nor

\ational Credit
NBFI
i\,I I DAS FIN,,TNC-INC LIM ITED
Mings are based on Audited Financial Statement up ENrnY I{artNG -2017
to Decernber 31, 2016 along with the othet reletant
Qottiutive as well as Qltolirative information up to Date ofRating Declaration Long Term Short Term
de Me of Rating Declaration 02.11.2017 A- (Singte A Minus) i
sT- 3
- Ortlr"k
Fotlowed Financial Institutions Rating Mefiodologt
tbt*, & NBFI) of NCR published in ant *ebsite- The ratings are valid Jbr one yeat fiom the date ofdeclatration.

Y&c: wvu.ncthdcom R{Trrc R-rllor.rLs

The above ratrngsof MIDAS Financing Limited have been assigned with due consideration of its comfy
fundamentals liki consistent financial performance, sound liqutdity position backed by adequate financial
flexibility, relatively low cost of fund and good corporate structure having renowned board members and
management team with affluent experience. NCR considers established policies and guidelines for risk
manalement, internal control system, credit approval process and conformance of regulatory requirements as a
positiie rating stimulus. The concern's Capital Adequacy Ratio (CAR) remained comfortable at 19.34o/o, followed
has maintained a
ty maintainirig a bulky amount ofcapital iurplus in the reporting year. ln addition, the company
o/n & Tier II ratlo at
si.ong p.oui.iin lor potential impaired lending. Further, MFL reported Tier I ratio at 19 !:%
0.91%-besides uppr.iiubl" surplus in CRR and SLR which reflect potential strength in MFL's funding &
liquidity
profile.

The above fundamentals are, however, constmined to some extent by concentration of NPL in last category
(62.570/o ofNpL stood bad & loss). The ratings are further hindered by negative net liquldity gap in the short run
and decreasing trend in NIM in recent years. The ratings also take into consideration low
interest rate in the
concem market and economic expansionary policies taken by the govemment'

The stable outlook reflects MFL's unwavering performance on its fundamentals and as such NCR expects that
F \\\(t{LDATA MFL will be able to maintain its good fundamentals on an ongoing basis in the future.
.. - \1il1ions)
Particu la rs 2016 (July 01 AssEssltE)-T
FY 2015-16
to Dec 3I)
r The shareholder's equity of the company stood at TK 1,021.69 million as on June 30, 2016 against TK
r-:l .{ssets 10,555.31 9,463.72
g57.26 million in June 30,2015 whereas the equity was reported to TK 1,136.41 million as on December 31,

]:.:Jt,'-tl:ii 6,r6s 08 s,eo, 63 2016 for six (06) months. The Risk Weighted Asset (RWA) of MIDAS Financing Limited increased and stood
to TK 5,901.63 mililon in FY 2015- 16 against TK 4,857.90 million in FY 2014- l5 whereas the Risk
Weighted
i=
---;red Caoital
sr seo Asset (RWA) is recorded TK 6,165.08 ,nillion as on December 31,2016. The company maintained total eligible
:1"*[; 616 16
capitai of lkt,Oll.ll million as on June 30, 2016 which was composed of Core Capital (Tier-I) of TK
- :: I Capital 1,136.41 1,024.69 of TK
t,OZ+.Og million and Supplementary Capital (Tier-II) of TK 53.08 million, representing a capital surplus
:: ll Capital 56.04 53 08
4g7.60 million. Finally the CAR was posted 18.26% which was composed of 17 .36V, Core Capital
(Tier-I) and
,---:r.:l Surplus 575.95 487.60 0.90% Supplementary Capital (Tier-ll).
, -:ss Frnance 8,932.79 7,884-27 r Thegrossfinances(loan,advance&lease)ofMFLincreasedtoTK7,884.27 millioninFYl0l5-l6against
" - P:rbrming 1.071.05 1,195.89 TK 5,1t3.39g million in Fy 2014- 15, registering a growth ol5l.81% and the gross finances (loan, advance &
.- \PL) teasej of MFL was recorded TK 8,932.79 million as on December 31,2016. The Non-Performing Loan
(NPL)
:-:i:5ron Required 462.67 567.70 increased and was recorded TK 1,195.89 million in FY 2015- 16 against TK 1,128.63 million in FY 2014-
15,
.;- -.'t \PL registering a growth of 5.96Y, and the Non-Performing Loan (NPL) was recorded TK 1,072.05 million as on
. - r ir\rn Maintarned nJcemUei: t ]ZOl 6. The impaired lending to gross finance increased to 15.17Y, tn FY 20 5- 16 from 21.73ok rn
.:: ::t \PL 462.67 567,0 1

FY 2014- ls.
":: L:rerest Based 143.51 214.g4 . MFL has maintained the full required provision of TK 462.67 million in 2016 (from July 01, 2015 to
December 31,2016), TK 567.70 miltion in FY 2015- 16 and TK 641.66 million in FY 2014- 15. The NPL
. :::, \et Revenue 225.06 271 -65 coverage decreased to 47.47ok in FY 2015- 16 from 56.85% in FY 2014- l5 and the NPL coverage
was
recorded 43.16% as on December 31,2016.
--i-R \laintained 139.57 103.98 . Interest based income which increased to TK 757.19 million in FY 2015- 16 from TK 593.96 million in FY
:-R \laintained 624.46 509.98
2014- I 5 registering a growth of 27 .18oh and rhe interest based income was recorded TK 502.I 5 mtllion as on
-- {R oo) 19.34 18.26
December 31, 2016. ROE and ROA improved to 17.79o/oand2JOoh respectively in FY 2015-
16 from7.59Yo
f,iL Gross Advances 12.00 15.17 and 1.00% respectively in FY 2014- 15.
r NetlnterestMargin(NIM)decreasedto 3.04o/oinFY20l5- 16from4.85o/oinFY2014- 15. Theassetyield
:. l,.rr 10.34 17.79
also decreased to 8.60% in FY 201 5- 16 kom 16.120/o in FY 2014- l5 resulting the interest spreads to
increase
i -r\ roo) 1.12 2.10 to-0.750 inFy2015-16from4.42"/oinFY2014-15andtheinterestspreadswasfoundpositiveandrecorded
\ \1 iro) 1.58 3.04 0.03% as on December 3l,2016. However, the cost of lund deteriorated to 9.35Yo in FY 20 I 5- 16 from
20.559'o
(%)
:...et Yreld 4.70 8.60 in FY 201 4- 1 5 and the cost of fund was recorded 4.670/o as on December 31, 201 6.
(%)
--.'s: oiFund 4.67 9.3s . The company maintained Cash Reserve Requirement (CRR) of TK 129.43 million against the required
S::ead (70) 0.03 -0.7 5 reserve (2.5% oiterm deposity of TK 139.57 million having a surplus of TK 10.14 million as on December
3l'
(502
140.89 2016. The company maintained Statutory Liquidity Reserve (SLR) of TK 275.96 against required resewe
of total liabilitiis) of fX OZ+.+O million havrng a surplus of TK 348.50 mrllion as on December 31, 2016.

\\ \i \ \1S: PR(}Fn,t:
! MIDAS Financing Limited (hereinafter called as 'MFL' or 'The Company') is operatrng as a Non-Bank
\ .;i()ti \lllR\ Financial Institution under the Financial Institution Acts, 1993 to provide integrated financial solutions.
MFL,
'' ' ,--:- l ::,l i^-li
having license from Bangladesh Bank on October ll, 1999 and incorporated as a Public Limited
Company
- ./ r.ri,Li if{11 from
under"the Companies Aat, 1994 on May 16, 1995. The company commenced commercial operation
January 01, uotjo. rrre company issued public oflbrings in August 12,2002 by enfistrng
with Dhaka Stock
\r lrt L \l{ll\l0Ol} Exchange on October 26, 20b2. iater on iuly 27 ,2004 the company enlisted wlth Chittagong
Stock Exchange'
' '. :-r- l:i) l atr-s tr,tEL relisterea as a Merchant Bank in January 22, 2017 with the Securities and Exchange
commtssion
, :i;bo;otr':
ANL{ FR
is not
\cR has used due care in prepaiation ofthis document. our information has been obtained from sources we consider to be reliable but its aceuracy or completeness
g.:aranteed. NCR shail or"* no liability whatsoever to any loss or damage caused by or
resulting from any error in such information. None of the information in this
person without NCR's written
j,xument may be copied or otherwlse reproduced, stored or disseminated i-n whole or in part in anylom or by any means whatsoever Lry any
.::t: OLir iepor:s a:id ratings constituie opinions. t'tot recommenda.tiotrs to buy or to se11

Tel: +88-02-47120156-8 website: www.ncrbd.com

l
 nr
|-
NBFI

; E P O RT National Credit Ratings Limited

1.0 TLATINGS ENrrrY RA.TING - 2017

.ii.':,:gs are based on Audited
.': ::,:ritl Statenent up to December Date of Rating Declaration Long Term Short Term
: - :!)16 along u:ith the other
:.:.u:t QLtantitative as well as
02.11.2017 A- (Single A Minus) ST- 3
ii:,-;litati.ve information up to ile
): : : oi' Roting Dec laration.
Outlook Stable
l: .io t ed Financial
Institutiorls
.':::,:g .\fethodolog,t (Bank & NBFI) The rotitlgs orc wlitl1i,r one l,enir .frou the tlate oJ deckrrution.
' ' r .l puoltslted in our tcbsite.

Ll e b s ite : www. ncrbd.com

2.0 PRoFILE 2.1 MIDAS Financing Limited (hereinafter called as 'MFL' or 'The Company') is
. financial
provides extensive operating as a Non-Bank Financial Institution under the Financial Institution Acts, 1993 to
Non-Bank
solutions as a provide integrated financial solutions. MFL, having license from Bangladesh Bank on
FinancialInstitution October 11, 1999 and incorporated as a Public Limited Company under the Companies
. Operateswith5branches, 1 Act, 1994 on May 16, 1995. The company commenced commercial operation from
booth office and l0 SME January 01, 2000. The company issued public offerings in August 12,2002 by enlisting
branches with Dhaka Stock Exchange on October 26, 2002. Later on J:uly 27,2004 the company
. Enlisted with Dhaka Stock enlisted with Chittagong Stock Exchange. MFL registered as a Merchant Bank in January
Exchange and Chittagong Stock 22,2011 with the Securities and Exchange Commission.
Exchange
. HasaMerchantBankingUnit 2.2 The Registered office is located at MIDAS Center (10th & il'h floor), House# 05,
Road# 16 (new) 27 (old), Dhanmondi, Dhaka-1209. The head office and the share
depafiment is situated at its own premises located Dhanmondi. The Head Office maintains
and monitors the accounts of all branches. The details of all the branches are provided
below:

SI. Branch Location

floor)' House# 05' Road# r 6 orcw) 27 (old)'
I . Hcad officc H3,-It":.'l!:l :ii"l i,J "n
SV Touer I l.t lloorr. nl. Zirkrr Ho..ain R,,rr1. f Jst \a5irabad. Kl)Jl\hi
2. (.lrirrrgon3 u*n.f, L] )r.ii
hrttrlU('ng.
Ccnte r 1 ird Floor). Borogola, Bogra Rarrgpur Road, Bogra Sadar,
3. Bogra Brancl.r offi..
in,ilsl,opping
-1. \rr.rarrgrnj Branch Olllcc Sl a . g.g nn".l rlrtLl Floort. I \o. Rajlcdlc. \Jrir\Jneani.
5. Khulna Branch Officc Fatcma Torvcr (2ncl Floor). 2-A. KDA Avcnuc. Khulna.
t, l-crri Booth Olllec Hl/i L.rrrl Tuscr r ird Floori. nln. Tnrilk Rnatl. t ,rrttilla Brrs St:nd. Fcni.
7. Comilla SME Branch Salam Buildcrs Mausiorr (2nd Floor). N'logo)tu)i. Courilla.
8. Sitaklnda SME Branch Nibir Bipani Bittin (l s1 Floor), Shitakunda. Chittagong.
9. Gazipur SN{E Branch K.S Torvcr (2r'rd Floor). Chandana Cirourastira. Gazipur.
10. Islarnpur SME Branch Nurul Haque To*cr (lnd Floor). 2l Patoam)-v Road. Dhaka-1 100.
No (Ncu -780) Haji Mohsin Road' Natun Bazar'
I L Chandpur St\{E Branclr
"-" !.Plli-^.i Hl]': i]:::i-.:5
t ltardp.rrSrd"r.t ltrrtdlrrrr 1,i00
l). Brahrrarrbarn Sl\4E BrJrrclr lc{ t oLtrr Ro.rt1..:rJ Fi,'u1. g.,,,l. Potti. Brrrltrttanharir.
l i. Hathajari SME Branch S.A Shopping f ompicr (Znd Floor). Ilathajari. Chittagong.
Housc #0l Kodomtori Gor Chottor'
r4. Kcraniganj SME Brancrr
bil,:l';l:::'rrl'i:x[[il:"Jiii] iloor),
15. Nur.irrydi S\lF Rrrrrch BJnkprtti. \ledlrabdi U-rr. tr,t.,,lt \ar:irrgdi
"ba;.
I 6. Jcssore SN{E Branch Sardar Plazza ( I st Floor). I 35-M.K Road. Jcssorc.

MIDAS Page I of 15

ew
FINANCING LIMITED
NO\T,MBER 2017 www.ncrbd.com
I
I ncr
REPORT National Credit Ratings Limited
I{BFI

2.3 MFL, a non-bank financial institution, engaged in providing a broad range of

financial services ranging from inveshnent activities for capital machinery, equipment
and
vehicle for industrial and commercial purpose, financing activities for household durables
for individual customers, temporary financing and term deposit services. The company
also provides Merchant Banking services through the Merchant Bank Unit. The
of
details
the product lines are given below:

Loan/ Product Service Deposir/Liabitiries **'T;l,H[*r* *

Corporate Investment product
Management Services

. Project Financc
r Term Dcposit
AppraisaJ Schemcs
r Lcase Finance
. Project Loan
r Double Money
. Tcnr, Loan (SME) . Comrnon Eqr.rity Dcposit Schemcs o Loan Against Licn
Syndication of
InvcstmcnN Securities (LLS)
r Term Loan (MIDi)
Working Capital r Tnplc Moncy
' . Prcfcned Equity Dcposit Schones . Ponfolio
e Housing Loans Arangcrnent
Invcstmcnts Managerncnt
o Syndication Agencv r Monthly.,lQuarterly
. Auto Loans o Bonds Intcrest Schemcs . Guarantcc Scn.ices
services
r Consumcr Credit o Monthly Dcposit
r Refinancing
arTangcments Schcmcs (DPS)

2.4 The BoD in the 277h Board Meeting dated May 07,2017 recommended no dividend
which was entitled to the shareholders as on May 29, 2017 (Record Date) and was
declared in the 21't Annual General Meeting held on June 20, 2017. The shares
of MFL
are listed with both the bourses of the country and are being traded in the ,,2,,
category.
Total shares outstanding of MFL are 120,268,676 andmarket capitalizationof MFL
is TK
4,690.478 million. The basic EpS from July 01, 2016to December 31,2016was
TK 0.93
and the market price per share as'on 29.12.2016 was TK 2g.00. The closing price per
share as on 22.10.2017 was TK 39.00. The closing share price of MFL for the
last one
year is depicted in the following chart, and according to the chart, the closing
share price
of MFL showed an increasing trend since first of November,2016 and has been declining
since mid of April, 2017. However, the share price again gained momentum
durin!
September,20l7.

MIDAS FINANCING LIMITED

P"g. , 1-5
NO\TMBER 2017 "f
wrvw.ncrbd.com
 I
NBFI

I ncrR E P O RT
National Credit Ratings Limited
Closing Price GraPh of MIDAStr'IN

l 25i
I

I
I

li 'l
2oi

15i -
-- -Aprt7 t7 lutT JdU Aug17 sEpu os17

I Nor 16 Ds 16 .Iu l7 i,{"rl? NI*

I 2.5MFLisamemberofBangladeshLeasing&FinanceCompaniesAssociation
(BLFCA), Bangladesh Association of Public Listed Companies
Money Market Dealers Association (BAMDA), Dhaka
(BAPLC), Bangladesh
Stock Exchange (DSE),

I chittagong Stock Exchange (cSE), The American chamber

of commerce in Bangladesh
(AmCham),MetropolitanChamberofCommerce&lndustry(MCCI)andDhaka
Chamber of Commerce & lndustry (DCCI)'

I 3.0 OWNERSHIP 3.1 Sn.tRr ClPrtAI-:

I ! Sponsors hold 32.81% of

shares, comPanies and
institutions hold 36.44% of
3.1.1 AuTHoRIZED SHARE CAPtrlL
MIDAS Financing Limited was incotporated with an authorized
2,000.00 million having 200 million ordinary shares
of TK 10 each'
share capital of TK

t shares and 30.75% of the shares

are held by the general Public
3.1.2 IssuED, SunscnrsBn AND PAID Up Capltal:
The shareholding structure of MFL is found diversihed.
The sharehoiding mix is

t comprised of 40.25o/o Sponsors/Directors, 29 .02%

as on September 30, 2017. As on December 31,2016,
lnstitutions and 30 '73o/o General Public
the company's ordinary shares
capital of TK 1,202'681 million'

t
stood at 120.268,616 shares of TK 10 each having total
graph:
The shareholding pattemas on September 30, 2017 is presented in the adjacent

Shareholding Pattern

T il Sporrsor's Dlrrtaol!

ghrdfirdorrs

T .; G.ncrdHrbtr(

T
t 4.0
i
GownNlNcn
Experienced BoD
4.1 of 12 (trvelve) mernbers among them 03 (three) are
The Board of MFL is comprised
Shareholding Directors, 04 (four) are Nominee Directors
from the Shareholding
Company,03(three)arelndependentDirectors,0l(one)isNomineeDirectorfrom

Il MIDAS FINANCING LIMITED

NO\EMBER 2017
Page 3 of 15
www.ncrbd.com

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 NBFT

nflr
R E P O RT
National Credit Ratings Limited
Managing Director' The brief profile of
. Two committees in BoD Institutions and 01 (one) is Ex-Officio Director as
. BoD mernbers is given below:
Nine Sub-committees
Committee KeY ExPerience
sl. Name of BoD Members Designation Member
No, Member of Audit Pionecr in Woman Entrcpreneur,
Comrnittec and Directorship in Multinational
Ms. Rokia A. Rahman Chairmau Cornpanies &
Trustce Board
0l Executive
(Norninee Dircctor of MIDAS) Membcr of TIB
Committee
Mcrnber of Audit
Cornmittce and Pionecr in Micro Credit IndustrY,
Mr. Md' Ikramullah Director Chainnan of Prornittcnt busincsstnan in )easing
(Nominee Director of MIDAS) Exccutivc
Committec
MenTbcr of Audit Prominent businessrnan in FMCG
Mr. Mirza Ali Behrouze IsPahani Dircctor Committce
03
(Nominec Director of MIDAS) Prominent businessman in lcasing &
Mr. Bazlur Rahman Khan Dircctor N/A power and energY sector
04
(Nomince Dircctor of MIDAS)
Member of Prominent businessman in agro
Director Executive
Ms. Md. Shamsul Alam sector
Committec
Prominent busincsstnan in agro &
Director N/A leasing scctor
06 Mr. NId. Shahedul Alam
Dircctor N/A Ou'ner of sPinning mill
07 Mr. S.M. Azad Hossain

I Mr. Mohammad Khairul Anam

Chorvdhury
(Nominee ofLanka Bangla Finance
Director N/A
I 9 vcan exPerience
brokelgc industry
in stock

Limitcd)
Mcrnber of

I Mr. M. Hafizuddin Khan

Indepcndent
Director
g*".utiu"
Committec
- and
iiruin"un oi
Rctircd as 6'1'Controllcr and Auditor
Gcncral of Bangladcsh an{ !x
Chairman of Agrani Bank Limitcd
Audit Comnrittec
Fx- ( hainnan ol thc Board ol
I 10 Mr. Ali Imam Majumder
IndePendcnt
Director
Mcmbcrol Dircctors ol'Sonrli Bank Lirnircd
Executir e rnd Bitnan Bangladcsh Airlincs
Cottttntttec I inrited
Retired Financc SccrcrarY of the

I 11 Mr. Siddiqur Rahman ChoudhurY

Indcpendent
Dircctor
ve tnber ol
comtnittee
. Co\ L'trlncnt ol Bangladcsh' Er'
Attdtt ch.ri.nan oftltc board of dircctors ol'
Agrani Bank. Sonali Bank (uK) Ltd
and Sadharan Blma CorPoration

t IIr. Shafique- Ul- Azam

Managing
I)i rectors
NrA

and
20 Ycars banking cxPcrict'lcc

competent
of Directors (BoD) of MFL has highly experienced
I 4.2 The Board
professionals to establish and monitor intenlal
ru1es and regulations as well as to impose

goodgovemancepracticeb.vcomplying\\.iththelarvs.rulesandguidelinessetforthby
has t$o colnmittees namely' Executive
a

t the respective regulatory bodies. Tl-re Board

CommitteeandAuditCommittee.TheresponsibilityoftheAuditCommitteeisto
perfom the audit function and look after the colporate
govemance' financial

t management, risk management, alld reguiatory

4.2.I EXECUTIVE COMMITTEE (EC)

compliance'

TheECofMFLcomprisesof5(Five)members.TheECshallbeCompetenttoexrecise
T all or any of the powers, authorities & discretion
vested in or exercised by the Directors'
implement strategic business plans and
The Ec manages the business of the company,
policies approved by the BoD, identify, formulate
& prioritize strategic issues on an on-
T going basis and charlstrategic directions for Management & staff
for action' approve new

Page 4 of 15

T rllrUAS FINANq4Iq LIUMP

NOVEMBER 201?
lvrvlv.rcrbd.com

T
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II I,I
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National Credit Ratings Limited
-ilI

policies,manuais,approveallkindsofpennissibleloan,reviewquarterlyrepodon
Management'
written-off cases' report on Asset Liability
pending lega1 cases, repofi on
repofiondisbursementmadeagainstlimitsanction,creditadministrationofloanaccounts
anddebtrecoveryproceedings/loanrestucturingandexecuteaSfeementswiththird in the
parties or other tinancial instituitions
or subsidlries & associated companies
ordinarycourseofbusiness.ThecompositionoftheExecutiveCommitteeisgivenbelow:

Designation
sl. Name of Executive Committee \{emtters
No. Chairman
01 Mr. Md. lkramullah" Dircctor Mcmbcr
02 Ms. Rokia Afzal Rahman' Chairman Mcmbcr
Dircctor
03 Mr. M. Hafizuddin Khan, Indepcndent Mcmbcr
Majumdcr, Indcpcndent Dircctor
04 Mr. Ali Imam Member
05 Mr. Md, Shamsul Alam, Dircctor

4.2.2 Auorr Colvmtrrnn (AC)

TheACofMFLcomprisesof05(Five)members.TheACreviewstheappropriateness
andeffectivenessoflnterrralControl,lnternalaudit,Compliance,Relationshipwiththe
extemalauditor,ReporlingtotheBoard.TheACalsooverseesthefinancialreporling policies and
annual financial statements, accounting
process of quarterly, rrrii i"rrv and submitted
procedures, and reviews the statement
of significant related party transactions
is given below:
by the management' The composition of the Audit Committee

Name of Executive Committee Members

Designation
SI'No'
0l Mr' M Hafizuddin Khan' Indcpcndcnt Dircctor
Chairman
Mernber
t)Z *' *oO'u O"'Rahman' Chainnan Member
03 Mr' Md lkramullah' Director Indcpcndent
-"man Chmdhury'
04 X;":*:-- ::**'
Ispahani' Director
Membcr
05 io'' o"
'i"" "cl.trouzc

4.2.3 SUg CON,TN4TTTEES

othertheExecutiveCommitteeandAuditCommitteeoperatingunderthedirect
supewisionoftheBoardofDirectorsofMIDASFinancingLimited,thereareninesub
committeestolookintothedailymatters.Thecommitteesalongwiththenumberofthe
in the table below:
committees are presented
members action under the respeciive
No. of Members
Name of Sub-Committee
Sl. No. 07 mcmbcrs
01 Management Committec 04 mcmbers
02 Purchasc Committee 06 mcmbcrs
03 Intcgrirl Commince 05 tncmbcrs
04 Promotion and Selection Commrttee 05 membcrs
05 Credit Committce 06 members
06 ICT DevcloPment Committee 07 mcmbers
01 Asset Liabiiity Management Committce 05 members
08 Monitoring and Rccorcry Comtnittec 14 members
09 Proht OPtimization Forum

rnqpgSf ",ll4llc-I]!s!L!4TEP- crbd'com

NownrsEn 2017

I
-_t
 I

I ncrR E P O RT
5.0 RISKMANAGEMENT
FRAMEWORK
I Has Risk Management
Department to imPlement risk
management framework across
NBFI
National Credit Ratings Limited
framework of
5.1. The management has satisfactorily implemented the risk management
MIDAS Financing Limited. The risk parameters such as credit risk, market risk,
operational risk and the core business risk are identif,red and evaluated
while taking
decision for approval of lease finance or term finance. Various manuals
and guidelines
system. Legal and
have been developed to ensure proper credit risk management

I the company compliance department ensures that proper documentation against

Specific manuals and guidelines maintained'
each transaction is

for risk management

I 6.0 CnrorrRrsr 6.1 MFL introduced credit Risk Management Policy developed by the senior

l'
Well constituted Credit
Committee for credit
assessment
I Clearly defined delegation of
authority for credit aPProval
Follows polices and guidelines
Management (cRM)
management and subsequently approved by the Board. Credit Risk
control/ mitigation of
policy of MFL include identification, measurement, grading, and
by the Credit
risks. All Credit proposals those received from the branches are processed
to the
committee (cC). credit applications reviewed by the cC team are forwarded
credit Risk Management Depafiment (CRMD) for their assessment. The credit
subsequently approved by relevant authority as per delegation.
The maxirnum
is

delegated to the cc/EC

exposure

Lease products are set by the BoD. A11 proposals over the limits

I provided by the regulatorY bodY

are placed the Board for approval. The delegation of business
presented below:
powel of each committee is

I proposars
New
category
Clients
T.ffi**T,l or#3f"f,,,,,BDT 4 '"
Othcr than BDT 0.75
00 rnillion
million

t Sanction

Waiver
Existing cricnrs
H[:i:i:
,?jl,"J#;;
Charges
BDr 7.50 milrion

BDr r.00 rniuion

BDT 5'000
BDr 4.00 million

t
Fces &

The primary responsibility of recovery of loans and lease rentals lie with
the Relationship

Manager,s (RM) Business operational units. The Monitoring department at head

of

t office reviews the NPL accounts along with the statr.is of recovery and assesses
adequacy ofprovisions on a quarterly basis'
the

t 7.0 MARIG,TRISK
I Maintained proper Provision for
the diminution in market value
7.1 Total lnvestment of MFL increased to TK 239.397 million in FY 2015- 16 against
TK2Ol .g5l million in FY 2014- 15. registering a grorvth of 15.l2ok and the
MFL was recorded TK 22j .173 million as on 31" December,2016. The company
investment of
had no
investment in
investment in Government Securities as on December 31,2016. The
|l of equity investment
marketable securities stood to TK 204.60 million from July 01,2015 to
2016 against 185.38 million in FY 2014- 15. The company made an investment
December 31'
in non-
Excellence Limited,
marketable securities worth of TK 22.57 mllliott in CDBL, Financial
T Lankabangla Securities Limited and Bangladesh ventures Limited
which remained

I constant in 2016 (from July 01, 2015 to Decembet 31,2016) and FY 2014- 15' The
market price of the total marketable investment stood at TK 189'91 million
having an
unrealized loss of TK 14.69 million. The company maintained fulIprovision
of TK 14'69
million against the loss in value of shares. The cost and market price of the investment

along with the provision made for quoted marketable securities and non-marketable
T securities is given below as on December 31 , 2016 '

T MIDAS FINANCING LTUTTNU

NO\.EMBER 2017
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ExPosure in. Market (TK in miuion)
Maintained Eicess/ (Shortfall)
Cost Price Market Pric€ Gain/(Loss) provision on Provision
Type of Investment Fy 2016 FY 2016 FY
2016
FY
2ol4- 15
2ot6 ,orXlr, 2016 15
2014- 201't- 15 20t,{- r5

Marketablc Sccurities 189.91 208.56 (14.69) 23.18 14'69 5 00 - 5 00

204.60 I 85.38
(Quotcd & Unquotcd)
Non{rarkctable Sccuritics 22.57 22.51

product wise
8.0 Oprnarrolqer, Rrsr
g.1 MFL maintains own developed customize software which contains
server
visual Basic 6 and Microsoft sQL
module along with accounting system based on
I Uses advanced IT for MIS
2012since200T.MFLalsousesVPNtechnologyformaintainingcommunication
Maintains daY to daY data back generates reports as per organizations'
between head office and branches. The system
a

up has installed new software for Merchant Banking

Unit in the year of
need. The company
200T.Forensuringdatasafety,MFLmaintainsdaytodaydatabackuptominimizethe
risk of data loss.

S.2MFLhasseparatelnternalControlandComplianceManual.TheBoardofDirectors
reviews policies and procedures periodically.
The internal control system helps
appropriate measures to overcome the
identifiing the orgaIlizational weaknesses and takes
annually elsure compliance with
difficulties. Independent inspections take place 10
LendingGuidelines,operatingprocedures,FlpoliciesandBangladeshBankdirectives. of
that monitor the effectiveness
MFL has formed tuturrug"*"rrlcommittee (MANCOM)
is directly supervised by the BoD.
the internal control ,yrrJ-. The MANCOM

g.l emerged as an important segment of

9.0 INDUSTRYRISKANALYSIS Non Bank Financial Institutions (NBFIs) have
I financial system in Bangladesh. NBFIs offer diversified financial services mostly long-
of customers. NBFIs play crucial roles
term in nature to cater the ever changing demands
be always met by the banks' In
in providing additional financial services that cannot
I addition, NBFIs are engaged in the capital market
as well as in real estate sector of
Bank supervises NBFIs through a risk-based
Bangladesh. es a watcildog, Bangladesh
financial services efficiently' NBFIs showed
supervisory system so that NBFIs can deliver
I strong performance in terms of grornth in assets and deposits during
FY16'

Structure of \BFIs

t No. ofNBFIs
@_--E
2011
i1
I
2012
.:l
l.rllj
2013
jl
20ls
.:l
2015
ll
2016*
il
ll
10 l0 l0 l0

I
S
Joint-venture
t0 tB l3 lE 19 19
Private
] - 15 12
,i3
1&v-!s!e!s!--- 161 169 176 lEl 198 220
Total branches

I
*As on 30 June 2016.
Source.- Deparlntent al Fitlulf iol l)t\lilttltutls dntl L[utkLls BB'

g,2BangladeshBankissueslicenceandsupervisesNBFlsundertheFinancial
paid up capital for NBFIs is Taka 1'0
Institution Act, 1993. At present, the minimum
1994. NBFIs'business line is nanow ir
T billion as per the Financial lnstitution Regulation,
comparisonwithBanksinBangladesh.NBFlshavebeenallowedtooffertermdeposit
servicefortenureofatleastthreemonthseffectivefrom2December20l3.
T
Prg. ? 15
UID 4qIIN4lgIryG LIUIIEp-- "f
T NO\T,MBER 2017
@ rvlvlv.ncrbd.com

T
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National Credit Ratings Limited
NBFI
-

lnvestment Pattern of NBFI 2016

I lndustry
I R6rl E tare

lTrad. & Commcrcc

lMcrchrnt Bsnkrng

EAgrlcultur(.

93 Presently, out of 33 NBFIs, three are Goven:ment-owned, 11 are joint venture and
the rest 19 are locally private-owned. Meanwhile, the branch network increased to 220 as
on 30 June 2016. The Structure of NBFIs is shown in the following table.

Assets, Iiabilities and deposits of NBFIs

(TK in Billions)

. Yerr. , 2ql! 2012 2013 2014 2015 2016

Total asscts 288.4 l.]j.q 4lo.l 510.05 611,0 672.8
Toral liabiliric' 2.1r,7 :71..1 I5U.4 12J )1 509.0 572.0
Liabilitics-As:ctsratio 81 7 rJ).2 RO.i x l.5 83.3 85.0
Total dcposit 112.6 t45.4 l
qx.i 218.5 31 8.1 351 ..1

Deposit as '',, oltotal liabilitics 4'.8 5i,0 50.r, 5r..2 62.5 61.4
*.1s on 30 June )0 I 6.
Source: Department of Financial Institutions and Markets, BB.

g.4 Capital adequacy focuses on the total position of NBFIs' capital and protects the
depositors from the potential shocks of losses that an NBFI might incur. It helps absorb
major financial risks related to credit, market, interest rate, etc. NBFIs in Bangladesh have
been instructed under the Basel Accord to maintain Capital Adequacy Ratio (CAR) of not
less than 10.0 percent with at least 5.0 percent in core capital. At the end of June 2016, ortt
of 33 NBFIs, (one NBFI is yet to come under this operation) 2 were evaluated as "l or
Strong", 15 were "2 or Satisfactory", 14 were "3 or Fair" and I was "4 or Marginal" in the
capital adequacy component of the CAMELS rating.

Total Loan/Lease and Classified Loan/Lease

(TK in Billions)
2010 2011 2012 2013 2014 2015 2016i'
7E. I 109.7 l5:.1 :-.r.h 371.8 448.5 4q8.h
-Ls4r4!9-
_9lqrjil_"i@r/Lease _ ..
1

10.5 10.3 li.7 16.8 19.1 40.0 '15.1

o/o
Classified Loan{Lease as
5.9 4.9 s.l 6.1 5.3 8.92 9.0
_el]e!cl-*_-
*As on 30 June 2016.
Source: Departfrent of Finqncial lnstitutions and Markets, BB.

9.5 Earnings and profitability of an NBFI reflects its efFrciency in managing resources
and its long term sustainability. Among various measures of eamings and profitability, the
best and widely used indicator is the retum on assets (ROA) which is supplemented by
retum on equity (ROE). ROA and ROE of all the NBFIs in June 2016 were 0.8 and 5.6
percent respectively. At the end of June 2016, out of 33 NBFIs, 3 were evaluated as "1 or
Strong", 16 were "2 Or SatiSfactory", 11 were "3 or Fair" and 2 were "4 or Marginal" in
the earnings and profitability component of the CAMELS rating (the remaining one NBFI
is yet to come into rating).

MIDAS FINANCING LIMITED Page 8 of 15

NOVEMBER 2OI7 wrvrv.ncrbd.com
 nffir
REPORT National Credit Ratings Limited
NBFI

I ROE
ROA ).1 LS
protitabilit-v of NBFIs
20lt 2012 20t3 20t5 20t5
tt.1 l0 :t 7.5 q.q"' '"-2.;- --
t.5 t.8
2016
5.6

I
.; 0.8
'1,,,tt lt Jr1., :t,l^ t-q411t.ttt:,.J1
Source.' Daportnent of FiildllLittl ltjstttutions
untl Markds. BB

9'6 NBFIs have already passed

t
more than two and a half decades of operation.
face competitive They
disadvantage in collecting funds compared
to the banks due to several
reasons' The main reasons are: - NBFIs
cannot collect short term (less than three
deposits from individual due to the central month)
bank's restriction, and again deposits in NBFIs
are perceived to be less safe to the public.
As a result NBFrs have to offer higher rates
T deposits, which are sometirnes as expensive
as bank borrowing. Again, excessive
on

t
dependence on bank loan and deposit
ha, un adverse impact on the overall industry.
to the liquidity crisis, when interest rate goes Due
up, the average rate of interest on bank
credit lines and deposit rate also increases,
which causes significant rise in the cost of
fund for NBFIs' The high cost of fund for
NBFIs compels them to operate on a reratively
low profit margin.
T 9'7 Despite several constraints,
the industry has performed notably well
and their role in
the economy should be duly recognized. Non-Bank
Financial lnstitutions (NBFIs) in
T Bangladesh have achieved impressive growth
financial innovation and holding the promise
in recent years reflecting the process of
of deepening financial intermediation in

I long term financing needs. It is important

economic growth and provide necessary
approach by all concerned for the development
to view that NBFIs work as a catalyst for
suppoft for the development. A long term
of NBFIs is necessary. Given appropriate

I 10.0 Caprrar, ADEeuAcy

support' NBFIs will be able to play a more
of the country.
significant role in the economic development

10.1 MFL has formed Asset Liability committee

I . Complies with the prudential
guidelines of the regulatory
BASEL Il requirements which are strlrctured
body, Bangladesh Bank
I . Maintained 19.34% CAI.
requirement, supervisory review process
(ALCo) after stafiing to implement
around three pillars namely minimum capital
and market Jiscipline to compry with the
Bangladesh Bank's pmdential guidelines
accordance with Basel lI' BASEL committee
on Capital edequacy and Market Discipline

Accord with three specific approaches standardized

has responsibly implemented the Basel
in

- approach whereby the risk weighted

assets are calculated based on the ertemal
credit assessment of the risky assets,
I standardized rule based approach is lbllorved
indicator approach is used to quantify
to measure the market risk and basic
the operational risk. The BASEL Com,rittee
responsible to draw dor'vn a clear roadmap is
in various stages to implement the Basel Il
compliance, to design and arange training
to build a skilled manpower, to communicate
any issues related to BASEL Il implementation
with the management and provide a
solulion lo any issues arisirrg our of it.

l0'2 The shareholder's equity of the company stood at TK

1,024.69mi11io[ as on June
30,2016 against TK857.26 milion in June
30,2015 whereas rhe equity was reported to
TK 1,136.41 million as on December 3r,2016
for six (06) months. The equity base
increased by 19.53% in Fy 20r5- r6.
The equity base is composed of paid_up
capital of

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158.73 million and retained earnings of
TK
TK l,2o2.6gmi1lion, Statutory reserve of TK
(336.73)mil1ioninFY2015-16.Theshareholder,sequltytototalassetsstoodar|0.83oh
inFY2015.16againstl3.|6%inFY2014-15and10.77%asonDecembet3I,2016.

l0.3TheRiskWeightedAsset(RwA)ofMlDASFinancingLimitedincreasedandstood
toTK5,901.63millioninFY2015-16againstTK4,857.90millioninFY2014-|5
whereasthefuskWeightedAsset(RWA)isrecordedTK6,165.08millionason
December3|,20t6forsix(06)months.TheTotalCapitalRequiredtobemaintainedis
10%ofRiskWeightedAsset(RwA)whichstoodatTK590.16millionwhereasthe
companymaintainedtotaleligiblecapitalofTKl'077'TTmillionasonJune30'2016
of TK 1,024'69 million and supplementary
whichwas composed of core capital (Tier-I)
Capital(Tier.II)ofTK53.08million,representingacapita|surplusofTK43T'60million.
of |7.36% Core Capital (Tier.
Finally the CAR was posted |8.26%which'was "o,npo."d
I) and0.90% Supplementary Capital (Tier-II)'
in million)
2016 (From JulY 01, FY FY
2016 to December 2015- 16 2014- 15
1. 20

I ffipit"t
ii;; iriirir"r
,'c.rc caPital
I Supplemcntary caPital
Total Eli giblc C'apital (Tirc- 1 +Tirc-2)
1 ,l 36.41
56.04
1,192.45
1,024.69
53.08
1.071 .77
5,901.63
8s1 .26
39.20
896.46
,1,857.90
6,165.08
Risk weighrcd 4.."15 1ftWA) 590. I 6 485.79
616-51
Required CaPital -(107u of RWA) 110.67
T Capilal Excess / (Deficit)
575.9,1
19.34
487.60
18.26 18.45
CAR

& of MFL increased to TK 7

T 11.0 AssEr Qullrrv 11.1 The gross finances (loan, advance
lease) '884'27

millioninFY2015-16againstTK5,193.398millioninFY2o|4-]l5,registeringa

I .

.
51.81% growth in gross finance
of MFL

l5.17Yo Non Performing Loan

growthof5l.81%andthe"g.o,,finu,-,"es(loan,advance&lease)ofMFLwasrecorded
TK8,g32.7gmi1lion as o'iDe"ember 31'
2016' The loan' advances and lease mix
is

t
comprisedofLeaseFinance(|2.|g%inFY20l5-16andl7.g1%inFY2014-15),Term (14',88%
of MIDAS Financing Limited
Finance (69.53%in Fy 2015- 16 and
62.91%in Fy 2014- 15), Housing Finance
inFY 2015- 16
inFY2015-16and14.5o%inFY2014.15),StaffLoan(0.33%inFY2015-16and
. General Provision and SPecific

I Provision are maintained fullY

bY the comPanY.
0.34%inFY2014.15).ConsumerCredit(0.04%inFY2015-l6ando,06%inFY2014-
15)andlnterestReceivable(303n''i'inFY2015-16and4'16%inFY2014-15)'

t ll.2Largeloansandadr.ancesorsirrgleborrorverexposure(outstandingamount
exceedingl5%thepaidupcapitalofthecompany)increasedandstoodatTK2,393.46
million against I r f"r"u.niu..trrn,, frorn
TK 914.g1 million against 05 (five) account
July bt, zots to December 31,2016
rn FY 2014- 15. 01 (one) number
recordecl classified among the large
which was
of accounts
loan and
;l

accounted for TK 86.16 million were

T advanceaccountsin2016andtherecoveredamountfromthataccountwasTK5.2T

t millionuptooctober12,20lT.ThetoptwentyexposLrresstoodatTK2,55T.3lmillionin
fromJuly01,20l5toDecember3l,2016uguin'tTK:I,425.69millioninFY2014-15
whichaccottntsfor32.44%afi,27.45o/oofg,o,.financein2016and2015respectively.

T
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I.l.3Thefinancetodepositratiodecreasedto140'89%inFY2015.16froml52,63ohin
ratio decreased to
Fy 2014- 15. Moreover, the finance to deposits and bonowings
lll.33%in Fy 2015- 16 from 116.60% i, iy ZOt+-
15' Total loan recovered against
l regularloanandclassifiedloanstoodatTK1200.50millionandTKl50.g3million
respectivelyinFY2015-16againstTK5193'39millionandTK1128.63million
respectivelY in FY 2014- 15'
I
I.1.4TheNon-PerformingLoan(NPL)increasedandwasrecordedTKl,l95.89million
FY 2014- 15, registering a growth of
in Fy 2015- 16 against if t,tZS.O: million in
I 5,g6%andtheNon.PerformingLoan(NPL)wasrecordedTK1,072.05millionason
classification increased to TK 339'63
December 31,2016. The NPL under sub-standard

I millioninFY2015-16fromTK163.73millioninFY2014-15.ontheotherhand,NPL
under doubtful classification decreased to
TK l0'7.ggg million in FY 2015- 16 from TK
under bad/loss classification
l31.l2l million in Fy 2014- 15. on the contrary, NPL
from TK827'18 miliion in
I decreased signifrcantly toTK748.27
million in FY 2015- 16

FY20|4-15.Theimpairedpoflfoliocompnsedof28.39,/,and]r4,51o/osub-standard,9.03
oh and 12.15%doubtfu1 uni OZ.Sl"l, and13.34okbad & loss during FY 2015-
16 and FY

I 2o|4-|srespectively.Theimpairedlendingtogrossfinanceincreasedtol5.lT%inFY
2Ol5- 16 tuom2l]73o/o in FY 2014- 15'
(TK in millions)
2016'(FromJulv ' ot
T Particulars
,::;l';"lt', ,ol,I,u ,,il ,,

",G,:;;;*iil;*,
t
2016)

l::"r:: ?,\tr'r:'r[
, t:,'r210:1',

Standard 13'17
SPecial Mention Account (SMA)
200'46 3 2oo'71

t Unclassiiied Loan
Sub-dtanOard (SS)
Doubttul (DF)
Bad Loss (BL)
Non-Performing Loan (NPL) or
2r3j70 339.63
169.'76 101 .99
oa8.iq 148-27
1,072.05 1,195.89
163'73
l3'l '12
82'7.'18
1,128'63

T Classified Loan
NPL 1 Gross Finances (9'lo) 12.00 15.17 21.'73

I 11.5Thetop20(f\^,enty)classifedloanamottntincreasedandstoodatTK488.38million
in2016againstTK376.82nri1lionin20l5.Amorrgthetop20(twenty)classifiedloan
accounts, 03 (three) accounts of TK l46.ll
million were categoriezed as sub standard in

I 2016against05(tive)accountsin2015ofTK58.65million,05(five)accolttsofTK
l05.4SmiliionwereCategoriezedasdoubtfullitt2016agianst03(three)accountofTK

t
30.74millionin2015and12(twelve)accountsofTK236.T2millionfellunderBad&
LoSScategoryin20l6againstl2(twelve)accountsofTK28l,4|in2015.During2016,
having outstanding balnace of rK 477 .18
million
3g (thirty eight) Ioan *.i. ..-r.h"duled
in20l6.TotalTK3oT.} millionwasreoveredagainsttop20(twenty)classifiedloansas category
was also recovered under the Bad Loan
on october |2,2017 . TK l|g.29 million
T as on October 12,2017 '

F
up.rq$aryqryql]rylrEp-
F NOVEMBER 2017

l I
 .I
NBFI
nffir
R E P O RT
National Credit Ratings Limited
(TK in millions)
Particulars *r'.u,lT;'
Fy FY
#:*1.
31,2016)
zors-ro 2011- 15

Required Provis;ion 162.67 567.70 641.66

Standard (lncluding SME loan/lcases) 16.28 37.31 29.66
Special Mention Account (SMA) 9.76 15.16 9.51
Sub-standard (SS) 15.02 32.42 t7.89
Doubttul (DF) 24.78 30.73 33.88
Bad/Loss (BL) 366.83 451 17 5 5U.66

Provision Maintained 162.67 567.70 64 r.66

Exces s Provis i n Mai ntained
o

Loan Loss Provision to Non-Perfbrming Loan (%) 43.16 47.11 56.85

11.6 MFL has maintained the fulIrequired provision of TK462.67 million in 2016 (from
July 01, 2015 to Decernber 31,2016),TK 567.70 million in FY 2015- 16 and TK641.66
million in FY 2014- 15. The NPL coverage decreased Io 47.47o/o in FY 2015- 16 from
56.85% in FY 2014- l5 and the NPL coverage was recorded 43.16% as on December 31,
2016.

I2.O MANAGEMEI.IT l2.l The management team has been organized with a good blend of qualified and
. experienced professionals. The management team is headed by the Managing Director,
Experienced management team
. Mr. Shafique- Ul- Azam who has long experience in banking and financial institutions.
The management team is also
There are nine committees namely (i) Management Committee (ii) Purchase Committee,
responsible to monitor the
different activities of the
(iii) Asset Liability Management Committee (ALCO) (iv) Integrity Committee (v)
organization through nine
promotion Selection Committee (vi) Credit Committee (vii) ICT Development
&
different committees Committee (viii) Monitoring & Recovery Committee and (ix) Profit Optimization Forum.
The detailed qualification and experience of the management executives is given below:

sl. N?-9- Dosionqfinn Experience

All ovcr thc Managing MBA (IBA) 3 1 ycars cxpcricncc

Mr. Shafiquc- UJ- Azarn Director with MFL.
l-l Mr. Md. Atrar Rahrnan
Company

Monitoring & I General I

University of Dhaka

MSC (LJniversiry of i 32 years experiencc

.

Ansary RecSvcV Manager , Dhaka) with MFL.

2
He workcd in

Mr. Md. Monirul Islam

Busincss Gcncrar (Banaras
MrBA ,tfllli|1.1i;
Devclopment Manager Flindu Univcrsit-,*) . uraiunfugunglu
Finance Ltd.
3
8 years cxPeriencc
in Delta Brac
Gcncral
Financc. r Housing Ltd.,
Manager &
Mr. Md. Abdul Wadud.
Accorlnts & FCA (ICAB) , Chanercd
FCA
Treasury
Company I Accountant and a
Sccretary
fcllow meubcr of
4 I ICAB
. Scvcral Ycars
HR & Estatc Hcad ol MBA(Eastcm cxpcriencc in Pancx
Mr. Sharnccm Ahrncd
Adrnin Univcrsity) r GrouP.llYears
Managcmcnt
cxPcriencc in MFL
5

Assi:lattt v.corn rUnircrsiry of 19 years cxpcriencc

llN{r Morsbeda Hasin
I
Housine & CDD
ffiil:if Dhaka) in MIL
Lsi t-,

MIDAS FINANCING LIMITED Page 12 of 15

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I E P O RT
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Mr.
"' Ahrncd "' Mazid
" ' ' :,',Ibnc "--'"
Intcmal Assistant
M.com (Univcrsity of | 24 years cxpcrience
Corttpliancc and General
K nall
control Manager
Chittagong) in MFL.

Information. Assistant
10 years work
Mr. Anwar Hossain MBA
Communicalion Gcncral
Chowdhury expcricncc in ILFSL
l8 & Tcchnology Mana-qer
I 6 Ycars work
BA r Unir crsir -v of

9
*nT
Mr. Md. Enarnul Haque j
I
l
Auto Loan Manager
M
Dhaka)
expcrlcncesltn

I Share
r 14 Years work
I
i Management & Scnior
Mr. Md. Saidur Ranman MBA flruC) i expericnce with
I Merchant Managcr
10 I
I Banking
- M, fr'l";;;.* ji
] Branch Office
I I I
Senior I M..9I ( Jagannath I
gvearswork
I in Bra.
Abdullah unrve:"v) "^n"I"n."
I rr I
lI Munug.,,,"nt
I Y.anlser i * I lBan\ !!rtirgd_*

*' *"""tu'onu
I
I
Documentatron
I s"nio,
Dhaka) i
I r,lssrun;u".,ivor
I "i:,#il:$i[
Management
ManaBcr
,, | I uni! I
rr-rf_-_"P--...-*."$ I MrL
-'.-

* I
+ I I |
r-egul Rrrir,unt lltulruniu..ri,yor
| ,r. ,n,uuna", Mahmud I Manager I
(hiftagong)
I "l#ffi.:Ti.
L_T::"'*'* I
MFL
Scveral ycars
,r.Abu
I credit Rist Assistant , MBA (Stamford
| Saeed
i Munug...rt Manager r Unrvcrsity)
. Bankin-q sector
14 1

3 years cxpcrience
. MBA i as a head of
M.. Sanjida Islam
i_
I .treasurv
Assistant
Research in asset
I (Ma jor in Finance)
. managcrncnt
I

l"_---- Univcrsity of Dhaka , .

r
":n]p*v
3 years expcricnce

Mr. Zunaid Bin Islam I p.por;, Executivc

M.Com
cxpcrience
I Marketing Officer . years ,

i_ 1q ... ,yilhMr.r-

12.2 MFL has well defined HR policy. The company offers salary as well as other
benefits such as festival bonus, perfbrmance bonus, incentive bonus, leave encashment,
contributory provident fund, gratuity fund etc to its employees. Moreover MFL arange
training program on a regular basis to its employees.

12.3 The total number of employees of the company stood at 207 as on December 31,
2016. MFL offers regular basis training programs that are affanged by Bangladesh
Institute of Bank Management (BIBM), Bangladesh Bank Training Academy (BBTA).
Besides, in house training courses are also being arranged to keep the employees abreast
of the latest development in financial sector.

13.0 EARNTNGS Quar,rrv 13.1 MIDAS Financing Limited's earnings is mainly driven by the Interest based
. Increase in net income, ROA income which increased to TK 757.19 million in FY 2015- 16 from TK 593.96 million in
and ROE FY 2014- 15 registering a growth of 27 .48% and the interest based income was recorded
TK 502.15 million as on December 31,2016. The interest expenses of the company also
increased by 18.53% and stood to TK 542.34 million in FY 2015- 16 from TK457.54
million FY 2014- 15 causing net interest based income to rise to TK 214.84 million in FY
2015- 16 against TK 136.42 million in FY 2014- 15 and the net interest based income was
found TK 143.51million as on December 31,2016. On the other hand investnent income
increased toTK62.43 million in FY 2015- 16 from TK 52.68 million inFY 2014- 15 and
the investment income was recorded TK 81.55 million as on December 31, 2016. The

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company eamed capital gain on invesfinent which increased to TK 52.43 million in FY

2015- 16 from37.96 million in FY 2014- 15 and the capital gain on investment was
recorded TK 4.36 million as on December 31, 2016. Moreover, Net Revenue after
considering other operating income increased to TK277.65 million in FY 2015- 16 from
TK 189.48 million in FY 2014- 15 and the net revenue after considering other operating
income was found TK225.06 million as on Decemb er 31, 2076. The Pre-Provision Profit
stood at TK 177.23 million in FY 2015- 16 and TK 82.59 million :r:,FY 2014- 15 and the
Pre-Provision Profit was recorded TK 136.50 million as on December 31,2016. The
company had to maintain lower provision against non-performing loan in FY 2015- 16 in
comparison to FY 2014- 15, therefore, the Profit Before Tax increased and stood at TK
197.97 million in FY 2015- 16 from TK 33.50 million in FY 2014- 15.

13.2 The performance of intermediation efficiency, Net Interest Margin (NIM) decreased
to 3.04o/o in FY 2015- 16 from 4.85% in FY 2014- 15. The asset yield also decreased to
8.60% in FY 2015- 16 from 16.12% in FY 2014- 15 resulting the interest spreads to
increase to -0.75o/o in FY 2015- 16 from -4.42% in FY 2014- 15 and the interest spreads
was found positive and recorded 0.03% as on December 31,2016. However, the cost of
fund deteriorated.to 9.35o/o in FY 2015- 16 from 20.55% :ui,FY 2014- 15 and the cost of
fund was recorded 4.67% as on December 31,2016. ROE and ROA improved,to 17.79Yo
and, 2.10%o respectively in FY 2015- 16 from 7 .59% afi I.00% respectively in FY 2014-
15. The EPS of the MIDAS Financing Limited stood at TK 1.39 in FY 2015- 16 against
TK0.27 in FY 2014- 15 and the EPS was recorded TK 0.93 as on December 31,2016.

14.0 LIQUIDITYMANAGEMENT 14.1 MFL has an Asset Liability Committee (ALCO) for managing liquidity risk and
. ALCO monitors the liquidity interest rate risk, comprising of the senior management personnel. The main firnction of
management ALCO is to continuously observe the furancial market behavior and attempt to minimize
. Surplus CRR & SLR has been
the liquidity risk & interest rate risk. The functions include risk management policy
maintained formulation, setting liquidity standards and examine how liquidity requirements are likely
. to evolve under different assumptions, exchange rate risk and equity risks. The tolerance
Increase in deposits and other
levels are determined keeping all necessary factors in view and fimher refined with the
account and equity base
application of knowledge & experience gained in Liquidity Management.
. Increase in borrowing and other
liabilities
1,4.2 MFL has maintained negative gap in less than one year & positive gap in above one
year maturity bucket as on December 31,2076, that was presented in the following table:

Particulars
I month
Up to months
l-3 3-12 months years
1-5 More than 5
maturity maturity maturity maturity years maturity
Risk Sensitive
Asscts
9rJ5.82 845.34 1.833.32 .1 S17 Rq 1 157 q4

Risk Scnsitive
Liabilities
1.333.61 1,685.74 s.057 .22 919.81 122.53
Net Liquiditl'
cap
(347.7el i (840.3e) | (3,223.89) | 3,618.08 1,930.41

14.3 The company maintained Cash Reserve Requirement (CRR) of TK 129.43 million
against the required reserve (2.5o/o of term deposit) of TK 139.57 million having a surplus
of TK 10.14 million as on December 31, 2076. The company maintained Statutory
Liquidity Reserve (SLR) of TK 27 5.96 against required reserve (5% of total liabilities) of
TK624.46 million having a surplus of TK 348.50 million as on December 31,2016.

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14.4 The main source of MFL's funding was deposit (18.00%) followed by total equity
attributable to shareholder of the company (58.90%) and borrowing(21.69%) in FY 2015-
16. The borrowing increased to TK 1,549.88 million in FY 2015- 16 from TK 1,051.40
million inFY 2014- 15. The weighted average cost of fund is given below;

Source of pund Weighled Average C:t^r_ of WAC (%

!%) _ ^I-ung.
)

Borowins 9.)4on l0.44oo 9.0000-10.00oo I0.000o-l l.00oo

Money :
Caf! 4:50:oA , 4.22ok 3 750,0-4.5000 3.50%-4.50%
Ovcrdraft 7.20oo l0.400o 5.50oo-l0.0Ooo 8.00oo-12.00oo
LongTenn Dcposit Q.l0oo q.8009 8.00oo-l0.b5oo q.00on-l l.600o
, Qfggfep oepglit i N/A N/A , N/A ' N/A

14.5 The deposit has increased to TK 5,596.02 million in FY 2015- 16 from TK3,402.54
million inFY 2014- 15, registering a growth of 64.41% and the deposit was recorded TK
6,814.29 million as on December 31, 2016. The deposit mix of MIDAS Financing
Limited was historically dominated by the term deposit. The top twenty (20) deposits
stood at TK 1,589.34 million which accounts for 23.12% of total deposit as on 31st
December, 2016. All the top twenty (20) depositors are institutional depositors. The
Finance to deposit ratio has decreased to 140.89%o in FY 2015- 16 from 152.63% inFY
2014- 15 and the finance to deposit ratio was recorded 129.94% as on December 31,
20t6.

I KrsnoR MITRA SoHf,L MAHlrooD

ANALYSTS I +88-02-47120156-8 +88-02-471 20 I 56-8
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