EBL NRB Mutual FundTrustee: Bangladesh General Insurance Company Limited42 Dilkusha Commercial AreaDhaka 1000

," EBL RB Mutual Fund

Auditors'report and financial statementsfor the period from 23 May 2011 to 30 June 2012

S. F. AHMED & COChartered AccountantsHouse 25, Road 13A, Block D, Banani, Dhaka 1213, BangladeshTele hones 880-2 : PABX 989-4346 & 989-4258 Others 881-6467 & 881-510 IFax (880-22: 882-5135Emails:isfacocitechco.netWebsite: www.sfahmedco.org

s. F. AHMED & COChartered Accountants-- Established: 1958

House 25, Road 13ABlock D, BananiDhaka 1213, Bangladesh

Phones: (880-2) 989-4258 & 989-4346Fax: 882-5135E-mails:(i)sfaco@citechco.net

(ii) sfaco@sfahmedco.org

Auditors' Report to the Trustee of EBL NRB Mutual Fund

We have audited the accompanying financial statements of EBL NRB Mutual Fund (the Fund) namely,Statement of Financial Position (Balance Sheet) as of 30 June 2012 and the related Statement ofComprehensive Income (Revenue Account), Statement of Cash Flows and notes thereto for the period from23 May 2011 to 30 June 2012.

Respective responsibilities of management and auditors

The preparation of these financial statements is the responsibility of the management of the Fund inaccordance with generally accepted accounting principles and International Accounting Standards/International Financial Reporting Standards so far adopted by the Institute of Chartered Accountants ofBangladesh as Bangladesh Accounting StandardslBangladesh Financial Reporting Standards. Ourresponsibility is to express an independent opinion on these financial statements based on our audit.

Basis of our audit opinion

We conducted our audit in accordance with International Standards on Auditing as applicable inBangladesh. Those standards require that we plan and perform the audit to obtain a reasonable assurancewhether the financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of financial statements. We believe that our audit provides a reasonablebasis for our opinion.

Opinion

In our opinion, the financial statements prepared in accordance with generally accepted accountingprinciples and International Accounting Standards/ International Financial Reporting Standards so faradopted by the Institute of Chartered Accountants of Bangladesh as Bangladesh AccountingStandards/Bangladesh Financial Reporting Standards give a true and fair view of the state of the Fund'saffairs as of 30 June 2012 and of the resu Its of its operations and its cash flows for the period then endedand comply with the requirements of Securities and Exchange Commission (Mutual Fund) Bidhimala(Rules) 2001, Trust Deed and other applicable laws and regulations.

We further report that:

a. we have obtained all the information and explanations which to the best of our knowledge and beliefwere necessary for the purpose of our audit and made due verification thereof;

b. in our opinion, proper books of account as required by law have been kept by the Fund so far as itappeared from our examination of those books;

1.:. the Statement of Financial Position (Balance Sheet) and Statement of Comprehensive Income (RevenueAccount) along with the notes thereto dealt with by this report are in agreement with the books ofaccount;

d. the investment was made as per Rule 56 of Securities and Exchange Commission (Mutual Fund)Bidhimala (Rules) 2001; and

e. the expenditure incurred and payments were made for the purpose of the Fund's business;

House 25, Road 13A, Block DBanani, Dhaka 1213, BangladeshDated, 13 August 2012

~S. F. AHMED & COChartered Accountants

EBL NRB Mutual Fund

Statement of Financial Position (Balance Sheet) at 30 June 2012

Amounts (Taka)

ASSETS

« r

Marketable securities -at costCorporate bondCash and bank balancesPreliminary and issue expensesOther current assetsTotal Assets

34567

757,255,967179,920,576620,778,70844,074,18511,815,757

1,613,845,193

CAPITAL AND LIABILITIES

CapitalRetained earningsDividend equalization reserveMarket risk reserveCurrent liabilities and provisionsTotal Capital and Liabilities

et Asset Value per UnitAt CostAt Market

8 1,500,000,0002,549,534

30,000,00072,390,2178,905,442

2.69

1,613,845,193

10.7010.22

For EBL NRB Mutual Fund

~.Asset ManagerRACE Management rei.

,"'s~~Bangladesh General Insurance Company Limited

Signed in terms of our report of even date annexed

~S. F. AHMED & COChartered Accountants

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EBL NRB Mutual Fund

Statement of Comprehensive Income (Revenue Account)for the period from 23 May 2011 to 30 June 2012

INCOME

Dividend from investment in sharesProfit on sale of investmentInterest on bank deposits and bondsOther incomeTotal Income

EXPENDITURE

Amortization of preliminary expensesManagement feesAnnual listing feesTrustee feesCustodian feesAudit fee

Other operating expensesTotal ExpenditureLess: Market risk reserveLess: Provision for income tax

Profit for the periodLess: Dividend equal ization reserve

Accumulated profit carried forward

Earnings per unit for the period

ISee annexed notes

Amounts (Taka)

10

9,014,82021,064,003

128,988, I 13128,305

159,195,241

2.5 5,500,7842.8 43,563,208

1,500,0002.9 2,816,8242.10 334,859

34,500

11 505,31654,255,491

2.6 72,390,2172.4

32,549,53430,000,0002,549,534

0.22

For EBL NRB Mutual Fund

Asset ManagerRACE Management PCL

Lt!~VBangladesh General Insurance Company Limited

Signed in terms of our report of even date annexed

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~S. F. AHMED & CO

Chartered Accountants

EBL NRB Mutual Fund

Statement of Cash Flows for the Reriod from 23 Ma 2011 to 30 June 2012

Amounts (Taka)

• r

Cash Flows from Operating Activities:

Dividend incomeInterest on bank deposits and bondsAnnual listing fee

Other advance, deposit and receivableOther incomeOther operating expensesNet Cash from Operating Activities (A)

8,633,075142,783,371

(1,500,000)(4,600,189)

128,306(58,989,327)86,455,236

Cash Flows from Investing Activities:

Value of listed securitiesReceivable from sundry securitiesIssue and preliminary expensesFixed income instruments

et Cash Used in Investing Activities (B)

(818,804,012)82,623,029

(49,574,969)( 179,920,576)(965,676,528)

Cash Flows from Financing Activities:

Capital contributionNet Cash from Financing Activities (C)

et Increase in Cash (D = A+B+C)Opening cash and bank balances (E)Closing cash and bank balances (F = D+E)

1,500,000,0001,500,000,000

620,778,708

620,778,708

"-

For EBL NRB First Mutual Fund

l;2cLuw~TrusteeBangladesh General Insurance Company Limited

Asset ManagerRACE Management PCL

Signed in terms of our report of even date annexed

House 25, Roa A, Block DBanani. Dhaka 1213, Bangladesh

Dated, 13 August 2012

~S. F. AHMED & COChartered Accountants

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EBL NRB Mutual Fund

Notes to financial statements for the period from 23 May 20 II to 30 June 2012

IGeneral II. Legal Status and Nature of Business

EBL NRB Mutual Fund (hereinafter called as "Fund") was established under a Trust Deed signed on19 Augest 20 I 0 between Eastern Bank Limited as a 'Sponsor' and the Bangladesh General InsuranceCompany Limited (BGIC) as a "Trustee". The Fund was registered under the Trust Act 1882 andsubsequently listed with the Securities and Exchange Commission (SEC) on 30 August 20 I0 underthe Securities and Exchange Commission (Mutual Fund) Bidhimala (Rules) 2001. The operations ofthe Fund was commenced on 23 May 2011 by listing with Dhaka and Chittagong Stock Exchanges.

As provided in Trust Deed, RACE Management PCL is the Manager of the Fund. RACE ManagementPCL was incorporated as a private limited company under Companies Act 1994 on March 2008 withan authorised and a paid-up capital of Taka 5 crore.

EBL NRB Mutual Fund is a close-end Mutual Fund of ten years' tenure.The objectives of the Fundare to provide regular dividend to the investors by investing the Fund both in capital and moneymarket instruments.The Fund consists of 150,000,000 units of Taka 10 each. The units of the Fund aretransferable.

2. Significant Accounting Policies

2.1 Basis of preparation of accounts

These financial statements have been prepared under historical cost convention in accordancewith generally accepted accounting principles as laid down in the International AccountingStandards (TASs)/Tnternational Financial Reporting Standards (IFRSs), applicable to the Fund sofar adopted by the Institute of Chartered Accountants of Bangladesh as Bangladesh Accounting

". Standards (BASs)/Bangladesh Financial Reporting Standards (BFRs). The disclosures ofinformation made in accordance with the requirements of Trust Deed, Securities and ExchangeRules 1987, Securities and Exchange Commission (Mutual Fund) Bidhimala (Rules) 2001 andother applicable Rules and regulations.

2.2 Presentation of financial statements

The fund was registered on 19 August 2010 under the Trust Act, 1882 and subsequently on 23May 20 II listed with Stock Exchanges and accordingly transactions started. There were notransactions except application for Il'O, fund raised through issuance of unit and preliminaryexpenses during the period from 19 Augest 20 10 to 23 May 20 I I. Therefore, no financialstatements have been prepared for that period. However, the financial statements are preparedand presented covering the period from 23 May 20 I I to 30 June 2012 and the transactionsbefore the listing date where duly accounted for.

2.3 Investment

All purchases and sales of securities that require delivery within the time-frame established byregulation or market convention are recognised at the date of trading i.e. the date on which theFund cornm its to purchase or sell the investment.

Bonus entitlements, if any, are not accounted for as income rather included in the portfolio toreduce the average cost.

2.3.1 Valuation of investment

Listed securities are valued at average closing quoted market prices prevailed as of 30June 2012 on an aggregate portfolio basis.

Investment is recorded in the Financial position at cost.

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EBL NRB Mutual Fund

Notes to financial statements for the period from 23 May 20 II to 30 June 2012

2.4 Taxation

The income of the Fund is exempted from Income Tax as per SRO No. 333-Act/IncomeTax/20ll dated 10 November 2011, under Section 44(4) clause (b) of Income Tax Ordinance,1984; hence no provision for tax is required.

2.5 Amortization of prel im inary expenses

Preliminary and issue expenses represent expenditure incurred prior to commencement ofoperations and establishment of the Fund. These costs are amortised within ten years' tenureafter adjusting interest income from escrow accounts as per trust deed and Securities andExchange Commission (Mutual Fund) Bidhimala (Rules) 2001.

2.6 Market risk reserve

Investment has been valued on aggregated portfolio basis and provision is required to be madeon portfolio value of investments as of30 June 2012 which comes to Taka 72,390,217. Detailsare in note 3.1.

2.7 Dividend policy

As per Rule 66 of Securities and Exchange Cornrn ission (M utual Fund) Bidhimala (Rules) 2001,the Fund is required to distribute profit in the form of dividend to its unit holders an amountwhich shall not be less than 70% of annual profit during the year, net of provisions.

2.8 Management fee

RACE Management PCL, the management company of the Fund is to be paid an annualmanagement fees on weekly average net asset value (NA V) as per Rule 65 of Securities andExchange Commission (Mutual Fund) Bidhimala (Rules) 2001 and as per Trust Deed @ 2.50%up to 5 crores, 2.00% on next 20 crores, 1.50% on next 25 crores and 1.00% on next remainingbalance of the weekly average NA V per annum.

..

2.9 Trustee fee

The Trustee is entitled to get an annual Trusteeship fee @ 0.10% of the net asset value perannum, payable semi-annually in advance basis during the entire life of the Fund as per TrustDeed.

2.10 Custodian fee

BRAC Bank Limited is entitled to receive a safekeeping fee @ 0.07% on the balance ofsecurities calculated on average month end value per annum as a custodian.

2. I I Registration and other annual fee to SEC

An amount of Taka 3,000,000, which is 0.20% of unit value, was paid as registration fee.Add itionally, annua I fee of Taka I,500,000 (at the rate of O. 10% of the fund size) was also paidto SEC as per Rules 10 and 11 of Securities and Exchange Commission (Mutual Fund)Bidhimala (Rules) 2001.

2.12 Revenue recognisation

Gains/losses arising on sale of investment are included in the Revenue Account on the date atwhich the transaction takes place. Dividend and interest income are recognised as per BAS-18and Securities and Exchange Commission (Mutual Fund) Bidhimala (Rules) 2001.

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EBL NRB Mutual Fund

otes to financial statements for the eriod from 23 Ma 20 II to 30 June 2012

IBalance Sheet

3. Marketable Securities - At Cost

Equity shares (note 3.1)

3.1 Sector-wise break up of investment in shares are as follows:

Amounts (Taka)

757,255,967

757,255,967

I Sector/categoryNumber of Amounts in Taka

shares Cost I Market value r Difference

BankCementCorporate BondFood and AlliedFuel and PowerInsuranceMutual FundsNBFIPh arm aServices and Real EstateTanneryTelecommunicationTextile

2,775,46532,000

66517,800

2,073,742351,225

15,617,000124,83595,44733,000

171,100491,70038,000

131,839,3879,702,353

632,86810,953,955

182,984,52657,548,935

151,095,10663,536,21868,915,9272,822,041

51,720,28723,976,341

1,528,025

106,773,9067,638,400

623,43810,687,120

165,916,54449,382,158

135,828,30048,794,39972,457,339

1,280,40045,881,46038,561,360

1,040,927

(25,065,481)(2,063,953)

(9,430)(266,835)

(17,067,981)(8,166,777)

( 15,266,806)(14,741,818)

3,541,412(1,541,641 )(5,838,827)14,585,019

(487,098)21,821,979 757,255,967 684,865,750 (72,390,217)

4 Corporate Bonds

Bank Asia Zero Coupon BondTrust Bank Ltd Bond

5. Cash and Bank Balances

Fixed depositsShort term deposits with:

Sponsor account- Eastern Bank Ltd (AIC-1011320140134)Escrow account- Eastern Bank Ltd (AIC-O 10 I 1320000020)Sponsor account- AB Bank Limited(AIC -4005779046-430 )Sponsor account- The Premier Bank Ltd (AIC-14913500000006)Sponsor account- Eastern Bank Ltd (AIC-1011360242473)IPO-BDT account- Eastern Bank Ltd-(A/C-1 011320140495)IPO-USD account- Eastern Bank Ltd (A/C-I013050140461)IPO-GBP account- Eastern Bank Ltd (AIC-I013060140483)IPO-EURO account- Eastern Bank Ltd (A/C-1 0 13070 140472)

6. Preliminar and Issue Ex enses

Total preliminary expensesLess: Interest on escrow account

Less: Amortization preliminary and issue expenses

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19,920,576160,000,000179,920,576

216,787,500

70,911,775406,725478,248

281,422,54250,254,655

227,263275,000

5,00010,000

620,778,708

70,203,12820,628,15949,574,9695,500,784

44,074,185

EBL NRB Mutual Fund

Notes to financial statements for the period from 23 May 2011 to 30 June 2012Amounts (Taka)

7 Other Current Assets

Receivable from sale of marketable securitiesDividend receivablesInterest receivablesOthers advance and deposits

9226,832,90 I

381,7454,600,189

11,815,757

8 Ca ital

150,000,000 units of Taka 10 each fully paid 1,500,000,000

9 Current Liabilities and Provisions

Payable to sundry securitiesManagement feesCustodian feesAudit feesWithholding Income tax payablesWithholding VAT payablesPublication expensesPreliminary expenses

11,9038,122,837

334,85934,50084,08067,263

100,000150,000

8,905,442

I Revenue Account I10. Interest on Bank Deposits and Bonds

Interest onShort term depositsFixed depositsCorporate bonds

56,767,71562,657,5009,562,898

128,988,1 13

Bank chargesOther expenses

142,763362,553505,316

12 Others

12.1 These notes form an integral part of the annexed financial statements and accordingly are to be readin conjunction therewith.

12.2 Figures in these notes and annexed financial statements have been rounded off to the nearest Taka.

for EBL NRB Mutual Fund

~.Asset ManagerRACE Management PCL

-';.~~{r~lsteeBangladesh General Insurance Company Limited

Dhaka, BangladeshDated, 13 August 2012

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