Sarulia Bazar Branch Information: UNITED COMMERCIAL BANK LIMITED

As on 30.06.2017 (Fig. in Crore Tk.) SME DIVISION

Deposit : 67.93
Corporate Office, Gulshan, Dhaka
Deposit Mix : High Cost: 29.59(43%)
Low Cost: 32.50(48%)
No Cost: 5.84 (9%)
Advance : 42.84
CL : Nil
WOL : Nil
Profit : 1.1736
Manpower : Exec/Off-12, Staff-3

Office Note: Date: 19.07.2017

Account : M/s. Masud Trading & Co. Key Person : Mr. Md. Masud Al Mahamud, Proprietor
Branch : Sarulia Bazar Head of Branch : Mr. Md. Kawser Jamil, VP [IP: 813001]

Subject : Review proposal for issuance of 01 (one) no. of Bank Guarantee (Payment Guarantee) Specific of Tk.30.00 Lac only
at 30% cash margin & @0.40% commission per quarter for the period of 01 year from the date of issuance in favor of
Shah Cement Industries Ltd.; A/c: M/s. Masud Trading & Co., a customer of Sarulia Bazar Branch, Dhaka.

Background of the issue:

On 03.05.2017, the proposal was placed before Management for issuance of 01 (one) no. of Bank Guarantee (Payment Guarantee)
Specific of Tk.30.00 Lac only at 30% cash margin & @0.40% commission per quarter for the period of 01 year from the date of
issuance in favor of Shah Cement Industries Ltd. on account of M/s. Masud Trading & Co. The Management has declined the
proposal and Branch was informed accordingly.
Branch has informed that the customer is engaged in wholesale & retail business of rod & cement items since 2007. Now, they want to
procure cement from Shah Cement industries Ltd. on credit and for this purpose they have approached the Branch for issuance of 01 no.
of Bank Guarantee (Payment Guarantee) Specific of Tk.30.00 Lac at 30% cash margin for the period of one year.
At present, the customer is availing a CC(H) Limit of Tk.90.00 Lac and 01 (one) no. of Bank Guarantee (Payment Guarantee) Specific
of Tk.30.00 Lac at 10% cash margin in favor of BSRM Steels Limited.
Under the above circumstances, the Branch has recommended to review the proposal for issuance of 01 (one) no. of Bank Guarantee
(Payment Guarantee) Specific of Tk.30.00 Lac only at 30% cash margin & @0.40% commission per quarter for the period of 01 year
from the date of issuance in favor of Shah Cement Industries Ltd. on account of M/s. Masud Trading & Co.

Details:
1. Name & Address of : M/s. Masud Trading & Co.
the Firm Showroom & Godown Address:
Boro Vanga, Sarulia, Demra, Dhaka-1361.
[Showroom size: 120 sft. (Rental) & Godown size: 140 sft. (Rental)]
2. Legal Status : Proprietorship Concern.
3. Year of Establishment : 2007
4. Personal Net Worth : Tk.445.00 Lac (as declared by the customer)
5. Date of Account Opened : 25.02.2013
6. Borrowing Relationship : Since 2013
7. Nature of Business : Wholesaler & retailer of Rod, Cement etc.

8. (a) Existing and proposed credit facilities with UCBL in the name of the customer: (Fig. in Lac Tk.)
Existing facility Proposed facility
Collateral
Date of Security
Nature Limit O/S Expiry Limit Validity Coverage
Creation
Hypothecation of stocks &
BG(Payment bills receivables in trade.
Guarantee) -- -- -- -- 30.00 01 year [Present stock is valuing
Maximum
Specific Tk.220.00 Lac and bill
receivables is Tk.90.00 Lac Allowable Limit
as on 17.07.2017]. against
Counter guarantee. collateral:
(7.83) Tk.120.60 Lac
CC(H) 90.00 -- 31.01.18 90.00 31.01.18 30% cash margin against
Cr. Bal.
proposed BG(PG). &
10% cash margin against Margin:
existing BG(PG). Tk.12.00 Lac
BG(Payment Existing R/M of 7.50
Guarantee) 30.00 30.00 25.11.14 24.11.17 30.00 24.11.17 decimals land, located Proposed Limit:
Specific within Dhaka South City F: Tk.90.00 Lac
Corporation area, valuing NF: Tk.60.00 Lac
Funded 90.00 -- -- -- 90.00 -- Tk.177.37 Lac [MV] and
Non- Tk.150.75 Lac [FSV].
30.00 30.00 -- -- 60.00 --
funded
L&B: Tk.150.75 Lac [FSV]
Total 120.00 30.00 -- -- 150.00 -- --
Margin: Tk.12.00 Lac
Note: It is pertinent to mention here that as per credit approval authority, the Managing Director of the Bank can allow Bank Guarantee
(Payment Guarantee) Specific of Tk.100.00 Lac without collateral support.

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 A/c: M/s. Masud Trading & Co., Sarulia Bazar Branch, Dhaka.

(b) Existing credit facilities with other Bank in the name of the customer: Nil

(c) Existing credit facilities with UCBL in the name of sister/allied concern(s): Nil

9. CIB Status: As per CIB report dated 27.04.2017: (Fig. in Lac Tk.)
Nature of Funded Non-funded Bank/
Account Name Role Status
Facility Limit O/S O/D Limit O/S O/D FI
Bhai Bon Rice Agency Borrower CC(H) 90.00 0.00 -- -- -- -- UC UCBL
*Existing BG(Payment Guarantee) of Tk.30.00 Lac is not showing at the CIB report due to non-reporting/misreporting of the branch.
Branch has been advised to report correctly and to be obtained updated CIB report immediately.
Special Condition: Updated fresh & clean CIB report to be obtained immediately.

10. Account Performance: (Fig. in Lac Tk.)

Particulars CC(H) A/c. - [UCBL] SND A/c. - [UCBL] Total
Period 18.07.2016 17.07.2017 --
Limit 90.00 -- 90.00
Debit Summation 1395.60 0.00 1395.60
Credit Summation 1404.33 0.00 1404.33
Outstanding/Balance (8.73) [Cr. Bal.] 0.00 --
Recycle 15.60 times -- 15.60
Adjustment 03 times -- --

11. Particulars of the Proprietor:

Present & Permanent Personal net Worth
Name Education Experience
Address [as declared by the customer]
Mr. Md. Masud Al Mahamud (37 years)
Vill-Sarulia, West Tengra,
S/o. Md. Lokman Hossain & Mrs. Shahanara M.Com. 09 years Tk.445.00 Lac
PS-Demra, Dist-Dhaka.
Begum.

12. Brief background of the customer:

M/s. Masud Trading & Co. is a proprietorship concern and engaged in wholesale & retail business of rod & cement items since
2007. Mr. Md. Masud Al Mahmud alias Md. Masud Alam is the proprietor of the firm. He is also an authorized dealer of BSRM
Steel Ltd.
On 26.01.2014, the Management of the Bank has allowed a CC(H) Limit of Tk.70.00 Lac for the period up to 31.01.2015 on
account of M/s. Masud Trading & Co.
On 27.11.2014, the Management of the Bank has allowed a Bank Guarantee (Payment Guarantee) Specific of Tk.30.00 Lac at
10% cash margin & @0.60% commission per quarter for the period of 01 year in favor of BSRM Steels Limited on account of
M/s. Masud Trading & Co.
On 26.01.2015, the Management of the Bank has approved the renewal with enhancement of CC(H) Limit from Tk.70.00 Lac to
Tk.90.00 Lac for the period up to 31.01.2016.
On 24.11.2015, the Management of the Bank has approved the extension of the validity of the Bank Guarantee (Payment
Guarantee) Specific of Tk.30.00 Lac at 10% cash margin & @0.40% commission per quarter in favor of BSRM Steels Limited
for the period up to 24.11.2016.
On 26.01.2016, the liability of CC(H) Limit of Tk.90.00 Lac has been renewed for the period up to 31.01.2017.
On 21.11.2016, the liability of CC(H) Limit of Tk.90.00 Lac has been renewed for the period up to 31.01.2018 and the validity of
the liability of Bank Guarantee (Payment Guarantee) Specific of Tk.30.00 Lac at 10% cash margin has been extended for the
period up to 24.11.2017.
Present approach of the customer:
Now, the customer informed the Branch that they would like expand their business and in this purpose they would like to start
dealership of Shah Cement Industries Ltd. and approached the Branch for issuance of Bank Guarantee (Payment Guarantee) for
the period of one year.

13. (a) Audit Objections: All audit objections has been rectified as confirmed by branch.

(b) Documentation Status: Branch furnished SPC dated 15.11.2016 & also furnished a certificate complying Instruction Circular No.
1123 dated 19.06.2012 as follows-
Sl. Particulars Remarks
1. The property under mortgage is in prima facie possession of the owner and is in safe existence. Since Complied
2. The valuation of the property as done earlier by the branch officials as well as enlisted surveyors is in consistent
Since Complied
with the prevailing market price and force sale value.
3. All deed and documents relating to the mortgaged property have taken properly in terms of credit sanction
Since Complied
advice and the same are in the safe under joint custody at the branch.
4. All the irregularities detected by internal/external Auditors/Inspectors in respect of the mortgage property have
Since Complied
been mitigated.

14. Credit Risk Grading (CRG):

As per financials dated Aggregate Score Corresponding Grade Short Name Numeric Grade
31.12.2016 84.00 Acceptable ACCPT 3

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 A/c: M/s. Masud Trading & Co., Sarulia Bazar Branch, Dhaka.

15. Financial Information: (Fig. in Lac Tk.)

Particulars 2015 2016 2017 (Projected)
Total Sales 1100.00 1300.00 1500.00
Gross Profit 165.00 195.00 225.00
Net Profit 97.00 123.00 143.00
Total Asset 328.00 400.00 478.00
Total Liabilities 100.00 100.00 100.00
Net Worth 228.00 300.00 378.00
Major Ratios:
Gross Profit Margin (%) 15.00% 15.00% 15.00%
Net Profit Margin (%) 8.82% 9.46% 9.53%
Current Ratio 2.65 3.15 3.73
Quick Ratio 0.85 1.15 1.53

16. Assessment of Credit Need/Working Capital: (Fig. in Lac Tk.)

Sales for the Next Year [Projected] 1500.00
COGS 1275.00
Inventory 220.00
Receivable 83.00
Payable 10.00
Inventory turnover in days [Inv/COGSx360] 63 days
Receivable turnover in days [Rec/Sales x 360] 20 days
Payable turnover in days [Payable/COGSx360] 3 days
Cash Cycle [Inv+Rec-Pay] turnover in days 80 days
Working Capital Requirement [COGS/360 x CC] 283.33
Existing Loan for Working Capital from UCBL [CC(H)+BG(Payment Guarantee)] (42.35%) 120.00
Proposed Loan for Working Capital [BG(Payment Guarantee)] (10.59%) 30.00
Equity/Margin (47.06%) 133.33

17. Details of the Proposed Credit Facility:

Nature of the Facility : Bank Guarantee (Payment Guarantee) Specific - [New Sanction]
Purpose : To purchase/procure goods on credit from Shah Cement Industries Ltd.
Amount : Tk.30.00 Lac (Taka Thirty Lac) only.
Margin : 30% in cash.
Rate of Commission : 0.40% per quarter.
Validity / Expiry : 01 (one) year from the date of issuance.
Mode of Adjustment : (a) By return/ cancellation/ reverse of original BG on or before its maturity duly released by concern
authority or by cash from own sources of the customer if claimed lodged by its beneficiary.
(b) Also Instruction Circular No. 962 dated 10.02.2010 to be followed.
Primary Security : Counter Guarantee of the customer covering the guarantee amount.
Existing registered mortgage of land and building against CC(H) limit of Tk.90.00 Lac shall be
tagged and any security shall not be released until adjustment of all liability of the customer.
Support Security : 30% cash margin.
Post-dated MICR Cheque covering the limit favoring the Bank through an undertaking to the effect that this
has been provided by the borrower for repayment purpose.
Personal guarantee of the mortgagor to be obtained.
Personal guarantee of the spouse of the proprietor and their adult children (if any) to be obtained.
Usual charge documents duly signed, stamped & filled in.

18. Details of Collateral Security:

Existing registered mortgage of 7.50 decimals (750 ajutangsha or 5 katha) land, having road access, owned by (i) Mr. Md. Masud Al
Mahamud alias Md. Masud Alam (proprietor of the firm), & (ii) Mrs. Shahanara Begum (mother of the proprietor) , located at
District-Dhaka, Police Station & Sub-Registrar Office-Demra under Dhaka Collectorate Touzi, JL Nos: CS-328, SA-165, RS-37, Dhaka City
Survey-36, Mouza-Sarulia, Khatian Nos: CS-567, SA-766, RS-424, Dhaka City Survey-2024, SA Mutation Khatian No-766/1-5, Dhaka City
Survey Jote No-2024, Plot Nos: CS & SA-122, RS-109, Dhaka City Survey-1241, within Dhaka South City Corporation area, will
continue.

Value of the Property: (Fig. in Lac

Tk.)
Assessed by Branch Assessed by City Engineering Consultants
Property (As on 20.12.2013 & 15.11.2016) (As on 15.11.2013)
MV FSV MV FSV

7.50 decimals land 177.37 150.75 177.37 150.75

19. Succession Information:

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 A/c: M/s. Masud Trading & Co., Sarulia Bazar Branch, Dhaka.

Name Age Relationship Education Profession

Motaharat Akter Bhuiyan 32 years Wife MBA Service

20. Observations:
The proprietor has 09 years of experience in this line of business.
The customer started their borrowing relationship with UCBL since 2013.
Turnover in the CC(H) A/c. with UCBL is Tk.1404.33 Lac, Recycle is 15.60 times, and Adjustment is 03 times against CC(H) A/c. in
the last one year.
Based on the provided financial information, it is found that the proposed loan (i.e. Tk.150.00 Lac) is 52.94% of total working
capital requirement of Tk.283.33 Lac.
Credit Risk Grading (CRG) is found acceptable.
Value of the collateral property is Tk.150.75 Lac (FSV) against the proposed facilities. Maximum allowable limit is Tk.120.60 Lac.
Proposed funded limit is Tk.90.00 Lac and non-funded limit is Tk.60.00 Lac. It is pertinent to mention here that as per credit
approval authority, the Managing Director of the Bank can allow Bank Guarantee (Payment Guarantee) Specific of Tk.100.00 Lac
without collateral support.

21. Recommendation of the Branch:

Branch recommended to review the proposal for issuance of Bank Guarantee (Payment Guarantee) of Tk.30.00 Lac only at 30% cash margin in
favor of Shah Cement Industries Ltd. for the period of 01 year from the date of issuance on account of M/s. Masud Trading & Co.

22. Recommendation of the Division:

Considering the detailed above, recommendation of Branch, the Review proposal for issuance of 01 (one) no. of Bank Guarantee
(Payment Guarantee) Specific of Tk.30.00 Lac only at 30% cash margin & @0.40% commission per quarter for the period of
01 year from the date of issuance in favor of Shah Cement Industries Ltd.; A/c: M/s. Masud Trading & Co., a customer of
Sarulia Bazar Branch, Dhaka, is placed for approval.

Level of Approval: The proposal is within the delegated business power of Managing Director of the Bank.

_______________________ _______________________ ___________________________

Mahfuzur Rahman Md. Rofiquil Monowar Md. Abdul Mannan Chowdhury
SO AVP SVP, SME(CRM)

_______________________
Golam Awlia
DMD (SME)

Submitted for kind approval,

__________________________
Managing Director (Acting)

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