Book-Scheme-of-Amalgamation.pdf - BSRM

SCHEME OF AMALGAMATION

OF

BSRM STEEL MILLS LIMITED (TRANSFEROR COMPANY)

WITH

BANGLADESH STEEL RE-ROLLING MILLS LIMITED (TRANSFEREE COMPANY)

A. GENERAL 1. This Scheme of Amalgamation (hereinafter referred to as the “Scheme”) provides for the

amalgamation of BSRM Steel Mills Ltd. (“BSRMSML”) (Transferor Company) with Bangladesh Steel Re-Rolling Mills Limited (“BSRMLTD”) (Transferee Company) pursuant to Sections 228 and 229 of the Companies Act, 1994 ("the Act") and other related provisions of the Companies Act, 1994 (the “Merger”), in accordance with which the Transferee Company shall be the surviving corporation of the Merger and the separate corporate existence of the Transferor Company shall cease thereafter.

2. Definitions and Interpretations 2.1. In this Scheme, unless repugnant to the meaning or context thereof, the expressions used

herein shall have the following meanings: (a) “The Act” means the Companies Act, 1994 including any amendments thereto. (b) “Appointed Date” means the last date of a quarter in the financial year as determined by

the Board prior to approval of the Scheme or any other date as may be determined by the Hon’ble High Court Division.

(c) “Assets” or “Undertakings” means and includes all the undertakings, the entire

businesses, all the properties (whether movable or immovable; tangible or intangible), lands, buildings, plant, roads and pavements, machinery and equipment, capital works in progress, furniture, fixtures, office equipment, appliances, vehicles, other fixed assets, all stocks, investments of all kinds (including shares, scrips, debentures, or bonds), advances, deposits, prepayments, debtors, receivables, book debit, cash and cash equivalents, balances with banks on any deposit or other accounts, financial assets, leases, bond license, import-export permits, environmental clearance, tenancies, contingent rights or benefits, agreements, contracts, powers, approvals, allotments, authorities, permits, consents, quotas, rights, entitlements, licenses (industrial or otherwise) or any other benefits, patents, trademarks, copyrights, design right and other intellectual property rights, rights to use and avail of telephones, telexes, facsimiles, email, internet connections and installations, utilities, gas connection, WASA, electricity and other services, all files, records, papers, manuals, programmes, data, catalogues, sales and advertising materials, software and other records, whether in Bangladesh or abroad.

(d) “Business” means the M.S. billet production business of different qualities and selling

them to steel rolling mills and manufacturing iron products and steel materials of all types including other activities as mentioned in the Transferor Company’s memorandum and articles of association.

(e) “Effective Date” or “coming into effect of this Scheme” or “effectiveness of this

Scheme” means the day on which the conditions specified in Clause 23 of this Scheme have been fulfilled.

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(e) “Transferee Company” or “BSRM LTD” means, Bangladesh Steel Re-Rolling Mills Limited, a public company limited by shares, listed with stock exchanges incorporated under the Companies Act and having its registered office at Ali Mansion, 1207/1099, Sadarghat Road, Chattogram.

(f) “Transferor Company” or “BSRM SML” means BSRM Steel Mills Ltd., a public

company limited by shares incorporated under the Companies Act and having its registered office at Ali Mansion, 1207/1099, Sadarghat Road,Chattogram.

(g) “Board of Directors” means the board of directors of the Transferee Company or the

Transferor Company or both as the context may require. (h) “Scheme” means this Scheme of Amalgamation in its present form or with any

modification(s) approved, imposed, or directed by the High Court or the Shareholders of either party.

(i) “Governmental Authority” means any supranational, national, municipal or local court,

administrative body or other governmental or quasi-governmental entity or authority, or any stock exchange, wherever located.

(j) “Liabilities” means secured and unsecured debts (whether in Taka or in foreign

currencies), all liabilities, duties and obligations, along with any charge, encumbrance, lien or security thereon.

B. RATIONALE FOR AMALGAMATION 3. The Merger of the Transferor Company and the Transferee Company is proposed in order

to develop the management efficiency and potential for further growth and expansion of the market and to improve synergies, vertical integration, optimize resources and increase fund raising capabilities.

4. The Merger accordingly would, inter alia, have the following benefits:

a. Both the Transferor & Transferee Company are under the same management. Thus, the amalgamation will ensure focused management in combined entity thereby resulting in efficiency of management.

b. The amalgamation will also result in administrative and operational rationalization,

organization efficiencies, reduction in overheads and other expenses and optimal utilization of various resources.

c. The amalgamation will result in not only pooling of efficient human resources and

putting them to optimal utilization for the growth of the merged entity but also attracting efficient manpower by the merged entity.

d. The rationale for continuing with two separate entities no longer exists and it is

considered prudent and more appropriate to consolidate similar line of business in one entity. Such restructuring will lead to simplification of group structure by joining backward linkage industry with industry involved in production of final products, thus enabling focus on core competencies.

e. Consolidate the managerial expertise of the companies' involved thereby giving

additional strength to the operations and management of the amalgamated company resulting into expansion of the existing business.

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f. Result in enhanced leveraging capability of the combined entity, which in turn will allow the combined entity to undertake new venture or future expansion strategies and to tap bigger opportunities in the industry.

g. The scheme envisages transfer of entire undertaking of the Transferor Company as a

going concern to the Transferee Company and is in the interest of its shareholders, creditors, employees and all concerned.

C. CAPITAL 4. The summary of share capital of Transferor Company as of 30th June, 2019 is as follows:

Share Capital (Amount in Taka) Authorized Capital 60,00,00,000 Ordinary Shares of Taka. 10/- each.

600,00,00,000

Issued, subscribed and paid up capital

394,43,54,000

A description of the share capital (schedule X dated 14th October, 2018) and balance sheet are enclosed herewith as Schedule I. There has been no change in the capital structure of the Transferor Company subsequent to 30th June 2019.

5. The summary of share capital of Transferee Company as of 30th June, 2019 is as under:

Share Capital (Amount in Taka) Authorized Capital divided into 50,00,00,000 Ordinary Shares of Taka. 10/- each.

500,00,00,000

Issued, subscribed and paid up capital

236,06,82,360

A description of the share capital (schedule X dated 3rd December 2018 and Form XV for subsequent issuance of bonus shares on 18th December 2018) and balance sheet are enclosed herewith as Schedule II. There has been no change in the capital structure of the Transferor Company subsequent to 30th June 2019.

D. TRANSFER AND VESTING 6. Vesting of the Business

Upon the Effective Date, the Business of the Transferor Company shall be vested in the Transferee Company by virtue of and in accordance with this Scheme (subject to such conditions and limitations as the Shareholders of the parties (by mutual agreement) and/or the High Court, may impose), notwithstanding any terms in any agreement prohibiting such vesting and/or imposing any limitations on the circumstances in which any parts of the Business may be vested.

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7. Vesting of Assets Without generality to the above clause 6, unless otherwise excluded under this Scheme:

(a) On the Effective Date and with effect from the Appointed Date and subject to the provisions of this Scheme, the Assets of the Transferor Company shall, pursuant to Section 229 (2) of the Act, without any further act, instrument or deed, be and stand vested in and/or be deemed to have been and stand vested in the Transferee Company as a going concern so as to become as and from the Appointed Date, a part and parcel of the assets, rights, title, interests and authorities of the Transferee Company.

(b) Without prejudice to sub-clause 7(a) above, in respect of such of the Assets as are movable in nature or are otherwise capable of transfer by manual delivery or by endorsement and/or delivery, the same may be so transferred by the Transferor Company; and upon such transfer, become the property, assets, rights, title, interest, and authorities of the Transferee Company.

(c) For the avoidance of doubt, all the licenses, assignments, entitlements, permits, quotas, approvals, permissions, registrations, incentives, loans, subsidies, concessions, grants, rights, claims, leases, gas connection, WASA connection, electricity connection, tenancies and other benefits or privileges enjoyed or conferred upon or held or availed of by and all rights and benefits that have accrued, which may accrue to the Transferor Company shall, pursuant to the provisions of Section 229 (2) of the Act, without any further act, instrument or deed, be and stand vested in and available to the Transferee Company so as to become as and from the Appointed Date the licenses, permits, quotas, approvals, permissions, incentives, loans, subsidies, concessions, grants, rights, claims, leases, tenancies and other benefits or privileges of the Transferee Company and shall remain valid, effective and enforceable on the same terms and conditions to the extent permissible under law. It is hereby clarified that all inter party transactions between any/or all of the Transferor Company and the Transferee Company shall be considered as intra party transactions for all purposes from the Appointed Date.

(d) Any Assets (including all rights, interests, licenses, permits, quotas, approvals, permissions, registrations, incentives, loans, subsidies, concessions, grants, claims, leases, tenancies and other benefits or privileges enjoyed or conferred upon or held or availed of by and all rights and benefits that have accrued or may accrue) which have or may accrue to the Transferor Company after the Appointed Date and prior to the Effective Date in connection with or in relation to the Business shall, pursuant to the provisions of Section 229 (2) of the Act, without any further act, instrument or deed, be and stand vested in or deemed to have been vested in and available to the Transferee Company and shall remain valid, effective and enforceable on the same terms and conditions to the extent permissible under law.

8. Transfer of Liabilities

Upon the Effective Date and with effect from the Appointed Date and subject to further terms and conditions with regard to the extent of Liabilities as may be agreed between the Shareholders and/or the Creditors of both the Transferor and Transferee Companies:

(a) All Liabilities of the Transferor Company, shall pursuant to the provisions of Section 229

(2) of the Act, without any further act, instrument or deed, be and stand transferred to and vested in or deemed to have been transferred to and vested in, so as to become the Liabilities of the Transferee Company, and further that it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of such Liabilities have arisen in order to give effect to the provisions of this Clause. It is clarified that in so far as the assets of the Transferor Company are concerned,

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the security or charge over such assets or any part thereof, relating to any loans, debentures or borrowings of the Transferor Company, shall, without any further act or deed continue to relate to such assets or any part thereof, after the Effective Date and shall not relate to or be available as security in relation to any, or any part of, the assets of the Transferee Company, save to the extent warranted by the terms of the existing security arrangements to which any of/or the Transferor Company and the Transferee Company are party, and consistent with the joint obligations assumed by them under such arrangement.

(b) (i) Where applicable, all debentures, bonds, notes or other debt securities of the

Transferor Company, whether convertible into shares or otherwise (hereinafter referred to as “the Transferor Company’s Securities”), shall, pursuant to the provisions of Section 229 (2) of the Act, without any further act, instrument or deed become securities of the Transferee Company and all rights, powers, duties and obligations in relation thereto shall be and stand transferred to and vested in or deemed to have been transferred to and vested in and shall be exercised by or against the Transferee Company as if it were the Transferor Company in respect of the Transferor Company’s Securities so transferred.

(ii) Loans, advances and other obligations (including any guarantees, letters of credit or any other instruments or arrangements which may give rise to contingent liabilities in any form), if any, due or which may at any time in future become due between the Transferor Company and the Transferee Company shall stand discharged and there shall no liability in that behalf on either party.

(iii) Where applicable, any debentures or notes or other debt securities, if any, issued by the Transferor Company and held by the Transferee Company, and vice versa, shall, unless sold or transferred by the Transferor Company or the Transferee Company, as the case may be, at any time prior to the Effective Date, stand cancelled as on the Effective Date, and shall be of no legal effect and the Transferor Company or the Transferee Company, as the case may be, shall have no further obligation in that behalf.

(c) (i) Where any of the Liabilities of the Transferor Company as on the Appointed Date

transferred to the Transferee Company have been discharged by the Transferor Company after the Appointed Date and prior to the Effective Date, such discharge shall be deemed to have been for and on account of the Transferee Company.

(ii) All loans raised and utilized and all Liabilities incurred or undertaken by the Transferor Company in relation to or in connection with the Business after the Appointed Date and prior to the Effective Date shall be deemed to have been raised, used, incurred or undertaken for and on behalf of the Transferee Company and to the extent they are outstanding on the Effective Date, shall, upon the Effective Date, pursuant to the provisions of Section 229 (2) of the Act, without any further act, instrument or deed be and stand transferred to or vested in or be deemed to have been transferred to or vested in the Transferee Company and shall become the Liabilities of the Transferee Company which shall meet, discharge and satisfy the same.

(iii) All assets, rights, title, interests and authorities accrued to and/or acquired by the Transferor Company in relation to or in connection with the Business after the Appointed Date and prior to the Effective Date shall be deemed to have been accrued to and/or acquired for and on behalf of the Transferee Company and shall, upon the Effective Date, pursuant to the provisions of Section 229 (2) of the Act, without any further act, instrument or deed be and stand transferred to or vested in or be deemed to have been transferred to or vested in the Transferee Company to the extent and shall become the assets, rights, title, interests and authorities of the Transferee Company.

9. Conduct of Business

With effect from the Appointed Date and up to the Effective Date:

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(a) The Transferor Company shall carry on and shall be deemed to have carried on all its

business and activities as hitherto and shall hold and stand possessed of and shall be deemed to have held and stood possessed of the Business on account of, and for the benefit of and in trust for, the Transferee Company.

(b) All the profits, incomes or losses accruing or arising or unabsorbed deprecation or business

losses as mentioned in the income tax return to the Transferor Company, or expenditures or losses arising or incurred (including the effect of taxes, if any, thereon) by the Transferor Company shall, for all purposes, be treated and be deemed to be and accrue as the profits or incomes or expenditures or taxes of the Transferee Company, as the case may be.

(c) All taxes (including, without limitation, income tax, excise duty, customs duty, service tax,

VAT, etc.) paid or payable by the Transferor Company in respect of the operations and/or the profits of the Transferor Company before the Appointed Date, shall be on account of the Transferor Company and, insofar as it relates to the tax payment (including, without limitation, income tax, minimum alternate tax, dividend distribution tax, sales tax, VAT, excise duty, customs duty, services tax, etc.), whether by way of deduction at source, advance tax or otherwise howsoever, by the Transferor Company in respect of the profits or activities or operations of the Transferor Company with effect from the Appointed Date, the same shall be deemed to be the corresponding item paid by the Transferee Company, and, shall, in all proceedings, be dealt with accordingly.

(d) Any refund/credit and rebate under the tax laws/VAT laws due to the Transferor Company

consequent to the assessment made on Transferor Company and for which no credit is taken in the account as on the date immediately preceding the Appointed Date shall also belong to and be received by the Transferee Company. The Transferee Company is expressly permitted to revise and expressly permitted to file revise income tax returns, sales tax/VAT tax returns, service tax returns and other tax returns, and to claim refunds/credits, pursuant to the provisions of the Scheme. The Transferee Company shall be entitled to such tax, benefits including but not limited to minimum tax paid under section 16CCC or 82C of the Income Tax Ordinance, 1984 (as amended, July 2019) and the right to claim credit therefore including the benefit of brought forward losses or un absorbed depreciation as admissible under the provision of the Income Tax Ordinance, 1984 to the extent applicable of the Transferor Company from taxable profit of the Transferee Company with effect from the Appointed Date. The Transferee Company shall continue to enjoy the tax benefits/concessions provided to the Transferor Company’s through notifications/circular issued by the concerned authorities.

(e) Subject to the terms of the Scheme, the transfer and vesting of the Transferor Company as per the provisions of the Scheme shall not affect any transactions or proceedings already concluded by the Transferor Company on or before the Appointed Date or after the Appointed Date till the Effective Date, to the end and intent that the Transferee Company adopts all acts, deeds and things made, done and executed by the Transferor Company as acts, deeds and things made, done and executed by or on behalf of the Transferee Company.

(f) Upon the Scheme coming into effect, all taxes/ cess/ duties, direct and/or indirect taxes, receivable by or on behalf of the Transferor Company including all or any refunds, rebate and claims, including refunds, rebates or claims pending, un absorbed depreciation, accumulated losses as per income tax return of transferor company with any Governmental Authority including National Board of Revenue, Income Tax, VAT, Customs and including the right to claim credit for minimum alternate tax and carry forward of accumulated losses (including any unabsorbed depreciation), and unutilized VAT credit, rebate, VAT/AT refund etc. shall, for all purposes, be treated as the tax/ cess/ duty, liabilities or refunds, rebates, claims, accumulated losses and unutilized VAT credit, rebate, VAT / AT refund etc. of the Transferee Company. Accordingly, upon the Scheme becoming effective, the Transferee Company shall be permitted to revise, if it becomes

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necessary, its income tax returns, wealth tax returns, sales tax returns, excise and VAT returns, other statutory returns, and to claim refunds, rebates, set off, credits, pursuant to the provisions of this Scheme. For avoidance of doubt, it is hereby declared that all accumulated/accrued loss of income over the past years that are due and attributable to the Transferor Company be vested, by virtue of this Scheme, in the Transferee Company as if the said accrued loss has been inherited by operation of law under section 229 of the Companies Act, 1994 and the said amount shall be adjustable against the total income of the Transferee Company after coming into effect of the Scheme.

(g) The Transferee Company shall also be permitted to claim refunds / credits in respect of any transaction between the Transferor Company and the Transferee Company. Without prejudice to the generality of sub-clause (a) above, upon the Scheme becoming effective, the Transferee Company shall be permitted to revise, if it becomes necessary, its income tax returns and related withholding tax certificates, including withholding tax/VAT certificates relating to transactions between the Transferor Company and the Transferee Company, and to claim refunds, advance tax , VAT/AT and withholding tax credits, and carry forward of accumulated losses (including any unabsorbed depreciation) etc., pursuant to this Scheme.

(h) All withholding tax, if any, paid by the Transferor Company under the Income Tax

Ordinance, Value Added Tax Act or any other statute in respect of income of the Transferor Company assessable for the period commencing from Appointed Date shall be deemed to be the tax deducted from/advance tax paid by the Transferee Company and credit for such withholding tax shall be allowed to the Transferee Company notwithstanding that certificates or receipts or challans for withholding tax/advance tax are in the name of the Transferor Company and not in the name of the Transferee Company.

10. Continuity of Legal Proceedings

(a) Upon the Effective Date, all suits, actions and proceedings by or against the Transferor

Company pending and/or arising on or before the Effective Date shall be continued and be enforced by or against the Transferee Company as effectually and in the same manner and to the same extent as if the same had been pending and/or arising by or against the Transferee Company.

(b) The Transferee Company undertakes to have all legal, taxation or other proceedings

initiated by or against the Transferor Company referred to in Sub-clause 10(a) above transferred to its name and to have the same continued, prosecuted and enforced by or against the Transferee Company.

11. Contracts, Deeds and other Instruments

Upon the Effective Date, and subject to the provisions of this Scheme, all contracts, deeds, bonds, agreements, arrangements and other instruments (including all tenancies, leases, licenses and other assurances in favour of the Transferor Company or powers or authorities granted by or to it) of whatsoever nature to which the Transferor Company is a party or to the benefit of which the Transferor Company may be eligible, and which are subsisting or having effect immediately before the Effective Date, shall, without any further act, instrument or deed, be, in full force and effect against or in favour of the Transferee Company, as the case may be, and may be enforced fully and effectually as if, instead of the Transferor Company, the Transferee Company had been a party or beneficiary or oblige thereto. The Transferee Company shall, at any time prior to the Effective Date, wherever necessary, enter into, and/or issue and/or execute deeds, writings, confirmations, any tripartite arrangements or novations to which the Transferor Company will, if necessary, also be a party in order to give formal effect to the provisions of this Clause.

12. Further Assurances

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To the extent that the Scheme is not effective in transferring any part of the Business, Assets or Liabilities to the Transferee Company, at any time after the Effective Date in accordance with the provisions hereof, if so required under any law or otherwise, the Transferee Company and/or the Transferor Company shall, enter into, issue or execute deeds, writings, confirmations, any tripartite arrangements, novations, declarations or other documents with, or in favour of any party to any contract or arrangement to which the Transferor Company are parties or any writings as may be necessary to be executed in order to give formal effect to the provisions of this Scheme. The Transferee Company shall be deemed to be authorized to execute any such writings on behalf of the Transferor Company to carry out or perform all such formalities or compliances required for the purposes referred to above on the part of the Transferor Company.

13. Saving of concluded transactions

For the avoidance of doubt, the transfer of liabilities and properties and the continuance of proceedings by or against the Transferee Company shall not affect any transaction already concluded by the Transferor Company on or after the Appointed Date till the Effective Date, to the end and intent that the Transferee Company accepts and adopts all acts, deeds and things done and executed by the Transferor Company in respect thereto as done and executed as done and on behalf of itself.

14. Staff and Employees

(a) Subject to approval of the Merger Scheme by the High Court of Bangladesh, employees

of the Transferor Company in service on the Effective Date shall become the employees of the Transferee Company on such date without any break or interruption in service and on such terms and conditions that were agreed between the employees and the Transferor Company and subject to business requirements of the Transferee Company. The Transferee Company undertakes to continue to abide by any agreement/settlement, if any, entered into by the Transferor Company with any of its employees.

(b) The existing provident, gratuity, workers’ profit participation fund (if any) or other

employee-related funds created by the Transferor Company shall, upon the Effective Date and with effect from the Appointed Date, be transferred to the relevant funds of the Transferee Company and till such time shall be maintained separately and thereafter, the Transferee Company shall be responsible for all purposes whatsoever in relation to the administration or operation of such funds or in relation to the obligation to make contributions to such funds. The Transferee Company undertakes to continue to abide by the provisions of any “Trust Deeds" of any such funds.

(c) Subject to any separate agreement of the Shareholders of the parties, upon the Effective Date, all directors of the Transferor Company, except Mrs. Tehseen Zohair Taherali, will be entitled to directorships in the Transferee Company by virtue of the provisions of the Scheme. This Scheme will not affect the directorship of a person who is already a director in the Transferee Company as of the Effective Date.

E. RE-ORGANIZATION OF CAPITAL 15. Following the Effective Date, and in consideration of the vesting of the Business and Assets

in accordance with the terms of this Scheme, the Transferee Company shall without further application, act, instrument or deed, issue and allot to the Shareholders of the Transferor Company whose names are recorded in the register of members of the Transferor Company or to any other person as may be nominated by the Shareholder(s), on a date (hereinafter referred to as the “Record Date”) to be fixed by the Board of Directors of the Transferee Company, up to 10,86,43,936 ordinary shares of Tk. 10 each, credited as fully diluted paid-

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up, amounting up to 34,47,12,172 shares of the Transferee Company’s total fully diluted paid up equity capital at the Effective Date at a share consideration exchange ratio of 1:0.5005, or such adjusted number of ordinary shares as may be agreed upon by the Shareholders of both the parties, subject to any amendments required pursuant to Clause 23. Accordingly, subject to the provisions of Clause 6 to 14 and 23 hereof, the Shareholders of the Transferor Company shall be entitled up to 10,86,43,936 of ordinary shares of Tk. 10 each, or such adjusted number of ordinary shares as may be agreed upon by the Shareholders of both the parties (the “Consideration Shares”). In determining the value of the shares of each entity, the Board of Directors of the respective entity has relied on the Valuation Reports dated 26.09.2019 prepared by ACNABIN, Chartered Accountants and the said Valuation Reports of the Transferor Company and the Transferee Company are hereby made part of the Scheme and annexed hereto as Schedule “A”. Based on the share exchange ratio, the shares to be issued by Transferee Company to the existing shareholders of the Transferor Company shall be as set forth in the table below:

Shareholders Name

BSRM Steel Mills Limited (BSRM SML)

Bangladesh Steel Re-Rolling Mills limited (BSRM LTD)

Existing (Pre-merger) number of shares held by different shareholders as of 30 June, 2019

Number of new shares (Post merger) to be issued by BSRM LTD at Exchange Ratio [1: 0.5005]

(No. of paid-up Shares) (No. of shares in BSRM LTD)

Mr. Alihussain Akberali FCA 2,541,675 1,272,108 Mr. Aameir Alihussain 9,339,400 4,674,370 Mr. Zohair Taherali 7,032,097 3,519,565 Mrs. Tehseen Zohair Taherali 1,477,300 739,389 Mr. Abdul Qadir Zohair 33,340 16,687 Mrs. Sabeen Aameir 176,660 88,418 Mrs. Bilkis Alihussain 10,645,728 5,328,187 BSRM Steels Limited 100,000,000 50,050,000 Bangladesh Steel Re-Rolling Mills limited

177,364,600 Not applicable (Own Shares)

H. Akberali & Co. Limited 44,264,600 22,154,432 Mr. Ali Ashgar Badruddin 3,160,000 1,581,580 Mr. Shabbir Badruddin Africawala

38,300,000 19,169,150

BSRM Foundation 100,000 50,050 Total number of shares 394,435,400 108,643,936

Note: Figures have been rounded-off to Zero.

Following re-organization of capital, as on the Effective Date, the shareholding structure of the Transferee Company post-amalgamation would be as set forth in the table below:

Pre-merger number of shareholdings

New shares to be issued for merger

Post-merger shareholdings

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Shareholders Name

No of shares

% No of shares

% No of shares

%

Mr. Alihussain Akberali FCA

29,238,249 12.39% 1,272,108 1.17% 30,510,357 8.85%

Mr. Aameir Alihussain

22,720,109 9.62% 4,674,370 4.30% 27,394,479 7.95%

Mr. Zohair Taherali

7,563,012 3.20% 3,519,565 3.24% 11,082,577 3.22%

Mrs. Tehseen Zohair Taherali

8,182,750 3.47% 739,389 0.68% 8,922,139 2.59%

Mr. Abdul Qadir Zohair

6,122 0.00% 16,687 0.02% 22,809 0.01%

Mrs. Sabeen Aameir

5,330,122 2.26% 88,418 0.08% 5,418,540 1.57%

Mrs. Bilkis Alihussain

21,493,760 9.10% 5,328,187 4.90% 26,821,947 7.78%

BSRM Steels Limited

- 0.00% 50,050,000 46.07% 50,050,000 14.52%

H. Akberali & Co. Limited

31,786,839 13.47% 22,154,432 20.39% 53,941,271 15.65%

Karnafully Engineering Works Ltd.

5,325,131 2.26% - 0.00% 5,325,131 1.54%

BSRM Foundation

- 0.00% 50,050 0.05% 50,050 0.01%

Mr. Ali Ashgar Badruddin

22,000,000 9.32% 1,581,580 1.46% 23,581,580 6.84%

Mr. Shabbir Badruddin Africawala

- 0.00% 19,169,150 17.64% 19,169,150 5.56%

General 82,422,142 34.91% - 0.00% 82,422,142 23.91% Total Number of Shares

236,068,236

100.00%

108,643,936

100.00%

344,712,172

100.00%

16. Upon the Effective Date and the issuance of the consideration shares, ordinary shares of

the Transferor Company (including those held by the Transferee Company, if any) on the Record Date shall be cancelled and deemed to have been cancelled without any further act or deed, and shall be of no effect on and from the Record Date and no further shares (except 10,86,43,936 shares) of the Transferee Company are required to be issued in lieu thereof.

17. The Consideration Shares issued and allotted by the Transferee Company in terms of this

Scheme and/or any other agreement between the Shareholders of the Parties shall be subject to the provisions of the memorandum and articles of association of the Transferee Company and shall rank pari-passu in all respects with the then existing ordinary shares of

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the Transferee Company, including in respect of dividends, if any, that may be declared by the Transferee Company, on or after the Effective Date. The issue and allotment of Consideration Shares to the shareholders of the Transferor Company as provided in this Scheme is an integral part of this Scheme and shall be deemed to have been carried out without requiring any further act on the part of the Transferee Company or its shareholders and as if all the relevant procedure laid down in all applicable statute has been complied with.

F. DISSOLUTION OF TRANSFEROR COMPANY 18. Following the Effective Date, all equity shares of the Transferor Company (including those

held by the Transferee Company either directly or through nominees) shall stand cancelled without any further application, act or deed. It is clarified that no new shares shall be issued or payment made in cash whatsoever by the Transferee Company in lieu of such shares of the Transferor Company.

19. Following the Effective Date and the issue of ordinary shares in accordance with clauses

15 to 16 above, the Transferor Company shall stand dissolved without winding up, without any further act or deed and the Transferor Company shall be removed from the register of the Registrar of Joint Stock Companies and Firms.

G. GENERAL TERMS AND CONDITIONS 20. Dividends

With effect from the date of filing of this Scheme with the High Court Division of the Supreme Court of Bangladesh (hereinafter called the “High Court”) and up to and including the Effective Date, the Transferor Company shall not be entitled to declare and pay dividends, whether interim or final, to its ordinary shareholders in respect of the accounting period prior to the Appointed Date. Upon approval of the Scheme by the Hon’ble High Court Division, the Transferee Company shall be entitled to declare dividends including any reserve or income accrued for the past period by aggregating the income of the Transferor Company as that of the Transferee Company.

21. Accounting Treatment (a) From the Effective Date and with effect from the Appointed Date, for the purposes of

accounting and dealing with the value of the assets and liabilities of the Transferor Company in the books of the Transferee Company, the assets and liabilities of the Transferor Company as appear in their respective financial statements as of the Appointed Date shall be accounted following the accepted applicable accounting principles as prescribed by International Accounting Standards (IAS) and/or International Financial Reporting Standards (IFRS).

(b) The Transferee Company shall record the assets and liabilities of the Transferor Company pursuant to this Scheme at their respective book values as appearing in the books of the Transferor Company and necessary adjustment will be made following the accepted applicable accounting principles as prescribed by International Accounting Standards (IAS) and/or International Financial Reporting Standards (IFRS).

(c) Any excess/surplus of the net assets of the Transferor Company over the paid-up value of

the shares to be issued and allotted by the Transferee Company pursuant to this Scheme, shall be transferred and credited to the “Capital Reserve/Goodwill” in the books of the Transferee Company.

12

(d) In case of any difference in accounting policy between the Transferor Company and the Transferee Company, a uniform set of accounting policies shall be adopted following the amalgamation. The effects on the financial statements of any changes in accounting policies will be reported in accordance with International Accounting Standards (IAS) and/or International Financial Reporting Standards (IFRS).

(e) Notwithstanding anything contained in this clause 21, in preparing the financial statements,

the accounts of BSRM Steels Limited will be closed and completed first, as it will hold 14.52% shares of BSRM Limited after merger. Thereafter, the accounts of Bangladesh Steel Re-Rolling Mills Limited (Transferee Company) will be completed as it holds 31.19% shares in BSRM Steels Limited, in the cross-holding. By this way, profit of BSRM Steels Limited will be included in the accounts of Bangladesh Steel Re-Rolling Mills Limited as per IAS-28 and BFRS-3 (equity method), whereas the dividend of Bangladesh Steel Re-Rolling Mills Limited, when declared will be included in the accounts of BSRM Steels Limited on cost method.

22. Modifications/Amendments to Scheme (a) This Scheme is subject to the approval of the shareholders in an EGM under the supervision

of the Hon’ble Court, and the Board of Directors of the Transferor Company and the Transferee Company may assent on behalf of all concerned from time to time to, any modifications or amendments or additions to this Scheme or to any conditions, which the Shareholders of the parties (as mutually agreed), and/or the High Court, may think fit to approve or impose.

(b) The Board of Directors of the Transferor Company and the Transferee Company may do and execute all acts, deeds, matters and things necessary for bringing this Scheme into effect; or to review a position relating to the satisfaction of the conditions to this Scheme; and if necessary, to waive any of those (to the extent permissible under the law) for bringing this Scheme into effect.

(c) In relation to a condition, limitation, reduction or withdrawal of an existing authorization imposed by a Governmental Authority that could reasonably expected to have a material adverse impact on the Transferee Company as the surviving entity, the Board of Directors of the Transferor Company and the Transferee Company may, on a mutual consent basis, agree to proceed with implementing the Scheme. In such event, if the parties agree on a mutual consent basis to proceed with implementing the Scheme, such a condition, limitation, reduction or withdrawal of an existing authorization by a Governmental Authority, shall not constitute a Burdensome Condition.

23. Conditionality of the Scheme

This Scheme is conditional upon the following being satisfied:

(a) The Scheme being agreed to by the requisite majority of the members of the Transferor Company and the Transferee Company as required under the Act and the sanction by the Hon’ble High Court under Section 228 read with Section 229 of the Act and to requisite orders made by the Hon’ble High Court pursuant to Section 228 read with Section 229 of the Act for amalgamation of the Transferor Company with the Transferee Company and for implementation of this Scheme;

(b) Such other sanctions and approvals including sanctions and approvals including sanctions of any governmental or regulatory authority including the Bangladesh Securities and Exchange Commission, waiver of requirements under Securities and Exchange (Substantial Acquisition and Takeover) Rules, 2002 (if applicable), creditor, lessor or

13

contracting party as may be required by law or contract in respect of the scheme being obtained; and

(c) The Transferor Company has complied with the conditions, if any, set out in the no objection certificates of banks and/or financial institutions with whom the Transferor Company has outstanding Liabilities; each a “Condition” and together, the “Conditions”.

24. Effective Date The Merger shall be deemed to have been effective on the date that all the Conditions have been satisfied and the certified copy of the Order made by the High Court Division is filed with the RJSC Merger (the “Effective Date”).

25. Failure to take effect

In the event of this Scheme failing to take effect finally by 30th June 2021 or any other later date as may be determined by the Board of Directors of the Transferee Company, this Scheme shall become null and void and in that event, no rights and liabilities whatsoever shall accrue to or be incurred inter se by parties or their shareholders or creditors or employees or any other person(s), unless the period of validity is extended by the High Court at its discretion.

26. Severability

If any part of the Scheme is found to be unworkable for any reason, the same shall not, subject to the decision of the Transferor Company and the Transferee Company, affect the validity and implementation of the other parts and/or provisions of this Scheme.

27. Withdrawal, Revocation or Cancellation of the Scheme

The Boards of Directors of the Transferor Company and the Transferee Company shall be entitled to withdraw this Scheme prior to the Effective Date. The Boards of Directors of the Transferor Company and the Transferee Company shall be entitled to revoke, cancel and declare the Scheme of no effect if they are of the view that the coming into effect of the Scheme with effect from the Appointed Date could have adverse implications on the Transferor Company and/ or the Transferee Company.

28. Costs, Charges and Expenses connected with the Scheme

All costs, charges and expenses, including any taxes and duties of the Transferor Company and the Transferee Company respectively in relation to or in connection with this Scheme and incidental to the completion of the amalgamation of the Transferor Company in pursuance of this Scheme shall be borne and paid by the Transferee Company.

14

SCHEDULE – I [Schedule X and balance sheet of Transferor Company]

ISSUE NO1 I SEP 201s

Schedule - X(See sedion 35)

**ii;Hgll"f '-:ttff .r"ri^'#i"f+3'"i3iff^[3.-'*

summary ofsha& capital and sharc ofBsRM Steel MiIs Limfted neg No. ch-6561 , R€g Date: 16'APR-08, Entity Address:House4, Road'3, Nasirabad

Housing-society . Chittagong made up to lhe 14th day ofoctober 2018

1 being the day ofthe firS geneml meeting in ...... . ... )

Nominal sharc capit l Tk 600,00,00,000.00 divid€d into 60,00,00,000 sharcs ofTk' 10 00 each'

qlf

l. Total number of shares taken up to the l4th day of october,2018 which ( number must agree with total shown in the list as held

by existing members).

Number of shares issued subject to payment wholly in cash

Number of shares issued as fully paid-up otherwise than in cash

(a) Number of shares issued as partly paid-up to the extent of per Share otherwise than in cash

(b) Extent payment to be made per share otherwise than in cash """""5,6,7Therehas been called up on each of shares 10.00 of Class O.rdinary Share

8 Total amount received on calls

g (a) Total amount received along with application for shares

(b) Numbers of Shares allotted on application .""""""'

l0 Total amount; if any, agreed to be considered as paid on shares which have been issued a fully paid up otherwise than in cash

11 Total amount, if any, agreed to be gonsidered as paid on Shares which have been issued as partly paid up to the extent of per

share..........

12 Total amount of calls unPaid

13 Total amount if any, of sums paid or allowed in respected of shares or debentures since date of last summary

(a) as commission

(b) as discount ............

14 (a) Total number of shares forfeited if any ....'....

(b) Total money Paid thereon

2.aJ

4

39,44,35,400

39,44,35,400

394,43,54,000.00

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15 Total amount of shares and stock for which share-warrants are outstanding

16 Total amount of share-warrants issued and surrendered respectively since date of last summary....

l7 Number of Shares or amount of stock comprised in each share-warrant

Total amount of debt due from the Company in respect of all mortgages and shares which are required to be registered with the

lE Registrar under the Companies Act, 1994 ...............

4,030,00,00,000.00

@ ihe numbers and noryrnal rllug rgpgatg

have held shares therein at any time since

i" a"t" ofti" l,a.t t"tum. showing their names and addresses and an acgoM oM

Wh"*-a.i"rs amountt hure b"en called there are shares of different kinds, state sepq49ly.

iied, as well as on exlsting shares' State t number of share forfeite

NAMES ADDRESS AND OCCUPATIONS ACCOUNTS OF SHARES

Number ofShares heldby ExistingMembers atthe Date of

Return.

Particulars of SharesTransferred since the Date ofthe Last Return bY Persons

who are Still Members

Particulars of SharesTransferred since the Date

of the Last return bYPersons who have Ceased

to be Members.

Remarkssl. Folio in

RegisterLedgerconta-ining

Partic-ulars

Name Father's/Husband's

Name

Address andNationality

Occupatlon/Caste

NumberDate of

Registration ofTransfer

NumberDate of

Registration ofrransfer

1 02Mr.

AlihussainAkberali FCA

S/O- LateMr. Akberali

A. Africawala

House No.4,RoadNo.3, NasirabadHousing SocietY,Chittagong,Bangladeshi

Industrialist 254L675 ['ffi'2

3

03Mr. ZohairTaherali

S/O- LateMr. Taherali

A. Africawala

C-4, Sanmar ParkAvenue, Road:6,Khulshi, PO: 4225,Chittagong,Banqladeshi

Industrialist 7032097

qF-{Etct'sfis

i.4lottS

ff<tEf{I I6lE?F ' I

-_s-sla-{!r+

$tI

o4Mr. AameirAlihussain

S/O- Mr.Alihussain

Akberali FCA

House No.4,RoadNo.3, NasirabadHousing Society,Chittagong,Bangladeshi


I lq(fr Ee !'l flqtfir'ldri'i.ni,*t", lV -%Jr\',

14773004 05Mrs. Tehseen

Zohair Taherali

WO- Mr.Zohair

Taherali

C-4, Sanmar Park{venue, Road:6,(hulshi, PO: 4225,3hittagong,R:naladeshi

Industrialist

Industrialist

Business

t06457285 06

Mrs. BilkisAlihussain

WO- Mr.Alihussain

Akberali, FCA

House No.4,RoadNo.3, NasirabadHousing Society,Chittagong,Rennl:dechi

t766606 a7

Mrs. SabeenAameir

WO- Mr.Aameir

Alihussain

House No.4,.RoadNo.3, NasirabadHousing Society,Chittagong,

Business 333407 08

Mr. AbdulQadir Zohair

S/O- Mr.Zohair

Taherali

C-4, Sanmar ParkAvenue, Road:6,Khulshi, PO: 4225,Chittagong,Bangladeshi

B 10BSRM Steels

Limited

Ali Mansion,Sadarghat Road,Chittagong,R:nnlarleshi

Business 100000000!!,.<

Business t77364600 -"@s9 11

BangladeshSteel Re-

Rolling MillsLimited

Ali Mansion,Sadarghat Road,3hittagong,lanoladpshi

Business 44264600

"rJo

qR+dsdyA

lt StoF1gaffstglda t

'h ., {r. P1 rg10 09H. Akberaliand Co.Limited

Ali Mansion,Sadarghat Road,Shittagong,Bangladeshi

11 L2BSRM

Foundation

Ali Mansion,Sadarghat Road,Chittagong,Banqladeshi

Business 100000

dlsq!G"

qrrtt+Lffiil{(

F{s<xqrr.fr{s-<'n {t*8(€ff4(fflF,d{tr I

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t2 13

Mr. AliAsghar

BadruddinAfricawala

S/O-Mr.BadruddinAfricawala

Ali Mansion,Sadarghat Road,Chittagong, Canadian

Business 3160000

Business 0 100000 08-MAY-18Transfer toMr.Radrr rrldin13 t4 Mr. Abbas

Jumani

S/O-Mr.Yusuf AliIrrmani

M/s North StarInternational, AjmanFree Zone, P.O Box-

80114, N/A, Pakistani {fricawala)n18.05.2018

t4 15Mr. Saifuddin

Abbas UnwalaS/O-Late

Abbas Unwala

P.O Box- 3600, Abu)habi, UAE., N/A,3anadian

Business 0 18100000 08-MAY-18

Transfer: toMr.BadruddinAfricawalaon08.05.2018

15 16Mr. IqbalHussain

S/O-LateAbdul

HussainAfricawala

Time Enterprise,Naaz Chamber-2ndFloor Room NO -43/44, Sharah ELiakat, Karachi,Pakistan, N/A,Pakistani

Business 0 20100000 08-MAY-18

Transfer toMr.BadruddinAfricawalaon08.05.2018

16Mr, ShabbirBadruddinAfricawala

Mr,BadruddinAfricawala

4055 SeebringCrescent,Missossauga Ontario,Canada, N/A,Canadian

Business 38300000

20. Names and Addresses of the persons who are the Directors of the BSRM steel Mills Limited on the l4thday of october, 2o18

Name Address

Mr. Alihussain Akberali FCA House No.4,Road No.3, Naslrabad Housing Society, Chtttlggng

Mr. Zohair Taherali C-4, Sanmar Park Avenue, Road:6, Khulshi, PO:4725,Chittagong

Mr. Aameir Alihussain House No.4,Road No.3, Nasirabad Housing Society, Chittagong

Mrs. Tehsee n Zohair Taherali -4- Sanmar Park Avenue, Road:6, Khulshi, PO:4225, Chittagong

Mr, Mono Ranjan Dey FCAMRH Dey And Co, Chartered Accountants, R B Court ( Grounct lloor), )4Agrabad C/A, Chittagong

21. Names and Addresses of the persons who are the Managing Director, Managing Agents or Managers and

Auditors of the BSRM steel Mills Limited on the 14th day of october, 2018

-.ffisxfi-qtqT€<Fmlelgrtn-aratcAar r

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Name Address

Mr. Aameir Alihussain Flouse No.4,Road No.3, Nasirabad Housing Society,Chi{ryg1g

HUSSAIN FARHAD & CO.

Chartered AccountantsYunusco City Center (9th Floor) 807, CDA Avenue, Nasirabad,Chittagong

I Mr. Aameir Alihussain do hereby certiff that .-

a) The above list and Summary truly and correctly states the facts as they stood on the l4th day of October ' 2018

Ui fne Company has not since the date of its incorporation last Return issued any invitation to the public to subscribe

for any sharis oi debentures of the Company (in case of private company); and

c) The excess of the number of its memberjbeyond fifty shown in the list are the persons who are in the employment

for the Company, (in case of private company).

Second Signatory .......SD/-........

Name :Mr. Alihussain Akberali FCA

Position : Director

Address :House No.4,Road No.3, Nasirabad Housing Society

District :--- Select ---

Signed by .......SD l'........,,.

Name :Mr. Aameir AlihussainPosition : Managing Director

C-4, Sanmar Park Avenue, Road:6, Khulshi,Aodress ipo:'4225District :--- Select ---

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Cilh*"*u

15

SCHEDULE – II [Schedule X, Form XV and balance sheet of Transferee Company]

1r '

RISC : Schedule X/

Schedule - X(See Section 35)

ANNUAL SUMMARY OF SHARE CAPITAL AND LIST OF SHAREHOLDERSDIRECTORS AS REQUIRED BY PART I OF THE ORDINANCE

Summary of share capital and share of BANGLADESH STEEL RE- ROLLING MILLS LTD. ,Reg No. CH-186A , Reg Date:18-MAY-02, Entity Address:Ali Mansion, 1207,1099 Sadarghat Road , Chittagong made up to the O3rd day of December2018( being the day of the first general meeting in ............ )

Nominal share capital Tk. 500,00,00,000.00 divided into 50,00,O0,000 shares of Tk. 10.00 each.

1. Total number of shares taken up to the O3rd day of December, 2018 which ( number mustagree with total shown in the list as held by existing members).

2' Number of shares issued subject to payment wholly in cash

3 Number of shares issued as fully paid-up otherwise than in cash...........

, (a) Number of shares issued as partly paid-up to the extent of per Share otherwise than in' cash(b) Extent payment to be made per share otherwise than in cash .........

5,6,7There has been called up on each of shares ro.oo of Class ordinary Share

8 Total amount received on calls

9 (a) Total amount received along with application for Shares

(b) Numbers of Shares allotted onapplicationTotal amount; if any, agreed to be considered as paid on Shares which have been issued a fullypaid up otherwise than in cash ............Total amount, if any, agreed to be considered as paid on Shares which have been issued aspartly paid up to the extent of per share.Totai amount of calls unpaid

Total amount if any, of sums paid or allowed in respected of shares or debentures since date oflast summary(a) as commission .........

(b) as discount .............

(a) Total number of shares forfeited if any .........

(b) Total money paid thereon'Total amount of shares and stock for which share-warrants are outstanding ......,..Total amount of share-warrants issued and surrendered respectively since date of lastsummary.,..Number of Shares or amount of stock comprised in each share-warrant ................

rssr,ry NO ghA4

10

11

72

13

15

16

t7

14

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2L,46,O7,488

2t,46,O7,488

2t4,60,74,880.00

l0 JAil 20ts

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N 1$1s

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RISC: ScheduleX Poge2of4

,. Total amount of debt due from the company ln respect ofall mortgages and shares whlch are I t,s:f,os,ze,lrz.oo'- required to be reglstered wlth th€ ReglstEr under the Companles Act, 1994 ............... I

Notes :

ia) When there are shares of different kinds or amounts (e.9. preference and ordinary of Tk. 200 orTk. 100) state the numbers androminal value separately.b) Where various arnounts have been called there are shares of different kinds, state separately.

(b) Where various amounts have been received or forfeited, as well as on existing shares. State the agree gate number of share forfeite

19. List of persons shares in on BANGLADESH STEEL RE- ROLLING MILTS LTD. the O3rd day of December,2018 and of persons who have held shares therein at any time since the date of the Last Return. showing theirnames and addresses and an account of the shares so held.

NAMES ADDRESS AND OCCUPATIONS ACCOUNTS OF SHARESst. Folio in

RegisterLedgerconta-iningPartic-ulars

Name Father's/Husband'sName

Address andNationality

Occupation/Caste

Number ofShares heldby ExistingMembers atthe Date ofReturn.

Particulars of SharesTransferred since theDate of the Last Returnby Persons who are StillMembers

Particulars of SharesTransferred since theDate of the Last return byPersons who have Ceasedto be Members.

Remarks

NumberDate of


NumberDate of


1Mr. ZohairTaherali

Late Mr.TaheraliA.Africawala

C-4, Sanmar ParkAvenue, Road-6,Khulshi, PO: 4225,Chittagong,Bangladeshi


2Mr. AameirAlihussain

Mr.Alihussain

Akberali FCA

House No.4, RoadNo. 3, NasirabadHousing Society,,Chittagong,Banqladeshi

Industrial 20654645 EffiI3

Mr.Alihussain

Akberali, FCA

Late Mr.Akberali A.Africawala

House No. 4, RoadNo. 03, NasirabadHousing Society,Chittagong,Bangladeshi

Industrial 26580227

-qlot-;qfuizv4l!'rt{R!

4$

op$"

r<Frstii&ar r

h 1[*\=s-

rAl a1g

4Mrs. Sabeen

Aameir

WO- Mr.Aameir

Alihussain

House No.4, RoadNo.3, NasirabadHousing Society,,Chittagong,Bangladeshi

Business 4845566

*d\tq.cVIdl.st$rqpr

V

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zuSC : Schedule X Page 3 of4

5 As PerAttached List

Ali Mansion , 7207,1099 SadarghatRoad, Chittagong,Banqladeshi

Business 94934783

6 Tehsin ZohairTaherali

WO: Mr.Zohair

Taheral

C-4, Sanmar ParAvenue, Road -6,Khulshi, Chittagong,Bangladeshi


7 Mrs. BilkisAlihussain

w/o:Alihussain

Akberali FCA

House No. 4, RoadNo. 03, NasirabadHousing Society,Chittagong,Bangladeshi


8Karnafully

EngineeringWorks Limited

Ali Mansion,Sadarghat Road,Chittagong,Bangladeshi

Business 484LO2A

9 H Akberaliand Co Limited

Ali Mansion,Sadarghat Road,Chittagong,Bangladeshi

Business 28897L27

20. Names and Addresses of the persons who are the Di.ecto.s of the BA GLADESH STEEL RE- ROLLING litILLlS LTD. on the O3rdday ofDec€mber , 2OlE

Name AddressMr. Aameir Alihussain House No.4, Road No. 3, Nasirabad Housing Society,, ChittagongMr. Alihussain Akberali, FCA House No. 4, Road No. 03, Nasirabad Housing Society, ChittagongMrs. Sabeen Aameir House No.4, Road No.3, Nasirabad Housing Society,, ChittagongMr. Mono Ranjan Dey FCA (IndependentDirector)

MRH Dey And Co., Chartered Accountants, R. B. Court (Ground Floor), 54 Agrabad C/A.,Chittagong

Mr. Zohair Taherali (Representative ofH. Akberali & Co. Limited) C-4, Sanmar Park Avenue, Road-6, Khulshi, Chittagong

21. Names and Addresses of the persons who are the Managing Director, Managing Agents or Managers andAuditors of the BANGLADESH STEEL RE- ROLTING MILLS LTD. on the O3rd day of Oecember, ZOtg

Name AddressMr. Aameir Alihussain House No.4, Road No. 3, Nasirabad Housing Society,,ChittagongRahman Rahman Huq, CharteredAccountants MM Trade Centre (13th Floor), 78 Agrabad C/A,Chittagong

I Alihussain Akberali FCA do hereby certify that --a) The above list and Summary truly and correctly states the facts as they stood on the O3rd day of Dec€mber, 2O18

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RISC : Schedule X

!) fne Company has not since the date of lts incorporatlon last Return issued any invitation to the public to subscribefor any shares or debentures of the company (in case oF private company); andc) The excess of the nurnber of its members beyond fifty shown in th; list-are the persons who are in the employmentfor the Company, (in case of private company).

Page 4 of4

Second Signatory .......SD/-

Name :Aameir AlihussainPosition :Managing DirectorAddress :


Signed by .......SD l-......,....

Name :Alihussain Akberali FCAPosition :ChairmanAddress :


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rssuE NO eg23 Page 1 of2

Form-XVRETURN OF ALLOTMENT

THE COMPANIES ACT, 1994(See Section 151)

Registrar pursuant to section 151-KA

Presented for filing by Aameir Alihussain

1. xxShares allotted payable in cash :-

2. Shares allotted for a consideration other than cash :-

NumberNominal AmountAmount to be treated as paid up on each shareThe consideration for which such shares have been allotted is as follows :-

3. *x

Name of the Company

Entity Address:Return of Allotments of theMade of the following date/dates*

Name:Mr,Aameir AliHussain

BANGLADESH STEEL RE- ROLLING MILLSLTD., Reg No. CH-186A

Ali Mansion, 1207, 1099 Sadarghat Road, Chittagong

2,L4,6O,748 Bonus Shares of Tk. 10/- Each.

18/DEC/2018

Tk.

Tk.

Tk.

Number of shares issued At a Discount (Vide Section 151-KHA)

Nominal Amount of the shares so issued

Amount of discount per share

Paid up per share

*Insert date or date of the Allotments.xxDistinguish be given preference, ordinary, or other description shares, specifyingredeemable Preference Shares. If any in all cases

:

Tk.

Tk.

Tk.

Name, Address and Description

House No-04,Road

Number Nominal AmountDue and Payable.......called Up per share

(including Application)and Allotment

Paid Up (excludingPremiums on Shares and

Calls in Advance)Per Share Total

(r) (2) (3) (4) (5)

Bonus Share : 2,L4,6Q,748 21,46,07,480,00 10.00 10.00 2L,46,07,480.00

L8lL2/20t8

Name:Mr. Zohair TaheraliFather's Name:Late Mr,Taherali A. Africawala

eTin:13517239 1356

C-4, Sanmar ParkAvenue, Road-6,

Khulshi, PO:4225 ,Chittagong

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$ttz/20$Father'sName:Alihussain Akberali

eTin:182692726652

No. 3, Nasirabad

H/S , Chittagong Industrialist 20,65,464

L8/t2/20r8

Name: Bilkis AlihussainFather's Name:Wo. AliHussain Akberali

eTin:885431496538

6/A, Sanmar ParkAvenue, Road 6,

Khulshi VA, ,Chittagong

Business 19,53,978

LUr2l20L8

Name:Mrs, TehseenZohair TaheraliFather's Name:Mr.Taherali Fakhri

eTin:821039392867

C-4, Sanmar ParkAvenue, Road 6,

Khulshi , ChittagongBusiness 7,43,886

L8lL2l20t8

Name:Mr. AlihussainAkberali FCAFather's Name:LateAkberali AlibhaiAfricawala

eTinr582274994595

House No. 4 RoadNo.3 Nasirabad

Housing Society,Chittagong ,

Chittagong

Industrialist 26,59,022

18lL2l2OL8

Name:H Akberali and CoLimitedFather's Name:eTin:426044515398

Ali Mansion,Sadarghat Road ,

ChittagongBusiness 2g,gg,712

18/t2l20L8Name:Schedule AttachedFather's Name:eTin:,

, --- Select --- 94,93,492

t8l12/20t8

Name:Mrs, SabeenAmameirFathGr's Name:eTin:11 1312515799

House 4, Road 3,Nasirabad Housing

Society, , ChittagongBusiness 4,84,556

t8/t212018

Name:KarnafullyEngineering WorksLimitedFather's Name:eTin:851483824552

All Mansion,Sadarghat Road ,

ChittagongBusiness 4,84,t02

Signed by: Aameir AlihussainPosition : Managing Director

t$19

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In Taka ASSETS Property, plant and equipment Intangible assets Investment in subsidiaries and associate Other investments Non-current assets

Short term investment Inventories Trade and other receivables Current account with related companies Advances and deposits Cash and cash equivalents Current assets Total Assets

Equity Share capital Share premium General reserve Revaluation reserve Retained earnings 12% Convertible coupon bond-equity component Total equity Liabilities Long term borrowings- non current portion Defined benefit obligations - Gratuity Deferred tax liability Non-current liabilities

Trade payables Short term borrowings Current portion of long term borrowings Current account with related companies Advance against sales Liabil ities for expenses Current tax liability Provision for W PPF and Welfare Fund Other liabilities Current liabilities Total liabilities Total equity and liabilities

The annexed notes 1 to 50 and Annexure A are an integ~ I

Chattogram, 16 September 2019

12

Bangladesh Steel Re-Roll ing Mills Limited Separate statement of financial position

30 June 30 June Note 2019 2018

17.00 15,932,131,109 12,958,556,023 19.00 18,413,720 21 ,797,061 20.00 12,644,244,186 6,766,652,548 21.00 116,814,404 122,190,354

28,711,603,419 19,869,195,986

22.00 146,794,158 50,220,680 23.00 16,195,612,684 13,442,320,054 24.00 3,570,813,232 2,356,392,380 25.00 985,977,512 1,537,959,598 26.00 2,1 81 ,266,067 1,983,627,504 27.00 761 ,556,711 704,983,780

23,842,020,364 20,075,503,997 52,553,623,783 39,944,699,984

28.00 2,360,682,360 2,146,074,880 511 ,970,250 511 ,970,250

29.01 30,170,818 30,170,818 29.02 12,151 ,476,721 3,974,789,368

7,953,071 ,847 6,962, 7 42,081 45,661 ,142

23,007,371 ,996 13,671,408,539

30.00 3,871 ,516,258 5,442,343,709

31 .00 231 ,907,679 196,162,000 33.00 2,559,502,570 1,323,809,318

6,662,926,507 6,962,31 5,027

34.00 3,440,380,026 1,116,279,307 35.01 9,448,628,917 9,742,889,798 35.08 1,957,378,523 2,210,092,751 36.00 6,264,184,395 4,919,172,515 37 .00 550,450,921 290,873,624 38 .00 483,789,338 409,572,284 32 .00 306,310,048 303,624,779 39.00 93,997,289 115,677,749 40.00 338,205,823 202,793,610

22,883,325,280 19,310,976,417 29,546,251 ,787 26,273,291,444 52,553,623,783 39,944,699,984

ese separate financial statements.

cC Company Secretary

As per our annexed report of same date.

Auditor

16

SCHEDULE – III [valuation report]

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1.

Report on

Calculation of Purchase Consideration

And

Independent Valuation of Shares ot

Bangladesh Steel Re-Rolling Mills Limited &

BSRM Steel Mills Limited

(Cut-off date: 30 June, 2019)

ACNABINChartered Accountants

BDBL Bhaban (Level-13)12 Kaw r an B azar C o mmercial Ar e a

Dhaka-1215, Bangladesh.

Ref: 02.155120L9121A7

Telephone: (+s8-02) 410 2oo3o to 35

Facsimile: (+88-02) 470 20036

E - mail: <acnabit@b atgla. ne t>'Web: www.acnabin.com

The Board of DirectorsBangladesh Steel Re-Rolling Mills LimitedAIi Mansiont207 I 1099 Sadarghat Road

Chattogram

26 September, 2019

Dear Sir,

Report on "Calculation of Purchase Consideration and Independent Valuation ofShares" of Bangladesh Steel Re-Rolling Mills Limited (BSRM LTD) and BSRM Steel

Mills Limited (BSRM SML)

Reference: Appointment letter BSRM/zs17119, dated 17 September, 2019 and e-maildated

25 September, 2019.

We are pleased to submit this report for the purpose of merger of BSRM Steel Mills Limited

(BSRM SML) w1h and into Bangladesh Steel Re-Rolling Mills Limited (BSRM LTD) based on

the Independent Share Valuations of BSRM LTD and BSRM SML.

The report contains following 3 (Three) Sections-

1. Section: A

2. Section: B

3. Section: C

Calculation of Purchase Consideration

Independent Valuation of Shares of Bangladesh Steel Re-

Rolling Mills Limited as of 30 lune, 2019

IndepLndent Valuation of Shares of BSRM Steel Mills Limited

as of 30 lune, 2019

We would like to take the opportunity to express our thanks and deep appreciation to the

management of BSRM Group for the courtesies and cooperation extended to our

representatives in the successful accomplishment of our assignment.

Thank you.

Yours faithfully,

{il K.*Md. Mominul Karim, FCAPartner

Dhaka Extension officq T.K. Bhaban (Level-9), !3 KawratBazat clA,Dhaka'1'215' Tel: (+8$-92; 8189428 to 29

Branch officq Jahan Building No.7 (1st Floor, North side), 59 Agrabad commercial Area, chittagong-4100' Bangladesh'

Tel (+33-631; 2517352,Fax, 1+3g g31; 2517353,E-mail: <acnabin'ctg@acnabin-bd'com>"Web: www'acnabin'comG.o*:::,'#$,

.ACNABINChartered Accountants

TABLE OF CONTENTS

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Report Titles PageNumber

Section: A Calculation of Purchase Consideration..... 03-06

Section: BIndependent Valuation of Shares of Bangladesh Steel Re-Rollino Mills Limited......... a7-]6

Section: CIndependent Valuation of Shares of BSRM Steel MillsLimited.... t7-24

Page 2 of 24

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SECTION: A

For the purpose of merger ofBSRM steel Mills Limited with and into

Bangladesh steel Re-Rolling Mills Limited

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Page 3 of 24

ACNABINChartered Accowntants

1. Introduction

BSRM Group engaged ACNABIN Chartered Accountants to calculate the purchase

consideration for the purpose of merger of BSRM Steel Mills Limited (BSRM SML) with andinto Bangladesh Steel Re-Rolling Mills Limited (BSRM LTD) based on the Independent ShareValuations of BSRM LTD and BSRM SML as of 30 June, 2019 for the purpose mentioned in thefollowing section of this repoft.

2. Purpose of the tndependent Valuation Share

The purpose of this assignment reads as follows-

"The Board of Directors of both the Companies decided to merge BSRM Steel Mills Limited(the subsidiary Company) with Bangladesh Steel Re-Rolling Mills Limited (the holdingCompany)."

3. Cut-off date

The cut-off date for the purpose of the Catrculation of Purchase Consideration is 30 June, 2019.

4. Summary of Share Price and Exchange ratio;

The Independent Valuation of Shares of Bangladesh Steel Re-Rolling Mills Limited as of 30June, 2019 has been done and the fair value arrived at BDT 69.4500 per share.(Refer to "Section: B" of this Report).

The Independent Valuation of Shares of BSRM Steel Mills Limited as of 30 June, 2019 has

been done and the fair value arrived at BDT 34.7600 per share.(Refer to "Section: C" of this Report).

ParticularsBanghdesh Steel Re-

Rolling Milb Linited BSR"Irl Steel Milb Unfted(BSRr{ SML)t

hir value of Shares as on 3O June 2019 BrrT 69.4500 BDT 34.7600

Ratio LTD: BSR!'I 1: 0.5005

tbte: Figures haue been rounded-otrto four digib afrer ffie decimal point

The exchange ratio for each share of Bangladesh Steel Re-Rolling Mills Limited with the shares

of BSRM Steel Mills Limited has been arrived at 1:0.5005.

5. Purchase Considerations

The exchange ratio as determined above may be used for exchange of the shares of BSRM

Steel Mills Limited with that of Bangladesh Steel Re-Rolling Mills Limited. The list ofshareholders with their possible holding of shares in Bangladesh Steel Re-Rolling Mills Limited

in exchange of their shares in BSRM Steel Mills Limited with the agreed exchange ratio isshown in the following table-

G F,s::s:.,,llrv

Page 4.of 24


shares to be bsued by BSRM LTD to Erbting shareholders of BSRM sML

SharehoHers l6rre

BSRlil Steel Mills Lirfted(BSRIT{ SML)

Bangladesh Steel Re- RollingMilts Lintted (BSRIvl LTD)

EGtlng (Pre-rrerger)nunter of shares held bydifferent share holders as

of 30 June, 2019

Ittnter of new shares (Poslnnrger) to be'ssued by

BSRI{ LTD at E<change Rath[1: 0.5005I

(tb. of PaH-up Shares) (t$. of shares in BSRIII LTD)vlr. Alihussain Akberali FCA 2,54L,675 1,272,108vlr. Aameir Alihussain 9,339,400 4,674,370Mr. Zohair Taherali 7,032,097 3,519,565Mrs. Tehseen Zohair Taherali 1,477,300 739.389Mr. Abdul Qadir Zohair 33,340 t6,687Mrs. Sabeen Aameir 176,660 88,418Mrs. Bilkis Alihussain L0,645,728 5,328,t87BSRM Steels Limited 100,000,000 50/050,000Bangladesh Steel Re-Rolling Mills Umited L77,364,600 Not aDDlicable (Orvn Shares)H. Akberali & Co. Umited 44,264,600 22,t54,432Mr. Ali Asghar Badruddin 3,160,000 1,581,580Mr. Shabbir Badruddin Africawala 38,300,000 19,169,1503SRM FoundaUon 100,000 50,050

Iotal nuriler of shares 394,435,400 108.643.936NoE: Figures harc been rounded-offb Zero.

6. Post-merger Shareholdings in Bangladesh Steel Re-Rotling Mills Limited

The shareholders'holdings of shares in Bangladesh Steel Re-Rolling Mills Limited after themerger will stand as follows-

G bakertitty

Shareholders l€n:Pre-rErger nunter of

shareholdingsIthw shares to be issued

for nrrgerPost-nerger

shareholdings

[\b of shares olo Itb of shares olo l5 of shares o/o

vlr. Alihussain Akberali FCA 29,238,249 12.3901 1,272,108 t,l70l 30,510,357 8.8501vlr. Aameir Allhussain 22,720,t09 9.6201 4,674,370 4.300/r 27,394,479 7.95o/tvlr. Zohair Taherali 7,563.0L2 3,200/t 3,519,565 3.24o/ LL,082,577 3.2201rlrs. Tehseen Zohair Taherali 8,t82,750 3.4701 739,389 0.580/ 8,922,139 2.590/,vlr. Abdul Oadir Zohair 6,L22 0.0001 L6$87 0,020/ 22,809 0.0101vlrs. Sabeen Aameir 5,330,122 2.260/, 88,418 0.080/ 5,418,540 L,570/,

f4rs. Elkis Alihussain 2L,493,760 9.1001 5,329,197 4,900/, 26,821,947 7.7801BSRM Steels Limited 0.0001 50,0s0,000 46.070/, s0,0so000 14.52o/'H. Akberali & Co. Limited 31,786,839 L3.47o/' 22,154,432 20.390/, 53,941,277 15.6501Karnafully Engineerinq Works LU. 5,325,131 2.2601 0.0001 5,325,131 1.540/,

BSRM FoundaUon 0.0001 50,050 0,0501 50,0s0 0.0101Yr. Ali Asghar Badruddin 22,000,000 9,3201 1,581,590 1.4601 23,581,580 6.8401rlr. Shabbir Badruddin Africawala 0.0001 19,169,150 17.640/, 19,169,150 5.5601Sneral 82,422,142 34.9to1 0.0001 82,422.142 23.gtot

fotal lturter of Shares 236,068.236 100.o001 108,64it,936 1o0.0001 anL4-71)-1r) i IOO Onol

NETWORK N4EMBER

Page 5 of 24

ACNABINCbartered Accowntants

7. Disclaimer

The resulting shareholding situation within the group after the proposed merger activities mayrequire legal attention since the increase or decrease of shareholding of the companies in toeach other may affect the controlling of one in to another.

Under this engagement, ACNABIN, Chartered Accountanb is not responsible to form any legalexplanation or opinion to this connection. Our responsibility is to calculate the purchaseconsideration based on the valuation of shares of the two companies to be merged and post-merger shareholdings in BSRM LTD. As such, we suggest that legal advice from competentlegal expefts should be obtained by BSRM Group to avoid any possible regulatory complexity,

8. General

We would like to place on record our appreciation of the couftesy and cooperation extendedto us by the concerned officials of the companies in particular to carry out the assignment.

Thank you.

Yours faithfully,

fi /6,,,-Md, Mominul Karim, FCAPartner

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Page 6 of 24

ACNABINChartueil Accountants

SECTIONT B

Independent Valuation of.ghares of

Bangladesh steel Re-Rolling Mills Limited

G bakertittyNETWORK MEMBER

PageT'of 24


1. Introduction

Bangladesh Steel Re-Rolling Mills Limited engaged ACNABIN Chartered Accountants toconduct the independent valuation of its shares as of 30 June, 2019 for the purpose mentionedin the following section of this report.

The user of this repoft is expected to take in to consideration that the valuation of this natureis a subjective exercise and that it is unlikely to arrive at the same value by other Consultantsas it depends on different assumptions, methodology and conditions being considered.

2, Purpose of the Independent Valuation Share

The purpose of this assignment, as mentioned in BSRM appointment letter #BSRM/25t71t9,dated 17 September,20t9, reads as follows-

"The Board of Directors of both the Companies decided to merge BSRM Steel Mills Limited(the subsidiary Company) with Bangladesh Steel Re-Rolling Mills Limited."

3. Cut-off date

The cut-off date for the purpose of the independent valuation of shares of Bangladesh SteelRe-Rolling Mills Limited is 30 June, 2019.

4. About the Company

Bangladesh Steel Re-Rolling Mills Limited is a public company limited by shares is domiciledin Bangladesh. The Company was formed and incorporated with the Registrar of Joint StockCompanies and Firms in Bangladesh on 28 December 1960 vide the ceftificate C/186-No,L49U92 E.P. of 1960-1961 under Companies Act 1913 (since repealed and substituted by theCompanies Act 1994) as a private company limited by share. The company was convertedinto a public limited company on 03 November 2009 under the Companies Act 1994. TheCompany is listed with Dhaka Stock Exchange Limited (DSE) and Chittagong Stock ExchangeLimited (CSE) as a publicly quoted company. Trading of the shares of the company started intwo stock exchanges from 27 April 2015.

5. Business Set-up of the company

Bangladesh Steel Re-Rolling Mills Limited is the pioneer in steel making in the country and thebearer of the brand name of "BSRM". It has set up its Re-Rolling Mill and Steel MeltingWorkshop (SMW previously known as Meghna Engineering Works Limited) at L47lt4$ll49and 7B/79 Baizid Bostami Road, Nasirabad Industrial Area, Chattogram, Bangladeshrespectively and commenced commercial production from 1987 after first BMRE andcommercial operation of current production process has been started from 09 December 2015after BMRE and capacity enhancement. The principal place of business is located at AliMansion, 1207 I L099, Sadarg hat Road, Chattogram, Bangladesh.

The main activity of the company is to manufacture M.S. products by setting up rolling andre-rolling mills. M.S. billets are manufactured from scraps and sponge iron etc. at Steel MeltingWorks (SMW) and these billets are re-rolled in the next step at Re-Rolling Mills to manufacture

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Page 8 of 24

,ACNABINCh*rtered Accountat ts

M.S. products. The company also deals in sale of M.S. products like angle, channel, I Beam,H Beam and ingot etc.

5. Disclaimer

This repoft is produced on a strictly confidential basis and is intended for the sole use of themanagement and to their desire and is not to be published, used, circulated, quoted orotherwise referred to for any other purposes nor is this report to be filed with, reproduced,copied, disclosed or referred to in whole or in part in any document.

Except where we have agreed expressly in writing to the contrary, we will not accept anyliability or responsibility to any other pafi to whom our repot is shown or into whose handsit may come. Furthermore, we accept no duty or responsibility and deny any liability to thecompany in relation to this report, whether or not this repoft influences any of your decisions.

7. Scope of Work

The scope of work for the independent valuation of shares of the company considered to bethe related clause of the Public Issue Rules 2015, issued by Bangladesh Securities andExchange Commission (BSEC). According to clause 14 (D) of Annexure - E of the rules, priceof a share should be valued considering following four methods:

(i) Net Asset Value of Historical or Current Costs;(ii) Earning Based Value calculated on the basis of weighted average of net profit aftertax for immediate preceding five years or such shorter period during which the issuerwas in commercial operation;(iii) Projected Earnings for the next three accounting year with rationales of theprojection, if not in commercial operation; and(iv) Average Market price per share of similar stocks for the last one yearimmediately prior to the offer for common stock.

We found and considered Net Asset Value (NAV) and Earning Based Valuation (EBV) moreeffective to attain the purpose of the share valuation assignment.

8. Limitation to scope of work

Projected/Forecasted Earnings is not used for the valuation as the company is in commercialoperation since 1987. In addition, the following reasons for not considering theProjected/Forecasted Earnings can be listed-

- Forecasted Financial Information is uncertain and depending on several uncontrollableeconomic factors.

- One may perform the quantitative and qualitativeimpossible to foresee the unforeseeable.

- One cetn use as sophisticated technique as possible,accurate prediction.

forecasting methods but it is

but it will still may not give an

- Complex regression analysis and neural network methods are often used to determinea forecast, but none of them are precisely accurate

For the matters discussed above, conseruatively, we can avoid Projected/Forecasted Earningsto determine the share price of the company.

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Page 9 of 24

ACNABINCls art er e d Acc o untants

Additionally, the DSE General Index decreased 514 points or 9.4Ao/o since the beginning of20t9, according to trading on a contract for difference (CFD) that track this benchmark indexfrom Bangladesh. (Source: https://tradingeconomis.com/bangladeslt/stock-market)

DSEX, the key index of Dhaka Stock Exchange (DSE), failed to sustain the overallupward streak in recent time. Lapses in regulatory and enforcement matters have ledinvestors to continue their selling spree amid lack of confidence. As such the marketis falling. The downward trend as evident from DSE Index graph for last 1 (One) year asshown in the following graph-

The downward trend of the share price of the company also showing downward trend overlast 9 (Nine) months in the following graph-

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Page 10 of 24

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Also the forecasts for Bangladesh in medium-term expectations for the next four quarters andshort-term market predictions affecting it's economy is shown in the following data-

, Currency 8$.'18

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4s68.46

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4S15I Stgck f,da*fiet {pe6ct**l

Source: htrps: "'.tingeconomics.mm lhangladeslt/forecast

For the matters discussed above, conseruatively, we can avoid independent valuation ofshares as per Average Market price.

9. Our Work Approach and Valuation Methodology

WorkApproach

Our approach to the accomplishment of the assignment included:

a. Entrance meeting with key officials of the company to start the assignment,b. ACNABIN team was given reasonable understanding of the functionalities of the

company, its goals and achievements.c. Developed a work plan and work strategy on the basis of the understanding gained

from the discussion meeting.d. Mobilized resource persons and organized the team for' efficient conduct of the

assignment.e. Briefed ACNABIN team members so that all the members of the team can understand

as to what are their specific duties and responsibilities regarding the accomplishmentof said assignment.

f . The team started collecting all relevant data and work on those.9. The Engagement Paftner, Consultants, Engagement Manager and the team held in-

house discussion to select suitable methodology among the practiced valuationmethodologies across the business world.

h. Studied widely used international share valuation methods and selected suitablemethods for this assignment.

i. Prepared a draft report under direct guidance of the Engagement Partner and sharedwith the management.

j. Finalized the repoft incorporating necessary inputs came out during discussion ondraft.

Valuation Methodology

a. ACNABIN considered required methods to determine the value of the shares of thecompany considering the valuation purpose, operation of the company and otherrelevant surrounding situations or facts;

b. We found and considered historical information based valuation viz. Net Asset Value(NAV) method of valuation and Earning Based Valuation (EBV) method of valuationmore effective to attain the purpose of the valuation;

c. As each valuation method requires specific procedure to calculate the share value andno one share valuation method is definitive, the best way to determine overall value

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Page LL of 24

ACNABINCharlered Accountants

is to use a number of relevant methods and find out suitable weighted average valuefrom the outcome of different valuation methods;The calculation of valuation of shares is subject to a number of assumptions andjudgment;During the valuation work ACNABIN team used audited financial statements of thecompany. ACNABIN team collected, analyzed and processed financial data and othernon-financial information that were required to carry-out the assignment;ACNABIN estimated the value of the shares of the company by applying the methodswhich we deemed appropriate;Historical financial information were collected from Audited Financial Statement of thecompany and market information were collected from official website of Dhaka StockExchange and published repofl:/reviews by the Dhaka Stock Exchange Limited;The results of our valuation analysis is expressed as the Conclusion of Value.

10. Statement of Assumptions and Limiting Conditions

This independent valuation of shares of the company is subject to the following assumptionsand limiting conditions:

a. The information presented to the audited financial statements considered for thepurpose of the valuation assignment reflects the results of Bangladesh Steel Re-RollingMills Limited for the year 2014-15, 2015-16,20L6-t7,20t7-LB and 2018-19.

b. The information provided by the company has been accepted as correct without fuftherverification and we express no opinion on that information.

c. This valuation is valid only for the purpose specified in this report.d. This valuation assumes that Bangladesh Steel Re-Rolling Mills Limited will continue to

operate as a going concern, and that the character of its present business will remainintact.

e. The valuation contemplates facts and conditions existing in the valuation date.t. Events and conditions occurring after that date have not been considered, and we have

no obligations to update our report for such events and conditions.g. We have assumed the company is compliant with all applicable laws and regulations

prevailing in the country.h. We have assumed that no hazardous conditions or materials exist which could affect

the subject business. We are not qualified to establish the absence of such conditionsor materials, nor do we assume the responsibility for discovering the same.

i. The valuation analysis and conclusion of value presented in the report are for thepurpose of this engagement only.j. We are not required to give testimony in court, or be present during any hearings ordepositions, with reference to the company being valued, unless previous arrangementshave been made.

k. This report is valid only for the date specified herein.

d.

t.

g.

h.

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ACNABTNChartered Atcountants

11. Sources of Information

The following Audited Financial Statements were considered as source of the financialinformation for the share valuation assignment:

AccountingYear Accounting Period Auditor

Data usedfor ShareValuation

Source of tlata

2014 Januaryto December KPMG, Banoladesh 20t3-14 Audited FSs- 2014 & 20152015 Januarv b December Syful Shamsul Alam & CO. 20t4-15 Audited FSs- 20152016 January to June Svtul Shamsul Alam & CO. 2015-16 Audited FSs- 2016-17

2016-t7 July to June A. Qasem & Co. 20L6-t7 Audited FSs20t7-18 July to June KPMG, Banqladesh 20t7-18 Audited FSs

2018-19 Julv to June KPMG, Banqladesh 2018-19 Audited FSs

In addition, ACNABIN team collected market information from official website of Dhaka StockExchange and published report/reviews by the Dhaka Stock Exchange Limited

12. Share Valuation Methods Used

As indicated in the preceding paragraph, we had very meticulous study on the selection ofmethodology that might be applicable for the assignment under consideration. After carefulreview of different methods we have considered Net Asset Value (NAV) method and EarningBased Valuation (EBV) method of valuation. We believe that under the given circumstances,these two methods of share valuation would give effective result to attain the purpose of thevaluation of shares of Bangladesh Steel Re-Rolling Mills Limited.

13. Summary of Valuation

We have used the results obtained from two methods of share valuation mentioned aboveand assigned equal weights to each result and calculated our estimate of the business valueas the sum of these weighted values. The independent value per share of Bangladesh SteelRe-Rolling Mills Limited as at 30 June, 2019 may be considered as follows-

Valuation of Shares Anpunt i References

Net Asset Value per Share (NAV)

Eamhg Based Value (EBV) per Share

BW 97.46

BDT 41.44

Annexure A

Annexure B

Average Price Per Share BDT 69.45

We may consider BDT 59.45 per share value for Bangladesh Steel Re-Rolling Mills Limited asat the valuation cut-off date may be considered.

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Page 13 of 24


14. Concluding Remarks

We have arrived at the per share value for Bangladesh Steel Re-Rolling Mills Limited based ondata provided by the Management and have used our best professionaljudgments in reachingconclusion. This conclusion is subject to the Statement of Assumptions and Limiting Conditionspresented earlier in this report.

Based on the results of these valuation methods along with consideration of other relevantdata, we have estimated the value per share value of Bangladesh Steel Re-Rolling Mills Limitedat BDT 69.45 as at the valuation cut-off date.

Thank you.

Yours faithfully,

frr,,^Md. Mominul Karim, FCAPartner

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Annexure A

Share Valuation Method: Net Asset Value (NAV) Method

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Particulars Armunt (BDT)

Total Assets as on 30 June, 2019

Less: Total Liabfiths as on 30 June, 2019

Net Assets

TotalNumber of Sharcs Outstandlng as of 30 June, 2019


fuurce: Audted FhancblStatemen9 as of 30 Junq 2019,

52,553,623,783

(29,546,25L,787)

23,007,37L,996

236,068,236

BDT 97.46

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Page 15 of 24

@*s,x*Plx,

Annexure B

ShareValuaUon Method: Earning Based Valuation (EBV) Method

***Average Pfte Eamhg Ratb (P/E) for 6 Months at Dhaka Stock Exchange (DSD 6.1450

Earning Based Value (EBV) per Share BW 41.44

fuurce: Audted FhancblfiatemenB 2014, 2015 2016 (6 nonths Jan-Jun), 2016-tZ 2017-18 and 2018-19.

Note:*NPAT for 201+15 has been artucted frum Audted Fitancbl Statements for 2014 and 2015.

**NPAT for 2015'16 avtucted fion compmtire fgutes fiom the Audted Finncbtstatements for 201&17.***Average Prte Eamhg Ratb (PiO for 6 Months at Dhaka Stock Exchange (DSe

Month End(trm/dd/yyyy)

MarketPrice PIE

Ll3u20L9 77.20 6.56002127120L9 75.00 5.46003131/2019 72.t0 6.13004t30t20L9 67.00 5.69005130t20L9 70.70 5.01006t30t20t9 70,90 5.0200

AveraEe ?lEfor 5 mnths 6.1450

G bakertitty

YearNet ProfitAfurTax(NPAr)

Number ofShares

Outstanding as of?O frrne

Weight llYeightedAverage NPAT

EarningsPer Share

(EPS)

WeightedAverage EPS

201+15x 276,658,557 L77,36L,56L L7.420/o 48,189,960 1.5599 0.?7L7

2015-16** I,194,216t759 t95,097,717 t9.L60/o 228,817,007 6.1211 L,L728

2016-t7 756,5L5,074 L95,097,717 t9,L6o/o 144,95t,504 3.8776 0.7430

2017-18 2,778,779,562 2L4,607,499 2L.080/o 585,668,571 12.9482 2.7290

2018-19 1,860,634,923 236,068,236 23.t9o/o 43L,37L,725 7.8818 L.8273

Total''p18a32,719

LOOo/o 6.7438

NETWORK MEMBER

Page 16 of 24

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SECTION: C

Independent Valuation of $hares of

BSRM Steel Mills Limited

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Page L7 ot 24

ACNABINChartered A*ountants

1. Introdudion

BSRM Steel Mills Limited engaged ACNABIN Chartered Accountants to conduct theindependent valuation of its shares of the as of 30 June, 2019 in order to use the result forthe purpose to merge its subsidiary BSRM Steel Mills Limited vide letter BSRM/2517I19, dated17 September, 2019.

The user of this repoft is expected to take in to consideration that the valuation of this natureis a subjective exercise and that it is unlikely to arrive at the same value by other Consultantsas it depends on different assumptions, methodology and conditions being considered.

2. Purpose of the Independent Valuation Share

The purpose of this assignment, as mentioned in BSRM appointment letter #BSRM/25171L9,dated 17 September, 2019, reads as follows-

"The Board of Directors of both the Companies decided to merge BSRM Steel Mills Limited(the subsidiary Company) with Bangladesh Steel Re-Rolling Mills Limited."

3. Cut-off date

The cut-off date for the purpose of the independent valuation of shares of BSRM Steel MillsLimited is 30 June, 2019.

4. About the Company

BSRM Steel Mills Limited is an automatic steel melting plant produces high quality'MS Billet'for steel re-rolling mills. BSRM Steel Mills Limited is considered to be the world's largestinduction-furnace based melting plant. The company was incorporated on April 16, 2008 as aprivate limited company under Companies Act, 1994 and later, it was converted into a publiccompany limited by shares on November 72,2013.

5. Business Set-up of the company

The registered office of the company is located at BSRM corporate office, Ali Mansion,12071L099 Sadarghat Road, Chattogram 4100, Bangladesh.

The company has started its commercial production from June 16, 2016 and started supplyof billets to its sister concerns namely Bangladesh Steel Re-Rolling Mills Limited and BSRMSteels Limited which are involved in producing high grade MS rod, angle, channel etc. Installedcapacity of the project is 862,000 m, ton per annum considering 24 hours production per day.Its factory is location at Sonapahar, Mirsarai, Chattogram.

6. Disclaimer

This report is produced on a strictly confidential basis and is intended for the sole use of themanagement and to their desire and is not to be published, used, circulated, quoted orotherwise referred to for any other purposes nor is this report to be filed with, reproduced,copied, disclosed or referred to in whole or in part in any document.

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ACNABINC b ar"ter e d Ac cowntants

Except where we have agreed expressly in writing to the contrary, we will not accept anyliability or responsibility to any other pafi to whom our report is shown or into whose'handsit may come. Fufthermore, we accept no duty or responsinitity anO deny any liability to thecompany in relation to this report, whether or not this report influences any of your decisions.

7. Scope of Work

The scope of work for the independent valuation of shares of the company considered to bethe related clause of the Public Issue Rules 2015, issued by Bangiadesh Securities andExchange Commission (BSEC). According to clause 14 (D) of Annexure - E of the rules, priceof a share should be valued considering following four methods:

(i) Net Asset Value of Historical or Current Costs;(ii) Earning Based Value calculated on the basis of weighted average of net profit aftertax for immediate preceding five years or such shoftei period during which the issuerwas in commercial operation;(iii) Projected Earnings for the next three accounting year with rationales of theprojection, if not in commercial operation; and(iv) Average Market price per share of similar stocks for the last one yearimmediately prior to the offer for common stocks.

We found and considered Net Asset Value (NAV) and Earning Based Valuation (EBV) moreeffective to attain the purpose of the shaie valuation assignment.

8. Limitation to scope of work

Projected/Forecasted Earnings is not used for the valuation as the company is in commercialoperation since 2016. In addition, the following reasons for not considering theProjected/Forecasted Earnings can be listed-

- Forecasted Financial Information is unceftain and depending on several uncontrollableeconomic factors.

- One may perform the quantitative and qualitativeimpossible to foresee the unforeseeable,- One can use as sophisticated technique as possible,accurate prediction.

- Complex regression analysis and neural network methods are often used to determinea forecast, but none of them are precisely accurate,

For the matters discussed above, conseruatively, we can avoid Projected/Forecasted Earningsto determine the share price of the company.

BSRM Steel Mills Limited is a non-listed company and as such there is no published marketprice for the shares. The value of the ordinary shares *irin..J to nL .urirrii.J o.i.J r.otlrer'aVailable information using formulae, estimates and judgments. So conseryatively, wecan avoid independent valuation of shares of the company as per Average Market price.

forecasting methods but it is

but it will still may not give an

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Page 19 of 24

ACNABINChartered Accauntants

9. Our Work Approach and Valuation Methodology

WorkApproach

our approach to the accomplishment of the assignment incruded:

a' Entrance meeting with key officials of the company to start the assignment.b' ACNABIN team was given reasonable unoeritanding of the functionalities of thecompany, its goals and achievements.c' Developed a work plan and work strategy on the basis of the understanding gainedfrom the discussion meeting.

d' Mobilized resource persons and organized the team for efficient conduct of theassignment.e' Briefed ACNABIN team members so that all the members of the team can understand

as to what are their specific duties and responsibilities regarding the accomplishmentof said assignment.

t. The team started collecting all relevant data and work on those.9' The Engagement Partner, Consultants, rngagement Manager and the team held in-house discussion to select suitable metfroJology-among the practiced valuationmethodologies across the business world.h' Studied widely used international share valuation methods and selected suitablemethods for this assignment.i' Prepared a draft report under direbt guidance of the Engagement partner and sharedwith the management.j' Finalized the report incorporating necessary inputs came out during discussion ondraft.

Valuation Methodotogy

a' ACNABIN considered required methods to determine the value of the shares of thecompany considering the valuation purpose, operation of the .o*pany and otherrelevant surrounding situations or facis;

'

b' We found and considered historical information based valuation viz. Net Asset value(NAV) method of valuation and Earning Based Valuation (EBV) method of valuationmore effective to attain the purpose of [rre valuation;c' As each valuation method requires specific procedure to calculate the share value andno'one share valuation method is definitive, the beit way to determine overall valueis to use a number of relevant methods ana Rnd out suitable weighted average valuefrom the outcome of different valuation methods;d' The calculation of valuation of shares is sun:e& to a number of assumptions andjudgment;

e' During the valuation work ACNABIN team used audited financial statements of thecompany' ACNABIN team collected, analyzed and processed financial data and othernon-financial information that were required to carry-out the assignmeni;f' ACNABIN estimated the value of the shares of the iorprny by a[ptying ihe methodswhich we deemed appropriate;g' Historical financial information were collected from Audited Financial Statement of thecompany and market information were collected from official website of Dhaka Stock

. Exchange and published report/reviews by the Dhaka Stock Exchange Limited;h' The results of our valuation analysis is expressed as ine Conclusion of Value,

Page20 of 24

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a.

b.

c.d.

e.f.

g.

h.

i.

j.

10. Statement of Assumptions and Limiting Conditions

This independent valuation of shares of the company is subject to the following assumptionsand limiting conditions:

The information presented to the audited financial statements considered for thepurpose of the valuation assignment reflects the results of BSRM Steel Mills Limited forthe year 2014-15, 2015-16, 20L6-t7,20L7-Lg and 2018-19.The information provided by the company has been accepted as correct without furtherverification and we express no opinion on that information.This valuation is valid only for the purpose specified in this repoft.This valuation assumes that BSRM Steel Mills Limited will continue to operate as a goingconcern, and that the character of its present business will remain intact.The valuation contemplates facts and conditions existing in the valuation date.Events and conditions occurring after that date have not been considered, and we haveno obligations to update our report for such events and conditions.We have assumed the company is compliant with all applicable laws and regulationsprevailing in the country.We have assumed that no hazardous conditions or materials exist which could affectthe subject business. We are not qualified to establish the absence of such conditionsor materials, nor do we assume the responsibility for discovering the same.The valuation analysis and conclusion of value presented in the report are for thepurpose of this engagement only.We are not required to give testimony in court, or be present during any hearings ordepositions, with reference to the company being valued, unless previous arrangementshave been made.This report is valid only for the date specified herein.

11. Sources of Information

The following Audited Financial Statements were considered as source of the financialinformation for the share valuation assignment:

AccountingYear Accounting Perbd Auditor

Data usedfor ShareValuation

Source of Data

2014 lan b Dec A. Oasem & Co. 2013-14 \udited FSs- 2014 & 20152015 lan to Dec \. Qasem & Co. 2014-15 Audited FSs- 20152015 lan to Jun A, Oasem & Co. 2015-15 Audited FSs- 2015-17

20L6-17 Iulv to Jun Hussain Farhad & Co. 24rc-L7 Audited FSs

2AL7-L8 luly b Jun Hussain Farhad & Co. 20L7-L8 Audited FSs

2018-19 luly to Jun Hussain Farhad & Co. 2018-19 Audited FSs

In addition, ACNABIN team collected market information from official website of Dhaka StockExchange and published report/reviews by the Dhaka Stock Exchange Limited.

12. Share Valuation Methods Used

As indicated in the preceding paragraph, we had very meticulous study on the selection ofmethodology that might be applicable for the assignment under consideration. After carefulreview of different methods we have considered Net Asset Value (NAV) method and Earning

PageLl of 24

ACNABINCbartered Accountants

Based Valuation (EBV) method of valuation. We believe that under the given circumstances,these two methods of share valuation would give effective result to attaifi the purpose of thevaluation of shares of BSRM Steel Mills Limited.

13. Summaryof Valuation

We have used the results obtained from two methods of share valuation mentioned aboveand.assigned equal weights to each result and calculated our estimate of the business valueas the sum of these weighted values. The independent value per share of BSRM Steel MillsLimited as at 30 June, 2019 may be considered as follows-


Earnhg Based Value (EBV) per Share

BDT 34.57 Annexure A

BDT 34.96 Annexure B

Average Price Per Share BDT 34.76

We may consider BDT 34.76 per share value for BSRM Steel Mills Limited as at the valuationcut-off date may be considered.

14. Concluding Remarks

we have arrived at the per share value for BSRM steel Mills Limited based on data providedby the Management and have used our best professionaljudgments in reaching conclusion.This conclusion is subject to the Statement of hssumptions'ani Limiting Conditions presentedearlier in this report.

Based on the results of these valuation approach and methods along with consideration ofo![e11el_evant data, we have estimated the vatue per share value of BSRM Steel Mills Limitedat BDT 34.76 as at the valuation cut-off date.

Thank you.

Yours faithfully,

fr,u^Md. Mominul Karim, FCAPartner

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Page2?ot 24

ACNABINChartued Accountants

Annexure A

TotalAssets as on 30 June, 2019

Less: Total Lialbflt'es as on 30 June, 2019

Net AsseB

Total Number of Shares Outstandhg as of 30 June, 2019

NetAssetValue per Share (NAU

fiurce: Audted Finncbl Statemen9 as of 30 June, 2019.

45,635,093,531

(31,999,426,097)

t3,635,667,444

394,435,400

BDT 34,57

Share Val uation Method : Net Asset Va t ue (NAU Method

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Page 23 of 24

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ACNABINtbartereil Arcowntants

Annexure B

Share Valuation Method: Earning Based Valuation (EBU Method

*Average P/E for 6 months for peer companbs at ohaka stock ercrrange 13.05Earning Based Value (EBU per Share BDT 34.96

fuurce: Audted Fhanchl Statements 2017-lB and 20tg-19.

Note:

-The compny stafted b trbl productbn on 22 Decemfur, 2015.-The compny stafted ts commercblproductbn on 16 June, 2016.-The compny stafted B mahtahabb opemtbn at desied capacty from 20lz-lB.- As such tor the purpse of the afuve cabubtbns the NPAT consilercd for 2017-18 and 2018-19 only.

xAverage Prbe mhg Ratb (P/E) fo16 Months at Dhaka Stock Hchanqe (DSE

Company NameAverageP/E**t

SharesC)rfstandinn Weight Weighted P/E

BSRJvI Steeb Ll"nitedBanghdesh SteelRe-Rolhg Mih Ltd.GPH IspatRatanpur Steel Re-Rollhg (RSRM )Total

Prte

7,073,396,s7s 100.000/o

12.366,15

20.016.93

35.02o/o

21.99o/o

33.560/o

9.43o/o

4.331.356.710.6s

375,952,500236,068,237360,186,750101,189,088

Ll3Ll2019212U20193l3Ll20t9413012019sl30l20L96lL3l20t9

Average P/E

13.1312,5312.4

12.0711.88

5.566.466.135.696.01

20.4820.5419.2

19.8120.09

7.537.296.926.346.58

12.17 6.02 19.92 6.9112.36 6.1s 6.93

Year Net Profit AfterTax (NPAT)

Number ofShares

Outstanding asof 30 June

Weight WeightedAverage NPAT

EarningsPer Share

(EPS)

WeightedAverage EPS

2017-18 938.259.82s 394.435,400 50o/o 469.134.91s 2.3788 1,192018-19 1,175,311,103 394.435.400 50o/o 587.655.552 2.9797 L.49Total 788,870,800 10Oo/o 2.68

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fuurce: DSE Monthly Revbyrs

--The End--

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Book-Scheme-of-Amalgamation.pdf - BSRM

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