CREDIT RATING REPORT On BANGLADESH STEEL RE-ROLLING MILLS LIMITED

REPORT: RR/1823/12
This is a credit rating report as per the provisions of the Credit Rating Companies Rules 1996. CRISLs entity rating is valid one year for long-term rating and 6 months for short term rating. CRISLs Bank loan rating (blr) is valid one year for long term facilities and up-to 365 days (according to tenure of short term facilities) for short term facilities. After the above periods, these ratings will not carry any validity unless the entity goes for surveillance. CRISL followed Corporate Rating Methodology published in CRISL website www.crislbd.com

Address: CRISL Nakshi Homes (4th & 5th Floor) 6/1A, Segunbagicha, Dhaka-1000 Tel: 9515807-8 9514767-8 Fax: 88-02-9565783 Email: crisldhk@crislbd.com Analysts: Bipul Barua bipul@crisl.org A.K.M Saidur Rahman saidur@crisl.org

Date of Rating Entity Rating Outlook

October 15, 2012 Long Term AAPositive

Short Term ST-2

1.0

RATIONALE

Entity Rating Long Term: AAShort Term: ST-2

CRISL has assigned AA- (pronounced as double A minus) rating in the Long Term rating and ST-2 rating in the Short Term to Bangladesh Steel Re-Rolling Mills Limited (BSRM) based on its audited financials and other relevant quantitative and qualitative information up-to the date of rating. The above ratings have been assigned after due consideration to its fundamentals such as comfortable liquidity, sound brand image, experienced management team, sound infrastructural arrangement, Group support etc. However, the above factors are moderated to some extent, by debt based capital structure, volatile price of raw materials, bank dependent working capital management, extreme competition in MS rod industry etc. Entities rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions. The short term rating indicates high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small. CRISL also views the company with Positive Outlook due to its expected increase of production capacity consequently leading to an enhanced market share in line with growing market demand of quality products during the rating validity period.

Outlook: Positive

BANGLADESH STEEL RE-ROLLING MILLS LIMITED ACTIVITY Manufacturing of graded MS Rod, Angle, Channel

DATE OF INCORPORATION December 28, 1960

2.0

COMPANY PROFILE

CHAIRMAN & MANAGING DIRECTOR Mr. Alihussain Akberali, FCA

EQUITY Tk.6,302.58 million

TOTAL ASSETS Tk.16,861.71million

2.1 Background Bangladesh Steel Re-Rolling Mills Limited a high grade steel manufacturing company has been operating as the mother concern of BSRM Group. BSRM is considered as one of the oldest steel manufacturing plant in the country that started business in 1960. Product line of the company includes MS Rod, Channel and Angle etc. At present, the company is running with the capacity of 120,000 M. Ton per annum. The company was incorporated on December 28, 1960 as a private limited company and converted into public limited company on November 03, 2009 under the companies Act 1994. Subsequently on January 01, 2011, BSRM has merged with its backward linkage sister concern Meghna Engineering Works Limited (MEW). The paid up capital of BSRM stood at Tk.915.06 million against the authorized capital of Tk. 5,000.00 million as on September 30, 2012. The plants are located at 147-149, Nasirabad I/A, Baizid Bostami Road, Chittagong and 78-79 Nasirabad Industrial Area, Chittagong with Head Office at Ali Mansion, Sadarghat Road, Chittagong. 2.2 Ownership Pattern Being a closely held public limited company, the ownership of BSRM is mainly concentrated among the sponsor shareholders, institution shareholder and other shareholders including employees of the company. Out of total shares, the sponsors hold 42.667%, institution hold 2.833% and remaining is hold by other shareholders. A summary of the owners and ownership stake are delineated below:

Mother concern of BSRM Group

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