Information Document

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1 If you have any queries about this document, you may consult issue manager or issuer. Information Document for Direct Listing of OCEAN CONTAINERS LIMITED Offloading of 11,900,000 Ordinary Shares of Tk.10 each Listing Approval Date CSE : 3 November, 2009 Listing Approval Date DSE : 22 February, 2010 Eligible institutional investors bidding on 22, 23 and 24 February 2010 Indicative Price for Book Building Purpose Tk Manager to the Issue ICB Capital Management Limited (A Subsidiary of ICB) BSB Building(14th Floor), 8, DIT Avenue, Dhaka-1000 Date of Information Document:10 February, 2010 The issue shall be placed in N category Entity Rating of Ocean Containers Limited by Credit Rating Information and Services Limited (CRISIL) Long Term : A+(A plus) Short Term : ST-2 Date of Rating : 17 th June 2009 Validity : One (1) year CONSENT OF THE DHAKA/CHITTAGONG STOCK EXCHANGE LIMITED HAS BEEN OBTAINED TO THE ISSUE/ OFFER OF THESE SECURITIES UNDER THE DHAKA/CHITTAGONG STOCK EXCHANGE (DIRECT LISTING) REGULATIONS, 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 SHARES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER AND/OR AUDITOR. THE MONEY (PROCEEDS) AGAINST SALE OF SHARES TRHOUGH THIS INFORMATION DOCUMENT WILL BELONG TO THE SPONSORS/ SHAREHOLDERS CONCERNED. THE COMPANY WILL NOT GET THIS MONEY. i

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3 Availability of Information Document Information Document of the Company may be available at the following addresses Company Contact Person Contact Number Ocean Containers Limited Summit Centre (7 th Floor) 18 Kawran Bazar C/A Dhaka-1215 Syed Fazlul Haque F C A Company Secretary Phone : Fax : & 4 sfhaque@oclbd.com Website : Issue Manager Contact Person Contact Number ICB Capital Management Ltd. BSB Building (14th Floor) 8 DIT Avenue, Dhaka-1000 Mr Md Abdur Rouf Chief Executive Officer Tel : , , EXT 196 ceocmcl@accesstel.net Website : Stock Exchanges Available at Contact Number Dhaka Stock Exchange Ltd. 9/F Motijheel C/A Dhaka-1000 DSE Library Phone : , Fax : dse@bol-online.com Website: Chittagong Stock Exchange Ltd. CSE Building 1080 Sheikh Mujib Road Chittagong CSE Library Phone : , Fax : cse@cse.com.bd Website: Information Document would also be available on the web site of SEC ( DSE ( CSE ( and and Public Reference Room of the Securities and Exchange Commission (SEC) for reading and studying. iii

4 Sl. No. Table of Contents Item Page No. A Disposal of Share 7 B Risk Factors and Management Perception 12 C Description of Business 14 Information about the Company Principal Products or Services of the Company Market for the Products or Services of the Company The relative contribution to sales and income of each product or service in case of more than one product or service Name of associates, subsidiary/related holding company and their core areas of business Distribution procedure of products or services Competitive conditions in the business Sources and availability of raw materials and the names of the principal suppliers Sources of, and requirement for, power, gas and water Names of customers who purchase 10% or more of the company s products Description of any contract which the Company has with its principal suppliers or customers Description of any material patents, trademarks, licenses or royalty agreements Number of total employees and number of full-time employees Production capacity and current utilization D Description of Property 17 Location of the principal plants and other property and the condition thereof Property owned by the company or taken on lease Mortgage or other type of lien on the property owned by the company Expiration date of the lease, if it is taken on lease E Plan of Operation and Discussion on Financial Conditions 21 Internal and external sources of cash Material commitments for capital expenditure and the expected sources of funds Causes of any material changes in income, cost of goods sold, other operating expenses and net income Seasonal Aspects Known trends, events or uncertainties Change in the assets used to pay off any liabilities Loans taken from the holding/subsidiary Company or loans given to those companies Future contractual liabilities iv

5 Sources of VAT, Income Tax, Customs Duty and Other Tax Liabilities yet to be paid Details of operating lease (if any) during last five years Last five years Financial Commitment including Lease Commitment Personnel related schemes to make provision in future years Break down of all expenses including fee of issue manager Revaluation of assets Last five years transactions between the issuer company and its subsidiary/holding Company Special report from the auditors regarding any allotment of shares to promoters or sponsors Material information having an impact on the affairs of the company Status of Loans F Directors and Officers 26 Name, age and position of all Directors, alternate Directors of the company Date of first becoming Director and date of expiry of current term Involvement of Directors with other companies Involvement of Directors with listed company in terms of dividend and category Family relationship among directors, alternate directors, nominees and officers Short bio-data of each director Holding of 5% or more shares in the paid-up capital by the directors or shareholders of the Issuer is loan defaulter in terms of the CIB report of the Bangladesh Bank Description of Senior executives and officers G Involvement of Officers and Directors in certain Legal Proceedings 32 H Certain Relationships And Related Transactions 32 Involvement of director or executive officer in the transaction with the issuer Involvement of any Director or Officer Involvement of any person in the transaction with the issuer owning 5% or more of the outstanding stock of the issuer Involvement of any family members of the above persons in the transaction with the issuer Involvement of any transaction between the issuing company and a director of the company or any of its subsidiary /holding company Loans taken from, or given to, any director or any person connected with the director Holding position of any director in any company, society, trust, organization or other firms Pecuniary or non-pecuniary interests and facilities enjoyed by a director I Executive Compensation 34 Name and designation with the amount of remuneration paid to the top ten salaried officers in the last accounting year Aggregate amount of remuneration paid to all officers and directors in the last accounting year Remuneration paid to any Director who was not an officer during the last accounting year v

6 Contract with any officer or director for the payment of future compensation Increment in the remuneration to the officers and directors of the company in the current year J Options granted to Officers, Directors and Employees 35 Options held by the three top salaried officers, each director and all other officers Options held by any persons other than the officers and directors K Transaction with Promoters 35 L Tangible assets per share 35 Net Tangible assets per share of the securities being offered M Ownership of the Company s Securities 36 Name and address of the persons owning 5% or more of the securities of the issuer Number of shares owned by the shareholders Number of shares owned by the top ten salaried officers, directors and all other officers N Description of Securities Outstanding or Being Offered 37 Dividend, voting and preemption rights of the shares outstanding or being offered Dividend, voting and 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 O Debt Securities 38 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 P Financial Statements 39 Auditors Report Financial Statements Selected Ratios Comparative income statements and balance sheet for immediate preceding five accounting years Q Financial Forecast 66 R Credit Rating Report 69 S Additional Disclosures 88 T half-yearly REPORT 91 vi

7 A. Disposal of Shares 1. Details of Offloading of Shares by the Existing Shareholders as per Regulation 5 of Chittagong Stock Exchange (Direct Listing) Regulations, 2006 The Shareholders of the Company offer to offload up to 11,900,000 ordinary shares of Tk.10 each with a minimum market lot of 100 (One hundred) shares following the Regulation 5 of Chittagong Stock Exchange (Direct Listing) Regulations, 2006, the Depository Act, 1999 and regulations issued there under: i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) As resolved in the meeting of Board of Directors, Ocean Containers Limited and also as per resolution taken in the EGM of Ocean Containers Limited, up to 50% of OCL s shares (i.e. 11,900,000 shares) to be sold to the general public/institutions at market price. The Information Document as per Annexure B, prescribed Format of Chittagong Stock Exchange (Direct Listing) Regulations, 2006, as vetted by 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 CSE along with an electronic copy for posting in the web page of CSE. The company shall simultaneously submit the vetted Information Document with all exhibits to SEC, to the Stock Exchanges where it intends to list its securities. The existing shareholders of the Company shall sell their shares through brokers of the Exchanges upon listing. No existing shareholders of the Company shall sell more than 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. The conditions stated in 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. 10% (ten percent) of the 50% (fifty percent) of shares intended to be offloaded, i.e., 1,190,000 shares shall be allocated/distributed to the eligible institutional bidders following the procedures prescribed for determining price under the book building method and the balance quantity i.e. 10,710,000 shares shall be available for general investors through normal trading system of the Stock Exchanges. 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. The existing shareholders (i.e. sponsors/directors) shall be restricted from buying the company s share until complete disposal of the targeted 50% shareholdings. The selling broker of the existing shareholders shall disclose through the Stock Exchanges the total number of shares sold everyday along with the cumulative quantity sold and the quantity of unsold shares until completion of sale of the said targeted 50% shareholdings. Normal Trade for general investors will begin two-day after transfer of the shares allocated to the eligible institutional bidders in completed. The following declaration is made by the Company in the Information Document, namely:-

8 Declaration about Listing of Shares with the Stock Exchange Applications have been made to the Chittagong Stock Exchanges for permission of the shares of the Company for dealing in the said Stock Exchange and for the quotation of the stock exchange. After fulfillment of all requirements by the Company, the Exchange 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 Exchange 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. 2. 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; ii) Eligible institutional investors bidding shall commence after getting consent from the Commission for this purpose; iii) If institutional quota is not cleared at 20% (twenty percent) below indicative price, the issue will be considered cancelled unless the floor price is further lowered within the face value of security: Provided that, the issuer s chance to lower the price shall not be more than once; iv) No institutional investor shall be allowed to quote for more than 10% (ten percent) of the total security offered for sale through book building method, subject to maximum of 5 (five) bids; v) Institutional bidding period will be 3 to 5 (three to five) working days which may be changed with the approval of the Commission; vi) The bidding will be handled through the uniform and integrated automated system of the stock exchanges which has been hosted at CSE Trading System; vii) The volume and value of bid at different prices will be displayed on the monitor of the said system without identifying the bidder; 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 clear the total number of securities being issued to them; 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; x) In case of failure to deposit remaining amount that is required to be paid by institutional bidders for full settlement of the security to be issued in their favor, 50% (fifty percent) of bid money deposited by them shall be forfeited by the Commission. The securities earmarked for the bidder who defaulted in making payment shall be added to the general investor quota.

9 3. Indicative Price for Book Building Purpose Based on Indicative Price Offers received from five Institutional Investors from amongst three groups of Institutional Investors referred to in rule 16(4)(c) of the Securities and Exchange Commission (Public Issue) Rules, 2006; the Indicative Price for Book Building Purpose is fixed, in consultation with the Issue Manger at Tk ( One Hundred Twenty One and Poisha Forty) only, as follows:- Sl No Offeror Category Indicative Offer 1 National Housing Finance And Investments Limited Financial Institution Eastland Insurance Company Limited Insurance Company Continental Insurance Limited Insurance Company Platinum Securities Limited Stock-dealer National Securities & Consultants Limited Stock-dealer Average The Indicative Price for Book Building Purpose is justified for the following reasons:- A. Earning Based Value Per Share (EBVPS) based on financial statements for the year ended 31 December 2008 A.1 Net Profit 109,910,509 A.2 Number of Shares 23,800,000 A.3 Earning Per Share (EPS) (A.1/A.2) 4.62 A.4 Market Price/Earning Ratio A.5 Earning Based Value Per Share (EBVPS) (A.3xA.4) B. Net Asset Value Per Share (NAVPS) based on financial statements for the year ended 31 December 2008 B.1 Net Asset Value 1,232,564,712 B.2 Number of Shares 23,800,000 B.3 Net Asset Value Per Share (NAVPS) (B.1/B.2) C. Market Value of Similar Share: C.1 Market Price of a Share of Summit Alliance Port Limited 2, C.2 In equivalent face value (C.1/10) D. Average Value Considering the Average Value and the fact that the Company is the oldest Off-Dock Container Port having well-known clients base and brand image, the indicative price is just and fair. 4. The Company has opened an Escrow Account, numbering , with Trust Bank Limited, Kawran Bazar Branch, for collecting bid money from the eligible institutional bidders under Book Building Method. 9

10 15 June 2009 The Board of Directors Chittagong Stock Exchange Limited Chittagong. UNDERTAKING We undertake, unconditionally, to abide by the Listing Regulations of the Chittagong Stock Exchange (Guarantee) Limited as well as other relevant securities laws which presently are, or hereinafter, may be in force. We further undertake: 1. That our Shares and Securities shall be quoted on the Ready Quotation board and / or the Cleared List at the discretion of the Exchange; 2. That the Exchange shall not be bound by our request to remove the Shares or Securities from the Ready Quotation and / or the Cleared List; 3. That the Exchange shall have the right, at any time to suspend or remove the said shares or securities for any reason which the Exchange considers sufficient in public interest; 4. That such provisions in the Articles of Association of our Company or in any declaration or agreement relating to any other security as are or otherwise not deemed by the Exchange to be on conformity with the Listing Regulations of the Exchange shall, upon being called upon by the Exchange, be amended to supersede the articles of association of our Company or the nominee relating to the other Securities to the extent indicated by the Exchange for purposes of amendment and we shall not raise any objection in relation to a direction by the Exchange for such amendment; and 5. That our Company and / or the Security may be de-listed by the Exchange in the event of non-compliance and breach of the Regulations and / or other relevant securities laws of this undertaking. Yours faithfully, Sd/- Muhammed Aziz Khan Chairman Ocean Containers Limited 10

11 STATEMENT REGARDING HOLDING OF ANNUAL GENERAL MEETINGS (AGMs) OF OCEAN CONTAINERS LIMITED No. of AGM Date of Holding of AGM Status 1 st Regular 2 nd Regular 3 rd Regular 4 th Regular 5 th Regular 6 th Regular 7 th Regular 8 th Regular 9 th Regular 10 th Regular 11 th Regular 12 th Regular 13 th Regular 14 th Regular 15 th Regular 16 th Regular 17 th Regular 18 th Regular 19 th Regular 20 th Regular 21 st Regular 22 nd Regular 11

12 B. Risk Factors and Management Perception: Risk is always associated with any kind of investment. So before taking decision on investing in the shares of Ocean Containers Limited, the investors should carefully analyze the following risks in addition to the information contained in the Information Document: (a) Interest rate risk Interest rate risk is concerned with borrowed funds of short term and long-term maturity. Volatility in money market and increased demand for loans/investment funds raise the rate of interest. High rate of interest enhances the cost of fund of a Company and squeezes the profit. Management Perception: Since the OCL has not borrowed fund at flexible rate, hence, the interest rate risk does not arise. b) Exchange rate risk Exchange rate risk relates to transactions in foreign currency. The Company imports equipment from abroad where foreign currency is involved and exchange rate can impact such imports. Management Perception: As foreign currencies are available in money market, OCL can meet its foreign currency outflows. c) Industry risk Like other companies, OCL also suffers from industry risks arising out of changes in customer choices. Management Perception: OCL continuously carries out research and development (R&D) to keep pace with the customer choices. d) Market & Technology related risk Technology for a Containers Port is being upgraded in the world. Emergence of new technology may cause obsolescence of existing technology/equipment. So embracing with new technology is essential for ensuring better services at lower costs. Management Perception: OCL is aware of technological changes and has adopted new technology according to its needs. Further routine and proper maintenance of the equipment carried out by the OCL ensures longer service life for the existing equipment and facilities. e) Potential or existing Government regulations Like other companies, OCL operations are affected by potential or existing Government regulations relating to port, import, foreign exchange, monetary and fiscal regimes. Management Perception: Since OCL is an infrastructure company, the Government regulations are mostly investment-friendly. 12

13 f) Potential changes in global or national policies The performance of the Company may be affected due to unavoidable circumstances both in Bangladesh and worldwide, such as war, terrorism, political unrest in the country or customer countries. Changes in global or national policies may also adversely affect the economy in general. Management Perception: The risk due to changes in global or national policies is beyond control of any company. Yet OCL has spread its import from various countries of the world to reduce the risk. Further, it adopted policies to meet the challenges from potential changes in global or national policies. g) Non-Operating History There is no history of non-operation in the case of OCL. Management Perception: To overcome these uncertainties, the Company has its own power backup, scientific inventory management and continuous market promotion systems, which reduce the non-operating risk. h) Operational Risk Non-availability of materials/equipment/services may affect the smooth operational activities of OCL. On the other hand, the equipment may face operational and mechanical failures due to natural disasters, terrorist attacks, unforeseen events, lack of supervision and negligence, leading to severe accidents and losses. Management Perception: The Company is equipped with power backup system, which reduces operational risk. Besides, the equipment is under insurance coverage in order to get reasonable compensation for any damages. Apart from these, routine check and proper maintenance of the equipment also reduce and eliminate the operational risk. 13

14 C. Description of Business Information about the Company Ocean Containers Limited (the Company/OCL), initially incorporated as a Private Company on 26 th April 1986, was converted into a Public Company on 18 th January 1992 in terms of the provisions under section 154 of the Companies Act, 1913 The Company Commenced business from the date of its incorporation. The Company s Registered Office at Katghar, Chittagong with Corporate Office at Summit Centre, 18 Kawran Bazar C/A. Dhaka The Company s authorised capital stands at Tk 500,000,000; whereas its paid-up capital becomes Tk 238,000,000. The principal activity of the Company is to provide Off-Dock Services as Inland Container Depot (ICD) with facilities for Empty Container Storage and Container Freight Station (CFS) for handling both import and export cargo. OCL is the pioneer for Inland Container Depot (ICD) and Container Freight Stations (CFS) in Bangladesh. It is located at Patenga Industrial Area of Chittagong on the International Airport road, which is only 6 km from the country s largest seaport, Chittagong Port. OCL owns over 14 acres of Custom bonded free hold land. Its activities, though initially limited to storage of Empty Containers, now comprises of stuffing and unstuffing of 7,000+ Containers on monthly basis and a daily empty storage of 1,800 Containers (TEUs). With the logistic support of its surface transport wing, OCL can deliver containers anywhere in Bangladesh. Its fully computerized system allows it to keep track of all containers. OCL is an ISO 9001: 2000 Quality Management Certified company. It is the first company in Bangladesh to have the ISO certification for Inland Container Depot (ICD) and Container Freight Station (CFS). Services of the Company OCL offers three types of services to its valued clients i.e. Inland Container Depot (ICD), Container Freight Station (CFS) operation and customized services. Besides, during 2008, it got permission for import operation from Chittagong Port Authority. Various services under different operational areas of OCL are delineated in the following table: ICD CFS Customized Service container handling empty container removal plan wise container stacking at yard empty redelivery in various location (i.e. redelivery at CPA\ CY, Shipper premises or direct vessel hock) export cargo receiving cargo stacking at warehouse stuffing of container unstuffing of import container container repair and maintenance fumigation condition survey prepare documentation and arrange stuffing as per shipper\ shipping agent \ NVOCC or MLO s stuffing plan. Market for the products or services of the Company The Company s products/services are sold in Bangladesh (notwithstanding that these are paid out of freight earnings in foreign exchange by the Shipping Companies). 14

15 The relative contribution to sales and income of each product or service in case of more than one product or service The relative contribution of OCL s product/service segments is as below: Percentage Percentage Transportation 30,115, % 20,852, % Lift on / off Charges 30,996, % 5,213, % Custom Documentation 20,498, % 2,606, % Ground Rent 68,480, % 11,464, % Laden Container Stuffing Charges & Transportation 124,062, % 171,452, % Labour Charges 60,277, % 13,970, % Ship Landing Charges Received 56,722, % 30,236, % Shut-out-charges 475, % 461, % Other charges 56,175, % 59, % Total: 447,805, % 256,315, % Name of associates, subsidiary/related holding company and their core areas of business OCL has no subsidiary or associate-company. However, its entire shares, except 55 (fifty five) shares in the name of directors, are owned by Summit Alliance Port Limited. Competitive conditions in the business The history of private off dock operator in Bangladesh is not old. With a view to aid Chittagong Port in preventing frequent cargo congestion, private off-dock operators came into being in the middle of 90 s initially handling empty containers only; and then from 2000, Container Freight Station (CFS) services was allowed, first to handle export cargo and subsequently from 2 nd half of 2007 with the unstuffing of import cargo as well. At present there are 14 off-dock operators in Chittagong and handle around 50 percent of the business while Chittagong Port and Dhaka Inland Container Depot handle the rest. Chittagong Port alone handled around 0.96 million TUEs of container during 2007 against 0.88 million TUEs of container in It is forecasted that the total container volume handled by the Chittagong port will be increased by about 15% during Distribution of products or services The Company s products/services are sold/distributed directly to Shipping Companies. OCL s clients include Maersk, APL, Hapag-Lloyd, Shipping Corporation of India, Yang Ming Line, China Shipping, Norasia, Keuhne & Nagel, DSV, Danzas etc. 15

16 Sources and availability of raw materials and the names of the principal suppliers The Company uses contractors for hiring labour and transportation; and procuring supplies. These services and supplies are readily available from their respective sources. The names of major suppliers of the services and supplies during the year ended 31 December 2008 are as follows:- Sl No Name of Supplier Amount of Cost Percentage of Total Cost 1 M/S. PATENGA BHAI BHAI ENTERPRISE 16,694, % 2 M/S. SINTHEA TRADERS 11,772, % 3 M/S. SHAIKAT FILLING STATION 16,019, % 4 M/S. PRIOTA CONTAINER TRANSPORT 11,703, % 5 M/S. ISMAIL & CO. 4,261, % 6 M/S. PROJECT LINK SERVICES LIMITED 4,047, % 7 M/S. MFDF TRANSPORT 6,199, % 8 M/S. JAMUNA MOBIL SUPPLIERS 2,798, % 9 M/S. FW NICOL BANGLADESH 4,242, % 10 M/S. LOKMAN BROTHERS 2,839, % Out of the suppliers, none supplied more than 10% of the total purchases of products/services. The Directors of the Company or associated companies have no relationship with suppliers. Sources of, and requirement for, power, gas and water Sl. No. Item Sources Requirements 1 Power (Electricity) Bangladesh Power Development Board 460 KW Per Month 2 Gas Bakhrabad Gas T&D System Ltd Not applicable 3 Water Own Deep Tube Well Not available Names of customers who purchase 10% or more of the company s products The Company s products/services are sold to various customers. The main customers are as follows: Sl No Name of Customer Amount of Revenues Percentage of Total Revenues 1 APM GLOBAL LOGISTICS LIMITED 31,560, % 2 MAERSK (BANGLADESH) LIMITED 105,900, % 3 APL BANGLADESH LIMITED 27,000, % 4 SHAWALLACE SHIPPING LIMITED 35,000, % 5 CONTINENTAL TRADERS LIMITED 5,600, % 6 TRANSPORT TEAM WORLD WIDE LIMITED 4,000, % 7 SEA STAR SHIPPING LINES LIMITED 5,000, % 8 JARDINE SHIPPING LINES LIMITED 11,500, % 9 SEA BORNE (PVT) LIMITED 10,000, % 10 BS CARGO LIMITED 10,000, % No single customer purchases 10% or more of the company s products/services except Maersk (Bangladesh) Limited. 16

17 Description of any contract which the company has with its principal suppliers or customers The Company has no exclusive contract with its suppliers and customers except in the normal course of business. Description of any material patents, trademarks, licenses or royalty agreements There are no material patents, trademarks, licenses or royalty agreements with any third parties. Number of total employees and number of full-time employees As on 31 December 2008, manpower position of the Company is as follows: Sl. No. Classes of Employees Permanent Daily Basis/Contract Total 1 Managers Officers Staff Total Production capacity and current utilization Sl. No. Production Description Monthly Capacity (Approx) TEUs Utilization in Percentage 1 Export 6,000 85% 2 Import % 3 Empty Container Storage 1,800 (At any given time) 90% D. Description of Property Information in respect of properties, plants and equipments The company itself owns the entire fixed assets except lease hold assets. The properties, plants and equipments owned by the company and written down value thereof are stated as follows: Sl.No. Classes of Property, Plant and Equipment WDV at WDV at Land and Land Development 852,348, ,866,700 2 Building and Other Construction 366,766, ,299,537 3 Plant and Machinery 91,936,204 50,314,726 4 Office Equipment 4,702,431 2,544,712 5 Furniture and Fixtures 4,245,691 3,461,944 6 Vehicles 6,650,197 4,778,479 Total 1,326,649, ,266,098 Plant and Machinery includes leased equipment having WDV at Tk 2,786,847 as at 31 December

18 Location of the principal plants and other property and the condition thereof LANDS Location Katghar, Patenga, Ctg. SALE DEED No. DATED MOUZA R.S. KHATIAN B.S. KHATIAN AREA IN DECIMAL CONDITION Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga 2321,2323, ,1407, Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2339, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga 2345, , Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga 2294,2991, ,861,291, Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good Do Uttar Patenga Good 1,420,580 18

19 BUILDINGS SL NO. PARTICULARS AREA (Sft) CONDITION A. Sheds 1. Prefabricated Shed-1 with extension 25,745 Good 2. Prefabricated Shed-2 16,900 Good 3. Prefabricated Shed-3 & 3A 24,869 Good 4. Prefabricated Shed-4 8,200 Good 5. Prefabricated Shed-5 9,605 Good 6. Prefabricated Shed-6 60,800 Good 7. Jute Yard 8,439 Good 8. Refrigeration Yard 12,090 Good B. Buildings 9. ICD-Old (2 Storied) 1,330 Good 10. ICD-New ( 2 Storied) 4,288 Good 11. CFS-Building (4 Storied) 4,368 Good 12. CFS-Extension (4 Storied) 2,600 Good 13. Customs Building 2,300 Good 14. Prayer Room 600 Good 15. Security Room 600 Good C. Infrastructure Development 16. Land Filling 586,681 Good 17. Pavement 425,243 Good 18. Boundary Wall 5,526 Good 19. Drain 6,957 Good 19

20 PLANT & MACHINERY Sl No Items Country of Origin Quantity Condition 1 Second Hand KATO Hydraulic Crane Hydraulic Crane Japan 1 Good 2 Reconditoned KATO Rough Terrain Crane-KR-25 H-111 Japan 1 Good 3 Reconditoned KATO Rough Terrain Crane-KR-25 H-111 Japan 1 Good 4 Linde Material Handling Equipment Model-H18D Germany 1 Good 5 Linde Material Handling Equipment Model-H18D Germany 1 Good 6 Used Linde Material Handling Equipment Model-H25D Germany 1 Good 7 Daewoo Forklift Model-FD 60 South Korea 1 Good 8 Daewoo Brand Diesel Operated Forklift-Model-D50SC-2 South Korea 1 Good 9 Daewoo Brand Diesel Operated Forklift-Model-D25S-3 South Korea 1 Good 10 Second Hand Container Handler Fantuzzi FDC Italy 1 Good 11 Used Fantuzzi CS 45 KL Reach Stacker Italy 1 Good 12 Fantuzzi Reach Staker Serial No UK 1 Good 13 TCM Brand Diesel Engine Driven Forklift Truck Model- FD100Z Japan 1 Good 14 Reconditioned TCM Forklift Model-FD25Z2S Japan 1 Good 15 TCM Brand Diesel Engine Operated Forklift -Model-FD100Z8 Japan 1 Good 16 Reconditioned TCM Forklift Model-FD-30 Z8 Japan 1 Good 17 Refurbished Linde C 80/5 Empty Container Handler Germany 1 Good 18 PPM Crane-C580 Japan 1 Good 19 Trailer 1 Good Mortgage or other type of lien on the property owned by the company The Company itself owns the entire fixed assets. There is no equitable mortgage over the immovable properties of the Company except equitable mortgage on acres land in favor of Standard Bank Limited. Expiration date of the lease, if it is taken on lease The lease taken from IDLC Finance Limited for acquisition of Motor Vehicle will expire on 15 th April

21 E. Plan of Operation and discussion of Financial Condition Internal and External sources of Fund Particulars Total Sources of Fund as at 31 December Internal Sources of Fund : Share Capital 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000 Share Money Deposit - 150,000, Tax Holiday Reserve - 36,495,657 35,661,313 34,339, Retained Earnings 1,183,160 22,776,994 13,858,637 9,882,352 5,843,922 Proposed Bonus Shares 168,000, Depreciation 26,683,110 22,561,744 14,629,692 15,320,584 16,017,776 Networking Capital (89,092,053) 83,058,199 21,171,119 5,368,477 (85,968) 176,774, ,847, ,320, ,910, ,083,450 External Sources of Fund : Long term Loan 4,992,645 29,901,542 61,950,000 97,350, ,750,000 Short term Loan 281,467,288 4,054, ,459,933 33,955,572 61,950,000 97,350, ,750,000 Total Sources of Fund during the Year 463,234, ,803, ,270, ,260, ,833,450 Internal Sources of Fund 176,774, ,847, ,320, ,910, ,083,450 External Sources of Fund 286,459,933 33,955,572 61,950,000 97,350, ,750,000 Total 463,234, ,803, ,270, ,260, ,833,450 Material commitments for capital expenditure and the expected Sources of Funds There are no material commitments for capital expenditure. Causes of any material changes in income, cost of goods sold, other operating expenses and net income Particulars Revenues 447,805, ,315, ,019, ,322, ,464,183 Change in Revenues 191,489,304 38,296,474 17,697, ,862 89,615,276 Direct Expenses 196,432, ,421, ,666, ,581, ,706,000 Change in Operating Expenses 24,010,938, 6,755,057 1,4084, ,959 88,359,955 Operating Expenses 78,896,890 38,222,604 38,794,644 36,241,036 38,544,000 Change in Operating Expenses 40,674,286 (572,040) 2,553,608 (2,302,964) 22,595,375 Net Profit 175,856,815 47,599,785 13,558,250 12,499,050 10,214,183 Change in Net Profit 128,257,030 34,041,535 1,059,200 2,284,867 (21,340,054) There have been material changes in revenues, direct expenses, operating expenses and net profit in 2008 compared to Revenues, direct expenses, operating expenses and net profit increased in 2008 compared to 2007 due to increase in volume and price of the Company s products/services. 21

22 Seasonal Aspects Normally there is no seasonal impact on the business of the Company, as demand for products/ services of the Company is almost stable in all seasons. Known trends, events or uncertainties Natural disaster and social/political unrest are generally known events that may affect the Company s business. Change in the assets used to pay off any liabilities No asset of the company has been used to pay off any liabilities. Loans taken from the holding/subsidiary company or loans given to those companies The Company has no subsidiary company. It did not take any loan from its holding company or and also did not provide any loan to that company. Future contractual liabilities The Company has no future contractual liabilities that may have impact on the Company s financial fundamentals. Estimated future capital expenditure There was no capital expenditure contracted but not incurred or provided for as on There was no material capital expenditure authorised by the Company s Board of Directors but not contracted for as on VAT, income tax, customs duty or other tax liabilities yet to be paid a. vat There are no VAT liabilities of the Company. VAT claimed by the VAT Authorities not accepted by the Company and thus, appealed against by it, aggregated Tk 128,506,825. b. Income-tax There are no income-tax liabilities of the Company. c. Customs duty or other liability There are no dues outstanding on account of Customs duty or other tax liabilities. Sources of VAT, income tax, customs duty and other tax liabilities yet to be paid Unpaid liabilities, if any, on account of VAT, Income Tax, Customs Duty or Other Tax liabilities will be paid out from internal sources of the Company. 22

23 Details of operating lease (if any) during last five years The company did not obtain any operating lease during last five years. Last Five years commitments Including lease Commitments The Company did not have such commitments except lease finance liabilities at Tk 2,701,595/- Special report from the auditors regarding any allotment of shares to promoters or Sponsors AUDITORS CERTIFICATE ON ISSUE OF SHARE CAPITAL OF OCEAN CONTAINERS LIMITED Issue of Share Capital ,000,000 Ordinary Shares of Tk.10 each fully paid-up in cash 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 21,800,000 Ordinary Shares of Tk.10 issued as bonus shares 218,000,000 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 23,800,000 Ordinary Shares of Tk. 10 each 238,000,000 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000 Chittagong, 15 June 2009 We certify, based on our examination of Share Register and its underlying documents, the paid-up capital of Ocean Containers Limited as at 15 June 2009 stands at Tk 238,000,000, consisting of 23,800,000 Ordinary Shares of Tk 10 each, as follows:- Sd/- Basu Banerjee Nath & Co. Chartered Accountants After the balance sheet date, i.e., 31 December 2008, OCL s paid-up capital increased by Tk 168,000,000 by issue of stock-dividend (bonus shares) at 240% on 23 March 2009; and also, Summit Alliance Port Limited (SAPL) acquired OCL s entire shares (except 55 shares), i.e., 23,799,945 Ordinary Shares by exchange of SAPL shares on 24 May 2009 at one SAPL share for eight point fifty three OCL shares. 23

24 Employee-related schemes to make provision in future years The following retirement benefit schemes for the employees of OCL have been introduced: 1. Provident Fund The company operates a Contributory Provident Fund (CPF) for its permanent employees. The fund is administered by a Board of Trustees and is funded by 10% contributions equally from the employee and the employer. 2. Gratuity The Company also maintains non-funded Gratuity Scheme for its permanent employees. An employee, on completion of continuous service of five years with the Company, is entitled to get gratuity at one month s basic salary for each completed year of service. 3. Annual Bonus and other Incentives There is a provision for two festivals Bonus every year, at one month basic pay, for the permanent employees of the Company. Besides, the company provides earned leave encashment facilities as per guideline of the Company. Break down of all expenses including fee of issue manager and underwriters Messrs ICB Capital Management Limited is the Manager to this offer of shares. The issue manager is to be paid a fee of Tk 600,000 for its services. There are no underwriters in relation to this offer of shares pursuant to the Dhaka/ Chittagong Stock Exchange (Direct Listing) Regulations, Expenses relating to direct listing are estimated as follows:- Particulars Basis of Calculation Amount in Tk Manager to the Issue Fee ICB Capital Management Ltd 6,00,000 Fees related to the Stock Exchanges: Application Fee DSE and CSE At Tk 10,000 each for DSE & CSE 20,000 Annual Fee for DSE and CSE At Tk 60,000 each for DSE & CSE 1,20,000 Listing Fees for Stock Exchanges As per DSE/CSE Listing Rules 9,14,000 CDBL Fees and Expenses: Security Deposit As per CDBL By-laws 4,00,000 Documentation Fee As per CDBL By-laws 2,500 Annual Fee As per CDBL By-laws 1,00,000 Connection Fee As per CDBL By-laws 6,000 Expenses related to Printing/Publication: Publication of Information Document (Estimated; to be paid at actual) 500,000 Design, Printing of Information Document (Estimated; to be paid at actual) 150,000 Other Expenses (Estimated; to be paid at actual) 100,000 29,12,500 24

25 Revaluation of assets The Company has revalued its assets in 2004 and 2008 to reflect fair value there of its financial statements. S.F. Ahmed & Co. Chartered Accountants and Values, an associate firm of Ernst and Young, have revalued the Land, Building and other construction and Container Handling Equipment of the Company as of following the current cost accounting method. The revaluation resulted into a further revaluation surplus aggregating Tk. 542,231,447 as of ,as follows:- Group of Fixed Assets Depreciated Historical Cost Depreciated Current Cost Revaluation Surplus Lands 417,866, ,348, ,481,300 Buildings and Other Constructions 288,170, ,766,887 78,595,980 Container Handling Equipment 53,725,833 82,880,000 29,154,167 Total 759,763,440 1,301,994, ,231,447 In 2004, the revaluation surplus amounted to Tk 451,150,105. Last five years transactions between the issuer company and its subsidiary/holding company The Company has no subsidiary company. There are accordingly no transactions between the issuer company and its holding company during the last five years. Material information having an impact on the affairs of the Company There is no other material information that may have an impact on the affairs of the Company. Status of Loans Loan Type Bank/Institution Name Amount (Tk.) Status Long-term Lease Finance IDLC Finance Limited 2,701,595 Regular Short-term Bank Overdraft Standard Bank Limited 281,467,288 Regular There are no overdue or classified loans of either the Company or any director or any shareholder holding more than 5% shares. In terms of Lease Agreement dated 6 May 2007, OCL obtained lease finance from IDLC Finance Limited for acquisition of vehicles aggregating Tk 40,78,000, bearing a monthly lease rental at Tk 114,880 for 4 years; and a lease deposit at Tk 114,880. In terms of the Deeds of Legal Mortgage dated 15 June 2006 and 2 April 2008, OCL obtained Cash Credit (Hypo) Limit aggregating Tk 15 (fifteen) crore from Standard Bank Limited, Agrabad Branch, Chiitagong, carrying interest at 13.5/16%, against Hypothecation of Bills Receivables, Demand Promissory Notes and Mortgage of Decimals of OCL s land situated at Mouza North Patenga, PS Doublemooring, District Chittagong. 25

26 F. Directors and Officers Name, age and position of all Directors of the Company The Board of Directors of OCL comprises of 10 (Ten) Directors. The name, age and position of all Directors of the Company are as follows:- Sl. No Name and Address of Director Age (Years) Position Mr. Muhammed Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mr. Syed Ali Jowher Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mrs. Anjuman Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mrs. Sobera Ahmed Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mr. Latif Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mrs. Ayesha Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Ms. Adeeba Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mr. Syed Yasser Haider Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mr. Syed Nasser Haider Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mr. Faisal Karim Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka 55 Chairman 56 Managing Director 54 Director 56 Director 51 Director 28 Director 26 Director 29 Dy. Managing Director 25 Dy. Managing Director 24 Dy. Managing Director Date of first becoming Director and date of expiry of current term The date of first becoming Director and date of expiry of current term of all Directors of the Company are as follows:- Sl. No Name and Address of Director Mr. Muhammed Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mr. Syed Ali Jowher Rizvi, House-A/15, Road- 117, Gulshan, Dhaka-1212 Mrs. Anjuman Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mrs. Sobera Ahmed Rizvi, House-A/15, Road- 117, Gulshan, Dhaka-1212 Mr. Latif Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mrs. Ayesha Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Ms. Adeeba Aziz Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Mr. Syed Yasser Haider Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mr. Syed Nasser Haider Rizvi, House-A/15, Road-117, Gulshan, Dhaka-1212 Mr. Faisal Karim Khan, 14/A Shahid Sarani Road, Dhaka Cantonment, Dhaka Date of First Becoming Director Date of Expiry of Current term Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing Continuing 26

27 Involvement of Directors with listed company in terms of dividend and category The involvement of all Directors with listed company in terms of dividend and category are as follows:- Sl No Name of Director 1 Mr. Muhammed Aziz Khan Name of Company where the Director is Involved Summit Power Limited Summit Alliance Port Limited 2 Mr. Syed Ali Jowher Rizvi Summit Alliance Port Limited 3 Mrs. Anjuman Aziz Khan Summit Alliance Port Limited Summit Power Limited Position in that Company Chairman Chairman Managing Director Director Director Listing Category in DSE/ CSE 4 Mrs. Sobera Ahmed Rizvi Summit Alliance Port Limited Director A 5 Ms. Ayesha Aziz Khan 6 Ms. Adeeba Aziz Khan 7 8 Mr. Syed Yasser Haider Rizvi Mr. Syed Nasser Haider Rizvi Summit Alliance Port Limited Summit Power Limited Summit Alliance Port Limited Summit Power Limited Summit Alliance Port Limited Summit Alliance Port Limited Director Director Director Director Dy. Managing Director Dy. Managing Director A A A A A A A A A A A Latest Dividend Declared Stock-20%; Stock-20%, Cash-10% Stock-20%, Cash-10% Stock-20%; Stock-20%, Cash-10% Stock-20%, Cash-10% Stock-20%, Cash-10%; Stock-20% Stock-20%, Cash-10%; Stock-20% Stock-20%, Cash-10% Stock-20%, Cash-10% Family relationship among directors, alternate directors, nominees and officers There is family relationship amongst the Directors of the Company. There is no family relationship amongst Directors and Nominees and Officers. Mr. Muhammed Aziz Khan, Mrs. Anjuman Aziz Khan (wife), Mr. Latif Khan (brother), Mrs. Ayesha Aziz Khan (daughter), Ms. Adeeba Aziz Khan(daughter) and Mr. Faisal Karim Khan (brother s son) are members of Mr. Muhammed Aziz Khan s family. Mr. Syed Ali Jowher Rizvi, Mrs. Sobera Ahmed Rizvi (wife), Mr. Syed Yasser Haider Rizvi (son) and Mr. Syed Nasser Haider Rizvi (son) are members of Mr. Syed Ali Jowher Rizvi s family. Bio-data of each director A brief bio-data of the Directors of OCL Board is given below: Mr. Muhammed Aziz Khan, Chairman Muhammed Aziz Khan, an MBA from the Institute of Business Administration under Dhaka University, has been in business since In 1985, in order to consolidate his business activities under one umbrella, he formed Summit Industrial & Mercantile Corporation (Pvt) Limited (SIMCL) which is now the largest private sector investor of the Infrastructure Industrial House of the country. Mr. Khan is the Chairman of the Summit Group of Companies. Mr. Khan played the pioneering role in setting up the Country s first independent power plant (IPP), Khulna Power Company Limited of which he is the Chairman. He is also the Chairman of Summit Power Limited, the first Company in this sector to go public. Regarded as an expert in the energy business, Mr. Khan played his due role in formulating the Private Sector Power Generation Policy of Bangladesh. 27

28 He was the founder president of Bangladesh Energy Companies Association, formed to represent and promote the interest of private sector business engaged in energy generation. Mr. Khan, a dynamic personality with a track record of 37 years as successful entrepreneur, in his strive to diversify and expand his business horizon ventured into the Off-Dock Industry by acquiring the Ocean Containers Limited in the year 1995, of which he is the Chairman. Subsequently, considering the fast growing volume of container movement, Mr. Khan, along with his friend Mr. Syed Ali Jowher Rizvi of Alliance Holdings Limited established Summit Alliance Port Limited (SAPL) in 2003, making a valuable addition to the ever expanding Off-Dock industry of the Country. It may be mentioned that SAPL is the first Company in this sector to go public and today it is one of the top 10 Companies in terms of Turnover and Market Capitalization. Mr. Khan has set up Siraj Khaleda Trust - a social wing of Summit Group, which is setting up 200 beds for medical services on charitable basis in Dhaka Cantonment. 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 and, in recognition, he has been elected as the founder Chairman of the Prothom Alo Trust formed recently to consolidate and manage the CSR activities centrally. Mr. Syed Ali Jowher Rizvi, Managing Director Mr. Syed Ali Jowher Rizvi son of Late Syed Nasiruddin Haider Rizvi (BCS) was born on 19 th March 1953 in a respected Muslim family.he has completed his MBA degree in International Finance and Accounting from Indiana University, USA. He also earned MA in Economics with Honors from Dhaka University. After completion of his masters from Dhaka University, he involved himself with BCCI (O) Ltd. in two phases. At the same time, he was engaged with Institute of Business Administration (IBA) as a part time (Honorary) Lecturer. From March 1991 to June 1997, he served Union Bank Zambia Ltd., Zambia as its Managing Director. Back to Bangladesh, he entered into business venture and established Alliance Group of Companies with Alliance Holdings Limited as the Parent Organization. He joined hand with his friend, Mr. Muhammed Aziz Khan of Summit Group in 1997 in the Off-Dock Business and since then he is the Managing Director of Ocean Containers Limited. Subsequently in 2003 both Summit and Alliance houses jointly made another valuable addition to the ever expanding Off-Dock industry of the Country and established Summit Alliance Port Limited, which today is the lone Company of this sector listed with both the bourses. Mr. Rizvi has since established himself as a business personality and developed his skill in the sector of Carbonated Soft Drinks, Textile, Gas pipeline construction, prefabricated Steel, Real Estate Development, Media, IT, Dairy products, Transportation and Banking. Mrs. Anjuman Aziz Khan, Director Mrs. Anjuman Aziz Khan, wife of Mr. Muhammed Aziz Khan has 20 years of business experience. Mrs. Khan is the member of Siraj Khaleda Trust- a social wing of Summit Group, which is setting up a 200 beds hospital for medical service on charitable basis in Dhaka Cantonment. She enthusiastically takes part & contributes to social activities such as Assistance of Blind Children (ABC) and women s entrepreneurship development. Ms. Sobera Ahmed Rizvi, Director Ms. Sobera Ahmed Rizvi, wife of Mr Syed Ali Jowher Rizvi was born on 21 st August She has completed her MA with Honors in Economics from Dhaka University in She is the founder Director and past chairperson of Himadri Limited (a Public Listed Company) and Rabeya Flour Mills Limited. Presently she is serving Alliance Holding Limited & Global Beverage Co Ltd. as Chairperson. 28

29 Mr. Latif Khan, Director Mr. Md. Latif Khan was born on 28 December 1958 in Dhaka. He pursued BA in Public Administration at Dhaka University, and subsequently left for higher studies to the U.S in There he worked for over 15 years in the financial sector. He was a stockbroker and a financial analyst at Prudential Insurance of America where he received numerous sales achievement awards and worked as a Financial Officer at Wells Fargo Bank in California. He returned to Bangladesh in 1997 and thereafter, joined Summit Group as the Managing Director of Summit Shipping Limited. Mr. Khan has established himself as a sound and dynamic businessman of the country. Ms. Ayesha Aziz Khan, Director Ms. Ayesha Aziz Khan was born in After completion of her O Level and A Level from Bangladesh she went for higher studies to U.K and completed her graduation in Economics and Business from the University College of London in Ms. Ayesha Aziz Khan has successfully done her MBA from Columbia University, USA where she is placed among the top 5% students of the batch. She has joined Summit Group in management position. Presently Ms. Khan is holding the position of Director in several companies. Ms. Adeeba Aziz Khan, Director Ms. Adeeba Aziz Khan, Daughter of Mr. Muhammad Aziz khan was born on 14 June She has completed her Bar Vocational Course from Inns of Court School of Law, UK in From July 2006 she worked with Dr. Kamal Hossain & Associates, Bangladesh as Pupil, after that she involved herself with Drew & Napier LLC, Singapore as an International Lawyer. Mr. Faisal Karim Khan, Director Mr. Faisal Karim Khan was born on 29 th July He has completed Mechanical Engineering with Finance degree from University College of London, London, UK in June From February 2007, he engaged himself with Ocean Containers Ltd. and Summit Alliance Port Ltd as a Director. After that, he has increased his responsibility by taking up the directorship of Summit Industrial and Mercantile Corporation Ltd. and Cosmopolitan Traders Ltd. Mr. Syed Yasser Haider Rizvi, Director Mr. Syed Yaseer Haider Rizvi son of Mr. Syed Ali Jowher Rizvi was born on 14 th January He has completed his Bachelor degree with Honors in Economics from University College of London, London, UK. He has started his career with Standard Charted Bank. Then he engaged himself with his father s business as Deputy Managing Director of Global Beverage Co Ltd. And from August 2007, he also took the responsibility of Ocean Containers Ltd as Deputy Managing Director. Mr. Syed Nasser Haider Rizvi, Director Mr. Syed Nasser Haider Rizvi, the youngest son of Mr. Syed Ali Jowher Rizvi, was born on 6 th November He has completed his Bachelor degree in Management from Bentley College, Boston, USA. From February 2007, he has taken the responsibility of Global Beverage Co Ltd as Director (Marketing), which includes monitoring and supervision of marketing activities of all Virgin Drinks and ZAM ZAM Cola Products. And from August 2007, he also took the responsibility of Ocean Containers Ltd as Deputy Managing Director. 29

30 Description of Senior Executives and Officers Mr. Syed Ali Jowher Rizvi, Managing Director Mr. Syed Ali Jowher Rizvi son of Late Syed Nasiruddin Haider Rizvi (BCS) was born on 19 th March 1953 in a respected Muslim family.he has completed his MBA degree in International Finance and Accounting from Indiana University, USA. He also earned MA in Economics with Honors from Dhaka University. After completion of his masters from Dhaka University, he involved himself with BCCI (O) Ltd. in two phases. At the same time, he was engaged with Institute of Business Administration (IBA) as a part time (Honorary) Lecturer. From March 1991 to June 1997, he served Union Bank Zambia Ltd., Zambia as its Managing Director. Back to Bangladesh, he entered into business venture and established Alliance Group of Companies with Alliance Holdings Limited as the Parent Organization. He joined hand with his friend, Mr. Muhammed Aziz Khan of Summit Group in 1997 in the Off-Dock Business and since then he is the Managing Director of Ocean Containers Limited. Subsequently in 2003 both Summit and Alliance houses jointly made another valuable addition to the ever expanding Off-Dock industry of the Country and established Summit Alliance Port Limited, which today is the lone Company of this sector listed with both the bourses. Mr. Rizvi has since established himself as a business personality and developed his skill in the sector of Carbonated Soft Drinks, Textile, Gas pipeline construction, prefabricated Steel, Real Estate Development, Media, IT, Dairy products, Transportation and Banking. Mr. Syed Yasser Haider Rizvi, Deputy Managing Director Mr. Syed Yaseer Haider Rizvi son of Mr. Syed Ali Jowher Rizvi was born on 14 th January He has completed his Bachelor degree with Honors in Economics from University College of London, London, UK. He has started his career with Standard Charted Bank. Then he engaged himself with his father s business as Deputy Managing Director of Global Beverage Co Ltd. And from August 2007, he also took the responsibility of Ocean Containers Ltd as Deputy Managing Director. Mr. Syed Nasser Haider Rizvi, Deputy Managing Director Mr. Syed Nasser Haider Rizvi, the youngest son of Mr. Syed Ali Jowher Rizvi, was born on 6 th November He has completed his Bachelor degree in Management from Bentley College, Boston, USA. From February 2007, he has taken the responsibility of Global Beverage Co Ltd as Director (Marketing), which includes monitoring and supervision of marketing activities of all Virgin Drinks and ZAM ZAM Cola Products. And from August 2007, he also took the responsibility of Ocean Containers Ltd as Deputy Managing Director. Mr. Faisal Karim Khan, Deputy Managing Director Mr. Faisal Karim Khan was born on 29 th July He has completed Mechanical Engineering with Finance degree from University College of London, London, UK in June From February 2007, he engaged himself with Ocean Containers Ltd. and Summit Alliance Port Ltd as a Director. After that, he has increased his responsibility by taking up the directorship of Summit Industrial and Mercantile Corporation Ltd. and Cosmopolitan Traders Ltd. 30

31 Mr. Syed Fazlul Haque, FCA, Chief Financial Officer & Company Secretary A Chartered Accountant by profession, Syed Fazlul Haque, started his career as partner of A Qasem & Co, Chartered Accountants in mid In April 1975 he moved to executive career by joining Biman, Bangladesh Airlines, as its Controller of Accounts and since then his long varied career included increasingly higher positions in different local and multinational organizations. Mr. Haque left Padma Oil Co Ltd in January 1993 after 12 years of service with the Company to join Glaxo Bangladesh (subsequently renamed as GlaxoSmithKline Bangladesh) as Finance Director where he was made Managing Director of the Company in August 1997 and continued in the position until his retirement on 31 st December In 1 st January 2005 Mr. Haque joined Ocean Containers Limited as CFO & Company Secretary. During the tenure of his long career, Syed Fazlul Haque served as Committee member of Metropolitan Chamber of Commerce & Industries, Foreign Chamber of Commerce & Industries and Bangladesh Employers Federation. Captain Asif Mahmood, Director, Projects & Procurement Captain Asif Mahmood started his career with the group in 1999 and presently holding the position as Director, Projects & Procurement. Son of a retired Army officer (Major), Captain Mahmood was born on 13 th August After completion of his College education in 1978, Captain Asif Mahmood entered a career in sailing with renowned companies such as Gulfeast Ship Management Ltd, UASC, NYK, HRC. He has experience in both container vessels, Break Bulk Ship and Car Carriers. Captain Asif Mahmood obtained his professional certificates on class 3 in 1985, class 2 in 1989 & Class 1 Master s in All the certificates were obtained from UK. Captain Mahmood joined Ocean Containers Limited in 1999 and at present is holding the position of Director, Projects & Procurement in the Company. Captain Kamrul Islam Mazumder, Director (Operations) Capt. Kamrul Islam Mazumder, had his early education at Faujdarhat Cadet College from 1969 to He passed his HSC in 1975 securing 8 th position in the combined list of successful candidates from the Comilla Board. He then graduated from the Bangladesh Marine academy. He passed two professional examinations from Ireland and finally passed his Master Mariner examinations from Liverpool in England. He started his sea career as a cadet with the Bangladesh Shipping Corporation in 1977, later moving to a Hong Kong-based Company to serve in various sea-going capacities on board bulk carriers. He commanded bulk carriers from 1992 till 1997 when he left sea to start his shore based career. Capt. Mazumder joined Maersk Bangladesh Limited as Manager, Chittagong in During his tenure with Maersk Bangladesh, Capt. Mazumder oversaw pan-country Operations and Security apart from general management of the Chittagong Branch. He last served Maersk Bangladesh Ltd. as General Manager Operations. Ratan Kumar Nath, ACMA, Head of Internal Audit Mr. Ratan Kumar Nath (Ratan) joined the Company in January 2008 as Head of Internal Audit of the Company. Ratan obtained his M. Com from University of Chittagong and subsequently qualified as Cost & Management Accountant from Institute of Cost & Management Accountants of Bangladesh (ICMAB). He has 16 years of professional experience. Prior to joining the Company, Ratan held various important positions in different Organizations namely Bangladesh Shipping Corporation (BSC), KDS Group, Abul Khair Group, Meghna Group etc. 31

32 G. Involvement of the Officers and Directors 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 10 (Ten) years or for the period of commercial operation: 1. 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, Officer or general partner at the time of bankruptcy; 2. Any conviction of an officer, director or nominee in the criminal proceedings or any criminal proceedings pending against him. 3. Any order, judgment or decree of any Court of competent jurisdiction against officer, director or nominee permanently or temporarily enjoying, barring, suspending or otherwise limiting the involvement of any officer or director on nominee in any type of business, securities or banking activities. 4. 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, securities or banking activities. H. Certain Relationships and Related Transactions Transaction with related parties The Company has no proposed transaction nor had any transaction during the last 2 (two) years with following parties: 1. Any Executive Director or Executive Officer of the Company; 2. Any Director or Officer; 3. Any person owing 5% or more of the outstanding stock of the issuer; 4. Any members of the immediate family (OCL including spouse, parents, brothers, sisters, children and in-laws) of any above persons; 5. Any transactions or arrangement entered into by the Company or its holding company (Summit Alliance Port Limited) 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/associate companies, 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 Information document; and 6. Any director holding any position, apart from being a director in the issuer company, in any company, society, trust, organization or proprietorship or partnership firm. 32

33 Loans taken or given from or to any director or any person connected with the Director No such Loans taken or given from or to any Director or any person connected with the Director of OCL. Holding position of any director in any company, society, trust, organization or other firms Sl No Name of Director Name of Company where the Director is Involved Position in that Company 1 Mr. Muhammed Aziz Khan Summit Power Limited Khulna Power Company Limited Summit Industrial & Mercantile Corp. (Pvt) Ltd. Cosmopolitan Traders (Pvt) Ltd. Summit Alliance Port Limited Ocean Containers Limited Chairman 2 Mr. Syed Ali Jowher Rizvi 3 Mrs. Anjuman Aziz Khan Alliance Holdings Limited Summit Alliance Port Limited Ocean Containers Limited Global Beverage Co. Ltd. PEB Steel Alliance Ltd Summit Power Limited Khulna Power Company Limited Summit Industrial & Mercantile Corp. (Pvt) Ltd. Cosmopolitan Traders (Pvt) Ltd Summit Alliance Port Limited Ocean Containers Limited Managing Director Director Director 4 Mrs. Sobera Ahmed Rizvi Alliance Holdings Limited Summit Alliance Port Limited Ocean Containers Limited Director 5 Ms. Ayesha Aziz Khan Summit Power Limited Khulna Power Company Limited Summit Industrial & Mercantile Corp. (Pvt) Ltd. Cosmopolitan Traders (Pvt) Ltd Summit Alliance Port Limited Ocean Containers Limited Director 6 Ms. Adeeba Aziz Khan Summit Industrial & Mercantile Corp. (Pvt) Ltd. Cosmopolitan Traders (Pvt) Ltd Summit Alliance Port Limited Ocean Containers Limited Director 7 Mr. Latif Khan Summit Power Limited Khulna Power Company Limited Summit Industrial & Mercantile Corp. (Pvt) Ltd. Cosmopolitan Traders (Pvt) Ltd Summit Alliance Port Limited Ocean Containers Limited Director 8 Mr. Syed Yasser Haider Rizvi Summit Alliance Port Limited Ocean Containers Limited Alliance Holdings Limited Global Beverage Co. Ltd. Dy. Managing Director 9 Mr. Syed Nasser Haider Rizvi Summit Alliance Port Limited Ocean Containers Limited Dy. Managing Director 10 Mr. Faisal Karim Khan Summit Alliance Port Limited Ocean Containers Limited Summit Power Limited Dy. Managing Director Pecuniary or non-pecuniary interests and facilities enjoyed by a Director No interests and facilities, whether pecuniary or non-pecuniary, are enjoyed by the Directors of the Company. 33

34 I. Executive Compensation Name and designation with the amount of remuneration paid to the top ten salaried officers in the last accounting year ended 31 December 2008 Sl. No. Name Of The Executive Designation Department Gross Salary 1 Mr. Syed Ali Jowher Rizvi Managing Director General Management 4,200,000 2 Mr. Syed Yasser Haider Rizvi 3 Mr. Syed Nasser Haider Rizvi Deputy Managing Director General Management 1,512,000 Deputy Managing Director General Management 1,512,000 4 Mr. Faisal Karim Khan Deputy Managing Director General Management 1,512,000 5 Mr. Syed Fazlul Haque Director (Finance & HR Finance and HR 1,800,000 6 Captain Asif Mahmood Director Operation Operation 1,650,000 7 Mr. Abdul Hakim General Manager Container Freight Station 830,400 8 Mr. Mohammed Harun Deputy General Manager Accounts and Finance 739,200 9 Mr. Tarikul Islam Deputy General Manager Operation 641, Mr. Ratan Kumar Nath Assistant General Manager Audit and Budget 582,000 Aggregate amount of remuneration paid to all officers in the last accounting year ended 31 December 2008 Sl. No. Head of Remuneration Amount in 1 Basic Salary 12,394,500 2 Housing 4,957,800 3 Medical 1,239,450 4 Transport 1,143,450 5 Contribution to Provident Fund 1,239,450 6 Bonus 2,065,750 7 Leave Pay 327,484 Total 23,367,884 Remuneration paid to any Director who was not an officer during the last accounting year No remuneration/honorarium was paid to the directors who were not officers during the last accounting year. Contract with any officer or director for the payment of future compensation No such contract was made with any officer or director for the payment of future compensation. Increment of the remuneration to the officers and employees of the company in the Current year OCL allows annual increment on the basis of rating of permanent officers and employees. 34

35 J. Options granted to Officers, Directors and Employees No such options have been granted to Officers, Directors, and employee of OCL. The expiration date of the option Not applicable for the Company. Options held by any persons other than the officers and directors No such options held any persons (including Officers and Directors) K. Transaction with Promoters No benefit, directly or indirectly, was received by the promoters or by any directors or any person connected with the promoters or directors. Net Tangible Assets per Share L. Tangible Assets per Share Net Tangible Assets value is based on historical cost accounting (HCA) book value of shareholder s net tangible assets, as adjusted by revaluation surplus. This is determined on the basis of audited Balance Sheet as at 31 December 2008 as follows: AUDITORS CERTIFICATE ON THE NET TANGIBLE ASSET VALUE OF OCEAN CONTAINERS LIMITED We have examined the Net Tangible Asset Value of Ocean Containers Limited as at 31 December 2007 and 2008 which have been computed by the Management of the Company based on its Financial Statements for the years ended 31 December 2007 and Based on our examination, we certify that the Net Tangible Asset Value of the Company has been properly computed by it based on its financial statements for the years ended 31 December 2007 and 2008 audited, and reported upon, by us: A.1 Property, Plant and Equipment 1,326,649, ,266,099 A.2 Current Assets 322,264, ,151,868 A.3 Total Assets (A.1+A.2) 1,648,914, ,417,967 B.1 Current Liabilities 411,356, ,445,211 B.2 Long Term Liabilities 4,992,645 26,550,000 B.3 Total Liabilities (B.1+B.2) 416,349, ,995,211 C. Net Assets (A.3-B.3) 1,232,564, ,422,756 D. Re-stated Number of Shares 23,800,000 7,000,000 E. Net Tangible Asset Value per Shares (C/D) Sd/- Sd/- Sd/- Chairman Managing Director Chief Financial Officer Auditor Chittagong, 15 June 2009 Sd/- Basu Banerjee Nath & Co. Chartered Accountants 35

36 M. Ownership of the Company s Securities Name and address of the persons owning 5% or more of the securities of the issuer: Sl No 1 Name of the Owners of Securities Summit Alliance Port Limited Position No of Shares Amount in Percentage of Ownership Holding Company 23,799, ,999,450 Almost 100% 23,799, ,999,450 Mailing address of owners of Summit Alliance Port Limited is at Summit Centre (7 th Floor) 18 Kawran Bazar Commercial Area, Dhaka Members/shareholders list together with their shareholding position Sl No Shareholder s Name No of Shares 1 Mr. Muhammed Aziz Khan 7 2 Mrs. Sobera Ahmed Rizvi 8 3 Summit Industrial & Mercantile Corporation (Pvt) Ltd 4 4 Mr. Syed Ali Jowher Rizvi 5 5 Mrs. Anjuman Aziz Khan 4 6 Cosmopolitan Traders (Pvt) Ltd. 4 7 Ms. Ayesha Aziz Khan 6 8 Alliance Holdings Ltd. 5 9 Ms. Adeeba Aziz Khan 6 10 Ms. Azeeza Aziz Khan 6 11 Summit Alliance Port Limited 23,799,945 23,800,000 Number of shares owned by the top ten salaried Officers, Directors and all other Officers Number of shares owned by the directors Sl No Shareholder s Name No of Shares 1 Mr. Muhammed Aziz Khan 7 2 Mrs. Sobera Ahmed Rizvi 8 3 Mr. Syed Ali Jowher Rizvi 5 4 Mrs. Anjuman Aziz Khan 4 5 Ms. Ayesha Aziz Khan 6 6 Ms. Adeeba Aziz Khan 6 7 Mr. Latif Khan Nil 8 Mr. Syed Yasser Haider Rizvi Nil 9 Mr. Syed Nasser Haider Rizvi Nil 10 Mr. Faisal Karim Nil 36 No share is owned by any salaried and all other officers. Number of shares to be offloaded by each of the shareholders Summit Alliance Port Limited (SAPL) shall offload upto 11,900,000 Ordinary Shares. No other shareholders shall offload any shares. 36

37 N. Description of Securities Outstanding or Being Offered Dividend, voting and preemption 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, 1994 and the Articles of Association of the Company. Shareholders shall have the usual voting right in person or by proxy in connection with, among others, selection of Directors and Auditors and other usual agenda of General Meeting Ordinary or Extra-Ordinary. On a show of hands, 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. In case of any additional issue of shares for raising further capital under section 155(1) of the Companies Act, 1994, the existing shareholders shall be entitled to rights issue of shares in terms of the Securities and Exchange Commission (Rights Issue) Rules, 2006 issued by the SEC. Subject to the provisions of the Companies Act, 1994, Articles of Association of the Company and other relevant Rules in force, the shares, if any, of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to firms, minors or persons of unsound mind. Dividend, voting and conversion and liquidation rights of any preferred stock outstanding or being offered If the Company at any time issues Preference Shares or Debentures or Bonds with the consent of SEC, such holders of securities shall be entitled to convert such securities into ordinary shares if it is so determined by the Company. Subject to the provisions of the Companies Act, 1994, Articles of Association of the Company and other relevant Rules in force, the shares, if any, of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to firms, minors or persons of unsound mind. Limitations on the Payment of dividends to common or preferred stockholders a) The profit of the Company, subject to any special right relating thereto created or authorized to be created by the Memorandum of Association and subject to the provisions of the Articles of Association, shall be divisible among the members in proportion to the capital paid up on the shares held by them respectively. b) No higher dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may declare a smaller dividend. The declaration of Directors as to the amount of net profit of the Company shall be conclusive. 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. d) The Directors may, from time to time, pay the members such interim dividend as in their judgment the financial position of the company may justify. e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer. 37

38 Other material rights of common or preferred stockholders The Shareholders shall have the right to receive all periodical reports and statements, audited as well as unaudited, published by the Company from time to time. The Directors shall present the financial statements as required under the Law and International Accounting Standards and International Financial Reporting Standards as adopted by the Institute of Chartered Accountants of Bangladesh. Financial Statements will be prepared in accordance with International Financial Reporting/Accounting Standards, consistently applied throughout the subsequent periods and present with the objective of providing maximum disclosure as per law and International Financial Reporting/Accounting Standard to the shareholders regarding the Financial and operational position of the company. In case of any declaration of stock dividend by issue of bonus shares, all shareholders shall be entitled to it in proportion to their shareholdings on the date of book closure/record date for the purpose. 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 (EGM) of the Company as provided under Section 84 of the Companies Act, O. Debt Securities Terms and conditions of debt securities that the company may have issued or to be issued The Company did not issue any debt securities and has no plan to issue any debt securities within next six months. Principal amount, maturity date, interest rate and other features of all debt securities No debt securities were issued; and as such, there are no 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 No debt securities were issued; and as such, there are no 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 No debt securities were issued; and as such, there are no Trustees designated by the indenture for outstanding debt or for debt being offered. 38

39 Financials 39

40 Auditors Report TO SHAREHOLDERS OF OCEAN CONTAINERS LIMITED We have audited the accompanying financial statements of Ocean Containers Limited (the Company), namely, Balance Sheet at 31 December 2008 and the related Profit and Loss Statement, Cash Flow Statement, Statement of Changes in Shareholders Equity and notes thereto for the year ended on that date. The preparation of these financial statements for the Company is the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. we conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements of the Company, prepared in accordance with International Financial Reporting Standards, including International Accounting Standards, give a true and fair view of the state of the Company s affairs as at 31 December 2008 and the results of its operations, its cash flow and changes in its equity for the year then ended and comply with the Companies Act 1994 and other applicable laws and regulations of Bangladesh We also repot that: a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; b. In our opinion, proper books of account as required by law were kept by the Company so far as it appeared from our examination of those books; c. the Balance Sheet, profit and Loss Statement of the Company dealt with by this report are in agreement with the respective books of account; and d. the expenditure incurred was for the purposes of the business of the Company. Dated, Chittagong March 08, 2009 sd/- Basu Banerjee Nath & Co. Chartered Accountants 40

41 OCEAN CONTAINERS LIMITED Balance Sheet As At Decembers 31, 2008 Notes As At Dec As At Dec ASSETS PROPERTY, PLANT & EQUIPMENT 4 1,326,649,410 84,266,099 CURRENT ASSETS Accounts Receivable 5 47,146,278 18,123,359 Inventories 1,722, ,641 Inter-Company Receivables 6 203,206,825 - Advance, Deposits and Prepayments 7 49,706,408 34,296,293 Cash and Cash Equivalents 8 20,483, ,427, ,264, ,151,868 TOTAL ASSETS 1,648,914, ,417,967 SHAREHOLDERS EQUITY & LIABILITIES SHAREHOLDERS EQUITY Issued, Subscribed and Paid-up Capital 9 70,000,000 70,000,000 Revaluation Surplus 993,381, ,150,105 Tax Holiday Reserve - 36,495,657 Retained Earnings 1,183,160 22,776,994 Proposed Stock Dividend 168,000,000 7,000,000 Share Money Deposit - 150,000,000 1,232,564, ,422,756 LONG TERM LIABILITIES Maersk Bangladesh Limited - 26,550,000 IDLC for Lease Finance 2,701,595 - Staff Gratuity Fund 2,291,050 3,351,542 4,992,645 29,901,542 CURRENT LIABILITIES & PROVISIONS Bank Overdraft ,467,288 - Accounts Payable 11 21,415,140 36,149,455 Provision for Taxation 12 96,742,065 60,726,844 Other Payables 13 11,732,465 8,163,340 Short Term Borrowing - 4,054, ,356, ,093,669 Total shareholders equity & liabilities 1,648,914, ,417,967 Contingent Liabilities ,212, ,212,815 Sd/- Sd/- Sd/- Managing Director Director Chief Financial Officer As per our report of the same date Dated, Chittagong March 08, Auditor Sd/- Basu Banerjee Nath & Co. Chartered Accountants 41

42 OCEAN CONTAINERS LIMITED INCOME STATEMENT For the year ended December 31, 2008 Notes Revenues ,805, ,315,886 Operating Expenses ,432, ,421,575 Administrative Expenses 16 53,598,702 33,373,844 Advertisement and Sales Promotion Expenses 5,531, ,010 Financial Cost 17 19,766,278 4,380, ,329, ,644,179 Operating Profit 172,475,787 45,671,707 Other Income 18 3,381,028 1,928,078 Net Profit before tax 175,856,815 47,599,785 Provision for Income (65,946,306) (36,882,901) Net Profit after tax 109,910,509 10,716,884 Transfer from/(to) Tax Holiday Reserve 36,495,657 (834,344) Proposed Stock (2007: Cash) Dividend (168,000,000) (7,000,000) Intangible Benefit - 13,474,817 Balance brought forward from last account 22,776,994 6,419,637 RETAINED EARNING 1,183,160 22,776,994 EARNING PER SHARE As per our report of the same date Auditor Sd/- Sd/- Sd/- Managing Director Director Chief Financial Officer Sd/- Dated, Chittagong March 08, Basu Banerjee Nath & Co. Chartered Accountants 42

43 Ocean Containers Limited Statement Of Changes In Equity For The Year Ended December 31, 2008 Share Capital Revaluation Surplus Tax Holiday Reserve Share Money Deposit Retained Earnings Proposed Stock Dividend Balance as on ,000, ,150,105 36,495, ,000,000 22,776, ,422,756 Net Profit for the year ,910, ,910,509 Further Revaluation Surplus - 542,231, ,231,447 Refund of Share Money Deposit Transfer of Tax Holiday Reserve (150,000,000) Total - - (150,000,000) - - (36,495,657) - 36,495, Proposed Stock Dividend (168,000,000) 168,000,000 - Balance as at ,000, ,381, ,183, ,000,000 1,232,564,712 As per our report of the same date Auditor Sd/- Sd/- Sd/- Managing Director Director Chief Financial Officer Sd/- Dated, Chittagong March 08, Basu Banerjee Nath & Co. Chartered Accountants 43

44 OCEAN CONTAINERS LIMITED STATEMENT OF CASH FLOWS For The Year Ended December 31, A. Cash Flow from Operating Activities: Cash received from Customers and Others 422,163, ,065,267 Cash paid to Suppliers and Employees (242,523,208) (176,828,689) Cash generated from Operation 179,640,091 75,236,578 Income Tax paid (29,931,085) - Interest (paid)/received-net (19,766,278) (4,380,750) Net Cash generated from Operating Activities 129,942,728 70,855,828 B. Cash Flow from Investing Activities: Acquisition of Property, Plant and Equipment Advance, Deposits & Prepayments (124,133,393) (15,410,115) (53,027,597) - Net Cash used in Investing Activities (139,543,508) (53,027,597) C. Cash Flow from Financing Activities: Long term Borrowing repaid (26,550,000) (35,400,000) Short Term Borrowing (repaid)/received (4,054,030) 4,054,030 Inter-Company payment (203,206,825) - Share Money Deposit (refunded)/received (150,000,000) 150,000,000 Dividend paid (7,000,000) - Bank Overdraft received 281,467,288 - Net Cash (used)/generated from Financing Activities (109,343,567) 118,654,030 Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (118,944,347) 136,482,261 Cash and Cash Equivalent at the Beginning of the year 139,427,575 2,945,314 Cash and Cash Equivalent at the End of the year 20,483, ,427,575 As per our report of the same date Auditor Sd/- Sd/- Sd/- Managing Director Director Chief Financial Officer Sd/- Dated, Chittagong March 08, Basu Banerjee Nath & Co. Chartered Accountants 44

45 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Status and Activities Ocean Containers Limited (hereinafter referred to as the Company/OCL ), initially incorporated as a private company on 26 th April 1986, was converted into a Public Company on 18 th January 1992 in terms of the provisions under section 154 of the Companies Act, The Company s registered office at Katghar, Chittagong with Corporate office at Summit Centre, 18 Kawran Bazar C/A. Dhaka Subsequently, to be compliant with the provisions of the Companies Act 1994, the Memorandum and Articles of Association of the Company were amended by adopting special resolution in the Extra Ordinary General Meeting held on August 28, The principal activity of the Company is to provide Off-Dock services as Inland Container Depot (ICD) with facilities for Empty Container Storage and Container Freight Station (CFS) for handling both import and export cargo. 2. Basis of Preparation 2.1 Statement of Compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), including International Accounting Standards (lass), so far issued by the International Accounting Standards Board (IASB). 2.2 Basis of Measurement The financial statements have been prepared on historical cost basis, except property, plant and equipment valued at current cost ; and financial assets and financial liabilities stated at fair value. 2.3 Use of estimates and Judgments The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, the use of estimates and judgments have most significant effect on the amounts recognized in Notes on Property, plant and equipment, Advances, deposits and prepayments. Investment revaluation surplus. Provision for gratuity and Other creditors and accruals. The financial statements are presented in Bangladesh which is the Company s functional and presentational currency. 2.4 Level of precision All financial figures expressed in have been rounded off its nearest value/integer. 2.5 Reporting period The financial period of the Company under this reporting covers the year from 1 January to 31 December

46 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Significant Accounting Policies 3.1 Property, Plant & Equipment Items of Property. Plant and equipment (PPE) are initially measured at cost. After initial recognition, items of PPE are carried at cost less accumulated depreciation and impairment loss Cost includes expenditures that are directly attributable to the acquisition of an item of PPE Sorrowing costs directly attributable to the construction of plants are included in the cost of those plants. Depreciation is recognized in the profit and loss statement on the reducing balance method by the Company over the estimated useful life of each PPE. Rates of depreciation considering the useful lives of PPEs are as follows:- Class of PPE Rate of depreciation 3.2 Lease Assets Furniture & Fixture 15% Buildings and other constructions 10% Vehicle 20% Office Equipment 20% Container Handling Equipment 20% All the lease transactions have been classified based on the extent to which risks and rewards incident to ownership of the assets lie with the lessor or lessee. According to this classification, the lease transactions have been identified as finance lease as per the Bangladesh Accounting Standard No.17: Leases based on the substance of the transactions, not merely the legal form. 3.3 Financial Assets & Financial Liabilities All financial assets and financial liabilities are stated at fair value 3.4 Inventories Inventories are valued at the lower of cost and estimated net realizable value. The cost of inventories is valued at first-in-first-out (FIFO) method and includes expenditures for acquiring the inventories and bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and selling expenses. When inventories are used, the carrying amount of those inventories is recognized in the period in which the related revenue is recognized. 3.5 Retirement benefits The Company operates a contributory provident fund recognized by National Board of Revenue for all its permanent employees, to which both the employees and the employer s equally contribute 10% of the basic pay each, which is invested outside. The Company also operates an unfunded Gratuity Scheme for its permanent employees. provision for which is made on the basis of latest applicable basic and length of service with the Company as per the Gratuity Rule. Though no valuation was done to quantify actuarial liabilities as per the Bangladesh Accounting Standard 19: Employee Benefits, such valuation is not likely to yield a result significantly different from current provision. 46

47 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Taxation Provision for Income Tax has been in the Accounts at the ruling rate prescribed in the Finance Act. Deferred Tax has bot been considered for immateriality. 3.7 Revenue Recognition Policy In compliance with the requirement of BAS 18: Revenue, revenue from customers against services is recognized when rendered. Revenue excludes VAT. 3.8 Accounts Receivable Trade receivables are recognized at cost which is the fair value of the consideration given. 3.9 Cash & Cash Equivalent Cash and cash equivalents comprise of cash in hand and at bank, which are available for use of the Company without any restriction Provisions A provision is recognized on the Balance Sheet Date as a result of past events. The Company has a present legal and constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation Contingencies Contingencies arising from claim, litigation and/or assessment; and are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured. Details of contingencies as on Balance Sheet date are shown separately Financial Income & Expenses Finance Income comprises of interest income on funds invested and is recognized on maturity. Finance Expense comprises of interest expenses on loan, overdraft, finance lease and bank charges. All borrowing costs are recognized using effective interest method except to the extent that are directly attributable to the construction of property, plant and equipment which is capitalized in accordance with BAS23: Borrowing Cost 3.13 Earnings per Share Basic earning per share is calculated by dividing the net profit/loss for the period attributable to ordinary shareholders by the applicable number of ordinary shares outstanding during the period Diluted earnings per share is calculated by dividing the net profit/loss for the period attributable to ordinary shareholders by the applicable number of ordinary shares outstanding during the period after adjustment for the effects of all dilutive potential ordinary shares. 47

48 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Cash Flow Statement Cash flows from operating activities have been presented under direct method 4. OCEAN CONTAINERS LIMITED Fixed Assets Schedule As At December 31, 2008 Land Building and other Constructions Electric Equipment Container Handling Equipment Furniture and Fixtures Office Equipment Motor Vehicles Other Assets Total Opening Block as on ,866, ,357,899 12,321,291 71,642,159 4,989,459 5,637,707 8,020, , ,552,995 Additions during the year - 91,428,203 1,400,000 25,517,035 1,273,759 3,048,343 4,078,000 89, ,834,975 Gross Block as on ,866, ,786,102 13,721,291 97,159,194 6,263,218 8,686,050 12,098, , ,387,970 Accumulated depreciation as on ,058,362 3,997,775 29,942,611 1,527,515 3,092,995 3,241, ,918 88,286,897 Charged during the year - 8,556, ,351 13,490, , ,624 2,206,282 76,259 26,683,110 Deprecation as on ,615,195 4,970,126 43,433,360 2,017,527 3,983,619 5,448, , ,970,007 Net Block as on ,866, ,170,907 8,751,165 53,725,834 4,245,691 4,702,431 6,650, , ,417,963 Further revaluation surplus as on WDV at current cost as on ,481,300 78,595,980-29,154, ,231, ,348, ,766,887 8,751,165 82,880,001 4,245,691 4,702,431 6,650, ,038 1,326,649,410 Depreciation is allocated as below Operating Expenses 22,772,048 15,793,221 Administrative Expenses 3,911,076 6,768,523 26,683,124 22,561,744 S.F. Ahmed & Co. Chartered Accountants and Values, an associate firm of Earnest and Young, have revalued the land, Building and Other Construction and Container Handling Equipment of the Company as of following the current cost accounting method. The revaluation resulted into a further revaluation surplus aggregating Tk. 542,231,447 as of

49 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Accounts Receivable-Tk. 47,146,278 This amount represents dues from various clients against services rendered. Party wise break-up of the receivable is as under. Particulars 2008 APL/NOL (Bangladesh) LTD 88,740 APM Global Logistics Ltd. 5,219,530 AMMS International (1,285) AFS Logistics 82,366 ABX Logistics 4,842 Atlas Navigation (42,154) B.S. Shipping Lines Ltd. 1,315,340 Bengal Air Freight 32,760 BS Cargo Agency 2,133,291 Bangladesh Shipping Agency (381,115) Baridhi Shipping lines Ltd 531,513 Barwil-QC-Agencies 514,588 BD Shipping Corporation 42,805 BD Shipping Lines Ltd 376,530 Birds Bangladesh Agencies 154,769 Bentrans Limited 21,642 Becon Shipping Ltd 23,820 Cosco BD Ltd 1,307,205 Columbia Enterprise 451,521 Continental Traders 71,135 Cosmopolitan Traders Pvt Ltd. 288,622 Dart Express 381,316 DSV Air & Sea Ltd. 88,595 Expeditor 33,855 EP Carrier Pvt ltd 766,533 Everbest Shipping 595,620 Eastern Maritime 904,350 Eastern Overseas 114,158 Emirates Shipping Lines Ltd. 65,520 Eleven Eagle Bangladesh Ltd 63,455 Freight System Co. Ltd. 38,371 Freight Management 15,870 Freight master 21,005 Fair Max Shipping 5,865 GP Shipping 91,547 Integrated Trans (456,167) Intermodal Pte. Ltd. 1,588,278 Jardine Shipping Service BD. Ltd 4,580,202 JBS Associates 894,410 KD Shipping Agencies 90,713 K Linde 204,477 Kerry Fareast 10,439 Maersk Bangladesh Ltd 2,911,771 Marvel Freight 278,062 Mariners Cargo 35,270 Maritime Delivery Services Ltd. 7,650 Manuma Shipping Lines Ltd. 7,700 Maxicon Container Line Ltd. (964,115) 49

50 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, 2008 Multi Freight Ltd. 10,910 N Y K Lines BD Ltd 1,279,077 NYK Logistics Ltd 50,500 Nash Logistics 319,438 NMC BD LTD 118,821 Ocean International Ltd 615,685 Omni Shipping Lines Ltd. 39,876 Omnitrans International Ltd 404 Ocean Kings Shipping Ltd. 5,405 Peninsular Shipping Services 2,671,486 PIL BD Ltd 144,430 P&O Nedlloyed Logistics 1,375 Q.C Shipping limited 726,302 QC Maritime/Logistics Ltd. (73,804) Regensea Lines Ltd 114,359 RR Freight Ltd. 10,915 S.S.Shipping & Trading 7,220 Safe Shipping 351,680 Saybolt Express 12,358 Sunship Agencies 9,700 Sea Borne Pvt Ltd 1,587,004 Sea Glory Shipping Ltd. 2,552,782 Sea Star Shipping Ltd 965,716 Shaw Wallace Shipping Ltd - Spence Mac BD Pvt Ltd 589,528 SW Shipping Ltd 4,309,698 Solidan Marine Ltd. 83,531 Scan Well Logistics (20,050) SG Logistics Ltd. 7,790 TAL International Ltd. 5,749 Transport Teamworld wide 2,737,076 The Royal Danish Embassy 237,308 Trad Clippers Cargo Ltd. 653,715 The Orient Containers Line (29,547) Total Transportation Ltd 1,886,547 Top Star 600 Titan Transportation (744,826) Tajarat Shipping Lines Ltd. 68,004 Transmarine Logistics Ltd 74,107 Tricon Global Logistics Ltd. 63,729 Transliner Ltd. 3,560 Transasia Ltd. 4,580 Traffic Tech Ltd 20,670 Ultra Marine 65,336 Uni Bengal 9,221 UTI Pership 251,113 Vega Marine 72,586 UPS SCS (BD) Ltd. 511,495 Unique Logistics Ltd 27,085 World Gate Express BD. Ltd. 71,199 Wings Logistics Ltd. 25,440 Wings Air Cargo 28,180 TOTAL 47,146,278 50

51 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Inter Company Transaction Tk. 203,206,825 Name of Company Global Beverage Co. Ltd. 71,277,053 - Summit Industrial and Mercantile Co. ( Pvt ) Ltd. 64,453,125 - Alliance Holdings Ltd. 64,453,125 - Summit Alliance Port Ltd. 3,023,522 - Total 203,206, Advance, Deposits and Pre-payments Tk. 49,706, ADVANCES Advance against Construction Work 140,000 - Advance against land purchase 2,335,000 - Advance against Software Development 689,595 - Advance against transport bill 800,000 - Advance against expenses 77,954 - Advance against lease rent 399,035 - Advance against land development 279,311 - Advance against Salary & Allowances 973,102 18,234 Advance Income Tax 475,626 26,369,407 Other Advance -VAT 9,728,990 3,785,676 Advance against Import - 80,046 TOTAL 15,898,613 30,253,363 DEPOSITS VAT current A/c. 3293/VAT/2005 1,356, ,959 L/C Margin Deposit 31,065,488 2,037,000 Security Money Deposit 397, ,210 TOTAL 32,819,143 3,392,169 PRE-PAYMENTS Pre-Payment Insurance Premium 79, ,720 Pre-Payment Renewal Fee 509,925 39,225 Import duty - 186,400 L/C Commission & Bank charges 195, ,563 L/C Insurance Premium 203, ,853 TOTAL 988, ,761 GRAND TOTAL 49,706,408 34,296,293 51

52 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, CASH AND CASH EQUIVALENT Tk. 20,483, Cash in Hand 1,324,934 2,534,421 Cash at Bank : Southeast Bank Ltd., Agrabad Branch, Chittagong. 172, ,860 A/c. No Standard Bank Ltd. A/c. No ,339, ,200 Standard Chartered Bank, Agrabad Branch, Chittagong. A/c. No ,744, ,367 Standard Bank Ltd. A/c. No ,689, ,055 Uttara Bank Ltd. A/c. No ,881,617 2,163,097 HSBC A/c. No ,827, ,773 Bank Asia Ltd, EPZ Branch A/c. No ,201,457 - Standard Bank Ltd. A/c. No ,485 70,485 Total 17,926,191 4,336,836 Fixed Deposits (F.D.R.) Southeast Bank Ltd (Agrabad Branch, Chittagong) 1,232, ,556,318 Grand Total 20,483, ,427, Share Capital: Tk. 70,000,000 Authorised : ,000,000 Ordinary Shares of Tk.10/- each 500,000, ,000,000 (2007: 15,00,000 shares of Tk.100/- each) Issued, Subscribed & Paid-up: The Break down of the amount is given below: 2,000,000 Ordinary Shares of Tk.10/- each fully paid up in cash 20,000,000 20,000,000 5,000,000 Ordinary Shares of Tk.10/- each fully paid up other than in cash (Bonus Shares) Obtained consent from Securities and Exchange Commission, Dhaka vide their consent No SEC/CI/CPLC-86/2005/104 dated September 03, ,000,000 50,000,000 a) There was no movement of issued share capital during the year ,000,000 70,000,000 52

53 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, 2008 b) Composition of Shareholding Name of Shareholder No. of Shares % No. of Shares % Mr. Muhammed Aziz Khan 50, , Mr. Syed Ali Jowher Rizvi 1,117, , Mrs. Anjuman Aziz Khan 525, , Summit Industrial and Mercantile Corp. (Pvt.) Ltd. 525, , Cosmopolitan Traders (Pvt.) Ltd. 525, , Ms. Ayesha Aziz Khan 625, , Mrs. Sobera Ahmed Rizvi 504, , Alliance Holdings Limited 1,820, , Ms. Adeeba Aziz Khan 625, Ms. Azeeza Aziz Khan 625, ,000, , Overdrafts Tk. 281,467,288 This was taken from Standard Bank Limited, Agrabad Branch, Chittagong with a limit of Tk crore, carrying an interest rate 15% per annum at quarterly rest, re-payable within one year. This was secured by a charge over acres land of the company. 53

54 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Accounts Payable Tk. 21,415, A.N. Container Services 234,595 Al-Siraj Container Paripahan - Altaf Glass House 228,525 ASMA Enterprise 9,580 Arthaneety Gabeshana 15,000 Bang Link Phones 4,691 Bangladesh T&T Board 31,544 Basu Banerjee Nath & Co. 152,500 Bangladesh Telecom 8,500 Bangladesh Power Development Board 396,943 Chittagong Enterprise 837,115 Cholontica Transport 364,825 City Furnniture 82,450 Custom VAT 1,177,597 Dolphin Contr. Transport 672,920 Eastern Engineering 16,087 HMS Enterprise 263,360 HRS Enterprise 600 Hossain & Co. 17,000 Iqbal & Brothers 325,405 Ismail & Co. 1,008,412 Ismail & Co-Land 2,660,504 Iron Built Building 1,978 Islam Chowdhury 160,965 Janani Enterprise 622,255 Jaya Enterprise 388,990 Jabbar Khan 11,000 Jumana Mobil Suppliers 62,408 Janani Computer 26,740 K.G.N. Mover Container Services 200 Lokman Brothers 567,890 M.F. Enterprise 718,715 M.N. Containers Services 451,790 Mahbubul Alam 97,510 MFDF Trnansport Co. 524,665 Multi Logitics 550 Maher Containers Service (1630) Mcdonald Steel Building Product Ltd. 223,037 MH Chowdhury 1,260 Nabajug Container Transport 289,520 Ocean Transport Company 765,626 Parichay 64,129 Priota Container Transport 1,735,880 Project Link Sevvices Ltd. 1,403,980 Patenga Development & Bhai Bhai 1,406,505 54

55 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, 2008 PICDA 24,000 Rupum Enterprise 2,400 Real Container Service 5,670 Reliance Transport Co. 5,580 Rise offset 40,240 Regal Transtrade Pvt. Ltd. 15,720 Samsul Alam 265,175 Sea Land Carriers 226,410 Sea View Container 517,095 Shakil Automobiles 2,130 Shibali Enterprise 76,250 SM Container Transport 113,660 Sohaim Enterprise 434,200 Sinthea Traders (Labour) 725,756 Shazeed Computer 50,860 Shah Computer 2,200 Shawan Akter (9,000) Shaikat Filling Station (12,000) The Simco Refrigeration 720,518 Van Ommeren Tank Terminal 176,160 TOTAL 21,415, Provision for income Tax Tk. 96,742,065 Particulars Opening Balance 60,726,844 41,617,985 Provision for the Year 65,946,306 19,108, ,673,150 60,726,844 Paid (29,931,085) - Closing Balance 96,742,065 60,726,844 55

56 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Other Payables-Tk 11,732, Salary & Allowance Payable 3,345,070 2,875,582 Provident Fund trust 315, ,659 Performance Incentive Payable 3,300 - Un-paid Salary 43,570 25,833 Expense Payable (Ctg.) 111, ,707 Escorting Charges Payable 90, ,150 Holiday Allowance Payable 366,053 - Expenses Payable (Dhk) 873,547 2,339,915 Miscellaneous payables 4,929,551 - AIT Deducted from Parties 601,830 - AIT deducted at Source against Salary 422, ,440 Security Charges Payable - 700,640 Interest Payable to MSK BD. Ltd ,125 Security Money against stand by labour - 271,799 Directors Remuneration Payable 630, ,490 11,732,465 8,163, Revenue Tk. 447,805, Transportation to CPA 29,425,880 20,852,493 Lift on / off Charges 16,122,327 5,213,123 Custom Documentation 13,278,815 2,606,562 Ground Rent 26,496,020 11,464,417 Laden Container Stuffing Charges & Transportation 124,062, ,452,120 Labour Charges 60,277,778 13,970,333 Ship Landing Charges Received 56,722,234 30,236,115 Space Rent - 59,082 Shut-out-charges 475, ,641 Commission Received-Empty Container 12,915,806 - Entry and Exit Fee 2,619,076 - Import Container Handling 27,406,253 - Survey Charges 855,246 - Ground Rent- Import 41,984,504 - Licence Measurement charge 1,592,574 - Lift on and Off-Import 9,800,300 - Movement Charge 5,946,154 - Import Transportation 689,200 - Hook Point Delivery 544,250 - Laden Storage 4,296,639 - Laden Lift on/off 5,073,590 - Custom Documentation on laden 7,220,013 - Total: 447,805, ,315,886 56

57 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Operating Expenses Tk. 196,432, Container Transportation Charges OCL-CPA-OCL 69,384,238 62,333,014 Transportation Charges othe Depot - 139,312 Labour Charges 27,141,653 21,923,442 Daily Labour 194,375 2,357,570 Salary and Allowances 25,804,529 17,785,978 Employer s Contribution to P.F. 1,183,926 1,108,410 Lift on/off charges - 1,776,588 Security Charges 2,696,936 3,786,488 Custom Misc. Exp. 159,500 - Uniform Expenses 148,893 - Crane Hire Charges - 332,637 Leave Allowance 534,071 - Festival Bonus 3,972,339 2,767,495 Holiday and Night Allowances 5,085,024 4,245,098 Electricity and Water Bill 3,377,428 2,140,916 C&F Charges 656,172 13,150,791 C&F Charges other Depot - 20,614 Fuel Expenses 11,585,844 7,447,424 Repair & Maintenance 7,773,983 3,430,236 Maintenance of Electric Works 2,488,257 1,469,607 Insurance Premium 307, ,435 Depreciation 22,772,048 15,793,221 Custom Documentation charges 1,091,680 72,989 Port Exit Entry Fee 3,100,930 - Gratuity Expenses 883,218 - Off Dock Charges - 9,045,808 Container Placement 419,739 - Claim & Demmurage 1,175,790 - Repair & Maintenance - Depot. 4,494,688 1,027, ,432, ,421,575 57

58 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Administrative Expenses Tk. 53,598, Salary and Allowances 9,680,686 7,029,580 Directors Remuneration 7,560,000 2,640,000 Travelling Expenses 6,305,381 1,212,945 Vehicle Running & Maintenance Cost 3,895,972 2,523,017 Conveyance 589,723 1,016,734 Donation 1,380, ,811 Telephone 1,427,900 1,484,277 Communication Expenses 292, ,242 Entertainment 2,902,058 1,924,173 Legal Fee 173,365 19,426 Renewal Fee 74, ,163 Audit Fee 28,750 57,501 Professional Fee 522,630 57,499 Newspaper, Books & Periodicals 62, ,990 Postage 41, ,472 Printing 95, ,432 Stationery 2,642,783 1,113,244 Medical Expenses 157, ,622 Bank Charges 30,120 46,377 Rent, Revenue, Taxes & Fees 175, ,520 Depreciation 3,911,062 6,768,523 General Expenses 3,187, ,390 Festival Allowances 2,668,462 1,180,659 Gratuity Expenses 1,311,790 - Customs Overhead 1,054, ,445 Office Rent 508, ,106 Board Meeting Expenses 85, ,080 Employer s Contribution to P.F. 252, ,871 Holiday & Night Allowances 562, ,515 Subscription to PICDA & Others 36,500 41,625 Directors Fee 120, ,000 Club Subscription 53,727 65,411 Consultancy Fee 180,000 20,000 Rainy Goods 81,825 - Utility for M.D. 280, ,071 Quality Certification (ISO) 36,262 89,196 Software Expenses 291,138 - H R Development Cost 92, ,339 Training Fee - 507,588 Employee Income Tax 843,500-53,598,702 33,373,844 58

59 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Financial Expenses Tk.19,766, Interest on Dues-Maersk BD Ltd. 730,125 4,380,750 Interest on Bank Overdraft-Standard Bank Ltd. 16,622,532 - Interest on Lease Finance 921,195 - Interest on LTR 6,675,729 - Interest on Inter Company Receivables (5,183,303) - 19,766,278 4,380, Other Income Tk. 3,381, Interest on STD 262, ,147 Interest on Fixed Deposits 3,118,641 1,078,931 3,381,028 1,928, Contingencies Contingent Liability exists on 31 st December 2008 on account of Municipal Tax and Vat as detailed bellow: 1. Claim raised Chittagong City Corporation on account of Municipal Tax, Holding Tax & Other Levies 27,053, Claim of VAT Authority challenged before the Higher Authority: (i.) (ii.) (iii.) (iv.) Case No.54/musak/aniom/2000 dated challenged by writ petition before High Court vide no of 2005 Case no. 4 th /A(12)/39/musak/OCL/2002/1181 dated pending before High Court against Writ No of 2006 Case No. 156/musak/aniom/05 dated pending before Customs, Excise & VAT Appellate Tribunal, Dhaka Case no. 4 th /A(12)/39/musak/OCL/2002/1845 dated pending Hearing in Appeal 16,768,340 5,397,670 19,882,591 62,110, ,212, Related Party Transactions There was no related party transaction during the year 2008 except proportionate allocation of Salary & Allowances on account of employees of Summit Alliance Port Limited, a related Company, involved in common services such as Finance, HR, IT and Administration. During the year under review, such allocation amounted to Tk. 2,217,600/- 59

60 OCEAN CONTAINERS LIMITED Notes to the Financial Statements for the year ended December 31, Post Balance Sheet Events a) The Directors recommended Stock Dividend at 240% (2.4 Bonus Shares for 1 Share held). The dividend proposal is subject to Shareholders approval at the forthcoming Annual General Meeting and SEC s consent to the issue. b) Except the fact stated above, no circumstance have arisen since the Balance Sheet date which would require adjustment to, or disclosure in, the financial statements or notes thereto. 22. General All the 312 regular employees of the Company as on 31 st December 2008 received annual salary in excess of Tk /-. Previous year s phrases and figures have been re-arranged, where necessary to conform to current year s. Presentation. Figures appearing in these financial statements have been rounded off to the nearest. Selected Ratios AUDITORS CERTIFICATE ON COMPARATIVE FINANCIAL STATEMENTS OF OCEAN CONTAINERS LIMITED We have examined the following ratios of OCEAN CONTAINERS LIMITED for the years ended December 31, 2004 through 2008 which have been computed by the management of the company based on its financial statements for those years. Based on our examination, we certify that the following Ratios have been properly computed by the company based on its financial statements for the years ended December through 2008 audited and reported upon by us: Ratios Liquidity Ratios: Current Ratio Quick Ratio Operating Ratios: Accounts Receivable Turnover Ratio Inventory Turnover Ratio Assets Turnover Ratio Profitability Ratios: Gross Margin Ratio 56.13% 32.73% 24.01% 24.33% 24.44% Operating Income Ratio 38.52% 17.82% 6.22% 6.24% 5.12% Net Income Ratio 39.27% 18.57% 6.22% 6.24% 5.12% Return on Assets Ratio 10.67% 5.43% 1.93% 1.79% 1.29% Return on Equity Ratio 8.92% 1.47% 1.47% 1.51% 1.51% Earnings Per Share (EPS) Solvency Ratios: Times Interest Earned Ratio Debt to Equity Ratio Bad debt Ratio Sd/- Sd/- Sd/- Chairman Managing Director Chief Fiancial Officer Auditor Sd/- Basu Banerjee Nath & Co. Chittagong, 15 June 2009 Chartered Accountants 60

61 COMPARATIVE FINANCIALS Comparative Balance Sheet, Profit & Loss Account and Cash Flow Statement for immediate preceding five accounting years (31 December 2004 through 2008) 61

62 62

63 AUDITORS CERTIFICATE ON COMPARATIVE FINANCIAL STATEMENTS OF OCEAN CONTAINERS LIMITED We have examined the comparative financial statements of Ocean Containers Limited for the years ended 31 December 2004 through 2008 which have been extracted by the Management of the Company from its financial statements for those years. Based on our examination, we certify that the comparative financial statements have been properly extracted by the Company from its financial statements for the years ended 31 December 2004 through 2008 audited and reported up on by us. Equity and Liabilities Shareholders Equity 2008 Balance Sheet as at 31 December Share Capital 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000 Share Money Deposit - 150,000, Tax Holiday Reserve - 36,495,657 35,661,313 34,339,300 33,307,720 Proposed Bonus Shares 168,000, Retained Earnings 1,183,160 22,776,994 13,858,637 9,882,352 5,843,922 Revaluation Surplus 993,381, ,150, ,150, ,150, ,150,105 Non-Current Liabilities ,232,564, ,422, ,670, ,371, ,301,747 Lease Finance Liabilities 2,701, Other Long-Term Liabilities 2,291,050 26,550,000 61,950,000 97,350, ,750,000 Current Liabilities Long-term Liabilities- 4,992,645 26,550,000 61,950,000 97,350, ,750,000 Current Maturity - 3,351, Short Term Loan 281,467, Proposed Dividend - 7,000,000 7,000,000 7,000,000 4,900,000 Payables and Accruals 129,889, ,093,669 61,301,296 27,844,065 95,280,853 Total Liabilities and Shareholders Equity Property and Assets Non-Current Assets Fixed Assets at Cost 411,356, ,445,211 68,301,296 34,844, ,180,853 1,648,914, ,417, ,921, ,565, ,232,600 less depreciation 1,326,649, ,266, ,791, ,043, ,259,224 Current Assets Inventories 1,722, , ,816 99, ,351 Accounts Receivables 47,146,278 18,123,359 11,944,662 18,286,954 13,194,261 Inter Company Account 203,206, ,500,000 Advances, Deposits and Prepayments 49,706,408 34,296,293 32,073,385 19,386,085 56,096,619 Cash and Bank Balances 20,483, ,427,575 2,945,314 1,750,079 51,071, ,264, ,151,868 47,130,177 39,522, ,973,376 Total Property and Assets 1,648,914, ,417, ,921, ,565, ,232,600 Sd/- Sd/- Sd/- Chairman Managing Director Chief Fiancial Officer Chittagong, 15 June 2009 Auditor Sd/- Basu Banerjee Nath & Co. Chartered Accountants 63

64 OCEAN CONTAINERS LIMITED Income Statement for the year ended 31 December Turnover Revenue 447,805, ,315, ,019, ,322, ,464,183 Operating Expenses: Operating Expenses (196,432,513) (172,421,575) (165,666,518) (151,581,959) (150,706,000) Gross Profit 251,372,677 83,894,311 52,352,894 48,740,086 48,758,183 Administrative, Selling and Financial Expenses Administrative & Selling Expenses 59,130,612 33,841,854 30,519,894 24,072,286 22,674,000 Interest Expenses 19,766,278 4,380,750 8,274,750 12,168,750 15,870,000 78,896,890 38,222,604 38,794,644 36,241,036 38,544,000 Net Profit 172,475,787 45,671,707 13,558,250 12,499,050 10,214,183 Other Income 3,381,028 1,928, Net Profit before Income Tax Provision 175,856,815 47,599,785 13,558,250 12,499,050 10,214,183 Provision for Income Tax (65,946,306) (36,882,901) (5,159,952) (3,968,040) (2,670,736) Net Profit after Income Tax 109,910,509 10,716,884 8,398,298 8,531,010 7,543,447 Sd/- Sd/- Sd/- Chairman Managing Director Chief Fiancial Officer Chittagong, 15 June 2009 Auditor Sd/- Basu Banerjee Nath & Co. Chartered Accountants 64

65 OCEAN CONTAINERS LIMITED Cash Flow Statement For the year ended, 31 December Cash Flows from Operating Activities Collection from Customers 422,163, ,065, ,361, ,139, ,722,467 Payments for Costs & Expenses (242,523,208) (169,828,689) (160,014,107) (162,941,225) (205,272,322) Interest Paid (19,766,278) (4,380,750) (8,274,750) (12,168,750) (15,870,000) Income Tax Paid (29,931,085) - (2,100,000) (945,829) (300,000) Net Cash generated/(used) from Operating Activities 129,942,728 77,855,828 53,972,847 19,083,548 (20,719,855) Cash Flows from Investing Activities Acquisitions of Fixed Assets (124,133,393) (53,027,597) (10,377,612) (28,104,614) (27,233,253) Advance, Deposits and Pre-payments (15,410,115) Net Cash used in Investing Activities (139,543,508) (53,027,597) (10,377,612) (28,104,614) (27,233,253) Cash Flows from Financing Activities Receipts/(Redemption) against Share Money Deposits (150,000,000) 150,000, ,000,000 Short Term Borrowings (4,054,030) Dividend Paid (7,000,000) (7,000,000) (7,000,000) (4,900,000) - Borrowing from/(repayments to) (26,550,000) (31,345,970) (35,400,000) (35,400,000) (85,838,333) Bank Overdraft 281,467, Inter Company Payment (203,206,825) Net Cash (used in)/provided by Financing Activities (109,343,567) 111,654,030 (42,400,000) (40,300,000) (35,838,333) Net changes in cash & cash equivalents (118,944,347) 136,482,261 1,195,235 (49,321,066) (83,791,441) Cash & Cash equivalents at beginning of the year 139,427,575 2,945,314 1,750,079 51,071, ,862,586 Cash & Cash equivalents at end of the year 20,483, ,427,575 2,945,314 1,750,079 51,071,145 Sd/- Sd/- Sd/- Chairman Managing Director Chief Financial Officer Chittagong, 15 June 2009 Auditor Sd/- Basu Banerjee Nath & Co. Chartered Accountants 65

66 Q. FINANCIAL FORECAST: Financial Forecast for the succeeding five accounting years OCEAN CONTAINERS LIMITED Forecast Balance Sheet as at 31 December Share Capital 70,000, ,000, ,000, ,000, ,000, ,000,000 Proposed Bonus Shares 168,000, Retained Earnings 1,183, ,103, ,760, ,930, ,796, ,745,642 Revaluation Surplus 993,381, ,381, ,381, ,381, ,381, ,381,552 1,232,564,712 1,340,484,628 1,471,142,293 1,643,311,887 1,856,177,857 2,136,127,194 Staff Gratuity Fund 2,291,050 2,291,050 2,291,050 2,291,050 2,291,050 2,291,050 Lease Finance Liabilities 2,701,595 1,682, , Long-term Bank Borrowings ,992,645 3,973,766 2,779,363 2,291,050 2,291,050 2,291,050 Short-term Loan 281,467,288 78,260, Proposed Dividend - 47,600,000 47,600,000 47,600,000 47,600,000 47,600,000 Provision for Taxation 96,742, ,732, ,347, ,708, ,505, ,748,524 Payables and Accruals 33,147,605 24,931,119 27,424,231 30,434,202 41,598,647 59,737, ,356, ,523, ,371, ,742, ,704, ,085,834 1,648,914,315 1,600,982,353 1,672,293,240 1,880,345,375 2,148,173,225 2,510,504,078 Fixed Assets 1,326,649,410 1,382,584,675 1,358,807,945 1,435,366,098 1,459,424,251 1,431,232,404 Intangible Assets Long-term Security Deposit ,326,649,410 1,382,584,675 1,358,807,945 1,435,366,098 1,459,424,251 1,431,232,404 Inventories 1,722,166 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Accounts Receivables 47,146,278 54,389,168 59,828,085 69,400,579 73,186,065 87,823,278 Advance, Deposits and Prepayments 49,706, Inter- Company Receivables 203,206, Cash and Bank Balances 20,483, ,008, ,657, ,578, ,562, ,448, ,264, ,397, ,485, ,979, ,748,974 1,079,271,674 1,648,914,315 1,600,982,353 1,672,293,240 1,880,345,375 2,148,173,225 2,510,504,078 Net Asset Value Per Share (NAV) 1,

67 OCEAN CONTAINERS LIMITED Forecast Income Statement For The Years Ended December31,2008 Through Turnover 447,805, ,446, ,891, ,914, ,860, ,232,770 Direct Expenses (196,432,513) (212,811,605) (230,615,766) (253,180,692) 288,008,224) (329,743,994) Gross Profit 251,372, ,635, ,275, ,733, ,852, ,488,776 Administrative, Selling and Financial Exp Administrative Expenses 53,598,702 54,974,860 60,709,660 67,240,207 76,489,743 87,787,390 Selling Expenses 5,531,910 6,085,101 6,693,611 7,362,972 8,099,269 8,909,196 Financial Expenses 19,766,278 6,065, ,896,890 67,125,147 67,403,271 74,603,179 84,589,012 96,696,587 Other Income 3,381, Net Profit Before Tax 175,856, ,510, ,872, ,130, ,263, ,792,190 Income Tax 27.50% ( From 2009 onward ) (65,946,306) 58,990,313) (67,614,976) (83,360,881) (98,797,437) (124,242,852) Net Profit after Tax 109,910, ,519, ,257, ,769, ,465, ,549,338 Transfer from Tax Holiday Reserve 36,495, Proposed Dividend (168,000,000) (47,600,000) (47,600,000) (47,600,000) (47,600,000) (47,600,000) Surplus for the year (21,593,834) 107,919, ,657, ,169, ,865, ,949,338 Balance brought forwarded from last account 22,776,994 1,183, ,103, ,760, ,930, ,796,305 Balance Carried forward 1,183, ,103, ,760, ,930, ,796, ,745,642 Earning per share (EPS)

68 OCEAN CONTAINERS LIMITED Cash Flow Forecast For the years ended, 31 December 2008 through Cash Flows from Operating Activities Collections from Customers 422,163, ,204, ,452, ,341, ,075, ,595,558 Payments for Cost and Expenses (242,523,208) (257,805,509) (271,749,195) (301,332,052) (335,490,945) (380,110,070) Income Tax Paid (29,931,085) (50,000,000) (50,000,000) (50,000,000) (55,000,000) (60,000,000) Interest Paid (19,766,278) (6,065,185) Net Cash Generated from Operating Activities 129,942, ,333, ,703, ,009, ,584, ,485,487 Cash Flows from Investing Activities Acquisitions of Fixed Assets (139,543,508) (30,789,235) - (100,000,000) (50,000,000) - Long-term Security Deposits Received Net Cash Used in Investing Activities (139,543,508) (30,789,235) - (100,000,000) (50,000,000) - Cash Flows from Financing Activities Repayment of Debenture/Share Money Deposit (150,000,000) Repayment of Lease Finance - (1,018,879) (1,194,403) (488,314) - - Loan to Inter Companies (203,206,825) 203,206, Borrowings from/repayments to Bank and others 250,863,258 (203,206,825) (78,260,463) Dividend Paid (7,000,000) - (47,600,000) (47,600,000) (47,600,000) (47,600,000) Net Cash Used in Financing Activities (109,343,567) (1,018,879) (127,054,866) (48,088,314) (47,600,000) (47,600,000) Net Changes in Cash and Cash Equivalents (118,944,347) 141,525,282 89,648, ,921, ,984, ,885,487 Cash and Cash Equivalents at beginning of the year 139,427,575 20,483, ,008, ,657, ,578, ,562,909 Cash and Cash Equivalents at end of the year 20,483, ,008, ,657, ,578, ,562, ,448,396 Operating Cash Inflow per share

69 Credit Rating & Report 69

70 70

71 R. Credit Ration Report Address: CRISL Nakshi Homes (4th Floor), 6/1A, Segunbagicha, Dhaka-1000 Tel: Fax: Analysts: Sk.Md.Lutful Kabir Khandakar Aminul Islam Ahsanul Arefin Entity Rating: Long Term: A+ Short Term: ST-2 Rating based on financials of 2008 OCEAN CONTAINERS LIMITED PRINCIPAL ACTIVITY Off-Dock Operation INCORPORATED ON April 26, 1986 BOARD CHAIRPERSON Mr. Muhammad Aziz Khan MANAGING DIRECTOR Mr. S. A. J Rizvi EQUITY Tk. 1, million REPORT : RR/269/09 This is a credit rating report as per the provisions of the Credit Rating Companies Rules The Long Term and Short Term Ratings of the company are valid for one year and six months respectively. After the above periods, these rating will not carry any validity unless the company goes for rating surveillance. Long Term Short Term Entity Rating A+ ST-2 Outlook Positive Date of Rating June 17, RATIONALE CRISL has assigned A+ (pronounced as A plus) rating in the Long Term and ST- 2 rating in the short term to Ocean Container Limited (hereinafter referred OCL ) based on financials and other relevant quantitative and qualitative information. The above ratings have been done on the basis of its some good fundamentals such as sound equity based capital structure, good operational and financial performance, experienced management team, good debt servicing history, outstanding market share with good franchise value, efficient service infrastructure etc. However, the above ratings have been moderated, to some extent, by few concerns like significant contingent liability, increased financial cost, etc. Entities rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile having good earning prospects. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. The short term rating indicates that the high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. OCL has been in operation with good financial and operating performance since long and recent permission of handling import oriented operation further boosted its performance. In result, the revenue of the company increased to Tk million in FY 2008 from Tk million in YE2007 with a growth rate of 74.71%. The after-tax profit increased to Tk million in FY2008 from Tk million in FY 2007 with a growth of about 10 times. With the dynamic leadership of its sponsors, the company holds good market share and maintains relation with renowned clients. The service infrastructures, including modern IT system is also considered as a competitive advantage for the company compared to its competitors. The sound equity base (i.e. almost 75% contributed) of the company without having any noticeable long term liability made its capital structure stronger. Liquidity of the company has been deteriorated to some extent during FY2008, mainly due to finance its inter-companies and also for capital expenditure; hence an overdraft facilities equivalent to Tk million was enjoyed during FY However, the management confirmed that except other dues of tk million from Summit Alliance Port Limited, the entire inter company receivables as on 31st December 2009 have been realized. A contingent liability of about Tk million arisen for tax and vat liability may expose financial risk in future, however, OCL perceives that it will get relieve from the above claim. CRISL perceives that in view of growing import-export business vis-à-vis proposed expansion plan, the company will be able to continue its business at accelerated rate and CRISL placed the company under its positive outlook. 71

72 2.0 CORPORATE PROFILE 2.1 The Genesis Leading off-dock operator Ocean Container Limited, an almost fully owned company of Summit Alliance Port Limited (hereinafter referred SAPL ), engaged in off-dock operation since 1995 after its incorporation on April 26, 1986 as a private limited company and of late, it was converted to Public Limited Company on January 18, Although, OCL started journey about 12 years before SAPL s inauguration with a bigger operation in size, on April 26, 2009, SAPL acquired almost 100% share of OCL in exchange of its share. Both OCL and SAPL are functioning under the same ownership and management since inception in separate premises under the joint ownership of two business groups namely Alliance Holdings and Summit Group. Now it appeared as one of the largest off-dock operators and currently handling almost 25% of the country s containerized export cargo and 10% of containerized import cargo. SAPL is the first private sector off-dock operator in the capital market through direct listing and OCL has been conceptualized to be the second one in the same area of business. In view of its good market image and strong group support from both Summit and Alliance Holdings, the company took an easy access in the business arena. Summit Group has already created its brand image in view of its premier role in implementing large infrastructure projects successfully in power, gas, port and others sectors. Alliance Holdings is also a successful business house specially concentrating in infrastructure projects, gas pipeline construction, carbonated soft drinks. Initially OCL concentrated in handling of empty container and Container Freight Station ( CFS ). Recently it also got permission to handle import oriented operation from Chittagong Port Authority ( CPA ). As on December 31, 2008, the authorized and paid-up capital of OCL stood at Tk. 500 million and Tk. 70 million respectively. Considering the bonus share of 240% during 2008, its current paid up capital increased to Tk. 238 million. Now SAPL is going to off load 25% of OCL share through direct listing. The off-dock premise is located at Katghar, North Patenga Chittagong on 14.acres of land and Head Office at summit centre in Dhaka. 2.2 Ownership Pattern Almost 100% owned subsidiary company of SAPL As mentioned earlier, OCL is almost a 100% owned subsidiary company of SAPL; therefore, full ownership and management control is now with SAPL. SAPL acquired 23,799,945 share of OCL out of its total share of 23,800,000 and the balance 55 share are held by the OCL s sponsor shareholders/ directors in order to keep the existence of OCL as a public limited company. Before this acquisition, OCL was a joint initiative with equal share holding of two renowned local business Groups namely Summit Group and Alliance Holdings and share holding are concentrated among the sponsors and a few sister concerns of the above business Groups. 2.3 Infrastructures Sound service infrastructures OCL has been operating since long with sound infrastructure having most modern container handling equipment. The company is on 14 acres of custom bonded freehold land divided into two zones i.e. Inland Container Depot (ICD) zone of 4.67 acres for storing empty dry and empty reefer containers. In addition to the above, un-stuffing of imported cargo and repairing of the damaged containers are also done in this zone. The CFS zone for export cargo storing and stuffing is on 9.57 acres of land consisting of 6 prefabricated sheds and jute yard. The jute yard area is about 8,439 sft and the six prefabricated sheds are of 130,575 sft which are used for storing cargo of different logistic 72

73 companies. The building infrastructure includes one 4 storied office building, one two storied building for CFS and customs officials, two 2-storied ICD building, etc. The container handling equipments include 3 Kato crane, 3 material handling equipments, 7 forklifts, 3 reach stakers, 1 ppm crane, 1 trailer etc. In addition, the company has three stand by generators of 330 KVA, 417 KVA and 220 KVA for supplying power to the whole yard and sheds. The company has a capital expenditure plan for 2009 to buy 1.5 Acres of land and also add some container handling machinery. 2.4 Management Strategy Joint management strategy Although SAPL and OCL are being operated as different entities, the operation is now being handled under same management. The top management including Managing Director, Deputy Managing Director and Executive Director are providing service both for OCL and SAPL. Moreover, the Accounts division, IT division, Human resources division and administration are common for OCL and SAPL. The expense incurred for the above divisions and management expenses are allocated between the two companies under a service agreement. The administrative related expenses are shared at 65:35 basis for OCL and SAPL respectively. CRISL believes that the joint management strategy is also strategically advantageous for both the companies and also save expense of having separate division. However, if the shareholding pattern in future changes due to public participation, the pricing or expense sharing ratio between the companies need to be reviewed carefully. 2.5 Service Mix ICD, CFS and Customized services OCL offers three types of services to its valued clients i.e. Inland Container Depot (ICD), Container Freight Station (CFS) operation and customized services. Besides, during 2008 it got permission for import operation from Chittagong Port Authority. Various services under different operational areas of OCL are delineated in the following table: ICD CFS Customized Service container handling empty container removal plan wise container stacking at yard empty redelivery in various location (i.e. redelivery at CPA\ CY, Shipper premises or direct vessel hock) export cargo receiving, cargo stacking at warehouse stuffing of container unstuffing of import container container repair and maintenance fumigation condition survey prepare documentation and arrange stuffing as per shipper\shipping agent \ NVOCC or MLO s stuffing plan. OCL follows the principle of serving first come first serve basis and receiving is allowed if the document found in order i.e. valid shipping order issued by the respective agents, factory challan, invoice and packing list against the consignment. OCL follows CPA tariff rate only for import related activities; but it has own pricing for export related activities and also for customized services. However, they charge different rate for different clients for the same kinds of activities. 73

74 3.0 OFF - DOCK INDUSTRY Growing sector with ample opportunity Highly dependent on Chittagong port Regulated sector The history of private off dock operator in Bangladesh is not old. With a view to aid Chittagong Port in preventing frequent cargo congestion, private offdock operators come into being at the middle of 90 s. Initially its operation was limited only for empty containers handling. Then in 2000, the government granted approval for CFS (Container Freight Station) services. At present total CFS function of the country is performing through the off-dock operators. Ceasing on the opportunity and viewing the infinite prospect of the sector, private operators have been investing heavily in the offdock sector that not only beneficial for the business but also eased the over-burden pressure on Chittagong Port Authority. At present there are 11 off-dock operators in Chittagong and handle around 50 percent of the business while Chittagong Port and Dhaka Inland Container Depot handle the rest. There has been a sharp increase in container volume within last five years in view of popularity of container based cargo over bulk cargo. Even products, such as rice, wheat and pulses are imported through container carriers. Chittagong Port alone handled around 0.96 million TUEs of container during 2007 against 0.88 million TUEs of container in It is forecasted that the total container volume handled by the Chittagong port will be increased by about 15% during Responding to the emerging demand two more inland container depots (ICDs) are going to be set up soon in Chittagong to handle around 1 lakh twenty equivalent feet containers a year to meet the growing demand for such depots. Government of Bangladesh also declared tax holiday facility to promote the private initiative to this sector. The performance of private off-dock operator is largely depends on Chittagong Port. The CPA has formed a taskforce in 2007 after the declaration of emergency in the country for improving the efficiency of the port by reducing traffic congestion. The taskforce has taken a number of steps for accelerating container handling and reducing cost. Many of the steps have already been implemented and some others are at various stages of implementation. A three-shift workday has been introduced for dockworkers for ensuring smooth operation. Other important steps taken by the task force include handling activities of nine bulk items outside the port area, allowing delivery of Full Container Load (FCL), doing away with monopoly in stevedoring system from hook point, reducing the size of the labour groups, setting up sector wise off-dock inland container depot (ICD), cancellation of unreasonable fees and charges by shipping agents and reducing the number of signatures required from customs and port authorities for office clearance. Due to operation of the port in three shifts in place of earlier two-shift workday, the turn-around time of a ship has reduced to 2-3 days in the last month from its earlier 8-11 days. The dominance of labour leaders has reduced to a great extent and a no work no pay system has been introduced. The stevedoring system has also been abandoned and the size of labour groups has been reduced. The task force has asked different trade bodies to set up sector wise offdock inland container depot (ICD) for handling goods and reduce pressure on the port yard. Nine ICDs already exist in the country, another two got approval recently and a total of eight more such ICDs would be allowed to handle the huge increased demand. The CPA has been planning to seek approval to handle container of the SAARC countries, which will enhance the scope of business of the private sector ICDs. 74

75 4.0 CORPORATE GOVERNANCE 4.1 Board of Directors Experienced Board members The Board of OCL consists of ten directors: out of the ten directors, the two family representing equally i.e. five members each. The Board also nominated two alternate directors in absence of two Board members. Mr. Muhammad Aziz Khan is the Chairman of the Board; who is also the Chairman of the Summit Group of companies. Mr. Khan is the pioneer entrepreneur of the country in establishing infrastructure projects specially power projects. He got his MBA from the Institute of Business Administration, University of Dhaka. Mr. Syed Ali J. Rizvi, the Managing Director of the company is also a renowned industrialist having both local and international exposures in Banking job as well as teaching profession. He is an MBA from Indiana University of USA. The other Board members are eminent personalities having academic background from local and foreign universities. They are also involved in diversified business sectors like power, gas, garments, textiles, chemicals, printing, fishing, oil, real estate etc. Though, the Board is generally supposed to deal strategic issues and reviews the operational performance of the company; the OCL board members are directly involved both in policy issues and operational issues. The Chairman, Managing Director and the other three Deputy Managing Directors are directly involved in operation and drawing monthly remuneration although the above board members are also involved in their other business concerns. While MD is the Chief Executive Officer of the Company, he is supported by three Dy. MDs and three Executive Directors responsible for different functions of the Company. The Board held 07 and 09 meetings in 2008 and 2007 respectively. 4.2 Management Experienced management team The operational activities of OCL are being looked after by an experienced management team with wide exposure in off-dock industry under the leadership of the Mr. S. A. J Rizvi, the Managing Director of the company. Mr. Rizvi started his career in BCCI as probationary officer in 1977 and worked under different capacities. Later, he joined Union Bank Zambia Ltd., Zambia as Managing Director. He has completed his M.B.A in International Finance and Accounting from Indiana University, USA. In his more than eleven years affiliation in offdock industry, he is also serving as Managing Director and Director of Summit Alliance Port Limited. The other members of the corporate management team include three Deputy Managing Directors, Director (Finance & Admin) and Director (Operation). Mr. Syed Fazlul Haque FCA, is the Alternate Director and the Company Secretary. Mr. Haque is a fellow Chartered Accountant with long exposures in different key positions including Chief Executive Officer of Padma Oil Company Ltd. and Managing Director of GlaxoSmithKline Bangladesh Limited. Captain Asif Mahmood, Director (Operation) is a master Mariner from United Kingdom. Is a Director of the Company and looks after the new projects. Recently, Captain Kamrul Islam Mazumder, another Master Mariner from UK has also joined the team as Executive Director and COO. Captain Mazumder comes with years of experience both in sea carrier and shore. His last assignment before joining the Group was with Maersk Bangladesh Limited as its General Manager (Operations). As described earlier the above corporate management team as well as a few core operational executives are also involved in the service of SAPL as per the service agreement between the companies. 75

76 4.3 Human Resources Management Structured service rule OCL follows a structured service rules and compensation package for its workforce at all levels. The company provides various benefits like Provident Fund, Gratuity Scheme etc. for its eligible staff. The company has adopted separate Human Resource Policy for recruitment, promotion and training. At present, the total executives of OCL stood at 46 executive and 320 non- executives as on 31st December The human resource turnover of the company has been found insignificant. In order to improve the human resources and their quality in line with the modern business need, OCL has established its policy for training of its employees. In order to develop and equip the employees with key skills, the company places great emphasis on the development of its employees and hence sends employees to various courses and workshop and also arranges in house workshops for updating knowledge on the respective functional areas. 4.4 IT Infrastructure and MIS Automated information system Application of information technology in every phase of the off- dock operation is vital due to its global linkage. Integrated software provides real time information to the management to take prudent decision. At present, both OCL and SAPL have been using the same software under a shared service policy with OCL. The work stations of the company are equipped with computers and are connected with a Local Area Network (LAN) supported by one server and a backup server. The company is using disintegrated in-house built software named Container Management Software and CFS Cargo Management Software those can provide immediate information regarding daily movement report, summary of stuffed container report, detailed import activity report, stuffing and unstuffing report, delivery report, import report on chasis, import report load in, import report un stuffing, custom permission stock report, terminal receipt report, daily import activities, empty container stock report, out report, custom permission report, custom permission balance report etc. On the other hand, Accounts and Finance department is using vendor made software named Vista- GL. For data protection purpose, they keep back up in tape drive in the server, CD and hard copy time to time. Moreover, they have another backup server with mirroring. IT department of the company comprises of 3 professionals under a Deputy Managing Director having cross border educational background. The company has taken initiative to develop its existing software under integrated solution with the collaboration with Techno Vista Limited (TVL). 76

77 5.0 RISK MANAGEMENT As an off- dock company, OCL undertakes some risk by virtue of its nature. Management of the above risks is crucial for the long run sustainability and operating efficiency. Principally, the higher the risk management practice, the lower the risk and higher the protection for the stakeholders. The risk management primarily deals with the fortuitous events and their impacts which basically come from the core business activities of the ICDs Company. In addition, some operational risks and market risks are also associated with, which also need to be addressed. CRISL has reviewed the risk management of the company as delineated below: 5.1 Operational Risk Exposed to operational risk CRISL reviewed the operational risk in the perspective of risk of loss resulting from operation or inadequate or failed internal processes, people and systems or from external events. Under the above purview, the OCL as a contractor of different logistics company, has been undertaking substantial responsibility and any loss arising from inefficient handling from the contractor s end are required to be borne by OCL. As per agreement, contractor shall be responsible to both customer and any merchant for any liability, claim, damage or delay caused by loss, theft, shortage, or damage to any documents (or goods where applicable) during the period under the custody or control of the contractor. However, OCL is levied in case of Force Majeure risk. Under the service agreement, OCL is also taking the responsibility of serving SAPL especially for information system. Therefore, OCL has significant operational risk. At present the same corporate management team including the Managing Director, three Deputy Managing Directors and two Directors are supervising the two companies from Head Office of OCL. CRISL views that the same management in the both companies may create conflict of interest. CRISL also views that a separate Chief Operating Officer as well as operational Head Office may be in place immediately to supervise the activities of SAPL. Besides inadequate qualified and experienced management team of SAPL may also create operational risk for OCL. 5.2 Financial Risk Tk million Contingent liability Financial risk may also arise due to the unexpected losses from operation and to cover the loss against any unexpected hazards. Although, the company opened insurance policy with Green Delta and Rupali Insurance to cover Fire, cash, public liability and burglary & house keeping; the insured amount is lower than expected level as per CRISL opinion, specially, for Fire coverage which is only Tk million. Besides, it is yet to take any comprehensive insurance policy. The company reduces the receivable collection risk within a limit of 15 to 30 days according to the agreement with the clients. The financial risk arises against the contingent liability of Tk million as 31st December 2008 on account of claim for Municipal Tax and Vat, which is not accepted by the company and appealed for justice. The issues are log pending before the Honorable High Court Division of the Supreme Court/ VAT Appellate Tribunal for hearing and decision. 77

78 5.3 Internal Control Risk Introduced Standard Operating Procedure The business and financial operations of the company have been conducted and exercised through an established internal control system. Mid and senior level management executives are assigned and authorized to verify and approve the transaction of the company based on the specific delegation of power. In addition, OCL formulated Standard Operating Procedure (SOP) for ICD and CFS function for effective management. OCL has 2 members internal audit department. The department verifies and follow-ups the activities of the internal control procedures, however, the department is yet to introduce reporting procedure to the Board or top management. The company also introduced operational target in different time frame and also the review process of the variance of performance with it background analysis. 5.4 Business Risk Business risk depends on Chittagong port The growth of Off-Dock operation depends on efficient handling of exports and imports at Chittagong port which again dependent on International trade of the country. Therefore, any disruption in Chittagong Port operation will have adverse impact on the trade volume of the country and have a consequential effect on the business of OCL. Recent global turmoil ultimately decrease the amount of export and import which has a consequential effect on the off- dock industry. Moreover, all Off-Dock Companies are dependent on obtaining and renewing permission / clearance from Chittagong Custom House (NBR), Chittagong Port Authority and various other relevant Government Agencies. Delay at any stage can be consequential effect in smooth continuation of the operation. 6.0 BUSINESS PERFORMANCE Particulars Revenue growth (%) PBT growth (%) Overall business performance of OCL has been found good over the years. The revenue of the company increased to Tk million in FY 2008 from Tk million in YE2007 with a growth rate of 74.71%. The revenue was boosted up significantly due to availing permission for import cargo operation during The revenue growth also contributed noticeably in the profit growth reflected by 2.7 times in FY2008 and 2.5 times in FY In addition, the high profit growth was also the ultimate result of economies of scale of operation arisen by better cost efficiency. Particulars Export (CFS) Import Empty Container Storage (at any given time) Estimated Capacity per Month (Tues) 6, Monthly Average Performance (Tues) Capacity Utilization % 70% 90% Capacity Utilization % 24% 90% 78

79 Presently the company is running with almost 85% capacity utilization in export operation, 70% in import operation and 90% in empty container storage. Accordingly, in the revenue pie, CFS contributed 72%, ICD contributed 25% and other services contributed 3% in FY PERFORMANCE ANALYSIS 7. 1 Profitability Good financial Performance Indicator ROAA After Tax % ROAE After Tax % ROAE After Tax % (Without Revaluation reserve) Return on Investment (%) Operating Profit Margin% Net Profit Margin% Earning Per Share (Tk. 10) Adjusted EPS of Tk Note : The face value per share was Tk.100 upto FY 2007, changed it to Tk.10 per share during FY2008, hence CRISL restated the NAV of the last years also based on Tk. 10 per share OCL has been operating profitably since long and its profitability increased significantly in FY2008 mainly due to recently launched import operation as mentioned earlier. The after-tax profit increased to Tk million in FY2008 from Tk million in FY 2007 with a growth of about 10 times. The operating profit margin was found good and stood at 42.93% in 2008 against 19.53% in Accordingly, the net profit margin stood at 24.54% in Fy2008 against 4.18% in FY2008. While analyzing the profitability of FY2008 against FY 2007 in terms of Asset and Investment, the after tax return on average asset stood at 8.70% against 1.36% and after tax return on equity stood at 11.20% against 1.65%, reflected a noticeable increase in FY2008. The company revalued the assets during FY2008 that increased the asset base by Tk million; and without considering the revaluation reserve, the after tax return on average equity was 42.40% in FY 2008 against 5.37% in FY Accordingly, return on investment (ROI) increased to 17.60% in FY 2008 against 6.83% in Fy Diluted Earning per Share (EPS) of Tk. 10 increased to TK at YE2008 from Tk in YE Cost Efficiency Analysis Cost efficiency for Economies of scale The cost efficiency of the company improved significantly during FY2008 reflected by Cost efficiency ratio (i.e. cost of service compared to its revenue) of 43.87% in YE2008 against 67.27% in YE2007 and 69% on average last five years. Basically improved cost efficiency is the result of higher growth in revenue (i.e %) arisen from ICD operation, for which the company was not required to deploy additional infrastructures or incur noticeable operational 79

80 Indicators Cost to Revenue Ratio (%) Administrative Cost to Revenue Ratio % Selling & Distribution Cost to Revenue Ratio % Finance Cost to Revenue Ratio % expenses (i.e % growth in operational expenses). Indeed, administrative & other overhead expenses were about same in percentage of revenue in FY 2008 and FY However, financial cost increased noticeably to 4.41% in FY 2008 from 1.71% in FY 2007 due to increase of short term loan and payment of interest against the refunded share money deposit (@6% for the six month period) of Tk million. 8.0 LIQUIDITY AND FUND FLOW ANALYSIS Indicators FY2008 FY2007 FY2006 FY2005 *Adjusted Current Ratio (X) Average No. of Days Receivables Outstanding Average No. of Days Payable Outstanding *proposed cash dividend is considered as current liabilities Being a service oriented company, the company enjoys a short cash conversion cycle; however, its liquidity has been deteriorated during FY2008, mainly due to finance its inter-companies through overdraft facilities and also for capital expenditure. In result, the adjusted current ratio of the company decreased to 0.78 times in FY2008 against 1.66 in FY However, the inter-company transactions were priced at the same cost of borrowing. The management of OCL stated opined that they will refund the above fund by 30 June In addition, high L/C margin for import of Container Handling Equipment (Tk million against Tk million of 2007) has put temporary pressure on the liquidity of the company. The management of OCL opined that this will be overcome through extra revenue to be generated due to capacity increase. OCL has been operating with short receivable turnover (generally days) which ultimately results good cash flow over the year. Against the above the company can stagger the liability payment on an average days, which ultimately results a short cash conversion cycle of the company. While analyzing the fund flow during FY 2008, it has been revealed that the company generated fund from operation of Tk million, which reached to Tk million after meeting the net additional working capital requirement. However, after supporting the Capital expenditure requirement of Tk million, the free operating cash flow was negative Tk million which further increased to Tk million due to payment of cash dividend and providing advance to its four inter-companies. The company, in those respects, draw the overdraft facility of Tk million to meet the operational requirement. 80

81 9.0 CAPITAL STRUCTURE AND LEVERAGE Sound equity base Indicators FY2008 FY2007 FY2006 FY2005 Leverage Ratio (X) Leverage Ratio without Revaluation (X) Adjusted NAV Per Share of Tk. 10 (considering revaluation reserve) Adjusted NAV per Share of Tk. 10 (Without considering revaluation) Good internal fund generation OCL is a sound equity based company having a small contribution of long term loan in its capital structure. Total assets size of OCL stood at Tk. 1,649 million at the end of 2008, which is financed by Tk. 1,233 million owners equity, Tk million short term liabilities and Tk million long term liabilities, reflected a debt to equity ratio of 25:75 respectively. It is notable here that, the above equity value bears Tk million as asset revaluation reserve. However, CRISL considered revaluation reserve as non cash reserve and not distributable to the shareholders. Hence, though the present leverage ratio was 0.34 times in FY2008, without considering the asset revaluation reserve, it stood at 1.74 times in During FY 2008, the company proposed 240% stock dividend that increased the share capital base to Tk million of the company considered as a transaction after post balance sheet date. Overall, the internal capital generation of the company was sound and it was 133% in FY2007 and 6.38% in FY2006. Presently, the adjusted net asset value (NAV) per share of Tk. 10 stood at Tk against Tk in FYE2007. However, without considering the revaluation reserve, the adjusted net asset value (NAV) per share of Tk. 10 stood at Tk against Tk in FYE CREDIT WORTHINESS AND FINANCIAL SOLVENCY Indicators FY2008 FY2007 FY2006 FY2005 Debt Service Coverage Ratio (X) Interest Coverage Ratio (X) Good debt servicing capacity The Debt Servicing history of OCL is found good. Being a sound equity base company and having its good market image, it enjoys sound financial flexibility to avail fund from different sources. It enjoys a credit limit from Standard Bank of Tk. 300 million. The company has a long term lease Loan of Tk million from IDLC. The Lease installment are paid on monthly basis and OCL paid each installment in due time. While analy zing the historical data of OCL about the repayment performance of term loan, it was found that the company had a long term loan from Maersk Bangladesh Limited in 2003 whose installments were paid in timely manner and within June 2008 entire loan had been repaid. While analyzing the debt servicing capacity it reveals that cash flow is sufficient to service its debt burden. Debt service coverage ratio of the company stood at 4.31 times in 2008 against 1.48 times in Interest coverage ratio was times and operating cash flow to debt burden ratio was 2.34 times at the YE All the above ratios reveal sufficient flow of operating fund in servicing long term loan. Both interest coverage ratio and debt service ratio show the sufficient capacity of servicing both long term loan current portion and interest expense. 81

82 11.0 OBSERVATION SUMMARY Comforts: Sound equity based company Good operational performance Good financial performance Experienced management team Good debt servicing capacity Good franchise value Outstanding market share Efficient service infrastructures Prospects: Huge market exposure Expansion of service line Capacity expansion Concerns: Significant contingent liability Low insurance coverage Increased financial cost Exposed to operational risk Challenges: Increased competition in the industry Political instability High dependence on sound operation of Chittagong Port 12.0 PROSPECTS Positive outlook Bangladesh s international trade is carried out mainly through its two principal ports - Chittagong and Mongla. Although, the volume of cargo through the two ports was just over 1 million TEUs in 2007, it is forecasted to double over the next 5 years. As the volume of cargo at the port increases day by day, necessity of private off- dock operator is also increases. Responding to the emerging need private off-dock operators are invested heavily in this sector. Two more inland container depots (ICDs) are going to be set up soon in Chittagong to handle around 1 lakh twenty equivalent feet containers a year to meet the growing demand for such depots. Government of Bangladesh also declared tax holiday facility to promote the private initiative to this sector. The joint forces had formed a taskforce during 2007 after the declaration of emergency in the country for improving the situation at the port and they have taken a number of steps for accelerating container handling and reducing cost. So, with a view to tapping the unused capacity, OCL is in the process of acquiring more land and also expanding its operation. Above all, under the leadership of Mr. S. A. J Rizvi, the management team of OCL have been working to remove present shortcomings of the organization and wanted to become the best off-dock operator in Bangladesh. END OF THE REPORT Information used herein is obtained from sources believed to be accurate and reliable. However, CRISL does not guarantee the accuracy, 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. Rating is an opinion on credit quality only and is not a recommendation to buy or sell any securities. All rights of this report are reserved by CRISL. Contents may be used by news media and researchers with due acknowledgement. 82

83 13.0 CORPORATE INFORMATION Date of Incorporation: April 26, 1986 Board of Directors Sl. No. Name Designation 01 Mr. Muhammad Aziz Khan Chairman 02 Mr..S. A. J. Rizvi Managing Director 03 Mrs. Anjuman Aziz Khan Director 04 Dr. Syed Ali Gowher Rizvi Director 05 Mrs. Sobera Ahmed Rizvi Director 06 Mr. Syed Yasser Haider Rizvi Dy. Managing Director 07 Mr. Syed Nasser Haider Rizvi Dy. Managing Director 08 Mr. Faisal Karim Khan Dy. Managing Director 09 Mr. Latif Khan Director 10 Mrs. Ayesha Aziz Khan Director 11 Ms. Adeeba Aziz Khan Director Auditor Basu Banerjee Nath & Co. Capital History Year Authorized Capital Paid-up Capital Fig: Million (TK)

84 14.0 FINANCIALS A. Balance Sheet OCEAN CONTAINERS LIMITED Balance Sheet as on year ended December (Figures in million Tk.) Non-Current Assets Property, Plant & Equipt Investment Total Non-Current Assets Current Assets Inventories Trade Debtors Adv. Deposits & Prepayments Intercompany Receivable Cash & Bank Balances Total Current Assets Current Liabilities Bank Overdraft Short Term Loan Trade Creditors Tax Provision Proposed Dividend Other ST Liabilities Total Current Liabilities Net Current Assets Net Assets Non-Current Liabilities Long Term Loan Other Non-Current Liab Total Non-Current Laib Shareholders Equity Share Capital Capital Reserve Other Reserve Stock Dividend Tax Holiday Reserve Share Money Deposit Retained Earnings Total Shareholder s Equity Total Equity and LT Liab Total Assets

85 B. Income Statement OCEAN CONTAINERS LIMITED Income Statement For the year ended December (Figures in million Tk.) Particulars Sales Revenue CoGS Excluding Dep Depreciation-Mfg Cost of Good Sold Gross Profit Salary & Allowances Depreciation-Admn Other Admin. Expenses Total Adm. Exp Selling & Distribution Exp Other Operating Exp Profit from Operation Other Income Financial Cost Non Operating Income Other Non-Operating Exp Profit Before Tax Income Tax Profit After Tax

86 CRISL RATING SCALES AND DEFINITIONS LONG-TERM RATINGS OF CORPORATE RATING AAA Triple A (Highest Safety) AA+, AA, AA- (Double A) (High Safety) A+, A, A- Single A (Adequate Safety) BBB+, BBB, BBB- Triple B (Moderate Safety) BB+, BB, BB- Double B (Inadequate Safety) B+, B, B- Single B (Risky) CCC+,CCC, CCC- Triple C (Vulnerable) CC+,CC, CC- Double C (High Vulnerable) C+,C,C- (Extremely Speculative) D (Default) Investment Grade DEFINITION Entities rated in this category are adjudged to be of best quality, offer highest safety and have highest credit quality. Risk factors are negligible and risk free, nearest to risk free Government bonds and securities. Changing economic circumstances are unlikely to have any serious impact on this category of companies. Entities rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions. Entities rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. Entities rated in this category are adjudged to offer moderate degree of safety for timely repayment of financial obligations. This level of rating indicates that a company is underperforming in some areas. Risk factors are more variable in periods of economic stress than those rated in the higher categories. These entities are however considered to have the capability to overcome the above-mentioned limitations. Speculative Grade Entities rated in this category are adjudged to lack key protection factors, 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. Overall quality may move up or down frequently within this category. Entities rated in this category are adjudged to be with high risk. Timely repayment of financial obligations is impaired by serious problems which the entity is faced with. Whilst an entity rated in this category might be currently meeting obligations in time through creating external liabilities. 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. 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 very highly vulnerable. Entities might not have required financial flexibility to continue meeting obligations; however, continuance of timely repayment is subject to external support. Entities rated in this category are adjudged to be with extremely speculative in timely repayment of financial obligations. This level of rating indicates entities with very serious problems and unless external support is provided, they would be unable to meet financial obligations. Default Grade Entities rated in this category are adjudged to be either already in default or expected to be in default. Note: For long-term ratings, CRISL assigns + (Positive) sign to indicate that the issue is ranked at the upperend of its generic rating category and - (Minus) sign to indicate that the issue is ranked at the bottom end of its generic rating category. Long-term ratings without any sign denote mid-levels of each group. 86

87 SHORT-TERM CORPORATE RATING ST-1 ST-2 ST-3 ST-4 ST-5 ST-6 Highest Grade Highest certainty of timely payment. Short-term liquidity including internal fund generation is very strong and access to alternative sources of funds is outstanding. Safety is almost like risk free Government short-term obligations. High Grade High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. Good Grade Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. Moderate Grade Moderate liquidity and other protection factors qualify an entity to be in investment grade. Risk factors are larger and subject to more variation. Speculative Grade Speculative investment characteristics. Liquidity is not sufficient to ensure discharging debt obligations. Operating factors and market access may be subject to a high degree of variation. Default Entity is in default or is likely to default in discharging its short-term obligations. Market access for liquidity and external support is uncertain. 87

88 S. ADDITIONAL DISCLOSURES A. SEC s REQUIREMENTS (i) DEFICIENCIES IN DOCUMENTATION: SEC s Requirement No. 1 Bank loan agreements and mortgage deeds are not submitted. OCL s Response No. 1 OCL has submitted Loan Agreement/Mortgage Deed with Standard Bank Limited, Agrabad Branch, Dhaka as Annex-VII under cover of their letter dated 23 June SEC s Requirement No. 2 Shareholders Resolution in respect of disposal of shares signed by all shareholders is not submitted. OCL s Response No. 2 OCL has submitted Shareholders Resolution in respect of disposal of shares signed by all shareholders as Annex-B under cover of their letter dated 21 July SEC s Requirement No. 3 NOC from lending bank and financial institution, if required, are not submitted. OCL s Response No. 3 OCL has submitted NOC from lending bank and financial institution as Annex-XI under cover of their letter dated 23 June SEC s Requirement No. 4 Undertaking to the effect that the Company shall comply with the securities laws including the requirements of the Listing Regulations of DSE/CSE upon listing with the Exchanges is not submitted. OCL s Response No. 4 OCL has submitted Undertaking to the effect that the Company shall comply with the securities laws including the requirements of the Listing Regulations of DSE/CSE upon listing with the Exchanges as Annex-XII under cover of their letter dated 23 June SEC s Requirement No. 5 Auditors Report as per section 135(1) of the Companies Act, 1994 does not contain net profits after tax for the last five accounting years. OCL s Response No. 5 OCL has submitted Auditors Report as per section 135(1) of the Companies Act, 1994 containing net profits after tax for the last five accounting years as Annex-C under cover of their letter dated 21 July Revised Income Statement is included in page no 69 of the Information Document. SEC s Requirement No. 6 Board resolution of Summit Alliance Port Limited regarding disposal of 50% of its shares of Ocean Containers Limited, signed by all directors, is not submitted. OCL s Response No. 6 OCL has submitted Board resolution of Summit Alliance Port Limited regarding disposal of 50% of its shares of Ocean Containers Limited, signed by all directors, as Annex-D under cover of their letter dated 21 July (ii) SEC s REQUIREMENTS IN INFORMATION DOCUMENTATION SEC s Requirement No. 1 in Information Document Disclosure regarding increase in paid-up capital and acquisition of shares by Summit Alliance Port Limited after the accounts date to be furnished. 88

89 OCL s Response No. 1 in Information Document OCL has included the disclosure regarding increase in paid-up capital and acquisition of shares by Summit Alliance Port Limited after the accounts date to be furnished, in page no 23. SEC s Requirement No. 2 in Information Document Short-term rating and name of the rating company to be incorporated in the cover page. OCL s Response No. 2 in Information Document OCL has incorporated the Short-term rating and name of the rating company in the cover page. SEC s Requirement No. 3 in Information Document Number of shares to be offloaded by each of the shareholders to be furnished. OCL s Response No. 3 in Information Document OCL has incorporated the Number of shares to be offloaded by each of the shareholders in page no 41. SEC s Requirement No. 4 in Information Document Authorised capital and paid-up capital to be furnished in the Description of Business. OCL s Response No. 4 in Information Document OCL has incorporated the Authorised capital and paid-up capital in the Description of Business in page no 12. SEC s Requirement No. 5 in Information Document Details of the loan and lease contracts to be furnished. OCL s Response No. 5 in Information Document OCL has incorporated the Details of the loan and lease contracts in page no 25. SEC s Requirement No. 6 in Information Document Expenses related to the direct listing to be furnished. OCL s Response No. 6 in Information Document OCL has included the Expenses related to the direct listing in page no 6. B. CSE s REQUIREMENTS CSE s Requirement in Information Document Furnishing of restated EPS considering latest outstanding shares with changed face value in Profitability Ratios under Selected Ratios of Information Document. OCL s Response in Information Document OCL has included the restated EPS considering latest outstanding shares with changed face value in Profitability Ratios under Selected Ratios of Information Document in page no 66. CSE s Requirement in Information Document Amending Information Document as suggested by CSE. OCL s Response in Information Document OCL has amended the Information Document as suggested by CSE in various pages thereof. CSE s Requirement in Information Document Furnishing of half-yearly financial statements for the half-year ended 30 June 2009 in the Information Document. OCL s Response in Information Document OCL has included half-yearly financial statements for the half-year ended 30 June 2009 in the Information Document in page no

90 90

91 Half-yearly Report (UN-AUDITED) 91