Information Document for Direct Listing OF ACI FORMULATIONS ...

“If you have any queries about this document, you may consult issuer and issue manager.” 

Information Document for Direct Listing 

OF 

ACI FORMULATIONS LIMITED 

ACI Centre, 245 Tejgaon Industrial Area, Dhaka-1208 

Tel.9885694-8 Fax (8802)9884784, 9886029, 8810191 

Email: info@aci-bd.com 

Website: www.aci-bd.com 

Offloading of 89,87,500 ordinary shares of Tk. 10.00 each (Face Value Tk. 8,98,75,000.00) 

Listing Date with DSE: 30 October 2008 

Listing Date with CSE: 02 November 2008 

Manager to the Issue 

ICB Capital Management Limited 

(A Subsidiary of ICB) 

BSB Building (14 th Floor), 

8, DIT Avenue, Dhaka. 

Date of Information Document: 06 November 2008 

The Issue shall be placed in “N” Category 

Credit Rating 

by 

Credit Rating Information and Services Ltd. (CRISL) 

Long Term 

Short Term 

Rating A+ ST - 3 

“CONSENT OF THE DHAKA AND CHITTAGONG STOCK EXCHANGE LIMITED HAS BEEN 

OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE DHAKA & 

CHITTAGONG STOCK EXCHANGE (DIRECT LISTING) REGULATIONS, 2006. IT 

MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE EXCHANGES DO 

NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY, ANY OF 

ITS PROJECTS OR THE ISSUE PRICE OF ITS SHARES OR FOR THE CORRECTNESS OF ANY OF THE 

STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY 

LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL 

OFFICER, ISSUE MANAGER AND/OR AUDITOR.”

AVAILABILITY OF INFORMATION DOCUMENT 

Information Document of the Company may be available at the following addresses: 

Company Contact Person Contact Number 

ACI Formulations Limited 

ACI Centre, 

245 Tejgaon Industrial Area 

Dhaka - 1208 

Ms. Sheema Abed Rahman 

Company Secretary 

Phone : 9885694-8 

Fax : (8802) 9884784, 9565257 

Email : info@aci-bd.com or 

gmcs@aci-bd.com 

Website : www.aci-bd.com 

Manager to the Issue Contact Person Contact Number 

ICB Capital Management Ltd. 

BSB Building (14 th Floor), 

8, DIT Avenue, Dhaka. 

Md. Iftikhar-uz-zaman 

Chief Executive Officer 

Phone : 02-7160422, 7160326-27, 9563455 

EX-196 

Fax : 880-2-9555707 

E-mail : ceocmcl@accesstel.net 

Website : www.icbcml.com.bd 

Stock Exchanges Available at Contact Number 

Dhaka Stock Exchange Ltd. 

9/F Motijheel C/A, 

Dhaka-1000. 

Chittagong Stock Exchange 

Ltd. 

CSE Building, 

1080 Sheikh Mujib Road, 

Chittagong. 

DSE Library Phone : 02-9564601-7, 7175705-9 

Fax : 88-02-9564727 

E-mail : dse@bol-online.com 

Website : www.dsebd.org 

CSE Library Phone : 031-714632-3, 031-720871-3 

Website : www. csebd.com 

Information Document would also be available on the website of SEC (www.secbd.org), DSE (www. 

dsebd.org), CSE (www.csebd.com), Issue Manager (www.icbcml.com.bd) and Public Reference Room of the 

Securities and Exchange Commission (SEC) for reading and study. 

FINANCIAL STRUCTURE OF THE COMPANY 

The Financial Structure of the Company as on 30.06.2008 is as follows: 

Particulars No. of shares Face Value (Taka) Amount in Taka 

Authorised Capital 5,00,00,000 10.00 50,00,00,000.00 

Paid-up Capital 2,50,00,000 10.00 25,00,00,000.00 

INFORMATION DOCUMENT Page 2 of 89 ACI FORMULATIONS LIMITED

Definition and Elaboration of the abbreviated words and technical terms used 

in the Information Document 

ACIFL : ACI Formulations Limited. 

ACI : Advanced Chemical Industries 

AGM : Annual General Meeting 

BCPA 

CAGR 

: 

: 

Bangladesh Crop Protection Association 

Compound Average Growth Rate 

CDBL : Central Depository Bangladesh Limited 

CIB : Credit Information Bureau 

COMMISSION : Securities and Exchange Commission 

CC & PH : Crop Care & Public Health 

CSE : Chittagong Stock Exchange Limited 

DSE : Dhaka Stock Exchange Limited 

EPS : Earning Per Share 

EGM : Extra-Ordinary General Meeting 

FAO : Food & Agricultural Organization 

FMC : Fast Moving Consumers 

GOB : Government of Bangladesh 

GDP : Gross Domestic Product 

GLC : Gas Liquid Chromatograph 

HPLC : High Performance Liquid Chromatograph 

ISSUE : Direct Listing of Shares of ACIFL 

ICML : ICB Capital Management Limited 

ICB : Investment Corporation of Bangladesh 

KW : Kilo Watt 

KWH : Kilo Watt Hour 

LATR : Loan Against Trust Receipt 

M COIL : Mosquito Coil 

NAV : Net Asset Value 

PHP : Public Health Product 

PPW : Plant Protection Wing 

RJSC : Registrar of Joint Stock Companies & Firms 

R & D : Research & Development 

RCC : Reinforcement Concrete 

REB : Rural Electrification Board 

RL : Revolving Loan 

SEC : Securities and Exchange Commission 

SECURITIES : Shares of ACIFL 

SECURITIES MARKET : The Share Market of Bangladesh 

STL : Short Term Loan 

THE COMPANY/ISSUER : ACI Formulations Limited. 

VAT : Value Added Tax 

WPPF : Workers Profit Participation Fund 

WDG : Water Dispersible Granular 


TABLE OF CONTENTS 

Particulars 

Page no. 

‣ Disclosure in respect of issuance of security in demat form-------------- 7 

‣ Disposal of Shares ---------------------------------------------------------------------- ---------------- 7-8 

Shareholders Resolution in respect of disposal of shares in accordance with the regulation 

5 of Dhaka/Chittagong Stock Exchange (Direct Listing) Regulations, 2006 

‣ Undertaking to DSE -------------------------------------------------------------------- 9 

‣ Undertaking to CSE -------------------------------------------------------------------- 10 

‣ Purpose of Offloading / Use of Sale Proceeds -------------------------------------------- 11 

‣ Statement Regarding Holding Annual General Meeting ---------------------------------------- 11 

‣ Risk Factors and Management Perceptions ---------------------------------------------------- 12-13 

‣ Description of Business ------------------------------------------------------------------------------ 13-19 

• Corporate status and background 

• Nature of business 

• Principal products or services of the Company 

• Market for the products or services of the Company 

• Relative contribution of products contributing more than 10% of the total revenue 

• Name of associates, subsidiary/related holding company and their core areas of 

business 

• Distribution of products or services 

• Competitive conditions in the business 

• Sources and availability of raw materials and the names of the principal suppliers 

• Sources of requirement for power, gas and water 

• Name of customers who purchase 10% or more of the Company’s products 

• Contract with principal suppliers/customers 

• Material patents, trademarks, licenses or royalty agreements 

• Employees position 

• Production capacity and current utilization 

‣ Description of Property ------------------------------------------------------------------------------ 19-20 


• Information in respect of plant and property 

• Fixed assets 

• Condition of property 

• Ownership of property 

• Lien status 

• Lease property 

• Written down value of the property, plant and equipment 

‣ Plan Of Operation And Discussion On Financial Conditions --------------------------------- 21-30 

• Internal and external sources of cash 

• Material commitments for capital expenditure 

• Causes of any material changes in income, cost of goods sold, other operating 

expenses and net income 

• Seasonal aspects of business 

• Known trends, events or uncertainties 

• Change in the assets to pay off any liabilities 

• Loans taken from the holding/subsidiary company or loans given to those 

companies 

• Future contractual liabilities 

• Estimated future capital expenditure 

• Vat, income tax, customs duty or other tax liabilities 

• Sources from which VAT and Tax etc are paid 

• Finance lease during last 5 years 

• Financial and lease commitment during last 5 years 

• Personnel related schemes 

• Break down of all expenses including fee of issue manager and underwriters 

• Revaluation of assets 

• Transaction with holding or subsidiary companies which have been taken place 

during last 5 years 

• Special report from the auditors for issue of shares otherwise than for cash 

• Material information having an impact on the affairs of the company 

• Statement of changes in shareholders’ equity 

‣ Directors And Officers -------------------------------------------------------------------------------- 31-37 

• Name, age and position of all Directors of the company and any person nominated to 

be a director 

• Date of becoming first Director and date of expiry of current term 

• Involvement of Directors with other companies 

• Involvement of Directors with listed companies in terms of dividend and category 

• Family relationship between directors and officers 

• Short bio-data of Directors 

• Holding of 5% or more shares in the paid-up capital by the Directors or shareholders 

of the Issuer is loan defaulter in terms of the CIB report of the Bangladesh Bank 

• Description of senior executives and officers 

‣ Involvement Of Officers And Directors In Certain Legal Proceedings --------------------- 38 

‣ Certain Relationships And Related Transactions ---------------------------------------------- 38 


‣ Executive Compensation ---------------------------------------------------------------------------- 39 

‣ Options Granted To Officers, Directors And Employees ------------------------------------- 39 

‣ Transaction With Promoters -------------------------------------------------------------------------- 40 

‣ Net Tangible Assets Per Share ------------------------------------------------------------------------ 40 

‣ Ownership Of The Company’s Securities - ---------------------------------------------------------- 41 

• Number of shares owned by the top ten salaried officers, directors and all other 

officers 

‣ Description Of Securities Outstanding Or Being Offered ------------------------------------- 41-42 

• Dividend, voting and preemption rights 

• Conversion and liquidation rights of any preferred stock outstanding or being offered 

• Dividend 

• Others material rights of common stockholders 

‣ Debt Securities ------------------------------------------------------------------------------------------ 42 

‣ Future Prospects ----------------------------------------------------------------------------------------- 43-44 

‣ Credit Rating Report ------------------------------------------------------------------------------------- 45-55 

‣ Financial Statements ------------------------------------------------------------------------------------- 56-81 

• Auditors’ Report and Audited Financial Statements for the half year ended 30 June 08 

• Comparative Income Statements, Balance sheet and Cash Flow Statement for 

immediate preceding five accounting years 

• Selected Ratios 

‣ Additional Disclosures ------------------------------------------------------------------------------------- 82-89 


DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM 

As per provisions of the Depository Act, 1999 and regulations made thereunder, share of the company will be 

issued in dematerialized form, only and, for this purpose, ACI Formulations Limited (ACIFL) has signed an 

agreement with the Central Depository Bangladesh Limited (CDBL). Therefore, all transfers/transmissions, 

splitting or conversions will take place in the CDBL system and any further issuance of shares (including` 

rights/bonus) will also be issued in dematerialized form only. 

DISPOSAL OF SHARES 

Details of offloading of shares by the Existing Shareholders as per Regulation 5 of 

Dhaka & Chittagong Stock Exchange (Direct Listing) Regulations, 2006 

ACI Limited, one of the Existing Shareholders of ACI Formulations Ltd, shall offload 89,87,500 ordinary 

shares of Tk. 10 each (Face value Tk. 8,98,75,000.00) with a minimum market lot of 50 (fifty) shares following 

the Regulation 5 of Dhaka & Chittagong Stock Exchange (Direct Listing) Regulations, 2006, the Depository 

Act, 1999 and regulations issued thereunder: 

1. As resolved in the Board of ACI Formulations Limited (ACIFL) and also as per resolution taken in the 

EGM of ACIFL, 35.95% of the Paid-up share capital (i.e. 89,87,500 shares) to be sold to the general 

public/institutions at market price. 

2. The Information Document, as vetted by DSE & CSE, have been published in two widely circulated 

national dailies (one in English and another in Bengali) minimum 7 (Seven) days before 

commencement of trade upon listing by DSE & CSE along with an electronic copy for posting in the 

web page of DSE & CSE. 

3. The company has simultaneously submitted the vetted Information Document with all exhibits to 

SEC, to the Stock Exchanges where it tends to list its securities. 

4. The existing shareholders of the company shall sell their shares through brokers of the exchange upon 

listing. 

5. No existing shareholder of the company shall sell more than 50% of his existing shareholdings until 

the company holds the Annual General Meeting after completion of one full accounting year of the 

company upon listing with the Exchanges. 

6. The conditions stated in 4 and 5 is subject to the provision that the existing shareholders shall offer for 

sell at least 10% of the shareholdings in the company within 30(thirty) working days from the date of 

listing. 

7. Declaration about listing of Shares with the stock exchange (s): 

Applications have already been made to the Dhaka and Chittagong Stock Exchanges for permission 

of the shares of the company for dealing in both the said Stock Exchanges and for the quotation of the 

Stock Exchanges. After fulfillment of all requirements by the Company, the Exchanges shall list the 

Company’s shares within three weeks from the date of Publication of the Information Document, as 

mentioned in regulation 4, under intimation to the Commission, provided there is no contrary 

opinion of the Commission in this respect. 

In case of failure to fulfill the requirements by the company, the Exchanges shall reject the application 

for listing showing reasons thereof, under intimation to the Securities and Exchange Commission 

within 60 (sixty) days from the date of application. 


Shareholders Resolution in respect of disposal of shares in accordance with the regulation 5 of 

Dhaka/Chittagong Stock Exchange (Direct Listing) Regulations, 2006 

We the existing shareholders of ACI Formulations Limited (ACIFL) declare that- 

i) We shall sell our shares through the Exchanges (DSE/CSE) upon listing; 

ii) We shall not sell more than 50% of our existing shareholdings until the Company holds the Annual 

General Meeting after completion of one full accounting year of the Company upon listing with the 

exchanges (DSE/CSE); 

iii) We shall offer for sell at least 10% of the shareholdings in the Company within 30 (thirty) working days 

from the date of listing. 

Sd/- 

( M Anis Ud Dowla) 

Sd/- 

( Najma Dowla) 

Sd/- 

(Dr. Arif Dowla) 

Sd/- 

( Shusmita Anis Salam) 

Sd/- 

( Wajed Salam) 

Sd/- 

(Dr. F H Ansarey) 

Sd/- 

( Sheema Abed Rahman) 

Sd/- 

( M Anis Ud Dowla) 

Representative of ACI Ltd. 


Date: September 17, 2008 

To 

The Secretary 

Dhaka Stock Exchange Limited 

Dhaka. 

Dear Sir, 

UNDERTAKING 

We undertake, unconditionally, to abide by the Listing Regulations of the Dhaka Stock Exchange Limited as 

well as other relevant securities laws which presently are, or hereinafter may be in force. 

We further undertake: 

(1) That our shares and securities shall be quoted on the Ready Quotation List and/or the Cleared List at the 

discretion of the Exchange. 

(2) That the Exchange shall not be bound by our request to remove the shares or securities from the ready 

Quotation List and/or the Cleared List. 

(3) That the Exchange shall have the right, at any time to suspend or remove the said shares or securities for 

any reason which the Exchange considers sufficient in public interest. 

(4) That such provisions in the Articles of Association of our Company or in any declaration or basis relating 

to any security as are or otherwise not deemed by the Exchange to be in conformity with the Listing 

Regulations of the Exchange shall, upon being called upon by the Exchange, be amended to supersede 

the Articles of Association of our Company or the declaration or basis relating to any security; and 

(5) That our company and /or the security may be delisted by the Exchange in the event of non-compliance 

and breach of the Regulations and/or of this undertaking after giving an opportunity of being heard to 

us. 

Yours faithfully, 

Sd/- 

M Anis Ud Dowla 

Managing Director 


Date: September 17, 2008 

To 

The Secretary 

Chittagong Stock Exchange Limited 

Chittagong. 

Dear Sir, 

UNDERTAKING 

We undertake, unconditionally, to abide by the Listing Regulations of the Chittagong Stock Exchange Limited 

as well as other relevant securities laws which presently are, or hereinafter may be in force. 

We further undertake: 

(1) That our shares and securities shall be quoted on the Ready Quotation List and/or the Cleared List at the 

discretion of the Exchange. 

(2) That the Exchange shall not be bound by our request to remove the shares or securities from the ready 

Quotation List and/or the Cleared List. 

(3) That the Exchange shall have the right, at any time to suspend or remove the said shares or securities for 

any reason which the Exchange considers sufficient in public interest. 

(4) That such provisions in the Articles of Association of our Company or in any declaration or basis relating 

to any security as are or otherwise not deemed by the Exchange to be in conformity with the Listing 

Regulations of the Exchange shall, upon being called upon by the Exchange, be amended to supersede 

the Articles of Association of our Company or the declaration or basis relating to any security; and 

(5) That our company and /or the security may be delisted by the Exchange in the event of non-compliance 

and breach of the Regulations and/or of this undertaking after giving an opportunity of being heard to 

us. 

Yours faithfully, 

Sd/- 

M Anis Ud Dowla 



PURPOSE OF OFFLOADING/USE OF SALE PROCEEDS: 

Out of all shareholders of ACI Formulations Limited, only ACI Limited will offload 89,87,500 shares of its 

shareholding in ACI Formulations Limited through Direct Listing of ACI Formulations Limited with DSE and 

CSE and the sale proceeds of the shares will be utilized by ACI Limited in the following manner : 

As a prudent and progressive company, ACI Limited endeavors to maximise the shareholders wealth. Last 

few years records will surely vouch that. Here, there will be no exception also. The company gives 

shareholders trust and confidence most important thing to cherish and this actually allows ACI Limited to 

drive its energy and efforts to realize company’s mission. In order to give consistent return to the 

shareholders in the longer term, money to be realized from the capital market will be utilized most 

judiciously: 

• one, to keep the pace of growth continues ACI Limited will invest in new projects or sectors 

which have proven track records of giving lower pay back period with high returns. 

• secondly, shareholders – company’s most important assets, will be rewarded with good returns 

commensurate with their contribution. 

• thirdly, steps will be taken to strengthen the Balance Sheet of the ACI Limited to keep the 

company remain in the strong footing. 

STATEMENT REGARDING HOLDING ANNUAL GENERAL MEETING OF THE COMPANY 

No. of AGM Date of AGM Financial year 

1 st 24-04-1997 1996 

2 nd 02-11-1998 1997 

3 rd 21-04-1999 1998 

4 th 22-05-2000 1999 

5 th 22-05-2001 2000 

6 th 09-05-2002 2001 

7 th 10-05-2003 2002 

8 th 26-05-2004 2003 

9 th 02-05-2005 2004 

10 th 28-05-2006 2005 

11 th 28-05-2007 2006 

12 th 23-06-2008 2007 


RISK FACTORS AND MANAGEMENT PERCEPTIONS 

The Company is operating in an industry involving both external and internal risk factors having direct as 

well as indirect effects on the investments by the investors. The assessable risk factors, both external and 

internal, and Management perception thereabout are enumerated hereunder: 

a) Interest rate risk: Interest/financial charges are paid against any kind of borrowed fund. Instability in 

money market and increased requirement for fund may put pressure on interest rate structure. Rising of 

interest rate increases the cost of fund and consequently there may be impact on profitability. 

Management Perception: While taking loan, Company always carefully considers the balance to be 

maintained between term loan which carries fixed interest rate and short term loan which carries variable 

interest rate so that any interest on inflation rate increase can be kept to the minimum. Additionally 

Company maintains very good reputation in the Banking Community and so far being able to attract very 

competitive rates from the Banks. Management of the Company is also emphasizing on equity based 

financing to reduce the dependency on bank borrowings which is reflected in the Financial Statements. 

b) Exchange rate risk: The Company imports raw materials against payment of foreign currency. 

Unfavorable volatility or currency fluctuation may affect the profitability of the Company. 

Management Perception: Company is fully aware of the risks related to currency fluctuation and as a 

prudent company we always take steps to hedge all major currency dealings to safeguard the interest of 

the Company. 

c) Industry risk: Environmentalists are likely to create pressure on Government for banning agro-chemicals 

for its negative effects on living beings thereby causing closure of business by the Company. 

Management Perception: With the world wide shortage of food products there is renewed importance 

and urgency in increasing food production. With the help of pesticides, insecticides and other crop care 

products farmers will be able to increase their crop yield and there by helping the country to become self 

sufficient in food. Bangladesh is one of the countries where per hector yield is lowest. No doubt product 

coming out from this Company will be used to increase yield. Company also strictly follows all the laid 

down regulations for marketing agrochemical products and therefore do not foresee any problems in 

doing the business. 

d) Market & Technology related risk: The production facilities are based on currently available technology. 

Any invention of new and more cost effective technology may cause operational obsolescence thereby 

causing in substantial new investments. Proposed new investments in diversified product lines may need 

diversified technology and management skills which may not be available. Any serious defects in the 

plant and machinery may affect production and profitability calling for additional investment for 

replacement. 

Management Perception: Company owns modern technology with R&D infrastructure and shall be able 

to adapt to any new inventions with moderate investments as it has been doing in the past. The Company 

has access to international/multinational companies for supplying appropriate technology and technical 

management support for operation of new projects. The selected/installed plant and machinery have 

been manufactured by reputed manufacturer with proper warranty to take care any defects or 

confirmation of supplying of adequate spare parts. As such the Company does not envisage any major 

problem in this area. 

e) Potential or existing Government regulations: Environmentalists may like to create pressure on 

Government to reduce the use of crop protection products for its effects on living beings due to misuse or 

lack of awareness. Any adverse change by the Government in fiscal policies relating to agro-incentives 

may adversely affect Company’s profitability. 

Management Perception: Recently there is campaign to increase food production. FAO and other 

international bodies are also asking Bangladesh to improve its food security. This Company is poised in 

the right position to actively participate in increasing country’s food production as there will be an 

increasing demand for agrochemical products for enhancing the crop production. 


f) Potential changes in global or national policies: The Company’s product lines consist of crop protection 

products which are primarily based on imported raw materials. Any shortage in the international market 

might dent the production level and profitability. Law and order situation and political unrest may also 

jeopardize Company’s operations and adversely affect profitability. 

Management Perception: As a going concern, Company always takes step to safeguard its interest. The 

company’s supply chain is robust in accommodating large number of suppliers with proper contingency 

plan in place. 

g) Non-operating history: There is no history of non operation in case of ACIFL. 

h) Operational Risk: Shortage of power supply, labour unrest, unavailability or price increase of raw 

materials, natural calamities like flood, cyclone, earthquake etc. may disrupt the production of the 

Company and can adversely impact the profitability of the Company. 

Management Perception: The Company always provide competitive compensation package to its 

employees and maintain a healthy workers management relationship. The project of the Company is 

situated at a high land where there was no less record of flood. The factory building has strong RCC 

foundation, RCC floor, pre-fabricated steel structure to withstand wind, storm, rain etc. along with good 

drainage facility. The Company’s product has a good reputation in the market. Company always takes 

pragmatic steps to convince the customers to share a portion of the increased burden of cost increase 

which is possible because of strong reputation of company’s products in the market and we do not 

compromise on quality. 

Corporate Status and Background 

DESCRIPTION OF BUSINESS 

ACI Formulations Limited (ACIFL) is a public limited company which was incorporated on 29 October 1995 

as a private limited company with the Registrar of Joint Stock Companies and Firms, Dhaka, Bangladesh 

under the Companies Act 1994 with a mission to play dominant role in enhancing the quality of life and well 

being of the people of Bangladesh. The Company went into commercial operation on 01 July 1998. The status 

of the Company was converted from Private Limited to Public Limited Company on 04 May 2005. The 

Authorized Capital of the Company as of 30 June 2008 is Tk. 500,000,000.00 divided into 50,000,000 ordinary 

shares of Tk. 10.00 each. The paid up capital as of the same date was Tk. 250,000,000.00 divided into 25,000,000 

ordinary shares of Tk. 10.00 each. ACI Formulations Limited is the subsidiary of ACI Limited by virtue of its 

holding 86.95% of the paid up share capital of ACI Formulations Limited. The registered office of the 

Company is situated at ACI Center, 245 Tejgaon Industrial Area, Dhaka-1208 and the factory is located at 

Rajabaria, Sreepur, Gazipur. 

Nature of Business 

The current principal activities of the Company are to manufacture and market of a number of Agrochemicals 

and Consumer products. Most of the sales are made currently to ACI Limited which markets the products 

under the Marketing and Distribution agreement. As envisaged in the Memorandum of Association, the 

Company’s main object clause include, not being limited to, among others business of agro-chemicals and 

public health products to carry on the business of manufacturing, formulation and packaging of 

granular/liquid/powder forms of pesticides like insecticide, fungicide, herbicide, repellent, adjuvant etc. 

production of fertilizer, plant nutrient, growth regulator, hormone, stimulants, animal feed, cattle feed, 

poultry feed, fish feed, production/processing/development of all types of seeds like cereals, pulses, oil, 

fruits, vegetables, ornamentals, engage in farming, horticulture, tissue culture, plantation, aquaculture and 

varieties of allied industrial and service related operations. 

In the proposed new structure all the agro-chemical products (Crop-Care) will be manufactured and 

directly marketed by the Company (ACIFL) without using ACI Limited as a selling & marketing agent. 

This will allow the Company to have higher margin and more control in the market. 


Principal products or services of the Company 

The Company currently has three units; each of them produces different types of products which are as 

follows: 

a) Unit – 1: Insecticides, Herbicides, Fungicides and other related products. 

b) Unit – 2: Mosquito Coil 

c) Unit – 3: Aerosol and Air freshener 

Aside from these, the Company also provides services to ACI Ltd. by manufacturing Vanish Toilet Cleaner 

for ACI Ltd. under the contract manufacturing agreement (Marketing and Distribution agreement) with ACI 

Limited. 

The Company’s products have distinct superiority due to high standard of quality control measures through 

use of quality control laboratory equipped with HPLC and GLC to check the quality as well as product 

development activities. 

Market for the products or services of the Company 

The Company has two major lines of business. One is Agro-chemicals which are crop protection products and 

has direct relationship with increasing and protecting crops of millions of farmers. Secondly, Public Health 

products like mosquito repellant (Coil, Aerosol) and other health and hygienic products like Air freshener & 

house cleaning. Since contribution of the agricultural sector to the GDP is still dominant and the sector is the 

largest employer of workforce, public sector (Gov’t. agencies) and the private sectors (farmers) have been 

keen in applying Agro-chemicals along with fertilizers and other components to grow-more food. As a result 

the demand for these products have shown increasing trend over the years. This is reflected in the increased 

rate of turnover growth of the Company over the years. The Company enjoys a dominant market share of 

18% in crop pesticides (source: BCPA 2007), 87.9% in consumer pesticides (Aerosol), 27% in mosquito coil 

(source: Nielsen-BD, August 2008). 

Relative contribution of Products 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: 

Sl. 

No. 

Name of the products % of contribution to sales % of contribution to income 

1 Insecticides, Herbicides, 

56.38% 92.63% 

Fungicides 

2 Mosquito Coil 26.67% 3.83% 

3 Aerosol 16.95% 3.54% 

Name of associates, subsidiary/related holding company and their core areas of business 

The Company is a subsidiary of ACI Limited, a publicly listed company. ACI Limited holds 86.95% of the 

paid up share capital of the Company. The principal activities of ACI Ltd. are to manufacture pharmaceutical, 

consumer brands, public health and animal health products and to market them along with agrochemicals, 

seeds and other consumer brands items. Currently, ACI Limited is responsible for distribution and marketing 

of ACIFL’s products under the Marketing & Distribution agreement. The following companies are also the 

subsidiaries of ACI Limited: 

1. ACI Salt Limited having shares of 78% 

2. ACI Foods Limited having shares of 95% 

3. ACI Pure Flour Limited having shares of 95% 

4. Apex Leather Craft Limited having ownership of 100% 

5. Flyban Insecticides Ltd having shares of 51% 

6. ACI Agro-chemicals Limited having shares of 90% 

7. Premiaflex Plastics Limited having shares of 80% 


8. ACI Motors Limited having shares of 75% 

9. Creative Communication Limited having shares of 60% 

10. ACI Logistics Limited having shares of 76% 

The following are the Joint Ventures/Associates of ACI Limited: 

1. Tetley ACI (Bangladesh) Limited (processor, blender and distributor of tea) with Tetley UK Ltd. 

2. Asian Consumer Care (Pvt.) Limited ( manufacturer of shampoo, hair oil, toothpaste etc.) with Dabur Intl. 

Dubai 

3. ACI Godrej Agrovet Private Limited ( poultry feed) with Godrej India 

4. Computer Technology Limited 

5. Stochastic Logic Limited 

Distribution of products or services 

Almost the entire products (97% of Unit -1 and 2 and 100% of Unit-3) are currently distributed/marketed by 

ACI Limited through ACI’s channel of depots and agents throughout the country under Marketing & 

Distribution agreement. ACI Limited has 19 depots as on 30 June 2008. ACI Limited also maintains a fleet of 

84 transport vehicles consisting of 68 vans and 16 micro vans. 

Competitive conditions in the business 

The competitiveness of the market may be gauged by the presence of giants like Syngenta Bangladesh 

Limited & Padma Oil Company (agents of FMC and BASF). Other competitors include Shetu Pesticides 

Limited, Bayer Crop Science, Auto Crop Care Ltd., Mc Donald (Bangladesh) Ltd. ( agent of Nishan Chemical 

Co.), Shetu Corporation Limited ( agent of Sumitomo Corporation ) and Setu Marketing Company ( SEMCO). 

Sources and availability of raw materials and the name of principal suppliers 

The raw materials used by the Company in the formulation processes are mainly basic chemicals, auxiliary, 

solvents and emulsifiers. About 20% of the raw materials are locally procured while about 80% is directly 

imported. For Crop Care & Public Health products, the company imports 22 chemical items while locally 

procures 12 items. For Aerosol, 12 items are imported and 5 items are locally sourced. For Mosquito Coil, 11 

items are imported and 12 items are locally purchased. The names of principal suppliers of raw materials are 

mentioned below: 

a) Pesticides for Crop Care business: 

Sl. No. Name of Supplier Address Raw Materials 

1 Aimco Pesticides Ltd. "Akand Jyoti" 8th Road, P.B. No. 

6822, Santacruz (East), 

Mumbai-400 055, India 

Butachlor, Carbendazim, Sulpher, 

Endosulfan, Carbofuran, 

Chloropyriphos, Acetamiprid 

2 Taicang Otsuka Chemical Co. 

Ltd. 

Shaxi, Taicang, Jiangsu Province, 

P R China 

3 Isagro Centro Uffici San Siro-Fabricato D-ala 3, 

Via calder, 21-20153, Milan-Italy 

4 Isagro (Asia) Agrochemicals Pvt. Ltd. 101, Solitaire Corporate Park, 151, M, 

Vasanji Road, Chakain Andheri 

(East), Mumbai 400 093, India 

5 Chimac Agriphar Rue de Renory, 26 B-4102 Ougree, 

Belgium 

6 Hui Kwang Corporation 17-10, Tzyy Lin Matau, Tainan 

Hsien, Taiwan, R.O.C. 

7 Cheminova A/S P O Box 9, DK-7620 Lemvig, 

Denmark 

Carbofuran, 

Mancozeb , Benalaxyl, 

Orthosulfamuron 

Phenthoate, Mancozeb, Dimetoate 

Cypermethrin, Diazinon 

Carbofuran, Mancozeb +, Metalaxyl, 

Butachlor, Cartap 

Malathion 

8 Cheminova India Ltd. Mumbai, India Chloropyriphos 

9 T. Stane & Co Ltd. 8/23-24, Race Course Road, 

Azadirachtin 

Coimbatore-641 018, India 

10 East Sun Chemical Co Ltd. 23/F Kinwic Centre, 32, Hollywood 

Road, Central Hong Kong, China 

Diazinon, Malathion, Carbofuran, 

Mancozeb 


Sl. No. Name of Supplier Address Raw Materials 

11 Tagros Chemicals India Ltd. "Jhavar Centre" Rajah Annamalai 

Building IV Fl72, Marshalls Road 

Cypermethrin, Propiconazole, 

Deltamethrin 

Egmore, Chennai 600 008, India 

12 Sundat (S) Pte Ltd. 26, Gul Crescent, Singapore Paraquat, 2,4 D amine, Lambda 

cyhalothrin, Primiphos methyl, 

Glyphosate 

13 Tide Int. Chemical Co. Ltd. Flat H&I, 19/F, Building 1, Huazhe Imidacloprid, Acephate, Cartap 

Plaza, Hangzhow (310006), China 

14 Sinochem Ningbo 21JianXia Street, Ningbo, China Abamectin, Propiconazole, 

Fenitrothion, Fipronil, Pretilachlor, 

Iprodione 

15 Jaishil Sulphur and Chemical 

Industries Ltd. 

16 Fulon Chemical Industrial Co. 

Ltd. 

b) Pesticides for Public Health business: 

212/213 Navjivan (Mandvi), 

125, Kazi sayed street, masjid, 

Mumbai,India 

Taiwan 

Sulpher 

Glyphasate 

Sl. Name of Supplier Address Raw Materials 

No. 

1 Sumitomo Corporation 

(Singapore) Pte. Ltd. 

20 Cecil Street# 23-02/08 and # 24- 

01/08 Equity Plaza, Singapore 

D-allethrin, Imiprothrin , 

Deltamethrin, Metofluthrin, 

2 Sinochem Ningbo Ltd. 21JianXia Street, Ningbo, China d-allethrin, S-bilothrin, 

Tetramethrin, Permethrin, d-trans 

alethrin, ETOC ,Sumithrin, 

3 Sundat (s) pte Ltd, Singapore 26, Gul Crescent, Singapore Pirimiphos-methyl, Temephos, 

Lambda cyhalothrin 

4 Sinochem Ningbo Ltd. India Phenthoate 

5 Cheminova India Limited Formulation Division 

Chlorpyrifos 

242-P, GIDC PANOLI, 

Dist. Bharuch, Gujarat, India 

6 Tagros Chemicals India Limited "Jhavar Centre" Rajah Annamalai 

Building IV Fl72, Marshalls Road 

Egmore, Chennai 600 008, India 

Deltamethrin, Cypermethrin 

Sources of requirement for, Power, Gas and Water 

a) Power: 

The Company has power supply from REB with 500 KVA connected load which may be expanded to 

1250 KVA line passed through the factory site. The factory is further equipped with 3 diesel generators 

of total 615 KVA capacity and 2 gas generator of 380 KW and 1030 KW (expected to be commissioned 

by the end of the year 2008) capacity. Application have already been made for increasing gas supply 

which is in active consideration of the Titas Gas Authority and it is expected that by the end of this year 

permission will be received from Titas Gas Authority. 

Currently Company’s operation is being run with diesel generators. We presume that if there are 

inadvertent delay in getting permission to laying gas line, operation will be continued with existing 

diesel generators along with enjoying power supply from REB. 

b) Gas: 

Titas Gas Transmission and Distribution Co. Ltd. supplies required gas for the plant from 50 psl main 

line. For reducing production cost, the Company is working to get connection from 150 psl main line of 

Titas Gas Transmission and Distribution Co. Ltd. 

c) Water: 

The Company requires huge amount of water. During the year 2007, the factory consumed about 

196,344 m 3 of water, which was lifted by Company’s owned/installed deep-tube-well/pump and 

supplied to different points with a network of distribution pipelines. The quality of water is good and 

useable for all purposes. 


Name of customers who purchase 10% or more of the Company’s products 

At present, Advanced Chemical Industries Ltd. (ACI Ltd.) is the buyer who purchases almost the entire 

products (97% of Unit - 1 and 2 and 100% of Unit - 3) of the company individually. In future, ACIFL will 

directly market its Crop-Care products thereby maintain better margins and more control over the market. 

Contract with principal suppliers/customers 

The Company has entered into an agreement with ACI Limited, the major features of which are as follows: 

a) ACI Limited markets and distributes the products of Crop Care and Public Health business 

manufactured by ACIFL. 

b) ACIFL acts as a contract manufacturer of Coil and Aerosol products. 

c) ACI Ltd. provides management services to ACIFL. 

The agreement shall be valid for a period of five (5) years (renewable with mutual understanding) since 1 

January 2005. 

Material Patents, Trade Marks, Licenses or Royalty Agreements 

The Company has 72 Registered Products out of which 52 are for Corp Care and 20 are for Public Health. It 

has Registration with PPW for the following pesticides for Crop-Care and Public Health products: 

List of the pesticides for crop care business 

Sl. No. BRAND NAME REG. NO. Sl. No. BRAND NAME REG. NO. 

1 Acamite 1.8 EC AP-1286 27 Gola 48 EC AP-1271 

2 Acithrin 2.5 EC AP-880 28 Goolee 3GR AP-778 

3 Aimchlor 5G AP-403 29 Goolee 50 SC AP-779 

4 Aimcozim 50 WP AP-375 30 Kelion 50 WG AP-1176 

5 Amcoround AP-411 31 Limithion 57 EC AP – 264 

6 Aimcoflo 80 WDG AP-869 32 Nimbecidine AP-373 

7 Brifur 5G AP – 324 33 Nemispore AP – 166 

8 Carbofuran 3G AP – 05 34 Nuben 72 WP AP-612 

9 Care 4G AP-593 35 Nuchlor 5G AP-846 

10 Care 50 SP AP-654 36 Nutap 4G AP-807 

11 Caught 10 EC AP-639 37 Platinum 20 SP AP-826 

12 Cidial 50 L AP – 124 38 Proud 25 EC AP-609 

13 Cidial 5G AP - 139 39 Paraxone AP-495 

14 Classic 20 EC AP – 345 40 Pyriban 15 G AP-516 

15 Conza 5 EC AP- 1047 41 Razthion 57 EC AP – 288 

16 Conazole 25 EC AP-1264 42 Razfuran 5G AP – 305 

17 Cythrine 10 EC AP-310 43 Razdan 10G AP – 282 

18 Diazonyl T 60 AP-283 44 Razland 80 WP AP-351 

19 Endosol 35 EC AP-1276 45 Rogor L 40 AP – 141 

20 Feniton 50 EC AP-1046 46 Sulphotox 80 WP AP- 357 

21 Fielder AP-494 47 Rovanon 50 WP AP-1385 

22 Fighter 2.5 EC AP-502 48 Super Guard 50EC AP-580 

23 Furacarb 3G AP – 214 49 Superheat 500 EC AP-697 

24 Furan 3G AP-1008 50 Sun-up AP-669 

25 Galben-M AP-374 51 Tiddo 20 SL AP-468 

26 Greesul 80 WDG AP-1048 52 Tidphate AP-473 


List of the pesticides for Public Health business 

Sl. No. BRAND NAME REG. NO. Sl. No. BRAND NAME REG. NO. 

1 ACI Mosquito Coil PHP-73 11 Cidial 50 L PHP – 22 

2 ACI King Mosquito Coil PHP-187 12 Classic 20 EC PHP-123 

3 ACI Mosquito Coil Super PHP-241 13 Cleaner 50 EC PHP-175 

4 ACI Mosquito Coil Super PHP-183 14 Delete 2.5 EC PHP-162 

Plus 

5 ACI Queen Mosquito Coil PHP-206 15 Keeper 10 EC PHP-168 

6 ACI Cockroach Spray PHP-237 16 Missile 50 EC PHP-184 

7 ACI Aerosol Insect Spray PHP-08 17 Relax Mosquito Coil PHP-136 

8 New ACI Aerosol Insect PHP-122 18 Relax Mosquito Mat PHP-145 

Spray 

9 ACI Liquid Insecticide PHP – 17 19 Relax Mosquito 

PHP-133 

Vaporizer 

10 ACI Mosquito Insecticide PHP-186 20 Shooter 2. 5 EC PHP-140 

The Company does not have any Licenses or Royalty Agreements with anyone. 

Employees Position as on 30.06. 2008 

(a) Total employee 790 

(b) Full time 201 

(c) Contractual 589 

Production capacity and current utilization 

The utilization of production capacity of the company is increasing gradually due to expansion of sales 

network, launching of new products and customer demand this has commensurate with cost control as well 

as efficient and effective measures taken by the management. The production capacity and current utilization 

of the factory is as under: 

(A) CC & PH 

i) Granular 

Year Business Department Unit Capacity/Year Production/Year % of 

Utilization 

2005 CC & PH Granular MT 9,000 4,782 53.13 



Up to June 

2008 

CC & PH Granular MT 13,500 4,756 70.46 

ii) Powder (Manual Line) 


Utilization 

2005 CC & PH Powder MT 1,500 454 30.27 

2006 CC & PH Powder MT 1,500 496 33.07 

2007 CC & PH Powder MT 1,500 671 44.73 

Up to June 

2008 

CC & PH Powder MT 1,500 812 108.27 


iii) Liquid 


Utilization 

2005 CC & PH Liquid MT 1,500 378 25.20 

2006 CC & PH Liquid MT 1,500 457 30.47 

2007 CC & PH Liquid MT 1,500 597 39.80 

Up to June 

2008 

CC & PH Liquid MT 1,500 375 50.00 

(B) Mosquito Coil 


Utilization 

2005 CB M Coil Carton 600,000 466,177 77.70 



Up to June 

2008 

CB M Coil Carton 1,056,,000 354,104 67.07 

(C) Aerosol, Air Freshener & Cockroach Killer 


Utilization 

2005 CB Aerosol pcs 7,560,000 1,767,691 23.18 

2006 CB Aerosol pcs 7,560,000 1,909,605 25.26 

2007 CB Aerosol pcs 7,560,000 2,723,588 36.03 

Up to June 

2008 

CB Aerosol pcs 7,560,000 1,932,632 51.13 

The capacity utilization reflects average production throughout the year which is significantly lower 

than the peak season capacity utilization. 

DESCRIPTION OF PROPERTY 

Information in respect of Plants and Property 

The Company has set up its factory at Rajabari, Sreepur, Gazipur. The factory is situated on a tract of land 

measuring about 21 acres only 1000 ft off the 30 ft wide Dhaka-Kapasia high-way connected by road, rail & 

river which offer easiest and economic transport for both way movement of materials and finished goods. The 

project site level is about 10 ft higher above the highest flood level so far recorded. The factory is surrounded 

by forest creating a natural aesthetic beauty. In addition, in order to make the factory more environmental 

friendly, about 1000 timber plants have been sowed/planted inside and around the factory. 

The existing factory buildings, made of pre-fabricated steel, and civil constructions including, office-blocks, 

guest house, cafeteria, labour office, sanitary blocks, medical centre, pump-house, generator block, effluent 

system and incineration treatment facilities, internal roads (106,185 sft) & drainages, foot-path, boundary 

wall/fencing, gardens etc. occupy about 42% of the total land mass leaving scope for substantial expansion in 

various areas of goods and service. The existing total covered area for production & warehouses is about 

2,10,000 sft. The Company has constructed its own link road from factory site to the Dhaka-Kapasia high way. 

The buildings and civil construction facilities are of top quality materials with aesthetic architectural designs 

conforming to the natural beauty of the site. 


Fixed Assets 

The Company possesses the following fixed assets : 

Sl. No. Name of Assets 

1 Land 

2 Building 

3 Plant 

4 Machinery & Equipment 

5 Electric & Other appliances 

6 Furniture & Fixture 

7 Vehicle 

8 Deep Tube-well 

Condition of property 

The conditions of the above property are physically good. 

Ownership of property 

The Company is the legal and absolute owner of all the fixed assets and properties. 

Lien status 

The tangible assets of the company are mortgaged to one of the lending banks’ namely Standard Chartered 

Bank against borrowing facilities enjoyed from them. 

Leased property 

The company doesn’t have any lease property. 

The written down value of the property, plant and equipment of the Company as of 30 June 2008 is as 

follows: 

(Amount in Taka) 

Sl. 

Written down value as 

Name of Assets 

No. 

of 30 June 2008 

1 Land 77,758,688 

Unit-1 73,689,139 

2 Building 

Unit-2 13,895,612 

Unit-3 12,883,220 

Sub-total 100,467,971 

Unit-1 18,804,425 

3 Plant 

Unit-2 49,015,144 

Unit-3 16,452,803 

Sub-total 84,272,372 

Unit-1 3,978,352 

4 Machinery & Equipment 

Unit-2 1,076,450 

Unit-3 255,788 

Sub-total 5,310,590 

Unit-1 2,888,961 

5 Electric & Other Appliance 

Unit-2 2,247,553 

Unit-3 1,901,668 


Unit-1 1,788,304 

6 Furniture & Fixture 

Unit-2 3,098,192 

Unit-3 486,849 


7 Vehicles Unit-1 663,530 

8 Deep Tube-well Unit- 1 20,400 

Total 280,905,078 


PLAN OF OPERATION AND DISCUSSION OF FINANCIAL CONDITIONS 

Internal and external sources of cash 

Internal Sources: 


Particulars 01.01.08 

to 

30.06.08 

01.01.07 

to 

31.12.07 

01.01.06 

to 

31.12.06 

01.01.05 

to 

31.12.05 

01.01.04 

to 

31.12.04 

01.01.03 

to 

31.12.03 

Paid-up Capital 250,000,000 250,000,000 250,000,000 250,000,000 250,000,000 66,000,000 

Share Money 

- - - - - 14,500,000 

Deposit 

Revaluation 65,495,689 65,495,689 65,495,689 65,495,689 65,495,689 - 

Reserve 

Tax Holiday 

- - 39,635,436 30,209,027 13,323,809 85,763,329 

Reserve 

Retained Earnings 373,578,114 278,771,668 173,611,158 115,769,982 55,031,802 97,770,765 

Total 689,073,803 594,267,357 528,742,283 461,474,698 383,851,300 264,034,094 

External Sources: 


Particulars 01.01.08 

to 

30.06.08 

01.01.07 

to 

31.12.07 

01.01.06 

to 

31.12.06 

01.01.05 

to 

31.12.05 

01.01.04 

to 

31.12.04 

01.01.03 

to 

31.12.03 

Long Term Loan - - - - - 3,750,000 

Deff. Tax Liability 74,856,290 76,787,324 77,049,191 73,152,354 67,804,115 - 

Total 74,856,290 76,787,324 77,049,191 73,152,354 67,804,115 3,750,000 

Material Commitments for Capital Expenditures 

The material commitments in terms of development activities with estimated cost, sources of fund, year of 

completion of the project with other relevant information are shown as follows: 


Sl. 

No. 

Name of Projects Cost Sources of Fund Year of 

Completion 

1 M Coil Expansion Project 30,770,480 Short Term Loan December 2008 

2 Gas Generator 26,486,000 Short Term Loan December 2008 

3 Gas Line Connection 47,58,103 Short Term Loan December 2008 

4 Jet Printer 2,500,000 Short Term Loan December 2008 

5 CC & PH 6,799,742 Short Term Loan December 2008 

Total 71,314,325 


Causes of any material changes in income, cost of goods sold, other operating expenses and net income 

Particulars 

01.01.08 

to 

30.06.08 

01.01.07 

to 

31.12.07 

01.01.06 

to 

31.12.06 

01.01.05 

to 

31.12.05 


01.01.04 01.01.03 

to 

to 

31.12.04 31.12.03 

Sale 1,069,475,034 1,383,118,708 923,862,592 807,101,129 716,849,826 649,772,561 

Cost of goods sold 854,681,630 1,170,928,968 743,306,060 631,958,750 527,878,463 530,832,577 

Operating profit 214,793,404 212,189,740 180,556,532 175,142,379 188,971,363 118,939,984 

Other income (Non- 

Operating) 

2,108,484 1,187,728 850,980 (30,646) 1,804,216 1,222,309 

Total income 216,901,888 213,377,468 181,407,512 175,111,734 190,775,579 120,162,293 

Administrative, selling 

and distribution 

23,375,569 52,727,239 52,615,437 41,661,924 81,708,092 8,917,997 

expenses 

Financial costs 35,446,938 41,794,221 20,408,472 17,690,192 15,588,105 15,741,103 

Profit before 

contribution to WPPF 

158,079,381 118,856,008 108,383,603 115,759,618 93,479,382 95,503,193 

Provision for 


7,903,968 5,942,801 5,419,180 5,787,981 4,673,969 4,923,115 

Net profit before tax 150,175,413 112,913,207 102,964,423 109,971,637 88,805,413 90,580,078 

Tax expenses 55,368,966 47,388,133 35,696,837 32,348,239 24,058,189 13,141,687 

Profit after tax 94,806,447 65,525,074 67,267,586 77,623,398 64,747,224 77,438,391 

The income of the Company has been increasing gradually without any significant fluctuation due to 

expansion of sales network, cost control and customers’ demand as well as efficient and effective measures 

taken by the management to its business. 

Seasonal aspect of business 

There are seasonal impact on few products, which are as follows : 

‣ Crop Care & Public Health - due to change in season and crop pattern. 

‣ Mosquito repellant- demand varies with weather and climate change. 

Known trends, events or uncertainties 

There is known tends in increasing demand for Company’s products because of crop pattern and seasonal 

variation. However uncertainties may arise from government policy, increased competition, natural 

calamities and political unrest. 

Changes in the assets to pay off liabilities 

None of the operating assets has been disposed off to pay off any liabilities of the Company. 

Loans taken from the holding/subsidiary company or loans given to those companies 

The company did neither take any loan from nor give any loan to its holding company during the last five 

years. 

Future contractual liabilities 

The Company is envisaging for future capital expenditure by setting up two projects namely – 

i) Sulpher 80 WDG 

ii) NPKS Fertilizer 

The above projects will be financed through bank loan. 


Estimated amount of future Capital Expenditure 

The Company has plan for future capital expenditure other than stated earlier under captioned “Material 

commitment for capital expenditure”. The detail of the future capital expenditure is given below: 

i) Name of the Project: Sulpher 80 WDG 

a. Products: 

Sulpher 80 WDG 

b. Production Capacity & Utilization 

UNIT 

Qty 

Capacity/yearly MT 4,500 

Production/yearly (initial) MT 2,000 

Utilization % 45 

The capacity utilization reflects average production throughout the year which is significantly lower than the 

peak season capacity utilization. 

c. Market 

Being an agricultural country, Bangladesh is very much dependent on fertilizer to produce various types of 

crops. The demand of food, protein and agricultural inputs including crop protection chemicals are increasing 

very significantly. Our soil is in extreme need of micronutrient and fertilizer. Sulpher 80 WDG is an important 

micronutrient for most of the crops and the usages of Sulpher 80 WDG is growing rapidly over the years. 

The total market demand of Sulpher 80 WDG in 2008 is estimated at 8,500 MT and the growth is around 20% 

over the last few years. Since the total market demand is fulfilled through import, there is a wide scope for 

local manufacturer to enter into this business to meet local demand. The establishment of such manufacturing 

plant will be able to decrease our foreign dependency on Sulpher. Moreover, the local manufacturers will 

enjoy a significant value addition to this product compared to importing from outside. ACIFL is capable to 

serve this market through establishing modern manufacturing facilities to produce Sulpher. ACIFL will 

market this product along with other agricultural products that it is already marketing. 

d. Project Cost and Mode of finance 

i. Project Cost 

Particulars 

Taka 

Land and Land development 4,000,000 

Building & Civil Works 32,000,000 

Plant & Machinery 80,000,000 

Preliminary & others 17,573,140 

Total Fixed Cost 133,573,140 

Working Capital 1,897,008 

Total Project Cost 135,470,148 

ii. Mode of Finance 

Own fund - 

Project Loan 135,470,148 

135,470,148 

Debt/ Equity Ratio 1 : 0 


e. Projected Income Statement Figures in Million Taka. 

Year-1 Year-2 Year-3 

Net Sales 213.00 290.00 375.00 

Cost of Goods Sold (87.16) (112.31) (137.46) 

Gross Margin 125.84 177.69 237.54 

Admin, Selling & Distribution Expenses (76.68) (104.40) (135.00) 

Profit before Interest and Tax 49.16 73.29 102.54 

Interest Expenses (23.15) (22.75) (22.11) 

Profit before WPPF & Tax 26.01 50.54 80.43 

Provision for WPPF (1.30) (2.53) (4.02) 

Profit before Tax 24.71 48.01 76.41 

Taxation (6.92) (13.44) (21.39) 

Profit after tax 17.79 34.57 55.02 

Gross Profit to Sales-% 59% 61% 63% 

Net Profit Before Tax to Sales-% 23% 25% 27% 

Net Profit to Sales-% 8% 12% 15% 

f. Implementation schedule of the project is as follows : 

ID 

Task Name 

May 

08 

Jun 

08 

Jul 

08 

Aug 

08 

Sep 

08 

Oct 

08 

Nov 

08 

Dec 

08 

Jan 

09 

Feb 

09 

Mar 

09 

Apr 

09 

A LAND PROCUREMENT 

1 Location Finalization 

2 Land Development 

B 

LAYOUT & DESIGN 

DEVELOPMENT 

1 Layout of the Factory 

2 Structural Drawing 

3 Machinery Drawing 

4 Prequalification of Contractor 

BOQ & work order to the 

5 

contractor 

C CIVIL CONSTRUCTION 

1 Civil Construction 

2 Electrification 

3 Drainage & Plumbing 

D MACHINERY PROCUREMENT 

1 Selection of the Machinery 

2 L/C Opening/Advance 

3 Shipment of the Machinery 

4 Arrival of Machinery 

5 Erection of Machinery 

6 Commissioning of the plant 

7 Trial Production 

8 Commercial Production 


ID 

Task Name 

May 

08 

Jun 

08 

Jul 

08 

Aug 

08 

Sep 

08 

Oct 

08 

Nov 

08 

Dec 

08 

Jan 

09 

Feb 

09 

Mar 

09 

Apr 

09 

E DEVELOPMENT OF RM/PM 

1 Qualitative & Quantitative Survey 

2 Pack Design 

3 Finalizing the RM/PM 

4 Order Placement for RM/PM 

5 Supply receive of the RM/PM 

F 

REGULATORY PERMITS 

1 Environmental Clearance 

2 Necessary Licenses 

ii) Name of the Project: NPKS Fertilizer 

a. Products: 

Compound Fertilizer NPKS 

b. Production Capacity & Utilization 

UNIT 

Qty 

Capacity/yearly MT 100,000 

Production/yearly (initial) MT 40,000 

Utilization % 40% 

The capacity utilization reflects average production throughout the year which is significantly lower than the 

peak season capacity utilization. 

c. Market 

The use of compound (NPKS) fertilizer is scientific, economic and beneficial for the crop. NPKS is a 

compound of fertilizers like TSP, Urea, DAP, MOP and Gypsum, which are mixed in certain ratio. It helps 

crop to have nutrient like nitrogen, phosphorus, Potassium and Sulpher altogether in a balanced way. Due to 

lower cost and easier application process, the use of the NPKS is increasing day by day. The total market of 

NPKS in 2007 was 400,000 MT with 30% average growth. The current local production of NPKS is 300,000 MT 

and the remaining balance of the quantity is imported to meet the demand. Due to crop diversification and 

comparing intensity, it is expected that the demand of the NPKS will continue to grow. Being market leader in 

the crop protection sector and having advantage of its strong distribution network, ACIFL will be able to 

capture substantial market share and help farmer with superior product quality. ACIFL will produce 100,000 

MT NPKS yearly, which will cover 25 % of the total market. 

d. Project Cost and Mode of finance 

i 

Project Cost 

Particulars 

Taka 

Land and land development 15,000,000 

Building & Civil Works 55,000,000 

Plant & Machinery 91,390,000 

Furniture 1,000,000 

Erection and Installation 10,000,000 

Lab and Bridge 6,000,000 

Vehicles 14,860,000 

Contingency and others 2,000,000 

Total fixed cost 195,250,000 

Working capital 81,620,417 

Total Project Cost 276,870,417 


ii 

Particulars 

Taka 

Mode of Finance 

Equity - 

Project Loan 276,870,417 

Debt/ Equity Ratio 1 : 0 

e. Projected Income Statement 

Figure in Million Taka 

Year-1 Year-2 Year-3 

Net Sales 1,200.00 1,680.00 2,025.00 

Cost of Goods Sold (1,020.00) (1428.00) (1721.25) 

Gross Margin 180.00 252.00 303.75 

Admin, Selling & Distribution Expenses (42.00) (61.60) (67.20) 

Profit before Interest and Tax 84.00 117.60 131.62 

Interest Expenses (54.21) (60.66) (62.84) 

Profit before WPPF & Tax 41.78 73.73 109.27 

Provision for WPPF (2.08) (3.68) (5.46) 

Profit before Tax 39.69 70.04 103.81 

Taxation (11.11) (19.61) (29.06) 

Profit after tax 28.57 50.43 74.74 

Gross Profit to Sales-% 15.00% 15.00% 15.00% 

Net Profit Before Tax to Sales-% 3.31% 4.17% 5.13% 

Net Profit to Sales-% 2.38% 3.00% 3.69% 

f. Implementation schedule of the project is as follows: 

ID 

Task Name 

Jan 

09 

Feb 

09 

Mar 

09 

Apr 

09 

May 

09 

Jun 

09 

Jul 

09 

Aug 

09 

Sep 

09 

Oct 

09 

Nov 

09 

Dec 

09 

A 

LAND 

PROCUREMENT 

1 Location Finalization 

2 Land Development 

B 

LAYOUT & DESIGN 

DEVELOPMENT 

1 Layout of the Factory 

2 Structural Drawing 

3 Machinery Drawing 

4 

5 

Prequalification of 

Contractor 

BOQ & work order to the 

contractor 

C CIVIL CONSTRUCTION 

1 Civil Construction 

2 Electrification 

3 Drainage & Plumbing 


ID 

D 

Task Name 

MACHINERY 

PROCUREMENT 

Jan 

09 

Feb 

09 

Mar 

09 

Apr 

09 

May 

09 

Jun 

09 

Jul 

09 

Aug 

09 

Sep 

09 

Oct 

09 

Nov 

09 

Dec 

09 

1 Selection of the Machinery 

2 L/C Opening/Advance 

3 

Shipment of the 

Machinery 

4 Arrival of Machinery 

5 Erection of Machinery 

6 

Commissioning of the 

plant 

7 Trial Production 

8 Commercial Production 

E 

DEVELOPMENT OF 

RM/PM 

1 

Qualitative & Quantitative 

Survey 

2 Pack Design 

3 Finalizing the RM/PM 

4 

5 

Order Placement for 

RM/PM 

Supply receive of the 

RM/PM 

F 

1 

REGULATORY 

PERMITS 

Environmental 

Clearance 

2 Necessary Licenses 

In addition to above two projects, Company will invest Tk. 56 million in 2010 to increase the existing 

production capacity of CC & PH business. 

VAT, Income Tax, Custom Duty and other Tax Liabilities 

• VAT 

There is no pending liability for VAT. 

• Income Tax 

The income tax for assessment year 2008-2009 has been assessed and no pending claim exists. 

• Custom Duty or other Tax liabilities yet to be paid 

There is no outstanding on account of custom duty or other tax liabilities to be paid. 

Sources from which VAT & Taxes etc are paid 

VAT & Taxes is being paid from ordinary business resources. 

Finance lease during last five years 

The Company took following vehicles as operating lease : 


Sl. Name of 

Lease 

Monthly Date of 

Assets 

Period 

No. Lessor 

Amount 

Rental Expiry 

1 IDLC Vehicle 1,776,400 4 Years 48,840 May 2007 


Financial and Lease Commitment during last five years 

• Financial Commitment 

As per audited account (Amount in Taka) 

Sl. 

No. 

Name of Bank Limit of Loan Rate of interest Outstanding 

Balance as of 

30 June 2008 

1 Standard Chartered Bank 520,000,000 11.50% to 12.50% 301,836,672 

2 The Hong Kong and Shanghai 350,000,000 11.50% to 12.50% 230,370,314 

Banking Corporation Ltd. (HSBC) 

3 Citibank N.A. 300,000,000 11.50% to 12.50% 80,255,568 

4 Commercial Bank of Ceylon 180,000,000 11.50% to 12.50% 134,694,879 

There is no case of loan default made by the Company from its inception. 

• Lease Commitment 

There is no lease commitment during last five years. 

Personnel related Schemes 

The Company has adequate programmes for human resource development. Company also has a welldesigned 

Compensation Plan for attracting highly capable professional staff with high degree of integrity. The 

compensation package include Salary and Allowances, Bonus, Leave Salary, Gratuity, Provident Fund and 

performance based reward scheme etc. The existing Compensation Plans are as follows: 

(a) Salary/Allowances : 

This includes basic pay, house allowance, conveyance/transport allowance, medical allowances. The 

amount varies for each grade of services. 

(b) Traveling : 

This includes fare and daily allowances for each grade of services. 

(c) Bonus : 

This is paid on the basis of 2 month’s basic pay for each Eid Festival. There is an incentive Bonus 

Scheme based on performance. 

(d) Provident Fund : 

The Company has already set up Provident Fund as contributory by the employee at the rate of 10% of 

the basic pay and equal amount by the Company. Company’s contribution would be payable on 

completion of minimum 5 years service. 

(e) Gratuity : 

Gratuity Plan is a non-funded liability payable to an outgoing employee on completion of minimum 8 

years service at the rate of ½ month’s Basic pay (last pay) for every completed year of service for 8-12 

years. For more than 12 years’ service it is one month’s pay and for 16 years/over it is 2 months’ pay. 

f) WPPF: 

The Company has created a fund for workers as Workers’ Profit Participation Fund and 5% of profit 

before charging this rate has been transferred to this fund. 

g) Leave Salary : 

As a non-funded scheme, leave is allowed at the rate of one day for 14 days’ service. Leave is 

encashable at the discretion of management up to maximum accumulation of 96 days. 


Break down of all expenses including fee of Issue Manager and Underwriters 

I. Fee of Issue Manager : Tk. 7.50 Lac. 

II. Underwriting Commission : N/A 

Revaluation of Assets 

The assets of the Company were revalued in the year 2004 by a firm of professional valuers named Asian 

Surveyors Ltd. on the basis of open market value. The valuation has been made for reflection of actual value 

of its assets. The revalued amount was incorporated in the accounts during the accounting year 2004. The 

assets have been revalued as follows: 

Name of the Assets 

Balance 

as at 

1 Jan 

2004(Cost) 

Addition 

during 

the year 

(Cost) 

Revaluation 

Surplus/Loss 

Balance as at 

31 Dec 2004 

Taka Taka Taka Taka 

Land : 

Unit – 1 13,737,663 - 61,312,837 75,050,500 

Building: 

Unit – 1 

Unit – 2 

Unit – 3 

53,160,374 

13,217,220 

9,006,672 2,698,259 

6,634,644 

2,472,218 

848,461 

59,795,018 

15,689,438 

12,553,392 

Plant: 

Unit – 1 

Unit – 2 

Unit – 3 

Equipment & Machinery: 

Unit – 1 

Unit – 2 

Electric & other appliances: 

Unit – 1 

Unit – 2 

Unit – 3 

Furniture & Fixtures: 

Unit – 1 

Unit – 2 

Unit – 3 

30,243,910 

47,451,884 

8,516,043 

4,925,052 

56,150 

2,616,250 

785,576 

- 

2,380,936 

1,331,461 

138,390 

2,580,772 

652,919 

169,213 

555,844 

- 

68,760 

- 

20,500 

115,850 

15,470 

- 

8,193,868 

6,744,849 

16,626,917 

323,824 

77,018 

704,065 

(363,947) 

- 

160,215 

(266,855) 

(18,310) 

41,018,550 

54,849,652 

25,312,173 

5,804,720 

133,168 

3,389,075 

421,629 

20,500 

2,657,001 

1,080,076 

120,080 

Vehicles: 

Unit – 1 2,686,000 - 1,184,348 3,870,348 

Deep Tube-well: 

Unit – 1 140,000 - 34,000 174,000 

Leased Asset -Vehicle 

Unit – 1 1,776,625 - - 1,776,625 

At 31 December 2004 192,170,206 6,877,587 104,668,152 303,715,945 

At 31 December 2003 180,655,730 9,737,851 - 190,393,581 

Transaction with holding or subsidiary companies which have been taken place during last five years of 

the publication of Information Documents 

The Company carried out a number of numerous transactions under the Marketing and Distribution 

Agreement with its holding parent company (ACI Ltd.) during last five years. The year ending balance with 

ACI Ltd. was as follows : 

Particulars 30.06.2008 31.12.2007 31.12.2006 31.12.2005 31.12.2004 31.12.2003 

Due from ACI 807,887,512 726,212,549 363,836,431 256,613,691 114,553,884 155,930,174 

Ltd. 

The above balances is due on account of enjoying normal supplier credit facility by ACI Ltd. granted by 

ACIFL for selling the goods of Crop Care and Public Health products. 


A Special Report from the Auditors regarding any allotment of shares to the Directors and Subscribers for 

any consideration otherwise than cash 

Auditors certificate for issue of shares otherwise than for cash 

We certify that no other share was issued otherwise than for cash upto 30 June 2008 except 1,250,000 bonus 

shares @ Tk. 100 each which was approved by the shareholders in the 9 th Annual General Meeting held on 

2 May 2005. 

Dhaka, 25 September 2008 

Sd/- 

Rahman Rahman Huq 

Chartered Accountants 

Material information having an impact on the affairs of the company 

We furnish the following information, which has an impact on the affairs of the Company: 


Particulars 

01.01.08 

to 

30.06.08 

01.01.07 

to 

31.12.07 

01.01.06 

to 

31.12.06 

01.01.05 

to 

31.12.05 

01.01.04 

to 

31.12.04 

01.01.03 

to 

31.12.03 

Sale 1,069,475,034 1,383,118,708 923,862,592 807,101,129 716,849,826 649,772,561 

Operating 

expenses 

23,375,569 52,727,239 52,615,437 41,661,924 81,708,092 8,917,997 

Net profit before 

tax 

150,175,413 112,913,207 102,964,423 109,971,637 88,805,413 90,580,078 

Net profit after 

tax & WPPF 

94,806,447 65,525,074 67,267,586 77,623,398 64,747,224 77,438,391 

Particulars 

Statements of changes in shareholders’ equity 

for the half year ended 30 June 2008 

Share 

capital 

Share 

money 

deposit 

Revaluation 

reserve 

Tax 

holiday 

reserve 

Retained 

earnings 


Balance at 31 December 

2006 

250,000,000 - 65,495,689 39,635,436 173,611,158 528,742,283 

Net profit after tax - - - - 51,404,533 51,404,533 

Transferred to tax 

holiday reserve 

- - - 1,129,128 (1,129,128) - 

Transferred from tax 

holiday reserve 

- - - (40,764,564) 40,764,564 - 

Balance at 30 June 2007 250,000,000 - 65,495,689 - 264,651,127 580,146,816 

Balance at 31 December 

2007 

250,000,000 - 65,495,689 - 278,771,668 594,267,357 

Net profit after tax - - - - 94,806,447 94,806,447 

Balance at 30 June 2008 250,000,000 - 65,495,689 - 373,578,115 689,073,804 

Total 


DIRECTORS AND OFFICERS 

Name, age and position of directors of the Company and any person nominated to be a director: 

Sl. 

No. 

Name of the Directors Age Present Position Representative of 

1 Mr. M Anis Ud Dowla 72 

Chairman 

& 


Not applicable 

2 Mrs. Najma Dowla 62 Director - do - 

3 Dr. Arif Dowla 39 Director - do - 

4 Ms. Shusmita Anis Salam 42 Director - do - 

5 Mr. Wajed Salam 47 Director - do - 

6 Dr. F H Ansarey 55 Director - do - 

7 Ms. Sheema Abed Rahman 52 

Director 

& 


- do - 

Date of becoming first Directors and date of expiry of current term 

Sl. 

No. 

Name 

1 Mr. M Anis Ud Dowla 

Present Position 

Chairman 

& 


Date of First 

Directorship 

29-10-95 

2 Mrs. Najma Dowla Director 18-03-01 

3 Dr. Arif Dowla Director 09-02-03 

4 Ms. Shusmita Anis Salam Director 09-02-03 

5 Mr. Wajed Salam Director 28-04-05 

Expiry of current term 

One third of total directors take 

retirement at every Annual 

General Meeting and re-elect is 

eligible as seniority. 

6 Dr. F H Ansarey Director 30-11-95 

7 

Ms. Sheema Abed 

Rahman 


& 


28-04-05 


Involvement of Directors with other companies 

Sl. 

No. 

1 

2 

3 

Name 

Mr. M Anis Ud Dowla 

Mrs. Najma Dowla 

Dr. Arif Dowla 

Name of other company where the 

Director is involved 

Advanced Chemicals Industries Ltd. 

ACI Salt Limited 

ACI Foods Limited 

ACI Pure Flour Limited 

ACI Motors Limited 

ACI Logistics Limited 

ACI Agrochemicals Ltd. 

Stochastic Logic Limited 

Apex Leather Craft Limited 

Consolidated Chemicals Limited 

Flyban Insecticides Limited 

Premiaflex Plastic Limited 

Creative Communications Ltd. 

Intesa Communication Limited 

Tetley ACI Bangladesh Limited 

ACI Godrej Agrovet Pvt. Ltd. 

Pioneer Insurance Co. Ltd. 

Credit Rating Agency of Bangladesh 

Ltd. 

ACI Foundation 
























Creative Communications Ltd. 

Intesa Communication Limited 

Tetley ACI Bangladesh Limited 


Pioneer Insurance Co. Ltd. 

Mutual Trust Bank Limited 


Position 

Chairman and Director 





Chairman and Director 


Nominee of ACI Limited. 


Chairman & Managing Director 






Chairman 

Nominee of Consolidated Chemicals 

Ltd. 






























Nominee of ACI Foundation 




Sl. 

No. 

4 

Name 

Ms. Shusmita Anis 

Salam 

5 Mr. Wajed Salam 

6 Dr. F H Ansarey 

7 


Rahman 

Name of other company where the 






Homeland Capital Corp. 










Position 




Nominee of ACI Foundation 











Involvement of Directors with Listed Companies in terms of dividend & category 

Sl. 

Name of the Company where the 

Listing category in 

Name 

Position 

No. 


terms of dividend 

1 

Mr. M Anis Ud Dowla Advanced Chemicals Industries Ltd. Chairman A 

Pioneer Insurance Company Limited Director A 

2 Mrs. Najma Dowla Advanced Chemicals Industries Ltd. Director A 

Managing 


A 



3 

Pioneer Insurance Company Limited Director A 

Mutual Trust Bank Limited Director A 

4 


Salam 

Advanced Chemicals Industries Ltd. Director A 

5 Mr. Wajed Salam Advanced Chemicals Industries Ltd. Director A 

6 


Rahman 

Advanced Chemicals Industries Ltd. Director A 

Family relationship between Directors and Officers 

Sl. 

No. 

1 

Name Director Relation 


2 Mrs. Najma Dowla 

3 

4 



Salam 




Ms. Shusmita Anis Salam 

Mr. Wajed Salam 

















Wife 

Son 

Daughter 

Son-in-law 

Husband 

Son 

Daughter 

Son-in-law 

Father 

Mother 

Sister 

Brother–in-law 

Father 

Mother 

Brother 

Husband 

Father-in-law 

Mother-in-law 

Brother-in-law 

Wife 

Position in the 

Company 

Shareholder, 

Director, 


and Chairman 

Shareholder 

and Director 

Shareholder 


Shareholder 


Shareholder 



Short Bio-Data of Directors 

MR. M ANIS UD DOWLA 

Name : M Anis Ud Dowla 

Father’s name : Late Khan Bahadur Md. Ismail 

Permanent Address : House # 18/B, Road # 126, Gulshan, Dhaka-1212 

Present Address : House # 18/B, Road # 126, Gulshan, Dhaka-1212 

Office Address : ACI Centre, 245 Tejgaon Industrial Area, Dhaka-1208 

Date of Birth : 1 March 1937 

Age : 72 years 

Religion : Islam 

Education : Masters in Public Administration 

Other Positions : Member, Executive Committee, Metropolitan Chamber of 

Commerce & Industry 

Personal Profile : As below 

Mr. M Anis Ud Dowla, the Chairman of ACI Limited, is one of the most successful personalities in 

Bangladesh business circle. He has maintained a high profile, and has provided leadership to 

business community in different capacities. Mr. Dowla served in the British Oxygen Group of UK in 

Pakistan, Bangladesh and Kenya for 27 years, including 12 years as Managing Director of Bangladesh 

Oxygen Ltd. In 1987, he became the Group Managing Director of the three ICI companies in 

Bangladesh. 

With experience gathered while working with British Multi-nationals for over 32 years, Mr. Dowla 

has continued to maintain the multinational culture and management style in ACI, with special 

emphasis on quality, productivity and customer services. 

Mr. Dowla was the President of Metropolitan Chamber of Commerce & Industry for three terms in 

1975, 1976 & 1977 and the President of Bangladesh Employees Federation for four terms in 1976, 1977, 

1994 and 1995. 

Mr. M Anis Ud Dowla was exposed to lots of international training programme. 

MRS. NAJMA DOWLA 

Name : Najma Dowla 

Husband : Mr. M Anis Ud Dowla 

Present Address : House # 18/B, Road # 126, Gulshan, Dhaka-1212 


Date of Birth : 4 October 1946 



Education : Graduate 


Mrs. Najma Dowla joined ACI Limited as Director on 6 January 1996. She is also Director of Subsidiary 

Companies of ACI Limited, Consolidated Chemicals Limited, ACI Salt Limited, Stochastic Logic Limited, 

Premiaflex Plastics Limited, ACI Pure Flour Limited, ACI Foods Limited, ACI Motors Limited, Creative 

Communication Limited and Apex Leather Craft Limited. 


DR. ARIF DOWLA 

Name : Dr. Arif Dowla 

Father’s Name : Mr. M Anis Ud Dowla 

Present Address : Unique Corner, 3rd Floor, House # 38, Road # 63, Gulshan, Dhaka-1212 


Date of Birth : 9 April 1970 



Education : Doctor of Philosophy in Mathematics, University of California, San Diego 


Dr. Arif Dowla took over the charge of Managing Director of ACI limited in June 2005. Before that he 

was Deputy Managing Director of the same company. He is also Vice Chairman of Mutual Trust 

Bank and board member of Pioneer Insurance Limited. He obtained PhD degree in Mathematics from 

the University of California, San Diego. He is also a member of the American Mathematical Society. 

His doctoral dissertation was on non-stationary stochastic processes, which is a field of study related 

to probability theory and statistics. His thesis advisor was the renowned Time Series and Random 

Fields analyst Professor Dimitris N. Politis. 

Dr. Arif Dowla was exposed to lots of international training programme. 

MS. SHUSMITA ANIS SALAM 

Name : Shusmita Anis Salam 

Husband’s Name : Mr. Wajed Salam 

Father’s name : Mr. M Anis Ud Dowla 



Date of Birth : 26 August 1966 



Education : Fine Arts Graduate in Graphics Design from San Jose, California, U.S.A. 


A Graphic Designer and settled in U.S.A. She was inducted as Director in ACI Limited in the year 

2000. 

MR. WAJED SALAM 

Name : Wajed Salam 

Father’s Name : Late Abdus Salam 





Education : Bachelors in Economics from University of California, Los Angeles, U.S.A. 


He is engaged in real estate business in USA. He was inducted as Director in ACI Limited in the year 

2001 


DR. F H ANSAREY 

Name : Dr. F H Ansarey 

Father’s Name : Late Md. Nazrul Islam 

Present Address : 335 South Paikpara, Mirpur, Dhaka 1216 


Date of Birth : 22 April 1954 



Education : Doctor of Philosophy in Ecology. 


Dr. F H Ansarey, a Ph.D. holder in Ecology, brings with him high profile management strength for a 

highly techno-dependent company like this. His wide experience of working in MNCs like Ciba- 

Geigy and local corporate like Shetu Corporation in the filed of Chemicals world gives confidence in 

realizing the business potential of this enterprise. 

MS. SHEEMA ABED RAHMAN 

Name : Sheema Abed Rahman, ACS 

Husband’s Name : Mr. Abedur Rahman 

Father’s Name : Late Syed Ashraf Alam 

Present Address : Flat # F, House # 03, Road # 03, Sector # 04, Uttara, Dhaka-1230. 


Date of Birth : 9 July 1957 


Education : Post Graduate and Diploma in Personnel Management, 

Bangladesh Institute of Management. 


Ms. Sheema Abed Rahman joined the Company in the year 1987. Prior to joining ACI she worked for 

BAT for 14 years. During these 35 years of service her major contribution is in Human Resource 

Management. She has done her Bachelor of Arts from Dhaka University with Post Graduation in 

Human Resource Management. 

She is also a fellow member of the Institute of Chartered Secretaries and Managers of Bangladesh. She 

was inducted in the Board as a Director in the year 2001. 

Holding of 5% or more shares in the paid-up capital by the directors or shareholders of the issuer is loan 

defaulter in terms of the CIB report of Bangladesh Bank 

Neither the Company nor any of its Directors or shareholders who hold 5% or more shares in the paid up 

capital of the issuer is loan defaulter in terms of the CIB report of Bangladesh Bank. 


Description of Senior Executives and Officers 

Sl. 

No. 

1 

2 

Name 

Position 

Date of Educational 

joining qualification 

Mr. M Anis Ud Dowla Managing Director, 29-10-95 MPA (Karachi) 

. 

Dr. F H Ansarey Director , In-charge 30-11-95 Doctorate in 

Ecology 

Job experience 

(last five Years) 

Chairman & 

Managing 


Executive 


3 

Mr. Muallem A 

Choudhury 

Chief Financial Officer 

(CFO) 

01-06-05 FCA Finance, 

Planning & 

Material 

Management 

4 

Ms. Seema Abed 

Rahman 

Director & 


28-04-05 Post Graduate Company 

Secretary 

5 

Mr. Md Abdul Hamid 

6 Mr. Zubair Mahmud 

General Manager 

(Operation ) 

Production Engineer 

(Head of Engineering 

Dept.) 

01-01-02 B. Sc Engineer 

(Mech.) 

14-03-03 B.Sc Engineer 

(Mech.) 

Factory 

Manager 

Electro- 

Mechanical 

Engineer 

7 

Dr. Abdus Salam 

Bhuyan 

Quality Control 

Chemist (Head of QC 

Dept.) 

23-12- 07 PHD from BAU DAE UAO 

8 Mr. Sheik Muzaffar 

Hassan 

Production In-charge 

01-01-02 M. Sc. 

(Organic Chemistry) 

1997 SMAH 

Ltd. 

9 Mr. Ahmed Zubair 

Asst. Manager, 

Warehouse (Head of 

Warehouse) 

23-07-94 B. Sc Working in the 

Company Since 

1995 

10 

Mr. M. Mizanur 

Rahman Sarker, Maj. 

(Retd.) 

Sr. Admin Officer 23-09-04 B.A. Bangladesh 

Army. 

11 Mr. Golam Mostafa 

Sr. Accounts Officer 01-10-04 M.Com, Accounting 

CMA Partly 

Qualified 

Worked with 

Eurasia 

Enterprise. 


INVOLVEMENT OF OFFICERS AND DIRECTORS IN CERTAIN LEGAL PROCEEDINGS 

No Directors or Officer of the company was involved in any of the following types of legal proceedings in the 

past ten years: 

• Any bankruptcy petition filed by or against any company of which any officer or director of the issuer 

company filling the prospectus was a director, officer or partner at the time of the bankruptcy; 

• Any conviction of director, officer in criminal proceedings or any criminal proceedings pending 

against him; 

• Any order, judgment or decree of any Court of competent jurisdiction against any director, officer 

permanently or temporarily enjoying, barring, suspending or otherwise limiting the involvement of 

any director or officer in any type of business, securities or banking activities. 

• Any order of the Securities and Exchange Commission or other regulatory authority or foreign 

financial regulatory authority suspending or otherwise limiting the involvement of any director or 

officer in any type of business of securities or banking activities. 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

The company does not have any transaction during the last two years, or any proposed transaction, between 

the issuer and any of the following persons: 

• Any director or executive officer of the issuer. 

• Any director or officer. 

• Any person owning 5% or more of the outstanding shares of the issuer. 

• Any member of the immediate family (including spouse, parents, brothers, sisters, children, and inlaws) 

of any of the above persons. 

• Any transaction or arrangement entered into by the issuer or its subsidiary for a person who is 

currently a director or in any way connected with a director of either the issuer company or any of its 

subsidiaries/holding company or associate concerns, or who was a director or connected in any way 

with a director at any time during the last three years prior to the issuance of the prospectus, except 

disclosure under caption ‘related party transaction’ in Note 23 of Audited Financial Statement, 

‘transaction with the directors and subscribers to the memorandum’ and “Executive 

Compensation” part of Information Document. 

• Loan given/taken 

No such loan was taken or given from or to directors or any person connected with the directors of 

ACIFL. 

• Interests and Facilities enjoyed by the Director 

All Directors are getting dividend, bonus and right shares in due course and none of the directors are 

taking monthly salary except Dr. F H Ansarey. 


EXECUTIVE COMPENSATION 

• Name and designation with the amount of remuneration paid to the top ten salaried officers in the 

last accounting year : 


Remuneration 

Sl. 

01.01.2008 01.01.2007 

Name 

Designation 

No. 

to 

to 

30.06.2008 31.12.2007 

1 Dr. F H Ansarey Executive Director 820,260 1,713,720 

2 Mr. Md. Abdul Hamid General Manager 

568,902 1,200,932 

(Operation) 

3 Mr. Sheikh Muzaffar Production Manager 245,685 520,184 

Hasan 

4 Mr. Zubair Mahmud Asst. Manager, Engineering 184,115 391,002 

5 Mr. Ahmed Zubayer Asst. Manager, Warehouse 163,127 345,720 

6 Mr. Md.Muzibur Rahman Senior Production Officer 104,486 226,278 

7 Mr. Ohiduzzaman Khan Maintenance Engineer 104,392 224,168 

8 Md. Anowar Hossain Logistic Officer 54,994 114,792 

9 Md. Mizanur Rahman Senior Administrative officer 99,919 205,683 

Sarker 

10 Md. Golam Mustafa Accounts Officer, ACIFL 76,051 156,543 

• Aggregate amount of remuneration paid to all Directors & Officers as a group during last accounting 

year: 


Remuneration & Salary 

Sl. 

No. 

Particulars 

01.01.2008 

to 

30.06.2008 

01.01.2007 

to 

31.12.2007 

1 Directors 820,260 1,713,720 

2 Officers & Staff 10,066,869 18,881,317 

• Remuneration paid to any Director who was not an officer during the last fiscal year 

The Company did not pay any remuneration to any director who was not an officer of the company 

during the last accounting year. 

• Any contract with any Officer or Director providing for payment of future compensation 

The Company has no contract with any director/officer for providing the payment of future 

compensation. 

• Company’s plan to increase substantially remuneration to Officers & Directors during the current 

year 

The Company does not have any plan to substantially increase remuneration to Officers/Directors 

except normal & additional annual increments/awards of salaries/allowances as per Service 

Regulations/Articles of Association and in line with the performance achieved by individuals. 

OPTIONS GRANTED TO OFFICERS, DIRECTORS AND EMPLOYEES 

The Company has no option plans for Officers, Directors or Employees or other employees of the 

Company. 


TRANSACTION WITH PROMOTERS TO THE MEMORANDUM 

• The Company has not conducted any transaction with anyone of its promoters nor exchanged 

anything for any value received except payment of fees for attending meetings of the Board of 

Directors/Committee. The company has not also received anything from promoters except fund 

against allotment of Shares taken up as per subscription requirement of Memorandum and Articles of 

Association. 

• Promoters have not transferred any assets to the Company except deposit of Cash funds for proposed 

allotment of Shares as per Memorandum and Articles of Association. 

Statement of net asset value per share: 

TANGIBLE ASSETS PER SHARE 

Net assets are valued on historical cost/revaluation basis “reduced by depreciation provision” and 

considered on the basis of audited balance sheet as at 30 June 2008 as under: 

ASSETS 

Amount (Taka) 

Fixed assets 

Property, plant and equipment 280,905,080 

Capital work-in-progress 66,614,372 

Current Assets 

Inventories 450,231,305 

Trade debtors 4,739,162 

Other receivables 2,841,943 

Advance, deposit and prepayments 82,429,336 

Due from inter-company 807,937,372 

Cash and bank balance 20,246,710 

Total assets 1,715,945,280 

LIABILITIES 

Current liabilities 

Bank overdraft 62,198,281 

Short term loan 684,959,151 

Withholding tax and VAT 105,651 

Trade creditors and accruals 97,829,299 

Provision for tax 106,922,803 

Deferred tax liabilities 

Deferred tax liability 74,856,290 

Total liabilities 1,026,871,476 

Net Asset Value (NAV) 689,073,804 

Number of Shares 25,000,000 

Net Asset Value Per Share 27.56 

The net assets value (NAV) is also equivalent to the shareholder's equity consisting of paid-up capital, revaluation 

reserve and retained earnings as follows: 

Particulars 

Amount (Taka) 

Share capital 250,000,000 

Revaluation reserve 65,495,689 

Retained earnings 373,578,115 

Total Shareholder's Equity 689,073,804 

Number of Shares 25,000,000 

Net Asset Value Per Share 27.56 


Sd/- 




OWNERSHIP OF COMPANY’S SECURITIES 

The Company’s shareholding position as on 30 June 2008 is as follows: 

Sl. 

No. 

Names/Addresses of Shareholders Number of Shares Amount Paid up Percentage (%) 

1 ACI Limited 

21,737,500 217,375,000 86.95 

ACI Centre, 245 Tejgaon I/A 

Dhaka 1208 

2 Mr. M Anis Ud Dowla 

2,502,500 25,025,000 10.01 

House No. 18B, Road No. 126 

Gulshan, Dhaka 1212 

3 Mrs. Najma Dowla 

2,500 25,000 0.01 

House No. 18B, Road No. 126 

Gulshan, Dhaka 1212 

4 Dr. Arif Dowla 

1,000 10,000 0.0004 

Unique Corner ( 3 rd floor) 

House No 38, Road No.63 

Gulshan Model Town, Dhaka-1212 

5 Ms. Shusmita Anis Salam 

1,000 10,000 0.0004 





1,000 10,000 0.0004 




7 Dr. F H Ansarey 

335 South Paik Para 

Mirpur, Dhaka 1216 

752,500 7,525,000 3.01 

8 Ms. Sheema Abed Rahman 

Flat # F, House # 33, Road # 06, 

Sector # 04, Uttara, Dhaka-1230 

1,000 10,000 0.0004 

9 Mr. M Mosaddek Hossain 

5/8 (1 st Floor), Block # C, Lalmatia, 

Dhaka-1206 

1,000 10,000 0.0004 

Total 25,000,000 250,000,000 100.00 

Number of Shares owned by the top ten salaried officers, directors and all other officers 

The number of shares owned by the top ten salaried officers and directors are as follows: 

Sl. No. Name Designation No. of Shares 

1 Dr. F H Ansarey Director, In-charge 752,500 

DESCRIPTION OF SECURITIES OUTSTANDING OR BEING OFFERED 

Dividend, Voting and Preemption Right 

Voting: 

• On a show of hand every member present in person shall have one vote and upon a poll every 

member present in person shall have one vote for every share held by him. 


• Any objection as to the admission or rejection of a vote, either on a show of hands, or on a poll made 

in due time , shall be referred to the Chairman of the meeting who shall forth with decide the same, 

and such decision made in good faith shall be final and conclusive. 

Conversion and liquidation rights of any preferred stock outstanding or being offered: 

Dividend: 

If the company at any time issues convertible preference shares or Debenture or Bond with the 

consent of SEC, such holders of securities shall be entitled to convert such securities into ordinary 

shares if it is so determined by the company. 

Subject to the provisions of the Companies Act, 1994, Articles of Association of the Company and 

other relevant Rules in force, the shares, if any, of the company are freely transferable, the company 

shall not charge any fee for registering transfer of shares. 

• The Company in General Meeting may declare a dividend to be paid to the members according to 

their rights and interests in the profits and may fix the time for payment. No larger dividend shall be 

declared than is recommended by the Directors but the Company in General Meeting may declare a 

smaller dividend. 

• No dividend shall be payable except out of profits of the Company of the year or any other 

undistributed profits, and dividend shall not carry interest as against the Company. 

• The declaration of the Directors as to the amount of net profits of the Company shall be conclusive. 

• The Directors may from time to time pay to the members such interim dividend as in their judgment 

the position of the Company justifies. 

• A transfer of shares shall not pass the right to any dividend declared thereon before the registration of 

transfer. 

• Any one of several who are registered as the joint holders of any shares may give effectual receipt for 

all dividends and payments on account of dividend in respect of such shares. 

• All dividends unclaimed for one year after having been declared may be invested or otherwise made 

use of by the Directors for the benefit of the Company until claimed. Unclaimed dividend shall not be 

forfeited by the Company. 

Others materials rights of common stockholders: 

The shareholders shall have the right to receive all periodical reports and statements, audited as well as unaudited, 

publish by the company from time to time. The Directors shall present the financial statements as 

required under the Law and International Accounting Standards. Financial Statements will be prepared in 

accordance with International Accounting Standards, consistently applied throughout the subsequent periods 

and present with the objective of providing maximum disclosure as per law and International Accounting 

Standards to the Shareholders regarding the Financial and operational position of the company. 

In case of any declaration of stock dividend by issue of bonus shares, all share holders shall be entitled to it in 

proportion to their shareholdings on the date of book closure/record date for the purpose. 

The shareholders holding not less than 10% of the issued/fully paid up capital of the company shall have the 

right to requisition Extra-ordinary General Meeting of the Company as provided under section 84 of the 

Companies Act, 1994. 

DEBT SECURITIES 

Terms and Conditions of debt securities that the company may have issued or to be issued 

The company did not issue any debt securities and has no plan to issue any debt securities within next six 

months. 


FUTURE PROSPECTS 

Food Security is the number one challenge for the world. This situation is more critical for Bangladesh. The 

country occupies 1/50 th of the world population on only 1/3000 th of the world land area. Having the highest 

population density this issue has the priority to address in Bangladesh. Our land and farmers has an ability to 

transform us from the major food importer to food exporter. ACI has realized this from the very beginning of 

its operation. ACIFL is the pioneer for agriculture input business to provide complete solution for farmers’ 

requirement. ACIFL is the only organized and professional business house exploring the huge opportunity of 

Agriculture business. Throughout the world there is a growing interest in investing in agriculture sector 

and Bangladesh is not an exception. ACIFL wants to play a dominant role in this growing sector by 

investing in agri-related sector. 

To improve the food production farmers need to have proper crop inputs which include seeds, fertilizers, and 

crop care products followed by excellent agricultural practices. ACIFL’s diversified role in agri-sector will 

directly help the “Farmer Community” in increasing their crop productions by providing precise form of crop 

care and related products. We have around 350 field forces with strong agricultural background including 

agronomists, botanists etc. Our field forces are situated throughout the country to assist the farmers in: 

• Improving agricultural practices including mechanisation. 

• Suggesting the use of right doses of agrichemicals. 

• Helping farmers to get proper information on soil conditions. 

• Educating farmers with appropriate agricultural knowledge. 

• Facilitating farmers to get the right price of their crops. 

All these have made ACIFL the right choice for the farmers and thereby a dominant player in agri-sector. The 

philosophy of our business is to give the farmers a total solution of their need and building a long term 

relationship with them. ACIFL considers that increasing food production is its social commitment and 

therefore it will utilize its resources to achieve the greater success in making our country food sufficient. We 

have strong team of dedicated professionals with vast experience and strong track records to make this 

possible. Our top level management has the ideal strategic vision and competence to guide the team to reach 

its target. 

The future of ACIFL business will be mainly concentrated in the following areas: 

(1) Crop Care products manufacturing and marketing- 

The entire Crop Care production and marketing business will be handled by ACI Formulations 

Limited. This is a growing business and projected turnover of 2009 is Tk. 1.4 billion (expected to be 

Tk. 1 billion in 2008). With the inclusion of Crop Care business in its entirety, the profitability of 

ACIFL will grow significantly in the upcoming years. 

(2) Sulpher project- 

We have already started a new project by establishing a Sulpher Manufacturing Plant in Bangladesh. 

This particular project will take care of the sulpher requirements of farmers which currently being 

imported from abroad. The local manufacturing of sulpher will not only give farmers price advantage 

but also increase the availability of sulpher in the market. 

(3) NPKS fertilizer- 

To play more active role in Country’s agriculture sector holistically, ACI Formulations Limited will 

also involve in fertilizer business by establishing its own NPKS fertilizer plant. It is to be noted here 

that ACI is already in fertilizer business and during a short span of time it has established a strong 

foothold in this sector. 


(4) Agriculture machinery- 

To improve country’s agriculture production, mechanization is a must. ACI Motors Ltd. which 

started its operation in end 2007, has already become no-2 in marketing agriculture equipment like 

tractors, power tillers, harvesters etc. As this business is directly linked with ACIFL’s philosophy to 

enhance country’s food production and therefore, to have quick access to this growing business area, 

it has been agreed that 10% share holding of ACI Motors Ltd. will be divested by ACI Limited in 

favour of ACIFL. This will allow ACIFL to have more direct contacts with farmer community and be 

potential gainers of the recent upsurge of farmers’ demand for increased use of agriculture 

machinery. 

(5) Contract manufacturing- 

ACI Formulations Limited will continue to be the contract manufacturer of public health products 

which are marketed by ACI Ltd. ACIFL will get the share of growing demand in public health 

products like Aerosol, Mosquito Coils and Air-freshener. 

We strongly feel that our current leading position in crop care business will be further strengthened by 

incorporating above new projects which have been carefully selected to enhance the future business 

prospects. Agriculture of Bangladesh needs up-gradation and modernization and ACIFL wants to be a 

change agent for this revolution. Following is the projected income statement of ACIFL for the next five 

years: 

Expected to be 

Projected 

Particulars 2008 2009 2010 2011 

2012 2013 

Taka Taka Taka Taka Taka Taka 

Sales 1,841,645,034 2,508,515,563 4,153,581,273 5,068,090,685 5,893,386,546 6,681,650,781 

Cost of goods sold (1,506,815,614) (1,645,909,414) (2,918,798,138) (3,574,128,374) (4,140,158,415) (4,708,061,139) 

Gross profit 334,829,420 862,606,150 1,234,783,135 1,493,962,311 1,753,228,131 1,973,589,642 

Other income 2,798,484 2,635,017 2,898,519 3,188,371 3,507,208 3,857,929 

337,627,904 865,241,167 1,237,681,654 1,497,150,682 1,756,735,338 1,977,447,570 

Administrative, 

selling and 

distribution expenses 44,015,569 424,966,669 605,059,453 736,961,910 856,885,444 981,526,319 

293,612,335 440,274,498 632,622,201 760,188,772 899,849,895 995,921,251 

Financing cost 56,346,938 135,121,142 195,030,623 207,163,689 214,740,018 222,168,465 

237,265,397 305,153,356 437,591,578 553,025,083 685,109,876 773,752,786 



11,863,270 15,257,668 27,782,563 33,870,480 37,569,694 43,526,207 

Profit before tax 225,402,127 289,895,688 409,809,015 519,154,603 647,540,182 730,226,579 

Tax expenses 83,262,890 81,170,793 114,746,524 145,363,289 181,311,251 204,463,442 


Eearning per share 

(EPS) 

5.69 8.35 11.80 14.95 18.65 21.03 

With the inclusion of two (2) new projects i.e. Sulpher and NPKS along with the investment in ACI Motors 

Ltd and restructuring of existing Crop Care business, ACIFL is expected to increase its return from 2008’s 

estimated EPS of Tk. 5.69 to Tk. 21.03 ( CAGR + 30%) in 2013. 


CREDIT RATING REPORT 

ON 

ACI FORMULATIONS LIMITED 

Report : RR/215/08 

Address: 

CRISL 

Nakshi Homes 

(4 th Floor), 

6/1A, Segunbagicha, 

Dhaka-1000 

Tel: 7173700-1 

Fax: 88-02-9565783 

Email: 

crisl@bdonline.com 

Analysts: 

Sk.Md.Lutful Kabir 

Kabir@crislbd.org 

Md.Sajedul Islam 

sajeed@crislbd.org 

Entity Rating: 

Long Term: A+ 

Short term: ST-3 

Outlook: Positive 

Rating : 

Based on Financials 

of first half-2008 

ACI Formulations 

Limited 

PRINCIPAL 

ACTIVITY 

Manufacturing and 

marketing of 

agrochemical and 

consumer products 

INCORPORATED ON 

October 29,1995 

BOARD CHAIRMAN 

& 

MANAGING 

DIRECTOR 


EQUITY 

TK.689.07 million 

TOTAL ASSETS 

TK.1,715.95 million 

This is a credit rating report as per the provisions of the Credit Rating Companies Rules 1996. CRISL’s 

Long-term Rating is valid for one year only and Short-term rating is valid for 6 months only. After the 

above periods, these rating will not carry any validity unless the company goes for rating surveillance. 

. 

Long term 

Short term 

Entity Rating A+ ST - 3 

Outlook 

Positive 

Date of Rating Declaration September 22, 2008 

1.0 RATIONALE 

CRISL has assigned “A+” (pronounced as Single A Plus) rating in the long term and “ST-3” rating in the short 

term to ACI Formulations Limited (hereinafter referred as “ACIFL”). The above has been done on the basis of 

its good fundamentals such as sound equity based capital structure, good franchise value in the market, 

sound production arrangement, experienced management team, diversified product line, good market share, 

good profitability, strong support of parent ACI Limited, sound debt servicing history etc. However, the 

above factors are moderated to some extent; by its full dependence on parent support to promotion & 

distribution, continuous substantial receivable with the parent, huge working capital loan etc. 

Entities rated in this category are adjudged to offer adequate safety for timely repayment of financial 

obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are 

more variable and greater in periods of economic stress than those rated in the higher categories. The short 

term rating indicates good certainty of timely payment. Liquidity factors and company fundamentals are 

sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets 

is good. Risk factors are small. CRISL also considers its positive outlook due to its business expansion plan, 

adoption of business policy to develop its own distribution channel & promotional team and others. 

2.0 CORPORATE PROFILE 

2.1 The Genesis 

ACI Formulations Limited (hereinafter referred “ACIFL”), a subsidiary of Advanced Chemical Industries 

Limited (“ACI Limited”), was incorporated on 29 th October 1995 under Companies Act-1994 as a public 

limited company and went into commercial operation on 1 st July 1998. The principle business of the Company 

is manufacturing and marketing of a number of agrochemical and consumer products through its three 

manufacturing units -Crop Care and Public Health, Mosquito Coil and Aerosol. As on June 30, 2008 the 

authorized and paid up capital of the company stood at Tk.500.00 million and Tk.250.00 million respectively. 

With the continuous technical and operational support from ACI Limited and under the auspicious 

leadership of renowned entrepreneur Mr. Anis Ud Dowla, the company has been able to improve its growth 

progressively. The company has the plan to go for direct listing with stock exchanges under direct listing 

rules. The Corporate Head Office of the company is at ACI Centre, 245 Tejgaon Industrial Area, Dhaka-1208 

and Factory is at Rajabari, Gazipur. 

2.2 Ownership Pattern 

ACI Limited, the parent of the ACIFL owns 86.95% shares of the company, while the balance shares are held 

by the Chairman & Managing Director of the company Mr. M Anis Ud Dowla & his family members 

(10.03%), Dr. F H Ansarey (3.01%),Ms. Sheema Abed Rahman and Mr.M. Mosaddek Hossain (0.004% each). 

All the individual shareholders are the Directors of the Company. 

2.3 Products 

ACIFL is highly innovative in product line development. The products of ACIFL are categorized under three 

major business segments namely Crop Care & Public Health (CC & PH), Mosquito Pesticides, and household 

chemicals. The CC & PH products includes insecticides, herbicides and fungicides in granular, powder and 

liquid forms; Mosquito Repellants in the forms of aerosols, vaporizers and coils; and household chemicals 

like toilet cleaners, Air freshener and hand wash. Overall the company has about 55 products under its three 

business segments. 


3.0 PARENT PROFILE: ACI HOLDING 

Diversified business of 

parent 

Advanced Chemical Industries Limited (“ACI”) has a long heritage in its business, which was incorporated in 

1992 to take over the business of the then Imperial Chemical Industries Pakistan Manufactures Limited (ICI 

Pakistan) through a Management buyout. Presently it is one of the largest conglomerate business houses in 

the country having ten subsidiaries and three joint ventures. ACI’s business was diversified within three 

business divisions namely ACI Healthcare, ACI Consumer Brands and ACI Agrochemicals. Besides, it has 

also presence in other related and un-related sectors. As on 31 st December 2007, the authorized capital and 

paid up capital of the company stood at Tk.500.00 million and Tk. 161.70 million respectively. ACI is 

registered with both the bourses of the country having market capitalization of Tk.8484.40 million as on 

September 02,2008. 

The consolidated turnover of the ACI Holding (including its subsidiaries) was Tk. 5,756.82 million and Tk. 

4,237.86 million in YE2007 and YE 2006 respectively. The after- tax profit was Tk. 362.59 million and Tk. 

167.88 million in YE2007 and YE2006 respectively. Again, the consolidated asset- base of the Holding stood at 

Tk. 5,912.36 million and Tk. 3,716.30 million in YE 2007 and YE 2006 respectively. The consolidated equity 

base of the Holding Company “ACI” reached to Tk. 1,794.87 million at YE2007 including the Minority 

Interest, of which only ACI’s equity base was Tk. 1,272.10 million. The parent has also commendable leverage 

of 2.29 times and 2.06 times in YE2007 and YE2006 respectively. 

4.0 PRODUCTION FACILITIES AND ENVIRONMENT COMPLIANCE 

Good infrastructure and 

environment 

compliance 

The production facility of ACIFL is located at Rajabari, Gazipur on a total land area of 19 acres. The core 

production plant includes three production units such as Unit 1: Crop Care and Public Health, Unit 2: 

Mosquito Coil and Unit 3: Aerosol. Besides, within the premises of ACIFL, there is also a Vanish production 

unit under the ownership of ACI Limited and managed by ACIFL. Other than the plant shed, the ACIFL has 

7 warehouses, engineering workshop, substation, store, two quality control laboratories, a medical center and 

other related infrastructures. The company has own gas generated power supply capacity of 2025 KW and 

water supply system. For Aerosol unit, it has LPG storage facility of 17 Ton. ACIFL Plant has its own effluent 

treatment plant as per the WHO and FAO approved guideline. 

Initially the company started with the Agrochemical Unit in 1998 on 12.5 acres of land area to produce crop 

care granular product and coconut hair oil. Subsequently, within the next five years, it expanded to produce 

CFC based Aerosol, Mosquito Coil, LPG based Aerosol, Air Freshener, Vanish (public hygiene product), 

Lissapol (textile chemical) and others. Production for the Crop Care and Public Health (insecticide, fungicide 

and herbicide) items is done in three separate floors, namely Granular Production, Powder Production and 

Liquid Production. For the production of Consumer Brand (CB) there are three separate floors for Aerosol, 

Mosquito Coil, and Vanish. 

ACIFL has been using semi-automated plant and equipment needing human intervention, however, it has 

planned to use fully automated equipments & machineries to avoid possible health hazard. 

5.0 CORPORATE GOVERNANCE 

Corporate governance is a blend of law, regulations, enforcement and appropriate voluntary practice by the 

companies that permit a corporate to attract capital, perform efficiently and generate long term economic 

value for its shareholders while respecting the interest of its stakeholders and society as a whole. The specific 

areas covered are transparency in disclosure of relevant, reliable financial and operational information, 

information on ownership and control, information on internal processing of management. Some of the areas 

are reviewed as follows: 

Experienced Board 

5.1 Board 

The seven members Board of ACIFL is being lead by Mr. M Anis Ud Dowla as Chairman, who has long 

exposures in the business arena since the Pakistani regime. Mr. Dowla served in the British Oxygen Group of 

UK in Pakistan, Bangladesh and Kenya for 27 years, including 12 years as Managing Director of Bangladesh 

Oxygen Ltd. In 1987, he became the Group Managing Director of the three ICI companies in Bangladesh. 

Later, he started his own business under the name and brand ACI in 1992 and now the ACI brand commands 

a high franchise value and it is considered to be one of the local giant private sector conglomerate house of 

the country. 

Board reviews the overall activities of the business and gives necessary strategic guidelines for onward policy 

implementation. The Directors are kept informed of the results and the major activities through distribution 

of monthly statements and quarterly reporting by the Managing Director. The board agenda includes 

financial results, consideration of major investments, new business initiatives, borrowings liquidity, etc. in 

addition to statutory approvals. However, the board meets periodically to transact matters that require 

board’s approval. The board conducted 5 meetings each of the year 2006 and FY 2007. 


Experienced 

management team 

5.2 Corporate Management 

The Management Team of ACIFL is headed by the Managing Director Mr. M Anis Ud Dowla, who is also the 

Chairman of the Board. The global best corporate governance practice as well as SEC corporate governance 

guidelines suggest that the Chairman and the Managing Director should be different persons. Mr. Dowla is 

actively aided by key persons Dr. F.H Ansarey, Executive Director, Engr. Md. Abdul Hamid, General 

Manager (Operations), Mr. Sheikh Muzaffar Hasan, Production Manager, Dr. Md. Abdus Salam Bhuiyan, 

Manager, Quality Control for day to day operations. 

Dr. F H Ansarey, with his experience of working with different multinational organizations like Ciba-Geigy 

and Shetu Corporation in the field of chemicals, has been engaged as the Executive Director (ED). Engr. Md. 

Abdul Hamid is basically a Mechanical Engineer having professional experience in different local and 

multinational companies, has been working as head of the production and operation. Over and above, the 

Finance, Administration, Marketing, Sales and Distribution are overseen by the Central Corporate Team of 

the parent company which consisted of highly qualified and professionally sound. The Parent has highly 

dedicated, well qualified, innovative and multi dimensional professionals to take the challenge in any 

endeavor. 

Required delegation of 

power 

5.3 Delegation of Power 

The Board has delegated adequate operational and financial authority to the Managing Director to manage 

operations of the Company. The Managing Director is responsible for implementing the Board’s decision and 

he uses the Management Committee as a consultative body to advise and assist him on issues under 

consideration. Senior managers with responsibilities for business, operations and functional services are 

members of the Management Committee which meets once a month to discuss the business result to review 

the prevailing business position and discuss policy matters. The Management Committee also advises the 

Managing Director on new products, major items of capital expenditure and overall supervision of the affairs 

of the Company. 

However, for operational efficiency and smooth functioning, the Managing Director has re-delegated the 

financial power to respective Executive Directors and factory managers. The operational power is also 

delegated on the basis of business need being determined through budgetary control system. Based on the 

above, the operational activities at all level are being carried out. The operational staff does not feel the dearth 

of delegation. 

Structured service 

policy 

5.4 Human Resources Policy 

ACIFL has structured service rule to ensure the congenial working environment and better career path. The 

compensation structure is framed with the objective to attract and retain high quality people. Management 

has efforts to ensure a good and congenial working environment for its employees. The company has 

conducted numerous training programs on variety of topics, ranging from focused, skill based programs to 

highly interactive leadership development session. The well structured performance evaluation system and 

succession development plan also ensured a better career path of the employees. 

Automated Information 

System 

Sound internal control 

and compliance system 

5.5 Management Information System 

The Management Information System (MIS) of ACIFL has been developed on Dot Point Solution (DPS), the 

most modern software platform. MIS in ACIFL is in focus of establishing technology driven process to reduce 

human activities, effective user tutorial for ensuring proper understanding of the developed tools, 

personalized dashboards for process monitoring and highlighting exceptions, continuous quality 

improvement, high security to ensure accuracy and reliability of data, excellent closely coupled 

communication with the customer etc. The company uses in-house developed various software for material 

planning, Inventory RM/PM, Inventory finished product, invoicing system, SMS based sales Invoicing 

system, BSC, Accounting Mirror, Cpanel Text and Graphics etc. The connectivity of the Formulation Plant 

with the ACI Center is supported P2P radio link. The development tools and infrastructure of the company 

includes SQL server in back end, Visual basic and php in font end, MS Exchange and Mdaemon mail server, 

Microsoft Windows (2X authentication,2X File,2X FTP) server, SMS gateway etc. The company has sufficient 

safeguard to face any theft of information as well as disaster situation. In order to investigate the IT activities 

of the company internal audit team is actively involved with necessary steps. 

5.6 Internal Control System 

ACIFL has been following sound internal control system to ensure compliance of its Standard Operating 

Procedure in order to keep the company on track. The Managing Director has to satisfy the Board that 

adequate internal check and control are in place through appropriate MIS and employment of Internal Audit 

team to check and validate the expenses and the system in operation. The central internal audit team of the 

ACI Holding is responsible for audit and inspection, compliance of laws & regulation, monitoring and risk 

assessment activities on behalf of the subsidiary companies. It undertakes comprehensive internal audit of the 

Head Office as well as Factory in order to find out the deficiencies in operations, weaknesses in the control 

system and report to the Board and Managing Director for their review and taking appropriate actions. 


6.0 BUSINESS RELATION WITH THE PARENT 

Highly integrated with 

the parent “ACI 

Holding” 

ACIFL was an expansion in the new business arena of ACI Holding like other subsidiary companies. The 

parent has direct support to all the subsidiaries under its corporate management team in the areas of sales & 

marketing, distribution, administration, procurements and others. All the products of its different 

subsidiaries are pulling in three products Groups under three Strategic Business Units (SBUs) namely Health 

Care Division, Consumer Brands Division and Agribusiness Division. The products under different Strategic 

Business Units (SBUs) are marketed and distributed in their respective channel to reach at identical consumer 

group. The management adopted the strategy to promote and distribute the products in the identical 

consumer group as well as to introduce new products in the respective business segments as according to the 

group demand. This is also supposed to be cost effective for the company to market the products under the 

same brand recognition. Therefore, management perceived no major operational problem, as usually faced by 

any new company, in case of brand development and operation. The corporate overhead incurred by ACI 

Holding are also be allocated among all the business units as according to their business volume. 

Documented transfer 

pricing agreement 

7.0 TRANSFER PRICING WITH THE PARENT 

About 97% sales of Unit 1 and 100% of Unit 2 and Unit 3 are made to ACI Ltd., where ACI also act as the sales 

agent of the company. ACI has strong distribution network all over the country as well as well developed 

field force to monitor the supply chain. The above inter company business dependency put both the 

companies in win-win situation as both the parties protect their business interest through a “Marketing and 

Distribution Agreement” signed on the 1 st Day of January 2005. According to the Agreement, the transfer 

pricing of different products are accounted in three separate modes according to the respective production 

unit, which are delineated below: 

Crop Care and Public Health Unit: 

According to the agreement, ACI will be treated just as a sales agent of ACIFL for the Crop Care & Public 

Health products. Under this arrangement, ACIFL shall reimburse all the Selling, Marketing and Distribution 

cost at actual incurred by ACI to sale the products of ACIFL produced in the above unit. ACIFL also pays 5% 

of the invoice value of ACI as service charge to sale its products. 

Mosquito Coil Unit: 

As per agreement, Mosquito coil production is supposed to be done on Contract Manufacturing basis, where 

ACIFL is entitled to receive only the one forth of the initial investment cost of Mosquito plant by ACIFL, 

without any reference to the actual production quantity. In return of the goods produced by ACIFL, ACI will 

bear all the production cost except the general overhead incurred by ACIFL. 

Aerosol Unit: 

The transfer pricing of the products of the Aerosol Unit is being determined by ACI and ACIFL on year to 

year basis considering the profitability of the business vis-à-vis market dynamics. 

Vanish Unit: 

Though the transfer pricing for vanish unit is separately mentioned in the agreement; it is covered under the 

other products clause, where of the service charges are to be mutually determined between ACI Limited and 

ACIFL. Vanish unit is actually under the ownership of ACI, and ACIFL just provide the manufacturing 

service with its personnel and other overhead to produce the products. In return, the ACI is required to pay 

service charge @ Tk. 1.50 per unit of production. 

Excellent Business 

Prospects 

8.0 INDUSTRY PROSPECTS 

As its part of resilience of Bangladesh economy in FY 2006-07, the agrochemical and consumer brand sector 

once again showed continuous trend of growth to cope with demand of domestic market. In the rural area, 

the demand for Crop care and pesticides products has increased significantly to increase production volume 

which has ultimate reflection to the national GDP, keeping pace with the growth of per capita GDP of 11.01% 

and GNI of 10.69% percent in FY 2006-07. Moreover, socio-economic development and improvement in 

quality of life of people both in urban and rural areas has created demand for healthcare products that 

warranted the increased demand for highly innovative hygienic and comfortable products of consumer brand 

like aerosol, vanish, mosquito coil etc. However, gap of local and foreign participants in this sector is 

considerably noticed. As a mainstay of the Bangladesh economy, improved and modernized agricultural 

projects and small agro businesses are highly encouraged by the government and donor agencies. To meet 

huge demand and to have a quick progress of agro chemical and pesticide industry Government has 

provided tax exemption and other facilities which will create further opportunity to expansion. 


9.0 BUSINESS PERFORMANCE 

Production as per 

domestic demand 

Business performance of ACIFL has been increasing with a substantial growth over the years. The turnover of 

the company was Tk. 1383.12 million and Tk. 923.86 million in FY2007 and FY2006 respectively, indicating 

49.71% growth; however, the half yearly turnover was Tk.1,069.47 million as on 30 th June 2008 from Tk.667.63 

of corresponding period with a growth rate of 60.19%. 

Product 

Category 

Unit Quantity 

in 

Production -2007 Production -2006 

Capacity production Utilization 

(%) 

Capacity Production Utilization 

(%) 

CC & PH 1 MT 13,500 7,962 58.98 9,000 5,715 63.50 

(Granular) 

CC & PH 1 MT 1,500 671 44.73 1,500 496 33.07 

(Powder) 

CC & PH 1 MT 1,500 597 39.80 1,500 457 30.47 

(Liquid) 

M. Coil 2 Carton 675,000 499,435 73.99 750,000 426,289 56.84 

Aerosol, 

Air Fresh 

& C. Killer 

3 Piece 7,560,000 2,723,588 36.00 7,560,000 1,909,605 25.26 

The CC & PH unit contributed highest in the gross turnover by 56.38% followed by 26.67% of Mosquito Coil 

unit and 16.95% of the Aerosol unit. The turnover of ACI Crop care & Public health unit increased by 43.28% 

(Tk. 789.48 million in FY2007 from Tk 551.00 million in FY2006) over the last year against the industry growth 

of 28%. The turnover of Mosquito Coil business increased to Tk. 361.37 million, a 73.24% growth in YE 2007 

from Tk. 208.60 million in YE2006, with a record market share of 29%. Aerosol Insect Spray maintained its 

14% growth over previous year and maintained its leadership with 79% market share. 

The company recognized October to April time as its pick operation period at which it utilizes 100% of its 

achievable production capacity but the rest time its production capacity is utilized only about 40% on 

average. The average capacity utilization of the different units varied due to its market requirements and 

47.84% was recorded for CC & PH unit, 73.99% for Mosquito coil unit and 36% for Aerosol unit in FY 2007. 

However, the company feels comfort for its production volume as per its domestic market share. 

10.0 FINANCIAL PERFORMANCE 

The after tax profit of the company was Tk.65.53 million in FY2007 and Tk.67.27 million during FY2006 

indicating a negative growth of 2.59% over the year; however, the half yearly accounts reported Tk. 94.81 

million as on 30 th June 2008 with a growth rate of 84.43% over its previous half year performance (Tk. 51.40 

million). Though there was an acceptable growth in the before tax profit of the company in the last year 

(about 9.66%), due to expiry of tax holiday period of the Unit -3: Aerosol Unit, reduced the after tax 

profitability of the company. The earning per share (EPS) (Face value @ Tk.10) of the company was Tk 3.79 as 

on half year end of FY 2008 (i.e. Tk.7.58 on annualized) against Tk 2.62 and Tk 2.69 in YE2007 and YE206 

respectively. The company declared dividend @10% in FY2004 and thereafter no declaration was given. Net 

asset value (NAV) per share of the company increased to Tk.27.56 as on 30 th June 2008 against Tk. 23.77 in 

YE2007 and Tk. 21.15 in YE2006. 

10.1 Profitability 

Good profitability 

The company has a good market existence in turnover and overall profitability is good. The profitability 

indicators curved with a noticeable growth in the half yearly performance during FY 2008 albeit performance 

movement faced a declining fashion in the last few years. The gross profit margin was 19.54% and 15.34% in 

YE2006 and YE2007 respectively, but it twisted to 20.08% at half year end of FY 2008. Accordingly, operating 

profit margin stood at 17.90% at half year end of FY 2008 with the corresponding rate of 11.53% and 13.85% in 

YE2007 and YE 2006 respectively. Net profit margin also stood at 8.86% at half year end of FY 2008 against 

4.74% and 8.86% in YE2007 and YE2006 respectively. 

It has been revealed that due to variation in unit wise transfer pricing, profitability of the each unit varies 

widely. The net profit margin of Mosquito Coil unit (i.e. Unit 2) and Aerosol Unit (i.e. Unit 3) was 1.27% and 

1.85% respectively whereas CC & PH unit (i.e. unit 1) represented 14.56% net profit margin in the half year 

end of FY2008. While analyzing the unit wise performance, it also revealed that CC & PH unit contributed 

substantially in the PAT (Profit After Tax) by 92.62% followed by 3.83% of Mosquito Coil unit and 3.54% of 

the Aerosol unit; whereas contribution in the gross turnover by CC & PH unit was 56.38 % followed by 

26.67% of Mosquito Coil unit and 16.95% of the Aerosol unit. It reveals that the Mosquito coil unit and 

Aerosol unit are less profitable compared to CC & PH unit, as production under these units are conducted on 


contract manufacturing basis. CRISL views that the change in the business model may pose the profitability 

of the Unit 2 and Unit 3, which dependents on the future transfer pricing policy. 

Again, profitability against assets and capital utilization, the company is performing well. The after tax return 

on average assets of the company was 7.12%, 5.10% in YE2006, YE2007 respectively, but it stood at 5.86% on 

half yearly performance which is equal to 11.72% on annualized. The after tax return on equity was 13.59%, 

11.67% in YE2006, YE2007 respectively and it stood at 14.77% on half yearly performance which is equal to 

29.54% on annualized. Again, against the capital employed amount the return was 11.79%, 10.26% in YE2006, 

YE2007 respectively and it stood at 13.21% on half yearly performance which is equal to 29.54% on 

annualized. It is mentionable here that due to seasonal business in nature, peak season (November to April) 

carries the major part of the yearly trade volume; performance of which are mostly reported in the first half of 

financial year. However, the company is estimating to maintain the business growth in the second half of 

FY2008 also. 

Improving efficiency 

10.2 Cost Efficiency 

The cost efficiency ratio (i.e. cost of goods sold as compared to its sales) stood at 79.92% in 1H 2008 with a 

slight improvement against 84.66% in YE 2007, however, in line with the average efficiency of 79.39% in the 

last five years. Unit wise cost efficiency revealed that CC&PH unit has been operating with better efficiency 

(i.e. 71.41%) compared to other two units, where Mosquito unit and Aerosol Unit has been operating at as 

high as 91.19% and 90.45% of cost to income ratio respectively. Administrative overheads as percentage of 

total costs noticeably decreased to 1.88% in IH 2008 against 3.04% and 3.27% in YE 2007 and YE 2006 

respectively. Selling and distribution overheads as percentage of total costs also substantially decreased to 

0.31% in IH 2008 against 0.77% and 2.43% in YE 2007 and YE 2006 respectively. Finance cost to revenue ratio 

stood at 3.02% in FY 2007 against 2.21%, 2.19% in FY 2006, in FY 2005 respectively and it further increased to 

3.31% in 1H 2008. CRISL views that financial cost increased due to increased working capital loan, which is 

also the outcome of increased receivable to the parent. 

10.3 Operational Efficiency 

Substantial receivable 

with parent 

The substantial receivable amount against the turnover apparently downsized the operational efficiency of 

the company. Though the average receivable outstanding stood at 130 days equivalent turnover in the half 

year end of FY2008 against 145 days, 123 days, 86 days in FY2007, FY2006 and FY2005 respectively; however, 

it seems high due to fall in receivable turnover below 3.00 times in FY2007 and FY2008 over 5.11 times in 

FY2004. Against the above receivable, the company can stagger the payment liability only upto 20-30 days on 

an average, which in result may put a pressure on the liquidity of the company. The company is also required 

to maintain substantial inventory of raw materials due to its business cyclicality and overall it maintains 

inventory equivalent to the 3 months production requirements. The raw materials in the closing inventory of 

the company held 93.02% as on 30 th June 2008 and 92.43% in YE2007 leaving only 7.00% for the finished 

goods. Though there are huge finished goods in the ware houses, however, the finished goods sold to the ACI 

are not considered in the inventory of ACIFL. Considering all of the above, the cash conversion cycle (i.e. the 

time required to back the cash injected into operation after sales of products) represented by 229 days in FY 

2007 and 233 days in FY 2006 to move, and it reached to 197 days in the half year end of FY2008 albeit yet 

seems high for the company. 

11.0 CAPITAL STRUCTURE AND LEVERAGE 

Sound equity based 

company 

ACIFL is a sound equity based company without having any contribution of long term loan in the capital 

structure. The capital structure also reveled that 90.20% of the net capital employed of Tk. 763.93 million was 

financed by the equity of Tk.689.07 million as on 30 th June 2008. The equity build-up significantly contributed 

by the retained earnings (i.e. by 54.21%), which was also subsequent result of sound internal capital 

generation over the last five years and non declaration of dividend after FY2004. Internal capital generation of 

the company was 13.76%, 11.03%, 12.72% and 16.82% in 1H 2008, FY2007, FY 2006 and FY 2005 respectively. 

However, considering all the outside liabilities of the company; the leverage ratio reached to 1.49 times in 

HYE 2008 and 1.56 times in FY 2007 in comparison to 0.99 times, 0.82 times and 0.60 times in FY 2006, FY 2005 

and FY 2004 respectively. CRISL views that increasing short term loan and overdraft facility pushed the 

leverage of the company significantly over the last five years. As on 30 th June 2008, about 58% of the net 

revolving fund of the company was financed by bank loan, whereas 63% of the above revolving fund was in 

receivable form to its parent ACI Limited. 

12.0 LIQUIDITY AND FUND FLOW ANALYSIS 

Substantial working 

capital loan 

The fund flow of the company revealed that the liquidity of the company is highly dependent on collection of 

trade receivables from its parent- ACI Limited. The liquidity ratio of the company revealed comfortable 

indicator of 1.44 times and 1.40 times in HYE 2008 and YE2007 respectively though there was an increase of 

bank borrowing over the years. As mentioned earlier that due to increased business volume, the company is 


also required to maintain significant inventory of raw materials which was also the ultimate cause of 

additional working capital financing as reflected in the fund flow movement of the company. The fund flow 

of 1 st half of 2008, revealed that fund from operation was Tk.104.45 million; against the above net additional 

fund flow to the working capital was Tk. 126.16 million and capital expenditure of Tk. 18.38 million resulting 

a net gap in free cash flow of Tk.51.67 million. The above gap was supported by the additional bank 

borrowing of Tk. 63.89 million in the form of overdraft and short term loan. 

CRISL views that the liquidity of the company may be affected if the ACI Holding face operating cash flow 

crisis; although so far it enjoyed parent support in serving the bank loan duly. In this connection it may be 

mentioned here that since the parent company is dependent on the subsidiary for its product range, the 

parent will support the subsidiary at the time of liquidity need. 

13.0 CREDIBILITY AND CREDITWORTHINESS 

Good debt servicing 

capacity 

ACIFL has a good debt servicing history from its inception and so far any exposures are yet to be classified. 

Due to its sound credibility, it is enjoying credit limit against the funded and non-funded facility to the 

amount of Tk.1,060.00 million from three commercial banks including Standard Chartered, HSBC and 

Commercial bank of Ceylon. However, the outstanding bank loan liability was Tk. 747.16 million (i.e. 70.48% 

of the limit) as on 30 th June 2008 consisting of Tk. 684.96 million as short term loan and Tk. 61.19 million as 

Bank Overdraft. The facility wise outstanding short term loan was Tk. 258.74 million as LATR (Loan against 

trust receipt), Tk. 150.00 million as short term loan, Tk.250.37 million as import cash limit and Tk. 45.85 

million as Revolving loan. The above exposures are secured by a registered first hypothecation charge over 

stock and book debts on pari- passu basis among the lenders covering to the amount of Tk. 1,140.00 million. 

Corporate guarantee of the ACI limited is also additional cushion to the exposures. 

While analyzing the creditworthiness of the company, it revealed that in absence of long term loan, the 

company has been utilizing each of the revolving credit limit duly. The cash generation of the company 

supported to service the interest obligation against the revolving loan. The interest coverage ration of the 

company was 5.46 times, 3.84 times, 6.31 times in 1H2008, FY 2007, FY 2006 respectively, reflects its sufficient 

cash generation capacity. 

14.0 RISK ANALYSIS 

Supplies risk within 

control 

Low market risk 

Distribution channel 

shared with parent 

14.1 Supplies Risk 

ACIFL is fully dependent on imported raw materials as no backward linkage has been developed in the 

country. The Company has a strong supply chain management to mitigate the supplies risk which is a great 

concern for any agrochemical and pharmaceutical company in Bangladesh. It imports raw materials from 

various countries like India, China, Japan etc. and tests the quality of raw materials in its modern quality 

control laboratory to ensure quality of raw material. It has its own quality assurance policy in line with the 

international standard to select suppliers as well as supplies. Its own established formulation plant is also a 

comfort for manufacturing the product concern with it. CRISL does not foresee any major risk of supplies 

other than usual industry risk in general. 

14.2 Market Risk 

Crops care and Public health related products are usually exposed to high market risk. Each product is 

required to be marketed through a stringent compliance procedure both in local and export market and also 

is required to have flexibility to cope with the new regulations and also the continuous quality improvement 

capacity to face the global demand. Especially local market is highly competitive due to presence of both 

quality local producers and many global giants. Any deviation from the standard may result serious market 

image crisis and might also create regulatory barrier. ACI like other same line companies may face product 

liability risk which might take place even after taking the most stringent quality control procedure. ACIFL 

possess relatively low market risk since it has been enjoying strong share in domestic market prevailed by 

ACI Limited. 

14.3 Distribution Risk 

Product distribution risk of ACIFL is minimal as the company has been selling its products to its parent 

company. The company has been enjoying uninterrupted supply of products through the well established 

distribution network of ACI Limited to uphold the market share. ACI Limited is conscious to have market 

presence of all the products in the nearby outlets of the consumers. As on 31 st December 2007, it has 19 depots 

in different strategically located important areas, fleet of 84 vehicles and sufficient sales personnel. ACI has a 

large number of distributors/wholesalers and retailers over the country in selling of products. CRISL views 

that initially the company reaped the opportunity by using the distribution channel of ACI, however, in the 

longer term it may not reduce the cost without having any own distribution network or using the ACI 

network on rental basis under its own marketing and distribution team. 


Transfer pricing based 

on business model 

Low collection risk 

14.4 Transfer Pricing Risk 

As a subsidiary of ACI, the transfer pricing agreement was signed in 2005 as according to the business 

strategy adopted between them. The Mosquito coil unit and Aerosol unit is yet to achieve the expected 

profitability due to following contract manufacturing policy, as mentioned earlier. CRISL views that, due to 

additional investment in the above two units in the last four years, the transfer price which was based on the 

invested capital of four years back, may not commensurate the expected cost on present invested capital in 

the two units. 

14.5 Receivable Collection Risk 

It has been revealed that about 60% of the annual turnover is always due with ACI Holding. Though ACIFL 

is facing the issue due to parent subsidiary relationship, however, the parent has a good support to the 

company in necessity of fund and ACIFL is also not facing any receivable collection risk due to their above 

relationship. 

15.0 OBSERVATION SUMMARY 

Rating Comforts: 

Rating Concerns: 

• Strong equity base 

• Good franchise value 

• Sound production facilities 

• Experienced management team 

• Diversified product line 

• Good Market share 

• Good profitability 

• Strong support of parent towards business 

• Sound debt servicing history 

Business Prospects: 

• Immense opportunity of market growth 

• Introduce new products 

• Diversification in the business 

• Capacity utilization to the estimated level 

• Full dependence of parent support to 

promotion & distribution 

• Continuous substantial trade 

receivable with the parent 

• Huge working capital loan 

• Marketing and distribution agreement 

specially on contract manufacturing 

basis 

• Semi automatic plants having scope of 

health hazard 

Business Challenges: 

• Compliance with regulation regarding 

product quality 

• Removal of health hazard through 

installing automatic plant 

• Reducing of trade receivables with 

parent 

• Development of own promotional 

team and distribution channel 

• Review of transfer pricing 

END OF THE REPORT 

[Information used herein is obtained from sources believed to be accurate and reliable. However, CRISL does not 

guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions 

or for the results obtained from the use of such information. Rating is an opinion on credit quality only and is not a 

recommendation to buy or sell any securities. All rights of this report are reserved by CRISL. Contents may be used by 

news media and researchers with due acknowledgement] 

16.0 CORPORATE INFORMATION 

Date of Incorporation : October 29, 1995 

Commencement of Business : July 01, 1998 

Board of Directors : Mr. M Anis Ud Dowla Chairman 

: Mrs. Nazma Dowla Director 

: Dr. F H Ansarey Director 

: Ms. Shusmita Anis Salam Director 

: Mr. Wajed Salam Director 

: Dr. Arif Dowla Managing Director 

: Ms. Sheema Abed Rahman Director & Company Secretary 

Auditor 

: Rahman Rahman Huq 



Key Management : Mr. M Anis Ud Dowla Managing Director 

: Dr. F. H. Ansarey Executive Director 

: Mr. Md. Abdul Hamid G.M. Operation 

: Mr. Sheikh Muzaffar Hasan Production Manager 

: Dr. Md. Abdus Salam Bhuiyan Manager, Quality Control 

: Engr. Zubair Mahmud Assistant Manager 

Capital History: 

Year 

Authorized 

Capital(M.Tk) 

Issued, Subscribed and Paidup 

Capital (M. Tk.) 

Rate of 

Increase 

Source of 

Paid-up Capital 

1998 500.00 66.00 - 

2004 500.00 250.00 278.79% Issue of Right and 

Bonus share 

2005 500.00 250.00 - - 

2006 500.00 250.00 - - 

2007 500.00 250.00 - - 

IH2008 500.00 250.00 - - 

Financials (Up to 30 th June, 2008) 

A. Balance Sheet 

Particulars 1H 2008 2007 2006 2005 

Non-Current Assets: --- --- --- --- 

Property, Plant & Equipment. 280.91 273.62 284.14 266.02 

Capital work in progress 66.61 55.52 2.35 20.27 

Total Non-Current Assets 347.52 329.14 286.49 286.28 

Current Assets: --- --- --- --- 

Inventories 450.23 397.81 342.32 248.03 

Trade Debtors 812.68 734.46 364.03 257.76 

Adv. Deposits & Prepayments 82.43 50.29 53.96 37.83 

Other Current Assets 2.84 - - 5.93 

Cash & Bank Balances 20.25 8.02 2.80 3.06 

Total Current Assets 1,368.43 1,190.59 763.11 552.61 

Current Liabilities: --- --- --- --- 

Short Term Loan 684.96 663.19 269.90 170.19 

Long Term Loan-CP - - 0.24 0.51 

Trade Creditors 97.83 115.70 84.01 58.93 

Other ST Liabilities 169.23 69.78 89.66 74.40 

Total Current Liabilities 952.02 848.67 443.81 304.03 

Net Current Assets 416.41 341.92 319.30 248.58 

Net Assets 763.93 671.05 605.79 534.86 

Non-Current Liabilities: --- --- --- --- 

Long Term Loan - - - 0.24 

Deferred Liabilities 74.86 76.79 77.05 73.15 

Total Non-Current Liability. 74.86 76.79 77.05 73.39 

Shareholders' Equity: --- - --- --- 

Share Capital 250.00 250.00 250.00 250.00 

Capital Reserve 65.50 65.50 65.50 65.496 

Other Reserve - - 39.64 30.21 

Retained Earnings 373.58 278.77 173.61 115.77 

Total Shareholder's Equity 689.07 594.27 528.74 461.47 

Total Equity and LT Liability. 763.93 671.05 605.79 534.86 

Total Assets 1,715.95 1,519.73 1,049.60 838.90 


B. Income Statement 

Particulars 1H2008 2007 2006 2005 

Sales Revenue 1,069.48 1,383.12 923.86 807.10 

Cost of Good Sold 854.68 1,170.93 743.31 631.96 

Gross Profit 214.79 212.19 180.56 175.14 

Other Admin. Expenses 20.08 42.07 30.17 22.54 

Total Adm. Exp 20.08 42.07 30.17 22.54 

Total Selling And Dist. Exp. 3.29 10.66 22.44 19.13 

Profit from Operation 191.42 159.46 127.94 133.48 

Other Income 2.11 1.19 0.85 (0.03) 

Financial Cost 35.45 41.79 20.41 17.69 

Other Non-Operating Exp.(WPPF) 7.90 5.94 5.42 5.79 

Profit Before Tax 150.18 112.91 102.96 109.97 

Income Tax 55.37 47.39 35.70 32.35 

Profit After Tax 94.81 65.53 67.27 77.62 

CRISL RATING SCALES AND DEFINITIONS 

LONG-TERM RATINGS OF MANUFACTURING COMPANIES 

RATING 

AAA 

(Triple A) 

(Highest 

Safety) 

AA+, AA, AA- 

(Double A) 

(High Safety) 

A+, A, A- 

Single A 

(Adequate 

Safety) 

BBB+, BBB, 

BBB- 

Triple B 

(Moderate 

Safety) 

BB+, BB, BB- 

Double B 

(Inadequate 

Safety) 

B+, B, B- 

Single B 

(Risky) 

CCC 

Triple C 

(Vulnerable) 

DEFINITION 

Investment Grade 

Entities rated in this category are adjudged to be of best quality, offer highest safety 

and have highest credit quality. Risk factors are negligible and risk free, nearest to 

risk free Government bonds and securities. Changing economic circumstances are 

unlikely to have any serious impact on this category of companies. 

Entities rated in this category are adjudged to be of high quality, offer higher safety 

and have high credit quality. This level of rating indicates a corporate entity with a 

sound credit profile and without significant problems. Risks are modest and may 

vary slightly from time to time because of economic conditions. 

Entities rated in this category are adjudged to offer adequate safety for timely 

repayment of financial obligations. This level of rating indicates a corporate entity 

with an adequate credit profile. Risk factors are more variable and greater in periods 

of economic stress than those rated in the higher categories. 

Entities rated in this category are adjudged to offer moderate degree of safety for 

timely repayment of financial obligations. This level of rating indicates that a 

company is under-performing in some areas. Risk factors are more variable in 

periods of economic stress than those rated in the higher categories. These entities 

are however considered to have the capability to overcome the above-mentioned 

limitations. 

Speculative Grade 

Entities rated in this category are adjudged to lack key protection factors, which 

results in an inadequate safety. This level of rating indicates a company as below 

investment grade but deemed likely to meet obligations when due. Overall quality 

may move up or down frequently within this category. 

Entities rated in this category are adjudged to be with high risk. Timely repayment 

of financial obligations is impaired by serious problems which the entity is faced 

with. Whilst an entity rated in this category might be currently meeting obligations 

in time through creating external liabilities. 

Entities rated in this category are adjudged to be vulnerable and might fail to meet 

its repayments frequently or it may currently meeting obligations in time through 

creating external liabilities. Continuance of this would depend upon favorable 

economic conditions or on some degree of external support. 

CC 

Double C 

(High 

Vulnerable) 

C 

(Extremely 

Speculative) 

D 

(Default) 

Entities rated in this category are adjudged to be very highly vulnerable. Entities 

might not have required financial flexibility to continue meeting obligations; 

however, continuance of timely repayment is subject to external support. 

Entities rated in this category are adjudged to be with extremely speculative in 

timely repayment of financial obligations. This level of rating indicates entities with 

very serious problems and unless external support is provided, they would be 

unable to meet financial obligations. 

Default Grade 

Entities rated in this category are adjudged to be either already in default or 

expected to be in default. 

Note: For long-term ratings, CRISL assigns + (Positive) sign to indicate that the issue is ranked at the upper-end of its 

generic rating category and - (Minus) sign to indicate that the issue is ranked at the bottom end of its generic rating 

category. Long-term ratings without any sign denote mid-levels of each group. 


SHORT-TERM RATINGS OF MANUFACTURING COMPANIES 

ST-1 

ST-2 

ST-3 

ST-4 

ST-5 

ST-6 

Highest Grade 

Highest certainty of timely payment. Short-term liquidity including internal fund generation 

is very strong and access to alternative sources of funds is outstanding. Safety is almost like 

risk free Government short-term obligations. 

High Grade 

High certainty of timely payment. Liquidity factors are strong and supported by good 

fundamental protection factors. Risk factors are very small. 

Good Grade 

Good certainty of timely payment. Liquidity factors and company fundamentals are sound. 

Although ongoing funding needs may enlarge total financing requirements, access to capital 

markets is good. Risk factors are small. 

Moderate Grade 

Moderate liquidity and other protection factors qualify an entity to be in investment grade. 

Risk factors are larger and subject to more variation. 

Non-investment /Speculative Grade 

Speculative investment characteristics. Liquidity is not sufficient to ensure discharging debt 

obligations. Operating factors and market access may be subject to a high degree of 

variation. 

Default 

Entity is in default or is likely to default in discharging its short-term obligations. Market 

access for liquidity and external support is uncertain. 


Auditors’ Report 

to the Shareholders of 


We have audited the accompanying balance sheet of ACI Formulations Limited as at 30 June 2008 and 

the related profit and loss account, statement of changes in shareholders' equity and cash flow statement 

for the half year then ended. These financial statements are the responsibility of the company’s 

management. Our responsibility is to express an independent 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 plan and perform the audit to obtain reasonable assurance whether the financial 

statements are free of material misstatement. An audit includes examining, on a test basis, evidence 

supporting the amounts and disclosures in the financial statements. An audit also includes assessing the 

accounting principles used and significant estimates made by management, as well as evaluating the 

overall financial statement presentation. We believe that our audit provides a reasonable basis for our 

opinion. 

In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards 

(BAS) and Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the 

company’s affairs as at 30 June 2008 and of the results of its operations and its cash flows for the half 

year 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 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; and 

c) the company’s balance sheet and profit and loss account dealt with by the report are in 

agreement with the books of account. 

Dhaka, 5 August 2008 

Sd/- 




As at 

As at 

30 June 2008 31 December 2007 

Assets Notes Taka Taka 

Property, plant and equipment: 4 

At cost/revaluation 405,841,074 386,982,537 

Less: Accumulated depreciation 124,935,994 113,364,906 

280,905,080 273,617,631 

Capital work in progress 5 66,614,372 55,520,930 

Current assets : 

Raw materials-in-transit 61,773,460 88,730,455 

Inventories 6 388,457,845 309,076,868 

Trade debtors 4,739,162 8,252,162 

Other receivables 2,841,943 - 

Advance income tax 7 48,151,053 28,084,925 

Advances, deposits and prepayments 8 34,278,283 22,208,847 

Inter-company receivables 9 807,937,372 726,212,549 

Cash and bank balances 10 20,246,710 8,022,605 

1,368,425,828 1,190,588,411 

1,715,945,280 1,519,726,972 

Equity and liabilities 


Balance Sheet as at 30 June 2008 

Shareholders' equity: 

Share capital 11 250,000,000 250,000,000 

Revaluation reserve 12 65,495,689 65,495,689 

Retained earnings 373,578,115 278,771,668 

689,073,804 594,267,357 

Current liabilities : 

Bank overdraft 13 62,198,282 20,075,993 

Short term loan 14 684,959,151 663,190,412 

Withholding tax and VAT 105,651 83,154 

Trade creditors and accruals 15 97,829,299 115,699,929 

Provision for tax 16 106,922,803 49,622,803 

952,015,186 848,672,291 

Deferred tax liability 17 74,856,290 76,787,324 

1,715,945,280 1,519,726,972 

The annexed notes 1 to 24 form an integral part of these financial statements. 

Sd/- Sd/- Sd/- 

Managing Director Director Company Secretary 

As per our report of same date. 


Sd/- 

Auditors 



Profit and Loss Account 


Particulars 

Notes 

Half year ended 30 

Half year ended 30 June 2008 

June 2007 

(unaudited) 

Unit 1 Unit 2 Unit 3 Total Total 

Taka Taka Taka Taka Taka 

Sales 18 603,021,358 285,196,862 181,256,814 1,069,475,034 667,630,727 

Cost of sales 19 (430,655,401) (260,080,215) (163,946,016) (854,681,632) (544,517,630) 

Gross profit 172,365,957 25,116,647 17,310,798 214,793,402 123,113,097 

Other income 20 1,424,401 225,341 458,742 2,108,484 464,527 

173,790,358 25,341,988 17,769,540 216,901,886 123,577,624 

Administrative, selling and 

distribution expenses: 21 14,215,585 5,863,930 3,296,052 23,375,567 21,057,953 

159,574,773 19,478,058 14,473,488 193,526,319 102,519,671 

Financing cost 12,863,404 14,404,538 8,178,996 35,446,938 18,416,807 

146,711,369 5,073,520 6,294,492 158,079,381 84,102,864 

Provision for contribution to WPPF 7,335,568 253,676 314,724 7,903,968 4,205,143 

Profit before tax 139,375,801 4,819,844 5,979,768 150,175,413 79,897,721 

Provision for tax: 

Current tax 53,500,000 1,200,000 2,600,000 57,300,000 26,500,000 

Deferred tax (income)/expense 17 (1,939,737) (13,476) 22,179 (1,931,034) 1,993,188 

51,560,263 1,186,524 2,622,179 55,368,966 28,493,188 

Profit after tax 87,815,538 3,633,320 3,357,589 94,806,447 51,404,533 

The annexed notes 1 to 24 form an integral part of these financial statements. 

Sd/- Sd/- Sd/- 

Managing Director Director Company Secretary 

As per our report of same date. 


Sd/- 

Audirots 



Statement of changes in shareholders' equity 


Particulars 

Revaluation Tax holiday Retained 

Share capital reserve reserve earnings Total 


Balance as at 31 December 2006 250,000,000 65,495,689 39,635,436 173,611,158 528,742,283 

Net profit after tax for the period (unaudited) - - - 51,404,533 51,404,533 

Transferred to tax holiday reserve - - 1,129,128 (1,129,128) - 

Transferred from tax holiday reserve - - (40,764,564) 40,764,564 - 

Balance as at 30 June 2007 250,000,000 65,495,689 - 264,651,127 580,146,816 

Balance as at 31 December 2007 250,000,000 65,495,689 - 278,771,668 594,267,357 

Net profit after tax - - - 94,806,447 94,806,447 

Balance as at 30 June 2008 250,000,000 65,495,689 - 373,578,115 689,073,804 



Cash Flow Statement 


A. Cash flows from operating activities : 

Half year ended Half year ended 

30 June 2008 30 June 2007 

(unaudited) 

Taka 

Taka 

Profit before tax 150,175,413 79,897,721 

Adjustment for items not involving movement of cash : 

Depreciation 11,571,089 10,888,587 

161,746,502 90,786,308 

Changes in working capital : 

Raw material in transit 26,956,995 52,267,185 

Inventories (79,380,977) 46,875,659 

Trade debtors 3,513,000 (31,804,947) 

Other receivables (2,841,943) - 

Advances, deposits and prepayments (12,069,436) 1,550,184 

Due from inter-company (81,724,823) (76,654,655) 

Short term loan 21,768,739 (44,441,089) 

Withholding tax and VAT 22,497 (320,851) 

Trade creditors and accruals (17,870,630) (16,930,264) 

(141,626,578) (69,458,778) 

20,119,924 21,327,530 

Advance income tax paid (20,066,128) (18,463,158) 

Net cash provided by operating activities 53,796 2,864,372 

B. Cash flows from investing activities : 

Capital work in progress (28,468,598) (1,191,871) 

Acquisition of property, plant and equipment (1,483,382) (2,233,610) 

Net cash used in investing activities (29,951,980) (3,425,481) 

C. Cash flows from financing activities : 

Payment of Finance lease liabilities - (235,731) 

Net cash flows from financing activities - (235,731) 

D. Net cash inflow/(outflow) from total activities (A+B+C) (29,898,184) (796,840) 

E. Opening cash and cash equivalents (12,053,388) (26,326,745) 

F. Closing cash and cash equivalents (D+E) (41,951,572) (27,123,585) 

Closing cash and cash equivalents represent: 

Cash and bank balances 20,246,710 1,975,581 

Bank overdraft (62,198,282) (29,099,166) 

(41,951,572) (27,123,585) 



Notes to the financial statements 

as at and for the half year ended 30 June 2008 

1. Background of the company 

The company was incorporated on 29 October 1995 as a private limited company. The company went into 

commercial operations on 1 July 1998. The principal activity of the company, during the period under review, 

was manufacturing and marketing of a number of agrochemical and consumer products. Most of the sales are 

made to Advance Chemical Industries Limited (ACI Limited), which is responsible for marketing these 

products. 

2. Basis of preparation 

2.1 Statement of compliance 

The accounts have been prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh 

Financial Reporting Standards (BFRS) and the Companies Act 1994. The elements included in the financial 

statements have been measured at historical cost except for property, plant and equipment, which are stated at 

revalued amount. 

2.2 Basis of measurement 

The financial statement have been prepared on the historical cost basis except for property, plant and 

equipment, which are stated at revalued amount. 

2.3 Functional and presentational currency and level of precision 

The financial statements are prepared in Bangladesh Taka (Taka/Tk), which is the company's functional 

currency. All financial information presented in Taka and has been rounded off to the nearest integer. 

2.4 

Use of estimates and judgement 

The preparation of financial statements in conformity with BAS/BFRS require management to make 

judgements, 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 underling assumptions are reviewed on an on going basis. Revisions to accounting estimates are 

recognised in the period in which the estimates are revised and in any future periods affected. 

In particular, information about significant areas of estimation uncertainty and critical judgements in applying 

accounting policies that have the most significant effect on the amounts recognised in the financial statements 

is included in the following notes : 

Note 6 

Note 15 

Note 16 

Note 17 

Inventory valuations 

Provision for expenses 

Provision for taxation 

Deferred tax liabilities 


2.5 

Reporting period 

The reporting period of the company covers six months from 1 January to 30 June. 

3. Significant accounting policies 

The accounting policies set out below have been applied consistently to all periods presented in these financial 

statements. 

3.1 Property, plant and equipment 

3.1.1 Recognition and measurement 

These are stated at cost or revaluation less accumulated depreciation subject to a write down to recoverable 

amount. Capital work in progress represents the cost incurred for acquisition and/or construction of property, 

plant and equipment that were not ready for use at the end of 30 June 2008 and these are stated at cost. 

The property, plant and equipment of the company were revalued in the year 2004 by a firm of professional 

valuers on the basis of open market value. 

3.1.2 Depreciation 

Depreciation is provided on straight line method and charged at 50% of normal rates for additions in the period 

of addition and no depreciation is charged on disposal or adjustment in the period of disposal or adjustment. 

Rates of depreciation are stated below: 

Category Rate (%) 

Land Nil 

Building 2.5 

Plant 10 

Equipment and machinery 10-20 

Electric and other appliances 10-20 

Furniture and fixtures 10 

Vehicles 20 

Deep tube well 10 

The revalued property, plant and equipment are depreciated by writing off their net book value at the date of 

revaluation over their remaining estimated useful life. 

3.1.3 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 servicing of property, plant and equipment are 

recognized in the profit and loss account as incurred. 

3.2 Cash and bank balances 

These are cash and bank balances which are held and available for use by the company without any restriction. 


3.3 Provision 

A provision is recognized in the balance sheet when the company has a legal or constructive obligation as a 

result of past event, it is probable that an outflow of economic benefit will be required to settle the obligation 

and a reliable estimate can be made of the amount of the obligation. 

3.4 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 be reasonably estimated. 

3.5 Income tax 

Income tax comprises of both current tax and deferred tax. 

3.5.1 Current tax 

The applicable tax rate for ACI Formulations Limited is currently 37.5%. Provision for taxation has been 

made on the basis of Finance Ordinance 2008 

3.5.2 Deferred tax 

Deferred tax has been provided using the liability method for all temporary timing differences arising between 

tax bases of asset and liabilities and their carrying value for financial reporting purpose. Adjustment arising 

from such accounting has been recorded in the current year's profit and loss account. The tax rate prevailing at 

the balance sheet date is used to determine deferred tax 

The deferred tax asset/income or liability/expenses does not create a legal liability/recoverability to and from 

the income tax authority. 

3.6 Foreign currency 

Transaction in foreign currencies during the period are translated to taka at the foreign exchange rates 

prevailing on the transaction date. All monetary assets and liabilities denominated in foreign currencies at 

balance sheet date get retranslated to Taka at the rates of exchange prevailing on the date, if any. Exchange 

differences arising on conversion are recognized in the profit and loss account. 

3.7 Revenue recognition 

3.7.1 Goods sold 

Revenue from sale of goods is recognized on the basis of invoice value upon delivery of goods to the buyers. 

3.7.2 Services 

Revenue from services rendered is recognized in the profit and loss account when the bills are raised to the 

customer. 


3.8 Inventories 

Inventories, except material-in-transit, are valued at lower of weighted average cost and expected net realisable 

value. 

As per Bangladesh Accounting Standard 2: Inventories, net realisable value is the estimated selling price in the 

ordinary course of business less the estimated costs of completion and the estimated costs necessary to make 

the sale. 

3.9 Finance expense 

Finance expenses comprise of bank interest and bank charges. 

3.10 Cash flow statement 

Cash flow from operating activities have been presented under indirect method. 

3.11 Workers' profit participation fund 

The company has created a fund for workers as Workers' Profit Participation Fund and 5% of profit before 

charging this rate has been transferred to this fund. 


4. Property, plant and equipment 

4.1 At cost 

Cost Depreciation Written 

Balance Balance Balance Balance down value 

Name of assets as at Addition as at as at Charged as at as at 

1 January during 30 June 1 January during 30 June 30 June 

2008 the period 2008 2008 the period 2008 2008 

Taka Taka Taka Taka Taka Taka Taka 

Own assets 

Land: 

Unit 1 15,149,107 1,296,744 16,445,851 - - 16,445,851 

Building: 

Unit 1 81,170,863 81,170,863 12,438,268 1,014,636 13,452,904 67,717,959 

Unit 2 13,858,595 13,858,595 2,014,748 173,232 2,187,980 11,670,615 

Unit 3 13,733,172 13,733,172 1,441,901 171,665 1,613,566 12,119,606 

Plant: 

Unit 1 46,308,613 46,308,613 30,105,078 2,315,431 32,420,509 13,888,104 

Unit 2 62,358,496 17,375,156 79,733,652 31,213,115 3,552,304 34,765,419 44,968,233 

Unit 3 12,464,191 12,464,191 5,364,328 623,210 5,987,538 6,476,653 

Equipment and machinery: 

Unit 1 9,930,003 9,930,003 5,588,869 496,500 6,085,369 3,844,634 

Unit 2 1,202,670 1,202,670 119,486 60,133 179,619 1,023,051 

Unit -3 282,765 282,765 14,138 12,838 26,976 255,789 

Electric and other appliances: 

Unit 1 5,475,920 5,475,920 2,708,326 301,070 3,009,396 2,466,524 

Unit 2 3,428,628 3,428,628 776,985 171,431 948,416 2,480,212 

Unit 3 2,353,528 2,353,528 320,503 131,357 451,860 1,901,668 

Furniture and fixtures: 

Unit 1 3,199,823 186,639 3,386,462 1,529,630 164,657 1,694,287 1,692,175 

Unit 2 5,015,319 5,015,319 1,506,248 250,766 1,757,014 3,258,305 

Unit 3 674,190 674,190 142,646 33,710 176,356 497,834 

Vehicles: 

Unit 1 5,568,500 5,568,500 5,090,460 177,661 5,268,121 300,379 

Deep tube well: 

Unit 1 140,000 140,000 133,000 7,000 140,000 - 

282,314,383 18,858,539 301,172,922 100,507,729 9,657,601 110,165,330 191,007,592 


4.2 Revaluation 

Revaluation Depreciation on revaluation Written 

Balance Balance Balance Balance down value 

Name of assets as at Addition as at as at Charged as at as at 

1 January during 30 June 1 January during 30 June 30 June 

2008 the period 2008 2008 the period 2008 2008 

Taka Taka Taka Taka Taka Taka Taka 

Own assets 

Land: 

Unit 1 61,312,837 - 61,312,837 - - - 61,312,837 

Building: 

Unit 1 6,634,644 - 6,634,644 580,531 82,933 663,464 5,971,180 

Unit 2 2,472,218 - 2,472,218 216,318 30,903 247,221 2,224,997 

Unit 3 848,461 - 848,461 74,242 10,606 84,848 763,613 

- 

Plant: - 

Unit 1 8,193,868 - 8,193,868 2,867,854 409,693 3,277,547 4,916,321 

Unit 2 6,744,849 - 6,744,849 2,360,697 337,242 2,697,939 4,046,910 

Unit 3 16,626,917 - 16,626,917 5,819,421 831,346 6,650,767 9,976,150 

Equipment and machinery: 

Unit 1 323,824 - 323,824 113,338 76,767 190,105 133,719 

Unit 2 77,018 - 77,018 26,956 (3,338) 23,618 53,400 

- - 

Electric and other appliances: 

Unit 1 704,065 - 704,065 246,425 35,203 281,628 422,438 

Unit 2 (363,947) - (363,947) (127,382) (3,906) (131,288) (232,659) 

Furniture and fixtures: 

Unit 1 160,215 - 160,215 56,076 8,011 64,087 96,129 

Unit 2 (266,855) - (266,855) (93,400) (13,343) (106,743) (160,113) 

Unit 3 (18,310) - (18,310) (6,409) (916) (7,325) (10,985) 

Vehicles: 

Unit 1 1,184,348 - 1,184,348 710,610 110,587 821,197 363,151 

Deep tube well: 

Unit 1 34,000 - 34,000 11,900 1,700 13,600 20,400 

Effect of revaluation 104,668,152 - 104,668,152 12,857,176 1,913,488 14,770,664 89,897,488 

Total (30 June 2008) 386,982,535 18,858,539 405,841,074 113,364,905 11,571,089 124,935,994 280,905,080 

Total (31 December 2007) 375,483,450 11,499,087 386,982,537 91,341,509 22,023,397 113,364,906 273,617,631 


5. Capital work in progress 

As at 

As at 30 June 2008 

31 December 2007 

Building and Plant and 

furniture machinery Total Total 


Opening balance 2,276,192 53,244,738 55,520,930 2,349,190 

Addition during the period - 28,468,598 28,468,598 61,777,097 

Transferred to property, plant and equipment - (17,375,156) (17,375,156) (8,605,357) 

Closing balance 2,276,192 64,338,180 66,614,372 55,520,930 

6. Inventories 

As at 

As at 


Taka 

Taka 

Raw materials 247,161,349 213,184,257 

Packing materials 101,270,202 60,050,902 

Finished goods 31,402,200 30,126,536 

Other inventories (engineering stores and diesel) 8,624,094 5,715,173 

388,457,845 309,076,868 

In view of innumerable items of inventories and diversified quantities it is not feasible to disclose quantities against each item 

of inventory. 

7. Advance income tax 

Opening balance 28,084,925 42,775,046 

Add: Paid during the period 20,066,128 43,394,260 

48,151,053 86,169,306 

Less: Adjustment during the period - 58,084,381 

48,151,053 28,084,925 

8. Advances, deposits and prepayments 

Advance to suppliers 28,573,639 18,343,491 

Interest receivable against advance - 51,886 

Security money and tender deposits 4,614,370 3,813,470 

Prepayments-insurance 1,090,274 - 

34,278,283 22,208,847 

9. Inter-company receivables 

ACI Limited 807,887,512 726,212,549 

ACI Motors Limited 49,860 - 

807,937,372 726,212,549 

These represent the amount receivable for sales made and for overheads . 


10. Cash and bank balances 

As at 

As at 


Taka 

Taka 

Cash in hand 150,000 150,000 

Cash at bank: 

Agrani Bank Ltd. 2,826,253 384,902 

Citibank, N.A. - 7,117,582 

The Hongkong and Shanghai Banking Corporation Ltd. (HSBC) 16,802,112 - 

Standard Chartered Bank (SCB) - 80,000 

Commercial Bank of Ceylon Ltd. (CBC) - 6,718 

AB Bank Ltd. 366,375 82,714 

Sonali Bank Ltd. - 148,504 

Uttara Bank Ltd. 101,145 51,360 

Janata Bank Ltd. 825 825 

20,096,710 7,872,605 

20,246,710 8,022,605 

11. Share capital 

Authorised : 

50,000,000 

Ordinary shares of Tk 10 each 500,000,000 500,000,000 

Issued, called and paid up : 

6,600,000 

5,900,000 

12,500,000 

25,000,000 

Ordinary shares of Tk 10 issued for cash 66,000,000 66,000,000 

Right shares of Tk 10 each issued for cash 59,000,000 59,000,000 

Bonus shares of Tk 10 each 125,000,000 125,000,000 

250,000,000 250,000,000 

Out of the total shares issued, ACI Limited is the holder of 21,737,500 shares. 

The aforesaid share capital was subscribed as under : 

As at 30 June 2008 

As at 31 December 2007 

Name of the subscriber No of shares Value (Tk) No of shares Value (Tk) 

ACI Limited 21,737,500 217,375,000 21,737,500 217,375,000 

Mr M Anis Ud Dowla 2,502,500 25,025,000 2,502,500 25,025,000 

Ms Najma Dowla 2,500 25,000 2,500 25,000 

Dr Arif Dowla 1,000 10,000 1,000 10,000 

Ms Sheema Abed Rahman 1,000 10,000 1,000 10,000 

Mr M. Mosaddek Hossain 1,000 10,000 1,000 10,000 

Ms Shusmita Anis Salam 1,000 10,000 1,000 10,000 

Mr Wajed Salam 1,000 10,000 1,000 10,000 

Dr F H Ansarey 752,500 7,525,000 752,500 7,525,000 

25,000,000 250,000,000 25,000,000 250,000,000 


12. Revaluation reserve 

As at 

As at 


Taka 

Taka 

Revaluation surplus 104,793,102 104,793,102 

Deferred tax (39,297,413) (39,297,413) 

65,495,689 65,495,689 

13. Bank overdraft 

Notes 

Standard Chartered Bank 13.1 34,057,670 9,702,685 

The Hongkong and Shanghai Banking Corporation Ltd. - 6,117,223 

Standard Chartered Bank (current account) 7,219,606 4,256,085 

Commercial Bank of Ceylon Ltd. 13.2 19,645,879 - 

Citibank, N.A. (current account) 1,275,127 - 

62,198,282 20,075,993 

13.1 Standard Chartered Bank 

The company is enjoying a bank overdraft facility from Standard Chartered Bank (SCB) under the following terms and 

conditions: 

Limit: Tk 10,000,000 

Purpose: 

Tenor: 

Working capital 

On demand 

Security: i) Demand Promissory Note and Letter of Continuation for Tk 540,000,000 each. 

ii) Registered first charge over stock and book debts of the company with HSBC and CBC where SCB's 

share is at least Tk 530,000,000. 

iii) First charge by way of registered mortgage over the tangible fixed assets of the company both existing 

and future to be shared pari-passu with IPDC. Standard Chartered Bank's share should be at least Tk 

15,000,000. 

iv) 

v) 

Corporate guarantee from ACI Limited supported by Board Resolution. 

Agreement and indemnity relating to the issuing of documentary credits. 

vi) Board Resolution of the company covering entire facility. 

13.2 Commercial Bank of Ceylon Ltd. 

The company is enjoying a bank overdraft facility from Commercial Bank of Ceylon Ltd. under the following terms and 

conditions: 

Limit: Tk 20,000,000 

Purpose: 

Tenor: 

Security: 


On demand 

Registered first hypothecation charge over stocks and book debts on pari-passu basis with SCB and HSBC, 

CBC's share being Tk. 180,000,000. 

Interest rates on the facilities mentioned under notes 13.1 and 13.2 range from 11.50% to 12.50%. 


14. Short term loan 

As at 

As at 

Notes 30 June 2008 31 December 2007 

Taka 

Taka 

Standard Chartered Bank : 

Loan Against Trust Receipt (LATR) 14.1 164,712,755 151,298,278 

Revolving loan 14.2 45,846,641 39,984,371 

Short term loan 14.3 50,000,000 100,000,000 

The Hongkong and Shanghai Banking Corporation Ltd. : 

Import cash limit 14.4 230,370,314 286,515,534 

Short term loan 14.5 - 30,000,000 

Citibank, N.A.: 

Loan Against Trust Receipt (LATR) 14.6 78,980,441 55,392,229 

Commercial Bank of Ceylon Ltd.: 

Loan Against Trust Receipt (LATR) 14.7 15,049,000 - 

Short term loan 14.8 100,000,000 - 

684,959,151 663,190,412 

14.1 Standard Chartered Bank - Loan Against Trust Receipt (LATR) 

Amount: Tk 400,000,000 

Purpose: 

Tenor: 

Payment: 

To retire the documents under Letter of Credits issued by the Standard Chartered Bank (SCB). 

120 days 

On maturity each Trust Receipt outstanding will be adjusted by debiting company's bank account and 

quarterly interest will be charged into the same account. 

Security: Same as note 13.1 

14.2 Standard Chartered Bank - Revolving loan 

Amount: Tk 60,000,000 

Purpose: 

Tenor: 

Payment: 

To finance payment of Government duty and tax against import of raw materials and also for procurement of 

local raw materials against suppliers' invoice. 

120 days 

On maturity each Revolving Loan outstanding will be adjusted by debiting company's bank account and 

quarterly interest will be charged into the same account. 



14.3 Standard Chartered Bank - Short term loan 

Amount: Tk 100,000,000 

Purpose: 

Tenor: 

Payment: 

Working Capital Finance 

120 Days 

The above short term loan outstanding to be cleaned up for 5 days per annum. 


14.4 The Hongkong and Shanghai Banking Corporation Limited - Import cash limit 

Amount: Tk 350,000,000 

Purpose: 

Tenor: 

Commission: 

To retire sight documents by creating import loan and usance documents against borrowers acceptance and 

issue shipping guarantee. 

180 days for import loan and deferred payment bill and 30 days for shipping guarantee. 

Commission on deferred payment bill will be charged @ 0.20% for the first quarter and 0.15% for subsequent 

quarters and is subject to change at any time at the bank's discretion. 

Security: i) Demand Promissory Note of Tk 380,320,000 with Letter of Revival and Continuity. 

ii) 

iii) 

Letter of Set Off to set off between different accounts maintained with the bank. 

Corporate guarantee to be executed by ACI Limited for Tk 430,000,000 with supporting Board 

Resolution for credit facilities granted to ACI Formulations Ltd. 

iv) First pari-passu charge with other lenders over the borrower's stock of raw materials, work-in-progress 

and finished goods for Tk. 430,000,000 with the Registrar of Joint Stock Companies (RJSC). 

v) First pari-passu charge with other lenders over the borrower's Book Debts/Receivables for Tk. 

430,000,000 with the Registrar of Joint Stock Companies (RJSC) on pari-passu basis with SCB where 

HSBC's share is Tk. 430,000,000 

14.5 The Hongkong and Shanghai Banking Corporation Limited - Short term loan 

Amount: Tk 200,000,000 

Purpose: 

Tenor: 

To finance working capital requirement i.e. local purchased and duty payments 



14.6 Citibank, N.A. - Loan Against Trust Receipt (LATR) 

Amount: Tk 400,000,000 

Purpose: 

To finance against import of raw materials, spares and finished goods required for normal course of business. 

Tenor: 


Security: i) Registered first charge over stock and book debts of the company for Tk 470,000,000. 

ii) Cross corporate guarantees from ACI Limited and ACI Formulations Limited. 

iii) Personal guarangtee from the sponsors of ACI Limited and ACI Formulations Limited. 

The arrangement permits the use of funds by both ACI Limited and ACI Formulations Ltd. under this agreement. However 

the joint utilisation limit is capped to Tk 400,000,000. 


14.7 Commercial Bank of Ceylon Ltd. - Loan Against Trust Receipt (LATR) 


conditions: 

Limit: Tk 60,000,000 

Purpose: 

Tenor: 

To retire import documents for raw materials and chemicals. 

180 days 


14.8 Commercial Bank of Ceylon Ltd. - Short term loan 


conditions: 

Limit: Tk 100,000,000 

Purpose: 

Tenor: 


180 days 


Interest rates on the facilities mentioned under notes 14.1 to 14.8 range from 11.50% to 12.50%. 

15. Trade creditors and accruals 

As at 

As at 


Taka 

Taka 

Provision for expenses 53,274,502 75,174,184 

Provision for inventory - 1,433,080 

Security money payable 498,694 198,694 

Interest payable - 2,741,837 

Provision for workers' profit participation fund 44,056,103 36,152,134 

97,829,299 115,699,929 

16. Provision for tax 

Opening balance 49,622,803 60,057,184 

Provision made during the period 57,300,000 47,650,000 

Adjustment for the years finalised - (58,084,381) 

Closing balance 106,922,803 49,622,803 


17. Deferred tax liability 

Deductible/ 

Carrying 

(taxable) 

amount on Tax temporary 

30 June 2008 balance sheet base difference 

Taka Taka Taka 

Property, plant and equipment 174,561,741 78,104,752 (96,456,989) 

Provision for bad debt (200,237) - 200,237 

Provision for inventory written off (1,433,080) - 1,433,080 

Taxable temporary difference (94,823,672) 

Applicable tax rate 37.5% 

Deferred tax liability arising from above taxable temporary differences 35,558,877 

Deferred tax liability on revaluation surplus 39,297,413 

Deferred tax liability 74,856,290 

18. Sales 

Half year ended Half year ended 

30 June 2008 30 June 2007 

(unaudited) 

Taka 

Taka 

Agrochemical products 603,021,358 417,946,020 

Consumer products 466,453,676 249,684,707 

1,069,475,034 667,630,727 

97% sales of Unit 1 and Unit 2 and 100% sales of Unit 3 were made to ACI Limited. 

In view of innumerable items of sales and diversified quantities it is not feasible to disclose quantities against each item of 

sales. 


19. Cost of sales 

Unit 1 

Half year ended 


30 June 2007 

Raw Packing (unaudited) 

materials materials Total Total 


Opening inventory 132,261,130 29,721,925 161,983,055 115,944,950 

Add : Purchase 312,456,283 50,850,964 363,307,247 228,362,136 

444,717,413 80,572,889 525,290,302 344,307,086 

Less : Closing inventory 77,919,760 35,469,085 113,388,845 79,302,173 

Consumption 366,797,653 45,103,804 411,901,457 265,004,913 

Overhead and operating expenses (Note 19.1) 20,008,758 15,746,836 

Cost of goods manufactured 431,910,215 280,751,749 

Add: Opening inventory of finished goods 30,126,536 73,963,363 

Less: Closing inventory of finished goods (31,381,350) (29,618,794) 

430,655,401 325,096,318 

Unit 2 


Add : Purchase 198,356,929 88,864,536 287,221,465 91,726,775 

243,814,845 97,794,001 341,608,846 142,414,156 


Consumption 130,170,267 73,411,590 203,581,857 85,676,882 


260,101,065 116,113,713 

Add: Opening inventory of finished goods - - 

Less: Closing inventory of finished goods (20,850) - 

260,080,215 116,113,713 

Unit 3 


Add: Purchase 105,746,648 91,797,861 197,544,509 126,371,330 

141,211,859 113,197,373 254,409,232 142,415,146 


Consumption 85,614,848 71,778,666 157,393,514 97,659,280 


163,946,016 103,307,599 

854,681,632 544,517,630 


19.1 Overhead and operating expenses 

There is no significant expenditure included here which is not directly connected to production. 



30 June 2007 

(unaudited) 



Salary and wages 7,882,523 14,740,997 2,355,397 24,978,917 15,962,641 

Staff welfare and uniforms 1,579,169 3,172,975 551,032 5,303,176 1,361,325 

Fuel and electricity 2,380,030 27,792,393 969,421 31,141,844 15,630,852 

Postage, telephone, fax etc. 73,059 129,520 22,417 224,996 217,939 

Traveling and conveyance 171,217 42,658 9,148 223,023 669,529 

Donation & trade subscription 86,257 137,886 45,547 269,690 209,542 

Insurance premium 566,418 326,778 201,818 1,095,014 802,310 

Office stationery 158,240 209,384 53,071 420,695 330,969 

Entertainment 84,532 137,883 25,160 247,575 98,963 

Training 50,616 81,129 44,851 176,596 4,000 

Rent, rates and taxes 14,755 15,627 153,525 183,907 394,559 

Repairs and maintenance 1,641,042 4,487,085 510,494 6,638,621 5,766,797 

Car running expenses 231,683 671,796 75,042 978,521 192,701 

Lab chemicals and testing fee 109,962 35,264 11,350 156,576 64,062 

Depreciation 5,201,850 4,525,048 1,844,194 11,571,092 10,888,587 

Product development expenses 132,500 126,540 - 259,040 - 

Miscellaneous 44,901 51,245 9,580 105,726 52,318 

20,408,754 56,684,208 6,882,047 83,975,009 52,647,094 

From ACI Limited - 165,000 329,545 494,545 415,104 

From EAC Industrial Ingredients 

(Bangladesh) Limited (formerly 

ACI Trading Limited) 399,996 - - 399,996 400,004 

399,996 165,000 329,545 894,541 815,108 

Charged to cost of sales 20,008,758 56,519,208 6,552,502 83,080,468 51,831,986 

20. Other income 

Scrap sales 1,424,401 225,341 458,742 2,108,484 464,527 

1,424,401 225,341 458,742 2,108,484 464,527 


21. Administrative, selling and distribution expenses 



30 June 2007 

(unaudited) 



Legal and professional charges 40,000 40,000 40,000 120,000 72,839 

Entertainment - - - - 9,133 

Delivery expenses 463,780 460,600 95,600 1,019,980 2,473,785 

Bank charges 12,894 17,497 11,060 41,451 111,898 

Audit fees 33,380 34,328 32,292 100,000 75,000 

Business promotion expenses 760,322 17,170 - 777,492 1,509,893 

Other Expenses 1,208,300 878,352 3,992 2,090,644 2,271,405 

2,518,676 1,447,947 182,944 4,149,567 6,523,953 

Marketing expenses 986,000 - - 986,000 327,000 

Field force expenses 395,000 - - 395,000 219,000 

Distribution expenses 115,000 - - 115,000 34,000 

Administrative expenses 10,200,909 4,415,983 3,113,108 17,730,000 13,954,000 

11,696,909 4,415,983 3,113,108 19,226,000 14,534,000 

14,215,585 5,863,930 3,296,052 23,375,567 21,057,953 

These expenses have been charged by ACI Ltd. to support the activities of ACI Formulations Ltd. as per agreement executed 

between them. 

22. Off balance sheet items 

22.1 Commitments 

On the balance sheet date the company had the following unfunded credit facilities from its bankers: 

Letter of credit: 

Taka 

Citibank, N.A. 48,138,803 

Standard Chartered Bank 159,930,474 

The Hongkong and Shanghai Banking Corporation Ltd. 75,454,199 

283,523,476 

22.2 Contingent liabilities 

Bank guarantee: 

The Hongkong and Shanghai Banking Corporation Ltd. 24,679 

Acceptance: 

Standard Chartered Bank 1,002,154 

Import bills: 

The Hongkong and Shanghai Banking Corporation Ltd. 24,687,325 


23. Related party transaction 

During the period, the company carried out a number of transactions with related parties in the normal course of business. 

The name of related parties, nature of transactions and total transaction value have been set out in accordance with the 

provisions 

Outstanding 

value 

Transaction receivable/ 

Name of related party Relationship Nature of transactions value (payable) 

Taka 

Taka 

ACI Limited Holding - Sale of products 1,042,525,610 807,887,512 

company 

- Overhead 27,830,256 - 

ACI Motors Limited Sister concern Overhead 49,860 49,860 

24. General 

24.1 

Previous year's/period's figures have been rearranged where necessary to conform to current period's presentation. 

24.2 The number of employees drawing Tk 3,000 or more per month as at 30 June 2008 was 154 (31 December 2007: 163). 


Auditors Report under section 135(1) and paragraph 24(1) of part -II of Third Schedule of the Companies 

Act 1994: 

We as the auditors having examined the Financial Statements of ACI Formulations Ltd. for the years ended 31 

December 2003, 2004, 2005,2006 and 2007 and for the period from 1 January 2008 to 30 June 2008 and in 

pursuance of section 135(1) and paragraph 24(1) of part -II of the Third Schedule of the Companies Act 1994 

report that: 

A. The statement of assets & liabilities of the company is as under 

Particulars 30 June 2008 

31 December 

2007 

31 

December 

2006 

31 

December 

2005 

31 December 

2004 

31 

December 

2003 


Property & assets: 

Fixed assets 280,905,080 273,617,631 284,141,938 266,016,801 250,776,298 152,251,064 

Capital work-in -process 66,614,372 55,520,930 2,349,190 20,266,566 21,974,575 658,599 

Current assets 1,368,425,828 1,190,588,411 763,113,611 552,613,101 342,405,832 366,028,209 

Total property and 

assets: 1,715,945,280 1,519,726,972 1,049,604,739 838,896,468 615,156,705 518,937,872 

Liability and capital 

Share capital 250,000,000 250,000,000 250,000,000 250,000,000 250,000,000 66,000,000 

Reserve and surplus 439,073,804 344,267,357 278,742,283 211,474,698 133,851,300 198,034,094 

Shareholders' equity 689,073,804 594,267,357 528,742,283 461,474,698 383,851,300 264,034,094 

Long term liabilities 74,856,290 76,787,324 77,049,191 73,388,085 68,551,577 3,750,000 

Current liabilities 952,015,186 848,672,291 443,813,265 304,033,685 162,753,828 251,153,778 

Total liabilities & 

shareholders' equity 1,715,945,280 1,519,726,972 1,049,604,739 838,896,468 615,156,705 518,937,872 

B. The statement of operating result of the company is as follows 

Particulars 

01.01.08 

to 

30.06.08 

01.01.07 

to 

31.12.07 

01.01.06 

to 

31.12.06 

01.01.05 

to 

31.12.05 

01.01.04 

to 

31.12.04 

01.01.03 

to 

31.12.03 

Sales 1,069,475,034 1,383,118,708 923,862,592 807,101,129 716,849,826 649,772,561 

Cost of sales (854,681,632) (1,170,928,968) (743,306,060) (631,958,750) (527,878,463) (530,832,577) 

Gross profit 214,793,402 212,189,740 180,556,532 175,142,379 188,971,363 118,939,984 

Other income (Nonoperating) 

2,108,484 1,187,728 850,980 (30,646) 1,804,216 1,222,309 

Total income 216,901,886 213,377,468 181,407,512 175,111,733 190,775,579 120,162,293 

Administrative, selling 

and distribution expenses (23,375,567) (52,727,239) (52,615,437) (41,661,924) (81,708,092) (8,917,997) 

Financial costs (35,446,938) (41,794,221) (20,408,472) (17,690,192) (15,588,105) (15,741,103) 

Profit before 

contribution to WPPF 158,079,381 118,856,008 108,383,603 115,759,617 93,479,382 95,503,193 

Provision for contribution 

to WPPF (7,903,968) (5,942,801) (5,419,180) (5,787,981) (4,673,969) (4,923,115) 


Tax expenses (55,368,966) (47,388,133) (35,696,837) (32,348,239) (24,058,189) (13,141,687) 


Tax holiday reserve - (1,129,128) (9,426,409) (16,885,218) (13,323,809) (23,397,877) 

Profit for the year 94,806,447 64,395,946 57,841,177 60,738,179 51,423,415 54,040,514 


C. The statement of cash flows of the company is as under: 

Half year 

ended 

Particulars 30 June 2008 2007 2006 2005 2004 2003 


Cash flows from operating activities 


Adjustment for items not involving movement of cash 

Depreciation 11,571,089 22,023,397 20,440,465 17,961,397 14,619,467 11,750,450 

Loss on revaluation - - - - 124,950 - 


inventory 

- 1,433,080 1,985,805 - - - 

161,746,502 136,369,684 125,390,693 127,933,034 103,549,830 102,330,528 

Changes in working capital 

Inventories (52,423,982) (55,483,282) (94,294,584) (58,753,030) 3,327,626 (41,456,923) 

Trade debtors 3,513,000 (8,062,324) 960,163 6,100,000 (4,448,000) 25,305,370 

Other receivables (2,841,943) - 5,929,677 (874,475) (5,055,202) - 

Advances, deposits 

and prepayments 

(12,069,436) 3,669,213 (16,128,060) (27,530,518) (9,777,017) (8,092,915) 

Due from intercompany 

(81,724,823) (362,376,118) (107,222,740) (142,059,807) 41,376,290 (110,668,016) 

Short term loan 21,768,739 393,290,618 99,705,864 106,107,261 (110,864,643) 88,282,656 

Withholding tax and 

VAT 

22,497 (396,875) (164,545) (229,389) 116,573 642,343 

Trade creditors and 

accruals 

(17,870,630) 30,253,381 23,096,934 1,308,634 11,535,817 4,372,359 

Income tax paid (20,066,128) (58,084,381) (21,907,421) - - - 

(161,692,706) (57,189,768) (110,024,712) (115,931,324) (73,788,556) (41,615,126) 

Net cash provided by 

operating activities 

53,796 79,179,916 15,365,981 12,001,710 29,761,274 60,715,402 

Cash flows from investing activities 

Capital work in progress (28,468,598) (53,171,740) (18,547,018) (26,342,874) (21,315,976) (658,599) 

Acquisition of property, 

plant and equipment (1,483,382) (11,499,088) (2,101,209) (5,151,017) (6,877,587) (9,737,851) 

Net cash used in investing ___________________________________________________________________________________ 

activities ____(29,951,980) (64,670,828) (20,648,227) (31,493,891) (28,193,563) ( 10,396,450) 

Cash flows from financing activities 

Share capital - - - - 44,500,000 - 

Share money deposit - - - - - 14,500,000 

Long term loan 

(Secured) 

- - - - (3,750,000) (3,750,000) 

Interim dividend paid - - - - (25,000,000) (66,000,000) 

Dividend distribution tax - - - - (9,100,000) - 

Obligation under finance 

lease - current portion - 

- - 67,926 (384,891) - 

Obligation under finance 

lease - long term portion - 

(235,731) (511,732) (511,731) - - 

Net cash flows from 

financing activities - 

(235,731) (511,732) (443,805) 6,265,109 (55,250,000) 


Net cash 

inflow/(outflow) from 

(29,898,184) 

total activities 

Opening cash and cash 

equivalents (12,053,388) 

Closing cash and cash 

equivalents (41,951,572) 

14,273,357 (5,793,978) (19,935,986) 7,832,820 (4,931,048) 

(26,326,745) (20,532,767) (596,779) (8,429,599) (3,498,551) 

(12,053,388) (26,326,745) (20,532,765) (596,779) (8,429,599) 

Closing cash and cash equivalents represent 

Cash in hand and at 

bank 

20,246,710 8,022,605 2,800,314 3,055,352 2,988,834 1,187,514 

Bank overdraft (62,198,282) (20,075,993) (29,127,059) (23,588,117) (3,585,613) (9,617,113) 

D. Dividend declared: 

(41,951,572) (12,053,388) (26,326,745) (20,532,765) (596,779) (8,429,599) 

01.01.08 01.01.07 01.01.06 01.01.05 01.01.04 01.01.03 

Particulars 

to to to to to to 

30.06.08 31.12.07 31.12.06 31.12.05 31.12.04 31.12.03 

Cash dividend (interim) 0% 0% 0% 0% 10% 100% 

Stock dividend (bonus share) 0% 0% 0% 0% 100% 0% 

E. The company was incorporated as a private limited company under the Companies Act 1994, on 29 

October 1995. Subsequently it was converted to Public Limited Company on 04 May 2005, by special 

resolution. 

F. The company has no subsidiaries, but it is a subsidiary of ACI Ltd. 

G. The company did not prepare any account for any period subsequent to 30 June 2008 

H. Figures related to previous years have been rearranged where considered necessary. 

Dhaka , 25 September 2008 

Sd/- 




Auditors certificates regarding calculations of EPS and other ratios as per Direct Listing Rules-2006 

We have examined the following earning per share (EPS) and other ratios of ACI Formulations Ltd. for the 

years ended 31 December 2003, 2004, 2005, 2006, 2007 and for the period ended 30 June 2008, which have been 

produced by the management of the company to us. The preparation of the EPS and other ratios is the 

responsibility of the company’s management. Our responsibility is to review them and certify as to whether 

they have been properly prepared using acceptable principles on the basis of audited financial statements for 

the years ended 31 December 2003, 2004, 2005, 2006 and 2007 and for the half year ended 30 June 2008. 

Based on our review, we certify that the company has properly prepared the following EPS and other ratios 

using acceptable principles on the basis of financial statements for the years ended 31 December 2003, 2004, 

2005, 2006 and 2007 and for the half year ended 30 June 2008. 

A. 

B. 

C. 

D. 

Particulars 

30 June 

2008 

(For 6 

2007 2006 2005 2004 2003 

months) 

Liquidity Ratio: 

Current ratio 1.44 1.40 1.72 1.82 2.10 1.46 

Quick ratio 0.96 0.93 0.95 1.00 0.94 0.69 

Operating Ratio: 

Accounts receivable 1.38 2.52 2.97 4.25 5.11 5.60 

turnover ratio 

Inventory turnover 2.02 3.16 2.52 2.89 2.76 3.09 

ratio 

Asset turnover ratio 0.66 1.08 0.98 1.11 1.26 1.44 

Profitability Ratio: 

Gross profit ratio 20% 15% 20% 22% 26% 18% 

Operating profit ratio 18% 12% 14% 17% 15% 17% 

Net profit ratio 9% 5% 7% 10% 9% 12% 

Return on asset ratio 12% 13% 14% 18% 19% 25% 

Return on equity ratio 14% 11% 13% 17% 17% 29% 

Earning per share(EPS) 3.79 2.62 2.69 3.10 2.94 5.87 

in Taka 

Solvency Ratio 

Times interest earned 5.46 3.84 6.31 7.54 7.00 7.07 

ratio 

Debt to equity ratio* - - - 0.0005 0.0019 0.0142 

Bad debt ratio 

Not Not Not Not Not Not 

applicable applicable applicable applicable applicable applicable 

* Calculated considering long term debt portion only 


sd/- 


Chartered Accountant 


Additional Disclosure 

A. SEC’s Observations/queries 

Observation/ Query - 1: 

Paid up capital of ACI Formulations Ltd. was raised from Tk. 6.60 crore to Tk. 25.00 crore in 2004 without 

consent of the commission. 

Company’s response: 

The paid up capital of ACI Formulations Limited was raised from Tk. 66 million to Tk. 250 million on 

different dates as shown below: 

Sl. Date Description Remarks 

1 01-05-2004 From Tk. 66 million to Tk. 100 million Right share 

2 29-09-2004 From Tk. 100 million to Tk. 125 million Right share 

3 29-09-2004 From Tk. 125 million to Tk. 250 million Bonus share 

Proper approvals were taken from RJSC for raising share capital. 

Documents (Gazette notification no SEC/CMRRCD/2001-18/343/02-05, dated 2 October 2004) available to us 

confirms that the provision required for taking prior approval from SEC for raising share capital was 

introduced on 2 October 2004 i.e after the date ACIFL last increased its Paid up Capital. Accordingly, as it 

appears, there is no question of anomaly here as the share capital was increased prior to the effective date of 

the said regulation. 


RJSC certified special resolutions regarding conversion of the company from private to public limited 

company and changing of denomination of shares are not submitted. 


The RJSC certified special resolution regarding conversion of the company from Private to Public Limited 

Company and changing denomination of shares have been submitted to SEC. 


Audited F/S as of 31.12.2005 is not submitted. 


The audited financial statements as at 31 December 2005 have been submitted to SEC. 


Statement of holding AGM is not submitted. 


Statement of holding AGMs has been submitted to SEC and shown in page 11 of Information Document. 


Status of loan including information concerning loan default (if any) of the company to be incorporated. 

Company response: 

Status of loan has been incorporated in pages 28 and 36 of Information Document. 


Statement as per B (1) (f) to be furnished in the cover page. 


Statement as per B(1) (f) has been furnished in Information Document as advised. 




Existing shareholders shall offload the shares, not the company. 


Necessary revision has been made in Information Document as advised. 


Declaration about listing should not be in future tense. 


Declaration has been revised in Information Document as advised. 


Inclusion of full credit rating report is preferable. 


Full credit rating report has been incorporated in the Information Document (Page- 45-55). 

B. DSE’s Observations/ queries 


Detailed location of the production sites of ACI Formulations Ltd. Please intimate about effluent treatment 

arrangements in all the production sites of ACI Formulations Limited. 


Detailed location of the production sites of ACI Formulations Ltd has been incorporated in the page-19 of 

Information document under caption Information in respect of Plants and Property. 

Effluent treatment arrangements 

The plant has its own effluent treatment plant with incinerator facility. Effluent treatment plant consists of 

collection pit, neutralization pit, chemical dosing pit, bulk agitation pond, discharge pump etc. Incinerator 

facility consists of main chamber and secondary chamber, burner, fuel tank, scrubber, exhaust blower, 

chimney, scrubber water circulation tank, scrubber water circulation pump. A flow chart of Incinerator facility 

has been submitted to DSE. 


Detailed list of the raw materials used for the production units of ACI Formulations Limited. Whether any 

raw materials used for the production of ACI Formulations Limited need clearance from the Directorate of 

Environment of the Government, if so, please inform your position regarding environmental clearance. 


A list of the Registration Number of each raw material along with the brand names of the finished goods has 

been submitted to DSE. 

For manufacturing and marketing of Crop care and public health products we need to obtain the permission 

(registration) from Plant Protection Wing (PPW) under the Directorate of Agriculture (Khamar Bari). To get 

product registration a manufacturer has to go long process of the fulfilling all the stringent procedures as 

detailed in the Bangladesh Pesticides Rules 1985. 


It is observed that profit before tax and after tax of ACI Formulations Limited are showing negative growth 

for the year 2006 and 2007 which does not comply with regulation 2 (iv) of Direct Listing Regulations 2006. 




After the establishment of ACI Formulations Limited in 1998 the company never experienced any loss; rather 

it has increased its turnover from Tk. 74 million of 1998 to Tk. 1.3 billion in 2007 showing an impressive 

growth over the years. The main motto of the company was to gain market share, strengthening its position in 

the growing agriculture sector and then convert this revenue growth into profit. You will appreciate that to 

arrive at a dominant market leader it takes time, effort and customers trust backed by quality products and 

services. Over a period of 10 years ACIFL has reached to a formidable position competing against the multinational 

and local companies dealing with imported products. During this last five years the company has 

been able to maintain sustainable profit before tax and PAT without major deep even if we consider year to 

year comparison. It is worth mentioning here that ACIFL operates in a sector where millions of poor farmers 

are being benefited by products which not only improve their livelihood through increased agricultural 

production but also contributes towards reducing national food deficit. 

The efforts which have been made in past years in consolidating Company’s position in the market through 

consistent pricing policy, higher production, introduction of new products and non-compromising attitude 

towards quality has created a platform wherefrom we expect that ACIFL will be able to realize benefits in 

years to come. 

Moreover, our interpretation of the clause 2 (iv) as referred by you is that out of last five years, at least in three 

years, Company should make profit and again with steady growth. Against this condition, when two years 

loss is allowed within 5 years, ACIFL has made profit in all 5 years thereby exceeding the requirement with 

wide margin. With regard to growth, if you consider CAGR (Compound Average Growth Rate) an accepted 

norm for judging growth of the Company, ACIFL’s CAGR of operating profit (EBIT – which is the best way to 

judge a company’s real performance) for last five year was positive 9.7%. However, there was a slight drop in 

PAT (Profit after Tax) which we can not deny in year to year basis due to the expiry of the tax holiday period 

of all units which attracted additional tax expenses. Considering all these factors we firmly believe that in 

both counts i.e. profit and growth ACIFL has maintained the provision of regulation 2(iv). Recent result 

further shows that through high turnover supported by good product mix and control over costs, Company 

has been able to reduce the impact of higher tax with significant growth in PAT as evidenced from the 

performance of 2008 and beyond. The performance of 2008 indeed gives us confidence that Company is in 

strong footing to grow aggressively in years to come. 


It is observed that there is no dividend policy of the company. Because you did not declare any dividend after 

the year 2004 although the company made profit in these years. What is the company’s future plan regarding 

dividend policy 


As you know ACI Formulations Limited is in the growth mode which requires huge additional working 

capital involvement on a year to year basis. As a prudent company we had the plan to generate fund 

internally through retention of profit. This strategy was taken to maximize the wealth of the shareholders. 

Moreover, ACIFL is a non listed company and ACI Limited is the major shareholders of ACIFL. This 

relationship allowed ACIFL to generate fund internally by retaining profit. After availing the opportunity to 

becoming Publicly Limited Company ACIFL will follow the policy of declaring good dividend maintaining a 

consistent pay out ratio as currently its parent company ACI Limited is applying. The most recent 

performance as well as projections of future years give an impression that Company will be able to maintain 

good dividend declaration for its valued shareholders. 


What are the reasons for the declining trend in ROE and ROA from the year 2004 to 2007 of the company 




As you know the ROA is the functions of total assets (Fixed assets + Working capital + Capital work-inprogress) 

and operating profit on sales. On the other hand the ROE is the functions of total Equity (Paid up 

capital + retained earnings + tax holiday reserve + revaluation surplus) and net profit on sales. In the year 

2003 the ROA and ROE was exceptionally high due to lower assets and equity base and higher profit 

contributed by adopting strategy of dealing with lower range of products with higher margin. During the 

period Company also enjoyed tax holiday for the profit earned from all units of ACI Formulations Limited. 

Subsequently Company has taken growth strategy to become market leader in the agriculture sector. To cater 

the growth, ACI Formulations Limited has increased its investment over the last five years to allow it to : 

Enhance production capacity by investing in fixed assets and infrastructure including laboratory 

facilities. 

Enhance operational capacity by investing in working capital and human capital. 

Develop the market 

Capture more market share 

Build trust with customers 

Build brand image 

Increase distribution network 

Provide complete solution to the farmers not only selling products. 

The above steps along with the revaluation of fixed assets (done in 2004) and increase of paid-up capital in 

2005 have contributed toward increasing assets and capital base. On the other hand tax holiday of all units 

was started expiring gradually from middle of 2003 which attracted additional tax expenses and there by 

impacting net profits of 2004 – 2007. This has resulted into lower ROA and ROE in those years compared to 

initial years of performance. 

On the other hand if we ignore 2003, which was an exceptional year (as explained earlier), we will see that the 

return over the last few years was quite acceptable and in line with overall Sector’s performance. The 

investments made in last five years have just started giving fruits as we can see from the performance for last 

six months to June 2008. Considering the full year performance of 2008, we can firmly say that the return will 

reach at a very satisfactory level. With ACIFL becoming Publicly Listed Company, ACIFL will directly sell the 

Crop care and Public Health Products from 1 January of 2009. This along with the establishment of two new 

projects like Sulpher and NPKS Fertilizer, ACI Formulations Limited will be able to maintain very attractive 

ROA and ROE in the years to come. 

As explained above, under the proposed arrangement, ACIFL will deal entire business of Crop Care and 

Public Health which has a annual turnover of approximately Tk. 1.4 billion in 2009. This along with new 

openings in Sulpher and NPKS business, ACIFL will have have significantly high turnover of Tk. 2.5 billion 

followed by impressive Profit after tax of Tk. 209 million. The new proposed business model therefore will 

ensure higher ROE and ROA for the Company. 


It appears that there is significant amount of inter party transactions between ACI Formulations Limited and 

ACI Limited. Is there any pricing mechanism and profit sharing agreement on inter party transactions If so, 

please furnish all documents in this regard. 


There is a Sales and Marketing agreement between ACI Formulations Limited and ACI Limited under which 

ACI Limited sells and markets the products manufactured by ACI Formulations Limited. Under the 

agreement the transfer price of the products are determined which is detailed below: 



Unit-1. Crop Care and Public Health Products 

Transfer Price between ACI and ACIFL is determined as per clause 2.2 and 2.3 of article 2 of Sales and 

Marketing Agreement which are: 

ACIFL shall reimburse all selling and Marketing Overhead and Distribution Cost incurred by ACI for 

selling and marketing of products manufactured by ACIFL. 

ACIFL shall pay 5% of ACI Sales of products manufactured by ACIFL as service charge. 

Unit- 2. Mosquito Coil 

Transfer Price between ACI and AFL is determined as per clause 2.2 and 2.3 of article 2 which are: 

ACI shall pay all expenses for raw materials, packing materials, labor cost, utilities cost, depreciation 

and plant running cost other than general overhead incurred by ACIFL 

ACI shall pay the total amount of investment by ACIFL in this plant in 4 years from the date of 

signing this agreement as period cost without any reference to the actual production. 

ACI shall pay the financing cost incurred by ACIFL on the stock of raw materials, packing materials 

and finished goods. 

Unit- 3. Aerosol 

Transfer Price between ACI and AFL is determined as per clause 2.7 which is: 

Considering the portability of the business vis a vis market dynamics transfer price of Aerosol Unit 

will be determined mutually by ACI Limited and ACIFL on year to year basis. 

It is worth mentioning here that under the new arrangement the proportion of business through contract 

manufacturing arrangement (determined through transfer pricing agreement) will be reduced to only 25% 

from the current level. 

The agreement between ACI Limited and ACI Formulations Limited has been submitted to DSE. 


It is observed that you have not disclosed related party transactions disclosures as required by IAS 24, please 

disclose. 


In the Financial statements we have given related party disclosures as required by IAS- 24. For your reference 

if you see the half yearly audited accounts of 2008 (note 23 of page 77), you will get the disclosures. 


You have reported that you will purchase 2 Gas Generators by the end of the year 2008. In this regard, did 

you confirm about the availability of gas supply for necessary power generation. If gas is not available then 

what would be your alternative solution 


The Gas generators have already been procured from caterpillar USA. Our application for increasing gas 

supply is in active consideration of the authority. We are confident that by the end of this year permission will 

be received from Titas Gas authority. 

Currently Company’s operation is being run with diesel generators. We presume that if there are inadvertent 

delay in getting permission to laying gas line, operation will be continued with diesel generators along with 

enjoying power supply from REB. 




It appears that administrative and selling expenses have increased significantly during the year 2006 and 

2007. Please explain the reasons in this regard. 


The increase in administration and selling expenses for both 2006 and 2007 was mainly due to normal pay 

increase, inflation adjustment, engagement of higher number of people, increased marketing and promotional 

expenses which actually led to stabilizing Company’s grip in the market (as explained in point 3 and 5 of the 

letter). 

This strategy of investing money against people and marketing and sales front has already started working as 

evidenced from the recent performance till June 2008. 


Submit revaluation report on the fixed assets held in the year 2004. 


Revaluation report on the fixed assets held in the year 2004 has been submitted to DSE. 

C. CSE’s Observations/ queries 


Though the company earned profit every year, it could not maintain its steady profit growth in last three 

completed accounting/financial years as per regulation 2(iv) of the Direct Listing Regulations. 


Our interpretation of the clause 2 (iv) as referred by you is that out of last five years, at least in three years, 

Company should make profit and again with steady growth. Against this condition, when two years loss is 

allowed within 5 years, ACIFL has made profit in all 5 years thereby exceeding the requirement with wide 

margin. With regard to growth, if you consider CAGR (Compound Average Growth Rate) an accepted norm 

for judging growth of the Company, ACIFL’s CAGR of operating profit (EBIT – which is the best way to judge 

a company’s real performance) for last five year was positive 9.7%. However, there was a slight drop in PAT 

(Profit after Tax) which we can not deny in year to year basis due to the expiry of the tax holiday period of all 

units which attracted additional tax expenses. Considering all these factors we firmly believe that in both 

counts i.e. profit and growth ACIFL has maintained the provision of regulation 2(iv). Recent result further 

shows that through high turnover supported by good product mix and control over costs, Company has been 

able to reduce the impact of higher tax with significant growth in PAT as evidenced from the performance of 

2008 and beyond. The performance of 2008 indeed gives us confidence that Company is in strong footing to 

grow aggressively in years to come. 


The period of time has not been mentioned against the information on involvement of Officers and Directors 

in certain Legal Proceedings in page # 38 of the Information Documents (ID). 


We have incorporated the period of time in the page 38 of the Information Document as advised. 


Details of ‘Trade Debtors’ and ‘Other Receivables’ in the Balance Sheet (page # 57) should be provided in the 

notes to the Financial Statements for the half-year ended 30 June 2008 in order to have a clear view to the 

investors. 


As per accounting principle i.e. materiality concept, the trade debtors and other receivable are not material 

(total of both balance was only 0.44% of total assets) and as such no detail is given in the notes to the accounts. 




Adequate provision against the Gratuity Scheme of the permanent employees of the company should be 

made in the accounts. 


ACI Group maintains Gratuity Fund at Group level where ACI Formulations Limited is also a participator. In 

the accounts, ACI Formulations Limited makes provision for gratuity expenses on month to month basis 

which charged to Salary head. In every two years valuation of gratuity scheme is done by professional firm as 

required by IAS- 19: Employee Benefits. 


Comparative Income Statement and Balance Sheet for immediate preceding five accounting years have not 

been provided in the ID. 


We have incorporated comparative Income Statement and Balance Sheet of ACI Formulations Limited for the 

immediate last five years in the page 78 of Information Document under the head “ Auditors Report under 

the section 135(1) and paragraph 24(1) of part-II of Third Schedule of the Companies Act 1994” 


The purpose of the Offloading should be mentioned in ID. 


As suggested by you we have incorporated the purpose of offloading of shares by ACI Limited in the page 11 

of Information Document. 


Though the company submitted information in respect of the amount of loan taken from different banks, it 

did not provide information concerning loan default, if any (Ref. 3 (h) of the regulation). 


There is no case of loan default which has been mentioned in the page 28 and 36 of Information Document. 


The company should submit copy of CIB report of Bangladesh Bank confirming that each director or 

shareholder who holds 5% or more shares is not a loan defaulter. 


The CIB report has been forwarded to DSE by Bangladesh Bank that will also be used by CSE. 


The submitted undertaking is not containing any signature in the first page and common seal in the both 

pages. 


Undertaking with signature and common seal has been provided to CSE. 


The declaration of Mr. M Mosaddek Hossain in respect of disposal of shares in accordance with the regulation 

5 has not been submitted. 


Our understanding about the provision of regulation 5 is that any shareholder who wishes to offload its 

shares needs to give a declaration confirming that he/she will not offload more than 50% of his or her own 

shareholding. In this particular case out of the nine shareholders only one shareholder i.e. ACI Limited has 



opted for offloading 41.35% of its shareholding in ACI Formulations Limited equivalent to 89,87,500 shares 

which is 36.95% of the total shares of ACI Formulations Limited. As other shareholders have not shown any 

intent to dispose off any shareholding (Subject to the condition stated in Regulation-5) this is not necessary to 

submit undertaking by them. However as a part of disclosure, the shareholders who were available before the 

submission of this application, we voluntarily opted for submitting undertaking from them; which can be 

considered as part of supplying additional information. 

Please also note that subject to the approval of DSE and CSE, we will dematerialize only 8,987,500 shares of 

ACI Formulations Limited held by ACI Limited and no other shares held by the shareholders other than ACI 

Limited will be offloaded and dematerialized now. 


Shares of the company are required to be dematerialized with CDBL. 


As per Listing Rules we will dematerialize the shares of ACI Formulations Limited with CDBL before starting 

trading of shares in the Stock Exchanges. 

x

Information Document for Direct Listing OF ACI FORMULATIONS ...

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