009 Taka Depreciation charged during the year Add: Adjustments made during the year Allocation of depreciation Operating expenses (power plant part after considering adjustment) General and administrative expenses (other than power plant) 190.833.276 *Addition of power plant is the cost of newly installed Alternator by replacing the old one.758 5.712.976.638 2.599.209) (72.340.689.240.00 8.494 Power plant Vehicles Building and construction Furniture and fixtures Office equipment Office renovation Total 2009 Total 2008 9.984.525 413.131.049 20.750.740 170.299.962.773 47.00 20.411 2008 Taka 170.689.017 170.460 1.358 5.911.588 155.130.4.564.938) - Addition during the year* Taka 30.770 5.409 (3.636 5.842.150.299.952 1.456 188.845 190.411 187.000) (27.956.590 5.895 1.038.566 2.842.292 18.590 5.199.557 1.347.552.464 2.304 1.932) 170.634.030) (27.1).517 - - 9.33 25.131.563 5.126.163 Carrying amount as at 31 December 2009 Taka 3.093.606 - - 9.384.758 5.403.346.133. This also includes adjustment for Alternator. **Adjustment arises from foreign exchange gain/loss during the year ended 31 December 2009 on conversion of foreign currency loans taken to finance the power plant (see note 3.405.536.118 3.477 .428.599.712 1.153.00 20.026.329) 190.938) (1.153.409 (72.093.996) (380.157.773 1.932) 1.522.343.303.000 Charge for the year Taka 188.606 10.657 Disposal during the year Taka - Balance as at 31 December 2009 Taka 5.124.388) 1.049 5.073.852.463.657 Rate % 3.571.332 3.159.307.552.939 610.00 1.000.000.283. plant and equipment Cost Particulars Balance as at 1 January 2009 Taka 5.911.073.462 1.384.383 2.136.163 Disposal during the year Taka - Adjustment during the year** Taka (27.428.299.750 34.000.000) (380.516.000) (3.477 169.00 Balance as at 1 January 2009 Taka 1.132 1.150 1.984.126.209) - Balance as at 31 December 2009 Taka 1.557 1.925 3.672.346.

728.652 Spare parts inventory was acquired under a provision of the Engineering.561.926 Light furnace oil (LFO) 110.270 762.292 27.144.344 Spare parts for plant maintenance Total 2009 Total 2008 5.640.59 5.686 6.21 662.000 981.516.365.758.100 1.068 7.728.48 4.353.904.280.550 22.931.923.570 50. The provision called for the contractor to provide with safety spares on historical cost basis of USD 2.893 4.524. Procurement and Construction (EPC) contract.655.000 762.643.652 945.1 95.114. Inventories Particulars Balance as at 1 January 2009 Quantity Amount (MT) (Taka) Addition during the year Quantity Amount (MT) (Taka) Consumption during the year Quantity Amount (MT) (Taka) Balance as at 31 December 2009 Quantity Amount (MT) (Taka) Heavy furnace oil (HFO) 26.467.925. .103 5.000 (prevailing rate was 1 USD= BDT 47.868.000 1.155.00 3.000.5.690.284.143.741. In addition to above safety spares.790 4.344 95.229.758.88). the operator maintains usual maintenance spares at their cost against variable fees paid to them.435.32 882.630.116 177.518 87.360 173.

542 840. health.506 Prepayments: General insurance premium (fire.448 279.157 387.000 209.006 28.506 16.777.463 1.129 433. Accounts receivable 2009 Taka Other monthly tariff Fuel tariff 108. Advances. Others 16.605 2008 Taka 225.311 660.940.249.525.004 8.162 1.6.500 133. Other receivables BPDB (agreed charges paid to BIWTA) 12.000 89.342.006 24.375 634.673 .704 Deposits: Bangladesh Telephone & Telegraph Board Grameenphone Ltd.463 21. deposits and prepayments Advances: Car/motor cycle loan Bank guarantee for spare parts Padma/Jamuna Oil for HFO supply Dr.915 8.516 21. Kamal Hossain & Associates Other advances 114.548.497.000 89.008.881 1.357 885.493.497.668 7.008.881 56.915 8.530 400.528.004 12.500 129.000 69.224 1.358. fidelity. motor e 56.415.

814 1.518 3.727.101 617.014 45.033.9.035.770.135 4.957 2.702 667.105 13.922 1.588 100.376 3.542 825 18.313 794. Dutch Bangla Bank Ltd.029. . One Bank Ltd.715. 617.Handling commission Kuo Oil (S) Pte Ltd.540 701.106.135.645 701.422 10.969 27.954 100.032 1.900 307. Shahjalal Islami Bank Ltd. Bank Asia Ltd.434.736.954 99.400 441 463 5.706.313 75.104. The City Bank Ltd.410. NA (Operating account # 129039 -Taka) Citibank.781 83.048 . Standard Bank Ltd.900.050. Pubali Bank Ltd.116. Standard Chartered Bank Prime Bank Ltd.(O&M) 114.899.884 6.552 130. STD account: BRAC Bank Ltd. .400.Fuel cost USCOL .263.715.486.650 1.419.625.691 22.867 414 1.553 314. NA (Operating account # 129024 -Taka) Citibank. NA (Operating account -US Dollar) AB Bank Ltd.714 97. BRAC Bank Ltd.931 100.519 87.742 46. Cash and cash equivalents 2009 Taka Cash in hand Cash at bank: Current account: Citibank.260 182.314.100.675 140.081 79.821 85.943 2008 Taka 183. Accounts payable Kuo Oil (S) Pte Ltd.823.Fuel carrying and storage Wartsila-operation and maintenance . Trust bank Ltd.533 1.

11. Working capital loan
2009 Taka BRAC Bank Ltd. Shahjalal Islami Bank Ltd. 2008 Taka 200,000,000 84,000,000 284,000,000

Collateral includes registered mortgages of vessels “TIGER I” and “TIGER II”, a registered letter of hypothecation by way of first priority fixed charge over plant, machinery and equipment, and a registered letter of hypothecation by way of first priority floating charge over all fixed and floating assets of the company.

12. Term loan
Term loans:
El Paso Power Khulna Holding Ltd.

-

91,878,000 13,897,544 105,775,544

Wartsila Development & Financial Services (Asia) Ltd.

Term loan from El Paso Power Khulna Holding Ltd. has been waived and considered as other income (net of exchange differences). See note 19.1 for more details.

13. Accrued expenses and others
Electricity, gas and water Legal, audit and other professional fees Office rent and service charges Lease rent payable-BPDB Telephone, fax and e-mail Employee expenses Provision for withholding tax/VAT for O & M fees, professional fees and others Wartsila - river intake dredging Falcon Securities Ltd - plant security Employees' provident fund Board meeting fees Kuo Oil (S) Pte Ltd. - Demurrage - Fuel (13.1) Others 75,078 620,000 131,075 3,167,709 88,239 3,098,149 16,806,155 140,000 215,469 96,460 15,458,537 579,647 40,476,518 85,000 881,000 109,240 3,541,814 80,000 1,307,757 6,429,070 150,000 216,251 101,875 212,500 356,382 13,470,889

13.1 Demurrage is claimed by Kue Oil(s) Pte Ltd. on behalf of shipping company due to unusual delay in unloading of Heavy Furnace Oil (HFO) at Chittagong Port in May 2009.

14. Share capital
2009 Taka Authorised: 3,000,000 ordinary shares of Tk 1,000 each 300,000,000 ordinary shares of Tk 10 each 2,000,000 preference shares of Tk 1,000 each 3,000,000,000 2,000,000,000 5,000,000,000 3,000,000,000 2,000,000,000 5,000,000,000 2008 Taka

Issued and paid-up: 2,085,924 ordinary Class A shares of Tk 1,000 each 6 ordinary Class B shares of Tk 1,000 each 208,593,000 ordinary shares of Tk 10 each 2,085,930,000 1,100,000 redeemable cumulative class 'A' preference shares of Tk 1,000 each 1,100,000,000 3,185,930,000 For split off details see note 14.1. The company issued 1,100,000 redeemable cumulative class 'A' preference shares in favour of The City Bank Ltd. (600,000 shares), Pubali Bank Limited (200,000 shares), One Bank Limited (200,000) shares) and Trust Bank Limited (100,000 shares) on 14 May 2008. These shares, under ordinary circumstances, are redeemable at par value in five annual equal instalments from 14 May 2010, the second anniversary of the issue date. Annual dividend on these preference shares is payable at the rate 8.25% (net of withholding tax). 2,085,924,000 6,000 1,100,000,000 3,185,930,000

14.1 The shareholding position of ordinary shares 2009
Face Name of shareholders % of shareholding Shares (No.) 104,261,500 value (Taka) 10 Total value (Taka) 1,042,615,000 % of shareholding 46.95% Class A shares (No.) 979,341 Class B shares (No.) 2

2008
Total shares (No.) 979,343 Face value (Taka) 1,000 Total value (Taka) 979,343,000

1. Summit Industrial & Mercantile
Corporation (Pvt.) Ltd. (incorporated in Bangladesh)

49.9832%

2. United Enterprises & Company Ltd.
(incorporated in Bangladesh)

49.9832% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% 0.0024% -

104,261,500 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 -

10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

1,042,615,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 -

46.95% 6.10%

979,341 127,242 -

2

979,343 -

1,000 1,000

979,343,000 127,244,000

3. Muhammed Aziz Khan 4. Anjuman Aziz Khan 5. Latif Khan 6. Muhammad Farid Khan 7. Jafer Ummeed Khan 8. Ayesha Aziz Khan 9. Adeeba Aziz Khan 10. Hasan Mahmood Raja 11. Ahmed Ismail Hossain 12. K.M. Ahsan Shamim 13. Akhter Mahmud Rana 14. Faridur Rahman Khan 15. Abul Kalam Azad 16. Moinuddin Hasan Rashid 17. Wartsila Development &
Financial Services (Asia) Ltd. (incorporated in Cayman Islands)

2

127,244

100.00%

208,593,000

2,085,930,000

100.00%

2,085,924

6

2,085,930

2,085,930,000

On 21 June 2009, the entire shares (Class A and Class B) of Wartsila Development & Financial Services (Asia) Ltd. has been transferred equally to Summit Industrial

000 . (Summit) and United Enterprises & Company Ltd.000 Total value Taka 600.000 each.000.000 200.000.000 1. the shareholding position of Summit and United was increased to 50.00 percent from 46.2 The shareholding position of redeemable cumulative class 'A' preference shares As at 31 Dec 2009 Name of shareholders Number of shares The City Bank Limited Pubali Bank Limited One Bank Limited Trust Bank Limited 600.000 100.000 200. The existing shareholders of the company on 19 July 2009. Further on 22 June 2009. in an Extraordinary General Meeting (EGM) passed and resolved that the existing category of Ordinary Class A and Class B shares shall be reclassified as ordinary shares.& Mercantile Corporation (Pvt. 1. Clause V of the Memorandum of Association and Article 6 of the Articles of Association of the company has been changed.000 1.100.000 Nominal value Taka 1.000 200.000.000.000.000 2008 Total value Taka 600.000.000 100. Accordingly.) Ltd.000.000 100.000.000 1.100.000.95 percent each. 14.000 1. As a result.10 each instead of existing Tk.000 1.000 200.000 200.000.000 1. Summit and United each have transferred 350 shares (total 700 shares) in favour of above 14 individuals.100. It was also decided that the face value of each ordinary shares shall be fixed at Tk. each getting 50 Class A ordinary shares.000 200. (United).

267.153 7.297 Total Taka 10.393.452.000 3.518 11.051.025 6.199.200 7.497 145.663.941 2.2 The price component of fuel tariff is comprised of the cost of fuel per KW of energy generated which is reimbursable from BPDB after making some adjustments as per agreement.930.771.080. the actual consumption shown in HFO inventory (note no.423.195 16.051 636.941.734.1 Other monthly tariff is the price component of all other costs including profit per KW of energy supplied at the delivery point excluding fuel.898 2008 Total Taka 11.118 2008 Taka 16.613.000.879.278 1. 16.721 *The above expenses arise after considering various fuel related expenses and adjustments which are not relevant with HFO inventory.420 3.410. Deferred liability for gratuity and earned leave 2009 Earned leave Taka 3.465 455.962.204.774 169.898 63.615 11.567 5.768 82.084 1.640 10. Operating expenses Consumption of Heavy Furnace Oil (HFO) and related expenses* Consumption of Light Furnace Oil (LFO) Fuel storage charges Operation and maintenance cost to operator Security service .210 50.780 Gratuity Taka Opening balance Add: Provision made during the year Less: Payment made during the year Closing balance 7.160.099.436 62.320 4.460 7.157.492.301 6. Operating revenues 2009 Taka Operating revenues comprise other monthly tariff and fuel tariff invoiced to BPDB: Other monthly tariff Fuel tariff 1.729 8.766.395 208.479 2.208.640 11.780 890.968.243.142 13.343.054.948 187.211 496.609.389 6.718.906 1. .496.208.817.731.789.982.393.200 10.156.868.891.387. 17.345 1.685.462 3.664.15.219.431.870.Plant Duty on spare parts Repair and maintenance -Plant Depreciation of power plant 4. That is why.344 828. 5) is not directly matchable with the above mentioned expenses.

000 864.627 999.355.130.078.BPDB (18.712 683.173 3.BERC Uniform and liveries Insurance premium Lease rent .400 828.172 554.000 12. During the year.712. subscription. 3.162 697.355.356. rental expenses under non-cancellable operating leases aggregated Tk. gift and donation Enlistment and annual licence fee .226 18.293).471 64.407 3.017 196.462 243.429 503.322 938.612 19.640 734.000 2.626 376.865 1.858 2. testing and inspection fees Company matter expenses Performance bond/bank guarantee charges Environmental compliance expenses Computer consumable and maintenance Expenses of MD and Directors River intake dredging Depreciation .373 86.186 375.799 507.293 (2008: Tk.786.466. books and periodicals Social goodwill Business promotion.480 121.271.1 Operating leases The company is obligated under non-cancellable lease for use of land leased out by BPDB that are renewable on a periodic basis at the option of both lessor and lessee.1) Directors' fees and board meeting expenses Audit fee Legal. publicity.998 3.620.153 62. The future minimum lease payments in respect of operating leases as at 31 December 2009 are as follows: Amount due: Not later than one year Later than one year but not later than five years Later than five years 3. press and seminar Entertainment expenses Bank charges and commission Printing.124 100.271 2008 Taka 17.396.268.736 124.920 41.400 2.226.545 .955 14.000 1.000 2.213 336.845 199. tax and other professional fees Survey.393.955 13.156 252.340 56.242. postage and stationery Travel and conveyance Vehicles fuel and maintenance Newspaper.960 150.610 214. General and administrative expenses 2009 Taka Salary and allowances Employer's contribution to P.012 81.528 459. plant and equipment Miscellaneous and incidental expenses 13.F.355.500 16.371 275.634 500.150 266.120.685 216.504.298 354.242.891.143 130.18.777 1. 3.844 454.582 20. Gratuity provision Earned leave provision Leave fare assistance Office rent and maintenance Telephone.050.293 152.191.459 7.822.Other property.566 375.558 1.200 (33.363 681.177 391.395.182 26.325 61.907 2.939 636. fax and e-mail Advertisement.039) 998.000 18.334.200 32.

The Company thus considered it as other income.Citibank. N. N.060 12. "A" loan provided by International Finance Corporation (IFC) "B" loan provided by International Finance Corporation (IFC) Working capital facility -Taka Preference share money deposit Others: Front end fee .89) has been waived . Other income 2009 Taka Dividend income Gain on sale of property.000 .working capital (club financing) Prepayment charge .174.483) 9.481. EL Paso Power Khulna Holdings Ltd. Term loan provided by Wartsila Development and Financial Services (Asia) Ltd. plant and equipment Income from El Paso's term loan waiver (Note 19.IFC A loan Front end fee .IFC B loan Arrangement and success fee .000 17. Escrow agency fees .496 19.276.19.564.IFC B loan CAP agreement fee .376 5.217 (9.267.714.IFC B loan Arrangement fee . on 25 May 2009 stating that the amount due to it by KPCL (equivalent USD 1.887.IFC B loan Trust agent fee . a company incorporated in the Cayman Islands.091.800 1.249 9.347..290 2008 Taka 2.459.919 24.A.695 33.307.Security & Facility Agent (preference shares) 2.504.415.496 25.408. Annual agency fee .911.375.A.1 El Paso Power Khulna Holding Ltd.760.000 45. 20.996 1.500 3.449 4.802 3.1) 91.951.483. has issued a letter to the Managing Director of Khulna Power Company Ltd.891 224.290 91.366 - 1.713 10. ceased to exist with effect from 30 September 2009.707 2.213.323.725 177.788.500.322.IFC A loan Prepayment charge .365.481.Citibank.267. Finance expenses Interest on: Term loan provided by El Paso Power Khulna Holding Ltd.060 5.996 7.

083.688 Coastal Fuji Oil.130 Legal service/Barge registration Quijano & Associates Consultancy services Legal service Consultancy Fee Passive analysis (air) Loan repayment with interest Loan repayment with interest RW Beck International Ltd.084 208.611 45.648.000 0.872 214.593.407.052 7. Remittance of foreign currency Purpose of payment Name of the recipient 2009 USD 748. New York Wartsila Finland OY CODAN Marine.392 2008 USD 40.714 6.21. Earnings per share (EPS) Basic earnings per share The computation of EPS is given below: a) Profit attributable to the ordinary shareholders b) Number of ordinary shares outstanding c) Earnings per share (EPS) Diluted earnings per share No diluted earnings per share is required to be calculated for the year as there was no scope for dilution during the year under review.100 3.593.199 1. IFC. Singapore Kuo Oil (s) Pte Ltd.081 - Insurance premium - 597. Chadbourne & Parke LLP Envirotech East Pvt Ltd.145.396. MAXXAM Analytics Inc.275 Trust agent fee Cash margin for import of spare parts on behalf of Wartsila Finland OY Insurance premium Citibank.659 15.503 7. Washington DC .776 208. 7.077 Operation and maintenance expense Purchase of fuel (HFO) Purchase of fuel (HFO) - 260.208. Singapore JLT Risk Solutions Asia Pte Ltd.000 2.624.172 - 13.79 201. Singapore Wartsila Finland OY 462.224 10.000 2.599 6.97 2009 Taka 2008 Taka 22. 582. Finland Ltd. Wartsila Development and Financial Services (Asia) Ltd.199 590 635 11. NA.

515 Other monthly tariff (99%) BPDB 24. N A Elpaso Energy International Thompson Hine LLP Fullbright & Jaworski.351.292 - Bank charge Bank Charges Legal service fee Legal service fee Legal service fee LC add confirmation charges LC add confirmation charges LC add confirmation charges Dividend payment Deferred interest for fuel L/C Citibank.398 10.Purpose of payment Name of the recipient 2009 USD 9.441 .913 2008 USD 20. Value of imports calculated on CIF basis 2009 Taka Heavy furnace oil (fuel) 3.940 949.874. Wartsila Dev. N A 23.102.000 149.000 3. Service Citibank.895 2008 Taka 5. Standard Bank Ltd. Pubali Bank Ltd.928 34. Receipts of foreign currency Nature of receipt Name of party 2009 USD 8. & Fin.798.606.021 1.226 2008 USD 712 1. LLP Franco & Franco BRAC Bank Ltd.922.500 33.

Key management personnel Temporary loan and dividend paid Directors fees Salary. storage and temporary loan Payable for interest - 9. office rent and dividend paid 84.887 Energy sold (MWh) 780. Subsidiary of shareholder Shareholder - 38.000 12.00 Energy generated (MWh) 792.306. Related party transactions Nature of transactions Name of party Relationship Transaction value (Taka) 2009 2008 292. project director and financial controller.118.429 Subsidiary of shareholder Service charge for other office facilities Repayment of loan.960.384 693.330 622.663 190. 26. the managing director did not receive any salary during the year under review.435.699. allowances and long term benefits Bonus 83.25. Capacity Licensed capacity Period January to December 2009 (MWh) 110 Installed capacity (MWh) 114 Plant factor (% on licensed capacity) Average 83.544 . payment of interest and dividend paid 747.50 705.000 Key management personnel includes managing director.506.437.708.331 Coastal Fuji Oil Subsidiary of parent company Fuel cost and handling commission Temporary loan - 648.342.908 Wartsila Development & Shareholder Financial Services (Asia) Ltd. Summit Corporation Subsidiary of shareholder Subsidiary of parent company Shareholder Fuel carrying.200 977.314 Summit Shipping Ltd.178 January to December 2008 110 114 Average 73.362 80.322.222 946.55 Maximum 102.738.000 7.401. 14. However. Summit Industrial & Mercantile Corporation (Pvt) Ltd.583 United Summit Coastal Oil Ltd.244 Board of Directors Key employees 82. El Paso Power Khulna Holding Ltd.000 United Enterprises & Company Ltd.000 2.980.00 Maximum 94.937 502.620 Temporary loan.150 1.225.709.

745 but no shipment is being made by the seller. Contingent liability There is no contingent liability as of 31 December 2009 for the company. Commitment for capital expenditure There is no other commitment for capital expenditure as of 31 December 2009 for the company except of an 'Alternator' for which procurement order was being initiated by the company amounting to Euro 287.2 There is no material event that has occurred after the balance sheet date to the date of issue of these financial statements.198. wherever considered necessary.004 20.640 13.2 Previous year's figures have been rearranged. General 31. .220.438.127.183 6.758 17. 31.217. which could affect the figures stated in the financial statements.172 28.275. 29. Post balance sheet event 30.1 The company has applied to Dhaka Stock Exchange and Chittagong Stock Exchange for the purpose of direct listing under the Direct Listing Regulations 2006 and the matter is in the process of approval. Salary and allowances Year wise break up of salary and allowances of the employees of the company for the since inception are as follows: Year 1998 (13 Oct to 31 Dec) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Amount (Taka) 973.1 During the year the company had nine permanent employees and their individual remuneration rate was not less than Tk 36.209 17. 30.517.839.27.000 per annum (2008: ten permanent employees).044 10.226.705 7.660.299 12.059 18.147 5. 30.180 6. 31. to conform to current year's presentation.822.

146.645 807.299.593.543.076.000 255.005 7.062.251 (9.057.739 20.101.81 704.939.200 325.400.479.172) 9.875) 5.938 1.700 325.638.357.521.659.947.851 32.982 3.275.597 14.285 1.505 18.218.173 190.901.523.556 1.692 14.500 3.404.364.170.326.733.828) 8.000 973.154 40.395.500 4.775.692 1.675.Khulna Power Company Ltd Projected Income Statement for the year ended 31 December 2009 Taka Revenue Fuel Tariff OMT Tariff Total Revenue Fuel expense Gross Margin Operating Expenses Operations and maintenance Other Operating expenses General & Administrative Expenses Operating insurance Depreciation and amortization Total other operating expenses Operating income (loss) Other (income) and expense Interest expenses & other financial charges Interest & Other (income) Exchange loss/(gain) Net profit before income tax Income tax Net profit after income tax Accumulated Profit brought forward Accumulated Profit before Preferred Dividend Dividend on 10.742.075 10.154.982.393.692 1.315.968.032.976 1.032.644 4.410.000 1.968.652.148.247.809 7.786.357.577.150.263 287.101.586 4.186.437.287.920.171.000.846.455.553.272.000 1.393.483.269.283 4.908.263 113.750.777.3125% Preference Share Proposed Dividend -Equity Shareholders' Accumulated Profit carried forward Earnings per share 496.448.304.933.345 34.838.371.392 8.809 3.548.488 1.346.009 892.774 38.089 799.320 6.555 7.956) 8.728) 8.000 527.689.786.617.000.750.879.627.614.349.006.302.919.962 (9.275 4.050 2.233.556.543.543 56.009 255.564.618 2.713.874 33.121.415 68.802 (101.148 1.763 417.393.466.606 1.571.417 2012 Taka 14.009.949.121.178 268.172 1.000 694.589.738 43.844.522.409.827 786.200 2010 Taka 7.444 2014 Taka 15.436 700.290 19.876 15.82 4.733.317 2.245 90.810.929 2.436 85.838.539.314 2013 Taka 14.997.029.772 113.437.168.019.996.290 287.351.880.726 (10.824.000.266.988 2.518.983.016.452 2.738 40.400.744 735.971) (2.215.287.763 1.134.589.846.056 677.263 1.618.251 892.152.347 614.794 (10.113.075.247 68.915 220.574.387.716.437.702.035.062.411.098.312.500 1. .552.245 220.200.661.631.432 4.122.512.617.062.690 1.938 1.617.516 39.793 (5.022.500 209.000.466.3125% Preference Shares Accumulated Profit after Preferred Dividend Redemption of 10.755.406.31 1.980.472 2.700 325.516.466 41.962.771.272 220.649.976.141.000.579 5.804.350.888.912.888.984.586.348.982 2.952.747 220.300 1.181 19.125 55.563 53.500 2.178.773 2.187 4.161.370.136.100 325.956.452.618.763 2.748.927 4.043.829.979.000 1.037.17 1.644 2.645.606 1.848 1.922.081.444.555 2.818 1.055.445.689.269.138 4.463 2011 Taka 13.317 15.011.927 7.941 57.718 34.100.414) 700.416 4.40 1.977 68.477 220.512.181.197.803.500 672.538.174.199.846 46.817.465.611.553.294.670 793.39 1.750.030.900 1.869.700 2.293 22.482 51.673 Note: Redemption of preference shares shall effective from May 2010.270.661.372.740.810.413.563.467.553 42.050 2.853 17.869.871.019.

387.694 9.218) 7.758.712.149.945.500 95.692.307.733.494 1.849.927 6.411.100.579.000.330 12/31/13 Taka 1.272 10.297.000 1.884 13.889.935.584.600.808.000 22.800.376.51 2.559.758.000 4.382.700.483.000 1.000 2.392.004 885.24 2.423.542.000 4.727.242 12/31/11 Taka 402.000 2.691.092 12.315.548 2.193.500.000 4.345 440.000 4.545 19.700.500 504.905.661.577.758.500 1.480 (2.632.000 660.000 2.972.555 5.533.758.000.000 Stockholders' Equity/Preference Share: Common Stock 2.000.635.300 660.000 1.774.290 287.692.592 23.500 504.982) 3.273 1.085.600.000 1.830) 8.262 12.294.905.461.992.700.000 590.416.886.558.433.000 880.582.600.740.3125% Redeemable Preference Shares 1.895.269.499.711.000.000.000 2.129 5.000.866.036 10.571 2.159.545 10.657.712.273 2.749.037.878 5.838.500 1.000.000 573.000 504.650.218) 7.387.000 1.000 540.272 11.572.235.500 - 5.852.523.551.060 10.126.000.000 1.734.000 527.111.036 13.158 12/31/10 Taka 196.971 13.000 2.142.712.23 2.930.682.274.000 Retained Earnings 255.000 3.066.323.721.858.043.375.953.000 4.560 9. Deposits & Prepaids Total Current Assets Fixed Assets: Property.052.022.000 95.249.200.300.000 25.682.000.020 11.533.384 12.000.859.300.000 556.000.460.043.000 973.323.700.551.000 10.93 .838.000 6.982 4.750 (2.000 25.000.471 29.884. Projected Balance Sheet 12/31/09 Taka Current Assets: Cash Accounts Receivable Other Receivable Fuel inventory Consumables Inventory Advances.237.218) (2. Plant and Equipment Less: Accumulated Depreciation Net Fixed Assets Total Assets Current Liabilities: Current portion of long term debt Accounts Payable Interest Payable & other financial charges Total Current Liabilities Long-Term Liabilities: Term Loan Total Long-Term Liabilities 701.700.497.600.000 4.889.249.256.000 3.000 4.047.860 (1.750.472 2.650.988.269 95.584.36 2.000 694.030 11.035.615.500.558 9.085.394.235.763 Total Liabilities & Stockholders' Equity/Pref Share Net asset value per share 5.496 9.758.000 Capital Redemption Reserve A/C Dividend (Incl.170.194.336.809 6.342 12.600.711.392.000 22.995.068.000.758.500.904.669.730.938 1.592 10.Khulna Power Company Ltd.860 (2.000 220.625.842 7.000 1.037.471 1.272 14.753.029.687.000.800.000 504.820.584.161.257.124.037.398 12.388.304.560 (2.209.783.067.121.600.808.000 2.000 608.454 9.711.912.36 2.000 4.066.617.677.030.269.445.640.542.390.386.393.000.588 2.042 12/31/14 Taka 2.465 2.579.100.618.274.940.763 Total Stockholders' Equity/Pref Sha 3.884 26.000 1.334 2.000.294.037.551.614.500 1. TDS) -Equity Shareholders' 417.385.730) 8.000 95.679.037.000 880.061.970.469 220.545 11.292 2.689.500.800.600.315.005 7.000 22.753.000.000 440.000 5.393.690 1.988 2.953.000 4.548.186.047.000 5.753.032.418.500.500 95.000 95.392.525 12/31/12 Taka 1.195 387.000.148.037.

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El Paso was obligated to dispose their share holding in KPCL to the other interested existing shareholders. The Government policy on utilization of energy has already been shifted to use of liquid fuel for generation of electricity. China. Wartsila was not interested to take all these huge exposure for their small shareholdings.5 1. their main object was to get rid of their power investment in this region. That KPCL plant is the least cost plant operated on liquid fuel.48 million) was waived as being a part of total purchase consideration package. before the full repayment of term loan. Accordingly disposed of their shareholding in KPCL to other existing sponsor shareholders. Therefore.e Summit Industrial & Mercantile Corporation (Pvt) Ltd. El Paso’s earnings from the power segment comparing to their credit exposure. Under the Members’ Agreement. and United Enterprises & Co.3 of the PPA has the clear provision for extension of duration of the PPA. it is the most flexible and capable to meet BPDB’s ever varying load demand. That for the reasons stated above the Government of Bangladesh is actively considering expansion the KPCL plant capacity by another 100 MW. Pakistan. the operation of the KPCL plant shall be continued for the years to come. El Paso had disposed of their share under special consideration. (“KPCL”) shall continue its operation on expiry of the current Power Purchase Agreement (“PPA”) with Bangladesh Power Development (“BPDB”) for the reasons:1. 93 . Under the Members Agreement. country risk and other financial involvement was insignificant. for dwindling natural gas production in the country. Accordingly. El Paso had withdrawn their investment from the power sector of this region. El Paso wanted to focus on their core business i. Gas exploration and pipeline network.322 million (Equivalent BDT 91. as a part of their corporate business strategy. 2. As per the Members Agreement. they had also sold out their power establishment in India. The outstanding balance of Term Loan amounting to USD 1. Moreover. Ltd. available for 363 days of the year and with its 19 generating units.e.17 million during the implementation of the project. That the plant operates on Furnace Oil. That the existing shortage in generation capacity of the country shall continue to exist much beyond the year 2013. 1. i. El Paso had offered their shareholding to Summit and United. when the tenure of the current PPA expires. decided to withdraw from the power sector of this region. in order to get rid of those obligations. as a part of its corporate business strategy. Apart from Bangladesh.6 Additional disclosure by the management as requested by CSE 1. El Paso. El Paso was obligated to shoulder about USD 40 million exposure required for the operation of the project. Phillipine and Korea.4 1. The loan was being repaid on 18 semi-annual installments. Wartsila was also required to provide corporate guarantee and other undertakings required for the working capital facilities and operation of the project. El Paso Corporation (“El Paso”) was the sponsor shareholder of Khulna Power Company Ltd. Therefore. rather wanted to focus on their O&M operation business and other business prospect with Summit and United and therefore offered their shareholding to the existing shareholders under special consideration.Additional disclosure by the management as requested by DSE Khulna Power Company Ltd.2 1. In the year 2008. That KPCL plant is the most reliable plant in the BPDB grid. As mentioned above.1 1.3 That Article 2. (“KPCL”) and provided Term Loan amounting to USD 44. accordingly the future power plants are being built based on liquid fuel operation. its apparent that the extension of the current PPA would be natural viable option for BPDB to minimize overall generation shortfall.

Road # 35 Gulshan -2. Dhanmondi. Dhaka-1212 10. 9. Road # 7 Dhaka Cantonment.81% 0. Ltd.80% 18. Dhaka % of Shareholding 16. 3. Dhaka House # 68. Dhaka-1212 10.12% 15. Road # 55 Gulshan -2. Dhaka Summit Centre (11th Floor) 18 Kawran Bazar.81% 15.02% 100% Summit Industrial & Mercantile Corporation (Pvt) Ltd. Road # 55 Gulshan -2.97% 5.81% 2. Road # 28 Gulshan. 4. 5. Uttara. Road # 32 Sector-7. Dhaka House # 5. 15. Dhaka House # 5. Road # 55 Gulshan -2.36% 5. Dhaka-1212 10.81% 15. Road # 55 Gulshan -2. Uttara. Dhaka 11. 7. Road # 7 Dhaka Cantonment. Dhaka 14/A Shaheed Sarani Road Dhaka Cantonment. 11. Road # 55 Gulshan -2. Dhaka-1212 10. Dhaka 14/A Shaheed Sarani Road Dhaka Cantonment.81% 2. 6. Dhaka House # 68. Dhaka Flat # N/4.47% 17. 10. Dhaka-1212 16.71% 1. Road # 32 Sector-7. Singapore-049317 House # 51. Azharul Hoque. Road # 55 Gulshan -2. 13. Road # 7 Dhaka Cantonment.71% 1.02% 2. Road # 55 Gulshan -2. Road # 55 Gulshan -2. 2. Dhaka-1212 10. Dhaka House # 68. Dhaka-1212 House # House # House # House # House # House # House # House # House # House # 10. Dhaka 14/A Shaheed Sarani Road Dhaka Cantonment. Road # 7 Dhaka Cantonment. United Enterprises & Company Ltd. Road # 55 Gulshan -2. Dhaka-1212 1/C.50% 0.28% 17.01% 2. Dhaka-1212 10. Road # 7 Dhaka Cantonment.Name and Address of the shareholder of Summit Industrial and Mercantile Corporation (Pvt) Ltd and United Enterprise & Co.61% 0.28% 1. 16.80% 0. 14. Uttara. 8.78% 4. % of Sl # Name Address Shareholding 1 2 3 4 5 6 7 8 9 10 11 Hasan Mahmood Raja Khandaker Moinul Ahsan Shamim Ahmed Ismail Hossain Akhter Mahmud Rana Hafeza Mahmood Shirin Ahmed Khaleda Ahsan Nasrin Mahmud Moinuddin Hasan Rashid Faridur Rahman Khan Abul Kalam Azad House # 10.83% 2. Dhaka-1212 10.10% 100% 94 . 12. Sl # 1. 17. Road # 4 House # 22. Road # 55 Gulshan -2.28% 17. Dhaka House # 68.80% 0.83% 3. Dhaka 14/A Shaheed Sarani Road Dhaka Cantonment.08% 5.02% 5. Dhaka House # 5. Collyer Quay # 14-01 The Arcade. Name Muhammed Aziz Khan Anjuman Aziz Khan Mohammad Farid Khan Ayesha Aziz Khan Adeeba Aziz Khan Azeeza Aziz Khan Sanadina Khan Salman Khan Jafer Ummeed Khan Transnational Electricity Inc Latif Khan Mohammad Faisal Karim Khan Fadiah Khaleda Khan Farhan Karim Khan Farhana Khaleda Khan Cosmopolitan Traders (Pvt) Ltd. Dhaka House # 68. Dhaka-1212 10. FCA Total: Address 14/A Shaheed Sarani Road Dhaka Cantonment. Road # 32 Sector-7.

Ltd. In order to have a full range of justification on the indicative price. (ref. 12) Information on “non-operating history” should be mentioned in Risk Factors.290 (equivalent to USD 1. 91.06 which is unusually high. the company has given some qualitative justifications in favor of their indicative price. (ref. page # 88) The risk on non-continuation of “Operation and Management Agreement” by “Wartsila” along with the management perceptions should be included in the risk factors as a separate point. other quantitative factors such as Price /Book Value (P/BV) multiple. (ref. page # 30). 11) The designated bank account (Escrow Account) number for collecting bid money from the bidders should be mentioned in ID. and United Enterprises & Co. iii) The company has considered market value of some companies which are not similar as per the nature of their businesses. This is presumably because the equity security with P/E exceeding 50 is too risky. page # 11) 14) “Break down of issue expenses” to be furnished in detail with figures (ref. As per the indicative price mentioned in the information document the P/E stands at 58. (ref. (ref. if any. 1999. 5) The indicative price which has been determined by the company is seemed to be high in consideration of the observations in serial (4) mentioned above. page # 39) 17) Aggregate amount of remuneration paid to all officers in the last accounting year should be furnished. page # 83) The per share price / consideration value at which the shares of El Paso (73.1%) in Khulna Power Company Ltd. should be provided in ID. having P/E in excess of 50. However. the investors are not presently allowed to use the security. as marginable securities and enjoy credit facility to purchase it under the Margin Rules. Only the market value of Summit Power Limited should be considered as similar share. 13) The latest development of the expansion plan with BPDB which was mentioned in the draft information document should be furnished. 6) 7) 8) 9) 10) In page# 84 in serial 21. 2010 to 2014 with the same P/E. 2009 with an average market P/E of 30. As per SEC’s Directive. 3) 4) i) ii) It would have been more rational if EBVPS could be calculated also on weighted average basis considering the financial statements for immediately preceding five years. along with their holding positions in the share capital in these respective companies and also their interest in other listed companies as sponsors/directors. have been acquired by Summit Industrial and Mercantile Corporation (Pvt) Ltd.365. the six months average price of which is Tk. Ltd should be disclosed in ID. In justifying the indicative price the company has considered the following quantitative factors: Earning Based Value Per Share (EBVPS) based on the last financial statement ended on December 31.9%) and Wartsila (6.65 mil should be provided in ID. page # 13) The names and addresses of shareholders of Summit Industrial and Mercantile Corporation (Pvt. 95 .(a). Dividend Discount Model etc.CSE’s observation for Direct listing of Khulna Power Company Limited 1) 2) The terms and conditions of El Paso’s term loan waiver resulting in an income of Tk. Earning Based Value Per Share (EBVPS) based on projected financial statements for the years ended December 31. The Net Asset Value (NAV) per share on the basis of discounted cash flow considering the discount factor should also be provided under the Projected Balance Sheet. detail calculation to arrive at the attributable profit (from net profit) to the ordinary shareholders amounting Tk 582.46 as mentioned in the ID. should also be provided for the interest of the investors. of shares to be offloaded by each of the shareholders should be furnished.89) should be mentioned in the Information Document (ID).322.) Ltd. and United Enterprises & Co. 129. 15) No.481. 16) Remuneration paid to top 10 executives should be furnished.

the words “five” and “three” in the first line should be consistent with the relevant information in the table. the content should not include future direction under the head “Declaration about Listing of Shares with the stock exchange(s)”. 27) In page # 39 in serial # 1 of point G. 26) In page # 31 in serial # F. 24) The words “which has been hosted at DSE & CSE Trading System” mentioned in serial # 2. page #39) 29) In serial # “d” of point H. 23) In page # 2. 1. Moreover. 96 . (page # 1) should be replaced by the words “The existing shareholders of the company shall offload”. (ref. the words “brothers & sisters” should also be included with the information provided in the bracket. profitability ratios and solvency ratios. (vi) (page # 2) should be omitted. any interest and facility enjoyed by a director is pecuniary or non-pecuniary etc. (ref.(16)(4)( c)” in place of “16(4)( c)”. page # 83) 19) The shares of the company which are intended to offload should be dematerialized as per relevant rules and regulations prior to commencement of trading. 20) The words “exchange does” in the 3rd line of the statement in the cover page of the ID should be replaced by the words “exchanges do”. 25) In serial # 3 (page # 3).18) Ratios in the information document should be furnished under the respective heads like liquidity ratios. should be provided under the head of “ certain relationships and related transactions with related parties”. 21) The web site addresses of CSE and DSE should be mentioned under the head of “Availability of Information Document”. the word “prospectus” should be replaced by the word “information document” and the words “or within 2 (two) years prior to that time” should be removed. of rule should be mentioned as “8. page # 39) KPCL Management’s perception regarding aforementioned observation of CSE All the relevant above mentioned observation are accommodated in the relevant sections of the Information Document (ID). the title of Anjuman Aziz Khan should be mentioned as “Mrs” in place of “Mr”. the reference no. operating ratios. (ref. 22) The words “The company shall offload” under the head of A. 28) Information regarding any loan either taken or given from or to any director or any person connected with the director.B.