Golden Harvest Agro Industries Ltd.

227 Pages·2012·8.14 MB·English

Golden Harvest Agro Industries Ltd.
“If you have any query about this document, you may consult with the Issuer, Issue Manager and Underwriters”
Prospectus
Of
GOLDEN HARVEST AGRO INDUSTRIES LTD.

Public issue of 30,000,000 Ordinary shares of Tk. 10.00 at an issue price of Tk. 25.00 each including a
premium of Tk. 15.00 per share totalling Tk. 750,000,000.00

Opening date for subscript ion: December 2 3, 2012
For Resident Bangladeshi Closing date for subscrip�on: December 3 0, 2012
For Non-Resident Bangladeshi quota, subscrip�on closes on: January 08, 2013
CREDIT RATING STATUS

En�ty Ra�ng A+ ST-3
Outlook Posi�ve
Date of ra�ng October 23,2011
Validity of ra�ng October 22, 2012
RATING ASSIGNED BY : CRISL

ISSUE MANAGER(S)

Lead Issue Manager BANCO FINANCE AND INVESTMENT LIMITED

Baitul View Tower (11th Floor),

56/1, Purana Paltan, Dhaka-1000

Phone: [phone]

Fax: [phone]

Co-Issue Manager ROYAL GREEN CAPITAL MARKET LIMITED
Digonto Tower (1st Floor),
12/1 R.K. Mission Road, Dhaka-1203
Phone : [phone]
Fax : [phone]

UNDERWRITERS

Prime Finance Capital Management Limited First Security Islami Capital and Investment Limited
BMSL Investment Limited Mercan�le Bank Limited
Con�nental Insurance Limited Royal Green Capital Market Limited
Green Delta Insurance Company Limited ICB Capital Management Limited
PLFS Investments Limited

The issue shall be placed in “N” category
Issue date of the Prospectus: October 24, 2012

GOLDEN HARVEST AGRO INDUSTRIES LTD.

ISSUER COMPANY Corporate Head Office: SPL Western Tower, Level 5, #501 &
#502, 186 Gulshan Tejgaon Link Road, Tejgaon, Dhaka- 1208

Tel: [phone], Fax: [phone],
E-Mail: [email protected],
www.goldenharvestbd.com
"CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES UNDER THE SECURITIES AND
EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) RULES, 2006. IT MUST BE DISTINCTLY
UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER
COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION
EXPRESSED WITH REGARD TO THEM. SUCH RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER,
ISSUE MANAGER, UNDERWRITER AND/OR AUDITOR".
1 Prospectus
Golden Harvest Agro Industries Ltd.
AVAILABILITY OF PROSPECTUS

Prospectus of the Company may be available at the following addresses:

Name & Address Contact Person Contact Number
Issuer Company:

Golden Harvest Agro Industries Ltd. Imam Hassan, FCA Tel: [phone]
SPL Western Tower, Level 5, #501 & #502, CFO & Company Secretary Fax: [phone]
186 Gulshan Tejgaon Link Road, Tejgaon 1208, Dh aka
Issue Manager(s):

Banco Finance and Investment Limited Kazi Saifur Rahman, FCA Tel:[phone],
Baitul View Tower (11th Floor) Managing Director & CEO 7124438, 7125910
56/1, Purana Paltan, Dhaka-1000 Fax: [phone]
Royal Green Capital Market Limited Md. Shah Alam Tel:[phone],
Digonto Tower (1st Floor), Managing Director 9142863
12/1 R.K. Mission Road, Dhaka-1203 Fax:[phone]
Underwriters:
Prime Finance Capital Management Limited M. Mosharraf Hossain PhD, FCA Tel:[phone]
63 Dilkusha C/A (3rd Floor), Dhaka-1000 Managing Director & CEO Fax:[phone]
First Security Islami Capital and Investment Limited M. Anwar Husain Tel:[phone]
Al-Amin Center (12th Floor) CEO Fax:[phone]
25/A Dilkusha C/A, Dhaka-1000
BMSL Investment Limited Md. Golam Sarwar Bhuyian Tel:[phone],
Sadharan Bima Tower (7th Floor) Managing Director 9570624, 9567002
37A Dilkusaha C/A, Dhaka-1000 Fax:[phone]
Green Delta Insurance Company Limited Nasir A. Choudhury PABX:[phone],
Hadi Mansion (4th Floor) Managing Director & CEO 9567760-62
2 Dilkusha C/A, Dhaka-1000 Fax:[phone]
Royal Green Capital Market Limited Md. Shah Alam Tel:[phone],
Digonto Tower (1st Floor), Managing Director 9142863
12/1 R.K. Mission Road, Dhaka-1203 Fax:[phone]
Con�nental Insurance Limited M. Qamrul Munir PABX:[phone],
Ideal Trade Center (7th Floor) Head of Investment 8115679, 8124062
102 Shahid Tajuddin Ahmed Sarani, Tejgaon, Dhaka Fax:[phone]
PLFS Investments Limited Mustofa Kamal Tel:[phone],
Corporate Office: Paramount Heights (13th Floor) CEO 9551041, 7113894
65/2/1 Box Culvert Road, Purana Paltan, Dhaka-1000 Fax:[phone]
ICB Capital Management Limited Nasir Uddin Ahmed Tel:[phone],
8, D.I.T Avenue (14th Floor), Dhaka-1000 CEO Fax:[phone]
Mercan�le Bank Limited A. K. M. Shahidul Haque Tel:[phone]
61 Dilkusha C/A, Dhaka-1000 Managing Director & CEO Fax:[phone]
Stock Exchanges:

Dhaka Stock Exchange Ltd. (DSE) DSE Library Tel:[phone],
9/F Mo�jheel C/A, Dhaka–1000 9666944-8
Chi�agong Stock Exchange Ltd. (CSE) CSE Library Tel:[phone],
1080 Sheikh Mujib Road, Agrabad, Chi�agong–4100 720871-3

Prospectus is also available on these web sites www.secbd.org, Golden Harvest Agro Industries Ltd. (www.goldenharvestbd.com ),
www.dsebd.org, www.csebd.com and public reference room of the Securi�es and Exchange Commission (SEC) for reading and study.

Name and Address of the Auditor

S.F. Ahmed & Co.
Chartered Accountants
(A technical assistance firm of Ernst & Young Interna�onal Inc. of New York, USA in Bangladesh)
House 25, Road 13A, Block D, Banani, Dhaka 1213
2 Prospectus
Golden Harvest Agro Industries Ltd.
Table of contents

Par�culars Page No
Acronyms 6
Disclosure in Respect of Issuance of Security in Demat Form 7
Condi�ons under 2cc of the Securi�es and Exchange Ordinance, 1969 7
Declara�on about lis�ng of shares with the Stock Exchange(s): 8
General Informa�on 14
Declara�ons & Due Diligence Cer�ficates 15
Declara�on about the Responsibility of the Directors, 15
Consent of Director (s) to serve as Director (s) 16
Declara�on of Filing Prospectus with the Registrar of Joint Stock Companies and 17
Firms
Declara�on by the Issuer about the approval from SEC for any material changes 17
regarding prospectus of Golden Harvest Agro Industries Ltd.
Declara�on by the Issue Manager(S) about the approval from Securi�es and 18
Exchange Commission for Any Material Changes Regarding Prospectus of Golden
Harvest Agro Industries Ltd.
Due Diligence Cer�ficate of Issue Manager(s) 19
Due Diligence Cer�ficate of the Underwriters 20
Risk Factors And Management’s Percep�ons About The Risks 21-26
Issue Size And Purpose of Public Offering 27
Use of Proceeds from IPO 28-39
Descrip�on of Business 40-46
Subsidiary Company(s) 44-46
Nature of Business 46
Principal products and service 46
Market for the products 47
Rela�ve contribu�on of the services contribu�ng more than 10% of the 47
total revenue
Associates, subsidiary/ related or holding company 48
Distribu�on of products/services 49-51
Compe��ve condi�ons of business 52-55
Sources and availability of raw materials and the names of the principal 56-57
supplies
Sources and requirement for power, gas and water or any other u�li�es 57
Customer providing 10% or more revenues 58
Descrip�on of material patent, trademarks, licenses or royalty agreements 58
Number of employees 58
Products/ service rendering capacity and current u�liza�on 59-60
U�liza�on of total capacity (yearly) 60
Contract with principal suppliers or customers 60
Descrip�on of Pro perty 61
Loca�on of principal plants and other proper�es of the company and their 61
condi�on
Descrip�on of Land 61

3 Prospectus
Golden Harvest Agro Industries Ltd.
Descrip�on of Machineries 62
Fixed Asset 64
Condi�on of Property 64
Auditors’ cer�ficate regarding whether the plant & machinery are brand 65
new or recondi�oned
Ownership of Property 66
Lien Status 66
Leased Property 66
Lease or Charge Over Assets 66
Plan of Opera�on And Discussion Of Financial Condi�on 67
Internal and external source of cash 67
Material commitment for capital expenditure 67
Causes for any material changes from period to period 68
Seasonal aspects of the company’s business 68
Known trends, events or uncertain�es 69
Change in the assets of the company used to pay off any liabili�es 69
Loan Taken From Holding / Parent Company Or Subsidiary Company 69
Future Contractual Liabili�es 69
Future Capital Expenditure 69
VAT, Income Tax, Custom Duty or other Tax Liability 69
Auditors’ Cer�ficate Regarding Tax, VAT and Customs Duty Status 70
Opera�ng Lease Agreements 71
Financial Commitments 71-72
Personnel Related Scheme 72
Breakdown of IPO expenses 73
Revalua�on of company's assets & summary thereof 74
Revalua�on of assets 74
Revalua�on of fixed assets of Golden Harvest Agro Industries Limited In 2011 74
Revalua�on of fixed assets of Golden Harvest Agro Industries Limited In 2009 74
Revalua�on of fixed assets of Golden Harvest Sea Food And Fish Processing Ltd. 74
Revalua�on of fixed assets of Golden Harvest Sea Food And Fish Processing 74
Limited In 2011
Revalua�on of fixed assets of Golden Harvest Sea Food And Fish Processing 75
Limited In 2009
Transac�on with subsidiary / holding company or associate companies 75-76
Auditors’ cer�ficate regarding related party transactions 77
Auditors cer�ficate regarding allotment of shares to promoters or sponsor 78
shareholders for considera�on in cash/other than in cash
Declara�on regarding suppression of material informa�on 79
Material informa�on which is likely to have an impact 79
Directors and officers 80
Informa�on regarding directors and directorship 80
Directors’ involvement in other organiza�on 81-82
Family rela�onship among directors and top officials 83
Family rela�onship among directors 83

4 Prospectus
Golden Harvest Agro Industries Ltd.
Short bio-data of the Directors 83-85
Credit informa�on Bureau (CIB) Status 85
Par�culars Of Top Execu�ves & Departmental Heads Of The Company 86
Involvement of Directors And Officers In Certain Legal Proceedings 87
Certain Rela�onships And Related Transac�ons 87-88
Execu�ve Compensa�on 89
Op�ons Granted To Directors, Officers And Employees 90
Transac�on With The Directors And Subscribers To The Memorandum 90
Tangible Assets Per Share 91-92
Ownership of The Company’s Securi�es 93
Determina�on Of Offering Price 94-96
Market for the Securi�es Being Offered 97
Declara�on About Lis�ng Of Shares With The Stock Exchange(S) 97
Descrip�on of Securi�es Outstanding Or Being Offered 98-99
Debt Securi�es 100
Lock-in Provision 100-102
Refund of Subscrip�on Money 103
Subscrip�on by and Refund to Non-Resident Bangladeshi (NRB) 103
Availability of Securi�es 104
Underwri�ng of Shares 105
Underwriters obliga�on 105
Commission for the underwriters 106
Rela�onship of officers or director of the underwriters ac�ng as director of 106
the company
Allotment 106
Applica�on for subscrip�on 107-108
Material Contracts 109
Issue Manager(s) 109
Commission to the Banker to the Issue 109
Corporate Directory 110
Bankers to the Issue 111-114
Auditors Reports & Accounts 115-191
Auditors Cer�ficate on Addi�onal Disclosures in Notes 192-194
Auditors Reports in Pursuance of Sec�on 135(1) 195-199
Auditors Cer�ficate on Cash Flow Statement 200
Ra�o Analysis 201
Credit Ra�ng Report 202-216
Applica�on Form 217-223

5 Prospectus
Golden Harvest Agro Industries Ltd.

ACRONYMS

Allotment : Le�er of allotment for shares
BB : Bangladesh Bank
BO A/C : Beneficial Owner Account or Depository Account
CDBL : Central Depository Bangladesh Limited
CIB : Credit Informa�on Bureau
Cer�ficate : Share Cer�ficate
CRISL : Credit Ra�ng Informa�on and Services Limited
Commission : Securi�es and Exchange Commission
Companies Act : Companies Act, 1994 (Act. No. XVIII of 1994)
CSE : Chi�agong Stock Exchange Limited
DSE : Dhaka Stock Exchange Limited
FC Account : Foreign Currency Account
GHAIL : Golden Harvest Agro Industries Limited
IPO : Ini�al Public Offering
Issue : Public Issue
Market of the Securi�es : Share market
MP : Market Price
NAV : Net Asset Value of the Company
NBR : Na�onal Board of Revenue
NRB : Non Resident Bangladeshi
Offering Price : Price of the securi�es of Golden Harvest Agro Industries Ltd.
being offered
QA : Quality Assurance
QC : Quality Control
Registered Office : SPL Western Tower, Level 5, #501 & #502, 186 Gulshan
Tejgaon Link Road, Tejgaon, Dhaka-1208
RJSC : Registrar of Joint Stock Companies & Firms
SC : Share Cer�ficate
SEC : Securi�es and Exchange Commission
Securi�es : Shares of Golden Harvest Agro Industries Ltd.
Sponsors : The Sponsor Shareholders of Golden Harvest Agro
Industries Limited
STD Account : Short Term Deposit Account
Stockholder : Shareholder
Subscrip�on : Applica�on money
The Company/Issuer : Golden Harvest Agro Industries Limited

6 Prospectus
Golden Harvest Agro Industries Ltd.
DISCLOSURE IN RESPECT OF ISSUANCE OF SECURITY IN DEMAT FORM
“As per provisions of the Depository Act, 1999 and regula�ons made there under, share of
the company will be issued in dematerialized form only and, for this purpose, Golden
Harvest Agro Industries Limited has signed an agreement with the Central Depository
Bangladesh Limited (CDBL). Therefore, all transfers/transmissions, spli�ng 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.”

CONDITIONS UNDER 2CC OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

Part – A

1. The company shall go for Ini�al Public Offer (IPO) for 30,000,000 Ordinary Shares of Tk.
10.00 each at an issue price of Tk. 25.00 each (including premium of Tk. 15.00 per share)
worth Tk. 75,00,00,000.00 (Taka Seventy five Crore) only following the Securi�es and
Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and
regula�ons made there under.

2. The abridged version of the prospectus, as approved by the Commission, shall be
published by the issuer in 4 (four) na�onal daily newspapers (two in Bangla and two in
English), within 05 (five) working days of issuance of the consent le�er. The issuer shall
post the full prospectus, ve�ed by the Securi�es and Exchange Commission, in the
issuer's website and shall also put on the web sites of the Commission, stock exchanges,
and the Issue Manager (s) within 05 (five) working days from the date of issuance of this
le�er and shall remain posted �ll the closure of the subscrip�on list. The issuer shall
submit to SEC, the stock exchanges and the issue Manager (s) a disk containing the text
of the ve�ed Prospectus in "MS- Word" format.

3. Sufficient copies of prospectus shall be made available by the issuer so that any person
reques�ng a copy may receive one. A no�ce shall be placed on the front of the
applica�on form distributed in connec�on with the offering, informing that interested
persons are en�tled to a prospectus, if they so desire, and that copies of prospectus may
be obtained from the issuer and the Issue Manager (s). The subscrip�on applica�on shall
indicate in bold type that no sale of securi�es shall be made, nor shall any money be
taken from any person, in connec�on with such sale un�l twenty five days a�er the
prospectus has been published.

4. The company shall submit 40 (forty) copies of the printed prospectus to the Securi�es
and Exchange Commission for official record within 5 (five) working days from the date
of publica�on of the abridged version of the prospectus in the newspaper.
7 Prospectus
Golden Harvest Agro Industries Ltd.
5. The issuer company and the Issue Manager (s) shall ensure transmission of the
prospectus, abridged version of the prospectus and relevant applica�on forms for NRBs
through e-mail, simultaneously with publica�on of the abridged version of the
prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure
sending of the printed copies of abridged version of the prospectus and application
forms to the said Embassies and Missions within 5 (five) working days of the publica�on
date by express mail service (EMS) of the postal department. A compliance report shall
be submi�ed in this respect to the SEC jointly by the issuer and the Issue Manager (s)
within 2 (two) working days from the date of said dispatch of the prospectus & the
forms.

6. The paper clipping of the published abridged version of the prospectus, as men�oned at
condi�on no. 2 above, shall be submi�ed to the Commission within 24 hours of the
publica�on thereof.

7. The company shall maintain separate bank account(s) for collec�ng proceeds of the
Ini�al Public Offering and shall also open foreign currency (FC) account(s) to deposit
the applica�on money of the Non-Resident Bangladeshis (NRBs) for IPO purpose, and
shall incorporate full par�culars of said FC account(s) in the prospectus. The company
shall open the abovemen�oned accounts for IPO purpose; and close these accounts
a�er refund of over-subscrip�on money.

Non-Resident Bangladeshi (NRB) means Bangladeshi ci�zens staying abroad including all
those who have dual ci�zenship (provided they have a valid Bangladeshi passport) or
those, whose foreign passport bear a stamp from the concerned Bangladesh Embassy to
the effect that no visa is required for traveling to Bangladesh.

8. The issuer company shall apply to all the stock exchanges in Bangladesh for lis�ng within
07 (seven) working days from the date of issuance of this le�er and shall simultaneously
submit the ve�ed prospectus with all exhibits, as submi�ed to SEC, to the stock
exchanges.

9. The following declara�on shall be made by the company in the prospectus, namely:-

"Declara�on about Lis�ng of Shares with the Stock Exchange(s):

None of the stock exchange(s), if for any reason, grants lis�ng within 75 (seventy five)
days from the closure of subscrip�on, any allotment in terms of this prospectus shall be
void and the company shall refund the subscrip�on money within 15 (fi�een) days from
the date of refusal for lis�ng by the stock exchanges, or from the date of expiry of the
said 75 (seventy five) days, as the case may be.

In case of non-refund of the subscrip�on money within the aforesaid 15 (fi�een) days,
the directors of the company, in addi�on to the issuer company, shall be collec�vely and
severally liable for refund of the subscrip�on money, with interest at the rate of 2% (two
percent) per month above the bank rate, to the subscribers concerned.
8 Prospectus