UNIVERSITY OF DHAKA

Department of Finance
F-109: Business Finance

2011

A Case Study On Prime Finance & Investment Ltd.

Submitted toM.Shahjahan Mina Professor, Department of Finance, Faculty of Business Studies, University of Dhaka.

Submitted by-

ID No.

Name 17-015 Md.Anamul Haque 17-017 Md.Golam Rabbani 17-019 Rubel Hossain 17-095 Rasedul Islam 17-139 Sayem Ahmed Lasker

Remark

Group No.08 09

Department of Finance, Section A Faculty of Business studies, University of Dhaka.

Submission Date: December 22, 2011

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After the successful completion of the course named Business Finance (F-109) of the BBA program, preparation for the business report provide us an opportunity to lessen the gap between the theoretical knowledge & practical experiences. To enhance the analytical competence, we were asked to prepare a report on Prime Finance& Investment Ltd. which has undoubtedly put fresh impetus to our understanding of the method of survey techniques that permit us in the future to shine in life. Survey is a great way to collect information. SO the report will be very helpful in our future life.

We believe practical experiences of working with a group will surely make us better understanding of our theoretical knowledge.

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December 22, 2011 To M.Shahjahan Mina Professor, Department of Finance, Faculty of Business Studies, University of Dhaka. Subject: Submission of Term Paper. Dear Sir, It is an immense pleasure for us to submit the Project Report on Prime Finance & Investment Ltd. which is prepared as a partial requirement of the course named Business Finance (F-109) of BBA program under Department of Finance of the Faculty of Business Studies, University of Dhaka. The study mainly focused on the Prime Finance & Investment Ltd decision making process and the information of the company. The experience that we gather through this study will help us in our career indeed. It was an opportunity of rediscovering our potentials and full of excitements. This report gave us an occasion to apply our theoretical expertise, sharpen our views, ideas, and communication skills, and bridge them with the real world of practical experience, which will be a good head start for our future professional career. We would like to convey our special thanks and gratitude to you for patronizing our effort & for giving us proper guidance and valuable advice. We have tried our best to cover all the relevant fields. We earnestly request you to call upon us if you think any further work should be done on the topic that you have chosen for us. Thanking you and looking forward to receive your cordial approval of our submission. Yours Sincerely, On behalf of the member of the group No # 08 (Md. Anamul Haque) ID No.17-015

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First of all we express our gratitude from heart to the Beneficent, the Merciful, & Almighty Allah for giving us the strength and patience to prepare this report within the programmed time. We would like to give special thanks to M. Faqrul Islam Majumder ,the manager, corporate finance for his special type of help. Really it will be very difficult for us to make the report without the kind and generous help of him. We would also like to thank the following the kind and very helpful senior brother for their generous help and the lab assistants helpful hand. We are deeply indebted to our course teacher, Shahjahan Mina, Professor, Department of Finance, University of Dhaka for his cooperation and precious contribution in preparing the report.

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The most intelligent student of our country should be in the University of Dhaka. The students who get admitted in the department of Finance are probably the most brilliant in the Commerce sector in our country. We have tried to show our best competence in our report. We have collected the information about our report by the help of internet and by our seniors. We have tried our best to provide every possible information on the Whirlpool Company.

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Serial Content No. 01. Chapter 01: Introduction

1.0. Introduction: 1.1. Origin of the report: 1.2. Objective of the report: 1.3. Methodology: 1.4. Scope of the report: 1.5. Limitation of the report:

Page No.

09 09 09 09 10 10 12 14 18 21

02.

Chapter 02: Company Profile Chapter 03: Financial Performance & Condition Chapter 04: Overall Comment, Findings and Conclusion

2.0. Company Profile:

2.1. SWOT Analysis: 2.2. BCG Matrix:

03.

3.0: Economy Analysis:

23

3.1. Competitors

04.

4.0. Problems & Solutions 4.2. Recommendation

27 30

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Prime Finance & Investment Ltd.

Couse Name : Business Finance (F-109)

CHAPTER 1: Introduction

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11.0.

Introduction

In this chapter we tried to describe the origin of the report, objective of the report, scope and limitations of the report. 1.1. Origin of the report:The 1.1. Origin of

Report:

The BBA Program under the department of finance offers a course named Business Finance (F-109) which requires submitting a report on a specific topic determined by the course instructor. The report under the headline Prime Finance & Investment Ltd. has been prepared towards the purpose. 1.2. Objective of the report: 1.2. Objective of

The Report:

There are several objectives to conduct the study which are: To provide an overall information about the Prime Finance & Investment Ltd. To provide an brief overview on Financial performance of Prime Finance & Investment Ltd. To analyze a real case To give some recommendation to the company 1.3. Methodology:

1.3. Methodology:

To prepare this report we mainly depend on the primary data. But also take some help from our seniors. Process of collecting secondary data: We went to our senior to know about the procedure of making a good report. Then we ask for advices that should be followed to collect a standard data. Process of collecting primary data: Primary data are collected from the following sources: We collected our necessary primary data by the help of internet. Then we went to the company for other information Reasons for collecting primary data:

It is not possible to complete the report with the secondary data.

To cross checking the secondary data couldnt be possible without using primary data.
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1.4. Scope of the report:

1.4. Scope of The Report:

Everything has some advantage which helps that work to be completed thoroughly. We get some scope which helps us to make a standard report. Major of them areEnough Time: We have got enough time to prepare a report so that we could gather information with much tension free mind. . Easy access to internet: We have a very smooth access to internet in our computer lab. So that we didnt face any kind of trouble in this sector. Good Organization: We are asked to make a report on Prime Finance & Investment Ltd. Which has good and friendly working environment. .

1.5. Limitation of the report:

1.5. Limitation of The Report:

Every study has some limitations. We faced some usual constraints during the course of our preparation for the report. The major limitations are as follows: Lack of knowledge: We dont have enough knowledge about how to prepare a report. So face some problems by this side. No previous experience: We have no previous experience of going to a concern and collect data so we face some problems in this way. No deep technical knowledge: We are asked to prepare a report on lease finance but we dont have that much technical knowledge over lease financing so we face problem at this side.

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Prime Finance & Investment Ltd.

Couse Name : Business Finance (F-109)

CHAPTER 2: Company Profile

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2.0. Company Profile:

Establishment:
Prime Finance started its journey in the year 1996 backed by some leading corporate houses and individual entrepreneurs. The founding members of Prime Finance are Aminul Haque, K.m Khaled, A. M Khaled, Kazi Salimul Haque, M.A. Ohab, Mr. Alliuzzaman etc. Prime Finances long-term record of growth and evolution continued since inception. The strength of our balance sheet, together with our pursuit of opportunities for continued growth, led to a range of successful initiatives. The diversity of operations is a key to our strength.

Vision of Prime Finance & Investment Ltd:

We aspire to be a market leader providing integrated financial solutions with special focus on creating value: For our clients Working closely with our clients; For our shareholders Maximizing shareholders wealth achieving superior performance; For our employees Providing a workplace in which employees are rewarded and respected properly; For our communities Supporting community initiatives in health, education, arts and economic & social development.

Mission of Prime Finance & Investment Ltd:

Our mission is to Grow profitably : Through partnership with our clients delivering innovative solutions to cater their financial needs; Create shareholders' value :Through client satisfaction and employee commitment to excellence; Enhance the ability of our employees: Giving every opportunity to have access to adventurous experience through which they can raise their self-esteem, realise their full potential and achieve more than they ever thought possible; Serving our communities: With integrity and pride.

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Goals:
Our goal is to be an undisputed leader in financial services creating longterm shareholders' value aiming to achieve these by : Building quality investment portfolio; Focusing on minimizing default loans within the portfolio; Developing and maintaining dependable and long-term relationships with our clients; Sustaining solid growth without compromising profitability; Achieving higher return on equity; Maintaining strong relationships with a wide variety of partners; Responding quickly to new opportunities; Assessing and managing business risk prudently.

Awards & Recognition:

Prime Finance & Investment Limited is proud of its effort to make the Company one of the best run financial institutions in the country. It is a testament to our standards of Professional Excellence, Corporate Governance, Compliance, Accountability and Transparency that we won a number of prestigious awards over the years. Some of the notable awards achieved are: 2010 First Position (Overall) - SAFA BPA & CG Award 2010 First Position (Financial Services Sector) - SAFA BPA & CG Award 2010 Second Position - ICAB National Award 2010 First Position - ICAB National Award 2009 First Runner Up - SAFA Award 2009 First Position - ICAB National Award 2008 First Runner Up - SAFA Award 2008 Second Position - ICMAB Best Corporate Performance Award 2008 First Position - ICAB National Award 2007 Silver Award - SAFA Award 2007 First Position - ICAB National Award 2006 Runner Up - SAFA Award 2006 First Position - ICAB National Award 2005 SAFA Merit Award 2005 Best Merchant Bank - Rafiqul Islam Banking Award 2003

2009 2008

2007 2006 2005 2003

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Objectives And Strategy:

Strategic review
We have undertaken a thorough and disciplined strategic review of our business, which will set our direction for the coming years. In doing so we considered market trends and opportunities that exist in the chosen markets positions, how we derive value from our businesses and the performance of the key operational areas. We have updated our objectives accordingly.
Focus

Our future is about becoming more focused a clear business model based on diversity and operations of diversified associate companies, focusing on our financial markets.
Integration

We aim to run our businesses in a more integrated way organizing our activities along lines of business, supported by strong associate companies. This involves deploying proven processes, unique system and best practices within each business. In this way, we will maximize the competitive advantages that come from being a leading financial institution. However, it is critical that we balance this with the need to provide excellent service to customers and to maintain and build relationships with our key stakeholders.
Discipline

We plan to be more disciplined in the application of the best practices. Increasingly we will standardize our approach, applying even greater rigor to financial discipline, ensuring that we have the capital to grow, but maintaining the investor confidence that comes from a disciplined approach to our balance sheet. We maintain our target of increasing earnings per share.

Objective
Our primary objective is to grow our businesses in order to create value for our shareholders. We can do so only if we achieve operational excellence and continue to improve our financial performance. We invest for future growth and are financially disciplined and we develop, recruit and retain skilled, talented and motivated people. In each area we aim to increase our focus, and be disciplined in our approach. As a consequence, we have identified specific objectives in the following areas:
Performance

We aim for operational excellence by performing to the highest standards of reliability and efficiency. We aim to continue to improve our financial performance. 14 | P a g e

Growth

We will invest in our existing businesses and in acquiring new business in our core markets, to generate future growth. We will diversify more our operational activities. We will be financially disciplined in the way we invest and in the way we manage our earnings stream through diversification.
Talent

We aim to maximize the contribution made by our employees by motivating our people to strive for continued improvement, developing their skills and talents and by promoting a culture that recognizes and respects inclusion and diversity. Our strategy is underpinned by our commitments to developing strong and valued relationships with our customers, regulators, lenders, depositors and the communities in which we operate and to acting responsibly including commitment to reducing our environmental impact and to corporate governance and business ethics.
Relationship

We aim to improve relationships with our customers, regulators, fund providers and the communities in which we operate by focusing on the areas that are important to them such as the quality of services we provide to customers, the quality of information we provide to regulators, by investing in local communities and by the way we address the concerns of, and interact with, all our stakeholders.
Responsibility

We believe operating responsibly is essential to the way we conduct our operations, invest, develop our people and manage our relationships and so responsibility underpins everything we do. Although our activities have no direct impact on environment, we are committed to taking positive action to reduce our contribution to climate change and our other impacts on the environment .We want to operate to the highest standards of corporate governance and we believe in strong business ethics, based on our core values set out on page 7 of this Annual Report.

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Board of Directors:
The Board of Directors is responsible for supervision of the overall affairs of
the Company. Prime Finances Board of Directors has long adherence to governance principles designed to assure the continued vitality of the Board and excellence in the execution of its duties.

Chairman:
Md. Aminul Haque Chairman Representing Acorn Limited Age: 70 years

Qualification: B. Sc Engineer (Bangladesh University of Engineering & Technology) Appointment to the Board: He was first appointed to the Board as Director on 10 March 1996 and last re-appointed on 29 April 2007 Experience: After graduation from BUET in 1962, Mr. Haque started his career with the Industrial Development Bank of Pakistan and subsequently joined the then East Pakistan Water and Power Development Authority as Assistant Engineer. In the year 1972, he established Greenland Engineers & Tractors Co. Ltd. (GETCO), dealer of Caterpillar Inc. - a world leader in the manufacture of construction equipments, diesel and gas engines and generators. A diversified and successful business personality, Mr. Haque is actively associated with a number of companies in the areas of banking, insurance, telecommunication, manufacturing etc. Committee Membership: Chairman, Corporate Governance Committee Association with other Organization: Prime Bank Ltd., Asia Gate Ltd., Prime Prudential Fund Ltd., Acorn Limited, Greenland Engineers & Tractors Co.Ltd.and Machinery & Equipment Trading Co. Ltd. The other members of the board of directors are-

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Name of Director Mr. Md. Aminul Haque Mrs. Muslima Shirin Mr. Z. M. Kaiser Mr. Mohammad Masudur Rahim Mr. M. Shahadat Hossain Kiron Mr. M. N. H. Bulu Mr. Tauseef Iqbal Ali Professor Salma Rahman Mr. Md. Aliuzzaman

Position Director Director Director Director Director Director Director Director Director

Representing Acorn Limited Mawsons Limited Maksons (BD) Limited East Coast Shipping Lines Limited Agami Apparels Limited Abeeco Industries Limited Self Self Self

Product and Services:

Financial segments
Winning value excellence has been the spirit of Prime Finance. Keeping the varied nature of client base and their unique needs in mind, the Company has been constantly diversifying their product which is evidenced from the following list of versatile products and services: Lease finance Term finance Real estate finance Bill discounting Bridge/equity finance Syndicated finance SME finance 17 | P a g e

Hire purchase

Deposit schemes
Yes. We have a number of attractive Deposit Schemes to suit your specific requirements. Monthly income deposit Annual income deposit Cumulative income deposit Double income deposit Housing deposit Fortune DPS

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Prime Finance & Investment Ltd.

Couse Name : Business Finance (F-109)

CHAPTER 2: Financial Performance and Condition

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Companys Earnings Per Share (EPS) was Tk. 19.13 in 2010, which was Tk. 7.57 in 2009 resulting a growth of 152.71 percent. To maintain the pace with continued growth in EPS, the board in its meeting held on 24th February 2011 recommended 80 percent stock dividend i.e. 4 bonus shares for every 5 shares held for the year 2010, which was 50 percent in 2009.

The Company earned a record revenue and net profit in 2010. Total revenue and net profit was Tk. 3,069 million and Tk. 1,726 million respectively in 2010, which was Tk. 1,425 million and Tk. 683 million respectively in 2009 resulting a growth of 115.33 percent and 152.71 percent over last year. In 2010 net profit was 56.25 percent of total revenue compared to 47.93 percent in 2009 resulting from a well managed management expenses, cost of fund and so on.

As a focal point of gradually cleaning up of Balance Sheet, the Company could improve its conditions regarding loans, advances and leases. The graph shows that non-performing loans, advances and leases was 6.18 percent in 2010, which was 7.04 percent in 2009 and 10.86 percent in 2007 as well.

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Both the components shareholders equity and return on average shareholders equity were record in Prime Finances history. In 2010, shareholders equity was Tk. 3,488 million compared to Tk. 1,826 million in 2009 showing a growth of 91.02 percent over last year. Return on average shareholders equity was 65 percent in 2010, which was 50 percent in 2009 showing an increasing trend.

In 2010, investment of the Company crossed the billion in double digit mark ended to Tk. 11,621 million which was Tk. 9,275 million in 2009 showing a growth of 25.29 percent. Return of average investment was 19.01 in 2010 compared with 9.89 percent in 2009 showing a significant growth as well.

Both the market price and the book value per share has increased in 2010. Market price at 30 December (as the closing date of the year 2010) was Tk. 466, which was Tk. 186 in 2009. Book value at the end of the year was 39 per share, which was 28 per share in 2009 despite adjusting stock dividend of 40 percent of 2009.

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Companys source of fund was well diversified. In 2010, term deposit was the top provider (in term deposit Tk. 3,502.75 million from institutions and Tk. 257.55 million from individuals) equivalent as 35.11 percent followed by bank loan 24.09 percent, retained earnings and reserve 22.07 percent, short term borrowing 9.15 percent, paid up capital 8.43 percent and so on.

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Prime Finance & Investment Ltd.

Couse Name : Business Finance (F-109)

CHAPTER 3: Real Case

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We have visited the Prime Finance & Investment Ltd. The Manager of Corporate Finance has provided us with the necessary information about their organization. On the basis of the provided information, we have made a case on the term financing of Prime Finance & Investment Ltd. They provide us with a case on term financing. The name of the client was Knit Plus Ltd.. It is an export oriented garment manufacturing company. The main target of this company in to export their product to the foreign country. In 2007, they feel a need of pickup vans for their activities. The pickup vans cost near about 50 lacks taka. So, they took a loan from the Prime Finance & Investment Ltd. Of 30 lacks taka to fill up their need. At first they gave an application for the loan. The application form is always provided by the Prime Finance & Investment Ltd. In this application form, they asked to provide some information of their company and some confidential information. The application form contains information about the name of the applicant company, address, type of the company, type of lease required, proposed period, directors details, Key Executives, Personnel, Product & sales, Sister concerns, Group liability position, bank account position, existing machinery details and some documents attached about the companys existence. In addition to that they also asked to submit a commitment letter, a document on directors and net worth statement. After providing all these information Prime Finance & Investment Ltd. Considered their application positive and provide them the facility they wanted. Prime Finance provides them a loan of 30 lacks for 48 months on a monthly structured payment basis in beginning payment mode. The Lease agreement number is TDF#2007/009. Knit Plus Ltd gave a monthly instalment of 95150 taka. In the structured payment from 1st to 4th was nil and from 5th to 48th month they gave a instalment of 95150 taka. Prime Finance also took a lease deposit of one month which they adjusted in the 48th month. The Interest rate was 16.5%. Knit Plus Ltd made a successful repayment of the loan. Months 0 1 2 3 4 5 6 7 8 9 10 11 Beginning Balance 3000000 2946100 2946100 2946100 2946100 2946100 2901918 2846669 2790661 2733883 2676324 2617973 Interest Rate 1.375 nil nil nil nil 1.375 1.375 1.375 1.375 1.375 1.375 1.375 Installment Payment 95150 nil nil nil nil 95150 95150 95150 95150 95150 95150 95150 Interest Payment 41250 nil nil nil nil 40508.88 39901.37 39141.7 38371.59 37590.89 36799.45 35997.13 Principal Ending Repayment Balance 53900 2946100 nil 2946100 nil 2946100 nil 2946100 nil 2946100 54641.13 2891459 55248.63 2846669 56008.3 2790661 56778.41 2733883 57559.11 2676324 58350.55 2617973 59152.87 2558820

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12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

2558820 2498854 2438063 2376437 2313963 2250630 2186426 2121339 2055357 1988469 1920660 1851919 1782233 1711589 1639973 1567373 1493774 1419163 1343527 1266850 1189120 1110320 1030437 949455.4 867360.4 784136.6 699768.5 614240.3 527536.1 439639.8 350534.8 260204.7 168632.5 75801.18 -18306.6 -113708 -210422

1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 1.375 0

95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 95150 0

35183.78 34359.24 33523.37 32676 31816.98 30946.16 30063.35 29168.41 28261.16 27341.44 26409.08 25463.89 24505.7 23534.34 22549.63 21551.37 20539.39 19513.5 18473.5 17419.19 16350.39 15266.9 14168.51 13055.01 11926.21 10781.88 9621.817 8445.805 7253.622 6045.047 4819.854 3577.814 2318.697 1042.266 -251.715 -1563.49 0

59966.22 60790.76 61626.63 62474 63333.02 64203.84 65086.65 65981.59 66888.84 67808.56 68740.92 69686.11 70644.3 71615.66 72600.37 73598.63 74610.61 75636.5 76676.5 77730.81 78799.61 79883.1 80981.49 82094.99 83223.79 84368.12 85528.18 86704.2 87896.38 89104.95 90330.15 91572.19 92831.3 94107.73 95401.72 96713.49 0

2498854 2438063 2376437 2313963 2250630 2186426 2121339 2055357 1988469 1920660 1851919 1782233 1711589 1639973 1567373 1493774 1419163 1343527 1266850 1189120 1110320 1030437 949455.4 867360.4 784136.6 699768.5 614240.3 527536.1 439639.8 350534.8 260204.7 168632.5 75801.18 -18306.6 -113708 -210422 -210422

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Prime Finance & Investment Ltd.

Couse Name : Business Finance (F-109)

CHAPTER 4: Overall comment, Findings and Conclusion

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Corporate

Social Responsibility

Prime Finance sees itself as an integral part of the communities in which it operates. This means that the Company recognizes that its activities have an impact on the community in which Prime Finance do business. The Company also realizes that the basis for any good business is trust and the society expects the highest standards from Prime Finance when it comes to ethics and corporate responsibility. Prime Finance is and always has been founded on solid long-term relationships with all of its stakeholders.The Company achieves this by promoting a corporate culture that adheres to its business principles, and by generating good and sustainable returns for its shareholders.The objective of Companys involvement in CSR is to ensure mutual value creation for the Company as well as its employees and stakeholders. Every aspect of business has a social dimension. Prime Finance in carrying out its business activities is pursuing its commitments to sustainable development and transparent corporate conduct in social and ethical manner. We define corporate responsibility as operating with integrity at all the times, sustaining our company's long-term viability while contributing to the present and future well being of all our stakeholders. In doing so, we strive to take active responsibility for this daily choices that our company faces: How should we best structure and govern our Company? How should we best serve our clients in terms of ethics, privacy and services? How should we attract the best talents and motivate our employees? How should we contribute to our communities in which we operate our business? How can we minimize the impact of our business activities on the environment? and How can we grow our company in a sustainable way? At Prime Finance, we recognize that we have certain responsibilities to our clients, shareholders, employees and to the communities. We aspire to achieve highly professional standards and integrity in all situations: managing our financial performances for the benefit of all our stakeholders making a contribution to the community we live in and avoiding practices that directly or otherwise have a negative impact on others or the environment. We try to carry out these responsibilities properly and to improve our performance over time.

Prime Finance and its Clients

Prime Finance is committed to building its business and serving its clients, while at the same time improving the communities in which it does business. As a financial institution, people entrust Prime Finance with their funds, and therefore, with their aspirations for their families and businesses. This is a large responsibility and a great opportunity.The Company in turn strives to listen to and learn from its stakeholders and to take the appropriate action where it applies, since responsible behavior towards its clients, shareholders and employees is an essential element of Companys daily business.

Our commitments to clients

Effective service Constantly strive to ensure that our employees are close to clients and available at all the time Respond quickly and efficiently to client requests and ensure quality followthrough Professional expertise

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 Continually work to enhance products and services by listening to clients in order to determine their needs Provide employees with the training they need to deliver sound advice to clients Ethical principles and code of conduct

Effective Service
Prime Finance organizes periodical meetings with respective departments at least once in every month for making continuous improvements whose aim is to achieve operational excellence and change internal business process through employees. Emphasis is given to note the voice of the client whenever employees meet clients that are what the clients say, they want and need. This program provides rational way for bringing about significant improvements in the quality of the service delivered, while empowering employees to make necessary changes.

Expertise
To ensure that our products and services meet evolving client needs. Prime Finance always try to address and responds to feedback from clients.

Statement of professional ethics

Prime Finance adheres to the professional code of conduct in force where it operates. Prime Finance compliance guidelines is based on the following fundamental principles: Professional advice:We undertake to advise our clients after listening to them and a personalized analysis of their real needs; Clear and honest information: We undertake to always give our clients the information that is clear and honest, the service to which they are entitled, the status of their loan/lease, the position of clients investments etc.; Non-disclosure of confidential client information: We undertake to refrain from disclosing any information that we may acquire on the personal life, assets and activities of our clients; Fairness: We undertake to manage faithfully the accumulated benefits and entitlement of our clients and to manage impartially all conflict of interests that arise between Prime Finance and also clients;

Prime Finance & its Shareholders

Our commitments to our shareholders
Operating performance that ranks among the best in the industry; Effective corporate governance; Full and complete financial information; Giving attractive dividend.

Living up to these commitments

Operating performance that ranks among the best in the industry Prime Finance uses three indicators in particular to measure shareholders satisfaction. Usually those have been chosen because they are widely used by industry analysts to compare performances. Prime Finance seeks to achieve continuous improvement in those areas.The indicators are: Efficiency ratio : When this indicator improves this means the assets and liabilities have been managed efficiently; ROI : When this indicator improves this means the assets have been utilized efficiently; EPS : When this indicator improves this means the profitability increases. High standards of corporate governance 28 | P a g e

 Details on Prime Finance's structures of corporate governance are given on page 62 of this Report. Fully informed shareholders Prime Finance has highly diversified shareholder base. Committed to building and maintaining a relationship based on trust and accessibility with both individual and institutional investors, Prime Finance provides timely and relevant information as we have dedicated employees to respond to their requests. Shareholders information A top priority Prime Finance's goal is to deliver clear, complete and reliable information that meets the needs of all shareholders, regardless of their level of expertise as investors. Prime Finance ranks among the few listed companies that provide the most detailed possible information on business strategy, performance and earnings and has received awards for the quality of its disclosures. In all the years since its listing in 2005 with Stock Exchanges, Prime Finance received First Prize of ICAB National Award for best published Annual Reports. Prime Finance also received SAFA Merit Award in 2007and Second Prize in 2008 and 2009 amongst SAARC Countries for the best published Annual Reports.

Prime Finance and its Employees

Prime Finance is committed to be equal opportunity employer, adhering to the highest social standards, the company seeks to provide a superior working environment for its employees based on diversity and respect for the importance of the individual. As a leading financial institution, one of the Companys main purposes is to create longterm value. Prime Finance firmly believes that sustainable growth and investment for any business is also dependent on what it does above and beyond what laws and regulations require. This is why Company is committed to creating a working environment based on the values of equal opportunity, diversity and meritocracy. The Company has also adopted measures to protect the environment and contribute to the community where it operates. All the Companys activities are reinforced by its governance structure, which complies with the leading codes of best practices. Our commitments to our employees Provide a workplace in which employees are respected; Encourage a management style that empowers and develops employees; Measure progress in employment practices and employee morale.

Living up to these commitments

Prime Finance sets forth general guidelines in the area of employment and human resources. Specific action plans are implemented by Prime Finance to address issues relating to human resources.

A workplace where employees are respected

Prime Finance is not exposed to any social problems like child labor.With respect to issues that are relevant to its operating environment, Prime Finance promises to : Provide equal opportunity and respect diversity; Promote constructive dialogue between employees and senior Management; Support employee efforts to achieve a healthy work-life balance; An empowering Management style that develops employee and encourages performance; Prime Finance seeks to enhance employee motivation and performance in line with Company's strategic objectives and in accordance with Prime Finance 29 | P a g e

 brand promises: ethics, professionalism, innovation, pragmatism, team spirit and integrity. In support of these, Prime Finance's management style encourages: Quality information on key priorities: Employees are kept informed of the strategies of their Company and its results. In this respect, internal communications play a key role in devising and disseminating published information resources and holding regular departmental meetings. Clear individual objectives: Departmental heads meet with their colleagues periodically to review past performance and set future objectives. These meetings help employees to understand how they contribute to achieving company objectives. The support from managers needed to excel professionally and contribute to improving company performance: Once again, the annual performance appraisal plays a key role in elucidating training needs related to current job performance as well as future career development and opportunities. Performance appraisal is made up of some 20 traits. 3 sets of appraisal sheets are used for 3 categories of employees that is Senior Management, Mid level Management and Junior level Officers. An employee is assessed by two senior executives and the score is considered to be an appropriate barometer of employee satisfaction. Working conditions are comparable to those enjoyed in best companies of the industry. Compensation levels also compare favorably to industry rates. Social indicator 2010 is given on page 56 of this Report.

2010 Highlights
Prime Finance considers Human Resources as its main asset and it always put emphasis in developing the skills of its employees. Total 40 no of employees have been given local training Prime Finance spent Tk. 1.15 million for HR training & development For overseas training Prime Finance spent Tk. 461,770 The cost of local training was Tk. 692,781

Prime Finance and its Community

CSR means voluntarily integrating social and environmental considerations into the business and these are an integral part of Companys corporate culture and 30 | P a g e

fundamental business principles. Prime Finance believes that a prosperous community creates a prosperous business.By supporting charitable causes, Prime Finance seeks to help people achieve their goals. Our commitments to community Develop philanthropic initiatives that are related to our core business. Share our expertise with the community particularly in the area of prevention Contribute for the well-being of the Community Living up to these commitment Prime Finance believes in building prosperity by supporting a broad range of community causes. Our employees also make contribution as volunteers sharing their time, financial and enthusiasm with the community. Donation Donations are a cornerstone of our community programs, with a tradition of philanthropy dating back to our roots. We are committed to making a lasting social impact through inspiration, responsibility giving and building strong partnership with the charitable organization. 2010 Highlights Prime Finance donated Tk. 25 lac to Bangladesh Olympic Association in arranging 11th South Asian Games Dhaka-2010 For the purpose of creating self employment Prime Finance contributed Tk. 112,500 to Lions Club of Dhaka Imperial in buying 25 Sewing Machines for blind people Sponsorship Sponsorship is an integral part of Prime Finances marketing and promotional activities and are selected to promote our image and reputation. In 2010, Prime Finance also participated in the community development by way of sponsoring some national programs. 2010 Highlights Prime Finance sponsored Tk. 3 lac to Gulshan Ladies Community Club for primary and adult education, health care & family planning, sewing training and a unique dispute resolution and legal advice forum Prime Finance was one of the core sponsors of ICAB- International Conference of Chartered Accountants 2010 and the sponsorship amount was Tk. 3.5 lac Prime Finance sponsored Tk. 3 lac to ICSB in 3rd Convocation and National Convention on Chartered Secretaries Act 2010 : New dimension in professional excellence.

Prime Finance and its Environment

Our commitments to environment Ensure that our clients comply with the regulatory requirements Improve our own environmental record

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Contribution to the national economy:

At Prime Finance we are recognizing that we have certain responsibilities to the development of the society and the country as a whole. We aspire to be known as an institution that builds enduring relationship with and delivers value for our clients, shareholders, employees and the community where we work. As a financial service provider, Prime Finance contributes to the economic prosperity by providing financial products and services to the industrial undertakings including SMEs. Based on the financial as on 31 December 2010, Prime Finance has a total credit exposure with around 1,220 clients of Tk. 8,720.70 million. Such facilities were extended mostly for importation of capital machineries and working capital and margin loan purpose. Prime Finance also manages IPOs of different companies to increase supply of securities in the capital market. This is how Prime Finance contributes to the industrialization and capital market development of Bangladesh and thus helping employment generation. Prime Finance contributes to the economy paying out fair share of taxes to Government. During the year 2010 the Company provided provision of Tk. 259.41 million for tax. We make an economic impact by creating employment and a well-trained workforce. Prime Finance and its associate companies employed as many as 166 employees as on 31 December 2010 (2009:134). During the year 2010, Prime Finance spent total Tk. 1.15 million for training and HR development. During the year 2010, Prime Finance paid a total amount of Tk. 86.32 million as salaries and allowances to its employees (2009 : Tk. 63.44 million). In 2010, the employees of Prime Finance paid taxes to the tune of Tk. 3,097,040 with highest payment of Tk. 637,250 by an individual employee. We recognize our fiduciary duty to our shareholders and seek to establish constructive relationships. We are focused on maximizing long-term shareholders' value through strong financial performance and returns, disciplined and profitable investments. Over the past many years, Prime Finance has been paying a satisfactory dividend to its shareholders placing it among the top ranking non-banking financial institutions. Prime Finance 32 | P a g e

proposed 80 percent stock dividend equivalent to Tk. 722.00 million to its shareholders for the year 2010 (2009: 40 percent stock dividend equivalent to Tk. 257.86 million & 10 percent cash dividend equivalent to Tk. 64.46 million). We always agree in building prosperity by supporting a broad range of causes through donation and sponsorship. We encourage our employees to participate in social and charitable programs.As a part of its social responsibility, the Company contributes to various funds, flood affected people, to hospitals and to the people who were affected by the natural calamities. We believe that sustainable economic growth and a healthy environment are inter linked. We take supportive role in terms of providing financial services by restricting and discouraging those projects that cause pollution for environment and health hazard.

Problems:
Inflation problem: When a lot of inflation in the market is seen prime finance investment faces serious problem for providing lease. Because they cannot determine the actual value of the money for inflation. Problem at determining interest rate: at the time of determining interest rate on the sanction money the company have to consider optimum return on investment high profit market equilibrium and customer ability. Lack of sufficient branches: the company has a few branches in the country and it has no outer branch in the world. Problem of due instalment: sometimes the customer does not pay the instalment on time. Even they do not pay more than one instalment one time at this situation the company has to face many problems for managing these. Proper managing problem: although high management facilities are available in the company, the company focus sometimes some problems at providing lease such as decision making problem, problems of selecting proper customer and probability of chaos among them. Problem of facing high formalities: the customer who is interested to take lease from the company called Prime finance & Investment Ltd. Has to face huge formal condition that are fulfilled by the customers to take lease for example the customer has to give forwarding latter formal invoice, TIN certificate, trade licence, CV of directors etc. Problem of paying high interest rate: the company pay the rate of interest that is relatively higher than other companies for this high interest rate sometimes the customers shows cold reception for taking lease from the company.

Recommendation:
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Prime Finance & Investment Ltd should increase their number of branch. They should give more importance on management Prime Finance & Investment Ltd should provide online lease application facility to its customers so that the customer can get better service. Prime Finance & Investment Ltd should charge moderate interest rate. Prime Finance & Investment Ltd should add Home Loans, Car Loans and education Loan to its financial segment.

Conclusion:
From the above discussion, we can say that Prime Finance Leasing & Invest company Ltd give lease to other parties on the basis of well economic condition & performance of lessee. As a result prime finance leasing & invest company ltd will be able to become safety for leasing sector.

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