NAVANA REAL ESTATE LIMITED - Dhaka Stock Exchange

NAVANA REAL ESTATE LIMITEDINFORMATION MEMORANDUM FOR ROAD SHOWFORINITIAL PUBLIC OFFERING (IPO)OF3,00,00,000 (THREE CRORE) ORDINARY SHARES OF TK 10 (TEN) EACH AT ANINDICATIVE PRICE OF TK [*]/- INCLUDING A PREMIUM OF TK. [*]/- TOTALLINGTK. [*] UNDER BOOK BUILDING METHODCredit Rating at AA3 by Credit Rating Agency of BangladeshISSUER COMPANYNAVANA REAL ESTATE LIMITED125/A, Motijheel C/A, Dhaka-1000.Phone: 9552212, Fax: 02-9566324Website: www. navana-realestate.comMANAGER TO THE ISSUEICB CAPITAL MANAGEMENT LIMITED( A S U B S I D I A R Y O F I C B )BDBL Bhaban (Level-16), 8, DIT Avenue, Dhaka - 1000.Phone: 7160326-7, Fax: 02-9555707Website: www. icbcml.com.bdREGISTRAR TO THE ISSUELANKABANGLA FINANCE LIMITEDSafura Tower (Level-11), 20 Kemal Ataturk Avenue,Banani, Dhaka-1213.Phone: 9883701–10, Fax: 8810998Website: www.lankabangla.com

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedGeneral InformationICB Capital Management Limited, the Issue Manager, has prepared thisInformation Memorandum (“IM”) based on the information provided by Navana RealEstate Limited (the Company/the Issuer) and also upon several discussions with theChief Executive Officer and concerned executives of the issuer company. TheDirectors, including Chief Executive Officer of Navana Real Estate Limited and ICBCapital Management Limited collectively and individually, having made all reasonableinquires, confirm that to the best of their knowledge and belief, the informationcontained herein is true and correct in all material aspects and that there are no othermaterial facts, the omission of which would make any statement herein misleading.No person is authorized to give any information or to make any representation notcontained in this prospectus, and if given or made, any such information orrepresentation must not be relied upon as having been authorized by the Issuer orIssue Manager.The Issue as contemplated in this document is made in Bangladesh and is subject tothe exclusive jurisdiction of the courts of Bangladesh. Forwarding this prospectus toany person resident outside Bangladesh in no way implies that the Issue is made inaccordance with the laws of that country or is subject to the jurisdiction of the laws ofthat country.Page- 2

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedRisk FactorsInterest Rate RiskInterest rate risk is borne by interest bearing assets of an organization. Changes in theGovernment’s monetary policy along with increased demand for loans/investments tend toraise interest rates. Such rises in interest rates mostly affect companies having floating rateloans or companies investing in long term debt securities. In the event of monetary policytightening by the Government to combat increased economic growth and inflation, thecompany will require a prudent strategy to take the firm from incurring negative net cashflow from operations.Management Perception:The management of NREL is aware of the interest rates at which the debts of the companyare being financed. Management intends to finance long-term funds using fixed interest ratedebt and finances short-term funds at reasonable competitive rates. The company has beenrepaying borrowed funds on a continuous basis to reduce such interest risk. The recent trendshows that, NREL funded ongoing projects by advance against sales. Besides that,management also utilizes retained earnings and bank loan to finance projects.Input Cost RisksInput cost risk is the risk of businesses when procuring materials or commodities in highglobal demand. Increasing demand and supply shortages create volatility in these commodityvalues therefore the timing, quantity and price of purchase must be closely planned. Inputcosts, such as MS rod and cement, represent material direct costs in the industry.Management Perception:Management of NREL would hedge their exposure to input price volatility by purchases ofsuch inputs at right price at the right time; and by charging for contingency against suchinputs in selling prices.Industry RisksReal Estate business, especially apartment projects started to flourish and showed robustgrowth in the Dhaka City from the early 1980s. At present, more than 250 real estate andland development companies are operating their business. Demands of flats and land arehigh and thereof most of the developers of housing estate are concentrating in this segmentof business and make a competitive market.Management Perception:Based on the number and size of projects besides Brand strength in marketplace andupcoming project portfolio, NREL has a strong position that is the key for success in realestate sector. The Company has established brand name in real estate market with its assetquality and customer services. Diversification in terms of location within Dhaka andChittagong will assist them to capture different income groups. Therefore, the Companytargets prime locations as well as locations that will be affordable by middle class incomegroup people.Market RisksMarket risk refers to the risk of adverse market conditions affecting the sales and profitabilityof the company. Mostly, the risk arises from falling demand which would affect theperformance of the company.Page- 3

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedManagement Perception:Management is fully aware of this market risk; and has planned to act accordingly. On theother hand, strong marketing and brand management would help the company increase theircustomer base.Potential or Existing Government RegulationsThe Company operates under the Companies Act, 1994, Real Estate Development andManagement Act, 2010; Dhaka Metropolitan Construction Rules, 2006; Income TaxOrdinance 1984, Customs Act, 1969, Value Added Tax (VAT) Act 1991 and rules, regulationsand notifications made under these laws. Any abrupt changes of the policies made by theregulatory authorities may adversely affect the business of the Company. NREL operates in ahighly regulated market with registration, plan approvals and inspections required by RAJUKperiodically.Management Perception:NREL is the one of the leading real estate developers of the country. This company is doingbusiness following all laws, rules and regulations. Changes in regulatory framework will bringchanged strategies of doing business by the dynamic management of the Company.Potential changes in global or national policiesPolitical instability and the associated deterioration of law and order stand in the way oftimely implementation of the projects.Management PerceptionManagement is optimistic about growth opportunities in Bangladesh. They believe they targetan untapped market of customers who are seeking quality service, reliability and timelinesswith their management team.Operational riskThe real estate industry has witnessed challenges such as earthquakes and floods. It standsas one of the most challenging industries to operate in to date.Management PerceptionFortunately, the local industry does not have such a troubled backdrop and has immenseopportunities for growth.FINANCIAL STRUCTURE OF THE COMPANYThe Financial Structure of the Company is as follows:ParticularsPage- 4No ofSharesFace Value(Taka)Amount inTakaBefore IPO:Authorized Capital 1,000,000 1,000 1,000,000,000Paid up capital as on 31 August, 2010 300,000 1,000 300,000,000Paid up capital as on 30 September, 2010 30,000,000 10 300,000,000Total paid up capital before IPO 30,000,000 10 300,000,000After IPO:To be issued as IPO 30,000,000 10 300,000,000Paid up capital (Post IPO) 60,000,000 10 600,000,000

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited* Board of Directors had decided to denominate the share price from Tk.1000.00 to Tk. 10.00on 12 th August 2010 which has been approved by the shareholder of the Company in their ExtraOrdinary General Meeting dated 8 th September 2010.Capital StructureParticulars as at 31 August 2010 as at 31 August 2009Shareholders’ Equity:Share Capital 300,000,000 51,000,000Retained Earnings 881,924,935 408,218,519Total 1,181,924,935 459,218,519Debts:Long-term loan 457,557,539 490,771,249Short-term loan 1,483,279,899 996,801,968Total 1,940,837,438 1,487,573,217Use of proceedsThe Company is planning to raise about Tk. 420.00 crore from the capital market throughIPO. The IPO proceeds will be utilized in the following manner:Sl. No. Usage of Proceeds Amount (Taka)1 Repayment of Loans 2,000,000,0002 Acquisition of Investment Properties 750,000,0003 Balance as Working Capital 1,450,000,000Total 4,200,000,0001. Repayment of Loans of Tk. 200.00 croreNREL will repay the entire loans from banks and financial institutions aggregating around Tk200 crore out of its IPO proceeds immediately upon completion of IPO formalities subject tothe approval of Securities & Exchange Commission. This will improve NREL’s profitability,making it debt-free. The details of Loan taken from Financial Institution are stated below (asper Audited Accounts):Sl. No.Financial InstitutionLoan amount(In Taka)1.00 Long-term borrowings:1.01 City Bank Ltd. 83,912,9231.02 Delta Brac Housing Ltd. 30,638,9711.03 Dhaka Bank Ltd. 50,000,0001.04 Pubali Bank Ltd. 5,838,5151.05 Southeast Bank Ltd. 175,900,0491.06 United Commercial Bank Ltd. 136,571,8452.00 Lease finance:2.01 Dhaka Bank Ltd. 13,557,1262.02 Dutch Bangla Bank Ltd. 1,604,5652.03 EXIM Bank Ltd. 91,070,8432.04 Standard Bank Ltd. 9,165,4833.00 Short-term loan:3.01 Al-Arafah Islami Bank Ltd. 53,807,5003.02 Bank Alfalah Ltd. 49,600,0003.03 Bank Asia, Pr. 215,000,0003.04 EXIM Bank Ltd. 71,971,667Page- 5

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited3.05 IFIC Bank Ltd. 140,626,6483.06 NCC Bank Ltd. 154,490,7233.07 National Bank Ltd. 77,439,9413.08 One Bank Ltd. 150,000,0003.09 Pubali Bank Ltd. 133,827,8993.10 Social Islami Bank Ltd. 100,610,2163.11 Southeast Bank Ltd. 20,000,0003.12 Standard Bank Ltd. Pr. Br. 175,202,524Total 1,940,837,437The Loan amount would be paid which incurred after August 31, 2010:1. Dhaka Bank Ltd. 50,000,0002. Pubali Bank Ltd. 9,162,563Total 59,162,5632. Acquisition of investment propertiesA part of the IPO proceeds at Tk. 75.00 crore shall be utilized by NREL to acquire land andconstruct it’s Head Office in Road no. 9/A (new), Dhanmondi, Dhaka. This will improve itscapacity, reduce its expenses and improve its profitability. For this purpose a land measuring19.80 decimal (12 katha) at Plot no. 231/A (Old), 35 (New), Road no. 18 (old), 9/A (new),Dhanmondi R/A, Dhaka has been acquired on 31.10.2010 to construct the NREL Head Office.Implementation ScheduleDate of Baina Nama: 04/01/2010Date of Registration: 31/10/2010Expected date of plan pass from RAJUK: 30/04/2011Expected date of construction to be started: 01/05/2011Duration of the construction period:36 monthsExpected date of completion: 30/09/20143. Balance as Working Capital of Tk. 145.00 croreThe balance IPO proceeds of Tk. 145.00 crore shall be used for meeting the costs of IPO andNREL’s day to day operations as working capital.Navana Real Estate Limited: An OverviewCompany ProfileNavana Real Estate Ltd (NREL), a part of Navana Group, started its operation in 1996 as aprivate limited company & converted as a Public Limited on 8 th September, 2010. Since itsinception, NREL has completed and handed over a good number of projects in diversifiedareas in Dhaka where it is capturing the market for high and middle-income people. Of late,NREL has also started its operation in different areas of Chittagong.Considering the future expansion of Dhaka City and related demand hike for housing, NRELhas extended its area of operation into land development projects, handing over one landproject in Kallyanpur and two projects at Ashulia. Ongoing land projects include two projectsat Narayangonj and Ashulia.Page- 6

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNREL within a short span of time turned out as one of the most trusted company in RealEstate sector and has been working in various numbers of apartments, commercial and landprojects. The motto of NREL is not only to deliver apartment or land ahead of schedule butalso to maintain the highest-grade construction quality that has gained trust and respect incustomers. Further NREL is pursuing the motto of becoming “different, dependable anddefinitive”.Nature of BusinessThe Company is engaged in purchasing land & developing the same for urban housing andselling to the people of different income group. The company also purchases high land forconstruction of multi-storied Apartment building, Shopping and Office spaces.Principal Products/ServicesPrincipal products are Apartment and Commercial spaces approximately cover more than90% of total revenue. We have also Housing project which will flourish significantly in nearfuture.Name of products/ServicesThe company produces different type of Apartment and commercial spaces in differentlocation of Dhaka and Chittagong city categorized like as Diamond, Gold, Silver and pearl.Projects Overview:NREL’s Apartment Portfolio statusProject StatusNumber ofprojects in2009-10Total No.ofProjectsSquare feetof built-upareaSquare feetof saleableareaHanded Over Projects 17 59 21,12,791 14,10,704Ongoing Projects - 67 31,43,020 20,37,902Upcoming Projects - 75 8256383 51,54,524Handed Over Projects: During the accounting year 2009-10, NREL handed over total 17projects to their client located at different areas like Gulshan, Banani, Dhanmondi, NewDOHS, Dhanmondi, Niketan, and Uttara. As a result, from incorporation, total handed overprojects of the Company reached 59. Average time needed to complete and hand over aproject since inception is 2 to 3 years. NREL had no significant delay in projects handover tocustomers except some isolated events.Name & Description of the Handover Project:Name of Apartmentprojects:Location Handover Name of Apartmentprojects:LocationHandoverBailey Star Baily Road July-2009 Dianthus Uttara March-2009Chateau De Husains Gulshan March-2010 Gloria Niketon Nov-2007Southern Wood Dhanmondi Jan-2010 Paradise Uttara March-2006Lake Shiri Garden Uttara August-2009 Raza Niloy Mirpur June-2007Villa Gulshan July-2001 Sea Jewel (Sagor) Uttara July-2010Suriya Imdad Garden Central Road July-2009 Carmem Skylana Uttara March-2009Tower Gulshan April-2004 Pride Uttara July-2004Kabir Garden Dhanmondi Jan-2006 Lake View Niketon April-2005Verdancy Eskaton Aug-2007 Cottage Banani July-2004Veneziane Dhanmondi Jan-2008 Sapphire Monami Banani Aug-2008Garden Kallyanpur April-2009 Condominium Segun Bagicha June-2006Sardinia Banani May-2010 Myriad Niketon April-2010Page- 7

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedHomes Banani Feb-2001 Ville Akbar Mohakhali April-2010La Fontana Niketon Nov-2008 Shefali Gulshan July-2006Grosvenor Residence Gulshan March-2010 Banu Garden Mogbazar August-2006Wood Sorrel Baridhara March-2010 Ecstasy Dhanmondi Nov-2005Rangalia Banani Feb-2010 Timit Bashundhara August-2009Motin Verbena Green Road Mar-2008 Vartex Wari Oct-2008Laurestine Baridhara Sep-2009 Park Uttara Jan-2007Cordelia Banani Jan-2010 Glory Mohammadpur July-2006Karar's Islet New DOHS June-2010 Bliss Elephant Rd May-2005Cosmos Hatkhola Feb-2007 Saffron DOHS Baridhara June-2010Kinevart Bashundhara June-2010 Oleander Uttara July-2008Sandriana Niketon March-2009 Rafia Diapensia Segun Bagicha July-2010Bilkis Laurent Gulshan Nov-2009 Summer Hill Uttara Feb-2009Pearl Uttara Sep-2006 Delphinium Mohammadpur Nov-2008Orchid Gulshan Sep-2005 Villa Marvella New DOHS July-2010Le Caprice Banani Jan-2010 Shamim Beaumont Banani June-2010Venus Sukrabad June-2006 Sky View Niketon Sep-2005Mirabad Navana Mirabad Aug-2008Ongoing Projects: These projects are geographically concentrated in the northern part ofDhaka like Uttara, Bashundhara, Baridhara, Gulshan, Banani, DOHS etc. Besides that, areaslike Segunbagicha, Hatkhola, Kamalapur, Kalabagan, Wari, Purana Poltan, Mohammadpur,Lalmatia, Kakrail, Eskaton, Bashabo etc. also included. As per the acquisition agreements,NREL will have to hand over 33% to 60% of total built area to the landowner and will retainresidual to NREL for sales.Name & Description of the ongoing ProjectName Location Present status: % ofcompletion as per auditedaccountsPossible yearof handoverApartment projects:Alpenrose Segunbagicha 90% 2011Ashir Animone Hatkhola 24% 2012Aspodal Kamlapur 65% 2011Ayesha Angelique Uttara 27% 2013Aziza Serenity Banani 33% 2012Beaufort Baridhara 24% 2013Blue Cascade Bashundhara 21% 2012Carnival Kalabagan 10% 2012Casa Grande Gulshan 46% 2012Celestial Wari 48% 2013Circular Height Razarbagh 23% 2013Darus Salam Uttara 27% 2012DH Tower Panthapath 16% 2013Diamonte Dhanmondi 52% 2011Ellsworth Banani 35% 2012Ferdous Fairfield Bashundhara 41% 2012Feroza Wilhelm Gulshan 57% 2011Fima Paradiso Bakshibazar 78% 2011Hermitage Hatkhola 51% 2011Kanak's Redulent Uttara 27% 2012Karotowa Baridhara 22% 2013Kazi Richmond Bara Moghbazar 61% 2011Khalil Gravillea Bashundhara 36% 2011Li Sianthus Banani 34% 2012Lilium Memories Baridhara 14% 2013Page- 8

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedMandale Niketon 28% 2012Manor Park Uttara 24% 2012Mid Summer Dream Gulshan 38% 2012Miru Arimidale Gulshan 29% 2013Mojibunnessa De Lake Banani 39% 2011Mukhles Monarch Purana Paltan 41% 2011Neer Uttara 27% 2012New Buri Place Subhanbagh 21% 2013Platinum Residence Gulshan 66% 2011Rabeya Easdale Mohammadpur 42% 2012Rahim Ardent Kakrail 55% 2011Rainbow Terrace Uttara 42% 2013Rebecca Teodora Uttara 62% 2011Roosevelt DOHS Baridhara 91% 2011Saptabarna Lalmatia 72% 2011Sattar Garden Eskaton 4% 2013Shahria Rowshan Lalmatia 22% 2012Shams Anjum Bijoy Nagar 23% 2012Shaz Sylvan Baridhara 27% 2013Siddique Sorrento West Dhanmondi 63% 2011Sikder Wind Flower Bashundhara 30% 2012Silver Dale Bashaboo 44% 2012Siraj Lake Aster Dhanmondi 72% 2011Somerset Shantinagar 39% 2011South Wind Banani 39% 2011Splendour Banani 28% 2012Summer Wind Baridhara 52% 2011Sylvania Nodda 5% 2013Usha Sylvestris Gulshan 58% 2011Water Edge Dhanmondi 63% 2011Zohra Square Banlamotor 13% 2013Ahmad Carnation Dorgahat, Ctg 22% 2013Centifolio CDA R/A, Ctg 36% 2011Devine Halishohor, Ctg 33% 2011Faizan Height Mehedibag, Ctg 14% 2012Florenza Abedin Colony, Ctg. 17% 2012Jalal Palace Mehedibag, Ctg 7% 2013Madani Tower Mehedibag, Ctg 4% 2013Meherun Villa Nizam Rd, Ctg 10% 2012Motaleb Grandure Nizam Rd, Ctg 31% 2012Reza Ornilla Khulsi, Ctg 98% 2011Weakinings Mehedibag, Ctg 12% 2012Land projects:Kallayanpur Land Project Kallayanpur, Dhaka 100% 2011Green Homes Land Project Ashulia, Savar, Dhaka 100% 2011Village Land Project Ashulia, Savar, Dhaka 100% 2011Valley Land Project Konabari, Gazipur 100% 2011Bhuiyan City Land Project Siddirgonj, Narayangonj 100% 2012Upcoming Projects: To start the upcoming projects as per pre-scheduled manner, NRELmanagement has already acquired land in different areas. For 84 upcoming residential andcommercial projects, the Company already paid Tk. 179.93 crore as development cost andupfront cash commitment. Future areas include Mirpur, Mohammadpur, Uttara, Banani,Gulshan, Baridhara, Kamalapur, Tejgaon etc where it is capturing the market for upper andupper middle-income class people.Page- 9

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedName & Description of the Proposed Project:Apartment Projects:NameLocationNREL'sOwnershipRatioProgoti Bari Nirman Shomiti Plot at Mirpur # 11, Bl # F, Mouja # Senpara Parbata 65%Sirajgonj Chakrijibee Somobay Somity Plot -1/3, Block-D, Sec-15, Mirpur Housing. 65%Jamuna Bohumukhi Shamabay Somity Plot # 1/5, Block # D, Section # 15, Mirpur. 68%Uttaran Shomity Shamiti Plot # 1/4-A, Block # B, Rd. # 01, Sec # 15, Mirpur. 70%Plot #27, Rd. #6/A, Nobodhoy housing,Nobodoy HousingMohammadpur. 55%HatirJheel Eskaton, Hatirjheel. 50%Unnamed P-272,275……, R-8/A, West Dhanmondi. 56.50%Unnamed Plot- 174, Block- B, Basundhara. 50%Unnamed Plot # 20, Garib E Newaz Avenue, Sec # 11, Uttara. 50%Unnamed Plot- 309, 325, 325/A, Baro-Mogbazar, Dhaka. 58%Unnamed Plot- 403, Block- A, Basundhara. 50%Unnamed Plot # 21, Road # 12, Sector # 1, Uttara. 50%Unnamed Plot # 52, Road # 7/C, Sec-9 Uttara. 50%Unnamed Plot # 32, Road # 18, Block J, Banani. 38%Unnamed Plot 52, Road 13, Sector-3, Uttara. 50%Unnamed Plot 95,Road 13, Block E, Banani. 50%Unnamed Plot # 18, Road # 5, Sector # 1, Uttara. 50%Unnamed Plot # 11, Monipuri Para. 47%Unnamed Plot # 17A & 18, Road # 3A & 4A, Sec # 05, Uttara. 50%Unnamed Plot # 13, Road # 128, Gulshan. 44%Unnamed Plot # 31/10, Block # D, Tajmahol Road. 50%Unnamed Plot # 277, Elephant Road, Dhaka. 50%Unnamed 1/15A, Iqbal Road, Mohammadpur, Dhaka. 50%Unnamed Plot # 16, 17 Darus Salam Road, Kallyanpur, Dhaka. 57%Unnamed Plot #4, Road# 2, Bl-K Baridhara, Dhaka. 40%Unnamed Plot- 35, Road- 06, Dhanmondi R/A. 42%Unnamed Plot- 06, Road-02, Bl-K, Baridhara. 40%Unnamed Plot # 2A, Gulshan North Avenue. 50%Wage Wood Plot # 24, Road # 65, Gulshan. 100%Unnamed Plot # 19, Road # 01, Baridhara. 40%Unnamed Plot # 10, Road # 12, Sec # 06, Uttara. 50%Unnamed Plot- 22 Road- 1 Block- K, Baridhara. 30%Unnamed Plot 4 Road -50 Block NWK , Gulshan. 40%Unnamed Plot- 30A, 32, 32A, Road # 08, Gulshan. 50%Unnamed 47 Lalchan Mokem Lane, Dholai Khal. 64%Candle Light Plot -275/K, Road-27 Dhanmondi R/A. 50%NAVANA HR TOWER Plot # 410-412-205,Tejgaon I/A. 50%Unnamed Plot # 05, Sonargaon Janapath, Sec # 07, Uttara. 50%Unnamed Plot # 35 & 35/A, Siddeswari New Circular Road. 53%Unnamed Plot # 16, Mohakhali C/A. 50%Unnamed Plot # 23, Road # 07, Block # K, Baridhara. 38%Unnamed 64, Kakrail. 48%Unnamed 12 Katha, 42/A, Zigatola. 60%Unnamed 3 Nawab Abdul Gani Street, Wari, Dhaka. 50%Chayabithi P-34, B-Cen(H), R-115, Gulshan. 40%Islam Florentine P-14D, R-68, Gulshan 50%Unnamed P 10, B Cws R-33, Gulshan 45%Unnamed P 28/B, 29/A, Kakrail 50%Unnamed P 312 B-C, Bashundhara 50%Unnamed P 33,Segunbagicha. 50%Page- 10

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedUnnamed P 35, R-18,Bl-J, Banani 40%Unnamed P 65, Bijoynogor, Dhaka. 50%Unnamed P-07(New), 701(Old) R-13, Dhanmondi. 50%Unnamed P-24, R-4, B-C, Banani. 50%Pristine Pavilion Gulshan. 50%Sharif Oakdale P-28, R-99, B-Cen (D), Gulshan. 40%Unnamed Fuwang Club 205,Tejgaon I/A. 50%Unnamed P # 2, R # 8/A, Sector # 10, Uttara. 50%Unnamed P 444, Gulbagh Malibagh. 68%Unnamed P # 47, R- 3/F, Sector-09, Uttara. 50%Unnamed P 17A,& B Kabi Jasimuddin Road, Komlapur. 50%Villa Novera P-28, r-06, Sector-3, Uttara. 50%Edenton P- 11/3/A, Kabi Jashimuddin Road, Kamalapur. 60%G H Height P 767(Old) . 67(New) Satmasjid Road Dhanmondi. 50%Hem Periwincle P # 419, B-A, Bashundhara. 50%Lucky Water Fort P 29, R-8, Gulshan. 50%Navana @ Link P 214, Tejgaon I/A. 50%Rosedale P-100,B-D, R-10/2, Niketon, Gulshan. 40%Sobia P 12, Bakshibazar, Lalbagh. 50%Wisteria P-20&21, R-11, S- 9, Uttara. 50%Unnamed Khilkhat. 100%Regious Regious. 100%Unnamed P 1047 & 1287 Nizam Road Ctg. 51%Unnamed H # 2, R # 01, Khulshi 50%Navana Kaligonj Commercial Complex Kaligonj 100%Unnamed Plot # 33, Road # 30/24, Gulshan, Dhaka 50%Unnamed P-10A,B-Nw(K),R-50,Gulshan 40%Unnamed P-2/3, B-C, Lalmatia 50%Unnamed P-34, R-6, Dhanmondi 33%Land Projects:NameLocationArea in NREL'sKatha Ownership RatioKaligonj Land Kaligonj, Gazipur 876.00 100%Bhatara Land Badda, Dhaka 45.00 100%Barua Land Khilkhet, Dhaka 49.09 100%Dhogari Land Rajendrapur, Gazipur 171.51 100%* The area mentioned in the proposed project is under planning and it will be finalised upon approval Rajuk andother related Authority.Relative contribution of Products/Services contributing more than 10% of the totalrevenueThe relative contribution to sales and income of each product that accounts for more than10% of the Company’s total revenue are mentioned below:ProductFor the year ended Aug 31, 2010 For the year ended Aug 31, 2009Volume % Volume %Apartments 2,821,617,292 99% 1,651,866,356 99%Plot 22,195,000 1% 20,938,488 1%Total 2,843,812,292 100% 1,672,804,844 100%Page- 11

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedAssociates, subsidiary/related holding Company & their core areas of businessNREL belongs to Navana Group, one of the well reputed business conglomerates inBangladesh. Navana Group emerged into a separate corporate entity from Islam Group afterthe death of its Chairman, Mr. Jahurul Islam, which was then the largest business group inBangladesh. They comprise of a number of companies, have diversified their activities invarious areas like product and project marketing, construction and real estate business,international trading, distributorship and production of various items and already attainedsignificance in the business arena of Bangladesh. There is no associate, subsidiary or holdingCompany except the following sister companies:NREL’s Sister CompaniesCompanyNavana LimitedAftab Automobiles Ltd.Navana Electronics LtdNavana CNG LtdNavana Logistics LtdBiponon LtdNavana Interlinks LtdNavana Construction LtdNavana Toyota Service Center Ltd.Navana Computer & Techno. Ltd.Navana Building Products LimitedNavana Textiles Ltd.Navana Distributions Ltd.Navana Petroleum Ltd.Navana Taxi Cab Co. Ltd.Navana Power Co. Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Area of OperationToyota, Hino, Good year Tire, forklift, Toyota 3S Centre.Automobile Assembling, Body BuildingIPS, UPS, Stabilizer, Generator manufacturing, marketing & sales.CNG conversion & refueling.Freight Forwarders & Shipping AgentMedical & Scientific equipment marketing & salesGenerator, building solution & energy savings light unitBuilding and Road construction.Servicing of Motor Vehicles.Trading of ICT ProductsProduction of Ready Mix Concrete & Other Building ProductsReadymade GarmentsConsumable Goods Producer & DistributorTrading of Petroleum ProductsTaxi cab servicePower generationRenewable energy & solar systemAutomotive batteries manufacturingHome, office, hospital & Industrial furniture manufacturingDecorative paint manufacturingDistribution of products/Services:A strong team of marketing & sales are engaged to cater the product though Daily newspaper, web site, Direct mailing, REHAB fair, Personal contact, Project sign board, Bill boardand through existing buyer.Page- 12

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedCompetitive conditions in the businessCompetitive ConditionThere are more than 1500 Companies in Real Estate sector in Bangladesh. Among them 898are the members of REHAB. The sector contributed 14% to the Gross Domestic Product(GDP) on the last fiscal year 09-10, & within a span of three decades, the turnover from thisindustry has reached to more than 28000 million taka. The Govt. revenue has stands onaverage 2000 million BD Taka per year from this sector. The market share of NREL isapproximately 10%. The followings are the major real estate companies in Bangladesh.1. Building Technology & Ideas Limited.2. Concord Real Estate & Development Ltd.3. Bay Developments Ltd.4. Asset Developments & Holdings Ltd.5. South Breeze Housing Ltd.6. Rangs Properties Ltd.7. Shanta Properties Ltd.8. Assurance Developments Ltd.9. Eastern Housing Ltd.10. Dom-Inno Builders ltd.11. Sheltac.12. Advanced Developments &Technologies Ltd.Description of the PropertyLocation of principal plants and other property of the company and their conditionThe head office the Company is located at Dhanmondi, Dhaka.Value of the PropertiesCompany owns the following operating assets and they are situated at different locations ofthe Head Office/projects of the Company. Following table represents the classifications ofoperating assets along with the written down value of the same as at 31 August 2010:-ParticularsCost Depreciation Carrying amountAs at Addition As at As at Charged As at As at01.09.09during theduring the31.08.10 01.09. 09yearyear31.08.10 31.08.2010Office space3,595,203 - 3,595,203 - - - 3,595,203Officeequipments 5,338,318 1,203,760 6,542,078 1,632,410 883,740 2,516,150 4,025,928Furniture &fixtures 3,093,275 6,885,132 9,978,407 1,307,454 867,095 2,174,549 7,803,858Airconditioningsystem12,732,694 - 12,732,694 1,903,022 1,082,967 2,985,989 9,746,705Powergenerator &electricalequipment13,268,397 897,000 14,165,397 2,522,718 2,095,682 4,618,400 9,546,997ConstructionequipmentsVehicles74,590,943 5,334,550 79,925,493 17,998,973 11,146,774 29,145,747 50,779,74670,924,062 37,990,000 108,914,062 33,496,918 13,575,086 47,072,004 61,842,058Total183,542,892 52,310,443 235,853,335 58,861,495 29,651,345 88,512,840 147,340,495Page- 13

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedBoard of DirectorsThe Board of Directors of NREL comprises of 5 (five) Directors. The name, age and positionof all Directors of the Company are as follows:-Sl.No. Name and address of director Age (Years) Position1 Mr. Shafiul Islam 61 Chairman2 Mrs. Khaleda Islam 55 Director3 Mr. Saiful Islam 35 Director4 Mr. Sajedul Islam 31 Director5 Ms. Farhana Islam 27 DirectorShort Bio-data of Directors:Mr. Shafiul Islam Kamal, Chairman, 1949:A Bachelor of Science, Mr. Kamal joined the Islam Group, a reputed business conglomeratein Bangladesh in 1968 and started his career with automobile business as well as in theconstruction, real estate business. In the early years, he gained valuable experience by beinginvolved in the management of the Group’s diverse business operations. He played a majorrole in establishing “Navana” as the Toyota brand car trading company in Bangladesh, andfinally set up Aftab Automobiles Ltd. He was also responsible for the construction companynamed Bengal Development Corporation (BDC) where he was directly responsible for theconstruction work of BDC in the Middle East and from 1981, he was also taking care ofEastern Housing Limited, then the largest real estate developing company in Bangladesh. In1996, the then Chairman of Islam Group, he separated from Islam Group with Navana Ltdand Aftab Automobiles Ltd and formed Navana Group. He has a very good relationship withall the top politicians, bureaucrats, top military officials and other business key persons ofthe country.Mrs. Khaleda Islam, Director, 1955:Mrs. Khaleda is the wife of Mr. Shafiul Islam Kamal, Chairman of the Navana Group. MrsKhaleda has experience in business for more than 30 years. She traveled many countries ofthe world.Mr. Saiful Islam, Vice-Chairman, 1975:An MBA, Mr. Saiful joined the Navana Group in 1997. In the early years, he gained valuableexperience by being involved in the management of the Group’s diverse business operations.He has been appointed as Managing Director & CEO of Aftab Automobiles Ltd and NavanaCNG Limited in 2006. He took various business related professional courses at home andabroad. He traveled almost all the countries of the world.Mr. Sajedul Islam, Director, 1979:A BBA, Mr. Sajedul, a young enthusiastic entrepreneur of the country, joined the NavanaGroup in 1999. In the early years, he gained valuable experience by being involved in themanagement of the Group’s diversified business operations. He is the Chief Executive ofNavana Real Estate Limited and Navana Construction Limited. He took various businessrelated professional courses at home and abroad. He traveled many countries of the world.Page- 14

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedMs. Farhana Islam, Director, 1983:A BBA, Ms Farhana, a young enthusiastic entrepreneur of the country, joined the NavanaGroup in 2004. In the early years, she gained valuable experience by being involved in themanagement of the Group’s diversified business operations. She took various businessrelated professional courses at home and abroad. She traveled many countries of the world.Description of the directors:Sl.No.NameAgeYearsPositionDate of BecomingDirector for thefirst time1. Mr. Shafiul Islam 61 Chairman 22 September 19962. Mr. Saiful Islam 35 Vice Chairman 22 September 19963. Mrs. Khaleda Islam 55 Director 22 September 19964. Mr. Sajedul Islam 31 Director 22 September 19965. Ms. Farhana Islam 27 Director 22 September 1996Date of becoming first Directors and date of expiry of current termSl.Date of FirstNamePresent PositionNo.Directorship1. Mr. Shafiul Islam Chairman 22 September 19962. Mr. Saiful Islam Vice Chairman 22 September 19963. Mrs. Khaleda Islam Director 22 September 19964. Mr. Sajedul Islam Director 22 September 19965. Ms. Farhana Islam Director 22 September 1996Expiry of currenttermOne third of totaldirectors take retirementat every Annual GeneralMeeting and re-elect iseligible other thanManaging Director.Directors Ownership in other CompaniesSl. No.NameDesignation withNREL1. Mr. Shafiul Islam Chairman2. Mr. Saiful IslamVice-ChairmanEntities where they haveInterestNavana Ltd.Aftab Automobiles Ltd.Navana Electronics Ltd.Navana CNG Ltd.Navana Logistics Ltd.Biponon Ltd.Navana Interlinks Ltd.Navana Construction Ltd.Navana Toyota Service Center Ltd.Navana Computers & Tech Ltd.Navana Building Products LtdNavana Textiles Ltd.Navana Distribution s LtdNavana Petroleum Ltd.Navana Taxi Cab Co. Ltd.Navana Power Co. Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Navana Ltd.Aftab Automobiles Ltd.Navana Electronics Ltd.Navana CNG Ltd.Navana Logistics Ltd.Biponon Ltd.Navana Interlinks Ltd.Navana Construction Ltd.Navana Toyota Service Center Ltd.Navana Computers & Tech Ltd.PositionChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanChairmanVice-ChairmanManaging DirectorDirectorVice-Chairman & CEODirectorDirectorDirectorDirectorVice-Chairman & CEODirectorPage- 15

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited3. Mrs. Khaleda Islam Director4. Mr. Sajedul Islam DirectorMs. Farhana IslamDirector5.Navana Building Products LtdNavana Textiles Ltd.Navana Distribution LtdNavana Taxi Cab Co. Ltd.Navana Power Co. Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Navana Ltd.Aftab Automobiles Ltd.Navana Construction Ltd.Biponon Ltd.Navana Computers & Tech Ltd.Navana Interlinks Ltd.Navana Taxi Cab Co. Ltd.Navana Electronics Ltd.Navana Textiles Ltd.Navana Distribution LtdNavana CNG Ltd.Navana Power Co. Ltd.Navana Petroleum Ltd.Navana Logistics Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Navana Building Products LtdNavana Toyota Service Center Ltd.Navana Ltd.Aftab Automobiles Ltd.Navana Construction Ltd.Biponon Ltd.Navana Computers & Tech Ltd.Navana Interlinks Ltd.Navana Taxi Cab Co. Ltd.Navana Electronics Ltd.Navana Textiles Ltd.Navana Distribution LtdNavana Logistics Ltd.Navana CNG Ltd.Navana Power Co. Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Navana Building Products Ltd.Navana Toyota Service Center Ltd.Navana Ltd.Aftab Automobiles Ltd.Navana Construction Ltd.Biponon Ltd.Navana Computers & Tech Ltd.Navana Interlinks Ltd.Navana Taxi Cab Co. Ltd.Navana Electronics Ltd.Navana Textiles Ltd.Navana Distribution Ltd.Navana CNG Ltd.Navana Power Co. Ltd.Navana Petroleum Ltd.Navana Logistics Ltd.Navana Renewable Energy Ltd.Navana Batteries Ltd.Navana Furniture Ltd.Navana Paints Ltd.Navana Building ProductsNavana Toyota Service Center Ltd.Vice-ChairmanDirectorDirectorDirectorDirectorDirectorVice-ChairmanVice-ChairmanVice-ChairmanDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorPage- 16

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedSl.No.Management of the CompanyParticulars of Top Executives & Departmental Heads of the CompanyName of the OfficersPositionEducationalQualificationDate ofJoining in theCompanyLast JobExperience/Last 5 YearsExperienceTotalExperience(Years)1 Engr. Md. Shahidullah Executive B.sc. (Mech) 1-Feb-1996 Director, Islam39DirectorGroup2 Maj Gen (Retd) Mohammad Ali Advisor BA, MDS, NDC 16-Oct-2007 Bangladesh Army 373 Md. Alamgir Hossain, FCA Chief Financial Chartered 25-June-09 Finance Controller, 29OfficerAccountantRangs Group4 Engr. Md. Shakawat Hossain Sr. GeneralManager (ProjectOperation)B.Sc. (Civil) 1-Mar-2010 Vice Precedent,Sanmar PropertiesLtd.245 Mohammed Fasiul Mowla Sr. GeneralManager (Sales &LandDevelopment)6 Md. Wahiduzzaman General Manager(Procurement &Inventory)7 Syed Mobinul Bari General Manager(CustomerService)8 Md. Mazedur Rahman General Manager(Engineering)9 A.S.M. Moin Dy. GeneralManager(Engineering)10 Ezaz Ahmed, ACMA Sr. Manager ( F &A)11 Tareque Enamur Rahim CompanySecretary12 Muhammad Shahidul Islam Khan,ACAHead of InternalAuditM. Com. 18-Sep-2004 D.G.M. (Sales &Marketing),AdvanceDevelopment Ltd.M. Com, CC 3-Sep-2007 G.M.(Procurement),AssetDevelopments Ltd.B.Com. 8-June-2008 G.M. (CustomerService), AssetDevelopments Ltd.B.Sc. (Civil) 15-Sep-2010 G.M.(Engineering),Dom-InnoDevelopments Ltd.B.Sc. (Civil) 3-Jan-1998 Project Engineer,BDC Ltd, IslamGroupCost &ManagementAccountant14-May-2008Manger, PremierLeasing & FinanceLtd.Honors Graduate 1982 Deputy CompanySecretary, AftabAuto MobilesCharteredAccountant01-10-2004 Head of InternalAudit, NavanaCNG Ltd.1717272024103310VAT, income tax, customs duty or other tax liabilityVAT: There is no VAT liability outstanding of the company.Customs duty: There is no outstanding customs duty due to the company.Tax: There is no outstanding tax due to the company and got clearance certificate fromNational Board of Revenue up to Tax Year 2010-2011.Determination of the offering priceNavana Real Estate Limited is one of the leading market participants in the real industry ofBangladesh. The Company is enjoying a high growth in revenue and net profit in the pastcouple of years.Net Asset Value (NAV) gives asset-backing to the shares of the Company. Earnings Per Share(EPS) indicates profitability against shares of the Company. Earnings-based Value and BookValue-based Value have been taken to estimate a theoretical fair price that gives us goodindication of market demand for the shares of the Company. The weighted average pricederived from the four valuation methods, giving equal weight, is the indicative offer price forthe shares of Navana Real Estate Limited to be issued through the IPO under Book BuildingMethod.Page- 17

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedDifferent methods used to determine the fair price per share of the Company are presentedbelow:Method 1 –Price based on Net Asset Value (NAV) based price per share:ParticularsAmountA. Share Capital as at 31 August 2010 300,000,000B. Reserve and Surplus as at 31 August 2010 881,924,935C. Total Shareholders' Equity as at 31 August 2010 (A+B) 1,181,924,935D. Number of shares as at 31 August 2010 30,000,000E. Net Asset Value (NAV) Per Share as at 31 August 2010 (C/D) 39.40Method 2 –Price based on Earning per Share (EPS):The Company’s operational performances and financial results reflect its growth, financialstrength, earning and prospects that help investors in making informed investment decision.These are summarized as follows:FinancialYearNet ProfitPaid-upCapitalno. ofoutstandingshareEarningpershare(EPS)Dilutedno. ofShareRestatedEPS31-Aug-10 290,097,916 300,000,000 30,000,000 9.67 30,000,000 9.6731-Aug-09 146,773,585 51,000,000 5,100,000 28.78 30,000,000 4.8931-Aug-08 23,692,499 1,000,000 100,000 236.92 100,000 236.9231-Aug-07 2,164,282 1,000,000 100,000 21.64 100,000 21.6431-Aug-06 2,385,465 1,000,000 100,000 23.85 100,000 23.85Average 64.17 59.40Capital Issue Date & form:Allotment no. Date of Allotment Consideration Amount in Tk.1 st 22-09-1996 Cash 1,000,000.002 nd 27-08-2009 Cash 50,000,000.003 rd 13-04-2010 Cash 49,000,000.004 th 25-07-2010 Bonus 200,000,000.00Total 300,000,000.00The weighted average net profit after tax for the last 5 (five) years stands at Tk.93,022,749.40 and the restated average EPS stands at Tk. 59.40. If we consider the shareprice of the Company on the basis of price earning multiple of 10, the earning based value ofshares of the Company stands at Tk. 594.Method 3 - Price Based On P/E Ratio of Similar Stocks:Average P/E Ratio of Similar CompaniesSl.No.CompanyFaceValueNAV EPS Market Price(12 months avg.)P/ERatio1 Samorita Hospital Ltd. 100.00 138.48 27.77 1101.21 39.652 Eastern Housing Ltd. 100.00 153.96 18.28 859.65 47.033 Summit Alliance Port Ltd. 10.00 30.81 3.66 219.76 60.044 *Ocean Containers Ltd. 10.00 49.62 3.39 187.54 55.32Average 50.51Page- 18

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedDetermining the Fair Value of Navana’s Stock:Diluted EPS 9.67Representative P/E Multiple (X) 50.51Fair Value (BDT) 488.45Method 4 - Price based on P/BV Ratio of Similar Stocks:Average P/BV Ratio of Similar CompaniesSl.No.CompanyFaceValueEPS NAV MarketPrice(12 monthsavg)P/BVRatio1 Samorita Hospital Ltd. 100.00 27.77 138.48 1101.21 7.952 Eastern Housing Ltd. 100.00 18.28 153.96 859.65 5.583 Summit Alliance Port Ltd. 10.00 3.66 30.81 219.76 7.134 *Ocean Containers Ltd. 10.00 3.39 49.62 187.54 3.78Average 6.11Determining the Fair Value of Navana’s Stock:NAV 39.40Representative P/BV Multiple (X) 6.11Fair Value (BDT) 240.73* Seven Month Average PriceFinding and Calculation of the fair Price of share of NREL:ParticularsValuePrice based on Net Asset Value /Equity based value per share (NAV) 39.40Price based on Earning per share (EPS) 594.00Price Based On P/E Ratio of Similar Stock 488.43Price based on P/BV Ratio of Similar Stock 240.73*Average (Geometric Mean) 229.05*The above valuation methods show highly skewed data. Therefore we use geometric mean rather than arithmeticmean. The geometric mean is a measure of central tendency, just like a median.Therefore Based on the above calculation the fair value of the Stock of the Company standsat Tk. 229.05 and we conservatively fix up the expected price @ Tk. 140.00 per shareincluding a premium of Tk. 130.00 per share.OWNERSHIP OF THE COMPANY’S SECURITIESIn the financial year 2009-10, shareholding pattern of the Company changed. New fourshareholders were included in the Company. The authorized share capital of the Companyincreased to Tk. 100.00 crore from Tk. 10.00 crore, and paid-up capital increased to Tk.30.00 crore from Tk. 5.10 crore. Present shareholding pattern of the Company is givenbelow (as per audited accounts):Page- 19

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNREL’s Directors List and Shareholding PatternName Position Held Total number of % of share heldShareMr. Shafiul Islam Chairman 1,19,800 39.93%Mr. Saiful Islam Vice Chairman 13,800 4.60%Mrs. Khaleda Islam Director 13,800 4.60%Mr. Sajedul Islam Director 13,800 4.60%Ms. Farhana Islam Director 13,800 4.60%Mr. Md. Aminul Hoque Shareholder 15,000 5.00%Aftab Automobiles Ltd Shareholder 60,000 20.00%Laguna Autos Ltd Shareholder 25,000 8.33%Biponon Ltd Shareholder 25,000 8.33%Total 3,00,000 100.00%5% or more of the Shareholding structure of the Company (as per auditedaccounts):Sl.No.NameStatus withtheCompanyNo. ofSharesPercentage ofownership1. Mr. Shafiul Islam Chairman 119,800 39.933%2 Mr. Md. Aminul Hoque Share Holder 15,000 5.000%3 Aftab Automobiles Ltd. Share Holder 60,000 20.000%4 Laguna Autos Ltd. Share Holder 25,000 8.333%5 Biponon Ltd. Share Holder 25,000 8.333%Securities of the Company owned by each director (as per audited accounts):Securities owned by each director are given below (as on 31 August 2010):Sl.No.NameStatus with theCompanyNo. ofSharesPercentage ofownership1. Mr. Shafiul Islam Chairman 119,800 39.933%2. Mrs. Khaleda Islam Director 13,800 4.600%3. Mr. Saiful Islam Director 13,800 4.600%4. Mr. Sajedul Islam Director 13,800 4.600%5. Ms. Farhana Islam Director 13,800 4.600%Book Building MethodBook Building is a process through which an issuer attempts to determine the price to offerits security based on demand from institutional investors. Under the process, the price of anIPO share will be determined through an automated bidding to be participated by differentfinancial institutions and then the share will be opened for the IPO participant at the cut-offprice determined during the book building process. The bidding will be handled through auniform and integrated automated system of the stock exchanges, or any other organizationas decided by the Commission, especially developed for book building method. The entireprocedure of price discovery under book building method is delineated below:a) The issuer/issue manager shall issue invitation to the eligible institutional investors,both in writing and through publication in at least 5 (five) widely circulated national dailies,giving at least 10 (ten) working days time, to the road show/presentation/seminar indicatingtime and venue of such event.Page- 20

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedb) The invitation letter shall accompany an information document containing all relevantinformation covering the proposed issue of the issuer. The eligible institutional investors shallsubmit indicative price to the issuer/issue manager, signed jointly by the Chief ExecutiveOfficer (CEO) and the Financial Analyst, highlighting the factors taken into consideration insupport of the indicative price, within the next 3(three) working days of the said roadshow/presentation/seminar;c) The indicative price band will be fixed based on the past performance, expected futureearnings of the issuer and the P/E ratio of other peer companies in the industry and thedetermination of indicative price involves the following institutional investors registered withor approved by SEC in this regard:-- Merchant Bankers except the issue manager of the proposed issue;- Foreign institutional investors;- Recognized pension funds and provident funds;- Banks and NBFIs under regulatory control of Bangladesh Bank;- Insurance Companies regulated under Insurance Act, 1938;- Institutional venture capital and institutional investors;- Stock Dealers; and- Any other artificial juridical person permitted by the SEC for this purpose.d) Issuer in association with issue manger and eligible institutional investors quote anindicative price in the prospectus with the rationale for such price and submit the prospectusto the Commission with copy to the stock exchanges.e) The indicative price range shall be determined as per price indications obtained fromat least 15 (fifteen) eligible institutional investors covering at least 3 (three) differentcategories including at least 5 (five) merchant banks of such investors.f) Eligible institutional investors bidding shall commence after getting consent from theCommission for this purpose. Institutional bidding period will be 3 to 5 (Three to Five)working days which may be changed with the approval of the Commission.g) Eligible institutional investors (EIIs) shall not be allowed to participate in the biddingunless they participate and quote in the Road Show for setting the indicative price. The EIIparticipating in the Road Show and quote price must also participate in the bidding. Theissuer and issue manager will jointly submit the attendance sheet and the quoted price bythe EII along with the draft prospectus to SEC.h) Prospectus will be posted on the Websites of the Commission, stock exchanges, issuemanager and issuer at least 2 (two) weeks prior to the start of the bidding to facilitateinvestors to know about the company and all aspect of offering.Page- 21

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedi) The indicative price shall be the basis for formal price building with an upward anddownward band of 20% (Twenty Percent) of indicative price within which eligible institutionalinvestors shall bid for the allocated amount of security.j) If institutional quota is not cleared at 20% (Twenty Percent) below indicative price,the issue will be considered cancelled unless the floor price is further lowered within the facevalue of security. Provided that the issuer’s chance to lower the price shall not be more thanonce.k) No institutional investor shall be allowed to quote for more than 10% (Ten Percent) ofthe total security offered for sale, subject to maximum of 5 (Five) bids.l) The volume and value of bid at different prices will be displayed on the monitor of thesaid system without identifying the bidder.m) The institutional bidders will be allotted security on pro-rata basis at the weightedaverage price of the bids that would clear the total number of securities being issued tothem.n) Institutional bidders shall deposit their bid with 20% (Twenty Percent) of the amountof bid in advance to the designated bank account and the rest amount to settle the duesagainst security to be issued to them shall be deposited within 5 (Five) working days prior tothe date of opening subscription for general investors.o) In case of failure to deposit remaining amount that is required to be paid byinstitutional bidders for full settlement of the security to be issued in their favor, 50% (FiftyPercent) of bid money deposited by them shall be forfeited by the Commission. Thesecurities earmarked for the bidder who defaulted in making payment shall be added to thegeneral investor quota.p) The time gap between closure of bidding by Eligible Institutional Investors andsubscription opening for general investors is 25 working days or as may be determined bythe Commission.q) The securities will be offered to the general investors, NRBs and Mutual Funds at thecut-off price determined during the book building process.Description of Securities Outstanding or Being Offereda) Dividend, Voting and Preemption RightIn case of any declaration of cash/stock dividend by the Company or distribution of anyproperty of the Company, all the shareholders shall be entitled to it in proportion to theirPage- 22

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedshareholdings on the date of the book closure or record date for the purpose. The Companywill follow a dividend policy, which will allow it to provide a fair return on its shareholders’investment and simultaneously allow for building up of the retained earnings and reserves asa rule that would sustain growth of the Company. The share capital of the Company isdivided into Ordinary Shares, carrying equal rights to vote and receive dividend in terms ofthe relevant provisions of the Companies Act 1994 and the Articles of Association of theCompany. All shareholders shall have the usual voting right in person or by proxy inconnection with, among others, election of Directors and Auditor(s) and other usual agendaof General Meeting – Ordinary or Extra ordinary. On a show of hand, every shareholderpresent in person and every duly authorized representative of a shareholder present at aGeneral Meeting shall have one vote and on a poll every shareholder present in person or byproxy shall have one vote for every share held by him or her. In case of any additional issueof shares for raising further capital the existing shareholders shall be entitled to Rights Issueof shares in terms of the guidelines issued by the Securities and Exchange Commission fromtime to time.b) Conversion and Liquidation RightThe Company in its General Meeting may convert paid-up shares to any denomination. Nospecial preferences or privileges shall be attached to this conversion. If the company at anytime issues Preference Shares or Debentures or Bonds with the consent of SEC, such holdersof securities shall be entitled to convert such securities into ordinary shares if it is sodetermined by the company. In case of winding- up or liquidation of the Company, allshareholders have the same privileges and advantages as ordinary shareholder as regardsparticipation in profits and voting at meetings of the Company.c) Right for TransferIn terms of the provisions of the Companies Act 1994, Articles of Association of the Companyand other relevant rules in force, the shares of the Company are transferable. The Companyshall not charge any fee other than Government duties for registering transfer of shares. Noshares shall be transferred to an infant or a person of unsound mind.d) Dividend PolicyI. The profits of the Company, subject to any special right relating thereto created orauthorized to be created by the Memorandum of Association and subject to theprovision of the Articles of Association, shall be divisible among the members inproportion to the amount of capital paid -up on the shares held by themrespectively.II. No larger dividend shall be declared than is recommended by the directors, but thePage- 23

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedCompany in its General meeting may declare a smaller dividend. If preferenceshare dividend is not paid in one year, such unpaid dividend shall be carriedforward to the next year or years; and become cumulative.III. The declaration of directors as to the amount of net profit of the company shall beconclusive.IV. No dividends shall be paid otherwise than out of the profits of the year or any otherundistributed profits and general reserves. Dividend shall not carry interest asagainst the Company.V. The Directors may from time to time pay off the members such interim dividend asappear to the Directors to be justified by the profits of the Company.VI. A transfer of shares shall not pass the right to any dividend declared thereon aftersuch transfer and before the registration of the transfer.VII.There is no limitation on the payment of dividends to the common stockholders.e) Other Rights of ShareholdersThe shareholders shall have the right to receive all periodic reports and statements, auditedas well as unaudited, published by the company from time to time. The directors shallpresent the financial statements as required under the law and International AccountingStandards and International Financial Reporting Standards as adopted by the Institute ofChartered Accountants of Bangladesh. Financial statements will be prepared in accordancewith International Financial Reporting/Accounting Standards, consistently applied throughoutthe subsequent periods and present with the objective of providing maximum disclosure asper law and international Financial Reporting/Accounting Standard to the shareholdersregarding the Financial and operational position of the company.In case of any declaration of stock dividend through issue of Bonus Shares, all shareholdersshall be entitled to it in proportion to their shareholdings on the date of book closure orrecord date for the purpose.The shareholders holding not less than 10% of the issued/fully paid up capital of theCompany shall have the right to requisition Extra-Ordinary General Meeting (EGM) of theCompany as provided under Section 84 of the Companies Act, 1994.Availability of SecuritiesSl.Number ofParticularsNumberShares1 20% of IPO of Ordinary Shares are reserved for Eligible6,000,000Institutional Investors through Book Building Method2 10% of IPO of Ordinary Shares are reserved for Mutual Funds 3,000,0003 10% of IPO of Ordinary Shares are reserved for Non-Resident 3,000,000Bangladeshis (NRB)4 Remaining 60% of IPO of Ordinary Shares are reserved forGeneral Public18,000,000Total 30,000,000Page- 24

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited1) 20% of the total public offering shall be reserved for the Eligible Institutional Investors(EII), 10% shall be reserved for mutual funds, 10% for non-resident Bangladeshi (NRB) andthe remaining 60% shall be open for subscription by the general public.2) The Institutional Investors will be allotted security on a pro-rata basis at the weightedaverage price of the bids that would clear the total number of securities being offered to theInstitutional investors.3) The securities offered to the Mutual Funds, NRBs and General Public will be at the cut-offprice determined during the Book Building Process.4) In case of over-subscription under any of the categories mentioned in the above table,the Issue Manger shall conduct an open lottery of all the applications received under eachcategory separately in accordance with the letter of consent issued by the Securities andExchange Commission.5) In case of under-subscription under any of Mutual Funds or NRB category as mentionedin the above table, 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 issuerand the issue manager shall jointly conduct an open lottery of all the applicants addedtogether.6) In case of under-subscription of the public offering, the unsubscribed portion of sharesshall be taken up by the underwriter(s).7) The lottery as stated in clause (5) and (6) should be conducted in the presence of therepresentatives of Issuer, Stock Exchange(s) and the applicants, if there be any.Miscellaneous Information:Corporate DirectoryRegistered Office:Auditors:BankerManager to the IssueRegistrar to the IssueCompany’s Compliance OfficerIslam Chamber, 125A Motijheel C/A, Dhaka-1000.Rahman Mostafa Alam & Co.Chartered AccountantsAB Bank LimitedCity Bank Ltd.Dhaka Bank Ltd.Pubali Bank Ltd.Southeast Bank Ltd.United Commercial Bank Ltd.ICB Capital Management Limited8, DIT Avenue, Dhaka-1000Lanka Bangla Finance Limited20, Kemal Ataturk Avenue, Safura Tower (11th Floor) Banani, Dhaka.Md. Tareq Enamur RahimCompany SecretaryPage- 25

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedFinancial Statements as at and for the period ended 30 September 2010AUDITORS’ REPORTToThe shareholders of Navana Real Estate LimitedWe have audited the accompanying financial statements of Navana Real Estate Limited(NREL) which comprise the statement of financial position as at August 31, 2010, and thestatement of comprehensive income, the statement of changes in equity and statement ofcash flows for the year then ended, and a summary of significant accounting policies andother explanatory notes.Management’s responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financialstatements in accordance with Bangladesh Financial Reporting Standards (BFRS), and forsuch internal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatements, whether due to fraud orerror.Auditors’ responsibilityOur responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Thosestandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors’judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstance, but not for the purpose of expressing an opinion on the effectiveness of theentity’s internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as wellas evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.OpinionIn our opinion, the financial statements give a true and fair view of the financial position ofNREL as at August 31, 2010, and its financial performance and its cash flows for the yearthen ended in accordance with Bangladesh Financial Reporting Standards (BFRS) and complywith the applicable sections of the Companies Act, 1994, the Securities and Exchange Rules,1987 and other applicable laws and regulations.We also report that:a) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit and made dueverification thereof;Page- 26

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedb) in our opinion, proper books of account as required by the law have been kept by theCompany so far as it appeared from our examination of those books;c) the Company’s financial position and statement of comprehensive income dealt with bythe report are in agreement with the books of account and returns; andd) the expenditure incurred was for the purposes of the Company’s business.Dated: DhakaRahman Mostafa Alam & Co.14 October 2010 Chartered AccountantsPage- 27

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNavana Real Estate LimitedStatement of Financial PositionAs at 31 August 2010Notes 31/8/10 31/8/09BD TakaBD TakaAssetsNon-current assetsProperty, plant & equipment 3.00 147,340,495 133,401,599Investment properties 4.00 396,550,000-Total non-current assets 543,890,495 133,401,599Current assetsInventories 5.00 1,485,600,054 870,687,489Construction works in progress 6.00 3,166,160,453 2,067,986,787Deferred revenues 7.00 1,004,022,468 255,455,671Advances, deposits & pre-payments 8.00 1,909,692,127 1,355,935,466Cash & bank balances 9.00 96,835,996 42,594,451Total current assets 7,662,311,098 4,592,659,864Total assets 8,206,201,593 4,726,061,463Equity and liabilitiesCapital and reservesShare capital 10.00 300,000,000 51,000,000Retained earnings 11.00 881,924,935 408,218,519Total equity 1,181,924,935 459,218,519Non-current liabilitiesLong-term borrowings 12.00 367,844,124 468,324,514Lease finance 13.00 89,713,415 22,446,735Total non-current liabilities 457,557,539 490,771,249Current liabilitiesCurrent maturity: long term borrowings 12.00 115,018,179 130,692,535Current maturity: lease finance 13.00 25,684,602 13,646,365Short-term loan 14.00 1,342,577,118 852,463,068Advance against sales 15.00 4,568,214,590 2,620,776,246Accounts payable 16.00 289,230,349 67,818,737Accrued expenses and other payables 17.00 225,994,281 90,674,744Total current liabilities 6,566,719,119 3,776,071,695Total liabilities 7,024,276,658 4,266,842,944Total equity and liabilities 8,206,201,593 4,726,061,463Net assets value per share (par valueTk. 1000 each)3,940 1,531The annexed notes 1 to 27 form an integral part of these financial statementsSd/- Sd/- Sd/-Chairman Director Chief Financial OfficerSigned in terms of our separate report of even dateDate: DhakaRahman Mostafa Alam & Co.14 October 2010 Chartered AccountantsPage- 28

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNavana Real Estate LimitedStatement of Comprehensive Incomefor the year ended 31 August 2010NotesYear endedYear ended31/8/10 31/8/09BD TakaBD TakaRevenues 18.00 2,843,812,292 1,672,804,844Cost of revenues 19.00 (2,123,729,045) (1,247,066,909)Gross profit 720,083,247 425,737,935Other gains 20.00 580,104 5,300,616Administration expenses 21.00 (120,796,067) (102,229,868)Finance costs 22.00 (198,465,443) (165,613,695)Profit before tax 401,401,841 163,194,988Income tax expense 23.00 (111,303,925) (16,421,403)Profit for the year 290,097,916 146,773,585Earnings per share (par value Tk. 1000each)24.00 966.99 489.25The annexed notes 1 to 27 form an integral part of these financial statementsSd/- Sd/- Sd/-Chairman Director Chief Financial OfficerSigned in terms of our separate report of even dateDate: DhakaRahman Mostafa Alam & Co.14 October 2010 Chartered AccountantsPage- 29

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNavana Real Estate LimitedStatement of Changes in Equityfor the year ended 31 August 2010RetainedShare capitalearningsTotalBD Taka BD Taka BD TakaBalance at 1 September 2008 1,000,000 33,001,501 34,001,501Capital raised during the year 50,000,000 - 50,000,000Prior years' adjustment - 228,443,433 228,443,433Profit for the year - 146,773,586 146,773,586Balance at 31 August 2009 51,000,000 408,218,519 459,218,519Balance at 1 September 2009 51,000,000 408,218,519 459,218,519Capital raised during the year 49,000,000 - 49,000,000Issue of bonus share 200,000,000 (200,000,000) -Revaluation surplus of investmentproperties - 383,608,500 383,608,500Profit for the year - 290,097,916 290,097,916Balance at 31 August 2010 300,000,000 881,924,935 1,181,924,935Sd/- Sd/- Sd/-Chairman Director Chief Financial OfficerPage- 30

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNavana Real Estate LimitedStatement of Cash FlowsFor the year ended 31 August 2010Year endedYear ended31/8/10 31/8/09BD TakaBD TakaA. Cash flows from operating activitiesReceipts from customers 2,844,392,396 1,860,413,351Payment for cost & expenses (2,547,125,174) (2,180,804,223)Finance cost paid (172,881,774) (165,613,695)Income tax paid (17,042,131) (4,110,593)Net cash generated by/(used in)operating activities 107,343,317 (490,115,160)B. Cash flows from investing activitiesAcquisition of property, plant and equipment (52,310,443) (97,436,885)Acquisition of investment properties (12,941,500) -Disposal of investment in shares - 5,697,071Net cash used in investing activities (65,251,943) (91,739,814)C. Cash flows from financing activitiesProceeds from issue of ordinary shares 49,000,000 50,000,000Received from long-term borrowings - 549,405,543Received from lease finance 79,304,917 1,718,312Repayment of long-term borrowings (116,154,746) -Net cash inflows from financingactivities 12,150,170 601,123,855D. Net cash inflows in this year (A+B+C) 54,241,545 19,268,881E. Cash and cash equivalents at thebeginning of year 42,594,451 23,325,570F. Cash and cash equivalents at the end ofyear (D+E) 96,835,996 42,594,451Net operating cash flows per share (parvalue Tk. 1000 each)358 (1,634)Sd/- Sd/- Sd/-Chairman Director Chief Financial OfficerPage- 31

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedNotes to the financial statementsFor the year ended 31 August 20101.00 Corporate history of the reporting entity1.01 Legal statusNavana Real Estate Ltd (the Company) was incorporated in 1996 as a private companyunder the Companies Act 1994.The registered office of the company is located at 125/A, Motijheel Commercial Area,Dhaka 1000, Bangladesh.1.02 Principal activitiesThe main objectives of the Company are to carry out the business of real estate byerecting building and structure and selling and hand over of the erected building andstructure, maintenance as post sales services and contract signing thereof and thecompany is also engaged in purchasing land and developing the same for urban housingand selling to the different income group and carry out other related business asmanagement of the company deemed think appropriate and proper.2.00 Significant accounting policies and basis of preparation of the financialstatements2.01 Corporate financial statements and reportingThis comprises Statement of financial position, statement of comprehensive income,statement of changes in equity, statement of cash flows, notes and explanatorymaterials covering accounting policies.This is prepared under the historical cost convention and in accordance with therequirements of the Companies Act, 1994, the Securities and Exchanges Rules 1987and other applicable laws, rules & regulations and the International AccountingStandards (IAS) and International Financial Reporting Standards (IFRS) adopted by theInstitute of Chartered Accountants of Bangladesh (ICAB) as well as those standards,disclosures recommended by IASs and as applicable to this Company.The Board of Directors is responsible for preparing and presenting the financialstatements including adequate disclosures, who approved and authorized for issue ofthis financial statements.The preparation of the financial statements in conformity with the BangladeshAccounting Standards (BASs) requires Board of Directors to make estimates andassumptions that affect the reported amounts of revenues and expenses, assets andliabilities at the date of the reporting period. Due to the inherent uncertainty involved inmaking estimates, actual result reported could differ from those estimates.2.02 Principal accounting policiesThe specific accounting policies selected and applied by the company’s directors forsignificant transactions and events that have material effect within the framework ofBAS-1 “Presentation of Financial Statements”, in preparation and presentation offinancial statements have been consistently applied throughout the year and were alsoconsistent with those used in earlier years.For a proper understanding of the financial statements, these accounting policies areset out below in one place as prescribed by the BAS-1 “Presentation of FinancialStatements”. The recommendations of BAS-1 relating the format of financial statementswere also taken into full consideration for fair presentation.Page- 32

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited2.03 Fundamental accounting concepts/assumptionThe financial statements have been prepared based on going concern, consistencyconcept, accrual concept and such other convention as required by BAS-1 for fairpresentation of financial statements.2.04 Going concernThe company has adequate resources to continue in operation for the foreseeablefuture. For this reasons the directors continue to adopt going concern basis in preparingthe accounts. The current credit facilities and resources of the company providessufficient fund to meet the present requirements of its existing business.2.05 Corporate accounting standards practicedThe following BAS is applicable to the financial statements for the year under review:BAS 1BAS 2BAS 7BAS 8BAS 10BAS 11BAS 12BAS 16BAS 17BAS 18BAS 19BAS 23BAS 24BAS 33BAS 34BAS 36BAS 37BAS 38BAS 402.06 Regulatory and legal compliancePresentation of financial statementsInventoriesCash flow statementAccounting policies, changes in accounting estimates and errorsEvents after the reporting periodConstruction contractsIncome taxesProperties, plant and equipmentLeasesRevenueEmployee benefitsBorrowing costsRelated party disclosuresEarnings per shareInterim financial reportingImpairment of assetsProvisions, contingent liabilities and contingent assetsIntangible assetsInvestment propertyThe company complied with requirement of the following regulatory and legalauthorities:a) The Companies Act, 1994;b) The Securities and Exchange Rules, 1987;c) The Securities and Exchange Ordinance, 1969;d) The Securities and Exchange Commission Act, 1993e) The Securities and Exchange (Public Issues) Rules, 2006;f) The Income Tax Ordinance, 1984;g) The Value Added Tax Act, 1991;2.07 Reporting periodThe period of the financial statements covers from 1 st September to 31 st Augustconsistently.2.08 Functional and presentational (reporting) currencyThe financial statements are prepared and presented in Bangladesh Currency (Taka),which is the company's' functional currency.2.09 Recognition of property, plant & equipmentThese are capitalized at cost of acquisition and subsequently stated at cost lessaccumulated depreciation. The cost of acquisition comprises of purchase price, includingimport duties and non-refundable taxes and any directly attributable cost of bringingPage- 33

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedthe assets to its working condition for its intended use. Expenditure incurred after theassets have been put into operation, such as repairs and maintenance is normallycharged off as revenue expenditure in the period in which it is incurred. In situationwhere it can be clearly demonstrated that the expenditure has resulted in an increase inthe future economic benefit expected to be obtained from the use of the fixed assets,the expenditure is capitalized as an additional cost of the assets.There is no intangible asset and the fixed assets do not include any assets held underlease.On retirement or otherwise disposal of fixed assets, the cost and accumulateddepreciation are eliminated and any gain or loss on such disposal is reflected in theincome statement which is determined with reference to the net book value of assetsand the net sales proceeds.2.10 Depreciation of property, plant & equipmentNo depreciation has been charged on the office space considering value appreciationtaken place in every year.Depreciation on all other fixed assets is computed using the reducing balance methodso as to write off the assets over their expected useful life.Full year’s depreciation has been charged on additions irrespective of the date when therelated assets are put into use and no depreciation is charged on retirement,irrespective of date of retirement.After considering the useful life of assets as per BAS-16, the annual depreciation rateshave been applied as under which is considered reasonable by the management.2.11 Investment propertyInvestment property, which is property held to earn rentals and/or for capitalappreciation (including property under construction for such purposes), is measuredinitially at its cost, including transaction costs. Subsequent to initial recognition,investment property is measured at fair value. Gains and losses arising from changes inthe fair value of investment property are included in profit or loss in the period in whichthey arise.2.12 InventoriesInventories represents stock of land, construction materials and construction work inprogress in the ordinary course of business within the company’s normal operatingcycles.a) Stock of land has been valued at cost. Cost includes the purchase consideration,government duties related to purchase, land filling, wages and other directexpenses related to development;b) Stocks of construction materials and construction works in progress have beenvalued at cost.2.13 Impairment of assetsAn asset is impaired if its recoverable amount is below the value currently shown on thestatement of financial position. Recoverable amount is taken as the higher of:a) fair value less cost to sell (net selling price), andb) value in useAt each statement of financial position, the company reviews all assets to look for anyindication that an asset may be impaired as per BAS 36. Based on such reviewmanagement considers that no indication of impairment for any assets existed on thestatement of financial position date.2.14 ProvisionsIn accordance with the guidelines as prescribed by BAS-37: Provisions, contingentliabilities and contingent assets, provisions are recognized in the following situations:Page- 34

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited2.15 Taxationa) when the company has an obligation (legal or constructive) as a result of pastevents;b) when it is probable that an outflow of resources embodying economic benefitswill be required to settle the obligation; andc) reliable estimates can be made of the amount of the obligation.a) Current taxThe company is to pay income tax @ Taka 250/- per square meter for apartments soldin the financial year 2009-2010 and @ Tk. 2,000/- per square meter in case of buildingor apartments situated at Gulshan Model Town, Banani, Baridhara, Defense OfficersHousing Society (DOHS), Dhanmondi R/A, Lalmatia Housing Society, Uttara ModelTown, Bashundhara Residential Area, Dhaka Cantonment Area, Motijheel C/A, DilkushaC/A, Karwan Bazar C/A of Dhaka and Khulsi R/A, Panchlaish R/A and Agrabad ofChittagong and in other than areas mentioned above @ Tk. 800/- per square meter forapartments sold in the financial year 2010-2011 at the time of registration as full andfinal settlement of company’s tax liability.The company is to pay income tax @ 1% on deed value U/S 53H of the Income TaxOrdinance 1984, in case of land in pursuance of Finance Act 2010.b) Deferred taxDeferred tax is recognized on difference between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax base used in thecomputation of taxable profit, and are accounted for using balance sheet liabilitymethod. Deferred tax liabilities are generally recognized for all taxable temporarydifferences and deferred tax assets are recognized to the extent that it is probable thatthe profits will be available against which deductible temporary difference, unused taxloses or unused tax credits can be utilized. Such assets and liabilities are not recognizedif the temporary difference arises from goodwill or from the initial recognition (otherthan in a business combination) of other assets and liabilities in a transaction thataffects neither the taxable profit nor accounting profit. Considering the practicesgenerally followed in Bangladesh the Company have been reserved deferred tax assetsor deferred tax liabilities in accordance with BAS 12 “Income Tax”.2.16 Borrowing costsIn compliance with the requirements of BAS 23 “Borrowing Costs” borrowing costsdirectly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for theirintended use or sale, are added to the cost of those assets, until such time as theassets are substantially ready for their intended use or sale.Borrowing costs are recognized as expenses in the period in which they incurred andcapitalized the same that incurred before commencement of commercial operation.2.17 Revenue recognitionIn compliance with the requirements of BAS 18 “Revenue”, revenue is recognized to theextent that it is probable that the economic benefits will flow to the entity and therevenue can be reliably measured. Revenue is measured at the fair value of theconsideration received of receivable excluding VAT, discounts, commission, rebates andother sales taxes where applicable.Company traditionally makes allotment the plots of land and apartments ahead ofcommencement of land reclamations & development and construction of apartments.Company also receives money against such allotments on installments basis duringspan of two to six years. The amount is booked under advance against sales at the timeof receipt and treaded as sale only when the allotted plots of land are registered andhanded over. In case of apartments, revenue is recognised by applying the percentagePage- 35

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limitedof completion method in the manner explained in Bangladesh Accounting Standard 11“Construction Contracts”.2.18 Employees benefita) Provident fund schemeThe company operates a Contributory Provident Fund Scheme for its permanentemployees (who are interested to contribute to the Scheme). The company’scontribution to the fund is charged off as revenue expenditure during the year to whichthe contribution relates. The fund is operated by a Board of Trustees. All confirmedemployees of the company are contributing 10% of their basic salary or Tk. 2,500/-whichever is lower as subscription to the fund. The company contributes equal amountof the employees’ contribution. Interest earned from the investment is credited to themembers account on yearly basis.b) Gratuity schemeCompany provides unfunded gratuity benefit scheme. The company has been so longproviding @ one month’s basic pay. The company provide gratuity in actuarial basis asper BAS 19. The accumulated amount provided so far is equal to the amount which isrequired to pay off the gratuity of all the employees were they leave the company as ondate of statement of financial position.2.19 Cash and cash equivalentsCash in hand and cash at banks have been considered as cash and cash equivalents forthe preparation of these financial statements, which were held and available for use bycompany without any restriction and there was insignificant risk of changes in value ofthe same.2.20 Statement of cash flowsStatement of cash flows is prepared principally in accordance with BAS-7 “Cash FlowStatement” and the cash flows from the operating activities have been presented underdirect method.2.21 Earnings per shareThe company calculates earnings per share (EPS) in accordance with BAS 33. Basicearnings per share have been calculated taking a capital base of 3,00,000 OrdinaryShares of Tk. 1000/- each as issued up to August 31, 2010 which is shown in the faceof the statement of comprehensive income.2.22 Events after the reporting periodIn compliance with the requirements of BAS 10: Events after the reporting period, postbalance sheet events that provide additional information about the company's positionat the balance sheet date are reflected in the financial statements and events after thebalance sheet date that are not adjusting events are disclosed in the notes whenmaterial.2.23 Segmental reportingNo segmental reporting is applicable for the company as required by BFRS 14: SegmentReporting as the company operates in a single industry segment and within a singlegeographical segment.2.24 Financial assets & liabilitiesFinancial assets and liabilities are recognized on the statement of financial position datewhen the entity has become a party to a contractual provision of the instruments.a) ReceivablesPage- 36

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedAccount receivables are stated at their real value and consider good. No provision hasbeen made for doubtful debts and no amount was written off as bad.b) PayableLiabilities are recorded at the amount payable for settlement in respect of goods andservices received by the company.2.25 Related party disclosureAs per BAS 24 parties are considered to be related if one the parties have the ability tocontrol the other party or exercise significant influence over the other party in makingfinancial and operating decisions.2.26 BorrowingsInterest bearing bank loans and overdrafts are recorded at the proceeds received net ofdirect issue costs. Financial charges are accounted for on an accrual basis.2.27 Foreign currency translationTransactions in foreign currencies are translated into Bangladesh taka at the rate ofexchange ruling on date of transaction. Monetary assets and liabilities expressed inforeign currencies are translated into Bangladesh taka at the rate of exchange rulingthe statement of financial position date. Gain or losses resulting from foreign currencytransactions are taken to the statement of comprehensive income complying with BSA21.2.28 Generala) Figures shown in the accounts have been rounded off to the nearest taka.b) Comparative figures and account titles in the financial statements have been rearranged/re-classifiedwhere necessary, to conform to changes in presentation inthe current year.c) Figures in brackets indicated deductions.Page- 37

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited5.02 Construction materials stockBricks & Brick Chips 256,754 23,487,645Cement 488,763 45,986,743Electrical Materials 1,960,054 43,298,576M S Rod 10,643,217 124,870,951Sand 37,651 7,865,773Sanitary & Plumbing Materials 3,011,125 12,398,745Stone & Stone Chips 1,111,342 12,398,211Tiles, Marbles & Granite Materials 3,266,114 35,436,781Other Material 1,004,432 31,274,195Store in Transit 19,735,760 54,614,89241,515,211 391,632,5126.00 Construction works in progress 3,166,160,453 2,067,986,7877.00 Deferred revenuesOpening balance 255,455,671Addition during the year 1,029,894,0431,285,349,714Recognized as revenue during the year 281,327,246-Closing balance 1,004,022,468 255,455,671Deferred revenues stand for the amount duefrom the customers against calculation ofrevenue based on percentage of workcompletion in the manner explained inBangladesh Accounting Standard 11“Construction Contracts”8.00 Advances, deposits & prepaymentsAdvance against office rent 14,251,600 3,770,905Advance against software purchase 2,700,000 2,100,000Advance against construction materialspurchase61,635,598 265,128,005Advance against expenses 9,732,866 7,414,394Advance against advertisement4,517,063-Advance against salary 601,798 342,312Advance to consultant 13,337,540 8,632,431Advance to security service provider -566,231Advance to others 3,000,000 41,373,372Total advances 109,776,465 329,327,650Security deposit609,068-Prepayments for upcoming projects 1,799,306,594 1,026,607,8171,909,692,127 1,355,935,466Page- 39

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited9.00 Cash & bank balances(a) Cash in hand 703,168 3,566,203(b) Cash at bank 96,132,828 39,028,248A B Bank Ltd. 48,520,960 15,654,379City Bank Ltd. 2,138,359-Dhaka Bank Ltd. 6,278,856 1,807,232Dutch Bangla Bank Ltd.EXIM Bank Ltd.--2,0002,534,970ICB Islamic Bank Ltd. 4,712-Mercantile Bank Ltd. 17,884,423 5,099,487Mutual Trust Bank Ltd. 56,976 56,976National Bank Ltd. 2,663,130 7,285,881NCC Bank Ltd. 560,488 562,729One Bank Ltd. 8,873,850-Pubali Bank Ltd. 1,414,379 348,329Shahjalal Islami Bank Ltd. 96,387 112,400Southeast Bank Ltd. 10,000-Standard Bank Ltd. 3,935,973 31,333Standard Chartered Bank 2,389,423 5,336,707United Commercial Bank Ltd. 2,419 13,045Al-Arafah Islami Bank Ltd. 2,448 34,923Bank Alfalah Ltd. 66,812 173IFIC Bank Ltd. 763,514 94,743Social Islami Bank Ltd. 469,720 52,94196,835,996 42,594,451Page- 40

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited31/8/10 31/8/0910.00 Share capitalAuthorized capital:(1,000,000 Ordinary Shares @ Tk.1000 each) 1,000,000,000 100,000,000Issued, Subscribed and Paid-up Capital:(300,000 Ordinary Shares @ Tk.1000 each) 300,000,000 51,000,000Numberof Share CapitalShare CapitalSharesQuantity BD Taka BD TakaBalance at beginning of year 51,000 51,000,000 1,000,000Issue of ordinary shares for cash 49,000 49,000,000 50,000,000Issue of bonus shares 200,000 200,000,000 -Balance at end of year 300,000 300,000,000 51,000,000Share capital: Cash consideration 100,000,000 51,000,000Share capital: Bonus issues 200,000,000 -300,000,000 51,000,000Shareholding position of the company:Mr. Shafiul Islam 119,800 119,800,000 40,600,000Mrs. Khaleda Islam 13,800 13,800,000 2,600,000Mr. Saiful Islam 13,800 13,800,000 2,600,000Mr. Sajedul Islam 13,800 13,800,000 2,600,000Ms. Farhana Islam 13,800 13,800,000 2,600,000Mr. Md. Aminul Hoque 15,000 15,000,000 -Aftab Automobiles Ltd. 60,000 60,000,000 -Laguna Autos Ltd. 25,000 25,000,000 -Biponon Ltd. 25,000 25,000,000 -300,000 300,000,000 51,000,00011.00 Retained earningsBalance at beginning of year 408,218,519 33,001,501Prior years' adjustment - 228,443,433Restated opening balance 408,218,519 261,444,934Revaluation surplus of investment properties 383,608,500Net profit for the year 290,097,916 146,773,586Payment of dividends:Cash dividend - -Bonus dividend (200,000,000) -Balance at end of year 881,924,935 408,218,519Page- 41

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited12.00 Long-term borrowingsAB Bank Ltd. - 103,067,434City Bank Ltd 65,912,923 -Delta Brac Housing Ltd. 11,034,428 38,823,395Dhaka Bank Ltd. 38,000,000 -Pubali Bank Ltd. 2,919,258 56,183,534Southeast Bank Ltd. 140,720,039 151,338,640United Commercial Bank Ltd. 109,257,476 118,911,511Total 367,844,124 468,324,514Current maturity 115,018,179 130,692,535482,862,303 599,017,04913.00 Lease financeDhaka Bank Ltd. 9,520,650 13,469,719Dutch Bangla Bank Ltd. - 1,604,565EXIM Bank Ltd. 72,856,675 7,372,451Standard Bank Ltd. 7,336,090 -Total 89,713,415 22,446,735Current maturity 25,684,602 13,646,365115,398,017 36,093,10014.00 Short-term loanAl-Arafah Islami Bank Ltd. 53,807,500 68,780,277Bank Alfalah Ltd. 49,600,000 57,379,331Bank Asia Ltd. 215,000,000 -EXIM Bank Ltd. 71,971,667 168,521,583IFIC Bank Ltd. 140,626,648 153,791,532NCC Bank Ltd. 154,490,723 182,798,021National Bank Ltd. 77,439,941 88,034,040One Bank Ltd. 150,000,000 17,887,113Pubali Bank Ltd. 133,827,899 -Social Islami Bank Ltd. 100,610,216 94,566,051Southeast Bank Ltd. 20,000,000 20,705,120Standard Bank Ltd. 175,202,524 -1,342,577,118 852,463,06815.00 Advance against salesAgainst apartments projects & land projects 4,562,053,957 2,617,195,162Against registration 4,123,768 2,376,841Against utility 1,276,865 654,367Against apartments owners association 760,000 549,8764,568,214,590 2,620,776,246Page- 42

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited16.00 Accounts payableLiability for goods purchased 231,200,228 40,531,304Payable to construction labors 58,030,121 27,287,433289,230,349 67,818,73717.00 Accrued expenses and other payablesLand owner signing money 62,928,361 56,882,057Salary expense payable 17,118,231 9,492,652Audit fee payable 100,000 30,000Contributory provident fund 316,904 295,268Liability against salary income tax 298,042 208,629Liability for security services 199,785 -Provision for gratuity 12,659,146 11,218,628Provision for bank interest 25,583,669 -Provision for tax 106,790,143 12,528,349225,994,281 90,655,584Page- 43

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management LimitedYear ended Year ended31/8/10 31/8/09BD TakaBD Taka18.00 RevenuesApartment projects: 2,821,617,292 1,651,866,356(Against 17 completed projects & 67 ongoingprojectscalculated based percentage of completion asper BAS 11)Land projects: 22,195,000 20,938,488(Against 33 nos. plot in 3 land projects)2,843,812,292 1,672,804,84419.00 Cost of revenuesApartment projects 2,109,793,746 1,231,731,129Land projects 13,935,299 15,335,7802,123,729,045 1,247,066,90920.00 Other gainsCapital gain - 4,720,502Rental income 580,104 580,104Dividend income - 10580,104 5,300,616Page- 44

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited21.00 Administration expensesSalary & Allowances 73,733,123 56,241,054Festival bonus 5,314,974 3,534,302Gratuity 1,440,517 1,292,245Over time 1,065,832 877,982Contributory provident fund 650,345 622,667Office decoration 1,023,432 734,096House rent 7,917,750 5,941,788Traveling expenses 666,721 567,654Conveyance 543,276 452,682Entertainment 553,214 376,161Plantation 332,134 326,339Paper & Periodicals 537,032 445,609Printing 162,355 45,231Stationery 946,846 911,663Books 145,823 83,550Forms & Fees 245,000 218,000Postage 386,245 356,401Phone 432,341 350,980FAX 111,204 187,500Mobile phone 657,643 753,620Water bill 673,263 513,500Utilities bill 973,223 865,024Mineral water bill 450,128 320,369Legal fee 30,000 25,324Audit fee 100,000 50,000Bank Charges & Commission 475,300 430,520Medical expenses 1,165,471 952,316Office expenses 365,981 155,068Welfare expenses 1,187,942 876,325Liveries & Uniform 982,276 812,302Survey expenses 411,765 320,356Donation, subscription & gift 386,654 332,362Mobilization expenses 354,642 156,321Fuel, oils & lubricants 452,467 326,325Sundry expenses 1,210,250 936,841Office maintenance 983,372 732,125Stamp (Judicial/Non-judicial) 376,865 325,140Director remuneration 1,776,000 400,000Publication expense 1,028,790 870,321Sales promotion expenses 650,032 452,189Business development expense 1,000,436 800,320Preliminary expenses written off - 112,314Deferred expenses written off - 8,997,763Depreciation 8,895,403 8,147,219120,796,067 102,229,868Page- 45

Issuer: Navana Real Estate LimitedIssue Manager: ICB Capital Management Limited22.00 Finance costsInterest on long-term borrowings 81,374,765 87,672,576Interest on lease finance obligationsInterest on short-term loan7,067,425110,023,2532,301,38975,639,730198,465,443 165,613,69523.00 Income tax expenseTax paid under section 53FF of ITO '84 4,291,832Tax pad under section 53H of ITO '84 221,950Tax provision under section 53FF of ITO'84 106,572,604Tax provision for rental income 217,539Tax deducted at source from dividend-3,665,702227,35012,310,810217,5392111,303,925 16,421,40324.00 Earnings per shareProfit attributable to ordinary shareholdersNumber of ordinary shares used to compute EPS290,097,916300,000146,773,585300,000Basic earnings per share966.99 489.25*EPS for 2009 has been restated.25.00 Related party disclosuresDuring the year, the company carried out a number of transactions with relatedparties in the normal course of business. The names of related parties, nature oftransactions and total transaction value have been set out in accordance with theprovision.Name of relatedpartyNavana ElectronicsLtd.Nature of Transaction Outstanding value:31/8/10Relationship transactions value Receivable/(payable)SisterconcernBuy ofproducts 37,370,060(28,782,060)Navana BuildingProducts LtdSisterconcernBuy ofproducts112,878,715 (31,516,615)Page- 46