INDUCTION REPORT

FINANACE HOUE INTERNAL AUDIT Dated: 13/08/13 - 15/08/13

Submitted By: Munaaf Mohammad IT AUDITOR

Submitted To: Head of Internal Audit

INDUCTION REPORT

Table of Contents 1. Executive Summary.........3 2. Induction Plan..4

Executive Summary:
Induction Program was scheduled for three days from dated 13/08/2013 till 15/08/2013,introduction program about the various departments and operations within Finance House were conducted and they are summarized in this report under different headings. The induction program was concluded on 15th Aug 2013 and this report is included the abstract of all the presentations given by different department heads. Finance House was established as one of UAE's first "independent" finance companies. We commenced operations in July 2004, and our principal activities consist of investments, consumer and commercial financing. These business lines constitute the engines for the company's continued growth. Finance House P.J.S.C is the first independent finance company to be established in the UAE. Finance House is an innovative entity that respects the diversity of the UAE market and offers tailored and therefore unique financial products and solutions and provides a healthy competition to the existing financial sector. The competitive edge that Finance House offers is attained through the adoption of strong and well-planned strategies, focusing on reducing costs and offering comprehensive services to compete and fill gaps in the UAE market. From another perspective Finance House is endeavoring to be a successful national company that gives high returns to its shareholders, creates better employment opportunities and contributes exceptionally to the economic development of the UAE. The company mission is to be responsive to our clients needs and provide them with an exceptional financial experience through knowledgeable and dedicated staff.

Induction details:
First Day: On 13th Aug 2013, at 10:00 am Mr. Norman Aziz Mir (Strategic planning) introduced about the organization setup and the product knowledge of the strategic planning department. A brief introduction of the commencement of work, the strategic planning of the current products of Finance house in the market and spoke about the functioning of the department .He emphasized on the market value of the products in UAE region and differentiated between the major, medium and the minor revenue generated range of products in Finance house. Apart from the product knowledge, he delivered some speech on the way a product is rolled out in market and how well on basis on strategic analysis the same product is run in the market keeping abreast the competition in the certain area. Apart from product knowledge, the most valuable part was the special tips given by him, which certainly will help improvising the product list and the revenue in the company by highlighting the week areas and ruling out the potential areas. On 13th Aug 2013, at 10:30 am Mr. Aftab (Head of Operations) revealed information about the various divisions he oversees and highlighted the hierarchy of the department processes and their working. It was knowledgeable discussion in which he made me aware of the core banking functionalities and the integrated processed. He expressed expert comments on some complicated and critical issues with the financial industries in UAE. I was made aware of the all the working functionalities as how the processes are interlinked and the management of such products. He also emphasized on the week areas and is trying best to get the desired results in terms of revenue. I learned the organizational setup and the key process areas such as credit division, advances, financial jargons etc.

Another Lecture was conducted on 13th Aug 2013 by Mr. J Mohan (Head of Credit Administration) and spoke about the allocations of finance for different set of assets and liabilities over a period of time under the conditions of the certainty and uncertainty. He gave a gist of the product knowledge and covered the department functioning. He spoke about the finance house as a company and highlighted the potential areas, which need to be given attention to boost for better revenue, and also provided some information about the hot sellers under credit division department. Same day, on 13th Aug, I happened to meet Mr. Khalid (Head Trade Finance) and he spoke about the working structure of the Trade Finance .He made me understood the letter of Guarantee, Letter of credit and the associated bonds through which a customer deals with. He explained the various aspects of Trade finance and spoke about the difference between the letter of guarantee and the letter of credit. I learned that how a customer deals with a finance company to avail trade financing of goods locally and internationally. I was made aware about the different processes, which Finance house follows and receives in a contract management. He explained as how clients issue the tender bonds, labor bonds and how our company works closely with the client till the completion of a certain project. He spoke about the different charges other than fixed charges in any international or national trade financing of goods or materials. Overall, it was informative and also he informed of the circumstances in which the suspension of project may be ordered or to revoke the same suspension.

Second Day: On 14th Aug 2013, I went to see Mr. Yusuf (Manager-Retail Finance) and was informed about the products currently in the market e.g. Payday cards, Loans, credit cards, etc. He spoke about the running

products in the company and the best practices associated with them. It was a small discussion about the mortgaging and auto finance topics which as per him are currently on hold, though there is a provision to roll them .The reason provided was high interest rates and the non competitive margins which has led fianc house to put certain products on hold. He covered the different types of credit and payday cards, salary loans etc. Retail Financing activities provide a powerful and complementary extension to he Commercial and Corporate lending activities, with diversified risk and reward Characteristics. Finance House offers a broad spectrum of retail finance products, such as: Credit Cards Executive Finance Auto Finance (Currently on Hold). Home Finance Commercial and corporate finance, On second day 14th Aug 2013, I met Mr.Nariman Kaarbaari (Head Corporate communications) and had explanatory discussion about the marketing techniques and the product knowledge .He explained as how Finance house offers complete and comprehensive range of products from personal, trade finance, commercial and corporate finance and the treasury services. I learned as how marketing is carried out and the customer is approached with finance house catering to their financial obligations. This was an interesting discussion and took me through the various pros and cons within the working procedures .He explained about the market setups also. Commercial and Corporate Finance arm sees continued potential for significant organic growth in the UAE. Finance House offers the following complete and comprehensive range of products and customized solutions for discerning businesses: 1. Letters of credit 2. Letters of guarantee

3. 4. 5. 6. 7. 8. 9.

Trust receipts Bills discounting Term loan & Overdrafts Equipment & Contractor finance Mezzanine finance Project finance Syndicated loans

Aug 15th 2013, Risk management headed by (0) another department, which assess the finance house credit approval and monitoring function. It looks at how risky transactions are going to be, and whether theyre really worth that risk. For example, it will set the levels of risk-adjustment on credit arrangements in other words, lending to a company with a poor credit rating will probably mean setting a high level of interest on the loan (to cover the inherent risk). This is a really important element of the banks business - managing the credit risk is vital. Third Day: On 15th Aug 2013, I met Mr. (0). FH securities, an important element in the finance industry and is headed by Mr. due to the nonavailability of the head as were busy in meetings, I managed to meet Mr. (0) who in a short introduction spoke about the FH securities as how department issues special brokerage solutions through efficient and secure back office administration.

On 15th Aug 2013, 4:00 PM Mr, (0) met me at Islamic Finance House, as this was the last introductory session covered as a part of my induction schedule and was also an informative. FH Islamic Finance House provides Shari a Compliant Solutions and Financial Services to individuals and corporate commercial clients. The main products which finance house covers are: 1. Covered card (sharia complaint card)

2. Yasser 3. Ijara 4. Istisinaa. This was followed by a group discussion in which the management highlighted the current issues with the working structure for Islamic Finance house and wants most of the current systems to be automated.