NAVANA REAL ESTATE LIMITED

Transcription

1 NAVANA REAL ESTATE LIMITED INFORMATION MEMORANDUM FOR ROAD SHOW FOR INITIAL PUBLIC OFFERING (IPO) OF 3,00,00,000 (THREE CRORE) ORDINARY SHARES OF TK 10 (TEN) EACH AT AN INDICATIVE PRICE OF TK [*]/- INCLUDING A PREMIUM OF TK. [*]/- TOTALLING TK. [*] UNDER BOOK BUILDING METHOD Credit Rating at AA3 by Credit Rating Agency of Bangladesh ISSUER COMPANY NAVANA REAL ESTATE LIMITED 125/A, Motijheel C/A, Dhaka Phone: , Fax: Website: www. navana-realestate.com MANAGER TO THE ISSUE ICB CAPITAL MANAGEMENT LIMITED ( A S U B S I D I A R Y O F I C B ) BDBL Bhaban (Level-16), 8, DIT Avenue, Dhaka Phone: , Fax: Website: www. icbcml.com.bd REGISTRAR TO THE ISSUE LANKABANGLA FINANCE LIMITED Safura Tower (Level-11), 20 Kemal Ataturk Avenue, Banani, Dhaka Phone: , Fax: Website:

2 General Information ICB Capital Management Limited, the Issue Manager, has prepared this Information Memorandum ( IM ) based on the information provided by Navana Real Estate Limited (the Company/the Issuer) and also upon several discussions with the Chief Executive Officer and concerned executives of the issuer company. The s, including Chief Executive Officer of Navana Real Estate Limited and ICB Capital Management Limited collectively and individually, having made all reasonable inquires, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material aspects and that there are no other material facts, the omission of which would make any statement herein misleading. No person is authorized to give any information or to make any representation not contained in this prospectus, and if given or made, any such information or representation must not be relied upon as having been authorized by the Issuer or Issue Manager. The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive jurisdiction of the courts of Bangladesh. Forwarding this prospectus to any person resident outside Bangladesh in no way implies that the Issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country. Page- 2

3 Risk Factors Interest Rate Risk Interest rate risk is borne by interest bearing assets of an organization. Changes in the Government s monetary policy along with increased demand for loans/investments tend to raise interest rates. Such rises in interest rates mostly affect companies having floating rate loans or companies investing in long term debt securities. In the event of monetary policy tightening by the Government to combat increased economic growth and inflation, the company will require a prudent strategy to take the firm from incurring negative net cash flow from operations. Management Perception: The management of NREL is aware of the interest rates at which the debts of the company are being financed. Management intends to finance long-term funds using fixed interest rate debt and finances short-term funds at reasonable competitive rates. The company has been repaying borrowed funds on a continuous basis to reduce such interest risk. The recent trend shows that, NREL funded ongoing projects by advance against sales. Besides that, management also utilizes retained earnings and bank loan to finance projects. Input Cost Risks Input cost risk is the risk of businesses when procuring materials or commodities in high global demand. Increasing demand and supply shortages create volatility in these commodity values therefore the timing, quantity and price of purchase must be closely planned. Input costs, such as MS rod and cement, represent material direct costs in the industry. Management Perception: Management of NREL would hedge their exposure to input price volatility by purchases of such inputs at right price at the right time; and by charging for contingency against such inputs in selling prices. Industry Risks Real Estate business, especially apartment projects started to flourish and showed robust growth in the Dhaka City from the early 1980s. At present, more than 250 real estate and land development companies are operating their business. Demands of flats and land are high and thereof most of the developers of housing estate are concentrating in this segment of business and make a competitive market. Management Perception: Based on the number and size of projects besides Brand strength in marketplace and upcoming project portfolio, NREL has a strong position that is the key for success in real estate sector. The Company has established brand name in real estate market with its asset quality and customer services. Diversification in terms of location within Dhaka and Chittagong will assist them to capture different income groups. Therefore, the Company targets prime locations as well as locations that will be affordable by middle class income group people. Market Risks Market risk refers to the risk of adverse market conditions affecting the sales and profitability of the company. Mostly, the risk arises from falling demand which would affect the performance of the company. Page- 3

4 Management Perception: Management is fully aware of this market risk; and has planned to act accordingly. On the other hand, strong marketing and brand management would help the company increase their customer base. Potential or Existing Government Regulations The Company operates under the Companies Act, 1994, Real Estate Development and Management Act, 2010; Dhaka Metropolitan Construction Rules, 2006; Income Tax Ordinance 1984, Customs Act, 1969, Value Added Tax (VAT) Act 1991 and rules, regulations and notifications made under these laws. Any abrupt changes of the policies made by the regulatory authorities may adversely affect the business of the Company. NREL operates in a highly regulated market with registration, plan approvals and inspections required by RAJUK periodically. Management Perception: NREL is the one of the leading real estate developers of the country. This company is doing business following all laws, rules and regulations. Changes in regulatory framework will bring changed strategies of doing business by the dynamic management of the Company. Potential changes in global or national policies Political instability and the associated deterioration of law and order stand in the way of timely implementation of the projects. Management Perception Management is optimistic about growth opportunities in Bangladesh. They believe they target an untapped market of customers who are seeking quality service, reliability and timeliness with their management team. Operational risk The real estate industry has witnessed challenges such as earthquakes and floods. It stands as one of the most challenging industries to operate in to date. Management Perception Fortunately, the local industry does not have such a troubled backdrop and has immense opportunities for growth. FINANCIAL STRUCTURE OF THE COMPANY The Financial Structure of the Company is as follows: Particulars Page- 4 No of Shares Face Value (Taka) Amount in Taka Before IPO: Authorized Capital 1,000,000 1,000 1,000,000,000 Paid up capital as on 31 August, ,000 1, ,000,000 Paid up capital as on 30 September, ,000, ,000,000 Total paid up capital before IPO 30,000, ,000,000 After IPO: To be issued as IPO 30,000, ,000,000 Paid up capital (Post IPO) 60,000, ,000,000

5 * Board of s had decided to denominate the share price from Tk to Tk on 12 th August 2010 which has been approved by the shareholder of the Company in their Extra Ordinary General Meeting dated 8 th September Capital Structure Particulars as at 31 August 2010 as at 31 August 2009 Shareholders Equity: Share Capital 300,000,000 51,000,000 Retained Earnings 881,924, ,218,519 Total 1,181,924, ,218,519 Debts: Long-term loan 457,557, ,771,249 Short-term loan 1,483,279, ,801,968 Total 1,940,837,438 1,487,573,217 Use of proceeds The Company is planning to raise about Tk crore from the capital market through IPO. The IPO proceeds will be utilized in the following manner: Sl. No. Usage of Proceeds Amount (Taka) 1 Repayment of Loans 2,000,000,000 2 Acquisition of Investment Properties 750,000,000 3 Balance as Working Capital 1,450,000,000 Total 4,200,000, Repayment of Loans of Tk crore NREL will repay the entire loans from banks and financial institutions aggregating around Tk 200 crore out of its IPO proceeds immediately upon completion of IPO formalities subject to the approval of Securities & Exchange Commission. This will improve NREL s profitability, making it debt-free. The details of Loan taken from Financial Institution are stated below (as per Audited Accounts): Sl. No. Financial Institution Loan amount (In Taka) 1.00 Long-term borrowings: 1.01 City Bank Ltd. 83,912, Delta Brac Housing Ltd. 30,638, Dhaka Bank Ltd. 50,000, Pubali Bank Ltd. 5,838, Southeast Bank Ltd. 175,900, United Commercial Bank Ltd. 136,571, Lease finance: 2.01 Dhaka Bank Ltd. 13,557, Dutch Bangla Bank Ltd. 1,604, EXIM Bank Ltd. 91,070, Standard Bank Ltd. 9,165, Short-term loan: 3.01 Al-Arafah Islami Bank Ltd. 53,807, Bank Alfalah Ltd. 49,600, Bank Asia, Pr. 215,000, EXIM Bank Ltd. 71,971,667 Page- 5

6 3.05 IFIC Bank Ltd. 140,626, NCC Bank Ltd. 154,490, National Bank Ltd. 77,439, One Bank Ltd. 150,000, Pubali Bank Ltd. 133,827, Social Islami Bank Ltd. 100,610, Southeast Bank Ltd. 20,000, Standard Bank Ltd. Pr. Br. 175,202,524 Total 1,940,837,437 The Loan amount would be paid which incurred after August 31, 2010: 1. Dhaka Bank Ltd. 50,000, Pubali Bank Ltd. 9,162,563 Total 59,162, Acquisition of investment properties A part of the IPO proceeds at Tk crore shall be utilized by NREL to acquire land and construct it s Head Office in Road no. 9/A (new), Dhanmondi, Dhaka. This will improve its capacity, reduce its expenses and improve its profitability. For this purpose a land measuring decimal (12 katha) at Plot no. 231/A (Old), 35 (New), Road no. 18 (old), 9/A (new), Dhanmondi R/A, Dhaka has been acquired on to construct the NREL Head Office. Implementation Schedule Date of Baina Nama: 04/01/2010 Date of Registration: 31/10/2010 Expected date of plan pass from RAJUK: 30/04/2011 Expected date of construction to be started: 01/05/2011 Duration of the construction period: 36 months Expected date of completion: 30/09/ Balance as Working Capital of Tk crore The balance IPO proceeds of Tk crore shall be used for meeting the costs of IPO and NREL s day to day operations as working capital. Navana Real Estate Limited: An Overview Company Profile Navana Real Estate Ltd (NREL), a part of Navana Group, started its operation in 1996 as a private limited company & converted as a Public Limited on 8 th September, Since its inception, NREL has completed and handed over a good number of projects in diversified areas in Dhaka where it is capturing the market for high and middle-income people. Of late, NREL has also started its operation in different areas of Chittagong. Considering the future expansion of Dhaka City and related demand hike for housing, NREL has extended its area of operation into land development projects, handing over one land project in Kallyanpur and two projects at Ashulia. Ongoing land projects include two projects at Narayangonj and Ashulia. Page- 6

7 NREL within a short span of time turned out as one of the most trusted company in Real Estate sector and has been working in various numbers of apartments, commercial and land projects. The motto of NREL is not only to deliver apartment or land ahead of schedule but also to maintain the highest-grade construction quality that has gained trust and respect in customers. Further NREL is pursuing the motto of becoming different, dependable and definitive. Nature of Business The Company is engaged in purchasing land & developing the same for urban housing and selling to the people of different income group. The company also purchases high land for construction of multi-storied Apartment building, Shopping and Office spaces. Principal Products/Services Principal products are Apartment and Commercial spaces approximately cover more than 90% of total revenue. We have also Housing project which will flourish significantly in near future. Name of products/services The company produces different type of Apartment and commercial spaces in different location of Dhaka and Chittagong city categorized like as Diamond, Gold, Silver and pearl. Projects Overview: NREL s Apartment Portfolio status Project Status Number of projects in Total No. of Projects Square feet of built-up area Square feet of saleable area Handed Over Projects ,12,791 14,10,704 Ongoing Projects ,43,020 20,37,902 Upcoming Projects ,54,524 Handed Over Projects: During the accounting year , NREL handed over total 17 projects to their client located at different areas like Gulshan, Banani, Dhanmondi, New DOHS, Dhanmondi, Niketan, and Uttara. As a result, from incorporation, total handed over projects of the Company reached 59. Average time needed to complete and hand over a project since inception is 2 to 3 years. NREL had no significant delay in projects handover to customers except some isolated events. Name & Description of the Handover Project: Name of Apartment projects: Location Handover Name of Apartment projects: Location Handover Bailey Star Baily Road July-2009 Dianthus Uttara March-2009 Chateau De Husains Gulshan March-2010 Gloria Niketon Nov-2007 Southern Wood Dhanmondi Jan-2010 Paradise Uttara March-2006 Lake Shiri Garden Uttara August-2009 Raza Niloy Mirpur June-2007 Villa Gulshan July-2001 Sea Jewel (Sagor) Uttara July-2010 Suriya Imdad Garden Central Road July-2009 Carmem Skylana Uttara March-2009 Tower Gulshan April-2004 Pride Uttara July-2004 Kabir Garden Dhanmondi Jan-2006 Lake View Niketon April-2005 Verdancy Eskaton Aug-2007 Cottage Banani July-2004 Veneziane Dhanmondi Jan-2008 Sapphire Monami Banani Aug-2008 Garden Kallyanpur April-2009 Condominium Segun Bagicha June-2006 Sardinia Banani May-2010 Myriad Niketon April-2010 Page- 7

8 Homes Banani Feb-2001 Ville Akbar Mohakhali April-2010 La Fontana Niketon Nov-2008 Shefali Gulshan July-2006 Grosvenor Residence Gulshan March-2010 Banu Garden Mogbazar August-2006 Wood Sorrel Baridhara March-2010 Ecstasy Dhanmondi Nov-2005 Rangalia Banani Feb-2010 Timit Bashundhara August-2009 Motin Verbena Green Road Mar-2008 Vartex Wari Oct-2008 Laurestine Baridhara Sep-2009 Park Uttara Jan-2007 Cordelia Banani Jan-2010 Glory Mohammadpur July-2006 Karar's Islet New DOHS June-2010 Bliss Elephant Rd May-2005 Cosmos Hatkhola Feb-2007 Saffron DOHS Baridhara June-2010 Kinevart Bashundhara June-2010 Oleander Uttara July-2008 Sandriana Niketon March-2009 Rafia Diapensia Segun Bagicha July-2010 Bilkis Laurent Gulshan Nov-2009 Summer Hill Uttara Feb-2009 Pearl Uttara Sep-2006 Delphinium Mohammadpur Nov-2008 Orchid Gulshan Sep-2005 Villa Marvella New DOHS July-2010 Le Caprice Banani Jan-2010 Shamim Beaumont Banani June-2010 Venus Sukrabad June-2006 Sky View Niketon Sep-2005 Mirabad Navana Mirabad Aug-2008 Ongoing Projects: These projects are geographically concentrated in the northern part of Dhaka like Uttara, Bashundhara, Baridhara, Gulshan, Banani, DOHS etc. Besides that, areas like Segunbagicha, Hatkhola, Kamalapur, Kalabagan, Wari, Purana Poltan, Mohammadpur, Lalmatia, Kakrail, Eskaton, Bashabo etc. also included. As per the acquisition agreements, NREL will have to hand over 33% to 60% of total built area to the landowner and will retain residual to NREL for sales. Name & Description of the ongoing Project Name Location Present status: % of completion as per audited accounts Possible year of handover Apartment projects: Alpenrose Segunbagicha 90% 2011 Ashir Animone Hatkhola 24% 2012 Aspodal Kamlapur 65% 2011 Ayesha Angelique Uttara 27% 2013 Aziza Serenity Banani 33% 2012 Beaufort Baridhara 24% 2013 Blue Cascade Bashundhara 21% 2012 Carnival Kalabagan 10% 2012 Casa Grande Gulshan 46% 2012 Celestial Wari 48% 2013 Circular Height Razarbagh 23% 2013 Darus Salam Uttara 27% 2012 DH Tower Panthapath 16% 2013 Diamonte Dhanmondi 52% 2011 Ellsworth Banani 35% 2012 Ferdous Fairfield Bashundhara 41% 2012 Feroza Wilhelm Gulshan 57% 2011 Fima Paradiso Bakshibazar 78% 2011 Hermitage Hatkhola 51% 2011 Kanak's Redulent Uttara 27% 2012 Karotowa Baridhara 22% 2013 Kazi Richmond Bara Moghbazar 61% 2011 Khalil Gravillea Bashundhara 36% 2011 Li Sianthus Banani 34% 2012 Lilium Memories Baridhara 14% 2013 Page- 8

9 Mandale Niketon 28% 2012 Manor Park Uttara 24% 2012 Mid Summer Dream Gulshan 38% 2012 Miru Arimidale Gulshan 29% 2013 Mojibunnessa De Lake Banani 39% 2011 Mukhles Monarch Purana Paltan 41% 2011 Neer Uttara 27% 2012 New Buri Place Subhanbagh 21% 2013 Platinum Residence Gulshan 66% 2011 Rabeya Easdale Mohammadpur 42% 2012 Rahim Ardent Kakrail 55% 2011 Rainbow Terrace Uttara 42% 2013 Rebecca Teodora Uttara 62% 2011 Roosevelt DOHS Baridhara 91% 2011 Saptabarna Lalmatia 72% 2011 Sattar Garden Eskaton 4% 2013 Shahria Rowshan Lalmatia 22% 2012 Shams Anjum Bijoy Nagar 23% 2012 Shaz Sylvan Baridhara 27% 2013 Siddique Sorrento West Dhanmondi 63% 2011 Sikder Wind Flower Bashundhara 30% 2012 Silver Dale Bashaboo 44% 2012 Siraj Lake Aster Dhanmondi 72% 2011 Somerset Shantinagar 39% 2011 South Wind Banani 39% 2011 Splendour Banani 28% 2012 Summer Wind Baridhara 52% 2011 Sylvania Nodda 5% 2013 Usha Sylvestris Gulshan 58% 2011 Water Edge Dhanmondi 63% 2011 Zohra Square Banlamotor 13% 2013 Ahmad Carnation Dorgahat, Ctg 22% 2013 Centifolio CDA R/A, Ctg 36% 2011 Devine Halishohor, Ctg 33% 2011 Faizan Height Mehedibag, Ctg 14% 2012 Florenza Abedin Colony, Ctg. 17% 2012 Jalal Palace Mehedibag, Ctg 7% 2013 Madani Tower Mehedibag, Ctg 4% 2013 Meherun Villa Nizam Rd, Ctg 10% 2012 Motaleb Grandure Nizam Rd, Ctg 31% 2012 Reza Ornilla Khulsi, Ctg 98% 2011 Weakinings Mehedibag, Ctg 12% 2012 Land projects: Kallayanpur Land Project Kallayanpur, Dhaka 100% 2011 Green Homes Land Project Ashulia, Savar, Dhaka 100% 2011 Village Land Project Ashulia, Savar, Dhaka 100% 2011 Valley Land Project Konabari, Gazipur 100% 2011 Bhuiyan City Land Project Siddirgonj, Narayangonj 100% 2012 Upcoming Projects: To start the upcoming projects as per pre-scheduled manner, NREL management has already acquired land in different areas. For 84 upcoming residential and commercial projects, the Company already paid Tk crore as development cost and upfront cash commitment. Future areas include Mirpur, Mohammadpur, Uttara, Banani, Gulshan, Baridhara, Kamalapur, Tejgaon etc where it is capturing the market for upper and upper middle-income class people. Page- 9

10 Name & Description of the Proposed Project: Apartment Projects: Name Location NREL's Ownership Ratio Progoti Bari Nirman Shomiti Plot at Mirpur # 11, Bl # F, Mouja # Senpara Parbata 65% Sirajgonj Chakrijibee Somobay Somity Plot -1/3, Block-D, Sec-15, Mirpur Housing. 65% Jamuna Bohumukhi Shamabay Somity Plot # 1/5, Block # D, Section # 15, Mirpur. 68% Uttaran Shomity Shamiti Plot # 1/4-A, Block # B, Rd. # 01, Sec # 15, Mirpur. 70% Plot #27, Rd. #6/A, Nobodhoy housing, Nobodoy Housing Mohammadpur. 55% HatirJheel Eskaton, Hatirjheel. 50% Unnamed P-272,275, R-8/A, West Dhanmondi % Unnamed Plot- 174, Block- B, Basundhara. 50% Unnamed Plot # 20, Garib E Newaz Avenue, Sec # 11, Uttara. 50% Unnamed Plot- 309, 325, 325/A, Baro-Mogbazar, Dhaka. 58% Unnamed Plot- 403, Block- A, Basundhara. 50% Unnamed Plot # 21, Road # 12, Sector # 1, Uttara. 50% Unnamed Plot # 52, Road # 7/C, Sec-9 Uttara. 50% Unnamed Plot # 32, Road # 18, Block J, Banani. 38% Unnamed Plot 52, Road 13, Sector-3, Uttara. 50% Unnamed Plot 95,Road 13, Block E, Banani. 50% Unnamed Plot # 18, Road # 5, Sector # 1, Uttara. 50% Unnamed Plot # 11, Monipuri Para. 47% Unnamed Plot # 17A & 18, Road # 3A & 4A, Sec # 05, Uttara. 50% Unnamed Plot # 13, Road # 128, Gulshan. 44% Unnamed Plot # 31/10, Block # D, Tajmahol Road. 50% Unnamed Plot # 277, Elephant Road, Dhaka. 50% Unnamed 1/15A, Iqbal Road, Mohammadpur, Dhaka. 50% Unnamed Plot # 16, 17 Darus Salam Road, Kallyanpur, Dhaka. 57% Unnamed Plot #4, Road# 2, Bl-K Baridhara, Dhaka. 40% Unnamed Plot- 35, Road- 06, Dhanmondi R/A. 42% Unnamed Plot- 06, Road-02, Bl-K, Baridhara. 40% Unnamed Plot # 2A, Gulshan North Avenue. 50% Wage Wood Plot # 24, Road # 65, Gulshan. 100% Unnamed Plot # 19, Road # 01, Baridhara. 40% Unnamed Plot # 10, Road # 12, Sec # 06, Uttara. 50% Unnamed Plot- 22 Road- 1 Block- K, Baridhara. 30% Unnamed Plot 4 Road -50 Block NWK, Gulshan. 40% Unnamed Plot- 30A, 32, 32A, Road # 08, Gulshan. 50% Unnamed 47 Lalchan Mokem Lane, Dholai Khal. 64% Candle Light Plot -275/K, Road-27 Dhanmondi R/A. 50% NAVANA HR TOWER Plot # ,Tejgaon I/A. 50% Unnamed Plot # 05, Sonargaon Janapath, Sec # 07, Uttara. 50% Unnamed Plot # 35 & 35/A, Siddeswari New Circular Road. 53% Unnamed Plot # 16, Mohakhali C/A. 50% Unnamed Plot # 23, Road # 07, Block # K, Baridhara. 38% Unnamed 64, Kakrail. 48% Unnamed 12 Katha, 42/A, Zigatola. 60% Unnamed 3 Nawab Abdul Gani Street, Wari, Dhaka. 50% Chayabithi P-34, B-Cen(H), R-115, Gulshan. 40% Islam Florentine P-14D, R-68, Gulshan 50% Unnamed P 10, B Cws R-33, Gulshan 45% Unnamed P 28/B, 29/A, Kakrail 50% Unnamed P 312 B-C, Bashundhara 50% Unnamed P 33,Segunbagicha. 50% Page- 10

11 Unnamed P 35, R-18,Bl-J, Banani 40% Unnamed P 65, Bijoynogor, Dhaka. 50% Unnamed P-07(New), 701(Old) R-13, Dhanmondi. 50% Unnamed P-24, R-4, B-C, Banani. 50% Pristine Pavilion Gulshan. 50% Sharif Oakdale P-28, R-99, B-Cen (D), Gulshan. 40% Unnamed Fuwang Club 205,Tejgaon I/A. 50% Unnamed P # 2, R # 8/A, Sector # 10, Uttara. 50% Unnamed P 444, Gulbagh Malibagh. 68% Unnamed P # 47, R- 3/F, Sector-09, Uttara. 50% Unnamed P 17A,& B Kabi Jasimuddin Road, Komlapur. 50% Villa Novera P-28, r-06, Sector-3, Uttara. 50% Edenton P- 11/3/A, Kabi Jashimuddin Road, Kamalapur. 60% G H Height P 767(Old). 67(New) Satmasjid Road Dhanmondi. 50% Hem Periwincle P # 419, B-A, Bashundhara. 50% Lucky Water Fort P 29, R-8, Gulshan. 50% Link P 214, Tejgaon I/A. 50% Rosedale P-100,B-D, R-10/2, Niketon, Gulshan. 40% Sobia P 12, Bakshibazar, Lalbagh. 50% Wisteria P-20&21, R-11, S- 9, Uttara. 50% Unnamed Khilkhat. 100% Regious Regious. 100% Unnamed P 1047 & 1287 Nizam Road Ctg. 51% Unnamed H # 2, R # 01, Khulshi 50% Navana Kaligonj Commercial Complex Kaligonj 100% Unnamed Plot # 33, Road # 30/24, Gulshan, Dhaka 50% Unnamed P-10A,B-Nw(K),R-50,Gulshan 40% Unnamed P-2/3, B-C, Lalmatia 50% Unnamed P-34, R-6, Dhanmondi 33% Land Projects: Name Location Area in NREL's Katha Ownership Ratio Kaligonj Land Kaligonj, Gazipur % Bhatara Land Badda, Dhaka % Barua Land Khilkhet, Dhaka % Dhogari Land Rajendrapur, Gazipur % * The area mentioned in the proposed project is under planning and it will be finalised upon approval Rajuk and other related Authority. Relative contribution of Products/Services contributing more than 10% of the total revenue The relative contribution to sales and income of each product that accounts for more than 10% of the Company s total revenue are mentioned below: Product For the year ended Aug 31, 2010 For the year ended Aug 31, 2009 Volume % Volume % Apartments 2,821,617,292 99% 1,651,866,356 99% Plot 22,195,000 1% 20,938,488 1% Total 2,843,812, % 1,672,804, % Page- 11

12 Associates, subsidiary/related holding Company & their core areas of business NREL belongs to Navana Group, one of the well reputed business conglomerates in Bangladesh. Navana Group emerged into a separate corporate entity from Islam Group after the death of its Chairman, Mr. Jahurul Islam, which was then the largest business group in Bangladesh. They comprise of a number of companies, have diversified their activities in various areas like product and project marketing, construction and real estate business, international trading, distributorship and production of various items and already attained significance in the business arena of Bangladesh. There is no associate, subsidiary or holding Company except the following sister companies: NREL s Sister Companies Company Navana Limited Aftab Automobiles Ltd. Navana Electronics Ltd Navana CNG Ltd Navana Logistics Ltd Biponon Ltd Navana Interlinks Ltd Navana Construction Ltd Navana Toyota Service Center Ltd. Navana Computer & Techno. Ltd. Navana Building Products Limited Navana Textiles Ltd. Navana Distributions Ltd. Navana Petroleum Ltd. Navana Taxi Cab Co. Ltd. Navana Power Co. Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Area of Operation Toyota, Hino, Good year Tire, forklift, Toyota 3S Centre. Automobile Assembling, Body Building IPS, UPS, Stabilizer, Generator manufacturing, marketing & sales. CNG conversion & refueling. Freight Forwarders & Shipping Agent Medical & Scientific equipment marketing & sales Generator, building solution & energy savings light unit Building and Road construction. Servicing of Motor Vehicles. Trading of ICT Products Production of Ready Mix Concrete & Other Building Products Readymade Garments Consumable Goods Producer & Distributor Trading of Petroleum Products Taxi cab service Power generation Renewable energy & solar system Automotive batteries manufacturing Home, office, hospital & Industrial furniture manufacturing Decorative paint manufacturing Distribution of products/services: A strong team of marketing & sales are engaged to cater the product though Daily news paper, web site, Direct mailing, REHAB fair, Personal contact, Project sign board, Bill board and through existing buyer. Page- 12

13 Competitive conditions in the business Competitive Condition There are more than 1500 Companies in Real Estate sector in Bangladesh. Among them 898 are the members of REHAB. The sector contributed 14% to the Gross Domestic Product (GDP) on the last fiscal year 09-10, & within a span of three decades, the turnover from this industry has reached to more than million taka. The Govt. revenue has stands on average 2000 million BD Taka per year from this sector. The market share of NREL is approximately 10%. The followings are the major real estate companies in Bangladesh. 1. Building Technology & Ideas Limited. 2. Concord Real Estate & Development Ltd. 3. Bay Developments Ltd. 4. Asset Developments & Holdings Ltd. 5. South Breeze Housing Ltd. 6. Rangs Properties Ltd. 7. Shanta Properties Ltd. 8. Assurance Developments Ltd. 9. Eastern Housing Ltd. 10. Dom-Inno Builders ltd. 11. Sheltac. 12. Advanced Developments & Technologies Ltd. Description of the Property Location of principal plants and other property of the company and their condition The head office the Company is located at Dhanmondi, Dhaka. Value of the Properties Company owns the following operating assets and they are situated at different locations of the Head Office/projects of the Company. Following table represents the classifications of operating assets along with the written down value of the same as at 31 August 2010:- Particulars Cost Depreciation Carrying amount As at Addition As at As at Charged As at As at during the during the year year Office space 3,595,203-3,595, ,595,203 Office equipments 5,338,318 1,203,760 6,542,078 1,632, ,740 2,516,150 4,025,928 Furniture & fixtures 3,093,275 6,885,132 9,978,407 1,307, ,095 2,174,549 7,803,858 Air conditioning system 12,732,694-12,732,694 1,903,022 1,082,967 2,985,989 9,746,705 Power generator & electrical equipment 13,268, ,000 14,165,397 2,522,718 2,095,682 4,618,400 9,546,997 Construction equipments Vehicles 74,590,943 5,334,550 79,925,493 17,998,973 11,146,774 29,145,747 50,779,746 70,924,062 37,990, ,914,062 33,496,918 13,575,086 47,072,004 61,842,058 Total 183,542,892 52,310, ,853,335 58,861,495 29,651,345 88,512, ,340,495 Page- 13

14 Board of s The Board of s of NREL comprises of 5 (five) s. The name, age and position of all s of the Company are as follows:- Sl. No. Name and address of director Age (Years) Position 1 Mr. Shafiul Islam 61 Chairman 2 Mrs. Khaleda Islam 55 3 Mr. Saiful Islam 35 4 Mr. Sajedul Islam 31 5 Ms. Farhana Islam 27 Short Bio-data of s: Mr. Shafiul Islam Kamal, Chairman, 1949: A Bachelor of Science, Mr. Kamal joined the Islam Group, a reputed business conglomerate in Bangladesh in 1968 and started his career with automobile business as well as in the construction, real estate business. In the early years, he gained valuable experience by being involved in the management of the Group s diverse business operations. He played a major role in establishing Navana as the Toyota brand car trading company in Bangladesh, and finally set up Aftab Automobiles Ltd. He was also responsible for the construction company named Bengal Development Corporation (BDC) where he was directly responsible for the construction work of BDC in the Middle East and from 1981, he was also taking care of Eastern Housing Limited, then the largest real estate developing company in Bangladesh. In 1996, the then Chairman of Islam Group, he separated from Islam Group with Navana Ltd and Aftab Automobiles Ltd and formed Navana Group. He has a very good relationship with all the top politicians, bureaucrats, top military officials and other business key persons of the country. Mrs. Khaleda Islam,, 1955: Mrs. Khaleda is the wife of Mr. Shafiul Islam Kamal, Chairman of the Navana Group. Mrs Khaleda has experience in business for more than 30 years. She traveled many countries of the world. Mr. Saiful Islam, Vice-Chairman, 1975: An MBA, Mr. Saiful joined the Navana Group in In the early years, he gained valuable experience by being involved in the management of the Group s diverse business operations. He has been appointed as Managing & CEO of Aftab Automobiles Ltd and Navana CNG Limited in He took various business related professional courses at home and abroad. He traveled almost all the countries of the world. Mr. Sajedul Islam,, 1979: A BBA, Mr. Sajedul, a young enthusiastic entrepreneur of the country, joined the Navana Group in In the early years, he gained valuable experience by being involved in the management of the Group s diversified business operations. He is the Chief Executive of Navana Real Estate Limited and Navana Construction Limited. He took various business related professional courses at home and abroad. He traveled many countries of the world. Page- 14

15 Ms. Farhana Islam,, 1983: A BBA, Ms Farhana, a young enthusiastic entrepreneur of the country, joined the Navana Group in In the early years, she gained valuable experience by being involved in the management of the Group s diversified business operations. She took various business related professional courses at home and abroad. She traveled many countries of the world. Description of the directors: Sl. No. Name Age Years Position Date of Becoming for the first time 1. Mr. Shafiul Islam 61 Chairman 22 September Mr. Saiful Islam 35 Vice Chairman 22 September Mrs. Khaleda Islam September Mr. Sajedul Islam September Ms. Farhana Islam September 1996 Date of becoming first s and date of expiry of current term Sl. Date of First Name Present Position No. ship 1. Mr. Shafiul Islam Chairman 22 September Mr. Saiful Islam Vice Chairman 22 September Mrs. Khaleda Islam 22 September Mr. Sajedul Islam 22 September Ms. Farhana Islam 22 September 1996 Expiry of current term One third of total directors take retirement at every Annual General Meeting and re-elect is eligible other than Managing. s Ownership in other Companies Sl. No. Name Designation with NREL 1. Mr. Shafiul Islam Chairman 2. Mr. Saiful Islam Vice-Chairman Entities where they have Interest Navana Ltd. Aftab Automobiles Ltd. Navana Electronics Ltd. Navana CNG Ltd. Navana Logistics Ltd. Biponon Ltd. Navana Interlinks Ltd. Navana Construction Ltd. Navana Toyota Service Center Ltd. Navana Computers & Tech Ltd. Navana Building Products Ltd Navana Textiles Ltd. Navana Distribution s Ltd Navana Petroleum Ltd. Navana Taxi Cab Co. Ltd. Navana Power Co. Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Navana Ltd. Aftab Automobiles Ltd. Navana Electronics Ltd. Navana CNG Ltd. Navana Logistics Ltd. Biponon Ltd. Navana Interlinks Ltd. Navana Construction Ltd. Navana Toyota Service Center Ltd. Navana Computers & Tech Ltd. Position Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Chairman Vice-Chairman Managing Vice-Chairman & CEO Vice-Chairman & CEO Page- 15

16 3. Mrs. Khaleda Islam 4. Mr. Sajedul Islam Ms. Farhana Islam 5. Navana Building Products Ltd Navana Textiles Ltd. Navana Distribution Ltd Navana Taxi Cab Co. Ltd. Navana Power Co. Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Navana Ltd. Aftab Automobiles Ltd. Navana Construction Ltd. Biponon Ltd. Navana Computers & Tech Ltd. Navana Interlinks Ltd. Navana Taxi Cab Co. Ltd. Navana Electronics Ltd. Navana Textiles Ltd. Navana Distribution Ltd Navana CNG Ltd. Navana Power Co. Ltd. Navana Petroleum Ltd. Navana Logistics Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Navana Building Products Ltd Navana Toyota Service Center Ltd. Navana Ltd. Aftab Automobiles Ltd. Navana Construction Ltd. Biponon Ltd. Navana Computers & Tech Ltd. Navana Interlinks Ltd. Navana Taxi Cab Co. Ltd. Navana Electronics Ltd. Navana Textiles Ltd. Navana Distribution Ltd Navana Logistics Ltd. Navana CNG Ltd. Navana Power Co. Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Navana Building Products Ltd. Navana Toyota Service Center Ltd. Navana Ltd. Aftab Automobiles Ltd. Navana Construction Ltd. Biponon Ltd. Navana Computers & Tech Ltd. Navana Interlinks Ltd. Navana Taxi Cab Co. Ltd. Navana Electronics Ltd. Navana Textiles Ltd. Navana Distribution Ltd. Navana CNG Ltd. Navana Power Co. Ltd. Navana Petroleum Ltd. Navana Logistics Ltd. Navana Renewable Energy Ltd. Navana Batteries Ltd. Navana Furniture Ltd. Navana Paints Ltd. Navana Building Products Navana Toyota Service Center Ltd. Vice-Chairman Vice-Chairman Vice-Chairman Vice-Chairman Page- 16

17 Sl. No. Management of the Company Particulars of Top Executives & Departmental Heads of the Company Name of the Officers Position Educational Qualification Date of Joining in the Company Last Job Experience/ Last 5 Years Experience Total Experience (Years) 1 Engr. Md. Shahidullah Executive B.sc. (Mech) 1-Feb-1996, Islam 39 Group 2 Maj Gen (Retd) Mohammad Ali Advisor BA, MDS, NDC 16-Oct-2007 Bangladesh Army 37 3 Md. Alamgir Hossain, FCA Chief Financial Chartered 25-June-09 Finance Controller, 29 Officer Accountant Rangs Group 4 Engr. Md. Shakawat Hossain Sr. General Manager (Project Operation) B.Sc. (Civil) 1-Mar-2010 Vice Precedent, Sanmar Properties Ltd Mohammed Fasiul Mowla Sr. General Manager (Sales & Land Development) 6 Md. Wahiduzzaman General Manager (Procurement & Inventory) 7 Syed Mobinul Bari General Manager (Customer Service) 8 Md. Mazedur Rahman General Manager (Engineering) 9 A.S.M. Moin Dy. General Manager (Engineering) 10 Ezaz Ahmed, ACMA Sr. Manager ( F & A) 11 Tareque Enamur Rahim Company Secretary 12 Muhammad Shahidul Islam Khan, ACA Head of Internal Audit M. Com. 18-Sep-2004 D.G.M. (Sales & Marketing), Advance Development Ltd. M. Com, CC 3-Sep-2007 G.M. (Procurement), Asset Developments Ltd. B.Com. 8-June-2008 G.M. (Customer Service), Asset Developments Ltd. B.Sc. (Civil) 15-Sep-2010 G.M. (Engineering), Dom-Inno Developments Ltd. B.Sc. (Civil) 3-Jan-1998 Project Engineer, BDC Ltd, Islam Group Cost & Management Accountant 14-May-2008 Manger, Premier Leasing & Finance Ltd. Honors Graduate 1982 Deputy Company Secretary, Aftab Auto Mobiles Chartered Accountant Head of Internal Audit, Navana CNG Ltd VAT, income tax, customs duty or other tax liability VAT: There is no VAT liability outstanding of the company. Customs duty: There is no outstanding customs duty due to the company. Tax: There is no outstanding tax due to the company and got clearance certificate from National Board of Revenue up to Tax Year Determination of the offering price Navana Real Estate Limited is one of the leading market participants in the real industry of Bangladesh. The Company is enjoying a high growth in revenue and net profit in the past couple of years. Net Asset Value (NAV) gives asset-backing to the shares of the Company. Earnings Per Share (EPS) indicates profitability against shares of the Company. Earnings-based Value and Book Value-based Value have been taken to estimate a theoretical fair price that gives us good indication of market demand for the shares of the Company. The weighted average price derived from the four valuation methods, giving equal weight, is the indicative offer price for the shares of Navana Real Estate Limited to be issued through the IPO under Book Building Method. Page- 17

18 Different methods used to determine the fair price per share of the Company are presented below: Method 1 Price based on Net Asset Value (NAV) based price per share: Particulars Amount A. Share Capital as at 31 August ,000,000 B. Reserve and Surplus as at 31 August ,924,935 C. Total Shareholders' Equity as at 31 August 2010 (A+B) 1,181,924,935 D. Number of shares as at 31 August ,000,000 E. Net Asset Value (NAV) Per Share as at 31 August 2010 (C/D) Method 2 Price based on Earning per Share (EPS): The Company s operational performances and financial results reflect its growth, financial strength, earning and prospects that help investors in making informed investment decision. These are summarized as follows: Financial Year Net Profit Paid-up Capital no. of outstanding share Earning per share (EPS) Diluted no. of Share Restated EPS 31-Aug ,097, ,000,000 30,000, ,000, Aug ,773,585 51,000,000 5,100, ,000, Aug-08 23,692,499 1,000, , , Aug-07 2,164,282 1,000, , , Aug-06 2,385,465 1,000, , , Average Capital Issue Date & form: Allotment no. Date of Allotment Consideration Amount in Tk. 1 st Cash 1,000, nd Cash 50,000, rd Cash 49,000, th Bonus 200,000, Total 300,000, The weighted average net profit after tax for the last 5 (five) years stands at Tk. 93,022, and the restated average EPS stands at Tk If we consider the share price of the Company on the basis of price earning multiple of 10, the earning based value of shares of the Company stands at Tk Method 3 - Price Based On P/E Ratio of Similar Stocks: Average P/E Ratio of Similar Companies Sl. No. Company Face Value NAV EPS Market Price (12 months avg.) P/E Ratio 1 Samorita Hospital Ltd Eastern Housing Ltd Summit Alliance Port Ltd *Ocean Containers Ltd Average Page- 18

19 Determining the Fair Value of Navana s Stock: Diluted EPS 9.67 Representative P/E Multiple (X) Fair Value (BDT) Method 4 - Price based on P/BV Ratio of Similar Stocks: Average P/BV Ratio of Similar Companies Sl. No. Company Face Value EPS NAV Market Price (12 months avg) P/BV Ratio 1 Samorita Hospital Ltd Eastern Housing Ltd Summit Alliance Port Ltd *Ocean Containers Ltd Average 6.11 Determining the Fair Value of Navana s Stock: NAV Representative P/BV Multiple (X) 6.11 Fair Value (BDT) * Seven Month Average Price Finding and Calculation of the fair Price of share of NREL: Particulars Value Price based on Net Asset Value /Equity based value per share (NAV) Price based on Earning per share (EPS) Price Based On P/E Ratio of Similar Stock Price based on P/BV Ratio of Similar Stock *Average (Geometric Mean) *The above valuation methods show highly skewed data. Therefore we use geometric mean rather than arithmetic mean. The geometric mean is a measure of central tendency, just like a median. Therefore Based on the above calculation the fair value of the Stock of the Company stands at Tk and we conservatively fix up the expected Tk per share including a premium of Tk per share. OWNERSHIP OF THE COMPANY S SECURITIES In the financial year , shareholding pattern of the Company changed. New four shareholders were included in the Company. The authorized share capital of the Company increased to Tk crore from Tk crore, and paid-up capital increased to Tk crore from Tk crore. Present shareholding pattern of the Company is given below (as per audited accounts): Page- 19

20 NREL s s List and Shareholding Pattern Name Position Held Total number of % of share held Share Mr. Shafiul Islam Chairman 1,19, % Mr. Saiful Islam Vice Chairman 13, % Mrs. Khaleda Islam 13, % Mr. Sajedul Islam 13, % Ms. Farhana Islam 13, % Mr. Md. Aminul Hoque Shareholder 15, % Aftab Automobiles Ltd Shareholder 60, % Laguna Autos Ltd Shareholder 25, % Biponon Ltd Shareholder 25, % Total 3,00, % 5% or more of the Shareholding structure of the Company (as per audited accounts): Sl. No. Name Status with the Company No. of Shares Percentage of ownership 1. Mr. Shafiul Islam Chairman 119, % 2 Mr. Md. Aminul Hoque Share Holder 15, % 3 Aftab Automobiles Ltd. Share Holder 60, % 4 Laguna Autos Ltd. Share Holder 25, % 5 Biponon Ltd. Share Holder 25, % Securities of the Company owned by each director (as per audited accounts): Securities owned by each director are given below (as on 31 August 2010): Sl. No. Name Status with the Company No. of Shares Percentage of ownership 1. Mr. Shafiul Islam Chairman 119, % 2. Mrs. Khaleda Islam 13, % 3. Mr. Saiful Islam 13, % 4. Mr. Sajedul Islam 13, % 5. Ms. Farhana Islam 13, % Book Building Method Book Building is a process through which an issuer attempts to determine the price to offer its security based on demand from institutional investors. Under the process, the price of an IPO share will be determined through an automated bidding to be participated by different financial institutions and then the share will be opened for the IPO participant at the cut-off price determined during the book building process. The bidding will be handled through a uniform and integrated automated system of the stock exchanges, or any other organization as decided by the Commission, especially developed for book building method. The entire procedure of price discovery under book building method is delineated below: a) The issuer/issue manager shall issue invitation to the eligible institutional 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/presentation/seminar indicating time and venue of such event. Page- 20

21 b) The invitation letter shall accompany an information document containing all relevant information covering the proposed issue of the issuer. The eligible institutional investors shall submit indicative price to the issuer/issue manager, signed jointly by the Chief Executive Officer (CEO) and the Financial Analyst, highlighting the factors taken into consideration in support of the indicative price, within the next 3(three) working days of the said road show/presentation/seminar; c) The indicative price band will be fixed based on the past performance, expected future earnings of the issuer and the P/E ratio of other peer companies in the industry and the determination of indicative price involves the following institutional investors registered with or approved by SEC in this regard:- - Merchant Bankers except the issue manager of the proposed issue; - Foreign institutional investors; - Recognized pension funds and provident funds; - Banks and NBFIs under regulatory control of Bangladesh Bank; - Insurance Companies regulated under Insurance Act, 1938; - Institutional venture capital and institutional investors; - Stock Dealers; and - Any other artificial juridical person permitted by the SEC for this purpose. d) Issuer in association with issue manger and eligible institutional investors quote an indicative price in the prospectus with the rationale for such price and submit the prospectus to the Commission with copy to the stock exchanges. e) The indicative price range shall be determined as per price indications obtained from at least 15 (fifteen) eligible institutional investors covering at least 3 (three) different categories including at least 5 (five) merchant banks of such investors. f) Eligible institutional investors bidding shall commence after getting consent from the Commission for this purpose. Institutional bidding period will be 3 to 5 (Three to Five) working days which may be changed with the approval of the Commission. g) Eligible institutional investors (EIIs) shall not be allowed to participate in the bidding unless they participate and quote in the Road Show for setting the indicative price. The EII participating in the Road Show and quote price must also participate in the bidding. The issuer and issue manager will jointly submit the attendance sheet and the quoted price by the EII along with the draft prospectus to SEC. h) Prospectus will be posted on the Websites of the Commission, stock exchanges, issue manager and issuer at least 2 (two) weeks prior to the start of the bidding to facilitate investors to know about the company and all aspect of offering. Page- 21

22 i) The indicative price shall be the basis for formal price building with an upward and downward band of 20% (Twenty Percent) of indicative price within which eligible institutional investors shall bid for the allocated amount of security. j) If institutional quota is not cleared at 20% (Twenty Percent) below indicative price, the issue will be considered cancelled unless the floor price is further lowered within the face value of security. Provided that the issuer s chance to lower the price shall not be more than once. k) No institutional investor shall be allowed to quote for more than 10% (Ten Percent) of the total security offered for sale, subject to maximum of 5 (Five) bids. l) The volume and value of bid at different prices will be displayed on the monitor of the said system without identifying the bidder. m) The institutional bidders will be allotted security on pro-rata basis at the weighted average price of the bids that would clear the total number of securities being issued to them. n) Institutional bidders shall deposit their bid with 20% (Twenty Percent) of the amount of bid in advance to the designated bank account and the rest amount to settle the dues against security to be issued to them shall be deposited within 5 (Five) working days prior to the date of opening subscription for general investors. o) In case of failure to deposit remaining amount that is required to be paid by institutional bidders for full settlement of the security to be issued in their favor, 50% (Fifty Percent) of bid money deposited by them shall be forfeited by the Commission. The securities earmarked for the bidder who defaulted in making payment shall be added to the general investor quota. p) The time gap between closure of bidding by Eligible Institutional Investors and subscription opening for general investors is 25 working days or as may be determined by the Commission. q) The securities will be offered to the general investors, NRBs and Mutual Funds at the cut-off price determined during the book building process. Description of Securities Outstanding or Being Offered a) Dividend, Voting and Preemption Right In case of any declaration of cash/stock dividend by the Company or distribution of any property of the Company, all the shareholders shall be entitled to it in proportion to their Page- 22

23 shareholdings on the date of the book closure or record date for the purpose. The Company will follow a dividend policy, which will allow it to provide a fair return on its shareholders investment and simultaneously allow for building up of the retained earnings and reserves as a rule that would sustain growth of the Company. 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 s and Auditor(s) 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 Rights Issue of shares in terms of the guidelines issued by the Securities and Exchange Commission from time to time. b) Conversion and Liquidation Right The Company in its General Meeting may convert paid-up shares to any denomination. No special preferences or privileges shall be attached to this conversion. If the company at any time issues Preference Shares or Debentures or Bonds with the consent of SEC, such holders of securities shall be entitled to convert such securities into ordinary shares if it is so determined by the company. In case of winding- up or liquidation of the Company, all shareholders have the same privileges and advantages as ordinary shareholder as regards participation in profits and voting at meetings of the Company. c) Right for Transfer In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, the shares of the Company are transferable. The Company shall not charge any fee other than Government duties for registering transfer of shares. No shares shall be transferred to an infant or a person of unsound mind. d) Dividend Policy I. The profits 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 provision of the Articles of Association, shall be divisible among the members in proportion to the amount of capital paid -up on the shares held by them respectively. II. No larger dividend shall be declared than is recommended by the directors, but the Page- 23