ILFSL-Annual-Report 2020

Subsequent expenditure Subsequent expenditure relating to any item of fixed assets are added to the carrying amount of the asset when it is probable that future economic benefits, exceeding its present standard of performance, will flow to the company and the cost of the item can be measured reliably. All other costs are recognized in profit and loss account as expense. Depreciation Components of an asset with differing patterns of benefits are depreciated separately. Depreciation on own fixed assets is charged systematically over the assets useful life. Full year depreciation is charged on additions irrespective of date when the related assets are put into use. On the other hand, no depreciation has been charged on the month of disposal. The company follows the straight-line method of depreciation applying annual rates stated as follows: Motor vehicles 20% Office decoration 15% Office equipment 20% Furniture and fixtures 15% Computers & Accessories 33% Disposal or retirement The gain or loss arising out of disposal or retirement of fixed assets is determined as the difference between the sale proceeds and the carrying amount of the assets and is recognized in profit and loss account. 2.07 Revenue recognition \"The core principle of IFRS 18 Revenue from Contracts with Customers is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is only recognised when it meets the following five steps model framework as per IFRS 18 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) recognise revenue when (or as) the entity satisfies a performance obligation.\" Interest income from loans and other sources is recognised on an accrual basis of accounting. 2.08 Borrowing cost 2.09 All borrowing costs are recognized expenses in the period in which they incurred in accordance with benchmark treatment of IAS 23 Borrowing Costs. Tax provision Current tax Provision for current tax is made on the basis of the profit for the year as adjusted for taxation purpose in accordance with the provision of Income Tax Ordinance, 1984 and amendments thereto. Deferred tax The company accounts for deferred tax as per IAS 12 Income Taxes. This is provided using the liability Annual Report 2020 International Leasing  199

method for all temporary timing differences arising between the tax base of the assets and liabilities and their carrying value for financial reporting purposes. Tax rate prevailing at the statement of financial position date is used to determine deferred tax asset or liability. In calculating deferred tax, temporary difference arising from depreciation of fixed assets is considered. 2.10 Earning Per Share (EPS) The Company calculates Earnings per share (EPS) in accordance with IAS 33 Earnings Per Share, which is shown in the face of the Statement of Profit or Loss. No diluted earnings per share is required to be calculated for the period, as there was no scope for dilution during the period under review. 2.11 Related Party Disclosures \"IAS 24 Related Party Disclosures requires disclosures about transactions and outstanding balances with an entity's related parties. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related party transaction is a transfer of resources, services, or obligations between related parties, regardless of whether a price is charged as per IAS 24 Related Party Disclosures. During the year, the company carried out a number of transactions as a form of Term Deposit with its parent company International Leasing and Financial Services Limited (ILFSL). The transactions fall within the definition of related parties as defined by IAS 24 Related Party Disclosures. The total balance of the term deposits as of the financial statements date is shown under the note no. 4.01 and accrued interest recognised on TDRs is shown under the note no. 7.00 (A). 2.12 Events after the Reporting Period IAS 10 Events after the Reporting Period contains requirements for when events after the end of the reporting period should be adjusted in the financial statements. Adjusting events are those providing evidence of conditions existing at the end of the reporting period, whereas non-adjusting events are indicative of conditions arising after the reporting period (the latter being disclosed where material). There were no materials events have occurred after the reporting period which could affect the values stated in the financial statements. 2.13 Offsetting Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. 2.14 Re-arrangements of figure Previous figures have been re-arranged whenever necessary to confirm current period presentation. 2.15 Restatement of financial statements The company's financial statements have been restated for the year of 2019 for the effect of measuring financial assets (e.g. equity instruments) at fair value; and recognising gains and losses in other comprehensive income as per IFRS 9 Financial Instruments. 2.16 Reporting currency The financial statements are presented in Bangladeshi Taka which is the Company’s functional currency except as indicated. 2.17 Uniform accounting policies The financial statements of International Leasing & Financial Services Limited and IL Capital Limited have been prepared in accordance with uniform policies of accounting. 200 Annual Report 2020  International Leasing

Amount in Taka December 2020 December 2019 3.00 Cash and cash equivalents 595 917 Cash in hand 12,091,764 7,166,122 Cash at bank (note- 3.01) 12,092,359 7,167,039 3.01 Cash at bank One Bank Limited Bank Asia Limited 11,559,767 6,670,213 City Bank Limited 528,323 491,923 3,674 3,986 12,091,764 7,166,122 4.00 Investment Investment in share Investment in pre IPO share 42,465,065 37,710,302 Investment in TDRs with ILFSL (note- 4.01) 2,500,000 2,500,000 178,131,836 177,065,456 223,096,901 217,275,758 4.01 Investment in TDRs with ILFSL Opening balance Add: Investment made during the year 177,065,456 158,217,614 Less: Encashment during the year 1,066,380 18,847,843 - - 178,131,836 177,065,456 5.00 Fixed assets including premises, furniture & fixtures Motor Vehicles Office Decoration - - Office equipment 19,148,469 19,148,469 Furniture & Fixtures Computer & accessories 474,379 474,379 815,021 815,021 Less: Accumulated depreciation 4,595,186 4,595,186 Net book value at the end of the year (Annexure-1) 25,033,055 25,033,055 (23,691,020) (23,169,817) 6.00 Receivable from customers 1,342,035 1,863,238 3,544,681 3,178,954 (This represents amount receivable from customer against margin loan provided to them) Annual Report 2020 International Leasing  201

Amount in Taka December 2020 December 2019 7.00 Other assets A. Income generating: Interest receivable on TDRs 5,340,625 5,417,780 Receivable from EPF of ILCL 914,982 959,430 B. Non-income generating: 6,255,607 6,377,210 Advance, deposit and prepaid expenses (note- 7.01) Advance corporate tax 200,000 200,000 Tax deducted at source 104,022 1,505,626 Deferred tax asset/(liability) (note-7.02) 4,620,895 5,582,639 Advance office rent-Hossain Tower 4,335,582 4,352,584 Receivable from broker 516,143 1,401,011 242,554 Total other Assets (A+B) 10,019,196 563,707 16,274,803 13,605,567 19,982,777 7.01 Advance, deposit and prepaid expenses 200,000 200,000 Security deposit CDBL 200,000 200,000 7.02 Deferred tax asset/(liability) 12,903,588 13,470,129 Tax base of fixed assetes 1,342,035 1,863,238 Carrying values of fixed assets as per accounts (Taxable)/ deductible temporary difference 11,561,552 11,606,891 Applicable tax rate 37.5% 37.5% Deffered tax during the year 4,335,582 4,352,584 8.00 Payable to customers 1,266,718 2,528,545 (This represents amount payable to customer against sale of share and/or receipts for purchase of shares.) 9.00 Other Liabilities and provisions 7,112,409 9,423,537 Provision for income tax (Note-9.01) 35,447 31,790 Provision for margin loan 7 7 Unpaid dividend Liability for expenses (Note-9.02) 2,358,456 1,020,882 Fund block account- IPO 211,000 - 9,717,319 10,476,216 202 Annual Report 2020  International Leasing

Amount in Taka December 2020 December 2019 9.01 Provision for income tax Opening balance Less: Settlement of tax liability 9,423,537 4,618,127 Add: Tax provision during the year (Note-18.00) (3,121,682) - 810,554 4,805,410 7,112,409 9,423,537 9.02 Liability for expenses & other payables Audit fee Software license fee 46,000 51,750 Payable to broker 916,988 916,988 Other payable Withholding Tax and VAT 16,757 45,341 Suspense Account 1,204 1,293 Intercompany Payable 2,400 5,000 510 19,503 - 1,355,605 2,358,456 1,020,882 10.00 Share capital 2,000,000,000 2,000,000,000 Authorized capital 20,000,000 nos. of ordinary shares of taka 100 each 10.01 Issued, subscribed & paid up 250,000,000 250,000,000 2,500,000 nos. of ordinary shares of taka 100 each fully paid. 250,000,000 250,000,000 Composi�on of shareholdings 100 Amount 100 249,999,900 Par�culars No. of shares 249,979,900 100 a) Corporate 2,499,999 20,000 100 Interna�onal Leasing And Financial Services 2,499,799 100 100 100 100 Ltd. 250,000,000 JF (Bangladesh) Limited 200 b) Individual Mr. Jamal Uddin Ahmad 1 1 Total 2,500,000 The resolution circular no. 01/2015 regarding the decision to transfer of 200 shares of JF (Bangladesh) Limited in the name of Mr. Rashedul Haque, Mr. Saiful Islam Akhand and Ms. Nahida Runai has been approved in the 34th Board Meeting held on 27 October, 2015 and the then Board advised the manage- ment to take necessary steps to complete the transfer process. Since the shares have not been legally transferred in the above mentioned name until the financial statement date, we have shown the sharehold- ing position as per the Shedule X in the current year. Annual Report 2020 International Leasing  203

Amount in Taka December 2020 December 2019 11.00 Retained Earnings 8,290,299 (2,421,764) (7,528,382) 10,712,064 Opening balance Add. Profit after tax for the year 761,918 8,290,299 Closing balance 12.00 Net asset value per share Total assets Total liabilities 256,350,779 249,467,766 Net asset 10,984,037 13,004,761 Number of share outstanding Net asset value per share 245,366,742 236,463,006 2,500,000 2,500,000 98.15 94.59 13.00 Interest income Interest income from TDRs Interest income from savings account 1,291,434 21,870,037 Interest income margin loan 253,365 299,542 506,885 686,439 2,051,684 22,856,018 14.00 Commission, fees and charges BO account maintenance fee Management fee 28,650 38,049 Commission 45 1,504 CDBL Charge - income Settlement transfer fees - Income 389,675 614,992 PIA processing charge 734 66 - 15.00 Income from own investment 575 2,082 Realized gain from investment 285 Dividend income 419,680 656,978 16.00 Salary and allowances (3,493,749) Basic salary and other allowances 1,895,111 2,883,601 Staff provident fund (1,598,639) 607,735 1,993,533 3,491,336 98,663 4,329,817 2,092,196 211,757 4,541,574 204 Annual Report 2020  International Leasing

Amount in Taka December 2020 December 2019 17.00 Rent, taxes, insurance, electricity etc. Office rent Electricity and utility 2,980,823 3,391,971 930,948 1,070,035 4,462,006 3,911,771 18.00 Provision for income tax 810,554 4,805,410 17,003 456,511 Total provision for income tax during the year Adjustment for deferred tax (income)/expense 827,557 5,261,921 Tax Expenses 19.00 Postage, stamp & telecommunication Telephone Internet 46,678 69,248 Courier 91,800 97,800 20.00 Stationery, printing and advertisements 800 370 Printing and stationery 139,278 167,418 21.00 Directors' fees & meeting expenses 17,168 28,666 Directors' fee for attending board meeting 17,168 28,666 57,500 103,500 57,500 103,500 22.00 Auditors' fees 46,000 46,000 - 5,750 Statutory audit fee Other Audit fees 46,000 51,750 23.00 Depreciation, amortization and repair of assets a) Depreciation - (Annexure-1) Motor Vehicles - - Office Decoration 492,296 492,297 Office equipment Furniture & Fixtures - 2 Computer & accessories 1 7,041 28,906 48,152 b) Repairs 521,203 547,492 Vehicles Computer, office equipments etc. - - 1,000 7,475 Total (a+b) 1,000 7,475 522,203 554,967 Annual Report 2020 International Leasing  205

Amount in Taka December 2020 December 2019 24.00 Other expenses 5,413 12,309 Office maintenance 536,872 448,700 Fees and subscription 193,678 202,184 Bank charges Entertainment 2,353 9,517 Traveling and conveyance expenses 20,920 47,290 Training expenses CDBL charges - 2,000 Loss on sale of fixed assets 24,543 31,900 458,000 25.00 Provision for margin loan and commission - 1,211,900 Provision for/ (release of provision for) margin loan 783,778 Provision for/ (release of provision for) commission (32,538) 3,657 (58,897) - (91,434) 3,657 26.00 Provision for unrealized loss on own portfolio investment Unrealized Gain/(Loss) on investment (31.12.2020 / 31.12.2019) (5,395,176) (21,827,294) (13,048,076) Unrealized Gain/(Loss) on investment (31.12.2019 /31.12.2018) (21,827,294) (8,779,218) Provision (Increased) /Released 16,432,118 27.00 Earnings Per Share (EPS) Basic earnings per share Earning attributable to ordinary shareholders (profit after tax) (7,528,382) 10,712,064 Number of ordinary shares outstanding during the year 2,500,000 2,500,000 Earnings per share 4.28 (3.01) 28.00 Events after statement of financial position date: There is no significant event after the statement of financial position date. 206Annual Report 2020  International Leasing

IL Capital Limited Schedule of fixed assets As at December 31, 2020 Annexure-A Fixed assets including premises, furniture & fixtures COST DEPRECIATION Wri�en down value Par�culars As at January Addi�on Adjustment As at Rate As at January Charged Adjustment As at Motor Vehicles 01, 2020 during the during the December (%) 01, 2020 during the during the December as at December Year Year 31, 2020 Year Year 31, 2020 31, 2020 --- - 20% - - - - - Annual Report 2020 International Leasing  207 Office Decora�on 19,148,469 - - 19,148,469 15% 17,343,381 492,296 - 17,835,677 1,312,791 Office equipment 474,379 - - 474,379 20% 474,379 - - 474,379 - Furniture & Fixtures 815,021 - - 815,021 15% 815,020 1 - 815,021 - Computer & accessories 4,595,186 - - 4,595,186 33% 4,537,036 28,906 - 4,565,942 29,244 Total as at Dec 31, 2020 25,033,055 - - 25,033,055 23,169,817 521,203 - 23,691,020 1,342,035 Total as at Dec 31, 2019 27,769,556 85,999 (2,822,500) 25,033,055 23,186,825 547,492 (564,500) 23,169,817 1,863,238

208 Annual Report 2020  International Leasing IL Capital Limited Schedule of Investment in Shares (Own Portfolio) As at December 31, 2020 Instrument Name Total Quan�ty Average Cost Total Cost Market Price Market Value Annexure-B CRYSTALINS 10,879 10.00 108,790.00 39.40 428,632.60 Unrealized DOMINAGE 1 10.00 10.00 34.50 34.50 Gain/(Loss) EPGL 46.00 46.00 LRBDL 128,200 30.00 5,897,200.00 30.00 5,897,200.00 319,843 MERCANBANK 233,300 22.42 6,999,000.00 12.70 6,999,000.00 25 ROBI 1,150,000 10.00 25,785,386.25 29.80 14,605,000.00 - SEAPEARL 271,121 2,711,210.00 79.10 8,079,405.80 - SEMLIBBLSF 9.53 10.40 WMSHIPYARD 1,865 13.03 17,764.17 11.70 147,521.50 (11,180,386) 30,002 11.61 390,806.05 312,020.80 5,368,196 512,500 5,950,074.78 5,996,250.00 129,757 47,860,241 42,465,065 (78,785) 46,175 (5,395,176)

Letter of Transmittal All Shareholders, Bangladesh Bank, Registrar of Joint Stock Companies and Firms, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited, and Chittagong Stock Exchange Limited. Dear Sir(s): ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2020. We are pleased to enclose a copy of the Annual Report together with the Audited Financial Statements including Consolidated and Separate Balance Sheet as at December 31, 2020 and Income Statements, Cash Flow Statements and Changes in Equity Statements for the year ended December 31, 2020 along with notes thereon of International Leasing And Financial Services Limited and its subsidiaries (International Leasing Securities Limited and IL Capital Limited) for your kind perusal and record. Thank you, Yours sincerely, Md. Asaduzzaman Company Secretary (CC) Annual Report 2020 International Leasing  209

\"NOTICE OF THE 25th ANNUAL GENERAL MEETING OF INTERNATIONAL LEASING AND FINANCIAL SERVICES LIMITED (ILFSL)\" Dear Shareholders, Greeting from ILFSL Please be informed that the 25th Annual General Meeting (AGM) of International Leasing and Financial Services Limited will be held on Thursday, December 30, 2021 at 11.00 a.m. at digital platform (Meeting Link- http://ilfsl.digitalagmbd.net ) to transact these following businesses: A 2021-25-01 : To receive and adopt the Directors’ Report, Auditors' Report and Audited Financial Statements for the year ended December 31, 2020. A 2021-25-02 : To declare dividend for the year ended 31st December 2020 as recommended by the A 2021-25-03 Board of Directors. A 2021-25-04 : To elect Directors in place of those who shall retire by rotation under the provision of Articles of Associations of the Comply. A 2021-25-05 A 2021-25-06 : To appoint Auditors for the term until the next Annual General Meeting and fix their remuneration. : To appoint Compliance Auditors as per Corporate Governance Code. : To transact any other business with the permission of the Chairman. “All Shareholders of the Company are requested to kindly attend the Meeting accordingly” Notes: i) The record date is fixed on December 08, 2021. The Shareholders, whose names will appear in the Share Register of the Company at the close of the business on the record date will be eligible to attend the meeting and get Dividend. ii) The Board of Directors has recommended no Dividend. iii) Members entitled to attend and vote at the Annual General Meeting may appoint Proxy to attend and Vote on their stead. The Proxy Form must be affixed with requisite revenue stamp and must be submitted to the Registered Office/Corporate Office of the Company or emailed to [email protected] not less than 48 hours before the time fixed for the Annual General Meeting. iv) Pursuant to Notification No. BSEC/CMRRCD/2006-158/208/Admin81 dated June 20, 2018 of the Bangladesh Securities and Exchange Commission (BSEC); soft copy of the Annual Report 2020 shall be sent to the shareholders respective email addresses as is available in the Beneficiary Owner (BO) Account on the record date. Soft copy of the Annual Report 2020 will be also avail- able at the Company’s website at www.ilfsl.com v) Members entitled to attend and vote at the Annual General Meeting will be able to submit their question(s)/comment(s) and cast their votes electronically through the web link http://ilfsl.digita- lagmbd.net starting from 24 hours before commencement of the AGM and during the AGM. For logging into the virtual AGM the members need to put their 16 digit Beneficiary Owner (BO) Account number and other credentials as proof of their identity. The link also sent/be sent to the email addresses of the respective shareholders. vi) No benefit or gift in cash or kind shall be given to the shareholders for attending the 25th Annual General Meeting as per Bangladesh Securities and Exchange Commission’s Circular No. SEC/CM- RRCD/2009-193/154 dated October 24, 2013. Regards, Md. Asaduzzaman Company Secretary (CC) 210 Annual Report 2020  International Leasing

A Financial Institution that Cares PROXY FORM I/We ....................................................................................................................................................................................................... of............................................................................................................................................................................................................. being a Member of International Leasing And Financial Services Limited, hereby appoint Mr./Ms .....................................................................................................of........................................................................................ as my proxy in my absence to attend and vote for me and on my behalf at the 25th Annual General Meeting of the Company to be held on December 30, 2021 at 11:00 am on Digital Platform and at any adjournment thereof. As witness my hand this of .........................................................................................................Day of December 2021 Signature of Proxy of ..................................................................................................................................................................... Signature of Member .................................................................................................................................................................... Register folio no./BO ID of Member Tk. 20/- Revenue Stamp ATTENDANCE SLIP Mr./Ms............................................................................................................................................ Register folio no./BO ID of Member I hereby record my presence at the 25th Annual General Meeting of the Company to be held on December 30, 2021 at 11:00 am on Digital Platform. Signature N.B. The Member attending the meeting is kindly requested to mention the registered name and folio no./BO ID on this slip and present the same at the registration counter on the day of the meeting. Annual Report 2020 International Leasing  211

SHAREHOLDERS' NOTE : 212Annual Report 2020  International Leasing



A Financial Institution that Cares DR Tower (13th Floor) 65/2/2, Bir Protik Gazi Golam Dostogir Road Purana Paltan, Dhaka-1000, Bangladesh. Tel: + 880-2-223381228, 223353485 Fax: +880-2-223381227 www.ilfsl.com YOUR MONEY MANAGER YOUR INVESTMENT MANAGER Hossain Tower (1st Floor) Hossain Tower (2nd Floor) 116, Bir Protik Gazi Golam Dostogir Road 116, Bir Protik Gazi Golam Dostogir Road (Culvert Road) Naya Paltan, Dhaka-1000, Bangladesh. (Culvert Road) Naya Paltan, Dhaka-1000, Bangladesh. Tel: + 88-02-9344093 Tel: + 88-02-58315389 Fax: +880-2-9343841 Fax : 02-58315387 www.ilfslbd.com www.il-capital.com