Information Document - Dhaka Stock Exchange

More documents

Recommendations

Info

govt.’s future planning for addition of new generation, yet the demand supply gap will be increasing like 2,648MW in 2011, 3,132 MW in 2012, 3,259 MW in 2013, 3,799 MW in 2014 and 4,362 MW in 2015. Most interestingly,in 1998 when KPCL plant was connected to the national grid, the demand supply gap was about 1,000 MW andover the last 11 years it has gone up to 1,700 MW. In order to minimize the shortage of power, initiatives arebeing taken by the Govt. to welcome private sectors to set up more power plants.KPCL is currently in negotiation with BPDB for its expansion for additional capacity of 100 MW (+/-10 MW). Inview of the above mentioned existing shortage, further worsening in future due to gradual increase of demandof the power and the short supply of natural gas, the Govt. has decided to offer the expansion of the capacityof existing power plants which are running on liquid fuel. KPCL plant is among the two plants that are runningon liquid fuel and thus proposed for expansion which is in process.Therefore, for the reasons stated above the Govt. of Bangladesh is strongly considering the expansion of KPCLplant capacity by another 100 MW (+/- 10 MW).Energy sector companies are strong player with huge operating profit and its shareholders have takenthe benefit of direct listing from the gain of offloading of shares. Superior asset management andearning potential, strong fundamental position, greater liquidity and technological soundness makethese companies better player in the stock market. KPCL is a peer company of these companieswhich also has a sound financial background and operational efficiency. So, it is optimistic toexpect that KPCL will perform better than its Competitors and Peer companies. Considering theaverage value and the fact that the company is renowned “Electricity generating company” havingwell known client’s base and brand image, so the indicative price is just and fair.4. The company has opened an Escrow account with BRAC Bank Limited “Khulna Power EII EscrowAccount” No. 1501100976943002 for collecting bid money from the eligible institutional biddersunder Book Building Method.ToThe SecretaryDhaka Stock Exchange LimitedDhakaDear Sir,UNDERTAKINGToThe board of directorsChittagong Stock Exchange LimitedChittagongWe undertake, unconditionally, to abide by the Listing Regulations of the Dhaka/Chittagong StockExchange Limited which presently are, or hereinafter may be in force.We further undertake:That our shares and securities shall be quoted on the Ready Quotation List and /or the Cleared Listat the discretion of the Exchange.That the Exchange shall not be bound by our request to remove the shares or securities from theready Quotation List and /or the Cleared List.That the Exchange shall have the right, at any time to suspend or remove the said shares orsecurities for any reason which the Exchange considers sufficient in public interest.That such provisions in the Articles of Association of our company or in any declaration or basisrelating to any security as are or otherwise not deemed by the Exchange to be in conformity withthe Listing Regulations of the Exchange shall, upon being called upon by the Exchange, be amendedto supersede the Articles of Association of our company or the declaration or basis relating to anysecurity; andThat our company and /or the security may be de-listed by the Exchange in the event of noncomplianceand breach of the Regulations and/or of this undertaking after giving an opportunity ofbeing heard to us.Yours faithfully,Sd/-Managing Director5
B. RISK FACTORS AND MANAGEMENT PERCEPTION ABOUT RISK:As with all investments, investors should be aware that there are some risks associated with aninvestment in the Company. The investors should carefully consider the following risks in additionto the information contained in the prospectus for evaluating the offer and taking decision whetherto invest in shares of the company.a) Interest Rate Risk:Interest/financial charge are paid against any kind of borrowed fund/ preference shares. Instabilityin money market and increased requirement for fund may put pressure on interest rate structure.Rising of interest rate increases the cost of borrowed fund and consequently it may impact on theprofitability.Management Perception: Currently, KPCL has working capital debt obligation from several banksand preference shares which are comprised with fixed financial charges. But the Company has solidrevenue source and is highly profitable. The rate for the financial charges are fixed so, KPCLdoesn’t have such risk.b) Exchange Rate Risk:KPCL imports mostly fuel against payment of foreign currency. Unfavorable volatility or currencyfluctuation may affect the profitability of the company.Management Perception: KPCL is fully aware of the risk related to currency fluctuation butpractically doesn’t possess any foreign exchange risk as 99% of the Other Monthly Tariff (OMT)isconvertible and fuel is being imported through L/C and the exchange rate Sonali Bank Ltd. isacceptable to BPDB under pass through payment process. Moreover, KPCL executes favorable andcompetitive foreign exchange rate from its bankers against its L/C payments.c) Industry Risk:The supply of electricity and alternative energy is not adequate than the demand of it. For thatreason organizations engaged in generating electricity can’t provide all required amount ofelectricity. Power companies mainly supply electricity to national power distributors to supplyelectricity.Management Perception: KPCL supplies electricity to BPDB in the south-western region ofBangladesh and it’s a dedicated power plant with a guaranteed payment from BPDB and GoB underthe PPA. So, possibilities of entering new power companies wouldn’t create any industry risk forthe company.d) Market and technology related Risk:Technology is related to generation, transmission, distribution, quantity measuring and maintainingof required electricity generation.Management Perception: The Company is operated by the plant manufacturer, Wärtsilä, theleading power plant manufacturer and plant operator in the world. Wärtsilä is technologicallyadvanced enough to keep KPCL plant out of such risk.e) Potential or existing Government regulation:The business activities of KPCL is fully controlled by policies, rules and regulation framed bygovernment, that is policies related to electricity price fixation, demand & supply and distributionis fully under the control of Government. So, government policies in this regard may impactbusiness operation of KPCL.6
Page 7 and 8: 2. Procedures to be followed for de
Page 9: C) KPCL never compromises with the
Page 13: Risk associated with tariff of elec
Page 17: • OwnershipThe ownership structur
Page 21 and 22: • The year 1999 marked one of the
Page 23 and 24: United Summit Coastal Oil Ltd. (USC
Page 25 and 26: about their energy requirements. Th
Page 27 and 28: United Land Port Teknaf Ltd.United
Page 29 and 30: DistributionDistribution Line2,71,1
Page 31 and 32: withdrawals there from). The GoB sh
Page 33 and 34: Rent payable: Taka 15.84 per square
Page 35 and 36: (14) Personnel related schemes to m
Page 37 and 38: Involvement of Directors with Liste
Page 39 and 40: United GroupName of The Director an
Page 41 and 42: Mr. Moinuddin Hasan RashidMr. Md. A
Page 43 and 44: Mr. Faridur Rahman Khan, DirectorBo
Page 45 and 46: I. EXECUTIVE COMPENSATIONRemunerati
Page 47 and 48: M. OWNERSHIP OF COMPANY’S SECURIT
Page 49 and 50: disclosure as per law and Internati
Page 51 and 52: CREDIT RATING REPORTONKHULNA POWER
Page 61 and 62:
CREDIT RATING REPORTONKHULNA POWER
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Khulna Power Company Ltd.Balance Sh
Page 69 and 70:
Khulna Power Company Ltd.Statement
Page 71 and 72:
Khulna Power Company Ltd.Notes to t
Page 73 and 74:
3.1 Property, plant and equipment3.
Page 75 and 76:
3.6 ImpairmentThe carrying amounts
Page 77 and 78:
3.15 Earnings per shareThe company
Page 79 and 80:
5. InventoriesBalance as at 1 Janua
Page 81 and 82:
9. Cash and cash equivalents2009 20
Page 83 and 84:
13.1Demurrage is claimed by Kue Oil
Page 85 and 86:
& Mercantile Corporation (Pvt.) Ltd
Page 87 and 88:
18. General and administrative expe
Page 89 and 90:
21. Earnings per share (EPS)2009 20
Page 91 and 92:
25. Related party transactionsNatur
Page 93 and 94:
Khulna Power Company LtdProjected I
Page 99 and 100:
Additional disclosure by the manage
Page 101 and 102:
CSE’s observation for Direct list
show all

Information Document - Dhaka Stock Exchange

Create successful ePaper yourself

Delete template?

Save as template?