BRAC EPL Investments Limited

WW Tower (Level 9)
68 Motijheel Commercial Area
Dhaka 1000

BRAC EPL Investments Limited

––––––––––––––––––––––––
Unaudited Financial Statements
for the period ended 31 December 2015
 BRAC EPL Investments Limited
Statement of Financial Position
As at 31 December 2015

2015 2014
Assets Notes Taka Taka
Non-current assets
Property, plant and equipment 5 14,819,841 21,284,245
Intangible assets 6 - -
Investment in associate company 7 15,369,427### 14,879,943
Investment in unquoted securities 8 -### 954,795
Deferred tax assets 9 9,755,465 12,387,979
39,944,732 49,506,963
Current assets
Account receivables 10 86,475,934 47,857,744
Inter-company receivables 11 3,132,142 3,427,553
Other receivables 386,978 417,615
Investment in quoted securities 12 61,762,282 192,698,440
Advance income tax 13 4,632,937
### 6,432,844
Loans and advances to customers 14 3,824,643,861 3,769,646,105
Accrued interest and management fees receivable 15 566,121,410 863,047,060
Advances, deposits and prepayments 16 4,775,780
### 5,045,163
Cash and cash equivalents 17 60,062,868 19,531,386
4,611,994,191 4,908,103,910
Total assets 4,651,938,924 4,957,610,872

Equity and Liabilities

Shareholders' equity
Share capital 18 585,000,000 585,000,000
Share premium 436,825,951 436,825,951
Retained earnings (620,577,193) 37,466,827
Shareholders' equity 401,248,758 1,059,292,778

Non-current liabilities
Finance lease obligations -net of current portion 19 - -
Current liabilities
Finance lease obligations - current portion 19 - 61,916
Customer deposits 20 83,432,920 59,418,979
Bank overdrafts 21 2,320,943,428 2,444,519,524
Short term loan 22 1,047,059,353 690,000,000
Revolving time loan 23 250,000,000 240,000,000
Account payables 24 15,089,800 17,618,617
Other liabilities 25 528,767,338 426,694,462
Provision for taxation 26 1,028,410 17,200,000
Inter-company payable to BRAC EPL Stock Brokerage Limited 4,368,917 2,804,595
4,250,690,166 3,898,318,094
Total equity and liabilities 4,651,938,924 4,957,610,872
These financial statements should be read in conjunction with annexed notes

Chairman Director Chief Executive Officer

 BRAC EPL Investments Limited
Statement of Comprehensive Income
For the year ended 31 December 2015

2015 2014
Notes Taka Taka
Revenue
Interest income from margin loan 120,074,125 614,643,530
Interest expenses 27 (447,442,970) (481,011,747)
Net interest income (A) (327,368,845) 133,631,783

Fee and commission income 28 99,483,400 128,183,763

Fee and commission expenses 29 (16,607,458) (33,093,982)
Net Fee and commission income (B) 82,875,942 95,089,781

(Loss)/gain from investment in securities 30 (10,991,629) (23,708,279)

Other operating income 31 3,035,256 3,783,664
Net (loss)/gain from investment in securities (C) (7,956,373) (19,924,615)
Total operating income (A+B+C) (252,449,276) 208,796,949

Operating expenses 32 (112,789,421) (129,833,701)

Depreciation 5&6 (10,437,075) (16,154,198)
Operating profit (D) (375,675,772)
### 62,809,050
Finance income 1,093,892 1,262,522
Financial expenses 33 (890,927) (1,571,914)
Net finance income (E) 202,965 (309,392)
Share of profit of equity in associate company (F) 489,484
### 538,172
Impairment loss on investment in unquoted securities (G) (954,795) (1,545,205)
Profit before provisions (D+E+F+G) (375,938,118) 61,492,625
Provision for loans and advances 25.1 (260,000,000) (278,572,688)
Profit/(loss) before tax (635,938,118) (217,080,063)
Tax expenses
Current tax:
Prior year taxes (18,444,977) -
Current year taxes 26 (1,028,410) (17,200,000)
Deferred income tax 9 (2,632,515) 4,248,324
(22,105,902) (12,951,676)
Net profit/(loss) after tax (658,044,020) (230,031,739)
These financial statements should be read in conjunction with annexed notes
 BRAC EPL Investments Limited
Statement of Changes in Equity
For the year ended 31 December 2015

Retained
Particulars Share capital Share premium
earnings

Balance as on 1 January 2014 585,000,000 436,825,951 267,498,566

Net loss for the year ended 2014 - - (230,031,739)
Balance as on 31 December 2014 585,000,000 436,825,951 37,466,827
Net loss for the period ended 31 December 2015 - - (658,044,020)
Balance as on 31 December 2015 585,000,000 436,825,951 (620,577,193)
Amount in Taka

Total

1,289,324,517
(230,031,739)
1,059,292,778
(658,044,020)
401,248,758
 BRAC EPL Investments Limited
Statement of Cash Flows
For the year ended 31 December 2015
2015 2014
Taka Taka
A. Operating activities
Net profit before tax (635,938,118) (217,080,063)
Add: Items not involving in movement of cash:
Depreciation on property, plant and equipment 10,437,075 16,050,031
Depreciation of intangible asset - 104,167
Gain on disposal of property, plant and equipment (651,386) (20,000)
Finance charge - lease 2,504 36,404
Bad debt expenses 10,274,104 10,833,009
Fair value adjustments for fall in values of investment in securities (10,173,850) 22,246,029
Share of profit of equity in associate company (489,484) (538,172)
Impairment loss on investment in unquoted securities 954,795 1,545,205
10,353,758 50,256,673
Income tax paid (33,845,069) (97,547,144)
Operating (loss)/profit before changes in working capital (659,429,430) (264,370,534)
Changes in working capital :
(Increase)/decrease in loan and advances to customers (54,997,756) (99,868,875)
(Increase)/decrease in accrued interest and mgt. fees receivable 296,925,650 (388,092,763)
Increase in account receivables (48,892,294) 131,073,991
Decrease in advance, deposits and prepayments 269,383 5,320,610
Increase in inter-company receivable 295,411 (1,321,141)
Decrease/(increase) in other receivables 30,637 596,125
Increase in customer deposits 24,013,941 19,997,702
(Decrease)/increase in account payables (2,528,817) (36,762,282)
Increase in inter-company payable 1,564,322 747,304
(Increase)/decrease in other liabilities 102,072,876 214,860,615
318,753,353 (153,448,714)
Net cash (used)/from operating activities (A) (340,676,077) (417,819,248)

B. Cash flows from Investing activities:

Acquisition of property, plant and equipment (4,952,786) (155,203)
Disposal of property, plant and equipment 1,631,500 20,000
Purchase of Investment securities 141,108,628 (180,229,361)
Net cash used in investing activities (B) 137,787,342 (180,364,564)

C. Cash flows from Financing activities

Receipt of bank overdraft (123,576,096) 257,648,651
Receipt/(repayment) of short term loans 357,059,353 90,000,000
Receipt of revolving time loan 10,000,000 240,000,000
Capital lease obligation paid (63,040) (378,240)
Net cash from/(used) in financing activities (C) 243,420,217 587,270,411
Net decrease in cash and cash equivalents (A+B+C) 40,531,482 (10,913,401)
Cash and cash equivalents at the beginning of the year 19,531,386 30,444,789
Cash and cash equivalents at the end of the year 60,062,868 19,531,388
 BRAC EPL Investments Limited
Notes to the Financial Statements
For the year ended 31 December 2015

1.0 Background and legal status

BRAC EPL Investments Limited (hereinafter referred to as "the Company" or BEIL ) was
incorporated in Bangladesh on 18 April 2000 as a private limited company under the Companies
Act 1994 initially in the name of Equity Partners Limited, the name of which was changed to BRAC
EPL Investments Limited on 4 October 2009. BRAC Bank Limited acquired 51% of its equity in
August 2009 and a further 25% in May 2011. On 11 February 2010 a new Merchant Banker
Registration Certificate was issued in favor of BRAC EPL Investments Limited which allows the
organization to perform the various activities including issue management, underwriting and
portfolio management. The registered office of the Company is located at WW Tower, 68 Motijheel
C/A, Dhaka.

1.1 Nature of business

BEIL delivers a whole range of investment banking services including traditional merchant banking
activities such as issue management, underwriting and portfolio management. The Company also
delivers value-added services such as wealth management, corporate advisory and corporate
finance.

2.0 Basis of preparation of financial statements

2.1 Statement of compliance
The financial statements of the Company have been prepared on going concern basis under the
historical cost convention in accordance with Bangladesh Financial Reporting Standards (BFRSs)
and Bangladesh Accounting Standards (BASs), the Companies Act 1994 and other applicable laws
and regulations.
2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except for investments in
quoted shares which have been measured at "Marked to Market" in accordance with BAS 39:
Financial Instruments: Recognition and Measurement.
2.3 Use of estimates and judgments
The preparation of financial statements in conformity with BFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.

3.0 Summary of significant accounting policies

3.1 Financial assets and liabilities
Recognition
The Company initially recognizes loans and advances and deposits on the date that they are
originated. All other financial assets and liabilities are initially recognized on the trade date at which
the Company becomes a party to the contractual provisions of the instrument.
Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a
transaction in which substantially all the risks and rewards of ownership of the financial asset are
transferred.
 The Company derecognizes a financial liability when its contractual obligations are discharged or
cancelled or expire.
Identification and measurement of impairment

At each financial position date the Company assesses whether there is an objective evidence that
financial assets not carried at fair value through profit and loss are impaired. Financial assets are
impaired when objective evidence demonstrates that a loss event has occurred after the initial
recognition of the asset and that the loss event has an impact on the future cash flows on the asset
that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include
default or delinquency by a borrower and a significant downturn in the active market for a security.
Impairment losses on financial assets are measured as the difference between the carrying amount
of the financial asset and the present value of the estimated future cash flows of that asset. Losses
are recognized in statement of comprehensive income and reflected as an allowances against loans
and advances.

When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is
reversed through statement of comprehensive income.

3.2 Recognition of property, plant and equipment (PPE)

The cost of an item of property, plant and equipment is recognized as an assets if and only if is
probable that future economic benefits associated with the item will flow to the entity, and the cost
of the item can be measured reliably.

Property, plant & equipment have been accounted for at cost less accumulated depreciation. Cost
includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs of enhancement of an existing assets are recognized as a separate asset, only when
it is probable that future economic benefits associated with the item will flow to the company and
the cost of the item can be measured reliably. All other repairs and maintenance are charged to
income statement during the financial period in which they are incurred.

3.2 Depreciation of property, plant and equipment (PPE)

The company uses straight line method for charging depreciation. Full month depreciation is
charged on additions irrespective of date of its acquisition whereas no depreciation is charged in the
month of disposal. The rates of depreciation on various classes of property, plant and equipment are
as under:

Name of the assets Rates

Furniture and fixtures 10%-33.33%
Office floor space 5%-20%
Motor vehicles 20%
Leasehold improvement 15%-33.33%
IT equipment 10%-50%
Office equipment 10%-50%
3.4 Intangible assets
These represent cost of software and have been stated at cost as reduced by accumulated
depreciation. Computer software acquired by the company which have finite useful life are
measured at cost less accumulated depreciation. Depreciation is provided on software at the rate of
33.33% using the straight line method.
 3.5 Investments
The Company holds investment securities which are both actively traded in a quoted market and
those which are unquoted.
(a) Fair value through profit or loss
Investments in shares which are actively traded on a quoted market are designated at fair value
through statement of comprehensive income. Gains or losses arising from a change in the fair value
of such financial assets are recognized in the statement of comprehensive income.

(b) Available for sale

Investments in shares which are not actively traded on a quoted market are designated as Available
for Sale (AFS) assets. Since their fair values cannot be reliably measured, these are held at cost.

3.6 Taxation
The Company current tax has been calculated on the basis of the Finance Act 2014.
3.7 Loans and advances
Loans and advances are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and that the Company does not intend to sell immediately or in the
near term.

Loans and advances are initially measured at fair value and subsequently measured at amortized
cost.

3.8 Customer deposits

Customer deposits consist of funds provided by customers which have not yet been used to invest in
securities. These are initially measured at fair value and subsequently measured at amortized cost.

3.9 Provision
A provision is recognized if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably and it is probable that an outflow of economic
benefits will be required to settle the obligation.
3.9.1 Income in suspense
Income from loans and advances is moved to suspense account when reasonable doubt is
established over its recoverability.
3.10 Lease obligation
Leases of property, plant and equipment (PPE) are classified as finance leases where the Company
(lessee) has substantially all the risks and rewards of ownership. Leased assets are capitalized on the
basis of lower of fair value of leased assets and the present value of minimum lease payments. Each
lease payment is allocated between the liability and finance charges so as to achieve a constant rate
on the balance of lease obligation. The PPE acquired under finance leases are depreciated over their
estimated useful lives.

3.11 Revenue recognition

3.11.1 Interest income
Interest income is recognized in the statement of comprehensive income using the effective interest
method. Interest is accrued on a daily basis and applied to customer's account every quarter.

3.11.2 Fee and commission income

Fees and commission income are recognized at the later of when the corresponding service is
provided and when management feel that all necessary procedures in connection with such activity
is completed.
 Fees and commission income are recognized at the later of when the corresponding service is
provided and when management feel that all necessary procedures in connection with such activity
is completed.

3.11.3 Investment in associates

Investment in associates are those entities in which the Company has significant influence, but not
control, over the financial and operating policies. Significant influence is presumed to exist when
the Company holds between 25% to 50% of the voting power of another entity.

3.11.4 Dividend income

Dividend income is recognized when the right to receive dividend is established. Usually this is the
ex-dividend date for equity securities.

3.11.5 Finance income

Finance income comprises of interest income on fixed deposits and savings accounts. Interest
income is recognized as it accrues, using the effective interest method.

4.0 Financial Risk Management

The Company has exposure to the following risks from its use of financial instruments:

** Credit risk
** Liquidity risk
** Market risk
This note presents information about the Company’s exposure to each of the above risks, the
Company’s objectives, policies and processes for measuring and managing risk, and the Company’s
management of capital.

The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the
Company’s risk management framework.

4.1 Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Company’s loans
and advances to customers and investment securities. These loans and advances are fully backed by
the securities held by the customer as the average margin loan to customer deposit ratio stood at
0.9/1.0.

With respect to credit risk arising from the other financial assets of the Company, the maximum
exposure is equal to the carrying amounts of the financial assets.

4.2 Settlement Risk

The Company’s activities may give rise to risk at the time of settlement of transactions and trades.
Settlement risk is the risk of losses due to failure of and entity to honour its obligations to deliver
cash, securities or other assets as contractually agreed.

For such transactions the Company only allows the purchase of tradable securities if the customer
has adequate cash/purchase power beforehand.

4.3 Liquidity Risk

The Company’s approach to manage liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities.

Under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Company’s reputation.

The daily liquidity position is monitored and regular liquidity stress testing is conducted under a
variety of scenarios covering both normal and more severe market conditions. All liquidity policies
and procedures are subject to review and approval by the Board.
 The daily liquidity position is monitored and regular liquidity stress testing is conducted under a
variety of scenarios covering both normal and more severe market conditions. All liquidity policies
and procedures are subject to review and approval by the Board.

4.4 Market Risk

A key market risk for the Company is the volatility in price movements of traded securities. The
objectives of market risk management is to manage and control market risk exposures within
acceptable parameters while optimizing the return.

The Company is subject to various market risks, including risks from interest and currency
exchange rates.
4.4.1 Interest Rate Risk
The Company relies heavily on borrowed funds from the money markets to fund its margin loans.
Any hikes in interest rates in the money markets will increase its cost of funds and reduce the
interest rate spread that the Company earns on its margin loans.

Interest rate risks are primarily managed through monitoring of interest rate gaps and re-pricing of
products in the MANCOM which is the monitoring body for such strategies and is assisted by
Treasury on a day-to-day basis.

4.5 Capital Management

The Company’s objective when managing capital is to maintain a capital structure that provides a
balance between the risk associated with higher level of borrowings and the advantages and security
of a sound capital position.

There were no changes in the BOD’s approach to capital management during the year. The
Company is not subject to any externally-imposed capital requirements.

4.6 General
i) Amounts appearing in these financial statements have been rounded off to the nearest Bangladesh
Taka; and
ii) Figures related to previous year have been rearranged wherever considered necessary to confirm
with current year's presentation.
 5 Property, plant and equipment- at cost less accumulated depreciation
Amount in Taka
Cost Depreciation
Written down Written down
Balance on Additions Adjustment Balance on Rate of Balance on Charged Adjustment Balance on
Assets value at 31 value on 31
1 January during the during the 31 December depreciation 1 January during the during the 31 December December 2015 December 2014
2015 year year 2015 2015 Period year 2015

Furniture & fittings 4,722,923 - 363,873 4,359,050 10%-33.33% 3,853,654 505,291 289,705 4,069,240 289,810 869,269
Office floor space 6,348,797 - - 6,348,797 5%-20% 1,405,743 307,383 - 1,713,126 4,635,671 4,943,054
Motor vehicles 14,251,899 4,815,821 4,490,439 14,577,281 20% 10,380,651 1,767,204 4,103,067 8,044,788 6,532,493 3,871,248
Leasehold improvement 53,747,408 - 2,380,899 51,366,509 15%-33.33% 44,037,212 6,605,644 1,904,719 48,738,137 2,628,372 9,710,196
IT equipment 14,302,733 136,965 411,045 14,028,653 10%-50% 14,115,477 128,437 411,045 13,832,869 195,784 187,256
Office equipment 10,204,822 - 425,342 9,779,480 10%-50% 8,501,599 1,123,116 382,946 9,241,769 537,711 1,703,223

Total 2015 103,578,582 4,952,786 8,071,598 100,459,770 82,294,337 10,437,075 7,091,482 85,639,930 14,819,841 21,284,245

Total 2014 103,628,329 155,203 204,950 103,578,582 66,449,256 16,050,031 204,950 82,294,337 21,284,246 37,179,074
 Balance as at Balance as at
31 Dec 2015 31 Dec 2014
Taka Taka
6 Intangible assets
At cost 4,750,460 4,750,460

Accumulated depreciation
Opening balance 4,750,460 4,750,460
Add: Depreciation during the year
4,750,460 4,750,460
- -

7 Investment in associate company

BRAC Asset Management Company Limited 14,879,943

### 14,341,771
Profit for the period 489,484 538,172
15,369,427 14,879,943

In 2010, the Company along with other BRAC entities, invested Taka 12,500,000 in BRAC Asset Management
Company Limited which represents 25% of the paid up capital of the Company. BRAC Asset Management did not
start operation during the year 2011 to 30 Sept 2015 due to pending regulatory approval.

8 Investment in unquoted securities

BRAC Impact Ventures Limited 954,795 2,500,000
Impairment loss (954,795) (1,545,205)
- 954,795

In 2012, the Company along with other BRAC entities, invested Taka 2,500,000 in BRAC Impact Ventures
Limited which represents 12.50% of the paid up capital of the Company. BIVL has since gone into voluntary
winding up and therefore the total carrying amount has been written off.

9 Deferred tax
Deferred tax has been recognized in accordance with the provision of BAS 12 based on temporary differences
arising due to difference in the carrying amount of the assets or liabilities and their tax base. Related tax income
has been disclosed in statement of comprehensive income.

Deferred tax on temporary differences

(i) Deductible temporary differences
Property, plant and equipment (26,014,572) (33,057,211)
(ii) Taxable temporary difference
Finance lease obligations - 22,600
Net taxable temporary differences (26,014,572) (33,034,611)

Deferred tax asset (9,755,465) (12,387,979)

Net taxable temporary differences (26,014,572) (33,034,611)
Tax rate 37.50% 37.50%
Deferred tax asset as at 31 December (9,755,465) (12,387,979)
Less:- Opening balance as at 1 January 12,387,979 8,139,655
Deferred tax expense /(income) 2,632,515 (4,248,324)
10 Account receivables
Portfolio Management Department (PMD) (Note-10.1) 8,911,854 12,283,785
Investment Banking Department (IBD) (Note-10.2) 4,425,133 5,394,237
Structured Finance Department (SFD) (Note-10.3) 73,138,947 30,179,722
Impact Investment Department - -
86,475,934 47,857,744

31 Dec 2015 31 Dec 2014

Taka Taka
10.1 Portfolio Management Department (PMD)
Receivable from brokerage for client trading 4,305,146 10,381,035
Receivable from brokerage for own investment 4,606,708 -
Dividend income receivable - 1,902,750
8,911,854 12,283,785

PMD's receivables consist mainly of net receivables from brokers for daily sale and buy transactions of clients.
These are cleared every 3 working days. Dividend income receivable represents approved dividends declared by
listed entities which have not yet been credited to the company's account through the Central Depository
Bangladesh Limited. However, these receivables are considered as good at the reporting date.
10.2 Investment Banking Department (IBD)
Issue management fees - -
Corporate advisory fees 4,425,133 5,394,237
Debt arrangement fees - -
4,425,133 5,394,237
10.3 Structured Finance Department (SFD)
Debt arrangement fees 72,111,822 28,972,222
Corporate advisory fees 1,027,125 1,207,500
73,138,947 30,179,722
11 Inter-company receivables
BRAC EPL Stock Brokerage Limited 2,165,292 2,040,932
BRAC Asset Management Company Limited 966,850 909,350
BRAC - 477,271
BRAC Bank Limited - -
3,132,142 3,427,553

12 Investment in quoted securities 61,762,282 192,698,440

The Company invests in quoted securities, traded on the secondary capital market in Bangladesh. At the balance
sheet date these are recognized at market value on aggregate basis. As per BAS 39 Financial Instruments:
Recognition and Measurement, these have been classified as fair value through profit or loss where gains or losses
arising from a change in the fair value of such financial assets are recognized in the statement of comprehensive
income.

13 Advance income tax

Opening balance 6,432,844 12,314,186
Add: Paid during the year 33,845,069 97,547,143
40,277,913 109,861,329
Less: Adjusted during the year 35,644,976 103,428,485
4,632,937
### 6,432,844

14 Loans and advances to customers

Opening balance 3,769,646,105 3,669,777,230
Proceed during the year 54,997,756 99,868,875
3,824,643,861 3,769,646,105

At reporting date, the aggregate value of stocks held in customer portfolios was Tk. 4,549,741,493 which exceeded
the total margin loans extended of Tk. 3,824,643,861 resulting in an overall surplus of Tk. 725,097,632. However,
at reporting date, there are certain margin loans against which the aggregate value of that portfolio falls below the
loan extended to individuals' margin accounts and such shortfall amounts to Tk. 1,876,359,884 against an amount
of Tk. 1,392,863,441 in the preceding year. Management has successfully taken efforts to attract fresh deposits
from accountholders and realized outstanding charges. In addition, the subsequent position of these amounts have
improved due to upward price trend and positive market movements and helped reduce any further deterioration in
the portfolio.

31 Dec 2015 31 Dec 2014

Taka Taka
15 Accrued interest and management fees receivable

Accrued interest receivable 540,463,460 821,075,318

Accrued management fees receivable 25,657,950 41,971,742
566,121,410 863,047,060

Accrued interest receivable and accrued portfolio management fee is deducted from client's account on every
calendar quarter and adjusted with client's purchase power accordingly.

16 Advances, deposits and prepayments

Advances
Staff loans 581,139 2,420,667
VAT - 249,083
Employee, travel and accommodation - -
General suppliers 337,832 199,998
918,971 2,869,748
Deposits
Regulators 314,500### 314,500
314,500 314,500
Prepayments
Office rent 3,542,309 1,860,915
4,775,780### 5,045,163
17 Cash and cash equivalents
Cash in hand 130,843 60,580

Balance with Banks

BRAC Bank Limited 11,901,293 3,039,957

Standard Chartered Bank 46,593,306 14,387,056
NRB Commercial Bank Limited 499,189 504,612
NRB Bank Limited - 1,147,247
One Bank Limited 851,627 300,744
United Commercial Bank Limited 77,885 79,605
Standard Bank Limited 8,725 10,845
IFIC Bank Limited - 740
60,062,868 19,531,386

18 Share capital
18.1 Authorized share capital
300,000,000 ordinary shares of Taka 10 each 3,000,000,000 3,000,000,000
18.2 Issued, subscribed and paid-up share capital
58,500,000 ordinary shares of Taka 10 each 585,000,000 585,000,000
The Company's shareholding position as at 30 September was as follows:
Face Amount Amount
Name of shareholders No of shares
Nationality/ value Taka Taka
BRAC Bank Ltd. Incorporated
Bangladesh 44,459,962 per
10 444,599,620 444,599,620
in share
Other individual shareholders Various 14,040,038 140,400,380 140,400,380
58,500,000 585,000,000 585,000,000

31 Dec 2015 31 Dec 2014

Taka Taka
19 Finance lease obligations
Opening balance -
Less: Payments made during the year -
- -
Less: Current portion-transferred to current liabilities
- -

The repayment of lease obligations and repayable amount after the balance sheet date are as follows:

Finance lease liabilities-minimum lease payments

Payable not later than one year - 61,916

Payable later than one year but not later than 5 years - -
- 61,916

20 Customer deposits
Opening balance 59,418,979 39,421,277
Change during the year 24,013,941 19,997,702
83,432,920 59,418,979

Customer deposits represent un invested funds lying in the Company's account at the reporting date.
21 Bank Overdrafts
BRAC Bank Limited 845,110,659 841,802,475
IFIC Bank Limited 594,158,570 567,306,750
One Bank Limited 37,792,993 163,990,965
Standard Bank Limited 297,335,749 289,076,709
United Commercial Bank Limited 538,638,419 483,573,983
NRB Commercial Bank Limited 7,907,038 98,768,642
2,320,943,428 2,444,519,524
The terms and conditions of the bank overdraft are as follows:
BRAC Bank Limited
Type of facility : Overdraft 1- Renewal
Facility limit : BDT 800,000,000 (BDT eight hundred million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Maximum tenor : On demand
Purpose : To meet day to day operational activities.
Expiry : 29 March 2016

BRAC Bank Limited

Type of facility : Overdraft 2- Renewal
Loan limit : BDT 50,000,000 (BDT fifty million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Maximum tenor : On demand.
Purpose : To meet day to day operational activities.
Expiry : 29 March 2016

IFIC Bank Limited

Type of facility : Overdraft - Renewal
Facility limit : BDT 600,000,000 (BDT six hundred million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Maximum tenor : 1 (One) year (will be renewed after one year).
Purpose : For merchant banking operation of the company as margin loans
to clients and day to day activities.
Expiry : 31 January 2016
One Bank Limited
Type of facility : Overdraft (Revolving)
Facility limit : BDT 80,000,000 (BDT eighty million) only.
Repayment procedures : BDT 80,000,000 (BDT eighty million) only.
Purpose : For merchant banking operation of the company as margin loans
to clients and day to day activities.
Expiry : 31 March 2016

Standard Bank Limited

Type of facility : Overdraft (Renewal)
Facility limit : BDT 300,000,000 (BDT three hundred million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Purpose : For merchant banking operation of the company as margin loans
to clients and day to day activities.
Expiry : 30 September 2016

United Commercial Bank Limited

Type of facility : Overdraft (Renewal)
Facility limit : BDT 550,000,000 (BDT five hundred fifty million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Purpose : For merchant banking operation of the company as margin loans
to clients and day to day activities.
Expiry : 31 May 2016

NRB Commercial Bank Limited

Type of facility : Overdraft (Renewal)
Facility limit : BDT 50,000,000 (BDT fifty million) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Purpose : For merchant banking operation of the company as margin loans
to clients.
Expiry : 23 April 2016
 31 Dec 2015 31 Dec 2014
Taka Taka

22 Short term loan 1,047,059,353 690,000,000

22.1 Opening balance 690,000,000 600,000,000

Add: Received during the year 1,165,000,000 1,380,000,000
1,855,000,000 1,980,000,000
Less: Payment during the year 1,285,000,000 1,290,000,000
570,000,000 690,000,000

The terms and conditions of the loan taken from BRAC Bank Limited are as follows:

Loan limit : BDT 700,000,000 (BDT seven hundred million) only.

Repayment procedures : From operational cash flow/or own sources of borrower.
Maximum tenor : 180 days (maximum from date of each disbursement)
Purpose : To meet funding requirement for margin lending.
Expiry : 29 March 2016

31 Dec 2015 31 Dec 2014

Taka Taka
22.2 Short term loan
Opening balance -
Add: Received during the year 567,605,183
567,605,183 -
Less: Payment during the year 90,545,830
477,059,353 -

The terms and conditions of the loan taken from Investments Corporation of Bangladesh (ICB)are as follows:

Loan limit : BDT 56,76,05,183 (BDT fifty six crore seventy six lac five
thousand one hundred eighty three) only.
Repayment procedures : From operational cash flow/or own sources of borrower.
Maximum tenor : 480 days
Purpose : To meet funding requirement for margin lending.
Expiry : 31 December 2016

23 Revolving time loan

Loan received during the year 250,000,000 240,000,000

The terms and conditions of the loan taken from NRB Bank Limited are as follows:

Loan limit : BDT 250,000,000 (BDT two hundred fifty million) only.
Repayment procedures : Each Time Loan to be adjusted from client's revenues or other
sources within validity.
Maximum tenor : 360 days for each time loan
Purpose : To meet funding requirement for margin lending and day to day
operational activities.
Expiry : 30 September 2016

31 Dec 2015 31 Dec 2014

Taka Taka
24 Account payables
Broker for client trading 2,518,288 9,788,661
VAT on fee income 11,949,986 5,106,386
Payable for other PMD activities 4,888 1,930,440
Tax deducted at source from salaries and allowances 290,793 421,061
Tax deducted at source from suppliers 73,708 41,238
Withholding VAT on office rent 111,308 78,955
Withholding VAT on suppliers' payments 106,009 225,980
Tax deducted at source from office rent 34,821 25,896
15,089,800 17,618,617
25 Other liabilities
Provision for loans and advances (Note 25.1) 493,073,375 278,572,688
Interest suspense account (Note 25.2) - 130,000,000
Accrued interest payable 28,858,086 -
Sales receivable in transit 5,025,673 16,484,177
Salaries and allowances - -
CDBL charges 70,534 103,950
Office maintenance 384,317 298,079
Audit fees 198,000 198,000
IT expenses 761,684 836,462
Telephone and mobile expenses 21,099 21,099
Rent 42,750 110,138
Security services (4,644) 6,412
Legal and professional fees 287,474 36,000
Repair and maintenance 35,865 14,332
Advertisement 13,125 13,125
528,767,338 426,694,462

25.1 Provision for loans and advances

Opening balance 278,572,688 -
Provision made during the year 260,000,000 278,572,688
Provision released during the year (45,499,313) -
Closing balance 493,073,375 278,572,688

A provision has been made of BDT 493,073,375 which represents 26% of the total shortfall between the aggregate
value of the portfolio and the loans extended on these accounts. BSEC Circular SEC/CMRRCD/2009-193/181
dated 8 December 2015 requires a 20% provision on such shortfall at 31 December 2015.

25.2 Interest suspense account

Opening balance 130,000,000 -
Addition during the year - 130,000,000
Reversal during the year 130,000,000 -
Closing balance - 130,000,000
26 Provision for taxation
Opening balance 17,200,000 103,428,485
Add : Provision made during the year 1,028,410 17,200,000
18,228,410 120,628,485
Less: Paid/adjusted during the year 17,200,000 103,428,485
1,028,410 17,200,000
 31 Dec 2015 31 Dec 14
Taka Taka
27 Interest expenses
BRAC Bank Limited 151,735,381 215,068,686
United Commercial Bank Limited 97,547,367 93,448,433
IFIC Bank Limited 84,932,520 91,454,177
Standard Bank Limited 43,243,120 42,381,945
One Bank Limited 15,384,540 23,059,585
NRB Commercial Bank Limited 11,923,395 9,758,643
NRB Bank Limited 32,743,557 5,840,278
Investment Corporation of Bangladesh 9,933,091 -
447,442,970 481,011,747

28 Fee and commission income

Portfolio Management Department (PMD) (note-28.1) 44,906,150 105,236,830
Investment Banking Department (IBD) (note-28.2) 1,000,000 500,000
Structured Finance Department (SFD) (note-28.3) 53,577,250 22,101,933
Impact Investments Department fees - 345,000
99,483,400 128,183,763

28.1 Portfolio Management Department (PMD)

Settlement fees 31,791,409 60,553,147
Management fees 12,638,203 44,193,653
BO maintenance fees 438,700 431,500
Documentation fees 24,861 55,200
Commission income from IPO 12,977 3,330
44,906,150 105,236,830

28.2 Investment Banking Department (IBD)

Corporate advisory fees 1,000,000 500,000
28.3 Structured Finance Department (SFD)

Debt arrangement fees 50,900,000 22,101,933

Corporate advisory fees 2,677,250 -
Private equity arrangement fees - -
53,577,250 22,101,933

29 Fee and commission expenses

Brokerage commission cost 16,607,458 31,534,784

Consultancy fees - 1,559,198
16,607,458 33,093,982
30 (Loss)/Income from investment in securities

Investment in securities at fair value through profit or loss:

Realized (loss)/ gain during the year (21,165,479) (1,462,250)
Fair value adjustment at reporting date 10,173,850 (22,246,029)
(10,991,629) (23,708,279)

31 Other operating income

Dividend income 1,575,714 2,794,335

Rental income 726,785 759,660
Interest income on staff loan 81,370 209,669
Gain on disposal of property, plant and equipment 651,386 20,000
3,035,256 3,783,664

31 Dec 2015 30 Sept 14

Taka Taka
32 Operating expenses
Salaries and allowances 51,270,848 61,096,368
Other personnel expenses 9,141,386 8,983,575
Rental expenses 18,131,291 17,104,152
Utilities, maintenance and running expenses 9,211,994 10,368,180
CDBL expenses 1,115,171 3,042,335
Legal and professional fees 2,813,883 2,219,983
Telephone, communication and IT expenses 3,666,459 4,674,833
Bad debt expenses 10,274,104 10,833,009
Printing and stationery 665,548 1,295,713
Travelling and conveyance 1,800,169 2,362,726
Vehicle maintenance expenses 1,521,458 1,716,246
Entertainment expenses 958,729 1,649,195
Training and development expenses 172,768 905,506
Meeting expenses 699,499 623,250
Business development and promotional expenses - 612,244
License and renewal fees 110,688 253,816
Advertisement expenses 650,839 1,515,398
Audit fees 253,000 253,000
Regulatory fees 177,370 150,000
Insurance 154,217 174,172
112,789,421 129,833,701

33 Financial expenses

Bank charges and commission 785,323 449,010

Finance charge - lease 2,504 36,404
Loan arrangement fees 103,100 1,086,500
890,927 1,571,914

34 Contingent liabilities and commitments

a) Underwriting Commitments Outstanding NIL NIL

b) Other contingent liabilities NIL NIL

35 Number of employees

During the period 45 permanent employees were in the employment with the company whose earning was Taka
36,000 or more per annum.

36 Related party transactions

During the year, the company carried out a number of transactions with related parties in the normal course of
business. In accordance with the provisions of BAS 24 : Related party disclosure, these are detailed below.

2015 2014
Name of party Nature of transactions
Taka Taka
IT transaction costs 760,696 755,243
BRAC Bank Limited
Loans and borrowings 1,415,110,659 1,531,802,475
BRAC EPL Stock Brokerage Limited Expenses payable 4,368,917 2,804,595
BRAC EPL Stock Brokerage Limited Receivable 2,165,292 2,040,932
BRAC Asset Management Company Ltd. Reimbursable expenses 966,850 909,350
 BRAC EPL Investments Limited
Direct Cash Flow Statement
As at 31 December 2015

2015
Taka
A. Cash flows from operating activities

Interest receipts 225,186,669

Interest payment (418,584,884)
Dividends receipts 3,478,464
Fees & commissions receipts 63,532,967
Cash payments to employees (60,412,234)
Cash payments to suppliers (41,930,476)
Income tax paid (33,845,069)
Receipts from other operating activities (19,263,432)
Payment for other operating activities (17,495,881)
Operating profit/(loss) before changes in operating
assets and liabilities (i) (299,333,875)

Increase/decrease in operating assets & liabilities

Loans and advances (54,997,756)
Other assets 2,064,612
Deposits from customers 24,013,941
Other liabilities (12,422,999)
Cash utilised in operating assets & liabilities (ii) (41,342,202)
Net cash (used)/flows from operating activities (i+ii) (340,676,077)

B. Cash flows from investing activities

Treasury bills
Bangladesh Bank Bills
Investment in bonds
Treasury bonds
Encumbured Securities
Sale/ (Investment) in shares 141,108,628
Investment in debenture
Investment in bonds
Investment in zero coupon bonds
Investment in prize bond
Acquisition of fixed assets (4,952,786)
Disposal of fixed Assets 1,631,500
Net cash used in investing activities 137,787,342

C. Cash flows from financing activities

Payment for lease finance (63,040)

Proceeds from issue of ordinary shares
Proceeds from issue of preference shares
Share premium
Proceeds from agent and customer deposit
Bank Charge
Borrowings from other banks 243,483,257
Payment of dividend on preference share
Money at call and short notice
Borrowings from Bangladesh Bank
Share money deposit
Donor grant received
Cash Dividend
Net cash flows from financing activities 243,420,217

Net increase/decrease in cash 40,531,482

Cash and cash equivalents at beginning of year 19,531,386

Cash and cash equivalents at end of period 60,062,868

-
 2014
Taka

369,326,253
(481,011,747)
1,502,785
103,986,068
(92,365,557)
(49,012,833)
(97,547,144)
769,601
(34,629,492)

(278,982,066)

(99,868,875)
148,383,345
19,997,702
(207,349,355)
(138,837,182)
(417,819,249)

(180,229,361)

(155,203)
20,000
(180,364,564)

(378,240)
 587,648,651

587,270,411

(10,913,402)

30,444,789

19,531,387

(1)