investment banking

Issuer Issue Manager Summit Alliance Port Limited. Alliance Financial Services Limited. This document should be read carefully. If you are in any doubt about its contents or the action to take, please consult your Stockbroker, Accountant, Banker, Solicitor or any other professional adviser for guidance immediately.

Investing in the Bond involves certain risks. Refer to “Risk Factors” commencing on pages 20 to 23 for a discussion of certain risk factors to be considered in connection with an investment in the Bond.

PROSPECTUS(Incorporated in The Republic of Bangladesh under the Companies Act of 1994)

15-Year 7% Fixed Rate Bond Due November 2028Of

SUMMIT ALLIANCE PORT LIMITED (SAPL)Opening date for subscription: November 10, 2013Closing date for subscription: November 14, 2013

For Non-Resident Bangladeshi Quota, subscription closes on: November 24, 2013

Manager to the IssueAlliance Financial Services Limited (AFSL)

UnderwritersIDLC Finance Limited

Lanka Bangla Finance LimitedTrust Bank Limited

Bankers to the IssueDhaka Bank Limited Dutch Bangla Bank LimitedHSBC National Bank LimitedStandard Bank Limited Trust Bank Limited

Credit Rating AgencyCredit Rating Information and Services Ltd. (CRISL)

Long Term: A; Short Term: ST-3.

Date of Prospectus: October 01, 2013

The issue shall be placed in “N” Category

“Bangladesh Securities and Exchange Commission has not in any way evaluated the merits of the securities distributed hereunder and any representation to the contrary is an offence.”

8 | P a g e Prospectus

Table of ContentsItems Page No.

Summary of Issue 10Corporate Directory 11 – 12 Acronyms 13Responsibility Statement 14Notice to Investors 15Declarations and Due Diligence Certificates 16 – 19 Statement of Rights 20Documents Incorporated By Reference 21

Viewing of Documents 22Procedures for Subscribing for the Bond 22

Term Sheet 23

General Information 24Disclaimer & Basic Information 24 – 25 Use of the IPO Proceed 25 – 26

Risk Factors & Management's Perception 27 – 30 Other Risk Factors 29 – 30

Company Description 31SAPL Strength 32SAPL Market Condition 33Parent, Holding/Subsidiary Companies of SAPL 34Competitive Condition of SAPL 35 – 36

Causes of Material Changes & Income Tax 37Off-Balance Sheet Items 38Material Information which is Likely to have Impact 39

Appendix: 40 – 44Statement of Financial Position of SAPL’12 40Income Statement of SAPL’12 41Cash Flow Statement of SAPL’12 42Application/Subscription Form 43


Issuer Issue Manager Summit Alliance Port Limited. Alliance Financial Services Limited.

SUMMARY OF THE ISSUE

Size of The Issue : 500,000 SAPL BondsThe Bond : SAPLTk.500,000,000 (five hundred million BDT) Secured Fixed

Rate Bond Tier-2.

Issuer : Summit Alliance Port Limited (SAPL)

Purpose : To finance expanded capacity and warehouse for smooth operations

Method of Issue : Public Auction

Price per Bond : BDT1000/=

Lot Size : 5

Min. Investment Amount : SAPLTk.5,000.00

Tenor : Fifteen (15) years

Interest Rate : Fixed at 7.00% per annum

Interest Payment Date : Semi-annually, March and September

Principal : Upon maturity

Prepayment : SAPL may repay the Outstanding Bonds prior to the maturity date without closing charges or other penalty subject to such prepayment being made on an interest payment date and SAPL giving to the - Bondholders a minimum written notice of sixty (60) days.

Opening Date : November 10, 2013

Closing Date : November 14, 2013

Credit Rating : Long Term: A; Short Term: ST-3.Credit Rating Agency : Credit Rating Information and Services Ltd. (CRISL).

Bond Rating : These bonds have not been rated.



SUMMIT ALLIANCE PORT LIMITED(A Public Company Limited by Shares)

Katghar, North Patenga, Chittagong- 4204

Availability of Prospectus: Prospectus of Summit Alliance Port Limited may be obtained from the Issuer Company, IssueManager, Underwriters and the Stock Exchange as follows:

Company Contact Person Telephone number Summit Alliance Port Limited Corporate office Mr. Md. Abdullah Osman Sajid (Sajid) 88-02-9130845Summit Centre Accounts Executive 01730-02505718 Kawran Bazar C/A Dhaka- 1215 Registered office & project Mr. Ratan Kumar Nath FCMA 031-800104-6 (PABX Line)Katghar, North Patenga Senior Manager 01714-094532 Chittagong- 4204 Manager to the Issue Alliance Financial Services Limited Mr. Muhammad Nazrul Islam, ACMA 88-02-9554756, 9556752 Rahman Chamber Manager 01914 -56603912-13 Motijheel C/A, Dhaka- 1000 Underwriters IDLC Finance Limited Bay’s Gallary,(1st Floor) Mr. Mahmudul Bari 88-02-8834990-9457 Gulshan Avenue, Gulshan – 1 DGM, Merchant Banking Division Dhaka-1212 Lankabangla Finance Limited 20 Kemal Ataturk Avenue Mr. Shakil Islam Bhuiyan 88-02-9883701-10Safura Tower (11th Floor), Banani Assistant Vice President Dhaka- 1213 Trust Bank Limited Peoples Insurance Bhaban Mr. Mohammad Saleh Ahmed 88-02-9570261, 957026336 Dilkusha C/A, Dhaka – 1000 Senior Executive officer 01713-193396 Stock Exchanges Dhaka Stock Exchange Limited DSE Library 88-02-9564601-79/F, Motijheel C/A, Dhaka-1000 Chittagong Stock Exchange Limited CSE Library (031)714632-3 CSE Building, 1080 Sheikh Mujib (031)720871-3Road, Agrabad, Chittagong-4100


Prospectus is also available on the websites www.secbd.org, www.saplbd.com. www.allfin.org, www.dsebd.org, www.csebd.com and Public Reference room of the Securities and Exchange Commission (SEC) for reading and study.


http://www.csebd.com/

http://www.dsebd.org/

http://www.allfin.org/


Corporate Directory

Registered officeKatghar, North Patenga

Chittagong- 4204

Tel: 031-800104-6 (PABX Line)Fax: 880-2-740667

Corporate officeSummit Centre

18, Kawran Bazar C/ADhaka- 1215

Tel: 880-2-9130845Fax: 880-2-9130853-54

www.saplbd.com

Project location:

Katghar, South PatengaChittagong- 4204

Auditors

Basu Banerjee Nath & CoTaher Chamber (Ground Floor)10 Agrabad Commercial Area

Chittagong- 4100Tel : 031-2512931

Fax : 880-031-721201

Manager to the Issue

Alliance Financial Services Limited.Rahman Chamber

12-13 Motijheel C/A, Dhaka- 1000Tel : 9567778,9561817

Fax: 880-2-9559895www.allfin.org



Acronyms

BAS Bangladesh Accounting Standard SAPL Summit Alliance Port LimitedCRISL Credit Rating Information and Services LimitedIPO Initial Public OfferingNRB Non-Residential BangladeshiICD Inland Container depotCFS Container Freight StationOCL Ocean Containers LimitedTEU Twenty Equivalent UnitsSEC Securities and Exchange CommissionCPA Chittagong Port AuthorityDSE Dhaka Stock Exchange LimitedCSE Chittagong Stock Exchange LimitedFC Foreign CurrencyFI Financial InstitutionRJSC Registrar of Joint Stock Companies & Firms



RESPONSIBILITY STATEMENT

This Prospectus has been seen and approved by the Directors of the Issuer and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that, after having made all reasonable enquiries, and to the best of their knowledge and belief, there are no false or misleading statements or other facts the omission of which would make any statement herein false or misleading.

No securities described in this Prospectus may be allotted or issued on the basis of this Prospectus where the time which has elapsed between the date of issue of the receipt for the Prospectus and the date of the offering exceeds 1 year and 20 days.


NOTICE TO INVESTORS This Prospectus should be read in conjunction with all the documents that are deemed to be incorporated herein by reference see “Documents Incorporated by Reference”. This Prospectus shall be read and construed on the basis that such documents are incorporated and form part of this Prospectus.

This Prospectus contains descriptions of certain provisions of the Trust Deed, material contracts and other related documents. This Prospectus does not purport to contain complete summaries of the terms of such documents, and all information herein about such documents is qualified in its entirety by reference to such documents.

The Issuer has taken all reasonable care to ensure that the facts stated in this Prospectus in relation to the Issuer and the Bond which are material in the context of the issuance and offering of the Bond are true and accurate in all material respects and not misleading in any material respect, and that there are no other facts in relation to the Issuer or the Bond the omission of which would, in the context of the issuance and offering of the Bond, make any statement in this Prospectus misleading in any material respect. The Issuer accepts responsibility accordingly.

No person is authorized to give any information or to make any representation not contained in this Prospectus and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of the Issuer or the Central Bank of SAPL Limited (the “Arranger”).

Distribution of this Prospectus to any person other than the prospective investors and those persons, if any, retained to advise such prospective investors with respect hereto is unauthorized, and any disclosure of any of the contents hereof without the prior written consent of the Issuer and the Arranger is prohibited.

This Prospectus does not constitute a recommendation by, an offer of, or an invitation by or on behalf of the Issuer or the arranger to subscribe for or to purchase any of the Bond. Each investor contemplating purchasing the Bond makes his own independent investigation of the financial condition and affairs, and his own appraisal of creditworthiness, of the Issuer. As noted above, it is expected that prospective investors interested in investing in the bond will conduct their own independent investigation of the risks posed thereby. Representatives of the Issuer will be available to answer any questions concerning the Issuer, the transaction documents, and the servicing thereof and will make available such other information as such prospective investors may reasonably request.

The Arranger has not independently verified the information contained in this Prospectus. Accordingly, no representation, warranty or undertaking, expressed or implied, is made and no responsibility is accepted by the Arranger as to the accuracy or completeness of the information contained in this Prospectus or any further information supplied in connection with the Bond. The Arranger accepts no liability in relation to the information contained in this Prospectus or the distribution hereof or with regard to any other information supplied by or on behalf of the Issuer.


Declarations and Due Diligence Certificates Declaration about the Responsibility of the Directors, including the CEO of the Company “Summit Alliance Port Limited” in Respect of the Prospectus

This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries that all conditions concerning this public issue and prospectus have been met and that there are no other information or documents the omission of which make any information or statements therein misleading for which the Commission may take any civil, criminal or administrative action against any or all of us as it may deem fit.

We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well-informed decision for investment.

Sd/Anjuman Aziz Khan Chairperson Sd/- Sd/- Syed Ali Jowher Rizvi Sobera Ahmed Rizvi Managing Director Director

Sd/- sd/- Mohammed Latif Khan Dr. Syed Ali Gowher Rizvi Director Director

Sd/- Sd/- Ayesha Aziz Khan Adeeba Aziz Khan Director Director

Sd/ Sd/- Faisal Karim Khan Syed Yasser Haider Rizvi Director Director

Sd/- Syed Nasser Haider Rizvi Director


Consent of the Directors to Serve We hereby agree that we have been serving as Director(s) of “Summit Alliance Port Limited" and continue to act as Director of the Company.

Sd/

Anjuman Aziz Khan Chairperson

Sd/- Sd/- Syed Ali Jowher Rizvi Sobera Ahmed Rizvi Managing Director Director

Sd/- Sd/- Mohammed Latif Khan Dr. Syed Ali Gowher Rizvi Director Director

Sd/- Sd/- Ayesha Aziz Khan Adeeba Aziz Khan Director Director

Sd/ Sd/- Faisal Karim Khan Syed Yasser Haider Rizvi Director Director

Sd/- Syed Nasser Haider Rizvi Director

Declaration about filling of Prospectus with the Registrar of Joint Stock Companies & Firms A dated and signed copy of the Prospectus has been filed for registration with the Registrar of Joint Stock Companies & Firms, Government of the Peoples’ Republic of Bangladesh, as required under Section 138(1) of the Companies Act, 1994, vide RJSC’s Receipt No: 0175800 dated: 01/07/2008.


Due Diligence Certificate of Manager to the Issue Subject: Public offer of 500,000 bonds of Tk.1000/= each of Summit Alliance Port Limited.We, the under-noted Manger to the Issue to the above mentioned forthcoming issue, state as follows: 1. We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other materials as relevant for adequate disclosures to the investors, and 2. On the basis of such examination and the discussions with the issuer company, it’s directors and officers, and other agencies; independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.

WE CONFIRM THAT:

(a) The draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers relevant to the issue;(b) All the legal requirements connected with the said issue have been duly complied with; and (c) The disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well informed decision for investment in the proposed issue.

For Manager to the Issue

Sd/ Tapan K PodderManaging DirectorAlliance Financial Services LimitedAugust 21, 2013


Due Diligence Certificate of the Underwriter(s)

Subject: Public offer of 500,000 bonds of Tk.1000/= each of Summit Alliance Port Limited.We, the under-noted Underwriter(s) to the above mentioned forthcoming issue, state individually and collectively as follows:

1. We, while underwriting the above mentioned issue on a firm commitment basis, have examined the draft prospectus, other documents and materials as relevant to our underwriting decision, and

2. On the basis of such examination and the discussions with the issuer company, it’s directors and officers, and other agencies; independent verification of the statements concerning objects of the issue and the contents of the documents and other materials furnished by the issuer company.

WE CONFIRM THAT: a. All information as is relevant to our underwriting decision has been received by us and the draft prospectus forwarded to the Commission has been approved by us.

b. We shall subscribe and take up the un-subscribed securities against the above mentioned public issue within 15 (fifteen) days of calling up thereof by the issuer; and

c. This underwriting commitment is unequivocal and irrevocable.

For Underwriters:

Sd/- Sd/- Sd/- CEO & Managing Director Managing Director Managing DirectorIDLC Finance Ltd. Lanka Bangla Finance Ltd. Trust Bank Ltd.


SAPLTk.500 MILLION 7% FIXED RATE BOND DUE 2028 STATEMENT OF RIGHTS

The Proposed Securities Act, 2009, provides purchasers with the right to withdraw from an agreement to purchase securities. Although this is not provided for in existing legislation, SAPL has agreed to provide investors in the issue with the right to withdraw from an agreement to purchase securities.

This right may be exercised within two business days after receipt of a Prospectus and any amendment. The proposed securities legislation further provides a purchaser with remedies for rescission and damages if the Prospectus or any amendment contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation. The purchaser should refer to the Proposed Securities Act, 2009, for the particulars of these rights or consult with a legal adviser.”


DOCUMENTS INCORPORATED BY REFERENCE

The following documents shall be deemed to be incorporated in, and to form part of thisProspectus: (i) All amendments and supplements to this Prospectus prepared from time to time; (ii) Audited financial statements of Summit Alliance Port Limited (the “Issuer”) for the years ended December 31, 2011 – 2012.

(iii) Unaudited abridged financial statements for the six month period ended June 30, 2013. Except that any statement contained herein or in such documents referred to in paragraphs (i) to (iii) Above shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained in a document subsequently incorporated by reference in this Prospectus modifies or supersedes such statement.

Reference to “This Prospectus” shall be taken to mean this document and all the documents from time to time incorporated herein and forming a part hereof. Investors should review the following Security documents, along with the Prospectus in making their investment decision: the Trust Deed and the Paying Agency Agreement.


VIEWING OF DOCUMENTS

The foregoing documents will be available for inspection during usual business hours on any weekday (with the exception of weekends and public holidays) for a period of seven days, prior to the closing date (November 14, 2013) at the office of the Registrar and Paying Agent. Copies of the Prospectus and all documents deemed incorporated by reference herein (other than exhibits to such documents unless such exhibits are specifically incorporated by reference in such documents) can be viewed by each prospective investor who receives a copy of this Prospectus upon receipt from the Trustee, Registrar and Paying Agent or Issuer during the normal business hours at the addresses set forth on pages 35 and 36 of the Prospectus.

PROCEDURES FOR SUBSCRIBING FOR THE BOND Applications will be received at the Domestic Markets Department, Bangladesh Bank, Central Bank Building, Motijheel. Applications must be for Tk.5,000.00 face value or multiples thereof. No allotment will be made for any amount less than Tk.5,000.00 face value. Government Securities Intermediaries (Refer to pages 35 and 36) appointed by the Central Bank will act as counterparties to the Central Bank in the auction and will thereafter provide a market for the bond. The public can bid competitively or non-competitively by submitting the relevant application forms (Refer to Page 38) along with payment to a Government Securities Intermediary. The minimum allotment that can be obtained through a non-competitive bid is Tk.1,000.00 face value and the maximum is Tk.100,000.00.

Registration of bondholders will be made by book entry at the Bangladesh Bank of SAPL in the name of each subscriber.

The Prospectus is available at the Bangladesh Bank Website The Trust Deed and Application Forms may be obtained at the offices of all Government Securities Intermediaries, as designated by the Central Bank of Bangladesh.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION The financial statements of Summit Alliance Port Limited for the years ended December 31, 2012, 2011 and 2010 have been audited by CA Firm Rahman Rahman Huq. All financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and comply with all regulations and accounting rules in Bangladesh.


TERM SHEET The following information summary should be read in conjunction with, and is qualified in its entirety by, the detailed information elsewhere in the Prospectus. Prospective investors in this Secured Fixed Rate Bond should see “Risk Factors” for a discussion of certain factors that should be considered in connection with an investment in the Bond.

1. Issuer : Summit Alliance Port Limited (SAPL) 2. Issue Price : Determined via auction with par = Tk.1000.00 face value

3. Issue Date : November 10, 2013

4. Maturity Date : November 14, 2028

5. Amount : SAPLTk.500,000,000.00

6. Purpose : To fund capacity expansion of operations

7. Tenor : Fifteen (15) years from closing date

8. Coupon : Fixed at 7.00% per annum

9. Basis : Based upon an actual day count and a three hundred and sixty five (365) day year.

10. Interest Payment : Semi-annually in arrears

11. Method of Payment : Interest in respect of the bond is payable semi-annually in arrears on March 29 and September 29, commencing March 29, 2014. Payment will be made in Bangladeshi Taka.

12. Principal Payment : Upon maturity

13. Trustee : Alliance Financial Services Ltd.

14. Registrar & Paying Agent: Bangladesh Bank

15. Governing Laws : The laws of the Republic of Bangladesh

16. Principal prepayment: SAPL may repay the outstanding Bonds prior to the maturity

17. Redemption price : 100% date without closing charges or other penalty subject to such prepayment being made on an interest payment date and SAPL giving to the Bondholders a minimum written notice of sixty (60) days.

18. Business Day In the event that a payment date occurs on a day other than a Business Day, such payment will be made on the Business Day following that date.


GENERAL INFORMATION

Alliance Financial Services Limited has prepared the Prospectus from information supplied by Summit Alliance Port Limited (the Issuer Company) and also after several discussions with the Chairman, Managing Director, Directors and concerned executives of the Bank. The Directors of both Summit Alliance Port Limited and Alliance Financial Services Limited collectively and individually, having made all reasonable inquiries, confirm that to the best of their knowledge and belief, the information contained herein is true and correct in all material aspects and that there are no other material facts, the omission of which, would make any statement herein misleading. No person is authorized to give any information or to make any representation not contained in this Prospectus and if given or made, any such information and representation must not be relied upon as having been authorized by the Bank or Alliance Financial Services Limited. The Issue as contemplated in this Prospectus is made in Bangladesh and is subject to the exclusive jurisdiction of the Courts of Bangladesh. Forwarding this Prospectus to any person Resident outside Bangladesh in no way implies that the Issue is made in accordance with the laws of that country or is subject to the jurisdiction of the laws of that country. A copy of this Prospectus can be obtained from the Corporate Head Office of Summit Alliance Port Limited, Alliance Financial Services Limited, the Underwriters and the Stock Exchanges where the securities will be traded.

Disclaimer: The contents of this presentation are entirely based on disclosures made by the company. Therefore, DSE and CSE do not assume any responsibility on the authenticity of the facts and figures presented thereof.

(If there is any contrary information please communicate with DSE through e-mail: [email protected])

Brief Overview of the SAPL

1. Date of Incorporation: December 06, 2003 and converted to a Public on March 06, 20082. Commencement of Business: December 23, 20033. Authorized Capital: Tk. 2,000 million.4. Paid up Capital: Tk.1,208.645 million (on ‘Ordinary + Bonus’)5. Company Purpose: The principal activity of the company is to provide off-dock services as inland Container Depot(ICD) with facilities for Empty Container Storage and Container Freight Station (CFT) for handling both import and export cargo. SAPORTL has 25 acres of freehold land and capacity for storage of empty container up to 4000 TUES. The two subsidiaries of the company are Ocean Containers Limited and Cemcor Limited.6. Financial Year End: December7. Auditor: Basu Banerjee Nath & Co.8. Joint Sponsor Companies: Summit Group and Alliance Group.9. Sister Concerns: (a) Ocean Containers Limited

(b) Cemcor Limited


Details of the Issue

Description No. of Units Offer Value In Taka AmountTk.Pre-IPO Placement 2,50,000 1000 250,000,000Public Offering 2,50,000 1000 250,000,000Total Value of Bond after IPO 5,00,000 1000 500,000,000

Basic Information of the Issue: SlNo.

Category Description

1 Name of the Co. Summit Alliance Port Limited (SAPL)2 Size of the Issue Tk. 500 m (Tk. 250 m private placement &

Tk.250m IPO)3 Unit Price Tk. 10004 Market Lot 55 Credit Rating SAPL has been rated as A by Credit Rating

Information and Services Limited (CRISL)9 Trustee Alliance Financial Services Limited (AFSL)10 Manager to the Issue Alliance Financial Services Limited (AFSL)

USE OF PROCEEDS

Summit Alliance Port Limited (SAPL) proposes to raise BDT.500,000,000.00 through the issue of 15-year bond with a 7% fixed coupon rate. The Bond will be issued in one tranche (place a set of securities into a particular class or tranche for offer in one financial transaction) on November 18, 2013 pursuant to a Trust Deed between SAPL and Alliance Finance Service Ltd.

The Bonds are eligible for inclusion in the Statutory Fund of Insurance Companies and will be considered as assets in and originating in Bangladesh within the meaning of the Insurance Act.

The table below indicates the proposed use of the proceeds from the Bond Issue.

Table1: Use of Proceeds from Public Offering

DETAILS BDTFunding for Expansion of Capacity 399,912,103Debt repayment and other operating expenses 99,762,897Bond issue costs 325,000Total 500,000,000

The net proceeds of the bond is approximately SAPLTk.499,675,000


Use of IPO Proceeds and Implementation Target

The proceeds of proposed offering along with the recent raising of capital from the sponsors aggregating Tk.500 million shall be utilized for meeting the company’s expansion program during FY 2013 - 2015 as under: Particulars Amount (Tk.) Implementation

Target

A. Land and Land Development

Land 375 Gonda @ Tk.500,000 per gonda-West 399,912,103 End Mach ‘14

B. Warehouse:

RCC Import Yard 15,000 sft civil construction-East 99,762,897 December ‘14

C. Miscellaneous Expenses: 3, 25,000

D. Total Capital Expenditure (A+B): 500,000,000

Sd/ Sd/

(Syed Ali Jowher Rizvi) (Syed Fazlul Haque)Managing Director Director (Fin. & HR)


Risk factors & Management's perception about the risks

Investment in stocks involves a high degree of risk. Investors should carefully consider all the risks and uncertainties associated to the company along with all the information provided in this prospectus before taking decision to invest in bonds of SAPL.

RISK FACTORS OF THE ISSUER

SAPL’s activities are primarily related to the provision of Port and Container Services at the Sea Port of Chittagong. Although the Organization’s activities expose it to more or less financial risks, those activities involve analysis, evaluation, acceptance and management of some degree of risk or combination of risks.

Taking risk is core to the business, and the operational risks are an inevitable consequence of being in business. SAPL’s aim is therefore to achieve an appropriate balance between risk and return and minimize potential adverse effects on its financial performance.

SAPL is exposed to the following risks: Market risk Interest rate risk Credit and default risk Liquidity risk; and Prepayment risk.

Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices. Market risk comprises of interest rate risk, currency risk and other price risk. SAPL has no significant concentration of currency risk and other price risk. Notwithstanding, the very nature of the assets funded under the portfolio makes for exposure to risks associated with the economic standing of SAPL, particularly as it relates to real estate values and sales. Market risk is mitigated by:

Strict credit criteria that preserve the margin of the amount funded versus the cost/value on any property based on its location and marketability.

Prudential criteria that would ensure that the ability to repay debt is reasonably assured by the customers’ financial circumstances and credit rating.

Avoidance of geographic, income, or sectoral concentrations. Regular review and assessment of market factors that may affect the quality of the Asset

portfolio


Interest rate risk SAPL is exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates. This exposure while concentrated in its financial liabilities is also applicable in the movement of market interest rates on its existing security.

Interest rate risk is supported by the strength of the asset portfolio in the event of the need for market funding to allow for new business. The company’s shareholders have also provided support in respect of direct and indirect funding mechanism in an effort to reduce borrowing costs.

Credit risk Credit risk is the risk that a counterparty will cause a financial loss for the company either by its unwillingness to perform on an obligation or if its ability to perform such an obligation is impaired. SAPL manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and by monitoring exposures in relation to such limits.

SAPL has developed a credit risk strategy that establishes the objectives guiding the organization’s credit-granting activities and has adopted the necessary policies and procedures for conducting such activities having determined the acceptable risk/reward trade-off for its activities, factoring in the cost of capital. The credit risk strategy, as well as significant credit risk policies are approved and periodically reviewed by the Board of Directors. Liquidity riskLiquidity risk is financial risk due to uncertain liquidity. It is the risk that the SAPL is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The Company may experience reduced liquidity if there is a large and unexpected cash outflow. The consequence may be the failure to meet obligations to repay debt and fulfill commitments to lend.

SAPL has retained close relationship with its shareholders exploring avenues for funding in fulfilling its mandate under the Government’s Programme.

Prepayment risk SAPL is not exposed to risks associated with early repayment like mortgages as it is not a financing company. Mortgagors generally have the option to prepay their loans before maturity without penalty.


Other Risk Factors: Risk factors & Management's perception about the risks

Investment in stocks involves a high degree of risk. Investors should carefully consider all the risks and uncertainties associated to the company along with all the information provided in this prospectus before taking decision to invest in shares of SAPL.

Competition may increase Off-dock services in the private sector can be operated only by the license holders provided by the Government of Bangladesh. Competition will increase in case Government issues licenses to many new operators. Management Perception Sponsors of SAPL started Off-dock business long 13 years back through its first concern Ocean Containers Limited (OCL) and has established itself as highly experienced operator in the country. Considering long relationships with the major shipping lines/agents and freight forwarding/logistic companies operating in the country and the fast growing volume of container movements (growing at double digit for the last ten years) through Chittagong Port it is expected that the company will be able to grow as well as retain its position whatever the competition arises.

Full dependency on Chittagong Port Business of SAPL depends solely on operation of the Chittagong Port. Any disruption in operation of Chittagong Port will directly affect the business of the company. Management Perception Almost 90% of the trading of the country is operated through the Chittagong Port and the same situation will continue in future. The group being one of the largest and highly experienced operators shall always enjoy monopolistic role in this sector. Furthermore Bangladesh being highly import based country shall continue to be dependent on international trade despite any temporary disruption in its operation.

Market and technology-related risks In the global market of 21st century, developed technology, products and services obsoletes the old service and product strategy. So the existing organization may be unable to cope up with the future needs and demands.

Management Perception The management of SAPL is very much aware about this issue. They have already developed a highly qualified technical team with modern technology system and have developed one of the finest software for its operations. Management is always committed to secure best available technology in its operation.

Potential change in government regulations Government regulations always have a direct impact on organizations productivity and profitability. Imposition of restriction on unstuffing and delivery of certain products by the government at any time will affect company’s profitability.


Management Perception The Company’s operation is governed by the changes in regulation that occur from time to time by Chittagong Port Authority (CPA) and Customs House of Chittagong (NBR). Restriction on any rules regarding unstuffing and stuffing shall not affect a particular company but the whole Off-Dock service industry by and large. Potential changes in global trading regulations Any kind of restrictions by the export agencies/countries to use the Chittagong Port has the adverse impact on the overall business of the company.

Management Perception General restriction is not usual and can be treated as a national crisis. These situation demands top priority of any Government to resolve.

Political unrest will affect the operation of the port Any unrest in the Chittagong port operation and/or transportation within the country will affect revenue of the company.

Management Perception Considering the country's high dependency on the international trade vis a vis the Chittagong Port this kind of situation for long period is very much unusual.

Natural disaster may disrupt the normal operation The project being close to Bay of Bengal and possibility to be affected by sea driven natural disaster like High- tide, Tsunami, etc. are very high. Management Perception The project is located inside the protection embankment constructed by the Bangladesh water development board and hence the risk of the project being affected by high- tide/ tsunami is comparatively lower. However in order to cover losses from associated risks the company has taken insurance policy for all its movable assets.


Description of business Company at a Glance Summit Alliance Port Limited (SAPL) is one of the valuable additions to the ever expanding industry of the off-docks in the country. The company established by the Summit group in collaboration with Alliance group. SAPL is custom built to provide both ICD (Inland Container Depot) and CFS (Container Freight Station) services, offers a bonded area spread over 14.5269 acres of land, 6.5 kms away from the multi-purpose berths of the Chittagong Port. After establishing the first company Ocean Containers Limited (OCL) in a leading position and gaining reasonable management expertise, SAPL is ventured in 2003 as a private limited company which was subsequently converted as public limited company on 6 March 2008.

Company HistoryAn initiative of Summit Group and Alliance Holdings Limited, Summit Alliance Port Limited (SAPL) was initially incorporated as a private company under the Companies Act, 1994 on December 06, 2003 and converted to a Public Company on March 06, 2008. The Company’s Registered office is at Katghar, South Patenga, Chittagong – 4000 and Corporate Office at Summit Centre, 18 Kawran Bazaar C/A, Dhaka – 1215. With the permission of Bangladesh Securities & Exchange Commission (SEC) vide its letter SEC/CI/IPO-101/08/343 dated July 01, 2008 the Company offered its shares to the Public and after completing all the required formalities, the shares of the Company commenced its trading through both the bourses of the Country effective from October 16, 2008.

SAPL commenced its commercial operation from 20th February 2007 as an Off-Dock service provider, utilizing over 30.0 acres of Customs Bonded Area. Located only 6.5 km away from the multipurpose and container vessel berths of Chittagong Port, SAPL has an ideal geographical advantage to carry out its principal activities of providing Off-Dock services as Inland Container Depot with facility for Empty Container Storage and Container Freight Station having previsions for handling both Import and Export Cargo. Annual report SAPL’s 30 acre area is divided into two zones – Inland Container Depot (ICD) zone which comprises of 17.3 acres land for storing empty dry and empty reefer containers. The Container Freight Station (CFS) area is 10.70 acres with 4 prefabricated warehouses for storing export cargo measuring 2,45,000 sft, including 3,260 sft for specialized Garments on Hanger (GOH) Room . In addition to that, there is an import cargo and a yard cargo warehouses of 19,500 sft and 8,200 sft respectively. All the warehouses are used for storing cargo of different logistic companies and are specially built to handle sensitive cargo during all weather conditions. An additional 2 acres of land have been used for other facilities such as workshop and office building of 2,820 sft for back Office, CFS and Customs officials and ICD building of 450 sft.


SAPL Strength

In order to always remain ahead of the industry, SAPL has many competitive advantages that attributes for the company’s strong success since inception.

Our goodwill in the market has helped us gather many reputed clients in the industry on long term agreements.

Our sponsors having diverse portfolios makes them well experienced especially in foreseeing the future and taking steps accordingly.

Our continuous strive to enrich our services to our clients yield in returns.

Our constant reinvestment in equipment and land development is to always enable and to provide the best service in the industry.

Nature of Business

The principal activity of the Company is to provide Off-Dock services with Inland Container Depot (ICD) and Container freight station (CFS) having facilities for handling of both import and export cargo. Principal Products and Services

Class of Services Types of Services/ Revenues

1. Storage of empty containers (ICD) (i) Ground rent (ii)Transportation (iii)Lift on/off (iv)Documentation

2. Un-stuffing of import cargo (CFS-Import) (i) Cargo handling (ii) Transportation (iii) Container ground rent (iv) Lift on/off (v) Survey (vi) With/without Movement charges 3. Stuffing of Warehouse and Open Yard cargo (i) Stuffing charge (CFS-Export) (ii) Labor service (iii) Ship landing (Stand by labor service) (iv) Shut out

4. General Services (i) Transportation service (Prime mover & Trailer rent)


Essentials of the aforesaid services provided by the company may be elaborated as under: Market for the SAPL Services Main Line Operators (MLO), Shipping Agencies, Freight Forwarders, C&F Agents, Importers and Exporters are the customers of SAPL

Relative contribution to Sales and Income (As per audited accounts of FY 2011) Services Revenue % to total

revenue Storage of empty containers (ICD) 74,090,482 33.25Un stuffing of import cargo (CFS-Import) 110,323,824 49.51 Stuffing of Warehouse and Open Yard cargo (CFS-Export)

35,252,890 15.82

General Service 3,175,019 1.42Total 222,842,215 100.00

Business Plan & Marketing Strategy A business plan is undoubtedly the most important document of any corporate entity. Business plan of SAPL is considered the guide for the company to uphold its day to day operations duly supported by financial and sales projections which forms the blue print for the company’s venture into the business fraternity. The business plan thus incorporates:

a. Managementb. Financec. Marketing

Internal Control SystemInternal control systems are in force in following areas 1. Payments2. Receipts3. Procurement and others

Management Information System (MIS)

Operational Activity

At present any type of container movement is recorded and maintained by the software. This is for both empty containers and laden containers going in and coming out of the depot. Along with container movement, all types of cargo which is entering in our premises are also kept in our records through the software. Through this it is easy to print all official documents through a print option from the software, such as: Terminal receipt (TR), Equipment Interchange Receipt (EIR), Landing and Labor money receipt, Prattayan Patra etc.


Associate, Subsidiary/Related Holdings Company and Core Areas of Business

The company established jointly by the Summit Group and Alliance Group. The sponsors of SAPL have significant control on the following associated companies:

Summit Group Company name Core business area Summit Power Limited Power GenerationUnited Summit Costal Oil Limited Supply of Fuel OilSummit Industrial & Mercantile Corporation Pvt. Ltd. Investment & power GenerationCosmopolitan Traders Pvt. Ltd. TradingSummit Shipping Ltd. TradingMarble Di Currara Pvt. Ltd. Marble Products Trading Khulna Power Co. Ltd. Power GenerationOcean Containers Ltd. Off-dock services

Alliance Group Company name Core Business areaAlliance Holdings Ltd. InvestmentGlobal Beverage Company Ltd. Carbonated Soft drinksOcean Containers Ltd. Off-dock servicesAlliance Knit Composite Limited Knit Garments ExportAlliance Media Limited Media & AdvertisementAlliance Properties Limited Real Estate DeveloperEjab Alliance Limited Cattle/Bull)PEB Steel Alliance Limited Fabrication of SteelUnion Accessories Limited Narrow Fabric WeavingUnion Knitting & Dyeing Limited Knit Garment Export SAPL does not have any Subsidiary/related Holding company. Distribution of Product/Services Main customers of the company include Main Line Operators (MLO), Shipping Agencies, Freight Forwarders, C&F Agents Importers and Exporters. The company provides its services from its depots located in Chittagong. Marketing activities are provided from both the Chittagong Registered office and Dhaka Corporate office.


Competitive Condition of the Business

The following twelve companies are operating in the off-dock industry:

Sl.No.

Name of Private Depot Location

01 Sea Farers Ltd. North Patenga02 Ocean Containers Ltd. Katghar, Patenga03 Summit Alliance Port Ltd. Katghar, Patenga04 Fisco Bangladesh Ltd. North Patenga05 QNS Container Services Ltd. CEPZ06 Iqbal Enterprise(Depot) Ltd. Kalurghat07 Shafi Motors Ltd. Sagorika Road08 K & T Logistics Ltd. Chittagong EPZ09 Esack Brothers Ind’s Ltd. Port Market10 Shah Majidia Rahmani Container Terminal Patenga11 Port Link Bhatiary12 Chittagong Container Transportation Company Ltd. Port Market

Sources and Availability of Raw Materials and Principal Suppliers

Off-dock is a service based on infrastructure and hence no need for any raw material. Material Patents, Trademarks, Licenses or Royalty Agreements

The company has taken following licenses to provide off- dock services

Licenses Issuing Authority Import Registration Import & Exports Authority, ChittagongBonded Ware House License (East & West) Customs House, Chittagong

In addition general licenses like Trade License, Clearance from Environment, Fire License etc. has taken by the company as usual requirement.

Number of Employees: (As on 31 December, 2012)

Full-time of employees 175Temporary employees 100Total Employees 275


Description of Property A) The Company owns the following fixed assets at written down value as on December 31, 2012(As per audited accounts)-

Name of the AssetsWritten Down ValueAs on 31st December 2012

Land and Land Development 523,046,665Building and Prefabricated Steel 19,025,657Plant and Equipment 33,718,082Furniture and Fixtures 344,964Vehicle 10,891,851Office Equipment 638,654 Total 587,665,873

B) All the above-mentioned assets are situated at Company’s project site and office premises and are in good operating condition. C) The company does not have plant & machinery as its operation is based on Land, Structure & Handling Equipment. Plan of Operation and Discussion on Financial Condition Internal and external sources of fund (As per audited accounts)

Internal sources 31 December, 2012(Amount in Taka)

Share capital 1,329,509,500Capital reserve 97,313,337Tax- Holiday reserve 55,138,861 Proposed dividend 114,990,893Retained earnings 549,932,290Sub-total 2,146,884,881External Sources Bank Loan (Net of current maturity) 657,187,530Sub-total 657,187,530Total 2,804,072,411

Bank Loan was taken from HSBC, Dhaka Branch against two Term Loan agreements. The tenure of the loan was 3 Years payable in 36 equal monthly installments effective from April 2014. The loan bears interest @ 2.10% p.a. bellow the bank’s lending rate. First agreement amounting Tk. 150 million already been fully amortized in March 2012 and the other will expire after March 2014.


Causes for Material Changes

Seasonal aspect of the company’s business With the increase/ decrease in imports and exports through Chittagong Port, the business of the company also changes.

Known trends, events or uncertainties Country's international trade has been growing very fast. Political unrest, flood and natural calamities are the known events that may affect the business operations of the company. Changes in the assets of the company used to pay off any liabilities No asset of the company has been disposed off to pay liabilities of the company. Loan taken from Holdings/Parent Company or Subsidiary Company The Company has no Holdings/ Parent company or subsidiary company and hence there is no question of taking loan. Loan given to Holdings/parent Company or Subsidiary CompanyThe Company has no Holdings/ Parent company or subsidiary company and has not given any loan from such party.

Income Tax

The company commenced its operation on 20 February 2012 and applied for Tax holiday on 28/6/2012, which is rejected by the National Board of Revenue (NBR) 28/8/2012. But the company has submitted review application against rejection of tax holiday on 23/3/2012. Lately on 22 June 2012 approved the Tax holiday of the company up to 31 January 2011. However adequate provision was made for income tax for first year of operation which may now be considered as Tax holiday reserve. Since the first year of operation completed on December 31, 2012 necessary return will be submitted in due course. Income tax returns for the pre-operative period submitted within the scheduled time and assessment completed up to assessment year 2011-2012.

Custom duty or other liabilities including Contingent Liability Payment of Excise Duty and VAT to Chittagong Customs Authority amounting to Tk.2, 067,382 on import of Pre-fabricated steel structure is under dispute since April 25, 2011. In this regard a case is pending for settlement with the High Court Division of the Supreme Court of Bangladesh. Bank guarantee in this regard was provided in favor of Chittagong Port Authority.


Off Balance Sheet Items:

Operating lease agreement

SAPL does not have any Operating Lease agreement with any organization as on 31 st December 2012.

Financial lease and other financial commitment

SAPL has a lease agreement with Industrial Infrastructure Development Finance Company Limited (IIDFC) for procurement of Steel structure, crane and Forklifts. The Particulars of Lease agreements are as under

1. Lessor : Industrial Infrastructure Development Finance Company Limited (IIDFC) 2. Lease amount : BDT 25,000,000.00 (BDT Twenty Five Million) only. 3. Lease equipment : Pre- fabricated Steel Components, Kato Crane, TCM Forklifts (2 units)4. Term : 5 Year (60 Months)5. Interest Rate : 17% per annum.6. Monthly rental : BDT 621,320.00 (BDT six hundred twenty one thousand three hundred

twenty) only per month.7. Expiry date : 25 June, 2014


Material Information Which Is Likely To Have An Impact There is no other material information which is likely to have an impact on the offering or change the terms and conditions under which the offer has been made to the public. Credit Information Bureau (CIB) report

Neither the company nor any of its directors or shareholders who hold 5% or more shares in the paid up capital of the issuer is loan defaulter in terms of the CIB report of the Bangladesh Bank. Involvement of Directors and Officers in Certain legal proceedings

No director or officer of the Company was involved in any of the following types of legal proceedings in the last ten years:

a. Any bankruptcy petition filed by or against company of which any officer or director of the issuer company filing the prospectus was a director, officer or partner at the time of the bankruptcy.

b. Any conviction of director, officer in a criminal proceeding or any criminal proceeding pending against him.

c. Any order, judgment or decree of any court of competent jurisdiction against any director, Officer permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.

d. Any order of the Securities and Exchange Commission, or other regulatory authority or foreign financial regulatory authority, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or banking activities.


APPENDIX:

Statement of Financial PositionAs on 31st December 2012


Statement of Comprehensive IncomeFor the Year Ended 31st December 2012


Statement of Cash FlowsFor the Year Ended 31st December 2012


SUMMIT ALLIANCE PORT LIMITEDSUBSCRIPTION FORM

APPLICATION FORMInterested persons are entitled to a prospectus and copy of prospectus may be obtained from the issuer

and the issue manager.Summit Alliance Port Limited (SAPL)

APPLICATION FOR 15-Year 7% Fixed Rate Bond (INVESTORS OTHER THAN NON-RESIDENT BANGLADESHIS)

Please read the instructions at the back of this form. Incorrectly filled applications or failing to comply with any of the instructions there in, application may be rejected.


The Managing Director Summit Alliance Port Limited (SAPL)Summit Centre18 Kawran Bazar C/A Dhaka- 1215

I/we apply for and request you to allot me/us the ……….lots of Bonds and I/we agree to accept the same or any smaller number that may be allotted to me/us upon the terms of the Company’s approved Prospectus and subject to the Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the Register of Bondholders of the Company and deposit the said Bonds to my BO (Beneficiary Owner) Account and/or a Crossed (Account Payee only) Cheque in respect of any application money refundable by post/courier at my/our risk to the first applicant’s address stated below:-

1. No. of lots of 7% Coupon Bonds:……………………………………………………….…………… lots of Tk 5,000 per lot( Face value of Tk 5,000).2. Amount of Tk (in figure), ……….….….….,(in words)…….……………….…..………… ………………………….…………….……….……only deposited vide Cash/Cheque/Draft/Pay Order No..….……………..…………..Dated……..……………...…………………..........……..…. drawn on …………………………..….………………………….Bank………..…………………………...….………..….………...………………..….…Brach.

3. Beneficiary (B/O) Account Number (If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 4. I/we agree to fully abide by the instruction given herein.5. Particulars of Applicant(s). a) Sole/First Applicant Name: Mr./Mrs./Ms.Father /Husband’s name: Mother’s name:Postal address: Occupation: Nationality: Telephone (If any):For refund warrant (Application will not be treated as valid if anyone uses a non-scheduled bank. To avoid this complication, investors are requested not to use the name of any non-scheduled bank) Please write the correct and full name of bank and branch:For refund warrant: Applicant’s Bank A/C No.Name of the Bank: Branch: b) Second Applicant Name: Mr./Mrs./Ms.Father /Husband’s name: Mother’s name:Postal address:Occupation: Nationality: 6. I/we hereby declare that I/we have read the Prospectus of ‘Summit Alliance Port Limited’, and have willingly subscribed for……………….………….lots of SAPL Bonds Tk.5000 per lot ( Face value Tk.5,000.00) on this form.7. Specimen Signature(s):

Name (IN BLOCK LETTERS) SIGNATUREFirst Applicant: Second Applicant:

………………………………………………………………………………………..………...……………………………………………………….…….

BANK’S ACKNOWLEDGMENTCertified that this bank has received Tk………..…………...(in word)……………….………………………………. ……………………………. only from Mr./Ms…...…………………………………….……………..being the Application Money for ……………….lots of Bonds of Summit Alliance Port Limited (SAPL).

Banker’s Sl. No. Seal and Date Authorized Signature (Name & Designation)


Banker’s Sl. No.