RED-HERRING PROSPECTUS BARAKA PATENGA POWER LIMITED. Lighting Bangladesh, We Promise...

Transcription

1 REDHERRING PROSPECTUS Lighting Bangladesh, We Promise...

2 Karnaphuli River B A A B Karnaphuli Power Limited 110 MW IPP Power Plant Baraka Shikalbaha Power Limited 105 MW IPP Power Plant

3 REDHERRING PROSPECTUS ÒcywRevRv i wewb qvm SzwKc~Y R b I ey S wewb qvm KiæbÓ Investment in capital market involves certain degree of risks. The investors are required to read the prospectus and risk factors carefully, assess their own financial conditions and risk taking ability before making their investment decisions. PUBLIC OFFER OF [ ] ordinary shares Issue Date of the Prospectus: [ ] Offer price Tk. [ ] EACH, INCLUDING A PREMIUM OF TK. [ ] PER SHARE, total size of fund to be raised BDT 2,250,000,000/ Opening Date for Subscription: [ ] Closing Date for Subscription (Cutoff Date): [ ] REDHERRING PROSPECTUS OF Baraka Patenga Power Limited MANAGER to the issue LANKABANGLA INVESTMENTS LIMITED CREDIT RATING Status Rating Particulars Long Term Short Term Entity Rating AA 3 ST3 Outlook Stable Rated by Credit Rating Agency of Bangladesh Limited 1

4 If you have any query about this document, you may consult the Issuer, Issue Manager and Underwriter A person interested to get a prospectus may obtain from the Issuer and the Issuer Manager ISSUER COMPANY CONTACT PERSON CONTACT NUMBER Baraka Patenga Power Limited Corporate Office: 6/A/1 (2nd Floor) Segunbagicha, Dhaka1000 Mr. Mohammed Monirul Islam Chief Financial Officer Tel: , Fax: info@bpplbd.com; Website: ISSUE MANAGER CONTACT PERSON CONTACT NUMBER LankaBangla Investments Limited City Center (Level 24) 90/1 Motijheel C/A, Dhaka 1000 Mr. Hassan Zabed Chowdhury Chief Executive Officer Tel: Fax: info@lankabanglainvestments.com Website: REGISTRAR TO THE ISSUE CONTACT PERSON CONTACT NUMBER UNICAP Investments Limited Noor Tower (4th floor), 73 Sonargaon Road, Dhaka1205 Mr. Salamul Latif Choudhury Chief Executive Officer (C.C.) Tel: Fax: info@unicapinvestments.com Website: AUDITORS OF THE COMPANY CONTACT PERSON CONTACT NUMBER Kazi Zahir Khan & Co. Chartered Accountants Shamsunnahar & Wazi Complex (8 th Floor), Suite 9B 31/C/1, Topkhana Road, Segunbagicha, Dhaka Mr. AbdullaAlMahmud, FCA, FCMA, FCS, LLB Partner Tel: Fax: mahmudkzkcbd@gmail.com Website: CREDIT RATING COMPANY CONTACT PERSON CONTACT NUMBER Credit Rating Agency of Bangladesh Ltd. Shena Kalyan Bhaban (SKB) 195 Motijheel C/A, Floor #4, Suite #403, Dhaka1000 Mr. Mir Arif Biilah AVP Tel: Fax: info@crab.com.bd Website: CONSENT OF THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURI TIES AND EXCHANGE ORDINANCE, 1969, AND THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER, MANAGING DIRECTOR, CHIEF FINANCIAL OFFICER, COMPANY SECRETARY, ISSUE MANAGER, ISSUE MANAGER S CHIEF EXECUTIVE OFFICER, UNDERWRITERS, AUDITOR(S), VALUER AND/OR CREDIT RATING COMPANY (IF ANY). This being the first issue of the issuer, there has been no formal market for the securities of the issuer. The face value of the securities is Tk (ten) and the issue price is Tk. [ ] i.e. [ ] times of the face value. The issue price has been determined and justified by the issuer and the issue manager/bidding by the eligible investors as stated under the paragraph on Justification of Issue Price should not be taken to be indicative of the market price of the securities after listing. No assurance can be given regarding an active or sustained trading of the securities or the price after listing. Investment in securities involves a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offer. For taking an investment decision, investors must rely on their own examination of the issuer and the offer including the risks involved. The securities have not been recommended by the Bangladesh Securities and Exchange Commission (BSEC) nor does BSEC guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of risk factors given on page number(s) (137145). The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this redherring contains all material information with regard to the issuer and the issue, that the information contained in the redherring prospectus are true, fair and correct in all material aspects and are not misleading in any respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. 2 REDHERRING PROSPECTUS

5 REDHERRING PROSPECTUS AVAILABILITY OF PROSPECTUS Copy of the RedHerring Prospectus of Baraka Patenga Power Limited may be obtained from the following institutions: ISSUER COMPANY CONTACT PERSON CONTACT NUMBER Baraka Patenga Power Limited Corporate Office: 6/A/1 (2nd Floor) Segunbagicha, Dhaka1000 Mr. Mohammed Monirul Islam Chief Financial Officer Tel: , Fax: Website: ISSUE MANAGERS CONTACT PERSON CONTACT NUMBER LankaBangla Investments Limited City Center (Level 24) 90/1 Motijheel C/A, Dhaka 1000 Mr. Hassan Zabed Chowdhury Chief Executive Officer Tel: Fax: Website: REGISTRAR TO THE ISSUE CONTACT PERSON CONTACT NUMBER UNICAP Investments Limited Noor Tower (4th floor), 73 Sonargaon Road, Dhaka1205 \ Mr. Salamul Latif Choudhury Chief Executive Officer (C.C.) Tel: Fax: info@unicapinvestments.com Website: 3

6 FORWARD LOOKING STATEMENTS This document contains certain forwardlooking statements. These forwardlooking statements generally can be identified by words or phrases such as aim, anticipate, believe, expect, estimate, intend, objective, plan, project, will, will continue, will pursue, should, or other words or phrases of similar important. Similarly, statements that describe the Company s strategies, objectives, plans or goals are also forwardlooking statements. All forwardlooking statements are based on proposed plans, estimates and expectations subject to risks, uncertainties and assumptions about the Company that could cause actual results to differ materially from those contemplated by the relevant forwardlooking statement. Also the information represented by [ ] will be incorporated after determination of cutoff price after completion of bidding process. Actual results may differ materially from those suggested by the forwardlooking statements due to risks or uncertainties. Important factors that could cause actual results to differ materially from the Company s expectations include, but are not limited to, the following: Failure to manage growth and scalability or adapt to industry trends, consumer behavior and technological developments; Inability to provide better products or services than the competitors; Failure to maintain and enhance awareness of the brand; Inability to control cost related to the service; Unprecedented and challenging economic conditions; and Political instability or change in economic liberalization and deregulation policies. The downturn in the global economy and the risk of a protracted recession; The integration of companies or business acquired by the Company; The implementation of new projects, including future acquisitions and financings; The Company s substantial indebtedness and ability to meet its debt service obligations; Changes in government regulation; Terrorist attacks, civil disturbances, regional conflicts, accidents and natural disasters; General economic and business conditions in the markets in which the Company operates and in the local, regional and national economies; Increasing competition in or other factors affecting the industry segments in which the Company operates; Changes in laws and regulations relating to the industries in which the Company operates; The Company s ability to meet its capital expenditure requirements or increases in capital expenditure requirements; Fluctuations in operating costs and related impact on the financial results of the Company; The Company s ability to attract and retain qualified personnel; Changes in technology in the future; Any adverse outcome in legal proceedings in which the Company is or may become involved including, with respect to product liability claims. 4 REDHERRING PROSPECTUS

7 REDHERRING PROSPECTUS For further discussion of factors that could cause the actual results to differ from the expectations, please see the section titled About the Issuer and section titled Risk Factors and Management s Perceptions about the Risks of this Redherring Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated. Forwardlooking statements reflect the current views as on the date of this document and are not a guarantee of future performance. These statements are based on the Management s beliefs and assumptions, which in turn are based on currently available information. Although BPPL believes the assumptions upon which these forwardlooking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forwardlooking statements based on these assumptions could be incorrect. Neither the Company, the Directors, the Issue Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. The Company will ensure that investors in Bangladesh are informed of material developments until the time of the grant of listing and trading permission by the designated Stock Exchange(s). 5

8 DEFINITIONS AND ACRONYMS/ELABORATION Term Elaboration AGM Annual General Meeting Allotment Allotment of shares BSEC Bangladesh Securities and Exchange Commission BAS Bangladesh Accounting Standards BFRS Bangladesh Financial Reporting Standards BERC Bangladesh Energy Regulatory Commission BDT Bangladeshi Taka BOO Build, Own and Operate BPC Bangladesh Petroleum Corporation BPDB Bangladesh Power Development Board COD Commercial Operation Date EGCB Electricity Generation Company of Bangladesh EPC Engineering, Procurement and Construction MW Megawatt GWh Gigawatt hours IA Implementation Agreement IPP Independent Power Producer KW Kilo Watt KwH Kilowatt Hour MPEMR Ministry of Power, Energy and Mineral Resources O & M Operation and Maintenance PPA Power Purchase Agreement PSMP Power System Master Plan RPCL Rural Power Company Limited SIPP Small Independent Power Producer STG Steam Turbine Generator BO Beneficiary Owner CDBL Central Depository Bangladesh Limited EBITDA Earnings before Interest, Tax, Depreciation and Amortization EPS Earnings per Share EI Eligible Investor defined under Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 Financial Year/ Fiscal/ FY Period of 12 months ended on 30 June of that particular year FC Account Foreign Currency Account GBP Great Britain Pound GoB Government of Bangladesh IPFF Investment Promotion and Financing Facility IPO Initial Public Offering NBR National Board of Revenue NRB Nonresident Bangladeshi NPAT Net Profit after Tax PFI Participating Financial Institution Stock Exchange(s) Unless the context requires otherwise, refers to, the DSE & CSE where Ordinary shares will be listed. 6 REDHERRING PROSPECTUS

9 REDHERRING PROSPECTUS Table of Contents Section No. Particulars Page No. SectionI Executive Summary 814 SectionII Conditions imposed by the Commission 1517 SectionIII Declaration 1819 SectionIV About the issuer 2022 SectionV Corporate directory of the Issuer 2324 SectionVI Description of the Issuer 2570 Summary 26 General Information 2730 Capital Structure 3138 Description of Business 3948 Description of Property 4955 Plan of Operation and Discussion of Financial Condition 5670 SectionVII Management s discussion and analysis of financial condition and results of operations 7175 SectionVIII Directors and Officers 7691 SectionIX Certain Relationships and Related Transactions 9293 SectionX Executive Compensation 9496 SectionXI Options granted to Directors, Officers and Employees 9798 SectionXII Transaction with the Directors and Subscribers to the Memorandum SectionXIII Ownership of the Company s Securities SectionXIV Corporate Governance SectionXV Valuation Report of securities prepared by the Issue Manager SectionXVI Debt Securities SectionXVII Parties involved and their responsibilities SectionXVIII Material contracts SectionXIX Outstanding Litigations, Fine or Penalty SectionXX Risk Factors and Management s Perceptions about the Risks Internal Risk Factors External Risk Factors SectionXXI Description of the Issue SectionXXII Use of Proceeds SectionXXIII Lockin SectionXXIV Markets for the Securities Being Offered SectionXXV Description of securities outstanding or being offered SectionXXVI Financial Statements Auditor s Report to the Shareholders of Baraka Patenga Power Limited for the Period Ended 31 December Auditor s Report to the Shareholders of Karnaphuli Power Limited for the Period Ended December 31, Auditor s Report to the Shareholders of Baraka Shikalbaha Power Limited for the Period Ended December 31, Auditor s Report to the Shareholders of Baraka Patenga Power Limited for the Year Ended 30 June Auditor s Report to the Shareholders of Baraka Patenga Power Limited for the Year Ended 30 June Auditor s Report to the Shareholders of Baraka Patenga Power Limited for the Year Ended 30 June Ratio Analysis Auditors report under Section 135(1), Para 24(1) of Part II of Schedule III of the Kv úvwb AvBb, SectionXXVII Credit Rating Report

10 SECTION: I EXECUTIVE SUMMARY 8 REDHERRING PROSPECTUS

11 REDHERRING PROSPECTUS About The Industry Electricity is the main ingredients for socioeconomic development of a country. Recognizing the necessity of the electricity, GoB has declared vision to provide electricity to all by Due to relentless efforts of the government till to date 68% population have access to electricity. It may be mentioned that during the last five years about 4.8 million new consumers are connected to electricity. Per capita generation is increased form 220KWh to 348 KWh. Considering the country s future energy security and lowcarbon emission strategy, programs have been undertaken to promote use of renewable energy. Government has formulated proinvestment policy to encourage private sector investment in Renewable Energy (RE) sector as the country is experiencing rapidly rising energy consumption over the past two decades. This trend will intensify further in the coming years as economic growth and development efforts accelerate Bangladesh strives to become a middleincome country by Energy supply thus has to be increased rapidly in order to sustain the country s growth momentum. The increase of power generation capacity over the last few years stands witness to the incredible growth of the sector, registering a Cumulative average Growth Rate (CAGR) of 13.7% between FY2010FY2016. Rate of access to electricity has improved from approximately 60% in 2012 to 74% as of The government targets to reach all people by Per capita consumption of electricity remains low compared to peer countries and far below that of the developed world. As a result, the rate of growth witnessed over the years is likely to accelerate as electricity reaches more people and as people and industries increase consumption.as of February 2017, the total power generation capacity of the country was 13,179MW. This is an increment of 814MW from the total generating capacity at the end of FY2016. Maximum generation in the calendar year 2017 was only 9,479MW against a revised estimated peak demand of over 9,000 MW. Date Sources: About The Issuer Baraka Patenga Power Limited was incorporated as a private limited company on 7 June 2011 Vide Registration No. C93385/11 and subsequently converted into a public limited company on 28 April 2014 with Registrar of Joint Stock Companies and Firms (RJSC) in Bangladesh under the Companies Act, The Company started its commercial operation on 4 May The main activity of the Company is to set up power plants for generation and supply of electricity to national grid of Bangladesh. The Company has two subsidiaries namely Karnaphuli Power Limited (KPL) and Baraka Shikalbaha Power Limited (BSPL). The principal activity of these companies is to set up power plants for generation and supply of electricity. Nature of Business The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and reduce the fuel cost. For the first time in power sector in Bangladesh, a desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level. 9

12 Subsidiary Company 1. Karnaphuli Power Limited (KPL) Karnaphuli Power Limited was incorporated in Bangladesh on November 17, 2014 as a Private Limited Company having its registered office at 6/A/1 (1st and 2nd floor), Segunbagicha, Dhaka1000. Karnaphuli Power Limited has signed the Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) on February 4, 2018 and has also signed the Implementation Agreement (IA) with the Government of Bangladesh (GOB) represented by the Ministry of Power, Energy and Mineral Resources on the same day. The PPA is signed in connection to the issued Letter of Intent (LOI) to the Company vide memo dated August 8, 2017 of BPDB for implementing HFO fired IPP power plant having capacity of 110 MW on Build, Own, Operate (BOO) basis at Shikalbaha, Chittagong for a term of 15 years from the commercial operation date (COD). The required COD of the plant is 15 months from the date of PPA. Nature of Business: The principal activity of KPL is to set up power plants for generation and supply of electricity. 2. Baraka Shikalbaha Power Limited (BSPL) Baraka Shikalbaha Power Limited was incorporated in Bangladesh on December 13, 2017 as a Private Limited Company having its registered office at 6/A/1, Segunbagicha, Dhaka1000. Bangladesh Power Development Board (BPDB) has issued Letter of Intent (LOI) to Baraka Patenga Power Limited and its consortium vide their memo no dated for implementing HFO fired IPP power plant having capacity of 105 MW on BOO (Build, Own, Operate) basis at Shikalbaha, Chittagong for term of 15 years from the commercial operation date (COD). The required COD of the plant is 9 months from the date of LOI. Nature of Business: The principal activity of BSPL is to set up power plants for generation and supply of electricity. Financial Information Sl. Particulars 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 Amount in BDT 1 Turnover 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 2 Gross Profit 304,556, ,619, ,677, ,803, ,884,031 3 Net Profit Before Tax 156,639, ,996, ,583, ,015,736 61,960,251 (3,774,680) 4 Net Profit after Tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) 5 Total Assets 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 6 Paidup Capital 992,250, ,250, ,000, ,000, ,000,000 1,000,000 7 Retained Earnings 762,162, ,097, ,618, ,628,900 50,619,113 (11,096,908) 8 No. of Shares 99,225,000 99,225,000 94,500,000 94,500,000 94,500, ,000 9 Face Value NAV per share Earnings per Share (0.07) * Considering Total number of outstanding shares of 99,225, REDHERRING PROSPECTUS

13 REDHERRING PROSPECTUS Features of the Issue and Its Objects CutOff Price : [ ] Public Offering Price Number of Shares to be Offered [ ] : [ ] Total Issue Size : BDT 2,250,000,000 Issue Manager : LankaBangla Investments Limited Register to the Issue : UNICAP Investments Limited Objectives of the Issue : To finance equity investment fund for implementation of two power plants of its subsidiaries namely Karnaphuli Power Limited, Baraka Shikalbaha Power Limited and partial repayment of BPPL s debt. Legal And Other Information Particulars License Issuer/ Issuing Authority Registration/Certificate/ License No. Issue Date Renewal Date Expiry Date Certificate of Incorporation ETIN Certificate VAT Registration Certificate BERC License (IPP) BERC License (Fuel) Trade License Registrar of Joint Stock Companies and Firms (RJSC) C93385/ N/A N/A National Board of Revenue (NBR) N/A N/A Custom, Excise & VAT Agrabad Division, Chittagong N/A N/A Bangladesh Energy Regulatory Commission Bangladesh Energy Regulatory Commission Chittagong City Corporation BERC/POWER/IPP021/ L/025(Part1)/0504 BERC/LPP(P)/FO/ Baraka/215/ N/A Trade License Dhaka City Corporation Import Registration Certificate (IRC) Environmental Clearance Certificate Office of the Chief Controller of Export & Import Department of Environment 17611/2011/ Fire Licence Membership Certificate of DCCI Fire Service & Civil Defence Dhaka Chamber of Commerce & Industry ADChatta Factory Licence Department of factories Inspection 4491/Chattagram Explosive Licence Department of Explosive 1403(L) Registration from Board of Investment Board of Investment L H N/A N/A 11

14 Promoters Background Barakatullah Electro Dynamics Limited (Currently Baraka Power Limited) Holding Company of BPPL Barakatullah Electro Dynamics Limited (BEDL) is the subscriber to the MoA of Baraka Patenga Power Limited (BPPL). BEDL has changed its name to Baraka Power Limited (BPL) on January 12, Baraka Power Limited (BPL) was incorporated in Bangladesh on 26 June 2007 as a private limited Company. On 25 September 2008, the Company was converted into public limited Company under the Companies Act, The principal activity of this company is to set up power plants for generation and supply of electricity. Baraka Power Limited took part in the tendering process initiated by Bangladesh Power Development Board (BPDB) and won the bid for implementing, generating & supplying electricity from a 51MW gas fired power plant at Fenchugonj, Sylhet for a period of 15 years on BOO basis. The plant commissioned on 10 October, 2009 successfully and started its commercial operation from 24 October, 2009 and supplying electricity to the national grid uninterruptedly. The Company listed on 16 May 2011 with both the Stock Exchanges of Bangladesh and started trading of shares on 19 May At present, BPL holds 51% equity shares of Baraka Patenga Power Limited. Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Mr. Faisal Ahmed Chowdhury is a visionary business leader and possessing over twenty seven years of highly successful leadership in the area of fiscal, strategic, and operational management. He is a dynamic & result oriented businessman with a strong track record in a number of industrial sectors. His excellent analytical, interpersonal and motivational skills have made him a prominent and respected business leader in Bangladesh. After completing his graduation, during the 1990 s he relocated to the UK and started his own business founding Apex Printing and Publications Ltd. and then went on to established Imprint Trading Ltd., both of which were very successful. With the ambition of establishing businesses in his motherland and for the development of the socioeconomic standard of the nation, he successfully started an internationally recognized real estate company in Bangladesh named Royal City (300 acres), situated at the gateway of Sylhet. The vision established a modern independent residential town with a diverse range of worldclass civic facilities. With strong entrepreneurial and leadership skills, he was able to encourage many NRBs (Non Resident Bangladeshis) unfamiliar with the commercial landscape of Bangladesh to invest in their home nation of origin. Recently he has established an international standard educational organization, by the name of Royal Educare Limited (REL) in Bangladesh. Currently REL includes Eurokids Kindergarten and Royal Institute of Smart Education (RISE) primary & secondary school. RISE School incorporates the world renowned Cambridge University Curriculum. The future vision of REL is to develop the educational standards of the youth of Bangladesh with the aim of leaving a legacy for the future generation to build and improve our beloved nation, Bangladesh. Along with NRBs and local entrepreneurs, Mr. Faisal Chowdhury established Baraka Power Limited previously called Barakatullah Electro Dynamics Limited in This venture has helped to resolve the national power shortage in Bangladesh. Remarkably, his unique entrepreneurial and leadership skills has made Baraka Power Limited fully operational and created a valuable organization within a very short span of time. Then he went on to establish a second power plant named Baraka Patenga Power Limited (BPPL) in Chittagong. BPPL is the first power plant to be funded by the World Bank foreign currency loan under IPFF facility. BPPL maintains high environmental standards by introducing a Flue Gas Desulfurization (FGD) system to minimize the environmental impact. Mr. Faisal Chowdhury is also involved in several community and social interest activities and organizations. He is an Elected Executive Member of Foreign Investors Chamber of Commerce & Industry (FICCI) for the year , Executive Member of the Bangladesh Red Crescent Society, Sylhet Unit and MujibJahan Blood Bank and President of Sylhet Zimkhana Cricket Club. He has a deep interest and passion in participating in social and community interest projects that help improve the socioeconomic prosperity of Bangladesh as a whole. Mr. Faisal Chowdhury is well travelled with a good understanding of the diversity of culture. He has visited several countries including India, China, Thailand, Singapore, Hong Kong, Malaysia, Saudi Arabia, Canada, Austria, Germany, UK, USA, Sweden, Finland, Norway, Switzerland etc. He regularly attends business seminars and international exhibitions throughout the world and has built high level international networks to take Bangladeshi businesses into global level. 12 REDHERRING PROSPECTUS

15 REDHERRING PROSPECTUS Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Managing Director of Baraka Power Limited as well as Baraka Group, Gulam Rabbani Chowdhury reflects on his diverse career in machine manufacturing, real estate, power, education and readymade garments industry, where dynamism of entrepreneurship and management discipline are the best parts of it; how to make a new startup to a huge success, how to engage and inspire NRB investors to invest in Bangladesh, how to lead a huge capital investment and extremely complex operation oriented business like power generation successfully, how to develop a strong and high level international network of business relations, how to brand yourself as a respected business leader and many more. At present he is leading the Baraka Power Limited which continuously supplying electricity to the National Grid. The plant is situated at Fenchuganj, Sylhet and powered by General Electric (GE) installed generators producing 51 MW of power and has been operational since With power plant in profitability, Mr. Chowdhury successfully took the private company to IPO flotation, listing it on both Dhaka and Chittagong Stock Exchanges in Bangladesh. With the efforts of Mr. Chowdhury, the success story of Baraka Power Limited set a new milestone for NRB investors, encouraging them to make further investment in the power sector. In 2011 Baraka Power signed a second PPA & IA to build a 50 MW power plant at Patenga, Chittagong which has been continuously supplying electricity to the national grid since 4th May Inspired by the success of these two power plants, he is leading the construction two new 110 MW and 105 MW HFO fired power plants at Chittagong. Developing his entrepreneurial vision further afield, he ventured into the readymade garments industry and he started of a readymade garment under the name of Bela Fashions Limited; ten lines capacity woven garments located at Tongi, Gazipur. Before starting Baraka Power Limited, Mr. Chowdhury with the support of a group of NRB investors successfully established an innovative and unique largescale townscape vision by the name of Royal City in Sylhet, on 2006 which is a project of Royal Homes Limited. It has made a significant impact in the future of Sylhet as a fastdeveloping city, providing well planned residential and commercial facilities. During his career, Mr. Chowdhury identified the lack of high international standard educational facilities in Sylhet. Along with a consortium of NRB investors, he has been a key figure in establishing a leading educational organization by the name of Royal Educare Limited (REL) which aims to raise children with the highest standards of education. REL currently comprises of educational facilities from Eurokids Kindergarten up to and including primary and secondary schooling in RISE (Royal Institute of Smart Education). RISE school has incorporated the world respected and renowned Cambridge Curriculum. The Cambridge body has approved RISE as one of the best technology based premium international schools in the country, located in the heart of Sylhet. Mr. Chowdhury started his business career as Founder Managing Director by establishing Alim Industries Ltd. (An agricultural machinery manufacturing company) in the early 1990 s. His enthusiasm, hard work, dedication, dynamism, foresight and skilled leadership took the company into one of the toprated companies in the Agro Machinery Manufacturing sector. As a result, the company achieved a Presidential Award as a leading Agricultural Machinery Manufacturer of the company in the Bengali year Mr. Chowdhury is also actively involved with some professional organizations where he significantly contributes to the achieve the respective organizations goals. At present he is holding the position of Vice President of Bangladesh Independent Power Producers Association (BIPPA) and an Executive Member of Bangladesh Association of Publicly Listed Companies (BAPLC). Mr. Chowdhury earned his bachelor degree in science under the Chittagong University. He attended many overseas trainings; specializing in metallurgy & manufacturing process, gaining a deep understanding and knowledge of industrial manufacturing and development. He has attended Business Leadership Forum on Smart Energy in Italy. He has visited many countries and attended seminars, international conferences and exhibitions such as in Australia, Canada, China, Denmark, France, Germany, India, Italy, Malaysia, Maldives, Morocco, Singapore, Thailand, Turkey, UAE, UK and USA. As a result of the numerous business successes across a variety of sectors, Mr. Chowdhury has received many accolades and corporate awards. He was born in 1966 & brought up in a respectable family at Sylhet. Whilst he continues to establish successful business, Mr. Chowdhury holds dear to his heart the most important work which needs to be done to enhance the education and health and living standards of the poor and needy throughout Bangladesh. He contributes significantly in many ways to these major and most important issues that Bangladesh is facing. 13

16 Capital Structure and History of capital raising Particulars Before IPO: No. of Ordinary Shares Nominal price Amount (BDT) Authorized Capital 300,000,000 10/ 3,000,000,000 Issued, Subscribed and Paid up capital 99,225,000 10/ 992,250,000 Total paid up capital before IPO (A) 99,225,000 10/ 992,250,000 After IPO: To be issued as IPO (B) [ ] [ ] [ ] Paid up capital (Post IPO) (A+B) [ ] [ ] [ ] *The Company has raised its paidup capital in following phases: Date of Allotment 7 June 2011: First (Subscription to the Memorandum & Articles of Association at the time of Incorporation) Nominal Price Issue Price Number of Shares Issued In cash Other than in cash Bonus Share Amount of Share Capital (BDT) 10/ 10/ 100,000 1,000, April 2014: 2 nd allotment 10/ 10/ 94,400, ,000, January 2017: 3 rd allotment 10/ 10/ 4,725,000 47,250,000 Total 992,250,000 Summary of Valuation Report of securities Sl. No. Valuation Methods Fair Value (BDT) Method1 Net Asset value (NAV) per share Method2(A) Earningbased value per share (Considering Avg. Sector P/E) Method2(B) Earningbased value per share (Considering Avg. Market P/E) Method3 Average Market Price of Similar Stocks Based Valuation Method4 P/BV multiple of Similar Stocks Based Valuation Method5 P/E multiple of Similar Stocks Based Valuation The detailed valuation workings of the abovementioned methods are furnished under the head of Valuation Report of securities prepared by the Issue Manager in this prospectus. 14 REDHERRING PROSPECTUS

17 REDHERRING PROSPECTUS SECTION: I I CONDITIONS IMPOSED BY THE COMMISSION 15

18 CONDITIONS IMPOSED BY THE COMMISSION UNDER RULE 4(2) OF THE BANGLADESH SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2015 (a) Conducting road show and submission of application: (i) The issuer/issue manager shall send invitation to the eligible investors, both in writing and through publication in at least 5 (five) widely circulated national dailies, giving at least 10 (ten) working days time, to the road show indicating time and venue of such event. The invitation letter shall accompany a redherring prospectus containing all relevant information covering the proposed size of the issue and at least 3 (three) years audited financial statements and valuation report, prepared by the issue manager without mentioning any indicative price, as per internationally accepted valuation methods. The redherring prospectus shall be prepared without mentioning the issue price or number of securities to be offered; (ii) Representatives from the exchanges shall present in the road show as observers; (iii) Eligible investors shall submit their comments and observations, if any, to the issuer or issue manager within 03(three) working days of the road show; (iv) After completion of the road show, the redherring prospectus shall be finalized on the basis of comments and observations of the EIs participated in the road show. The valuation report as finalized must be included in the redherring prospectus including detail about the qualitative, quantitative factors and methods of valuation; (v) The application along with the redherring prospectus and required documents shall be simultaneously submitted to the Commission and the exchanges as per rule 4(1)(a). (b) (c) Consent for bidding to determine the cutoff price:after examination of the prospectus and relevant documents, the Commission, if satisfied, shall issue consent to commence bidding by the eligible investors for determination of the cutoff price. Determination of the cutoff price: (i) Eligible investors shall participate in the electronic bidding and submit their intended quantity and price: Provided that any connected person or related party of the issuer, issue manager or registrar to the issue shall not be eligible to participate in the bidding; (ii) No eligible investor shall quote for more than 2% (two percent) of the total amount offered against their respective quota; (iii) Eligible investors bidding shall be opened for 72 (seventy two) hours round the clock; (iv) The bidding shall be conducted through an uniform and integrated automated system of the exchanges, especially developed for pubic issue subscription; (v) The value of bid at different prices will be displayed on the screen without identifying the bidders; (vi) The bidders shall deposit at least 20% (twenty percent) of the bid amount in advance in the designated bank account maintained by the exchange conducting the bidding; (vii) The bidders can revise their bids for once, within the bidding period, of their first bid price; up to 10% (ten percent) variation (viii) After completion of the bidding period, the cutoff price will be determined at nearest integer of the lowest bid price at which the total securities offered to eligible investors would be exhausted; (ix) All the eligible investors participating in the bidding shall be offered to subscribe the securities at the cutoff price. It is mandatory for EIs bidding at or above the cutoff price to subscribe up to their intended quantity but optional for EIs bidding below the cutoff price; (x) The EIs excluding mutual funds and CIS shall be allotted securities on prorata basis at the cutoff price. Mutual funds and CIS shall be allotted securities reserved for them on prorata basis; 16 REDHERRING PROSPECTUS

19 REDHERRING PROSPECTUS (xi) The securities shall be offered to general public for subscription at an issue price to be fixed at 10% discount (at nearest integer) from the cutoff price; (xii) The issuer and the issue manager shall prepare the draft prospectus including the status of bidding, cutoff price, list of eligible investors with number of securities subscribed for, price and number of securities for offering to the general public and submit with relevant documents, simultaneously to the Commission and the exchanges within 5 (five) working days from the closing day of bidding. (d) Subscription by the eligible investors: (i) After examination of the draft prospectus and relevant documents, the Commission, if satisfied, shall issue consent for raising of capital from the general public and approve the prospectus; (ii) The balance amount of subscription shall be paid by the eligible investors prior to the date of opening of subscription to the general public: provided that in case of failure to deposit the remaining amount by the eligible investors, advance bid money deposited by them shall be forfeited by the Commission and the unsubscribed securities shall be taken up by the underwriters. ELIGIBLE INVESTOR or EI As per Rule 2(1)(e) of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015: eligible investor or EI means the following institution who has business operation or investment in Bangladesh and registered with the electronic subscription system of the exchanges: i Merchant Bankers and Portfolio Managers; ii Asset Management Companies; iii Mutual Funds and Collective Investment Scheme (CIS); iv Stock Dealers; v Banks; vi Financial Institutions; vii Insurance Companies; viii Alternative Investment Fund Managers; ix Alternative Investment Funds; x Foreign Investors having account with any Securities Custodian registered with the Commission; xi Recognized Provident Funds, Approved Pension Funds and Approved Gratuity Funds; and xii Other Institutions as approved by the Commission; ALLOCATION OF SHARES OF (BPPL) As per Rule 4 (2)(C)(x),(xi) and Rule 6 of the Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015 the shares of BPPL will be allocated in the following manner: Eligible Investors (EI) General Public (GP) EI excluding Mutual Funds and CIS Mutual Funds and CIS 50% at the cut off price 10% at the cut off price GP excluding NRB 30% at 10% discount (at nearest integer) from the cut off price NRB 10% at 10% discount (at nearest integer) from the cut off price 17

20 SECTION: III DECLARATION 18 REDHERRING PROSPECTUS

21 REDHERRING PROSPECTUS Annexure A DECLARATION ABOUT THE RESPONSIBILITY OF THE DIRECTORS, INCLUDING THE CEO OF THE ISSUER IN RESPECT OF THE PROSPECTUS [See rule 4 (1)(d)] This redherring prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity, accuracy and adequacy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents, the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative actions against any or all of us as it may deem fit. We also confirm that full and fair disclosures have been made in this prospectus to enable the investors to make a well informed decision for investment. Sd/ Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Sd/ Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Sd/ Monzur Kadir Shafi Nominated Director by Baraka Power Limited Sd/ Md. Shirajul Islam Nominated Director by Baraka Power Limited Sd/ Engr. Jalal Uddin Ahmed Chowdhury Independent Director Sd/ Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Limited 19

22 SECTION: IV ABOUT THE ISSUER 20 REDHERRING PROSPECTUS

23 REDHERRING PROSPECTUS Name of the issuer, dates of incorporation and commencement of its commercial operations, its logo, addresses of its registered office, other offices and plants, telephone number, fax number, contact person, website address and address: Name of the Issuer : Baraka Patenga Power Limited Date of Incorporation : 7 June 2011 Commencement of Commercial Operations : 4 May 2014 Logo : Registered Office : Khairun Bhaban (6th Floor), Mirboxtola, Sylhet Corporate Office : 6/A/1 (2nd Floor), Segunbagicha, Dhaka1000 Other Office (Plant) : No. 16 Chinese Ghat, Airport Road, South Patenga, Patenga, Chittagong Telephone Number : , Fax Number : Contact Person : Mr. Mohammed Monirul Islam Website Address : Address : info@bpplbd.com The names of the sponsors and directors of the issuer: Sl. Name of Sponsors 1 Barakatullah Electro Dynamics Limited (Currently Baraka Power Limited) 2 Mr. Faisal Ahmed Chowdhury 3 Mr. Gulam Rabbani Chowdhury Sl. Name of the Director (Current) 1 Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 2 Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) 3 Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 4 Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) 5 Md. Shirajul Islam (Nominated Director by Baraka Power Limited) 6 Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) 7 Engr. Jalal Uddin Ahmed Chowdhury (Independent Director) 8 Helal Ahmed Chowdhury (Nominated Independent Director by Baraka Power Limited) 21

24 The name, logo and address of the auditors and registrar to the issue, along with their telephone numbers, fax numbers, contact persons, website and addresses: Auditor Name: : Kazi Zahir Khan & Co., Chartered Accountants Logo : Address : Shamsunnahar & Wazi Complex (8 th Floor) Suite9B, 31/C/1, Topkhana Road, Segunbagicha, Dhaka Telephone Number : Fax Number : Contact Person : Mr. AbdullaAlMahmud, FCA, FCMA, FCS, LLB Website Address : Address : mahmudkzkcbd@gmail.com Registrar to The Issue Name : UNICAP Investments Limited Logo : Address : Noor Tower (4th floor), 73 Sonargaon Road, Dhaka1205 Telephone Number : Fax Number : Contact Person : Mr. Salamul Latif Choudhury, Chief Executive Officer (C.C.) Website Address : Address : info@unicapinvestments.com The name(s) of the stock exchanges where the specified securities are proposed to be listed: Dhaka Stock Exchange Limited 9/F, Motijheel C/A, Dhaka 1000 Chittagong Stock Exchange Limited (CSE) CSE Building, 1080, Sheikh Mujib Road, Chittagong REDHERRING PROSPECTUS

25 REDHERRING PROSPECTUS SECTION: V CORPORATE DIRECTORY OF THE ISSUER 23

26 Registered Office : Khairun Bhaban (6th Floor), Mirboxtola, Sylhet. Corporate Office : 6/A/1 (2nd Floor), Segunbagicha, Dhaka1000 Factory (Power Plant) : No. 16 Chinese Ghat, Airport Road, South Patenga, Patenga, Chittagong Auditor : Issue Manager : Kazi Zahir Khan & Co., Chartered Accountants Shamsunnahar & Wazi Complex (8 th Floor), Suite9B, 31/C/1, Topkhana Road, Segunbagicha, Dhaka LankaBangla Investments Limited City Center (Level 24) 90/1 Motijheel C/A, Dhaka 1000 Registrar To The Issue : Legal Advisor : Tax Consultant : Company Secretary : Mr. Mohammad Rana UNICAP Investments Limited Noor Tower (4th floor), 73 Sonargaon Road, Dhaka1205 Sarwar & Associates Flat # 4C, House # 96A, Road # 7 Block # F, Banani, Dhaka1213 Podder & Associates 6/A/1 (Ground Floor), Segun Bagicha, Dhaka All investors are hereby informed by the Company that the Company Secretary would be designated as Compliance Officer who will monitor the compliance of the Acts, Rules, Regulations, Notifications, Guidelines, Conditions, Orders/Directions issued by the Commission and/or Stock Exchange(s) applicable to the conduct of the business activities of the Company, so as to promote the interest of the investors in the security issued by the Company, and for redressing investors grievances. 24 REDHERRING PROSPECTUS

27 REDHERRING PROSPECTUS SECTION: VI DESCRIPTION OF THE ISSUER 25

28 Summary (i) The summary of the industry and business environment of the issuer: Power Sector Master Plan (PSMP 2016) sets the roadmap for power generation in the country up to The power sector was the second highest receiver of ADP allocation in Budget FY201718, receiving BDT 18,845 crore, an increase of 21.8% over the amount allocated in the previous fiscal indicating the government s prioritization of the sector as all economic activity is directly or indirectly dependent on power generation. Draft PSMP 2016 Estimated Power Demand and Targeted Power Generation (MW) Year Estimated Power Demand Targeted Power Generation ,545 12, ,434 30, ,034 57,238 The government s targets include maximizing efficiency of gas usage amid fast depleting gas reserves in the country. Currently over 50% of the country s electricity needs is met through gas usage. The increased demand for gas will be partially fulfilled with imports of Liquefied Natural Gas (LNG). The government aims to ensure LNG imports account for 17% of total gas usage in 2019, 40% in 2023, 50% in 2028 and 70% in The bulk of the increment in targeted power generation will be met through the use of coal as per the government plans. Almost 20% of the nation s energy demands will be met through coal, up from a meager 3% presently. Pilot operation of coal mines will be initiated in Barapukuria, Digipara, Karaspir and Phulbari by phases. As coal remains significantly cheaper than LNG, coal is expected to be the fuel of choice for power generation. Aside from encouragement of private sector power generation, the government has several power sector megaprojects in the public sector. These include the 2400MW Rooppur Nuclear Power Plant costing USD 13.2 bn, 1200MW Matarbari CoalFired Power Plant at a cost of USD 4.5 bn, 1,320MW Payra CoalFired Power Plant costing around USD 1.56 bn and 1,320MW Rampal CoalFired Power Plant which is estimated to cost around USD 5bn including additional costs of setup. Of these projects, Rooppur and Matarbari have received substantial allocation in FY Data Source: BPDB (ii) Summary of consolidated financial, operating and other information: Sl. Particulars 31 Dec17 (Half Yearly) 30 June17 Amount in BDT 1 Turnover 1,144,108,972 2,648,485,011 2 Gross Profit 304,556, ,619,560 3 Net Profit Before Tax 156,639, ,996,012 4 Net Profit after Tax 152,909, ,471,888 5 Total Assets 5,622,878,510 5,329,539,014 6 Paidup Capital 992,250, ,250,000 7 Retained Earnings 762,162, ,097,816 8 No. of Shares 99,225,000 99,225,000 9 Face Value NAV per share Earnings per Share REDHERRING PROSPECTUS

29 REDHERRING PROSPECTUS General Information Name and address, telephone and fax numbers of the registered office, corporate head office, other offices, factory, business premises and outlets of the issuer: Registered Office: Address Khairun Bhaban (6 th Floor), Mirboxtola, Sylhet Telephone Fax Corporate Office: Address 6/A/1 ( 2nd Floor), Segunbagicha, Dhaka1000 Telephone , Fax Factory (Power Plant) Address No. 16 Chinese Ghat, Airport Road, South Patenga, Patenga, Chittagong Telephone Fax Not available Note: BPPL does not have any other offices and outlets. The board of directors of the issuer: Sl. No. Name Designation 1 Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Ltd. & Chairman 2 Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Ltd. & Managing Director 3 Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Ltd. 4 Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Ltd. 5 Mr. Md. Shirajul Islam Nominated Director by Baraka Power Ltd. 6 Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Ltd. 7 Engr. Jalal Uddin Ahmed Chowdhury Nominated Independent Director 8 Mr. Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Ltd. Names, addresses, telephone numbers, fax numbers and addresses of the chairman, managing director, whole time directors, etc. of the issuer: Sl. Name Position 1. Mr. Faisal Ahmed Chowdhury Chairman (Nominated Director by Baraka Power Ltd.) Address, Telephone number, Fax number and e mail address 2Nirjhor, Lovely Road, West Subidbazar, Sylhet. Tel : Fax No. : faisal@barakapower.com 2. Mr. Gulam Rabbani Chowdhury Managing Director (Nominated Director by Baraka Power Ltd.) 48Sagardigirpar, Subidbazar, Sylhet Tel : Fax No. : rabbani@barakapower.com 3 Mr. Fahim Ahmed Chowdhury Nominee Director by Baraka Power Ltd. 2Nirjhor, Lovely Road, West Subidbazar, Sylhet Tel : Fax No. : fahim@barakapower.com 27

30 4 Mr. Monzur Kadir Shafi Nominee Director by Baraka Power Ltd. 28B, Anamika, East Shahi Eidgah, kotwali, Sylhet Tel : Fax No. : eleem@barakapower.com 5 Mr. Md. Shirajul Islam Nominee Director by Baraka Power Ltd. House# 80, Road# 3, Block# E, Shahjalal Uposhohar, Sylhet Tel : Fax No. : shirajul@belafashions.com 6 Mr. Afzal Rashid Chowdhury Nominee Director by Baraka Power Ltd. Rashid House, Digonto26, Amberkhana, Sylhet Tel : Fax No. : arashidchy@yahoo.com 7 Engr. Jalal Uddin Ahmed Chowdhury Independent Director 8/4, Nilkhet, Babupara, Flat No. 9A, DSA Tower, Dhaka Tel : Fax No. : ja.chowdhury@gmail.com 8 Mr. Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Limited FlatW5, House # 78. Road No. 18, Block A, Banani, Dhaka Tel : Fax No. : info@barakapower.com Names, addresses, telephone numbers, fax numbers and addresses of the CFO, company secretary, legal advisor, auditors and compliance officer: Sl. Name Position/ Relation Address Mr. Mohammed Monirul Islam Mr. Mohammad Rana Chief Financial Officer 3. Sarwar & Associates Legal Advisor 4. Kazi Zahir Khan & Co. Chartered Accountants Company Secretary & Compliance officer Auditor 271/B Khilgaon, Dhaka /1, Walter Road, Sutrapur, Dhaka1100 Flat # 4C, House # 96A, Road # 7, Block # F, Banani, Dhaka1213 Shamsunnahar & Wazi Complex (8th Floor) Suite9B, 31/C/1, Topkhana Road, Segunbagicha, Dhaka Telephone Numbers Fax Numbers Addresses monir@barakapower.com rana@barakapower.com Not Available sarwar1967@hotmail.com mahmudkzkcbd@gmail.com Names, addresses, telephone numbers, fax numbers, contact person, website addresses and addresses of the issue manager(s), registrar to the issue etc: Issue Manager Contact Person Contact Details LankaBangla Investments Limited City Center (Level 24) 90/1 Motijheel C/A, Dhaka 1000 Mr. Hassan Zabed Chowdhury Chief Executive Officer Tel: Fax: info@lankabanglainvestments.com Website: REGISTRAR TO THE ISSUE CONTACT PERSON CONTACT NUMBER UNICAP Investments Limited Noor Tower (4th floor), 73 Sonargaon Road Dhaka1205 Mr. Salamul Latif Choudhury Chief Executive Officer (C.C.) Tel: Fax: info@unicapinvestments.com Website: 28 REDHERRING PROSPECTUS

31 REDHERRING PROSPECTUS Details of credit rating: The names of all the credit rating agencies from which credit rating has been obtained: Name of the Credit Rating Agencies Rating Date Credit Rating Agency of Bangladesh Ltd. January 25, 2018 National Credit Ratings Ltd. The details of all the credit ratings obtained for the issue and the issuer: November 23, 2016 September 22, 2015 Entity Rating Year Rating Date Outlook Long Term Short Term 2017 AA 3 ST3 January 25, 2018 Stable 2016 A ST2 November 23, 2016 Stable 2015 A ST2 September 22, 2015 Stable The rationale or description of the ratings (s) so obtained, as furnished by the credit rating agency(s): As per credit rating report dated January 25, 2018: Credit Rating Agency of Bangladesh Ltd. has assigned AA3(Double A Three) rating of Baraka Patenga Power Ltd. CRAB has also assigned AA3 (Lr) rating to BDT 2,793.8 million longterm loan and BDT million cash credit loan limit of Baraka Patenga Power Ltd. CRAB has assigned ST3ratingto BDT 1,900.0million nonfunded limit of the Company. CRAB assigned Stable Outlook to the ratings of Baraka Patenga Power Ltd. Table 1: Financial Highlights FINANCIAL HIGHLIGHT Sales 2, ,119.2 Net Profit Cash Flow From Operation Shareholders Equity 1, ,481.6 Borrowed Funded Loan Limit 2, ,175.5 Borrowed Fund Limit 4, ,075.5 Inventory Conversion Period 107 Days 118 Days Receivable Collection Period 104 Days 110 Days Payable Deferral Period 60 Days 1 Days Cash Conversion Cycle 151 Days 226 Days Gross Profit Margin 24.3% 30.0% EBITDA Margin 27.2% 33.5% Net Profit Margin 12.0% 13.5% Fixed Asset Turnover 0.7 X 0.5 X Borrowed Fund to Equity 1.6 X 2.1 X Sales to Borrowed Fund (Limit) 8.7 X 25.2 X Debt Service Coverage Ratio 1.3 X 2.9 X Times Interest Earned Ratio 2.2 X 2.4 X 29

32 Baraka Patenga Power Ltd. is a public limited company, 51% equity investment is held by Baraka Power Ltd. The Company is 50 MW HFO fired IPP power plant at Patenga, Chittagong, established in 2011 on Build, Own & Operate basis for 15 years. It started its commercial operation in The Plant has been operating by using 08 nos. of brand new Rolls Royce Engines. Earlier, the Project was financed through Bangladesh Bank, IPFF project cell and few commercial banks. In 2017, the Company had sales of BDT 2,648.4 million and witnessed 12.0% net profit margin. Faisal Ahmed Chowdhury is the Chairman of Baraka Patenga Power Ltd., holding 3.0% shares. Mr. Ahmed is also Executive Member of Foreign Investors Chamber of Commerce and Industry for the year Gulam Rabbani Chowdhury is the Managing Director of the Company who also holds 3.0% shares of the Company. Mr. Chowdhury has long and diversified experiences in machine manufacturing, real estate, power, education and RMG sector. The rating considered stable revenue generation ability with increasing net profit margin during the last four years due to run the plant at satisfactory level and efficient working capital management as well as positive cash flow position at present. The power plant of the Company has a contracted capacity of 50 MW contributing to the national grid under a 15 years contract with BPDB. The power plants are HFO fired and commissioned using 8 brand new Rolls Royce Engines having capacity of MW each. Total capacity of the plant is MW. The rating is factored by the power plant s efficient operation since COD, with no instances of liquidity damage due to any default in meeting PPA obligations. The average load factor of the power plant has been at the satisfactory level. Out of 15 years concession agreement, it has only 11 years remaining. The Company has completed successful four years of operation. Moreover, it has only 7 years remaining of its longterm loan agreement. In next few years, the plant would go under overhauling which require capital fund.debt to Equity was 1.6 X. In 2017, EBITDA was BDT 719 million which was four times to its longterm loan burden. The revenue of the Company is composed of three components. Capacity Payment, Energy Payment and Fuel Price. Capacity payment is directly related to the Dependable Capacity of the power plant. Fuel price covers 75% of total revenue. During the latest year, the power plant ran on 50.0 MW dependable capacity. Plant factor dropped to 63% in 2017 which was around 66% in year ago. However, hike of energy price did not affect the total revenue. Energy sales of Baraka Patenga Power Ltd. depending on the actual demand posted by BPDB. In 2017, total sales of the Company was BDT 2,648.4 million which was 25.0%less than that of previous year. The Company saw slight deterioration in controlling cost of sales. However, it experienced efficiency in operating expense, which resulted stable profitability. Net Operating Profit was BDT million which was BDT million one year back. The Company saw improvement in financial expense. Net Profit slightly increased to BDT million in Net Profit Margin was 12.0% which was 13.5% in As of Balance Sheet date Shareholders Equity was BDT 1,700.8million comprised of 58% Share Capital. Total Funded Borrowed Fund Limit came down to BDT 4,693.8 million. The Company observed moderate leverage. Borrowed Fund to Equity was 1.6 X. The Company observed moderate operating cycle. The Cash conversion cycle was 151 Days in Moderate cash conversion cycle resulted BDT million Cash Flow From Operation, which was 21.2% to sales. The Company was found strong coverage position in Debt Service Coverage Ratio and Times Interest Earned Ratio were 1.3 X and 2.2 X respectively. In CRAB s view, power shortage in Bangladesh has made the sector highly attractive for investment. Power sector investment offers the lenders very low business risks compared to corporate entities. Highly supportive authority offers implied sovereign support to ensure reliability of HFO supply and regulatory framework allows full cost recovery. Large well protected service area and support for the electric transmission system outweigh user considerations. Competition is absent in the sector and monopoly or oligopoly is contained by contract with public sector entities and regulatory authority. Regulatory framework is designed fundamentally to achieve balance between supply reliability and service, efficiency, price and financial returns to the project undertaker. However, actual execution of the long term plan is subject to effective measures taken against corruption in administration, high system losses, delays in completion of new plants, low plant efficiencies, erratic power supply, electricity theft, blackouts, and shortages of funds for power plant maintenance as well as political stability, stability and reconstruction of quick rental policy and government decision under separate regime. 30 REDHERRING PROSPECTUS

33 REDHERRING PROSPECTUS Rating Strengths Experienced promoters Qualified and experienced professionals in top and mid management Strong Management Information System Good feedback from external borrowers Continuous investment in different sector Strong group support Rating Challenges Moderate debt burden Lower plant factor over the period Capital Structure: Authorized, issued, subscribed and paid up capital (number and class of securities, allotment dates, nominal price, issue price and form of consideration): Particulars No. of Ordinary Shares Nominal price Amount (BDT) Before IPO: Authorized Capital 300,000,000 10/ 3,000,000,000 Issued, Subscribed and Paid up capital 99,225,000 10/ 992,250,000 Total paid up capital before IPO (A) 99,225,000 10/ 992,250,000 After IPO: To be issued as IPO (B) [ ] [ ] [ ] Paid up capital (Post IPO) (A+B) [ ] [ ] [ ] *The Company has raised its paidup capital in following phases: Date of Allotment Nominal Price Issue Price Number of Shares Issued In cash Other than in cash Bonus Share Amount of Share Capital (BDT) 7 June 2011: First (Subscription to the Memorandum & Articles of Association at the time of Incorporation) 10/ 10/ 100,000 1,000, April 2014: 2 nd allotment 10/ 10/ 94,400, ,000, January 2017: 3 rd Allotment 10/ 10/ 4,725,000 47,250,000 Total 992,250,000 Size of the present issue, with breakup (number of securities, description, nominal value and issue amount): Particulars Number of Securities to be Offered Description Nominal Value (BDT) Issue Amount (BDT) For EIs [ ] Offer price Tk. [ ] each, including a premium of Tk. [ ] per share [ ] [ ] For General Public [ ] Offer price Tk. [ ] each, including a premium of Tk. [ ] per share [ ] [ ] Total [ ] [ ] Note: Infromation represented by [ ] will be incorporated after of cutoff price. 31

34 Paid up capital before and after the present issue, after conversion of convertible instruments (if any) and share premium account (before and after the issue): (As per Audited Accounts) Particulars Amount in BDT Paid up capital before the present issue 992,250,000 Paid up capital after the present issue [ ] Paid up capital after conversion of convertible instruments (if any) N/A Share premium account before the present issue N/A Share premium account after the present issue [ ] Category wise shareholding structure with percentage before and after the present issue and after conversion of convertible instruments (if any): Directors & Sponsors Shareholdings Percentage (%) SL. No. Name of Directors & Sponsors No. of Share Before IPO After IPO 1. Baraka Power Limited 506,047, % [ ] 2. Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 2,976, % [ ] 3. Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) 2,976, % [ ] 4. Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 850, % [ ] 5. Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) 1,575, % [ ] 6. Md. Shirajul Islam (Nominated Director by Baraka Power Limited) 1,050, % [ ] 7. Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) 1,050, % [ ] Total 61,083, % [ ] 32 REDHERRING PROSPECTUS

35 REDHERRING PROSPECTUS Other than Directors & Sponsors Shareholdings SL. No. Name of the Shareholders No. of Share Before IPO Percentage (%) After IPO 1 Mijanur Rahman Choudhury 2,730, % [ ] 2 Abdul Bari 892, % [ ] 3 Momthaz Chowdhury 2,919, % [ ] 4 Rushina Ahmed Chowdhury 1,984, % [ ] 5 Syeda Yasmin Hossain 1,984, % [ ] 6 NoorEZannat Chowdhury 1,664, % [ ] 7 Abeda Khanom Chowdhury 1,821, % [ ] 8 Nasim Ahmed Chowdhury 729, % [ ] 9 Ubaydia Chowdhury 1,050, % [ ] 10 Fokrul Alam Chowdhury 450, % [ ] 11 Nanu Kazi Md. Miah 1,050, % [ ] 12 Atikur Rahman 997, % [ ] 13 Nayem Ahmed Chowdhury 897, % [ ] 14 Md. Humayun Ahmed 472, % [ ] 15 Alimul Ahsan Chowdhury 446, % [ ] 16 Niaz A. Khan 787, % [ ] 17 Sultana Jesmin Chino 399, % [ ] 18 Shoeb Khan 577, % [ ] 19 Yeaheya Murad Khan 735, % [ ] 20 Ali Ahmed 661, % [ ] 21 Foster Securities Ltd. 525, % [ ] 22 Zakir Hossain 525, % [ ] 23 Kazi Md. Angur Miah 525, % [ ] 24 Masrur Chowdhury 525, % [ ] 25 Mohammed Abdul Ahad 525, % [ ] 26 Abdul Wasay Chowdhury (Zuber) 420, % [ ] 27 Alimus Sadat Chowdhury 525, % [ ] 28 Abdul Mumin 525, % [ ] 29 Masud Ahmed 525, % [ ] 30 Mohammed Monsur Alam Chowdhury 525, % [ ] 31 Syed Musharaf Hussain Chowdhury 52, % [ ] 32 Sajeda Chowdhury 315, % [ ] 33 Tanjeel Wadud Chowdhury (Sagor) 367, % [ ] 34 Shubina Ahmed Chowdhury 787, % [ ] 35 Nasrin Sultana Sampa 472, % [ ] 36 Roushan Ali Khan 105, % [ ] 37 Shamsher Ali Tarafder 105, % [ ] 33

36 SL. No. Name of the Shareholders No. of Share Before IPO Percentage (%) After IPO 39 Tania Tabassum 105, % [ ] 40 Abdul Mannan 577, % [ ] 41 Mumina Khatun 105, % [ ] 42 Mohibun Bari Chowdhury 840, % [ ] 43 Enamul Haque Khan 178, % [ ] 44 Nurjahan Begum 73, % [ ] 45 David Hasan 420, % [ ] 46 Azizur Rahman 105, % [ ] 47 Dr. Hasina Choudhury 105, % [ ] 48 Rebunnessa Chowdhury 262, % [ ] 49 Mohammod Shamsur Rahman 262, % [ ] 50 Naznin Sultana 525, % [ ] 51 Suraiya Rahman 84, % [ ] 52 Sayem Ahmed 472, % [ ] 53 Mohammed Aziz baksh 367, % [ ] 54 Ahmed Tarek 26, % [ ] 55 Md. Motiul Islam 199, % [ ] 56 Md. Shahidul Islam 42, % [ ] 57 Saleha Afrooz 105, % [ ] 58 Abdul Muktadir Chowdhury 157, % [ ] 59 Mohammed Sadiqur Rahman 420, % [ ] 60 Feroz Suleman Atcha 105, % [ ] 61 Mridulal Bhattacharjee 63, % [ ] 62 Anamika Roy 52, % [ ] 63 Jayanta Kumar Podder 105, % [ ] 64 Sosanta Kumar Podder 100, % [ ] 65 Ashrafun Nessa 525, % [ ] 66 Anisul Khadija 210, % [ ] 67 Touhidul Islam 840, % [ ] Total 38,141, % There is no convertible instrument, so no conversion is required. 34 REDHERRING PROSPECTUS

37 REDHERRING PROSPECTUS Where shares have been issued for consideration in other than cash at any point of time, details in a separate table, indicating the date of issue, persons to whom those are issued, relationship with the issuer, issue price, consideration and valuation thereof, reasons for the issue and whether any benefits have been accrued to the issuer out of the issue: Date of Issue Persons to whom those are issued No. of shares allotted Relationship with the Issuer Reasons for the issue Consideration and Valuation Benefits from the Issue Issue Price 2Jan17 Baraka Power Limited 2,409,750 Holding Company Distribution of Faisal Ahmed Chowdhury 141,750 Chairman Accumulated Profit Other than Cash (Bonus) Enhancement of Capital Base and Reinvestment 10/ Gulam Rabbani Chowdhury 141,750 Director & Managing Director Monzur Kadir Shafi 75,000 Director Fahim Ahmed Chowdhury 40,500 Director Afzal Rashid Chowdhury 50,000 Director Md. Shirajul Islam 50,000 Director Touhidul Islam 40,000 Shareholder Mijanur Rahman Choudhury 130,000 Shareholder Abdul Bari 42,500 Shareholder Momthaz Chowdhury 139,000 Shareholder Rushina Ahmed Chowdhury 94,500 Shareholder Syeda Yasmin Hossain 94,500 Shareholder NoorEZannat Chowdhury 79,250 Shareholder Abeda Khanom Chowdhury 86,750 Shareholder Nasim Ahmed Chowdhury 34,750 Shareholder Ubaydia Chowdhury 50,000 Shareholder Fokrul Alam Chowdhury 21,450 Shareholder Nanu Kazi Md. Miah 50,000 Shareholder Atikur Rahman 47,500 Shareholder Nayem Ahmed Chowdhury 42,750 Shareholder Md. Humayun Ahmed 22,500 Shareholder Alimul Ahsan Chowdhury 21,250 Shareholder Niaz A. Khan 37,500 Shareholder Sultana Jesmin Chino 19,000 Shareholder Shoeb Khan 27,500 Shareholder Yeaheya Murad Khan 35,000 Shareholder Ali Ahmed 31,500 Shareholder Foster Securities Ltd. 25,000 Shareholder Zakir Hossain 25,000 Shareholder Kazi Md. Angur Miah 25,000 Shareholder Masrur Chowdhury 25,000 Shareholder Mohammed Abdul Ahad 25,000 Shareholder Abdul Wasay Chowdhury (Zuber) 20,000 Shareholder Alimus Sadat Chowdhury 25,000 Shareholder Abdul Mumin 25,000 Shareholder Masud Ahmed 25,000 Shareholder Mohammed Monsur Alam Chowdhury 25,000 Shareholder 35

38 Date of Issue Persons to whom those are issued No. of shares allotted Relationship with the Issuer Reasons for the issue Consideration and Valuation Benefits from the Issue Issue Price 2Jan17 Syed Musharaf Hussain Chowdhury 2,500 Shareholder Distribution of Accumulated Profit Other than Cash (Bonus) Enhancement of Capital Base and Reinvestment 10/ Sajeda Chowdhury 15,000 Shareholder Tanjeel Wadud Chowdhury (Sagor) 17,500 Shareholder Shubina Ahmed Chowdhury 37,500 Shareholder Nasrin Sultana Sampa 22,500 Shareholder Roushan Ali Khan 5,000 Shareholder Shamsher Ali Tarafder 5,000 Shareholder Rawad Ashraf 5,000 Shareholder Tania Tabassum 5,000 Shareholder Abdul Mannan 27,500 Shareholder Mumina Khatun 5,000 Shareholder Mohibun Bari Chowdhury 40,000 Shareholder Enamul Haque Khan 8,500 Shareholder Nurjahan Begum 3,500 Shareholder David Hasan 20,000 Shareholder Azizur Rahman 5,000 Shareholder Dr. Hasina Choudhury 5,000 Shareholder Rebunnessa Chowdhury 12,500 Shareholder Mohammod Shamsur Rahman 12,500 Shareholder Naznin Sultana 25,000 Shareholder Suraiya Rahman 4,000 Shareholder Sayem Ahmed 22,500 Shareholder Mohammed Aziz baksh 17,500 Shareholder Ahmed Tarek 1,250 Shareholder Md. Motiul Islam 9,500 Shareholder Md. Shahidul Islam 2,000 Shareholder Saleha Afrooz 5,000 Shareholder Abdul Muktadir Chowdhury 7,500 Shareholder Mohammed Sadiqur Rahman 20,000 Shareholder Feroz Suleman Atcha 5,000 Shareholder Mridulal Bhattacharjee 3,000 Shareholder Anamika Roy 2,500 Shareholder Jayanta Kumar Podder 5,000 Shareholder Sosanta Kumar Podder 4,800 Shareholder Ashrafun Nessa 25,000 Shareholder Anisul Khadija 10,000 Shareholder 36 REDHERRING PROSPECTUS

39 REDHERRING PROSPECTUS Where shares have been allotted in terms of any merger, amalgamation or acquisition scheme, details of such scheme and shares allotted: No shares have been allotted in terms of any merger amalgamation or acquisition. Where the issuer has issued equity shares under one or more employee stock option schemes, datewise details of equity shares issued under the schemes, including the price at which such equity shares were issued: The issuer has not issued any equity shares under stock option to its employees. If the issuer has made any issue of specified securities at a price lower than the issue price during the preceding two years, specific details of the names of the persons to whom such specified securities have been issued, relation with the issuer, reasons for such issue and the price thereof: The above mentioned required information will be furnished after determination of the cutoff price. The decision or intention, negotiation and consideration of the issuer to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue: The Company has no such decision or intention, negotiation and consideration to alter the capital structure by way of issue of specified securities in any manner within a period of one year from the date of listing of the present issue. 37

40 The total shareholding of the sponsors and directors in a tabular form, clearly stating the names, nature of issue, date of allotment, number of shares, face value, issue price, consideration, date when the shares were made fully paid up, percentage of the total pre and post issue capital, the lock in period and the number and percentage of pledged shares, if any, held by each of them: No. of Share Hold Date of Allotment/ Shares were made fully paid up Nature of Issue Baraka Power Limited Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) Md. Shirajul Islam (Nominated Director by Baraka Power Limited) Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) Consideration Face value of Share (Tk.) Issue Price lock in period 7Jun14 By Subscription to the MoA 51,000 24,500 24,500 Cash Apr14 By Allotment (Cash) 48,144,000 2,810,500 3,700,500 1,410,000 1,700,000 1,000,000 1,000,000 Cash Jun15 By Transfer (890,000) (600,000) (200,000) Cash Jan17 By Allotment (Bonus) 2,409, , ,750 40,500 75,000 50,000 50,000 Other than Cash Total 50,604,750 2,976,750 2,976, ,500 1,575,000 1,050,000 1,050,000 3 Years Percentage (%) PreIPO 51.00% 3.00% 3.00% 0.86% 1.59% 1.06% 1.06% PostIPO [ ] [ ] [ ] [ ] [ ] [ ] [ ] Note: There is no pledged shares. The details of the aggregate shareholding of the sponsors and directors, the aggregate number of specified securities purchased or sold or otherwise transferred by the sponsor and/or by the directors of the issuer and their related parties within six months immediate preceding the date of filing the redherring prospectus/prospectus/information memorandum: There have been no purchased or sold or otherwise transferred by the sponsor and/or by the directors of the issuer and their related parties within six months immediate preceding the date of filing the redherring prospectus/prospectus/information memorandum. The name and address of any person who owns, beneficially or of record, 5% or more of the securities of the issuer, indicating the amount of securities owned, whether they are owned beneficially or of record, and the percentage of the securities represented by such ownership including number of equity shares which they would be entitled to upon exercise of warrant, option or right to convert any convertible instrument: Name Address Relationsship No. of Share Holdings Percentage (%) of Shareholdings (PreIPO) Percentage (%) of Shareholdings (Post IPO) Baraka Power Limited 102, Azadi, Mirboxtola, Sylhet, Bangladesh Holding Company 506,047, % [ ] 38 REDHERRING PROSPECTUS

41 REDHERRING PROSPECTUS The number of securities of the issuer owned by each of the top ten salaried officers, and all other officers or employees as group, indicating the percentage of outstanding shares represented by the securities owned: The above information is not applicable as the Company rendered required services under Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited. Description of Business The date on which the issuer company was incorporated and the date on which it commenced operations and the nature of the business which the company and its subsidiaries are engaged in or propose to engage in: Baraka Patenga Power Limited was incorporated as a private limited company on 7 June 2011 Vide Registration No. C93385/11 and subsequently converted into a public limited company on 28 April 2014 with Registrar of Joint Stock Companies and Firms (RJSC) in Bangladesh under the Companies Act, The Company started its commercial operation on 4 May The main activity of the Company is to set up power plants for generation and supply of electricity to national grid of Bangladesh. The Company has two subsidiaries namely Karnaphuli Power Limited (KPL) and Baraka Shikalbaha Power Limited (BSPL). The principal activity of these companies is to set up power plants for generation and supply of electricity. Nature of Business The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and reduce the fuel cost. For the first time in power sector in Bangladesh, a desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level. Subsidiary Company 1. Karnaphuli Power Limited (KPL) Karnaphuli Power Limited was incorporated in Bangladesh on November 17, 2014 as a Private Limited Company having its registered office at 6/A/1 (1st and 2nd floor), Segunbagicha, Dhaka1000. Karnaphuli Power Limited has signed the Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) on February 4, 2018 and has also signed the Implementation Agreement (IA) with the Government of Bangladesh (GOB) represented by the Ministry of Power, Energy and Mineral Resources on the same day. The PPA is signed in connection to the issued Letter of Intent (LOI) to the Company vide memo dated August 8, 2017 of BPDB for implementing HFO fired IPP power plant having capacity of 110 MW on Build, Own, Operate (BOO) basis at Shikalbaha, Chittagong for a term of 15 years from the commercial operation date (COD). The required COD of the plant is 15 months from the date of PPA. Nature of Business: The principal activity of KPL is to set up power plants for generation and supply of electricity. 2. Baraka Shikalbaha Power Limited (BSPL) Baraka Shikalbaha Power Limited was incorporated in Bangladesh on December 13, 2017 as a Private Limited Company having its registered office at 6/A/1, Segunbagicha, Dhaka1000. Bangladesh Power Development Board (BPDB) has issued Letter of Intent (LOI) to Baraka Patenga Power Limited and its consortium vide their memo no dated for implementing HFO fired IPP power plant having capacity of 105 MW on BOO (Build, Own, Operate) basis at Shikalbaha, Chittagong for term of 15 years from the commercial operation date (COD). The required COD of the plant is 9 months from the date of LOI. Nature of Business: The principal activity of BSPL is to set up power plants for generation and supply of electricity. Location of the project: Baraka Patenga Power Limited: South Patenga, Chittagong, Bangladesh. Karnaphuli Power Limited: Shikalbaha, Chittagong, Bangladesh. Baraka Shikalbaha Power Limited: Shikalbaha, Chittagong, Bangladesh. 39

42 Plant, machinery, technology, process, etc: Baraka Patenga Power Limited, a HFO based power plant, is situated at South Patenga, Chittagong on decimal lands of which decimal is duly mutated in favor of the Company. It is generating electricity by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of MW. A cogeneration secondary power plant with capacity of 3.30 MW is also established to generate electricity without fuel. The STG plant is run by heat which is recovered from 08 nos. of Rolls Royce Genset s exhaust gas without burning any fuel. In addition, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level. Process flow diagram of the plant Details of the major events in the history of the issuer, including details of capacity/facility creation, launching of plant, products, marketing, change in ownership and/or key management personnel etc: Related to formation of the company: Date of Incorporation: 7 June, 2011 Conversion of Private to Public Limited Company: April 28, REDHERRING PROSPECTUS

43 REDHERRING PROSPECTUS Major events in the history of the Company: Major events Signing of PPA & IA with BPDB & MPEMR 31 July 2011 Gen Set Purchase Contract with Rolls Royce Marine AS, UK 19 October 2011 Substation Equipment Purchase Contract with Siemens Bangladesh Ltd. 24 January 2012 Exhaust Gas Secondary Power Plant Purchase Contract with Greens Power Ltd., UK 24 February 2012 Signing of Syndicated Term Loan facility of BDT 2,205 million 20 March 2013 Flue Gas Desulfurization (FGD) Equipment Purchase Contract 01 November 2013 Signing of Term Loan facility of USD million funded by World Bank 21 January 2014 Capital raised through existing and other than existing shareholders 30 April 2014 Started Commercial Operation 04 May 2014 Successful Commissioning of Flue Gas Desulfurization 31 August 2014 Successful Commissioning of Steam Turbine Generation (STG) 10 April 2015 Received LOI from BPDP for implementing 110 MW IPP Power Plant under Karnaphuli Power Limited 8 August 2017 Signing of Engine Purchase Agreement with Wartsila Finland OY to purchase 06 nos. of GenSets for Karnaphuli Power Plant, capacity of 110 MW 18 September 2017 Fund Raising Agreement with IDCOL for Karnaphuli Power Limited 18 October 2017 Signing of Term Sheet with LankaBangla Finance Limited for raising fund through Preference Share for Karnaphuli Power Limited 19 October 2017 Signing of PPA & IA for implementing 110 MW IPP Power Plant under Karnaphuli Power Limited 04 February 2018 Received LOI from BPDP for implementing 105 MW IPP Power Plant under Baraka Shikalbaha Power Limited 28 February 2018 Principal products or services of the issuer and markets for such products or services. Past trends and future prospects regarding exports (if applicable) and local market, demand and supply forecasts for the sector in which the product is included with source of data: Principal products or services Generation and supply of electricity is the only product of the Company. Under private sector power generation policy of Bangladesh, the Company is generating electricity and supplying it to Bangladesh Power Development Board (BPDB) from the plant through national grid. Market for products or service The buyer for the product of the Company is solely BPDB and the market of the product is expanded throughout the Country. Past trend and future prospects of export and local market As per BPDB Annual Report , demand of electricity is increasing rapidly due to enhanced economic activities in the country with sustained GDP growth. At present, growth of demand is about 10% which is expected to be more in coming years. The maximum demand in this fiscal year was 2,644 MW (as per PSMP2010). As per PSMP2010, the growth of power generation capacity is estimated to be 10% every year and by the year 2021 the total generation capacity will be 20,000 MW with a per capita electricity usage of 600 Kwh. Year Particulars Fiscal Year Maximum Demand (MW) Maximum peak generation (MW) ,518 6, ,349 6,434 Past trend ,268 7, ,283 7, ,405 9, ,644 9,479 Source: BPDB Annual Report

44 Demand and supply forecasts for the sector in which the product is included In the Power System Master Plan (PSMP) 2010 demand forecast was made based on 7 % GDP growth rate. The electricity development is required to be accelerated to increase access and attain economic development. The desirable economic growth rate would be about 7% p.a. According to PSMP 2010 Study yearwise peak demand is given below: Particulars Fiscal Year Maximum Demand (MW) , ,527 Projected demand , , ,443 Source: Power System Master Plan2010 According to PSMP 2016, yearwise additional power generation plan forecast is given below: Particulars Fiscal Year Additional Power Generation (MW) ,252 Projected additional power generation , , ,269 Source: Power System Master Plan2016 If the issuer has more than one product or service, the relative contribution to sales and income of each product or service that accounts for more than 10% of the company s total revenues: There is only one product i.e. electricity that contributes 100% to the total revenue of the Company. As per Audited Accounts Sl. 1 Name & Address of the customer Bangladesh Power Development Board Bidyut Bhavan 1, Abdul Gani Road Dhaka 1000 Telephone and Fax no , & Web address Customer s contribution JulyDec 2017 (Tk.) JulyJun 2017 (Tk.) 1,144,108,972 2,648,485,011 Description of associates, subsidiary and holding company of the issuer and core areas of business thereof: The particulars of the subsidiary and holding company are furnished below: Name of the Company Relationship with BPPL Core area of Business Shareholding % Operational Status Baraka Power Limited (BPL) Holding Company Generation and supply of electricity Baraka Power holds 51% of BPPL In operation Karnaphuli Power Limited (KPL) Subsidiary Company Generation and supply of electricity BPPL holds 51% of KPL PPA and IA have already been signed. Commercial Operation to be started within 15 months from PPA signed (i.e. 04 Feb 2018) Baraka Shikalbaha Power Limited (BSPL) Subsidiary Company Generation and supply of electricity BPPL holds 51% of BSPL LoI has already been received and accepted. Commercial Operation to be started within 9 months from LOI received (i.e. 28 Feb 2018) The issuer has no associate company. 42 REDHERRING PROSPECTUS

45 REDHERRING PROSPECTUS How the products or services are distributed with details of the distribution channel. Export possibilities and export obligations, if any: The Company generated electricity and supplies it to BPDB. The product of the Company currently has no export possibilities and export obligation. Competitive conditions in business with names, percentage and volume of market shares of major competitors: In Power industry, the Company generates and supplies electricity to the offtaker (BPDB) at the predetermined tariff as contracted. In this connection, BPPL has signed Power Purchase Agreement with BPDB for a period of 15 years from the date of commercial operation. After signing a PPA, there is no competition to sell the Company s generated electricity. So currently, the Company has no competitors in the industry. In Bangladesh a number of listed companies are engaged in Power Sector. Major competitors are: 1. Summit Power Limited 2. Shahjibazar Power Co. Ltd. 3. GBB Power Ltd. 4. Khulna Power Company Limited 5. Baraka Power Limited 6. United Power Generation & Distribution Company Ltd. 7. Doreen Power Generations & Systems Limited Apart from this, as per annual report of the listed companies and audited financial statements of Baraka Patenga Power Limited, the sales amounts are presented below: Name of the Company Sales Amount during (BDT) Year End Baraka Patenga Power Limited 2,648,485, th June Baraka Power Limited 3,485,450, th June Shahjibazar Power Co. Ltd. 8,642,556, th June GBB Power Ltd. 526,879, th June Khulna Power Company Limited 10,034,160, th June Summit Power Limited 16,213,948, th June United Power Generation & Distribution Company Ltd. 5,759,239, th June Doreen Power Generations & Systems Limited 5,150,750, th June ** The revenue of Baraka Patenga Power Limited for the period ended 31st December 2017 (Half Yearly) is Tk. 1,144,108,972/ There is no data available regarding market shares of the respective listed companies in their annual report. 43

46 Sources and availability of raw materials, names and addresses of the principal suppliers and contingency plan in case of any disruption: HFO Items of Raw Materials Spare parts Lubricant oil Name of Suppliers Address Terms of procurement Foreign Supplier: SHELL International Eastern Trading Company The Metropolis Tower 1, 9 North Buona Vista Drive, # 0701, Singapore Vitol Asia Pte Ltd. 260 Orchard Road, The Heeren #15 02, Singapore Local Supplier: Standard Asiatic Oil Company Limited Rolls Royce India Private Ltd. Greens Power Equipment Pte Ltd. MJL Bangladesh Ltd. Guptakhal, Airport Road North Patenga, Chittagong4205 2nd Floor, 52B, Okhla Industrial Estate Phase III, New Delhi , India #0409, 7 International Business Park, TechQuest, Singapore Mobil House CWS (C) 9, Gulshan1, Dhaka1212 The main raw material for generating electricity is HFO which has been procured by BPPL from local/foreign suppliers through local/foreign letter of credit Spare parts will be purchased from Rolls Royce India Private Ltd. and Greens Power Equipment Pte Ltd. at agreed rates year to year and others. Lubricant oil is purchased from MJL Bangladesh Ltd. as and when required. Contingency plan for any disruption of sourcing raw material Heavy Furnace Oil (HFO), the major raw material of the power plant which is presently imported from Singapore on monthly basis to feed the power plant and this HFO can also be purchased from Bangladesh Petroliam Corporation (BPC). The Company has a longterm supply contract with Original Engine Manufacturer (OEM) i.e. RollsRoyce for supply of scheduled and unscheduled spare parts supply covering the entire period of the project life. Similarly we have Lube Oil supply contract with MJL Bangladesh Limited for uninterrupted supply of Lube Oil. However, in case of any disruption in sourcing raw materials there are available suppliers to procure the raw materials at a competitive price. Sources of and requirement for, power, gas and water; or any other utilities and contingency plan in case of any disruption: Particulars Power Gas Water Other utilities Sources & Requirement The operational power requirement of the power plant is met from its own generation and BPDB. BPPL s plant requires HFO for generation and distribution of electricity. So there is no gas connection available in the power plant. BPPL meet up its water requirement of 210,495 MT (appx.) per year from internal source. The Company has availed 2 land phone connection from BTCL and also has internet facility to run the day to day business of the organization and for smooth correspondence purpose Contingency plan for any disruption of sourcing utilities In case of disruption, a stand by diesel generator is available to meet the power requirement of the plant and water can be arranged from water delivery van from private supplier. 44 REDHERRING PROSPECTUS

47 REDHERRING PROSPECTUS Names, address(s), telephone number, web address, and fax number of the customers who account for 10% or more of the company s products /services with amount and percentage thereof: As per Audited Accounts Sl. Name & Address of the customer Telephone and Fax no. 1 Bangladesh Power Development Board Bidyut Bhavan 1, Abdul Gani Road Dhaka , & Web address Customer s contribution JulyDec 2017 (Tk.) JulyJun 2017 (Tk.) 1,144,108,972 2,648,485,011 Names, address(s), telephone number, web address, and fax number of the suppliers from whom the issuer purchases 10% or more of its raw material/ finished goods with amount and percentage thereof: Sl. Name & Address of the supplier Telephone and Fax no. 1 Vitol Asia Pte Ltd. 260, Orchard Road HEX 1301 The Heeren, Singapore & Web address Suppliers contribution Amount Percentage (%) in Taka Tel: (65) Fax (65) pcg@vitol.com 672,266, % Description of any contract which the issuer has with its principal suppliers or customers showing the total amount and quantity of transaction for which the contract is made and the duration of the contract. If there is not any of such contract, a declaration is to be disclosed duly signed by CEO/MD, CFO and Chairman on behalf of Board of Directors: Sl. Name of the party with whom contract is made Relationship with the issuer Transaction amount Transaction quantity Duration of the contract 1 Bangladesh Power Development Board (BPDB) Customer Contract Price US Cent /kwh (Levelized tariff) Contractual Guaranteed Capacity 50,000KW/hr. (To be served as per BPDB demand) 15 years 2 Bergen Engines India Private Limited (Former: RollsRoyce India Private Limited Supplier USD 2,341, and CHF 1,131, Schedule Parts 15 Years 45

48 Description of licenses, registrations, NOC and permissions obtained by the issuer with issue, renewal and expiry dates: Particulars License Issuer/ Issuing Authority Registration/Certificate/ License No. Issue Date Renewal Date Certificate of Incorporation Registrar of Joint Stock Companies and Firms (RJSC) C93385/ N/A N/A ETIN Certificate National Board of Revenue (NBR) N/A N/A VAT Registration Certificate Custom,Excise & VAT Agrabad Division, Chittagong N/A N/A BERC License (IPP) Bangladesh Energy Regulatory Commission BERC/POWER/IPP021/ L/025(Part1)/ BERC License (Fuel) Bangladesh Energy Regulatory Commission BERC/LPP(P)/FO/Baraka/215/ N/A Trade License Chittagong City Corporation Trade License Dhaka City Corporation Import Registration Certificate Office of the Chief Controller of Export & Import (IRC) Environmental Clearance Certificate Department of Environment 17611/2011/ Fire Licence Fire Service & Civil Defence ADChatta Membership Certificate of DCCI Dhaka Chamber of Commerce & Industry Factory Licence Department of factories Inspection 4491/Chattagram Explosive Licence Department of Explosive 1403(L) Registration from Board of Investment Board of Investment L H N/A N/A Expiry Date Description of any material patents, trademarks, licenses or royalty agreements: There is no material patents, trademarks, licenses or royalty agreements. However, the Company has entered into an Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited on 18 January 2016 for providing technical and operational support as per the following conditions: Features of the Agreement: Type of contract Operational, Maintenance, Administrative and Financial Management Agreement with Baraka Power Limited Description of contract Effective Date: 1 January 2016 Scope of According to Article2, 1 st party i.e. Baraka Power Limited shall provide the following supports Services: 1. Operations management 2. Maintenance management 3. Commercial and logistics management 4. Finance and accounting management 5. Administration and human resource management 6. Environment and safety management 7. Any other support as per BPPL s requirement Terms of payment: Tenure: Termination: 2 nd party i.e. BPPL will have to pay Tk. 2,000,000 per month for the rendered support with an increment of 5% on the total amount per annum. Valid for 3 years and the duration can be extended through mutual consent of both parties. The agreement can be terminated by either party giving three months written notice. 46 REDHERRING PROSPECTUS

49 REDHERRING PROSPECTUS Number of total employees and number of fulltime employees: All the personnel of the Issuer is under Operational, Maintenance, Administrative and Financial Management Service Agreement. Therefore, the above information is not applicable for Baraka Patenga Power Limited. A brief description of business strategy Our strategic objective is to improve and consolidate our position as a reliable power generation company in the country with a continuous growth philosophy to ensure uninterrupted supply of electricity to the Nation through effective utilization of capital, machinery, human resources, continuous improvement of services, customer satisfaction and efficient resource management to be implemented on a daytoday basis. Our continuous growth philosophy is being driven with the strategic levers of capitalizing on the growth of the Bangladesh power generation sector, optimizing operational efficiency, following unique pricing model and adoptting best corporate practices. Strategy for capitalizing on the growth of the Bangladesh Power Generation Sector The power sector in Bangladesh has historically been characterized by power shortages that have consistently increased over time. Therefore, this sector has got the attention from all the potential investors both at home and abroad. This sector is also considered as the thrust sector of Bangladesh by the GoB. According to BPDB, at present (as on March 05, 2018) the total electricity generation capacity of Bangladesh is 13,846 MW. The Government of Bangladesh has a target to enhance the capacity to 24,000 MW by 2021 as mentioned in the PSMP Focusing the vision 2021, GoB is already encouraging private sectors to setup power plants. We believe that our power projects will play a significant role in the growth of the Bangladesh power sector and help achieve the Government GOB s vision 2021 Operational strategy Achieving optimal project operating efficiency is the key to maximizing profitability in our business. As part this plan, we installed brand new set of engines in the plant and a cogeneration secondary STG plant with a capacity of 3.20 MW which will reduce the maintenance hour as well as fuel cost. We expect our relationship with the machine supplier i.e. Rolls Royce will permit us to operate efficiently. We intend to adopt the procedures and practices currently specified at the machineries purchase agreement. Our parent company Baraka Power Limited has long experience in power general sector and we have already signed an Operational, Maintenance, Administrative and Financial Management Service Agreement with the BPL for technical support service. By virtue of this agreement, BPPL got operational efficiency for smooth operation of its business. Product pricing strategy The pricing strategy of Company is to supply electricity at an affordable price to the people. The price of the Company s product is determined at the tendering phase and GoB shall buy electricity over the project life at that price. Therefore, the Company got competitive advantage in its price due to fixed nature of product price. Fosusing on best practices We plan to incorporate the best practices available with respect to performance, corporate governance, management and employee training, quality control, environmental excellence and safety. 47

50 A table containing the existing installed capacities for each product or service, capacity utilization for these products or services in the previous years, projected capacities for existing as well as proposed products or services and the assumptions for future capacity utilization for the next three years in respect of existing as well as proposed products or services. If the projected capacity utilization is higher than the actual average capacity utilization, rationale to achieve the projected levels: Particulars Existing Installed production Capacity (MW) Capacity utilization (%) Projected capacity (MW) (JulDec) Electricity REDHERRING PROSPECTUS

51 REDHERRING PROSPECTUS Description of Property Location and area of the land, building, principal plants and other property of the company and the condition thereof: Name of the Assets (As per Audited Accounts) As on December 31, 2017 Amount in Tk. Land and Land Development 128,726,380 Furniture & fixture 1,317,834 Office equipment & Electric installation 1,847,231 Office decoration 697,087 Motor vehicle 441,336 Building & Civil Construction 347,326,321 Maintanance Equipment 2,553,598 Plant & Machineries 3,294,538,668 Motor vehicle (Leasehold Asset) 224,424 Total 3,777,672,879 Location of Plant/ factory with details The plant of Baraka Patenga Power Limited is located at South Patenga, Chittagong near the Chittagong airport. The HFO fired power plant has been established on Decimals land which covers 1 engine hall, three storied administrative building, warehouse, electrical substation, HFO storage tank etc. BPPL has been generating electricity and supplying to the national grid through brand new 8 nos. Rolls Royce gensets imported from Norway. Location of Land with details The Company has registered decimals of land located at South Patenga, Chittagong as on 31 December Out of which decimals of lands have been mutated in favor of the Company based on the records with the land authority and rent has been paid on 03 August 2017 upto Bengali year The Company is utilizing all of its registered lands for the generation of electricity. It is mentionable here that BPPL has not acquired any of its lands from any persons related with Issuer or any of its sponsors or directors. Whether the property is owned by the company or taken on lease: The Company itself owns the entire property except 2 (Two) nos. of motor vehicles leased from Prime Finance and Investment Limited (PFIL) which is as follows: (As on 31 st December 2017) Name of Lessor Prime Finance & Investment Limited Lease Amount (Taka) 10,000,000 Principal terms & conditions Rate of Interest (%) 15.00% p.a. Sanction Date Monthly Installment (Taka) Lease Period (monthly basis) Date of Expiry Details of lease payment Aggregate no. of installment paid Outstanding Balance (Taka) , ,568 Note: The repayment of aforesaid finance has been fully settled on February

52 Dates of purchase, last payment date of current rent (LvRbv) and mutation date of lands, deed value and other costs including details of land development cost, if any and current use thereof: Details of lands Date of purchase Date of mutation Last payment date of current rent (Bangla Year) Plot No. Deed value Land development cost Total Cost Area of Land (Decimal) 29/11/ /09/12 55,00,000 3,627,758 9,127, /12/ /09/12 37,18,000 2,452,364 6,170, /12/ /09/12 95,73,000 6,314,112 15,887, /12/ /09/12 27,50,000 1,813,879 4,563, /12/ /09/12 11,00, ,552 1,825, /12/ /09/12 11,86, ,782 1,967, /12/ /09/12 2,77,97,000 18,334,686 46,131, /12/ /09/12 Please 76,53,500 5,048,025 12,701, Up to 1424 Refer to 22/12/ /09/12 20,18,500 1,331,387 3,349, Bangla year below 07/06/ /09/12 table 25,19,000 1,661,513 4,180, /06/ /09/12 22,00,000 1,451,103 3,651, /06/ /09/12 55,00,000 4,605,258 10,105, /03/ /09/12 16,50,000 1,088,327 2,738, /09/ /09/12 13,75, ,939 2,281, /10/ /09/12 3,96, , , /08/ /09/12 4,85, , , /08/ /09/12 20,00, ,550 2,725, Total 77,421,000 51,305, ,726,380 Current Use Factory & Related Facilities Deed No. Date of Purchase RS /11/ ,9554, /12/ /12/ ,9659, 9659/9794, ,9659, 9659/9794, /12/ /12/ ,9659, 9659/ , /12/ /12/ /12/ ,9659, 9659/ ,9659, 9659/ ,9659, 9659/9794, /12/ /06/ ,9659, 9659/9794, /06/ ,9659, 9659/9794 Plot No. BS 10758,10750,10751,10744,10745,10754,10755,10756,10752,10753,10757,10759,10773,10774,10758, 10751,10750, ,10750,10751,10744,10745,10754,10755,10756,10752,10753,10757,10759,10773,10774, 10758,10751,10750,10773, , 10750, 10751, 10744, 10745, 10754, 10755, 10756, 10752, 10753, 10757, 10759, 10773, 10750, 10751, 10758, ,10750,10751,10744,10745,10754,10755,10752,10753,10757,10759,10772, 10773,10774,10754, 10752, ,10750,10751,10745,10754,10755,10756,10752,10753,10772,10773,10774,10751,1075 0, ,10750,10751,10444,10745,10754,10755,10756,10752,10753,10757,10759,10772,10774,10773, /06/ /03/ /9794, /09/ ,9554, ,10756,10757,10759,10771,10772,10773,10774,10776,10777, /10/ ,9659/ ,10750,10751,10745,10754,10755,10756,10752,10753, /08/ /08/ ,9659, 9659/ ,9659, 9659/ ,10759,10750,10751,10745,10754,10755,10756,10752,10753,10757,10771, 10772,10773,10774, 10776,10777, REDHERRING PROSPECTUS

53 REDHERRING PROSPECTUS The names of the persons from whom the land has been acquired/ proposed to be acquired along with the cost of acquisition and relation, if any, of such persons to the issuer or any sponsor or director thereof: Deed No. Name of the Seller Area of land in Decimal Cost of acquisition (Taka) Saber Ahammed ,00, Hajera Begum and Gong ,18, Raimona Khatun and Gong ,73, Mohammed Hossain ,50, Mohammed Fazlul Karim ,00, Rahima Begum ,86, Farsa Khatun ,77,97, Saleh Ahmed and Gong ,53, Saber Ahmed and Gong ,18, Mohammad Alomgir ,19, Mohammad Shahjahan Chowdhury ,00, Kulsuma Khatun and Gong ,00, Mohammed Sharif and Gong ,50, Mohammad Solaiman ,75, Mohammad Anwer Hassain Azom ,96, Layla Begum ,85, Mohammed Ismail ,00,000 Total ,421,000 Relationship with issuer/ directors/ sponsors No relationship between sellers of land and issuer/ directors/ sponsors Approval pertaining to use of lands As the Company owns its lands, no approval is required in terms of the use of the lands. Details of whether the issuer has received all the approvals pertaining to use of the land, if required: The Company does not require any approvals pertaining to use of the land. There is no restriction/limition/ time bar attached to the land relating to its usability and transferability. If the property is owned by the issuer, whether there is a mortgage or other type of charge on the property, with name of the mortgagee: Name of the Properties which is under mortgage All assets both fixed and floating, presents and future, machineries & equipments, furniture and fixtures, office equipments, book debts, receivables, stocks, accounts, raw materials etc. as per Schedule of the Letter of Hypothecation. Name of the mortgagee United Commerial Bank Limited & Trust Bank Limited If the property is taken on lease, the expiration dates of the lease with name of the lessor, principal terms and conditions of the lease agreements and details of payment: The Company itself owns the entire property except 2 (Two) nos. of motor vehicles leased from Prime Finance and Investment Limited (PFIL) which is as follows: 51

54 Name of Lessor Prime Finance & Investment Limited Lease Amount (Taka) 10,000,000 Rate of Interest (%) 15.00% p.a. Principal terms & conditions Sanction Date Monthly Installment (Taka) Lease Period (monthly basis) Date of Expiry (As on 31 st December 2017) Details of lease payment Aggregate no. of installment paid Outstanding Balance (Taka) , ,568 Note: The repayment of aforesaid finance has been fully settled on February Principal terms and conditions of the lease agreements: Interest Rate Tenor Repayment Amount Purpose 15 % p.a., 13% p.a. 04 years, Maturity on: 23/Jan/2018 Tk. 282,347 only per month; To purchase two units of Motor Vehicle; Corporate Guarantee of Baraka Power Limited. Personal Guarantee of Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury. 52 REDHERRING PROSPECTUS

55 REDHERRING PROSPECTUS Dates of purchase of plant and machineries along with sellers name, address, years of sale, condition when purchased, country of origin, useful economic life at purchase and remaining economic life, purchase price and written down value: Name of the machinery Date of purchase Seller name & address Year of sale Condition at the time of purchase Country of origin Useful economic life at purchase Remaining economic life (As on ) Invoice Value Purchase price Installation & Erection Cost Total WDV as on 31 December 2017 Gen set & BERGEN ENGINES AS, P.O. Box 329 Sentrum,5804 Bergen, Norway and Tide Power System Co., Limited 2012 Brand New Norway & China USD 16,603, ,888,107 1,816,163,627 1,628368,361 Auxiliaries & BERGEN ENGINES AS, P.O. Box 329 Sentrum,5804 Bergen, Norway, Spirax Marshall Pvt. Ltd &Goltes Singapore Pte Ltd 2013 Brand New Norway India & Singapore USD 5,696, ,391, ,115, ,684,296 Air Compressure SK Industrial Technologies Pte Ltd, 10Anson Road,1011 International Plaza, Singapore 2013 Brand New China USD 75, ,203,857 8,203,857 7,355,560 Ventilation System & Soon Nigai Engineering SdnBhd, DarulEhsan, West Malaysia & Ningbo Demy Bearings Co. Ltd, B , No. 39, Lane 158, Ningbo, China 2013 Brand New Malaysia, China USD 147,106 4,322,662 16,091,110 14,427,254 Cable Ningbo Demy Bearings Co. Ltd, B , No. 39, Lane 158, Ningbo, China Gaon Cable Co. Ltd, 24F ASEM Tower World trade Center, SamseongDong, Gangnamgu, Seoul135798, Raychem RPG Pvt. Ltd, RPG house 463, Dr. Annies Besant Road Worli, Mumbai400030, India 2014 Brand New China Korea India USD 894,127 26,273,707 97,803,883 87,690,749 Panels Federal ElektrikYatrim VeTicaret A.S, Sakarya 1 Organize SanayiBolgesi 1.Yol No Hanli, Turkey, Megabarre Asia Pacific (I) PTE, 83, 3 rd Flr, Jayam Villa, 11 East Circular Rd. Mandavelipakkan, Chennai, India, Ningbo Demy Bearings Co. Ltd, B , No. 39, Lane 158, Ningbo, China 2013 Brand New Turkey Italy China USD 87,517 2,571,664 9,573,020 8,583,149 53

56 Name of the machinery Date of purchase Seller name & address Year of sale Condition at the time of purchase Country of origin Useful economic life at purchase Remaining economic life (As on ) Invoice Value Purchase price Installation & Erection Cost Total WDV as on 31 December 2017 Substation, Transformers Outdoor Switchgear & Accessories Ningbo Demy Bearings Co. Ltd, B , No. 39, Lane 158, Ningbo, China, Siemens BD Ltd, Plot 2 Road 8, Gulshan Brand New China India Bangladesh USD 1,250,807 36,754, ,819, ,671,811 Transmission Line LilingYangdong Porcelain, Insulators Industry Co. Ltd., Yangdong Economic Technology Area, Lining City, Hunan Province, China Shanghai Metal Corporation, 1701 Yuan Mansion 738 Dongfang Rd. Shanghai, AGS Refrigeration Co. Ltd, Aiyimei Building, Yinzhou District, , Ningbo, China 2013 Brand New China USD 90,799 2,668,102 9,932,010 8,905,018 Mechanical Accessories (Valbe, Gasket & Fittings) Aybaz Sinai UrunlerTic.Ve San A.S, NecatibeyCaddesiAyvaz Han No. 77, Karakoy, Istanbul YongjiaNanguang Valve Co. Ltd, Zhangbao Industry Park, Queei Town, Wenzhou City, Zhejiang Province, China, M/S Kadakia Enterprise, 68/70, Nagdevi Street, Mumbai, India Spirax Marshall Pvt. Ltd, Post Box29, Kasawardi, Pune, India Ningbo Demy Bearings Co. Ltd, B , No. 39, Lane 158, Ningbo, China 2013 Brand New Turkey Germany China India USD 113,920 3,347,501 12,461,073 11,172,571 Workshop Machinery Unicarriers Corporation, Bellport E, 6227, Minami0I, ShinagawaKu Tokyo, Japan 2013 Brand New Japan JPY 2,098, ,214 2,260,353 2,026,629 Flue Gas Desulferization BMT (HK) Industrial Co. Ltd, Unit A5, 9/F Silver Corp Int. Tower Nathan Rd. Mongkok, Kowloong, Hongkong 2013 Brand New China USD 2,000,000 88,375, ,375, ,692,665 Steam Turbine Generator (STG) Greens Power Equipment Pte Ltd No. 0409, 7 International Business park, Techquest, Singapore 2013 Brand New China USD 3,985, ,369, ,169, ,381,605 Balance of BDT Brand New Plant (BOP) 202,520, ,520, ,579,000 Total 3,674,488,795 3,294,538, REDHERRING PROSPECTUS

57 REDHERRING PROSPECTUS Details of the machineries required to be bought by the issuer, cost of the machineries, name of the suppliers, date of placement of order and the date or expected date of supply, etc: The Company has no plan to procure capital machineries. In case the machineries are yet to be delivered, the date of quotations relied upon for the cost estimates given shall also be mentioned: There is no such machineries which are yet to be delivered. If plant is purchased in brand new condition then it should be mentioned: All the equipment of the Company was purchased in brand new condition. There is no reconditioned or second hand equipment installed in the Company. Details of the second hand or reconditioned machineries bought or proposed to be bought, if any, including the age of the machineries, balance estimated useful life, etc. as per PSI certificates of the said machineries as submitted to the Commission: The Company did not purchase or neither has any intention to purchase any second hand or reconditioned machineries. If the issuer is entitled to any intellectual property right or intangible asset, full description of the property, whether the same are legally held by the issuer and whether all formalities in this regard have been complied with: The issuer is not entitled to any intellectual property right or intangible asset. Full description of other properties of the issuer: The Company has no other properties except the followings: (As per Audited Accounts) Name of the Assets As on December 31, 2017 Amount in Tk. Land and Land Development 128,726,380 Furniture & fixture 1,317,834 Office equipment & Electric installation 1,847,231 Office decoration 697,087 Motor vehicle 441,336 Building & Civil Construction 347,326,321 Maintanance Equipment 2,553,598 Plant & Machineries 3,294,538,668 Motor vehicle (Leasehold Asset) 224,424 Total 3,777,672,879 55

58 Plan of Operation and Discussion of Financial Condition As per Audited Accounts Particulars RESULTS FROM OPERATION 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) Net Revenue 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 Cost of Sales (839,552,234) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) Gross Profit 304,556, ,619, ,677, ,803, ,884,031 Administrative Expenses (27,936,290) (59,946,268) (69,554,248) (82,620,420) (22,154,616) (9,534,761) Operating Profit 276,620, ,673, ,123, ,182,957 88,729,415 (9,534,761) Other income (5,479,317) (9,681,257) 4,596,307 5,731, ,804 7,617,870 Financial Expense (114,501,675) (257,996,023) (278,136,946) (218,898,508) (27,466,968) (1,857,789) Profit before income tax 156,639, ,996, ,583, ,015,736 61,960,251 (3,774,680) Over Provision in prior years income tax 484,997 Income Tax Expenses (3,730,368) (9,121) (2,093,704) (2,005,949) (244,230) (2,856,701) Profit after income tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) CHANGES IN FINANCIAL POSITION NonCurrent Assets 3,971,354,635 3,852,561,087 3,988,660,019 4,112,671,414 3,787,313,389 2,574,485,618 Current Assets 1,651,523,875 1,476,977,927 1,233,741,488 1,433,178,094 1,311,361,335 31,335,642 Total Assets 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 Shareholders Equity 1,752,155,095 1,698,639,533 1,481,618,278 1,289,628, ,619, ,305,517 NonCurrent Liabilities 2,395,939,086 2,565,875,317 2,897,367,473 2,931,859,367 2,716,599,103 Current Liabilities 1,474,784,329 1,065,024, ,415,756 1,324,361,241 1,386,456,508 1,824,515,743 Total Equity & Liabilities 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 CHANGES IN CASH FLOW Net Cash Flows from Operating Activities 323,999, ,989, ,199, ,773,620 (875,241,728) (4,472,287) Net cash used in investing activities (344,263,459) (35,308,302) 5,754,402 (448,335,269) (3,018,688,307) (387,097,003) Net cash used/provided in/ by financing activities 4,886,013 (537,566,170) (664,868,786) 156,006,176 3,904,740, ,479,910 Internal and external sources of cash: The internal sources of cash are the share capital and retained earnings. The external sources of cash are shortterm & longterm borrowings. As per Audited Accounts Particulars Internal Sources of Cash: 31Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) Share Capital 992,250, ,250, ,000, ,000, ,000,000 1,000,000 Retained Earnings 762,162, ,097, ,618, ,628,900 50,619,113 (11,096,908) SubTotal 1,754,412,143 1,700,347,816 1,481,618,278 1,289,628, ,619,113 (10,096,908) External Sources of Cash: Term Loan 2,766,874,768 2,937,375,021 3,241,500,013 3,209,186,653 2,793,382,328 Lease Liability 305,568 1,918,096 4,846,616 7,402,561 9,405,914 Short Term Borrowings 650,108, ,324, ,716, ,876,498 1,170,504,778 1,776,983,238 SubTotal 3,417,288,979 3,296,617,917 3,731,063,545 4,144,465,712 3,973,293,020 1,776,983,238 GRAND TOTAL 5,171,701,122 4,996,965,733 5,212,681,823 5,434,094,612 4,968,912,133 1,766,886, REDHERRING PROSPECTUS

59 REDHERRING PROSPECTUS Any material commitments for capital expenditure and expected sources of funds for such expenditure: The company has no material commitment of capital expenditure other than as specified in Section XXII, Utilization of IPO Proceeds under the head of Use of Proceeds of this Prospectus. Causes for any material changes from period to period in revenues, cost of goods sold, other operating expenses and net income: The company s revenues and cost of goods sold, other operating expenses and net income have continued to change due to increase in sales volume and assets. Particulars 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) Net Revenue 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 Cost of Sales (839,552,234) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) Operating Expenses (27,936,290) (59,946,268) (69,554,248) (82,620,420) (22,154,616) (9,534,761) Net Profit after Tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) Causes for Changes in revenues: As it can be observed from the above table, the overall sales changed over the years as the Company s capacity and price of raw material changed. It is to be noted that the Company started its commercial operation on 4 May Causes for Changes in cost of goods sold/ Cost of Service: Costs of sales are primarily in relation to purchase of fuel (HFO) & lubricant, fuel tank rent, oil carrying expenses and repair & maintenance of plant and machinery. Causes for Changes in other operating expenses: The operating expense of the company changes over the years due to the effect of Operational, Maintenance, Administrative and Financial Management Service Agreement and necessary rearrangement. Causes for Changes in net income: Net Income has changed over the years in agreement with the sales. Any seasonal aspects of the issuer s business: There is no such seasonal aspect of the company s business as it supplies electricity as per the order of BPDB throughout the year. However, electricity generation remains at peak except during winter. Apart from this, there is no significant seasonal impact on the products of the Company. Any known trends, events or uncertainties that may have material effect on the issuer s future business: The business operation of the Company may be affected by some known events as follows: 1. Entrance of new technology 2. Increased competition 3. Political unrest 4. Natural Disaster 5. National level Power disaster for long time Any assets of the company used to pay off any liabilities: The Company has not used any of its assets to pay off any liabilities. 57

60 Any loan taken from or given to any related party or connected person of the issuer with details of the same: Name of the Related Party Nature of Relationship Nature of Transaction Transactions during the year Outstanding Amount Receivables/(Payables) Taka Taka Taka Remark Short term loan 259,138, ,392,319 Baraka Power Limited Holding Company O & M Service 12,600,000 24,600,000 (67,279,614) Payable Interest Charged 1,942,799 4,363,745 Karnaphuli Power Limited Subsidiary Company Short term loan 589,165,030 Interest Earned 16,295, ,450,630 Receivable Baraka Shikalbaha Power Limited Subsidiary Company Share Capital 510,000 Note: BPPL did not take loans from any related party or connected persons. 58 REDHERRING PROSPECTUS

61 REDHERRING PROSPECTUS Any future contractual liabilities the issuer may enter into within next one year, and the impact, if any, on the financial fundamentals of the issuer: The company has not entered into any future contractual liability and has no plan to enter into any contractual obligation within next one year other than normal course of business. The estimated amount, where applicable, of future capital expenditure: The company has no plan for future capital expenditure other than as specified in Utilization of IPO Proceeds in Section XXII, under the head of Use of Proceeds of this Prospectus. Any VAT, income tax, customs duty or other tax liability which is yet to be paid, including any contingent liabilities stating why the same was not paid prior to the issuance of the prospectus. Updated income tax status for the last 5 years or from commercial operation, which is shorter: Status of unpaid VAT, income tax, customs duty or other tax liability: The Company has no such unpaid VAT, income tax, customs duty or other tax liability. Value Added Tax (VAT) The Company has VAT registration number: , area code: and as per Government rule this sector is fully VAT exempted from the date of 11 June Income Tax No provision for Income Tax on revenue is required to be recognized as the Company has received exemption from all of its taxes from Government of Bangladesh under Private Sector Power Generation Policy & SRO # 211 dated 1 July 2013 for a period of 15 years from starts of its commercial operation date. However, Income tax on the other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting period are Income Year Tax rate on other income % JulyDec, % Year wise income tax status of the company is mentioned below: Income Year Assessment Year Status Return submitted, assessment completed, no tax due to NBR Return submitted, assessment completed, no tax due to NBR Return submitted, assessment completed, no tax due to NBR Return submitted, assessment completed, no tax due to NBR Return submitted, assessment completed, no tax due to NBR Return submitted, assessment completed, no tax due to NBR Return submitted, assessment under process Custom duty or other liabilities The Company is exempted from customs duties while importing plant and machinery during construction and all other spare parts as per SRO # 211 dated 1 July However, duties and taxes are payable to other suppliers as per provision of the Private Sector Power Generation Policy of Bangladesh. The Company enjoys duty free status in case of importing parts for the entire project life as Power Purchase Agreement (PPA). 59

62 Other contingent liabilities Particulars BG No. BDT Expiry Date BDT Bank Guarantee as Operational Security, BPDB* 80/2014, UCBL ,000,000 70,000,000 Bank Guarantee, BPDB 21/2017, UCBL ,144,000 Bank Guarantee, BPDB 75/2017, UCBL ,144,000 Bank Guarantee as Bid Security, BPDB** 64/2016, UCBL ,639,900 45,639,900 Bank Guarantee as Bid Security, BPDB** 63/2016, UCBL ,839,200 44,839,200 Corporate Guarantee to IPDC Finance Ltd. as Lease Security ,000,000 10,000,000 Total 173,623, ,623,100 *Bank Guarantee # 80/2014 issued by United Commercial Bank Limited in favor of Bangladesh Power Development Board (BPDB) as operational security has been renewed for further one year upto ** Bank Guarantee # 63 & 64/2016 have been issued in favor of Bangladesh Power Development Limited (BPDB) as Bid Security in comply with Bid requirement for the project at Shantahar and Bagerhat where BPDB has yet not been released the original copy of aforesaid Bank Guarantee. Any financial commitment, including lease commitment, the company had entered into during the past five years or from commercial operation, which is shorter, giving details as to how the liquidation was or is to be effected: Operating Lease Agreement during Last Five Years BPPL has established its head office and other offices on leased accommodation as under: Sl No. Lessor Effective Date of Lease Expiration Date of Lease Description of Leased Asset Lease Rent/Per month (BDT) Liquidation 1. Mrs. Momtaz Begum October 01, 2012 September 30, ,585 square feet of floor space situated at 6/A/1 (2nd Floor), Segunbagicha, Dhaka1000 Tk. 62,700 per month In case of termination of the agreement the LESSEE will hand over the possession of the Demised Premises to the LESSOR 2. Md. Faizul Haque March 01, 2018 February 28, square feet of floor space situated at Khairun Bhaban (6th Floor), Mirboxtola, Sylhet Tk. 13,619 per month In case of termination of the agreement the LESSEE will hand over the possession of the Demised Premises to the LESSOR 3. Mr. Jasim Uddin April 01, 2017 March 31, square feet of floor space situated at Ghat no 14, Chorbosti, South Patenga, Chittagong Tk. 87,525 per month In case of termination of the agreement the LESSEE will hand over the possession of the Demised Premises to the LESSOR 60 REDHERRING PROSPECTUS

63 REDHERRING PROSPECTUS Financial Lease Commitment during Last Five Years Baraka Patenga Power limited has obtained following Lease obligations: Name of Lessor Prime Finance & Investment Limited Lease Amount (Taka) 10,000,000 Rate of Interest (%) 15.00% p.a. Principal terms & conditions Sanction Date Monthly Installment (Taka) Lease Period (monthly basis) Date of Expiry Details of lease payment Aggregate no. of installment paid Outstanding Balance (Taka) Liquidation , ,568 N/A Note: The repayment of aforesaid finance has been fully settled on February Details of all personnel related scheme: The above information not is applicable for BPPL as the Company rendered required services under service contract with Baraka Power Limited. Company has entered into an Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited on 18 January, 2016 for providing following supports: Operations management Maintenance management Commercial and logistics management Finance and accounting management Administration and human resource management Environment and safety management Any other support as per BPPL s requirement However, Baraka Power Limited is providing the following benefits and related scheme are applicable for company s permanent payroll employees: Yearly Increment Allowances Gratuity Leave Encashment Provident Fund Festival Bonus WPPF Group Insurance 61

64 Break down of all expenses related to the public issue: Estimated IPO expenses are as under. However, Estimated IPO expenses will be determined after the determination of cutoff price through bidding process and will be adjusted accordingly with the IPO Proceeds. Breakdown of Estimated Expenses for IPO (Under Bookbuilding Method) Sl. Particulars Nature of Expenditure Amount in Tk. (approx.) Issue Management Fees 1 Manager to the Issue Fee 1% of the public offering amount including premium 22,500,000 2 VAT against Issue Management 15% on Issue Management Fees 3,375,000 Listing Related Expenses 3 Application Fee for Stock Exchanges Tk. 50,000 for each exchanges 0.25% on Tk. 100 million of paidup capital and 0.15% on the rest 4 Listing Fee for Stock Exchanges amount of paidup capital; minimum Tk. 50,000 and Maximum Tk. 10 million for each exchanges [ 0.05% on Tk. 100 million of paidup capital and 0.02% on the rest 5 Annual Fee for Stock Exchanges amount of paidup capital; minimum Tk. 50,000 and Maximum Tk. 6 lacs for each exchanges [ ] BSEC Fees 6 Application Fee Tk. 50,000 (nonrefundable) 50,000 7 BSEC Consent Fee 0.40% on the public offering amount 9,000,000 IPO Commission 8 Underwriting Commission Estimated 3,937,500 VAT against Underwriting 15% on Underwriting Commission 590, Credit Rating Fees At Actual 100, Auditor Certification Fees At Actual 1,000,000 CDBL Fees and Expenses 12 Security Deposit At Actual 500, Documentation Fee At Actual 2, Annual Fee At Actual 100, Connection Fee At Actual 6, IPO of issue size % of Pre IPO paid up capital [ ] Printing and Post IPO Expenses 17 Registrar to the Issue Fees At Actual 500, VAT against Registrar to the Issue 15% on Registrar to the Issue Fees 75, Publication of Prospectus Estimated 1,200, Abridged version of Prospectus and Notice in 4 daily newspaper Estimated 1,000, Notice for Prospectus, Lottery, Refund etc. in 4 daily newspaper Estimated 500, Electronic Bidding Related Expenses Estimated 1,200, Lottery Conducting Expenses & BUET Fee Estimated 1,500, Collection of Forms, Data Processing and Share Software Charge Estimated 7,000, Allotment and Refund Estimated 600, Courier Expense Estimated 200, Stationeries and Other Expenses Estimated 2,938,375 Grand Total 57,975,000 N.B.: Actual costs will vary if above mentioned estimates differ and will be adjusted accordingly. 62 REDHERRING PROSPECTUS

65 REDHERRING PROSPECTUS If the issuer has revalued any of its assets, the name, qualification and experiences of the valuer and the reason for the revaluation, showing the value of the assets prior to the revaluation separately for each asset revalued in a manner which shall facilitate comparison between the historical value and the amount after revaluation and giving a summary of the valuation report along with basis of pricing and certificates required under the revaluation guideline of the Commission: The Company has not revalued any of its assets. Where the issuer is a banking company, insurance company, nonbanking financial institution or any other company which is regulated and licensed by another primary regulator, a declaration by the board of directors shall be included in the prospectus stating that all requirements of the relevant laws and regulatory requirements of its primary regulator have been adhered to by the issuer: DECLARATION BY THE BOARD OF DIRECTORS REGARDING ADHERENCE RELEVANT LAWS AND REGULATORY REQUIREMENTS OF ITS PRIMARY REGULATOR We hereby declare that all requirements of the relevant laws and regulatory requirements of our primary regulator (Bangladesh Energy Regulatory Commission) have been adhered to by us. Sd/ Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Sd/ Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Sd/ Monzur Kadir Shafi Nominated Director by Baraka Power Limited Sd/ Md. Shirajul Islam Nominated Director by Baraka Power Limited Sd/ Engr. Jalal Uddin Ahmed Chowdhury Independent Director Sd/ Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Limited 63

66 Any material information, which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public: To Whom It May Concern This is to declare that, to the best of our knowledge and belief, no material information has been suppressed which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public. For Baraka Patenga Power Limited, Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Business strategies and future plans. Projected financial statements should be required only for companies not started commercial operation yet and authenticated by two directors, Chairman, Managing Director, CFO, and Company Secretary. Key strategic objectives of BPPL: The business strategies of Baraka Patenga Power Limited have already been given in page #47 of this Prospectus Future Plan of BPPL: Introduce new and cuttingedge technology which contributes towards building longlasting and sustainable relationship with businesses and consumers. Increase organizational capacity and competence to enhance our already existing reputation. Explore the newest technologies and build one of the best tech R&D teams of Bangladesh. Ensure premium international standard of distribution, quality management and increase organizational capacity. Build sustainable, longlasting and fruitful business relationship with our investors. To setup a bonded warehouse oil tanker facility to sell HFO in the local market. Investment in infrastructure development for oil, chemicals & communication. 64 REDHERRING PROSPECTUS

67 REDHERRING PROSPECTUS Discussion on the results of operations: A summary of the past financial results after adjustments as given in the auditor s report containing significant items of income and expenditure: There was no adjustment given by the auditor s during the last financial year. Summary of the financial results and operations are presented below: Sl. Particulars 31 Dec17 (Half Yearly) 30June17 30June16 (Amount in BDT) 1 Turnover 1,144,108,972 2,648,485,011 2,119,185,034 2 Gross Profit 304,556, ,619, ,677,969 3 Net Profit Before Tax 156,639, ,996, ,583,082 4 Net Profit after Tax 152,909, ,471, ,489,378 5 Total Assets 5,622,878,510 5,329,539,014 5,222,401,507 6 Paidup Capital 992,250, ,250, ,000,000 7 Retained Earnings 762,162, ,097, ,618,278 8 No. of Shares 99,225,000 99,225,000 94,500,000 9 Face Value NAV per share Earnings per Share A summary of major items of income and expenditure: Particulars 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) RESULTS FROM OPERATION Net Revenue 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 Cost of Sales (839,552,234) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) Gross Profit 304,556, ,619, ,677, ,803, ,884,031 Administrative Expenses (27,936,290) (59,946,268) (69,554,248) (82,620,420) (22,154,616) (9,534,761) Operating Profit 276,620, ,673, ,123, ,182,957 88,729,415 (9,534,761) Other income (5,479,317) (9,681,257) 4,596,307 5,731, ,804 7,617,870 Financial Expense (114,501,675) (257,996,023) (278,136,946) (218,898,508) (27,466,968) (1,857,789) Profit before income tax 156,639, ,996, ,583, ,015,736 61,960,251 (3,774,680) Over Provision in prior years income tax 484,997 Income Tax Expenses (3,730,368) (9,121) (2,093,704) (2,005,949) (244,230) (2,856,701) Profit after income tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) CHANGES IN FINANCIAL POSITION NonCurrent Assets 3,971,354,635 3,852,561,087 3,988,660,019 4,112,671,414 3,787,313,389 2,574,485,618 Current Assets 1,651,523,875 1,476,977,927 1,233,741,488 1,433,178,094 1,311,361,335 31,335,642 Total Assets 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 Shareholders Equity 1,752,155,095 1,698,639,533 1,481,618,278 1,289,628, ,619, ,305,517 NonCurrent Liabilities 2,395,939,086 2,565,875,317 2,897,367,473 2,931,859,367 2,716,599,103 Current Liabilities 1,474,784,329 1,065,024, ,415,756 1,324,361,241 1,386,456,508 1,824,515,743 Total Equity & Liabilities 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 CHANGES IN CASH FLOW Net Cash Flows from Operating Activities 323,999, ,989, ,199, ,773,620 (875,241,728) (4,472,287) Net cash used in investing activities (344,263,459) (35,308,302) 5,754,402 (448,335,269) (3,018,688,307) (387,097,003) Net cash used/provided in/by financing activities 4,886,013 (537,566,170) (664,868,786) 156,006,176 3,904,740, ,479,910 65

68 The income and sales on account of major products or services: The revenue source of the company is solely based on electricity generation. The Income and Sales on account for said revenue sources is given below: Sales Income 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30 June13 31 Dec17 (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852, ,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) In case, other income constitutes more than 10% of the total income, the breakup of the same along with the nature of the income, i.e., recurring or nonrecurring: The Company has no other income constitutes more than 10% of the total income. If a material part of the income is dependent upon a single customer or a few major customers, disclosure of this fact along with relevant data. Similarly if any foreign customer constitutes a significant portion of the issuer s business disclosure of the fact along with its impact on the business considering exchange rate fluctuations: BPDB is the sole customer to whom the Company sells its total electricity. The company is entered into an agreement with BPDB for supplying of electricity for a term of 15 years. As per the agreement, BPDB is entitled to purchase its electricity generation. The Company has no foreign customer. But consumer price index has impact on foreign currency conversion during Nonescalable capacity proceeds and variable operational & maintenance proceeds and fuel proceeds are impacted due to fluctuation in foreign currency In case the issuer has followed any unorthodox procedure for recording sales and revenues, its impact shall be analyzed and disclosed: The Company has not followed any unorthodox procedure for recording sales and revenues. 66 REDHERRING PROSPECTUS

69 REDHERRING PROSPECTUS Comparison of recent financial year with the previous financial years on the major heads of the profit and loss statement, including an analysis of reasons for the changes in significant items of income and expenditure: As per Audited Accounts 31 Dec17 Particulars (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) RESULTS FROM OPERATION Net Revenue 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 Cost of Sales (839,552,234) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) Gross Profit 304,556, ,619, ,677, ,803, ,884,031 Administrative Expenses (27,936,290) (59,946,268) (69,554,248) (82,620,420) (22,154,616) (9,534,761) Operating Profit 276,620, ,673, ,123, ,182,957 88,729,415 (9,534,761) Other income (5,479,317) (9,681,257) 4,596,307 5,731, ,804 7,617,870 Financial Expense (114,501,675) (257,996,023) (278,136,946) (218,898,508) (27,466,968) (1,857,789) Profit before income tax 156,639, ,996, ,583, ,015,736 61,960,251 (3,774,680) Over Provision in prior years income tax 484,997 Income Tax Expenses (3,730,368) (9,121) (2,093,704) (2,005,949) (244,230) (2,856,701) Profit after income tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) CHANGES IN FINANCIAL POSITION NonCurrent Assets 3,971,354,635 3,852,561,087 3,988,660,019 4,112,671,414 3,787,313,389 2,574,485,618 Current Assets 1,651,523,875 1,476,977,927 1,233,741,488 1,433,178,094 1,311,361,335 31,335,642 Total Assets 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 Shareholders Equity 1,752,155,095 1,698,639,533 1,481,618,278 1,289,628, ,619, ,305,517 NonCurrent Liabilities 2,395,939,086 2,565,875,317 2,897,367,473 2,931,859,367 2,716,599,103 Current Liabilities 1,474,784,329 1,065,024, ,415,756 1,324,361,241 1,386,456,508 1,824,515,743 Total Equity & Liabilities 5,622,878,510 5,329,539,014 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 CHANGES IN CASH FLOW Net Cash Flows from Operating Activities 323,999, ,989, ,199, ,773,620 (875,241,728) (4,472,287) Net cash used in investing activities (344,263,459) (35,308,302) 5,754,402 (448,335,269) (3,018,688,307) (387,097,003) Net cash used/provided in/by financing activities 4,886,013 (537,566,170) (664,868,786) 156,006,176 3,904,740, ,479,910 Causes for Changes in revenues: : As it can be observed from the above table, the overall sales changed over the years as the Company s capacity utilization and price of raw material changed. It is to be noted that the Company started its commercial operation on 4 May Causes for Changes in cost of goods sold/ Cost of Service: Costs of sales are primarily in relation to purchase of fuel (HFO) & lubricant, fuel tank rent, oil carrying expenses and repair & maintenance of plant and machinery. Causes for Changes in other operating expenses: The operating expense of the company changes over the years due to the effect of Operational, Maintenance, Administrative and Financial Management Service Agreement and necessary rearrangement. 67

70 Causes for Changes in net income: Net Income has changed over the years in agreement with the sales. Unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc: There were no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses etc. Significant economic changes that materially affect or are likely to affect income from continuing operations: There were no significant economic changes that materially affect or are likely to affect income from continuing operations. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations: The business operation of the Company may be affected by some known events as follows: 1. Entrance of new technology 2. Increased competition 3. Political unrest 4. Natural Disaster 5. National level Power disaster for long time Future changes in relationship between costs and revenues, in case of events such as future increase in labor or material costs or prices that will cause a material change are known: Any event such as increase in labor or material costs or prices will not affect the operational result of the company, in case of future increase in fuel price BPPL will also have no significant changes in relationship between our costs and revenues as incremental fuel cost will be recovered from BPDB. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices: The company is expecting a positive growth in net sales or revenue are due to increased sales volume due to expansion of its existing operation as mentioned in the Section XXII under the head of Use of Proceeds. Total turnover of each major industry segment in which the issuer operated: Considering the business nature of BPPL the company is assumed to operate in Power sector. Year Industry Segment Power Sector ,461,468,615 Note: The turnover mentioned above are consist of the turnover of Baraka Patenga Power Limited, Baraka Power Limited, Shahjibazar Power Co. Ltd., GBB Power Ltd., Khulna Power Company Limited, Summit Power Limited, United Power Generation & Distribution Company Ltd.& Doreen Power Generations & Systems Limited. Source: Annual Report of Baraka Patenga Power Limited, Baraka Power Limited, Shahjibazar Power Co. Ltd., GBB Power Ltd., Khulna Power Company Limited, Summit Power Limited, United Power Generation & Distribution Company Ltd., & Doreen Power Generations & Systems Limited. Status of any publicly announced new products or business segment: There are no publicly announced new products or business segments of BPPL. The extent to which the business is seasonal: The business of the issuer is not seasonal in nature. 68 REDHERRING PROSPECTUS

71 REDHERRING PROSPECTUS Defaults or rescheduling of borrowings with financial institutions/ banks, conversion of loans into equity along with reasons thereof, lock out, strikes and reasons for the same etc: during the history of operationas of the company. The Company has neither rescheduled its borrowings with financial institutions/banks nor converted its loans into equity. There has been no lock out, strikes etc. Details regarding the changes in the activities of the issuer during the last five years which may had a material effect on the profits/loss, including discontinuance of lines of business, loss of agencies or markets and similar factors: There is no change in the activities of BPPL during the last five years which may had a material effect on the profits/loss, including discontinuance of lines of business, loss of agencies or markets and similar factors. Injunction or restraining order, if any, with possible implications: There were/are no injunction or restraining order upon the company during the entire life of its business. Technology, market, managerial competence and capacity builtup: We have been using reciprocative enginebased technology for generating electricity. BPPL s management has competencies to run a power plant smoothly as evidenced from the holding company of Baraka Power Limited. The management also appointed such personnel who are capable enough to operate the plant effectively and efficiently. Even though any experienced personnel leave the organization, others have adequate expertise and skills to run the operation. Changes in accounting policies in the last three years: There were no changes in accounting policies in the last three years. 69

72 Significant developments subsequent to the last financial year: A statement by the directors whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the redherring prospectus/prospectus/information memorandum and which materially and adversely affect or is likely to affect the trading or profitability of the issuer, or the value of its assets, or its ability to pay its liabilities within the next twelve months: DECLARATION REGARDING SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR (DECEMBER 31, 2017) This is to declare that, there have been no circumstances arisen since the date of the last financial statements (December 31, 2017) as disclosed in the redherring prospectus and which materially and adversely affect or is likely to affect the trading or profitability of the issuer, or the value of its assets, or its ability to pay its liabilities within the next twelve months. Sd/ Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Sd/ Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Sd/ Monzur Kadir Shafi Nominated Director by Baraka Power Limited Sd/ Md. Shirajul Islam Nominated Director by Baraka Power Limited Sd/ Engr. Jalal Uddin Ahmed Chowdhury Independent Director Sd/ Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Limited If any quarter of the financial year of the issuer ends after the period ended in the audited financial statements as disclosed in the prospectus, unaudited financial statements for each of the said quarters duly authenticated by the CEO and CFO of the issuer: Yearend duly authenticated audited financial statement have been incorporated in the prospectus. Factors that may affect the results of operations: There are no such factors that may affect the results of operations except the known trends and uncertainty which have been mentioned in page #68 of this prospectus. 70 REDHERRING PROSPECTUS

73 REDHERRING PROSPECTUS SECTION: VII MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 71

74 Overview of business and strategies: Our strategic objective is to improve and consolidate our position as a reliable power generation company in the country with a continuous growth philosophy to ensure uninterrupted supply of electricity to the Nation through effective utilization of capital, machinery, human resources, continuous improvement of services, customer satisfaction and efficient resource management to be implemented on a daytoday basis. Our continuous growth philosophy is being driven with the strategic levers of capitalizing on the growth of the Bangladesh power generation sector, optimizing operational efficiency, following unique pricing model and adoptting best corporate practices. Strategy for capitalizing on the growth of the Bangladesh Power Generation Sector The power sector in Bangladesh has historically been characterized by power shortages that have consistently increased over time. Therefore, this sector has got the attention from all the potential investors both at home and abroad. This sector is also considered as the thrust sector of Bangladesh by the GoB. According to BPDB, at present (as on March 5, 2018) the total electricity generation capacity of Bangladesh is 13,846MW. The Government of Bangladesh has a target to enhance the capacity to 24,000 MW by 2021 as mentioned in the PSMP Focusing the vision 2021, GoB is already encouraging private sectors to setup power plants. We believe that our power projects will play a significant role in the growth of the Bangladesh power sector and help achieve the Government GOB s vision Operational strategy Achieving optimal project operating efficiency is the key to maximizing profitability in our business. As part this plan, we installed brand new set of engines in the plant and a cogeneration secondary STG plant with a capacity of 3.20 MW which will reduce the maintenance hour as well as fuel cost. We expect our relationship with the machine supplier i.e. Rolls Royce will permit us to operate efficiently. We intend to adopt the procedures and practices currently specified at the machineries purchase agreement. Our parent company Baraka Power Limited has long experience in power general sector and we have already signed an Operational, Maintenance, Administrative and Financial Management Service Agreement with the BPL for technical support service. By virtue of this agreement, BPPL got operational efficiency for smooth operation of its business. Product pricing strategy The pricing strategy of Company is to supply electricity at an affordable price to the people. The price of the Company s product is determined at the tendering phase and GoB shall buy electricity over the project life at that price. Therefore, the Company got competitive advantage in its price due to fixed nature of product price. Fosusing on best practices We plan to incorporate the best practices available with respect to performance, corporate governance, management and employee training, quality control, environmental excellence and safety. 72 REDHERRING PROSPECTUS

75 REDHERRING PROSPECTUS SWOT ANALYSIS: S Strengths Experienced sponsor Skilled human resources Brand new engine Adequate installed capacity Guaranteed buyer and revenue stream Weaknesses W Expansion of project with same line largely depends on Government decision. Similar nature Company under common management Opportunities O There is huge gap between supply and demand of electricity and has immense opportunities to expand its business in the power sector. T Threats Natural disaster Shortage of fuel supply 73

76 Analysis of the financial statements of last five years with reason(s) of fluctuating revenue/sales, other income, total income, cost of material, finance cost, depreciation and amortization expense, other expense; changes of inventories, net profit before & after tax, EPS etc: 31 Dec17 Particulars (Half Yearly) 30 June17 30 June16 30June15 30June14 30June13 (Amount in BDT) Revenue/Sales 1,144,108,972 2,648,485,011 2,119,185,034 3,021,633, ,852,967 YoY change in sales 56.80% 24.98% 29.87% % Other income (5,479,317) (9,681,257) 4,596,307 4,801,207 11,355 YoY change in other income 43.40% % 4.27% Cost of material (839,552,234) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) YoY change in cost of material 58.10% 34.71% 38.78% % Finance cost (114,501,675) (257,996,023) (278,136,946) (218,898,508) (27,466,968) (1,857,789) YoY change in finance cost 55.62% 7.24% 27.06% % % Depreciation and amortization expense 73,354, ,216, ,135, ,842,958 20,532,294 1,100,021 YoY change in Dep. & Ammo. Exp % 0.06% 20.27% % % Other expense YoY change in other expense Inventories 785,267, ,283, ,316, ,914, ,747,323 YoY change in inventories 32.36% 22.50% 16.77% 31.73% Net profit before Tax 156,639, ,996, ,583, ,015,736 61,960,251 (3,774,680) YoY change in NPBT 50.59% 9.85% 2.51% % % Net profit after Tax 152,909, ,471, ,489, ,009,787 61,716,021 (6,631,381) YoY change in NPAT 51.84% 10.81% 2.56% % % Earnings per Share (EPS) (0.07) * Considering Total number of outstanding shares of 99,225, REDHERRING PROSPECTUS

77 REDHERRING PROSPECTUS Reason(s) of fluctuation: Reasons for Changes in revenues: As it can be observed from the above table, the overall sales changed over the years as the Company s capacity utilization and price of raw materials changed. Reasons for Changes in Other Income: Reason for changes in other income includes foreign exchange fluctuation, Interest earned on related party loan and changes of value of investments. Reasons for Changes in total income: Infact, combines effect of revenue and other income are reflected in the total income. As such, aforesaid explanation is applicable here also. Reasons for Changes in cost of material: : Costs of material is primarily in relation to purchase of fuel (HFO) & lubricant, fuel tank rent, oil carrying expenses and repair & maintenance of plant and machinery. Reasons for Changes in finance cost: As per business demand, the company arranged financing from different financial institutions to meet its financial needs. Therefore, the finance cost changes over the years. Reasons for Changes in depreciation and amortization expense: Throughout the year, the addition in fixed asset have increased and as a result the changes in depreciation. Reasons for Changes in other expense: As the company has no other in expense, so, there is no effect of change. Reasons for Changes in inventories: As the overall sales changes over the years so does the capacity utilization changes, therefore, the requirement for inventories have also changed. Reasons for Changes in net profit before & after tax, EPS: The net income have changed over the years in agreement with sales. Moreover, the number of shares has also increased, which also impacted the EPS. Known trends demands, commitments, events or uncertainties that are likely to have an effect on the company s business: The company has no known trends demands, event or uncertainties that are likely to have an effect on the company s business except the know trends and uncertainties which have been mentioned in page #68 of this prospectus. Similarly, the company has no commitments that are likely to have an effect on the company s business other that as specified in the sectionxxii under the head of Use of Proceeds of this prospectus. Trends or expected fluctuations in liquidity: The company has been operating with moderate liquidity. The company is currently enjoying working capital facilities in different modes from various financial institutions, through which it is managing liquidity and meeting its payments for procuring raw materials to carry out the service. Offbalance sheet arrangements those have or likely to have a current or future effect on financial condition: There are no offbalance sheet arrangements those have or likely to have a current or future effect on financial condition. 75

78 SECTION: VIII DIRECTORS AND OFFICERS 76 REDHERRING PROSPECTUS

79 REDHERRING PROSPECTUS Name, Father s name, age, residential address, educational qualification, experience and position of each of the directors of the company and any person nominated/represented to be a director, showing the period for which the nomination has been made and the name of the organization which has nominated him: Sl. Name Father s Name Age Residential Address 1 Mr. Faisal Ahmed Chowdhury 2 Mr. Gulam Rabbani Chowdhury 3 Mr. Monzur Kadir Shafi Mr. Md. Abdul Mumith Chowdhury Mr. Gulam Mustafa Chowdhury 47 2 Nirjhor, Lovely Road, West Subid Bazar, Sylhet Shagardighirpar, West Subid Bazar, Sylhet Mr. Mohibur Rahman Shafi 45 28/B Anamika, ShahiEidgaon, Sylhet Educational Qualification Experience B.A 26 Years B. Sc (Hon.), Foreign Training in Metallurgy & Machinery Production 33 Years B.A 19 Years Position Period of Nomination Name of Nominated Organization Chairman 5 Years Baraka Power Ltd. Managing Director 5 Years Baraka Power Ltd. Director 2 years Baraka Power Ltd. 4 Mr. Fahim Ahmed Chowdhury Mr. Md. Abdul Mumith Chowdhury 41 2 Nirjhor, Lovely Road, West Subid Bazar, Sylhet MBA 16 Years Director 2 years Baraka Power Ltd. 5 Mr. Md. Shirajul Islam Haji Abdul Khalique 63 House#80, Road#3, BlockE, Shahjalal Uposhohar, Sylhet B.A 27 Years Director 2 years Baraka Power Ltd. 6 Mr. Afzal Rashid Chowdhury Mr. Mamunur Rashid Chowdhury 48 Rashid House, Diganto 26, Ambarkhana, Sylhet B.A 20 Years Director 2 years Baraka Power Ltd. 7 Engr. Jalal Uddin Ahmed Chowdhury Mr. Safi Uddin Ahmed Choudhury 62 8/4, Nilkhet, Babupara, Flat No. 9A, DSA Tower, Dhaka B.Sc Engr. (Mechanical Engenireer) 40 Years Independent Director 3 Years N/A 8 Mr. Helal Ahmed Chowdhury Mr. Moin Uddin Chowdhury 68 FlatW5, House # 78. Road No. 18, Block A, Banani, Dhaka M.A 41 Years Independent Director 3 Years Baraka Power Ltd. The date on which he first became a director and the date on which his current term of office shall expire: SL. Name Position Date of becoming Director for the first time Date of Expiration of Current Term of Office 1 Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman 2 Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director 3 Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Limited 4 Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited 5 Mr. Md. Shirajul Islam Nominated Director by Baraka Power Limited 6 Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited 7 Engr. Jalal Uddin Ahmed Nominated Director by Baraka Power Limited Chowdhury 8 Mr. Helal Ahmed Chowdhury Nominated Independent Director by Baraka Power Limited 7 June April June April April th AGM 7 June th AGM 30 April th AGM 7 June th AGM 26 October October March March

80 If any director has any type of interest in other businesses, names and types of business of such organizations. If any director is also a director of another company or owner or partner of any other concern, the names of such organizations: Sl. Name Position in BPPL Involvement in other organization Name of the Organization Types of business Position 1 Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Baraka Power Limited Power generation Chairman Karnaphuli Power Limited Power generation Chairman Baraka Shikalbaha Power Limited Power generation Chairman Royal Homes Limited Real Estate Chairman Royal Educare Limited Educational service Chairman Baraka Fashions Limited RMG Chairman Baraka Apparels Limited RMG Chairman 2 Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Baraka Power Limited Power generation Managing Director Karnaphuli Power Limited Power generation Managing Director Baraka Shikalbaha Power Limited Power generation Managing Director Baraka Fashions Limited RMG Managing Director Baraka Apparels Limited RMG Managing Director Royal Homes Limited Real Estate Managing Director Royal Educare Limited Educational service Managing Director Queens Healthcare Limited Healthcare service Chairman Brothers Machinery Trading of agro machineries Partner 3 Mr. Monzur Kadir Shafi Nominee Director by Baraka Power Ltd. Royal Homes Limited Real Estate Director Baraka Apparels Limited RMG Director Baraka Fashions Limited RMG Director Queens Healthcare Limited Healthcare service Director Baraka Shikalbaha Power Limited Power generation Director Karnaphuli Power Limited Power generation Director 4 Mr. Fahim Ahmed Chowdhury Nominee Director by Baraka Power Ltd. Royal Homes Limited Real Estate Director Baraka Apparels Limited RMG Director Baraka Fashions Limited RMG Director Royal Educare Limited Educational service Director Queens Healthcare Limited Healthcare service Managing Director Baraka Shikalbaha Power Limited Power generation Director Karnaphuli Power Limited Power generation Director 5 Mr. Md. Shirajul Islam Chowdhury Nominee Director by Baraka Power Ltd. Baraka Apparels Limited RMG Director Baraka Fashions Limited RMG Director 6 Mr. Afzal Rashid Chowdhury Nominee Director by Baraka Power Ltd. Karnaphuli Power Limited Power generation Director Baraka Shikalbaha Power Limited Power generation Director Queens Healthcare Limited Healthcare service Director BlueBird Auto Trading company Partner Nina Afzal Industries Limited Tea Plantation, Plump, Land Properties Managing Director Balisera Hill Tea Co. Limited Tea Estate Managing Director A. R. Properties Developer company Proprietor 7 Engr. Jalal Uddin Ahmed Chowdhury Independent Director Karnaphuli Power Limited Saif Powertec Limited Baraka Shikalbaha Power Limited Power generation Services & Real Estate Power generation Independent Director Independent Director Independent Director 8 Mr. Helal Ahmed Chowdhury Independent Director nominated by Baraka Power Ltd. Baraka Power Limited Islami Bank Bangladesh Limited Power generation Bank Independent Director Independent Director 78 REDHERRING PROSPECTUS

81 REDHERRING PROSPECTUS Statement of if any of the directors of the issuer are associated with the securities market in any manner. If any director of the Issuer Company is also a director of any issuer of other listed securities during last three years then dividend payment history and market performance of that issuer: Name of the Listed Company Baraka Power Limited Name of the Directors of the Issuer are Associated with Mr. Faisal Ahmed Chowdhury Mr. Gulam Rabbani Chowdhury Mr. Helal Ahmed Chowdhury Stock Dividend Dividend Payment History Cash Dividend Stock Dividend Cash Dividend Stock Dividend Cash Dividend 15% 5% 5% 15% 8% 8% Source: Dhaka Stock Exchange Limited Market Performance (Baraka Power Limited): Market Cap in BDT (As Mar 06, 2018): (mn) Current Price Earning Ratio (P/E) Based on Audited EPS of 2017 (As Mar 06, 2018): Basic EPS Continuing Operations as per Audited Financial Statements of : 2.63 NAV Per Share as per Audited Financial Statements of : Total Comprehensive Income for the year as per Audited Financial Statements of : Source: Dhaka Stock Exchange Limited Other than the abovementioned security, the directors of BPPL are not associated with the securities market in any manner. Any family relationship (father, mother, spouse, brother, sister, son, daughter, spouse s father, spouse s mother, spouse s brother, and spouse sister) among the directors and top five officers: Family relationship among the Directors: Sl. Name of Directors Relationship with Nature of Relationship Mr. Gulam Rabbani Chowdhury Brother in Law 1 Mr. Faisal Ahmed Chowdhury Mr. Fahim Ahmed Chowdhury Brother Mr. Monjur Kadir Shafi Brother in Law Mr. Faisal Ahmed Chowdhury Brother in Law 2 Mr. Gulam Rabbani Chowdhury Mr. Fahim Ahmed Chowdhury Brother in Law Mr. Monjur Kadir Shafi Brother in Law Mr. Gulam Rabbani Chowdhury Brother in Law 3 Mr. Fahim Ahmed Chowdhury Mr. Monjur Kadir Shafi Brother in Law Mr. Faisal Ahmed Chowdhury Brother Mr. Faisal Ahmed Chowdhury Brother in Law 4 Mr. Monjur Kadir Shafi Mr. Gulam Rabbani Chowdhury Brother in Law Mr. Fahim Ahmed Chowdhury Brother in Law Family relationship among the Directors and top five officers: There is no family relationship among any of the directors and any of the top five employees of the company except mentioned above. 79

82 A very brief description of other businesses of the directors: The directors of the issuer have following other business: Sl. Directors Name of Company Description of Business 1 (a) Mr. Faisal Ahmed Chowdhury (b) Mr. Gulam Rabbani Chowdhury (c) Mr. Monzur Kadir Shafi (d) Mr. Fahim Ahmed Chowdhury Royal Homes Ltd. Address of the Company Shefa Bhaban (2 nd floor), Mirboxtola, Sylhet Legal Status Public limited company Date of Incorporation 23 February 2006 Operational status In operation Nature of business Real Estate Major Product or service Residential and Commercial Plot 2 (a) Mr. Faisal Ahmed Chowdhury (b) Mr. Gulam Rabbani Chowdhury (c) Mr. Helal Ahmed Chowdhury Baraka Power Ltd. Address of the Company 102Azadi, Mirboxtula, Sylhet Plant Address Fenchuganj, Sylhet Legal Status Publicly traded company Date of Incorporation 26 June 2007 Operational status In operation since 24 October 2009 Nature of business Power Generation Major Product or service Electricity 4 Mr. Gulam Rabbani Chowdhury Brothers Machinery Address of the Company Legal Status Nature of business Jail Road, Sylhet Partnership firm Trading of agro machineries 5 (a) Mr. Faisal Ahmed Chowdhury (b) Mr. Gulam Rabbani Chowdhury (c) Mr. Fahim Ahmed Chowdhury Royal Educare Ltd. Address of the Company Shefa Bhaban (2 nd floor), Mirboxtola, Sylhet Legal Status Private limited company Date of Incorporation 28 February 2013 Operational status In operation Nature of business Educational service 6 (a) Mr. Faisal Ahmed Chowdhury (b) Mr. Gulam Rabbani Chowdhury (c) Mr. Monzur Kadir Shafi (d) Mr. Fahim Ahmed Chowdhury (e) Mr. Md. Shirajul Islam Baraka Apparels Ltd Address of the Company 6/A/1 Shegunbagicha, Dhaka Factory Address Nachratpur, Habiganj Legal Status Private limited company Date of Incorporation 1 October 2015 Operational status Under construction Nature of business RMG Major Product or service Woven garments 7 (a) Mr. Gulam Rabbani Chowdhury (b) Mr. Monzur Kadir Shafi (c) Mr. Fahim Ahmed Chowdhury (d) Mr. Afzal Rashid Chowdhury Queens Healthcare Ltd. Address of the Company Khairun Bhaban (6 th floor), Mirboxtola, Sylhet Legal Status Private limited company Date of Incorporation 7 July 2015 Operational status Under construction Nature of business Healthcare service 80 REDHERRING PROSPECTUS

83 REDHERRING PROSPECTUS (a) Mr. Faisal Ahmed Chowdhury Address of the Company 6/A/1 Shegunbagicha, Dhaka (b) Mr. Gulam Rabbani Chowdhury Legal Status Private limited company 8 (c) Mr. Fahim Ahmed Chowdhury (d) Mr. Monzur Kadir Shafi (e) Mr. Afzal Rashid Chowdhury (f) Engr. Jalal Uddin Ahmed Chowdhury Karnaphuli Power Limited Date of Incorporation 17 November 2014 Current status Under construction Nature of business Power Generation (a) Mr. Faisal Ahmed Chowdhury Address of the Company 6/A/1 Shegunbagicha, Dhaka (b) Mr. Gulam Rabbani Chowdhury Legal Status Private limited company 9 (c) Mr. Fahim Ahmed Chowdhury (d) Mr. Monzur Kadir Shafi (e) Mr. Afzal Rashid Chowdhury Baraka Shikalbaha Power Limited Date of Incorporation 13 December 2017 Current status Under construction (f) Engr. Jalal Uddin Ahmed Chowdhury Nature of business Power Generation 10 Mr. Afzal Rashid Choudhury Blue Bird Auto Address of the Company Legal Status Nature of business Major Product or service Rashid House Digonto26, Amberkhana, Sylhet Partnership firm Trading company Motor vehicle 11 Mr. Afzal Rashid Choudhury NinaAfzal Industries Ltd. Address of the Company Legal Status Nature of business Rashid House Digonto26, Amberkhana, Sylhet Private limited company Tea plantation 12 Mr. Afzal Rashid Choudhury Balisera Hill Tea Co. Ltd. Address of the Company Legal Status Nature of business Rashid House Digonto26, Amberkhana, Sylhet Private limited company Tea Estate 81

84 13 Mr. Afzal Rashid Choudhury A.R. Properties Address of the Company Legal Status Nature of business Rashid House Digonto26, Amberkhana, Sylhet Proprietorship Property Development (a) (b) Mr. Faisal Ahmed Chowdhury Mr. Gulam Rabbani Chowdhury Address of the Company Legal Status Nature of business 06, Singbari Road, Boro Dewra, Tongi, Gazipur 1700 Private Limited Company RMG 14 (c) Mr. Monzur Kadir Shafi Baraka Fashions Limited (d) Mr. Fahim Ahmed Chowdhury Major Product or Service Woven graments (e) Mr. Md. Shirajul Islam Chowdhury 82 REDHERRING PROSPECTUS

85 REDHERRING PROSPECTUS Short BioData of the Directors Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Mr. Faisal Ahmed Chowdhury is a visionary business leader and possessing over twenty seven years of highly successful leadership in the area of fiscal, strategic, and operational management. He is a dynamic & result oriented businessman with a strong track record in a number of industrial sectors. His excellent analytical, interpersonal and motivational skills have made him a prominent and respected business leader in Bangladesh. After completing his graduation, during the 1990 s he relocated to the UK and started his own business founding Apex Printing and Publications Ltd. and then went on to established Imprint Trading Ltd., both of which were very successful. With the ambition of establishing businesses in his motherland and for the development of the socioeconomic standard of the nation, he successfully started an internationally recognized real estate company in Bangladesh named Royal City (300 acres), situated at the gateway of Sylhet. The vision established a modern independent residential town with a diverse range of worldclass civic facilities. With strong entrepreneurial and leadership skills, he was able to encourage many NRBs (Non Resident Bangladeshis) unfamiliar with the commercial landscape of Bangladesh to invest in their home nation of origin. Recently he has established an international standard educational organization, by the name of Royal Educare Limited (REL) in Bangladesh. Currently REL includes Eurokids Kindergarten and Royal Institute of Smart Education (RISE) primary & secondary school. RISE School incorporates the world renowned Cambridge University Curriculum. The future vision of REL is to develop the educational standards of the youth of Bangladesh with the aim of leaving a legacy for the future generation to build and improve our beloved nation, Bangladesh. Along with NRBs and local entrepreneurs, Mr. Faisal Chowdhury established Baraka Power Limited previously called Barakatullah Electro Dynamics Limited in This venture has helped to resolve the national power shortage in Bangladesh. Remarkably, his unique entrepreneurial and leadership skills has made Baraka Power Limited fully operational and created a valuable organization within a very short span of time. Then he went on to establish a second power plant named Baraka Patenga Power Limited (BPPL) in Chittagong. BPPL is the first power plant to be funded by the World Bank foreign currency loan under IPFF facility. BPPL maintains high environmental standards by introducing a Flue Gas Desulfurization (FGD) system to minimize the environmental impact. Mr. Faisal Chowdhury is also involved in several community and social interest activities and organizations. He is an Elected Executive Member of Foreign Investors Chamber of Commerce & Industry (FICCI) for the year , Executive Member of the Bangladesh Red Crescent Society, Sylhet Unit and MujibJahan Blood Bank and President of Sylhet Zimkhana Cricket Club. He has a deep interest and passion in participating in social and community interest projects that help improve the socioeconomic prosperity of Bangladesh as a whole. Mr. Faisal Chowdhury is well travelled with a good understanding of the diversity of culture. He has visited several countries including India, China, Thailand, Singapore, Hong Kong, Malaysia, Saudi Arabia, Canada, Austria, Germany, UK, USA, Sweden, Finland, Norway, Switzerland etc. He regularly attends business seminars and international exhibitions throughout the world and has built high level international networks to take Bangladeshi businesses into global level. 83

86 Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Managing Director of Baraka Power Limited as well as Baraka Group, Gulam Rabbani Chowdhury reflects on his diverse career in machine manufacturing, real estate, power, education and readymade garments industry, where dynamism of entrepreneurship and management discipline are the best parts of it; how to make a new startup to a huge success, how to engage and inspire NRB investors to invest in Bangladesh, how to lead a huge capital investment and extremely complex operation oriented business like power generation successfully, how to develop a strong and high level international network of business relations, how to brand yourself as a respected business leader and many more. At present he is leading the Baraka Power Limited which continuously supplying electricity to the National Grid. The plant is situated at Fenchuganj, Sylhet and powered by General Electric (GE) installed generators producing 51 MW of power and has been operational since With power plant in profitability, Mr. Chowdhury successfully took the private company to IPO flotation, listing it on both Dhaka and Chittagong Stock Exchanges in Bangladesh. With the efforts of Mr. Chowdhury, the success story of Baraka Power Limited set a new milestone for NRB investors, encouraging them to make further investment in the power sector. In 2011 Baraka Power signed a second PPA & IA to build a 50 MW power plant at Patenga, Chittagong which has been continuously supplying electricity to the national grid since the 4th May Inspired by the success of these two power plants, he is leading the construction of two new 110 MW and 105 MW HFO fired power plants at Chittagong. Developing his entrepreneurial vision further afield, he ventured into the readymade garments industry and he started of a readymade garment under the name of Bela Fashions Limited; a ten lines capacity woven garments located at Tongi, Gazipur. Before starting Baraka Power Limited, Mr. Chowdhury with the support of a group of NRB investors successfully established an innovative and unique largescale townscape vision by the name of Royal City in Sylhet, on 2006 which is a project of Royal Homes Limited. It has made a significant impact in the future of Sylhet as a fastdeveloping city, providing well planned residential and commercial facilities. During his career, Mr. Chowdhury identified the lack of high international standard educational facilities in Sylhet. Along with a consortium of NRB investors, he has been a key figure in establishing a leading educational organization by the name of Royal Educare Limited (REL) which aims to raise children with the highest standards of education. REL currently comprises of educational facilities from Eurokids Kindergarten up to and including primary and secondary schooling in RISE (Royal Institute of Smart Education). RISE school has incorporated the world respected and renowned Cambridge Curriculum. The Cambridge body has approved RISE as one of the best technology based premium international schools in the country, located in the heart of Sylhet. Mr. Chowdhury started his business career as Founder Managing Director by establishing Alim Industries Ltd. (An agricultural machinery manufacturing company) in the early 1990 s. His enthusiasm, hard work, dedication, dynamism, foresight and skilled leadership took the company into one of the toprated companies in the Agro Machinery Manufacturing sector. As a result, the company achieved a Presidential Award as a leading Agricultural Machinery Manufacturer of the company in the Bengali year Mr. Chowdhury is also actively involved with some professional organizations where he significantly contributes to the achieve the respective organizations goals. At present he is holding the position of Vice President of Bangladesh Independent Power Producers Association (BIPPA) and an Executive Member of Bangladesh Association of Publicly Listed Companies (BAPLC). Mr. Chowdhury earned his bachelor degree in science under the Chittagong University. He attended many overseas trainings; specializing in metallurgy & manufacturing process, gaining a deep understanding and knowledge of industrial manufacturing and development. He has attended Business Leadership Forum on Smart Energy in Italy. He has visited many countries and attended seminars, international conferences and exhibitions such as in Australia, Canada, China, Denmark, France, Germany, India, Italy, Malaysia, Maldives, Morocco, Singapore, Thailand, Turkey, UAE, UK and USA. As a result of the numerous business successes across a variety of sectors, Mr. Chowdhury has received many accolades and corporate awards. 84 REDHERRING PROSPECTUS

87 REDHERRING PROSPECTUS He was born in 1966 & brought up in a respectable family at Sylhet. Whilst he continues to establish successful business, Mr. Chowdhury holds dear to his heart the most important work which needs to be done to enhance the education and health and living standards of the poor and needy throughout Bangladesh. He contributes significantly in many ways to these major and most important issues that Bangladesh is facing. Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Ltd. Mr. Manzur Shafi is a firstgeneration entrepreneur who joined hands with two other young business professionals at his young age to start a hospitality business in Hamtramck, Michigan, in Mr. Shafi, graduated in 1991 and studied Law and then to sharpen his skills obtained multiple training in hospitality business globally. His first adventure into the business started in New York City where he quickly turned his promoting skill into new business entrepreneurship and his experiment in Michigan earned him credits and accolades from all including the Better Business Bureau of Michigan and Detroit News. His interest in US politics also allowed him to be known by notable politicians in Michigan, like Senator Carl Levin, Senator Gray Peters and US Congressmen Hansan Clark, John Conyers and others. His success in restaurant business, earned him an interview with CNN, which was telecasted globally. He belongs to a Muslim family in Sylhet. His father, Late Muhibur Rahman Chowdhury and his family also influenced him to be a successful business entrepreneur. But his desire to enter into Hospitality industry from a simple life in Sylhet to United States of America and to gain recognition in the society was purely because of his harddiligent work and his persistent in becoming successful. Mr. Shafi believes in various variables like risk taking capacity, selfconfidence, persuasion, innovation, the capacity to cope with stress, hard work and commitment are the factors which contribute to the success of an entrepreneur. Above all he gives maximum importance to the right judgement of the entrepreneur about the timings of the project he gets involved in. He is also a trustee member of North East University, Sylhet. After obtaining diversity knowledge and experience in different field of business, he joined Baraka Patenga Power Limited as Project Director and now the Company appointed him as Deputy Managing Director. Mr. Fahim Ahmed Chowdhury Nominee Director by Baraka Power Ltd. Fahim A Chowdhury is a member of a reputed business family. He is a person with strong vision and the confidence to take calculative risks in business. After completion of his graduation he began his career at Birmingham airport, GAP flagship & TFL in order to gain experience in customer service. He then started different businesses such as a fast food takeaway restaurant, money transfer & travel agent and real estate business etc. in London and succeeded in gaining a good reputation in the field of business. He completed MBA in HRM and also achieved a BETEC qualification in customer service from the City Council of London which helped him to achieve vast knowledge in building community relationships as well as increased his managerial skills. In the spirit of contributing to the development of the motherland he moved to Bangladesh and joined as a Project Director to Baraka Power and subsequently he took the responsibility of Deputy Managing Director & Head of Finance. Fahim A Chowdhury is also involved in many charitable organizations. He is currently serving as the president of the Rotary club of Sylhet Sunshine and Nirjar Shahitta Shongcriti Crira Shongtha, member of Paul Harris Fellow. He is also a life member of Baraka Foundation & Baraka Arabic Learning Centre. Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Ltd. Mr. Afzal Rashid Chowdhury was born in 28 October 1969 at Sylhet, Bangladesh. By his wide knowledge in the field of business he expands his business activities in a vast area. Beside the directorship of the company, he is the Proprietor of A. R. Properties, Partner of Blue Bird Auto, Managing Director of NinaAfzal Industries Ltd. (Khadim Tea Estate, Goolni Tea Estate & NinaAfzal Properties), Balisera Hill Tea Company Limited (Junglebari Tea Estate). 85

88 Mr. Md. Shirajul Islam Nominated Director by Baraka Power Ltd. Mr. Shirajul Islam is a reputed business person having garments business in U.K. and thus gathered more than 25 years of experience in Readymade garments (RMG) business. Besides, he also engaged himself in hotel business. He has the potential skills required to manage diversified business in different countries. Baraka Power Ltd. found the qualities that match to be a Director of the company and have the honor to absorb him for the position. The newly established associate company i.e. Baraka Apparels Limited and Baraka Fashions Limited have been founded by capitalizing his vast experience in the RMG sector. Engr. Jalal Uddin Ahmed Chowdhury Independent Director Engr. Jalal Uddin Ahmed Chowdhury joined in the board of directors of Baraka Patenga Power Limited as Independent Director. Mr. Jalal Ahmed Chowdhury, Ex. Member Generation of BPDB, was born and brought up in Sylhet. He earned his Bachaler Degree (BSc Engr. In Mechanical) from Chittagong Engineering College in From the beginning of his career he had worked in BPDB at differet power stations like Ghorasal, Shikalbaha, Siddhirganj etc. Later he also worker as Project Director at Fenchuganj 90MW Combined Cycle Power Plant and Karnaphuli Hydro Power Station Rehabilitation Project. He also won Best Project Director Award in from Ministry of Power. He is also an Independent Director of Saif Powertec Limited. Mr. Helal Ahmed Chowdhury Independent Director nominated by Baraka Power Ltd Helal Ahmed Chowdhury is an Independent Director of the Company and also serving with Islami Bank Bangladesh Limited as an Independent Director. He was Managing Director & CEO of Pubali Bank Limited for nineyear tenure during After completion of Masters Degree, he joined at Pubali Bank in 1977 as first class officer through Superior Service Examination, served in different capacities and promoted as its CEO which is a rare event. Under his dynamic leadership Pubali Bank became a rolemodel bank. Experienced of about four decades in banking, Helal Ahmed Chowdhury is currently working as Supernumerary Professor of Bangladesh Institute of Bank Management. He is a Diplomaed Associate of IBB. He completed foundation course at Sonali Bank London and the then BCCI during He attended many short and long courses at home and abroad in different universities including Oxford and Cambridge of UK, UC Berkerley and Columbia University, USA. He joined at different trade delegations abroad. He was vicechairman of ABB and now associated with it. Loan status of the issuer, its directors and shareholders who hold 10 % or more shares in the paidup capital of the issuer in terms of the CIB Report of Bangladesh Bank: Neither the Company nor any of its directors and shareholders who holds 10 % or more shares in the paidup capital of the Issuer is loan defaulter. 86 REDHERRING PROSPECTUS

89 REDHERRING PROSPECTUS Name with position, educational qualification, age, date of joining in the company, overall experience (in year), previous employment, salary paid for the financial year of the Chief Executive Officer, Managing Director, Chief Financial Officer, Company Secretary, Advisers, Consultants and all Departmental Heads. If the Chairman, any director or any shareholder received any monthly salary than this information should also be included: The above information not is applicable for BPPL as the Company rendered required services under service contract with Baraka Power Limited. However, Company has paid remuneration to the following directors: Name Mr. Faisal Ahmed Chowdhury, Nominated Director by Baraka Power Limited Mr. Gulam Rabbani Chowdhury, Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury, Nominated Director by Baraka Power Limited Mr. Manzur Kadir Shafi, Nominated Director by Baraka Power Limited Mr. Mohammed Monirul Islam 1 Mr. Md. Shariful Alam 2 Mr. Monowar Ahmed 3 Position Chairman & Head of Planning & Business Development Managing Director Educational Qualification Age Date of Joining in the Company Overall Experience (in year) Previous Employment Remuneration Paid During 2017 (JulDec) (BDT) B.A 47 7 June N/A 825,000 B. Sc (Hon.), Foreign Training in Metallurgy & Machinery Production 51 7 June N/A 825,000 Head of Admin MBA 43 7 June N/A 330,000 Deputy Managing Director Chief Financial Officer General Manager (O & M) General Manager Commercial B.A April N/A 1,749,000 MBA (Finance) 45 Bachelor of Maritime Science (Engineering) & MBA (Finance) 51 MBA 43 Mr. Mohammad Rana 4 Company Secretary MBA January January January October Summit Power Limited Clarke Energy and Orient Energy System Bangladesh Ltd Summit Power Limited Prime Finance Capital Management Limited, Prime Bank Investment Limited Nil Nil Nil Nil Chief Executive Officer Advisers Consultants N/A N/A N/A 1,2,3,4 Under Operational, Maintenance, Administrative and Financial Management Service Agreement It is mentionable that the company had no chief executive officer, advisors and consultant during the period. 87

90 Changes in the key management persons during the last three years. Any change otherwise than by way of retirement in the normal course in the senior key management personnel particularly in charge of production, planning, finance and marketing during the last three years prior to the date of filing the information memorandum. If the turnover of key management personnel is high compared to the industry, reasons should be discussed: There was no change in the key management persons during the last three. There is no change otherwise than by way of retirement in the normal course in the senior key management personnel particularly incharge of production, planning, finance and marketing during the last three years prior to the date of filling the prospectus. A profile of the sponsors including their names, father s names, age, personal addresses, educational qualifications, and experiences in the business, positions/posts held in the past, directorship held, other ventures of each sponsor and present position: Name of the Sponsors, Father s Name, Age, Personal Address Educational Qualification and Experience Past Positions/Posts Present Other Ventures of Each Sponsor Name: Baraka Power Limited Father s name: N/A Age: N/A Personal Address: N/A Educational Qualification: N/A Experience: N/A N/A Director (Represented by Faisal Ahmed Chowdhury, Gulam Rabbani Chowdhury, Fahim Ahmed Chowdhury, Monzur Kadir Shafi, Md. Shirajul Islam, Afzal Rashid Chowdhury, Helal Ahmed Chowdhury) Karnaphuli Power Limited Baraka Shikalbaha Power Limited Baraka Fashions Limited Name: Mr. Faisal Ahmed Chowdhury Father s name: Mr. Md. Abdul Mumith Chowdhury Age: 47 Personal Address: 2 Nirjhor, Lovely Road, West SubidBazar, Sylhet Educational Qualification: B.A Experience: 26 Years Director Nominated Director by Baraka Power Limited & Chairman Baraka Power Limited Karnaphuli Power Limited Baraka Shikalbaha Power Limited Royal Homes Limited Royal Educare Limited Baraka Fashions Limited Baraka Apparels Limited Baraka Power Limited Name: Mr. Gulam Rabbani Chowdhury Father s name:mr. Gulam Mustafa Chowdhury Age: 51 Years Personal Address: 48, Shagardighirpar, West Subid Bazar, Sylhet Educational Qualification: B. Sc (Hon.), Foreign Training in Metallurgy & Machinery Production Experience: 33 Years Sponsor Nominated Director by Baraka Power Limited & Managing Director Karnaphuli Power Limited Baraka Shikalbaha Power Limited Baraka Fashions Limited Baraka Apparels Limited Royal Homes Limited Royal Educare Limited Queens Healthcare Limited Brothers Machinery If the present directors are not the sponsors and control of the issuer was acquired within five years immediately preceding the date of filing prospectus details regarding the acquisition of control, date of acquisition, terms of acquisition, consideration paid for such acquisition etc.: Since, Both Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury are sponsors and all other directors are nominated by Baraka Power Limited, which is also a sponsor of BPPL. Hence, the above information is not applicable for the issuer. 88 REDHERRING PROSPECTUS

91 REDHERRING PROSPECTUS If the sponsors/directors do not have experience in the proposed line of business, the fact explaining how the proposed activities would be carried out/managed: The sponsors/directors of the Company have experienced in the proposed line of business. Interest of the key management persons: There is no other interest with the key management except the followings: Sl. Name of key management persons 1 Mr. Faisal Ahmed Chowdhury 2 Mr. Gulam Rabbani Chowdhury Designation Director (Nominated by Baraka Power Limited) & Chairman Director (Nominated by Baraka Power Limited) & Managing Director 3 Mr. Fahim Ahmed Chowdhury Director (Nominated by Baraka Power Limited) 4 Mr. Monzur Kadir Shafi Director (Nominated by Baraka Power Limited) & Deputy Managing Director Details of Interest Remuneration & Board meeting attendance fee Remuneration & Board meeting attendance fee Remuneration & Board meeting attendance fee Remuneration & Board meeting attendance fee All interests and facilities enjoyed by a director, whether pecuniary or nonpecuniary: Sl. Name of Director Nature of interest in the transaction Amount of transaction Jul Dec, Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Board attendance fee 28,750 27,250 30,000 30,000 5,000 Remuneration 825, ,350,000 1,200, , Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Md. Shirajul Islam Nominated Director by Baraka Power Limited Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Dr. Tofayel Ahmed Ph. D Independent Director nominated by Baraka Power Ltd. Mr. Md. Touhidul Islam Independent Director Engr. Jalal Uddin Ahmed Chowdhury Independent Director nominated by Baraka Power Ltd. Board attendance fee 28,750 27,250 30,000 30,000 5,000 Remuneration 825,000 1,650,000 1,350,000 1,200, ,000 Board attendance fee 28,750 15,750 15,000 20,000 Remuneration 1,749,000 3,498,000 2,940,000 2,700, ,000 Board attendance fee 23,000 27,250 20,000 25,000 5,000 Remuneration 330, , , , ,000 Board attendance fee 28,750 21,500 25,000 5,000 Remuneration Board attendance fee 28,750 21,500 20,000 25,000 5,000 Remuneration Board attendance fee 5,750 27,250 25,000 25,000 5,000 Remuneration Board attendance fee 7,250 15,000 Remuneration Board attendance fee 11,500 5,000 Remuneration Note: There is no pecuniary interest or facilities enjoyed by directors except stated above. 89

92 Number of shares held and percentage of shareholding (preissue): SL. No. Name of the Shareholders No. of Share Shareholding Percentage at present (%) 1 Baraka Power Limited (Holding Company) 506,047, % 2 Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 2,976, % 3 Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) 2,976, % 4 Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) 850, % 5 Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) 1,575, % 6 Md. Shirajul Islam (Nominated Director by Baraka Power Limited) 1,050, % 7 Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) 1,050, % Total 61,083, % Change in Board of Directors during last three years: Name Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Existing Existing Existing Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) Existing Existing Existing Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Existing Existing Existing Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) Existing Existing Existing Md. Shirajul Islam (Nominated Director by Baraka Power Limited) Existing Existing Existing Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) Existing Existing Existing Dr. Tofayel Ahmed Ph. D (Nominated Independent Director by Baraka Power Limited) Retired Existing Existing Touhidul Islam (Independent Director) Existing Existing Existing Engr. Jalal Uddin Ahmed Chowdhury (Independent Director) Newly Appointed Note: Mr. Helal Ahmed Chowdhury has been appointed as Nominated Independent Director by Baraka Power Limited effective from March 12, 2018 Note : Mr. Touhidul islam has resigned from the Board as independent Director effective from March 12, REDHERRING PROSPECTUS

93 REDHERRING PROSPECTUS Director s engagement with similar business: Sl. Name of the Director Name of the Company Engagement with similar business Nature of Engagement 1 Mr. Faisal Ahmed Chowdhury Chairman 2 Mr. Gulam Rabbani Chowdhury Baraka Power Limited Managing Director 3 Mr. Helal Ahmed Chowdhury Independent Director Sl. Name of the Director Name of the Company Engagement with similar business Nature of Engagement 1 Mr. Faisal Ahmed Chowdhury 2 Mr. Gulam Rabbani Chowdhury Director (Nominated by BPPL) & Chairman Director (Nominated by BPL) & Managing Director 3 Mr. Monzur Kadir Shafi Director (Nominated by BPPL) Karnaphuli Power Limited 4 Mr. Fahim Ahmed Chowdhury Director (Nominated by BPL) 5 Mr. Afzal Rashid Chowdhury Director (Nominated by BPPL) 6 Engr. Jalal Uddin Ahmed Chowdhury Independent Director (Nominated by BPPL) Sl. Name of the Director Name of the Company Engagement with similar business Nature of Engagement 1 Mr. Faisal Ahmed Chowdhury 2 Mr. Gulam Rabbani Chowdhury Director (Nominated by BPPL) & Chairman Director (Nominated by BPL) & Managing Director 3 Mr. Monzur Kadir Shafi Baraka Shikalbaha Power Director (Nominated by BPPL) Limited 4 Mr. Fahim Ahmed Chowdhury Director (Nominated by BPL) 5 Mr. Afzal Rashid Chowdhury Director (Nominated by BPPL) 6 Engr. Jalal Uddin Ahmed Chowdhury Independent Director (Nominated by BPPL) 91

94 SECTION: IX CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 92 REDHERRING PROSPECTUS

95 REDHERRING PROSPECTUS Any loans either taken or given from or to any director or any person connected with the director, clearly specifying details of such loan in the prospectus, and if any loan has been taken from any such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such loan, rate of interest applicable, date of loan taken, date of maturity of loan and present outstanding of such loan: There were no loans either taken or given from or to any director or any person connected with the director. And also, there were no loan which has been taken from any such person who did not have any stake in the issuer, its holding company or its associate concerns. However, intercompany loan transactions with its group companies is given below: Name of the Related Party Nature of Relationship Nature of Transaction Transactions during the year Outstanding Amount Receivables/(Payables) Taka Taka Taka Taka Short term loan 259,138, ,392,319 Baraka Power Limited Holding Company Interest Charged 1,942,799 4,363,745 (54,679,614) Creditor Karnaphuli Power Limited Subsidiary Company (Previously associate company) Short term loan 589,165, ,450,630 Receivable Note: BPPL did not take loans from any related party or connected persons 93

96 SECTION: X EXECUTIVE COMPENSATION 94 REDHERRING PROSPECTUS

97 REDHERRING PROSPECTUS The total amount of remuneration/salary/perquisites paid to the top five salaried officers of the issuer in the last accounting year and the name and designation of each such officer: The above information not is applicable for BPPL as the Company rendered required services under Operational, Maintenance, Administrative and Financial Management Service Agreement with Baraka Power Limited. However, Company has paid remuneration to the following directors: (As per Audited Accounts) Name Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Manzur Kadir Shafi Nominated Director by Baraka Power Limited Position Remuneration Paid During 2017 (JulDec) (BDT) Head of Planning & Business Development 825,000 Managing Director 825,000 Head of Admin 330,000 Deputy Managing Director 1,749,000 Total 3,729,000 Aggregate amount paid to all directors and officers as a group during the last accounting year: (As per Audited Accounts) Particulars Nature of Payment JulDec, 2017 (BDT) 1. Directors Board meeting Fee 184, Directors Remuneration 3,729, Managers and Above Salary, Bonus & other Allowances Total 3,913,000 If any shareholder director received any monthly salary/perquisite/benefit it must be mentioned along with date of approval in AGM/EGM, terms thereof and payments made during the last accounting year: Name of Directors Mode of benefits Remuneration Paid During 2017 (JulDec) (BDT) Date of Approval in AGM Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Remuneration 825,000 4th AGM held on 11 December ,000 4th AGM held on 11 December ,000 4th AGM held on 11 December ,749,000 4th AGM held on 11 December 2014 Other than the abovementioned director there are no such directors received any monthly salary/perquisite/benefit during the year. 95

98 The board meeting attendance fees received by the director including the managing director along with date of approval in AGM/EGM: Sl. Name of Director Date of Approval in AGM Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Md. Shirajul Islam Nominated Director by Baraka Power Limited Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Dr. Tofayel Ahmed Ph. D Independent Director nominated by Baraka Power Ltd. Mr. Md. Touhidul Islam Independent Director Engr. Jalal Uddin Ahmed Chowdhury Independent Director nominated by Baraka Power Ltd. Board Meeting Attendance Fees During 2017 (JulDec) (BDT) 4th AGM held on 11 December ,750 4th AGM held on 11 December ,750 4th AGM held on 11 December ,000 4th AGM held on 11 December ,750 4th AGM held on 11 December ,750 4th AGM held on 11 December ,750 4th AGM held on 11 December ,750 4th AGM held on 11 December th AGM held on 11 December ,500 Any contract with any director or officer providing for the payment of future compensation The Company has no contract with any Director or Officer for providing the payment of future compensation. If the issuer intends to substantially increase the remuneration paid to its directors and officers in the current year, appropriate information regarding thereto: Issuer has no such intends to substantially increase in the pay structure of the directors and officers in the current year. However, the company provides annual increment to the employees considering company s profitability, its business growth potential, rate of inflation, and performance of the individuals. Any other benefit/facility provided to the above persons during the last accounting year: No directors and officers of the Company received any other benefit/facility in the last accounting year except which is disclosed above. 96 REDHERRING PROSPECTUS

99 REDHERRING PROSPECTUS SECTION: XI OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES 97

100 OPTIONS GRANTED TO DIRECTORS, OFFICERS AND EMPLOYEES The Company has not offered any option for issue of shares to any of the officers, directors and employees, or to any outsiders. 98 REDHERRING PROSPECTUS

101 REDHERRING PROSPECTUS SECTION: XII TRANSACTION WITH THE DIRECTORS AND SUBSCRIBERS TO THE MEMORANDUM 99

102 The names of the directors and subscribers to the memorandum, the nature and amount of anything of value received or to be received by the issuer from the above persons, or by the said persons, directly or indirectly, from the issuer during the last five years along with the description of assets, services or other consideration received or to be received: The Directors and Subscribers to the Memorandum have not received any benefit except remuneration received by the directors, directly or indirectly during the last five years, details of which are given below. The issuer has not received or to be received any assets, services or other consideration from its Directors and Subscribers to the Memorandum except fund against allotment of shares. Sl Name of Director Mr. Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Mr. Monzur Kadir Shafi Nominated Director by Baraka Power Limited Mr. Fahim Ahmed Chowdhury Nominated Director by Baraka Power Limited Mr. Md. Shirajul Islam Nominated Director by Baraka Power Limited Mr. Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited Dr. Tofayel Ahmed Ph. D Independent Director nominated by Baraka Power Ltd. Mr. Md. Touhidul Islam Independent Director Engr. Jalal Uddin Ahmed Chowdhury Independent Director nominated by Baraka Power Ltd. Nature of interest in the transaction Jul Dec, 2017 Amount of transaction Board attendance fee 28,750 27,250 30,000 30,000 5,000 Remuneration 825, ,350,000 1,200, ,000 Board attendance fee 28,750 27,250 30,000 30,000 5,000 Remuneration 825,000 1,650,000 1,350,000 1,200, ,000 Board attendance fee 28,750 15,750 15,000 20,000 Remuneration 1,749,000 3,498,000 2,940,000 2,700, ,000 Board attendance fee 23,000 27,250 20,000 25,000 5,000 Remuneration 330, , , , ,000 Board attendance fee 28,750 21,500 25,000 5,000 Remuneration Board attendance fee 28,750 21,500 20,000 25,000 5,000 Remuneration Board attendance fee 5,750 27,250 25,000 25,000 5,000 Remuneration Board attendance fee 7,250 15,000 Remuneration Board attendance fee 11,500 5,000 Remuneration 100 REDHERRING PROSPECTUS

103 REDHERRING PROSPECTUS Also the following directors have received dividend (Bonus) during FY : Date of Issue Persons to whom those are issued No. of shares allotted Faisal Ahmed Chowdhury 141,750 Gulam Rabbani Chowdhury 141,750 Monzur Kadir Shafi 75,000 2Jan17 Fahim Ahmed Chowdhury 40,500 Afzal Rashid Chowdhury 50,000 Touhidul Islam 40,000 Md. Shirajul Islam 50,000 If any assets were acquired or to be acquired within next two financial years from the aforesaid persons, the amount paid for such assets and the method used to determine the price shall be mentioned in the prospectus, and if the assets were acquired by the said persons within five years prior to transfer those to the issuer, the acquisition cost thereof paid by them: No assets have been acquired or to be acquired from the Directors and Subscribers to the Memorandum within last five years. 101

104 SECTION: XIII OWNERSHIP OF THE COMPANY S SECURITIES 102 REDHERRING PROSPECTUS

105 REDHERRING PROSPECTUS The names, addresses of all shareholders of the company before IPO, indicating the amount of securities owned and the percentage of the securities represented by such ownership, in tabular form: The shareholding position of the Company as on the Prospectus publication date is as under: SL. No. Name of Directors & Sponsors 1. Baraka Power Limited 2. Faisal Ahmed Chowdhury 3. Gulam Rabbani Chowdhury 4. Fahim Ahmed Chowdhury 5. Monzur Kadir Shafi 6. Md. Shirajul Islam 7. Afzal Rashid Chowdhury 102Azadi, Mirboxtola, Sylhet3100 Address Status No. of Shares 2Nirjor, Lovely Road, West Subid Bazar, Sylhet 48Sagardighir Par, West Subid Bazar, Sylhet 2Nirjor, Lovely Road, West Subid Bazar, Sylhet 28/B Anamika, Shahi Eidgoan, Sylhet House # 40, Road # 3, Block # E, Shahjalal Uposhahor, Sylhet Rashid House Digonto26, Amberkhana, Sylhet Represented by Faisal Ahmed Chowdhury, Gulam Rabbani Chowdhury, Fahim Ahmed Chowdhury, Monzur Kadir Shafi, Md. Shirajul Islam, Afzal Rashid Chowdhury Nominated Director by Baraka Power Limited & Chairman Nominated Director by Baraka Power Limited & Managing Director Nominated Director by Baraka Power Limited Nominated Director by Baraka Power Limited Nominated Director by Baraka Power Limited Nominated Director by Baraka Power Limited % of Shareholding Before IPO 50,604, % 2,976, % 2,976, % 850, % 1,575, % 1,050, % 1,050, % Flat C3, Tenament 2, 8. Touhidul Islam Block E, Bashundhara R/A, Shareholder 840, % Baridhara, Dhaka 9. Mijanur Rahman Choudhury 53Prantik, Miah Fazil Chist, Subid Bazar, Sylhet Shareholder 2,730, % 10. Abdul Bari Munni Villa, 7Housing Estate, Amberkhana, Sylhet Shareholder 892, % 11. Momthaz Chowdhury 48Sagardighir Par, West Subid Shareholder Bazar, Sylhet 2,919, % 12. Rushina Ahmed Chowdhury 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Shareholder 1,984, % 13. Syeda Yasmin Hossain 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Shareholder 1,984, % 14. NoorEZannat Chowdhury 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Shareholder 1,664, % 15. Abeda Khanom Chowdhury 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Shareholder 1,821, % 16. Nasim Ahmed Chowdhury 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Shareholder 729, % 17. Ubaydia Chowdhury Digonto31, Electric Supply Road, Amberkhana, Sylhet Shareholder 1,050, % Flat # B3, Britannia Samana, 18. Fokrul Alam Chowdhury Mahmudabad, Airport Road, Shareholder 450, % Amberkhana, Sylhet 19. Nanu Kazi Md. Miah Gonipur, Chhatak, Sunamgonj Shareholder 1,050, % 20. Atikur Rahman 31Anamika/B, Shahi Eidgaon, Sylhet Shareholder 997, % 21. Nayem Ahmed Chowdhury 22. Md. Humayun Ahmed 23. Alimul Ahsan Chowdhury 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Vil: Dharadharpur, South Surma, Sylhet 42 Bosundora R/A, Raynogor Razbari, Sylhet Shareholder 897, % Shareholder 472, % Shareholder 446, % 103

106 SL. No. 24. Niaz A. Khan Name of Directors & Sponsors 25. Sultana Jesmin Chino 26. Shoeb Khan 27. Yeaheya Murad Khan 28. Ali Ahmed 29. Foster Securities Ltd. 30. Zakir Hossain 31. Kazi Md. Angur Miah 32. Masrur Chowdhury 33. Mohammed Abdul Ahad 34. Abdul Wasay Chowdhury (Zuber) 35. Alimus Sadat Chowdhury Address Status No. of Shares 68Rajar Goly (3rd floor), Darga Gate, Sylhet 2/G, Avenue2/12, Mirpur2, Dhaka 49Nirjhor, Lovely Road, West Subid Bazar, Sylhet 49Nirjhor,Lovely Road, West Subid Bazar, Sylhet Vill: Amratoli, PO: Hasonfatimapur, PS: Jagonathpur, Dist: Sunamgonj 333/1, Segunbagicha (3rd floor), Dhaka 14/A Amborkhana Boro Bazar, Sylhet Hasan Villa, 10/BNibash, Pathantula, Sylhet 31Digonto, Electric Supply Road, Amberkhana, Sylhet 12Devenport Gardens, Ilford, Essex, UK 11Digonto, Roy Hussain, Electric Supply Road, Sylhet Mitaly 1/A R/A, Raynogor Razbari, Sylhet % of Shareholding Before IPO Shareholder 787, % Shareholder 399, % Shareholder 577, % Shareholder 735, % Shareholder 661, % Shareholder 525, % Shareholder 525, % Shareholder 525, % Shareholder 525, % Shareholder 525, % Shareholder 420, % Shareholder 525, % 36. Abdul Mumin 13/3 Nurani, Subid Bazar, Sylhet Shareholder 525, % 37. Masud Ahmed Mominkhola, South Surma, Sylhet Shareholder 525, % Mohammed Monsur Alam Chowdhury Syed Musharaf Hussain Chowdhury 40. Sajeda Chowdhury 41. Tanjeel Wadud Chowdhury (Sagor) 42. Shubina Ahmed Chowdhury 43. Nasrin Sultana Sampa 44. Roushan Ali Khan 45. Shamsher Ali Tarafder 46. Rawad Ashraf 47. Tania Tabassum 48. Abdul Mannan 33Nirjhar, Lovely Road, West Subid Bazar, Sylhet 112Amborkhana Boro Bazar, Sylhet 20, Boroshala Mojumder House, Airport Road, P. O Sylhet Cadet College3101, Sylhet House # 04, Road # 04, Block # A, Shahjalal Uposhahor, Sylhet 28/B Anamika, Shahi Eidgoan, Sylhet Flat C3, Tenament 2, Block E, Bashundhara R/A, Baridhara, Dhaka Jupitar Readymade Garments Ltd., Plot # I/2, Road # 06, Section # 07, Mirpur, Dhaka Jupitar Readymade Garments Ltd., Plot # I/2, Road # 06, Section # 07, Mirpur, Dhaka Jupitar Readymade Garments Ltd., Plot # I/2, Road # 06, Section # 07, Mirpur, Dhaka Flat # A7, House # 1/4, Block # C, Lalmatia, Dhaka Munni Villa, 7Housing Estate, Amberkhana, Sylhet Shareholder 525, % Shareholder 52, % Shareholder 315, % Shareholder 367, % Shareholder 787, % Shareholder 472, % Shareholder 105, % Shareholder 105, % Shareholder 105, % Shareholder 105, % Shareholder 577, % 104 REDHERRING PROSPECTUS

107 REDHERRING PROSPECTUS SL. No. Name of Directors & Sponsors Address Status No. of Shares % of Shareholding Before IPO 49. Mumina Khatun Munni Villa, 7Housing Estate, Amberkhana, Sylhet Shareholder 105, % 50. Mohibun Bari Chowdhury Munni Villa, 7Housing Estate, Amberkhana, Sylhet Shareholder 840, % 51. Enamul Haque Khan Doul19, Subidbazar, Sylhet Shareholder 178, % 52. Nurjahan Begum 2Modhushahid, Sylhet Shareholder 73, % 53. David Hasan Vill Khasha, P.O & P.S Beanibazar, Sylhet. Shareholder 420, % 54. Azizur Rahman Vill Jhigli, PS Chatak, Dist. Sunamgonj Shareholder 105, % 55. Dr. Hasina Choudhury 191 Oikkatan, West Pirmoholla, Shareholder Sylhet 105, % 11 Digonto, Roy Hossain, Electric 56. Rebunnessa Chowdhury Supply Road, Amberkhana, Shareholder 262, % Sylhet 57. Mohammod Shamsur Rahman 58. Naznin Sultana 59. Suraiya Rahman 60. Sayem Ahmed 02Nirjhar, Lovely Road, West Subidbazar, Sylhet3100 Flat # B3, Britania Samana, Mahmudabad, Airport Road, Amberkhana, Sylhet Flat # A11, Property Paragon, 116Segunbagicha, Dhaka1000 Vil: Dharadharpur, South Surma, Sylhet Shareholder 262, % Shareholder 525, % Shareholder 84, % Shareholder 472, % 61. Mohammed Aziz baksh Bassh House, 58Kuarpar, Sylhet Shareholder 367, % 62. Ahmed Tarek Kuchai, Kadomtoli, Sylhet Shareholder 26, % 63. Md. Motiul Islam House # Ja 10/1, Middle Badda, Dhaka1212 Shareholder 199, % 64. Md. Shahidul Islam House # Ja 10/1, Middle Badda, Dhaka1212 Shareholder 42, % 65. Saleha Afrooz 27/B Anamika, Shahi Eidgoan, Sylhet Shareholder 105, % 66. Abdul Muktadir Chowdhury 47Amborkhana Boro Bazar, Sylhet Shareholder 157, % 67. Mohammed Sadiqur Rahman 68. Feroz Suleman Atcha 69. Mridulal Bhattacharjee 70. Anamika Roy 71. Jayanta Kumar Podder 72. Sosanta Kumar Podder 73. Ashrafun Nessa 74. Anisul Khadija House # 12, Flat # A4, Road # 07, Block # H, Banani TSO1213, Gulshan, Dhaka House No. 05, Bijoy Nagar, Dhaka GPO, Ramna. Dhaka Meghna A/32, Mirzajangal, Sylhet3100 Flat # 501, 151/B, Shantinagar Bazar Road, Dhaka 314/1, Ulon Road, West Rampura, Khigaon, Dhaka /1, Ulon Road, West Rampura, Khigaon, Dhaka1219 House # 3/502, Eastern Peace, 30Shantinagar Peer Shahabar Goli, Shantinagar, Dhaka House # 3/502, Eastern Peace, 30Shantinagar Peer Shahabar Goli, Shantinagar, Dhaka Shareholder 420, % Shareholder 105, % Shareholder 63, % Shareholder 52, % Shareholder 105, % Shareholder 100, % Shareholder 525, % Shareholder 210, % Total 99,225, % 105

108 Name and address, age, experience, BO ID Number, TIN number, numbers of shares held including percentage, position held in other companies of all the directors before the public issue: Name, Address, Age, Experience BO ID Number TIN NO. Numbers of Shares Held Including Percentage Position Held in Other Companies Faisal Ahmed Chowdhury Address: 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Age: 47 Years Experience: 26 Years Number of Share Held:2,976,750 Percentage:3.00% Baraka Power Limited Karnaphuli Power Limited Baraka Shikalbaha Power Limited Royal Homes Limited Royal Educare Limited Baraka Fashions Limited Baraka Apparels Limited Chairman Chairman Chairman Chairman Chairman Chairman Chairman Baraka Power Limited Managing Director Gulam Rabbani Chowdhury Address: 48Sagardighir Par, West Subid Bazar, Sylhet Age: 51 Years Experience: 33 Years Number of Share Held: 2,976,750 Percentage: 3.00% Karnaphuli Power Limited Baraka Shikalbaha Power Limited Baraka Fashions Limited Baraka Apparels Limited Royal Homes Limited Royal Educare Limited Queens Healthcare Limited Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director Chairman Brothers Machinery Partner Fahim Ahmed Chowdhury Address: 2Nirjor, Lovely Road, West Subid Bazar, Sylhet Age: 43 Years Experience: 16 Years Number of Share Held: 850,500 Percentage: 0.86% Royal Homes Limited Baraka Apparels Limited Baraka Fashions Limited Royal Educare Limited Queens Healthcare Limited Baraka Shikalbaha Power Limited Karnaphuli Power Limited Director Director Director Director Managing Director Director Director Monzur Kadir Shafi Address: 28/B Anamika, Shahi Eidgoan, Sylhet Age: 45 Years Experience: 19 Years Number of Share Held: 1,575,000 Percentage: 1.59% Royal Homes Limited Baraka Apparels Limited Baraka Fashions Limited Queens Healthcare Limited Baraka Shikalbaha Power Limited Karnaphuli Power Limited Director Director Director Director Director Director Md. Shirajul Islam Address: House # 40, Road # 3, Block # E, Shahjalal Uposhahor, Sylhet Age: 63 Years Number of Share Held: 1,050,000 Percentage: 1.06% Baraka Apparels Limited Baraka Fashions Limited Director Director Experience: 27 Years 106 REDHERRING PROSPECTUS

109 REDHERRING PROSPECTUS Afzal Rashid Chowdhury Address: Rashid House Digonto26, Amberkhana, Sylhet Age: 48 Years Experience: 20 Years Number of Share Held: 1,050,000 Percentage: 1.06% Karnaphuli Power Limited Director Baraka Shikalbaha Power Limited Director Queens Healthcare Limited Director BlueBird Auto Partner Nina Afzal Industries Limited Managing Director Balisera Hill Tea Co. Limited Managing Director A. R. Properties Proprietor Engr. Jalal Uddin Ahmed Chowdhury Karnaphuli Power Limited Independent Director Address: 8/4, Nilkhet, Babupara, Flat No. 9A, DSA Tower, Dhaka Age: 62 Years Number of Share Held: Nil Percentage: Nil Saif Powertec Limited Independent Director Experience: 40 Years Baraka Shikalbaha Power Limited Independent Director Mr. Helal Ahmed Chowdhury Baraka Power Limited Independent Director Address: FlatW5, House # 78. Road No. 18, Block A, Banani, Dhaka Number of Share Held: Nil Percentage: Nil Islami Bank Bangladesh Limited Independent Director Age: 68 Years Experience: 41 Years Note: The Issuer has taken the permission from Ministry of Commerce regarding appointment of Managing Director in more than one Company as per Section 109 of The Companies Act, 1994 except Karnaphuli Power Limited, Baraka Shikalbaha Power Limited & Baraka Fashions Limited which is under process. 107

110 A detail description of capital built up in respect of shareholding (namewise) of the issuer s sponsors/ directors. In this connection, a statement to be included: Baraka Power Limited (Represented by Faisal Ahmed Chowdhury, Gulam Rabbani Chowdhury, Fahim Ahmed Chowdhury, Monzur Kadir Shafi, Md. Shirajul Islam, Afzal Rashid Chowdhury & Helal Ahmed Chowdhury) Date of Allotment/ Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value Issue Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % preissue paid up capital % Post issue paid up capital Sources of fund 7Jun14 (Subscription to the MoA) 30Apr14 Cash Cash Ordinary Shares Ordinary Shares 51, ,000 48,144, ,195, % [ ] Own Sources 2Jan17 Other than Cash Bonus Shares 2,409, ,604,750 Mr. Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Date of Allotment/ Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value Issue Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % preissue paid up capital % Post issue paid up capital Sources of fund 7Jun14 (Subscription to the MoA) 30Apr14 Cash Cash Ordinary Shares Ordinary Shares 24, ,500 2,810, ,835, % [ ] Own Sources 2Jan17 Other than Cash Bonus Shares 141, ,976,750 Mr. Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited) Date of Allotment/ Transfer of fully paidup shares Consideration Nature issue of No of Equity shares Face value Issue Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % pre issue paid up capital % Post issue paid up capital Sources fund of 7Jun14 (Subscription to the MoA) Cash Ordinary Shares 24, ,500 30Apr14 1Jun15 Cash Cash Ordinary Shares Ordinary Shares 3,700, ,725,000 (890,000) ,835, % [ ] Own Sources 2Jan17 Other than Cash Bonus Shares 141, ,976, REDHERRING PROSPECTUS

111 REDHERRING PROSPECTUS Mr. Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Date of Allotment/Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value I s s u e Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % pre issue paid up capital % Post i s s u e paid up capital Sources of fund 30Apr14 Cash Ordinary Shares 1,410, ,410,000 1Jun15 Cash Ordinary Shares (600,000) , % [ ] Own Sources 2Jan17 Other than Cash Bonus Shares 40, ,500 Mr. Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) Date of Allotment/Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value I s s u e Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % pre issue paid up capital % Post i s s u e paid up capital Sources of fund 30Apr14 Cash Ordinary Shares 1,700, ,700,000 1Jun15 Cash Ordinary Shares (200,000) ,500, % [ ] Own Sources 2Jan17 Other than Cash Bonus Shares 75, ,575,000 Mr. Md. Shirajul Islam (Nominated Director by Baraka Power Limited) Date of Allotment/Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value I s s u e Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % pre issue paid up capital % Post i s s u e paid up capital Sources of fund 30Apr14 2Jan17 Cash Other than Cash Ordinary Shares Bonus Shares 1,000, ,000,000 50, ,050, % [ ] Own Sources Mr. Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) Date of Allotment/Transfer of fully paidup shares Consideration Nature of issue No of Equity shares Face value I s s u e Price/ Acquisition Price/ Transfer Prices Cumulative no. of Equity shares % pre issue paid up capital % Post issue paid up capital Sources of fund 30Apr14 2Jan17 Cash Other than Cash Ordinary Shares Bonus Shares 1,000, ,000,000 50, ,050, % [ ] Own Sources 109

112 Detail of shares issued by the company at a price lower than the issue price: The above mentioned required information will be furnished after determination of the cutoff price. History of significant (5% or more) changes in ownership of securities from inception: Date of Allotment / Transfer 7Jun14 (Subscription to the MoA) Baraka Power Limited (Represented by Faisal Ahmed Chowdhury, Gulam Rabbani Chowdhury Fahim Ahmed Chowdhury, Monzur Kadir Shafi, Md. Shirajul Islam & Afzal Rashid Chowdhury) Faisal Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Gulam Rabbani Chowdhury (Nominated Director by Baraka Power Limited) Fahim Ahmed Chowdhury (Nominated Director by Baraka Power Limited) Monzur Kadir Shafi (Nominated Director by Baraka Power Limited) Md. Shirajul Islam (Nominated Director by Baraka Power Limited) Afzal Rashid Chowdhury (Nominated Director by Baraka Power Limited) 51,000 24,500 24,500 30Apr14 48,144,000 2,810,500 3,700,500 1,410,000 1,700,000 1,000,000 1,000,000 1Jun15 (890,000) (600,000) (200,000) 2Jan17 2,409, , ,750 40,500 75,000 50,000 50, REDHERRING PROSPECTUS

113 REDHERRING PROSPECTUS SECTION: XIV CORPORATE GOVERNANCE 111

114 A disclosure to the effect that the issuer has complied with the requirements of Corporate Governance Guidelines of the Commission: MANAGEMENT DISCLOSURE REGARDING COMPLIANCE WITH THE REQUIREMENTS OF CORPORATE GOVERNANCE GUIDELINES OF BANGLADESH SECURITIES AND EXCHANGE COMMISSION The Company declare that it is in compliance with the requirements of the applicable regulations of Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission in respect of corporate governance including constitution of the Board and committees thereof. A compliance report of Corporate Governance requirements certified by competent authority: Certificate of compliance of corporate governance guidelines to the shareholders of Baraka Patenga Power Ltd. We have examined the compliance of the conditions of corporate governance guidelines of the Bangladesh Securities and Exchange Commission (BSEC) by Baraka Patenga Power Limited for the six months period ended on 31 st December 2017 as stipulated in clause 7(i) of the BSEC notification no. SEC/CMRRCD/ /Admin/44 dated August 07, The compliance of the conditions of corporate governance guidelines as stated in the aforesaid notification and reporting of the status of compliance is the responsibility of the management of Baraka Patenga Power Limited. Our examination for the purpose of issuing this certification was limited to the checking the procedure and implementation thereof, adopted by Baraka Patenga Power Limited for ensuring the compliance of conditions of corporate governance and correct reporting of compliance status on the attached statement on the basis of evidence gathered and representation received. To the best of our information and according to the explanations given to us, we certify that, as reported on the attached status of compliance statement, Baraka Patenga Power Limited has complied with condition of corporate governance stipulated in the above mentioned BSEC notification dated August 07, Dated: Dhaka March 13, 2018 Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Malek Siddiqui Wali Chartered Accountants 112 REDHERRING PROSPECTUS

115 REDHERRING PROSPECTUS Baraka Patenga Power Limited Status of Compliance with the Corporate Governance Guideline (CGC) For the six months period ended 31st December 2017 Status of compliance with the condition imposed by the Commission s Notification No. letter SEC/CMRRCD/ /134/Admin/44, dated 07 August, 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969 (Report under Condition No. 7.00) Condition No. Title Complied Not Complied Remarks (IF ANY) 1 Board of Directors 1.1 Boards size The number of the board members of the company shall not be less than 5 (five) and more than 20 (twenty). The Board is comprised of 08 Directors including Managing Director. 1.2 Independent Directors (i) At least one fifth (1/5) of the total number of directors in the company s board shall be independent directors. 02 out of 08 directors are appointed as Independent Director (ii) For the purpose of this clause Independent directors means a directora) Who either does not hold any share in the company or holds less than one percent (1%) shares of the total paidup shares of the company; b) Who is not a sponsor of the company and is not connected with the company s any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paidup shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company : c) Who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/ associated companies; d) Who is not a member, director, or officer of any stock exchange; e) f) g) h) i) (iii) (iv) (v) Who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market; Who is not a partner or an executive or was not a Partner or an executive during the preceding 3 (three) years of the concerned company s statutory audit firm; Who shall not be an independent director in more than 3 (three) listed companies; Who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a NonBank Financial Institution (NBFI); Who has not been convicted for a criminal offence involving moral turpitude. The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting (AGM). The post of independent director(s) can not remain vacant for more than 90(ninety) days. The Board shall lay down a code of conduct of all Board members and annual compliance of the code to be recorded. 113

116 (vi) The tenure of office of an independent director shall be for a period of 3(three) years, which may be extended for 1(one) term only. 1.3 Qualification of Independent Director (ID) (i) Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business. (ii) The person should be a Business Leader/ Corporate Leader/ Bureaucrat/University Teacher with Economics or Business Studies or Law background/professionals like Chartered Accountants, Cost & Management Accountants and Chartered Secretaries. The independent director must have a least 12(twelve) years of corporate management /professional experiences. (iii) In special cases the above qualifications may be relaxed subject to prior approval of the Commission. 1.4 Chairman of the Board and Chief Executive Officer N/A Not Applicable (i) The position of the Chairman of the Board and the Chief Executive Officer of the companies shall be filled by different individuals. The Chairman of the company shall be elected from among the Directors of the company. The Board of Directors shall clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer. Different Persons hold the positions with specific responsibilities set by the Board. 1.5 Directors Report to the Shareholders (i) Industry outlook and possible future developments in the industry. (ii) Segmentwise or productwise performance. (iii) Risks and concerns. (iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin. (v) Discussion on continuity of any ExtraOrdinary gain or loss. N/A Not Applicable (vi) Basis for related party transactionsa statement of all related party transactions should be disclosed in the annual report. (vii) Utilization of proceeds from public issues, rights issues and/or through any others instruments. N/A Not Applicable (viii) An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IP0), Repeat Public Offering (RPO). Rights Offer, Direct Listing, etc. N/A Not Applicable (ix) If significant variance occurs between Quarterly Financial Performance and Annual Financial Statements the management shall explain about the variance on their Annual Report. N/A Not Applicable (x) Remuneration to directors including independent directors. (xi) (xii) The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity. Proper books of account of the issuer company have been maintained. 114 REDHERRING PROSPECTUS

117 REDHERRING PROSPECTUS (xiii) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. (xiv) International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standard (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure therefrom has been adequately disclosed. (xv) The system of internal control is sound in design and has been effectively implemented and monitored. (xvi) There are no significant doubts upon the issuer company s ability to continue as a going concern. If the issuer company is not considerer to be a going concern, the fact along with reasons thereof should be disclosed. (xvii) Significant deviations from the last year s operating results of the issuer company shall be highlighted and the reasons thereof should be explained. (xviii) Key operating and financial data of at least preceding 5 (five) years shall be summarized. (xix) if the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given. The Company has declared 20% Cash dividend. (xx) The number of Board meetings held during the year and attendance by each director shall be disclosed. (xxi) The Pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by: (xxi) a) Parent/Subsidiary/Associated Companies and other related parties (name wise details); (xxi) b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details); (xxi) c) Executives; Not Applicable (xxi) d) (xxii) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details). In case of the appointment/reappointment of a director the company shall disclose the following information to the shareholders: (xxii) a) a brief resume of the director (xxii) b) nature of his/her expertise in specific functional areas; (xxii) c) Names of companies in which the person also holds the directorship and the membership of committees of the board. 2.0 Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS) 2.1 Appointment The company shall Appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of internal Audit and the CS. Employed separate CFO, CS and Head of Internal Audit under Operational, Maintenance, Administrative and Financial Management Services Agreement. 115

118 2.2 Requirement to attend the Board Meetings The CFO and the Company Secretary of the companies shall attend the meetings of the Board of Directors, provided that the CFO and/or the Company Secretary shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to their personal matters. In practice 3.0 Audit Committee (i) The company shall have an Audit Committee as a subcommittee of the Board of Directors. Already in place (ii) The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business. In practice (iii) The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall he clearly set forth in writing 3.1 Constitution of the Audit Committee (i) The Audit Committee shall be composed of at least 3 (three) members. (ii) The Board of Directors shall appoint members of the audit committee who shall be directors of the company and shall include at least 1 (one) independent director. In practice (iii) All members of the audit committee should be financially literate and at least 1 (one) member shall have accounting or related financial management experience, The term Financially literate means the ability to read and understand the financial statements i.e. Balance Sheet, Income Statement and Cash Flow Statement and a person will be considered to have accounting or related financial management expertise if (s)he possesses professional qualification or Accounting/finance graduate with at least 12( twelve) years of corporate management/ professional experiences. (iv) When the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy(ies) in the Committee to ensure continuity of the performance of work of the Audit Committee. No such Incidence arose (v) The company secretary shall act as the secretary of the Committee. (vi) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director. 3.2 Chairman of the Audit Committee (i) The Board of Directors shall select 1 (one) member of the Audit Committee to be Chairman of the Audit Committee, who shall be an independent director. (ii) Chairman of the Audit Committee shall remain present in the Annual General Meeting (AGM). 3.3 Role of Audit Committee In practice In practice 116 REDHERRING PROSPECTUS

119 REDHERRING PROSPECTUS (i) Oversee the financial reporting process. (ii) Monitor choice of accounting policies and principles. (iii) Monitor Internal Control Risk management process. (iv) Oversee hiring and performance of external auditors. (v) (vi) Review along with the management, the annual financial statements before submission to the board for approval. Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval. (vii) Review the adequacy of internal audit function. (viii) Review statement of significant related party transactions submitted by the management. (ix) Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors. (x) When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus. N/A Not Applicable 3.4 Reporting of Audit Committee (i) The Audit Committee shall report on its activities to the Board of Directors. (ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any: (ii) a) report on conflicts of interests; No such Incidence arose b) suspected or presumed fraud or irregularity or material defect in the internal control system; No such Incidence arose c) d) suspected infringement of laws, including securities related laws, rules and regulations; any other matter which shall be disclosed to the Board of Directors immediately. No such Incidence arose No such Incidence arose Reporting to the Authorities If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board of Directors for three times or completion of a period of 6 (six) months from the date of first reporting to the Board of Directors, whichever is earlier. No such reportable incidence arose 3.5 Reporting to the Shareholders and General Investors Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition (ii) above during the year, shall be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company. 4 External/ Statutory Auditors The issuer company should not engage its external/statutory auditors to perform the following services of the company; namely: (i) Appraisal or valuation services or fairness opinions. 117

120 (ii) Financial information system design and implementation. (iii) Bookkeeping or other services related to the accounting records or financial statement. (iv) Broker dealer services. (v) Actuarial services. (vi) Internal audit services. (vii) Any other services that the audit committee determines. (viii) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company. Audit/ Certification services on compliance of corporate governance as required under clause (i) of condition No. 7 (ix) 5 Subsidiary Company (i) Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company. (ii) (iii) (iv) (v) At least 1 (one) independent director of the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company. The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company. The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also. The Audit Committee of the holding company shall also review the financial statements, in particular, the investments made by the subsidiary company. Duties of Chief Executive Officer (CEO) and Chief Financial Officer(CFO) 6.0 The CEO and CFO shall certify to the Board that: They have reviewed financial statements for the year and that to (i) the best of their knowledge and belief: a) b) (ii) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the company s affairs and are in compliance with existing accounting standards and applicable laws. There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent illegal or violation of the company s code of conduct. In practice In practice 7.0 Reporting and Compliance of Corporate Governance (i) The company shall obtain a certificate from a practicing Professional Accountant/Secretary (Chartered Accountant/Cost and Management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis. Required certification has been obtained from Malek Siddiqui Wali Chartered Accountants for the six months period ended 31st December (ii) The directors of the company shall state, in accordance with the Annexure attached, in the directors report whether the company has complied with these conditions. N/A To be stated in the next directors report to be presented on 08th AGM of the Company. 118 REDHERRING PROSPECTUS

121 REDHERRING PROSPECTUS Details relating to the issuer s audit committee and remuneration committee, including the names of committee members and a summary of the terms of reference under which the committees operate: Audit Committee: In accordance with the Corporate Governance Guidelines adopted by Bangladesh Securities and Exchange Commission (BSEC), the Board appointed Audit Committee comprises of the following NonExecutive and Independent Directors of the Company: Sl. Name of Committee member Designation 1 Mr. Helal Ahmed Chowdhury Chairman 2 Mr. Monzur Kadir Shafi Member 3 Mr. Mohammad Rana Member Secretary Terms of Reference of Audit Committee: The main objective of the Audit Committee is to assist the Board of Directors to effectively carry on its responsibilities relating to financial and other relevant affairs of the Company. The Committee is empowered to monitor, review and examine the followings: Oversee the financial reporting process; Monitor implementation/ following the accounting policies and principles; Monitor Internal Control Risk Management Process; Oversee hiring and performance of external auditors; Review along with the management, the Annual Financial Statements before submission to the Board for approval; Review along with the management, the Quarterly and Half Yearly Financial Statements before submission to the Board for approval; Review the adequacy of Internal Audit team performance in terms of internal audit report; Review statement of significant related party transactions submitted by the management; Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors; When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue, the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc.), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus. 119

122 Remuneration Committee: Sl. Name of Committee member Designation 1 Mr. Gulam Rabbani Chowdhury Chairman 2 Mr. Monzur Kadir Shafi Member 3 Mr. Fahim Ahmed Chowdhury Member 4 Mr. Mohammad Rana Member Secretary The Board appointed Remuneration Committee comprises of the following members: Terms of Reference of Remuneration Committee: The Remuneration Committee has been established to assist the Board in developing and administering a fair and transparent procedure for setting policy on the remuneration of directors and senior management of the Company and for determining their remuneration packages and to review and oversee the Company s overall human resources strategy. The Committee is empowered to perform, monitor, review and examine the followings: Determine the remuneration of the Company s Chief Executive Officer, the Chairman, the Executive Directors and the Company Secretary; Review the ongoing appropriateness and relevance of the remuneration policy; Approve the design of, and determine targets for any performance related schemes and annual payments made under such schemes; Review the design of all new longterm schemes and significant changes to such schemes for approval, in each case, by the Board and shareholders. Determine the total individual remuneration package of each Executive Director, the Company Secretary and the Chairman including bonuses, incentive payments and any compensation payments; Monitor the level and structure of remuneration for senior management; Oversee any major changes in employee benefits structures throughout the Company or the Group; Review the policy for authorizing claims for expenses from the Chief Executive Officer and the Chairman; Ensure that all provisions regarding disclosure of remuneration; Review of the Remuneration Committee s performance; Review of and proposed amendment to the terms of reference; Approval of the Directors remuneration report Be responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Remuneration Committee; and Obtain reliable, uptodate information about remuneration in other companies, with a view to judging where to position the Company relative to other companies. The Remuneration Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations. 120 REDHERRING PROSPECTUS

123 REDHERRING PROSPECTUS SECTION: XV VALUATION REPORT OF SECURITIES PREPARED BY THE ISSUE MANAGER 121

124 The valuation report of securities shall be prepared on the basis of the financial and all other information pertinent to the issue. The fair value is determined under different valuation methods referred in Rule No. 4(2)(a)(i) and AnnexureE(B)(14) of Bangladesh Securities and Exchange Commission (Public Issue) Rules, We have covered both the Qualitative Factors and the Quantitative Factors while determining the fair value of securities. Qualitative Factors: i. Baraka Patenga Power Limited (BPPL) is one of the leading business conglomerates in Bangladesh. It has established a strong ground in Power generation industry over the last couple years. To mitigate the existing gap between demand and supply in power sector, BPPL has been successfully adding efficient power plants in the business streams since its first dawn. ii. iii. Government of Bangladesh (GOB) in its Power System Master PlanPSMP (2016) has expected to reach 24,000 MW by 2021, to facilitate every fellow countrymen with electricity for which GOB encourages private sectors to have their footprints in the journey of socioeconomic development of the country. Considering the business potentials, corporate tax & import subsidies and other government patronizations, BPPL has put their focus in this line of business and become one of major power produces within our national territory. Baraka Patenga Power Limited (BPPL) is a state of the art power generation company which is built by all top of the line engineering machineries. It s a 50 MW HFO fired IPP power plant is situated at Patenga, Chittagong on a land size of 3 acres. BPPL signed a power purchase agreement with Bangladesh Power Development Board which will run on Build, Own & Operate (BOO) basis for 15 years. It went operational on May iv. The Existing 50 MW plant of BPPL has been operating by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been operating successfully throughout the year. The STG (Steam Turbine Generator) plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and reduce the fuel cost. This is the in power sector, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level making the power plant ecofriendly. v. After being successful in two power ventures, BPPL has moved to another HFO based power plants namely, Karnaphuli Power Limited (110 MW) and Baraka Shikalbaha Power Limited (105 MW). Karnaphuli Power Limited (110 MW) IPP power plant has already obtained Letter of Intent (LOI) from Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) where type of agreement in BuildOwnOperate (BOO) basis. vi. vii. Baraka Shikalbaha Power Limited which is a (105 MW) IPP power plant on BOO basis is expected to receive Letter of Intent (LOI) after getting final wave from MPEMR. Government expected to generate 52,000 MW electricity by 2041PSMP (2016) when we are going to celebrate our consistent endeavor to achieve the honor of a developed nation. BPPL wants to be a part of this glorious moment for which it has been heavily investing in power plants since its inception to shed light in every corner of Bangladesh and become a part of our country s economic growth saga. Quantitative Factors: Fair value of securities is determined under different valuation methods as referred in Rule No. 4(2)(a)(i) and AnnexureE(B)(14) and of Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015: Sl. No. Valuation Methods Fair Value (BDT) Method1 Net Asset value (NAV) per share Method2(A) Earningbased value per share (Considering Avg. Sector P/E) Method2(B) Earningbased value per share (Considering Avg. Market P/E) Method3 Average Market Price of Similar Stocks Based Valuation Method4 P/BV multiple of Similar Stocks Based Valuation Method5 P/E multiple of Similar Stocks Based Valuation REDHERRING PROSPECTUS

125 REDHERRING PROSPECTUS METHOD 1: VALUATION WITH REFERENCE TO NET ASSET VALUE (NAV) PER SHARE WITH REVALUATION RESERVE NAV per share is based on the information of the latest audited consolidated financial statements as on June 30, NAV per share with revaluation reserve is BDT that has been derived by dividing the net assets at the end of the period by the number of outstanding shares as shown in the table below: NAV per share is based on the information of the latest audited consolidated financial statements as on December 31, NAV per share with revaluation reserve is BDT that has been derived by dividing the net assets at the end of the period by the number of outstanding shares as shown in the table below: Particulars Amount in BDT Share capital 992,250,000 Fair Value reserve (699,817) Retained earnings 762,162,143 Shareholders Equity of Parent (A) 1,753,712,326 NonControlling Interest (1,557,231) Total Equity 1,752,155,095 Number of Shares Outstanding as on December 31, 2017 (B) 99,225,000 Net Asset value (NAV) per share (A/B) Source: Audited Accounts (JulDec, 2017) 123

126 METHOD 2(A): VALUATION WITH REFERENCE TO EARNINGBASEDVALUE PER SHARE (CONSIDERING AVERAGE SECTOR P/E) Earningbasedvalue per share based on historical information sourced from audited consolidated financial statements and Fuel & Power Sector P/E data from Dhaka Stock Exchange Limited (DSE). The value was calculated by considering weighted net profit after tax for last 5.50 (five and a half) years as per audited financial statements and sectorial earnings multiple. The weighted average Earnings per share (EPS) is BDT 2.46 and the 12 months average DSE Fuel & Power Sector P/E is Therefore, Earningbasedvalue per share has been derived as BDT (Amount in BDT) Accounting Year (JulJun) No. of Shares Weight of No. of Shares Net Profit After Tax (BDT) Weighted Net Profit After Tax (BDT) ,357, (6,631,381) (258,171) ,357, ,716,021 2,402, ,500, ,009,787 66,126, ,500, ,489,378 64,434, ,225, ,471,888 74,973,181 JulDec 2017 (Half Yearly) 99,225, ,909,088 36,110,538 Weighted Average Net Profit After Tax during the period [ to JulDec 2017 (Half Yearly)] 243,789,107 No. of shares outstanding as on June 30, 2017 [H] 99,225,000 Weighted Average Earnings per Share (EPS) [I = G/H] months average DSE Fuel & Power Sector P/E 1 [F] Earningbasedvalue per share (BDT) [E F] Source: Audited Accounts [ to JulDec, 2017 (HY)] 1 Calculation of Relevant Sector P/E Multiple: Nature of business of Baraka Patenga Power limited (BPPL) is similar to the business of companies listed in stock exchanges under Fuel & Power Sector. So, we have consider the 12 months average sector P/E multiple to determine the earningbasedvalue per share. Month Sector P/E 31Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average Source: Dhaka Stock Exchange Limited 124 REDHERRING PROSPECTUS

127 REDHERRING PROSPECTUS METHOD 2(B): VALUATION WITH REFERENCE TO EARNINGBASEDVALUE PER SHARE (CONSIDERING AVERAGE MARKET P/E) Earningbasedvalue per share based on historical information sourced from audited financial statements and statistics from Dhaka Stock Exchange Limited (DSE). The value was calculated by considering weighted net profit after tax for last 5.50 (five and a half) years as per audited financial statements and market earnings multiple. The weighted average Earnings per share (EPS) is BDT 2.46 and the 12 months average DSE Market P/E is Therefore, Earningbasedvalue per share has been derived as BDT (Amount in BDT) Accounting Year (JulJun) No. of Shares Weight of No. of Shares Net Profit After Tax (BDT) Weighted Net Profit After Tax (BDT) ,357, (6,631,381) (258,171) ,357, ,716,021 2,402, ,500, ,009,787 66,126, ,500, ,489,378 64,434, ,225, ,471,888 74,973,181 JulDec 2017 (Half Yearly) 99,225, ,909,088 36,110,538 Weighted Average Net Profit After Tax during the period period [ to (Half Yearly) [G] 243,789,107 No. of shares outstanding as on December 31, 2017 [H] 99,225,000 Weighted Average Earnings per Share (EPS) [I = G/H] months average DSE Market P/E 2 [J] Earningbasedvalue per share (BDT) [I J] Source: Audited Accounts [ to JulDec, 2017 (HY)] 2 Calculation of Relevant Market P/E Multiple: Month Market P/E 31Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average Source: Dhaka Stock Exchange Limited 125

128 METHOD 3: VALUATION WITH REFERENCE TO AVERAGE MARKET PRICE PER SHARE OF SIMILAR STOCKS For similar stocks, we have considered the comparable companies listed with Dhaka Stock Exchange in Fuel & Power Sector and having more than BDT 2,000 million Total Assets. Peer Companies of BPPL: (Amount in BDT) Company Name Turnover (BDT M.) Paid up capital (BDT M.) Total Assets (BDT M.) NAV per share Baraka Power Limited 3, , , Doreen Power Generations and Systems Ltd. 5, , GBB Power Ltd , Khulna Power Company Limited 10, , , Summit Power Limited 16, , , United Power Generation & Distribution Ltd. 5, , , Shahjibazar Power Co. Ltd. 8, , , N.B. (M= Million) Reference: 1. The Companies considered as peers of BPPL are listed in the Stock Exchanges of Bangladesh, which are Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. 2. We have considered the companies listed under Fuel and Power Sector to make the comparison relevant and justifiable. 3. Data considered in case of peers is taken from Dhaka Stock exchange Limited and latest published annual financial statements, available till January, Explanation of similarities: 1. Companies having similar nature of business, associated return opportunities and exposure of business risks are considered; 2. We have considered those companies as peer having yearly turnover between BDT 500 and 18,000 (m) 3. We have considered peer firms paidup capital ranging from BDT 950 to 12,000 million. 4. Companies with total assets exceeding 2,000 million are selected as peers. 5. Companies that regularly publish audited financial statements are considered. 6. Companies regularly pay dividends are considered. 7. Companies having Market Category A are considered. 1 year average Close Price of Similar Stocks EPS Listed Peers (Amount in BDT) Date Baraka Power 1 Doreen Power 2 GBB Power Khulna Power 4 Summit Power 5 United Power 6 Shahjibazar Power 7 Mar Apr May Jun Jul Aug Sep Oct Nov Dec REDHERRING PROSPECTUS

129 REDHERRING PROSPECTUS Jan Feb Average Cumulative Average Source: Dhaka Stock Exchange Limited Baraka Power 1 Baraka Power Limited Doreen Power 2 Doreen Power Generations and Systems Ltd. GBB Power 3 Khulna Power 4 Summit Power 5 United Power 6 GBB Power Ltd Khulna Power Company Limited Summit Power Limited United Power Generation & Distribution Ltd. Shahjibazar Power 7 Shahjibazar Power Co. Ltd. METHOD 4: VALUATION WITH REFERENCE TO P/BV MULTIPLE OF SIMILAR STOCKS The average month end close price of similar stocks from March 2017 to February 2018 and Net Asset Value based on audited financial statements available till January 2018 have been considered. The Companies having more than 2,000 million total assets and 950 million paidup capital are considered. (Amount in BDT) Sl. No. Similar Stocks Closing Price (P) Net Asset Value P/BV 1. Baraka Power Limited Doreen Power Generations and Systems Ltd GBB Power Ltd Khulna Power Company Limited Summit Power Limited United Power Generation & Distribution Ltd Shahjibazar Power Co. Ltd Average P/BV (k) 2.58 NAV per share of Baraka Patenga Power Limited as on December 31, 2017 (l) Fair value based on P/BV multiple of similar stocks (BDT) [k l] Source: Dhaka Stock Exchange Limited & Latest Audited Accounts 127

130 METHOD 5: VALUATION WITH REFERENCE TO P/E MULTIPLE OF SIMILAR STOCKS The average month end close price of similar stocks from March 2017 to February 2018, having positive earnings per share as per the latest audited financial statements have been considered. The Companies having more than 500 million turnover have been considered. (Amount in BDT) Sl. No. Similar Stocks Closing Price EPS P/E 1. Baraka Power Limited Doreen Power Generations and Systems Ltd GBB Power Ltd Khulna Power Company Limited Summit Power Limited United Power Generation & Distribution Ltd Shahjibazar Power Co. Ltd Average P/E (m) years weighted average earnings per share of Baraka Patenga Power Limited (n) 2.46 Fair value based on P/BV multiple of similar stocks (BDT) [m n] Source: Dhaka Stock Exchange Limited & Latest Audited Accounts Conclusion: The fair value of Baraka Patenga Power Limited under different valuation methods is determined considering the current performance of the Company, performance compared with similar stocks listed in stock exchanges and risk aspects of the Company. 128 REDHERRING PROSPECTUS

131 REDHERRING PROSPECTUS SECTION: XVI DEBT SECURITIES 129

132 Debt Securities Baraka Patenga Power limited has neither issued any Debt Securities in the past, nor is planning to issue any Debt Securities within the next 6 (six) months. 130 REDHERRING PROSPECTUS

133 REDHERRING PROSPECTUS SECTION: XVII PARTIES INVOLVED AND THEIR RESPONSIBILITIES 131

134 Major Parties Involved Responsibilities of the Parties Issue Manager Auditors LankaBangla Investments Limited Kazi Zahir Khan & Co. Chartered Accountants The ISSUE MANAGER(s) is responsible to comply with all the requirements as per Bangladesh Securities and Exchange Commission (Public Issue) Rules 2015 including preparation and disclosures made in the prospectus, Roadshow and other responsibilities as mentioned in the due diligence certificate. Auditors responsibility is to express an opinion on the consolidated financial statements based on the audit. Auditors conducted the audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards required to comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Credit rating Company Credit Rating Agency of Bangladesh Ltd. Credit rating Company is responsible for Examination, preparation, finalization and issuance of credit rating report without compromising with the matters of their conflict of interest and Compliance with all the requirements, policy and procedures of the rules as prescribed by BSEC. Valuer Coast & Management Accounts N/A N/A 132 REDHERRING PROSPECTUS

135 REDHERRING PROSPECTUS SECTION: XVIII MATERIAL CONTRACTS 133

136 Major agreements entered into by the issuer: The following are material agreements have been entered into by the Company: 1. Issue Management Agreement between the Company and LankaBangla Investments Limited; 2. Registrar to the Issue Agreement between the Company and UNICAP Investments Limited. 3. Credit Rating Agreement with Credit Rating Agency of Bangladesh Ltd. 134 REDHERRING PROSPECTUS

137 REDHERRING PROSPECTUS SECTION: XIX OUTSTANDING LITIGATIONS, FINE OR PENALTY 135

138 The following outstanding litigations against the issuer or any of its directors and fine or penalty imposed by any authority: The Issuer or directors of BPPL was not involved in any of the following types of legal proceedings except the mentioned below: Litigation involving Civil Laws : Litigation involving Criminal Laws : Litigation involving Securities, Finance and Economic Laws Litigation involving Labor Laws : Litigation involving Taxation (Income tax, VAT, Customs Duty and any other taxes/duties) : : There is no conviction of the Issuer or any of its director(s) in a civil proceeding There is no conviction of the Issuer or any of its director(s) in a criminal proceeding There is no order, judgment or decree of any court of competent jurisdiction against the Issuer or any of its director(s) permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director(s) or officer in any type of securities, Finance and Economic laws There is no conviction of the Issuer or any of its director(s) in connection to applicable Labor Laws There is no conviction of the Issuer or any of its director(s) in connection to taxation (Income tax, VAT, Customs Duty and any other taxes/duties) Litigation involving any other Laws : There is no litigation involving any other Laws Cases including Outstanding cases filed by the Company or any of its directors: There is no outstanding cases filed by the Issuer or any of its directors to any of the following types of legal proceedings mentioned below: Litigation involving Civil Laws : There is no litigation involving Civil Laws Litigation involving Criminal Laws : There is no litigation involving Criminal Laws Litigation involving Securities, Finance and Economic Laws : There is no litigation involving Securities, Finance and Economic Laws Litigation involving Labor Laws : There is no litigation involving Labor Laws Litigation involving Taxation (Income tax, VAT, Customs Duty and any other taxes/duties) : There is no litigation involving Taxation (Income tax, VAT, Customs Duty and any other taxes/duties) Litigation involving any other Laws : There is no litigation involving any other Laws 136 REDHERRING PROSPECTUS

139 REDHERRING PROSPECTUS SECTION: XX RISK FACTORS AND MANAGEMENT S PERCEPTIONS ABOUT THE RISKS 137

140 The factors described below may conceivably materially affect investors decisions as investment in equity shares involves a high degree of risk. The company is operating in a globally competitive industry involving both external and internal factors having direct as well as indirect effects on the investments. Investors should carefully consider all of the information in this prospectus, including the risk factors, both external and internal, and management perceptions enumerated hereunder before making investment decision. If any of the following risks actually occur, their business, results of operations and financial condition could suffer, the trading price of their equity share could decline, and investors may lose all or part of their investment. I. Internal Risk Factors: a) Credit Risk: Credit risk refers to the risk that a borrower or debtor may not repay a loan/ debt and that the lender may lose to principal of the loan or the interest associated with it. It s the risk of loss of principal or a financial reward or both stemming from a borrower s failure to repay a loan or otherwise meet a contractual obligation. Credit risk arises as borrowers expect to use future cash flows, which is always uncertain, to pay current debts. Normally every business has to allow some credit/ fund to its customers or others. When an entity offers credit to its clients, there is a risk that its clients may not pay their debt. So, in operating any business there is always credit risk lies in the business. Management Perception: The Company s sales are made solely to Bangladesh Power Development Board under the stipulated conditions prescribed in the Power Purchase Agreement (PPA) and subsequently the receivables were realized at the next month. Therefore, no credit risk arises in terms of sales revenue. b) Liquidity Risk: The risk that a company may be unable to meet short term financial obligation. This usually occurs due to the inability to convert its current assets to cash without a loss of capital or income in a given period of time. A company is exposed to liquidity risk if markets on which it depends are subject to loss of liquidity. When credit rating of a company falls, the company experiences sudden unexpected cash outflows, or some other event causes counterparties to avoid trading with or lending to the company. Management Perception: BPPL has an efficient treasury department to manage its cash and liquidity issues. The department works to optimize working capital, confirmation and reconciliation of receipts and timely disbursement of payments. The treasury department is also formulate proper planning to avoid future liquidity problems. c) Risk associated with the Issuer s interest in subsidiaries, joint ventures and associates: Performance of subsidiaries, joint ventures and associates have direct impact on the interest of their parents. If the subsidiaries, joint ventures and associates perform well, parents will be benefited and viceversa. As future performance of subsidiaries, joint ventures and associates can go wrong than expected, there is always a risk that the interest of the parent may be affected negatively. Management Perception: Baraka Patenga Power Limited has two subsidiary namely Karnaphuli Power Limited and Baraka Shikalbaha Power Limited. Due to the sponsors vast expertise in power sector since long, it is expected that there will be less possibilities to arise conflict of interest. d) Significant revenue generated from limited number of customers, losing any one or more of which would have a material adverse effect on the issuer. Management Perception: The company has signed a contract with BPDB to generate & supply of electricity for 15 years on BOO basis. The revenue stream of the Company is guaranteed under the terms and conditions of PPA over the project life. So there is no significant risk arises in this respect. 138 REDHERRING PROSPECTUS

141 REDHERRING PROSPECTUS e) Dependency on a single or few suppliers of raw materials, failure of which may affect production adversely. Raw materials are one of the prime factors of production. If a company depends on single or few suppliers for its raw materials, it will be exposed to the risk of stockout or stoppage of production. Management Perception: BPPL collects its raw materials from different sources. The major raw material to run the power plant is Furnace Oil which is procured from Singapore based Supplier namely SHELL, VITOL & others. The Company can also procure Furnace Oil from BPC approved dealers in local market. Apart from the availability of the major raw material, the plant maintains sufficient furnace oil in its stock as contingency to overcome any unforeseen events. f) More than 20% revenue of the issuer comes from sister concern or associate or subsidiary Intercompany transactions may not be transacted based on arm s length basis. As a result, interest of general shareholders may be hampered when more than 20% revenue of the issuer comes from sister concern or associate or subsidiaries, interest of the shareholders. Management Perception: The company doesn t generate 20% or more revenue from any of its sister concerns or associate or subsidiary. g) Negative earnings, negative cash flows from operating activities, declining turnover or profitability, during last five years, if any. Last five years results regarding earnings, cash flows from operating activities, turnover or profitability is very important to predict future performance of the company. Management Perception: Accounting year Turnover Results Earnings Cash flow from operating activities Remarks (532,605) (521,105) The Company was not in operation from to (5,025,810) (4,317,672) 13. As a result, there was no turnover, negative earnings and cash flow from operating activities was also negative (11,096,908) (4,472,287) ,852,967 50,619,113 (875,241,728) ,021,633, ,628, ,773, ,119,185, ,618, ,251, ,648,485, ,097, ,438,258 JulDec, ,144,108, ,162, ,999,190 The Company s sales are made solely to BPDB on monthly basis and subsequently the receivables were realized after the reporting period. Since its commercial operation date (i.e. 4 May 2014) the results shows positive trend. h) Loss making associate/subsidiary/group companies of the issuer. Operating performance of associate/ subsidiary/ group companies has a direct impact on the interest of parents on those. So, if there is any loss making associate/ subsidiary/ group companies of the issuer, it will have a negative impact on the profitability of the issuer. Management Perception: Baraka Patenga Power Limited has two subsidiary namely Karnaphuli Power Limited and Baraka Shikalbaha Power Limited which are yet to start their commercial operation. 139

142 i) Financial weakness and poor performance of the issuer or any of its subsidiary or associates Management Perception: BPPL has no subsidiary or associates which is currently suffering financial distress. So there is no risk in this respect. j) Decline in value of any investment Decline in the value of any investment may have negative impact on the profitability and total assets of the issuer. Management Perception: The company had investment in shares of both listed and nonlisted companies. Value of the securities of listed companies changes over the reporting periods. Investment in shares of nonlisted companies were measured at cost. BPPL believe that value of the investment will not impact on the profitability and total assets of the Company significantly. k) Risk associated with useful economic life of plant and machinery, if purchased in second hand or reconditioned. Allocation of depreciation expense of plant and machinery depends on the estimation of useful economic life of the assets. To determine actual condition of plant and machinery at the time of second hand or reconditioned purchased is always challenging. So, there is a risk in reasonable estimation of economic life of plant and machinery when they are purchased in second hand or reconditioned. Management Perception: BPPL uses branded machineries for overall operation. Hence, there is no such risk associated with the company. l) Adverse effect on future cash flow if interest free loan given to related party or such loans taken from directors may recall. Management Perception: Related party loans are given or taken for temporary basis to run overall business of the group smoothly. Therefore, the degree of such risk is minimal under the control of management. m) Potential conflict of interest, if the sponsors or directors of the issuer are involved with one or more ventures which are in the same line of activity or business as that of the issuer and if any supplier of raw materials or major customer is related to the same sponsors or directors. Management Perception: Sponsors or directors of BPPL are involved with ventures which are in the same line of activity or business as that of the issuer. All the companies under common control are run by different operational team. So, degree of such risk is minimal. n) Related party transactions entered into by the company those may adversely affect competitive edge. Management Perception: There is no as such transaction which may adversely affect competitive edge except the Operational, Maintenance, Administrative and Financial Management Service Agreement with BPL. However, paying the service fee to the BPL) is justified as otherwise, the Company had to hire external employees with the same level of experience and expertise, which would have been more expensive for the Company to bear. o) Any restrictive covenants in any shareholders agreement, sponsors agreement or any agreement for debt or preference shares or any restrictive covenants of banks in respect of the loan/ credit limit and other banking facilities. Management Perception: There are no restrictive covenants in any shareholders agreement, sponsors agreement or any agreement relating to debt or preference shares or any restrictive covenants of Banks in respect of loan or credit limit and other banking facilities. 140 REDHERRING PROSPECTUS

143 REDHERRING PROSPECTUS p) Business operations may be adversely affected by strikes, work stoppages or increase in wage demands by employees. Management Perception: The degree of such risk is very low since the business operations of BPPL runs through Operational, Maintenance, Administrative and Financial Management Service Agreement with BPL. q) Seasonality of the business of the issuer Management Perception: BPPL generating & transferring electricity uninterruptedly to the national grid throughout the year to fulfill the national demand so there is no seasonality of the business. r) Expiry of any revenue generating contract that may adversely affect the business Management Perception: The company are not at risk of losing any revenue generating contract that may adversely affect the business. s) Excessive dependence on debt financing which may adversely affect the cash flows. Management Perception: Business of BPPL is growing in nature. To keep pace with the growth, BPPL has to go for debt finance. Before taking any debt finance, BPPL analyzes its cash inflows and outflows properly. BPPL also has a very efficient treasury department. So, management do not expect any adverse impact on cash flows of the Company for use of debt. t) Excessive dependence on any key management personnel absence of whom may have adverse effect on the issuer s business performance. Management Perception: Corporate Governance is well practiced in BPPL. The company also has a wellplaced organogram. So, any change in the key management can be replaced without any adverse effect on the business performance of Company. u) Enforcement of contingent liabilities which may adversely affect financial condition. Management Perception: The Company had some contingent liabilities and commitments but management believe that none of those contingent liabilities and commitments may adversely affect financial condition of the Company. v) Insurance coverage not adequately protect against certain risks of damages. Management Perception: As a part of risk management process, the company has different insurance coverage for all the relating issues that are risky to operating business. w) Absence of assurance that directors will continue its engagement with Company after expiry of lock in period. Management Perception: The directors are involved in the business for long time and they will continue the business after expiry of lock in period. x) Ability to pay any dividends in future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditure. Management Perception: BPPL is a growing company with a good profitability track record for a long time. Its profitability is on uptrend. So the management belief that BPPL will be able to pay dividend from its profit. 141

144 y) History of nonoperation, if any and short operational history of the issuer and lack of adequate background and experience of the sponsors. History of nonoperation indicates weak operational management of the Company. Nonoperation leads to negative cash flow, incurring of losses and bankruptcy in worst case scenario. Management Perception: BPPL has no history of nonoperation in the past. The Company is an independent body. It has been in operation by its Memorandum & Articles of Association and other applicable laws Implemented by the Government. Besides, the Company s financial strength is satisfactory. It has very experienced Directors and Management team to make the Company more efficient and stronger in market capturing. So, the chance of becoming nonoperative of the Company is very less. z) Risks related to engagement in new type of business, if any. Management Perception: BPPL has strong management personnel who have vast diversified knowledge different type of industry such as RMG, real estate, agro machineries, health care service etc. Moreover, the management possesses strong capacity to operate business in those industries effectively, efficiently & profitably so the risks related to engagement in new type of business is less. aa) Risk in investing the securities being offered with comparison to other available investment options. Management Perception: BPPL has a steady stream of revenue generating capacity guaranteed by PPA signed with BPDB & IA agreement with MPEMR. As such, there is less possibility to make losses from operation which would increase the possibility to receive dividend. Moreover, the profitability of the Company will increase further from the profit by the associate companies once these associate companies will start operation. Therefore, the risk in investing the securities of BPPL is less than other available investment options. bb) Any penalty or action taken by any regulatory authorities for noncompliance with provisions of any law. Management Perception: There were no such penalty or action taken by any regulatory authorities for noncompliance with provisions of any law. cc) Litigations against the issuer for Tax and VAT related matters and other government claims, along with the disclosures of amount, period for which such demands or claims are outstanding, financial implications and the status of the case. Management Perception: There are no litigations against the issuer for Tax and VAT related matters and other government claims as all Tax & VAT returns are submitted regularly. dd) Registered office or factory building or place of operation is not owned by the issuer. Management Perception: Factory building is owned by BPPL and there is no risk associated with this issue. However, registered office and corporate office of the Company is rented as the management believes that investment in business activities is more justified rather than investment of a huge capital expenditure for permanent registered office or corporate office now since it is a fast growing entity. ee) Lack of renewal of existing regulatory permissions/ licenses. Management Perception: The Company takes necessary actions to keep its all regulatory permissions/licenses updated. ff) Failure in holding AGM or declaring dividend or payment of interest by any listed securities of the issuer or any of its subsidiaries or associates. Management Perception: There are no listed securities of BPPL and its subsidiaries or associates. Therefore, there is no risk arising from failure in holding 142 REDHERRING PROSPECTUS

145 REDHERRING PROSPECTUS AGM or declaring dividend or payment of interest. However, BPL (the holding company) is holding AGM and declaring dividends on a regular basis. gg) Issuances of securities at lower than the IPO offer price within one year. Management Perception: The above mentioned required information will be furnished after determination of the cutoff price. hh) Refusal of application for public issue of any securities of the issuer or any of its subsidiaries or associates at any time by the Commission. Management Perception: The Issuer had applied for Public Offering on March 24, The Commission refused the said application on May 17, Subsequently, the Management has taken the corrective measures and decided to apply to the Commission for IPO complying with the Bangladesh Securities and Exchange Commission (Public Issue) Rules, II. External Risk Factors: a) Interest Rate Risks: Interest rate risk concerned with borrowed funds of short term and long term maturity, volatility of money market, which ultimately influences the interest rate structure of fund. Management Perception: The Management of the Company is well aware of the volatility of the money market of our country and also believes that rising interest rates will not substantially affect the profitability of the Company due to a major out of total term loan has been financed by low cost World Bank IPFF fund. Furthermore, after the proposed IPO, the financial cost of the Company will be reduced which would impact the profitability of the Company positively. b) Exchange Rate Risks: Devaluation of local currency against major international currencies i.e. USD, GBP and Euro may affect company s income. Management Perception: Management of BPPL is aware of the risks related to currency fluctuations. Major imported machinery and equipment purchases from abroad have been settled. Currently, principal raw material i.e. HFO and spare parts are being procured from suppliers from various countries in foreign currency. However, fuel cost is coverable at the time of billing to BPDB and tariff rate (paid in foreign currency equivalent to Bangla Taka) is also adjusted with the local and foreign Consumer Price Index (CPI) time to time. Therefore, Management believes exchange rate fluctuation is not going to hamper profitability of the Company. c) Industry Risks: Market Demand Risk: BPPL operates business mainly in the country s power, oil & gas, and automobiles sectors. All these sectors are highly regulated by the government and Market demand is comparatively high. Management Perception: Over the last decade, energy demand grew heavily with little addition of supply. Therefore, the demand and supply gap for the industry is increasing day by day. Management believes power insufficiency is threat to the Country s industrial growth and its citizens standard of living. However, it must be noted that the additional supply driven by the Government s plans will only way to narrow the immense gap between supply and demand. It is anticipated that future demand for power shall be increased for which more participation is needed. 143

146 Risks related to Nonavailability of Electricity and Other Utilities: Management Perception: Besides public sources of electricity, BPPL has its power generation system. The Company has implemented automated load balancing, monitoring and management tools that intelligently shifts the usage of generators and UPSs thus increasing the life expectancy and efficient use of power. Like all other businesses BPPL depends on other utilities. So, impact of nonavailability of other utilities will be as like as that of all other business. d) Economic and Political risks: Economic risks: Economic risk is the risk that is associated with the influence of financial and other economic factors on the operation of an entity. Assessment of economic risks is crucial in assessing the overall risk of the business of an entity. Economic risks have a direct impact on the revenues and expenses amount and accordingly the company s profits. Main types of economic risks includes risk of rising prices for raw materials and energy, risk of minimum wages increasing, risk of higher taxes and duties rates, etc. Management Perception: Bangladesh economy is booming for last few years. Consistent industrial growth along with increased industrial production has made the Per Capita Income higher than that of recent years. In addition, favorable government policies and industry friendly policies by other regulatory bodies have proved to be congenial to the economy of the country. Political risks: Political risk refers to the risk that an entity s returns could suffer as a result of political changes or instability in a country. Instability affecting returns could stem from a change in government, legislative bodies, other foreign policy makers or military control. Political risks are extremely hard to quantify because there are limited sample sizes or case studies when discussing a particular country. Some political risks can be insured against through international agencies. The outcome of a political risk could drag down returns or even go so far as to remove the ability to withdraw capital from an investments. Any instance of political turmoil and disturbance in the country may adversely affect the economy in general. Management Perception: Political risk affects the economy of a country. It s beyond the control the management of a company. As it is a noncontrollable factor, management of BPPL always tries to avoid or reduce the consequences of the risk. So, management of the company is always concerned about the prevailing and upcoming further changes in the global or national policy and shall response appropriately and timely to safeguard its interest. e) Market and Technologyrelated Risks: Market and technologyrelated risks arise for any industrial concern as it keeps itself aligned with innovation. Capacity of generating power is dependent largely on the capacity of its generator. The demand for new and cost effective technology may render the existing technology obsolete, which may cause negative impact on the performance of the Company Management Perception: Management of the Company has utilized stateoftheart technology and modern machinery for its power plants. The power plant has been equipped with 8 (eight) units of generator sets from the world renowned HFO powered engine manufacturer, Rolls Royce, Norway and 1 (one) unit of generator set from Tide Power System Co. Ltd., China. In order to ensure uninterrupted generation of electricity, BPPL s highly experienced and efficient team performs and carries out timely maintenance work in the plant as per the manufacturer s guidelines and requirements. Management has safeguarded against potential disruptions in operations by procuring sufficient quantity of HFO, spare parts and lube oil from suppliers at lead times managed by professionals of the Company. f) Potential or existing government regulations: Companies of Bangladesh operates under various laws like Companies Act, 1994, taxation related laws and rules, rules of Bangladesh Securities and Exchange Commission etc. Any abrupt changes of the policies formed by those bodies may impact the business of the company adversely. 144 REDHERRING PROSPECTUS

147 REDHERRING PROSPECTUS Management perception: The management highly believes it is unlikely that the Government will initiate any fiscal measure having adverse effect on the growth of the industry. On the contrary, the Government has moved towards alternative suppliers for furnace oil, reserve building & power capacity generation and distribution. So current Govt. regulation is favorable for this sector development and it is expected that it shall be continued in near future. g) Potential or existing changes in global or national policies; The performance of companies may be affected by the political and economic instability both in Bangladesh and worldwide. Any instance of political turmoil and disturbance in the country may 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 the Company is well prepared to adopt new policies and preventive measures as and when required to reduce such risks. Furthermore, political unrest due to strikes and mass protests may have a negative impact on any business. However, electricity service being considered a daily necessity is most often kept out of obstruction. Most importantly, adequate risks are covered under the insurance agreement with the insurance companies, to compensate for all the potential damages. h) Statutory clearances and approvals those are yet to be received by the issuer: Management Perception: BPPL has collected all the statutory clearance and approval to operate the business. The necessary update and renewal is a continuous process. Hence, there is a limited degree of such risk associated with the company. i) Competitive condition of the business: A company of a particular sector might have to face stiff competition from its competitors. Easily availability of global products in the local markets accelerates the competition, challenging the profitability of the business. Management Perception: There is a great demand for electricity in Bangladesh. This demand will increase day by day in order to meet this growing demand; the country needs more power generation plants. According to BPDB, at present (as on March 05, 2018) the total electricity generation capacity of Bangladesh is 13,846 MW which needs to be increased in order to sustain overall economic growth of the country. j) Complementary and supplementary products/services which may have an impact on business of the issuer. Management Perception: At present, there are no Complementary and supplementary products/services which may have an impact on business of the issuer. 145

148 SECTION: XXI DESCRIPTION OF THE ISSUE 146 REDHERRING PROSPECTUS

149 REDHERRING PROSPECTUS Issue Size: Number of securities to be issued : [ ] Authorized capital and paidup capital : Authorized capital BDT 3,000,000,000 Paidup capital BDT 992,250,000 Face value, premium and offer price per unit of securities : Face Value BDT 10/ CutOff Price [ ] Public Offering Price[ ] Premium[ ] Number of securities to be entitled for each category of applicants : [ ] Holding structure of different classes of securities before and after the issue: SL. No. Category of Shareholders No. of Shares Percentage (%) Before IPO After IPO Before IPO After IPO 1. Directors & Sponsors 61,083,750 [ ] 61.55% [ ] 2. Institutional 525,000 [ ] 0.53% [ ] 3. Mutual fund [ ] [ ] 4. Individual 37,616,250 [ ] 37.92% [ ] 5. Non Resident Bangladeshis (NRBs) [ ] [ ] 147

150 SECTION: XXII USE OF PROCEEDS 148 REDHERRING PROSPECTUS

151 REDHERRING PROSPECTUS Use of net proceeds of the offer indicating the amount to be used for each purpose with headwise breakup: Use of net proceeds of the offer indicating the amount to be used for each purpose with headwise breakup: Baraka Patenga Power Limited (BPPL) has undertaken a project to set up 2 (two) power plants i.e. Karnaphuli Power Limited (KPL) and Baraka Shikalbaha Power Limited (BSPL) to contribute in the increasing demand of the electricity in Bangladesh. BPPL holds 51% of both the companies. The total project cost is estimated as BDT 15,100 Million where 70% will be funded through Bank Finance and 30% will be funded by IPO of BPPL, Preference Shares to be issued by KPL & BSPL and Own Finance by the shareholders. As per decision of the Board of Directors, the total IPO proceed is estimated as BDT 2,250 Million where BDT 1, Million (i.e. BDT Million for Karnaphuli Power Limited and BDT Million for Baraka Shikalbaha Power Limited) will be utilized for implementation of power plants, BDT Million will be utilized as partial repayment of longterm obligations and rest amount i.e. BDT Million will be utilized as IPO expenses (approx.). Total Project Costs: Power Plants Capacity Estimated cost for implementation (Amount in BDT Million) Karnaphuli Power Limited 110 MW 7, Baraka Shikalbaha Power Limited 105 MW 7, Total Costs 15, Shareholding Position of KPL and BSPL: Equity financing (%) Shareholders Karnaphuli Power Limited Baraka Shikalbaha Power Ltd. Baraka Patenga Power Limited 51% 51% Baraka Power Limited 25% 20% Other Investors 24% 29% The detail breakup of Power Plant(s) Implementation Costs: Sl. No Particulars Implementation of Karnaphuli Power Limited Implementation of Baraka Shikalbaha Power Limited Project Costs (Amount in BDT Million) Bank Finance Sources of Fund (Amount in BDT Million) From IPO Proceeds Preference shares Own financing from shareholders 7, , , , Total 15, , , , ,

152 Breakdown of Use of IPO Proceeds: 1. Loan Repayment Sl. No. Name of the Banks Balance as on Dec. 31, 2017 (Amount in BDT) United Commercial Bank Limited (BDT Loan) 420,000,000 Trust Bank Limited (BDT Loan) 328,725,000 Total 748,725, Implementation of power plant of Karnaphuli Power Limited (110 MW) Sl. No Particulars Amount in BDT 1. Land 350,000, Land Development 34,944, Gensets (Wartsila 06 nos., Capacity: MW each) 3,509,147, Balance of Plant including STG, Approach Road, Internal Road & Boundary wall, 2,814,000,000 Fuel unloading System with Fuel Pump House KV Transmission Line including required land and switchyard cost 300,000, Sheet Pillion (River side) 25,000, Workshop and Lab Equipment 10,000, Jetty and Flock Lift 20,000, Motor Vehicles, Office Decoration, Office Equipment & others 30,000, Transportation Cost for Engine and Other Capital Machinery, Custom clearance and C&F Cost, LC Opening Cost, IDCP, Add Confirmation and Discounting cost, Loan Processing Fees, Consultancy & Others 506,908,800 Total Project Cost 7,600,000, Implementation of power plant of Baraka Shikalbaha Power Limited (105 MW) Sl. No Particulars Amount in BDT 1. Land 350,000, Land Development 34,944, Gensets (Wartsila 06 nos., Capacity: MW each including 03 nos. of exhaust boiler) 3,563,560, Balance of Plant, Approach Road, Internal Road & Boundary wall, Fuel unloading System with Fuel Pump House 2,352,000, KV Transmission Line including required land and switchyard cost 300,000, Sheet Pillion (River side) 100,000, Workshop and Lab Equipment 10,000, Jetty and Flock Lift 20,000, Motor Vehicles, Office Decoration, Office Equipment & others 40,000, Transportation Cost for Engine and Other Capital Machinery, Custom clearance and C&F Cost, LC Opening Cost, IDCP, Add Confirmation and Discounting cost, Loan Processing Fees, Consultancy & Others 729,496,000 Total Project Cost 7,500,000,000 Sd/ Mohammed Monirul Islam Chief Financial Officer Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman 150 REDHERRING PROSPECTUS

153 REDHERRING PROSPECTUS A schedule mentioning the stages of implementation and utilization of funds received through public offer in a tabular form, progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, the approximate date of completion of the project and the projected date of full commercial operation etc. The schedule shall be signed by the Chief Executive Officer or Managing Director, Chief Financial Officer and Chairman on behalf of Board of Directors of the issuer: The Issuer has decided to partial payment of BDT Million for the project costs from the total IPO Proceeds of BDT 2, Million. The stages of implementation and utilization of fund received through public offering: Sl. No Utilization of Fund Partial Payment of Project Costs for Karnaphuli Power Limited 1 Partial Payment of Project Costs for Baraka Shikalbaha Power Limited 2 Progress Made So Far Land procurement has been completed, development work is under process, genset supply contract signed with Wartsila. Land procurement has been completed, development work is under process, genset supply contract signed with Wartsila. 3. Loan Repayment N/A 4. Estimated IPO expenses N/A Approximate date of Completion of Projects Schedule of Implementation Projected Date of Commercial Operation April 20, 2019 April 29, 2019 November 15, 2018 November 24, 2018 Payment for Project Costs Within 6 months of receiving of the IPO Proceeds Within 6 months of receiving of the IPO Proceeds Within 3 months of receiving the IPO Proceeds As and when required 1 The signing date of PPA for Karnaphuli Power Limited is on February 4, The project will be implemented within 15 months of the signing date of PPA i.e. April 29, The date of LOI for Baraka Shikalbaha Power Limited is on February 28, The project will be implemented within 9 months of the LOI i.e. November 24, Sd/ Mohammed Monirul Islam Chief Financial Officer Sd/ Gulam Rabbani Chowdhury Nominated Director by Baraka Power Limited & Managing Director Sd/ Faisal Ahmed Chowdhury Nominated Director by Baraka Power Limited & Chairman 151

154 SECTION: XXIII LOCKIN 152 REDHERRING PROSPECTUS

155 REDHERRING PROSPECTUS Provisions for lockin: As per Rule10 of Bangladesh Securities and Exchange Commission (Public Issue) Rules, 2015: Ordinary shares of the issuer shall be subject to lockin, from the date of issuance of prospectus or commercial operation, whichever comes later, in the following manner: (1) All shares held, at the time of according consent to the public offer, by sponsors, directors and shareholders holding 10% (ten percent) or more shares, other than alternative investment funds, for 03(three) years; (2) In case any existing sponsor or director of the issuer transfers any share to any person, other than existing shareholders, all shares held by those transferee shareholders, at the time of according consent to the public offer, for 03(three) years; (3) 25% of the shares allotted to eligible investors, for 06 (six) months and other 25% of the shares allotted to them, for 09 (nine) months; (4) All shares held by alternative investment funds, at the time of according consent to the public offer, for 01(one) year; and (5) All shares held, at the time of according consent to the public offer, by any person other than the persons mentioned in subrules (1), (2) and (3) above, for 01 (one) year. Provided that ordinary shares converted from any other type of securities shall also be subject to lockin as mentioned above. Statement of securities to be locked in for each shareholder along with lockin period and number of securities to be lockedin: SL. No. Name of Directors & Sponsors Lock in Period* No. of Share 1. Baraka Power Limited 3 Years 50,604, Faisal Ahmed Chowdhury 3 Years 2,976, Gulam Rabbani Chowdhury 3 Years 2,976, Fahim Ahmed Chowdhury 3 Years 850, Monzur Kadir Shafi 3 Years 1,575, Md. Shirajul Islam 3 Years 1,050, Afzal Rashid Chowdhury 3 Years 1,050,000 8 Touhidul Islam 1 Year 840,000 9 Mijanur Rahman Choudhury 1 year 2,730, Abdul Bari 1 year 892, Momthaz Chowdhury 1 year 2,919, Rushina Ahmed Chowdhury 1 year 1,984, Syeda Yasmin Hossain 1 year 1,984, NoorEZannat Chowdhury 1 year 1,664, Abeda Khanom Chowdhury 1 year 1,821, Nasim Ahmed Chowdhury 1 year 729, Ubaydia Chowdhury 1 year 1,050, Fokrul Alam Chowdhury 1 year 450, Nanu Kazi Md. Miah 1 year 1,050, Atikur Rahman 1 year 997, Nayem Ahmed Chowdhury 1 year 897, Md. Humayun Ahmed 1 year 472, Alimul Ahsan Chowdhury 1 year 446, Niaz A. Khan 1 year 787, Sultana Jesmin Chino 1 year 399, Shoeb Khan 1 year 577, Yeaheya Murad Khan 1 year 735, Ali Ahmed 1 year 661,

156 SL. No. Name of Directors & Sponsors Lock in Period* No. of Share 29 Foster Securities Ltd. 1 year 525, Zakir Hossain 1 year 525, Kazi Md. Angur Miah 1 year 525, Masrur Chowdhury 1 year 525, Mohammed Abdul Ahad 1 year 525, Abdul Wasay Chowdhury (Zuber) 1 year 420, Alimus Sadat Chowdhury 1 year 525, Abdul Mumin 1 year 525, Masud Ahmed 1 year 525, Mohammed Monsur Alam Chowdhury 1 year 525, Syed Musharaf Hussain Chowdhury 1 year 52, Sajeda Chowdhury 1 year 315, Tanjeel Wadud Chowdhury (Sagor) 1 year 367, Shubina Ahmed Chowdhury 1 year 787, Nasrin Sultana Sampa 1 year 472, Roushan Ali Khan 1 year 105, Shamsher Ali Tarafder 1 year 105, Rawad Ashraf 1 year 105, Tania Tabassum 1 year 105, Abdul Mannan 1 year 577, Mumina Khatun 1 year 105, Mohibun Bari Chowdhury 1 year 840, Enamul Haque Khan 1 year 178, Nurjahan Begum 1 year 73, David Hasan 1 year 420, Azizur Rahman 1 year 105, Dr. Hasina Choudhury 1 year 105, Rebunnessa Chowdhury 1 year 262, Mohammod Shamsur Rahman 1 year 262, Naznin Sultana 1 year 525, Suraiya Rahman 1 year 84, Sayem Ahmed 1 year 472, Mohammed Aziz baksh 1 year 367, Ahmed Tarek 1 year 26, Md. Motiul Islam 1 year 199, Md. Shahidul Islam 1 year 42, Saleha Afrooz 1 year 105, Abdul Muktadir Chowdhury 1 year 157, Mohammed Sadiqur Rahman 1 year 420, Feroz Suleman Atcha 1 year 105, Mridulal Bhattacharjee 1 year 63, Anamika Roy 1 year 52, Jayanta Kumar Podder 1 year 105, Sosanta Kumar Podder 1 year 100, Ashrafun Nessa 1 year 525, Anisul Khadija 1 year 210,000 *Note: Lockin Period starts from the date issuance of Prospectus i.e. 154 REDHERRING PROSPECTUS

157 REDHERRING PROSPECTUS SECTION: XXIV MARKETS FOR THE SECURITIES BEING OFFERED 155

158 The issuer shall apply to all the relevant exchanges in Bangladesh within 7 (seven) working days from the date of consent for public offer accorded by the Commission. The Exchange shall complete the listing procedures within a maximum period of 30 (thirty) working days from the date of closure of subscription list. DECLARATION ABOUT LISTING OF SHARES WITH STOCK EXCHANGE(S) None of the stock exchange(s), if for any reason, grants listing within 75 (Seventy Five) days from the closure of subscription, any allotment in terms of this prospectus shall be void and the company shall refund the subscription money within 15 (Fifteen) days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (Seventy Five) days, as the case may be. In case of nonrefund of the subscription money within the aforesaid 15 (Fifteen) days, the Directors of the company, in addition to the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% (two percent) above the bank rate, to the subscribers concerned. The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and shall submit compliance report thereon to the Commission within 07 (Seven) days of expiry of the aforesaid 15 (Fifteen) days time period allowed for refund of the subscription money. TRADING AND SETTLEMENT Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the shares of the Company. The issue shall be placed in N Category with DSE and CSE. 156 REDHERRING PROSPECTUS

159 REDHERRING PROSPECTUS SECTION: XXV DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED 157

160 The Company has raised its paidup capital in following phases: Date of Allotment Nominal Price Issue Price 7 June 2011: First (Subscription to the Memorandum & Articles of Association at the time of Incorporation) In cash Number of Shares Issued Other than in cash Bonus Share Amount of Share Capital (BDT) 10/ 10/ 100,000 1,000, April 2014: 2 nd allotment 10/ 10/ 94,400, ,000, January 2017: 3 rd Allotment 10/ 10/ 4,725,000 47,250,000 Total 992,250,000 The Company has issued Ordinary Share to the Subscriber to the Memorandum and other than existing shareholder time to time which has been disclosed in the Section OWNERSHIP OF THE COMPANY S SECURITIES. (a) Dividend, Voting, Preemption Rights The share capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All Shareholders shall have the usual voting right in person or by proxy in connection with, among others, election of Directors &Auditors and other usual agenda of General Meeting Ordinary or Extra Ordinary. On a show of hand, every shareholder present in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him or her. In case of any additional issue of shares for raising further capital, the existing shareholders shall be entitled to Issue of Right shares in terms of the guidelines issued by the Bangladesh Securities and Exchange Commission from time to time (b) Conversion and Liquidation Rights In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No transfer shall be made to a firm, an infant or person of unsound mind. (c) Dividend Policy 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 paidup on the shares held by them respectively. b) No larger 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. Dividend 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. f) There is no limitation on the payment of dividends to the common stockholders of the Company. 158 REDHERRING PROSPECTUS

161 REDHERRING PROSPECTUS (d) Other Rights of Shareholders In terms of provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for registering transfer of shares. No transfer shall be made to a minor or person of unsound mind. The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the subsequent periods and present with the objects of providing maximum disclosure as per law and International Accounting Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the right to receive all periodical statement and reports, audited as well as unaudited, published by the company from time to time. The shareholder holding minimum of 10% shares of paidup capital of the company shall have the right to requisition ExtraOrdinary General Meeting of the company as provided under Section 84 of the Companies Act,

162 SECTION: XXVI FINANCIAL STATEMENTS 160 REDHERRING PROSPECTUS

163 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF Baraka Patenga Power Limited and It s Subsidiary as AT AND FOR THE PERIOD ENDED 31 DECEMBER,

164 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF baraka patenga power limited and it s subsidiary We have audited the accompanying Financial Statements of Baraka Patenga Power Limited and It s Subsidiaries, which comprisesthe Consolidated Statement of Financial Position as at 31 December, 2017 and the related Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and a summary of significant accounting policies and relevant explanatory notes 01 to 40 for the period ended 31 December, We have also audited the accompanying Financial Statements of Baraka Patenga Power Limited, which comprises the Statement of Financial Position as at 31 December, 2017 and the related Statement of Profit or Loss and Other Comprehensive Income, the Statement of Changes in Equity, the Statement of Cash Flows for the period then ended and a summary of significant accounting policies and relevant explanatory notes. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these Financial Statements in accordance with the Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the Financial Statements present fairly, in all material respect, the Financial Position of Baraka Patenga Power Limited and It s Subsidiaries at 31 December, 2017 and the results of its financial performance and its cash flows for the period then ended in accordance with Bangladesh Financial Reporting Standards and comply with the applicable sections of Companies Act 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulations. Further to our opinion in the above paragraph, we state that: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof; (b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our examination of those books; (c) the Company s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of account; and (d) the expenditure was incurred for the purpose of the Company s business. Dated: Dhaka 01 March, REDHERRING PROSPECTUS Sd/KAZI ZAHIR KHAN & CO. Chartered Accountants.

165 Baraka Patenga Power Limited CONSOLIDATED STATEMENT OF FINANCIAL POSITION As on December 31, 2017 Particulars Notes As on Dec. 31, 2017 As on June 30, 2017 Amount (Tk.) Amount (Tk.) ASSETS NonCurrent Assets Property, Plant & Equipment 04.A 3,969,586,453 Capital WorkinProgress 05.A Goodwill on Acquisition of Subsidiary ,768,182 Total NonCurrent Assets 3,971,354,635 3,850,792,905 1,768,182 3,852,561,087 Current Assets Inventories 08.A 785,267,690 Investment in Marketable SecuritiesHeld for Sale 09.A 5,384,614 Advances, Deposits & Prepayments 10.A 419,308,977 Accounts Receivables 11.A 426,393,486 Other Receivables 12.A 22,000 Cash & Cash Equivalents 13.A 15,147,108 Total Current Assets 1,651,523,875 TOTAL ASSETS 5,622,878, ,283,728 6,646,964 79,746, ,765,565 10,000 30,525,364 1,476,977,927 5,329,539,014 EQUITY & LIABILITIES Shareholders Equity Share Capital 14.A 992,250, ,250,000 Fair Value Reserve (699,817) (41,291) Retained Earnings 762,162, ,097,816 1,753,712,326 1,700,306,525 Non Controlling Interest 15 (1,557,231) (1,666,992) Total Equity 1,752,155,095 1,698,639,533 NonCurrent Liabilities Term LoanNon Current Maturity 17.A 2,395,939,086 2,565,875,317 Finance Lease LiabilityNon Current Maturity 18.A Total NonCurrent Liabilities 2,395,939,086 2,565,875,317 Current Liabilities Term LoanCurrent Maturity 17.B 370,935, ,499,704 Finance Lease LiabilityCurrent Maturity 18.B 305,568 1,918,096 Short Term Liabilities 19.A 650,108, ,324,800 Provision for Income Tax 20.A 3,740,947 10,579 Liabilities for Expenses 21.A 1,077, ,478 Holding Company Balance 22.A 67,279,614 Accounts Payables 23.A 282,111, ,792,507 Other Payables 24.A 99,225,000 Total Current Liabilities 1,474,784,329 1,065,024,164 TOTAL EQUITY & LIABILITIES 5,622,878,510 5,329,539,014 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ Sd/ Sd/Company Secretary Head of Finance Director Sd/ Sd/ Managing Director Chairman Signed in terms of our report of even date annexed. Sd/ KAZI ZAHIR KHAN & CO. Chartered Accountants Dated: Dhaka March 01,

166 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the period ended December 31, 2017 Particulars Notes Halfyear ended (6 months) July 01 to Dec. 31, 2017 July 01 to Dec. 31, nd quarter ended (3 months) October 01 to Dec. 31, 2017 October 01 to Dec. 31, 2016 Taka Taka Taka Taka Revenue 25.A 1,144,108,972 1,527,852, ,504, ,889,289 Cost of Revenue 26.A (839,552,234) (1,193,787,572) (366,967,543) (487,729,139) Gross Profit 304,556, ,064, ,536, ,160,150 General & Administrative Expenses 27.A (27,936,290) (26,954,009) (15,152,182) (13,481,601) Operating Profit 276,620, ,110, ,384, ,678,549 Other Income/(Loss) 28.A (5,479,317) 5,231,677 (2,851,695) 1,830,030 Financial Expenses 29.A (114,501,675) (120,424,434) (58,819,482) (50,965,505) Profit before Tax 156,639, ,917,988 58,713,132 66,543,074 Income Tax Expenses 30.A (3,730,368) (1,831,087) (3,246,457) (640,511) Profit after Tax 152,909, ,086,901 55,466,675 65,902,563 Other Comprehensive Income/(loss) from 9.00 (658,526) Investment in Marketable Securities Total Comprehensive Income for the period 152,250, ,086,901 55,466,675 65,902,563 Profit Attributable To: Owners of the Company 153,289, ,086,901 55,466,675 65,902,563 Noncontrolling Interest (380,239) 152,909, ,086,901 55,466,675 65,902,563 Total Comprehensive Income Attributable to: Owners of the Company 152,630, ,086,901 55,466,675 65,902,563 Noncontrolling Interest (380,239) 152,250, ,086,901 55,466,675 65,902,563 Earnings per Share: Basic Earnings Per Share 31.A (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 164 REDHERRING PROSPECTUS

167 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the period ended December 31, 2017 Amount in Taka Equity Attributable to Owners of the Company Particulars Balance as on Fair Value Reserve Share Capital Retained Earnings Non Controlling Interest Total Total Equity 992,250,000 (41,291) 708,097,816 1,700,306,525 (1,666,992) 1,698,639,533 Increase/(Decrease) in Fair Value (658,526) (658,526) (658,526) NonControlling Interest arised on Acquisition 490, ,000 Net Profit/(Loss) during the period 153,289, ,289,327 (380,239) 152,909,088 (99,225,000) (99,225,000) (99,225,000) 992,250,000 (699,817) 762,162,143 1,753,712,326 (1,557,231) 1,752,155,095 Transactions with the Shareholders: Final Cash 10% for the year Balance as on Amount in Taka Equity Attributable to Owners of the Company Particulars Balance as on Fair Value Reserve Share Capital Retained Earnings Non Controlling Interest Total Total Equity 945,000, ,618,278 1,481,618,278 1,481,618, ,086, ,086, ,086,901 47,250,000 (47,250,000) 992,250, ,455,179 1,671,705,179 1,671,705, ,250, ,455,179 1,671,705,179 1,671,705,179 NonControlling Interest arised on Acquisition (1,184,342) (1,184,342) Increase/(Decrease) in Fair Value (41,291) (41,291) Net Profit/(Loss) during the period 127,867, ,867,637 (482,650) 127,384,987 (99,225,000) (99,225,000) (99,225,000) 992,250,000 (41,291) 708,097,816 1,700,306,525 (1,666,992) 1,698,639,533 Net Profit/(Loss) during the period Transactions with the Shareholders: Issue of Bonus Share for the year Balance as on Balance as on (41,291) Transactions with the Shareholders: Payment of Interim Cash 10% for the year Balance as on The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ Sd/ Sd/Company Secretary Head of Finance Director Sd/ Sd/ Managing Director Chairman Signed in terms of our report of even date annexed. Sd/ KAZI ZAHIR KHAN & CO. Chartered Accountants Dated: Dhaka March 01,

168 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF CASH FLOWS for the period ended December 31, 2017 Particulars to Amount (Tk) to Amount (Tk) Cash Flow from Operating Activities: Cash Receipts from Customer & Others 1,478,835,717 1,424,367,250 Cash Paid to Suppliers & Others (1,037,400,706) (895,132,948) Cash Generated from operating Activities 441,435, ,234,302 Income Tax Paid (15,656) (687,947) Financial Expenses (117,420,165) (97,536,820) Net Cash from Operating Activities 323,999, ,009,535 Cash Flow from Investing Activities: Acquisition of PPE (1,781,000) (1,018,177) Advance against PPE (343,240,300) Investment in Marketable SecuritiesHeld for Sale 757,841 Net Cash Provided by / (Used in) Investing Activities (344,263,459) (1,018,177) Cash Flow from Financing Activities: Term Loan Repayment (165,638,964) (187,199,910) Short Term Loan 681,274,333 72,842,314 Lease Finance (1,612,528) (1,416,944) Transaction with Holding Company (509,626,828) (173,885,641) Share Capital 490,000 Net Cash Used in Financing Activities 4,886,013 (289,660,181) Net Cash Inflow/(Outflow) for the period (15,378,256) 140,331,177 Opening Cash & Cash Equivalents 30,525,364 59,410,835 Closing Cash & Cash Equivalents 15,147, ,742,012 The above balance consists of the followings: Cash in Hand 3,057,465 4,538,786 Cash at Bank 1,480, ,347,226 Cash available on BO A/C at period end 752,806 Fixed Deposit Receipt 9,856,000 9,856,000 Total 15,147, ,742,012 Net Operating Cash Flows Per Share (NOCFPS) The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 166 REDHERRING PROSPECTUS

169 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on December 31, 2017 Particulars Land & Land Development Furniture & fixture Office & Electrical Equipment Freehold Assets Motor Vehicles Building & Civil Construction Office Decoration Maintenance Equipment Plant & Machineries Motor Vehicles (Leasehold Asset) Rate of Depreciation 0.00% 10.00% 20.00% 20.00% 20.00% 6.67% 20.00% 3.00% 25.00% ScheduleA Total Cost Balance as on 01 July, ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,238,050,909 Addition during the year 17,949 88,800 40,411,300 40,518,049 Adjustment Balance as on 30 June ,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Balance as on 01 July, ,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Addition during the period 191,833, , , ,147,574 Adjustment Balance as on 31 Dec., ,559,654 2,201,313 6,190,996 4,568,665 4,422, ,256,451 5,255,719 3,674,488,795 10,772,336 4,470,716,532 Accumulated Depreciation Balance as on 01 July ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Charged during the year 220,131 1,204, , ,521 27,015,285 1,051, ,234,664 2,693, ,216,821 Adjustment Balance as on 30 June ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 Balance as on 01 July, ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 Charged during the period 110, , , ,260 14,745, ,572 55,117,332 1,346,542 73,354,026 Adjustment Balance as on 31 Dec ,479 4,263,465 3,871,578 3,981,267 94,930,130 2,702, ,950,127 10,547, ,130,079 Written Down Value As on 30 June, ,726,380 1,427,900 2,409,501 1,153, , ,885,438 3,079,170,349,656,000 1,570,966 3,850,792,905 As on 31 Dec., ,559,654 1,317,834 1,927, , , ,326,321 2,553,598 3,294,538, ,424 3,969,586,453 Allocation of Depreciation: For the Period ended Dec. 31, 2017 For the year ended June 30, 2017 Cost of Sales 55,642, ,285,808 (Depreciation expenses on Plant & Machinery and Maintenance Equipment considered as direct expenses) General & Administrative Expenses 17,711,122 32,931,013 (Other than depreciation expenses on Plant & Machinery and Maintenance Equipment considered as indirect expenses) Total 73,354, ,216,

170 Baraka Patenga Power Limited STATEMENT OF FINANCIAL POSITION as on December 31, 2017 Particulars Notes As on Dec. 31, 2017 As on June 30, 2017 Amount (Tk.) Amount (Tk.) ASSETS NonCurrent Assets Property, Plant & Equipment ,777,672,879 3,850,792,905 Capital Work in Progress Investment in Subsidiary ,045, ,500 Total NonCurrent Assets 3,778,718,379 3,851,328,405 Current Assets Inventories ,267, ,283,728 Investment in Marketable SecuritiesHeld for Sale ,384,614 6,646,964 Advances, Deposits & Prepayments ,047,217 28,629,821 Accounts Receivables ,393, ,765,565 Other Receivables ,472,630 10,000 Cash & Cash Equivalents ,099,594 30,498,055 Total Current Assets 1,862,665,231 1,425,834,133 TOTAL ASSETS 5,641,383,610 5,277,162,538 EQUITY & LIABILITIES Shareholders Equity Share Capital ,250, ,250,000 Fair Value Reserve 9.00 (699,817) (41,291) Retained Earnings 779,355, ,600,167 Total Shareholders Equity 1,770,906,035 1,700,808,876 NonCurrent Liabilities Term LoanNon Current Maturity ,395,939,086 2,565,875,317 Finance Lease LiabilityNon Current Maturity Total NonCurrent Liabilities 2,395,939,086 2,565,875,317 Current Liabilities Term LoanCurrent Maturity ,935, ,499,704 Finance Lease LiabilityCurrent Maturity ,568 1,918,096 Short Term Liabilities ,932, ,809,310 Provision for Income Tax ,738,857 9,000 Liabilities for Expenses ,009, ,728 Holding Company Balance ,279,614 Accounts Payables ,111, ,792,507 Other Payables ,225,000 Total Current Liabilities 1,474,538,489 1,010,478,345 TOTAL EQUITY & LIABILITIES 5,641,383,610 5,277,162,538 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 168 REDHERRING PROSPECTUS

171 Baraka Patenga Power Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the period ended December 31, 2017 Particulars Notes Halfyear ended (6 months) July 01 to Dec. 31, 2017 July 01 to Dec. 31, nd quarter ended (3 months) October 01 to Dec. 31, 2017 October 01 to Dec. 31, 2016 Taka Taka Taka Taka Revenue ,144,108,972 1,527,852, ,504, ,889,289 Cost of Revenue (839,552,234) (1,193,787,572) (366,967,543) (487,729,139) Gross Profit 304,556, ,064, ,536, ,160,150 General & Administrative Expenses (27,394,858) (26,954,009) (14,750,553) (13,481,601) Operating Profit 277,161, ,110, ,785, ,678,549 Other Income/(Loss) ,814,822 5,231,677 9,129,362 1,830,030 Financial Expenses (114,266,160) (120,424,434) (58,583,967) (50,965,505) Profit before Tax 173,710, ,917,988 71,331,333 66,543,074 Income Tax Expenses (3,729,857) (1,831,087) (3,245,946) (640,511) Profit after Tax 169,980, ,086,901 68,085,387 65,902,563 Other Comprehensive Income/(loss) from 9.00 (658,526) Investment in Marketable Securities Total Comprehensive Income for the period 169,322, ,086,901 68,085,387 65,902,563 Earnings per Share: Basic Earnings Per Share (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 169

172 Baraka Patenga Power Limited STATEMENT OF CHANGES IN EQUITY for the period ended December 31, 2017 Amount in Taka Particulars Share Capital Fair Value Reserve Retained Earnings Total Balance as on ,250,000 (41,291) 708,600,167 1,700,808,876 Increase/(Decrease) in Fair Value (658,526) (658,526) Net Profit/(Loss) during the period 169,980, ,980,685 Transactions with the Shareholders: Payment of Final Cash 10% for the year (99,225,000) (99,225,000) Balance as on ,250,000 (699,817) 779,355,852 1,770,906,035 Amount in Taka Particulars Share Capital Fair Value Reserve Retained Earnings Total Balance as on ,000, ,618,278 1,481,618,278 Net Profit/(Loss) during the period 190,086, ,086,901 Transactions with the Shareholders: Issue of Bonus Share for the year ,250,000 (47,250,000) Balance as on ,250, ,455,179 1,671,705,179 Balance as on ,250, ,455,179 1,671,705,179 Increase/(Decrease) in Fair Value (41,291) (41,291) Net Profit/(Loss) during the period 128,369, ,369,988 Transactions with the Shareholders: Payment of Interim Cash 10% for the (99,225,000) (99,225,000) year Balance as on ,250,000 (41,291) 708,600,167 1,700,808,876 The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 170 REDHERRING PROSPECTUS

173 Baraka Patenga Power Limited STATEMENT OF CASH FLOWS for the period ended December 31, 2017 Particulars July 01 to Dec. 31, 2017 Amount (Tk.) Jan. 01 to June 30, 2017 Amount (Tk.) Cash Flow from Operating Activities: Cash Receipts from Customer & Others 1,478,834,256 1,424,367,250 Cash Paid to Suppliers & Others (1,032,600,024) (895,132,948) Cash Generated from operating Activities 446,234, ,234,302 Income Tax Paid (15,510) (687,947) Financial Expenses (117,184,650) (97,536,820) Net Cash from Operating Activities 329,034, ,009,535 Cash Flow from Investing Activities: Acquisition of PPE (1,734,000) (1,018,177) Investment in Marketable SecuritiesHeld for Sale 757,841 Investment in Subsidiary (510,000) Net Cash Provided by / (Used in) Investing Activities (1,486,159) (1,018,177) Cash Flow from Financing Activities: Term Loan Repayment (165,638,964) (187,199,910) Short term Loan 347,123,333 72,842,314 Lease Finance (1,612,528) (1,416,944) Transaction with Holding Company (509,626,828) (173,885,641) Transaction with Subsidiary Company (14,191,387) Net Cash Used in Financing Activities (343,946,374) (289,660,181) Net Cash Inflow/(Outflow) for the period (16,398,461) 140,331,177 Opening Cash & Cash Equivalents 30,498,055 59,410,835 Closing Cash & Cash Equivalents 14,099, ,742,012 The above balance consists of the followings: Cash in Hand 2,051,375 4,538,786 Cash at Bank 1,439, ,347,226 Cash available on BO A/C at period end 752,806 Fixed Deposit Receipt 9,856,000 9,856,000 Total 14,099, ,742,012 Net Operating Cash Flows Per Share (NOCFPS) The financial statements were approved by the Board of directors on March 01, 2018 and were signed on its behalf by: Sd/ sd/ Sd/ Company Secretary Head of Finance director Signed in terms of our report of even date annexed. Dated: Dhaka March 01, 2018 sd/ managing Director Sd/ Chairman sd/ kazi ZAHIR KHAN & CO. Chartered Accountants 171

174 Baraka Patenga Power Limited SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on December 31, 2017 Particulars Land & Land Development Furniture & fixture Office & Electrical Equipment Freehold Assets Motor Vehicles Building & Civil Construction Office Decoration Maintenance Equipment Plant & Machineries Motor Vehicles (Leasehold Asset) Rate of Depreciation 0.00% 10.00% 20.00% 20.00% 20.00% 6.67% 20.00% 3.00% 25.00% ScheduleB Total Cost Balance as on July 01, ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,238,050,909 Addition during the year 17,949 88,800 40,411,300 40,518,049 Adjustment Balance as on June 30, ,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Balance as on July 01, ,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Addition during the period 48, , ,000 Adjustment Balance as on Dec. 31, ,726,380 2,201,313 6,110,696 4,568,665 4,422, ,256,451 5,255,719 3,674,488,795 10,772,336 4,278,802,958 Accumulated Depreciation Balance as on July 01, ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Charged during the year 220,131 1,204, , ,521 27,015,285 1,051, ,234,664 2,693, ,216,821 Adjustment Balance as on June 30, ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 Balance as on July 01, ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 Charged during the period 110, , , ,260 14,745, ,572 55,117,332 1,346,542 73,354,026 Adjustment Balance as on Dec. 31, ,479 4,263,465 3,871,578 3,981,267 94,930,130 2,702, ,950,127 10,547, ,130,079 Written Down Value As on June 30, ,726,380 1,427,900 2,409,501 1,153, , ,885,438 3,079,170 3,349,656,000 1,570,966 3,850,792,905 As on Dec. 31, ,726,380 1,317,834 1,847, , , ,326,321 2,553,598 3,294,538, ,424 3,777,672,879 Allocation of Depreciation: For the Period ended Dec. 31, 2017 For the year ended June 30, 2017 Cost of Sales 55,642, ,285,808 (Depreciation expenses on Plant & Machinery and Maintenance Equipment considered as direct expenses) General & Administrative Expenses 17,711,122 32,931,013 (Other than depreciation expenses on Plant & Machinery and Maintenance Equipment considered as indirect expenses) Total 73,354, ,216, REDHERRING PROSPECTUS

175 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Reporting Entity: 1.01 Background of the Company: Baraka Patenga Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on June 07, 2011 as a Private Limited Company and converted as a Public Limited Company under the Companies Act on April 28, 2014 having its registered office at Khairun Bhaban (6th floor), Mirboxtola, Sylhet Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and will reduce the fuel cost by 6.40 % annually. For the first time in power sector in Bangladesh, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level Environmental Commitment: The Company ethos places a special emphasis on environmental and ecological issues. Its efforts to preserve and regenerate the environment and expression in the slew of projects and programs it has undertaken in and around its facilities and operations. A Focus area, in this context, is the climate change crisis. The Company beliefs on sustainability have led to a company policy that emphasizes environment preservation. BPPL work on projects that include experiencing green cover, reducing effluents and emission, maintaining local ecological and improving long term coronate sustainability Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh. The following Bangladesh Accounting Standards were applied for the preparation of the financial statements for the period under review: BAS 1 Presentation of Financial Statements BAS 2 Inventories BAS 7 Statement of Cash Flows BAS 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS 10 Events after the reporting period BAS 12 Income Taxes BAS 16 Property, Plant & Equipment BAS 17 Leases BAS 18 Revenue BAS 21 The Effects of change in foreign exchange rates BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 27 Separate Financial Statements BAS 28 Investments in Associates and Joint Ventures BAS 33 Earnings Per Share BAS 37 Provisions, Contingent Liabilities and Contingent Assets. BAS 38 Intangible Assets BFRS 3 Business Combination BFRS 9 Financial Instruments BFRS 10 Consolidated Financial Statements BFRS 13 Fair Value Measurement 2.02 Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: 173

176 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Income Tax Ordinance, 1984 Income Tax Rules, 1984 Value Added Tax Act, 1991 Value Added Tax Rules, 1991 Bangladesh Labor Act, 2006 Securities and Exchange Ordinance, 1969 Securities and Exchange Rules, Date of Authorization The Board of Directors authorized the financial statements for issue on March 01, Reporting Period: The financial period of the Company covers three months from July 01, 2017 to December 31, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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 if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes: Note 04: Property, Plant & Equipment (considering useful life of assets); Note 08: Inventories; Note 09: Investment in Capital market; Note 11: Accounts Receivable; Note 21: Provision for Income Tax; Note 22: Liabilities for expenses Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Principal Accounting Policies: The specific accounting policies have been selected and applied by the Company s management for significant transactions and events that have a material effect within the Framework for preparation and presentation of the financial statements. Financial statements have been prepared and presented in compliance with BAS1 Presentation of Financial Statements. The previous year s figures were formulated according to the same accounting principles. Compared to the previous year, there were no significant changes in the accounting and valuation policies affecting the financial position and performance of the Company. However, changes made to the presentation are explained in the note for each respective item. Accounting and valuation methods are disclosed for reasons of clarity. The Company classified the expenses using the function of expenses method as per BAS Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements. 174 REDHERRING PROSPECTUS

177 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Basis of Consolidation and Separate Financial Statements The company has been complied BFRS 10, BAS 27 & BAS 28 in times of preparing consolidated financial statement and accounted for investment in associates. As per BAS 27 Para 10, investment in associates has been accounted for in the financial statements under Cost Method. Baraka Patenga Power Limited has held shares 51 % as well as management control over as per BAS 28 Para 13 or held share more than 50%, the companies are treated as subsidiary companies. Baraka Patenga Power Limited has held shares more than 20% or equivalent to 50% along with significant influence, the companies are treated as associate companies and consolidation has been done under Equity Method. Controls exist when Baraka Patenga Power Limited has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The accounting policies of subsidiaries have been changed when necessary tie align them with the policies adopted by Baraka Patenga Power Limited. Subsidiaries Name of Subsidiary Date of Acquisition Controlling interest Noncontrolling interest Business Nature Karnaphuli Power Limited 27/Apr/17 51% 49% Power Generation Baraka Shikalbaha Power Limited 13/Dec/17 51% 49% Power Generation 3.02 Property, Plant and Equipment: a. Recognition and Measurement: In compliance with BAS16 (Property, Plant & Equipment) items of property, plant and equipment (PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and nonrefundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner. b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those plants in compliance with BAS23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use. c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the Statement Of Profit or Loss and Other Comprehensive Income as incurred. d. Depreciation: No depreciation is charged on land and land development. Depreciation is recognized in the Statement Of Profit or Loss and Other Comprehensive Income on a straight line basis over the estimated useful lives of each item of property, plant & equipment. Each item of PPE are depreciated from the month in which the assets comes into use or capitalized. In case of disposals, no depreciation is charged in the month of disposal. Depreciation of Power Plant has been charged considering 30 years of useful life and residual value as 10% of original cost, on straight line basis on the ground that management intends to continue with operation after completion of 15 years as stated in the Power Purchase Agreement (PPA). The rate of depreciation on PPE for the current period as follows: Name of the Assets As on Dec. 31, 2017 Land & Land development Furniture & Fixtures 10% Office & Electrical Equipmen 20% Office Decoration 20% Motor Vehicles 20% 175

178 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Building & Civil Construction 6.67% Maintenance Equipment 20% Motor Vehicles(Leasehold Assets) 25% Plant & Machineries 3% e Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Statement Of Profit or Loss and Other Comprehensive Income. f Impairment If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss is recognized as an expense in the Statement Of Profit or Loss and Other Comprehensive Income. g Leased Assets Leases in terms of which the entity assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Each lease payment is allocated to the principal amount and to the finance charges in a such a way to achieve a constant rate on the finance balance outstanding. Recognition and Measurement Finance leases have been recognized as assets and liabilities in the statement of financial position at amounts equal at the inception of lease to the lower of fair value of leased property and present value of minimum lease payments. The interest implicit in the lease has been spread equally over the lease term. Depreciation Finance leases give rise to depreciation expense for a depreciable asset as well as a finance expense for each accounting year. The depreciation policy for depreciable assets is consistent with that for depreciable assets which are owned Financial Instruments A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in Statement Of Profit or Loss and Other Comprehensive Income Advances, deposits & prepayments Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Cash Flow Statement and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987 and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method. 176 REDHERRING PROSPECTUS

179 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Accounts Receivables: Accounts receivables consists of unpaid bills receivables from Bangladesh Power Development Board (BPDB) and unbilled revenue recognized at the Statement of Financial Position date Inventories: Inventories consisting of HFO, lube oil, diesel, alternator grease, coolnet water, spare parts etc. These are for use in the operation and maintenance of power plant. Cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to use. Inventories are valued at cost or net realized valued which ever is lower Provisions: A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation Employee Benefits The Company has entered into an Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited on 18 January 2016 for providing technical and operational support. Features of the Agreement: Type of contract Description of contract Operational, Maintenance, Administrative and Financial Management Agreement with Baraka Power Limited Effective Date: January 1, 2016 Scope of Services: According to Article2, 1st party i.e. Baraka Power Limited shall provide the following supports 1. Operations management; 2. Maintenance management; 3. Commercial and logistics management; 4. Finance and accounting management; 5. Administration and human resource management; 6. Environment and safety management; 7. Any other support as per BPPL s requirement. Terms of payment: 2nd party i.e. BPPL will have to pay Tk. 2,000,000 per month for the rendered support with an increment of 5% on the total amount per annum. Tenure: Valid for 3 years and the duration can be extended through mutual consent of both parties. Termination: The agreement can be terminated by either party giving three months written notice. Due to these reasons no WPPF has been charged in the Statement of Profit or Loss and Other Comprehensive Income as per Bangladesh Labour (Amendments) Act, Foreign Currency Translation: Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on that day. Gain/Loss arising from translation of foreign currency is recognize as Income/Expenses in the Statement Of Profit or Loss and Other Comprehensive Income Revenue Recognition: Revenue is initially recognized in the Statement Of Profit or Loss and Other Comprehensive Income upon supply of electricity based on net energy output on a monthly basis. Net energy output is determined by the Joint meter reading and verification committee consisting of BPPL personnel s and BPDB representatives. After initial recognition, adjustment is made on actual bill paid by the BPDB. 177

180 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Financial Expenses: Financial expenses comprises interest expenses on loan. All borrowing costs are recognized in the Statement Of Profit or Loss and Other Comprehensive Income using effective interest method except to the extent that they are capitalized during construction period of the plants in compliance with BAS23: Borrowing Cost Income Tax: a. Current Tax: No provision for Income Tax on revenue is required to be recognized as the Company has received exemption from all of its taxes from Government of Bangladesh under Private Sector Power Generation Policy & SRO # 211 dated July 01, 2013 for a period of 15 years from starts of its commercial operation date. Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are Income Year Tax Rates Other Income Capital Gain Dividend Income % 15% 20% % 15% 20% % 15% 20% b. Deferred Tax: As the Company is exempted from tax, there is no deferred tax is recognized in reporting period on temporary difference is accrued between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: A there were no potential ordinary shares issued by the Company, so no dilution is taken into effect Leases: The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at the inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Leases are classified as finance leases whenever the terms of lease transfer substantially all the risk and rewards of ownership to the lessee. All other leases are classified as operating leases Contingencies: Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured Impairment At each reporting date indications of impairment are reviewed. We assessed Financial & Nonfinancial assets whether there is objective evidence that in impaired. As on June 30, 2017 the assessment of indicators of impairment reveals that impairment testing is not required for the company. 178 REDHERRING PROSPECTUS

181 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Events after Reporting Period: Events after reporting period that provide additional information about the Company s position at the balance sheet date are reflected in the financial statements. Events after reporting period that are not adjusting event are disclosed as off balance sheet items Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Related party disclosure: As per Bangladesh Accounting Standard (BAS 24) the parties are considered to be related if one of the party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The company carried out transactions in the ordinary course of business on an arm s length basis with its related parties Basis of Preparation of the interim Financial Statements: These interim financial statements should be read in conjunction with the Financial Statements for the year ended 30 June, 2017 (hereafter referred to as the Annual Financial Statements ), as they provide an update to previously reported information. The accounting policies used are consistent with those used in the Annual Financial Statements. The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs). The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended to take into account any presentational changes made in the Annual Financial Statements. The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management s best judgment at the date of the Interim Financial Statements, deviate from the actual, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change. 179

182 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Property, Plant & Equipment: Tk. 3,777,672,879 Cost Opening Balance 4,278,568,958 4,238,050,909 Add: Addition during the period 234,000 40,518,049 4,278,802,958 4,278,568,958 Less: Adjustment during the period Closing Balance of Cost 4,278,802,958 4,278,568,958 Accumulated Depreciation Opening Balance 427,776, ,559,232 Add: Charged during the period 73,354, ,216, ,130, ,776,053 Less: Adjustment during the period Closing Balance of Depreciation 501,130, ,776,053 Written Down Value 3,777,672,879 3,850,792, Details of Property, Plant & Equipment is stated in Schedule B Hypothecation of above PPE on first ranking pari passu basis creating present and future charge with the RJSC against the Term Loan that sanctioned by the United Commercial Bank Limited & Trust Bank Limited. 04.A Consolidated Property, Plant & Equipment: Tk. 3,969,586,453 Baraka Patenga Power Limited 3,777,672,879 3,850,792,905 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 191,913,574 Total 3,969,586,453 3,850,792,905 Details of Consolidated Property, Plant & Equipment is stated in Schedule A Capital WorkinProgress (WIP): Tk. Nil Building & Civil Construction Total (Note: 05.01) Closing Balance of WIP: Tk. Nil Opening Balance 33,208,342 Add: Addition during the period 495,138 33,703,480 Less: Accounted for as PPE (33,703,480) Closing Balance 05.A Consolidated Capital WorkinProgress (WIP): Tk. Nil Baraka Patenga Power Limited Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total Goodwill on Acquisition of Subsidiary: Tk. 1,768,182 Cost of Acquisition 535, ,500 Add: Share of Net Assets Acquired (Note: 06.1) 1,232,682 1,232,682 Goodwill on Acquisition of Subsidiary 1,768,182 1,768, Share of Net Assets Acquired Share Capital 1,050,000 1,050,000 Retained Earnings Brought Forward (2,239,736) (2,239,736) Preacquisition Profit/(loss) (1,227,288) (1,227,288) Net Assets (2,417,024) (2,417,024) Holding Company Portion (51%) (1,232,682) (1,232,682) 180 REDHERRING PROSPECTUS

183 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Investment in Subsidiary: Tk. 535,500 Karnaphuli Power Limited (KPL) 535, ,500 Baraka Shikalbaha Power Limited 510,000 Total 1,045, , Karnaphuli Power Limited, being held 51% equity share & management control by Baraka Patenga Power Limited with effect from April 27, 2017, incorporated as Private Company limited by shares on November 17, 2014 with the prime objective to implement power plants for generating & supplying electricity Baraka Shikalbaha Power Limited, being held 51% equity share & management control by Baraka Patenga Power Limited with effect from its incorporation (i.e. 13 December 2017), as Private Company limited by shares with the prime objective to implement power plants for generating & supplying electricity Inventories: Tk. 785,267,690 Opening Balance 593,283, ,316,800 Add: Purchase during the period 936,441,489 1,915,003,880 1,529,725,217 2,399,320,680 Less: Consumption during the period 744,457,527 1,806,036,952 Closing Balance 785,267, ,283, Closing Balance of Inventories: Tk. 785,267,690 Quantity HFO 12,173,258 Ltr. 386,987, ,594,987 Diesel 14,596 Ltr. 916, ,132 Spare Parts 66,772 Ltr. 313,826, ,167,984 Lube Oil 101,507 Ltr. 82,830,133 56,265,875 Other Lubricants & Chemical 9243 Ltr. & 93 pcs. 706,418 1,265,750 Total 785,267, ,283, A Consolidated Inventories: Tk. 785,267,690 Baraka Patenga Power Limited 785,267, ,283,728 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 785,267, ,283, Investment in Marketable SecuritiesHeld for Sale: Tk. 5,384,614 Cost Opening Balance 6,646,964 Addition during the period 7,500,000 Withdrawal during the period Cash Available on BO A/C at period end (751,443) (1,363) Closing Balance (A) 5,895,521 7,498,637 Gain/(loss) Realized Gain/(loss) 154,017 (802,077) Realized BO Charges (6,398) (8,305) Change in Fair Value of Marketable Securities (658,526) (41,291) Closing Balance (B) (510,907) (851,673) Fair Value of Marketable Securities (AB) 5,384,614 6,646,964 Details of Current Investment Investment Sector No. of Shares Market Price Cost Price Market value as on Change in Fair Value as on Pharmaceuticals & Chemicals 2, , ,804 (24,607) Financial Institutions 21, ,433,712 1,003,800 (429,912) Engineering 3, , ,400 (12,588) Food & Allied 69, ,386,320 3,153,610 (232,710) Total 6,084,431 5,384,614 (699,817) 181

184 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) 09.A Consolidated Investment in Capital Market: Tk. 5,384,614 Baraka Patenga Power Limited 5,384,614 6,646,964 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 5,384,614 6,646, Advances, Deposits & Prepayments: Tk. 26,047,217 Advances: Advance for Other Expenses (Note: 10.01) 60,000 60,000 Advance Income Tax (Note: 10.02) 737, ,294 Advance to Issue Manager 1,150,000 Advance against PPE & Inventory (Note: 10.03) 5,790,226 5,368,094 7,738,030 6,150,388 Deposits: Security Deposit for Utility Connection 625, ,960 Deposits against Storage Tank Rent 5,395,500 5,395,500 Deposits against Lease Rent 291, ,145 Bank Guarantee Margin 9,042,155 9,042,155 SubTotal 15,354,760 15,354,760 Prepayments: Prepayment for Office Rent 234, ,700 Prepayment against Insurance Premium (Note: 10.04) 2,719,727 6,889,973 SubTotal 2,954,427 7,124,673 GrandTotal 26,047,217 28,629, Advance for Other Expenses: Tk. 60,000 RJSC Expenses 20,000 20,000 Rest House Expenses 40,000 40,000 Total 60,000 60, Advance Income Tax: Tk. 737,804 Opening Balance 722, ,962 Addition during the period 15, , ,804 1,104,256 Adjustment during the period (381,962) Closing Balance 737, , Advance against PPE & Inventory: Tk. 5,790,226 Spare Parts & Lubricants 2,765,226 2,134,274 Deposits for RAJUK Plot 1,500,000 L/C Margin and Charges 1,708,820 Land 1,525,000 1,525,000 Total 5,790,226 5,368, Insurance premium amounting Tk. 82,72,500 has paid for the operational coverage from the year May 2017 to April 2018 out of which premium for the period from JulyDecember 2017 has charged to statement of profit or loss and other comprehensive income. 10.A Consolidated Advances, Deposits & Prepayments: Tk. 435,604,577 Baraka Patenga Power Limited 26,047,217 28,629,821 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 409,557,360 51,116, ,604,577 79,746,306 Less: Inter Company Adjustment 16,295,600 Total 419,308,977 79,746, REDHERRING PROSPECTUS

185 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Accounts Receivables: Tk. 426,393,486 Bangladesh Power Development Board (BPDB) 426,393, ,765,565 Total 426,393, ,765,565 Aging Schedule of Accounts Receivables: Duration Invoiced 030 days 171,813, ,467,214 Invoiced 3160 days 177,145, ,846,664 Invoiced 6190 days 5,465,697 1,635,432 Invoiced days 29,137,329 2,985,236 Invoiced days 42,831,019 15,727,900 Invoiced over 365 days 377,103,119 Total 426,393, ,765,565 Discloser as per Para F of Schedule XI, Para1 of the Companies Act, 1994: Debts exceeding 06 months 42,831, ,831,019 Other debts less provision 383,562, ,934, ,393, ,765,565 Debts considered good and secured 426,393, ,765,565 Debts considered good without debtors personal security Debts considered doubtful or bad Debts due from companies same management Maximum debt due by director or officers at any time 426,393, ,765, A Consolidated Accounts Receivables: Tk. 426,393,486 Baraka Patenga Power Limited 426,393, ,765,565 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 426,393, ,765, Other Receivables: Tk. 605,472,630 Mr. Galib (Security Service Bill) 22,000 10,000 Karnaphuli Power Limited 605,450,630 Total 605,472,630 10, A Consolidated Other Receivables: Tk. 605,472,630 Baraka Patenga Power Limited 605,472,630 10,000 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 605,472,630 10,000 Less: Inter Company Adjustment 605,450,630 Total 22,000 10,

186 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Cash & Cash Equivalents: Tk. 14,099,594 Cash in Hand 2,051,375 3,515,590 Sub Total 2,051,375 3,515,590 Cash at Bank Trust Bank Ltd., Sylhet Cor. Br. (A/C # ) 791,074 16,835,028 Trust Bank Ltd., Naval Rd. Br., Ctg. (A/C # ) 226, ,752 UCBL, CD A/C, Bijoy Nagar Br. (A/C # ) 295,408 8,368 UCBL, STD A/C, Bijoy Nagar Br. (A/C # ) 121,097 43,395 Social Islami Bank Ltd., Sylhet Br. (A/C # ) 3,824 29,399 Prime Bank Ltd., Sylhet Br. (A/C # ) 1,010 1,585 BRAC Bank Ltd., Gulshan Br. (A/C # ) Modhumoti Bank, Motijheel Br. (A/C # ) Sub Total 1,439,413 17,125,102 Cash available on BO A/C at period end 752,806 1,363 Sub Total 752,806 1,363 Fixed Deposit Receipt Trust Bank Limited (BG Margin) United Commercial Bank Limited (BG Margin) 3,500,000 3,500,000 United Commercial Bank Limited (LC Margin) 856, ,000 IPDC Finance Limited 5,500,000 5,500,000 Sub Total 9,856,000 9,856,000 Grand Total 14,099,594 30,498, The reconciliation of bank balance has been performed and found in order Cash in hand has been counted by the management at the period end. 13.A Consolidated Cash & Cash Equivalents: Tk. 15,147,108 Baraka Patenga Power Limited 14,099,594 30,498,055 Baraka Shikalbaha Power Limited 1,000,000 Karnaphuli Power Limited 47,514 27,309 Total 15,147,108 30,525, Share Capital: Tk. 992,250,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2017) Issued, Subscribed and Paidup: 99,225,000 Ordinary Shares of Tk. 10 each 992,250, ,250,000 (99,225,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2017) Shareholding Position was as follows: Sl. No. Name of shareholders Percentage of Shareholdings Amount in Tk Baraka Power Limited 51.00% 51.00% 506,047, ,047, Faisal Ahmed Chowdhury 3.00% 3.00% 29,767,500 29,767, Gulam Rabbani Chowdhury 3.00% 3.00% 29,767,500 29,767, Fahim Ahmed Chowdhury 0.86% 0.86% 8,505,000 8,505, Md. Shirajul Islam 1.06% 1.06% 10,500,000 10,500, Monzur Kadir Shafi 1.59% 1.59% 15,750,000 15,750, Afzal Rashid Chowdhury 1.06% 1.06% 10,500,000 10,500, Touhidul Islam 0.85% 0.85% 8,400,000 8,400, Other Shareholders 37.59% 37.59% 373,012, ,012,500 Total % % 992,250, ,250, REDHERRING PROSPECTUS

187 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) 14.A Consolidated Share Capital: Tk. 992,250,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the period ended June 30, 2017) Issued, Subscribed and Paidup: 99,225,000 Ordinary Shares of Tk. 10 each 992,250, ,250,000 (99,225,000 Ordinary shares of Tk. 10 each in the period ended June 30, 2017) NonControlling Interest : Tk. 109,761 NonControlling Interest arised on Acquisition (Note :15.01) 490,000 (1,184,342) PostAcquisition NonControlling Profit/(loss) (Note: 16.00) (380,239) Net Assets 109,761 (1,184,342) NonControlling Interest arised on Acquisition: Tk. 490,000 Share Capital 1,000,000 1,050,000 Retained Earnings Brought Forward (2,239,736) Preacquisition Profit/(loss) (1,227,288) Net Assets 1,000,000 (2,417,024) NonControlling Interest Arised on Acquisition (49% of Net Assets) 490,000 (1,184,342) NonControlling Interest for the Period: Tk. (380,239) Karnaphuli Power Limited [49% Profit/(loss)] (285,546) Baraka Shikalbaha Power Limited [49% Profit/(loss)] (94,693) NonControlling Interest for the Period (380,239) Term Loan: Tk. 2,766,874,768 NonCurrent Maturity United Commercial Bank Limited (IPFF) 956,902,130 1,009,821,935 Trust Bank Limited (IPFF) 396,281, ,383,185 United Commercial Bank Limited (PFI) 533,830, ,077,922 Trust Bank Limited (PFI) 412,759, ,055,821 BRAC Bank Limited 96,166, ,536,454 SubTotal 2,395,939,086 2,565,875,317 Current Maturity United Commercial Bank Limited (IPFF) 112,372, ,952,138 Trust Bank Limited (IPFF) 46,981,950 48,561,131 United Commercial Bank Limited (PFI) 75,055,261 70,880,540 Trust Bank Limited (PFI) 60,575,679 57,237,229 BRAC Bank Limited 42,740,532 42,740,532 Accrued Interest 33,209,644 36,128,134 SubTotal 370,935, ,499,704 GrandTotal 2,766,874,768 2,937,375,021 Particulars UCBL & TBL (IPFF loan) UCBL & TBL (PFI loan) UCBL & TBL (Take Over) Brac Bank Ltd Interest Rate 6 months LIBOR + 30 basis point + 2.0% p.a. Tenor 12 years (including 02 years grace period) Purpose To develop and implement project; 9.00 % p.a % p.a % p.a. 9.5 years (including 06 months grace period) 08 years 04 years To take over other bank & NBFI loan To takeover IPDC Finance Loan Repayment Amount 5.50 crore/qua. (appx.) 3.11 crore/qua crore/qua crore/month Expiry 30/Oct/ /Sep/ /Sep/ /Mar/

188 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) The security package for both United Commercial Bank Limited and Trust Bank Limited (IPFF & PFI) term loan are as follows: Mortgage of project land; Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and equipment on first ranking pari passu basis creating present and future charge with the RJSC; Establishment of Escrow Account and Debt Service Account with appropriate cash flow; Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee; Copayee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer. United Commercial Bank Limited (as mandated lead arranger) has been sanctioned USD million through Investment Promotion & Financing Facility (IPFF) of Bangladesh Bank funded by IDA of World Bank. As Participating Financial Institute s (PFI) participation portion; United Commercial Bank Limited & Trust Bank Limited has been sanctioned BDT million & BDT million respectively. Subsequently, UCBL & TBL jointly has been taken over the other bank finance with existing security package. Security Package for BRAC Bank Limited i. Corporate Guarantee of Baraka Power Limited; ii. Directors Personal Guarantee; iii. 50,00,000 nos. of Baraka Power Limited sponsor s share; 17.A Consolidated Term Loan (Long Term): Tk. 2,395,939,086 Baraka Patenga Power Limited 2,395,939,086 2,565,875,317 Karnaphuli Power Limited Total 2,395,939,086 2,565,875, B Consolidated Term Loan (Short Term): Tk. 370,935,682 Baraka Patenga Power Limited 370,935, ,499,704 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 370,935, ,499, Finance Lease Liability: Tk. 305,568 Non Current Maturity Prime Finance & Investment Limited SubTotal Current Maturity Prime Finance & Investment Limited 305,568 1,918,096 SubTotal 305,568 1,918,096 GrandTotal 305,568 1,918,096 Interest Rate Tenor Repayment Amount Purpose 15 % p.a., 13% p.a. 04 years, Maturity on: 23/Jan/2018 Tk. 282,347 only per month; To purchase two units of Motor Vehicle; Corporate Guarantee of Baraka Power Limited Personal Guarantee of Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury. Obligation under Finance Lease has been recognized as liability in the Statement of Financial Position, from the date of inception of the lease agreement, at amount equal at the inception of lease to the lower of fair value of leased assets and present value of minimum lease payment. 186 REDHERRING PROSPECTUS

189 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) The Principal amount of lease obligation payable after the date of statement of financial position is as follows : Particulars Future Minimum Lease Payment Interest Present Value of minimum lease payment Present Value of minimum lease payment Not Later than one year 309,166 3, ,568 1,918,096 Later than one year but not later than five years Later than five years Total obligation under finance lease 309,166 3, ,568 1,918, A Consolidated Finance Lease Liability (Long Term): Tk. 0 Baraka Patenga Power Limited Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 18.B Consolidated Finance Lease Liability (Short Term): Tk. 305,568 Baraka Patenga Power Limited 305,568 1,918,096 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 305,568 1,918, Short Term Liabilities: Tk. 649,932,643 Short Term Working Capital Facility 500,000, ,000,000 Bank Overdraft United Commercial Bank Limited* 149,932, ,809,310 Total 649,932, ,809,310 * United Commercial Bank Limited has been sanctioned overdraft facility of Tk million at interest rate of 9.00% p.a. for the purpose of meeting up day to day expenditure of the Company. 19.A Consolidated Short Term Liabilities: Tk. 650,108,643 Baraka Patenga Power Limited 649,932, ,809,310 Baraka Shikalbaha Power Limited 176,000 Karnaphuli Power Limited 54,515,490 Total 650,108, ,324, Provision for Income Tax: Tk. 3,738,857 Opening Balance 9,000 4,169,433 Add: Addition during the period 3,729,857 9,000 3,738,857 4,178,433 Less: Adjustment during the period 3,684,436 Less: Prior period s adjustment 484,997 Closing Balance 3,738,857 9, A Consolidated Provision for Income Tax: Tk. 3,740,947 Baraka Patenga Power Limited 3,738,857 9,000 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 2,090 1,579 Total 3,740,947 10,

190 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Liabilities for Expenses: Tk. 1,009,906 Particulars Office Rent 99,906 99,906 Utility Expenses 119,822 Directors Remuneration 565,000 Audit Fee 345, ,000 Total 1,009, , A Consolidated Liabilities for Expenses: Tk. 1,077,656 Baraka Patenga Power Limited 1,009, ,728 Baraka Shikalbaha Power Limited 17,250 Karnaphuli Power Limited 50,500 28,750 Total 1,077, , Holding Company Balance: Tk. 67,279,614 Baraka Power Limited 67,279,614 Total 67,279, A Consolidated Holding Company Balance: Tk. 67,279,614 Baraka Patenga Power Limited 67,279,614 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 67,279, Accounts Payables: Tk. 282,111,219 RollsRoyce 35,032,609 15,686,000 Vitol Asia Pvt Ltd. 177,324, ,602,565 Skil Tech BD 328,632 Adex Engineering Ltd. 814, ,678 MJL Bangladesh Ltd. 18,638,080 11,597,520 Ejab Distribution Ltd. 7,413,120 12,355,200 South Eastern Tank Terminal Ltd. 1,948,375 4,735,822 Sylora Link 1,753, ,090 ABB Limited 5,973,204 Twinco PTE Limited 29,392,680 Akter Refractory Solutions 1,757 GEA Westfalia Separator 3,819,286 Total 282,111, ,792,507 Aging Schedule of Accounts Payables: Duration Billed 030 days 103,972, ,968,371 Billed 3160 days 23,824,136 Billed 6190 days Billed days 178,138,982 Billed days Billed over 365 days Total 282,111, ,792, A Consolidated Accounts Payables: Tk. 333,792,507 Baraka Patenga Power Limited 282,111, ,792,507 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 282,111, ,792, Others Payables: Tk. 99,225,000 Dividend Payable 99,225,000 Total 99,225, REDHERRING PROSPECTUS

191 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) % cash dividend for the year has been approved in AGM held on 14 December, Out of which interim cash 10% has been disbursed earlier and remaining 10% cash dividend has subsequently been disbursed on 09 January, A Consolidated Other Payables: Tk. 99,225,000 Baraka Patenga Power Limited 99,225,000 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 99,225, Revenue: Tk. 1,144,108,972 Capacity Proceeds 236,852, ,873,603 Variable Operational & Maintenance Proceeds 67,913,389 69,616,998 Fuel Proceeds* 839,343,582 1,237,361,725 Total 1,144,108,972 1,527,852,326 * Fuel proceeds as well as fuel consumption is decreased by 32% and 33% respectively from previous period which indicates relatively consistent trend of transaction. 25.A Consolidated Revenue: Tk. 1,144,108,972 Baraka Patenga Power Limited 1,144,108,972 1,527,852,326 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 1,144,108,972 1,527,852, Cost of Revenue: Tk. 839,552,234 Fuel Consumption (Note: 26.01) 698,066,645 1,047,415,210 Lubricant & Chemical Consumption (Note: 26.02)* 23,150,875 20,080,507 Spare Parts Consumption (Note: 26.03) 23,240,007 31,664,575 Electricity Bill on FGD Plant 452, ,625 O & M Service Expenses** 12,600,000 12,000,000 Fuel Tank Rent 14,616,473 14,322,418 Oil Carrying Expenses 4,474,098 5,214,079 Insurance Premium 4,170,246 4,287,264 Depreciation on Plant & Machinery 55,642,904 55,117,332 Repair & Maintenances on Plant & Machinery 3,138,013 2,836,562 Total 839,552,234 1,193,787,572 * Lubricants & Chemical consists of Diesel, Lube oil, Caustic Soda, Grease, Coolnet water, Maxi Guard etc. ** Baraka Patenga Power Limited (BPPL) has been entered into a Deed of Agreement for Operational, Maintenance, Administrative and Financial Management with Baraka Power Limited (BPL) with effect from January 01, Reason for Significant Increase of Cost of Revenue : Fuel Consumption is decreased by 33% as decrease of HFO (Heavy Furnace Oil) price in international market. O & M Service expenses is increased (105%) due to increase of monthly O&M Service fee by 5% from January 2017 as per agreement Fuel Consumption: Tk. 698,066,645 Opening Balance 392,594, ,952,530 Add: Purchase during the period 692,459, ,812,308 1,085,054,503 1,508,764,838 Closing Balance (386,987,858) (275,698,757) Consumption during the period 698,066,645 1,233,066, Lubricant & Chemical Consumption : Tk. 23,150,875 Opening Balance 58,520,757 31,340,500 Add: Purchase during the period 49,083,449 95,919, ,604, ,259,625 Closing Balance (84,453,331) (107,179,118) Consumption during the period 23,150,875 20,080,

192 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Spare Parts Consumption: Tk. 23,240,007 Opening Balance 142,167,984 3,621,852 Add: Purchase during the period 194,898, ,630, ,066, ,251,919 Closing Balance (313,826,501) (146,675,587) Consumption during the period 23,240,007 21,576, A Consolidated Cost of Revenue: Tk. 839,552,234 Baraka Patenga Power Limited 839,552,234 1,193,787,572 Baraka Shikalbaha Power Limited Karnaphuli Power Limited Total 839,552,234 1,193,787, General & Administrative Expenses: Tk. 27,394,858 Salary & Allowances (Note : 27.01) Directors Remuneration 3,729,000 3,729,000 Communication Expenses 263,800 92,753 Travelling & Conveyance 551, ,558 Utility Expenses 28,091 27,760 Office Rent 1,003, ,255 Vehicle Running Expenses 585, ,839 General Repair & Maintenances 349, ,938 Entertainment & Others 457, ,237 Business Development Expenses 54,380 88,196 Audit Fees 115,000 Fooding & Lodging 221, ,080 Tender Expenses 2,279,665 Uniform & Others 24,000 36,950 Newspaper, Books & Periodicals 1,821 Annual Fees 1,128, ,022 Education & Training 15,000 50,000 Medical Expenses 429,821 Office Stationeries 98,142 12,759 Gardening Expenses 6,580 7,800 Annual Sports and Cultural Expenses 774,863 Gift & Greetings 20,000 Rest House Keeping Expenses 91, ,525 Meeting Attendance Fees 184,000 Depreciation Expenses 17,711,122 16,878,030 Total 27,394,858 26,954, Manpower work under the scope of Operational & Maintenance Agreement with Baraka Power Limited that has been came into effect from January, Audit fees includes Tk. 15,000 as VAT and Tk. 10,000 as Tax; 27.A Consolidated General & Administrative Expenses: Tk. 27,936,290 Baraka Patenga Power Limited 27,394,858 26,954,009 Baraka Shikalbaha Power Limited 193,250 Karnaphuli Power Limited 348,182 Total 27,936,290 26,954, REDHERRING PROSPECTUS

193 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 Particulars Dec. 31, 2017 June 30, 2017 Amount (Tk.) Amount (Tk.) Other Income/(Loss): Tk. 10,814,822 Foreign Exchange (Loss)/Gain (Note 28.01) (5,746,393) (1,611,050) Bank Interest 108,496 6,842,727 Interest Income from Subsidiary Company Loan 16,295,600 Realized Charges on BO Account (6,398) Gain from Capital Market 154,017 Dividend Income from Capital Market 9,500 Total 10,814,822 5,231, Foreign Exchange loss has been Arised from IPFF loan payment. 28.A Consolidated Other Income: Tk. (5,479,317) Baraka Patenga Power Limited 10,814,822 5,231,677 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 1,461 10,816,283 5,231,677 Less: Inter Company Adjustment 16,295,600 Total (5,479,317) 5,231, Financial Expenses: Tk. 114,266,160 Term Finance Expenses 89,608,526 93,349,589 Lease Finance Expenses 81,553 5,785,166 Other Financial Expenses 23,423,639 20,330,459 Bank Charges & Commission 329, ,220 Bank Guarantee Expenses 822, ,000 Total 114,266, ,424, A Consolidated Financial Expenses: Tk. 114,501,675 Baraka Patenga Power Limited 114,266, ,424,434 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 235,515 Total 114,501, ,424, Income Tax Expenses: Tk. 3,729,857 Income Tax Expenses on Other Income (Note : 03.14) 3,727,957 1,831,087 Income Tax Expenses on Dividend Income from Capital Market (Note: 03.14) 1,900 Total 3,729,857 1,831, A Consolidated Income Tax Expenses: Tk. 3,730,368 Baraka Patenga Power Limited 3,729,857 1,831,087 Baraka Shikalbaha Power Limited Karnaphuli Power Limited 511 Total 3,730,368 1,831, Earnings per share: Profit Attributable to Ordinary Shareholders (A) 169,980, ,086,901 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 31.01) (B) 99,225,000 99,225,000 Basic Earnings Per Share (EPS) (C=A/B) A Consolidated Earnings Per Share (EPS): Tk Profit Attributable to Ordinary Shareholders 153,289, ,086,901 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 31.01) 99,225,000 99,225,

194 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Weighted Average Number of Ordinary Shares Outstanding: The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a timeweighted factor. The timeweighted factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year (considering 360 days in a period). Date of Allotment Ordinary Share Calculation Weighted No. of Share Opening as on July 01, ,225,000 99,225,000 Closing as on December 31, ,225,000 99,225, Dilution of Earnings Per Share: No diluted earnings per share is required to be calculated for the year presented as there was no potential ordinary shares has been issued by the company, as such no scope for dilution of shares during the year Contingent Liability: Tk. 173,623,100 Particulars BG No. Expiry Date BDT BDT Bank Guarantee as Operational Security, BPDB* 80/2014, UCBL ,000,000 70,000,000 Bank Guarantee, BPDB 21/2017, UCBL ,144,000 Bank Guarantee, BPDB 75/2017, UCBL ,144,000 Bank Guarantee as Bid Security, BPDB** 64/2016, UCBL ,639,900 45,639,900 Bank Guarantee as Bid Security, BPDB** 63/2016, UCBL ,839,200 44,839,200 Corporate Guarantee to IPDC Finance Ltd. as Lease Security ,000,000 10,000,000 Total 173,623, ,623,100 *Bank Guarantee # 80/2014 issued by United Commercial Bank Limited in favor of Bangladesh Power Development Board (BPDB) as operational security has been renewed for further one year upto ** Bank Guarantee # 63 & 64/2016 have been issued in favor of Bangladesh Power Development Limited (BPDB) as Bid Security in comply with Bid requirement for the project at Shantahar and Bagerhat where BPDB has yet not been released the original copy of aforesaid Bank Guarantee Commitment of Capital Expenditure: Tk. Nil there is no commitment has made by the company against Capital Expenditure. 192 REDHERRING PROSPECTUS

195 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Remittance of Foreign Currency: Tk. 6,735,115 Name of item L/C & TT Number Currency Value as at Value as at in FCY in BDT in FCY in BDT Spare Parts USD 856,069 68,057,451 Spare Parts USD 9, ,791 Spare Parts USD 135,384 10,641,148 Spare Parts USD 14,723 1,168,881 Spare Parts USD 4, ,290 Heavy Furnace Oil (HFO) USD 3,032, ,208,255 Heavy Furnace Oil (HFO) USD 224,353 18,251,108 Spare Parts EURO 23,577 2,026,289 Heavy Furnace Oil (HFO) USD 1,911, ,289,981 Spare Parts EURO 9, ,794 Heavy Furnace Oil (HFO) USD 814,907 63,970,187 Heavy Furnace Oil (HFO) USD 920,100 72,227,868 Heavy Furnace Oil (HFO) USD 846,054 66,435,656 Heavy Furnace Oil (HFO) USD 1,659, ,454,847 Heavy Furnace Oil (HFO) USD 372,078 30,622,040 Spare Parts USD 5, ,669 Spare Parts USD 7, ,920 Spare Parts USD 52,206 4,098,171 Spare Parts EURO 14,586 1,293,501 Spare Parts USD 44,504 3,509,148 Spare Parts USD 166,957 13,571,414 Spare Parts USD 45,881 3,775,132 Spare Parts EURO 92,096 7,999,870 Spare Parts EURO 103,189 9,058,424 Spare Parts 107OCTM EURO 2, ,886 Spare Parts EURO 15,490 1,425,204 Spare Parts EURO 2, ,267 Spare Parts EURO 21,100 1,879,799 Spare Parts USD 17,500 1,373,750 Spare Parts EURO 3, ,080 Spare Parts EURO 3, ,660 Spare Parts USD 1, ,125 Spare Parts USD 145,950 12,703,200 Heavy Furnace Oil (HFO) USD 2,019, ,865,721 Heavy Furnace Oil (HFO) USD 308,525 27,879,234 Heavy Furnace Oil (HFO) USD 3,348, ,559,209 Spare Parts Euro 23,722 2,331,744 Spare Parts Euro 11,694 1,170,445 Spare Parts USD 17,764 1,452,765 Heavy Furnace Oil (HFO) USD 338,974 27,694,142 Spare Parts USD 185,697 15,453,656 Heavy Furnace Oil (HFO) USD 334,909 31,746,817 Total 6,735, ,856,933 11,435, ,755,

196 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Related Party Disclosure A. During the year, the Company carried out a number of transactions with related party in the normal course of business. The names of the related parties and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. Transaction with key management personnel: Employee Benefits Total Taka 3,729,000 3,729, Taka 7,458,000 7,458,000 Key management personnel includes Chairman & Head of Planning & Business Development, Managing Director, Deputy Managing Director, Head of Administration B. Other Related Party Transactions Nature of Relationship Name of the Related Party Holding Company Subsidiary Company "Baraka Shikalbaha Power Limited" Taka Taka Taka Taka 259,138, ,392,319 12,600,000 24,600,000 Interest Charged 1,942,799 4,363,745 Short term loan 589,165,030 Interest Earned 16,295,600 Subsidiary Company 510,000 Share Capital (67,279,614) 605,450,630 Capacity and Generation Name of Plant Halfyearly Licensed Capacity (MwH) Halfyearly Installed Capacity (MwH) 219, ,711 Baraka Patenga Power Limited, Chittagong O & M Service "Karnaphuli Power Limited" Receivables/(Payables) Short term loan Baraka Power Limited Transactions during the year Nature of Transaction Plant factor (% on Licensed Capacity) generation During the 6 months ended on December 31, 2017 Average Maximum Energy Generation (MwH) Energy Sold (MwH) 61.16% 74.04% 135, ,598 Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the period ended on December 31, 2017Name Mr. Faisal Ahmed Chowdhury Mr. Gulam Rabbani Chowdhury Mr. Monzur Kadir Shafi Mr. Fahim Ahmed Chowdhury Designation Period Chairman and Head of Planning & Business Development Managing Director July 17 to December '17 825,000 1,650,000 July 17 to December '17 825,000 1,650,000 Deputy Managing Director & Head of Finance July 17 to December '17 1,749,000 3,498,000 Director & Head of Admin. July 17 to December '17 330, ,000 3,729,000 7,458,000 Total Payment made to Directors are in following way Basic Pay 2,034,000 Household Allowances 1,017,000 Medical Allowance 237,300 Conveyance 101,700 Festival Bonus 339,000 Total 3,729,000 4,068,000 2,034, , , ,000 7,458,000 In addition to the above, directors who attend the board meeting, have drawn board meeting Tk. 5,000 per 194 REDHERRING PROSPECTUS

197 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 director per meeting. The total board meeting attendance fee during the year is Tk. 184,000. b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the period ended on December 31, 2017 Salary Range (Monthly) Officer & Staff Worker Total Employee Head Office Factory Below Tk. 3,000/ Above Tk. 3,000/ Total * Manpower work under the scope of Operational & Maintenance Agreement with Baraka Power Limited that has been came into effect from January Risk Management The company continuously evaluates all risk that affect the company affairs including following Financial Risk. a. Credit Risk; b. Liquidity Risk; c. Market Risk In this respect, both Audit Committee and Internal Audit Department assist the Board by submitting periodic report. a. Credit Risk Credit Risk is the risk of financial loss of the company if a client fails to meet its contractual obligation to the company. The sole client of the company is Bangladesh Power Development Board. All claims of the company are settled on regular basis as per terms of Agreement. We consider that receivable of the company is good and the risk of bad debts is minimum. b. Liquidity Risk Liquidity Risk is the risk that the company will not be able to meet its financial obligations as they fall due. In meeting liquidity requirements, the company adopts a strict policy of managing its assets keeping liquidity as a vital focus and therefore monitors liquidity on a daily basis. c. Market Risk Market Risk is the risk that changes in market prices which will affect the company s income or the value of its holding of financial instruments. The Company considers two types of risk when evaluating market risk ; Interest Rate Risk and Exchange Rate Risk. These two market risks are discussed separately below : Interest Rate Risk Interest rate risk arises when changes in interest rates have an impact to the future cash flows of financial instrument s fair values. To mitigate the interest rate risk Finance department always monitor the Bank Interest Rate and choose/shift best alternative rate for borrowings and lending. Exchange Rate Risk The Company is exposed to currency risk as it imports machinery and equipment against payment of international currencies (USD and EURO). Unfavorable volatility or currency fluctuations may increase import cost and thus affect profitability of the company. However, the management of the company is fully aware of the risks associated with currency fluctuations. Major imported machinery and equipment purchases from abroad has been settled. Currently spare parts are being procured from suppliers from various countries. At the time of price negotiation with suppliers exchange rate is considered sharply. Therefore, management believes that currency risk is not going to hamper business of the Company General Disclosures: a. Comparative figures have been rearranged wherever considered necessary to conform to the current year s presentation. 195

198 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Events after reporting period: a. Karnaphuli Power Limited, being a 51% subsidiary of BPPL, has signed the Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) on February 4, 2018 and has also signed the Implementation Agreement (IA) with the Government of Bangladesh (GOB) represented by the Ministry of Power, Energy and Mineral Resources on the same day. The PPA is signed in connection to the issued Letter of Intent (LOI) to the Company vide memo dated August 8, 2017 of BPDB for implementing HFO fired IPP power plant having capacity of 110 MW on Build, Own, Operate (BOO) basis at Shikalbaha, Chittagong for a term of 15 years from the commercial operation date (COD). b. Bangladesh Power Development Board (BPDB) has issued Letter of Intent (LOI) to Baraka Patenga Power Limited and its consortium vide their memo no dated for implementing HFO fired IPP power plant having capacity of 105 MW on BOO (Build, Own, Operate) basis at Shikalbaha, Chittagong for term of 15 years from the commercial operation date (COD). The required COD of the new plant is 9 months from the date of LOI. Accordingly, BPPL formed a new Subsidiary Company namely Baraka Shikalbaha Power Limited with 51% shareholding under which the aforesaid 105MW power plant will be executed. 196 REDHERRING PROSPECTUS

199 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF Karnaphuli Power Limited as AT AND FOR THE PERIOD ENDED 31 DECEMBER,

200 AUDITORS REPORT To the Shareholder s Karnaphuli Power Limited We have audited the accompanying Statement of Financial Position of Karnaphuli Power Limited, as at December 31, 2017 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the the period from July 01, 2017 to December 31, 2017 (Six month) then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other applicable laws and regulation and for such internal control as management determines, which is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing, an opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), gives a true and fair view of the state of the company s affairs as at December 31, 2017 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act, 1994 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books ; c) The Company s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of accounts ; d) The expenditures incurred and payments made were for the purpose of the company operations. Sd/Dated: Dhaka March 01, REDHERRING PROSPECTUS Malek Siddiqui Wali Chartered Accountants

201 Karnaphuli Power Limited STATEMENT OF FINANCIAL POSITION as on December 31, 2017 Particulars Notes As at December 31, 2017 As at June 30, 2017 Taka Taka ASSETS NonCurrent Assets Property, Plant & Equipment ,913,574 Total NonCurrent Assets 191,913, Current Assets Advance, Deposit and prepayments ,557,360 51,116,485 Cash & Cash Equivalents ,514 27,309 Total Current Assets 409,604,874 51,143,794 TOTAL ASSETS 601,518,448 51,143,794 EQUITY & LIABILITIES Shareholders Equity Share Capital ,050,000 1,050,000 Retained Earnings (5,034,772) (4,452,025) Total Shareholders Equity (3,984,772) (3,402,025) Current Liabilities Short term loan ,450,630 54,515,490 Provision for tax ,090 1,579 Liabilites for expenses ,500 28,750 Total Current Liabilities 605,503,220 54,545,819 TOTAL EQUITY & LIABILITIES 601,518,448 51,143,794 The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01,

202 Karnaphuli Power Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the period ended from July 01, 2017 to December 31, 2017 Particulars Notes For the period ended from July 01, 2017 to December 31, 2017 Taka For the period ended from July 01, 2016 to December 31, 2016 Taka Revenue Cost of Sales Gross Profit General & Administrative Expenses (348,182) (293,778) Profit (Loss) from operation (348,182) (293,778) Other Income , (346,721) (292,830) Financial Expenses (235,515) (83,890) Profit (Loss) before Tax (582,236) (376,720) Income Tax Expenses (511) (332) Profit (Loss) after Tax (582,747) (377,052) The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01, REDHERRING PROSPECTUS

203 Karnaphuli Power Limited STATEMENT OF CHANGES IN EQUITY For the period ended from July 01, 2017 to December 31, 2017 Amount in Taka Particulars Share Capital Balance as on Retained Earnings Total 1,050,000 (4,452,025) (3,402,025) (582,747) (582,747) Balance as on ,050,000 (5,034,772) (3,984,772) Balance as on ,050,000 (2,239,736) (1,189,736) (377,052) (377,052) 1,050,000 (2,616,788) (1,566,788) Net Profit/(Loss) during the year Net Profit/(Loss) during the year Balance as on The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01,

204 Karnaphuli Power Limited STATEMENT OF CASH FLOWS For the period ended from July 01, 2017 to December 31, 2017 Particulars For the period ended from July 01, 2017 to December 31, 2017 For the period ended from July 01, 2016 to December 31, 2016 Taka Taka Cash Flow from Operating Activities: Cash Receipts from Customer & others 1, Cash Paid to Suppliers and others (4,800,682) (293,778) Cash Generated from operating Activities (4,799,221) (292,830) Income Tax Paid (146) (94) Financial Income / (Expenses) (235,515) (1,080) Net Cash from Operating Activities (5,034,882) (294,004) Cash Flow from Investing Activities: Advance aginst PPE (329,048,913) (67,844) Acquisition of PPE (47,000) Net Cash Used in Investing Activities (329,095,913) (67,844) Cash Flow from Financing Activities: Short term Loan (paid)/received from related party/holding company 334,151,000 1,201,622 Net Cash Generated from Financing Activities 334,151,000 1,201,622 Net Cash Inflow/(Outflow) for the period 20, ,774 Opening Cash & Cash Equivalents 27,309 (812,201) Closing Cash & Cash Equivalents 47,514 27,573 The above balance consists of the followings: Cash & Cash Equivalents 47,514 27,573 Total 47,514 27,573 The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01, REDHERRING PROSPECTUS

205 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Reporting Entity: 1.01 Background of the Company: Karnaphuli Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on November 17, 2014 as a Private Limited Company having its registered office at 6/A/1 (1st and 2nd floor), Segunbagicha, Dhaka Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. Karnaphuli Power Limited, itself submitted proposal to Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) to implement 110MW IPP power plant on BOO basis and obtain Letter of intent (LOI) for the development of a HFO based power generation facility of 110MW capacity at Shikalbaha, Chittagong on BuildOwnOperate basis on August 08, Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh. The following Bangladesh Accounting Standards were applied for the preparation of the financial statements for the period under review: BAS 1 Presentation of Financial Statements BAS 7 Statement of Cash Flows BAS 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS 10 Events after the reporting period BAS 12 Income Taxes BAS 16 Property, Plant & Equipment BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 33 Earnings per Share BAS 37 Provisions, Contingent Liabilities and Contingent Assets Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: The Income Tax Ordinance 1984 The Income Tax Rules Date of Authorization The Board of Directors authorized the financial statements for issue on March 01, Reporting Period: The financial period of the Company covers from July 01, 2017 to December 31, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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. 203

206 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements Property, Plant and Equipment: a. Recognition and Measurement: In compliance with BAS16 (Property, Plant & Equipment) items of property, plant and equipment (PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and nonrefundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner. b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those plants in compliance with BAS23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use. c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the Statement of Comprehensive Income as incurred. d Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Statement of Comprehensive Income. e Impairment If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss is recognized as an expense in the Statement of Comprehensive Income Financial Instruments A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in statement of comprehensive income Provisions: A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 204 REDHERRING PROSPECTUS

207 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Income Tax: a. Current Tax: Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are Income Year Tax Rates Other Income Capital Gain Dividend Income % 15% 20% % 15% 20% % 15% 20% b. Deferred Tax: As the Company is exempted from tax, there is no deferred tax is recognized in reporting period on temporary difference is accrued between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: A there were no potential ordinary shares issued by the Company, so no dilution is taken into effect Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Statement of Cash Flows and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987 and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method. 205

208 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 For the period ended Dec 31, 2017 Taka For the period ended June 30, 2017 Taka 4.00 Property, Plant & Equipment Cost Balance as on 01 July 2017 Addition during the period 191,913,574 Adjustment Balance as on 31 December ,913,574 Accumulated Depreciation Balance as on 01 July 2017 Addition during the period Adjustment Balance as on 31 December 2017 WDV As on 31 December ,913,574 Details of PPE is stated in AnnexureA Advance, Deposit and Prepayments: Tk. 409,557,360 Advances: Advance income tax (Note: 05.01) Advance for Plant & Machineries 347,868,668 Advance for Land 57,213,846 51,116,035 Sub Total 405,083,110 51,116,485 Deposits: Bank Guarantee Margin 4,474,250 Sub Total 4,474,250 Grand Total 409,557,360 51,116,485 Details of Property, Plant & Equipment is stated in Annexure A Advance Income Tax: Tk. 596 Opening Addition during the period Adjustment during the period Cash & Cash Equivalents: Tk. 47,514 Cash in Hand 6,090 Sub Total 6,090 Cash at Bank & NBFI Trust Bank Ltd., Sylhet Cor. Br. 38,286 27,309 UCBL, Bijoynagar Branch 3,138 Sub Total 41,424 27,309 Grand Total 47,514 27,309 Cash in hand has been counted by the management at the period end. 206 REDHERRING PROSPECTUS

209 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 For the period ended Dec 31, 2017 Taka For the period ended June 30, 2017 Taka Share Capital: Tk.1,050,000 Authorized: 1,000,000 Ordinary Shares of Tk. 10 each 10,000,000 10,000,000 Issued, Subscribed and Paidup: 105,000 Ordinary Shares of Tk. 10 each 1,050,000 1,050,000 Shareholding Position was as follows: Name of shareholders No. of Share % Baraka Patenga Power Limited 53, % 535, ,500 Baraka Power Limited 26, % 262,500 Mr. Showkat Osman 4, % 49,000 49,000 Mr. Fahim Ahmed Chowdhury 1, % 11,750 49,000 Mr. Nasim Ahmed Chowdhury 4, % 49,000 49,000 Mr. Nayem Ahmed Chowdhury 1, % 10,000 49,000 Ms. Rushina Ahmed Chowdhury 1, % 11,750 49,000 Ms. Momthaz Chowdhury 1, % 11,750 49,000 Mr. Monzur Kadir Shafi 3, % 36,250 73,500 Ms. Shubina Ahmed Chowdhury 1, % 11,750 49,000 Ms. Abeda Khanom Chowdhury 1, % 11,750 49,000 Ms. Syeda Yasmin Hussain 4, % 49,000 49,000 Total 105, % 1,050,000 1,050, Short Term Loan : Tk. 605,450,630 Opening Balance 54,515, ,731 Add : Received during the period 531,945,348 52,489,577 Interest on Loan 18,989,792 1,619, ,450,630 54,515,490 Less : Adjustment 605,450,630 54,515,490 Short term loan received from Baraka Patenga Power Limited, holding company at interest rate 13% p.a Provision for tax: Tk. 2,090 Opening 1,579 1,126 Addition during the period ,090 1,579 Adjustment during the period 2,090 1, Liabilities for Expenses: Tk. 50,500 Opening 28,750 10,000 Addition during the period 28,750 28,750 57,500 38,750 Adjustment during the period 7,000 10,000 50,500 28,

210 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 For the period ended Dec 31, 2017 Taka For the period ended June 30, 2017 Taka General & Administrative Expenses: Tk. 0 Salary & Allowance 158,400 Honorarium 10,000 Travelling & Conveyance 159,806 23,676 Communication Expenses 600 7,200 Entertainment & Others 200 5,910 Photocopy & Stationary 9,443 6,600 RJSC Expenses 28,280 Office Maintenance 1,650 15,600 Fooding & Lodging 103,553 51,522 Business Development Expenses 5,900 24,870 Audit fee 28, , , Other Income: Tk. 1,461 Bank interest 1, , Financial Expenses: Tk. 235,515 Interest on BPL Loan 82,810 Bank Guarantee Expense 206,678 Bank charge 28,837 1, ,515 83, Income tax expenses: Tk.511 Income tax on financial income Related Party Disclosure A. During the period, the Company has taked short term loan from Baraka Patenga Power Limited, a holding company under common management. The names of the related party and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. Name of the Related Party Baraka Patenga Power Ltd Baraka Power Ltd Nature of Relationship Holding Company Common Management Nature of Transaction Transactions during the period Receivables/(Payables) Taka Taka Taka Taka Short term loan 589,155,030 Interest 16,295,600 Short term loan 179,099,504 52,489,577 Interest 2,694,192 1,619,182 (605,450,630) (5,415,490) Note : Transaction through Bank/Cash 334,151,000 Transaction through directly paid by related party 453,093, ,244, REDHERRING PROSPECTUS

211 Karnaphuli Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the period ended on December 31, 2017 Name Designation Period Mr. Monzur Kadir Shafi Chairman July 2017 to December 2017 Mr. Fahim Ahmed Chowdhury Managing Director July 2017 to December 2017 Mr. Md. Shirajul Islam Director July 2017 to December 2017 Mr. Showkat Osman Director July 2017 to December 2017 Total During the period, 2 (two) board meeting was held and no board meeting attendance fee was paid. b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the period ended on December 31, 2017 Salary Range (Monthly) Officer & Staff Worker Total Employee Head Office Factory Below Tk. 3,000/ Above Tk. 3,000/ 2 Total General Disclosures: Comparative figures have been rearranged wherever considered necessary to conform to the current period s presentation Events after reporting period: Karnaphuli Power Limited has signed the Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) on February 04, 2018 and has also signed the Implementation Agreement (IA) with the Government of Bangladesh (GOB) represented by the Ministry of Power, Energy and Mineral Resources on the same day. The PPA is signed in cinnection to the issued Letter of Intent (LOI) to the Company vide memo dated August 08, 2017 of BPDB for implementing HFO fired IPP power plant having capacity of 110 MW on Buil, Own, Operate (BOO) basis at Shikalbaha, Chittagong for a term of 15 years from the commercial operation date (COD). 209

212 Karnaphuli Power Limited SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on December 31, 2017 AnnexureA Cost Depreciation Particulars Balance as on 01 July 2017 Addition during the year Disposal during the year Balance as on 31 December 2017 Rate of Dep. Balance as on 01 July 2017 Addition during the year Disposal during the year Balance as on 31 December 2017 WDV As on 31 December 2017 Land & Land Development 191,833, ,833,274 0% 191,833,274 Office & Electrical Equipment 80,300 80,300 20% 80,300 Total 191,913, ,913, ,913,574 Note : Office & Electrical Equipment were purchased in the month of December, So no depreciation is charged. 210 REDHERRING PROSPECTUS

213 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF Baraka Shikalbaha Power Limited as AT AND FOR THE PERIOD ENDED 31 DECEMBER,

214 AUDITORS REPORT To the Shareholder s Baraka Shikalbaha Power Limited We have audited the accompanying Statement of Financial Position of Baraka Shikalbaha Power Limited, as at December 31, 2017 and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows for the period from December 13, 2017 to December 31, 2017 then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other applicable laws and regulation and for such internal control as management determines, which is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing, an opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), gives a true and fair view of the state of the company s affairs as at December 31, 2017 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act, 1994 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books ; c) The Company s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of accounts ; d) The expenditures incurred and payments made were for the purpose of the company operations. Dated: Dhaka March 01, REDHERRING PROSPECTUS Sd/Malek Siddiqui Wali Chartered Accountants

215 Baraka Shikalbaha Power Limited STATEMENT OF FINANCIAL POSITION As at December 31, 2017 Particulars Notes As at December 31, 2017 Taka ASSETS NonCurrent Assets Current Assets Cash & Cash Equivalent ,000,000 Total Current Assets 1,000,000 TOTAL ASSETS 1,000,000 EQUITY & LIABILITIES Shareholders Equity Share Capital ,000,000 Retained Earnings (193,250) Total Shareholders Equity 806,750 Current Liabilities Loan from Baraka Power Limited ,000 Liabilities for Expenses ,250 Total Current Liabilities 193,250 TOTAL EQUITY & LIABILITIES 1,000,000 The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01,

216 Baraka Shikalbaha Power Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the period ended December 31, 2017 Particulars Notes Period Ended Taka Revenue Cost of Sales Gross Profit General & Administrative Expenses (193,250) Profit (Loss) before Tax (193,250) Income Tax Expenses Profit (Loss) after Tax (193,250) The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01, REDHERRING PROSPECTUS

217 Baraka Shikalbaha Power Limited STATEMENT OF CHANGES IN EQUITY For the period ended December 31, 2017 Amount in Taka Particulars Share Capital Retained Earnings Total Balance as on Net Profit/(Loss) during the year (193,250) (193,250) 1,000,000 1,000,000 Transactions with the shareholders: Issue of Ordinary Share Deposits from Shareholders Balance as on ,000,000 (193,250) 806,750 The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01,

218 Baraka Shikalbaha Power Limited STATEMENT OF CASH FLOWS For the period ended December 31, 2017 Period Ended Taka Particulars Cash Flow from Operating Activities: Cash Receipts from Customer & others Cash Paid to Suppliers and others Cash Generated from operating Activities Income Tax Paid Financial Income / (Expenses) Net Cash from Operating Activities Cash Flow from Investing Activities: Acquisition of PPE Net Cash Used in Investing Activities Cash Flow from Financing Activities: Share Capital 1,000,000 Net Cash Generated from Financing Activities 1,000,000 Net Cash Inflow/(Outflow) for the period 1,000,000 Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 1,000,000 The above balance consists of the followings: Cash in hand 1,000,000 Total 1,000,000 The accounting policies and other notes form an integral part of these financial statements. The financial Statements were approved and authorized by the board of directors on the date of March 01, 2018 and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka March 01, REDHERRING PROSPECTUS

219 Baraka Shikalbaha Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Reporting Entity: 1.01 Background of the Company: Baraka Shikalbaha Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on December 13,2017 as a Private Limited Company having its registered office at 6/A/1 (1st and 2nd floor), Segunbagicha, Dhaka Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. Baraka Patenga Power Limited, Sponsor of company submitted proposal to Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) to implement 05MW IPP power plant on BOO basis and waiting for decision of MPEMR. The company s commercial operation has not yet started Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: The Income Tax Ordinance 1984 The Income Tax Rules Date of Authorization The Board of Directors authorized the financial statements for issue on March 01, Reporting Period: The financial period of the Company covers from December 13, 2017 to December 31, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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 Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, 217

220 Baraka Shikalbaha Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, 2017 which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Statement of Cash Flows and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987 and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method Income Tax: a. Current Tax: Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are Tax Rates Income Year Other Income Capital Gain Dividend Income % 15% 20% b. Deferred Tax: As the Company is exempted from tax, there is no deferred tax is recognized in reporting period on temporary difference is accrued between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: As there was no potential ordinary shares issued by the Company, so no dilution is taken into effect. 218 REDHERRING PROSPECTUS

221 Baraka Shikalbaha Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Cash & Cash Equivalents: Tk. 1,000,000 As on Particulars Cash & Cash Equivalent 1,000,000 Grand Total 1,000, Share Capital: Tk.1,000,000 Authorized: 1,000,000 Ordinary Shares of Tk. 10 each 10,000,000 Issued, Subscribed and Paidup: 100,000 Ordinary Shares of Tk. 10 each 1,000,000 Shareholding Position was as follows: Name of shareholders No. of Share % Taka Baraka Patenga Power Limited 51, % 510,000 Faisal Ahmed Chowdhury 24, % 245,000 Gulam Rabbani Chowdhury 24, % 245,000 Total 100, % 1,000,000 The company has no bank account, as such proceeds from share issue were unable to deposit or receive through banking channel Short Term Loan: Tk. 176,000 Particulars Baraka Power Limited 176, ,000 Loan recognised as Baraka Power Limited paid directly to suppliers in favor of company Liabilities for expenses: Tk. 17,250 Audit Fee Payable 17,250 17, General & Administrative Expenses: Tk. 176,000 Particulars Travelling & Conveyance (Preliminiary Expense 100,000 Audit Fee 17,250 RJSC expense (Preliminiary Expense) 76, , Related Party Disclosure A. During the period, the Company has taked short term loan from Baraka Power Limited, a company under common management. The names of the related party and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. Name of the Related Party Nature of Transaction Transactions during the period Receivables/ (Payables) Nature of Relationship Taka Taka Baraka Power Ltd Common Management Short term loan 176,

222 Baraka Shikalbaha Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the period ended December 31, Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the period ended on December 31, 2017 Name Designation Period Faisal Ahmed Chowdhury Chairman 30 December to 31 December 2017 Gulam Rabbani Chowdhury Managing Director 30 December to 31 December 2017 Total b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the period ended on December 31, 2017 Salary Range (Monthly) Officer & Staff Total Employee Head Office Factory Below Tk. 3,000/ Above Tk. 3,000/ Total General Disclosures: Comparative figures have been rearranged wherever considered necessary to conform to the current period s presentation Events after reporting period: Bangladesh Power Development Board (BPDB) has issued Letter of Intent (LOI) to Baraka Patenga Power Limited and its consortium vide their memo no dated for implementing HFO fired IPP power plant having capacity of 105 MW on BOO (Build, Own, Operate) basis at Shikalbaha, Chittagong for term of 15 years from the commercial operation date (COD). The required COD of the new plant is 9 months from the date of LOI. Accordingly, BPPL formed Baraka Shikalbaha Power Limited with 51% shareholding under which the aforesaid 105MW power plant will be executed. 220 REDHERRING PROSPECTUS

223 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF AND ITS SUBSIDIRIES as AT AND FOR THE YEAR ENDED 30 JUNE,

224 Independent Auditors Report To the Shareholder s of AND ITS SUBSIDIARY We have audited the accompanying Financial Statement of AND ITS SUBSIDIARY, which comprises the consolidate statement of Financial Position as at June 30, 2017 and the Consolidate Statement of Profit or Loss and Other Comprehensive Income, the Consolidate Statement of Changes in Equity, and the Consolidate Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. We have also audited the accompanying Financial Statement of BARAKA PATENGA POWER LIMITED, which comprises the statement of Financial Position as at June 30, 2017 and the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Changes in Equity,and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Generally Accepted Accounting Principles (GAAP), Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), and other applicable laws and regulation and for such internal control as management determines, which is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing, an opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), gives a true and fair view of the state of the company s affairs as at June 30, 2017 and of the results of its operations and its cash flows for the period then ended and comply with the applicable sections of Companies Act, 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books ; c) The Company s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of accounts ; d) The expenditures incurred and payments made were for the purpose of the company operations. Dated: Dhaka October 26, 2017 Sd/ Malek Siddiqui Wali Chartered Accountants 222 REDHERRING PROSPECTUS

225 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF FINANCIAL POSITION as on June 30, 2017 Particulars Notes As on June 30, 2017 As on June 30, 2016 Amount (Tk.) Amount (Tk.) ASSETS NonCurrent Assets Property, Plant & Equipment 04.A 3,850,792,905 3,954,491,677 Capital Work in Progress 05.A 33,208,342 Goodwill on Acquisition of Subsidiary ,768,182 Investment in Associate 08.A 960,000 Total NonCurrent Assets 3,852,561,087 3,988,660,019 Current Assets Inventories 09.A 593,283, ,316,800 Investment in Marketable Securities Held for Sale 10.A 6,646,964 Advances, Deposits & Prepayments 11.A 79,746,306 24,802,370 Accounts Receivables 12.A 766,765, ,097,838 Other Receivables 13.A 10,000 16,000 Holding Company Balance 14.A 20,097,645 Cash & Cash Equivalents 15.A 30,525,364 59,410,835 Total Current Assets 1,476,977,927 1,233,741,488 TOTAL ASSETS 5,329,539,014 5,222,401,507 EQUITY & LIABILITIES Shareholders Equity Share Capital 16.A 992,250, ,000,000 Fair Value Reserve (41,291) Retained Earnings 708,097, ,618,278 1,700,306,525 1,481,618,278 Non Controlling Interest 17 (1,666,992) Total Equity 1,698,639,533 1,481,618,278 NonCurrent Liabilities Term LoanNon Current Maturity 19.A 2,565,875,317 2,895,449,376 Finance Lease LiabilityNon Current Maturity 20.A 1,918,097 Total NonCurrent Liabilities 2,565,875,317 2,897,367,473 Current Liabilities Term LoanCurrent Maturity 19.B 371,499, ,050,637 Finance Lease LiabilityCurrent Maturity 20.B 1,918,096 2,928,519 Short Term Liabilities 21.A 357,324, ,716,916 Provision for Income Tax 22.A 10,579 4,169,433 Liabilities for Expenses 23.A 478, ,684 Accounts Payables 24.A 333,792,507 5,109,567 Total Current Liabilities 1,065,024, ,415,756 TOTAL EQUITY & LIABILITIES 5,329,539,014 5,222,401,507 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Dated: Sylhet October 26,

226 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended June 30, 2017 Particulars Notes For the year ended June 30, 2017 Amount (Tk) For the year ended June 30, 2016 Amount (Tk) Revenue 25.A 2,648,485,011 2,119,185,034 Cost of Revenue 26.A (2,003,865,451) (1,487,507,065) Gross Profit 644,619, ,677,969 General & Administrative Expenses 27.A (59,946,268) (69,554,248) Operating Profit 584,673, ,123,721 Other Income/(Loss) 28.A (9,681,257) 4,596,307 Financial Expenses 29.A (257,996,023) (278,136,946) Profit before Tax 316,996, ,583,082 Over Provision in Prior year s Income Tax Expenses ,997 Income Tax Expenses 30.A (9,121) (2,093,704) Profit after Tax 317,471, ,489,378 Other Comprehensive Income/(loss) from Investment in Marketable Securities (41,291) Total Comprehensive Income for the year 317,430, ,489,378 Profit Attributable To: Owners of the company 317,954, ,489,378 Non controlling interest (482,650) 317,471, ,489,378 Total Comprehensive Income Attributable To: Owners of the company 317,913, ,489,378 Non controlling interest (482,650) 317,430, ,489,378 Earnings per Share: Basic Earnings Per Share 31.A (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26, REDHERRING PROSPECTUS

227 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended June 30, 2017 Amount in Taka Equity Attributable to Owners of the Company Particulars Balance as on NonControlling Interest Arised on Acquisition Fair Value Reserve Share Capital Non Controlling Interest Total Total Equity 945,000, ,618,278 1,481,618,278 1,481,618,278 (1,184,342) (1,184,342) (41,291) (41,291) (41,291) 317,954, ,954,538 (482,650) 317,471,888 47,250,000 (47,250,000) (99,225,000) (99,225,000) (99,225,000) 992,250,000 (41,291) 708,097,816 1,700,306,525 (1,666,992) 1,698,639,533 Increase/(Decrease) in Fair Value Net Profit During the year Retained Earnings Transactions with the shareholders: Issue of Bonus Share for the year Payment of Interim Cash 10% for the year Balance as on Amount in Taka Equity Attributable to Owners of the Company Particulars Balance as on Net Profit/(Loss) during the year Fair Value Reserve Share Capital Retained Earnings Total Non Controlling Interest Total Equity 945,000, ,628,900 1,289,628,900 1,289,628, ,489, ,489, ,489,378 (94,500,000) (94,500,000) (94,500,000) 536,618,278 1,481,618,278 1,481,618,278 Transactions with the shareholders: Payment of Interim Cash 10% for the year Balance as on ,000,000 The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/Company Secretary Sd/Managing Director Sd/Sd/Head of Finance Director Sd/Chairman Sd/Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26,

228 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended June 30, 2017 Particulars For the year ended June 30, 2017 Amount (Tk) For the year ended June 30, 2016 Amount (Tk) Cash Flow from Operating Activities: Cash Receipts from Customer & others 2,517,142,027 2,246,965,421 Cash Paid to Suppliers (1,681,726,308) (1,283,287,656) Cash Paid to others (26,977,461) (44,425,885) Cash Generated from operating Activities 808,438, ,251,880 Financial Expenses (260,424,455) (238,698,392) Income Tax Paid (4,024,802) (353,641) Net Cash from Operating Activities 543,989, ,199,847 Cash Flow from Investing Activities: Acquisition of PPE (29,072,120) (21,823,217) Disposal of Assets 850,000 Investment in Associate 450,000 (450,000) Cash Balance of Subsidiary on Acquisition 27,573 Acquisition of Subsidiary (25,500) Investment in Marketable Securities Held for Sale (6,688,255) Short Term Loan from / (to) Related Party 27,177,619 Net Cash Provided by / (Used in) Investing Activities (35,308,302) 5,754,402 Cash Flow from Financing Activities: Term Loan Repayment (300,814,572) (7,125,194) Short term loan (154,695,723) (443,159,582) Lease Finance (2,928,520) (2,555,945) Transaction with Holding Company 20,097,645 (117,528,065) Dividend Paid (99,225,000) (94,500,000) Net Cash Used in Financing Activities (537,566,170) (664,868,786) Net Cash Inflow/(Outflow) for the period (28,885,471) 21,085,463 Opening Cash & Cash Equivalents 59,410,835 38,325,372 Closing Cash & Cash Equivalents 30,525,364 59,410,835 The above balance consists of the followings: Cash in hand 3,515,590 3,191,896 Cash at bank 17,152,411 3,664,939 Cash available on BO A/C at Year End 1,363 Fixed Deposit Receipt 9,856,000 52,554,000 Total 30,525,364 59,410,835 Net Operating Cash Flows Per Share (NOCFPS) The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26, REDHERRING PROSPECTUS

229 Baraka Patenga Power Limited and Its Subsidiary CONSOLIDATED SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on June 30, 2017 Particulars Land & Land Development Furniture & fixture Office & Electrical Equipment Freehold Assets Motor Vehicles Building & Civil Construction Office Decoration Maintenance Equipment Plant & Machineries Motor Vehicles (Leasehold Asset) Rate of Depreciation 0.00% 10.00% 20.00% 20.00% 20.00% 6.67% 20.00% 3.00% 25.00% ScheduleA Total Cost Balance as on 01 July ,748,880 2,008,436 4,872,288 4,568,665 7,098, ,659,151 3,223,250 3,674,488,795 10,772,336 4,236,440,057 Addition during the year 977, ,928 1,101,608 2,032,469 4,286,505 Adjustment (2,675,653) Balance as on 30 June ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,240,726,562 Balance as on 01 July ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,238,050,909 Addition during the year 17,949 88,800 40,411,300 40,518,049 Adjustment Balance as on 30 June ,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Accumulated Depreciation Balance as on 01 July ,780 1,381,361 1,587,245 3,375,354 26,379, , ,363,467 3,815, ,475,273 Addition during the year 204,502 1,067, ,733 1,330,465 26,790, , ,234,664 2,693, ,135,292 Adjustment (2,051,333) (2,051,333) Balance as on 30 June ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Balance as on 01 July ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Addition during the year 220,131 1,204, , ,521 27,015,285 1,051, ,234,664 2,693, ,216,821 Adjustment Balance as on 30 June ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 Written Down Value As on 30 June ,726,380 1,427,900 2,409,501 1,153, , ,885,438 3,079,170 3,349,656,000 1,570,966 3,850,792,905 Allocation of Depreciation: For the year ended June 30, 2017 For the year ended June 30, 2016 Cost of Sales 111,285, ,135,268 (Depreciation expenses on Plant & Machinery and Maintenance Equipment considered as direct expenses) General & Administrative Expenses 32,931,013 33,000,024 (Other than depreciation expenses on Plant & Machinery and Maintenance Equipment considered as indirect expenses) Total 144,216, ,135,

230 Baraka Patenga Power Limited STATEMENT OF FINANCIAL POSITION as on June 30, 2017 Particulars Notes As on Dec. 31, 2017 As on June 30, 2017 Amount (Tk.) Amount (Tk.) ASSETS NonCurrent Assets Property, Plant & Equipment ,850,792,905 3,954,491,677 Capital Work in Progress ,208,342 Investment in Subsidiary ,500 Investment in Associate ,000 Total NonCurrent Assets 3,851,328,405 3,988,660,019 Current Assets Inventories ,283, ,316,800 Investment in Marketable Securities Held for Sale ,646,964 Advances, Deposits & Prepayments ,629,821 24,802,370 Accounts Receivables ,765, ,097,838 Other Receivables ,000 16,000 Holding Company Balance ,097,645 Cash & Cash Equivalents ,498,055 59,410,835 Total Current Assets 1,425,834,133 1,233,741,488 TOTAL ASSETS 5,277,162,538 5,222,401,507 EQUITY & LIABILITIES Shareholders Equity Share Capital ,250, ,000,000 Fair Value Reserve (41,291) Retained Earnings 708,600, ,618,278 Total Shareholders Equity 1,700,808,876 1,481,618,278 NonCurrent Liabilities Term LoanNon Current Maturity ,565,875,317 2,895,449,376 Finance Lease LiabilityNon Current Maturity ,918,097 Total NonCurrent Liabilities 2,565,875,317 2,897,367,473 Current Liabilities Term LoanCurrent Maturity ,499, ,050,637 Finance Lease LiabilityCurrent Maturity ,918,096 2,928,519 Short Term Liabilities ,809, ,716,916 Provision for Income Tax ,000 4,169,433 Liabilities for Expenses , ,684 Accounts Payables ,792,507 5,109,567 Total Current Liabilities 1,010,478, ,415,756 TOTAL EQUITY & LIABILITIES 5,277,162,538 5,222,401,507 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26, REDHERRING PROSPECTUS

231 Baraka Patenga Power Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended June 30, 2017 Particulars Notes For the year ended June 30, 2017 Amount (Tk) For the year ended June 30, 2016 Amount (Tk) Revenue ,648,485,011 2,119,185,034 Cost of Revenue (2,003,865,451) (1,487,507,065) Gross Profit 644,619, ,677,969 General & Administrative Expenses (59,843,606) (69,554,248) Operating Profit 584,775, ,123,721 Other Income/(Loss) (9,681,602) 4,596,307 Financial Expenses (257,113,460) (278,136,946) Profit before Tax 317,980, ,583,082 Over Provision in Prior year s Income Tax Expenses 484,997 Income Tax Expenses (9,000) (2,093,704) Profit after Tax 318,456, ,489,378 Other Comprehensive Income/(loss) from Investment in Marketable Securities (41,291) Total Comprehensive Income for the year 318,415, ,489,378 Earnings per Share: Basic Earnings Per Share (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26,

232 Baraka Patenga Power Limited STATEMENT OF CHANGES IN EQUITY For the year ended June 30, 2017 Amount in Taka Particulars Share Capital Fair Value Reserve Retained Earnings Total Balance as on ,000, ,618,278 1,481,618,278 Increase/(Decrease) in Fair Value (41,291) (41,291) Net Profit/(Loss) during the year 318,456, ,456,889 Transactions with the shareholders: Issue of Bonus Share for the year ,250,000 (47,250,000) Payment of Interim Cash 10% for the (99,225,000) (99,225,000) year Balance as on ,250,000 (41,291) 708,600,167 1,700,808,876 Amount in Taka Particulars Share Capital Fair Value Reserve Retained Earnings Total Balance as on ,000, ,628,900 1,289,628,900 Net Profit/(Loss) during the year 286,489, ,489,378 Transactions with the shareholders: Payment of Interim Cash 10% for the (94,500,000) (94,500,000) year Balance as on ,000, ,618,278 1,481,618,278 The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26, REDHERRING PROSPECTUS

233 Baraka Patenga Power Limited STATEMENT OF CASH FLOWS For the year ended June 30, 2017 Particulars For the year ended June 30, 2017 Amount (Tk) For the year ended June 30, 2016 Amount (Tk) Cash Flow from Operating Activities: Cash Receipts from Customer & others 2,517,141,682 2,246,965,421 Cash Paid to Suppliers (1,681,726,308) (1,283,287,656) Cash Paid to others (26,903,549) (44,425,885) Cash Generated from operating Activities 808,511, ,251,880 Financial Expenses (260,423,880) (238,698,392) Income Tax Paid (4,024,768) (353,641) Net Cash from Operating Activities 544,063, ,199,847 Cash Flow from Investing Activities: Acquisition of PPE (1,934,149) (21,823,217) Disposal of Assets 850,000 Investment in Associate 450,000 (450,000) Investment in Subsidiary (25,500) Investment in Marketable Securities Held for Sale (6,688,255) Short Term Loan from / (to) Related Party 27,177,619 Net Cash Provided by / (Used in) Investing Activities (8,197,904) 5,754,402 Cash Flow from Financing Activities: Term Loan Repayment (300,814,572) (7,125,194) Short term loan (181,907,606) (443,159,582) Lease Finance (2,928,520) (2,555,945) Transaction with Holding Company 20,097,645 (117,528,065) Dividend Paid (99,225,000) (94,500,000) Net Cash Used in Financing Activities (564,778,053) (664,868,786) Net Cash Inflow/(Outflow) for the period (28,912,780) 21,085,463 Opening Cash & Cash Equivalents 59,410,835 38,325,372 Closing Cash & Cash Equivalents 30,498,055 59,410,835 The above balance consists of the followings: Cash in hand 3,515,590 3,191,896 Cash at bank 17,125,102 3,664,939 Cash available on BO A/C at Year End 1,363 Fixed Deposit Receipt 9,856,000 52,554,000 Total 30,498,055 59,410,835 Net Operating Cash Flows Per Share (NOCFPS) The financial statements were approved by the Board of directors on October 26, 2017 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Sylhet October 26,

234 Baraka Patenga Power Limited SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on June 30, 2017 ScheduleB Freehold Assets Land & Land Development Furniture & fixture Office Decoration 0.00% 10.00% 20.00% 20.00% 20.00% 6.67% 20.00% 3.00% 25.00% 127,748,880 2,008,436 4,872,288 4,568,665 7,098, ,659,151 3,223,250 3,674,488,795 10,772,336 4,236,440, , ,928 1,101,608 2,032,469 4,286,505 (2,675,653) Balance as on 30 June ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,240,726,562 Balance as on 01 July ,726,380 2,183,364 5,973,896 4,568,665 4,422, ,659,151 5,255,719 3,674,488,795 10,772,336 4,238,050,909 Addition during the year* 17,949 88,800 40,411,300 40,518,049 Adjustment 128,726,380 2,201,313 6,062,696 4,568,665 4,422, ,070,451 5,255,719 3,674,488,795 10,772,336 4,278,568,958 Balance as on 01 July ,780 1,381,361 1,587,245 3,375,354 26,379, , ,363,467 3,815, ,475,273 Addition during the year 204,502 1,067, ,733 1,330,465 26,790, , ,234,664 2,693, ,135,292 Adjustment (2,051,333) (2,051,333) Balance as on 30 June ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Balance as on 01 July ,282 2,448,936 2,500,978 2,654,486 53,169,728 1,125, ,598,131 6,508, ,559,232 Addition during the year 220,131 1,204, , ,521 27,015,285 1,051, ,234,664 2,693, ,216,821 Adjustment Balance as on 30 June ,413 3,653,195 3,414,711 3,539,007 80,185,013 2,176, ,832,795 9,201, ,776,053 As on 30 June ,726,380 1,630,082 3,524,960 2,067,687 1,768, ,489,423 4,130,314 3,459,890,664 4,264,050 3,954,491,677 As on 30 June ,726,380 1,427,900 2,409,501 1,153, , ,885,438 3,079,170 3,349,656,000 1,570,966 3,850,792,905 Rate of Depreciation Motor Vehicles Building & Civil Construction Maintenance Equipment Motor Vehicles (Leasehold Asset) Office & Electrical Equipment Particulars Plant & Machineries Total Cost Balance as on 01 July 2015 Addition during the year Adjustment Balance as on 30 June 2017 Accumulated Depreciation Written Down Value * Addition on Building & Civil Construction Transferred from WIP 33,703,480 Addition during the year 6,707,820 40,411,300 Allocation of Depreciation: Cost of Sales General & Administrative Expenses Total 232 For the year ended June 30, 2017 For the year ended June 30, ,285, ,135,268 32,931,013 33,000, ,216, ,135,292 REDHERRING PROSPECTUS (Depreciation expenses on Plant & Machinery and Maintenance Equipment considered as direct expenses) (Other than depreciation expenses on Plant & Machinery and Maintenance Equipment considered as indirect expenses)

235 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Reporting Entity: 1.01 Background of the Company: Baraka Patenga Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on June 07, 2011 as a Private Limited Company and converted as a Public Limited Company under the Companies Act on April 28, 2014 having its registered office at 102 Azadi, Mirboxtola, Sylhet Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and will reduce the fuel cost by 6.40 % annually. For the first time in power sector in Bangladesh, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level Environmental Commitment: The Company ethos places a special emphasis on environmental and ecological issues. Its efforts to preserve and regenerate the environment and expression in the slew of projects and programs it has undertaken in and around its facilities and operations. A Focus area, in this context, is the climate change crisis. The Company beliefs on sustainability have led to a company policy that emphasizes environment preservation. BPPL work on projects that include experiencing green cover, reducing effluents and emission, maintaining local ecological and improving long term coronate sustainability Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh. The following Bangladesh Accounting Standards were applied for the preparation of the financial statements for the period under review: BAS 1 Presentation of Financial Statements BAS 2 Inventories BAS 7 Statement of Cash Flows BAS 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS 10 Events after the reporting period BAS 12 Income Taxes BAS 16 Property, Plant & Equipment BAS 17 Leases BAS 18 Revenue BAS 21 The Effects of change in foreign exchange rates BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 27 Separate Financial Statements BAS 28 Investments in Associates and Joint Ventures BAS 33 Earnings Per Share BAS 37 Provisions, Contingent Liabilities and Contingent Assets. BAS 38 Intangible Assets BFRS 3 Business Combination BFRS 9 Financial Instruments BFRS 10 Consolidated Financial Statements BFRS 13 Fair Value Measurement 2.02 Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: Income Tax Ordinance, 1984 Income Tax Rules,

236 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Value Added Tax Act, 1991 Value Added Tax Rules, 1991 Bangladesh Labor Act, 2006 Securities and Exchange Ordinance, 1969 Securities and Exchange Rules, Date of Authorization The Board of Directors authorized the financial statements for issue on October 26, Reporting Period: The financial period of the Company covers one year from July 01, 2016 to June 30, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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 if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes: Note 04: Property, Plant & Equipment (considering useful life of assets); Note 08: Investment in Capital market; Note 09: Inventories; Note 11: Accounts Receivable; Note 19: Provision for Income Tax; Note 20: Liabilities for expenses Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements Basis of Consolidation and Separate Financial Statements The company has been complied BFRS 10, BAS 27 & BAS 28 in times of preparing consolidated financial statement and accounted for investment in associates. As per BAS 27 Para 10, investment in associates has been accounted for in the financial statements under Cost Method. Baraka Patenga Power Limited has held shares 51 % as well as management control over as per BAS 28 Para 13 or held share more than 50%, the companies are treated as subsidiary companies. Baraka Patenga Power Limited has held shares more than 20% or equivalent to 50% along with significant influence, the companies are treated as associate companies and consolidation has been done under Equity Method. Controls exist when Baraka Patenga Power Limited has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The accounting policies of subsidiaries have been changed when necessary tie align them with the policies adopted by Baraka Patenga Power Limited. 234 REDHERRING PROSPECTUS

237 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Subsidiaries Name of Subsidiary Date of Acquisition Controlling interest Noncontrolling interest Business Nature Karnaphuli Power Limited April 27, % 49% Power Generation 3.02 Property, Plant and Equipment: a. Recognition and Measurement: In compliance with BAS16 (Property, Plant & Equipment) items of property, plant and equipment (PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and nonrefundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner. b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those plants in compliance with BAS23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use. c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the Statement Of Profit or Loss and Other Comprehensive Income as incurred. d. Depreciation: No depreciation is charged on land and land development. Depreciation is recognized in the Statement Of Profit or Loss and Other Comprehensive Income on a straight line basis over the estimated useful lives of each item of property, plant & equipment. Each item of PPE are depreciated from the month in which the assets comes into use or capitalized. In case of disposals, no depreciation is charged in the month of disposal. Depreciation of Power Plant has been charged considering 30 years of useful life and residual value as 10% of original cost, on straight line basis on the ground that management intends to continue with operation after completion of 15 years as stated in the Power Purchase Agreement (PPA). The rate of depreciation on PPE for the current period as follows: Name of the Assets As on June 30, 2017 Land & Land development Furniture & Fixtures 10% Office & Electrical Equipment 20% Office Decoration 20% Motor Vehicles 20% Building & Civil Construction 6.67% Maintenance Equipment 20% Motor Vehicles(Leasehold Assets) 25% Plant & Machineries 3% e Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Statement Of Profit or Loss and Other Comprehensive Income. 235

238 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 f Impairment If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss is recognized as an expense in the Statement Of Profit or Loss and Other Comprehensive Income. g Leased Assets Leases in terms of which the entity assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Each lease payment is allocated to the principal amount and to the finance charges in a such a way to achieve a constant rate on the finance balance outstanding. Recognition and Measurement Finance leases have been recognized as assets and liabilities in the statement of financial position at amounts equal at the inception of lease to the lower of fair value of leased property and present value of minimum lease payments. The interest implicit in the lease has been spread equally over the lease term. Depreciation Finance leases give rise to depreciation expense for a depreciable asset as well as a finance expense for each accounting year. The depreciation policy for depreciable assets is consistent with that for depreciable assets which are owned Financial Instruments A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in Statement Of Profit or Loss and Other Comprehensive Income Advances, deposits & prepayments Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Cash Flow Statement and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 1987 and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method Accounts Receivables: Accounts receivables consists of unpaid bills receivables from Bangladesh Power Development Board (BPDB) and unbilled revenue recognized at the Statement of Financial Position date Inventories: Inventories consisting of HFO, lube oil, diesel, alternator grease, coolnet water, spare parts etc. These are for use in the operation and maintenance of power plant. Cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to use. Inventories are valued at cost or net realized valued which ever is lower Provisions: A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or con 236 REDHERRING PROSPECTUS

239 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 structive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation Employee Benefits The Company has entered into an Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited on 18 January 2016 for providing technical and operational support. Features of the Agreement: Type of contract Operational, Maintenance, Administrative and Financial Management Agreement with Baraka Power Limited Description of contract Effective Date: January 1, 2016 Scope of Services: According to Article2, 1st party i.e. Baraka Power Limited shall provide the following supports 1. Operations management; 2. Maintenance management; 3. Commercial and logistics management; 4. Finance and accounting management; 5. Administration and human resource management; 6. Environment and safety management; 7. Any other support as per BPPL s requirement. Terms of payment: 2nd party i.e. BPPL will have to pay Tk. 2,000,000 per month for the rendered support with an increment of 5% on the total amount per annum. Tenure: Valid for 3 years and the duration can be extended through mutual consent of both parties. Termination: The agreement can be terminated by either party giving three months written notice Foreign Currency Translation: Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on that day. Gain/Loss arising from translation of foreign currency is recognize as Income/Expenses in the Statement Of Profit or Loss and Other Comprehensive Income Revenue Recognition: Revenue is initially recognized in the Statement Of Profit or Loss and Other Comprehensive Income upon supply of electricity based on net energy output on a monthly basis. Net energy output is determined by the Joint meter reading and verification committee consisting of BPPL personnel s and BPDB representatives. After initial recognition, adjustment is made on actual bill paid by the BPDB Financial Expenses: Financial expenses comprises interest expenses on loan. All borrowing costs are recognized in the Statement Of Profit or Loss and Other Comprehensive Income using effective interest method except to the extent that they are capitalized during construction period of the plants in compliance with BAS23: Borrowing Cost Income Tax: a. Current Tax: No provision for Income Tax on revenue is required to be recognized as the Company has received exemption from all of its taxes from Government of Bangladesh under Private Sector Power Generation Policy & SRO # 211 dated July 01, 2013 for a period of 15 years from starts of its commercial operation date. Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are 237

240 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Income Year Tax Rates Other Income Capital Gain Dividend Income % 15% 20% % 15% 20% % 15% 20% b. Deferred Tax: As the Company is exempted from tax, there is no deferred tax is recognized in reporting period on temporary difference is accrued between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: As there were no potential ordinary shares issued by the Company, so no dilution is taken into effect Leases: The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at the inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Leases are classified as finance leases whenever the terms of lease transfer substantially all the risk and rewards of ownership to the lessee. All other leases are classified as operating leases Contingencies: Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured Impairment At each reporting date indications of impairment are reviewed. We assessed Financial & Nonfinancial assets whether there is objective evidence that in impaired. As on June 30, 2017 the assessment of indicators of impairment reveals that impairment testing is not required for the company Events after Reporting Period: Events after reporting period that provide additional information about the Company s position at the balance sheet date are reflected in the financial statements. Events after reporting period that are not adjusting event are disclosed as off balance sheet items Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Related party disclosure: As per Bangladesh Accounting Standard (BAS 24) the parties are considered to be related if one of the party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The company carried out transactions in the ordinary course of business on an arm s length basis with its related parties. 238 REDHERRING PROSPECTUS

241 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) Property, Plant & Equipment: Tk. 3,850,792,905 Cost Opening Balance 4,238,050,909 4,236,440,057 Add: Addition during the year 40,518,049 4,286,505 4,278,568,958 4,240,726,562 Less: Adjustment during the year 2,675,653 Closing Balance of Cost 4,278,568,958 4,238,050,909 Accumulated Depreciation Opening Balance 283,559, ,475,273 Add: Charged during the year 144,216, ,135, ,776, ,610,565 Less: Adjustment during the year 2,051,333 Closing Balance of Depreciation 427,776, ,559,232 Written Down Value 3,850,792,905 3,954,491, Details of Property, Plant & Equipment is stated in Schedule B Hypothecation of above PPE on first ranking pari passu basis creating present and future charge with the RJSC against the Term Loan that sanctioned by the United Commercial Bank Limited & Trust Bank Limited. 04.A Consolidated Property, Plant & Equipment: Tk. 3,850,792,905 Baraka Patenga Power Limited 3,850,792,905 3,954,491,677 Karnaphuli Power Limited Total 3,850,792,905 3,954,491, Capital Work in Progress (WIP): Tk. 0 Building & Civil Construction 33,208,342 Total (Note: 05.01) 33,208, Closing balance of WIP: Tk. 0 Opening Balance 33,208,342 17,196,630 Add: Addition during the year 495,138 16,011,712 33,703,480 33,208,342 Less: Accounted for as PPE (33,703,480) Closing Balance 33,208, A Consolidated Capital Work in Progress (WIP): Tk. 0 Baraka Patenga Power Limited 33,208,342 Karnaphuli Power Limited Total 33,208, Goodwill on Acquisition of Subsidiary: Tk. 1,768,182 Cost of Acquisition 535,500 Add: Share of Net Assets Acquired (Note: 06.1) 1,232,682 Goodwill on Acquisition of Subsidiary 1,768, Share of Net Assets Acquired Share Capital 1,050,000 Retained Earnings Brought Forward (2,239,736) Preacquisition Profit/(loss) (1,227,288) Net Assets (2,417,024) Holding Company Portion (51%) (1,232,682) Investment in Subsidiary: Tk. 535,500 Karnaphuli Power Limited (KPL) 535,500 Total 535,500 Karnaphuli Power Limited, being held 51% equity share & management control by Baraka Patenga Power Limited with effect from April 27, 2017, incorporated as Private Company limited by shares on November 17, 2014 with the prime objective to implement power plants for generating & supplying electricity. 239

242 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) 8.00 Investment in Associate: Tk. 0 Baraka Apparels Limited (Note: 08.01) 450,000 Karnaphuli Power Limited (Note: 08.02) 510,000 Total 960, The Company transferred its entire holding of Baraka Apparels Limited with a value of Tk. 450,000 on The Company has increased its holding at Karnaphuli Power Limited to 51% on from the earlier holding of 48.57%. It was reported under Investment in Associate in F/Y A Consolidated Investment in Associate: Tk. 0 Baraka Patenga Power Limited 960,000 Karnaphuli Power Limited Total 960, Inventories: Tk. 593,283,728 Opening Balance 484,316, ,914,882 Add: Purchase during the year 1,915,003,880 1,222,361,500 2,399,320,680 1,804,276,382 Less: Consumption during the year 1,806,036,952 1,319,959,582 Closing Balance (Note09.01) 593,283, ,316, Closing Balance of Inventories Quantity HFO 13,755,956 ltr. 392,594, ,698,757 Diesel 15,748 ltr. 989,132 1,179,869 Spare Parts 30,199 pcs. 142,167, ,675,587 Lube Oil 68,930 ltr. 56,265,875 59,595,815 Other Lubricants & Chemical 8,775 ltr. & 553 pcs. 1,265,750 1,166,772 Total 593,283, ,316, A Consolidated Inventories: Tk. 593,283,728 Baraka Patenga Power Limited 593,283, ,316,800 Karnaphuli Power Limited Total 593,283, ,316, Investment in Marketable SecuritiesHeld for Sale: Tk. 6,646,964 Cost Opening Balance Addition during the year 7,500,000 Withdrawal during the year Cash Available on BO A/C at year end (1,363) Closing Balance (A) 7,498,637 Gain/(loss) Realized Gain/(loss) (802,077) Realized BO Charges (8,305) Change in Fair Value of Marketable Securities (41,291) Closing Balance (B) (851,673) Fair Value of Marketable Securities (AB) 6,646,964 Details of Current Investment Investment Sector No. of Shares Market Price Cost Price Market value as on Change in Fair Value as on Pharmaceuticals & Chemicals 2, , ,960 (7,440) Engineering 43, ,813,484 5,800,700 (12,784) Financial Institutions 3, , ,160 (16,500) Miscellaneous 1, , ,144 (4,567) Total 6,688,255 6,646,964 (41,291) 240 REDHERRING PROSPECTUS

243 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) 10.A Consolidated Investment in Capital Market: Tk. 6,646,964 Baraka Patenga Power Limited 6,646,964 Karnaphuli Power Limited Total 6,646, Advances, Deposits & Prepayments: Tk. 28,629,821 Advances: Advance for Other Expenses (Note : 11.01) 60, ,525 Advance for Public Issue Expenses 1,058,600 Advance Income Tax (Note : 11.02) 722, ,962 Advance against PPE & Inventory (Note : 11.03) 5,368,094 9,220,674 SubTotal 6,150,388 11,201,761 Deposits: Security Deposit for Utility Connection 625, ,960 Deposits against Storage Tank Rent 5,395,500 5,395,500 Deposits against Lease Rent 291, ,145 Bank Guarantee Margin 9,042,155 SubTotal 15,354,760 6,312,605 Prepayments: Prepayment for Office Rent 234, ,700 Prepayment against Insurance Premium (Note : 11.04) 6,889,973 7,083,304 SubTotal 7,124,673 7,288,004 GrandTotal 28,629,821 24,802, Advance for Other Expenses: Tk. 60,000 RJSC Expenses 20,000 Rest House Expenses 40,000 40,000 Employees Medical Expenses 500,525 Total 60, , Advance Income Tax: Tk. 722,294 Opening Balance 381, ,771 Addition during the year 722, ,191 1,104, ,962 Adjustment during the year (381,962) Closing Balance 722, , Advance against PPE & Inventory: Tk. 5,368,094 Spare Parts & Lubricants 2,134,274 1,572,942 Storage Tank 5,375,558 L/C Margin and Charges 1,708, ,174 Land 1,525,000 1,525,000 Total 5,368,094 9,220, Insurance premium amounting Tk. 82,72,500 has paid for the operational coverage from the year May 2017 to April 2018 out of which premium for May and June 2017 has charged to statement of profit or loss and other comprehensive income. 11.A Consolidated Advances, Deposits & Prepayments: Tk. 79,746,306 Baraka Patenga Power Limited 28,629,821 24,802,370 Karnaphuli Power Limited 51,116,485 Total 79,746,306 24,802, Accounts Receivables: Tk. 766,765,565 Bangladesh Power Development Board (BPDB) 766,765, ,097,838 Total 766,765, ,097,

244 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) Aging Schedule of Accounts Receivables Duration Invoiced 030 days 148,467, ,273,018 Invoiced 3160 days 220,846, ,386,773 Invoiced 6190 days 1,635,432 21,464,022 Invoiced days 2,985,236 57,576,239 Invoiced days 15,727,900 65,977,056 Invoiced over 365 days 377,103,119 71,420,730 Total 766,765, ,097,838 Discloser as per Para F of Schedule XI, Para1 of the Companies Act, 1994 Debts exceeding 06 months 392,831, ,397,786 Other debts less provision 373,934, ,700, ,765, ,097,838 Debts considered good and secured 766,765, ,097,838 Debts considered good without debtors personal security Debts considered doubtful or bad Debts due from companies same management Maximum debt due by director or officers at any time 766,765, ,097, A Consolidated Accounts Receivables: Tk. 766,765,565 Baraka Patenga Power Limited 766,765, ,097,838 Karnaphuli Power Limited Total 766,765, ,097, Other Receivables: Tk. 10,000 Mr. Galib (Security Service Bill) 10,000 16,000 Total 10,000 16, A Consolidated Other Receivables: Tk. 10,000 Baraka Patenga Power Limited 10,000 16,000 Karnaphuli Power Limited Total 10,000 16, Holding Company Balance: Tk. 0 Baraka Power Limited 20,097,645 Total 20,097, A Consolidated Holding Company Balance: Tk. 0 Baraka Patenga Power Limited 20,097,645 Karnaphuli Power Limited Total 20,097, REDHERRING PROSPECTUS

245 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) Cash & Cash Equivalents: Tk. 30,498,055 Cash in Hand 3,515,590 3,191,896 Sub Total 3,515,590 3,191,896 Cash at Bank Trust Bank Ltd., Sylhet Cor. Br. (A/C # ) 16,835,028 1,492,531 Trust Bank Ltd., Naval Rd. Br., Ctg. (A/C # ) 206, ,759 UCBL, CD A/C, Bijoy Nagar Br. (A/C # ) 8,368 1,166,328 UCBL, STD A/C, Bijoy Nagar Br. (A/C # ) 43, ,209 Social Islami Bank Ltd., Sylhet Br. (A/C # ) 29,399 67,877 Prime Bank Ltd., Sylhet Br. (A/C # ) 1,585 4,235 BRAC Bank Ltd., Gulshan Br. (A/C # ) 575 Modhumoti Bank, Motijheel Br. (A/C # ) Sub Total 17,125,102 3,664,939 Cash available on BO A/C at Year End 1,363 Sub Total 1,363 Fixed Deposit Receipt Trust Bank Limited (BG Margin) 15,000,000 United Commercial Bank Limited (BG Margin) 3,500,000 3,500,000 United Commercial Bank Limited (LC Margin) 856,000 28,554,000 IPDC Finance Limited 5,500,000 5,500,000 Sub Total 9,856,000 52,554,000 Grand Total 30,498,055 59,410, The reconciliation of bank balance has been performed and found in order Cash in hand has been counted by the management at the year end. 15.A Consolidated Cash & Cash Equivalents: Tk. 30,525,364 Baraka Patenga Power Limited 30,498,055 59,410,835 Karnaphuli Power Limited 27,309 Total 30,525,364 59,410, Share Capital: Tk. 992,250,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2016) Issued, Subscribed and Paidup: 99,225,000 Ordinary Shares of Tk. 10 each 992,250, ,000,000 (94,500,000 Ordinary shares of Tk. 10 each in the year ended June ) Shareholding Position was as follows: Sl. No. Name of shareholders Percentage of Shareholdings Amount in Tk Baraka Power Limited 51.00% 51.00% 506,047, ,950, Faisal Ahmed Chowdhury 3.00% 3.00% 29,767,500 28,350, Gulam Rabbani Chowdhury 3.00% 3.00% 29,767,500 28,350, Fahim Ahmed Chowdhury 0.86% 0.86% 8,505,000 8,100, Md. Shirajul Islam 1.06% 1.06% 10,500,000 10,000, Monzur Kadir Shafi 1.59% 1.59% 15,750,000 15,000, Afzal Rashid Chowdhury 1.06% 1.06% 10,500,000 10,000, Touhidul Islam 0.85% 0.85% 8,400,000 8,000, Other Shareholders 37.59% 37.59% 373,012, ,250,000 Total % % 992,250, ,000,

246 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars As at June 30, 2017 As at June 30, 2016 Amount (Tk) Amount (Tk) The Company has been raised its paidup capital from Tk. 945,000,000 to 992,250,000 by issuing 4,725,000 nos. of bonus share as declared 05% stock dividend for the year in comply with the BSEC s consent. 16.A Consolidated Share Capital: Tk. 992,250,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2016) Issued, Subscribed and Paidup: 99,225,000 Ordinary Shares of Tk. 10 each 992,250, ,000,000 (94,500,000 Ordinary shares of Tk. 10 each in the year ended June ) NonControlling Interest : Tk. 1,666,992 NonControlling Interest Arised on Acquisition (Note :17.01) (1,184,342) PostAcquisition NonControlling Profit/(loss) (Nott: 18.00) (482,650) Net assets (1,666,992) NonControlling Interest Arised on Acquisition: Tk. 1,184,342 Share Capital 1,050,000 Retained Earnings Brought Forward (2,239,736) Preacquisition Profit/(loss) (1,227,288) Net assets (2,417,024) NonControlling Interest Arised on Acquisition (49% of Net Assets) (1,184,342) NonControlling Interest (PostAcquisition): Tk. 482,650 49% Postacquisition Profit/(loss) (482,650) (482,650) NonControlling Interest (Postacquisition) (482,650) (482,650) Term Loan: Tk. 2,937,375,021 NonCurrent Maturity United Commercial Bank Limited (IPFF) 1,009,821,935 1,124,110,413 Trust Bank Limited (IPFF) 419,383, ,790,391 United Commercial Bank Limited (PFI) 575,077, ,833,155 Trust Bank Limited (PFI) 444,055, ,846,461 BRAC Bank Limited 117,536,454 IPDC Finance Ltd. 156,868,956 SubTotal 2,565,875,317 2,895,449,376 Current Maturity United Commercial Bank Limited (IPFF) 115,952, ,314,708 Trust Bank Limited (IPFF) 48,561,131 47,037,764 United Commercial Bank Limited (PFI) 70,880,540 63,226,209 Trust Bank Limited (PFI) 57,237,229 51,102,144 BRAC Bank Limited 42,740,532 IPDC Finance Ltd. 32,931,258 Accrued Interest 36,128,134 39,438,554 SubTotal 371,499, ,050,637 GrandTotal 2,937,375,021 3,241,500, REDHERRING PROSPECTUS

247 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Particulars UCBL & TBL (IPFF loan) UCBL & TBL (PFI loan) UCBL & TBL (Take Over) Brac Bank Ltd Interest Rate Tenor Purpose Repayment Amount 6 months LIBOR + 30 basis point + 2.0% p.a. 12 years (including 02 years grace period) To develop and implement project; 9.00 % p.a % p.a % p.a. 9.5 years (including 06 months grace period) 08 years 04 years To take over other bank & NBFI loan To takeover IPDC Finance Loan 5.50 crore/qua. (appx.) 3.11 crore/qua crore/qua crore/month Expiry 30/Oct/ /Sep/ /Sep/ /Mar/2021 The security package for both United Commercial Bank Limited and Trust Bank Limited (IPFF & PFI) term loan are as follows: Mortgage of project land; Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and equipment on first ranking pari passu basis creating present and future charge with the RJSC; Establishment of Escrow Account and Debt Service Account with appropriate cash flow; Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee; Copayee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer. United Commercial Bank Limited (as mandated lead arranger) has been sanctioned USD million through Investment Promotion & Financing Facility (IPFF) of Bangladesh Bank funded by IDA of World Bank. As Participating Financial Institute s (PFI) participation portion; United Commercial Bank Limited & Trust Bank Limited has been sanctioned BDT million & BDT million respectively. Subsequently, UCBL & TBL jointly has been taken over the other bank finance with existing security package. Security Package for BRAC Bank Limited i. Corporate Guarantee of Baraka Power Limited; ii. Directors Personal Guarantee; iii. 50,00,000 nos. of Baraka Power Limited sponsor s share; 19.A Consolidated Term Loan (Long Term): Tk. 2,565,875,317 Baraka Patenga Power Limited 2,565,875,317 2,895,449,376 Karnaphuli Power Limited Total 2,565,875,317 2,895,449, B Consolidated Term Loan (Short Term): Tk. 371,499,704 Baraka Patenga Power Limited 371,499, ,050,637 Karnaphuli Power Limited Total 371,499, ,050, Finance Lease Liability: Tk. 1,918,096 Non Current Maturity Prime Finance & Investment Limited 1,918,097 SubTotal 1,918,097 Current Maturity Prime Finance & Investment Limited 1,918,096 2,928,519 SubTotal 1,918,096 2,928,519 GrandTotal 1,918,096 4,846,616 Interest Rate Tenor Repayment Amount Purpose 15 % p.a., 13% p.a. 04 years, Maturity on: 23/Jan/2018 Tk. 282,347 only per month; To purchase two units of Motor Vehicle; Corporate Guarantee of Baraka Power Limited Personal Guarantee of Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury. 245

248 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Obligation under Finance Lease has been recognized as liability in the Statement of Financial Position, from the date of inception of the lease agreement, at amount equal at the inception of lease to the lower of fair value of leased assets and present value of minimum lease payment. The Principal amount of lease obligation payable after the date of statement of financial position is as follows : Particulars Future Minimum Lease Payment Interest Present Value of minimum lease payment Present Value of minimum lease payment Not Later than one year 2,003,247 85,151 1,918,096 2,928,519 Later than one year but not later than five years 1,918,097 Later than five years Total obligation under finance lease 2,003,247 85,151 1,918,096 4,846, A Consolidated Finance Lease Liability (Long Term): Tk. 0 Baraka Patenga Power Limited 1,918,097 Karnaphuli Power Limited Total 1,918, B Consolidated Finance Lease Liability (Short Term): Tk. 1,918,096 Baraka Patenga Power Limited 1,918,096 2,928,519 Karnaphuli Power Limited Total 1,918,096 2,928, Short Term Liabilities: Tk. 302,809,310 Short Term Working Capital Facility 200,000, ,067,559 Bank Overdraft United Commercial Bank Limited* 102,809, ,357 Total 302,809, ,716,916 * United Commercial Bank Limited has been sanctioned overdraft facility of Tk million at interest rate of 9.00% p.a. for the purpose of meeting up day to day expenditure of the Company. 21.A Consolidated Short Term Liabilities: Tk. 357,324,800 Baraka Patenga Power Limited 302,809, ,716,916 Karnaphuli Power Limited 54,515,490 Total 357,324, ,716, Provision for Income Tax: Tk. 9,000 Opening Balance 4,169,433 2,250,179 Add: Addition during the year 9,000 2,093,704 4,178,433 4,343,883 Less: Adjustment during the year 3,684, ,450 Less: Prior year s adjustment (Note22.01) 484,997 Closing Balance 9,000 4,169, Adjustment of Tk. 484,997 has been made due to adjust over provision of tax during the Income year ; 22.A Consolidated Provision for Income Tax: Tk. 10,579 Baraka Patenga Power Limited 9,000 4,169,433 Karnaphuli Power Limited 1,579 Total 10,579 4,169, Liabilities for Expenses: Tk. 449,728 Particulars Office Rent 99,906 94,281 Utility Expenses 119, ,403 Audit Fee 230, ,000 Total 449, , REDHERRING PROSPECTUS

249 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, A Consolidated Liabilities for Expenses: Tk. 478,478 Baraka Patenga Power Limited 449, ,684 Karnaphuli Power Limited 28,750 Total 478, , Accounts Payables: Tk. 333,792,507 RollsRoyce 15,686,000 Vitol Asia Pvt Ltd. 287,602,565 Skil Tech BD 328,632 Adex Engineering Ltd. 814,678 MJL Bangladesh Ltd. 11,597,520 Ejab Distribution Ltd. 12,355,200 South Eastern Tank Terminal Ltd. 4,735,822 3,671,749 Sylora Link 672, ,923 SGS Bangladesh Limited 5,119 Jakson International Limited 302,776 Madina Boiler House 51,000 M/S Hasina Enterprise 730,000 Total 333,792,507 5,109,567 Aging Schedule of Accounts Payables 030 days 309,968,371 5,109, days 23,824,136 over 180 days Total 333,792,507 5,109, A Consolidated Accounts Payables: Tk. 333,792,507 Baraka Patenga Power Limited 333,792,507 5,109,567 Karnaphuli Power Limited Total 333,792,507 5,109, Revenue: Tk. 2,648,485,011 Capacity Proceeds 447,379, ,057,770 Variable Operational & Maintenance Proceeds 130,882, ,434,782 Fuel Proceeds* 2,070,222,484 1,556,692,482 Total 2,648,485,011 2,119,185,034 * Fuel proceeds is increased by 33% from previous year whereas fuel consumption is increased by 36% which indicates relatively consistent trend of transaction. 25.A Consolidated Revenue: Tk. 2,648,485,011 Baraka Patenga Power Limited 2,648,485,011 2,119,185,034 Karnaphuli Power Limited Total 2,648,485,011 2,119,185, Cost of Revenue: Tk. 2,003,865,451 Fuel Consumption (Note : 26.01) 1,677,465,782 1,233,066,081 Lubricant & Chemical Consumption (Note : 26.02)* 66,427,312 65,317,169 Spare Parts Consumption (Note:26.03) 62,143,858 21,576,332 Electricity Bill on FGD Plant 1,548,251 1,240,464 O & M Service Expenses** 24,600,000 12,000,000 Fuel Tank Rent 31,474,320 22,119,409 Oil Carrying Expenses 11,398,928 11,988,836 Insurance Premium 8,465,831 4,005,659 Depreciation on Plant & Machinery 111,285, ,234,664 Repair & Maintenances on Plant & Machinery 9,055,361 5,958,451 Total 2,003,865,451 1,487,507,065 * Lubricants & Chemical consists of Diesel, Lube oil, Caustic Soda, Grease, Coolnet water, Maxi Guard etc. ** Baraka Patenga Power Limited (BPPL) has been entered into a Deed of Agreement for Operational, Maintenance, Administrative and Financial Management with Baraka Power Limited (BPL) with effect from January 01,

250 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Reason for Significant Increase of Cost of Sales : Fuel Consumption is increased by 36% as increase of HFO (Heavy Furnace Oil) price in international market. Reason for increase in spare parts consumption (188%) is to replace of schedule spare parts after 10,000 hour operation which is normal schedule maintenance of power plant operation. O & M Service expenses is increased (105%) due to charge of a full year (12 months) expense rather than charged for 6 months in previous income year. Another reason for increasing is to extension of monthly O&M Service fee by 5% from January 2017 as per agreement Fuel Consumption: Tk. 1,677,465,782 Opening Balance 275,698, ,952,530 Add: Purchase during the year 1,794,362, ,812,308 2,070,060,769 1,508,764,838 Closing Balance (392,594,987) (275,698,757) Consumption during the year 1,677,465,782 1,233,066, Lubricant & Chemical Consumption : Tk. 66,427,312 Opening Balance 61,942,456 31,340,500 Add: Purchase during the year 63,005,613 95,919, ,948, ,259,625 Closing Balance (58,520,757) (61,942,456) Consumption during the year 66,427,312 65,317, Spare Parts Consumption: Tk. 62,143,858 Opening Balance 146,675,587 3,621,852 Add: Purchase during the year 57,636, ,630, ,311, ,251,919 Closing Balance (142,167,984) (146,675,587) Consumption during the year 62,143,858 21,576, A Consolidated Cost of Revenue: Tk. 2,003,865,451 Baraka Patenga Power Limited 2,003,865,451 1,487,507,065 Karnaphuli Power Limited Total 2,003,865,451 1,487,507, REDHERRING PROSPECTUS

251 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, General & Administrative Expenses: Tk. 59,843,606 Salary & Allowances (Note : 27.01) 13,068,577 Directors Remuneration 7,458,000 6,240,000 Communication Expenses 472, ,479 Travelling & Conveyance 1,353,005 1,584,873 Utility Expenses 48,043 28,793 Office Rent 2,344,671 2,244,576 AGM & EGM Expenses 136, ,471 Vehicle Running expenses 1,756,970 1,555,010 General Repair & Maintenance 2,135,980 1,742,419 Entertainment & Others 1,608, ,216 Business Development Expenses 679, ,916 Legal Fees & Professional Consultancy 17,250 Fooding & Lodging 636, ,471 Tender Expenses 2,279,665 Advertisement & Publicity 43,368 Audit Fee (Note 27.02) 230, ,000 Photocopy & Others 2,560 23,890 Uniform & Others 268, ,493 Newspaper, Books & Periodicals 1,821 9,330 Printing & Others 231,482 Annual Fee 1,962,462 3,202,563 Donation & Subscription 100,000 Education & Training 66,100 33,025 Office Stationeries 227,502 67,686 Gardening Expenses 28,905 62,020 Health Assistance Expenses 436,821 Annual Sports & Religious Expenses 699, ,250 Gift & Greetings 30,000 83,015 Rest House Keeping Expenses 822, ,197 Meeting Attendance Fee 167, ,250 Public Issue Expenses 1,058,600 Royalty Fee to BPC 300,000 Depreciation Expenses 32,931,013 33,900,628 Total 59,843,606 69,554, Manpower work under the scope of Operational & Maintenance Agreement with Baraka Power Limited that has been came into effect from January Audit fee includes Tk. 30,000 as VAT and Tk. 10,000 as Tax; 27.A Consolidated General & Administrative Expenses: Tk. 59,946,268 Baraka Patenga Power Limited 59,843,606 69,554,248 Karnaphuli Power Limited 102,662 Total 59,946,268 69,554, Other Income/(Loss): Tk. (9,681,602) Foreign Exchange (Loss)/Gain (Note 28.01) (20,279,277) (1,385,702) Interest Income earned on Loan with Related Parties 4,364,577 4,120,052 Bank Interest 6,998,480 1,636,276 Realized Charges on BO Account (8,305) Gain on Sale of Assets 225,681 Capital Loss on Capital Market (802,077) Dividend Income from Capital Market 45,000 Total (9,681,602) 4,596, Foreign Exchange loss has been arised from IPFF loan payment and procurement of spare parts and HFO from foreign source during the reporting period. 249

252 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, A Consolidated Other Income: Tk. (9,681,257) Baraka Patenga Power Limited (9,681,602) 4,596,307 Karnaphuli Power Limited 345 Total (9,681,257) 4,596, Financial Expenses: Tk. 257,113,460 Term Finance Expenses 202,748, ,350,740 Lease Finance Expenses 459, ,198 Other Financial Expenses 52,510,642 33,821,371 Bank Charges & Commission 325, ,637 Bank Guarantee Expenses 1,070, ,000 Total 257,113, ,136, A Consolidated Financial Expenses: Tk. 257,996,023 Baraka Patenga Power Limited 257,113, ,136,946 Karnaphuli Power Limited 882,563 Total 257,996, ,136, Income Tax Expenses: Tk. 9,000 Income Tax Expenses on Other Income (Note : 03.14) 2,093,704 Income Tax Expenses on Dividend Income from Capital Market (Note : 03.14) 9,000 Total 9,000 2,093, A Consolidated Income Tax Expenses: Tk. 9,121 Baraka Patenga Power Limited 9,000 2,093,704 Karnaphuli Power Limited 121 Total 9,121 2,093, Earnings Per Share (EPS): Tk Particulars Profit Attributable to Ordinary Shareholders (A) 318,456, ,489,378 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 31.01) (B) 99,225,000 99,225,000 Basic Earnings Per Share (EPS) (C=A/B) A Consolidated Earnings Per Share (EPS): Tk Profit Attributable to Ordinary Shareholders 317,954, ,489,378 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 31.01) 99,225,000 99,225, Weighted Average Number of Ordinary Shares Outstanding: The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a timeweighted factor. The timeweighted factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year (considering 360 days in a year). Date of Allotment Ordinary Share Weighted No. of Share Opening as on July 01, ,500,000 94,500,000 Issued during the year Closing as on June 30, ,500,000 94,500,000 Date of Allotment Ordinary Share Weighted No. of Share Opening as on July 01, ,500,000 94,500,000 Issued Bonus 5% during the year 4,725,000 4,725,000 Closing as on June 30, ,225,000 99,225, Dilution of Earnings Per Share: No diluted earnings per share is required to be calculated for the year presented as there was no potential ordinary shares has been issued by the company, as such no scope for dilution of shares during the year. 250 REDHERRING PROSPECTUS

253 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Contingent Liability: Tk. 173,623,100 Particulars BG No. Expiry Date Bank Guarantee as Performance Security, BPDB 01/11, TBL ,000,000 Bank Guarantee as Operational Security, BPDB* 80/2014, UCBL ,000,000 70,000,000 Bank Guarantee, BPDB 21/2017, UCBL ,144,000 Bank Guarantee as Bid Security, BPDB** 64/2016, UCBL ,639,900 Bank Guarantee as Bid Security, BPDB** 63/2016, UCBL ,839,200 Corporate Guarantee to IPDC Finance Ltd. as Lease Security ,000,000 Total 173,623, ,000,000 *Bank Guarantee # 80/2014 issued by United Commercial Bank Limited in favor of Bangladesh Power Development Board (BPDB) as operational security has been renewed for further one year upto ** Bank Guarantee # 63 & 64/2016 have been issued in favor of Bangladesh Power Development Limited (BPDB) as Bid Security in comply with Bid requirement for the project at Shantahar and Bagerhat where BPDB has yet not been released the original copy of aforesaid Bank Guarantee Commitment of Capital Expenditure: Tk. Nil There is no commitment has made by the company against Capital Expenditure Remittance of Foreign Currency: Tk. 916,755,606 Name of item L/C & TT Number Currency Value as at Value as at in FCY in BDT in FCY in BDT Spare Parts USD 866,015 68,415,163 Spare Parts USD 201,909 15,890,254 Spare Parts 1070OCTM USD 3, ,494 Spare Parts USD 28,937 2,286,032 Spare Parts USD 39,620 3,122,056 Spare Parts USD 7, ,880 Spare Parts USD 15,622 1,226,580 Spare Parts USD 17,361 1,375,142 Spare Parts USD 8, ,499 Spare Parts USD 19,858 1,574,758 Spare Parts EURO 10, ,037 Heavy Furnace Oil (HFO) USD 5,281, ,103,554 Heavy Furnace Oil (HFO) USD 2,500, ,000,546 Heavy Furnace Oil (HFO) USD 2,407, ,459,762 Heavy Furnace Oil (HFO) USD 2,072, ,119,428 Spare Parts 1070OCTM BDT 209,133 Spare Parts 1070OCTM EURO 2, ,591 Spare Parts 1070OCTM EURO 2, ,591 Spare Parts EURO 15,635 1,427,596 Spare Parts EURO 49,883 4,350,481 Spare Parts EURO 8, ,968 Heavy Furnace Oil (HFO) USD 1,368, ,601,006 Spare Parts EURO 6, ,816 Spare Parts EURO 10, ,217 Heavy Furnace Oil (HFO) USD 1,545, ,553,798 BDT BDT 251

254 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Name of item L/C & TT Number Currency Value as at Value as at in FCY in BDT in FCY in BDT Spare Parts FTT006(UT99) EURO 1, ,714 Spare Parts USD 5, ,194 Spare Parts USD 8, ,800 Spare Parts 107OCTM USD 2, ,332 Heavy Furnace Oil (HFO) USD 184,415 14,494,984 Heavy Furnace Oil (HFO) USD 27,067 2,128,857 Heavy Furnace Oil (HFO) USD 102,233 8,040,653 Heavy Furnace Oil (HFO) USD 90,545 7,121,380 Spare Parts USD 856,069 68,057,451 Spare Parts USD 9, ,791 Spare Parts USD 135,384 10,641,148 Spare Parts USD 14,723 1,168,881 Spare Parts USD 4, ,290 Heavy Furnace Oil (HFO) USD 3,032, ,208,255 Heavy Furnace Oil (HFO) USD 224,353 18,251,108 Spare Parts EURO 23,577 2,026,289 Heavy Furnace Oil (HFO) USD 1,911, ,289,981 Spare Parts EURO 9, ,794 Heavy Furnace Oil (HFO) USD 920,100 72,227,868 Heavy Furnace Oil (HFO) USD 846,054 66,435,656 Heavy Furnace Oil (HFO) USD 1,659, ,454,847 Heavy Furnace Oil (HFO) USD 372,078 30,622,040 Spare Parts USD 5, ,669 Spare Parts USD 7, ,920 Spare Parts USD 52,206 4,098,171 Spare Parts EURO 14,586 1,293,501 Spare Parts USD 44,504 3,509,148 Spare Parts USD 166,957 13,571,414 Spare Parts USD 45,881 3,775,132 Spare Parts EURO 92,096 7,999,870 Spare Parts EURO 103,189 9,058,424 Spare Parts 107OCTM EURO 2, ,886 Spare Parts EURO 15,490 1,425,204 Spare Parts EURO 2, ,267 Spare Parts EURO 21,100 1,879,799 Spare Parts USD 17,500 1,373,750 Spare Parts EURO 3, ,080 Spare Parts EURO 3, ,660 Spare Parts USD 1, ,125 Total 11,435, ,755,606 16,928,315 1,332,373, Related Party Disclosure A. During the year, the Company carried out a number of transactions with related party in the normal course of business. The names of the related parties and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. 252 REDHERRING PROSPECTUS

255 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 Transaction with key management personnel: Taka Taka Employee Benefits 7,458,000 7,200,000 Total 7,458,000 7,200,000 Key management personnel includes Chairman & Head of Planning & Business Development, Managing Director, Deputy Managing Director, Head of Administration B. Other Related Party Transactions Name of the Related Party Baraka Power Limited Nature of Relationship Holding Company Nature of Transaction Transactions during the year Receivables/(Payables) Taka Taka Taka Taka Short term loan 221,392, ,330,208 O & M Service 24,600,000 12,000,000 Interest Earned 4,363,745 2,161,018 20,097, Capacity and Generation Name of Plant Annual Licensed Capacity (MwH) Annual Installed Capacity (MwH) 438, ,421 Patenga, Chittagong Plant factor (% on Licensed Capacity) generation During the year ended on June 30, 2017 Average Maximum Energy Generation (MwH) Energy Sold (MwH) 69.22% 88.10% 287, , Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the year ended on June 30, 2017Name Mr. Faisal Ahmed Chowdhury Mr. Gulam Rabbani Chowdhury Mr. Monzur Kadir Shafi Mr. Fahim Ahmed Chowdhury Total Designation Period Chairman and Head of Planning & Business Development July 16 to June '17 1,650,000 1,350,000 Managing Director July 16 to June '17 1,650,000 1,350,000 Deputy Managing Director & Head of Finance July 16 to June '17 3,498,000 2,940,000 Director & Head of Admin. July 16 to June '17 660, ,000 7,458,000 6,240,000 Payment made to Directors are in following way Basic Pay 4,068,000 3,744,000 Household Allowances 2,034,000 1,872,000 Medical Allowance 474, ,800 Conveyance 203, ,200 Festival Bonus 678,000 Total 7,458,000 6,240,000 In addition to the above, directors who attend the board meeting, have drawn board meeting Tk. 5,000 per director per meeting. The total board meeting attendance fee during the year is Tk. 167,

256 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2017 b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the year ended on June 30, 2017 Salary Range (Monthly) Officer & Staff Total Employee Worker Head Office Factory Below Tk. 3,000/ Above Tk. 3,000/ Total * Manpower work under the scope of Operational & Maintenance Agreement with Baraka Power Limited that has been came into effect from January Risk Management The company continuously evaluates all risk that affect the company affairs including following Financial Risk. a. Credit Risk; b. Liquidity Risk; c. Market Risk In this respect, both Audit Committee and Internal Audit Department assist the Board by submitting periodic report. a. Credit Risk Credit Risk is the risk of financial loss of the company if a client fails to meet its contractual obligation to the company. The sole client of the company is Bangladesh Power Development Board. All claims of the company are settled on regular basis as per terms of Agreement. We consider that receivable of the company is good and the risk of bad debts is minimum. b. Liquidity Risk Liquidity Risk is the risk that the company will not be able to meet its financial obligations as they fall due. In meeting liquidity requirements, the company adopts a strict policy of managing its assets keeping liquidity as a vital focus and therefore monitors liquidity on a daily basis. c. Market Risk Market Risk is the risk that changes in market prices which will affect the company s income or the value of its holding of financial instruments. The Company considers two types of risk when evaluating market risk ; Interest Rate Risk and Exchange Rate Risk. These two market risks are discussed separately below : Interest Rate Risk Interest rate risk arises when changes in interest rates have an impact to the future cash flows of financial instrument s fair values. To mitigate the interest rate risk Finance department always monitor the Bank Interest Rate and choose/shift best alternative rate for borrowings and lending. Exchange Rate Risk The Company is exposed to currency risk as it imports machinery and equipment against payment of international currencies (USD and EURO). Unfavorable volatility or currency fluctuations may increase import cost and thus affect profitability of the company. However, the management of the company is fully aware of the risks associated with currency fluctuations. Major imported machinery and equipment purchases from abroad has been settled. Currently spare parts are being procured from suppliers from various countries. At the time of price negotiation with suppliers exchange rate is considered sharply. Therefore, management believes that currency risk is not going to hamper business of the Company General Disclosures: a. Comparative figures have been rearranged wherever considered necessary to conform to the current year s presentation Events after reporting period: a. The board of directors at its meeting held on October 26, 2017 has proposed cas 10% (i.e. Tk per share of Tk. 10) in addition to 10% interim cash dividend (which has already been paid) for the year ended on June 30, Dividend is subject to approve by the shareholders at the forthcoming Annual General Meeting (AGM) of the company. b. Bangladesh Power Development Board (BPDB) has been awarded to implement power plant on BOO (Build, Own, Operate) basis having generation capacity of 110MW to Baraka Patenga Power Limited s subsidiary Karnaphuli Power Limited at Shikalbaha, Chittagong for project term of 15 years from commercial operation date. The project Company has given its acceptance on to BPDB in reply of Letter of Intent (LOI) issued by BPDB. 254 REDHERRING PROSPECTUS

257 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF as AT AND FOR THE YEAR ENDED 30 JUNE,

258 AUDITORS S REPORT To the Shareholder s of Baraka Patenga Power Limited We have audited the accompanying Financial Statements of Baraka Patenga Power Limited, which comprises the Statement of Financial Position as at June 30, 2016, and the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Changes in Equity, and the Statement of Cash Flows for the year/period then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), the Companies Act,1994 and other applicable laws and regulation and for such internal control as management determines, which is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing, an opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), gives a true and fair view of the state of the company s affairs as at June 30, 2016 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act, 1994, the Securities and Exchange Rules, 1987 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books ; c) The Company s Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of accounts ; d) The expenditures incurred and payments made were for the purpose of the company operations. Dated: Dhaka October 27, 2016 Sd/ Malek Siddiqui Wali Chartered Accountants 256 REDHERRING PROSPECTUS

259 Baraka Patenga Power Limited STATEMENT OF FINANCIAL POSITION As at June 30, 2016 Particulars Notes As at June 30, 2016 As at June 30, 2015 Amount (Tk.) Amount (Tk.) ASSETS NonCurrent Assets Property, Plant & Equipment 04 3,954,491,677 4,094,964,784 Capital Work in Progress 05 33,208,342 17,196,630 Investment in Associate , ,000 Total NonCurrent Assets 3,988,660,019 4,112,671,414 Current Assets Inventories ,316,800 Advances, Deposits & Prepayments 08 24,802,370 Accounts Receivables ,097,838 Other Receivables 10 16,000 Cash & Cash Equivalents 11 59,410,835 Holding Company Balance 19 20,097,645 Total Current Assets 1,233,741, ,914,882 15,091, ,668,617 27,177,619 38,325,372 1,433,178,094 TOTAL ASSETS 5,222,401,507 5,545,849,508 EQUITY & LIABILITIES Shareholders Equity Share Capital ,000,000 Retained Earnings 536,618,278 Total Shareholders Equity 1,481,618, ,000, ,628,900 1,289,628,900 NonCurrent Liabilities Term Loan: Noncurrent maturity 13 2,895,449,376 Finance Lease Liability: Noncurrent maturity 14 1,918,097 Total NonCurrent Liabilities 2,897,367,473 2,927,011,040 4,848,327 2,931,859,367 Current Liabilities Term Loan: Current maturity ,050, ,175,613 Finance Lease Liability: Current maturity 14 2,928,519 2,554,234 Short Term Liabilities ,716, ,876,498 Provision for Income Tax 16 4,169,433 2,250,179 Liabilities for Expenses ,684 4,381,494 Accounts Payables 18 5,109,567 5,531,785 Holding Company Balance 19 99,591,438 Total Current Liabilities 843,415,756 1,324,361,241 TOTAL EQUITY & LIABILITIES 5,222,401,507 5,545,849,508 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The Financial Statements were approved and authorized for issue by the Board of Directors on the date of October 27, 2016, and signed for and on behalf of the board. Sd/Company Secretary Sd/Managing Director Sd/Chairman Sd/Sd/Sd/Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka October 27,

260 Baraka Patenga Power Limited STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended June 30, 2016 Particulars Notes For the year ended June 30, 2016 Amount (Tk) For the year ended June 30,2015 Amount (Tk) Revenue 20 2,119,185,034 3,021,633,767 Cost of Sales 21 (1,483,501,406) (2,429,830,390) Gross Profit 635,683, ,803,377 General & Administrative Expenses 22 (73,559,907) (82,620,420) Operating Profit 562,123, ,182,957 Other Income 23 4,596,307 5,731,287 Financial Expenses 24 (278,136,946) (218,898,508) Profit before Tax 288,583, ,015,736 Income Tax Expenses 25 (2,093,704) (2,005,949) Profit after Tax 286,489, ,009,787 Other Comprehensive Income Total Comprehensive Income for the year 286,489, ,009,787 Earnings per Share: Basic Earnings Per Share (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The Financial Statements were approved and authorized for issue by the Board of Directors on the date of October 27, 2016, and signed for and on behalf of the board. Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka October 27, REDHERRING PROSPECTUS

261 Baraka Patenga Power Limited STATEMENT OF CHANGES IN EQUITY For the year ended June 30, 2016 Particulars Share Capital Share Money Deposit Retained Earnings Amount in Taka Balance as on ,000, ,628,900 1,289,628,900 Net Profit/(Loss) during the year 286,489, ,489,378 Transactions with the shareholders: Issue of Ordinary Share Payment of Interim Cash 10% for the year (94,500,000) (94,500,000) Balance as on ,000, ,618,278 1,481,618,278 Particulars Share Capital Share Money Deposit Retained Earnings Total Amount in Taka Balance as on ,000,000 50,619, ,619,113 Net Profit/(Loss) during the year 294,009, ,009,787 Transactions with the shareholders: Issue of Ordinary Share Balance as on ,000, ,628,900 1,289,628,900 Total The Financial Statements were approved and authorized for issue by the Board of Directors on the date of October 27, 2016, and signed for and on behalf of the board. Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka October 27,

262 Baraka Patenga Power Limited STATEMENT OF CASH FLOWS For the year ended June 30, 2016 Particulars For the year ended June 30, 2016 Amount (Tk) For the year ended June 30, 2015 Amount (Tk) Cash Flow from Operating Activities: Cash Receipts from Customer & others 2,246,965,421 3,060,775,086 Cash Paid to Suppliers (1,283,287,656) (2,485,185,419) Cash Paid to others (44,425,885) (51,462,813) Cash Generated from operating Activities 919,251, ,126,854 Financial Expenses (238,698,392) (214,124,190) Income Tax Paid (353,641) (2,229,044) Net Cash from Operating Activities 680,199, ,773,620 Cash Flow from Investing Activities: Acquisition of PPE (21,823,217) (420,647,650) Disposal of Assets 850,000 Investment in Associate (450,000) (510,000) Short Term Loan to Related Party 27,177,619 (27,177,619) Net Cash Used in Investing Activities 5,754,402 (448,335,269) Cash Flow from Financing Activities: Term Loan (7,125,194) 415,804,325 Short term loan (443,159,582) (242,628,280) Lease Finance (2,555,945) (2,003,353) Transaction with Baraka Power (117,528,065) (15,166,516) Dividend Paid (94,500,000) Net Cash Generated from Financing Activities (664,868,786) 156,006,176 Net Cash Inflow/(Outflow) for the period 21,085,463 15,444,527 Opening Cash & Cash Equivalents 38,325,372 22,880,845 Closing Cash & Cash Equivalents 59,410,835 38,325,372 The above balance consists of the followings: Cash in hand 3,191, ,921 Cash at bank 3,664,939 13,334,451 FDR 52,554,000 24,233,000 Total 59,410,835 38,325,372 Net Operating Cash Flows Per Share (NOCFPS) The Financial Statements were approved and authorized for issue by the Board of Directors on the date of October 27, 2016, and signed for and on behalf of the board. Sd/ Sd/ Sd/ Company Secretary Managing Director Chairman Sd/ Sd/ Sd/ Head of Finance Director Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka October 27, REDHERRING PROSPECTUS

263 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Reporting Entity: 1.01 Background of the Company: Baraka Patenga Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on June 07, 2011 as a Private Limited Company and registered itself as a Public Limited Company under the Companies Act on April 28, 2014 having its registered office at 102 Azadi, Mirboxtola, Sylhet Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and will reduce the fuel cost by 6.40 % annually. For the first time in power sector in Bangladesh, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level Environmental Commitment: The Company ethos places a special emphasis on environmental and ecological issues. Its efforts to preserve and regenerate the environment and expression in the slew of projects and programs it has undertaken in and around its facilities and operations. A Focus area, in this context, is the climate change crisis. The Company beliefs on sustainability have led to a company policy that emphasizes environment preservation. BPPL work on projects that include experiencing green cover, reducing effluents and emission, maintaining local ecological and improving long term coronate sustainability Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh. The following Bangladesh Accounting Standards were applied for the preparation of the financial statements for the period under review: BAS 1 Presentation of Financial Statements BAS 2 Inventories BAS 7 Statement of Cash Flows BAS 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS 10 Events after the reporting period BAS 12 Income Taxes BAS 16 Property, Plant & Equipment BAS 17 Leases BAS 18 Revenue BAS 21 The Effects of change in foreign exchange rates BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 33 Earnings per Share BAS 37 Provisions, Contingent Liabilities and Contingent Assets Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: Income Tax Ordinance, 1984 Income Tax Rules, 1984 Value Added Tax Act, 1991 Value Added Tax Rules, 1991 Bangladesh Labor Act, 2006 Securities and Exchange Ordinance, 1969 Securities and Exchange Rules,

264 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Date of Authorization The Board of Directors authorized the financial statements for issue on October 27, Reporting Period: The financial period of the Company covers one year from July 01, 2015 to June 30, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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 if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes: Note 04: Property, Plant & Equipment (considering useful life of assets); Note 07: Inventories; Note 09: Accounts Receivable; Note 16: Provision for Income Tax; Note 17: Liabilities for expenses Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements Property, Plant and Equipment: a. Recognition and Measurement: In compliance with BAS16 (Property, Plant & Equipment) items of property, plant and equipment (PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and nonrefundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner. b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those plants in compliance with BAS23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use. c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the Statement Of 262 REDHERRING PROSPECTUS

265 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Profit or Loss and Other Comprehensive Income as incurred. d. Depreciation: No depreciation is charged on land and land development. Depreciation is recognized in the Statement Of Profit or Loss and Other Comprehensive Income on a straight line basis over the estimated useful lives of each item of property, plant & equipment. Each item of PPE are depreciated from the month in which the assets comes into use or capitalized. In case of disposals, no depreciation is charged in the month of disposal. Depreciation of Power Plant has been charged considering 30 years of useful life and residual value as 10% of original cost, on straight line basis on the ground that management intends to continue with operation after completion of 15 years as stated in the Power Purchase Agreement (PPA). The rate of depreciation on PPE for the current period as follows: Name of the Assets As on June 30, 2016 Land & Land development Furniture & Fixtures 10% Office & Electrical Equipment 20% Office Decoration 20% Motor Vehicles 20% Building & Civil Construction 6.67% Maintenance Equipment 20% Motor Vehicles(Leasehold Assets) 25% Plant & Machineries 3% e Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Statement Of Profit or Loss and Other Comprehensive Income. f Impairment If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss is recognized as an expense in the Statement Of Profit or Loss and Other Comprehensive Income Financial Instruments A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in Statement Of Profit or Loss and Other Comprehensive Income Advances, deposits & prepayments Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Cash Flow Statement and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 263

266 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method Accounts Receivables: Accounts receivables consists of unpaid bills receivables from Bangladesh Power Development Board (BPDB) and unbilled revenue recognized at the Statement of Financial Position date Inventories: Inventories consisting of HFO, lube oil, diesel, alternator grease, coolnet water, spare parts etc. These are for use in the operation and maintenance of power plant. Cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to use. Inventories are valued at cost or net realized valued which ever is lower Provisions: A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation Employee Benefits The Company has entered into an Operational, Maintenance, Administrative and Financial Management agreement with Baraka Power Limited on 18 January 2016 for providing technical and operational support. Features of the Agreement: Type of contract Operational, Maintenance, Administrative and Financial Management Agreement with Baraka Power Limited Description of contract Effective Date: January 1, 2016 Scope of Services: According to Article2, 1st party i.e. Baraka Power Limited shall provide the following supports 1. Operations management; 2. Maintenance management; 3. Commercial and logistics management; 4. Finance and accounting management; 5. Administration and human resource management; 6. Environment and safety management; 7. Any other support as per BPPL s requirement. Terms of payment: 2nd party i.e. BPPL will have to pay Tk. 2,000,000 per month for the rendered support with an increment of 5% on the total amount per annum. Tenure: Valid for 3 years and the duration can be extended through mutual consent of both parties. Termination: The agreement can be terminated by either party giving three months written notice Foreign Currency Translation: Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on that day. Gain/Loss arising from translation of foreign currency is recognize as Income/Expenses in the Statement Of Profit or Loss and Other Comprehensive Income Revenue Recognition: Revenue is initially recognized in the Statement Of Profit or Loss and Other Comprehensive Income upon supply of electricity based on net energy output on a monthly basis. Net energy output is determined by the Joint meter reading and verification committee consisting of BPPL personnel s and BPDB representatives. After initial recognition, adjustment is made on actual bill paid by the BPDB Financial Expenses: Financial expenses comprises interest expenses on loan. All borrowing costs are recognized in the Statement Of Profit or Loss and Other Comprehensive Income using effective interest method except to the extent that they are capitalized during construction period of the plants in compliance with BAS23: Borrowing Cost. 264 REDHERRING PROSPECTUS

267 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Income Tax: a. Current Tax: No provision for Income Tax on revenue is required to be recognized as the Company has received exemption from all of its taxes from Government of Bangladesh under Private Sector Power Generation Policy & SRO # 211 dated July 01, 2013 for a period of 15 years from starts of its commercial operation date. Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are Income Year Tax rates on Other Income % % b. Deferred Tax: There are no temporary difference is accrued as yet between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose. As no deferred tax is recognized Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: As there were no potential ordinary shares issued by the Company, so no dilution is taken into effect Leases: The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at the inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Leases are classified as finance leases whenever the terms of lease transfer substantially all the risk and rewards of ownership to the lessee. All other leases are classified as operating leases Contingencies: Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured Impairment At each reporting date indications of impairment are reviewed. We assessed Financial & Nonfinancial assets whether there is objective evidence that in impaired. As on June 30, 2017 the assessment of indicators of impairment reveals that impairment testing is not required for the company Events after Reporting Period: Events after reporting period that provide additional information about the Company s position at the balance sheet date are reflected in the financial statements. Events after reporting period that are not adjusting event are disclosed as off balance sheet items Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Related party disclosure: As per Bangladesh Accounting Standard (BAS 24) the parties are considered to be related if one of the party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The company carried out transactions in the ordinary course of business on an arm s length basis with its related parties. 265

268 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Property, Plant & Equipment: Tk. 3,954,491,677 Cost Opening Balance 4,236,440,057 3,171,968,051 Add: Addition during the year 4,286,505 1,064,472,006 4,240,726,562 4,236,440,057 Less: Adjustment during the year 2,675,653 Closing Balance of Cost 4,238,050,909 4,236,440,057 Accumulated Depreciation Opening Balance 141,475,273 21,632,315 Add: Charged during the year 144,135, ,842, ,610, ,475,273 Less: Adjustment during the year 2,051,333 Closing Balance of Depreciation 283,559, ,475,273 Written Down Value 3,954,491,677 4,094,964,784 Details of Property, Plant & Equipment is stated in Schedule 1. Hypothecation of all fixed assets on first ranking pari passu basis creating present and future charge with the RJSC against the Term Loan that sanctioned by the United Commercial Bank Limited & Trust Bank Limited Capital Work in Progress (WIP): Tk. 33,208,342 Particulars Building & Civil Construction 33,208,342 17,196,630 Total (Note: 05.01) 33,208,342 17,196, Closing balance of WIP: Tk. 33,208,342 Particulars Opening Balance 17,196, ,977,653 Add: Addition during the year 16,011, ,701,569 33,208,342 1,074,679,222 Less: Accounted for as PPE 1,057,482,592 Closing Balance 33,208,342 17,196, Investment in Associate: Tk. 960,000 Particulars Karnaphuli Power Limited (KPL) 510, ,000 Baraka Apparels Limited 450,000 Total 960, ,000 KPL, being a 48.57% associate company of BPPL, incorporated as private limited company on November 17, 2014 for the purpose of submitting proposal to Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) to implement 100MW IPP power plant on BOO basis. The proposal was submitted and awaiting for decision of MPEMR. Baraka Apparels Limited, a Private Limited Company incorporated on October 01, 2015, is in under construction of RMG factory where BPPL has 45% equity investment Inventories: Tk. 484,316,800 Particulars Opening Balance 581,914, ,747,323 Add: Purchase during the year 1,222,361,500 2,415,595,670 1,804,276,382 2,857,342,993 Less: Consumption during the year 1,319,959,582 2,275,428,111 Closing Balance (Note07.01) 484,316, ,914, Closing Balance of Inventories: Tk. 484,316,800 Particulars HFO 275,698, ,952,530 Diesel 1,179,869 1,268,670 Spare Parts 146,675,587 3,621,852 Lube Oil 59,595,815 26,041,744 Other Lubricants & Chemical 1,166,772 4,030,086 Total 484,316, ,914,882 The balance of inventory has been counted at the year end in the presence of management team. 266 REDHERRING PROSPECTUS

269 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Advances, Deposits & Prepayments: Tk. 24,802,370 Particulars Advances: Advance for Other Expenses (Note : 08.01) 540, ,329 Advance for Public Issue Expenses 1,058,600 Advance Income Tax 381, ,771 Advance against PPE & Inventory (Note : 08.02) 9,220, ,012 SubTotal 11,201,761 1,487,112 Deposits: Security Deposit for Utility Connection 625, ,960 Deposits against Storage Tank Rent 5,395,500 5,395,500 Deposits against Lease Rent 291, ,145 SubTotal 6,312,605 6,312,605 Deposit are realizable after one years. Prepayments: Prepayment for Office Rent 204, ,700 Prepayment against Insurance Premium* 7,083,304 7,087,187 SubTotal 7,288,004 7,291,887 GrandTotal 24,802,370 15,091,604 * Insurance premium amounting Tk. 8,504,625 has paid for the operational coverage from the period May 2016 to April 2017 out of which premium for May to June 2016 has charged to statement of comprehensive income Advance for Other Expenses Utility Expenses 18,000 Rest House Expenses 40,000 Employees Medical Expenses 500,525 Issue Management Fee 345,000 Oil Carrying Expenses 426,329 Total 540, , Advance against PPE & Inventory Spare Parts 1,572,942 Storage Tank 5,375,558 L/C Margin and Charges 747,174 29,508 Minlars Pumps Limited 465,504 Land 1,525,000 9,220, , Accounts Receivables: Tk. 645,097,838 Particulars Bangladesh Power Development Board (BPDB) 645,097, ,668,617 Total 645,097, ,668,617 This balance represents the arrear bill from BPDB. Aging of Accounts Receivables Invoiced 030 days 258,273, ,396,008 Invoiced days 249,427, ,866,976 Invoiced over 180 days 137,397, ,405,633 Total 645,097, ,668, Other Receivables: Tk. 16,000 Particulars Royal Educare Limited 26,896,959 Karnaphuli Power Limited (KPL) 280,660 Mr. Galib (Security Service Bill) 16,000 Total 16,000 27,177,

270 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Cash & Cash Equivalents: Tk. 59,410,835 Particulars Cash in Hand 3,191, ,921 Sub Total 3,191, ,921 Cash at Bank Trust Bank Ltd., Sylhet Cor. Br. (A/C # ) 1,492,531 12,760,624 Trust Bank Ltd., Naval Rd. Br., Ctg. (A/C # ) 814,759 11,875 Trust Bank Ltd., Jublee Road Br., Ctg. (A/C # ) 332 UCBL, CD A/C, Bijoy Nagar Br. (A/C # ) 1,166,328 UCBL, STD A/C, Bijoy Nagar Br. (A/C # ) 119, ,548 Social Islami Bank Ltd., Sylhet Br. (A/C # ) 67,877 9,072 Prime Bank Ltd., Sylhet Br. (A/C # ) 4,235 Sub Total 3,664,939 13,334,451 FDR Trust Bank Limited (BG Margin) 15,000,000 15,000,000 United Commercial Bank Limited (BG Margin) 3,500,000 3,500,000 United Commercial Bank Limited (LC Margin) 28,554, ,000 Union Capital Limited 5,500,000 IPDC of Bangladesh Limited 5,500,000 Sub Total 52,554,000 24,233,000 Grand Total 59,410,835 38,325,372 The reconciliation of bank balance has been performed and found in order. Cash in hand has been counted by the management at the year end Share Capital: Tk. 945,000,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2015) Issued, Subscribed and Paidup: 94,500,000 Ordinary Shares of Tk. 10 each 945,000, ,000,000 (94,500,000 Ordinary shares of Tk. 10 each in the year ended June ) Shareholding Position was as follows: Sl. No. Name of shareholders Percentage of Shareholdings Amount in Tk Baraka Power Limited ,950, ,950, Faisal Ahmed Chowdhury ,350,000 28,350, Gulam Rabbani Chowdhury ,350,000 28,350, Fahim Ahmed Chowdhury ,100,000 8,100, Md. Shirajul Islam ,000,000 10,000, Monzur Kadir Shafi ,000,000 15,000, Afzal Rashid Chowdhury ,000,000 10,000, Touhidul Islam ,000,000 8,000, Other Shareholders ,250, ,250,000 Total ,000, ,000, REDHERRING PROSPECTUS

271 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Term Loan: Tk. 3,241,500,013 Long Term Portion Particulars United Commercial Bank Limited (IPFF) 1,124,110,413 1,218,492,939 Trust Bank Limited (IPFF) 467,790, ,863,117 United Commercial Bank Limited (PFI) 646,833, ,755,184 Trust Bank Limited (PFI) 499,846, ,392,011 IPDC of Bangladesh Ltd. 156,868,956 Social Islami Bank Limited 355,163,817 Union Capital Limited 156,343,972 SubTotal 2,895,449,376 2,927,011,040 Short Term Portion United Commercial Bank Limited (IPFF) 112,314,708 54,829,117 Trust Bank Limited (IPFF) 47,037,764 22,962,612 United Commercial Bank Limited (PFI) 63,226,209 30,823,749 Trust Bank Limited (PFI) 51,102,144 85,444,155 IPDC of Bangladesh Ltd. 32,931,258 Social Islami Bank Limited 47,590,716 Union Capital Limited 40,525,264 Accrued Interest 39,438,554 SubTotal 346,050, ,175,613 GrandTotal 3,241,500,013 3,209,186,653 Particulars UCBL & TBL (IPFF loan) UCBL & TBL (PFI loan) UCBL & TBL (Take Over) IPDC Interest Rate 6 months LIBOR + 30 basis point + 2.0% p.a. Tenor 12 years (including 02 years grace period) % p.a % p.a % p.a. 9.5 years (including 06 months grace period) 08 years 05 years Purpose To develop and implement project; To take over other bank & NBFI loan Repayment Amount 5.50 crore/qua. (appx.) 3.11 crore/qua crore/qua crore/month Expiry 30/Oct/ /Sep/ /Sep/ /Aug/2020 The security package for both United Commercial Bank Limited and Trust Bank Limited (IPFF & PFI) term loan are as follows: Mortgage of project land; Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and equipment on first ranking pari passu basis creating present and future charge with the RJSC; Establishment of Escrow Account and Debt Service Account with appropriate cash flow; Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee; Copayee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer. United Commercial Bank Limited (as mandated lead arranger) has been sanctioned USD million through Investment Promotion & Financing Facility (IPFF) of Bangladesh Bank funded by IDA of World Bank. As Participating Financial Institute s (PFI) participation portion; United Commercial Bank Limited & Trust Bank Limited has been sanctioned BDT million & BDT million respectively. Subsequently, UCBL & TBL jointly has been taken over the other bank finance with existing security package. 269

272 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Finance Lease Liability: Tk. 4,846,616 Long Term Portion Prime Finance & Investment Limited 1,918,097 4,848,327 SubTotal 1,918,097 4,848,327 Short Term Portion Prime Finance & Investment Limited 2,928,519 2,554,234 SubTotal 2,928,519 2,554,234 GrandTotal 4,846,616 7,402,561 Interest Rate Tenor Repayment Amount Purpose 15 % p.a., 13% p.a. 04 years Tk. 282,347 only per month; To purchase two units of Motor Vehicle; Corporate Guarantee of Baraka Power Limited Personal Guarantee of Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury. Obligation under Finance Lease has been recognized as liability in the Statement of Financial Position, from the date of inception of the lease agreement, at amount equal at the inception of lease to the lower of fair value of leased assets and present value of minimum lease payment. The Principal amount of lease obligation payable after the date of statement of financial position is as follows : Particulars Future Minimum Lease Payment Interest Present Value of minimum lease payment Present Value of minimum lease payment Not Later than one year 3,388, ,642 2,928,519 2,554,234 Later than one year but not later than five years 2,003,247 85,150 1,918,097 4,848,327 Later than five years Total obligation under finance lease 5,391, ,792 4,846,616 7,402, Short Term Liabilities: Tk. 484,716,916 Particulars Short Term Working Capital Facility 484,067, ,054,939 Bank Overdraft United Commercial Bank Limited* 649, ,821,559 Total 484,716, ,876,498 * United Commercial Bank Limited has been sanctioned overdraft facility of Tk million at interest rate of 10.00% p.a. for the purpose of meeting up day to day expenditure of the Company Provision for Income Tax: Tk. 4,169,433 Particulars Opening Balance 2,250,179 3,100,931 Add: Addition during the year 2,093,704 2,005,949 4,343,883 5,106,880 Less: Adjustment during the year 174,450 2,856,701 Closing Balance 4,169,433 2,250, Liabilities for Expenses: Tk. 440,684 Particulars Office Rent 94,281 Utility Expenses 116,403 2,176,744 PF Expenses 1,974,750 Audit Fee 230, ,000 Total 440,684 4,381, REDHERRING PROSPECTUS

273 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Accounts Payables: Tk. 5,109,567 Particulars Weber Power Solution Ltd. 322,050 Super Star Engineering Ltd. 197,500 South Eastern Tank Terminal Ltd. 3,671,749 4,914,235 Sylora Link 348,923 SGS Bangladesh Limited 5,119 Jakson International Limited 302,776 Madina Boiler House 51,000 M/S Hasina Enterprise 730,000 98,000 Total 5,109,567 5,531,785 Aging of Accounts Receivables 030 days 5,109,567 3,973, days 1,557,867 over 180 days Total 5,109,567 5,531, Holding Company Balance: Tk. (20,097,645) Particulars Baraka Power Limited (20,097,645) 99,591,438 Total (20,097,645) 99,591,438 Aging of Accounts Receivables 030 days (20,097,645) 38,794, days 60,797,263 over 180 days Total (20,097,645) 99,591, Revenue: Tk. 2,119,185,034 Particulars Capacity Proceeds 434,057, ,280,805 Variable Operational & Maintenance Proceeds 128,434, ,193,785 Fuel Proceeds 1,556,692,482 2,485,159,177 Total 2,119,185,034 3,021,633, Cost of Sales: Tk. 1,483,501,406 Particulars Fuel Consumption (Note : 21.01) 1,233,066,081 2,202,719,211 Lubricant & Chemical Consumption (Note : 21.02)* 65,317,169 72,708,900 Spare Parts Consumption (Note:21.03) 21,576,332 Electricity Bill on FGD Plant 1,240,464 O & M Service Expenses** 12,000,000 Fuel Tank Rent 22,119,409 41,568,106 Oil Carrying Expenses 11,988,836 18,538,619 Depreciation on Plant & Machinery 110,234,664 90,839,751 Repair & Maintenances on Plant & Machinery 5,958,451 3,455,803 Total 1,483,501,406 2,429,830,390 * Lubricants & Chemical consists of Diesel, Lube oil, Caustic Soda, Grease, Coolnet water, Maxi Guard etc. ** Baraka Patenga Power Limited (BPPL) has been entered into a Deed of Agreement for Operational, Maintenance, Administrative and Financial Management with Baraka Power Limited (BPL) with effect from January 01,

274 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Fuel Consumption: Tk. 1,233,066,081 Particulars Opening Balance 546,952, ,679,535 Add: Purchase during the year 961,812,308 2,317,992,206 1,508,764,838 2,749,671,741 Closing Balance (275,698,757) (546,952,530) Consumption during the year 1,233,066,081 2,202,719, Lubricant & Chemical Consumption : Tk. 65,317,169 Particulars Opening Balance 31,340,500 9,851,138 Add: Purchase during the year 96,060,115 94,198, ,400, ,049,400 Closing Balance (62,083,446) (31,340,500) Consumption during the year 65,317,169 72,708, Spare Parts Consumption: Tk. 21,576,332 Particulars Opening Balance 3,621, ,650 Add: Purchase during the year 164,630,067 3,405, ,251,919 3,621,852 Closing Balance (146,675,587) (3,621,852) Consumption during the year 21,576, General & Administrative Expenses: Tk. 73,559,907 Particulars Salary & Allowances* 13,068,577 27,675,539 Directors Remuneration 6,240,000 5,700,000 Communication Expenses 413, ,902 Travelling & Conveyance 1,584,873 2,590,487 Utility Expenses 28, ,566 Office Rent 2,244,576 2,506,961 AGM & EGM Expenses 479, ,904 Vehicle Running expenses 1,555,010 1,990,040 General Repair & Maintenance 1,742,419 1,620,343 Entertainment & Others 883, ,866 Business Development Expenses 102, ,114 Legal Fees & Professional Consultancy 17,250 Fooding & Lodging 664, ,345 Advertisement & Publicity 43,368 39,721 Audit Fee 230, ,000 Photocopy & Others 23,890 42,513 Uniform & Others 608, ,607 Newspaper, Books & Periodicals 9,330 77,379 Printing & Others 231, ,213 Annual Fee 3,202, ,706 Donation & Subscription 100, ,000 Insurance Premium 4,005,659 4,746,260 Education & Training 33,025 60,000 Office Stationeries 67,686 82,925 Gardening Expenses 62,020 48,850 Annual Sports & Religious Expenses 598, ,002 Gift & Greetings 83,015 59,900 Rest House Keeping Expenses 863, ,070 Meeting Attendance Fee 172, ,000 Royalty Fee to BPC 300,000 Depreciation Expenses 33,900,628 29,003,207 Total 73,559,907 82,620,420 * The balance of Salary & Allowances consists 06 months expenses upto December 2015 which has ceased from January 2016 at when the Operational & Maintenance Agreement with Baraka Power Limited has came into effect. 272 REDHERRING PROSPECTUS

275 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 Particulars As at June 30, 2016 As at June 30, 2015 Amount (Tk) Amount (Tk) Other Income: Tk.4,596,307 Particulars Foreign Exchange (Loss)/Gain Trust Bank Ltd. (IPFF Loan) (450,392) (256,122) Foreign Exchange (Loss)/Gain UCBL (IPFF Loan) (935,310) 4,100,360 Gain on Sale of Assets 225,681 Interest Income earned on Loan with Related Parties 4,120, ,969 Bank Interest 1,636, ,080 Total 4,596,307 5,731, Financial Expenses: Tk. 278,136,946 Particulars Interest Expenses: Term Finance Expenses 242,350, ,753,089 Lease Finance Expenses 920,198 1,490,387 Other Financial Expenses 33,821,371 40,490,608 Bank Charge & Commission 232, ,424 Bank Guarantee Expenses 812, ,000 Total 278,136, ,898, Income Tax Expenses: Tk. 2,093,704 Particulars Income Tax Expenses on Other Income (Note : 03.13) 1,521,007 1,680,422 Income Tax Expenses on Bank Interest 572, ,527 Total 2,093,704 2,005, Earnings Per Share (EPS): Tk Particulars Profit Attributable to Ordinary Shareholders (A) 286,489, ,009,787 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 26.01) (B) 94,500,000 94,500,000 Basic Earnings Per Share (EPS) (C=A/B) Weighted Average Number of Ordinary Shares Outstanding: The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a timeweighted factor. The timeweighted factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year (considering 360 days in a year). Date of Allotment Ordinary Share Weighted no. of Days Calculation Weighted No. of Share Opening as on July 01, ,500,000 94,500,000 Issued during the year Closing as on June 30, ,500,000 94,500,000 Date of Allotment Ordinary Share Weighted no. of Days Calculation Weighted No. of Share Opening as on July 01, ,500,000 94,500,000 Issued during the year Closing as on June 30, ,500,000 94,500, Dilution of Earnings Per Share: No diluted earnings per share is required to be calculated for the year presented as there was no potential ordinary shares has been issued by the company, as such no scope for dilution of shares during the year. 273

276 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Contingent Liability: Tk. 220,000,000 Particulars BG No. Expiry Date June 30, 2016 June 30, 2015 Bank Guarantee as Performance Security, BPDB 01/11, TBL* ,000, ,000,000 Bank Guarantee as Operational Security, BPDB 80/2014, UCBL** ,000,000 70,000,000 Total 220,000, ,000,000 *Bank Guarantee # 01/11 issued by Trust Bank Limited in favor of Bangladesh Power Development Board (BPDB) as performance security has not been released yet by BPDB. **Bank Guarantee # 80/2014 issued by United Commercial Bank Limited in favor of Bangladesh Power Development Board (BPDB) as operational security has been renewed for further one year upto Commitment of Capital Expenditure: Tk. Nill There is no commitment has made by the company against Capital Expenditure. BDT BDT 274 REDHERRING PROSPECTUS

277 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Remittance of Foreign Currency: Tk. 1,332,373,265 Name of item Spare Parts Spare Parts Spare Parts Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Heavy Furnace Oil (HFO) Spare Parts Spare Parts Heavy Furnace Oil (HFO) Spare Parts Spare Parts Spare Parts Spare Parts Spare Parts Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Heavy Furnace Oil (HFO) Total L/C & TT Number Currency OCTM OCTM OCTM OCTM FTT FTT006(UT99) OCTM USD EURO EURO USD USD USD USD USD USD USD USD USD USD USD USD USD EURO USD USD USD USD BDT EURO EURO EURO EURO EURO USD EURO EURO USD USD EURO USD USD USD USD USD USD USD Value as at in FCY in BDT 866,015 68,415, ,909 15,890,254 3, ,494 28,937 2,286,032 39,620 3,122,056 7, ,880 15,622 1,226,580 17,361 1,375,142 8, ,499 19,858 1,574,758 10, ,037 5,281, ,103,554 2,500, ,000,546 2,407, ,459,762 2,072, ,119, ,133 2, ,591 2, ,591 15,635 1,427,596 49,883 4,350,481 8, ,968 1,368, ,601,006 6, ,816 10, ,217 1,545, ,553,798 16,144 1,276,971 1, ,714 5, ,194 8, ,800 2, , ,415 14,494,984 27,067 2,128, ,233 8,040,653 90,545 7,121,380 16,928,315 1,332,373,265 Value as at June 30, 2015 in FCY in BDT 5, ,747 4, ,941 4, ,626 3,692, ,472,884 3,299, ,514, ,622 26,053,372 7,341, ,302,

278 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Related Party Disclosure A. During the year, the Company carried out a number of transactions with related party in the normal course of business. The names of the related parties and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. Transaction with key management personnel: June 30, 2016 June 30, 2015 Taka Taka Employee Benefits 7,200,000 6,825,600 Total 7,200,000 6,825,600 Key management personnel includes Chiarman & Head of Planning & Business Development, Managing Director, Deputy Managing Director, Head of Administration and Plant Manager. B. Other Related Party Transactions Name of the Related Party Nature of Relationship Baraka Power Limited Holding Company Royal Educare Limited Common Management Karnaphuli PowAssociate Company er Limited Baraka Apparels Limited Transactions during the year Nature of Transaction Associate Company Taka Taka Receivables/(Payables) Taka Short term loan 193,330, ,415,225 Interest Earned 2,161,018 32,417,889 Short term loan Taka 20,097,645 (99,591,438) 26,896,959 26,896,959 25,939,990 Interest Charged 956,969 Investment in equity 510,000 1,722,852 45, , , ,000 Short term loan Interest Charged Investment in equity Capacity and Generation Name of Plant Licensed Capacity (MwH) Installed Capacity (MwH) 438, ,421 Patenga, Chittagong Plant factor (% on Licensed Capacity) generation During the year ended on June 30, 2016 Average Maximum Energy Generation (MwH) Energy Sold (MwH) 58.01% 93.56% 301, , Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the year ended on June 30, 2016Name Mr. Faisal Ahmed Chowdhury Mr. Gulam Rabbani Chowdhury Mr. Monzur Kadir Shafi Mr. Fahim Ahmed Chowdhury Total 276 REDHERRING PROSPECTUS Designation Period Chairman and Head of Planning & Business Development July 15 to June '16 1,350,000 1,200,000 Managing Director July 15 to June '16 1,350,000 1,200,000 Deputy Managing Director & Head of Finance July 15 to June '16 2,940,000 2,700,000 Director & Head of Admin. July 15 to June '16 600, ,000 6,240,000 5,700,000

279 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2016 b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the year ended on June 30, 2016 Salary Range (Monthly) Officer & Staff Total Employee Worker Head Office Factory Below Tk. 3,000/ Above Tk. 3,000/ Total * Manpower work under the scope of Operational & Maintenance Agreement with Baraka Power Limited that has been came into effect from January General Disclosures: Comparative figures have been rearranged wherever considered necessary to conform to the current year s presentation Events after reporting period: a. The board of directors at its meeting held on October 27, 2016 has recommended 05% final stock dividend in addition to 10% interim cash dividend (which has already been paid) totaling 15% dividend for the year ended on June 30, Dividend is subject to approve by the shareholders at the forthcoming Annual General Meeting (AGM) of the company. 277

280 Baraka Patenga Power Limited SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT As at June 30, 2016 Schedule 1 Cost Particulars Land & Land Development AdjustAddition Balance as on ment during during the year the year 127,748, ,500 Depreciation Balance as on Rate of Dep. (%) Charged Balance as during the on year AdjustW. D. V. as on ment Balance as during on the year W. D. V. as on ,726, ,748, ,726,380 Furniture & fixture 2,008, ,928 2,183,364 10% 348, , ,282 1,630,082 1,659,656 Office & Electrical Equipment 4,872,288 1,101,608 5,973,896 20% 1,381,361 1,067,575 2,448,936 3,524,960 3,490,927 Office Decoration 4,568,665 4,568,665 20% 1,587, ,733 2,500,978 2,067,687 2,981,420 Motor Vehicles 7,098,256 2,675,653 4,422,603 20% 3,375,353 1,330,465 2,051,333 2,654,485 1,768,118 3,722,903 Building & Civil Construction 401,659, ,659,151 7% 26,379,063 26,790,665 53,169, ,489, ,280,088 Maintenance Equipment 2,032,469 5,255,719 20% 224, ,604 1,125,405 4,130,314 2,998,449 33,296,603 31,207,544 2,051,333 62,452, ,336, ,882,322 25% 3,815,202 2,693,084 6,508,286 4,264,050 6,957,134 3,815,202 2,693,084 6,508,286 4,264,050 3% 104,363, ,234, ,598,131 3,459,890,664 3,570,125, ,363, ,234, ,598,131 3,459,890,664 3,570,125,328 3,223,250 SubTotal 551,178,926 4,286,505 2,675, ,789,778 Motor Vehicles (Leasehold Asset) 10,772,336 10,772,336 SubTotal 10,772,336 10,772,336 Plant & Machineries 3,674,488,795 3,674,488,795 SubTotal 3,674,488,795 3,674,488,795 GrandTotal 4,236,440,057 4,286,505 2,675,653 4,238,050, ,475, ,135,292 2,051, ,559,231 3,954,491,678 4,094,964,784 Allocation of Depreciation: Cost of Sales 110,234,664 General & Administrative Expenses 33,900,628 Total 144,135, REDHERRING PROSPECTUS 6,957,134

281 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF as AT AND FOR THE YEAR ENDED 30 JUNE,

282 AUDITORS REPORT To the shareholders of Baraka Patenga Power Limited We have audited the accompanying Statement of Financial Position of Baraka Patenga Power Limited as at 30 th June 2015 and the related Statement of Comprehensive Income, Statement of Cash Flow, Statement of Change in Equity and Notes for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Accounting Standard (BAS)/Bangladesh Financial Reporting Standards (BFRS), the companies Act 1994, Bangladesh Securities Exchanges Commission Rules 1987 and other applicable laws and regulation and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, where due to fraud or error. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance where the financial statements are free from material misstatement An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor consider internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes evaluation the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standard/Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company s affairs as of 30 th June 2015 and of the results of its operations and its cash flows for the period then ended and comply with the Companies Act 1994, relevant schedule of Bangladesh Securities Exchanges Commission Rules 1987 and other applicable laws and regulations. We also report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof ; b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appeared from our examination of those books ; c) The Company s Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are in agreement with the books of accounts ; d) The expenditures incurred and payments made were for the purpose of the company s business. Dated: Dhaka August 24, 2015 Sd/ Kazi Zahir Khan & Co. Chartered Accountants Sd/ Malek Siddiqui Wali Chartered Accountants 280 REDHERRING PROSPECTUS

283 Baraka Patenga Power Limited STATEMENT OF FINANCIAL POSITION as on June 30, 2015 Particulars Notes As on As on Taka Taka ASSETS NonCurrent Assets Property, Plant & Equipment 04 4,094,964,784 3,150,335,736 Capital Work in Progress 05 17,196, ,977,653 Investment in Associate ,000 Total NonCurrent Assets 4,112,671,414 3,787,313,389 Current Assets Inventories ,914,882 Advances, Deposits & Prepayments 08 15,091,604 Accounts Receivables ,668,617 Other Receivables 10 27,177,619 Cash & Cash Equivalents 11 38,325,372 Total Current Assets 1,433,178, ,747,323 37,880, ,852,967 22,880,845 1,311,361,335 TOTAL ASSETS 5,098,674,724 5,545,849,508 EQUITY & LIABILITIES Shareholders Equity Share Capital ,000, ,000,000 Retained Earnings 344,628,900 50,619,113 Total Shareholders Equity 1,289,628, ,619,113 NonCurrent Liabilities Term LoanLong Term Portion 13 2,927,011,040 2,709,196,524 Finance Lease LiabilityLong Term Portion 14 4,848,327 7,402,579 Total NonCurrent Liabilities 2,931,859,367 2,716,599,103 Current Liabilities Term LoanShort Term Portion ,175,613 84,185,804 Finance Lease LiabilityShort Term Portion 14 2,554,234 2,003,335 Short Term Liabilities ,876,498 1,170,504,778 Provision for Income Tax 16 2,250,179 3,100,931 Liabilities for Expenses 17 4,381, ,700 Accounts Payables 18 5,531,785 11,559,006 Loan from Holding Company 19 99,591, ,757,954 Total Current Liabilities 1,324,361,241 1,386,456,508 TOTAL EQUITY & LIABILITIES 5,545,849,508 5,098,674,724 Net Assets Value Per Share (NAVPS) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on August 24, 2015 and were signed on its behalf by: Sd/Company Secretary Sd/Kazi Zahir Khan & Co. Chartered Accountants Sd/Director Sd/Managing Director Sd/Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka August 24,

284 Baraka Patenga Power Limited STATEMENT OF COMPREHENSIVE INCOME for the year ended June 30, 2015 Particulars Notes Year Ended Taka Year Ended Taka Revenue 20 3,021,633, ,852,967 Cost of Sales 21 (2,429,830,390) (697,968,936) Gross Profit 591,803, ,884,031 General & Administrative Expenses 22 (82,620,420) (22,154,616) Operating Profit 509,182,957 88,729,415 Other Income 23 4,801,207 Financial Income , ,804 Financial Expenses 25 (218,898,508) (27,466,968) Profit before Tax 296,015,736 61,960,251 Income Tax Expenses 26 (2,005,949) (244,230) Profit after Tax 294,009,787 61,716,021 Other Comprehensive Income Total Comprehensive Income for the year 294,009,787 61,716,021 Earnings per Share: 27 Basic Earnings Per Share (par value of Tk. 10 each) The accounting policies and other notes form an integral part of these financial statements. The financial statements were approved by the Board of directors on August 24, 2015 and were signed on its behalf by: Sd/Company Secretary Sd/Kazi Zahir Khan & Co. Chartered Accountants Sd/Director Sd/Managing Director Sd/Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka August 24, REDHERRING PROSPECTUS

285 Baraka Patenga Power Limited STATEMENT OF CHANGES IN EQUITY for the year ended June 30, 2015 Particulars Share Capital Share Money Deposit Retained Earnings Amount in Taka Balance as on ,000,000 50,619, ,619,113 Net Profit/(Loss) during the year 294,009, ,009,787 Transactions with the shareholders: Issue of Ordinary Share Deposits from Shareholders Balance as on ,000, ,628,900 1,289,628,900 For the year ended 30 June 2014 Particulars Share Capital Share Money Deposit Retained Earnings Balance as on ,000, ,402,425 (11,096,908) 781,305,517 Total Total Net Profit/(Loss) during the year 61,716,021 61,716,021 Transactions with the shareholders: Issue of Ordinary Share 152,597, ,597,575 Share Money Deposit adjusted against allotment 791,402,425 (791,402,425) Balance as on ,000,000 50,619, ,619,113 The financial statements were approved by the Board of directors on August 24, 2015 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Director Managing Director Sd/ Kazi Zahir Khan & Co. Chartered Accountants Sd/ Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka August 24,

286 Baraka Patenga Power Limited STATEMENT OF CASH FLOWS for the year ended June 30, 2015 Particulars Year Ended Taka Year Ended Taka Cash Flow from Operating Activities: Cash Receipts from Customer & others 3,060,775,086 Cash Paid to Suppliers (2,485,185,419) (828,952,964) Cash Paid to others (51,462,813) (19,449,820) Cash Generated from operating Activities 524,126,854 (848,402,784) Income Tax Paid (2,229,044) (69,780) Financial Income / (Expenses) (214,124,190) (26,769,164) Net Cash from Operating Activities 307,773,620 (875,241,728) Cash Flow from Investing Activities: Acquisition of PPE (420,647,650) (3,018,688,307) Investment in Associate (510,000) Short Term Loan to Related Party (27,177,619) Net Cash Used in Investing Activities (448,335,269) (3,018,688,307) Cash Flow from Financing Activities: Share Capital 152,597,575 Term Loan 415,804,325 3,611,985,354 Short term loan (242,628,280) 59,228,865 Lease Finance (2,003,353) 9,405,914 Short term Loan from Baraka Power (15,166,516) 71,522,730 Net Cash Generated from Financing Activities 156,006,176 3,904,740,438 Net Cash Inflow/(Outflow) for the period 15,444,527 10,810,403 Opening Cash & Cash Equivalents 22,880,845 12,070,442 Closing Cash & Cash Equivalents 38,325,372 22,880,845 The above balance consists of the followings: Cash in hand 757, ,726 Cash at bank 13,334,451 1,492,119 FDR 24,233,000 20,500,000 Total 38,325,372 22,880,845 Net Operating Cash Flows Per Share (NOCFPS) 3.26 (9.26) The financial statements were approved by the Board of directors on August 24, 2015 and were signed on its behalf by: Sd/ Sd/ Sd/ Company Secretary Director Managing Director Sd/ Kazi Zahir Khan & Co. Chartered Accountants Sd/ Malek Siddiqui Wali Chartered Accountants Signed in terms of our report of even date annexed. Dated: Dhaka August 24, REDHERRING PROSPECTUS

287 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Reporting Entity: 1.01 Background of the Company: Baraka Patenga Power Limited (hereinafter referred to as the Company) was incorporated in Bangladesh on June 07, 2011 as a Private Limited Company and registered itself as a Public Limited Company under the Companies Act on April 28, 2014 having its registered office at 102 Azadi, Mirboxtola, Sylhet Nature of the business: The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong has been started its commercial operation on May 04, The Plant has been implemented by using 08 nos. of brand new Rolls Royce Engine having capacity of MW each with total capacity of the plant is MW. In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been installed and started its commercial operation on April 10, The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and will reduce the fuel cost by 6.40 % annually. For the first time in power sector, a Desulfurization plant has been introduced to the project to reduce sulfur emission at an acceptable low level Environmental Commitment: The Company ethos places a special emphasis on environmental and ecological issues. Its efforts to preserve and regenerate the environment and expression in the slew of projects and programs it has undertaken in and around its facilities and operations. A Focus area, in this context, is the climate change crisis. The Company beliefs on sustainability have led to a company policy that emphasizes environment preservation. BPPL work on projects that include experiencing green cover, reducing effluents and emission, maintaining local ecological and improving long term coronate sustainability Basis of Preparation and Presentation of the Financial Statements: 2.01 Statement of Compliance: The financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994 and other laws and regulations applicable in Bangladesh. The following Bangladesh Accounting Standards were applied for the preparation of the financial statements for the period under review: BAS 1 Presentation of Financial Statements BAS 2 Inventories BAS 7 Statement of Cash Flows BAS 8 Fundamental Errors and Changes in Accounting Policy BAS 10 Events after the reporting period BAS 12 Income Taxes BAS 16 Property, Plant and Equipment BAS 17 Leases BAS 18 Revenue BAS 21 The Effects of change in foreign exchange rates BAS 23 Borrowing Costs BAS 24 Related Party Disclosures BAS 33 Earnings per Share BAS 36 Impairment of Assets BAS 37 Provisions, Contingent Liabilities and Contingent Assets Other regulatory compliances In addition to the aforesaid, the Company is also required to comply with the following in addition to the Companies Act 1994 and other applicable laws and regulations: The Income Tax Ordinance 1984 The Income Tax Rules 1984 The Value Added Tax Act 1991 The Value Added Tax Rules 1991 The Bangladesh Labor Act, 2006 The Bangladesh Security & Exchange Commission Ordinance 1969 The Bangladesh Security & Exchange Commission Act 1987 The Bangladesh Security & Exchange Commission Rules

288 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Date of Authorization The Board of Directors authorized the financial statements for issue on August 24, Reporting Period: The financial period of the Company covers one year from July 01, 2014 to June 30, Accrual Basis of Accounting These financial statements have been prepared under the accrual basis of accounting Basis of Measurement: All the elements of financial statements have been measured on Historical Cost basis which is one of the most commonly adopted basis as provided in The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standards (BAS) Responsibility for Preparation and Presentation of Financial Statements: The Board of Directors is responsible for the preparation of financial statements under section 183 of the Companies Act, 1994 and as per the provision of The Framework for the Preparation and Presentation of Financial Statements issued by the Bangladesh Accounting Standard (BAS) Use of Estimates and Judgment: The preparation of financial statements in conformity with BASs 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 if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes: Note 04: Property, Plant & Equipment (considering useful life of assets); Note 06: Inventories; Note 08: Accounts Receivable; Note 15: Provision for Tax; Note 16: Liabilities for expenses Functional and Presentational Currency and Level of Precision: The financial statements are prepared in Bangladeshi Taka (Taka/Tk./BDT) which is the Company s both functional currency and presentation currency. All financial information presented in Taka and have been rounded off to the nearest Taka Significant Accounting Policies: The accounting policies set out below have been applied consistently through out the period presented in these financial statements Property, Plant and Equipment: a. Recognition and Measurement: In compliance with BAS16 (Property, Plant & Equipment) items of property, plant and equipment (PPE), excluding land, are initially measured at cost less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost. The cost of an item of PPE comprises its purchase price, import duties and nonrefundable taxes, after deducting trade discount and rebates and any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the intended manner. b. Capitalization of Borrowing Cost: Finance costs that are directly attributable to the construction of plants are included in the cost of those plants in compliance with BAS23: Borrowing Cost, allowed alternative treatment. Capitalization of borrowing costs cease from the date of the report submitted by commercial test witness committee which, in accordance with Power Purchase Agreement, confirms the availability of plants for use. c. Subsequent Costs: The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day to day maintaining cost on PPE are recognized in the Statement of Comprehensive 286 REDHERRING PROSPECTUS

289 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Income as incurred. d. Depreciation: No depreciation is charged on land and land development. Depreciation is recognized in the Statement Of Profit or Loss and Other Comprehensive Income on a straight line basis over the estimated useful lives of each item of property, plant & equipment. Each item of PPE are depreciated from the month in which the assets comes into use or capitalized. In case of disposals, no depreciation is charged in the month of disposal. Depreciation of Power Plant has been charged considering 30 years of useful life and residual value as 10% of original cost, on straight line basis on the ground that management intends to continue with operation after completion of 15 years as stated in the Power Purchase Agreement (PPA). The rate of depreciation on PPE for the current period as follows: Name of the Assets As on June 30, 2015 (in years) Land & Land development Furniture & Fixtures 10 Office & Electrical Equipment 5 Office Decoration 5 Motor Vehicles 5 Building & Civil Construction 15 Maintenance Equipment 5 Motor Vehicles(Leasehold Assets) 4 Plant & Machineries 30 e Retirements and Disposals: An asset is derecognized on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized as gain and loss from disposal of asset under other income in the Statement Of Profit or Loss and Other Comprehensive Income. f Impairment If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss is recognized as an expense in the Statement Of Profit or Loss and Other Comprehensive Income Financial Instruments A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in Statement Of Profit or Loss and Other Comprehensive Income Advances, deposits & prepayments Advances are initially measured at cost. After initial recognition advances are carried at cost less deductions, adjustments or charges to other account heads such as PPE or inventory etc Cash and Cash Equivalents: For the purpose of Financial position and Cash Flow Statements, Cash in hand and Bank balances represent cash and cash equivalents considering the BAS1 Presentation of Financial Statements and BAS7 Statement of Cash Flow, which provide that Cash and Cash equivalents are readily convertible to known amounts of Cash and are subject to an insignificant risk of changes in value and are not restricted as to use Statement of Cash Flows: Statement of Cash Flow is prepared principally in accordance with BAS7 Cash Flow Statement and the cash flow from the operating activities have been presented under direct method as prescribed by the Securities and Exchange Rules, 287

290 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, and considering the provision of paragraph 19 of BAS7 which provides that Enterprises are Encouraged to Report Cash Flow from Operating Activities using the Direct Method Accounts Receivables: Accounts receivables consists of unpaid bills receivables from Bangladesh Power Development Board (BPDB) and unbilled revenue recognized at the Statement of Financial Position date Inventories: Inventories consisting of HFO, lube oil, diesel, alternator grease, coolnet water, spare parts etc. These are for use in the operation and maintenance of power plant. Cost of inventories include expenditure incurred in acquiring the inventories and other costs incurred in bringing them to use. Inventories are valued at cost or net realized valued which ever is lower Provisions: A provision is recognized on the balance sheet date if, as a result of past events, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation Employee Benefits The Company maintains both defined benefit plan and defined contribution plan for its eligible permanent employees. The eligibility is determined according to the terms and conditions set forth in the respective rules & deeds. a. Defined Contribution Plan (Provident Fund) The Company contributes to a provident fund scheme (defined contribution plan) with effect from July 01, 2014 for employees eligible to be members of the fund in accordance with the rules of the provident fund constituted under an irrevocable trust. All permanent employees contribute 10% of their basic salary to the provident fund and the company also makes equal contribution. b. Defined Benefit Plan (Gratuity) The Company, for its present eligible permanent employees, operates a gratuity scheme with effect from July 01, This gratuity scheme is not recognized by the National Board of Revenue. The entitlement is equal to one month last basic salary per employee per year. Although no actuarial valuation was done to quantify actuarial liabilities as per BAS 19: Employment Benefits, such valuation is not likely to yield a result significantly different from the current provision. c. Workers Profit Participation Fund Allocation for workers profit participation funds is to be 5% of profit before charging such expenses as per provisions of the Labor Act 2006 with effect from July 01, d. Employees Life Insurance The company has introduced employees life insurance policy for its permanent employees with insurance coverage effect from July 01, The amount of premium is calculated based on employees latest basic salary. Premium is charged as expenses in Statement of Comprehensive Income Foreign Currency Translation: Foreign currency transactions are translated into Bangladeshi taka at the rates ruling on the transaction date. All monetary assets and liabilities at the balance sheet date are translated using rates prevailing on that day. Gain/Loss arising from translation of foreign currency is recognize as Income/Expenses in the Statement Of Profit or Loss and Other Comprehensive Income Revenue Recognition: Revenue is initially recognized in the Statement Of Profit or Loss and Other Comprehensive Income upon supply of electricity based on net energy output on a monthly basis. Net energy output is determined by the Joint meter reading and verification committee consisting of BPPL personnel s and BPDB representatives. After initial recognition, adjustment is made on actual bill paid by the BPDB Financial Expenses: Financial expenses comprises interest expenses on loan. All borrowing costs are recognized in the Statement Of Profit or Loss and Other Comprehensive Income using effective interest method except to the extent that they are capitalized during construction period of the plants in compliance with BAS23: Borrowing Cost Income Tax: a. Current Tax: No provision for Income Tax on revenue is required to be recognized as the Company has received exemption from all of its taxes from Government of Bangladesh under Private Sector Power Generation Policy & SRO # 211 dated July 01, 2013 for a period of 15 years from starts of its commercial operation date. 288 REDHERRING PROSPECTUS

291 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Income tax on other income & financial income has recognized using tax rates enacted or substantively enacted at the reporting date. The tax rates used for reporting periods are Income Year Tax rates on Other Income % % b. Deferred Tax: There are no temporary difference is accrued as yet between the carrying amount of assets and liabilities for financial reporting purpose and amounts used for taxation purpose. As no deferred tax is recognized Earnings per Share: The Company presents basic and diluted (when applicable) earnings per share (EPS) data for its ordinary shares. a. Basic Earnings per Share: Basic earnings per share is calculated by dividing the total comprehensive income attributable to the ordinary shareholders of the Company by the weighted average number ordinary share outstanding during the reported period. b. Weighted average number of ordinary shares outstanding during the year: This represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary shares issued during the year multiplied by a time weighting factor. The time weighting factor is the number of days the specific shares are outstanding as a proportion of the number of days in the year. c. Diluted Earnings Per Share: A there were no potential ordinary shares issued by the Company, so no dilution is taken into effect Leases: The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at the inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Leases are classified as finance leases whenever the terms of lease transfer substantially all the risk and rewards of ownership to the lessee. All other leases are classified as operating leases Contingencies: Contingencies arising from claim, litigation assessment, fines, penalties etc. are recorded when it is probable that a liability has been incurred and the amount can reasonably be measured Events after Reporting Period: Events after reporting period that provide additional information about the Company s position at the balance sheet date are reflected in the financial statements. Events after reporting period that are not adjusting event are disclosed as off balance sheet items Going concern The company has adequate resources to continue the operation for foreseeable future and hence, the financial statements have been prepared on going concern basis. Assessed by the management, there are no material uncertainties relating to events or conditions which may cause significant doubt upon the company s ability to continue as a going concern Related party disclosure: As per Bangladesh Accounting Standard (BAS 24) the parties are considered to be related if one of the party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The company carried out transactions in the ordinary course of business on an arm s length basis with its related parties. 289

292 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Property, Plant & Equipment: Tk. 4,094,964,784 Cost Opening Balance 3,171,968, ,117,787 Addition during the year 1,064,472,006 3,034,850,264 Adjustment during the year Closing Balance of Cost 4,236,440,057 3,171,968,051 Accumulated Depreciation Opening Balance 21,632,315 1,100,021 Charged during the year 119,842,958 20,532,294 Adjustment during the year Closing Balance of Depreciation 141,475,273 21,632,315 Written Down Value 4,094,964,784 3,150,335,736 Details of Property, Plant & Equipment is stated in Schedule 1. Hypothecation of all fixed assets on first ranking pari passu basis creating present and future charge with the RJSC against the Term loan that sanctioned by the United Commercial Bank Limited & Trust Bank Limited Capital Work in Progress (WIP): Tk. 17,196,630 Particulars Flue Gas Desulfurization 240,100,391 Steam Turbine & Generator 396,877,262 Building & Civil Construction 17,196,630 Total (Note: 05.01) 17,196, ,977, Closing balance of WIP Particulars Opening Balance 636,977,653 2,438,467,852 Add: Addition during the year 437,701, ,515,804 1,074,679,222 3,384,983,656 Less: Accounted for as PPE (1,057,482,592) (2,748,006,003) Closing Balance 17,196, ,977, Investment in Associate: Tk. 510,000 Particulars Karnaphuli Power Limited (KPL) 510,000 Total 510,000 KPL, being a 48.57% associate company of BPPL, incorporated as private limited company on November 17, 2014 for the purpose of submitting proposal to Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) to implement 100MW IPP power plant on BOO basis. The proposal was submitted and waiting for decision of MPEMR Inventories: Tk. 581,914,882 Particulars Opening Balance 441,747,323 Add: Purchase during the year 2,415,595,670 1,125,848,975 2,857,342,993 1,125,848,975 Less: Consumption during the year (2,275,428,111) (684,101,652) Closing Balance (Note07.01) 581,914, ,747,323 Detail list of Inventory is annexed herewith in Schedule 2 Taka Taka 290 REDHERRING PROSPECTUS

293 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Closing Balance of Inventories Particulars Quantity HFO 17,393,287 ltr. 546,952, ,679,535 Diesel 19,231 ltr. 1,268,670 1,607,034 Spare Parts 968 pcs. 3,621, ,650 Lube Oil 92,725 ltr. 26,041,744 8,196,754 Other Lubricants 13,171 ltr. 4,030,086 47,350 Total 581,914, ,747,323 The balance of inventory has been counted at the year end in the presence of management team Advances, Deposits & Prepayments: Tk. 15,091,604 Particulars Advances: Advance for Other Expenses (Note : 08.01) 789,329 Advance Income Tax 202, ,428 Advance against PPE * 495,012 24,538,345 SubTotal 1,487,112 25,368,773 Deposits: Security Deposit for Utility Connection 625,960 2,915,960 Deposits against Storage Tank Rent 5,395,500 5,395,500 Deposits against Lease Rent 291, ,145 SubTotal 6,312,605 8,602,605 Deposit are realisable after one years. Prepayments: Prepayment for Office Rent 204, ,000 Prepayment for Yard Rent 137,000 Prepayment against Insurance Premium** 7,087,187 3,638,822 SubTotal 7,291,887 3,908,822 GrandTotal 15,091,604 37,880,200 * Advance paid against procurement of maintenance equipment (pump) for the 50 MW Patenga power plant. ** Insurance premium amounting Tk. 8,504,625 has paid for the operational coverage from the period May 2015 to April 2016 out of which premium for May to June 2015 has charged to statement of comprehensive income Advance for Other Expenses Utility Expenses 18,000 Issue Management Fee 345,000 Oil Carrying Expenses 426,329 Total 789, Accounts Receivables: Tk. 770,668,617 Particulars Bangladesh Power Development Board (BPDB) 770,668, ,852,967 Total 770,668, ,852,967 This balance represents the arrear bill from BPDB. Aging of Accounts Receivables Invoiced 030 days 239,396, ,817,984 Invoiced days 427,866, ,034,983 Invoiced over 180 days 103,405,633 Total 770,668, ,852, Other Receivables: Tk. 27,177,619 Particulars Royal Educare Limited 26,896,959 Karnaphuli Power Limited (KPL) 280,660 Total 27,177,619 Royal Educare Limited, a related party of Baraka Patenga Power Limited, has been availed a short term loan at interest rate of 15% p.a. Taka Taka 291

294 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars Cash & Cash Equivalents: Tk. 38,325,372 As on As on Particulars Cash in Hand 757, ,726 Sub Total 757, ,726 Cash at Bank Trust Bank Ltd., Sylhet Cor. Br. (A/C # ) 2,760,624 (3,043,764) Trust Bank Ltd., Naval Rd. Br., Ctg. (A/C # ) 11,875 (72,397) Trust Bank Ltd., Jublee Road Br., Ctg. (A/C # ) 332 2,482 Bank Asia Ltd., Laldighirpar Br., Sylhet (A/C # ) 21,072 Bank Asia Ltd., Sylhet Uposhohar Br. (A/C # ) 346,600 UCBL, CD A/C, Bijoy Nagar Br. (A/C # ) 4,138,295 UCBL, STD A/C, Bijoy Nagar Br. (A/C # ) 552,548 1,141 Social Islami Bank Ltd., Sylhet Br. (A/C # ) 9,072 Rupali Bank Ltd., Mirabazar Cor. Br. (A/C # ) 98,690 Sub Total 13,334,451 1,492,119 FDR Trust Bank Limited (BG Margin) 15,000,000 15,000,000 United Commercial Bank Limited (BG Margin) 3,500,000 United Commercial Bank Limited (LC Margin) 233,000 Union Capital Limited 5,500,000 5,500,000 Sub Total 24,233,000 20,500,000 Grand Total 38,325,372 22,880,845 The reconciliation of bank balance has been performed and found in order. Cash in hand has been counted by the management at the year end Share Capital: Tk. 945,000,000 Authorized: 300,000,000 Ordinary Shares of Tk. 10 each 3,000,000,000 3,000,000,000 (300,000,000 Ordinary shares of Tk. 10 each in the year ended June 30, 2014) Issued, Subscribed and Paidup: 94,500,000 Ordinary Shares of Tk. 10 each 945,000, ,000,000 (94,500,000 Ordinary shares of Tk. 10 each in the year ended June ) Shareholding Position was as follows: Sl. No. Name of shareholders Percentage of Shareholdings Taka Taka Amount in Tk Baraka Power Limited ,950, ,950, Faisal Ahmed Chowdhury ,350,000 28,350, Gulam Rabbani Chowdhury ,350,000 37,250, Fahim Ahmed Chowdhury ,100,000 14,100, Md. Shirajul Islam ,000,000 10,000, Monzur Kadir Shafi ,000,000 17,000, Afzal Rashid Chowdhury ,000,000 10,000, Touhidul Islam ,000,000 8,000, Other Shareholders ,250, ,350,000 Total ,000, ,000, REDHERRING PROSPECTUS

295 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Term Loan: Tk. 3,209,186,653 Long Term Portion Particulars United Commercial Bank Limited (IPFF) 1,218,492,939 1,231,635,451 Trust Bank Limited (IPFF) 507,863, ,323,731 United Commercial Bank Limited (PFI) 274,755, ,511,134 Trust Bank Limited (PFI) 414,392, ,759,096 Social Islami Bank Limited 355,163,817 Union Capital Limited 156,343, ,967,112 SubTotal 2,927,011,040 2,709,196,524 Short Term Portion United Commercial Bank Limited (IPFF) 54,829,117 Trust Bank Limited (IPFF) 22,962,612 United Commercial Bank Limited (PFI) 30,823,749 19,182,625 Trust Bank Limited (PFI) 85,444,155 55,651,333 Social Islami Bank Limited 47,590,716 Union Capital Limited 40,525,264 9,351,846 SubTotal 282,175,613 84,185,804 GrandTotal 3,209,186,653 2,793,382,328 Particulars UCBL & TBL (IPFF loan) UCBL & TBL (PFI loan) Social Islami Bank Ltd. Union Capital Ltd. Interest Rate 6 months LIBOR + 30 basis point + 2.5% p.a. Tenor Purpose Repayment Amount 12 years (including 02 years grace period) Taka Taka 13 % p.a % p.a % p.a. 8 years (including 06 months grace period) To develop and implement the project; 06 years 05 years (including 03 months grace period) 5.34 crore/qua. (appx.) 5.29 crore/qua crore/qua crore/month Expiry 30/Oct/ /Mar/ /Feb/ /Mar/2019 In addition, Trust Bank Limited has disbursed Term Loan of BDT million at interest rate of 13.50% p.a. with validity of 04 years (including 03 months grace period) which will be expired on May 12, 2018 by repaying installment Tk crore per quarter. The security package for both United Commercial Bank Limited and Trust Bank Limited (IPFF & PFI) term loan are as follows: Mortgage of project land; Hypothecation of all fixed and floating assets including but not limited to machinery, book debts, furniture, fixture and equipment on first ranking pari passu basis creating present and future charge with the RJSC; Establishment of Escrow Account and Debt Service Account with appropriate cash flow; Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee; Copayee of benefits under all insurance policies insuring the relevant moveable and immoveable assets of the issuer. The security package for Social Islami Bank Limited term loan are as follows: Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee (except Independent Director); Lien of 1,22,85,000 sponsors shares of Baraka Power Limited. The security package for Union Capital Limited term loan are as follows: Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee (except Independent Director); Lien of 70,00,000 sponsors shares of Baraka Power Limited. 293

296 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars The security package for Trust Bank Limited term loan (Tk crore) are as follows: Corporate Guarantee of Baraka Power Limited; Directors Personal Guarantee (except Independent Director); As on As on United Commercial Bank Limited (as mandated lead arranger) has been sanctioned USD million through Investment Promotion & Financing Facility (IPFF) of Bangladesh Bank funded by IDA of World Bank. As Participating Financial Institute s (PFI) participation portion; United Commercial Bank Limited & Trust Bank Limited has been sanctioned BDT million & BDT million respectively Finance Lease Liability: Tk. 7,402,561 Long Term Portion Prime Finance & Investment Limited 4,848,327 7,402,579 SubTotal 4,848,327 7,402,579 Short Term Portion Prime Finance & Investment Limited 2,554,234 2,003,335 SubTotal 2,554,234 2,003,335 GrandTotal 7,402,561 9,405,914 Taka Taka Interest Rate Tenor Repayment Amount Purpose 15 % p.a. 04 years Tk. 291,145 only per month; To purchase two units of Motor Vehicle; Corporate Guarantee of Baraka Power Limited Personal Guarantee of Mr. Faisal Ahmed Chowdhury & Mr. Gulam Rabbani Chowdhury. Obligation under Finance Lease has been recognized as liability in the Statement of Financial Position, from the date of inception of the lease agreement, at amount equal at the inception of lease to the lower of fair value of leased assets and present value of minimum lease payment. The Principal amount of lease obligation payable after the date of statement of financial position is as follows : Particulars Future Minimum Lease Payment Interest Present Value of minimum lease payment Present Value of minimum lease payment Not Later than one year 3,493, ,506 2,554,234 2,003,335 Later than one year but not later than five years 5,472, ,493 4,848,327 7,402,579 Later than five years Total obligation under finance lease 8,966,560 1,563,999 7,402,561 9,405, Short Term Liabilities: Tk. 927,876,498 Particulars LC LiabilityUnited Commercial Bank Limited 399,369, ,672,887 LTR Liability United Commercial Bank Limited 128,811, ,847,277 LTR Liability Trust Bank Limited 266,873, ,755,749 Bank Overdraft United Commercial Bank Limited* 132,821,559 59,228,865 Total 927,876,498 1,170,504,778 * United Commercial Bank Limited has been sanctioned overdraft facility of Tk million at interest rate of 13.00% p.a. for the purpose of meeting up day to day expenditure of the Company. 294 REDHERRING PROSPECTUS

297 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Provision for Income Tax: Tk. 2,250,179 Particulars Opening Balance 3,100,931 2,856,701 Add: Addition during the year 2,005, ,230 5,106,880 3,100,931 Less: Adjustment during the year (2,856,701) Closing Balance 2,250,179 3,100, Liabilities for Expenses: Tk. 4,381,494 Particulars Office Rent 229,700 Utility Expenses 2,176,744 PF Expenses 1,974,750 Audit Fee 230, ,000 Total 4,381, , Accounts Payables: Tk. 5,531,785 Particulars Adroit Environment Consultants Ltd. 200,000 M/S Pronoyon 55,000 Al Mansur Trading Corporation 1,341,814 MJL Bangladesh Limited 5,094,072 Ejab Distribution limited 4,868,120 Weber Power Solution Ltd. 322,050 Super Star Engineering Ltd. 197,500 South Eastern Tank Terminal Ltd. 4,914,235 M/S Hasina Enterprise 98,000 Total 5,531,785 11,559,006 Aging of Accounts Receivables 030 days 3,973,918 9,962, days 1,557,867 over 180 days 1,596,814 Total 5,531,785 11,559, Loan from Holding Company: Tk. 99,591,438 Particulars Baraka Power Limited 99,591, ,757,954 Total 99,591, ,757,954 Aging of Accounts Receivables 030 days 38,794,175 11,858, days 60,797, ,899,092 over 180 days Total 99,591, ,757,954 The company has availed a working capital facility from its holding company namely Baraka Power interest rate of 14% p.a. The interest rate has reviewed once in every year Revenue: Tk. 3,021,633,767 Particulars Capacity Proceeds 433,280,805 68,951,340 Variable Operational & Maintenance Proceeds 103,193,785 20,862,696 Fuel Proceeds 2,485,159, ,038,931 Total 3,021,633, ,852,967 The revenue amount for the year ended June 30, 2014 represents about 02 (two) months proceeds because the commercial operation of the plant has been started on May 04, 2014; where June 30, 2015 balance represents full year revenue proceeds. Taka Taka 295

298 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Cost of Sales: Tk. 2,429,830,390 Particulars Fuel Consumption (Note : 21.01) 2,202,719, ,371,256 Lubricant Consumption (Note : 21.02) 72,708,900 3,730,396 Fuel Tank Rent 41,568,106 Oil Carrying Expenses 18,538,619 Depreciation on Plant & Machinery 90,839,751 13,523,716 Repair & Maintenances on Plant & Machinery 3,455, ,568 Total 2,429,830, ,968,936 Lubricants consists of Diesel, Lube oil, Grease, Coolnet water, Maxi Guard etc Fuel Consumption Particulars Opening Balance 431,679,535 Add: Purchase during the year 2,317,992,206 1,112,050,791 2,749,671,741 1,112,050,791 Closing Balance (546,952,530) (431,679,535) Consumption during the year 2,202,719, ,371, Lubricant Consumption Particulars Opening Balance 9,851,138 Add: Purchase during the year 94,198,262 13,581, ,049,400 13,581,534 Closing Balance (31,340,500) (9,851,138) Consumption during the year 72,708,900 3,730, General & Administrative Expenses: Tk. 82,620,420 Particulars Salary & Allowances 27,675,539 9,918,619 Directors Remuneration 5,700, ,000 Communication Expenses 555, ,317 Travelling & Conveyance 2,590, ,266 Utility Expenses 361,566 Office Rent 2,506,961 1,210,712 AGM & EGM Expenses 192,904 Vehicle Running expenses 1,990, ,114 General Repair & Maintenance 1,620, ,849 Entertainment & Others 645, ,132 Business Development Expenses 741,114 61,625 Fooding & Lodging 789, ,081 Advertisement & Publicity 39, ,307 Audit Fee 230, ,000 Photocopy & Others 42,513 58,851 Uniform & Others 614, ,356 Newspaper, Books & Periodicals 77,379 5,435 Printing & Others 149,213 42,688 Insurance Premium 4,746,260 Annual Fee 776, ,149 Miscellaneous 1,600 Office Stationeries 82, ,412 Gift & Greetings 59,900 27,525 Rest House Keeping Expenses 315,070 79,000 Meeting Attendance Fee 175,000 30,000 Annual Sports & Religious Expenses 683,002 Gardening Expenses 48,850 Donation & Subscription 146,000 Education & Training 60,000 Depreciation Expenses 29,003,207 7,008,578 Total 82,620,420 22,154,616 Taka Taka 296 REDHERRING PROSPECTUS

299 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, 2015 Particulars As on As on Other Income: Tk. 4,801,207 Particulars Foreign Exchange Loss Trust Bank Ltd. (IPFF Loan) (256,122) Foreign Exchange Gain UCBL (IPFF Loan) 4,100,360 Interest Income earned on Loan with Related Party* 956,969 Total 4,801,207 * Interest income has earned on loan with Royal Educare Limited, a related party of the Company, at interest rate of 15% p.a Financial Income: Tk. 930,080 Particulars Bank Interest 930, ,804 Total 930, , Financial Expenses: Tk. 218,898,508 Particulars Interest Expenses: Trust Bank Limited 96,440,321 15,319,823 United Commercial Bank Limited 56,794,095 6,153,463 Social Islami Bank Limited 15,284,283 Union Capital Limited 7,234,390 Prime Finance & Investment Limited 1,490, ,061 Other Financial Expenses 40,490,608 3,609,653 Sub Total 217,734,084 25,704,000 Bank Charge & Commission 352,424 65,568 Bank Guarantee Expenses 812,000 1,697,400 Total 218,898,508 27,466, Income Tax Expenses: Tk. 2,005,949 Particulars Income Tax Expenses on Other Income (Note : 03.14) 1,680,422 Income Tax Expenses on Bank Interest 325, ,230 Total 2,005, , Earnings Per Share (EPS): Tk Particulars Profit Attributable to Ordinary Shareholders (A) 294,009,787 61,716,021 Weighted Average Number of Ordinary Shares Outstanding during the year (Note 27.01) (B) 94,500,000 16,357,778 Basic Earnings Per Share (EPS) (C=A/B) Weighted Average Number of Ordinary Shares Outstanding: The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares issued during the year multiplied by a timeweighted factor. The timeweighted factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year (considering 360 days in a year). Date of Allotment Ordinary Share Weighted no. of Days Calculation Weighted No. of Share Opening as on July 01, , ,000 Ordinary share issued on ,400, ,257,778 Closing as on June 30, ,500,000 16,357,778 Taka Taka Date of Allotment Ordinary Share Weighted no. of Days Calculation Weighted No. of Share Opening as on July 01, ,500,000 94,500,000 Issued during the year Closing as on June 30, ,500,000 94,500,

300 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Dilution of Earnings Per Share: No diluted earnings per share is required to be calculated for the year presented as there was no potential ordinary shares has been issued by the company, as such no scope for dilution of shares during the year Contingent Liability: Tk. 220,000,000 Particulars BG No. Expiry Date Bank Guarantee as Performance Security, BPDB 01/11, TBL* 7/31/ ,000, ,000,000 Bank Guarantee as Operational Security, BPDB 80/2014, UCBL** ,000,000 Total 220,000, ,000,000 *Bank Guarantee # 01/11 issued by Trust Bank Limited in favor of Bangladesh Power Development Board (BPDB) has not been released yet by BPDB. **Bank Guarantee # 80/2014 issued by United Commercial Bank Limited in favor of Bangladesh Power Development Board (BPDB) as operational security has been renewed for further one year upto Commitment of Capital Expenditure: Tk. Nill There is no commitment has made by the company against Capital Expenditure. BDT BDT 298 REDHERRING PROSPECTUS

301 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Remittance of Foreign Currency: Tk. 575,302,162 Name of item L/C Number Value as at Value as at in FCY in BDT in FCY in BDT Capital Machinery ,000 46,118,450 Capital Machinery ,377 41,962,131 Capital Machinery ,146 10,630,186 Capital Machinery ,492 6,161,425 Capital Machinery ,106 5,511,426 Capital Machinery ,018 2,946,736 Capital Machinery ,700 2,302,047 Capital Machinery ,608 8,418,206 Capital Machinery ,098,692 1,609,277 Capital Machinery ,000 5,890,760 Capital Machinery ,000, ,020,000 Capital Machinery ,740 1,142,497 Capital Machinery ,950 1,701,345 Capital Machinery ,959 40,844,592 Capital Machinery ,000 3,100,400 Capital Machinery ,784 2,928,638 Capital Machinery ,775 11,531,550 Capital Machinery ,216 20,014,322 Capital Machinery , ,343 Capital Machinery ,916 3,093,889 Capital Machinery , ,338 Capital Machinery ,655 1,523,459 Capital Machinery ,827 3,939,601 Capital Machinery , ,570 Capital Machinery ,000 2,712,850 Capital Machinery , ,855 Capital Machinery ,500 1,278,915 Capital Machinery , ,686 Capital Machinery , ,064 Capital Machinery ,500 6,782,125 Spare Parts , ,747 Spare Parts , ,941 Spare Parts , ,626 Heavy Furnace Oil (HFO) ,692, ,472,884 Heavy Furnace Oil (HFO) ,299, ,514,592 Heavy Furnace Oil (HFO) ,622 26,053,372 Total 7,341, ,302,162 7,123, ,107,

302 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, Related Party Disclosure A. During the year, the Company carried out a number of transactions with related party in the normal course of business. The names of the related parties and nature of these transactions have been set out in accordance with the provisions of BAS 24: Related Party Disclosures. Transaction with key management personnel: Taka Taka Employee Benefits 6,825,600 5,602,840 Total 6,825,600 5,602,840 Key management personnel includes Chiarman & Head of Planning & Business Development, Managing Director, Deputy Managing Director, Head of Administration and Plant Manager. B. Other Related Party Transactions Transactions during the year Nature of Relationship Name of the Related Party Baraka Power Limited Holding company Royal Educare Limited Common Management Karnaphuli Power Limited Associate Company Receivables/(Payables) Taka Taka Taka Taka 183,415, ,151,460 32,417,889 21,606,072 (99,591,438) (114,757,954) 26,896,959 25,939, , , , , Capacity Name of Plant Licensed Capacity (MW) Patenga, Chittagong Plant factor (% on Licensed Capacity) considering the unit of energy sold During the year ended on June 30, 2015 Average Maximum Energy Generation (MwH) Energy Sold (MwH) 55.70% 77.36% 243, , Disclosure as per Requirement of Schedule XI, Part II of The Companies Act, 1994 a. Disclosure as per Requirement of Schedule XI, Part II Para 4 Payment to Directors during the year ended on June 30, 2015Name Mr. Faisal Ahmed Chowdhury Designation Period Chairman and Head of Planning & Business Development July 14 to June '15 1,200, ,000 Managing Director July 14 to June '15 1,200, ,000 Deputy Managing Director & Head of Finance July 14 to June '15 2,700, ,000 Director & Head of Admin. July 14 to June '15 600, ,000 5,700, ,000 Mr. Gulam Rabbani Chowdhury Mr. Monzur Kadir Shafi Mr. Fahim Ahmed Chowdhury Total b. Disclosure as per requirement of Schedule XI, Part II, Note 5 of Para 3 Payment to Employees during the year ended on June 30, 2015Salary Range (Monthly) 300 Officer & Staff Head Office Factory Worker Total Employee Below Tk. 3,000/ Above Tk. 3,000/ Total REDHERRING PROSPECTUS

303 Baraka Patenga Power Limited NOTES TO THE FINANCIAL STATEMENTS As on and for the year ended June 30, General Disclosures: Comparative figures have been rearranged wherever considered necessary to conform to the current year s presentation Events after reporting period: a. The Board of Directors of the Company at its meeting held on August 24, 2015 has recommended no dividend for the year ended June 30, b. The Board of Directors of the Company has been decided to establish Workers Profit Participation Fund, Employees Life Insurance Policy and Gratuity Fund as employees benefit which has come into effect from July 01,

304 Baraka Patenga Power Limited SCHEDULE FOR PROPERTY, PLANT & EQUIPMENT as on June 30, 2015 Schedule 1 Cost Particulars Land & Land Development Balance as on Addition during the year Adjustment during the year Balance as on Depreciation Rate of Dep. (%) AdjustW. D. V. as on ment Balance as during on the year Charged Balance as during the on year W. D. V. as on ,748, ,748, ,748, ,748,880 Furniture & fixture 1,617, ,555 2,008,436 10% 176, , ,780 1,659,656 1,441,468 Office & Electrical Equipment 3,797,518 1,074,770 4,872,288 20% 509, ,969 1,381,361 3,490,927 3,288,126 Office Decoration 4,121, ,839 4,568,665 20% 713, ,039 1,587,245 2,981,420 3,408,620 Motor Vehicles 5,244,256 1,854,000 7,098,256 20% 2,097,702 1,277,651 3,375,353 3,722,903 3,146,554 Building & Civil Construction 313,922,192 87,736, ,659,151 7% 3,489,768 22,889,295 26,379, ,280, ,432,424 3,223,250 3,223,250 20% 224, ,801 2,998, ,452,553 94,726, ,178,926 6,986,481 26,310,123 33,296, ,882, ,466,072 10,772,336 10,772,336 1,122,118 2,693,084 6,957,134 9,650,218 1,122,118 2,693,084 3,815,202 6,957,134 9,650,218 13,523,716 90,839, ,363,467 3,570,125,328 2,691,219,446 13,523,716 90,839,751 04,363,467 3,570,125,328 2,691,219,446 Maintenance Equipment SubTotal Motor Vehicles (Leasehold Asset) SubTotal 10,772,336 10,772,336 Plant & Machineries** 2,704,743, ,745,633 3,674,488,795 SubTotal 2,704,743, ,745,633 3,674,488,795 GrandTotal 3,171,968,051 1,064,472,006 4,236,440,057 25% 3% Allocation of Depreciation: Cost of Sales General & Administrative Expenses Total 21,632, ,842,958 3,815, ,475,273 4,094,964,784 3,150,335,736 90,839,751 29,003, ,842,958 ** Addition on Plant & Machinery recognized as Flue Gas Desulfurization Plant and Steam Turbine & Generator has come into use. 302 REDHERRING PROSPECTUS

305 REDHERRING PROSPECTUS Baraka Patenga Power Limited List of Inventory as on June 30, 2015 Schedule 2 Category Item Name Quantity (Ltr/Nos) Amount HFO L/C # ,133, ,279,845 L/C # ,259, ,672,685 Total 17,393, ,952,530 Diesel HSD 19,231 1,268,670 Lube Oil Lubricants Cepsa Troncoil 44,526 12,467, Mobigard M440 46,613 12,585, Mobil Vaculine 528 1, , Mobil Corena S4R , Mobil DTE , Total 92,725 26,041, Nalfleet ,203 1,849,732 Boiler Feed WT 1, ,960 Chemical Oxygen Scavenger ,580 Condensate Corrosion Inhibitor ,800 Sodium Caustic 6, ,840 Buffer Solution 25 36,250 Discleaner Acid ,174 Tri Sodium Phospet ,750 Total 13,171 4,030,086 Spare Parts Power Factory Meter 1 19,843 Watt Meter 1 19,843 Volt Meter 1 19,843 VAR Meter 2 39,686 Metering Pump DJL5/ ,754 Metering Pump DZX1/ ,615 Clutch Shoe ( ) 8 22,250 Drive Belt ( ) 3 23,567 Gasket Set ( ) 8 105,687 Gasket ( ) 16 1,100 Gasket ( ) 16 4,120 Gasket ( ) Gasket ( ) 8 1,338 Gasket ( ) 16 1,100 Gasket ( )

306 Gasket ( ) 8 11,507 Gasket ( ) 8 28,004 Gasket ( ) 8 7,337 Gasket ( ) 8 33,970 Gasket ( ) 8 33,970 Gasket ( ) 8 2,175 Piston Guide Ring ( ) 8 23,900 Gasket ( ) 8 17,449 Gasket ( ) 16 4,383 Gasket ( ) 16 5,712 Gasket ( ) 8 14,872 Gasket ( ) 8 17,958 Gasket ( ) 16 3,907 Gasket ( ) 8 30,072 Disc, COMPL ( ) 1 5,889 Blind Disc ( ) 2 10,604 Sight Glass ( ) 4 6,557 Gasket ( ) Gasket ( ) 2 1,017.Gasket ( ) Gasket ( ) 2 17,792 Guide Tape ( ) 2 5,606 Gasket ( ) 4 31,959 Gasket ( ) 4 20,642 Gasket ( ) 4 54,678 Piston Guide Ring ( ) 4 16,916 Gasket ( ) 4 14,296 Guide Tape ( ) 4 22,185 Gasket ( ) 4 21,655 Gasket ( ) 4 1,700 Gasket ( ) Disc. COMPL ( ) 1 7,663 Blind Disc ( ) 2 11,906 Separating Disc ( ) 2 180,238 Gasket ( ) 2 1,390 Gasket ( ) 2 11,849 Gasket ( ) 2 14,490 Gasket ( ) 2 2,365 Gasket ( ) Sight Glass ( ) 2 3,371 Drive Belt ( ) 2 37,035 Clutch Shoe ( ) 2 5,723 Gasket Set ( ) 1 13,584 MCB C10 8 3,016 MCB C16 5 1,885 MCB C40 6 3,078 MCB C63 8 5, REDHERRING PROSPECTUS

307 REDHERRING PROSPECTUS PVC Connector (10 AMP) PVC Connector (15 AMP) 52 3,120 MCB C ,132 Cut Out Alarm Switch 26 13,000 Fire Alarm Siren 25 12,500 MCCB TP (100 Amp) 5 25,625 MCCB TP (200 Amp) 7 78,778 MCB TP (32 Amp) 15 24,135 Magnetic Conductor (25 Amp) 15 34,155 Insular Ceramic 25 1,250 Auto Starter 5 16,500 Fuse (160 Amp) 14 3,920 Fuse (125 Amp) 36 10,080 MCB TP (20 Amp) 14 20,608 MCCB TP (160 Amp) 7 73,640 MCCB TP (250 Amp) 6 69,540 MCCB TP (400 Amp) 4 94,020 Relay with Base (8 Pin) 36 7,200 Magnetic Conductor (SN21) 25 58,425 Magnetic Conductor (SN11) 14 18,536 Relay Thermal Overload (1622) 8 13,776 Relay Thermal Overload (711) 8 12,048 Relay with Base (14 Pin) 15 3,000 Hot Stick ,000 MCCB (630 Amp) 26 1,073,400 Push Button Switch 15 2,250 Indicator Lamp 16 4,480 PT100 Sensor 2 3,000 PVC Connector (60 Amp) 14 2,520 Magnetic Connector (640 V4 Amp) 5 6,620 Fuse Base (160,80 Amp) 9 2,520 Exit Signal 8 6,000 Emergency Light Auto 12 20,400 Smoke Detector 11 11,000 Fuse Base (32 Amp) 7 1,960 Limit Switch 15 5,250 MCB Signal Phase (2 Amp) 18 5,400 MCB Double Phase (25 Amp) 12 12,540 Photocell 3 25,500 Magnetic Conductor SN35 (60 Amp) 8 37,720 Magnetic Conductor SN35 (100 Amp) 7 80,934 MPCB LS (7090 Amp) 5 17,500 Total 968 3,621,

308 Selected ratios as specified in AnnexureD: Baraka Patenga Power Limited Ratio analysis For the period ended 31 December 2017 & year ended at 30 June 2017, 2016, 2015, 2014 and 2013 Financial ratio Formula 31/12/17 30/06/17 30/06/16 30/06/15 30/06/14 30/06/13 Consolidated Separate Consolidated Separate Separate Separate Separate Separate I. Liquidity Ratios Current ratio Quick ratio Current assets Current liabilities Current assets inventories Prepayments Current liabilities II. Operating Efficiency Ratios Accounts receivable turnover ratio Inventory turnover ratio Asset turnover ratio Revenue Average Accounts receivables Cost of revenue Average inventories Revenue Average total assets Gross margin ratio Gross margin Revenue Operating profit ratio Operating profit Revenue III. Profitability ratios Net profit ratio Return on Assets ratio (ROA) Return on Equity (ROE) Earnings per share (EPS) Net profit after tax Revenue Net profit after tax Average total assets Net profit after tax Total equity Net profit after tax available to ordinary shareholders No. of share (0.00) (0.01) (0.07) EBITDA margin EBITDA Revenue Debt to total assets ratio Total debt Total assets IV. Solvency Ratios Debt to equity ratio Times inerest earned ratio Total debt Total equity EBIT Interest/ finance cost (1.03) Debt service coverage ratio Net operating income Total debt service (0.01) V. Cash flow ratios NOCFPS NOCFPS to EPS ratio NOCF No. of share NOCFPS EPS (8.82) (0.05) (14.18) 0.67 Dhaka, Bangladesh Dated, 11 March 2018 Sd/ Kazi Zahir Khan & Co. Chartered Accountants 306 REDHERRING PROSPECTUS

309 REDHERRING PROSPECTUS Baraka Patenga Power Limited Ratio analysis: calculation For the period ended 31 December 2017 & year ended at 30 June 2017, 2016, 2015, 2014 and

310 Auditors report under Section 135(1), Para 24(1) of Part II of Schedule III of the Kv úvwb AvBb, 1994: As required under section 135(1), Para 24(1), Part II of the Third Schedule of the Companies Act 1994, Baraka Patenga Power Limited perpared the following statements of its assets and liabilities and operating results as at and for the half year ended 31 December 2017 and year ended 30 June 2017, 30 June 2016, 30 June 2015, 30 June 2014, 30 June 2013 and submitted those to us for our working and for issuance of our confirmation thereon. Accordingly we have reviewed the relevant audited financial statements and hereby confirm that the following information has been correctly extracted from those audited financial statements: A. Statement of Financial Position: Amount in Tk Consolidated Separate Consolidated Separate Separate Separate Separate Separate ASSETS Property, Plant and equipment 3,969,586,453 3,777,672,879 3,850,792,905 3,850,792,905 3,954,491,677 4,094,964,784 3,150,335, ,017,766 Capital WorkinProgress 33,208,342 17,196, ,977,653 2,438,467,852 Goodwill on Acquisition of Subsidiary 1,768,182 1,768,182 Investment in Subsidiary 1,045, ,500 Investment in Associates 960, ,000 NonCurrent Assets 3,971,354,635 3,778,718,379 3,852,561,087 3,851,328,405 3,988,660,019 4,112,671,414 3,787,313,389 2,574,485,618 Inventories 785,267, ,267, ,283, ,283, ,316, ,914, ,747,323 Investment in Marketable Securities 5,384,614 5,384,614 6,646,964 6,646,964 Advance, Deposits & Prepayments 419,308,977 26,047,217 79,746,306 28,629,821 24,802,370 15,091,604 37,880,200 19,265,200 Accounts Receivable 426,393, ,393, ,765, ,765, ,097, ,668, ,852,967 Other Receivable 22, ,472,630 10,000 10,000 16,000 27,177,619 Holding Company Balance 20,097,645 Cash & Cash Equivalents 15,147,108 14,099,594 30,525,364 30,498,055 59,410,835 38,325,372 22,880,845 12,070,442 Current Assets 1,651,523,875 1,862,665,231 1,476,977,927 1,425,834,133 1,233,741,488 1,433,178,094 1,311,361,335 31,335,642 Total Assets 5,622,878,510 5,641,383,610 5,329,539,014 5,277,162,538 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 EQUITY & LIABILITIES Equity Share Capital 992,250, ,250, ,250, ,250, ,000, ,000, ,000,000 1,000,000 Share Money Deposit 791,402,425 Fair Value Reserve (699,817) (699,817) (41,291) (41,291) Retained Earnings 762,162, ,355, ,097, ,600, ,618, ,628,900 50,619,113 (11,096,908) Sharehoders' Equity of Parent 1,753,712,326 1,770,906,035 1,700,306,525 1,700,808,876 1,481,618,278 1,289,628, ,619, ,305,517 Non Controlling Interest (1,557,231) (1,666,992) Total Equity 1,752,155,095 1,770,906,035 1,698,639,533 1,700,808,876 1,481,618,278 1,289,628, ,619, ,305,517 Liabilities Term LoanNon Current Portion 2,395,939,086 2,395,939,086 2,565,875,317 2,565,875,317 2,895,449,376 2,927,011,040 2,709,196,524 Finance Lease LiabiltyNon Current Portion 1,918,097 4,848,327 7,402,579 Noncurrent liabilities 2,395,939,086 2,395,939,086 2,565,875,317 2,565,875,317 2,897,367,473 2,931,859,367 2,716,599,103 Term LoanCurrent Maturity 370,935, ,935, ,499, ,499, ,050, ,175,613 84,185,804 Finance Lease Current Maturity 305, ,568 1,918,096 1,918,096 2,928,519 2,554,234 2,003,335 Short Term Liabilities 650,108, ,932, ,324, ,809, ,716, ,876,498 1,170,504,778 1,776,983,238 Provision for Income Tax 3,740,947 3,738,857 10,579 9,000 4,169,433 2,250,179 3,100,931 2,856,701 Liabilities for Expenses 1,077,656 1,009, , , ,684 4,381, ,700 46,000 Holding Company Balance 67,279,614 67,279,614 99,591, ,757,954 43,235,224 Accounts Payable 282,111, ,111, ,792, ,792,507 5,109,567 5,531,785 11,559,006 1,394,580 Other Payables 99,225,000 99,225,000 Current Liabilities 1,474,784,329 1,474,538,489 1,065,024,164 1,010,478, ,415,756 1,324,361,241 1,386,456,508 1,824,515,743 Total liabilities 3,870,723,415 3,870,477,575 3,630,899,481 3,576,353,662 3,740,783,229 4,256,220,608 4,103,055,611 1,824,515,743 Total equity and liabilities 5,622,878,510 5,641,383,610 5,329,539,014 5,277,162,538 5,222,401,507 5,545,849,508 5,098,674,724 2,605,821,260 Net asset value (NAV) per share , The above figures have been extracted from the respective year s restated audited financial statements. Dhaka, Bangladesh Dated, 11 March 2018 Sd/ KAZI ZAHIR KHAN & CO. Chartered Accountants 308 REDHERRING PROSPECTUS

311 REDHERRING PROSPECTUS B. Statement of Profit or Loss and Other Comprehensive Income As required under section 135(1), Para 24(1), Part II of the Third Schedule of the Companies Act 1994, Baraka Patenga Power Limited perpared the following statements of its assets and liabilities and operating results as at and for the half year ended 31 December 2017 and year ended 30 June 2017, 30 June 2016, 30 June 2015, 30 June 2014, 30 June 2013 and submitted those to us for our working and for issuance of our confirmation thereon. Accordingly we have reviewed the relevant audited financial statements and hereby confirm that the following information has been correctly extracted from those audited financial statements: A. Statement of Financial Position: Amount in Tk. July 2017Dec Consolidated Separate Consolidated Separate Separate Separate Separate Separate Revenue 1,144,108,972 1,144,108,972 2,648,485,011 2,648,485,011 2,119,185,034 3,021,633, ,852,967 Cost of revenues (839,552,234) (839,552,234) (2,003,865,451) (2,003,865,451) (1,487,507,065) (2,429,830,390) (697,968,936) Gross profit 304,556, ,556, ,619, ,619, ,677, ,803, ,884,031 General & Administrative expenses (27,936,290) (27,394,858) (59,946,268) (59,843,606) (69,554,248) (82,620,420) (22,154,616) (9,534,761) Profit from operating activities 276,620, ,161, ,673, ,775, ,123, ,182,957 88,729,415 (9,534,761) Other Income/(Loss) (5,479,317) 10,814,822 (9,681,257) (9,681,602) 4,596,307 5,731, ,804 7,617,870 Financial Expense (114,501,675) (114,266,160) (257,996,023) (257,113,460) (278,136,946) (218,898,508) (27,466,968) (1,857,789) Profit before tax 156,639, ,710, ,996, ,980, ,583, ,015,736 61,960,251 (3,774,680) Over Provision in prior year's Income Tax 484, ,997 Income Tax (3,730,368) (3,729,857) (9,121) (9,000) (2,093,704) (2,005,949) (244,230) (2,856,701) Profit for the period 152,909, ,980, ,471, ,456, ,489, ,009,787 61,716,021 (6,631,381) Other Comprehensive Income/(Loss) (658,526) (658,526) (41,291) (41,291) Total Comprehensive income for the year 152,250, ,322, ,430, ,415, ,489, ,009,787 61,716,021 (6,631,381) Profit attributabe to: Owners of the Company 153,289, ,954,538 Non Controlling Interest (380,239) (482,650) 152,909, ,471,888 Other comprehensive income attributabe to: Owners of the Company 152,630, ,913,247 Non Controlling Interest (380,239) (482,650) 152,250, ,430,597 Earnings per share Basic earnings per share (0.07) The above figures have been extracted from the respective year s restated audited financial statements. Dhaka, Bangladesh Dated, 11 March 2018 Sd/ KAZI ZAHIR KHAN & CO. Chartered Accountants 309

312 C. Dividend Declared for the last 5 (five) Years : Year Cash Dividend Stock Dividend Total Dividend 2017 (Half Year) 0% 0% 0% % 0% 20% % 5% 15% % 0% 0% % 0% 0% % 0% 0% Points to be noted: a). Baraka Patenga Power Limited was incorporated on 07th June 2011 vide registration number C93385/11 as private limited company and converted to public company limited company on 28th April 2014 with Registrar of Joint Stock Companies and Firms (RJSC) in Bangladesh under the Companies Act b). The Statement of Financial position as at 31 December 2017 (Consolidated & Separate) has been audited by us, 30th June 2017 (Consolidated & Separate), 2016 were audited by Malek Siddiqui Wali, 30th June 2015 were audited by Malek Siddiqui Wali and us, 30th June 2014 and 2013 were audited by Masih Muhith Haque & Co. c). The Statement of Profit or Loss and Other Comprehensive Income for the half year ended 31 December 2017 (Consolidated & Separate) has been audited by us, for the year ended 30th June 2017 (Consolidated & Separate), 2016 were audited by Malek Siddiqui Wali, for the year ended 30th June 2015 were audited by Malek Siddiqui Wali and us, for the year ended 30th June 2014 and 2013 were audited by Masih Muhith Haque & Co. d). The Company has two subsidiary namely, Karnaphuli Power Limited and Baraka Shikalbaha Power Limited. e). Figures related to previous years have been rearranged whenever considered necessary. f). The Company did not prepare any financial statements for any period subsequent to December 31, Dhaka, Bangladesh Dated, 11 March 2018 Sd/ Kazi Zahir Khan & Co. Chartered Accountants 310 REDHERRING PROSPECTUS

313 REDHERRING PROSPECTUS SECTION: XXVII CREDIT RATING REPORT 311

314 CREDIT RATNG AGENCY OF BANGLADESH LIMITED Ref: AGL (01)/RCM/180102/ March 2018 Mr. Gulam Rabbani Chowdhury Managing Director Baraka Patenga Power Ltd. 6/A/1 (2nd floor), Segunbagicha Dhaka1000 Subject: Credit Rating Baraka Patenga Power Ltd. Dear Sir, We are pleased to inform you that Credit Rating Agency of Bangladesh Ltd. (CRAB) has assigned the following rating to Baraka Patenga Power Ltd. Particulars Ratings Remarks Baraka Patenga Power Ltd. AA 3 BDT 2,793.8 Million Longterm Outstanding AA 3 (Lr) Details are at Appendix 1, which is the BDT 1,900.0 Million Shortterm Nonfunded Limit ST3 part of award letter Outlook Stable Lr Loan rating, ST Short Term, *Due to revolving nature, CRAB considers Cash Credit in the longterm rating scale. The entity ratings is valid up to 24 January 2019 and the loan ratings are valid up to limit expiry date of respective credit facilities or 24 January 2019 whichever is earlier. The ratings may be changed or revised prior to expiry, if warranted by extraordinary circumstances in the management, operations and/or performance of the entity rated. We hope the Ratings Awards will serve the intended purpose of your organization. Yours sincerely, Sd/ Hamidul Huq Managing Director Enclosure: Appendix REDHERRING PROSPECTUS

315 REDHERRING PROSPECTUS Appendix 1: Bank Loan Facilities of Baraka Patenga Power Ltd. (31 December 2017) Bank Facility Term Type Fund Type Sanctioned Outstanding Expiry United Commercial Bank Term Loan Longterm Funded 1, , Oct25 United Commercial Bank Term Loan Longterm Funded Sep23 United Commercial Bank Term Loan Longterm Funded Sep23 Trust Bank Term Loan Longterm Funded Oct25 Trust Bank Term Loan Longterm Funded Sep23 Trust Bank Term Loan Longterm Funded Sep23 Prime Finance & Investment Lease Finance Longterm Funded Feb18 BRAC Bank Term Loan Longterm Funded Mar21 Trust Bank Letter of Credit Shortterm Nonfunded Jun18 United Commercial Bank Bank Guarantee Shortterm Nonfunded Open Ended United Commercial Bank Letter of Credit Shortterm Nonfunded 1, May18 Amount in BDT Million Bank Inner Facility Inner Limit Outstanding Expiry United Commercial Bank Time Loan 1, Jun18 Trust Bank Time Loan Sep18 Amount in BDT Million Analyst contact Mir Arif Billah Assistant Vice President Alternative Contact Ehsanul Kabir Senior Vice President

316 Credit Rating Report Baraka Patenga Power Ltd. Particulars Ratings Remarks Baraka Patenga Power Ltd. AA 3 BDT 2,793.8 Million Longterm Outstanding AA 3 (Lr) BDT 1,900.0 Million Shortterm Nonfunded Limit ST3 Outlook Stable Details are at Appendix 1 Lr Loan rating, ST Short Term Date of Rating:25January 2018 Validity: Entity rating is valid till 24 January 2019; loan ratings are valid up to limit expiry date of respective credit facilities or 24 January 2019whichever is earlier. Rating based on audited financial statements up to 2017, bank liability(26 December 2017)and other relevant quantitative and qualitative information up to the date of rating declaration. Methodology: CRAB s Corporate Rating Methodology ( Analysts Mir ArifBillah mab@crab.com.bd Md. Abdur Rahman Evan evan@crabrating.com Table 1: Financial Highlights FINANCIAL HIGHLIGHT Sales , ,119.2 Rationale Net Profit Credit Rating Agency of Bangladesh Ltd. has assigned AA 3 (Double A Cash Flow From Operation Three) rating of Baraka Patenga Power Ltd. CRAB has also assigned Shareholders Equity 1, ,481.6 AA 3 (Lr) rating to BDT 2,793.8 million longterm loan and BDT million cash credit loan limit of Baraka Patenga Power Ltd. CRAB has Borrowed Funded Loan Limit 2, ,175.5 assigned ST3ratingto BDT 1,900.0million nonfunded limit of the Copany. CRAB assigned Stable Outlook to the ratings of Baraka Patenga Borrowed Fund Limit 4, ,075.5 Inventory Conversion Period Receivable Collection Period 107 Days 104 Days 118 Days 110 Days Power Ltd. Payable Deferral Period 60 Days 1 Days Baraka Patenga Power Ltd. is a public limited company, 51% equity Cash Conversion Cycle 151 Days 226 Days investment is held by Baraka Power Ltd.. The Company is 50 MW HFO fired IPP power plant at Patenga, Chittagong, established in 2011 Gross Profit Margin 24.3% 30.0% on Build, Own & Operate basis for 15 years. It started its commercial operation in The Plant has been operating by using 08 nos. EBITDA Margin 27.2% 33.5% Net Profit Margin Fixed Asset Turnover Borrowed Fund to Equity Sales to Borrowed Fund (Limit) 12.0% 0.7 X 1.6 X 8.7 X 13.5% 0.5 X 2.1 X 25.2 X of brand new Rolls Royce Engines. Earlier, the Project was financed through Bangladesh Bank, IPFF project cell and few commercial banks. In 2017, the Company had sales of BDT 2,648.4 million and witnessed 12.0% net profit margin. Debt Service Coverage Ratio 1.3 X 2.9 X Times Interest Earned Ratio 2.2 X 2.4 X Faisal Ahmed Chowdhury is the Chairman of Baraka Patenga Power Ltd., holding 3.0% shares. Mr. Ahmed is also Executive Member of Foreign Investors Chamber of Commerce and Industry for the year Gulam Rabbani Chowdhury is the Managing Director of the Company who also holds 3.0% shares of the Company. Mr. Chowdhury has long and diversified experiences in machine manufacturing, real estate, power, education and RMG sector. 314 REDHERRING PROSPECTUS

317 REDHERRING PROSPECTUS The ratingconsidered stable revenue generation ability with increasing net profit margin during the last four years due to run the plant at satisfactory level and efficient working capital management as well as positive cash flow position at present. The power plant of the Company has a contracted capacity of 50 MW contributing to the national grid under a 15 years contract with BPDB. The power plants are HFO fired and commissioned using8 brand new Rolls Royce Engines having capacity of MW each. Total capacity of the plant is MW. The rating is factored by the power plant s efficient operation since COD, with no instances of liquidity damage due to any default in meeting PPA obligations. The average load factor of the power plant has been at the satisfactory level. Out of 15 years concession agreement, it has only 11 years remaining. The Company has completed successful four years of operation. Moreover, it has only 7 years remaining of its longterm loan agreement. In next few years, the plant would go under overhauling which require capital fund.debt to Equity was 1.6 X. In 2017, EBIT DA was BDT 719 million which was four times to its longterm loan burden. The revenue of the Company is composed of three components. Capacity Payment, Energy Payment and Fuel Price. Capacity payment is directly related to the Dependable Capacity of the power plant. Fuel price covers 75% of total revenue. During the latest year, the power plant ran on 50.0 MW dependable capacity. Plant factor dropped to 63% in 2017 which was around 66% in year ago. However, hike of energy price did not affect the total revenue. Energy sales of Baraka Patenga Power Ltd. depending on the actual demand posted by BPDB. In 2017, total sales of the Company was BDT 2,648.4 million which was 25.0%less than that of previous year. The Company saw slight deterioration in controlling cost of sales. However, it experienced efficiency in operating expense, which resulted stable profitability. Net Operating Profit was BDT million which was BDT million one year back. The Company saw improvement in financial expense. Net Profit slightly increased to BDT million in Net Profit Margin was 12.0% which was 13.5% in As of Balance Sheet date Shareholders Equity was BDT 1,700.8million comprised of 58% Share Capital. Total Funded Borrowed Fund Limit came down to BDT 4,693.8 million. The Company observed moderate leverage. Borrowed Fund to Equity was 1.6 X. The Company observed moderate operating cycle. The Cash conversion cycle was 151 Days in Moderate cash conversion cycle resulted BDT million Cash Flow From Operation, which was 21.2% to sales. The Company was found strong coverage position in Debt Service Coverage Ratio and Times Interest Earned Ratio were 1.3 X and 2.2 X respectively. In CRAB s view, power shortage in Bangladesh has made the sector highly attractive for investment. Power sector investment offers the lenders very low business risks compared to corporate entities. Highly supportive authority offers implied sovereign support to ensure reliability of HFO supply and regulatory framework allows full cost recovery. Large well protected service area and support for the electric transmission system outweigh user considerations. Competition is absent in the sector and monopoly or oligopoly is contained by contract with public sector entities and regulatory authority. Regulatory framework is designed fundamentally to achieve balance between supply reliability and service, efficiency, price and financial returns to the project undertaker. However, actual execution of the long term plan is subject to effective measures taken against corruption in administration, high system losses, delays in completion of new plants, low plant efficiencies, erratic power supply, electricity theft, blackouts, and shortages of funds for power plant maintenance as well as political stability, stability and reconstruction of quick rental policy and government decision under separate regime. Rating Strengths Experienced promoters Qualified and experienced professionals in top and mid management Strong Management Information System Good feedback from external borrowers Continuous investment in different sector Strong group support Rating Challenges Moderate debt burden Lower plant factor over the period 315

318 Business Background Baraka Patenga Power Ltd. was the second private sector power generating company developed by a group of NRB investors and local entrepreneurs of Bangladesh which was incorporated on June 2011 as a Private Limited Company. Baraka Power Ltd., a listed public limited company holds 51% shares of the Company. Baraka Patenga Power Ltd. was incorporated as Private Limited Company in 2011 of which 51% equity investment isheld by Baraka Power Limited.In 2014, it was converted as Public Limited Company. On July 31, 2011, BPPL signed a Power Purchase Agreement (PPA) with BPDB and Implementation Agreement with MPEMR to generate and supply 50 MW of electricity on Build, Own & Operate (BOO) basis for a term of 15 years. The principal activity of the Company is to set up power plants for generation and supply of electricity. The plant having capacity of 50 MW located at Patenga, Chittagong started its commercial operation on May 04, The Plant has been operating by using 08 nos. of brand new Rolls Royce Engines having capacity of MW each with total capacity of the plant being MW since In addition, a cogeneration secondary power plant with capacity of 3.20 MW has been operating successfully throughout the year. The STG plant runs by heat recovery from 08 nos. of Rolls Royce gensets exhaust gas without burning any fuel and reduces the fuel cost by 6.40 % annually. The Project of BDT 4, million was financed through Bangladesh Bank IPFF project cell funded by the World Bank amounting USD million and rest from local source financed by United Commercial Bank Limited, Trust Bank Limited & BRAC Bank Limited. Particulars Details Current Name Baraka Patenga Power Limited Incorporation 07June 2011 Power Purchase Agreement 31July 2011 Commercial Operation 04 May 2014 Contracted Capacity 50.0 MW Fuel HFO Location Patenga, Chittagong Contract Tenure 15 years Engine Manufacturer RollsRoyce Engine Type Reciprocating Engine No. of Unit 8 O&M Contractor Baraka Power Ltd. Auditor Malek Siddiqui Wali & Co. On 31 July 2011, Baraka Patenga Power Limited, a 51% subsidiary company of Baraka Power Limited, signed a Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) to generate and supply of electricity of 50MW located at Patenga, Chittagong on BuiltOwnOperate (BOO) basis for a term of 15 years. The Company transports HFO from the storage facility at Chittagong Port area at a distance of approximately 34 km from the power plant. From there, the fuel is transported by road to plant rage facility by Tank Lorry each having capacity of 15,000 litters. The plant installed a waste heat recovery steam turbine unit to generate additional electricity by using the waste heat from the stack and the final temperature of the exhaust stack could be reduced float 315 C to 174 C. In addition, there is a flue gas desulfurization (FGD) lent to reduce the sulphur content from the exhaust. The Plant is located at Patenga, Chittagong on 3 acres own land. The registered office is at Khairun Bhaban(6 th Floor), Mirboxtola, Sylhet REDHERRING PROSPECTUS

319 REDHERRING PROSPECTUS Operation Management Product Financials Baraka Patenga Power Ltd. operates a 50 MW power plant on BuildOwnOperate (BOO) basis with BPDB (signed on 31July 2011) for a term of 15 years. Baraka Patenga Power receives HFO supply from Singapore. Commercial operation started on4may 2014 for a term of 15 year. Loan Projection The Company has Operation and Maintenance Agreement with its Parent Company Baraka Power Ltd. The Parent Company is responsible for the following support to the Company. Operations Management including Technical Manpower Maintenance Management including Technical Manpower Commercial and Logistics Management including Technical Manpower Finance and Accounting Management including Technical Manpower Administration and Human Resources Management and Technical Manpower Environment and Safety Management including Technical Manpower Provide the requested support by dedicating and deploying its manpower as per the requirement Any other support as per requirement 317

320 Operation Management Loan Product Financials Projection Electricity is a key component for the development of socioeconomic state of the country and current government initiatives toward the power sectors promise modest progress despite huge supplydemand gap and limited capacity utilization. As the power sector is a capitalintensive industry, huge investments are required in order to generate addition to the capacity. Moreover, contending demands on the government funds and declining levels of external support from multilateral and bilateral donor agencies constrained the potential for public investment in the power sector. Recognizing these situations, the GOB amended its industrial policies to enable private investment in the power sector. Currently, at about kwh per capita Electricity consumption 1, Bangladesh ranks among the lowest countries in the world in terms of electricity consumption per capita. Its distribution networks currently serve only an estimated 47 2 of the total population of more than 160 million. Public and private sector produces about 54% and 46% of electricity respectively 3. Public sector produces electricity through Bangladesh Power Development Board (BPDB), Ashuganj Power Station Company LTD (APSCL) and Electricity Generation Company of Bangladesh (EGCB). On the other hand, private sector produces power through small independent power producers and rental plants that government buys at a constant price. BPDB individually produces around 50% of the total production. Gas will remain the dominant source of energy for electricity generation in Bangladesh for much of the foreseeable future. However, If Bangladesh is to stop the acute gas shortages from crimping economic growth, the country will have to cut its over reliance on gasfired capacity and diversify the energy mix. The government has outlined plans to ensure coal accounts for 50% of the energy mix by , but we remain unconvinced that such plans will come to fruition local opposition to the exploitation of Bangladesh s huge coal reserves has so far stymied the development of a domestic industry. The government s efforts to draw foreign investors into the country appear to have been gaining traction over the past year. In June 2015, Indiabased Reliance Power secured a USD1.56bn contract from Bangladesh Power Development Board (BPDB) to set up a 3GW combinedcycle power project in Bangladesh. In September 2014, the BPDB signed a MoU with Malaysian stateowned companies Tenaga Nasional and Powertek, to assess the joint development of a 1,320MW coalfired plant in Maheshkali.In addition to the overall demandsupply imbalance, the power sector in Bangladesh is also affected by a regional imbalance. Additionally, dependence over natural gas for generating electricity (as around 75%76% of total electricity generation capacity is based on natural gas) affects local extraction capacity of gas from gas field and on the other hand import of capital machineries and subsidy of HFO and other petroleum based fuels impact on the foreign exchange reserve of the country. Power and Energy Sector Development Roadmap ( ) by the GOB envisaged target to produce 8,500 MW by 2013, 11,500 MW by 2015 and 20,000 MW by However, to ensure overall and balanced development of this sector, the GOB has undertaken various plans including balanced development in generation, transmission and the distribution system to achieve a desired level of reliability of supply. According to the shortterm plan, liquid fuel based 1224 months of implementable power stations will be established. However, government has initiated to implement a power station with a capacity of 920 MW. Under the Midterm ( )plan, government has taken into account to establish 3 to 5 years of implementable coalbased power stations with a capacity of 2,600 MW to the total capacity of 7,714 MW. And as of the Power and Energy Development Roadmap ( ), the GOB predicts to meet 20,000 MW by the year 2021 through the increment of 10% production per year towards reaching the per capita consumption to 600 Kw. However, actual execution of the long term plan is subject to effective measures taken against corruption in administration, high system losses, delays in completion of new plants, low plant efficiencies, erratic power supply, electricity theft, blackouts, and shortages of funds for power plant maintenance as well as political stability, stability and reconstruction of quick rental policy and government decision under separate regime Source: Source: Source: REDHERRING PROSPECTUS

321 REDHERRING PROSPECTUS Operation Management Loan Product Financials Projection The overall management of the Company is vested with its Board of Directors, who formulates the policies and strategies for the business. Moreover, the Managing director is the Chief Executive to direct and supervise the overall functions and day to day operational performance of the Company with the support from the Board in operational matters. The sponsors are directly involved with the Company management. Shareholder Designation Shareholding Baraka Power Ltd % Faisal Ahmed Chowdhury Chairman 3.00% Gulam Rabbani Chowdhury Managing Director 3.00% Fahim Ahmed Chowdhury Director and Head of Admin 0.86% Md.Shirajul Islam Director 1.06% Monzur Kadir Shafi Deputy Managing Director and Head of Finance 1.59% Afzal Rashid Chowdhury Director 1.06% Touhidul Islam Independent Director 0.85% Jalal Ahmed Choudhury Independent Director Faisal Ahmed Chowdhury is the Chairman of BarakaPatengaPower Ltd., holds 3.% shares. Under his direction, he also initiated other power projects credited to the group. Mr. Ahmed is also Executive Member of Foreign Investors Chamber of Commerce and Industry for the year Gulam Rabbani Chowdhury is the Managing Director of the Company who also holds 3.0% shares of the Company. Mr. Chowdhury has long and diversified experiences in machine manufacturing, real estate, power, education and RMG sector.a professional and experience team work under his leadership. The paidup capital of the Company is BDT million. Baraka Power Limited holds around 51% sharesand board of directors and other shareholders combinedly hold 49% shares. The Sponsors is looking forward more power plant projects to expand the portfolio. Accordingly, Karnaphuli Power Limited, being a 51% subsidiary of BPPL, has signed the Power Purchase Agreement (PPA) with Bangladesh Power Development Board (BPDB) on February 4, 2018 and has also signed the Implementation Agreement (IA) with the Government of Bangladesh (GOB) represented by the Ministry of Power, Energy and Mineral Resources on the same day. The PPA is signed in connection to the issued Letter of Intent (LOI) to the Company vide memo dated August 8, 2017 of BPDB for implementing HFO fired IPP power plant having capacity of 110 MW on Build, Own, Operate (BOO) basis at Shikalbaha, Chittagong for a term of 15 years from the commercial operation date (COD). And alsobangladesh Power Development Board (BPDB) has issued Letter of Intent (LOI) to Baraka Patenga Power Limited and its consortium vide their memo no dated for implementing HFO fired IPP power plant having capacity of 105 MW on BOO (Build, Own, Operate) basis at Shikalbaha, Chittagong for term of 15 years from the commercial operation date (COD). The required COD of the new plant is 9 months from the date of LOI. Accordingly, BPPL formed a new Subsidiary Company namely Baraka Shikalbaha Power Limited with 51% shareholding under which the aforesaid 105MW power plant will be executed. In addition, the Sponsors already completed the acquisition process of a 100% export oriented compliantly running ReadyMadeGarments factory having 10line (woven tops) production capacity named Bela Fashions Limited. 319

322 Operation Management Loan Product Financials Projection The revenue of the Company is composed of three components. Capacity Payment, Energy Payment and Fuel Price. Capacity payment is directly related to the Dependable Capacity of the power plant. Fuel price covers 75% of total revenue. During the latest year, the power plant ran on 50.0 MW dependable capacity. Plant factor dropped to 63% in 2017 which was around 66% in year ago. However, hike of energy price did not affect the total revenue. Energy sales of Baraka Patenga Power Ltd. depend on the actual demand posted by BPDB. In 2017, total sales of the Company was BDT 2,648.4 million registering 25.0% fall compare to previous year. However, the Company saw slight deteriorationin controlling cost of sales. However, it experienced efficiency in operating expense, which resulted stable profitability. Net Operating Profit was BDT million which was BDT million one year back. The Company saw improvement in financial expense. Net Profit slightly increased to BDT million in Net Profit Margin was 12.0% which was 13.5% in Total asset of the Company was 5,277.2 million comprised of 73.0% Noncurrent Asset and 27.0% Current Asset. Property, Plant and Equipment was valued BDT 3,850.8 million (73.0% of total asset). As of Balance Sheet date Shareholders Equity was BDT 1,700.8 million comprised of 58% Share Capital. Total Funded Borrowed Fund Limit came down to BDT 4,693.8 million. The Company observed moderate leverage. Borrowed Fund to Equity was 1.6 X. The Company observed moderate operating cycle. The Cash conversion cycle was 151 Days in 2017; which was derived from: Inventory (fuel and spares) Conversion Period : 107 Days Receivable (BPDB) Collection Period : 104 Days Payable (HFO) Deferral Period: 60 Days Moderate cash conversion cycle resulted BDT million Cash Flow From Operation, which was 21.2%ofsales. The Company was found strong coverage position in Debt Service Coverage Ratio and Times Interest Earned Ratio were 1.3 X and 2.2 X respectively. 320 REDHERRING PROSPECTUS

323 REDHERRING PROSPECTUS Operation Management Loan Product Financials Projection Baraka Patenga Power Ltd. has banking relationship with United Commercial Bank, Trust Bank, BRAC Bank and IPDC Bangladesh. As of 26 December 2017, Longterm Outstanding was BDT 2,793.8 million, which was BDT 3,102.5 milliononeyear back(10% fall). It has also nonfunded limit of BDT 1,900.0 million for HFO importing. As per banker s feedback, the loan payment behaviour was satisfactory. It did not experience any overdue or classification in last one year. Loan details are annexed. [End of the Report] 321

324 Appendix 1: Bank loan facilities of Baraka Patenga Power Ltd.(26 December 2017) Bank Facility Term Type Fund Type Sanctioned Outstanding Expiry United Commercial Bank Term Loan Longterm Funded 1, , Oct25 United Commercial Bank Term Loan Longterm Funded Sep23 United Commercial Bank Term Loan Longterm Funded Sep23 Trust Bank Term Loan Longterm Funded Oct25 Trust Bank Term Loan Longterm Funded Sep23 Trust Bank Term Loan Longterm Funded Sep23 Prime Finance & Investment Lease Finance Longterm Funded Feb18 BRAC Bank Term Loan Longterm Funded Mar21 Trust Bank Letter of Credit Shortterm Nonfunded Jun18 United Commercial Bank Bank Guarantee Shortterm Nonfunded Open Ended United Commercial Bank Letter of Credit Shortterm Nonfunded 1, May18 Note: Amount in BDT Million Bank Inner Facility Inner Limit Outstanding Expiry United Commercial Bank Time Loan 1, Jun18 Trust Bank Time Loan Sep18 RATIO ANALYSIS Major Financial Sales 2, , ,021.6 Net Profit Total Asset 5, , ,545.8 Cash Flow From Operation N/A Shareholders Equity 1, , ,289.6 Borrowed Funded Loan Limit 2, , Borrowed Fund Limit 4, , Liquidity & Cash Current Ratio 1.4 X 1.5 X 1.1 X Quick Ratio 0.8 X 0.9 X 0.6 X Net Working Capital to Asset 7.9% 7.5% 2.0% Fund From Operation to Borrowed Fund 16.6% 13.6% N/A Cash Flow From Operation to Borrowed Fund 20.1% 20.6% N/A Cash Flow From Operation to Sales 21.2% 30.8% N/A Operating & Profitability Inventory Conversion Period 107 Days 118 Days 86 Days Receivable Collection Period 104 Days 110 Days 92 Days Payable Deferral Period 60 Days 1 Days 1 Days Cash Conversion Cycle 151 Days 226 Days 177 Days Fixed Asset Turnover 0.7 X 0.5 X 0.7 X Gross Profit Margin 24.3% 30.0% 19.6% 322 REDHERRING PROSPECTUS

325 REDHERRING PROSPECTUS EBIT Margin 21.7% 26.7% 17.0% EBITDA Margin 27.2% 33.5% 21.0% Pretax Profit Margin 12.0% 13.6% 9.8% Net Profit Margin 12.0% 13.5% 9.7% Return on Equity 18.7% 19.3% 22.8% Return on Capital Employed 6.9% 6.1% 6.5% Leverage & Coverage Borrowed Fund to Asset 0.5 X 0.6 X 0.0 X Borrowed Fund to Equity 1.6 X 2.1 X 0.0 X Sales to Borrowed Fund 8.7 X 25.2 X N/A Debt Service Coverage Ratio 1.3 X 2.9 X N/A Times Interest Earned Ratio 2.2 X 2.4 X N/A Note: Amount in BDT Million 323

326 CRAB RATING SCALES AND DEFINITIONS Long Term (Corporate) RATINGS AAA Triple A AA 1, AA 2, AA 3 * Double A A 1, A 2, A 3 Single A BBB 1, BBB 2, BBB 3 Triple B BB 1, BB 2, BB 3 Double B B 1, B 2, B 3 Single B CCC 1, CCC 2, CCC 3 Triple C CC Double C C Single C D (Default) DEFINITION Companies rated in this category have extremely strong capacity to meet financial commitments. These companies are judged to be of the highest quality, with minimal credit risk. Companies rated in this category have very strong capacity to meet financial commitments. These companies are judged to be of very high quality, subject to very low credit risk. Companies rated in this category have strong capacity to meet financial commitments, but are susceptible to the adverse effects of changes in circumstances and economic conditions. These companies are judged to be of high quality, subject to low credit risk. Companies rated in this category have adequate capacity to meet financial commitments but more susceptible to adverse economic conditions or changing circumstances. These companies are subject to moderate credit risk. Such companies possess certain speculative characteristics. Companies rated in this category have inadequate capacity to meet financial commitments. Have major ongoing uncertainties and exposure to adverse business, financial, or economic conditions. These companies have speculative elements, subject to substantial credit risk. Companies rated in this category have weak capacity to meet financial commitments. These companies have speculative elements, subject to high credit risk. Companies rated in this category have very weak capacity to meet financial obligations. These companies have very weak standing and are subject to very high credit risk. Companies rated in this category have extremely weak capacity to meet financial obligations. These companies are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. Companies rated in this category are highly vulnerable to nonpayment, have payment arrearages allowed by the terms of the documents, or subject of bankruptcy petition, but have not experienced a payment default. Payments may have been suspended in accordance with the instrument s terms. These companies are typically in default, with little prospect for recovery of principal or interest. D rating will also be used upon the filing of a bankruptcy petition or similar action if payments on an obligation are jeopardized. *Note: CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a midrange ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. LONGTERM RATING: LOANS/FACILITIES FROM BANKS/FIS (All loans/facilities with original maturity exceeding one year) RATINGS AAA (Lr) (Triple A) Highest Safety AA (Lr)* (Double A) High Safety A (Lr) Adequate Safety BBB (Lr) (Triple B) Moderate Safety BB (Lr) (Double B) Inadequate Safety B (Lr) High Risk CCC (Lr) Very High Risk CC (Lr) Extremely High Risk C (Lr) Near to Default D (Lr) Default DEFINITION Loans/facilities rated AAA (Lr) are judged to offer the highest degree of safety, with regard to timely payment of financial obligations. Any adverse changes in circumstances are unlikely to affect the payments on the loan facility. Loans/facilities rated AA (Lr) are judged to offer a high degree of safety, with regard to timely payment of financial obligations. They differ only marginally in safety from AAA (Lr) rated facilities. Loan/facilities rated A (Lr) are judged to offer an adequate degree of safety, with regard to timely payment of financial obligations. However, changes in circumstances can adversely affect such issues more than those in the higher rating categories. Loans/facilities rated BBB (Lr) are judged to offer moderate safety, with regard to timely payment of financial obligations for the present; however, changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal than for issues in higher rating categories. Loans/facilities rated BB (Lr) are judged to carry inadequate safety, with regard to timely payment of financial obligations; they are less likely to default in the immediate future than instruments in lower rating categories, but an adverse change in circumstances could lead to inadequate capacity to make payment on financial obligations. Loans/facilities rated B (Lr) are judged to have high risk of default; while currently financial obligations are met, adverse business or economic conditions would lead to lack of ability or willingness to pay interest or principal. Loans/facilities rated CCC (Lr) are judged to have factors present that make them very highly vulnerable to default; timely payment of financial obligations is possible only if favorable circumstances continue. Loans/facilities rated CC (Lr) are judged to be extremely vulnerable to default; timely payment of financial obligations is possible only through external support. Loans/facilities rated C (Lr) are currently highly vulnerable to nonpayment, having obligations with payment arrearages allowed by the terms of the documents, or obligations that are subject of a bankruptcy petition or similar action but have not experienced a payment default. C is typically in default, with little prospect for recovery of principal or interest. C (Lr) are typically in default, with little prospect for recovery of principal or interest. Loans/facilities rated D (Lr) are in default or are expected to default on scheduled payment dates. *Note: CRAB appends numerical modifiers 1, 2, and 3 to each generic rating classification from AA through CCC. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a midrange ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. 324 REDHERRING PROSPECTUS

327 REDHERRING PROSPECTUS SHORTTERM CREDIT RATING: LOANS/FACILITIES OF BANKS/FIS (All loans/facilities with original maturity within one year) RATINGS ST1 Highest Grade ST2 High Grade ST3 Adequate Grade ST4 Marginal ST5 Inadequate Grade ST6 Lowest Grade DEFINITION This rating indicates that the degree of safety regarding timely payment on the loans/facilities is very strong. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is strong; however, the relative degree of safety is lower than that for issues rated higher. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is adequate; however, the issues are more vulnerable to the adverse effects of changing circumstances than issues rated in the two higher categories. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is marginal; and the issues are quite vulnerable to the adverse effects of changing circumstances. This rating indicates that the degree of safety regarding timely payment on the loans/facilities is minimal, and it is likely to be adversely affected by shortterm adversity or less favorable conditions. This rating indicates that the loans/facilities are expected to be in default on maturity or is in default. Copyright 2018, CREDIT RATING AGENCY OF BANGLADESH LIMITED ( CRAB ). All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFOR MATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT CRAB S PRIOR WRITTEN CONSENT. All information contained herein is obtained by CRAB from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided as is without warranty of any kind and CRAB, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall CRAB have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of CRAB or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if CRAB is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY CRAB IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling. 325

328 Notes 326 REDHERRING PROSPECTUS

329 REDHERRING PROSPECTUS Notes 327

330 Notes 328 REDHERRING PROSPECTUS

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