Prospectus

Dalol Oil Share Company

Prospectus 01
Dalol Oil Share Company
 Table of contents

1
TA B L E O F C O N T E N T S

Message from the Promoters

2 Summary Information on Sales of Shares

3 Promoters Profile

10 Overview of the Petroleum Industry in Ethiopia

11 Brief Description of Dalol Oil S.C.

12 Five Reasons why you should invest on Dalol Oil S.C.

15 PART A - STATUTORY INFORMATION

Establishment and Registration

Company Objectives

Organization and Management

Profit Allocation

Financial Information

Sales of Shares

17 PART B - SUPPLEMENTARY INFORMATION

Summary of Memorandum of Association

Summary of Article of Association

Important Banks Accounts

Individual/Corporate Application Form

Dalol
DalolOil
OilShare
Share Company
Company Dalol Oil Share Company

Message from the Promoters

Ethiopia is currently on the edge of rapid strengthen the future of Ethiopian born
economic development with consistent prosperity. Dalol Oil S.C. aims to play a
double-digit growth over the last significant role in satisfying the nation’s
successive years. The trend in sustainability growing petroleum products and services
of economic growth is being witnessed demand whilst giving investors a stable
in all the critical areas of consumption and attractive rate of return on their
indicators such as power, energy, cement investment.
etc. The consumption of petroleum
products such as petrol, diesel and Siket Promotion PLC, a company that
kerosene has been significantly growing promotes Dalol Oil S.C., is proud to present
with an increase of 10% in consumption an investment venture, which can be
on year-to-year basis. Consumption of passed from generation to generation
lubricants and lubrication oil has also with a high and stable rate of return whilst
shown a double-digit growth over the expanding the nation’s capacity to satisfy
last three years. In addition, the fact that the increasing demand on the energy
petroleum is a necessity product and its sector. We hereby extend our invitation
demand is inelastic makes the growth to you, our fellow citizens and foreign
sustainable even in times of any economic investors, to subscribe for shares and be
slowdowns. part of our grand vision to form Ethiopian
born Oil Company that will create a
For long, few multinational Oil Companies substantial employment opportunity
with little competition to satisfy the for Ethiopians and leave a legacy and
increasing demand had dominated the lifetime profitability for you and your
petroleum industry. Despite persistent generations to come.
and increasing growth in the demand
for petroleum products, the network
expansion and supply by existing Oil Ededeya Assefa
Companies is slow moving. Recent trends General Manager
in the exit of multinational oil companies is Siket Promotion PLC.
further weakening the strength of the Oil
Industry to service the growing demand
of the nation for petroleum products.

Dalol Oil S.C. is a company founded by

Ethiopians with a wealth of local and
international experience in the Oil Industry
and with a determination to shape and

1
 Dalol OilOilShare
Dalol ShareCompany
Company

Summary Information on Sales of Shares

Dalol Oil Share Company
OFFERS
150,000 REGISTERED ORDINARY SHARES FOR PUBLIC SUBSCRIPTION

PAR VALUE PER SHARE BIRR 1,000.00

OFFERING PRICE PER SHARE BIRR 1,000.00
SERVICE CHARGES PER SHARE BIRR 70.00 (7%)

Those who Purchase 100 shares and above and who Invest in full until October 31st 2009 will be
eligible to win a chance of being Dealer for Dalol Oil Company Owned Service Stations.

TERMS OF PAYMENT 30% payment on subscription

40% by 01 March 2010
30% by 01 September 2010

For domestic investors

Minimum Investment 10 shares (Birr 10,700)

Maximum Investment 20 % or 30,000 shares (Birr 32.1 million)

For foreign investors of non-Ethiopian origin

• Minimum capital requirement for investment in partnership with domestic investors is

USD 60,000.

OFFER OPENED: 01 September 2009

OFFER CLOSES: 31 December 2009

Address
Dalol Oil Share Company
P.O.Box 11937
Ethio-China Friendship Street (Wollo Sefer)
New Building next to Medco Bio Medical College, 2nd Floor
Addis Ababa, Ethiopia
Tel –251 114 163838, 251 114 165757
251 114 161732, 251 114 161733
Fax –251 114 164002
Email – [email protected]
Website – www.daloloil.com

2
Dalol
Promoters
Oil ShareProfile
Company Dalol Oil Share Company

Ato Ededeya Assefa

CEO and Main Promoter of Dalol Oil S. C.

Ato Ededeya Assefa has obtained his MBA custodian of the Shell brand closely working
in Business Administration from Edinburgh with global Brand and Advertising Agencies
Business School, Scotland and BA degree such as J. Walter Thomson, One 4 One and
in Management and Public Administration others. Whilst in Malaysia, he has also worked
from Addis Ababa University. He joined as Loyalty Marketing Manager where he
Shell in 1998 and has been working with the was responsible to manage Shell’s Program
company for over a decade assuming a called BonusLink, a popular program that
variety of roles in Ethiopia, Africa and Asia enjoyed over 4 million membership.
Pacific.
Upon repatriation, Ededeya worked
Ededeya has worked as Sales Representative for Shell Oil Products Africa as Regional
for Addis Ababa, Northern, Western and Training Manager for East and South East
Southern Ethiopia where he was responsible Africa covering Ethiopia, Uganda, Kenya,
to manage the overall operation of Shell Sudan, Egypt, Mauritius, Madagascar, DRC,
Service Stations across the country. Later, Botswana and Namibia. In his role, he has
he was promoted as Retail Network been working both with Pan-African and
Development Manager, where he was global Shell operating companies where
responsible to manage the company’s he gained an extensive experience about
Retail Network Portfolio through optimal operations of the Oil Business in different
investment and divestment on Shell Service countries in Africa. Upon takeover of Shell
Stations. Notably, he has developed a five Ethiopia by Oil Libya Holdings Limited, he
years Retail Network Master Plan for Shell has worked as Retail Manager where he was
Ethiopia which served as a road map for the responsible to manage the overall operation
company to focus on key strategic network of the company’s Retail Business in Ethiopia.
locations viable for opening up of Service Ededeya is also founder of CALD (Center
Stations and divestment of non-profitable for African Leadership Development), a
assets. management & leadership development
constancy firm that provides training,
In 2003, Ededeya was expatriated to Malaysia coaching and consultancy services in
to work as Brand Manager for Shell Malaysia Ethiopia and beyond.
and Singapore. In his role, he has worked as a
3
 Promoters Profile

Ato Fisseha Asres

Associate Promoter and Board Member of Dalol Oil S.C.

Ato Fisseha Asres is the General Manager of end of June 2008. During his stay with Hilton,
Intercontinental Addis Hotel. He has Masters occupancy of the hotel reached 90% and its
degree in Management from Institute of Social presence in the community was highly felt for
Studies in the Netherlands and Bachelor degree which Ato Fiseha played a significant role.
in Management and Public Administration
from Addis Ababa University. Ato Fisseha was By mid 2008, he took over his current position
retained to work as a graduate assistant in at the Intercontinental Addis to become the
the areas of teaching, doing research and first Ethiopian General Manager of a Five Star
consultancy at the then commission for Higher Hotel. He organized the hotel from scratch
education. and did a pre-opening and grand opening
of the Hotel with Ethiopian team, which was
In 1990 he joined Shell Ethiopia Limited, which very challenging. Currently the Hotel is one of
lasted until October 1999. During these times the Hot Spots and it is preffered by local and
he has worked in Retail, Consumer, LPG and international customers.
Aviation Marketing Departments. During his
stay with shell a number of Retail stations were Fisseha is one of the founders of Ethio-parents
opened through the concept, which was school and has served the school for six years as
developed then as “Dealer Owned” stations. Board of Directors and Business Development
The strong network that he developed with Committee member. In addition, he has served
different government organizations gave as Board Chairman of Elegant PLC for about
leverage to the company to win quite many six years, Board Member of Systec PLC and
businesses in the consumer sector. Burayu Paper and Packaging PLC for over 8 yrs.
He has also participated in the establishment
In October 1999 Ato Fisseha joined Hilton and structuring of Sorene Business Group and
International as a Human Resources Manager worked as a special advisor to the owner for
during which time different initiatives were over ten years.
taken by him to revamp the human resources
of the Hotel to make it competitive. Later on he
was also appointed as Front Office Operation
Manager until he left to take assignment in
the new Intercontinental Addis Hotel at the

4
 Promoters Profile Dalol Oil Share Company

Engineer Dereje Walelign

Associate Promoter and Board Member of Dalol Oil S.C.

Eeg. Dereje Walelign is Managing Director In his role as Project Engineer, Dereje was
of Lydetco PLC, a company engaged in responsible for civil works in the depots
Renewable energy; Managing Director and the design and construction of all
of Abeshakana Trade & Industry PLC, a service stations countrywide. He has also
company engaged in extraction of essential demonstrated his skill in the construction
oils & currently president of the Ethiopia and erection of a conveyor belt system for
Solar Energy Association. Engineer Dereje gas cylinders including filling machinery, LPG
Walelign has earned his BSC degree in Civil pumps, etc. Working as Operation Assistant,
Engineering from Addis Ababa University, he was responsible for the overall fuel product
Faculty of Technology in 1982. loading from Shell installation in Assab to
allover Ethiopia. His work in Assab included
He started his career in the former Ethiopian the certification of Jet fuel for quality, which
Building Construction where he was assigned involved safety of all airplanes fuelling in any
to work as Site Engineer for the construction Ethiopian Airport and unloading of marine
of Muger Cement Enterprise plants and later vessels loaded with petroleum products,
as Project Manager for the construction of which greatly enhanced his knowledge of
Jimma Health Science Institute complex. dealing with foreign fuel transportation.
Notably, whilst Jimma Health Institute was
behind schedule to accept students, Dereje In his role as Retail Engineer, Engineer Dereje
had showed his excellence and competence and his team have executed Shell’s latest
by completing most of the construction Retail Visual Identity in Ethiopia and were
works within one year following which he awarded for efficient and timely completion
was promoted as Project Manager. Engineer of the project. Among others, highlights of
Dereje joined Shell Ethiopia Limited in 1987 his contribution as Engineering Manager
and has worked for the company for over included upgrading of Retail Network in
12 years by assuming various engineering Djibouti, upgrading of bulk bitumen storage
roles. Whilst with Shell, he has worked as tank and modification of various works in
Project engineer, Equipment engineer, Djibouti Depot and various improvement
Operations Assistant for Assab installation works in Assab Installation.
until he became Engineering Manager for
Shell Ethiopia, Shell Eritrea and Shell Djibouti.

5
 Promoters Profile

Engineer Nebiyat Gezahegn,

Associate Promoter and Board Member of Dalol Oil S.C.

Eng. Nebiyat Gezahegn has obtained his In 2005 following the buyout of Mobil Oil East
BSC in Mechanical Engineering from Addis Africa (Ethiopia) by Total, he has moved
Ababa University. He started his career in to Total Ethiopia and worked in different
Sugar Industry, where he had assumed capacities. He initially worked as Health
Technical Supervisor position. During this Safety and Environment Advisor. Then
period he managed new development transferred to Engineering and served as
projects and solidified his engineering Deputy Rebranding Project Manager. Later
knowledge. Assigned in the Marketing Department and
worked as Technical Services Manager.
In 1995, He joined Mobil Oil East Africa, a
subsidiary of Exxon Mobil and since then He left Total Ethiopia in 2008, moved to
he has been working with the company the United State of America and currently
assuming different capacities. He has working for Westat Corporation and also
versatile and solid experience in the Oil pursuing his MBA in project management
Industry, that encompasses Marketing, at Maryland University. Engineer Nebiyat
Engineering and Safety & Environment. plays a significant role in promoting Dalol Oil
S.C. to Ethiopians residing in United States of
He has worked as Sales Engineer for the America.
Commercial Line of Business; his responsibilities
were sales of petroleum products (lubricants
and fuels) and other specialties. He was
primarily focused in maintaining existing
business and developing new businesses.
Later he was promoted to Technical
Services Supervisory position and successfully
managed planned engineering services
and facilities. He was acknowledged for
improved sales volume & profitably and
putting the company at the edge of the
competition.

6
 Promoters Profile Dalol Oil Share Company

Professor Badeg Bekele,

Associate Promoter and Board Chairman of Dalol Oil S.C.

Professor Badeg Bekele is Owner/Founder elementary schools throughout Ethiopia.

and President of International Leadership In collaboration with American Society of
Institute (ILI), a highly successful institute, Cataract and Refractive Surgery (ASCRS), he
which provides higher education degrees has also established a pediatric contaract
(MBA in International Business, MPA and eye center in Ethiopia. He is also a founder
MA in Transformational Leadership.) The and executive director of Mercy Care
Institute also offers BA in “Organizational International in USA.
Management”, Business Management,
Economics and Community Development. Professor Badeg is founder and Board
Offering a short-term training on many Member of Birhan International Bank, was
leadership topics throughout Ethiopia and board member of EECA of America and
many parts of the world is what it does. Canada, board member of CRDA of USA
Professor Badeg is a Prominent lecturer and president of Ethiopian pastors’ fellowship
and conference speaker who is known for of North America and Canada. Professor
his passion to transform Ethiopia through Badeg has obtained his BA degree from
the propagation of effective leadership EAST in Nairobi Kenya and MA degree from
practices and the development of human AGGS in Springfield, Missouri USA. He has
intellectual capital. also earned Masters of Divinity (M.Div) and
PhD degree from Azusa Pacific University in
His compassion for the nation’s development California, USA.
is witnessed in all the works he does and
the institutes he established since he
returned back to Ethiopia after long years
of stay in United States of America. Among
others, he has founded an NGO known as
“Continental New Life International” in USA
which supported the establishment of the
health center in Addis Ababa, Ethiopia. The
center currently serves over 300 patients
every day. He also has built a number of

7
 Promoters Profile

Ato Dereje Belay,

Associate Promoter and Board Member of Dalol Oil S.C.

Ato Dereje Belay has obtained his first degree in Economics and Diploma in Business
Administration from Unity University College.

Dereje is a young entrepreneur who has been engaged in managing a chain of family
businesses from an early age such as transport and different related businesses through which
he gained extensive experience in different sectors. He owns a Fuel Station in the town of
Hamusit located in northern part of Ethiopia where he acquired a considerable experience in
the management and operation of service station. He has worked for more than eight years
as a Dealer for Shell Ethiopia Limited, till the divestment of Shell’s partial network to KOBIL.
Currently, Dereje is also running various successful businesses such as lodge development, real
estate and agriculture.

Dereje is one of the founders of the Ethiopian Tour Operators Association. He is also owner of
Ethio-Der travel, one of the leading and most successful tour-operating agencies in Ethiopia.

8
Dalol Oil Share
Promoters Company
Profile Dalol Oil Share Company

Ato Gebreamlak Gebregiorgis

Associate Promoter & Board Secretary of Dalol Oil S.C.

Ato Gebreamlak graduated from the Faculty of Law of Addis Ababa University in 1998.
He worked for the Ethiopian Insurance Corporation for a year as an attorney and left the
company to join the Faculty of Law of the Ethiopian Civil Service College. After teaching for
a year he joined the Norwegian Center for Human Rights, Faculty of Law of the University of
Norway and did his M.A. in Human Rights. He continued to teach at the Ethiopian Civil Service
College from 2001 until July 2004, in which period he also conducted research on various legal
issues and carried out various administrative activities at the Faculty. He joined the University
Of San Francisco School of Law, San Francisco, California, in August 2004 and did his LL.M. in
International Transactions and Comparative Law. He has been a private practitioner since
October 2006. He has conducted research and rendered training for various governmental
and private institutions. Gebreamlak is also a co-producer and co-host of a popular weekly
talk radio program on various legal issues under title “Sine Hig” which is broadcast on FM 98.1.
He is the legal advisor and associate prompter of Dalol Oil S. C.

9
 Overview of the Petroleum Industry In Ethiopia
Dalol Oil Share Overview
Company
Ethiopia, at the moment, is a net importer of petroleum products in Ethiopia. Global
of petroleum products. White and black strategies such companies adopt to focus
petroleum products are imported directly on Oil & Gas exploration coupled with their
by the Ethiopian Petroleum Enterprise (EPE) stringent operational Safety requirements has
through third party suppliers. Upon receipt from forced some of the multinationals such as Mobil
third party suppliers, EPE stores the products at and Shell to move away from the distribution of
Horizon Terminal in Djibouti and then distributes petroleum products in Africa. Currently, there
the different grades mainly Gasoline (Benzene), are very few Oil Companies engaged in the
Gas Oil (Naphta), Kerosene, Light fuel oil, Heavy petroleum business in Ethiopia. As compared
fuel oil and Jet fuel to Oil Companies through a to neighboring countries, Ethiopia has fewer
fixed margin structure set by the government. number of Oil Companies with less competition.
In addition, EPE imports Gasoline (Benzene) A case in point is Uganda and Kenya where
from Sudan. For the supply of Gasoline in Addis over 50 independent companies are engaged
Ababa, EPE has made an agreement with Nile in the distribution of petroleum products with
Petroleum, a Sudanese Oil Company operating aggressive competition in the industry.
in Ethiopia, where the latter conducts blending
of Gasoline with Ethanol (E5) at its depot in Despite persistent and increasing growth in the
Sululta and distributes E5 to Oil Companies. demand for petroleum products, the network
expansion (the number of outlets being
Fuels pricing and revisions are made by the built) and supply by existing Oil Companies
government on a monthly basis. Lubricants and is not adequate. Recent trends in the exit
greases, however, are being directly imported of multinational Oil Companies is further
by the Oil Companies with the intervention of weakening the strength of the Oil Industry to
government in setting prices on a quarterly basis. service the growing demand of the nation
The margin set by the Ethiopian government for petroleum products. In view of the current
on lubricants and greases is attractive as trends in economic growth and government’s
compared to the slim margin on fuel. plan to invest millions of dollars in infrastructure,
In the year 2008, the overall consumption hydropower projects, mining and others
of fuels in Ethiopia was over 2 billion liters. By sectors, the current gaps between demand
the same year, nationwide Lubricants and and supply in the petroleum sector is wide.
greases consumption was over 25 million liters.
The consumption of both fuels and lubricants Ethiopia is also believed to hold a huge
is consistently increasing by 10% on a year on potential for energy and mining. The nation’s
year basis and the trend in growth is expected current efforts in the areas of hydroelectric
to continue in a similar pattern over the next power projects and exploration of Oil and
years. Increased economic activity coupled Gas are clear testimonies of the government’s
with increased government spending in the determination to unleash its natural resources.
areas of infrastructure, power, mining and In addition to the lucrative and stable Rate
other sectors continues to further expand the of Return on Investment (ROI) the petroleum
demand for petroleum products. distribution business generates at the moment,
strengthening capability of local Oil Companies
For long, few multinational oil companies in the sector can serve as a stepping-stone
with little competition to satisfy the increasing to move into a highly profitable Gas and
demand had controlled the petroleum industry. Oil Exploration business with Ethiopian born
Until recently, Shell, Mobil, Total and Agip were prosperity and talent.
the only companies engaged in the distribution

10
Dalol Oil Share Company
Overview Dalol Oil Share Company

Brief Description of Dalol Oil S.C.

Dalol Oil S.C. is a company founded by visionary Ethiopian professionals who are committed
to form uniquely Ethiopian Oil Company that:
• Meets international standards
• Redefines customers refueling experience by offering a range of products and
services at one stop
• Goes way beyond traditional way of doing business by introducing innovative trade
channels that improve customer convenience.

Vision
To be the Most Preferred Oil Company in Ethiopia

Mission
To safely provide customers with quality fuels, lubricants and other related products through
convenient, efficient and exceptional services.

Company’s Products
Dalol Oil S.C. will adopt a phased approach in the scope of business activities it will be engaged
in. During the first two years of operation, the company will primarily focus on the following
products and services:
• Fuel products: Gasoline (Benzene), Gas Oil (Naphta) and Kerosene
• Lubricants and greases
• Other related products and services (non fuels related)

On the third year, once the company has held a grip on the market, it will raise additional
capital (Birr 100 million) through public offering of second round share sales. During the fourth
year of its operation, the company would expand the range of products and services to
include:
• Bitumen
• Aviation fuels (Avgas and Jet A-1)
• LPG (Liquefied Petroleum Gas)

Location of Dalol Oil Share Company and its Service Stations

Dalol Oil Share Company will have its head office in Addis Ababa. The company will also
construct its mini depot in the outskirt of Addis Ababa during its first five years of operation.
The company has already carefully identified strategic cities, towns and locations at which its
service stations are going to be build. As a strategy, Dalol Oil S.C. will focus to optimally invest
in trade areas with significant traffic flow and locations, which are convenient and accessible
for motorists. In addition to the traditional channel of providing service solely through service
stations, the company will also introduce its unique channel to provide service by getting
much closer to end users.

11
 Dalol
Five reasons why you should invest Oil Share
on Dalol Company
Oil S. C.

The petroleum business generates quick and substantial Return on Investment (ROI):

1 Unlike many other businesses, the establishment of Oil Company provides flexibility on
scale of start up operation. Dalol Oil S.C. aims to finalize sales of shares in maximum of
six months and immediately proceed to construct its first phase of Company Owned
Service Stations, which will also be finalized in six months. The target date to officially
resume business operation is Sept 2010.

The margin set by the Ethiopian government on lubricants and greases is attractive as
compared to the slim margin on fuels. Bitumen, Aviation and LPG business also deliver a
lucrative margin. In addition to the above margins to be generated from distribution of
petroleum products, Dalol Oil S.C. will also aggressively be engaged in Non Fuels Related
(NFR) businesses to optimally utilize all its facilities in the world class services stations
the company plans to build throughout the country. Below is a summary of projected
Income statement and key financial variables that clearly show the profitability of Dalol
Oil S.C.

Projected Income Statement for Dalol Oil S.C.

For the period from 2011 to 2016
Years
Item Description
2011 2012 2013 2014 2015 2016
Capital
(‘000) Birr
Investment 150,000 100,000
   
Network Number of stations - Company
Plan Owned 20 20 20 30 30 30
Number of stations - Dealer Owned 10 20 30 40 50 50
Total Number of Stations 30 40 50 70 80 80
   
Sales Estimated Industry Volume (‘000) lts 3,218,070 3,606,602 4,209,410 4,563,875 5,153,161 5,153,161
Volume Market share - Dalol Oil S.C. 6% 9% 14% 18% 21% 21%
Projected sales - Dalol Oil S.C. 201,209 341,740 589,701 820,243 1,067,572 1,067,572
   
Revenue Gross Margin (000) Birr 36,039 57,039 100,887 132,871 188,231 188,231
Other Operating Income (‘000) Birr 1,920 2,112 2,429 2,915 3,643 3,643
Total Revenue (‘000) Birr 37,959 59,151 103,316 135,785 191,874 191,874
   
Expenses Storage and Handling Expenses (‘000)
Birr (1,373) (1,510) (1,737) (2,084) (2,605) (2,605)
Point of sales Expense (‘000) Birr (638) (743) (931) (1,248) (1,789) (1,789)
Marketing & Selling Expenses (‘000) Birr (8,475) (9,322) (10,721) (12,865) (16,081) (16,081)
Shared Support Services (‘000) Birr (4,517) (4,968) (5,714) (6,857) (8,571) (8,571)
Depreciation (“000) Birr (6,796) (6,796) (6,796) (13,811) (13,811) (13,811)
Total Expenses (‘000) Birr (21,798) (23,341) (25,898) (36,864) (42,857) (42,857)
Net Income
before Tax   16,161 35,810 77,418 98,921 149,017 149,017
  Tax - 30% 4,848 10,743 23,226 29,676 44,705 44,705
Net Income
After Tax   11,313 25,067 54,193 69,245 104,312 104,312
* NB. Dalol Oil S.C plans to inject additional Birr 100 million capital after three successful years of operation.

12
Dalol
DalolOil
OilShare
Share Company
Company Dalol Oil Share Company

Nature and size of demand for petroleum products: Petroleum is one of the most traded

2 items in the world. Petroleum is a necessity product and the nature of its demand is
inelastic. Unlike other businesses whose demand is impacted by price and other
economic variables, the consumption of petroleum products continues to increase
even in the face of any economic slow downs. A case in point is the increase in the
country’s consumption of petroleum products during the period from January to June
2009 which showed an increase of 7% over last year same period. From investment point
of view, whilst many other business sectors are impacted by the global financial crisis
and showed a declining business trend, companies engaged in the petroleum business
in Ethiopia have continued to generate a significant rate of return on investment giving
investors’ confidence to sustain the current global financial shocks.

Petroleum business has minimal risk on investment: The nature of investment on

3 petroleum business is such that once the network of service stations are build, the amount
of capital investment on fixed assets will be minimal whilst a significant proportion of
investors’ capital will be circulating on stock of petroleum products. Stock and inventory
being the next liquid form of asset next to cash, being engaged in the sectors provides
investors with flexibility to diversify business. In addition, Oil Companies are also enjoying
a 30 days credit on supply of fuels from EPE, an incentive the Ethiopian government has
provided to facilitate a smooth distribution of the products across the country. From
control point of view, the petroleum business is a safe business for investors as costing
and pricing mechanisms are highly transparent and automated. Dalol Oil S.C. also
plans to invest on required systems and IT infrastructure to ensure that there will be no
control gaps in the operation of the business.

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 Dalol OilOilShare
Dalol ShareCompany
Company

Invest in Dalol Oil S.C. and there is something in it for you: If you are one of the first early

4 buyers of share during the first two months of sales of shares, and provided that you
have purchased 100 shares and above and Invest in full by October 31st 2009, you will
be eligible to win a chance of being Dealer for DALOL OIL Company Owned Service
Stations. Are you an entrepreneur with the qualification and enthusiasm to win a chance
to operate as a self-employed Dealer? If your answer is yes, Dalol Oil S.C. is for you.

If you would like to invest your money on venture that provides you and your family with
the financial protection and stability in the face of difficult economic times, Dalol Oil S.C.
is an investment for you.

Finally if you are wondering about inflation and what to do with the level of capital you
have at hand, Dalol Oil S.C. is your company giving you the best out of your investment
whilst leaving you to focus on other personal activities.

Dalol Oil Share Company deploys a world class management expertise: The following

5 are areas of strength which makes Dalol Oil S.C. to be a highly successful company in a
short period of time:
• Founders of the company are visionary and have a wealth of local and international
firsthand work experience in Multinational Oil Companies such as Shell and
ExxonMobil.
• With regard to lubricants and greases, Dalol Oil S.C. will carry an international brand
that meets high quality standards. When found appropriate, Dalol Oil S.C. partners
and/or joint ventures with international companies engaged in the Oil Business and
related services so as to gain synergy and competitiveness.
• We strive to optimize on all our investments by effectively utilizing 100% of our network
facilities and also carefully investing on key strategic locations.
• We will not be limited with the traditional ways of doing the petroleum business by
solely focusing on fuel products. We will make all our service stations a one stop
shopping center for our motorists by providing a range of non fuels related businesses
with excellence in customer service.

14
Dalol
DalolOil
OilShare
Share Company
Company Dalol Oil Share Company
PART A - STATUTORY INFORMATION

Establishment and Registration

Dalol Oil S.C is a share company incorporated and registered by the Federal Ministry of trade and
Industry on 28 August 2009 as per the Ethiopian Commercial Code. The company is formed by 7
individuals with an initial capital of Birr 1,400,000 (One million four hundred thousand) based on a
par value of Birr 1,000 (one thousand) for each share. The seven founders are individuals whose
profile is also presented on this prospectus. Based on the current offer, the share capital will be
increased to Birr 151,400,000 through the issuance of additional shares of 150,000 shares of Birr 1,
000 each.

Company Objectives

As per Memorandum of Association, the following are business Objectives of Dalol Oil S.C.

1. Distribution of fuel products

2. Importation and distribution of lubricants and greases
3. Operation of service stations
4. Transportation of petroleum products
5. Exploration and refinery of gas and oil
6. Operation of other related business activities.

Organization and Management

Organizational Structure

Shareholders
Assembly

Board of Directors

Auditor

CEO

Legal Advisor Manager

Corporate Brand

Manager Manager Manager Manager

Finance Human Resource Sales & Marketing Operations

Manager Manager Manager

Fuels Marketing Lubes Marketing (NFR) Non Fuels Retailing
15
 Dalol OilOilShare
Dalol ShareCompany
Company

Organization is made by the seven founders and amounts

The highest decision making body of the Birr 1,400,000 (One million four hundred
company will be the General Assembly of thousand) based on a par value of Birr 1,000
Shareholders which will hold annual regular (one thousand) for each share. Each founder
meetings to look into operational details. has made a capital contribution of Birr 200,000
However, Extraordinary General Meeting of (200 shares). The company will not however be
Shareholders can be held more often, as and fully capitalized until the closing of the offer for
when the situation warrants. the sale of shares.

The shareholders at their initial official meeting Bank Loans

will appoint the Board of Directors, whose There are no bank loans at present but the
office will be retained for a term of three years. company may obtain overdraft facilities from
The Board of Directors will be responsible banks to finance its working capital.
for policy matters, approval and follow-up
of annual programs and budgets, and the Dividend Policy
appointment of the Chief Executive Officer of Each shareholder is entitled to a dividend
the Company. on the net profit of the Company according
to shareholding. The General Meeting of
Management Shareholders will declare the amount of
Dalol Oil S.C. has set up an office, headed dividend to be paid.
by Ato Ededeya Assefa, to manage the
company. Sales of Shares

External Auditors How to subscribe

To be appointed by the General Meeting of Prospective shareholders may obtain a copy of
Shareholders. the prospectus from the office of the promoter
or authorized sales agents. Those residing
Profit Allocation abroad can download from our website www.
As per Article 310 of the commercial code, daloloil.com Offer is open from 01 September
by accepting the offer made herby, each 2009 to 31 December 2009. Two application
applicant irrevocably agrees that 14 percent forms (one for individual and the other for
(14 %) of the net profit for the first three years of corporate applicants) are available at the
operations will be allocated to the Promoterse end of this prospectus. Subscribers may also
of the company as stated above. The collect these forms from the promoter’s office,
promoters of the company are the seven authorized agents or Dalol Oil’s website.
individuals whose profile is also stated in the
prospectus and who are owners of Siket Payment for Subscription
Promotion PLC. The starting date of operation Price per share is Birr 1,000 plus Birr 70 per share
is the date after completion of construction of as service charge. The Payment for the Share
service stations and the official resumption of Subscription should be deposited in the Blocked
the company’s operation. Accounts under the name of “Dalol Oil S.C.
and the service charge should be deposited in
Financial Information the Current Accounts of “Siket Promotion PLC”
opened at the same branches for this purpose.
Present Status The share value will be deposited in blocked
The initial formation capital of the company account and it will only be operated with the

16
Dalol
DalolOil
OilShare
Share Company
Company Dalol Oil Share Company

decision of the general assembly of the shareholders. The cumulative of services charges is intended
to cover research and administrative costs, sales commission, formation costs, consultant costs, and
other related promotion costs to establish the company.

Payment can be made either fully or partially as per terms of payment stated on page 3. Service
charge shall be paid out in full upon subscription. All payments should be made either in person
at our office or by bank deposit at banks indicated in this prospectus. Subscribers should bring the
bank slip to the Company’s Office or to the authorized sales agents. Any incomplete forms or one
without the attached deposit slip will not be accepted. Prospective subscribers should note that the
sales agents are not expected to receive cash.

The deposit slip and confirmation letter are evidence of subscription of shares and Subscribers should
keep them carefully until formal share certificate is issued upon payment for the total number of
shares subscribed. Share Certificates will be issued only after the completion of payment for the
total number of shares subscribed. Share certificate will indicate how much of the payment has
been received.

PART B - SUPPLEMENTARY INFORMATION

Summary of Memorandum of Association

The Memorandum of Association contains 13 Articles. This deals with the founding of the Company,
including the Founding Shareholders and the Business Objectives of Dalol Oil S.C. The Memorandum
of the company also states the organs of the company and their respective powers and the manner
of distribution of profits.

Summary of the Articles of Association

The Articles of Association states procedures that govern the operation of the company. The articles
contain 30 Articles which deal with procedural and administrative matters such as calling of general
meeting, quorum, proxy, and majority requirements at General Meetings, powers and duties of the
Chief Executive Officer, keeping accounts and financial reporting of the Company, withdrawal of
membership and death of a member. The relevant Articles also detail that there is only one class of
shares and the rights attached to such shares as well as the right and liabilities of shareholders.

Ownership

Ownership is guaranteed with a share certificate upon full payment. Each shareholder shall enjoy the
power of deciding on the company’s affairs either through direct voting at the General Assembly or
through the Board of Directors.

Documents Available for Inspection

• Memorandum of Association
• Articles of Association

17
 Individual/Corporate Application Form

Name/Company Name_________________________________________
Address: Town/Zone________________Sub-city________________Kebele__________________
House No.__________________ P.O.Box_________________
Telephone: Office_______________ Home_________________ Mobile__________________________
Fax________________________E-mail_____________________ Nationality_________________________

I/We hereby apply for buying Dalol Oil Share Company’s ordinary shares with the following
conditions:

I/We hereby agree to subscribe for _____________________/ ________________________________/

ordinary shares with a par value of Birr 1,000 (One thousand) amounting in total Birr
_________________/_____________________________________________.

When this agreement is signed

1. I/We shall deposit full payment of Birr ____________________/_____________ _________________

or (_______) % Birr _______________________/___________________________________/ in the blocked
account of Dalol Oil Share Company opened for this purpose.

2. I/We agree to pay the second payment (_______) % Birr ________________/_________________

__________________________ by date ______________________ and

3. The remaining (_______) % Birr ________________/________________________________________

by date ______________________.

Payment of Service Charge

7% (Seven Percent) service charge per share subscribed shall be applied to cover various
sales and administrative expenses.

Service charge shall be paid out in full upon subscription and deposited to the account of
Siket Promotion PLC.

Service Charge Amount: Quantity of shares_______________x Birr 70.00 = ____________________/

_____________________________________________________________

I/We hereby declare that I/we have read and understood the prospectus and irrevocably
agree to the terms and conditions stated by Dalol Oil S.C. promoters for share subscription.

Date ________________________________

Name and Signature of Investor__________________________________________________

Name and Signature of Sales Agent______________________________________________

 Address
Dalol Oil Share Company
P.O.Box 11937
Ethio-China Friendship Street (Wollo Sefer)
New Building next to Medco Bio Medical College, 2nd Floor
Addis Ababa, Ethiopia
Tel –251 114 163838, 251 114 165757
251 114 161732, 251 114 161733
Fax –251 114 164002
Email – [email protected]
Website – www.daloloil.com