Implementation of Land Border Treaty. Foreign Remittance In last 3 years, ABL secured top position in bringing foreign remittance among the SCBs.

Transcription

1 Implementation of Land Border Treaty ABL appreciates the ongoing implementation of our Land Border Treaty, 1974 with India & keen to provide Agri-SME & CSR support to the people of the chitmahals. Foreign Remittance In last 3 years, ABL secured top position in bringing foreign remittance among the SCBs. Construction of Padma Bridge The Padma Bridge will play a vital role in developing Bangladesh Economy where ABL is providing foreign currency. Highest Electricity Production Govt. s top priority to the power sector led to the highest production of electricity. ABL provides support in Quick Rental and other projects. Great Victory in the Sea Settlement of sea boundary with Myanmar & India opened multifaceted prospect of economy where ABL is looking to finance in sea fishing & sea based programs.

2

3 Table of Contents Contents Page No. Glossary of Acronyms 9 District-wise Number of Branches in Map 12 Corporate Profile 13 Vision, Mission, Motto, Values 14 Strategic Objectives, Ethical Standards 18 Notice of the Eighth Annual General Meeting 19 Letter of Transmittal 20 Growth of Agrani : Key Indicators from 1972 to Chairmans of the Board from 1972 to Managing Directors from 1972 to Board of Directors 24 Executive Committee, Audit Committee, Risk Management Committee of the Board 26 Board of Trustees of ABL Employees Provident Fund 27 Auditors, Credit Rating Company, Income Tax Advisor, Legal Consultant, Chief Medical Officer 27 Management Team 28 Five Years Performance at a Glance 32 Spotlight of ABL s Participation and Contribution to the Nation : A Count of the Year Graphical Presentation of Performance 36 Chairman s Message 39 Managing Director & CEO s Overview 43 Shareholders' Information 46 Picture of Signing of Accounts 47 Financial Highlights of 2014 and Key Ratios 49 Graphical Presentation of Key Financial Information 50 Capital Adequacy 53 Value Added Statement 54 Economic Impact Report 55 Annual Report 2014 t 3

4 Contents Page No. Products and Services 56 Corporate Governence 59 Bangladesh Bank s Guideline for Corporate Governance 64 Directors Statement of Responsibilities 67 Risk Management 69 Disclosure Under BASEL II 77 Report of Board Audit Committee Internal Control & Compliance of Agrani Bank Limited 93 Human Resource Management & Development 97 Corporate Social Responsibility 103 Green Banking 109 Subsidiary Companies of ABL 113 Directors Report to the Shareholders 119 Macro Economic Scenario of Bangladesh 121 Economic Growth 121 Savings and Investment 121 Export 121 Import 122 Inflation 122 Overseas Employment and Remittance 122 Financial Inclusion 122 Social Security 123 Advancement of Achieving MDGs 123 Highest Electric Production in the Country 123 Padma Bridge 123 Medium Term Prospect of Bangladesh Economy 123 Digital Bangladesh 124 Perspective Plan Shareholder s Equity 126 Funding Structure 126 Asset Portfolio 126 Business Performance 127 Deposits 127 4

5 Contents Page No. Import-Export Business 128 Foreign Remittance Business 128 Asset Quality 128 International Trade 128 Guarantee Business 131 Fund Management and Treasury Operation 131 Investment 132 Loans and Advances 133 Industrial Credit 134 Credit Lines 135 Loan to Power and Health Sector 135 Syndication Financing 135 SME Financing 136 NGO Linkage Program of ABL 136 Foreign Aided Credit Programs of ABL 137 Agriculture and Rural Credit 139 Loan Classification 140 Loan Recovery Activities 140 Financial Performance 142 Total Operating Income and Operating Expenditure 142 Net Interest Income, Operating Profit 142 Capital Adequacy Ratio 143 Automation and Modernization 143 Online Banking 144 Branch Computerization 144 BACH, BEFTN 146 SWIFT, e-gp 146 ATM, Mobile Banking, Agent Banking 147 Distribution of SEQAEP Stipend 148 Online CIB Reporting 149 Credit Rating 149 Annual Report 2014 t 5

6 Contents Page No. Contribution to National Exchequer 150 Preparation of Financial Statements 151 Dividend Declaration 151 Appointment of Auditors 151 Acknowledgements 152 Auditors Report & Audited Financial Statements 153 Auditors Report 154 Consolidated Balance Sheet 156 Consolidated Off Balance Sheet Items 157 Consolidated Profit and Loss Account 158 Consolidated Cash Flow Statement 159 Consolidated Statement of Changes in Equity 160 Consolidated Liquidity Statement 161 Notes to the Financial Statements 162 Highlights on the Overall Activities of the Bank 229 Nostro Accounts outside Bangladesh 236 Details of Advance Tax and Provision of Taxation 237 Fixed Assets Including Land, Buildings, Furniture and Fixtures 238 Islamic Banking Unit of ABL 245 Auditors Report & Financial Statements of Subsidiary Companies of ABL Agrani Equity & Investment Limited 249 Agrani SME Financing Company Limited 279 Agrani Exchange House Private Limited, Singapore 317 Agrani Remittance House Sdn. Bhd., Malaysia 351 Agrani Exchange Company (Australia) Pty. Limited 379 Agrani Remittance House Canada Inc. 389 Head Office Divisions 404 Corporate Organogram of ABL 405 Circles 406 Zones 407 Corporate Branch Offices 408 AD Branch Offices 409 Zone-wise List of Branches 412 6

7 List of Graphs Name of Graphs Page No. District-wise Number of Branches in Map 12 Spotlight Graphical Presentation of Performance 36 Operating Profit & Deposits 36 Net Loans and Advances & Net Asset Value Per Share 36 Cost to Income Ratio 37 Shareholders Equity 37 Non Performing Assets 37 Non Interest Income 37 Key Financial Information 50 Deposit Mix of Advance Deposit Ratio 50 Loans & Advances Matrix of Total Classified Loans in Percentage & Net Classified Loans to Net Loans in Percentage 50 Constituent of Assets 50 Current Ratio 51 Debt Equity Ratio 51 Return on Equity 51 Net Interest margin 51 Capital Adequacy 51 Total Assets 51 Fixed Assets Growth 52 Capital Growth 52 Growth of Advance 52 Growth of Deposit 52 Import & Export 52 Distribution of Value Addition 54 Asset Portfolio 126 Deposit Mix 128 Deposit Mix of 2014 & Country-wise Remittance 129 Investment 132 Sector-wise Position of Loans 133 Annual Report 2014 t 7

8 List of Tables Name of Table Page No. Growth of Agrani : Key Indicators from 1972 to Five Years Performance at a Glance 32 Distribution of Shares 46 Shares held by Directors as on 31 December Financial Highlights 48 Key Ratios 49 Capital Adequacy as per BASEL II 53 Value Added Statement 54 Balance Sheet Exposure : Region-wise 83 Off Balance Sheet Exposure : Region-wise 83 Credit Exposure : Sector-wise 84 Contribution to CSR Activities 107 Green Financing 111 Sources of Fund 126 Asset Portfolio 126 Types of Deposits 127 Country-wise Remittance 130 Item-wise Income of Treasury 131 Investment 2014 and Sector-wise Loans 2014 and Comparative Study of Project Loans 134 SME Financing 137 Recovery Position of Classified and Overdue Loans and Advances 141 Appropriation of Profit 142 Credit Rating 150 Contribution to National Exchequer 150 8

9 Glossary of Acronyms ABL Agrani Bank Limited ABS Agrani Bank Sanchaya Scheme AD Authorized Dealer ADBS Agrani Double Benefit Scheme ADO Asian Development Outlook ADP Annual Development Program AEIL Agrani Equity & Investment Limited AFSL Australian Financial Services Lisence AGEX Agrani Exchange House Private Ltd., Singapore ALCOM Asset-Liability Management Committee ALM Asset-Liability Management AML Anti-Money Laundering AMLC Anti-Money Laundering Committee APS Agrani Bank Pension Shanchaya Scheme ASIC Australian Securities & Investment Commission ATA Anti-Terrorism Act ATM Automated Teller Machine BACH Bangladesh Automated Clearing House BACPS Bangladesh Automated Cheque Processing System BAMLCO Branch Anti-Money Laundering Compliance Officer BAS Bangladesh Accounting Standards BB Bangladesh Bank BBS Bangladesh Bureau of Statistics BCBS BASEL Committee on Banking Supervision BDT Bangladesh Taka BEFTN Bangladesh Electronic Fund Transfer Network BFRS Bangladesh Financial Reporting Standards BIA Basic Indicator Approach BIS Bank for International Settlements B/L Bad/Loss BMRE Balancing, Modernization, Rehabilitation & Expansion BOD Board of Directors BOEE A/C Balance of Exchange Equalization A/C BRPD Banking Regulation and Policy Department BSA Bangladesh Standards on Auditing BSEC Bangladesh Securities & Exchange Commission BSP Bangladesh Sanchaya Patra CAMLCO Chief Anti-Money Laundering Compliance Officer CAR CBS CCR CDBL CDR CFO CFP CFT CIB CIE CMU CP CP CPF CPI CPTU CRAB Capital Adequacy Ratio Core Banking Software Credit Concentration Risk Central Depository Bangladesh Limited Credit Deposit Ratio Chief Financial Officer Contingency Funding Plans Combating Finance of Terrorism Credit Information Bureau Cottage Industry/ Enterprise Capital Management Unit Credit Policy Core Principles Contributory Provident Fund Consumer Price Index Central Procurement Technical Unit Credit Rating Agency of Bangladesh Limited CRECOM Credit Committee CRG CRISL CRM CRMC CRMD Credit Risk Grading Credit Rating Information Services Limited Credit Risk Management Credit Risk Management Committee Credit Risk Management Department CRMG Core Risk Management Guidelines CRMO CRO CRR CSP CSR CTR Chief Risk Management Officer Chief Risk Officer Cash Reserve Requirement Customer Service Provider Corporate Social Responsibility Cash Transaction Report DCFCL Departmental Control Function Check List DMS DP DRS DSE DTL EAD EAS Debt Management Strategy Depository Participants Disaster Recovery Site Dhaka Stock Exchange Demand and Time Liabilities Exposure at Default Early Alert System Annual Report 2014 t 9

10 ECAI External Credit Assessment Institution EDF Export Development Fund EEF Equity Entrepreneurship Fund EFT Electronic Fund Transfer e-gp Electronic Government Procurement EMV Euro Pay, Master Card and Visa EPS Earnings Per Share ERM Environmental Risk Management ERQ Exporter s Retention Quota ETPs Effluent Treatment Plants EVA Economic Value Added FBP Foreign Bills Purchased FCA Fellow of Chartared Accountant FCMA Fellow of Cost Management Accountant FDI Foreign Direct Investment FIMA Financial Institute Management Academy FSV Forced Sale Value FX Foreign Exchange FY Financial Year (July-June) GBC Global Business Challenge GDP Gross Domestic Product GFSR Global Financial Stability Report GOB Government of Bangladesh GPF General Provident Fund GR General Reserve GSE Government Sponsored Enterprise HFT Held for Trading HTM Held to Maturity IAS International Accounting Standards IBP Inland Bills Purchased IC Industrial Credit ICAAP Internal Capital Adequacy Assessment Process ICAB Institute of Chartered Accountants of Bangladesh ICC Internal Control & Compliance ICMAB Institute of Cost & Management Accountants of Bangladesh ICT Information & Communication Technology ICT Internal Control Team ICU Internal Control Unit IFMS Instant Financial Messaging System IFRS International Financial Reporting Standards IMF International Monetary Fund IPO Initial Public Offering IRB IRR IRRBB IT KPI KYC LAN LDCL LGD LIBOR LIC LIM LRM LTR Internal Rating Based Interest Rate Risk Interest Rate Risk in the Banking Book Information Technology Key Performance Indicators Know Your Customer Local Area Network Loan Document Check List Loss Given Default London Inter-Bank Offering Rates Low Income Country Loan Against Imported Merchandise Liquidity Risk Management Loan Against Trust Receipt MANCOM Management Committee MCO MCR MDA MDG MDL MDS ME MICR MIE MIS MIS ML MLPA MOU Maximum Cumulative Outflow Minimum Capital Requirement Modified Duration of Assets Millennium Development Goal Modified Duration of Liabilities Monthly Deposit Scheme Medium Enterprise Magnetic Ink Character Recognition Micro Industry/Enterprise Management Information System Monthly Income Scheme Money Laundering Money Laundering Prevention Act Memorandum of Understanding MTMF Medium Term Macro Economic Framework MYR NAV NBFI NCB NFCD NII NPA NPL NRIT NRTA OBS OBU Malaysian Ringgit Net Asset Value Non-Banking Financial Institution Nationalized Commercial Bank Non-Resident Foreign Currency Deposit Net Interest Income Non-Performing Assets Non-Performing Loan Non-Resident Investors Taka Account Non-Resident Special Taka Account Off-Balance Sheet Offshore Banking Unit 10

11 PAD Payment Against Document PC Packing Credit PCB Private Commercial Bank PD Primary Dealer PD Probability of Default PE Price Earnings PEP Politically Exposed Persons PLST Political, Legal, Social Technological Analysis POS Point of Sales PPP Public Private Partnership PRL Post Retirement Leave PRSP Poverty Reduction Strategy Paper PSP Protirakkha Sanchaya Patra PUC Paid Up Capital PV Present Value QOR Quarterly Operation Report RAF Risk Appetite Framework RBCA Risk Based Capital Adequacy RBIA Risk Based Internal Audit R&D Research and Development RE Retained Earnings RFCD Resident Foreign Currency Deposit REPO Re-Purchase Agreement RIT Rationalized Input Template RMC Risk Management Committee RMD Risk Management Department RMG Ready Made Garments RMU Risk Management Unit ROA Return on Assets (excluding contingent items) ROE Return on Equity ROD Right Share Offer Document ROL Return on Investment RPGCL Rupantarita Prakkritik Gas Company Limited RSA Rate Sensitive Assets RSL Rate Sensitive Liabilities RU Recovery Unit RW Risk Weighted RWA Risk Weighted Assets SA SAF SAFA SCB SE SEC SEDP Standardized Approach Super Annuation Fund South Asian Federation of Accountants State Owned Commercial Bank Small Enterprise Securities and Exchange Commission Small Enterprise Development Program SEQAEP Secondary Education Quality Access Enhancement Project SGD SLR SREP SRP SMA SME SMM SMS SNTD SOD SOE SOP SREP SRP STD STR SWAP SWIFT SWOT TOR TP UC UCP VAR WAN WBG WBR WEO WTO Singapore Dollar Statutory Liquidity Ratio Supervisory Review Evaluation Process Supervisory Review Process Special Mention Account Small and Medium Enterprise Standarized Measurment Method Short Message Service Special Notice Time Deposit Secured Overdraft State Owned Enterprise Standard Operating Procedure Supervisory Review Evaluation Process Supervisory Review Process Short Term Deposit Suspicious Transaction Report Sell With a Purchase Society for Worldwide Inter-bank Financial Telecommunication Strengths, Weaknesses, Opportunities, Threats Analysis Terms of Reference Transaction Profile Unclassified Uniform Customs and Practice Value at Risk Wide Area Network Wholesale Borrowing Guidelines Web Based Remittance World Economic Outlook World Trade Organization Annual Report 2014 t 11

12 ABL Branch Network Natore District-wise Position of 921 Branches 12

13 Corporate Profile Agrani Bank Limited As on Agrani Bank Limited (ABL) was incorporated as a State Owned Commercial Bank on 17 May 2007 under the Companies Act Agrani Bank emerged as a Nationalized Commercial Bank following the Bangladesh Banks (Nationalization) Order 1972 vide President s Order No. 26 of On a going concern basis ABL took over the business, assets, liabilities, rights and obligations of Agrani Bank through a vendor s agreement signed on 15 November 2007 between the Ministry of Finance of the People s Republic of Bangladesh & the Board of Directors of ABL with retrospective effect from 1 July Legal Status Public Limited Company (governed by the Bank Companies Act 1991) Shareholding Pattern Chairman Managing Director & CEO Company Secretary 100 percent share owned by Government of the People s Republic of Bangladsh Dr. Zaid Bakht Dr. Syed Abdul Hamid, FCA Khandaker Sajedul Haque Registered Office 9/D Dilkusha, Dhaka 1000, Bangladesh (1 crore = 10 million) Authorised Capital Tk. 2, Crore Total Deposits Tk. 38, Crore Paid up Capital Tk. 2, Crore Loans & Advances Tk. 23, Crore Operating Profit Tk. 1, Crore Total Equity Tk. 3, Crore Tax Identification No Vat Registration No Employees 13,414 (officer 10,207, staff 3,207) Branch 921 Circle Office 11 Zonal Office 62 Authorised Dealer Branch 40 Corporate Branch 27 Number of Exchanges 61 Foreign Correspondent 328 Credit Rating By CRISL (Rating Date: 31 August 2014) Long Term Short Term Entity Rating 2013 (as Govt. Guaranteed Bank) AAA ST- 1 Surveillance Rating 2013 (Stand Alone Basis) A- ST- 2 Surveillance Rating 2012 (Stand Alone Basis) BBB ST- 3 Outlook Stable Subsidiary Companies in Bangladesh Subsidiary Companies in Overseas Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore (4 branches) Agrani Remittance House Sdn. Bhd., Malaysia (3 branches) Agrani Exchange Company (Australia) Pty. Limited Agrani Remittance House Canada Inc. Phone , , Fax , , SWIFT Code AGBKBDDH Website agrani@agranibank.org, info@agranibank.org MD s mdagrani@agranibank.org Annual Report 2014 t 13

14 Our Vision To become the best leading state owned commercial bank of Bangladesh operating at international level of efficiency, quality, sound management, excellent customer service and strong liquidity. 14

15 Our Mission To operate ethically and fairly within the stringent framework set by our regulators and to assimilate ideas and lessons from best practices to improve our business policies and procedures to the benefit of our customers and employees. Annual Report 2014 t 15

16 Our Motto To adopt and adapt modern approaches to stand supreme in the banking arena of Bangladesh with global presence. 16

17 Our Values We value in integrity, transparency, accountability, dignity, diversity, growth and professionalism to provide high level of service to all our customers and stakeholders inside and outside the country. Annual Report 2014 t 17

18 Our Strategic Objectives Winning at least 6.50 percent share of deposits and 5.50 percent share of loans and advances of Bangladeshi market. Gaining competitive advantages by lowering overall cost compared to that of competitors. Overtaking competitors by providing quality customer service. Achieving technological leadership among the peer group. Strengthening the Bank s brand recognition. Contributing towards the economic well-being of the country by focusing particularly on remittance, SME and agricultural sectors. Strengthening research capability for innovative products. Our Ethical Standards Be Trustworthy: We believe in mutual trust and treat our customers in a way so that they can trust us. Keep an Open Mind: For continuous improvement of our Bank we keep our minds open to new ideas. We seek opinions and feedback from both customers and team members through which our Bank will continue to grow. Meet Obligations: Regardless of the circumstances, we do everything to gain the trust and confidence of customers and clients by honoring our commitments and obligations. Be Transparent: We are transparent in our dealings with customers and all stakeholders. We ensure transparency by furnishing information through print and electronic media as well as in Bank s website, journals and reports. Be involved with the Community: We remain involved in community-related issues and activities, thereby demonstrating that our business is socially responsible. Be Respectful: We treat all stakeholders with utmost respect and courtesy regardless of differences, positions, titles, ages, or other types of distinctions. Be Environment Conscious: We provide industrial financing decorously to keep the environment free from pollution and health hazard. We also ensure setting up ETP before installation of industries to keep environment safe. We are pro-active and foresighted for green office and green economy. 18

19 Notice of the Eighth Annual General Meeting Notice is hereby given to all Shareholders of Agrani Bank Limited that the 8 th Annual General Meeting of the Company will be held on 1 st June 2015 at 7.00 pm at Bronze Room of Westin Hotel, Dhaka, to transact the following business and adopt necessary resolutions: Agenda 1. To inform the minutes of the 7 th Annual General Meeting held on 7 th May To receive, consider and adopt the Audited Financial Statements of the Bank for the year ended on 31 st December 2014 together with the Auditors Report and the Report of the Directors thereon. 3. To elect /re-elect Directors. 4. To appoint Auditors for 2015 and to fix their remuneration. 5. To transact any other related business with the permission of the Chair. Dated : May 14, 2015 By Order of the Board of Directors Khandaker Sajedul Haque Company Secretary Annual Report 2014 t 19

20 Letter of Transmittal To All shareholders Registrar of Joint Stock Companies & Firms Securities and Exchange Commission Bangladesh Bank Dhaka. Sub: Annual Report for the year ended on 31 st December Dear Sir (s) We are pleased to enclose herewith a copy of the Annual Report 2014 which contains the Audited Financial Statements of Agrani Bank Limited and its Subsidiaries i.e. Agrani Equity & Investment Limited, Agrani SME Financing Company Limited, Agrani Exchange House Private Limited, Singapore, Agrani Remittance House Sdn. Bhd., Malaysia, Agrani Exchange Company (Australia) Pty. Limited and Agrani Remittance House Canada Inc. for your kind information and record. Yours sincerely Dr.Syed Abdul Hamid, FCA Managing Director & CEO 20

21 Year Deposits Loans & Advances Classified Loans Growth of Agrani Key Indicators : From 1972 to 2014 Import Export Foreign Remittance Operating Profit Net Profit No.of Branch Manpower Authorised Capital Paid up Capital BDT in Crore Equity Total Asset Annual Report 2014 t 21

22 Chairmans of the Board From 1972 to 2014 Agrani Bank : As Nationalized Commercial Bank SL. Name From To 1 M. Fazlur Rahman Abdur Rahman Biswas Prof. M. Safiullah M. Matiur Rahman Mir Ataul Haque Khandker Imamuddin Ahmad Chaudhury Mohd. Faizullah L.K. Siddiqi M. Hafizuddin Khan(Acting) Dr. Fashiuddin Mahtab Atauddin Khan H. T. Imam Md. Matiur Rahman Abdul Hannan Dr. Sohrabuddin M. Ahsanul Haque Sayed Mushtak (Acting) Md. Fazlur Rahman S.M.Jahrul Islam Siddiqur Rahman Choudhury Agrani Bank Limited : As State Owned Commercial Bank 1 Siddiqur Rahman Choudhury Dr. Khondoker Bazlul Haque Arastoo Khan (Acting) Dr. Zaid Bakht Continued 22

23 Managing Directors From 1972 to 2014 Agrani Bank : As Nationalized Commercial Bank SL. Name From To 1 M. Fazlur Rahman Lutfar Rahman Sarkar Humyun Hamid (Acting) Mohammad Hossain Humayun Hamid Gulam Mohammad (Current Duty) Quazi Baharul Islam Mustafa Aminur Rashid Foyezuddin Ahmed A. Q. Siddiqui Khondoker Ibrahim Khaled Mosharraf Hossain A. K. M. Nazmul Haq M. Enamul Haq Chowdhury M. A. Yousoof A. S. M. Imdadul Haque A. K. M. Asaduzzaman (Current Charge) Syed Abu Naser Bakhtear Ahmed Agrani Bank Limited : As State Owned Commercial Bank 1 Syed Abu Naser Bakhtear Ahmed Syed Abdul Hamid (Acting) Syed Abu Naser Bakhtear Ahmed Dr. Syed Abdul Hamid, FCA Continued Annual Report 2014 t 23

24 Board of Directors Chairman Dr. Zaid Bakht Reserch Director Bangladesh Institute of Development Studies Directors Arastoo Khan Secretary (Member, Planning Commission) Government of the People s Republic of Bangladesh Shameem Ahsan IT Specialist and Entrepreneur Engineer Md. Abdus Sabur Engineer and Industrialist Md. Altaf Hossain Molla DIG of Police (Rtd.) K.M.N. Manjurul Hoque Lablu Chief Editor & Managing Director Global News Agency A. B. M. Kamarul Islam Joint Secretary (Rtd.) Niaz Rahim Director Rahim Afrooz Group of Company Hasina Newaaz Industrialist Advocate Balaram Podder Law Practitioner and Social Worker Dr. Syed Abdul Hamid, FCA Managing Director & CEO Agrani Bank Limited Prof. Dr. Md. Abdur Rouf Sardar Director Bangladesh Medical College Hospital Company Secretary Khandaker Sajedul Haque 24

25 Board of Directors Dr. Zaid Bakht Chairman Arastoo Khan Director Engineer Md. Abdus Sabur Director KMN Manjurul Hoque Lablu Director Niaz Rahim Director Advocate Balaram Podder Director Prof. Dr. Md. Abdur Rouf Sardar Director Shameem Ahsan Director Md. Altaf Hossain Molla Director A B M Kamarul Islam Director Hasina Newaaz Director Dr. Syed Abdul Hamid, FCA Managing Director & CEO Annual Report 2014 t 25

26 Composition of Committees of the Board of Directors as on Executive Committee Dr. Zaid Bakht K.M.N.Manjurul Hoque Lablu Prof. Dr. Md. Abdur Rouf Sardar Shameem Ahsan A.B.M. Kamarul Islam Hasina Newaaz Audit Committee Arastoo Khan Engineer Md. Abdus Sabur Advocate Balaram Podder Md. Altaf Hossain Molla Risk Management Committee Arastoo Khan Engineer Md. Abdus Sabur Prof. Dr. Md. Abdur Rouf Sardar Shameem Ahsan 26

27 Board of Trustees Agrani Bank Limited Employees Provident Fund Chairman K.M.N. Manjurul Hoque Lablu Director of the Board Members Dr. Syed Abdul Hamid, FCA Managing Director & CEO Mohammad Awal Khan Deputy Managing Director Mizanur Rahman Khan Deputy Managing Director Md. Awlad Hossain Deputy Managing Director Kazi Sanaul Hoq Deputy Managing Director Md. Nazrul Islam Farazi General Manager and CFO Md. Moshiur Ali General Manager (Admin) Member Secretary A.S.M. Waliullah Deputy General Manager (CAD) Auditors Hoda Vasi Chowdhury & Co. Chartered Accountants BTMC Bhaban (Level-8) 7-9 Kawran Bazar C/A Dhaka 1215 A.Qasem & Co. Chartered Accountants Suites :1-3, Level : 7 Plot :15, Road : 103 Gulshan Avenue, Dhaka 1000 Income Tax Advisor M/s L.R. Bhuiyan and Associate 6 Bijoy Nagar (2nd Floor), Dhaka 1000 Credit Rating Company Credit Rating Information and Services Limited (CRISL) Nakshi Homes, 6/1/A Segun Bagicha, Dhaka 1000 Legal Consultant Shahjahan Majumder Chief Medical Officer Parimal Kanti Debnath, MBBS Annual Report 2014 t 27

28 Management Team Managing Director & CEO Dr. Syed Abdul Hamid, FCA Deputy Managing Directors Muhammad Awal Khan Mizanur Rahman Khan Md. Awlad Hossain (Join on ) Kazi Sanaul Haq (Join on ) General Managers A. A. Md. Shajahan Md. Nazrul Islam Farazi Md. Shahidullah Badal Chanra Dey Hamidur Rahman (PRL on ) Mobarak Hossain Md. Rafiqul Alam Md. Moshiur Ali Md. Ali Hossain Prodhania Kalpana Saha Md. Delowar Hossain Tazrina Ferdausi Kazi Alamgir Md Aminul Islam Pankaj Roy Chowdhury Md. Yusuf Ali Md. Kamruzzaman Borhanuddin Farook Ahmed Md. Showket Islam Md. Harmuz Miah Md. Monowar Hossain, FCMA, CPA, FCS, ACA 28

29 Management Team Annual Report 2014 t 29

30 General Managers A. A Md. Shajahan Md. Nazrul Islam Farazi Md. Shahidullah Badal Chandra Dey Hamidur Rahman PRL on Mobarak Hossain Md. Rafiqul Alam Md. Moshiur Ali Md. Ali Hossain Prodhania Kalpana Saha Md. Delowar Hossain Tazrina Ferdousi Kazi Alamgir Md. Aminul Islam Pankaj Roy Chowdhury Md. Yusuf Ali Md. Kamruzzaman Borhanuddin Farook Ahmed Md. Showket Islam Md. Harmuz Miah Md. Monowar Hossain 30

31 Deputy General Managers as on A. S. M. Waliullah 38. Md. Hasan Suhrawardy 75. Ashok Kumar Saha 02. Dr. Md. Emdadul Haque 39. Md. Faruqe Ahmed 76. Jasim uddin Ahmed 03. Sahida Akhtar 40. Md. Sanowar Hossain 77. Md. Monirul Islam 04. Md. Rezaul Karim 41. Md. Hafizur Rahman 78. Raziur Rahman Osmani 05. Md. Mustafa Kamal Bhuiyan 42. Md. Nurul Islam 79. Md. Ruhul Amin 06. Shamsuzzaman 43. Md. Wahiduzzaman 80. Ajay Kumer Poddar 07. Md. Nazrul Islam 44. Tuheen Alam 81. Mr. Rafiq Ahmed 08. Md. Serajul Islam 45. Md. Monirul Islam 82. Md. Mozammel Hossain 09. Md. Nurul Amin 46. Selina Zaman 83. Md. Ataur Rahman 10. Md. Kamruzzaman 47. Belayet Hossain 84. Ali Ul Abedin Bhuiyan 11. A.B.M. Khalequzzaman 48. A. M. Abid Hossain 85. Mrs. Ismat Parveen 12. Md. Anisur Rahman 49. Md. Lutfor Rahman 86. Md. Wadud Ali 13. Md. Shafiqur Rahman Sadique 50. Mahmudul Ameen Masud 87. Abdur Rahim Talukder 14. Md. Golam Kabir 51. Bimalendra Saha 88. Md. Samiul Alam 15. S.M. Nurul Ahsan 52. Arajit Kumar Das 89. Samir Ranjan Lodh 16. Babul Kumar Saha Roy 53. Zahiruddin Khan 90. Md. Habibur Rahman 17. Md. Abdul Haque 54. S. M. Babul Islam 91. Khandaker Sajedul Hoque 18. Shirin Akhter 55. Md. Akhtarul Alam 92. Md. Jalal Uddin 19. Selina Akhter 56. Md. Ismail Hossain 93. Mr. Kazi Shafiqul Islam 20. M. Habibur Rahman 57. Mohammed Shawkat Ali 94. Md. Ebayedullah Talukder 21. Md. Abu Anis Sultan Mamun 58. Abu Bakar Khan 95. Md. Abdul Matleb 22. Md. Rezaul Karim 59. Md. Abdur Rahim 96. Md. Khalequzzaman 23. Md. Khorshed Alam 60. Md. Habibul Alam 24. Md. Sharif Ullah 61. Md. Anwarul Islam 25. Mrs. Rokeya Afroza 62. Kanai Lal Mali 26. Md. Habibur Rahman 63. Md. Abdur Rashid 27. Md. Liakat Ali 64. Md. Nazmul Haque 28. Md. Akram Hossain 65. Md. Abdus Salam Molla 29. Md. Wali Ullah 66. Md. Jahangir Mondal 30. Jahar Lal Roy 67. Muhammad Golam Mustafa 31. Md. Abul Basar Serneabad 68. A. B. M Abdul Mobin 32. Tapash Kumar Das Gupta 69. Md. Hemayet Hossain 33. Md. Abul Hashem 70. Md. Kazi Omar Faruque 34. Sk. Abdul Kader 71. Zakia Begum 35. Israt Ara 72. Tapash Sarker 36. Shukanti Bikash Shanyal 73. Md. Fazle Halim 37. Shekhar Chandra Biswas 74. Md. Lutfar Rahman Sikder Annual Report 2014 t 31

32 Five Years Performance at a Glance Taka in crore Particulars Balance Sheet Authorized Capital 2,500 2,500 2,500 1, Paid-up Capital 2,072 2, Reserves 1,693 1,659 1,168 1, Revaluation Reserve on Investment in Govt. Securities Retained Profit (Loss) -12 (225) (1,454) Total Equity 3,957 3, ,594 1,572 Total Deposits 38,392 34,868 29,243 25,221 20,633 Core Deposits 11,912 10,722 9,932 9,255 8,505 i. Savings Deposit 10,508 9,524 8,926 8,532 8,013 ii. Deposit Pension Scheme iii. Agrani Bank Pension Scheme iv. Agrani Bank Bishesh Shanchay Scheme 1,357 1, Total Loans and Advances 23,509 20,297 21,266 19,409 16,326 Interest Suspense and Penal Interest Provision for Loans and Advances 2,275 1,923 3,466 1,235 1,064 Net Loans and Advances 20,467 17,686 17,065 17,572 14,683 Investments (net) 14,632 14,566 8,921 8,376 4,264 Fixed Assets 1,545 1,525 1,138 1, Total Assets 49,487 44,416 37,872 34,882 26,485 Net Current Assets 3,315 6,781 4,823 5,859 5,960 Operating Results Total Income 4,170 4,113 3,700 3,301 2,402 Total Expenditure 3,096 3,049 2,693 1,827 1,316 Operating Profit before Amortization, Provision & Tax 1,074 1,064 1,007 1,474 1,086 Amortization of Valuation Adjustment Provision during the year , Provision for Tax (28) (216) (2) Net Profit (loss) after Amortization, Provision & Tax (1,862) Financial Ratios Earnings per Share (187.84) Cost of Fund in percentage Return on Equity in percentage (259.94) Return on Assets in percentage (4.92) Net Interest Margin in percentage Average Yield on Loan in percent (Performing Loan) Loans as percentage of Deposit (AD Ratio) Total Classified Loans to Total Loans in percentage Net Classified Loans to Net Loans in percentage (including staff loan)

33 Five Years Performance at a Glance Taka in crore Particulars Capital Measures (As per Basel II) Total Risk Weighted Assets 25,326 21,370 21,455 21,411 19,326 Core Capital (Tier-I) 1,552 1,212 (1,320) 1,688 1,163 Supplementary Capital (Tier-II) 1, Total Capital 2,644 2,145 (1,320) 2,353 1,779 Tier-I Capital Ratio 6.13% 6.00% - 8% 6% Tier-II Capital Ratio 4.31% 4.00% - 6% 3% 3% Total Capital Ratio 10.44% 10.00% 11% 9% Credit Quality Non-Performing Loans (NPLs) 3,966 3,580 5,380 2,149 2,102 Provision for Unclassified Loans Provision for Classified Loans 1,930-3, Share Information No. of Shares Outstanding 20,72,29,404 20,72,29,404 9,91,29,404 9,01,17,640 5,46,52,400 No. of Shareholders Dividend - Bonus Share % 10% Net Asset Value per Share (Taka) Key Operational Datas Forex Business 37,066 36,449 37,482 44,869 30,332 i. Import 15,741 15,947 16,963 26,877 16,792 ii. Export 8,345 7,845 8,838 9,310 6,443 iii. Remittance 12,980 12,657 11,681 8,682 7,097 Guarantee Business Branches Employees 13,414 14,005 13,890 12,085 11,900 NOSTRO A/C with Foreign Banks Exchange Houses (Remittance) Foreign Correspondents Number of Subsidiary Companies Annual Report 2014 t 33

34 Total Assets 49,487 Total Employees 13,414 Foreign Remittance Tk. 12,980 crore Deposits Tk. 38,392 crore Spotlight of 2014 Foreign Correspondents 328 Total Branches 921 Equity Tk. 3,957 crore Operating Profit Tk. 1,074 crore Spotlight of

35 Annual Report 2014 t 35

36 Graphical Presentation of Performance Net Asset Value Per Share Taka Operating Profit Crore Taka , ,086 1,007 1,064 1, Net Loans and Advances Crore Taka ,683 14,572 17,065 17,686 20,467 Deposit Crore Taka ,633 25,221 29,243 34,868 38,

37 Graphical Presentation of Performance Cost to Income Ration (%) Shareholder s Equity Crore Taka ,564 3, , , Non-Interest Income Crore Taka ,719 1, ,002 1,058 1,311 Non-Performing Assets Crore Taka , ,102 2,149 3,580 3, Annual Report 2014 t 37

38

39 Chairman s Message The Board is always meticulous about building up a solid internal organizational foundation as well as improving efficiency and performance of the Bank officials. I strongly believe that ABL now stands on a strong organizational pillar. ABL has been serving the nation since its inception keeping up the trust, the customers repose on us. It has been possible because of good governance existing in the ABL structure. Annual Report 2014 t 39

40 Chairman s Message Dear Shareholders Assalamu Alaikum and a very good evening It s a great pleasure to welcome all of you to the 8 th Annual General Meeting of Agrani Bank Limited (ABL). On behalf of the Board of Directors, I feel honored to have the opportunity of presenting before you a brief account of some of the major achievements of the Bank in the financial year ending on 31 December At the outset, I recall with humble regards, our beloved Father of the nation, Bangabandhu Sheikh Mujibur Rahman. It is because of his visionary leadership that Bangladesh came into being as an independent nation. I also pay my tribute to the martyred freedom fighters, and intellectuals of our Liberation War in I recall with deep respect the four martyred national leaders of Bangladesh. Respected shareholders, the year 2014 observed stronger economic recovery in the US and Britain, the slowdown in most of the BRICS countries like China, Brazil and Russia, the less than expected growth in the Eurozone, high unemployment in Greece, the slowdown in Japan, the geopolitical crisis between Russia and Ukraine, western sanctions on Russia leading to fall in German exports to Russia, unrest across Middle East with the rise of Islamic State (IS). Amid this global economic volatility and political turmoil in Bangladesh since January of the year, the economy of Bangladesh exprienced increased public investment offsetting the decline in private investment, accompanied by prudent macro-economic management and cautious monetary policy that helped control inflation. At the same time, Agrani Bank Limited has maintained stable growth in almost all aspects. Thanks to the prudent guidance of the Board, effective performance of the management and relentless efforts made by all ABL members. Let me now recount some of the major achievements of the Bank in the year The Bank continued to grow steadily in all major areas. Deposits increased by percent in 2014 and reached Tk. 38,392 crore from Tk. 34,868 crore in Total loans and advances in 2014 was TK. 23,509 crore as against Tk. 20,297 crore in 2013, with a growth of percent over the previous year. The Bank s profit also continued to grow. The profit before amortization, provision and tax rose by 0.94 percent to Tk. 1, crore in 2014 from Tk. 1, crore in As a result, the capital surplus of Tk crore in 2013 reached a capital surplus of Tk crore in 2014 even after covering capital requirement. Dear shareholders, foreign remittance is one of the contributing factors to the running of wheels of our national economy. The inflow of foreign remittance through different channels of ABL was tk, 12,980 crore in This has been possible because of bringing all the branches under wide internet coverage, establishing our own exchange houses in different countries, and having linkages with a good number of foreign exchange houses abroad. I hope ABL will take more steps through organizing remittance fair to make expatriate Bangladeshis aware of our remittance activities. Distinguished shareholders, to bring to fruition the government s vision of Digital Bangladesh, ABL is committed to creating a digital banking mindset among the employees as well as the customers. To face the banking challenges all branches have been digitalized through introducing T24 online banking software, increasing number of ATM booths so that we can meet the ever changing demand of the customers. I am pleased to inform you that our valued clients now get top-notch services and feel the difference at level next. The Board is always meticulous about building up a solid internal organizational foundation as well as improving efficiency and performance of the bank officials. In order to bring vigour and speed in the bank, timely promotion and recruitment have been ensured during the reporting year. To strengthen the internal control, necessary steps have been taken by the Audit and Inspection Division functioning on the basis of Bangladesh Bank s internal control guidelines and directions given by the wise and visionary Audit Committee of the Board. The Executive Committee of the Board is entrusted with taking decisions as authorised by the Board within the norms set by Bangladesh Bank. A Risk Management Committee of the Board is also in place as a standing body to identify as well as overcome the risks that may arise in our banking business. I strongly believe that ABL now stands on a strong organizational pillar. Dear shareholders, ABL has been serving the nation since its inception keeping up the trust, the customers repose on us. It has been possible because of good governance existing in the ABL structure. The board and the bank management have been giving relentless efforts to ensure meaningful corporate governance in all spheres 40

41 of banking activities such as loan sanction, disbursement of credit, post-loan disbursement supervision, maintaining liaison with the defaulters especially the top loan delinquents to minimize classified loans, keeping of accounts, utilization of resources, fund management, reduction of untoward expenditure through maintaining crystal clear transparency, accountability and ethical banking practice among the bank employees. Respected partners, Agrani Bank Limited not only makes profits but also spends a significant amount of money in the form of CSR activities as apart of our moral obligation to the society to provide the disadvantaged and the deprived with a platform to make his/her presence felt in the society, keeping in mind the `mantra that each one counts irrespective of religion, caste and position. Agrani Bank Limited is trying to be at par with the government s vision of Green Bangladesh. As part of this endeavor, this year, we have intensified green banking activities by giving loans on easy conditions to solar panel installation, bio-gas plants, compost plants and other enterprises producing eco-friendly agro-products. We hope we will be one of the major development partners to the fruition of government s green agenda. Finally, I would like to extend my sincere gratitude to my Board Members for their wise counsel, our management team and dedicated staff for their commitment to ABL. Our winning spirit and willingness to work cohesively and unitedly has enabled us to achieve this impressive set of results. I would also like to thank our valued shareholders, customers, and business partners, Bangladesh Bank and the Government of Bangladesh for the support that have been given to us. With their unfaltering faith and strong support, I strongly believe that Agrani Bank Limited will move faster than ever before. May Allah bless us in taking forward our agenda for the Bank s prosperity. Dr. Zaid Bakht Chairman The Board of Directors Annual Report 2014 t 41

42

43 Overview of Managing Director & CEO Operating profit was Tk. 1,074 crore at the end of 2014, which is the highest among the State Owned Commercial Banks (SCB). Net Interest Margin was Tk crore which is positive figure among the 3 big SCB s. From 2012 to 2014 ABL secured 1 st position in foreign remittance among the SCBs. Annual Report 2014 t 43

44 Overview of Managing Director & CEO Respected Shareholders Assalamu Alaikum Amidst sluggish investment scenario in the outgoing year, our economy as well as banking sector overcomes the challenges. Prudent leadership of the government proved its success to upkeep economic strength and stability of the country to its optimum level. In the year 2014, Agrani Bank Limited (ABL) performed relatively well and posted solid result. Our healthy and strong Balance Sheet would focus on it. Before all else, with profound respect and reverence we recollect the valiant and intrepid martyred freedom fighters of our liberation war and the Great Bangalee of all times, the Father of the Nation, Bangabondhu Sheikh Mujibur Rahman. As a state owned commercial bank, we are committed to remain faithful to the people and nation building responsibilities by undertaking different government entrusted socio-economic assignments. We are giving supreme importance on Service Excellence as the prime change agent in a market of homogeneous products and services. Our strategy is to serve the customers at a competitive cost. We are constantly overseeing to diversify our products and services and fine-tune them to the emerging needs of the market. We are thrilled and feel proud when we observe that at the outcome of visionary steps of the Government, the economy of Bangladesh is uplifting. We are emerging day by day from a lower to a middle income country. This has become possible especially because of visionary plan and program of the present Government and its successful implementation and above all untiring efforts of our farmers, SME entrepreneurs and expatriate Bangladeshis. On behalf of ABL, we salute them all and express our continuous commitment to support them at all levels to our utmost. Bank s financial status reflected in the financial statement is included in this Annual Report. Here you would see that we have registered growth in important areas of operation and tried to bring qualitative improvements in our year-long activities. The year 2014 for us was indeed a year of challenge and we tried to grow in every area of our banking business. We have extended our business portfolio and enlisted many new customers by demonstrating our committed strengths in the competitive market. During the year, our total deposits was Tk. 38,392 which was Tk. 34,868 crore in 2013, loans and advances was Tk. 23,509 crore which was Tk. 20,297 crore in 2013, operating profit was Tk. 1,074 crore at the end of 2014, which is the highest among the State Owned Commercial Banks (SCB). Bank s total assets have also increased to Tk. 49,487 crore from Tk. 44,416 crore i.e percent increase in a year time. Import and export was Tk. 15,741 crore and Tk. 8,345 crore respectively. Remittance reached to Tk.12,980 crore from 12,657 crore with 2.55 percent growth over the preceding year. From 2012 to 2014 ABL secured first position in earning foreign remittance among the SCBs. In the year 2014, Net Interest Margin was Tk crore which is positive figure among the three big SCB s. Export of ABL in 2014 was Tk. 8,345 crore than 7,845 crore of 2013 with a growth rate of 6.37 percent. In the year 2014, the Treasury utilized Bank s Fund prudently and ensured maximum benifit. For strong credit and better Balance Sheet management, the multinational bank Standard Charterd Bank of UK allowed ABL 100 million US Dollar soft loan for three years. Like the preceding years, the market has been hard hit due to high cost of deposit and various constraints. To remain afloat in the sea of competition, the journey of business should be set in the right direction. As part of keeping the continuous growth on right track, we are trying to adapt our strategies to the changing business environment by launching different products at different times, controlling operating expenses, diversifying our credit programs to more profitable areas, inventing new avenues in SME financing, manpower business, islamic banking, green banking, incresing branches of our overseas exchange houses and establishing new subsidiary company as part of expanding business capacity of the Bank. During the year 2014, we made significant progress in different areas. We drew out the strategies in the areas of capital strengthening, risk management, strong ICC, asset quality, product development, business diversification, technological integration and upgradation, SME and agri-financing in line with the national policies. We would continue our all-out efforts towards recovery of classified and written-off loans. All concerned have been advised to put in their sincere efforts to accelerate the pace of recovery. Special emphasis has been given to check further classification of loans, settlement of pending suits for recovery on priority basis and to acquire lawful possession of the mortgaged property. Credit Rating of ABL from 2007 to 2013 has been 44

45 affirmed AAA in long term, ST-1 in the short term as a government entity and A- as Stand Alone Basis by the Credit Rating Information Services Limited (CRISL) which demonstrates strong financial soundness and reputation of the Bank. We are strengthening our supervision as it is the main instrument for building and reinforcing of trust in banking. In fact, banking is a long term business which is based on trust and, therefore, each of our staff-members is highly concerned to boost the trust of all of our stakeholders. And above all, ABL has the motto for breathing ethical banking in every sphere of business. ABL dedicates itself to the cause of technology based modern banking services to the customers and is relentlessly trying to contribute to the process of materializing Digital Bangladesh. Our involvement in IT is continuing to ensure efficiency of operation and to improve customer services. In order to meet the growing expectations of our customers, online banking with Core Banking Software T24 was introduced in our Bank from 1st July Amongst the State Owned Commercial Banks, our Bank is pioneer in online banking. Now 380 important branches of the Bank covering all districts are fully operating under online real time basis and it will remain increasing. Internet banking, mobile banking and ATMs are included in the attempts of our online banking system. ABL, in association with DOER, has already started financial services to the unbanked and under banked citizens of rural Bangladesh through Agents or Customer Service Provider. The project would continue under the Agent Banking Draft Guideline that has recently been formulated by Bangladesh Bank. As a financial intermediary, ABL invariably comes across different types of risks that may have adverse impacts on the business. In order to mitigate these risks, a Risk Management Committee of the Board is formed and a welldefined risk management policy is implemented in the Bank. An independent division named Core Risk Management and Basel Implementation Division is established with the responsibility of updating the risk management policies and monitoring implementation thereon. in Dhaka and other divisional cities. We have recruited a total of 433 personnel during 2014 as Cash Officers. We extend our helping hands to the distressed people with financial support for their treatment and for easing their crisis. ABL also contributes to knowledgebased programs, sports and cultural activities through donations and sponsorships. In CSR, we distributed Tk crore to 255 benificiaries. As part of CSR agenda, ABL morally looks to funding in environment-friendly projects. ABL is the second largest Bank of the country in respect of branch network which is 921 at present. Our overseas banking network is also expanding. Our branch network in rural areas is aiding the government in enhancing financial inclusion in the country by bringing unbanked people. A farmer can open an account in the Bank by Tk. 10 only. Thus, a great segment of the population, particularly the rural poor, has access to banking services. I express my profound gratitude to the honorable Chairman and the members of the Board for their bestowal of stewardship of ABL upon me. Continued diligence of the Bank Management supported by the prudent guidance of the Chairman and the Members of the Board have contributed much to the process of bringing such commendable achievement. I assure you that we will run our banking business within the set rules and regulations issued by the competent authority. For and on behalf of the management, I would like to take the opportunity to convey my sincere thanks and gratitude to the Banks and Financial Institution Division, regulatory agencies, valued customers, patrons, other stakeholders and all staff members of the bank for their continued support. Thanks are truly due to all customers who remained loyal and kept faith in us. Finaly I like to thank all my colleagues; the Management along with entire workforce of the Bank particularly the team associated with the hard work of bringing out this voluminous Annual Report of the year The Bank maintained sound and effective ICC through the year. Re-organized ICC of ABL consists of five Divisions which are Headed by a fresh appointed General Manager who is a qualified Chartered Accountants. Human resource is always considered as the most important asset for any organization. We have a pool of talented and skilled workforce. We also focus on their career development by nominating them in training, seminar and workshop at home and abroad besides providing training in our Agrani Bank Training Institute Dr. Syed Abdul Hamid, FCA Managing Director & CEO Annual Report 2014 t 45

46 Shareholders Information Particulars Distribution of Shares 31 December December 2013 Government of Bangladesh 20,72,29,393 20,72,29,392 Directors General Public - - Total 20,72,29,404 20,72,29,404 Shares held by Directors Sl. No. Particulars Status Share Closing Position Change 1 Dr. Zaid Bakht Chairman 1 1 0% 2 Arastoo Khan Director 1 1 0% 3 Engineer Md. Abdus Sabur Director 1 1 0% 4 K.M.N. Manjurul Hoque Lablu Director 1 1 0% 5 Niaz Rahim Director 1 1 0% 6 Advocate Balaram Podder Director 1 1 0% 7 Prof. Dr. Md. Abdur Rouf Sardar Director 1 1 0% 8 Shameem Ahsan Director 1 1 0% 9 Md. Altaf Hossain Molla Director 1 1 0% 10 A. B. M. Kamarul Islam Director 1 1 0% 11 Hasina Newaaz Director 1 1 0% Total Dividend Distribution i) 100 Percent stock dividend i.e. 1 bonus share for every 1 share for the year ii) 10 Percent Stock dividend i.e. 1 bonus share for every 10 shares for the year iii) 10 Percent Stock dividend i.e. 1 bonus share for every 10 shares for the year iv) 10 Percent Stock dividend i.e. 1 bonus share for every 10 shares for the year

47 Signing of Accounts 2014 Signing of Accounts of 2014 on April 27, 2015 Photo Annual Report 2014 t 47

48 Financial Highlights Taka in crore Particulars Change Performance during the year Interest revenue 2, , (2.31%) Interest cost 2, , (2.08%) Net interest revenue (6.28%) Income from investment 1, , % Other operating revenue (15.65%) Total operating revenue 1, , % Salary & allowances % Other operating cost % Total operating cost % Profit before amortization, provision and tax 1, , % Amortization ( valuation adjustment) Provision for loans and advances % Other provision (49.57%) Profit before tax (75.27%) Provision for tax (28.13) (215.60) (86.95%) Net profit after tax (78.05%) At the end of the year Paid up capital 2, , Total shareholders equity 3, , % Deposits 38, , % Total contingent liabilities and commitments 8, , (26.21%) Loans and advances 23, , %) Amount of classified loans 3, , % Provision kept against classified loans 1, % Investments 15, , % Interest earning assets 25, , % Non interest earning assets 24, , % Fixed assets 1, , % Total assets 49, , % 48

49 Key Ratios Sl. No. Particulars Profitability and performance ratios 1 Net profit ratio 4.74% 22.00% 2 Cost to income ratio 74.24% 74.15% 3 Return on assets 0.40% 2.04% 4 Return on Equity (after amortization, provision & tax) % 5 Non-interest expenses to total assets 1.77% 1.76% 6 Non-interest income to total assets 3.70% 3.86% 7 Interest margin to total assets 0.24% 0.28% 8 Earnings per share (Taka) 9.58% Net asset value per share (Taka) Cost of fund 9.58% 10.41% 11 Return on investment 8.54% 7.43% Liquidity and solvency ratios 1 Current ratio Debt to total assets ratio Loans & advances to deposit ratio % 4 Loans & advances to total assets ratio % 5 Provision to total loans & advances 9.68% 9.47% Capital adequacy ratios Capital adequacy ratio 10.44% 10.04% i. Tier I Capital 6.13% 5.67% ii.tier II Capital 4.31% 4.37% Note 1. Since ABL is not a listed company, its market price per share is not available. So, P/E ratio of the Bank could not be provided. 2. Last year s figures rearranged wherever necessary. Annual Report 2014 t 49

50 Graphical Presentation of Key Financial Information Bills Payable 1.32 Current and other Deposits 9.98 Overdrafts 1,359 Bills Purchased & Discount 546 Savings Bank Deposits Deposit Mix of 2014 (%) Fixed Deposit Loans 17,228 Loans & Advance Matrix 2014 Cash Credit 4,376 Advance Deposit Ratio (%) Total Classified Loans (%) Net Classified Loans to Net Loans (%) 10 Constituent of Assets Crore Taka , , , , , Investments Fixed Assets Other Assets Liquid Assets Loans & Advances 50

51 Graphical Presentation of Key Financial Information Current Ratio 2.5 Debt Equity Ratio Return on Equity (%) Net Interest Margin Crore Taka Capital Adequacy Ratio (%) Total Assets Crore Taka % 10.44% ,485 34,882 37,872 44,416 49, Annual Report 2014 t 51

52 Graphical Presentation of Key Financial Information Fixed Assets Growth Crore Taka Capital Growth Crore Taka ,123 1,138 1, , ,594 3,564 3, , Growth of Advance 2014 (%) 20 Growth of Deposits 2014 (%) National Agrani 0 National Agrani Import Crore Taka Export Crore Taka ,792 26,877 16,963 15,947 15, ,443 9,310 8,838 7,845 8,

53 Capital Adequacy Capital adequacy symbolizes the financial strength and stability of a bank. It limits the ceiling up to which banks can expand their business in terms of risk-weighted assets. Like all commercial institutions, banks too consistently look at the way of expanding their operations by acquiring property, plant and equipment and shifting of branches to better commercial areas, in addition to mobilizing deposits, providing loans and investing in other assets. Regulatory capital requirements are therefore necessary to prevent banks from expanding beyond their ability to manage (overtrading), to improve the quality of bank s assets, to leverage their growth and to lead to higher earnings on assets. The Bank keeps a careful check on its adequacy ratio which is evident from the following: Capital Adequacy as per BASEL-II Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-II) Taka in Crore A. Eligible Capital : Tier-1 (Core Capital ) , Tier-2 (Supplementary Capital) Tier-3 (eligible for market risk only) Total Eligible Capital (1+2+3) : 2, , B. Total Risk Weighted Assets (RWA): 25, , C. Capital Adequacy Ratio (CAR) (A4 / B)* % 10.04% D. Core Capital to RWA (A1 / B)* % 5.67% E. Supplementary Capital to RWA (A2 / B)* % 4.37% F. Minimum Capital Requirement (10% of RWA) 2, , G. Capital Surplus / (Shortfall) Eligible Capital Tier-1 (Core Capital) Fully Paid-up Capital , Statutory Reserve General Reserve Retained Earnings (11.74) (224.93) Sub-Total , Deductions: Valuation Adjustment (Intangible assets) Investments in Subsidiaries which are not consolidated - - Benefit of Deferred Tax Assets Total Deductions 1, , Total Eligible Tier-1 Capital , Tier-2 (Supplementary Capital) General Provision (UC + SMA + Off B/S exposure+ 3% Consumer Finance) Assets Revaluation Reserves up to 50% Revaluation Reserve for Approved Securities up to 50% Revaluation Reserve for Equity Instrument up to 10% Other(Balance of Exchange Equalization A/C) - - Sub-Total 1, Deductions: Investments in Subsidiaries which are not consolidated - - Total Eligible Tier-2 Capital 1, Tier-3 Supplementary Capital - - Total Supplementary (Tier 2+ Tier 3) Capital 1, Total Eligible Capital (Tier 1+ Tier 2+ Tier 3) Capital 2, , Annual Report 2014 t 53

54 Value Added Statement The value added statement for the Bank shows the values created and distributed among different stakeholders of the Bank. Value added by the Bank stood at Tk. 897 crore as of 31 December 2014 against Tk. -1, crore as of 31 December (Taka in crore) Value Addition Taka in crore In percent Taka in crore In percent a. Income from Banking Service 4,170-4,113 - b. Less: Cost of Services & Supplies 2,444-2,487 - c. Value added by the Banking Services (a-b) 1,726-1,626 - d. Add: Non-Banking income e. Less: Amortization, Loan Loss Provision and Other Provisions except Incentive Bonus Value added ( c+d-e) 897-1,326 - Distribution of Value addition To Employees as Salaries, Allowances and Bonus % % To Govt. as Income Tax 13 1% - To Statutory Reserve 34 4% % Retained Profit % % Depreciation 37 4% 31 3% Deferred Tax (41) (4%) (216) (16%) Total % 1, % To Statutory reserve 4% Deferred Tax (-4%) Retained profit 18% Depreciation 4% To Govt. as Income Tax 1% Distribution of Value Addition 2014 (%) To Employess as salaries allowances and bonus 77% 54

55 Economic Impact Report The Bank s overall objective is to deliver optimum value to our depositors, employees, shareholders and our business strategy is to gear towards achieving this. This section covers the value we deliver to our shareholders and the nation at large. The Bank s policy has been to deliver best possible value in a manner that is consistent with the highest level of fairness and transparency. For the Bank, it has not been a case of building financial value and increasing profit at any cost, but rather participating in a process of creating value through fair and ethical means. Building sustainable value of all stakeholders is an important goal of the Bank. Maintaining capital adequacy Capital adequacy symbolizes the financial strength and stability of a bank. It limits the extent up to which a bank can expand its business in terms of risk-weighted assets. Like all commercial institutions, banks too constantly look at ways of expanding their operations by acquiring property, plant & equipment, opening branches, in addition to mobilizing loans and investing in other income generating assets. Regulatory capital requirements are, therefore, necessary to prevent banks from expanding beyond their ability to manage (over-trading), to improve the quality of bank s assets, to control the ability of bank s leverage to their growth and to lead to higher earnings on assets, leading to peace of mind of all the stakeholders. The Bank keeps a careful check on its capital adequacy ratio. Maintaining liquidity The liquidity policy of the Bank has always been to carry a positive mismatch in the interest earning assets and interest bearing liabilities in the 1 to 30 days category. ABL s liquidity remained at optimum level during the year. The liquid assets ratio stood at 43% percent (required 19 percent of total demand & time deposits) in December Market Share As on 31st December 2014 the Bank holds 4.31 percent of the total loans and advances and 5.82 percent of deposit balance, 4.56 percent of import and 3.53 percent of export of all banks of Bangladesh. Foreign remittance is percent of total national remittance figure. Item of Business National Figure ABL Figure Market Share Deposits 6,59, , % Loans & Advances 5,45, , % Import 3,44, , % Export 2,36, , % Remittance 1,13, , % Annual Report 2014 t 55

56 Products and Services 1. Deposit a) Taka Account Current Deposit (CD) Savings Deposit (SB) Fixed Deposit (FDR) Special Notice Time Deposit (SNTD) Non-Resident Special Taka Account (NRTA) Non-Resident Investors Taka Account (NRIT) Agrani Bank Pension Scheme (APS) Agrani Bank Bishesh Shanchay Scheme (ABS) Agrani Double Benefit Scheme (ADBS) Monthly Deposit Scheme (MDS) Monthly Income Scheme (MIS) Students Savings A/C (School Banking) Small Life Insurance Policy Holders A/C Farmers A/C Freedom Fighters A/C Other Beneficiaries A/C under Social Securities Program b) Foreign Currency Account Foreign Currency (FC) A/C Non-Resident Foreign Currency Deposit (NFCD) A/C Resident Foreign Currency Deposit (RFCD) A/C Exporters Retention Quota (ERQ) A/C 2. Loans & Advances a) Continuous Loan Cash Credit (Hypo) Cash Credit (Pledge) Secured Overdraft (SOD) b) Term Loan Inland Bill Purchase (IBP) Export Cash Credit Industrial Credit (IC) Housing Loan (General & Commercial) Consumer Credit Loan for Overseas Employment Weavers Credit c) Rural & Agro Credit Crop Loan Fishery Loan Animal Husbandry Loan Agri Machinary Loan Rural Transport Loan Swanirvar Loan Poverty Alleviation Loan d) Small and Medium Enterprise Loan Service Sector Loan Trading Sector Loan Manufacturing Sector Loan e) Import Finance Loan Against Imported Merchandise (LIM) Loan Against Trust Receipt (LTR) Payment Against Document (PAD) f) Export Finance Export Cash Credit Packing Credit (PC) Local / Foreign Bills Purchased (FBP) Loan Against Export Development Fund (EDF) Advance Against Cash Incentive (Subsidy, Assistance) 3. Treasury a) Money Market Maintaining CRR and SLR Call Money Transaction Term Placement (FDR) Treasury Bills Treasury Bonds Secondary Trading of Govt. Securities Repo Reverse Repo Custodian Services Other Investments 56

57 b) Foreign Exchange Market Selling Foreign Currency for Import Payment Buying Foreign Currency against Export Proceeds Fixation of Exchange Rate Foreign Currency Buying and Selling SWAP Transactions Forward Transaction Term Placement 4. Letter of Credit Letter of Credit - Sight Letter of Credit - Usance Back to Back L/C 5. Letter of Guarantee Advance Payment Guarantee Bid Bond Performance Guarantee Shipping Guarantee Guarantee - Others Standby Credit 6. Other Foreign Exchange Service Documentary Bill Collection Advanced Payment for Import & Export Foreign Remittance (Incoming & Outgoing) Foreign Currency Endorsement against Passport Issuance of Draft, TT Collection of Draft, Cheque, TC Opening of Student File, Medical File 8. Fund Transfer Inter-Branch Money Transfer SWIFT Telegraphic Transfer (TT) Issuing Foreign Draft Encashing Foreign Draft Bangladesh Electronic Fund Transfer Network (BEFTN) Bangladesh Automated Clearing House (BACH) Online Deposit to Accounts 9. Value Added Service Locker Service Utility Bill Collection 10. Merchant Banking Service Issue Management Underwriting Portfolio Management 11. Islamic Banking Service a) Deposit Al Wadiah Current A/C Mudaraba Savings A/C Mudaraba STD A/C Mudaraba Term Deposit Mudaraba Special Scheme Deposit b) Investment Bai Murabaha (Pledge) Bai Muazzal (Hypo) Higher purchase Shirkatul Meilk Bai Sal 7. Cash Service ATM Service Cheque Encashment Foreign Currency Annual Report 2014 t 57

58 58

59 Corporate Governance Annual Report 2014 t 59

60 Corporate Governance As a bank company ABL deals with public money and their endless expectation. As such,the principal objectives of Bank s corporate governance is to uphold transparency and accountability of all concerned in respect of its overall financial, operational and administrative policy-making and executive affairs including overall business activities, internal control, human resources management and development, cost etc. along with lending and risk management issues. Board Structure The Board of Directors as on consists of 12 members, including the Chairman as the head of the board of directors and the Managing Director & CEO as an ex-officio director. All the directors of ABL are non-executive directors except the Managing Director. Consequent upon the corporatization, the Board now exercises greater autonomy in running the organization more effectively than before. Supporting Committees The Board has three supporting committees - Executive Committee,Audit Committee, and Risk Management Committee. These supporting committees exclusively deal with the vision of the Board and plans as well as evaluate pre or post decision of the board. Independent Directors All members of the Board are nominated by the Government and each of them holds one share which is less than one percent of paid-up shares of the Bank. The Chairman of the Board is nominated by the Govenrment and duly approved by the board. One director is a Secretary of Government of the People s Republic of Bangladesh and all other directors are from different professions and private sectors. As per notification of Bangladesh Securities and Exchange Commission (Ref # SEC/CMRRCD/ / Admin/02-08, dated 20 February 2006, all of them can be justifiably considered as independent directors. Board Meetings Complying with the prudential guidelines for banks set by Bangladesh Bank, the board of directors with required quorum comprising not less than three members as stipulated in the articles of association of Agrani Bank Limited meets at least once in a month. 44 board meetings were held during the year 2014 as shown in the table below : Name of Directors Position in the bank Date of appointment Number of meetings attended Dr. Khondoker Bazlul Hoque Chairman (tenure ended on ) Arastoo Khan Acting Chairman to Dr. Zaid Bakht Chairman (appointed on ) Arastoo Khan Director A.K. Gulam Kibria, FCA (tenure ended on ) Director Engineer Md. Abdus Sabur Director K.M.N. Manjurul Hoque Lablu Director

61 Name of Directors Position in the bank Date of appointment Number of meetings attended Niaz Rahim Director Leave on medical grounds Advocate Balaram Podder Director Prof. Dr. Md. Abdur Rouf Sardar Director Shameem Ahsan Director Md. Altaf Hossain Molla Director A B M Kamarul Islam Director Hasina Newaaz Director Syed Abdul Hamid, PhD Managing Director & CEO Risk Management Committee To supervise and strengthen the risk management wing of the bank, a risk management committee comprising the following directors of the board has been formed on 21 September Sl. No. Name of Members Position In the Bank Status in the Committee Number of meetings attended 1. Arastoo Khan Director Chairman 3 2. A.K. Gulam Kibria, FCA (tenure ended on ) Director Member 1 3. Engineer Md. Abdus Sabur Director Member 3 4. Prof. Dr. Md. Abdur Rouf Sardar Director Member 3 5. Shameem Ahsan Director Member 1 Internal Control Management The board is always vigilant on the internal control system of the bank in order to attain and maintain satisfactory qualitative standard of its loan/investment portfolio. It reviews the reports submitted by its audit committee regarding compliance of recommendations made in internal and external audit reports and the Bangladesh Bank inspection reports. Audit Committee The Audit Committee has been formed as per BRPD circular No. 11, dated 27 October 2013 as well as Bangladesh securities and Exchange Commission no. SEC/ CMRRCD/ / 134/Admin/44, dated 07 August The Audit Committee consists of five members from the Board. All the members of the Committee are non-executive directors. The committee held 8 (eight) meetings in The number of meetings held by the committee has been shown in the table given below: Sl. No. Name of Members Status in the Bank Position in the Committee Number of meetings attended 1. Arastoo Khan Director Chairman 8 2. A.K. Gulam Kibria, FCA Director Member 3 (tenure ended on ) 3. Engineer Md. Abdus Sabur Director Member 8 4. Advocate Balaram Podder Director Member 7 5. Md. Altaf Hossain Molla Director Member 8 Annual Report 2014 t 61

62 Role of Audit Committee The Audit Committee has been playing a vital role in strengthening internal control and compliance functions of the Bank. It ensures all sorts of cooperation between the management and the ultimate supervisory authority the Board of Directors.The Committee identifies various risk factors that arise from the business activities of the Bank by periodically reviewing the audit reports for safe, sound and disciplined banking operations. Besides, the Committee gives time befitting directions on risk-based audit planning, reduction of the number of objections of the same nature raised by internal audit by categorizing them according to the nature of objections and re-defining them as serious and very serious objections. The committee works to ensure that the activities of the Bank are being carried out in accordance with the applicable rules and regulations of Bangladesh Bank, Bank Companies Act 1991, Companies Act 1994 and internal rules, regulations and policies of the Bank. Human Resources Management and Development The board frames and approves service rules relating to recruitment, promotion, transfer, disciplinary and punitive measures, human resources development etc. The chairman or directors in no way interfere into any administrative affairs including recruitment, promotion, transfer and disciplinary measures as executed under the set service rules. Recruitment and promotion to the immediate two tiers below CEO rests upon the board. Executive Committee To give directions for maintaining daily or routine activities and organizational discipline of the bank, an executive committee comprising 6 members from the board of directors shown in the table below has been formed as per BRPD Circular no-11 dated 27 October The committee gives decision on punishment to the guilty employee depending on the nature of irregularities committed, reviews divisional legal cases regarding appeal by the affected staff, officer for reinstatement to service, appeal for remission of punishment and security related matters concerning theft, burglary taken place in different branches at different times. Sl. No. Name of Members Position in the Bank Status in the Committee Number of meetings attended 1. Dr. Khondoker Bazlul Hoque 2. Dr. Zaid Bakht Chairman (tenure ended on ) Chairman (Appointed as chairman on ) Chairman 05 Chairman K.M.N.Manjurul Hoque Lablu Director Member Prof. Dr. Md. Abdur Rouf Sardar Director Member Shameem Ahsan Director Member A B M Kamarul Islam Director Member Hasina Newaaz Director Member 07 Responsibilities and Function of the Management To execute daily routine functions smoothly and implement policies approved by the board regarding credit, Internal control & compliance, asset-liability management, risk management, administration, operation, discipline etc. several committees namely Management Committee (MANCOM), Asset Liability Committee (ALCO), Credit Committee (CRECOM) comprising members from top management are in place. 62

63 Management Committee (MANCOM) The management committee (MANCOM) is mainly responsible for management of risks related to administration, operation, purchase, development, training, discipline and appeal etc. The committee places before the board for approval of its policy recommendations and guidelines regarding risks assessment, management, control and reporting. It also puts forward its recommendations on quantification process of risk demarcation, its use while capital allocation and relevance to annual budgeting & planning for board approval. It observes the precision and timeliness of risk reports on all activities of the bank. It is also responsible for introducing such a risk controlling culture that encourages the highest level of ethical behaviors among the employees. As far as risk related employees are concerned, the committee is also responsible for building a risk savvy smart workforce. Credit Committee (CRECOM) The committee is mainly responsible for implementation of risk management policies approved by the board. The credit committee deals with introduction of credit strategy after board approval proportionate to nature of debtor and business, interest rate, loan documentation, risk grading, standardization of credit analysis, proper valuation, scoring, reporting, auditing, classification, provisioning. The committee under the authority devolved on them by the board gives decision on new loan facility, rescheduling & reconsideration and approves, rejects, recommends or ratifies loan proposals. Asset Liability Management Committee (ALCO) Asset Liability Committee ensures adequate liquidity capital reserves and proper fund management to meet business needs and comply with statutory laws and regulations. ALCO performs balance sheet management in such a way that adequacy of liquidity and capital is maintained, ensuring proper application of fund diversification strategy in the light of source, term, instrument and currency. The Asset Liability Committee is also responsible for introducing and implementation of policies on capital, funding, asset allocation and liquidity. Compliance with Code of Conduct As part of upholding ethical business standard & practices, every employee of ABL has to comply with the code of conduct pertaining to the ABL service rule. All employees shall conform to and abide by these regulations, observe, obey all orders and directions which may, from time to time, given by any person or persons under whose jurisdiction, superintendence or control he may be placed. All employees should serve the bank honestly and diligently, use his/her utmost endeavour to promote the interest of the bank, maintain strict secrecy regarding the affairs of the bank. Customer Sovereignty Since customers are the driving force of the bank, ABL always tries to ensure customer sovereignty by providing the customers with the excellent services following the corporate norms & regulations. Depositors trust is protected by ensuring on-demand liquidity and giving the depositors fair contract terms & keen interest rate on various consumer products. As far as loans & investment is concerned, ABL makes investment in such sectors as are productive for the national economy while preserving the debtors interest in a way that they get fair lending rate and they do not become defaulters by post loan supervision and maintaining regular liaision with the debtors. Credit Rating The Bank appointed Credit Rating Information and Services Limited (CRISL) for credit rating of the Bank for the year 2014 as per directives of Bangladesh Bank. Directors Report to the Shareholders The Directors Report of ABL includes all statements regarding section 1.5 of Bangladesh Securities and Exchange Commision notification No. SEC/ CMRRCD/ / 134/Admin/ 44, dated 07 August 2012 in the directors report prepared under section 184 of the Companies Act, 1994 (Act No. XVIII of 1994) ( Pages ). Annual Report 2014 t 63

64 Status of Compliance Requirement of Bangladesh Bank s guideline for Corporate Governance BRPD circular no 16 dated Sl. No. Particulars 1. Responsibilities and authorities of the Board of Directors (a) Work-planning and strategic management (i) The Board shall determine the objectives and goals and to this end shall chalk out strategies and work-plans on annual basis. It shall specially engage itself in the affairs of making strategies consistent with the determined objectives and goals and in the issues relating to structural change and reorganization for enhancement of institutional efficiency and other relevant policy matters. It shall analyze/monitor at quarterly basis the development of implementation of the work plans. (ii) The Board shall have its analytical review incorporated in the Annual Report as regard the success/failure in achieving the business and other targets as set out in its annual work-plan and shall apprise the shareholders of its opinions/ recommendations on future plans and strategies. It shall set the Key Performance Indicators (KPIs) for the CEO and other senior executives and have it evaluated at times. Compliance Status Complied Not Complied Explanation for non Compliance (b) Lending and risk management (i) The policies, strategies, procedures etc. in respect of appraisal of loan/investment proposal, sanction, disbursement, recovery, reschedulement and write -off thereof shall be made with the Board s approval under the purview of the existing laws, rules and regulations. The Board shall specially distribute the power of sanction of loan/investment and such distribution should desirably be made among the CEO and his subordinate executives as much as possible. No director, however, shall interfere, directly or indirectly, in the process of loan approval. (ii) The Board shall frame policies for risk management and get them complied with and shall monitor at quarterly basis the compliance thereof. (c) Internal control management The Board shall be vigilant on the internal control system of the Bank in order to attain and maintain satisfactory qualitative standard of its loan/investment portfolio. It shall review at quarterly basis the reports submitted by its Audit Committee regarding compliance of recommendations made in internal and external audit reports and the Bangladesh Bank inspection reports. 64

65 Sl. No. Particulars Compliance Status Complied Not Complied Explanation for non Compliance (d) Human resources management and development i) Policies relating to recruitment, promotion, transfer, disciplinary action and punitive measures, human resources development etc. and Service Rules shall be framed and approved by the Board. The Chairman or the Directors shall in no way involve themselves or interfere into or influence over any administrative affairs including recruitment, promotion, transfer and disciplinary measures as executed under the set Service Rules. No member of the Board of Directors shall be included in the selection committees for recruitment and promotion to different levels. Recruitment and promotion to the immediate two tiers below the CEO shall, however, rest upon the Board. Such recruitment and promotion shall have to be carried out complying with the Service Rules. (ii) The Board shall frame the policies and procedures for Bank s purchase and procurement activities and shall accordingly approve the distribution of power for making such expenditures. The maximum possible delegation of such power shall rest on the CEO and his subordinates. The decision on matters relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of Bank s business shall, however, be adopted with the approval of the Board. (e) Financial management (i) The annual budget and statutory financial statements shall finally be prepared with the approval of the Board. It shall at quarterly basis review/ monitor the positions in respect of Bank s income, expenditure, liquidity, non-performing asset, capital base and adequacy, maintenance of loan loss provision and steps taken for recovery of defaulted loans including legal measures. (ii) The Board shall frame the policies and procedures for Bank s purchase and procurement activities and shall accordingly approve the distribution of power for making such expenditures. The maximum possible delegation of such power shall rest on the CEO and his subordinates. The decision on matters relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of Bank s business shall, however, be adopted with the approval of the Board. (f) Formation of supporting committees For decision on urgent matters an Executive Committee, whatever name called, may be formed with the Directors. There shall be no committee or sub-committee of the Board other than the Executive Committee and the Audit committee. No alternate director shall be included in these committees. Audit Committee Executive Committee Board found it prudent to transact all relevant issues in the full Board instead of Executive Committee (g) Appointment of CEO The Board shall appoint a competent CEO for the Bank with the approval of the Bangladesh Bank. Annual Report 2014 t 65

66 Sl. No. Particulars Compliance Status Complied Not Complied Explanation for non Compliance 2. Responsibilities of the Chairman and Board of Directors (a) As the Chairman of the Board of Directors (or Chairman of any Committee formed by the Board or any Director) does not personally possess the jurisdiction to apply policy making or executive authority, he shall not participate in or interfere into the administrative or operational and routine affairs of the Bank. (b) The Chairman may conduct on-site inspection of any Bankbranch or financing activities under the purview of the oversight responsibilities of the Board. He may call for any information relating to Bank s operation or ask for investigation into any such affairs; he may submit such information or investigation report to the meeting of the Board or the Executive Committee and if deemed necessary, with the approval of the Board, he shall effect necessary action thereon in accordance with the set rules through the CEO. However, any complaint against the CEO shall have to be apprised to Bangladesh Bank through the Board along with the statement of the CEO. (c) The Chairman may be offered an office-room, a personal secretary/assistant, a telephone at the office and a vehicle in the business-interest of the Bank subject to the approval of the Board. 3. Responsibilities of Adviser The adviser, whatever name called, shall advise the Board of Directors or the CEO on such issues only for which he is engaged in terms of the conditions of his appointment. He shall neither have access to the process of decision-making nor shall have the scope of effecting executive authority in any matters of the Bank including financial, administrative or operational affairs. 4. Responsibilities and Authorities of CEO The CEO of the Bank, whatever name called, shall discharge the responsibilities and effect the authorities as follows: (a) In terms of the financial, business and administrative authorities vested upon him by the Board, the CEO shall discharge his own responsibilities. He shall remain accountable for achievement of financial and other business targets by means of business plan, efficient implementation thereof and prudent administrative and financial management. (b) The CEO shall ensure compliance of the Bank Companies Act, 1991 and/or other relevant laws and regulations in discharge of routine functions of the Bank. (c) The CEO shall report to Bangladesh Bank of issues for violation of the Bank Companies Act 1991 or of other laws/regulations and, if required, may apprise the Board post facto. (d) The recruitment and promotion of all staff of the Bank except those in the two tiers below him shall rest on the CEO. He shall act in such cases in accordance with the approved Service Rules on the basis of the human resources policy and sanctioned strength of employees as approved by the Board. The Board or the chairman of any committee of the Board or any Director shall not get involved or interfere into such affairs. The authority relating to transfer of and disciplinary measures against the staff, except those at one tier below the CEO, shall rest on him, which he shall apply in accordance with the approved Service Rules. Besides, under the purview of the human resources policy as approved by the Board, he shall nominate officers for training etc. Not Applicable (No such Adviser) 66

67 Directors Statement of Responsibilities Bangladesh Bank sets out the responsibilities of the Directors of a bank. In accordance with their guidelines, the responsibilities of the Directors of Agrani Bank Limited encompass the following: a) Work plan and strategic management i) Responsible for determining the long term objectives and goals of the Bank and formulating yearly strategies and action plan for it. ii) They are to drive organizational change to improve the quality of the services rendered by the Bank in order to achieve the objectives and targets and to analyze the progress of implementation of work plan. b) Credit and risk management i) Responsible for making policies and procedures to evaluate, disbursement, recover, reschedule and write-off loans and advances as per applicable rules and regulations. ii) iii) They may delegate power to the CEO and other senior executives for approval of loans and advances as deemed necessary. Responsible for making risk management policies and monitor institutionalization. c) Internal control management They approve annual audit plan and evaluate the report of Audit Committee regarding the implementation of suggestions from internal audit, external audit, and Bangladesh Bank audit. d) Committee formation i) Responsible for constituting the Audit Committee from members of the Board of Directors. ii) Responsible for forming executive/other committees as per guideline of the Bangladesh Bank. iii) Responsible for forming Risk Management committees as per guideline of the Bangladesh Bank. e) Human resources management and development i) Responsible for framing the service rules and policies for appointment, promotion, retirement, transfer, punishment, training and development of human resources. ii) Responsible for approving ICT policies, introducing and developing Management Information system (MIS). f) Financial management i) Responsible for approval of the annual budget and statutory financial statements. ii) Responsible for evaluating the income, expenses, liquidity, capital adequacy, recovery of expired/ uncollected loans and advances, maintenance of provisions and legal actions to recover the loans and advances. iii) Responsible for framing purchase and procurement policies and procedures. iv) They would not interfere directly or indirectly with the approval of any loan proposals. g) Appointment of CEO i) Responsible for appointing a competent Chief Executive Officer (CEO) with the approval from Bangladesh Bank. ii) Responsible for determining the key performance indicators (KPI) of CEO and other senior executives and evaluate the same from time to time. h) They also perform other responsibilities as may be determined by Bangladesh Bank from time to time. For and on behalf of the Board of Directors Dr. Zaid Bakht Chairman Annual Report 2014 t 67

68 68

69 Risk Management Annual Report 2014 t 69

70 Risk Management Banking business operation carries inherent various types of risk that hampers business potentiality as well as its profitability prospects. The institute that can manage the risky events with expert hand can survive and steps forward in today s market economic era. Banking business is a business of borrowing and lending. So a potentiality of risk is inherent in any transaction. Considering this a risk, assessment is a must before introducing a product in market. Risk management in ABL As an SCB ABL is committed to serve the nation. It offers its services aiming not only profit aspect but mainly for fulfillment of state s commitments to the nation. To bring unbank people into banking stream farmer A/cs with Tk.10/- primary deposit are being opened. ABL extends loans in promising sectors specially in rural and remote area at lower interest rate to implement government financial and monetary policy. Taking this into consideration ABL adopts its risk management profile. Principles: Bangladesh Bank has formulated a guide line to address risk inherent in banking operation. Six risks have been identified as core risks. Namely they are : a) Credit Risk b) ALM Risk c) Money Laundering d) Foreign Exchange Risk e) ICC Risk and f) ICT Risk ABL has adopted six separate guide lines to address each risk portfolio in line with international practice. The objective of the guide lines are as follows: a) To make every transaction safe and sound b) To protect share holders interest c) To make the bank capable of being shock absorbing. Taking these into consideration bank s board of directors, with the help of management, affixes risk appetite. Separate committee like MANCOM, ALCOM, CRECOM have been formed to monitor and identify risky events. Management comes to know the real situation from them and be able to take preventive measure. A separate risk management division named Core Risk Management and Basel-II implementation division has been established. This division collects data/ information from concern division in BB s prescribed format and conducts a monthly meeting chaired by the MD and CEO of the bank participated by the concerned executives. The meeting discusses the movement of the risk parameter and if any deviation is found proactive measures are taken. With other compliances Basel accord in ABL is performed by this division. Its work span is mainly risk related. Credit Risk management principle The BOD determines Bank s risk appetite considering its over all portfolio coping with BB s adopted guide lines. Risk appetite is the main strategically considerable aspect to meet risky events that sets bank s (a) credit approval based on various client segments and products, economic sectors, geographical location, currency and maturity (b) target market within each lending segment and level of diversification/ concentration. Credit Risk Management The risks a bank carries inherent in its operation is mainly the credit risk. This risk arises from the failure of counter party to pay back the dues in stipulated time. The bank selects borrowers considering their capability as if the bank can get back its lending money with its spread. Following matters of the borrower are being taken into consideration: a) Credit Requirement: Credit requirement is measured prudently by the bank authority. Total cash flow statement, inventories and productivity, market share etc. are being taken into consideration. Excess cash injection may lead to diversify it to unproductive field. b) Repayment capability: The main view of extending credit is to help the borrower in his production and marketing. So a close monitoring and proper risk assessment from borrowers corner is performed. Production and marketing position of the counterparty in this regard are also verified. c) Documentation: Loan applications from counterparty are scrutinized carefully. Related documents are asked from them. Then they are examined and verified prudently by designated desk officer. A cross checking is performed by the manager and higher authority as assigned by the management. The documents are vetted and filed up properly. 70

71 d) KYC : Bank has prescribed a Know your customer (KYC) form to record customers personal and transactional profile as if any undue and ill motivated transaction can be identified and hedged. e) Collateral : Collateral against credit extension is the main tools to cover risk account. So its ownership documents, valuation, marketing aspect, time value etc. are examined primarily by the initiating officer (desk officer). Legal aspect of ownership is made confirm by enlisted legal advisers. Valuation is done by concern officers and if required it is done by enlisted surveyor. Officers concern visit spot physically and submit report to authority. The authority considers and approves after review. f) Insurance coverage : As strong precautionary measure of extended loans an insurance coverage is a must. So unwillingness to offer insurance coverage from the counterparty is to be mentioned as a deviation from commitment. g) Credit quality : To address risky phylum quality credit is offered in ABL. Quality credit is considered from (a) borrower aspect and (b) sectoral aspect The borrowers who are capable of generating income from their capital and assets and have willingness to fulfill their commitment are considered credit worthiness. The credit worthiness of a borrower is measured with some parameter. Those were resulted in from experience and research work. Each credit facility is extended in such a manner that it becomes rewarding and ensures superior return. Credit portfolio management Loan portfolio of ABL is closely monitored so that the standard loans may not be downgraded. The recovery and NPA management division monitors classified loans under the direct supervision of respective General Manager. The division present it to the line management and to the apex body of the bank. ABL has a system of tracking the loan account which is under risks or potential weakness of a material nature and which requires monitoring, supervision and close attention of the management. Early identification, prompt reporting and proactive measure can protect loans from being downgraded or negative shifting. Credit risk Mitigation A thorough assessment of risk, inherent or arisen afterwards, is done prudently before granting or extending credit facility and a plan in this regard is worked out. Our expert and professional team performs their duties with tense sincerity. Individual will be liable for phase he performs in total cycle of transaction and every transaction is being taken into consideration. For long term success of banking industry following areas are addressed in ABL : a) An appropriate credit friendly environment with the direct supervision of Board of Directors (BOD) has been established. With the directives of senior management delegated officials implement policy as per the instruction of Bangladesh Bank s guide lines. b) Credit operation is conducted under a sound credit granting process following affixed criteria to select quality borrower or counter party as the bank can achieve financial objective. c) Sound credit administration, prudent measurement and monitoring process is maintained in ABL. For this, some divisions like recovery and NPA management division, Internal control and compliance (ICC) divisions performs as watch dog to hedge any evolved risk. d) Problem loan management : ABL has a unique system to track problem loans. Early tracking and reporting makes management enable to take early remedial steps. Asset-Liability Management (ALM) Risk The Asset-Liability Management has been structured as a systemic process to earn a sufficient return while maintaining a comfortable surplus of assets beyond liabilities. Liquidity risk is the failure to meet obligations leading to an inability to support normal business activity and to meet liquidity regulatory requirements. Liquidity risk can arise due to market liquidity or funding liquidity. Market Liquidity risk is the risk of inability to sell assets due to lack of liquidity in the market. Funding Liquidity risk is the risk of inability to meet liabilities when they fall due or can only be met at abnormal high price. ALM is a balancing act, involving the continuous rearrangement of the two sides of the balance sheet to obtain reasonable returns-while providing adequate Annual Report 2014 t 71

72 capital, liquidity and responsiveness to both internal and external factors. Treasury is involved in identifying and measuring the risks associated in the business and accordingly minimizing or hedging those risks using various financial tools and products to stabilize the balance sheet and maximize profit for bank. For doing this, Treasury determines the adequacy of the liquidity position by analyzing historical funding requirements, current liquidity position, anticipated future funding needs, sources of funds, regulatory guidelines etc. For effective liquidity management, Asset-liability committee (ALCOM) members sit in monthly meeting and/or special meeting (if necessary) with ALCO paper to respond to the regular or unusual market behavior. ALCO also evaluates liquidity requirement and the pricing strategy of the bank and take important decisions related to Interest rate. Market scenarios, maturity gap analysis and re-pricing of products thereby taking effective measurement to monitor and control adverse liquidity positions. The formality and sophistication of risk management processes established to manage liquidity risk should reflect the nature, size and complexity of a banks activity. Sound liquidity risk management employed in measuring, monitoring and controlling liquidity risk is critical to the viability of the bank. Bank should have a thorough understanding of the factors that could give rise to liquidity risk and put in place the mitigating controls. In this regard, ABL has an overall flexible funding strategy to cover both short and long term liquidity needs. ABL actively manages its intra day liquidity positions and risks to meet payment and settlement obligations on a timely basis under both normal and stressed conditions. ABL maintains sufficient liquidity including a cushion of encumbered, high quality liquid assets, to withstand stress events. In 2014, the bank was able to generate sufficient funds to meet all of its financial commitments in a timely and cost effective manner. Money laundering risk Money laundering is the process by which the source and ownership of criminally derived wealth and property to confer on it a perception of legitimacy. Money laundering process accomplished in 3 basic stages such as Placement, Layering and Integration. Placement: The physical disposal of the initial proceeds derived from illegal activity. Layering: Separating illicit proceeds from their source by creating complex layers of financial transactions designed to disguise the audit trail and provide anonymity. Integration: The provision of apparent legitimacy to wealth derived criminally. If the layering process has succeeded, integration schemes place the laundered proceeds back into the economy in such a way that they re-enter the financial system appearing as normal business funds. Anti Money Laundering initiatives of ABL are not only for meeting compliance requirements but also act as catalyst in escalating Bank s business as well as reputation. As part of money laundering risk management and in an effort to guard against money laundering and terrorism financing transactions through banking channel, ABL has carrying out following activities: i) ABL has its own policy guidelines on Money laundering prevention and combating the financing of terrorism. ii) ABL has nominated CAMLCO, Deputy CAMLCO and BAMLCO who independently would make the bank compliant on AML matters. iii) ABL is maintaining a unique KYC system under the system of Customer Acceptance Policy, Customer identification Procedure, Monitoring of Transactions and Risk Management. iv) Transaction Profile (TP) is maintaining with proper description of the frequency and amount of transaction. KYC and TP are filled up at the time of opening account and updating transaction profile of the customers from time to time. v) Monthly Cash Transaction Report (CTR) is sent to Bangladesh Bank for the customers depositing or withdrawing cash BDT 1.00 million and above in any day. vi) Unusual/Suspicious transactions report(str) are reported to Bangladesh Bank. vii) Training and awareness programs are continuously held to make all employees alert about the issue. This holistic approach to risk management helps the bank achieve its goal in protecting the interest of shareholders and customers. Foreign Exchange Risk Foreign exchange risk management is fundamental for safe and sound management of all institution having exposure in foreign currencies. Foreign exchange risk is defined as the risk that a bank may suffer losses as a result of adverse exchange rate movement during a period in which it has an open position either spot or forward currency. 72

73 A comprehensive foreign exchange risk management program requires establishing and implementing sound and prudent foreign exchange risk management policies, developing and implementing appropriate and effective exchange rate management and control procedure. Agrani Bank Limited has formulated policies and manual as per directives of central bank with a view to reduce the foreign exchange risk. Bank also developed different strategies to control foreign exchange risk by setting limits on net open position by currencies, overall gross limit for forward transaction, maximum loss limits per deal and per day, counterparty limit etc.treasury division always monitors the market scenario of risk and manages the foreign exchange operation in such a way that earnings are not hampered against any adverse movement in market price.the foreign exchange risk of the bank is minimal as all the transaction are principally carried out on behalf of the customers against underlying L/C commitment and other remittance requirements. All the foreign exchange activities have been segregated into Front Office, Mid Office and Back Office Front Office i.e. Treasury Division manages and controls day-to-day trading activities under the supervision of Managing Director and CEO and suggestion/instruction of ALCO that ensures continuous monitoring of the level of assumed risk. Mid Office verifies deal and monitors limit. Back Office is responsible for deal confirmation,settlement of transaction, transferring fund to Nostro account,timely recording and reporting of information on exchange transactions and currency transfer etc. Reporting lines of these three offices are separate and independent to ensure risk minimization. All foreign exchange transactions are revalued at markto-market method on the month end according to Bngladesh Bank s guidelines. As on December 31, 2014 ABL maintained 38 Nostro accounts in different currencies to conduct FOREX operation. All Nostro accounts are reconciled fortnightly. Outstanding entries beyond 15 days are reviewed by the management for settlement purpose. Bank s Audit and Inspection Division is conducting regular audit to comply with the foreign exchange risk management policy. Audit findings are submitted to Internal Control and Compliance Division and are reported to the Board Audit Committee of the bank. Internal Control and Compliance (ICC) Risk Internal control and compliance is an important element of core risk management. Effective internal control and compliance system, efficient corporate governance, transparency and accountability are very important for the banking sector worldwide. Internal control system identifies the risk in the process, adopts mitigation measures and ensures compliance thereof. Current or prospective compliance risk to earnings and capital arises from violation or noncompliance with laws, rules, regulations, agreements, prescribed practices or ethical standards, as well as from the incorrect interpretation of laws and regulations. Proper internal control system integrates compliance risk management into overall risk management process. Internal control and compliance is a management process designed to achieve: Effective system of control; Effectiveness and efficiency of operations; Reliability of financial reporting; Compliance with applicable laws and regulations; Safeguard of assets. Internal control consists of five interrelated components, which are: i) Control environment ii) Risk assessment iii) Control activities iv) Information and communication v) Monitoring The operational performance of the Bank is dependent on efficient and sound internal control system. With this end in view, ABL has restructured its ICC activities as per MOU signed with Bangladesh Bank. Accordingly in September, 2013 ICC Manual was reviewed, updated and approved by the Board of Directors, where ICC is headed by a General Manager, at now, who is a professionally qualified Chartered Accountant. He has to place report on ICC directly to the Audit Committee of the Board of Directors and report to the Managing Director & CEO for administrative purpose. Internal Control & Compliance (ICC) of the Bank under direct supervision of Audit Committee of the Board has been implementing detail guidelines on ICC risk management to assess and mitigate risks and as part of it and as per the Bangladesh Bank instruction, the ICC has been divided into three independent functional units; namely- Audit & Inspection, Monitoring, Compliance. ICC of ABL consists of five Divisions for its effective operation headed by five Deputy General Managers. Annual Report 2014 t 73

74 These divisions are mentioned below: 1. Audit & Inspection Division-1 2. Audit & Inspection Division-2 3. Audit Monitoring Division 4. Audit Compliance Division (Internal Audit) 5. Audit Compliance Division (External Audit). As per the Bangladesh Bank instruction the ICC has been implementing Risk Based Internal Audit (RBIA) through core risk factors in the daily activities of the bank to assess the business risk as well as control risk associated with the branches. The Audit & Inspection Divisions prepare a risk based audit plan for every year. The audit plan is approved by the Board Audit Committee. In 2014, Audit and Inspection Division conducted 660 comprehensive audits (491 Branches, 27 Corporate Branches, 13 AD Branches, 49 District Main Branches, 31 Zonal Offices, 6 Circle Office, 16 Divisions and 27 others), 132% achievement than targeted. After completion of inspection, Audit & Inspection Divisions submit reports to ICC. At the end of the year, ICC places a summary report to the Board Audit Committee and Managing Director & CEO for information and necessary suggestions. The Audit Committee evaluates the irregularities, fraud and forgeries and important deviations detected by auditors on quarterly basis. In 2014, eight meetings of Audit Committee were held in which various audit and inspection reports, appropriateness of ICC, policy guidelines were reviewed, updated and approved for proper functioning of ICC. Monitoring is the Bank s own oversight of the control system performance. Effectiveness of the Bank s internal control should be monitored on an ongoing basis. Key or high risk items should be identified and monitored as the part of daily activities. In addition, there should be periodic evaluation. The Monitoring Division ensures its internal control process through review of Departmental Control Check List (DCFCL), Loan Documentation Check List (LDCL), Quarterly Operation Report (QOR) of branches and other mechanism. If notable deviations are found, they have to report before head of ICC for taking necessary actions to mitigate the risk. Audit Compliance of ICC will be responsible to ensure that the Bank complies with all regulatory requirements while conducting its business. Types of Compliance: 1. Internal Audit Compliance 2. External Audit Compliance (a) Chartered Accountancy Firms (b) Government Commercial Audit Compliance (c) Bangladesh Bank Inspection Compliance Audit Compliance maintains strong liaison with the regulators at all levels and ensures all guidelines received from regulatory authority are properly disseminated among the relevant divisions. Information & Communication Technology (ICT) Risk Management For banking industry, it is a necessity to develop practices and tools such as integrated ICT Management Framework and combine them to business objectives that direct ICT strategies, technologies and management practices for better management of ICT infrastructure. ICT risk is associated with the use, ownership, operation, involvement, influence and adoption of IT within an organization. ICT security management must ensure that the ICT functions are efficiently and effectively managed. The Bank should be aware of its capabilities to manage and handle ICT and be able to appreciate and recognize opportunities and the risk of possible abuses. The failure of ICT during the operations or in sustaining business objectives is not necessarily technological driven but also includes incompetence or lack of required skills, organizational culture in ICT adoption and development, and the link between business and ICT efforts. The success of the organization in adoption of ICT infrastructure is not just a question of the technology itself, but how effectively the organization manages the ICT infrastructure and aligns it with its business objectives. ABL has upgraded itself with the latest technology and has enriched its IT infrastructure by adopting different advantages of the technology. Some significant changes made in IT functions in recent times are as followsi) ABL developed its own ICT policies in line with the ICT guidelines of Bangladesh Bank. ii) ABL has been conducting training sessions on sensitive IT tasks (i.e. operational procedure, security procedures etc.) for relevant employees. iii) To ensure access to banking services round the clock 24/7, ATM plays a vital role. Agrani Bank Limited has its own 15 ATM network and more than 1138 Shared ATM booths located at different places of the country. 74

75 iv) ABL is strictly following Password Control, User ID Maintenance, Input Control, Network Security, Virus Protection and Access Control to Internet and ing. v) The bank uses its in-house software for processing most of the jobs performed in IT Division. Major jobs handled in IT division includes interbranch reconciliation, foreign bank accounts reconciliation (Nostro Accounts), Consolidation of Statements of Affairs/Income & Expenditure statements, personnel system, pay-roll of Head office employees etc. vi) Agrani Bank Limited has its website with updated information of the bank. ABL has also its own mail server to provide facilities to concerned officials of the bank vii) SWIFT Service is available in 35 AD (Authorized Dealer) branches of the bank to facilitate foreign trade operations that include quick disposal of LC s, foreign remittances etc viii) ABL conducts IT Audit in each branch on a periodic basis and taking necessary measures to ensure IT security and smooth IT operations. ABL is continuously upgrading its technological aspects to keep pace with modern banking arena. The Bank has grown significantly over the years in branch automation. 309 branches (as on December, 2014) are operating under T-24 Centralized Online Core banking software (CBS), rest of the branches will be brought under centralized On-line system in phases. Bangladesh Electronic Fund Transfer Network (BEFTN), online CIB System, e-gp (Electronic government procurement) service to facilitate e-tendering are also available in the bank. Other Risks In addition, the Bank also manages the risk, taking into consideration the reputation risk, liquidity risk, operational risk, market risk, credit concentration risk, interest rate risk, settlement risk, environmental and climate risk, residual risk and equity price risk which are described below: Reputation Risk Reputation Risk is the current or prospective risk arising from adverse perception of the image of the bank on the part of the customers, counterparties, shareholders, investors or regulators. Bank s CAMEL s rating, regulatory non-compliance, non-payment of banks commitment, customer complaint and service quality, regulatory penalties etc. are factors that cause this risk. The Bank manages the reputation risk ensuring the following: a) The Bank effectively develops its policies for risk management to refrain from committing violation of laws, regulations, best banking practices and consumer rights that could affect its reputation. b) Management anticipates and responds to change of a market or regulatory nature that affect its reputation in the market place. Residual Risk A Bank may mitigate risks by the way of collateral, but collateral can pose additional risks (legal, documentation and liquidity risks) which may deteriorate the impact of risk mitigation. For example, (1) The liquidation of collateral is either problematic or time consuming due to error of documentation or delay in legal proceedings. (2) Collateral were valued inappropriately (i.e. Overvaluation). Bank takes extra precaution through process strengthening and CRM application. Operational Risk Operational risk arises mainly due to inadequate or failed internal process, people and systems, or from external events (including legal risk). The bank is managing these risks through written procedures, regular training and awareness program. ICC Division of the bank monitors operational procedure of the bank. It undertakes periodical and special audit of the branches and divisions at the Head Office for review of the operation and compliance of statutory requirements. Liquidity Risk Liquidity Risk is defined as current or prospective threat to an institution s earnings and capital as a result of the possibility that it will not be able to meet its short term payment obligations at any point in time without incurring unacceptable cost or losses. ABL manages its liquidity in such a way that it avoids running into liquidity problem. This means that asset and Liability position both On and Off Balance Sheet were matched in such a way that the bank is able to meet its obligation immediately and continuously without adversely affecting its solvency. ABL has contingency plan approved by the Board for handling potential liquidity crisis. Annual Report 2014 t 75

76 Credit Concentration Risk Credit concentration risk may arise from credit exposures in the same economic or geographic sector and/or credit concentration in dependent industries which the Bank addresses through proper evaluation. Credit Concentration of ABL is used in a broader sense and includes the following: i) Concentration by economic purpose (sector). ii) Concentration by size of Loan Accounts/ in the name of a single borrower. iii) iv) Concentration by a legally connected group of borrowers. Concentration by region (geographical). v) Concentration by portfolio type (granularity). Any higher concentration will require maintaining higher amount of capital buffer due to risks in these categories. ABL has strategy to redistribute credit concentration and cap borrowings exposures to reduce capital requirement for these risks. Settlement Risk Settlement risk arises from non-realization of receivable from bills and counterparty commitments (both local and foreign). These are ABL s receivables and bank has to ensure strong supervision, monitoring and tracking for realization of receivables in time. This often requires review of counterparty s limit and exposure. The bank s monitoring and follow-up tracking system address the cause of these risks. Equity Price Risk Equity risk is defined as losses due to changes in market price of equity held. Mark to market valuation of the share investment portfolio is done to measure and identify the risk. To minimize equity price risk, diversification is enforced as per bank s own policy. Environmental and Climate change risk management Environmental risk is a facilitating element of credit risk arising from environmental issues. It refers to the uncertainty or probable losses that originate from any adverse environmental or climate change events (natural or man made) and the non-compliance of the prevailing national environmental regulations. Climate change impact can lead to the borrower not being able to continue the business activities and hence unable to service/ repay the financing taken from the bank. The overall purpose of Environmental Risk Management is to understand and manage risks that arise from environmental concerns. The specific purposes are to: a) Examine the environmental issues and concerns associated with potential business activities proposed for financing. b) Identify, evaluate and manage the environmental risks and associated financial implications arising from these issues and concerns. c) Enhance the credit risk appraisal process. Market Risk It is the risk of potential losses in the On-balance Sheet and Off-balance Sheet positions of a bank steams from adverse movement in market rates or prices such as interest rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices. Treasury Division manages the market risk and ALCO monitors the activities of Treasury Division in managing the risk. Interest Rate Risk Interest rate risk arises when a banks principal and interest cash flow (including final maturities) both On and Off- Balance Sheet, have mismatched repricing dates. The amount at risk is a function of the magnitude or direction of interest rate changes and the size and maturity structure of the mismatched position. ALCO of the bank monitors the interest rate movement on a regular basis. Giving emphasis on the above topics, Bangladesh Bank vide BRPD Circular No.01 dated: formulated the guidelines on Environmental Risk management (ERM) for Banks/ NBFIs. To comply with Bangladesh Bank guidelines and adoption thereof in our bank, ABL prepared its own guidelines which is the integral part of the banks credit risk management. ABL addresses issues possessing environmental risks before any financing is made. It recognizes Environmental Risk management to comply with regulatory standard and for ethical values. ABL encourages financing to alleviate negative environmental impact on business thereby mitigating/avoiding environmental risks. 76

77 LEARN ANTICIPATE ALIGN CHALLENGE DECIDE INTERPRET Disclosure Under Basel II Annual Report 2014 t 77

78 Disclosure Under Basel-II Qualitative and Quantitative Disclosures Under Pillar-III of Risk Based Capital Adequacy as of 31st December 2014 These disclosures have been made in accordance with the Bangladesh Bank BRPD Circular No-20 of 29 December 2009 as to Guidelines on Risk Based Capital Adequacy for Banks in line with BASEL-II. The aim of disclosure is to establish more transparent and more disciplined information so that stakeholders can assess the position of the bank regarding holding of assets and to identify the risks relating to the assets and capital adequacy to meet probable loss of assets. Basel-II Guidelines are structured on the following aspects: a) Minimum Capital Requirements to be maintained by a bank against credit, market and operational risks. b) Process for assessing the overall capital adequacy aligned with risk profile of a bank as well as capital growth plan. c) Framework of public disclosures on the positions of a bank s risk profiles, capital adequacy and risk management system. The major highlights of the Bangladesh Bank s regulations in this regard are: a) To maintain Capital Adequacy Ratio (CAR) at a minimum of 10 percent of Risk Weighted Assets. b) To adopt the standardized approach for credit risk in relation to implementation of Basel-II. c) To adopt Standardized (Rule Based) Approach for market risk. d) To adopt Basic Indicator Approach for Operational risk. e) To submit the returns to Bangladesh bank on a quarterly basis. Disclosure Framework The following detailed qualitative and quantitative disclosures as on December 31, 2014 are furnished in line with Bangladesh Bank s Risk Based Capital Adequacy (RBCA) guidelines. Scope of application Qualitative Disclosures a) The name of the top corporate entity in the group to which this guideline applies is Agrani Bank Limited. b) An outline of differences on the basis of consolidation for accounting and regulatory purposes, with a brief description of the entities within the group: 1) That is fully consolidated. ABL s Minimum Capital Requirement (MCR) has been arrived at both on Solo & Consolidated Basis. 2) The following items are given a deduction treatment. a) Remaining value of Valuation Adjustment b) Benefit of Deferred Tax Assets 78

79 Following are the 6 subsidiary companies of Agrani Bank Limited. i) Agrani Equity & Investment Limited Agrani Bank Limited is the parent company of Agrani Equity & Investment Ltd. which is established to perform merchant banking activities in Bangladesh. Name : Agrani Equity & Investment Ltd. Date of incorporation : Date of Commencement : Authorized Capital : Tk. 500,00,00,000 Paid up Capital : Tk. 400,00,00,000 Ownership Interest in Capital : Tk. 400,00,00,000 (100%) ii) Agrani SME Financing Company Limited Agrani Bank Limited is the parent company of Agrani SME Financing Company Limited which is established to perform retail banking activities in Bangladesh. Name : Agrani SME Financing Company Limited Date of incorporation : Date of Commencement : Authorized Capital : Tk. 500,00,00,000 Paid up Capital : Tk. 100,00,00,000 Ownership Interest in Capital : Tk. 100,00,00,000 (100%) iii) Agrani Exchange House Private Limited, Singapore Agrani Bank Limited is the parent company of Agrani Exchange House Private Limited, Singapore which is established to perform activities as remittance house. Name : Agrani Exchange House Private Limited, Singapore Date of incorporation : Date of Commencement : Authorized Capital : SGD 10,00,000 Paid up Capital : SGD 10,00,000 Ownership Interest in Capital : SGD 10,00,000 (100%) iv) Agrani Remittance House SDN, BHD, Malaysia Agrani Bank Limited is the parent company of Agrani Remittance House SDN, BHD, Malaysia which is established to perform activities as remittance house. Name : Agrani Remittance House SDN, BHD, Malaysia Date of incorporation : Date of Commencement : Authorized Capital : MYR 50,00,000 Paid up Capital : MYR 30,00,000 Ownership Interest in Capital : MYR 30,00,000 (100%) v) Agrani Exchange Co. ( Australia) Pty. Limited Agrani Bank Limited is the parent company of Agrani Exchange Co. (Australia) Pty. Limited which is Established to perform activities as remittance house. Name : Agrani Exchange Co. (Australia) Pty. Limited Date of incorporation : Date of Commencement : Authorized Capital : AUD 50,000 Paid up Capital : AUD 50,000 Ownership Interest in Capital : AUD 50,000 (100% owned by Agrani Bank Limited) Annual Report 2014 t 79

80 vi) Agrani Remittance House Canada, Inc. Agrani Bank Limited is the parent company of Agrani Remittance House Canada, Inc. which is established to perform activities as remittance house. Name : Agrani Remittance House Canada, Inc. Date of incorporation : Date of Commencement : Authorized Capital : CAD 100 Paid up Capital : CAD 100 Ownership Interest in Capital : CAD 1,00 (100% owned by Agrani Bank Limited) 3) That is neither Solo nor deducted (e.g. where the investment is risk- weighted).the accounts of the ABL s above mentioned subsidiary companies have been consolidated. However, the investment in these subsidiaries have not been deducted from the capital of ABL. c) Any restrictions or other major impediments on transferring of funds or regulatory capital within the group. Yes, there are. d) Quantitative Disclosures Since the Capital requirement of ABL has been arrived at both on Solo & Consolidated basis as such capital requirement of above mentioned subsidiaries have not been assessed: However, Agrani Bank Limited has maintained surplus capital on both Solo and consolidated basis. 2. Capital structure Qualitative Disclosures a) The composition of regulatory capital is different from accounting capital in line with Basel regime. As per the RBCA Guidelines each bank has to maintain CAR on Consolidated basis and solo basis as per instructions given by Bangladesh Bank from time to time. The minimum CAR for the year ended December 31, 2014 was 10%. The regulatory capital under Basel-II is composed of (i) Core Capital (Tier-1), (ii) Supplementary Capital (Tier-2) and (iii) Additional Supplementary Capital (Tier-3) {only for market risk}. However the capital structure of ABL consists of only Tier-1 and Tier-2 capital. Tier-1 Capital comprises of paid up Capital, Statutory Reserve, General Reserve and Retained Earnings. Tier-2 Capital consists of General Provision, Asset Revaluation Reserve and Revaluation Reserve for Securities and Equity instruments. Quantitative Disclosures (Taka in crore) b) The amount of Tier-1 capital, with separate disclosure is Solo Consolidated Particulars (A) Paid up capital Non-repayable share premium account Statutory reserve General reserve Retained earnings (11.74) (32.76) 80

81 Minority interest in subsidiaries Non-cumulative irredeemable preference shares Dividend equalization account Others (if any item approved by BB) Sub-Total (A) (B) Amount of Tier-2 Capital Amount of Tier-3 Capital - - c) Sub total amount of Tier-2 and Tier-3 capital (B) d) Deductions from Tier-1 & Tier-2 capital e) Total eligible capital (A+B) Capital Structure Qualitative Disclosures a) With regard to regulatory capital computation approaches (minimum capital requirement) the bank is following the approach as prescribed by Bangladesh bank. Below are risk wise capital computation approaches that the bank is currently applying: Credit Risk : Standardized Approach(SA) Market Risk :Standardized Approach(SA) Operational Risk: Basic Indicator Approach (BIA) Capital of the Bank In parallel to business growth, the bank effectively manages its capital to meet regulatory requirement considering the risk profile. Below are few highlights: Currently Bangladesh bank prescribed Minimum Capital Adequacy Ratio (CAR) is 10% whereas as on December, 2014 the CAR of the Bank was 10.44% During the same period Minimum Capital Requirement (MCR) of the bank was BDT crore and Eligible Capital was BDT crore Quantitative Disclosures (Taka in crore) Solo Consolidated b) Capital requirement for Credit Risk 1, c) Capital requirement for Market Risk d) Capital requirement for Operational Risk e) Total and Tier- 1 capital ratio 1.00 : :.58 For the consolidated group and Yes For stand alone Yes Annual Report 2014 t 81

82 4. Credit Risk Qualitative Disclosures a) Credit risk is the potential that a bank s borrower or counterparty fails to meet its obligations in accordance with the agreed terms. Bank is exposed to credit risk from its dealing with or lending to corporate, individuals, and other banks or financial institutions. As regards capital charge for Credit Risk, all assets in Banking Book have been risk-weighted strictly based on pre-specified weight as determined by Bangladesh Bank as per RBCA guidelines. However, the Bank has conducted proper mapping with the grading of Bangladesh Bank for those exposures or claims graded by External Credit Assessment Institution (ECAI). Definitions of past due and impaired (for accounting purposes). Definition of Past due and impaired credit: The bank follows Bangladesh Bank circulars and Guidelines related to classification and provisioning to define past due and impairment. Following Table summerizes the objective criteria for loan classification and provisioning as stipulated by the central bank vide BRPD circular No. 14 dated 23 September 2012: Type of credit facility Continuous Loan Demand Loan Fixed Term Loan more than Tk.10 lac Fixed Term Loan up to Tk.10 lac Short Term Agriculture & Micro credit Overdue period Loan classification SMA Sub standard Doubtful Bad & Loss Provision (%) 60 days or more 5% 60 days or more 5% 60 days or more 5% 60 days or more 5% 90 days or more 5% Overdue period 3 months or more but less than 6 months 3 months or more but less than 6 months 3 months or more but less than 6 months 6 months or more but less than 9 months 12 months or more but less than 36 months Provision (%) 20% 20% 20% 20% 20% Overdue period 6 months or more but less than 9 months 6 months or more but less than 9 months 6 months or more but less than 9 months 9 months or more but less than 12 months 36 months or more but less than 60 months Provision (%) 50% 50% 50% 50% 50% Overdue period Provision (%) 9 months or more 100% 9 months or more 100% 9 months or more 100% 12 months or more 100% 60 months or more 100% Description of approaches followed for specific and general allowances and statistical methods. The Bank has been following Standardized Approach for assessing the requirement of Capital charge against Credit Risk. The methodology used for this approach is to rate the exposures by the External credit Assessment Institution ( ECAI). Discussion on the bank s credit risk management policy: The Bank has a well structured delegation of credit approved authority for ensuring good governance and better control in credit approval system. Considering the key elements of credit risk, the bank has established Credit Risk Management framework in line with the Bank s Credit Risk Management (CRM) policy guideline and the Credit Risk Grading (CRG) system. This framework defines CRM structure, role, responsibilities and the processes to identify, quantify, and 82

83 manage risk under the given policy. The CRM policy is reviewed from time to time to adopt new techniques, policies for measurement, management and mitigation of risks in line with the socio-economic scenario and investment environment of the country. ABL s credit policy is based on the customers need for their business, earning capacity of borrower, the repayment capability of the business, and the value of collateral. The Credit policy of the bank focuses on the economic goal of the country and policies adopted by the Government. It strives towards the materialization of the Government policies leading to overall economic development of the country. Bank s Loan Review Policy is in place to address the problem loans and to initiate appropriate action to protect the Bank s interest on a timely basis. ABL strictly adheres to the regulatory policies; rules etc. as regard to credit management and are in compliance with regulatory requirements as stipulated by Bangladesh Bank from time to time. The objective of credit risk management is to minimize the different dimension of risks associated with credit exposures and to maintain credit risk profile of the bank within a tolerable range. Quantitative Disclosures b) Total (gross) Credit Risk Exposure broken down by major types of credit exposure is given below: (Taka in crore) Solo Consolidated Funded Non Funded Total c) Geographical distribution of exposures, broken down to significant areas by major types of credit exposure. Balance sheet exposure (Taka in crore) Region Urban Rural Total Dhaka Region Chittagong Region Khulna Region Rajshahi Region Barisal Region Sylhet Region Rangpur Region Mymensingh Region Comilla Region Faridpur Region Sub Total 21, Annual Report 2014 t 83

84 Off-Balance sheet exposure Region (Taka in crore) Dhaka Region Chittagong Region Khulna Region Rajshahi Region Barisal Region Sylhet Region 6.64 Rangpur Region Mymensingh Region 6.39 Comilla Region Faridpur Region 7.85 Total 7, d) Industry or counterparty type distribution of exposures, broken down by major types of credit exposure. Funded (Taka in crore) Agriculture & Fishery Jute & Jute Goods Transport, Storage & Communication Ship Breaking Textile & Readymade Garments Food & Allied Industry Construction & Engineering Pharmaceuticals & Chemicals Leather Sector Power Sector Professional & Services Housing Services Wholesale/ Retail Trading Personal (Staff & other personal Loan) Others Total

85 e) Residual Contractual maturity breakdown of the whole portfolio by major types of credit exposure. Total (Taka in crore) Repayable on Demand Not more than 3 months More than 3 months but not more than 1 year More than 1 year but not more than 5 years More than 5 years Total f) By major industry or counterparty type: Amount of impaired loans and if available, past due loans, provided separately: TK 2, crore Specific Provisions : TK. 1, crore General provisions : TK crore Charges for specific allowances and charge-offs during the period : Not Applicable g) Gross Non Performing Assets (NPAs) : TK. 3, crore. Non Performing Assets (NPAs) to Outstanding Loans & Advances: 0.17 : 1.00 Movement of Non Performing Assets (NPAs): Taka in crore Opening balance Additions during the year Reductions during the year ( ) Closing balance Movement of specific provisions for NPAs: Taka in crore Opening balance Provisions made during the period Recoveries of amount previously Written-off Provision add back during the year (.90) Transfer to Profit & Loss A/C - Less: Written-off (90.25) Closing balance Annual Report 2014 t 85

86 5. Equities: Disclosures for Banking Book Positions Qualitative Disclosures a) 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; ABL has considerable investment in equity shares of various companies and mutual funds and has active participation in the secondary market. Board, Executive and Investment committee oversee the management of investment portfolio and its associated risk to which bank may be exposed. In the investment process ABL strictly follows the internal policies and procedures put into place in this respect. ABL also holds unquoted equities intent of which is not trading and the same are shown as banking book asset in the balance sheet. As these securities are not quoted or traded in the bourses they are shown in the balance sheet at cost price and no revaluation reserve has been created against these equities. The equity markets are traditionally volatile with a high risk, high- returns profile. In an uncertain market place like the present, investors cannot afford to place all hope in only one product. Therefore, it is very important to protect the total investment value by means of diversification. Equity holdings under the banking book are recorded in the books of accounts at cost price. Quantitative Disclosures a) Value of investments disclosed in the balance sheet, as well as the fair value of those investments; for quoted securities, a comparison to publicly quoted share values where the share price is materially different from fair value. b) Provisions are kept against publicly quoted shares where the share price is materially different from fair value which is negative. However, no unrealized gain from publicly quoted share is accounted for. Only realized gain is accounted for in case of publicly quoted shares. c) The cumulative realized gains (losses) arising from sales and liquidations in the reporting period. d) Total unrealized gains (losses) Total latent revaluation gains (losses) Any amounts of the above included in Tier-2 capital. e) Capital requirements broken down by appropriate equity groupings, consistent with the banks methodology, as well as the aggregate amounts and the type of equity investments subject to any supervisory provisions regarding regulatory capital requirements. TK crore (Investment in unquoted share Tk Crore 1.25 Risk weight 10% Capital requirement) has been assessed against unquoted equity holdings and shown in MCR. 6. Interest rate risk in the banking book (IRRBB) Qualitative Disclosures a) The general qualitative disclosure requirement including the nature of IRRBB and key assumptions, including loan pre-payments and behavior of non-maturity deposits, and frequency of IRRBB measurement. Interest rate risk in the banking book arises from mismatches between the future yield of assets and their funding costs. Interest rate risk is the potential that the value of the on- balance sheet and the off-balance sheet positions of the bank would be negatively affected with the change in the interest rates. Changes in interest rates also affect the underlying value of the bank assets, liabilities and off-balance sheet instruments because the economic value of future cash flows changes when interest rates changes. Assets Liabilities committee (ALCO) monitors the interest rate movement on a regular basis. 86

87 The bank uses a simple Sensitivity Analysis as well as Duration Gap Analysis to determine its vulnerability against the adverse movement of market variables. For change in interest rates, currently, ABL is more risk sensible for its Assets comparable to its Liabilities. The Bank is on a continuous process of re-structuring in its assets and liabilities to make a balance between them and to bring the situation back in its favor for any change in interest rate. Quantitative Disclosures b) The increase (decline) in earnings or economic value (or relevant measure taken by the management) for upward and downward rate shocks according to management s method for measuring IRRBB, broken down by currency (as relevant). The Bank has been using Stress Testing based on guidelines published by Bangladesh Bank to determine the following: 1) Impact on earnings and 2) Impact on Capital requirements. 7. Market Risk Qualitative Disclosures a) Views of the Board of Directors (BOD) on trading/investment activities. Market Risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in different market variables, namely i) Interest rate movements; ii) Currency-foreign exchange rate movements; iii) Equity-Stock price movements; iv) Commodity-Commodity price movements The BOD of the Bank views the Market Risk as the risk to the bank s earnings and capital due to changes in the market level of interest rates of securities, foreign exchange and equities as well as the volatilities of those changes. Market Risk Management provides a comprehensive and dynamic framework for measuring, monitoring and managing interest rate, foreign exchange as well as equity, commodity price risk of a bank that needs to be closely integrated with the bank s business strategy. Methods used to measure market risk: The Bank uses the standardized (Rule Based) approach to calculate market risk for trading book exposures Market Risk Management system: Decision taken in the monthly meeting of Core Risk Management and ALCOM is an important tool for managing market risk. ALCOM is in place in the Bank to administer the system. Policies and processes for mitigating market risk: The only mitigation tool that the Bank uses is the Marking to Market for mitigating market risk. Besides, a set risk/ loss tolerance level is in place to mitigate market risk. Quantitative Disclosures b) The capital requirement is for: (Taka in crore) Interest rate risk Equity risk Foreign exchange risk Commodity risk 0.00 Annual Report 2014 t 87

88 8. Operational risk Qualitative Disclosures a) Views of BOD on system to reduce Operational Risk The BOD of the bank views risk as Operational Risk those arises from inadequate or failed internal processes, people and systems, or from external causes, whether deliberate, accidental or natural-inherent in all of the Bank s activities. The policy for operational risks management includes internal control and compliance risk approved by the Board, taking into account relevant guidelines of Bangladesh Bank. The audit committee of the Board directly oversees the internal control and Compliance activities with the overall object of mitigating all operational risks Performance gap of executives and staffs: Performance goals are most often attained by executives and staffs with a few exception. Potential external events: ABL, as a state owned commercial bank, is exposed to directed loans as the major external event. Policies and processes for mitigating operational risk: The ABL manages this risk through a chain based processes which are documented, authorized and independent. Transactions, events etc. that are being taken place at the operational level monitored and reported. If deviations are found, corrective actions are taken to bring the deviation back into the track. An MIS is in place and is used to identify record and assess any kind of operational risk and to generate appropriate regular management reporting. Since inefficiency is one of the root causes of operational risk, the Bank trains its operational staff on regular basis to make them more effective and efficient for mitigating operational risks. Operational Risk Management Framework has been designed to provide a sound and well-controlled operational environment and thereby mitigate the degree of operational risk. Approach for calculating capital charge for operational risk: The Bank uses the Basic Indicator Approach to calculate the capital requirement of its operational risk. Quantitative Disclosures b) Capital Requirements for operational risk Tk. in crore Particulars Solo Consolidated Capital requirements

89 Report of the Board Audit Committee Annual Report 2014 t 89

90 Report of the Board Audit Committee The Audit Committee of the Board was duly reconstituted by the Board of Directors of the Bank in compliance with Bangladesh Bank guidelines. Audit Committee efficiently conducts the monitoring activities of the Board and also plays an effective role in the supervision of execution of strategies and work plans so devised towards smooth operation of the Bank. The Committee supervises whether banking activities are carried out in line with the ongoing laws and rules and regulations imposed by the regulatory bodies as well as the Financial Statements, Internal Control Management and Audit System. The Board approved the objectives, strategies and overall business plans of the Bank and the Audit Committee assisted the Board in fulfilling its oversight responsibilities. The Committee reviewed the financial reporting process, the system of internal control and management of financial risks, the audit process, and the bank s process for monitoring compliance with laws and regulations and Agrani Bank s own code of business conduct with the best practice. Composition As per regulatory guidelines stipulated vide Bangladesh Bank BRPD Circular No.11 dated October 27, 2013, the composition of the Audit Committee of a Bank shall comply with the following: i. Members of the committee shall be selected from among the Directors of the Board; ii. Audit Committee of the Board shall comprise maximum 05 (five) members; iii. Audit Committee shall be constituted with those members of the Board, who are not included in the Executive Committee; iv. Members shall be elected for a term of 3 (three) years; v. Company Secretary of the Bank shall be secretary of the Audit Committee. Roles and Responsibilities of the Audit Committee: (i) Internal Control 1. Evaluate whether management is setting the appropriate compliance culture by communicating the importance of internal control and the management of risk and ensuring that all employees have clear understanding of their roles and responsibilities; 2. Review management s actions in building computerization of the bank and its applications and Bank s Management Information System (MIS); 3. Consider whether internal control strategies recommended by internal and external auditors have been implemented by the management; 4. Consider reports relating to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authority and place it before the Board after reviewing whether necessary corrective measures have been taken by the management. (ii) Disclosures of Financial Reporting 5. Audit committee will check whether the financial statements reflect the complete and concrete information and determine whether the statements are prepared according to existing rules & regulations and standards enforced in the country and as per relevant prescribed accounting standards set by Bangladesh Bank; 6. Discuss with management and the external auditors to review the financial statements before its finalization. (iii) Internal Audit 7. Audit committee will monitor whether internal audit working independently from the management. 8. Review the activities of the internal audit and the organizational structure and ensure that no unjustified restriction or limitation hinders the internal audit process; 9. Examine the efficiency and effectiveness of internal audit function; 90

91 10. Examine whether the findings and recommendations made by the internal auditors are duly considered by the management or not. iv) External Audit 11. Review the performance of the external auditors and their audit reports; 12. Examine whether the findings and recommendations made by the external auditors are duly considered by the management or not. 13. Make recommendations to the board regarding the appointment of the external auditors. All recommendations/ observations of the Committee were recorded in minutes form. Activities during the year During the year 2014, the Committee carried out the following activities: I. Reviewed status reports of internal audit to ensure that appropriate actions had been taken to implement the audit recommendations. II. As per the instruction given by the Bangladesh Bank through MoU the Committee approved updated ICC Policy and ICC Manual of the Bank. v) Compliance with existing laws and Regulations 14. Review whether the laws and regulations framed by the regulatory authorities (Central Bank and other bodies) and internal regulations approved by the Board are being complied with. vi) Other Responsibilities III. IV. The Committee directed the division concerned to organize workshop on audit monitoring and out reach workshop on audit compliance under Internal Control and Compliance. The Committee recommended organizing risk based audit training and workshops to categorize the branches on risk basis. 15. Submit compliance report to the board on quarterly basis on regularization of the omission, fraud and forgeries and other irregularities detected by the internal and external auditors and inspectors of regulatory authorities; 16. External and internal auditors will submit their related assessment report, if the committee solicit; 17. Perform other oversight functions as desired by the Board of Directors and evaluate the committee s own performance on a regular basis. Composition of Audit Committee in Agrani Bank Limited The members of the Audit Committee are: 1. Arastoo Khan 2. A.K. Gulam Kibria, FCA 3. Engineer Md. Abdus Sabur 4. Advocate Balaram Podder 5. Md. Altaf Hossain Molla Meeting of the committee According to applicable rules and regulations, 08(Eight) meetings of the Committee were held in the year The Committee from time to time invited the Managing Director, the Head of Internal Control & Compliance and other responsible officials entrusted with internal control activities or any other personnel to participate in their meeting, as deemed necessary. V. The Committee monitored the progress of implementation status of Audit plan 2013 as to its consistency and approved the Annual Audit Plan-2014 of the Bank and monitored and reviewed the effectiveness of Risk Based Internal Audit function. VI. VII. VIII. IX. The committee finalized the Financial Statements of the Bank as on for approval of the Board and monitored the integrity of the financial reporting process through ensuring compliance to accounting policies, standards and principles, oversee performance of external auditors. The Committee directed the authority concerned to minimize audit objections through categorization of objections and monitored internal control and business risk management process. The Committee also advised quick disposal of pending audit objections internal and external both. The Committee advised the management to be cautious so that no loans and advances become classified any more. X. The Committee recommended diversifying loans according to sector-wise importance. XI. XII. The Committee also instructed that effective steps should be taken to recover rescheduled loans. The Committee analyzed the inspection report by Bangladesh Bank Audit on the Bank. Annual Report 2014 t 91

92 Arastoo Khan, Chairman of the Board Audit Committee is Presided over Audit Committee meeting XIII. Reviewed Agrani Bank s Business Risk Management Framework, including the top risks for the Banking business as well as deep dive of key risks to assess and evaluate the relevance and robustness of mitigation plans. XIV. The committee approved four numbers Self- Assessment of Anti-Fraud Internal Control as instructed Bangladesh Bank through the DOS Circular Letter No.17 dated November 07, Self-Assessment of Anti-fraud Internal Controls For identifying the strengths and weaknesses of internal control and compliances concerning the major area of operations of banks, namely, general banking, credit portfolio, information and communication technology, Bangladesh Bank (BB) has introduced a Questionnaire based checklist for Self-Assessment of Anti-Fraud Internal Controls in Under reporting framework, banks should submit the filled-in questionnaire with relevant supporting papers to BB on quarterly rest. ABL has been submitting this statement to BB on quarterly rest for ensuring the regulatory compliance and taking measures for improvement of the Bank s internal control and compliance system, where necessary. The summery of Self-Assessment of Anti-fraud internal controls of ABL is as following: The summery of Self-Assessment of Anti-fraud internal controls of ABL Items (No. of item are 53 but no. of question are 80) Period Complied No- (fully/partial) Complied Total No % No % No % Q1 (Jan- Mar) % 12 15% % Q2 (Apr- Jun) % 12 15% % Q3 (Jun- Sep) % 12 15% % Q4 (Oct- Dec) % 11 14% % Q1 (Jan- Mar) % 04 05% % The compliance of ABL regarding Self-Assessment of Anti-fraud internal controls questionrs is increeasing positively Acknowledgements The Audit Committee expresses its sincer thanks to the respected Members of the Board, Management and the Auditors for the continuous support. For and on behlf of the Audit Committee Arastoo Khan Chairman, Board Audit Committee 92

93 Internal Control & Compliance of Agrani Bank Limited Annual Report 2014 t 93

94 Internal Control and Compliance of Agrani Bank Limited Banking operations involves both inherent and acquired risks in the pursuit of value creation. To avoid the complexities and risk arises out of those activities some sort of internal corrective measures must be there to control. The issues of effective internal control systems, corporate governance, transparency and accountability, and regulatory compliance have become prime need for high levels of performance. Thus internal control is now being termed as an integral part of the daily activities of a bank. So that the Bank s management and stakeholders can confidently, assure that the Bank s service delivery systems are efficient, safe and compliant with all their expectations. In turn, audit activities are the most important means of reinforcing control systems through the regular review of operations. Internal Control & Compliance (ICC) of the Bank under direct supervision of Audit Committee of the Board has been implementing detail guidelines on ICC risk management to assess and mitigate risks. Internal control and compliance is a management process designed to achieve: Effective system of control; Effectiveness and efficiency of operations; Reliability of financial reporting; Compliance with applicable laws and regulations; Safeguard of assets. Internal control consists of five interrelated components, which are: Specify Objectives Control Environment Monitoring Risk Assessment Information & Communication i) Control environment ii) Risk assessment iii) Control activities iv) Information and communication v) Monitoring Control Activities ICC is headed by a General Manager, at now, who is a professionally qualified Chartered Accountant. He has to place report on ICC directly to the Audit Committee of the Board of Directors and report to the Managing Director & CEO for administrative purpose. ICC of ABL consists of five divisions for its effective operation headed by five Deputy General Managers. These divisions are mentioned below: 1. Audit & Inspection Division-1 2. Audit & Inspection Division-2 3. Audit Monitoring Division 4. Audit Compliance Division (Internal) 5. Audit Compliance Division (External) For effective audit ICC arrange several meeting. Audit /inspection/compliance/monitoring issues are presented and discussed in that meeting. Suggestions derived from that meeting, if needed ICC placed it to Audit Committee meeting. Internal Control and Compliance Policy of Agrani Bank Limited In the light of Bangladesh Bank Prudential guideline and regulation of Memorandum of Understanding 2013 (MoU) signed between Agrani Bank Limited and Bangladesh Bank Internal Control Compliance (ICC) Policy-2013 is prepared. Which is approved in the 351st meeting of the board of Directors vide memo no.1213/13 dated 26/12/2013.It is circulated vide Instruction circular no. ICC/AMD/27/2014 dated 10/02/2014. Internal Control and Compliance Manual of Agrani Bank Limited In light of prudential guideline and MoU with Bangladesh Bank, ICC Manual has approved by BOD of Agrani Bank Ltd. through Memo No. 1062/13 dated 29/09/2013 in 337th Board meeting. This ICC manual has come into force from 29/09/2013. After approval ICC issued an Instruction Circular No. ICC/101/2013 dated 04/11/2013 to all branches and divisions of Head Office regarding responsible for the implementation of ICC Manual. All rules, regulations, policies and procedures of previous manual will be null and void after the execution of the ICC Manual. Audit Committee of Agrani Bank Limited The Audit Committee has been playing a vital role in strengthening internal control and compliance functions of the Bank. It ensures all sorts of co-operation between the management and the ultimate supervisory authority the Board of Directors.The Committee identifies various risk factors that arise from the business activities of the Bank, by periodically reviewing the audit reports for safe, sound and disciplined banking operations. Besides, the Committee gives time befitting directions on preparing risk-based audit planning, reduce the number of objections of the same nature raised by internal audit by categorizing them according to the nature of objections and re-defining them as serious and very serious objections. 94

95 The committee works to ensure that the activities of the Bank are being carried out in accordance with the applicable rules and regulations of Bangladesh Bank, Bank Companies Act 1991, Companies Act 1994 and other rules, regulations and policies of the Bank. The Audit Committee consists of five members of the Board of Directors. All the members of the Committee are non-executive Directors. There are eight meetings held regarding ICC in 2014 where 20 Memo s are approved by the audit Committee. The efficiency, effectiveness and achievement of ICC in the year 2014 Audit and Inspection As per the Bangladesh Bank instruction the ICC has been implementing Risk Based Internal Audit (RBIA) through core risk factors in the daily activities of the bank to assess the business risk as well as control risk associated with the branches. The Audit & Inspection Divisions prepare a risk based audit plan for every year. The audit plan is approved by the Board Audit Committee. In 2014, Audit and Inspection Division conducted 660 comprehensive audits (491 Branches, 27 Corporate Branches, 13 AD Branches, 49 District Main Branches, 31 Zonal Offices, 6 Circle Office, 16 Divisions and 27 others), 132% achievement than targeted. After completion of inspection, Audit & Inspection Divisions submit reports to ICC. ICC places a summary report to the Board Audit Committee and Managing Director & CEO for ICC Organogram of ABL Board of Directors Audit Committee of the Board Managing Director & CEO Head of Internal Control & Compliance (GM) Audit & Inspection Division Audit Monitoring Division Audit Compliance Division Staff position for GM s Secretariat DGM Audit & Inspection Divn. (all other than AID-2) AID-1 DGM Audit & Inspection Division (all AD Br. & H/O Div.) AID-2 DGM Audit Monitoring Division DGM Audit Compliance Division (Internal) DGM Audit Compliance Division (External) Nil 8 AGM 13 AGM 3 AGM 4 AGM 3 AGM Nil 12 SPO 26 SPO 11 SPO 8 SPO 8 SPO 3 SPO 20 PO 27 PO 11 PO 9 PO 8 PO 3 PO/SO 56 SO 22 SO 11 SO 10 SO 10 SO 13 Officer 5 Officer 11 Officer 6 Officer 5 Officer Nil 8 NC Staff 3 NC Staff 5 NC Staff 2 NC Staff Sub Total= 212 Sub Total= 51 Sub Total= 78 Sub Total= 9 Grand Total ( )= Auditors out of 212 staff of Audit & Inspection Division will be engaged in Concurrent Audit Annual Report 2014 t 95

96 information and necessary suggestions in evrey quater end. The Audit Committee evaluates the irregularities, fraud and forgeries and important deviations detected by auditors on quarterly basis. In 2014, eight meetings of Audit Committee were held in which various audit and inspection reports, appropriateness of ICC, policy guidelines were reviewed, updated and approved for proper functioning of ICC. Audit Monitoring Monitoring is the Bank s own oversight of the control system performance. Effectiveness of the Bank s internal control should be monitored on an ongoing basis. Key or high risk items should be identified and monitored as the part of daily activities. In addition, there should be periodic evaluation. The Monitoring Division ensures its internal control process through review of Departmental Control Check List (DCFCL), Loan Documentation Check List (LDCL), Quarterly Operation Report (QOR) of branches and other mechanism. If notable deviations are found, they have to report before head of ICC for taking necessary actions to mitigate the risk. In the year 2014, Audit Monitoring Division achieved its full target through effectively serving the following activities: i) Self Assessment of Anti Fraud Internal Controls ii) Audit through Internal Control Team (ICT) iii) Risk Based Internal Audit (RBIA) iv) Issue Based Audit/Inspection Team v) Work Shop to outreach vi) Data collection & analysis through DCFCL, LDCL, QOR (Daily, Monthly, Quarterly), etc. Audit Compliance (External) Audit Compliance (External) of ICC is responsible to ensure that the Bank complies with all regulatory requirements while conducting its business. This Division is responsible to compliance of Chartered Accountancy firms Audit Government Commercial Audit Bangladesh Bank Inspection etc. In 2014 Bangladesh Bank Audit Team has inspected 254 branches and raised 4,789 objections. Previous number of unsettled objection was 755. During the year 4,215 objections has been settled. In 2014 Commercial Audit team has conducted 175 comprehensive audits and 4,315 objection has been raised. Previous number of unsettled audit objection was 3,964. of them 477 objections has been settled and 490 objection has been recommended for settling during the year. The Compliance Divisions of ICC maintains strong liaison with the regulators at all levels and ensures all guidelines received from regulatory authority are properly disseminated among the relevant divisions. Audit Compliance (Internal) Audit Compliance (Internal) of ICC is responsible to ensure that the Bank complies with all regulatory requirements while conducting its business. This Division is responsible to compliance of Internal Audit and Inspection. During 2014 Internal Audit Team has inspected 16 head Office Division, 6 Circle Office, 31 Zonal Office and 584 branches and raised 31,652 objections. Previous number of unsettled objection as on 31/12/2013 was 46,972. During the year 51,817 objections have been settled. Number of unsettled objections as on 31/12/2014 was 26,807. The Compliance Divisions (Internal) of ICC maintain liaison with at all levels within the organization. Targeted from the scope of Internal Audit and Inspection of ABL Targeted Achievement in 2014 Achievement Annual Audit Plan for 2015 Corporate (all are AD) Branches Authorized Dealer (AD) Branches District Head Quarter Branches Branches Zonal Office Circle Office Head Office Division Corporate Branch (yearly two times) Issue Based Audit/Inspection (Inquiry) Others 11-6 Total Achievement in % 96

97 Rewarding Assessment Training Selection Attraction Human Resource Management and Development Annual Report 2014 t 97

98 Human Resource Management and Development Human Resource is the most valuable assets of an organization. Modern organizations are more conscious about the best utilization of their human resources. Now the Bank management is facing many challenges arising from globalization, competition, social changes, profitability and sustainability. They can address these challenges with the help of these human resources. The success of any organization depends on the proper, efficient and effective management of the human resources. HR Planning Division is doing some work in the name of human resource management. The basic work of HR Planning Division is to formulate human resource management policy, to maintain the personal file of every staff and officer, maintain the performance appraisal, make the PRL list and inform to concerned employee in due time, sanction increment, encashment of leave, settlement of retirement benefit, leave sanction inside and outside of Bangladesh, permit higher studies, update the human resource management information system and to verify the freedom fighter s certificates from the related ministry. Existing staff strength of ABL as on 31 December 2014 is given below: SL No Name of post Existing as on Managing Director & CEO 1 2. Deputy Managing Director 2 3. General Manager Deputy General Manager Chief Medical Officer(on contract) 1 6. Assistant General Manager Senior Principal Officer/Equivalent Principal Officer/Equivalent 1, Executive Engineer Senior Officer/Equivalent 3, Assistant Engineer Officer/Equivalent 4, Sub-assistant Engineer Clerical Non Clerical 2,300 Total 13,414 a) Organogram Corporatization has necesseciated the Bank to restructure its existing organogram. As such, necessary steps have been taken to redefine the portfolios and functional jurisdictions of GMs, DGMs and Heads of Zones. b) Promotion In order to remove the monotonous mood, increase social prestige, motivate employees a number of 2,044 were given promotion. 98

99 Dr. Syed Abdul Hamid is speking as the Chief Guest in a traning course c) HR information system At the end of 2014, a total number of 13,414 employees are working in ABL. The information of executives, officers and staffs is being updated regularly through HR division. d) Action plan for 2015 To fillup the vacant post through promotion and direct recruitment, by which the Bank can maintain our productivity & service standard. To ensure the right man in right place in right time for maximizing our profitability. A four years term man power planning and organogram ( ) has been filled up through promotion & recruitment. The Management has planned to depute AGM as branch head in every A grade & district headquarter branches. e) Training and Development Training is a proven instrument for human resources development. It presents a prime opportunity to enhance the base of knowledge of employees. A structured training and development program ensures to build up skilled workforce. Agrani Bank Training Institute has been working hard for developing human resources full of potentiality, creativity, skill, integrity and motivation. Agrani Bank Training Institute (ABTI) was established in 1976 and is entrusted with the responsibility of designing course curriculum, reading materials, and course contents for conducting training for the purpose of enhancing professionalism and administrative efficiency of the executives and officers of the bank. Since its inception in 1976 till 2014, ABTI has covered a total number of 74,523 executives/officers/staff under different banners of training through 2225 courses/ workshops. ABL has covered 4,355 participants by conducting 109 courses/ workshops in 2014 alone. Risk management is the key focus for banks. Keeping it in mind, in 2014, ABTI has conducted workshops named & styled as Risk Based Capital Management in Banks, which has been designed for sixty four executives. Besides the following workshops related to risk management were conducted: Annual Report 2014 t 99

100 Risk management is the key focus for banks. Keeping it in mind, in 2014, ABTI has conducted workshops named & styled as Risk Based Capital Management in Banks, which has been designed for executives. Besides this the following workshops related to risk management and other financial issues were conducted: SL o. Name of Course Level of Participants No of Course No of Participants 1 Credit Risk Management Credit Officers Credit Policy & Credit Risk Management AGM Training of Trainers (TOT) on Credit Policy & Credit Risk Management. SPO to AGM Internal Control & Compliance Officer & above Money Laundering Prevention BM/ BAMLCO Calculation of Capital Adequacy under BASEL-II AGM to Officer Workshop on Environ. Risk Management Officer & above TOT on Green Banking (BIBM) SPO & Above 1 30 From the year 2009 to 2014 a huge number of probationary officers were included in manpower of ABL. To equip all of them with the banking activities, ABTI undertook comprehensive program both at Dhaka and outside Dhaka. In 2013, Foundation Courses conducted by ABTI are as under: SL o. Name of Course Level of Participants No of Course No of Participants 1) Banking Foundation Course Senior Officer ) Banking Foundation Course Officer ) Banking Foundation Course Officer (Cash) ) Banking Foundation Course Promoted Officer Apart from the above, ABTI has organized different courses for enhancing knowledge & skills of existing officers and of those who have completed the banking foundation course. They are as follows: SL o. Name of Course Level of Participants No of Course No of Participants 1 Soft Skill Development SPO & Above Green Banking DGM/AGM/SPO SME & Micro-credit SO to SPO Foreign Trade & Foreign Exchange SO to SPO Credit Operation and Management SO to SPO Branch Management SO to SPO / B.M / 2nd Officer

101 Dr. Syed Abdul Hamid, MD. & CEO of ABL is seen with the trainees of the Bank in photo sesion at BIBM In 2014, a good number of Executives & Officers have participated the various training /workshops conducted by other Training Institutes in Bangladesh and abroad. Below is 1 Total number of participants sent to BIBM in Total number of participants sent to BBTA in Total number of participants sent to other local training institutes in Officers/Executives participated in foreign workshops 47 Moreover, ABTI has organized the following workshops related to Online Banking & Information Technology: In 2014, a good number of Executives & Officers have participated the various training /workshops conducted by other training institutes in Bangladesh and abroad which is shownd in the following table: SL o. Name of Course Level of Participants No of Course No of Participants 1 T24 Online Banking Software (Retail + Credit Module) Officer & above An Introduction to T-24 Soft. Concern Officer E-Commerce, E-Banking & E-Government (BUET) Concern Officer PC MS Office (Evening) Officer & above 1 27 For the year 2014, a comprehensive need based training course curriculum has been designed by ABTI and the same has duly been approved by Board of Directors, in which 4,355 participants will be included in 109 courses/workshops. In the training program of 2014, emphasis has been given on training up the newly recruited officers by conducting banking foundation course. In this regard, ABTI along with its 7 outreach centers will conduct banking foundation courses throughout the year. Agrani Bank Training Institute has been working hard for developing human resources full of potentiality, creativity, skill, integrity and motivation. Annual Report 2014 t 101

102 102

103 Corporate Social Responsibility Annual Report 2014 t 103

104 Corporate Social Responsibility Corporate Social Responsibility The role of business, in worldwide and especially in the developing countries, has evolved over the last few decades from classical profit maximizing approach to a social responsible approach. There are many reasons for shifting the role of business from classical concept to a social responsible approach. Enterprises create wealth and job opportunities for the society and on the other hand, they pollute and destroy environment and ecology with the devastating impact on human health and bio-diversity worldwide. The concept of social responsibility of a company is recent phenomenon but many observers agree that the globalization has spurred its growth and prominence. Primarily Corporate Social Responsibility (CSR) starts with the consideration of social implications by any corporate body which is ultimately reflected through its initiatives towards betterment of the disadvantaged peoples of a society. As such in broadly defining, CSR refers to the voluntary role of business towards building a better society and cleaner environment beyond its financial commitments and regulatory obligations. Considering importance of CSR, Bangladesh Bank since June 2008 has officially started encouraging towards mainstreaming CSR in banks and financial institutions of Bangladesh. As a stakeholder of the society, Agrani Bank Limited is keen to augment CSR activities gradually in the days to come. Agrani Bank Limited passionately believes that a better society is fundamental precondition for a better business environment. Nevertheless, CSR is viewed as one of the core corporate values of the Bank. In its millennium summit held at the UN Head Quarters, New York, USA in 2000; the United Nations set eight goals popularly known as Millennium Development Goals (MDGs), such as: i) eradicate extreme poverty and hunger, ii) achieve universal primary education, iii) promote gender equality & empower women, iv) reduce child mortality, v) improve maternal health, vi) combat HIV/AIDS, Malaria and other diseases, vii) ensure environmental sustainability and viii) develop a global partnership for development. Bangladesh is one of the signatories to achieve those goals by As such, ABL as a big SCB has aligned her CSR activities partially with those goals. Agrani Bank Limited is committed to contribute towards social development through its CSR program. ABL s ethical standard is not only meant for maximising profit, rather it s vision is to build up a society where human dignity and rights receive the highest consideration and evaluation. Bank s motto is also to improve the society and its culture by means of CSR. Education Minister Nurul Islam Nahid, MP, handing over ABL Gold Medal to 84 Faculty First students (from 2006 to 2010) of Rajshahi University where VC, Pro-VC of the University and MD & CEO of ABL are also seen 104

105 Education Like the previous years, ABL has donated a good amount to various educational institutions. In the year, the Bank donated Tk lac to the beneficiaries. These helps were extended for renovation or construction of building/ class rooms of different schools, colleges, universities, libraries etc.; giving stipend to the poor meritorious students; sponsoring various seminars, conferences, convocations, alumni, anniversaries, drama festivals, competitions, training programs; observing important national days etc. With a view to providing a smooth interface between student life and professional life, ABL offers internship facility to the BBA and MBA passed students of different universities. The interns were granted the opportunities to groom with us in a truly professional, dynamic and challenging corporate environment. Health Care Access to healthcare facilities is one of the fundamental rights of every human being. However, most of our people, especially the underprivileged group has little or no access to health care facilities. However, ABL is committed to assist those poor people, who have no way to secure basic treatment. During the year 2014, the Bank has given financial assistance from its CSR fund a sum of Tk lac to the beneficiaries to ease their miseries. Audience at the ABL Gold Medal awarding program at Rajshahi University where emminent Writer of Banga literature Hasan Azizul Haque (4th from the left) is also seen. Disaster Relief ABL s lending policies with regard to environmental management are responsive to emergency support needs of population groups affected by natural and man made disasters. During the year 2014, the Bank has spent Tk as donation to the disastered people. Concern for the Environment Today our planet is exposed to a severe environmental catastrophe than ever before. ABL s corporate social responsibility contributes generously to the development of Green Banking. Protection and thus nourishing the environment is part of ABL s investment principle. Environmental issues are taken into account while the Bank is assessing credit proposal for the industrial projects. As a humble effort to reduce environmental pollution, the Bank is financing CNG refueling stations. Besides, most of office vehicles of the Bank have already been converted to CNG fueling system. In the year 2014, the Bank contributed lac for the diferent Environment based programs. Annual Report 2014 t 105

106 Jahangir Kabir Nanok, MP, ex-state Minister of LGERD, MD & CEO of ABL distrubuting blankets among cold stricken people in Dhaka. Sports In the year 2014, the Bank has donated TK lac to various beneficiaries; i.e for football and hockey clubs and tournaments for the promotion of games and sports. ABL has its own football team that has been participating in the national football league relentlessly since independence. In several times the team defeated renowned clubs of the country like Mohammedan, Abahone, Brothers Union etc. The Bank has also a cricket team of its own that has been participating in the First Division Cricket League since independence. The team frequently succeeds to keep its ranking position from three to five in the league. A good number of cricketers and footballers are playing in the national and international levels who were once member of ABL sports team. Arts and Culture Again Bank Limited is always committed to enriching Bengali heritage, art, culture and literature. During the year 2014, the Bank contributed Tk lac to diferent programs and purposes relating to different cultural affairs. From 2011 onward, ABL is sponsoring children book fair at the Bangladesh Shishu Academy premises. In the year 2013, seven eminent writers were awarded Agrani Bank Children Literary Award; a prestigious literary award of the country introduced by ABL since 1981 and is being offering every year. Customers and Wellwishers ABL feels proud to provide services to the valued costomers without any hidden cost. The Bank serves to customers as a business partner. The Bank sincerely strives to improve business relationship with the customers for common benefit. By optimising financial performance at the least cost the Bank protects the interest of customers. The Bank is maintaining a good relationship with the peer business friends for mutual growth and development. The relationship with our business partners is based on reciprocal trust and respect. We transact with them in a fair and transparent way. Poverty Alleviation It is globally accepted that the Non-Government Organizations (NGOs) have been performing a laudable role in poverty alleviation across the world, especially in Bangladesh. With a view to widening the access to finance to the poor and ultra poor community, ABL has been financing NGOs since 1997 at privileged rates of interest. ABL financed NGOs are of various categories and capacities. Such activities also contributed to generation of income and employment as well. 106

107 Promotion of Crop Production To attain food security of the country, ABL has been in a unique position to providing credit facilities to the farmers at a lower rate of interest (currently at 8 percent) since A huge amount of foreign currency is spent in every year to import pulse, oil-seeds, ginger, spices, maize etc. In order to save foreign currency, the Government of Bangladesh encourages our farmers to boost up the production of above crops by introducing rebate rate of interest at 4 percent which is considered as the lowest rate of interest among any credit facilities. Promotion of Entrepreneurship The Bank envisaged fostering entrepreneurship amongst the potential, new and small entrepreneurs and generating employment through financing Small and Medium Enterprises. Keeping the aim in mind, ABL does not only run after the so called blue chips towards profit maximize of the Bank. Rather, it always remains stick to the triple bottom line: People, Planet & Profit and focused to the promotion of SMEs. In this way, a lot of entrepreneurs have grown with us through which employment opportunities are created for a huge number of people. Women Empowerment As half of our population is woman, a sustainable national progress can t be attained if women are left aside. Therefore, they should progressively be brought to the mainstream of our development activities. Considering this reality the bank through its Nari Agrani program has been mobilizing credit facilities in industry, service and business sector to the potential women entrepreneurs at a reduced rate of 10 percent interest. ABL s program for the woman entrepreneurs will gain due momentum in the days to come. Awareness Building Generation of awareness is a very useful tool to combat social evils, like drug addiction, smoking, pollution, terrorism, population etc. For this purpose, the Bank has continued financial support to different social organizations who displayed banner, festoon, sticker, display board and use such other communication channels for discouraging drug, smoking, pollution, population growth etc. The Bank continued such awareness building activities through CSR in the year Category-wise CSR activities of the Bank in 2014 are as follows: Taka in Lac Category Amount Education Health & Care Disaster Relief Environment Sports Arts & Culture Others Total Contribution Other CSR Activities Agrani Bank Limited is always attentive to attain more and more good corporate attributes. So, apart from the exposures mentioned above, ABL s CSR disclosure includes multi-faceted social activities. ABL has also been indirectly contributing to CSR activities. In the year 2014, ABL disbursed Tk crore in spices loans i.e. pulses, oil seed, ginger, maize etc. at the rate of 4 percent interest and Tk crore in crops loans at the rate of 8 percent interest. If the two loans were counted at the rate of 10 percent interest, then it is observed that, the Bank conceded a loss of Tk crore and Tk crore respectively which may be treated as CSR otherwise. Annual Report 2014 t 107

108 108

109 Green Banking Annual Report 2014 t 109

110 Green Banking Global warming is an issue that calls for a global response. The rapid change in climate will be too great to allow many eco-systems to suitably adapt, since the change have direct impact on bio-diversity, agriculture, forestry, dry land, water resources and human health. Society demands that business also take responsibility in safeguarding the planet. In this circumstance, the banks have come forward with eco-friendly financing program. Eco-friendly activities related with banking jobs are known as Green Banking. Green Banks or environmentally responsible banks do not only improve their own business but also affect socially responsible behavior of their other banking activities. A Green Bank is also called an ethical bank, a socially responsible bank or a sustainable bank. Bangladesh Bank has been helping government in implementing the provisions of key environmental regulations related to the financial sector. From time to time Bangladesh Bank has been issuing environment related circulars and guidelines. Especially, their circular on Policy Guidelines for Green Banking in 2011 is a remarkable step on the way to developing Green Banking practices in the financial sector of Bangladesh. A separate guideline on Environmental Risk Management by Bangladesh Bank is also in place. In addition, Bangladesh Bank introduced refinancing schemes and a few incentive measures to encourage banks to undertake green activities. Formation of Green Banking Division in ABL Agrani Bank Limited started its Green Banking activities in the year 2011 by forming a Green Banking Unit under its Rural Credit Division. From 9 th September 2013, it has been upgraded into a separate and independent division named as Green Banking Division. As a good corporate citizen, ABL is upholding environmentally responsible practices through designing its CSR (Corporate Social Responsibility) activities into green banking practices. The bank has already launched several green financial products to facilitate an eco-friendly financial atmosphere in the country. ABL is going ahead with a forward looking green banking strategy. As per Bangladesh Bank s policy guidelines for Green Banking, ABL has already taken necessary steps to implement the 1 st phase and the 2 nd phase within December Implementation of the 3 rd phase within June 2015 is also in progress. The Division has taken the following effective measures in order to carry out green banking activities as per Bangladesh Bank s guidelines. a) Green Banking Committee With a view to execute the program, a Green Banking Committee has been formed comprising nine divisions of head office. These divisions are: Rural Credit Division, Industrial Credit Division, SME Credit Division, Card Division, Credit Policy and Credit Risk Management Division, Central Accounts Division, Information Technology and MIS Division, Planning Coordination and Marketing Division, HR Training Research and Development Division. b) In-house Green Banking All the branches of ABL have now internet connectivity which enables the Bank to avail easy use of BACPS (Bangladesh Automated Cheque Processing System), BACH (Bangladesh Automated Clearing House) & BEFTN (Bangladesh Electronic Fund Transfer Network). Online banking is an important element of green banking strategy of ABL which is being started in the bank from 1 st July Total number of online branches in ABL is now 309. c) Set up of green branch As a pilot project, Amin Court Corporate branch of Dhaka has been selected for converting it into green branch. Gradually all the branches of ABL will go under green branch. Three branches of maize development project in the districts of Dinajpur, Bogra, and Thakurgaon have been surveyed for the purpose of converting them into a green branch. d) Climate risk fund A climate risk fund of Tk.4 crore has been created to assist two types of projects one is to assists projects which might be affected due to natural calamities and the other is to promote the projects like forestry, embankment, pure drinking water etc. 110

111 e) Awareness of eco-friendly banking A yearly amount of Tk.1 crore has been allocated to create awareness and eagerness among the public about green services and products of ABL. The bank will support public green events like campaigns, sponsoring educative program on environment, sponsoring tree plantations etc. f) Training on Green Banking A good number of officers and Executives have been trained on different Green Banking training programs held in BIBM and ABTI in the year One program about Training on Trainers (ToT) on Green Banking held in BIBM and two programs on Environmental Risk Management have been carried by ABTI. Similar training programs are to be continued. g) Green Office Guideline To adopt and follow in-house green activities by all employees of ABL, Green Office Guideline is issued and distributed to all its offices and branches. This would enable the staff-members of ABL for efficient use of electricity, fuel, water paper and to reuse of equipments. h) Green Financing ABL is giving onward emphasis to create a better and healthy environment in the country by introducing green financing in different sectors. Up to December 2014 disbursements of ABL s loans under green financing in different sectors are as follows: Sectors Disbursement No Taka in lac 1.Solar panel Easy bike Bio Gas Hybrid Hoffman Kiln Brick field Varmi-compost Total Annual Report 2014 t 111

112 112

113 Agrani Equity & Investment Limited Agrani Remittance House Canada Inc. Agrani Remittance House Sdn. Bhd., Malaysia ABL Agrani Exchange Company (Australia) Pty. Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Subsidiary Companies of Agrani Bank Limited Annual Report 2014 t 113

114 Subsidiary Companies of ABL Agrani Bank Limited has six subsidiary companies at its 100 percent ownership. Two of them are in Bangladesh and four are in abroad which are as follows: 1. Agrani Equity & Investment Limited Agrani Bank Limited started to take part in the capital market operations since it got license from BSEC on 23rd March Initially, its operations were executed under merchant Banking Unit of the bank. On March 16, 2010, the bank has formed a subsidiary company named Agrani Equity & Investment Limited. It started its operation on 15 June 2010 taking over all the assets and liabilities of merchant banking unit of Agrani Bank Limited. The fundamental aim of Agrani Equity & Investment Limited is: a) to become the market leader in merchant banking operations by acting as a market maker & ensure the development of the capital market by active participation and b) to act as a strong participant for increasing market depth which will ensure the proper channeling of funds between banks, NBFI s & capital market. Objective i) Maximize the value creation of the shareholders as well as clients. ii) iii) iv) Provide fundamental information to educate the investors. Achieve reliability to market participants by acting as a safeguard for the market. To boost up the small and medium investors awareness and engerness and enhance the demand of potential securities as well. v) To perform operations with high standards of business ethics. Issue Management Agrani Equity & Investment Limited primarily focuses on Issue Management service which is the key to develop our local industry by public participation through capital market. Issue Management functions include the following: i) Initial Public Offer (IPO) of shares & Bonds ii) Repeat Public Offer of shares and bonds iii) Issue Right Shares iv) Direct Listing of Shares v) Capital raising by other means Underwriting Along with issue management activities Agrani Equity & Investment Limited also takes, part in underwriting of securities which is a vital part in building confidence & depth in capital market as well as potential investment for the company. Portfolio Management Agrani Equity & Investment Limited provides portfolio management services by considering market fundamentals, macroeconomic trends, overall behavioral factors & prospective analysis. The company provides following portfolio management services to the customers: i) Portfolio management ii) Margin loan facilities to the investors 114

115 Financial Advisory Services Corporate Advisory Service is one of the core activities of merchant bank. Recently BSEC has adopted a guideline for the financial advisory services and accordingly Agrani Equity & Investment Limited is planning & developing the following services for forthcoming years: i) Customized instrument designing ii) Placement of equity with various financial institutions iii) Private capital raising: a) Equity b) Debt c) Hybrid iv) Advisory of private placement of securities v) Corporate management advisory vi) Arranging activities related to trustees for securities vii) Arranging credit rating agency related activity 2. Agrani SME Financing Company Limited Agrani SME Financing Company Limited is a 100 percent owned Subsidiary Public Limited Company of Agrani Bank Limited. The Company is one of the Non-Banking Financial Institutions (NBFIs) currently rendering financial services to the existing and potential entrepreneurs in Bangladesh. It is for the development of entrepreneurship and small and medium scale labour intensive enterprises to increase the income and employment for the missing middle eligible entrepreneurs with particular emphasis to women entrepreneurs in the urban, semi-urban and rural areas in the Company s operational areas. Objectives Develop entrepreneurship and small/medium scale labour intensive enterprises. Increase income and employment for the entrepreneurs. Promote women entrepreneurs. Generate income and support a more equitable income distribution. Arrange entrepreneurship development training and skill development training for the entrepreneurs before disbursing loan. Company s Capital Authorized Capital : 500 crore. Paid-up Capital : 100 crore. Coverage Principal Branch, Dhaka. 20 Branches in greater Faridpur district. 20 Branches in greater Mymensingh district. Annual Report 2014 t 115

116 Dr. Syed Abdul Hamid, Chairman of SME Financing Company Limited is presiding over the 3 rd AGM of the Company. Type of Enterprises to be Financed All viable enterprises under the following sectors are eligible for finance: Small & medium scale agro-based and agro-supporting industries including food processing and industries manufacturing agricultural tools. Textile/Garments related enterprises. Cottage industries. Small scale repair workshop. Small scale rural haulage transport. Service organization etc. Other viable enterprises. Loan Range Minimum Tk. 50,000 and maximum Tk. 20,00,000. Loan range can be changed by the Board of Directors as and when necessary. Interest Rate 14 percent (at declining balance method). Out of 14 percent, 2 percent is being kept in loan loss provision fund. Equity Share Minimum 10 percent in case of enterprise cost up to Tk. 1,00,000. Minimum 20 percent in case of enterprise cost above Tk. 1,00,000. Repayment Period Maximum 5 years. Special features of the Company Arrange and conduct free training with residential facility for the entrepreneurs. Give priority to the women entrepreneurs while approving loans and imparting training (skill development training and awareness training). Engage women development officers for women entrepreneurs exclusively. 116

117 Monitor loan utilization closely to ensure recovery of loans timely. Help Company to attain sustainability gradually. Develop savings habit among the rural people. 3. Agrani Exchange House Private Limited, Singapore Agrani Exchange House Private Limited (AGEX) is a remittance company incorporated in Singapore on January 04, 2002 under Company Act CAP. 50. It is a fully owned subsidiary of Agrani Bank Limited, embarked its journey in Singapore on February 08, 2002 for catering the long-felt need of hassle free transfer of money by the Bangladeshi expatriates from Singapore. The Company is situated at 5A, Lembu Road, Singapore. At the initiation its authorised and paid-up capital was SGD and SGD respectively. The Company has completed its 11th year of operation in Singapore very successfully. In view of providing remittance services to the Bangladeshi expatriates from their nearest locations, it had opened its second branch at Boon Lay Place in July 2010 and the third branch at Jurong East in December Despite world economic meltdown, the Company is growing remarkably over the years under the strict regulatory compliances with both originating and destination end. With heightened competition among the market players, Agrani Exchange House Private Limited has put in place a number of strategies to maintain sustainable growth in all indicators during past years to remain market leader in Singapore. The real time online money transfer solution of the Company allows the beneficiaries to receive remittance from all locations of Agrani Bank Limited instantly which greatly been encouraged the remitters to send money through this AGEX House. The Company is continuously putting all its efforts to remain compliant under the regulatory guidelines and to develop standard of services to ensure hefty growth in times ahead. 4. Agrani Remittance House Sdn. Bhd., Malaysia Agrani Remittance House Sdn Bhd incorporated in Malaysia on 18th August in the year 2005 under the Malaysian Companies Act 1965 on approval from the Ministry of Finance of the Government of the People s Republic of Bangladesh. It is a hundred parent subsidiary company of Agrani Bank Limited which started its business operation on 13 January The company is situated at 14-16(2nd floor) Jalan Hang Kasturi, 50050, Kuala Lumpur, Malaysia. The house is remitting money quickly and safely from Malaysia to Bangladesh by the Bangladeshi expatriates on real time basis. Its authorised and paid up capital are MYR 5,000, and MYR 3,000, respectively. In the ever-changing global and economic perspective remittance business is gaining ground to become an important component of country s economy. Considering the matter Its holding company- Agrani Bank Limited Bangladesh has taken massive initiatives to strengthen its existing remittance activities through its subsidiaries and remittance companies worldwide to ensure profitability and to increase turnover in a fully compliant way under regulatory guidelines. As a part of the programme, Agrani Remittance House has taken massive action plan and innovative marketing strategies from 2012 for accelerating its Remittance business by opening new branches in Malaysia and establishing drawing arrangement with other State Owned Commercial Banks of Bangladesh and opening multi corridor to provide remittance services in Nepal, Indonesia, Philippines, Vietnam, Myanmar Srilanka, India and Pakistan. Company has three Branches in Malaysia of which one is in Kualalampur, second Branch is at Bukit Mertajam in the state of Pulau Pinang on 6th August 2013 and the third branch at City Square, Johor Bhrau in Johor State on 22 October Agrani Remittance House has remitted Tk Crore equivalent to US Dollar 0.42 crore in 2006 at Tk crore equivalent to US Dollar 5.94 Corere in 2014 from Malaysia to Bangladesh. The Company also assists Bangladeshi expatriates to open bank account with different branches of Agrani Bank Limited, Bangladesh and motivate to purchase Wage Earner Development Bond of Bangladesh Government. The company submitted business plan to Bank Negara Malaysia (Central Bank of Malaysia) for permission to open 10 more new branches in different potential areas of Malaysia within next 2 years. The company is committed to be the market leader in Remittance industry in Malaysia with substantial Annual Report 2014 t 117

118 A growth chart of the Company upto 2014 since inception: Period Year No. of Remittance SGD (Million ) BDT (Million) Growth of Remittance Number Growth of Remittance Amount S$ Growth of Remittance Amount BDT in Number in % Amount in million % Amount in million , % % 1, % 287, , , % % 1, % 210, , , % % 3, % 152, , , % % 1, % 132, , , % (4.09) (3.78%) % 121, , , % % % 113, , , % % % 97, , , % % % 96, , , % % 1, % 77, , , % % 1, % 50, , , % % % 34, , , % % % 18, in % growth in times ahead by operating its remittance business at international level of efficiency, quality & customer service and to remain compliant under the regulatory guidelines. 5. Agrani Exchange Company (Australia) Pty. Limited Agrani Exchange Company Australia Pty. Ltd. started its journey on 10th April 2014 at 2/ Haldon Street, Lakemba, NSW-2195, Australia after receiving approval from Bangladesh Bank. The Exchange Company got its license from Australian Security and Investment Commission and registration with AUSTRAC. The house helps the expatriate Bangladeshis to invest in savings certificate, wage earners development Bond, fixed deposit, islami banking, equity market. Providing exceptional customer care, online real time remittance system and other services, the Exchange house has won the faith of Bangladeshi community. 6. Agrani Remittance House Canada Inc. Agrani Bank Limited has the plan to open and operate more number of exchange houses in different feasible countries to extract good number of remittances. In the name of Agrani Remittance House Canada Inc., a 100 percent owned Agrani Bank Limited s company has got approval from Bangladesh Bank or Accordingly, an office is arranged at 2960 Denforth Avenue, Toranto, Canada and an Assistant General Manager of the Bank has been appointed thereon as the CEO & Director. Agrani Remittance House Canada Inc. was inuguarated by the MD & CEO of Agrani Bank on 7th february 2014 at 2960 Denforth Avenue, Toranto; a bangali consentrated areas. 118

119 Directors Report to the Shareholders Annual Report 2014 t 119

120 Directors Report to the Shareholders Bismillahir Rahmanir Rahim Respected Shareholders Assalamu Alaikum On behalf of the Board of Directors, I am indeed delighted to present before you the eighth audited Financial Statements and Annual Report-2014 of Agrani Bank Limited. The report evaluates and analyzes Bank s overall operational performance of 2014 compared to that of I would request you to read the information and analysis in connection with the audited financial statements presented herewith. The report presents a concise and overall performance of the Bank in perspective of global economic scenerio and Bangladesh economy. Global economic activities secured robust position in the second half of 2013 and the economic trend of USA also got momentum and recuperates vigorous position. The major economies of eurozone had turned into positive trend by overcoming economic recession. But growth was sluggish among some risk prevailing country of euro-zone due to the lack of domestic demand, economic frailty and excessive credit. However, the growth of the emerging and developing countries had fairly increased maintaining the balances with such kind of economic scenerio. Infact, global economic growth is expected to get further increase in FY According to the last report of IMF in The World Economic Outlook (WEO), April 2014 anticipated that, the growth rate of the world economy might reach 3.70 percent in 2013 which was 2.70 percent in the very first half of Here, the lion s share was contributed by the economies of some advanced countries. In the mean time, the growth of world trade and industrial sector increased surprisingly. As per IMF forecast, the overall growth of global economy might increase by 3.60 percent in 2014 and 3.90 percent in On the other hand, the growth of emerging and developing countries might be 4.90 percent in 2014 from 4.70 percent in 2013 and subsequently, it will accelerate 5.30 percent in In contrast, according to the ADB s the Asian Development Outlook, 2014, the GDP growth had been 6.10 percent over the period of 2012 and Despite the downward trend, the growth of China was projected to hold equilibrium position mainly because of the increasing domestic demand of some of the developed countries having been concentrated to reinstate their economy. Considering these, GDP growth had forecasted 6.20 percent and 6.40 percent in 2014 and in 2015 respectively in Asian Region. At present, the growth of South Asian countries is comparatively sluggish (4.80 percent in 2013) amid Asian Region. kqvi nvìvi `i cöwz cwipvjk `i cöwz e`b wemwgjøvwni ivngvwbi ivwng m vwbz kqvi nvìvie ` Avmmvjvgy AvjvBKzg AMÖYx e vsk wjwg UW Gi 2014 mv ji wbixw Z Avw_ K weeiyx Ges Aóg evwl K cöwz e`b cwipvjbv cwil `i c _ K Avcbv `i mvg b Dc vcb Ki Z c i Avb ` eva KiwQ G cöwz e` b Avcbviv 2013 mv ji mv _ 2014 mv j e vs Ki GKwU Zzjbvg~jK wpîmn 2014 mv ji mvwe K e emvmz cwiw wz Ges cwipvjbv cwil `i Kg Kv Ûi g~j vqb I we køly `L Z cv eb h mg Í Z_ Ges we køly G Z mwbœ ewkz n q Q Zv ckk Z Avw_ K weeiyxi m ½ wgwj q covi Rb Aby iva KiwQ G cöwz e` b wek A_ bxwz Ges evsjv ` ki A_ bxwzi cö vc U e vs Ki GKwU msw ß A_P mvwe K wpî Lyu R cviqv hv e ˆewk K A_ bwzk Kg KvÛ 2013 mv ji wøzxqv a my` p nq Ges hy³iv óªi A_ bwzk cybiæ v ii MwZavivI kw³kvjx nq BD iv A ji cöavb cöavb A_ bxwz g `vfve KvwU q cöe w i BwZevPK avivq wd i Av m Z e AwaK FY I A_ bwzk f½yizvi Kvi Y BD iv A ji SuywK KewjZ Kvb Kvb A_ bxwz Z Af šíixy Pvwn`v Kg _vkvq cöe w I `ye j wqj D`xqgvb I Dbœqbkxj `kmg~n G A_ bwzk cwiw wzi mv _ mvgäm i L P j Q Ges Zv `i cöe w gvuvgywufv e e w c q Q A_ eq ii ˆewk K A_ bwzk cöe w Av iv e w cv e e j cöz vkv Kiv n Q AvšÍR vwzk gy`ªv Znwej (AvBGgGg) Gi me kl cökvwkz World Economic (WEO), April 2014 Abyhvqx 2013 mv ji wøzxqv a we k i Mo cöe w `uvwo q Q 3.70 kzvsk hv eq ii cö_gv a 2.70 kzvsk wqj GLv b DbœZ A_ bxwzi `kmg~ ni Ae`vb ekx Gmgq wek evwyr I wkí Lv Zi Drcv`b e w cwijwÿz nq 2014 mv j we k i mvwe K A_ bxwz 3.60 kzvsk n e Ges 2015 mv j 3.90 kzvs k `uvov Z cv i e j AvBGgGd -Gi c~e vfvm i q Q AvBGgGd -Gi c~e fvm Abyhvqx wekvkgvb I Dbœqbkxj A_ bxwzi cöe w 2013 mv j 4.70 kzvsk n Z 2014 mv j 4.90 Ges 2015 mv j Zv 5.30 kzvs k DbœxZ n e e j cöz vkv Kiv n q Q c vší i, Gkxq Dbœqb e vsk (GwWwe) Gi Asian Development Outlook, 2014 Abyhvqx 2012 mvj n Z 2013 ch ší Gwkqvi Dbœqbkxj `kmg~ ni wrwwwc cöe w avivevwnkfv e 6.10 kzvsk i q Q Px bi cöe w wbægylx n ji DbœZ we k i hme A_ bxwz Z cybiæ vi Kvh µg Ae vnz i q Q Zv `i Af šíixy Pvwn`v e w i Kvi Y Px bi cöe w fvimvg g~jk Ae v b _vk e e j Avkv Kiv n Q G we epbvq 2014 I 2015 mv j Gkxq A ji wrwwwc cöe w h_vµ g 6.20 kzvsk I 6.40 kzvsk n e g g c~e vfvm Kiv n q Q G A ji g a ez gv b `w Y Gwkqvi `kmg~ ni cöe w (2013 mv j 4.80 kzvsk) Zzjbvg~jKfv e axi MwZm úbœ 120

121 Macroeconomic Scenario of Bangladesh Immediately after facing the challenges of re-emerging recession in the first half of FY , Bangladesh had been able to maintain average growth rate over 6.00 percent continously from the last five years. Inspite of prevailing crucial domestic economic scenerio, the total export income increased in the first 10 months (July-April 2014) e.g., percent higher from the corresponding period of the previous year. Import growth also shrinked from percent in FY to 5.52 percent in FY and in FY it shrinked to 4.03 percent. In order to maintain continous higher growth, extensive initiatives had been taken in streamlining fiscal sector as well as monetary and financial sector. As a result, the GDP growth target is expected to achieve in current fiscal year. Economic Growth In FY and FY , the GDP growth reached at 6.52 percent and 6.01 percent respectively (based on FY ). As per the provisional statement, the GDP was projected to achieve 6.12 percent in FY Each and every sub head of agriculture and service sectors, particularly crops, vegetables, increased conspicuously as against the preceeding fiscal year, which facilitated the achievement of more than 6.00 percent GDP growth. If the growth of the industry (manufacture) sector did not diminish due to the crucial domestic economic scenario, the GDP growth could have been more in the current fiscal year. However, the growth of import and export sector takes part in important role to get momentum in the growth of the industrial sector maintaining the positive index of manufacturing goods production. However, the growth of the service sector will sustain steady position resulting from momentum in the domestic demand, vibrant rural economy, and satisfactory global economic position. As a result, the expected growth of 6.12 percent is anticipated to attain in current Fiscal Year. Savings and Investment In FY , the rate of the total domestic savings and national savings was projected percent of total GDP, which was percent and percent respectively in FY However, in the current fiscal year, both domestic savings and national savings increased remarkably in terms of GDP ratio compared to a year earlier. Export In the backdrop of the growing trend of US economy and appeasement of the recession in euro-zone, in FY , almost percent growth was anticipated in export sector. However, export income reached to $24, million in FY (July- April), which was percent higher in comparison with the corresponding period of the preceeding year. evsjv ` ki mvgwók A_ bxwz A_ eq ii cö_gv a wek e vcx cybivq Avwef Z g `vrwbz P v jä KvwU q evsjv `k MZ cuvp eq i M o 6.00 kzvs ki ewk wrwwwcõi cöe w AR b Ki Z m g n q Q ` ki Af ší i A_ bxwzi cöwzk j cwi ek _vkv m Ë I A_ eq ii cö_g `k gv m (RyjvB-GwcÖj 2014) gvu ißvwb Avq c~e ezx A_ eq ii GKB mg qi Zzjbvq kzvs k e w c q Q Avg`vwb cöe w i nvii A_ eq ii kzvsk _ K n«vm c q A_ eq i 5.52 kzvs k Ges A_ Q i 4.03 kzvs k mskzwpz nq D P cöe w AR bi avivevwnkzv i vi j ivr ^ LvZ, Avw_ K I gy`ªv Lv Zi bvbvgylx ms vi Kvh µ gi d j wrwwwc j gvîv AR b mnvqk n e e j Avkv Kiv hvq A_ bwzk cöe w MZ I A_ eq i ` ki wrwwwc cöe w `uvovq h_vµ g 6.52 I 6.01 kzvsk ( A_ eq ii wfwëg~ j ) A_ eq ii Rb mvgwqk wnmve Abyhvqx wrwwwc cöe w 6.12 kzvsk cöv jb Kiv n q Q PjwZ A_ eq i mvwe K K wllv Zi cöwzwu DcLv ZB we kl K i km I kvkmwâ DcLvZ, mvwe K mev Lv Zi cövq cöwzwu DcLv ZB cöe w i nvi MZ A_ eq ii Zzjbvq e w cviqvq PjwZ A_ eq i wrwwwc-i cöe w i nvi 6.00 Gi Ic i AR b Ki Z m g n q Q Z e ` ki Af ší i A_ bxwzi cöwzk j cwi e ki Kvi Y wkí (g vbyt) Lv Z cöe w i nvi n«vm bv c j PjwZ A_ eq i wrwwwcõi cöe w i nvi Av iv e w cz e j cözxqgvb nq Z e, g vbyd vkpvwis c Y i Drcv`b m~p Ki BwZevPK Ae vb Ges ißvwb I Avg`vwb cöe w wkí Lv Z cöe w i MwZ Z ivwš^z Ki e Af šíixy Pvwn`vi MwZkxjZv, mpj MÖvgxY A_ bxwzi Ges ˆewk K A_ bxwzi Avkve ÄK Ae vb mev Lv Zi cöe w K a i ivl e d j, mvwe Kfv e KvswLZ cöe w 6.12 kzvsk AR b m e n e e j cöz vkv Kiv n Q mâq I wewb qvm mvgwqk wnmve Abyhvqx A_ eq i wfwëg~ j A_ eq i `kr mâq I RvZxq mâ qi nvi cöv jb Kiv n q Q h_vµ g wrwwwcõi kzvsk, hv A_ eq i wqj h_vµ g wrwwwcõi kzvsk I kzvsk A_ vr PjwZ A_ eq i wrwwwcõi kzkiv nv i `kr mâq I RvZxq mâq DfqB MZ A_ eq ii Zzjbvq e w c q Q ißvwb gvwk b hy³iv óªi A_ bxwzi cybiæ v ii MwZaviv Av iv ` p I BD iv AÂ ji g `vfve cökwgz niqvi cö vc U A_ eq i ißvwb Lv Z kzvsk cöe w AwR Z n e e j cöz vkv Kiv n q Q A_ eq ii RyjvB-GwcÖj ch ší mg q gvu ißvwb Avq A_ eq ii GKB mg qi Zzjbvq kzkiv kzvsk e w c q 24, wgwjqb Wjv i `uvovq Annual Report 2014 t 121

122 Import In FY , the total import payment stood at US$ 29, million, which was percent higher in the corresponding period of the previous year. The growth was achieved mainly because of import of foods, payments of medicine and the raw material of readymade garments. Moreover, in FY , the total import payment stood at US$ 34, million, which was 4.00 percent higher compared to that of the preceeding year. Inflation The average annual inflation in FY slid down 6.78 percent as per the base price of FY from over 8.69 percent of the previous fiscal year. According to the base price, the inflation on point to point basis in FY , April shrinked to 7.46 percent from over 8.37 percent in the previous FY Downward inflation policy of India, dropping off oil price in the international market, satisfactory food production in agriculture sector and above all, it is expected that the inflation will be able to contain positively by adopting accommodative moneytary policy. Overseas Employment and Remittance Overseas employment and remittance immensely contributes to trim down the gradually increasing unemployment problem and proverty alleviation. Besides, they are also contributing to the economic development of the country including boosting up foreign currency reserve. However, remittance flow declines in current FY owing to the newly formulated policy regarding manpower of middle-east, the uncertainty of being labelled as illegal especially those who have been residing in the different countries across the world including Saudi Arabia and Malaysia and spending bulk of their income for the renewal of visa. Consequently, in FY , the remittance flow stood at US$ 10, billion by dropping off 5.63 percent as against FY Recently, the government has accomplished a new agreement with Middle-East and Malaysia for exporting labor force from Bangladesh specially. Besides, in order to explore new manpower export markets, the government has undertaken several steps through diplomatic initiatives. In the meantime, 62 new labor markets have already been expanded including Australia, Newzealand, Canada and Sweden. Financial Inclusion Under the financial inclusion programme, the government has been delivering the regulated financial services at affordable costs to the sections of underpreviledged and low income segments of society. In order to develop sustainable economic structure, opportunity has been given to open a bank account only at Tk 10 and also by offering various services with minimal charges who are excluded from the regulated financial services such as labourers and farmers. Avg`vwb A_ eq ii gvp 2014 ch ší gvu Avg`vwb e qi cwigvy `uvwo q Q 29, wgwjqb gvwk b Wjvi, hv c~e ezx A_ eq ii GKB mg qi Zzjbvq kzvsk ewk g~jz Lv` km Avg`vwb, Jla I ˆZwi cvlvk wk íi KuvPvgvj Avg`vwb e q n Z G cöe w AwR Z n q Q D j L, A_ eq i gvu Avg`vwb e qi cwigvy (wmavbgd) `uvwo qwqj 34, wgwjqb gvwk b Wjvi, hv c~e ezx A_ eq ii Zzjbvq 4.00 kzvsk ewk g~j ùxwz A_ eq ii wfwëg~ j A_ eq i evwl K Mo g~j ùxwz c~e ezx A_ eq ii (8.69 kzvsk) Zzjbvq n«vm c q `uvovq 6.78 kzvsk Av jvp wfwëg~ j c q U- Uz-c q U wfwë Z MZ A_ eq ii GwcÖj gv mi g~j ùxwzi nvi 8.37 kzvsk _ K PjwZ A_ eq ii GwcÖj 2014-G 7.46 kzvs k b g G m Q cvk ezx `k fvi Z wb œgylx g~j ùxwz, wek evrv i Z ji g~j n«vm I K wl Lv Z m šívlrbk Drcv`b, m e vcwi mnvqk gy`ªvbxwzi gva g mvwe Kfv e g~j ùxwz wbqš Y ivlv m e n e e `wkk Kg ms vb I iwgu vý e `wkk Kg ms vb Ges cöevmx `i cöwiz A_ ` ki µgea gvb Kg m R bi cvkvcvwk ekvi mgm v n«vm, `vwi`ª we gvpb, ˆe `wkk gy`ªvi wirvf e w mn ` ki A_ bwzk Dbœqb Z ivwš^z Ki Y e vck Ae`vb ivl Q Z e, ga cöv P Rbkw³ m úwk Z bxwzgvjv cwiez b Kiv, gvj qwkqv I mšw` Aviemn we k i wewfbœ ` ki A eafv e Ae vbiz köwgk `i ˆeaZvi AwbðqZv I mšw` Avi e Ae vbiz evsjv `kxmy KZ K Av qi GKwU Ask wfmv bevq b e q Kiv- BZ vw` Kvi Y PjwZ A_ eq i iwgu vý cöevn n«vm c q Q A_ eq ii RyjvB-gvP ch ší mg q iwgu vý cöevn A_ eqi n Z 5.63 kzvsk n«vm c q 10, wgwjqb gvwk b Wjv i `uvwo q Q mikvi m úªwz ga cövp I gvj qwkqvq AviI ewk gvîvq köwgk cöi Yi Pzw³ K i Q GQvovI mikvi ez gv b bzzb bzzb kögevrvi AbymÜv bi D ` vm MÖnY K i Q Ges B Zvg a A ªwjqv, wbdwrj vû, KvbvWv, myb Wbmn 62wU ` k bzzb kögevrvi m úªmvwiz n q Q Avw_ K AšÍfz w³ mikvi Avw_ K AšÍf yw³ Kg mywp gva g mnr Dcv q g~javivi Avw_ K cöwzôvb mg~ ni gva g myweav-ewâz Rb Mvwôi mv a i g a Avw_ K cy I mev cuš Q w` Q ` ki UKmB A_ bwzk KvVv gv M o Zvjvi j Avw_ K mev ewâz Z bgyj RbmvaviY Z_v köwgk, K lk `i K mn R 10 UvKvq e vsk wnmve Lvjv Ges Gi gva g webv ^í PvR wd Z wewfbœ my hvm-myweav `Iqv n q Q 122

123 Social Security The government has allocated a total amount of TK crore in FY so as to provide cash aid under the social security agenda. The social security programme includes aged allowance, allowance for widows deserted by husband and distressed women, allowance to persons with disabilities, educational stipend to students with disabilities, matternity allowance for the poor mothers and freedom fighter allowances. Advancement of achieving Millenium evelopment (MDGs) Goals According to the UNDP report titled Millenium Development Goals: Bangladesh Progress Report 2012, Bangladesh has already secured remarkable achievement in allmost all the units of MDGs. Highest Electricity Production in Country Achieving the avowed goal of transforming Bangladesh into a middle income country, the government has given top priority to the development of power sector within In FY (up to January 2014), a total of 23,204 mkwh net energy was generated from the public sector and private sector that is considered the highest production in the history of Bangladesh. Out of the total net generation, 10,804 million kwh power was generated by public sector power plants and 12,399 mkwh was contributed by private sector (IPP, SIPP, Rental and REB). The shares of gas, hydro, coal and oilbased energy generations were percent, 1.77 percent, 2.48 percent and 17.61percent respectively. Padma Bridge To develop integrated comunication system with all the regions of the country, the construction of Padma Bridge mesuring 6.15 km long has been already started at Mawa-Jajira point. The cost is estimated to be Tk. 20, crore. The Bridge will connect Barisal, Khulna divisions and districts of greater Faridpur linking with Dhaka including the south-west of the country to northern and eastern region. The bridge will play vital role in developing national economy of Bangladesh by increasing overall production, creating employment opportunity and proverty alleviation as well. Medium Term Prospect of Bangladesh Economy TIn the backdrop of the positive trend of world economy from the last half of 2013, expansion of world trade by overcoming recession and turnaround of the domestic unrest position especially of the advanced economies, a Medium Term Macroeconomic Framework (MTMF) for FY has been worked out taking into account the present situation of Bangladesh economy. In the Medium Term Macroeconomic Framework, GDP growth has been estimated at 7.30 percent for FY , 7.60 percent for FY and 8.00 percent for FY mvgvwrk wbivcëv eóbx mvgvwrk wbivcëv eóbx Kg m~wpi AvIZvq bm`-a_ mnvqzv cö`v bi j A_ eq ii ev R U 9, KvwU UvKv eivï ivlv n q Q GB Kg m~wpi D j L hvm Kvh µg mg~ ni g a i q Q eq fvzv A ^ Qj cöwzeüx `i Rb fvzv I wk v fvzv weaev I ^vgx cwiz v³v `yt gwnjv fvzv, `wi`ª gv qi Rb gvz Z Kvjxb fvzv, gyw³ hv v m vbx fvzv BZ vw` mn ªvã Dbœqb j (GgwWwR) AR b AMÖMwZ RvwZmsN Dbœqb Kg m~wp (UNDP)-Gi Millenium Development Goals: Bangladesh Progress Report 2012 kxl K cökvwkz cöwz e` b msm nxz Z_ Abyhvqx, evsjv ` k B Zvg a GgwWwR-i 8wU j gvîvi AwaKvsk jv ZB D j L hvm AMÖMwZ AwR Z n q Q ` k m e v P we`y r Drcv`b 2021 mv ji g a evsjv `k K ga g Av qi ` k DbœxZ Kivi Rb Ges D PZi cöe w AR bi evnb wn m e mikvi we`y r I R vjvbx LvZ K m e v P AMÖvwaKvi w` q Q A_ eq i (Rvbyqvwi 2014 ch ší) mikvwi Lv Z 10,804 wgwjqb wk jviqvu AvIqvi Ges emikvwi Lv Z (AvBwcwc, GmAvBwcwc, i Uvj, AviBwe) 12,399 wgwjqb wk jviqvu AvIqvi gvu 23,204 wgwjqb wk jviqvu AvIqvi wbu we`y r Drcvw`Z n q Q hv ` ki BwZnv m m e v P GB wbu Drcv` bi kzvsk M vmwfwëk 1.77 kzvsk cvwbwfwëk 2.48 kzvsk KqjvwfwËK Ges kzvsk ZjwfwËK we`y r K `ª _ K Drcvw`Z n q Q cùv mzz ` ki mkj AÂ ji g a myôz Ges mgwš^z hvmv hvm e e v M o Zvjvi j gviqv-rvwriv c q U 6.15 wk jvwguvi `xn cùv mzzi wbg vy KvR ïiæ n q Q Gi Rb e q n e 20, KvwU UvKv cùv mzz wbwg Z n j ewikvj I Lyjbv wefvm Ges e nëi dwi`cyi AÂ ji mkj Rjvi mv _ ivravbx XvKvmn ` ki DËi I c~e vâ ji mv _ GKwU DbœZ buiqvk M o DV e G mzz Drcv`b e w, Kg ms vb m wó, Avq e w Ges `vwi`ª wbimbmn RvZxq A_ bwzk Dbœq b we kl f wgkv ivl e A_ bxwzi ga gqv`x m vebv 2013 mv ji klva n Z wek A_ bxwzi MwZ Z ivwš^z niqv, hy³iv óªi A_ bwzk cybiæ v i MwZ mâvi, BD iv AÂ ji g `vfve KvwU q wek evwy R i cömvi Ges evsjv ` ki A_ bxwz Z Af šíixy cöwzk j cwiw wz KvwU q D V Avg`vwbißvwbi MwZ wd i Avmv BZ vw` Ae v we epbvq G b ga gqv`x mvgwók A_ bwzk KvVv gv, (Medium Term Macro Economic Frame Work-MTMF, ) cöyxz n q Q ga gqv`x mvgwók A_ bwzk KvVv gv Z AvMvgx A_ eq ii wrwwwc cöe w 7.30 kzvsk Ges µgvš^ q Zv e w c q A_ eq i 7.60 kzvsk I A_ eqi bvmv` 8.00 kzvs k DbœxZ n e g g cö cb Kiv n q Q Annual Report 2014 t 123

124 Honorable Speaker of Jatiyo Sangshad Dr. Shirin Sharmin Chawdhury was awarded by Agrani Bank Limited. Infact, attainment of the high growth target of MTMF largely depends on various types of development activities of the government such as education, health, creating skilled manpower by giving importance on information and communication technology and integrated development of energy sector including communication sector and other infrastructure development. Inflation is always considered as one of the challenges in attaining optimum growth. In MTMF, inflation is projected to be reduced from 7.00 percent to 6.00 percent in FY and 5.70 percent for FY GgwUGgGd -G wrwwwc cöe w i wba vwiz j gvîv AR b mikv ii KwZcq Lv Zi Dbœqb Kvh µg ev Íevq bi Dci wbf i K i wk v, ^v, Z_ I hvmv hvm cªhyw³ Lv Z i Z cö`v bi gva g ` Rbkw³ ˆZwi Ges we`y r I hvmv hvmmn Ab vb AeKvVv gv Lv Z my-mgwš^z Dbœqb G Î f wgkv ivl e KvswLZ cöe w AR b g~j ùxwz me `vb Ab Zg GKwU P v jä wn m e we ewpz nq ga gqv`x mvgwók A_ bwzk KvVv gv Z g~j ùxwzi nvi ez gv bi 7.00 kzvsk n Z n«vm c q A_ eq i 6.00 kzvs k Ges A_ eq i cövq 5.70 kzvs k Kwg q Avbvi j gvîv wba viy Kiv n q Q The publicity of Diaspora Bond has been enhanced so as to increase non-bank financing and minimization of dependency upon banking sector. The formulation of the Debt Management Strategy (DMS) is under process in order to increase credit supervision power. Remittance and export are expected to get further vigorous position in the medium term macroeconomic structure. Besides, the implementation of various development activities especially stimulating the import sector by importing the capital machineries and industrial raw materials along with the momentum of domestic economic activities are also considered in MTMF. Digital Bangladesh Its true meaning lies in proper application of technology to implement all the commitments of the government regarding education, health, employment and poverty alleviation. The main purpose of this idea e vsk ewnfz Z Drm _ K A_ vqb e w I e vswks Lv Zi Dci mikv ii wbf ikxjzv Kgv bvi Rb ez gv b Diaspora eû mg~ ni cöpviyv Av iv Rvi`vi Kiv n q Q FY e e vcbv cwiex Yi gzv e w i j Debt Management Strategy (DMS) cöyqb cöwµqvaxb i q Q iwgu vý I ißvwb Lv Zi Av iv ` p Ae v b wd i Avmvi m vebv K ga gqv`x mvgwók A_ bwzk KvVv gv Z MY Kiv n q Q cvkvcvwk wewfbœ Dbœqb Kg KvÛ ev Íevqb, we kl K i AeKvVv gv Lv Zi wbg vy Kv Ri Rb g~jab hš cvwz I wkírvz KuvPvgvj Avg`vwb e w i gva g Avg`vwb LvZ K Pv½v ivlvi Ges Af všíixy A_ bwzk Kg KvÛ MwZkxj ivlv I Af šíixy Pvwn`vi e vckzv ervq ivlvi welqi GgwUGgGd-G we epbv Kiv n q Q wwwruvj evsjv `k cöhyw³i mv_ K cö qv Mi gva g wk v, ^v I `vwi`ª we gvpbmn mikv ii mkj cöwzköæwz c~i Yi g a Gi A_ I mv_ KZv wbwnz wwwruvj evsjv `k-aviyvi Avmj D Ïk 124

125 ABL offerd Nari Sammanana to Dr. Shirin Sharmin Chawdhury, Taramon Bibi, Bir Protik, Prof. Mahfuza Khanam & Nishat Mojumder who are seen in a photo session with Dr. Atiur Rahman, Dr. Khondoker Bazlul Hoque, Dr. Syed Abdul Hamid along with Directors of the Bank. is to improve the standards of living of the people by empowering them, ensuring transparency and accountability in all spheres of life, establishing goodgovernance and above all, bringing public services to their doorsteps through the most effective use of technology. In short, Digital Bangladesh is a happy prosperous and enlightened Bangladesh, which is free from hunger, poverty, inequality and corruption and belongs completely to its people and is driven forward by digital technology. Perspective Plan The Government keeping in view the Golden Jubilee of Independence has formulated Bangladesh Perspective Planning , in the light of Vision-2021 to attain a definite set of objectives that relate to economic and social development of Bangladesh. The document reflects the hopes and aspirations of common people which has been given the top priority and incorporates the development philosophy of the government, its longterm vision and strategic goals of desired development. The fundamental objective of this long term plan is to alleviate poverty by achieving higher growth and to turn Bangladesh into a medium income country where poverty will be brought to the minimum and regional disparity in the sphere of economic development will be reduced significantly. The plan contains necessary strategies to overcome the challenges in terms of turning the country into a medium income economy. The major goals of this vision are: to accelerate the growth rate upto 10 percent by 2021, to raise per capita income upto $ 2000, to reduce the number of population living under poverty n jv cöhyw³i mv_ K cö qvm K i RbM Yi gzvq bi gva g Zv `i RxebhvÎvi gv bvbœqb Kiv, mgv Ri mkj Î ^ QZv I `vqe Zv wbwðz Kiv, mykvmb cöwzôv Kiv Ges m e vcwi RbM Yi `vi Mvovq mkj mev cuš Q `qv ms c ej Z M j, wwwruvj evsjv `k n jv mylx-mg I Av jvwkz evsjv `k, h `k n e mkj gvby li Z i, hlv b zav, `vwi`ª, AmgZv I `ybx wz _vk e bv Ges h `k wwwruvj cöhyw³ cö qv Mi gva g mvg bi w` K GwM q hv e cöw Z cwikíbv ^vaxbzvi myey RqšÍx K mvg b i L mikvi Ôevsjv `k cöw Z cwikíbv Õ kxl K cwikíbv `wjj cöyqb K i Q evsjv ` ki A_ bwzk I mvgvwrk Dbœq bi mywbw` ó j AR bi R b B iƒckí-2021 G cwikíbvq ` ki KvswLZ Dbœq bi KŠkjMZ j gvîv mg~n D jøl K i Avcvgi Rbmvavi Yi Avkv-AvKvsLv K m e v P AMÖvwaKvi w` q RvwZi `xn gqv`x Dbœqb `k b I ^ cœi cöwzdjb Kiv n q Q G `xn gqv`x iƒck íi gšwjk D Ïk n Q D PZi cöe w AR bi gva g `vwi`ª we gvpb Ges 2021 mv ji g a evsjv `k K GKwU ga Av qi ` k cwiyz Kiv hlv b `vwi`ª me wb œ chv q Ae vb Ki e Ges A_ bwzk Dbœq b AvÂwjK ˆelg K g hv e ga Av qi ` k iƒcvší ii P v jä gvkv ejv I Gi R b cö qvrbxq KŠkjmg~n i q Q G cwikíbvq Gi cöavb jÿ jv n Q: 2021 mvj bvmv` cöe w i nvi 10 kzvs k DbœxZ Kiv, gv_vwcqz Avq 2,000 gvwk b Wjv i DbœxZ Kiv, `vwi`ª mxgvi wb P emevmkvix RbM Yi msl v kzvs k Annual Report 2014 t 125

126 Dr. Zaid Bakht, newly appointed Chairman of ABL is presiding over the 388 th meeting of the Board of Directors. line to percent, to reduce unemployment rate into 15 percent, to increase annual per head electricity consumption to 600 Kilowatt hour and to strengthen IT sector for building a digital Bangladesh. Shareholders Equity The shareholders equity of the Bank as on 31 December 2014 stood at Tk 3, croreand paid-up capital of the Bank Tk 2,072 crore. Funding Structure The year-end funding structures of the Bank in 2013 and 2014 are given below: bvwg q Avbv, ekviz nvi 15 kzvs k bvwg q Avbv, evwl K gv_vwcqz we`y r e envi 600 wk jviqvu N Uvq DbœxZ Kiv Ges wwwruvj evsjv `k MV bi Rb Z_ cöhyw³ e e v K kw³kvjx Kiv kqvi nvìviõm BKz BwU 2014 mv ji ww m ^i k l e vs Ki gvu kqvi nvìvi `i BKz BwUi cwigvy wqj 3,957 KvwU UvKv Ges cwi kvwaz g~jab 2,072 KvwU UvKv Znwej KvVv gv 2013 Ges 2014 mv ji k l e vs Ki Znwej KvVv gv wqj wb œiƒct Taka in crore Sources of Fund Deposits 38, , Paid-up-Capital 2, , Statutory Reserve Revaluation & Amortization Reserve in Govt. Securities Assets Revaluation Reserve 1, , General Reserve Retained Surplus from Profit and Loss Account (11.74) (224.93) Total 42, , Asset Portfolio The year-end asset portfolio scenarios of the Bank in 2013 and 2014 are appended below: m ú `i cvu dvwji 2013 Ges 2014 mv ji k l e vs Ki m ú `i cvu dvwji wqj wb œiƒct 126

127 Taka in crore Particulars of Assets Loans and Advances 23, , Investments 15, , Fixed Assets 1, , Money at Call and short notice Cash in Hand and with other Banks & FIs 4, , Other Assets 4, , Total 49, , Cash in Hand and with other Banks & Fls 4, Money at call and short notice Fixed Assets 1, Asset Portfolio 2014 Other Assets 4, Crore Taka Loans and Advances 23, Investments 15, Dr. Khondoker Bazlul Hoque, former Chairman of ABL addressing as the chief guest in Corporate & Zonal Head Conference Business Performance a) Deposits At the end of December 2014, the deposit of the Bank stood at Tk. 38, crore compared to Tk. 34, crore at the end of previous year leading to a year-on-year growth in deposit of percent. Given the adverse economic scenario of the country during the year under review, this growth rate is a remarkable achievement. In the prevailing situation, mobiliziation of deposits became highly competitive. To reduce the cost of fund gradually the Bank, therefore, decided to mobilize low cost fund. The deposit mix of the Bank as on 31 December 2014 was as follows: Taka in crore Types of Deposits Current & other Deposits 3, , Savings Bank Deposits , Fixed Deposits 23, , Bills Payable Total 38, , e emvq AMÖMwZ K) AvgvbZ 2014 mv ji ww m ^i k l e vs Ki Avgvb Zi cwigvy wqj 38, KvwU UvKv hv MZ eqi wqj 34, KvwU UvKv G Z Avgvb Zi cöe w i nvi `vuovq kzvsk Av jvp eq ii g `v cwiw wz m Ë I Avgvb Zi cöe w i nvi wqj D jøl hvm Pjgvb Ae vq AvgvbZ msmön AZ ší cöwz hvwmzvg~jk welq n q `uvwo q Q c~e ezx eq ii Zzjbvq Znwej e q µgvš^ q n«vm Ki Yi j ÿ wb œ e q mv c AvgvbZ msmö ni c` c bqv n q Q 31 ww m ^i 2014 mv j e vs Ki Avgvb Zi wpî wb œiƒc: KvwU UvKvq Avgvb Zi aiy PjwZ Ges Ab vb AvgvbZ 3, , mâqx AvgvbZ , gqv`x AvgvbZ 23, , cö `q wej gvu 38, , Annual Report 2014 t 127

128 Deposits Mix 2013 and 2014 Crore Taka Bills Payable 1.32 Savings Bank Deposits b) Asset Quality Deposit Mix of 2014 (%) Current and other Deposits 9.98 Fixed Deposit The Bank maintained quality of asset and this is one of the strong areas of its operation. The Bank did not compromise with its standard of excellence in terms of maintaining asset quality while extending credit facilities. In order to improve the quality of our assets, the Bank Management has prioritised financing in trade and commerce by providing working capital. Moreover, some pragmatic steps have been taken to reduce non-performing loans as well as to prevent new classification thereof. c) International Trade Agrani Bank Limited has earned full confidence of importers and exporters of the country by conducting its foreign trade related activities successfully through 40 authorized dealer branches across the country. For performing the international trade related business skilfully, the bank has a large network of 328 foreign correspondents in the several countries of the world. Besides this, the bank is maintaining 41 nostro accounts with the world reputed banks. d) Import-Export Business The import business stood at Tk. 15,741 crore in The export business was Tk. 8,345 crore in e) Foreign Remittance Business Agrani Bank Limited has achieved positive growth in remittance business though remittance inflow in our country slowed down last year due to continuous recession in world economy. We received foreign remittance for USD 1, million in the year 2014 with a growth rate of 2.95 percent out of USD 1, million of year Like year 2012 and 2013, in 2014 also Agrani Bank Limited has secured the first place among the State Owned Commercial Banks and stood second among the banks of Bangladesh in bringing in foreign remittance. Our contribution to the national figure of remittance business is percent for the year ended on 31 December 2014 and it is the highest in the last five years of ABL. ABL s easy but instant online remittance distribution system has enabled to achieve this development in this portfolio. Agrani s contribution in context of global achievement in foreign remittance sector is given below: , , Current and other deposit L) m ú `i gvb AMÖYx e vsk wjwg UW m ú `i YMZ gvb i v K i P j Q hv Gi cwipvjbv kw³i GKwU w`k m ú `i gvb wbwðz K ib e vsk _ K FY `qv nq A_ vr e vs Ki m ú `i DrKl Zvi gv bi cö kœ KLbI Av cvl Kiv nq bv m ú `i YMZ gvb e w i Rb e emv I evwy R FY `qv K e vsk AMÖvwaKvi w` Q Ges G Î PjwZ g~jab FY cö`vb Ki Q bzzb kªyxweb vwmz F Yi cwigvy e w ivak í Ges cyi bv kªyxweb vwmz F Yi UvKv Av`vq c~e K Kwg q Avbvi Rb we kl e e v bqv n q Q M) AvšÍR vwzk evwyr 10, , Savings Bank Deposits Fixed Deposits Bills Payable AMªYx e vsk wjwg UW 40wU GwW kvlvi gva g mdjfv e AvšÍR vwzk evwyr msµvší Kvh vejx m úv`b K i ` ki Avg`vwb I ißvwbkvik `i c~y Av v AR b Ki Z m g n q Q ` fv e AvšÍR vwzk evwyr m úv`b Kivi Rb we k i wewfbœ ` k e vs Ki 328wU we `wk K imc ÛU i q Q ZvQvovI AMÖYx e vsk wjwg UW we k i L vzbvgv e vsk jvi mv _ 41wU b ªv GKvD Um cwipvjbv Ki Q N) Avg`vwb-ißvwb e emv 2014 mv j Avg`vwb e emvq A_ vqb n q Q 15,741 KvwU UvKv Ges ißvwb e emvq A_ vqb Kiv n q Q 8,345 KvwU UvKv O) iwgu vý e emv Ae vnz A_ bwzk g `vi Kvi Y MZ eq ii Zzjbvq ` ki iwgu vý cöev n FYvZ K cöe w m Ë I AMÖYx e vsk wjwg UW iwgu vý Avni Y BwZevPK cöe w AR b m g n q Q 2014 m b e vs Ki AwR Z iwgu v Ýi cwigvy 1, wgwjqb gvwk b Wjvi, hv 2013 m b wqj 1, wgwjqb gvwk b Wjvi, hlv b cöe w i nvi 2.95 kzvsk AMÖYx e vsk wjwg UW iwgu vý Avni Y 2012, 2013 mv ji b vq 2014 m bi ivóªxq gvwjkvbvaxb e vs Ki g a cö_g Ges evsjv ` ki mkj e vs Ki g a 2q Ae vb a i i L Q ww m ^i 2014 mgvß eq i ` ki gvu iwgu vý cöev n AMÖYx e vs Ki Ae`vb kzvsk, hv e vs Ki wemz 5 eq ii g a m e v P GB D jøl hvm AMÖhvÎv m e n q Q Sv gjvgy³, mnr Ges Zvr wyk Ab-jvBb iwgu vý weziy e e vi Kvi Y wemz K qk eq i ` k gvu iwgu vý cöev ni cöw Z AÎ e vs Ki iwgu v Ýi Zzjbvg~jK wpî wb œiƒct

129 Global Remittance for the years 2010, 2011, 2012, 2013 & 2014 Year Global ABL % million USD , , , , , , , , , Amount in million USD ABL Global To keep the present growth rate up ABL has tied up with six new Foreign Exchange Houses in Besides, it is good to inform that Agrani Exchange Company (Australia) Pty. Limited a subsidiary of ABL has clicked to operation since November, At present, the number of ABL s remmitance business partners along with its own 4 subsidiaries stands at 61. In line with expansion policies ABL has already undertaken a step to open an own remittance house in the largest market of remittance in Saudi Arabia. In addition to that most of our Middle East partners come up with their Web Based live remittance product and that invariably will be a catalyst to the Middle East based remittance flow. Comparative studies of remittance business of different banks have been furnished below: iwgu vý e emvq AMÖMwZ a i ivlvi Rb AMÖYx e vsk wjwg UW 2014 m b 6wU bzzb we `wk G PÄ nvd Ri mv _ Pzw³e n q Q G Qvov b f ^i 2013 n Z AMÖYx G PÄ Kv úvwb (A óªwjqv) wcwuiqvb. wjwg UW Gi gva g iwgu vý cöiy ïiæ n q Q ez gv b AÎ e vs Ki wbr ^ 4wU G PÄ nvdrmn gvu Pzw³e iwgu vý nvd Ri msl v 61wU iwgu v Ýi me e nr evrvi ga cövp we klz: mšw` Avi e AMÖYx e vsk wjwg UW Gi wbr ^ GKwU G PÄ nvdr Lvjvi cöv_wgk Kvh µg ïiæ n q Q ga cöv P AMÖYx e vs Ki mv _ m úk hy³ iwgu vý nvdr jv Web Based Remittance c wzi gva g iwgu vý cªiy ïiæ K i Q hv ga cövp _ K ` k AwaK iwgu vý cªi Y mnvqk n e wb œ MZ eq i AMÖYx e vsk wjwg UWmn wewfbœ e vs Ki cövß iwgu vý Gi weeiy `qv n jvt Bank wise Position of Remittance Name of Bank million USD Year Islami Bank (BD) Limited 3, , , , , Agrani Bank Limited , , , , Sonali Bank Limited 1, , , , , Janata Bank Limited , , , Other Banks 4, , , , , Total 10, , , , , * Source: Bangladesh Bank Website Annual Report 2014 t 129

130 Handing over r emittance drawing arrangement between Agrani Bank Limited & UAE Exchange Sdn Bhd Malaysia Agreements with multinational Exchange Houses named RIA Financial, a UK based Company, Sigue Global services of USA, Joyalukkas group of Dubai, CBL Money Transfer and UAE Exchange Centre of Malaysia are under process. A huge number of Bangladeshi expatriates prefer to send money through ABL for its better exchange rate and also for its online remittance distribution connectivity with all of its 921 branches having cash payment service over the counter by using Pin Code. To keep remittance flow up, ABL sponsors different incentive programs for its valuable customers. The country wise remittance received by ABL in the year 2014: hy³ivr wfwëk eûrvwzk Exchange House RIA FINANCIAL, hy³iv óªi Sigue Global Services, `yevb Gi Joyalukkas Group Ges gvj qwkqv wfwëk CBL Money Transfer Ges UAE Exchange, Malaysia Gi mv _ iwgu vý Pzw³ cöwµqvaxb i q Q AÎ e vs Ki 921wU kvlvq AbjvBb iwgu vý www ªweDkb buiqvk _vkvq wcb Kv Wi gva g iwgu v Ýi A_ cwi kva e e v Pvjy i q Q cöwz hvwmzvg~jk G PÄ iu cö`v bi Kvi Y wecyj msl K cöevmx evsjv `kx AMÖYx e vs Ki gva g iwgu vý cöiy Ki Q G aviv Ae vnz ivlvi j e vs Ki ewbwdwmqvwi/ iwguvi `i Rb wewfbœ ï f Qv Dcnvi cö`v bi gva g DØy KiY Kg m~wp cwipvjbv Ki Q 2014 mv j wewfbœ `k n Z AÎ e vs Ki cövß iwgu v Ýi wpî wb œiƒc: Taka in crore Sl. No. Country name BDT 1 KSA 3, UAE 1, Malaysia 2, Singapore 1, Kuwait Oman Bahrain Qatar USA 2, Italy Australia Others Total 12, Italy Qatar Oman USA Bahrain Kuwait Singapore Country Wise Remittance in 2014 Crore Taka Others Australia Saudi Arab UAE Malaysia

131 f) Guarantee Business In 2014, the Bank issued guarantees worth Tk. 1, crore compared to Tk crore in the previous year. The guarantees were issued in favour of different government authorities, autonomous bodies, corporations, multi-national companies etc. against proper securities on behalf of clients of the Bank. g) Fund Management and Treasury Operation As per the Central Bank s Guidelines on Core Risk Management Policy, the Bank has restructured its treasury functions into three sections i.e. i) Money Market, ii) Foreign Exchange (FX) and iii) Capital Market or Equity Desk. Money Market is devoted to maintaining CRR & SLR and buying and selling interest bearing securities. FX desk buys and sells foreign currencies. Equity desk deals with investment of equity and shares. Overall treasury function operates through three segments i) Treasury Front Office, 2) Treasury Mid Office and 3) Treasury Back Office. Treasury Front Office deals with operational activities, Mid Office for regulations and monitoring, Back Office for settlement and reconciliation. Treasury Division has been playing a very vital role for the advancement of the Bank. Two major statutory requirements CRR and SLR are maintained efficiently by this Division. Asset Liability Management is the most important job done by the Treasury Division. A significant share of the total income of the Bank has been contributed by this Division through money market and FX operations. The treasury of the Bank is a major player both in the inter bank money market and foreign exchange market. Item wise income of the Treasury Division in 2013 & 2014 is shown below: P) M vivw U e emv 2014 mv j M vivw U e emv q e vsk 1, KvwU UvKvi M vivw U cö`vb K i, hvi cwigvy 2013 mv j wqj KvwU UvKv Dchy³ Rvgvb Zi wecix Z MÖvnK `i c e vsk KZ K wewfbœ mikvwi, ^vqëkvwmz cöwzôvb/ms v, eûrvwzk Kv cvwbi AbyK~ j M vivw U cö`vb Kiv nq Q) Znwej e e vcbv I UªRvwi Kvh µg K `ªxq e vs Ki Kvi wi g v br g U MvBW jvbý Abyhvqx Ges AvšÍR vwzk gv bi mv _ mvgäm i L AÎ e vs Ki UªRvwi Kvh µg K (i) gvwb gv K U, (ii) d ib G PÄ I (iii) K vwcuvj gv K U ev BKz BwU W -G wzbwu As k cybm Vb Kiv n q Q gvwb gv K U CRR I SLR msi Y Ges my` wfwëk wmwkdwiwur µq weµ qi mv _ m ú ³ d ib G PÄ W ˆe `wkk gy`ªv µq weµq K i _v K BKy BwU W kqvi I BKz BwU Z wewb qvm K i _v K UªRvwi wwwfk bi mvwe K Kvh µg 1) UªRvwi d«u Awdm, 2) UªRvwi wgw Awdm I 3) UªRvwi e vk Awdm Gi gva g m úvw`z n q _v K UªRvwi d«u Awdm Acv ikbvj Kvh µg, wgw Awdm i jkb I gwbuwis Ges e vk Awdm m Uj g U I wikbwmwj qk bi KvR K i _v K e vs Ki AMÖMwZi Î UªRvwi wwwfk bi iæz Acwimxg cöavb `ywu mswewae Rgv CRR I SLR msi Yi KvR UªRvwi wwwfkb ` Zvi mv _ K i _v K m ú` I `vq e e vcbvi gz AZ ší iæz c~y KvRwU UªRvwi wwwfkb m úv`b K i e vs Ki Av qi GKwU eo Ask UªRvwi, gvwb gv K U I d ib G PÄ n Z AwR Z nq AÎ e vs Ki UªRvwi wwwfkb AvšÍt e vsk gvwb gv K U I d ib G PÄ gv K Ui Ab Zg mwµq m`m wb gœ LvZ Iqvwi UªRvwi wwwfk bi 2013 I 2014 mv ji Avq cö`k b Kiv nj: Taka in crore SL. NO. Items Sale of Securities Sale of Shares Interest on Debenture Discount on Treasury Bills & Bonds a) Discount on Treasury Bills b) Discount on Bangladesh Bank Bills c) Discount on Treasury Bonds Interest on Treasury Bonds a) Interest on Jute Bonds b) Interest on 2, 5, 10, 15 & 20 years Treasury Bonds c) Interest on Kohinoor Bonds - d) Interest on BPC Treasury Bonds e) Interest on BJMC Treasury Bonds Dividend Warrant Interest on Subordinated Bonds a) Prime Bank Bonds b) MTBL Bonds c) NBL Bonds d) BRAC Bank Bonds e) UCBL Bonds f) One Bank Bonds Interest on Other Bonds a) Orascom Telecom Bonds b) Northern Power Bonds Interest on Reverse Repo Total 1, , Annual Report 2014 t 131

132 A functioning and effective Asset Liability Management Committee regulates and articulates the Bank s total need, exposures, rates and strategy for Asset Liability Management. An effective ALM process has enabled the Bank to efficiently manage and project its asset and liability flow, resulting in a smooth flow of all funding requirement of the bank while maximizing all profit opportunities. Through a concerted effort the Treasury Division has been functioning throughout the year and are determined to keep it up for better management of Bank s Assets and Liabilities. h) Investment The investment portfolio of the Bank at the end of the year 2014 stood at Tk 15, crore as against Tk. 14, crore in the previous year, registering a growth of 1.57 percent. The Bank has always given emphasis on high yielding investments and maintains Statutory Liquidity Requirement (SLR) as fixed by Bangladesh Bank vide BRPD circular no. 11 dated 25 August 2005 and circular no. 12 dated 25 August The portfolio of investment of the Bank as on 31 December 2014 is shown below: Types of Securities Government Securities Nongovernment Securities Year Taka in crore Treasury Bills 3, , Treasury Bonds 8, , Reverse REPO Prize Bonds Sub-Total (A) 12, , Other Bonds Debentures Shares 2, , Sub-Total (B) 2, , Total (A+B) 15, , GKwU Kvh Ki m ú` I `vq e e vcbv KwgwU e vs Ki gvu Znwe ji Pvwn`v, e envi, my `i nvi wba viy Ges m ú` I `vq e e vcbvi Kg KŠkj wba viy K i ` Zv I wep YZvi mv _ G wwwfkb GKwU Kvh Ki m ú` I `vq e e vcbv c wzi mvnv h m ú` I `vq cöev ni h_vh_ cwigv ci gva g Znwej cöevn wbwðz K i m fve m e v P gybvdv AR b K i _v K UªRvwi wwwfk bi mgwš^z cöqv mi gva g e vs Ki m ú` I `vq e e vcbv ` Zv I wep YZvi mv _ wbiwew Qbœfv e Kiv m e n Q R) wewb qvm 2014 mv j e vs Ki gvu wewb qv Mi cwigvy wqj 15, KvwU UvKv c~e ez x eq i Gi cwigvy wqj 14, KvwU UvKv G Î cöe w i nvi 1.57 kzvsk D P my` cö`vbkvix wewb qv Mi cöwz eiveib e vsk bri w` q Q evsjv `k e vs Ki weaviwcww mvkz jvi bs 11, ZvwiL 25 AvMó 2005 I bs 12, ZvwiL 25 AvMó 2005 Abyhvqx e vsk wewae Zvij ( UzUwi wjkzbwwwu wi Kvqvi g U) i v K i hv Q 2014 mv ji 31 ww m ^i e vs Ki wewb qvm cwiw wz wqj wb œiƒc: mikvwi emikvwi wmwkdwiwui aiy eqi KvwU UvKvq UªRvwi wej 3, , UªRvwi eû 8, , wifvm wi cv cövbr eû Dc- gvu (K) 12, , Ab vb eû ww eâvi kqvi 2, , Dc- gvu (L) 2, , gvu (K+L) 15, Crore Taka Shares 2, Other Bond Debentures and others10.41 Treasury bills 3, Reverse REPO Investment 2014 Treasury Bonds 8,

133 i) Loans and Advances The total loans and advances as on 31 December 2014 was Tk. 23, crore as against Tk. 20, crore at the end of previous year. The advance portfolio of the Bank is well diversified and covers funding to a wide spectrum of business and industries including agro-based and agro-processing, ship breaking, steel & engineering, paper & paper products, chemicals, construction, real estate and loans under consumers credit schemes, various trading businesses, serviceholders loan and women entrepreneurs of the country. Sector-wise position of Loans and Advances as on 31 December 2014 is shown below: Taka in crore Sector-wise Loans Agriculture and Fishery 1, Jute and Jute goods S) FY I AwMÖg 2014 m b FY I AwMÖ gi cwigvy wqj 23, KvwU UvKv c~e ezx eq i Gi cwigvy wqj 20, KvwU UvKv e vs Ki F Yi AvIZvq i q Q wewfbœ kªyxi FY Ges Zv wewfbœ Lv Z mâvwjz e emv I wk íi h me Dc-Lv Z Zv mâvwjz n q Q m jv n Qt G v MÖv ebrw Ges G v MÖv cö mwms wkí, kxc eªwks, w j Ges BwÄwbqvwis, ccvi I ccvi cövwv±m, KwgK vjm, wbg vy, Avevmb, KbwRDgvi µwwu xg, wewfbœ e emvwqk Kvh µg, bvix D ` v³v Ges PvKzwiRxex FY 31 ww m ^i 2014 Zvwi L LvZ wfwëk FY I AwMÖ gi weeiy wb œiƒc: KvwU UvKvq F Yi aiy K wl I grm 1, cvu I cvurvz `ªe Transport, Storage& Communication cwieny, gry` I hvmv hvm Ship Breaking Textile & Readymade Garments 1, , Food and Allied Industry Construction & Engineering Pharmaceuticals & Chemicals Leather Power & Energy , Professional and Services Housing Wholesale/ Retail Trading 3, , wkc eªwks e I ˆZix cvkvk 1, , Lv` Ges mswkøó wkí wbg vy Ges cö KŠkj Jla I imvqb Pvgov LvZ we`y r LvZ , ckv I mev LvZ Avevmb cvbkvwi I LyPiv e emv 3, , Personal Loan (staff loan & other personal loan) 2, , e w³mz FY ( vd jvb Ges Ab vb e vw³mz jvb) 2, , Others 10, , Total 23, , Ab vb 10, , gvu 23, , Annual Report 2014 t 133

134 The Bank attaches top-most importance to acquisition of quality assets and carries out appropriate lending risk analysis while approving commercial and trade loans to clients. The matrix of advances of the Bank as on 31 December 2014 was as follows: Sector Wise Loans 2014 F Yi YMZ gvb i vq e vsk m e v P iæz w` q _v K evwywr K I e emvwqk FY `qvi mgq FY SzuwK we køly h_ vh_fv e Kiv nq 2014 mv ji 31 ww m ^ i F Yi wpî wb œiƒc wqj: Agriculture and Fishery Jute and Jute goods Transport, Storage and Communication Ship Breaking Textile and Readymade Garments Food and Allied Industry Construction and Engineering Pharmaceuticals and Chemicals Leather Power & Energy Professional and Services Housing Services Wholesale/Retail Trading Personal Loan (staff loan and other personal loan) Others Crore Taka i. Industrial Credit Agrani Bank Limited as one of the state-owned commercial banks plays important role in implementing Govt s rapid industrial policy for the overall development of the country. It extends term loan as well as working capital loan facilities almost in all sectors of industrialization both individually and jointly with other goverment and private banks and financial institutions under consortium/ syndication arrangement. Credit facilities are made available not only in establishing new projects but also in BMRE of existing projects. A total sum of Tk 7, crore has been disbursed against a sanctioned amount of Tk 11, crore in 1,081 projects up to December 2014, the outstanding of which stands at Tk. 6, crore. The comparative study of project loans between 2013 and 2014 is as follows: i. wkí FY ivóªxq gvwjkvbvaxb Ab Zg evwywr K e vsk wn m e AMÖYx e vsk wjwg UW ` ki Dbœq bi Rb mikv ii `ªæZ wkívqb bxwz ev Íevq b iæz c~y f wgkv cvjb Ki Q wkívq bi cövq mkj Î G e vsk n Z ^Zš fv e I Kb mvwu qvg/ wmwû Kkb e e vq wewfbœ mikvwi I emikvwi e vsk Ges Avw_ K cöwzôv bi mv _ hš_fv e ga g I `xn gqv`x cök í gqv`x I PjwZ gyjab FY cö`vb K i _v K G Î bzzb cökí vc b FY cö`v bi cvkvcvwk we` gvb cök íi weggavib Ki YI FY cö`vb Kiv nq G e vsk n Z wkí FY Lv Z 31 ww m ^i 2014 ZvwiL ch ší 1,081 wu cök í gäywik Z FY 11, KvwU UvKvi wecix Z 7, KvwU UvKv weziy Kiv n q Q hvi `vqw wz 6, KvwU UvKv 2013 I 2014 mv ji k l cökí F Yi Zzjbvg~jK wpî wb œiƒc: Taka in crore Year Loan Sanctioned Loan Disbursed Number Amount Number Amount Outstanding ,716 7, ,646 6, , , , , Major Industrial Loan Sectors in 2014: Agrani Bank Limited sanctioned loans in different sectors, the important ones of which are as follows: Textiles (Spinning, Weaving, Dyeing, Knitting, Finishing) Export-Oriented Garments Industry Dairy and Poultry Jute Industry Fisheries Rice and Flour Mills Pharmaceuticals 2014 mv j e vs Ki wkí F Yi cªavb LvZmg~nt AMÖYx e vsk wjwg UW n Z wewfbœ Lv Z wkí FY cö`vb Kiv nq Gi g a D jøl hvm LvZmg~n wb œiƒc: U UvBj (w úwbs, DBwfs, Wvwqs, wbwus, wdwbwks) ißvwbgylx cvlvk wkí WBwi I cvjwuª cvu wkí wdkvwir ivbm GÛ d viqvi wgjm dvg vwmdwuk vjm 134

135 Transportation Bricks Hotel Education Poverty Alleviation Small and Cottage Industries Power Plant Cement Ceramic Paper and Board Mills Tanneries Printing and Packaging Engineering Electrical and Electronics Computer Food and Allied Chemicals Hospitals and Clinics Telecommunication Filling Station Glass and Glass ware Commercial Building and Shopping Mall ii. Credit Lines Apart from own source, Agrani Bank Limited utilizes 100 million US Dollar soft loan aollowed by Standard Chartered Bank, UK. iii. Loan to Power Sector Currently Power Sector is treated as the priority sector of the country. This Bank has been playing a significant role in financing this sector. Up to December 2014, the bank has disbursed a total of Tk.1, crore in 8 projects generating 621 MW electricity per day all of which are duly linked with the national grid of the country. iv. Loan to Health Sector Individual s sound health is mandatory for the overall development of the country. Sound health refreshes both body and mind together and thereby instigates motivation in daily work. Hence, to spread the medical services to the doorsteps of mass people of the country, the bank has disbursed a total of Tk crore so far to 23 hospitals and clinics, the outstanding of which is Tk crore at the end of the year. v. Syndication Financing ABL has been playing an important role in implementing large project under syndication financing. Since 2005, the Bank has financed Tk.2, crore against 77 projects up to December 2014 as the member bank as well as lead arranger of syndication/consortium, the outstanding of which is Tk. 1, crore at the end of the year. cwieny weªkm nv Uj wk v `vwi`ª we gvpb z`ª I KzwUi wkí we`y r Drcv`b K `ª wm g U wmivwgk ccvi GÛ evw wgjm U vbvwir wcöw Us GÛ c v KwRs BwÄwbqvwis B jkwuªk vj GÛ B jkuªwbkm Kw úduvi dzw GÛ GjvBW KwgK vjm nvmcvzvj I wk wbk UwjKwgDwb Kkb wdwjs kb Møvm GÛ Møvm Iq vi evwywr K feb I kwcs gj ii. µwwu jvbbm AMÖYx e vs Ki wbr ^ Drm QvovI wb œv³ µwwu jvbb Standard Chartered Bank, UK Gi Aby gvw`z 100 wgwjqb gvwk b Wjvi md&&u jvb e envi Ki Q iii. we`y r Lv Z FY cö`vb ez gv b we`y r LvZ ` ki AMÖvwaKvi LvZ wn m e wpwýz e vsk G Lv Z A_ vq b iæz c~y f wgkv cvjb Ki Q 2014 mv ji ww m ^i ch ší G Lv Z 8wU cök í gvu 1, KvwU UvKv FY weziy Kiv n q Q hv n Z ˆ`wbK 621 gmviqvu we`y r Drcvw`Z n Q Ges Zv RvZxq MÖx Wi gva g ` ki wewfbœ A j mieivn Kiv n Q iv. ^v Lv Z FY cö`vb ` ki mvwe K Dbœq bi Rb cöwzwu bvmwi Ki my ^v GKvšÍ cö qvrb my kixi `n gb m ZR iv L Ges K g cöiyv hvmvq ZvB ` ki Avcvgi Rb Mvwôi Øvi cöv ší ^v mev cuš Q `qvi cöqv m e vsk KZ K G hver 23wU nvmcvzvj I wk wb K gvu KvwU UvKv FY weziy Kiv n q Q hvi ermiv ší `vqw wz KvwU UvKv v. wmwû Kkb FY wmwû Kkb e e vq eo eo cökí ev Íevq b AMÖYx e vsk wjwg UW ` k iæz c~y f wgkv cvjb K i Avm Q G Î 2005 mvj _ K jxw e vs Ki f wgkv cvjbmn wmwû Kkb/ Kb mvwu qv g AskMÖnYKvix m`m e vsk wn m e ww m ^i 2014 ch ší 77wU cök íi wecix Z 2, KvwU UvKv A_ vqb Kiv n q Q, hvi ermiv ší `vqw wz 1, KvwU UvKv Annual Report 2014 t 135

136 vi. SME Financing of ABL Bangladesh government has taken it as a thrust sector and given more emphasis on it. This sector is labor intensive with short gestation period. Its is treated as income generating machine and driving force of Industrialization. Agrani Bank Limited has formulated a set of regulations and guidelines on SME Financing complying with the Bangladesh Bank s instruction. At present, Micro Industry/Enterprise and Cottage Industry/Enterprise are also included in SME Financing. Criteria of SME in ABL There are 4 criterias of SME in ABL, such as: (A) Medium Industry/Enterprise (ME) (B) Small Industry/Enterprise (SE) (C) Micro Industry/Enterprise (MIE) (D) Cottage Industry/Enterprise (CIE): Three sectors in SME financing are as follows: Service sectors: Hotel, restaurant, tailoring, laundry, hospital, clinic, kindergarten, block and printing, tractor, power tiller, irrigation equipment etc. Business sectors: Grocery shop, cloths shop, medicinal shop, plastic and synthetic shop, shop of spare parts, rods and cement business, furniture, agro-business and other income generating and socially acceptable business. Industrial sectors: Cotton industry, jute industry, garments, rice mill, plastic industry, saw mill, light engineering, agro processing, feed mill, furniture industry and other socially acceptable and eco-friendly business. NGO Linkage Program of ABL ABL is a pioneer Bank in expanding credits through the competent NGOs. The Bank engaged different NGOs vi. GmGgB Lv Z AMÖYx e vsk wjwg U Wi A_ vqb evsjv `k mikvi GmGgB K GKwU AMÖvwaKvi LvZ wnmv e MÖnY K i Gi Dci AwaK iæz v ivc K i Q GwU kögeûj Ges ^í mg q dj`vqk LvZ GLvZwU K Avq Drcv`K hš Ges wkívq bi PvwjKv kw³ wn m e we epbv Kiv nq ` ki mvwe K A_ bwzk cöe w AR bi j ÿ z`ª I gvsvix wk í A_ vq bi D Ï k evsjv `k e vs Ki wb ` kbvi Av jv K AMÖYx e vsk wjwg UW GmGgB A_ vq bi Dci GK Q cöweavbgvjv Ges bxwzgvjv ˆZwi K i ez gv b z`ª wkí/cöwzôvb Ges KzwUi wkí/cöwzôvb K GmGgB A_ vq bi AšÍf ³ Kiv n q Q AMÖYxi GmGgB µvb Uwiqv AMÖYx e vsk wjwg UW Gi GmGgB µvb Uwiqv wb œv³ 4 ai bi: K) gvsvwi wkí/d ` vm L) z`ª wkí/d ` vm M) gvb µv wkí/d ` vm N) KzwUi wkí/d ` vm GmGgB F Yi LvZ mg~n wb gœv³ 3 cökvi: mev LvZt nv Uj, i z i U, UBjvwis, jwûª, nvmcvzvj, wk wbk, wkûvimv U b, eøk GÛ wcöw Us, Uªv±i, cviqvi wujvi, mp hš BZ vw` e emv LvZ t gyw` `vkvb, Kvc oi `vkvb, Jl ai `vkvb, cøvw K I wmb _wu Ki `vkvb, LyPiv hš vs ki `vkvb, iwwm g Ui e emv, dvwb Pvi e emv, K wlrvz cy, Ges Ab vb Avq Drmvwi I mvgvwrkfv e MÖnY hvm e emv wkí LvZ t Kvco wkí, cvu wkí, Mv g Um, Pvj Kj, cøvw K wkí, KivZ Kj, nvjkv cö KŠkj wkí, K wl cöwµqvkiy, wdw wgj, dvwb Pvi wkí, Ges Ab vb cwi ek evüe I mvgvwrkfv e MÖnY hvm e emv GbwRI wjs KR cövmövg hvm GbwRI `i gva g FY Kvh µg m úªmvi Y AMÖYx GKwU AMÖMvgx e vsk e vskwu GmGgB FY mev m úªmvi Y wewfbœ MOU Signing regarding hiring Ansar Forces between ABL & Bangladesh Ansar 136

137 Handing over of participatory agreement betwen Agrani Bank Limited and Bangladesh Bank. for expanding the SME credit services. Any potential NGO can avail the credit facilities from this bank under the existing rules and regulations. The Bank has already delivered a total loan of Tk. 920 millions to the BRAC and 1,100 millions to MIDAS as wholesale credits with soft terms and conditions. As a retailer, they re-lent the same to the targeted SME people. GbwRI cöwzôvb K wb qvwrz K i Q h Kvb hvm GbwRI cöwzôvb e vs Ki we` gvb wewagvjvi Av jv K GB FY myweav MÖnY Ki Z cv i B Zvg a e vskwu GbwRI cöwzôvb eª vk- K 920 wgwjqb UvKv Ges gvbwvm- K 1,100 wgwjqb UvKv FY cö`vb K i Q wi UBjvi wn m e Gme GbwRI cöwzôvb GmGgB FY MÖnxZv `i gv S G FY cybt weziy Ki Q Disbursement Target 2014 SME Financing of ABL in 2014 Taka in Milliion Disbursement during 2014 Percent of Outstanding Amount as on Dec Number Amount Disbursement Rate Number Amount Small Enterprises 13,761 19,021 11, % 78,173 35,253 Medium Enterprises 7, , % 2,129 19,043 Total 20,800 19,539 19, % 80,302 54,296 Foreign Aided Credit Programs The ABL has been utilizing its own fund and the foreign fund for some credit operation. The credit programs namely EGPRP and MSFSCIP (Kurigram) are being successfully operated by the bank under the financial assistance of IFAD. Under the program EGPRP, Taka crore disbursed amoung 3709 People and under the Program MSFSCIP Bank disbursed Tk Crore among 3 Projects. The bank is extending credits to the people through its 183 branches. Performance in SME Sector 2014 In the year 2014, the Agrani Bank Limited has disbursed SME loan of Tk.19, million to the 15,539 entrepreneurs. At the same time, the bank has recovered Tk. 15, million from the borrowers. About million of SME loan has been disbursed among 742 ˆe `wkk mvnvh cyó FY`vb cökí FY weziy Kvh µg cwipvjbvi Rb AMÖYx e vsk wjwg UW e vs Ki wbr ^ Znwej I ˆe `wkk Znwej e envi K i Q BwRwcAviwc I GgGmGdGmwmAvBwc (KzwoMÖvg) cökí `yõwu Bdv `i Avw_ K mnvqzvq mdjzvi mv _ cwipvwjz n Q BwRwcAviwc-Gi AvIZvq3709 MÖvnK K KvwU UvKv Ges GgGmGdGmwmAvBwc (KzwoMÖvg) Gi 3wU cök íi 0.11 KvwU UvKv FY weziy Kiv n q Q e vskwu mviv ` k gvu 183wU kvlvi gva g D ` v³v `i gv S FY weziy Ki Q 2014 mv j GmGgB Lv Z AR b AMÖYx e vsk wjwg UW 2014 mv j 15,539 Rb FY MÖnxZvi gv S gvu 19, wgwjqb UvKv weziy K i Q GKB mg q FY MÖnxZv `i wbku _ K FY Av`vq Kiv n q Q 15, wgwjqb UvKv 742 Rb gwnjv D ` v³vi AbyK~ j wgwjqb UvKv weziy Kiv n q Q cwi ek evüe ( mši Annual Report 2014 t 137

138 women entrepreneurs. About Tk million has been disbursed to the green sectors (solar energy and bio-gas plant). In this time outstanding volume of SME credit has stood up to Tk. 54,296 million. Growth of SME in Agrani Bank Limited As a state owned commercial bank, the ABL has given more emphasis to the SME financing which resulted in remarkable growth of SMEs. The previous five years growths of SMEs are shown below: vii SME Vision 2015 SME sector has played a vital role in economic development of some prosperous countries of Asia and Europe. The countries like Italy, Greece, Germany and China, Japan, HongKong, Taiwan, Thailand, Malaysia and India have developed they are national economy through the development of SMEs. So SME is capable of increasing national income as well as rapid employment generation, achieving Millennium Development Goals (MDGs) especially eradication of extreme poverty and hunger, gender equality and women empowerment in countries like Bangladesh being a labour abundant and capital scarce. SMEs have natural comparative advantages. In recognition of strategic importantace and benefits of financing SMEs, the Government of Bangladesh in its Poverty Reduction Strategy Paper (PRSP) highlighted small and medium enterprise (SME) as one of the flagship strategy for employment generating industrialization in the country. The Government also formulated policy strategies for development of SME in the industrial policy 2010 providing guidelines for SME development. As a development partner of the Government the Agrani Bank Limited has a wide vision for the year Under the vision, the SME credit should be extended to close door people. Keeping in this view, sufficient credit disbursement budget will be allocated for the year An action plan is made with a view to training up the managers and SME credit officers for better SME credit services. Special attention should be given to the green sectors. Apart from this, over all SME activities should be geared up according to Bangladesh Bank s guideline so that the Bank can reach in the remarkable SME position. kw³ I ev qvm vm cø v U) Lv Z G ch ší gvu wgwjqb UvKv weziy Kiv n q Q G mg q e vs Ki GmGgB FY w wzi cwigvy 54, wgwjqb UvKvq DbœxZ n q Q AMÖYx e vsk wjwg U Wi GmGgB F Yi cöe w GKwU ivóªxq gvwjkvbvaxb evwywr K e vsk wn m e AMÖYx e vsk wjwg UW GmGgB A_ vqb K AwaKZi iæz w` q Avm Q hvi d j e vskwu GmGgB Lv Z D jøl hvm cöe w AR b K i Q e vskwui wemz 5 eq ii GmGgB F Yi cªe w wb œ Zz j aiv n jv: Year Loan Outstanding (BDT in million) Loan Disbursed (BDT in million) Number Amount Number Amount ,519 12,100 29,948 26, ,030 11,791 33,872 35, ,317 12,496 33,551 35, ,081 1,403 38,042 61, ,539 19,566 80,302 54,296 vii GmGgB iƒckí 2015 GmGgB LvZ BD ivc I Gwkqvi wkqy mg kvjx ` ki A_ bwzk Dbœq b iæz c~y f wgkv cvjb K i Q BUvjx, MÖxm, Rvg vbx, Pxb, Rvcvb, nsks, ZvBIqvb, _vbj vû, gvj qwkqv I fvi Zi gz `kmg~n GmGgB Lv Zi Dbœqb NwU q Zv `i RvZxq A_ bxwzi e vck Dbœqb mvab K i Q ZvB evsjv ` ki gz kögeûj Ges mxwgz m ú` (g~ja bi Afve) m úbœ ` k GmGgB RvZxq Avq e w i mv _ mv _ `ªæZ Kg ms vb m wó, mnmªvã j gvîv AR b we kl K i Pig zav, `vwi`ªzv `~ixkiy, bvix-cyiæ li mgzv Avbqb Ges bvixi gzvq b we kl f~wgkv ivl Z m g GmGgBi Zzjbvg~jK wkqy myweav, GmGgB Lv Z A_ vq bi DcKvixZv Ges KŠkjMZ iæz wpwýz K i evsjv `k mikvi Zvi `vwi`ª we gvpb KŠkjc Î (wcavigmwc), ` ki Kg ms vbg~jk wkívq bi Rb z`ª Ges gvsvwi wkí K Ab Zg cöavb KŠkj wn m e Dc vcb K i Q evsjv `k mikvi wkíbxwz Gi gva g GmGgB Gi Dbœq bi Rb wewfbœ wb ` kbv w` q Kg KŠkj ˆZwi K i Q mikv ii Dbœqb mn hvmx wn m e 2014 mv j GmGgB Gi m cömvi Y AMÖYx e vsk Gi GKwU we Í Z iƒckí (wfkb) i q Q GmGgB Lv Zi e vck cömv ii D Ï k GB iƒck íi AvIZvq Dchy³ D ` v³v wbe vpb K i e vsk FY RbM Yi `vi- Mvovq cuš Q `qv n e G j 2014 mv j GmGgB FY wezi Yi Rb ch vß ev RU eivï cö`vb Kiv n e DËg FY mev wbwðz Kivi Rb cöwz eq ii b vq kvlv e e vck I GmGgB FY Kg KZ v `i cöwk Yi wel q GKwU Kg cwikíbv nv Z biqv n e cwi ek evüe Lv Z FY m cömvi Y we kl bri `Iqv n e G Qvov mvwe K GmGgB Kvh µg AviI MwZkxj Kivi j evsjv `k e vs Ki wb ` kbvi Av jv K cö qvrbxq c` ÿc MÖnY Kiv n e hv Z AMÖYx e vsk GmGgB Lv Z FY wezi Y GKwU D jøl hvm f wgkv cvjb Ki Z mÿg n e 138

139 viii. Agriculture and Rural Credit Agriculture is one of the priority sectors of the Governments in which the Bank has been financing since 1977 with broad objective of integrating rural people with the mainstream development activities and tap the unutilised sources in order to boost growth in agriculture including livestock, fishery and other off-farm activities. Poverty alleviation through income generating activities is one of the strategies which the Bank has been pursuing to make financial resources available to the rural poor to break poverty cycle and stimulate growth. Large number of targeted programs with loan amount to Tk. 5,000-1,00,000 and interest rate of 8 percent-10 percent were undertaken to reach the rural landless, marginal farmers, small enterpreneurs and distressed women. No collateral security is required for loan upto Tk. 1,00,000 on certain agriculture/ rural credit sector. So far the benificiaries under the 54 programs implemented by the Rural Credit Division includes 40,75,090 persons of different sectors and the amount involved is Tk. 4, crore up to December Banglsdesh Bank has formulated the policy/guidelines of environment friendly vermicompost organic fertilizer credit program for the financial year which has already been informed to the concerned. The major agri-credit projects/programmes of ABL are mentioned below: viii. K wl Ges cjøx FY K wl mikv ii GKwU Ab Zg AMªvwaKvi LvZ weavq AMÖYx e vsk wjwg UW 1977 mb _ K G Lv Z SY weziy K i Avm Q hv Z K lkmy Mevw` cï, gvq Pvl, K wl I Ab vb A-K wl Lv Z Zv `i Drcv`bgyLx Kvh µ gi gva g ` ki A_ bxwzi g~javivq DË ivëi AwaKnv i Ae`vb ivl Z cv i e vsk cjøx GjvKvi `wi`ª Rb Mvwô K wewfbœ cökvi Drcv`bgyLx I Avq Drmvix Kg Kv Û wb qvwrz Ki Yi gva g Zv `i mvgvwrk I A_ bwzk Ae vi mvwe K Dbœq b iæz cyy f wgkv cvjb K i Avm Q 8 kzvsk n Z 10 kzvsk my ` cjø xi f wgnxb, cövwšík Pvlx, z`ª D ` v³v Ges Amnvq gwnjv `i 5,000 UvKv n Z 1,00,000 UvKv ch ší FY wezi Yi j avh Kiv n q Q G Qvov KwZcq K wl/cjøx FY Lv Z mnvqk RvgvbZ QvovB 1,00,000 UvKv ch ší FY weziy Kiv n Q ïiæ n Z ww m ^i 2014 ch ší 54wU Kg m~wpi AvIZvq e vsk KZ K 40,75,090 Rb FY MÖnxZvi gv S 4, KvwU UvKv FY weziy Kiv n q Q A_ eq i evsjv `k e vsk KZ K cwi ek evüe Ku Pv K úv ˆRe mvi (Vermicompost) cök í FY cö`v bi bxwzgvjv Rvix Kiv n q Q hv wb ` k cwic Îi gva g B Zvg a mswkøó `i AewnZ Kiv n q Q AMÖYx e vsk wjwg UW Gi cöavb cjøx FY cökí/kg m~wp jv wb œ D jøl Kiv n jv: Comparative figure of Agriculture/Rural Credit of 2013 and 2014 Taka in Crore Sl. No Sector Target Disbursement Target Disbursement 1 Crops Fisheries Livestock Poverty Alleviation Others Total Crop Loan Programme, Crop Diversification Project, Swanirvar Credit Programme, Rural Finance Project (RFP), Shashya Gudam Reen Prokalpa, Shrimp Cultural Programme (General), Credit Scheme for Bananas Cultivation, Credit to Salt Growers, Khudra Uddyog Credit Programme, Fisheries Financing Programme (Pond), Semi-Intensive Shrimp Culture Programme, Credit Programme for Irrigation Equipment, Self Employment Programme for the Unemployed Youth, Credit for Rural House Building, Credit for Rural km FY, km eûgylxkiy FY, ^wbf i FY, cjøx FY cökí (AviGdwc), km `vg FY cökí, wpswo Pvl FY (mvaviy), Kjv Pvl FY, jey Drcv`b FY, z`ª D ` vm FY cökí, grm Pvl FY (cykz i grm Pvl), Avav-wbweo wpswo FY, mp hš FY, AvZœKg ms vb g~jk FY `vb, cjøx M n wbg vy FY, cjøx cwieny FY, z`ªkvq nuvm gyimxi Lvgv ii Rb FY `vb, mvaviy cjøx Annual Report 2014 t 139

140 Transport, Bank Loan Programme in Small Scale Poultry Farms, General Rurul Credit Programme, Horticulture Programme for Poverty Alleviation, Agricultural Equipment Project, Credit Scheme for Bettle Cultivation, Cattle, Miltching Cow, Buffalow Purchase and Beef Fattening Credit Progrmme, Goat Rearing Programme for Poverty Alleviation, Ram Rearing Programme for Poverty Alleviation, Vermicompost organic fertilizer, Agro-based Project Loan which includes- Fish Cultivation Project, Fish and Shrimp/Carp Hatchery/ Nursery Project, Dairy Project, Poultry, Hatchery and Rearing Project, Integrated Farms, Feed Meals etc. The Bank has fixed target to disburse Tk. 660 crore in financial year. Upto December 2014 the bank in the mean time disburse Tk crore out of which outstanding amount is Tk crore. j) Loan Classification In 2014, total loan classification increased to Tk. 3, crore as against Tk. 3, crore in 2013 and the percentage of loan classification reduced to percent in 2014 as against percent of k) Loan Recovery Activities 2014 To reduce the amount of classified loans, plans are formed aiming at the Head office and grassroots level. Activities are run to achieve the goal upon setting targets at the beginning of the year. Declaring November 2014 as classified loan recovery month, special activities by fourteen teams comprising executives/ senior executives were run alongside the regular activities to accelerate recovery of classified loans. After visiting grassroots level, in the month of November & December, the senior executives have issued special directives to zonal & branch level for taking effective measures for recovering classified loans. Besides, Five non-government debt collection agents have been deployed to recover written-off loans. As a result of the measures taken, there was a significant progress in recovering default-loans in the last quarter of the year. Loan Recovery comparison in 2013 & 2014 Total loans and advances (including staff loan) on stood at Tk. 23, crore. Against this, the amount of classified loans was Tk. 3, crore, which is percent of total loans & advances. Classified loans recovered amounting to Tk. 1, crore which was percent of total yearly recovery target of Tk. 2, crore. FY, `vwi`ö we gvp b D` vb wfwëk dmj Drcv` b FY, K wl hš cvwz FY, cvb Pvl FY, Mvfx cvjb, nv ji ej`/gwnl µq, Miæ gvuvzvrvkiy FY, `vwi`ª we gvp b QvMj cvjb FY, `vwi`ª we gvp b fov cvjb FY, KuPz K úv mvi Drcv`b FY, K wl wfwëk cökí FY-Gi AvIZvq: grm Pvl cök í FY, grm Pvl n vpvix/bvm vix cök í FY, WBwi wk í FY, cvwëª, n vpvwi/bvm vwi wk í FY, mgwš^z cökí FY, wdw wgj wk í FY BZ vw` A_ eq i K wl I cjøx FY wezi Y e vs Ki jÿ gvîv 660 KvwU UvKv ww m ^i 2014 ch ší B Zvg a KvwU UvKv FY weziy Kiv n q Q hvi wecix Z KvwU UvKv e Kqv w wz i q Q T) FY kªyxweb vmkiy kªyxweb vwmz F Yi cwigvy 2013 m bi 3, KvwU UvKvi wecix Z 2014 m b `uvwo q Q 3, KvwU UvKv Ges kªyxweb vwmz F Yi nvi 2013 m bi kzvsk n Z nªvm c q 2014 m b `uvwo q Q kzvsk U) FY Av`vq Kvh µg 2014 köyxweb vwmz F Yi cwigvy n«vmki Yi j eq ii ïiæ ZB j gvîv wba viy c~e K Zv AR b cöavb Kvh vjq I gvv ch v q Kg cwikíbv cöyqb I Z`vbyhvqx Kvh µg MÖnY Kiv nq FY Av`vq e w i j b f ^i 2014 gvm K köyxk Z FY Av`vq gvm wn m e NvlYv K i wbqwgz Kvh µ gi cvkvcvwk DaŸ Zb wbe vnx I wbev nxe `i mgš^ q PŠÏwU wug MVb K i we kl Kvh µg cwipvjbv Kiv nq b f ^i I ww m ^i gv m Zuviv gvv ch v q Mgb K i AÂj I kvlv mg~ ni köyxk Z FY Av`v q wb ` kbv cö`vb I Kvh Ki e e v MÖnY K ib G QvovI, Ae jvcbk Z FY Av`v qi j emikvix cuvpwu cöwzôvb WU Kv jkkb G R U wn m e wb qvwrz i q Q Dc iv³ e e vw` MÖn Yi d j Ljvcx FY Av`v q eq ii kl ˆÎgvwm K D jø L hvm AMÖMwZ mvwaz nq 2013 I 2014 mv ji FY Av`v qi Zzjbvg~jK wpî e vs Ki gvu FY I AMÖx gi (Kg Pvwi FY mn) cwigvy Zvwi L wqj 23, KvwU UvKv Gi wecix Z köyxk Z F Yi cwigvy wqj 3, KvwU UvKv hv gvu FY I AMÖx gi kzvsk 2014 m b evwl K Av`vq j gvîv 2, KvwUi wecix Z 1, KvwU UvKv kªyxweb vwmz FY Av`vq nq hv j gvîvi kzvsk 140

141 Comparative picture of recovery of classified and overdue loans in 2013 & 2014 are as follows: 2013 Ges 2014 m bi köyxweb vwmz I gqv `vëxy FY Av`v qi Zzjbvg~jK wpî wb œiƒc: Category Cash Recovery Regularization Write-off Total Recovery Cash recovery Regularization Write-off Total Recovery Taka in crore Increase/ Decrease Classified , , , (1,419.33) Overdue (565.21) Total 1, , , , (1,981.54) Rescheduling, renewal and interest waiver are included in regularization. Future Plan on Loan Recovery To recover default loans, effective measures taken in the previous year will be in force. Proper steps on case to case basis will be taken in terms of recovering big default loans. Round the year monitoring, follow-up and supervision will be stepped up in larger scale. Initiatives targeting the grassroots level will be increased to prop up the pace of loan recovery. m) Help Desk Agrani Bank Limited provides all time help desk service to its onlined branches. In addition to that, help desk is prevaling in every branches. Any problem of the customer can be primarily resolved by the help desk. n) Branch Expansion The total number of Bank branches stands at 921 at December which was 899 in It has been planned to open more branches in all upazillas as well as all FY Av`v q fwel Z cwikíbv Ljvcx FY Av`v qi j wemz eq ii Kvh Kwi c` cmg~n Ae vnz ivlv n e e nr Ljvcx FY mg~n Av`v qi Î Km Uz Km wfwë Z h_vh_ e e v MÖnY Kiv n e eqie vcx gwbuwis, d jvavc I mycviwfkb AviI e w Kiv n e gvv ch v q hvmv hvm e w i gva g FY Av`v q MwZ mâv ii j c` c MÖnY Kiv n e W) ní W AMÖYx e vsk wjwg UW-Gi cöavb Kvh vj q vwcz mve ÿwbk ní W i gva g AbjvBbf ³ kvlv jv K mev cö`vb K i _v K GQvov, e vs Ki cöwzwu kvlvq GKwU ní W i q Q MÖvnK `i h Kvb ai Yi mgm vi cöv_wgk mgvavb ní W i gva g cö`vb Kiv nq X) kvlv m cömviy ww m ^i 2014 k l e vs Ki kvlv msl v `uvovq 921wU hv 2013 m b wqj 899wU AvMvgx w` b ` ki mkj Dc Rjvmn iæz c~y me evwywr K GjvKvq e vs Ki kvlv Lvjvi cwikíbv Dr. Syed Abdul Hamid, Managing Director & CEO is inaugurating newly opened Rayerbag branch in Dhaka Annual Report 2014 t 141

142 commercially important places of the country in the coming years so that the Bank can reach its service to the wider group of clients all over the country. Financial Performance a) Total Operating Income The Bank s total operating income stood at Tk. 1, crore in b) Total Operating Expenditure The Bank s total operating expenditure stood at Tk crore in 2014 as against Tk crore in 2013 which indicates an increase of Tk crore (i.e percent higher) over the last year. This is mainly due to the increase of staff salary in line with the government policy and new recruitment of officers. c) Net Interest Income The Bank s net interest income is Tk crore in Interest earned on loan is the principal component of interest income. However, interest cost of deposits was the main component of interest expenses. d) Operating Profit During 2014, the Bank s total operating profit before amortization, provision and tax stood at Tk 1, crore. e) Appropriation of Profit During 2014, Bank earned Tk crore before provision and tax which has been appropriated in the following manner. Taka in crore Particulars Profit/(Loss) before provision & tax Provision for loans and advances Other provision (Including incentive bonus) Total provision Net profit/(loss) before tax Provision for tax Current tax Deferred tax (40.73) (215.60) Total provision for tax (28.13) (215.60) Net profit/(loss) after tax Add: Retained surplus from the previous year (224.93) (1,454.35) Available for appropration (26.31) (549.45) Appropriation of profit Statutory reserve Bonus share issue - - Previous year adjustment Retained surplus (11.74) (224.93) i q Q hv Z mvaviy gvbyl K myweav `qv hvq Ges MÖvnK `i N i N i e vswks mev cuš Q `qv hvq Avw_ K djvdj K) gvu Acv iwus Avq 2014 mv j e vs Ki Acv iwus Avq wqj 1, KvwU UvKv L) gvu Acv iwus e q 2013 mv ji KvwU UvKv gvu Acv iwus e qi j 2014 mv j e vs Ki Acv iwus e qi cwigvy wqj KvwU UvKv G ÿ Î cöe w KvwU UvKv GB e q e w i KviY g~jz mikvwi KvVv gvi mv _ Zvj wgwj q ezb fvzv e w, Ges bzzb Kg KZ v wb qvm M) bxu my` Avq 2014 mv j e vs Ki bxu my` Av qi cwigvy wqj KvwU UvKv my` Av qi eo AskB FY n Z cövß my` my` e qi eo AskB n jv Avgvb Zi Dci cö`ë my` N) cwipvjb gybvdv 2014 mv j e vs Ki cwipvjb gybvdvi (G vgiuvb Rkb, mwâwz Ges Ki c~e ) cwigvy wqj 1, KvwU UvKv O) gybvdvi e Ub 2014 mv j e vsk Ki I mwâwz avh c~e gybvdv AR b K i KvwU UvKv hvi e Ub Ae v wb œiƒc: KvwU UvKvq weeiy Ki I mwâwz avh c~e gybvdv F Yi Rb mwâwz Ab vb mwâwz ( evbvm mn) gvu mwâwz Ki c~e ezx bxu gybvdv K ii Rb mwâwz PjwZ Ki wejw ^Z Ki (40.73) (215.60) K ii Rb gvu mwâwz (28.13) (215.60) Ki ciezx bxu gybvdv hvm: c~e ezx eq ii iw Z gybvdv (224.93) (1,454.35) e Ub hvm gybvdv (26.31) (549.45) gybvdv e Ub mswewae Znwej evbvm kqvi Bmy - - c~e ezx eq ii mgš^q DØ Ë gybvdv (11.74) (224.93) 142

143 f) Capital Adequacy Ratio As per provisions of Section 13(2) of the Bank Companies Act 1991 and BRPD circulars 1, 10, 5 and 11 dated 8 January 1996, 24 November 2002, 14 May 2007 and 14 August 2008 respectively issued by Bangladesh Bank, adequate capital needs to be maintained by all commercial banks to operate the banking activities smoothly. The Bank maintained core capital of Tk. 1, crore against requirement of Tk. 1, crore 6.13 percent of RWA of Tk. 25, crore against requirement of 5 percent RWA) and total capital (Tier-1+Tier-2+Tier-3) of Tk. 2, crore against requirement of Tk. 2, crore (10.44 percent of RWA of Tk. 25, crore against requirement 10 percent of RWA or Tk. 400 crore, whichever is higher). Thus, there was a total capital surplus of Tk crore with a core capital of Tk. 1, crore. P) g~jab chv ßZv AbycvZ e vsk Kv úvwb AvBb 1991 mv ji aviv 13(2) Ges evsjv `k e vs Ki weaviwcww mvkz jvi (bs 1, 10, 5 I 11; ZvwiL h_vµ g 8 Rvbyqvwi 1996, 24 b f ^i 2002, 14 g 2007 Ges 14 AvMó 2008) Abyhvqx mkj evwywr K e vsk K chv ß g~jab AbycvZ i v Ki Z nq e vs Ki msiw Ze Kvi g~ja bi cwigvy 1, KvwU UvKv hvi wecix Z e vsk msi Y K i Q 1, KvwU UvKv wi I q UW A v m Ui 5 kzvs ki j 25, KvwU UvKv wi I q UW G v m Ui 6.13 kzvsk i q Q gvu msiw Ze g~jab ( Kvi g~jab + mvwcø g Uvwi g~jab + AwZwi³ mvwcø g Uvwi g~jab) 2, KvwU UvKvi wecix Z msiw Z g~ja bi cwigvy 2, KvwU UvKv wewa gvzv ek 400 KvwU A_ev wi I q UW A v m Ui 10 kzvsk Gi g a hwu ewk Zvnvi mgcwigvy g~jab msi Yi wb ` kbv i q Q Gi wecix Z e vs Ki msiw Z g~ja bi cwigvy wi I q UW A v mu 25, KvwU UvKvi kzvsk Z`vbyhvqx g~jab surplus cwigvy KvwU UvKv Ges Ô Kvi K vwcuvjõ Gi cwigvy 1, KvwU UvKv g) Automation and Modernization Development in ICT Sector Information and Communication Technology (ICT) has its direct impact on productivity and competitiveness in both domestic and international markets. We are proud that Agrani Bank was the first among the commercial banks in this country to introduce computer-based technology. It started its journey from 1968, using IBM Main Frame computer. Since then amidst increasingly fierce competition, the efficiency gained and the speed of IT have offered us the opportunity to open up new sources of advanced, innovative products and improved customer services. Sufficient allocation is made by the Bank for hardware and software to ensure complete implementation of our ambitious plans for the increased use of ICT and Management Information Systems (MIS). Overall automation Agrani Bank Limited started using computer technology for automation of its various banking operations since preliberation. Many important jobs of the bank are currently automated. The Information Technology and MIS Division of the Bank responsible for managing automation of banking operations, are well equipped with IBM Mid Range computers, very High End Servers and latest microcomputers and staffed with trained and experienced personnel. The Bank uses its in-house software for processing most of the jobs performed in IT and MIS Division. The major jobs handled in ITand MIS Division are: Q) A Uv gkb Ges AvaywbKvqb Z_ Ges hvmv hvm cöhyw³ Lv Z Dbœqb Drcv`bgyLx Ges cöwz hvwmzvg~jk `wkq Ges AvšÍR vwzk Dfq evrv ii Dci Z_ Ges hvmv hvm cöhyw³i (AvBwmwU) cöz cöfve i q Q Avgiv Mwe Z h mb 1968 mvj _ K IBM Main Frame Kw úduvi e env ii gva g AMÖYx e vsk evsjv ` ki evwywr K e vsk jvi g a cö_g Kw úduvi wbf i cöhyw³ e envi ïiæ K i µgea gvb Zxeª cöwz hvwmzvi G hy M Z_ cöhyw³i AwR Z ` Zv Ges MwZkxjZvi Av jv K DbœZZi I bzzb cy Ges UKmB MÖvnK mevi bzzb Øvi D š vwpz n q Q AvBwmwU I g v br g U Bbdi gkb wm gi ` cö qvmk í nvw Iq vi I mduiq v ii cwikíbv gvwdk c~yv ½ cö qv Mi j e vsk KZ K chv ß A_ eivï `qv n q Q c~yv ½ A Uv gkb ^vaxbzv c~e mgq _ K AMÖYx e vsk wewfbœ e vswks Kvh µ gi A Uv gk bi Rb Kw úduvi cöhyw³i e envi ïiæ K i Q m úªwz e vs Ki eûwea iæz c~y KvR A Uv gk bi AvIZvq Avbv n q Q e vs Ki Z_ cöhyw³ wefvmwu A Uv gkb e e vcbv Ges cwipvjb Kv R wb qvwrz G wefvmwu cöwkw Z Ges ` Kgx, AZ vaywbk gvb µv Kw úduvi, D P gzv m úbœ mvfv i Ges IBM Mid Range Kw úduvi Øviv mymw¾z AvBwU wefv Mi AwaKvsk KvR cö ZKi Yi Î AMÖYx e vsk Zvi wbr ^ mduiq vi e envi K i _v K G wefvmwu h mkj Kvhv ejx cwipvjbv K i _v K m jv n Q: Annual Report 2014 t 143

144 a) Inter-branch Transaction Reconciliation. b) Foreign Bank Accounts Reconciliation (Nostro Accounts). c) Consolidation of Statement of Affairs/ Income & Expenditure Statements. d) Personnel System. e) Pay-roll of Head Office Employees etc. f) Inventory Management. The Bank has a good team of highly skilled manpower both in technical and business areas to handle IT operation deployed in Head Office, Zonal Offices and in Branches.The Bank has recruited a large number of manpower exclusively for ICT operation. Those resources are being deployed in Head Office IT and MIS Division and in Zonal Offices from where they can monitor and control the various ICT operations at the grass root level. The relevant employees are provided with adequate training to cater to all kinds of needs related to ICT. A majority of manpower of the Bank has got IT literacy and training of basic and higher training on IT courses are offered throughout the year. The Bank has formulated its ICT policy as per Bangladesh Bank Guidelines in which proper directives have been provided for each and every operation of the Bank related to ICT. Branch Computerization Agrani Bank Limited has grown significantly over the years in branch automation. Till date 921 branches out of its total 921 branches are computerized by using LAN based Branch Banking Software. These software have been supplied by various renowned software vendors of the country. The major functionalities of the branch banking software are: a) General Banking: Deposit, Inland remittance, GL/PL. b) Credit: All kinds of commercial loans and staff loans. Most of the banking activities can be carried out using this software. Bank provides continuous training for the users of these software. Now, all the branches are providing computer services with internet connectivity along with Online Foreign Remittance Payment Software and Online payment system of Western Union, MoneyGram etc. capable of making instant payment of foreign remittance to the beneficiaries and preparing daily Statement of Affairs and Profit and Loss Statement besides making other day-to-day correspondences. Online Banking IT-based banking has a major role to play in rendering improved services to the valued customers and stakeholders in today s competitive banking environment. The Bank has taken various measures for automation of its functions and services. One of the K) AvšÍt kvlv jb `b mgš^qkiy L) ˆe `wkk e vs Ki mv _ wnmve mgš^qkiy (Nostro Account) M) Avq-e q cöwz e`b cö ZKiY N) Kg Pvix Z_ weeiyx cö ZKiY O) cöavb Kvhv j qi Kg KZv /Kg Pvix `i ezb cö ZKiY P) Bb f Uwi e e vcbv cöavb Kvhv jq, AvÂwjK Kvhv jq Ges kvlv jv Z KvwiMwi Kvhv ejx cwipvjbvi j AMÖYx e vs Ki my` wug wbijm KvR K i P j Q hvmv hvm I Z_ cöhyw³i Kvhv ejx myôzfv e cwipvjbvi Rb e vsk chv ß Rbej wb qvm K i Q cöavb Kvhv j qi AvBwU wefv M Ges AvÂwjK Kvhv j q G Rbej wb qvm Kiv n q Q hv Z Zviv Z Yg~j chv qi AvBwmwU Kvh µg jv Z`viwK I wbqš Y Ki Z cv i mswkøó AvBwU Kg KZ vmy K h _vchy³ cöwk Y cö`vb Kiv n q _v K hv Z Zviv AvBwmwU mswkøó mkj cö qvrb guv Z cv i e vs Ki AwaKvsk Rbkw³ AvBwU msµvší gšwjk Ávb I wewfbœ Kv m i Dci cöwk YcÖvß AvBwUi Dci e vs K mviv eqib cöv_wgk I D PZi cöwk Y cwipvwjz n Q evsjv `k e vs Ki wb ` kbv Abyhvqx AMÖYx e vsk Zvi AvBwmwU cwjwm `uvo Kwi q Q hlv b AvBwmwU m úwk Z mywbw` ó wb ` kbv i q Q kvlv Kw úduvivqb mv úªwzk mg q kvlv chv qi Kv R Z_ cöhyw³i e env i AMÖYx e vsk A bk GwM q Q A` vewa LAN wbf i eªvâ e vswks mduiq vi e env ii gva g 921 wu kvlvi g a 921wU kvlv K Kw úduvivbrw Kiv n q Q Gme mduiq vi jv ` ki cöwm cöwzôvb KZ K mieivnk Z eªvâ e vswks mduiq v ii cöavb KvR jv n Q: K) mvaviy e vswks: AvgvbZ, Af šíixy iwgu vý, wrgj/wcgj L) µwwu: mg Í evwywr K FY I Kg Pvwi FY G mduiq v ii gva g AwaKvsk e vswks Kvhv ewj m úbœ Kiv hvq e vs K G mduiq vi e envikvix `i K wbqwgz cöwk Y cö`vb Kiv n Q ez gv b me jv kvlv ZB Western Union, MoneyGram, AbjvBb d ib iwgu vý c g U mduiq vi Ges B Uvi bu ms hvmmn chv ß Kw úduvi mev cö`vb Kiv n Q hvi gva g `ªæZ d ib iwgu vý cö`vb, cöwzw` bi U g U Ae G v dqvm cö ZKiY Ges jvf- wzi weeiy QvovI Ab vb ˆ`bw `b KvR m úv`b Kiv n Q AbjvBb e vswks AvR Ki G cöwz hvwmzvg~jk e vswks evrv i m vwbz MÖvnK Ges K nvìvi `i K DbœZ mev cö`v bi Î cöhyw³ wbf i e vswks iæz c~y fzwgkv cvjb Ki Q e vs Ki wewfbœ mev I Kvhv ejx A Uv gk bi AvIZvq Avbvi j wewfbœ 144

145 major steps is installation of fully integrated online core Banking Solution (T24 by Temenos). It began in 2010 with two pilot branches and now it has progressed further and as of December 2014, 309 major branches of the throughout the country are operating using this software. It should be mentioned that T24 software is rated as number one core banking software all over the world. For this purpose, data center equipped with most modern hardware, database, connectivity and all other facilities was established in Head office. Besides, a Disaster Recovery Site (DRS) was rented in Mohakhali where a true replica of data center is established. The hardware related to data center and DRS has been set up with a capacity to handle all the online branches of the Bank. Again, to handle such a big customer base, Oracle database was chosen. A Wide Area Network (WAN) covering 309 branches was setup to facilitate online services. Two redundant network lines were setup for all these branches. The Core Banking Software (CBS) has four major functional areas. These are: a) Retail Module: All the functionalities of general banking like SB, CD, FDR, SND, APS, ABS, DD, PO/ PS etc. are covered under this module. b) Credit Module: All kinds of credit operation like CC, OD, consumer loan, staff loan are handled using this module. c) Trade Finance: All activities relating to foreign exchange business can be handled under this module. d) Treasury Module: All treasury functions i.e. security, money market, and investment are covered under this module. Also, centralized Head Office GL is incorporated with Treasury Module. All the modules of T24 have been customized as per existing business processes and rules of the bank considering the guidelines of Bangladesh bank. For all kinds of automation activities, the Bank has deployed human resources in the major areas from the existing manpower. Primarily, two teams i.e. business team and technical team are working. The business team was formed choosing experts from each and every functional area i.e. general banking, credit, trade finance and treasury. The technical team comprised of the experts of hardware, database, operating system, network, online banking software. For capacity building, they were given adequate training to make them capable of handling all the activities to run a core banking software smoothly. The Bank has also established a Help Desk in IT & MIS Division to render c` c MÖnY Kiv n q Q G c` c jvi g a iæz c~y c` cwu n Q m ú~y mgwš^zfv e AbjvBb Kvi e vswks mwjdkb (Temenos KZ K T24) Pvjy Kiv 2010 mv j `ywu cvbju kvlv wb q ïiæ n q Zv ez gv b AviI DbœZZi chv q cšu Q Q Ges 2014 mv ji ww m ^i ch ší `ke vcx 309wU iæz c~y kvlvq G mduiq vi e eüz n Q D jøl h, T24 mduiq viwu wek e vcx GK b ^i Kvi e vswks mduiq vi wn m e mgv` Z G D Ï k cöavb Kvhv j q cö qvrbxq nvw Iq vi, WvUv er Kv bw±wfwu I Ab vb myweavmn GKwU AZ vaywbk WvUv m Uvi vcb Kiv n q Q ZvQvov gnvlvjx Z GKwU wwrv vi wikfvwi mvbu (DRS) fvov bqv n q Q hlv b e vs Ki WvUv m Uv ii GKUv ûeû cöwziƒc cöwzôv K i ivlv Av Q AbjvBbf~³ kvlv jv wbqš Y Kivi j (DRS) Ges WvUv m Uv ii Rb e vs K Dchy³ gv bi nvw Iq vi vcb Kiv n q Q GQvov e nr cwim i MÖvnK mev cö`v bi j Oracle WvUv er Pvjy Kiv n q Q 309wU kvlvq Wide Area Network (WAN) vcb K i AbjvBb e vswks mev cö`vb Kiv n Q G mkj kvlvi cöwzwu Z `ywu buiqv K jvbb vcb Kiv n q Q Kvi e vswks mduiq v ii (CBS) PviwU iæz c~y cöv qvwmk w`k i q Q G jv n jv: K) wi UBj gwwdj: mvaviy e vswks Gi mg Í Kvhv ejx hgb- SB, CD, FDR, SND, APS, ABS, DD, PO/PS BZ vw` G gwwd ji AvIZvf~³ L) µwwu gwwdj: G gwwdjwu e envi K i mkj ai Yi µwwu msµvší KvR hgb- wmwm, IwW, fvm cy FY, Kg Pvix FY BZ vw` cwipvjbv Kiv nq M) UªW wdb vý: G gwwd ji AvIZvq me ai Yi ˆe `wkk evwyr msµvší jb ` bi KvR Kiv hvq N) UªRvwi gwwdj: UªRvwi msµvší mkj Kvhv ejx hgbwmwkdwiwu, gvwb gv K U Ges Bb f g U G gwwd ji AšÍf ~³ ZvQvov cöavb Kvhv j qi wrgj G gwwd ji mv _ mshy³ evsjv `k e vs Ki w`k-wb ` kbvi wbwi L Ges AMÖYx e vs Ki we` gvb bxwzgvjv Abyhvqx T24 Gi mg Í gwwdj Kv gvbrw Kiv n q Q A Uv gk bi wewfbœ Kvh µg ev Íevq bi j e vsk wewfbœ Î Zvi we` gvb ` Rbkw³ _ K cö qvrbxq jvkej wb qvm K i Q cöv_wgkfv e wer bm wug Ges UKwbK vj wug G ikg `yõwu wug G Z KvR Ki Q mvaviy e vswks, AwMÖg, ˆe `wkk evwyr, wdb vý I UªRvwii Kv R AwfÁ Rbkw³ wb q G wer bm wugwu MwVZ UKwbK vj wugwu MwVZ n q Q nvw Iq vi, WvUv er, Acv iwus wm g, buiqvk I AbjvBb e vswks mduiq v ii ` jvke ji mgš^ q ` Zv e w i j Dfq wug K Dchy³ cöwk Y cö`vb Kiv n q Q hb Zviv Kvi e vswks mduiq vi wbfz jfv e cwipvjbv Ki Z m g nq AbjvBbf~³ kvlv jv Z cöv qvwmk I KvwiMwi mnvqzv Annual Report 2014 t 145

146 the operational and technical support to all the online based branches. Gradually all the branches of the bank will be brought under this system. Introduction of T24 software will ensure services like internet banking, ATM banking, mobile banking etc. to the customers. BACH & BEFTN As part of the plan of Bangladesh Bank for automation of clearing payment system of the country, Bangladesh Automated Clearing House (BACH) was introduced in the bank.the two components of BACH - Bangladesh Automated Cheque Processing System (BACPS) & Bangladesh Electronic Fund Transfer Network (BEFTN) are active in the bank. A total of 312 branches of the bank in 70 clearing areas of the country have been brought under BACPS successfully. For this purpose, hardware, MICR check scanner and network connectivity have been established in each concerned location. For BACH operation, a sophisticated centralized software has been customized and installed which has facilitated the smooth operation of the system throughout the country. The other component BEFTN has been introduced in all branches of the Bank. As per Bangladesh Bank instruction, only credit operation has been allowed in it. The debit operation will begin very soon. With the introduction of automated clearing system, customer service has greatly improved. SWIFT Agrani Bank Limited provides SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) facility in its 35 branches to offer services relating to foreign exchange/foreign trade transactions (both import and export) and remittance. e-gp The government of Bangladesh has introduced e-gp (Electronic Government Procurement) program under CPTU (Central Procurement Technical Unit) of Planning ministry. The contractors of 4 organizations i.e. Roads & Highways, LGED, BWDB and REB can participate in e-tendering by depositing their registration fee, renewal fee, tender document fee, bank guarantee etc. from designated 86 branches of the bank all over Bangladesh. Proper training on e-gp has been provided to a large number of employees of the bank. The bank has voluntarily participated in e-gp program to meet its commitment to serve the nation. Website Agrani Bank Limited has an informative website containing description of its various products, services, annual accounts, citizen s charter and other up-todate information about the Bank. The website www. cö`v bi D Ï k AvBwU I GgAvBGm wefv M GKwU ní W Lvjv n q Q µgvmzfv e e vs Ki mkj kvlv K AbjvBb e e vi AvIZvq Avbv n e T24 mduiq v ii gva g MÖvnK `i K B Uvi bu e vswks, GwUGg e vswks, gvevbj e vswks BZ vw` mev cö`vb Kiv n e wegwmgbp Ges webgdwugb ` ki wbkvk cwi kva c wzi A Uv gk bi Rb evsjv `k e vs Ki cwikíbvi Ask wn m e G e vs K evsjv `k A Uv g UW wk qvwis nvdr (wegwmgbp) Pvjy Kiv n q Q wegwmgbp Gi `yõwu c wz h_v evsjv `k A Uv g UW PK cö mwms wm g (wegwmwcgm) Ges evsjv `k B jkuªwbk dvû UªvÝdvi buiqvk (webgdwugb) Pvjy i q Q ` ki 70wU wk qvwis Gwiqvq gvu 312wU kvlv K wegwmwcgm Gi AvIZvq mdjzvi mv _ Avbv n q Q G c wz ev Íevq bi j mswkøó cöwzwu kvlvq nvw Iq vi, GgAvBwmAvi PK vbvi Ges buiqvk ms hvm vwcz n q Q wegwmgbp Gi Kvh cwipvjbvi j GKwU wblyuz m UªvjvBRW& mduiq vi Pvjy I Kv gvbrw& Kiv n q Q hv Z K i `ke vcx G c wzi myôz cö qvm m e nq webgdwugb c wzwu e vs Ki cöwzwu kvlv Z cöez b Kiv n q Q evsjv `k e vs Ki wb ` kbv Abyhvqx GLv b ïay µwwu Acv ikbwu Aby gvw`z n q Q kxnªb WweU Acv ikbwu Pvjy Kiv n e A Uv g UW wk qvwis wm g Pvjyi gva g MÖvnK mevq e vck DbœwZ mvwaz n q Q mybdu& Avg`vwbKviK, ißvwbkvik I iwgu vý cöik `i ` mev cö`v bi D Ï k AMÖYx e vsk wjwg UW ˆe `wkk gy`ªv wewbgq I ˆe `wkk evwy R i Rb 35wU kvlvq mybdu& ( mvmvbwu di Iqvì IqvBW B Uvi-e vsk wdbvwýqvj UwjKwgDwb Kkb) cöez b Kiv n q Q B-wRwc evsjv `k mikv ii cwikíbv gš Yvj qi wmwcwubd ( m Uªvj cöwkdi g U UKwbK vj BDwbU) Gi Aax b B-wRwc (B j±«wbk Mfb g U cöwkdi g U) cövmövg Pvjy K i Q Gi d j `ke vcx AMÖYx e vs Ki 86wU wbav wiz kvlvq iwr ªkb wd, bevqb wd, UÛvi WKz g U wd, e vsk M vivw U BZ vw` cö`v bi gva g mok I Rbc_ Awa`ßi, GjwRBwW, wewweødwwwe Ges AviBwe G 4wU ms vi wvkv`vimy B- UÛvwis G Ask wb Z cvi Qb e vs K Kg iz wecyj msl K Kg Pvix K B-wRwci Dci gvbm úbœ cöwk Y cö`vb Kiv n q Q RvwZ K mev cö`v bi cöwzköæwz wb q e vsk ^ Qvq B-wRwc cövmöv g AskMÖnY K i Q I qemvbu AMÖYx e vsk wjwg U Wi GKwU Z_ cö`vbg~jk I qemvbu i q Q hlvb _ K MÖvnKMY e vsk m ú K wewfbœ Z_ hgb: e vs Ki wewfbœ cöwv±, mevmg~n, evrmwik wnmve, wmwu Rb PvUv i Ges nvjbvmv` Z_ cv eb 146

147 agranibank.org serves as a primary source of information of the bank. Current news on recruitment, tender etc. of the bank can also be found on this website. ATM In order to be up-to-date with the fast advancing information technology, Agrani Bank Limited started ATM (Automated Teller Machine) service in 2002 for the clients which is known as E-Cash Debit Card. With this, ATM Card holders are enjoying the benefit of 24 hours cash withdrawal by paying a nominal annual service charge. Currently, ABL has been providing this service using 1342 shared ATM booths throughout the country in collaboration with AB Bank Ltd. To run ATM service by ABL s own source & management, initiatives have been taken. After scrutinizing the viabilities, in the first phase, ABL plans to start 100 ATM booths in different branches & prominent places of which 41 booths will be in Dhaka city and 12 booths will be in Chittagong. Besides, ABL plans to enrich ATM booth service consisting Visa Card, Master Card and Credit Card facilities. Introduction of Mobile banking ABL is planning to offer some transaction facilities through mobile set. As most of the population of Bangladesh is un-banked, our bank is going to implement a system to launch mobile banking soon to bring non-bank population into the banking channel. With this facility any person having a mobile will be able to use his number as a bank account. The facilities of mobile banking will be: a) Cash Deposit. b) Cash Withdrawal. c) Fund Transfer to another Mobile Account. d) Utility Bill Payment. e) Receive Remittance from Home And Abroad. f) Salary Payment. g) Disbursement of Government Allowances. h) Merchant Payment. i) Balance Enquiry. Agrani bank Limited is dedicated to the nation to provide technology based modern banking services to the customers and relentlessly tries to contribute to the process of achieving our national goal as enshrined in Vision G I qemvbuwu e vs Ki cöv_wgk Z _ i Drm wnmv e KvR Ki Q e vs Ki wb qvm, UÛvi BZ vw`i mv úªwzk LeivLeiI G I qemvb U cviqv hv Q GwUGg AMÖYx e vsk wjwg UW `ªyZ AMÖmigvb Z_ cöhyw³i mv _ wb R K nvjbvmv` Ki Yi j 2002 mv j MÖvnK `i R b ATM (Automated Teller Machine) mvwf m Pvjy K i, hv E-Cash WweU KvW bv g cwiwpz Gi gva g evrmwik bvggvî mvwf m Pv R i wewbg q GwUGg KvW nvìvimy w`bivz 24 N Uv bm` A_ D Ëvj bi myweav fvm Ki Qb ez gv b AMÖYx e vsk wjwg UW Gwe e vsk wjwg UW-Gi mv _ hš_fv e mviv ` k 1342wU GwUGg ey _i gva g GB mev w` q Avm Q m cöwz e vs Ki m ú~y wbr ^ e e vcbvq I cwipvjbvq GwUGg mvwf m cöez bi j c` c MÖnY Kiv n q Q GB cwikíbv ev Íevq bi cö_g c` c wn m e m ve Zv hvpvbevqvb KiZt GKwU c~y v½ Kg cwikíbv nv Z bqv n q Q Gi cö_g chv q XvKv gnvbm ii 41wU, PÆMÖv gi 12wU kvlvmn mviv ` k wewfbœ kvlvq Ges iæz c~y v b cöv_wgkfv e gvu 100wU GwUGg ey_ mvwf m Pvjy Kiv n e cvkcvwk VISA Card, Master Card Ges Credit Card mn GwUGg ey_ mvwf m mg Ki Yi cwikíbvi i q Q gvevbj e vwks Gi cöez b gvevbj m Ui gva g wkqy jb `b myweav cö`v bi welqwu e vs Ki cwikíbvq i q Q evsjv ` ki AwaKvsk gvbyl e vswks Gi mv _ RwoZ bq GB bb-e vswks Rb Mvôx K e vswks Kvh µ gi AvIZvq Avbvi j Avgv `i e vsk Lye kxnªb gvevbj e vswks c wz Pvjy Ki Z hv Q G myweavi gva g gvevbj b ^i _vkv h Kvb e w³ gvevbj b ^iwu e vsk GKvD U wnmv e e envi Ki Z cvi e gvevbj e vswks-gi myweav jv wb œiæc: K) bm` Rgv L) bm` D Ëvjb M) Ab gvevbj GKvD U Znwej vbvšíi N) BDwUwjwU wej cwi kva O) `k-we ` ki iwgu vý MÖnY P) ezb cwi kva Q) mikvwi fvzvw` weziy R) gv P U jb `b S) e v jý AbymÜvb MÖvnK `i cöhyw³ wbf i AvaywbK e vswks mvwf m cö`v bi j AMÖYx e vsk wjwg UW RvwZi mevq cöwzkªywze Avgv `i RvZxq j Ôwfkb 2021Õ AR b Ae`vb ivl Z AMÖYx e vs Ki AbeiZ cö Póv Ae vnz i q Q Annual Report 2014 t 147

148 h) Introduction of Agent Banking Agrani Bank Limited in association with DOER, has planned to extend its financial services to unbanked and under banked areas of Bangladesh through agents or CSPs (Customer Service Provider) in a bid to achieve Financial Inclusion goal of the nation. The project would run under the Agent Banking Draft Guideline that has recently been formulated by Bangladesh Bank. Agent Banking model would help to achieve the following: 1. Lowering transaction costs both for the customers and bank. 2. Help cover a large geographical area with minimum cost. 3. Cutting administrative overhead off. 4. Creating financial awareness. The project would be implemented in phases. In the first phase Agrani in collaboration with DOER has planned to run the pilot projects in two areas under following two branches of ABL: i. Pangsha branch: Habashpur Bazar of Pangsha upazila under the district of Rajbari. ii. Shaistagonj Branch: Noapara Bazar of Shaistagonj upazila under the district of Habigonj. Distribution of SEQAEP Stipend To inspire the poor and meritorious students from class 6 to Class 10, Secondary Education Quality and Access Enchantment Project (SEQAEP) jointly financed by ministry of education, Government of People s Republic of Bangladesh and world Bank is being conducted since Ministry of education, World Bank and SEQAEP authority supervise this project. Besides distributing stipend to the students, different kinds of incentive awards and financing the development of concerned schools are provided through SEQAEP. Through this project, the Directorate for Secondary & Higher Secondary Education has been giving away stipend to the students enlisted with SEQAEP through 250 branches of Agrani Bank Limited across the country since The main objective of this project is to ensure that students at Secondary level do not drop out of education. At present, the number of students receiving the benefit under this project is ten lac. By receiving stipend money through bank, the students are getting introduced and used to banking system which brings momentum to the school banking R) G R U e vswks cöez b AMÖYx e vsk wjwg UW DOER Gi mn hvwmzvq e vswks ewnf~ Z A_ev Aí gvîvq e vswks Ki Qb G ikg RbMY K G R U ev Kv gvi mvwf m cövfvbwvi (CSP) Gi gva g e vswks mev cö`v bi GKwU Kvh µg MÖnY K i Q hv ` ki Avw_ K mevf~w³ Kg m~wp ev Íevq b mnvqk n e cökíwu evsjv `k e vsk KZ K m cöwz cöyxz ÔG R U e vswks WªvdU MvBW jvbbõ Abymv i cwipvwjz n e G R U e vswks g WjwU wb œv³ KvR jv Ki Z mnvqzv Ki e: 1. MÖvnK Ges e vsk Df qi jb ` b LiP Kg e 2. GKwU e nr AÂj K b~ bzg Li P Avw_ K mevi AvIZvq Avbv m e n e 3. cökvmwbk e q n«vm cv e 4. Avw_ K m PZbZv ˆZix Z mnvqk n e cökíwu chv q wfwëk cwipvwjz n e cvbju cökíwu DOER Gi mn hvwmzvq AMÖYxi wb œv³ `yõwu kvlvi gva g ewy Z GjvKvq Kvh µg cwipvjbv Ki e: i.. cvskv kvlv: nvevkcyi evrvi, Dc Rjv- cvskv, RjvivRevwo ii. kv q ÍvMÄ kvlv: bvqvcvov evrvi, Dc Rjv- kv q ÍvMÄ, Rjv- nwemä SEQAEP Gi Dce wë weziy MYcÖRvZš x evsjv `k mikv ii wk v gš Yvjq Ges wek e vs Ki hš_ A_ vq b Secondary Education Quality and Access Enhancement Project (SEQAEP) bv g 6ô n Z 10g kªyx ch ší Mixe I gavex QvÎQvÎx `i K wk vq DrmvwnZ Kivi j ÿ GKwU cökí 1993 mb n Z cwipvwjz n Q wk v gš Yvjq, wek e vsk Ges SEQAEP KZ c GB cök íi Z`viwK K i _v K SEQAEP cökíwui gva g Dce wë QvovI QvÎQvÎx `i K wewfbœ cökvi DÏxcbv cyi vi cö`vb Kiv nq Ges mswkøó z ji Dbœq bi Rb A_ vqb Kiv nq cökíwui gva g gva wgk I D P wk v Awa`ßi 1993 mb n Z A` ewa mviv ` k AMÖYx e vs Ki 250wU kvlvi gva g SEQAEP-Gi ZvwjKvf~³ QvÎQvÎx `i K Dce wë weziy K i Avm Q GB cök íi g~j j n jv gva wgk Í ii QvÎQvÎxiv hb Avw_ K Kvi Y wk v½y _ K S i bv c o ez gv b GB cök íi AvIZvq gvu DcKvi fvmx QvÎ-QvÎxi msl v 10 jvl e vs Ki gva g Dce wëi UvKv MÖn Yi ga w` q z ji QvÎQvÎxiv e vswks e e vi mv _ cwiwpz I Af Í n q DV Q hv AMÖYx e vsk wjwg UW Gi zj e vswks Kvh µg K emevb 148

149 Handing over Signed Agreement betwen ABL & SECIP program of ABL. In this project World Bank s fund for, the stipend money is deposited through Bangladesh Bank to the SEQAEP account maintained with Principal Branch of ABL. To distribute the money directly to the beneficiaries, Principal Branch sends the money through IBCA to the concerned branches through respective Zonal offices. To extend the project up to 2017 is under process through which the number of schools & students and financing amount will be increasing gradually. Ki Q GB cök íi AvIZvq wek e vs Ki A_ vq b Ges evsjv `k e vs Ki gva g Dce wë fvmx QvÎ-QvÎx `i Rb AMÖYx e vs Ki cöavb kvlvq cwipvwjz SEQAEP-Gi wnmv e A_ Rgv nq cöavb kvlv D³ A_ AvBwewmG -Gi gva g mswkøó kvlvmgy n ^ ^ AvÂwjK Kvh vj qi mvnv h cöiy K i hv kvlv n Z mivmwi myweav fvmx `i g a weziy Kiv nq 2017 mvj ch ší cökíwui gqv` e w i cö Íve cöwµqvaxb i q Q hlv b cöwzeqi ch vqµ g z ji I QvÎ-QvÎx `i msl v Ges A_ vq bi cwigvy e w cv e Online CIB Reporting MIS Division of the Bank receives previous months CIB information sent from related branches via zonal offices in online within 10th of the month. MIS Division verifies the accuracy of the information and after consolidating the information sends to Bangladesh Bank in online within 20th of the month. Corporate branches directly send CIB information and inquiry forms to MIS Division. The number of CIB information received by ABL from Bangladesh Bank server and sent to related branches from January to December 2014 are almost 40,000. Credit Rating In 2014, the Bank appointed Credit Rating Information and Services Limited (CRISL), for credit rating of the Bank as per directives of Bangladesh Bank. The rating company assigned AAA to the Bank in the long run and ST-1 in the short term. This rating has been done in consideration of the guarantee of the Government AbjvBb wmavbwe wi cvwus e vs Ki wewfbœ kvlv _ K cöwiz c~e ezx gv mi wmavbwe Z_ AvÂwjK Kvh vj qi gva g cöwz gv mi 10 Zvwi Li g a GgAvBGm wwwfk b M nxz nq GB wefvm D³ Z _ i mwvkzv hvpvb K i cö qvr b Zv ms kvabc~e K GKxf~Z K i gv mi 20 Zvwi Li g a AbjvB b evsjv `k e vs K cöiy K i _v K K c v iu kvlv jv mivmwi cöavb Kvh vj qi Bbdi gkb UK bvjwr A vû GgAvBGm wwwfk b wmavbwe Z_ I Bb Kvqvwi dg cöiy K i _v K Rvbyqvwi n Z ww m ^i 2014 mg q evsjv `k e vs Ki mvf vi n Z GB wefvm KZ K AbjvB b cövq 40,000 c~y v½ wmavbwe cöwz e`b msmönc~e K mswkøó kvlvmg~ n `ªæZZvi mv _ cöiy Kiv n q Q µwwu iwus evsjv `k e vs Ki wb ` kbvbyhvqx e vsk 2014 mv j µwwu iwus Bbdi gkb G vû mvwf mm wjwg UW K (CRISL) iwus Kv R wbhy³ K i Zviv e vsk K `xn gqv ` ÔGGGÕ Ges ^í gqv ` GmwU-1 e vsk wnmv e g~j vwqz K i MYcÖRvZš x Annual Report 2014 t 149

150 of the People s Republic of Bangladesh being the highest risk-free entity. Financial Institutions rated in this category have the best quality, offer highest safety and have the highest credit quality. However, the Bank s entity rating (as stand alone commercial bank) has been improving over the years, as will be evident from below: evsjv `k mikv ii cö`ë M vivw U g~ j G iwus Kiv nq KviY mikvi n Q SzuwKgy³ GKwU më v G ai Yi g~j vwqz Avw_ K cöwzôvb n Q Y m ev Ëg, me P q wbivc` Ges Zv `i i q Q m ev P gvbm úbœ FY GQvov evwywr K e vsk wnmv ei cöwzwbqz e vs Ki iwus-gi gvb DbœZ n Q hv wb œ cwijw Z n Q: Date of Rating: August 31, 2014 Long Term Short Term Entity Rating 2013 as Government Guaranteed Bank Surveillance Rating 2013 (Stand Alone Basis) Surveillance Rating 2012 (Stand Alone Basis) Outlook Contribution to the National Exchequer The Bank pays income taxes regularly on its income. It also deducts income tax, value added tax and excise duty at source as per law from various payments and services and deposits the same to the national exchequer. ABL pays tax on behalf of its employees. Total payments to the national exchequer during 2014 and 2013 are shown below: AAA ST- 1 A- ST- 2 BBB ST- 3 Stable RvZxq ivr ^ Lv Z Ae`vb e vsk Zvi Av qi Ici wbqwgz AvqKi cwi kva K i _v K e vs Ki wewfbœ ai Yi cwi kva ev mvwf m cö`v bi mgq AvBbvbyhvqx AvqKi, g~j ms hvrb Ki Ges AveMvix ïé KZ b K i Zv mikvwi KvlvMv i Rgv Kiv nq e vsk Zvi Kg x `i c AvqKi cwi kva K i _v K 2014 Ges 2013 mv j RvZxq ivr ^ Lv Z Rgvi cwigvy wb œiƒc: Particulars Payment of tax on Bank s income Staff income tax paid by the bank Tax deducted at source and deposited Vat deducted source and deposited Excise duty deducted and deposited Total Contribution to the National Economy The Bank plays an important role in the development of rural economy. It has got 921 branches across the country. The Bank operates many branches in the remote areas to provide the banking services to the rural people, though operations of those branches are not financially viable to the Bank. It also plays an important role in reducing unemployment problem by way of participating in different employment generation activities. At the end of 2014, the total number of staff members stood at 13,414 Since its beginning, the Bank has been highly active in remittance operations to facilitate disbursement of remittances received from Bangladeshi wage earners working abroad. The remitted RvZxq A_ bxwz Z f wgkv MÖvgxY A_ bxwzi Dbœq b e vsk iæz c~y f wgkv cvjb Ki Q ` ki cöz ší AÂjmn mviv ` k e vs Ki 921wU kvlv Av Q A bk jv kvlv e vs Ki Rb A_ bwzkfv e AbyK~j bq ZviciI cöz ší A ji MÖvgxY gvbyl `i mev cö`v bi j kvlv jv cwipvwjz n Q ekvi mgm v wbim b e vsk iæz c~y f wgkv ivl Q 2014 mv ji k l e vs Ki gvbe m ú` wqj 13,414 Rb cöevwm evsjv `wk `i DcvR bk Z gy`ªv MÖnY Kivi Kv R ïiæ _ K e vsk ˆe `wkk gy`ªv Kvh µg Pvwj q Avm Q 24 N Uvi g a cöwiz ˆe `wkk gy`ªv ` ki 150

151 money can now be deposited to the beneficiaries account within maximum 24 hours. The introduction of on-line distribution of remittances has generated much enthusiasm among the expatriate Bangladeshi workers. Outlook for 2015 In spite of tremendous competitions and challenges, the Bank has made progress in almost all spheres of business. To meet the challenges and to stay competitive, it has upgraded the skills of its workforce and to introduce automation where possible, in its operation. It will continue to focus on achieving steady growth, by upgrading the quality of assets, augmenting interest and rendering quality service and operation. Moreover, it will constantly persuit the policies of recruitment of skilled manpower, good corporate governance practices, and sound risk management. We will make every effort to earn high operating profit, maintain minimum capital adequacy, bring classified loan at a minimum level and to do best in all sectors including deposit, credit, import, export, remittance, cost of fund etc. Moreover, we want to make utmost contribution to the society in which we operate. Preparation of Financial Statements The financial statements, prepared by the Bank in accordance with the Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and in the format prescribed by Bangladesh Bank vide BRPD Circular No. 14 dated 25 June 2003, give a true and fair view of the state of affairs as at December 31, The results of its operations and its cash flows for the year ended December 31, 2014 comply with the applicable sections of The Bank Companies Act 1991 and other applicable laws and regulations. The financial statements have been duly certified by the statutory auditors. Dividend Declaration The Board of Directors did not recommend any dividend for the year Annual General Meeting The 8 th Annual General Meeting of the Bank will be held on 1 st June 2015 in Hotel Westin, Dhaka. Appointment of Auditors Hoda Vasi Chowdhury & Co., Chartered Accountants and A.Qasem & Co., Chartered Accountants have been appointed as the external Auditors of the Bank in the myweavmönykvixi wnmv e Rgv nq AbjvBb weziy c wzi cöpjb cöevmx evsjv `wk Kgx `i g a wecyj Drmvn hywm q Q m vebvi 2015 Zxeª cöwz hvwmzv Ges bvbvwea P v jä _vkv m Ë I e vsk cövq mkj iæz c~y ÎB DbœwZ Ki Z m g n q Q e vsk G mkj cöwz hvwmzv Ges P v jä gvkvwejvq Kgx `i ` Zv e w K i Ges hlv b hzuv m e AvaywbKvqb K i e vswks Kvh µg Pvwj q hv Q e vsk m úwëi YMZgvb Dbœqb, D PZi my` Avq, DbœZZi mev I Kg cwipvjbvi gva g Gi e emvi cöe w AR b ` pzvi mv _ GwM q hv e GQvovI ` Rbej, e emvwqk mykvmb I SzuwK e e vcbvi j cöwzwbqz myôz cwikíbv MÖnY Kiv n e D P Acv iwus gybvdv AR b, by bzg g~jab msi Y, köbxweb vwmz FY me wb œ ch v q bvwg q Avbv Ges mkj LvZ hgb- Avg`vwb ißvwb e emv, iwgu vý AvniY, Znwej e q msi Y BZ vw` wel q mdjzv AR b me vz K cö Póv Ae vnz _vk e GQvovI mgv Ri Dbœq b e vsk h_vmva f wgkv cvjb Ki e wnmve cö ZKiY evsjv `k GKvDw Us vûvw (weggm), evsjv `k wdbvbwmqvj wi cvwu s vûvw (wegdavigm) Ges evsjv `k e vs Ki weaviwcww mvkz jvi bs 14, ZvwiL 25 Ryb 2003 G cö`ë QK gvzv ek wnmve ˆZix Kiv n q Q 2014 mv ji k l cöyxz wnmv e e vs Ki cök Z wpî dz U D V Q e emvwqk Kvh µ gi djvdj Ges bm` cöevn BZ vw` mwvkfv e cöwzdwjz n q Q e vsk Kv úvwbr G v± 1991 Ges Ab vb mswkøó weavb I AvBbvbymv i wnmve cö Z Kiv n q Q hv h_vh_fv e wbix KMY KZ K wbixw Z n q Q jf vsk NvlYv cwipvjbv cwil` KZ K 2014 m bi Rb Kvb jf vsk cö`v bi mycvwik Kiv nqwb evwl K mvaviy mfv e vs Ki Aóg evwl K mvaviy mfv 1jv Ryb 2015 Zvwi L nv Uj I qwób, XvKvq AbywôZ n e wbix K `i wb qvm û`v fvwm PŠayix GÛ Kvs, PvU vw GKvD U v Um Ges G. Kv kg GÛ Kvs, PvU vw GKvD U v Um dvg Øq K e vs Ki ewntwbix Ki KvR Kivi Rb h_vixwz 7g evwl K mvaviy Annual Report 2014 t 151

152 7th Annual General Meeting. The above two audit firms were appointed from Bangladesh Bank s enlisted A category audit firms. Acknowledgements The success of the Bank during the year under review is mainly attributable to the support and cooperation from the varied group of stakeholders. We gratefully acknowledge the support provided by all valued customers who have been with us in the course of our journey. We also place on record our thanks and gratitude to the patrons, well-wishers, Government of Bangladesh, Bangladesh Bank and Registrar of Joint Stock Companies and Firms for their continued support and co-operation. We are also thankful. Hoda Vasi Chowdhury & Co., Chartered Accountants and A.Qasem & Co., Chartered Accountants, the auditors of the Bank, for their timely completion of audit of Financial Statements. The employees including the members of top management of the Bank came up with their total commitment in implementing the agenda for improvement in a number of spheres of the banking operation. The Board takes this opportunity to thank them all. Finally, the Board would like to thank the respected shareholders and assure them that it will continue to add to the shareholders Interest through further strengthening and development of the Bank in which they have placed trust and confidence. For and on behalf of the Board of Directors mfvq wb qvm cö`vb Kiv n q Q evsjv `k e vs Ki ZvwjKv _ K ÔGÕ K vuvmwif ³ Dc iv³ `yõwu AwWU dvg K wbix K wn m e wb qvm Kiv n q Q K ZÁZv ^xkvi ez gvb eq i e vsk h mvdj AR b K i Q Zv wewfbœ chv qi K nvìvi `i Ae`vb Qvov m e n Zv bv e vs Ki mv _ m úk ` p Ki Y h me mš vwbz MÖvnK AvšÍwiK wq jb, cwil` Zuv `i cöwz K ZÁ cwil` e vs Ki c ô cvlk, ïfvbya vqx, mikvi, evsjv `k e vsk, R q U ók Kv úvwb I dvg mg~ ni iwr ªvi K AvšÍwiK ab ev` Ávcb Ki Q e vs Ki Awfó j AR b wbišíi mg_ b I mn hvwmzv cö`v bi Rb mgqgz wbix v m úbœ Kivi Rb cwipvjbv cwil` Gi cÿ _ K û`v fvwm PŠayix GÛ Kvs, PvU vw G vkvd U v Um Ges G. Kv kg GÛ Kvs, PvU vw G vkvd U v Um K ab ev` Rvbvw Q e vs Ki cwipvjbv Kvh µgmn mkj Î Dbœqb Z ivwš^z Kivi j GKwbô _vkvi AsMxKv ii Rb cwipvjbv cwil` e vs Ki DaŸ Zb wbev nxmn me Í ii Kg KZv I Kg Pvixe ` K ab ev` Ávcb Ki Q cwi k l, cwipvjbv cwil` mš vwbz kqvi nvìvimy K we klfv e ab ev` Ávcb Ki Q e vs Ki Dci wek vm I Av v vc bi Rb mb mv _ Zv `i K cwipvjbv cwil` Avk Í Ki Q h, e vs Ki Kvh µg kw³kvjx K i G cöwzôv bi Dbœq bi gva g Zviv kqvi nvìvim Yi ^v_ myi vq cöqvm Ae vnz ivl e cwipvjbv cwil `i c _ K Dr. Zaid Bakht Chairman W. Rv q` el&z Pqvig vb 152

153 Auditors Report & Audited Financial Statements of Agrani Bank Limited Annual Report

154 Auditors' Report to the Shareholders of Agrani Bank Limited We have audited the accompanying consolidated financial statements of Agrani Bank Limited and its subsidiaries (together referred to as the Group ) as well as the separate financial statements of Agrani Bank Limited (the Bank ) which comprise the consolidated and separate Balance Sheets as at 31 December 2014, consolidated and separate Profit and Loss Accounts, consolidated and separate Statements of Changes in Equity and Statements of Cash Flow for the year then ended, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements of the Group and also separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards (BFRSs) as explained in Note 2 and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 and the local central bank (Bangladesh Bank) Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements of the Group and the separate financial statements of the Bank are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and the separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of consolidated financial statements of the Group and separate financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and the separate financial statements of the Bank. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank give a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2014, and of its consolidated and separate financial performance and cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in note 2. Emphasis of matter We draw attention to the following matters, though our opinion is not qualified in respect of the same: 1. The Bank has made provision for current income tax for the year ended 31 December 2014 on the basis of minimum tax on total in accordance with Section 16CCC of the Income Tax Ordinance 1984 as per advice of the bank s income tax advisor considering the cumulative tax refund claimed by the Bank. Furthermore, as disclosed in note 12.4 income tax assessment for few years are pending with various stages of income tax appeal process. The management of the Bank believes on reasonable grounds that the Bank would be successful in receiving favorable outcome from these appeal process and hence no additional provision is required for income tax. 2. As disclosed in note to the financial statements, Other Assets include a net debit balance of Tk 1,069,011,953 as Branch Adjustment (such amount at 31 December 2013 was net credit balance of Tk 1,463,268,430). The Bank is in the process of fully reconciling these adjustments accounts. While the full reconciliation process in underway, the Bank has made provision for Tk crore as advised by Bangladesh Bank. 3. As disclosed in note to the financial statements the Bank has shown certain loans and advances aggregating Tk crore as Standard on the basis of stay orders from the Honorable High Court Division of the Supreme Court of Bangladesh, although these loans are overdue for an extended period of time. On these total amounts 20% provision amounting to Tk crore has been provided during the year ended 31 December 2014 and the rest amount shall 154

155 be provided for in 2015 and Interest income recognized during the year includes Tk 2, lacs (2013: Tk 3, lacs) related to these loans which have been taken to income account as the Management considers that these interest incomes would be fully recoverable in due course of time. 4. As disclosed in Note to the financial statements the Bank reported certain investments amounting to Tk 300 crore of BEXIMCO Limited, GMG Airlines Ltd and Unique Hotels and Resorts Ltd under sale and buy back agreements which have expired. The Bank has created fresh lien on certain shares valuing Tk crore and provided for Tk crore in the financial statements. Subsequently the Board of Directors of the Bank has approved such investment to convert a term loan and sent the same for Bangladesh Bank approval. Report on Other Legal and Regulatory Requirements In accordance with the Companies Act, 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991 and the rules and regulations issued by Bangladesh Bank, 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) to the extent noted during the course of our audit work performed on the basis stated under the Auditors' Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management s Responsibility for the Financial Statements and Internal Control: (a) internal audit, internal control and risk management arrangements of the Group and the Bank as disclosed in the financial statements appeared to be materially adequate; (b) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Bank and its related entities; (iii) Financial statements of the Bank s six subsidiaries, namely Agrani Exchange House Private Limited, Singapore, Agrani Remittance House SDN. BHD., Malaysia, Agrani Equity and Investment Limited, Agrani SME Financing Company Limited, Agrani Remittance House Canada, Inc., Agrani Exchange Company (Australia) Pty Limited, reflects total assets of Tk. 883,387,875 as at 31 December 2014 and total revenue of Tk. 501,877,702 for the year ended 31 December These financial statements, except Agrani Exchange Company (Australia) Pty Limited have been audited by other component auditors who have expressed unqualified audit opinion and accepted by us for the audit of the Group s consolidated financial statements of all subsidiaries of the Bank. As at the date of signing this report the audit of the Agrani Exchange Company (Australia) Pty Limited is ongoing and hence the consolidated financial statements have been prepared on the basis of management account of that company showing total assets of Tk 12,642,304 and total revenue of Tk 601,408. (iv) in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books and proper returns adequate for the purpose of our audit have been received from branches not visited by us; (v) the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance sheet and separate profit and loss account of the Bank together with the annexed notes dealt with by the report are in agreement with the books of account and returns; (vi) the expenditures incurred was for the purpose of the Bank s business; (vii) the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank; (viii) adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery; (ix) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; (x) the information and explanations required by us have been received and found satisfactory; (xi) we have reviewed over 80% of the risk weighted assets of the Bank and spending over 15,000 person hours; and (xii) Capital Adequacy Ratio (CAR) as required by the Bangladesh Bank has been maintained adequately during the year. Hoda Vasi Chowdhury & Co. Chartered Accountants A. Qasem & Co. Chartered Accountants Dhaka, 27 April 2015 Annual Report

156 Consolidated Balance Sheet As at 31 December 2014 PROPERTY & ASSETS Notes 2014 (Amount in Taka) 2013 (Restated) Cash: 3(a) 30,339,113,563 26,335,751,240 Cash in hand (including foreign currencies) 4,376,925,151 4,845,395,138 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 25,962,188,412 21,490,356,102 Balance with Other Banks and Financial Institutions: 4(a) 15,564,355,863 12,278,433,779 In Bangladesh 13,117,158,402 11,292,868,658 Outside Bangladesh 2,447,197, ,565,121 Money at Call and Short Notice: 5 5,030,000,000 2,450,000,000 Investments: 6(a) 158,586,411, ,974,378,981 Government 129,583,903, ,252,368,524 Others 29,002,508,101 27,722,010,457 Loans and Advances: 7(a) 233,854,867, ,624,298,938 Loans, cash credit & overdraft etc. 228,398,455, ,306,757,611 Bills discounted and purchased 5,456,412,341 5,317,541,327 Fixed Assets 8(a) 15,485,755,944 15,272,402,834 including land, building, furniture and fixtures: Other Assets: 9(a) 36,893,712,940 32,562,668,965 Non-banking Assets: - - Total Assets 495,754,217, ,497,934,737 LIABILITIES & CAPITAL Liabilities: Borrowings from Other Banks, Financial Institutions and Agents 10(a) 8,899,305,153 3,409,116,546 Deposit and Other Accounts: 11(a) 383,178,034, ,808,550,309 Current deposits & other accounts 38,211,367,848 33,642,154,191 Bills payable 5,053,940,551 4,857,198,087 Savings bank deposits 105,079,112,225 95,237,160,403 Fixed deposits 234,833,614, ,072,037,628 Other Liabilities: 12(a) 64,209,011,162 57,809,026,681 Total Liabilities 456,286,351, ,026,693,536 Capital/Shareholders Equity: Paid-up capital ,722,940,400 20,722,940,400 Reserve: 17,014,822,195 16,661,806,920 Statutory reserve 14(a) 5,884,775,514 5,531,760,174 General reserve 15(a) 59,731,198 59,731,263 Asset revaluation reserve 16(a) 11,070,315,483 11,070,315,483 Revaluation & amortization reserve 17(a) 2,026,328, ,572,162 Retained surplus/(deficit) 18(a) (327,583,967) (2,526,134,204) Foreign currency translation reserve 19 31,356,243 39,054,011 Minority interest 20 3,007 1,912 Total Shareholders Equity 39,467,866,575 35,471,241,201 Total Liabilities and Shareholders Equity 495,754,217, ,497,934,

157 Consolidated Off Balance Sheet Items As at 31 December 2014 Contingent Liabilities: Notes 2014 (Amount in Taka) 2013 (Restated) Acceptances and endorsements 83,982,665, ,817,629,561 Letters of guarantee ,554,398,823 7,940,625,312 Letters of credit 38,751,002,780 71,925,073,113 Bills for collection ,643,450,000 22,132,178,037 Other contingent liabilities ,434,512,602 4,026,083,099 Claims against the Bank not acknowledged as debt 7,599,301,000 7,793,670,000 Other commitments: - - Documentary credit and short term trade-related transactions - - Liability on account of outstanding forward exchange contract - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total Off-Balance Sheet Items 83,982,665, ,817,629,561 These financial statements should be read in conjunction with the annexed notes 1 to 53. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Hoda Vasi Chowdhury & Co. Chartered Accountants A. Qasem & Co. Chartered Accountants Dated, Dhaka April 27, 2015 Annual Report

158 Consolidated Profit and Loss Account For the year ended 31 December 2014 (Amount in Taka) Notes (Restated) Operating income Interest and Revenue income 23(a) 23,351,879,959 23,814,181,469 Interest paid on deposits, borrowings etc. 24(a) 22,006,811,296 22,397,814,571 Net interest income 1,345,068,663 1,416,366,898 Investment income 25(a) 13,412,680,064 11,480,854,906 Commission, exchange earnings and brokerage 26(a) 4,474,738,019 5,148,104,878 Other operating income 27(a) 971,132,646 1,039,563,938 18,858,550,729 17,668,523,722 Total operating income 20,203,619,392 19,084,890,620 Operating expenses Salary and allowance 28(a) 6,281,807,392 5,414,189,910 Rent, taxes, insurance, electricity etc. 29(a) 801,108, ,385,068 Legal expenses 30(a) 24,916,393 27,527,252 Postage, stamp, telecommunication etc. 31(a) 159,916, ,818,213 Stationery, printing, advertisement etc. 32(a) 253,049, ,008,559 Chief Executive s salary and allowances 33(a) 6,660,000 9,539,143 Directors fees 34(a) 4,289,781 4,311,102 Auditors fees 35(a) 6,055,623 3,743,837 Depreciation and repair of bank s assets 36(a) 726,970, ,816,973 Other expenses 37(a) 837,103,534 1,072,809,604 Total operating expenses 9,101,877,919 8,213,149,661 Profit/(Loss) before amortization, provision & tax 11,101,741,473 10,871,740,959 Amortization of valuation adjustment 1,329,500,000 1,329,500,000 Profit/(Loss) before provision & tax 9,772,241,473 9,542,240,959 Provision for loans and advances 38(a) 4,090,211,487 - Other provision 39(a) 3,814,952,314 2,416,857,258 Total provision 7,905,163,801 2,416,857,258 Net profit/(loss) before Tax 1,867,077,672 7,125,383,701 Provision for Tax Current Tax ,522,954 73,439,722 Deferred Tax 41 (407,314,782) (2,155,875,888) (197,791,828) (2,082,436,166) Net profit/(loss) after Tax 2,064,869,500 9,207,819,867 Add: Retained surplus (Opening Balance) (2,526,134,204) (14,971,828,955) Add: Prior year adjustment for Agrani Bank Limited 109,694,416 (6,136,834) Add: Prior year adjustment for Agrani SME Financing Company Limited (76,997) 334,840 Add: Transfer from provision 377,081,599 4,629,909,934 Add: Foreign currency translation gain/(loss) 19 (7,697,768) 12,699,181 (2,047,132,954) (10,335,021,832) 17,736,546 (1,127,201,965) Appropriation: Statutory reserve 353,015,370 1,386,323,948 Minority interest 18(a) 2, Foreign currency translation reserve (7,697,768) 12,699, ,320,512 1,398,932,239 Retained surplus/(deficit) 18(a) (327,583,967) (2,526,134,204) Earnings Per Share (EPS) 13.3(a) These financial statements should be read in conjunction with the annexed notes 1 to 53. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27, Hoda Vasi Chowdhury & Co. Chartered Accountants A. Qasem & Co. Chartered Accountants

159 Consolidated Cash Flow Statement For the year ended December 31, 2014 Notes (Amount in Taka) A. Cash flows from operating activities Interest receipts in cash 42(a) 31,747,715,534 32,328,561,470 Interest payments 43(a) (22,771,481,406) (20,784,442,158) Dividend receipts 2,523,752,013 1,844,850,283 Fees and commission receipts 2,050,644,843 1,838,406,174 Recovery of loans previously written off 155,607, ,879,695 Cash payment to employees (6,288,467,392) (5,422,045,625) Cash payments to suppliers (376,550,827) (222,906,887) Receipts from other operating activities 44(a) 952,490,132 1,045,144,387 Payments for other operating activities 45(a) (2,384,089,078) (1,919,737,456) Operating profit/(loss) before changing in operating assets and liabilities 5,609,620,874 9,316,709,883 (Increase)/decrease in operating assets Treasury Bills (7,518,255,528) (22,330,860,111) Treasury & Other Bond (HFT) 779,781,923 (10,088,744,494) Fund advanced to customers (34,230,568,950) 11,465,169,400 Other assets (2,903,527,595) 287,841,511 (43,872,570,150) (20,666,593,694) Increase/(decrease) in operating liabilities Deposit from customers 35,369,484,547 56,163,096,370 Other liabilities 1,295,589,254 (12,448,039,290) 36,665,073,801 43,715,057,080 Net cash from operating activities (A) (1,597,875,475) 32,365,173,269 B. Cash flows from investing activities Treasury & Other Bond (HTM) 4,994,353,232 (25,168,462,254) Debenture 150,000, ,000,000 Purchase of securities (1,019,942,644) (1,935,316,179) Purchase of properties, plant & equipment (566,818,191) (653,716,600) Proceeds from sale of properties, plant & equipment 11,156,533 11,983,047 Net cash from investing activities (B) 3,568,748,930 (27,605,511,986) C. Cash flows from financing activities Receipt/(Payment) of long term borrowings 6,159,630,364 (3,053,783) Receipt/(Payment) from other borrowings (669,441,756) (6,662,220,940) Receipt from issue of ordinary share (Right Share) - 10,810,000,000 Net cash from financing activities (C) 5,490,188,608 4,144,725,277 Net increase in cash and cash equivalents (A+B+C) 7,461,062,063 8,904,386,560 Effect of exchange rate change on cash and cash equivalent 2,406,191,894 3,255,961,803 Cash and cash equivalents at the beginning of the year 41,080,333,619 28,919,985,256 Cash and cash equivalents at the end of the year 47 50,947,587,576 41,080,333,619 (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director Dated, Dhaka April 27, 2015 (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Annual Report

160 Consolidated Statement of Changes in Equity For the year ended 31 December 2014 Particulars Paid up Capital Revaluation & Amortization Reserve Attributable to Shareholders of Agrani Bank Limited Statutory Reserve General Reserve Asset Revaluation Reserve Retained Surplus Foreign Currency Translation Reserve Total Minority Interest (Amount in Taka) Balance as at 01, January ,722,940, ,572,162 5,531,760,174 59,731,264 11,070,315,483 (2,526,134,204) 39,054,011 35,471,239,290-35,471,239,290 Transfer from exchange equalization fund ,617, ,617, ,617,419 Adjustment - (573,572,162) (573,572,162) - (573,572,162) Adjusted Balance 20,722,940,400-5,531,760,174 59,731,264 11,070,315,483 (2,416,516,785) 39,054,011 35,007,284,547-35,007,284,547 Surplus/deficit on account of revaluation of properties Surplus on account of revaluation of investments in Approved Securities: Held to Maturity (HTM) - 271,678, ,678, ,678,581 Held for Trading (HFT) - 1,754,650, ,754,650,116-1,754,650,116 Net gains and losses not recognized in the - - (30) (66) - (2,910) (7,697,768) (7,700,774) 287 (7,700,487) income statement Share capital ,720 2,720 Transfer from provision ,081, ,081, ,081,599 Net profit for the year ,064,869,500-2,064,869,500-2,064,869,500 Statutory Reserve ,015, (353,015,370) Balance as at December 31, ,722,940,400 2,026,328,697 5,884,775,514 59,731,198 11,070,315,483 (327,583,967) 31,356,243 39,467,863,568 3,007 39,467,866,575 Balance as at December 31, ,722,940, ,572,162 5,531,760,174 59,731,264 11,070,315,483 (2,526,134,204) 39,054,011 35,471,239,290 1,942 35,471,241, These financial statements should be read in conjunction with the annexed notes 1 to 53. Total (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27,

161 Consolidated Liquidity Statement (Asset and Liability Maturity Analysis) As at 31 December 2014 Up to 01 month 1-3 months 3-12 months 1-5 years More than 5 years (Amount in Taka) Assets: Cash in hand 4,381,925, ,957,188,412 30,339,113,563 Balance with other banks and financial institutions 2,641,314,156 7,895,570,476 2,307,471,231 2,720,000,000-15,564,355,863 Money at call and short notice 5,030,000, ,030,000,000 Investment 6,300,774,787 35,383,090,242 20,241,414,639 41,543,910,443 55,117,221, ,586,411,548 Loans and advances 24,887,291,457 27,926,967,439 66,613,743,256 37,986,691,685 76,440,174, ,854,867,888 Fixed assets including land, furniture and fixtures ,485,755,944 15,485,755,944 Other assets 3,062,719,256 2,186,169,655 1,727,701,030 26,765,236,236 3,151,886,763 36,893,712,940 Non-banking assets Total Assets 46,304,024,807 73,391,797,812 90,890,330, ,015,838, ,152,226, ,754,217,746 Total Liabilities: Borrowing from Bangladesh Bank, other banks, financial institutions 2,732,989, ,165,745, ,421 8,899,305,153 Deposits and other accounts 34,538,906,843 60,139,799,943 70,361,499, ,564,874,406 30,572,953, ,178,034,856 Provision and other liabilities 485,281, ,099,945 3,404,758,599 27,156,106,262 32,545,764,487 64,209,011,162 Total Liabilities 37,757,178,445 60,756,899,888 73,766,258, ,886,726,667 63,119,287, ,286,351,171 Net Liquidity Gap 8,546,846,362 12,634,897,924 17,124,071,615 (111,870,888,303) 113,032,938,977 39,467,866,575 (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27, 2015 Annual Report

162 Balance Sheet As at 31 December 2014 Notes (Amount in Taka) PROPERTY & ASSETS Cash: 03 30,196,202,546 26,237,586,987 Cash in hand (including foreign currencies) 4,239,014,134 4,752,230,885 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 25,957,188,412 21,485,356,102 Balance with Other Banks and Financial Institutions: 04 15,375,867,598 12,142,144,207 In Bangladesh 13,041,158,402 11,292,868,658 Outside Bangladesh 2,334,709, ,275,549 Money at Call and Short Notice: 05 5,030,000,000 2,450,000,000 Investments: ,279,754, ,928,614,562 Government 129,583,903, ,252,368,524 Others 22,695,851,464 21,676,246,038 Loans and advances: 235,085,714, ,965,388,138 Loans, cash credit & overdraft etc ,629,301, ,647,846,811 Bills discounted and purchased 7.1 5,456,412,341 5,317,541,327 Fixed assets 08 15,447,261,727 15,248,010,045 including land, building, furniture and fixtures: Other Assets: 09 41,456,028,892 35,184,840,777 Non-banking Assets: - - Total Assets 494,870,829, ,156,584,716 LIABILITIES & CAPITAL Liabilities: Borrowings from Other Banks, Financial Institutions and Agents: ,899,305,153 3,409,116,546 Deposit and Other Accounts: 11.a 383,921,950, ,675,167,594 Current deposits & other accounts 38,314,408,111 34,508,771,476 Bills payable 5,053,940,551 4,857,198,087 Savings bank deposits 105,079,112,225 95,237,160,403 Fixed deposits 235,474,489, ,072,037,628 Other Liabilities: 12 62,482,960,876 56,431,364,699 Total Liabilities 455,304,216, ,515,648,839 Capital/Shareholders Equity: Paid-up capital ,722,940,400 20,722,940,400 Reserve: 16,934,697,464 16,593,727,190 Statutory reserve 14 5,859,381,981 5,518,411,707 General reserve 15 5,000,000 5,000,000 Asset revaluation reserve 16 11,070,315,483 11,070,315,483 Revaluation & amortization reserve 17 2,026,328, ,572,162 Retained surplus/(deficit) 18 (117,353,370) (2,249,303,875) Total Shareholders Equity 39,566,613,191 35,640,935,877 Total Liabilities and Shareholders Equity 494,870,829, ,156,584,

163 Off Balance Sheet Items As at 31 December 2014 Notes (Amount in Taka) Contingent Liabilities: Acceptances and endorsements 83,982,665, ,817,629,561 Letters of guarantee ,554,398,823 7,940,625,312 Letters of credit 38,751,002,780 71,925,073,113 Bills for collection ,643,450,000 22,132,178,037 Other contingent liabilities ,434,512,602 4,026,083,099 Claims against the Bank not acknowledged as debt 7,599,301,000 7,793,670,000 Other commitments: - - Documentary credit and short term trade-related transactions - - Liability on account of outstanding forward exchange contract - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total Off-Balance Sheet Items 83,982,665, ,817,629,561 These financial statements should be read in conjunction with the annexed notes 1 to 53. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Hoda Vasi Chowdhury & Co. Chartered Accountants A. Qasem & Co. Chartered Accountants Dated, Dhaka April 27, 2015 Annual Report

164 Profit and Loss Account For the year ended 31 December 2014 Notes (Amount in Taka) Operating income Interest and revenue income 23 23,394,829,516 23,947,295,893 Interest paid on deposits, borrowings etc ,208,967,988 22,682,044,447 Net interest income 1,185,861,528 1,265,251,446 Investment income 25 13,011,071,419 11,140,067,544 Commission, exchange earnings and brokerage 26 4,338,569,554 5,142,256,761 Other operating income ,082, ,338,679 18,313,723,470 17,187,662,984 Total Operating Income 19,499,584,998 18,452,914,430 Operating expenses Salary and allowance 28 6,164,550,821 5,312,298,885 Rent, taxes, insurance, electricity etc ,934, ,232,441 Legal expenses 30 21,253,674 25,745,353 Postage, stamp, telecommunication etc ,940, ,339,411 Stationery, printing, advertisement etc ,651, ,559,740 Chief Executive s salary and allowances 33 5,700,000 5,575,000 Directors fees 34 3,021,250 3,124,750 Auditors fees 35 3,633,750 3,031,500 Depreciation, Amortization and Repair of bank s assets ,621, ,369,900 Other expenses ,762, ,311,798 Total operating expenses 8,760,069,829 7,813,588,778 Profit/(Loss) before amortization, provision & tax 10,739,515,169 10,639,325,652 Amortization of valuation adjustment 9.5 1,329,500,000 1,329,500,000 Profit/(Loss) before provision & tax 9,410,015,169 9,309,825,652 Provision for loans and advances 38 4,090,211,487 - Other provision 39 3,614,952,314 2,416,857,258 Total provision 7,705,163,801 2,416,857,258 Net profit/(loss) before Tax 1,704,851,368 6,892,968,394 Provision for Tax Current Tax ,000,000 - Deferred Tax 9.6 (407,293,396) (2,156,030,207) (281,293,396) (2,156,030,207) Net profit/(loss) after Tax 1,986,144,764 9,048,998,601 Add: Retained surplus (Opening Balance) (2,249,303,875) (14,543,581,897) Add: Transfer from provision 377,081,599 4,629,909,934 Add: Prior year adjustment 109,694,416 (6,136,834) (1,762,527,860) (9,919,708,797) 223,616,904 (870,710,196) Appropriation: Statutory reserve ,970,274 1,378,593,679 Bonus share issue ,970,274 1,378,593,679 Retained surplus/(deficit) 18 (117,353,370) (2,249,303,875) Earnings Per Share (EPS) These financial statements should be read in conjunction with the annexed notes 1 to 53. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27, Hoda Vasi Chowdhury & Co. Chartered Accountants A. Qasem & Co. Chartered Accountants

165 Cash Flow Statement For the year ended December 31, 2014 Notes (Amount in Taka) A. Cash flows from operating activities Interest receipts in cash 42 31,790,665,091 32,187,833,032 Interest payments 43 (22,973,638,098) (21,068,672,034) Dividend receipts 2,523,752,013 1,777,905,783 Fees and commission receipts 1,914,467,628 1,832,558,057 Recovery of loans previously written off 155,607, ,879,695 Cash payment to employees (6,170,250,821) (5,317,803,476) Cash payments to suppliers (373,152,847) (219,559,740) Receipts from other operating activities ,812, ,923,431 Payments for other operating activities 45 (1,941,437,834) (1,643,543,751) Operating profit/(loss) before changing in operating assets and liabilities 5,870,824,624 9,068,520,997 (Increase)/decrease in operating assets Treasury Bills (7,518,255,528) (22,330,860,111) Treasury & Other Bond (HFT) 779,781,923 (10,088,744,494) Fund advanced to customers (32,120,326,059) 9,697,629,194 Other assets (5,161,722,116) 392,693,770 (44,020,521,780) (22,329,281,641) Increase/(decrease) in operating liabilities Deposit from customers 35,246,783,057 56,245,940,457 Other liabilities 947,200,950 (12,509,689,263) 36,193,984,007 43,736,251,194 Net cash from operating activities (A) (1,955,713,149) 30,475,490,550 B. Cash flows from investing activities Treasury & Other Bond (HTM) 4,994,353,232 (25,168,462,254) Debenture 150,000, ,000,000 Purchase of securities (759,050,426) (60,742,557) Purchase of properties, plant & equipment (566,818,191) (642,298,221) Proceeds from sale of properties, plant & equipment 11,156,533 10,692,510 Net cash from investing activities (B) 3,829,641,148 (25,720,810,522) C. Cash flows from financing activities Receipt/(Payment) of long term borrowings 6,159,630,363 (3,053,783) Receipt/(Payment) from other borrowings (669,441,756) (6,662,220,940) Receipt from issue of ordinary share (Right Share) - 10,810,000,000 Net cash from financing activities (C) 5,490,188,607 4,144,725,277 Net increase in cash and cash equivalents (A+B+C) 7,364,116,606 8,899,405,305 Effect of exchange rate change on cash and cash equivalent 2,406,191,894 3,255,961,803 Cash and cash equivalents at the beginning of the year 40,845,879,794 28,690,512,686 Cash and cash equivalents at the end of the year 46 50,616,188,294 40,845,879,794 (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27, 2015 Annual Report

166 Statement of Changes in Equity For the year ended 31 December 2014 (Amount in Taka) Particulars Paid up Capital Revaluation & Amortization Reserve Statutory Reserve General Reserve Asset Revaluation Reserve Retained Surplus Balance as at 01, January ,722,940, ,572,162 5,518,411,707 5,000,000 11,070,315,483 (2,249,303,875) 35,640,935,877 Total Prior year adjustment (Exchange Equalization Fund & Exchange Adjustment) ,694, ,694,416 Adjustment - (573,572,162) (573,572,162) Restated balance 20,722,940,400-5,518,411,707 5,000,000 11,070,315,483 (2,139,609,459) 35,177,058,131 Surplus/deficit on account of revaluation of properties Surplus on account of revaluation of investments in Approved Securities: Held to Maturity (HTM) Annexure-B1 & B2-271,678, ,678,581 Held for Trading (HFT) Annexure-B2 & B2-1,754,650, ,754,650,116 Issue of Share Capital ( Right Share ) Transfer from provision ,081, ,081,599 Net profit for the year ,986,144,764 1,986,144,764 Statutory Reserve ,970, (340,970,274) - Balance as at December 31, ,722,940,400 2,026,328,697 5,859,381,981 5,000,000 11,070,315,483 (117,353,370) 39,566,613,191 Balance as at December 31, ,722,940, ,572,162 5,518,411,707 5,000,000 11,070,315,483 (2,249,303,875) 35,640,935,877 These financial statements should be read in conjunction with the annexed notes 1 to 53. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27,

167 Liquidity Statement (Asset and Liability Maturity Analysis) As at 31 December 2014 (Amount in Tk.) Up to 01 month 1-3 months 3-12 months 1-5 years More than 5 years Total Assets: Cash in hand 4,239,014, ,957,188,412 30,196,202,546 Balance with other banks and financial institutions 2,334,709,196 8,500,000,000 1,821,158,402 2,720,000,000-15,375,867,598 Money at call and short notice 5,030,000, ,030,000,000 Investment 14,118,150 35,383,090,242 20,241,414,639 41,523,910,443 55,117,221, ,279,754,911 Loans and advances 24,414,825,567 30,031,345,857 66,504,243,256 37,695,125,466 76,440,174, ,085,714,197 Fixed assets including land, furniture and fixtures ,447,261,727 15,447,261,727 Other assets 3,010,252,692 2,164,699,931 1,712,299,927 31,412,199,988 3,156,576,354 41,456,028,892 Non-banking assets Total Assets 39,042,919,739 76,079,136,030 90,279,116, ,351,235, ,118,421, ,870,829,871 Liabilities: Borrowing from Bangladesh Bank,Other banks, financial institutions and agents 2,732,989, ,165,745, ,421 8,899,305,153 Deposits and other accounts 34,641,947,107 60,139,799,943 70,361,499, ,564,874,406 31,213,829, ,921,950,651 Provision and other liabilities 466,199, ,099,945 3,292,466,170 27,123,955,630 30,983,239,146 62,482,960,876 Total Liabilities 37,841,136,825 60,756,899,888 73,653,966, ,854,576,035 62,197,637, ,304,216,680 Net Liquidity Gap 1,201,782,914 15,322,236,142 16,625,150,112 (107,503,340,138) 113,920,784,161 39,566,613,191 (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO (K.M.N. Manjurul Hoque Lablu Director (Arastoo Khan) Director (Dr. Zaid Bakht) Chairman Dated, Dhaka April 27, 2015 Annual Report

168 Notes to the Financial Statements As at and for the year ended December 31, BACKGROUND INFORMATION 1.1 Establishment and status of the Bank Agrani Bank Limited (the Bank) has been incorporated as a Public Limited Company on May 17, 2007 Vide Certificate of Incorporation No. C-66888(4380)/07. The Bank has taken over the business of Agrani Bank (emerged as a Nationalized Commercial Bank in 1972, pursuant to Bangladesh Bank (Nationalization) Order No (P.O. # 26 of 1972)) on a going concern basis through a Vendor Agreement signed between the Ministry of Finance of the People s Republic of Bangladesh on behalf of Agrani Bank and the Board of Directors on behalf of Agrani Bank Limited on November 15, 2007 with a retrospective effect from July 01, The Bank s current shareholdings comprise Government of the People s Republic of Bangladesh and 12 (Twelve) other shareholders nominated by the Government. The Bank has 921 branches and 05 (five) windows are working under Islamic Banking Unit complying with the rules of Islamic Shariah Nature of business The Bank through its Branches and non-banking subsidiaries provides a diverse range of financial services and products in Bangladesh and in certain international markets Islamic Banking Unit The Bank obtained the Islamic Banking Unit permission vide letter no. BRPD(P-3)745(3)/ dated July 22, The Bank commenced operation of its 05 (Five) Islamic windows at February 28, (Five) Islamic Banking Windows are located at Motijheel, Gulshan, Agrabad, Laldighipar and Maizdee Court. The Islamic Banking Windows are governed under the rules and guidelines of Bangladesh Bank. The principal activities of the windows are to provide all kinds of Islamic Commercial Banking services to its customers. 1.2 The Bank has 6 (Six) Subsidiaries, details of which are given at note no Agrani Exchange House Private Limited, Singapore Agrani Exchange House Private Limited is a limited liability company incorporated and domiciled in the Republic of Singapore with the Registration No D whose registered office and principal place of business is located at 5A Lembu Road Singapore The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company s ultimate holding company. The principal activities of the Company are to carry on the remittance business and to undertake and participate in any or all transactions, activities and operations commonly carried on or undertaken by remittance and exchange house Agrani Remittance House SDN. BHD., Malaysia The company is a private limited liability Company, incorporated and domiciled in Malaysia with the Registration No M whose registered office is located at Suite 13.01, 13th Floor, Tower Block Plaza Pekeliling, Jalan Tun Razak, Kuala Lumpur, Malaysia. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company s ultimate holding company. The principal activity of the company during the financial year is that of providing remittance services to legal Bangladeshi expatriates working in Malaysia Agrani Equity and Investment Limited The company is a public limited registered under the Companies Act The company was incorporated in Bangladesh on 16 March 2010 with Certificate of Incorporation No. C-8357/10 whose registered office is located at 9/D, Dilkusha, Motijheel, Dhaka-1000, Bangladesh. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company s ultimate holding company. The principal activities of the company comprised of merchant banking, portfolio management, issue management and underwriting Agrani SME Financing Company Limited The Company has been incorporated as a public limited Company on 27 October, 2010 vide certificate of incorporation No. C /10. The company has taken over the ongoing work of Small Enterprise Development 168

169 Project (A Norway and Agrani bank funded Project of Ministry of Finance, Bangladesh) on a going concern basis through a Vendor's Agreement signed between the Ministry of Finance of the People's Republic of Bangladesh, the Board of Directors on behalf of the Agrani Bank Limited and the Board of Directors on behalf of the Agrani SME Financing Company Limited on 27 December, The principal activities of the company are providing support to Small and Medium Enterprises all over the country through training program on limited basis and providing loan to the customers Agrani Exchange Company (Australia) Pty. Limited The company is a private limited liability Company, incorporated and domiciled in Australia with the Corporation No whose registered office is located at 301 Castlereagh Street, Sydney NSW The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company s ultimate holding company. The principal activity of the company is that of providing remittance services to legal Bangladeshi expatriates working in Australia Agrani Remittance House Canada, Inc. Agrani Remittance House Canada, Inc. is a limited liability company incorporated and domiciled in Canada with the Corporation No whose registered office is located at 2960 Danforth avenue, Toronto on M4C 1M6. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company s ultimate holding company. The principal activities of the Company are to carry on the remittance business and to undertake and participate in any or all transactions, activities and operations commonly carried on or undertaken by remittance and exchange house. 2. Basis of Preparation and Significant Accounting Policies 2.1 Statement of compliance The financial statements of the Bank have been prepared in accordance with the "First Schedule (Section 38) of the Banking Companies Act 1991 as amended by BRPD circular no. 14 dated 25 June 2003, BRPD circular no. 15 dated 09 November 2009, other Bangladesh Bank Circulars, Bangladesh Financial Reporting Standards (BFRSs), Bangladesh Accounting Standards (BASs), Financial Accounting Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions, Bahrain etc. The Bank complied with the requirement of the following regulatory and legal authorities: i) Banking Companies Act 1991 ii) Companies Act 1994 iii) Rules, regulations and circulars issued by the Bangladesh Bank from time to time iv) Bangladesh Securities and Exchange Rules 1987 v) Bangladesh Securities and Exchange Ordinance 1969 vi) Bangladesh Securities and Exchange Commission Act 1993 vii) Bangladesh Securities and Exchange Commission (Public Issues) Rules 2006 viii) Income Tax Ordinance and Rules 1984 ix) Value Added Tax Act 1991 However, the Group and the Bank has departed from some contradictory requirements of BFRSs in order to comply with the rules and regulations of Bangladesh Bank which are disclosed below: (a) Investments in shares and securities BFRS: As per requirements of BAS 39- Financial Instruments: Recognition & Measurement investment in shares and securities generally falls either under at fair value through profit and loss account or under available for sale where any change in the fair value (as measured in accordance with BFRS 13- Fair Value Measurement) at the year-end is taken to profit and loss account or revaluation reserve respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise investments are recognised at cost. Annual Report

170 (b) Revaluation gain/loss on Government securities BFRS: As per requirement of BAS 39- Financial Instruments: Recognition & Measurement where securities will fall under the category of Held for Trading (HFT), any change in the fair value of held for trading assets is recognised through profit and loss account. Securities designated as Held to Maturity (HTM) are measured at amortised cost method and interest income is recognised through the profit and loss account. Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortisation of discount are recognised in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortised at the year end and gains or losses on amortisation are recognised in other reserve as a part of equity. (c) Provision on loans and advances BFRS: As per BAS 39- Financial Instruments: Recognition & Measurement an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets that are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis. Bangladesh Bank: As per BRPD circular No.14 (23 September 2012), BRPD circular No. 19 (27 December 2012) and BRPD circular No. 05 (29 May 2013) a general provision at 0.25% to 5% under different categories of unclassified loans (STD/ SMA loans) have to be maintained regardless of objective evidence of impairment. Also provision for substandard loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on the duration of overdue. Again as per BRPD circular no. 14 dated 23 September 2012, a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39. (d) Recognition of interest in suspense BFRS: Loans and advances to customers are generally classified as 'loans and receivables' as per BAS 39- Financial Instruments: Recognition & Measurement and interest income is recognised through effective interest rate method over the term of the loan. Once a loan is impaired, interest income is recognised in profit and loss account on the same basis based on revised carrying amount. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet. (e) Other comprehensive income BFRS: As per BAS 1- Presentation of Financial Statements Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a single Other Comprehensive Income statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI) Statement. As such the Bank does not prepare the other comprehensive income statement. However, elements of OCI, if any, are shown in the statements of changes in equity. (f) Financial instruments - presentation and disclosure In several cases Bangladesh Bank guidelines categorise, recognise, measure and present financial instruments differently from those prescribed in BAS 39- Financial Instruments: Recognition & Measurement. As such 170

171 full disclosure and presentation requirements of BFRS 7- Financial Instruments: Disclosures and BAS 32-Financial Instruments: Presentation cannot be made in the financial statements. (g) Financial guarantees BFRS: As per BAS 39- Financial Instruments: Recognition & Measurement financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognised initially at their fair value, and the initial fair value is amortised over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortised amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as letter of credit, letter of guarantee will be treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin. (h) Cash and cash equivalents BFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7- Statement of Cash Flows. Bangladesh Bank: Some cash and cash equivalent items such as money at call and on short notice, treasury bills, Bangladesh Bank bills and prize bond are not shown as cash and cash equivalents. Money at call and on short notice presented on the face of the balance sheet, and treasury bills, prize bonds are shown in investments. (i) Non banking assets BFRS: No indication of Non-banking asset is found in any BFRS. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named Non-banking asset. (j) Cash flow statement BFRS: AS per BAS 7- Statement of Cash Flows The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flow is the mixture of direct and indirect methods. (k) Balance with Bangladesh Bank (CRR) BFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per BAS 7- Statement of Cash Flows. Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents. (l) Presentation of intangible asset BFRS: An intangible asset must be identified and recognised, and the disclosure must be given as per BAS 38-Intangible Assets. Bangladesh Bank: There is no regulation for intangible assets in BRPD circular no.14 dated 25 June Annual Report

172 (m) Off balance sheet items BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet. Bangladesh Bank: As per BRPD circular no.14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet. (n) Loans and advances net of provision BFRS: Loans and advances should be presented net of provisions. Bangladesh Bank: As per BRPD circular no.14 dated 25 June 2003, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances. [Also refer to Note-2.36 Compliance of Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs)] 1.2 Basis for Measurement The financial statements of the Bank have been prepared on the historical cost basis except for the following material items: a) Government Treasury Bills and Bonds designated as 'Held for Trading (HFT)' at present value using marking to market concept with gain crediting to revaluation reserve. b) Government Treasury Bills and Bonds designated as 'Held to Maturity (HTM)' at present value using amortization concept. 2.3 Use of estimates and judgments The preparation of consolidated financial statements and financial statements of the Bank required management to make judgments, estimates and assumptions that affected the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions have been reviewed considering business realities. Revisions of accounting estimates have been recognized in the period in which the estimates have been revised and in the future periods affected, if applicable. The preparation of financial statements in conformity with adopted BFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group s accounting policies. The accounting policies set out below have been applied consistently across the Group and to all periods presented in these financial statements. 2.4 Foreign currency transactions Functional and presentational currency Financial statements of the Bank have been presented in Taka, which is the Bank s functional and presentational currency Foreign currency translation Foreign currency transactions have been converted into equivalent Taka currency at the ruling exchange rates on the respective date of such transactions as per BAS 21 The Effects of Changes in Foreign Exchange Rates. Foreign Currency conversion rates for the year 2014 are as follows: Sl. No. Particular SGD MYR AUD CAD 1 Assets & Liabilities Income & Expenses Here, SGD, MYR, AUD and CAD indicate Singaporean Dollar, Malaysian Ringgit, Australian Dollar and Canadian Dollar respectively. 172

173 2.4.3 Commitment Commitments for outstanding forward foreign exchange contracts disclosed in the consolidated financial statements and financial statements of Bank have been translated at contracted rates. Contingent liabilities/ commitments for letter of credit, letter of guarantee and acceptance denominated in foreign currencies have been expressed in Taka terms at the rates of exchange ruling on the balance sheet date Translation gain and losses Gains or losses arising out of translation of foreign exchange have been included in the Profit and Loss Statement and in Balance Sheet Foreign operations The assets & liabilities of foreign operations are translated to Bangladeshi Taka at exchange rate prevailing at the balance sheet date. The income & expenses of foreign operations are translated at average rate of exchange for the year. Foreign currency differences are recognised and presented in the foreign currency translation reserve in equity. 1.5 Basis for Consolidation The consolidated financial statements include the financial statements of Agrani Bank Limited and its six subsidiaries named Agrani Equity and Investment Limited, Agrani SME Financing Company Limited, Agrani Exchange House Private Limited, Singapore, Agrani Remittance House, BHD, Malaysia, Agrani Exchange Co.(Australia) Pty. Limited, Agrani Remittance House Canada, Inc. made up to the end of the financial year. The Consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standards BAS-27 'Consolidated and Separate Financial Statements' and BFRS-13 'Fair Value Measurement'. These Consolidated financial statements are prepared to a common financial year ended 31 December Wherever considered necessary previous year's figures have been restated for comparison purposes. Due to late receipt of the audited financial statements of one subsidiary in prior year, the reported net profit after tax and net assets for 2013 have been changed by Tk. 8,175,378 and Tk. 8,175,409 respectively Subsidiaries Subsidiaries are entities controlled by the group. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date the control ceases. Name of Subsidiary Ownership Status of Ownership Country of Operation Agrani Exchange House Pte. Limited % Wholly Singapore Agrani Remittance House SDN. BHD % Wholly Malaysia Agrani Equity and Investment Limited 99.99% Majority Bangladesh Agrani SME Financing Com. Limited 99.99% Majority Bangladesh Agrani Exchange Co.(Australia) Pty. Limited % Wholly Australia Agrani Remittance House Canada, Inc % Wholly Canada Transactions eliminated on consolidation Intra-group balances and transactions and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the Consolidated Financial Statements. Unrealized gains or unrealized losses arising from transactions with equity accounted investees are eliminated against the investment to the extent of the group's interest in the investee. 2.6 Materiality, aggregation and offsetting The Bank aggregates each material class of similar items and separately which are dissimilar in nature or function unless those are immaterial. The Bank did not offset assets and liabilities or income and expense, unless required or permitted by BAS/ BFRS. 2.7 Comparative Information Presentation of Financial Statements, comparative information in respect of the previous year have been presented in all numerical information in the financial statements and the narrative and descriptive information where, it is relevant for understanding of the current year's financial statements. 2.8 Reporting period The accounting period of the bank has been determined to be from 01 January to 31 December each year and is followed consistently. Annual Report

174 2.9 Cash flow statement Cash Flow Statement is prepared principally in accordance as per the guidelines of BRPD circular no.14 dated 25 June The Cash Flow Statement shows the structure of and changes in cash and cash equivalents during the year. Cash Flows during the period have been classified as operating activities, investing activities and financing activities Statement of changes in equity Statement of Changes in Equity has been prepared in accordance with BAS 1 Presentation of Financial Statements and following the guidelines of Bangladesh Bank BRPD circular no.14 dated 25th June Liquidity statement The basis of the liquidity statement of assets and liabilities as on the reporting date is given below: Particulars Balance with other banks and financial institutions Investments Loans and advances Fixed assets Other assets Borrowing from other banks, financial institutions & agents Deposits and others accounts Other liabilities Basis Maturity term Respective maturity terms Repayment schedule basis Useful life Realization/ amortization basis Maturity/ repayments terms Maturity term/ Previous trend Payments/ adjustments schedule basis 2.12 Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, mutilated notes, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank management for its short-term commitments Investments All investments (other than government treasury bills and bonds) are initially recognised at cost, including acquisition charges associated with the investment. Premiums are amortised and discount accredited, using the effective or historical yield method. Accounting treatment of government treasury securities and bonds (categorised as HFT or/and HTM) is made following Bangladesh Bank DOS circular letter no. 5, dated 26 May 2008 (amended on 28 January 2009) and DOS circular letter no. 2, dated 19 January Held to Maturity (HTM) Investments (financial instruments) which have fixed or determinable maturity date and the bank has no intention to sell before their maturity date irrespective of changes in market prices or the bank s financial position or performance are grouped as held to maturity. Government Treasury Bills, Government Treasury Bonds and other securities approved for statutory liquidity reserves have been classified as held to maturity financial asset Held for Trading (HFT) Investment (financial instruments) are grouped as held for trading if they have been originated, acquired or incurred principally for the purpose of selling or repurchasing them in the next term. Treasury bond and quoted shares have been grouped as held for trading instruments. Instruments under this head have been valued at market price except quoted shares. Government Treasury Bills, Bonds have been valued using marking to market concept on the basis as mentioned in note Gain/(Loss) on revaluation of held for trading instrument is recognized in the profit and loss account. Quoted shares have been presented at cost instead of market price as described in note Revaluation As per the DOS (BB) Circular letter no.-05, dated 26 May 2008 & subsequent amended circular no.-05, dated 28 January 2009, HFT (Held for Trading) securities are revalued on weekly basis and HTM (Held to Maturity) securities are amortized on yearly basis. The HTM securities are also revalued if they are reclassified to HFT category with the Board s approval. Any gain or loss on revaluation of HTM securities is recognized in the statement of changes in equity. Gain/(Loss) on revaluation of HFT securities is recognized in the profit and loss account on weekly basis and gain on revaluation is transferred to statement of changes in equity on monthly basis. 174

175 Available for sale Investments (financial instruments) in shares that have a quoted price but are not held for trading and investments in shares that are not quoted in an active market and are not held for trading are grouped as Available for sale. Financial instruments grouped under this head are presented in note 50. All shares quoted and unquoted have been presented in financial statements at cost instead of market price as described in note Quoted and unquoted shares Investments in equity instruments/shares that are not quoted in active market are not measured at fair value due to absence of information required to measure in fair value reliably; so these are presented at cost. The equity instruments that are quoted in active market are also not presented at fair value. Abnormal ups and downs have been going on in the market of quoted shares and if the shares are measured at fair value the results of financial performance will be seriously misleading for the objective of financial statements. Considering the circumstances, the principle of presenting the quoted shares in market value has been departed and that departure is replied with regulatory requirements i.e. Bangladesh Bank guideline. Provision has been made for diminution in value of shares. Details of quoted and unquoted shares are shown in annexure-c(1) and annexure-c(2) respectively Investment and related income (a) Income on investments other than shares is accounted for on accrual basis concept; and (b) Dividend income on investment in shares is accounted for in the year when right has been established Loans and advances Presentation of loans and advances i) Loans and advances are initially recognized at fair value, representing the cash advanced to the borrower plus the net of direct and incremental transaction costs and fees. They are subsequently measured at amortized cost and shown at gross amount instead of directly reducing the carrying amount of assets while interest suspense and loan loss provision against classified loans are shown under other liabilities in the Balance Sheet as per BRPD Circular no. 14, dated June 25, ii) Loans to staffs are allowed at concessional rate as approved by the authority are shown under advances as per BRPD Circular no. 14, dated 25 June Interest on loans and advances i) Interest is calculated on unclassified loans and advances and recognized as income during the year; ii) iii) iv) Interest calculated on classified loans and advances as per Bangladesh Bank Circulars is kept in interest suspense account and credited to income on realization; Interest is calculated on daily product basis but debited to the party's loan account quarterly. No interest is charged on loans and advances which are classified as bad and loss; Total balance of loans and advances as on December 31, 2014 includes bad/loss loan Tk. 32,813 million on which the Bank did not accrue any interest because of deterioration of quality of loans and advances determined by the management and on the basis of instructions contained in Bangladesh Bank Circulars as mentioned in Note of this financial statements; and v) Interest suspense and penal interest, if any, calculated on classified loans and advances are taken into income in the year of its receipt from the defaulting borrowers Provision for loans and advances Provision for loans and advances has been made on the basis of instructions contained in Bangladesh Bank BRPD Circular no.19 dated December 27, 2012, BRPD Circular no.14 & 15 dated September 23, Rate of Provision Particulars Unclassified Classified Consumer Financing Loans to All Short term SMEF BHs/ MBs/ agri credit Other Than Other HF LP HF & LP SDs Credit Standard 5% 5% 2% 2% 0.25% 2% 1% SMA 5% 5% 2% 2% 0.25% 2% 1% SS 5% 20% 20% 20% 20% 20% 20% DF 5% 50% 50% 50% 50% 50% 50% BL 100% 100% 100% 100% 100% 100% 100% Annual Report

176 Interest and discount income Interest on loans and advances, investment income and discount income are stated at gross amount as per requirement of BRPD Circular no 14 dated June 25, Written off loans and advances Loans and advances with no realistic prospect of recovery have been written off against which full provisions were made earlier and legal cases initiated but pending, except the state owned enterprises for which no legal actions have been taken. Detailed memorandum records for all such written off accounts are maintained without reducing the Bank s claim. Written off loans are calculated according to BRPD Circular no 2, dated January 13, 2003, DOS Circular no 1, dated December 29, 2004 and BRPD circular no.13, November 7, Fixed assets and depreciation a) Fixed assets are stated at cost of acquisition/valuation less accumulated depreciation. b) Depreciation is charged on straight-line method on all fixed assets at the following rates per annum: Fixed Assets Rate of depreciation Land Nil Building 2.50% Furniture and Fixture 10.00% Library Books 10.00% Motor Vehicles 20.00% Office Equipment 20.00% Electric Materials 20.00% Computer and Computer accessories 20.00% c) Depreciation at the applicable rates is charged proportionately on additions made during the year from the month of their acquisition if such assets are acquired in the first half of the month. Depreciation is charged on assets retiring during the year for the period up to the end of the month of their retirement if assets are retiring in the second half of the month. d) Upon retirement of items of fixed assets the cost and accumulated depreciation are eliminated from the accounts and the resulting gains or losses, if any, are transferred to Profit and Loss Account. e) Repairs and maintenances costs of fixed assets are treated as revenue expenditure and charged to Profit and Loss Account when they are incurred. Depreciation of premises and equipment is included in general and administrative expenses. Repairs and maintenances are charged to general and administrative expenses and improvements of fixed assets are capitalized. Gain or loss on sale of fixed assets is recognised in profit and loss statement as per provision of BAS 16 "Property, Plant and Equipment" Other Assets Provision for other assets Other assets have been classified as per BRPD Circular No. 14 dated June 25, 2003 of Bangladesh Bank and necessary provisions made thereon accordingly and for items not covered under the circular, adequate provisions have been made considering their realize ability Written off other assets Other assets having no realistic prospect of recovery have been written off against full provision without reducing the claimed amount of the Bank. Notional balances against other assets written off have been kept to maintain the detailed memorandum records for such accounts/assets Reconciliation of inter branch transactions Inter branch transactions are reconciled on a regular basis and balance of un-reconciled entries at the closing date is accounted for according to its nature Assets pledged as security The Bank has no secured liabilities except as mentioned in Note-10.2 to the financial statements and there was no asset pledged as security against liabilities Revenue recognition Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the entity. Items are treated as revenue/income when there is no existence of risk or uncertainty regarding their realize ability. 176

177 2.20 Fees and commissions The recognition of fees revenue including commissions is determined by the purpose for the fees and the basis of accounting for any associated financial instruments. Fees earned from services that are provided over a specified service period are recognized over that service period. Fees earned for the completion of a specific service or significant event are recognized when the service has completed or the event has occurred. Fees and commissions consist mainly of fees for opening of letters of credit and issuance of guarantees in BDT and in foreign currencies. Fees and commissions are charged when they become due. Commissions arising from foreign currency transactions are reported as income Interest paid and expenses In terms of the provision of the Bangladesh Accounting Standard (BAS-1) Presentation of Financial Statements, the interests and other expenses are recognized on accrual basis Retirement benefit scheme The Bank operates two alternative retirement benefit schemes for its permanent employees, elements of which are as under: a) Contributory provident fund (CPF) scheme i) Employees contribution 10%; ii) Bank's contribution 10%; iii) This fund is operated by a Board comprising of 6 Trustees and iv) Employees enjoying contributory provident fund facilities are entitled to get gratuity for 2 months last basic pay drawn for each completed year of service subject to completion of minimum 10 years of service. b) General pension fund scheme i) Pension The Bank operates a pension scheme. This fund is operated by a Board comprising of 7 Trustees. ii) Annual provision Year % of basic pay 1986 to % 1995 to % 2000 to % 2004 to % % 2007 to % % This has been named as Superannuation Fund (SAF) created for paying pension to retiring employees. The fund is shown under other liabilities head. iii) General provident fund (GPF) Employees opted for pensions are also contributing 10%-30% of basic salary as per their desire to GPF. The Bank does not contribute any amount to the GPF against these employees. The Fund is shown under Sundry Deposit Death relief grant scheme The Bank operates a Death Relief Grant Scheme since January 01, 1989, which replaced the group insurance scheme. The scheme is applicable to all employees of the Bank and payments out of this fund are made to the successors of the employees on their death while in Bank's service and quantum of payment is determined as per scale and grade of such employees Taxation The Bank recognizes the current and deferred tax in the financial statements using the provisions of the prevailing tax laws applicable in Bangladesh and as per BAS-12 (Income Taxes). Current and deferred taxes are charged or credited to equity if the tax relates to items that are charged or credited directly to equity. Status of current and deferred tax is as under: Annual Report

178 i) Past tax liability: Income Tax assessment has been finalized up to 2003, 2004 and Appeal is pending for the year 2002, 2005, 2006, 2008, 2009 and The return has been submitted for the year 2011, 2012 and The submission of tax return for the year 2014 is in process. ii) iii) 2.25 Provisions Current tax: Tk million (consolidated) has been made for provision for the year 2014 as against Tk million (consolidated) in the year Details of Tax assessment are shown annexure-f. While calculating provision for tax, Amortization of Valuation Adjustment amounting to Tk.1, million has been considered as admissible expense. Deferred tax: Deferred tax has been calculated as per Bangladesh Accounting Standard-12 Income Taxes. Calculation shows deferred tax assets of Tk. 6, million (Note - 9.6), which has been accounted for accordingly as against previous year s figure of Tk. 6, million. Difference amount of Tk million has been credited to the Profit & Loss Account. Provisions are recognized if the Bank has a present legal or constructive obligation as a result of past events, if it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimation can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation as of the Balance Sheet date, taking into account the risks and uncertainties surrounding the obligation Loan commitments No loan commitments are found to be designated at fair value through profit or loss under the fair value option. All loan commitments remain as off balance sheet item Offsetting of asset and liability The value of any asset or liability as shown in the balance sheet are not off-set by way of deduction from another liability or asset unless there exist a legal right therefore. No such incident existed during the year Financial guarantees Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other parties on behalf of customers to secure loans, overdrafts, other banking facilities and other various payments. Financial guarantees are recognized in the financial statements at fair value on the date the guarantee was given as contingent liability Events after Reporting Period As per BAS -10 "Events after Reporting Period" events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue. Two types of events can be identified: (a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and (b) those that are indicative of conditions that arose after the reporting period (no adjusting events after the reporting period) Segment reporting For the purpose of Segment Reporting as per Bangladesh Financial Reporting Standard-8 "Operating Segments", the following segments relating to revenue, expenses, assets and liabilities have been identified and shown in the related notes accordingly as primary/secondary segments. i) domestic operations in line with geographical segments; ii) banking operations comprising of branches of the banking entity; and iii) treasury operations comprising of the banking entity. Information regarding the result of each reportable segment is included in Annexure-M. Performance is measured based on segment profit before provision, as included in the internal management reports that are reviewed by the Bank s Management. Segment report is used to measure performance as Management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries Risk management Being a financial institution, in the ordinary course of business, the bank is sensitive to verities of risks. The generic severity of such risk(s) is much intense in our locality due to presence of large number of banks and complex financial transactions. In such highly competitive environment to ensure a bank s consistent system and performance, the 178

179 presence of strong Risk Management culture is obligatory. Being compliant, the bank is now looking forward to take risk management practice to a different level, i.e. preventing risk before occurrence rather than a reactive manner; on a proactive basis. As a part of regulatory and global benchmarking the bank has based upon 06 (six) core risks guidelines of Bangladesh Bank and Basel framework. Listed below are the identified risks the bank is currently managing or intents to manage in the future: Sl. No. Core Risk Guideline of BB Basel Accord Pillar 1 Credit Risk Credit Risk 2 Foreign Exchange Risk Market Risk Pillar - I & 3 Asset Liability Risk Operational Risk Pillar - II 4 Money Laundering Risk Residual Credit Risk 5 Internal Control & Compliance Risk Residual Risk (CRM) Pillar II 6 ICT Risk Residual Market Risk Equity Pillar II 7 Residual Market Risk - Currency Pillar II 8 Credit Concentration Risk Pillar II 9 Liquidity Risk Pillar II 10 Interest Rate Risk Pillar II 11 Settlement Risk Pillar II 12 Reputation Risk Pillar II 13 Strategic Risk Pillar II 14 Pension Obligation Risk Pillar II 15 Compliance Risk Pillar II Accordingly the bank has various high powered committees to monitor and ensure smooth risk management activities. For example, Management Committee (MANCOM), Asset Liability Committee (ALCO), Credit Committee (CC), Audit Committee, etc. To manage the overall risks of the bank in line of Basel the bank has formed a dedicated Core Risk Management & Basel-II Implementation Division. The details of ABL's risk management are shown in the chapter "Risk Management" Related party transactions A party is related to the company if (i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the company; has an interest in the company that gives it significant influence over the company; or has joint control over the company; (ii) the party is an associate; (iii) the party is a joint venture; (iv) the party is a member of the key management personnel of the Company or its parent; (v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or (vii) the party is a post-employment benefit plan for the benefit of employees of the company, or of any entity that is a related party of the company. Related party transaction is a transfer of resources, services, or obligations between related parties regardless a price is charged as per BAS 24- Related party disclosures. Details of related party transactions are disclosed in Annexure- A Directors' responsibilities on statement The Board of Directors takes the responsibilities for the preparation and presentation of these financial Statements Approval of financial statements The financial statements were approved by the board of directors on April 27, Annual Report

180 2.35 Credit Rating of the Bank As per the BRPD circular no. 6 dated 5 July 2006, the Bank has done its credit rating by Credit Rating Information and Services Limited (CRISL) based on the financial statements of Agrani Bank Limited dated 31 December The following ratings had been awarded: Basis of Rating Long Term Short Term Outlook As Government Entity AAA AAA ST-1 ST-1 Stable As Commercial Bank Entity A- BBB ST-2 ST-3 Stable 2.36 Compliance of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) Name of Bangladesh Accounting Standards (BAS) BAS No. Status Presentation of Financial Statements 1 Applied Inventories 2 N/A Statement of Cash Flows 7 Applied Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied Events after the Reporting Period 10 Applied Construction Contracts 11 N/A Income Taxes 12 Applied Property, Plant and Equipments 16 Applied Leases 17 N/A Revenue 18 Applied Employee Benefits 19 Applied Accounting for Govt. Grants and Disclosure of Government Assistance 20 N/A The Effects of Changes in Foreign Exchange Rates 21 Applied Borrowing Costs 23 N/A Related Party Disclosures 24 Applied Accounting & Reporting by Retirement Benefit Plans 26 Applied Consolidated and Separate Financial Statements 27 Applied Investments in Associates 28 N/A Interest in Joint Ventures 31 N/A Financial Instruments: Presentation 32 Applied* Earnings per share 33 Applied Interim Financial Reporting 34 N/A Impairment of Assets 36 Applied Provisions, Contingent Liabilities and Contingent Assets 37 Applied Intangible Assets 38 Applied Financial Instruments: Recognition and Measurement 39 Applied* Investment Property 40 N/A * Agriculture 41 N/A 180

181 Name of Bangladesh Financial Reporting Standards (BFRS) BFRS No. Status First-time Adoption of Bangladesh Financial Reporting Standards 1 Applied Share-Based Payment 2 N/A Business Combinations 3 N/A Insurance Contracts 4 N/A Non-Current Assets Held for Sale and Discontinued Operations 5 N/A Exploration for and Evaluation of Mineral Resources 6 N/A Financial Instruments: Disclosures 7 Applied* Operating Segments 8 Partly Applied Financial Instruments 9 N/A Consolidated Financial Statements 10 Applied Joined Arrangement 11 N/A Disclosure of Interest in Other Entities 12 Applied Fair value Measurement 13 Applied * Subject to departure mentioned earlier 2.37 Audit Committee Name Status with Bank Status with Committee Address Mr. Arastoo Khan Director Chairman Additional Secretary Room No. 06, Block No. 16 Planning Commission Complex Sher-E-Bangla Nagar, Dhaka. Engineer Md. Abdus Sabur Director Member Engineer and Industrialist 4, Motijheel C/A, Dhaka. Advocate Balaram Podder Director Member Eastern Arzoo Complex 61 BijoyNagar, Dhaka. Mr. Md. Altaf Hossain Molla Director Member DIG of Police (Retd.) Garden Value, Flat No. A-3 51/1, Circular Road, Dhaka. The detail of ABL's Audit Committee is given in the chapter "Report of the Board Audit Committee" General: a) Figures have been rounded off to the nearest taka. b) Prior Year s figures have been shown for comparison purposes and rearranged wherever necessary to conform to current year s presentation. c) Conversion rate is calculated based on the simple average of buying and selling rate. Annual Report

182 31-Dec-14 Taka 31-Dec-13 Taka 3 Cash 30,196,202,546 26,237,586,987 Cash and Cash Equivalent includes Libyan Currency (2,612,023) equivalent to BDT 147,579,300 which was purchased by Agrani Bank Limited before the war and revolution of 17th February in 2011 in Libya. After that war those currency were obsolete. 3.1 Cash in Hand: Local Currency 3,995,786,523 4,499,045,652 Foreign Currencies 243,227, ,185,233 4,239,014,134 4,752,230, Balance with Bangladesh Bank and its agent bank: Bangladesh Bank (Note ) 24,324,124,731 20,124,509,491 Sonali Bank Limited as agent of Bangladesh Bank (Note ) 1,633,063,681 1,360,846,611 25,957,188,412 21,485,356,102 Total (Note ) 30,196,202,546 26,237,586, Balance with Bangladesh Bank Local Currency 24,050,303,218 20,104,644,458 Foreign Currencies- Annexure-E(2) 273,821,513 19,865,033 24,324,124,731 20,124,509, Balance with Sonali Bank Limited Local Currency 1,633,063,681 1,360,846,611 Foreign Currencies - - 1,633,063,681 1,360,846, Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR): Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained as per Section 33 of the Bank Companies Act 1991 (Amended upto 2013) and BRPD Circular No (P)683/ dated As per MPD Circular No.116/ dated 23 June, 2014,of Bangladesh Bank (effective from 24 June, 2014), all scheduled banks are required to maintain a CRR minimum 6.5% on bi-weekly basis based on weekly average demand and time liabilities of two months prior to current month and minimum 6.0% on daily basis. Agrani Bank Limited has been maintaining CRR according to that policy Cash Reserve Requirement (Daily Basis) Minimum Reserve 6.0 % of Total Demand and Time Liabilities 20,572,231,000 18,007,925,300 Actual Reserve held with Bangladesh Bank 23,680,507,000 17,928,060,000 Surplus/ (Deficit) 3,108,276,000 (79,865,300) As per MPD Circular No.116/ dated 23 June, 2014, daily CRR may 6.0% on daily basis. But biweekly average amount not below 6.5% of Total Time & Demand Liabilities Cash Reserve Requirement (Bi-Weekly Average) Required 6.5 % of Average Demand and Time Liabilities 22,286,584,000 19,645,009,420 Actual Reserve held with BB (on average for last bi-weekly of December) 23,680,507,000 19,767,904,059 Surplus/(Deficit) 1,393,923, ,894,

183 31-Dec-14 Taka 31-Dec-13 Taka Statutory Liquidity Ratio (SLR) Required % of Total Demand and Time Liabilities 44,573,168,000 62,209,196,480 Actual Reserve held 126,470,463, ,915,729,140 Surplus/(Deficit) 81,897,295,000 89,706,532,660 3(a) Consolidated Cash (i) Cash in Hand: Agrani Bank Limited 4,239,014,134 4,752,230,885 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited 121,190 75,353 Agrani Exchange House Private Limited, Singapore 101,083,555 93,052,940 Agrani Remittance House SDN. BHD., Malaysia 24,381,880 35,960 Agrani Remittance House Canada Inc. 1,837,385 - Agrani Exchange Company (Australia) Pty. Limited 10,487,007-4,376,925,151 4,845,395,138 (ii) Balance with Bangladesh Bank and its agent bank : Agrani Bank Limited 25,957,188,412 21,485,356,102 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited 5,000,000 5,000,000 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,962,188,412 21,490,356,102 30,339,113,563 26,335,751,240 4 Balance with Other Banks & Financial Institutions In Bangladesh (Note - 4.1) 13,041,158,402 11,292,868,658 Foreign currencies (Outside Bangladesh) Annexure E-1 2,334,709, ,275,549 15,375,867,598 12,142,144, In Bangladesh: Local Currency Bank Al-Arafah Islami Bank Limited 1,740,761,655 4,151,159,157 First Security Islami Bank Limited - 10,000,374 Bangladesh Commerce Bank Limited 500,000,000 - Bangladesh Development Bank Limited 500,000, ,000,000 National Bank Limited - 2,000,000,000 AB Bank Limited 1,000,000, ,000 ICB Islamic Bank Limited 79,896,747 81,209,127 Comm. Bank of Ceylon 500,000 - Annual Report

184 31-Dec-14 Taka 31-Dec-13 Taka Basic Bank Ltd. 2,000,000,000 - Mercantile Bank Ltd. 500,000,000 - ICB 2,000,000,000 - Rajshahi Krishi Unnayan bank 2,000,000,000 - National Bank of Pakistan - 400,000,000 10,321,158,402 7,142,868,658 Other Financial Institutions Bangladesh Financial Investment Company Limited 400,000,000 - Fidelity Asset & Security Limited 250,000, ,000,000 First Finance & Investment Limited 200,000,000 - Lanka Bangla Limited - 50,000,000 Peoples Leasing, Finance & Investment Limited 700,000, ,000,000 Premier Leasing & Finance Ltd. 320,000, ,000,000 Reliance Finance Limited 300,000, ,000,000 Bangladesh Finance & Investment Company Limited - 200,000,000 Fareast Finance & Investment Company Limited 250,000, ,000,000 Union Capital Limited 300,000, ,000,000 Investment Corporation of Bangladesh - 2,000,000,000 2,720,000,000 4,150,000,000 13,041,158,402 11,292,868, Balance with Other Banks and Financial Institutions (Account wise): Current & Other Accounts 2,334,709, ,275,549 Fixed Deposit Receipts (FDR) 13,041,158,402 11,292,868,658 15,375,867,598 12,142,144, Maturity grouping of balances: On demand 2,334,709, ,275,549 Less than three months 8,500,000,000 2,900,000,000 More than three months but less than one year 1,821,158,402 4,242,868,658 More than one year but less than five years 2,720,000,000 4,150,000,000 More than five years ,375,867,598 12,142,144,207 4(a) Consolidated balance with other banks and financial institutions (i) In Bangladesh Agrani Bank Limited 13,041,158,402 11,292,868,658 Agrani Equity & Investment Limited 904,960 44,848,291 Agrani SME Financing Company Limited 824,412, ,370,786 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,866,476,191 12,162,087,735 Less: Inter-company transaction(s) (749,317,789) (869,219,077) 13,117,158,402 11,292,868,658 (ii) Outside Bangladesh Agrani Bank Limited 2,334,709, ,275,549 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore 44,001,825 46,088,077 Agrani Remittance House SDN. BHD., Malaysia 68,486,440 90,201,495 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 2,447,197, ,565,121 15,564,355,863 12,278,433,

185 31-Dec-14 Taka 31-Dec-13 Taka 5 Money at call and short notice Modhumoti Bank Limited - 100,000,000 Standard Bank Limited 300,000, ,000,000 Midland Bank Limited 100,000, ,000,000 Bank Al-Falah Limited - 100,000,000 Standard Chartered Bank - 850,000,000 IDLC Bangladesh Limited 100,000, ,000,000 Lanka Bangla Finance Limited 200,000, ,000,000 Bangladesh Finance & Investment Limited - 100,000,000 United Leasing Limited 100,000, ,000,000 The City Bank Limited 1,000,000,000 - Jamuna Bank Limited 500,000,000 - Mutual Trust Bank Limited 300,000,000 - One Bank Limited 200,000,000 - Com. Bank of Ceylon 350,000,000 - National Bank of Pakistan 150,000,000 - ICB 1,350,000,000 - ILFSL 100,000,000 - Union Capital Limited 80,000,000 - DBH 200,000,000-5,030,000,000 2,450,000,000 6 Investments a. Government Securities: Treasury Bills (Annexure-B 1) 36,581,326,618 29,063,071,090 Treasury Bonds (Annexure-B 2) 88,927,178,869 89,604,203,340 Prize Bonds (at cost) 14,118,150 16,148,600 Reverse REPO (Annexure-B 4) 4,061,279,810 9,568,945,494 Sub total 129,583,903, ,252,368,524 b. Other Investments: Other Bonds (Annexure-B 3) 2,408,000,000 1,997,445,000 Shares at cost (Annexure-C 1, C 2) 20,197,851,445 19,438,801,019 Debenture (at cost) (Annexure-D) 90,000, ,000,019 Sub total 22,695,851,464 21,676,246,038 Grand Total (a + b) 152,279,754, ,928,614, Maturity Grouping of Investments: On demand 14,118,150 16,148,600 Less than three months 35,383,090,242 - More than three months but less than one year 20,241,414,639 11,499,982,507 More than one year but less than five years 41,523,910,443 9,835,114,565 More than five years 55,117,221, ,577,368, ,279,754, ,928,614,562 Annual Report

186 31-Dec-14 Taka 31-Dec-13 Taka 6.2 Value of Investments: Treasury Bills: Treasury Bills (30 Days) - 9,481,902,662 Treasury Bills (91 Days) 17,988,818,263 11,975,240,904 Treasury Bills (182 Days) 11,910,804,276 1,375,308,508 Treasury Bills (364 Days) 6,681,704,079 6,230,619,016 Total Treasury Bills: 36,581,326,618 29,063,071,090 Treasury Bonds 88,927,178,869 89,604,203,340 Other Bonds 2,408,000,000 1,997,445,000 Inter Bank Reverse Repo 4,061,279,810 - Prize Bonds 14,118,150 16,148,600 Reverse REPO BB - 9,568,945,494 Debentures 90,000, ,000,019 Shares 20,197,851,445 19,438,801, ,698,428, ,865,543, ,279,754, ,928,614, Net Investments: Carrying amount 152,279,754, ,928,614,562 Less: Provision (Note ) 5,966,361,834 4,271,261,834 Net Investment 146,313,393, ,657,352, Shares at cost under Other Investments include Tk. 3,000,000,000 shares purchased under sale and buy back guarantee. The investment in shares include 6,250,000 Tk. 200 of Unique Hotel and Resorts Limited on 10 November 2010, 13,500,000 Tk. 80 of Bextex Limited on 28 November 2010 & 19,875,981 Tk of GMG Airlines on 2 February 2011 in terms of 20% return on invested amount. Later on addition 12,500,000 shares of Bextex Limited in Only the shares from GMG Airlines have been transferred in the name of the bank. Moreover the sale & buy back agreement has also expired on 31 July 2012 & hence the exercise period of the sale & buy back option has also expired. GMG Airlines has suspended its all flight operations from 30 March The market value of above shares as on 31 December 2013 was Tk. 1,151,748,795 resulting in a decrease of Tk 1,848,251,205 from the acquisition cost of investment. A provision of Tk. 1,250,000,000 has been made against such decrease. As the share prices has fallen, the guarantor has given 19,947,211 shares of Beximco Limited & 9,900,000 shares of Shine Pukur Ceramics Limited as pledge in favor of the bank totally market value was Tk. 823,470,194 as at 31 December 2013.Subsequently the bank has recovered amounting Tk. 1,000,000,000. 6(a) Consolidated investments (i) Government Securities Agrani Bank Limited 129,583,903, ,252,368,524 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,583,903, ,252,368,

187 31-Dec-14 Taka 31-Dec-13 Taka (ii) Others Agrani Bank Limited 22,695,851,464 21,676,246,038 Agrani Equity & Investment Limited 6,280,104,837 6,045,764,419 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. 26,551,800 - Agrani Exchange Company (Australia) Pty. Limited ,002,508,101 27,722,010,457 Total Investments (i+ii) 158,586,411, ,974,378,981 7 Loans and Advances 235,085,714, ,965,388, In Bangladesh and Outside Bangladesh In Bangladesh: a) Loans Rural Credits 10,632,086,366 9,720,722,200 Weavers Credits 8,268,176 8,737,435 Industrial Credits 65,454,670,742 57,094,196,696 Jute Advances 8,547,450,399 7,581,852,111 Leather Sector Advances 3,867,123,324 3,808,552,371 Staff Loans 25,985,990,394 21,288,370,374 Loan (Others) 40,194,771,053 40,359,090,377 Small and Micro Credits including SME 17,559,322,040 8,158,742, ,249,682, ,020,264,411 b) Cash credits Cash Credits 41,702,742,988 41,422,889,244 Packing Credits 1,206,040,761 1,154,745,316 Loan Against Imported Merchandise (LIM) 387,182, ,709,824 Payment Against Documents (PAD) 463,372, ,176,205 43,759,338,598 43,575,520,589 c) Overdrafts 13,592,315,597 6,052,061,755 Total (a+b+c) 229,601,336, ,647,846,755 Outside Bangladesh: 27,965, Total Loans, Cash Credit & Over Draft etc. 229,629,301, ,647,846,811 Bills Purchased & Discounted (Note ) 5,456,412,341 5,317,541,327 Total Loans and Advances 235,085,714, ,965,388, Maturity grouping of loans and advances: Repayable on Demand 24,414,825,567 4,379,627,421 Not more than 3 months 30,031,345,857 22,396,287,332 More than 3 months but not more than 1 year 66,504,243,256 71,142,172,410 More than 1 year but not more than 5 years 37,695,125,466 36,969,357,091 More than 5 years 76,440,174,051 68,077,943, ,085,714, ,965,388,138 Annual Report

188 31-Dec-14 Taka 31-Dec-13 Taka 7.3.a 7.3.b Disclosure for significant concentration Advances to allied concerns of Directors - - Advances to Managing Director - - Advances to Other Executives 16,297,172,194 15,497,621,484 Advances to Customers Group 153,333,871, ,373,569,958 Industrial Credits 65,454,670,742 57,094,196, ,085,714, ,965,388,138 Disclosure for sector-wise loans and advances Government sector 14,649,600, ,799,000 Other public sector 18,690,248,455 17,690,247,000 Private sector 201,745,865, ,033,342, ,085,714, ,965,388, c Detail of information on advances more than 10% of the Bank s Paid-up capital Powerpack Motiara Power Plant Limited 6,894,800,000 8,971,300,000 Bashundhara Group 3,493,000,000 3,374,900,000 Bangladesh Petroleum Corporation 22,346,600,000 - Dhaka Hyde & Skins Limited 2,265,300,000-34,999,700,000 12,346,200, Geographical Location - wise Loans and Advances: A. Urban: Dhaka Region 138,901,238, ,032,433,024 Chittagong Region 21,826,346,640 21,809,346,936 Khulna Region 11,569,308,287 7,554,331,317 Rajshahi Region 9,430,039,949 7,839,012,855 Barisal Region 5,515,513,937 6,333,629,884 Sylhet Region 2,240,384,838 2,177,200,704 Rangpur Region 6,427,249,397 5,705,965,197 Mymensing Region 4,849,201,724 4,098,371,950 Comilla Region 5,340,792,836 4,103,485,805 Faridpur Region 4,303,269,101 4,001,652,558 Sub Total 210,403,344, ,655,430,230 B. Rural: Dhaka Region 4,575,681,079 2,261,673,396 Chittagong Region 416,115, ,093,570 Khulna Region 3,657,293,151 3,367,599,798 Rajshahi Region 3,896,002,788 3,757,508,684 Barisal Region 2,647,071,468 2,640,916,328 Sylhet Region 1,305,567, ,195,429 Rangpur Region 2,939,281,888 2,896,339,900 Mymensing Region 2,611,108,620 2,599,806,837 Comilla Region 1,752,854,014 1,731,798,783 Faridpur Region 881,392, ,025,183 Sub Total 24,682,369,345 21,309,957,908 Total (A + B) 235,085,714, ,965,388,

189 31-Dec-14 Taka 31-Dec-13 Taka 7.5 Sector-wise Loans and Advances: Agriculture and Fishery 10,632,088,316 9,720,722,200 Jute & Jute Goods 8,547,450,399 7,581,852,111 Transport Storage & Communication 956,645,617 1,742,650,000 Ship Breakings 957,652,966 1,157,200,000 Textile & Readymade Garments 15,731,325,870 19,477,670,000 Food & Allied Industry 6,180,011,830 5,508,400,000 Construction & Engineering 2,366,746,156 1,757,500,000 Pharmaceuticals and Chemicals 1,765,014,940 3,454,193,000 Leather Sector 3,867,123,324 3,808,600,000 Power Sector 9,314,000,000 11,199,033,000 Professional and Services 2,843,394,066 2,369,495,055 Housing Service 5,270,172,449 6,382,048,590 Wholesale/Retail Trading 37,360,068,287 28,335,788,000 Personal (staff and other personal loan) 25,985,970,394 21,288,370,000 Others 103,308,049,583 79,181,866, ,085,714, ,965,388, Loans & Advances are Classified as per Bangladesh Bank Unclassified : Standard (including staff loan) 190,500,803, ,037,320,138 Special Mention Account 4,925,452,245 4,128,805,000 Classified: 195,426,256, ,166,125,138 Sub-Standard 2,785,530,397 3,800,632,000 Doubtful 4,060,536,136 4,710,268,000 Bad & Loss 32,813,391,462 27,288,363,000 39,659,457,995 35,799,263, ,085,714, ,965,388,138 The amount of loans and advances were updated from December CL as Bangladesh bank has changed classification for certain accounts and Bangladesh Bank has created provision for the amount of Tk crore. 7.7 Loans & Advances (Categories) A. Inside Bangladesh I. Continuous loan (CL-2) Small & Medium Enterprise Finance 38,887,671,929 39,889,417,000 Other Than Small & Medium Enterprise Finance 44,862,478,972 27,209,473,138 83,750,150,901 67,098,890,138 II. Demand loan (CL-3) Small & Medium Enterprise 1,693,268,653 2,401,816,000 Other Than Small & Medium Enterprise 14,552,212,339 16,085,307,000 16,245,480,992 18,487,123,000 Annual Report

190 31-Dec-14 Taka 31-Dec-13 Taka III. Term loan (CL-4) Small & Medium Enterprise Finance 12,587,488,418 18,184,704,000 Consumer Finance (including staff, other than HF) 6,755,696,362 29,298,602,000 Housing Finance (HF) 3,055,396, ,072,000 Loans for Professional Set-up Business 38,121 38,000 Others 102,225,170,518 60,201,886, ,623,789, ,854,302,944 IV. Short term agri credit and microcredit (CL-5) Short Term Agri Credit 9,310,818,268 8,504,672,000 Micro Credit 1,127,509,060 1,020,400,000 10,438,327,328 9,525,072,000 B. Outside Bangladesh (Loans, cash credits, overdrafts etc.) 27,965, Total Loans & Advances (Inside & Outside Bangladesh) (A+B) 235,085,714, ,965,388, Movement of classified loans and advances/investments Opening balance 35,799,263,000 53,801,251,059 Addition during the year 16,055,994,995 8,387,111,941 Reduction during the year (12,195,800,000) (26,389,100,000) 39,659,457,995 35,799,263, Particulars of Loans and Advances: Loans considered good in respect of which of the banking company is 205,961,858, ,017,016,974 fully secured Loans considered good against which the banking company holds no 15,793,257,991 15,834,906,830 security other than the debtor s personal guarantee Loans considered good secured by the personal undertakings of one or 13,330,597,418 14,113,464,334 more parties in addition to the personal guarantee of the debtors Loans adversely classified; for which no provision is created ,085,714, ,965,388,138 Loans due by directors or officers of the banking company or any of them 16,297,172,194 15,497,621,484 either separately or jointly with any other persons Loans due from companies or firms in which the directors of the banking - - company have interests as directors, partners or managing agents or in case of private companies as members Maximum total amount of advances including temporary advance made 16,297,172,194 15,497,621,484 at any time during the year to directors or managers or officers of the banking companies or any of them either separately or jointly with any other person Maximum total amount of advances including temporary advances - - granted during the year to the companies or firms in which the directors of the banking company have interests as directors, partners or managing agents or in the case of private companies as members Due from bank companies - - Amount of classified loan on which interest has not been charged,mentioned as follows: (Decrease) / increase in provision - - Amount of loan written off - - Amount realized against loan previously written off 377,036, ,903,152 Amount of provision kept against loan classified as bad/loss on the date 18,157,034,654 14,554,056,935 of preparing the balance sheet Interest creditable to the Interest Suspense A/c - - Cumulative amount of the written off loan 49,675,472,000 48,380,672,000 Amount written off during the current period 1,294,800,000 13,129,100,000 Amount of written off loan for which lawsuit has been filed 49,675,472,000 48,380,672,

191 31-Dec-14 Taka 31-Dec-13 Taka 7.10 Bills purchased and discounted: In Bangladesh 937,654, ,879,033 Outside Bangladesh 4,518,757,358 4,656,662,294 5,456,412,341 5,317,541, Maturity grouping of bills purchased and discounted: Payable within 1 month 5,456,412,341 5,317,541,327 Over 1 month but less than 3 months - - Over 3 months but less than 6 months months or more - - 5,456,412,341 5,317,541, Net Loans and advances: Carrying amount 235,085,714, ,965,388,138 Less: Interest suspense and penal interest 7,663,369,905 6,879,260,793 Provision for loans & advances (Note-7.10a) 22,754,555,703 19,227,487,752 30,417,925,608 26,106,748,545 Net loans and advances 204,667,788, ,858,639, a Provision for loans and advances Provision against classified loan (Note ) 19,300,120,714 16,871,531,935 Provision against unclassified loan (Note ) 3,196,546,339 2,065,035,857 Provision special mention account (Note ) 55,217,760 50,613,000 Provision for consumer financing (Note ) 202,670, ,306,960 22,754,555,703 19,227,487,752 7(a) Consolidated loans, advances and leases/investments Agrani Bank Limited 235,085,714, ,965,388,138 Agrani Equity & Investment Limited 444,665, ,424,471 Agrani SME Financing Company Limited 474,866, ,132,659 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,005,246, ,830,945,268 Less: Inter-company transaction (s) (2,150,378,418) (4,206,646,330) 233,854,867, ,624,298,938 8 Fixed assets including land, buildings, furniture and fixtures (Annexure G) Cost/ Valuation: Balance at the beginning of the year 17,038,565,807 12,868,668,204 Addition during the year 566,818, ,298,221 Revaluation during the year - (10,692,510) Disposal / Transfer during the year (161,895,229) 3,538,291,892 Balance at the end of the year 17,443,488,769 17,038,565,807 Less: Accumulated Depreciation Balance at the beginning of the year 1,790,555,762 1,487,940,980 Charge for the year 367,566, ,150,934 Adjustment for disposal / transfer (161,895,229) (11,536,152) Balance at the end of the year 1,996,227,042 1,790,555,762 Written Down Value (WDV) 15,447,261,727 15,248,010,045 Annual Report

192 31-Dec-14 Taka 31-Dec-13 Taka 8(a) Consolidated Fixed assets including land, buildings, furniture and fixtures Written Down Value (WDV) Agrani Bank Limited 15,447,261,727 15,248,010,045 Agrani Equity & Investment Limited 5,669,598 6,828,902 Agrani SME Financing Company Limited 16,075,910 7,329,164 Agrani Exchange House Private Limited, Singapore 7,738,245 5,957,164 Agrani Remittance House SDN. BHD., Malaysia 7,242,264 4,277,559 Agrani Remittance House Canada Inc. 1,322,081 - Agrani Exchange Company (Australia) Pty. Limited 446,119-15,485,755,944 15,272,402,834 9 Other Assets Investment in shares of subsidiary companies (Note - 9.1) 4,619,433,350 2,615,424,168 Stationery, stamps, printing materials etc. 95,448,004 98,966,009 Accrued Income (Note - 9.3) 2,934,917,179 3,115,055,143 Receivable From Govt. 8,180,834 10,744,751 Discount Receivable on Treasury Bills 289,400, ,796,434 Advance Deposits & prepayments 5,629, ,539,327 Advance Tax Paid (Annexure-F) 9,575,197,280 7,824,244,320 Advance Rent 368,658, ,236,819 Suspense Account (Note - 9.2) 5,463,537,479 5,284,360,176 Demonetized Notes Debit balance of Al-Rajhi Foreign Exchange 347,892, ,892,609 D.D paid without advice 941,602,365 1,259,652,746 Protested Bills 54,011,750 54,034,750 Exempted Loans 185,430, ,977,868 Interest on Exempted Loans 422,056, ,708,668 Deferred Tax Assets (Note - 9.6) 6,961,853,368 6,554,559,973 Foreign Correspondent draft paid 12,679,798 5,780,287 Indian Bank 28,550 28,550 Software Purchase 710,696, ,312,422 Valuation Adjustment (Note - 9.5) 3,989,381,639 5,318,881,639 Dividend Receivable from Preference Share 2,457,611,073 1,903,239,698 Work in Progress for Consulting of Bank building 853,371,028 - Receivable from Agrani SME Financing Company Limited 55,672,663 55,672,663 Receivable from Agrani Remittance House Canada Inc. 16,585,582 - Receivable from Agrani Exchange Company (Australia) Pty. Limited 17,740,438 - Branch Adjustment ( Note - 9.4) 1,069,011,953 (1,463,268,430) Total 41,456,028,892 35,184,840, Investment in shares of subsidiary companies Agrani Equity & Investment Limited 4,000,000,000 2,000,000,000 Agrani SME Financing Limited 600,000, ,000,000 Agrani Exchange House Pvt. Limited, Singapore 6,457,000 6,457,000 Agrani Remittance House SDN. BHD., Malaysia 8,967,168 8,967,168 Agrani Remittance House, Canada 8,217 - Agrani Exchange House Pvt. Australia 4,000,965-4,619,433,350 2,615,424,

193 31-Dec-14 Taka 31-Dec-13 Taka 9.2 Suspense Account: Sundry debtors -staff (Note - 9.2(i)) 12,212,411 11,403,922 Sundry debtors -other (Note - 9.2(i)) 907,212, ,017,595 Legal charges 251, ,188 Clearing adjustment 3,268,208 3,623,908 Advance against petty cash 20,800 9,550 Army pension (Note - 9.2(ii)) 3,840,710,506 4,157,964,417 Purchase of WES Bond 55,704,168 64,131,457 Loan application form 1,335,139 1,350,728 Civil pension 51,628,076 40,931,593 Payment against sanchaya patra 591,193, ,796,818 5,463,537,479 5,284,360, (i) Sundry debtors- staff & others and clearing adjustment An amount of Tk. 39,633,102 remain un-recovered/unadjusted over one year and that amount has been provided in the accounts. 9.2 (ii) Army Pension This represents pension paid to Army personnel by the Bank of Tk. 3,840,710,506 as per Government decision which is reimbursable and against the amount, an amount of Tk. 1,094,793,141 has been kept in sundry deposit. Moreover an amount of Tk. 1,833,114,529 has been provided in the accounts against long outstanding. 9.3 Accrued income: Accrued interest on loans & advances 63,486,027 61,072,044 Accrued interest on investment 2,461,706,378 2,570,411,255 Accrued interest on balance with Other Banks & Financial Institutions 249,825, ,263,014 Accrued commission, exchange & brokerage 109,448,187 91,538,155 Accrued other operating income 50,450,615 52,770,675 2,934,917,179 3,115,055, Branch adjustment: Debit balance Main Office Account (MO) 1,147,627,930,710 1,160,039,022,023 New General Account (NG) 1,153,288,074,744 1,155,820,275,307 Instant Financial Massaging System (IFMS) 21,258,446,698 21,258,446,698 Inter-Branch Account for Online Transactions 246,247,866, ,860,950,974 Computerized Main Office Account (CMO) 267,957,014,096 73,860,033,677 Computerized New General Account (CNG) 288,208,196, ,697,933,733 3,124,587,529,121 2,699,536,662,412 Less:- Credit balance Main Office Account (MO) 1,213,522,962,371 1,211,489,123,090 New General Account (NG) 1,102,640,774,941 1,103,647,263,748 Instant Financial Massaging System (IFMS) 21,278,495,787 21,278,495,787 Inter-Branch Account for Online Transactions 249,643,021, ,522,954,668 Computerized Main Office Account (CMO) 243,435,811,775 69,830,622,100 Computerized New General Account (CNG) 292,997,450, ,231,471,449 3,123,518,517,168 2,700,999,930,842 1,069,011,953 (1,463,268,430) During the year net balance of branch adjustment arrived as debit, the balance has been shown under head Other Assets.The Net debit balance of Branch Adjustment account arrived due to transit in responding entries. Annual Report

194 31-Dec-14 Taka 31-Dec-13 Taka 9.5 Agrani Bank Limited has taken over the entire assets and liabilities of former Agrani bank through a Vendor s Agreement executed between the Government of the People s Republic of Bangladesh and the Agrani Bank Limited on November 15, 2007 with retrospective effect from July 01, As per clause 7(2) of the said agreement assets & liabilities of Agrani Bank as on 30 June 2007 have been revalued by a professional Chartered Accountants firm to determine final value of assets & liabilities of the Bank. In determining the final value, the valuation adjustment of the Bank has been calculated at Tk.13,295,881,639 (fair value of total assets Tk.162,699,217,872 less fair value of total liabilities Tk.173,510,899,511 minus paid up share capital as purchase consideration Tk.2,484,200,000). A decision has been arrived at unanimously in a meeting of representatives from the Ministry of Finance, Government of the Peoples Republic of Bangladesh, Bangladesh Bank, Security & Exchange Commission (SEC) and three state-owned commercial banks that the valuation adjustment be shown under Other Assets and be gradually written off within the next 10 (ten) years at the maximum. 9.6 Deferred Tax: Deferred tax has been computed in accordance with provision of BAS -12 based on taxable temporary differences in the carrying amount of the assets/liabilities and their tax base as follows: i) Written down value of fixed assets a. Carrying amount (excluding land) 1,436,042,725 1,765,118,065 b. Tax base (1,392,082,334) (1,233,737,234) Taxable/(deductible) temporary difference (a-b) 43,960, ,380,831 ii) Provision for Bad & Loss Loans and Advances * a. Carrying amount (18,157,034,654) (16,810,859,427) b. Tax base - - Taxable/(deductible) temporary difference (a-b) (18,157,034,654) (16,810,859,427) iii) Temporary difference (Taxable) a. Carrying amount at balance sheet date (i.a+ii.a) (16,720,991,929) (15,045,741,362) b. Tax base (i.b+ii.b) (1,392,082,334) (1,233,737,234) Total Taxable/(deductible) temporary difference (18,113,074,263) (16,279,478,596) iv) Applicable tax rate 42.50% 42.50% v) Deferred tax assets (7,698,056,562) (6,918,778,403) Less: Adjustment for Deferred Tax Liability for revaluation of Land and Building Land (3% and 4% of taka 430,45,12,512 and taka 899,41,14, ,899, ,805,449 respectevely) Building (42.5% of total revaluation reserve of building: Tk. 58,18,89,949 ) 247,303, ,412, ,203, ,218,430 Deferred tax assets at the end of the period (6,961,853,368) (6,554,559,973) Fixed assets and provision for bad and loss loan and advances have been considered during calculation of deferred tax due to having considerable taxable temporary differences. As per calculation of Deferred Tax Assets balance for the year ended December 31, 2014 has increased by the amount of Tk which credited to profit and loss account. The carrying amount has been arrived at by estimating temporary differences (based on analysis of prior years relevant figures) on account of bad/loss debts that are likely to be written off in future years out of the year-end total amount of provision for bad and loss loans and advances Tk.8,556,544,

195 31-Dec-14 Taka 31-Dec-13 Taka 9(a) Consolidated Other Assets Agrani Bank Limited 41,456,028,892 35,184,840,777 Agrani Equity & Investment Limited 69,846,697 43,917,054 Agrani SME Financing Company Limited 38,055,294 16,027,957 Agrani Exchange House Private Limited, Singapore 8,218,601 3,680,184 Agrani Remittance House SDN. BHD., Malaysia 1,001, ,560 Agrani Remittance House Canada Inc. 1,983,088 (73,282) Agrani Exchange Company (Australia) Pty. Limited 1,709,178 (8,102,127) 41,576,843,640 35,241,086,123 Less: Inter-company transaction (s) (4,683,130,700) (2,678,417,158) 36,893,712,940 32,562,668, Borrowing from other banks including financial institutions & agents 10.1 Classification into the following broad categories: In Bangladesh 8,263,461,096 2,606,414,261 Outside Bangladesh 635,844, ,702,285 8,899,305,153 3,409,116, Segregated as: Secured (Secured by D.P Notes and agreements) 8,263,461,096 2,606,414,261 Unsecured borrowing 635,844, ,702,285 8,899,305,153 3,409,116, Maturity - wise grouping: On Demand 2,732,989,733 3,402,431,489 On Maturity 6,166,315,420 6,685,057 8,899,305,153 3,409,116, Term grouping: Short Term Borrowing T.T buy (With Sonali Bank Limited) - 210,000,000 Balance with Bangladesh Bank Foreign Currency - 409,729,204 Borrowings from Local Bank 304,310,476 1,980,000,000 Borrowings from Bangladesh Bank (Foreign Currency) 1,792,835,200 Borrowings from Bangladesh Bank (Repo) - - Credit Balance of NOSTRO Account (Annexure-E 1) 635,844, ,702,285 2,732,989,733 3,402,431, Long Term Borrowing a) From Bangladesh Bank Counter Finance Rural Housing Scheme 1,751,405 2,465,321 Borrowing from ADB 787,500 Borrowing from EGBMP 159,719,290 IFAD Loan ,383,004 2,038,003 Borrowings from Bangladesh Bank (Foreign Currency) 6,002,104,800 6,165,745,999 4,503,324 b) 5 & 7 Years Agrani Bank Shilpa Unnayan Bond 569,421 2,181,733 6,166,315,420 6,685,057 8,899,305,153 3,409,116,546 Annual Report

196 31-Dec-14 Taka 31-Dec-13 Taka 10(a) Consolidated borrowing from other banks, financial institutions and agents Agrani Bank Limited 8,899,305,153 3,409,116,546 Agrani Equity & Investment Limited 2,150,378,418 4,206,646,330 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,049,683,571 7,615,762,876 Less: Inter-company transaction (s) (2,150,378,418) (4,206,646,330) 8,899,305,153 3,409,116, Deposits and other accounts 383,921,950, ,675,167, a Deposits and Other Accounts (Category wise) Current & Other Account (Note - 11.a.1) 38,314,408,111 34,508,771,476 Bills payable (Note - 11.a.2) 5,053,940,551 4,857,198,087 Saving Bank Deposits (Note - 11.a.3) 105,079,112,225 95,237,160,403 Fixed Deposits (Note - 11.a.4) 235,474,489, ,072,037, ,921,950, ,675,167, a.1 Current & Other account Current Deposits 28,353,909,111 25,621,055,825 Balance with ATM 7,680,693 15,482,075 Sundry Deposits (Note - 11.a.1.1) 9,672,522,092 8,609,809,040 Call Deposits 280,296, ,424,536 38,314,408,111 34,508,771, a.1.1 Sundry Deposits General Provident Fund 2,338,846,924 2,125,932,061 Margin on Bills purchased 81,133, ,153,014 Margin on Letters of Credit 2,775,000,621 2,634,757,150 Margin on Letters of Guarantee 388,917, ,084,161 Miscellaneous Margin 31,417,146 14,148,081 Foreign Currency 132,331,460 46,196,380 Key Deposit 5,565,129 5,176,159 Staff Cash Security 13,381,628 8,826,662 Foreign correspondence charges 1,508,742 11,187,408 F. C Exp. Proceeds 134,788, ,850,744 Commission Payable to Govt. 37,142,237 22,571,256 Clearing Adjustment 5,465,649 20,042,468 Self Employment Promotion 368, ,

197 31-Dec-14 Taka 31-Dec-13 Taka Teachers Payment 967,704, ,614,623 Boisko Bhata 3,196,326 3,180,111 FSSAP 335,722, ,674,699 Freedom Fighter Allowance 33,026,042 11,255,693 Army Pension 1,094,793,141 1,700,774,495 Small Enterprise Development 423,789, ,864,536 Rural Finance Programme 17,663,558 1,592,050 Hajj Deposit 2,984,562 1,330,067 Others 836,576, ,799,028 Clearing Cheque Sent for Collection T24 6,636,097 - Debit Card Remote ON-US Transactions 4,343,059 - Debit Card Remote ON-US Commission 218,790-9,672,522,092 8,609,809, a.2 Bills payable Draft payable 745,205, ,407,333 TT s payable 2,062,164 2,806,865 MT s payable 17, ,626 Pay slip issued 59,051,710 72,363,446 Pay order issued 2,202,306,442 2,062,279,161 Inland Bill proceeds Awaiting for Remit. 1,382, ,084,322 Foreign Bill proceeds Awaiting for Remitt. 1,797,869,514 1,604,729,656 Overdue DD payable 19,027,373 19,139,379 Upahar cheque sold A/C 66,704 66,704 Foreign D.D, T.T, & TC payable 226,950, ,983,595 5,053,940,551 4,857,198, a.3 Saving Bank Deposits Saving Deposit -Government Organizations 1,928,817, ,771,106 Saving Deposit -Autonomous and Semi Autonomous Organizations 2,040,151,067 1,474,514,594 Saving Deposit -Non Financial Public Enterprises 134,557,801 75,678,439 Saving Deposit -Local Authority 205,899, ,078,602 Saving Deposit -Insurance Co.s & Pension Fund 640,526, ,908,132 Saving Deposit -Public Non-Banking Financial Organizations 42,896,425 33,857,638 Saving Deposit -Other Financial Public Organizations 28,836,988 22,571,727 Saving Deposit -Other Banks 13,049,873 1,276,485 Saving Deposit -Individuals and Others 98,947,762,694 91,294,482,723 Female Secondary School Assistance Project 563,140, ,841,270 Saving Deposit -Miscellaneous 235,608, ,742,792 Saving Deposit -Foreign Currency 293,251, ,437,839 Saving Deposit -Student 4,612, , ,079,112,225 95,237,160,403 Annual Report

198 31-Dec-14 Taka 31-Dec-13 Taka 11.a.4 11.a.4.1 Fixed Deposits Fixed Deposits (11.a.4.1) 153,184,568, ,489,723,900 Special Time Deposits (11.a.4.2) 45,321,580,663 46,364,507,612 Deposit Pension Scheme 74,751, ,236,841 Agrani Bank Pension Scheme 404,621, ,152,771 Month wise Fixed Deposits 2,255, ,227,449 Non Resident Special Deposits 5,677,969 3,481,336 Agrani Bank Bishesh Shanchay 13,570,026,066 10,648,320,723 Agrani Bank Monthly Income Scheme 17,533,349,091 19,092,794,237 Agrani Bank Monthly Deposit Scheme 2,578,507,133 1,554,813,900 Agrani Bank Double Benefit Scheme 2,799,152,048 3,099,778, ,474,489, ,072,037,628 Less: Inter Company Transaction 640,875, ,833,614, ,072,037,628 Fixed Deposits Fixed Deposit-Government Organizations 12,224,070,157 11,587,124,248 Fixed Deposit-Autonomous and Semi Autonomous Organizations 15,859,014,061 19,627,094,909 Fixed Deposit- Non Financial Public Enterprises 46,500,987,378 41,467,175,005 Fixed Deposit -Local Authority 861,794, ,454,760 Fixed Deposit -Insurance Co.s & Pension Funds Public 4,171,325,188 2,991,049,323 Fixed Deposit -Public Non-Banking Financial Organizations 569,220, ,424,807 Fixed Deposit -Other Financial Public Organization 2,213,716,480 7,565,036,775 Fixed Deposit -Other Banks 17,004,134,332 2,163,338,865 Fixed Deposit -Individuals and Others 53,763,838,161 45,222,327,724 Non-Resident Foreign Currency Deposit (NFCD) 12,646,129 26,964,486 Fixed Deposit -Deceased Account 3,821,450 3,732, ,184,568, ,489,723, a.4.2 Special Time Deposits Special Notice Time Deposit -Government Org. 16,135,814,920 13,243,373,030 Special Notice Time Deposit -Autonomous and Semi Autonomous 4,343,337,262 3,697,603,746 Organizations Special Notice Time Deposit -Non Financial Pub Enterprise 14,904,347,860 20,359,946,102 Special Notice Time Deposit -Local Authority 567,307, ,329,409 Special Notice Time Deposit -Insurance Co.s & Pension Funds Public 151,113, ,283,961 Special Notice Time Deposit -Public Non-Banking Financial Organizations 498,439, ,609,257 Special Notice Time Deposit -Other Deposit Accepting Public Organizations 65,261, ,374,718 Special Notice Time Deposit -Other Banks 682,022, ,993,006 Special Notice Time Deposit -Individuals and Others 7,973,936,677 7,206,994,383 45,321,580,663 46,364,507, b Maturity Grouping of Deposits and Other Accounts Repayable on demand 29,299,029,211 35,422,678,476 Repayable within 1 month 5,342,917,896 4,857,198,087 Over 1 month but within 3 months 60,139,799,943 - Over 3 months but within 1 year 70,361,499,942 1,721,961,808 Over 1 year but within 5 years 187,564,874, ,421,470,667 Over 5 years but within 10 years 31,213,829,253 74,251,858, ,921,950, ,675,167,

199 31-Dec-14 Taka 31-Dec-13 Taka 11.c Geographical Location - wise Deposits Dhaka Region 191,570,264, ,113,974,665 Chittagong Region 32,847,874,615 35,707,362,545 Khulna Region 25,097,397,370 22,609,331,092 Rajshahi Region 24,588,980,848 27,036,837,296 Barisal Region 11,686,034,528 13,028,980,374 Sylhet Region 17,157,657,488 16,705,353,312 Rangpur Region 11,479,850,356 10,233,638,471 Mymensing Region 22,724,060,684 20,151,949,525 Comilla Region 36,145,099,090 25,418,173,229 Faridpur Region 10,624,730,912 9,669,567, ,921,950, ,675,167, d Sector- wise Deposits Government Sector President, PM s Office, Ministry & Judiciary 32,800,294,881 29,698,234,627 Autonomous & Semi Autonomous Bodies 29,192,182,254 26,181,522,774 61,992,477,135 55,879,757,401 Deposit money bank 3,928,560,341 3,527,654,699 Other public sector 87,867,954,521 79,873,434,031 Private sector 230,132,958, ,394,321, ,929,473, ,795,410, ,921,950, ,675,167, e Inter-Bank Deposits Current Deposits 619,503, ,515,423 Savings Deposits 13,049,873 1,276,485 Fixed Deposits 17,004,134,332 2,163,338,866 Special Notice Time Deposits 682,022, ,993,006 Call Deposits 3,037, ,919 18,321,747,607 3,527,654,699 11(a) Consolidated Deposits and other accounts Agrani Bank Limited 383,921,950, ,675,167,594 Agrani Equity & Investment Limited 5,401,994 2,601,792 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,927,352, ,677,769,386 Less: Inter-comopany transaction(s) (749,317,789) (869,219,077) 383,178,034, ,808,550,309 Annual Report

200 31-Dec-14 Taka 31-Dec-13 Taka 12 Other Liabilities Interest suspense (Note ) 7,663,369,905 6,878,215,050 Penal interest - 1,045,743 Provision for expenses (Note ) 6,231,210,651 6,964,627,443 Provision for Auditors Fee (Note ) 3,600,000 3,000,000 Sundry creditors 1,079,224,851 1,202,726,494 Tax deducted at source 862,584, ,806,752 VAT on services 111,510, ,062,169 Excise duty 388,127, ,664,905 Levy on interest payment 97,568,679 88,615,337 Levy & Surcharge on interest payment (Bonds) 1,303, ,123 Provision for Taxation (Note & Annexure-F) 10,700,933,042 10,574,933,042 Provision for classified loans & advances (Note ) 19,300,120,714 16,871,531,935 General provision maintained against UC loan (Note ) 3,196,546,339 2,065,035,857 General provision for special mention account (Note ) 55,217,760 50,613,000 3 % General reserve for consumer financing (Note ) 202,670, ,306,960 Provision for off balance sheet exposures (Note ) 839,826,652 1,138,176,296 Payable to Islami Banking Unit 217,698 - Provision for investment (Note ) 5,966,361,834 4,271,261,834 Provision for Other Assets (Note ) 3,557,017,475 2,537,021,640 Provision for Incentive Bonus (Note ) 807,728, ,000,000 Exchange Equalization Fund - 109,100,480 Employees super annuation fund (Note ) 86,557 - Employees gratuity fund (Note ) 15,146 - Death relief grant scheme (Note ) 83,310,571 78,523,521 Employees Benevolent Fund 102,864, ,419,047 Reserve for unforeseen losses 7,298,574 7,278,112 Duty Draw back Imprest Fund 4,000 - Doctors self employment program 1,600,000 1,600,000 Collection accounts 11,126,380 4,145,397 Cash incentive to garments exporters 3,966,930 3,390,189 SPL account OPEC fund 70,508,257 70,508,242 SPL account MEDU fund 446,750, ,347,322 Govt. bond for land mortgage loan 840, ,897 Special block account SPL block account (DD,TT, MT & PO) 9,730,948 9,730,947 Unclaimed deposit 10 years & above (Note ) 2,154,839 2,143,486 Dividend Payable to Govt. 2,922 - Service charge on CIB report 37,488,930 25,419,390 Provision for balance of bilateral trade 2 2 Customer Fund Adjustment Account 99,321,872 99,551,132 Vostro Account 34,709,072 41,023,700 SIDR 389, ,114 ADIP Project Fund 21,259,405 21,544,151 Payable to ICB against sale of share - 24,399,354 Refinance Jute Fund 474,400, ,050,000 Reserve Fund for Rebate 7,884,277 - Interest waived on staff house building loan 2,106,234 4,688,449 62,482,960,876 56,431,364,

201 31-Dec-14 Taka 31-Dec-13 Taka 12.1 Interest Suspense Account: Balance at the beginning of the year 6,878,215,050 7,354,185,556 Transferred during the year (including penal interest ) 2,971,646,506 3,198,129,860 Transferred to Income during the year (1,732,409,277) (1,604,361,888) Amount waived/ written off during the year (454,082,374) (2,069,738,478) Balance at the end of the year 7,663,369,905 6,878,215, Provision for expenses: Provision for Interest on Savings 633, ,972 Provision for Interest on DPS 18,742, ,498,158 Provision for Interest on STD 6,721,683 16,042,800 Provision for Interest on FDR 4,611,608,547 5,558,627,916 Provision for Interest on ABPS 41,304,645 56,290,295 Provision for Interest on Borrowings 52,152,098 19,847,294 Provision for ABS 594,038, ,690,361 Un-disbursed Salary and Other staff benefit 1,719,760 1,604,859 Unearned discount 272,756, ,452,344 Provision for other expenses 133,642, ,389,546 Provision for Interest on ABMIS 82,310,308 94,202,973 Provision for Interest on ABMDS 161,572,974 77,812,546 Provision for Interest on ABDBS 254,007, ,040,379 Balance at the end of the year 6,231,210,651 6,964,627, Provision for Auditors Fee Balance at the beginning of the year 3,000,000 3,000,000 Paid during the year (3,000,000) (3,000,000) Provision made during the year 3,600,000 3,000,000 Balance at the end of the year 3,600,000 3,000, Provision for taxation: Balance at the beginning of the year 10,574,933,042 10,574,933,042 Transferred to Provision for Income Tax during the year 126,000,000 - Balance at the end of the year 10,700,933,042 10,574,933,042 Income Tax assessment has been finalized up to 2004 (except 2002) and appeal pending for the year 2002, 2005, The return has been submitted for the year 2008, 2009, 2010, 2011, 2012 and Considering the carry forward of losses for the year 2012 taka crore, the taxable income is negative. Therefore no tax is incurred for the year However minimum tax calculated on total income taka 4, = taka crore.however we kept provision of tk crore. The management of the Bank believes on reasonable grounds that the Bank would be successful in receiving favorable outcome from these appeal process and hence no additional provision is required for income tax Provision for Classified loans and advances: Balance at the beginning of the year 16,871,531,935 32,120,296,362 Recoveries of amount previously written off 377,036, ,903,152 Specific provision for the year 2,963,141,042 - Provision Add back during the year (9,044,797) - Transfer to Profit & Loss Account - (4,445,310,322) Less: Written off/ waived (902,543,853) (11,412,357,257) Provision held at the end of the year 19,300,120,714 16,871,531,935 Annual Report

202 31-Dec-14 Taka 31-Dec-13 Taka 12.6 General Provision maintained against UC loans: Balance at the beginning of the year 2,065,035,857 1,834,733,863 Provision made during the year 244,036, ,303,593 Provision made during the year (Writ) 1,253,300,000 - Provision add back for the year (365,826,042) (20,001,599) Provision held at the end of the year 3,196,546,339 2,065,035,857 The bank has shown some loans and advances as unclassified by dint of stay order of the Honorable High Court. But the actual position of those loans and advances is classified on the basis of objective criteria and qualitative judgment as per BRPD circular of Bangladesh Bank regarding classification and loans and advances provisioning. The bank has maintained 1% provision against those loans and advances. Consequently provision has been shortfall against writ petition loans and advances for the amount of Tk crore. Then Bangladesh Bank provides approval to maintain such provision of those loans and advances 20%, 40% and 40% in the year 2014, 2015 and 2016 respectively for the account finalization for the period General Provision for SMA Loans Balance at the beginning of the year 50,613, ,205,251 Provision made during the year 75,031,922 - Provision add back for the year (70,427,162) (446,592,251) Provision held at the end of the year 55,217,760 50,613, % General reserve for consumer financing: Reserve held at the beginning of the year 240,306, ,616,315 Additional reserve for the year - 31,690,645 Provision add back for the year (37,636,070) - Reserve held at the end of the year 202,670, ,306, Provision for Loans & Advances A) General provision i) Standard (including staff Loan) * 3,196,546,339 2,065,035,857 ii) Special Mention Accounts ( SMA) 55,217,760 50,613,000 Sub total (A) 3,251,764,099 2,115,648,857 B) Specific provision i) Substandard 267,817, ,123,000 ii) Doubtful 875,268,560 1,697,352,000 iii) Bad/Loss 18,157,034,654 14,554,056,935 Sub total (B) 19,300,120,714 16,871,531,935 Grand Total 22,551,884,813 18,987,180,792 * General provision is 1% on general loans and advances and 2% on house finance & loan for professionals under consumer financing and 3% on consumer financing Provision for off balance sheet exposure: Balance at the beginning of the year 1,138,176,296 1,124,187,533 Provision made during the Year 41,788,280 13,988,763 Provision add back during the Year (340,137,924) - Balance at the end of the year 839,826,652 1,138,176,

203 31-Dec-14 Taka 31-Dec-13 Taka Provision for Investment: Balance at the beginning of the year 4,271,261,834 3,208,098,400 Provision made during the Year 1,695,100,000 1,063,163,434 Provision add back during the Year - - Balance at the end of the year 5,966,361,834 4,271,261,834 Other Investments included Tk. 3,000 million for investment in shares under buy back agreement from Beximco Limited, GMG Airlines Limited & Unique Hotel & Resorts Limited. The buy-back agreement is expired in 2012 for the second time. Agrani Bank Limited has completed all formalities to transfer of shares purchased from the above three companies. Meanwhile only the shares of GMG Airlines Limited have been transferred in favour of Agrani Bank Limited with book value of Tk. 670 million and market value nil respectively. Therefore the other shares were not transferred in the name of Agrani Bank Limited with book value amounting to Tk. 2,330 million. It is to be considered here that the shares of GMG Airlines are unquoted and the operation of the business has already been suspended in The bank has created lien on shares from Beximco Limited & Shine Pukur Ceramics Limited with market value of Tk million against the above shares. In addition the Bank has maintained a provision against fall in market value of shares on net off basis (including Beximco Limited, GMG Airlines Limited & Unique Hotel & Resorts Limited shares) for the amount of Tk. 5,966 Million (2013: crore and 2014: crore) instead of Tk. 6,003 Million Provision for Other Assets: Protested bill (Note a) 54,011,750 54,034,750 Sundry Debtors Staff & Others 39,633,102 27,262,123 Clearing Adjustment 1,465, ,939 Suspense Accounts Army Pension Paid 1,833,114,529 1,418,113,849 Legal Charges 251, ,933 CBL Pak A/c 2 2 BCCI Bank-London (Note b) 13,783,099 13,783,099 Bank of Ceylon 500, ,000 Balance with Al-Rajhi Foreign Exchange 347,892, ,892,609 Fixed Assets 21,913,328 21,913,328 Branch Adjustment (Note c) 505,884,000 5,884,000 Agri credit exemption on river erosion 1,176,472 1,176,472 Exempted Loans & Interest on Exempted Loans (Note d) 600,146, ,686,536 Provision for DD Paid without Advice 36,845,393 - Dividend receiveable from Preference Share 100,400,000-3,557,017,475 2,537,021,640 The Bank has maintained provision against other assets Tk crore. But as per Bangladesh Bank provision has to be maintained against other assets for the amount of Tk crore. Therefore provision has been shortfall against others assets for the amount of Tk crore. Then Bangladesh Bank provides approval to maintain provision against other assets for Tk crore in the year 2014 and remaining balance (Investment & Branch adjustment) in the next year for account finalization for the period a Provision for protested bills Balance at the beginning of the year 54,034,750 48,958,322 Credited during the Year 19,999 Addition during the Year 7,001 5,076,433 Provision add back during the year (50,000) (5) Balance at the end of the year 54,011,750 54,034,750 Protested Bills arises due to accidental loss of fraud, robbery, theft etc. Annual Report

204 31-Dec-14 Taka 31-Dec-13 Taka b Provision for balance with BCCI Bank- London Balance at the beginning of the year 13,783,099 17,307,731 Amount debited during the Year - - Provision add back during the year (3,524,632) Balance at the end of the year 13,783,099 13,783, c Provision for Branch Adjustment Balance at the beginning of the year 5,884,000 5,884,000 Provision made during the year 500,000,000 - Provision add back during the year - - Balance at the end of the year 505,884,000 5,884,000 Other Assets include a net debit balance of Tk 1,069,011,953 as Branch Adjustment (such amount at 31 December 2013 was net credit balance of Tk 1,463,268,430). While the full reconciliation process in underway, the Bank has made provision for Tk crore. Rest amount will be kept in the year 2015 as per Bangladesh Bank instruction d Provision for Exempted Loans & Interest on Exempted Loans Balance at the beginning of the year 644,686, ,471,729 Amount debited during the Year (3,444,498) (84,262,098) Amount Credited during the Year - - Provision made during the year - 83,476,905 Provision add back during the year (41,095,885) - Balance at the end of the year 600,146, ,686, Incentive Bonus: Balance at the beginning of the year 750,000, ,022,169 Amount debited during the Year (692,689,117) (598,918,771) Amount Credited during the Year 417, ,896,602 Add back from provision for incentive bonus of Provision for the Year 750,000, ,000,000 Balance at the end of the year 807,728, ,000, Employees Super Annuation Fund Balance at the beginning of the year - - Amount credited during the year 86,557 - Amount Transffered to SB A/C - - Amount of pension paid during the year - - Balance at the end of the year 86, Employees Gratuity Fund Balance at the beginning of the year - - Amount credited during the year 4,430,233 - Amount Transffered to SB A/C (4,415,087) - Amount of Gratuity paid during the year - Balance at the end of the year 15,

205 31-Dec-14 Taka 31-Dec-13 Taka Death relief grant scheme: Balance at the beginning of the year 78,523,521 83,759,771 Transferred to the A/c during the year 12,512,050 12,513,750 Amount paid/adjusted during the year (7,725,000) (17,750,000) Balance at the end of the year 83,310,571 78,523, As per section 35 of the Bank Companies Act 1991, this amount should be transferred to Bangladesh bank on completion of the formalities mentioned in this section. 12(a) Consolidated other liabilities Agrani Bank Limited 62,482,960,876 56,431,364,699 Agrani Equity & Investment Limited 1,460,748,158 1,200,691,536 Agrani SME Financing Company Limited 179,194, ,747,107 Agrani Exchange House Private Limited, Singapore 45,359,585 44,516,262 Agrani Remittance House SDN. BHD., Malaysia 28,478,828 24,701,867 Agrani Remittance House Canada Inc. 44,484,554 - Agrani Exchange Company (Australia) Pty. Limited 31,482,363-64,272,708,512 57,872,021,471 Less: Inter-company transaction(s) (63,697,350) (62,994,790) 64,209,011,162 57,809,026, Share Capital: 13.1 Authorized Capital: The authorized capital of the Bank is Tk.2, crore divided into 250,000,000 ordinary shares of Tk each Issued, subscribed and fully paid up capital : 20,722,940,400 20,722,940,400 The paid up capital of the Bank was Tk. 9,912,940,400 divided into 99,129,404 ordinary Tk up to 29 December On 26 December 2013, Bank &Financial Institution Department, Finance Ministry has issued a letter# for the permission to raise paid up capital by Tk. 10,810,000,000 to reduce capital shortage of the bank. Subsequently, the bank approved the matters by the Board of Directors in 353rd board meeting which has been held on 30 December The amount of increased paid up capital has been distributed to the Government of the People s Republic of Bangladesh represented by Secretary, Finance Division, Ministry of Finance of the Government of the People s Republic of Bangladesh. Therefore, the paid up capital of the bank has increased to Tk. 20,722,940,400 by issuing 108,100,000 right shares means total ordinary shares are 207,229, Earnings Per Share: Earnings per share (EPS) have been computed by dividing the profit after tax by the weighted average number of ordinary shares as on 31 December The bank has raised paid up capital by issuing 108,100,000 right shares on 30 December The issue of right share s effect is considered for calculation of weighted average number of shares for the year Weighted average number of shares: Number of shares before bonus share and right share issued 99,129,404 99,129,404 Right share issued in ,100,000 - Weighted average number of shares 207,229,404 99,129,404 Annual Report

206 31-Dec-14 Taka 31-Dec-13 Taka Basic Earnings Per Share: Profit attributable to the shareholders of ABL for the year (A) 1,986,144,764 9,048,998,601 Weighted average number of ordinary shares outstanding (B) 207,229,404 99,129,404 Earnings per share (A/B) (a) Consolidated Earnings Per Share: Profit attributable to the shareholders of ABL & its subsidiaries for the year (A) 2,064,869,500 9,215,995,245 Weighted average number of ordinary shares outstanding (B) 207,229,404 99,129,404 Earnings per share (A/B) Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-II): Amount in Crore A. Eligible Capital: 1. Tier-1 (Core Capital ) 1, , Tier-2 (Supplementary Capital) 1, Tier-3 (eligible for market risk only) Total Eligible Capital (1+2+3): 2, , B. Total Risk Weighted Assets (RWA): 25, , C. Capital Adequacy Ratio (CAR) (A4 / B) X % 10.04% D. Core Capital to RWA (A1 / B) X % 5.67% E. Supplementary Capital to RWA (A2 / B) X % 4.37% F. Minimum Capital Requirement (10% of RWA) 2, , G. Capital Surplus / (Shortfall) Capital Requirements Required Held Required Held Tier % 6.13% 5.00% 5.71% Tier % 4.31% 5.00% 4.48% Tier Total 10.00% 10.44% 10.00% 10.19% 13.4(a) Consolidated Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-II): Amount in Crore A. Eligible Capital: 1. Tier-1 (Core Capital ) 1, , Tier-2 (Supplementary Capital) 1, Tier-3 (eligible for market risk only) Total Eligible Capital (1+2+3): 2, , B. Total Risk Weighted Assets (RWA): 25, , C. Capital Adequacy Ratio (CAR) (A4 / B) X % 10.19% D. Core Capital to RWA (A1 / B) X % 5.71% E. Supplementary Capital to RWA (A2 / B) X % 4.48% F. Minimum Capital Requirement (10% of RWA) 2, , G. Capital Surplus / (Shortfall) Capital Requirements Required Held Required Held Tier % 6.03% 5.00% 5.71% Tier % 4.29% 5.00% 4.48% Tier Total 10.00% 10.32% 10.00% 10.19% 206

207 31-Dec-14 Taka 31-Dec-13 Taka 13.5 Eligible Capital: Amount in Crore Tier-1 (Core Capital) Fully Paid-up Capital / Capital lien with BB 2, , Statutory Reserve General Reserve Retained Earnings (11.74) (224.93) Sub-Total: 2, , Deductions from Tier-1 (Core Capital ) Book Value of Goodwill and contingent assets which are shown as assets Investments in Subsidiaries which are not consolidated - - Shortfall in provisions required against classified loans - - Other (if any item approved by Bangladesh Bank) Sub Total 1, , Total Eligible Tier-1 Capital 1, , Tier-2 (Supplementary Capital) General Provision (UC + SMA + Off B/S exposure+ Consumer Finance) Assets Revaluation Reserves up to 50% Revaluation Reserve for Approved Securities (ICB Share) up to 50% Revaluation Reserve for Equity Instrument up to 10% Other (Balance of Exchange Equalization A/C) - - Sub-Total 1, Deductions (Investments in Subsidiaries which are not consolidated) - - Total Eligible Tier-2 Capital 1, Tier-3 (Eligible for market risk only) Short-term subordinated debt - - Total Supplementary Capital 1, Total Eligible Capital 2, , (a) Consolidated Eligible Capital: Tier-1 (Core Capital) Fully Paid-up Capital / Capital lien with BB 2, , Statutory Reserve General Reserve Retained Earnings (32.76) (251.80) Sub-Total: 2, , Deductions from Tier-1 (Core Capital ) Book Value of Goodwill and contingent assets which are shown as assets (Note No (a1) Investments in Subsidiaries which are not consolidated - - Shortfall in provisions required against classified loans - - Other (if any item approved by Bangladesh Bank) Sub Total 1, , Total Eligible Tier-1 Capital 1, , Annual Report

208 31-Dec-14 Taka 31-Dec-13 Taka Tier-2 (Supplementary Capital) General Provision (UC + SMA + Off B/S exposure+ Consumer Finance) Assets Revaluation Reserves up to 50% Revaluation Reserve for Approved Securities (ICB Share) up to 50% Revaluation Reserve for Equity Instrument up to 10% Other (Balance of Exchange Equalization A/C) Sub-Total 1, Deductions (Investments in Subsidiaries which are not consolidated) - - Total Eligible Tier-2 Capital 1, Tier-3 (Eligible for market risk only) Short-term subordinated debt - - Total Supplementary Capital 1, Total Eligible Capital 2, , Risk Weighted Assets (RWA): Risk Weighted Assets (RWA) for Amount in Crore A. Credit Risk On - Balance sheet 18, , Off - Balance sheet , , B. Market Risk 3, , C. Operational Risk 2, , Total: RWA (A+B+C) 25, , (a) Consolidated Risk Weighted Assets (RWA): Amount in Crore Risk Weighted Assets (RWA) for A. Credit Risk On - Balance sheet 18, , Off - Balance sheet , , B. Market Risk 3, , C. Operational Risk 2, , Total: RWA (A+B+C) 25, , Statutory Reserve Balance at the beginning of the year 5,518,411,707 4,139,818,028 Transferred during the year 340,970,274 1,378,593,679 Closing balance 5,859,381,981 5,518,411,707 This has been made in accordance with Section 24 of the Bank Companies Act, 1991 and shall be maintained until it equals to the Paid-up Capital. 208

209 31-Dec-14 Taka 31-Dec-13 Taka 14(a) Consolidated Statutory Reserve Agrani Bank Limited 5,859,381,981 5,518,411,707 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited 25,393,563 13,348,483 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 5,884,775,544 5,531,760,190 Minority interest Total 5,884,775,514 5,531,760, General Reserve 5,000,000 5,000,000 15(a) Consolidated General Reserve Agrani Bank Limited 5,000,000 5,000,000 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited 54,731,264 54,731,329 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 59,731,264 59,731,329 Minority interest Total 59,731,198 59,731, Asset Revaluation Reserve Balance at the beginning of the year 11,070,315,483 7,532,023,591 Transferred during the year - 3,538,291,892 11,070,315,483 11,070,315,483 16(a) Consolidated asset revaluation reserve Agrani Bank Limited 11,070,315,483 11,070,315,483 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,070,315,483 11,070,315, Revaluation & Amortization Reserve Balance at the beginning of the year 573,572, ,176,049 Adjustment (573,572,162) (117,176,049) Surplus of Amortization of Securities (HTM) 271,678, ,468,251 Revaluation reserve on investment in Govt. Securities (HFT) 1,754,650, ,103,911 Closing Balance 2,026,328, ,572,162 Annual Report

210 31-Dec-14 Taka 31-Dec-13 Taka 17(a) Consolidated revaluation and amortization Agrani Bank Limited 2,026,328, ,572,162 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 2,026,328, ,572, Retained surplus Opening Balance (2,249,303,875) (14,543,481,897) Prior Year Adjustment 109,694,416 (6,136,834) Add: Transfer from provision 377,081,599 4,629,909,934 Add: Net profit after tax during the year 1,986,144,764 9,048,998, ,616,904 (870,710,196) Appropriation Statury Reserve 340,970,274 1,378,593, ,970,274 1,378,593,679 (117,353,370) (2,249,303,875) 18(a) Consolidated Retained surplus Agrani Bank Limited (117,353,370) (2,249,303,875) Agrani Equity & Investment Limited (815,336,588) (840,156,521) Agrani SME Financing Company Limited 499,212, ,109,049 Agrani Exchange House Private Limited, Singapore 109,225,641 95,204,752 Agrani Remittance House SDN. BHD., Malaysia 63,666,478 25,187,879 Agrani Remittance House Canada Inc. (12,798,417) (73,251) Agrani Exchange Company (Australia) Pty. Limited (22,841,024) (8,102,127) (296,224,813) (2,526,134,094) Less: Minority Interest 2, Foreign Currency Translation Reserve 31,356,243 - (327,583,966) (2,526,134,204) 19 Foreign Currency Translation Reserve Opening Balance 39,054,011 26,354,830 Add: Foreign Currency Translation Gain/(Loss) (7,697,768) 12,699,181 Closing Balance 31,356,243 39,054, Minority Interest Capital of Agrani Equity & Investment Limited 2,000 1,000 Capital of Agrani SME Financing Limited Statutory reserve General reserve Retained earnings ,007 1,

211 31-Dec-14 Taka 31-Dec-13 Taka 21 Acceptances and endorsements (contingent liabilities) Letters of Guarantee (Note ) 10,554,398,823 7,940,625,312 Letters of Credit 38,751,002,780 71,925,073,113 Bills for Collection (Note ) 22,643,450,000 22,132,178,037 Other Contingent Liabilities (Note ) 4,434,512,601 4,026,083,099 Claims against the bank not acknowledged as debt 7,599,301,000 7,793,670,000 83,982,665, ,817,629, Letters of Guarantee Claims lodged against the bank company, which is not recognized as debt - - Bank is contingently liable in respect of guarantee given favoring: Directors - - Government 152,224, ,415,135 Banks and other financial institutions 500,881, ,184,817 Foreign Banks against government counter guarantee 5,499,775,638 2,122,889,500 Others 4,401,518,059 4,514,135,860 10,554,398,823 7,940,625, Bills for collection: Payable in Bangladesh 976,542, ,333,972 Payable outside Bangladesh 21,666,907,625 21,509,844,065 22,643,450,000 22,132,178, Other Contingent Liabilities: Inland Travelers Cheque 40,415,500 41,367,782 Upahar Cheque 2,376,400 2,358,600 Shanchay Patra 3,721,070,701 3,293,656,717 Agrani Bank Shilpa Unnayan Bond 670,650, ,700,000 4,434,512,601 4,026,083,099 Liability will be created for the Bank by the sales amount of Inland Travelers Cheque, Upahar Cheque, Shanchay Patra and Agrani Bank Shilpa Unnayan Bond, as such as saleable price of present stock of such instruments have been considered as contingent liabilities Geographical Location - wise Contingent Liabilities: Dhaka Region 64,255,428, ,638,444,703 Chittagong Region 6,103,534,011 3,561,006,801 Khulna Region 990,003, ,134,491 Rajshahi Region 858,507, ,854,233 Barisal Region 275,084,030 1,108,029,844 Sylhet Region 66,396, ,206,529 Rangpur Region 1,208,505, ,465,891 Mymensing Region 63,853,768 96,649,566 Comilla Region 2,483,568, ,682,899 Faridpur Region 78,481, ,154,604 76,383,364, ,817,629,561 Annual Report

212 31-Dec-14 Taka 31-Dec-13 Taka 22 Consolidated Contingent Liabilities Agrani Bank Limited 83,982,665, ,817,629,561 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,982,665, ,817,629, Interest Income a. Interest on Loans and Advances: Interest on Rural Credit 781,931, ,287,921 Interest on Weavers Credit 60, ,063 Interest on Industrial Credit 7,140,903,737 6,254,379,883 Interest on Jute Advance 882,196, ,833,099 Interest on Leather Credit 353,538, ,821,490 Interest on Staff Loans 959,359, ,497,141 Interest on Loan-Others 3,715,253,446 4,953,642,034 Interest on Small and Micro Credit 1,076,257, ,141,007 Interest on Overdrafts 905,239,509 1,199,895,654 Interest on Cash Credit 5,872,873,044 5,704,330,507 Interest on Packing Credit 101,187,704 95,736,696 Interest on Loan against Impo. Merchandise 77,552,476 86,335,853 Interest on Payment Against Document 68,524, ,634,899 Interest on Foreign Bills Purchased 99,464,078 94,356,727 Interest on Inland Bills Purchased 19,919,887 75,421,487 Interest on Foreign Currency Loan 8,264,255 - Sub-total 22,062,526,123 22,760,875,461 b. Interest on Balance with other Banks and Financial Institution: Interest on call loans to Banks 331,984, ,918,519 Interest received from local banks 1,000,083, ,501,913 Interest received from foreign banks 235,561 - Sub-total 1,332,303,393 1,186,420,432 Total (a+b+c) 23,394,829,516 23,947,295, Geographical Location - wise Interest income: Dhaka Region 14,893,034,723 14,877,242,445 Chittagong Region 1,676,534,507 2,585,549,911 Khulna Region 1,268,061,712 1,085,591,604 Rajshahi Region 1,227,729,513 1,207,857,285 Barisal Region 589,189, ,087,062 Sylhet Region 215,537, ,104,248 Rangpur Region 1,016,765, ,480,323 Mymensing Region 715,891, ,728,301 Comilla Region 1,197,406, ,618,929 Faridpur Region 594,678, ,035,785 23,394,829,516 23,947,295,

213 31-Dec-14 Taka 31-Dec-13 Taka 23(a) Consolidated Interest Income Agrani Bank Limited 23,394,829,516 23,947,295,893 Agrani Equity & Investment Limited 5,431,309 25,119,813 Agrani SME Financing Company Limited 153,775, ,995,639 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,554,036,651 24,098,411,345 Less: Inter-company transaction(s) (202,156,692) (284,229,876) 23,351,879,959 23,814,181, Interest paid on deposits & borrowings a. Interest paid on Deposits Savings Deposits 2,528,113,476 2,355,638,501 Special Time Deposits 1,551,237,866 1,309,169,334 Fixed Deposits 13,507,366,050 14,524,056,685 Deposit Pension Scheme 107,306, ,450,940 Interest on staff provident fund 264,409, ,241,840 Interest on Cash Security 6,999 Interest paid on NFCD 4,985,378 - Interest paid on ABPS 26,448,400 36,112,476 Interest on month-wise fixed deposits 40,398,384 2,084,643 Interest on ABS 905,247, ,081,060 Interest on MDS 225,094,531 2,217,731,921 Interest on MIS 2,257,266, ,759,192 Interest on ADBS 324,376, ,710,859 Sub Total 21,742,257,690 21,890,037,451 b. Interest paid to Banks Foreign Banks 199,127, ,170,241 Bangladesh Bank 62,040,874 23,587,673 Other Banks 121,704, ,217,385 Sub Total 382,873, ,975,299 c. Interest paid on Borrowings Call Borrowings 21,482, ,704,852 Agrani Bank Shilpa Unnayan Bond - 270,120 Discount on T.T sold 6,244,254 6,292,031 Other Borrowings 29,331, ,764,694 Payment of intt. Against purchase of shares & securities 26,778,453 Sub Total 83,836, ,031,697 Total (a+b+c) 22,208,967,988 22,682,044,447 Annual Report

214 31-Dec-14 Taka 31-Dec-13 Taka 24(a) Consolidated Interest paid on deposits & borrowings Agrani Bank Limited 22,208,967,988 22,682,044,447 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,208,967,988 22,682,044,447 Less: Inter-company transaction(s) (202,156,692) (284,229,876) 22,006,811,296 22,397,814, Investment income Interest on Debenture 26,878,148 31,749,560 Dividend on Shares 2,523,752,013 1,327,905,783 Dividend on Preferance Shares - 450,000,000 Discount on 5, 10,15 & 20 years Govt. Bond 845,684 31,300,650 Interest on 25 years Govt. jute bond 14,756,326 18,139,688 Interest on 5,10,15 & 20 years govt. treasury bond 5,450,665,414 5,484,247,385 Discount on Bangladesh bills & treasury bills 1,882,235,607 1,170,451,370 Govt. Treasury Bond (BPC) 2,054,506,137 1,567,224,825 Govt. Treasury Bond (BJMC) 305,930, ,091,835 Prime Bank Bond 20,700,000 20,558,065 Mutual Trust Bank Bond 36,295,891 35,457,805 National Bank Bond 18,433,748 22,927,885 BRAC Bank Subordinated Bond 116,452, ,043,151 United Commercial Bank Subordinated Bond 41,609,588 28,855,480 One Bank Subordinated Bond 68,825, ,151 AB Bank Subordinated Bond 18,986,302 - South East Bank Subordinated Bond 4,777,397 - Orascom Telecom BD Bond 12,459,246 28,894,008 Northern Power Solutions Ltd. Bond 8,831,702 70,403,385 Interest on Reverse REPO 282,133,606 75,199,957 Profit on Sale of Shares 4,961,498 15,673,362 Profit on Sale of Securities 117,035, ,950,199 13,011,071,419 11,140,067,544 The above investment incomes were earned from Dhaka region only. 25(a) Consolidated Investment Income Agrani Bank Limited 13,011,071,419 11,140,067,544 Agrani Equity & Investment Limited 401,608, ,787,362 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,412,680,064 11,480,854,

215 31-Dec-14 Taka 31-Dec-13 Taka 26 Commission, exchange earnings & brokerage Commission on bills (Foreign & Inland) 60,297,039 77,711,318 Commission DD, TT & MT (Local) 130,419, ,152,527 Commission on DD, TT, TC (Foreign) 21,012,049 41,858,920 Commission on Letters of Guarantee (Local) 83,808,965 98,319,686 Commission on Travelers Cheque 61,028 - Commission on Letters of Guarantee (Foreign) 73,527,851 18,398,963 Commission on Letter of Credit 952,548,288 1,068,907,194 Commission on Underwriting 17,421,735 16,721,478 Commission on Export bill 107,546,738 92,813,418 Commission on LIM 4,504,914 4,421,105 Commission on Army Pension Paid 2,234,339 18,316 Commission on Food procurement Bills 117,927,849 86,773,749 Foreign correspondence charges 10,791,949 - Exchange account foreign currency 2,406,191,894 3,255,961,803 Commission on Sanchay patra 25,656,990 19,666,380 Fees & Comm. For Debit Card 177,065 - Consortium/Syndication Fee 35,836,414 36,132,299 Loan processing fee 37,671,908 37,881,969 Discount on bills - 11,694 Commission on Miscellaneous 250,933, ,505,942 4,338,569,554 5,142,256, Geographical Location - wise Commission, Exchange and brokerage: Dhaka Region 3,669,066,276 4,523,845,793 Chittagong Region 127,825, ,083,602 Khulna Region 76,017,669 68,437,227 Rajshahi Region 83,909,635 82,605,763 Barisal Region 26,191,503 56,131,987 Sylhet Region 19,614,964 22,933,488 Rangpur Region 101,219,076 70,246,690 Mymensing Region 52,740,203 58,072,948 Comilla Region 161,062, ,780,643 Faridpur Region 20,922,135 24,118,620 4,338,569,554 5,142,256,761 26(a) Consolidated Commission, Exchange and Brokerage: Agrani Bank Limited 4,338,569,554 5,142,256,761 Agrani Equity & Investment Limited 5,215,949 5,848,117 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore 95,408,825 - Agrani Remittance House SDN. BHD., Malaysia 34,369,015 - Agrani Remittance House Canada Inc. 620,676 - Agrani Exchange Company (Australia) Pty. Limited 562,750-4,474,746,769 5,148,104,878 Less: Inter-company transaction(s) (8,750) - 4,474,738,019 5,148,104,878 Annual Report

216 31-Dec-14 Taka 31-Dec-13 Taka 27 Other operating income Rent on Immovable Properties & Godown 2,495,105 2,799,333 Rent on SD Lockers 7,120,837 6,090,462 Profit on sale of other assets 5,059,463 1,661,291 Postage Recoveries 74,914,435 87,155,562 Telegram Recoveries 2,821,837 5,972,458 Trunk-call Recoveries 2,254,800 6,193,202 Account Maintenance Fee 483,651, ,740,169 Remittance 10,377,696 17,597,885 Insurance Recoveries 600, Service charge on rural credit 122,463 53,337 Service charge on Weavers/ Hosiery credit 1,145 - Service charge on Industrial credit 186,018 - Service charge on other credit 108,060,732 77,486,136 Sales proceeds on loan application form 1,699,513 2,174,454 Annual Charges on deposit A/C 40,655,266 51,053,225 Annual Charges on Loan A/C 582,669 - Service Charges on FSS (Female Student Scholarship) 82,011,166 67,874,690 Remuneration received from Sanchaya Patra 2,165,442 1,363,810 Sale of LC/Export/Schedule form and tender Schedule 4,522,063 4,971,323 Telephone, Telex & Swift charges 49,786,295 66,396,162 Account Closing Charge 10,224,262 10,464,782 Rebate received from Foreign bank 16,530,657 19,715,201 Proceeds realization certificate charges 6,041,381 4,688,846 Service Charges on Civil Pension paid 1,783,021 2,178,368 Electronic Govt. Procure (e-gp) 2,591,810 - Service Charges on Deposit A/C 47,821,898 53,707,768 SD Trading Comm ,082, ,338,679 27(a) Consolidated Other Operating Income Agrani Bank Limited 964,082, ,338,679 Agrani Equity & Investment Limited 634,046 1,123,531 Agrani SME Financing Company Limited 192,210 4,356,860 Agrani Exchange House Private Limited, Singapore 4,371,827 95,638,962 Agrani Remittance House SDN. BHD., Malaysia 1,902,463 33,142,335 Agrani Remittance House Canada Inc. 538,491 - Agrani Exchange Company (Australia) Pty. Limited 38,658 4, ,760,192 1,039,604,670 Less: Inter-company transaction(s) (627,546) (40,732) 971,132,646 1,039,563,

217 31-Dec-14 Taka 31-Dec-13 Taka 28 Salary and allowance etc. Salaries- officers 1,946,121,873 1,743,310,625 Salaries- staff 342,648, ,901,815 Dearness allowance (Officers & Staff) 441,521, ,885,302 Fringe Benefit (Officer & Staff) 16,839,930 - Bonus (officers & Staff) 365,714, ,860,074 Banks contribution to provident fund 58,203,341 47,624,899 Banks contribution to employees pension fund 793,661, ,490,765 Banks contribution to gratuity fund 112,309,626 69,391,900 Conveyance allowances 3,279,244 3,463,203 Entertainment allowances 1,557,476 1,418,113 Children education allowances 24,715,476 25,093,535 Hill Allowances 3,458,135 3,177,475 Honorarium & Fees 8,463,398 9,502,131 Medical Expenses 2,979,513 2,824,080 Medical Expenses consultation fees 1,470, ,600 Medical allowances 109,552, ,037,089 Uniform and other apparels 19,321,341 14,056,054 Overtime expenses 13,643,240 13,901,302 Staff income tax 1,300,000 31,324,452 Compensatory/On-sight Supervision Allowances 14,778,063 2,952,421 Lunch subsidy/iftar Coupon 613,703, ,641,280 Sports and cultural activities 13,021,000 17,094,300 House rent allowances (officers) 839,989, ,103,973 House rent allowances (staff) 166,729, ,248,422 Wages paid to temporary employees 44,179,438 87,065,013 Death relief grant scheme 12,771,204 12,744,032 Staff transport fare 27,767,842 28,617,724 Police & Ansar Expenses 146,932, ,350,884 Ex-Gratia (1,176) 30,902 DMD Allowances 909, ,700 Other allowances 17,008,943 14,488,820 6,164,550,821 5,312,298,885 28(a) Consolidated Salary and Allowance etc. Agrani Bank Limited 6,164,550,821 5,312,298,885 Agrani Equity & Investment Limited 7,553,122 7,566,925 Agrani SME Financing Company Limited 42,890,257 44,135,498 Agrani Exchange House Private Limited, Singapore 33,382,608 38,676,329 Agrani Remittance House SDN. BHD., Malaysia 18,445,488 10,019,254 Agrani Remittance House Canada Inc. 6,225,771 - Agrani Exchange Company (Australia) Pty. Limited 8,759,325 1,493,019 6,281,807,392 5,414,189,910 Annual Report

218 31-Dec-14 Taka 31-Dec-13 Taka 29 Rent, taxes, insurance, lighting etc. Rent on Premises 450,404, ,976,817 Rent on Godown 4,135,859 3,233,723 Lighting Charges 78,565,373 65,670,165 Insurance Charges on vehicles 5,855,764 6,178,647 Insurance Charges on property 1,283,965 1,737,180 Rates,Taxes, Ceases 27,352,993 21,485,580 Taxes on Immovable Property 105, ,007 Insurance Charges on Deposits 193,230, ,738, ,934, ,232,441 29(a) Consolidated rent, taxes, insurance, lighting etc. Agrani Bank Limited 760,934, ,232,441 Agrani Equity & Investment Limited 3,346,078 3,275,148 Agrani SME Financing Company Limited 4,162,332 3,229,943 Agrani Exchange House Private Limited, Singapore 20,279,311 20,890,867 Agrani Remittance House SDN. BHD., Malaysia 5,583,858 2,202,376 Agrani Remittance House Canada Inc. 4,763,360 - Agrani Exchange Company (Australia) Pty. Limited 2,038,893 3,554, ,108, ,385, Legal expenses Court fees 3,050,862 3,685,587 Lawyer s fees 6,200,358 8,038,416 Other legal expenses 12,002,454 14,021,350 21,253,674 25,745,353 30(a) Consolidated Legal Expenses Agrani Bank Limited 21,253,674 25,745,353 Agrani Equity & Investment Limited - 185,210 Agrani SME Financing Company Limited 750 5,590 Agrani Exchange House Private Limited, Singapore 492, ,386 Agrani Remittance House SDN. BHD., Malaysia 212,800 - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited 2,956,975 1,383,713 24,916,393 27,527, Postage, stamp, telegram & telephone Postages 46,755,523 55,194,828 Telegram Charges 144, ,195 Telex & Teleprinter charges 88,220,570 95,486,477 Stamps 43,398 90,889 Telephone Charges (Office) 20,373,458 19,935,914 Telephone Charges (Residence) 2,329,937 2,187,454 Trunk-call charges 73, , ,940, ,339,

219 31-Dec-14 Taka 31-Dec-13 Taka 31(a) Consolidated postage, stamp, telegram & telephone Agrani Bank Limited 157,940, ,339,411 Agrani Equity & Investment Limited 61,920 63,542 Agrani SME Financing Company Limited 241, ,102 Agrani Exchange House Private Limited, Singapore 1,521,199 1,645,970 Agrani Remittance House SDN. BHD., Malaysia 51, ,289 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited 99,876 49, ,916, ,818, Stationery, printing, advertisement Security Stationery 25,444,396 25,644,959 Printing Stationery 94,509,803 93,518,157 Paper & Table Stationery 28,172,827 25,761,517 Advertisement publicity charge (Tender) 1,924,178 1,815,348 Advertisement publicity charge (Development) 99,600,000 72,819, ,651, ,559,740 32(a) Consolidated Stationery, printing, advertisement Agrani Bank Limited 249,651, ,559,740 Agrani Equity & Investment Limited 187, ,895 Agrani SME Financing Company Limited 1,282,074 1,379,401 Agrani Exchange House Private Limited, Singapore 1,286,462 1,536,509 Agrani Remittance House SDN. BHD., Malaysia 288, ,342 Agrani Remittance House Canada Inc. 268,777 - Agrani Exchange Company (Australia) Pty. Limited 84, , ,049, ,008, Chief executive s salary and allowances Salary 5,700,000 5,575,000 Allowances - - 5,700,000 5,575,000 33(a) Consolidated Chief executive s salary and allowances Agrani Bank Limited 5,700,000 5,575,000 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited 960, ,000 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - 3,844,143 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 6,660,000 9,539, Fees & allowances of Directors Fees for attending board meetings 2,961,250 3,064,750 Allowances 60,000 60,000 3,021,250 3,124,750 Annual Report

220 31-Dec-14 Taka 31-Dec-13 Taka 34(a) Consolidated Fees & allowances of Directors Agrani Bank Limited 3,021,250 3,124,750 Agrani Equity & Investment Limited 339, ,250 Agrani SME Financing Company Limited 495, ,000 Agrani Exchange House Private Limited, Singapore - 126,764 Agrani Remittance House SDN. BHD., Malaysia 434, ,338 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 4,289,781 4,311, Auditors Fees Audit Fee (Statutory Audit) 3,600,000 3,031,500 Audit Fee (Others) 33,750-3,633,750 3,031,500 35(a) Consolidated Auditors Fees Agrani Bank Limited 3,633,750 3,031,500 Agrani Equity & Investment Limited 94,222 60,000 Agrani SME Financing Company Limited 211, ,000 Agrani Exchange House Private Limited, Singapore - 253,528 Agrani Remittance House SDN. BHD., Malaysia 430, ,558 Agrani Remittance House Canada Inc. 1,063,462 73,251 Agrani Exchange Company (Australia) Pty. Limited 622,448-6,055,623 3,743, Depreciation & repairs of bank s assets a. Depreciation of Banks Assets (Annexure-G): Bank Buildings 21,049,776 16,662,119 Furniture & fixtures 51,563,712 44,439,754 Motor Vehicles 52,821,581 38,366,017 Office Equipment 18,741,854 16,561,517 Electric material 52,728,780 43,611,395 Computers 170,443, ,859,876 Library Books & Others 217, ,212 Sub total 367,566, ,679,890 b. Amortization of Intangible Assets Amortization of Software Purchase 1,955,948 1,471,044 Sub total 1,955,948 1,471,044 c. Repairs & Maintenance of Banks Assets: Bank Buildings 28,948,582 9,393,609 Furniture & fixtures 4,927,767 4,910,166 Motor Vehicles 120,276,346 94,824,168 Office Equipment 4,868,023 3,415,666 Computers 127,031,277 78,910,026 Electric Equipment & Lighting Materials 28,209,970 16,637,431 Renovation & Maintenance of Branch Premises 31,836,663 65,127,900 Sub total 346,098, ,218,966 Total (a+b+c) 715,621, ,369,

221 31-Dec-14 Taka 31-Dec-13 Taka 36(a) Consolidated Depreciation & repairs of bank s assets Agrani Bank Limited 715,621, ,369,900 Agrani Equity & Investment Limited 2,551,390 2,508,016 Agrani SME Financing Company Limited 1,968,671 2,804,150 Agrani Exchange House Private Limited, Singapore 4,112,428 3,892,358 Agrani Remittance House SDN. BHD., Malaysia 1,858,340 1,080,359 Agrani Remittance House Canada Inc. 652,734 - Agrani Exchange Company (Australia) Pty. Limited 205, , ,970, ,816, Other expenses Conveyance/ Transportation Charges 31,219,208 29,648,461 Petroleum, Oil and Lubricants for vehicles 25,016,322 20,306,150 Petroleum, Oil and Lubricants for generator 57,845,372 57,404,693 Entertainment Charges 32,977,830 30,551,470 Entertainment (Excluding ceiling) 17,639,035 15,437,114 Traveling Expenses 49,825,578 68,078,784 Remittance (Through Bank Exchanges) 3,590,335 4,555,264 Remittance (Cash) 60,074,154 56,007,656 Registration Charges 711, ,683 Mortgages Fee of Land/Home of staff house building loan 3,393,756 5,876,089 Bankers Clearing House charges 450, ,382 Loss on Sale of Shares and Securities - 22,438,048 Loss on Sale of Other Assets 72, ,528 Newspapers & Periodicals 9,589,845 8,743,650 Upkeep of office premises 31,354,014 29,159,621 Business Development Expenses 90,918, ,459,124 Training Expenses 33,410,418 29,541,231 Washing Charges 2,219,640 2,241,897 Closing expenditure 23,078,784 19,357,150 Micro Enterprise Development Unit 88,877 65,100 Subscription 2,039,197 7,679,866 Donation 36,500 33,000 Funeral expenses 1,825,000 1,495,366 Fees and commission 1,970,156 1,046,787 Loss on Revaluation of Security 198,415, ,513, ,762, ,311,798 37(a) Consolidated Other Expenses Agrani Bank Limited 677,762, ,311,798 Agrani Equity & Investment Limited 124,444, ,676,927 Agrani SME Financing Company Limited 10,138,884 7,960,237 Agrani Exchange House Private Limited, Singapore 20,624,648 12,939,773 Agrani Remittance House SDN. BHD., Malaysia 3,181,019 9,599,957 Agrani Remittance House Canada Inc. 1,020,428 - Agrani Exchange Company (Australia) Pty. Limited 568,074 1,361, ,739,830 1,072,850,336 Less: Inter-company Transaction(s) (636,296) (40,732) 837,103,534 1,072,809,604 Annual Report

222 31-Dec-14 Taka 31-Dec-13 Taka 38 Provision for loans & advances Provision for Bad & Doubtful Loans & Advances ( Note ) 2,954,096,245 - Unclassified loans & advances (Note -12.6) 1,131,510, ,301,994 Special Mention Account (Note ) 4,604,760 (446,592,251) 3% General reserve for consumer financing (Note -12.8) (37,636,070) 31,690,645 4,052,575,417 (184,599,612) Add: Transfer to Retained Surplus 37,636, ,599,612 4,090,211,487-38(a) Consolidated provision for loans & advances Agrani Bank Limited 4,090,211,487 - Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 4,090,211, Other provision Provision for off balance sheet exposures (Note ) (298,349,644) 13,988,763 Provision for investment(note ) 1,695,100,000 1,063,163,434 Incentive Bonus/Ex-Gratia 750,000, ,000,000 Staff Benevolent Fund 100,000, ,000,000 Branch Adjustment 500,000,000 - Provision for Other Assets: Sundry Debtors Staff & Others 12,370,979 (51,148,586) Clearing Adjustment 536,102 (1,714,808) Army Pension Paid 415,000, ,539,754 Protested Bills (Note a) 7,001 5,076,428 Exempted Loans & Interest on Exempted Loans (41,295,885) 83,476,905 Legal Charges (593,936) - BCCI London - (3,524,632) DD paid W/A 36,845,393 - Dividend Receiveable from Preference Share 100,400,000 - Exchange Loss from Agrani Remittance House Canada Inc. 1,532,078 - Exchange Loss from Agrani Exchange Company (Australia) Pty. Limited 3,160,081 - Sub Total 527,962, ,705,061 Total 3,274,712,849 2,416,857,258 Add: Transfer to Retained Surplus 340,239,465 - Grand Total 3,614,952,314 2,416,857,

223 31-Dec-14 Taka 31-Dec-13 Taka 39(a) Consolidated Other Provision Agrani Bank Limited 3,614,952,314 2,416,857,258 Agrani Equity & Investment Limited 200,000,000 - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 3,814,952,314 2,416,857, Consolidated Current Tax Expense Agrani Bank Limited 126,000,000 - Agrani Equity & Investment Limited 49,492,020 40,773,186 Agrani SME Financing Company Limited 31,413,523 31,616,914 Agrani Exchange House Private Limited, Singapore 1,310,939 - Agrani Remittance House SDN. BHD., Malaysia 1,306,472 1,049,622 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,522,954 73,439, Consolidated Deferred Tax Expense Agrani Bank Limited (407,293,396) (2,156,030,207) Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited (21,386) 154,319 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited (407,314,782) (2,155,875,888) 42 Interest Receipts in Cash Loans & Advances 22,060,112,140 22,745,129,805 Investment 8,308,812,516 8,423,368,992 Balance with Other Banks & Financial Institutions 1,421,740,435 1,019,334,235 31,790,665,091 32,187,833,032 42(a) Consolidated Interest Receipts in Cash Agrani Bank Limited 31,790,665,091 32,187,833,032 Agrani Equity & Investment Limited 5,431,309 93,204,006 Agrani SME Financing Company Limited 153,775,826 47,524,432 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,949,872,226 32,328,561,470 Less: Inter-company (Transactions) 202,156,692-31,747,715,534 32,328,561,470 Annual Report

224 31-Dec-14 Taka 31-Dec-13 Taka 43 Interest Payments in Cash Agrani Bank Monthly Deposit Scheme(ABMDS) 141,334,104 - Agrani Bank Pension Scheme (ABPS) 41,434,050 80,596,001 Agrani Bank Special Deposit Scheme (ABS) 779,899, ,704,347 Deposit Pension Scheme (DPS) 201,061, ,672,292 Fixed Deposit Receipts 14,494,783,803 10,100,384,438 Interest on ABDBS 252,409,490 - Interest on ABMIS 2,269,159, ,964,503 Non Resident Foreign Currency Deposit(NFCD) - 1,362 Non Resident Saving Deposit 1,696,118 2,812,893 Savings Deposit 2,532,485,582 2,532,426,592 Special Notice Deposit 1,560,558,983 1,074,230,477 Staff Provident Fund 264,409, ,265,775 Borrowings 51,532,089 3,520,380,355 Banks & Other Financial Institutions 382,873,403 2,061,232,999 22,973,638,098 21,068,672,034 43(a) Consolidated Interest Payments in Cash Agrani Bank Limited 22,973,638,098 21,068,672,034 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited ,973,638,098 21,068,672,034 Less: Inter-company transaction(s) 202,156, ,229,876 22,771,481,406 20,784,442, Cash receipts from other operating activities Account Closing Charge 10,222,108 7,780,340 Account Maintenance Fee 461,879, ,486,458 Annual Charges on deposit A/C 41,027,421 51,698,620 Annual Charges on Loan A/C 582, ,617 Electronic Govt. Procure (e-gp) 2,591,810 - Insurance Recoveries 600,556 10,858 Miscellaneous Earnings 1,669,029 34,158,534 Postage Recoveries 74,890, ,541,997 Proceeds realization certificate charges 6,038,496 6,924,209 Profit on sale of other assets 5,059, ,669 Rebate received from Foreign bank 16,530,657 30,350,818 Remittance 10,348,696 7,074,644 Remuneration received from Sanchaya Patra 2,156,600 1,878,

225 31-Dec-14 Taka 31-Dec-13 Taka Rent on Immovable Properties & Godown 2,495,105 2,601,623 Rent on SD Lockers 7,120,837 6,006,629 Sale of LC/Export/Schedule form and tender Schedule 4,522,063 5,230,115 Sales proceeds on loan application form 1,699,513 2,007,875 SD Trading Comm Service charge on Industrial credit 186,018 - Service charge on other credit 108,300,168 40,729,303 Service charge on rural credit 122,463 60,792 Service charge on Weavers/ Hosiery credit - - Service Charges on Civil Pension paid 1,745, ,082 Service Charges on Deposit A/C 48,046,582 62,783,889 Service Charges on FSS (Female Student Scholarship) 82,021,215 73,183,647 Telegram Recoveries 2,882,740 7,094,708 Telephone, Telex & Swift charges 49,819,345 32,981,610 Trunk-call Recoveries 2,252,775 7,029, ,812, ,923,431 44(a) Consolidated Cash receipts from other operating activities - Agrani Bank Limited 944,812, ,923,431 Agrani Equity & Investment Limited 634,046 1,082,799 Agrani SME Financing Company Limited 192,210 4,356,860 Agrani Exchange House Private Limited, Singapore 4,371,827 95,638,962 Agrani Remittance House SDN. BHD., Malaysia 1,902,463 33,142,335 Agrani Remittance House Canada Inc. 538,491 - Agrani Exchange Company (Australia) Pty. Limited 38, ,490,132 1,045,144, Cash payment for other operating activities Auditors Fee 3,000,000 2,466,733 Directors fees and allowances 3,021,250 3,129,663 Legal charges 21,259,674 18,431,382 Other expenses 680,245, ,813,952 Postage, stamps, telegrams and telephone 158,435, ,145,110 Rent, taxes, insurance lighting etc. 720,060, ,332,095 Repairs to fixed assets 355,416, ,224,815 1,941,437,834 1,643,543,751 45(a) Consolidated Cash payment for other operating activities Agrani Bank Limited 1,941,437,834 1,643,543,751 Agrani Equity & Investment Limited 341,963, ,713,031 Agrani SME Financing Company Limited 17,132,890 13,368,880 Agrani Exchange House Private Limited, Singapore 47,283,308 36,372,008 Agrani Remittance House SDN. BHD., Malaysia 11,521,837 12,780,518 Agrani Remittance House Canada Inc. 13,019,546 - Agrani Exchange Company (Australia) Pty. Limited 11,738,798-2,384,097,828 1,919,778,188 Less: Inter-company transaction(s) (8,750) (40,732) 2,384,089,078 1,919,737,456 Annual Report

226 31-Dec-14 Taka 31-Dec-13 Taka 46 Cash & cash equivalent at the end of the period Cash in hand & with Bangladesh Bank & Sonali Bank Ltd. 30,196,202,546 26,237,586,987 Balance with Other Banks 15,375,867,598 12,142,144,207 Money at Call & Short Notice 5,030,000,000 2,450,000,000 Prize Bonds 14,118,150 16,148,600 50,616,188,294 40,845,879, Consolidated Cash & cash equivalent at the end of the period Agrani Bank Limited 50,616,188,294 40,845,879,794 Agrani Equity & Investment Limited 904,960 44,848,291 Agrani SME Financing Company Limited 829,534, ,446,139 Agrani Exchange House Private Limited, Singapore 145,085, ,141,017 Agrani Remittance House SDN. BHD., Malaysia 92,868,320 90,237,455 Agrani Remittance House Canada Inc. 1,837,385 - Agrani Exchange Company (Australia) Pty. Limited 10,487,007-51,696,905,365 41,949,552,696 Less: Inter-company transaction(s) (749,317,789) (869,219,077) 50,947,587,576 41,080,333, Consolidated Shareholder s Equity Paid up Capital 20,722,940,400 20,722,940,400 Statutory Reserve 5,884,775,514 5,531,760,174 General Reserve 59,731,198 59,731,264 Asset Revaluation Reserve 11,070,315,483 11,070,315,483 Revaluation & Amortization Reserve in Govt. Securities 2,026,328, ,572,162 Retained profit/(loss) from profit and loss account (327,583,967) (2,517,958,826) Foreign Currency Translation Reserve 31,356,243 39,054,011 Minority Interest 3,007 1,942 39,467,866,575 35,479,416, Current Ratio The Bank had the following current assets and current liabilities as on 31 December 2014 & 2013 as per liquidity statement. Current Assets: Cash 4,239,014,134 3,772,584,737 Balance with other banks and financial institutions 12,655,867,598 7,992,144,207 Money at call and short notice 5,030,000,000 2,450,000,000 Investment 55,638,623,031 11,516,131,107 Loans and advances 120,950,414,680 97,918,087,162 Other Assets 6,887,252,550 - Total current assets 205,401,171, ,648,947,

227 31-Dec-14 Taka 31-Dec-13 Taka Current liabilities: Borrowing from other banks, FI and agents 2,732,989,733 3,402,431,489 Deposits 165,143,246,992 42,001,838,371 Provisions and other liabilities 4,375,766,100 10,435,381,819 Total Current liabilities 172,252,002,825 55,839,651,679 Current Assets exceeding Current Liabilities 33,149,169,168 67,809,295,534 Current Ratio: Current assets 205,401,171, ,648,947,213 Current liabilities 172,252,002,825 55,839,651, Categories of financial assets and financial liabilities in accordance with Bangladesh Financial Reporting Standard (BFRS-7) Financial Instruments : Disclosures (Figure in million Taka) Consolidated Bank Particular Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Financial Assets Loans and receivable 316, , , , , , , ,193 Held to maturity 71,312 71,576 74,829 77,579 71,312 71,576 74,829 77,579 Held for trading 52,313 53,932 40,571 41,088 52,313 53,932 40,571 41,088 Available for sale 16,244 11,425 12,776 15,649 9,964 7,489 12,776 9,604 Non-Financial Assets 39,167 39,167 31,882 31,882 39,128 39,128 15,248 15,248 Total Assets 495, , , , , , , ,712 Financial Liabilities Financial Liabilities at fair value through profit or loss Financial liabilities measured at amortised cost Non-Financial Liabilitiesprovision , , , , , , , ,503 50,893 50,893 55,391 55,391 49,167 49,167 55,391 55,391 Total liabilities 456, , , , , , , ,893 Detailed Classifications of Financial Instruments in Annexure-H. Annual Report

228 51 Reconciliation between presentation of Assets & Liabilities in fair value as mentioned in note- 50 and balance sheet: Consolidated Bank Assets presented at fair value as per note # , ,279 Add : Fall in Market price of assets 2, Value of assets as per balance sheet 495, ,871 Consolidated Bank PERFORMANCE EVALUATION Average Cost of Deposits (%) 6.02 % 6.91 % 5.94 % 6.82 % Average Cost of Borrowing (%) 1.36 % 3.23 % 1.36 % 3.23 % Average Yield on Loans & Advances (performing loan) (%) % % % % Average Yield on Investments (%) 8.53 % % 8.61 % % Average Yield on Call loans to Bank (%) 8.88 % 6.36 % 8.88 % 6.36 % Average Yield on Balance with other Banks (%) 9.57 % % 9.68 % % Net Spread (%) 3.49 % 4.81 % 4.56 % 4.70 % Net Interest Margin (%) 2.96 % 3.54 % 3.90 % 3.43 % Contribution of non-interest bearing liabilities (%) 0.53 % 1.27 % 0.66 % 1.27 % Detail of calculations is given in Annexure I. 53 Workers Participation Fund SRO-336-AIN/2010 dated issued by Ministry of Labor and Employment and published in Bangladesh gazette on declaring the status of business of certain institutions and companies ( like mobile operating companies, mobile network service providing company, all Govt. and Non-govt. money lending companies etc.) as Industrial Undertakings for the purpose of Chapter-XV of the Bangladesh Labor Act,2006 which deals with the workers participation in company s profit by the way of Worker s Participation Fund and Welfare Fund (WPFWF). The Bangladesh Labor Act,2006 requires the Industrial Undertakings to maintain provision for worker s profit participation on net profit. However, we have obtained legal opinion from Legal advisor in this regard where it has been started that Agrani Bank Limited does not fall under this category. Therefore, no provision has been made in the financial statements during the year under audit. (Md. Nazrul Islam Farazi) (Mizanur Rahman Khan) (Syed Abdul Hamid) Managing Director & CEO Dated, Dhaka April 27,

229 HIGHLIGHTS ON THE OVERALL ACTIVITIES OF THE BANK As at and for the year ended at 31 Deccember, 2014 and 2013 SL No Particulars Unit 2014 Consolidated 2013 (restated) Bank Paid up capital Taka 20,722,940,400 20,722,940,400 20,722,940,400 20,722,940,400 2 Total capital/equity Taka 39,467,866,575 35,471,241,201 39,566,613,191 35,640,935,877 3 Capital surplus/(deficit) Taka 812,510, ,470,000 1,117,500, ,500,000 4 Total assets Taka 495,754,217, ,497,934, ,870,829, ,156,584,716 5 Total deposits Taka 383,178,034, ,808,550, ,921,950, ,675,167,594 6 Total loans and advances Taka 233,854,867, ,624,298, ,085,714, ,965,388,138 7 Total contingent liabilities and commitments Taka 83,982,665, ,817,629,561 83,982,665, ,817,629,561 8 Total classified loan to total loans (%) Percentage 16.96% 17.93% 16.96% 17.93% 9 Net classified loan to net loans Percentage 6.20% 6.81% 6.20% 6.81% 10 Amount of classified loans Taka 39,659,457,995 35,799,263,000 39,659,457,995 35,799,263, Provisions kept against classified loans Taka 19,300,120,714 16,871,531,935 19,300,120,714 16,871,531, Provision surplus/(deficit) Taka Credit deposit ratio (%) Percentage 61.03% 57.39% 61.23% 58.21% 14 Profit after tax and provision Taka 2,064,869,500 9,207,819,867 1,986,144,764 9,048,998, Cost of fund (%) Percentage 9.58% 10.41% 9.58% 10.41% 16 Interest earning assets Taka 249,266,632, ,645,327, ,308,990, ,850,126, Non-interest earning assets Taka 246,487,584, ,852,607, ,561,838, ,306,457, Income from investments Taka 13,412,680,064 11,480,854,906 13,011,071,419 11,140,067, Return on investment (ROI) Percentage 8.46% 7.36% 8.54% 7.43% 20 Return on Assets (ROA) Percentage 0.42% 2.07% 0.40% 2.04% 21 Earnings per Share Taka Return on Equity Percentage 5.23% 25.96% 5.02% 25.39% Annual Report

230 Related Party Disclosure For the year ended 2014 ANNEXURE - A i) Director s Interest and Position in Different Entities Name and address Status Date of appointment No. of shares held in the Bank Entities where they have interest & position Dr. Zaid Bakht Chairman 13-Nov Research Director, Bangladesh Institute of Development Studies (BIDS) E-17 Agargaon Shere-Bangla Nagar, Dhaka-1207 Arastoo Khan Director 21-Sep Member, Planning Commission Sher-e-Bangla Nagar, Dhaka. Engineer Md. Abdus Sabur K.M.N. Manjurul Hoque Lablu Director 20-Dec Engineer and Industrialist, 4, Motijheel C/A (2nd Floor), Dhaka. Director 11-Mar Chief Editor & Managing Director, Golbal News Agency 33, Topkhana Road, Dhaka. Niaz Rahim Director 20-Dec Rahim Afrooz Group of Company 1/A, Gulshan Avenue (3rd Floor) Gulshan-1, Dhaka Advocate Balaram Podder Director 20-Dec Advocate, Eastern Arzoo Complex 61, Bijoynagar (4/8), Dhaka Prof. Dr. Md. Abdur Rouf Sardar Director 20-Dec Director, Bangladesh Medical College Hospital House #33, Road #14/A Dhanmondi R/A, Dhaka. Shameem Ahsan Director 20-Dec President, BASIS South Breeze Apartments 8 Gulshan South Avenue, Apt.53, Gulshan-1, Dhaka Md. Altaf Hossain Molla Director 20-Dec DIG of Police (Retd.), Garden Valley, Flat #A-3, 51/1, Circular Road Hatirpool, Kalabagan, Dhaka-1205 ABM Kamarul Islam Director 20-Dec Joint Secretary (Retd.), 16/C, Lake Circus, Kalabagan, Flat #02 Kalabagan, Dhaka-1205 Hasina Newaaz Director 20-Dec /A, Mymemsing Lane Bangla Motor, Dhaka. Syed Abdul Hamid, PhD Director 11-Jul-12 Managing Director & CEO Agrani Bank Limited Head Office, Dhaka. ii) Related party relationship disclosure during the year 2014 (BAS-24 Related Party Disclosure) Name of Related Party Related Party Relationship Amount (Tk.) Nature Government (Note-21.1) Owner 152,224,115 Letter of Guarantee Government (Note-6) Owner 129,583,903,447 Government Securities Government (Note-9) Owner 9,575,197,280 Advance Income Tax Ministry of Food and other Ministry (Note-7.3.b) Owner 14,649,600,000 Loans and Advances State Owned Enterprises (Note-7.3.b) Government Enterprises 18,690,248,455 Guarantees for Loans and Advances Government (Note-11.d) Owner 32,800,294,881 Deposits (CD, SB, FDR, STD and SP Deposit) Agrani Exchange House Pvt. Ltd. (Note-9.1) Subsidiary Company 6,457,000 Investment in subsidiary company Agrani Remittance House SDN.BHD (Note-9.1) Subsidiary Company 8,967,168 Investment in subsidiary company Agrani Remittance House, Canada (Note-9.1) Subsidiary Company 8,217 Investment in subsidiary company Agrani Exchange House Pvt. Australia (Note-9.1) Subsidiary Company 4,000,965 Investment in subsidiary company Agrani Equity & Investment Ltd. (Note-9.1) Subsidiary Company 4,000,000,000 Investment in subsidiary company Agrani SME Financing Com. Ltd. (Note-9.1) Subsidiary Company 600,000,000 Investment in subsidiary company 230

231 TREASURY BILL, TREASURY BOND, REPO AND REVERSE REPO As at 31 December 2014 ANNEXURE - B.1 TREASURY BILL Particulars No. of Quantity Face Value Rate of Interest Cost Value/ Previous Value Market value on Amount Booked Revaluation Amortization Reserve A/C A. Bangladesh Bank Bills in HTM (Approved) 182 Days 1 1,000,000, ,858, ,616,796 33,758, Days 4 2,457,000, ,277,211,963 2,378,681, ,469,059 Sub-Total (A) 3,457,000,000 3,241,069,963 3,376,297, ,227,855 - B. Treasury Bills in HFT (Approved) 91 Days 16 18,182,300, ,851,417,512 17,988,818, , Days 12 11,261,600, ,843,099,723 10,913,187,480-91, Days 8 4,563,700, ,214,828,221 4,303,023, ,462 Sub-Total (B) 34,007,600,000-32,909,345,456 33,205,028,800-1,121,247 TOTAL TRASURY BILL (A+B) 37,464,600,000 36,150,415,419 36,581,326, ,227,855 1,121,247 TREASURY BOND ANNEXURE - B.2 A. Treasury Bond in HTM (Approved) Govt. Treasury Bond ( 2 years) 4 1,152,400, ,153,185,171 1,152,961, Govt. Treasury Bond ( 5 years) 20 2,527,400, ,532,856,653 2,531,877, ,300 - Govt. Treasury Bond ( 10 years) 26 8,310,000, ,302,145,188 8,304,089,856 5,266,591 - Govt. Treasury Bond ( 15 years) 38 5,543,400, ,659,366,462 5,642,238,670 1,977,057 - Govt. Treasury Bond ( 20 years) 37 4,687,100, ,734,254,277 4,731,471, ,501 Jute Sector (25 Years) 2 249,707, ,707, ,707, Yrs.(Agrani Bank-BPC) T.Bond ,000,000, ,000,000,000 2,000,000, Yrs.(Agrani Bank-BPC) T.Bond ,000,000, ,000,000,000 2,000,000, Yrs.(Agrani Bank-BPC) T.Bond ,850,000, ,850,000,000 2,850,000, Yrs.(Agrani Bank-BPC) T.Bond ,850,000, ,850,000,000 2,850,000, Yrs.(Agrani Bank-BPC) T.Bond ,000,000, ,000,000,000 6,000,000, Yrs.(Agrani Bank-BPC) T.Bond ,000,000, ,000,000,000 6,000,000, Yrs.(Agrani Bank-BPC) T.Bond ,126,800, ,126,800,000 6,126,800, Yr.(Agrani Bank-BJMC) T.Bond ,019,800, ,019,800,000 1,019,800, Yr.(Agrani Bank-BJMC) T.Bond ,359,700, ,359,700,000 1,359,700, Yr.(Agrani Bank-BJMC) T.Bond ,699,600, ,699,600,000 1,699,600, Yr.(Agrani Bank-BJMC) T.Bond ,039,500, ,039,500,000 2,039,500, Sub-Total (A) 56,415,407,000 56,576,914,752 56,557,746,500 8,695,449 - B. Treasury Bond in HTM (Lien at BB in favour of SCB) (Approved) Govt. Treasury Bond ( 5 years) 18 6,532,600, ,466,668,477 6,522,694,294 13,281,735 - Govt. Treasury Bond ( 10 years) 11 5,144,000, ,027,100,292 5,119,595, ,473,542 - Sub-Total (B) 11,676,600,000 11,493,768,769 11,642,289, ,755,277 - C. Treasury Bond (HFT) (Approved) Govt. Treasury Bond ( 2 years) 1 150,900, ,794, ,141,771-6,380,753 Govt. Treasury Bond ( 5 years) 14 4,824,400, ,819,760,227 5,159,827, ,144,635 Govt. Treasury Bond ( 10 years) 34 10,859,800, ,794,112,913 11,666,712,692-1,098,799,351 Govt. Treasury Bond ( 15 years) 16 2,623,700, ,634,721,983 2,714,859, ,585,954 Govt. Treasury Bond ( 20 years) 14 1,007,200, ,004,624,996 1,032,602,216-58,618,176 Sub-Total (C) 19,466,000,000 19,404,014,357 20,727,142,775-1,753,528,869 TOTAL TRASURY BOND (A+B+C) 87,558,007,000 87,474,697,878 88,927,178, ,450,726 1,753,528,869 Annual Report

232 TREASURY BILL, TREASURY BOND, REPO AND REVERSE REPO As at 31 December 2014 ANNEXURE - B.3 OTHER BOND (UN-APPROVED) Prime Bank Ltd Subordinated Bond 1 180,000, ,000, ,000, Mutual Trust Bank Ltd Subordinated 1 300,000, ,000, ,000, Bond National Bank Ltd Subordinated Bond 1 128,000, ,000, ,000, UCBL Subordinated Bond 1 300,000, ,000, ,000, ONE Bank Subordinated Bond 1 500,000, ,000, ,000, AB BANK Subordinated Bond 1 500,000, ,000, ,000, Southeast Bank Ltd. Subordinated 1 500,000, ,000, ,000, Bond TOTAL OTHER BOND (UN- APPROVED) 2,408,000,000 2,408,000,000 2,408,000, Grand Total (Annexure B.1+B.2+B.3) 127,430,607, ,033,113, ,916,505, ,678,581 1,754,650,116 ANNEXURE - B.4 REVERSE REPO AND INTER-BANK REVERSE REPO Rate of Cost Value/ Market value Amount Booked Particulars Tenor Face Value Reverve Previous on Revaluation REPO Value 2014 Amortization Reserve A/C Inter-Bank Reverse REPO 2-7 Days 3,934,500, ,061,279,810 4,061,279, TOTAL REVERSE REPO 3,934,500,000 4,061,279,810 4,061,279, A.(i) Disclosure regarding outstanding Repo as on 31 December, 2014 Agreement Sl. No. Counter party name Date Reversal Date Total - (ii) Disclosure regarding outstanding Reverse Repo as on 31 December, 2014 Sl. No. Counter party name Agreement Date Reversal Date ANNEXURE - B.5 Amount (1st leg cash consideration) Amount (1st leg cash consideration) 01 Bank Asia Limited 30-Dec Jan ,741, National Bank Limited 30-Dec Jan-15 1,002,061, Eastern Bank Limited 30-Dec Jan-15 2,151,106,536 Total 4,142,908,745 B. Disclosure regarding overall transaction of Repo and Reverse Repo: Minimum outstanding during the year Maximum outstanding during the year Daily average outstanding during the year Securities sold under repo i) With Bangladesh Bank 425,000,000 12,747,650,000 5,129,093,654 ii) With Other Banks & Financial Institutions Securities purchased under reverse repo i) With Bangladesh Bank 300,000,000 1,950,000,000 5,909,259,259 ii) With Other Banks & Financial Institutions 378,296,478 16,524,096,516 4,511,691,

233 A. SHARE QUOTED As at 31 December 2014 Particulars/ Name of Companies No. of Shares Par Value Average cost per share Total Book Value Market Rate as at Market Value as at ANNEXURE - C (1) Unrealised Capital Gain/(Loss) Provision Kept Tk. Tk. Tk. Tk. Tk. Tk. Tk. Banks AB Bank Ltd 1,985, ,235, ,369,590 (125,866,323) 125,866,323 Al Arafa Bank Ltd. 1,426, ,542, ,261,972 (6,280,187) 6,280,187 Bank Asia Ltd. 3,419, ,427, ,099,337 (51,328,275) 51,328,275 City Bank Ltd. 1,312, ,506, ,606,832 (36,899,341) 36,899,341 Dhaka Bank Ltd. 750, ,913, ,740,811 (9,172,426) 9,172,426 IFIC Bank Ltd. 10,157, ,430, ,105,373 (446,325,168) 446,325,168 MTBL 906, ,236, ,956,145 (31,280,266) 31,280,266 NBL 8,892, ,121, ,369,473 (313,752,270) 313,752,270 One Bank Ltd. 17,380, ,330, ,614,744 (357,715,799) 357,715,799 Prime Bank Ltd 3,344, ,596, ,550,082 (86,046,378) 86,046,378 Shahjalal Islami Bank Ltd. 59,663, ,066,287, ,127,663 (1,380,159,554) 1,380,159,554 Southeast Bank Ltd. 13,297, ,219, ,968,726 (299,251,155) 299,251,155 Standard Bank Ltd. 1,361, ,467, ,291,418 (24,176,401) 24,176,401 NBFI - BAY LEASING 306, ,232, ,160,164 (14,071,996) 14,071,996 DBH 1,252, ,171, ,709,430 (47,462,304) 47,462,304 IDLC 14, ,008, ,051,403 (957,427) 957,427 PLFSL 123, ,934, ,863,568 (4,070,708) 4,070,708 ULC 355, ,769, ,547,539 (11,222,004) 11,222,004 Insurance - National Life Insurance 111, ,682, ,251,613 (430,530) 430,530 Northern General Insu 2, , ,140 (36,910) 36,910 Padma Islami Life Insu 31, ,350, ,224,500 (1,126,062) 1,126,062 Pragati Insurance Ltd. 427, ,056, ,676,359 (36,380,591) 36,380,591 Fuel & Power - DESCO 418, ,869, ,052,251 (8,816,785) 8,816,785 KPCL 56, ,070, ,241,932 (1,828,633) 1,828,633 JAMUNA OIL 56, ,542, ,702,738 (839,753) 839,753 Meghna Petrolium 130, ,325, ,545,628 (6,780,370) 6,780,370 Padma Oil 598, ,717, ,525,487 (68,192,310) 68,192,310 Power Grid Ltd 4,109, ,200, ,021,376 (223,178,702) 223,178,702 Sumit Power Ltd 9,599, ,076, ,676,974 (283,399,581) 283,399,581 Titas Gas Ltd 2,843, ,760, ,601,446 (61,158,879) 61,158,879 Pharmaceutical - ACTIVE FINE CAMICAL BECON PHARMA 15, , ,500 (496,445) 496,445 ORION PHARMA PLACEMENT 6,000, ,089, ,000,000 (227,089,996) 227,089,996 Square Pharma Ltd 2,064, ,889, ,574, ,685,174 (283,685,174) Engineering - Atlas Bangla 57, ,298, ,961,380 (8,337,435) 8,337,435 BSRM Steel 258, ,140, ,652,910 (26,487,698) 26,487,698 S ALAM CRST 863, ,674, ,773,500 (32,901,396) 32,901,396 Spinning & Textile - MALEK SPINNING 306, ,931, ,847,083 (10,084,597) 10,084,597 Metro Spinning Ltd. 51, ,824, ,509 (2,193,085) 2,193,085 Square Textile Mills Ltd 1,103, ,709, ,385,558 (20,323,524) 20,323,524 MUTUAL FUNDS - DBH 1st M.F. 131, ,301, ,900 (1,696,389) 1,696,389 Green Delta MF 500, ,000, ,300,000 (2,700,000) 2,700,000 ICB SONALI MF 228, ,171, ,459,200 (712,215) 712,215 LR Global Bd M F One 5,184, ,999, ,923,360 (26,076,638) 26,076,638 Popular Life 1st M F 565, ,000, ,826,740 (2,173,260) 2,173,260 Miscelleneous - Aramit Cement 174, ,692, ,795,360 (6,897,190) 6,897,190 RAK Ceramics 25, ,876, ,460,676 (1,415,940) 1,415,940 Beximco Ltd 3,840, ,007, ,797,330 (345,210,300) 345,210,300 BD COM ONLINE 1,764, ,269, ,352,200 (6,917,767) 6,917,767 Non-Trading Shares - B,D.Luggage Ltd , , B.C.I Ltd 1, , , Bangladesh Shipping Corp. 1, , ,846, ,578 (1,299,669) 1,299,669 Bengal Biscuits Ltd , , Brac Bank SC Bond 750,000 1,000 1, ,000,000 1, ,500,000 22,500,000 (22,500,000) Dacca Dying & Manf.Co.(Lock-in) 89, , ,287, ,740 (788,740) ICB(HTM) 1,582, ,046, ,046, ICB(HFT) 1,594, ,534,455 1, ,195,869,953 1,879,335,498 (1,879,335,498) Padma Printers & Colors 28, , , Phoenix leather Complex Ltd , , Total Quoted Shares (A) 171,518,981 9,963,963,080 7,489,051,863 (2,474,911,217) 2,474,911,217 Annual Report

234 B. SHARE UNQUOTED As at 31 December 2014 ANNEXURE - C (2) Name of Companies No. of Shares Par Value Average cost per share Total Book Value Market Rate as at Market Value as at Unrealised Capital Gain/(Loss) Provision Required Tk. Tk. Tk. Tk. Tk. Tk. Tk. A.B.Biscuit Co ltd , (37,800) 37,800 Adamjee Jute Mills Ltd 30, , (244,800) 244,800 Eastern Mercantile Bank Ltd 10, , (100,000) 100,000 Karnafuly Rayan Chemicals , (6,000) 6,000 National Oxyzen Ltd 1, , (198,600) 198,600 Paper Coverting & Pacg. 1, , (147,800) 147,800 Spcialised Jute Manf. Co ltd 33, , (337,900) 337,900 Swan Textile Mills Ltd 1, , (100,000) 100,000 Vanguard AML RBBF 20,000, ,000, ,000, Vanguard AML BD MF 10,000, ,000, ,000, B. Commerce Bank Ltd 900, ,000, ,000, Swift share 9 181, , ,629, , ,629, CDBL 8,567, ,541, ,541, Bangladesh Fund 20,000, ,000,000, ,000,000, Financial Excellence Ltd. 30, ,000, ,000, ST AGRANI MF 50,000, ,000, ,000, Karma Sangsthan Bank 300, ,000, ,000, Preference Shares Orion Infrastructure F-1 (Belhasa Pref. Share) 150,000, ,500,000, ,500,000, Orion Infrastructure F-2 (Pref. Share) 150,000, ,500,000, ,500,000, SUMMIT POWER UTTARBANCHAL 605, ,637, ,637, SUMMIT POWER PURBANCHAL 921, ,906, ,906, IEL CONSORTIUM & ASSOCIATES LTD. 50,000, ,000, ,000, VERITAS PHARMACEUTICALS 10,000, ,000, ,000, DUTCH BANGLA POWER AND 50,000, ,000, ,000, ASSOCIATES LTD. Sub Total (B) 521,404,174 7,233,888,365 7,232,715,465 (1,172,900) 1,172,900 Total Quoted & Unquoted Shares (A+B) 692,923,155 17,197,851,445 14,721,767,328 (2,476,084,117) 2,476,084,117 Buy Back Shares Beximco Ltd 5,200, ,080,000, ,280,000 (890,720,000) 890,720,000 GMG AIRLINES LTD 6,383, ,000, (210,000,000) 210,000,000 GMG AIRLINES LTD 8,801, ,000, (300,000,000) 300,000,000 GMG AIRLINES LTD 3,319, ,000, (110,000,000) 110,000,000 GMG AIRLINES LTD 1,371, ,000, (50,000,000) 50,000,000 UNIQUE HOTEL & RESORT ( CRICENT 6,250, ,250,000, ,875,000 (838,125,000) 838,125,000 LTD) Provision against buy-back share - (1,128,569,862) 1,128,569,862 Sub Total (C) 31,325,981 3,000,000, ,155,000 (3,527,414,862) 3,527,414,862 GRAND TOTAL (A+B+C) 724,249,136 20,197,851,445 15,322,922,328 (6,003,498,979) 6,003,498,979 Provision matained against fall in market value of the above Shares for the amount of TK. 596,63,61,834 Additional shares of the following companies are pledged as additional security against buy back shares. 234 Name of Companies No. of Shares Par Value Market Rate as at Market Value as at Tk. Tk. Tk. Beximco Limited 19,947, ,078,480 Shinepukur Ceramics 9,900, ,560,000 Total 29,847, ,638,480 *As per Investment Corporation of Bangladesh Ordinance 1976 the Bank s shareholding in Investment Corporation of Bangladesh (ICB) will be at least 2.5% of the total paid up share capital of ICB. The Investment Corporation of Bangladesh (General) Regulations 1977 puts some restrictions on the sale of any ICB shares held by the Bank, with the prior consent of the Government. Since we are optimistic that Government will give the Bank consent to sell its ICB shareholding exceeding 2.5%, should be situation arise, we have considered these excess shares as HFT shares.

235 ANNEXURE - D Debenture As at 31 December 2014 Name of organisation Quantity Amount (Tk) A. Unapproved Debenture M/S Bawa Jute Mills Ltd. 1 1 M/S Hotel Ilisium 1 1 Pioneer Pharmacuticals Ltd 1 1 Rupon Oil & Feeds Ltd. 1 1 Bay-Sodium Chemicals Ltd 1 1 Monir Chemicals Ltd 1 1 Ismail Carpet Mills Ltd 1 1 Saleh Carpet Mills Ltd 1 1 Mirzabo steel Mills Ltd 1 1 Karnafuly Paper Mills Ltd. 1 1 Karnafuly Rayon & Chamicals Ltd. 1 1 Total Un-approved Debenture (i) 11 B. Approved Debenture Bangladesh Textile Mills Corporation 1 1 Bangladesh Textile Mills Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh House Building Finance Corporation 1 60,000,000 Bangladesh House Building Finance Corporation 1 15,000,000 Bangladesh House Building Finance Corporation 1 15,000,000 Total Approved Debenture (ii) 90,000,008 Total Debenture (i+ii) 90,000,019 Annual Report

236 ANNEXURE - E (1) OUTSIDE BANGLADESH (NOSTRO ACCOUNT): AGRANI BANK LIMITED Name of the Bank Currency Name Amount in FC Conversion Rate per unit FC Amount in USD Weighted Average Rate Amount in BDT Nostro Account: Debit Balance SONALI BANK UK, LONDON GBP 761, ,182, ,151,982 SCB LONDON GBP 1,660, ,577, ,951,185 BCCI LONDON GBP 25, , ,058,155 CITY BANK NA, NY USD 6,449, ,449, ,745,064 PUBLIC BANK BERHAD USD 133, , ,404,687 BOT, TOKYO, JAPAN USD 454, , ,448,482 KOOKMIN BANK,SEUL USD 52, , ,060,308 MASHREQUE BANK NY USD 250, , ,494,076 SONALI BANK( UK), LONDON USD 556, , ,377,765 ICICI BANK, HONGKONG USD 287, , ,392,720 BCCI, LONDON USD 131, , ,245,672 COMMERZ EURO EUR 1,159, ,407, ,683,332 SCB, FRANKFURT, GERMANY EUR 1,091, ,324, ,238,842 CITY BANK NA, LONDON EUR 1,453, ,763, ,484,005 SONALI BANK UK, LONDON EUR 277, , ,290,368 UNICREDITO ITALIANA EUR 5, , ,441 CITI BANK NA, MUMBAI ACUD 365, , ,488,347 SONALI BANK KOLKATA ACUD 1,547, ,547, ,662,430 AB BANK LTD. INDIA ACUD 525, , ,952,663 BANK OF CEYLON,COLOMBO ACUD 21, , ,662,085 BANK OF CEYLON,MALE ACUD 5, , ,747 SCB NEPAL ACUD 23, , ,817,693 SCB INDIA ACUD 94, , ,342,448 ICICI BANK, INDIA ACUD 568, , ,311,698 UNITED BANK OF INDIA ACUD 1,016, ,016, ,265,696 METROPOLITAN BANK, ACUD 956, , ,534,334 BOT, TOKYO,JAPAN JPY 9,635, , ,233,507 SCB, TOKYO, JAPAN JPY 41,651, , ,945,769 SCB MUMBAI, INDIA ACUEUR 16, , ,598,668 UNITED BANK OF INDIA ACUEUR SVENSKA HANDLES BANKEN SEK 791, , ,849,923 UNION BANK OF SWISS CHF 95, , ,485,448 HABIB BANK AG, ZURICH CHF 47, , ,712,026 AL-RAJHI BANKING SAR 12, , ,834 NATIONAL AUSTRALIA BANK LTD. AUD 753, , ,762,487 DEV. BANK OF SINGAPORE SGD 8,583, ,481, ,208,969 UNITED OVERSEAS BANK SGD 25, , ,475,749 SCB SINGAPORE SGD 88, , ,181,591 Total: Debit Balance 29,951, ,334,709,196 Nostro Account: Credit Balance WACHOVIA BANK PSC. NY USD 4,692, ,692, ,803,975 SCB NY USD 3,464, ,464, ,040,082 Total: Credit Balance 8,157, ,844,057 ANNEXURE - E (2) BALANCE WITH BANGLADESH BANK IN FOREIGN CURRENCY Nostro Account Debit BANGLADESH BANK GBP 67, , ,202,793 BANGLADESH BANK USD 3,155, ,155, ,936,674 BANGLADESH BANK EUR 187, , ,731,790 BANGLADESH BANK JPY 3,014, , ,950,255 Total Debit Balance 3,512, ,821,513 Nostro Account Credit Bangladesh Bank NIL - - Total Credit Balance

237 ANNEXURE - F Advance Tax and Provision for Taxation As at 31 December 2014 Income Year Assessment Year Tax Provision as per account Assessment status Assessed Tax liabilities (As per Return) Excess/(short) Provision after Tax Assessed Payment of Advance Tax (TDS) =(3-5) 7 Refundable from Govt. for finalized assessments up to 2004 (except 2002) 3,101,735, ,000,000 High Court Ref. Submit 75,088,642 (65,088,642) 510,581, ,517,654 High Court Ref. Submit (1,595,413,077) 1,630,930, ,697, ,815,389 High Court Ref. Submit 1,550,205,298 (619,389,909) 239,419, Finalized 2,069,296,117 (2,069,296,117) 1,020,571, High Court Ref. Submit 1,794,952,510 (1,794,952,510) 125,729, ,700,000,000 Tribunal Pending 1,041,190, ,809,371 84,148, ,068,600,000 Appeal Pending 3,028,401,282 (959,801,282) 177,840, ,250,000,000 Return Submitted (1,020,657,045) 5,270,657,045 95,564, ,580,000,000 Assesment under hearing (26,437,713,530) 28,017,713, ,330, Assesment pending (5,805,134,891) 5,805,134,891 1,337,623, ,000,000 Return not yet submitted - 126,000,000 1,750,952,960 Sub total 10,700,933,043 (25,299,784,065) 36,000,717,108 9,575,197,280 Current tax has been calculated considering amortization valuation adjustment as admissible expenses from income year Annual Report

238 Schedule of Fixed Assets Including Land, Building, Furniture and Fixture As at 31 December 2014 ANNEXURE - G Particulars Opening balance as on Addition during the year Cost/Revaluation Depreciation Disposal/ Transfer during the year Revaluation during the year Total balance as on Rate of Depreciation Opening balance as on Adjustment for disposal/ transfer Charge for the year Total balance as on Net book value as on Net book value as on Taka Taka Taka Taka Taka % Taka Taka Taka Taka Taka Taka A) Agrani Bank Limited Tangible Asset : Land 13,277,230,511 21,441, ,298,672,254 0% ,298,672,254 13,277,230,511 Building 954,567,974 74,363,883 (124,308,283) - 904,623, % 127,762,661 (124,308,283) 21,049, ,504, ,119, ,805,313 Furniture & Fixture 689,507,004 65,346,258 (1,366,141) - 753,487,121 10% 334,277,372 (1,366,141) 51,563, ,474, ,012, ,229,632 Motor Vehicles 441,659,351 86,382,723 (6,802,650) - 521,239,424 20% 283,032,186 (6,802,650) 52,821, ,051, ,188, ,627,165 Office Equipment 182,318,236 34,525,241 (2,820,194) - 214,023,283 20% 128,562,099 (2,820,194.00) 18,741, ,483,759 69,539,524 53,756,137 Electric Materials 386,486,735 72,227,878 (6,176,067) - 452,538,546 20% 231,889,320 (6,176,067) 52,728, ,442, ,096, ,597,415 Computer 1,102,088, ,236,940 (20,254,346) - 1,294,070,718 20% 682,175,474 (20,254,346) 170,443, ,364, ,706, ,912,650 Others 4,707, ,525 (167,548) - 4,833,849 20% 2,856,650 (167,548) 217,596 2,906,698 1,927,151 1,851,222 Sub-Total : A (In Bangladesh) 17,038,565, ,818,191 (161,895,229) - 17,443,488,769 1,790,555,762 (161,895,229) 367,566,509 1,996,227,042 15,447,261,727 15,248,010,045 Intangible Asset : Software Purchase 216,312, ,286, , ,703,060 10% 3,946, ,201 1,955,948 6,006, ,696, ,366,344 Total Intangible Asset : 216,312, ,286, , ,703,060 3,946, ,201 1,955,948 6,006, ,696, ,366,344 B) Subsidiary Companies: Agrani Equity & Investment Limited 10,113, , ,398,178-3,284,708-1,443,872 4,728,580 5,669,598 6,828,902 Agrani SME Financing Limited 9,301,232 10,715, ,016,649-1,972,068-1,968,671 3,940,739 16,075,910 7,329,164 Agrani Exchange House Pvt. Limited, 22,554,244 5,607, ,162,236-16,597,080-3,826,911 20,423,991 7,738,245 5,957,164 Singapore Agrani Remittance House SDN. 8,620,324 4,475, ,095,338-4,058,087-1,794,986 5,853,073 7,242,264 4,562,237 BHD., Malaysia Agrani Remittance House, Canada - 1,812, ,812, , ,810 1,322,081 - Agrani Exchange House Pvt. 664,771 31, ,754-46, , , , ,371 Australia Sub-total : B (Overseas Branches) 51,254,181 22,927, ,182,046-25,958,343-9,729,485 35,687,828 38,494,217 25,295,838 Grand Total (A+B) 17,089,819, ,746,056 (161,895,229) - 17,517,670,815-1,816,514,105 (161,895,229) 377,295,994 2,031,914,870 15,485,755,944 15,273,305,

239 ANNEXURE - H CLASSIFICATION OF FINANCIAL INSTRUMENTS AS PER BANGLADESH FINANCIAL REPORTING STANDARD (BFRS-7): CONSOLIDATED Taka in million Items Loans & Receivable Held to maturity Held to trading Available for sale Non-financial asset Financial liabilities at fair value Financial liabilities measure at amortised cost Non-finacial liabilities Carrying Amount Fair Value Carrying Amount Fair Carrying Value Carrying Amount Fair Carrying Value Carrying Amount Fair Carrying Value Carrying Amount Fair Carrying Value Carrying Amount Fair Carrying Value Carrying Amount Fair Carrying Value Carrying Amount Fair Value Cash 4,377 4, Balance with 25,962 25, Bangladesh Bank and agent Bank Balance with other bank 20,594 20, and financial institution Investments 18,717 18,717 71,312 71,576 52,313 53,932 16,244 11, Loans and advance 233, , Fixed assets ,486 15, Other assets 13,213 13, ,681 23, Borrowing from other ,899 8, banks, Financial institution and agents Deposit and other , , accounts Other liabilities ,316 13,316 50,893 50,893 Total 316, ,718 71,312 71,576 52,313 53,932 16,244 11,425 39,167 39, , ,393 50,893 50,893 CLASIFICATION OF FINANCIAL INSTRUMENTS AS PER BANGLADESH FINANCIAL REPORTING STANDARD (BFRS-7) : AGRANI BANK LIMITED Taka in million Items Loans & Receivable Held to maturity Held to trading Available for sale Non-financial asset Financial liabilities at fair value Financial liabilities measure at amortised cost Non-finacial liabilities Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Cash 4,239 4, Balance with Bangladesh 25,957 25, Bank and agent Bank Balance with other bank 20,406 20, and financial institution Investments 18,691 18,691 71,312 71,576 52,313 53,932 9,964 7, Loans and advance 235, , Fixed assets ,447 15, Other assets 17,775 17, ,681 23, Borrowing from other ,899 8, banks, Financial institution and agents Deposit and other accounts , , Other liabilities ,316 13,316 49,167 49,167 Total 322, ,154 71,312 71,576 52,313 53,932 9,964 7,489 39,128 39, , ,137 49,167 49,167 Annual Report

240 Performance Evaluation For the year ended 2014 ANNEXURE - I (Taka in crore) Ratio Equation Consolidated Bank a) Average Cost of Deposits = Interest paid on Deposits 2, x 100 = 6.02% 2, x 100 = 6.91% 2, x 100 = 5.94% 2, x 100 Average Deposit 36, , = 36, , (restated) 6.82% b) Average Cost of Borrowing = Interest paid in Borrowings 8.38 x 100 = 1.36% x 100 = 3.23% 8.38 x 100 = 1.36% x 100 Average Borrowings = 3.23% c) Average Yield on Loans & Advances (performing loan) = Interest on Loans 2, x 100 = 13.04% 2, x 100 = 14.41% 2, x 100 = 12.17% 2, x 100 Performing Loans 7, , , , = 14.19% d) Average Yield on Investments = Income from Investment 1, x 100 = 8.53% 1, x 100 = 9.63% 1, x 100 = 8.61% 1, x 100 Average Investment 5, , , , = 9.35% e) Average Yield on Call loans to Bank = Income from Call Loans x 100 = 8.88% x 100 = 6.36% x 100 = 8.88% x 100 Average Money At Call = 6.36% f) Average Yield on Balance with other Banks = Interest from Balance with other Bank x 100 = 9.57% x 100 = 12.03% x 100 = 9.68% x 100 = Average Balance with other Banks 1, , % g) Net Spread = (Interest Earned/Interest Earning Assets) - (Interest Paid/Interest Bearing Liabilities)} 3.49% 4.81% 4.56% 4.70% h) Net Interest Margin = Net Interest Income 2.96% 3.54% 3.90% 3.43% Gross Earning Assets i) Contribution of non-interest = Net Spread - Net Interest Margin 0.53% 1.27% 0.66% 1.27% bearing liabilities 240

241 Asset Revaluation As on 31 December 2014 ANNEXURE - J Sl. No. Location of properties Land (In decimal) Carrying Amount as at Land Building Grand Total Revalued Amount as at Revaluation in Current Year Land Building Grand Total Land Building Total (4+5) (7+8) (10+11) 1 9-D, Dilkusha C/A, Dhaka ,276,450, ,057,615 2,588,507,615 3,311,200, ,985,000 3,800,185,000 1,034,750, ,927,385 1,211,677, , Motijheel C/A, Dhaka ,780, ,780,000 1,053,660,000-1,053,660, ,880, ,880, , Shahbagh Avenue, Dhaka ,375,000,000 1,216,982 2,376,216,982 3,600,000,000 1,328,040 3,601,328,040 1,225,000, ,058 1,225,111, , Nawabpur Road, Dhaka ,210,595 73,933,871 85,144,466 13,440,000 78,988,000 92,428,000 2,229,405 5,054,129 7,283, , New Circular Road, Mouchak, Dhaka ,582,934 20,843,630 39,426,564 19,200,000 33,750,000 52,950, ,066 12,906,370 13,523,436 6 Shaistakhan Road, Narayangonj ,375,000 12,112,615 91,487,615 82,550,000 13,950,090 96,500,090 3,175,000 1,837,475 5,012,475 7 Mirjhumla, Narayangong ,149,375,000 20,981,607 2,170,356,607 2,601,875,000 25,781,814 2,627,656, ,500,000 4,800, ,300,207 8 Choto Bazar, Mymensingh ,600,000 14,938,260 68,538,260 53,600,000 25,488,000 79,088,000-10,549,740 10,549,740 9 Ishwargonj, Mymensingh ,880,000-7,880,000 9,850,000-9,850,000 1,970,000-1,970, Haluaghat, Mymensingh ,250, ,875 1,496,875 1,300, ,500 1,811,500 50, , , Tangail Sadar, Tangail ,326,345 25,019,631 30,345,976 6,600,000 26,257,000 32,857,000 1,273,655 1,237,369 2,511, Garkanda, Nalitabari, Sherpur ,800,000 1,613,571 18,413,571 17,472,000 2,076,682 19,548, , ,111 1,135, Satpal, Netrokona ,500,000 4,003,766 41,503,766 39,000,000 6,840,000 45,840,000 1,500,000 2,836,234 4,336, Chakbazar, Thana Road, Faridpur ,584,000 8,960,644 60,544,644 58,240,000 11,495,000 69,735,000 6,656,000 2,534,356 9,190, Rajbari More, Faridpur ,000,000 2,798,082 54,798,082 57,200,000 3,178,140 60,378,140 5,200, ,058 5,580, Bangabandhu Road, Launchghat, Gopalgonj ,500,000 13,040,353 23,540,353 17,500,000 17,537,380 35,037,380 7,000,000 4,497,027 11,497, Baherarhat, Haridaspur, Gopalgonj ,225,000-9,225,000 12,300,000-12,300,000 3,075,000-3,075, New Rangamati Bazar ,000, , ,992, ,000, , ,950,285 26,000,000 (42,448) 25,957, KDA Mazgunni, Khalispur, Khulna ,755, ,755, ,348, ,348,000 14,593,000-14,593, Baniakhamar, Khulna ,750,000-57,750,000 59,400,000-59,400,000 1,650,000-1,650, Maheshwarpasa, Daulatpur, Khulna ,368,000-43,368,000 46,982,000-46,982,000 3,614,000-3,614, Maheshwarpasa, Daulatpur, Khulna ,748,000-38,748,000 45,206,000-45,206,000 6,458,000-6,458, Deara, Debnagarm, Dighalia, Khulna ,600,000-63,600,000 71,550,000-71,550,000 7,950,000-7,950, Goalpara, Daulatpur, Khulna ,000,000-29,000,000 30,450,000-30,450,000 1,450,000-1,450, Khulna University, Khulna ,500,000-16,500,000 17,325,000-17,325, , , Jhumjhumpur, Jrssore ,430,000 9,731,337 24,161,337 15,392,000 12,586,000 27,978, ,000 2,854,663 3,816, Kalia, Narail , , , , , , Banalata C/A, Rajshahi ,941,000-61,941,000 65,038,050-65,038,050 3,097,050-3,097, Padma R/A, Rajshahi ,695, ,695, ,836, ,836,900 10,141,300-10,141, Motihar, Rajshahi , ,000 1,011, , ,000 1,460,000 98, , , Thana Road, Bogra ,925,000-8,925,000 9,180,000-9,180, , , Betgari, Bogra ,000, ,000, ,000, ,000,000 72,000,000-72,000, Sayadhangora, SS Road, Sirajgong ,261, ,413 3,560,913 3,558, ,250 4,045, , , , Bhuterdiyar, SS Road, Sirajgong , , , ,000 50,000-50, , Central Road, Rangpur ,760,000 3,242,147 57,002,147 56,448,000 3,960,000 60,408,000 2,688, ,853 3,405, Alamnagar, Rangpur ,000 57, ,000 1,050, ,000 1,170, ,000 63, , Ghatipara, Dinajpur , , , , ,000 1,082,500 82,500 9,301 91, Sadar Road, Barisal ,000,000 6,662,499 83,662,499 88,000,000 6,123,200 94,123,200 11,000,000 (539,299) 10,460, Laldhigirpar, Sylhet ,375,025 36,003,283 41,378,308 5,900,000 42,000,000 47,900, ,975 5,996,717 6,521, BSCIC I/A, Kuchai, Sylhet ,200, ,094 17,510,094 17,888, ,120 18,197, ,000 (974) 687, Jaintapur, Sylhet ,000,000 1,905,044 99,905, ,800,000 2,334, ,134,000 9,800, ,956 10,228, Panchim Barhatm, Moulavibazar ,400,000 18,845, ,245, ,016,000 23,040, ,056,000 7,616,000 4,194,029 11,810,029 TOTAL 1, ,840,599, ,432,722 10,431,032,059 13,140,272, ,051,501 13,969,323,951 3,299,673, ,618,779 3,538,291,892 Annual Report

242 Nostro Reconciliation As at 31 December 2014 ANNEXURE - K Particular As per our book (GL) As per their book (statement) As per our book (GL) As per their book (statement) Debit (USD) Credit (USD) Debit (USD) Credit (USD) Debit (USD) Credit (USD) Debit (USD) Credit (USD) Up to three months 943, ,898, ,802, ,275, , ,517, ,044, ,736, More than three months but less than six months More than six months but less than nine months More than nine months but less than twelve months More than twelve months Total 943, ,898, ,802, ,275, , ,517, ,044, ,736, The Bank is not required to keep provision regarding the unreconciled debit balance as at balance sheet date since there was no debit entry aging more than three months. 242

243 Calculation of Provision for Loans & Advances As on 31 December 2014 ANNEXURE - K (Amount in TK.) Particulars Unclassified (UC) Classified Total Balance Outstanding Base for Provision Provision Required Provision Maintained Interest Suspense Standard SMA SS DF BL SMA SS DF BL Total UC (standard) SMA Classified Total Value of Eligible Securities A) Continuous Loan Smal & Medium Enterprise Financing ( SMEF ) 32,446,932, ,646, ,166, ,157,028 4,831,769,162 38,887,671, ,618,655 68,460, ,593,495 1,479,761,201 2,319,434,008 1,692,711,459 1,692,711,459 9,200,456 27, ,165, ,394,333 51,030,513,541 Housing Finance (HF ) Loans for Professionals to set up business Consumer Financing (Other than HF & LP) Loans to BHs/MBs/SDs against shares etc Other than SMEF,CF,BHs/MBs/SDs 39,764,062, ,584, ,251, ,962,393 3,910,617,205 44,862,478, ,566, ,630, ,543,262 2,071,022,093 3,050,762,234 2,608,476,178 2,608,476, ,119,893 14,045, ,949, ,115,020 74,199,436,100 Sub Total (A) 72,210,995,744 1,159,231, ,418,110 1,116,119,421 8,742,386,367 83,750,150,900 1,159,184, ,091, ,136,757 3,550,783,294 5,370,196,242 4,301,187,637 4,301,187, ,320,349 14,073,384 1,288,115,620 1,516,509, ,229,949,641 B) Demand Loan Smal & Medium Enterprise Financing ( SMEF ) 1,031,549, ,822,763 8,768, ,359, ,768,548 1,693,268, ,822,763 6,954,589 35,265, ,819, ,862, ,809, ,809, ,041,118 87,041, ,161,412 Housing Finance (HF ) Loans for Professionals to set up business Consumer Financing (Other than HF & LP) Loans to BHs/MBs/SDs against shares etc Other than SMEF,CF,BHs/MBs/SDs 7,089,045,234 52,409, ,025, ,139,678 7,000,592,725 14,552,212,339 52,409, ,142, ,835,158 5,634,848,120 6,095,235,660 5,861,008,817 5,861,008, ,844, ,882,456 1,077,726,670 1,133,488,466 Sub Total (B) 8,120,594, ,232, ,793, ,499,455 7,395,361,273 16,245,480, ,232, ,097, ,101,085 5,893,667,523 6,551,098,342 6,141,818,032 6,141,818, ,844,214-1,029,923,574 1,164,767,788 2,070,649,878 C) Term Loan Smal & Medium Enterprise Financing ( SMEF ) 6,731,379, ,748, ,024, ,846,481 4,272,489,106 12,587,488, ,746, ,465, ,424,238 2,163,133,663 3,119,770,010 2,315,581,784 2,315,581, ,211,773 3, ,047,764 1,389,262,733 8,732,699,428 Consumer Financing (Other than HF & LP) 4,528,129, ,268,043 89,569,904 95,404,429 1,665,324,406 6,755,696, ,372,737 87,566,934 92,107,385 1,554,008,318 2,110,055,374 1,862,800,513 1,862,800,513 1,488,694 1,312, ,259, ,061,024 - Loans for Professionals to set up business ,121 38, ,121 38,121 38,121 38, Housing Finance (HF ) 2,800,337,769 32,472,719 21,298,197 17,715, ,572,141 3,055,396,390 32,211,528 3,194,729 2,657,335 33,801,798 71,865,390 92,420,397 92,420,397 12,963, ,191 46,081,342 59,306,223 5,613,671,785 Loans to BHs/MBs/SDs against shares etc Other than SMEF,CF,BHs/MBs/SDs 64,230,383,034 2,686,323, ,761, ,126,403 8,123,585,873 76,239,180,124 2,670,601, ,097, ,880,970 3,672,739,004 7,208,318,865 4,667,708,896 4,667,708,896 1,374,173,669 17,746,152 1,949,087,528 3,341,007,349 33,370,591,775 Sub Total (C) 78,290,229,982 3,621,812,871 1,193,654,039 1,287,092,877 14,245,009,647 98,637,799,416 3,604,931, ,325, ,069,928 7,423,720,904 12,510,047,760 8,938,549,711 8,938,549,711 1,888,837,826 19,323,504 3,006,475,999 4,914,637,329 47,716,962,988 D) Short Term Agri Credit & Micro Credit Short Term Agri Credit 7,468,012, ,154, ,346, ,305,388 9,310,818, ,248, ,254, ,731,061 1,751,234, ,256, ,256,518 1,812,159-57,439,863 59,252,022 86,078,362 Micro Credit 931,303,336-62,071,883 49,381,548 84,752,294 1,127,509,061-60,962,797 48,632,521 76,869, ,465, ,632, ,632, ,203,413 8,203,413 7,380,384 Sub Total (D) 8,399,315, ,225, ,728, ,057,682 10,438,327, ,210, ,887, ,600,769 1,937,699, ,888, ,888,575 1,812,159-65,643,276 67,455,435 93,458,746 Total (A+B+C+D) 167,021,135,987 4,988,276,422 2,741,091,314 3,202,439,945 31,118,814, ,071,758,637 4,971,348,503 1,938,725,308 1,919,195,200 17,539,772,490 26,369,041,501 20,326,443,955 20,326,443,955 2,239,814,548 33,396,888 5,390,158,469 7,663,369, ,111,021,253 E) Staff Loan ,985,990, ,859, ,859, Total (A+B+C+D+E) 167,021,135,987 4,988,276,422 2,741,091,314 3,202,439,945 31,118,814, ,057,749,031 4,971,348,503 1,938,725,308 1,919,195,200 17,539,772,490 26,369,041,501 20,586,303,859 20,586,303,859 2,239,814,548 33,396,888 5,390,158,469 7,663,369, ,111,021,253 Annual Report

244 Segment Reporting As at 31 December 2014 ANNEXURE - L A. Banking operations comprising of branches of the banking entity Agrani Bank Limited Particulars Total Dhaka Chittagong Khulna Rajshahi Barisal Sylhet Rangpur Mymensing Comilla Faridpur Number of Branches B. Domestic operations in line with geographical segments (Taka in crore) Particulars Agrani Bank Limited Subsidiaries Total Dhaka Chittagong Khulna Rajshahi Barisal Sylhet Rangpur Mymensing Comilla Faridpur AEIL ASMEFCL AEHPL ARHSB ARHCI AECAPL Deduction Grand Total Interest income 1, , (20.21) 2, Interest paid on deposits, (1,758.97) (126.69) (70.09) (65.80) (16.24) (8.43) (50.39) (31.59) (62.41) (30.30) (2,220.91) (20.21) (2,200.70) borrowings etc. Net interest income (269.66) Investment income 1, , , Commission, exchange earnings and brokerage Other operating income (0.06) Total operating income 1, , , Allocated expenses Operating profit (loss) , (1.28) (1.47) - 1, Operating profit (loss) as % 76.36% 1.87% 2.55% 3.46% 1.83% 0.82% 2.11% 2.28% 4.00% 1.46% 96.74% 2.47% 0.82% 0.16% 0.05% -0.12% -0.13% 0.00% % C. Treasury operations comprising of the banking entity (Taka in crore) Nature of operation Consolidated Bank Amount % Amount % Operating income from banking operation Operating income from investment operation % % 1, % 1, % Total Operating Income 2, % 1, % 244

245 Islamic Banking Unit Balance Sheet ANNEXURE - M (1) As at December 31, 2014 Amount in Taka PROPERTY AND ASSETS Cash in hand Cash in hand (including foreign currencies) 3,130,046 3,879,564 Balance with Bangladesh Bank and its agent (including foreign currencies) 282,669, ,753, ,799, ,633,122 Balance with other banks and financial institutions In Bangladesh 1,860,230,286 4,500,652,200 Outside Bangladesh - - 1,860,230,286 4,500,652,200 Placement with other banks and financial institutions Investments in Share & Securities Governments - - Others Investments General Investment etc 575,314, ,069,276 Bills purchased and discounted - 3,476, ,314, ,545,526 Fixed assets including premises 2,648,897 2,519,920 Other assets 519,903, ,980,576 Non-banking assets - - Total assets 3,243,896,694 5,502,331,344 LIABILITIES AND CAPITAL Liabilities Placement from other banks, financial institutions and agents - - Deposits and other acconts Mudaraba savings deposits 56,026,551 36,649,146 Mudaraba term deposits 2,004,805,305 3,125,830,079 Other Mudaraba deposits 42,430,954 29,706,924 Al-wadeeah currents deposits 51,334,275 43,403,820 Bills payable 5,579,045 2,657,227 2,160,176,130 3,238,247,195 Other Liabilities 1,083,720,565 2,264,084,148 Deferred tax liabilities/(assets) - - Total liabilities 3,243,896,695 5,502,331,344 Caital/Shareholders equity Paid up capital - Statutory reserve - Revaluation gain/(loss) on investments - Other reverve - Surplus in profit and loss account/retained earning - Total shareholders equity - Total liabilities and shareholders equity 3,243,896,694 5,502,331,344 Annual Report

246 Islamic Banking Unit Off Balance Sheet Items As at December 31, 2014 ANNEXURE - M (2) Amount in Taka Contingent Liabilities Acceptances and endorsements - Letters of Guarantee 17,446, ,497, Irrevocable letters of credit - Back to Back L/C 5,847, Bills for Collection 82,272, Other Contingent Liabilities ,446, ,617, Other Commitments Documentary credits and short term trade related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Other Commitments Total off-balance sheet exposures including contingent liabilities 17,446, ,617,

247 Islamic Banking Unit Profit and Loss Account For the year ended December 31, 2014 ANNEXURE - M (3) Amount in Taka Operating Income: Investment Income 404,232, ,713,662 Profit paid on deposits (250,464,633) (162,033,354) Net Investment Income 153,768, ,680,308 Income from investment in shares/securities - - Commission, exchange and brokerage 1,800,028 2,230,770 Other operating income 496, ,944 Total operating income (A) 156,065, ,451,022 Operating Expenses: Salaries and allowances 13,339,729 10,945,275 Rent, taxes, insurance, electricity, ect. 1,664, ,189 Other fees and taxes - 20,275 Legal Expenses 5,300 6,633 Postage, stamp, telecommunication etc. 32, ,503 Stationery, printing, advertisements. Etc. 123,500 - Chief Ececutive s slalary & fees - Directors fees & expenses - Shariah supervisory committees s fees & expenses - Auditors fees - Charges on investment losses - Depreciation and repair of Bank s assets 391,816 1,126,216 Repairs to the Bank s assets 990,311 - Zakat expenses - - Other expenses 31,113,878 32,652,391 Total operating expenses(b) 47,661,144 45,701,482 Profit/(loss) before provision (C=A-B) 108,403,901 84,749,540 Provision for investments - - Specific Provision - - General provision - - Provision for off-balance sheet exposures - - Provision for diminution in value of investments - - Other provisions - - Total Provision (D) - - Total profit before taxes (C-D) 108,403,901 84,749,540 Annual Report

248 248

249 Agrani Equity & Investment Limited Annual Report

250 Directors Report Dear Shareholders, The board of Directors of Agrani Equity & Investment Limited takes the opportunity to welcome you all to the 5th Annual General Meeting of the shareholders. We have the pleasure to place herewith the Annual Report and the Auditors Report together with the Audited Financial Statements of the company for the year ended December 31, 2014 for your valued consideration and approval. The Directors Report has been prepared in compliance with the section 184 of the Companies Act 1994, BSEC notifications, guidelines of Bangladesh Bank and other applicable rules and regulations. Global Economy: Though the world economy is recovering after the 2008 financial crisis, the pace of recovery was uneven and slow in The IMF in its October 2014 World Economic Outlook (WEO) revised the global growth to 3.3 percent for 2014, 0.4 percentage point lower than that in the April 2014 WEO. The global growth projection for 2015 was lowered to 3.8 percent. Growth projection for advanced economy was 1.8 percent for 2014 and 2.3 percent for According to IMF projection emerging market and developing economies may grow at 5 percent in Geopolitical tensions that have risen since 2014 may be a major challenge for the growth potential. Bangladesh Economy: Bangladesh witnessed mixed economic phenomena in Annual real GDP growth rate has reached 6.12 percent in FY2014, averaging 6.14 percent over the last five years. The revised GDP growth rate for FY2015 has been set at 6.5 percent. The World Bank forecast for the same is 6.2 percent. Twelve month average inflation has come down to 6.99 percent by end of December 2014 and point to point basis it was 6.11 percent. Overall export earnings rose 12.79% in twelve months of Bangladesh earned $30.34bn during Jan-Dec in 2014 compared to $26.9bn during RMG sector has the major contribution in export earnings. Official reserve for foreign exchange stood at $22.31bn at the end of Fall of oil price in the world market and sustained growth in exports and remittance inflows have driven the phenomenal rise in foreign exchange reserves. Inflows of wage earners remittance stood at $14.94bn at the end of 2014, 8.03% higher from $13.83bn in Data source: Bangladesh Bank & EPB, Bangladesh. Strengthening growth trends in import of capital machineries and production inputs in the latter half of 2014 have created the platform for strong growth in output activities over the coming months. Political unrest may be a major threat to economic growth in coming days. Capital Market Scenario: Throughout 2014 the capital market remained somewhat stable. Capital market regulator with the help of Asian Development Bank is working to strengthen the capital market. They are working to introduce commodity exchange and exchange traded fund (ETF). The regulator is also working to vibrate the bond market. In 2014 both the country s stock exchanges, DSE and CSE introduced Shariah Index comprising of stocks that comply with the shariah laws. The prime bourse of the country, DSE introduced a new trading system (FlexTP) toward the end of the year. The new system is expected to enhance efficiency, transparency and technological integration. The total number of enlisted securities stands at 546 at Dhaka Stock Exchange on Dec 30, Out of these 274 are companies, 40 are mutual funds, 8 are debentures, 221 are treasury bonds and 3 are corporate bonds which have total 49,234 million shares/certificates and total issued capital Tk 10,54,926 million. DSE Performance: The small-scale investors affected by market crash are yet to recover losses although the market recovered some grounds during The broad market index of Dhaka Stock Exchange, DSEX, advanced by percent over the year to finish at on Dec 30, 2014 which was on Dec 30, The blue-chip index, DS30 produced a yearly return of percent ending at on Dec 30, 2014 which was on Dec 30,

251 Data Source: DSE Monthly Review- Dec 2014 Market capitalization on 30 Dec 2014 stood at Tk bn, 23.09% higher than that on 30 Dec 2013 which was Tk bn. Though the market capitalization increased notably but except for a few large-cap stocks most stocks lost market capitalization in Newly injected capital through IPOs and Rights issues made a substantial contribution to the rise of market capitalization in Market PE increased 17.92% during 2014 settling at on 30 Dec 2014 from on 30 Dec DATE MKT CAP(Tk bn) Daily Average Turnover(Tk mn) Daily Average volume Mkt PE DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Annual Report

252 DSE Monthly Statistics Daily Average Trade 107, ,817 Daily Average Trade Volume 109,227,597 96,590,445 Daily Average Value (Tk mn) Data Source: DSE Monthly Review- Dec 2014 IPO: As per DSE statistics 26 companies raised capital Tk 3377 crore from the capital market through initial public offerings and rights offerings. Of the 26 companies, 17 raised capital worth Tk 1314 crore through IPOs, while nine raised Tk 2063 crore by offering rights. Sector-wise Performance: Cement stocks were the best performers at the Dhaka Stock Exchange in 2014 amid expectation of good business opportunities for cement makers due to the Padma Bridge construction project- the country s largest ever infrastructure. Investors who owned cement stocks enjoyed a return of more than 114% in 2014 against their investments in this sector. The sector was mainly driven by heavyweight Lafarge Surma Cement that posted 267% price return in The second best performer is telecommunication sector with 70.7% gain in its market capitalization led by Grameenphone. Food and allied sector came third rising 59.6% in market capitalization, lifted by Olympic Industries and British American Tobacco Bangladesh Limited, which surged 108.6% and 65.3% respectively. Pharmaceutical sector s market capitalization increased 43.8%, dominated by ACI, Renata, ACI Formulation, Square Pharmaceuticals and Marico Bangladesh. Banking sector was the worst performer in 2014 falling 3.5% in its market capitalization. Dr. Khondoker Bazlul Hoque is prisiding over the 4th Annual General Meeting of Agrani Equity & Investment Company Limited 252

253 Operational Results of AEIL: Issue Management: Issue Management is one of the core functions of a merchant bank. AEIL took all the preparation required for issue management. AEIL contacted several potential companies that could raise capital from the market. In this connection Infinity Technology International Limited submitted their five years financials for initial process. AEIL is likely to manage IPO and rights issues through extensive marketing and continuous networking with different potential companies and other relevant bodies. Investors Scheme: AEIL s capital management approach is driven by the objective of maintaining a strong capital base, reflected through a strong capital adequacy ratio in order to support the execution of its growth plans and business strategies, while meeting the regulatory capital requirements at all times. At the end of 2014 a total of 547 active accounts were opened. Utmost efforts are being rendered by the AEIL officials to provide best quality customer services. Dr. Zaid Bakht is welcomed as the new Chairman of Agrani Equity & Investment Limited. Operating Profit: 2014 was more successful in operating activities than previous year. The operating profit is Tk crore in 2014, 11.21% higher compared to Tk crore in The rise in operating profit is mainly attributed to dividend income and capital gain. Annual Report

254 Summary of the Financial Results: (fig in Tk crore) Particulars Interest Income Capital Gain Dividend Income Total Income Operating Expense Operating Profit Finance Charge Provision for unrealized Loss Provision for Taxes Net Profit Acknowledgement I take this opportunity to thank my Board colleagues for their continued support and contributions in moving the company to the right direction. I of course, thank all the employees of the company on whom we depend for our success. On behalf of the board I also like to thank Bangladesh Securities & Exchange Commission, Bangladesh Bank and Dhaka Stock Exchange. Last but not the least, I wish to thank our stockholders for their continued support to Agrani Equity & Investment Limited. We are pleased to place the Annual Report, the Audited Financial Statements for the year ended 31 December 2014 together with the Auditors Report thereon for adoption. I, on behalf of the Board of Directors. Dr. Zaid Bakht Chairman 254

255 Annual Report

256 256 Dhaka Dated: 08 March 2015

257 Statement of Financial Position As at 31 December 2014 Particulars Notes APPLICATION OF FUND Non-Current Assets: Property, plant and equipment 4 5,478,657 6,348,182 Intangible assets 5 190, ,720 Total non-current asset 5,669,598 6,828,902 Current Assets: Investment in shares & securities 6 6,280,104,837 6,045,764,419 Margin loan 7 444,665, ,424,471 Accounts receivables 8 8,668,949 2,774,575 Advance income tax 9 38,703,018 15,603,985 Dividend receivables 10 21,469,723 25,319,188 Advance, deposit & prepayment ,000 12,000 Other assets , ,306 Cash and cash equivalents ,960 44,848,291 Total current assets 6,795,522,384 6,562,954,235 Total Assets 6,801,191,982 6,569,783,137 SOURCES OF FUND Equity and Liabilities: Shareholders Equity: Share capital 14 4,000,000,000 2,000,000,000 Retained earnings 15 (815,336,588) (840,156,521) Total shareholder s equity 3,184,663,412 1,159,843,479 Current Liabilities: Accounts payable 16 14,075,648 4,022,720 Advance and security deposits 17 5,401,994 2,445,074 Bank Overdraft 18 2,150,378,418 4,206,646,330 Other liabilities 19 1,446,672,510 1,196,825,534 Total current liabilities 3,616,528,569 5,409,939,658 Total equity & liabilities 6,801,191,982 6,569,783,137 These Financial Statements should be read in conjunction with the annexed notes Md. Anisur Rahman CEO Engr. Md. Abdus Sabur Director As per our annexed report of same date Dr. Zaid Bakht Chairman MABS & J Partners Chartered Accounts Date : 08 March 2015 Dhaka Shadat Rashid & Co. Chartered Accounts Annual Report

258 Statement of Comprehensive Income For the year ended 31 December 2013 Particulars Notes Income Fees & commissions 20 5,215,949 5,248,117 Capital gain on investment in share ,245, ,842,862 Income from margin loan 22 5,431,309 25,119,813 Other operational Income 23 92,997,564 68,668,031 Total Income 412,889, ,878,823 Expenditure Administrative expenses 24 15,694,462 14,942,880 Operating expense 25 1,511,118 2,148,631 Financial expenses ,372, ,799,402 Total expenditure 138,577, ,890,913 Net Profit/(Loss) before tax 274,311, ,987,910 Provision for margin loan Provision for unrealized loss on security ,000,000 - Provision for tax 29 49,492,020 40,773,186 Provision for deferred tax ( Note ) - - Net profit after tax 24,819, ,214,724 Earnings per share (EPS) These Financial Statements should be read in conjunction with the annexed notes. Md. Anisur Rahman CEO Engr. Md. Abdus Sabur Director As per our annexed report of same date Dr. Zaid Bakht Chairman MABS & J Partners Chartered Accounts Date : 08 March 2015 Dhaka Shadat Rashid & Co. Chartered Accounts 258

259 Statement of Cash Flows For the year ended 31 December 2014 Particulars A. Cash flow from operating activities Received from fees & commission 5,215,949 5,248,117 Interest received on margin loan 5,431,309 25,119,813 Dividend income 96,212,982 56,471,366 Other income received 634,046 1,723,531 Administrative Expenses (15,887,624) (6,022,292) Payment for CDBL expenses (10,466,642) (1,982,300) Interest paid on Bank Overdraft (121,318,905) (205,758,669) Bank charge paid (53,511) (40,732) Income Tax Paid (63,965,637) (20,564,392) Net Investment in securities 79,063,265 (1,600,015,682) Investment in Margin Loan (16,241,420) 9,519,760 Net Receipt of Secuirity Deposit 2,956, ,907 Interest Suspense Account 51,214,116 22,568,527 Overdraft received (2,056,267,913) 1,748,140,044 Net cash provided by/(used in) Operating activities (2,043,473,063) 35,084,997 B. Cash flow from investing activities Property plant and equipment (284,568) (2,778) Other assets (185,700) 7,698 Net cash provided by/(used in) Investing activities (470,268) 4,920 C. Cash flow from financing activities Share capital 2,000,000,000 - Retained earnings - - Net cash provided by/(used in) Financing activities 2,000,000,000 - D. Net cash Inflow/(Outflow) [A+B+C] (43,943,332) 35,089,917 E. Opening cash and cash equivalents 44,848,291 9,758,374 F. Closing cash and cash equivalents[d+e] 904,960 44,848,291 These Financial Statements should be read in conjunction with the annexed notes. Md. Anisur Rahman CEO Engr. Md. Abdus Sabur Director Dr. Zaid Bakht Chairman Date : 08 March 2015 Dhaka Annual Report

260 Statement of Changes in Equity For the year ended 31 December 2014 Particulars Share Capital Retained Earnings Total Equity Balance as at 01 January ,000,000,000 (840,156,521) 1,159,843,479 Increase Share Capital 2,000,000,000-2,000,000,000 Net profit/(loss) during the year ,819,933 24,819,933 Balance as at 31 December ,000,000,000 (815,336,588) 3,184,663,412 Balance as at 01 January ,000,000,000 (949,371,245) 1,050,628,755 Net profit/(loss) during the year ,214, ,214,724 Balance as at 31 December ,000,000,000 (840,156,521) 1,159,843,479 Md. Anisur Rahman CEO Engr. Md. Abdus Sabur Director Dr. Zaid Bakht Chairman Date : 08 March 2015 Dhaka 260

261 Liquidity Statement As at 31 December 2014 Particular Upto 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total Assets: Cash in hand Balance with other banks and financial institutions 904, ,960 Money at call and short notice Investments 6,260,104, ,000,000-6,280,104,837 Loans and advances 444,665, ,665,890 Fixed assets including land, furniture and fixtures ,669,598 5,669,598 Other assets 52,466,564 21,469, , ,000 74,736,288 Non-banking assets Total Assets 6,758,142,251 21,469,724-20,600,000 5,869,598 6,806,081,573 Liabilities: Borrowing from Bangladesh Bank, other financial institutions - 2,150,378,417 2,150,378,417 Deposits and other accounts 5,401,993 5,401,993 Provision and other liabilities 19,081,884 55,871,372 3,671,804 1,387,012,690 1,465,637,750 Total Liabilities 24,483,878-2,206,249,789 3,671,804 1,387,012,690 3,621,418,160 Net Liquidity Gap 6,733,658,373 21,469,724 (2,206,249,789) 16,928,196 (1,381,143,092) 3,184,663,412 Md. Anisur Rahman CEO Engr. Md. Abdus Sabur Director Dr. Zaid Bakht Chairman Date : 08 March 2015 Dhaka Annual Report

262 Notes to the Financial Statements For the year ended 31 December Background of the company 1.1 Corporate information Agrani Bank Limited (Merchant Banking Unit) registered as a full-fledged Merchant Banker with the Bangladesh Securities and Exchange Commission through certificate no MB-34/2009 on 23 March Subsequently Agrani Bank Limited (Merchant banking Unit) started their operation from 03 September Agrani Bank Limited (Merchant Banking Unit) also registered as a Public limited company namely Agrani Equity & Investment Limited ( the Company ) registered under the Companies Act The Company was incorporated in Bangladesh on 16 March The address of the company s registered office is 9/D Dilkusha C/A, Motijheel, Dhaka-1000, Bangladesh. 1.2 Principal activities and nature of operations The principal activities of the company comprised of merchant banking, portfolio management, issue management & underwriting. 2.0 Basis of preparation 2.1 Statement of compliance The financial statements have been prepared in accordance with the Bangladesh Accounting Standard (BAS) and Bangladesh Financial Reporting Standards (BFRS), the Securities and Exchange Comission (Merchant Banker and Portfolio Manager) Rules 1996 and as per the requirements of the Companies Act 1994 and other applicable laws and regulations. 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis under historical cost convention. 2.3 Functional and presentational currency These financial statements are prepared in Bangladesh Taka (Taka/Tk), which is the company s functional currency. All financial information presented in Taka has been rounded on the nearest figuer. 2.4 Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed on an on going basis. Revision of accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. 2.5 Reporting period The financial statements of the Company consistently cover the period from 01 January 2014 to 31 December Significant Accounting Policies 262

263 3.1 Basis of preparation and presentation of the financial statements and responsibility thereon The financial statements have been prepared based on historical cost convention on generally accepted accounting principles (GAAP). The Financial Statements are presented in Bangladeshi Taka (BDT) and significant accounting policies has been disclosed in the succeeding notes.the Board of Directors are responsible for the preparation and presentation of these financial statements. 3.2 Property, plant and equipment Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of property, plant and equipment and bringing to the location and condition necessary for it to be capable of operating in the intended manner. The cost of self constructed asset included the cost of material and direct labour, any other cost directly attributable to bringing the assets to a working condition for their intended use Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economis benefits embodied within the part will flow to the company and its cost can be measured reliably. The costs of the day to day servicing of property, plant and equipment are recognized in profit or loss as incurred Depreciation Depreciation is charged on straight-in line method on all fixed assets at the following rates per annum. (a) Asset categories Rate of depreciation (%) Method of Depreciation Furniture and fixtures 10% Straight-line Equipment and computers 20% Straight-line Vehicles 20% Straight-line Building 2.5% Straight-line (b) Depreciation begins when the asset is available for use and continues until the asset is derecognized. Depreciation is charged to amortise the cost of assets over their estimated useful lives, using Straight-line method in accordance with BAS-16 Property, Plant & Equipment. (c) Upon retirement of items of fixed assets the cost and accumulated depreciation are eliminated from the accounts and the resulting gains or losses, if any, are transferred to profit & loss account. (d) Repairs and maintenance costs of fixed assets are treated as revenue expenditure and charged to profit & loss account when incurred. Annual Report

264 3.3 Investments in shares Investments in shares are stated at cost. Required provision is made for diminishing in value of investment. Dividend from investment is accounted for as income when right to receive is established. Value of investments has been enumerated as follows: Items Unquoted Shares Quoted Shares Applicable accounting value At cost less any impairment changes At cost price (Considered on portfolio basis) 3.4 Employee Benefit The employees of the company who have been deputed from Agrani Bank Limited are entitled to obtain provident fund, pension fund and gratuity fund facility as per existing rules and regulations of Agrani Bank Limited. However, the above fcilities in favour of employees has paid or adjusted with Agrani Bank Limited. 3.5 Accounts Receivable Accounts receivable are considered good and realizable. 3.6 Financial Instruments Financial Instruments includes non-derivative financial instruments such as cash and equivalents, other payables etc. 3.7 Provisions Provisions is recognized in the balance sheet when the company has a legal constructive obligation as a result of past events, and it is probable that an outflow of economic benefits will be required tp settle the obligation and a reliable estimate can be made of the amount of the obligation as per BAS-37 Provisions, contingent liabilities and contingent assets. 3.8 Revenue Recognition Revenue is recognized in accordance with Bangladesh Accounting Standards (BAS) 18: Revenue recognition, unless otherwise mentioned or otherwise mentioned or otherwise guided by the separate BAS/BFRS. 3.9 Income from margin loan Income from margin loan is recognized on accrual basis. Such income is calculated considering daily margin loan balance of the respective parties. Income is recognized on quaterly rest Income from portfolio management fee Income from management fee is recognized on accrual basis. Such income is calculated considering daily portfolio balance of the respective parties. Income is recognized on quaterly rest Income from issue management fee, underwriting commission and corporate advisory fee Income from issue management fee, underwriting commission and corporate advisory fee are recognized as income when invoices are raised and accepted by the customers Capital gain on listed shares Capital gain is recognized on the basis of realization. Unrealized gain/losses are recognized in the statement of comprehensive income as per BSEC circular. 264

265 3.13 Revenue and expenditures The accounting policies adopted for the recognition of revenue as prescribed by BAS 18- are as follows: (a) Settlement fee is recognized at the time of buying & selling of shares of investors/clients on purchase price and sells 0.15 paisa per hundred Taka. (b) Investment income is recognized on cash basis after sale of shares. (c) Portfolio management fee is calculated on daily product basis on clients per day s average balance of portfolio in a 1% but charged on quarterly basis. (d) Interest is calculated on daily product basis on client s per day s average balance of portfolio loan in a 13% & 15% (Existing and new client respectively) but charged on quarterly basis. (e) Documentation charge is recognized at the time of opening of investor s account. (f) Interest on over draft account is calculated on daily product basis on per day s average balance of over draft 8.50% from 01 January 2014 to 30 June % from 01 July 2014 to 31 December 2014 but charged on quarterly basis Statement of Cash flows Statement of Cash flows is prepared principally in accordance with BAS 7 Cash Flow Statements ; under direct method Taxation 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 subsequent amendments Deferred tax Deferred tax is recorded under liability method as required by the BAS 12: Income Taxes for all the temporary timing differences arising between the tax base of assets and liabilities and their carrying value for financial reporting purposes. However, considering the temporary timing difference arised up to 31st December 2014 between the tax base of assets and liabilities no provision for deferred tax found to be required for the year Tax Deducted at Source Tax deducted at source from various income of the company has been booked as advance payment of tax and shown under current assets. Advance payment of tax is realizable (as refund) only on completion/agreement of the respective year s assessment Related party disclosure As per BAS 24: Related Party Disclosure, parties are considered to be related if one has the ability to control or exercise significant influence over other in making financial and operating decisions. Related party disclosure have been given in note 30. Annual Report

266 Events after reporting date Events after the balance sheet date that provide additional information about the company s position at the balance sheet date are reflected in the financial statements. Events after the balance sheet date after the balance date that are non adjusting events are disclosed in the notes when material Risk management As a full fledged merchant bank licensed by Bangladesh Securities & Exchange Commission (BSEC), Argent Equity & Investment Limited has a very significant exposure to Investors Discretionary Account (IDA)/ Margin Loan Account in the capital market of Bangladesh. As the margin account involves a portion of loan (usually at a specific ratio complied to BSEC directives), we required the investor to comply with the following documentation- 1. Detailed description of customer s identity & contact address 2. Detailed description of customer s profession & disposable income 3. A bank account statement of the customer s to confirm the financial identifications 4. Properly filled-up loan agreement along with BO account opening documents 5. Customer s KYG profile to prevent money laundering & terror financing activities The risk associated with margin loan facility is mitigated by following measures- 1. Maintain the specific margin loan ratio complied to BSEC rules 2. No margin loan for any IDA before working day from the account opening date 3. No margin loans for Z category shares 4. No margin loans for high P/E shares (usually beyond P/E 5. in special cases, we stop margin loan facility (even below 40.00) for the securities highly volatile & risky at our discretion. 266

267 Particulars Amount in Taka Property, plant and equipments This represents the written down value of property, plant and equipments as on Movement of the balance is as under: Opening balance 8,664,717 8,661,939 Add: Addition made during the year 284,568 2,778 8,949,285 8,664,717 Less: Disposal during the period - - Closing balance (At cost) 8,949,285 8,664,717 Accumulated depreciation: Opening balance 2,316,535 1,174,252 Add: Charged during the year 1,154,093 1,142,283 3,470,628 2,316,535 Less: Adjustment during the period - Closing balance 3,470,628 2,316,535 (C) Written down value (A-B) 5,478,657 6,348,182 Details have been shown in annexure-a 5.00 Software This represents the written down value of Intangible Assets (Application Software) as on Movement of the balance is as under: Opening balance 1,448,893 - Add: Addition during the year - 1,448,893 (A) Total: 1,448,893 1,448,893 Accumulated Depreciation/ Amotization: Opening balance: 968, ,394 Add: Charged during the year 289, ,779 (B) Total: 1,257, ,173 (C) Written down Values (A-B) 190, ,720 Details have been shown in annexure-a Annual Report

268 Particulars Amount in Taka Investment in shares & security (a) Share Quoted Opening Balance 6,025,764,419 4,161,190,797 Add: Purchases during the year 2,395,592,723 4,475,199,067 Sub total 8,421,357,142 8,636,389,864 Less: Sales during the year 2,161,252,305 2,610,625,445 Total: 6,260,104,837 6,025,764,419 (b) Placement Share (Share money deposit) 20,000,000 20,000,000 Total (a+b) 6,280,104,837 6,045,764, Margin Loan Opening Balance 428,424, ,944,231 Add : Addition during the year 240,042, ,959, ,467, ,904,045 Less : Received during the year 223,801, ,479,574 Closing Balance 444,665, ,424, Accounts receivable Receivable from broker ,558,539 12,909,710 Less: Sale Proceeds in Transit 4,889,590 10,135,135 Total: 8,668,949 2,774, Accounts receivable Receivable from ISTCL 9,393,793 10,368,062 Receivable from DCL 4,164,746 1,334,026 Agrani Bank Limited Investment - 1,207,622 Total: 13,558,539 12,909, Advance Income Tax Opening Balance 15,603,985 6,918,426 Add : Addition during the year 38,574,419 15,475,501 54,178,404 22,393,926 Less : Adjustment during the year 15,475,386 6,789,941 Closing Balance 38,703,018 15,603, Dividend receivable Opening Balance 25,319,187 14,846,054 Add : Addition during the year 17,026,766 22,792,870 42,345,953 37,638,924 Less : Received during the year 20,876,230 12,319,736 Closing Balance 21,469,723 25,319, Advance, deposit & prepayment Advance rent against office premises 600,000 - Sundry debtors 12,000 12,000 Total: 612,000 12,

269 Particulars Amount in Taka Other assets Security deposit with CDBL 200, ,000 Suspense Account (other) 193,000 7,300 Interest receivable from margin loan 3 3 Accrued portfolio management fee 4 3 Total: 393, , Cash and cash equipments Cash in hand - - Cash at Bank with Agrani Bank Ltd.: STD A/c ( ) 148,341 39,414,670 STD A/c ( ) 332,832 1,421,052 CD A/c ( ) 331,907 3,656,029 STD A/c ( ) 81, ,413 STD A/c ( ) 10,471 11,127 Total: 904,960 44,848, Share capital a) Authorized capital: 50,000,000 ordinary shares of Tk 100 each 5,000,000,000 5,000,000,000 b) Issued, subscribed & paid-up capital: 20,000,000 ordinary shares of Tk 100 each 4,000,000,000 2,000,000,000 Details of the shareholdings are as under: Name of the shareholder No. of Shares Amount Agrani Bank Limited ,999,999,200 Dr. Zaid Bakht Mr Muhammad Awal Khan Mr. Mizanur Rahman Khan Mr. Md. Anisur Rahman Engineer Md. Abdus Sabur Mr. K.M.N. Manjurul Hoque Lablu Mr. Syed Abdul Hamid Prof. Dr. Md. Hasibur Rashid Total ,000,000,000 Annual Report

270 Particulars Amount in Taka Retained earnings Opening balance (840,156,521) (949,371,245) Add: Profit/ (Loss) for the year 24,819, ,214,724 Total: (815,336,588) (840,156,521) Accounts Payable Payable to ICB Securities Trading Company Ltd. (ISTCL) 3,498,350 2,753,436 Payable to Delta Capital Ltd. (DCL) 9,874,738 1,269,284 Payable to Agrani Bank Limited 702,560 - Total: 14,075,648 4,022, Advance and Security Deposit Advance and security deposit 5,401,994 2,445,074 Total: 5,401,994 2,445, Bank overdraft Opening Balance 4,206,646,330 2,458,506,286 Add : Received during the year 1,686,233,610 2,620,582,706 5,892,879,940 5,079,088,992 Less : Repayment made during the year 3,742,501, ,442,662 Closing Balance 2,150,378,418 4,206,646, Other Liabilities CDBL custodian charge 57, ,500 Provision for CDBL transaction charges 8,766,924 Provision for Salary & Allowances 6,255,062 12,826,097 Provision for margin loan 94,961,505 94,961,504 Provision for unrealized loss in securities 1,217,328,744 1,014,138,679 Provision for tax on dividend 18,472,704 13,388,900 Provision for tax on capital gain 30,924,513 27,384,286 Tax deduct at source 1,385 - Deferred tax 939, ,795 Provision for other expenses 1,288,751 1,137,207 Tax Payable (Source Tax on Rent) 12,040 20,546 VAT payable 45,321 70,758 Sundry deposit 2,383, ,718 Miscellaneous 219, ,093 Interest suspense account 73,782,643 22,568,527 Total: 1,446,672,510 1,196,825,

271 Particulars Amount in Taka Fees & commissions Settlement fee 1,773,827 1,508,575 Portfolio management fee 3,442,122 3,739,542 Total: 5,215,949 5,248, Capital gain on investment in share Profit realized on buying & selling of shares 309,245, ,842,862 Total: 309,245, ,842, Income from margin loan Income from margin loan 5,431,309 25,119,813 Total: 5,431,309 25,119, Other operational income Interest on STD A/C 627,546 1,117,531 Dividend 92,363,518 66,944,500 Documentation charge 6,500 6,000 Underwritting Commission - 600,000 Total: 92,997,564 68,668, Administrative expenses Closing Allowance 18,700 17,500 Printing & stationery 127, ,940 Paper and table stationery 8,484 3,997 Advertisement 20,000 25,000 Newspaper & periodicals 31,572 35,958 Entertainment 100, ,032 Stamps 1, Salaries 2,492,470 2,705,870 Salaries (Staff) 188, ,645 Dearness Allowances (Officers & Staff) 527, ,216 Children education allowances 15,900 11,400 Bonus (Officers & Staff) 417, ,510 Bank contribution to provident fund 44,314 54,269 Bank contribution to employees pension fund 975, ,518 Bank contribution to employees gratuity fund 51,111 76,612 Conveyance allowances (Staff) 3,600 3,600 Personal pay 1,640 2,460 Washing charges 1,800 1,800 Medical allowances 98, ,800 Annual Report

272 Particulars Amount in Taka Overtime expenses 26,832 26,040 Legal expenses - 185,210 Lunch subsidy 536, ,450 House rent allowances (Officers) 1,326,013 1,413,156 House rent allowances (Staff) 113, ,863 Wages paid to temporary employees 198, ,000 Directors Fee 339, ,250 Directors allowances 45,000 60,000 Lighting charges 196, ,484 Rent on premises 3,149,664 3,149,664 Postages 2,886 3,968 Auditors fee 94,222 60,000 Depreciation on fixed assets 1,443,872 1,432,062 Repair and maintenance - furniture & fixture 4,375 - Repair and maintenance - office equipments 8,648 8,750 Repair and maintenance - computer 10,175 7,704 Repair and maintenance - motor vehicle 783, ,500 Repair and maintenance - software 298, ,000 Repair and maintenance - Electric Materials 3,320 - Telephone bill 39,182 34,860 Telephone bill (residence) 17,911 24,094 Up-keep 118, ,365 Entertainment (Excluding Ceiling) 164, ,296 Conveyance 36,102 21,475 Book & periodicals Trade license fee 13,810 33,115 Registration fee for capital formation 440,000 5,000 Business development expenses - 1,500 RJSC charges 30,000 3,374 Communication charge 176, ,762 Income tax advisor fee 50,000 30,000 Miscellaneous expenses 1,550 1,000 Deputation allowances 489, ,484 Service charge 110, ,068 Payment of Listing Fee / Subscription 100, ,000 Registration /Renewal Fee 200,000 - Total: 15,694,462 14,942,

273 Particulars Amount in Taka Operating expenses CDBL expenses 1,511,118 2,148,631 Total: 1,511,118 2,148, Financial expenses Bank charges & taxes 53,511 40,732 Interest on OD account 121,318, ,758,669 Total: 121,372, ,799, Provision for margin loan and loss on investment in securities Provision for margin loan Opening balance 94,961,503 94,961,503 Add: Provision made during the year - - Total: 94,961,503 94,961,503 Portfolio Loan Control accounts upto 31, December ,665, ,424,471 Negative equity as at upto 31, December ,099, ,649,268 Margin loan without negative equity upto 31, December ,566, ,775,204 Provision for Negative 100% 181,099, ,649,268 Provision for margin loan without negative 2% 5,271,323 5,995,504 Total Provision for margin loan upto 31, December ,371, ,644,772 Provision required 20% as per BSEC guideline 37,274,209 26,928,954 Total provision for margin loan for the year 2014 is Tk 186,371,043 according to the Bangladesh Securities and Exchange commission BSEC. Circular ref-gmbwm/wmggaviaviwmww/ /166 ZvwiL- 12/01/2015 requirement of maintaning provision against such loss has been extended up to next December 31, 2015 with 20% provision equally on quarterly basis. As per such guideline of BSEC the company is to make provision 20% on unrealized loss on investment in shares and securities. The required provision in this regard as on December 31, 2014 was Tk 37,274,209/-. However, the company had an outstanding balance of Tk 94,961,503/- as provision on margin loan as on December 31, Since as per guideline of BSEC the company had excess provision in this regard at the end of the year, no provision has been made during this year Provision for unrealized loss on security Opening balance 1,014,138,679 1,014,138,679 Add: Transfer from earlier provision made from CDBL 3,190,065 - Add: Provision made during the year 200,000,000 Total: 1,217,328,744 1,014,138,679 Annual Report

274 Particulars Amount in Taka Unrealized loss of investment in shares and securities: Cost of investment in shares and securities 6,260,104,837 6,025,762,791 Market value of investment in shares and securities 3,916,262,640 3,998,763,979 Total unrealized loss for the year ,343,842,197 2,026,998,812 Total unrealised loss for the year 2014 is Tk.2,343,835,733 according to the Bangladesh Securities and Exchange commission BSEC. Circular ref-gmbwm/wmggaviaviwmww/ /166 ZvwiL- 12/01/2015 requirement of maintaning provision against such loss has been extended up to next December 31,2015 with 20% provision on quarterly basis. As per such guideline of BSEC the company is to make 20% on unrealized loss on investment in shares and securities. The required provision in this regard as on December 31, 2014 was Tk 468,767,147. However, the company had an outstanding balance of Tk 1,017,328,744/= as provision on underalized loss on investment in shares and securities as on December 31, Though the company had excess provision at the end of the year as per BSEC guideline, moreover Tk. 200,000,000 provision has been made during this year. Now provision has increased to Tk. 1,217,328,744 from Tk. 1,017,328,744. But from the trend of profit of last couple of years it appears that all the shortfall of provision may not be possible to cover from profit of the company within 31 December Provision Summary Provision calculation for Margin Loan 186,371, ,644,772 Provision calculation for unrealized loss 2,343,835,733 2,026,998,812 Total Provision Calculation 2,530,206,776 2,161,643,584 Required Provision for Margin as per BSEC Guideline 37,274,209 26,928,954 Required Provision for unrealized as per BSEC Guideline 468,767, ,399,762 Total Required Provision 506,041, ,328,717 Provision Kept for Margin Loan 94,961,503 94,961,503 Provision Kept for unrealized loss 1,217,328,744 1,014,138,679 Total Provision Kept 1,312,290,247 1,109,100, Provision for Tax Provision for tax on capital 10% 30,924,513 27,384,286 Provision for tax on dividend 20% 18,472,704 13,388,900 Provision for tax 94,803 - Total: 49,492,020 40,773, Earnings per Share (EPS): Basic Earnings per Share Profit/(Loss) for the year 24,819, ,214,724 No. of Ordinary share 40,000,000 20,000,

275 Schedule of Property plant & equipment As on 31 December 2014 Annexure-A Particulars Balance as at 01 January 2014 Additions during the year Cost Depreciation Disposal/ adjustment during the year Balance as at 31 December,2014 Rate of dep. Balance as at 01 January 2014 Charged during the year Disposal/ adjustment during the year Balance as at 31 December 2014 Written down value as at 31 December 2013 Taka Taka Taka Taka % Taka Taka Taka Taka Taka Office Equipments 2,760, , ,975,303 20% 1,228, ,570-1,790,381 1,184,922 Furniture & Fixtures 5,904,154 69, ,973,982 10% 1,087, ,523-1,680,247 4,293,735 Intangible Assets 1,448, ,448,893 20% 968, ,779-1,257, ,941 Total 10,113, , ,398,178 3,284,708 1,443,872-4,728,580 5,669,598 Total as at ,110, ,113,610 1,852, ,432,062-3,284,708 6,828,902 Annual Report

276 List of Invesment in Security As at 31 December 2014 Quoted Shares A Sl Particulars\ Name of Company No. of Share Total Saleable Face value per share (Tk) Avgerage cost per share (Tk) Total Cost Price Market value per share (Tk) Market Value Unrealized Loss (Tk) 1 AB Bank Limited 1,029,335 1,029, ,316, ,777,117 (51,539,865) 2 ACI LTD 42,615 42, ,002, ,615,589 (2,387,282) 3 Active Fine Chemicals Limited 173, , ,403, ,854, ,672 4 Agni Systems Ltd , , Al-Arafa Islami Bank 4,784,301 4,784, ,209, ,286,082 (48,923,521) 6 Appollo Ispat Complex Limited 1,307,550 1,137, ,754, ,020,245 (14,734,301) 7 Argon Denims Limited 68,340 68, ,884, ,815,608 (1,068,980) 8 Bangladesh Finance & Inv. Co. Ltd. 408, , ,100, ,448,953 (34,651,558) 9 Bangladesh Submarine Cable Company Limited 1,934,493 1,934, ,795, ,755,333 (226,039,678) 10 Bank Asia 4,928,262 4,928, ,797, ,301,972 (90,495,590) 11 Barkatullah Electro Dynamics Limited 29, , ,326 36, Bay Leasing & Investment Ltd. 336, , ,576, ,047,297 (16,529,166) 13 BDCOM Online Limited 2,466,655 2,144, ,936, ,199,726 (12,736,722) 14 Beacon Pharmaceuticals Ltd. 1,085,275 1,085, ,471, ,534,950 (21,936,774) 15 Bengal Windsor Thermoplastics Limited 73,400 73, ,226, ,359,960 (866,592) 16 Beximco Limited 6,836,802 6,836, ,806, ,859,598 (276,947,093) 17 Beximco Pharma 1,544,316 1,544, ,719, ,651,349 (14,068,308) 18 BGIC 305, , ,422, ,531,173 (7,891,013) 19 BSRM Steels Limited 610, , ,762, ,561,547 (8,200,673) 20 City Bank 1,445,268 1,445, ,377, ,506,842 (19,870,473) 21 City G. Ins. Co. Ltd. 695, , ,658, ,937,288 (26,721,646) 22 CMC Kamal 224, , ,726, ,600,969 (2,125,928) 23 Confidence Cement 27,760 27, ,327, ,961,992 (365,706) 24 Dacca Dyeing & Mfg. Co. Ltd Delta Brac Housing Finance Company Ltd. 238, , ,262, ,098,724 (6,164,211) 26 Delta Life Ins. 638, , ,869, ,782,652 (11,086,360) 27 DESCO 1,073, , ,874, ,602,892 (61,272,079) 28 Dutch-Bangla B. 123, , ,339, ,013, , Eastern Bank Limited 1,258,200 1,258, ,848, ,223,040 (17,625,663) 30 Eastern Housing 422, , ,429, ,585,440 (3,844,291) 31 Eastern Insurance 20,600 20, , ,700 (120,393) 32 Eastland Insurance 106, , ,516, ,667,356 (1,849,036) 33 Envoy Textiles Limited 156, , ,572, ,057,237 (515,294) 34 FAS Finance & Investment Limited 370, , ,692, ,037,722 (22,654,599) 35 First Janata Bank Mutual Fund 79,875 71, , ,363 (67,686) 36 First Lease International 1,075 1, , ,963 (10,592) 37 First Security Islami Bank Ltd. 922, , ,095, ,056,950 (18,038,738) 38 Fu-Wang Ceramic 1,529,979 1,390, ,926, ,337,693 (19,588,777) 276

277 39 Fu-Wang Food GBB Power Ltd 2,339,502 2,339, ,611, ,510,397 (13,100,859) 41 Generation Next Fashions Limited 3,269,091 3,269, ,478, ,690,183 (27,788,499) 42 Global Heavy Chemicals Limited 3,250 3, , ,500 (57,662) 43 Golden Harvest Agro Industries Limited 327, , ,199, ,019,725 (4,180,129) 44 Golden Son Limited 457, , ,020, ,733,357 (1,286,914) 45 GPH Ispat Ltd , ,639 (711) 46 Grameen One: Scheme Two 329, , ,793, ,016,240 (2,776,846) 47 GrameenPhone Limited 71,358 71, ,096, ,824, , Green Delta Mutual Fund 835, , ,879, ,841,000 (4,038,748) 49 H R Textile Ltd. 191, , ,864, ,463,029 (9,401,277) 50 ICB AMCL 2nd NRB M.F. 874, , ,363, ,817,200 (4,546,701) 51 ICB AMCL 3rd NRB Mutual Fund 1,219,000 1,219, ,191, ,241,700 (2,949,519) 52 ICB AMCL Sonali Bank Limited 1st Mutual Fund 605, , ,481, ,872,000 (1,609,140) 53 ICB Employees Provident Mutual Fund One: Scheme 1 251, , ,461, ,131,750 (3,330,082) 54 ICB Islamic Bank Limited 7,500 7, , ,250 (3,555) 55 IFIC Bank Limited 194, , ,488, ,082,380 (1,406,421) 56 International Leasing 1,411,179 1,411, ,076, ,050,917 (93,025,260) 57 Investment Corporation of Bangladesh , ,760 1, ,953 1, Jamuna Oil Company Ltd. 129, , ,566, ,587,908 21, Karnaphuli Insurance 461, , ,766, ,021,699 (20,744,310) 60 Khulna Power Company Limited 703, , ,885, ,127,430 3,242, Lafarge Surma Ce. 550, , ,278, ,745,694 29,467, LankaBangla Finance Limited 480, , ,315, ,158,170 (9,157,329) 63 Libra Infusions 2,000 2, ,313, ,000 (567,021) 64 Linde Bangladesh Limited 40,650 40, ,946, ,178,490 7,232, M.I. Cement Factory Limited 186, , ,613, ,443,640 (6,170,168) 66 Malek Spinning Mills Limited 1,292,600 1,292, ,430, ,688,660 (41,741,631) 67 MBL 1st Mutual Fund 656, , ,662, ,952,000 (1,710,115) 68 Meghna Cement 58,900 58, ,999, ,132,790 (6,866,218) 69 Meghna Life Insurance 118,404 92, ,348, ,727, , Meghna Petroleum Ltd. 325, , ,119, ,785,367 (12,333,870) 71 National Bank Limited 3,122,070 3,122, ,421, ,591,598 (49,829,498) 72 National Life Ins. 32,843 26, ,513, ,724, , Navana CNG Limited 445, , ,990, ,150,480 (6,839,915) 74 NCC Bank 2,702 2, , ,262 (21,486) 75 NLI First Mutual Fund 413, , ,840, ,308,000 (532,115) 76 Northern Gen. Insurance Co. 1,827,650 1,827, ,675, ,625,905 (34,049,133) 77 Olympic Industries 3, , ,900 1, One Bank Limited 745, , ,139, ,776,941 (362,882) 79 Orion Pharma Limited 4,513,200 4,513, ,898, ,350,600 (93,548,129) 80 Padma Islami Life Insurance Limited 1,415,000 1,415, ,684, ,892,500 (74,792,097) 81 Padma Oil 364, , ,689, ,769,276 (33,919,811) 82 Paramount Textile Limited 64,900 59, ,094, ,499,190 (1,595,287) 83 People s Leasing 2,983 2, , ,912 (79,004) 84 Peoples Insruance 2,900 2, , ,610 (41,888) Annual Report

278 85 PHP First Mutual Fund 4,564,000 4,564, ,562, ,450,800 (11,112,040) 86 Pioneer Insurance 224, , ,120, ,985,800 (4,135,121) 87 Popular Life First Mutual Fund 877, , ,026, ,388,710 (3,638,086) 88 Power Grid Co. 1,140,987 1,140, ,252, ,095,875 (53,156,550) 89 Pragati Insurance 254, , ,172, ,520,913 (21,651,460) 90 Premier Bank Limited 2,952,178 2,952, ,553, ,521,778 (54,031,445) 91 Prime Bank Limited 2,528,321 2,528, ,552, ,555,092 (70,997,861) 92 Prime Finance 370, , ,174, ,937,123 (50,237,343) 93 Reliance Insurance 10,910 10, , ,780 (291,021) 94 Republic Insurance Company Limited 455, , ,886, ,718,121 (7,168,476) 95 RN Spinning Mills Ltd 1,996,750 1,996, ,263, ,905,750 (14,357,504) 96 Rupali Insurance 93,456 93, ,867, ,205,562 (662,414) 97 Rupali Life Insurance 1,213,375 1,213, ,311, ,007,600 (48,303,748) 98 Saiham Cotton Mills Limited 1,184,750 1,184, ,505, ,443,975 (9,061,173) 99 Salvo Chemical Industry Ltd Shahjalal Islami Bank 5,028,416 5,028, ,225, ,826,781 (124,399,141) 101 Singer BD. Limited 64,250 64, ,384, ,057,900 (326,727) 102 Social Islami Bank Ltd. 3,230,150 3,230, ,478, ,930,040 (33,548,624) 103 Southeast Bank Limited 3,907,077 3,907, ,571, ,797,294 (14,774,035) 104 Southest Bank 1st Mutual Fund 136, , ,135, ,092,000 (43,216) 105 SP Ceramics Limited 505, , ,600, ,274,232 (8,326,380) 106 Square Pharma 1,246,369 1,246, ,392, ,186,503 17,793, Square Textile 1,199,226 1,199, ,933, ,129,566 (14,803,561) 108 Standard Bank 6,085,806 6,085, ,900, ,289,736 (83,611,041) 109 Summit Alliance Port Ltd. 175, , ,609, ,577,360 (14,031,888) 110 Summit Power Limited 2,972,536 2,700, ,279, ,848,140 (54,431,301) 111 Summit Purbanchol Power Co. Ltd. 315, , ,072, ,731,424 (340,703) 112 Sunlife Insurance Company Limited 81,375 77, ,848, ,523,538 (2,325,437) 113 Titas Gas Transmission & Dist. Co. Ltd 2,566,984 2,548, ,400, ,588,585 (14,811,850) 114 Trust Bank 1st Mutual Fund 7,645,111 7,645, ,020, ,283,599 (22,737,325) 115 Unique Hotel & Resorts Limited 1,277,600 1,277, ,797, ,193,840 (23,603,564) 116 United Airways (BD) Ltd. 106, , ,685, ,954 (736,631) 117 United Commercial Bank Limited , , Uttara Bank Limited 319, , ,291, ,281,699 (21,009,785) 119 Uttara Finance 1,519 1, , ,773 (30,595) 120 Zahintex Induatries Limited 1,009, , ,697, ,657,435 (16,040,380) Total Quoted Share 123,394,011 6,260,098,373 3,916,262,640 (2,343,835,733) Add: Placement Share Allied Pharma 1,000, ,000, ,000,000 - Khan Brothers 1,000, ,000, ,000,000 - Sub total 2,000,000 20,000,000 20,000,000 - Total Share 125,394,011 6,280,098,373 3,936,262,

279 Agrani SME Financing Company Limited Annual Report

280 Directors Report to the Shareholders Bismillahir Rahmanir Rahim Respected Shareholders Assalamu Alaikum On behalf of the Board of Directors, I am pleased to present the annual report and the audited financial statements of the company for the year ended 31 December 2014 together with the Auditors Report thereon, for consideration and approval of our valued Shareholders. These were approved by the Board of Directors of the Company. This Directors Report is in compliance with the section 184 of the Companies Act 1994, guidelines of Bangladesh Bank and other applicable rules and regulation in the country. Relevant disclosures and explanations relating to certain issues have been given by the Directors, which they consider important to ensure transparency and good governance practices. We believe it is comprehensive enough to understand our business, operational procedures and overall performance at a glance. Global Economy Global growth in 2014 was lower than initially expected continuing a pattern of disappointing out turns over the first several years. Growth picked up only marginally in 2014 to 2.6% from 2.5% in A global recovery was also hampered by some new challenges including a number of unexpected stock, heightened geographical conflicts in various areas of the world. United States has managed to maintain an annual growth rate above 2% in However in economic situation in Europe has stagnated particularly in euro area where growth is exceptionally weak. Growth rate in developing countries economies in transition have become more divergent In the large economies Germany started the year strongly, but has since slowed significantly. Regarding other developed countries New Zealand became the first developed country in tighten its monetary policy since after the great Recession. GDP estimated to grow favorably in Canada and Australia. Among the developing countries, Africa s overall growth momentum is sat to continue with GDP growth expected to accelerate from 3.5% in 2014 to 4.6% in East Asia has maintained the distinction of the world s fastest growing region with GDP growth estimated at 6.1% in Economic growth in South Asia is sat to gradually pick up from an estimated 4.9% in 2014 to 5.4% in While the recovery will be led by India, which accounts for about 70% of regional output, other economies like Bangladesh and Iran are also projected to see stronger growth. In the Middle East lower oil prices and armed conflicts in Iraq. Russian Federation has a weak economic situation and geographical strains. International prices of primary commodities have been on at downward trend in the past two years. International prices of oil declined in the second half of 2014 and are projected to continue softening in as the growth of demand for oil is expected to remain weak. Nonoil commodity prices have also been on a decreasing trend, although they still remain high relative to their long-term trend of the first decades. Our Economy Over the last several years Bangladesh economy has been growing at a rate of 6%. After reaching 6.7% in it has been on a decline trend GDP growth in FY14 almost stagnant to 6.1% compare to 6% last year. Private investment, the real driver of the economy has been downward continuously during the last fiscal years from 22.5% of GDP to 21.4%. There was practically negative growth in private investment due to political uncertainty and the inadequate improvements in the provisions of power gas and infrastructure. The international market recovery was not as it was expected, particularly in the European market. However, there some positive indicators notably in agricultural sector, which seem a hike in crop production public investment, also perform well and rose from 6.6% of GDP in FY2013 to 7.3% in FY2014. The rate of growth of tax revenue raised by NBR during July-November 2014 was lower than the rate during the corresponding period last year. Inflation is still high but stable, overall consumer inflation increased to 7.4% in FY14 relative to 6.8% in FY13 driven by an increase of food inflation part of the rise was due to supply disruptions caused by political unrest of late 2013.Another opt-repeated success of the economy is the rapid increased in the stock of international reserves to over $ 21.6 billion. Bangladesh bank managed to keep reserve and broad money growth within target by stepping up sterilization operations. The surplus in balance of payment increased from US$ 5.1 billion in FY13 to US$ 5.5 billion, creating an excess supply of foreign exchange. The fiscal policy is affected by revenue collection and development budget implementation shortfalls. The overall fiscal deficit in FY14 was a modest 3.1% of GDP. Public debt as a share of GDP is declining. Capital market activities remain generally weak throughout FY14. Asset quality in the state own commercial bank in FY14 while they are aggregate stock of assets and share in the total assets of the banking system declined deposits continue to grow at a healthy rate thus ensuring adequate liquidity. Bangladesh continues to make progress on human development and reducing extreme poverty. Political uncertainty weak competitiveness are dragging acceleration of private investment and growth to sustain growth in the near and medium term private investment need to increase significantly along with improving the quality of public investment, improvement in infrastructural support and avoiding of confrontational politics will assist towards sustainable growth. Garments workers working in the lowest grade has been raised to BDT 5300 from 3000 amendments to labor law have been made and draft Bangladesh Export Processing Zone (EPZ). Labor act 2014 has been approved to protect both non-epz 280

281 and EPZ workers, fundamental rights to freedom of association and collective bargaining duty free import of the safety equipment was allowed the FY15 budget. Non-Banking Financial Institutions (NBFI) in 2014 Currently total number of NBFI has been increased from 29 to 31 as Bangladesh Bank has approved two more financial institutions recently. Most of the NBFIs faced liquidity shortage starting from the beginning of the year. Although NBFIs increase the rate of interest on loans, they had to increase the deposit rates to collect fund. Severe liquidity crisis forced the NBFIs to squeeze loans. Overall, the business and investment scenario in private sector remained dull in Cautionary Monetary Policy stance of the Central Bank means that funds would continue to be dear exacting a price whenever it would be desirable. NBFIs have to depend on their internal sources for their fund requirement and become less dependent on the Banks. The Regulator has essentially ensured that investments are more on the core business activities with greater emphasis on the SME sector to move towards a more inclusive growth momentum. Use of Assets has to be more rationalized, unproductive investments curtailed, funds from the Capital market redeployed and belt tightening intensified to enable the Non Banks to give a decent return to their shareholders. Non Banks shall be required to use their skill and creativity to be able to maintain the growth path. The way forward is to move cautiously minimizing risk and keep up the growth momentum. Overall Performance We are pleased to report that Agrani SME Financing Company Limited made revenue of BDT 154 million, achieved profit after Tax of BDT 60.2 million, recorded an EPS 6.02 of compared to 3.82 in the previous year. Company s total assets remained at a better position with a growth of 5% operating resulting during 2014 are summarized below: Particulars 2014 (BDT in millions) 2013 (BDT in millions) 2012 (BDT in millions) Operating Income Operating Expenses Total Operating Profit Provision for income tax Net Profit after income tax Earnings Per Share (Taka) Loans and Advances Total loans and advances were Tk millions at 31 December 2014 representing almost nine percent higher than 2013 worth Tk. 38 millions. Movement of loans and advances were as under: Particulars 2014 (Tk. in millions) 2013 (Tk. in millions) 2012 (Tk. in millions) Opening balance at 1 January Disbursement during the year Recovery during the year Write off during the year Adjustment during the year Closing balance at 31 December Recovery position of the loans and advances was almost 91%. Out of total loans and advances balance Tk million i.e % was classified for which necessary provisions were kept. At the end of the year 2014, a total number of 2061 enterprises have been established which have generated employment opportunities for 6312 persons. Out of the total employment 2115 were female and 3993 were male. Annual Report

282 Liquidity Position Liquid position of the company was satisfactory. Details of liquidity assets of the company were as under: Particulars Short term deposit with other bank and financial institution Fixed deposit with other bank and financial institutions 2014 (Tk. in millions) 2013 (Tk. in millions) 2012 (Tk. in millions) Total: Total liquid asset represents 61% of total assets of the Company. Shareholders Equity Total shareholder equity at the end of the year was Tk million representing 5.37 percent higher than 2013 worth Tk million. Shareholders equity as at 31 December is summarized below: Particulars (Tk. in millions) % (Tk. in millions) % (Tk. in millions) Share Capital Statutory Reserve General Reserve Retained Earnings /(Losses) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31ST DECEMBER 2014) There have been no material changes and commitments between the end of FY14 and the date of this report, affecting the financial position of the Company. ACCOUNTING POLICIES AND MAINTENANCE OF BOOKS OF ACCOUNTS The Directors consider that in preparing the Financial Statements, the Company has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates and that all International Accounting Standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) have been followed. In preparing financial statements, information has been obtained from the books of accounts, which have been maintained properly as required by the applicable rules and regulations. DIRECTORS RESPONSIBILITIES OF PREPARATION OF FINANCIAL STATEMENTS The Directors are of the view that the Annual Report and Company s financial statements have been prepared in accordance with applicable laws and regulations and as per requirement of regulatory authorities. The Board confirms that a true and fair view of the state of the affairs of the Company has been ensured while preparing the Financial Statements of the Company. OBSERVANCE OF IAS, BAS, BFRS & APPLICABLE LAWS The Directors have the responsibility for ensuring that the Company keeps accounting records which disclose with reasonable accuracy the financial position of the Company and which enable us to ensure that the financial statements comply with the Companies Act, 1994, the Financial Institutions Act, 1993, and the Bangladesh Securities and Exchange Rules, The Directors also confirm that the financial statements have been prepared in accordance with the Bangladesh Accounting Standards and other applicable rules and regulations. FAIRNESS OF THE ACCOUNTS The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards (IFRS) and the requirements of Companies Act, The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of their profits for the year ended 31 December, % 282

283 INTERNAL CONTROL Internal control including financial, operational and compliance controls and risk management systems, maintained by Management and that was in place throughout the financial year and up to and as of the date of this report, is adequate to meet the needs of the company in its current business environment. Management will follow up and review the status of actions on recommendations made by the internal control. The Board reviews regular reports from the management on the key operating statistics, as well as legal and regulatory matters. The Board also approves any changes or amendments to the company s policies. GOING CONCERN The Board of Directors has reviewed the Company s overall business plans, strategies and pleased that the Company has adequate resources to continue its operations in the projected future. Directors fee it is appropriate to adopt going concern assumption and there is no material uncertainty in preparing the Financial Statements. RISK AND CONCERNS: The Board of Directors is in charge of determining the Company s fundamental attitude toward risk while setting out the risk principles as well as the level of risk exposure. The Board of Directors are responsible for formulating risk policies, determining methods to measure and manage risk, setting commensurate risk limits and monitoring their performance. Fundamental principles of Agrani SME Financing Company Limited s risk management philosophy are: Effectively managing and monitoring credit, interest rate, liquidity, market and operational risk and providing for appropriate allocation of capital among the types of risk. Managing risk in a forward-looking manner and identifying and analyzing risks from the beginning with the help of steering risk strategies, models and parameters. Creating maximum value for the shareholders, depositors and employees in long term Being financially reliable and strong and establishing business relations with the stakeholders that will last for many years by creating the image of a financial institution that will stay in business permanently Complying with Basel II and other guiding principles of Bangladesh Bank. Return to Shareholders Your company has always believed in giving good returns to the shareholders. This is the third year with full operation of the company. So you will agree with me that in competitive market three years operation is not sufficient to pay dividend. However, we can safely assure you that in future with the blessings of the Almighty, we shall enter into a higher growth to pay returns to our shareholders. CONTRIBUTION TO THE NATIONAL EXCHEQUER AND THE ECONOMY During the year 2014, the company contributed a total amount of BDT million as Corporate Tax, BDT 7.67 million as TDS in total BDT million was paid to the national exchequer. Agrani SME Financing Company Limited always upholds its responsibilities to the development of the society and the country as a whole. We encourage our employees to participate in social and charitable programs. CSR ACTIVITIES During the year 2014, the company contributed a total amount of BDT 1,626,690 for procuring 5000 blankets and distributed these blankets to cold-heat distressed people in different parts of the country. Our Employee-Our Asset In 2014, we continued to focus on communicating our vision, mission and strategies to our employees, so as to achieve a real cultural transformation fuelled by our shared values of teamwork, Integrity, Growth, Excellence, Efficiency and Relationship Building. Many initiatives have been launched to nurture talent, to boost efficiency, effectiveness, productivity and innovation, and to inculcate the spirit of service. All these initiatives are based on the recognition that each of our employees is an important asset with a part to play in our long-term sustainable future. We hire the best people for the job and strive to retain, motivate, empower and reward them for their contribution. In this way, and through our shared, humanizing spirit, I believe our people find meaning in their work and will strive to serve from the heart. Highlights of overall operation of the Company as per DFIM circular No. 11 dated December 23, 2009 are also shown in page no. 80. Annual Report

284 Corporate Governance Your Company has always endeavored to implement and maintain high standards of Corporate Governance norms and has been practicing the principles of good corporate Governance. Corporate Governance principles as practiced by the Company rests upon the foundation of transparency, adequate disclosures, absolute compliance with the laws, fairness, professionalism, accountability and ultimately the target of maximizing the shareholders value besides catering to the interests of the creditors, employees, the environment and the society at large. Your Company is committed to conduct its business in a manner, which will ensure sustainable, capital efficient and long- term growth and in order to achieve this the Company has built up a strong foundation for making corporate Governance a way of life by having an independent board with experts of eminence and integrity, forming a core team of top level executives with proper delegation of executive powers, inducting competent professionals across the organization and putting on place best systems, process and technology. Changes in the Board During 2013 all the Directors except Managing Director & CEO retired from the Board of Directors. All the above retired Directors have been reelected /reappointed as they expressed their willingness to act as the Directors of the Board. Shareholding Pattern Shareholding patterns of the Company as at the end of the year 2014 is as under Name and address Mr. Syed Abdul Hamid (Representing Agrani Bank Ltd.) Status Date of original appointment No.of shares held in the Bank Chairman and Director 26/07/2010 9,999,988 Mrs. Khondker Sabera Islam Director 26/07/ Mr. A.K.M. Abdur Rafique Director 26/07/ Muhammad Awal Khan Director 23/06/ Mizanur Rahman Khan Director 01/12/ Mr. Nazrul Islam Farazi Director 24/04/ Mr. A.K.M. Mujibur Rahman Board Meetings and Attendance by the Directors Managing Director and Chief Executive 26/07/ During the year ended on December 31, 2014 at total of 13 Boarding Meetings were held and attendance by the Directors is summarized below: Name of the Directors Total BOD held Meetings Attended Attendance of Total meeting held Remuneration paid on attending the meeting Syed Abdul Hamid % 65,000 Khondker Sabera Islam % 65,000 Krishibid A.K.M.Abdur Rafique % 65,000 Md. Obayed Ullah Al Masud (up to 29 Oct.2014) % 50,000 Haradhan Chandra Das (up to 23 June 2014) % 40,000 Muhammad Awal Khan (Joined on 23 June, 2014) % 35,000/- Md. Shams Ul Islam ( up to 29 Oct. 2014) % 40,000/- Mizanur Rahman Khan (Joined on 1 Dec. 2014) % 10,000/- Md. Nazrul Islam Farazi % 45,000 A.K.M. Mujibur Rahman % - 284

285 Auditors M/S Mahfel Haq & Co. Chartered Accountants have served as the External Auditors of the Company for one year ending 31 December As per Bangladesh Bank s guidelines they are eligible for re-appointment and accordingly they have expressed their willingness to continue as Auditor. However, the Auditor will be appointed in the upcoming AGM for the next accounting year. Prospects: The continuing pressure of an ever changing global economic and the financial conditions and stronger competition pose strong challenges for the company in achieving its targets. However, we believe that in the context of present economy of Bangladesh growth of small enterprises is getting pace and we also believe that we will be able to identify the sectors and markets that will command priority in an effort to be more focused which will then eventually be translated into achieving sustainable growth in future. Our Humble Submission Everything we are today, everything we stand for, and everything we achieved during the year is a tribute to the commitment of our stakeholders. We are profoundly grateful for the dedication of all our staff and the loyalty of our customers, the trust of our partners and associates, and the support of Bangladesh Bank, the Securities Commission and the other regulatory authorities that have guided us over the years. For & on behalf of the Board of Directors Syed Abdul Hamid, PhD, FCA Chairman Annual Report

286 INDEPENDENT AUDITORS REPORT TO THE CONTRIBUTORS / SHAREHOLDERS OF AGRANI SME FINANCING COMPANY LIMITED We have audited the accompanying financial statements of Agrani SME Financing Company Limited which comprise the Balance Sheet as at December 31, 2014 and Profit and Loss Account, Statement of Cash Flows and Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory notes and information. Management s Responsibility for the Financial Statements: Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standard (BFRS), Agrani SME Finance Company Limited Bank Act (Act. No. 21, 1995), Bank Company Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994 and other applicable laws and regulations. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility: Our responsibility is to express an opinion on these financial statements based on our Audit. We conducted our Audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of this risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant the entity s preparation and fair presentation of the financial statements 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion: In our opinion, the financial statements, prepared in accordance with Bangladesh Financial Reporting Standards (BFRS) and Bangladesh Accounting Standards (BAS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), give a true and fair view of the State of Company s affairs as at December 31, 2014 and of the results of its operation and its operation and its cash flows for the year then ended and comply with the application section of the companies Act 1994, the financial Institution Act 1993, Bank Company Act 1991, the rules and regulations issued by the Bangladesh Bank and other applicable laws and regulations 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 purposes 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 and on the basis of statement of affairs received from 42 branches ; 286

287 iii) iv) The company s Balance Sheet and Profit & Loss Account together with the annexed notes from 1 to 21 dealt with by the report are in agreement with the books of account and returns; The expenditures incurred were for the purposes of the company s operations; v) The financial position of the companies as at December 31, 2014 and the profit for the year then ended has been properly reflected in the financial statements; vi) The financial statements have been drawn up in conformity with the Financial Institution Act 1993 and in accordance with the accounting rules and regulations issued by the Bangladesh Bank; vii) Adequate provision have been made for loans and advances and other assets which are, in our opinion, doubtful of recovery; viii) The financial statements conform the prescribed standards set in the accounting regulations issued by the Bangladesh Bank after consultation to the professional accounting bodies of Bangladesh; ix) We have carried out audit of 29 branch offices as per terms and condition laid down in our letter of appointment. x) The information and explanations required by us have been received and found satisfactory; xi) The records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; and xii) The company has complied with the relevant laws pertaining to reserves and maintenance of liquid assets. Date: February 17, 2015 Place: Dhaka Mahfel Huq & Co. Chartered Accountants Annual Report

288 Balance Sheet As at 31 December 2014 PROPERTY AND ASSETS: Notes (Amount In Taka) Cash and Cash Equivalents: 829,534, ,446,139 Cash 5,121,190 5,075,353 In Hand 121,190 75,353 Balance with Bangladesh Bank and its agent bank 5,000,000 5,000,000 Balance with Other Banks and Financial Institution 3 824,412, ,370,786 Money at call and short notice: - - Investments: - - Loans and advances: 474,866, ,132,659 Loans, cash credit and overdraft etc ,866, ,132,659 Fixed assets, including Premises, furniture and fixtures 5 16,075,910 7,329,164 Other assets: 6 38,055,294 16,027,957 Non-financial institution assets: - - Total assets 1,358,531,442 1,289,935,920 LIABILITIES & CAPITAL: Liabilities: Borrowings from other Banks, Financial Institutions and agents - - Deposit and other accounts: - - Other liabilities: 7 179,194, ,747,107 Total liabilities 179,194, ,747,107 Shareholders Equity /Capital: Share Capital: 8 1,000,000,000 1,000,000,000 Statutory Reserve 9 25,393,563 13,348,467 General Reserve 10 54,731,264 54,731,264 Retained Earnings 99,212,467 51,109,082 Total Shareholders Equity 1,179,337,294 1,119,188,813 Total Liabilities and Shareholders Equity 1,358,531,442 1,289,935,920 Off Balance Sheet Items Contingent liabilities - - Letters of guarantee - - Irrevocable letters of credit - - Indemnity Bond - - Other commitments Undisbursed contracted loans - - Total Off-Balance Sheet Items - - Net Asset Value per share The Annexed notes (1 to 21) form an integral part of these financial statements. Chief Financial Officer Managing Director & CEO Director Chairman Signed in terms of our separate report of even date. Date: 17 February 2015 Place: Dhaka Mahfel Huq & Co. Chartered Accounts 288

289 Profit and Loss Account For the year ended 31 December 2014 Notes (Amount In Taka) Operating Income Interest income ,775, ,995,639 Interest paid on deposits, borrowings etc. - - Net interest income 153,775, ,995,638 Other operating income ,210 4,356,860 Total operating income (A) 153,968, ,352,498 Operating Expenses Salaries and allowances 13 42,890,257 44,135,498 Rent, taxes, insurance, electricity etc. 14 4,162,332 3,229,943 Postage, stamp, telecommunication etc , ,102 Legal Expenses 750 5,590 Stationery, printing, advertisement etc. 16 1,282,074 1,379,401 Chief Executive officer s salaries and allowances , ,000 Directors fees , ,000 Auditors fees 211, ,000 Depreciation of assets 1,968,671 1,381,142 Other expenses 19 10,138,884 9,383,245 Total operating expenses (B) 62,350,421 60,384,921 Profit/(Loss) before amortization, provision & tax (C)=(A-B) 91,617,615 69,967,577 Provision for loans and advances - - Other provision - - Total provision (D) - - Net profit/(loss) before tax (E)= (C-D) 91,617,615 69,967,577 Provision for tax 31,392,137 31,771,223 Current tax 31,413,523 29,736,211 Prior tax - 1,880,693 Deferred tax (21,386) 154,319 Net profit/(loss) after tax 60,225,478 38,196,354 Less: Appropriations 12,045,096 7,639,269 Transferred to statutory reserve 12,045,096 7,639,269 Transferred to general reserve - - Retained surplus 48,180,382 30,557,085 Earnings Per Share (EPS) The Annexed notes (1 to 21) form an integral part of these financial statements. Chief Financial Officer Managing Director & CEO Director Chairman Signed in terms of our separate report of even date. Date: 17 February 2015 Place: Dhaka Mahfel Huq & Co. Chartered Accounts Annual Report

290 Statement of Cash Flows For the year ended 31 December 2014 (Amount In Taka) Cash flows from operating activities Interest receipts in cash 139,487, ,995,639 Interest payments - - Cash payment to employees (41,350,921) (44,135,498) Cash receipts from other activities 192,210 4,356,860 Receipts from other operating activities - - Payments for other operating activities (14,144,714) (14,533,442) Income Tax Paid (23,430,215) (31,771,233) Operating profit / (loss) before changing operating assets and liabilities 60,753,457 39,912,327 (Increase) / decrease in operating assets (244,797,142) (210,208,214) Loan to customers (244,797,142) (210,208,214) Receivable form Agrani Bank Ltd. - - Increase/(decrease) in operating liabilities 202,503, ,981,037 Deposit from customers - - Other liabilities 9,700,971 10,892,420 Loan recovered from customers 192,802, ,088,617 Net cash from operating activities (A) 18,460,114 60,685,150 B. Cash flows from investing activities - Other Asset (7,681,817) (1,765,032) Sales/(Purchase) of properties, plant & equipment (10,690,417) (5,284,589) Net cash from investing activities (B) (18,372,234) (7,049,621) C. Cash flows from financing activities Payment of long term borrowings - - Share money received during the period - - Net cash from financing activities (C) - - Net increase in cash and cash equivalents (A+B+C) 87,880 53,635,530 Cash and cash equivalents at the beginning of the period 829,446, ,810,609 Cash and cash equivalents at the end of the period 829,534, ,446,139 Chief Financial Officer Managing Director & CEO Director Chairman Signed in terms of our separate report of even date. Date: 17 February 2015 Place: Dhaka Mahfel Huq & Co. Chartered Accounts 290

291 Statement of Changes in Equity For the year ended 31 December 2014 (Amount In Taka) Particulars Paid up Capital Revaluation Reserve on Government Securities Statutory Reserve General Reserve Retained Earnings Total Opening Balance as at 1 January ,000,000,000-13,348,467 54,731,264 51,109,082 1,119,188,813 Prior Year Adjustments (Note: 20) (76,997) (76,997) Adjustment of Advance Tax Restated balance 1,000,000,000-13,348,467 54,731,264 51,032,085 1,119,111,816 General reserve Surplus/deficit on account of revaluation of properties Bonus share issue Issue Right Share Net profit for the year ended 31st December ,225,478 60,225,478 Statutory Reserve ,045,096 - (12,045,096) - Total Balance as at 31 December ,000,000,000-25,393,563 54,731,264 99,212,467 1,179,337,294 Chief Financial Officer Managing Director & CEO Director Chairman Signed in terms of our separate report of even date. Date: 17 February 2015 Place: Dhaka Mahfel Huq & Co. Chartered Accounts Annual Report

292 Liquidity Statement As at 31 December 2014 (Amount In Taka) Particulars Note more than 1 month term 1-3 months term 3-12 months term 1-5 years term Above 5 years term Total Assets Cash in hand (including balance with Bangladesh Bank) 5,121, ,121,190 Balance with other banks and financial institutions 305,700,000 32,400, ,312, ,412,829 Money at call and short notice Investments Loans, advances and leases 27,800,000 46,000, ,500, ,566, ,866,219 Fixed assets ,075,910 16,075,910 Other assets ,401,103 22,654,191-38,055,294 Total assets 338,621,190 78,400, ,213, ,220,410 16,075,910 1,358,531,442 Liabilities Borrowing from other banks and financial institutions Deposits and other accounts Provision and other liabilities ,421, ,773, ,194,148 Total liabilities ,421, ,773, ,194,148 Net Liquidity Gap 338,621,190 78,400, ,792, ,220,410 (106,697,181) 1,179,337,294 Net Liquidity Gap ,953,033 85,944, ,560, ,949,244 (162,217,853) 1,119,188,

293 Notes to the Financial Statements As at and for the year ended 31 December BACKGROUND INFORMATION 1.1 Establishment and status of Agrani SME Financing Company Limited The Agrani SME Financing Company Limited (the Company) has been incorporated as a public limited Company on 27 October, 2010 vide certificate of incorporation No. C /10. The company has taken over the ongoing work of Small Enterprise Development Project (A Norway and Agrani bank funded Project of Ministry of Finance, Bangladesh) on a going concern basis through a Vendor s Agreement signed between the Ministry of Finance of the People s Republic Bangladesh, the Board of Directors on behalf of the Agrani Bank Limited and the Board of Directors on behalf of the Agrani SME Financing Company Limited on 27 December, The company has set 31 December, 2011 as the effective date of handing over the SEDP operation to Agrani SME Financing Company Limited. The Company s current shareholdings comprise the Agrani Bank Limited and six other shareholders nominated by the Bank. The company has 42 branches as on 31 December, 2014 (with no overseas branch). 1.2 Nature of business The principal activities of the company are providing support to Small and Medium Enterprises all over the country through training programme on limited basis and providing loan to the customers. 2 SIGNIFICANT ACCOUNTING POLICIES 2.01 Statement of compliance The financial statements have been prepared on a going concern basis following accrual basis of accounting except for cash flow statement which is stated at in accordance with the Companies Act 1994, the Financial Institutions Act 1993, Securities and Exchange Commission s Rules, International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted in Bangladesh by the Institute of Chartered Accountants of Bangladesh as Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), except for the circumstances where local regulations and other applicable laws and regulations differ. 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 of Bangladesh Bank. The activities and accounting heads mentioned in the prescribed form, which are not applicable for the financial institutions, have been excluded in preparing the financial statements Basis of measurement These financial statements have been prepared based on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) 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 Disclosure of deviations from few requirements of BAS/BFRS due to mandatory compliance of Bangladesh Bank s requirements Bangladesh Bank (the local Central Bank) is the prime regulatory body for Non-Banking Financial Institutions (NBFI) in Bangladesh. The Company has departed from those contradictory requirements of BAS/BFRS in order to comply with the rules and regulations of Bangladesh Bank. Bangladesh Bank has issued template for financial statements which will strictly be followed by all banks and NBFIs. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income (OCI) nor are the elements of Other Comprehensive Income allowed to be included in the Single Comprehensive Income (OCI) Statement. As such the company does not prepare the other comprehensive income statement. However, the company does not have any elements of OCI to be presented. Annual Report

294 2.04 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 BDT has been rounded off to the nearest BDT Use of estimates and judgments The preparation of financial statements in conformity with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standard (BFRS) requires management to make estimates and assumptions that effect the reported amounts of assets, liabilities, revenue and expenses. It also requires disclosures of contingent asset 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, - Gratuity 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 Directors responsibility statement The Board of Directors takes the responsibility for the preparation and presentation of these financial statements Branch accounting The Company has 42 branches with no overseas branch as on December 31, Accounts of the branches are maintained at the head office from which these accounts are drawn up Accounting period The financial period of the company covers period from 1 January 2014 to 31 December Loans and advances Presentation of loans and advances Loans and advances are initially recognized at fair value, representing the cash advanced to the borrower plus the net of direct and incremental transaction costs and fees. They are subsequently measured at amortized cost shown at gross amount Provision for loans and advances Provision for loans and advances has been made on the basis of instructions contained in Bangladesh Bank BRPD Circular no.05 dated June 05, 2006 in relation with BCD Circular no.34 dated November 19, 1989, BCD Circular no. 20 dated December 27, 1994, BCD Circular no. 12 dated September 4, 1995, BRPD Circular no. 16 dated December 6, 1998, BRPD Circular no. 9 dated May 14, 2001, BRPD Circular no. 09 dated August 20, 2005 and BRPD Circular no. 17 dated December 06, Fixed assets and depreciation i) Recognition and measurement (Owned assets) Items of own property and equipment 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 Bangladesh Accounting Standard (BAS) 16 Property, Plant and Equipment. 294

295 ii) Recognition and measurement 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 BAS-16 Property, Plant and Equipment. Full depreciation is charged on addition 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: Furniture and Fixtures 10% Motor vehicles 20% Office equipment 20% Electric materials 20% Library Books 20% Computer and computer accessories 20% 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 Revenue recognition The areas specially in case of interest on loans and advances, all the employees related with the credit of the company are habituated to accounting the interest income on realization basis as the practice of last 15 years inherited from the SEDP project. Though the operations of the project have been taken over through the vendor s agreement on 27th October 2011, but practically concern officials are not yeat capable enough to calculate and account for interest on loans and advance on accural basis thererfore it appears that lot of mistakes may take place due to change in accounting policy and economic benefit may not be accurately determined until interest on loans and advances is received. Considering the circumstance as mentioned above, revenue has been recognized only when the interest on loan has been received by the company. Other revenues: Other charges on services rendered by the company are recognized as and when services are rendered Accounts receivable Accounts 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 Cash flow statements The cash flow statement is prepared using the direct method as stipulated in Bangladesh Accounting Standard (BAS) 7 Cash Flow Statements Write off: Write-off describes a reduction in recognized value. It refers to recognition of the reduced of zero value of an asset. Generally, it refers to an investment for which a return on the investment is not now possible or unlikely. The item s potential return is thus canceled and removed from ( written off ) the Company s balance sheet Employees benefit obligation As disclosed in note no. 7.2 to the financial statements, the company maintains Gratuity Fund that was funded from the salary of the employees of the company. This practice has been followed in line with practices which were followed by SEDP Project. Legal formalities relating to Gratuity Fund has not been done. Annual Report

296 2.16 Taxation i) Deferred tax Deferred tax has been calculated and accounted for in accordance with Bangladesh Accounting Standard - 12, Income Taxes ii) Current tax Provisions for current tax has been made on the basis of the profit for the year as adjusted for taxation purposes in accordance with the provisions of Income Tax Ordinance, 1984, amendments made thereto and prevailing practice. The current tax rate for the Company is 42.5% on taxable income Cash and cash equivalents Cash and cash equivalents comprise cash in hand, cash at bank and term deposits that are readily convertible to a known amount of cash and that are subject to an insignificant risk of change in value Earning per share (EPS) The Company calculates earning per share in accordance with Bangladesh Accounting Standards (BAS) 33 Earnings Per Share which has been shown in the face of the Profit and Loss Account Business commitments and contingencies There was no capital expenditure contracted but not incurred or provided for at 31 December 2014 (2013: nil). There was no material capital expenditure authorized by the Board but not contracted for at 31 December The Company had no claim, legal or other, against it which has not been acknowledged as debt at the balance sheet date Related party disclosure As per Bangladesh Accounting Standards (BAS) 24 Related Party Disclosures, parties are considered to be related if one of the party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The Company carried out transactions in the ordinary course of business on an arm s length basis at commercial rates with its related parties. Related party disclosures have been given in note 6.1 & Contingent liabilities and contingent assets 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. At the end of the balance sheet date the company does not have any contingent liability and contingent asset to recognize and disclose Particulars of audit committee The audit committee of the Board was duly constituted by the Board of Directors of the Company in accordance with the Bangladesh Bank s DFIM circular no. 13 dated October 26, The Audit Committee of the Board of Directors consisted of the following 5 (five) members of the Board: SL Name Designation 1 Muhammad Awal Khan Chairman 2 Mrs. Khondker Sabera Islam Member 3 Mizanur Rahmen Khan Member 4 Mr. A. K. M. Abdur Rafique Member 5 Md. Nazrul Islam Farazi Member 2.23 Foreign remittance There was no foreign remittance during the year

297 2.24 Liquidity statement The liquidity statement has been prepared in accordance with remaining maturity grouping of Assets and Liabilities as of the close of the year as per following bases: a) Balance with other bank and financial institutions are on the basis of their maturity term. b) Loans and advances are on the basis of their repayment/maturity schedule. c) Fixed assets are on the basis of their useful lives. d) Other assets are on the basis of their adjustment terms. e) Other liabilities are on the basis of their settlement terms Status of compliance of Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards In preparing the Financial Statements, Agrani SME Financing Company Limited applied following BAS: Name of the BAS BAS no. Status Presentation of Financial Statements 1 * Inventories 2 N/A Statement of Cash Flows 7 Applied Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied Events after the Reporting Period 10 Applied Construction Contracts 11 N/A Income Taxes 12 Applied Property, Plant and Equipment 16 Applied Leases 17 N/A Revenues 18 Applied Employee Benefits 19 Applied Accounting for Government Grants and Disclosure of Government Assistance 20 N/A The Effects of Changes in Foreign Exchange Rates 21 N/A Borrowing Costs 23 N/A Related Party Disclosures 24 Applied Accounting and Reporting by Retirement Benefit Plans 26 N/A Consolidated and Separate Financial Statements 27 N/A Investment in Associates 28 N/A Interests in Joint Ventures 31 N/A Financial Instruments: Disclosure and Presentation 32 * Earnings per share 33 Applied Interim Financial Reporting 34 Applied Impairment of Assets 36 Applied Provisions, Contingent Liabilities and Contingent Assets 37 Applied Intangible Assets 38 Applied Financial Instruments: Recognition and Measurement 39 * Investment Property 40 N/A Agriculture 41 N/A Share Base payment 2 N/A Business combination 3 N/A Insurance Contracts 4 N/A Non-current assets held for sale and discontinued operation 5 N/A Exploration for and Evaluation of Mineral Resources 6 N/A Financial Instruments: Disclosures 7 * Operating Segments 8 N/A *As the regulatory requirements differ with the standards, relevant disclosures are made in accordance with Bangladesh Bank s requirements (please see note 2.03). N/A= Not applicable. Annual Report

298 2.26 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 01 January 2012 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 (CDMD) have come fully in 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 CDMD guidelines Financial Institutions should maintain a Capital Adequacy Ratio (CAR) of minimum 10%. In line with CDMD guideline s requirement, Agrani SME Financing Company Limited is aware to ensure timely implementation of BASEL II accord Financial risk management Agrani SME Financing Company Limited always concentrates on delivering high value to its stakeholders through appropriate tradeoff between risk and return. A well structured and proactive risk management system is in place within the Company to address risk relating to credit, market, liquidity and operations. In addition to the industry best practices for assessing, identifying and measuring risks, the Company is also committed to follow the guidelines for managing core risk of financial instructions issued by the Country s Central Bank, Bangladesh Bank, vide FID Circular No. 10 dated September 18, 2005 for management of risk. Credit risk To encounter and mitigate credit risk the company employed multilayer approval process, policy for customers maximum asset exposure limit, mandatory search for credit report from Credit Information Bureau, looking into payment performance of customer before financing, annual review of clients, vigorous monitoring and follow up, 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 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, The Company has also strong access to money market and credit lines at a competitive rate through good reputation, strong earnings and financial strength. Liquidity Risk Liquidity requirements are managed on a day-to-day basis by the Company which is responsible for ensuring that sufficient funds are available to meet short term obligations, even in a crisis scenario, and to maintain a diversity of funding sources. The Company 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 Agrani SME Financing Company Limited, to address operational risks. Agrani SME Financing Company Limited has established an internal control & compliance department (ICCD) to address operational risk and to frame and implement policies to encounter such risks. The company have engaged experienced people to assess operational risk accros the company as a whole and ensures that an appropriate framework exists to identify, access and manage operational risk Expenses In terms of the provision of the Bangladesh Accounting Standard (BAS-1) Presentation of Financial Statements, all expenses are recognized on accrual basis. 298

299 2.29 Particulars of Directors and their interest in the Agrani SME Financing Company Limited ( ) Name and address Status Date of original appointment No. of shares held in the Bank Mr. Syed Abdul Hamid (Representing Chairman and Director 26/07/2010 9,999,988 Agrani Bank Ltd.) Mrs. Khondker Sabera Islam Director 26/07/ Mr. A. K. M. Abdur Rafique Director 26/07/ Muhammad Awal Khan Director 23/06/14 2 Mizanur Rahman Khan Director 1/12/14 2 Mr. Nazrul Islam Farazi Director 24/4/ Mr.A.K.M. Mujibur Rahman Managing Director and Chief Executive Officer 26/07/ Name of the Directors and their interest in different entities ( ) Name of the Directors Mr. Syed Abdul Hamid Designation with Company Chairman and Director Entities where they have interest Agrani Bank Limited. Mrs. Khondker Sabera Islam Director Independent Director outside of Agrani Bank Limited. Mr. A. K. M. Abdur Rafique Director Independent Director outside of Agrani Bank Limited. Position with the Entities Managing Director and Chief Executive Officer Ex-Deputy Managing Director Research fellow Muhammad Awal Khan Director Agrani Bank Limited. Deputy Managing Director Mizanur Rahman Khan Director Agrani Bank Limited. Deputy Managing Director Mr. Nazrul Islam Farazi Director Agrani Bank Limited. General Manager Mr.A.K.M. Mujibur Rahman Managing Director and Chief Executive Officer Agrani SME Financing Company Limited Comparative Information: Comparative information have been disclosed in respect of year ended from 01 January 2013 to 31 December 2013 for all numerical information in the financial statements and also the narratives and descriptive information when it is relevant for understanding of the current year s financial statements Incentive Bonus: Incentive bonus amounting to Taka 3,230,864 is charged against current year s profit as per confirmation from the management. Annual Report

300 Notes (Amount In Taka) Balance with Other Banks and Financial Institution 824,412, ,370,786 Short term deposit ,537, ,166,407 Fixed deposit Annex-1 716,875, ,204, Balance with Other Banks and Financial Institution Local currency ,537, ,166,407 Foreign currencies Local currency 107,537, ,166,407 Faridpur Annex-3 37,376,947 69,708,783 Mymensingh Annex-3 30,493,691 51,059,996 Head office- Dhaka Annex-3 39,666,659 26,397, Cash Reserve Requirement (CRR) and Statutory Liquidity Reserve (SLR) Cash Reserve Requirement and Statutory Liquidity Reserve have been calculated and maintained in accordance with Financial Institution Act, 1993 & Financial Institution Regulations 1994 and FID Circular No. 06 dated November 06, 2003 and FID Circular No. 02 dated November 10, The companies do not have any term deposit, therefore there is no scope of maintaining Cash Reserve Requirement (CRR). Statutory Liquidity Reserve (SLR) has been calculated at the rate of 2.5% on total liabilities. SLR is maintain in liquid assets in the form of cash in hand (notes & coin in BDT). From January 2013, the company is maintaining a account with Bangladesh Bank where sufficient amount to maintain the Statutory Liquidity Reserve (SLR) has been deposited. As on 31 December 2013 the balance was Tk. 50,00, Loans, cash credit and overdraft etc. Annex-4 474,866, ,132, Sector wise details of loans and advances i) Agricultural industries 165,953, ,190,444 ii) Textiles, Apparels & Accessories 3,322,210 4,019,003 iii) Food and Beverage 4,189,320 5,798,487 iv) Pharmaceuticals 624, ,020 v) Leather & Leather Products, Chemicals 103, ,039 vi) Power, Energy & Engineering 4,185,140 5,314,120 vii) IT & Services 1,787,420 1,004,323 viii) Transportation 1,083,210 1,094,105 ix) Other industries 26,055,409 22,171,200 x) Trade & Commerce 267,563, ,998,917 Total 474,866, ,132, Loans and advances geographical location-wise Urban 34,957,198 32,376,922 Faridpur 209,032, ,865,355 Mymensingh 230,876, ,890,382 Total 474,866, ,132,

301 Notes (Amount In Taka) Details of large loan / investments There were no clients with outstanding amount and classified loans/investments exceeding 15% of total capital of the financial institution. 4.4 Particulars of Loans and advances i) Loans and advances considered good in respect of which the 86,726,414 89,526,950 financial institution is fully secured ii) Loans and advances considered good against which the financial institution holds no security other than the debtors personal guarantee. - 5,689,669 iii) Loans and advances considered good secured by the 388,139, ,916,040 personal undertaking of one or more parties in addition to the personal guarantee of the debtors. iv) Loans and advances adversely classified for which no - - provision is created v) Loans and advances due by directors or officers of the - - financial institution or any of them either separately or jointly with any other persons. vi) Loans and advances due from companies or firms in which - - the directors of the financial institution have interest as directors, partners or managing agents or in case of private companies, as members vii) Maximum total amount of advances including temporary - - advances made at any time during the year to directors or managers or officers of the financial institution or any of them either separately or jointly with any other person. viii) Maximum total amount of advances including temporary - - advances granted during the year to the companies or firms in which the directors of the financial institutions have interest as directors, partners or managing agents or in the case of private companies, as member ix) Due from bank and financial institutions - - Total outstanding ,866, ,132,659 x) Classified Loans and advances a) Classified Loans and advances on which interest has not ,214,000 37,993,000 been charged b) Provision on bad Loans and advances ,153,411 53,306,720 c) Amount of written off Loans and advances 39,769,799 - Total amount realized against loans and advances previously 12,416,417 - written off d) Provision kept against loans and advances classified as bad 34,833,000 - debts e) Interest credited to Interest Suspense Account - - xi) Cumulative amount of written off Loans and advances 45,426,698 - Opening Balance 25,656,899 - Amount written off during the year 39,769,799 - The amount of written off Loans and advances for which law suits have been filed. 1,333,317 - Annual Report

302 (Amount In Taka) Classification of loans, advances and leases Unclassified: Standard loan 395,634, ,071,659 Special mention account (SMA) 26,018,000 31,068,000 Sub. Total 421,652, ,139,659 Classified Sub-standard 3,511,000 8,608,000 Doubtful 5,096,000 3,338,000 Bad / Loss 44,607,000 26,047,000 Sub. Total 53,214,000 37,993,000 Total 474,866, ,132, Particulars of required provision for loans and advances General Provision Rate Base for provision Required provision Loans and Advances(Excluding SMA) 0.25% 395,634, ,086 Special mention account (SMA) 5% 26,018,000 1,300,900 Sub. Total 421,652,219 2,289,986 Specific Provision Sub-standard 20% 3,104, ,800 Doubtful 50% 3,228,000 1,614,000 Bad / Loss 100% 34,833,000 34,833,000 Sub. Total 41,165,000 37,067,800 Total 462,817,219 39,357,786 Required provision for loans and advance 39,357,786 25,561,279 Total provision maintained (Note 7.1) 55,153,411 52,841,033 Excess / (short) provision at 31 December, ,795,625 27,279,

303 5 Fixed assets, including Premises, furniture and fixtures (Amount in Taka) SL No. Name of assets Value at cost Depreciation Rate Opening Addition Disposal Closing % Opening Charged Adjustment Closing Accumulated depreciation Written down value 1 Motor vehicles 499,953 5,722,846-6,222,799 20% 199, , , ,841 5,443,958 2 Computers 3,590,553 3,227,899-6,818,452 20% 798, ,061-1,566,821 1,566,821 5,251,631 3 Furniture and fixtures 4,791,045 1,657,895-6,448,940 10% 877, ,778-1,407,929 1,407,929 5,041,011 4 Other equipment 144,099 2, ,491 20% 41,043 29,259-70,302 70,302 76,189 5 Electrical equipment 275, , ,527 20% 55,133 61, , , ,681 6 Library books % Balance as at 31 December ,301,232 10,715,417-20,016,649 1,972,068 1,968,671-3,940,739 3,940,739 16,075,910 Balance as at 31 December ,016,643 5,284,589-9,301, ,926 1,381,142-1,972,068 1,972,068 7,329,164 Annual Report

304 Notes (Amount In Taka) Other assets: 38,055,294 16,027,957 Security deposit 1,000 1,000 Tax Deducted at Sources 15,401,103 7,729,786 Receivable from Agrani Bank Limited 6.1 7,322,127 7,322,127 DPO current account -Mymensingh 593, ,532 Accrued Interest Income 14,295,520 - Advance rent on premises 60,500 - DPO current account -Faridpur 381, , Receivable from Agrani Bank Limited 7,322,127 7,322,127 Opening balance during the year 7,322,127 7,322,127 Receivable on account of revolving fund during the period - - Received during the year - - Closing balance during the year 7,322,127 7,322,127 7 Other liabilities: 179,194, ,747,106 Provision for loans and advances ,153,411 52,841,033 Gratuity fund ,633,961 16,737,804 Provision for expenses 7.3 1,766, ,800 Provision for incentive bonus 7,500,000 6,000,000 Payable to Agrani Bank (Reimbursement of bank staff benefits) - 23,300 Provision for CPF 5,181 1,295,797 Provision for Super Annulations Fund 8,070 2,569,949 Provision for Vehicle Loan - 665,739 Provision for Staff House Building Loan - 1,892,001 Provision for Computer Loan - 49,200 Provision for Gratuity 37, ,572 Provision for Current tax 39,600,222 31,616,914 Provision for Deferred tax 132, ,319 Mymensing Zonal office - 84,670 Benevolent fund ,080 Income tax Payable - 9,008 Payable to Agrani Bank ,672,663 55,672,663 CPO Current Account 509, ,257 Consumer credit 5,000 - Security deposit 2,500 - Provision for audit fees 165, ,

305 Notes (Amount In Taka) Provision for loans and advances 55,153,411 52,841,033 Opening balance at January 01, ,841,033 62,928,232 Add: Addition during the period Risk fund 2% 14,539,483 11,949,375 Risk Coverage Fund 1% 2,045,380 3,620,325 Adjustment (7.1.1) 25,497,314 - Less: Write off Loan & Advance (39,769,799) (25,656,899) Closing balance at December 31, ,153,411 52,841, Adjustment represent interest accrued inadvertently by some branches on loan and advance which were not realised. 7.2 Provision for gratuity fund 18,633,961 16,737,804 Opening balance at January 01, ,737,804 14,362,766 Add: Transfer during this period 750, ,080 Add: Interest on Gratuity Fund FDR 1,760,527 1,678,958 Less: Payment during the period (615,000) - Closing balance at December 31, ,633,961 16,737, Provision for expenses 1,766, ,800 Opening balance at January 01, , ,741 Add: Addition during the period ,558, ,800 Less: Transfer during the period 95,000 (271,741) Closing balance at December 31, ,766, , Provision for expenses added during this period 1,558, ,800 Provision for Closing expenses 58,000 68,600 Provision for Consultancy fee - 50,000 Provision for lunch subsidy - 25,200 Provision for director allowance - 10,000 Provision for CSR 1,500, Payable to Agrani Bank Ltd. Tk. 55,672,663 This represents payable to Agrani Bank Limited on account of final settlement of outstanding loan and advance and interest thereon as on the dates of closing of loan giving activities jointly with the company by the Agrani Bank Ltd. The account has been taken as determined by the Agrani Bank Ltd., item wise detailed calculation and reconciliation of the balance is yet to be completed. Annual Report

306 Notes (Amount In Taka) Share capital 8.1 Authorized Capital : 5,000,000,000 5,000,000,000 The authorized capital of the company is Taka 5,000,000,000 divided into 50,000,000 ordinary shares of Taka each. 8.2 Issued, subscribed and fully paid up capital : Opening balance 1,000,000,000 1,000,000,000 Add: Issued bonus share - - Add: Issued right share - - Closing balance 1,000,000,000 1,000,000,000 During the year 2012 the company has issued 400,000 bonus share from General reserve and Right share (5:1) to meet the capital requirements as prescribed by Bangladesh Bank through DFIM circular dated on July 24, The paid up capital of the company is Taka. 1,000,000,000 divided into 10,000,000 ordinary shares of Taka each. This has been made in accordance with the Financial Institution Act Capital Adequacy ratio (CAR) In terms of section 13(2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars nos. 01,14,10 and 05 dated January 08, 1996, November 25, 2002 and May 14, 2007 respectively required a capital of the Bank at the close of the business on 31 December 2014 was Taka 1000,000,000(10% of risk weighted assets i.e. TK. 91,818,924 or as per Bangladesh Bank DFID Circular no - 5 dated 24th July 2011 required paid up capital Tk. 1000,000,000) as against available core capital of Taka 1,179,337,294 and supplementary capital of Taka 2,289,985 making the total capital of Taka 1,181,627,279 thereby showing a surplus capital/equity of Taka 181,627,279 at that date. Details are shown below: Total Asset including off balance sheet items 1,358,531,442 1,289,935,920 Total risk weighted asset 918,189, ,025,460 Required capital (10% of risk weighted asset) 91,818,924 51,602,546 Minimum Capital Required 1,000,000,000 1,000,000,000 Actual Capital Held 1,181,627,279 1,121,662,393 Core Capital ,179,337,294 1,119,188,813 Supplementary Capital ,289,985 2,473,580 Total Capital Surplus/ (deficit) 181,627, ,662,393 Capital Adequacy Ratio (CAR) Based on Basel II framework 2014 Capital requirement: Required Held Tier -I (Minimum 5% of RWA) 1,000,000,000 1,179,337,294 Tier -II (Balancing) 45,909,462 2,289,985 Total 1,045,909,462 1,181,627,

307 Notes (Amount In Taka) Core Capital (Tier -I) Paid-up Capital 1,000,000,000 1,000,000,000 Statutory Reserve 25,393,563 13,348,467 General Reserve 54,731,264 54,731,264 Retained earnings 99,212,467 51,109,082 1,179,337,294 1,119,188, Supplementary Capital (Tier - II) General Provision maintained against unclassified loans 2,289,985 2,473,580 General 1% against off balance sheet exposures - - Asset revaluation reserve - - Revaluation reserve for equity instruments up to 10% - - Revaluation on investment - - 2,289,985 2,473,580 Total Actual Capital Maintained 1,181,627,279 1,121,662,393 9 Statutory reserve Opening balance 13,348,467 5,709,198 Add: Transfer from appropriation of profit 12,045,096 7,639,269 Closing Balance 25,393,563 13,348, General Reserve 54,731,264 54,731,264 Opening balance 54,731, ,731,264 Add: Transfer from appropriation of profit - - Less: Issuing bonus share - - Closing balance 54,731,264 54,731, Interest income Interest on loans and advances Annex-2 58,664,199 48,641,961 Recovered from write-off loan and advance Annex-2 12,416,417 - Interest on short term deposit Annex-2 4,472,941 4,145,221 Interest on fixed deposit Annex-1 78,222,269 73,208,457 Total income 153,775, ,995, Other Operating Income 192,210 4,356,860 Other Income 12,510 4,300,410 Duplicate certificate fees 950 3,200 Training Fees 170,750 53,250 Sale of tender form 8,000 - Annual Report

308 Notes (Amount In Taka) Salaries & Allowances: 42,890,257 44,135,498 Salaries 29,989,299 29,528,318 Incentive Bonus 3,230,864 6,618,397 Lunch Subsidy 6,523,354 4,666,880 Wages Paid 403, ,333 Bonus 2,322,612 2,558,312 Conveyance Allowances 141, ,944 Overtime 278, ,334 Gratuity - 152, Rent, Taxes, Insurance, Electricity etc. 4,162,332 3,229,943 Rent, rate and taxes 3,562,903 2,906,548 Insurance 176,897 54,358 Power and electricity 422, , Postage, Stamps, Telecommunication etc.: 241, ,102 Telephone charges (Office) 146, ,414 Telephone charges (Residence) 1,020 4,384 Postages 94, , Stationery, Printing, Advertisement etc.: 1,282,074 1,379,401 Newspaper & periodicals 171, ,982 Printing & stationery 719, ,710 Advertisement & publicity 390, , Managing Director s Salary and benefits 960, ,000 Managing Director of the company has received remuneration for the period from January to June at the rate of Tk. 10,000/- per month and from July to December 2014 at the rate of Tk.1,50,000/- per month as per contract. 18 Directors Fees: Honorarium & fees 495, ,000 Each director for every attendance in Board Meeting gets Tk.5,000.Except this, no other charges or allowance is paid to the directors of the company. 308

309 Notes (Amount In Taka) Other Expenses: 10,138,884 9,383,245 Petroleum, oil & lubricant for vehicles 3,194,561 2,765,165 Travelling expenses(inland) 511, ,856 Training expenses 385,289 36,973 Upkeep of office premises 60, ,459 Business development expenses 321,724 87,826 Repairs-motor vehicles 622,857 1,223,810 Repairs-furniture & fixtures 68,634 8,000 Repairs-office equipment 25,952 48,240 Repairs & maintenance of computer 166,122 17,845 Repairs elect. Equipment & lighting materials 305, ,113 & internet 227,063 77,925 Consultancy Fees 777, ,929 Closing Expenses 222, ,500 Entertainment 818, ,474 Fees & Commission 7, ,421 Leave Encashment 251, ,490 Washing Charges 1,345 1,985 Recruitment charges 341,626 2,178,325 Bank Charge 88, ,909 Excise Duty 165,630 - Fringe benefit 1,340 - Corporate social responsibility 1,575,000 - Other charges - 30, Prior Years Adjustment (76,997) 334,841 Rectification of Bank Balance (76,997) 3,210 Loan out standing - 418,192 Tax deducted at source - (86,561) 21 Performance Evaluation Return on average investment 4.70% 3.47% Return on average asset 3.55% 3.02% Average yield on Loan & Advance 15.59% 8.56% Average yield on Balance with Banks 10.03% 9.67% Earning Per Share (Taka) Net Asset Value Per Share Chief Financial Officer Managing Director & CEO Director Chairman Annual Report

310 Schedule of Fixed Deposit With other Banks As at 31 December 2014 SL No. Branch name Fund Opening date Value as on Addition Interest received Tax deducted at source Bank charge Others (Excise Duty) Annex-1 (Amount in Taka) 1 Phulpur RF 11-Jul ,529-52,180 5, ,141-2 Sherpur Sadar RF 20-Jul ,826 36,080 3,608 2,100 (80,118) 879,316-3 Charvadrashan RF 24-Aug-11 99,880 99,880-4 Sadarpur RF 17-Feb-11 1,104, ,461 11, ,210,899-5 Nagarkanda RF 11-Sep-11 1,923, ,703 26,594 2,100 2,135,101-6 Boalmari RF 15-Sep-11 1,134,471 63,055 1,050 6,306 1,190,170-7 Ahladipur RF 25-Aug ,477 65,965 1,726 5, ,766-8 Madaripur RF 7-Jun , ,354-9 Kalkini RF 6-Apr , , , Borhamgonj RF 12-May-11 1,365,677 1,365, Shariatpur RF 6-Sep ,837 25,000 2, , Agrani Bank (Principal Br.) RF 24-Mar-13 16,319,372-1,876, ,615 5,000 18,002, Agrani Bank (Principal Br.) RF 2-Jul-13 17,500,000-2,187, ,750 5,000 19,463, Agrani Bank (Principal Br.) RF 30-Sep-13 10,270,000-1,180, ,094 1,000 11,331,841 Total bad debt fund 52,812,800-5,971, ,002 8,050 19, ,116 8,983,147 48,798, Agrani Bank (Amin Court Br.) GFDR 21-Mar-12 27,328,791-3,142, ,281-10,000-30,147, Agrani Bank (Amin Court Br.) GFDR 23-Apr-12 49,212,280-1,476, ,637-5,000-50,536, Agrani Bank (Amin Court Br.) GFDR 2-Jul ,967,635-13,995,955 1,399,595-10, ,553, Agrani Bank (Amin Court Br.) GFDR 5-Nov-12 22,414,706-1,878, ,809-10,000 24,094, Agrani Bank (Principal Br.) GFDR 29-Dec ,234,303-31,650,795 3,165,079-10, ,710, Agrani Bank (Moulovi Bazar) GFDR 16-Sep-12 38,700,253-4,450, ,053-15,000 42,690, Bank Asia (M.C.B. Branch) GFDR 30-Nov-11 31,959,753-1,857, ,742-5,000 33,626, Agrani Bank (Principal Br.) GFDR 25-Mar-14 15,000, ,223 73,922 15,665, Agrani Bank (Principal Br.) GFDR 14-Jul-14 20,000, ,000 45,000 20,405, Agrani Bank (Principal Br.) GFDR 13-Mar-13 21,759,163-2,501, ,173 24,010, Agrani Bank (Danmondi Br.) GFDR 24-Jun-13 11,169,389-1,284, ,672-10,000 12,251, Agrani Bank (Amin Court Br.) GFDR 12-May-13 8,684, ,349 49,935 1,000 9,132, First Security Islami Bank ltd(dilkusa Br.) GFDR 20-Jul-14 26,000,000 26,000, The Farmers Bank Ltd (Imamgonj Br.) GFDR 30-Dec-14 50,000,000 50,000,000 Total company fund 598,430, ,000,000 63,926,749 6,456,898-76, ,422, ,401, Agrani Bank (Moulovi Bazar) GF 24-Dec-14 10,000,000 10,000, Agrani Bank (Amin Court Br.) GF 14-Mar-12 10,505,196-1,208, ,810-10,000 11,582, Agrani Bank (Amin Court Br.) GF 18-Jun-13 3,171, ,679 36,468 2,000-3,497, Agrani Bank (Amin Court Br.) GF 5-Nov-12 2,240, ,751 18,775-1,000-2,408,902 Total gratuity fund 15,917,241 10,000,000 1,760, ,053-13,000-11,582,484 15,906, Phulpur LRCF 23-Mar ,607-33,529 3, , Sherpur Sadar LRCF 5-May , , Sadarpur LRCF 6-Jan ,305-24,434 2, , Nagarkanda LRCF 15-Sep ,027-14,079 1, , Boalmari LRCF 5-Aug ,550-11,340 1, , Madaripur LRCF 132, , Kalkini LRCF 197,700 53, (2,300) 253, Agrani Bank (Principal Br.) LRCF 2-Jul-13 3,263, ,231 37,523 1,000 3,600, Agrani Bank (Principal Br.) LRCF 24-Mar-13 3,000, ,000 37,500 1,000 3,336, Agrani Bank (Principal Br.) LRCF 30-Sep-13 2,567, ,148 29,515 1,000 2,832,133 Total loan risk coverage fund 10,043,732-1,182, , , ,106 1,209,000 9,769,214 Grand Total 677,204, ,000,000 72,841,263 7,322,828 8, , , ,197, ,875,532 Prior Year Adjustment Maturity/ Transfer Value as on Particulars Interest income TDS Total bad debt fund 5,971, ,002 Total loan risk coverage fund 1,182, ,875 Total company fund 63,926,749 6,456,898 Total gratuity fund 1,760, ,053 Total company fund 63,926,749 7,322,828 Add:Accured Interest on FDR 14,295,520 Balance transferred to income statement 78,222,

311 Schedule of Interest Income As at 31 December 2014 Interest on SL No Branch Loans & Advance Recovered from previously write-off Revolving Loan Fund Interest Income Fund Bad Debt Fund Interest on Deposit Risk Coverage Fund Credit Fund Gratuity Fund TA fund Principal Branch Acc Annex-2 (Amount in Taka) Mymensingh zone 1 Bhaluka 1,166,210 19,800 76,589 3,366 1, ,268,047 2 Fulbaria 1,620, ,616 26,933 7,834 3, ,843,841 3 Gafargaon 1,648, ,279 41,928 3, ,838,570 4 Gouripur 1,456, ,056 91,027 5,178 2, ,658,820 5 Haluaghat 2,045,552 98,755 21,449 5,783 2, ,174,992 6 Ishwarganj 1,257, ,400 45,576 4,908 1, ,075,350 7 Mym. Sadar 2,415, , ,086 7,673 1, ,675,090 8 Muktagacha 2,284,747 5, ,434 8,099 2, ,413,072 9 Nandail 1,603, , ,644 7,180 2, ,079, Phulpur 1,891, ,871 20,221 6,426 2, ,103, Trishal 1,688, ,508 49,025 4,243 1, ,941, Kishore. Sadar 1,449, ,368 36,427 6,149 4, ,735, Karimganj 1,552,150 22,880 39,809 5,372 1, ,622, Katiadi 1,014,593 15,700 51,929 7,005 2, ,091, Jamalpur Sadar ,991 5,103 6,529 1, ,196, Sherpur Sadar 944, ,973 71,400 1, ,446, Netro. Sadar 1,798,659 27,790 21,959 5,825 5, ,860, Kendua 888,021 68,204 39,270 3,316 2, ,001, Modhupur 1,255,022 48,765 26,432 3,339 1, ,335, Gopalpur 1,097,757 80,985 19,945 3,403 2, ,204, Pakundia Mymensingh DPO - 219, ,220 Sub total 30,725,902 3,646,081 1,257, ,664 44,822 4, ,785,238 Faridpur zone 23 Zilla Parishad 1,883, ,695-7, ,402, Charvadrashan 439, , ,910 3,214 1, ,360, Sadarpur 1,893, , ,373 8,441 1, ,493, Bhanga 1,923, , ,638 3, ,867, Annual Report

312 Interest on SL No Branch Loans & Advance Recovered from previously write-off Revolving Loan Fund Interest Income Fund Bad Debt Fund Interest on Deposit Risk Coverage Fund Credit Fund Gratuity Fund TA fund Principal Branch Acc 27 Nagarkanda 2,243, ,725 10,600 7,690 4, ,931, Boalmari 1,917, ,848 67,567 5,414 1, ,227, Modhukhali 1,353, ,905 4,212 1, ,860, Baliakanda 790, ,974 75,011 5,319 3, ,346, Rajbari 2,045, ,891 31,773 8,536 6, ,612, Pangsha 1,579, ,563 20,401 4,636 1, ,773, Ahladipur 846,843 32,735 42,724 2,727 1, , Gopalgonj 1,217, , ,897 5,141 1,614 3, ,801, Tungipara 839, ,948 85,052 2,841 1, ,082, Kotalipara 1,167, , ,473 4,134 2, ,606, Madaripur 1,426, , ,208 6,005 4,336 1, ,237, Kalkini 1,343, ,684 22,071 5,788 3, ,973, Takerhut 1,405, , ,861 5,633 1, ,204, Borhamgonj 766, ,600 78,323 1,993 2, , Shariatpur 772, ,858 67,201 3,342 1, ,133, Alfadanga 2,072, ,422 10,195 11,137 2, ,351, Faridpur DPO - 120, ,613 Sub total 27,926,687 8,770,336 1,413, ,715 49,347 11, ,284, Head Office 11,610 Dhaka CPO 45 Amin Court - 99,499 99, Pilot Phase Motijheel - 770,618 46, , , ,498 1,488,057 Sub total - 770,618 46, , , ,997 1,587,556 Grand total 58,664,199 12,416,417 3,441, , , , ,997 75,657, Interest income Interest on loans and advances 58,664,199 Recovered from previously write-off loans and advance 12,416,417 Interest on short-term deposit 4,478,594 Less: Last year Adjustment 5,653 4,472,941 Recognised income 75,553,

313 Fund wise Cash at Bank As at 31 December 2014 SL No Branch Mymensingh zone Revolving Loan fund Interest income fund Bad debt fund Risk coverage fund Credit fund Gratuity fund TA fund Principal Branch Acc Annex-3 (Amount in Taka) Bhaluka 306, ,711 44, ,695 3,470,728 2 Fulbaria 1,167, , , ,001,007 1,078,574 3 Gafargaon 979, ,775 61, ,545,516 2,187,528 4 Gouripur 964, ,372 90, ,462,204 2,627,284 5 Haluaghat 872, ,223 46, ,472,611 1,712,024 6 Ishwarganj 922, ,687 56, ,579,287 1,842,190 7 Mym. Sadar 1,280, ,595 47, ,138,672 3,879,492 8 Muktagacha 1,499, , , ,276,266 5,203,954 9 Nandail 1,783, ,336 95, ,419,799 4,373, Phulpur 653, ,861 62, ,284,902 1,002, Trishal 672, , , ,300, , Kishore. Sadar 1,457, ,151 91, ,066,440 1,814, Karimganj 313, ,386 81, , , Katiadi 506, , ,381 3, ,226,693 3,576, Jamalpur Sadar 498, , , ,150,368 4,334, Sherpur Sadar 718, ,962 14, ,183,852 4,983, Netro. Sadar 523, , , ,030,857 1,218, Kendua 684, , , ,040,564 2,189, Modhupur 934, ,027 74, ,412,402 1,412, Gopalpur 599, ,800 34, ,976 2,634, Pakundia 650, , Mymensing DPO 778, ,064 - Mymensing DPO-SV 89,084 89,084 Sub total 18,854,304 9,963,488 1,671,677 4, ,493,691 51,059,996 Faridpur zone 23 Zilla Parishad 428, ,256 56,941 4, ,341,998 1,588, Charvadrashan 2,028, ,633 64,135 22, ,531,590 4,921, Sadarpur 1,877,783 1,304,057 62,258 87, ,331,610 3,246,070 Annual Report

314 SL No Branch Revolving Loan fund Interest income fund Bad debt fund Risk coverage fund Credit fund Gratuity fund TA fund Principal Branch Acc Bhanga 624,122 1,025,803 85,590 14, ,749,790 6,866, Nagarkanda 739,961 1,115, ,799 12, ,063,310 3,051, Boalmari 214, , ,085 15, ,087,216 6,201, Modhukhali 662, , ,160 18, ,570,074 7,271, Rajbari 843, , ,120 13, ,773,764 2,393, Pangsha 1,313, , ,429 24, ,966,912 2,367, Ahladipur 553, ,259 18, ,829 2,499, Gopalgonj 1,049, ,085 55,073 90, ,579,697 4,900, Tungipara 488, , ,181 5, ,924 3,954, Kotalipara 716, ,773 81,435 39, ,277,345 3,872, Madaripur 2,912, , ,345 51, ,786,181 5,315, Kalkini 230, , ,263 3, ,632 1,074, Takerhut 1,493, ,264 80,543 2, ,412,645 2,995, Borhamgonj 582, ,414 61,293 19, ,487 2,624, Shariatpur 1,233, , ,257 9, ,692,349 4,563, Baliakanda 401, , ,830 22, , Alfadanga 2,380, , ,858 32,111 3,172, Faridpur DPO 1,421, ,421,964 - Faridpur DPO-SV 127, ,182 Sub total 22,327,725 12,345,015 2,213, , ,376,947 69,708,783 Dhaka CPO 44 Amin Cort 801, ,670,031-1,266,261 4,737,609 2,784, Pilot Phase - 3, ,222 4,416, Motijheel - 1,699,964 9,841,498 1,135, ,174-21,268,102 34,912,494 19,196, Head Office Branch 11,676 1,658 13,334 Sub total 801,317 1,714,862 9,843,156 1,135,756-3,637,205-22,534,363 39,666,659 26,397,627 Grand total 41,983,346 24,023,365 13,728,472 1,630,546-3,637,205-22,534, ,537, ,166,406 Total Bank balance in Headoffice 39,666,659 Total Bank balance in Faridpur Zone 37,376,947 Total Bank balance in Mymensing Zone 30,493,691 Closing Balance In Bank 107,537,

315 Schedule of Loan Outstanding (Principal) As at 31 December 2014 (Amount in Taka) Annex-4 (Amount in Taka) SL No. Branch name Mymensingh Zone 1 Bhaluka 9,336,668 7,193,639 2 Fulbaria 12,189,378 11,574,525 3 Gafargaon 11,804,403 8,868,710 4 Gouripur 10,781,841 10,560,522 5 Haluaghat 19,902,349 15,097,104 6 Ishwargonj 12,133,078 7,045,427 7 Mymensingh Sadar 16,265,132 12,983,557 8 Muktagacha 18,113,520 16,886,454 9 Nandail 8,778,622 6,947, Phulpur 18,101,188 12,664, Trishal 11,125,816 8,509,930 Sub total 148,531, ,332,186 Kishoregonj Zone 12 Kishoregonj Sadar 13,994,301 12,843, Karimgonj 12,844,980 9,942, Katiadi 8,435,147 6,278, Pakundia 350,000 Sub total 35,624,428 29,065,651 Jamalpur Zone 16 Jamalpur Sadar 10,335,029 6,341, Sherpur Sadar 10,404,662 3,866,692 Sub total 20,739,691 10,208,116 Netrokona Zone 18 Netrokona Sadar 16,814,150 14,896, Kendua 7,021,355 6,594,640 Sub total 23,835,505 21,491,110 Tangail Zone 20 Modhupur 10,768,994 7,663, Gopalpur 7,640,880 6,113,135 Sub total 18,409,874 13,776,877 Faridpur Zone Annual Report

316 SL No. Branch name Zilla Parishad 18,411,799 19,393, Charvadrashan 7,024,286 10,646, Sadarpur 13,422,728 14,352, Bhanga 12,288,490 11,811, Nagarkanda 14,340,727 16,968, Boalmari 15,609,253 37,141, Modhukhali 12,579,153 21,297, Baliakandi 7,363, Rajbari 16,819,477 17,937, Pangsha 12,467,392 12,315, Ahladipur 7,908,270 5,860, Alfadanga 18,165,917 Sub total 156,400, ,724,655 Gupalgonj Zone 34 Gopalgonj 8,489,526 8,613, Tungipara 6,658,902 7,060, Kotalipara 7,880,416 7,503,713 Sub total 23,028,844 23,177,747 Madaripur Zone 37 Madaripur 10,735,916 13,396, Kalkini 11,514,436 11,032, Takerhat 10,725,525 14,879, Borhamgonj 7,972,651 7,998, Shariatpur 7,066,116 6,048,559 Sub total 48,014,644 53,356, Dhaka(Principal Br) 280,267 Grand total 474,866, ,132,

317 Agrani Exchange House Private Limited Singapore Annual Report

318 318

319 Annual Report

320 320

321 Annual Report

322 322

323 Annual Report

324 324

325 Annual Report

326 326

327 Annual Report

328 328

329 Annual Report

330 330

331 Annual Report

332 332

333 Annual Report

334 334

335 Annual Report

336 336

337 Annual Report

338 338

339 Annual Report

340 340

341 Annual Report

342 342

343 Annual Report

344 344

345 Annual Report

346 346

347 Annual Report

348 348

349 Annual Report

350 350

351 Agrani Remittance House SDN. BHD. Malaysia Annual Report

352 352

353 Annual Report

354 354

355 Annual Report

356 356

357 Annual Report

358 358

359 Annual Report

360 360

361 Annual Report

362 362

363 Annual Report

364 364

365 Annual Report

366 366

367 Annual Report

368 368

369 Annual Report

370 370

371 Annual Report

372 372

373 Annual Report

374 374

375 Annual Report

376 376

377 Annual Report

378 378

379 Agrani Exchange Company (Australia) Pty. Ltd. Annual Report

380 380

381 Annual Report

382 382

383 Annual Report

384 384

385 Annual Report

386 386

387 Annual Report

388 388

389 Agrani Remittance House Canada Inc. Annual Report

390 AGRANI REMITTANCE HOUSE CANADA INC. (A subsidiary Company of Agrani Bank Limited, 100% state owned commercial Bank of Bangladesh) 2960 Danforth Avenue, Toronto, Ontario, M4C 1M6, Canada (Federally Incorporated in Canada under Canada Business Corporations Act.) Incorporation No: DIRECTORS REPORT In accordance with the Section 155 (1) (a) (b) (c) and 156 of Canada Business Corporations Act (R.S.C., 1985, c. C-44), the Directors of a corporation shall place before the shareholders at every annual meeting. To comply with the above mentioned Section of the Law, the Board of Directors of Agrani Remittance House Canada Inc. (ARHC) is pleased to present its 1st Annual Report with the Audited Financial Statement for the year ended December 31, DIRECTORS: The Directors, who held office at the end of the financial year, present their report to the member together with the audited financial statements of the company. Dr. Zaid Bakht, Chairman, Agrani Bank Limited Dr. Syed Abdul Hamid, Managing Director & CEO, Agrani Bank Limited Mr. Mizanur Rahman Khan, Deputy Managing Director, Agrani Bank Limited Mr. Mohammed Khurshed Alam, CEO, Agrani Remittance House Canada Inc. Dr. Muhammad Ansar Ali, Compliance Officer, Agrani Remittance House Canada Inc. BUSINESS OPERATION & FUTURE PLAN: During the year under review, the Company was engaged for providing Remittance Services, investment advisory services and helped to open various accounts (SB, FC, WEDB etc.) services to the Bangladeshi expatriate community in Canada. There is no significant change in operating strategy in terms of business operation but in near future, the company is planning to open few more branches in the city of Montreal and other Bangladeshi concentrated cities. DIRECTORS BENEFIT & INTEREST Considering the business performance of the Company, no benefit or interest were received and entitled by the Directors during the year under consideration. ISSUE OF SHARES: The total paid-up capital at the year ended on December 31, 2014 was CAD consists of 100 shares of CAD1.00 each. 390

391 RESERVE & PROVISIONS: Since the Company couldn t generate enough revenue, so there were no material transfers to and from reserves or provisions during the financial year. DISCLOSURE OF INFORMATION TO AUDITORS: Each of the persons who are Directors at the time when the Directors Report is approved has confirmed that: so far as the Director is aware, there is no relevant audit information of which the company s Auditors are unaware, and that Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company s Auditors are aware of that information AUDITORS: M/S. MNP LLP., a well-reputed Chartered Professional Accountants (CPA) and Licensed Professional Accountants (LPA) firms in Canada, located at Richmond Street West, Toronto, Ontario M5H 2G4, Canada have been appointed as the Auditors for 2 years (2014 & 2015). The Auditors have prepared the financial statements in accordance with Canadian accounting standards for private enterprises. ACKNOWLEDGEMENT: The Board of Directors take this opportunity to place on record their deep appreciation for the whole-hearted and sincere co-operation; the Company has received from the statutory authorities, banks, financial Institution, auditors and valued customers. The Directors also wish to thank all the employees for their dedicated and committed service to the Company. Dr. Zaid Bakht Chairman Dr. Syed Abdul Hamid FCA Director Mizanur Rahman Khan Director Mohammed Khurshed Alam CEO Annual Report

392 392

393 Annual Report

394 394

395 Annual Report

396 396

397 Annual Report

398 398

399 Annual Report

400 400

401 Annual Report

402 402

403 Head Office Division Circle, Zone, Branch Corporate Branch Authorised Dealer Branch Zone-wise Branch Annual Report 2014 t 403