OF EBL FIRST MUTUAL FUND FOR THE YEAR ENDED 30J UNE 2013 ~~.09f. ~I~~-=i ~~ ~ t > t r : 1 " ~ ~ I~,;i(;; i (; J1 " - M.J. ABEDIN & CO CHARTERED ACCOUNTANTS TelephoneOff: +880-2-8629771, 9666508 Fax: +880-2-9675340 E-mail: audit @mjabedin.com mjabedinbd@gmail.com WebSit e : www.mjabedin.com Nat ional Plaza (3rd Floor) 109, Bir Ut t am c.a. Dat t a Road, Dhaka-1205, Bangladesh AUDITORS' REPORT TO THE TRUSTEE OF EBL FIRST MUTUAL FUND Wehave audit ed t he accompanying financial st at ement s of EBL First Mut ual Fund (t he Fund) namely, BalanceSheet at 30J une 2013and t he relat ed Profit and Loss Account , St at ement of Changes in Equit y, Cash Flow St at ement and not es t heret ofor t heyear ended 30J une2013. Management 's responsibilit y for t he financial st at ement s Management is responsible for t he preparat ion and fair present at ion of t hese financial st at ement s and for such int ernal cont rol as management det ermines isnecessary t o enable t hepreparat ion of financial st at ement s t hat are freefrommat erial misst at ement , whet her due t ofraud or error. Audit ors' responsibilit y Our responsibilit y is t o express an opinion on t hese financial st at ement s based on our audit . We conduct ed our audit in accordance wit h Bangladesh St andards on Audit ing (BSAs). Those st andards require t hat we comply wit h et hical requirement s and plan and perform t heaudit t o obt ain reasonable assurance about whet her t hefinancial st at ement s arefree frommat erial misst at ement . An audit involves performing procedures t o obt ain audit evidence about t he amount s and disclosures in t he financial st at ement s. The procedures select ed depend on t he audit or's judgment , including t he assessment of t he risks of mat erial misst at ement of t he financial st at ement s, whet her due t o fraud or error. In making t hose risk assessment s, t he audit or considers int ernal cont rol relevant t o t he ent it y's preparat ion and fair present at ion of t he financial st at ement s in order t o designaudit procedures t hat are appropriat e in t hecircumst ances, but not for t he purpose of expressing an opinion on t he effect ivenessof t he appropriat eness of account ing policies used and t he reasonableness of account ing est imat es made by management , as well as evaluat ing t heoverall present at ion of t hefinancial st at ement s. Webelievet hat t heaudit evidence wehave obt ained issufficient and appropriat e t oprovide abasis for our audit opinion. Opinion Inour opinion, t hefinancial st at ement s prepared inaccordance Int ernat ional Account ing St andards/ Int ernat ional Financial Report ingSt andards so far adopt ed by t he Inst it ut e of Chart ered Account ant s of Bangladesh as Bangladesh Account ing St andards/Bangladesh Financial Report ing St andards giveat rueand fair view of t hest at e of t heFund's affairs as at 30J une 2013and of t heresult s of it s operat ions and it s cash flows for t heperiod t hen ended and comply wit h t he requirement s of BangladeshSecurit ies and Exchange Commission (Mut ual Fund) Bidhimala (Rules) 2001, Trust Deed and ot her applicable lawsand regulat ions. Wefurt her report t hat : (a) wehave obt ained all t he informat ion and explanat ions which t o t he best of our knowledge and belief were necessary for t hepurpose of our audit and made due verificat ion t hereof; (b) inour opinion, proper books of account as required bylaw have been kept by t heFund so far as it appeared fromour examinat ion of t hosebooks. (c) t heBalanceSheet and Profit and LossAccount along wit h t henot es t heret o dealt wit h by t his report are inagreement wit h t hebooks of account . (d) t heinvest ment was made as per Rule56of Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Bidhirnala (Rules)2001and (e) t heexpendit ure incurred and payment s made werefor t hepurpose of t heFund's business for t heperiod. Dat ed, Dhaka 13August 2013 M. J . ABEDIN &CO Chart ered Account ant s An independent member firm of. MOORE STEPHENS INTERNATIONAL LIMITED I EBL FIRST MUTUAL FUND St at ement of Financial Posit ion ( Balance Sheet ) As at 30 J une 2013 I Not es I Amount in Taka 30-J un-13 II 30-J un-12 ASSETS List ed Securit ies - at cost 3.00 682,687,834 649,682,522 Non-List ed Securit ies - at cost 4.00 119,713,637 74,991,414 Ot her Receivables 5.00 5,655,796 5,006,983 Advances and Deposit s 6.00 2,557,605 6,331,106 Cash and Cash Equivalent s 7.00 443,935,614 569,219,790 Preliminary and Issue Expenses 8.00 20,599,409 24,035,257 Tot al Asset s 1,275,149,895 1,329,267,072 eAPIT AL AND LIABILITIES Share Holders Equit y 1,216,547,466 1,262,442,093 Capit al Fund 9.00 1,000,000,000 1,000,000,000 Dividend Equalizat ion Reserve 50,000,000 50,000,000 Market Risk Reserve 102,721,485 108,419,844 Ret ained Earnings 63,825,981 104,022,249 Current Liabilit ies and Provisions 10.00 58,602,429 66,824,979 Tot al Capit al and Liabilit ies 1,275,149,895 1,329,267,072 Net asset value (NAV) per unit : At Cost At Market Value 11.00 12.00 12.17 11.14 12.62 11.54 The accompanying not es form an int egral part of t his financial st at ement . Trust ee Asset Manager As per our separat e report of even dat e annexed Dat ed, Dhaka 13August 2013 M. J . ABEDIN & CO Chart ered Account ant s 2 EBL FIRST MUTUAL FUND St at ement of Comprehensive Income ( Revenue Account ) For t he year ended 30J une 2013 Amount in Taka 2013 INCOME Dividend Income Int erest on Bank Deposit s and Bonds Net Income on Sale of Market able Securit ies Tot al Income 12,777,280 60,784,109 101,822,085 13,368,551 63,683,455 158,666 13.00 14.00 175,383,474 77,210,672 EXPENSES 16,312,171 20,063,144 3,356,600 3,376,931 1,190,000 1,190,000 12,117 443,089 1,000,000 1,000,000 535,745 759,357 249,621 228,113 49,150 31,350 67,544 64,245 332,351 1,224,248 Management Fee Amort izat ion of Preliminary &Issue Expenses Annual List ing Fee Wit h BSEC and St ock Exchanges CDBL Expenses Trust ee Fee Cust odian Fee Publicat ion Expenses Audit Fee Including Vat Bank Charges Ot her Expenses Tot al Expenses Provision against Invest ment -adjust ment / (expense) Net Profit before Tax Income Tax expenses Net Profit aft er Tax Transferred t o Ret ained Earnings (23,105,299) 5,698,359 (28,380,477) (53,519,844) 93,483,153 5,200,000 59,803,732 59,803,732 98,683,153 Earnings Per Unit 0.99 15.00 0.60 Theaccompanying not es form an int egral part of t his financial st at ement . Trust ee Asset Manager As per our separat e report of even dat e annexed Dat ed, Dhaka 13August 2013 M. J . ABEDIN & CO Chart ered Account ant s 3 EBL FIRST MUTUAL FUND St at ement of Changes in Equit y For t he year ended 30J une 2013 Amount in Taka Provision Capit al Ret ained Against Dividend Tot al Part iculars Fund Earnings Erosion of Equalizat ion Equit y Market able Reserve Invest ment s Balanceat 30J une 2012 1,000,000,000 104,022,249 108,419,844 50,000,000 1,262,442,093 Dividendfor 2011-12 (100,000,000) (100,000,000) Earningsduring t he year 59,803,732 59,803,732 DividendEqualizat ion Reserve Market RiskReserve (5,698,359) 5,698,359 Balanceat 30J une 2013 1,000,000,000 63,825,981 102,721,485 50,000,000 1,216,547,466 4 EBL FIRST MUTUAL FUND St at ement of cash flows for t he year ended 30J une 2013 Amount in Taka 2013 II 2012 A. Cash flows from Operat ing Act ivit ies Int erest on Bank Deposit s 63,461,443 60,700,774 Dividend Income 11,901,941 13,413,637 Advances and Deposit s 3,773,502 720,972 Expenses (27,892,000) (26,134,241) Net cash from Operat ing Act ivit ies 51,244,886 48,701,142 B . Cash flows from Invest ing Act ivit ies Invest ment inShares &Securit ies (31,806,839) 127,507,784 Advance for IPO 0 Invest ment in Bond (44,722,223) (9,991,414) Net Cash out flows from Invest ing Act ivit ies (76,529,062) 117,516,370 C. Cash flows from Financing Act ivit ies Dividend paid (100,000,000) (146,416,250) Net cash used in Financing Act ivit ies (100,000,000) (146,416,250) Net cash flows (A+B+C) (125,284,176) 19,801,261 Cash&Cash Equivalent s at t he Beginning of t heperiod 569,219,790 549,418,528 Cash & Cash Equivalent s at t he end of t he period 443,935,614 569,219,790 5 EBL FIRST MUTUAL FUND Not es t o t he Financial St at ement s As at and for t he year ended 30J une 2013 1.00 Int roduct ion EBL First Mut ual Fund (here-in-aft er referred t o t he "Fund") was const it ut ed t hrough a Trust Deed signed on 05 April 2009 bet ween East ern Bank Limit ed (EBL) as 'Sponsor' and t he Invest ment Corporat ion of Bangladesh (ICB) as "Trust ee" under t he Trust Act 1882 and Regist rst ion Act 1908. The Fund was regist ered wit h t he Bangladesh Securit ies and Exchange Commission (BSEC) on 19 April 2009 under t he Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Rules 2001. The operat ions of t he Fund was commenced on 19August 2009by list ing wit h Dhaka and Chit t agong St ock Exchanges. The Invest ment Corporat ion of Bangladesh (ICB) is cust odian of t he Fund and RACE Management PCL manages t he operat ion of t he Fund as Fund Manager. 1.01 Closure of Books of Account of t he Fund TheFund has been closing it s books of account as at 30J une each year. 1.02 Object ives The object ive of EBL First Mut ual Fund is t o earn superior risk adjust ed ret urn by maint aining a diversified invest ment port folio and provide at t ract ive dividend payment s t o t heunit holders. 2.00 Significant Account ing Policies 2.01 Basis of Account ing These financial st at ement s have been prepared under hist orical cost convent ion in accordance wit h t he Int ernat ional Account ing St andards (IASs)jInt ernat ional Financial Report ing St andards (IFRSs), applicable t o t he Fund so far adopt ed by t he Inst it ut e of Chart ered Account ant s of Bangladesh as Bangladesh Account ing St andards (BASs)jBangladesh Financial Report ing St andards. The disclosures of informat ion made in accordance wit h t he requirement s of Trust Deed, Securit ies and Exchange Rules 1987 and ot her applicable Rules and regulat ions. 2.02 Market able Invest ment (a) Invest ment is recorded in t he Balance Sheet at cost . (b) Value of list ed securit ies is disclosed at closing quot ed market prices prevailed at 30 J une 2013 on an aggregat e port folio basis as per requirement of Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Bidhimala (Rules) 2001. 6 2.03 Market Risk Reserve The difference bet ween cost of invest ment and t he value of invest ment on agreegat ed port folio basis is shown as Market Risk Reserve. For 2012-2013Market Risk Reserve st ood at Tk. 102,721,485. 2.04 Dividend Equalizat ion Reserve The fund maint ains Dividend Equalizat ion Reserve by appropriat ing a port ion of Ret ained Earning. 2.05 Revenue Recognit ion a) Gains/losses arising on sale of invest ment are included in t he Profit and Loss Account on t he dat e at which t he t ransact ion t akes place. b) Cash dividend is recognised when t he shareholders' right t o receive payment is est ablished. c) Int erest income isrecognised on t ime proport ion basis. 2.06 Taxat ion As per SRO No. 333/Rule/Income Tax/2011 t he income of mut ual fund has been exempt ed fromt ax. 2.07 Preliminary and Issue Expenses Preliminary and issue expenses represent expendit ure incurred prior t o commencement of operat ions and est ablishment of t he Fund. These cost s are amort ised wit hin t en years' t enure asper Trust Deed. 2.08 Dividend Policy Pursuant t o t he Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Rules 2001, t he Fund is required t o dist ribut e it s profit by way of dividend eit her in cash or bonus unit s/ st ock dividend ( reinvest ment ) or bot h t o t he holders of t he unit s aft er t he closing of t he annual account s an amount t hat shall not be less t han sevent y percent (70%) of annual profit earned during t he year. 2.09 Management Fee Management fee is charged as per t he Trust Deed and under t he proVISIOns of t he Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Rules 2001. 7 2.10 Trust ee Fee TheTrust ee is ent it led t o get an annual Trust eeship fee of Taka 1,000,000 only payable semi- annually during t he lifeof t he fund. 2.11 Cust odian Fee Invest ment Corporat ion of Bangladesh (ICB) is ent it led t o receive cust odian fee @ 0.10%on t hebalance of securit ies calculat ed on average mont h end value each year. 2.12 Annual Fee t o BSEC The Fund is required t o pay annual feeeach year @ 0.10%of t he fund size t o t he Bangladesh Securit ies and Exchange Commission (BSEC) in t erms of t he Bangladesh Securit ies and Exchange Commission (Mut ual Fund) Rules 2001. 2.13 Earnings Per Unit Earnings per unit has been calculat ed in accordance wit h Bangladesh Account ing St andard - 33"Earnings per Share" and shown on t he face of profit &loss account . 2.14 General Figures appearing in t hese financial st at ement s have been rounded off t o nearest Taka. 8 3.00 List ed Securit ies - at cost Ordinary Shares Sect or/Cat egory Bank Cement Corporat e Bond Engineering Foodand Allied Fuel and Power Insurance Miscellaneous IT Mut ual Funds BFI Pharma Tannery Telecommunicat ion Text ile Servicesand Real Est at i Travel &Leiser 1,539,453 207,266 1,306 252,285 9,050 1,923,880 54,585 6,552 9,787 15,465,550 725,116 706,605 50,900 34,800 14,143 9,225 421,480 Cost 64,358,695 36,698,134 977,672 35,548,825 4,376,686 129,861,805 8,567,409 2,798,699 479,657 196,304,204 87,489,665 58,300,589 18,433,729 3,097,880 723,348 1,296,388 33,374,449 Amount s in Taka as at 30-J un-13 II 30-J un-12 682,687,834 649,682,522 682,687,834 649,682,522 Amount in Taka Market Difference Cost -2012 44,640,229 (19,718,466) 64,358,276 41,107,518 4,409,384 36,698,134 1,090,510 112,838 1,692,589 21,029,747 (14,519,078) 35,548,825 9,640,965 5,264,279 4,376,686 108,333,650 (21,528,155) 129,861,805 6,529,864 (2,037,545) 9,697,372 2,025,944 (772,755) 2,798,653 204,548 (275,109) 479,657 164,002,641 (32,301,563) 195,809,858 70,397,007 (17,092,658) 87,486,405 39,714,198 (18,586,391) 57,322,917 16,329,110 (2,104,619) 18,433,729 6,225,720 3,127,840 3,097,880 339,072 (384,276) 723,348 264,758 (1,031,630) 1,296,388 48,090,868 14,716,419 579,966,349 (102,721,485) 649,682,522 21,431,983 4.00 Non-List ed Securit ies-at cost PrimeBank Bond BankAsia Zero Coupon Bond Farmers Bank Lt d. 5.00 Ot her Receivables This ismade-up as follows: a) Dividend receivables ACI Formulat ion Lt d. ACI Lt d. Pubali Bank Lt d. PRIMETEX KPCL Unique Hot el Bat aShoe Co BD Lt d. BGIC Confidence Cement MJ L BD. LTD. Padma Oil Co. Lt d. Pragat i Insurance Lt d. Reckit t Benkiser BD Lt d. Renat a Lt d Square Text ile lt d. b) Accrued Int erest Prime Bank Bond Bank Aisa Bond 682,687,834 65,000,000 9,991,414 44,722,223 65,000,000 9,991,414 119,713,637 74,991,414 2,301,742 835,133 83,250 55,500 46,320 31,600 121 - 11,000 - 34,875 - 1,053,700 - - 177,450 - 2,116 2,760 2,300 1,036,840 540,960 12,500 12,500 1,295 2,355 17,250 9,200 222 - 1,609 1,152 3,254,387 3,032,375 2,949,041 305,346 9 as at Amount s in Taka 30-J un-13 II 30-J un-12 99,667 c) Ot her Receivable for Sale Proceeds of Securit ies EBL Securit ies PHP St ocks and Securit ies 1,139,475 861 1 98,806 L-_-:-::-::-::--::-:-::c-' 5,655,796 1,122,278 17,196 5,006,983 6.00 Advances and Deposit s Advance Securit y deposit Advance BSEC Annual Fees Advance DSE Annual Fees Advance CSE Annual Fees Advance Income Tax 500,000 1,000,000 47,500 47,500 962,605 2,557,605 7.00 Cash and Cash Equivalent s Bankbalance wit h SND account Bankbalance wit h Dividend account FixedDeposit Receipt 379,711,427 64,224,187 443,935,614 8.00 Preliminary &Issue Expenses Opening Balance Int erest income from escrow account Amort izat ion of Preliminary Expenses 500,000 47,500 47,500 5,736,106 6,331,106 392,968,881 63,583,750 112,667,159 569,219,790 24,035,257 27,413,412 (79,248) (1,224) (3,356,600) _-----'(......:3,_37_6"-, 9 _ 3 1 ...L ) 20,599,409 24,035,257 Theunit s are list ed wit h t he Dhaka &Chit t agong St ock Exchanges and quot ed at Tk.9.50 and'Tk.9.50 respect ively on balance sheet dat e. 1,216,547,466 1,262,442,093 100,000,000 __ 10_0-,-,0--:0-=,,0'--.,.00-::-0 12.17 12.62 1,113,825,981 1,154,022,295 100,000,000 _---=.10c:....:0c.:...:,0c..:..00..:..:.,0c:....:0c..:..0 11.14 11.54 9.00 Capit al Fund Paidup capit al 100,000,000unit s @ Tk 10 each fully paid in cash 1,000,000,000 10.00 Current Liabilit ies and Provisions Management Fee Uncleared Dividend Cust odian Fee Audit Fee COBLCharges Payable t o Sundry securit ies Wit hholding Taxes (V AT & TAX) Payable Publicat ion Expenses Post age &Currier expense 17,400 56,085,337 535,745 36,000 142,748 1,654,965 100,000 30,234 58,602,429 11.00 Net Asset Value per Unit at cost Net Asset Value umber of Unit s NAV Per Unit at Cost 12.00 Net Asset Value per unit at market value et asset value umber of unit s AV per unit at market value 10 1,000,000,000 63,583,750 759,357 27,000 9,232 142,748 2,172,657 100,000 30,234 66,824,979 ~~~~- - I I I I I I I Amount in Taka I I for t he year I 2013 II 2012 13.00 Int erest on Bank Deposit s and Bonds Int erest Income from SND Account Int erest Income from Fixed Deposit Receipt Int erest Income from Corpot at e Bond 53,855,000 2,131,445 7,697,010 63,683,455 14.00 Net Income on Sale of Market able Securit ies Bank Ceramic Corporat e Bond Food and Allied Fuel and Power Insurance Miscellaneous Pharma Text ile 158,666 158,666 15.00 Earnings Per Unit Net profit for t he year Number of Unit s Earnings Per Unit 59,803,732 100,000,000 16.00 Post Closing Event s Following event s have occurred since t he balance sheet dat e: (a) The Trust ee recommended 10%dividend in t he form of Re-Invest ment unit s. 27,891,861 24,110,867 8,781,382 60,784,109 20,636,956 1,002,675 985,200 2,898,023 9,243,396 19,669,142 433,504 42,022,239 4,930,951 101,822,085 98,683,153 100,000,000 0.60 0.99 (b) Except for t he fact st at ed above, no circumst ances have arisen since t he balance sheet dat e which would require adjust ment t o, or disclosure in, t he financial st at ement s or not es t heret o. 17.00 Comparat ive Figures Cert ain comparat ive figures have been reclassified from st at ement s previously present ed t o conform t ot he present at ion adopt ed during t he year ended 30J une 2013 18.00 Approval of t he Financial St at ement s These financial st at ement s were aut horized for issue in accordance wit h a resolut ion of t he Fund's board of Trust ee on 13 August , 2013. ~ Ih~ Trust ee Asset Manager Dat ed, Dhaka 13August 2013 11 --