PROSPECTUS - check mail

“If you have any query about this document, you may consult issuer, issue manager and underwriter” 

PROSPECTUS 

For 

Public Offering of 500,000 Ordinary Shares of Tk 210.00 Each Including a Premium of 

Tk 110.00 Per Share Totaling Tk 105,000,000.00 

of 

DELTA BRAC HOUSING FINANCE CORPORATION LTD. 

Opening Date for Subscription: March 2, 2008 

Closing Date for Subscription: March 6, 2008 

For Non-Resident Bangladeshi Quota Subscription Closes on: March 15, 2008 

Manager to the Issue 

Prime Finance & Investment Limited 

63 Dilkusha C/A (3rd Floor), Dhaka 1000, Phone: 9563883 Fax: 9563692 

E-mail: info@primefinance.net Website: www.primefinance.net 

Underwriters 

Green Delta Insurance Company Ltd. 

Hadi Mansion (4th Floor) 2, Dilkusha C/A, Dhaka-1000 

Prime Bank Limited 

Adamjee Court Annex Building-2, 119-120 Motijheel C/A, Dhaka-1000 


63 Dilkusha C/A, (3rd Floor), Dhaka-1000 

HSBC 

Investment Corporation of Bangladesh 

Mercantile Bank Limited 

National Bank Limited 

Bankers to the Issue 

Eastern Bank Limited 

NCC Bank Limited 


Southeast Bank Limited 

The Trust Bank Limited 

Credit Rating Agency 

Credit Rating Agency of Bangladesh Ltd. (CRAB) 

Long Term: AAA Short Term: ST-1 

Date of Prospectus: January 27, 2008 

The issue shall be placed in “N” Category 

“CONSENT OF THE SECURITIES AND EXCHANGE COMMISSION HAS BEEN OBTAINED TO THE ISSUE/OFFER OF THESE SECURITIES 

UNDER THE SECURITIES AND EXCHANGE ORDINANCE, 1969, AND THE SECURITIES AND EXCHANGE COMMISSION (PUBLIC ISSUE) 

RULES, 2006. IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS CONSENT THE COMMISSION DOES NOT TAKE ANY 

RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE ISSUER COMPANY, ANY OF ITS PROJECTS OR THE ISSUE PRICE OF ITS 

SECURITIES OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINION EXPRESSED WITH REGARD TO THEM. SUCH 

RESPONSIBILITY LIES WITH THE ISSUER, ITS DIRECTORS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER, ISSUE MANAGER, 

UNDERWRITER AND/OR AUDITOR” 

Delta Brac Housing Finance Corporation Ltd. 

( A P U B L I C C O M P A N Y L I M I T E D B Y S H A R E S ) 

HEAD OFFICE: LANDMARK BUILDING (9TH FLOOR), 12-14 GULSHAN NORTH C/A, GULSHAN-2, DHAKA-1212. 

PHONE: 8822374, 9882112 (HUNTING LINES) 01711 816671-2 (TELULAR) FAX: 9882110 

WEBSITE: www.deltabrac.com, E-MAIL: dbh@deltabrac.com


Availability of Prospectus 

Prospectus of Delta Brac Housing Finance Corporation Ltd. may be obtained from the Issuer Company, Issue Manager, 

Underwriters and the Stock Exchanges as follows: 

Company Contact Person Telephone Number 


Head Office: Landmark Building (9th Floor), 

12-14 Gulshan North C/A, Gulshan-2, 

Dhaka 1212 

Q. M. Shariful Ala 

Managing Director 

9882112, 8822374 

Manager to the Issue Contact Person Telephone Number 


63, Dilkusha C/A (3rd Floor) 

Dhaka 1000 

Md. Rezaul Haque 

Vice President 

9563883 

Underwriters Contact Person Telephone Number 


Nasir A. Choudhury 

9560005 

Hadi Mansion (4th Floor) 2, Dilkusha C/A 

Dhaka-1000 

Managing Director & CEO 


M. Shahjahan Bhuiyan 

9567265 

Adamjee Court Annex Building-2, 

119-120 Motijheel C/A, Dhaka-1000 



63, Dilkusha C/A (3rd Floor), 

Dhaka-1000 

Md. Akter Hossain Sannamat FCA, FCS 

Managing Director (Current Charge) 

9563883 

Stock Exchanges Available At Telephone Number 

Dhaka Stock Exchange Ltd. 

9/F Motijheel C/A 

Dhaka–1000 

Chittagong Stock Exchange Ltd. 

1080 Sheikh Mujib Road, Agrabad 

Chittagong–4100 

DSE Library 9564601-7 

CSE Library (031) 714632-3 

(031) 720871-3 

Prospectus is also available on the web site www.secbd.org, www.primefinance.net, www.deltabrac.com, www.dsebd.org, 

www.csebd.com and Public Reference room of the Securities and Exchange Commission (SEC) for reading and study. 

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Corporate Directory 

Registered office 

Landmark Building (9th Floor) 

12-14 Gulshan C/A 

Gulshan-2, Dhaka-1212 

Phone: 8822374, 9882112 

Fax: 9882110 

Branches 

Motijheel office 

PICL Bhaban (Ground floor) 

36, Dilkusha C/A 

Dhaka-1000 

Phone: 7111774 

Fax: 9554269 

Dhanmondi office 

Panthaplaza (1 st floor) 

63/A Lake Circus 

Kalabagan (West Panthapath) 

Dhaka–1205 

Phone: 9134211 

Fax: 8117264 

Uttara office 

House # 79/A (3 rd floor) 

Road # 07, Sector # 04 

Uttara Model Town, Dhaka-1230 

Phone: 8933057 

Fax: 8958605 

Chittagong office 

BMA Bhaban (5 th floor) 

1367 CDA Avenue 

GEC Circle, Chittagong 

Phone: 2551224-6 

Fax: 2551227 

Auditors 

Hoda Vasi Chowdhury & Co. 

Chartered Accountants 

BTMC Bhaban (8th floor) 

7-9 Karwan Bazar C/A 

Dhaka-1215 

Phone: 9120090, 8121114 

Fax: 8119298 

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Table of Contents 

Item 

Page No. 

Disclosure in respect of issuance of securities in demat form 1 

Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969 1 

General information 4 

Declarations and due diligence certificates 5 

Declaration about the responsibility of the Directors including the CEO of the Company in respect of the prospectus 5 

Consent of the Directors to Serve 5 

Declaration about filing of prospectus with the Registrar of Joint Stock Companies & Firms 6 

Due Diligence Certificate of Manager to the Issue 6 

Due Diligence Certificates of the Underwriter(s) 7 

Risk factors & management perceptions about the risks 8 

Financial structure 9 

Use of IPO proceeds 9 

Description of business 9 

Company at a glance 9 

Important dates 9 

Nature of business 9 

Principal products and services 10 

Relative contribution to income (as per audited accounts) 10 

Associate, subsidiary/related holding company 10 

Distribution of products/services 11 

Competitive condition in business 11 

Sources of, and requirement for power, gas and water or any other utilities 11 

Customer providing 10% or more revenues 11 

Material patents, trademarks, licenses or royalty agreements 11 

Number of employees (as per audited accounts) 11 

Description of property 11 

Plan of operation and discussion of financial condition 12 

Internal and external sources of cash (as per audited accounts) 12 

Material commitment for capital expenditure 12 

Material changes from period to period (as per audited accounts) 13 

Causes for material changes 13 

Seasonal aspect of the company’s business 13 

Known trends, events or uncertainties 13 

Changes in the assets of the company used to pay off any liabilities 13 

Loan taken from holding/parent company or subsidiary company 13 

Loan given to holding/parent company or subsidiary company 13 

Future contractual liabilities 13 

Future capital expenditure 13 

VAT, income tax, customs duty or other tax liability 14 

Operating lease agreement 14 

Financial lease commitment 14 

Personnel related scheme 14 

Breakdown of issue expenses 15 

Revaluation of assets 15 

Transactions with subsidiary/holding company or associate companies 15 

Declaration for a Non-Banking Financial Institution 15 

Auditors’ certificate regarding any allotment of shares to promoters or sponsor shareholders for consideration other than in cash 16 

Material information which is likely to have an impact 16 

Directors and officers 16 

Information regarding directorship 16 

Directors’ involvement in other organization 17 

Family relationship among directors and top five officers 17 

Short bio-data of the directors 17 

Credit Information Bureau (CIB) report 19 

Description of senior executives and departmental heads 20 

Involvement of Directors and officers in certain legal proceedings 20 

Certain Relationships and Related Transactions 20 

Transaction with related parties 20 

Directors’ facilities 21 

Executive compensation 22 

Remuneration paid to top five officers 22 

Aggregate amount of remuneration paid to directors and officers (as per audited accounts) 22 

Future compensation 22 

Pay increase intention 22 

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Options granted to Directors, officers and employees 22 

Transaction with the Directors and Subscribers to the Memorandum 22 

Tangible assets per share 23 

Ownership of the Company’s securities 23 

Shareholding structure 23 

Securities owned by the officers 23 

Determination of offering price 24 

Market for the securities being offered 24 

Description of securities outstanding or being offered 24 

Dividend, voting, pre-emption rights 24 

Conversion and liquidation rights 25 

Dividend policy 25 

Other rights of shareholders 25 

Preference share 25 

Debt securities 26 

Lock-in on sponsors’ share 27 

Refund of subscription money 27 

Subscription by and refund to non-resident Bangladeshi (NRB) 27 

Availability of securities 27 

Offer 27 

Application for subscription 28 

Allotment 29 

Underwriting of shares 30 

Principal terms and conditions of underwriting agreement 30 

Underwriter’s right to represent in the Board of Directors of the Company 30 

Officer or director of the underwriter(s) acting as Director of the Company 30 

Financial Statements 31 

Auditors’ report to the shareholders 31 

Selected ratios 48 

Auditors’ report under section 135(1), para 24(1) of part II of schedule III to Companies Act, 1994 49 

Additional disclosure by the Management of the Company 51 

Credit rating report of DBH 52 

Additional disclosures/explanation by the Rating Agency 74 

Application forms 75 

Additional disclosures/explanation by the Auditors 79 

iv


Disclosure in respect of issuance of security in demat form 

As per provision of the Depository Act, 1999 and regulations made thereunder, shares will only be issued in dematerialized 

condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. (CDBL) system and 

any further issuance of shares (right/bonus) will be issued in dematerialized form only. 

Conditions under Section 2CC of the Securities and Exchange Ordinance, 1969 

Part A 

1. The company shall go for Initial Public Offer (IPO) for 500,000 ordinary shares of Taka 210.00 (Taka two hundred ten) each 

including a premium of Tk 110.00 per share worth Taka 10,50,00,000.00 (Taka ten crore fifty lac) only following the 

Securities and Exchange Commission (Public Issue) Rules, 2006, the Depository Act, 1999 and regulations issued there 

under. 

2. The abridged version of the prospectus, as approved by the Commission, shall be published by the issuer in 04 (four) 

national daily newspapers (in two Bengali and two English), within 03 (three) working days of issuance of this letter. The 

issuer shall post the full prospectus vetted by the Securities and Exchange Commission in the issuer’s website and shall 

also put on the websites of the Commission, Stock Exchanges, and the Issue Manager within 03 (three) working days from 

the date of issuance of this letter which shall remain posted till the closure of the subscription list. The issuer shall submit 

to SEC, the Stock Exchanges and the Issue Manager a diskette containing the text of the vetted prospectus in “MS-Word” 

format. 

3. Sufficient copies of prospectus shall be made available by the issuer so that any person requesting a copy may receive one. 

A notice shall be placed on the front of the application form distributed in connection with the offering, informing that 

interested persons are entitled to a prospectus, if they so desire, and that copies of prospectus may be obtained from the 

issuer and the issue manager. The subscription application shall indicate in bold type that no sale of securities shall be 

made, nor shall any money be taken from any person, in connection with such sale until twenty five days after the 

prospectus has been published. 

4. The company shall submit 40 (forty) copies of the printed prospectus to the Securities and Exchange Commission for official 

record within 5 (Five) working days from the date of publication of the abridged version of the prospectus in the newspaper. 

5. The issuer company and the issue manager shall ensure transmission of the prospectus, abridged version of the 

prospectus and relevant application forms for NRBs through e-mail, simultaneously with publication of the abridged 

version of the prospectus, to the Bangladesh Embassies and Missions abroad and shall also ensure sending of the printed 

copies of abridged version of the prospectus and application forms to the said Embassies and Missions within 05 (five) 

working days of the publication date by express mail service (EMS) of the postal department. A compliance report shall be 

submitted in this respect to the SEC jointly by the issuer and the issue manger within two working days from the date of 

said dispatch of the prospectus & the forms. 

6. The paper clipping of the published abridged version of the prospectus, as mentioned at condition 2 above, shall be 

submitted to the Commission within 24 hours of the publication thereof. 

7. The company shall maintain separate bank account(s) for collecting proceeds of the Initial Public Offering and shall also 

open FC account(s) to deposit the application money of the Non-Resident Bangladeshis (NRBs) for IPO purpose, and shall 

incorporate full particulars of said FC account(s) in the prospectus. The company shall open the abovementioned accounts 

for IPO purpose; and close these accounts after refund of over-subscription. Non-Resident Bangladeshi (NRB) means 

Bangladeshi citizens staying abroad including all those who have dual citizenship (provided they have a valid 

Bangladeshi passport) or those, whose foreign passport bear a stamp from the concerned Bangladesh Embassy to the 

effect that no visa is required to travel to Bangladesh. 

8. The issuer company shall apply to all the stock exchanges in Bangladesh for listing within 07(seven) working days from 

the date of issuance of this letter and shall simultaneously submit the vetted prospectus with all exhibits, as submitted to 

SEC, to the stock exchanges. 

9. The following declaration shall be made by the company in the prospectus, namely:- 

“Declaration about Listing of Shares with the Stock Exchange(s): 

None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any 

allotment in terms of this prospectus shall be void and the company shall refund the subscription money within fifteen 

1


days from the date of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) 

days, as the case may be. 

In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to 

the issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate 

of 2% (two percent) per month above the bank rate, to the subscribers concerned. 

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions 

and submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time 

period allowed for refund of the subscription money.” 

10. The following declaration shall be made by the company in the prospectus, abridge version of the prospectus and share 

application forms:- 

“An applicant can not submit more than two applications, one in his/her own name and another jointly with another 

person. In case an applicant makes more than two applications, all applications will be treated as invalid and will not 

be considered for allotment purpose. In addition, whole or part of application money may be forfeited by the 

commission.” 

11. The subscription list shall be opened and the sale of securities commenced after 25 (twenty five) days of the publication of 

the abridged version of the prospectus and shall remain open for 5 (Five) consecutive banking days. 

12. A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at 

Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, 

supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for 

through crossed bank cheque marking “Account Payee only”. Application shall be sent by the NRB applicants to the 

issuer company within the closing date of the subscription so as to reach the same to the company by the closing date plus 

nine days. Applications received by the company after the above time period will not be considered for allotment 

purpose. 

13. The company shall apply the spot buying rate (TT clean) in US Dollar, UK Pound Sterling and Euro of Sonali Bank, which 

shall be mentioned in the Prospectus, as prevailed on the date of opening of the subscription for the purpose of 

application of the NRBs and other non-Bangladeshi persons, where applicable. 

14. The company and the issue manager shall ensure prompt collection/clearance of the foreign remittances of NRBs and 

other non-Bangladeshis, if applicable, for allotment of shares. 

15. Upon completion of the period of subscription for securities the issuer and the issue manager shall jointly provide the 

Commission and the stock exchanges with the preliminary status of the subscription within 05 (five) working days, in 

respect of the following matters, namely: - 

(a) 

(b) 

(c) 

Total number of securities for which subscription has been received; 

Amount received from the subscription; and 

Amount of commission paid to the banker to the issue. 

16. The issuer and the issue manager shall jointly provide the Commission and the stock exchanges with the list of valid and 

invalid applicants (i.e. final status of subscription) to the Commission within 3 (three) weeks after the closure of the 

subscription along with bank statement (original), branch-wise subscription statement, NRB application forms (photocopy 

attested by the CEOs of the issuer company and the issue manager). The list of valid and invalid applicants shall be 

finalized after examination with the CDBL in respect of BO accounts and particulars thereof. 

17. The IPO shall stand cancelled and the application money shall be refunded immediately (but not later than 6(six) weeks 

from the date of the subscription closure) if any of the following events occur: 

(a) 

(b) 

Upon closing of the subscription list it is found that the total number of valid applications (in case of under 

subscription including the number of the underwriter) is less than the minimum requirement as specified 

in the listing regulations of the stock exchange(s) concerned; or 

At least 50% of the IPO is not subscribed. 

18. 10% of total public offering shall be reserved for non-resident Bangladeshi (NRB) and 10% for mutual funds and collective 

investment schemes registered with the Commission, and the remaining 80% shall be open for subscription by the general 

public. In case of under-subscription under any of the 10% categories mentioned above, the unsubscribed portion shall be 

2


added to the general public category and, if after such addition, there is over subscription in the general public category, 

the issuer and the issue manager shall jointly conduct an open lottery of all the applicants added together. 

19. All the applicants shall first be treated as applied for one minimum market lot of 50 shares worth Tk.10,500/-. If, on this 

basis, there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for 

each application, irrespective of the application money. In case of over-subscription under any of the categories mentioned 

hereinabove, the issuer and the issue manager shall jointly conduct an open lottery of all the applications received under 

each category separately in presence of representatives from the issuer, the stock exchanges and the applicants, if there be 

any. 

20. Lottery (if applicable) shall be held within 5 (five) weeks from closure of the subscription date. 

21. The company shall issue share allotment letters to all successful applicants within 6 (six) weeks from the date of the 

subscription closing date. Within the same time, Refund to the unsuccessful applicants shall be made in the currency in 

which the value of securities was paid for by the applicants without any interest, through direct deposit to the applicant’s 

bank account as far as possible/ Account Payee Cheque/ refund warrants with bank account number, bank’s name and 

Branch as indicated in the securities application forms payable at Dhaka/ Chittagong/ Khulna/ Rajshahi/ Barisal/ 

Sylhet/ Bogra, as the case may be. A compliance report in this regard shall be submitted to the Commission within 

7(seven) weeks from the date of closure of subscription. 

22. The company shall furnish the List of Allotees to the Commission and the stock exchange(s) simultaneously in which the 

shares will be listed, within 24 (twenty four) hours of allotment. 

23. In the event of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the 

underwriter(s) (subject to para -17 above). The issuer must notify the underwriter to take up the underwritten shares 

within 10 (ten) days of the subscription closing date on full payment of the share money within 15(fifteen) days of the 

issuer’s notice. The underwriter shall not share any underwriting fee with the issue manager, other underwriters, issuer or 

the sponsor group. 

24. All issued shares of the issuer at the time of according this consent shall be subject to a lock- in period of three years from 

the date of issuance of prospectus or commercial operation, whichever comes later: 

Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares of the 

company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year 

from the date of issuance of prospectus or commercial operation, whichever comes later. 

25. Either a Jumbo Share (one for each of the existing Sponsors/ Directors/ Shareholders) in respect of the shares already 

issued shall be issued covering together respective total holding, which shall contain the expiry date of lock-in period or 

Sponsors/Directors/ Promoters/Shareholders’ shareholding shall be converted into demat form but shall be locked-in for 

three years as per the condition at para-24 above. 

26. In case of Jumbo Share Certificate issued to the existing Sponsors/ Directors/ Shareholders, the said share certificates 

shall be kept under custody of a security custodian bank registered with SEC during the lock-in period. The name and 

branch of the bank shall be furnished to the Commission jointly by the issuer and the issue manager, along with a 

confirmation thereof from the custodian bank, within one week of listing of the shares with the stock exchange(s). 

27. In case of dematerialization of shares held by the existing Sponsors/ Directors/ Shareholders, the copy of 

dematerialization confirmation report generated by CDBL and attested by the managing director of the company along 

with lock-in confirmation shall be submitted to SEC within one week of listing of the shares with the stock exchange(s). 

28. The company shall apply to the stock exchanges for listing within 7(seven) working days of issuance of this letter and 

shall simultaneously submit to the Commission attested copies of the application filed with the stock exchanges. 

29. The company shall not declare any benefit other than cash dividend based on the financial statement for the year 

ended June 30, 2007. 

Part B 

1. The issue manager (i.e., Prime Finance and Investment Limited) shall ensure that the abridged version of the prospectus 

and the full prospectus is published correctly and in strict conformity without any error/omission, as vetted by the 

Securities and Exchange Commission. 

3


2. The issue manager shall carefully examine and compare the published abridged version of prospectus on the date of 

publication with the copy vetted by SEC. If any discrepancy/inconsistency is found, both the issuer and the issue manager 

shall jointly publish a corrigendum immediately in the same newspapers concerned, simultaneously endorsing copies 

thereof to SEC and the stock exchange(s) concerned, correcting the discrepancy/inconsistency as required under ‘Due 

Diligence Certificates’ provided with SEC. 

3. Both the issuer company and the issue manager shall, immediately after publication of the prospectus and its abridged 

version, jointly inform the Commission in writing that the published prospectus and its abridged version are verbatim 

copies of the same as vetted by the Commission. 

4. The fund collected through IPO shall not be utilized prior to listing with stock exchange and that utilization of the said 

fund shall be effected through banking channel, i.e. through account payee cheque, pay order or bank drafts etc. 

5. The company shall furnish report to the Commission on utilization of IPO proceeds within 15 days of the closing of each 

quarter until such fund is fully utilized, as mentioned in the schedule contained in the prospectus, and in the event of any 

irregularity or inconsistency, the Commission may employ or engage any person, at issuer’s cost, to examine whether the 

issuer has utilized the proceeds for the purpose disclosed in the prospectus. 

6. All transactions, excluding petty cash expenses, shall be effected through the company’s bank account(s). 

7. Proceeds of the IPO shall not be used for any purpose other than those specified in the prospectus. Any deviation in this 

respect must have prior approval of the shareholders in the EGM under intimation to SEC and stock exchange(s). 

8. Directors on the company’s Board: This will be in accordance with the applicable laws, rules and regulations. 

Part C 

1. All the above conditions imposed under section 2CC of the Securities and Exchange Ordinance, 1969 shall be incorporated 

in the prospectus immediately after the page of the table of contexts, with a reference in the table of contents, prior to its 

publication. 

2. The Commission may impose further conditions/restrictions etc. from time to time as and when considered necessary, 

which shall also be binding upon the issuer company. 

Part D 

1. As per provision of the Depository Act, 1999 and regulations made there under, shares will only be issued in 

dematerialized condition. All transfer/transmission/splitting will take place in the Central Depository Bangladesh Ltd. 

(CDBL) system and any further issuance of shares (right/bonus) will be issued in dematerialized form only. 

An applicant (including NRB) shall not be able to apply for allotment of shares without beneficial owner account (BO 

account). 

2. The issue manager shall also ensure due compliance of all above. 

General Information 

The Prospectus has been prepared by Prime Finance & Investment Limited from information supplied by Delta Brac Housing 

Finance Corporation Ltd. (the Company) and also several discussions with the Managing Director and related executives of 

the Company which is publicly available. The Board of Directors of the Delta Brac Housing Finance Corporation Ltd. hereby 

confirms that to the best of their knowledge and belief the information contained herein is true and correct in all material 

respects and that there are no other material facts the omission of which would make any statement herein misleading. 

No person is authorized to give any information or to make any representation not contained in this Prospectus and if given or 

made, any such information or representation must not be relied upon as having been authorized by the Company or the Issue 

Manager. 

The Issue, as contemplated in this document, is made in Bangladesh and is subject to the exclusive jurisdiction of the Courts of 

Bangladesh. Forwarding this Prospectus to any person residing outside Bangladesh in no way implies that the issue is made in 

accordance with the laws of that country or is subject to the jurisdiction of the laws of that country. 

4


Declarations and due diligence certificates 

Declaration about the Responsibility of the Directors, including the CEO 

of the Company “Delta Brac Housing Finance Corporation Ltd.” in 

Respect of the Prospectus 

This prospectus has been prepared, seen and approved by us, and we, individually and collectively, accept full responsibility 

for the authenticity and accuracy of the statements made, information given in the prospectus, documents, financial statements, 

exhibits, annexes, papers submitted to the Commission in support thereof, and confirm, after making all reasonable inquiries 

that all conditions concerning this public issue and prospectus have been met and that there are no other information or 

documents the omission of which make any information or statements therein misleading for which the Commission may take 

any civil, criminal or administrative action against any or all of us as it may deem fit. 

We also confirm that full and fair disclosure has been made in this prospectus to enable the investors to make a well-informed 

decision for investment. 

Sd/- 

Faruq A Choudhury 

Chairman 

Representative of BRAC 

Sd/- 

Md. Aminul Alam 

Director 


Sd/- 

Dr. Syed Mukarram Ali 

Director 

Representative of Delta Life Insurance 

Company Ltd. 

Sd/- 

Dr. Kabir Hussain Choudhury 

Director 

Representative of Green Delta Insurance 

Company Ltd. 

Sd/- 

Nasir A Choudhury 

Director 


Company Ltd. 

Sd/- 

Nurul Huda 

Director 


Company Ltd. 

Sd/- 

Mohammed Syedul Islam 

Director 


Company Ltd. 

Sd/- 

Muhammad A Ali 

Director 


Sd/- 

Pradeep Kumar Mukherjee 

Director 

Representative of HDFC Investments Ltd. 

Sd/- 

Q.M. Shariful Ala 


Consent of the Directors to Serve 

We hereby agree that we have been serving as Director(s) of “Delta Brac Housing Finance Corporation Ltd.” and continue to 

act as Director of the Company. 

Sd/- 


Chairman 


Sd/- 


Director 


Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 

Nurul Huda 

Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Sd/- 


Director 


Sd/- 



5


Declaration about filing of Prospectus with the Registrar of Joint Stock Companies & Firms 

A dated and signed copy of the Prospectus has been filed for registration with the Registrar of Joint Stock Companies & Firms, 

Government of the Peoples’ Republic of Bangladesh, as required under Section 138(1) of the Companies Act, 1994, vide RJSC’s 

Receipt No 0149964 dated January 27, 2008. 

Due Diligence Certificate of Manager to the Issue 

Sub: 

Public offer of 500,000 Ordinary Shares of Tk. 210 each including a premium of Tk. 110 per share of Delta Brac 

Housing Finance Corporation Ltd. 

We, the under-noted Manager to the Issue to the above mentioned forthcoming issue, state as follows: 

1. We, while finalizing the draft prospectus pertaining to the said issue, have examined various documents and other 

materials as relevant for adequate disclosures to the investors; and 

2. On the basis of such examination and the discussions with the issuer company, it’s Directors and officers, and other 

agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and 

other materials furnished by the issuer company. 

WE CONFIRM THAT: 

(a) the draft prospectus forwarded to the Commission is in conformity with the documents, materials and papers 

relevant to the issue; 

(b) all the legal requirements connected with the said issue have been duly complied with; and 

(c) the disclosures made in the draft prospectus are true, fair and adequate to enable the investors to make a well 

informed decision for investment in the proposed issue. 

For Manager to the Issue 

Sd/- 

A. K. M. Nozmul Haque 


Date: 24 December 2007 

6


Due Diligence Certificate of the Underwriter(s) 

Sub: 

Public Offer of 500,000 Ordinary Shares of Tk. 210 each including a premium of Taka 110 per share of Delta Brac 

Housing Finance Corporation Ltd. 

We, the under-noted Underwriter(s) to the abovementioned forthcoming issue, state individually and collectively as follows: 

1. We, while underwriting the abovementioned issue on a firm commitment basis, have examined the draft prospectus, 

other documents and materials as relevant to our underwriting decision; and 

2. On the basis of such examination and the discussion with the issuer company, it’s directors and officers, and other 

agencies, independent verification of the statements concerning objects of the issue and the contents of the documents and 

other materials furnished by the issuer company; - 

WE CONFIRM THAT: 

(a) all information as are relevant to our underwriting decision have been received by us and the draft prospectus 

forwarded to the Commission has been approved by us; 

(b) we shall subscribe and take up the un-subscribed securities against the abovementioned public issue within 15 

(fifteen) days of calling up thereof by the issuer; and 

(c) 

this underwriting commitment is unequivocal and irrevocable. 

For Underwriters 

Sd/- 

Nasir A. Choudhury 

Managing Director & CEO 



Sd/- 

M. Shahjahan Bhuiyan 




Sd/- 

A. K. M. Nozmul Haque 




7


Risk factors & Management’s perceptions about the risks 

Interest rate risks 

Profitability of the companies those are involved in fund-based business is dependent on interest rate structure. Any 

unfavorable change in inflation rate structure may affect the company’s business adversely. 

Management perception 

DBH has been able to mobilize funds from diverse sources, in the form of term loans, subordinated debt, debenture and fixed deposits. The 

cost of fund has been reduced due to the repayment of its debt and more contribution of funds from the low cost deposit in its fund base. 

Exchange rate risks 

Taka has been devalued significantly against dollar and it is very unlikely of any immediate appreciation of Taka. The 

companies like DBH, which have foreign currency loan, may suffer due to exchange rate fluctuation. However the Foreign 

Exchange Loan of DBH is duly hedged with Foreign Exchange Deposit with Bangladesh Bank. 


The USD 2.345 million term loan of DBH from International Finance Corporation (IFC) is not exposed to any foreign exchange fluctuation 

risk. Basically, the USD borrowing from IFC is retained in the Bangladesh Bank foreign exchange account of DBH and liened with a term 

loan of BDT 134.60 million of Sonali Bank. Since the proceeds of this USD loan from IFC is kept as USD deposit with Bangladesh Bank, 

DBH does not bear any risk of Taka to USD fluctuation. 

Industry risks 

The Company is operating in a highly competitive industry. The Company faces competition from a giant specialized housing 

finance company of public sector and number of private sector commercial banks and financial institutions those are found to 

be very aggressive in the market. Inability of offering competitive products will hinder the Company's growth potential. 


The company has successfully accessed the market till date and is working on offering products at competitive terms. 

Market and technology-related risks 

To be competitive in the market financial institution always need to develop new products and services as well as to introduce 

new financial instrument. Failing of which may make the Company outperformed by its competitors. 


As a Non-Banking Financial Institution DBH is operated within the legal framework prevailing in the country. DBH is a specialized 

housing finance company, which has little scope of introducing completely new financial instrument. However, Management of the 

Company is aware of recent development in the financial world and keeps their employees up-to-date on those by providing necessary 

training. 

Potential or existing government regulations 

The Non-Banking Financial Institutions like Delta Brac Housing Finance Corporation Ltd. is regulated by the Bangladesh Bank. 

Any unfavourable change in regulations may affect the Company's business. 


The Company's operations are governed by the changes in regulation that occur from time to time. SLR and CLR rates, restriction on 

deposit receipt and call money market participation ceiling inter alia may affect a particular company and the whole Non-Banking Financial 

Institutions by and large. 

Potential changes in global or national policies 

Changes in government policy as well as policy of foreign countries may affect adversely the business of the company. 


The management of the Company always monitors national and global policies which may affect the Company's business. In case of any 

change in national and/or global policy the management may adjust company's business strategy accordingly. 

8


Operations risks 

Default of clients 

A borrower may default in performing his/her loan obligation. The Company’s inability to collect receivables due could have a 

material adverse effect on the Company’s business and financial condition. 


DBH keeps provision against loans and advances as per the regulatory requirement. Rather the Company has been following conservative 

approach by keeping more reserve than required by the Bangladesh Bank to safeguard the Company against any future contingencies. The 

Company is keeping provision for both interest receivables and the principal amount of all loans outstanding for more than six months. The 

Company made additional provisions against all loan accounts that are considered as overdue for more than three months for last two years. 

Financial structure 

Financial structure 

1 Financial structure prior to IPO 

Issued & fully paid up ordinary share capital as on date Tk 220,000,000 

2 Financial structure after IPO 

a) Issued & fully paid up ordinary share capital as on date Tk 220,000,000 

b) IPO (Initial Public Offering) Tk 50,000,000 

Total capital structure after IPO will be Tk 270,000,000 

Use of IPO proceeds 

On receipt of IPO fund, the net proceeds of the offering shall be used for meeting the company’s operational activities (housing 

finance). 

Description of business 

Company at a glance 

Delta Brac Housing Finance Corporation Ltd. (DBH) is a public limited company and a financial institution licensed by 

Bangladesh Bank. The primary objectives of DBH are to channel resources into providing finance for people's basic need for 

shelter, enhance housing stock of the country, promote affordable home ownership and pioneer the concept of a viable private 

sector housing finance system in Bangladesh. 

Important dates 

Incorporation of the Company May 11, 1996 

Date of Certificate of Commencement of Business May 11, 1996 

License from Bangladesh Bank July 15, 1996 

Nature of business 

Currently, DBH is providing loans for construction of houses, purchases of flats or houses, extension and improvement of 

existing houses or flats and purchase of housing plot. The company also provides services for purchase, sale and transfer of real 

estate assets. The company has also various investment and financing products like term deposit scheme, cumulative deposit 

scheme, double money deposit scheme, monthly income deposit scheme for its individual and corporate clients. 

9


Principal products and services 

DBH Housing Loan 

The core product of DBH is the Housing Loan for individual and corporate clients. DBH extends housing loan for the following 

purposes – 

• Purchasing apartment 

• Constructing own house 

• Purchasing approved plots 

• Extending/renovating existing dwelling 

• Purchasing professional chambers 

The main category of borrowers is employed category where people are employed in government organizations, NGOs, local 

large corporate bodies, multinational banks etc. The other category includes expatriates, independent professionals like 

doctors, engineers, accountants etc. and businessmen. DBH has organized its loan portfolio in such a way so as to keep the 

average loan size small and diversify the types of borrowers in the portfolio. 

DBH Family Loan 

This is an “Any Purpose Consumer Loan” option for the discerning Customers, which is secured by Registered Mortgage of the 

owner’s Property. 

DBH Deposits 

Besides the fast and easy housing loans for individuals and institutions, DBH has very attractive Fixed and Variable Rate 

Deposit Schemes for individual and corporate depositors, which yields to high Rate of Return on their investment coupled with 

prompt customer services and security. DBH’s Deposits now consist of monthly income deposits, annual income deposits and 

cumulative income deposits, which are available, both in fixed and variable rate options. Apart from that new products like 

profit first deposit (PFD), Children’s Deposit and Easy Way Deposit are introduced to cater to the needs of small and medium 

savers and provide depositors the opportunity to earn a competitive rate of return. PFD depositors get the return or profit in 

advance i.e., immediately after placing the deposit with DBH. Children’s deposit and Easy way deposit are the latest addition 

to the DBH Deposit product line. Both of these products facilitate accumulation of small savings conforming to customer 

convenience. A saver can procure a Children’s Deposit or Easy way Deposit by placing a minimum of BDT 5,000/= and 

continue to save flexible amounts for a period of maximum 12 years at a competitive rate of return. Easy Home Deposit is 

another newcomer in the deposit products of the company where a saver can start depositing money with Taka 50,000 and 

continue saving 5000 per month up to maximum maturity of 12 years. The distinctive benefit of this product is depositor can 

have the housing loan at a competitive rate at the end of the maturity. 

DBH Loan Protection Insurance 

DBH Loan Protection Insurance is a distinctive type of Life Insurance Policy aimed at safeguarding the bereaved heirs of a 

borrower from the burden of loan repayment during harsh financial crisis following his/her death. 

DBH Property Services 

Another unique service provided by DBH is Property Counseling Service. DBH maintains a large database of apartments/plots 

that are being developed by various developers. Customers can choose a plot or an apartment from this database that meets his 

or her requirements. Apart from this DBH people also help the client on purchasing apartments and plots by providing 

property and documentation related services. 

Relative contribution to income 

(as per audited accounts) 

Particulars 

Amount 

(%) 

Taka 

Interest income 1,169,068,170 96.471 

Fees and other charges on housing loans 42,740,430 3.527 

Other income 30,000 0.002 

Total 1,211,838,600 100.000 

Associate, subsidiary/related holding company 

The company does not have any associate, subsidiary/related holding company. 

10


Distribution of products/services 

The Company provides services from its Head Office situated at Gulshan, Dhaka and branch offices situated at Motijheel, 

Dhanmondi and Uttara, Dhaka and CDA Avenue, Chittagong. 

Competitive condition in business 

The Company faces competition from one specialized housing finance provider in public sector and other private financial 

institutions like banks, leasing companies who provide housing loans. 

Sources of, and requirement for power, gas and water or any other utilities 

The company does not require such utilities except for ordinary use in office work. 

Customer providing 10% or more revenues 

The company has no customer providing 10% or more revenues. 

Material patents, trademarks, licenses or royalty agreements 

The Company has not entered into any such agreement. 

Number of employees 


Total number of employees 82 

• Full-time employees 82 

• Part-time employees - 

Besides the above-mentioned employees DBH also has some contractual employees. 

Description of property 

The company’s business is operated through its Head Office and branch offices on rented premises except the premise of 

Dhanmondi Branch, which is owned by the company and located in Panthaplaza (1 st floor), 63/A Lake Circus, Kalabagan 

(West Panthapath), Dhaka-1205. However, written down value of the fixed assets owned by the company as per audited 

accounts is given below: 


Sl. 

No. 

Name of the Assets 

Written Down Value 

as at 30 June 2007 

Taka 

1 Furniture & fixture 16,404,634 

2 Equipment 14,761,974 

3 Vehicles 4,026,883 

4 Land 1,143,750 

5 Building 3,847,176 

6 Lease Vehicle 1,900,000 

Total 42,084,417 

• All the above-mentioned assets are situated at company’s office premises. 

• The company itself owns the entire fixed assets. 

• First charge has been created on all present and future assets of the company against its borrowings. 

• For vehicle lease the lessor is Industrial and Infrastructural Development Finance Company Ltd. (IIDFC). The term of the lease is 5 years 

starting form 6 March 2007. 

11


Plan of Operation and Discussion of Financial Condition 

Internal and external sources of cash 

Internal sources of cash 

30-Jun-07 

Amount in Taka 

30-Jun-06 



30-Jun-05 


Share capital 220,040,000 200,040,000 200,040,000 

Share premium account 99,960,000 99,960,000 99,960,000 

Statutory reserve 122,809,929 95,950,927 74,243,678 

Contingency reserve 100,000,000 60,000,000 37,000,000 

Loan loss reserve 73,758,085 56,099,934 45,124,011 

General reserve 18,000,000 18,000,000 13,000,000 

Retained earnings 76,727,280 40,348,551 11,634,509 

Sub-total 711,295,294 570,399,412 481,002,198 

External sources of cash 

Subordinated loan 29,922,800 37,403,500 44,884,200 

Term loans 1,289,866,697 550,528,122 429,326,823 

Debentures - 9,285,692 18,571,410 

Deposits 5,799,056,186 4,571,050,822 3,758,178,424 

Current portion of long term loans 290,879,854 133,095,684 42,948,868 

Bank overdrafts 200,157,877 182,498,722 152,738,565 

Short term loans 670,000,000 270,000,000 300,000,000 

Sub-total 8,279,883,414 5,753,862,542 4,746,648,290 

Total 8,991,178,708 6,324,261,954 5,227,650,488 

Material commitment for capital expenditure 

The company has not yet made any material commitment for capital expenditure. 

12


Material changes from period to period 


Particulars 


July 06 to June 07 July 05 to June 06 July 04 to June 05 

Operational revenue 

Interest income/Income from lending operation 1,169,068,170 812,420,254 690,196,452 

Fees and other charges on housing loans 42,740,430 30,462,381 25,896,439 

Other income 30,000 20,000 47,000 

Total 1,211,838,600 842,902,635 716,139,891 

Less: Operational expenses 

Interest expenses 805,094,994 540,567,470 462,866,716 

General & administrative expenses 110,571,671 79,799,898 60,950,937 

Professional fees 1,185,978 1,713,414 740,364 

Depreciation on fixed assets 7,790,022 4,449,548 4,217,499 

Amortization of computer software expenses 59,560 38,807 - 

Total 924,702,225 626,569,137 528,775,516 

Income from operations 287,136,375 216,333,498 187,364,375 

Add/(Less): Non-operating income (expenses) (26,981,318) (11,676,260) (5,680,728) 

Profit before tax 260,155,057 204,657,238 181,683,647 

Less: Income tax expenses 125,860,046 97,210,504 84,582,802 

Net profit after tax 134,295,011 107,446,734 97,100,845 

Causes for material changes 

The company's income from lending operation and total operational revenue as well as operating expenses and net profit have 

continued to increase due to business promotion efforts of the Directors and Management staff. 

Seasonal aspect of the company’s business 

The operation of the company is not, in general, affected by any seasonal variances. 

Known trends, events or uncertainties 

Political unrest, flood and natural calamities are the known events that may affect the business operations of the company. 

Changes in the assets of the company used to pay off any liabilities 

No asset of the company has been disposed off to pay liabilities of the Company. 

Loan taken from holding/parent company or subsidiary company 

The company has no holding/parent company or subsidiary company and has not taken any loan from such party. 

Loan given to holding/parent company or subsidiary company 

The company has no holding/parent company or subsidiary company and has not given any loan to such party. 

Future contractual liabilities 

The company has not, as on 30th June 2007, entered into any future contractual liability and has no plan to enter into any 

contractual obligation within next one year other than normal course of business. 

Future capital expenditure 

The company does not have any plan for future capital expenditure in the near future other than normal course of business. 

13


VAT, income tax, customs duty or other tax liability 

VAT 

Except income from fees, commission and charges, all others income of the Company is exempted of VAT. 

Income tax 

The Company’s income tax status as on 30 June 2007 is given below: 

Assessment year Status 

2003 – 2004 Assessment completed and tax amount paid subsequently 

2004 – 2005 Appeal has been filed to the High Court on 03/09/2006 

2005 – 2006 Appeal has been filed to the High Court on 12/07/2007 

2006 – 2007 Return filed on 28/12/2006 but assessment not completed 

Custom duty or other liabilities 

There are no dues outstanding on account of Custom Duty or other tax liabilities. 

Operating lease agreement 

The company has not entered into any operating lease during the last five years preceding issuance of the prospectus except 

one car lease with United Leasing Co. Ltd. which was settled in 2003. 

Financial lease commitment 

In the financial year 2006-07 the company has entered into financial lease agreement for vehicle worth Tk 20 lac with Industrial 

and Infrastructure Development Finance Company Ltd. (IIDFC). As of June 2007 the written down value was Taka 19 lac. 

Personnel related scheme 

Gratuity 

The Company has a funded gratuity scheme for all eligible employees who complete minimum 5 years of confirmed service 

with the Company. Required amount of gratuity is calculated on the basis of last basic pay depending on the length of service 

for every completed year as well as proportionate to the fraction period of service as of the respective financial year. This 

scheme is approved by the National Board of Revenue (NBR) and administered by an independent Board of Trustees. 

Provident Fund 

The Company has a contributory provident fund for its regular employees. The fund is approved by the National Board of 

Revenue (NBR), administered separately by a Board of Trustees and is contributed equally by the Company and the 

employees. 

Training scheme 

DBH recognizes the importance of a planned and structured training and development system for employee as a key factor in 

achieving corporate objectives and continuous success. The company also believes in continuous training and development to 

help employees overcome any deficiencies they have to enable them to grow and contribute to the business more effectively. 

While personal development is the primary responsibility of the individual, the company will endeavor to provide training and 

development opportunities for all employees, to enable them to improve current performance, to enhance their promotional 

potential and to prepare for advancement. During the period under review DBH has organized customized training program 

for personal development. 6 persons were sent to India for functional training and attachment program. In addition, 6 

employees attended external training program. The Company also has carried out training programs for its employees for their 

personal development in recent days. 

14


Breakdown of issue expenses 

The total IPO expenses are estimated as follows: 

Particulars 

Amount in Tk 

Manager to the Issue fee 250,000 

Underwriting commission 262,500 

SEC fee: 

Application fee 10,000 

Consent fee 157,500 

Fees related to the stock exchanges: 

Application fee (DSE) 5,000 

Listing fees for stock exchanges (DSE & CSE) 1,010,000 

CDBL fees and expenses: 

Documentation fee 2,500 

Initial Public Offering fee 26,250 

Commission expenses: 

Bankers to the Issue commission 1,575,000 

Expenses related to printing and publications: 

Abridged version of prospectus 200,000 

Notice for subscription, lottery, refund etc. 240,000 

Printing of prospectus and forms 125,000 

Distribution and collection of forms and data processing 800,000 

Lottery related expenses including BUET fee 709,000 

Distribution of allotment letters and refund warrants 200,000 

Other expenses 7,250 

Total 5,580,000 

Revaluation of assets 

The Company has made no revaluation of any of its assets since inception. 

Transactions with subsidiary/holding company or associate companies 

The company has no subsidiary/holding company. Hence no transaction has taken place. 

Declaration for a Non-Banking Financial Institution 

We hereby declare that requirements have been met as specified in the Financial Institution Act, 1993 (Act No. 27 of 1993) 

under the Financial Institutions Regulation 1994. 

Sd/- 


Chairman 


Sd/- 


Director 


Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 

Nurul Huda 

Director 


Company Ltd. 

Sd/- 


Director 


Company Ltd. 

Sd/- 


Director 


Sd/- 


Director 


Sd/- 



15


Auditors’ certificate regarding allotment of shares to promoters or sponsor shareholders for consideration 

other than in cash 

This is to certify that Delta Brac Housing Finance Corporation Limited has not allotted any shares for consideration other 

than in cash to any shareholders, including its promoters and/or sponsor shareholders, up to 30 June 2007 except 200,000 

bonus shares issued against applicable issued share capital at the rate of 10%, for the year ended 30 June 2006. 

Dhaka, 04 October 2007 

Sd/- 

Hoda Vasi Chowdhury & Co 


Material information which is likely to have an impact 

There is no other material information which is likely to have an impact on the offering or change the terms and conditions 

under which the offer has been made to the public. 

Information regarding directorship 

Directors and officers 

Sl. Name of Directors Position Age Representative of 

No. 

(Years) 

Date of becoming 

a director for the 

first time 

Date of 

expiration of 

current term 

Period of 

nomination 

1 Mr. Faruq A. Choudhury Chairman 73 BRAC 05-05-1996 * ** 

2 Mr. Md. Aminul Alam Director 58 BRAC 23-12-2001 * ** 

3 Mr. Muhammad A. Ali Director 56 BRAC 20-03-2007 * ** 

4 Dr. Syed Mukarram Ali Director 69 Delta Life Insurance Company ltd. 21-07-1996 * ** 

5 Mr. Nurul Huda Director 47 Delta Life Insurance Company ltd. 12-12-2006 * ** 

6 Mr. Mohammed Syedul Islam Director 65 Delta Life Insurance Company ltd. 16-10-2005 * ** 

7 Dr. Kabir Hussain Choudhury Director 64 Green Delta Insurance Company Ltd. 09-09-2007 * ** 

8 Mr. Nasir A Choudhury Director 73 Green Delta Insurance Company Ltd. 05-05-1996 * ** 

9 Mr. Pradeep Kumar Mukherjee Director 48 HDFC Investments Ltd. 08-04-2002 * ** 

* According to the Articles of Association of the company, at the Ordinary General Meeting one third of the directors for the time being or if their 

number is not three or multiple of three then the number nearest to one third shall retire from office. 

** Until further intimation. 

16


Directors’ involvement in other organization including Managing Director 

Name and Position 

Involvement in other organization 

Name of the Organization 

Position 

Mr. Faruq A Choudhury, Chairman BRAC Member, Governing body 

Mr. Md. Aminul Alam, Director 

BRAC Bank Limited 

Documenta TM Ltd. 

Bangladesh Netting Factory Ltd. 

BRAC Karnafuli Tea Co. Ltd. 

BRAC Kaiyacherra Tea Co. Ltd. 

BRAC Banskhali Tea Co. Ltd. 

BRAC Kodala Tea Co. Ltd. 

Director 

Director 

Director 

Director 

Director 

Director 

Director 

Dr. Syed Mukarram Ali, Director 

Delta Hospital Ltd. (Formerly known as Delta 

Medical Center Ltd.) 

Delta Life Insurance Company Ltd. 


Director 

Mr.Pradeep Kumar Mukherjee, Director HDFC GM Eastern Region India 

Mr. Nurul Huda, Director 

Delta Life Insurance Co. Ltd. 


Director 

Director 


Mr. Nasir A Choudhury, Director 


Nascom (Pvt.) Ltd. 

Green Delta Financial Services Ltd. 

Jalalabad Telecom Ltd. 

Progressive Life Insurance Co. Ltd. 


Chairman & MD 

Director 

Director 

Director 

Dr. Kabir Hussain Choudhury, Director Green Delta Insurance Company Ltd Chairman 

Mr. Muhammad A Ali, Director 

BRAC BD Mail Network Ltd. 

BRAC Bank Ltd. 

Brac Enterprises 

Director 

Director 


Mr. Mohammed Syedul Islam, Director 

Delta Life Insurance Company Ltd. 


Director 

Director 


Mr. Q.M. Shariful Ala, Managing Director 

BRAC Bank Ltd. 

Mobil Jamuna Lubricants Ltd. 

Director 

Director 

Family relationship among Directors and top five Officers 

There is no family relationship among directors and top five officers. 

Short bio-data of the directors 

Mr. Faruq A. Choudhury 

Chairman 

Mr. Faruq A. Choudhury son of Late Gias Uddin A. Choudhury was born in 1934. 

He completed his B.A. (Honors) in English from University of Dhaka, Bangladesh. After having graduated from University of 

Dhaka in 1955, he entered the Pakistan Foreign Service in 1956. He studied International Law at the Fletcher School of Law and 

Diplomacy in Boston, USA and had his training in Britain and France. As a Diplomat, among many other capitals, he served in 

Beijing from 1962-1965. He was also Director in charge of China Desk during 1969 -71 in the Pakistan Foreign Office. In the 

initial days of Bangladesh, as one of the senior most Foreign Service officers available in Dhaka, he was involved in the setting 

up of the Foreign Ministry of the newly independent country. He was appointed as the first Chief of Protocol in the Bangladesh 

Foreign Ministry. He later on served as Deputy High Commissioner in the Bangladesh High Commission in London. He was, 

subsequently, appointed as Ambassador to the UAE from where he went as Ambassador to the European Economic 

Community and the Benelux Countries. He was additional Foreign Secretary from 1982-1984 and during that period acted as 

the Chief Coordinator of the Islamic Foreign Minister’s Conference held in Dhaka in 1983. He was Foreign Secretary of 

Bangladesh from 1984-1986. As the Foreign Secretary of the host country he acted as the Secretary General of the first SAARC 

Summit held in Dhaka in 1985. He served as Bangladesh High Commissioner to New Delhi from 1986-1992. In 1992 he retired 

from the Foreign Service. 

Since Mr. Choudhury’s retirement from the Government, he had been working with BRAC, which is the largest Non 

Governmental Organization involved in rural development, as Adviser and presently he is a member of the Governing Board 

of BRAC and BRAC University. 

17


Mr. Md. Aminul Alam 

Director 

Mr. Md. Aminul Alam, son of Late Mr. Abdur Rahman was born in 1949. 

He completed his M. Sc. (Physics) from University of Dhaka, Bangladesh. Mr. A. Alam has spent most of his career at BRAC, 

having joined as a Program Organizer in 1975. He continued as a Project Administrator, Regional Manager of the Rural Credit 

and Training Project, and Program Coordinator and Director of Field Operation of the Rural Development Program. In this 

position, Mr. Alam was extensively involved in the Micro-finance project and the implementation of the BRAC Textile Project 

and Dairy Project, as well as established BRAC Seed Production Farms and Seed Processing Plant. 

Presently he is holding the position of Deputy Executive Director in BRAC. As a representative of BRAC he has taken part in 

many national and international meetings, negotiations, workshops, seminars etc. inside and outside the country and he earned 

tremendous reputation as an authority in micro-credit and rural development. 


Director 

Dr. Syed Mukarram Ali son of Late Syed Majed Ali was born in 1938. 

Dr. Ali, Professor of Pathology, Bangladesh College of Physicians & Surgeons, did his M.B.B.S. from University of Dhaka in 

1964. Later on he did his M. R.C. in Pathology and F.R.C. in Pathology from Royal College of Pathologists, London in 1974 and 

1986 respectively. Presently he is the Managing Director for Delta Hospital Ltd. (formerly known as the Delta Medical Centre 

Ltd.). He is also a Sponsor Director of Delta Life Insurance Company Ltd. As A renowned personality of the country's medical 

field, Dr. Ali has published more than 20 publications in different medical journals. He also gathered experience in different 

arena of medical science at home and abroad. 


Director 

Dr. Kabir Hussain Choudhury son of Late Gausul Hussain Choudhury was born in 1943. 

Dr. Choudhury has completed his B.Sc. (Honors) and M.Sc in Chemistry from University of Dhaka. He had his MS and PhD 

from Manchester University, England in Pharmacy and afterwards he attained professional course CChem MRSC and FCS 

from London. Dr. Choudhury held several important positions including Advisor to the Ministry of Education, East Africa, 

and Ministry of Health, Kuwait. He is a Sponsor Director and presently Chairman of Green Delta Insurance Company Ltd. He 

was also a Sponsor Director of Delta Life Insurance Co. Ltd and Founder Director General of Bangladesh British Chamber of 

Commerce in UK. Apart from that he has professional experience as a visiting professor in various universities at home and 

abroad. Further more presently, he is the Vice Chancellor of Metropolitan University, Sylhet. 

Mr. Nasir A Choudhury 

Director 

Mr. Nasir A. Choudhury son of Late Khan Bahadur Gausuddin A. Choudhury was born in 1934. 

He is an M.A. in History and had experience in the field of insurance in different capacities. He is one of the leading 

personalities of the country's financial sector. Mr. Choudhury had been working as the General Manager in Sadharan Bima 

Corporation. He is the sponsor Director of Green Delta Insurance Co. Ltd. and has been working as the Managing Director of 

the company since its inception in 1986. He is also the former Chairman of Bangladesh Insurance Association, and currently 

Director of Federation of Bangladesh Chamber of Commerce & Industry (FBCCI), Director of International Chamber of 

Commerce (ICC) Bangladesh, Vice Chairman of Bangladesh-German Chamber of Commerce & Industry (BGCCI) and Director 

of Dhaka Stock Exchange Ltd. Mr. Choudhury is also involved in trading business. A philanthropic person, Mr. Choudhury is 

also a Rotarian. 

Mr. Nurul Huda 

Director 

Mr. Nurul Huda son of Mr. Tahir Ali was born in1960. 

Mr. Huda is a successful young business entrepreneur and he completed his Masters in Management from the University of 

Dhaka in 1984. He is the region chairperson, Dist. 315 B2 of Lions Club International, Bangladesh and life member of Lions 

Blood Bank and Bangladesh Lions Foundation (BLF). He is also a Sponsor Director of Delta Life Insurance Company Limited 

and Delta Hospital Ltd (formerly known as Delta Medical Centre Limited). 

18


Mr. Mohammed Syedul Islam 

Director 

Mr. Mohammed Syedul Islam son of Mvi Hedayet Ali was born in 1942. 

He did his B.A. Honours and M.A. from Rajshahi University. A former banker with local and international experience and 

specialization in treasury function, investment, bills, credit and marketing, Mr. Islam is involved with number of business 

enterprises of different sectors like life insurance, medical, garments etc. He is a life member of Institute of Bankers of 

Bangladesh and Lions Club International, Bangladesh. He is a Sponsor Director of Delta Life Insurance Company Ltd, a leading 

life insurance company and Delta Hospital Ltd (formerly known as Delta Medical Centre Ltd). 

Mr. Muhammad A Ali 

Director 

Mr. Muhammad A. (Rumee) Ali son of Late Abdul Hady Talukdar was born in 1951. 

Mr. Ali did his Bachelor and Masters in Economics from University of Dhaka. Since 1984, he served leading foreign commercial 

bank namely Grindlays Bank Plc, (subsequently ANZ Grindlays Bank) and then Standard Chartered Bank, another leading 

foreign commercial bank and held several senior and important positions both in Bangladesh and abroad. Mr. Ali was also the 

first Bangladeshi CEO of Standard Chartered , Bangladesh. 

Mr. Ali had also worked for Bangladesh Bank in the capacity of Deputy Governor from 2002 to 2006. During his tenure he had 

overall responsibility of several departments of the Central Bank including Banking Inspection, Offsite Supervision, Anti 

Money Laundering Dept, IT Operations Dept., Bangladesh Bank Training Academy, Credit Information Bureau. He has been 

involved successfully in several reform initiatives of the central bank from time to time. Mr. Ali is currently working as the 

Managing Director of Brac Enterprises and is also a Director of BRAC Bank Ltd. 

Mr. Pradeep Kumar Mukherjee 

Director 

Mr. Pradeep Kumar Mukherjee son of Late Sreekanta Mukherjee was born in 1959. 

He is a Chartered Accountant and he worked for a large audit firm before joining Housing Development Finance Corporation 

Limited (HDFC), India. He has been working in different capacities for HDFC of India since 2001 and presently working as 

General Manager, Eastern Region of HDFC India. His current responsibilities include oversight of operation and 

administration of the HDFC branches in Eastern and North Eastern India. A member of Rotary Club, Mr. Mukherjee is 

interested in music, reading and wildlife. 

Mr. Quazi Md. Shariful Ala 


Mr. Quazi Md. Shariful Ala son of Late Dr. Quazi Md. Shamsul Ala was born in 1960. 

Mr. Ala is a Chartered Accountant from the Institute of Chartered Accountants in England & Wales and also has a first class 

honours Bachelors degree in Economics from the London School of Economics, University of London, UK. 

Mr. Ala also has around seven years of work experience with the London office of Price Waterhouse (presently Price 

waterhouseCoopers one of the big four international audit and financial consultancy firms worldwide). Whilst at Price 

Waterhouse, Mr. Ala had exposure to some of the largest listed companies in the UK including Shell Group, Unilever, JP 

Morgan etc. He has more than 24 years of experience working primarily in the financial sector both in Bangladesh and in the 

United Kingdom. Currently, he is the Managing Director and Chief Executive Officer of Delta Brac Housing Finance 

Corporation Ltd. (DBH). DBH is the country's first private sector international joint-venture housing finance company. Mr. Ala 

joined DBH at the start-up of the joint venture in 1997. He is also a Director of BRAC Bank Ltd. and Mobil Jamuna Lubricants 

Ltd. 

Credit Information Bureau (CIB) report 

Neither the company nor any of its directors or shareholders who hold 5% or more shares in the paid- up capital of the issuer is 

loan defaulter in terms of the CIB Report of the Bangladesh Bank. 

19


Description of senior executives and departmental heads 

Name Position Educational Qualification Date of Joining in the 

Company 

Mr. Q. M. Shariful Ala Managing Director B.Sc (Economics), London School of 

Economics; Chartered Accountant, 

Institute of Chartered Accountants in 

England & Wales 

Name(s) of organization(s) where 

worked during the last five years 

1 July 1997 DBH 

Mr. Ishtiaq H. 

Chowdhury 

Head of Operations MBA from IBA 28 November 1999 DBH 

Mr. S.H. Aslam Habib Head of Finance & 

MBA from IBA 1 October 1996 DBH 

Resources and Company 

Secretary 

Mr. A. Farjad Ahmed Head of Credit B.Sc. in Finance from Rutgers 

University, USA. 

23 May 2000 DBH 

Mr. Hassan I. Yussouf Head of IT MBA from IBA 

Civil Engineer, BIT, Rajshahi 

19 July 1998 DBH 

Mr. Tanvir Ahmed 

Head of Human 

Resources 

MSS, University of Dhaka. 

MBA, IIUC. Post Graduation 

Diploma in Personnel Management, 

BIM 

16 September 2004 Worked in Cemex Cement Bangladesh 

Ltd 

Involvement of Directors and Officers in Certain Legal Proceedings 

No director or officer of the Company was involved in any of the following types of legal proceedings in the last ten years: 

(a) 

(b) 

Any bankruptcy petition filed by or against any company of which any officer or director of the issuer company filing the 

prospectus was a director, officer or partner at the time of the bankruptcy. 

Any conviction of director, officer in a criminal proceeding or any criminal proceeding pending against him. 

(c) Any order, judgment or decree of any court of competent jurisdiction against any director, officer permanently or 

temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director or officer in any type of 

business, securities or banking activities. 

(d) Any order of the Securities and Exchange Commission, or other regulatory authority or foreign financial regulatory 

authority, suspending or otherwise limiting the involvement of any director or officer in any type of business, securities or 

banking activities. 

Certain Relationships and Related Transactions 

Transaction with related parties 

Neither proposed any transaction nor had any transaction during the last three years, between the issuer and any of the 

following persons: 

(a) Any director or executive officer of the issuer; 

(b) Any director or officer; 

(c) Any person owning 5% or more of the outstanding shares of the issuer; 

(d) Any member of the immediate family (including spouse, parents, brothers, sisters, children, and in-laws) of any of the 

above persons 

(e) Any transaction or arrangement entered into by the issuer or its subsidiary for a person who is currently a director or in 

any way connected with a director of either the issuer company or any of its subsidiaries/holding company or associate 

concerns, or who was a director or connected in any way with a director at any time during the last three years prior to the 

issuance of prospectus. 

(f) Any loan either taken or given from or to any director or any person connected with the director, any loan taken from any 

such person who did not have any stake in the issuer, its holding company or its associate concerns prior to such loan. 

20


(g) Any director holding any position, apart from being a director in the issuer company, in any company, society, trust, 

organization, or proprietorship or partnership firm. 

except transactions mentioned in Note 30 of the audited financial statements for the year ended 30 June 2007 and in addition 

the following transaction - 

Loan given to director 

The Company has a loan to one of its directors, sanctioned amount of this loan is Tk 12.81 lac and outstanding amount as of 

June 30, 2007 is Tk 1.46 lac. There is no other receivable from its directors or its associated undertakings as on June 30, 2007 

Year Transaction with Status Nature of transaction 

Amounts Outstanding amount 

in Lac Taka 

in Lac Taka 

2007 Md. Aminul Alam Representative Director of BRAC Housing Loan 12.81 1.46 



Loan given to employees 

Sl. 

No. 

Name of Borrower Designation Type of loan Amount outstanding 

as on 30-06-07 

Taka 

1 Ishtiaq Hussen Chowdhury Head of Operations Housing loan 4,378,966 

2 S.H.Aslam Habib Head of Finance & Resources Housing loan 1,830,051 

and Company Secretary 

3 Alamzeb Farjad Ahmed Head of Credit Housing loan 2,760,793 

4 Md.Hassan Iftekhar Yussouf Head of IT Housing loan 1,958,005 

5 Oliul Haque Khandaker Assistant Manager Housing loan 1,049,218 

6 Golam Murshid Manager Housing loan 1,999,479 

7 A K M Tanvir Kamal Head of Branch Housing loan 2,089,326 

8 Latiful Mannan Chowdhury Assistant Manager Housing loan 215,133 

9 Mohammad Shohidul Islam Khan Assistant Manager Housing loan 227,375 

10 Mainul Hossain Chowdhury Senior Officer Housing loan 1,247,774 

11 Md. Monir hasan Assistant Manager Housing loan 260,668 

12 Md Jafarullah Bhuiyan Assistant Manager Housing loan 203,650 

13 Dominic D` Cruze Manager Housing loan 3,345,016 

14 Md. Shafiqul islam Executive Housing loan 293,547 

15 Hasan Arif Executive Housing loan 296,784 

16 Md. Sazzad hossain Senior Executive Housing loan 965,480 

17 Md. Zakaria eusuf Head of Branch Housing loan 113,624 

18 Nasimul Baten Head of Branch Housing loan 3,994,654 

19 A.S.M. Muahidur Rahman Manager Housing loan 489,994 

20 Md. Fakrul Amin Manager Housing loan 56,741 

21 Sayeed Kabir Chowdhury Senior Officer Housing loan 76,700 

22 Ehsanul Shamim Senior Executive Housing loan 275,688 

23 Md. Kyser hamid Executive Housing loan 133,677 

24 Md. Amirul islam Officer Housing loan 144,924 

25 Shamim Suhrawardy Assistant Manager Housing loan 355,990 

Total 28,763,257 

Staff car loan & salary advances 

Sl. Name 

Amount 

No. 

1 Ashfakul Islam 8,483 

2 Mostafa Kamal 204,128 

3 Saiyaf Ejaj 46,976 

4 Mostafiduzzaman 243,554 

5 Zakir Hossain 266,618 

6 Kh Satil Sayeed 268,793 

7 Zakaria Eusuf 443,788 

8 Aminul Islam 460,848 

9 Mohaedul Mowla 512,056 

10 Tanvir Kamal 530,103 

11 Nasimul Baten 574,124 

12 Md. Monir Hasan 50,000 

13 Golam Murshid 150,000 

14 Md. Shafiqul Islam 35,000 

Total 3,794,471 

Directors’ facilities 

The Directors did not enjoy any interest, any facilities, whether pecuniary or non-pecuniary excepting fee for attending in the 

Meetings of the Board of Directors. 

21


Remuneration paid to top five officers 

Sl. 

No. 

Executive Compensation 

Name of the Employee Position Total remuneration paid for the 

Year ended 30-06-2007 

1 Mr. Q. M. Shariful Ala Managing Director 6,490,000 

2 Mr. Ishtiaq H. Chowdhury Head of Operations 2,949,237 

3 Mr. S.H. Aslam Habib Head of Finance & Resources and Company Secretary 2,576,778 

4 Mr. A. Farjad Ahmed Head of Credit 2,303,421 

5 Mr. Hassan I. Yussouf Head of IT 1,915,797 

Aggregate amount of remuneration paid to directors and officers 

Group 


Amount Paid for the 

year ended 30-06-2007 

Directors’ fee Tk 309,400 

Salaries & benefits - including management emoluments Tk 65,640,662 

The company did not pay any remuneration to any director who was not an officer during the last accounting year. 

Future compensation 

There is no contract with any director or officer for future compensation. 

Pay increase intention 

Periodical review of salary and benefits of the employees will be made depending on the growth of the company’s operation. 

Options granted to Directors, Officers and Employees 

The company has not granted any option to directors, officers or employees. 

Transaction with the Directors and Subscribers to the Memorandum 

(a) The Directors and Subscribers to the memorandum have not received any benefits directly or indirectly other than 

dividend and Directors’ fees during the last five years. The issuer also has not received any assets, services or other 

consideration from its Directors and Subscribers to the memorandum except fund against allotment of shares. 

(b) No assets were acquired or are to be acquired from the Directors and Subscribers to the memorandum 

except the following Loan given to a Director: 

The company has sanctioned loan of Tk 12.81lac to one of its Directors and outstanding amount as of 30 June 2007 is Tk 1.46 lac. 

There is no other receivable from its Directors or its associated undertakings as on 30 June 2007. 

Sl. Name Status Nature of transaction Outstanding amount 

No. 

as on 30 June 2007 

1 Md. Aminul Alam Representative Director of BRAC Housing Loan Tk 146,984 

22


Tangible assets per share 

Sl. Particulars Taka 

As on June 30, 2007 

1 Ordinary Share Capital 220,000,000 

2 Reserves 240,809,929 

3 Retained Earnings 10,727,280 

4 Net Asset (1+2+3) 471,537,209 

5 Less: Intangible Asset 214,345 

6 Net Tangible Asset (4-5) 471,322,864 

7 Total Ordinary Share 2,200,000 

8 Net tangible assets per share (6/7) 214 

Shareholding structure as on 30 June 2007 

Ownership of the Company’s Securities 

Sl. 

No. 

Name of Shareholder Address Status 

1 Delta Life Insurance Company 

Limited 

2 Green Delta Insurance Company 

Limited 

90-91 Motijheel C/A, 

Dhaka-1000 

2, Dilkusha C/A, 

Dhaka-1000 

3 BRAC 75, Mohakhali C/A, 

Dhaka 

4 Mr. Faruq A. Choudhury House#14, Road#11, 

Dhanmondi R/A, Dhaka 

5 Dr. Salehuddin Ahmed House#10, Road#1, Section#7, 

Uttara, Dhaka 

6 Mr. Q. M. Shariful Ala House#37, Road#7, 

Banani, Dhaka 

7 International Finance Corporation 2121 Pennsylvania Avenue, N.W. 

Washington D.C. 20433, USA 

8 HDFC Investments Limited Ramon House, 169 Backboy Reclamation, 

Mumbai-400020, India 

Director 

Represented by 

Dr. Syed Mukarram Ali, 


& 

Mr. Mohammed Syedul Islam 

Director 


Mr. Nasir A Choudhury 

& 


Director 


Mr. Faruq A Choudhury, 


& 

Mr. Muhammad A Ali 

No. of 

Shares 

% of total 

Shareholding 

550,000 25.00000 

439,999 19.99995 

549,998 24.99990 

Shareholder 1 0.00005 



Shareholder 330,000 15.00000 

Director 



330,000 15.00000 

Total 2,200,000 100.00000 

Securities owned by the officers 

No share or security is held by any officer of the company except 1 share held by Mr. Q. M. Shariful Ala, the Managing Director 

of the company. 

23


Determination of Offering Price 

The offering price of the common stock of Delta Brac Housing Finance Corporation Ltd. has been determined by assessing the 

Net Asset Value (NAV).The financial calculations presented below are form the audited accounts as on 30 th June 2007. 

Net Asset Value per share 

Sl. Particulars Taka 

As on June 30, 2007 

1 Ordinary Share Capital 220,000,000 

2 Retained Earnings 10,727,280 

3 Reserves 240,809,929 

4 Total Shareholders' Equity (1+2+3) 471,537,209 

5 No of Share outstanding 2,200,000 

6 Net Asset Value Per Share (4/5) 214 

Net Asset value per share of offering price of TK 210 each (including a premium of Tk 110 per share) is Tk 214, which is more 

than the offering price. So the premium of Tk 110 appears to be justified. 

Market for the Securities Being Offered 

The issuer shall apply to: 

Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited 

9/F Motijheel C/A, CSE Building, 1080 Sk. Mujib Road 

Dhaka-1000 

Agrabad, Chittagong-4100 

Within 7(seven) working days from the date of consent accorded by the Commission to issue prospectus. 

Declaration about listing of shares with the stock exchange(s) 

None of the stock exchange(s), if for any reason, grants listing within 75 days from the closure of subscription, any allotment in 

terms of this prospectus shall be void and the company shall refund the subscription money within fifteen days from the date 

of refusal for listing by the stock exchanges, or from the date of expiry of the said 75 (seventy five) days, as the case may be. 

In case of non-refund of the subscription money within the aforesaid fifteen days, the company directors, in addition to the 

issuer company, shall be collectively and severally liable for refund of the subscription money, with interest at the rate of 2% 

(two percent) per month above the bank rate, to the subscribers concerned. 

The issue manager, in addition to the issuer company, shall ensure due compliance of the above mentioned conditions and 

submit compliance report thereon to the Commission within seven days of expiry of the aforesaid fifteen days time period 

allowed for refund of the subscription money. 

Trading and settlement 

Trading and settlement regulation of the stock exchanges shall apply in respect of trading and settlement of the shares of the 

Company. 

Description of Securities outstanding or Being Offered 

Dividend, voting, pre-emption rights 

The Share Capital of the company is divided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms 

of the relevant provisions of the Companies Act 1994 and the Articles of Association of the company. All shareholders shall 

have the usual voting right voting right in person or by proxy in connection with, among others, election of Directors & 

Auditors and other usual agenda of General Meeting – Ordinary or Extra Ordinary. On a show of hand, every shareholder 

present in person and every duly authorized representative of a shareholder present at a General Meeting shall have one vote 

and on a poll every shareholder present in person or by proxy shall have one vote for every share held by him or her. 

In case of any additional issue of shares for raising further capital the existing shareholders shall be entitled to Right Issue of 

shares of in terms of the guidelines issued by the SEC from time to time. 

24


Conversion and liquidation rights 

In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, 

the shares of the Company are freely transferable. The Company shall not charge any fee for registering transfer of shares. No 

transfer shall be made to a firm, an infant or person of unsound mind. 

Dividend policy 

a) The profit of the Company, subject to any special right relating thereto created or authorized to be created by the 

Memorandum of Association and subject to the provisions of the Articles of Association, shall be divisible among the 

members in proportion to the amount of capital paid-up on the shares held by them respectively. 

b) No larger dividend shall be declared than is recommended by the Directors, but the Company in its General Meeting may 

declare a smaller dividend. The declaration of Directors as to the amount of Net Profit of the Company shall be conclusive. 

c) No dividend shall be payable except out of the profits of the Company or any other undistributed profits. Dividend shall 

not carry interest as against the Company. 

d) The Directors may from time to time pay the members such interim dividend as in their judgment the financial position of 

the Company may justify. 

e) A transfer of shares shall not pass the right to any dividend declared thereon before the registration of transfer. 

f) The proposed dividend amounting Tk. 66,000,000 for the year 2006-2007 has been approved in the 11 th Annual General 

Meeting (AGM) of the company dated December 09, 2007. Subsequently it will be paid only to the existing shareholders 

and the new shareholders of IPO floating will not be eligible to such dividend. 

Other rights of stockholders 

In terms of the provisions of the Companies Act 1994, Articles of Association of the Company and other relevant rules in force, 

the shares of the Company are transferable. The Company shall not charge any fee, other than Government duties for 

registering transfer of shares. No transfer shall be made to a minor or person of unsound mind. 

The Directors shall present the financial statements as required under the law & International Accounting Standard. Financial 

statements will be prepared in accordance with the International Accounting Standards consistently applied throughout the 

subsequent periods and present with the objective of providing maximum disclosure as par law and International Accounting 

Standard to the shareholders regarding the financial and operational position of the company. The shareholders shall have the 

right to receive all periodical statement and reports, audited as well as unaudited, published by the company from time to time. 

The shareholder holding minimum of 10% shares of paid-up capital of the company shall have the right to requisition Extraordinary 

General Meeting of the company as provided for the section 84 of the Companies Act 1994. 

Preference Share 

Pursuant to a subscription agreement executed with the Industrial Promotion and Development Company of Bangladesh 

Limited (IPDC) on 31 December 2000 the Company issued redeemable, non convertible and cumulative preference shares 

carrying preferential rights which is liable to be redeemed on 01 July 2014 including the premium amount of Taka 249,900 per 

share as per terms of the subscription agreement and the subsequent amendment thereto. Dividends falling due on these shares 

are given in Note 27 of Audited accounts for the year-ended 30 June 2007. The holders of preference shares shall not be entitled 

to vote on or to move to or second any resolution. The holders of preference shares have the right in winding up of the 

Company to payment of the redemption amount and any unpaid dividends in priority to any return of capital to the holders of 

all other classes of shares. There is no sinking fund provision to the preference shares outstanding. 

25


Debt Securities 

Existing Debt Securities 

Debenture 

The Company has issued seven years’ term non-convertible debentures of Tk 65 million under private placement on 10 April 

2001 those were subscribed by BRAC, Green Delta Insurance Company Limited and National Life Insurance Company 

Limited. The detail features of the said bond is given below: 

Sl No. Name of subscribers 

Principal outstanding Rate of Interest 

Date of Maturity 

as on 30 June 2007 

Taka 

1 BRAC 4,285,704 13.5% p.a. 10 April, 2008 

2 Green Delta Insurance Company Limited 

3,571,420 

13.5% p.a. 10 April, 2008 

3 National Life Insurance Company Limited 

1,428,568 

13.5% p.a. 10 April, 2008 

Total 9,285,692 

The non-convertible debentures are redeemable at par in seven equal annual installments by the Company while the 

subscribers have the option to redeem the balance amount at the end of the fifth year. 

There is no sinking fund provision to these debentures outstanding, and no subordination provisions and no trustee to the 

issue. The agreement underlying these securities does not require maintenance of asset ratios. The agreement implies no 

restriction on the issuance of additional debt. 

Envisaged Debt Securities 

Zero Coupon Bonds 

The Company is planning to issue debt securities in the form of Non-Convertible Zero Coupon Bonds. In the last Annual 

General Meeting, the Shareholders have approved issuance of Zero Coupon Bonds up to Taka 200 crore. Upon approval from 

the Bangladesh Bank and Securities and Exchange Commission Bangladesh, DBH will issue such bonds that would be issued in 

series and would worth Taka 150 crore. The rate of return for such issue would be 8.00% per annum equivalent to 14.55% (for 

institutions under 45% tax bracket) of other comparable instruments because of the tax exemption benefit. The first redemption 

will be on the expiry of 15 th month of the issue and thereafter every quarter till the maturity up to 5 years. Date of redemption 

will depend on the actual date of issue of the instruments. The face value is redeemable only at maturity. There is no sinking 

fund provision to the bonds and no subordination provisions. The Company is planning to issue without appointing trustee, 

subject to approval from Securities and Exchange Commission and Bangladesh Bank to such issue, as there will be institutional 

investors who have all the capacity to make their own investment decision and can deal directly with DBH. 

In the last Annual General Meeting, the Shareholders also have approved Mortgage Backed Securitization up to Taka 200 crore. 

The process for this Mortgage Backed Securitization has not yet started. 

Subordinated loan 

The company received a subordinated loan of EURO 1 million (BDT 67.32 million) in equivalent Taka from Netherlands 

Development Finance Company (FMO) in 2003. The subordinated loan of BDT 67.32 million is unsecured and is to be paid in 

local currency over a term of 10 years including a grace period of 1 year. 

26


Lock-in on Sponsors’ Shares 

All issued shares of the issuer at the time of according consent to public offering shall be subject to a lock-in period of three 

years from the date of issuance of prospectus or commercial operation, whichever comes later. 

Provided that the persons, other than directors and those who hold 5% or more, who have subscribed to the shares of the 

company within immediately preceding two years of according consent, shall be subject to a lock-in period of one year from 

the date of issuance of prospectus or commercial operation, whichever comes later. 

Sl. Name Status No. of 

shares 

hold 

Amount 

Taka 

% 

holding 

Date of 

acquisition 

Expire date 

of lock-in 

1 Delta Life Insurance Company Limited Shareholder 550,000 55,000,000 25.00000 May 11, 1996 January 26, 2011 

2 Green Delta Insurance Company Limited Shareholder 439,999 43,999,900 19.99995 May 11, 1996 January 26, 2011 

3 BRAC Shareholder 549,998 54,999,800 24.99990 May 11, 1996 January 26, 2011 

4 HDFC Investments Limited Shareholder 330,000 33,000,000 15.00000 June 28, 1998 January 26, 2011 

5 International Finance Corporation Shareholder 330,000 33,000,000 15.00000 June 28, 1998 January 26, 2011 

6 Mr. Faruq A. Choudhury Shareholder 1 100 0.00005 May 11, 1996 January 26, 2011 

7 Dr. Salehuddin Ahmed Shareholder 1 100 0.00005 May 11, 1996 January 26, 2011 

8 Mr. Q. M. Shariful Ala Shareholder 1 100 0.00005 May 11, 1996 January 26, 2011 

Total 2,200,000 220,000,000 100.00000 

Refund of Subscription Money 

In the case of non-allotment of securities, refund of subscription money of applicants resident in Bangladesh shall be made by 

account payee cheque/warrant payable to applicant. For this purpose the number of the bank account along-with name of 

bank and branch shall be indicated in the securities application form. 

Subscription by and Refund to non-resident Bangladeshi (NRB) 

(1) A non-resident Bangladeshi shall apply either directly by enclosing a foreign demand draft drawn on a bank payable at 

Dhaka, or through a nominee by paying out of foreign currency deposit account maintained in Bangladesh or in Taka, 

supported by foreign currency encashment certificate issued by the concerned bank, for the value of securities applied for 

through crossed bank cheque marking “Account Payee only”. 

(2) The value of securities applied for by such person may be paid in Taka or US Dollar or UK Pound Sterling or Euro at the 

rate of exchange mentioned in the securities application form. 

(3) Refund against over subscription shall be made in the currency in which the value of securities was paid for by the 

applicant through Account Payee bank cheque payable at Dhaka with bank account number, Bank’s name and Branch as 

indicated in the securities application form. 

Availability of securities 

Offer 

1. Shares 

Particulars No. of shares Amount in Tk 

A. 10% of IPO i.e. 50,000 Ordinary Shares shall be reserved for Non Resident Bangladeshis 50,000 10,500,000 

B. 10% of IPO i.e. 50,000 Ordinary Shares shall be reserved for Mutual funds and Collective 

50,000 10,500,000 

investment schemes registered with the Commission 

C. The remaining 80% of IPO i.e. 400,000 Ordinary Shares shall be opened for subscription by 

400,000 84,000,000 

the General Public 

Total 500,000 105,000,000 

27


2. All shares as stated in clause 1.A, 1.B and 1.C shall be offered for subscription and subsequent allotment by the issuer, 

subject to any restriction, which may be imposed, from time to time, by the Securities and Exchange Commission. 

3. In case of over-subscription under any of the categories mentioned in 1.A, 1.B and 1.C the Issue Manager shall conduct an 

open lottery of all the applications received under each category separately in accordance with the letter of consent issued 

by the Securities and Exchange Commission. 

4. In case of under-subscription under any of the 10% categories mentioned in 1.A and 1.B, the unsubscribed portion shall be 

added to the general public category and, if after such addition, there is over-subscription in the general public category, 

the issuer and the issue manager shall jointly conduct and open lottery of all the applicants added together. 

5. In case of under-subscription of the public offering, the unsubscribed portion of securities shall be taken up by the 

underwriter(s). 

6. The lottery as stated in clause (3) and (4) shall be conducted in presence of representatives form the issuer, the stock 

exchanges, and the applicants, if there be any. 

7. Applications must not be for less than 50 shares and must be multiple of 50 Shares. Any application not meeting these 

criteria will not be considered for allotment purpose. 

8. There is no founders’, management or deferred shares; it is also not presently intended to issue any preference shares. 

9. No payment has been or is intended to be made to the promoters, directors or other persons for promotion of the 

company. 

10. The minimum subscription on which Directors will proceed to allotment is the full amount of the present issue, which on 

the opinion of the Directors must be raised in order to provide fund required by the Company. 

Application for subscription 

1. Application for shares may be made for a minimum lot for 50 Ordinary shares to the value of Tk 10,500 respectively and 

should be made on the Company’s Printed Application forms. Application Form and Prospectus may be obtained from 

the Registered Office of the Company, members of Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. or 

from the Bankers to the Issue. In case adequate forms are not available, applicants may use photocopied/ 

cyclostyled/hand written/typed copies of the forms. Applications must not be for less than 50 shares. Any application not 

meeting this criterion will not be considered for allotment purpose. 

2. Joint application form for more than two persons will not be accepted. In the case of joint application each party must sign 

the application form. 

3. Application must be in full name of individuals or limited companies or trusts or societies and not in the name of firms, 

minors or persons of unsound mind. Applications from insurance, financial and market intermediary companies and 

limited companies must be accompanied by Memorandum and Articles of Association. 

4. An applicant cannot submit more than two applications, one in his own name and another jointly with another person. 

In case an applicant makes more than two applications, all applications will be treated as invalid and will not be 

considered for allotment purpose. In addition, whole or part of application money may be forfeited by the 

commission. 

5. Bangladeshi Nationals (including non-resident Bangladeshi Nationals working abroad) and Foreign Nationals shall be 

entitled to apply for shares. 

6. Payment for subscription by investors other than Non-Resident Bangladeshi may be made to the said branches/office of 

the banks mentioned below in Cash/Cheque/Pay Order/Bank Draft. The Cheque/Pay Order/Bank Draft shall be made 

payable to the bank to which it is sent and be marked “Delta Brac Housing Finance Corporation Ltd.” and shall bear the 

crossing “A/C Payee Only” and must be drawn on a bank in the same town of the bank to which application form is 

deposited. 

7. A Non-Resident Bangladeshi (NRB) shall apply against the IPO either directly by enclosing a foreign demand draft drawn 

on a bank payable at Dhaka, or through a nominee (including a Bank or a Company) by paying out of foreign currency 

deposit account maintained in Bangladesh, for the value of securities applied for. The value of securities applied for may 

be paid in Taka, US Dollar or UK Pound Sterling or EURO at the spot Buying (TT Clean) rate of exchange prevailing on 

the date of opening of subscription. Refund against over subscription of shares shall be made in the currency in which the 

value of shares applied for was paid by the applicant. Share application form against the quota for NRB shall be sent by 

the applicant directly along with a draft or cheque to the Company at its registered office. Copies of application form and 

28


prospectus shall be available with Bangladesh Embassy/High Commission in USA, UK, Saudiarabia, UAE, Qatar, Kuwit, 

Oman, Bahrain, Malaysia and South Korea and web site of the issuer, issue manager, DSE, CSE and the SEC. 

8. All completed application forms together with remittances for the full amount payable on application shall be lodged by 

investors other than Non-Resident Bangladeshis with the following branches of the Bankers to the Issue: 


Dhanmondi Branch, Dhaka 

Gulshan Branch, Dhaka 

Mirpur Branch, Dhaka 

Motijheel Branch, Dhaka 

Principal Branch, Dilkusha, Dhaka 

Shantinagar Branch, Dhaka 

Uttara Branch, Dhaka 

HSBC 



Head Office, Dhaka 

Local Office, Dhaka 

Chittagong Branch, Chittagong 

Rajshahi Branch, Rajshahi 

Khulna Branch, Khulna 

Barishal Branch, Barishal 

Sylhet Branch, Sylhet 

Bogra Branch, Bogra 


Banani Branch, Dhaka 


Elephant Road Branch, Dhaka 


Kawran Bazar Branch, Dhaka 

Main Branch, Dhaka 


Mohakhali Branch, Dhaka 


Satmosjid Road Branch, Dhaka 


Agrabad Branch, Chittagong 

Khatungonj Branch, Chittagong 


Naogaon Branch, Naogaon 



Babubazar Branch, Dhaka 

Bangshal Branch, Dhaka 


Dilkusha Branch, Dhaka 

Foreigh Exchange Branch, Dhaka 


Islampur Branch, Dhaka 

Jatrabari Branch, Dhaka 


Malibagh Branch, Dhaka 


Mitford Branch, Dhaka 

Moghbazar Branch, Dhaka 

Motijheel Main Branch, Dhaka 






Jubilee Road Branch, Chittagong 

O.R. Nizam Road Branch, Chittagong 

Cox's Bazar Branch, Cox's Bazar 

Laldighirpar Branch, Sylhet 

National Bank 


Bangshal Road Branch, Dhaka 

Dhanmodi Branch, Dhaka 



Foreigh Ex. Branch, Dhaka 


Imamganj Branch, Dhaka 








Narayanganj Branch, N'Gonj 


Khatunganj Branch, Chittagong 

KDA Branch, Khulna 



Asad gate Branch, Dhaka 





Eskaton Branch, Dhaka 

Gonakbari Branch, Dhaka 


IBB, Mirpur, Dhaka 



Mouchak Branch, Dhaka 

Moulvi Bazar Branch, Dhaka 

Panthapath Branch, Dhaka 

Pragati Shoroni Br., Dhaka 


SBC Tower Branch, Dhaka 


Madhabdi Branch, Narsingdi 

Narayangonj Br., Narayanganj 

Shimrail Branch, Narayangonj 


IBB, O.R.Nizam Rd., Chittagong 

IBB, Phartali, Chittagong 

Jubilee Road Br., Chittagong 

Khatungonj Br., Chittagong 

Court Road Branch, Sylhet 

IBB, Amberkhana, Sylhet 

Sylhet (Laldighirpar) Br., Sylhet 


Jessore Branch, Jessore 

Barishal Branch, Barisal 



Tongi Branch, Tongi 


Aganagar Branch, Dhaka 

Agargaon Branch, Dhaka 



Corporate Branch, Dhaka 




Karwan Bazar Branch, Dhaka 


New Elephant Road Br., Dhaka 

New Eskaton Branch, Dhaka 

Principal Branch, Dhaka 



CDA Avenue Branch, Chittagong 



Chhagalnaiya Branch (Islami Banking), Feni 

Cox’s Bazar Branch (Islami Banking), Cox’s Bazar 

Bandar Bazar Branch (Islami Banking), Sylhet 

Chouhatta Branch, Sylhet 




Dilkusha Corporate Branch, Dhaka 

Gulshan Corporate Branch, Dhaka 


Sena Kallyan Bhaban Branch, Dhaka 

9. The IPO subscription money collected from investors (other than Non-Resident Bangladeshis in US Dollar or UK Pound 

sterling or EURO) by the bankers to the issue will be remitted to the Company’s MSTD A/C # 13100000684 with 

Southeast Bank Limited, Motijheel (IslamicBanking) Branch, Dhaka, Bangladesh for this purpose. 

10. The subscription money collected from Non-Resident Bangladeshis in US Dollar or UK Pound Sterling or EURO shall be 

deposited to three FC accounts opened by the Company for IPO purpose are as follows: 

Sl. 

No. 

1 

Name of the FC Accounts Account No. Bank & Branch Currency 

Delta Brac Housing Finance 

Corporation Ltd. 

15100000131 

Southeast Bank Ltd., Motijheel Branch 

(Islamic Banking) 

US Dollar 

2 -do- 16200000015 -do- GBP 

3 -do- 15100000146 -do- EURO 

11. The Company shall close the accounts mentioned above after refund of over-subscription, if any. 

APPLICATIONS NOT IN CONFORMITY WITH THE ABOVE REQUIREMENTS AND THE INSTRUCTIONS PRINTED ON THE APPLICATION FORM ARE 

LIABLE TO BE REJECTED. 

Allotment 

The company shall issue share allotment letters to all successful applicants within 6 (six) weeks from the date of the 

subscription closing date. At the same time, the unsuccessful applicants shall be refunded with the application money within 6 

(six) weeks from the closing of the subscription date by Account Payee Cheque without interest ‘payable at 

Dhaka/Chittagong/Khulna/Rajshahi/Barisal/Sylhet/Bogra, as the case may be. A compliance report shall be submitted with 

the Commission within 7(seven) weeks from the date of closure of subscription. 

29


Underwriting of shares 

The Initial Public Offering (IPO) is for 500,000 ordinary shares of Taka 210 each including a premium of Taka 110 per share 

amounting to Taka 105,000,000. As per SEC’s guideline 50% of the said amount i.e. 250,000 ordinary shares of Tk 210 each 

including a premium of Taka 110 per share amounting to Tk 52,500,000 has been underwritten by the following institutions: 

Sl. 

No. 

Name and address of underwriters 

1 Prime Finance & Investment Limited 

63, Dilkusha C/A (3rd Floor), 

Dhaka 1000 

2 Prime Bank Ltd. 

Adamjee Court Annex Building-2, 

119-120 Motijheel C/A,Dhaka. 

3 Green Delta Insurance Co. Ltd. 

Hadi Mansion (4th Floor), 2 Dilkusha C/A 

Dhaka 1000 

Number of shares 

underwritten 

Amount (Tk) 

62,500 13,125,000 

62,500 13,125,000 

125,000 26,250,000 

Total 250,000 52,500,000 

Principal terms and conditions of underwriting agreement 

1. If and to the extent that the shares offered to the public by a Prospectus authorized hereunder shall not have been 

subscribed and paid for in cash in full by the closing date, the Company shall within 10 (ten) days of the closure of 

subscription call upon the underwriter in writing with a copy of said writing to the Securities and Exchange Commission, 

to subscribe for the shares not subscribed by the closing date and to pay for in cash in full for such unsubscribed shares in 

cash in full within 15 (fifteen) days of the date of said notice and the said amount shall have to be credited into shares 

subscription account within the said period. 

2. If payment is made by Cheque/Bank Draft by the underwriter it will be deemed that the underwriter has not fulfilled his 

obligation towards his underwriting commitment under the Agreement, until such time as the Cheque/Bank Draft has 

been en-cashed and the Company’s account credited. 

3. In any case within 7 (seven) days after the expiry of the aforesaid 15 (fifteen) days, the Company shall send proof of 

subscription and payment by the underwriter to the Commission. 

4. In the case of failure by the underwriter to pay for the shares under the terms mentioned above, the said Underwriter will 

not be eligible to underwrite any issue, until such time as he fulfils his underwriting commitment under the Agreement 

and also other penalties as may be determined by the Commission may be imposed on him. 

5. In case of failure by any underwriter to pay for the shares within the stipulated time, the Company/Issuer will be under 

no obligation to pay any underwriting commission under the Agreement. 

6. In case of failure by the Company to call upon the underwriter for the aforementioned purpose within the stipulated time, 

the Company and its Directors shall individually and collectively be held responsible for the consequences and/or 

penalties as determined by the Securities and Exchange Commission under the law may be imposed on them. 

Underwriter’s right to represent in the Board of Directors of the Company 

The Underwriters shall not have any right to have any representatives in the Company’s Board of Directors. 

Officer or director of the underwriter(s) acting as Director of the Company 

Mr. Nasir A. Choudhury and Dr. Kabir Hussain Choudhury, the Managing Director and Chairman respectively of Green Delta 

Insurance Co. Ltd. - one of the underwriters, are directors of Delta Brac Housing Finance Corporation Ltd. 

30


Financial Statements 

AUDITORS’ REPORT 

To the shareholders of 

Delta Brac Housing Finance Corporation Limited 

We have audited the accompanying balance sheet of DELTA BRAC HOUSING FINANCE CORPORATION LIMITED as of 

30 June, 2007 and the related profit and loss account, statement of cash flow and statement of changes in equity for the year 

ended. The preparation of these financial statements is the responsibility of the company’s management. Our responsibility is 

to express an independent opinion on these financial statements based on our audit. 

We conducted our audit in accordance with Bangladesh Standards on Auditing (BAS). Those Standards require that we plan 

and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An 

audit also includes assessing the accounting principles used and significant estimates made by management, as well as 

evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 

In our opinion, the financial statements, prepared in accordance with International Financial Reporting Standards (IFRS) so far 

adopted in Bangladesh, give a true and fair view of the state of the company’s affairs as of 30 June 2007 and of the results of its 

operations and its cash flow for the year ended and comply with the Companies Act 1994, Financial Institutions Act 1993 the 

rules and regulations issued from time to time by the Bangladesh Bank and other applicable laws and regulations. 

We also report that: 

(a) 

we have obtained all the information and explanations which to the best of our knowledge and belief were 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 Company so far as it appeared from our 

examination of those books and proper returns adequate for the purposes of our audit have been received from branches 

not visited by us; 

(c) 

the Company’s balance sheet and profit and loss account along with the annexed notes 1 to 35 thereto dealt with by the 

report are in agreement with the books of account; 

(d) the expenditure incurred and payments made were for the purposes of the Company’s business; 

(e) 

adequate provisions have been made for housing loans considered to be doubtful; 

(f) 

the records and statements submitted by the branches have been properly maintained and consolidated in the financial 

statements; 

(g) the Company has followed the instructions issued by the Bangladesh Bank in the matters of housing loans classification, 

provisioning, and suspension of interest; and 

(h) 

the Company has so far complied with the relevant laws pertaining to reserves and maintenance of liquid assets. 

Dhaka, 23 SEP 2007 

Sd/- 



31



Balance Sheet as at 30 June 2007 

2006-2007 2005-2006 

Notes Taka Taka 

PROPERTIES & ASSETS 

Properties, plants & equipments - at cost less accumulated depreciation 3 42,084,417 37,285,707 

Intangible assets - at cost less accumulated amortization 4 215,345 219,905 

Housing loans - secured 5 7,364,599,324 5,593,707,135 

Deferred tax asset 10 14,143,721 9,295,044 

Current Assets 

Accounts receivable 6 53,234,118 34,888,904 

Advances, deposits & prepaid expenses 7 13,665,252 21,492,976 

Short term investments 8 1,898,321,238 951,130,054 

Advances against deposits 115,374,408 86,494,833 

Cash & bank balances 9 317,288,340 297,428,351 

2,397,883,356 1,391,435,118 

9,818,926,163 7,031,942,909 

CAPITAL & LIABILITIES 

Shareholders' Funds 

Share capital 11 220,040,000 200,040,000 

Share premium account 12 99,960,000 99,960,000 

320,000,000 300,000,000 

Reserves & surplus 

Statutory reserve 13 122,809,929 95,950,927 

Contingency reserve 14 100,000,000 60,000,000 

General reserve 15 18,000,000 18,000,000 

240,809,929 173,950,927 

Retained earnings: 

Proposed cash dividend 66,000,000 - 

Proposed stock dividend - 20,000,000 

Balance of retained earnings 10,727,280 20,348,551 

26 76,727,280 40,348,551 

317,537,209 214,299,478 

637,537,209 514,299,478 

Loan loss reserve 16 73,758,085 56,099,934 

Unsecured loans 

Subordinated loan 17 29,922,800 37,403,500 

Secured loans 

Term loans 18 1,289,866,697 550,528,122 

Debentures 19 - 9,285,692 

1,289,866,697 559,813,814 

Deposits 5,799,056,186 4,571,050,822 

Current Liabilities 

Provision for income tax 20 59,346,306 33,309,677 

Other liabilities & provisions 21 103,655,689 107,293,877 

Current portion of long term loans 22 290,879,854 133,095,684 

Accounts payable 23 664,745,460 567,077,401 

Bank overdrafts 200,157,877 182,498,722 

Short term loans 670,000,000 270,000,000 

1,988,785,186 1,293,275,361 

9,818,926,163 7,031,942,909 

The accompanying notes form an integral part of the financial statements. 

Signed in terms of our report of even date annexed. 


Sd/- Sd/- Sd/- 

Sd/- 

Faruq A. Choudhury Nasir A. Choudhury Q. M. Shariful Ala S. H. Aslam Habib 

Chairman Director Managing Director Company Secretary 

S 

Sd/- 

Hoda Vasi Chowdhuru Chowdhury && CoCo. 

CChartered Accountants 

32



Profit & Loss Account 

for the year ended 30 June 2007 

2006-2007 2005-2006 

Notes Taka Taka 

Operating revenue 

Interest income 1,169,068,170 812,420,254 

Fees and other charges on housing loans 42,740,430 30,462,381 

Other income 30,000 20,000 

1,211,838,600 842,902,635 

Operating expenses 

Interest expenses 805,094,994 540,567,470 

General & administrative expenses 24 110,571,671 79,799,898 

Professional fees 25 1,185,978 1,713,414 

Depreciation on fixed assets 7,790,022 4,449,548 

Amortization of computer softwere expenses 59,560 38,807 

924,702,225 626,569,137 

Operating profit 287,136,375 216,333,498 

Add / (Less) : Non-operating income ( expenses ) 

Profit/(loss) on disposal of fixed assets - (700,337) 

Transfer to loan loss reserve (general provision) (17,658,151) (10,975,923) 

Specific provision for doubtful accounts (9,323,167) - 

(26,981,318) (11,676,260) 

Profit before tax 260,155,057 204,657,238 

Less: Income tax expense 

Current tax 130,708,723 96,120,991 

Deferred tax (income) / expense (4,848,677) 1,089,513 

125,860,046 97,210,504 

Profit after tax transferred to retained earnings 26 134,295,011 107,446,734 

Earning Per Share (EPS) 56 45 


Sd/- Sd/- Sd/- Sd/- 



Signed in terms of our report of even date annexed. 


Sd/- Sd/- 

Hoda Vasi Chowdhury Chowdhuru && Co. Co 


33


Cash flows from operating activities: 

2006-2007 2005-2006 

Taka 

Taka 

Collection from operational income 1,193,018,586 852,162,642 

Payment for operational expenses (819,184,584) (488,559,015) 

Cash flows from operating profits before changes in 

373,834,002 363,603,627 

operating assets and liabilities 

Changes in operating assets and liabilities: 

Advances, deposits & prepaid expenses 7,827,724 (9,115,478) 

Short term investments (947,191,184) (105,851,502) 

Advances against deposits (28,879,575) (10,711,629) 

Housing finance (1,770,892,189) (1,174,230,678) 

Other liabilities & provisions 15,582,035 15,116,105 

Deposits 1,228,005,364 812,872,398 

Net cash from operating activities before income tax (1,121,713,823) (108,317,157) 

Advance payment of tax (104,672,094) (94,194,388) 

Net cash outflow from operation (1,226,385,917) (202,511,545) 

Cash flows from investing activities: 

Decrease in investments - 70,337,770 

Purchase of fixed assets (10,588,732) (12,652,743) 

Acquisition of intangible assets (55,000) - 

Sale proceed of fixed assets - 189,645 

Net cash (outflow) / inflow from investing activities (10,643,732) 57,874,672 

Cash flows from financing activities: 


Cash Flow Statement 


Receipt of term loans 1,014,000,000 250,000,000 

Repayment of term loans (116,877,229) (38,651,885) 

Repayment of subordinate loan (7,480,700) (7,480,700) 

Repayment of debentures & bonds (9,285,718) (9,285,718) 

Net drawdown of short term loans 400,000,000 (30,000,000) 

Financial lease obligation (68,590) - 

Dividend paid on preference shares (11,057,280) (8,000,000) 

Dividend paid on ordinary shares (30,000,000) (44,000,000) 

Net cash inflow from financing activities 1,239,230,483 112,581,697 

Net inflow/(outflow) in cash & cash equivalent 2,200,834 (32,055,176) 

Cash & cash equivalent (net off of bank overdraft) at the 

beginning of the year 

Cash & cash equivalent (net off of bank overdraft) at the 

end of the year 


114,929,629 146,984,805 

117,130,463 114,929,629 

Sd/- Sd/- Sd/- Sd/- 



34



Statement of Changes in Equity 

For the year ended 30 June 2007 


Particulars 

Share capital 

Share 

premium 

Statutory 

reserve 

General & 

other reserves 

Retained 

earnings 

Total 

Balance as on 01 July 2005 200,040,000 99,960,000 74,243,678 50,000,000 11,634,509 435,878,187 

Adjustment for implication of 

deferredtaxincomeuptothe 

year ended 30 June 2005 

Adjustment for dividend 

proposed for 2004-2005 

Net profit for the period ended 

30 June 2006 

- - - - 10,384,557 10,384,557 

- - - - 44,000,000 44,000,000 

- - - - 107,446,734 107,446,734 

Transferred to reserve funds - - 21,707,249 28,000,000 (49,707,249) - 

Dividend paid for previous year - - - - (44,000,000) (44,000,000) 

Interim dividend - - - - (30,000,000) (30,000,000) 

Preference share dividend - - - - (9,410,000) (9,410,000) 

Balance as at 30 June 2006 200,040,000 99,960,000 95,950,927 78,000,000 40,348,551 514,299,478 

Net profit for the period ended 

30 June 2007 

- - - - 134,295,011 134,295,011 

Transferred to reserve funds - - 26,859,002 40,000,000 (66,859,002) - 

Stock dividend issued for 

previous year 

20,000,000 - - - (20,000,000) - 

Preference share dividend - - - - (11,057,280) (11,057,280) 

Balance as at 30 June 2007 220,040,000 99,960,000 122,809,929 118,000,000 76,727,280 637,537,209 


Sd/- 

Faruq A. Choudhury 

Chairman 

Sd/- Sd/- Sd/- 

Nasir A. Choudhury Q. M. Shariful Ala S. H. Aslam Habib 

Director 


Company Secretary 

35


1 COMPANY AND ITS ACTIVITIES 

(a) Legal status 

Delta Brac Housing Finance Corporation Limited (here-in-after referred to as the Company) was 

incorporated as a public limited company and obtained the Certificate of Commencement of Business 

under Companies Act 1994 on May 11, 1996. The Company has also been granted license under the 

Financial Institutions Act 1993 on July 15, 1996. 

(b) Nature of business 

2 ACCOUNTING POLICIES 

2.1 Accounting convention and basis 

2.2 Interest on housing loans 

2.3 Foreign exchange 


Notes to the Financial Statements 


i) The principal activities of the Company during the year were providing loans for construction of 

houses, purchases of flats or houses, extension and improvement of existing houses or flats and purchase 

of housing plots. The Company also provides services for purchase, sale and transfer of real estate assets. 

ii) The Company has also various investment and financing products like term deposit scheme, 

cumulative deposit, double money deposit, monthly income deposit, easy way deposit, profit first deposit 

etc. for its individual and corporate clients. 

The financial statements have been prepared on a going concern basis and accrual method under 

historical cost convention and in accordance with generally accepted accounting principles. The 

preparation and presentation of the financial statements and the disclosures thereto have been made in 

conformity with Bangladesh Accounting Standards (BAS) and/or BFRS, the Companies Act 1994, the 

Financial Institutions Act 1993, and other applicable laws & regulations in Bangladesh and practices 

generally followed by Housing Finance Institutions. 

Repayment of mortgage loans are made by way of Equated Monthly Installments (EMI) consisting of 

principal and interest. There are two modes of interest calculation on housing loans i.e., monthly reducing 

or annual reducing method as per loan agreement between customer and DBH. EMI commences once 

the entire loans is disbursed. Pending commencement of EMIs, pre-EMI interest is payable every month. 

Foreign currency transactions are translated into Bangladeshi Taka at exchange rates prevailing at 

respective transaction dates. Balances in foreign currency bank account and loan account are translated at 

the year end exchange rate. 

2.4 Loan processing / servicing fee received 

Receipt of loan processing/servicing fees are recognized as income on the date of receipt while the 

refund there against, if applicable, are set off with income during the year of refund. 

36


2.5 Properties, plants & equipments, intangible assets and depreciation 

Tangible fixed assets are recorded at historical cost less accumulated depreciation. These are depreciated 

on reducing balance method using the following rates: 

Category of assets 

Rates of depreciation 

per annum 

Building 3% 

Furniture & Fixture 15% - 20% 

Equipment 20% -25% 

Vehicles 20% 

Pursuant to BAS - 17 "Leases" fixed asset (motor vehicle) acquired under finance lease is accounted for at 

the lower of present value of minimum lease payments under the lease agreement and the fair value of 

asset. The related obligation under the lease is accounted for as liability. Finance charges are allocated to 

accounting period in manner so as to provide a constant rate of charge on the outstanding liability. 

Intangible assets (computer software) are recorded at historical cost less accumulated amortization. These 

are amortized on reducing balance method using the rate at 25%. 

Depreciation on newly acquired assets are calculated from the month of acquisition and depreciation on 

assets disposed is charged up to the month of disposal. 

The rates of depreciation of fixed assets have been changed at the rate of 3% from 5% on building, 20% 

from 15% on office equipment, 15% from 10% on furniture & fixtures, 25% from 15% on computer, 

20% from 10% on office decoration and 25% from 15% on intangible assets. Had it been depreciated 

consistent to the past practice the depreciation would have been Tk 5.51 million thereby an additional 

charge of Tk 2.48 million during the year under review. 

2.6 Retirement benefit scheme 

i) Gratuity scheme 

The Company has a funded gratuity scheme for all eligible employees who completes minimum 5 years of 

confirmed service with the Company. Required amount of gratuity is calculated on the basis of last basic 

pay depending on the length of service for every completed year as well as proportionate to the fraction 

period of service as of the respective financial year. This scheme is approved by the National Board of 

Revenue (NBR) and administered by an independent Board of Trustees. 

ii) Contributory provident fund 

The Company has a contributory provident fund for its regular employees. The fund is approved by the 

National Board of Revenue (NBR), administered separately by a Board of Trustees and is contributed 

equally by the Company and the employees. 

2.7 Taxation 

(i) Current tax 

Provision for income tax has been made at best estimate keeping in view the provisions of Income Tax 

Ordinance 1984 and the relevant Finance Ordinance 2007. 

37


(ii) Deferred tax 

Pursuant to Bangladesh Accounting Standard - 12 "Income Taxes", the Company has adopted deferred 

tax for the first time as per requirements contained therein giving retrospective effect to the financial 

statements in compliance with BAS - 8 "Accounting Policies, Changes in Accounting Estimates and 

Errors". 

Deferred tax is provided using the asset & liability method for all temporary timing differences arising 

between the tax base of assets and liabilities and their carrying value for financial reporting purposes. Tax 

rate prevailing at the balance sheet date is used to determine deferred tax as the same rate is expected to 

be applicable at the time of settlement/adjustment of deferred tax asset or liability. 

2.8 Revenue recognition 

The revenue during the year is recognized as prescribed by BAS 18"Revenue Recognition''. 

Revenue is recognized on accrual basis except interest of the loan accounts considered as nonperforming. 

Interest income is suspended and full provision is made against the interest receivables on all 

non-performing loans which are treated as such when the installments are outstanding for more than six 

months. 

2.9 Interest suspense account 

Interest on non - performing loans are not recognized as revenue and credited to interest suspense 

account. 

2.10 Provision for doubtful accounts 

The Company's policy is to ensure that the balance of provision for doubtful accounts is adequate to 

cover the principal amount in respect of non-performing loans when the installments are outstanding for 

more than six months and accounts which are considered doubtful of recovery. 

2.11 Interest expense 

The Company has incurred interest expenses on account of term loan, deposit, debenture, overdraft and 

call loan. 

2.12 Liabilities and provisions 

All material liabilities and provisions have been included in the Financial Statements. 

2.13 Earnings per share 

Earnings Per Share (EPS) has been calculated in accordance with Bangladesh Accounting Standard - 33 

"Earnings Per Share" and shown on the face of profit and loss account. 

38


3 PROPERTIES, PLANTS & EQUIPMENTS - at cost less accumulated depreciation 

Particulars 

Balance as 

on 1 July 

2006 

Additions 

during the 

year 

C O S T 

Inter head 

transfer 

Disposals 

during the 

year 

Balance as 

on 30 June 

2007 

Balance as 

on 1 July 

2006 

D E P R E C I A T I O N 

Charged 

during the 

year 

Adjustment 

for transfer 

Balance as 

on 30 June 

2007 

Written 

down value 

at 30 June 

2007 

Furniture & fixture 18,070,255 5,965,447 - - 24,035,702 4,402,618 3,228,450 - 7,631,068 16,404,634 

Equipment 22,071,670 4,623,285 (388,600) - 26,306,355 8,181,396 3,531,680 (168,695) 11,544,381 14,761,974 

Vehicles 9,114,000 - - - 9,114,000 4,080,396 1,006,721 - 5,087,117 4,026,883 

Building 5,929,200 - (1,143,750) 4,785,450 1,015,103 118,985 (195,814) 938,274 3,847,176 

Land - 1,143,750 1,143,750 - - - - 1,143,750 

Lease vehicle - 2,000,000 - - 2,000,000 - 100,000 - 100,000 1,900,000 

Total 2007 55,185,125 12,588,732 (388,600) - 67,385,257 17,679,513 7,985,836 (364,509) 25,300,840 42,084,417 

Total 2006 44,861,311 12,652,743 (219,905) 2,328,929 54,965,220 14,630,105 4,488,355 1,438,947 17,679,513 37,285,707 

39


4 INTANGIBLE ASSETS - at cost less accumulated amortization 

2006-2007 2005-2006 

Taka 

Taka 

Intangible assets at cost: 

Balance as on 01 July 388,600 388,600 

Add: Addition made during the year 55,000 - 

Balance as at 30 June 443,600 388,600 

Accumulated amortization: 

Balance on 01 July 168,695 129,888 

Add: Charged during the year 59,560 38,807 

Balance as at 30 June 228,255 168,695 

215,345 219,905 

5 HOUSING LOANS - secured 

Individuals 7,079,787,612 5,457,066,592 

Corporate bodies 284,811,712 136,640,543 

7,364,599,324 5,593,707,135 

Loans granted by the Company are fully secured by registered/ equitable mortgage of property against which 

loans were approved. The above amount includes amounts falling due for payment within one year which is 

not segregated. 

6 ACCOUNTS RECEIVABLE 

Installments due from borrowers 21,498,876 25,439,173 

Interest receivable on fixed deposits 31,722,742 9,357,439 

Sundry receivable 12,500 92,292 

53,234,118 34,888,904 

7 

ADVANCES, DEPOSITS & PREPAID EXPENSES 

Loans and advances to employees 4,463,242 7,704,026 

Security deposits 217,450 211,450 

Advance office rent 8,515,480 12,388,346 

Prepaid interest expenses - 321,365 

Pay-order in hand 260,000 384,200 

Prepaid insurance - 293,002 

Stamps in hand 209,080 190,587 

13,665,252 21,492,976 

8 SHORT TERM INVESTMENTS 

Fixed deposits 1,898,321,238 791,130,054 

Call money - investment - 160,000,000 

1,898,321,238 951,130,054 

9 CASH & BANK BALANCES 

Cash in hand 39,412 18,080 

Balance with Bangladesh bank: 

Local currency 115,230,605 98,439,765 

Foreign currency 104,346,804 132,728,835 

Balance with other scheduled banks 97,671,519 66,241,671 

317,288,340 297,428,351 

40


10 Deferred tax asset 

Deferred tax asset has been recognized in accordance with the provision of BAS - 12 "Income Taxes" based 

on temporary differences arising due to difference in the carrying amount of the assets or liabilities and its tax 

base. Related tax expense and income has been shown in accompanying profit and loss account. 

2006-2007 2005-2006 2004-2005 

Taka Taka Taka 

Carrying amount of fixed assets (excluding leased vehicle) 

40,399,762 37,505,612 30,231,206 

Less: Value of vehicles above Tk. 1 million in accordance 

with proviso under clause g, subparagraph - 3, paragraph - 

11 of 3rd schedule of ITO 1984 being permanent 

difference 

892,783 1,115,979 1,394,973 

39,506,979 36,389,633 28,836,233 

Tax base value of fixed assets 32,724,719 28,187,113 23,054,854 

Taxable temporary difference - (A) (6,782,260) (8,202,520) (5,781,379) 

Carrying amount of leased vehicle 1,900,000 - - 

Lease obligation 1,931,410 - - 

Deductible temporary difference - (B) 31,410 - - 

Carrying amount of provision for doubtful loans 33,112,774 25,401,279 26,322,109 

Tax base - - - 

Deductible temporary difference - (C) 33,112,774 25,401,279 26,322,109 

Carrying amount of provision for doubtful 

receivables 

5,068,566 3,456,894 2,536,064 

Tax base - - - 

Deductible temporary difference - (D) 5,068,566 3,456,894 2,536,064 

Total deductible temporary differences - (A+B+C+D) 31,430,490 20,655,653 23,076,794 

Applicable tax rate 45% 45% 45% 

Deferred tax asset 14,143,721 9,295,044 10,384,557 

Deferred tax asset in previous year 9,295,044 10,384,557 - 

Deferred tax income / (expense) for the year 4,848,677 (1,089,513) 10,384,557 

14,143,721 9,295,044 10,384,557 

41


11 SHARE CAPITAL 

11.1 Authorized Capital 

2006-2007 2005-2006 

Taka 

Taka 

4,995,000 Ordinary Shares of Tk. 100 each 499,500,000 499,500,000 

5,000 Preference Shares of Tk. 100 each 500,000 500,000 

500,000,000 500,000,000 

11.2 Issued, subscribed, called and paid- up capital 

(a) Ordinary shares 

2,200,000 Ordinary Shares of Tk. 100 each issued in cash 220,000,000 200,000,000 

(b) Preference shares 

400 Shares of Tk. 100 each (issued at a premium of Tk. 

249,900 per share in cash) 

11.3 Paid-up capital of the Company is held by the following Shareholders 

a) Ordinary shares 

40,000 40,000 

220,040,000 200,040,000 

Local shareholders: No. of shares Taka 

Delta Life Insurance Company Limited 550,000 55,000,000 

BRAC 549,998 54,999,800 

Green Delta Insurance Company Limited 439,999 43,999,900 

Individuals 3 300 

1,540,000 154,000,000 

Foreign shareholders: 

International Finance Corporation (IFC), USA 330,000 33,000,000 

HDFC Investments Ltd (HIL), India 330,000 33,000,000 

660,000 66,000,000 

(a): 2,200,000 220,000,000 

b) Preference Shareholders * 

Industrial Promotion and Development Company of 

400 40,000 

(b): 400 40,000 

Total (a+b): 2,200,400 220,040,000 

* Preference Shares 

Pursuant to a subscription agreement executed with the Industrial Promotion and Development Company of 

Bangladesh Limited (IPDC) on 31 December 2000 the Company issued redeemable and cumulative 

preference shares carrying preferential rights which is liable to be redeemed on 01 July 2014 including the 

premium amount of Tk. 249,900 per share as per terms of the subscription agreement and the subsequent 

amendment thereto. Next dividend of Tk 9,410,000 as falling due on 01 July 2007. 

12 SHARE PREMIUM ACCOUNT 99,960,000 99,960,000 

13 STATUTORY RESERVE 

Balance as on 1 July 95,950,927 74,243,678 

Add: Addition during the year 26,859,002 21,707,249 

Balance as at 30 June 122,809,929 95,950,927 

This reserve has been created as per the provisions of Financial Institution Rules 1994. 

2006-2007 

This represents premium on 400 preference shares of Tk 100 each @ Taka 249,900 per share with a restriction 

not to apply the proceeds of share premium towards payment of any bonus share to the shareholders of the 

Company according to the subscription agreement executed thereon. 

42


14 CONTINGENCY RESERVE 

2006-2007 2005-2006 

Taka 

Taka 


Add: Addition during the year 40,000,000 23,000,000 


15 GENERAL RESERVE 


Add: Addition during the year - 5,000,000 


16 LOAN LOSS RESERVE 


Transferred from Profit & Loss Account 17,658,151 10,975,923 


As per policy prescribed by Bangladesh Bank, the loan loss reserve amounts to 1% general provision of the 

outstanding balance of standard / unclassified housing loans as on June 30, 2007. 

17 SUBORDINATED LOAN 


Less: Current portion of the Loan 7,480,700 7,480,700 


The Company received a subordinated loan of EUR 1 million ( BDT 67.32 million) in equivalent Taka from 

Netherlands Development Finance Company (FMO) in 2003. The subordinated loan of BDT 67.32 million is 

unsecured and is to be paid in local currency over a term of 10 years including a grace period of 1 year. 

18 

TERM LOANS 

The break-up of the term loans are as follows: 

Local Currency Loan 

Term 

Uttara Bank Limited 5 years 250,000,000 - 

Sonali Bank 10 years 128,170,000 134,600,000 

Netherlands Development Finance Company (FMO) - note18.110 years 157,094,700 183,277,150 

Foreign Currency Loan 

International Finance Corporation (IFC) - note 18.2 10 years 131,592,688 137,632,123 

666,857,388 455,509,273 

Add: Addition during the year 

Netherlands Development Finance Company (FMO) - note18.110 years 564,000,000 - 

Pubali Bank Limited 5 years 200,000,000 - 

Uttara Bank Limited 5 years - 250,000,000 

Mercantile Bank Limited 3 years 250,000,000 - 

1,680,857,388 705,509,273 

Less: Repayment made during the year 

Uttara Bank Limited 37,247,485 - 

Sonali Bank 25,720,000 6,430,000 

International Finance Corporation (IFC) 27,727,294 6,039,435 

Netherlands Development Finance Company (FMO) 26,182,450 26,182,450 

116,877,229 38,651,885 

1,563,980,159 666,857,388 

43


18.1 

2006-2007 2005-2006 

Taka 

Taka 

Less: Payment due within one year 

Uttara Bank Limited 43,309,141 38,108,278 

Pubali Bank Limited 40,000,000 - 

Mercantile Bank Limited 81,250,000 - 

Sonali Bank 25,720,000 25,720,000 

International Finance Corporation (IFC) 26,318,538 26,318,538 

Netherlands Development Finance Company (FMO) 57,515,783 26,182,450 

274,113,462 116,329,266 

1,289,866,697 550,528,122 

The aforesaid loans are secured by first charge on Company's all present and future movable and immovable 

assets including book debts ranking pari-passu security charges with other lenders of the Company. 

FMO Taka Loan 

The Company received a term loan of EUR 3.5 million (BDT 235.64 million) in 2003, in equivalent Taka, 

repayable in Taka currency over 10 years including a grace period of 1 year from Netherlands Development 

Finance Company (FMO) and the balance EUR 1 million (BDT 67.32 million) has also been received as 

subordinated loan (Note - 17). 

During the year the company received further term loan of EUR 6.0 million, in equivalent Taka repayable in 

Taka currency over 10 years including a grace period of 1 year from FMO. 

18.2 IFC Loan 

The Company was sanctioned a term loan of US $ 2.5 million repayable in foreign currency over 10 years with 

a grace period of 5 years from International Finance Corporation (IFC). Out of the loan sanctioned, the 

Company has availed of US $ 2.345 million in 2002. 

19 DEBENTURES 


Less: Payment due within one year 9,285,692 9,285,718 

Balance as at 30 June - 9,285,692 

This represents amount received for issuance of non-convertible debentures but redeemable at par in seven 

equal annual installments by the Company while the subscribers have the option to redeem the balance 

amount at the end of the fifth year. 

20 PROVISION FOR INCOME TAX 


Addition during the year 130,708,723 96,120,991 

Advance tax paid (104,672,094) (94,194,388) 


21 OTHER LIABILITIES & PROVISIONS 

Other liabilities 38,825,186 31,697,830 

TDS payable 7,584,012 41,064 

Financial lease obligation 1,931,410 - 

Provision for doubtful accounts 38,181,340 28,858,173 

Interest suspense account 5,221,174 5,695,974 

Provision for utilities 2,398,067 1,486,336 

Annual audit & tax fees 104,500 104,500 

Dividend payable (including interim dividend in 2005-06) 9,410,000 39,410,000 

103,655,689 107,293,877 

44


22 CURRENT PORTION OF LONG TERM LOANS 

2006-2007 2005-2006 

Taka 

Taka 

Balance due within one year: 

Term loans 274,113,462 116,329,266 

Debentures 9,285,692 9,285,718 

Subordinated loan 7,480,700 7,480,700 

290,879,854 133,095,684 

23 ACCOUNTS PAYABLE 

Interest payable 17,228,469 7,311,163 

Accrued interest on deposits 647,516,991 559,766,238 

664,745,460 567,077,401 

24 GENERAL & ADMINISTRATIVE EXPENSES 

Salaries & benefits - including management emoluments of 

Tk. 31,232,945 (2005-2006: Tk. 23,263,858) 

65,640,662 45,185,015 

Directors' fees 309,400 113,750 

Staff training 1,737,992 1,710,504 

Office rent 7,559,067 6,234,185 

Utility expenses 7,216,632 8,049,699 

Insurance premium 1,250,124 718,986 

Office maintenance 2,662,683 1,354,735 

Security expenses 379,299 534,480 

Printing & stationery 3,069,545 1,678,691 

Canteen expenses 736,139 718,700 

Board meeting expenses 72,937 88,309 

Communication expenses 3,746,841 3,081,075 

Car maintenance 1,805,317 952,699 

Advertisements & sales promotion 6,952,583 5,886,803 

Books & papers 48,770 49,342 

Bank charges 802,382 881,830 

Stamp expenses 680,766 348,356 

Subscription and fees 133,486 126,922 

Business development expenses 394,737 302,102 

Deposit marketing expenses 3,498,614 946,824 

Employees' recreation 600,000 69,991 

DBH property services expenses 1,192,846 766,900 

Rates and taxes 80,849 - 

110,571,671 79,799,898 

25 PROFESSIONAL FEES 

Audit fees 104,500 150,000 

Legal fees & other charges 365,353 556,414 

Tax and other consultancy fees 716,125 1,007,000 

1,185,978 1,713,414 

45


26 RETAINED EARNINGS 

2006-2007 2005-2006 

Taka 

Taka 


Add: Adjustment for implication of deferred tax income up 

to the year ended 30 June 2005 

- 10,384,557 

Add: Adjustment for dividend proposed for 2004-2005 

- 44,000,000 

40,348,551 66,019,066 

Profit after tax for the year transferred from Profit & Loss Account 134,295,011 107,446,734 

Accumulated profit available for distributions 174,643,562 173,465,800 

Less: Appropriations: 

Transferred to statutory reserve 26,859,002 21,707,249 

Transferred to general reserve - 5,000,000 

Transferred to contingency reserve 40,000,000 23,000,000 

Dividend on preference shares 11,057,280 9,410,000 

Dividend paid for previous year - 44,000,000 

Interim dividend (Tk.15 per ordinary share of Tk. 100 each) - 30,000,000 

Issuance of bonus shares for previous year 20,000,000 - 


27 

DIVIDEND ON PREFERENCE SHARES 

A dividend of Tk. 23,525 (2005-2006: Tk. 23,525) per preference share of Tk.100 each amounting to Tk 

9,410,000 is payable during the year under audit. A sum of Tk 1,647,280 was also payable on preference shares 

for previous years which has been paid during the year. 

28 DIVIDEND ON ORDINARY SHARES 

Dividend paid to non-resident shareholders: 

The Company's non resident shareholders as on 30 June 2007 include two foreign investors holding total 

660,000 shares (2005-06: 600,000 shares). 

An amount of Tk. 9,000,000 equivalent to US $ 121,448.85 (2005-06: US $ 183,467.44) has been remitted as 

interim dividend (2005-06) as well as 60,000 bonus shares at par for 2005-2006 issued during the financial year 

to these two non-resident shareholders. 

29 PROPOSAL OF DIVIDEND 

For the year the Board of Directors of the Company has recommended a cash dividend of Tk. 30 per 

ordinary share aggregating amount of Tk. 66,000,000 for 2,200,000 ordinary shares outstanding as on the date 

of next book closure. 

30 RELATED PARTY TRANSACTIONS 

The Company has entered into transactions with other entities in normal course of business that fall within 

the definition of related party as per Bangladesh Accounting Standard - 24 "Related Party Disclosures". The 

terms of related party transactions are not significantly different from those that could have been obtained 

from third parties. The significant related party transactions are as follows: 

Name of the related parties 

Relationship 

Expenses 

Particulars incurred during 

the year (Taka) 

Balance 

payable as at 

30 June 2007 

Sponsor 

Delta Life Insurance Company Limited shareholder Insurance 608,684 - 

Green Delta Insurance Company Limited Do Insurance 641,640 - 

International Finance Corporation (IFC) Do Interest 10,025,890 346,350 

International Finance Corporation (IFC) Do Borrowing - 103,865,394 

46


31 COMMITMENTS, CONTRACTS AND DISBURSEMENT 

2006-2007 2005-2006 

Taka 

Taka 

In the normal course of business, the company makes various commitments, contacts and disbursements. No 

material losses are anticipated as a result of these transactions. Details are given below: 

Housing finance commitments outstanding 140,000,000 130,000,000 

Bank borrowing commitments outstanding 300,000,000 - 

32 

CONTINGENT LIABILITIES AND CAPITAL EXPENDITURE COMMITMENTS 

i) Contingent liability 9,955,919 - 

The Company has not recognized the tax liability of Tk. 9,955,919 collectively for the assessment year 2004- 

2005 & 2005-2006 assessed by the Deputy Commissioner of Taxes on the basis of appeal order passed by the 

Taxes appellate Tribunal for the income years 2003-2004 & 2004-2005 by disallowing claim for perquisite and 

statutory reserve. The Company has filed reference to the High Court Division against the impugned orders 

and the decision is still pending. Consequently, there is a contingent liability for the above amount which has 

not been recognized as liability in anticipation of consequential relief that may be granted in favor of the 

Company. 

ii) Claims against the Company not acknowledged as debts 

iii) Capital expenditure commitments: 

(a) Contracted and incurred but not provided for in the 

accounts Nil Nil 

(b) Approved by the Board but not contracted for 

33 RECEIVABLE FROM DIRECTORS 

The Company has sanctioned loan of Tk 1.28 million to one of its directors and outstanding amount as of 30 

June 2007 is Tk 146,984. There is no other receivable from its directors or its associated undertakings as on 30 

June 2007. 

34 NUMBER OF EMPLOYEES 

During the year under audit, there were 57 (2005-2006: 53) employees employed for the full period and 25 

(2005-2006: 14) employees for less than full period at a remuneration of Taka 3,000 and above per month. 

35 GENERAL 

i) The opening balance of retained earnings for the year ended 30 June 2006 has been adjusted with the 

cumulative effect of deferred tax income up to the year ended 30 June 2005 for an amount of Tk. 10,384,557 

(note - 10) as well as dividend proposed for 2005 for an amount of Tk. 44,000,000. Unlike previous years, 

dividend paid during 2006 for 2005 has been accounted for in 2006. Similarly, dividend paid during 2007 for 

2006 has also been accounted for in 2007. Consequently, the previous year's balance sheet, profit & loss 

account and statement of changes in equity have been restated. 

ii) Figures appearing in these financial statements have been rounded off to the nearest Taka. 

iii) Previous year's figures have been rearranged wherever considered necessary to conform current year's 

presentation. 

Sd/- 

Sd/- 

Sd/- Sd/- 



Nil 

Nil 

Nil 

Nil 

47


Selected Ratios 

Ratios 2002-03 2003-04 2004-05 2005-06 2006-07 

Liquidity Ratios 

Current Ratio 1.07 1.2 1.23 1.08 1.21 

Quick Ratio 1.18 1.26 1.29 1.22 1.44 

Times Interest Earned Ratio 1.29 1.37 1.39 1.38 1.32 

Debt to Equity Ratio 7.24 7.95 8.84 9.06 10.01 

Operating Ratios 

Accounts Receivable Turnover Ratio N/A N/A N/A N/A N/A 

Inventory Turnover Ratio N/A N/A N/A N/A N/A 

Asset Turnover Ratio N/A N/A N/A N/A N/A 

Profitability Ratio 

Gross Margin Ratio 25.71 33.46 35.37 35.87 33.56 

Operating Income Ratio 29.03 24.62 26.16 25.67 23.69 

Net Income Ratio 8.52 14.57 13.56 12.75 11.08 

Return on Asset Ratio 2.8 3.34 3.24 3.21 3.1 

Return on Equity Ratio 27.53 43.32 43.96 44.45 46.35 

Earning Per Share Ratio (EPS) 14.27 43.01 44.55 44.56 56.02 

48


Auditors’ report under section 135(1) and Paragraph 24(1) of 

Part-II of the Third Schedule of the Companies Act, 1994 

We, as the auditors, having examined the financial statements of Delta Brac Housing Finance Corporation Limited for the years ended on 

30 June 2003 and 2007, and the figures extracted from the financial statements for the remaining years 2004, 2005 and 2006 audited by S. F. 

Ahmed & Co., Chartered Accountants, certify pursuant to Section 135 (1) and Paragraph 24 (1) of Part - II of the Third Schedule of the 

Companies Act, 1994, that: 

A. The statement of assets and liabilities of the Company is as under: 

2007 2006 2005 2004 2003 

Particulars Taka Taka Taka Taka Taka 

SOURCES OF FUNDS 

Shareholders' Funds 

Share capital 220,040,000 200,040,000 200,040,000 200,040,000 200,040,000 

Share premium account 99,960,000 99,960,000 99,960,000 99,960,000 99,960,000 

Statutory reserve 122,809,929 95,950,927 74,243,678 54,823,509 35,901,132 

General reserve 18,000,000 18,000,000 13,000,000 10,000,000 7,025,771 

Contingency reserve 100,000,000 60,000,000 37,000,000 15,000,000 - 

Retained earnings 76,727,280 40,348,551 55,634,509 50,553,833 31,438,555 

637,537,209 514,299,478 479,878,187 430,377,342 374,365,458 

Loan loss reserve 73,758,085 56,099,934 45,124,011 34,621,970 30,039,477 

Unsecured loan 

Subordinated loan 29,922,800 37,403,500 44,884,200 52,364,900 59,845,600 

Secured loans 

Term loans 1,289,866,697 550,528,122 429,326,823 523,801,275 614,106,739 

Debentures & bonds - 9,285,692 18,571,410 27,857,128 37,142,846 

1,289,866,697 559,813,814 447,898,233 551,658,403 651,249,585 

Deposits 5,799,056,186 4,571,050,822 3,758,178,424 2,776,339,029 1,999,610,285 

Current liabilities 

Provision for income tax 59,346,306 33,309,677 31,383,073 14,599,887 15,956,919 

Other liabilities & provisions 94,245,689 97,883,877 18,213,625 13,268,120 11,805,064 

Dividend payable on preference shares 9,410,000 9,410,000 8,000,000 8,600,000 8,600,000 

Current portion of long term loans 290,879,854 133,095,684 42,948,868 73,448,868 93,309,979 

Accounts payable 664,745,460 567,077,401 433,555,634 348,702,941 261,498,717 

Bank overdrafts 200,157,877 182,498,722 152,738,565 258,168,391 180,973,178 

Short term loans 670,000,000 270,000,000 300,000,000 890,000,000 400,000,000 

1,988,785,186 1,293,275,361 986,839,765 1,606,788,207 972,143,857 

Total 9,818,926,163 7,031,942,909 5,762,802,820 5,452,149,851 4,087,254,262 

APPLICATIONS OF FUNDS 

Properties, plants & equipments - at 

cost less accumulated depreciation 

42,084,417 37,285,707 29,972,494 30,344,315 26,052,924 

Intangible assets - at cost less 

accumulated amortization 

215,345 219,905 258,712 304,367 159,160 

Investments - at cost - - 70,337,770 70,337,770 70,337,770 

Housings loans - secured 7,364,599,324 5,593,707,135 4,394,075,177 3,375,042,911 2,919,793,793 

Deferred tax asset 14,143,721 9,295,044 - - - 

Current assets 

Accounts receivable 53,234,118 34,888,904 34,996,043 32,312,809 32,072,083 

Advances, deposits & prepaid exp. 13,665,252 21,492,976 12,377,498 5,366,553 7,920,570 

Short term investments 1,898,321,238 951,130,054 845,278,552 1,618,464,369 747,915,821 

Loan against deposit 115,374,408 86,494,833 75,783,204 55,970,302 38,907,111 

cash & bank balances 317,288,340 297,428,351 299,723,370 264,006,455 244,095,030 

2,397,883,356 1,391,435,118 1,268,158,667 1,976,120,488 1,070,910,615 

Total 9,818,926,163 7,031,942,909 5,762,802,820 5,452,149,851 4,087,254,262 

49


B. The statement of operating results of the Company is as follows: 

2007 2006 2005 2004 2003 


Operating income 1,211,838,600 842,902,635 716,139,891 649,498,729 497,031,174 

Operating expenses 924,702,225 626,569,137 528,775,516 489,570,666 370,461,082 

Operating profit 287,136,375 216,333,498 187,364,375 159,928,063 126,570,092 

Non-operating income (expenses) (26,981,318) (11,676,260) (5,680,728) (686,600) (31,569,010) 

Profit before tax 260,155,057 204,657,238 181,683,647 159,241,463 95,001,082 

Provision for tax 125,860,046 97,210,504 84,582,802 64,629,579 57,860,000 

Profit after tax 134,295,011 107,446,734 97,100,845 94,611,884 37,141,082 

Profit brought forward from previous 

year 

40,348,551 55,634,509 50,553,833 31,438,555 10,325,689 

Add: Adjustment for implication of 

deferred tax income up to the year 

ended 30 June 2005 

- 10,384,557 - - - 

Add: Adjustment for dividend proposed 

for 2001-02 

- - - - 30,000,000 

40,348,551 66,019,066 50,553,833 31,438,555 40,325,689 

Accumulated profit available for distributions 174,643,562 173,465,800 147,654,678 126,050,439 77,466,771 

Transferred to general reserve - 5,000,000 3,000,000 2,974,229 - 

Transferred to statutory reserve 26,859,002 21,707,249 19,420,169 18,922,377 7,428,216 

Transferred to contingency reserve 40,000,000 23,000,000 22,000,000 15,000,000 - 

Dividend on preference shares 11,057,280 9,410,000 8,000,000 8,600,000 8,600,000 

Dividend Paid for previous year - 44,000,000 36,000,000 30,000,000 30,000,000 

Dividend distribution tax - - 3,600,000 - - 

Interim dividend - 30,000,000 - - - 

Issuance of bonus shares @ 10% for 

previous year 20,000,000 - - - - 

Retained earnings transferred to 

Balance Sheet 

C. Dividend: 

The company declared dividends for the last five years are as follows : 

76,727,280 40,348,551 55,634,509 50,553,833 31,438,555 

2007 2006 2005 2004 2003 


Final cash dividend per share 30 15 22 18 15 

Stock dividend per share 0 10 0 0 0 

D. The Company was incorporated as a public limited company and obtained the Certificate of Commencement of Business under the 

Companies Act 1994 on 11 May 1996. The Company has also been granted license under the Financial Institutions Act 1993 on 15 July 

1996. 

E. The Company has no subsidiaries. 

F. No proceeds or part of the proceeds of the issue of the shares were applied directly by the Company in the purchase of any business. 

G. The Company did not prepare any accounts for any period subsequent to 30 June 2007. 

H. The opening balance of retained earnings for the year ended 30 June 2006 and 2003 have been adjusted with the cumulative effect of 

deferred tax income up to the year ended 30 June 2005 for an amount of Tk. 10,384,557 as well as dividend proposed for 2002 for an 

amount of Tk. 30,000,000 respectively. Unlike previous years, dividend has been accounted for in the year of payment. Consequently, the 

previous years' balance sheet and profit & loss account have been restated. 

I. Figures relating to previous years have been re-arranged wherever considered necessary. 

Dhaka, 04 October 2007 

Sd/- 

Hoda Vasi Chowdhury & Co 


50


Additional disclosure by the Management of the Company 

1. No provision was made in the year 2005-2006 for preference dividend of Tk. 16,47,280 related to 2004-2005 as 

because the company has communicated IPDC that dividend will be paid @ 9.41% p.a with effect from financial year 

2005-06 to compensate tax effect as per agreement. Subsequently it has been decided to pay the dividend from the 

year 2004-05. 

2. IFC, voluntarily has not nominated any Director in the Board of Delta Brac Housing Finance Corporation Ltd. 

(DBH). Please note that nomination of Directors by any shareholders, entitled to do so, is their sole discretion and 

thereby it is deemed to the company that it is not necessary. Therefore, as per Article 104 (viii), the office of the IFC 

nominated Director has remained vacant since 2002. Meanwhile we have amended the related clause of the Articles 

of Association, which has already got the Bangladesh Bank consent vide the letter no. DFIM©1054/18/2007-1669 

dated September 2, 2007. Furthermore, DBH has already got the approval of the Board in this regard in the 11 th 

Annual General Meeting (AGM) of the Company held on 9 th December 2007. 

51


Credit Rating Report 

By Credit Rating Agency of Bangladesh Ltd. (CRAB) 

On Delta Brac Housing Finance Corporation Limited 

Present Rating 

Long Term : AAA 

Short Term : ST-1 

Date of Rating : 27 September 2007 

Validity : 1 (One) year 

Previous Rating 

Date of Rating Long Term Short Term 

09 October 2006 AAA ST-1 

16 March 2006 AAA ST-1 

Analyst: 

Enam Al Quddus 

1.0 RATIONALE 

Credit Rating Agency of Bangladesh Limited (CRAB) has retained “AAA” (pronounced 

Triple A) rating in the Long Term and “ST-1” rating in the Short Term to Delta Brac 

Housing Finance Corporation (DBH) Limited. This is a surveillance rating on the 

outstanding issuer rating of “AAA” (pronounced Triple A) in the long term and ST-1 in 

the short term to Delta Brac Housing Finance Corporation (DBH) Limited initially 

awarded on 16 March 2006. NBFIs rated in this category are adjudged to be the 

strongest financial institution, characterized by excellent financials, healthy and 

sustainable franchises, and a first rate operating environment. The level, growth and 

quality of earnings over the medium term are of the highest grade and changes in 

business/economic circumstances, as may be envisaged, are unlikely to significantly 

impair the underlying fundamentals. NBFI rated in this category are characterised 

with excellent position in terms of liquidity, internal fund generation, and access to 

alternative sources of funds is outstanding. 

The highest credit quality rating reflects DBH’s strong market position in the Housing 

Finance Industry along with its sound asset quality and conservative provisioning 

policy, well diversified resource base and ability to maintain steady track record of 

profitability in a strongly competitive market environment. Besides, the rating also 

considers strong parental support it continues to get from the sponsors and highly 

qualified professional support from management in taking appropriate action in any 

adverse operating environment. 

52


2.0 INDUSTRY ANALYSIS 

Table 1: Outstanding Housing Loan in Bangladesh 

(in billion TK) 

2005-06* 2004-05 2003-04 

Amount 

a. Specialized housing finance provider 

Market 

Share 

Amount 

Market 

Share 

Amount 

Market 

Share 

i) HBFC 26.8 28% 27.8 32% 28.9 35% 

ii) Delta Brac Housing Finance 5.5 6% 4.4 5% 3.4 4% 

iii) National Housing Finance 1.9 2% 1.8 2% 1.3 2% 

b. Banks 

i) NCBs 25.7 27% 24.1 28% 23.6 29% 

ii) Other banks 32.9 34% 26.2 30% 22.9 28% 

c. Other financial institutions 2.9 3% 1.6 2% 1 1% 

d. Micro credit lenders 

i) Grameen Bank 0.4 0% 0.9 1% 1.3 2% 

Total 96.1 100% 86.8 100% 82.4 100% 

* Provisional 

Source: Bangladesh Bank Annual Report 2005-2006 

Next to food and clothing, housing is the basic need of people. Housing is considered 

as the most effective symbol of social guarantee in our culture. Rapid urbanization 

necessitates constructing higher number of dwelling units for different cross-sections 

of people. With the huge untapped demand for affordable housing for the middle 

income group, the housing sector is set to grow. The total number of urban dwelling 

is now estimated to be around 4 million units for around 30 million populations, which 

are around 20% of the total population of the country. Real estate and housing 

association of Bangladesh (REHAB) estimates that, approximately 5500-6500 units of 

apartments and 4500-5500 units of plots are sold each year. Annual turnover of 

housing market in Bangladesh is estimated to be TK 12.50 billion. 

Loans from banks and financial institutions are increasingly being used for 

construction and purchase of houses/plots against registered mortgage of the 

property. The average maturity of these loans is 10 to 15 years and average size of 

the loan amount is BDT 1.5 million. The loan to value ratio is maximum 70% but the 

average is 50%. According to Bangladesh Bank statistics, total housing loans from 

banks and financial institutions as of June 2006 amounted to Taka 96.1 billion, which 

was 7.6 percent of total credit to the private sector. The state owned House Building 

Finance Corporation (HBFC) has the largest share of Taka 26.8 billion in outstanding 

housing loans for the same period. Not a deposit taker, the HBFC in the past funded 

its housing loans by issuance of low interest debentures bought by the NCBs and the 

Bangladesh Bank. This funding mode has been unavailable in recent years; the HBFC 

has been constrained to rely on recoveries of past loans for new lending after paying 

operating and debt servicing costs. Consequently, its new lending has been small. TK 

0.41 billion and TK 0.42 billion in 2005 and 2006 were disbursed out of recoveries of 

TK 3.42 and TK 3.64 billion respectively. The NCBs and PCBs with ample deposit 

resources have been expanding their housing loan portfolios, attaining dominant 

market position. NBFIs like National Housing Finance and Investment Limited 

53


(NHFIL), Delta Brac Housing Finance Corporation Ltd (DBH) and IDLC are fast gaining 

ground. They fund their operations with long term deposits including some 

contractual deposit schemes. 

Housing Finance Companies: With the relative low exposure and small sized loan 

to retail segment, specialized housing finance companies has made good track record 

in management of asset quality. The HFCs keep careful track of delinquencies and 

communicate with the borrower at the first sign of the overdue loans. It should be 

noted that property price is appreciating consistently at a very high rate over the last 

two decades and the retail borrowers consider these as one of the safest investment 

compared to other avenues of investment available in the country. Thus, the 

borrowers are also very keen to repay the loan amount and have a clean title of the 

property. In addition to the rationale mentioned above the other major reason for low 

non-performing asset is mandatory investment of own fund at a minimum of 30% 

before disbursement of loan. 

An important aspect to be considered while investing in a particular (development) 

project is the status of the land whether it has any inherent legal complicacy from the 

original owner(s), whether there are any sort of restriction from the city development 

authority and / or whether it attracts any sort of attention from the environment 

conscious group(s). 

Sources of Fund: In absence of any developed capital market, the housing finance 

companies in Bangladesh, primarily has to rely on medium term bank loans and 

customer deposits. By attracting retail deposits, NBFIs can effectively reduce their 

cost of fund by 1.0% to 1.5%. The retail depositors are increasingly getting 

interested to park their deposits with the major housing finance and leasing 

companies namely DBH and IDLC for their skill sets in successfully managing their 

respective portfolios and containing the NPLs at a very low level. The depositors are 

also benefited as the NBFIs provide them with a better return than the commercial 

banks. In search of the cheap sources of fund the housing finance companies have 

been looking for new avenues and considering number of options like arranging long 

term funds from multilateral lending agencies on easy terms and conditions, 

mortgage backed securitization, issuance of bonds etc. 

54


3.0 BACK GROUND AND BUSINESS 

3.1 Fact Sheet 

Name of the company 

Delta Brac Housing Finance Corporation (DBH) Limited 

Sector 

Constitution 

Registered Office 

Non Bank Financial Institution (Specializing in Housing Finance) 

Public Limited Company 

Date of Incorporation May 11, 1996 

Chief Executive Officer 

Auditors 

Business year 

Share Capital 

Shareholding Pattern* 

* as of 30 th June 2007 

Gulshan-2, Dhaka, Bangladesh 

Mr. Q.M. Shariful Ala, Managing Director 


01 July – 30 June 

Authorized 

Issued and paid up 

Local 

Foreign 

TK 500.00 Million 

TK 220.04 Million 

- Delta Life Insurance Company Limited 25% 

- BRAC 25% 

- Green Delta Insurance Company Limited 20% 

- International Finance Corporation 

(World Bank affiliate) 

15% 

- HDFC Investments Limited 15% 

3.2 Shareholding Pattern 

DBH started its operation as the pioneer housing finance institution in the private 

sector having shareholding both from local and foreign institutional entities. The 

Company has authorized capital of TK 500.00 million and paid up capital of TK 220.04 

million as on June 2007. DBH is promoted and sponsored by significant institutional 

shareholding of both local and foreign shareholders. Besides, the company has three 

individual shareholders having one share each. 

Shareholding Structure of DBH 

15% 

IFC 

15% 

HDFC 

25% 

DLIC 

20% 

GDIC 

25% 

BRAC 

DLIC 25% BRAC 25% GDIC 20% IFC 15% HDFC 15% 

55


HDFC Investments Ltd 

HDFC Investments Ltd is the wholly owned subsidiary of HDFC of India (a private 

sector company) incorporated in 1994 with a view to invest in a portfolio of different 

shares and stocks. As of year 2006, the company had total assets and PBT of Rs 

889.80 million & Rs 143.88 million respectively. The parent company, HDFC, is India's 

largest and most successful housing finance company incorporated in 1977. This 

company had total assets and PBT of Rs 627,444 million and Rs 19,677 million as of 

March 2007. Being a sponsor of DBH, HDFC plays a developmental role with 

necessary technical and management support in setting up a sustainable housing 

finance company. 

International Finance Corporation 

IFC (International Finance Corporation), the private sector arm of the World Bank 

Group, was founded in 1956 to promote private sector investments both domestic 

and foreign in developing member countries. 

Green Delta Insurance Company Ltd 

With Assets of Taka 1227.87 million as on December 2006, Green Delta Insurance 

Company Ltd is one of the largest private sector non life insurance companies in 

Bangladesh. 

Delta Life Insurance Company Ltd 

Established in 1986, DLIC (Delta Life Insurance Company) Ltd is the largest and 

fastest growing local private sector life insurance company in the country. The 

company had total assets approximately of Taka 7,440 million as on December 2004. 

BRAC 

BRAC was set up in 1972 and now it is considered the largest NGO in the world. Its 

total asset is approximately Taka 31.50 billion as of December 2005. BRAC today 

provides and protects livelihoods of 100 million of the 141 million people of 

Bangladesh. BRAC has come to stand as a unique example of how a development 

organization of Asia can be sustainable without being largely dependent on donor 

assistance. BRAC’s outreach covers all 64 districts of Bangladesh and 78% of the total 

number of villages in Bangladesh and the NGO has been called upon to assist a 

number of countries including Africa, the Middle East and Afghanistan. 

3.3 Corporate Governance 

Observations on corporate governance of Delta Brac Housing Finance Corporation 

Limited are as follows: 

Board & Committees 

The Board of Directors comprises representatives from shareholding institutions. 

Besides the Managing Director, there are 9 other Directors, 3 each nominated from 

Delta Life Insurance Company Ltd (DLIC) and BRAC, 2 from Green Delta Insurance 

Company (GDIC) and 1 from Housing Development Finance Corporation Limited 

(HDFC) of India. The major responsibilities of the Board include reviewing the ongoing 

activities, formulating business policies and strategies, providing general guidelines to 

the management, and approving specific proposals. All the Directors of the Board are 

56


Non-Executive Directors except the Managing Director. DBH has held at least four 

board meetings in a year at an interval of three months for the last five years as per 

policy requirement. The remuneration of the Managing Director and Consultants are 

decided by the Board itself. 

There are two Committees of the Board, namely, Executive Committee and Audit 

Committee. The four member Executive Committee was formed to review all the 

proposals for loans and advances above authority delegated to the Managing 

Director. DBH has formed a three member Audit Committee as per the regulatory 

requirement. 

Accounting Policies and Internal Compliance 

The financial statements appear to contain the relevant mandatory disclosures under 

the regulatory framework, including compliance with the provisions of IAS and BAS. 

The annual financial statements have been audited by reputed Chartered Accountants 

Firms and issued “unqualified” Audit Report for all the relevant years. There is an 

independent Internal Compliance Department which looks after compliance with the 

organizational policies by different departments. The department is headed by a 

Manager for the purpose of conducting internal audit and monitoring the conformity 

of the company activities with the stated policy and guidelines. 

57


4.0 MANAGEMENT AND SYSTEM 

DBH is managed by a team of qualified and experienced professionals such as 

chartered accountants, business graduates and engineers who work under the 

guidance of the Board of Directors to achieve the vision of the company “to be the 

leading financial institution in the country with satisfied customers and employees 

and to generate value for shareholders while contributing to the well being of the 

society”. 

4.1 Management Committees 

Two management committees have been formed, namely, Asset Liability 

Management Committee (ALCO) and Management Committee. The ALCO Committee 

is formed for risk management with the Managing Director as the Head of the 

committee and other senior management i.e. the Head of Operations, Head of Credit, 

and Head of Finance and Resources as members. In addition, the Head of Information 

Technology can be invited for building up of MIS and related computerization. 

Management Committee is formed with Managing Director, Head of Operations, Head 

of Credit, Head of Human Resources, Head of Finance & Resources and Head of IT to 

deal with different operational issues. The committee meets once in a month, with 

provisions for additional meetings if required. There is clearly spelled out delegation 

of authority in sanctioning loan as well as the operational expenditure with specific 

task authority relationship. 

4.2 Inter Division & Branch Coordination 

DBH has four branches in Dhaka and one in Chittagong. Every month a meeting is 

conducted by the Managing Director with the Branch Managers for updates on 

operational matters. All branches are currently working under Wide Area Network 

support. Inter division coordination is ensured through committees and meetings, 

which is accelerated by the Management Information System (MIS). MIS practices 

help to maintain good coordination among different departments. All the department 

heads hold meetings every month on a regular basis. Besides, Recovery Department 

holds meetings every week with MD in the chair to ensure good recovery of the 

disbursed loan. 

4.3 Human Resources Management 

The Human Resources Department of the company is headed by Head of Human 

Resources. The department deals with the human resources requirements and 

employee affairs. Usually internal recruitment is followed in the mid and top 

management positions, while entry level positions are filled regularly through 

competitive recruitment exams. At the entry level recruitment, the new employee 

undergoes assignments on rotation to different departments for better acquaintance 

with the activities of the company. With a view to building a capable skilled force to 

run the operation, the management has created the opportunity to enhance the skill 

of the personnel by providing relevant training both in-house and abroad on the 

required fields. Effective performance appraisal system to judge the business 

objectivity and competence starts by self appraisal of the employee which is sent to 

58


the line manager (Head of a particular department) and then to review manager in 

the head office for final decision. 

4.4 MIS & Documentation 

DBH has a carefully planned Management Information System to enhance the 

effectiveness of the operation through better information access. The company has 

switched from FoxPro based software to ORACLE based platform developed by its own 

IT department to build up a robust and systematic MIS. This fully automated system 

includes software to support different tasks relating to loan processing, fixed asset 

management, marketing, legal, post dated cheque management, defaulter follow up, 

stamp management, deposit function and other operational tasks. 

4.5 Credit Appraisal and Recovery 

DBH has a well-structured credit appraisal process for evaluation of loan applications. 

The whole system is subdivided into two broad heads namely Operations and Credit. 

The credit approval process sets off with an appraiser who collects information from a 

client and loads it on LAF (Loan Appraisal Form) from his terminal. The filled-in 

appraisal form then goes to another appraiser who checks it for the compliance with 

requirement and sends it with recommendation to the Double Checker. Generally it is 

the Branch Manager, who double checks and sends with recommendation to the 

approver in the head office. DBH has Direct Selling Persons (DSP) on contract basis 

who initiate the application from potential clients which is then appraised by the 

company credit officers. 

Head of Credit and Head of Operations has specified loan sanctioning limit both 

individually and in combination. Should there be any difference in recommendation in 

loan decisions; the matter is forwarded to the Managing Director for final 

consideration. The Board approves loans which are beyond the power delegated to 

Managing Director. 

In addition to the credit appraisers in the Operations Department, the Credit 

Department has two full time engineers and three full time lawyers for evaluation of 

the technical aspects of credit and legal documentation. In case of appraisal of loan, 

DBH lays its key focus on the following factors; past history, asset backup, cash flows 

and stability of income. As non-routine exercise, the Head of Internal Compliance 

Department randomly picks some ten appraisal documents and sends it to its 

external consultants for evaluation of quality of documentation. 

After a recent restructuring, recovery function has been attached with the Credit 

Department rather than operations from where loan is originated. This has ensured 

more transparency in a transaction. Recovery wing starts to monitor repayment from 

time to time right after disbursement of the loan. This function is prompted by the 

MIS support, which enables the wing to pursue the borrower as early as the 

instalment of loan gets overdue. The borrower is updated with the overdue status 

with a letter. Telephonic follow up is undertaken simultaneously. 

59


4.6 Products and Services 

DBH offers loans for buying or constructing a home, for extending or improving 

existing home or for buying a housing plot from approved land developers or 

Government. One can acquire a self-contained flat in an existing or proposed complex 

or building or construct an independent single family house. The maximum loan 

offered presently by DBH is 80% of the construction cost or 70% of the purchase 

price, depending on the conformity of the criteria set by the Company. Loans are 

repayable by easy Equated Monthly Instalments spread up to tenor of the loan 

maximum of 20 years. The primary security will be the property financed. 

Presently DBH offers both fixed rate and adjustable rate loans. Interest rate on 

adjustable (variable) rate loan is determined on cost of fund plus profit margin basis. 

Cost of fund is calculated by DBH on quarterly basis and 3% profit margin is added to 

arrive at the base rate. Usually 1% is added or subtracted from the base rate 

depending on the creditworthiness of the borrower. 

DBH also offers home equity loan namely Family Loan which can be availed for any of 

the following purposes: Consumer Spending: home improvement/interior decoration, 

purchase of consumer durable items, e.g. car, electrical gazettes, home appliances, 

furniture, computer & accessories, etc. Children's Education & others: education in 

Bangladesh and abroad, travelling, marriage and related expenditures etc. 

DBH has several deposit products offered for individuals and corporate customers to 

raise fund. Presently the company has several products in the market under the 

following broad heads: Profit First Deposit, Cumulative Deposit, Annual Income 

Deposit, Children Deposit, Easy Way Deposit, Easy Home Deposit and Monthly 

Income Deposit. DBH employs some Deposit Associates (DA) on commission basis to 

market and promote these products. The company has launched three variable rate 

deposit products in April 2005. Interest rates on VRMID (variable rate monthly 

income deposit) & VRCD (variable rate cumulative deposit) are revised on July each 

year while rate revision on VRAID (variable rate annual income deposit) is done 

annually. 

60


5.0 KEY OPERATIONAL and FINANCIAL UPDATES 

5.1 Credit 

Taka in Million 

3500 

3000 

2500 

2000 

1500 

1000 

500 

0 

Sanction & Disbursement Trend 

2003 2004 2005 2006 2007 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

-10% 

-20% 

Growth Rate 

Total Loan Sanctioned 

Grow th in Sanction 

Total Loan Disbursed 

Grow th in Disbursement 

DBH has increased its business in the current business year in terms of both sanction 

and disbursement. Growth in sanctions was 58% for the year to reach TK 3,207 

million. Disbursement has increased by 35% to TK 2,858 million (FY 2005-06: 

14.5%). 

Increased disbursements of large loans have raised the average loan size 

Table 3: Disbursement by Borrower Type 

(in million TK) 

Type of Borrower 2006-07 2005-06 2004-05 

Amount Number Amount Number Amount Number 

Employed 1756.87 1530 1,538.90 1,567 1,392.40 1,572 

Self Employed 465.8 232 446.5 282 337.8 249 

Developer 188.52 11 118.7 14 47.6 5 

Others 430.87 424 - - 57.4 57 

Total 2,842.1* 2,197 2,104.10 1,863 1,835.10 1,883 

* considering live accounts only. Total disbursement for the year was TK 2,858 million only. 

Average loan size has increased to TK 1.29 million from TK 1.13 million in the last 

business year. Borrower category is still dominated by employed category. However, 

its share has decreased to 62% from 73% of the total disbursed amount. 

Disbursement to self-employed, developer and others category has also increased in 

the last business year. 

Portfolio experienced strong growth with individual sector continues to 

dominate 

61


Table 4: Outstanding Loan by Borrower Type 

(in million TK) 

Asset June 07 June 06 June 05 

Growth 

Growth 

Amount Share 

Amount Share 

Amount Share 

Loans to Individual 7079.78 96% 30% 5,457.06 97.60% 25% 4,367.20 98.80% 

Loans to Developers 284.81 4% 108% 136.64 2.40% 157% 53.2 1.20% 

Total 7364.59 100% 32% 5,593.70 100% 27% 4,420.40 100% 

The outstanding loan portfolio of DBH grew by 32% in 2006-07 which raised the 

portfolio to TK 7,364.59 million. The increased disbursement of loans to developers 

has expanded this sector’s share in the portfolio to 4%. Loan to individual sector is 

96% of total outstanding loan as of June 2007. 

5.2 Funding Profile 

Favourable funding and promoter support ensures financial flexibility 

Shareholders fund in the form of ordinary shares, preference shares and reserves 

accounts for 7.92% of the total fund employed of TK 8,991.59 million. DBH has 

borrowings from local and foreign sources along with deposits to fund its operation. 

Loans from foreign sources enjoyed by DBH are with two foreign lending institutions 

(i) IFC and (ii) FMO. At present, TK 103.87 million and TK 694.91 million are 

outstanding with IFC and FMO respectively. An amount of Euro 6.0 million equivalent 

of TK 564.00 million was received from FMO during the last financial year. This loan 

has a maturity of 10 years with grace period of 1 year. Increased cost of fund during 

the year is due to increasing cost of deposit which is the largest component of the 

funding of the company. 

Table 5: Funding Profile 

Shareholders' Equity 711.72 7.92% 

Share Capital (ordinary + 

preference share) 

(in Million Taka) 

June 2007 2006-07 2005-06 2004-05 

Amount Share Rate of Interest 

220.04 2.45% 

Share Premium 99.96 1.11% 9.41% 8.00% 8.60% 

Reserves & surpluses 391.72 4.36% 

Borrowings 2,480.82 27.59% 

Subordinated Debt 37.4 0.42% 14.65% 14.65% 13.65% 

Private Commercial Bank 662.76 7.37% 12.70% 13.00% 

IFC (FC loan) 103.87 1.16% 7.71% 6.21% 4.29% 

FMO 694.91 7.73% 8.90% 8.90% 8.90% 

Nationalized Commercial Bank 102.45 1.14% 6.50% 6.50% 

Debentures 9.28 0.10% 13.50% 13.50% 13.50% 

Over draft & Short term loan 870.15 9.68% 

Deposits 5,799.05 64.49% 11.64% 10.49% 11.21% 

Total Fund Employed 8,991.59 100% 

62


Higher contribution of deposit in the funding portfolio 

Deposit has a share of 64.5% in 

the total fund employed in 

company’s operation (75.5% in 

FY 2005-06; 74.47% in 2004- 

05). Outstanding deposit 

increased by 26.8% to TK 5,799 

million in June 2007 from TK 

4,571 million in June 2006. 

Share of institutional deposit 

Table 6: Deposit Mix 

June 

2007 

June 

2006 

June 

2005 

Deposit from FI 18.11% 15.30% 5.30% 

Other Institutional Deposit 46.32% 44.30% 23.10% 

Individual Deposit 35.57% 40.30% 71.60% 

% of Deposit in total funding 64.49% 75.51% 74.47% 

(both financial and non-financial) continues to rise in the total deposit mix. It grew by 

37% over the last year to reach TK 3,736 million from TK 2,726 million. Out of the 

institutional deposits, an amount of TK 894 million is from sponsors which are 

considered as stable (24% of the institutional deposit). The renewal rate of deposit 

has improved over the time; although an increase in fixed deposit cost mostly for the 

institutional depositors contributed to the overall increase in cost of funding. 

5.3 Profitability & Earnings 

Profitability maintained although there was pressure on spread 

The company has been able to maintain steady profitability over the last few years. 

This profitability is supported by increased business volume and maintenance of 

sound asset quality. Net Interest Margin (NIM) was 4.61% in FY 2006-07, which was 

4.60% in the preceding period. Though the cost of fund deployed by the company 

increased owing to high interest rate in the market, DBH was able to maintain NIM by 

raising lending rate. Average cost of fund has increased to 11.47% from 10.28% in 

the preceding year. However, average interest yield also increased to 14.81% from 

13.74% in the same period. Average spread narrowed to 3.35% from 3.46%. 

Table 7: Profitability Ratios 

Indicator (%) 2006-07 2005-06 2004-05 2003-04 

Net Interest Margin 4.61% 4.60% 4.38% 4.28% 

ROAA (Return on Avg. Asset) 3.10% 3.21% 3.24% 3.34% 

ROAE (Return on Avg. Equity) 46.35% 44.45% 43.96% 43.32% 

Avg. Cost of fund 11.47% 10.28% 9.86% 10.77% 

Avg. Interest Yield 14.81% 13.74% 13.31% 14.10% 

Average Spread 3.35% 3.46% 3.44% 3.33% 

63


% 

50.0% 

45.0% 

40.0% 

35.0% 

30.0% 

25.0% 

20.0% 

15.0% 

10.0% 

5.0% 

0.0% 

Profitability Indicators 

2006-07 2005-06 2004-05 2003-04 

Year 

Net Interest Margin 

ROAA (Return on Avg. Asset) 

ROAE (Return on Avg. Equity) 

A vg. Cost o f fund 

Avg. Interest Yield 

DBH maintains high operating efficiency despite growth 

In FY 2006-07, the operating income and operating expense had growth rates of 

34.5% and 39% respectively. In the same period, growth of operating profit doubled 

to 33% from 15.5% in the preceding year. Operating expense as % of total asset was 

1.42% and 1.35% in the last two years, which is higher than previous years. 

Similarly, efficiency ratio (operating expense to operating income ratio) has been 

higher in the last two years. New recruitments for expansion increased the staff cost 

thereby the total operating expense. This along with the increased promotional and 

marketing expense impacted the cost to income ratio. However, there were signs of 

stabilization this year. 

Table 8: Efficiency Ratios 


2006-07 2005-06 2004-05 2003-04 2002-03 

Operating income 406.74 302.34 253.27 217.3 173.13 

Operating Expenses (ex. Interest Exp) 119.61 86.00 65.91 57.37 46.56 

Staff Cost to Income 16.14% 14.95% 15.57% 13.68% 13.46% 

Operating Expenses/Total Assets 1.43% 1.35% 1.18% 1.20% 1.37% 

Efficiency Ratio (%) * 29.41% 28.45% 26.02% 26.40% 26.89% 

* Efficiency ratio is calculated by dividing operating cost by operating income 

64


Operating Efficiency Ratio 

Taka in Million 

500 

400 

300 

200 

100 

0 

2006-07 2005-06 2004-05 2003-04 2002-03 

35% 

30% 

25% 

20% 

15% 

10% 

5% 

0% 

Growth Rate 

Operating income 

Staff Cost to Income 

Efficiency Ratio (%) * 

Operating Expenses 

Operating Expenses/Total Assets 

5.4 Asset Quality 

Focus on recovery of loan and stringent loan appraisal helped build a good 

asset portfolio 

Table 9: NPL Movement 

(in Million Taka) June 07 June 06 

Opening NPL 25.40 27.79 

Cash recovery during the year 2.92 3.45 

Up-gradation to Standard asset 7.43 10.15 

Write-off during the year Nil Nil 

Incremental NPL generation 18.06 11.21 

Closing NPL 33.11 25.40 

DBH considers any loan overdue for a period of six months and longer as nonperforming 

as Non Performing Loan, which stood at TK 33.11 million as of 30 June 

2007. However, according to Bangladesh Bank criteria for loan classification, NPL in 

the same period stood at TK 11.05 million which is just 0.15% of total outstanding 

loans. This ratio was 0.33% and 0.23% in the previous two years. New NPL 

generation in FY 2007 was just 0.32% of the loan outstanding of the previous year. 

Indicator (%) 

Table 10: NPL Ratios 

June 

2007 

June 

2006 

June 

2005 

June 

2004 

June 

2003 

Gross NPL Ratio 1 0.15% 0.33% 0.23% 0.12% 0.32% 

Net NPL Ratio 2 -0.37% -0.13% -0.36% -0.81% -0.83% 

Loans & Advances to Total Assets 74.26% 78.80% 75.40% 61.20% 70.70% 

NPL growth -40% 77% 155% -57% 

Loan Growth 31.70% 26.50% 29.70% 15.30% 34.40% 

NPL Coverage Ratio 3 172.96% 138.91% 255.06% 789.74% 361.20% 

1 Calculated as Gross Non Performing Loans as % of Loans & Advances 

2 Calculated as (Gross NPL – Specific Provision) / (Loans and Advances – Specific Provision) 

3 Calculated as Specific Provisions as % of Gross Non Performing Loans 

65


Provisioning Policy has safeguarded the asset of the portfolio 

DBH has adopted a new provisioning policy 

Table 11: Provision of DBH 

that requires not reducing the amount of 

provision kept earlier if the NPL has (in Million Taka) June 2007 

decreased. The company will make Required Provision 73.88 

additional provision if there is any increase Actual Provision 111.94 

in the size of NPL. Present provisioning 

Provision Surplus/(Shortfall) 38.06 

policy defines NPL as loans which are 

overdue for six month or more and provision to be maintained at 100% of the total 

NPL amount. As of June 2007, DBH kept TK 111.94 million as provisions for its loan 

portfolio of which TK 38.18 million as specific provision made against the NPL. Total 

provision maintained as a percentage of loans outstanding as on June 2007 is 1.52%. 

Month-wise Collection Efficiency shows steady trend 

12 month Collection Efficiency 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Jul- 

06 

Aug- 

06 

Sep- 

06 

Oct- 

06 

Nov- 

06 

Dec- 

06 

Jan- 

07 

Feb- 

07 

Mar- 

07 

Apr- 

07 

May- 

07 

Jun- 

07 

Collection Efficiency % 

Month-wise Collection efficiency, as calculated by collection as a % of opening due 

plus current dues of the month, shows steady trend over the past twelve months. 

5.5 Capital Adequacy 

Due to strong growth in the asset base, DBH’s capital adequacy has reduced 

Shareholders’ Fund of the company stood at TK 711.30 million as of 30 June 2007 

with a growth of 31.45% over last year. It consists of TK 220 million as ordinary 

shares, TK 40,000 as preference shares with premium of TK 99.96 million, TK 76.73 

million of retained earnings and TK 314.57 million as reserves and surpluses 

(including loan loss reserve). 

66


Table 12: Capital Adequacy Ratios 

2006-07 2005-06 2004-05 2003-04 

Net Worth to Total Asset 7.24% 7.74% 8.35% 7.80% 

Tier I Capital Adequacy Ratio 5.47% 5.51% 5.83% 5.33% 

Tier II Capital Adequacy Ratio 1.77% 2.23% 2.52% 2.47% 

Net Worth to Net Loans & Advances 9.76% 9.82% 11.06% 12.73% 

Net Worth to Deposit & Borrowing 8.59% 9.40% 10.13% 9.24% 

Internal Capital Generation 31.45% 12.50% 13.07% 13.62% 

DBH has adequate capital against its liabilities that is well above the Bangladesh Bank 

requirement of 6% of the demand and time liabilities. The capital against the total 

assets of the company has reduced to 7.24% from 7.74%. High asset growth in 

comparison to capital growth has caused this reduction. With boosted net profit DBH 

has been able to build up its capital internally at a rate of 31.45%, which is 

significantly higher than that of last year. DBH is expected to issue IPO for an amount 

of TK 50.00 million in near future. This will enhance the amount of shareholders’ 

equity and improve the capital strength of the company. 

5.6 Liquidity Profile 

Table 13: Liquidity Profile 

June 07 June 06 June 05 June 04 

Liquid Asset Ratio (Liquid asset / total asset) 26.37% 19.58% 20.42% 39.47% 

Liquid Asset to total liabilities 24.33% 19.37% 21.68% 37.45% 

Deposit to total Deposit & Borrowing 70.04% 79.44% 79.18% 60.33% 

Loan to deposit ratio 88.05% 95.80% 91.62% 72.59% 

Gearing (total liability / equity) (times) 12.53 11.59 10.79 11.59 

Liquidity ratio (current asset / Current liabilities) 121.28% 108.10% 123.02% 120.03% 

DBH’s liquid asset ratio has improved to 26.5% as on June 2007. Similarly, liquidity 

ratio has improved to 123%. High liquid assets helped to maintain comfortable 

liquidity ratios over the last few years. Although, customer deposit to total deposit 

and borrowings has decreased to 70% as on June 2007 – it is still the highest among 

the NBFIs. Large amount of long term loan received from FMO and private 

commercial banks has reduced this ratio even though deposit has grown by 27%. 

Maturity 

Buckets 

Table14: Asset Liability Matching Schedule 

Asset 

Liability 

Net 

Liquidity 

Gap 

Cumulative 

Liquidity 

Gap 


Cumulative Liquidity 

Gap as % of Total 

Assets 

Up to 1 month 2120 1310 810 810 8.29% 

Over 1 to 3 months 177 749 -572 238 2.44% 

Over 4 to 12 months 637 4440 -3803 -3565 -36.48% 

over 1 year to 3 years 1278 1324 -46 -3611 -36.95% 

over 3 years to 5 years 1036 506 530 -3081 -31.53% 

67


Over 5 years to 7 years 866 537 329 -2752 -28.16% 

Over 7 years to 10 year 1244 267 977 -1775 -18.16% 

Over 10 year 2414 639 1775 0 0.00% 

The mismatches in the maturity structure which needs attention was in the short 

term to medium term time buckets. But realistic scenario eases the situation with 

loan prepayment nature inherent in the housing finance sector. DBH’s large 

proportion of sponsors deposit has contributed to this end with renewal for longer 

period of time and thereby reduced the gap in the short term. However to guard 

against any liquidity problem DBH has liquidity tracking for maturity or cash flow 

mismatches. DBH regularly prepares statement of liquidity and short term dynamic 

liquidity statement to estimate the short term liquidity profiles on the basis of 

business projections and other commitments for planning purposes. Again DBH keeps 

back up against all the short term deposit liabilities maturing within three months as 

working capital fund. Daily liquidity statement is also prepared by the finance and 

resources division to keep track of changes in the composition of asset and liabilities. 

-End of the Report- 

68


ANNEXURE I 

CORPORATE INFORMATION 

Board of Directors 

Mr. Faruq A. Choudhury 


Mr. Muhammad A. Ali 



Mr. Mohammad Syedul Islam 


Mr. Nasiruddin A. Choudhury 


Mr. Q.M.Shariful Ala 

Representing BRAC 



Representing DLIC ltd. 



Representing HDFC Investments ltd 

Representing GDIC ltd. 

Representing GDIC ltd. 


Auditors: Hoda Vasi Chowdhury & Co., Chartered Accountant 

Management: 

Mr. Q.M. Shariful Ala 

Mr. Ishtiaq H. Chowdhury 

Mr. A. Farjad Ahmed 

Mr. S.H. Aslam Habib 

Mr. Md. Hassan I. Yussouf 

Mr. Tanvir Ahmed 


Head of Operations 

Head of Credit 

Head of Finance & Resources and Company Secretary 

Head of Information Technology (IT) 

Head of Human Resources 

Capital Structure: 

Number 

Amount 

(Million TK) 

Authorized Capital: 

Ordinary shares 4,995,000 499.50 

Preference Shares 5000 .05 

Issued Capital: 

Ordinary shares 2,200,000 220.00 

Preference Shares with premium 400 100.00 

69


ANNEXURE II 

Financial Statements 

(Amount in Million Taka) 

Balance Sheet 30.06 2007 30.06 2006 30.06 2005 30.06 2004 

Properties And Assets 9,818.93 6,988.09 5,762.80 5,452.15 

Fixed Asset -less Acc. Depreciation 42.3 37.51 30.23 30.65 

Investment - at cost 0 0 70.34 70.34 

Housing Loan 7,364.60 5,568.31 4,394.08 3,375.04 

Current Assets 2,412.02 1,382.28 1,268.16 1,976.12 

Account receivable 53.23 25.74 34.99 32.31 

Loans and advances 115.37 94.2 79.84 57.84 

Advances, Deposits & Prepaid Expenses 27.82 13.78 8.33 3.50 

Deferred Tax Asset 14.14 0 0 0 

Short Term Investments 1,898.32 951.13 845.28 1,618.46 

Cash and bank balances 317.28 297.43 299.72 264.01 

Equity And Liabilities 9,818.93 6,988.09 5,762.80 5,452.15 

Total Equity 711.30 541.10 481.00 425.40 

Shareholders' Fund 396.73 311.05 311.63 310.95 

Share capital (ordinary + preference 

share) 

220.04 200.04 200.04 200.04 

Share Premium 99.96 99.96 99.96 99.96 

Retained earnings 76.73 11.05 11.63 10.95 

Reserve 314.57 230.05 169.37 114.45 

Statutory Reserve 122.81 95.95 74.24 54.82 

General Reserve 18 18 13 10 

Contingency Reserve 100 60 37 15 

Loan loss reserve 73.76 56.1 45.12 34.62 

Total Liabilities 9,107.64 6,446.99 5,281.80 5,026.75 

Unsecured Loan 29.92 37.40 44.88 52.36 

Subordinated Loan 29.92 37.40 44.88 52.36 

Secured Loan 1,289.87 559.81 447.90 551.66 

Term Loans 1,289.87 550.53 429.33 523.80 

Bonds and Debentures 0 9.29 18.57 27.86 

Deposits 5,799.06 4,571.05 3,758.18 2,776.34 

Current Liabilities and Provisions 1,988.79 1,278.72 1,030.84 1,646.39 

Accounts Payable 664.74 567.08 433.56 348.70 

Bank Overdrafts 200.16 182.5 152.74 258.17 

Short term loans 670.00 270.00 300.00 890.00 

Other Liabilities & provisions 103.66 92.74 70.21 61.47 

Provision for income tax 59.35 33.31 31.38 14.60 

Current portion of long term loans 290.88 133.1 42.95 73.45 

70


Income Statement FY 2007 FY 2006 FY 2005 FY 2004 

Total Interest income 1,169.07 812.42 690.20 620.56 

Interest on housing loan 990.22 693.79 549.40 504.72 

Other Interest Income 178.85 118.63 140.79 115.84 

Interest Expenses 805.09 540.57 462.87 432.20 

Net interest income 363.97 271.85 227.33 188.36 

Other Income 42.77 30.48 25.94 28.94 

Total Operating Income 406.74 302.34 253.27 217.30 

Operating Expenses 119.61 86.00 65.91 57.37 

Operating Profit 287.14 216.33 187.36 159.93 

Pre provision profit 287.14 215.63 187.24 159.99 

Less: Provisions 26.98 10.98 10.50 4.58 

Profit before Taxation 260.16 204.66 181.68 159.24 

Less: Provision for taxation 125.86 96.12 84.58 64.63 

Profit after Taxation 134.30 108.54 97.10 94.61 

Profitability FY 2007 FY 2006 FY 2005 FY 2004 

Return on Asset (Average Asset) 3.10% 3.21% 3.24% 3.34% 

Return on Equity (Average Equity) 46.35% 44.45% 43.96% 43.32% 

Efficiency Ratio 29.41% 28.45% 26.02% 26.40% 

Net Interest Margin 4.61% 4.60% 4.38% 4.28% 

Fee Income to Total Operating Income 10.51% 10.08% 10.22% 11.00% 

Staff Cost to Income 16.14% 14.95% 15.57% 13.68% 

AVG Cost of Fund 11.47% 10.28% 9.86% 10.77% 

AVG Yield 14.81% 13.74% 13.31% 14.10% 

Net interest Spread 3.35% 3.46% 3.44% 3.33% 

Capital Adequacy 

Shareholders’ Fund to Total Assets 7.24% 7.74% 8.35% 7.80% 

Shareholders' fund to Deposits and Borrowing 8.59% 9.40% 10.13% 9.24% 

Internal Capital Generation 31.45% 20.6% 19.9% 21.2% 

Shareholders’ Fund to Net Loans & Advances 9.76% 9.82% 11.06% 12.73% 

Tier 1 capital to Total Asset Ratio 5.47% 5.51% 5.83% 5.33% 

Tier 2 capital to Total Asset Ratio 1.77% 2.23% 2.52% 2.47% 

Asset Quality 

NPL Coverage Ratio 172.96% 138.91% 255.06% 789.74% 

Net Loans & Advances To Total Assets 74.26% 78.80% 75.40% 61.20% 

Gross NPL Ratio 0.15% 0.33% 0.23% 0.12% 

Pre provision Profit To Net Loan 3.94% 3.91% 4.31% 4.79% 

Funding & Liquidity 

Deposits to Total Deposits & Borrowings 70.04% 79.44% 79.18% 60.33% 

Net Loans to Deposit Ratio 88.05% 95.80% 91.62% 72.59% 

Liquid Asset Ratio 26.37% 19.58% 20.42% 39.47% 

Liquidity Ratio 121.28% 108.10% 123.02% 120.03% 

71


CRAB RATING SCALES AND DEFINITIONS 

LONGTERM – NON BANK FINANCIAL INSTITUTION 

RATING 

AAA 

Triple A 

(Highest 

Prospect) 

Earning 

AA1, AA2, AA3* 

(Double A) 

(Very High Earning 

Prospect) 

A1, A2, A3 

Single A 

(High Earning Prospect) 

BBB1, BBB2, BBB3 

Triple B 

(Above Average 

Earning Prospect) 

BB1, BB2, BB3 

Double B 

(Average Earning 

Prospect) 

B1, B2, B3 

Single B 

(Below Average Earning 

Prospect) 

C 

(Inadequate 

Prospect) 

Earning 

D 

(Extremely Speculative) 

DEFINITION 

NBFI rated in this category are adjudged to be the strongest financial institution, 

characterized by excellent financials, healthy and sustainable franchises, and a 

first rate operating environment. The level, growth and quality of earnings over 

the medium term are of the highest grade and changes in business/economic 

circumstances, as may be envisaged, are unlikely to significantly impair the 

underlying fundamentals. 

NBFI rated in this category are adjudged to be very strong financial institution, 

characterized by very good financials, healthy and sustainable franchises, and a 

first rate operating environment. The level, growth and quality of earnings over 

the medium term are of very high grade and changes in business/economic 

circumstances, as may be envisaged, may very slightly impair the underlying 

fundamentals. 

NBFI rated in this category are adjudged to be strong financial institution, 

characterized by good financials, healthy and sustainable franchises, and a first 

rate operating environment. The level, growth and quality of earnings over the 

medium term are of high grade and changes in business/economic 

circumstances, as may be envisaged, may slightly impair the underlying 

fundamentals. 

NBFI rated in this category are adjudged to be very solid financial institution, 

characterized by above average financials, valuable and defensible business 

franchises, and an attractive and stable operating environment. The level, growth 

and quality of earnings over the medium term are of above average grade and 

changes in business/economic circumstances, as may be envisaged, may impair 

the underlying fundamentals. 

NBFI rated in this category are adjudged to be solid financial institution, 

characterized by average financials, average business franchises, and an average 

operating environment. The level, growth and quality of earnings over the 

medium term are of average grade and changes in business/economic 

circumstances, as may be envisaged, may significantly impair the underlying 

fundamentals. 

NBFI rated in this category are adjudged to be almost solid financial institution, 

characterized by nearly average financials, below average business franchises, 

and an attractive and stable operating environment. The level, growth and 

quality of earnings over the medium term are of nearly average grade and 

changes in business/economic circumstances, as may be envisaged, may greatly 

impair the underlying fundamentals. 

NBFI rated in this category are adjudged to have adequate financial strength but 

maybe limited by one or more of the factors as: a vulnerable or developing 

business franchise; weak financial fundamentals; or an unstable operating 

environment. The level, growth and quality of earnings over the medium term 

are of poor grade and changes in business/economic circumstances, as may be 

envisaged, may highly impair the underlying fundamentals. 

NBFI rated in this category possesses very weak intrinsic financial strength, 

requiring periodic outside support or suggesting an eventual need for outside 

assistance. Such institutions may be limited by one or more of the factors as: a 

business franchise of questionable value; financial fundamentals that are 

seriously deficient in one or more respects; or a highly unstable operating 

environment. The level, growth and quality of earnings over the medium term 

are of speculative grade and changes in business/economic circumstances, as 

may be envisaged, may highly impair the underlying fundamentals. 

72


SHORT TERM – NON BANK FINANCIAL INSTITUTION 

Highest Grade 

ST-1 

ST-2 

ST-3 

ST-4 

ST-5 

ST-6 

NBFI rated in this category are considered to be of highest grade with highest 

quality of earnings in the short term. NBFI rated in this category are 

characterised with excellent position in terms of liquidity, internal fund 

generation, and access to alternative sources of funds is outstanding. 

High Grade 

NBFI rated in this category are considered to be of high grade with high quality 

of earnings in the short term. NBFI rated in this category are characterised with 

commendable position in terms of liquidity, internal fund generation, and access 

to alternative sources of funds is outstanding. 

Good Grade 

NBFI rated in this category are considered to be of good grade with good quality 


good position in terms of liquidity, internal fund generation, and access to 


Satisfactory Grade 

NBFI rated in this category are considered to be of acceptable grade with 

average quality of earnings in the short term. NBFI rated in this category are 

characterised with acceptable position in terms of liquidity, internal fund 

generation, and access to alternative sources of funds is outstanding. 

Below Average Grade 

NBFI rated in this category are considered to be of below average grade with low 

quality of earnings in the short term. NBFI rated in this category are 

characterised with risky position in terms of liquidity, internal fund generation, 

and access to alternative sources of funds is outstanding. 

Lowest Grade 

NBFI rated in this category are considered to be of lowest grade with poor quality 


risky position in terms of liquidity, internal fund generation, and access to 


Disclaimer Clause: Information used herein is obtained from sources believed to be 

accurate and reliable. However, CRAB does not guarantee the accuracy, adequacy or 

completeness of any information and is not responsible for any errors or omissions or 

for the results obtained from the use of such information. Rating is an opinion on 

credit quality only and is not a recommendation to buy or sell any securities. All rights 

of this report are reserved by CRAB. Contents may be used by news media and 

researchers with due acknowledgement and credit to CRAB. 

73


Additional disclosures/explanation by the Rating Agency 

Credit Rating Agency of Bangladesh Limited (CRAB) has given clarification on credit rating report of Delta Brac Housing 

Finance Corporation Ltd. as follows: 

1. Dates in Balance Sheets and Income Statements are as at the end of the financial year of the company unless 

otherwise mentioned. 

2. Some figures in Annexure II of the credit rating report differ with the original audited accounts as a result of 

difference in presentation for analysis, however there is no consequential effect on the credit rating and any key 

ratios arising from that reason. 


Sd/- 


74


Application Forms 

Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager 


Application Form 

APPLICATION FOR SHARES BY INVESTORS OTHER THAN NON-RESIDENT BANGLADESHI(S) 

Warning: Please read the instructions at the back of this form. Incorrectly filled applications may be rejected. 

The Managing Director 



12-14 Gulshan North C/A 

Gulshan-2, Dhaka-1212. 

Banker’s Sl. No. 

Dear Sir, 

I/we apply for and request you to allot me/us the …………… number of Shares and I/we agree to accept the same or any 

smaller number that may be allotted to me/us upon the terms of the Company’s approved Prospectus and subject to the 

Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the 

Register of Members of the Company and deposit the said shares to my BO (Beneficiary Owner) Account and/or a Crossed 

(Account Payee only) Cheque in respect of any application money refundable by post/courier at my/our risk to the first 

applicant’s address stated below: 

1. No. of Ordinary Shares …………..……… of Tk 210 each including a premium of Tk 110 per share. 

2. Amount of Tk (in figure), ……………..…, Taka (in words) ……………….……………………………………………………..only 

deposited vide Cash/Cheque/Draft/Pay Order No. ……………………………………… dated …………………………….. 

on ……………………………………………… Bank …………………………………….Branch……………………………………. 

3. Depository (B/O) Account Number 

(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 

4. I/We agree to fully abide by the instruction given herein. 

5. Particulars of Applicant(s): 

a) Sole/First Applicant 

Name: 

Father’s/Husband’s name: 

Mother’s name: 

Postal address: 

Occupation: 

For refund warrant: Applicant’s Bank A/C No.: 

Name of the Bank: 

b) Second Applicant 

Name: 



Postal address: 

Occupation: 

Nationality: 

Branch: 

Nationality: 

6. I/we hereby declare that I/we have read the Prospectus of Delta Brac Housing Finance Corporation Limited and have 

willingly subscribed for …………… no. of shares of Tk 210 each including a premium of Tk 110 per share on this form. 

7. Specimen Signature(s): 

(i) Name (in block letters) 

Signature: 

(ii) Name (in block letters) 

Signature: 

……………………………………………………………………………………………………………………… 

BANKER’S ACKNOWLEDGEMENT 

Certified that this bank has received Tk……………………..(in word) ...…………………………………………………………… only 

from Mr./Mrs./Ms. …………………………………………………………………..…….……… being the Application Money for 

…………… nos. Ordinary Shares of Delta Brac Housing Finance Corporation Limited. 

Authorized Signature 

Banker’s Sl. No. ………………. Seal and Date (Name & Designation) 

75


Instructions 

1. As per provision of Depository Act, 1999 and regulations made thereunder shares will be only be issued in dematerialized condition. Please mention 

your BO (Beneficiary Owner) Account number in the Application form. If you do not mention your valid BO (Beneficiary Owner) Account, your 

application will be treated as invalid. 

2. All information must be typed or written in full (in block letters) in English or in Bengali and must not be abbreviated. 

3. Application must be made on the Company’s printed form/photocopy or on typed copy/hand written form thereof. 

4. Application must not be for less than 50 Ordinary shares and must be for a multiple of 50 ordinary shares. Any application not meeting this criteria 

will not be considered for allotment purpose. 

5. Remittance for the full amount of the shares must accompany each application and must be forwarded to any of the Bankers to the Issue. Remittance 

should be in the form of cash/cheque/bank draft/pay order payable to one of the Bankers to the Issue favoring “Delta Brac Housing Finance 

Corporation Limited” and crossed “A/C Payee only “ and must be drawn on a bank in the same town as the bank to which the application form has 

been sent. 

6. In the case of a joint application form, the allotment letter will be dispatched to the person whose name appears first on this application form and 

where any amount is refundable in whole or in part the same will be refunded by Account Payee cheque by post/courier service to the person named 

first on this application form in the manner prescribed in the prospectus. 

7. Joint application form for more than two persons will not be accepted. In case of joint application, each party must sign the application form. 

8. Applications must be in the full name of individuals or companies or societies or trusts and not in the name of firms, minors or persons of unsound 

mind. Application from financial and market intermediary companies and private companies must be accompanied by Memorandum of Association and 

Articles of Association and Certificate of Incorporation. 

9. No receipt will be issued for the payment made with the application, but the bankers will issue a provisional acknowledgement to the issue for 

application lodged with them. 

10. Refund will be made only through “Account Payee” cheque(s) only with Bank A/C Number and name of Bank Branch as mentioned in the application 

payable at Dhaka or Chittagong, as the case may be. 

11. Allotment shall be made solely in accordance with the instructions of the Securities and Exchange Commission (SEC). 

12. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall make the 

Application liable to rejection and subject to forfeiture of application money and /or forfeiture of share (unit) before or after issuance of the same by 

the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the Securities and Exchange Commission 

(SEC). This may be in addition to any other penalties as may be provided for by the law. 

13. The Bankers to the issue Banks shall be obliged to receive the A/C Payee Cheque (s) on the closing day of the subscription of the IPO. 

14. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case 

an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment 

purpose. In addition, whole or part of application money may be forfeited by the Commission. 

15. No sale of securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five 

days after the prospectus have been published. 

16. Applications, which do not meet the above requirements, or applications, which are incomplete, shall not be considered for allotment purpose. 






Principal Branch, Dilkusha, Dhaka 

Shantinagar Branch, Dhaka 


HSBC 



Head Office, Dhaka 

Local Office, Dhaka 

Chittagong Branch, Chittagong 



Barishal Branch, Barishal 









Main Branch, Dhaka 









Naogaon Branch, Naogaon 







Foreigh Exchange Branch, Dhaka 



Jatrabari Branch, Dhaka 




Bankers to the Issue 

Mitford Branch, Dhaka 

Moghbazar Branch, Dhaka 

Motijheel Main Branch, Dhaka 







O.R. Nizam Road Branch, Chittagong 

Cox's Bazar Branch, Cox's Bazar 

Laldighirpar Branch, Sylhet 

National Bank 


Bangshal Road Branch, Dhaka 

Dhanmodi Branch, Dhaka 



Foreigh Ex. Branch, Dhaka 










Narayanganj Branch, N'Gonj 



KDA Branch, Khulna 



Asad gate Branch, Dhaka 





Eskaton Branch, Dhaka 

Gonakbari Branch, Dhaka 


IBB, Mirpur, Dhaka 



Mouchak Branch, Dhaka 

Moulvi Bazar Branch, Dhaka 

Panthapath Branch, Dhaka 

Pragati Shoroni Br., Dhaka 


SBC Tower Branch, Dhaka 


Madhabdi Branch, Narsingdi 

Narayangonj Br., Narayanganj 

Shimrail Branch, Narayangonj 


IBB, O.R.Nizam Rd., Chittagong 

IBB, Phartali, Chittagong 

Jubilee Road Br., Chittagong 

Khatungonj Br., Chittagong 

Court Road Branch, Sylhet 

IBB, Amberkhana, Sylhet 

Sylhet (Laldighirpar) Br., Sylhet 


Jessore Branch, Jessore 

Barishal Branch, Barisal 



Tongi Branch, Tongi 


Aganagar Branch, Dhaka 

Agargaon Branch, Dhaka 



Corporate Branch, Dhaka 




Karwan Bazar Branch, Dhaka 


New Elephant Road Br., Dhaka 

New Eskaton Branch, Dhaka 




CDA Avenue Branch, Chittagong 



Chhagalnaiya Branch (Islami Banking), Feni 

Cox’s Bazar Branch (Islami Banking), Cox’s Bazar 

Bandar Bazar Branch (Islami Banking), Sylhet 

Chouhatta Branch, Sylhet 




Dilkusha Corporate Branch, Dhaka 

Gulshan Corporate Branch, Dhaka 


Sena Kallyan Bhaban Branch, Dhaka 

76


Interested persons are entitled to a prospectus, if they desire, and that copies of prospectus may be obtained from the issuer and the issue manager 


Application Form 

APPLICATION FOR SHARES BY NON-RESIDENT BANGLADESHI(S) 

(TO BE SENT DIRECTLY TO THE COMPANY’S CORPORATE OFFICE) 

Warning: Please read the instructions at the back of this form. Incorrectly filled applications or failing to comply with any 

of the instructions there in, applications may be rejected. 

The Managing Director 



12-14 Gulshan North C/A 

Gulshan-2, Dhaka-1212. 

Dear Sir, 

I/we apply for and request you to allot me/us the following number of Shares and I/we agree to accept the same or any 

smaller number that may be allotted to me/us upon the terms of the Company’s approved Prospectus and subject to the 

Memorandum and Articles of Association of the Company. Further, I/we authorize you to place my/our name(s) on the 

Register of Members of the Company as the holder(s) of …………………Shares allotted to me/us pursuant to this application 

and credit the said shares to my BO (Beneficiary Owner) Account and/or a Crossed (Account Payee only) Cheque in respect of 

any application money refundable by post/courier at my/our risk to the first applicant’s address stated below: 

1. No. of Shares ……………………………. of Tk 210 each including a premium of Tk 110 per share. 

2. Amount of Tk (in figure)………………………, (in words) …………………………………………………………………….. only 

Convertible into US Dollar 1.00 = Tk ……………, UK Pound Sterling 1.00 = Tk ……………, and Euro 1.00 = Tk …………… 

3. Payment by cheque/draft no. …………………………….…. dated ………….………………..…… for US Dollar or UK Pound 

Sterling or Euro or TK ……………… drawn on ………………………..……………..… Bank ………………………… Branch. 

4. Depository Owner (B/O) Account Number 

(If you do not mention your valid BO (Beneficiary Owners) account, your application will be treated as invalid) 

5. I/we agree to fully abide by the instructions given herein. 

6. Particulars of Applicant(s): 

a) Sole/First Applicant 

Name: 



Mailing Address: 

Occupation: 

Passport No.: 

Date of Birth: 

For refund warrant: Applicant’s Bank A/C No.: 

Name of the Bank: 

b) Second Applicant 

Name: 




Occupation: 

Passport No.: 

Date of Birth: 

Nominee: 

Name: 


Nationality: 

Valid up to: 

Branch: 

Nationality: 

Valid up to: 

7. I/we hereby declare that I/we have read the Prospectus of Delta Brac Housing Finance Corporation Limited and have 

willingly subscribed for ……………. no. of shares of Tk 210 each including a premium of Tk 110 per share on this form. 

8. Specimen Signature(s): 

Sole/First Applicant: 

Second Applicant: 

Nominee: 

Name in Block Letters 

Signature 

77


Instructions 

1. As per provision of Depository Act, 1999 and regulations made thereunder shares will be only be issued in dematerialized condition. Please 

mention your BO (Beneficiary Owner) Account number in the Application form. If you do not mention your valid BO (Beneficiary Owner) 

Account, your application will be treated as invalid. 

2. All information must be written or typed in block letters in English and must not be abbreviated. 

3. Application must not be for less than 50 Ordinary shares and must be for a multiple of 50 ordinary shares. Any application not meeting this 

criteria will not be considered for allotment purpose. 

4. An application must be accompanied by a foreign demand draft drawn on a bank payable at Dhaka or cheque drawn out of foreign 

currency deposit account maintained in Bangladesh for the full value of shares favoring “Delta Brac Housing Finance Corporation 

Limited” and crossed “Account payee only”. 

5. An application shall be sent by the applicant directly to the Company within 6/3/2008 so as to reach the Company within 15/3/2008. 

Applications sent after 6/3/2008 or received by the Company after 15/3/2008 will not be considered for allotment purpose. 

6. Refund against over-subscription shall be made in the currency in which the value of shares was paid for by the applicant through Account 

Payee cheque payable at Dhaka with bank account number, Bank’s name and Branch. 

7. All the applicants shall first be treated as applied for one minimum lot. If, on this basis, there is over subscription, then lottery shall be held 

amongst the applicants allocating one identification number for each application irrespective of the application money. On the other hand, 

if there is under subscription, then all the applicants shall first be distributed with a single lot and thereafter, for the balance amount, 

lottery, shall be held for the applicants who have applied for multiple lots on the basis of dividing the application money by amount of a 

market lot separately for both NRB and General Public. 

8. Money receipt on clearance of draft or cheque, as the case may be, shall be sent by post to the applicant by the Company. 

9. Joint application by two persons will be acceptable. In such a case, allotment or refund shall be made by post to the first applicant. 

10. Application must be made by an individual, a corporation or company, a trust or a society and not by a firm, minor or persons of unsound 

mind. 

11. Making of any false statement in the application or supplying of incorrect information therein or suppressing any relevant information shall 

make the Application liable to rejection and subject to forfeiture of application money and / or forfeiture of share (unit) before or after 

issuance of the same by the issuer. The said forfeited Application money or share (unit) will be deposited in account specified by the 

Securities and Exchange Commission (SEC). This may be in addition to any other penalties as may be provided for by the law. 

12. The intending NRB applicants shall deposit share money by US$ / UK Pound Sterling / Euro draft drawn on any Bank and payable in 

Dhaka, Bangladesh, so that the issuer’s collecting bank can clear the proceeds and deposit the same into issuer bank’s account in time. 

13. The spot buying rate (TT Clean) in US$ and UK Pound Sterling / Euro of Sonali Bank as prevalent on the date of opening of subscription 

will be applicable for the Non-Resident Bangladeshi (NRB) applicants. 

14. The applicant shall furnish photocopies of relevant pages of valid passports in support of his being a NRB, duel citizenship or of the 

foreign passport bearing an endorsement from the concerned Bangladeshi Embassy to the effect that no visa is required for him to 

travel to Bangladesh. 

15. In case of joint NRB application joint applicants shall also submit supporting papers/documents in supported of their being an NRB as 

mentioned in para-14 above. 

16. An applicant cannot submit more than two applications, one in his/her own name and another jointly with another person. In case 

an applicant makes more than two applications, all applications will be treated as invalid and will not be considered for allotment 

purpose. In addition, whole or part of application money may be forfeited by the Commission. 

17. No sale of securities shall be made nor shall any money be taken from any person, in connection with such sale until twenty five 

days after the prospectus have been published. 

THE NRB APPLICATION ALONG WITH THE FOREIGN CURRNENCY DRAFT/PAY ORDER, AS ABOVE, IS TO BE SUBMITTED TO 

THE COMPANY’S HEAD OFFICE DIRECTLY WITHIN THE STIPULATED TIME MENTIONED IN PARA 5. 

78


Additional disclosures/explanation by the Auditors 

The auditors of Delta Brac Housing Finance Corporation Ltd. has given additional disclosures/explanation required by the 

Securities and Exchange Commission (SEC) as follows: 

We, as the auditors of Delta Brac Housing Finance Corporation Limited, having examined the financial statements of the said 

Company for the year ended as of 30 June 2007, confirm that: 

1 The company has complied with related BASs including BAS – 21 “The Effects of Changes in Foreign Exchange Rates” in 

preparing the financial statements for the year ended 30 June 2007, wherever necessary. Point to be noted here that foreign 

exchange fluctuation gain arising from translation of the balances of foreign currency deposit account with Bangladesh 

Bank and foreign currency loan from International Finance Corporation (IFC) as at 30 June 2007 has been adjusted with 

interest income on foreign currency deposit account with Bangladesh bank. 

2 The provisions of section 57 of The Companies Act, 1994 have been complied with in maintaining share premium account 

since the Company has not utilized the amount (or any part thereof) up to 30 June 2007. Hence, the share premium 

amount of Tk. 99,960,000 remained same over the years. 

3 Difference between the cost of land and building of Dhanmondi office as per note 3 of financial statements for the year 

ended 30 June 2007 and the amount shown in the deed of sale is due to the capitalization of registration cost as shown 

below: 

Particulars 

Cost as per deed of sale 

(Taka) 

Registration Cost 

(Taka) 

Cost as per financial statements 

(Taka) 

Land 10,00,000 1,43,750 11,43,750 

Building 41,84,000 6,01,450 47,85,450 

Total 51,84,000 7,45,200 59,29,200 

4 Payment of preference shares dividend of Tk. 16,47,280 was made during the year 2006-2007 consistently in accordance 

with the preference shares agreement as amended from time to time. 

This confirmation is issued at the request of the Company and is intended for the purpose of submitting to the Securities and 

Exchange Commission (SEC). 


Sd/- 



79


Additional disclosures/explanations by the Auditors required by the Securities and 

Exchange Rules, 1987 

You are aware that the financial statements of the Company for the year ended 30 June 2007 were prepared in accordance with 

International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) so far adopted in Bangladesh 

and in compliance with the Companies Act 1994, Financial Institutions Act 1993, the rules and regulations issued from time to 

time by the Bangladesh Bank and other applicable laws & regulations other than the Securities and Exchange Rules 1987 and 

accordingly we conducted our audit pursuant to Bangladesh Standards on Auditing (BSA) and expressed our independent 

opinion based on that audit as a non-listed company. However, as desired by you, we as the auditors of the Company for the 

year ended 30 June 2007, after due verification, confirm that had the financial statements of the Company for the year ended 30 

June 2007 been prepared in adherence to the provisions of the Securities and Exchange Rules 1987 the following, inter-alia, 

additional disclosures would have been required to provide and include in the relevant Notes to the financial statements issued 

by you and audited by us: 

1. Housing loans (note 5) 

Housing loans of Tk. 7,364,599,324 includes an amount of Tk. 673,822,673 receivable within 12 months from the date of Balance 

Sheet commencing from July 2007 to June 2008 (2005-06: Tk. 431,073,804). 

2. Debentures (note # 19) 

Interest @ 13.5% p.a. is being paid to the debentureholders. 

3. Long-term loans (note # 18) 

The break-up of the term-loans is as follows: 

Name of the party Repayment Maturity 

International Finance Corporation Quarterly equal amortization June - 11 

Netherlands Development Finance Company 

(FMO): 

FMO - Taka 1 Half yearly equal amortization April - 12 

FMO - Subordinated (unsecured) Half yearly equal amortization April - 12 

FMO - Taka 2 Half yearly equal amortization April – 17 

Sonali Bank Quarterly equal amortization June - 11 

Uttara Bank Ltd Quarterly equal amortization * June - 11 

Mercantile Bank Ltd: 

Mercantile Bank Ltd - 1 Quarterly equal amortization September - 09 

Mercantile Bank Ltd - 2 Quarterly equal amortization December - 09 

Pubali Bank Ltd Half yearly equal amortization June - 12 

* It is the quarterly installment comprises of principal and interest 

4. Other liabilities & provisions (note 21) 

Other liabilities of Tk. 38,825,186 include Tk. 2,778,000 payable to DBH Staff Gratuity Fund. 

80


5. Bank overdrafts 

Bank overdrafts comprise as follows: 

Particulars 2006-2007 

(Taka) 

2005-2006 

(Taka) 

Security 

Prime Bank Limited 107,420,092 182,487,112 Lien over FDR worth 

Tk. 33 Crore 

Commercial Bank of Ceylon 

92,737,785 - * 

Limited 

Pubali Bank Limited - 11,610 

Total 200,157,877 182,498,722 

* Overdraft facility of Commercial Bank of Ceylon Limited is secured by first charge on Company's all present and future 

moveable and immovable assets including book debts ranking pari-passu security charges with other lenders of the Company. 

6. Short-term loans 

Break-up of short-term loans is as follows: 


(Taka) 

2005-2006 

(Taka) 

National Bank Ltd 90,000,000 - 

Jamuna Bank Ltd 170,000,000 - 

Southeast Bank Ltd 100,000,000 20,000,000 

Standard Bank Ltd 50,000,000 - 

Arab Bangladesh Bank Ltd 100,000,000 - 

Marcantile Bank Ltd Prime Bank Ltd 160,000,000 190,000,000 

Prime Bank Ltd - 60,000,000 

Total 670,000,000 270,000,000 

Above short term loan represents loan taken from money market payable on demand and unsecured in nature. 

7. Interest income 

Interest income shown in the Profit & Loss Account comprises of the following: 


(Taka) 

2005-2006 

(Taka) 

Interest on housing loans 1,005,313,930 705,980,250 

Interest on FDR 143,791,035 82,200,939 

Interest on SID Account 1,644,203 976,787 

Interest on loan against deposits 12,270,508 11,327,931 

Interest on Bangladesh Bank FX deposit 6,048,494 5,876,892 

Interest on Zero Coupon Bond - 6,057,455 

Total 1,169,068,170 812,420,254 

81


8. Salaries and benefits (under note # 24) 

Salaries and benefits of Tk. 65,640,662 (2005-06: Tk. 45,185,015) include contribution to: 


(Taka) 

2005-2006 

(Taka) 

Provident Fund 2,192,229 1,560,415 

Gratuity Fund 5,173,643 1,348,584 

Total 7,365,872 2,908,999 

9. Interest expenses 

Interest expenses shown in the Profit & Loss Account comprises of the following: 


(Taka) 

2005-2006 

(Taka) 

Interest on term loans 107,092,604 42,478,136 

Interest on term deposits 646,349,783 480,744,116 

Interest on call loan 42,401,758 1,638,220 

Interest on debenture 2,193,762 3,459,681 

Interest on overdraft 6,982,937 12,247,317 

Interest on finance lease 74,150 - 

Total 805,094,994 540,567,470 

10. Management emoluments 


(Taka) 

2005-2006 

(Taka) 

Remuneration 25,558,190 18,323,634 

Benefits 5,674,775 4,940,224 

Total 31,232,945 23,263,858 

This includes an amount of Tk. 6,490,000 (2005-2006: Tk. 5,419,005) paid to the Managing Director as remuneration. 

11. Directors' remuneration for attending Board meeting 

Each director is drawing Tk. 4,000 for attending each meeting. 

The above noted information and additional disclosures appear to be in agreement with the books and records and 

management representations made by Delta Brac Housing Finance Corporation Limited and are issued at the request of the 

Company for the purpose of public issue of shares. The information relates to the financial statements for the year ended 30 

June 2007 and should be read in conjunction with the same. 

Date: 15 January 2008 

Thanking you 

Sd/- 



82

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