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TABLE OF CONTENT01 OVERVIEW 6-32This is CVC 7Historical Snapshots of CVC Finance 9Our Philosophies 12Key Milestones 13Code of Conduct and Ethical Practices 16Our Corporate Values 18What We Do 19Shareholding Structure 24Major Achievements of CVC Finance Limited 26Event Highlights 28

02 STEWARDSHIP 34-75Charter of the Board and its Committees 35Board of Directors 38Committees of the Board 50Message from the Chairman 51Management Committee 54Senior Executives of CVC Finance Limited 63Message from the Managing Director 65Organogram of the Company 71Departments of CVC Finance Limited 72

03 MANAGEMENT DISCUSSION AND PERFORMANCE ANALYSIS 78-137Strategy And Resource Allocation 79Key Operating and Financial Performance Analysis 82Horizontal and Vertical Analysis 91Highlights as required by Bangladesh Bank 98Stakeholder Analysis 99Value Added Statement 115Govt Ex-Chequer Statement 117Economic Outlook 118General Review of the Future Prospect 124Business Segment Review 126Subsidiaries Business Review 137

04 OPERATING ENVIRONMENT AND RISK MANAGEMENT 140-182Macroeconomic Environmental Analysis 143Market Forces and Competitive Landscape Porters 5 Forces 146SWOT Analysis 149

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Statement of Risk Management 152Report of Risk Management 155Risk Management Framework 158Principle risks in FY 2021 and actions undertaken to mitigate 163Business Continuity Plan at CVC Finance 171Performance Matrices 173Strategy on NPL Management 176Report On Going Concern 180

05 SUSTAINABILITY REPORTING 184-195Environmental Initiative 186Social Responsibility Initiative 187Green Banking Disclosure 189Human Resources and Management 190Information Technology 192Sustainable Development Goals 194

06 CORPORATE GOVERNANCE 198-226Corporate Governance Statement 199Corporate Governance Framework and value Creation 200Board Leadership and Effectiveness 202Roles and Responsibilities of the bored 203Compositions of bored and committee’s 204Statement of Directors’ 206Key Activities of the Board During 2021 207Management Committee 210Internal Control and Risk Management 211Disclosure Under Capital Adequacy and Market Discipline 213Report of the Audit Committee 222Directors Report 2021 224

07 AUDITED FINANCIAL STATEMENTS OF CVC FINANCE & IT’S SUBSIDIARY 228-305

08 CVC IN MEDIA 306-310

09 CVC FINANCE AT A GLANCE 311-314

10 NOTICE OF THE 7TH ANNUAL GENERAL MEETING 315

11 PROXY FORM 316

12 CORPORATE PROFILE 317

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OVERVIEW

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CVC Finance Limited, incorporated in 2015 and licensed by Bangladesh Bank, is a fast-growing financial institution. Since its inception, it has consistently contributed to the development of the country. The world is rapidly changing, and we are reinventing our service to meet market demands, CVC Finance Limited aspires to be the country’s most technologically advanced and service-oriented financial institution. CVC Finance Limited has a diverse product portfolio that includes traditional lending and deposit products. Along with the traditional products, it has focused on creating alternate delivery channels leveraging technology. By implementing new technologies, finest corporate practices, and quality service, we aspire to provide innovative financial solutions. We provide value to our consumers by delivering a wide choice of deposit and loan products. Our diversified deposit products assist people in saving and making investments. Their funds eventually contribute to the country’s overall growth. CVC Finance Limited offers a wide range of loan products to help customers meet their personal and business needs. These tailored financial solutions assist businesses in expanding their operations.

The Board of Directors of CVC Finance Limited is made up of professional experts and businessmen from various backgrounds, ensuring strategic decision-making harmony. CVC Finance Limited’s chairman is Mr. Mahmud Hussain. Mr. Hussain has over two decades of diverse local and global financial services market experience with organizations such as the World Bank, Deutsche Bank, and Citigroup UK with a strong a strong educational background in the three broad areas of finance. Our Executive Committee chairman, Mr. Anwar Kamal Pasha is the Managing Director of Moon Readywears Limited. A successful businessman, Mr. Pasha started his career with different types of business organizations. He is the director of Setara Garments Ltd. and Sun Moon Apparels Ltd. He is the Chairman of Kamal Textile Mills Ltd. and Sark Knit Wear Ltd. He holds the position of Managing Director in Pasha Denims Ltd. and is also the owner of Setara Embroidery Services & Design Centre. Our Audit Committee chairman, Mr. Syed Al Farooque is a Sponsor Director and

Chairman of Express Insurance Limited. He started his business career in 1980 and set up a number of Industrial units in the RMG Sector. He was also involved in the real estate sector with a good reputation. He is the Managing Director of WILLS GROUP. He had an active role in BGMEA. He is a member of India-Bangladesh Chamber of Commerce and Industry (IBCCI), Dutch-Bangla Chamber of Commerce and Industry (DBCCI), and Bangladesh German Chamber of Commerce & Industry (BGCCI). He was a member of the Executive Committee of Bangladesh Insurance Association (BIA) and played a vital role in developing the Insurance Industry in the country.

CVC Finance received “A+” in Long Term and “ST-2” in Short Term Credit Rating by Alpha Credit Rating Limited.

THISIS CVC

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Loan portfolio (as on December 31, 2021) – BDT 412,93,76,833 (BDT 4129 million)

Paid Up capital is BDT 118,96,50,000

CVC Finance Limited has been recognized for its innovative products and services and also for its effort to provide financial services to the rural unbanked community.

- CVC Finance Limited is awarded Women Enterprise Recovery Fund award by UNCDF among 11 Asia Pacific countries.

- CVC Finance Limited is one of the winners of the BFP-B, Challenge Fund Round – 3 partnered with DFID, UKAID

- In partnership with OXFAM, provided access to finance for the rural based MSME’s to benefit marginalized farmers and women.

CAPM ADVISORY

CVC BROKERAGE LIMITED

CVC Finance Limited, a Bangladesh Bank-licensed financial institution that focuses on providing the highest benefit to its clients, purchased 60 percent shares of CAPM Advisory Limited, a private limited company. CAPM Advisory Limited was incorporated as a limited company in November 2011 under the Companies Act, 1994, and was licensed as a full-fledged Merchant Banker and Portfolio Manager in April 2012 under the Bangladesh Securities and Exchanges Commission (Merchant Banker & Portfolio Manager) Rules, 1996.

The Merchant Banking subsidiary will enable CVC Finance Limited to generate non-funded and fee-based revenue in the areas of portfolio management, equity and debt issue management, corporate advisory services, and other allied businesses. CAPM Advisory Limited creates synergy for both companies’ corporate and individual clients, therefore increasing both companies’ profitability. The addition of a merchant banker and portfolio manager subsidiary allows CVC Finance Limited to diversify its operations, offer fee-based financial advisory services, and lower its dependence on traditional lending business.

CVC Brokerage Limited is a fully owned subsidiary of CVC Finance Limited. CVC Brokerage Limited will be engaged in shares, stocks, bonds & other financial instrument, trading and brokerage business under the license issued by SEC and DSE. By trading shares and stocks and assisting a company in registering and issuing stocks to be traded on the primary and secondary markets, CVC Finance Limited will receive commission income and underwriting income. Underwriting fees will be one of the major sources of revenue for brokerage houses. The inauguration of CVC Brokerage will further diversify the revenue streams of CVC Finance Limited.

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HISTORICAL SNAPSHOTSOF CVC FINANCE

Initial meeting before the formation of the company.

First Annual General Meeting of CVC Finance Limited.

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Second Annual General Meeting of CVC Finance Limited.

Third Annual General Meeting of CVC Finance Limited.

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Fourth Annual General Meeting of CVC Finance Limited.

Fifth Annual General Meeting of CVC Finance Limited.

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OUR VISION

OUR MISSION

To be the innovative & most professional Financial Institution to cater to the need of the market.

Maximize values for both external and internal stakeholders through innovation, skill and professionalism.

Offer comprehensive, professional and innovative financial solutions and services.

Establish an ethical, professional corporate governance and management structure.

Facilitate FDI & optimize the use of capital to spur sustainable economic green growth.

OUR PHILOSOPHIES

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09 MARCH 2014

16 JULY 2015

29 FEBRUARY 2016

12 APRIL 2016

18 APRIL 2016

12 JULY 2016

01 AUGUST 2016

31 MARCH 2015

01 SEPTEMBER 2016

31 JULY 2017

20 AUGUST 2017

27 SEPTEMBER 2016

Letter of Intent

License from Bangladesh Bank

Formal commercial inauguration

Signing of the first lease agreement

Signing of the first Consumer Finance agreement

Signing of the first term finance agreement

Signing of the first SME agreement

Incorporation of the company andcommencement of Business

MOU signed with Bangladesh Bank for re-finance scheme for Renewable energy & environment friendly financeable sector

Collaboration agreement signed between OXFAM Bangladesh and CVC Finance for promoting access to finance (a2f) for rural based Micro, Small and Medium Enterprise (MSMEs) to benefit marginalized farmers & women under the Enterprise Development Program (EDP)

MOU for strategic partnership among Modhumoti Bank Limited, CVC Finance and CAPM Advisory Ltd. for providing a range of financial transactio

MOU signed with Bangladesh Bank for Brick Kiln Efficiency Improvement Project

KEY MILESTONES

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19 DECEMBER 2017

22 MAY 2018

25 SEPTEMBER 2018

25 JULY 2019

02 FEBRUARY 2021

23 MARCH 2021

13 APRIL 2021

06 JUNE 2021

22 FEBRUARY 2021

01 JUNE 2021

19 AUGUST 2021

Collaboration agreement signing ceremony between CVC Finance Limited and Agromach and Farming Service (AFS).

Contract signing ceremony with Nathan Associates London Ltd and Oxford Policy Management Ltd. in Business Finance for 2018 the Poor in Bangladesh (BFP-B) Program.

Collaboration agreement signing ceremony promoting access to finance for micro, small and medium enterprises (MSMEs) between CVC Finance and Enterprise Café Limited.

Collaboration agreement signing ceremony with Enterprise Café Limited to promote access to finance (A2F) to rural based Micro, Small & Medium Enterprises (MSME) in the Mymensingh Kurigram, Gaibandha.

MoU with Dotlines to create alternate delivery channels.

Signed MoU with Cateina Technologies to enhance Digital Reach.

Signed an NDA with DANA .

Acquired 60% shares of a private limited company, CAPM Advisory Limited.

signed an MoU with OpenArc to develop FinTech products for the digital transformation of CVC Finance Limited’s businesses.

Signed an agreement with Cye Retail Tech Limited to roll out the “Digital Un-Divide” pilot project.

Signed an NDA with OpenArc Bangladesh to create a mobile app for CVC Finance Limited.

31 MARCH 2015 CVC Finance Limited has been renamed from CAPM Venture Capital & Finance Limited.

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20 AUGUST 2021

31 AUGUST 2021

15 SEPTEMBER 2021

30 SEPTEMBER 2021

01 DECEMBER 2021

31 DECEMBER 2021

28 DECEMBER 2021

Wins a top international award – Women Enterprise Recovery Fund by UNCDF among 11 Asia Pacific countries.

Signed an MoU with BANCAT to collaborate with them in their ‘patient adoption program’ to financially assist three of their cancer patient.

Signed an Agreement with IOTA for the ISO 27001:2013 certification by Bureau Veritas - UK, an international agency.

Signed an Agreement with REVE Chat for creating a chatbot for the CVC Finance website.

Established connection with the EDS money platform and started live money market transaction.

Implemented and launched e-KYC and went live.

Joined hands with JAAGO Foundation to sponsor JAAGO’s furniture and fixtures for the new classrooms.

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CODE OF CONDUCT AND ETHICAL PRACTICES

Code of conduct is a set of rules outlining the norms, rules and responsibilities of or proper practices for any organization. CVC Finance is a value driven organization with strict adherence to principles even if the situation sometimes provides temporary benefit to the Company. It is the principles, values standards or rules of behavior that guide the decisions, procedures and systems of an organization in a way that contributes to the welfare of its key stakeholders and respects the rights of all constituents affected by its operations.In line with that, the service rule approved by the Board of Directors of CVC Finance, all employees shall require observing and complying with the norms of conduct, manner, behavior and ethical practices stated hereunder in activities they perform in the company. Conduct in such a manner that will enrich the image, dignity and reputation of the company.

Shall carry out his responsibilities with honesty, faithfulness, diligence, and efficiency to the best of his abilities.

Shall attend to his duty punctually and regularly.

Shall not conduct in such a manner as is likely to bring his private interest to conflict with his official duties.

Shall maintain secrecy regarding the affairs of the company and also of its clients.

Shall prevent and avoid potential conflict of interest that may arise and influence whilst he/she performs.

Shall not commit insubordination or non-

compliance with any legitimate, lawful or reasonable order or instruction of a superior.

Environmental and climatic protections should be taken into account in all areas of lending/financing.

Shall not accept directly or indirectly any gift, gratuity or reward or any offer of a gift on his behalf or on behalf of any other person from anyone, which is likely to have a negative effect on the interest of the company.

Shall consider the risks and implications of their actions and in principle, should feel accountable for them and for the potential adverse impacts.

Shall not engage in or participate in any business

dealings for personal gain, such as shareholding, profit sharing, or a partnership of any business company, manufacturing industry, or servicing center.

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Must give proper attention to the clients and make utmost efforts to render improved customer service at the quickest possible time.

To act and encourage others to behave in a professional way and ethical manner.

Shall not bring or attempt to bring any form of outside influence or pressure.

Shall not take up additional job or employment with another organization or involve in any trade or business without the prior written approval of the management.

Use reasonable care and exercise independent professional judgment.

Shall comply with all applicable laws, rules and regulations, company policies and professional standards.

Shall comply with all current regulatory and legal requirements and endeavor to follow best industry practices.

ETHICAL PRACTICES:

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OURCORPORATE VALUES

SUSTAINABLE DEVELOPMENT

COMMUNITYLEADERS

CUSTOMERCENTRIC

INTEGRITY AND ACCOUNTABILITY

EMPLOYEEVALUE

We give priority to the Country’s sustainable development with the importance of growth and transparency.

We devote our time and resources to improving the quality of life for everyone in the communities where we live and work.

We promote creativity and innovative financial solutions for customers. Our value proposition includes personalized service to the clients geared towards maximizing their satisfaction in a focused way.

We work together with the client on the basis of mutual respect and strive to build long-term relationships with them through integrity and accountability.

We put a priority on training our employees in order to develop future leaders, and we value them as highly as we value our clients. We are devoted to offering professional and personal growth opportunities for our employees.

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WHATWE DO

CVC Finance is open to new ideas, perspectives, and nontraditional innovative financing. For faster growth and wealth maximization, customers can get assistance from the company through the following fund and fee-based debt products and services. Through categorizing the products and services by the aforesaid broad generic names, CVC Finance offers different products and services under the following broadheads. In

all cases, management must adhere to the key aspects of the above products as mentioned by Bangladesh Bank in their “Products and Services Guidelines”. CVC Finance has a wide range of conventional and non-conventional financing products for its corporate and individual clients.

LOAN PRODUCTS

SUBSIDIARY PRODUCTS AND SERVICESDEPOSIT PRODUCTS

Corporate Loan

SME Loan

Consumer Loan

Primary Market Services

Secondary Market Services

Investment Banking Services

Research & Investment Advisory

Regular Term Deposit

Income Scheme

Cumulative Term Deposit Scheme

Professional Deposit Scheme

Provident/Gratuity Fund Deposit

Double Money

Triple Money

Monthly Savings Plan

Insured DPS

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CVC Finance Limited offers a variety of loan options to help you achieve your long-held aspirations and meet the essentials of life.

CVC Finance Personal Loan is your answer to instant finance without any wait to meet any financial need.

CVC Finance offers financing for BMRE, land acquisition,construction, capital expenditure, etc

SME Term Loans are available from CVC Finance for a variety of purposes, including business development,process modernization, and capacity expansion.

CVC Finance provides funding for seasonal agricultural operations or associated activities, as well as land or agricultural equipment purchases. CVC Finance also provides funds for any financial service that incorporates environmental, social, and governance (ESG) elements into the company or investment decisions, such as a bio-gas plant, organic manure from dairy, poultry, slurry, vermicomposting, among others.

CVC Finance provides a variety of Home Loan choices that can be tailored to your specific requirements. Make your dream of owning a home reality.

CVC Finance provides lease finance for industrial machinery and equipment, office transportation, and marine boats, among other things.

SME lease finance can be used to purchase vehicles or equipment for your business.

Owning a car is no longer a luxury; rather, it has become a basic necessity. CVC Finance offers auto loans to facilitate your dream car.

CVC Finance offers financing to participate in tenders under Government/ Semi-Govt.Organizations, Autonomous Bodies, or other organizations.

For women entrepreneurs, CVC Finance offers a variety of loans for company development, fixed assets, commercial vehicle acquisitions, and working capital, among other things.

LOAN

CONSUMER FINANCE:

CORPORATE FINANCE:

SME FINANCE:

Personal Loan:

Term Finance:

SME Term Loan:

AGRICULTURE & SUSTAINABLE FINANCE:

Home Loan:

Lease Finance:

SME Lease Loan:

Auto Loan:

Work Order Finance:

Women Entrepreneurship Loan:

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CVC Finance provides precision while building a strategy for your ambitions by allowing you to construct your own tenor. Together, we’ll pave the way for a brighter future.

Regular Term Deposits are available to individuals, institutions, or both, and have a variable duration of 3, 6, 9, or 12 months. A minimum deposit of BDT 50,000 is required.

The Professional Deposit Scheme is suitable for self-employed professionals with a flexible tenure from 24 months to 60 months with a lucrative return at maturity.

The minimum deposit for the Double Money Scheme is BDT 100,000, which will be doubled after a fixed tenure.

The minimum deposit for the Triple Money Scheme is BDT 100,000, which will be tripled after a fixed tenure.

The Monthly Savings Plan is a monthly installment-based long-term savings plan with a flexible tenure ranging from 36 months to 120 months and a minimum monthly deposit amount of BDT 1,000.

Here, depositors will have three types of health insurance coverage against their deposit which is BDT 100,000 life insurance coverage at maximum and maximum BDT 30,000 in-patient. Hospitalization and diagnostic charges coverage is up to BDT 4,000 each year against monthly deposit amount of BDT 2,000 to 10,000. A customer can claim online insurance using Carnival-assure-platform (a tech-oriented initiatives by Dotlines Bangladesh) in a hassle-free manner.

Income scheme is suitable for pensioners who prefer interest income on a monthly, quarterly & half yearly basis. The Income Scheme requires a minimum deposit of BDT 100,000 and has a variable tenor ranging from 12 to 60 months.

Provident Fund or Gratuity Fund Deposit Scheme is available for self-employed professionals and organizations with a flexible tenure from 24 months to 60 months.

Individuals and institutions with flexible tenures of two to four years or more are eligible to participate in the Cumulative Term Deposit Scheme. A cumulative term deposit requires a minimum deposit of BDT 50,000.

DEPOSIT PRODUCTS

DEPOSIT SCHEMES:

Regular Term Deposit:Professional Deposit Scheme:

Double Money:

Triple Money:

Monthly Savings Plan:

Insured Deposit Scheme:

Income Scheme:

Provident/GratuityFund Deposit:

CumulativeTerm Deposit Scheme:

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CVC Finance holds 60% share in CAPM Advisory Limited. CAPM Advisory Limited is a full-fledged Merchant Bank, incorporated as a private limited company under Companies Act, 1994 in November 2011 and licensed as a full-fledged Merchant Bank under Bangladesh Securities and Exchanges Commission (Merchant Banker & Portfolio Manager) Rules, 1996 in April 2012.

It is when a company first offers shares of stock to the public through an exchange, as the name implies. It’s also known as “Going public”

We offer a range of corporate advisory services including the followings:

Capital Restructuring

Financial Consultancy

Feasibility for going public

Structured Solutions

Post issue management

Corporate Governance

Debt issue through private placement.

Our portfolio management service is designed to provide personalized, secure, and simple financial solutions for a wide range of investors who wish to enhance their opportunities while minimizing their administrative burden.

This account is managed by the account holder through CAPM Advisory Limited. The investor bears the risk of

This account is managed by CAPM Advisory Limited on behalf of the client.

investment and also its gain or loss.

Corporate Finance

Foreign Finance

Local Finance

Mergers and Acquisitions

Structured Solutions

Debt Restructuring

Investor Relations Advisory

Structural Asset Finance

Distribution and syndications

Infrastructure & Project Finance

Business Feasibility

Placement Sale

This means further public offering for the issuance of additional security by an issuer that is listed with stock exchanges.

Rights offering (issue) is an issue of rights to a company’s existing shareholders that entitles them to subscribe to additional shares directly from the company in proportion to their existing holdings, within a fixed time period.

Underwriting is the process by which investment bankers raise investment capital from investors on behalf of the corporate issuers who are issuing either equity or debt securities.

SUBSIDIARY SERVICES

PRODUCTS AND SERVICES:

CAPM ADVISORY LIMITED:

A) Primary Market Services:

B) Secondary Market Services:

C) InvestmentBanking Services

i) Equity Capital Management:

Portfolio Management:

ii) Equity Capital Management:

Initial Public Offering (IPO)

Corporate Advisory

Investor DiscretionaryAccount (IDA):

Portfolio Managers Discretionary Account (PMDA)

Repeat Public Offering (RPO)

Right Issue

Underwriting

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CVC Finance Limited obtained permission from Bangladesh Bank to start its stock brokerage business and subsequently got approval from DSE and SEC to start its brokerage business by setting up a fully owned subsidiary company named CVC Brokerage Limited.CVC Brokerage Limited is going to offer full-fledged brokerage services to its corporate and individual customers.

CVC BROKERAGE LIMITED:

CAPM Advisory Limited’s research team provides differentiated,client-focused micro as well as macroeconomic research and investment ideas. Our Research Services Include:

Economic Research

Fundamental Research

Sector Research

We are dedicated to providing you with independent, professional investment planning. When we will advise you, we always keep in mind that, your dreams and aspirations are unique and require unique attention. Therefore, you will always find an investment plan that suits your unique need from our accomplished investor advisory team.

D) Research & InvestmentAdvisory:

Research Services:

Investment Advisory:

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SHAREHOLDING STRUCTURE

Name of the Shareholders Share Percantage Number of shares held

A. INDIVIDUALS 42.00% 49,965,300

Mr. Mahmud Hussain 3.00% 3,568,950

Mr. Syed Al Farooque 2.50% 2,974,125

Ms. Taslima Islam 6.00% 7,137,900

Mr. Naim Hossain 10.00% 11,896,500

Mr. Syed Badrul Alam 6.50% 7,732,725

Ms. Sarwat Khaled Simin 7.50% 8,922,375

Ms. Sabiha Khaleque 2.50% 2,974,125

Mr. Md. Nazrul Islam 2.00% 2,379,300

Mr. Rezaul Karim 2.00% 2,379,300

B. INSTITUTIONAL 36.00% 42,827,400

Khan Brothers Ship Building Ltd. 9.00% 10,706,850

Amanat Shah Weaving Processing Ltd. 8.00% 9,517,200

Moon Readywears Ltd. 10.00% 11,896,500

Padma Glass Ltd. 7.00% 8,327,550

Apsara Holding Limited 2.00% 2,379,300

C. GOVERNMENT 16.00% 19,034,400

Investment Corporation of Bangladesh 10.00% 11,896,500

Sadharan Bima Corporation 6.00% 7,137,900

D. FOREIGN 6.00% 7,137,900

Kowloon Capital Limited 6.00% 7,137,900

TOTAL 11,89,65,000

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SHAREHOLDING COMPOSITION

50%

40%

30%

20%

10%

0%

Individuals

42%

36%

16%

6%

Institutional Government Foreign

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UNCDF’S “WOMEN ENTERPRISE RECOVERY FUND”

MAJOR ACHIEVEMENTS OF CVC FINANCE

As a strategic initiative, with partnership with CYE (technological partner), CVC Finance is working for achieving the goal of empowering the women led SME’s through digitizing their operations by offering digital payments, alternative credit scoring, book-keeping, inventory management, business registry thus creating a rural e-commerce market place.

In the thematic area of Women’s Economic Empowerment, UNCDF is leveraging several programs to support women entrepreneur and women-led SMEs - a model that not only focuses on driving local economic development through mobilizing local institutions, but also focuses on closing the digital finance and digital literacy gap, particularly for SMEs.

“Women Enterprise Recovery Fund” is one of the several programs to achieve the Goal. Among the 10 winning Financial Institutions of Asia Pacific countries, CVC Finance proudly represented Bangladesh as one of them.

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OXFAM

As part of the wider strategy to achieve the Oxfam’s core objectives: Gender and Women’s Leadership and Economic Justice & Resilience, OXFAM in Bangladesh implements the “Enterprise Development program (EDP)” since 2015. The goal of the EDP is to develop sustainable enterprises that will create positive social and environmental impact promoting economic & employment opportunities for marginalized farmers, women and youth. Based on this fact, Oxfam in Bangladesh and CVC Finance has collaborated with each other in 2017 to Promote Access to Finance (A2F) for Rural based Micro, Small and Medium Enterprise (MSMEs) to benefit Marginalized Farmers & Women through collaboration. According to this program CVC Finance has successfully initiated Access to Finance (A2F) program towards Rural based Micro, Small and Medium Enterprise (MSMEs) to benefit Marginalized Farmers.

With funding support from UK Government, the Business Finance for the Poor in Bangladesh (BFP-B) is a program funded by DFID. Its overall objective is to increase Access to Finance (A2F) for Micro and Small Enterprises in Bangladesh (MSEs), with a particular focus on rural and women-led enterprises. Business Finance for Poor – Bangladesh launched its Challenge Fund Round - 3 program on 2017. Among the 10 partners, CVC Finance is one of the winner of Challenge Fund Round – 3. Through this fund CVC Finance has initiated couple of products namely Motsho Chas and Krishir Chaka at rural area of Naogaon District of Bangladesh. These loans were processed through a mobile application and repayments were structured based on farmer’s cash-flow.

https://www.bfp-b.org/news/2018/5/22/7fvk9rn252kkxsfehso0lku9ejp2lq?rq=CVCFL

DFID

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EVENT HIGHLIGHTS

MoU signing with Bangladesh Cancer Aid Trust (BANCAT) to participatein BANCAT’s Patient Adoption Program

Collaboration agreement signing to roll out the “Digital Un-Divide” pilot project with tech startup Cye Retail Tech Ltd for digitalizing Small and Medium Enterprises (SMEs).

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Deal signing ceremony with Brilliant Cloud to provide cloudcomputing services to its customers.

Friendly football match amongst the employees of CVC Finance Limited.

Ceremony for winning a top internationalaward – Women Enterprise Recovery Fund by UNCDF

among 11 Asia Pacific countries

Handing over the cheque of sponsorship the furniture and fixtures of the new classrooms of JAAGO Foundation.

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A daylong session for the employees in order to improve the overall brand value and the organization’s visibility.

The 10th Annual General Meeting of CVC Finance’s subsidiary, CAPM Advisory Limited.

Participated in the SME Fair organized under the collaboration of Bangladesh Bank Training Academy &

SME Foundation

CVC Finance’s strategy session with its core managementcommittee and other senior executives.

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Celebrating International Women’s Day with the strong, intelligent, talented, and simply wonderful women of CVC Finance Limited.

Friendly cricket match amongst the employeesof CVC Finance Limited.

Welcoming 2021 with all the employeesof CVC Finance.

Agreement signing with Potato Digital – an advertising agency as CVC Finance’s digital

marketing agency to handle the digital activities related to the advertising and communication

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Collaboration signing agreement with OpenArc Bangladesh (Pvt) Limited to develop a personalized fintech financial solution for our current and potential clients.

Ceremony of acquiring 60% shares of CAPM Advisory Limited.

Celebrating 2 years of the Managing Director of CVC Finance Limited

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AMENA & MORIYAM STORE

Since 2007, Amena & Moriyam Store has been a sole proprietorship dealing a variety of groceries items. Mr. Md. Abbas Uddin Khan, the owner of Amena and Moriyam Store in Kathalbagan, Dhaka, is a well-known retailer in that area.He was involved in retail sales at the start of the company. In addition to retail sales, he began a wholesale business in 2016. He was unable to expand his business as planned due to a lack of sufficient finance. As a result, he attempted to obtain financial assistance from relatives or other sources, but faced issues regarding assistance. Finally, on the advice of a well-wisher, he went to CVC Finance Limited. He discussed the state of his firm and desired CVC Finance Limited as a financial partner to help him grow it. CVC Finance Limited has always been a name associated with small but promising sectors of the country’s small business. Mr. Md. Abbas Uddin Khan was no exception, and he quickly sought for a loan, as is required by law. CVC Finance, after analysis, financed him for the first time in his life in a short period of time in the amount of Tk. 10,00,000 (10 lac) in easy terms with no difficulty.

Everything was in order, but his company wasn’t ready to deal with the effects of the Covid-19 pandemic. As a result of the government’s lockdown in the event of

a pandemic, the shop remained closed for several months. As a result, the proprietor may be unable to appropriately manage operational costs. Md. Abbas Uddin Khan was clueless yet again as he faced a new challenge. CVC Finance Limited believes in long-term partnerships and does not want to see a good dream come to an end. Thinking that every small business, such as Amena & Morium Store, may thrive if given adequate leadership and sufficient funding. Then, to help him control his operational costs, CVC Finance Limited took the initiative to supply him with Working Capital Finance at a very low interest rate.His shop currently employs five people, which has helped to increase employment. Mr. Abdul Mannan believes CVC Finance Limited has assisted him in his journey and has been a source of support in difficult times. Mr. Abdul Mannan stated, “Achieving success is not tough when CVC Finance Limited is by your side.” We are ecstatic to see him achieve the success he envisioned at the start of his company. As always, CVC Finance Limited attempts to assist aspiring business owners.

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STEWARDSHIP

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Charter of the Board and its committees refer to the respective roles, responsibilities and authorities of the Board of Directors and its committees in setting the direction, the management and the control of the company’s overall business. Board charters have become an accepted part of the governance landscape. Many major inquiries, reports and leading practice recommendations refer to the need for board charters in delivering effective governance. The purpose of the charter is to clearly outline the structure of the Board and its committees to define the role of the Board and the committees as a whole through the identification of a schedule of powers reserved solely for the Directors and committee members.

The charter further defines the specific responsibilities of the Board of Directors and committees, in order to enhance coordination and communication between the Chief Executive and the Board and committee members more specifically, to clarify the accountability of all parties for the benefit of the company.

The charter of the Board of Directors and its committees set out in line with Bangladesh Bank guidelines are as follows:

CHARTER OF THE BOARDAND ITS COMMITTEES

BOARD OF DIRECTORS

FORMATION OF SUB-COMMITTEE

FINANCIAL MANAGEMENT

LOAN/LEASE/INVESTMENT APPROVAL

RISK MANAGEMENT

To form sub committees for facilitating company’s operation.

Approve budget, review financial statements and others, set procurement policy and approval of opening of company’s bank account.

Oversight of approval of syndicate loans, leases, investments and large loans.

Approve and implement Core Risk Management Guidelines, delegate power to the management and non-interference in decisions regarding loan processing.

Work-planning and strategic management Setting Vision/Mission, formulating strategic policy, directions, plans and implementation of company’s goal.

Analytical review of success/failure in achieving the target and key performance indicators for the executives.

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INTERNAL CONTROL AND COMPLIANCE

EXECUTIVE COMMITTEE

BOARD AUDIT COMMITTEE

INTERNAL CONTROL

Effective implementation of an integrated internal control system through the Audit Committee.

Review of Internal Control & Compliance Department’s report by the Board Audit Committee.

The committee will be responsible for proper scrutiny and evaluation of the proposals for facilities to be considered by CVC Finance Limited through an in-depth focus on terms of the financial viability of the credit proposals.

The committee will recommend the proposals to the Board. If the committee thinks proper, they may take any other decision regarding the proposal.

If the committee does not recommend any proposal to the Board, the proposal will be treated as cancelled.

The report of the committee should be attached to the proposal memo to be placed before the Board.

To run the business smoothly and to have a proper focus on financing the Board of Directors formulated the following charters for the Executive Committee:

To ensure the participation of Directors in company affairs through policy framing, proper directive to the management, to operate the different functions of the company properly and in line with the Bangladesh Bank Circular #13 dated 26 October 2011 the Board of Directors formulated the following duties and responsibilities for the Board Audit Committee.

Board Audit Committee will examine the existence of culture for internal control and risk management; executive’s responsibilities and functions and control of their jobs.

Board Audit Committee will examine management initiatives regarding Computerization and MIS management of the Company.

Board Audit Committee will examine the management consideration of various recommendations provided by the Internal/External Auditor for developing internal control procedure/structure.

Board Audit Committee will examine the Risk Management procedure for implementation of work and control.

Board Audit Committee will examine the forgery, weakness of internal control, etc. found by internal or external auditors or regulatory authorities along with their recommendation to eliminate them and accordingly inform the Board regularly.

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PUBLICATION OF THE FINANCIAL STATEMENTS

INTERNAL AUDIT

IMPLEMENTATION/EXISTENCE OFPRACTICE OF ACTS, RULES AND REGULATIONS

Board Audit Committee will verify that all the information is correctly and properly disclosed in the annual financial statements of the company and the financial statements are prepared on the basis of guidelines issued by Bangladesh Bank and other guidelines relating to the preparation of the financial statements.

Board Audit Committee will discuss with the management and the external auditor before finalization of the financial statements of the company.

The Chairman of the Board Audit Committee will be present before the shareholders in the annual general meeting for answering the questions regarding the financial statements and audit of the financial statements.

Board Audit Committee will examine the audit report and audit procedure of the External Auditor of the company.

Board Audit Committee will examine the implementation/elimination of the recommendation/observation/irregularities as provided by the external auditor in their report by the management properly.

Board Audit Committee will submit their recommend to the Board of Directors regarding appointment of external auditor of the company.

Board Audit Committee will examine the implementation/existence of practice of the acts, rules and regulations enforced by the Regulatory Authority like Bangladesh Bank and other organizations and also adopted by the Board of Directors of the company on regular basis.

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Work Experience:Mr. Mahmud Hussain is the Lead Promoter and founding Chairman of CVC Finance Limited. Mr. Hussain has more than two decades of wide ranging local and global experiences (including Tokyo, NY & London) in financial services’ markets with world recognized organizations including World Bank, Deutsche Bank, Salomon Smith Barney and Citigroup UK. Mr. Hussain worked for Citigroup UK as Director of Capital markets & Banking. He possesses an advanced level of understanding and knowledge of financial products and markets, capital market operations, financial management techniques, financial derivatives, asset management and fund management practices. Mr. Hussain has a broad educational background covering different areas of finance and economics. He is a CFA charter holder, and has MBA in Development Management from IBA, Dhaka University as well as an MBA in Finance from International University of Japan. He also holds a Master’s degree in Mathematical Finance from Oxford University and a post-graduate Certificate in International Finance from Stern Business School of New York University.

He is the founder as well as Managing Director & CEO of CAPM (Capital & Asset Portfolio Management) Company Limited. He also provides selective independent consultancy services internationally in the areas of strategic, financial, climate financing & development management. He also occasionally teaches advanced financial topics as Guest faculty. In the recent past, Mr. Hussain was also the Chairman of Bangladesh Government owned Sonali Bank (UK) Ltd and Bank of England (PRA) approved Independent NED (SMF9).

Mr. Mahmud Hussain, CFAChairmanEducation: CFA, MBA

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Ms. Nasmin Anwar DirectorNominee Director by Investment Corporation of Bangladesh (ICB)

Education: Master’s in Economics

Work Experience:Ms. Nasmin Anwar Joined ICB in 1987 as Senior Officer. She obtained her graduation and post-graduation degree in Economics from Jahangirnagar University. She has been working in different divisions/departments including Central Accounts Department, Fund management Department and Establishment Division of ICB in various capacities for the last 34 years. She also served as the Additional Chief Executive Officer of ICB Securities Trading Company Limited (ISTCL). She has participated in different training courses on various subjects at home and abroad. Currently, she is working as the General Manager of the Operations Wing of ICB. She joined as nominated Director of ICB in the Board of CVC Finance Limited on July 25, 2020. She is also serving as the Director of Golden Son Limited, a public limited company.

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Mr. Bibekananda SahaDirectorNominee Director by Sadharan Bima Corporation

Education: Master’s in Statistics

Work Experience:Mr. Bibekananda Saha has a wide breadth of knowledge and experience in the financial sector (Non-Life Insurance) who obtained a Diploma degree from Malaysian Insurance Institute and an Associateship from Chartered Insurance Institute (CII), London, United Kingdom. He is the Nominee Director by Sadharan Bima Corporation on the Board of CVC Finance Ltd. He has completed his Master’s in Statistics and currently holds the position of General Manager in the Division of Finance and Claims in Sadharan Bima Corporation.

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Mr. Tofayel Kabir KhanDirectorRepresentative of Khan Brothers Ship Building Limited

Education: B.Com (Hons), M.com (marketing), Dhaka University, MBA

Work Experience:Mr. Tofayel Kabir Khan has significant business leadership experience as well as first-hand experience in operating across our markets. He is a renowned businessman who is now the Managing Director of Khan Brothers Group. Mr. Khan has completed B.Com (Hons) and M.Com in Marketing from Dhaka University and also has an MBA. After graduation, he gained experience by working in the marketing sector for 5 years in different companies and then joined his own business. Along with Khan Brothers Shipbuilding Ltd., he has also beneficial interests in companies like Khan Brothers PP Woven Bag Ind. Ltd, Khan Brothers PP Bag Ind. Ltd, Khan Brothers Slipways & Engr. Works Ltd. & Khan Brothers Shipping Lines Ltd. Khan Brothers Marble & Granite Ltd., Khan Brothers Equi-Builders Ltd., Khan Brothers Knitwear Industries Limited, Khan Brothers Bag Industries Limited, Khan Brothers Knit Composite Limited and Khan Brothers International and currently holding the position of director in these companies. He is also a Director of CAPM Advisory Limited (A Subsidiary of CVC Finance Limited). He has also a beneficial interest in the private health sector of Bangladesh.

Mr. Tofayel Kabir Khan’s views of business as a means to the material and social wellbeing of the investors, employees and the society at large, led to the accretion of wealth through financial and moral gains as a part of the process of the human civilization. He also is an honorary lecturer in Marketing Department of Dhaka University and National University as a leading Marketing Expert. Mr. Khan is the vice president of Bangladesh Manob Kallyan Society, Dhaka. Member of Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) and Treasurer of Bangladesh Petroleum Tanker Owners Association (BPTOA).

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Mr. Rezaul KarimDirectorRepresentative of Amanat Shah Weaving Processing Ltd.Education: BBA

Work Experience: Mr. Rezaul Karim has a deep understanding and knowledge of the financial sector. He is a young and dynamic entrepreneur & businessman who is actively involved in the financial market of Bangladesh. He has completed his Bachelor of Business Administration in Finance & Accounting and International Business and currently is associated with organizations like Hazrat Amanat Shah Spinning Mills Ltd., Amanat Shah Weaving Processing Ltd., M. Helal & Brothers Textile Mills Ltd., Standard Composite (Pvt.) Ltd., Standard Company Ltd. and Amanat Shah Fabrics, (Pvt.) Ltd. as Director.

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Mr. Syed Al FarooqueDirectorEducation: Master’s in Arts

Work Experience: Mr. Syed Al Farooque is a Sponsor Director and Chairman of Express Insurance Limited. He obtained M. A. with B.A. (Hon’s) in Bangla Language and Literature from Dhaka University. Mr. Syed Al Farooque is the Board Audit Committee Chairman of CVC Finance Limited.

He started business career in 1980 and set up number of Industrial units in RMG Sector. He was also involved in real estate sector with good reputation. He is also associated with media business and established celebrity and talent management Company at home and abroad. He is the Managing Director of WILLS GROUP.

He had active role in BGMEA. He is a member of India-Bangladesh Chamber of Commerce and Industry (IBCCI), Dutch-Bangla Chamber of Commerce and Industry (DBCCI), Bangladesh German Chamber of Commerce & Industry (BGCCI). He was a member of the Executive Committee of Bangladesh Insurance Association (BIA) and played vital role in developing the Insurance Industry in the country. He is also the Chairman of CVC Brokerage Limited.

Apart from business activities he is an internationally reputed cultural personality and renowned poet in the country. He is author of 50 books, and has been honored with 26 important awards nationally and internationally in Bangladesh, India, UK and USA for his literary contribution. He attended many international poetry and literary festival, book fair and business summit throughout the world. He is associated with many other social and cultural organizations including Bangla Academy, MuktiJuddho Jadughor , Baridhara Society, Chattagram Maa-O-Shishu Hospital, Muldhara (International Center for Writers, Journalists & Artists) and syedalfarooque center for creativity. As the Founder President of Muldhara and Shishu Shahitya Parishad he is working to expand Bangla language and culture all over the world. He was the editor of weekly Akarshon, Chief Editor of Kishor Jagat, Associate editor of Shachitro Shomoy and Asia Editor of Curry Life, International magazine published from London. He is also a TV presenter, Motivational speakers, Reciter, Song-writer and Music-Poetry video director.

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Mr. Anwar Kamal PashaDirectorRepresentative of Moon Readywears Ltd.

Education: B.Com (Honors)

Work Experience:Mr. Pasha has deep experience of managing complex international businesses across dynamic and changing markets. Anwar Kamal Pasha is the Nominated Director by Moon Ready wears Limited on the Board of CVC Finance Limited. A successful businessman, Mr. Anwar Kamal Pasha, runs the business of Moon Ready wears Limited as the Director and also serves Setara Garments Ltd. and Sun Moon Apparels Ltd as Director. Mr. Pasha is the Chairman of Kamal Textile Mills Ltd. & Sark Knit Wear Ltd. and the Managing Director of Pasha Denims Ltd. Mr. Pasha also owns Setara Embroidery Services & Design Centre. He is also a member of Governing Committee of Prime University. He is the Chairman of A & A International Overseas Limited and Recruiting Agent of Zirabo Overseas Limited. Mr. Pasha is the Chairman of S.K Valley Limited. He has also a beneficial interest in Daniel Shipping Lines and he is the owner of Lubna Properties Limited, UK. He is also a Director of Lubna Fashiontex UK Limited. He is currently the Chairman of the Executive Committee of CVC Finance Limited.

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Work Experience:Mr. Asif Wahab Khan has a deep understanding and experience of emerging technologies in the context of some of our key markets. He is currently the CEO of Padma Glass Limited. He has completed his Bachelor of Science in Chemical Engineering from Lehigh University, USA. He is Green Belt certified in Lean Six Sigma Management System from University of Houston. He also possesses knowledge in Performance Management System Design for Organizational Improvement. Mr. Khan is also the Group CEO of Padma Group of Converters.

Mr. Asif Wahab KhanDirectorRepresentative of Padma Glass Ltd.

Education: BSC in Chemical Engineering

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Mr. Naim HossainDirectorEducation: MBA

Work Experience:Mr. Naim Hossain obtained his Bachelor of Business Administration from Florida Career College, Florida, USA and Master of Business Administration from South University Florida, USA. Presently he is Chairmen of O.N Spinning Mills Limited, Abir Poultry Hatchery & Process Limited, Managing Director of Panama Composite Textile Mills Limited, Continental Spinning Mills Limited, Abir IT Limited, Director of Fareast Islami Securities Limited and also the Proprietor of M/S Millennium Enterprise, M/S Sonali Enterprise. Being determined to make a difference in the society through his work, Naim Hossain is also associated with various social work.

A staunch advocate of professional management and strict adherence to the highest quality standards, Naim Hossain’s leadership qualities have been instrumental in making the company successful in a highly competitive industry. During his short tenure of business carrier he visited many countries for business purposes like USA, Canada, UK, Italy, Switzerland, Spain, Japan, UAE, Australia, China, Singapore, Malaysia, Thailand, India, etc. which enriched his knowledge of the industry and latest technologies. He also participated in seminars and workshops on the textile and spinning industry in China and India.

As a young and dynamic entrepreneur, industrialist and social worker, Naim Hossain has been serving the nation for more than 10 (Ten) years in the field of industrial development, international trade and commerce, setting up and managing industry, business venture and social work. He is used to handling important policies with the assistance of highly experienced and senior personnel of different business organs and looking after the policy decision with regard to business, administration, finance and also day to day activities of the organization.

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Mr. AKM Monirul IslamDirector

Representative of Apsara Holding Limited Education: Master’s in Political Science

Work Experience:Mr. AKM Monirul Islam has over 20 years of significant investment experience, strong risk management credentials, and in-depth knowledge of the domestic market of Bangladesh. He is the Representative of Apsara Holding Ltd. on the Board of CVC Finance. Along with this, Mr. Islam is also a nominated Director of Prime Insurance Company Limited, representing Ramisha BD Limited. He has done his graduation from a reputed public university in Bangladesh. He is the proprietor of M/S Mollah Traders. Mr. Monirul Islam is the Chairman of Khokon Foundation (A non-profit organization). He is also a member of the Board Audit Committee of CVC Finance Limited.

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COMMITTEES OF THE BOARD

EXECUTIVE COMMITTEE

AUDIT COMMITTEE

NAME STATUS WITH COMMITTEE

Mr. Anwar Kamal Pasha Chairman Mr. Bibekananda Saha Member

Mr. Tofayel Kabir Khan Member

Mr. Asif Wahab Khan Member

Mr. Naim Hossain Member

NAME STATUS WITH COMMITTEE

Mr. Syed Al Farooque Chairman Ms. Nasmin Anwar Member

Mr. Rezaul Karim Member

Mr. AKM Monirul Islam Member

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MESSAGE FROM THE CHAIRMAN

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Dear Stakeholders,

On behalf of Board of Directors of CVC Finance Limited, I am delighted to welcome you all to CVC Finance Limited’s 7th Annual General Meeting. It gives us immense pleasure to present the Company’s Annual Report and Audited Financial Statements for the year ended December 31, 2021.

ECONOMY AFTER THE PANDEMIC The COVID-19 outbreak struck Bangladesh in the middle of 2020, having a negative effect on the country’s economy. COVID 19 was quickly spread, so the government took the required precautions. As a result, the government issued a stringent formal warning to the lockdown and shutdown procedure for the safety of people of Bangladesh. Many business operations were affected, with consequences for employees and their families. The year 2021 was likewise not particularly pleasant. The COVID pandemic’s impact still prevailed. Lockdowns and shutdowns dominated the first part of the year. Due to the uncertain situation, banks and NBFIs focused more on collection and took a cautious approach to lending. Nonetheless, Financial Institutions used to have a negative impact on their reputation. Following the epidemic’s impact, the central bank decided to stop classifying loans in 2020 and 2021 through several circulars in order to assist investors. Despite the pandemic’s unusual disruptions, we were able to have a positive contribution for our clients, employees, and investors by delivering a better financial performance in 2021.

FINANCIAL PERFORMANCE OF THE COMPANYThe formal financial sector faces a major threat in 2021, as the rate of non-performing loans (NPLs) continues to rise at an alarming rate, owing to loan borrowers’ inability to repay their loans due to the loss of their bread and butter at that time. I’m glad to share that, despite the challenging business environment, the company performance stood reasonably to a better place than the previous year. The total credit portfolio of the company stood at BDT 4,129.38 million at the end of 2021, a 3.83% increase in the credit portfolio from previous year. On the other hand, the total deposit was at BDT 1770.55 million witnessed a growth of 15.95% than a year earlier. Net Profit after Tax stood at BDT 47.58 million during 2021 compared to 29.705 million in 2020. The company’s NPL ratio also suffered during 2021. However, we were able to restrict this at 11.61% at the end of 2021, reasonably below the industry average. The company’s goal is always to improve profitability and growth after a reasonably better performance than the previous year. We made it a top priority to strengthen receivables recovery. We’re concentrating on getting the defaulted clients back on track, and we’ve chosen to be even more cautious in the future when it comes to single-party exposure limitations.

DIGITALIZATION IS THE NEW WAYWe are always developing ourselves in order to deliver more consistent high-quality service to our valued clients and to ensure their well-being. We differentiate ourselves apart from other financial institutions by consistently offering high-quality services although remaining under Bangladesh Bank’s regulation. We are working to establish a digital platform for providing better services to customers to meet their financial needs from anywhere in the country and encouraging clients to enjoy any financial service from a formal financial institution at home, as stated by medical science. The Customer Management System and Task Management System were introduced by management in 2021 so that all workers could work in a methodical manner and their work could be tracked. E-KYC, EDS Money, and ISO 27001:2013 certification, were also among the accomplishments. To provide clients with 24-hour customer assistance, the management is also developing an e-wallet platform, a CVC Finance mobile app, and a Chatbot. CVC Finance has strategic partnerships with local stakeholders and international organizations such as OXFAM, , DFID, and the UN Capital Development Fund (UNCDF).

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The company is collaborating with these global partners to deliver financial services to the bottom of the pyramid.

SUBSIDIARIES OF CVC FINANCEIn 2021, CVC Finance Limited acquired 60% shares of the private limited company, CAPM Advisory Limited. The Merchant Banking subsidiary will allow CVC finance to engage in non-funded and fee-based income in the areas of portfolio management, equity & debt issue management, corporate advisory services, bringing in FDI and other associated businesses. CVC Finance also got approval for another subsidiary which is CVC Finance’s wholly owned brokerage firm.

YOUR WELLBEING IS OUR PRIMARY CONCERNCVC Finance Limited considers human resources to be one of our most important assets. To keep our employees safe and lessen the rate of COVID 19 infection, we created a digital platform and encouraged them to work from home, as well as taking other measures to ensure their safety throughout the pandemic. We have implemented mandatory safety measures for our employees and consumers, including pregnant women and the elderly.In 2021, we have inked an agreement with Bangladesh Cancer Aid Trust so that we can financially support three of their cancer patients on a monthly basis. Keeping the educational sector in mind, we have donated the furniture and fixtures required for JAAGO Foundation’s new classrooms.

GOING FORWARD2021 was a notable year for us. Because of the pandemic’s reduced impact, we were only able to run part of our operations this year. Under these circumstances, we could make few substantial investments in 2021 for future return. We anticipate that the operating environment will continue to improve in 2022, allowing us to operate at full capacity in order to meet our annual targets and contribute to the country’s overall development.As we approach 2022, we start addressing the pandemic’s economic consequences. We are encouraged, though, because the COVID 19 virus vaccine is now more widely available, particularly in our country. Economic activity has restarted, demonstrating a desire to return to pre-pandemic levels. Undoubtedly 2022 would also be a challenging year in terms of sustainability. Our management team, with the help of the Board, has adopted a well-diversified strategy based on diversified products and services to face all challenges companies must focus on. Quality loan portfolio, technological innovation, process improvement, exceptional customer service, deposit portfolio, and other relevant elements would be our primary priority areas. In these changing times, we will continue to strengthen our policies and maintain strong risk management while remaining committed to the highest level of governance.

APPRECIATION I want to express my gratitude to all of our valued clients, shareholders, business partners, and Board of Directors for their guidance and support in growing CVC Finance Limited. I’d also like to thank CVC Finance Limited’s management and employees for their dedication and hard work under the Managing Director’s leadership. I’d like to express my appreciation for the Bangladesh Bank’s cooperation. We are eager to start taking advantage of the opportunities and addressing the issues that may arise in the days ahead.

Mr. Mahmud HussainChairman

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Mr. Syed Minhaj AhmedManaging Director

Mr. Syed Minhaj Ahmed has more than 21 years of experience in the financial sector working in different joint venture financial institutions and multinational banks, such as ANZ Grindlays Bank, Vanik Bangladesh Limited, GSP Finance Company (Bangladesh) Limited, Prime Finance & Investment Limited, National Finance Ltd and Standard Chartered Bank.

He worked in Lankan Alliance Finance Limited as Chief Operating Officer for a period of almost 3 years before joining CVC Finance Ltd and played a major role in setting up, recruitment, policy formulation and business generation of the company.

Mr. Ahmed represents CVC Finance as a Board Director of its investment banking subsidiary company, CAPM Advisory Limited. He is also a key member of BLFCA (Bangladesh Leasing and Finance Companies Association) and works closely with the Executive Committee of the organization.

Mr. Ahmed has completed his M.B.A (Finance) from IBA (Institute of Business Administration), University of Dhaka, Bangladesh, and M. Com (Finance) from University of Dhaka, Bangladesh.

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Mr. Shah Wareef Hossain is the Deputy Managing Director & Company Secretary of CVC Finance Limited. Mr. Wareef has more than 22 years of experience in the financial sector. Prior to joining CVC Finance Limited, he was the Chief Operating Officer of IPDC Bangladesh. He previously served  HSBC Bangladesh, Citibank, Dhaka, Bangladesh; Citibank, Berherd, KL, Malaysia; and American Express Bank Ltd, Dhaka, and has experience in Financial Sector Operations (across Cash Management, Branch Operations, Treasury Operations, and Islamic Banking Operations and Re-Engineering), as well as Management, with exposure to Bangladeshi and ASEAN Markets. Administrative management, risk management, organizational restructuring, project management, and information technology are among his areas of specialization.

Mr. Wareef is on the Board of Directors of CVC Finance’s wholly owned subsidiary, CVC Brokerage Limited.

Mr. Wareef holds a Master of Applied Finance from Monash University in Melbourne, Australia, a Master of Business Administration (Marketing) from the IBA (Institute of Business Administration) at the University of Dhaka in Bangladesh, and a Bachelor of Technology in Civil Engineering from IIT Delhi in India.

Mr. Shah Wareef Hossain Deputy Managing Director & Company Secretary

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Mr. Mohammad Nejam Uddin is the Head of Corporate Finance at CVC Finance Limited. Mr. Nejam has more than 17 years of extensive experience in five Financial Institutions. He started his career with Prime Finance & Investment Ltd. as Management Trainee in 2004. He worked in International Leasing & Financial Services Ltd., National Finance Ltd., GSP Finance Company (Bangladesh) Limited, Uttara Finance and Investments Limited under different capacities. He attended various training/workshops at Bangladesh Bank, BIBM and different training organizations of Bangladesh.

Mr. Nejam is a Board Director of CVC Finance’s fully owned subsidiary, CVC Brokerage Limited. He has completed his BBA and MBA (major in Finance) from the Department of Finance, University of Dhaka, Bangladesh.

Mr. Mohammad Nejam UddinVP, Head of Corporate Finance

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Mr. Faisal Amin SAVP, Head of Operations

Mr. Faisal Amin is the Head of Operations at CVC Finance Limited. Mr. Amin has more than 15 years of experience in the financial sector. Mr. Amin worked in International Leasing & Financial Services Limited for a period of almost 10 years before joining CVC Finance Ltd and served in different departments, such as Credit Administration, Special Asset Management, Branch Operation & Risk Management of the company.

Mr. Amin has completed his BBA. (Major in Management), and MBA. (Major in Management Information Systems) from the Faculty of Business Studies, University of Dhaka

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Mr. Ariful Islam Chowdhury ACAAVP, Head of Internal Control and Compliance

Mr. Ariful Islam Chowdhury is the Head of Internal Control and Compliance at CVC Finance Limited. He is an Associate Member of the Institute of Chartered Accountants of Bangladesh (ICAB). Prior to joining CVC finance Ltd. Mr. Chowdhury has served Khulna Power Company Ltd. as the Company Secretary. Mr. Chowdhury did his article ship in 2016 from Hoda Vasi Chowdhury & Co., a renowned Chartered Accountancy Firm affiliated with the globally reputed Chartered Accountancy Firm named Deloitte Touché Tohmatsu and qualified as Chartered Accountant in December, 2019. He has completed his Masters of Business Administration (MBA) and Bachelor of Business Administration (BBA) from International Islamic University Chittagong. He obtained vice chancellors gold medal award for his academic results in his bachelor’s program.

He has attended various training courses, seminars and workshops arranged by Bangladesh Securities and Exchange Commission, Dhaka Chamber of Commerce & Industry (DCCI), Dhaka & Chittagong Stock Exchange Ltd. and The Institute of Chartered Accountants of Bangladesh (ICAB).

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Mr. Shakhawat Hossain is the Head of Accounts at CVC Finance Limited. Mr. Hossain has more than 17 years of experience in the field of Finance, Accounts, Internal Audit and Control related jobs in the world’s number one NGO (BRAC), Fine Arts Press Limited and Financial Institutions named Islamic Finance and Investment Limited.

Mr. Hossain has completed his M.Com, MBA (Finance), Banking Diploma (Part-I), CA (Professional Level) & Income Tax Practitioner (ITP).

Mr. Shakhawat HossainHead of Accounts

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Mr. Muhammad AnisuzzamanAVP, Head of Treasury

Mr. Muhammad Anisuzzaman, Assistant Vice President, Treasury Department, joined CVC Finance Limited in December 2020. Mr. Anisuzzaman has worked in the financial business for over 17 years. Before joining CVC Finance, he worked for 16 years approximately with Prime Finance & Investment Limited, where he was involved in different areas including SME Finance, Operations & Monitoring, Liability Fund Management, and Treasury. Since 2011, he has been working as a Treasury Money Market dealer. Mr. Anisuzzaman is also CVC Finance Limited’s Deputy CAMLCO (Chief Anti-Money Laundering Compliance Officer).

Mr. Anisuzzaman graduated from Stamford University and East West University with a Master of Business Administration (MBA) and a Bachelor of Business Administration (BBA) in Finance, respectively. He has participated in many training/workshops organized by Bangladesh Bank and major Bangladeshi training institutions.

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Ms. Asma is the member secretary of CVC Finance Limited’s Management Committee. She is  responsible for  the company’s business strategy and development, branding, corporate communication, public relations, corporate social responsibility, and other associated tasks. Along with that, her responsibility is to assist the management and provide all the required information about the company’s performance to the monthly meetings of the Board and Board Committee’s.

She joined CVC Finance Limited in January 2021 and previously served in the asset operations department before moving to the strategic planning and branding department. Ms. Asma has completed her B.B.A. (major in Finance and Banking) from Bangladesh University of Professionals.

Ms. Asma SadiaSenior Executive, Strategic Planning and Branding

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Md. Anwar Hossain ChowdhuryAVP & Head of IT

Md. MahamudunnabiHead of Consumer Finance

Md. MainuddinAVP & Head of SAM

Md. Monjur RashidHead of Legal Affairs

SENIOR EXECUTIVES OF CVC FINANCE

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Mr. Shouman Sinha Head of Liability Unit-1

Md. Shamim AktarHead of Liability Unit-2

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MESSAGE FROM MANAGING DIRECTOR

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Dear ShareholdersThe year 2021 marked the beginning of our recovery from the pandemic’s consequences. The years of hard effort we put in to become the country’s one of the most passionate financial brands put us in a good position to meet the unprecedented crisis, allowing us to prosper even in the face of a global epidemic. CVC Finance had a great year. At the end of 2021, the credit portfolio had grown by 3.83% year-over-year (YoY), in a very difficult year. Customer deposits increased by 15.96% YoY to BDT 1,770.55 million in 2021.The company increased total operating income by 44.1% year over year to BDT 281.89 million, owing to maintaining a healthy spread, portfolio growth, and return from stock market investment. Operating expenses increased by 12.81% YoY, resulting in a stunning 82.75% YoY increase in operating profit. After preserving surplus provisioning to cover bad loans, net profit after tax increased by 60.18% to BDT 47.58 million in 2021 from BDT 29.71 million in 2020.

YEAR-END HIGHLIGHTSThis section is about the Covid19 Pandemic, its impact on the economy, governmental and private sector responses to the crisis, government stimulus initiatives, regulatory disturbances, and bulls and bears’ attitudes in the financial market.

COLLECTION AND PORTFOLIO QUALITYWe have focused our business resources on collections in 2021. To ensure efficient monitoring of irregular loan accounts, a separate SAM department was established in 2020. Due to COVID, recovery was seriously affected and getting steady inflow was very difficult. Debt moratorium circulars on the other hand, had a significant impact on loan recovery and collections. Due to COVID, government supported businesses by allowing them minimum payment to Banks and FI’s for a period of two years. Once this facility was lifted many business concerns failed to make regular payments. This is one of the major reasons of increase in NPL percentage. At the same time, some corporate businesses were in a vulnerable position before COVID that has worsened as an impact of the pandemic. As a result, CVC Finance’s NPL increased to 11.61% at the end of 2021, way below the industry average of 19.33% (as quoted in national dailies), thanks to collections from regular and overdue accounts, as well as recovery from loan restructuring under Bangladesh Bank circular letter no. 05 & 06/2020. As needed, adequate loan loss provisions have been established.Until the third quarter of 2021, the lending possibility was rather limited. We have disbursed a total of BDT 542 million in 2021. We had a loan book of BDT 4,129.38 million at the end of the year.

FINANCIAL HIGHLIGHTSAfter the pandemic crisis, our stakeholders, particularly depositors and lending partners, had faith in our commitment, which is commendable given our balance sheet and profitability. Pre- and post-lockdown economic conditions put our prudence and tactical agility to the test, as we had to deal with dry and liquid industries, be tactical in bearish and bullish capital markets, compete with banks and NBFIs for asset spread, and be persistent to keep collection pace, asset quality, and regulatory compliance. Our standalone net profit climbed to BDT 47.58 million in 2021, up by BDT 17.87 million from the previous year’s net profit, contributing to BDT 0.40 standalone EPS, up from BDT 0.25 in 2020, which is 60% higher than previous year. In 2021, the standalone Return on Assets and Return on Equity were 0.83% and 3.70%, compared to 0.54% and 2.35% in 2020.

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LIQUIDITY MANAGEMENTDuring the first half of 2021, the financial sector faced unstable liquidity situation. Our deposit operations remained fully operational to serve our deposit clients. Despite the fact that loan recovery and collections were substantially hampered by debt moratorium circulars, we prioritized serving our deposit clients during this difficult time. With a commendable performance from Team CVC, we have been able to attract good number of retail and corporate deposits as well as retained most of our existing customers. Our concrete efforts to increase deposit mobilization and improve liquidity enabled us to retain a deposit portfolio of BDT 1,770.55 million at the end of 2021. Regularizing bank payments was another primary aim, in addition to satisfying deposit clients.

REVENUEAs the number of transactions increased in the last two months of 2021, the capital market turned optimistic. Low loan appetite, however, reduced asset volume, which, along with a pric-ing war among competitors, resulted in a slight 4.05% rise in interest income, which was BDT 523.13 million in 2021 compared to BDT 502.76 million in 2020. Furthermore, 72.16% of revenue came from interest income, 21.06% from other operating income, 1.09% from commission bro-kerage, and 5.68% from investment. At the same time, outstanding portfolio rose 3.83% to BDT 4,129.37 million, compared to BDT 3,977.21 mil-lion in the last year.

PROFITABILITYAfter being hammered by the epidemic, the cen-tral bank has given flexibility of repayment to borrowers to help all type of business concerns. The capital market turned positive in the latter several months of 2021, lowering the provision charge for investment depreciation by 530.70% compared to 2020. In 2021, we will have a slight rise standalone in operating expenses by 12.81% when compared to 2020. CVC Finance man-aged the existing portfolio as well as added earning asset. On the other hand, we managed to get good return against the primary and sec-ondary market investment in stock market. At

the same time, we have managed operational costs efficiently. All of these resulted in better profitability for the company. Net Profit after tax is 47.58 million which is 17.87 million (60%) higher than previous year.

ROA AND ROEReturn on Asset and Return on Equity both showed a positive trend in 2021. Our Return on Assets (ROA) for the year 2021 was 0.83%, up from 0.54% in 2020, indicating increased profit-ability throughout the asset base. The return on equity was 3.70% in 2021, up from 2.35% in 2020, indicating increased profitability over the equity basis.As a result, we have maintained an upward trend in recent years. This has been possible as a reflection of visionary leadership from the top management and tireless effort of the entire team.

EPSIn 2021, earnings per share (EPS) were BDT 0.40, up from BDT 0.25 in 2020. Our dedication to in-creasing shareholder wealth is demonstrated by 60% growth in EPS in the year 2021.

TECHNOLOGY ADVANCEMENTThe Company’s initial approach to the Pandem-ic was to give life-saving actions top priority. It modified its business model and moved to re-mote working. During 2021, a large number of CVC Finance personnel worked remotely during various time of the year depending on the severity of COVID situation, resulting in var-ious adjustments to their procedures and con-trol environment, indicating the strength of our IT infrastructure. In addition to leveraging VPN technology to operate remotely and a Remote Attendance System, the company has also digitalized the procedure as much as possible. It’s worth noting that in 2022, we have gained ISO27001:2013 certification at the beginning of 2022. This certification indicates that the organi-zation has met all the requirements for informa-tion security management with high confidence.

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HUMAN RESOURCES Human resources, according to CVC Finance Limited, are the foundation upon which the company’s success and productivity are built. CVC Finance continues its policy of recruiting the best and implementing continual programs to develop, motivate, and retain its brilliant and capable human resources since human resources are one of the company’s critical success elements. CVC Finance’s commitment to a fair and healthy working environment obligates it to maintain an unbiased/impartial approach in all aspects of its operations, which means it is free of all forms of discrimination based on gender, age, race, national origin, religion, marital status, or any other basis not prohibited by law. This increases task efficiency and aids. Thus, employees are able to realize their full potential.

INTERNAL CONTROL SYSTEMCVC Finance has a good internal control system in place. In terms of operations, business processes, financial reporting, fraud prevention, adherence to relevant rules and regulations, and so forth. Internal controls and systems are designed as part of good governance principles and are applied within the context of suitable checks and balances. Our Company ensures that a reasonably effective internal control framework operates throughout the organization, providing assurance in terms of asset protection, financial and operational data reliability, compliance with applicable statutes, transaction execution as authorized, and adherence to the Company’s internal policies.

STRATEGYIn the shifting economic landscape, CVC Finance has a variety of issues, including sustaining margin, dealing in a competitive market, maintaining asset quality, ensuring collection, dealing with volatile interest rates, and fee income, and optimizing operating capacity.To meet long-term lending requirements, we are focusing on secure funding arrangements such as bonds, foreign funding, and term deposits for more than 12 months. We place a premium on a rigorous collection and monitoring approach, focus on asset quality and cash flow generating

capacity when selecting clients because we want to maintain strong asset quality and keep NPL within acceptable limits. This epidemic is being viewed by CVC Finance as an opportunity to rethink and reinvent the company in order to assure increased production, effectiveness, efficiency, and sustainability. The Company is working to convert its current business model to a fintech-based business model and to contact clients as much as possible digitally, from business sourcing through after-sales service.While we will increase our technology investments to maintain seamless operations and customer service and become a fintech-based business in 2022, cost efficiency will remain one of our key priorities. We intend to broaden our geographic reach by implementing the hub and spoke strategy successfully. We will establish few branches across the country that will be monitored by the head office using this strategy. This method will not only enable massive business growth but will also assist the company in considerably lowering its cost to income ratio, resulting in a higher bottom line.

CODES AND STANDARDSThe Company has implemented various Bangladesh Bank and Bangladesh Securities and Exchange Commission codes, standards, and policies, including the Know Your Customer (KYC) Guidelines, Anti-Money Laundering Guidelines, Asset Liability Management Guidelines, Codes of Conduct for Employees and Directors, HR Policies, IT Policies, and Treasury Manual, CRM Manual among others. The Company has processes in place to review and monitor adherence to these codes and standards, as well as to ensure that reporting and compliance requirements are met.

CONCERNS REGARDING OUR EMPLOYEES AND CUSTOMERSEfforts have been made to guarantee our employees’ safety while doing their tasks during the COVID-19 pandemic. For the betterment and safety of our employees, we implemented a work-from-home policy. We have provided our staff with the necessary skill sets and technical help so that they can work from home without

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being interrupted. Many of our coworkers were experiencing COVID-19-related symptoms at the time. We advised them to segregate themselves in order to prevent the infection from spreading. We’ve been in touch with our coworkers about their health and made sure they’re staying positive during this trying period. At the same time, we concentrated more on online security for our clients’ security. During the COVID pandemic, we guaranteed that our service was delivered to our customers’ doorsteps. Every day, we strive to improve our customer service.

CSROur initiatives reflected our ongoing commitment to sustainability. To further promote sustainability, we have directed our CSR to programs that will empower individuals to freely create value for themselves and the community at large.We signed an arrangement with Bangladesh Cancer Aid Trust in 2021 to financially support three of their cancer survivors on a monthly basis. CVC Finance hopes to work with them again in the future. Aside from that, CVC Finance has donated the furniture and fixtures required for JAAGO Foundation’s new classrooms. As part of our Corporate Social Responsibility, we are happy to work with these two organizations in 2021.

FUTURE STEPSI take great pride in the resilience and commitment that we have shown during the last two years of turmoil. Despite adopting cautious practices in our lending business, we were able to hold on to a trend of steady financial performance. This was possible due to both the faith that our customers had in us and the dedication with which our employees served our customers. In 2022, we foresee the global economic growth receding as the excess demand in the market dries up due to challenges such as increased inflation, debt and income inequality, posed by the pandemic. The World Bank has forecasted a

global GDP growth rate of 6.40 percent in 2022. In line with the global economy, Bangladesh’s economy might see a similar deceleration despite alternative efforts. To ensure that we survive the upcoming challenges, the Board will continue to guide management in maintaining the balance between capitalizing on growth potentials and the enforcement of subsequent risk controls. We will also focus on building a robust balance sheet through quality loan book growth, diversification in the liability basket, and onboarding more retail depositors. We will also undertake the necessary technological innovation and process improvements required to stay ahead of the curb. With strong, adaptable policies in place and maintenance of the highest level of corporate governance, we are confident that we will weather the pandemic deftly.As we look forward, we believe that there is enormous opportunity for smaller ticket loans and deposits. Addressing these opportunities, we plan to develop our operational processes further to support high volume businesses with greater efficiency, increase our geographic presence across the country, and design products and channels for the unbanked population. While these investments might seem to be costly in the short run, but these will help improve our value generation capacity in the long term and cater to the needs of mass people. Like last year, keeping those intentions in mind, our focus will also remain on: Growth focus in lending business while maintaining quality, liability portfolio in terms of tenor and composition, enhancement on technology and process improvement, capital market operations, community initiatives.Though growth potential seems to be high, we intend to focus more on sustainability and we believe, our well-grounded management principles and our commitment to strong governance will aid us achieve it.

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APPRECIATIONThe synergy of unwavering contributions from all of our stakeholders puts us on the road to long-term growth, increasing our confidence in attaining long-term sustainability and superior returns. I appreciate the contributions of the Board of Directors, members of the Management Committee, and all members of our staff. I also appreciate the continuous support of Bangladesh Bank, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited, National Board of Revenue, and all other regulators applicable for an FI.Finally, none of this would have been possible without the continued support of our investors, loyal customers, and other stakeholders in the CVC Finance brand. We are excited to continue our path toward mutual growth and success, and we hope that we will be able to work together to overcome the negative effects of the COVID pandemic.

Syed Minhaj AhmedManaging Director

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ORGANOGRAMOF THE COMPANY

72

DEPARTMENTS OFCVC FINANCE LIMITED

73

74

75

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M/S JANATADRISTI BITAN

Since 2003, M/S Janata Dristi Bitan has been selling and fitting various types of optical glass as a sole business. Mr. Md. Akram Hossain, the owner of M/S Janata Dristi Bitan, is a well-known businessman in Dhaka’s Green Super Market. The owner imports several types of glasses from China and sells them on the local market. At first, the client was merely interested in trading several types of spectacles.

However, the journey was not without its difficulties. In 2015, he purchased a second-hand power setting equipment and utilized it to adjust the power in his spectacles. His lenses, on the other hand, did not fare well in a competitive market. He considered acquiring a high-quality equipment from China after two years. He couldn’t, however, afford it. He then made contact with a number of banks and financial entities. However, he received blank answer from everyone. He began the process of importing the equipment with some personal funds and borrowings from close relatives. In February of 2017, his cargo was canceled owing to a financial issue.

Finally, on the advice of a friend, he came to CVC Finance Limited and spoke with our officials about the current state of his firm. CVC Finance Limited has long been a name associated with modest but

promising parts of small business in the country, as well as the notion that “unique in developing new entrepreneurs.” After an easy process, Mr. Akram Hossain received his first loan for Tk. 5,00,000 (5 lac). He benefitted financially as a result of the loan. He was able to repay the debt on schedule.

Because the shop was closed for several months during the epidemic, the proprietor was unable to effectively control operational costs. Mr. Akram Hossain was in need of some financial assistance to overcome this new challenge. Under the stimulus package, CVC Finance Limited took the initiative to give him with Working Capital Finance to help him manage his operational expenditures. His stock, sales, and profit have all improved as a result of his effective use of the money. At the moment, this shop employs 45 people.

We are delighted that M/S Janata Dristi Bitan contributes to GDP growth while also employing more than 45 people, despite the fact that the initial employee count was only ten.

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78

MANAGEMENT DISCUSSION

ANDPERFORMANCE ANALYSIS

79

STRATEGY AND RESOURCE ALLOCATION

After discussing the various operating environment pressures, it is essential that we present to our stakeholders the specific pressures that influence our business model and our ability to adapt to these fundamental forces. We’ll also go over any changes we think our business model needs to make to address the challenges we’re facing or to capitalize on the opportunities presented by shifting market dynamics and our strategies.

Our financial performance analysis is provided under Performance Analysis with the Management Committee, which is summarized in the context of the operating environment, with an explanation of our strategic responses in the Managing Director’s Statement. Meanwhile, the Chairman’s Message provides a higher-level perspective.

STRATEGIC PROGRESSION

The long-standing ethos at CVC Finance has been for the Chairman and the Board of Directors to provide direction and serve as the custodian of corporate governance, acting as an enabler to allow the management team to pursue the company’s mission.

In retrospect, analyzing CVC Finance’s history demonstrates how successive management teams made crucial decisions to sustainably drive growth.

CVC Finance has strategic partnerships with local stakeholders and international organizations such as OXFAM, UK Aid, DFID, and the UN Capital Development Fund (UNCDF). The company is collaborating with these global partners to deliver financial services to the bottom of the pyramid.Although the years 2020 and 2021 were outliers, we are still in the midst of a global public health crisis that has resulted in major humanitarian and economic issues, and has left a lasting imprint on many of us. Despite the tough economy, the corporation has managed to keep its net income positive.

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Performance 2020 2021(standalone) 2021(group)

Net Interest Income

Non-Interest Income

Operating Income

Operating Expenses

Cost to Income

PBT&P

Provisions

PBT

Profit After Tax

ROA

ROE

66.47

129.17

195.64

108.15

55.28%

87.49

16.11

71.37

29.71

0.54%

2.35%

203.42

78.47

281.89

122.01

43.28%

159.88

83.89

76.00

47.58

0.83%

3.70%

203.42

89.61

293.03

130.29

44.46%

162.74

83.89

78.85

49.41

0.87%

3.60%

Figures in Million BDT

STRATEGY SIGNIFICANCE OUTCOMES

Deposit mobilization cleared the way for corporate expansion with better control over fund management and reduce dependency on borrowing from banks.

Performance Analysis with the Management Committee:Term depositsNon-bank depositsNet deposit in Banks

Consumer and SME financing rather than catering solely to corporate clients assisted them in moving into less congested areas and gaining an early movers’ edge.

Business Segment Reviews:SME, Consumer,Corporate

Capital market operations allowed for business diversification beyond lending and significant profit-booking during several market cycles

Business Segment Reviews: CAPM Advisory LimitedCVC Brokerage Limited

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PRESENT ALLOCATION OF ASSETS

Within a very short span of time, CVC Finance has established two subsidiaries to cater to the needs of its existing as well as future clients by way of leveraging its current operations and diversifying the revenue streams.

CVC FINANCE LIMITED

60% 100%

CAPM ADVISORY LIMITED CVC BROKERAGE LIMITED

Particulars

Particulars

AssetComposition

Portfolio Composition

Profit Composition

Profit Composition

2020 2021

2020 %

2020 2021

2021 %

CVC Finance Limited

CAPM Advisory Limited

CorporateSMEConsumerLoan against depositStaff Loan

Total

Figures in Million BDT

Figures in Million BDT

5473.93 5758.83

- 239.79

3,298.92268.54190.35214.195.22

3,977.22

82.95%6.75%4.79%5.39%0.13%

100%

29.71 47.58

- 1.59

3,657.40221.42162.4983.154.92

4,129.38

88.57%5.36%3.93%2.01%0.12%

100%

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KEY OPERATING AND FINANCIAL

PERFORMANCE ANALYSIS

Being hit by the second wave of the global pandemic, 2021 has continued to be a year of setbacks. Unstable operating environment, lower business opportunities, stressed margins & constrained collections have posed severe challenges for our lending business, particularly amidst the lockdown. However, well-timed strategic maneuvers and prudent decisions by management teams enabled us to maintain our position and deliver solid financial results.

The following section contains detailed analysis of our financial performance.

Compared to year 2020, our loan portfolio grew by 3.83% or BDT 152.16 mn and reached to BDT 4,129.38 mn on 31 December 2021.

Compared to year 2020, deposit base increases by 5.48% or BDT 83.64 mn and reached to BDT 1,610.55 mn on 31 December 2021.

Net Profit after Tax increases by 66.34% or BDT 19.70 mn from previous year.

From the shareholders’ point of view, CVC Finance’s Earnings per Share stood at BDT 0.40 per share in 2021 (BDT 0.42 of Group EPS) whereas it was 0.25 in 2020.

In 2021, Capital Adequacy Ratio was 24.18%, well above the requirement of 10% and over the years we have been able to maintain CAR above the regulatory requirement.

We could not keep the NPL ratio where we would have liked to but 11.61% in 2021 is still way below the industry average of over 19.33%.

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CVC FINANCE GROUP

Performance 2017 2018 2019 2020 2021

Net Interest Income

Non-Interest Income

Operating Income

Operating Expenses

Cost to Income

PBT& Provisions

Provisions

PBT

Profit After Tax

EPS

ROA

ROE

83.1

88.07

171.17

71.27

41.64%

99.9

29.51

70.39

40.80

0.39

1.10%

3.70%

109.14

126.33

235.47

101.14

42.95%

134.33

20.31

114.02

71.13

0.68

1.30%

6.14%

36.9

174.43

211.33

99.69

47.17%

111.64

49.23

62.41

37.44

0.32

0.66%

3.04%

66.47

129.17

195.64

108.15

55.28%

87.49

16.11

71.37

29.71

0.25

0.54%

2.35%

203.42

89.61

293.03

130.29

44.46%

162.74

83.89

78.85

49.41

0.42

0.87%

3.60%

Figures in Million BDT

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CVC FINANCE LIMITED

Performance 2017 2018 2019 2020 2021

Net Interest Income

Non-Interest Income

Operating Income

Operating Expenses

Cost to Income

PBT& Provisions

Provisions

PBT

Profit After Tax

EPS

ROA

ROE

83.1

88.07

171.17

71.27

41.64%

99.90

29.51

70.39

40.80

0.39

1.10%

3.70%

109.14

126.33

235.47

101.14

42.95%

134.33

20.31

114.02

71.13

0.68

1.30%

6.14%

36.9

174.43

211.33

99.69

47.17%

111.64

49.23

62.41

37.44

0.32

0.66%

3.04%

66.47

129.17

195.64

108.15

55.28%

87.49

16.11

71.37

29.71

0.25

0.54%

2.35%

203.42

78.47

281.89

122.01

43.28%

159.88

83.89

76.00

47.58

0.40

0.83%

3.70%

Figures in Million BDT

85

In 2021, total Operating Income (Net Interest Income + Non-Interest Income) increases to BDT 293.03 mn, reflecting a grew by 49.78% from 2020. Interest expenses on borrowings, deposits is 61.12% of Interest Income in 2021 whereas it was 86.78% in 2020. Gain from Investment in Shares is Tk. 15.66 mn in 2021 whereas it was 1.63 mn in 2020. This may lead to increase in total operating income in 2021. Hence Cost to income also decreases to 44.46% in 2021.Maintenance of loan portfolio at the same level requiring lower incremental general provision to be reserved. Provisions have been maintained for classified loans as per the provisioning policy set forth by the Central Bank. Incremental provision of BDT 83.89 mn was charged during the year, which was BDT 67.78 mn higher than that of 2020. In 2021, Operating Expenses stood at BDT 130.29 mn. While Operating Income increases by 49.78%

and Operating Expenses grew by 20.47% resulting a lower Cost to Income ratio of 44.46%, compared to 2020 which is increases over the last 4 years since 2017. Cost to Income ratio significantly decreases from 55.28% in the year 2021 due to higher operating Income.

The management team has putting continuous efforts at scalability to reduce loan acquisition and management cost while improving operational efficiency, developing process so that the expenses of this year decreases at a reasonable level and reflected in Cost to income ratio.

Subsequently, CVC Finance recorded a Profit After Tax (PAT) of BDT 49.41 mn; delivering a Return on Asset (ROA) of 0.87%and Return on Equity (ROE) of 3.60%.

OPERATING INCOME (IN MILLION BDT)

2017

2018 2019 2020 2021

171.17

195.64211.33

235.47

281.89

PROFITABILITY, EXPENSES AND PROVISIONS:

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COST TO INCOME RATIO

RETURN ON EQUITY

2017 2018 2019 2020 2021

41.64% 42.95%47.17%

55.28%

44.46%

2017 2018 2019 2020 2021

3.70%

6.14%

3.04%2.35%

3.70%

PBT PROFIT AFTER TAX

PROFIT BEFORE & AFTER TAX

70.39

114.02

40.8

71.371.37

76.00

47.5862.41

37.4429.71

2017 2018 2019 2020 2021

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SHAREHOLDER’S EQUITY (IN MILLION BDT)

2017 2018 2019 2020 2021

1123.70

1194.82

1232.27

1261.98

1372.91

LENDING PORTFOLIO, CREDIT QUALITY AND RECOVERY:In 2021, we maintained a well-diversified credit portfolio mostly concentrating on Corporate Finance. Considering the tough operating environment, we diverted our focus more towards collection rather than targeting portfolio growth to counter the increased level of credit risk and limit erosion in portfolio quality. Separate SAM department (earlier known as BSMR) created to ensure efficient management of irregular loan accounts. However, loan recovery and collections severely affected due to debt moratoriums circulars. Our all-out efforts helped to keep the non-performing loan ratio below the industry average. Subsequently our provision coverage ratio came down for the year 2021 compared in the preceding year. We have disbursed total BDT 533.02 mn including BDT 150 mn in CAPM Advisory Limited whereas it was 144.54 mn in previous year. We ended the year with a loan book of BDT 4,129.38 mn.

Our funding base grew by 1.35% in 2021 and moved to BDT 3.75 bn from BDT 3.70 bn in the previous year. Term Deposits comprises 40.33% of the funding basket, Increased by 5.88% in 2021. The NBFI sector went through highly uncertain liquidity scenario during the first half of 2021. To serve our deposit clients, our deposit operations fully remained functional. Even though, loan recovery and collections severely affected due to debt moratoriums circulars, servicing our deposit clients in this distress time was our one of the upmost priorities. Our all-out efforts towards deposit mobilization and improve the liquidity condition helped us to maintain a deposit portfolio of BDT 1.61 bn at the end of 2021.

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LOANS & ADVANCES (IN MILLION BDT)

TOTAL DEPOSITS (IN MILLION BDT)

2017 2018 2019 2020 2021

2103.29

2051.011661.49

1526.911610.55

2017 2018 2019 2020 2021

4057.61

4261.69

4133.96

3977.22

4129.38

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ASSET STRATEGY:

CONSOLIDATED CASH FLOW STATEMENT ANALYSIS:

DEPOSIT/LIABILITY STRATEGY:

Increase Fee based income through Corporate Services.

Diversified Revenue Stream through associated businesses.

Explore Digital Finance Channels.Focus on Quality Asset Portfolio while increase profitability.

Diversification & Balanced Sectorial approach to reduce concentration risk.

Refinance based financing for SME.

Emphasis on asset-backed financing (Auto Loan & Home Loan).Maintain NPL Ratio within target level.

Dedicated Customer Service Team for deposit customers to offer better customer experience.

Focus on customer tailored wealth management solutions for High Net worth Individual customer segment.

Continuous efforts at scalability to reduce loan acquisition and management cost while improving operational efficiency.

Particulars 2021 2020

(A) Net cash from operating activities

(B) Net cash used in investing activities

(C )Net cash from financing activities

(D) Net increase/(Decrease) in cash and

cash equivalents (A+B+C)

(E ) Cash and cash equivalents at

beginning of the year

F) Cash and cash equivalents at the end of

the year (D+E)

(G) Net operating cash flow per share

(NOCFPS)

205.92

(168.61)

(125.95)

(88.64)

1,359.26

1,270.62

1.73

(45.73)

(12.05)

57.26

(0.52)

1,342.94

1,342.42

(0.40)

Figures in Million BDT

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CASH FLOW FROM OPERATING ACTIVITIES Net cash inflow from operating activities in 2021 was BDT 205.92 mn which was BDT (45.73) mn in the preceding year. The pandemic situation slowed down business activity, resulting in moderate disbursement compared to the previous year. Moratoriums provided to some clients due to the pandemic reduced cash inflows to an extent. However, constant collection efforts, deposit growth due to flight to safety, interest income from investment in government securities and capital gain from trading of the same led to a superior cash position.

CASH FLOW FROM INVESTING ACTIVITIES The cash flow from investing activities moved to BDT (168.61) mn from BDT (12.05) mn due to investment of Tk. 150 mn to acquire subsidiaries to further strengthen the Balance Sheet by enhancing the company’s excess liquidity position.

CASH FLOW FROM FINANCING ACTIVITIES Net cash flow from financing activities to BDT (125.95) mn at the end of 2021 from BDT 57.26 mn in 2020. Overall, the cash and cash equivalent balance of the group remained at BDT 1,270.62 mn compared to 1,342.42 mn in previous year. Despite to investments of Tk. 150 mn in subsidiaries, cash and cash equivalents decreases of Tk. 71.80 mn in 2021.

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HORIZONTALAND VERTICAL ANALYSIS

Horizontal Analysis

PARTICULARS2017 2018 2019 2020 2021

PROPERTY AND ASSETS

Cash 135.64% 39.92% -18.45% -44.25% 2.11%

Cash in hand (including foreign currencies) 1406.28% -42.13% -1.02% 50.92% -63.02%

Balance with Bangladesh Bank & and its agent banks 134.30% 40.47% -18.50% -44.57% 2.71%

(Including foreign currencies)

Balance with other banks and financial insti-tutions 5.52% 6.14% 9.70% 1.25% -5.66%

In Bangladesh 5.52% 6.14% 9.70% 1.25% -5.66%

Outside Bangladesh - - - - -

Money at Call on Short Notice - - - - -

Investments 100.00% 2117.74% -68.74% 1402.90% 1102.95%

Government - - - - -

Others 100.00% 2117.74% -68.74% 1402.90% 1102.95%

Loans, advances and leases 340.45% 5.03% -3.00% -3.79% 3.83%

Loans, cash credits, overdrafts, leases etc. 340.45% 5.03% -3.00% -3.79% 3.83%

Bills purchased and discounted - - - - -

Fixed assets including premises, furniture and fixtures

189.92% -13.53% 22.02% -13.24% 12.89%

Other assets -19.63% 55.11% 23.60% -9.98% 50.75%

Non-business assets - - - - -

Total assets 154.01% 6.05% 0.12% -2.87% 5.20%

Amount In Percentage

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LIABILITIES AND CAPITAL

Liabilities

Borrowings from other banks, financial insti-tutions and agents 850.52% 8.57% 6.38% -2.70% -1.59%

Deposits and other accounts 176.26% -2.49% -18.99% -8.10% 15.96%

Current deposits - - - - -

Bills payable - - - - -

Savings deposits - - - - -1.25%

Term deposits 165.31% -2.22% -18.98% -8.86% 17.08%

Bearer certificates of deposits - - - - -

Other deposits 705.31% -6.79% -19.19% 3.78% -0.37%

Other liabilities 248.11% 93.58% 79.88% 0.67% 10.07%

Total liabilities 315.61% 5.97% -0.69% -4.35% 6.18%

Capital/Shareholders’ equity 3.77% 6.33% 3.13% 2.41% 1.94%

Paid-up Capital - 0.00% 10.00% 0.00% 3.00%

Statutory reserve 109.81% 91.24% 25.12% 15.92% 22.00%

Revaluation reserve - 0.00% 0.00% 0.00%

Retained earnings 128.18% 97.93% -65.25% 59.46% 30.89%

Non Controlling Interest - 0.00% 0.00% 0.00% 0.00%

Total liabilities & Shareholders’ equity 154.01% 6.05% 0.12% -2.87% 5.20%

Net Asset Value per share (NAV) 3.78% 6.36% -6.24% 2.44% 1.10%

** Horizontal Analysis of Balance Sheet refers to the analysis of growth of each component of Balance Sheet items from the previous period

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Horizontal Analysis

Particulars2017 2018 2019 2020 2021

Interest income 240.81% 72.59% -10.43% 2.07% 4.05%

Less: Interest expenses on borrowings, deposits etc.

816.86% 87.14% 3.37% -4.25% -26.72%

Net interest income 22.56% 31.33% -66.19% 80.11% 206.05%

Investment income - -3.53% -66.36% -8.25% 862.56%

Commission, exchange and brokerage 586.99% 77.61% 143.80% -46.43% -87.21%

Other operating income 583861% 42.18% 24.60% -19.00% -42.62%

5692.15% 43.45% 38.08% -25.95% -39.25%

Total Operating income 146.91% 37.56% -10.25% -7.43% 44.09%

Salaries and allowances 154.13% 72.32% 6.97% 9.38% 6.40%

Rent, taxes, insurances, electricity etc. 14.27% 7.93% 6.63% 1.41% -0.15%

Postage, stamps, telecommunication etc. 335.41% -6.65% -18.55% -7.39% 100.26%

Stationery, printings, advertisements etc. 98.05% 77.08% 25.87% -61.23% 15.70%

Managing Director’s salary and allowances 0.49% 0.00% -61.64% 98.02% 2.01%

Directors’ fees 29.55% -4.55% 4.08% -22.22% 59.66%

Auditors’ fees 84.00% 8.70% 38.00% 11.11% 50.00%

Depreciation and repair of company’s assets

354.03% 25.82% 5.14% 42.43% -3.65%

Other operating expenses 42.86% 48.23% -15.62% -14.47% 214.14%

Total operating expenses 67.87% 41.92% -1.43% 8.49% 12.81%

Profit before provision 271.78% 34.46% -16.89% -21.64% 82.75%

Provision for loan, advances and leases 240.33% -31.18% 141.55% -67.26% 409.18%

Provision for diminution in value of invest-ments

- - - -71.26% -530.70%

Provision for Legal fee Receivable - - - - -

Total provision 240.33% -31.18% 142.41% -67.27% 420.63%

Profit before taxes 286.76% 61.98% -45.27% 14.37% 6.48%

Provision for taxation 282.52% 44.96% -41.80% 66.92% -31.81%

Amount In Percentage

94

Current tax 282.52% 44.96% -41.80% 66.92% -31.81%

Deferred tax 100.00% - - - -

Net profit after taxation 289.90% 74.32% -47.36% -20.67% 60.18%

Earning Per Share (EPS) 290.00% 74.36% -52.94% -21.88% 60.00%

** Horizontal Analysis of Balance Sheet refers to the analysis of growth of each component of Balance Sheet items from the previous period

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Vertical Analysis

PARTICULARSAmount in Percentage

2017 2018 2019 2020 2021

PROPERTY AND ASSETS

Cash 0.63% 0.83% 0.68% 0.39% 0.38%

Cash in hand (including foreign currencies) 0.00% 0.002% 0.002% 0.004% 0.001%

Balance with Bangladesh Bank & and its agent banks

0.62% 0.83% 0.67% 0.38% 0.38%

(Including foreign currencies)

Balance with other banks and financial institu-tions 21.11% 21.13% 23.15% 24.14% 21.87%

In Bangladesh 21.11% 21.13% 23.15% 24.14% 21.87%

Outside Bangladesh - - - - -

Money at Call on Short Notice - - - - -

Investments 0.00% 0.05% 0.02% 0.24% 0.76%

Government - - - - -

Others - 0.05% 0.02% 0.24% 0.76%

Loans, advances and leases 76.45% 75.71% 73.35% 72.66% 72.30%

Loans, cash credits, overdrafts, leases etc. 76.45% 75.71% 73.35% 72.66% 72.30%

Bills purchased and discounted - - - - -

Fixed assets including premises, furniture and fixtures

0.57% 0.47% 0.57% 0.51% 1.02%

Other assets 1.24% 1.81% 2.23% 2.07% 3.67%

Non-business assets - - - - -

Total assets 100.00% 100.00% 100.00% 100.00% 100.00%

LIABILITIES AND CAPITAL

Liabilities

Borrowings from other banks, financial institutions and agents 36.46% 37.33% 39.67% 39.74% 37.48%

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Deposits and other accounts 39.63% 36.44% 29.48% 27.89% 28.20%

Current deposits - - - - -

Bills payable - - - - -

Savings deposits - - - 0.01% 0.01%

Term deposits 35.16% 34.38% 27.82% 26.11% 26.49%

Bearer certificates of deposits - - - - -

Other deposits 2.21% 2.06% 1.66% 1.78% 1.70%

Other liabilities 2.58% 5.00% 8.99% 9.31% 10.29%

Total liabilities 74.34% 78.77% 78.13% 76.95% 75.96%

Capital/Shareholders’ equity 19.96% 21.23% 21.87% 23.05% 24.04%

Paid-up Capital 18.65% 18.65% 20.49% 21.10% 20.83%

Statutory reserve 0.28% 0.53% 0.66% 0.79% 0.92%

Revaluation reserve - - - - -

Retained earnings 1.03% 2.04% 0.71% 1.16% 0.79%

Non Controlling Interest - - - - 1.50%

Total liabilities & Shareholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00%

** Vertical Analysis of Balance Sheet refers to the components of Balance Sheet items as a % of total Assets over the periods which would be termed as common sizing of Balance Sheet.

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Vertical Analysis

Particulars2017 2018 2019 2020 2021

Interest income 186.15% 233.55% 233.07% 256.99% 185.58%

Less: Interest expenses on borrowings, de-posits etc.

-137.60% -187.20% -215.61% -223.01% -113.42%

Net interest income 48.55% 46.35% 17.46% 33.97% 72.16%

Investment income 3.27% 2.29% 0.86% 0.85% 5.69%

Commission, exchange and brokerage 6.05% 7.81% 21.23% 12.28% 1.09%

Other operating income 42.13% 43.54% 60.45% 52.89% 21.06%

51.45% 53.65% 82.54% 66.03% 27.84%

Total Operating income 100.00% 100.00% 100.00% 100.00% 100.00%

Salaries and allowances 18.64% 23.35% 27.82% 32.88% 24.28%

Rent, taxes, insurances, electricity etc. 8.75% 6.87% 8.16% 8.94% 6.19%

Postage, stamps, telecommunication etc. 0.52% 0.35% 0.32% 0.32% 0.45%

Stationery, printings, advertisements etc. 0.72% 0.92% 1.29% 0.54% 0.43%

Managing Director’s salary and allowances 5.16% 3.75% 1.60% 3.43% 0.43%

Directors’ fees 0.72% 0.50% 0.58% 0.49% 0.54%

Auditors’ fees 0.04% 0.03% 0.05% 0.06% 0.06%

Depreciation and repair of company’s assets 2.80% 2.56% 3.00% 4.62% 3.09%

Other operating expenses 4.29% 4.62% 4.34% 4.01% 5.82%

Total operating expenses 41.63% 42.95% 47.17% 55.28% 43.28%

Profit before provision 58.37% 57.05% 52.83% 44.72% 56.72%

Provision for loan, advances and leases 17.24% 8.63% 23.21% 8.21% 29.01%

Provision for diminution in value of invest-ments

- - 0.08% 0.03% -0.08%

Provision for Legal fee Receivable - - - 0.82%

Total provision 17.24% 8.63% 23.30% 8.24% 29.76%

Profit before taxes 41.12% 48.42% 29.53% 36.48% 26.96%

Provision before taxation 17.29% 18.22% 11.81% 21.30% 10.08%

Current tax 17.29% 18.22% 11.81% 21.30% 16.88%

Deferred tax 0.07% - - - -

Net profit after taxation 23.84% 33.66% 17.72% 15.18% 16.88%

** Vertical Analysis of Profit & Loss Account refers to the components of Profit & Loss Account as a % of Operational Income

(Interest income + Investment Income) over the periods which would be termed as common sizing of Profit & Loss Account.

Amount In Percentage

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CVC FINANCE LIMITED AS ON DECEMBER 31, 2021Amount In BDT

Particular 2021 2020

Paid-up capital 1,189,650,000 1,155,000,000

Total capital (eligible) 1,000,000,000 1,000,000,000

Surplus/(shortage) capital 189,650,000 155,000,000

Total assets 5,758,830,184 5,473,934,544

Total deposits 1,770,551,073 1,526,914,126

Total loans, advances and leases 4,129,376,833 3,977,217,125

Total contingent liabilities and commitments - -

Loans to deposit ratio (total loans/total deposits) 2.33 2.60

% of classified loans against total loans 11.61% 4.66%

Profit after tax and provision 47,580,680 29,705,073

Classified loans, advances and leases during the year 479,513,457 185,401,727

Provisions kept against classified loans, advances and

leases190,384,523 123,613,855

Provision surplus / (deficit) against classified loans,

advances and leases

--

Cost of fund 8.76% 9.03%

Interest earning assets 4,129,376,833 3,977,217,125

Non-interest earning assets 170,644,264 113,196,045

Return on Investment (ROI) 1.15% 0.75%

Return on assets (ROA) 0.83% 0.54%

Income from investment 16,029,583 1,665,304

Operating profit per share 1.34 0.76

Earnings per share 0.40 0.25

Price Earnings Ratio 25.00 40.00

HIGHLIGHTS AS REQUIREDBY BANGLADESH BANK

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STAKEHOLDERANALYSIS

We acknowledge that we compete and operate on a foundation of trust and our stakeholders are the ultimate arbiters of our legitimacy, and thus therefore our sustainability.

Our stakeholders are those individuals or organizations who have a direct or indirect interest in our success or failure and whose opinions and actions can impact our ability to execute our strategy and conduct our business activities and without whose continuing participation, CVC Finance cannot survive as a going concern. For reporting purposes, we identified the following parties as our key stakeholders, from a sustainability perspective.

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Stakeholder

Stakeholder

INVESTORS / SHAREHOLDERS

CUSTOMERS

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

CVC FINANCE INFLUENCE ON STAKEHOLDER

CVC FINANCE INFLUENCE ON STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

Investors remain CVC Finance’s key stakeholder, who had invested capital and requires information on a continuous basis to track CVC Finance’s performance and achievements in enhancing shareholder wealth.

We consider customers as the most important element of CVC Finance’s existence, who remain interested as they transact with CVC Finance on an ongoing basis. It is important for CVC Finance to sustain business and build bonds with them and also to attract new customers.

High

High

High

High

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Stakeholder

Stakeholder

SUPPLIERS & BUSINESS PARTNERS

LENDERS

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

CVC FINANCE INFLUENCE ON STAKEHOLDER

CVC FINANCE INFLUENCE ON STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

Suppliers and Business partners have become increasingly important to CVC Finance with the expansion of its network and increasing requirements for stationery and other related supplies.

Funding providers, mostly CVC Finance banking partners are an important component of CVC Finance business as they support CVC Finance in meeting funding needs when the need arises. It is necessary to sustain a continued relationship, which will yield mutual benefit for both parties.

Medium

High

Medium

Medium

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Stakeholder

Stakeholder

REGULATORS(Bangladesh Bank, NBR, RJSC,

SEC, etc)

SOCIETY

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

CVC FINANCE INFLUENCE ON STAKEHOLDER

CVC FINANCE INFLUENCE ON STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

Funding providers, mostly CVC Finance banking partners are an important component of CVC Finance business as they support CVC Finance in meeting funding needs when the need arises. It is necessary to sustain a continued relationship, which will yield mutual benefit for both parties. CVC has zero tolerance to any regulatory breach.

Society has varying expectations of CVC Finance, especially from a broader sustainability perspective. Apart from financial needs, they require corporates to act in a socially responsible manner, for societal benefit.

High

Medium

Medium

Medium

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CVC Finance and its stakeholder’s relational influential matrix can

be chalked out as follows:

Stakeholder

Stakeholder

ENVIRONMENTAL GROUPS

BOARD MEMBERS

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

CVC FINANCE INFLUENCE ON STAKEHOLDER

CVC FINANCE INFLUENCE ON STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

IMPORTANCE OF STAKEHOLDER

In an era where the protection of the environment and its resources has become vital, CVC Finance considers environmental aspects of high importance, particularly when CVC Finance continues to build a greater presence across the country.

Board members are part of the investors/shareholders. But for the roles and responsibilities, Board members remain vital for CVC Finance’s success.

Medium

High

Low

High

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INFLUENCE BY CVC FINANCE ON STAKEHOLDER

INFLUENCE BY STAKEHOLDER ON CVC FINANCE

LOW MEDIUM HIGHSuppliers & Business

partners Society

Environmental Groups

Investors/ Shareholders Customers Employees

Board MembersLenders

Regulators

INVESTORS/SHAREHOLDERSInvestors/Shareholders are the providers of financial capital to the group.We strive to be a great place to invest – providing attractive and sustainable financial returns, protecting against downside risks and unlocking growth opportunities. At the same time, we will remain fully transparent in our communication and disclosure with the investment community.CVC Finance has a total of 17 shareholders with 94.00% domestic holding and 6.00% foreign holding.

Details of the shareholding structure are provided on page 24 of this report.

Relevant timeous information on our strategy, prospects and financial and non-financial performance so that the CVC Finance group can be fairly valued and appropriate credit ratings assigned.

Consistent financial performance, delivering attractive returns (increasing ROEs) and solid dividend income, underpinned by a sound balance sheet.

Good and experienced management.

An attractive and sustainable growth strategy.

Financing the aspirations of clients, while protecting against over indebtedness.

Providing convenient access to CVC Finance financial services with less complexity and improved flexibility.

Protecting clients and their assets through secured IT systems and infrastructure.

Providing value added services that are competitive and transparent in the pricing.

Providing sound financial advice and financial education.

Shareholder’s needand expectation

The core need of our shareholders are as follows:

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CUSTOMERSCustomers are the most important stakeholder for any organization. They are the resources upon which the success of our business depends. When thinking about valuing the customers we consider the following points:

Achieved economic value addition of BDT 162.08 million in 2021 Net profit was BDT 49.41 million.

CVC Finance achieved a net profit after tax of BDT 47.58 million on solo basis.

Paid a full-year dividend of 3.5%, 1% Stock dividend and 2.5% cash dividend.

Maintained world-class transparent reporting and increased our disclosure related to financial statements.

Experienced smooth leadership transitions, with one of the most experienced management teams in the NBFI industry of Bangladesh

CVC Finance is dependent upon its customers. If we do not develop customer loyalty and satisfaction, we could lose our customers.

Without customers, the existence of CVC Finance would not be justified.

The purpose of CVC Finance is to fulfill the needs of the customers.

The customer makes it possible to achieve our business aims.

How we delivered value to our shareholders in 2021?

106

The full spectrum of individual demographics in Bangladesh from entry-level to high-net-worth individuals.

Various legal entities from trusts, non-governmental organizations and associations, to small businesses up to the largest corporates and the public sector.

Those who are engaged with us even on single product classes, such as advance, deposit, asset management and investment or finance solutions.

Foreign traders who trade in the secondary market of Bangladesh.

Offering innovative solutions and services.Growing and protecting client investments and wealth.

Financing the aspirations of clients, while protecting against over indebtedness.

Providing convenient access to CVC Finance financial services with less complexity and improved flexibility.

Protecting clients and their assets through secured IT systems and infrastructure.

Providing value added services that are competitive and transparent in the pricing.Providing sound financial advice and financial education.

The emerging and commercial business unit constantly striving to provide innovative financial solutions to meet the working capital needs of our existing and prospective clients. With this intent, CVC Finance has designed products like Factoring, Reverse factoring, distributor finance, etc. Project and structured finance unit comprising of experienced professionals who are experts in conducting the technical, financial and economic feasibility of projects. Financial solutions like syndicated loans, preference shares, bonds, etc. are some of its wide arrays of services.

OUR CUSTOMERS

NEEDS AND EXPECTATIONS OF OUR CUSTOMERS

HOW WE DELIVERED VALUE TO OUR CUSTOMERS IN 2021?

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Growing and protecting client investments and wealth:Year on year Growth in Term deposit in 2021 is evidence of increasing clients’ confidence in us. We always focus on providing the best value for investment to our depositors by offering need-based liability products and attractive returns on their investments.

Providing convenient access to clients with less complexity and improved flexibility:All CVC Finance’s employees are well trained to deliver uncompromised client services. 24/7 helpline service is there to help our valued clients as and when required.

Protecting clients and their assets through secured IT systems and infrastructure. CVC Finance invested meticulously in its IT structure and committed to invest more in upcoming years to align with the latest state of the art technology for the smoothness of its operation, strengthen data security and ensure the protection of clients’ assets.

Providing competitive and transparent pricing and giving value back to clients. We always strive to ensure the best value for money for our clients using competitive pricing of our products and services.

We not only charge competitive interest to our asset clients but also ensure transparent and reasonable pricing for documentation and other fees.

EMPLOYEESEmployees are the most valuable resources of CVC Finance. We have always been very passionate about human capital management and take responsibility for developing employee potential and leveraging employee skills in the organization. CVC Finance continues to implement HR policies and practices that are aimed at growing and developing employees and ensuring their active contribution toward the achievement of corporate goals. CVC Finance believes that the skills and enthusiasm of its employees are a major force that helps it to achieve sustainable results.

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Needs and expectations of our staff

A central component of the achievement of our vision to be the most preferred financial service provider is delivering on our own sustainability objectives and commitments. Our staff play a key role in this, so we strive to create and maintain a positive and productive working environment that embraces and respects diversity and enables the personal and professional goals of all our employees. In achieving this, we engage constantly with our workforce to establish their priorities, needs and expectations. In 2021, the following were identified as our employees’ most significant needs and expectations:

How we deliver value to our staff

CAREER DEVELOPMENT OPPORTUNITIESAll employees of the company irrespective of their gender received formal performance and career development reviews during 2021. Annual performance reviews and the reviews conducted upon completion of probationary periods help the company in identifying and enhancing the salient skills and developing them as needed. A significant number of contractual employees have been absorbed under Management Cadre in 2021.

OUR INVESTMENT IN TRAININGTo further strengthen the staff development process, the company increased its concentration on training and development of employees. This concentration will also support our intensive efforts to improve customer experience across all business units, with long term benefits accruing to the company. In 2021, we have also launched an E-Learning training system for our Management Cadres.Given the company’s strong commitment to developing a learning culture, it is pertinent to note that employees underwent a total of 830 man-hours of training during the year 2021 on various knowledge-building programs compared to 75 man-hours in the year 2020.

EFFECTIVE PERFORMANCE MANAGEMENT AND RECOGNITIONIn CVC Finance, management is very much concerned about the performance management of its employees and ensuring proper recognition. CVC Finance has followed a systematic approach to the identification of high performers among its employees to motivate them with good incentive bonuses and promotions if deserved. Management also tends to identify the training needs of individual employees and through training, leadership competencies are identified and a pool of talent is created to serve the long-term needs of the Company.

Career development opportunities

Adequate training facilities

Effective performance management and recognition

Effective employee relations

A healthy and safe work environment

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Festival Bonus

Provident Fund

Staff loan facility at a concessionary interest rate

Home loan facility at a concessionary interest rate

Annual increment

Performance related bonus

Mobile allowance

Travel allowance & daily allowanceFuel allowance and transport allowance

‘Reward and Recognition’ is created to set up a systematic process of expressing appreciation for employees’ hard work, dedication and contribution to the company

CVC Finance plan, design and arrange various job specific soft skills and technical training based on individual need assessment and business requirement

E-Learning for all Management Cadres

We are committed to continuously improving our Health, Safety and Environment performance;

We will continually promote employee safety on and off the job;

We conduct our business so it meets or exceeds all applicable laws and regulations and minimizes risk to our employees, the public and the environment;

We will endeavor to do business with companies and contractors that share our expectations for Health, Safety and Environment performance and

commitment and we will regularly assess their performance;

We will use our influence with companies in which we have partial ownership so they will want to meet the Health, Safety and Environment Commitment of the Company;

We believe all employees are responsible and accountable for Health, Safety and Environment performance.

EFFECTIVE EMPLOYEE RELATIONSCVC Finance always values its employees by maintaining effective employee relations from top to bottom. Our approach to employee relations ensures that we recognize our employees’ rights to fair and equitable employment practices and to freedom of association. CVC Finance follows a policy of continuous improvement in respect of the working lives of its employees. In addition to this, management has taken further steps to enhance the facilities and benefits afforded to its staff:

A HEALTHY AND SAFE WORK ENVIRONMENTCVC Finance and all of its employees are to protect and enhance the environment in which they live. Everyone will comply with all laws and strive to do more. CVC Finance does not compromise safety or environmental protection for profit. CVC Finance believes environmental stewardship is an obligation and supports this commitment with the necessary personnel and financial resources.The following principles will guide and measure our corporate goals and objectives in Health, Safety and Environment:

110

CVC Finance provides the training necessary to ensure that all the Company personnel is sensitive to the importance of our Health, Safety and Environment policy, understand the nature of the laws and regulations that govern our activities, and have the skills to implement our policy and comply with Health, Safety and Environment requirements.

SUPPLIERS AND BUSINESS PARTNERSSuppliers have become increasingly important to CVC Finance with the expansion of its network and increasing requirements for stationery and other related supplies. To ensure uninterrupted day-to-day operational activities we should maintain a smooth flow of all related supplies and thus maintain good relations with our suppliers.

LENDERSFunding providers, mostly CVC Finance banking partners are an important component of CVC Finance business as they support CVC Finance in meeting funding needs when the need arises. It is necessary to sustain a continued relationship, which will yield mutual benefit for both parties.

CVC Finance operates with its suppliers based on a registered supplier list, which ensures CVC Finance’s expectation of quality versus price is maintained while dealing with reputed parties in a mutually beneficial manner. We are committed to complying with all the contractual regulations with our suppliers and timely payment for supplies is our reputation.

Finance is the solution that assists in our business’s operation and allows us to take advantage of opportunities to grow. Our lenders support us to excel in our advanced growth and expand our operations. We value our lenders through:

Compliance with contractual terms

Competitive interest rate

Compliance with contractual terms

Building business relationships

Needs and expectations of our suppliers

How we deliver value to our lenders

Needs and expectations of our Lenders

111

REGULATORSCompliance and regulatory risk have become increasingly significant given the more stringent regulatory environment in which CVC Finance operates. As a financial institution and holder of public deposits CVC Finance is regulated by the following regulators:

How we deliver value to our regulators

In CVC Finance, we firmly believe that our regulators guided us towards our journey to ultimate success. We maintain regulatory requirements with top priorities.

Ensure effective corporate governance

Our practice to remain within the guideline for the strategic and steady journey toward progress is being governed by our participant leaders and harmonized by our Board of Directors and Chairman. These practices ensure transparent and winning corporate governance for CVC Finance.

Compliance with rules and regulations

CVC Finance upholds a strong compliance culture within the organization and maintains a close dialogue with regulators to ensure required regulations are followed to expectations. Our Risk Management division closely monitors our operations, activities and compliance with all the regulatory requirements.

On-time regulatory reporting

As a financial institution, CVC Finance has to submit a good number of regulatory reporting on regular basis. In CVC Finance, our regulatory reporting responsibilities are decentralized. It is designed in such a way that the concerned division or department or concerned individual employee will

Providing them with market competitive interest rate on their invested fund.

Meticulously comply with all the contractual terms and conditions.

Our treasury division is always keen to build and maintain long term relationship with our lenders.

Bangladesh Bank

National Board of Revenue (NBR)

Bangladesh Securities and

Exchange Commission (BSEC)

Ensure effective corporate governance

Compliance with rules and regulations

On time regulatory reporting

Timely submission of VAT and Tax

Ensure value for the general shareholders

Needs and expectations of our regulators

112

prepare and submit respective reports to the respective regulatory body. A concrete review process is predesigned to ensure the correctness and timely submission of all the regulatory reports.

Timely submission of VAT and Tax

Being a legitimate and ethical company, CVC Finance contributes to the Government Exchequer when the necessary amounts fall due. For the year 2021, CVC Finance made a contribution to Government Exchequer of an amount equal to BDT 41.03 million, composed of income tax, VAT and excise duty. This is in comparison to BDT 48.22 million in 2020, reflecting its fair and consistent commitment to national contribution.

Ensure value for the general shareholders

Transparent and fair reporting of its financial information is the backbone of CVC Finance’s success stories so far. Our financials show our growing picture that we are consistently increasing the value of our shareholders with all our efforts.

Needs and expectations of the society

SOCIETYAs a member of the society CVC Finance has responsibilities toward the society from a broader sustainability perspective. Apart from financial needs, CVC finance has to act in a socially responsible manner, for societal benefits.

How we deliver value to the society

CVC finance always act considering itself as a part of society. Corporate Social Responsibilities (CSR) of CVC finance is a form of corporate self-regulation integrated into our business model based on the objective of good business for a good society.We signed an arrangement with Bangladesh Cancer Aid Trust in 2021 to financially support three of their cancer survivors on a monthly basis. CVC Finance hopes to work with them again in the future. Aside from that, CVC Finance has donated the furniture and fixtures required for JAAGO Foundation’s new classrooms. As part of our Corporate Social Responsibility, we are happy to work with these two organizations in 2021.

To act in a socially responsible manner

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Needs and expectations of the environmental groups

ENVIRONMENTAL GROUPSEnvironmental groups are organizations coming out of the conservation or environmental movements that seek to protect, analyze or monitor the environment against misuse or degradation from human forces.

How we deliver value to the environmental groups

In an era where the protection of the environment and its resources has become vital, CVC Finance considers environmental aspects of high importance, particularly when CVC Finance continues to build a greater presence across the country. CVC Finance has already established its Green Banking policies. CVC Finance promotes its operation in a green way with less use of paper and an increase in the use of electronic documents. CVC Finance is also playing a leading role in the banking and financial sector of Bangladesh in introducing and executing Green Finance.

BOARD MEMBERSCVC Finance has a group of experienced and professional Board members in its Board. With immense experience and professionalism, the Board of CVC Finance is conducting its business for the last 6 years and ensuring proper corporate governance since then.Our Board members are as follows:

Protection of environmental and ecological balance

NAME

Mr. Mahmud Hussain

Ms. Nasmin Anwar

Mr. Bibekananda Saha

Mr. Tofayel Kabir Khan

Mr. Rezaul Karim

Mr. Syed Al Farooque

Mr. Anwar Kamal Pasha

Mr. Asif Wahab Khan

Mr. Naim Hossain

Mr. AKM Monirul Islam

Designation

Chairman

Member

Member

Member

Member

Member

Member

Member

Member

Member

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Needs and expectations of the BoardSound financial position

Efficient financial performance

Effective Corporate Governance

Protecting shareholders wealth

How we deliver value to the Board

CVC Finance management faces the Board on a monthly basis and presented the organizational updates along with detailed financial analysis and rationale for the results. Based on the financial position and data with explanation presented by the management the board guide the management for the future courses of action. Management adherence with the guidance operate the business to get the desired result and hence strives towards increasing the wealth of the shareholders.

Our relationships with all our stakeholders impact directly and indirectly on our business activities and reputation. We proactively engage with stakeholders to inform our business strategy and operations, shape our products and services, manage and respond to social expectations, CVC Finance reputational risk and influence the environment in which we do business. The ways in which we engage with our stakeholders, and the frequency with which we do so, varies according to each stakeholder group. Engagement is based on identified issues and areas of concern that may impact our stakeholders. We use a decentralized stakeholder engagement model in which individual business units undertake stakeholder engagement appropriate to their areas and are responsible for identifying stakeholder concerns and taking appropriate action. At the center, the board oversees all engagement and plays a key role in analyzing our business’s relevant issues and concerns and providing guidance on appropriate responses.

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VALUE ADDED STATEMENT

VALUE ADDED STATEMENTfor the year ended 31 December 2021

Value added is a measure of wealth created by the FI through various business activities. The statement of value added shows the total wealth created and how it was distributed among stakeholders, including the Government, employees and shareholders.

VALUE ADDITIONFigures in BDT

Particulars2021 2020

Amount % Amount %

Operational income 601,608,839 631,932,306

Less: Cost of service rendered 357,744,533 464,386,414

Total Operating Expenses 122,008,670 108,150,335

Profit paid on deposits, Borrowing etc. 319,719,698 436,296,326

Less: Salaries & Allowances 68,434,808 64,316,384

Managing Director’s Salary & Allowances 6,840,000 6,705,000

Depreciation on Fixed Assets 8,709,027 9,038,863

Value added by operating activities 243,864,307 150 167,545,892 111

Less: Provision for doubtful accounts & future losses 81,783,775 50 16,112,135 11

Total Value Added 162,080,531 100 151,433,757 100

VALUE DISTRIBUTED TO:

Particulars2021 2020

Amount % Amount %

Provider to Capital: Shareholders as Dividend

118,965,000 73 115,500,000 76

Employees: As Salaries and other benefits

75,274,808 46 71,021,384 47

Government: Corporate Tax

28,414,432 18 41,668,437 28

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To Expansion and growth: Expansion and growth

(60,573,709) (37) (76,756,064) (51)

Total Distribution 162,080,531 151,433,757

MARKET VALUE ADDED STATEMENTfor the year ended 31 December 2021

Market Value Added Statement reflects the company’s performance evaluated by the market through the share price. This amount is derived from the difference between market capitalization and book value of the shares outstanding. It signifies the enhancement of financial solvency as perceived by the market.

Particulars 2021 2020

Face value per share 10.00 10.00

Market Value per Share 10.00 10.00

Number of Shares outstanding 118,965,000 115,500,000

Total market capitalization 1,189,650,000 1,155,000,000

Book value of paid up capital 1,189,650,000 1,155,000,000

Market Value Addition - -

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GOVT EX-CHEQUER STATEMENT

Government is considered as one of the most important stakeholders which play a critical role in the economic development of the country. Being a legitimate and ethical company, CVC Finance Ltd. contributes to the Government Exchequer when the necessary amounts fall due. For the year 2021 CVC Finance Ltd. paid an amount equal to BDT 41.03 million composed of income tax, VAT and excise duty. This is in comparison to BDT 48.22 million in 2020, reflecting its fair and consistent commitment towards national contribution.

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ECONOMIC OUTLOOK

GLOBAL OUTLOOK:Global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022—half a percentage point lower for 2022 than in the October World Economic Outlook (WEO), largely reflecting forecast markdowns in the two largest economies.

Tax deferrals, public sector loans, and capital injections into businesses, as well as monetary policy maneuvers like changing policy rates and relaxing reserve requirements, all helped to mitigate the pandemic’s immediate impact. The global economy is steadily improving, and emerging economies are expected to follow suit. In comparison to 2021, macroeconomic forecasts suggest that GDP growth in emerging markets and developing economies will be positive in 2022. The global recovery, which has been hampered in the near term by a resurgence of COVID-19 cases, is expected to strengthen as consumption patterns improve and trading activities resume, with ongoing vaccination aiding the process. However, there are still downside risks, such as the resurgence of coronavirus infections, vaccine delays, and financial stress brought on by high debt levels and slow credit growth.

Real GDP (Percent change from previous year)

* Source – Global Economic Prospects (January, 2022)

2020e 2021 2022f 2023f

World

Advanced Economies

United States

Euro area

Japan

Emerging market and developing

economies

-3.4

-4.6

-3.4

-6.4

-4.5

-1.7

5.5

5.0

5.6

5.2

1.7

6.3

4.1

3.8

3.7

4.2

2.9

4.6

3.2

2.3

2.6

2.1

1.2

4.4

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In the backdrop of pandemic containment, fiscal stimulus, and prudent monetary easing, advanced economies are projected to rebound, with growth reaching 4.1 percent and 3.2 percent in 2022 and 2023, respectively. In advanced economies, a slow and challenging recovery is expected following a resurgence of infections. According to the World Bank forecast, the United States is expected to recover to 3.7 percent in 2022 and expanding by 2.6 percent in 2023, aided by improved pandemic management. In the euro area, growth is forecast to rebound to 4.2 percent in 2022, following a 2.1 percent expanding in 2023. Growth in Japan is forecast to grow by 2.9 percent in 2022, after contracting by 4.5 percent in 2020. However, the advanced economies might require a long time to return to the pre-pandemic level.

The Covid-19 pandemic and subsequent economic crisis caused emerging market and developing economies, including China, to contract by 1.7 percent in 2020. In 2022, emerging market and developing economies is expected to grow 4.6 percent, while China’s economy is projected to accelerate to 5.1 percent in 2022, up from 2.2 percent growth in 2020. Excluding China, emerging market and developing economies (EMDEs) are forecast to expand 5 percent in 2022, following a contraction of 5 percent in 2021. After contracting by 0.9 percent in 2021, growth in low-income economies is predicted to rise by 3.3 percent in 2022. Despite rising COVID-19 cases and ongoing concerns about the global economy, the vaccine’s rollout has raised hopes of a global recovery; however, a delay in recovery may necessitate prolonged accommodation, exacerbating the crisis.

REGIONAL OUTLOOKAll regions are expected to improve by 2022, but recovery from the pandemic will vary by country, depending on vaccine procurement and distribution, financial stress due to high debt, trade tensions, and commodity prices.

EAST ASIA AND PACIFICGrowth in the region is expected to accelerate to 7.7 percent in 2021, owing primarily to a strong rebound in China. China’s growth is expected to slow to 5.4 percent in 2022, reflecting reduced fiscal and monetary support as well as tighter property and macro prudential regulations. Projections for regional growth in 2022 have therefore been reduced from 5.4 percent in the previous Update to 5 percent. In a low case scenario, if global conditions worsen and national policy responses are weak, growth could slow to 4 percent. Growth in the region excluding China is expected to accelerate to 4.8% in 2022 as the economic recovery gains traction. Because of disparities in containment strategies and widely disparate vaccine distribution timelines, the region’s economic recovery from the coronavirus pandemic will be uneven.

EUROPE AND CENTRAL ASIAOutput in Europe and Central Asia (ECA) is estimated to have expanded by 5.8 percent in 2021, reflecting a faster-than-expected rebound in domestic demand through most of the year, partly due to improved conditions in the Eurozone. However, given the recent worsening of the pandemic, tighter macroeconomic policy, and elevated policy uncertainty and geopolitical tensions, the outlook remains challenging. Growth in ECA is forecast to slow to 3 percent in 2022—about half the pace in 2021. Regional growth is forecast to continue to ease in 2023, reaching 2.9 percent, as fiscal support continues to be withdrawn. Because of strong trade and financial ties to the Eurozone, as well as tourism reliance, economic activities in this region are vulnerable to global spillovers. The outlook, however, remains bleak, and growth could be lower than expected if external funding conditions tighten or geopolitical tensions rise.

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LATIN AMERICA AND THE CARIBBEANRegional GDP is expected to increase by 5.2 percent in 2021, assuming moderate progress in vaccine rollouts in most countries, reduced mobility restrictions, positive spillovers from advanced economies, and a rise in commodity prices. In 2022, growth is expected to slow to 2.9 percent. Much of the region will take a long time to recover to pre-pandemic levels of output. The region’s per capita GDP is expected to be 1.5 percent lower in 2022 than it was in 2019. Expansionary fiscal and monetary policies, as well as environmental and industrial policies, are required to enable systemic reforms and foster sustainable development in the region.

MIDDLE EAST AND NORTH AFRICA The region is expected to grow by 2.4 percent in 2021, which is higher than previously predicted but lower than the previous decade’s average—ending in 2019. The recent rebound in oil prices, stronger external demand, and fewer economic disruptions from COVID-19 outbreaks should benefit the region. As vaccination rates rise, mobility restrictions ease, oil production cuts taper, and balance-sheet damage reverses, growth should accelerate to 3.5 percent in 2022. The recovery is dependent on the pandemic being contained, oil prices stabilizing, geopolitical conflicts not worsening, and vaccines being distributed efficiently by 2022.

SOUTH ASIA South Asia has been devastated by the pandemic and ensuing economic crisis, and growth is expected to rebound to a stronger-than-expected 6.8 percent in 2021, reflecting momentum from the end of last year. GDP is expected to be 9% lower in 2022 than it was before the pandemic. According to the latest South Asia Economic Focus Reshaping Norms: A New Way Forward the region is projected to grow by 6.6 percent in 2022 and by 6.3 percent in 2023. Poverty in the region may rise as a result of declining private consumption and remittances. Due to low demand, economies reliant on manufacturing exports and tourism are likely to recover slowly. A domestic debt crisis fueled by an already weakened banking sector with high non-performing loans could have serious consequences for GDP. Weaker-than-expected recoveries in key partner economies continue to be a source of concern. A long-term path to recovery would necessitate structural changes aimed at addressing the region’s vulnerabilities.

SUB-SAHARAN AFRICA Sub-Saharan Africa’s growth is expected to return to 2.8 percent in 2021 and then accelerate to 3.3 percent in 2022. The region’s outlook would be influenced by the resilience of the region’s health system, the availability of external financing, and domestic reforms such as revenue mobilization, digitalization, ensuring transparency, and improved governance.Source- Global Economic Prospects, January 2022

BANGLADESH ECONOMY With the pandemic wreaking havoc on every facet of the economy, 2021 has been an unprecedentedly difficult year for Bangladesh. Nonetheless, the country has shown resilience in adapting to the new normal and finding ways to survive and thrive. GDP growth is expected to be 7.25 percent in fiscal year 2021-22. According to a preliminary estimate from the BBS, per capita GDP and per capita national income in FY 2021–22 were $2,227 and $2,824, respectively. Domestic savings were 30.79 percent of GDP in the same period, whereas national savings were 30.39 percent of GDP. According to the World Bank, Bangladesh’s recovery would be modest, with growth of 7.2 percent in FY2021/22 as normalized activity, moderate inflation, and expanding garment exports underpin

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INFLATION According to Bangladesh Bank, the inflation rate for fiscal year 2021-22 will be 5.2 percent. Inflation could be pushed up in the coming months by rising global commodity prices and surplus liquidity in the banking sector. Non-food inflation, on the other hand, may continue to rise as a result of low earnings and declining purchasing power as a result of rising poverty and joblessness.

CONSUMPTION & INVESTMENT Consumption expenditure is expected to be almost 70 percent of GDP in FY2022. Household consumption expenditures will be much lower in 2022. Many households have seen their income fall, and income inequality is on the rise. Private consumption growth is likely to be modest in 2022 as a result of lower income and a fall in remittance inflows. Despite the government’s expansionary monetary policy and stimulus measures, private sector credit growth decreased to 11.07 percent in December 2021. Businesses are being cautious due of the pandemic’s potential impact. Because of the slow implementation of ADP, government bank borrowing fell in the first six months of FY2021. Due to the heightened uncertainty caused by

the coronavirus’s comeback, private sector investment will take some time to recover.Money MarketIn response to the COVID-19 epidemic, the central bank implemented multiple policy measures and changed policy rates. Since March 2020, the Bangladesh Bank has decreased policy rates to ensure system liquidity and reduce the economic impact of the pandemic. Policy rates (repo and reverse repo) have been reduced to 4.75 percent and 4.00 percent, respectively. Furthermore, as part of the expansionary strategy, the bank rate was decreased to 4%. Because of low loan demand and surplus liquidity in the banking system, the weighted average call money rate rose above 4.75% in December 2021. The latest Bangladesh Bank move comes as banks’ surplus liquidity reached a high of Tk. 2115.06 billion as of December 31, 2021, fueled by decreased private credit growth, indicating that the investment environment as cooled. Increased money supply has been injected into the financial system as a result of a rise in remittance earnings, lower imports, and expansionary monetary policy measures. Due to lower lending opportunities amid the pandemic, banks have been inclined to use risk-free securities, significantly lowering treasury yields.

private spending. Despite the fact that the pandemic has delayed Bangladesh’s economy, the year 2021 presents a chance to increase resilience by developing a more strong policy and institutional framework. However, there is a considerable danger that coronavirus outbreaks would resurface in 2022, potentially destabilizing the economy.

MICROECONOMIC INDICATORS PROJECTION

Source: Bangladesh Economic Review 2021

FY 2021-22 FY 2022-23 FY 2023-24

Real GDP growth (percent)

CPI Inflation (percent)

Investment (percent GDP)

Total Revenue

Current Account Balance (percent

GDP)

7.2

5.3

33.1

11.3

0.01

7.6

5.2

34.2

11.3

0.05

8.0

5.1

36.0

11.5

0.07

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Interest Rate To rationalize interest rates in other sectors, particularly the productive sector, banks are encouraged to keep the gap between lending and deposit rates, or spread, in the low single digits, except for high-risk consumer loans (including credit cards). Furthermore, except for credit cards, the maximum rate of interest or profit on unclassified loans or investments is set at a single digit. Recent developments in weighted average loan and deposit rates reflect a declining tendency. The weighted average loan rate of commercial banks fell steadily, reaching 7.18 percent at the end of December 2021, down from 9.62 percent at the end of February 2020. Similarly, the deposit rate fell steadily to 5.05 percent in February 2021, down from 5.53 percent the previous year. The interest rate spread in December 2021 was 3.19 percent.

EXTERNAL SECTORBangladesh’s foreign trade has started to return to a positive trend after confronting the adverse effects of the COVID-19 pandemic. Bangladesh’s export earnings in July-April of the current financial year 2021-22 stood at  $43.34 billion  with a 35.14-per cent growth compared with that of $32.07 billion in the same period of FY 2020-21. The recent setback in export growth was due to the lack of external demand due to the global pandemic situation of COVID-19, which is gradually recovering and is expected to restore positive growth in the coming months. The process of lowering Bangladesh’s import tariff rate is still ongoing in FY2020–21 in order to boost the efficiency of indigenous industries and achieve uniformity with the global tariff reduction process. In order to address the problems of graduation after 2024, the Ministry of Commerce has launched steps to conclude more PTAs and FTAs.Source: Bangladesh Economic Review 2021

EXPORT The foreign trade of Bangladesh has started to return to a positive trend after confronting the adverse effects of the COVID-19 pandemic. Bangladesh’s export earnings in July-April of the

current financial year 2021-22 stood at  $43.34 billion  with a 35.14-per cent growth compared with that of $32.07 billion in the same period of FY 2020-21. During this time period, commodity-wise growth in export earnings demonstrates that export earnings from practically all items have increased compared to the previous fiscal year. As an incentive in the export industry, the government has taken a number of initiatives. A monetary incentive is being provided to exporters in order to boost commodity exports and imports. This service is being extended to new items as well.Import Total import payments (c&f) for fiscal year 2019-20 were $54,784.7 million, an 8.56 percent decrease from the previous fiscal year. The country’s total import payments (c&f) were US$ 65,594.7 million in FY 2020-21, representing a 19.73 percent increase over the previous fiscal year’s import payments.Imports of immediate items fell 8.7 percent and capital machinery fell 29.2 percent in the first six months of FY2021 (July-December), indicating weak domestic demand. According to the World Bank, imports will fall by 1.5 percent in FY2020 but might rebound to 5.9 percent in FY2022. Imports are expected to increase as the economy returns to normalcy.

REMITTANCE Due to the COVID-19 pandemic, the global labor market has been drastically affected because of low skilled workers who do not have the option to work from home. During the first eight months of FY 2020-21 (July-February), labor export stood at 1.22 lakhs amid COVID-19 pandemic. In FY 2019-20, remittance inflows increased by 10.87 percent over the previous fiscal year to US$ 18,205.01 million. Bangladeshi expatriate remittances totaled US $24,777.72 million in FY 2020–21, a significant increase (36.10 percent) over the previous fiscal year. The majority of remittances have come from Middle Eastern countries. In fiscal year 2020-21 (July-February), KSA accounted for 23.56 percent of total remittances, followed by the UAE (10.24 percent), Kuwait (7.50 percent), and Oman (6.83%). The

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United States (13.13 %) ranked first among Western and European countries. Remittances from the United Kingdom, Malaysia, Singapore, and other countries have recently surged. The country’s remittance earnings reached record high of $22.07 billion in the just concluded year 2021.

FOREIGN EXCHANGE RESERVE The country’s foreign exchange reserves grew significantly in 2021, thanks to a robust remittance flow and lower imports caused by the pandemic-induced slowdown. As of June 2021, Bangladesh Bank’s gross foreign reserves were anticipated to be USD 46.39 billion. The Bangladesh Infrastructure Development Fund (BIDF) was established lately to finance various development projects using the excess FX reserve. The financing will get off with a large dredging operation at the Payra Port. The government will only utilize the fund to invest in projects with a high rate of return, according to the finance ministry, and yearly investment from the fund would not exceed USD 2 billion. Financing development projects is predicted to improve GDP growth, although using foreign

exchange reserves to fund infrastructure projects may be challenging in FY21 if imports rise as the economy recovers. However, as of December 2021, Bangladesh Foreign Exchange Reserves was measured at 42.8 billion USD.

CAPITAL MARKET The total number of listed securities on the Dhaka Stock Exchange (DSE) has grown from 589 in June 2020 to 609 in 2021. In June 2020, the total market capitalization of all listed securities was Tk. 3,11,966.98 crore, which climbed to Tk. 5,42,100 crore at the end of 2021, showing 21 per cent surge from the previous year. The DSE Broad Index climbed from 3,989.09 points in June 2020 to 6756 points at the end of 2021 surging 1,354 points or 25 per cent year-on-year. The total number of listed stocks on the Chattogram Stock Exchange (CSE) at the end of 2021 is 368. CSE’s market capitalization as of 2021 was Tk. 4, 70,024.93 crore, up from 24,47,000 from June,2020.

REFERENCE:

https://thedocs.worldbank.org/en/doc/600223300a3685fe68016a484ee867fb-0350012021/original/Global-Economic-Prospects-June-2021.pdf https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/f2d8fabb_29c1_423a_9d37_cdb500260002/10.%20Chapter-01%20Eng%20Eng-21.pdf https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/f2d8fabb_29c1_423a_9d37_cdb500260002/09.%20Executive%20Summary%20Eng-21.pdf https://mof.portal.gov.bd/site/page/28ba57f5-59ff-4426-970a-bf014242179e/Bangladesh-Economic-Review-2021 https://www.imf.org/en/Publications/WEO https://www.bb.org.bd/pub/annual/anreport/ar1920/full_2019_2020.pdf https://finance.yahoo.com/news/experts-predict-economy-look-2022-234932972.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAKbRO6MGUpxbARjBHUAk3bGB6OWHPOSqtOuf7IukK3kSZcTgmEHtJ9qVWgWsGyyj48dyNM90J4bDs-wgJa6MngAaEPNxCpeu0LZEGwYBWkNTYVQJtHpcGktnIpcUpxgAr9S30T3M8-528mFU_KiavmnGkOmcWvELKL9RGrPEmLsxq https://www.worldbank.org/en/news/press-release/2021/06/08/world-bank-global-economic-prospects-2021 https://www.bb.org.bd/pub/puball.php

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GENERAL REVIEWOF THE FUTURE PROSPECT

For all of us, the year 2021 has brought a lot of hope. Everyone expected that by 2021, the pandemic would be mostly under control, and that economic stability would return. The negative impacts of COVID 19 have begun to disappear in several region as a result of massive government initiatives. The transmission and effects of COVID 19 have been brought under control in Bangladesh due to a large vaccination campaign and enforcing strict policies of the government of Bangladesh. As a result, Bangladesh’s economic development has resumed in the second half of the year 2021. The global economy is relentless in its rehabilitation from the COVID-19 epidemic, although the pace varies widely and unevenly across regions. The global economy is expected recover sharply in 2022 compared to 2021. Since FY 2010-11 till the outbreak of COVID-19, Bangladesh’s economy has consistently performed well, with GDP growth of over 6%. In FY 2018-19, the GDP growth rate was 8.15 percent. Because of the devastating effect of the COVID-19 outbreak in the macro economic factors, the country’s economic development has slowed down. In the year 2021, the GDP growth rate has reached to 6.94% percent from 3.5 percent of the year 2020. The GDP growth rate in Bangladesh is expected to reach 7.50 percent in the year 2022.

CVC Finance Limited’s key targets for the year 2022 include reducing non-performing loans, and focusing more on asset backed financing (Lease Finance, Auto Loan, Home Loan, Work Order Finance, etc.) and deposit products. Bangladesh’s banking system has a huge number of non-performing loans, which has been a major source of concern. Since the COVID outbreak, many of the loan borrower’s risk profile has deteriorated dramatically. In 2022, our whole focus will be on both retail and corporate operations, with a goal of increasing deposits and loans. For this reason, the maximum amount of a corporate loan has been set based on the demand of the customer. In addition,

additional loan conditions have been evaluated based on the customer’s needs. For the extra benefit of corporate clients, tailor-made services are available. To increase the auto loan business in the year 2022, we have decided to finance all types of brand-new cars and SUV’s, selectively second-hand, and reconditioned vehicles, and the loan limit will be up to 85% of the vehicle value, in case of brand new/reconditioned/cars or SUV’s.

Similarly, like the previous days, CVC Finance Limited will continue to maintain quality SME and AFSD businesses. In 2021, the SME and agriculture sectors have been particularly heavily damaged by the epidemic. CVC Finance Limited served total 257,328,023 BDT as loan to SME clients throughout the year of 2021. CVC Finance Limited will continue to offer a diverse range of financing solutions to support the growth of the country’s SME sector. CVC Finance Limited will continue to provide customized loan products for the agriculture sector’s overall development. There will be no loan limit for individuals who wish to borrow agro financing; clients can borrow any amount of loan for agro sector financing as per their business demands, and there will be a flexible repayment option based on the borrower’s cash flow for the borrower’s benefit.

In addition, CVC Finance Limited is going to establish the first dedicated digital system for mobilizing small savings and nano loans. From anywhere, through this, customers can open their account, deposit their small amount of money, and apply for a loan if they are eligible. Moreover, customers can avail the formal financial services of any formal financial institution from the comfort of their home.

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OUR KEY STRATEGIES OF NEXT YEAR WILL BE: • Making customer centric segment wise loans and deposit to meet customers’ new demand. We, believe that, the potential customer’s demand changes regularly and a large number of people with changing needs do not use any formal financial services because they do not get any product which meets their needs. We’ll remodel the services that we provide from CVC Finance Limited for the betterment of the customers.• Expand our branch network for a better visibility.• Increase secured work order finance portfolio.• Very selective cash flow based large corporate financing and selective women entrepreneur financing.• Developing IT environment to provide better services to the customers. Since the world technology is upgrading day by day and upgraded IT hardware increases efficiency and the quality of the service, we will invest more in IT hardware. • Training the users of these upgraded IT tools to make sure the effective and ethical use of these tools.• Playing an active role in CSR practices and increase our reach interims of CSR since all financial organizations have a responsibility to do something good for society.• Emphasize on Brand Promotion activities.• Continue to improve regulatory compliance in order to safeguard customers’ resources and the company’s credibility.• Continue to invest in developing a reputable brand value, since CVC Finance Limited is a well-known non-banking financial institution in Bangladesh.• Maintaining a strong profit growth rate by focusing more on corporate and retail businesses.• Creating and maintaining a capital strategy to forecast future business development.• Developing a digital way of micro savings thorough which customers can deposit their

money using just their mobile. • Developing digital way of getting loan through just mobile phone. • Assuring that, a consistent collection strategy is implemented.• Continue to focus on broadening funding sources. Managing funding at a low interest rate and securing a refinancing facility from the Bangladesh Bank.• We will continue to look for opportunities to extend our product offerings and services to meet the needs of a larger range of customers as a customer-centric organization.• Establishing a consistent client base with a high level of reliability.• Increasing focus on long term public deposit, especially scheme deposits• Stronger emphasis on green financing, as this effort includes long-term benefits for the country’s environment and economy.• Maintaining profitability in the retail and SME sectors through growing volume of business.• To retain and attract new customers, more emphasis should be placed on creating a stronger client base through uncompromising quality.• Generating more employment through various business aspects.Moreover, we will emphasize on-• Asset backed financing• Grow the portfolio of lease finance• Grow home loan and car loan portfolio• Refinance based SME Financing• Strategic partnerships with large MFI’s/NGOs to expand SME portfolio• Financial inclusion programs with partners for Agricultural financing• Employee engagement• Training our human resource• Employee loyalty programs• Increase our profitability from subsidiary business

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BUSINESS SEGMENT REVIEW (CONSUMER, CORPORATE, SME)

CORPORATE FINANCEThe corporate division of CVC Finance Limited became one of the major parts of CVC Finance Limited. Currently, this division is serving more than 65 corporate clients smoothly with a strong team even during the pandemic time. During the pandemic, the country’s overall economic activity dropped significantly. Just after the lockdown and return to normal life after the epidemic, most of the clients, including major local and international companies, demonstrated a good positive trend. By prioritizing and improving engagement for fund collection, the strong corporate team showed outstanding reliability. The Treasury and Corporate division performed admirably in terms of fund management and disbursement at the end of the year.

- Corporate Asset portfolio consisting of clients with steady growth reflection along with strong credit worthiness.

- Experienced team of relationship managers and efficient business support process.

- The portfolio quality significantly improved due to regularization of some persistent problematic accounts.

- To support the liability department during this extensive liquidity crisis, Corporate Finance Department mobilized deposit of BDT 132.50 mn.

- In this era of significantly reduced economic activity, we have managed to disburse BDT 304.23 mn.

CORE COMPETENCIES KEY BUSINESS ACTIONS IN 2021

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PERFORMANCE INDICATORS

Year

2016

2017

2018

2019

2020

2021

Disbursement Amount 865,955,000

3,550,936,917

1,001,875,436

1,177,149,814

21,553,500

304,233,546

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STRATEGIC FOCUS

Factors Affecting the Performance

INTERNAL

- Risk-resilient asset portfolio stemming from well-planned sectorial diversification in financing

- Diversified financing channels resulting in a sterling liquidity position

- Management of asset quality through cash flow based on in-depth credit appraisal.

EXTERNAL

- Deferral on loan payments, from January to December of 2021, extended by the central bank, has helped clients recuperate after the lockdown.

- Refinance schemes under various stimulus packages launched by the central bank aided clients to recover further.

- Consumer awareness regarding the risk profile and strength of financial institutions has increased.

TACKLING COVID 19

- Corporate Asset portfolio consisting of clients with steady growth reflection along with strong credit worthiness.

- Experienced team of relationship managers and efficient business support process.

- Close monitoring of clients who have been highly affected by pandemic

STEPS TAKEN FUTURE INITIATIVES

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SHORT TERM(<01 YEAR)

MEDIUM TO LONG TERM

(>01 YEAR)

BUSINESS FOCUS

BUSINESS FOCUS

INDUSTRY TRENDS

INDUSTRY TRENDS

Maintain a diversified portfolio and focus on industries that showed better strength during the Pandemic.

Financing clients with good corporate governance to maintain a sustainable corporate asset portfolio.

Ensure multidimensional collection measures to escalate the collections from the defaulted loans.

Focusing more on various refinancing schemes to facilitate low-cost long-term financing through GCF, IPFF, and other sources.

Establishing alliances with financing networks, such as development organizations to offer our clients more innovative and tailored financial solutions.

The removal of the loan moratorium might lead to an increase in the number of defaulted loans.

Using loan facilities to provide a short-term emergency loan may expose banks to risks such as credit misallocation or loss.

Clients who are generally focused on meeting domestic demand are expected to reach to recover earlier.

The rapid change of client requirements as a result of increased competition and improved technology advancements.

Credit quality may worsen in industries or areas severely impacted by the pandemic, making it more difficult to analyze changing economic conditions.

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CONSUMER FINANCE

Since the beginning of CVC Finance Limited, the Consumer Finance Division has played a major role in the company’s overall success by offering customer-oriented arrangements. Consumer Finance Division works with a wide range of Home loans, Car Loans, and Personal Loans. Moreover, Consumer Finance Division is providing flexible and affordable home and car financing services. At the same time, Consumer Finance Division is reviewing opportunities to expand the client base through better customer service as well as offering tailor-made financial solutions to the consumers.

KEY BUSINESS ACTION IN 2021

- Focused on Auto Loan

- Reduced Auto Loan interest rate in single-digit

- Focused on Auto Loan processing by three days

- Signed MoU with different Auto vendors

- Focused on Category wise customer selection

- Taken initiatives to fully digitalize the loan.

- Focused on regularizing the early stage irregular accounts.

THE OVERALL BUSINESS OF CONSUMER FINANCEDEPARTMENT SO FAR IS SHOWN BELOW -

1. Year of establishment: 2016

2. Average ticket size: BDT 23,00,000

3. Loan portfolio: 1.95 million (Approx.)

4. Number of present active Accounts: 66

5. Present Outstanding: BDT 16,24,87,467

6. Total Number of clients served: 183

7. Total amount of disbursement since inception: BDT. 33,57,64,401

8. SECTOR WISE PORTFOLIO

Home Loan Auto Loan Personal loan

BDT 12,62,60,187 BDT 2,45,32,404 BDT 1,16,94,876

77.71% 15.10% 7.19%

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FACTORS AFFECTING THE PERFORMANCEThe retail market in Bangladesh is highly volatile. With a lot of players in the market, the interest rate has always been a challenge for the industry as well as liquidity crises have also been a major challenge in recent years. Moreover, the division is also facing uneven competition with other players. Besides the takeover of our existing loan portfolio by other competitors offering significantly lower interest rates which was a major threat for us. Due to secured-based investment & low NPLs ratio other banks & NBFIs are focusing on the consumer business in the years with a specific focus on loan takeover.

WHAT DID CVC FINANCE DO TO OVERCOME THOSE CHALLENGES?

We value long-term relationships with our customers and always kept our product pricing, terms,

conditions & documentation transparent. These values helped us to grow customer confidence

and acquired the prospect of earning repeat business.

We ensured a fast, easy & hassle-free loan evaluation process which has attracted our customers

& made us different from other competitors.

9. Sanction trend for the last 5 years (figure in BDT)

11. Strategic Focus

10. Disbursement trend for the last 5 years (figure in BDT)

2016 2017 2018 2019 2020 2021

BDT. 6,400,000

BDT. 34,90,30,000

BDT. 5,71,45,000

BDT. 1,24,21,619

BDT. 4,89,925BDT.

1,74,00,000

2016 2017 2018 2019 2020 2021

BDT. 5,800,000

BDT. 174,643,186

BDT. 102,539,921

BDT. 28,311,619

BDT. 3,639,925

BDT. 2,08,29,750

Zero NPLs

Secured based Investment

Diversified asset portfolio

Quick Turnaround time (TAT)

Transparency

Expert & professional business teams with

door to door service capabilities

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12. Tackling Covid-19

We know the financial sector has suffered a lot

last year due to Corona Pandemic. So this year

will be very challenging for us. CVC finance is

ready to face all challenges. Steps Taken

CVC Finance will continue to focus on

customized services & need based products

to stay ahead in the competition.

We have already brought about many changes

in our consumer business model to make the

operation more efficient and scalable.

FUTURE INITIATIVES:

To keep pace with the market by reducing the

rate of interest and revising it from time to time

Introducing profit-based new products &

financial solutions by concentrating on special

rates of interest

Focusing on asset-backed financing like Auto

loans & Home loans.

We hope to keep pace with the technological

advancement in the industry

Digital Financial Services (DFS) and

smartphone-based loan processing system to

be introduced this year.

LOOKING FORWARD:

Business Focus: 1. Single-digit interest rate

2. Asset-backed financing

3. Need-based Investment

4. Category wise Customer selection

5. Expand our geographical locations

6. Open New Branch to provide door step service to our customer

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SME FINANCE

SME Division of CVC Finance Limited started its journey in 2015 with a dedicated strong team. SME Division of CVC Finance Limited has expanded into one of the organization’s major business sectors and is determined to play an integral part for Small and Medium-sized entrepreneurs, who want very reliable financing solutions to expand their business. SME Division offers a wide range of customer-oriented arrangements, and efficient products to meet the demands of its clients.

HIGHLIGHTS

NUMBER OF THE CLIENTS: 100 ( SME : 72 + ASFD : 28)

NUMBER OF EMPLOYEES: 04

Sector Breakdown in million

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STRATEGIC FOCUS:To achieve targeted business volume and margins for expanding through organic business growth.

PERFORMANCE INDICATORS:

(All figures in BDT)

YEAR DISBURSEMENT PORTFOLIO

2016 57,500,000 56,900,000

2017 300,035,000 306,890,277

2018 148,700,000 364,638,894

2019 12,900,000 287,862,139

2020 13,800,000 263,153,099 ( Only SME)

2021 10,500,000 221,470,088 ( SME : 218,240,979.16 & ASFD: 3,229,109.03)

FACTORS AFFECTING THE PERFORMANCE: Internal: The officials of the SME Department have given their best efforts & worked diligently to ensure unrestricted flow of funds to our clients even during the pandemic from April to August’2021.

External:

TACKING COVID – 19

STEP TAKEN:- Our online portal service was launched to ensure that clients get the service they need safely from home.

- We have arranged online training for SME clients & employees of the SME department.

- Increased effort so as to increase regular collection capacity.

FUTURE INITIATIVES:- Emphasis on generating another strait for SMEs led by modern technology to minimize the need for physical movement.

- Co-operating with the prominent e-commerce & f-commerce stages.

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LOOKING FORWARD:

SHORT TERM(<01 YEAR)

BUSINESS FOCUS INDUSTRY TRENDS

Regular monitoring of portfolio for ensuring making regular payments.

Efficient asset-liability management & take all precautionary measures for maintaining standard quality of assets.

Low-interest rate due to regulatory directive. Challenging in maintaining portfolio quality due to payment deferment mandated by the central bank.

MEDIUM TO LONG TERM

(>01 YEAR)

BUSINESS FOCUS INDUSTRY TRENDS

N/A N/A

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SUBSIDIARIESBUSINESS REVIEW

1. CAPM Advisory Limited:CAPM Advisory Limited is a full-fledged Merchant Bank, incorporated as a private limited company under Companies Act, 1994 in November 2011 and licensed as a full-fledged Merchant Bank under Bangladesh Securities and Exchanges Commission (Merchant Banker & Portfolio Manager) Rules, 1996 in April 2012.

Products and Services: A) PRIMARY MARKET SERVICES: i. Equity Capital Management: - Initial Public Offering (IPO): Like the name says, it’s when a company initially offers shares of

stocks to the public through an exchange. It’s also called “going public.”

- Repeat Public Offering (RPO): Means further public offering for issuance of additional security by an issuer which is listed with stock exchanges.

- Right Issue: Rights offering (issue) is an issue of rights to a company’s existing shareholders that entitles them to subscribe additional shares directly from the company in proportion to their existing holdings, within a fixed time period.

- Underwriting: Underwriting is the process by which investment bankers raise investment capital from investors on behalf of the corporate issuers those are issuing either equity or debt securities.

- Corporate Advisory: We offer a range of corporate advisory services including followings:

a. Capital Restructuring b. Financial Consultancy c. Feasibility for going public d. Structured Solutions e. Post issue management f. Corporate Governance ii. Debt Capital Management: Debt issue through private placement.

B) SECONDARY MARKET SERVICES: i. Portfolio Management: Our portfolio management service is designed to provide personalized, secure and simple financial solutions for a wide range of investors who wish to enhance their opportunities while minimizing their administrative burden.

- Investor Discretionary Account (IDA): This account is managed by the account holder through CAPM Advisory Limited. The investor bears the risk of investment and also its gain or loss.

- Portfolio Managers Discretionary Account (PMDA): This account is managed by CAPM Advisory Limited on behalf of the client.

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C) INVESTMENT BANKING SERVICES: a. Corporate Finance b. Foreign Finance c. Local Finance d. Mergers and Acquisitions e. Structured Solutions f. Debt Restructuring g. Investor Relations Advisory h. Structural Asset Finance i. Distribution and syndications j. Infrastructure and Project Finance k. Business Feasibility l. Placement Sale

D) RESEARCH & INVESTMENT ADVISORY:

Research Services: CAPM Advisory Limited research team provides differentiated, client-focused micro as well as macroeconomic research and investment ideas. Our Research Services Include:

- Economic Research- Fundamental Research- Sector Research

Investment Advisory: We are dedicated to provide you with independent, professional investment planning. When we will advise you, we always keep in mind that, your dreams and aspirations are unique and require unique attention. Therefore, you will always find an investment plan that suits your unique need from our accomplished investor advisory team.

2. CVC Brokerage Limited:CVC Finance Limited obtained permission from Bangladesh Bank to start its stock brokerage business and subsequently got approval from DSE and SEC to start its brokerage business by setting up a fully owned subsidiary company named CVC Brokerage Limited.CVC Brokerage Limited is going to offer full-fledged brokerage services to its corporate and individual customers.

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MANNANHARDWARE

Mr. Abdul Mannan, the proprietor of Mannan Hardware, has been trading several types of hardware items such as handle lock, door lock, security lock, consil lock, door stopper, and furniture handle at Kawranbazar Kabbokos Super Market since 2012.

He used to shop in the neighborhood market resulting in lower profit margin. In June of 2017, he made the decision to import items from outside the country. He had the idea that if he could purchase in bulk amount, which shows him having a higher purchasing power, hence at a discounted rate. But, due to a shortage of funds, he couldn’t do it with his own abilities. As a result, he attempted to obtain financial assistance from relatives or other sources, but no one was willing to assist him at this time. Finally, on the advice of a well-wisher, he went to CVC Finance Limited and discussed the current state of his firm. CVC Finance advised him about ways to get hold of the situation and assured that this would be his financial help provided he met CVC Finance Limited’s basic eligibility requirements. Then he applied for the loan, which is a required step in the borrowing process. Mr. Abdul Mannan received his first loan in the sum of Tk. 7.00 million in a straightforward manner. Our loan has been really beneficial to him. With a portion of the

profit, he opened a second showroom in Mohakhili, Dhaka.

Everything was in place, but the organization wasn’t ready to deal with the effects of the Covid-19 pandemic. In a pandemic situation, the shop may be closed for several months, resulting in the proprietor’s inability to adequately control operational costs. Mr. Akram Hossain was frustrated yet again as he faced a new challenge.

CVC Finance Limited believes in long-term partnerships and does not want to see a good thing come to an untimely end. CVC Finance Limited took the initiative to offer him with Working Capital Finance at a very low interest rate, with no hidden terms or conditions, so that he could manage his operational costs without difficulty.

We, at CVC Finance Limited, are pleased to see him achieve his goals. “Walking on the path to success will be smooth if CVC Finance Limited is beside you,” Mr. Akram remarked. Apart from the business aspect, it is a significant accomplishment for CVC Finance Limited when business entities make statements like these.

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OPERATING ENVIRONMENT

AND RISKMANAGEMENT

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RISKMANAGEMENT

THE OPERATING ENVIRONMENT

We are going through a time that is unprecedented in known human history. Covid 19 pandemic hit hard in various intensity in multiple waves accumulating human tolls which continues to raise concerns. Countries around the world went on lockdown to manage the health crisis, encouraging people to maintain social distancing. Since March 2020 Bangladesh is also exposed to this pandemic. Policy makers implemented different sort of lockdown measures to control it but with each new wave the pandemic brought new challenges. We are still confronting it out. The lifestyle as we were habituated have been changed overnight. Offices have gone online. However, these various restrictions have their economic consequences. Supply interruptions, demand shocks, and conservative business approach has contracted global economy. World Economy has contracted 1.50% in 2021.

Bangladesh economy has been growing steadily from 6 percent to 8 percent over the last decade. According to BBS, despite of economic down- turn resulting from Bangladesh registered an economic growth of 5.47% compared to 5.24% of 2020. The economic growth recorded is due to government expenditure as there has been reduced economic activity elsewhere. Tourism and transportation went down to a fraction of its pre-covid level for example. However, Bangladesh has recorded highest ever remittance in- flow in the last fiscal year. Private sector credit growth had stood at 10.68% by December, 2021. Government borrowing from banks also increased. However, the liquidity scenario has improved in the last year.

WORLD LIQUIDITY SCENARIO

Economy 2021 2022

World 6.00% 4.40%

Advanced Economies 5.10% 3.60%

Emerging Economies 6.40% 5.70%

Developing Asia 8.60% 6.00%

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However, this could have been worse as IMF predicted the contraction of economy could have been three times as large if not for the extra ordinary policy support from governments across the globe. And because of this IMF predicts that world economy will grow at a pace of 4.4% in 2022 and moderating to 3.8% in 2023.Bangladesh government has declared so far 23 stimulus packages since pandemic hit our country to keep the economy on check. Almost 70 per cent of the packages have been implemented as of April 2021. With the addition of these five new packages, the total amount of assistance is now BDT 1.31 trillion which is 4.84% of national GDP. As of March, 2022 foreign reserve dropped to USD 44.15 Billion. The national

economy is showing early signs of recovery through a rebound in exports, strong remittance inflows, and on going vaccination program as mentioned through World Bank reports. The gradual comeback of the Bangladesh economy is reassuring. If this trend continues and sustains, Bangladesh will probably stand out as one of the most resilient countries to bounce back early from the negative consequences of the coronavirus crisis.

The condition, prospect and condition of national and global economy along with policy support in parallel to industry competitiveness affects our operations and business.

BANGLADESH GDP GROWTH RATE

Source 2021 2022 2023

Government Data 7.24% N/A 7.20%

IMF 5.00% 7.50% 6.50%

ADB 6.80% 7.20% 7.10%

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MACROECONOMIC ENVIRONMENT ANALYSIS

In this ever-changing dynamic business environment, to remain competitive and to create sustainable competitive advantage respond to macro-economic changes need to be prompt. An organization can achieve maximum success when it can differentiate itself in the marketplace from the competitors. Financial companies cannot behave independently and provide services based on specific laws affecting their growth and offerings. At CVC Finance, we conduct situational analysis in political, Economic, Social, Technological, Environmental, and Legal dimensions. While undertaking such research, we identify issues that impact our operational environment and address the degree of the impact. The outcomes of this analysis are used for finding out the opportunities and threats in our SWOT analysis.

POLITICAL DIMENSIONGovernment laws affect the country’s financial sector. The government can intervene in the matters of banking whenever, leaving the industry susceptible to political influence. This includes corruption amongst political parties or specific legislative laws such as trade restrictions, tariffs, and political stability. Since 2009, the current government has been effectively controlling political affairs. The overall situation is stable. And this continuing stability helped maintain a positive GDP growth despite pandemic raging across the country and world at large. We are still on track to graduate from LDC to MIC by 2024. Now, challenges remain in improving the country’s position in ease of doing business and competitiveness index.

IMPACT ASSESSMENTA prolonged period of political stability translates into business growth and economic prosperity. A politically stable situation is encouraging for new pioneering initiatives and expansion projects from existing enterprises. Public investments are

going to an infrastructural development project, and improved private investment is anticipated.

OUR RESPONSEWe are focused on financing in priority industries as identified by the government. CVC Finance has a well-diversified portfolio to reduce risk or volatility. Our focus will remain on the quality acquisition and regularizing default accounts. The companies’ management continuously assesses the environment and adapts its business strategies accordingly.

ECONOMIC DIMENSIONBangladesh showed extreme resilience and prudent policy application to record a 6.94% GDP growth in a pandemic stricken fiscal year. Even though slower growth than the average growth Bangladesh has been consistently maintaining over the past decade, but the performance is higher than neighboring countries. Experts expected that the BD economy would be the biggest climber between 2020 and 2034. But COVID-19, the deadly virus which the world has ever seen, has flipped the whole scenario. Due to COVID-19, The World Bank revised its prediction that Bangladesh’s GDP growth would be 6.40 % in the 2021-22 fiscal year. The entire South Asian and Asian region was expected to grow as well. However, the COVID-19 pandemic created economic paralysis in several areas. Currently, Bangladesh is at 40th position, as per recent analysis by international donner agencies economy of Bangladesh is expected to grow and climb to 25th spot. However, increasing NPL in the Financial industry has been the most controversial topic from the microeconomic aspect. Apart from the COVID-19 impact, frequent rescheduling and write-offs aggravated the situation. The

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current challenge for NBFI’s is to tackle these short-term NPL arising from regulatory imposition while coping with the changing business environment due to COVID-19.

IMPACT ASSESSMENTThe breakout of deadly COVID-19 has exposed financial service companies to a series of challenges. Balance sheet management has put many NBFI’s in difficulty in matching short buckets. Implementation of single-digit interest rates has created pressure for financial institutions to undertake structural reform, resulting in a squeezed profit. On the other hand, reducing the cost of funds for banks has created immense pressure for NBFI’s as good borrowers take over their existing facilities to banks.

OUR RESPONSECVC Finance will have to face an increased challenge in terms of stiffer competition and reduced margin. We will make structural reform to grow strongly in the Corporate and SME & Retail segment by improving reach.

SOCIAL DIMENSIONBangladesh has fulfilled the criteria set forth by the United Nations in terms of Per Capital Gross National Income (GNI), Human Asset Index (HAI), and Economic Vulnerability Index (EVI) to graduate from LDC countries in 2018. The official graduation will take place in 2024. All this parameter indicates that living standard has improved. Bangladesh GNI now stands at $2,227 from $2,024 in 2019 an increase of 10.02%. Bangladesh has been doing extraordinary in other social indicators too. There has been significant improvement in life expectancy, infant and maternal mortality. Boston Consulting Group forecasted Bangladesh’s Middle and Affluent Class (MAC) population to reach around 34 million people by 2025, under conservative circumstances. Even discounting for the pandemic, this will be a key driver behind the growth in local consumption demand in the upcoming years

IMPACT ASSESSMENTThe rising middle-income group will be the

driving force to increase local consumption. Approximately 67% of middle-income groups are salaried, and consumers are now more informed about the products and services available in the market. Now, consumers desire a seamless financing experience using technology-based platforms. Apart from this, COVID-19 has triggered housing demand among growing middle-income people as rental payment was a prime concern for this segment.

OUR RESPONSEThe rising social lifestyle standard will be spread across the country, so increasing the geographic reach through offering small ticket size loans is a priority. To meet the aspirations, these income groups will require innovative and convenient financial solutions. Our long-term focus is to create precise segmentation, develop specific products based on customer needs, and establish superior customer relationship management.

TECHNOLOGICAL DIMENSION

On the global scale, the fourth industrial revolution has become the talking point. Technological advancement has made customers more sophisticated and altered expectation levels. A technological shift has made it possible to avail services remotely and gain product knowledge across the industry, thus helping customers to make informed decisions. Bangladesh now consumes close to 1 terabyte per second bandwidth, which summarizes the digital footprint of users. Bangladesh has 605 GBPS of capacity which meets 62% of the total demand. Plans are underway to establish 3rd undersea internet connectivity. Apart from financial institutions, other service providers from different industries such as telecom, tourism, and hospitality are increasingly investing in developing mobile and internet platforms to reach and convert consumers.

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IMPACT ASSESSMENTTechnological evolution will facilitate financial institutions to bring operational efficiency. Financial institutes will need to create an ecology to keep up with the customers’ convenience-driven demands. In-depth data analysis will pave the way to provide well-tailored financial solutions to the customers. Technology will also expose economic systems to exposure of data theft and other security-related issues.

OUR RESPONSECVC Finance has made considerable investments

in technology and is in the process of upgrading

to a state-of-the-art core banking system. We

are focused on simplifying and automating our

platforms. To attract and retain retail customers,

we plan to launch digital financial services in

parallel to traditional services. Our effort to DFS

will make financial services accessible and

affordable to all individuals and businesses, as

branch operation is increasingly becoming less

viable for NBFI.

LEGAL DIMENSIONThe financial industry follows strict laws regarding

privacy, consumer laws, and trade structures to

confirm frameworks within the industry. Such

systems are required for customers in the

allocated country and international users. The

government is adopting and implementing tighter

rules and regulations to increase compliance

among businesses.

IMPACT ASSESSMENTRegulatory bodies have undertaken remarkable regulatory and supervisory initiatives over the years in line with the internationally accepted standards and compliance requirements.

OUR RESPONSECVC Finance is always aware of legal and regulatory compliance issues. So, we are committed to creating such an organization-

wide culture that promotes work ethics, values, and integrity followed by everyone in the organization.

ENVIRONMENTAL DIMENSIONEnvironmental issues are factored in with urgency in the business processes. Environmental pollution due to carbon emission is a concern to the sustainability of the earth. So, globally and nationally, the focus is on making businesses more environmentally friendly and sustainable. This has been shaped as a result of a growing threat to the climate.

IMPACT ASSESSMENTAs Bangladesh is a critically vulnerable country, financial institutions as an engine drive the supply of money, and the nation’s economy must ensure that financial incentives do not force their actions; instead, their actions must address environmental issues out of self-interest. If sustainability is compromised, it will ultimately threaten the sustainability of financial institutions.

OUR RESPONSECVC Finance is committed to sustainable development by creating long-term value for our stakeholders, the environment, and the community. Our Agriculture and Sustainable Finance unit has been performing well in enhancing its focus on green financing since its launch in 2016. We emphasize financing in industries that promotes green business

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MARKET FORCES AND COMPETITIVE LANDSCAPE

PORTERS 5 FORCES

CVC Finance is taking a progressive view for developing its strategy. The goals of the company circulate being customer-centric, sustainable, and competent. With sustainable growth, operating systems need to be introduced after a careful and comprehensive analysis of the company’s position in the industry and the external factors that can affect the organization in its operation. The five forces model, developed by Michael Porter, is a business analysis tool that surveys the relative strength of five primary forces that govern competition within nearly any industry. This analysis reflects the competition level among the leading companies in an industry and considers four other factors that affect the industry and its success. To create wealth for our stakeholders, we have delved into detail for CVC Finance in the imminent future.

COMPETITIVE RIVALRY

Impact: HighOur country’s financial service industry has 60 commercial banks, another five non-scheduled banks, and 34 other NBFIs, which is very high in terms of the population’s bankable segment. Switching cost from the customer’s perspective is insignificant because of the high concentration of competitors. However, Competitiveness in an industry depends on the degree of intensity and the extent of rivalry. As multiple FIs are fighting for the same segment of clients, the intensity of rivalry increases. More and more FIs are now targeting lucrative SME and retail segment; even the government itself has identified SMEs as the growth driver for the future.

Business Impact Competition is likely to increase as three new schedule banks, and one new NBFI has started their operation and wants to acquire customers from other FIs. Leveraging technology to achieve efficiency will significantly define the rivalry among the competitors. To gain significant market share, late movers will have to offer smarter solutions in the marketplace

Our Perspective We are striving to achieve operational excellence with our continued investment in technology. Our goal is to retain our existing customer, which will help us sustain in the competitive environment. To attract customers from new segments, we are renovating our current product matrix and finding new ways of delivering values to clients with enhanced customer experience.

BARGAINING POWER OF SUPPLIERS

Impact: Moderate to HighPrimary providers of funds come from different segments of our customer base. A critical factor in determining bargaining power is the control over rates and our cost of funds. However, at a greater level market determines the rate of interest. Also, the central bank exercises commanding power to restrict rates. Central Bank also influences the cost of funds through various refinancing schemes and policy support tools. As a consequence of this, bargaining power fluctuates between medium to high as per the market scenario.

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Business Impact Resources are unreasonably distributed among the depositors as the majority portion of deposits is held by few depositors. Because of this, depositors in particular institutions exercise high bargaining power during tight liquidity conditions. Also, policies implemented by the central bank have implications in the market.

Our Perspective We are focusing on diversifying our deposit providers to reduce dependency. Our effort will continue mobilizing term deposits to reduce reliance on the money market which adds to the bargaining power of the counterparty. Apart from this, we are gradually expanding the retail deposit base in our effort to diversify.

BARGAINING POWER OF BUYERS

Impact: ModerateRecent trend shows that buyer power is increasing due to low switching cost as the number of financial institutes in the industry is higher than needed. In addition to that, several institutions are in the line of getting a license from the regulatory body. Higher fixed cost in operation also triggers financial institutions to attract and acquire new customers, enabling buyers to exhibit rate-sensitive behavior. A few years back, retail and SME customers generally tend to show less price-sensitive behavior. But now they have an increasing number of sources. Rising competition among the financial institutes has made them exhibit this price-sensitive behavior.Corporate customers significantly price sensitive. Despite faced with a liquidity crisis, they exercise their bargaining power because of price competitiveness among existing FIs.

Business ImpactIn terms of interest rate preference, corporate customers are expected to have diminished

leverage. However, this will lead to FI’s pursuing superior customer relationship management and faster processing to retain and acquire customers. Attracting SMEs and retail clients will depend on the FI’s ability to customize the solution to meet customer needs effectively.

Our Perspective We are focusing on enhancing relationship management with the existing corporate client segment and increasing the overall involvement with our company. This year, to drive down the overall cost of funds, we will intensively focus on retail segments that will expand our customer base and create a defensive ground to sustain within this competitive environment. Our priority will be widening the revenue pie coming from interest income.

THREAT OF NEW ENTRY

Impact: ModerateIn 2019, 3 more banks and 1 NBFI were given approval on which two banks and the NBFI started in 2020. These new banks are entering a crowded industry, even though the newly launched institutions’ performances are unsatisfactory. Along with this, several applications for getting the license for banks and NBFIs are in the pipeline, making new entrants’ threat even high.There are also increasing internal threats of new entrants as more and more financial institutions target the SME and retail segment of the customers. In the long run, there could be a merger and acquisition scenario to consolidate the industry.

Impact AssessmentNew entrants sooner or later decrease the profitability of the existing established companies. But there is a remarkable impact on stakeholders’ trust and confidence if new institutions are not performing on the expected level.

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Our Perspective Since there is increasing competition in the SME and retail segment as demographic dividend is expected to come from the middle-class segment of the population. There are already fast movers in this segment that established their footprint across the country with significant market share. We hope to achieve substantial pie of the industry by providing customized financial solution and prompt services

THREAT OF SUBSTITUTIONImpact: HighIf we consider the NBFI industry solely then the threat is moderate to low. But if we think of loan products from banks as substitute products, then the threat is high. Apart from this, a significant danger of substitutes comes from NBFIs as well, as they are already offering specialized financial solutions with easier terms and conditions.In addition to that, in some segments, the threat comes from the non-financial sector. For instance, many consumer goods providers (i.e., car, home appliances, and furniture manufacturers) provide EMI basis payment without the participation of financial institutions. Card businesses are also facing the threat of the rapid emergence of Fin-tech services with their

swift payment system. They also have scope for innovating ways to cater the individual borrowing need.

Impact AssessmentAdapting to the needs and requirements of the SME and especially retail segments is the key to gaining market share in the segment. We will always have to be vigilant on the policy incentives and invest heavily on the technological front to gain an early mover advantage.

Our Perspective As substitute products can deteriorate our revenue and profit stream, we have to constantly stay alert for future breakthroughs and remain adjustable to changes in this competitive industry.

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SWOT ANALYSIS At CVC Finance, we have introduced SWOT analysis, a framework for evaluating our competitive position and developing strategies for sustainable business growth. We embrace a realistic, fact-based, & data-driven framework to engineer our way forward by dispelling the pre-conceived beliefs and grey areas. After analyzing our business structure, operating framework, microenvironment analysis, and position in the industry, we finally embark on the SWOT analysis. Identification of SWOTs is imperative because they can inform later steps in planning to achieve the objective. First, decision-makers should consider whether the objective is attainable, given the SWOTs.

This SWOT analysis will facilitate our investors and readers a full awareness of all the factors involved in making a business decision, and the extent to which they can have an impact. It would also enable us to reinforce our existing strengths, convert weaknesses into strengths, capitalize on opportunities and reduce threats. CVC Finance can particularly benefit from this SWOT analysis because it will allow our business to see where we are standing and plan more efficiently and capitalize on our strengths. It also allows us to break down goals and objectives into manageable portions, a time-saver in an economic climate caught up by slow or stagnant growth.

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STRENGTHSCVC Finance has already built a reputation among its investors and clients for the high quality of its services, product innovation, productivity, sustainable financial performance, and good corporate governance.

CAPABLE BOARD AND DIRECTORS FROM DIVERSIFIED BACKGROUNDS. HUMAN RESOURCES: At CVC Finance, we are exclusively dependent on Human Resources; therefore, they are considered human capital. Our Human Capital has brought phenomenal successes for the company through “Discipline, Individual Efficiency, Customer Service, Quality and Team Work”. CUSTOMER-CENTEREDWe are delivering customers’ desired products and services to create true customers’ value.

We understand and honor the customer’s needs, as well as serve them indifferently and promptly.

We maintain strict secrecy of customers’ accounts at all times unless asked by any regulatory authority;

We provide clear, understandable, and accurate information to our customers within the frame of mutual trust.

We are keeping customers informed with all of our banking and financial product.

WEAKNESSADDRESSING OUR WEAKNESS

Less visibility and branding in comparison with leading NBFI’s

Over-reliance on Corporate segment credit

Geographically lesser presence

As consumers increasingly manage their daily lives digitally, we are trying to reach them through online and mobile channels. We are spending on digital platforms which could improve customer experience and enhance engagement. We believe that a well-executed digital branding campaign can increase customers’ interactions and benefit from social sharing.

We are trying to re-building our portfolio by focusing on SME, Agri finance, and Retail sector.

Our business is heavily concentrated in Dhaka City. Now, we are planning to expand our business in rural areas by creating sub-branches or agent points.

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OPPORTUNITY Innovative products and services Growing local entrepreneurs. Developing Rural Market. Use of modern technologies.

THREATS Intense competition in corporate lending drives commercial banks and NBFI’s to focus more on SME and consumer financing.

Implementation of single-digit interest rates in the banking industry puts NBFI’s at risk of losing fresh new borrowers.

Recent scams of renowned NBFI’s are eroding the confidence of customers and depositors, thus accelerating the funding crisis.

The digitalization of the banking industry is paving the way for cybercrimes.

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STATEMENT OF RISK MANAGEMENT

CVC Finance adheres to a strong risk management strategy that stems from robust corporate governance in order to solidify the enterprise risk management framework. This allows the company to smoothly adapt to changes in the business environment.

The governance of risk management starts with the board and is interwoven around a strong management structure, information system, risk-rating system and robust policies. CVC Finance considers guidelines for Managing Core Risks of Financial Institutions issued by the Bangladesh Bank vide FID Circular No. 10 dated September 18, 2005 and Integrated Risk Management Guidelines for Financial Institutions issued by the Bangladesh Bank in 2016 alongside ensuring benchmark industry practices of identifying, assessing and measuring risk.

Strong inter-department communication link on risk factors and a culture of collaboration in decision-making among the revenue generating units, independent control and support functions, committees and the senior management help the company in proper management of organizational risks.Effective management coupled with the adoption of BASEL-II recommendations benefits CVC Finance by enhancing capitalization and optimizing costs to risk and funding.

RISK TYPESRisks at CVC Finance are broadly classified into 9 categories:

1. Credit

2. Market

3. Liquidity

4. Operational

5. Strategic

6. Technology

7. Legal

8. Reputational

9. Environment and social risk

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RISK MANAGEMENT FRAMEWORK

INTEGRATED RISK MANAGEMENT

FRAMEWORK

MAJOR RISK ASSOCIATED WITH –Business Units, Credit Risk Management, Treasury, Operations, ICC, Corporate Affairs, Finance, IT, Strategic Planning, other functional areas

RISK MANAGEMENT AND CONTROL PRINCIPLES

PROTECTING CVC FINANCE’S FINANCIAL STRENGTHby controlling risk exposures and circumventing potential risk concentration

COMPLETE MANAGEMENT ACCOUNTABILITYwhereby business management, as opposed to risk control, own all risks assumed throughout the firm and are responsible for continuous and active management.

COMPREHENSIVE AND TRANSPARENT RISK DISCLOSUREto senior management, the Board of Directors, shareholders, regulators, rating agencies and other stakeholders

INDEPENDENT CONTROL FUNCTIONSmonitor the effectiveness of the business’s risk management

PROTECTING OUR REPUTATIONthrough sound risk culture characterized by a holistic and integrated view of risk and ensuring compliance with our standards and principles.

IMPACT ANALYSISCVC Finance faces 9 broad risks which can be further classified into 20 subdivisions.At CVC Finance, we endeavor to reduce the impact of major risks that can directly affect our profitability such as Credit Risk (1), Market Risk (2) and Liquidity Risk (3). On top of that, isolated incidents such as major natural disasters are also dealt with promptly and is discussed in our Business Continuity Risk (6c).

On that note, we, at CVC Finance, make risk management a continuous process.In the following section, the risks associated and CVC Finance’s responses are described in detail.

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Risk Broad Risk Specific Risk

1a

1b

1c

Credit

Default Risk

Recovery Risk

Concentration Risk2a

2bMarket

Interest Rate Risk

Equity Price Risk3a

3bLiquidity

Funding Liquidity Risk

Market Liquidity Risk4a

4b

4c

4d

Operational

People Risk

Process Risk

System Risk

External risk5a

5bStrategic

Strategy positioning risk

Implementation Risk6a

6b

6c

Technology

System failure risk

Information security risk

Business continuity risk7a

7bLegal

Compliance risk

AML/CFT Risk

8 Environmental and SocialEnvironmental Risk

Social Risk

9 Reputational Reputation Risk

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REPORT OF RISK MANAGEMENT

Risk management functions are embedded at the core of the companies’ value creation model as we accept risk in the ordinary course of business. The objective of risk management is to secure the assets and their reputation and ensure continued financial and organizational sustainability. Significant resources are devoted to this critical function to ensure that it is well articulated, communicated, and understood by all employees of the organization as it is a shared responsibility. The principal objectives are to ensure that risks accepted align with the company’s risk appetite and strategic priorities by an appropriate trade-off between expected risk and reward, enabling delivery of maximum value to key stakeholders. Sound risk management always remained a top strategic priority to CVC Finance. We strive for a robust approach to bring in the best solution to the risk and return problem.

KEY INITIATIVES IN 2021 - Ensure our risk appetite responds appropriately to changes in the operating environments

and manage the exposures accordingly. - Proactive measures to maintain superior asset quality and strengthen the recovery efforts

to squeeze NPL. - Maintain a sound liquidity position under the prevailing stressed condition and be complied

with all regulatory requirements. - Embed a resilient risk culture through the organization; thus, every member becomes

aware of managing risk respective to their levels. - Continues endeavor to strengthen our capabilities to mitigate ICT risk and creating cyber

risk awareness. - Strengthening operational risk management activities by developing a comprehensive

framework for identification, assessment, measurement & mitigation techniques of operational risk.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMThe companies’ risk management approach is underpinned by a sound and robust Risk Management Framework. The framework is designed in line with the regulatory standards and industry best practices.

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In support of business strategies, risk management has become an essential catalyst for strategic decisions when matching the necessary levels of risk taken with the desired number of rewards. Risk management is the company’s core discipline which is based on a collection of key concepts that serve as the basis for driving a solid culture, policies, and processes for risk management:

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01 Establish risk appetite &

strategy

The risk appetite is established in a bottom-up approach to

develop an ownership culture at the functional level and

approved by the board. It articulates the nature, type, and status

of risk the company is willing to take within a specified period.

02 Assign adequate

capital

The approach to capital management is pushed through strategic

goals and money owed for the relevant regulatory, economic

and commercial environment in which the company operates.

03 Ensure proper

governance and oversight

function

There is a vibrant, influential, and compact institutional governance

structure with concisely described, fine, and constant lines of the

organization's obligation.

04 Promote strong risk

culture

The company actively promotes a strong risk culture where

employees are encouraged to take accountability for identifying

risks and for challenging inappropriate actions.

05 Implement sound risk

frameworks, policies, and

procedure

Implementation of comprehensive risk systems, policies, and

techniques to ensure that practices and processes for risk

management are successful at all levels.

06 Execute strong risk

management practice and

processes

Robust risk management processes are in place to actively

identify, measure, control, monitor, and report risks inherent in all

products and activities are undertaken by the company.

07 Ensure sufficient

resources and system

infrastructure

Adequate resources, facilities, and systems are set up to allow

effective risk management.

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RISK MANAGEMENT FRAMEWORK

The company’s risk management framework is applied on an enterprise-wide basis and consists of three key elements:

A) Risk Governance and Oversight

B) Risk Appetite

C) Risk Culture

D) Risk Management Practice and Process.

A) RISK GOVERNANCE AND OVERSIGHTA formalized, consistent and efficient governance structure is established in the organization that facilitates the board and senior management’s active participation in the risk management process to ensure a uniform perception of risk across the company.

Our governance model places responsibility and ownership in maintaining an acceptable degree of freedom and division of duties among the three lines of defense. The management of risk broadly takes place at different hierarchical levels and is emphasized through various levels of committees, business lines, control, and reporting functions.

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companies risk management framework is predicated on the three lines of defense model. Within this model, functional business line staff and management (the first line) acquire and own the risks. In contrast, the risk management forum and other control functions (the second line) provide independent oversight and objective challenge to the first line of defense and monitoring and control of risk. Finally, the internal audit department (the third line) assures that control objectives are achieved by the first and second lines of defense.

BUSINESS LINE (1ST LINE OF DEFENSE)

RISK MANAGEMENT AND OTHER CONTROL FUNCTIONS(2ND LINE DEFENSE)

INTERNAL AUDIT(3RD LINE DEFENSE)

• Own the risk associated with business activities.

• Exercise business judgement to evaluate risk.

• Ensure activities within the Bank’s risk appetite and risk management policies.

• Independently facilitate and monitor the implementation of effective risk management practices.

• Responsible for policy development measurement & reporting, limits & controls, oversight & monitoring.

• Provide objective challenge to the first line of defense.

• Provide training, tool and advice to support policy and compliance.

• Independent monitoring and oversight function.

• Focus on governance framework and control system.

• Audit findings reported to management and audit Committee of the Board

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ROLE OF BOARDThe board acknowledges its role in developing robust risk management and internal control framework for the company and evaluating its adequacy and effectiveness in identifying, analyzing, and responding to risks to achieve its objectives.

The Board of CVC Finance plays a significant role in the supervision of risks and assessing the overall level and categories of risk that the company is prepared to accept to achieve its strategic objectives (Risk Appetite). The board actively participates in setting the goals and strategies of the company and ensures that the relevant risks are appropriately mitigated within its agreed risk appetite.

Risk Management Committee is the ultimate policy-making platform for a company’s risk management. The committee supervises:

Identification and assessment of

company’s risks and guide management

to formulate the strategies.

Implementation of effective risk

governance culture.

Periodic review and approval of the

company’s risk management policy.

Implementations of Risk management

policy.

MANAGEMENT RESPONSIBILITY

Management is responsible for implementing the board’s policies and procedures on risk and control, and its roles include:

Identifying and evaluating the risks

relevant to the company’s business and

the achievement of business objectives

and strategies;

Framing relevant policies and measures

to manage these risks in line with the

company’s strategic vision and overall

risk appetite;

Designing, implementing, and

monitoring the effective implementation

of risk management and internal control

system;

Implementing corrective actions to

address the compliance deficiencies as

directed by the board; and

Reporting to the board on any changes

to the risks or emerging risks and

mitigation actions taken promptly.

B. RISK APPETITE

Risk Appetite refers to the broad types and levels of risks a company is willing to undertake in implementing its business strategy. The risk appetite is ingrained in the strategic planning process. It remains dynamic and responsive to the changing internal and external drivers such as market conditions, stakeholders’ expectations, and internal capabilities. Setting the risk appetite is an exercise where a company’s risk capital is allocated effectively, and risk limits are set within the organization’s placed risk strategy. Thus, the risk appetite is set, ensuring central business units align with the board of directors’ business objectives. Considering the importance and regulatory requirement, the Risk Management Forum of CVC Finance develop a risk appetite statement.

C. RISK CULTURE

The company’s risk governance structure, risk appetite, and risk management tools are influenced by the organization’s risk culture. The risk culture is built upon:

Tone from the top: Clear and consistent

communication from leaders on

risk behavior expectations and the

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importance of CVC Finance’s values.

Accountability: Under the three lines of defense model, all CVC Finance employees are

held accountable for risk ownership and their actions in every business function.

Training: CVC Finance continually reinforces risk culture by providing practical and

informative compulsory and elective training modules online and offline for relevant

employees.

D. RISK MANAGEMENT PRACTICES & PROCESSES

Risk management practices and procedures provide for comprehensive enterprise-wide detection, assessment, control, monitoring, and reporting of risk exposure.

1. Identification

Risks inherent in products, processes, and business

strategies are defined, recognized, and assessed.

Enable early risk identification and ensure that sound risk

management procedures are in place for product risk

management and control.

Adopt a forward-looking approach to detect emerging risks to

ensure adequate measures are taken to minimize the company's

exposure.

2. Measurement

Develop risk measurement strategies across multiple risk factor

dimensions to ensure constant reassessment and risk detection.

3. Controls

Implement risk mitigation strategies to manage current risks

or, on some occasions, to prevent the occurrence of new or

emerging threats.

4. Monitoring &

Reporting

Monitor forward-looking key risk indicators and early warning

signals to ensure that sufficient and timely action can mitigate

any potential risk to the company.

Report the implementation status regularly to the Management

Level and the Board of Risk Committees as well.

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PRINCIPLE RISKS IN FY 2021 AND ACTIONS UNDERTAKEN TO

MITIGATE

PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATE

Credit Risk Strategic priority

MITIGATION ACTIONS

This risk comprises default risk, recovery risk, and credit concentration risk. This risk arises from the failure of an obligor or counterparty to perform their contractual obligations per agreed terms. Additionally, Fund diversion, over financing, cash crunch, and wrong product can ignite credit risk.

Maintaining healthy asset quality with optimal risk-reward considerations as well as managing risks efficiently while reaching untapped segments.

Maintaining healthy asset quality with optimal risk-reward considerations as well as managing risks efficiently while reaching untapped segments.

We have implemented a comprehensive, portfolio-based risk management approach to ensure sustainable long-term growth in all businesses/ markets and to remain within our risk appetite throughout the business life cycle.

Proactively perform regular portfolio scrutinization and conducted stress tests on high-risk sectors to identify and monitor emerging risks to promptly take appropriate remedial actions.

Specialized team have developed having robust industry-specific knowledge to identify and assess risks and opportunities arising from critical industries (e.g., ready-made garments, construction, agriculture, etc.)

Continuously trace customers’ cash flow and match it with purpose statement to identify fund utilization, fund diversion, and seasonal impact over the business.

Conduct regular market visits to get customers’ feedback to reinforce a need-based credit structuring policy.

Implemented two-step document verification when refinancing and updating personal net worth (PNW) statement each year to safeguard the organization’s interest.

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Review of collateral documents and a project visit by CVC Finance employees to check acceptability.

Defined precise target market and risk acceptance criteria, including lending parameters and risk-return expectations to ensure that risk-returns are within our risk appetite and risk standards.

Review CIB on regular intervals and trace financial ratios, specifically debt-equity and DSCR.

Established stringent monitoring mechanism to review products and sectoral lending cap and discouraging sectors.

Enhanced dmechanism to ensure that risks are comprehensively and accurately identified to support well-informed decision-making for our businesses and clients.

PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATEMarket Risk Strategic priority

Emerges in the form of Interest Rate Risk and Equity Price Risk. Due to adverse market movements, the risk of potential loss in financial instruments’ value, such as market instruments, debt securities, and equities.

Optimizing profitability of marked-to-market products within the constraints of liquidity and market risk appetite for the organization.

MITIGATION ACTIONS

Strictly follow Board-approved investment policy, market Risk Policy, and limit packages cap exposure in line with the strategic risk appetite.

Improved the quality of the risk reports, including the profit & loss to market movements and risk positions.

Conduct Gap analysis regularly so that there is no chance of deviation from the approved limit.

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PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATE

Liquidity Risk Strategic priority

For an NBFI, liquidity risk emerges in two forms- Funding Liquidity and Market Liquidity. Liquidity risk is a risk to an institution’s earnings, capital, and reputation arising from its inability or unexpected higher cost to meet its contractual obligations promptly without incurring unacceptable losses when they are due.

To maintain healthy liquidity compared to the organization’s balance sheet size to tide over any unforeseen stress scenario.

Maintaining competitive cost of funds.

MITIGATION ACTIONS

The organization’s liquidity and interest rate risk management framework are spelled out in our Asset Liability-Management policy.

A robust mechanism to comprehensively track cash flow mismatches under normal and stressed conditions and critical ratios has also been implemented.

An extensive intraday liquidity risk management framework has been developed for monitoring intraday positions during the day.

Continuous monitoring of CRR, SLR, funding profile, balance sheet movement, and key ALM ratios.

Tracking major changes in the macro-economic environment and acting accordingly.

Implemented contingency funding plan as an indispensable part of liquidity management.

Diversification of funding portfolio with easily accessible secured credit line

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PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATEOperational Risk Strategic priority

Operational risk is the risk of financial losses related to a breakdown in internal control and corporate governance. Such breakdown can result from inadequate or failed internal processes, controls, systems, and procedures due to employee error or breach, fraud, or external events. Operational risk has the most distressing impact on the organization and is difficult to anticipate.

Leverage digitization to enhance customer satisfaction and heightened operational efficiency.

MITIGATION ACTIONS

A Board-approved governance structure is in place with a detailed framework and processes, internal controls, information technology, and fraud monitoring mechanisms.

Top-level management has set an appropriate tone through effective employee engagement and proactive communication between the cross-functional department.

Established independent control and support functions that monitor operational risk daily.

Segregated dual control mechanism (maker and checker concept) to minimize the error and prevent fraud.

Implemented a File Management (E-Doc) system for protection against any possible data loss.

A business continuity plan (BCP) and Disaster recovery plan (DRP) are in place to smooth out an operation during adverse conditions.

Required documents have been vetted by qualified legal personnel.

Multiple telecommunication channels and alternative power sources have ensured to enable business continuity plan.

Designed a network system throughout the organization to facilitate the data collection and analysis to measure our operational risk exposure.

Service Level Agreements with external vendors have ensured to mitigate system risk arise from network redundancy.

Developed IT Dashboard to monitor day-to-day IT risk within the organizational set-up.

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PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATEStrategic Risk Strategic priority

Strategic risk is the risk of suffering an operating income shortfall due to improper positioning or improper implementation of strategies. The strategic risk may arise from changes to the competitive landscape or regulatory framework or ineffective positioning in the macroeconomic environment. The strategic risk could also occur due to a failure to execute strategy and/ or failure to take actions to address underperformance effectively.

To achieve targeted business volumes and margins for expanding through organic business growth.

MITIGATION ACTIONS

Conduct market survey and quarterly business review to compare our position with industry benchmark.

Prepare funding need projection on a monthly, quarterly, and yearly basis along with the cost of fund.

Inclusive planning across the organization through collaboration from all businesses and departments.

Prepare monthly forecast based on inputs from all business departments and liability team and reviewing reasons for variances.

Financial analysis is conducted every month to identify variances from the budget.

Implemented intelligent KPI module within the company for benchmarking with best practices from both local and global arena.

Initiated necessary software development to enhance data visualization and standardization of reports to capture and communicate more concise and actionable way.

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PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATEInformation Technology Risk Strategic priority

Risk arises due to system breakdown, disruptions, or not updating technological infrastructure. IT risk impacts privacy, accessibility, and integrity of information and services related to information technology, leading to financial losses and reputational risk to the organization. IT risk comprises system failure, information security, and business continuity risk.

To protect client data with top-notch security and to keep the operation smooth.

MITIGATION ACTIONS

IT Department conducted a comprehensive staff training program on information system security awareness to all users in response to recent cyber-attack threats.

Continuously enhance security controls such as our cyber defense capability and oversight of our outsourced vendors.

To check the effectiveness of the prevention control system, the IT department conducted surveillance via internal detection controls.

IT infrastructures have been updated regularly to minimize the risk of disruptions and mitigate the risk of any single point of failure.

Continuous cyber risk assessment on our outsourced service providers to ensure they comply with our security requirements.

Future technological needs of the organization were reviewed and identified as part of the strategic plan.

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PRINCIPAL RISKSIN FY 2021 ACTIONS UNDERTAKEN TO MITIGATERegulatory Risk Strategic priority

Regulatory risk can arise from the defective transactions and failing to take appropriate measures to protect assets owned by the company. These frequent regulation changes could also adversely impact the organizations’ competitive position and capacity to conduct business efficiently.

Remaining up-to-date and complying with the regulatory requirements.

MITIGATION ACTIONS

The CVC Finance Board and top management have set an appropriate attitude to align internal policies and procedures with national laws and regulations.

Maintaining continuous engagement with regulatory authorities.

Periodically review existing policies, processes to strengthen the internal control environment so that, proactive actions can be taken in response to new and upcoming regulations.

Scanning regulators’ websites regularly to stay up-to-date with the latest changes and established timely communication of updates to the concerned departments.

Continuous enhancements to our process to respond to key regulatory trends.

Continuous efforts to improve our compliance and awareness culture to meet applicable laws, regulations, and supervisory expectations.

Conducted organization-wide training program on AML/CFT policies and procedures to assess cash transaction, KYC, and customer risk grading.

Continuously monitor media reports to keep updated regarding AML issues.

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PRINCIPAL RISKSIN FY 2021

PRINCIPAL RISKSIN FY 2021

ACTIONS UNDERTAKEN TO MITIGATE

ACTIONS UNDERTAKEN TO MITIGATE

Social & Environmental Risk

Reputation Risk

Strategic priority

Strategic priority

Regulatory risk can arise from the defective transactions and failing to take appropriate measures to protect assets owned by the company. These frequent regulation changes could also adversely impact the organizations’ competitive position and capacity to conduct business efficiently.

Regulatory risk can arise from the defective transactions and failing to take appropriate measures to protect assets owned by the company. These frequent regulation changes could also adversely impact the organizations’ competitive position and capacity to conduct business efficiently.

Ensuring that the resource must be channeled towards a non-environment-challenging sector.

Delivering superior customer experience through wide range of products and services.

MITIGATION ACTIONS

MITIGATION ACTIONS

Conduct rigorous checking of project category and purpose statement before disbursing a facility.

Regularly follow up with clients’ Environmental Clearance Certificate within a specified deadline.

Perform Environmentally and Social Due Diligence on a defined interval.

Established monthly/ quarterly reporting system to top management on activities regarding ESR-related activities.

We have redesigned our website to create a one-stop service platform for our customers to manage their queries, complaints better, and fulfill their needs.

Continuous monitoring of laws and regulations and ensuring those are compiled accordingly.

Continuous collaboration between the three lines of defense to safeguard the organization’s information assets, secure data storage, enhance risk and control metrics and comply with related regulatory requirements.

A non-financial risk policy is under development which will incorporate a broader range of emerging non-financial risk comprising holistic governance model, roles and responsibilities, control system, monitoring and reporting of non-financial risks exposures on a timely basis.

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BUSINESS CONTINUITY PLAN AT CVC FINANCE

BUSINESS CONTINUITY PLAN (BCP) AT CVC FINANCE

Ensuring seamless operations

AN OVERVIEW OF THE BCP

The world we are living in is becoming increasingly unpredictable, having a solid back-up and alternative arrangement is necessary. At CVC Finance, we have introduced a well-defined Business Continuity Plan (BCP) and communicating the plan as the COVID-19 impact disrupted our operational layout. Our BCP is based on regulatory guidelines and subject to regular review. It is guided by a business continuity policy and procedure with clearly defined roles and responsibility. CVC Finance adopted a proactive approach and implemented multiple measures both before and after imposition of the country wide lockdown Starting from March 26, 2020 the Company began to communicate all messages to safeguard health of CVC Finance employees.

What are the key plans under the BCP?

Plan Objective

Business continuity Resume critical business operations after a disaster

Emergency responseDeal with site-level emergency at office premise involving life safety issue such as fire.

IT Disaster recoveryRecover critical business applications during hardware/network/power failure

Pandemic responseFacilitate an organized and speedy response to any pandemic incident threatening CVC Finance’s employees or disrupting critical business functions.

Crisis managementTackle organization wide disasters such as pandemic, terrorist attack and cyber-attack.

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ENSURING BUSINESS CONTINUITY DURINGTHE LOCKDOWN TO FIGHT COVID-19

CVC Finance rose to the challenge of delivering customer services during the outbreak of the COVID-19 pandemic. Our first priority was to ensure the safety of our people who were advised to either work from their homes or from a nearby locations. The Crisis Management Team Prioritized critical functions such as IT and Treasury to ensure minimal or no business disruption.

Pre-lockdown Formation of the Central Emergency Response Team comprising of MD, DMD and Head

of HR and Head of IT.

Launched BCP

IT, HR and Risk team’s set-up guidelines for work from home.

Post-lockdown Released guidelines on work-from-home.

Message from CVC Finance Top management emailed to all employees

Monitored key metrics and published daily dashboards

Worked out post lockdown plan for scale up operations

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PERFORMANCE METRICS

Million Percentage

IRON, STEEL AND ENGINEERING 719.34 17.39%

FOOD PRODUCTION AND PROCESSING IND. 545.69 13.19%

SERVICE INDUSTRY 472.83 11.43%

TRADE AND COMMERCE 425.18 10.28%

POWER, GAS, WATER & SANITARY SERVICE 393.24 9.50%

TELECOMMUNICATION AND IT 312.22 7.55%

OTHERS 293.05 7.08%

CEMENT AND ALLIED INDUSTRY 239.83 5.80%

GARMENTS AND KNITWEAR 180.75 4.37%

HOUSING 159.13 3.85%

AGRICULTURE 138.93 3.36%

SHIP MANUFACTURING INDUSTRY 114.04 2.76%

HOSPITAL 65.14 1.57%

BROKERAGE AND SECURITIES 47.50 1.15%

TEXTILE 16.65 0.40%

LEATHER AND LEATHER GOODS 7.43 0.18%

PHARMACEUTICALS AND CHEMICALS 3.36 0.08%

PAPER, PRINTING AND PACKAGING 2.94 0.07%

Total 4,137 100.00%

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STRATEGY ON NPL MANAGEMENT

Non-performing loan (NPL) is a debt obligation that is in default due to the fact that the borrower has not made the scheduled payments for a specified period. In a banking industry, NPL has been calculated by adding nonaccrual loans of a particular period with existing NPL. The non-performing asset is therefore not yielding any income to the lender in the form of principal and interest payments. Therefore, managing NPL should be core function for CVC Finance Limited as it can increase its asset quality and profitability in business.

NPL MANAGEMENT [BUSINESS PROCESSES AND STRUCTURES]NPL management is an integral part in all the steps of a loan. CVC Finance Limited considers NPL management as a top-most priority and starts NPL management from the very beginning of business process. We can divide NPL management in couple of sections. Such as:

CREDIT PROCESS AND CREDIT CULTURE: CVC Finance Limited has developed a credit culture and policies which serve this organization to minimize the NPL ratio. Our teams of credit risk management, corporate finance, SME, consumer finance, and special asset management are working for reducing non-performing loans and serving for best interest of this organization. The performance of those teams and departments has been analyzed or reviewed with the pre-set targets periodically. Percentage of NPL in particular products and amount of collection of dues are used as a measure of performance appraisal of all the related departments.

REVIEWS AND APPROVALS OF CREDIT PROPOSAL: Credit risk management department is responsible for reviewing and analyzing all the credit proposals. After receiving documents and information memorandum CRM check validity of all the documents. After that, CRM goes through several steps to decide the risk factors of the client, such as vising client, analyzing credit risk, preparing projected financial statements, checking credit background, grading credit risk, structuring credit facility, and monitoring credit implementation. These steps are used for ensuring protection against potential NPL.

CREDIT LIMIT: Credit proposals are recommended by CRM and reviewed by Credit Committee. Credit committee has the limit of sanctioning loan and above that limit Executive Committee and Board of Directors have the authority to approve credit proposal. Credit committee consists of Managing Director, Deputy Managing Director, Heads of Business Division, SAM, and CRM Division. They use wide variety of inputs from different areas and approve credit after discussion.

POST SANCTION/PRE-DISBURSEMENT MEASURES: Even after the approval of credit facilities, the post approval activities like credit facility documentation, and execution are carried out by separate departments. A comprehensive list of eligible securities has been prepared with a view to give a flexibility in overall business process. However, CVC Finance’s preferred securities are lien on FDR, Mortgage, lien on Share/Stock, Corporate Guarantee and Personal Guarantee. Apart from these security

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arrangements, Assignment of Bill will be generally preferred for work order finance facility and rest of the securities will be discouraged. Pari-Passu Security agreement is mostly applicable for syndication and structured financing.

Mortgage & other Collateral play a pivotal role to protect the best interest of a lender against loan/credit facilities provided by Banks and Financial Institutions. In the event of loan default, proper mortgage & other collateral will reduce the risk of overall lending portfolio. Banks and FIs may recover or adjust the outstanding liabilities of defaulter borrowers through selling out the mortgage properties and other collateral if there is proper collateral coverage against such finance is in place. Asset management department and legal affair department follows and reports about the existing credit lines and defaulted credits as well.

- Apart from those, several steps are taken by the management of CVC Finance Limited for encountering the issue of NPL:

- Early alerts are send off to those borrowers who have irregular or due payments for a particular period.

- After disbursement, CRM department visits clients for monitoring the use of the fund in the right purpose.

- Regular due date reminders, through SMS, e-mails, letters, meetings, visits and discussions are conducted for ensuring that the client can carry out his or her repayments within allocated time.

- Special asset management (SAM) department is in the place to directly monitor, put into action, and intensify the recovery through internal recovery officers.

- Business compliance are working with CRM for mitigating the risk factors and implementing legal solutions for recovering due amount.

- Internal control and compliance department is monitoring the integration of the function of different departments and ensures the reduction of conflict of interest. In addition, ICC is working with CRM for reviewing, analyzing, recommending policies, procedures, and structures for minimizing NPL. Finally, after ICC audit checking the process and policies, the post facto necessities are completed.

REVIEWS FROM THE TOP:Board of directors and senior management is vigilant to monitor and review the relevant aspects and provides necessary directions and guidance time to time. All the activities are designed to keep the NPL ratio below the industry average as CVC Finance Limited is already enjoying NPL ratio which is below the industry average.

Strategies for NPL managementCVC Finance Limited has been developing and following several strategies for declining NPL ratio. Strategies are developed and used by the combination of different wings of this organization.

1.1 PERIODICAL PRODUCT WISE ANALYSIS Credit risk management department conduct analysis of existed loans time to time. This analysis has been performed based on the differences of the clients of different products. By this way, CRM tries to find out the situation which could make a loan non-performing. Changed conditions of any particular client could change the rating of that client.

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1.2 THE EARLY ALERT REPORTEarly alert report should be completed in timely manner by RM and forwarded to CRM for approval to affect any downgrade. After approval, the report should be forwarded to credit administration, who is responsible to ensure the correct facilities and borrower’s risk grades are updated on the system.

1.3 RISK MITIGATION STRATEGIESCRM has the responsibility for developing mitigating strategies for identified risks. Mitigating factors for identified risk should be ensured by in both the pre and post approval stage. CVC Finance Limited is concerning about some risks and used these as an indication of increasing possibilities for NPL. Margin sustainability and/or volatility; High debt load; Overstocking or debtor issues; Rapid growth, acquisition and expansion; New business line/product expansion; Management changes and succession issues; Customer or supplier concentrations; and Lack of transparency or industry issues;

1.4 RECOVERY PROCESSCVC Finance Limited is using diversified loan recovery process as each client has different reasons and situations in repaying the debt. There are some common measures which are useful to recover bad debts: Legal notice Report to central banks and other agencies Terminate the loan Ask the guarantor for payment Encashment of security LitigationThe application of above-mentioned measures are contingent upon the age of the overdue installments, causes of the overdue, etc. Few of the applications are as follows:Immediately after overdue of one installment, telephonic communication/SMS in initiated by monitoring officer. Upon falling to obtain positive result, default letter is issued to the client after closure of the due month. If the letter does not bring in result an official visit is made by a collection officer to resolve the matter. If two installments are overdue, the case is analyzed and necessary corrective action is taken by sending an overdue status and a claim letter; simultaneously telephone calls and/or visits are made to give the continuous reminder. If above action fails, a second reminder is given to the client through letter along with telephonic conversation. If consecutively three installments are overdue, the client is taken as problem case. In this case a higher-level management meeting is conducted, to take corrective action with respect to rescheduling, early realization etc. If above measures fail, a letter showing the details of overdue and already taken corrective measures is sent to the client with C.C. to the guarantor and security provider. After six monthly installments overdue, or the account is overdue for six months, the case is taken as suspended case and legal notice, reporting to central bank, termination loan, security encashment, final provisioning, litigation

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etc. are carried out chronology.

NPL STATUS (DECEMBER 31, 2021) The formal financial sector faces a major threat in 2021, as the rate of non-performing loans (NPLs) continues to rise at an alarming rate, owing to loan borrowers’ inability to repay their loans due to the loss of their bread and butter at that time. However, we were able to restrict this at 11.61% at the end of 2021, reasonably below the industry average.

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REPORT ON GOING CONCERN

CASH FLOW ANALYSIS

CVC Finance Limited’s consolidated cash flow statement for the period ending December 31, 2021 demonstrates positive operating cash flows of 19.34 million Taka. Which reflects the organization’s capabilities in terms of its capacity to repay its debts, respond to changing conditions  all of which will contribute to long-term success.

EXPANSION OF BUSINESS

Throughout the year, CVC Finance Limited has launched newly designed deposit and loan products for the benefit of potential clients and to increase the number of clients on board. As a consequence, as compared to the previous year, the deposit growth rate grew significantly. CVC Finance Limited is also concentrating on using mobile applications to digitize the deposit processes. We are confident that the CVC Finance Mobile Application will bring a revolution in money micro-depositing.

STRONG CREDIT RATING

CVC Finance Limited received “A+’ in long term and “ST – 2” in short term credit rating. Which reflects the stability of the company. This indicates the company’s stability in maintaining a strong capital base, high-quality assets. 

STRONG EQUITY BASECVC Finance Limited’s total equity as of December 31, 2021 was 128.65 million Taka, increasing 1.94% percent from December 2020, demonstrating the company’s long-term survival.

CONSISTENT PAYMENT OF DIVIDEND

Since its inception, CVC Finance Limited has paid a continuous dividend to its shareholders. This demonstrates the company’s strength to keep its assurances to its shareholders. CVC Finance Limited has paid total 23.10-million-taka cash dividend (2% cash dividend) to its shareholders for the year ended 2020 in addition to the 3% stock dividend in the same year.

CLIENTS SATISFACTIONCVC Finance Limited makes every effort to satisfy its clients. Our well-equipped customer service department is always available to assist clients. Furthermore, all Relationship Managers are committed to bringing the company’s service to clients’ doorstep. All of this contributes to the clients’ satisfaction.

CORPORATE ENVIRONMENT AND EMPLOYEE SATISFACTIONCVC Finance Limited is a nice  place to work with a welcoming atmosphere. The company tries to be honest and treat all employees fairly, resulting in a healthy corporate culture. The company offers a very competitive remuneration package, as well as a variety of employee benefits such as maternity leave, performance bonuses, gratuities, and provident funds, all of which are regarded to be important for employee satisfaction.

INTEREST COVERAGE RATIOCVC Finance Limited’s consolidated interest coverage ratio was 0.51:1 as of December 31, 2021, indicating a strong ability to serve its debt.

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MAINTENANCE OF SUFFICIENT CAPITALAccording to the regulations, an NBFI’s total capital should be at least 10% of its Risk Weighted Assets (RWA). Despite strong RWA expansion, CVC Finance Limited continuously maintains its capital far above the standard required. Furthermore, CVC Finance Limited had  maintained a minimum Capital Adequacy Ratio (CAR) of 24.18% in the year of 2021.

NON-PERFORMING LOAN (NPL)CVC Finance Limited places a high priority on keeping non-performing loans rate to a minimal level. The overall NPL rate at the end of 2021 was 11.61%, which is much lower than the industry average.

CREDIBILITY IN PAYMENT OF OBLIGATIONCVC Finance Limited has an excellent degree of credibility when it comes to meeting its obligations to lenders and suppliers. The Company is extremely conscientious about adhering to the terms of any payment or repayment obligations. Our successful board of director’s plan has resulted in this. Despite the challenging financial situation, we have met all of our obligations on time.

FAITH OF DEPOSITORS TOWARDS THE COMPANYSince its inception, CVC Finance Limited has worked to establish positive relationships with its depositors, as well as a strong track record of meeting its obligations to them. The depositors’ continued support enabled the company to continually retain a good quantity of deposits while also prospering.

ABILITY TO MEET OPERATIONAL EXPENSESCVC Finance Limited has had no challenges to covering its operating costs. We successfully

covered our operating costs even during the pandemic period in 2019-2020, when many companies struggled to meet their operational costs and had to shut down their operations for a long period of time. CVC Finance Limited has a reputation for paying vendors promptly.

POSITIVE KEY FINANCIAL RATIOThe financial ratios of the CVC Finance Limited’s show that it has a strong financial structure and promising future possibilities. All financial ratios are presented in the financial highlights section of the annual report.

LESS RELIANCE ON SHORT TERM BORROWINGCVC Finance Limited’s total short-term borrowing is taka at the end of 2021, standing of total liabilities. It indicates that the company does not rely much on long term borrowings and focuses on the company’s vision. More reliability on short term borrowings lead the company to greater uncertainty.

STRENGTHENING OF HUMAN CAPITAL The company recruited new employees in 2021, bringing the total number of employees to 88 at the end of the year.

STRONG CAMEL RATING CAMEL is a globally recognized rating mechanism that Bangladesh Bank uses to assess the overall condition such as strengths, performance of non-banking financial institutions (NBFIs) base on the six factors. CVC Finance Limited has a decent strength and performance record according to the aggregate evaluation of Bangladesh Bank. This indicates that the company is in good shape.

MONITORING COMPLIANCE Our employee contracts, recruiting, and performance management activities all require adherence to our Code of Conduct and Ethics. Starting with executive management, we’ve set specific compliance goals. All employees must follow our Code of Conduct and Ethics

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and report any conduct that may violate the law, the Code, or company policy. Our Human Resources department can provide guidance on CVC Finance Limited’s policies, procedures, and management systems. Concerns regarding behavior, procedures, or issues can be discreetly reported to our HR department by any employee, contractor, or consultant. We have established certain training courses for newly appointed employees to assist them in adopting the principles of our Code of Conduct and Ethics and the Conduct and Ethics Policy Framework. Employees can use case studies to help them translate the Code and related regulations into real-world scenarios. This training session is compulsory of all employees every year. We just created an ISO certification-based course. Employees must certify that they understand the principles of the Code, that they have complied with them in the previous 12 months, and that they promise to comply with them in the future in declarations throughout the course. Employees must also complete issue-specific training in areas such as anti-money laundering, counter-terrorist funding, fraud, corruption, and data security. Our ‘HR Manual’ includes our Code of Conduct and Ethics, as well as important rules and processes including our ‘Anti-Bribery Policy’ and ‘Fraud and Corruption Policy’.

CHANGE IN GOVERNMENT POLICY

The management anticipates no significant changes in legislation or government policy, which may materially affect the business of the Company. Depending on the facts of above, the Directors believe that the going concern assumption is valid and that there is no substantial uncertainty in producing the financial statements.

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GENTS GALLERY OF PLAIN CLOTHES

Mr. Md.Moniruzzaman Rasel is an up-and-coming businessman. He launched his firm, Gents Gallery of Plain Clothes (cloth for shirts and trousers), after completing his BBA, however he was unable to expand his business due to financial difficulties due to COVID times.

In today’s competitive market, everyone wants the best fabrics available. A potential businessman’s major purpose is to provide clients with high-quality materials. It is quite difficult for a new entrepreneur to survive in the industry and provide the best items. A large sum of money can make a new entrepreneur’s path much easier.

Mr. Rasel had attempted to scale-up the funds he needed from a variety of sources. However, he was unable to secure the capital he required from anyone as he had hoped. He then attempted to obtain financing from other banks and non-bank financial institutions (NBFIs), but was unable to secure capital. As a young entrepreneur, he was unable to demonstrate his eligibility for financing from several banks and NBFIs.

During that time, he engaged with CVC Finance Limited about obtaining money for his company’s expansion. We, at CVC Finance Limited, make every effort to work with potential entrepreneurs who are attempting to expand their businesses. In the year 2018, CVC Finance provided him with a SME term loan of Tk. 15,00,000 (Fifteen Lac) within one week of his application. He increased his business after receiving funding from us, ensuring the best fabrics collection in his store and successfully running his firm. Now, as he had hoped, his business is growing day by day. He recently launched another store called Gents Gallery, and he plans to open more this year. We are really proud to have stood by his side at this critical period in his business’s development.During the Covid-19 pandemic in 2020, we also gave him a Tk. 4,00,000 (Four Lac) SME short-term loan with a 4.00 percent interest rate. He has completed the repayment of his previous debt with us.

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SUSTAINABILITYREPORTING

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SUSTAINABILITY AT CVC FINANCE

Economic Sustainability

Environmental Sustainability

Social Sustainability

ECONOMIC SUSTAINABILITY

SOCIAL SUSTAINABILITY

ENVIRONMENTAL SUSTAINABILITY

Our Activities:

Our Activities:

Our Activities:

- Nurturing Entrepreneurs - Capacity development - Emphasize on organic

business growth

- CSR Initiatives - Collaboration with

development agencies

- Environmental Initiatives - Developing green

products - Going paperless

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ENVIRONMENTAL INITIATIVE

Key Initiatives in 2021

ENERGY CONSERVATION

GOING PAPERLESS

To develop an in-house attitude towards the environment and society, every month an employee from each of the floors was nominated as the “Sustainability leader” regardless of designation. His/her duty was to promote sustainability through creating awareness to replace plastic products and conserve electricity wherever possible.

Notified co-workers to turn off electrical appliances when not in use.

Keeping the air condition temperature within 22 to 24 degrees Celsius.

Encouraged video conferencing to collaborate and manage vendors which leads to less usage of fuel thus reduced carbon emission.

CVC Finance aims to be a paperless office that will conserve physical space and money. In line with this goal, CVC Finance has implemented an e-file management system in 2021. Going forward it will gradually decrease the need for preserving paper-based documents and customer files. To reduce the consumption of papers CVC Finance has also taken the following initiatives-

Set printer default setting to double-sided print and use both sides of

the paper for photocopying.

Encourage employees to use smaller fonts while printing to avoid errors

and re-printing.

Keep a “recycled paper” box near every printer to encourage employees

to use as draft paper for the unofficial purpose.

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SOCIAL RESPONSIBILITY INITIATIVE

JAAGO Foundation

JAAGO Foundation is a registered civil society organization whose mission is to rebuild Bangladesh by eradicating poverty and illiteracy. In the slums of Dhaka, Bangladesh, JAAGO established the first-ever free school for underprivileged children. They’ve been working toward this goal since 2007, and they now have 4000 students. Our daily lives came to a halt as a result of the COVID-19 pandemic and subsequent lockdown. As a result, educational institutions were forced to close for the longest time possible. On September 12, 2021, schools and colleges across Bangladesh reopened after an 18-month closure, and JAAGO students returned to campus. By providing holistic education, JAAGO

aims to give vulnerable children fuller lives and brighter futures. Students are given essential school supplies such as books, uniforms, bags, stationery, medical check-ups, nutritious boosts, and hygiene products.The Managing Director of CVC Finance Limited met with Mr. Korvi Rakshand, the Founder of JAAGO, to discuss their educational program needs for 2022. After a fruitful discussion CVC Finance Limited decided to sponsor the furnitures and fixtures of the new classrooms of JAAGO Foundation. This sponsorship was a great opportunity for CVC Finance Limited to partner with JAAGO for their educational needs.

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BANCAT

CVC Finance Limited and Bangladesh Cancer Aid Trust (BANCAT) joined hands by signing an MoU for engaging in BANCAT’s Patient Adoption Program. As a new and progressive financial institution in Bangladesh, CVC Finance always tried to partner with the organizations which are authentic, working dedicatedly in the frontline to serve people with integrity and assisting the less fortunate to try and change their situation in a positive way in the society. BANCAT (formerly known as Bangladesh Cancer Aid Foundation) is an organization that makes an effort to help those brave hearts who fought or are fighting their war against a terminal disease.

Under Patient Adoption Program, CVC Finance has taken responsibility of treating three cancer patients with a small contribution every month. The treatments range from patient’s doctor visit fee, chemotherapy/radiotherapy, medicine purchase, hospital admission to operation and such.This engagement will further encourage and create awareness for the disease and connect present patients with survivors to promote a positive mindset. CVC Finance Limited wishes to be engaged with these patients in future years as well.

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GREEN BANKING DISCLOSURE

Climate change is a burning issue for the whole world especially for the countries like us. To cope up with and to avoid the adverse effect of this climate change to our business and to our society as a whole we are to address the environmental issues very seriously. That is why every sort of business activities should be in line with the betterment of the environment during making any profit. CVC Finance believes that each small step to “Go Green” will take Bangladesh to a long way in building a better future, Based on the guideline issued by the Bangladesh Bank through DOS Circular # 01 dated June, 01, 2008 CVC Finance designed its products and service in such a way that:

Ensure that it does not have any negative impact on the economic, social and

environmental issues;

Ensure that it mitigates the negative impacts and bolster the benevolent impacts;

Ensure that its action programs and community investments reduces social exclusion

and inequality and addresses the keys to sustainable development challenges;

Select borrowers in scrutiny of the environmental and social impacts of their

proposed undertakings.

Re-use and recycle where possible and disposing-off non-recyclable items responsibly are emphasized, which minimizes the impact on the environment. It is expected that by adopting straightforward, environment friendly initiatives, the company will raise awareness amongst stakeholders and the wider community.

The company regularly reviews its environmental policy to ensure that it reflects changes in regulations and best practices. In line with the growing global environmental consciousness, CVC Finance has always been keen on portraying a brand image that promotes environmental sustainability. Detailed due diligence is performed by company’s relationship managers and credit risk analysts to identify environmental impacts of projects with possible critical environmental implications.

Client compliance with Environmental Conservation Act 1995 and Environmental Conservation Rules, 1997 is thoroughly investigated during the project appraisal process. Besides, a report on environmental checklist prepared by the company’s Internal Control and Compliance department is regularly presented before the company’s risk management forum’s meeting.

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HUMAN RESOURCESMANAGEMENT

Our most valuable assets are our employees. As the COVID-19 pandemic took hold and shifted personal and professional lives, new and flexible thinking was required to motivate, engage and manage talent. The future of the workplace had already been evolving but the pandemic set in motion acceleration in efforts and re-prioritization on management agendas. At CVC Finance, we care about our employees&#39; health and well- being, as well as their professional development, innovative capacity, and drive for success. They are our true assets as we seek to expand.

We believe in value-driven human capital, so we nurture our employees so that they are capable and motivated enough to manage financial and intellectual capital to deliver desired results. Better skills can increase an employee&#39;s value in the workplace, and employers who hire highly skilled workers can gain a significant competitive advantage through human capital. A required skill set combined with a positive attitude forms a solid foundation for our human capital. At CVC Finance, our employees own our values, adhere to the processes, deal professionally with customers and other stakeholders, and become more efficient and effective in a team-centered environment.

Our emphasis on human capital enables our human resources to use their skills, skills, perspectives, expertise, and observations to continuously improve and develop our services, which meet the adjusting needs of our customers and clients.

BASIC SAFETY RULES AND EQUIPMENTBasic safety rules and programs like hand washing, sanitization, and disinfection of thewhole office area, mitigate a few employee’s concerns and anxiety. By proactively

thinking about the organization’s best health practices, safety and health equipment was provided in required places. The employees and staff were continuously updated about the Health guidelines for basic precautions.

Encourage social distancing by asking staff to not only limit travel and large group gatherings, but also avoid handshakes, hugs, and other physical interactions.

Human Resources department was also a part of the CVC Finance’s COVID planning team that executed employee messaging, return to work policies, cleaning protocol and signage.

EMPLOYEE WELLNESS AND CAREThere was no pay reduction in 2021 due to the COVID-19 pandemic. Rather, we ensured annual salary increments, performance bonuses, and promotions like every year, based on the performance of the employees till the month of December 2021.

There was also no downsizing because of the pandemic. Rather, we arranged virtual joining for employees, who were recruited before and right after the lockdown which was due to COVID-19. After the lockdown was over, our hiring of new employees continued to support business growth. We even allowed a good number of fresh graduates to do internships at CVC Finance last year during the pandemic.

We continued to pay monthly incentives to achievers in sales and ensured a structuredprocess for managing underperformers.

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LEARNING CULTUREA skilled workforce will inevitably boost the company’s performance and thus CVC FINANCE focuses on the continuous development of the workforce. This process starts with training need identification. Depending on the nature of work and relevant skills needed, individuals are identified for training. There were 56 training programs run in 2021, totaling approximately 3800 man-hours.

Employee Learning &amp; Development continued virtually even during the pandemic, combining both internal and external resource persons, which was even higher than in previous years. Arranging internal and external training for the employees to keep up with the speed of the evolving business world. So far, we have organized the below-listed training for the employees, depending on the needs: AML-CFT, Awareness Training Attendance Register, Banker&#39;s Book Evidence Rules, Basic Training on Microsoft Excel, Brand Positioning Exercise, Certificate Course on IFRS, CertifiedEthical Hacker, Certified Hacking Forensic Investigator, Certified Penetration Testing Professional, Certified SOC Analyst (CSA), CRM Training, Facebook Marketing Tools, Human Resources Management Transformational Skill of DCCI, Interest Rate Risk in the Banking Book (IRRBB) &amp; its impact on Bank, Internal Auditor Training on ISO 27001:2013, Managing Accounts - Best Practice, NFBI Statistics (NBDC, NBFI-2 and NBFI-3) Data Reporting, Oracle Certified Professional Course, Orientation Program for new joiners, PowerPoint Master-class, Sales Training, Training Program of SustainableFinance from CVC Finance Limited.

A remarkable number of innovative virtual employee engagement initiatives were implemented throughout the year to boost employee morale and minimize their mental health implications due to the pandemic. The safety of our employees was given the highest priority. Only 40% of our employees attended office by rotation during the initial days of COVID-19 and still, CVC Finance achieved a

satisfactory amount of growth &amp; profit in 2021. The HR team was in constant touch with all employees during the whole period to know about the well-being of the employees and their family members and provided administrative support, if and when required.

In the upcoming year, initiatives will be taken to further improve productivity through the development of our core banking software, including a greater alignment of the workforce strategy with the business plan. We are working to develop an internal talentpool that is qualified to fill the openings we currently have in some positions. To do this,we will strengthen managerial competencies through targeted developmentinterventions, prioritize employees with high potential, and uphold transparency with

regard to career advancement and mobility for all employees. Additionally, we&#39;ll work toincrease employee engagement among the less productive personnel. The goal of CVCFinance Limited is to maintain industry benchmarks, offer a kind and alluringremuneration package for all employee levels, and boost the caliber of the staffappraisal procedure.

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INFORMATION TECHNOLOGY

The Financial Services Sector of Bangladesh has always been the forerunner when it comes to integrating Information technology in business. For Financial Services, Information Technology plays a critical role for a number of reasons, but the most important reason being the exchange of information. In today’s technology driven world, any business leveraging Information Technology will always have a strategic and competitive advantage over their competitors. Effectively using Information Technology will not only result in a business being ahead of competition, but also ensure that it survives the harsh world that is becoming increasingly tech dependent.

CVC Finance Limited, as a new financial company in the financial industry, is a step ahead in terms of business automation and infrastructure development. We are constantly working to incorporate new technologies into our business processes in order to benefit both clients and employees. As Information Technology is key to the success in the modern world, CVC Finance Limited has invested significantly in IT with a view to building a robust and scalable IT infrastructure. CVC Finance Limited has already implemented a standard and secure IT infrastructure as part of this ongoing development process. CVC Finance’s IT infrastructure ensures that resources and information are always available to end users. To ensure smooth operation, business critical systems in the Data Center are configured with on-site high availability, load balancing, and redundancy features.

In addition to the IT infrastructure, CVC Finance Limited has introduced various software solutions to upscale its business process/ services by removing process complexities to facilitate end users. In this consequence CVC Finance Limited has implemented an integrated core financial system ‘EFS-Core Financial System’ to automate the financial backbone. To provide faster services to customers, CVC Finance Limited has

introduced solutions like ‘SMS Alert Service’. CVC Finance has also implemented ’Internet Banking’, a value added service for customers. This may help CVC Finance’s clients to get some necessary information and statements through a predefined portal using internet. CVC Finance has also started using a very effective and efficient treasury management solution named ‘eTesoro’ with a variety of functionality that enables our Treasury Department to function at its fullest. Our Human Resource department has already been automated by using the ‘HR & Payroll’ management software solution including leave management system. To enhance our digital footprint, we have undertaken a number of initiatives which may help us to establish ourselves as one of the leading tech-oriented financial institution.

• CVC Finance is developing a chatbot for their communication channels that will provide clients with real-time information and support, as well as 24 hour availability to answer questions.

• CVC Finance is also developing a “Mobile Application,” which will provide customers with a value-added service. This will aid in the creation of a digital channel for acquiring and retaining customers. Customers can also access services and information at any time and from any place.

• In accordance with regulatory requirements, CVC Finance is implementing eKYC, which will make client registration quick, easy, and paperless. Additionally, client information can be easily verified and preserved.

• CVC Finance has reached an agreement with Porichoy to obtain NID verification services. CVC Finance may securely

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verify client information with this service.

• For storing client information online, CVC Finance has already initiated Cloud Computing for some of its application servers. Very soon we will implement Cloud Computing as DR site for all the Data Center Applications.

• CVC Finance is also working on “Payment Gateway” service for customers.

• CVC Finance has received certification from the International Standard for Information Security, also known as ISO 27001:2013.

• For storing client information online, CVC Finance additionally uses Intercloud Limited’s DC & DR services.

Moreover, for further enhancement of the operational process and to take effective managerial decision our IT team has already implemented various in-house solutions like

• CMS - Customer Monitoring System, which is used to track and provide customer services by RM.

• Inventory and Fixed Asset Management System, which is used for record keeping and tracking of inventory and fixed assets of CVC Finance.

• PAS - Performance Appraisal System: As CVC Finance is practicing performance oriented culture, PAS is used to track achievements of KPI of the employees, to evaluate them properly.

• TMS - Task Management System, which is used to track the activities of the back office employees.

• eDAS - Electronic Documents Archiving System, which is used not only to ensure proper record retention policy of regulator, but also the seamless flow of customer documents throughout the organizations.

Our IT team has also refurbished our website which now includes electronic recruitment system.

During the COVID-19 pandemic, it has become mandatory to facilitate employees to work from their homes in order for them to stay safe from coronavirus. Considering the situation and regulatory guideline, CVC Finance has established a secured VPN system for its employees to facilitate a secured work from home infrastructure. Moreover, to provide customer service in the pandemic situation we initiated deposit collection and encashment of deposit payment through internet. Through this services we have given the privilege to clients to enjoy the financial services by staying home safe.

As we want to establish ourselves as one of the best technology driven financial institution to provide services to our customers and stockholders, we are continuously exploring the latest technology to incorporate. Future technological developments of the Company is reviewed periodically as part of the strategic plan.

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SUSTAINABLE DEVELOPMENT GOALS

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GREAT ONEGARMENTS

The owner of Great One Garments is Mrs. Sumon Akter. She began her business with two sewing machines in 2015. She was unable to manage her firm smoothly due to the financial crisis. But she never gave up on her dream of becoming a successful female entrepreneur and of being self-sufficient.

She decided that if she wanted her business to grow in line with market demand, she would need to put more money in it. She then asked her relatives and close friends for money to invest in her firm. However, she received no help from them.

When she ran into financial difficulties during the expansion of her business, she contacted CVC Finance Limited for help. She said, she got to know CVC Finance’s service’s through Advertisement. CVC Finance financed Tk. 20,00,000 (Twenty Lac) at 9.00 percent interest under Bangladesh Bank’s women entrepreneur refinance scheme within five days of her application in 2018, to fulfil her wish to turn to an entrepreneur.

She bought another thirteen sewing machines after taking out the loan from CVC Finance, greatly expanding her business. With the aid of CVC Finance Limited, she gradually expanded her company

areas and now employs over thirty people. It is literally great news for CVC Finance. CVC Finance financed her again of Tk. 20,00,000 (Twenty Lac) at 7.00 percent interest rate in 2021 after successfully settling the previous loan, repaying installments on a regular basis, after watching her exceptional success.

Her factory’s per-day production capacity has expanded dramatically in recent years, which she never anticipated at the start of his business. She created a store called Great One Garments a few months ago to sell her own merchandise. Due to the increasing demand for her producing garments items, she plans to build another outlet in the coming year under the name of Great One garments.

She now produces a large number of Shirts and T-Shirts every month and distributes them around Dhaka and the surrounding areas, as she strives to give clients with higher-quality clothes. We are delighted to stand by her side while she seeks financial assistance to expand her small business, and we are confident that she will see her company develop day by day.

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CORPORATEG OVERNANCE

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CORPORATEGOVERNANCE STATEMENT

Corporate governance is the system by which companies are directed, controlled, and managed. CVC Finance has manifested its commitment to adhering to the principals of good corporate governance since the very beginning of its operation. We believe in the strength of good governance by practicing transparency and accountability in every sphere of our activities. Utilizing the structured and dedicated corporate governance culture, CVC Finance is able to maintain the growing trust of shareholders. CVC Finance’s corporate governance philosophy encompasses regulatory and legal requirements, various internal rules, policies, procedures, and practices applicable for financial institutions. CVC Finance is committed to review all its corporate governance policies and guidelines regularly to ensure transparency in its practices, and maintain the highest ethical standard. In addition, to establish the highest standards of corporate governance, CVC Finance also embraces best governance practices across all its activities. The independent role of the Board of Directors, independent role of the Chairman and Chief Executive Officer, distinct roles of the Company Secretary, Head of Finance & Accounts and Head of ICC, different Board Committees enable CVC Finance to achieve excellence in corporate governance.

CVC Finance’s Corporate Governance Culture is anchored on• Competent Leadership• Strong risk management culture• Effective internal controls• Accountability towards Shareholders

We believe that good Corporate Governance plays an instrumental role for our success by ensuring transparency, accountability and creating long-term value for our shareholders and other stakeholders. We are thriving for the best to create an example in the financial

service industry with a blend of value generated business growth & maintaining a compliance culture.

The Board of Directors (Board) of CVC Finance Limited believes that good corporate governance (CG) practices enable the company to operate more efficiently, improve access to capital, mitigate risks, and facilitate better oversight of the business, management and operations of the company. In the long-term, good CG practices allow the company to be more accountable and transparent, and also contribute towards value creation for all its stakeholders. The Board to ensure that our CG Framework remains resilient and is able to adapt to the demands of the rapidly changing operating environment.

CVC Finance Limited is subject to a comprehensive regulatory regime and the Board is committed to ensure that a robust CG Framework is in place by keeping abreast of the latest developments in respect of the CG regulatory framework and requirements. Our CG Framework is based on the following key statutory provisions, best practices, policies and guidelines:

1) Financial Institutions Act, 1993;2) The Companies Act, 1994; amended in 20203) The Negotiable Instruments Act, 1881;4) Money Loan Court Act, 2003;5) Money Laundering Prevention Act, 2012;6) Anti-Terrorism (Amendment)Act, 2012 and7) All Regulations, Guidelines, Circular and Letter issued by Bangladesh Bank/the Government.

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CORPORATE GOVERNANCE FRAMEWORK & VALUE

CREATION WITH CORPORATE GOVERNANCE

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BOARD LEADERSHIPAND EFFECTIVENESS

The Board of CVC Finance Limited considers that its constitution should comprise Directors with an appropriate mix of skill, experience and personal attributes that allow the Directors individually and the Board collectively to discharge their responsibilities and duties under the law efficiently and effectively, understand the business of the Company and assess the performance of the management.

The composition of the Board embraces diversity. The Directors possess a wide range of local and international experience, expertise and specialized skills to assist in decision-making and leading the Company for the benefit of its shareholders.Name Status Executive Committee Audit Committee

Subsidiary’s

Apart from setting the tone from the top and establishing the core values, the Board also monitors the management’s execution of strategy and financial performance. While the Board’s ultimate focus is on long-term sustainable growth, the Board also ensures that the management strikes the right balance between short term and long-term goals.

The Board has been closely monitoring not only the impact of the on-going pandemic on the economy and the company’s overall financial performance, but also on the general health and welfare of the staff and employees. The Board has addressed the issue on how to continue servicing customers in this challenging environment. Agenda items and matters discussed at the Board and Board Committee meetings have been re-aligned accordingly, to address various issues and challenges. These include addressing work from home requirements of the staff, and rolling out various measures to help deserving customers.

A description of the roles and responsibilities of the Board Charter as follows:

Board Composition and Succession PlanningReview the overall size and composition of the BoardReview the composition of Board CommitteesReview the succession plan for the Board and Board Committees

Recruitment and Appointment of DirectorsReview the background, skills and experience of potential candidates for appointments on the BoardConsider the re-appointments and re-elections of DirectorsReview the appointment and re-appointment of Board CommitteesRecruitment and Appointment of Senior OfficersConsider the proposals to renew the employment contracts of senior officersAppointment of Managing Director and below two tier senior officersSuccession Planning of Senior ManagementReview and recommend the New Talent AssessmentReceive updates on succession plan of senior ManagementRemunerationReview and approve the total rewards (salary increment and promotion) for the employeesApproval of Business ProposalReview and approve the business proposals beyond Management/Executive Committee approval limitGovernanceEnsuring corporate governance practices during carrying out day to day business

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ROLES & RESPONSIBILITIES OF THE BOARD

The major responsibilities of the Directors of the Board are:• To work for the development and implementation of corporate strategies.• To set direction, vision, and policies for achieving the strategic goal.• Giving attention to the use of the company’s resources efficiently.• Exercising business judgments in good faith for the institution’s best interest in line with

articles and prevailing applicable laws and regulations.• Monitoring and reviewing corporate governance framework of BSEC.• Monitoring and reviewing the risk management process of the company.• Fixation of business targets, reviewing business results, and monitoring budgetary

control.• Setting up standards and monitoring compliances in line with the standards.• To Recommend appointment and re-appointment of statutory auditors and recommend

their fees.• To take initiatives for the appointment of managing director & CEO and fixation of benefits.• To evaluate the key performance indicators of the top executives.• To submit Directors’ Report before the shareholders in Annual General Meeting per

corporate governance code.• Recommending shareholders to approve Financial Statements and recommending

dividends.

CONTRIBUTION IN MEETINGS/DEBATESThe Board Members are expected to contribute to the Board’s debates without any personal biases or other prejudices with the conviction and belief that the outcome of every discussion would be towards the company’s advancement.

MEETINGS AND MINUTESThe meetings of the Board of Directors are held on a regular basis at CVC Finance. At each meeting, Management provides information, references, and detailed working papers for each agenda to all directors for consideration, usually three days before the meeting, along with the Implementation Status of the previous meetings’ decisions. The Chairperson of the Board of Directors allocates sufficient time for the directors to consider each agenda prudently and freely discuss, inquire, and express opinions to adopt better decisions for the greater interest of the shareholders. CVC Finance has recently arranged a number of virtual meetings among directors. The company has a plan to continue such virtual meetings in the long run.

Proceedings and resolutions taken by the board are recorded for writing minutes. Minutes of a meeting is signed by the Chairman of the meeting, copy of which (minutes) is signed to Bangladesh bank within five working days from the meeting. The decisions taken by the board are disseminated by the company secretary to whom such decision relates. All meeting-related papers, documents, memos, attendance, minutes, etc. are being maintained in line with the provisions of the Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB).

During pandemic time CVC Finance Limited continues to hold its meeting through virtual platform by using zoom abiding all regulatory compliances.

Thirteen Board meetings were held during the financial year ended 31 December 2021. The number of Directors required to constitute a quorum is five (5), out of the ten (10) Directors.

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COMPOSITION OFBOARD AND COMMITTEES

The Board of CVC Finance considers that its constitution should comprise Directors with an appropriate mix of skill, experience and personal attributes that allow the Directors individually and the Board collectively to discharge their responsibilities and duties under the law efficiently and effectively, understand the business of the Company and assess the performance of the management. The composition of the Board embraces diversity. The Directors possess a wide range of local and international experience, expertise and specialized skills to assist in decision-making and leading the Company for the benefit of its shareholders.

Name of the Director StatusExecutive

Committee Audit Committee

Mr. Mahmud Hussain Chairman & Shareholder

Ms. Nasmin Anwar Nominated Director Member

Mr. Bibekananda Saha Nominated Director Member

Mr. Tofayel Kabir Khan Nominated Director Member

Mr. Rezaul Karim Nominated Director Member

Mr. Syed Al FarooqueSponsor/Shareholder

DirectorChairman

Mr. Anwar Kamal Pasha Nominated Director Chairman

Mr. Asif Wahab Khan Nominated Director Member

Mr. Naim HossainSponsor/Shareholder

DirectorMember

Mr. AKM Monirul Islam Nominated Director Member

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All the Directors are non-Executive Directors. Among them, 03 are Sponsor/Shareholder Directors while 07 are Nominated Directors. The Board considers diversity from a number of different aspects, including gender, age, educational background, professional experience, skills, knowledge and length of service.

The current skills and experience of the Board include the following:

• Banking• Insurance• Asset Management• Capital Market• Shipbuilding Industry• Textile, Spinning and RMG sector• Chemical Engineering sector• Trading business and• Information Technology

SEPARATION OF ROLES OF THECHAIRMAN AND MANAGING DIRECTORThe roles and responsibilities of the Chairman and the Managing Director are separated by a clear division of responsibilities which are defined and approved by the Board in line with best practices to ensure the appropriate supervision of management. This distinction allows for better understanding and distribution of jurisdictional responsibilities and accountabilities. The clear hierarchical structure with its focused approach, facilitates efficiency and expedites informed decision-making.

DIRECTORS’ REMUNERATIONDirectors are not entitled to any remuneration other than attending the meeting of the Board and its committees. Bangladesh Bank vide its DFIM Circular No. 13 dated November 30, 2015, re-fixed the maximum limit of remuneration to the Directors for attending meetings of the Board and its committees at a fixed amount per meeting.

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STATEMENTOF DIRECTORS’

RESPONSIBILITIES FOR INTERNAL CONTROL, FINANCIAL REPORTING AND CORPORATE

GOVERNANCE

RESPONSIBILITY FOR FINANCIAL STATEMENTSThe Directors are responsible for ensuring that the Company keeps proper books of accounts of all the transactions and prepares financial statements, which give a true and fair view of the state of its affairs and profit/ loss for the year. The Board of Directors accepts responsibility for the integrity and objectivity of the financial statements. It ensures that the estimates and judgments relating to the financial statements were made on a prudent and reasonable basis so that they reflect in a true and fair manner, the form and substance of transactions and reasonably presents the Company’s true state of affairs. The Board of Directors confirm that the International Financial Reporting Standard (IFRS) and International AccountingStandards, as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh, have been adhered to, subject to any material departure being disclosed and explained in the notes to the accounts.

The Board also confirms that the Company keeps accounting records, which disclose with reasonable accuracy, the financial position of the Company, and which enables it to ensure that the financial statements comply with the requirements of the Companies Act, 1994, Securities and Exchange Rules, 1987, Financial Institutions Act, 1993, and Listing Regulations of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited and amendments thereto.

RESPONSIBILITY FOR INTERNAL CONTROL

SYSTEMSTo ensure this, the Company has taken proper and sufficient care in installing a system of internal control, which is reviewed, evaluated and updated on an ongoing basis. The internal control and compliance department of the Company conducts periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed.

RESPONSIBILITY FOR CORPORATE

GOVERNANCEAt CVC Finance, we view the governance and oversight of our distinctive business model and prudent strategy as key to the ongoing creation and delivery of value to our stakeholders, particularly in an economic environment that remains both uncertain and challenging.

At our Company, the Board’s primary role is to provide leadership, ensure that it is appropriately managed and deliver long-term shareholder value. It also sets the Group’s strategic objectives and provides direction as a whole. A number of key decisions are reserved for and may only be made by the Board, which enables it and the executive management to operate within a clear governance framework. At CVC Finance, we have also established and embraced - both in letter and spirit - our Code of Conduct, signed by each and every member as an acceptance to adhere to the principles of the Code during all business dealings. The Code also sets out guidance on best practices in the form of principles and provisions on how we should adopt and follow good governance practices. It has been the Boards view that the Company’s governance regime has been fully compliant with the best practices set out in the Code during the year under review.

OPINION OF EXTERNAL AUDITORSThe auditor of the Company, Hoda Vasi Chowdhury & Co. Chartered Accountants have carried out annual audit to review the system of internal controls, as they consider appropriate and necessary, for expressing their opinion on the financial statements. They have also examined the financial statements made available by the management together with all the financial records, related data, minutes of shareholders and Board meetings, relevant policies and expressed their opinion.

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KEY ACTIVITIES OFTHE BOARD DURING 2021

Among the areas/matters reviewed, deliberated and approved by the Board during FY 2021 were as follows:

• Business strategy of various segments within the company• Budget and Business Plan for 2022• Focus on developing alternative channel to collect fund at a lower cost option across

the country. • More diversified Income Stream by making proper distribution among different

allowable products and services through subsidiaries• Strengthening Technology • Progress of Digital Plans• Recovery and Resolution Plan• Imitating various Projects for operational efficiency and better customer services• Legal Developments, Impact and Challenges in Light of the COVID-19 Pandemic• Total rewards and remuneration for the company• Recommendation for the appointment of external auditors• Approval of Two new subsidiaries of the Company.

BOARD COMMITTEES

Audit Committee

Executive Committee

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• The key task of the committee will facilitate

the Board for any kind of decision regarding

investment, operational activities etc.

• The committee will review implementation

of the business policy.

• Presenting a summary of approved

proposals which are within their approval

limit to the Board.

• The committee will review the overdue status

of the company and guide the management

to recover them.

• The committee will follow up the litigation

status of the company on regular basis.

• Considering other matters required by the

Board and also Management of the company.

NAME OF COMMITTEE OF THE BOARD

EXECUTIVE COMMITTEE

CORE FUNCTIONS OF THE COMMITTEE

MR. ANWAR KAMAL PASHA

MR. BIBEKANANDA SAHA

MR. TOFAYEL KABIR KHAN

MR. ASIF WAHAB KHAN

MR. NAIM HOSSAIN

NUMBER OF MEETINGS HELD IN 2021

12

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• Assess whether the management creates

proper culture of Internal control and Risk

management within the organization

• Assessing the managements’ compliance

with the recommendation made by external

auditors.

• Making recommendation about the

appointment of external auditors

• Reviewing rules and regulations set by

different regulatory bodies , internal policies

and guidelines

• Reviewing and reporting any rectification

or irregularities identified by internal and

external auditors and Bangladesh Bank

inspection team

• Carrying out supervisory activities assigned

by the board

• Review and update the Board regarding

irregularities raised by different inspection

team, actions taken against those acts and

corrective actions towards ratification.

NAME OF COMMITTEE OF THE BOARD

AUDIT COMMITTEE

CORE FUNCTIONS OF THE COMMITTEE

MR. SYED AL FAROOQUE

MS. NASMIN ANWAR

MR. REZAUL KARIM

MR. AKM MONIRUL ISLAM

NUMBER OF MEETINGS HELD IN 2021

5

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MANAGEMENT COMMITTEE (MANCOM)

To ensure that the company’s vision, mission are adhered to, we have our Management Committee (MANCOM), who are entrusted to set objectives and lead from the front. On the back of the Board’s exemplary guidance, the Management and its various sub-committees determines company’s strategic objectives such as areas of business focus; policies, monitoring and process improvements.

MR. SYED MINHAJ AHMEDManaging Director

MR. SHAH WAREEF HOSSAINDeputy Managing Director

MR. MUHAMMAD ANISUZAMANHead of Treasury

MR. MOHAMMED NEJAM UDDIN Head of corporate

MR. MD. SHAKHAWAT HOSSAINHead of Accounts

MR. MD. FAISAL AMINHead of Operations

MR. MD. ARIFUL ISLAM CHOWDHURY

Head of ICC

MR. MD. MAHABUBUL ALAMHead of CRM

MS. ASMA SADIAStrategic Planning

CHAIRMAN

Member/ Co-Chairman

Member

Member

Member

Member

Member

Member Secretary

Member

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INTERNAL CONTROLAND RISK MANAGEMENT

The company has a comprehensive system of internal controls in place, designed to ensure that risks are mitigated and that the company’s objectives are attained. The Board recognizes its responsibility to present a fair, balanced and understandable assessment of the company’s position and prospects. It is accountable for reviewing and approving the effectiveness of internal controls operated, including financial, operational and compliance controls, and risk management.

COMPLIANCE FRAMEWORKThe Framework provides the key principles and guidelines for managing Compliance Risk within the company. It serves as a guide for Compliance function alongside Board of Directors, Senior Management and all employees in all jurisdictions in understanding, complying and managing compliance risk. It is adopted and implemented across by operating entities across the company.

THE FRAMEWORK OUTLINES:• The overarching principles for the management of compliance risk across the company;• The overall strategy in managing compliance risk to ensure uniformity in practices across the company in meeting regulatory and legal obligations;• The minimum expected standards for compliance risk management; and• The roles and responsibilities of compliance risk management.

INTERNAL CONTROL SYSTEMThe key elements of the internal control system established by the Board that provides effective governance and oversight of internal controls include:

• ORGANIZATION STRUCTUREThe Board has established an organization structure with clearly defined lines of responsibility, authority limits and accountabilities, aligned with business and operations requirements to support the maintenance of a strong control environment.

• ANNUAL BUSINESS PLAN AND BUDGETThe Board deliberates and approves the annual business plan and budget for the year. The performance achievements are reviewed monthly against the targeted results, allowing time for the appropriate responses and required remedial actions to be taken. The Board regularly reviews reports from the Management on key operational statistics, as well as legal and regulatory matters.

• OTHER BOARD COMMITTEESThere are other Board Committees set up to assist the Board in executing its overall governance responsibilities and oversight function. They are the Executive Committee and Audit Committee. These Committees are authorized to examine all matters within the scope defined in their respective terms of reference and report to the Board with their recommendations.

• REGULAR UPDATES AND COMMUNICATION OF RISK MANAGEMENT PRINCIPLES, POLICIES, PROCEDURES AND PRACTICESRisk management principles, policies, procedures and practices are reviewed and updated regularly to ensure relevance to the current business environment as well as compliance with applicable laws.

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• STANDARD PRACTICE INSTRUCTIONPolicies and procedures are in place to ensure compliance with internal controls and the prescribed laws and regulations. These policies and procedures are set out in the company’s Standard Practice Instructions (SPIs) and are updated from time to time in accordance with changes to the business environment or regulatory guidelines. These SPIs are communicated to all employees.

• CORE VALUES AND CODE OF ETHICS AND CONDUCTThe company’s Core Values are the essential guiding principles to drive behavioral ethics while fulfilling our collective responsibility to serve our mission of Humanizing Financial Services. It is further complemented by the Code of Ethics and Conduct that sets out sound principles and standards of good practice to be observed by all employees.

• FRAUD MANAGEMENTThe company instils a culture of vigilance amongst employees in handling and combating fraud as well as to deter future occurrences. Robust and comprehensive tools/infrastructure and programs are emplaced to ensure risks resulting from fraud are identified, escalated/reported and managed in a decisive and timely

manner. Stern disciplinary action is taken against employees involved in fraud.

• WHISTLEBLOWING POLICY AND PROCEDURESCVC Finance Limited is committed to the highest standard of ethics and integrity in its conduct of business and operations. Company’s Whistleblowing Policy and Procedures encapsulate the governance and standards to promote an ethical, responsible and secure whistleblowing practice.• ANTI-BRIBERY AND CORRUPTION POLICY AND PROCEDURESCVC Finance Limited adopts a zero-tolerance approach against all forms of bribery and corruption in carrying out its daily operations.

•FINANCIAL CRIME COMPLIANCECVC Finance Limited is committed to fight financial crimes and ensure compliance with the relevant laws and regulations. Financial crime risks are managed to protect the integrity and reputation of CVC Finance. The company has established comprehensive controls to anticipate, prevent, detect and respond to money laundering terrorist financing and sanctions risks.

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DISCLOSURE UNDER CAPITAL ADEQUACY &

MARKETDISCIPLINECapital is the foundation of any business. In a Financial Institution, capital is a prime factor to consider when assessing the safety and soundness. It acts as a cushion in case the value of the FI’s assets decline and liability rises. Maintaining a minimum capital level is of extreme importance for a Financial Institution so that adequate protection against risk can be ensured. A strong Capital Management Policy protects an organization by identifying and mitigating risks, as well as establishes a base of confidence by depositors, creditors, and other stakeholders.

Capital Adequacy gives a view on a Financial Institution’s financial strength and stability. Adequate capital provides assurance to the stakeholders on the company’s ability to provide consistent services.

CVC Finance Limited is a progressive financial institution in the field of financial Market by establishing its brand image through its diversified products and services. The company also intends to create its image as a trusted company in the mind of the customers. Continuing to maintain this reputation and also enrich to the signified goodwill it always ensure timely submission of every reports and disclosures.  

The Basel-II disclosures presented in these documents are related to CVC Finance for the year ended December 31, 2021. These disclosures have been made in accordance with Prudential Guidelines on Capital Adequacy and Market Discipline for Financial Institutions introduced by Department of Financial Institutions

and Markets. The Basel-II framework consists of the following three pillars:

PILLAR-I: MINIMUM CAPITAL

REQUIREMENT  

CVC Finance must hold minimum regulatory capital against Credit, Market and Operational Risk inherent with its financing sector.  

PILLAR-II: SUPERVISORY REVIEW

PROCESS (SRP)

SRP basically deals with other risks factors faced by CVC Finance but not covered in pillar-I. The key principle of SRP is that CVC Finance have a process for assessing overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital at an adequate level. 

PILLAR-III: DISCLOSURE & MARKET

DISCIPLINE 

The purpose of Market Discipline in the Revised Capital Adequacy Framework is to complement the minimum capital requirement and the supervisory review process. The aim of introducing Market Discipline in the revised capital framework is to establish more transparent and more disciplined financial market so that stakeholders can assess the position of CVC Finance regarding holding of assets and to identify the risks relating to the assets and capital adequacy to meet probable loss of assets.

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1) SCOPE OF APPLICATION  Qualitative Disclosures: The name of the corporate entity in the group to which the guidelines applies:  

CVC Finance Limited

The financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards (BFRS) and Bangladesh Accounting Standard (BAS). Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group are not applicable.  

2) CAPITAL STRUCTUREQualitative Disclosure:The assets, liabilities, revenue and expenses of all profit center divisions are related in CVCFL’s audited financial statement as of year ended December 31, 2021.  Summary information on the terms and conditions of the main features of all capital instruments, especially in the case of capital instruments eligible for inclusion in Tier I or in Tier II.

Tier II capital includes:  

General provision up to a limit of 1.25% of Risk Weighted Asset (RWA) for Credit Risk;  

Revaluation reserves; 

50% Revaluation reserve for fixed assets;  

All other preference shares;   Conditions for maintaining regulatory capital: The calculation of Tier I capital, and Tier II capital shall be subject to the following conditions:

The amount of Tier 2 capital will be limited to 100% of the amount of Tier I capital.

50% of revaluation reserves for fixed assets and 45% of revaluation reserves for securities are eligible for Tier II capital. 

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Qualitative Disclosure:

Particulars Amount in CrorePaid-up Capital 118.97

Statutory Reserve 5.28

Non-repayable Share premium account 0

General Reserve 0

Retained Earnings 4.40

Minority interest in Subsidiaries 0

Non-Cumulative Irredeemable Preference Shares 0

Dividend Equalization Account 0

Other (if any item approved by Bangladesh Bank) 0

Total Tier-1 Capital 128.65

Deduction from Tier-1 Capital 0

Tier-2 (Supplementary Capital) 0

General Provision (Unclassified loans up to specified limit + SMA+ off balance sheet exposure)

5.17

Total Tier-2 Capital 5.17

Total Eligible Capital 133.82

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3) CAPITAL ADEQUACYQualitative Disclosure:CVC Finance Limited with its focused strategy on risk management has always been consistent in maintaining capital adequacy ratio above the regulatory requirements. CVC Finance has been successfully managing the incremental growth of the Risk Weighted Assets by ensuring diversification of the portfolio in SME, Retail and Corporate segments. However, RWA is also managed by taking collaterals against its loans. CVC Finance strives to extend its relationship with corporate clients having good credit ratings. While computing the capital adequacy, CVC Finance has applied Standardized Approach.

Based on the data derived, the Capital Adequacy Ratio (CAR) is calculated. CVC Finance follows the standard CAR measurement method. Capital Adequacy Ratio = (Core Capital + Supplementary Capital) / Risk Weighted Assets

Particulars Amount in Crore RWA for Credit Risk 439.24

RWA for Market Risk 2.19

RWA for Operational Risk 111.88

Total RWA 533.31

Minimum Capital requirement (10% of RWA) 55.33

Maintained Capital 133.82

Total Capital Adequacy Ratio 24.18%

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4) CREDIT RISKCredit risk refers to the probability that a counter party will not repay its financial obligations in due time. As a lending institution CVC Finance never eliminates its credit risk, moreover it always tries to manage and reduce to a minimum level.

CORPORATE CREDIT POLICYCVC Finance is managing its Credit Risk through a Board directed and approved Corporate Credit Policy in line with the Bangladesh Bank Core Risk Management Guidelines, which outlined robust processes and procedures to ensure the quality of its assets portfolio. The Credit Policy also contains the general principles to govern the implementation of detailed lending procedures and risk grading systems of the borrowers. And, as such, it specifically addresses the areas of (a) Loan Originating; (b) Credit Approval; (c) Credit Administration; (d) Risk Management; and (e) Monitoring, Collection and Recovery activities.

CREDIT RISK MANAGEMENT An independent Credit Risk Management (CRM) Department is in place, at CVC Finance, to scrutinize projects from a risk-weighted point of view and assist the management in creating a high quality credit portfolio and maximize returns from risk assets. Research team of CRM regularly reviews market situation and exposure of CVC Finance in various industrial sub-sectors. CRM has been segregated from Credit Administration Department in line with Central Bank’s Guidelines. CRM assess credit risks and suggest mitigations before recommendation of every credit proposal while Credit Administration confirms that adequate security documents are in place before disbursement.

CREDIT APPROVAL PROCESS To ensure both speedy service and mitigation of credit risk, the approval process is maintained through a multilayer system. Depending on the size of the loan, a multilayer approval system is designed. As smaller loans are very frequent and comparatively less risky, lower sanctioning authority is set to improve the turnaround time and associated risk. Bigger loans require more scrutiny as the associated risk is higher. So sanctioning authority is higher as well.

QUANTITATIVE DISCLOSUREIndustry-wise distribution of exposures, broken down by types of credit exposure as on December 31, 2021:

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Sector

Cement & Allied IndustryEducation & TrainingFisheriesFood Production, Processing & Rice MillsGarments & KnitwearHealth SectorHousing and Real estateIron, Steel & EngineeringLeather & Leather goodsNGOPaper, Printing & PackagingPharmaceuticals & ChemicalsPoultry & LivestockPower, Gas, Petroleum, Water & SanitaryTelecommunication & Information TechnologyTextilesTourism, Hospitality & LogisticsTrade & CommerceTransport & AviationOthers

Grand Total

Amount in Crore

23.98 1.79

0.23 57.46 18.08 6.51 16.37 71.15

0.74 3.80 0.29 0.34 10.88 39.32 32.20

11.66 41.50 42.39 13.85

20.38

412.93

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5) EQUITIES: BANKING BOOK POSITIONS

Qualitative Disclosure:The general qualitative disclosure requirement with respect to equity risk, including: Differentiation between holdings on which capital gains are expected and those taken under other objectives including for relationship and strategic reasons; and Total equity shares holdings are for capital gain purpose.  Discussion of important policies covering the valuation and accounting of equity holdings in the banking book positions. This includes the accounting techniques and valuation methodologies used, including key assumptions and practices affecting valuation as well as significant changes in these practices.   Shares are valued at cost prices and if the total cost of a particular share is lower than the market value of that particular share, then provision are maintained as per terms and condition of regulatory authority.

6) MARKET RISK Qualitative DisclosureMarket risk is the risk that may affect company’s earnings and capital due to changes in the market level of interest rates, securities, equities as well as the volatilities of those prices. Volatility of money market, which ultimately imposes upward pressure on interest rate structure, may erode the company’s profitability. 

MARKET RISK MANAGEMENT SYSTEM

ASSET LIABILITY MANAGEMENT

ALCO of the company monitors Balance Sheet and liquidity risk of the company. This Committee also reviews country’s overall economic position, company’s liquidity position, ALM ratios, Interest Rate Risk, Capital Adequacy, Deposit Advance Growth, Cost of Deposit, Market Interest Rate, Loan Loss Provision adequacy, deposit and lending pricing strategy.

MARKET ANALYSIS Market analysis over interest rate movements are reviewed by the Treasury of the company. The type and level of mismatch interest rate risk of the company is managed and monitored from two perspectives, being an economic value perspective and an earning perspective.GAP ANALYSIS ALCO has established guidelines in line with central Bank’s policy for the management of assets and liabilities, monitoring and minimizing interest rate risks at an acceptable level. ALCO in its regular monthly meeting analyzes Interest Rate Sensitivity by computing GAP i.e. the difference between Rate Sensitive Assets and Rate Sensitive Liability and take decision of enhancing or reducing the GAP according to prevailing market situation aiming to mitigate interest rate risk.  CONTINUOUS MONITORINGCompany’s treasury manages and controls day-to-day trading activities under the supervision of ALCO that ensures continuous monitoring of the level of assumed risks.

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7) INTEREST RATE IN THE BANKING BOOKQualitative Disclosure:The general qualitative disclosure requirement including the nature of interest risk and key assumptions, including assumptions regarding loan prepayments and behavior of non-maturity deposits. Interest rate risk in the banking book arises from mismatches between the future yield of an assets and their funding cost. Assets Liability Committee (ALCO) monitors the interest rate movement on a regular basis. CVC Finance measure the Interest Rate Risk by calculation Duration Gap i.e. a positive Duration Gap affect company’s profitability adversely with the increment of interest rate and a negative Duration Gap increase the company’s profitability with the reduction of interest rate. 

8) OPERATIONAL RISK Qualitative DisclosureOperational risk addresses the risk associated with fraud, forgery, which are unauthorized activities, error, omission, system failure and external events among others. Some more operational events are operational events are including operational errors, non-compliance with internal regulations, non-compliance of legal requirements; launching new products without adequate operational support. Qualitative Disclosure

Particulars Amount in Crore

Particulars Amount in Crore

Market risk 2.194

Operational risk 111.885

Quantitative Disclosure

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REPORT OFTHE AUDIT COMMITTEE

Board Audit committee of CVC Finance Limited works as the sub-committee of the Board. It efforts to ensure implementation of the process set out in the business plan and policies within its scope. The committee also looks after compliance of corporate governance guidelines and rules & regulations of the Company’s regulators.

Scope of work of the Audit CommitteeThe scope of work of the Audit Committee of CVC Finance is determined by directives from its principal regulators, the Bangladesh Bank (BB) and the Board. These include, but not limited to, exercising oversight over:

The internal control system and risk management process of the company

Financial reporting

The activities of Internal Control and Compliance (ICC) Department.

Interaction with external auditors (hiring and performance)

Compliance with regulatory requirements

Other responsibilities, e.g. review management letter issued by auditor, inspection report of Bangladesh Bank, etc.

The Committee presents a summary of its activities to shareholders and other interested parties by means of this report.

MeetingsDuring the period under review (1st January 2021 to 31st December 2021) 5 (five) meetings of the Committee were held. The Managing Director attended the meetings by invitation. Members of the senior management of the Company were invited to participate at meetings as and when required. The proceedings of the Board Audit Committee meetings are regularly reported to the Board of Directors.

ActivitiesAs set out by Bangladesh Bank in addition to other responsibilities the Committee is responsible for the following matters.

FINANCIAL REPORTING:

The Committee Supports the Board of Directors to discharge their responsibilities for preparation of Financial Statements by:

Reviewing the systems and procedures to ensure that all transactions are completely and accurately recorded in the books of accounts;

Determining the most appropriate accounting policies;

Strict adherence and compliance with the Bangladesh Accounting Standards and recommended best accounting practices; and

Reviewing the Annual Financial Statements and the Quarterly Financial Statements prepared for publication, prior to submission to the Board.

INTERNAL CONTROLS AND RISK MANAGEMENT

The Board believes, with concurrence of the Audit Committee, that the systems of internal control, including financial, operational and compliance control and risk management system maintained by the Company’s management that was in place throughout the financial year and up to the date of this report, is adequate to meet the needs of the Company in its current business environment. However, the Board also notes that no system of internal controls can provide absolute assurance in this regard, or absolute assurance against the occurrence of material errors, poor judgment in decision making, human error, losses fraud or other irregularities. The Committee:

Reviews the processes for identification,

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recording, evaluation and management of all significant risks throughout the Company and other entities of the group;

Evaluates the procedures made by the management for building a suitable management information system (MIS) including computerization system and its application;

Considers the internal control strategies recommended by internal auditor and external auditor and

Reviews the existing risk management procedures for ensuring an effective internal checking system.

INTERNAL AUDIT:

The Audit Committee approves the terms of reference of internal audit, audit plan and reviews the effectiveness of the internal audit functions.

The Committee supports the internal audit team to work on the adequacy of the system of internal control, risk-based audit approach and ensures that no unjustified restrictions or limitations are made.

The Committee also reviews the findings and recommendations made by the internal auditors for removing and controlling the irregularities detected.

EXTERNAL AUDIT:

The Committee reviews the auditing performance of the external auditors and their audit reports;

It also reviews the Findings and recommendations made by the external auditor for removing the irregularities detected and takes necessary actions.

It makes recommendation to the Board about appointment of the external auditors.

Hoda Vasi Chowdhury & Co., Chartered Accountants acted as external auditor for the period according to their appointment. The external auditors are not engaged by the

Company on any material non-audit work such as:

Appraisal or valuation services or fairness opinions:

Financial information systems design and implementation;

Book-keeping or other services related to the accounting records or financial statement; and internal audit services;

Broker-dealer services;

Internal audit services, etc.

REGULATORY COMPLIANCE:

The Committee ensures that Company’s procedures are in place to ensure compliance with laws and regulations formed by the regulatory authorities (Bangladesh Bank and other bodies) and internal policies approved by the Board. The Committee monitors due compliance with all requirements through different reports submitted to it.

OTHER RESPONSIBILITIES:

Audit Committee examines the management letter submitted by external auditor, inspection report of Bangladesh Bank, internal audit report and any other report they think to be reviewed. It also reports to the board regarding findings, recommendations, regularization of error and omissions, fraud and forgeries and other irregularities as detected. It also performs other oversight functions as requested by the board and evaluates its performance on regular basis.

ACKNOWLEDGEMENT

The Audit Committee of the Board expressed its sincere thanks to the members of the Board, Management and the auditors for their relentless support in carrying out the Committee’s duties and responsibilities.

Mr. Syed Al Farooque Chairman, Audit Committee

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DIRECTORS REPORT 2021

The Board of Directors of CVC Finance Limited takes great pleasure to welcome you to the 7th Annual General Meeting of the Company. On behalf of the Board of Directors, I am presenting the Directors’ Report on the operational and financial activities of your Company together with the Audited Financial Statements for the year ended 31 December 2021 which also includes reports on business and strategy review, risk management, corporate governance, internal control system, financial and operational highlights for your valued consideration, approval, and adoption. This report has been prepared in compliance with Section 184 of the Companies Act 1994, Financial Institutions Act 1993 and the guidelines issued by Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Bank and other regulatory authorities.

The COVID-19 pandemic made the past two years far more challenging. The pandemic caused tremendous loss of human life, social disruptions, health crisis and adversely impacted the global economy as the entire world entered in another lockdown during the middle of the year due to a new variant of Corona Virus. However, the vaccine rollout has reduced the overall impact of the pandemic.On this backdrop, the projection for global GDP growth rate, according to IMF, is 5.9% for 2021 and 4.4% for 2022 is estimated. Similarly, World Bank also expects Global growth to decelerate markedly in 2022 from 5.5% to 4.1%. A survey conducted by McKinsey denotes that most respondents expect the year 2022 to bring better economic conditions despite heightened risk from the pandemic and inflation, and executive planning are being undertaken in this regard.

Like all sectors of economy, the financial sector started healing but continued to face difficulties in paying loan installment due to the pandemic. To tackle the crisis, the government of Bangladesh allowing FIs to hold loan classification for due installments up to June. As the lockdown was lifted, Bangladesh Bank introduced a new rate for Stock Dealers (2.00% of base for provision) along with stricter rules for loan classification.

It also needs to be mentioned here that our Government has so far announced 28 stimulus packages worth BDT 1.35trillion (around 4.9% of FY20s GDP) for mitigating adversities caused by the pandemic and for ensuring quicker economic recovery. Our central bank also implemented several policy measures to ensure uninterrupted banking and mobile financial services even during lockdowns in 2021. The rapid expansion of mobile and digital financial services helped in the disbursement of the increased remittance inflow, on the back of Government’s measures to ensure fund flow through formal channels. Roll out of such timely and appropriate monetary and fiscal policies has led to the estimated GDP growth rate of Bangladesh to be 6.94% in 2021.

Although we treaded into 2021 realizing the recoverability from the pandemic would be slow, but we were optimistic that the scenario would turn around. What the world did not anticipate was being hit by a crippling second and even a third wave by the end of the year. The second wave brought with it fresh set of lockdowns and prolonged disrupted global and local economic activity. Despite timely Government interventions and policies to keep economic activity going, it was nowhere near pre-pandemic days and neither was it close to allow recovery. Highly strained private sector credit growth coupled with negatively altered borrower repayment behavior pattern induced us to

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continue treading cautiously in terms of growth.

However, despite the all the negativity due to the pandemic, CVC Finance still continues to grow and delivered an impressive bottom-line growth considering the current world affairs.The prime focus during the year has been upholding service excellence, maintaining asset quality, recovering classified and written off loans, mobilization of deposits, and rationalizing costs. I also would like to thank you all that, CVC Finance has successfully acquired 60% of Share Capital of CAPM Advisory Limited. (A full-fledged merchant bank) Despite of a crucial year, the Board of Directors of CVC Finance Limited recommended 3.5% cash dividend for the year ended December 31, 2021. A brief review of standalone financial performances of the company are as follows:

Performance 2021 2020

Net Interest Income 203.42 66.47

Non-Interest Income 78.47 129.17

Operating Income 281.89 195.64

Operating Expenses 122.01 108.15

Cost to Income 43.28% 55.28%

Profit Before Tax and Provisions 159.88 87.49

Provisions 83.89 16.11

Profit Before Tax 76.00 71.37

Profit After Tax 47.58 29.71

ROA 0.83% 0.54%

ROE 3.70% 2.35%

In a summary, the total portfolio of the Company grew marginally by 3.83% and stood at BDT 4129.38 million in 2021 against BDT 397.72 million in the previous year. The growth in loans and advances was due to higher disbursements at the end of the year. A key focus during the year was to ensure sufficient liquidity to meet short-term needs of the organization and more importantly the needs of the customers of CVC Finance Limited. Despite the pandemic, the Company was able to increase its customer deposit size to BDT 1770.55 million in 2021 from BDT 1526.91 million in the previous year, an impressive growth of 15.96%. CVC Finance Limited managed to increase its customer deposit, thanks to innovative deposit campaigns. Overall, the balance sheet size of CVC Finance Limited

increased by 5.20% and ended at BDT 5758.83 million. The capital adequacy ratio came down to 24.18% in 2021 from 24.94% in the previous year. Revenue of the Company increased significantly to BDT 203.42 million from BDT 66.47 million in the previous year, a growth of 206.03%. Operating profit increased to BDT 281.89 million with a growth of 44.09% and Net Profit after Tax has remarkably increased to BDT. 47.58 million with a growth rate of 60.18% Despite intensified challenges, CVC Finance managed its portfolio efficiently closing the year 2021 with an NPL of 11.61% which is lower than that of industry average percent of 19.33%

Corporate Governance and Risk Management:Robust internal control system helps CVC Finance

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to ensure achieving goals and aspirations sustainably. This control system also ensures that the company complies with local laws and regulations as well as policies, plans, internal and external rules, guidelines and procedures, and subsequently decrease the risk of unexpected loss or damage to the financial institution. The Board has delegated the responsibility of overall supervision of internal control system to Audit Committee of the Board. The key functionalities that have been established in reviewing adequacy and integrity of the system of internal control.

• Different committees have been formed consisting of relative stakeholders with expertise on the subject matter to assist the Board in guiding the company’s operation in line with corporate mission, vision and strategies.

• The internal audit department of the company checks for compliance with policies and procedures and the effectiveness of the internal control system on regular basis and highlights significant findings in respect of any non-compliance.

• he Audit Committee of the Board reviews the internal control findings identified by the Internal Audit, Inspection Team of Bangladesh Bank, External Auditors and Management, and evaluates the adequacy and effectiveness of the risk management and internal control systems.

• The Board of Directors holds meetings at suitable intervals with senior management, internal auditors, external auditors and the Audit Committee for evaluating the effectiveness of internal control system and provides necessary guidance.

• The internal audit department has direct access to the Audit Committee as and when required to ensure submission of internal audit findings to the Audit Committee without any management intervention.

Financial reporting:

• The Financial Statements (FS) are prepared in accordance with applicable

International Financial Reporting Standards (IFRSs) and relevant circulars/instructions issued by Bangladesh Bank (BB) and any departure from IFRS due to BB regulation has been adequately disclosed in the notes to the FS.

• Proper books of account as required by law have been maintained by CVC Finance Limited.

• Appropriate accounting policies have been consistently applied in preparation of the financial statements.

CSR activities:The Managing Director of CVC Finance Limited met with Mr. Korvi Rakshand, the Founder of JAAGO, to discuss their educational program needs for 2022. After a fruitful discussion CVC Finance Limited decided to sponsor the furnitures and fixtures of the new classrooms of JAAGO Foundation. This sponsorship was a great opportunity for CVC Finance Limited to partner with JAAGO for their educational needs.Under Patient Adoption Program of BANCAT (Bangladesh Cancer Aid Trust), CVC Finance has taken responsibility of treating three cancer patients with a small contribution every month. The treatments range from patient’s doctor visit fee, chemotherapy/radiotherapy, medicine purchase, hospital admission to operation and such.

Contribution to National Exchequer:Government is considered as one of the most important stakeholders which play a critical role in the economic development of the country. Being a legitimate and ethical company, CVC Finance Ltd. contributes to the Government Exchequer when the necessary amounts fall due. For the year 2021 CVC Finance Ltd. paid an amount equal to BDT 41.03 million composed of income tax, VAT and excise duty. This is in comparison to BDT 48.89 million in 2020, reflecting its fair and consistent commitment towards national contribution.

On behalf of the Board of Directors.

Mahmud HussainChairman

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INNOVATIONRELAY CENTRE

Abul Kalam Boorhan Uddin is an ambitious man and always dreams big. After completing his masters’ degree, he joined in a job, but his intention was to be a successful entrepreneur and left his job with a view to be an entrepreneur. He then started his business of Diaper in the name of BS Health Care but could not run his business properly due to capital crisis as big market players in baby essential market already grabbed the market.Mr. Boorhan Uddin tried to manage his shortfall capital from different sources, but was disappointed by the response he received from others. Then he communicated to different Banks and NBFIs to get a financing facility to invest his business. As a new entrepreneur, he could not properly fulfill the eligible criteria of many banks and NBFIs to get the required finance facility of his business. He thought that his desires and ambitions to be a successful entrepreneur was going to be tough and challenging.At that time, he communicated with CVC Finance Limited and explained his dream and desires with his business. After knowing all his story, We, CVC Finance Limited stood beside him by

financing him Tk. 20,00,000 (Twenty Lac) within five days after applying for his loan and without any hassle.He used the money he borrowed from us to significantly expand his firm after accepting a loan from us. Currently, he orders diapers from China, imports them through his own IRC (Innovation Relay Centre), and distributes them throughout Bangladesh’s districts. He now has around 30 salespeople selling his items in various districts. In the coming year, Mr. Boorhan intends to hire more salespeople to cover more districts. We are pleased to learn that CVC Finance Limited has helped small business owners such as Mr. Boorhan achieve success and create more employments. We believe that we, as a corporation, have a responsibility to work for the country, for the nation, and that in order to fulfill this responsibility, we must all work to improve the country.We financed him again of Tk. 5,00,000 (Five Lac) at 4.00 percent during the Covid-19 epidemic to lessen the pandemic impact, and he successfully settled the debt.

228

AUDITEDSTATEMENTS

229

AUDITOR’S REPORT ANDAUDITED FINANCIAL

STATEMENTS OFCVC FINANCE LIMITED &

IT’S SUBSIDIARYAS AT AND FOR THE

YEAR ENDED 31 DECEMEBER 2021

HODA VASI CHOWDHURY & COCHARTERED ACCOUNTANTS

Independent Auditor’s Report to the Shareholders of CVC Finance Limited Report on the Audit of the Con-solidated and Separate Financial Statements

OPINION

BASIS FOR OPINION

We have audited the consolidated financial statements of CVC Finance Limited and its subsidiaries (the “Group”) as well as the separate financial statements of CVC Finance Limited (the “Company”) which comprise the consolidated and separate balance sheets as at 31 December 2021 and the consolidated and separate profit and loss accounts, the consolidated and separate statements of changes in equity and the consolidated and separate cash flow statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Company give a true and fair view of the consolidated financial position of the Group and separate financial statements of the Company as at 31 December 2021 and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note 2.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group and the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA

Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

230

KEY AUDIT MATTERSKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

National Office: BTMC Bhaban (6th & 7th Floor), 7-9 Karwan Bazar Commercial Area, Dhaka- 1215, Bangladesh

Chattogram Office : Delwar Bhaban (4th Floor), 104 Agrabad Commercial Area, Chattogram-4100, Bangladesh

Measurement of provision for loans, advances and leases and interest income recognition

Description of key audit matters Our response to key audit matters

The process for estimating the provision for loans, advances and leases portfolio associated with credit risk is significant and complex.

For the individual analysis for large exposure, provisions calculation consider the estimates of future business performance and the market value of collateral provided for credit transactions.

For the collective analysis of exposure on portfolio basis, provision calculation and reporting are annually processed that deals

We tested the design and operating effectiveness of key controls focusing on the following:

Credit appraisal, loan disbursement procedures, monitoring and provisioning process;

Identification of loss events, including early warning and default warning indicators;

Reviewed quarterly Classification of Loans (CL);

Our substantive procedures in relation to the provision for loans and advances portfolio comprised the following:

Reviewed the adequacy of the general and specific provisions in line with related Bangladesh Bank guidelines;

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with voluminous database, assumptions and estimates. As at 31 December 2021, the Company reported total gross loans, advances and leases of BDT 4,129,376,833 (31 December 2020: BDT 3,977,217,215) and provision for loans and advances of BDT 205,397,630 (31 December 2020: BDT 123,613,855).

We have focused on the following significant judgments and estimates which could give rise 10 material misstatement or management bias:

Completeness and timing of recognition of loss events in accordance with criteria set out in DFIM Circular no 04 dated 26 July 2021;

For individually assessed provisions, the, measurement of the provision may be dependent on the valuation of collateral, estimates of exit values and the timing of cash flows;

Provision measurement primarily dependent upon key assumptions relating to probability of default, ability to repossess collateral and recovery rates

Assessed the methodologies on which the provision amounts based, recalculated the provisions and tested the completeness and accuracy of the underlying information;

Assessed the appropriateness and presentation of disclosures against relevant accounting standards and Bangladesh Bank guidelines; and

Finally compared the amount of loan provision and loan classification disclosed in the financial statements with the quick summary report prepared by Bangladesh Bank.

Considering the unprecedented adverse impact on Bangladesh economy due to COVID 19, Bangladesh Bank has instructed NBFIs not to further downgrade any loan/lease/advance from its existing classification applicable as at I January 2021 if client has paid 15% of total outstanding of 2021 and interest income may be recognized considering on the future risk of recovery. Initially the duration of this moratorium for any further downgrade was up to 30 June 2021 considering the fact that client must have to pay 50% of total payments required for 2021, but considering longer adverse impact of COVID 19 this has been further extended to 31 December 2021 vide DFIM Circular Letter no 33 dated 19 December 2021 and payment is reduced to 15%. However, the Company has kept specific provision of BDT 67,671,607 during the current period,

The said BB Circular has also instructed to consider all installments payable during the period from I January to 31 December 2021 as deferred and reschedule the

number of installment and amount from I January 2022. As a result, the number of installments unpaid during January to December 2021 shall be added with the revised repayment schedule.

No penal interest or additional fee/charge/commission shall be imposed on these deferred instalments.

232

We have selected samples to check compliance of above Bangladesh Bank instructions. However, due to the current unceflainty of the overall economic situation both in Bangladesh and Globally there are inherent risk that the judgment applied by Management in assessing recoverability of interest income may be different than the actual situation in future.

We have assessed the processes and controls put in place by the Company to ensure all major investment decisions are undertaken through a proper due diligence process.We tested a sample of investments valuation as at 31 December 2021 and compared our results to the recorded value.

Finally, we assessed the appropriateness and presentation of disclosures against relevant accounting standards and Bangladesh Bank guidelines.

We tested the design and operating effectiveness of the Company’s IT access controls over the information systems that are critical to financial reporting.

We tested IT general controls (logical access, changes management and aspects of IT operational controls). This included testing that requests for access to systems were appropriately reviewed and authorized.

We tested the Company’s periodic review of access rights and reviewed requests of changes to systems for appropriate approval and authorization.

We considered the control environment relating to various interfaces, configuration and other application layer controls identified as key to our audit.

Description of key audit matters

IT systems and controls

In the absence of a quoted price in an active market, the fair value of unquoted shares and bonds, especially any impairment is calculated using valuation techniques which may take into consideration direct or indirect unobservable market data and hence require an elevated level of judgment.

Our audit procedures have a focus on IT systems and controls due to the pervasive nature and complexity of the IT environment, the large volume of transactions processed in numerous locations daily and the reliance on automated and IT dependent manual controls.

233

Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated and separate financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, on the other information obtained prior to the date of this audit report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Group and also separate financial statements of the Company in accordance with IFRSs as explained in note 2, and for such internal control as management determines is necessary to enable the preparation of Consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing these Consolidated and separate financial statements, management is responsible for assessing the Groups’ and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management cither intends to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s and Company’s financial reporting process.

Reporting on other information

Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements and Internal Controls

234

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on (he audit evidence obtained, whether a material uncertainty exists related to events or conditions that nut)’ cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

235

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were or most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

In accordance with the Companies Act, 1994, the Securities and Exchange Rules 2020, the Financial Institutions Act, 1993 and the rules and regulations issued by Bangladesh Bank, we also report that:

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

In our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;

The consolidated and separate balance sheet and consolidated and separate profit and loss account together with the annexed notes dealt with by the report are in agreement with the books of account and returns;

The financial statements of the Company have been drawn up in conformity with the Financial Institutions Act, 1993 and in accordance with the accounting rules and regulations which were issued by Bangladesh Bank to the extent applicable to the Company;

Adequate provisions have been made for loans, advances, leases, investment and other assets which are, in our opinion, doubtful of recovery and Bangladesh Bank’s instructions in this regard have been followed properly;

The financial statements of the Company conform

to the prescribed standards set in the accounting regulations which were issued by Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

The records and statements which were submitted b branches have been properly maintained and recorded in the financial statements;

Statements sent to Bangladesh Bank have been checked on sample basis and no inaccuracy has come to our attention;

Taxes and other duties were collect to be and deposited in the Government treasury by the Company as per Government instructions found satisfactory based on test checking;

Nothing has come to our attention that the Company has adopted any unethical means i.e. ‘window dressing’ to inflate the profit and mismatch between the maturity of assets and liabilities,

Proper measures have been taken to eliminate the irregularities mentioned in the inspection report of Bangladesh Bank and the instructions which were issued by Bangladesh Bank and

Report on other Legal and Regulatory Requirements

236

other regulatory authorities have been complied properly as disclosed to us by management;

Based on our work as mentioned above under the auditor’s responsibility section, the internal control and the compliance of the Company is satisfactory, and effective measures have been taken to prevent possible material fraud, forgery and internal policies are being followed appropriately;

The Company has complied with relevant laws pertaining to capital, reserve and net worth, cash and liquid assets and procedure for sanctioning and disbursing loans/leases found satisfactory;

We have reviewed over 80% of the risk weighted assets of the Company and we have spent around 900 person hours for the audit of the books and accounts of the Company;

The Company has complied with relevant instructions which were issued by Bangladesh Bank relevant to classification, provisioning and calculation of interest suspense;

The Company has complied with the ‘First Schedule’ of the Financial Institutions Act, 1993 in preparing these financial statements; and

All other issues which in our opinion are important for the stakeholders of the Company have been adequately disclosed in the audit report.

Dhaka, 30 May 2022DVC: 2205301512AS823224

Shaikh Hasibur Rahman FCAEnrolment no 1512Hoda Vasi Chowdhury & CoChartered Accountants

237

CVC Finance LimitedCONSOLIDATED BALANCE SHEET

As at 31 December 2021

PARTICULARS NotesAMOUNT IN TAKA

31 December, 2021

PROPERTY AND ASSETS

CASH 21,660,459

Cash in hand (including foreign currencies) 3 (a) 77,076 Balance with Bangladesh Bank & and its agent banks 3.2 21,583,383 (Including foreign currencies)

BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS 1,248,959,318 In Bangladesh 4 (a) 1,248,959,318 Outside Bangladesh 4.2 -

MONEY AT CALL ON SHORT NOTICE 5.0 -

INVESTMENTS 43,648,065

Government 6.1 - Others 6 (a) 43,648,065

LOANS, ADVANCES AND LEASES 4,129,376,833

Loans, cash credits, overdrafts, leases etc. 7 (a) 4,129,376,833 Bills purchased and discounted -

FIXED ASSETS INCLUDING PREMISES, FURNITURE AND FIXTURES 8 (a) 58,065,757

OTHER ASSETS 9 (a) 209,882,600 NON-BUSINESS ASSETS -

TOTAL ASSETS 5,711,593,034

LIABILITIES AND CAPITAL

LIABILITIES

BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS 10 (a)

2,140,690,800 AND AGENTS

DEPOSITS AND OTHER ACCOUNTS 1,610,551,073

Current deposits - Bills payable - Savings deposits 751,500 Term deposits 11 (a) 1,512,983,511 Bearer certificates of deposits - Other deposits 11.2 96,816,062

OTHER LIABILITIES 12 (a) 587,438,545

TOTAL LIABILITIES 4,338,680,418

238

CAPITAL/SHAREHOLDERS’ EQUITY 1,372,912,616

Paid-up Capital 13.2 1,189,650,000 Statutory reserve 14 (a) 52,763,557 Revaluation reserve 15.0 - Retained earnings 16 (a) 45,107,087 NCI 85,391,972

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY 5,711,593,034

239

CVC Finance LimitedCONSOLIDATED OFF-BALANCE SHEET ITEMS

As at 31 December 2021

PARTICULARSNotes

Amount in TakaDecember 31,

2021

Contingent LiabilitiesAcceptances and endorsements - Letters of guarantee - Irrevocable letters of credit - Bills for collection - Other contingent liabilities -

-

Other CommitmentsDocumentary credits and short term trade related transactions - Forward assets purchased and forward deposits placed - Undrawn note issuance and revolving underwriting facilities - Spot and foreign exchange rate contract - Undrawn formal standby facilities, credit lines and other

- Commitments

-

TOTAL OFF-BALANCE SHEET ITEMS INCLUDING CONTINGENT LIABILITIES -

NET ASSET VALUE PER SHARE (NAVPS) 11.54

The annexed notes form an integral part of these financial statements.

Md. Shakhawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hussain Head of Accounts DMD &

Company SecretaryManaging Director Chairman

See the annexed report of even date.

Shaikh Hasibur Rahman FCAEnrolment no 1512

Dhaka: 30 May 2022 Hoda Vasi Chowdury & CoDVC: 2205301512AS823224 Chartered Accountants

240

CVC Finance LimitedCONSOIDATED PROFIT AND LOSS ACCOUNT

For the year ended 31 December 2021

Particulars NotesAmount in TakaDecember 31,

2021

Interest income 18.0 523,137,770

Less: Interest expenses on borrowings, deposits etc. 19.0 (319,719,698)

NET INTEREST INCOME 203,418,073

Investment income 18.1 16,029,583

Commission, exchange and brokerage 20.0 3,073,202

Other operating income 21 (a) 70,507,606

89,610,391

TOTAL OPERATING IN-COME 293,028,464

Salaries and allowances 23.0 68,434,808

Rent, taxes,insurances, electricity etc. 24.0 17,456,189

Postage, stamps, telecommunication etc. 25.0 1,260,636

Stationery, printings, advertisements etc. 26.0 1,223,550

Managing Director’s salary and allowances 27.0 6,840,000

Directors’ fees 28.0 1,520,000

Auditors’ fees 29.0 172,500

Depreciation and repair of company’s assets 30.0 8,709,027

Other operating expenses 31 (a) 24,672,013 TOTAL OPERATING EX-PENSES 130,288,723

PROFIT BEFORE PROVI-SION 162,739,741

Provision for loan, advances and leases 32.0 81,783,775

Provision for diminution in value of investments 33.0 (215,901)

Provision for Legal fee Receivable 34.0 2,317,485

TOTAL PROVISION 83,885,360

Profit before taxes 78,854,381

PROVISION FOR TAXATION 29,444,380

Current tax 35 (a) 29,235,648

Deferred tax 208,732

241

NET PROFIT AFTER TAXA-TION

49,410,001

OTHER COMPREHENSIVE INCOME

Fair valuation surplus/(deficit) of investment (58,998)

TOTAL COMPREHENSIVE INCOME

49,351,003

ATTRIBUTABLE TOSHAREHOLDERS OF THE COMPANY 48,642,874

NON-CONTROLLING INTEREST 708,129

49,351,003

EARNINGS PER SHARE (EPS) 0.42

The annexed notes form an integral part of these financial statements.

Md. Shakhawat Hossain Shah Wareef

HossainSyed Minhaj Ahmed Mahmud Hussain

Head of Accounts DMD & Compa-

ny SecretaryManaging Director Chairman

Signed in terms of our separate report of even date annexed.

Shaikh Hasibur Rahman FCA

Enrolment no 1512

Dhaka: 30 May 2022 Hoda Vasi Chowdury & Co

DVC: 2205301512AS823224 Chartered Accountants

242

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CVC Finance Limited & Its SubsidiariesCONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2021

ParticularsAmounts in Taka

December 31, 2021

A.Cash flows from operat-ing activitiesInterest re-ceived 450,606,843

Interest paid (360,173,111)

Fees and commission received 3,073,202

Cash paid to emoloyees (75,274,808)

Cash paid to suppliers (2,484,186)Income taxes paid (12,846,481)

Received from other operating activities 75,397,867 Cash Generated from operating activities of subsidiary 5,010,105

Payments for other operating activities (35,540,649)CASH GENERATED FROM OPERATING ACTIVITIES BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 47,768,781

INCREASE/DECREASE IN OPERATING ASSETS AND LIA-BILITIESStatutory de-posit - Trading securi-ties -

Loans, advances and leases (152,159,708)

Other assets (27,130,632)

Deposit and other accounts 243,636,947

Net drawdown of short term loans 4,356,236

Other liabilities on account of customers (33,700,267)

Other liabilities 123,149,967

158152543 NET CASH FROM OPERAT-ING ACTIVITIES 205,921,324

B. Cash flows from investing activitiesProceeds from sale of securities 12,531,610

Payments for purchase of securities 4,014,845 Purchase of fixed assets including premises, furniture and fixtures (11,885,598)

Decrease in investment in market price (Corporate A/C) (23,355,138)

Dividend Income 83,318

(Increase)/decrease regarding purchase and sale of subsidiary (150,000,000)

NET CASH USED IN INVESTING ACTIVITIES (168,610,962)

244

C. Cash flows from financing activitiesReceipt of borrowings from other banks, financial institutions and agents 3,700,000 Receipt of borrowings from other banks, financial institutions and agents (110,247,401)

Dividend paid in cash (19,404,000)

NET CASH FROM FINANCING ACTIVITIES (125,951,401)

D.Net increase/(Decrease) in cash and cash equivalents (A+B+C)

(88,641,039)Effects of exchange rate changes on cash and equivalents -

E.Cash and cash equivalents at beginning of the year

1,359,260,816

F.CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (D+E)

1,270,619,777

CASH AND CASH EQUIVALENTS AT THE END OF THE YEARCash in hand (including foreign currencies) 77,076 Balance with Bangladesh Bank and its agent banks (including foreign currencies) 21,583,383 Balance with other banks and financial institu-tions 1,248,959,318 Money at call and short notice -

1,270,619,777

The annexed notes form an integral part of these financial statements.

Md. Shakhawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hussain Head of Accounts DMD & Company Secretary Managing Director Chairman

245

CVC Finance LimitedBALANCE SHEET

As at 31 December 2021

Particulars NotesAMOUNT IN TAKA

December 31, December 31,

2021 2020

PROPERTY AND ASSETS

CASH 3.0 21,655,199 21,207,454

Cash in hand (including foreign currencies) 3.1 71,816 194,195

Balance with Bangladesh Bank & and its agent banks 3.2 21,583,383 21,013,259

(Including foreign currencies)

BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS 4.0 1,246,477,787 1,321,215,618

In Bangladesh 0.0 1,246,477,787 1,321,215,618

Outside Bangladesh 4.2 - -

MONEY AT CALL ON SHORT NOTICE 5.0 - -

INVESTMENTS 6.0 159,220,977 13,235,822

Government 6.1 - -

Others 6.2 159,220,977 13,235,822

LOANS, ADVANCES AND LEASES 4,129,376,833 3,977,217,125

Loans, cash credits, overdrafts, leases etc. 7.0 4,129,376,833 3,977,217,125

Bills purchased and discounted - - FIXED ASSETS INCLUDING PREMISES, FURNITUREAND FIXTURES 8.0 31,455,124 27,862,481

OTHER ASSETS 9.0 170,644,264 113,196,045

NON-BUSINESS ASSETS - -

TOTAL ASSETS 5,758,830,184 5,473,934,544

LIABILITIES AND CAPITAL

LIABILITIES

BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS AND AGENTS 10.0 2,140,690,800 2,175,226,559

246

DEPOSITS AND OTHER ACCOUNTS 11.0 1,770,551,073 1,526,914,126

Current deposits - -

Bills payable - -

Savings deposits 11.0 751,500 761,000

Term deposits 11.1 1,672,983,511 1,428,975,852

Bearer certificates of deposits - -

Other deposits 11.2 96,816,062 97,177,274

OTHER LIABILITIES 12.0 561,129,861 509,816,089

TOTAL LIABILITIES 4,472,371,734 4,211,956,774

CAPITAL/SHAREHOLDERS’ EQUITY 1,286,458,450 1,261,977,770

Paid-up Capital 13.2 1,189,650,000 1,155,000,000

Statutory reserve 14.0 52,763,557 43,247,421

Revaluation reserve 15.0 - -

Retained earnings 16.0 44,044,893 63,730,349

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY 5,758,830,184 5,473,934,544

247

CVC Finance LimitedOFF-BALANCE SHEET ITEMS

As at 31 December 2021

Particulars NotesAMOUNT IN TAKA

December 31, December 31,

2021 2020

Contingent LiabilitiesAcceptances and endorsements - - Letters of guarantee - - Irrevocable letters of credit - - Bills for collection - - Other contingent liabilities - -

- -

Other CommitmentsDocumentary credits and short term trade related trans-actions

- -

Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities

- -

Spot and foreign exchange rate contract - - Undrawn formal standby facilities, credit lines and other - - Commitments

- -

TOTAL OFF-BALANCE SHEET ITEMS INCLUDING CONTINGENT LIABILITIES

- -

NET ASSET VALUE PER SHARE (NAVPS) 37.0 10.81 10.93

The annexed notes form an integral part of these financial statements.

Md. Shakhawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hussain Head of Accounts DMD & Company Secretary Managing Director Chairman

See the annexed report of even date.

Shaikh Hasibur Rahman FCAEnrolment no 1512Hoda Vasi Chowdury & CoChartered Accountants

Dhaka: 30 May 2022

DVC: 2205301512AS823224

248

CVC Finance LimitedPROFIT AND LOSS ACCOUNT

For the year ended 31 December 2021

Particulars NotesAmount in Taka

December 31, 2021 December 31, 2020

Interest income 18.0 523,137,770 502,762,693 Less: Interest expenses on borrowings, deposits etc. 19.0 (319,719,698) (436,296,326)

NET INTEREST INCOME 203,418,073 66,466,367

Investment income 18.1 16,029,583 1,665,304 Commission, exchange and brokerage 20.0 3,073,202 24,030,961 Other operating income 21.0 59,368,284 103,473,348

78,471,069 129,169,613

TOTAL OPERATING INCOME 281,889,142 195,635,980

Salaries and allowances 23.0 68,434,808 64,316,384 Rent, taxes,insurances, electricity etc. 24.0 17,456,189 17,482,242 Postage, stamps, telecommunication etc. 25.0 1,260,636 629,510 Stationery, printings, advertisements etc. 26.0 1,223,550 1,057,499 Managing Director’s salary and allowances 27.0 6,840,000 6,705,000 Directors’ fees 28.0 1,520,000 952,000 Auditors’ fees 29.0 172,500 115,000 Depreciation and repair of company’s assets 30.0 8,709,027 9,038,863 Other operating expenses 31.0 16,391,960 7,853,836

TOTAL OPERATING EXPENSES 122,008,670 108,150,334

PROFIT BEFORE PROVISION 159,880,472 87,485,645

Provision for loan, advances and leases 32.0 81,783,775 16,062,007 Provision for diminution in value of investments 32.1 (215,901) 50,128 Provision for Legal fee Receivable 32.2 2,317,485 -

TOTAL PROVISION 83,885,360 16,112,135

PROFIT BEFORE TAXES 75,995,112 71,373,510

PROVISION FOR TAXATION 35.0 28,414,432 41,668,437

249

Current tax 28,414,432 41,668,437 Deferred tax - -

NET PROFIT AFTER TAXATION 47,580,680.10 29,705,073.01 Retained surplus brought forward from previous year 63,730,349 39,966,291

111,311,029.11 69,671,364.01

APPROPRIATIONS

Statutory reserve 9,516,136 5,941,015 Dividend equalization fund 57,750,000 - Special reserve fund - - Retained surplus 44,044,893 63,730,349

111,311,029.11 69,671,364.01

EARNING PER SHARE (EPS) 36.0 0.40 0.25

The annexed notes form an integral part of these financial statements.

Md. Shakhawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hussain

Head of Accounts DMD & Company Secretary Managing Director Chairman

See the annexed report of even date.

Shaikh Hasibur RahmanFCAEnrolment no 1512

Dhaka: 30 May 2022DVC: 2205301512AS823224

Hoda Vasi Chowdury & Co

Chartered Accountants

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252

CVC Finance LimitedCASH FLOW STATEMENT

For the year ended 31 December 2021

ParticularsAMOUNTS IN TAKA

December 31, 2021 December 31, 2020

A. Cash flows from operating activitiesInterest received 442,937,260 419,489,904

Interest paid (360,173,111) (394,584,185)

Fees and commission received 3,073,202 24,030,961

Cash paid to emoloyees (75,274,808) (71,021,384)

Cash paid to suppliers (2,484,186) (1,687,009)

Income taxes paid (12,646,587) (17,280,843)

Received from other operating activities 75,397,867 105,138,652

Payments for other operating activities (35,540,649) (26,403,079)

CASH GENERATED FROM OPERATING ACTIVITIES BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 35,288,987 37,683,017

INCREASE/DECREASE IN OPERATING ASSETS AND LIABILITIESStatutory deposit - -

Trading securities - -

Loans, advances and leases (152,159,708) 156,747,630

Other assets (27,130,632) 12,552,696

Deposit and other accounts 243,636,947 (134,577,224)

Net drawdown of short term loans 4,356,236 (64,764,632)

Other liabilities on account of customers (33,700,267) (58,694,890)

Other liabilities 123,149,967 5,323,613

158,152,543 (83,412,807)NET CASH FROM OPERATING ACTIVITIES 193,441,530 (45,729,789)

B. Cash flows from investing activitiesProceeds from sale of securities 12,531,610 5,097,522

Payments for purchase of securities 4,014,845 (12,355,137)Purchase of fixed assets including premises, furniture and fixtures

(8,326,670) (4,787,451)

Proceeds from sale of fixed assets including premis-es, furniture and fixtures -

-

(Increase)/decrease regarding purchase and sale of subsidiary (150,000,000) -

NET CASH USED IN INVESTING ACTIVITIES (141,780,215) (12,045,066)

253

Receipt of borrowings from other banks, financial institutions and agents

(110,247,401) (51,651,978)

Dividend paid in cash (19,404,000) -

NET CASH FROM FINANCING ACTIVITIES (125,951,401) 57,262,286

D.Net increase/(Decrease) in cash and cash equiva-lents (A+B+C)

(74,290,085) (512,568)

Effects of exchange rate changes on cash and equiv-alents

- -

E.Cash and cash equivalents at beginning of the year

1,342,423,071 1,342,935,640

F.CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (D+E)

1,268,132,986 1,342,423,071

CASH AND CASH EQUIVALENTS AT THE END OF THE YEARCash in hand (including foreign currencies) 71,816 194,195 Balance with Bangladesh Bank and its agent banks (including foreign currencies)

21,583,383 21,013,259

Balance with other banks and financial institutions 1,246,477,787 1,321,215,617

Money at call and short notice - -

1,268,132,986 1,342,423,071

The annexed notes form an integral part of these financial statements.

Md. Shakawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hossain Head of Accounts DMD & Company Secretary Managing Diector Chairman

C. Cash flows from financing activitiesReceipt of borrowings from other banks, financial institutions and agents

3,700,000 108,914,264

254

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CVC FINANCE LIMITEDNOTES TO THE FINANCIAL STATEMENTS

AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2021

1. Company and its activities 1.1 Domicile, legal form, country of incorporation and status of the company CVC Finance Limited was incorporated in Bangladesh as a public limited company on 31 March 2015 under the companies Act, 1994 vide registration # C-122113/15 after initial approval and issuance of letter of intent from Bangladesh Bank. The registered office of the company is situated at Safura Tower (Level – 5), 20 Kemal Ataturk Avenue, Banani, Dhaka - 1213. The Company is registered as a Financial Institution under the Financial Institutions Act, 1993. However subsequently the FI license was issued in July, 2015 and full operation of the Company started in February 2016

1.2 Address of Corporate office and place of business of the companyThe Corporate office of the company is at Green Grandeur Tower (Level 7 & 10), 58/E,Kamal Ataturk Avenue, Banani, Dhaka-1213, Bangladesh. Company’s principal office is also situated at the same address and at present, the company has no branch office in Bangladesh or abroad.

1.3 Principal activities of the companyThe company concentrates its activities for full payout leases and term finances, extended based on recovering the full capital cost of the asset/finance, plus imputed interest charges. The company eventually will seek to broaden its leasing and financing services by entering into vendor programs with asset suppliers, underwriters, brokers, leveraged leases, lease syndications, sale and lease back finances, financing for business expansions and temporarily financed assets. The company may extend guarantees for lease/finance obligations to other institutions/companies subject to the Laws and Rules of the Government of the Peoples’ Republic of Bangladesh.

1.4 Nature of operation of the companyThe company extends lease finance for all types of machinery, equipment, household durables including vehicles for the purpose of industrial, commercial, agricultural, and personal use in Bangladesh and also term finance to its clients within the purview of the Law. 1.5 Information regarding Subsidiary companies 1.5.1 CAPM Advisory LimitedCAPM Advisory Limited (hereinafter referred to as “”the Company””) was incorporated in Bangladesh on November 13, 2011 as Private Company limited by shares under Companies Act 1994, vide registration no C-96928/11 and subsequently on April 04, 2012, CAPM Advisory Limited has received a full-fledged Merchant Banking license from the Bangladesh Securities and Exchange Commission. The registered office of the Company is located at Rupsha Tower, Flat# A-2, Plot# 07, Road# 17, Banani C/A. The business address of the Company is at Tower Hamlet (9th Floor), 16 Kemal Avenue, Banani, Dhaka.As a full- service merchant bank, the company offer issue management services, portfolio

256

management services, merger & actuation, joint venture, corporate advisory services, research and underwriting services in the financial markets of Banglades.

2 Basis of preparation and significant accounting policies.

2.1 Statement of complianceThe consolidated financial statements and separate financial statements of the Company have been prepared on a going concern basis following accrual basis of accounting except for cash flow statement which is stated at market value in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh, except the circumstances where local regulations differ, and the Companies Act 1994, the Financial Institutions Act 1993, Securities and Exchange Rules 2020 & the (Listing) Regulations 2015 of Dhaka & Chittagong Stock Exchanges and other applicable laws and regulations. The presentation of the financial statements has been made as per the requirements of DFIM Circular No: 11, dated December 23, 2009, issued by the Department of Financial Institutions and Markets (DFIM) of Bangladesh Bank. The activities and accounting heads mentioned in the prescribed form, which are not applicable for the financial institutions, have been kept blank in the financial statements.The requirements of accounting standards as per IFRS that have been departed to comply with Bangladesh Bank requirements have been disclosed in detail in note-2.3 & Annexure-C.

However, this departure with IFRS has been made by following all of the relevant provisions of IAS-1 and the details disclosures are given in note-2.3 & Annexure-C by following the provision of Para 20 of IAS-1 (Presentation of Financial Statement)

2.2 Basis of measurementThis financial statements have been prepared based on International Accounting Standards (IASs) and International Financial Reporting Standards (IFRS) and no adjustment has been made for inflationary factors affecting the financial statements. The accounting policies, unless otherwise stated, have been consistently applied by the Company and are consistent with those of the previous year.

2.3 Disclosure of deviations from few requirements of IFRS due to mandatory compliance with Bangladesh Bank’s requirements Bangladesh Bank (the local Central Bank) is the prime regulatory body for Financial Institutions in Bangladesh. Some requirements of Bangladesh Bank’s rules and regulations contradict with those of financial instruments and general provision standards of IAS and IFRS. As such the company has departed from those contradictory requirements of IAS/IFRS in order to comply with the rules and regulations of Bangladesh Bank, which are disclosed in Annexure-C along with financial impact where applicable.

257

SL 1

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com

e

for

SM

A a

nd

cla

ssifi

ed

lea

se,

loa

ns a

nd

ad

vanc

es

IFR

S 9

“F

ina

ncia

l In

stru

me

nts”

Inco

me

fr

om

fin

anc

ial

ass

ets

m

ea

sure

d

at

am

ort

ize

d

cost

is

re

cog

nize

d

thro

ugh

effe

ctiv

e

inte

rest

ra

te

me

tho

d

ove

r th

e

term

o

f th

e

inve

stm

ent

. O

nce

a

fin

anc

ial

ass

et

is

imp

aire

d,

inve

stm

ent

inco

me

is r

eco

gni

zed

in

pro

fit a

nd l

oss

acc

oun

t o

n th

e

sam

e

ba

sis

ba

sed

o

n re

vise

d

carr

ying

am

oun

t.

As

pe

r FI

D c

ircul

ar

No

. 0

3, d

ate

d

03

Ma

y 2

00

6, o

nce

an

inve

stm

ent

o

n le

ase

s,

loa

ns

and

a

dva

nce

s is

te

rme

d

as

“Sp

eci

al

Me

ntio

n A

cco

unt

(SM

A)”,

in

tere

st

inco

me

fr

om

su

ch

inve

stm

ent

s a

re

not

allo

we

d

to

be

re

cog

nize

d

as

inco

me

, ra

the

r th

e

resp

ect

ive

a

mo

unt

nee

ds

to b

e c

red

ited

as

a

liab

ility

a

cco

unt

like

: in

tere

st

susp

ens

e a

cco

unt.

Dur

ing

the

ye

ar

an

am

oun

t o

f T

K. 1

18,5

57,

29

3 re

cog

nize

d a

s a

lia

bili

ty i

n th

e i

nte

rest

sus

pe

nse

a

cco

unt.

SL 3

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

kFi

nanc

ial o

r Pr

esen

tati

on E

ffec

t of

the

Dep

artu

re

Pre

sent

atio

n o

f ca

sh a

nd c

ash

e

qui

vale

nt

IAS

7

“Sta

tem

ent

of

Ca

sh F

low

s”

Ca

sh e

qui

vale

nt a

re s

hort

te

rm,

hig

hly

liqui

d

inve

stm

ent

s th

at

are

re

ad

ily c

onv

ert

ible

to

kno

wn

am

oun

ts o

f ca

sh a

nd o

nly

incl

ude

th

ose

inv

est

me

nts

whi

ch a

re f

or

a s

hort

te

nure

lik

e:

3 m

ont

hs o

r le

ss p

erio

d.

In

the

lig

ht

of

ab

ove

, b

ala

nce

w

ith B

ang

lad

esh

Ba

nk a

nd fi

xed

te

rm d

ep

osi

ts s

houl

d b

e t

rea

ted

a

s in

vest

me

nt a

sse

t ra

the

r th

an

cash

eq

uiva

lent

as

it is

illi

qui

d

ass

et

and

no

t a

vaila

ble

fo

r us

e

in d

ay

to d

ay

op

era

tions

.

Ba

ngla

de

sh

Ba

nk

has

issu

ed

te

mp

late

s fo

r fin

anc

ial

sta

tem

ent

s vi

de

DFI

M c

ircul

ar

No

. 11,

da

ted

23

De

cem

be

r 2

00

9 w

hich

will

str

ictly

b

e

follo

we

d

by

all

ba

nks

and

N

BFI

s.

The

te

mp

late

s o

f fin

anc

ial

sta

tem

ent

s p

rovi

de

d

de

tail

pre

sent

atio

n fo

r st

ate

me

nt o

f ca

sh

flow

s.

yea

r 31

.12.2

02

0

have

b

ee

n p

rep

are

d

as

pe

r g

uid

elin

e

(DFI

M c

ircul

ar

No

. 11

, d

ate

d 2

3 D

ece

mb

er 2

00

9) o

f Ba

ngla

de

sh

Ba

nk.

259

SL

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

k

4

Fina

ncia

l or

Pres

enta

tion

Eff

ect o

f th

e D

epar

ture

Me

asu

rem

ent

o

f de

ferr

ed

tax

ass

et

IAS

12

“Inc

om

e T

ax”

A

de

ferr

ed

ta

x a

sse

t sh

all

be

re

cog

nize

d

for

all

de

duc

tible

te

mp

ora

ry

diff

ere

nce

s to

th

e

ext

ent

th

at

it is

p

rob

ab

le

tha

t ta

xab

le p

rofit

will

be

ava

ilab

le

ag

ain

st

whi

ch

the

d

ed

uctib

le

tem

po

rary

d

iffe

renc

e

can

be

ut

ilize

d.

As

pe

r DFI

M c

ircul

ar N

o. 7

, da

ted

31

July

20

11, n

o d

efe

rre

d ta

x a

sse

t ca

n b

e r

eco

gni

zed

fo

r a

ny d

ed

uctib

le

tem

po

rary

d

iffe

renc

e

ag

ain

st

lea

se, l

oa

ns a

nd a

dva

nce

s.

Dur

ing

this

ye

ar t

here

is n

o im

pa

ct

in th

e fi

nanc

ial s

tate

me

nts

due

to

this

de

pa

rtur

e a

s th

e c

om

pa

ny

did

no

t co

nsid

er

any

de

duc

tible

te

mp

ora

ry

diff

ere

nce

a

ga

inst

le

ase

s, lo

ans

and

ad

vanc

es.

260

SL 5

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

kFi

nanc

ial o

r Pr

esen

tati

on E

ffec

t of

the

Dep

artu

re

Pre

sent

atio

n a

nd d

iscl

osu

re

of F

ina

ncia

l S

tate

me

nts

and

Fin

anc

ial

Inst

rum

ent

s

IAS

1 “P

rese

nta

tion

of F

ina

ncia

l S

tate

me

nts”

IFR

S 9

“F

ina

ncia

l In

stru

me

nts”

and

I

FRS

7

“Fin

anc

ial

Inst

rum

ent

s:

Dis

clo

sure

”

Oth

er

Co

mp

rehe

nsiv

e

Inco

me

(O

CI)

is a

co

mp

one

nt o

f fin

anc

ial

sta

tem

ent

s o

r th

e

ele

me

nts

of

OC

I are

to b

e in

clud

ed

in a

sin

gle

o

the

r co

mp

rehe

nsiv

e

inco

me

st

ate

me

nt.

IAS

1 r

eq

uire

s se

pa

rate

lin

e it

em

fo

r in

tang

ible

ass

ets

on

the

fa

ce

of s

tate

me

nt o

f fina

ncia

l po

sitio

n.

IFR

S

9

and

IF

RS

7

req

uire

sp

eci

fic

pre

sent

atio

n a

nd

dis

clo

sure

rela

ting

to a

ll fin

anc

ial

inst

rum

ent

s.

Ba

ngla

de

sh

Ba

nk

has

issu

ed

te

mp

late

s fo

r fin

anc

ial

sta

tem

ent

s vi

de

DFI

M c

ircul

ar

No

. 11,

da

ted

23

De

cem

be

r 2

00

9 w

hich

will

str

ictly

b

e

follo

we

d

by

all

ba

nks

and

N

BFI

s.

The

te

mp

late

s o

f fin

anc

ial

sta

tem

ent

s is

sue

d b

y B

ang

lad

esh

B

ank

d

o

not

incl

ude

o

the

r co

mp

rehe

nsiv

e

inco

me

(O

CI)

nor

are

th

e

ele

me

nts

of

oth

er

com

pre

hens

ive

inco

me

allo

we

d to

in

clud

e in

a s

ing

le c

om

pre

hens

ive

in

com

e s

tate

me

nt.

Inta

ngib

les

ass

ets

a

re

not

sep

ara

tely

pre

sent

ed

on

the

fa

ce

of

sta

tem

ent

of

fina

ncia

l p

osi

tion;

ra

the

r it i

s p

rese

nte

d a

long

with

the

lin

e it

em

of fi

xed

ass

ets

.

As

pe

r B

ang

lad

esh

B

ank

g

uid

elin

es,

fin

anc

ial

inst

rum

ent

s a

re c

ate

go

rize

d,

reco

gni

zed

and

m

ea

sure

d

diff

ere

ntly

fr

om

th

ose

p

resc

ribe

d

in

IAS

39

. A

s su

ch

som

e d

iscl

osu

re a

nd p

rese

nta

tion

req

uire

me

nts

of

IFR

S

7 a

nd

IAS

32

ha

ve

not

be

en

ma

de

in

th

e

acc

oun

ts.

Fina

ncia

l S

tate

me

nts

for

the

ye

ar

end

31

.12.2

02

1 a

nd

corr

esp

ond

ing

ye

ar

of

31.12

.20

20

ha

ve b

ee

n p

rep

are

d

as

pe

r g

uid

elin

e (

DFI

M c

ircul

ar

No

. 11

, d

ate

d

23

De

cem

be

r 2

00

9) o

f Ba

ngla

de

sh B

ank

.

261

SL

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

k

6

Fina

ncia

l or

Pres

enta

tion

Eff

ect o

f th

e D

epar

ture

Pre

pa

ratio

n o

f “S

tate

me

nt o

f C

ash

Flo

ws”

IAS

7

“Sta

tem

ent

of

Ca

sh F

low

s”

The

Ca

sh fl

ow

sta

tem

ent

ca

n b

e

pre

pa

red

usi

ng e

ithe

r th

e d

irect

m

eth

od

or

the

ind

irect

me

tho

d.

The

pre

sent

atio

n is

se

lect

ed

to

p

rese

nt

the

se

cash

flo

ws

in

a

ma

nne

r th

at

is m

ost

ap

pro

pria

te

for

the

b

usin

ess

o

r in

dus

try.

T

he m

eth

od

se

lect

ed

is

ap

plie

d

cons

iste

ntly

.

As

pe

r D

FIM

Circ

ula

r N

o.

11,

da

ted

2

3 D

ece

mb

er

20

09,

C

ash

flo

w

sta

tem

ent

ha

s b

ee

n g

uid

ed

b

y th

e

Ba

ngla

de

sh

Ba

nk

whi

ch

is

the

mix

ture

of

dire

ct a

nd i

ndire

ct

me

tho

d.

Fina

ncia

l S

tate

me

nts

for

the

ye

ar

end

31

.12.2

02

1 a

nd

corr

esp

ond

ing

pe

riod

of

20

20

ha

ve

be

en

pre

pa

red

a

s p

er

gui

de

line

(D

FIM

ci

rcul

ar

No

. 11

d

ate

d

23

De

cem

be

r 2

00

9)

of

Ba

ngla

de

sh B

ank

.

SL

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

k

7

Fina

ncia

l or

Pres

enta

tion

Eff

ect o

f th

e D

epar

ture

Cur

rent

/N

on-

curr

ent

d

istin

ctio

n

IAS

-1

“Pre

sent

atio

n o

f Fin

anc

ial

Sta

tem

ent

”

As

pe

r P

ara

6

0

of

IAS

-1

“Pre

sent

atio

n o

f Fi

nanc

ial

sta

tem

ent

” A

n e

ntity

sh

all

pre

sent

cur

rent

and

no

n-cu

rre

nt

ass

ets

a

nd

curr

ent

a

nd

non-

curr

ent

lia

bili

ties

as

sep

ara

te

cla

ssifi

catio

n in

its

sta

tem

ent

of

fina

ncia

l po

sitio

n.

As

pe

r D

FIM

circ

ula

r N

o.

11,

da

ted

2

3 D

ece

mb

er

20

09,

Ba

ngla

de

sh

Ba

nk

has

issu

ed

te

mp

late

s fo

r fin

anc

ial

sta

tem

ent

s w

hich

is

a

pp

lica

ble

fo

r a

ll th

e

Fina

ncia

l In

stitu

tions

. In

thi

s te

mp

late

s th

ere

is

no

cu

rre

nt

and

no

n-cu

rre

nt

seg

me

nta

tion

of

ass

ets

a

nd

liab

ilitie

s

Fina

ncia

l S

tate

me

nts

for

the

ye

ar

end

31

.12.2

02

1 a

nd

corr

esp

ond

ing

pe

riod

of

20

20

ha

ve

be

en

pre

pa

red

a

s p

er

gui

de

line

(D

FIM

circ

ula

r N

o.

11,

da

ted

2

3 D

ece

mb

er

20

09

) o

f B

ang

lad

esh

B

ank

. M

ore

ove

r, th

e

liqui

dity

st

ate

me

nt

sho

ws

the

ag

ing

pro

file

of

all

fina

ncia

l a

sse

ts a

nd li

ab

ilitie

s fr

om

whe

re

curr

ent

/no

n-cu

rre

nt

po

rtio

n o

f a

sse

ts

and

lia

bili

ties

can

be

o

bta

ine

d.

262

SL

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

k

9

Fina

ncia

l or

Pres

enta

tion

Eff

ect o

f th

e D

epar

ture

Imp

airm

ent

of

ma

rgin

loa

n (lo

ans

and

re

ceiv

ab

les

IFR

S 9

“F

ina

ncia

l in

stru

me

nts”

Me

asu

rem

ent

a

fter

initi

al

reco

gni

tion

at

am

ort

ize

d

cost

a

nd

reco

rdin

g

of

cha

nge

s th

roug

h p

rofit

and

loss

.

As

pe

r B

ang

lad

esh

S

ecu

ritie

s a

nd

Exc

hang

e

Co

mm

issi

on

(BS

EC

) ci

rcul

ar

No

. S

EC

/C

MR

RC

D/2

00

9-1

93/

196

d

ate

d

28

D

ece

mb

er

20

16,

pro

visi

ons

fo

r th

e

yea

r 2

016

o

n im

pa

irme

nt

of

prin

cip

al

po

rtio

n o

f m

arg

in

loa

n m

ay

be

ke

pt

at

20

%

on

ea

ch

qua

rte

r fo

r the

five

qua

rte

rs s

tart

ing

fr

om

De

cem

be

r 2

016

.

The

re i

s no

suc

h im

pa

ct f

or

this

d

ep

art

ure

.

SL

Nat

ure

of

Dep

artu

reT

itle

of I

FRS

Tre

atm

ent o

f IFR

ST

reat

men

t Ado

pted

as

per

Ban

glad

esh

Ban

k

10

Fina

ncia

l or

Pres

enta

tion

Eff

ect o

f th

e D

epar

ture

Co

mp

lete

se

t o

f fina

ncia

l st

ate

me

nts

IAS

1 “P

rese

nta

tion

of F

ina

ncia

l S

tate

me

nts”

As

pe

r IA

S

1: “P

rese

nta

tion

of

Fina

ncia

l S

tate

me

nts’

’ co

mp

lete

se

t of fi

nanc

ial s

tate

me

nts

are

i)

sta

tem

ent

of fi

nanc

ial p

osi

tion,

ii)

sta

tem

ent

of

pro

fit o

r lo

ss a

nd

oth

er

com

pre

hens

ive

inco

me

, iii

) sta

tem

ent

of c

hang

es

in e

qui

ty,

iv) s

tate

me

nt o

f ca

sh fl

ow

s,

v)

note

s,

com

pris

ing

si

gni

fica

nt

acc

oun

ting

p

olic

ies

and

o

the

r e

xpla

nato

ry in

form

atio

n a

ndvi

) st

ate

me

nt o

f fina

ncia

l po

sitio

n a

t th

e

be

gin

ning

o

f p

rece

din

g

pe

riod

fo

r re

tro

spe

ctiv

e

rest

ate

me

nt.

As

pe

r D

FIM

circ

ula

r N

o.

11,

da

ted

2

3 D

ece

mb

er

20

09,

co

mp

lete

se

t o

f fina

ncia

l sta

tem

ent

s a

re i)

ba

lanc

e s

hee

t, ii)

pro

fit a

nd lo

ss a

cco

unt,

iii) s

tate

me

nt o

f ca

sh fl

ow

s,

iv) s

tate

me

nt o

f cha

nge

s in

eq

uity

, v)

sta

tem

ent

of l

iqui

dity

, vi

) no

tes,

co

mp

risin

g

sig

nific

ant

a

cco

untin

g

po

licie

s a

nd

oth

er

exp

lana

tory

info

rma

tion.

Fina

ncia

l S

tate

me

nts

for

the

ye

ar

end

31

.12.2

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265

2.4 Domicile, legal form, country of incorporation and status of the company Significant accounting policies Same disclosed accounting policies and methods of computation have been followed in these Financial Statements as were applied in the preparation of the financial statements of CVC Finance Limited & Group as at and for the year ended 31 December 2021. 2.5 Components of the financial statements The financial statements comprise of (As per DFIM Circular No. 11, Dated December 23, 2009):

A) Balance Sheet as at 31 December 2021;

B) Profit and Loss Account for the year ended 31 December 2021; C) Statement of Cash Flows for the year ended 31 December 2021; D) Statement of Changes in Equity for the year ended 31 December 2021; E) Liquidity Statement for the year ended 31 December 2021; F) Notes to the Financial Statements for the year ended 31 December 2021.

2.6 Directors’ responsibility statement The Board of Directors’ takes the responsibility for the preparation and presentation of these financial statements. 2.7 Date of authorization This financial statements have been authorized for issue by the Board of Directors at its 77th meeting dated May 21, 2022.

2.8 Comparative information As per paragraph 38 of IAS 1: “Presentation of Financial Statements” the company has disclosed comparative information in respect of the previous period for all amounts reported in the current period’s financial statements. Figures of the previous period have been rearranged whenever considered necessary to ensure comparability with the current year. 2.9) Events after the balance sheet date The Board of Directors has recommended 3.5% cash dividend for the year ended 31 December 2021 in its meeting held on 21 May, 2022.

2.10) Reporting period Financial statements of the company cover one calendar year from 01 January, 2021 to 31 December, 2021 consistently. 2.11) Presentation and functional currency and level of precision The financial statements are presented in Bangladesh Taka (BDT) currency, which is the company’s functional currency. All financial information presented in Taka has been rounded off to the nearest BDT.

266

2.12) Verification of Financial Statements through Documentation Verification System (DVS) As per DFIM Circular Letter No.8 dated on 17 Aug 2021,it has been ensured that latest available audited financials are preserved in the credit file of all our clients. In addition to that as per same circular, we have been granted access in DVS by the Institute of Chartered Accountants of Bangladesh (ICAB) on 26 Jannuary 2022 though we applied to get access in DVS on 02 September 2021.

2.13) Use of estimates and judgments The preparation of financial statements in conformity with International Accounting Standards (IASs) and International Financial Reporting Standards (IFRS) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. It also requires disclosures of contingent assets and liabilities at the date of the financial statements. The most critical estimates and judgments are applied to the following: - Provision for impairment of loans, leases, investments, income tax and deferred tax. - Useful life of depreciable assets The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. However, the estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognized in the period in which the estimates are revised. In accordance with the guidelines as prescribed by IAS 37, “Provisions, Contingent Liabilities and Contingent Assets”, provisions are recognized in the following situations:

PROVISIONS Provisions are liabilities that are uncertain in timing or amount. Provisions are recognized when the company has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. 2.14) Minority interest in subsidiaries A minority interest, which is also referred to as noncontrolling interest (NCI), is ownership of less than 50% of a company’s equity by an investor or another company. For accounting purposes, minority interest is a fractional share of a company amounting to less than 50% of the voting shares. Minority interest shows up as a noncurrent liability on the balance sheet of companies with a majority interest in a company, representing the proportion of its subsidiaries owned by minority shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders. 2.15) Basis of consolidation of operations of subsidiaries The financial statements of the Company and its subsidiaries have been consolidated in accordance with International Financial Reporting Standard (IFRS) 10 “Consolidated Financial Statements”. The consolidation of the financial statements have been made after eliminating all material intercompany balances, income and expenses arising from intercompany transactions. The total profits of the Company and its subsidiaries are shown in the consolidated profit and loss

267

account with the proportion of profit after taxation pertaining to non-controlling shareholders being deducted as ‘Non-controlling Interest’. All assets and liabilities of the Company and of its subsidiaries are shown in the consolidated balance sheet. The interest of non-controlling shareholders of the subsidiary are shown separately in the consolidated balance sheet under the heading ‘Non-controlling Interest’. 2.16) Accounting for term finance & other finances Books of accounts for term finance operation are maintained based on the accrual method of accounting. Outstanding loans, along with the accrued interest thereon, for short-term finance, and unrealized principal for long-term finance, real estate finance, car loans and other finances are accounted for as term finance assets of the Company. Interest earnings are recognized as operational revenue periodical.

2.17) Investment in securities Investment in marketable ordinary shares has been shown at market price on an aggregate portfolio basis. Investment in non-marketable shares has been valued at cost or intrinsic value whichever is lower. Full provision for diminution in value of shares as on closing of the year on an aggregate portfolio basis is made in the financial statements as required by Bangladesh Bank DFIM circular No. 02 dated 31 January 2012. 2.18) Property and equipment i) Recognition and measurement OWN ASSETS Items of own fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the assets to its working condition for its intended use as per International Accounting Standard (IAS) 16, “Property, Plant and Equipment”. ii) Subsequent expenditure on Fixed assets Subsequent expenditure is capitalized only when it increases the future economic benefit from the assets and that cost can be measured reliably. All other expenditures are recognized as an expense as and when they are incurred. iii) Depreciation Depreciation is charged to amortize the cost of assets, over their estimated useful lives, using the straight-line method in accordance with IAS-16: “Property, Plant and Equipment”. Full depreciation is charged on additions irrespective of date when the related assets are put into use and no depreciation is charged from the month of disposal. Asset category wise depreciation rates are as follows:

268

PARTICULARS OF PROPERTY, PLANT & EQUIPMENT RATES

Computer & computer accessories 20.00%

Furniture and fixtures 10.00%

Motor vehicles 20.00%

Office decoration 15.00%

Office equipment 20.00%

Software (Office Operation) 33.33%

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the profit and loss account. Depreciation methods, useful lives and residual values, if any are reviewed at the balance sheet date.

2.19) Intangible assets and amortization of intangible assets Recognition & Measurement Intangible assets comprise the value of computer software. Intangible assets acquired separately are measured on initial recognition at cost and are carried at cost less accumulated amortization and accumulated impairment losses, if any.

Amortization Amortization is calculated using the straight line method to write down the cost of intangible assets to their residual values over their estimated useful lives based on the management best estimates of 03(three) years. Subsequent expenditure Subsequent expenditure on software assets is capitalized only when it increases the future economic benefits in the specifications to which it relates. All other expenditure is expensed as incurred.

2.20) Revenue recognition Revenue is only recognized when it meets the following five steps model framework as per IFRS 15: “Revenue from Contracts with Customers” A) identify the contract (s) with a customers; B) identify the performance obligations in the contract; C) determine the transaction price; D) allocate the transaction price to the performance obligations in the contract; E) recognize revenue when (or as) the entity satisfies a performance obligation.” Interest income from loans and other sources is recognized on an accrual basis of accounting Interest on term loans and short-term finance Interest on term loan and short-term finance are recognized as revenue on an accrual basis and interest income on term loan is not recognized where any portion of interest is in arrear for more than three months.

269

Fee based revenues Fees on services rendered by the company are recognized as and when services are rendered.

Dividend income Dividend is recognized as income when the right to receive income is established.

Profit or loss on sale of securities Profit or loss arising from the sale of securities is accounted for only when the securities are sold/offloaded. 2.21) Interest suspense account Lease income earned, interest on term finance overdue beyond three months period and interest on real estate finance overdue beyond nine months period and interest on short term finance overdue beyond permitted credit term plus ninety days period are not recognized as revenue and are credited to the interest suspense account.

2.22) Accounts receivableAccounts receivable at the balance sheet date is stated at amounts which are considered realizable. Specific allowance is made for receivable considered to be doubtful for recovery. 2.23) Securitization Securitization of various leases/loans result in sale of these assets to Special Purpose Vehicles (‘SPVs’), which, in turn issue securities to investors. Financial assets are partially or wholly derecognized when the control of the contractual rights in the securitized assets is lost. 2.24) Borrowing cost Borrowing cost is capitalized for the period from the dates of respective disbursements to the date of execution of lease. On execution of lease, advance including capitalized borrowing cost is transferred to the gross lease receivables. Borrowing costs are recognized as expense in the year in which they are incurred unless capitalization is permitted under Bangladesh Accounting Standard (IAS) 23: “Borrowing Costs”. 2.25) Cash flow statements Cash flow statement is prepared in accordance with IAS 7: “Cash Flow Statement”, DFIM circular # 11 dated 23 December 2009 and as recommended by the Securities and Exchange Rules 1987. The cash flow statement shows the structure of and changes in cash and cash equivalents during the financial year. Cash and cash equivalents include notes and coins on hand, unrestricted balance held with the Bangladesh Bank and its agent bank including balances with other commercial banks. It is broken down into operating activities, investing activities and financing activities. The direct method is used to show the operating activities. According to IAS 7: “Cash Flow Statements”, cash comprises cash in hand and demand deposits and cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Considering the provisions of IAS 7 and IAS 1, cash in hand, fixed deposits and bank balances have been considered as cash and cash equivalents.

270

2.26) Statement of changes in equity The statement of changes in equity is prepared in accordance with IAS 1: “Presentation of Financial Statements” and DFIM Circular # 11 dated 23 December 2009.

2.27) Liquidity statement The liquidity statement of assets and liabilities as on the reporting date has been prepared in accordance with the guidelines issued by Bangladesh Bank through DFIM circular # 11 dated 23 December 2009 as per following bases:

A) Balance with other banks and financial institutions are on the basis of their maturity term. B) Investments are on the basis of their residual maturity term. C) Loans, advances and leases are on the basis of their repayment/maturity schedule. D) Fixed assets are on the basis of their useful lives. E) Other assets are on the basis of their adjustment terms. F) Borrowings from other banks, financial institutions and agents as per their maturity/ repayment terms. G) Deposits and other accounts are on the basis of their maturity term and behavioral past trends. H) Other liabilities are on the basis of their settlement terms. 2.28) Conversion of foreign currency transactions Foreign currency transactions are translated into Taka at rates prevailing at the respective dates of transactions, while foreign currency monetary assets at the end of the year are reported at the rates prevailing on the balance sheet date. Exchange gains or losses arising out of the said conversions are recognized as income or expense for the year after netting off. 2.29 Branch accounting The Company has one branch, with no overseas branch as on 31 December 2021. Accounts of the branches are maintained at the head office from which these accounts are drawn up. 2.30) Provision for doubtful accounts and future losses Provision has been made at estimated rates on outstanding exposures, based on aging and continuous review of the receivables, as per the Bangladesh Bank Provisioning policy. A general provision has been made by the company to cover unforeseen losses on all leases and loans excluding those for which a specific provision has been kept. The provision is considered adequate to meet any probable future losses. 2.31) Accounting for investment in leases As per IFRS 16: “Leases”, the company recognizes leased assets in the balance sheet and presents them as receivable at an amount equal to the net investment in the lease. Under a finance lease all the risks and rewards incident to legal ownership are transferred by the company, and thus the lease payment receivable is treated as repayment of principal and finance income to reimburse and reward for its investment and services. The recognition of finance income is based on a pattern reflecting a constant periodic rate of return on the net investment outstanding in respect of the finance lease.

271

2.32) Recognition of leased assets Company’s leased assets are stated at the gross lease receivables less the unearned lease income. Lease payments relating to the accounting period are applied against the gross investment in the lease to reduce both the principal and the unearned lease income. 2.33) Recognition of term finances Term finances are stated at the initial investment less accumulated principal amortization calculated under effective interest rate method. Initial investment represents principal finance and capitalization of interest accumulated before starting repayment and amortization rate under effective interest rate method represents the rate that exactly discounts the expected stream of future cash payments through maturity. 2.34) Borrowings from other banks, financial institutions, and agents In conformation to IAS 30: “Disclosures in the Financial Statements of Banks and similar Financial Institutions” and DFIM circular # 11 dated 23 December 2009 issued by Bangladesh Bank, borrowings from other banks, financial institutions and agents are placed into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date.

2.35) Deposits and other accounts The company takes term deposits from banks, financial institutions and general public at various rates against issuance of fixed deposits receipts within the parameters set by Bangladesh Bank through different circulars.The company places the deposits and other accounts into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date considering the IAS 30: “Disclosures in the Financial Statements of Banks and Similar Financial Institutions” and DFIM circular # 11 dated 23 December 2009 issued by Bangladesh Bank. 2.36) Employees’ benefit obligation Defined contribution plan The Company operates a contributory provident fund scheme for its permanent employees. Provident fund is administered by a Board of Trustees and is funded by equal contributions both by the employees and the Company at a predetermined rate. The contributions are invested separately from the Company’s asset.

2.37) Taxation IAS 12: “Income Taxes” and Income Tax ordinance 1984 have been used for the calculation of current tax expense. Provision for income tax represents the sum of the current tax expense.

2.38) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any, in accordance with provisions of Income Tax Ordinance, 1984. It is measured using tax rates enacted or substantively enacted at the reporting date. Applicable tax rate for the Company for the year 2021 is based on Finance Act 2021. For the purpose of these financial statements, management has assumed that the existing tax rates will be applicable for Income year 2021 as well, which are mentioned below:

272

2.32) Recognition of leased assets Company’s leased assets are stated at the gross lease receivables less the unearned lease income. Lease payments relating to the accounting period are applied against the gross investment in the lease to reduce both the principal and the unearned lease income. 2.33) Recognition of term finances Term finances are stated at the initial investment less accumulated principal amortization calculated under effective interest rate method. Initial investment represents principal finance and capitalization of interest accumulated before starting repayment and amortization rate under effective interest rate method represents the rate that exactly discounts the expected stream of future cash payments through maturity. 2.34) Borrowings from other banks, financial institutions, and agents In conformation to IAS 30: “Disclosures in the Financial Statements of Banks and similar Financial Institutions” and DFIM circular # 11 dated 23 December 2009 issued by Bangladesh Bank, borrowings from other banks, financial institutions and agents are placed into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date.

2.35) Deposits and other accounts The company takes term deposits from banks, financial institutions and general public at various rates against issuance of fixed deposits receipts within the parameters set by Bangladesh Bank through different circulars.The company places the deposits and other accounts into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date considering the IAS 30: “Disclosures in the Financial Statements of Banks and Similar Financial Institutions” and DFIM circular # 11 dated 23 December 2009 issued by Bangladesh Bank. 2.36) Employees’ benefit obligation Defined contribution plan The Company operates a contributory provident fund scheme for its permanent employees. Provident fund is administered by a Board of Trustees and is funded by equal contributions both by the employees and the Company at a predetermined rate. The contributions are invested separately from the Company’s asset.

2.37) Taxation IAS 12: “Income Taxes” and Income Tax ordinance 1984 have been used for the calculation of current tax expense. Provision for income tax represents the sum of the current tax expense.

2.38) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any, in accordance with provisions of Income Tax Ordinance, 1984. It is measured using tax rates enacted or substantively enacted at the reporting date. Applicable tax rate for the Company for the year 2021 is based on Finance Act 2021. For the purpose of these financial statements, management has assumed that the existing tax rates will be applicable for Income year 2021 as well, which are mentioned below:

273

2.44) Earnings per share (EPS) The company calculates earnings per share (EPS) in accordance with IAS 33: “Earnings Per Share” shown on the face of the profit and loss account while, the computation of EPS is stated in note-36. Basic earnings This represents earnings for the year attributable to ordinary shareholders. As there was no preference dividend, minority interest or extra ordinary items, the net profit after tax for the year has been considered as fully attributable to the ordinary shareholders. Weighted average number of ordinary shares outstanding during the yearThis represents the number of ordinary shares outstanding at the beginning of the year plus the number of ordinary share issued during the year multiplied by a time-weighting factor. The time-weighting factor is the number of days the specific shares outstanding as a proportion of the total number of days during the year.

2.45) Statutory reserves As per Financial Institutions Regulation 1994, every Non Banking Financial Institution (NBFI) is required to transfer at least 20% of it’s current year’s profit to the fund until such reserve fund equals to it’s paid up share capital and share premium (if any). In conformity with the above requirement, the Company transfers 20% of net profit to statutory reserve before declaration of dividend. 2.46) Contingent liabilities and contingent assets The Company does not recognize contingent liability and contingent asset but discloses the existence of contingent liability in the financial statements. A contingent liability is a probable obligation that arises from past events whose existence will be confirmed by occurrence or non-occurrence of uncertain future events not within the control of the Company or a present obligation that is not recognized because outflow of resources is not likely or obligation cannot be measured reliably. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

2.47) Status of compliance of International Accounting Standards and International Financial Reporting Standards In addition to compliance with local regulatory requirements, in preparing the Financial Statements, CVC applied following IAS and IFRS:

274

Presentation of Financial Statements

Inventories

Statements of Cash Flow

Accounting policies, changes in accounting estimates and

errors

Events after the reporting period

Income taxes

Property, plant and equipment

Employee benefits

Accounting for government grants and disclosure of

government assistance

The Effects of Changes in Foreign Exchange Rates

Borrowing costs

Related party disclosures

Accounting and reporting by retirement benefit plans

Separate financial statements

Investment in associates and joint ventures

Financial reporting in hyperinflationary economics

Interests in joint ventures

Earnings per share

Interim financial reporting

Impairment of assets

Provisions, contingent liabilities and contingent assets

Intangible assets

Investment property

Agriculture

1

2

7

8

10

12

16

19

20

21

23

24

26

27

28

29

31

33

34

36

37

38

40

41

Applied *

N/A

Applied

Applied

Applied

Applied

Applied

Applied

N/A

Applied

Applied

Applied

N/A

N/A

N/A

N/A

N/A

Applied

Applied

Applied

Applied

Applied

N/A

N/A

Name of the IAS IAS No. Status

275

Name of the IAS IAS No. Status

Share based payment

Business combination

Insurance contracts

Non-current assets held for sale and discontinued operation

Exploration for and evaluation of mineral resources

Financial instruments: disclosures

Operating segments

Financial instruments

Consolidated financial statements

Joint arrangement

Disclosure of interest in other entities

Fair value measurement

Regulatory deferral accounts

Revenue from contract with customers

Leases

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

N/A

Applied

N/A

N/A

N/A

Applied *

N/A

Applied

Applied

N/A

N/A

Applied *

N/A

Applied

N/A

N/A= Not Applicable

* As the regulatory requirements differ with the standards, relevant disclosures have been made in accordance with Bangladesh Bank’s requirements.

2.48) BASEL II & its implementation To cope with the international best practices and to make the capital more risks sensitive as well as more shock resilient, guidelines on ‘Basel Accord for Financial Institutions (BAFI)’ have been introduced from January 01, 2011 on test basis by the Bangladesh Bank. At the end of test run period, Basel Accord regime has started and the guidelines namely “Prudential Guidelines on Capital Adequacy and Market Discipline for Financial Institutions (CAMD)” have come fully into force from January 01, 2012 with its subsequent supplements/revisions. Instructions regarding Minimum Capital Requirement (MCR), Adequate Capital, and Disclosure requirement as stated in these guidelines have to be followed by all FIs for the purpose of statutory compliance. As per CAMD guidelines, Financial Institutions should maintain a Capital Adequacy Ratio (CAR) of minimum 10%. In line with CAMD guideline’s requirement, the company is in the process of introducing necessary initiatives to ensure implementation of BASEL II accord. Latest status of Capital Adequacy Ratio (CAR) has been shown in note - 13.4.

276

2.49) Financial risk management CVC always concentrates on delivering high value to its stakeholders through appropriate trade-off between risk and return. A well structured and proactive risk management system is in place within the company to address risks relating to credit, market, liquidity, operations and anti money laundering. In addition to the industry best practices for assessing, identifying and measuring risks, CVC also considers guidelines for managing core risks of financial instructions issued by the country’s central bank, Bangladesh Bank, vide FID Circular No. 10 dated September 18, 2005 for management of risks and, more recently, DFIM Circular No. 03 dated January 24, 2016. Credit Risk To encounter and mitigate credit risk the company employed multilayer approval process, policy for maximum exposure limit of sector or groups, policy for customers’ assets maximum exposure limit, mandatory search for credit report from credit information bureau, looking into payment performance of customer before financing, frequent review of clients, taking collateral, seeking external legal opinion, maintaining neutrality in politics and following arm’s length approach in related party transactions, regular review of market situation and industry exposure etc.Market Risk The Asset Liability Committee (ALCO) of the company regularly meets to assess the changes in interest rate, market conditions, carry out asset liability maturity gap analysis, re-pricing of products and thereby takes effective measures to monitor and control interest rate risk.

Liquidity Risk Liquidity requirements are managed on a day-to-day basis by the treasury division which is responsible for ensuring that sufficient funds are available to meet short term obligations, even in a crisis scenario, and for maintaining a diversity of funding sources. Treasury division maintains liquidity based on historical requirements, anticipated funding requirements from operation, current liquidity position, collections from financing, available sources of funds and risks and returns.

Operational Risk Appropriate internal control measures are in place, at CVC Finance, to address operational risks. CVC Finance has also established internal control & compliance department (ICCD) to address operational risk and to frame and implement policies to encounter such risks. Compliance risk Compliance risk is defined as the current or prospective risk of legal sanction and/or material financial loss that an organization may suffer as a result of its failure to comply with laws, its own regulations, code of conduct, and standards of the best practice as well as from the possibility of incorrect interpretation of laws or regulations. In general, compliance risk management is embedded in the day to day to business processes and practices of the company. Money laundering and terrorist financing risk In The company, money laundering and terrorist financing risk takes two broad dimensions:

A) Business risk i.e. the risk that the company may be used for money laundering or terrorism financing and B) Regulatory risk i.e. the risk that the company fails to meet regulatory obligations under the Money Laundering Prevention Act 2012 and Anti-Terrorism Act 2009 (amended in 2013).

277

To mitigate the risks, The Company, while adhering to various guidelines and circulars issued by the Bangladesh Financial Intelligence Unit (BFIU), put in place a strict compliance program consisting of the following components:

A) Development and implementation of internal policies, procedures and controlsto identify and report instances of money laundering and terrorism financing;B) Creation of structure and sub-structure within the organization, headed by a Central Compliance Unit (CCU), for AML and CFT compliance; C) Appointment of an AML/CFT Compliance Officer, known as the Chief Anti Money Laundering Officer (CAMLCO), to lead the CCU; D) Independent audit function including internal and external audit function to test the programs;E) Ongoing employee training programs.

278

Amount in Taka

31.12.2021 31.12.2020

BDT BDT

3.0 Cash

Cash in hand (note-3.1) 71,816 194,195

Balance with Bangladesh Bank & and its agent banks (note-3.2) 21,583,383 21,013,259

21,655,199 21,207,454

3.1 Cash in hand (including foreign currencies)

In local currency 71,816 194,195

In foreign currency - -

71,816 194,195

3 (a) Consolidated Cash in hand CVC Finance LimitedCAPM Advisory Limited

71,816 194,195

5,260 -

77,076 194,195

3.2 Balance with Bangladesh Bank & and its agent banks

In local currencyIn foreign currency

21,583,383 21,013,259

- -

21,583,383 21,013,259

3.3Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR)a) Cash Reserve Requirement (CRR): 1.5% of

Average Demand and Time Liabilities

Required reserve 21,208,911 19,043,816

Actual reserve held with Bangladesh Bank 22,394,156 19,970,223

Surplus/(Deficit) 1,185,245 926,407

b) Statutory Liquidity Requirement (SLR): 5% of

Average Demand and Time Liabilities:

Required reserve 116,735,922 100,152,933

Actual reserve held 121,890,189 1,211,633,466

Surplus/(Deficit) 5,154,267 1,111,480,533

Cash Reserve Requirement and Statutory Liquidity Reserve have been calculated and maintained in ac-cordance with Financial Institutions Act, 1993 & Financial Institutions Regulations, 1994, FID Circular No. 06, dated November 06, 2003, FID Circular No. 02 dated November 10, 2004 and DFIM Circular Letter No. 01, dated January 12, 2017.

Cash Reserve Requirement (CRR) has been calculated at the rate of 1.5% on Total Term De-posits which is preserved in current account maintained with Bangladesh Bank. ‘Total Term Deposit’ means Term or Fixed Deposit, Security Deposit against Lease/Loan and oth-er Term Deposits, received from individuals and institutions (except Banks & Financial Institutions).

279

Statutory Liquidity Reserve (SLR) has been calculated at the rate of 5.0% on total liabilities, including CRR of 1.5% on Total Term Deposit, as per DFIM circular no. 03 dated June 21, 2020. SLR is maintained in liquid as-sets in the form of cash in hand (notes & coin in BDT), balance with Bangladesh Bank and other Banks and Financial Institutions, unencumbered treasury bill, bond and any other assets approved by Government gazette or by Bangladesh Bank.

4.0 Balance with other banks and financial institutions

In Bangladesh Note: 4.1 1,246,477,787 1,321,215,618

Outside Bangladesh Note: 4.2 - -

1,246,477,787 1,321,215,618

4.1 In Bangladesh

Current accounts (note-4.1.1)Short notice deposit accounts (note-4.1.2)Fixed deposit accounts (note-4.1.3)

2,332 19,342

21,445,205 147,248,657

1,225,030,250 1,173,947,618

1,246,477,787 1,321,215,618

4.2 Outside Bangladesh - -

- -

The company does not maintain any account outside Bangla-desh.

4 (a) Consolidated Balance with other banks and financial institutions

CVC Finance Limited 1,246,477,787 1,321,215,618

CAPM Advisory Limited 2,481,531 -

1,248,959,318 1,321,215,618

4.1.1 Current accounts

BASIC Bank Shyamoli Br. 450 1,140

Modhumoti Bank Ltd. Bangla Motor Br. 11,855

Social Islami Bank Limited Gulshan Branch 536 4,310

Trust Bank Limited Banani Branch 1,347 2,037

2,332 19,342

4.1.2 Short notice deposit accounts

Jamuna Bank Limited Banani Branch 1,884,961 2,232,162

Mercantile Bank Ltd Banani Branch 33,160 209,077

Mercantile Bank Ltd Naogoan Br. 351,241 434,202

Shahjalal Islami Bank Ltd. # 960 Banani Branch 14,943,855 143,649,176

Shahjalal Islami Bank Ltd. #976 Banani Branch 3,183,870 -

Southeast Bank Ltd R. K. Mission Road Br. 71,620 -

Trust Bank Limited Banani Br. 976,498 724,041

21,445,205 147,248,657

4.1.3 Fixed deposit accounts

Jamuna Bank Limited Banani Branch 833,034,874 797,870,582

Trust Bank Limited Gulshan Branch 250,332,540 242,810,023

Social Islami Bank Limited Gulshan Branch 141,662,835 133,267,013

280

1,225,030,250 1,173,947,618

5.0 Money at Call on Short Notice

Financial Institutions - -

Banks - -

- -

6.0 Investments

Government (note-6.01) - -

Others (note-6.02) 159,220,977 13,235,822

159,220,977 13,235,822

6.1 Government

Treasury Bills - -

3 Years T & T Bond - -

5 Years Treasury Bond - -

10 Years Treasury Bond - -

15 Years Treasury Bond - -

20 Years Treasury Bond - -

Prize Bonds - -

- -

6.2 Others (Annexure-B)

Primary Shares 1,620,220 2,821,320

Secondary Shares 7,600,757 10,414,502

Investment in CAPM Advisory Limited 150,000,000 -

159,220,977 13,235,822

6 (a) Consolidated Investments

CVC Finance Limited 9,220,977 13,235,822

CAPM Advisory Limited 34,427,088 -

43,648,065 13,235,822

7.0 Loans, advances and leases

a) Inside Bangladesh

Investment in Lease Finance 437,606,980 425,322,606

Investment in Term Finance 3,232,816,775 3,033,498,994

Investment in SME Finance 221,421,412 268,608,593

Investment in Real Estate 159,116,490 188,235,644

Investment in Work Order Finance 73,495,350 56,512,087

Investment in Staff Loan 4,919,826 5,039,201

4,129,376,833 3,977,217,125

b) Outside Bangladesh - -

Total 4,129,376,833 3,977,217,125

281

Accounts receivable 2,240,092 890,855

Advance against lease finance - -

Other Payables - -

Total 437,606,980 425,322,606

7.1.1.a Principal outstanding

Gross lease receivables 436,593,182.64 433,070,837

Unearned lease income (1,226,295) (8,639,086)

435,366,888 424,431,752

7.1.1.b Advance against lease finance

Local equipment - -

7.1.2 Term finances

Term Loan Finance (note-7.1.2.a) 3,232,816,775 3,033,498,994

SME Finance (note-7.1.2.b) 221,421,412 268,608,593

Work order finance (note-7.1.2.c) 73,495,350 56,512,087

Home loan finance (note-7.1.2.d) 159,116,490 188,235,644

Staff loan (note-7.1.2.e) 4,919,826 5,039,201

Total 3,691,769,853 3,551,894,519

7.1.2.a Term Loan Finance

Principal outstanding 3,074,602,672 2,785,596,910

Accounts receivable 158,214,103 247,902,084

Principal 110,795,016 168,967,503

Interest 47,419,086 78,934,581

Other Payables - -

3,232,816,775 3,033,498,994

7.1.2.b SME Finance

Principal outstanding 174,804,351 263,558,718

Accounts receivable 46,617,061 5,049,875

Principal 33,115,976 3,693,902

Interest 13,501,085 1,355,973

Other Payables - -

221,421,412 268,608,593

7.1.2.c Work order finance

Principal outstanding 55,095,017 45,498,568

Accounts receivable 18,400,333 11,013,519

Principal - -

Interest 18,400,333 11,013,519

Other Payables - -

73,495,350 56,512,087

7.1.1 Investment in Lease Finance

Principal outstanding 435,366,888 424,431,752

282

7.1.2.d Home loan finance

Principal outstanding 152,860,523 184,784,105

Accounts receivable 6,255,967 3,451,539

Principal 2,049,393 697,319

Interest 4,206,574 2,754,220

Other Payables - -

159,116,490 188,235,644

7.1.2.e Staff loan

Principal outstanding 4,919,826 5,039,201

Accounts receivable - -

Principal - -

Interest - -

Other Payables - -

4,919,826 5,039,201

7.2 Classification of loans, advances and Lease Finance

Unclassified

Standard - SME 112,070,566 201,666,947

Standard - Other than SME 3,509,263,621 3,556,715,350

Special Mentioned Account (SMA) 28,529,190 33,433,101

3,649,863,376 3,791,815,397

Classified

Sub-standard 111,970,041 23,989,838

Doubtful 298,734,904 161,411,889

Bad & Loss 68,808,512 -

479,513,457 185,401,727

Total 4,129,376,833 3,977,217,125

% of Classification Loan/Lease 11.61% 4.66%

7.3 Base for Provision for loans, advances and Lease Finance

Unclassified

Standard - SME 112,070,566 201,666,947

Standard - Other than SME 3,509,263,643 3,556,715,347

Special Mentioned Account (SMA) 26,918,356 30,966,949

3,648,252,564 3,789,349,243

Classified

Sub-standard 94,360,638 11,390,043

Doubtful 187,112,415 81,922,355

Bad & Loss 41,237,457 -

322,710,509 93,312,398

Base for provision for loans, advances and Lease Finance 3,970,963,073 3,882,661,641

283

7.4 Provision for loans, advances and Lease Finance

Status Rate (%)

Unclassified

Standard - SME 0.25 280,176 504,167.37

Standard - Other than SME 1 35,092,636 35,567,153

Special Mentioned Account (SMA) 5 1,345,918 1,548,347

36,718,730 37,619,668

Classified

Sub-standard 20 18,872,128 45,033,009

Doubtful 50 93,556,208 40,961,178

Bad & Loss 100 41,237,457 -

153,665,793 85,994,186

Required provision for loans, advances and Lease Finance 190,384,523 123,613,855

Total provision maintained (note-12.2) 190,384,523 123,613,855

Exess/(short) provision - -

7 (a) Consolidated Loans, Advances & Leases

CVC Finance Limited 4,129,376,833 3,977,217,125

CAPM Advisory Limited - -

4,129,376,833 3,977,217,125

8.0 Fixed assets including premises, furniture and fixtures

Opening balance 55,018,433 50,230,982

Addition during the year 1,557,834 4,787,451

Disposal during the year - -

Closing balance at cost 56,576,267 55,018,433

Depreciation

Opening balance 27,160,784 18,158,685

Addition during the year 8,624,257 9,002,099

Adjustment on disposal during the year - -

Accumulated Depreciation 35,785,041 27,160,784

Carrying value 20,791,226 27,857,649

Intangible Assets

At cost less accumulated depreciation (Annexure-B)

284

Addition during the year 10,743,836 -

Disposal during the year - -

Closing balance at cost 10,853,836 110,000

Depreciation

Opening balance 105,168 68,404

Addition during the year 84,770 36,764

Adjustment on disposal during the year - -

Accumulated depreciation 189,938 105,168

Carrying value 10,663,898 4,832

Total Fixed Assets 31,455,124 27,862,481

8 (a) Consolidated Fixed assets including premises, furniture and fixtures

CVC Finance Limited 31,455,124 27,862,481

CAPM Advisory Limited 3,636,397

Intangible Asset (Goodwill) 22,974,236

Total Fixed Assets (Consolidated) 58,065,757 27,862,481

9.0 Other assets

Inside Bangladesh

Income generating :

Interest receivable on FDR 45,570,515 43,599,895

Loan/Lease Interest Receivable 17,577,698 -

Interest Receivable-COVID-19 CMSME Stimulus Package 652,707 112,499.00

Legal Bill Receivable 4,634,969 2,576,750

68,435,889 46,289,144

Non income genarating :

Advance deposit and prepaid expenses (note 9.01) 30,037,054 13,287,780

Tax deduction at sources 34,887,094 29,074,782

Advace payment of income tax 37,284,227 24,544,338

102,208,375 66,906,901

Total 170,644,264 113,196,045

9 (a) Consolidated Other Assets

CVC Finance Limited 170,644,264 113,196,045

CAPM Advisory Limited 39,238,336 -

209,882,600 113,196,045

9.1 Advance deposit and prepaid expenses

Security money for office space - Green Grandeur Tower 5,572,380 5,572,380

Security money for office space - Sales Office 200,000 200,000

Advance for investment in share 23,080,674 3,512,975

Other advances 1,184,000 27,425

Cost

Opening balance 110,000 110,000

285

Advance against software - 3,975,000

30,037,054 13,287,780

10.0 Borrowings from other banks, financial institutions and agents

In Bangladesh (note-10.1) 2,140,690,800 2,175,226,559

Outside Bangladesh - -

2,140,690,800 2,175,226,559

10.1 In Bangladesh

a. Long term liabilities

Bank Overdraft

Jamuna Bank Ltd. 822,201,579 778,530,910

Modhumoti Bank Ltd. 49,642,597 51,168,501

Social Islami Bank Ltd. 134,176,978 132,753,336

Trust Bank Ltd. 236,357,097 228,369,268

1,242,378,251 1,190,822,015

Credit Line

BASIC Bank Ltd. 129,112,457 135,344,379

Jamuna Bank Ltd. 122,144,123 119,774,010

Midland Bank Ltd. 96,062,021 96,092,282

Modhumoti Bank Ltd. 401,125,466 404,133,427

748,444,067 755,344,098

Total Long Term Liabilities 1,990,822,318 1,946,166,112

b. Short Term Loan

Call Loan

Sonali Bank Ltd 82,000,000 87,100,000

Modhumoti Bank Ltd 10,000,000 19,100,000

92,000,000 106,200,000

Treasury Line

National Finance Ltd. - 8,000,000

Modhumoti Bank Limited 20,000,000 45,000,000

20,000,000 53,000,000

Total Short Term Loan 112,000,000 159,200,000

c. Refinance Scheme

Bangladesh Bank 37,868,482 69,860,447

37,868,482 69,860,447

10 (a) Consolidated Borrowings from other banks, financial institutions and agentsCVC Finance Limited 2,140,690,800 2,175,226,559

CAPM Advisory Limited - -

2,140,690,800 2,175,226,559

286

11.0 Deposits and other accounts

Savings deposits 751,500 761,000

Term deposits (note-11.1) 1,672,983,511 1,428,975,852

Other deposit (note-11.2) 96,816,062 97,177,274

1,770,551,073 1,526,914,126

11.1 Term deposits

Deposit from banks and financial institutions 240,000,000 195,500,000

Deposit from other than banks and financial institutions 1,432,983,511 1,233,475,852

1,672,983,511 1,428,975,852

11 (a) Consolidated Term Deposits

CVC Finance Limited 1,672,983,511 - CAPM Advisory Limited (FDR in CVC Fi-nance)

(160,000,000) -

1,512,983,511 -

11.2 Other deposits

Non interest bearing security deposits

Security deposit - SD 25,158,652 27,501,768

Security deposit-Agromach and farming services 200,000 200,000

25,358,652 27,701,768

Interest bearing security deposits

Security deposit - SDIB 71,457,410 69,475,506

71,457,410 69,475,506

Total other deposits 96,816,062 97,177,274

12.0 Other liabilities

Payables & accrued expenses (12.01) 110,498,401 179,626,479

Liability under finance lease - 419,151

Vechile Loan (DMD’s Car)-SCB 1,483,098 1,818,777

UNCDF Grant 303,458 -

Interest suspense 118,557,293 113,659,862

Provision for lease finance, loans and advances (12.02) 190,384,523 123,613,855

Special Provision @2% 15,013,107 -

Provision for diminution in value of investment (12.03) 8,660 224,560

Porovision for Other Assets (Legal fee Receivable) 2,317,485 -

Dividend Payable 3,696,000 -

Provision for income tax (12.04) 118,867,837 90,453,405

Contribution to PF (12.05) - -

561,129,861 509,816,089

12 (a) Consolidated Other Liabilities

CVC Finance Limited 561,129,861 509,816,089

CAPM Advisory Limited 26,308,684 -

587,438,545 509,816,089

287

12.1 Payables & accrued expenses

a. Interest Payables

Interest payable on deposits from banks and FI’S 10,255,263 7,856,921

Interest payable on deposits from other than banks and FI’S 30,284,013 77,399,802

Monthly saving scheme - interest payable 52,976 66,831

Interest payables on security deposits 15,506,378 12,031,972

LTL Credit Line Interest Payable 43,306,020 42,396,335

Interest payables on refinance scheme 977,317 1,083,518

100,381,967 140,835,380

b. Other Payables

Payables for TAX /VAT deducted at source 3,456,342 1,737,430

Sundry Receipt (CVCFL Client) 816,702 34,516,969

Liability for expenses 4,825,921 2,460,591

Others 1,017,469 76,110

10,116,434 38,791,100

Total (a+b) 110,498,401 179,626,479

12.2 Provision for Lease Finance, loans and advances

Unclassified

Standard - SME 280,176 504,167

Standard - Other than SME 35,092,636 35,567,153

Special Mentioned Account (SMA) 1,345,918 1,548,347

36,718,730 37,619,668

Classified

Sub-standard 18,872,128 45,033,009

Doubtful 93,556,208 40,961,178

Bad & Loss 41,237,457 -

153,665,793 85,994,186

Provision for loans, advances and Lease Finance 190,384,523 123,613,855

12.3 Provision for Diminution in Value of Investment

Opening balance 224,560 174,432

Add: Provision made during the year - 50,128

Less: Adjustment during the year (note-32.1) (215,901) -

Closing balance 8,660 224,560

12.4 Provision for income tax

The company calculated its tax liability considering the BAS 12: “Income Taxes”. Details calcula-tion of tax liability as at 31 December, 2021 is as follows:

Opening Balance 90,453,405 91,491,693

Add: Provision made during the year (note-33.0) 28,414,432 28,549,403

Add: Excess provision of income tax for the FY 31.12.2017 (note-33.0)

- 13,119,034

Less: Settlement of previous year’s tax liability - (42,706,725)

288

Closing Balance 118,867,837 90,453,405

12.5 Contribution to PF

Opening balance - -

Add: Provision made during the year 2,302,956 2,519,783

Less: Transfer to Provident fund 2,302,956 2,519,783

Closing balance - -

13.0 Share Capital

13.1 Authorized Capital

500,000,000 ordinary shares of Tk.10 each 5,000,000,000 5,000,000,000

13.2 Issued, Subscribed and Fully Paid up capital

Opening Balance: Paid up Capital of 105,000,000 No. of Shares Tk.10 each

1,155,000,000 1,155,000,000

Add: 3% of Stock Dividend on Outstanding No. of Shares 115,500,000

34,650,000 -

1,189,650,000 1,155,000,000

13.3 Capital Adequacy

As per ther section 4(GHA) of the Financial Institution Rule, 1994 and subsequeently updated vide DFIM circular no. 5 dated 24 July 2011 the minimum paid-up capita of the Financial instituion(FI) shall be BDT 100 crore; provided that the sum of paid-up-capital and reserve shall not be less then the min-imum capital required under the risk-based assets of the company, criteria determined by the Bangla-desh bank.

Tier – I (Core Capital)

Paid up Capital 1,189,650,000 1,155,000,000

Share Premium account - -

Statutory Reserve 52,763,557 43,247,421

Retained Earnings 44,044,893 63,730,349

Other reserve - -

1,286,458,450 1,261,977,770

Tier –II (Supplementary Capital)

General Provision 51,731,837 66,590,017

51,731,837 66,590,017

A.Total Capital 1,338,190,287 1,328,567,787

B. Required Capital 1,000,000,000 1,000,000,000

C. Surplus/ (Deficiency) (A - B) 338,190,287 328,567,787

13.4 Minimum Capital Requirement (MCR) under Basel Accord for Financial Institutions (BAFI)

Total Eligible Capital 1,338,190,287 1,328,567,787

Tier - 1 Capital 1,286,458,450 1,261,977,770

Tier - 2 Capital 51,731,837 66,590,017

289

Total Risk Weighted Assets (RWA) 5,533,155,934 5,327,201,396

On Balance Sheet 4,392,368,723 4,411,544,083

Market Risk 21,935,690 38,025,510

Operational Risk 1,118,851,521 877,631,803

Capital Adequacy Ratio (CAR) 24.18 24.94

Core Capital to RWA 23.25 23.69

Supplementary Capital to RWA 0.93 1.25

Minimum Capital Requirment (MCR) 553,315,593.41 532,720,139.62

Surplus/ (Defficiency) 4,979,840,341 4,794,481,257

14.0 Statutory reserve

In compliance with the clause no 6 of Financial Institutions Regulations, 1994, Financial Institution is re-quired to transfer at least 20% of it’s profit after tax and before appropriation of dividend iu a particular year, if the financial institution’s sum of Share Premium Account (if any) and Statutory Reserves is less than the paid up capital of that financial institution. Accordingly, 20% of current year’s profit after tax has been transferred to Statutory Reserves Account.

Opening Balance 43,247,421 37,306,406

Add: Transferred during the year 9,516,136 5,941,015

Closing Balance 52,763,557 43,247,421

14 (a) Consolidated Statutory reserve

CVC Finance Limited 52,763,557 43,247,421

CAPM Advisory Limited - -

52,763,557 43,247,421

15.0 Revaluation Reserve

Opening Balance - -

Addition During the Year 57,750,000 -

Issued bonus During the Year (57,750,000) -

Closing Balance - -

16.0 Retained Earning / Surplus

Opening Balance 63,730,349 39,966,291

Current year profit 47,580,680 29,705,073

Less : Statutory Reserve (9,516,136) (5,941,015)

Less: Dividend Equalization Fund (Issue of Bonus Share) (57,750,000) -

44,044,893 63,730,349

290

16 (a) Consolidated Retained Earnings

CVC Finance Limited 44,044,893 63,730,349

CAPM Advisory Limited 1,062,194 -

45,107,087 63,730,349

Amount in Taka

31.12.2021 31.12.2020

BDT BDT

17.0 Income statement

Income

Interest income (note-18.0) 523,137,770 502,762,693

Investment income (18.1) 16,029,583 1,665,304

Commission, exchange and brokerage (note-20.0) 3,073,202 24,030,961

Other operating income (note-21.0) 59,368,284 103,473,349

601,608,839 631,932,306

Expenses

Interest expenses on deposits, borrowings, etc. (note-19.0) 319,719,698 436,296,326

Administrative expenses (note-22.0) 96,907,683 91,257,635

Depreciation on company’s fixed assets (note-30.0) 8,709,027 9,038,863

Other operating expenses (note-31.0) 16,391,960 7,853,836

441,728,367 544,446,661

159,880,472 87,485,646

18.0 Interest income

Interest Income-Lease Finance 73,092,154 51,255,431

Interest Income-Term Finance & Work Order Finance 401,898,671 403,231,187

Interest Income-SME Finance 28,989,764 26,306,024

Interest Income-Real Estate 18,670,469 21,436,706

Interest Income-Staff Loan-Vehicle 486,712 533,344

523,137,770 502,762,693

18.1 Investment income

Gain From Investment in Shares 15,666,321 1,633,835

Dividend Income 363,262 31,469

16,029,583 1,665,304

19.0 Interest expenses on deposits, borrowings, etc.

a) Interest expenses on Term Deposit

291

Interest on term deposits,bank and financial institutions 20,163,401 27,448,568 Interest on term deposits,other than bank and financial institutions

113,584,093 151,554,318

Interest on Monthly Saving Scheme 42,137 40,501

Interest Expense on Insured Deposit Pension Scheme 7,073 -

Deposit Insurance Premium 2,250 -

Deposit mobilization expenses 2,488,470 160,501

136,287,424 179,203,888

b) Interest expenses on security deposits

Interest on security deposits 5,082,146 4,971,309

5,082,146 4,971,309

c) Interest expenses on credit line, Bank overdraft

Finance charge for obligation under finance lease 87,549 164,345

Interest Expense - Vechile Loan (DMD’s Car)-SCB 150,069 71,172

Financial expenses 1,424,322 5,362,646

Interest expenses on call loan 5,818,983 5,274,777

Interest expenses on bank overdraft 87,773,152 103,792,337

Interest expenses on credit line 76,842,838 118,833,349

Interest expenses on treasury line 3,380,261 13,012,806

Interest expenses on refinance scheme 2,792,155 5,609,698

Vendor Commission- Auto Loan 80,800 -

178,350,128 252,121,129

Total (a+b+c) 319,719,698 436,296,326

20.0 Commission, exchange and brokerage

Processing fee 463,451 244,180

Early Settlement Charge 1,076,835 1,107,465

Penal Interest 573,233 22,598,462

Cheque Clearing Charge - 104

Documentation Fee 64,732 46,700

Legal & Vetting Fee 730,604 1,532

Insurance Premium 66,947 1,493

Stamp Fee 97,400 31,025

3,073,202 24,030,961

21.0 Other operating income

Interest Income on Fixed Deposit (FDR) 59,217,993 103,389,009

Interest Income on Short Notice Deposit (SND) 150,291 84,340

59,368,284 103,473,349

21 (a) Consolidated Other operating income

CVC Finance Limited 59,368,284 103,473,349

CAPM Advisory Limited 11,139,322 -

70,507,606 103,473,349

292

22.0 Administrative expenses

Salary and allowances (note-23) 68,434,808 64,316,384

Rent, taxes, insurance, electricity, etc. (note-24) 17,456,189 17,482,242

Postage, stamp, telecommunication, etc. (note-25) 1,260,636 629,510

Stationery, printing, advertisement, etc. (note-26) 1,223,550 1,057,499

Managing Director’s salary and allowances (note-27) 6,840,000 6,705,000

Directors’ fees (note-28) 1,520,000 952,000

Auditors’ fees (note-29) 172,500 115,000

96,907,683 91,257,635

23.0 Salary and allowances

Salary and other allowances - Regular Employees 54,754,080 51,643,990

Festival Bonus - Regular Employees 4,367,438 3,349,476

FI’s Contribution to Employees Provident Fund 2,302,956 2,519,783

Profit Bonus 2,307,830 -

Festival Bonus- Liability Sales 236,000 285,588

Festival Bonus - DFS 42,000 -

Salary and other allowances - DFS 366,394 168,000

Salary and other allowances - Liability Sales 3,458,110 5,641,147

Salary & Allowances - Agent Office Naogaon 600,000 594,400

Salary & Allowances - Enterprise Café Mymenshingh - 114,000

68,434,808 64,316,384

24.0 Rent, taxes, insurance, electricity, etc.

Office Rent - HO & PB 13,913,870 13,969,953

Office Rent - Agent Office Naogaon - 69,000

Office Rent - Liability Sales 645,144 702,072

Office Rent - Enterprise Café - Mymensingh - 10,000

VAT Expenses 179,000 40,800

Electricity - Liability Sales Office 97,158 68,330

Electricity, gas and water - HO & PB 1,283,933 1,269,922

Service charges - HO & PB 1,215,792 1,215,792

Service Charges - Liability Sales Office 121,292 113,373

Utility Bill - Agent Office Naogaon - 23,000

17,456,189 17,482,242

25.0 Postage, stamp, telecommunication, etc.

Courier Bill 38,388 24,402

Newspaper, Books & Preiodicals 15,443 10,491

Non Judicial/Special Adhesive Stamp 153,185 130,425

Internet Bill - HO & PB 323,139 296,428

Internet Bill - Liability Sales Office 80,200 27,150

Internet Bill - Agent Office Naogaon - 6,600

Telephone Bill - Agent Office Naogaon - 13,800

Mobile Bill - Enterprise Café - Mymensingh - 1,500

293

Telephone Bill - HO & PB 650,281 118,714

1,260,636 629,510

26.0 Stationery, printing, advertisement, etc.

Stationery - HO & PB 282,736 151,327

Printing - HO & PB 715,874 424,442

Publicity and advertisement 224,940 481,730

1,223,550 1,057,499

27.0 Managing Director’s salary and allowances

Gross Salary 5,292,000 5,292,000

Mobile Bill 48,000 48,000

Leave Fare Assistance 900,000 900,000

Festival Bonus 600,000 465,000

6,840,000 6,705,000

As per the paragraph 16 of IAS 24: “Related party Disclosures “regarding key management person-nel, Managing Director is the key management personnel. His benefit is given below:

(a) Short term employee benefits: 6,840,000 6,705,000

(b) Post-employment benefits; - -

(c) Other long-term benefits - -

(d) Termination benefits; and - -

(e) Share-based payment - -

Total 6,840,000 6,705,000

28.0 Directors’ fees

Board of Directors 936,000 624,000

Board Audit Committee 136,000 120,000

Executive Committee 448,000 208,000

1,520,000 952,000

In compliance with Bangladesh Bank’s circular No. DFIM Circular No. 13, dated 30 November 2015, BDT 8,000 has been paid to directors of the board excluding the Managing Director for attending per meeting of the board and its sub-committees of CVC Finance Limited.

29.0 Auditors’ fees

Auditors’ fees including VAT @ 15.00% 172,500 115,000

172,500 115,000

30.0 Depreciation and repairs of company’s assets

Depreciation on company’s fixed assets (Annexure-A) 8,709,027 9,038,863

8,709,027 9,038,863

31.0 Other operating expenses

Office maintenance - HO & PB 1,585,095 671,297

Office Maintenance - Liability Sales Office 1,800 800

Traveling and conveyance 1,287,334 504,443

Traveling and conveyance - Agent Office Naogaon - 1,370

294

Travelling & Conveyance-Enterprise Cafe Mymensingh - 3,000

Motor Vehicle Maintenance-Employees Car 1,319,176 1,208,141

Motor Vehicle fuel - MD’s Car 360,000 360,000

Motor Vehicle Insurance expenses-MD’s Car 63,871 55,971

Motor Vehicle other expenses-MD’s Car 1,193,263 192,422

Motor Vehicle other expenses-DMD’s Car 8,155 -

Motor Vehicle Fuel - Chairman’s Car 84,338 75,724

Motor Vehicle Insurance expenses-Chairman’s Car 61,610 75,121

Motor Vehicle Maintenance-Chairman’s Car 34,544 32,990

Motor Vehicle others-Chairman’s Car 88,610 47,347

Motor Vehicle Insurance expenses-DMD’s Car 66,495 67,889

Motor Vehicle Fuel - Agent Office - 23,000

Entertainment Meeting 289,378 148,805

Entertainment and public relation 1,152,665 701,630

Entertainment - DFS 30,474 -

Entertainment- Liability Sales Office 28,929 29,259

Entertainment -Agent Office Naogaon 11,000 7,365

Professional fees 583,055 117,550

AGM Expenses 415,987 351,743

Security A/C Charges 217,808 111,069

CIB service charges 19,075 24,279

Computer Related Accessories 407,754 327,896

Fees & Subscription 485,165 253,169

Legal Expense 1,500 55,000

Repair & Maintenance - HO & PB 429,697 324,654

Branding Expenses 3,723,867 -

Promotional Expenses - 98,529

Crockeries items 4,940 14,890

CSR Expenses 800,200 999,000

Bank Charge 982,886 836,590

Training, Seminar, Conference Expense 653,290 132,893

16,391,960 7,853,836

31 (a) Consolidated Operating Expenses

CVC Finance Limited 16,391,960 7,853,836

CAPM Advisory Limited - 730,820

- 8,584,656

32.0 Provision for loans, advances and leasesGeneral provision on unclassified loans, advances and leases

(900,938) (17,340,143)

Specific provision on classified loans, advances and leas-es

67,671,607 33,402,150

Special Provision @2% 15,013,107 -

81,783,775 16,062,007

295

33.0 Provision for Diminution in Value of Investment

Provision for Share Investment (215,901) 50,128

(215,901) 50,128

34.0 Porovision on Other Assets

Provision for Legal fee Receivable 2,317,485 -

2,317,485 -

35.0 Provision for income tax

This represents amount provided for income tax on profit before tax for the year ended 31 December, 2021. The amount has arrived as follows:

Amount provided on current year’s profit 28,414,432 28,549,403

Add: Expense charged for the FY 31.12.2017 - 13,119,034

Less: Excess provision of income tax - -

Amount provided for current tax 28,414,432 41,668,437

Amount provided for deferred tax - -

28,414,432 41,668,437

Excess provision of income tax represents amount provided for the FY 31.12.2017 as tax expenses in the financial statements which is excess of tax settlement by the tax authority. For this excess amount an accounting effect has been given in accordance with para 36 of IAS-8: “Accounting Policies, Changes in Accounting Estimates and Errors”.

35 (a) Consolidated Provision for income tax

CVC Finance Limited 28,414,432 41,668,437

CAPM Advisory Limited 821,216 199,894

29,235,648 41,868,331

36.0 Diluted Earning per share (DEPS)

Earning Per Share as shown in the face of the Profit and Loss Account is calculated in accordance with IAS 33: “Earning Per Share”.

Basic Earning Per Share has been calculated as follows:

Net profit after tax for the year (A) 47,580,680 29,705,073

Weighted average number of ordinary shares at 31 De-cember, 2021 (B)

118,965,000 118,965,000

Earning Per Share (A/B) 0.40 0.25

37.0 Net Asset Value (NAV) Per Share

Net Asset (total assets less total liabilities) (A) 1,286,458,450 1,261,977,770

Total number of ordinery shares outstanding (B) 118,965,000 115,500,000

Net Asset Value (NAV) Per Share (A/B) 10.81 10.93

38.0 Net Operating Cash Flow Per Share (NOCFPS)

Net Operating Cash Flows (A) 193,441,530 (45,729,789)

Total number of ordinary shares outstanding (B) 118,965,000 115,500,000

Net Operating Cash Flow Per Share (A/B) 1.63 (0.40)

39.0 Related Party Disclosure

296

The related party transactions during the year is shown in Annexure E

40.0 Foreign remittance

There were no foreign remittance during the year 2021.

41.0 Number of employeesThe Company paid an aggregate amount more than BDT 36,000 per annum to 88 employees, who were in employment for full year or part of the year 2021.

42.0 Contingent Liabilities

There are no contingent liabilities at the balance sheet date.

Md. Shakhawat Hossain Shah Wareef Hossain Syed Minhaj Ahmed Mahmud Hussain

Head of Accounts DMD & Company Secretary Managing Director Chairman

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301

HODA VASI CHOWDHURY & COCHARTERED ACCOUNTANTS

CAPM ADVISORY LIMITEDREPORT ON THE AUDIT OF

THE FINANCIAL STATEMENTS

Independent Auditor’s Report to the

OpinionWe have audited the financial statements of CAPM Advisory Limited (the “Company”) which comprise the statement of financial position as at 31 December 2021 and the statement of profit or loss account and other comprehensive income, statement of changes in equity and statement of cash flow for the period from 01 July 2021 to 31 December 2021, and notes to the financial statements including a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying financial statements present fairly, in all material respect, of the financial position of the Company as at 31 December 2021, and of its financial performance and its cash flows for the period from 01 July 2021 to 31 December 2021 in accordance with International Financial Reporting Standards (IFRSs) as explained in note 2 and other applicable laws and regulations.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of MatterWe draw attention to Note-2.1 of the financial statements, which describe the basis of accounting. The financial statements are prepared to assist the Company to meet their internal requirements. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter.

Other MattersThe financial statements of the Company for the year ended 30 June 2021, were audited by another auditor who expressed a qualified opinion on those statements on 29 September 2021.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal ControlsManagement is responsible for the preparation and fair presentation of financial statements of the Company in accordance with IFRSs as explained in note 2, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

302

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

303

Report on other Legal and Regulatory RequirementsIn accordance with the Companies Act, 1994 and the Securities and Exchange Rules 1987, we also report that:

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

ii) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;

iii) the statement of financial position and statement of profit or loss and other comprehensive income together with the annexed notes dealt with by the report are in agreement with the books of account and returns; and

Dhaka, 05 February 2022 Hoda Vasi Chowdhury & CoChartered Accountants

Sd/-

304

CAPM Advisory LimitedSTATEMENT OF FINANCIAL POSITION

As at 31 December 2021

ParticularsAMOUNT IN TAKA

31 December 2021 30 June 2021

AssetsNON-CURRENT ASSETS 3636397.03 1829583Property, plant and equipment 1,351,277 1,829,581

Right of use of assets 2,285,118 -

Intangible assets 2 2

CURRENT ASSETS 236152216 213026203Investments 34,427,088 11,205,371

Advances, deposits and prepayments 10,609,639 10,943,484

Investment-FDR (CVC Finance Ltd.) 160,000,000 160,000,000

Interest receivable-FDR 712,500 672,500

Advance income tax 3,393,367 2,785,372

Margin loan 24,522,830 9,703,495

Cash and cash equivalents 2,486,791 16,837,745

Receivable from client portfolio - 878,236

Receivable from panel & others - -

TOTAL ASSETS 239,788,613 214,855,786

SHAREHOLDERS’ EQUITY AND LIABILITIESSHAREHOLDERS’ EQUITY 213,479,929 212,062,808 Ordinary share capital 250,000,000 250,000,000

Retained earnings (37,697,997) (39,248,539)

Fair valuation surplus/(deficit) of investment 1,177,926 1,311,347

NON-CURRENT LIABILITIES 2,033,560 - Lease liability 1,824,828 -

Deferred tax liability 208,732

CURRENT LIABILITIES 24,275,124 2,792,977 Trade and other liabilities 20,397,778 654,887

Provision for expenses 456,951 839,161

Provision for income tax 1,906,925 1,298,930

Payable to client 1,513,470 -

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 239,788,613 214,855,786

The annexed notes form an integral part of these financial statements.

Managing Director & CEO Director

See the annexed report of even date

Dhaka, 05 March 2022 Hoda Vasi Chowdhury & Co

Chartered Accountants

Sd/-Sd/-

Sd/-

305

CAPM Advisory LimitedSTATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the period from 01 July 2021 to 31 December 2021

ParticularsAMOUNT IN TAKA

01 July 2021 to 31 December 2021

01 July 2020 to 31 December 2020

Un-audited

Operating revenue 13,784,686 8,039,353

Operating expenses 11,182,537 8,129,610

Office & administrative expenses 9,530,915 7,690,777 Financial expenses 867,722 115,568 Marketing expenses 783,899 323,264

Operating income 2,602,150 (90,256)

Non-operating income - -

Profit before tax 2,602,150 (90,256)

Current tax expenses 807,890 199,894 Deferred tax expenses 208,732 - Net profit after tax 1,585,528 (290,150)Other comprehensive incomeFair valuation surplus/(deficit) of investment (133,421) 6,552,875

TOTAL COMPREHENSIVE INCOME 1,452,107 6,262,724

The annexed notes form an integral part of these financial statements.

Managing Director & CEO Director

See the annexed report of even date

Dhaka, 05 March 2022 Hoda Vasi Chowdhury & Co

Chartered Accountants

Sd/-Sd/-

Sd/-

306

CVC FINANCEIN MEDIA

307

308

309

310

311

CVC FINANCE AT A GLANCE

312

CVC FINANCE AT A GLANCE

313

CVC FINANCE AT A GLANCE

314

CVC FINANCE AT A GLANCE

315

NOTICE OF THE7TH ANNUAL GENERAL MEETING

Notice is hereby given that the 7th Annual General Meeting of the Shareholders of CVC Finance Limited will be held on Tuesday, the 14th day of June 2022 at 07.00 P.M at Pan Asia, Level -2, Gulshan Club, Dhaka to transact the following businesses:

Agendum Agendum #

AGM2022-07-01

To receive and adopt the Directors Report and the Audited Financial

Statements for the year ended December 31, 2021 together with

Auditors' Report thereon.

AGM2022-07-02 To declare dividend for the year ended December 31, 2021

AGM2022-07-03To appoint the statutory Auditor for the year 2022 and to fix their

remuneration

AGM2022-07-04

Election of Directors in place of those who will retire by rotation

in accordance with the provision of Articles of Association of the

Company

AGM2022-07-05 To transact any other business (if any) with the permission of the

chair.

By the order of the Board of Directors

Mr. Shah Wareef Hossain Company Secretary

May 23, 2022

316

PROXY FORM

317

CORPORATE PROFILE

Name of the Company CVC Finance Limited

Legal Form Public Limited Company

Date of Incorporation 31-March-15

Company Registration No. C-122113/15

Bangladesh Bank License No. DFIM(L)/36 dated. 16-Jul-15

Tax payer Identification No. 270708931952

BIN No. 002345553-0101

Paid Up Capital BDT 1,189.65 Million

Chairman Mr. Mahmud Hussain

Managing Director Mr. Syed Minhaj Ahmed

Company Secretary Mr. Shah Wareef Hossain

Head OfficeRahman’s Regnum Centre, Level – 13, 191/1, Tejgaon Gulshan

Link Road, Tejgaon I/A, Dhaka – 1208.

Auditor Hoda Vasi Chowdhury & Co., Chartered Accountants

Credit Rating A+ (Long Term), ST-2 (Short Term)

Credit Rating Agency Alpha Credit Rating Limited

Bankers

Sonali Bank Ltd, Agrani Bank Ltd, BASIC Bank Ltd, Jamuna

Bank Ltd, Shahjalal Islami Bank Ltd, Trust Bank Ltd, Modhumoti

Bank Ltd, Social Islami Bank Ltd, Merchantile Bank Ltd,

Midland Bank Ltd.

Legal Advisors

Legal Salvation Center, AHM Kamal & Partners, Tareque &

Associates, Shahinshah & Associates, Seraj & Associates,

Lexes & Legists, Lex Juris, G Sorrowar & Associates, Quader

Chambers, Law & Remidy and BLACK & WHITE.

Subsidiary CAPM Advisory Limited, CVC Brokerage Limited

Membership with AssociationsBangladesh Leasing & Finance Companies Association

(BLFCA)