OUR BANKING HERITAGE

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2 OUR BANKING HERITAGE Southeast Bank Limited is a secondgeneration bank that was established in 1995 with a dream and a vision to become a pioneer banking institution of the country and contribute significantly to the growth of the national economy. The Bank s journey began when it was incorporated as a Public Limited Company on March 12, The Registrar of Joint Stock Companies and Firms issued the Certificate of Commencement of Business of the Bank on the same date. The Southeast Bank received its Banking License from the Bangladesh Bank on March 23, The Bank s first branch was opened by Late M. Saifur Rahman, the then Honourable Finance Minister of the Government of the People s Republic of Bangladesh as the Chief Guest at the commercial hub of the country at 1, Dilkusha Commercial Area, Dhaka on May 25, In its arduous journey since, Southeast Bank has succeeded in realizing the dreams of those who established it. Today it is one of the country s leading banks in the private sector contributing significantly to the national economy. The Authorized Capital of the Bank today is Tk.10,000 million. Its PaidUpCapital and Reserve reached Tk. 17, million as on December 31, The Bank had 1613 Staff of whom 126 were Executives, 1247 were Officers and 240 were other staff as on December 31, The Southeast Bank was established by leading business personalities and eminent industrialists of the country with stakes in various segments of the national economy. They established the Bank with a vision to bring efficient and professional banking service to the people and the business community of Bangladesh to help the national economy grow. The incumbent Chairman of the Bank is Mr. Alamgir Kabir, FCA, a professional Chartered Accountant. The Bank s Managing Director is Mr. Mahbubul Alam, an eminent banker of the country with 43 years experience in both nationalised and local private sector banks to his credit. The Bank s operations are built upon unequivocal emphasis on effective corporate governance. The objective is to create, promote and build longterm company value. The Bank s first and the highest priority is to provide effective services and maximum satisfaction to the customers. The ethos of harmony and cooperation is widely practiced in the Bank. We take pride in the fact that the public and private face of the Bank is one and identical. We believe that transparency in decisionmaking, monitoring mechanism and full disclosure to shareholders and regulatory authorities are essential aspects of Bank s corporate governance and that they create an intense pressure to rationalize Bank s services and search for new competitive advantages. We work ceaselessly within these parameters. A team of efficient professionals manages the Bank. They create and generate an environment of trust and discipline that encourages everybody in the Bank to work together for achieving the objectives of the Bank. The culture of maintaining congenial workenvironment in the Bank has further enabled the staff to benchmark themselves better against management expectations. A commitment to quality and excellence in service is the hallmark of their identity. Southeast Bank has become a synonym of quality banking services and products. It has a diverse array of products and services tailored carefully to cater to the needs of all segments of customers. Our operational strategies are structured to address the special and often complex needs of the customers. In the growth graph, the Bank has generated profit of Tk.2, million after provision and income tax in the year The curve keeps soaring upward everyday making it one of the leading and most successful banking institutions in Bangladesh with a total asset base of Tk.131, million as on December 31, 2010.

3 Financial Highlights Deposits % Advances % 96, ,730 77,498 92,453 Deposit Growth Deposit increased by 11.44% to Tk. 107,730 million (2009 Tk. 96,669 million) Advance Growth Advances up by 19.30% to Tk. 92,453 million (2009 Tk. 77,498 million) Y2009 Y2010 Y2009 Y2010 Guarantee Business % Foreign Remittance % 22,781 23,779 28,082 11,917 Guarantee Business Growth Deposit increased by 91.17% to Tk. 22,781 million (2009 Tk. 11,917 million Foreign Remittance Growth Foreign Remittance increased by 18.10% to Tk. 28,082 million (2009 Tk. 23,779 million) Y2009 Y2010 Y2009 Y2010 Export Business % Import Business % 46,724 58, ,727 Export Growth Export increased by 24.47% to Tk. 58,158 million (2009 Tk. 46, 724 million) 69,583 Import Growth Import increased by 49.07% to Tk. 103,727 million (2009 Tk. 69,583 million) Y2009 Y2010 Y2009 Y2010 Profit after Tax (PAT) % 2,763 Earning Per Share Tk ,870 Profit after Tax Growth Profit after Tax up by 47.75% to Tk. 2,763 million (2009 Tk. 1,870 million) Tk for 2010 Tk (Restated) for 2009 Y2009 Y2010 Y2009 Y2010

4 02 Corporate Profile 02 Financial Calendar in Key Events in Core Values 03 Core Strengths 03 Core Competencies 03 Vision 04 Missions 04 Commitments to Clients 04 Ethical Principles Years at Glance to National Exchequer, operational performance, growth etc Qualitative and Quantitative Disclosures under Pillar3 of BaselII 161 List of Branches 171 Notice of the 16th AGM 175 Proxy Form and Attendence Slip 177 Name of the Company : Southeast Bank Limited Chairman : Alamgir Kabir, FCA Vice Chairman : Ragib Ali Managing Director : Mahbubul Alam Company Secretary : Muhammad Shahjahan Legal Status : Public Limited Company Date of Incorporation : March 12, 1995 Registered Office : Eunoos Trade Centre 5253, Dilkusha C/A (Level 2, 3 & 16), Dhaka1000 Line of Business : Banking Authorized Capital : Tk.10, million Paid Up Capital : 6, million Year of Initial Public Offer : 1999 Stock Exchange Listing : April 10, 2000 (DSE) & April 24, 2000 (CSE) Phone : , , , & Fax : , & SWIFT : SEBDBDDHXXX info@southeastbank.com.bd Website : Name of the Bank s : Southeast Bank Capital Services Limited Subsidiary Company Financial Calendar in 2010 Dividend declaration for 2009 : February 24, 2010 Publication of Financial Statement 2009 : March 24, 2010 Record Date for 15th AGM : March 11, th Annual General Meeting held : March 29, 2010 Stock Dividend Credited : April 15, R:2 Rights Shares Credited : September 13,2010 Unaudited Half Yearly Accounts : July 25, 2010 (June2010)mailed to Shareholders Key Events in 2010 January : Business Policy and Managers' Conference held and Annual Budget discussed. February : 35% stock dividend declared for shareholders. March April May : 15th Annual General Meeting held. : Bank's Paidup Capital reached Tk.4, million with the issuance of 35% Bonus Shares for : Credit Rating AA for Long Term and ST2 for Short Term. : Southeast Bank Foundation initiated a scholarship program for poor but meritorious students as part of Corporate Social Responsibility(CSR). June : Halfyearly operating profit reached Tk.2,970 million. Total deposit crossed Tk.95,000 million. July : Halfyearly Managers' Conference held for review of operational performance against budgets. August : Total loans and advances crossed Tk.85,000 million. September : Bank's Paidup Capital reached Tk.6, million with the Right 1:2 October : Operating profit crossed landmark of Tk.5,000 million. November : Total Import and Export business reached Tk.145,000 million. December : Southeast Bank Capital Services Limited, a Subsidiary Company of Southeast Bank Limited, started its merchant banking operation. : 76th Branch of the Bank which is the last branch in 2010 opened at Dinajpur. : Yearly operating profit reached Tk.6,750 million. 02 Annual Report 20 10

5 Our Core Values Integrity Respect Fairness Harmony Team Spirit Courtesy Commitment Service Excellence Insight and Spirit Enthusiasm for Work Business Ethics Our Core Strengths Transparent and Quick Decision Making Efficient Team of Performers Satisfied Customers Internal Control Skilled Risk Management Diversification Our Core Competencies Knowledge Experience and Expertise Customer Orientation / Focus Transparency Determination Zeal for Improvement Pursuit of Disciplined Growth Strategy Reliability Annual Report

6 Vision Missions Commitments FOUNDATION OF OUR Our Vision, Missions and Commitments to Clients Strength OUR VISION To be a premier banking institution in Bangladesh and contribute significantly to the national economy. OUR MISSIONS High quality financial services with state of the art technology Fast customer service Sustainable growth strategy Follow ethical standards in business Steady return on shareholders equity Innovative banking at a competitive price Attract and retain quality human resource Commitment to Corporate Social Responsibility OUR COMMITMENTS TO CLIENTS Ours is a customer focused modern banking institution in Bangladesh. We deliver unparalleled financial services to Retail, Small and Medium Scale Enterprises (SMEs), Corporate, Institutional, Governmental and individual clients through branch outlets across the country. Our business initiatives center on the emerging demands of the market. Our commitments to the clients are the following: Provide service with high degree of professionalism and use of modern technology. Create longterm relationship based on mutual trust. Respond to customer needs with speed and accuracy. Share their values and beliefs. Grow as our customers grow. Provide products and service at competitive pricing. Ensure safety and security of customers valuables in trust with us 04 Annual Report 20 10

7 Ethical Principles Southeast bank believes that its efforts to become a leading bank in the private sector can only be achieved and sustained by creating effective corporate governance, inculcating professionalism among its staff and strictly adhering to rules and regulations. We believe that our aims and objectives can only be realized fully and sustained over time by adherence to ethics that cannot always be built into sets of rules and regulations. This belief in ethics motivates the bank in its dealings with those with whom it interacts. A. We adhere to the following principles in dealing with Customers 1. Strictly follow ethical banking practices. 2. Provide fair treatment to all customers, depositors, and borrowers, without any discrimination. 3. Provide speedy customer service at a very competitive cost. 4. Deal with customers in a transparent manner and without any hidden cost. 5. Maintain strict secrecy of customer account. 6. Provide free financial advice to clients. 7. Deal quickly with complaints received from the customers. We endeavour continuously to build trust and understanding with customers. 8. We give very competitive return to the depositors on their investment. 9. We listen to our customers and work for improvement of customer service as per their suggestions. 10. We never desert our customers in adversity. 11. We always keep promises we make. B. We follow the following principles in dealing with Shareholders 1. Adequate disclosure of corporate information and operational results to help them take suitable investment decisions / options. 2. Stable Dividend Policy and payment of good dividend. 3. Dialogue with them and implementations of their suggestions for improvement 4. Equal treatment to all shareholders irrespective of their individual size of shareholding. C. We follow the following principles in dealing with our Regulators 1. We are transparent in operations and governance. 2. We have a culture of timely compliance of regulatory requirements. 3. We give their suggestions and directives great value that we implement for improvement of our corporate governance standard. D. We follow the following principles for our Employees 1. We do not discriminate on grounds of religion, sex or race at any stage. We recruit the best on the basis of merit under a rigorous recruitment policy without any biasness or favoritism to anybody. 2. We pay competitive compensation package with career echelon for the really deserving candidates. 3. We care for our employees and respect them 4. We have clearly defined duties and responsibilities for every employee. No one is made a scapegoat for undefined responsibilities. 5. We have a zero tolerance for any act of dishonesty. 6. We provide a congenial work environment. 7. We encourage freedom to our employees to give opinion for both qualitative and quantitative improvement of the Bank. 8. We take care of their health and safety. E. We follow the following principles in respect of Society 1. We believe that the Bank gets business sustenance from the community in which it operates and therefore must remain responsive to the community and the society in reciprocity. 2. We do not encourage projects which are not environmentfriendly for financing by the Bank. 3. We provide material support for protection of environment. 4. We give aid to the poor, helpless and naturalcalamityhit people. 5. We support charitable ventures. 6. We give sponsorships to sports, culture, education, healthcare and community development ventures. 7. We support the women as a community and contribute to women empowerment. 8. We are keen to move fast for green banking to protect environment. Annual Report

8 at a glance In Million PARTICULARS Authorized Capital 10, , , , , , , , , Paid up Capital 6, , , , , , Reserve Fund/ Others 10, , , , , , Total Capital (TierI+TierII) 17, , , , , , , , Deposit 107, , , , , , , , , , Advance 92, , , , , , , , , , Investment 18, , , , , , , , , , Import Business 103, , , , , , , , , , Export Business 58, , , , , , , , , , Foreign Remittance 28, , , , , , , Guarantee Business 22, , , , , , , , , , Total Income 16, , , , , , , , , , Total Expenditure 9, , , , , , , , , , Operating Profit 6, , , , , , Net Profit after Tax and Provision 2, , , Fixed Assets 4, , , , , Total Assets 131, , , , , , , , , , Earning per Share (Tk.) Dividend Cash (%) 10% 15% 15% 20% 20% 20% 30% Bonus Shares 20% (5:1) 35% (20:7) 20% (5:1) 25% (4:1) 8% (12.5:1) 20% (5:1) 30(10:3) 20% (5:1) 10% (10:1) 10% (10:1) Return on Equity (ROE) 19.41% 16.51% 12.06% 19.90% 17.98% 17.64% 17.87% 19.69% 26.11% 35.76% Return on Asset (ROA) 2.26% 1.66% 1.09% 1.90% 1.66% 0.86% 1.00% 1.11% 1.34% 1.87% Non Performaning Loan 4.26% 3.73% 4.12% 3.77% 3.97% 4.37% 4.96% 2.09% 1.99% 2.78% Capital Adequacy Ratio 11.25% 11.72% 11.12% 13.00% 11.50% 6.90% 7.83% 9.20% 8.23% 8.77% Number of Correspondent Banks Number of Foreign Correspondents Number of Shareholders 66,898 22,152 12,536 9,636 8, Number of Employees Banking Non Banking Number of Branches Annual Report 20 10

9 A session of the Board of Directors in progress Board of Directors Chairman Alamgir Kabir, FCA Vice Chairman Ragib Ali Directors M. A. Kashem Azim Uddin Ahmed Bangla Capital Limited represented by Tahnoun A. Harun Jusna Ara Kashem Duluma Ahmed Syed Shahid Ali Rehana Rahman Md. Akikur Rahman Monjur Miah Sirat Monira Karnafuli Tea Co. Limited represented by Abdul Hye Dr. Zaidi Sattar A.H.M. Moazzem Hossain Managing Director Mahbubul Alam Company Secretary Muhammad Shahjahan Advisor Zakir Ahmed Khan Executive Committee Chairman Alamgir Kabir, FCA Members Ragib Ali M. A. Kashem Azim Uddin Ahmed Dr. Zaidi Sattar A.H.M. Moazzem Hossain Mahbubul Alam Audit Committee Chairman Azim Uddin Ahmed Members M. A. Kashem Dr. Zaidi Sattar Shariah Supervisory Committee Chairman Professor Moulana Mohammad SalahUddin Members A. S. M. Fakhrul Ahsan Moulana Abdul Hakim Azadi Alamgir Kabir, FCA Ragib Ali M. A. Kashem Azim Uddin Ahmed Dr. Zaidi Sattar Mahbubul Alam Annual Report

10 Members of the Management Committee Management Team Managing Director Mahbubul Alam Deputy Managing Directors Syed Imtiaz Hasib Mohammed Gofran Shahid Hossain Chief of Capital Market Division Faruq Ahmad Siddiqi Executive Director M. Serajul Islam Senior Executive Vice Presidents Saleh Uddin Ahmed Muhammad Shahjahan Giash Uddin Ahmed S. M. Mainuddin Chowdhury A. K. M. Nurul Alam Md. Anwar Hossain Executive Vice Presidents M. Kamal Hossain Haradhan Banik Ziaus Shams Chowdhury Pritish Kumar Sarker Mustafizur Rahman Anwar Uddin Md. Shamsul Huda Senior Vice Presidents Mohammad Mahmud Hasan Md. Abdul Mannan Mahfuzur Rahman Khan A. T. M. Manjurul Alam A. M. M. Ariful Haque Md. Jashim Uddin Md. Anwar Hossain Kamal Uddin Mahbubur Rahman Shabbir Syed Nurul Bashar Md. Asadul Azim Vice Presidents Mirza Akhteruzzaman Begg Golam Akbar Chowdhury Mohammed Hafizur Rahman Nur Hossain Chowdhury Md. Mosharraf Hossain Lt Col Md Abdur Rafique, psc (Retd) Muhammad HajjajBinMahfooz Md. Abdul Naim Md. Shahjahan Sarker Md. Abdul Karim Shafiur Rahman Md. Zakir Hossain Abdul Batin Chowdhury Nuruddin Md. Sadeque Hussain Md. Giash Uddin Bhuiyan Panu Ranjan Das Chief Financial Officer Arun Chandra Paul 08 Annual Report 20 10

11 Respected Members of the Board of Directors of the Bank at the 15th Annual General Meeting held on March 29, Queue of the respected Shareholders at the registration counters for their disciplined registration for the 15th Annual General Meeting held on 29 March, Alamgir Kabir, A partial view of the respected Shareholders that attended the 15th Annual General Meeting held on 29 March, Annual Report

12 Alamgir Kabir, FCA Chairman s Report Bismillahir Rahmanir Rahim Dear Shareholders: Assalamualikum I heartily welcome you to the sixteenth Annual General Meeting of the respected shareholders of the Bank. I have the pleasure to present before you a report about the performance of the Bank in 2010 with an outlook for the year ahead. 01. OUR OPERATIONS IN TOUGH TIMES The Southeast Bank advanced another step forward in 2010 towards materializing its vision of becoming a premier banking institution in Bangladesh. It was a very successful year for the Bank in terms of adding substantial value to our shareholders and significantly contributing to the growth of the national economy. Achieving continuing business success was not easy in The growth of the global economy and recovery from the recent recession in the western world fell much short of expectations. Domestic competition in the financial sector became more intense. The growth of the national economy failed to reach its potential due to infrastructural constraints. Money market became volatile towards the end of the year adding pressure on risk management of the banks. Your bank has successfully faced all these challenges and achieved greater business success in The keys to our success are forward looking strategic planning, management efficiency, effective risk management strategy, strict compliance with regulatory requirements, quality service, innovation and above all support and cooperation from our stakeholders and regulators. 10 Annual Report 20 10

13 Chairman s Report In our operation, we know that our stakeholders scrutinize every taka we spend. They want that we operate in a transparent and socially responsible way and achieve sustainable growth. We do not see sustainability as optional. It is core to our long term success. We have partnered with our customers and with the society in a broader sense for mutual benefit. We assure our shareholders that we will continue to remain accountable to you, follow transparent business operations and do our best to achieve sustainable growth of your institution. 02. OUR OPERATIONAL RESULTS Southeast Bank has successfully achieved improved operational results with all business targets showing an impressive upward trend. Bank s deposit shot up by 11% to Tk. 107, million, loans and advances increased by 19% to Tk. 92, million, volume of import business registered an increase of 49% to Tk. 103, million, volume of export business posted growth of 24% to Tk. 58, million and foreign remittance grew by 18% to Tk. 28, million in The operating profit of the Bank increased by 46% to Tk. 6, million. 03. OUR CREDIT GROWTH Credit growth is an issue of paramount importance. We always follow a cautious approach and remain watchful to see that credit growth is consistent with deposit growth. Besides, loans are extended after ascertaining the credit worthiness of the borrower. We want to lend more in productive sectors to increase production rather than for conspicuous consumption. Our credit deposit ratio stood at 85.82% as on 31st December, Bank s credit grew by 19% to Tk92, million in 2010 from Tk. 77, million of the previous year. We are happy to note that Dr. Atiur Rahman, Governor, Bangladesh Bank, has relentlessly been trying to boost up SME and Agriculture sectors to enhance country s GDP. We are ardent supporter of his initiatives and gradually increasing our lending to these sectors. 04. BANK S CAPITAL MANAGEMENT Capital plays the central role in the execution of Bank s strategies. Our capital management aims at (a) best composition of capital in relation to our business growth, regulatory requirement and BaselII compliance and (b) optimum use of capital through a host of investment options. Being guided by the above principles, the Bank s Paid Up Capital was increased to Tk million in 2010 through issuance of 35% bonus share and Rights Shares at 1R:2 i.e. one Right Share for every two shares held by a shareholder on the record date. 05. OUR BASELII PREPAREDNESS Basel II is an internationally agreed deal signed by the Central Banks of several countries. Under the deal, banks of Bangladesh will have to achieve international standards that include capital adequacy, risk management and greater disclosure of banks business results. Southeast Bank has successfully implemented the Risk Based Capital Adequacy from January 01, 2010 in line with the Capital Adequacy Framework devised by the Basel Committee on Banking supervision under the guidelines of Bangladesh Bank. We have been submitting quarterly reports of Minimum Capital Requirement (MCR) under Pillar I of Basel II to Bangladesh Bank. The total capital of the Bank has been deliberately increased to Tk. 17, million as on 31st December We also ensure enough disclosure of financial results and analysis to comply with Pillar II of Basel II requirements. We have upgraded our IT solution and data store house to facilitate implementation of Pillar II of Basel II. 06. OUR IT DEVELOPMENT IN 2010 We emphasize on the services that a particular technology provides to the customers rather than focusing on the technology itself and its procuring price. We are increasingly using technology to deliver innovative services to the customers. The local software BankUltimus of international standard is being successfully used by the Bank. Islamic Banking Module under Bank ultimus has been customized to suit the needs of our valued customers. Internet Banking System is being currently used internally. It will be expanded for customers convenience. Existing products are being finetuned and more innovative products are being devised with the support of the new technology. 07. OUR EFFORTS FOR INNOVATION Only an enabling culture that promotes creative way of working can spur innovation. We give space and flexibility to our employees to do things differently. We promote innovation and creativity through developing specialization and instituting system of job mobility. We try not to keep them doing the same job for long. It kills their creativity. I think that is a better way for them to think outside the box. Annual Report

14 Chairman s Report The Bank is also run in a way like a family. Our people work in the Bank together in an amiable and friendly environment. They all together as a team create a fertile soil for innovation with the strong support of their professional skills and deep commitment. They come from different families to work in one. We give utmost importance to teamwork. We pursue excellence every day of the week, every week of the month and every month of the year. 08. OUR QUALITY POLICY Our Quality Policy is to achieve and maintain a reputation for quality in the market by offering products and services that meet and exceed the requirement of valued customers. We constantly strive to remain the Bank of choice in all our products and services, welcome feedback from employees and customers to ensure continuous improvement. Offering our customers excellent service, innovative products and value added banking at a reasonable pricing is our priority. We strive to develop with our customers a relationship of partnership for mutual growth in commercial pursuits. We demonstrate vision, professionalism, transparency and integrity in the conduct of our business and service. We long for achieving disciplined growth and reasonable profitability while operating on a sound financial base. We work to create value for our customers. Our employees are our most valuable asset and the cornerstone of the Bank. We encourage, motivate and develop them to be truly professional all the way. We substantially contribute to the achievement of national objectives applicable to us. Our goal is to reach the top position in the banking industry. To be the best, we keep on growing better. 09. OUR HUMAN RESOURCE POLICY Employees are our best assets. They are our managers, they are our engines of productivity and they are our partners. This approach, I believe, makes us successful. In human resource policy, talented people with deep commitment to the Bank is our priority. We believe, people with right combination of savvy and ambition can afford to shop the right boss, right colleagues and the right environment. In recruitment, the best is sieved out from the contestants of many. The best is retained. They are developed as sober and flexible professionals who take care of company s interest, follow code of ethics, give full day s work and work together for a brighter tomorrow for their institution. They are highly paid, but their compensation is linked to what they contribute. We concentrate on managing our people more effectively and efficiently. In the process, we focus on pooling skills and building the people on learning and research program. Knowledge is being effectively managed in the Bank with efficiently connecting those who know with those who need to know. Personal knowledge is converted into organizational knowledge. Our people enjoys the advantages of belonging to the organization in which their mutual commitment builds continuity of a congenial work environment. We deal with our people with respect and never allow any one to take advantage of hierarchical position. 10. OUR CSR INITIATIVES While pursuing our business, we are mindful of our responsibility to the society at large. We believe in socially responsible business and are committed to give something back to the society in a sustainable manner. We remain accountable to the society and our shareholders on the status of our initiatives on Corporate Social Responsibility. We have carefully crafted CSR strategy in the light of the needs of the society as well as overall national policy and priorities. Our present CSR activity covers specific poverty alleviation measures, promotion of education, supporting distressed humanity during national calamities, women empowerment etc. We are also increasingly giving special attention to green banking to ensure environmental sustainability. In 2010, the Bank has spent Tk million in implementing CSR activities. We have established Southeast Bank Foundation in 2002 which is funded by Southeast Bank Ltd. to carry out CSR related activities in an organized manner. The Foundation has since executed a number of CSR programs on a sustainable basis which includes scholarship for poor but meritorious students from all over the country, training program for English teachers of schools for improvement of English teaching. In 2010, Southeast Bank Foundation spent Tk million in the execution of CSR activities. We are thankful to Dr. Atiur Rahman, Governor, Bangladesh Bank, for his initiatives and interest in the promotion of CSR activities by Banks and Financial Institutions. We feel inspired by his encouragement to accelerate the pace of CSR activities by Southeast Bank Limited for the wellbeing of the down trodden people of the country. 11. RISK MANAGEMENT Management of risks is of vital importance to the Bank. Our Risk Management is the process by which the bank identifies key risks, obtains consistent but understandable risk measures and chooses which risks to reduce, which to increase and by what means. It also includes devising workable procedure to monitor the resulting risk position. The objective of our Risk Management is to ensure that the Bank operates within the risk levels set by the Central Bank and the Bank s Board. 12 Annual Report 20 10

15 Chairman s Report The Board approves the risk policy, analyses and sets risk limits for core risks within the regulatory framework designed by the Central Bank. The policy is updated based on an analysis of the economic trends and the operating environment. The risk level of each category of risk is measured and monitored on a continuous basis. Compliance to the prescribed risk levels is reported to the Board on a regular basis. 12. TEAMWORK Teamwork continues to be one of the strategic tools to achieve organizational success. Our employees believe in teamwork. There is teamwork in everything they do to achieve corporate objectives. Consensus is a vital requirement for teamwork which they build through vigorous discussion and analysis. They help solve problems. They assume responsibility for the whole task assigned to the team. Resultantly, there is excitement, dedication and commitment. They form into a team and act within set norms to perform or outperform, to reach or outreach their goals. Their combined effort always produce tremendous results. 13. CORPORATE GOVERNANCE: Our corporate governance is about promoting corporate fairness, transparency, trust, respect, culture and accountability not just to shareholders but to all stakeholders. It ensures that the Bank is responsibly managed and supervised with an orientation towards value creation. Our corporate governance start from the top. We are fortunate to have a great Board of Directors to help oversee the strategic direction. The diverse talent of the Board continues to expand. The broad knowledge, experience and sound judgment of the members of the Board are very valuable to the company. The forums from which the Board gives the strategic direction and exercises control mechanism are the following: a) Board of Directors b) Executive Committee of the Board of Directors c) Audit Committee of the Board of Directors, and d) Shariah Supervisory Committee to oversee Bank s Islamic Banking operations. Apart from the above, Bank s Management, Independent External Auditors, Regulatory Agencies and Shareholders play an important role in the effective corporate governance of the Bank. The Bank operates within the legal framework of the Companies Act1994, the Bank Company Act1991 and the security laws. The functional activities of the Bank are constantly supervised by a number of regulatory authorities. They have prescribed a variety of requirements for the Bank. We are pledgebound to comply with all the requirements of all regulatory authorities. Our corporate governance framework focuses on business risks as well as corporate social responsibility. As a corporate citizen, we maintain respect for the society, environment and the community in which we operate. Because of our responsible management and operation, the community finds good reasons for continuity of our existence and further growth. 14. CUSTOMER FOCUS We are responsive to customer needs and we know what those needs are. Our first step in building superior customer responsiveness is through motivating the whole company to focus on the customer. Our customer focus starts from the top level of the organization. A commitment to superior customer focus brings attitudinal changes throughout the Bank and strengthens our focus on customers. We stay close with our customers and visit as many customers as possible every week at different levels. 15. OUR SHAREHOLDERS The daily volume of trading of Southeast Bank Shares in the Dhaka Stock Exchange and the Chittagong Stock Exchange averaged Tk million and Tk million respectively during the year We had 66,898 Shareholders as of 31st December, The shares of the Bank are held by a cross section of people and institutions. The above statistics demonstrate investors trust and confidence in Southeast Bank Limited. 16. DISCLOSURE POLICY The Bank greatly weighs regular and prompt communication with its customers, shareholders, regulatory authorities, employees and the members of the public. Media releases, reports, halfyearly financial statements, annual reports, disclosure in the Bank s website: and annual financial statements in the press provide enough information about the Bank. Information that could have a substantial impact on the share price of the Company are quickly disclosed to the regulatory authorities and in the print media for public information. Annual Report

16 Chairman s Report 17. OUTLOOK Southeast Bank is now well positioned to move forward in the chosen areas of financial services. We have sound capital base, devoted staff members, loyal customers, basket of rich products and a good management team in a supportive regulatory environment. Bangladesh economy is advancing well at annual growth rate of around 6% over the last 5 years. It was one of the most resilient economies in the face of global economic meltdown. Doing business in Bangladesh has become easier. Bangladesh had been rated BBby Standard and Poor s which was announced in April, Moody s Investment Service has assigned Ba3 rating meaning macroeconomic fundamentals of the country is better and it has less chance of facing severe stress on credit worthiness. It is similar to BB rating of S&P s. With such ratings, we foresee new era in global business for us. With better operating environment, I believe Southeast Bank has a promising future. Amid intensifying competition, it is becoming increasingly difficult to maintain a competitive edge. Nevertheless, we are committed to the realization of sustainable increase in corporate value through speedy business development, combination and enhancement of existing strategic business and establishment of new strategic business. We are dutybound to meet the expectations of our customers, shareholders, the market and the society by speedily producing results. 18. ACKNOWLEDGEMENT I am thankful to the Almighty Allah for the business success of the bank in 2010 amid competitive business conditions and global economic recession. I also take the opportunity to thank the Directors of the Bank for their support and input during the year under review. Their collective wisdom substantially contributed to our success. I also thank our Management and the members of the staff under the able leadership of the Managing Director for their loyalty, support and relentless efforts for Bank s qualitative and quantitative improvements. I respect their zeal to work hard to reach newer heights of success. I conclude by conveying my very sincere and special thanks to our respected shareholders, valued customers, patrons, wellwishers, the Government of the People s Republic of Bangladesh, Bangladesh Bank, Registrar of Joint Stock Companies and Firms, the Securities and Exchange Commission, the Dhaka Stock Exchange Limited, the Chittagong Stock Exchange Limited and all others concerned who have supported us and extended to us their valued cooperation. We look forward to their continued support, cooperation and guidance that are our constant source of encouragement in the days ahead. We renew to them our promise to remain disciplined, compliant and resultoriented in all our endeavors and in return seek their cooperation. May the Almighty Allah in His infinite mercy bestow upon us compassion and blessings. Allah Hafiz With warm regards, Sincerely yours, Alamgir Kabir, FCA Chairman 14 Annual Report 20 10

17 Pqvig vb g nv` qi cöwz e`b wemwgj vwni ivngvwbi ivnxg mywcöq kqvi nvìvie `, Avm&mvjvgy AvjvBKzg, mvd_b e vs Ki m vwbz kqvi nvìvi `i 16Zg evwl K mvaviy mfvq Avwg Avcbv `i K mv`i m vly Rvbvw Q 2010 mv j e vs Ki Kvh µg Ges AvMvgxw` b e vs Ki m vebvi wel q Avcbv `i m y L GKwU cöwz e`b ck Ki Z c i Avwg Me eva KiwQ 01 cöwzk~j cwiw wz Z Avgv `i Kg ZrciZv ` ki GKwU mye nr e vswks cöwzôv b cwiyz niqvi j mvd_b e vsk 2010 mv j AviI GK avc GwM q M Q m vwbz kqvi nvìvi `i m ú` e w Ges RvZxq A_ bwzk cöe w Z Zvrch c~y Ae`vb ivlvi Î 2010 mvj e vs Ki GKwU mdj eqi wqj avivevwnk e emvwqk mvdj AR b 2010 mv j mnr wqj bv wek A_ bwzk cöe w Ges cwðgv we k i mv cöwzk A_ bwzk g `vi cybi vi Avgv `i cöz vkvi Zzjbvq h _ó wqj bv A_ bwzk Î Af šíixy cöwz hvwmzvi wqj Zxeª AeKvVv gvmz Amyweavi Kvi Y RvZxq A_ bwzk cöe w Kvw LZ j cušqv Z cv iwb eq ii kl w` K gy`ªv evrvi GKUz Aw i n q D V hvõ e vsk jvi SuywK e e vcbvi Dci evowz Pvc m wó K i Avcbv `i e vsk G mkj cöwzk~jzv mdjfv e gvkv ejv K i 2010 mv j AR b K i Q mev wak evwywr K mvdj G mvd j i PvweKvwV wqj `~i` wó m úbœ KŠkjMZ cwikíbv, wbcyy e e vcbv, A_ en SuywK c wz, i juwi wbqgkvby bi K Vvi AbymiY, DbœZgv bi MÖvnK mev, DbœZZi D vebx kw³ Ges m e vcwi wbqš YKvix ms v I mswk ó mk ji mg_ b Ges mn hvwmzv Avgiv Rvwb h, Avgv `i Kg cwipvjbvi e q wbe vn m ú K ók nvìvimy AZ ší m PZb ^ QZv Ges mvgvwrk `vqe Zvi mv _ e emv cwipvjbvi gva g YMZ cöe w AR bb Zv `i cöz vkv YMZ cöe w i aviv ervq ivlv K Avgiv Hw QK g b Kwi bv `xn gqv`x mdjzv AR bi Î GUv gšwjk welq cvi úwik Kj v Y MÖvnK Ges mgv Ri mv _ Avgiv Askx`vwi Z i m úk M o Zz jwq Avgiv m vwbz kqvi nvìvi `i Avk KiwQ h, Zv `i cöwz Avgv `i Revew`wnZv Ae vnz _vk e, Avgiv ^ Qfv e e emv cwipvjbv Kie Ges Avcbv `i cöwzôv bi YMZ cöe w AR b Avgv `i me vzœk cö Póv Ae vnz _vk e 02 Kvh µg cöm~z djvdj m šívlrbk AMÖMwZi aviv ervq i L mvd_b e vsk mkj e emvwqk j c~iymn AwaK cwipvjb gybvdv mdjfv e AR b K i Q 2010 m b e vs Ki AvgvbZ kzkiv 11% e o 107, wgwjqb UvKvq, FY I AwMÖg 19% e o 92, wgwjqb UvKvq, Avg`vbx evwyr 49% e o 103, wgwjqb UvKvq, ißvbx evwyr 24% e o 58, wgwjqb UvKvq Ges AšÍgy Lx iwg UÝ e emv 18% e o 28, wgwjqb UvKvq `uvovq 2010 m b e vsk 6, wgwjqb UvKv cwipvjb gybvdv AR b K i Q Ges G Î cöe w i nvi 46% 03 Avgv `i F Yi cöe w F Yi cöe w AR b i Z c~y GKwU welq AvgvbZ I F Yi cöe w mvgäm c~y ivlvi j Avgiv me `vb mzk Zv Aej ^b Kwi Ges mrvm ` wó ivwl GQvov, FY MÖnxZvi FY cövc Zvi gvb`û h_vh_ we k ly K ib FY cö`vb Kiv nq fv³v Lv Z bq eis Drcv`bkxj Lv Z AwaK FY cö`vb KivB Avgv `i j 31 ww m ^i, 2010 Zvwi L Avgv `i FY I Avgvb Zi nvi wqj 85.82% 2010 m b e vs Ki FY I AMÖx gi cwigvy `uvovq 92, wgwjqb UvKv hv 2009 m bi 77, wgwjqb UvKvi Zzjbvq kzkiv 19 fvm ekx Avgiv AZ ší Avbw `Z h, evsjv `k e vs Ki gvbbxq Mfb i Wt AvwZDi ingvb ` ki wrwwwc cöe w i j GmGgB I K wl LvZ K DbœZ Kivi Rb AK všífv e Zvi cö Póv Pvwj q hv Qb Avgiv Zvi G cö Póvi DÏxß Abymvix Ges m½z Kvi YB Gme Lv Z Avgv `i F Yi cöevn µgvmz e w K i P jwq 04 e vs Ki g~jab e e vcbv e vs Ki e emvwqk KŠkj ev Íevq bi g~j PvwjKv kw³ n jv g~jab e e vcbv Avgv `i g~jab e e vcbvi D Ïk nj (K) e emvwqk cöe w, Z`viKKvix KZ c i cöyxz bxwzgvjv, e mj 2 KvVv gv cwicvjb BZ vw` wel qi mv _ msmwz i L ch vß g~jab msi Y Ges (L) eûgylx Lv Z wewb qv Mi gva g g~ja bi m e vëg e envi Annual Report

18 Pqvig vb g nv` qi cöwz e`b DcwiD³ bxwzgvjv AbymiY K i 2010 mv j kzkiv 35 fvm evbvm kqvi Bmy Ges 1:2 Abycv Z ivbu kqvi A_ vr ikw W U kqvi nvìv `i aviyk Z cöwz `ybwu kqv ii wecix Z GKwU ivbu kqvi Bmy i gva g e vs Ki cwi kvwaz g~jab wgwjqb UvKvq DbœxZ Kiv n q Q 05 e mj 2 Gi Rb Avgv `i cö wz e mj 2 nj wewfbœ ` ki K `ªxq e vsk KZ K ^v wiz AvšÍR vwzkfv e ^xk Z GKwU Pzw³ G Pzw³ Abyhvqx evsjv ` ki e vsk mg~n K g~jab ch vßzv, SuywK e e vcbv Ges e nr cwim i e emvwqk djvdj cökvk BZ vw` wel q AvšÍR vwzk gvb AR b Ki Z n e e mj KwgwU Ae e vswks mycviwfkb KZ K D vwez g~jab ch vßzvi bxwz hv e mj 2 e j L vz Gi Av jv K evsjv `k e vsk KZ K cöyxz bxwzgvjvi Aax b mvd_b e vsk 1jv Rvbyqvix 2010 n Z SuywK wfwëk g~jab ch vßzvi bxwz h_vh_fv e ev Íevqb K i P j Q e mj 2 Gi Í 1 Abyhvqx b~ bzg g~jab msi Y wel q Avgiv ˆÎgvwmK wfwë Z evsjv `k e vs K wi cvu cö`vb K i AvmwQ 31 ww m ^i 2010 Zvwi L e vs Ki gvu g~jab e w c q 17, wgwjqb UvKvq `uvwo q Q e mj 2 Gi Í 2 cwicvj bi j ch vß Avw_ K djvdj cökvk Ges Zv we kl Yi welqwui Avgiv wbwðz Kwi G j Avgiv Avgv `i Z_ cöhyw³i Dbœqb I Z_ fvûvi mg K i P jwq G Avgv `i Z_ cöhyw³i Dbœqb cöhyw³i g~j vqb Kej Zvi Drcv`b e qi wfwë Z bq eis MÖvn Ki wbku Gi mev cö`v bi gvîvi wfwë Z wbyx Z nq MÖvnK `i bzzb bzzb mev cö`v bi j Avgiv µgvmz cöhyw³i e envi e w K i P jwq Avgv `i e vsk AvšÍR vwzk gvbm úbœ `kx mduiq vi "BankUltimus" mdjfv e e envi Ki Q m vwbz MÖvnK `i Pvwn`v c~i Yi j ÒBankUltimusÓ mduiq vi G BmjvwgK e vswks gwwdj mwbœ ek Kiv n q Q ez gv b B Uvi bu e vswks wm g Af šíixyfv e e eüz n Q hv AwP ib MÖvnK `i Rb we Z Kiv n e e vs Ki we` gvb mev mg~n K Av iv hy Mvc hvmx Kiv n Q Ges bzzb cöhyw³ e env ii gva g bzzb bzzb mevcy D veb Kiv n Q 07 m RbkxjZv wekv k Avgv `i cö Póv AbyK~j cwi e ki ms wzb m RbkxjZv K wekwkz Ki Z cv i Avgiv Avgv `i Kg xevwnbx K Zv `i jäávb cö qvm K i ^vaxbfv e KvR Kivi my hvm cö`vb K i _vwk MwZkxj Kg cwi ek I Kg mâvj bi gva g cöwzôv b bzzbz I m RbkxjZv Avgiv jvjb K i _vwk Avgiv Avgv `i Kg xevwnbx K GKB Kv Ri g a `xn w`b mxgve ivwlbv GUv Zv `i m RbkxjZv K bó K i Avwg g b Kwi Job Rotation Gi gva gb Zv `i wpšívi cwiwa cömvwiz nq Ges Zviv MZvbyMwZK wel qi evb ii wpšív Ki Z m g nq Avgv `i e vs K cvwievwik Aven weivr K i Avgv `i Kg Pvixiv mšnv` c~y I eüzz c~y cwi e k mw wjzfv e KvR K i Zviv ckv`vixz, ` Zv I Mfxi A½xKv ii gva g m RbkxjZv K wekwkz Kivi Rb GKwU De i Î ˆZix K i wfbœ wfbœ cwievi _ K AvMZ Avgv `i Kg Pvixiv wg jwg k wb ew`z n q mvd_b cwiev i KvR K i GLv b `je fv e KvR Kiv K cövavb `Iqv nq Avgiv eq ii cöwz gv m, gv mi cöwz mßv n, GgbwK mßv ni cöwzw`bb Kv Ri DrKl Zv ea b m Pó _vwk 08 YMZgvb AR b Avgv `i bxwz m vwbz MÖvnK `i Pvwn`v Abyhvqx DbœZZi mev cö`v bi gva g mybvg AR b Ges ZvÕ ervq ivlvb Avgv `i bxwz Avgiv m vwbz MÖvnK `i Rb mevi Ggb gvb AR b Ki Z PvB hvõ Zv `i Pvwn`viI AwZwi³ mš wó cö`v b m g n e Avgiv me `vb eûgylx mevc Y i gva g Avgv `i e vsk K GKwU kxl vbxq e vsk wnmv e cöwzôv Ki Z m Pó _vwk Ges Gi avivevwnk DbœwZ wbwðz Ki Z Avgv `i Kg Pvix I MÖvnK `i weá gzvgz K ^vmz RvbvB MÖvnK `i K Zzjbvg~jK MÖnY hvm g~ j bzzb bzzb cy Ges DrK ó e vswks mev cö`v b Avgiv cöwzkö wze evwywr K ` wó KvY _ K cvi úwik DbœwZi j Avgiv MÖvnK `i mv _ Askx`vwi Z i m úk Dbœq b m Pó _vwk e emv cwipvjbvq I mev cö`v bi Î Avgiv Avgv `i j, ckv`vwiz, ^ QZv I mzzvi cögvy ivl Z e cwiki Avgiv my` p Avw_ K wfwë Z myk slj cöe w I gvbm Z gybvdv AR b m Pó _vwk Avgiv me `vb MÖvnK mevi gvb DbœZZi Kivi cö Póvq wb ew`z gvbem ú`b n jv Avgv `i kªô m ú` I Dbœq bi g~j wfwë Drmvn, cö Yv`bv I Dbœq bi gva g Avgiv Zv `i K mwz Kvi ckv`vi wn m e M o Zzwj Avgiv AZxe i Z i mv _ RvZxq j mg~n AR bi Rb cö qvrbxq Ae`vb ivl Z m Pó _vwk e vswks wk í m v bi m e v P Avmb AR bb Avgv `i j DË ivëi DbœwZi gva gb Avgiv G vb AR b Ki Z m Pó AvwQ 09 gvbe m ú` bxwz gvbe m ú`b n Q Avgv `i kªô m ú` Zviv Avgv `i e e vck, Drcvw`Zvi PvwjKvkw³ I Askx`vi Avgvi w i wek vm Gfv eb Avgiv mvdj AR b K iwq gvbe m ú` bxwzgvjvq cöávm úbœ I A½xKvive Kg PvixivB cövavb cvq Avgiv wek vm Kwi, Ávb I AvKv Lvi mgš^qb hvm mnkg x I my Kg cwi ek m wó Ki Z cv i wb qvm`v bi Î cöwz hvmx `i 16 Annual Report 20 10

19 Pqvig vb g nv` qi cöwz e`b ga _ K miv `i Lyu R ei Kiv nq DrK órbb wb qvmcövß nq Zviv f`ª I ` ckvrxwe wn m e M o I V, Kv úvbxi ^v_ i v K i, wbqgbxwz g b P j Ges cöwzôv bi D¾ j fwel Zi Rb mw wjzfv e KvR K i Zviv D P ezbf~³ wkš Zv `i K cö`ë ezbfvzv Kv úvbxi AMÖMwZ Z Zv `i ^ ^ Ae`v bi m ½ IZ cövzfv e m úwk Z Avgiv Avgv `i Kg Pvix `i K AwaK ` Zvi mv _ cwipvjbv Kivi e vcv i g bv hvmx G cöwµqvq wk v I M elyv Kvh µ gi gva g ` Rbkw³ M o Zzj Z Avgiv m Pó _vwk RvbvARvbvi gv S Kvh Ki mgš^q NwU q e vs K Áv bi cömvi NUv bv nq e w³jä Ávb K cövwzôvwbk Áv b iƒcvšíi Kiv nq Avgv `i Kg KZ v Kg Pvix `i mw wjz cöqv m Kg Î mšnv` c~y Kg cwi ek weivrgvb _vkvq Zviv G cöwzôv b KvR Ki Z ^v Q ` eva K i Avgiv Avgv `i Kg Pvix `i cöwz AZ ší kª vkxj Z e Kvb Kg KZ v K Zvi c`vwakvi e j AevwÂZ myweav jy U bqvi my hvm `qv nq bv 10 mvgvwrk `vqe Zvi wel q Avgv `i Kg ZrciZv (wmgmavi) e emv cwipvjbvi cvkvcvwk mvgvwrk `vwqz cvj b Avgiv cöwzkö wze Avgiv mvgvwrk `vqe Zvg~jK e emvq wek vmx Ges Ae vnzfv e mgvr K wkqz w` q h Z cöwzkö wze mvgvwrk `vqe Zvi Î Avgv `i KiYxq m ú K mgvr Ges m vwbz kqvi nvìvi `i wbku Avgiv `vqe mgv Ri Pvwn`v, RvZxq bxwz I AMÖvwaKvi cövß LvZ mg~n K we epbvq i L Avgiv mzk Zvi mv _ wmgmavi KŠkj cöyqb K iwq Avgv `i ez gvb wmgmavi Kvh µ gi g a Av Q `vwi`ª we gvp bi mywbw` ó c` c, wk v m cömviy, RvZxq `y hv M `~` kvmö gvbyl K mnvqzv`vb, bvixi gzvqb BZ vw` cwi ekmz fvimvg ervq ivlvi j Avgiv µgea gvbnv i meyr e vswksgi cöwzi we kl g bv hvm w`w Q myk Ljfv e wmgmavi m úwk Z Kvh µg cwipvjbvi myweav _ 2002 mv j mvd_b e vsk wjwg UW Gi A_ vq b MwVZ nq mvd_b e vsk dvd Ûkb cöwzôvi ci n Z dvd Ûkb ch vqµ g ek wkqz wmgmavi Kvh µg m úv`b K i Q hvi g a Av Q mviv ` ki Mixe A_P gavex QvÎQvÎx `i K wk v e wë cö`vb Ges Bs irx wk v`v bi gv bvbœq bi Rb zj ch v qi Bs irx wk K `i cöwk Y Kvh µg wmgmavi Kvh µg ev Íevq b Avgv `i e vsk 2010 mv j wgwjqb UvKv e q K i Q e vsk I Avw_ K cöwzôvb KZ K wmgmavi Kvh µg m cömvi Y Drmvn I AvMÖ ni Rb evsjv `k e vs Ki Mfb i Wt AvwZDi ingv bi cöwz K ZÁZv cökvk KiwQ Zvi Drmv n AbycÖvYxZ n q mvd_b e vsk wjwg UW ` ki wbcxwoz gvby li Kj v Y wmgmavi Kvh µ gi MwZ K AviI Z ivwy^z K i Q 11 SuywK e e vcbv SzuwK e e vcbv e vs Ki Rb Acwinvh I AZ ší i Z c~y GKwU welq SuywK e e 'vcbv cöwµqvq e vsk Zvi cöavb SuywK jv wpwýz K i, SuywKi gvîv cwigvc I we kly K i Ges wk Dcv q SuywK wbqš Y Avbv hv e m welq jv wby q K i cö qvrbxq c` c MÖnY K i D ~Z SuywK cwiw wz Z`viwKi Rb GKwU Kvh Ki cöwµqv D vebi SuywK e e vcbvi AšÍM Z Avgv `i SuywK e e vcbvi j n Q K `ªxq e vsk I cwipvjbv cl ` KZ K Aby gvw`z SuywK mxgvi g a _ K e vs Ki Kvh µg cwipvjbv Kiv K `ªxq e vsk KZ K cöyxz iƒc ilvi AvIZvq cwipvjbv cl ` SuywK msµvší bxwzgvjv Aby gv`b, we kly Ges g~j SuywKi mxgv wba viy K i cwipvjbmz cwi ek Ges A_ bwzk MwZcÖK wz we kly K i SuywK msµvší bxwzgvjv nvjbvmv` Kiv nq cö Z K kªyxi SuywKi gvîv wbqwgzfv e cwigvc I Z`viwK Kiv nq SuywKi Aby gvw`z gvîv cwicvjb msµvší cöwz e`b wbqwgzfv e cl ` ck Kiv nq 12 Kg KZ vkg Pvix `i `jmz Kg ZrciZv cövwzôvwbk mvdj AR b wewfbœ KŠkj jvi g a GKwU nj `jmz Kg ZrciZv Avgv `i Kg KZ v Kg PvixMY `jmz Kg ZrciZvq wek vmx Kv úvbxi j AR b me Î Zviv mgwš^z n q `je fv e KvR K i G j AR b HKgZ Acwinvh hv Zviv cvi úwik AvjvcAv jvpbv I wepviwe kl Yi gva g M o Zz j mgm v mgvav b Zviv G K Aci K mnvqzv K i Zv `i Dci Awc Z `vwq Z i cy ivuv cwicvj b Zviv `vwqz bq djkö wz Z, Zv `i g a GK ai bi DÏxcbv, GKvZ Zv I `vwqz ev ai m wó nq Zviv GKwU wu gi m`m wn m e Avwef ~Z nq Ges mywba vwiz wbqgbxwzi AvIZvq `vwqz cvjb K i Kg m úv`b gvb AR b K i wksev Kg m úv`b gvb AwZµg K i, wpwýz j cuš Q wksev wpwýz j AwZµg K i Zv `i mw wjz cö Póvq AmvaviY mvdj AwR Z nq 13 Kv úvbx mykvmb Avgv `i Kv úvbx mykvm bi j n Q kqvi nvìvi `i Ges ^v_ mswkó mk ji cöwz wbi c Zv, ^ QZv, wek vm, kª v, my ms wz I Revew`wnZv wbwðz Kiv GUv e vs Ki `vwqz kxj cwipvjbv I ZË veav bi gva g wbwðz nq Annual Report

20 Pqvig vb g nv` qi cöwz e`b kxl ch vq _ K Kv úvbxi mykvmb m~wpz nq Avgiv mšfvm evb h, Avgiv GKwU kw³kvjx cwipvjbv cl ` c qwq hvi KŠkjMZ w`k wb ` kbv Avgv `i Pjvi c_ K AviI mymg K i cl `i eûgylx cöáv DË ivëi e w cv Q cl `i m vwbz m`m `i mycwimi Ávb fvûvi, AwfÁZv Ges Zx è wepviwk gzv Kv úvbxi mykvm b AZ ší g~j evb f~wgkv iv L KŠkjMZ w`kwb ` kbv cöyqb Ges wbqš Y Kvh µg cwipvjbvq cl ` wbgœewy Z A½ mšô e mg t K) cwipvjbv cl ` L) cwipvjbv cl `i wbe vnx KwgwU M) cwipvjbv cl `i AwWU KwgwU Ges N) Bmjvgx e vswks Kvh µg Z`viwKi Rb kwiqvn mycvifvbrix KwgwU GQvovI, djcöm~ Kv úvbx mykvmb wbwðwzk í e vs Ki e e vcbv KZ c, ^vaxb ewnt wbix K`j, Z`viKKvix KZ c Ges kqvi nvìvie ` i Z c~y f~wgkv cvjb K i Kv úvbx AvBb 1994, e vsk Kv úvbx AvBb 1991 G cöyxz wewaweavb cwicvjb K i Avgiv Avgv `i Kg m úv`b K i _vwk e vs Ki e emvwqk Kvh µg wbqš YKvix KZ c i ZË veav b cwipvwjz nq Zviv e vs Ki Rb cwicvjbxq wewfbœ wel q wb ` kbv `q Zv `i mkj wb ` kbv cwicvj b Avgiv ` p cöwzá Avgv `i Kv úvbx mykvm b e emvwqk SuywK Ges mvgvwrk `vqe Zvi wel q we kl i Z v ivc Kiv n q Q K c v iu wmwu Rb wnmv e Avgiv mgvr, cwi ek I m cö`v qi cöwz kª vkxj `vwqz kxj e e vcbv I Kvh cwipvjbvi ^xk wz ^iƒc mgvr Avgv `i mie Dcw wz Ges DË ivëi mg w cöz vkv K i 14 MÖvnK mev Avgiv MÖvnK Pvwn`v m ú K m PZb Ges Zv c~i Y m Pó DbœZZi MÖvnK mev cö`v bi j Avgv `i cö_g c` c n jv cöwzôv bi mkj ch v qi Kg KZ v `i MÖvnK mevq DrmvwnZ Kiv MÖvnK K cövavb `qvi cöwµqv cöwzôv bi D P ch vq _ KB m~wpz nq DbœZZi MÖvnK mev cö`v bi cöwzkö wzb cöwzôv bi ` wófw½i cwiez b K i Ges MÖvnK Kw `ªK mev cö`v bi wfz K AviI kw³kvjx K i Avgiv Avgv `i MÖvn Ki cv kb AvwQ e vs Ki wewfbœ Íi _ K cöwz mßv nb Zv `i m ½ mv v Zi gva g cvi úwik mym ú K i Ae vb AviI my` p Kiv nq 15 Avgv `i m vwbz kqvi nvìvie ` 2010 mv j XvKv I PÆMÖvg ók G P Ä cöwzw`b M o Avgv `i kqvi epv Kbvi cwigvy wqj h_vµ g wgwjqb UvKv Ges wgwjqb UvKv 31 ww m ^i, 2010 Zvwi L Avgv `i kqvi nvìvi msl v wqj 66,898 Rb wewfbœ kªyxi e w³ Ges cöwzôvb Avgv `i e vs Ki kqvi Gi avik DcwiD³ cwimsl vb e vs Ki cöwz wewb qvmkvix `i Av v I wek v mi DrK ó cöwzdjb 16 Z_ cökvk bxwz e vsk Zvi MÖvnK, kqvi nvìvi, Z`viKKvix KZ c, Kg KZ vkg Pvix Ges MYgva gi jvkr bi mv _ wbqwgz Ges `ª Z hvmv hvm K me vwak i Z `q e vs Ki I qemvbu G msev` weáwß, cöwz e`b, Aa evwl K Avw_ K weeiyx, evwl K cöwz e`b cökvk K i Ges cwîkvq evwl K Avw_ K weeiyx Qvwc q e vsk m ^ Ü c~y v½ Z_ cökvk Kiv nq e vs Ki kqvi g~ j ms e`bkxj Z_ vejxi Zvr wykfv e Z`viKKvix KZ c `i K Rvbv bv nq Ges Rbmvavi Yi ÁvZv _ I Zv cwîkvq cökvk Kiv nq 17 fwel r j wpwýz Avw_ K mevmg~n cö`v bi gva g AMÖMwZ AR b mvd_b e vsk my` p Ae v b i q Q Avgv `i Av Q my` p g~jab wfwë, wb ew`z Kg xevwnbx, wek Í MÖvnK, kªôgv bi cy m vi Ges mnvqk cwi e k ` e e vcbv KZ c MZ 5 eq i evsjv ` ki A_ bxwz gvuvgywufv e evwl K kzkiv 6 fvm nv i m šívlrbk cöe w AR b K i Q wek A_ bwzk g `vi g a I evsjv ` ki A_ bxwz ek w wzkxj Ae vq wqj evsjv ` k e emv cwipvjbv mnr n q Q MZ GwcÖj 2010 G Standard and Poor's evsjv `k K BB gv b iwus K i gywwõm Bb f g U mvwf m evsjv `k K Ba3 gv b iwus K i hvi A_ `vuovq ` ki mvgwmök A_ bwzk wfwë ` p Ges FY cövwßi MÖnY hvm Zvi Î evsjv `k K Pv ci m ylxb n Z n e bv Standard and Poor's Gi BB iwusi GKB A_ enb K i G ai Yi iwus Avgv `i Rb wek evwy R bzzb w`mší D b vpb K i Q Avwg wek vm Kwi, DbœZ cwipvjb cwi e k mvd_b e vs Ki fwel r D¾ j Zxeª cöwzøw ØZvi gv S e emv qi DrKl Zv ervq ivlv µgkt KwVb n q co Q Z_vwc, we` gvb KŠkjMZ e emv q DbœwZ, bzzb KŠkjMZ e emv cöwzôv Ges G `yb qi mgš^ qi gva g `ª Z e emvwqk Dbœqb NwU q Avgiv Kv úvbxi mvgwmök g~j e w Ae vnz ivl Z ` p cöwzá `ª ZZg mg q e emvwqk mvdj AR bi gva g Avgiv Avgv `i m vwbz MÖvnKe `, kqvi nvìvmy Ges mgv Ri Pvwn`v c~i Y `vqe 18 Annual Report 20 10

21 Pqvig vb g nv` qi cöwz e`b 18 K ZÁZv ^xkvi Zxeª cöwz hvmxzvg~jk cwi ek Ges wek A_ bwzk g `vi cö vc U 2010 mv j Avgv `i AwR Z e emvwqk mvd j i Rb Avwg gnvb Avjvni ïkwiqv Av`vq KiwQ BZ em i, Avwg e vs Ki m vwbz cwipvjkmy K mviv eqie vcx Zuv `i mg_ b Ges g~j evb wb ` kbvi R b AvšÍwiK ab ev` RvbvwPQ e vs Ki mg w AR bi Rb Zuv `i mgwš^z ÁvbfvÛvi e vckfv e mvnvh K i Q e vs Ki mvwe K Kvh µg Ges DbœwZi Rb Avwg e e vcbv cwipvj Ki bz Z cwipvwjz e e vcbv KZ c Ges ` Kg xevwnbxi mkj m`m K Zv `i AvbyMZ, mg_ b Ges Aweivg cö Póvi Rb AvšÍwiK ab ev` Rvbvw Q mvd j i be wkl i cšuqvi R b Zv `i g a we` gvb weivgnxbfv e KvR K i hviqvi evmbv K Avwg Mfxifv e m vb Kwi Avwg m vwbz kqvi nvìvie `, MÖvnKe `, c ô cvlk, ïfvkv Lx, MYcÖRvZš x evsjv `k mikvi, evsjv `k e vsk, hš_ g~jabx Kvievi I cöwzôvbmg~ ni wbeük, wmwkdwiwur I G PÄ Kwgkb, XvKv ók G PÄ I PÆMÖvg ók G PÄ Ges Ab vb KZ c K Zuv `i mg_ b, mn hvwmzv Ges c_wb ` kbvi Rb AvšÍwiK ab ev` Rvwb q kl Ki Z PvB Avgiv Zuv `i Ae vnz mg_ b I mn hvwmzv K h_vh_fv e g~j vqb Kwi hv Avgv `i R b mve wyk cöiyvi Drm myk slj e vswks, Z`viKKvix KZ c i cöyxz wewacwicvjb Ges Ae vnz mvdj AR bi wel q Avgiv Avgv `i cöwzkö wz c~be ³ KiwQ gnvb Avjvn Avgv `i mevb K Zvui gwngvgq Ki Yv `vb Ki b Avjvn nv dr Dò Avwfev`bmn Avcbv `i GKvšÍ, AvjgMxi Kexi, GdwmG Pqvig vb Annual Report

22 Mahbubul Alam From the Desk of Managing Director 2010 was indeed a challenging year in the local and the international banking sector as the world was still coping with aftershock left by Global Recession that continued in the year. The increase in commodities and oil prices in global market, falling prices and stiff competition faced in the Readymade Garments sector from other emerging markets and increase in inflation of the country stressed the country s banking sector throughout the year. Despite the exigent backdrop, with the effective crisis management strategies formulated by our Board of Directors and backed by a highly committed team of professionals in our workforce, Southeast Bank registered a solid performance in 2010, which is reflected in all the performance indicators including profitability, imports and exports, foreign remittance, loans and deposits and capital adequacy. The operating profit of Southeast Bank stood at Tk.6, million over Tk.4, million of 2009 showing a growth of 46% from previous year. Return on Equity (RoE) was 19.41% and Return on Assets (RoA) was 2.26% in The Bank was one of the leading local banks in terms of assets and liabilities in The deposits of the Bank increased by 11% to Tk.107, million from Tk.96, million of 2009 while the lending of the Bank grew by 19% from Tk.77, million in 2009 to Tk.92, million in Loans and advances were well diversified in various viable sectors and deposit mix of the Bank was optimized to ensure prudent management of the assets and liabilities of the Bank, which resulted in the steady and consistent growth of the Bank. Amidst tough competition in the local banking sector, Southeast Bank was able to capture a sizable share of the International Trade and Foreign Remittance business done in Bangladesh during The Bank s export grew from Tk.46, million of 2009 to Tk.58, million in 2010 which is 24% higher than the export of The Bank s facilitated imports for Tk.103, million in 2010 which is 49% higher than the import of previous year. Due to the exercise of efficient cost control measures, cost income ratio was significantly lower than the industry average while our profit per branch and the profit per employee still continued to be the highest among our local peer banks in Our fee based income stood at Tk.1, million showing good annual growth. 20 Annual Report 20 10

23 From the Desk of Managing Director In 2010, with the guidance from our learned Board of Directors, an effective and continuous Risk Monitoring Policy was devised to guard against bad loans and to maintain quality of assets of the Bank. Prudent credit policies were adopted to keep the NPLs at a tolerable limit. The Bank s Risk Management Unit formed in 2009 had been continuously working toward assessment and mitigation of various types of risk. Capital Adequacy has been calculated as per BASEL II. In 2010 the CAR was 11.26% (consolidated) which is well above the requirement set by Bangladesh Bank (9%). Southeast Bank s Capital Market activities have been centralized under a separate Subsidiary since Sept, 2010 named Capital Services Limited. Under the new Subsidiary, we wish to diversify our investment portfolio to Capital Market to attain sound profitability from the sector while exercising due caution and with a proper understanding of the volatility of the country s money market. Since inception, Southeast Bank made continuous effort to extend its reach to the customers even in the remotest corner of the country. In line with this strategy, every year new branches are opened in both urban and rural areas. In 2010 another 10 branches were added with the Bank making a total network of 76 branches. In addition to the expansion of Bank s own network of ATMs, arrangements were made for shared ATMs of other local players with larger ATM network. Our Research and Development Team is in continuous pursuit to develop innovative products to mobilize more deposits for the Bank. Southeast Bank is now at the final stage of implementing the highly sophisticated local Core Banking Solution named Bank Ultimus which enables the Bank to provide Realtime Online Banking Solutions for both retail and trade based customers. In order to create an environment of professionalism, banking acumen, sound risk management and proper understanding of customer needs, employees from entry level to higher level are regularly sent to trainings and workshops in Southeast Bank Training Institute, Bangladesh Institute of Bank Management (BIBM), Bangladesh Bank Training Institute (BBTI) as well as in trainings organized by SEDF, ADB and other foreign organizations. The Bank follows a transparent recruitment policy where eligible candidates are selected through a comprehensive merit based recruitment process. The Bank enforces a strict code of conduct among its employees that ensures nonbias, nondiscrimination and congenial work environment. In Southeast Bank we firmly believe in the concept of Corporate Social Responsibility whereby we integrate social and environmental concerns into our business operations. Southeast Bank Foundation established in 2002 has been highly active in the area of promoting education and poverty alleviation of the country. Future Outlook: We have set the following goals for ourselves in 2011: Increase our market share both in the corporate and retail banking sector. Strengthen our technology platform to install highly efficient and cost effective product solutions for the customers. Enhance our corporate brand image through promotional campaigns and marketing activities. Expand our remittance mobilizing activities, design special schemes for wage earners to give them highest level of benefit and convenience. Maintain high standard for asset quality through disciplined credit risk management and risk monitoring. Participate in the viable projects under PPP (Public Private Participation) in Power and Energy Sector Strengthen our Syndication and Club Financing operations We are committed to do this through ensuring the highest level of ethical standard, professional integrity, corporate governance and regulatory compliance while achieving healthy growth in profitability to create greater added value for our shareholders. With this thought, I convey my sincere gratitude to all the learned members of the Board of Directors, Regulatory Agencies, Valued Customers and Shareholders, Correspondent Partners for their continuous support, advice and guidance in shaping up the Southeast Bank as a Visionary Bank of today. I also pray to the Almighty Allah for the eternal Mercy and Blessings for our sustainable growth and prosperity. Mahbubul Alam Managing Director Annual Report

24 Board s Report Dear Shareholders : The Board of Directors of Southeast Bank Limited takes the opportunity to welcome you all to the 16th Annual General Meeting of the Shareholders and has immense pleasure to present before you the 16th Annual Report of the Bank together with the Auditors Report for the year ended December, Global Economic Situation and Prospects in 2011 The growth of world economy is likely to decelerate in 2011 after a year of fragile and uneven recovery last year. The recovery in 2010 was sluggish in advanced countries and much stronger in emerging and developing countries. The global GDP is estimated to have increased 3.9 percent in 2010, a year of rebound from the 2009 recession. The World Bank in its latest forecast estimates global growth of 3.3 percent this year. Emerging and developing countries are expected to grow by 6.0 percent, down from 7.0 percent in 2010 while the growth of high income countries are likely to decelerate from 2.8 percent in 2010 to 2.4 percent this year. The pace of global recovery will continue to be affected by the weaknesses in major developed economies posing risks to world economic stability in coming years, says the IMF report on World Economic Situation and Prospects The growth of US economy is likely to decelerate to 2.2 percent in 2011 from 2.6 percent in The prospects for Europe and Japan are even dimmer. Economic recovery in the euro area is forecast to virtually stagnate at 1.3 percent in Many European countries will witness even less growth especially those in which drastic fiscal cuts and high unemployment are draining domestic demand. Faced with persistent deflation and rising public debt, Japan is expected to grow by a meager 1.1 percent in Developing countries will continue to drive the global recovery this year in varying degrees though their expansion will moderate a bit. Developing Asia, led by China and India, will continue to show strongest growth performance but GDP growth is expected to show some moderation. The overall pace of economic growth is likely to be too weak to give the recovery solid traction, says the World Bank. Unfortunately these growth rates are unlikely to be fast enough to eliminate unemployment and slack in the hardesthit economies and economic sectors.... Serious tensions and pitfalls persist in the global economy, which, in the short run, could derail the recovery in different degrees. Threats that could derail the recovery includes the eurozone financial market crisis, volatile capital flows and rising prices of commodities including food and fuel, the 187 Nation Institution said. 22 Annual Report 20 10

25 Board s Report Developing countries in Asia and Africa will face moderate slowdown in growth emanating mainly from higher commodity prices; especially food and fuel. If international prices of food continue to rise, the issues of affordability and poverty impacts could intensify. Policy makers in these countries are likely to give more attention to get inflation under control, the consequences of which would be weaker growth. 02. A Review of Bangladesh Economy in 2010 Despite global economic meltdown and energy and infrastructure shortage, most of the economic indicators of the country showed positive trend throughout the year except some volatility in the money and capital markets. The economy managed to achieve a 5.8 percent growth during the fiscal The Government has targeted a 6.7 percent GDP growth for the fiscal FY11 and if the economic performance observed in the third and fourth quarters of 2010 can be sustained, the projected growth target should not be difficult to achieve. Agriculture sector grew by 4.7 percent in FY10 up from 4.1 in FY09. Industry sector growth was 6 percent in FY10 down from 6.5 percent in 09. Growth in service sector slightly rose to 6.4 percent in FY10 from 6.3 percent in FY09. After moderating at the beginning of FY11 from the rising trend observed in the previous year, inflation rate reached 7.6 percent in September Tax revenue collection has grown robustly by 25.7 percent during the first four months of FY11 over the corresponding period of last year. Broad Money (M2) grew by 22.9 percent in August 2010 higher than 19.2 percent growth in August Bangladesh Bank s monetary programme for FY11 was set to provide adequate monetary accommodation conducive to 6.7 percent GDP growth target to be achieved in FY11. The programme provides for 16.0 percent credit growth to the private sector against high base that grew 24.2 percent in 2010 to support Bangladesh Bank s growth friendly monetary policy as well as to contain inflation at the targeted level of 6.5 percent for FY11 says Annual Report of the Central Bank. Export grew by 35.8 percent to $8.27 billion during July November of FY11 compared to the same period of the previous year. Import growth was also over percent higher compared to the same period of FY10. The Country received $10 billion in remittance during the first eleven months of 2010 against nearly $11 billion in Trade deficit widened to 1.3 billion during July September of 2010, up from $739 million during the same period of last year. With adequate energy, infrastructure and more favorable business environment, the economy has the potential to grow over 7 percent annually. According to the Annual Report ( ) of Bangladesh Bank, the downside risks for attaining the potential growth are uncertainty in the full implementation of the Annual Development Programme, tardy implementation of the projects of power sector, delayed institutionalization of Public Private Partnership (PPP) program, unmet expected improvement of efficiency of ports, upward inflationary pressure emanating from oil and food prices in the international and domestic markets and the downward trends of manpower export and remittance inflows. 03. An Overview of the Bank Southeast Bank Limited, a second generation private Bank, emerged in 1995 amid liberalization of global economies. Currently, its Authorized Capital is Tk.10, million and its capital and reserve reached 17, million as of December 31, Its vision is to stand out as a premier banking institution in Bangladesh and contribute significantly to the national economy. The Bank, in the meantime, successfully completed 16th year of banking operations recording significant growth in all the performance indicators. In 2010, the Bank earned an after tax profit of Tk. 2, million. The deposit of the bank grew by 11 percent to Tk.107, million and advance by 19 percent to Tk.92, million compared to those of During the last five years ( ), the Bank achieved an average annual growth of 23 percent in deposit, 23 percent in advances, 37 percent in export and 30 percent in import and 76 percent in remittance. During the last six years, the export volume increased by three times to Tk.58, million and foreign remittance increased by eight times to Tk.28, million. Operational excellence coupled with qualitative improvements continued to be of paramount importance to the Bank. At present, the Bank has 76 branches and 2 OffShore Units across the country. Plans have been drawn to raise another 10 branches and at least 10 more SME / Krishi Branches in Our journey towards greater operational success continues with increased energy and enthusiasm. As we face the stiff challenges ahead on the way to further improving the profitability of the Bank, we rely on our skilled and experienced workforce. Our strengths are our close and cordial partnership with customers, our firmly anchored presence in the country's strategic places of commercial and business importance and global reach through our correspondent Banks for expansion of foreign trade, foreign exchange and remittance business. Our productbasket encompasses Real Time Online Branch Banking, Islamic Banking, Merchant Banking, Dual Currency Visa Credit Card, Visa Travel Card, ATMs, Education Loan Scheme, Double Benefit Scheme, Consumer Loan, Millionaire Deposit Scheme, SME Banking, Corporate Banking, Syndicate Loan, Monthly Savings Scheme, Monthly Income Scheme, Pension Saving Scheme, Wage Earner Pension Scheme, SMS Banking etc. in addition to our traditional credit and foreign trade related products and services. Annual Report

26 Board s Report High quality customer service through the integration of the latest and state of the art banking technology and products is our tool to achieve success. Customers are our first priority. We are trying hard to provide a system of onestop shopping for customers by providing a spectrum of services. Our employees have mastered new technology, enhanced their product knowledge and honed their skill to help customers meet their financial goals. We want to be the best at helping customers become financially better off by providing free advice, innovative leadingedge financial solutions, choice and convenience. Whether our customers are individuals, small businessmen, or commercial clients, we aim to deliver the best customer service by meeting their unique and different needs in a professional, ethical, friendly and knowledgeable manner. We are pledgebound to turn Southeast Bank into a modern banking institution, dynamic in actions, progressive in programs, honest in dealings, just in judgment, futuristic in attitude, fair in approaches and devoted to high quality service to customers. Our charted plans are aimed at boosting modern management, advanced technology, good profitability, sound financial strength and fair image of the Bank. We are firmly committed to transparent, responsible and accountable corporate governance with the participation of our strong and most capable team of professionals and under the prized policy directives and guidance of the Board of Directors of the Bank. Honorable Members of the Board of Directors on the stage at the Bank s Annual Business Policy and Managers Conference held on January 27, Southeast Bank Limited carries out business activities with due respect to its values and norms and with an understanding of the importance a large financial institution has for the society and the environment. It is moving fast to Green Banking. The bank wants to ensure its shareholders a competitive return in line with the best among peer institutions. 04. Capital and Reserves The Authorized Capital of the Bank was Tk.10, million and paidup Capital was Tk.6, million as of December 31, The Capital and Reserve of the Bank in 2010 stood at Tk.17, million compared to Tk.9, million of the previous year showing an increase of percent. The Capital and Reserve of the Bank as on 31st December, 2010 are appended below: Capital and Reserves 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, in Million (a) Core Capital (TierI Capital) : Paid Up Capital Statutory Reserve Nonrepayable shere premium account General Reserve Retained Earnings Total Core Capital (b) Supplementary Capital (TierII Capital) Provision for Unclassified Advances General Provision on off. Balance Sheet Exposures Assets Revaluation Reserves Revaluation Reserves of Government Securities Revaluation Reserves for equity instruments Exchange Equalization Account Total Supplementary Capital in Million 6, , , , , , , , Capital Adequacy Ratio The Bank maintained capital adequacy ratio of percent of the riskweighted assets an on December 31, 2010 as against the minimum capital requirement of 9 percent as set by Bangladesh Bank under BaselII reporting. 24 Annual Report 20 10

27 Board s Report 06. Capital Market Scenario in 2010 In the year 2010, institutional investors, mainly Financial Institutions along with tens of thousands of new small investors from across the country have invested crores of money in the country s two Stock Exchanges. The influx of liquidity forced share prices of many companies to go up substantiating that their market prices were higher compared to their market fundamentals. Change in denomination or rumor of change of denomination of share face value from Tk.100/= to Tk.10/ also encouraged small investors to invest more in those stocks traded in the bourses of the country in the year Investors confidences in the Stock Market was high almost throughout the year Consequently, return of discipline in the Market and price correction became inevitable. At the end of 2010, DSE General Index closed at 8,290.41points compared to 4, points of the previous year. The index gained 3, points or percent in The highest closing level of the Index during the year was 8, points as on December 05, 2010 according to DSE statistical report. The total market capitalization at the end of the year 2010 reached Tk.3, billion compared to Tk.1, billion of the previous year which is up by percent. 25 companies offered part of their shares to the public as Initial Public Offerings (IPOs) in the year. The total value of offered shares reached Tk.34, million. All 25 new companies were listed and their shares were traded in DSE in 2010 bringing the total number of listed companies to Southeast Bank Shares and its Owners All stock market indicators reflect sound financial base of our Bank namely Earning Per Share (EPS), Trend of Dividend Declaration, Net Asset Value Per Share (NAV), Cash Flow from Operation, Balance in Share Premium Account, General Reserve, Price Earning Ratio (PE) etc. The shareholders of Southeast Bank Limited look for satisfactory return on their investment for the long term and carefully evaluate the fundamentals of a company before making investment. i) Number of Shareholders A large number of shareholders repose their trust in our Bank s Securities. The number of Bank s registered shareholders rose to 66,898 on 31st December 2010 from 22,152 of the previous year showing an increase of percent. The trend of increase in the number of shareholders of the Bank for the last five years is shown below: Year Shareholders Growth Rate , % , % , % , % , % ii) Positive Earning Per Share (EPS) The total PaidUp Shares of the Bank stood at 6,93,08,404 at the end of the year Since our listing with the two bourses of the country, the number of issued shares increased by %. We are generating substantial amount of profit through operational excellence for the last six years and allocated good rate of dividend against each outstanding share of the company. Our EPS which is a prime indicator of the Bank s profitability is shown below for the last five years: in Year Earning Per Share Shareholders Equity in Million 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, Company's Securities in Electronic and Physical form Demat Shares Remat Shares Paper Shares Annual Report

28 Board s Report Net Asset Value (NAV) per Share Growth in Paid up Capital 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 In in million iii). Satisfactory Net Asset Value (NAV) Our Company s Net Asset Value per share is always positive reflecting higher assets compared to liabilities. For our better NAV, a large number of investors subscribed to our shares. The Net Asset Value of the Bank since 2006 is given below: Year Net Asset Value (NAV) per Share (in Tk.) iv) Authorized Capital and PaidUp Capital Our Authorized Capital and Issued Share Capital have considerably increased since inception. At present our Authorized Capital is Tk.10, million and our PaidUp Capital is Tk.6, million. The Bank s yearwise Authorized Capital and PaidUpCapital since 1995 are shown below: Year Authorized Capital Paid Up Capital ( in million) ( in million) , , , , , , , , , , , , , , , v) Declaration of Dividend In the preceding years, our Board of Directors declared dividend out of profit to company s shareholders at a good rate. Therefore, shareholders of our Bank always received satisfactory dividend. The rates of Cash Dividend and Stock Dividend declared by the Bank since 2006 are shown below: Year Cash Dividend Stock Dividend Total % 20% 30% % 35% % 20% 35% % 25% 40% % 8% 28% vi) Rights Issue of Shares of the Bank In the year 2003, Southeast Bank Limited issued 16,50,000 Ordinary Shares as Rights Issue of Shares to the existing shareholders at par at the ratio of 1R:2. The Bank issued 1,05,63,696 Ordinary Shares as Rights Issue of Shares in 2006 which were issued at issue price of Tk.200/ each with a premium of Tk.100/ per share. The Bank also issued 2,31,02,801 Ordinary Shares as Rights Issue of Shares in 2010 at issue price of Tk.160/ each with a premium of Tk.60/ per share to buildup a good capital base. 26 Annual Report 20 10

29 Board s Report vii) Characteristics of Shares of Southeast Bank at a Glance 1. Large number of Shareholders. 2. Good and satisfactory rate of dividend. 3. Positive Earning Per Share (EPS). 4. Good Net Asset Value per share (NAV). 5. Traded in both the bourses of the country as an 'A' category share. 08. Deposits The Bank mobilized total deposits of Tk.107, million as of December, 2010 as compared to Tk.96, million in Competitive interest rates, attractive deposit products, deposit mobilization efforts of the employees and confidence reposed by the customers in the Bank contributed to the notable growth in deposits. The Bank introduced a number of attractive deposit schemes to cater to the requirement of small and medium savers. This improved not only the quantum of deposits but also brought about qualitative changes in deposits structure. The deposit mix of the Bank as on December 31, 2010 was as follows: Particulars in Million Share in Total Deposits a) Current and Other Deposits 10, % b) Savings Bank Deposits 5, % c) Short Notice Deposits 7, % d) Fixed Deposits or Term Deposits 79, % e) Fund under different deposit Schemes 2, % f) Bills Payable Accounts 1, % TOTAL : 107, % Deposit Mix Current and Other Deposits 9.33% Savings Bank Deposits 5.36% Short Notice Deposits 7.31% Fixed Deposits or Term Deposits 74.11% Fund under different deposit Schemes 2.64% Bills Payable Accounts 1.25% 09. Credit policy Southeast Bank has formulated and implemented a well devised lending policy in accordance with the guidelines provided by Bangladesh Bank to minimize the risks of default. The policy broadly encompasses all the aspects of prudent lending procedure (i) the permissible and priority sectors (ii) the selection process (iii) the approval procedure (iv) documentation (v) monitoring and supervision. Additionally, the Bank also devised separate policy and guidelines to cover the business requirements of the specific sectors like consumers for household products, home loan, car loan, SME business, Agricultural credit, Leather sector in limited scale etc. 10. Loans and advances Year 2010 saw many ups and downs in the economic field of the country. The capital market witnessed unprecedented surge from the middle of the year and also the market started to decrease in the last quarter. The commercial banks faced liquidity problem and had to squeeze their lending to some extent. The loans and advances portfolio stood at Tk.92, million as on 31st December, 2010 in comparison to Tk.77, million as on 31st December, 2009 registering a growth of 19%. Deposit Growth 120, ,000 80,000 60,000 40,000 20, in million 2010 The loan portfolio of the bank covered different sectors like ready made garments, textile, spinning, dyeing, ceramics, pharmaceuticals, telecommunication, petroleum, steel, engineering, ship scrapping, cement, edible oil, sugar industry, real estate, transport, agriculture, SME and other commercial products ensuring diversification without concentration in any specific sector. Annual Report

30 Sector wise Allocation of Loans & Advances Growth of Loans and Advance 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Board s Report 11. Loans to Directors No fresh loan was allowed to any Director of the Bank during the year Guarantee Business The Bank issued guarantees amounting to Tk.22, million during the year 2010 compared to Tk.11, million recorded in the previous year registering a growth of percent. The guarantees were issued in favour of different Govt. Authorities, Ministries, Autonomous Bodies, Corporations, Private Companies, Individuals and Multinational Companies, etc. on behalf of the valued clients of the Bank. 13. SME Finance In line with the Government and Bangladesh Bank s policy guidelines, promoting a dynamic SME sector is a priority to the Bank. During 2010, the Bank increased financing in the SME sector by opening another 10 (Ten) SME / Krishi Branches Agriculture, Fishing, Forestry and Dairy Farm Industry (Jute, Textile, Garments, Chemicals, Cements, etc.) Working Capital finance Export Credit Commercial Credit Small and Cottage industries Others throughout the country resulting in 15 (Fifteen) SME / Krishi Branches by the end of December, Outstanding loan in SME stood at Tk.13, Million as on December 31, 2010 compared to Tk.8, Million as on December 31, 2009 resulting in 47.01% growth in the sector. In order to finance further in the SME sector, the bank is actively considering additional resource mobilization in SME, redesign its products and restructure its business process. The Bank has also identified Indigenous Weavers located in Tangail, in addition to the already undertaken project to finance small Leather Goods producers in the Old Dhaka City area, as potential customers under cluster financing and already conducted base line survey, diagnostic study and formulated an action plan to finance this activity. 14. Consumer Credit Scheme (CCS) The consumer credit loans were extended for household purchases like Refrigerator, Television, Washing Machine, Furniture, Computer, Motor Car etc. through a separate cell established at Head Office in Total investment in CCS loan stood at Tk Million as on December 31, 2010 against Tk Million as on December, Syndicate / Club Finance Southeast Bank remains one of the leaders in the banking sector for Syndicated / Club financing of corporate houses for new project establishment, BMRE and working capital facilities. The Bank participated in 05 (five) syndications during 2010 and allowed Tk.1,170 Million in different economic segments like power, sugar, oil, textile, spinning etc. in mllion 16. Corporate Finance Corporate finance team of Southeast Bank offers clientfocused corporate banking services to Corporate, Institutional and Business Banking clients to meet their specialized requirements in working capital, trade and transactional services, foreign exchange and cash management to name a few. Southeast Bank provides a wide array of banking products which are suitably structured taking into account the clients risk profile and specific needs. 17. Finance in Leather Sector Under guidance of the Leather Sector Business Promotion Council (LSBPC) of GoB, the Bank, during 2009, devised financing scheme for the primary producers of Leather Goods, with an initial allocation of Tk Million. The disbursement process has already been initiated and allocation in the sector shall be increased considering the requirement of the leather goods producers. 18. Agriculture Credit with Special Focus on Cluster Financing In a country where 48 percent of employment is in agriculture, the Government has undertaken policy measures to channelize increased agricultural credit by private banks, either independently or in collaboration with NGOs, hoping to spur domestic food production to meet the rising domestic demand for food and face the situation against protectionist policies by foodexporting countries and use of crops to produce biofuel. Southeast Bank is considering cluster financing as a new mode of financing to the Agricultural Sector. Under area approach method of cluster financing, the Bank is looking for timely, hasslefree and transparent open disbursement of credit to small farmers through bank accounts opened at a 28 Annual Report 20 10

31 Board s Report nominal deposit. The Bank initiated a model project to finance betelleaf producers in Patiya of Chittagong through cluster financing. The model will be replicated to finance other cash crops like turmeric, ginger etc. During 2010 Southeast Bank undertook disbursement target of Tk million during in agricultural/ rural credit through bank s existing branch networks as well as linkage with micro finance institutions. In addition to financing to primary producers, Southeast Bank also allowed significant amount of loans to the Agro processing industries during The recently opened SME / Krishi Branches of the Bank are expected to serve better to the Agro based industries. A new Agri Credit Unit has also been opened at Head Office to facilitate Agricultural Finance. 19. Export Development Fund (EDF) Bangladesh Bank established EDF in 1989 to facilitate financing in foreign exchange for procurement of raw materials by the manufacturerexporter. Authorized Dealer branches can borrow US Dollar from Bangladesh Bank through EDF against their foreign currency loan to manufactures / exporters. The current allocation of fund is USD 300 million. The Bank allowed USD million from the fund during 2010 and the borrowing is expected to increase further during 2011 commensurate with the increase in export from the manufacturing sector. 20. Project Finance and Value Addition to GDP From the very inception, Southeast Bank s lending policy is projected to finance the prime sectors contributing more to GDP and 2010 was not any exception. Besides RMG, the Bank has significant exposure in ceramics, healthcare, sugar, petroleum and infrastructure projects contributing significantly to the GDP of the country. In the years to come, the bank expects to mobilize additional financing in new project ventures like agro based industries, jute & jute goods, oil and petroleum, gas, light engineering products etc. 21. Women Entrepreneurship Fund Southeast Bank has given utmost emphasis on the growth and flourishing of women entrepreneurs. With this end view, the Bank has provided 41 (fortyone) entrepreneurs with necessary credit and outstanding was Tk million as on December 31, The credit against the fund is expected to grow further in future since more and more women entrepreneurs are likely to engage in business endeavors. 22. Loan Classification and Provisioning Loan classification is a process of categorizing the loans based on their quality/performance /risk associated with and maintaining required provisions thereagainst on a particular date in protecting the interest of shareholders/depositors. Southeast Bank Limited classifies the loans and maintains the required provisions as per the guidelines of Bangladesh Bank. Our Bank Management is always vigilant to minimize the classified loans by way of cash recovery and regularization through rescheduling complying with the rules and regulations of Bangladesh Bank. As a result, the Bank could maintain the percentage of classified loans at 4.26 % as on December 31, Besides, Southeast Bank Limited always maintains the required provisions against classified, unclassified loans and off balance sheet items as per Bangladesh Bank s guidelines. In 2010 the Bank kept provisions of Tk.3, million against required provisions of Tk. 3, million. 23. Credit Monitoring, Early Alert and Management of NonPerforming Loans Credit Monitoring is a continuous process to maintain and upgrade the health of assets of the Bank. To secure the interest of the shareholders, depositors and customers, our Bank has strengthened/intensified its monitoring and followup activities in order to maintain quality of assets and to reduce the NPLs. Primarily, the Credit Administration Department at Head Office and related Executives/Officers of the branches remain vigilant in monitoring and following up of overall credit portfolios and timely repayment of the loans. In case, any weak performing loan is identified, they are grouped under a list called Watch List for close monitoring and follow up to arrest further deterioration of those accounts. A separate Problem Account Management Committee headed by the Managing Director is continuously monitoring the status of problem accounts. Geographical Locationwise Position of Disbursed Loan and Advances % Dhaka Region 68.44% Chittagong Region 26.21% Rajshahi Region 1.17% Sylhet Region 3.11% Khulna Region 1.02% Barisal Region 0.05% A partial view of a 100% export oriented modern Readymade Garments Industry (RMG) financed by Southeast Bank Limited. Annual Report

32 Board s Report 24. Writeoff and Recovery of Classified Loans Growth in Investment 25,000 20,000 15,000 10,000 5, in million Growth of Import & Export Business 120, ,000 80,000 60,000 40,000 20, Export in million Import Minimizing the amount of nonperforming loans through writingoff of bad loans is an internationally accepted practice to keep the balance sheet sound. The Legal Affairs and Recovery Department under Credit Risk Management (CRM) Division at Head Office together with Branch Officers/Executives are continuously monitoring and following up cash recovery and regularization through rescheduling of classified loans. In the year 2010, the Bank recovered around Tk million from the defaulted borrowers and an amount of Tk million has also been recovered from writtenoff loans. 25. Investment Scenario The investment portfolio of the Bank during the year 2010 was Tk.18, million against Tk.21, million in the previous year. The portfolio of investment included Government Treasury Bills, Prize Bonds, Shares of Public Limited Companies etc. The Bank has always given emphasis on investment of Funds in high yield areas simultaneously maintaining Statutory Liquidity Requirements (SLR) as fixed by Bangladesh Bank. 26. International Trade Operations of Southeast Bank in 2010 Southeast Bank has always focused on facilitating its corporate customers with stateoftheart solutions for conducting international trade business. A team of seasoned professionals at our 21 Authorized Dealer branches are adequately trained and have the expertise to handle the Import and Export Letters of Credit, Foreign Guarantees and Standby Letter of Credits and Documentary Collections of our valued customers. Apart from the 21 Authorized Dealer Branches, our nonauthorized Dealer branches located all over the country are also sufficiently staffed and have the infrastructure to handle international trade of their corporate customers through the AD branches. With the combination of experienced foreign exchange professionals, timely and efficient trade finance solutions and strong infrastructural support, Southeast Bank has seen the gradual and steady growth in its International Trade activities over the years since its inception. Import Trade In 2010 Southeast Bank has seen another year of sustained growth in its Import Business. This year the total Import finance of the Bank was Tk. 103,726.7 million (eqvt. USD million) registering a growth of 49% over the Import finance of Apart from essential commodities such as Wheat, Sugar and Edible Oil, our other major imported items for 2010 were Capital Machineries, Fabrics and Accessories, Scrap Vessel, Live Ocean Going Vessel, Steel Billets and Passenger Aircraft. Yearwise Import Finance Figures of the bank for last 6 years are as below: Year Import volume in eqvt. US Import volume in eqvt. Dollars (in Million) (In Million) , , , , , , , , Export Trade Acknowledging the fact that a country s export sector is the lifeblood for its economy, Southeast Bank has given utmost thrust to boost the Country s export sector through offering prioritized services to the exporters. Since 2003, Southeast Bank has seen a substantial and consistent growth in its export trade. Despite the aftershock of global economic downturn, which still persisted in 2010, Southeast Bank registered a sound 30 Annual Report 20 10

33 Board s Report growth in its export finance in The combined foreign currency inflow from export and foreign remittance has enabled our Bank in efficient treasury fund management to settle our import commitments without being dependent on the highly volatile local interbank foreign exchange market in The major export items of our Bank in 2010 were Readymade Garments, Jute and Jute made goods, Ceramics, Frozen Fish and Agricultural products. In 2010 the total export finance of the Bank was Tk.58, million (equivalent to USD million) which is 24% higher than that of Year Export volume in eqvt. US Export volume in eqvt. Dollars (in Million) (In Million) , , , , , , BB midrate : Inward Foreign Remittance The year 2010 has not been a promising one for the country in remittance business. Against an increase of 10% for the year 2009, remittance growth fell to 2.2 % for the country in the year There are a number of factors for this downward trend in remittance. First, the global depression has been one important reason for the fall in remittance. Second, the manpower export has also fallen in 2010 that has in turn negatively affected remittance growth. In the context of the depressing national growth, Southeast Bank s remittance business has grown by 18%. In the year 2009, we brought home Tk. 23, million in remittance. In 2010, the amount grew to Tk. 28, million. In bringing home this amount, we have moved into the sixth place among the private banks in the remittance business. Our share in the overall remittance business has increased from 3.21% of the market to 3.67%. In the year 2010, we have strengthened the structure of the remittance business substantially. Abroad, we have entered into business relationship with a number of leading exchange houses in different countries. Within the country, we have entered into agreement with a number of established NGOs in order to use their outlets for distributing remittance money to the beneficiaries. We have entered into these agreements in order to overcome our own weakness where our 66 branches and 10 added towards the end of the year are alone very inadequate for remittance business. As a result of these agreement, our total outlets for distributing money to the beneficiaries stand at 900. Country Wise Inflow of Foreign Remittance through our Bank UAE 22% Italy 2% KSA 5% UK 29% Oman 1% USA 41% Inflow of Foreign Remittance In million USD In anticipation of the usefulness of mobile technology in the remittance business, we have entered into an agreement with Grameen Phone Limited. Bangladesh Bank has given us permission to execute the agreement which will be done as soon as Grameen phone receives the approval of Bangladesh Bank. We are also in discussion with other mobile operators to enter into agreement with them. In order to help the expatriates, SEBL has floated a new product that we have named Probashi Reen. This has been done as part of a DFID (Department for International Development, UK) aided project under the guidance of Bangladesh Bank and in partnership with Bangladesh Consultant Limited. The expatriate workers who have jobs abroad and have received training will be given loan under this scheme at a reasonable rate of interest to pay the manpower agent to save them from borrowing money from the money lenders at exorbitant rate of interest, often by selling or mortgaging whatever land or property they possess. The scheme will also help the expatriate workers to have their documents checked by the Bank so that they do not become victims of fraud and deceit. Annual Report

34 Board s Report In order to strengthen the IT base of the remittance business, SEBL has developed its own software that has been in use since February this year. Overall, the past year has been a satisfactory one for SEBL as we have been able to strengthen the structure of remittance business in all the three key areas. In the remittance destination stations, we have taken a few top remittance houses and banks as our correspondents. In the country, we have strengthened our distribution channel by taking some very well established and reputed NGOs as distribution channels to use their network for reaching remittance to the beneficiaries at their door steps. Finally, we have strengthened the remittance division at the head office by substantially upgrading its IT base. 28. Foreign Correspondents Over the years Southeast Bank has continuously developed strong correspondent relationship with internationally reputed banks to facilitate its foreign trade business. As of 31st December, 2010 the number of foreign correspondents stood at 645 banks in 94 countries of the world. Southeast Bank signed an Agreement with TMSS on November 09, 2010 for disbursement of foreign remittance through their outlets across the country. Our excellent reputation in meeting our commitment and strong financials enabled us in securing Credit lines (both funded and nonfunded) from International Finance Corporation (a World Bank Group Institution), FMO, of the Netherlands, Asian Development Bank and other world renowned Banks. The Bank currently maintains 26 nostro accounts in major international currencies : US Dollar, Pound Sterling, Swiss Franc, Japanese yen, Australian Dollar, and Euro & Dollar accounts under Asian Clearing Union with reputed international banks which ensures effective foreign currency management and timely payment of foreign commitments. 29. SWIFT Operations Southeast Bank has become member of SWIFT in 2000 to ensure smooth, reliable and secured financial transactions for its retail and corporate customers. Our SWIFT team consists of one of the most experienced and trained experts available in the local banking sector. Over the years our expert SWIFT team has introduced many innovative features in its existing SWIFT system. In the last quarter of 2010, Southeast Bank Limited SWIFT unit introduced web based centralized software SWIFT Alliance Messenger SE (SAM) so that all branches can be hooked up to SWIFT uninterrupted with more than 9,000 Live User Institutions in 210 countries around the world. 30. Treasury Operations and Fund Management Shrimps in the growth process at a hatchery established by the Bank s finance. Treasury operation of Southeast Bank Limited is in charge to measure and minimize the risk associated with Bank s liquidity, interest rate, asset liability management and overall fund management of the bank both in Local and Foreign Currency. The Treasury Division monitors the direction of the markets, through different modern business techniques and sophisticated technological support. Besides, our treasury team also managed all the regulatory requirements like maintenance of CRR, SLR etc in an efficient manner. Due to recent global financial turmoil all the major currencies, commodities and equities around the world were highly volatile especially during the last quarter of the year In this circumstance the main emphasis of our treasury was to maintain adequate risk management for the bank. Our Treasury Department managed the fund effectively and was able to manage all the associated risks in the volatile interest rate and liquidity scenario successfully. Treasury department offered best possible services to its customers and counterparties. The role of Treasury Division in relation to Foreign Exchange trading is mainly around currency management trading and market making. The Foreign Exchange desk used money market transactions in order to borrow / purchase in foreign currencies when necessary, channeled idle funds into investments / placements and deployed instruments such as swap and forward contracts in order to manage the Bank's funds effectively. The desk handled significant amount of Foreign Currencies throughout the year with a reasonable spread through its widespread branch network. 32 Annual Report 20 10

35 Board s Report 31. Asset Liability Committee (ALCO) As per Bangladesh Bank guideline, Bank has established a fully functional Asset Liability Committee (ALCO) for prudent balance sheet risk management. The committee consists of the Managing Director as the Chairman of the committee, Deputy Managing Directors and strategically important Divisional Heads of Head Office. The meeting of the Asset Liability Committee is held every month. The committee reviews interest rate risk and liquidity risk of the bank and takes necessary steps to mitigate them. 32. Money Market Scenario in 2010 Money market has experienced a turbulent situation in the year Due to the contractionary monetary policy, Bangladesh Bank has increased Cash Reserve Requirement (CRR) twice in this year: at first in May 2010 from 5% to 5.5% and lately in December 2010 from 5.5% to 6% to arrest inflation. The banking sector faced a severe liquidity crunch and consequently overnight borrowing rate was highly volatile at the end of the year. Apart from this, Bangladesh Bank raised around Tk.32, million through issuance of treasury bills and bonds to mop up excess liquidity from the market. In addition to that a hike in CRR by 50 basis point mopped up around Tk.30, million from the banking channel; moreover, Bangladesh Bank s curb in the Repo market has further tightened the liquidity situation in the banking sector. A partial operational view of a modern Ceramic industry financed by the Bank. Our bank actively participated in the money market with greater insight and maintaining utmost professionalism. For the sharp acumen in making investment decisions our bank was able to minimize the interest rate risk, liquidity risk along with ensuring maximum profitability in the prevailing volatile market condition. Bank also actively participated in the secondary transactions of government securities as a Primary Dealer and recorded a substantial amount of profit from trading activities of the same. 33. Offshore Banking Units Our two Offshore Banking Units located at Dhaka Export Processing Zone and Chittagong Export Processing Zone are now fully operational and offer wide array of banking services for Type A industries including international trade finance, nonresident foreign currency accounts, working capital loans in foreign currencies at the Export Processing Zones at very competitive rates. In 2010 our offshore Banking Units registered an income of USD 75, from discounting of import bills. 34. Information Technology It is a well established fact that without improvement in technology modern banking sector can not survive and prosper. Technology is playing an increasingly dominant role in providing banking products and services. Southeast Bank is continuously upgrading its core banking platform and heavily investing to bring about changes in technological infrastructures to keep its alignment with technology but also to bring efficiency to its operation and ensure continuous customer satisfaction. Some of Information Communication Technology (ICT) projects have been initiated in the year There were two major developments during the year, first, is the establishment of the bank s stateoftheart Data Centre (DC) which is an association of various live and backup servers at its own premises for smooth operation of its Core Banking System (CBS), second, bank has established Disaster Recovery Site (DRS) at Uttara. Both the DC and DRS have been constructed by following the standard set out under the tier III of Uptime Institute. During the year bank has established its own ATM switching system and signed agreements with DutchBangla Bank Limited (DBBL) and BRAC Bank Limited to access their ATM Booths. Bangladesh Bank Governor, Dr. Atiur Rahman delivering his speech as Chief Guest in presence of SEBL Managing Director Mahbubul Alam in the workshop on Automation in Banking jointly organized by Southeast Bank Limited and Bangladesh Computer Society on April 1, Annual Report

36 Board s Report Outside view of a Medical College and Hospital financed by Southeast Bank Limited. Manpower position for the last 5 years An innovative arrangement to collect the motor vehicle taxes and fees on behalf of the Bangladesh Road Transport Authority (BRTA) through the branches of the Bank across the country has been launched which is in live operation since last November In addition, the bank has also pluggedin smart internet banking service by which client can get desired banking service from home or a convenient place of his choice which will save client s time and money. The Bank has taken initiatives for developing a comprehensive remittance and enquiry management system to bring automation in the particular field to disburse remittance to its beneficiary within shortest possible time. The system is in UAT stage and expected to be live by 1st quarter of One noticeable project during the year was joining the Bangladesh Automated Clearing House (BACH) to participate in Bangladesh Automated Cheque Processing System (BACPS). The Bank has already delivered MICR (Magnetic Ink Character Recognition) cheque to its valued customers all over the country. At present the BACPS is in live operation with Dhakabased branches and hopefully within the 1st quarter of 2011, depending on the time frame set by Bangladesh Bank the network will span to the rest of the branches across the country. The real intention of the project is to diminish clearing instrument settlement time from three days to one day. Bangladesh Electronic Fund Transfer Network (BEFTN), another wing of BACH has also been included to the upcoming operational system of the bank which is in System Integration Testing (SIT) stage for commencement of service within 1st quarter of Bangladesh Bank has initiated the BEFTN project to renovate the payment system structure of the financial organizations and its stakeholders. The Bank has also participated in CIB Online Project of Bangladesh Bank to enhance efficiency for data exchange relating to loans and advances between other financial institutions and itself. The bank has already incorporated CIB Module with its CBS according to the specification of Bangladesh Bank which is under UAT stage. The project is scheduled to be completed by 1st quarter of The year 2010 was a constructive year for technological growth of the bank and the bank has realigned its technology with business objectives and brought about changes for greater customer satisfaction. 35. Human Resource Division The most important resource of a financial institution like bank is its manpower i.e. human resource. Thus in the modern corporate world, human resource is considered to be a form of capital, a produced means of production and the product of investment. Keeping these objectives in mind, the Bank adopted a Human Resource Strategy for recruitment of employees, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization to achieve its goals. Southeast bank follows a comprehensive recruitment process regularly to hire talented, spirited, energetic and dynamic fresh graduates/masters from reputed universities. Experienced bankers are also recruited at regular intervals on the basis of requirement to add more productivity in the day to day work. The vision and objective of the recruitment in each year is to develop Southeast Bank s core cadre who would be able to take the responsibility as senior executives in future. To support bank s expansion plan and to fill up positions created due to retirement and other administrative ground, we have recruited 165 Probationary Officer, Trainee Junior Officer and Trainee Cash Officer during the year of Total manpower of the bank as on December 31, 2010 stood at 1613 of which 126 are executives, 1247 are banking officers and staffs, and 240 are subordinate staff. The bank recruited a total 318 employees of which 57 were experienced bankers, 165 were fresh entrants and 96 Bank Guards in The bank promoted 266 officers during the year The Bank arrange orientation program as well as basic training to all fresh entrants to enhance their competencies in the field of modern Banking. 34 Annual Report 20 10

37 Board s Report Attracting and retaining quality human resource is the most important aspect of human resource policy. In this regard, the Bank always takes appropriate decisions to design satisfactory salary structure compared to peer banks and declares a good amount of bonus as incentive every year. All employes of the Bank works with full enthusiasm in a very congenial working atmosphere. Everybody enjoys the right to express his own opinion or putting up any innovative idea to the top management of the Bank. To ensure social security, the Bank has different staff benefit policies like gratuity, contributory provident fund, encashment of unavailed leave, etc. The Bank takes appropriate and timely action in all disciplinary cases keeping conformity with the service rules and regulations of the Bank. 36. Internal Control and Compliance The Internal Control Framework of the Bank is designed to manage the Bank s risks within an acceptable risk profile to implement the policies and achieve the goals and objectives of the Bank. It also provides reasonable assurance of effectiveness against material misstatement of management and financial information or against financial losses and fraud and compliance with the applicable laws and regulations. The Board of Directors of the Bank and its different Committees are actively involved in an ongoing process for identifying, evaluating, monitoring and managing significant risks that positively affect the achievement of business objectives of the Bank. The Internal Control Process which has been instituted throughout the Bank is reviewed and updated from time to time in line with the changes in the business environment and this process was in place for the whole year under review. View of an Ocean Going Vessel procured by Bank s finance by the Bank s customer. The management of the Bank proactively performs the following tasks for mitigating all the risks associated with the Bank s operation and business: identifying and evaluating the risks to be faced; formulating related policies and procedures to mitigate these risks; designing, operating and monitoring a suitable system of internal controls; and implementing the policies approved by the Board. Internal Control and Compliance Division, as an independent division of the Bank, undertakes regular examinations of the Bank s operations and monitoring of the systems of internal control by performing regular reviews of the business processes to examine and evaluate the adequacy and efficiency of financial and operating controls and highlights significant risks and noncompliance impacting the Bank. Where applicable, the division provides recommendations to improve the effectiveness of risk management, control and governance process. The External Auditors also review the systems of internal control of the Bank and provide necessary recommendations for improvement. Necessary control measures are taken according to their recommendations or suggestions. 37. Products and Services In line with the Bank s objective to become market leader, Southeast Bank Limited adopted a customeroriented service policy and developed diverse products to meet the needs of corporate, commercial and retail customers. That is why the Bank increases its branch network always to reach all classes of the potential customers of the Bank. In continuation to this, bank converted its all SME Services Centers into SME/Agri Branches and opened another five new SME/Agri Branches and five new stateoftheart branches in the year In addition, the Bank also intensified and strengthened its technological infrastructure to ensure that transactions are executed safely and faster at competitive prices. 38. Budget and Budgetary Control A partial view of a Betel Leaf Development Program under Micro Credit in Agriculture Sector Financing at Patiya, Chittagong, financed by Southeast Bank Limited. The Bank follows bottom up planning approach in the preparation of annual budget and initially invites draft proposals on different budgetary items including deposits, advances, Annual Report

38 Board s Report by the Head Office Management and reviewed/finalized in the Business Policy and Managers Conference. After approval in the meeting of the Board of Directors, Bank s budget is achievement of the budget. It periodically reviews the variances and the progress towards achieving the budgetary goals. 39. Analysis of Income and Expenditure Statements A brief analysis on Bank s income and expenditure in 2010 is given below: Interest Income For the year 2010 interest Income of the Bank was Tk.10, million as against income growth generated mainly from Loans and Advances which remained the main contributor. A partial view of a modern Steel and Rerolling Mills established by the Bank s finance. Interest Expenses Total Interest Expenses in 2010 was Tk.7, million as against Tk. 7, million in 2009, posting an increase of 0.33 percent. Net Interest Income Tk.1, million of the previous year. Investment Income Growth in Total Assets In 2010, Bank s income from investment was Tk.3, million as compared to Tk.2, million of the previous year. Income increased by Tk.1, million registering a growth of percent. Investment income consists of interest earned and capital gain on treasury bills and bonds dividend received from shares and gain from investment in shares. 150, ,000 50, in Million Other Income In the year under review, commission, exchange and brokerage earnings increased to related fee based activity. Operating Expenses In the year under review, total operating expenses stood at Tk.1, million as against Tk.1, million of previous year, thus, registering an increase of percent. 40. Assets Portfolio breakup of the total assets are given below: 41. Adoption of IAS and IFRS in Million a) Cash and Cash Equivalent 10, b) Investments 18, c) Loans and Advances 92, d) Fixed Assets 4, e) Other Assets 5, TOTAL : 131, International Accounting Standard and International Financial Reporting System have been adopted by Institute of Chartered Accountants of Bangladesh (ICAB), Bangladesh Bank and been complied by our Bank in the preparation of the Financial Statements. 36 Annual Report 20 10

39 Board s Report 42. Our Contribution to the National Exchequer for the last 5 years 2009 and our contributions to the National Exchequer for the last 5 years are given below: Year Amount ( in million) , , , Yearwise Operating Income for last 5 years Interest Income, Income from Investment, Commission, Exchange and brokerage and other 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Growth in Operating Profit in million for the last 5 years is given below. Year Amount ( in million) , , , , , Total Lending for the last 5 years lendings for the last 5 years are given below: Year Amount Growth ( in million) Rate , % , % , % , % , % 45. Growth of Operating Profit for the Last 5 years A partial of view of a Power Plant established by the Bank s finance. Year Amount Growth ( in million) Rate , % , % , % , % , % 46. Return on Equity for last 5 years During the year 2010, Return on Equity (ROE) of the Bank was percent as against are given below: Annual Report

40 Board s Report Year Percentage (%) of RoE % % % % % 47. Provision for Income Tax Tk.1, million of the previous year. 48. Net Profit before Tax and Provision Provision for Bad and Doubtful Debt, Provision for Off Balance Sheet Exposures, Taxes etc. including General Provision on Unclassified Loans and Advances as against Tk.4, million of the previous year, thus, posting an increase of 46 percent. 49. Net Profit after Provision and Income Tax A partial view of a 100% export oriented sophisticated textile industry established by the Bank s finance. Bad and Doubtful Debt, Provision for Off Balance Sheet Exposures, Taxes etc. including General Provision on Unclassified Loans and Advances as against Tk.1, million of the previous year, thus, posting an increase of 48 percent. 50. Yearwise Net Profit for the last five years Net profit of the Bank stood at Tk.2, million as on 31st December, 2010 as against for the last 5 years are given below: Year Amount ( in million) Growth Rate , % , % (27.41%) , % % 51. Operating Results any Provision for Bad and Doubtful Debt, Provision for OffBalance Sheet Exposures, Taxes Reptiles at the breeding ground of the Export Oriented Reptile Project set up by the Bank s finance. the Bank during the year 2009 was Tk.4, million and thus the Bank attained growth of percent and 18 percent respectively in deposit mobilization, loans and advances, imports, exports, bank guarantee and foreign remittance respectively. 52. Statutory Reserve provisions before tax and dividend during the year as per Section 24 of the Bank Company December, Customer Service Customers are our first priority and our all endeavors are directed to meet their requirements. Our core strategy is to build up long term relationship with customers to achieve sustained growth objectives and increase brand image. It is our motto to provide superior quality customer service through the integration of the latest state of the art technology and to fulfill excellent, innovative, flawless and speedy solutions to all problems of different customer 38 Annual Report 20 10

41 Board s Report segments and has been widely acclaimed by the business community ranging from small entrepreneurs to large business conglomerates for excellence in service delivery. Customers, in a nutshell, are the prime priority for the Bank and the company philosophy is to satisfy clients who act as ambassadors of the Bank for its image building. marketing division organogram focuses on customer centric approaches to increase brand promotional activities and established Brand marketing through Customer Service, CSR, Event Management, Product Diversification, Positioning and Repositioning etc. and their profitability in doing Banking business. We have tailored, designed and validated promotes establishing long term profitable relationship with the clients, providing total solutions to customer problems and ultimately adds value to the Bank by way of creating a winwin situation both for the client and for the Bank. We have introduced diverse range of products and services to cater to the varying needs of all our valued clients both asset and liability products, retail products, internet Banking, SMS Banking, online and all branch Banking, Capital Market Services (CMS), SME and Agri finance etc. We are proud to have satisfied customers from every strata of society, Corporate, Small and Medium Entrepreneurs and Retail Customers. We meet the demand of all segments of customers, men and women, professionals and businessmen, resident and nonresident, public servants and entrepreneurs, homemakers and builders, etc. We are offering our corporate customers a wide range of banking products and financial solutions to meet their everyday business needs which include Corporate Credit Products, Treasury Products, Foreign Trade Finance, Project and Syndicated Loans etc. We are pledge bound to introduce financial inclusion products for the under privileged, Green Banking etc. to cater to the emerging socio economic priorities of the country. We firmly believe that continuity of our earning good profit growth, and market share of business depend mainly on our quality of customer service. 54. Research and Development (R&D) and Training Participant are seen along with the Resource Persons at the workshop entitled Islamic Banking Module in BankUltimus held on January 28, 2010 at Bank s Training Institute. existing position and cope with the ever increasing growth potentials, focuses on making continuous investment in Research and Development (R& D) and Training to optimize operational efficiency in raising employee productivity, ensure excellence in banking operamanpower with skills and professional expertise. In implementation of the human resources development strategy, the Bank established a Training Institute in 2005 at the 4th floor of Head Office premises with the vision to build up professionals with technical, human and exchange their free ideas, update their knowledge base, and open up their eyes to the Training Institute in other words, is contributing to capacity build up of human resources, exploiting their full potentials and update them with latest banking theories and practices. recording highest per Branch profitability which speaks of highest employee productivity in the banking sector. During the year 2010, the Southeast Bank Training Institute arranged a total of 42 training conducted in 2010 are summarized as follows: Annual Report

42 During the year 2010, the Southeast Bank Training Institute arranged a total of 42 training courses, seminars and

43

44 Board s Report 01. Professor Moulana Mohammad SalahUddin Chairman, Shariah Supervisory Committee and Khateeb Baitul Mukaram National Mosque, Dhaka. and Former Principal, MadrashaeAlia, Dhaka. 02. Mr. A. S. M. Fakhrul Ahsan Member, Shariah Supervisory Committee and former Deputy Governor, Bangladesh Bank. 03. Moulana Abdul Hakim Azadi Member, Shariah Supervisory Committee. Media personality and Khateeb Eskaton Garden Jame Mosque Dhaka. Under the guidance of Shariah Supervisory Committee, the Bank designed all deposits, investment products and services of the Islamic Banking Branches and formulated policy guidelines and working procedure. The Bank obtained membership of the Central Shariah Board of Islamic Banks of Bangladesh and the Islamic Banks Consultative Forum. It has also been maintaining close relationship with Islamic Banks in Bangladesh and abroad. As on December 31, 2010, the deposit and investment of Islamic Banking Branches were Tk crore and Tk crore which posted growths of (3.60) % and 29.71% respectively over those of During the period 2010, total import and export business handled by the Islamic banking branches were Tk crore and Tk crore respectively. Non Performing Investment of Islamic branches was % of their total investment in The performance of the Islamic Banking Branches during the year 2010 is also reflected in Bank s Balance Sheet and Profit and Loss Account as are given hereafter: 58. Credit Card Back in 2005, the bank joined the band of Credit Card service providers in the country to meet the emerging demand of the customers. At that time, a small number of banks were providing the service to a small segment of potential customer group. As customers get to recognize the benefits of using credit cards, the potential market grew bigger triggering entrance of more banks into card business. Amid stiff competition, we have observed our consecutive growth in last five years both in customer base and operating income. At the end of the year 2010, our customer base stood at 19,172 which is 44% more than that of the previous year and operating income grew 20% to reach Tk. 106 million in the same period. Year by year, we are posting consistent growth to ensure the sustainability of the business in the long run. In line with our focus, we are in constant effort to ensure that our customers get maximum benefit while using SEBL Credit Card. Throughout the journey; we have configured our card service with all the major applications indispensable in modern society to make payment at store and to avail quick cash in time of urgent need from anywhere in the world. We have already introduced Card Cheque and Cash Withdrawal facility from any branch of the bank and SMS PushPull service for transaction alert. Travel Card is our another new product which is a prepaid International Card. While all the applications and facilities are available in our card service menu, we cannot overlook the significant role played by customer service and technological sophistication. Prompt and reliable customer service standard has been set by our dedicated support team with the most sophisticated technological setup. Coupled with Credit Card, from last year we have also started to provide own proprietary Debit Card service under our own processing system to facilitate 24 hrs cash withdrawal to our customers. In 2010, we have already started installing our own ATM Booths and we are in massive rollout plan to expand our own ATM Network across the country in the years ahead. Meanwhile, we have established our network connection with DBBL and Brac Platform so that our valued clients do not miss out cash withdrawal from over thousands of ATMs all over the country. As number of cardholders is increasing day by day, we are now in a position to segregate the potential market and plan our products and services according to the needs of different segments. To provide elevated service experience to the most valued and honored citizens of the country, we have a plan to introduce VISA Platinum Card in the next year. With all our innovative product design and dedicated service delivery the Card Division is contributing to enhance the brand image of SEBL in the modern technologybased financial transaction arena. 42 Annual Report 20 10

45 Board s Report 59. Branch Expansion Program The Bank has been operating with 76 (seventy six) Branches tilll December 2010, out of which 46 Branches are urban including 4 (four) Islami Branches, 15 Branches are rural including 1 Islami Branch and the rest 15 (fiffteen) are SME/Krishi Branches in different important locations of the country. Moreover, 2 Off Shore Banking Units at Dhaka EPZ and Chittagong EPZ are also performing since and respectively. The Bank plans to open 10 more Branches and 10 SME/Krishi Branch in 2011 to cover more areas with a number of new products to provide smooth services to the people of the country subject to obtaining license from Bangladesh Bank. 60. Credit Rating of the Bank Southeast Bank was rated by Credit Rating Information and Services Limited (CRISL). The summary of their ratings is given below: Name of the Rating Company Credit Rating Information and Services Limited (CRISL) Particulars Entity Rating Long Term Short Term Remarks AA Double A Minus (High Safety) Banks rated in this category are adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions. Reporting Date: 27th April, 2010 ST2 High Grade High certainty of timely payment. Liquidity factors are strong and supported by good f u n d a m e n t a l protection factors. Risk factors are very small. Based on Audited Financial Statement s as of 31 December 2009 and is valid up to April 26, 2011 for long term. The task of the Credit Rating of the Bank for the year 2010 has been assigned to Credit Rating Information and Services Limited (CRISL). They have not yet finalized the report. Their report shall be disclosed in print media and to the regulators as soon as it is received. 61. Implementation of BaselII and Our Preparedness Southeast Bank Limited is well placed to implement the Risk Based Capital Adequacy under BaselII regime and has commenced reporting of Minimum Capital Requirement (MCR) from January 01, 2009 under the guidelines of Bangladesh Bank in line with the capital adequacy framework devised by Basel Committee on Banking Supervision. The new capital framework is intended to foster a strong emphasis on risk management and is structured on 3 (three) pillars which are (1) Minimum capital Requirement (2) Supervisory Review Process and (3) Market discipline. BaselII introduces an array of sophisticated credit risk approaches and a new focus on operational risk. The essential features of the BaselII are: A. Three different approaches to calculate Minimum Capital Requirement for Credit Risk. B. Capital incentive for banks for moving to more sophisticated credit risk management approaches based on internal rating. C. Core disclosure (basic information) and supplementary disclosure to make market discipline more effective. Bank s Director A H M Moazzem Hossain is seen inaugurating Bank s Rokeya Sarani Branch at Dhaka City on 30 December, A partial operational view of a modern BiCycle Industry financed by the Bank. Annual Report

46 Board s Report To calculate Minimum Capital Requirement we follow Standardized Approach against Credit Risk, Standardized Rule Based Approach against Market Risk and Basic Indicator Approach for Operational Risk. In order to fulfill the regulatory requirement of maintaining minimum capital, the bank has increased paid up capital to Tk.6.93 billion by issuance of right amounting to Tk.3.69 billion including premium towards expanding the capital base. The Bank has also approved issuance of subordinated bond for Tk.2.00 billion to increase the bank s TierII capital in the light of additional requirement under the BaselII framework. The Bank has stepped up efforts to prudently manage risk weighted assets under the BaselII guidelines by expediting credit rating of corporate/ large borrowers from approved external credit rating agencies which shall be instrumental in efficient and optimum capital management. The implementation of PillarII of BaselII framework would perhaps be the most challenging as it requires development of comprehensive risk model infrastructure to capture all the risks not covered under PillarI of the framework. The Bank has formed a Supervisory Review Process (SRP) team comprising members from the senior management approved by the Board which will participate in dialogues with the SREP team of Bangladesh Bank on the issue of maintenance of adequate capital to compensate all the risks associated in the business. The Bank is in the process of developing an Internal Capital Adequacy Assessment Process (ICAAP) for capital targets in line with the Bank s risk profile and control environment. A hightech modern Knit Factory financed by the Bank. A view of an Inland Cargo Ship procured by Bank s finance by the Bank s customer. A strong stresstesting framework for sensitivity analysis is in place to ascertain the ability of the Bank to withstand adverse economic scenario. The Bank has also put impetus on preparing itself to adapt to the advanced methods of risk calculation as per the roadmap of Bangladesh Bank. 62. Corporate Governance One of the basic policies of the Bank is to strengthen its corporate governance status by establishing responsible management system and strengthening supervision. Efforts are also being geared up to improve the transparency and accountability of the management. While putting efforts to achieve corporate objectives, Southeast Bank gives top priority to establishing corporate governance standard at all levels and in all units. The Bank has also implemented the requirements contained in Securities and Exchange Commission Notification No. SEC/CMRRCD/ /Admin/0208 dated February 20, A comprehensive report about corporate governance scenario of Southeast Bank Limited is given at page Appointment of Statutory Auditors In the 15th Annual General Meeting of the company, M/S Rahman Rahman Huq was appointed External Auditors of the Bank for the 1st term till conclusion of the next Annual General Meeting. They are eligible to reappointment in the 16th Annual General Meeting. 64. Dividend The Bank focuses on the principles of sharing good achievements with the respected Shareholders. Accordingly, the Board of Directors recommends 20% Stock Dividend (Bonus Share) and 10% cash dividend for the year The Bank s priority is to increase shareholder value by enhancing the overall earnings of the Bank. 65. Election of Directors In terms of Article 105.(i) of the Articles of Association of the Bank, onethird (1/3rd) of the Directors for the time being or if their number is not three (3) or multiples of three (3) then the number nearest to onethird (1/3rd) shall retire from office. 66. Corporate Social Responsibility Southeast Bank manages its business in a responsible way and contributes to the society and environment in which it operates. A report on Corporate Social Responsibility of the Bank in 2010 is given at page 77 of this Annual Report. 44 Annual Report 20 10

47 Board s Report 67. Acknowledgement The Board expresses gratitude to the Almighty Allah for the success of the Bank in The Board extends thanks to the valued customers, patrons and wellwishers for their continued support and cooperation to the Bank. The Board also places on record its appreciation for the Senior Management Team, all Executives and other members of the Staff for their dedicated services to the Bank. The Board offers thanks to the Government of Bangladesh, Bangladesh Bank, Securities and Exchange Commission, Registrar of Joint Stock Companies and Firms, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for their appreciable support and cooperation to the Bank. The Board also expresses its appreciation to M/S. Rahman Rahman Huq, the Auditors of the Bank, for their efforts for timely completion of Audit and preparation of Financial Statements. The Board of Directors also thanks both the print and electronic media personnel for giving media coverage to Bank s different activities and events. Finally, the Board thanks the respected Shareholders and assures them that it will continue to add to the shareholder wealth through further strengthening and development of the Bank in which they have placed their trust and confidence. On behalf of the Board of Directors. Alamgir Kabir, FCA Chairman Annual Report

48 cwipvjbv cl `i cöwz e`b cwipvjbv cl `i cöwz e`b wcöq kqvi nvìvie ` t mvd_b e vs Ki cwipvjbv cl ` e vs Ki 16Zg evwl K mvaviy mfvq Avcbv `i mv`i m vly Rvbv Q Ges wbix Ki cöwz e`bmn 31 k ww m ^i 2010 Bs Zvwi L mgvß wnmve eq ii Rb e vs Ki 16Zg evwl K cöwz e`b Avcbv `i m y L Dc vcb Ki Z c i AZ ší Avb ` eva Ki Q mv ji wek A_ bxwzi Ae vb I m vebv MZ eq ii `~e j Ges AwbqwgZ cybi v ii ci 2011 mv ji wek A_ bxwzi DbœwZ Zzjbvg~jKfv e n«vm cv e DbœZ `k jv Z 2010 mv ji cybi vi wqj axi MwZi Ges Dbœqbkxj m vebvgq `k jv Z hv wqj A c vk Z cwic 2009 mv ji A_ bwzk g `ve v _ K, cybi v ii eqi 2010 G we k i wrwwwc AvbygvwbK kzkiv 3.9 fvm e w c q Q G eq i wek e vs Ki mv cöwzk cöv j b wek cöe w i nvi kzkiv 3.3 fvm Dbœqbkxj I m vebvgq `k jvi cöz vwkz cöe w hv, 2010 mv ji 7 kzvsk _ K K g 6 kzvsk n Z cv i D P Av qi `k jvi cöe w 2010 mv ji 2.8 kzvsk _ K 2011 mv j 2.4 kzvs k n«vm c Z cv i AvBGgGd Gi 2011 mv ji wek A_ bwzk Ae v I m vebvi Dci cöyxz cöwz e` b `Lv hvq h DbœZ we k i `~e j A_ bxwzi aviv wek A_ bwzk cybi vi K cöfvwez Ki e 2011 mv j hy³iv óªi A_ bwzk cöe w i nvi 2.2 kzvs k K g h Z cv i hv 2010 mv j wqj 2.6 kzvsk GgbwK BD ivc I Rvcv bi cöe w i m vebvi Aby¾ j 2011 mv j BD ivcxq GjvKvq A_ bwzk cöe w 1.3 kzvs k wei n q hv e e j AbywgZ BD ivcxq A bk ` k hlv b Avw_ K KZ b I AwaK ekviz Avf šíixy Pvwn`v K Kwg q w` Q mme `k jv Z A_ bwzk cöe w AviI n«vm cv e 2011 mv j avivevwnk gy`ªvùjb Ges mikvix FY e w i Kvi Y Rvcv b b~b Zg 1.1 kzvsk cöe w cöz vkv Kiv n Q Dbœqbkxj `k jv G eqi wewfbœ gvîvq wek A_ bxwzi cybi v ii aviv Ae vnz ivl e hw`i Zv `i Ae`vb Lye ekx bq Pxb I fvi Zi bz Z vaxb Dbœqbkxj Gwkqvq µgvmzfv e AwaK cöe w j Kiv hv e wkší wrwwwcõi cöe w gvsvgvws ch v q Ae vb Ki e wek e vs Ki g Z, A_ bwzk cöe w i mvgwmök MwZaviv GZB `ye j n e h A_ bxwzi cybi v ii wfwë kw³kvjx n e bv 187RvwZ ms v e j Q "`~f vm ekz G cöe w i nvi jv ekviz `~ixki Y Ges A_ bwzk LvZmg~ ni mnvqk niqvi Rb h _ó n e bv... wek A_ bxwz Z AZ vwak Aw izv Ae vnz _vk e hv cybi vi cöwµqv K wewfbœ gvîvq wewnœz Ki e BD ivcxq Rv bi A_ bwzk evrvi msku, Aw wzkxj g~jab cöevn Ges Lv` I R vjvwbmn `ª e i g~j e w i ûgwk cybi vi cöwµqvq wepz wz NUv e Ó Gwkqv Ges Avwd«Kvi Dbœqbkxj `k jv Z cöe w i nvi wkqzuv n«vm cv e hvi cöavb KviY `ª e i g~j e w, we kl K i Lv` I R vjvbx Z hw` Lv ` i AvšÍR vwzk g~j e w c Z _v K Zvn j hvmvb mgm v Ges `vwi`ªzvi cöfve ZxeªZi n Z cv i G me `k jvi bxwzwba vikmb K g~j ùxwz wbqš b AwaK g bv hvmx n Z n e hvi dj ^iƒc `ye j cöe w cwijw Z n e mv ji evsjv ` ki A_ bxwzi mvims c ewk K Avw_ K g `v Ges R vjvbx I AeKvVv gvmz msku m Ë I G eqi ` ki A_ bxwzi AwaKvsk m~p K BwZevPK cöe w i aviv `Lv M Q, hw`i gy`ªv evrvi I cyuwrevrvi wkqzw` bi Rb Aw i wqj A_ eq i `k 5.8% cöe w AR b m g n q Q mikvi A_ eq ii Rb wrwwwc cöe w i j gvîv 6.70% wba vib K i Q 2010 mv ji 3q I 4_ ˆÎgvwm Ki gz A_ bwzk cöe w Ae vnz _vk j G j gvîv AR b `y:mva bq 2010 A_ eq i K wl Lv Z cöe w e o 4.70% G `uvovq 2009 A_ eq i G Lv Z cöe w i nvi wqj 4.10% 2010 A_ eq i wkílv Z cöe w n«vm c q 6% G `uvovq 2009 A_ eq i G Lv Z cöe w i nvi wqj 6.5% Drcv`b Lv Zi cöe w 2010 mv j n«vmcövß n q 5.7% G `uvovq hv 2009 mv j wqj 6.7% 2010 A_ eq i mev Lv Zi cöe w wkwâr e w cövß n q 6.40% G `uvovq hv 2009 mv j wqj 6.3% A_ eq ii ïi Z c~e ez x eq ii Zzjbvq cöe w i aviv gvuvgywu m šívlrbk wqj 2010 mv ji m Þ ^ i g~j ùxwz 7.6% G cuš Q Q 2011 A_ eq ii cö_g 4 (Pvi) gv m Ki Avni Yi Î e vck cöe w AwR Z nq hv c~e ez x eqi jvi Zzjbvq 25.7% ekx e vck gy`ªv (Gg2) AvMó2010 G 22.9% e w cvq 2009 Gi AvM ó e w i nvi wqj 19.2% A_ eq i ` ki wrwwwc cöe w& i j gvîv 6.7% DbœxZ Kivi j evsjv `k e vsk cö qvrbxq A_ hvmvbg~jk gy`ªv bxwz MÖnb K i K `ªxq e vs Ki mv ji evwl K cöwz e`b Abyhvqx emikvix Lv Z 2010 mv j kzkiv 24.2 fvm F Yi cöe w i wecix Z 2011 A_ eq i kzkiv 16.0 fvm F Yi cöe w i j gvîv wb q DbœqbevÜe gy`ªvbxwz cöbqy Kiv nq hv Z 2011 A_ eq i g~j ùxwz 6.5 fv M w i ivlv m e nq 46 Annual Report 20 10

49 cwipvjbv cl `i cöwz e`b 2011 A_ eq ii RyjvBb f ^i G 2010 Gi GKB mg qi P q ißvbx 35.8% nv i e o 8.27 wewjqb gvwk b Wjv i DbœxZ nq GKB mg q ` ki Avg`vbxi Î cöe w i nvi 35% Gi Dc i wqj 2009 mv j AvnwiZ ˆe `wkk iwg UÝ 11 wewjqb Wjv ii wecix Z 2010 mv ji cö_g 11 gv m AvnwiZ ˆe `wkk iwg U Ýi cwigvb wqj 10 wewjqb Wjvi 2010 mv ji RyjvB m Þ ^i ch ší ` ki evwyr NvUwZ 1.3 wewjqb Wjvi ev o, wemz eq i GKB mg qi evwyr NvUwZi cwigvb wqj 739 wgwjqb gvwk b Wjvi ch vß R vjvbx, AeKvVv gv Ges AwaKZi e emv evüe cwi ek wbwðz Kiv M j ` ki A_ bxwzi 7 fvm ch ší cöe w AR bi gzv i q Q evsjv `k e vs Ki mv ji evwl K cöwz e`b Abyhvqx m ve cöe w AR bi Î SzuwKmg~n n Q: evwl K Dbœqb cwikíbv cwic~y ev Íevq bi AwbðqZv, we`yyr Lv Zi cökímg~ ni ev Íevq b aximwz, mikvix emikvix hš_ D M vm Kg m~px (wcwcwc) cövwzôvwbwkki Yi Î wej ^, AvšÍR vwzk I `kxq evrv i R vjvbx I Lv` `ª e i g~j e w i `i b g~j wbqš bi cöz vwkz djvdj AR b Kiv Ges Rbkw³ ißvbx I ˆe `wkk gy`ªv Avni Yi Î wbgœg~lx cöeyzv BZ vw`ó 03 GK br i e vs Ki cwiwpwz mvd_b e vsk wjwg UW wøzxq cör b i GKwU emikvix e vsk wnmv e D`vi wek A_ bxwzi hy M 1995 mv j cöwzwôz n q Q ez gv b G e vs Ki Aby gvw`z gyjab 10,000 wgwjqb UvKv Ges 31 k ww m ^i, 2010 Zvwi L me gvu gyjab Ges mwâwzi cwigvb `vuwo q Q 17, wgwjqb UvKvq evsjv ` ki bz vbxq e vsk wnmv e cöwzôv jvf Kiv Ges RvZxq A_ bxwz Z Zvrch c~y Ae`vb ivlv Gi j B Zvg a e vsk mkj Kvh m~p K cöe w AR b c~e K 16 eqi e vswks Kvh µg mdjzvi mv _ cwipvjbv K i Q 2010 mv j e vs Ki Ki ciez x gybvdvi cwigvb 2, wgwjqb UvKv Av jvp eq i e vs Ki AvgvbZ 2009 Gi Zzjbvq 11 kzvsk e w c q 107, wgwjqb UvKvq Ges AMÖxg 19 kzvsk e w c q 92, wgwjqb UvKvq DbœxZ n q Q wemz 5 eq i ( ) e vsk Avgvb Z 23 kzvsk, AMÖx g 23 kzvsk, ißvbx Z 37 kzvsk, Avg`vwb Z 30 kzvsk Ges e `wkk iwg U Ý 76 kzvsk Mo cöe w AR b K i wemz 6 eq i ißvbxi cwigvy e o Q wzb Y hvi cwigvy 58, wgwjqb UvKv Ges e `wkk iwg U Ýi cwigvy e o Q AvU Y hvi cwigvb 28, wgwjqb UvKv mvwe K Kvh µ gi DrKl Zvi Av jv K e vsk cwipvjbv Ges YMZ DËiY e vs Ki wbku me vwak i Z c~y welq ez gv b mviv `k Ry o e vs Ki 76wU kvlv hvi g a 10wU GmGgB / K wl kvlv Ges 2wU Ae kvi e vswks BDwbU i q Q fwel Z AviI 10wU kvlv Ges Kgc 10wU GmGgB / K wl kvlv Lvjvi cwikíbv i q Q KwVb evav m Ë I, DrmvnDÏxcbv Ges K g v` gi mv _ AwaKZi mvdj AR b Avgv `i cö Póv Ae vnz i q Q gybvdv AR bi Zxeª cöwz hvwmzv gvkv ejvq Avgiv Avgv `i ` I AwfÁ Rbkw³i Dci wbf i Kwi Avgv `i kw³ n Q MÖvnK `i mv _ Nwbô I nƒ` Zvc~Y Askx`vwiZ, ` ki e emvwqk I evwywr Kfv e i Z c~y vbmg~ n Avgv `i ` p Ae vb Ges ˆe `wkk evwyr e w K í AvšÍR vwzkfv e L vz e vs Ki mv _ K imcb Û U e vswks m úk cöpwjz FY I ˆe `wkk evwyr msµvší mevmg~n QvovI Avgv `i Ab vb mev cy jv n Q Real Time OnLine Any Branch Banking, Bmjvgx e vswks, gv P U e vswks, ˆØZ gy`ªvi wfmv µwwu KvW, GwUGg, wk v FY cökí, fv³v FY, GmGgB e vswks, K c v iu e vswks, wmwû KU FY, wø Y e w mâq cökí, gvwmk mâq cökí, gvwmk gybvdv cökí, cbkb mâq cökí, I qr Avb vi cbkb w g Ges Gm,Gg,Gm e vswks BZ vw` AZ vaywbk Ges cixw Z e vswks cöhyw³ Ges mev cy mg~ ni mgwš^z e env ii gva g DbœZ MÖvnK mevb n Q Avgv `i mdjzvi g~j PvweKvwV MÖvnKivB n PQ Avgv `i cöavb AMÖvwaKvi Avgiv K Vvi cwikª gi gva g Póv K i _vwk MÖvnK `i GKwU KvD Uvi _ K m ú~b e vswks mev cuš Q w` Z MÖvnK `i Avw_ K Pvwn`vmg~n c~i Y Avgv `i Kg xevwnbx bzzb cöhyw³ AvZ K i Q, Zv `i mevc Y i Ávb e w K i Q Ges Zv `i ` Zvq bzzb gvîv hvm K i Q MÖvnK `i cö qvrbxq civgk cö`vb Ges m wókxj Avw_ K Pvwn`vi cq `bxq Ges ^vpq ` c~y mgvavb cö`v bi gva g Avgiv kªôz AR b wek vmx Avgiv ckvmz, b vqwfwëk, eüyermj Ges Ávbwbf i AvPi Yi gva g evwywr K, z`ª e emvqx I e w³mn mkj ai bi MÖvnK `i m e vëg MÖvnK mev cö`vb K i _vwk mvd_b e vsk K GKwU AvaywbK e vswks cöwzôv b i cvšíwiz Ki Z Avgiv mskíe Avgiv Avkvev`x G e vskwu n e K g Zrci, Kg m~px Z cömwzkxj, jb ` b mz vkªxq, wepviwe epbvq b vqcivqy, gb b fwel gylx, ` wóf½x Z wbi c Ges MÖvnK mevq wb ew`z Avgv `i cwikíbvmg~n e vs Ki AvaywbK e e vcbv, DbœZ cöhyw³i e envi, AwaKZi gybvdv AR b Ges my` p Avw_ K wfwë I e vs Ki D P mybvg m wói j cöyxz e vs Ki cwipvjbv cl `i g~j evb w`kwb ` kbv I ZË veav b Ges Avgv `i ` Rbkw³i mvwe K mn hvwmzvq Avgiv ^ Q I `vwqz kxj Kv úvbx e e vcbvq A½xKvive Annual Report

50 mvd_b e vsk wjwg UW we` gvb g~j eva I Pjgvb avivi mv _ Zvj i L Ges e nr Avw_ K cöwzôv bi mvgvwrk I cwi e ki cöwz `vwqz I i Z i cöwz m vb i L evwywr K Kvh µg cwipvjbv K i _v K MÖxb e vswks Gi w` K e vsk `ª Z AMÖmi n Q e vsk kqvi nvìvie ` K Zzjbvg~jKfv e DËg cöwz`vb `Iqvi wbðqzv w` Z AvMÖnx 04 g~jab I wirvf e vs Ki Aby gvw`z g~ja bi cwigvy n Q 10, wgwjqb UvKv Ges 31 k ww m ^i, 2010 Bs ch ší e vs Ki cwi kvwaz g~jab wqj 6, wgwjqb UvKv Av jvp eq i e vs Ki g~jab I wirv f i cwigvy wqj 17, wgwjqb UvKv hv 2009 mv j wqj 9, wgwjqb UvKv, G Î cöe w i nvi kzvsk 31 k ww m ^i, 2010 Bs Zvwi L e vs Ki g~jab Znwej I wirv f i cwigvy wbgœiƒc : cwipvjbv cl `i cöwz e`b (K) wgwjqb UvKvq g~j g~jab (Uvqvi1 g~jab) cwi kvwaz g~jab 6, kqvi wcöwgqvg wnmve 1, mswewae wirvf 3, mvaviy wirvf msiw Z Avq 1, gvu g~j g~jab 13, (L) evowz g~jab (Uvqvi2 g~jab) A kªyxk Z F Yi Rb ms vb m ve `v qi Dci ms vb m ú` c~b:g~j vqb wirvf 1, wmwkdwiwui c~y:g~j vqbrwzb wir vf G PÄ BKzqvjvB Rkb w wz gvu evowz g~jab 3, gvu g~jab I wirvf (K+L) 17, g~jab ch vßzvi AbycvZ evsjv `k e vs Ki e v mj2 wi cvwu s Gi AvIZvq e vsk wba vwiz Ab~ b 9 fvm g~jab ch vßzvi nvi Gi wecix Z 31 k ww m ^i 2010 G SzuwKc~Y m ú `i Dci fvm g~jab ch vßzvi AbycvZ ervq iv L mv j c~wruevrv ii mvwe K Ae vb 2010 mv j cöwzôvwbk kqvi nvìvi cöavbz: Avw_ K cöwzôvbmg~n Ges mbmv _ ` ki wewfbœ RvqMvq nvrvi nvrvi bzzb bzzb z`ª wewb qvmkvix ` ki `ywu cyuwrevrv i KvwU KvwU UvKv wewb qvm K i cyuwrevrv i Zvij Avwa K i cöfv e ekxifvm Kv úvbxi kqvig~j evrvi gšjwfwëi Zzjbvq A bk ekx e w cvq 2010 mv j kqv ii AwfwnZ g~j 100 UvKv _ K 10 UvKvq cwiez b A_ev AwfwnZ g~j cwiez bi R ei d j z`ª wewb qvmkvixmy cyuwrevrv i mswkó Kv úvbxi kqvi epv Kbvq AwaK DrmvwnZ nb 2010 mv ji cy iv mgq Ry o cyuwrevrv ii cöwz wewb qvmkvix `i Av v DË ivëi e w c Z _v K djkö wz Z cyuwrevrv i k sljv c~btcöwzwôz niqv Ges g~j ms kvab Acwinvh n q c o 2010 mv ji k l wwgmb m e v P m~pk 8, c q U cux Q c~e ezx eq ii k l hv wqj 4, mv j m~pk 3, c q U ev kzvsk e w cvq wwgmb Gi cwimsl vb Abyhvqx 5B ww m ^i 2010 Zvwi L cyuwrevrv ii mvaviy m~pk m e v P 8, c q U cux Q 2010 mv ji k l cyuwrevrv i gvu evrvi g~ja bi cwigvb `uvovq 3, wewjqb UvKv hv c~e ezx eq ii H mg q wqj 1, wewjqb UvKv, G Î e w i nvi kzkiv fvm 48 Annual Report 20 10

51 cwipvjbv cl `i cöwz e`b wemz eq i gvu 25wU Kv úvbx Zv `i kqvi Rbmvavi bi g a Bmy Kivi R b cöv_wgk MY cö Íve (AvBwcI) ck K i AvBwcI cö ÍveK Z gvu kqv ii gvu g~j wqj 34, wgwjqb UvKv 2010 mv j MY cö Íve ckkvix bzzb 25wU Kv úvbx ZvwjKvf~³ niqvi d j wwgmb Z ZvwjKvf~³ Kv úvbxi msl v 218 Z `uvovq 07 mvd_b e vs Ki kqvi Ges Zvi gvwjkvbv c~wruevrv ii mkj gšjwfwë hgb kqvi cöwz Avq, jf vsk NvlYvi aviv, kqvi cöwz bxu m ú` g~j, Kvh µg cöm~z bm` cöevn, kqvi wcöwgqvg wnmv ei w wz, mvavib mwâwz Ges kqvi cöwz Av qi wecix Z evrvi g~j we epbvq Avgv `i e vs Ki kqv i kw³kvjx Avw_ K Ae vb cökvk cvq mvd_b e vs Ki kqvi nvìvimb m šívlrbk wewb qv Mi dj cviqvi j wewb qvm wm vší MÖn bi cy e `xn gqv ` mzk Zvi mv _ ch v jvpbv c~e K gšjwfwë m ^wjz Kv úvbx Z wewb qvm K i _v K K) kqvi nvìvi msl v Avgv `i e vs Ki kqv ii Dci wecyj msl K kqvi nvìvi Av v i L Qb 31 k ww m ^i 2010 Zvwi L e vs Ki kqvi nvìvi msl v `uvovq 66,898 R b wemz eq ii G mgq kqvi nvìvi msl v wqj 22,152 Rb kqvi nvìvi msl vi e w i nvi 202% bx P c~e ezx cuvp eq i Avgv `i e vs Ki kqvi nvìvi msl v e w i Z_ `qv nj : eqi kqvi nvìvi msl v e w i nvi , % , % , % , % , % L) kqvicöwz abvz K Avq 2010 mv ji k l e vs Ki cwi kvwaz mvavib kqv ii msl v `uvovq 6,93,08,404 ` ki Dfq cyuwrevrv i ZvwjKvf~w³i ci _ K G ch ší Avgv `i Bmy K Z kqvi % e w cvq e vswks e emv cwipvjbvi gva g Avgiv wemz cuvp eqi hver D jl hvm cwigvy gybvdv AR b K iwq Ges jf vs ki D jl hvm Ask mswkó kqvi nvìvi `i g a e Ub K iwq Avgv `i Kv úvbxi kqvi cöwz D P Avq e vs Ki jvfrbkzv cökvk K i bx P e vs Ki cuvp eq ii kqvi cöwz Avq `Lv bv nj: UvKvq eqi kqvi cöwz Avq M) m šívlrbk bxu m ú` g~j Avgv `i Kv úvbxi kqv ii bxu m ú`g~j _ K evsv hvq Kv úvbxi gvu m ú `i cwigvb gvu `v qi Zzjbvq AwaK Kv úvbxi D PZi bxu m ú`g~ j i Kvi Y AwaK msl K wewb qvmkvix Avgv `i e vs Ki kqv i wewb qvm Ki Qb 2006 mvj _ K e vs Ki bxu m ú` g~j bx P `Lv bv nj: eqi UvKvq bxu m ú` g~j Annual Report

52 cwipvjbv cl `i cöwz e`b N) Aby gvw`z I cwi kvwaz g~jab 1995 mv j e vsk Kvh µg ïi Kivi ci _ K Gi Aby gvw`z I cwi kvwaz kqvi g~ja bi cwigvb D jl hvm fv e e o Q ez gv b Avgv `i Aby gvw`z g~ja bi cwigvb 10,000 wgwjqb UvKv Ges cwi kvwaz g~jab 6, wgwjqb UvKv bx P 1995 mvj _ K e vs Ki Aby gvw`z I cwi kvwaz g~ja bi cwigvb `Lv bv nj : O) jf vsk Nvlbv wgwjqb UvKvq eqi Aby gvw`z g~jab cwi kvwaz g~jab , , , , , , , , , , , , , , , Avgv `i Kv úvbxi cwipvjbv cl ` kqvi nvìvi `i Rb AwR Z gybvdv _ K D Pnv i jf vsk Nvlbv K i _v K m Kvi Y Avgv `i e vs Ki kqvi nvìvimy kqvi cöwz m šívlrbk jf vsk c q _v Kb bx P 2006 mvj _ K e vs Ki NvwlZ bm` jf vsk I gyjabx jf vs ki nvi `Lv bv nj : eqi bm` jf vsk g~jabx jf vsk gvu jf vsk % 20% 30% % 35% % 20% 35% % 25% 40% % 8% 28% P) e vs Ki ivbum& kqvi Bmy mvd_b e vsk 2003 mv j we` gvb 2wU kqv ii wecix Z 1wU kqvi Abycv Z 16,50,000 wu ivbum& kqvi Bmy K i e vsk cybivq 2006 Bs mv j 1,05,63,696 wu ivbum& kqvi Bmy K i Q 2006 mv j cöwzwu 100 UvKvi kqvi 100 UvKv wcöwgqvgmn 200/ UvKv Bmy g~ j Bmy K i e vsk me kl 2010 mv j 60/ UvKv wcöwgqvgmn 160/ UvKv g~ j 2,31,02,801 wu ivbu kqvi Bmy K i 50 Annual Report 20 10

53 cwipvjbv cl `i cöwz e`b Q) GK br i mvd_b e vs Ki kqv ii ˆewkó mg~n 1) wecyj msl K kqvi nvìvi 2) fvj I m šívlrbk jf vs ki nvi 3) abvz K kqvicöwz Avq 4) kqvicöwz fvj bxu m ú` g~j 5) 'G' kªyxf~³ kqvi wn m e ` ki Dfq cuywrevrv ib jb `b n Q 08 AvgvbZ e vsk 31 k ww m ^i 2010 ch ší 107, wgwjqb UvKv AvgvbZ msmön K i Q hv 2009 mv j wqj 96, wgwjqb UvKv cªwz hvwmzvg~jk my `i nvi, e vs Ki AvgvbZ msmö ni Kvh Ki cö Póv Ges e vs Ki Dci MÖvnK `i Av v Avgvb Zi G D jl hvm AMÖMwZ Z Ae`vb i L Q e vsk z`ª I gvsvwi mâqkvix `i Rb ek wkqz AvKl Yxq mâq cökí Pvjy K i Q mâq cökímg~n ïay Avgvb Zi cwigvb e w K iwb, Avgvb Zi bmz gv bii cwiez b NwU q Q 31 k ww m ^i, 2010 Zvwi L e vs Ki AvgvbZ wgkªy wqj wbgœiƒc : wgwjqb UvKvq % K) PjwZ I Ab vb AvgvbZ 10, % L) mâqx AvgvbZ 5, % M) ^í bvwu k AvgvbZ 7, % N) vqx ev gqv`x AvgvbZ 79, % O) wewfbœ cök íi AvIZvq msm nxz AvgvbZ 2, % P) cö `q we ji wnmve Lv Z 1, % gvu: 107, % 09 FY bxwzgvjv mvd_b e vsk wjwg UW Ljvcx FY SuywK Kgv bvi j evsjv `k e vs Ki wb ` kbv AbymiY K i GKwU myôy FY weziy bxwzgvjv ˆZix I ev Íevqb K i Q GB FY weziy bxwzgvjvq e nëi cwim i GKwU cwigvwr Z FY wezi Yi hvezxq welqvewj hgbt AMÖvwaKvi LvZ mg~n wpwýz Kiv, Aby gv`b cöwµqv, `wjjvw` m úv`b Ges Z`viwK I cwi`k b AšÍf~ ³ Kiv n q Q AwaKšyÍ, LvZwfwËK we kl cö qvrbxq FY hgb cwiev ii Rb fv³v FY, M n wbg vb FY, Mvox µq FY, GmGgB FY, K wl FY Ges mxwgz cwim i PvgovRvZ cy mvgmöx ˆZixKviK `i Rb F Yi Aby gv`b I wezi Yi Avjv`v bxwzgvjv ˆZix Kiv n q Q 10 FY I AwMÖg 2010 mv j Avgiv ` ki A_ bxwz Z wewfbœ DÌvb czb ` LwQ eq ii gvsvgvws mgq _ K ` ki cuywrevrv i Avgiv bwriwenxb Pv½vfve cöz K iwq hv kl PZz_ vs k G m Kg Z ïi K i Q 31 k ww m ^i, 2009 mv j gvu FY cvu dwjii cwigvy wqj 77, wgwjqb UvKv hv 19% e w c q 31 k ww m ^i, 2010 mv j 92, wgwjqb UvKvq DbœxZ n q Q ˆZix cvkvk, e, is, wmivwgk, Jla, UwjKwgDwb Kkb, c Uªvwjqvg, B úvz, cö KŠkj, RvnvR fv½v wkí, wm g U, fvr ˆZj, wpwb wkí, wi qj G óu, cwienb, K wl I Ab vb e emvqxk Lv Z wewb qvm Kivi gva g Kvb wbw` ó Lv Z K `ªxf~Z bv K i F Yi eûgylx e envi wbwðz Kiv n q Q Annual Report

54 11 cwipvjk FY 2009 mv j e vs Ki cwipvjkmy e vsk _ K Kvb bzzb FY MÖnb K ibwb 12 M vivw U e emv e vsk 2009 mv ji 11, wgwjqb UvKvi wecix Z G eqi gvu 22, wgwjqb UvKvi M vivw U Bmy K i e vs Ki m vwbz MÖvnK `i Av e`bµ g wewfbœ mikvix KZ c, gš Yvjq, ^vqz kvwmz cöwzôvb, K c v ikb, e w³em, emikvix Kv úvbxmg~n Ges eûrvwzk Kv úvbxmn wewfbœ cöwzôv bi AbyK~ j M vivw U Bmy Kiv nq 13 GmGgB A_ vqb mikvi I evsjv `k e vs Ki bxwzgvjvi mv _ GKgZ cvly K i GKwU MwZkxj GmGgB LvZ ˆZwi Avgv `i GKwU AMÖvwaKvi wfwëk KvR 2010 mv ji 31 k ww m ^i ch ší mviv ` k gvu 10 wu bzzb GmGgB/K wl mvwf m m Uvi vcb K i hv ciewz Z GmGgB/K wl kvlvq iƒcvšíi Kivi gva g GB Lv Z FY wezi Yi Kvh µg K emevb Kiv n q Q 31 k ww m ^i, 2010 ch ší Avgv `i e vs Ki gvu GmGgB/K wl kvlvi msl v 15wU 2009 mv ji 31 k ww m ^i GmGgB Lv Z gvu F Yi w wz wqj wgwjqb UvKv hv 2010 mv j 47.01% e w c q UvKv wgwjq b DbœxZ nq GmGgB Lv Z Av iv AwaK A_ vqb Kivi Rb bzzb bzzb FY cy Pvjy Kiv I GB Lv Z Av iv ekx cwigvy A_ wewb qv Mi K_v AwaK ZrciZvi mv _ we epbv Kiv n Q cyivzb XvKvi PvgovRvZ `ªe ˆZwiKviK `i QvovI m ve Q A_ vq bi Rb UvsMvB ji vbxq ZuvZx `i K_v Avgv `i e vsk i Z i m ½ we epbv Ki Q GB Kvh µ gi AvIZvq Zv `i Avw_ K cö qvrb wguvevi Rb B Zvg a cö qvrbxq mgx vi KvR kl K i Ab vb Kg m~pxi ˆZwi Kiv n q Q 14 fv³v FY fv³v FY cvwievwik / µzvmvavi Yi cö qvrbxq wewfbœ wrwbm cî hgbt iwd«rv iui, Uwjwfkb, Iqvwks gwkb, AvmevecÎ, e w³mz Mvox BZ vw` µq Kivi Rb cö`vb Kiv nq GB FY 2009 mv j MwVZ cöavb Kvh vj qi GKwU we kl BDwbU Øviv cwipvwjz nq 31 k ww m ^i, 2009 mv j GB Lv Z cö`ë F Yi gvu w wz wqj wgwjqb UvKv hv 31 k ww m ^i, 2010 mv j 7.96% e w c q wgwjqb UvKvq DbœxZ nq 15 wmwû KU A_ vqb mvd_b e vsk wjwg UW wmwû KU A_ vq bi gva g wewfbœ K c v iu nvd Ri bzzb cökí ev Íevqb, weggavib I PjwZ g~jab mieivn Kivi Î e vswks Lv Z AMÖYx f~wgkv cvjb K i Avm Q 2010 mv j Avgv `i e vsk 5wU wmwû KU A_ vq bi gva g wewfbœ wkí LvZ hgbt we`y r, wpwb, ˆZjRvZ, e I myzv BZ vw` Lv Z gvu 1170 wgwjqb UvKv weziy K i Q 16 K c v iu A_ vqb mvd_b e vs Ki ` Kg xevwnbx wewfbœ cövwzôvwbk MÖvnK `i Pvwn`v I cö qvr bi mv _ mvgäm c~y wewfbœ A_ vqb, hgb: PjwZ g~jab, jb ` bi cwic~ik mevmg~n, ˆe `wkk gy`ªvi jb `b, A_ e e vcbv cöf wz mev w` q _v K 17 Pvgov Lv Z A_ vqb evsjv `k mikv ii Leather Sector Business Promotion Council (LSBPC) m ½ 2009 mv j, Avgv `i e vsk cöv_wgkfv e 20 wgwjqb UvKv e Ub Kivi j GB Lv Z FY weziy Kvh µg ïi K i Q B Zvg a PvgovRvZ `ªe cö ÍyZKviK `i K FY weziy Kiv ïi n q Q Ges cö qvrb Abyaveb K i FY weziy Av iv evo e e j Avkv Kiv n Q 18 Q A_ vq bi gva g K wl FY cwipvjbv cl `i cöwz e`b ` ki 48% gvbylb RxweKvi Rb K wli Dci wbf ikxj ` ki µgea gvb Lv` Pvwn`v, Lv` k m i gva g ˆRe R vjvbx ˆZwi I Lv` ißvbx KviK ` ki i Ykxj bxwzgvjv gvkv ejvi j ` ki Lv` Drcv`b e w i Avkvq mikvi evwywr K e vsk jvi wbr ^ ZË veav b Ges emikvix cöwzôv bi gva g AwaKcwigv b K wl FY weziy wbwðz Kivi Rb cö qvrbxq bxwzgvjv ˆZwi K i Q Avgv `i e vsk K wllv Z FY wezi Yi Rb Q A_ vqb K GKwU bzzb c wz wnmv e MÖnY K i Q GB Kvh µ gi AvIZvq Avgv `i e vsk mvgvb ww cvwr Ui gva g wnmve Lvjvi myweav cö`vb K i mgqgz, evavnxb I ^ Q FY wezi Yi cöwz bri w` q Q Avgv `i e vsk Q A_ vq bi gva g cwuqvq cvb Pvlx `i gv S FY weziy Kvh µg ïi K i Q Ab vb g~j evb km hgb njy`, Av`v BZ vw` Pvl Kivi Rb GKB FY weziy c wz AbymiY Kiv n e mvd_b e vsk wjwg UW mv j wbr ^ kvlv Ges z`ª FY cöwzôv bi mn hvmxzvq 40 KvwU UvKv K wl I cjx FY wezi Yi j gvîv wba viy K i Q cövwšík Drcv`bKvix `i A_ vqb QvovI Avgv `i e vsk 2010 mv j K wl F Yi 52 Annual Report 20 10

55 cwipvjbv cl `i cöwz e`b GKwU eo Ask K wl wfwëk wk íi Rb Aby gv`b K i Q Avgiv Avkv KiwQ m cöwz Lvjv GmGgB/K wl kvlv mg~ ni gva g K wl wfwëk wk í A_ vqb Kvh µg Av iv Rvi`vi n e K wl Î FY cö`v bi Rb cöavb Kvh vj q GKwU Avjv`v BDwbU B Zvg a Kvh µg ïi K i Q 19 ißvbx Dbœqb Znwej ißvbxkvik `i cö qvrbxq KuvPvgvj we `kx gy`ªvq µq Kivi Rb evsjv `k e vsk 1989 mv j Òißvbx Dbœqb ZnwejÓ bv g GKwU we kl Znwej MVb K i Aby gvw`z wwjvi kvlv mg~n ißvbxkvik `i we `kx gy`ªvq FY cö`vb Kivi Rb GB Znwej n Z gvwk b Wjv i FY MÖnY Ki Z cv i ez gv b GB Znwe ji cwigvb 300 wgwjqb gvwk b Wjvi Avgv `i e vsk 2010 mv j GB Znwej n Z gvu wgwjqb gvwk b Wjvi weziy K i Q hv 2011 mv j Drcv`b Lv Zi ißvbx e w i Rb Av iv e w cv e e j Avgiv Avkvevw` 20 cökí A_ vqb I wrwwwc Z Ae`vb ïi _ KB mvd_b e vsk wjwg UW wrwwwc Z Zzjbvg~jK ekx Ae`vb iv L Ggb Lv Z A_ vqb K i Avm Q Ges 2010 mvji Zvi e wzµg wqj bv Zwi cvkvk QvovI wrwwwc Z i Z c~y f~wgkv iv L GiKg A bk Lv Z Avgv `i wewb qvm i q Q hvi g a i q Q wmivwgk wkí, ^v mev LvZ, wpwb wkí, c Uªvwjqvg, wi qj G U, AeKvVv gvmz Dbœqb BZ vw` AvMvgx eqi jv Z Avgv `i e vsk bzzb cökí we kl K i K wl wfwëk wkí, cvu I cvurvz`ªe, R vjvwb / c Uªvwjqvg, M vm I jvbu BwÄwbqvwis Lv Z Av iv A_ vq bi welqwu i Z i mv _ we epbv Ki Q 21 gwnjv D ` v³v Znwej mvd_b e vsk wjwg UW gwnjv D ` v³v `i e emvq cömvi I mg w i e vcv i m e v P i Z cö`vb K i Q 31 k ww m ^i, 2010 mvj ch ší Avgv `i e vsk 41 Rb gwnjv D ` v³vi gv S FY weziy K i Q D³ Lv Z gvu w wzi cwigvy wgwjqb UvKv gwnjv D ` v³v `i e emvqxk Kvh µg w`bw`b m cömvwiz niqvq GB Znwej AvMvgx eqi jv Z evov bv n e e j Avgiv Avkvev`x 22 FY kªyxkiy I ms vb msi Y e vs Ki Z_v kqvi nvìvi I AvgvbZKvix `i ^v_ i v _ F Yi YMZgv Yi wfwë Z FYmg~ ni kªyxweb vmkiy Ges Zvi wecix Z cö qvrbxq ms vb msi Y Kiv GKwU AZxe i Z c~y e e v evsjv `k e vs Ki bxwzgvjv Abyhvqx mvd_b e vsk FYmg~n kªyxkiy I cö qvrbxq ms vb msi Y K i _v K kªyxk Z FYmg~n _ K bm` Av`vq I Dchy³ Î evsjv `k e vs Ki wbqg cwicvjb K i cyb:zdwmwjki Yi gva g weiƒc kªyxk Z FY n«vmki Y e vsk e e vcbv KZ c me `v mrvm djkö wz Z, ww m ^i 2010 G e vs Ki kªyxk Z F Yi nvi 4.26% G mxwgz ivlv m e n q Q cvkvcvwk evsjv `k e vs Ki bxwzgvjv Abyhvqx kªyxk Z / A kªyxk Z I w wzcî ewnf ~Z AvB Ugmg~ ni wecix Z cö qvrbxq ms vb msi Y Kiv n Q 2010 mv j e vsk KZ K cö qvrbxq ms vb 3, wgwjqb UvKvi wecix Z 3, wgwjqb UvKv msi Y Kiv n q Q 23 FY ch e Y, AvMvg mzk Zv I Am šívlrbk FYmg~ ni e e vcbv F Yi YMZgvb ervq ivlv I Zv Dbœq bi j FY ch e Y GKwU Pjgvb cöwµqv Avgv `i e vs Ki m vwbz MÖvnK, kqvi nvìvi I AvgvbZKvix `i ^v_ i v _ cö`ë FYmg~ ni YMZgvb ervq ivlv I kªyxk Z F Yi cwigvy n«vmk í wbqwgz ch e Y I ZË veavb Kiv nq g~jz: cöavb Kvh vj qi µwwu G vwwgwb óªkb wwcvu g U Ges kvlv ch v qi mswkó Kg KZ vmy mgwš^z n q cö`ë FYmg~n mgqgz Av`v qi Rb wbqwgz ch e Y I ZË veav b we klfv e Zrci _v K Kvb F Yi `~e jzv cwijw Z n j D³ FYmg~ ni GKwU ZvwjKv (Watch List) cö Z KiZ: Zv wbweofv e ch e Yi gva g wei c kªyxk Z niqv _ K weiz ivl Z Zviv we klfv e m Pó _v Kb e e vcbv cwipvj Ki bz Z cöavb Kvh vj qi DaŸ Zb ch v qi Kg KZ v `i mgš^ q MwVZ GKwU we kl KwgwU `~e j cök wzi / Am šívlrbk FYmg~n wbqwgz ch e Y I ZË veav bi gva g Dnvi YMZ gv bvbœq b me `v m Pó Av Q 24 FY Ae jvcb Ges kªyxk Z F Yi wecix Z Av`vq KzFY Ae jvc bi gva g kªyxk Z FY n«vm I e vjvýmxu mg ivlv GKwU AvšÍR vwzkfv e ^xk Z e e v kªyxk Z FYmg~n _ K bm` Av`vq I wbqwgzki Yi wbwg Ë µwwu wi g v br g U wwwfk bi wjm vj A v dqvm GÛ wikfvix wwcvu g U I kvlv ch v qi mswkó wwcvu g Ui Kg KZ ve ` hymcrfv e wbqwgz ch e Y I Z`viwK K i Avm Q 2010 mv j e vsk kªyxk Z F Yi wecix Z wgwjqb UvKv bm` Av`vq K i Q Ges Ae jvcbk Z F Yi wecix Z wgwjqb UvKv bm` Av`vq K i Q 25 wewb qvm e vs Ki wewb qv Mi cwigvb Av jvp eq i wqj 18, wgwjqb UvKv hv MZ eqi wqj 21, wgwjqb UvKv wewb qvm gva g jv Z AšÍf~ ³ wqj mikvix UªRvix wej, cövbr eû, cvewjk wjwg UW Kv úvbxi kqvi BZ vw` e vsk me `v D P gybvdv m úbœlv Z wewb qvm Ges evsjv `k e vsk KZ K wba vwiz hymcr wewae Zvij AbycvZ ervq ivlvi Dci AwaKZi i Z Av ivc K i Annual Report

56 26 mvd_b e vs Ki AvšÍR vwzk evwyr Kvh µg 2010 mvd_b e vsk me `vb Zvi K c v iu MÖvnK `i AvšÍR vwzk evwyr m úv` bi Rb hy Mvc hvmx I Awfbe e emvwqk mgvavb I mev cö`vb K i Avm Q e vskwui 21wU kvlv ˆe `wkk Kvh µg m úv` bi Rb evsjv `k e vs Ki Aby gv`bcövß Z_v Authorized Dealer (AD) GB 21wU AD kvlvq ch vß msl K AwfÁ I cöwk YcÖvß Rbej i q Q hviv e vs Ki m vwbz MÖvnK `i Avg`vbx I ißvbx evwyr, ˆe `wkk M vivw U, vûevb FYcÎ, WKz g Uvix Kv jkkvbm BZ vw` mev ` Zvi mv _ cö`vb K i Avm Q GB 21wU AD kvlv QvovI `ke vwc Qwo q _vkv Avgv `i Ab vb cövq me kvlvq ch vß Rbej I cöhyw³mz AeKvVv gv we` gvb hv Zv `i K c v iu MÖvnK `i ˆe `wkk evwyr Ab AD kvlvi gva g mypvi fv e m úbœ Ki Z mvnvh K i Q e `wkk evwyr Kvh µ g AwfÁ Rbkw³, mg qvc hvmx Ges Kvh Kix evwywr K mev Ges kw³kvjx cöhyw³mz AeKvVv gv GB m ei mgš^ q m~pbv jmœ _ KB mvd_b e vsk AvšÍR vwzk evwy R µgea gvb nv i D jl hvm cöe w jvf K i Avm Q Avg`vbx evwyr Ab vb eq ii g Zv 2010 mv ji mvd_b e vsk Avg`vbx evwyr A_ vq b D jl hvm mvdj jvf K i Q GB eqi e vskwu gvu 103, wgwjqb UvKvi (BDGm Wjvi wgwjqb) Avg`vbx evwyr A_ vqb K i Q hv 2009 Gi Avg`vbxi Zzjbvq 49% AwaK Ri ix Lv` km hgb Mg, wpwb, fvr Zj BZ vw` QvovI 2010 mv j mvd_b e vsk KZ K A_ vqbk Z cöavb Avg`vbx cy wj n Q g~jabx hš cvwz, 100% ißvbxgylx wk íi KuvPvgvj, Œ vc RvnvR, mgy`ªmvgx RvnvR I hvîxevnx D ovrvnvr e vs Ki MZ Qq eq ii Avg`vbx evwy R i ZvwjKv eqi Avg`vbx evwy R i cwigvb Avg`vbx evwy R i cwigvb BDGm Wjvi (wgwjq b) UvKv (wgjq b) , , , , , , , , ißvbx evwyr mvd_b e vsk me `vb Abyaveb K i Avm Q h GKwU ` ki ißvbx wkí n Q mb ` ki cövykw³ GB g bvfve K mvg b i L, e vskwu ` ki ißvbx wk í DrKl mva bi j m e v P i Z Av ivc K i ißvbxkvik `i DbœZi I Awfbe mev cö`vb K i Avm Q 2003 mvj _ KB e vskwui ißvbx evwy R µgea gvb cöe w cwijw Z n q Avm Q wek evrv i A_ bwzk g `vi bwzevpk cöfv ei Kvi Y 2010 mv j ` ki ißvbx wk í wkqzuv weizv _vkv m Ë I mvd_b e vsk 2010 mv j ißvbx evwyr A_ vq b m šívlrbk cöe w jvf K i Q 2010 mv j mvd_b e vs Ki gvu ißvbx A_ vqb wqj 58, wgwjqb UvKv (BDGm Wjvi wgwjqb) hv 2009 mv ji ißvbx A_ vq bi Zzjbvq 24% ekx e vs Ki MZ Qq eq ii ißvbx evwy R i ZvwjKv eqi ißvbx evwy R i cwigvb ißvbx evwy R i cwigvb BDGm Wjvi (wgwjq b) UvKv (wgjq b) , , , , , , cwipvjbv cl `i cöwz e`b 54 Annual Report 20 10

57 cwipvjbv cl `i cöwz e`b e `wkk gy`ªvi AšÍgy Lx cöevn hv hš_fv e e vs Ki iwgu vý I ißvbx evwyr _ K AwR Z n q Q Zv e vskwui ˆe `wkk Avg`vbx `vq kv ai j ˆe `wkk gy`ªv e e vcbvq AZ ší Kvh Kixfv e Aw wzkxj ˆe `wkk gy`ªv evrv ii Dci e vskwui wbf ikxjzv eûjvs k n«vm K i Q GB eqi e vskwui cöavb ißvbx cy wj n Q ˆZix cvlvk, cvu I cvurvz cy, wmivwg cy, wngvwqz gvq I Ab vb K wlrvz cy 27 e `wkk iwgu vý AvniY e `wkk iwgu vý msmö ni Rb wemz 2010 mvj Avgv `i ` ki Rb h _ó mdj wqj bv G Î 2009 mv ji Zzjbvq cöe w AwR Z n q Q gvî 2.2 kzvsk wek g `ve v I Rbkw³ ißvbx nªvm cviqv GB bwzevpk cöe w i KviY e j aiv n Q iwgu vý Lv Z RvZxq cöe w n«vm c ji mvd_bó e vsk 18 kzvsk cöe w AR b m g n q Q Ges 2010 mv j 28, wgwjqb UvKvi mgcwigvb e `wkk iwgu vý AvniY K i e vskwu gv K U kqvi 3.21 kzvsk _ K 3.67 kzvs k DbœxZ K i Q 2010 mv j mvd_bó e vsk `k I we ` k iwgu vý AvniY I weziy buiq vk e w i j we k i kxl vbxq KwZcq G PÄ nvd Ri mv _ Pzw³e n q Q Ges vbxqfv e ^bvgab K qkwu GbwRIi mv _I iwgu vý weziy Pzw³ m úv`b K i Q GQvov gy Vv dv bi gva g DcKvi fvmxi nv Z iwgu v Ýi A_ cuuš Q `Iqvi Rb, ` k cwipvwjz e nëg gvevbj dvb Acv iui, MÖvgxb dv bi mv _ Pzw³ m úv`b K i Q GmKj e e v e vskwui iwgu v Ýi A_ mvavib gvby li nv Z `ª Z, mn R I wbivc ` cuuš Q `Iqvi m gzv e w K i Q ` Rbkw³ ißvbx DrmvwnZ Kivi wbwg Ë mvd_bó e vsk `wi`ª Rb Mvôx K A_ vq bi Rb cöevmx FY bv g GKwU we kl FY mev Pvj~ K i Q mvd_bó e vsk wek vm K i cöevmx FY mevwu we `kmvgx `wi`ª Rb Mvôx K ev nviv niqv _ K i v K i, HmKj cwiev ii gy L nvwm dvuv Z D¾j f~wgkv ivl e mnbxq gvîvi my `i nvi, mnr kz, b~b Zg WKz g Uk bi Rb cöevmx FY mevwu h _ó RbwcªqZv cv e e j Avkv Kiv n Q DbœZ I gvb m úbœ cöhyw³i gva g AwaKZi MÖvnK mev wbwðz Ki Z mvd_bó e vsk GKwU bzzb iwgu vý mwjdkb md&uiqvi Pvjy K i Q hvi d j m vwbz DcKvi fvmxiv `ª Z, mn R I wbivc ` iwgu v Ýi A_ MÖnb Ki Z m g n eb Avi MÖvnK mevi DrKl Zvq AvgivI GKavc GwM q _vke 28 e `wkk cöwzm½ (Correspondent) m úk e vswks Kvh µ gi m~pbv _ KB ˆe `wkk evwy R i mvd j i Rb mvd_b e vsk wbijm cö Póvq AvšÍR vwzk L vwzm úbœ e vsk wji mv _ kw³kvjx cöwzm½ m úk M o Zz j Q 31 k ww m ^i 2010 ch ší 94wU ` ki 645wU e vsk, mvd_b e vs Ki cöwzm½ wn m e AšÍfy ³ n q Q e `wkk gy`ªvq Avg`vbx `vq cwi kv a Avgv `i A zbœ mybvg Ges kw³kvjx A_ bwzk Ae vb Avgv `i K International Finance Corporation (IFC), Asian Development Bank (ADB) FMO (Netherland Finance Company) Ges Ab vb L vwzm úbœ AvšÍR vwzk e vsk wj n Z Funded Ges NonFunded Credit Line AR b Ki Z mnvqzv K i Q mvd_b e vsk i Z c~y 6wU ˆe `wkk gy`ªvq ^bvgab AvšÍ RvwZK e vsk wji mv _ ez gv b 26wU b óªv GKvD U Pvwj q hv Q GB ˆe `wkk gy`ªv wj n Q BDGm Wjvi, cvdû, BD iv, RvcvwbR B qb, mybm d«vb&k Ges Asian Clearing Union Gi Aax b Wjvi I BD iv 6wU i Z c~y gy`ªvq Lvjv 26wU b óªv GKvD U e vskwui ˆe `wkk Avg`vbx `vq myózfv e cwi kva Ges Af šíixb dvû e e vcbvq AZ ší i Z c~y f~wgkv cvjb K i Avm Q 29 SWIFT Kvh µg mvd_b e vsk Zvi MÖvnK `i wbiwewqbœ, wbf i hvm I wbivc` A_ bwzk jb `b myweavi j 2000 mv j SWIFT (Society for Worldwide Interbank Financial Telecommunication) Gi m`m c` MÖnb K i e vskwui SWIFT Unit ` ki e vswks RM Zi Ab Zg miv AwfÁ I cöwk YcÖvß Rbe ji mgš^ q MwVZ cöwz eqib e vskwui SWIFT Unit cöhyw³mz DrKl K Kv R jvwm q SWIFT Network Gi mv _ bzzb bzzb Feature hvm K i SWIFT mev K Av iv mnrzi I DbœZ K i Avm Q 2010 mv ji kl fv M e vskwui SWIFT I qe wbf i Centralized Software SWIFT Alliance Messenger (SAM) Gi AšÍfy ³ n q Q hvi d j e vskwui SWIFT m ^wjz mkj kvlv wbiwew Qbœfv e 210wU ` ki 9000 cöwzôv bi mv _ Live mshyw³ Z m g n q Q 30 UªRvix Kvh µg I Znwej e e vcbv mvd_bó e vs Ki UªRvix wefvm e vs Ki vbxq, ˆe `wkk g~`ªvi jb `b, Zvij SzuwK n«vm, my `i nvi n«vm, m ú` I `vq e e vcbv Ges m e vcwi Znwej e e vcbv cwigvc I Zvi SzuwK n«vm K i _v K AvaywbK e emvqxk c wz I DbœZ cöhyw³i mnvqzvq evrv ii w`k wb ` kbv wby qi gva g G wefvm Kvh Kix f~wgkv cvjb K i GQvovI Avgv `i UªRvix wug CRR (Cash Reserve Requirement), SLR (Statutory Liquidity Requirement) msi Y mn mkj wewae wbqg myôyfv e g b Pj Q we klz 2010 mv ji klv a wek A_ bwzk g `vi Kvi Y cöavb ˆe `wkk gy`ªv, cy Ges kqvi evrvi wqj AZ ší Aw wzkxj GB cwiw wz Z SzuwK e e vcbvb wqj UªRvixi g~j j UªRvix wefvm G Aw wzkxj my `i nvi I Zvij cwiw wz Z Ges Znwej e e vcbv I Zvi Avbylw½K SzuwK gvkv ejvq Kvh Kix f~wgkv cvjb K i Q UªRvix wefvm Zvi Annual Report

58 cwipvjbv cl `i cöwz e`b ˆe `wkk g~`ªv evwy R i Î UªRvix wefv Mi cöavb f~wgkv n Q gy`ªv e e vcbv, jb `b I evrvi Zix Kiv d ib G PÄ W cö qvrb Abyhvqx µq/weµq, Ae eüz Znwej wewb qvm Ges wewfbœ c wz Z, hgb SWAP, AwMÖg Pzw³ (Forward Contract) Gi gva g e vs Ki Znwe ji Kvh Kix e envi wbwðz K i Q GB W mviv eqi e vs Ki we Z kvlvi gva g D jl hvm cwigvy e `wkk gy`ªv jb `b K i Q 31 m ú` I `vq KwgwU (ALCO) evsjv `k e vs Ki bxwzgvjv Abyhvqx, w wzc Îi SzuwK ` fv e e e vcbvi Rb e vs Ki GKwU c~y Kvh Kix m ú` I `vq KwgwU (ALCO) i q Q G KwgwU e vs Ki e e vcbv cwipvjk, Dce e vcbv cwipvjkmy Ges cöavb Kvh vj qi KŠkjMZ fv e i Z c~b wefvmxq cöavb `i wb q MwVZ m ú` I `vq KwgwUi mfv cöwzgv m AbywôZ nq G KwgwU e vs Ki my `i nvi SzuwK I Zvij SzuwK ch v jvpbv K i Ges SzuwK n«v mi cö qvrbxq e e v MÖnY K i mv ji gy`ªvevrvi 2010 mv j gy`ªvevrvi GKwU Aw i mgq AwZµg K i Q gy`ªvms KvPb bxwzi Kvi Y evsjv `k e vsk bm` msi Y nvi G eqi `ybevi cwiez b K i Q; cö_gevi g 2010 mv j 5% _ K 5.50% Ges me kl ww m ^i 2010 mv j 5.50% _ K 6.0% G DbœxZ K i G Kvi Y e vswks LvZ cöpû Zvij msk U c o, hvi djkö wz Z eq ii kl w` K Kjgvwb my `i nvi wqj AZ ší Aw wzkxj ZvQvov evsjv `k e vsk mikvix wmwkdwiwu Ri wbjv gi gva g cövq 32, wgwjqb UvKv evrvi _ K D Ëvjb K i Q Zv m Ë I, bm` msi b nv i 50 ewmm c q U evov bvi d j e vswks LvZ _ K AviI cövq 30, wgwjqb UvKv D ËvwjZ n q Q; GQvovI evsjv `k e vs Ki Ò i cv gv K UÓ wbqš Y e vswks Lv Zi Zvij msku K AviI Nbxf~Z K i Q Avgv `i e vsk AZ ší wep bzv I ckv`vwi Z i mv _ gy`ªvevrv i mwµqfv e AskMÖnY K i Q AZ ší wep b wewb qvm wm v šíi d j Avgv `i e vsk GB SzwKc~b evrv ii my `i nvi I Zvij SzuwK wbqš b i L m ev P Avq wbwðz K i Q GQvov e vsk cövbgvix wwjvi wn m e mikvix wmwkdwiwu Ri µqweµ qi mwµqfv e AskMÖnY K i Q Ges G Î _ KI D jl hvm cwigvy gybvdv AR b Ki Z m g nq 33 Ad kvi e vswks BDwbU (OBU) mvd_b e vs Ki `ybwu Ad kvi e vswks BDwbU hv XvKv I PÆMÖvg Bwc RW A j Aew Z, GLb m ú~b fv e Zv `i Kvh µg Avi K i Q GB BDwbU `ywu Bwc RW A j Aew Z UvBc 'A' cöwzôvb wj K bvbv cökv ii e vswks myweav cö`vb Ki Z cv i hgb: AvšÍR vwzk evwyr mev Avg`vbx I ißvbx, NonResident Foreign Currency (NFCD) GKvD U, ˆe `wkk gy`ªvq IqvwK s K vwcuvj A_ vqb BZ vw` e vskwui Ad kvi e vswks BDwbUmgyn GB mkj myweav AZ ší AvKlbx q g~ j mnrzi k Z cö`vb K i _v K 2010 mv j Avgv `i Ad kvi BDwbU Avg`vbx wej discounting Gi gva g 75, BD Gm Wjvi Avq K i Q 34 Bbdi gkb UK bvjwr GK_v Ab ^xkvh h, cöhyw³i Dbœqb e wzz AvaywbK e vswks LvZ K wuwk q ivlv Ges Gi mvwe K Dbœqb m e bq e vswks mev Z cöhyw³ µgea gvb nv i AMÖYxf~wgKv cvjb K i hv Q mvd_b e vsk AvaywbK cöhyw³i mv _ mvgám i L e vswks mev Ges MÖvnK mš wói avivevwnkzv wbwðz ivl Z Kvi e vswks Gi AeKvVv gvmz Dbœqb I cöhyw³i DrK l ch vß wewb qvm K i hv Q 2010 mv j e vsk Z_ I hvmv hvm cöhyw³ (ICT) Lv Z ek K qkwu cªkí MÖnY K i Q Gi g a Ab Zg n Q e vs Ki wbr ^ fe b GKwU AvaywbK WvUv m Uvi (DC) vcb hlv b wbiwew Qbœ fv e Kvi e vswks wm g (CBS) cwipvjbvi cwi ek m wó Kiv n q Q Ges wøzxqwu n Q DËivq wbr ^ fe b wwrv vi wi Kvfvwi mvbu (DRS) vcb Dfq Î Uptime Institute Gi Tier III Gi wbwzgvjv K Abymib Kiv n q Q GB ermi e vsk Zvi wbr ^ ATM Switching System vcb K i Q Ges WvP&evsjv I eª vk e vs Ki mv _ Zv `i ATM e env ii D Ï k Pyw³ ^v i K i Q e vs Ki Av ikwu bzzb D ` vm MÖnY n Q wewfbœ kvlvi gva g evsjv `k ivw UªvÝ cvu A_wiwU (BRTA) Gi c gui Mvoxi Ki I wdm MÖn Yi e e v hv MZ eq ii b f ^i _ K ïi n q Q AwaKš, e vsk Zvi mev mg~ ni g a B Uvi bu e vswks mev mshy³ K i Q hv _ K MÖvnKe ` N i A_ev Ab Kv bv myweavrbk vb n Z wkqz e vswks mev MÖnb Ki Z cvi e Gi d j MÖvnKe `i A_ I mg qi mvkªq n e MÖvn Ki wbku h_v m e `ª Z iwg UÝ mev cö`v bi j e vsk iwg UÝ GÛ Bb Kv qix g v br g U wm g bvgk GKwU cökí Pvjy K i Q hv cix vg~jk ch v q i q Q Ges AvMvgx 2011 mv ji g a hv MÖvnK ch v q Pvjy n e GB ermi Av ikwu D jl hvm cökí n Q evsjv `k A Uv g UW PK cö mwms wm g (BACPS) G AskMÖnb GB j e vsk B Zvg a evsjv `k A Uv g UW wk qvwis nvdr (BACH) Gi mv _ hy³ n q Q B Zvg a e vsk mviv ` k m vwbz MªvnK `i gv S Magnetic Ink Character Recognition (MICR) PK weziy K i Q ez gv b BACPS XvKv wfwëk kvlv mg~ n Pvjy n q Q Ges evsjv `k e vsk Gi mgqmxgv Abyhvqx 2011 mv ji gvp gv mi g a XvKvi evb i Aew Z Aewkó kvlv mg~ n GB mev Pvjy n e GB mevi g~j D Ïk n Q PK wk qvwis Gi mgqmxgv Kwg q Avbv 56 Annual Report 20 10

59 cwipvjbv cl `i cöwz e`b (BACH) Gi Av ikwu kvlv evsjv `k B jkuªwbk dvû UªvÝ&dvi buiqvk (BEFTN) mev ez gv b Zv cix vgyjk ch v q i q Q Ges Avkv Kiv n Q 2011 mv ji g a Gi Kvh µg ïi n e evsjv `k e vsk Avw_ K cöwzôvb mg~ ni g a Avw_ K jb `b KvVv gvi Dbœq bi Rb GB mev Pvjy K i Q FY m úwk Z Z_ Av`vb cö`vb AvaywbKi Yi Rb e vsk B Zvg a evsjv `k e vsk Gi CIB Online cök íi mv _ hy³ n q Q GB j e vsk B Zvg a Zvi Kvi e vswks wm g (CBS) Gi m ½ CIB gwwij mshy³ K i Q hv ez gv b cix vg~jk ch v q i q Q Ges 2011 mv ji g a GB cökí mgvß n e 2010 mvj wbtm ` n e vs Ki Rb KvwiMix I cöhyw³mz Dbœq bi ermi Ges e emvwqk D Ïk I MÖvnK e `i e nëi mš wói K_v wpšív K i e vsk Zvi cöhyw³ K hy Mvc hvmx K i Q Ges GB aviv AvMvgx ZI Ae vnz _vk e 35 gvbe m ú` wefvm e vs Ki gz GKwU Avw_ K cöwzôv b gvbe m ú` K me vwak GKK i Z c~y Ges wnzki kw³ wn m e we epbv Kiv nq ez gvb K c v iu RM Z my` gvbe m ú` K GK cökv ii g~jab wn m e we epbv Kivi cvkvcvwk G Î mkj cökvi e q K Drcv` bi j wewb qvm wn m e Mb Kiv nq GB aviyv K mvg b i L Ges me vwak cöe w AR bi j mvd_b e vsk GKwU mgwš^z gvbe m ú` msmön Ges Dbœqb KŠkj MÖnb K i Q e vsk wbwðz h, DbœZ gvbe m ú` KŠkj Aej ^ bi gva g DrK ó gv bi Kg Pvix msmön, Zv `i ` Zv e w, m RbkxjZv, AvbyMZ Ges e vs Ki cöwz ` p A½xKvi jv f mg_ n e mvd_b e vs Ki gvbe m ú` cwikíbvi g~j wfwë n jv wbr ^ ` gvbe m ú` m wó G j mvd_b e vsk me `v GKwU mgwš^z bxwzi gva g gvbe m ú` msmön K i 2010 mv j e vs Ki e emv m cömvi Y, Aemi MÖnY Ges Ab vb cökvmwbk Kvi b m ó c` c~i bi j mvd_b e vsk wewfbœ c ` 165 Rb m` cvk Kiv Zi b/zi bx K Kg KZ v wn m e wb qvm cö`vb K i Q 31 k ww m ^i 2010 Zvwi L e vs Ki Rbej 1613 R b wm q cš Q Z a 126 Rb wbe vnx, 1247 Rb Kg KZ v Ges 240 Rb Ab vb Kg Pvix 2010 mv j e vsk 318 Rb Kg KZ v/kg Pvix wb qvm `vb K i Q Zvi g a 57 Rb AwfÁ e vskvi, m` cvk Kiv 165 Rb Ges 96 Rb e vsk MvW GQvov e vsk 2010 mv j 266Rb Kg KZ v K c `vbœwz cö`vb K i Q hvm Zv m úbœ gvbe m ú` msmön, wb qvm Ges Ae vnz fv e a i ivlv gvbe m ú` bxwzi GKwU AZ ší i Z c~b welq G Î mvd_b e vsk memgq Zvi mgch v qi e vs Ki mv _ wgj i L D P ezb I Drmvn evbvm cö`v bi gva g Kg KZ v/kg Pvix `i K cöiyv hvmvq e vs Ki mkj Kg KZv GKwU my `i I mšnv` c~y Kg cwi e k DrmvnDÏxcbvi mv _ KvR K i Avm Q cö Z K Kg Pvix Zv `i wbr ^ gzvgz I m Rbkxj aviyvmg~n e vs Ki DaŸ Zb KZ c i mv _ Lvjv gjvfv e Av jvpbv Ki Z cv i Kg KZ v `i mvgwmök wbivcëv wbwðz Ki Z e vsk wewfbœ ai bi Kg Pvix Kj vy bxwzgvjvi AvIZvq MÖ vpzbwu, fwel Znwej, A fvmk Z QywU bm`vqb, BZ vw` myweav cö`vb K i _v K GQvovI e vs Ki gvbe m ú` wefvm k Ljv f ½i NUbvi m~ô mgvavbk í e vs Ki PvKzix wewagvjv Abymv i mwvk I mgqwpz c` c MÖnY K i _v K 36 Af šíixy wbqš b I cwicvjb e vs Ki Af šíixy wbqš b KvVv gv K Ggb fv e mvrv bv n q Q, hv Z e vs Ki SuywK cöz vwkz mxgv ev gvîvq i L Gi hvezxq bxwz, D Ïk I j AR b Kiv m e nq GQvovI GUv e e vckxq I Avw_ K Z_ m úwk Z e vck fzjåvwší A_ev Avw_ K wz I RvjRyqvPzwii wecix Z Ges cö`ë wewaweavb mg~ ni cwicvj bi wel q djcö` b vqm½z wbðqzv cö`vb K i AwaKš, e vsk Zvi mev mg~ ni g a B Uvi bu e vswks mev mshy³ K i Q hv _ K MÖvnKe ` N i A_ev Ab Kv bv myweavrbk vb n Z wkqz e vswks mev MÖnb Ki Z cvi e Gi d j MÖvnKe `i A_ I mg qi mvkªq n e MÖvn Ki wbku h_v m e `ª Z iwg UÝ mev cö`v bi j e vsk iwg UÝ GÛ Bb Kv qix g v br g U wm g bvgk GKwU cökí Pvjy K i Q hv cix vg~jk ch v q i q Q Ges AvMvgx 2011 mv ji g a hv MÖvnK ch v q Pvjy n e GB ermi Av ikwu D jl hvm cökí n Q evsjv `k A Uv g UW PK cö mwms wm g (BACPS) G AskMÖnb GB j e vsk B Zvg a evsjv `k A Uv g UW wk qvwis nvdr (BACH) Gi mv _ hy³ n q Q B Zvg a e vsk mviv ` k m vwbz MªvnK `i gv S Magnetic Ink Character Recognition (MICR) PK weziy K i Q ez gv b BACPS XvKv wfwëk kvlv mg~ n Pvjy n q Q Ges evsjv `k e vsk Gi mgqmxgv Abyhvqx 2011 mv ji gvp gv mi g a XvKvi evb i Aew Z Aewkó kvlv mg~ n GB mev Pvjy n e GB mevi g~j D Ïk n Q PK wk qvwis Gi mgqmxgv Kwg q Avbv e vs Ki cwipvjk cl ` Ges Gi wewfbœ KwgwU Zvrch c~y SzuwK mg~ ni wba vib, g~j vqb, Z`viwK Ges e e vcbv msµvší Pjgvb cöwµqvq mwµqfv e AskMÖnb K i _v K, hv e vs Ki e emvwqk j mg~n AR b BwZevPK f~wgkv iv L cwiewz Z e emvqxk cwiw wz K gvwb q Pjvi j e vs Ki me Î we` gvb Af šíixy wbqš b cöwµqv K mg q mg q ch v jvpbv I mg qvc hvmx Kiv nq Ges G cöwµqv Av jvp eq i mgmö mgq a i Ae vnz wqj Annual Report

60 cwipvjbv cl `i cöwz e`b e vs Ki cwipvjbv I e emv qi mv _ RwoZ SuywK mg~ ni cökgb Kivi j e vs Ki e e vcbv KZ c AZ ší mwµqfv e wb gœv³ Kvh µg m úbœ K i _v Kt m ve mkj SuywK wba viy I g~j vqb Kiv; D³ SuywKmg~ ni cökg bi j h_vh_ bxwz I cöwµqv mg~n cöyqb Kiv; GKwU Dchy³ Af šíixy wbqš b KŠkj cöyqy, ev Íevqb ev cwipvjb I Z`viwK Kiv; Ges cl ` KZ K Aby gvw`z bxwzmg~ ni ev Íevqb Kiv e vs Ki GKwU ^vaxb wefvm wn m e B Uvibvj K Uªvj GÛ Kgcv qý wwwfkb e vs Ki Avw_ K I cwipvjbmz wbqš bi ch vßzv I Kvh KvwiZv hvpvb I g~j vq bi j e vs Ki ˆ`bw `b cwipvjb Kvh µg I e emvwqk cöwµqvmg~ ni wbqwgz ch jvpbvi gva g Af šíixy KŠkj mg~ ni Z`viwK K i Ges e vs Ki Dci cöfvewe ÍviKvix SuywK I cwicvjbwepz wzmg~n i Z mnkv i Dc vcb K i cö hvr Î Zviv SuywKe e vcbv, wbqš b I mykvmb cöwµqvi Kvh KvwiZv cömv i mycvwik ck K i ewn:wbix KMYI e vs Ki Af šíixy wbqš b KŠkj mg~n ch v jvpbv K i Ges Zvi kw³kvjxki b cö qvrbxq mycvwik ck K i Zv `i mycvwik I civgk gvzv ek cö qvrbxq wbqš Y Kvh µg cöwzôv Kiv nq 37 cy I mevmg~n cö_g mvwii AMÖMY e vsk niqvi j mvd_bó e vsk wjwg UW MÖvnKgyLx mevbxwz MÖnY Ges Ki cv iu, Kgvwk qvj I wi UBj MÖvnK `i Pvwn`v wguv Z bvbvgylx mev Pvjy K i Q GB cwi cöw Z m ve meai bi fv³vi Kv Q cušqv Z e vsk cöwzwbqz Zvi kvlv e w K i P j Q GiB avivevwnkzvq 2010 mv j e vsk Zvi me jv SME mev cö`vb K `ª K Gm Gg B/K wl kvlvq cwiyz K i Q Ges bzzb cvupwu Gm Gg B/ K wl kvlv I AvaywbK mkj my hvmmyweav m cbœ cvupwu bzzb kvlv Pvjy K i Q GQvovI `ª Z, wbivc` I cöwz hvwmzvg~jk Li P jb `b m úbœ Kivi j e vsk Zvi cöhyw³mz AeKvVv gv AwaKZi kw³kvjx K i Q 38 ev RU Ges ev RU wbqš Y e vsk KZ c DaŸ g~lx cwikíbv AbymiY (bottom up planning approach) K i wewfbœ kvlvmg~n _ K ev R Ui LvZmg~ ni ( hgb AvgvbZ, AwMÖg, jvf, e emv BZ vw`) cöv_wgk cö Ívebv AvnŸvb K i cªavb Kvh vj qi e e vcbv KZ c kvlvmg~ ni DcvËmg~n mgš^q K i evrmwik ev R Ui Lmov Zix K i e emvwqk bxwz I e e vck m j b Av jvpbvi gva g ev RU ˆZix m úbœ K i e vs Ki cwipvjbv cl `i Aby gv` bi ci ev RU ev Íevq bi Rb kvlvmg~ n cöiy Kiv nq e vsk e e vcbv KZ c mviveqi ev R Ui wecix Z wewfbœ j gvîv AR bmg~n wek`fv e ch v jvpbv K i hv Z K i ev R Ui j mg~n AwR Z nq 39 Avq I e qi LvZIqvix we kly e vs Ki Avq I e qi Dci GKwU msw ß we kly wb gœ `qv n jv : my` _ K Avq 2010 mv j mvd_bó e vs Ki my` _ K Av qi cwigvb wqj 10, wgwjqb UvKv, hv 2009 mv j wqj 8, wgwjqb UvKv, cöe w i nvi 14.45% G cöe w i bc _ i q Q e vsk _ K `qv FY I AwMÖg my` cö`v bi Rb e q Av jvp eq i my `i Rb e q wqj 7, wgwjqb UvKv hv 2009 mv j wqj 7, wgwjqb UvKv, cöe w i nvi 0.33% bxu my` Avq e vs Ki bxu my` Avq 2010 mv j `vovq 2, wgwjqb UvKv hv MZ eqi wqj 1, wgwjqb UvKv wewb qvm n Z Avq MZ 2010 mv j mvd_bó e vs Ki wewb qvm _ K Av qi cwigvb wqj 3, wgwjqb UvKv hv 2009 mv j wqj 2, wgwjqb UvKv G Lv Z cöwz e`bkvjxb eq i Avq 44.83% A_ vr 1, wgwjqb UvKv e w cvq wewb qvm _ K Av qi Dcv`vb wqj UªRvix wej I e Ûi Dci my`, kqv ii jf vsk Ges g~jabx Avq Ab vb Avq Av jvp 2010 mv j, Kwgkb, wewbgq Ges `vjvwj _ K Avq n q Q 1, wgwjqb UvKv, hv MZ 2009 mv j wqj 1, wgwjqb UvKv gyjz: ewa Z e emv Ges wdwfwëk Kg KvÛ _ K G Avq G m Q cwipvjb e q 2009 mv j gvu cwipvjb e q wqj 1, wgwjqb UvKv hv kzkiv fvm e o 2010 mv j n q Q 1, wgwjqb UvKv 58 Annual Report 20 10

61 cwipvjbv cl `i cöwz e`b 40 m ú `i cvu dwji 31 k ww m ^i, 2010 Bs Zvwi L e vs Ki gvu m ú `i cwigvb wqj 131, wgwjqb UvKv e vs Ki gvu m ú `i wgkªy wqj wbgœiƒc : wgwjqb UvKvq bm` I bm ` mgzzj 10, wewb qvm 18, FY I AwMÖg 92, vqx m ú` 4, Ab vb m ú` 5, gvu m ú` 131, AvB.G.Gm Ges AvB.Gd.Avi.Gm. Gi Kvh KvwiZv cöm ½ B Uvib vkbvj GKvDw Us vûvw Ges B Uvib vkbvj dvbb vbwkqvj wi cvw Us wm g, BÝwUwUDU Ae PvU vw GKvD U U Um& Ae evsjv `k (AvBwmGwe), evsjv `k e vsk Ges Gm.B.wm KZ K M nxz n q Q Avgiv Avgv `i Avw_ K weeiyx cö Z Kivi Î Dc iv³ bxwzgvjv I c wz cwicvjb K iwq 42 RvZxq KvlvMv i AvqKi wnmv e Rgv 2009 mv j RvZxq KvlvMv i AvqKi wnmv e Rgv w` q Q 1, wgwjqb UvKv e vs Ki wemz cvup erm ii RvZxq KvlvMv i AvqKi wnmv e Rgvi cwigvb wbgœiƒc : eqi wgwjqb UvKvq , , , wemz cvup eq ii Kvh µg cöm~z Avq 2010 mv j Kvh µg cöm~z Avq wqj 8, wgwjqb UvKv hvi g a wqj bxu my` Avq, wewb qvm nb Z Avq, Kwgkb, G PÄ I `vjvjx Ges Ab vb Avq 2009 mv j Avq wqj 5, wgwjqb UvKv hv kzkiv 45 fvm e o Q e vs Ki wemz cvup erm ii Kvh µg cöm~z Avq wbgœiƒc: eqi wgwjqb UvKvq , , , , , wemz cvup erm ii gvu AwMÖ gi cwigvy e vs Ki AwMÖ gi cwigvb MZ eq ii 77, wgwjqb UvKv _ K kzkiv 19 fvm nv i e o Av jvp eq i 92, wgwjqb UvKvq DcbxZ nq e vs Ki wemz cvup erm ii gvu AwMÖ gi cwigvy wbgœiƒc: eqi wgwjqb UvKvq cöe w i nvi , % , % , % , % , % Annual Report

62 45 Kvh µg cªm~z gybvdv jv f wemz cvup eq i cöe w cwipvjbv cl `i cöwz e`b G eqi e vsk 6, wgwjqb UvKv Kvh µg cöm~z gybvdv AR b K i 2009 m b e vs Ki Kvh µg cöm~z gybvdv wqj 4, wgwjqb UvKv e vs Ki wemz cvup erm ii Kvh µg cöm~z gybvdvi cwigvb wbgœiƒc: eqi wgwjqb UvKvq cöe w i nvi , % , % , % , % , % 46 wemz cuvp eq i BKy BwUi Dci Av qi nvi e vs Ki BKz BwUi Dci Avq Av jvp eq i nq kzvsk hv MZ eqi wqj kzvsk e vs Ki wemz cvup eq i BKz BwUi Dci Av qi nvi wbgœiƒc : 47 AvqK ii Rb ms vb e vsk Av jvp eq i AvqK ii Rb ms vb wnmv e i L Q 2, wgwjqb UvKv hv 2009 mv j wqj 1, wgwjqb UvKv 48 ms vb I Ki c~e ez x gybvdv G eqi e vsk weziyk Z A kªyxk Z F Yi Dci ms vbmn KzFY Ges m `nrbk FY, w wzcî ewn fyz `dvmgyn, AvqKi, BZ vw`i Dci cö qvrbxq ms vb msi Yi c~ e 6, wgwjqb UvKv gybvdv AR b K i 2009 m b e vs Ki Ki c~e ez x gybvdv wqj 4, wgwjqb UvKv Ges e vs Ki gybvdvq cöe w i nvi 46% ervq wqj 49 ms vb I Ki ciez x gybvdv eqi wiuv b Ab BKz BwU (%) % % % % % G eqi e vsk weziyk Z A kªbxk Z F Yi Dci ms vbmn KzFY Ges m `nrbk FY, w wzcî ewnf~ Z `dvmgyn, AvqKi, BZ vw`i Dci cö qvrbxq ms vb msi Yi ci 2, wgwjqb UvKv gybvdv AR b K i 2009 m b e vs Ki Ki I Ab vb ms vb ciez x gybvdv wqj 1, wgwjqb UvKv Ges e vs Ki gybvdvq cöe w i nvi 48% ervq wqj 50 bxu gybvdv jv f wemz cvup eq i cöe w G eqi e vsk 2, wgwjqb UvKv Kvh µg bxu gybvdv AR b K i 2009 m b e vs Ki Kvh µg bxu gybvdv wqj 1, wgwjqb UvKv Ges bxu gybvdv cöe w i nvi 48% e vs Ki wemz cvup erm ii bxu gybvdvi cwigvb wbgœiƒc: eqi wgwjqb UvKvq cöe w i nvi , % , % (27.41%) , % % 60 Annual Report 20 10

63 cwipvjbv cl `i cöwz e`b 51 Kvh µg cöm~z djvdj G eqi e vsk weziyk Z A kªbxk Z F Yi Dci ms vbmn KzFY Ges m `nrbk FY, w wzcî ewnf~ Z `dvmgyn, AvqKi. BZ vw`i Dci cö qvrbxq ms vb msi Yi c~ e 6, wgwjqb UvKv cwipvjb cöm~z gybvdv Avq K i 2009 mv j e vs Ki cwipvjb cöm~z gybvdvi cwigvb wqj 4, wgwjqb UvKv Ges e vs Ki gybvdvi cöe w i nvi 46% ervq wqj e vsk wemz eq ii Zzjbvq AvgvbZ, AwMÖg, Avg`vbx, ißvbx, M vivw U Ges e `wkk iwgu vý G h_vµ g 11%, 19%, 49%, 24%, 91% Ges 18% cöe w AR b K i 52 msiw Z Znwej e vsk Kv úvbx G v± 1991 Gi 24 aviv Abyhvqx wewfbœ ms vb ivlvi c i Ges AvqKi cö`vb I jf vsk NvlYvi c~ e gybvdvi 20% A_v r wgwjqb UvKv msiw Z Znwe j vbvšíi Kiv n q Q D jl, 31 k ww m ^i, 2009 Zvwi L gvu msiw Z Znwe ji cwigvb `uvwo q Q 3, wgwjqb UvKvq 53 MÖvnK mev MÖvnK `i cö qvrbb Avgv `i cöavb AMÖvwaKvi Ges Avgv `i mkj cö Póv wbwnz i q Q mivmwi Zv `i mkj mgm v mgvav bi R b Avgv `i g~j KŠkj n Q MÖvnK `i mv _ `xn w` bi m úk M o Zvjv hvi gva g weivgnxb mg w Ges Kv úvbxi fveg~wz evov bv hvq m e vrk ó cöhyw³i wbiwew Qbœ e env ii gva g m e v P MÖvnK mev cö`vb Ges ` Zv, m wókxjzv I AvšÍwiKZvi gva g MÖvnK `i mgm v guv bvb Avgv `i g~j j Avgiv mkj kªyxi MÖvnK `i K AvaywbK DbœZ I µzwugy³ e vswks mev `~ªZZvi mv _ cuš Q w` Z A½xKvive Ges e emvwqk `~i` wó I MÖvnK `i wbz bzzb mgm v mgvav bi Rb Avgiv e emvwqk mgv R e vck cöksmv AR b K iwq GK K_vq MÖvnKMY e vs Ki AMÖvwaKvi Ges Kv úvbx `k b n Q MÖvnK `i mš ó Kiv hviv e vs Ki fveg~wz e w Z `~Z wn m e KvR K i cwiewz Z wek vq bi cwi cöw Z mvd_b e vsk wekwkz wecyb Kg Kv Ûi gva g bzzb P v jä gvkv ejv I cöwz hvwmzvq wu K _vkvi R b mnvqk cövwzôvwbk KvVv gv MVb K i Q e emv evüe e vsk wn m e fveg~wz e w i j mvd_b e vsk MÖvnK Kw `ªK welq we epbvq i L gv K wus wefv Mi AM v bvmövg cyb MVb K i Q µgea gvb wecyb Kg KvÛ I DbœZ MÖvnK mev, mvgvwrk `vqe Zv, B f U g v br g U, cy bevqb Ges cy cwrkwbs I wicwrkwbs BZ vw`i gva g eª v Ûi fveg~wz e w Ki Z m Pó i q Q mvd_b e vsk cy wewµ K ibv eis cy wecyb K i hv Z e vswks e emvi Î MÖvnKM Yi mš wó Ges gybvdv m ev P nq g~j evb MÖvnK `i Pvwn`v c~i b Avgiv Avgv `i cy I mevi gv b bzzbz wb q G mwq GUv `xn vqx MÖvnK m úk vc bi mv _ mv _ MÖvnK `i c~b v½ mgm v mgvav bi wbðqzv w` Q Ges Ae k l e vsk Zvi wb Ri I MÖvn Ki Rb jvfrbk Ae v m wó Z AMÖMvgx i q Q hv e vs Ki g~j eva K Av iv wekwkz K i Q Avgiv MÖvnK `i wbz bzzb Pvwn`v we epbv K i wewfbœ c Y i m ú` I `vq cy mg~n, LyPiv cy mg~n, B Uvi bu e vswks, Gm.Gg.Gm. e vswks, AbjvBb Ges mkj kvlv e vswks, g~jab evrvi mev, GmGgB Ges K wl A_ vqb BZ vw`i mgvnvi NwU qwq hv Z Avgv `i MÖvnK `i mkj cökvi wbz ˆbwgwËK Pvwn`v c~iy nq Avgiv Me eva Kwi h mgv Ri mkj Í ii K c v iu, z`ª I gvsvwi D ` v³v, LyPiv MÖvnKM Yi mš wó AR b Ki Z c iwq Avgiv bvix, cyiyl, AwfÁ e emvqx, `kxwe `kx, mikvix Kg Pvix I D ` v³v, cö KŠkjx BZ vw` mkj kªbxi MÖvnK `i mkj Pvwn`v c~iy K i AvmwQ Avgiv cöwzwbqzb Avgv `i K c v iu MÖvnK `i K we Í Z cwim i e vswks mev `qvi Póv KiwQ Ges Zv `i ˆbwgwËK e emvwqk cö qvrbxqzvi g a K c v iu µwwu cy, UªRvix cy, ˆe `wkk evwy R A_ vqb, wewfbœ cökí I wmwû KU FY BZ vw` welq jvi Avw_ K mgvav bi wbðqzv cö`vb KiwQ myweav ewâz `i Rb wdbvbwkqvj BbK zkb, MÖxb e vswks BZ vw`i gva g ` ki Av_ mvgvwrk Dbœqb NUv Z Avgiv cöwzkª~wze Avgiv ` pfv e wek vm Kwi h, Avgv `i Ae vnzfv e m šívlrbk gybvdv AR b, cöe w, evrv ii Askx`vwiZ BZ vw` GKvšÍfv eb Avgv `i mevi YMZ gv bi Dci wbf ikxj 54 M elyv I Dbœqb Ges cöwk Y mvd_b e vsk Zvi 76 wu kvlvi mvnv h e emv I gybvdvq D jl hvm cöe w AR bi gva g AZ ší mdjzvi mwnz 16 eqi AwZµg K i Q mvd_b e vsk cöwz hvwmzvg~jk e vswks RM Z ckv`vix ` Zv AR bi Rb M elyv Dbœqb Ges cöwk Y Gi Dci mev wak i Z w` q _v K ` Zv I ckv`vix Z i mgš^ q gvbm Z gvbe m ú` ˆZixB e vs Ki g~j j, hv Z K i Kg x Drcv`bkxjZv e w K i MÖvnK mev I e vswks Kvh µ g m ev Ëg DrKl Zv wbwðz Kiv hvq gvbe m ú` Dbœq bi KŠkjMZ, gvbexq Ges ZË MZ ` Zv e w i j ev Íevq bi Rb 2005 mv j e vs Ki cöavb Kvhv j qi 5g Zjvq wbr ^ cöwk Y K `ª vcb Kiv n q Q Uªwbs Bbw wudu Kgx `i ÁvbwfwËK gy³ wpšívi Av`vb cö`vb I Áv bi AvaywbKvq bi gva g e vswks RM Zi RwUj Kvh µ gi wel q mwvk w`kwb ` kbv `q mkj cökvi cöwk Y cöbq Yi g~j j n Q Kg xe `i ez gvb I cö qvrbxq Kv Ri ` Zvi g a cv_ K Kwg q Avbv Uªwbs Bbw wudu GK K_vq gvbe m ú` K wbz bzzb e vswks ZË I fveavivi mwnz cwiwpz K i Zv `i c~y Kg m vebv I mvg_ K wekwkz Ki Z Ae`vb ivl Q Gi dj ^i c MÖvnK `i mgm vi `ª Z I ` mgvavb `qvi g Zv ` gvbe m ú` ˆZwi n Q Ges kvlv cöwz m ev P gybvdv AR b wbwðz Ki Q hv Kgx `i m e v P Kg gzvi cögvy `q Annual Report

64 cwipvjbv cl `i cöwz e`b mvd_b e vsk Uªwbs BbwówUDU KZ K 2010 mv j Av qvwrz me gvu 42wU cöwk Y Kvm, mwgbvi I Kg kvjv AbywôZ nq, G Z cöwk YcÖvß Kg xi msl v wqj 1923 Rb 2010 mv j Af šíixy cöwk Yi Kvm jv n jv : Af šíixy cöwk Y Kvm / mwgbvi/ Kg kvjv Kv m i msl v cöwk Yv_x i msl v 1 dvd Ûkb cöwk Y Kvm d ib GKvª PÄ wi g v br g U d ib iwg UÝ d ib UªW Acv ikb d ib GKvª PÄ wi cvwu s mybdu& Acv ikb µwwu wi g v br g U/ µwwu g v br g U GmGgB GÛ GwMª dvbbvý µwwu Bb&di gkb ey iv (wmavbwe) µwwu KvW GwUGg/ WweW KvW Acv ikb e v mjuz GÛ BU&m Bgwc gb Ukb Gw U gvwb jûvwis AvBwmwU GÛ e vsk Avwëgvm Kvi e vswks wm g A Uv gkb Bb wkqvwis BmjvwgK e vswks gv K wus Ae e vswks cövwv±m& GÛ K v q Uj mvwf m A viqvi bm Ab K vk g v br g U GÛ K v q Uj mvwf m A Uv gkb Bb e vswks wµ qwus Gbvwes GbfvBib g U di Be vswks GÛ GgKgv m e vsk msµvší Ab vb Kg kvjv me gvu Af šíixy cöwk Y 42 1,923 Af šíixy cöwk Y QvovI, e vsk 2010 mv j 198 Rb Kg KZv K ` k I we ` k wewfbœ cöwk Y Kv m cöiy K i 2010 mv j e vs Ki evb i AbywôZ cöwk Yi weeiy wb gœ `qv n jv: Af šíixy cöwk Y Kvm / mwgbvi/ Kg kvjv Kv m i msl v cöwk Yv_x i msl v 1 weavbwegg KZ K Av qvwrz wewfbœ e vswks m úwk Z cªwk Y/Kg kvjv ( hgb FY, mvaviy e vswks, SuzwK e e vcbv, m ú``vq e ve vcbv, GmGgB A_v qb, AvšÍRv wzk evwyr, e `wkk evwyr BZ vw`) 2 dvd Ûkb Uªwbs weavbwegg e ZxZ ` ki Ab vb Uªwbs Bbw wudu( hgb evsjv `k e vsk cöwk Y GKv Wgx, ev d`v, GmBwm), e v mjuz, Bmjvgx e vswks, GGgGj, mybdu, Kvi, wi g v br g U, wmavb we BZ vw` 4 we ` k cöwk Y Kvm / mwgbvi/kg kvjv me gvu evwn ii cöwk Y SzuwK e e vcbv e vs Ki wewfbœ ai bi SuywK wba viy, cwigvckiy I SuywK gvkv ejvq wewfbœ mzk xkiy e e v MÖnY Kivi Rb mvd_b e vsk SuywK e e vcbv BDwbU (RMU) MVb K i Q SuywK gvkv ejvi c~e kz n Q SuywK e e vcbv KvVv gv MVb ewkifvm ÎB `Lv hvq SuywK e e vcbv KvVv gvi Abycw wz A_ev Am ú~y SuywK KvVv gvb SuywK gvkv ejvq e _ Zvi Ab Zg KviY wewfbœ ai bi SuywKi we kly, kªyxkiy I SuywK MÖn Yi gzv wbiƒcykiy SuywK e e vcbv KvVv gv MV bi c~e kz e vs Ki wewfbœ ai bi SuywK wpwýzkiy, cwigvckiy, ch e Y Ges wbqš Y e e v vcb Kiv SuywK e e vcbvi AšÍM Z 62 Annual Report 20 10

65 cwipvjbv cl `i cöwz e`b vbxq I AvšÍR vwzk evrv i mvd_b e vs Ki wewfbœ ai bi cwipvjbvrwbz SuywK ch e Y I g~j vqb Kiv SuywK e e vcbv BDwb Ui `vwqz GQvovI e vs Ki SuywK e e vcbv cöwµqv D PZi Í i DbœxZ Kiv, e v mj 2 ev Íevqb Kiv Ges AvšÍR vwzk gv bi SuywK e e vcbv iƒc ilv Zix Kiv, SuywK e e vcbv BDwb Ui (RMU) Ab Zg `vwqz SuywK e e vcbv KvVv gvi wfwë wewfbœ Dcv`v bi mgš^ q MwVZ wkš Gi g a h `ywu Dcv`vb e vs Ki Rb me mgq i Z c~y m jv nj cöhyw³ I Rbej mrb mvd_b e vsk SuywK e e vcbv Dbœq bi j Z_ cöhyw³ AvaywbKvqb I gvbem ú` Dbœq bi Dci Rvi w` q Q e vsk SuywK e e vcbv K GKwU MwZkxj cöwµqv g b K i, hv e vs Ki cöwzwu cöwµqvi mv _ m úk hy³ SuywK e e vcbv GKwU ixwz Z cwibz n e hlb e vs Ki mkj Kg KZ v I wbe vnxiv Lye mnrfv e SuywK wpwýz Ki Z cvi eb Ges wewfbœ wm vší wkfv e Gi Dci cöfve we Ívi K i Zv wba viy Ki Z cvi eb e vs Ki SzuwK e e vcbvi Dci GKwU wek` cöwz e`b 74 c ôvq mwbœ ewkz n jv 56 gv P U e vswks Acv ikb gv P U e vswks DBs Zvi cöwzôvjmœ 2009 Gi 1jv AvMó _ K mdjzvi mv _ Kvh µg cwipvjbv K i Avm Q 2010 mv j Avgiv ek wkqz ikw f½kvix cwiw wzi m ylxb n qwq Ges ek fv jvfv eb Zv gvkv ejv K iwq Zvi g a XvKv ók G P Âi mvaviy m~pk Z cux Q Ges m e v P 3249 KvwU UvKvi jb `b D jl hvm GB mg qi Aw wzkxj evrvi wbqš bi Rb wmwkdwiwur GÛ G P Kwgkb ek wkqz D jl hvm c` c MÖnY K iwqj GB ai bi Aw wzkxj Ae vi g a I Avgiv wemz eqi wj _ K D jl hvm gybvdv AR b Ki Z m g n qwq 2010 mvj _ K gv P U e vswks DBs Zvi wewb qvmkvix `i Rb cvu dwji g v br g U Ges AvÛvi ivbwus mev cö`vb K i Avm Q ZviB djkö wz Z wewb qvmkvixi msl v 910 Ges cvu dwji Gi cwigvb 511 KvwU Z cuš Q Q ez gv b ˆ`wbK Mo jb ` bi cwigvb cövq 27 KvwU UvKv 2009 mv ji 14B A ±vei evsjv `k e vs Ki mvkz jvi Abyhvqx Kvb e vsk Avjv`v mvewmwwqvix Kv úvbx Qvov Kvb gv P U e vswks Kvh µg cwipvjbv Ki Z cvi ebv GB mvkz jvi gvzv ek e vs Ki cwipvjbv cl ` mvd_b e vsk gv P U e vswks DBs K ÓmvD_B e vsk K vwcuvj mvwf mm wjwg UW (SBCSL)" bv g Avjv`v GKwU mvewmwwqvix Kv úvbx cöwzôv Kivi wm vší wb q Q hvnvi 2010 mv ji 1jv ww m ^i nb Z Aby gvw`z g~jab 300 UvKv Ges cwi kvwaz g~jab 100 KvwU UvKv 1jv Rvbyqvix 2010 _ K 30 b f ^i 2010, GB 11 gv m gv P U e vswks DBs KvwU UvKv gybvdv K i Q 2010 mv j cyuwrevrv i mvd_b e vsk K vwcuvj mvwf mm wjwg UW Zvi wbr ^ 54 KvwU UvKvi wewb qvm Kvl w` q e vs Ki Ae vb K Av iv my` p K i Q AvaywbK wewb qvmbxwzi mv _ mvgäm i L Avgiv Avgv `i cyuwrevrv ii wewb qvm KŠk j cwiez b G bwq hv Z SzuwKi cwigvb Kg Ges GKwU wew Qbœ wewb qvm Kvl ˆZix Z mnvqk nq MÖvnK `i Rb wewfbœ cövmw½k i Z c~y mev cö`v bi j SBCSL A bk v b Zvi Kvh µg cux Q w` Z Pvq GiB avivevwnkzvq SBCSL Lye kxnöb gvnv `cyi, mvzgmwr` ivw, Kvgvj AvZvZ~K GwfwbD, w`jkzkv Ges ` ki wewfbœ cöv ší bz~b kvlv Lyj Z hv Q GB mg Í kvlvi gva g cyuwrevrv i e vs Ki GKwU my` p buiqvk ˆZix n e Ges e vs Ki g~bvdv DË ivëi e w cv e GQvov SBCSL w`jkzkvi BDbyP m Uv ii j ej9 jxr wb q Q Bnvi e emvwqk cöavb Kvh vjq I Kvh µg mypvi i c cwipvjbvi Rb 57 Bmjvgx e vswks mvd_b e vsk wjwg UW e w³ gvwjkvbvaxb e vskmg~ ni g a bz vbxq e vsk G e vsk mbvzb e vswks mevi mv _ mv _ c _Kfv e Bmjvgx e vswks mevi evsjv `k e vs Ki wb ` kvejx I BmjvwgK kixqvn& g~jbxwzi wfwë Z cö`vb Ki Q BmjvwgK e vswks kvlv jvi Kvh µg m úyb iƒ c mbvzb e vswks Kvh µg _ K wfbœ e vsk BmjvwgK e vswks wnmvemg~n m ú~y Avjv`vfv e msi b K i _v K e vsk 2003 mvj n Z BmjvwgK e vswks mev cö`vb Ki Q e vsk Gi gvu 76 wu kvlvi g a 5 wu BmjvwgK e vswks kvlvi gva g MÖvnK mev cö`vb Ki Q BmjvwgK e vswks Kvh µg cwipvjbvi Rb e vs K ` ki kxl vbxq BmjvwgK wpšívwe` Ges BmjvwgK e vskvi wb q GKwU kixqvn& mycvifvbrvwi KwgwU i q Q D³ kixqvn& mycvbfvbrvwi KwgwU BmjvwgK e vswks Kvh µg mwvkfv e cwipvjbvi Rb bxwzgvjv cöyqb I w`k&wb ` kbv w` q _v K wbgœewy Z kxl vbxq BmjvwgK wpšívwe` `i wb q kixqvn& evw MwVZ: 1 cö dmi gvijvbv gv: mvjvndwïb Pqvig vb, kixqvn mycvifvbrvwi KwgwU, LwZe, evqzzj gvkviig RvZxq gmwr`, XvKv Annual Report

66 2. G.Gm.Gg. dli j Avnmvb m`m, kixqvn mycvifvbrvwi KwgwU, cöv³b WcywU Mfb i, evsjv `k e vsk 3. gvijvbv Avãyj nvwkg AvRv`x m`m, kixqvn mycvifvbrvwi KwgwU, wgwwqv e w³z Ges LwZe, B vub Mv W b Rv g gmwr`, XvKv D³ kixqvn mycvifvbrvwi KwgwUi ZË veav b e vsk mkj cökvi ww cvwru, wewb qvm xgmg~n Ges bxwzgvjv cöyqb I w`kwb ` kbv w` q _v K e vsk K `ªxq kixqvn& evw Ges BmjvwgK e vskmg~ ni Kbmvj UwUf dviv gi m`m e vsk `kwe ` ki Ab vb BmjvwgK e skmg~ ni mv _ mym úk envj i L KvR K i _v K ww m ^i 31, 2010 Bs Zvwi L mgvß wnmve Abymv i BmjvwgK e vswks kvlvmg~ ni mâq I wewb qv Mi cwigvy wqj h_vµ g KvwU Ges KvwU Ges 2009 mv ji Zzjbvq cöe w i nvi h_vµ g 3.60% Ges 29.71% Av jvp eq i e vs Ki Bmjvwg e vswks kvlv jvi gvu Avg`vwb I ißvbx e emvi cwigvy wqj h_vµ g KvwU Ges KvwU UvKv hv c~e ez x eq ii Zzjbvq D jl hvm nv i e w c q Q 2010 mv j Bmjvwg e vswks kvlvmg~ ni gvu Ljvwc F Yi cwigvy wqj 0.433% ww m ^i 31, 2010Bs Zvwi L BmjvwgK e vswks kvlvmg~ ni DØ ËcÎ I Avq e qi wnmve G cöwz e` b mwbœ ewkz nj 58 µwwu KvW MÖvnK `i D Z Pvwn`v c~i bi j ` ki Ab Zg µwwu KvW mev cö`vbkvix wnmv e mvd_bó e vsk 2005 mv j hvîv ïi K i mmgq, wuk qk e vsk Zv `i Lye ^í msl K m ve MªvnK K GB mev cö`vb K i AvmwQj ch vqµ g MªvnKiv µwwu KvW e env ii mydj c Z ïi K i Ges Gi m ve Zvi Î AviI e w cvq d j Ab vb Av iv A bk e vsk µwwu KvW e emvq AeZxb nq KwVb cöwz hvwmzvi g a I wemz 05(cuvP) eq i Avgiv Avgv `i MªvnK msl v Ges cwipvjb Avq Gi Î avivevwnk DbœwZ AR b K iwq djkö wz Z, 2010 Gi k l Avgv `i MªvnK msl v n q Q 19,172; hv c~e ez x eq ii Zzjbvq 44% ekx Ges cwipvjb Avq c~e ez x GKB mg qi Zzjbvq 20% e w c q 106 wgwjqb UvKvq DbœxZ n q Q UKmB wfwë MV bi j Avgiv avivevwnk cöe w ervq ivl Z m g n qwq µwwu KvW MªvnK `i m Ÿv P myweav wbwðz Kivi j Avgiv Avgv `i cö Póv Pvwj q hvw Q GB Pjgvb cö Póvi Ask wnmv e Avgv `i KvW mevq Avgiv mshy³ K iwq H me e envwik Dc hvwmzv hv AvaywbK mgv R KbvKvUvq A_ cwi kv a Ges cö qvr b bm` D Ëvj b Acwinvh BwZg a B Avgiv e vs Ki h Kvb kvlv n Z A_ D Ëvjb, KvW PK I SMS Push Pull myweav wbwðz K iwq Travel Card Avgv `i Aci GKwU AvšÍR vwzk Prepaid Card. GK w` K hgb Kv W i mev ZvwjKvi mkj Î mkj cökvi myweavmg~n wbwðz Kiv n q Q, Ab w` K cöhyw³mz AvaywbKZv I MªvnK mevi ÎI i Z c~y f wgkvmg~n D cw Z nqwb me vaywbk cöhyw³mz myweavmg~n e env ii gva g Avgv `i wb ew`z MªvnK mev `j `ª Z I wek ÍZvi mv _ mev cö`vb K i hv Q m vwbz Accountholder `i 24 NÈv bm` UvKv D Ëvj bi myweav cö`v bi j G eqi n Z Avgiv Own Processing System G MªvnKMb K Proprietary Debit Card "My Card" myweav cö`vb ïi K iwq BwZg a 2010 mv j Avgiv wbr ^ ATM vcb ïi K iwq Ges AvMvgx ermimy jv Z mviv `k e vwc wbr ^ ATM myweav we Í Z Kivi j wekvj cwikíbv Mªnb Kiv n q Q Avgiv DBBL Ges BRAC e vs Ki Network mevi mv _ hy³ n qwq hvi djkö wz Z Avgv `i m vwbz MªvnKMY mviv ` k nvrv ii ekx ATM ey_ _ K mivmwi bm` UvKv D Ëvj bi myweav fvm Ki Qb h nzz µwwu Kv W i MªvnKmsL v cöwzwbqz e w cv Q ZvB kªyx f `i cö qvrb Abyhvqx Avgiv wewfbœ mev cö`vb Kivi K_v we epbv KiwQ ` ki me P q m vwbz bvmwik `i D PZi mev cª`vb Kivi j VISA cvwubvg KvW cöez b Kiv Avgv `i AvMvgx eq ii cwikíbv AvaywbK mg qi Z_ cöhyw³ wfwëk Avw_ K jb ` bi Î SEBL KvW wwwfkb Zvi Awfbe cwikíbv Ges wb ew`z mev cö`vb Ki Q hv e vs Ki mvwe K fveg~wz Dbœq b i Z c~y f wgkv ivl Q 59 kvlv m cömviy Kg m~px cwipvjbv cl `i cöwz e`b mvd_b e vsk wjwg UW ez gv b ` ki wewfbœ iyz c~y GjvKv Ges e emv K `ª mg~ n Aew Z 76 wu kvlvi gva g Zv `i e vswks Kvh µg cwipvjbv Ki Q ` ki mkj Í ii MÖvnK `i wbku DbœZZi I `ª Z mev cö`vb Kivi j mvd_b e vs Ki 46wU kni Kw `ªK kvlv, 15wU cjxkvlv Ges 10 wu GmGgB/K wl kvlv i q Q GQvovI e vs Ki 5wU kvlv Bmjvgx kixqvn& gvzv ek Kvh µg cwipvjbv Ki Q XvKv I PÆMÖv g Aew Z ` ki ißvbx cöwµqvkiy GjvKvq e vs Ki 2wU Ad& kvi e vswks BDwbU& i q Q MÖvnK `i bzzb bzzb Pvwn`v guv Z Ges MÖvnK mevi cwiwa we wzk í e vsk 2011 mv j 10wU kvlv I 10wU GmGgB/K wl kvlvmn gvu 20wU kvlv evsjv `k e vs Ki AbygwZ mv c Lvjvi cwikíbv MÖnY K i Q ` ki cjx Kw `ªK µgewa òy e emv K `ª mg~ n kvlv Lvjvi gva g e vsk ` ki fvimvg c~y A_ bwzk AMÖMwZ AR b m g n e 64 Annual Report 20 10

67 cwipvjbv cl `i cöwz e`b 60 e vs Ki µwwu iwus µwwu iwus weeiy `xn gqv`x ^í gqv`x gšíe µwwu iwus kªyxgvb GG Gm wu2 Bbdi gkb Wej G gvbbvm D P MÖW GÛ mvwf mm (D P wbivcëv) wjwg UW cöwz e`b cö`v bi ZvwiL: 27 k GwcÖj, 2010 Bs 61 e v mj2 Gi ev Íevqb I cö wz G kªyxfy³ e vsk jvi FYmg~n AwaKZi wbivc` Ges D P gvbm úbœ G Í ii iwus wbwðz K i h, K cv iu cöwzôvbwu Z eo Kvb mgm v Qvov fvj FY e e vcbv we` gvb SuzwK Dcv`vb jv bgbxq Ges A_ bwzk Ae vi mv _ mgq mgq Aí gvîvq cwiez b nq G kªyxfy³ e vsk jv Zv `i Avw_ K cöwzkö wz c~i Yi mvg _ i Î D P wbðqzvi wb ` kk kw³kvjx Zvij Ges fvj gšwjk cöwz ivak Dcv`vb we` gvb SzwK Dcv`vb ^í 31 ww m ^i 2009 Zvwi Li wbixw Z Avw_ K weeiyxi wfwë Z `xn gqv ` G iwus GwcÖj 26, 2011 ch ší ejer _vk e e v mj KwgwU Ae e vswks mycviwfkb KZ K cöewz Z g~jab ch vßzvi bxwzb e v mj2 bv g cwiwpz GB bxwzgvjvi Aax b evsjv `k e vs Ki wb ` kbvq mvd_b e vsk wjwg UW 1jv Rvbyqvix 2009 _ K b~ bzg g~jab ch vßzvi cöwz e`b `vwlj K i Avm Q Ges Gi Ab vb w`kmg~n ch vqµ g ev Íevq bi D ` vm MÖnb K i Q GB bzzb g~jab KvVv gvi D Ïk n Q e vs Ki SzuwK e e vcbvi Dci i Z Av ivc Kiv, hv wzbwu Í i Dci cöwzwôz, Í wzbwu nj : 1) b~ bzg g~jab ch vßzv 2) Z`viwK ch v jvpbv 3) evrvi k sljv e v mj2 FY SzuwK e e vcbvq hy Mvc hvmx KŠkj cöez b K i Q Ges cwipvjb SzuwKi Dci we klfv e Av jvkcvz K i Q e v mj2 Gi Acwinvh ˆewkó jv n Q: K) b~ bzg g~jab ch vßzv wby q FY SzuwKi Î wzbwu c& wz i q Q L) FY SzuwK e e vcbvq Af šíixy iwus c wz cö qv Mi gva g e vsk jvi g~jab msi Y wbr ^ wepvi we kly cö qv M wkqzuv ^vaxbzv cö`vb Kiv n q Q M) evrvi k OLjv Avbq b cö qvrbxq Z_ cökv ki Dci i Z Av ivc Kiv n q Q hv e vs Ki m ½ wewfbœ Mvôxi ^v_ i v Ki e b~ bzg g~jab wby qi Rb Avgiv FY, evrvi I cwipvjb SzuwKi Î gšwjk m~pk c wz cö qvm K iwq K `ªxq e vs Ki wb ` kbv cöwzcvj bi D Ï k b~ bzg g~jab ervq ivlvi Rb mvd_b e vsk wcöwgqvgmn 2:1 Abycv Z 3.69 wewjqb UvKvi ivbu kqvi Bmy i gva g cwi kvwaz g~jab K 6.93 wewjqb UvKvq DbœxZ K i Q hv Zvi g~jab wfwë K kw³kvjx K i Q e vsk e v mj2 Gi g~jab ch vßzvi bxwzgvjv Abyhvqx Uvqvi2 g~jab e w Kivi D Ï k 2.00 wewjqb UvKvi mveaiww b UW eû Bmy Kivi D ` vm MÖnb K i Q e vsk, e v mj2 Gi bxwzgvjv Abyhvqx Aby gvw`z G Uvibvj µwwu iwus G RwÝi mvnv h Ki cv iu / eo FY MÖnxZv `i µwwu iwus qi gva g SzuwKhy³ m ú` e e vcbvi Rb c` c MÖnb K i Q hv Kvh Kix I ` g~jab e e vcbvq mnvqk f~wgkv cvjb Ki e e mj2 bxwzgvjv Abyhvqx Í 2 Gi ev ÍevqbB n e mepvb Z i Z c~y Ges cöv qvwmkzvi Î wkqzuv ev Íem Z, Kbbv h mg Í SzuwK Í 1 Gi AvIZvq we epbv Kiv nqwb, m jv cwigvc Kivi D Ï k GKwU mgwš^z SzuwK e e vcbv KvVv gv M o Zzj Z n e e vsk B Zvg a cwipvjbv cwil` KZ K Aby gvw`z D Pc` Kg KZ v `i mgš^ q GKwU Z`viwK ch v jvpbv `j MVb K i Q hv e emv qi mkj SzuwK cökg bi j ch vß g~jab (B KvbwgK K vwcuvj) msi Yi wel q evsjv `k e vs Ki Z`viwK ch v jvpbv g~j vqb ` ji ms M Av jvpbvq AskMÖnb Ki e e vs Ki Rb GKwU Af šíixy g~jab chv ßZvi cwigvc c wz MVb cöwµqvaxb i q Q hv e vs Ki SzuwK iƒc ilv Ges wbqš b Ave ni m ½ mvgäm i L g~ja bi j gvîv AR b mnvqk f~wgkv cvjb Ki e ms e`bkxjzv we kl bi Rb e vs K GKwU kw³kvjx Stress Testing KvVv gv MVb Kiv n q Q hv e vs Ki cöwzk~j A_ bwzk Ae v gvkv ejv Kivi mvg_ K wby q Ki e evsjv `k e vs Ki wb ` kbv Abyhvqx SzuwK wbiƒc b AvaywbKZi c wz Aej ^ bi Rb e vsk wb R K cö ÍzZ Ki Q Annual Report

68 62 Kv úvbx mykvmb `vwqz kxj e e vcbv I my` p Z`viKx e e vi gva g cökvmwbk mykvmb AviI Rvi`vi Kiv e vs Ki g~jbxwz jvi Ab Zg e vsk e e vcbvq ^ QZv Ges `vqe Zv e w i wbwg Ë cö qvrbxq c` c MÖnY Kiv n q Q j AR b e vsk mkj Í i cökvmwbk mykvmb wbwðz Kiv K m ev P AMÖvwaKvi w` q _v K 2006 mv ji 20 k deª qvix Zvwi L wmwkdwiwur GÛ GKvª PÄ Kwgkb KZ K RvwiK Z cöávcb bs GBwm/wmGgAviAviwmwW/ /GWwgb/0208 G cöyxz weavbvejx ev Íevq b e vsk cö qvrbxq e e v MÖnY Ki Q Avgv `i Kv úvbx mykvm bi GKwU iƒc ilv 67 c ôvq mwbœ ewkz nj 63 wewae wbix K wb qvm e vs Ki 15Zg evwl K mvaviy mfvq gmvm ingvb ingvb nk K ciez x mvaviy mfv bv niqv ch ší mg qi Rb ewn:wbix K wn m e wb qvm `qv nq cö_g gqv` mgvß niqv m Ë I cöwzôvbwu ewn:wbix K wn m e 16Zg evwl K mvaviy mfvq kqvi nvìvimy Øviv c~y:wb qvm hvm 64 jf vsk e vsk me `v m vwbz kqvi nvìvi `i mv _ AwR Z mvdj fvmvfvwm Kivi Dci i Z Av ivc K i Z`vbymv i 2010 mv ji Rb cwipvjbv cl ` 10% bm` jf vsk Ges 20% g~jabx jf vsk ( evbvm kqvi) wezi Yi mycvwik K i Q GwU e vs Ki fvj jf vsk Nvlbv bxwzib ewn:cökvk e vs Ki g~jab e w i gva g kqvi nvìvi `i m ú` e w B n Q e vs Ki gyj D Ïk 65 cwipvjk wbe vpb e vs Ki AvwU Kjm& Ae G mvwm qkbgi 105 (i) AvwU Kj Abymv i, cwipvjkm Yi GKZ Zxqvsk A_ev hw` Zv `i msl v wzb ev wz bi wyzk bv nq m Î GKZ Zxqvs ki KvQvKvwQ msl K cwipvjk Zv `i `vwqz _ K Aemi wb eb 66 Kv úvbxi mvgvwrk `vwqz mvd_b e vsk `vwqz kxjzvi mv _ e emv cwipvjbv K i _v K Ges mgvr I cwi e ki cöwz Gi Ae`vb i L P j Q 2010 mv j Kv úvbxi mvgvwrk `vqe Zvi Dci GKwU cöwz e`b AÎ evwl K cöwz e` bi 77 c ôvq `qv nj 67 ab ev` Ávcb 2010 mv j cwipvjb Kg Kv Û cöf~z mvd j i Rb cwipvjbv cl ` gnvb Avjvn cv Ki ïkwiqv Av`vq Ki Q e vs Ki cwipvjbv cl ` e vs Ki m vwbz MÖvnK, c ô cvlk Ges ïfvkv Lx `i Zv `i Ae vnz mg_ b I mn hvwmzvi Rb AvšÍwiK K ZÁZv cökvk Ki Q cwipvjbv cl ` e vs Ki e e vcbv cwipvjk, wb ew`z cövy wbe vnxmy I Ab vb Kg KZ v `i K Zv `i DrmM xk Z mev cö`v bi Rb D Q wmz cöksmv Ki Q cwipvjbv cl ` MYcÖRvZš x evsjv `k mikvi, evsjv `k e vsk, hš_g~jabx Kv úvbx I cöwzôvbmgy ni wbeük, wmwkdwiwur GÛ G PÄ Kwgkb, XvKv I PÆMÖvg ók G PÄ K Zv `i cöksmbxq mg_ b I mn hvwmzvi Rb ab ev` Rvbv Q GQvov, e vs Ki wbix K gmvm ingvb ingvb nk K cwipvjbv cl ` wbix v I Avw_ K weeiyxmgyn ˆZixi Kvh µg mgqgz m úbœ Kivq AvšÍwiK ab ev` Rvbv Q mviv eqie vcx e vs Ki wewfbœ Kg KvÛ I Abyôvb my `ifv e cöpvi Kivq cwipvjbv cl ` msev` gva gi mv _ RwoZ mkj e w³em K AvšÍwiK ab ev` Rvbv Q me k l, cwipvjbv cl ` m vwbz kqvi nvìvimb K AvšÍwiK ab ev` Rvbv Q Ges G cöwzkö wz cö`vb Ki Q h, e vs Ki wfwë AviI k³ Ges Dbœq bi gva g Zv `i weëˆefe evov bvi cöwµqv Ae vnz _vk e hvi Dci m vwbz kqvi nvìvimy Av v ivl Z cv ib cwipvjbv cl `i c cwipvjbv cl `i cöwz e`b AvjgMxi Kexi, GdwmG Pqvig vb 66 Annual Report 20 10

69 Report on Corporate Governance Southeast Bank operates within the legal framework of the companies Act1994 and as a banking company complies with the provisions of the Bank Company Act1991.The Bank is responsibly managed and supervised in fulfillment of the objectives of adding value to the shareholder wealth and contributing to the national economy. Our Corporate Governance principles serve the goal of strengthening and consolidating company position with sustained growth objectives in materializing the trust placed in the company by the shareholders, clients, employees and the general public. Fair practice, accountability, transparency, compliance, value creation and corporate social responsibility are the pillars of our corporate governance. A comprehensive framework of policies across all the areas of the Bank s operations are set in place. The control mechanism is working well and has further been strengthened in the Bank. The principles of corporate governance in practice have been strengthened and are now embedded in the Bank s overall activities. There is clear leadership and Management Structure across the entire Bank. The Bank s corporate governance structure comprises the following parties and participants: A) The Shareholders. B) The Board C) Bank Management D) Regulatory Authorities and E) Independent External Auditors A. Shareholders The shareholders of the Bank exercise their rights at the Annual General Meeting (AGM). AGM is being held every year within March. The constructive suggestions of the shareholders are implemented in the interest of the Bank. They by their considered votes approve Bank s financial statements, reports of the Board and that of the Auditors, declaration of dividend by the Bank, elect/reelect directors of the Bank and appoint External Auditors in the Annual General Meeting of the Bank. They also by their considered votes pass special resolutions in ExtraOrdinary General Meetings in amending Memorandum and Articles of Association of the Bank, issuance of Rights Shares, Bond by the Bank etc. Our Share Division is shareholders relationship department. Shareholders have right to information which we provide them timely. Any material change in the Bank concerning shareholder interest or any price sensitive information is quickly disclosed for information of the shareholders and potential investors. The Bank Management also holds meaningful dialogue with the shareholders for both qualitative and quantitative improvement of the Bank. Annual Report

70 Participants in Corporate Governance Report on Corporate Governance Independent External Auditors Board of Directors Bank Management Shareholders. Bank Employees Customers Regulatory Authorities B. Board of Directors Composition The Board of Directors is the body responsible for corporate governance, devising policies and determining objectives for stewardship of Bank s resources. The Board of Directors consists of 16 (sixteen) Directors including the Managing Director. The Chairman and in his absence, the Vice Chairman, presides over meetings of the Board of Directors, Annual General Meetings and the ExtraOrdinary General Meetings. Compliance To comply with the requirement of Securities and Exchange Commission (SEC) Notification dated 20th February, 2006, the Board appointed Dr. Zaidi Sattar, a renowned economist of the country and Chairman of the Policy Research Institute of Bangladesh as an Independent Director of the Bank in the 12th Annual General Meeting held on April 28, Southeast Bank has also appointed two Directors from the Depositors of the Bank in compliance with BRPD Circular Letter No.12 dated 18th August, 2008 of Bangladesh Bank. One of the Depositor Directors is Mr. A.H.M. Moazzem Hossain, an economist and the editor of the leading Financial daily, The Financial Express. The appointments of the two Depositor Directors took effect from 8th October, Their first term in office will expire on 7 October, Functions The functional areas of the Board include, but not limited to, approving suitable business strategy, fixation of operational budgets, approval of financial statements, review of Bank s operational performance towards achievement of objectives and approval of policies and operational manuals to establish effective risk management in core banking areas. The functions of the Board also include reviewing company s corporate governance standard for further improvement, determining Bank s corporate social responsibility status and taking steps for its improvement, developing compliance culture in the Bank, approving proposals which are beyond the delegated business / financial / administrative powers of the Management, appointment of the Chief Executive Officer and fixation of his benefits, etc. The Board held 22 (Twenty Two) meetings in Rotation and Retirement of Directors The Directors of the Bank excluding the Managing Director retire in rotation in accordance with the provisions of Companies Act In this respect, the provisions contained in the relevant laws and the Articles of Association of the Bank are complied with in letter and spirit. The Board has constituted the following 02 (two) Committees: i) Executive Committee The Board has set up the Executive Committee as a body to deliberate on generally important management issues and matters in the execution of operations of the Bank. The Committee performs within the powers delegated to it by the Board of Directors. The Committee is composed of 7 (Seven) members including the Managing Director. The Chairman of the Board is the Chairman of the Executive Committee. Twenty Four meetings of the Executive Committee were held in ii) Audit Committee The Audit Committee oversees internal control, audit and financial reporting. It monitors implementation of policies on internal control and compliance and management actions on audit findings. It actively reviews appropriateness of the accounting policies, annual audit plan, audit reports, risk management of the Bank and Bank s technological needs. It also recommends appointment of external auditors and oversees their discharge of responsibilities as external auditors. The Audit Committee consists of 3 (three) members of the Board as per BRPD Circular No.12 dated December 23, 2002 of Bangladesh Bank. Mr. Azim Uddin Ahmed is the Chairman of the Audit Committee. The Audit Committee held 4 (Four) meetings in The minutes of meetings of the Audit Committee were submitted before the Board of Directors and the Board reviewed them. 68 Annual Report 20 10

71 Report on Corporate Governance iii) Loan to Director No fresh loan was allowed to any Director of the Bank during the year C. Bank Management Ensuring effective corporate governance is one of the top priorities of management for realizing the objectives advocated in our management philosophy. The Bank is managed by a team of dedicated and efficient professionals headed by the Managing Director. The functions of the Board and the Management are clearly defined and sharply bifurcated. The Management implements and acts within the policies approved by the Board. A clearly defined organizational structure with definite lines of responsibility and delegation of powers to different echelon of the management are in place in the Bank. The Management enjoys full freedom in conducting the business of the Bank within the scope of the policyguidelines of the Board and the regulatory bodies. However, the Board and the Management work in unison for the continued growth and improvement of the Bank. To streamline functions, the following Committees are actively working in the Bank: i) Management Committee (MANCOM) To address general issues of importance, evaluate different types of risks, monitor internal control structure and to review effectiveness of the internal control system, a Management Committee (MANCOM) is working in the Bank. It is composed of senior members of the Management. The Managing Director acts as the Chairman of MANCOM. The meetings of the MANCOM are held every month to review and address relevant issues timely. ii) Asset Liability Management Committee (ALCO) Asset Liability Management Committee consists of the Managing Director, the Deputy Managing Directors and strategically important Divisional Heads of Head Office. The Managing Director and in his absence the Deputy Managing Director chairs the meeting of the Asset Liability Management Committee. The Committee is responsible for managing balance sheet gap with particular emphasis on maturity profile of deposit and landing, interest rate risk and liquidity risk of the Bank. The meetings of the Asset Liability Management Committee are held every month. iii) Credit Committee A Credit Committee headed by the Managing Director of the Bank has been constituted at Head Office of the Bank for appraisal and quick disposal of credit proposals. The Deputy Managing Director of Corporate Banking plays an important role in the meetings of the Credit Committee. Credit proposals that do not merit considerations are declined. Credit proposals that merit considerations in the opinion of the Credit Committee are presented before the Managing Director of the Bank for approval. The credit proposals that are beyond the delegated business power of the Managing Director are placed before the Executive Committee / Board of Directors for consideration / approval. D. Regulatory Authorities The role of regulatory authorities is very important in respect of corporate governance practices of Southeast Bank Limited. The Bank is pledgebound to comply with all the requirements of regulatory authorities. Their continuous support and cooperation to the Bank are highly valued by the Bank s Board and the management. E. Independent External Auditors M/S Rahman Rahman Huq, a top ranking Audit Firm have been reappointed as the External Auditors of the Bank in the 15th Annual General Meeting held on March 29, 2010 for the first term. They are eligible for reappointment in the 16th Annual General Meeting of the Bank. The External Auditors enjoy full freedom in their audit of accounts of the Bank and reporting to the Shareholders. A report on corporate governance of the Bank as per directives of the SEC dated February 20, 2006 is appended hereto. Compliance report as per Securities & Exchange Commission s Notification dated 20th February, 2006 for all companies listed with any Stock Exchange in Bangladesh in order to improve Corporate Governance in the interest of Capital Market on Comply or Explain basis. Annual Report

72 Report on Corporate Governance Compliance report as per Securities & Exchange Commission s Notification dated 20th February, 2006 for all companies listed with any Stock Exchange in Bangladesh in order to improve Corporate Governance in the interest of Capital Market on Comply or Explain basis. Condition No. Title 1.1 Board s size. 1.2(i) Independent Director. 1.2(ii) Appointment of Independent Director. 1.3 Chairman of the Board and Chief Executive Officer (CEO) 1.4 Boards Report. 1.4(a) Fairness of Financial Statements 1.4(b) Maintenance of proper books of accounts. 1.4(c) Appropriate accounting policies. 1.4(d) Compliance with International Accounting Standards 1.4(e) Soundness of Internal Control System 1.4(f) Bank s abilities to continue as a going concern 1.4(g) Changes in operating results. 1.4(h) Three years financial data 1.4(i) Declaration of Dividend 1.4(j) Details of Board meeting 1.4(k) Shareholding pattern 2.1 Appointment of: Company Secretary CFO Head of Internal Audit. 2.2 Attendance of : Company Secretary CFO in Board Meetings Compliance status (Put in the appropriate column) Complied Not Complied Remarks Attends as and when required 3.0 Audit Committee 3.1(i) Constitution of Audit Committee 3.1(ii) Inclusion of independent Director on the Audit Committee 3.1(iii) Filling of casual vacancy in the No such situation Audit Committee 3.2(i) Chairman of the Committee 3.2(ii) Qualification of the Chairman of the Audit Committee 3.3 Reporting of the Audit Committee (i) Reporting to the Board of Directors 3.3.1(ii)(a) Reporting of conflict of interest to the Board 3.3.1(ii)(b) Reporting of any fraud or irregularity to the Board 3.3.1(ii)(c) Reporting of violation of any laws to the Board Not Applicable The Audit Committee had no findings on violation of law during the year to report to Board. 70 Annual Report 20 10

73 Report on Corporate Governance Condition No. Title Compliance status (Put in the appropriate column) Complied Not Complied Remarks 3.3.1(ii)(d) Reporting of any other matter to the Board Not Applicable The Audit Committee had no such findings for report to the Board of Directors Reporting to the concerned Authorities. Not Applicable The Audit Committee had no findings for report to the Securities and Exchange Commission. 3.4 Reporting to the Shareholders and general investors 4.0 External/Statutory Auditors 4.0(i) Nonengagement in appraisal or valuation 4.0(ii) Nonengagement in designing of Financial Information System 4.0(iii) Nonengagement in Book keeping Not applicable 4.0(iv) Nonengagement in Broker dealer service Not applicable 4.0(v) Nonengagement in actuarial services Not Applicable 4.0(vi) Nonengagement in internal audit Not Applicable 4.0(vii) Nonengagement in any other services Not Applicable Attendance of Directors in the meetings A) Meeting of the Board of Directors Name of the Directors Total no. of meetings from to Total attendance Alamgir Kabir, FCA Ragibl Ali M. A. Kashem Azim Uddin Ahmed Tahnoun A. Harun representing Bangla Capital Limited 22 2 Jusna Ara Kashem Duluma Ahmed Syed Shahid Ali Rehana Rahman Md. Akikur Rahman 22 9 Monjur Miah 22 1 Sirat Monira Abdul Hye representing Karnafuli Tea Co. Ltd 22 8 Dr. Zaidi Sattar A.H.M. Moazzem Hossain Mahbubul Alam Managing Director Remarks The Directors who could not attend any meeting were granted leave of absence Annual Report

74 Report on Corporate Governance B) Meeting of the Executive Committee of the Board of Directors Name of the Directors Total no. of meetings from to Total attendance Alamgir Kabir, FCA Ragib Ali M. A. Kashem Azim Uddin Azim Dr. Zaidi Sattar A.H.M. Moazzem Hossain Mahbubul Alam Managing Director Remarks The Directors who could not attend any meeting were granted leave of absence C) Meeting of the Audit Committee of the Board of Directors Name of the Directors Total no. of meetings from to Total attendance Azim Uddin Ahmed 4 4 M. A. Kashem 4 3 Dr. Zaidi Sattar (Independent Director) 4 4 Remarks The Directors who could not attend any meeting were granted leave of absence D) Pattern of Shareholdings: i) Shares held by Parent/Subsidiary/Associated Companies and other related Parties NIL ii) Ownership of Company s Securities by the Members of Board of Directors. Sl. No. Name of the Directors No. of Shares Value in Tk. Percentage 1. Alamgir Kabir, FCA 8,59,613 8,59,61, % 2. Ragib Ali 19,51,404 19,51,40, % 3. M. A. Kashem 19,64,751 19,64,75, % 4. Azim Uddin Ahmed 18,96,456 18,96,45, % 5. Bangla Capital Limited 1,02,351 1,02,35, % 6. Jusna Ara Kashem 4,58,192 4,58,19, % 7. Duluma Ahmed 14,21,551 14,21,55, % 8. Syed Shahid Ali 1,92,705 1,92,70, % 9. Rehana Rahman 8,80,843 8,80,84, % 10. Md. Akikur Rahman 6,38,669 6,38,66, % 11. Monjur Miah 3,29,313 3,29,31, % 12. Sirat Monira 9,112 9,11, % 13. Karnafuli Tea Co. Limited 12,277 12,27, % 14. Dr. Zaidi Sattar, Independent/Depositor Director 15. A.H.M. Moazzem Hossain, Depositor Director 16. Mahbubul Alam, Managing Director Total Shares : 1,07,17, ,17,23, % 72 Annual Report 20 10

75 Report on Corporate Governance iii) Shares held by Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children. Sl. No. Designation Shareholdings as on a) Mahbubul Alam Chief Executive Officer b) Spouse / Minor Children of CEO 2 a) Muhammad Shahjahan Company Secretary 84 b) Spouse / Minor Children of Company Secretary 3 a) Arun Chandra Paul Chief Financial Officer b) Spouse / Minor Children of Chief Financial Officer 2 4 a) Haradhan Banik Head of Internal Audit b) Spouse / Minor Children of the Head of Internal Audit iv) Shares held by top five salaried Executives in the regular services of the Bank. Sl. No. Designation Shareholdings as on Syed Imtiaz Hasib, Deputy Managing Director 2. Mohammed Gofran, Deputy Managing Director 3. Shahid Hossain, Deputy Managing Director 4. Muhammad Shahjahan, Senior Executive Vice President S. M. Mainuddin Chowdhury, Senior Executive Vice President 72 v) List of Shareholders holdings 10% and above shares in the PaidUpCapital of the Bank. NIL Annual Report

76 A commercial Bank broadly categorized, performs two major functions: Offer financial products and services to the clients. Engage in financial intermediation and risk management. A Bank s economic performance therefore largely depends on the quality service and efficiency of its risk management. Effective Risk Management is perceived to be necessary and critical to ensure long time survival of the Bank. Southeast Bank Limited has taken various initiatives for strengthening risk management practices in conjunction with the business strategy and operational activities. The Bank has an integrated approach for management of risk and in this regard it has formulated policy documents taking into account the business requirements / best international practices and above all as per the guidelines of the Bangladesh Bank. The risk management of the Bank covers following six core risk areas: a) Asset Liability Risk Management, b) Foreign Exchange Risk Management, c) Credit Risk Management, d) Internal Control & Compliance Risk Management, e) Money Laundering Risk Management, f) Information and Communication Technology (ICT) Risk Management. 74 Annual Report 20 10

77 Report on Risk Management Control Manage 01. Asset Liability Risk Management: The Asset Liability Management (ALM) is a key Balance Sheet Risk Management discipline which mainly focuses on liquidity and interest rate risk of the Bank. ALM process of our Bank involves analysis, evaluation, identification and management of certain risks or combination of risks. The main objective of ALM is to manage the Balance Sheet risk of the bank through management of net interest income, sensitivity, management of liquidity risk, capital management, undertaking financial hedge positions, internal profitability measurement and regulatory compliance. The year 2010 was an eventful year for each of the bank s Treasury Division. In this year the Bangladesh Bank with the aim of controlling the inflation rate of the country has taken certain measures by increasing the Cash Reserve Requirement (CRR) & Statutory Liquidity Ratio (SLR) in the middle and at the end of the year. In this complex situation our bank managed its assets and liabilities more prudently ensuring optimum liquidity with compliance of regulatory requirements again realizing considerable amount of profit by manipulating the risk associated with the market. To address and mitigate various risks involved in the business, ALM desk of the treasury department of our Bank prepared ALCO (Asset Liability Committee) paper in each month and conducted monthly Asset Liability meeting where economic outlook and financial fundamentals of the Bank were highlighted. Decisions taken in the ALCO meetings were duly recorded and action plans were implemented by the branches and departments to optimize Bank s financial performances. As a result, the Bank registered substantial growth in all the performance indicators including operating profit in 2010 by minimizing the liquidity and interest rate risk. As a part of regulatory requirement, the Management also reviewed and revised the ALM manual in June Foreign Exchange Risk Management Foreign exchange risk arises when the Bank is involved in foreign currency transactions. These transactions include foreign currency exchange, placement, investments, loans, borrowings and different contractual agreements. The foreign exchange risk of our Bank was minimal as almost all the transactions were carried out on behalf of the customers against underlying L/C commitments and other remittance requirements. Also, proper risk limits were approved by the Board of Directors, which were meticulously observed and Internal Control & Compliance Division of Head Office also regularly reviews the process of Foreign Exchange Risk Management. In general, the Bank s policy is to match foreign currency assets and liabilities following strictly the overnight limit of our open position fixed by the Central Bank. Treasury Department independently conducts the transactions and the back office of the treasury is responsible for verification of the deals and passing of their entries in the books of accounts. All foreign exchange transactions are revalued and all Nostro Accounts are reconciled periodically. 03. Credit Risk Management In order to bring more perfection in the implementation of our CRM policy, establishing better control over the loan portfolio and to comply with Bangladesh Bank s guidelines, Southeast Bank Limited has established a separate Credit Risk Management (CRM) Division at Head Office in February, 2010 comprising of three departments namely; Credit Approval Department, Credit Administration Department and Legal Affairs & Recovery Department. Under the new set up of CRM Division, Credit Approval Department is responsible for analyzing the proposal, assessing different risk elements like Management, Financial, Marketing, Technical etc. associated with the business and finding out the mitigating factors which help the management to take decisions. On the other hand, the functions of documentation, disbursement, monitoring and compliance are vested upon Credit Administration Department. This Department keeps themselves vibrant in maintaining/improving quality of assets of the Bank. Legal Affairs and Recovery Department is entrusted with the responsibility of recovering of classified/nonperforming loans and filing of suits against defaulted borrowers & other related legal matters of the Bank. Annual Report

78 Report on Risk Management v) AML Risk Analysis. vi) Monitoring of Clients Accounts. vii) Special attention and implementation of adequate security measures on Correspondent Banking. viii) Reporting of unusual/suspicious transactions to regulatory authority. ix) Implementation of adequate customer & business related controls according to the AML & ATF requirements. x) Training & Awareness of all the employees on the issue of AML & ATF. xi) Implementation of Record Retention Requirements. xii) Implementation of Embargo Requirements. xiii) Discharging Individual Roles & Responsibilities on the issue of AML & ATF, etc. All the concerned officials of the Bank ensure that SEBL is not used as a channel for criminal funds. They are wellconversant about the standards, laws & regulations, manuals, guidelines, policies, circulars etc in connection with AML & ATF activities and follow the same properly. 06. Information and Communication Technology (ICT) Risk Management Information assets are very critical to the services provided by the Bank to its customers. Protection and maintenance of these assets are essential for sustainability and growth. The Bank has already commissioned stateofart Data Center and Disaster Recovery Site and taken initiatives to protect the information from unauthorized access, modification, disclosure and destruction to protect customers interest. The Bank has been maintaining physical security for its workplace to protect ICT resources as per the Physical Security Guideline under Tier1 of ICT guideline of Bangladesh Bank. The Bank is strictly following the Information Security Standard of Bangladesh Bank which covers Password Control, User ID Maintenance, Input Control (i.e. MakerChecker Concept), Network Security, Data Encryption, Virus Protection and users access to internet and . The Bank has established secured network infrastructure by deploying a number of logical protection levels between web application and database layers. The Routers are configured with ACL (Access Control List) and Virtual Private Network (VPN) allowing traffic only to destination IP and desired service. The Bank has elaborate Business Continuity Plan (BCP) in place as per the ICT guidelines of Bangladesh Bank. Training is a key component of ICT Risk Management. The Bank has been continuously conducting training programs on critical ICT matters (i.e. operational procedure, security procedures, steps to be taken in case of any contingency / health security in the ICT area, Business Continuity Plan, Disaster Recovery Plan etc.) for relevant employees. The Bank has developed a critical human resource backup plan with detail job description for IT personnel, segregation of duties for IT tasks and system support in respect of severity. 76 Annual Report 20 10

79 Report on Corporate Social Responsibility Our CSR activities follow transparent business practices that are based on ethical values, compliance with legal and regulatory requirement and respect for people, communities and the environment. We are responsible for the totality of our impact on people and the planet, beyond making profit. Southeast Bank s banking practice is based on a network of relationship with its employees, customers, suppliers, business associates, shareholders, regulatory authorities and the community. The Bank s corporate social responsibility is about addressing the needs of all the stakeholders in a way that advances its business and makes a positive and meaningful contribution to the society. Employees The Bank s business is dynamic and growing. This dynamism and growth come from its skilled and experienced human resource that can be found at every level of the organization. The Bank offers its employees very competitive pay package and bonus that are reviewed on a continuous basis in line with the market dynamics. It provides the employees a safe and congenial work environment. It also offers its employees handsome retirement benefits by way of Contributory Provident Fund, Gratuity, Superannuation benefits, etc. As a consequence, Southeast Bank has emerged as a Bank with a vision; workplace of choice of many. The Bank s rapid growth in business presents opportunities for talented employees to take added responsibilities. The employees follow the ethical and other codes of conduct as embodied in the Service Rules and Regulations of the Bank. Annual Report

80 Report on Corporate Social Responsibility Customers The need to focus on the need of customers is fundamental to banking business. Southeast bank discharges this vital responsibility by offering financial products and services that truly meet their needs. In discharging this vital responsibility, the Bank always strives to maintain the highest standard of ethics in the conduct of its business. The Bank feels proud that these efforts have earned it the trust of the customers. This trust in turn motivates the Bank to carry out every single transaction with the customers with the highest degree of commitment and transparency without any hidden cost. The Bank looks upon the customers as its partners in business and sincerely endeavours to improve its relationship with them for mutual benefit. Shareholders The Southeast bank is fully committed to protect the interest of its shareholders. They fully exercise their rights and their constructive suggestions are implemented for the betterment of the company. The Bank releases enough disclosures for the information of the shareholders in the Annual Reports, halfyearly financial statements, the print and electronic media and in the Bank s website. It always endeavours to enhance shareholders value by optimizing financial performance at least cost. Since inception, the Bank has paid good dividends to the shareholders. The number of shareholders of the Bank is increasing that testifies their unshakable trust in the Bank. The Bank s Business Associates Alamgir Kabir, FCA, Chairman, accompanied by Azim Uddin Ahmed, Director, Southeast Bank Limited handed over a cheque for Tk lac to the Hon ble Prime Minister for the victims of the fire incident of Neemtali and building collapse of Begunbari of Dhaka City. The Bank continuously endeavours to create a longlasting winwin relationship with its suppliers and business associates for mutual growth. Its relationship with them is based on mutual trust and respect. It deals with them in a fair and transparent way. Southeast Bank enjoys credit lines from Correspondents and Foreign Banks and special credit line from ADB and IFC. Environment The Bank continuously strives to ensure that its operations are environmentfriendly and discourages financing projects contrary to it. It has extended its helping hands to initiatives of community leaders for environment protection and development. It is one of the leading participants in the beautification of Dhaka City. The beautification of the roadisland from Russell Square to Manik Miah Avenue was done by the Southeast Bank. We are moving fast towards green banking. Regulators Southeast bank firmly believes that it is imperative to comply with the relevant laws, rules and regulations of all regulatory authorities to be a responsible corporate citizen. The Bank s business practices are transparent and are appreciated by the regulators. The Bank operates cautiously observing the antimoney laundering practices. Dr. Atiur Rahman, Governor, Bangladesh Bank and Directors of Southeast Bank Limited are seen with the recipients of Southeast Bank Foundation Scholarship at a function held on 23 May, Two Hundred Thirty (230) poor but meritorious students have been selected for scholarship. The Scholarship money for every student is Tk.1, per month with a lumpsum amount of Tk.4, for each Academic Session. Community a) We believe every business should give something back to the society. Southeast Bank works to promote good community relations to foster a relationship of understanding, trust and credibility. It has a long history of support for charitable causes. We help achieve lasting changes in the lives of people who are disadvantaged or vulnerable. In 2010, Southeast Bank has spent Tk.2.37 million as donations for education, sports, art, culture, healthcare, community development, relief operations etc. b) Our credit policy has been redesigned to avoid concentration of Bank s credit in major cities and to encourage distribution of credit in priority sectors particularly in Agriculture and SMEs. 78 Annual Report 20 10

81 Report on Corporate Social Responsibility c) A senseless killings of valiant army officers was committed by the misguided BDR personnel at BDR Headquarters, Peelkhana, Dhaka on February 25, It widowed and orphaned innocent people and catapulted the affected families in distress and uncertainty. Southeast Bank pioneered and propagated an idea to stand by the affected families which won wide appreciation at different levels. In accordance with our devised formula, the Bank, in collaboration with the Government of Bangladesh, selected the following 7 (seven) bereaved families of the Shaheed Army Officers who embraced martyrdom at the carnage at BDR(now BGB) Headquarters to stand by them. Each family is being given Tk.40, (Forty Thousand) only per month totaling Tk.4,80, (Four Lac Eighty Thousand) only in a year and the contribution will continue for 10 (ten) years. Sl. Name of the Shaheed Monthly Yearly Widow of Shaheed No. Army Officers Contribution Contribution Army Officers 1. BA 1892 Tk. 40, Tk. 480, Ms. Farhana Bari Brig. General Md. Abdul Bari 2. BA 1480 Tk. 40, Tk. 480, Ms. Nehrin Ferdousi Col. Md. Mojibul Huq 3. BA 2324 Tk.40, Tk.480, Ms. Zobaida Begum Col. Mohammad Mashiur Rahman 4. BA 2409 Tk.40, Tk.480, Ms. Loby Rahman Col. Kudrat Elahi Rahman Shafiq 5. BA 2605 Tk.40, Tk.480, Ms. Mahbuba Begum Maj. Md. Abdus Salam Khan 6. BA 2806 Tk.40, Tk.480, Ms. Munmun Rahman Lt. Col. Md. Lutfur Rahman 7. BA 3716 Tk.40, Tk.480, Ms. Rita Rahman Maj. Md. Mahbubur Rahman Total: Tk. 33,60, First year s contribution for Tk.3.36 million only was paid to the widows of the Shaheed Army Officers at the Prime Minister s Office (PMO) on April 01, The second year s contribution of Tk.3.36 million was paid to the widows of the Shaheed Army Officers at the PMO vide pay orders dated February 02, d) Apart from the above, Southeast Bank also donated Tk.2.50 million only to the Prime Minister s Relief Fund on 16 June, 2010 for relief operations amongst victims of fire incident at Neemtali and building collapse of Begunbari of Dhaka City. e) Southeast Bank also donated Tk.5.00 million on towards establishment of Muktijuddha Jadughar to uphold national heritage for posterity. f) Boxing is a neglected sport areas, Southeast Bank came forward for improvement of boxing in the country. The Bank donated total Tk.2.26 million to Bangladesh Amateur Boxing Federation for the purpose. g) Southeast Bank donated Tk.5.00 million on to Bangladesh Olympic Association in cosponsoring the 11th SA Games Dhaka2010. Southeast Bank donated Tk.0.50 million on to Bangladesh Hand Ball Federation in sponsoring the IHF Challenge Trophy, Bangladesh National Economy Southeast Bank has directly employed people in the service of the Bank. We have also generated employments for thousands of men and women in the projects and industrial ventures established with our finance. The credit policy of the Bank has also been so designed as to promote trade, commerce and industry which will ultimately contribute to the growth of national economy. It will also help creation of employment opportunities. By mobilizing deposits for the Bank, we have contributed to the formation of capital of the country. We have collected tax on interest/profit earning of the depositors for the public exchequer. Our Bank has been a conduit for bringing foreign remittance from Bangladeshi expatriates living abroad and thereby contributed to the overall foreign exchange reserve of the country. We contributed handsome amounts to the national exchequer in the preceding years as corporate tax. Annual Report

82 Report on Corporate Social Responsibility Southeast Bank Foundation The Bank has also established the Southeast Bank Foundation to participate in social work in a more organized manner. In 2009 the Bank has sufficiently manned the Foundation to carry out activities towards the promotion of high order CSR i.e. activities over and beyond simple donation. Adan Islam, Executive Director, Dhoritri Foundation is receiving a cheque of Tk.7,00,000/ only on 8 August, 2010 from Chairman Alamgir Kabir, FCA for social upliftment of Dalit people and education of their children. Dr. Zaidi Sattar, Director, Southeast Bank Limited is seen (sitting in the middle) in the inaugural session of a month long program: Training of Teachers and Learners (TOTAL) held on December 4, 2010 organized for secondary level English Teachers of selected schools for improvement of quality of English teaching in schools. Mrs. Zohra Rahman, widow of late Poet Shamsur Rahman and Chairman Alamgir Kabir, FCA are seen, among others, in a photo session on 16 June, 2010 after the announcement that Southeast Bank Foundation will contribute Tk.40, per month for five years to her family to eke out living. Under the Corporate Social Responsibilities (CSR), the Foundation has identified education as the main field of responsibility and has initiated a Scholarship Project in the Secondary Level to support meritorious students of poor and low income families in the year It has begun with two layers one for school students and the other for HSC Level College students. A huge number of Secondary Schools established in the rural areas of Bangladesh within last two decades are yet to create conducive teaching environments mainly due to poorly trained underpaid teachers. Though government has taken a number of projects to address issues like training of teachers and stipend for girl students, the overall gain regarding quality education is not noteworthy. Schools near and around the Southeast Bank Branches of rural and semiurban areas identified to be improved are included in the project. The important components of the project are: a) scholarship for meritorious students of low income families studying from class VII class X, b) training of teachers, c) enhancing facilities for library, science laboratory and computer laboratory. The respective Southeast Bank Branches act as the focal points of the scholarship program. Scholarship money for class VII and VIII is Tk.600/ per month with a lumpsum amount of Tk.1,500/. For students of class IX and X stipend money is Tk.1,000/ per month with a lump sum amount of Tk.2,500/. The stipend will be renewed on the basis of annual results and class performances. The Foundation has selected 245 students in 2010 in the School Level. The Southeast Bank Foundation has organized a month long English Course titled Training of Teachers and Learners (TOTAL) for the English teachers of selected schools in December, This Course has been primarily designed to help them take new steps and guidelines in teaching English in the Secondary Level. Besides, two English Newspapers are being subscribed to each of these schools as reading materials for both teachers and students. Other innovative programs will be gradually included for these schools based on their respective needs. A country wide Scholarship Project for Higher Secondary students has been undertaken from For students of class XI and XII the scholarship money is Tk.1500/ per month with a lump sum amount of Tk.4,000/. Applications are invited through a number of daily newspapers. Students who pass SSC examination or equivalent can apply for the SEB Foundation s scholarship. Each student should have opened a SEB Account to realize the scholarship money. So far a number of 491 students are selected for the SEB Foundation Scholarship. 80 Annual Report 20 10

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92 Southeast Bank Limited and its subsidiary Consolidated Balance Sheet as at 31 December 2010 PROPERTY AND ASSETS Notes Cash 4 In hand (including foreign currencies) 826,992, ,493,449 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 6,468,590,498 5,413,864,130 7,295,582,604 6,020,357,579 Balance with other banks and financial institutions 5(a) In Bangladesh 1,972,298,388 87,767,997 Outside Bangladesh 1,058,808, ,577,920 3,031,107,119 1,122,345,917 Money at call on short notice 6 509,500, ,700,000 Investments 7 (a) Government 16,603,461,142 19,407,606,604 Others 2,265,610,095 1,942,627,246 18,869,071,237 21,350,233,850 Loans and advances/investments 8(a) Loans, cash credit, overdrafts etc./investments 88,408,896,195 73,466,742,724 Bills purchased and discounted 5,572,306,128 4,030,830,475 93,981,202,323 77,497,573,199 Fixed assets including premises, furniture and fixtures 9(a) 4,463,638,993 4,323,590,535 Other assets 10(a) 3,634,168,250 2,173,183,844 Non banking assets Total assets 131,784,270, ,676,984,924 LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents 11(a) 976,452, ,836,236 Deposits and other accounts 12(a) Current/Alwadeeah current accounts and other accounts 10,072,568,542 6,226,255,141 Bills payable 1,346,207,382 1,163,140,147 Savings bank/mudaraba savings bank deposits 5,773,710,807 6,694,031,711 Fixed deposits/mudaraba fixed deposits 90,060,703,587 82,585,625,140 Bearer certificates of deposit Other deposits 107,253,190,318 96,669,052,139 Other liabilities 13(a) 6,308,520,096 4,416,919,262 Total liabilities 114,538,163, ,347,807,637 Capital/shareholders' equity Paid up capital ,930,840,400 3,422,637,300 Share premium 1,386,168,060 Statutory reserve 15 3,650,252,294 2,665,605,000 Revaluation reserve 16 3,151,727,770 3,710,209,074 Other reserves ,650, ,854,046 Retained earnings 18(a) 1,779,358,967 1,278,871,867 Total shareholders' equity 17,145,997,491 11,329,177,287 Noncontrolling interest ,109,680 Total liabilities and shareholders' equity 131,784,270, ,676,984, Annual Report 20 10

93 Southeast Bank Limited and its subsidiary Consolidated Balance Sheet as at 31 December 2010 OFFBALANCE SHEET ITEMS Notes Contingent liabilities 20 Acceptances and endorsements 24,625,818,168 12,020,156,780 Letters of guarantee 6,701,765,198 6,034,183,466 Irrevocable letters of credit 22,425,566,090 15,013,644,393 Bills for collection 3,628,745,629 2,059,440,636 Value of Bangladesh Sanchaypatra 632,084, ,555,000 58,013,979,085 35,650,980,275 Other commitments Documentary credits and short term traderelated transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities, credit lines and other commitments 58,013,979,085 35,650,980,275 Total offbalance sheet items including contingent liabilities 58,013,979,085 35,650,980,275 The annexed notes 1 to 41 form an integral part of these financial statements. Chairman Vice Chairman Director Managing Director As per our report of same date. Dhaka, 20 February 2011 Auditors Rahman Rahman Huq Chartered Accountants Annual Report

94 Southeast Bank Limited and its subsidiary Consolidated Profit and Loss Account for the year ended 31 December 2010 Interest income/profit on investments 22(a) 10,275,162,797 8,962,092,477 Interest paid/profit shared on deposits and borrowings etc. 23(a) (7,593,806,743) (7,555,998,616) Net interest income/net profit on investments 2,681,356,054 1,406,093,861 Investment income 24 3,788,427,272 2,615,816,028 Commission, exchange and brokerage 25 1,700,994,440 1,644,226,192 Other operating income 26(a) 336,228, ,078,837 5,825,649,805 4,453,121,057 Total operating income (A) 8,507,005,859 5,859,214,918 Salaries and allowances 27(a) 729,434, ,015,328 Rent, taxes, insurance, electricity etc. 28(a) 228,512, ,558,136 Legal expenses 294, ,253 Postage, stamp, telecommunication etc. 29(a) 78,333,486 54,018,201 Stationery, printing, advertisements etc. 30(a) 80,690,086 66,715,189 Managing Director's salary and fees 31 10,350,000 9,207,250 Directors' fees and expenses 32(a) 3,040,379 3,440,553 Auditors' fees , ,000 Depreciation and repair of Bank's assets 34(a) 183,496, ,238,874 Other expenses 35(a) 423,062, ,503,363 Total operating expenses (B) 1,737,739,216 1,244,556,147 Profit before provision (C=AB) 6,769,266,643 4,614,658,771 Provision for loans and advances/investments 13.1 General provision 144,200, ,685,000 Specific provision 1,500,000, ,500,000 1,644,200,000 1,110,185,000 Provision for offbalance sheet items ,950,000 38,300,000 Provision for diminution in value of investments 36(a) (8,288,385) Other provisions 1,000,000 14,409,000 Total provision (D) 1,839,861,615 1,162,894,000 Total profit before tax (CD) 4,929,405,028 3,451,764,771 Provision for taxation 37(a) Current 2,150,972,000 1,581,579,531 Deferred 14,500,000 2,165,472,000 1,581,579,531 Net profit after tax 2,763,933,028 1,870,185,240 Net profit after tax attributable to: Equity holders' of the Bank 2,763,853,348 1,870,185,240 Noncontrolling interest 79,680 Net profit after tax 2,763,933,028 1,870,185,240 Appropriations Statutory reserve ,647, ,353,200 General reserve 984,647, ,353,200 Retained surplus 1,779,285,734 1,179,832,040 Earnings per share (par value 100) 40(a) Notes Chairman Vice Chairman Director Managing Director As per our report of same date. Dhaka, 20 February 2011 Auditors Rahman Rahman Huq 92 Chartered Accountants Annual Report 20 10

95 Southeast Bank Limited and its subsidiary Consolidated Statement of Changes in Equity for the year ended 31 December 2010 Particulars Paid up capital () Statutory reserve () Share premium () Revaluation reserve () Other reserves () Retained earnings () Noncontrolling interest () Total () Balance as at 1 January ,852,197,800 1,975,251, ,930,025 1,249,249, ,854, ,790,957 7,357,274,431 Statutory reserve 690,353,200 (690,353,200) Revaluation reserve 2,460,959,271 2,460,959,271 Issue of bonus share 570,439,500 (485,930,025) (84,509,475) Cash dividend (427,829,670) (427,829,670) Adjustment of deferred tax liabilities 26,325,015 26,325,015 Diminution in value of investments 72,263,000 72,263,000 Transfer to SEBL Foundation (30,000,000) (30,000,000) Net profit for the year 1,870,185,240 1,870,185,240 Balance as at 31 December ,422,637,300 2,665,605,000 3,710,209, ,854,046 1,278,871,867 11,329,177,287 Statutory reserve 984,647,294 (984,647,294) Revaluation reserve (558,481,304) (558,481,304) Issue of bonus share 1,197,923,000 (1,197,923,000) Issue of right share 2,310,280,100 1,386,168,060 3,696,448,160 Exchange equalization reserve (4,204,046) 4,204,046 Transfer to SEBL Foundation (50,000,000) (50,000,000) Transfer to SEBL Employees' welfare fund (35,000,000) (35,000,000) Net profit for the year 2,763,853,348 2,763,853,348 Noncontrolling interest 100,109, ,109,680 Balance as at 31 December ,930,840,400 3,650,252,294 1,386,168,060 3,151,727, ,650,000 1,779,358, ,109,680 17,246,107,171 Annual Report

96 Southeast Bank Limited and its subsidiary Consolidated Cash Flow Statement for the year ended 31 December 2010 A) Cash flows from operating activities: Notes Interest receipts 11,735,054,080 10,509,289,650 Interest payments (8,354,903,258) (7,425,614,632) Dividends receipts 35,198,093 15,500,611 Fee and commission receipts 1,700,994,440 1,644,226,192 Recoveries on Loans previously writtenoff 25,100,439 3,827,501 Payments to employees (739,784,437) (535,222,578) Payments to suppliers (101,002,935) (68,951,459) Income taxes paid (1,870,473,293) (1,405,698,677) Receipts from other operating activities 38(a) 426,797, ,251,336 Payments for other operating activities 39(a) (730,182,270) (579,529,930) Operating profit before changes in operating assets and liabilities (i) 2,126,798,208 2,347,078,014 Increase/decrease in operating assets and liabilities: Sale of trading securities 10,319,595,939 2,195,701,194 Purchase of trading securities (8,437,665,084) (1,486,681,267) Loans and advances to customers (16,483,629,124) (17,216,312,810) Other assets (1,353,574,960) (737,255,105) Deposits from other banks 714,616,705 (1,300,156,889) Deposits from customers 11,345,234,692 27,536,758,170 Other liabilities (516,416,558) (511,880,820) Cash (used in)/received from operating assets and liabilities (ii) (4,411,838,390) 8,480,172,473 Net cash (outflow)/inflow from operating activities (i+ii) (2,285,404,182) 10,827,250,487 B) Cash flows from investing activities Proceeds from sale of securities 118,108,945,703 12,837,225,250 Payment for purchase of securities (120,075,712,423) (20,966,627,782) Purchase of fixed assets (260,030,070) (675,645,178) Sale of fixed assets 4,057, ,157 Net cash outflow from investing activities (2,222,739,012) (8,804,514,553) C) Cash flows from financing activities: Payment of dividend (427,829,670) Payment against lease obligation (16,191,990) (29,122,069) Receipts from issue of ordinary shares of Southeast Bank Capital Services Limited 100,030,000 Receipts from issue of right shares 3,696,448,160 Net cash flow from financing activities 3,780,286,170 (456,951,739) D) Net (decrease)/increase in cash and cash equivalents (A+B+C) (727,493,024) 1,565,784,195 E) Cash and cash equivalents at beginning of the year 12,844,289,866 11,278,505,671 F) Cash and cash equivalents at end of the year (D+E) 12,116,796,842 12,844,289,866 Cash and cash equivalents at end of the year represents Cash in hand (including foreign currencies) 826,992, ,493,449 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 6,468,590,498 5,413,864,130 Balance with other banks and financial institutions 3,031,107,119 1,122,345,917 Money at call and on short notice 509,500, ,700,000 Treasury bills 1,276,504,519 5,506,036,370 Prize bond 4,102,600 5,850,000 12,116,796,842 12,844,289, Annual Report 20 10

97 Southeast Bank Limited Balance Sheet as at 31 December 2010 PROPERTY AND ASSETS Notes Cash In hand (including foreign currencies) 826,992, ,493,449 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 6,468,590,498 5,413,864,130 7,295,582,604 6,020,357,579 Balance with other banks and financial institutions 5 In Bangladesh 1,972,298, ,767,997 Outside Bangladesh 1,058,808, ,577,920 3,031,107,119 1,122,345,917 Money at call on short notice 6 509,500, ,700,000 Investments 7 Government 16,603,461,142 19,407,606,604 Others 1,724,186,131 1,942,627,246 18,327,647,273 21,350,233,850 Loans and advances/investments 8 Loans, cash credit, overdrafts etc./investments 86,880,309,365 73,466,742,724 Bills purchased and discounted 5,572,306,128 4,030,830,475 92,452,615,493 77,497,573,199 Fixed assets including premises, furniture and fixtures 9 4,463,082,010 4,323,590,535 Other assets 10 5,863,941,651 2,173,183,844 Non banking assets Total assets 131,943,476, ,676,984,924 LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents ,452, ,836,236 Deposits and other accounts 12 Current/Alwadeeah current accounts and other accounts 10,048,965,997 6,226,255,141 Bills payable 1,346,207,382 1,163,140,147 Savings bank/mudaraba savings bank deposits 5,773,710,807 6,694,031,711 Fixed deposits/mudaraba fixed deposits 90,560,703,587 82,585,625,140 Bearer certificates of deposit Other deposits 107,729,587,773 96,669,052,139 Other liabilities 13 6,092,154,825 4,416,919,262 Total liabilities 114,798,195, ,347,807,637 Capital/shareholders' equity Paid up capital ,930,840,400 3,422,637,300 Share premium 1,386,168,060 Statutory reserve 15 3,650,252,294 2,665,605,000 Revaluation reserve 16 3,151,727,770 3,710,209,074 Other reserves ,650, ,854,046 Retained earnings 18 1,778,642,087 1,278,871,867 Total shareholders' equity 17,145,280,611 11,329,177,287 Total liabilities and shareholders' equity 131,943,476, ,676,984,924 Annual Report

98 OFFBALANCE SHEET ITEMS Southeast Bank Limited Balance Sheet as at 31 December 2010 Contingent liabilities 20 Acceptances and endorsements 24,625,818,168 12,020,156,780 Letters of guarantee 6,701,765,198 6,034,183,466 Irrevocable letters of credit 22,425,566,090 15,013,644,393 Bills for collection 3,628,745,629 2,059,440,636 Value of Bangladesh Sanchaypatra 632,084, ,555,000 58,013,979,085 35,650,980,275 Other commitments Documentary credits and short term traderelated transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities, credit lines and other commitments 58,013,979,085 35,650,980,275 Total offbalance sheet items including contingent liabilities 58,013,979,085 35,650,980,275 Notes The annexed notes 1 to 41 form an integral part of these financial statements. Chairman Vice Chairman Director Managing Director Dhaka, 20 February 2011 As per our report of same date. Auditors Rahman Rahman Huq Chartered Accountants 96 Annual Report 20 10

99 Southeast Bank Limited Profit and Loss Account for the year ended 31 December 2010 Interest income/profit on investments 22 10,257,037,859 8,962,092,477 Interest paid/profit shared on deposits and borrowings etc. 23 (7,580,851,090) (7,555,998,616) Net interest income/net profit on investments 2,676,186,769 1,406,093,861 Investment income 24 3,788,427,272 2,615,816,028 Commission, exchange and brokerage 25 1,700,994,440 1,644,226,192 Other operating income ,873, ,078,837 5,814,295,532 4,453,121,057 Total operating income (A) 8,490,482,301 5,859,214,918 Salaries and allowances ,128, ,015,328 Rent, taxes, insurance, electricity etc ,471, ,558,136 Legal expenses 294, ,253 Postage, stamp, telecommunication etc ,316,636 54,018,201 Stationery, printing, advertisements etc ,668,877 66,715,189 Managing Director's salary and fees 31 10,350,000 9,207,250 Directors' fees and expenses 32 3,010,379 3,440,553 Auditors' fees , ,000 Depreciation and repair of Bank's assets ,357, ,238,874 Other expenses ,443, ,503,363 Total operating expenses (B) 1,735,540,818 1,244,556,147 Profit before provision (C=AB) 6,754,941,483 4,614,658,771 Provision for loans and advances/investments 13.1 General provision 144,200, ,685,000 Specific provision 1,500,000, ,500,000 1,644,200,000 1,110,185,000 Provision for offbalance sheet items ,950,000 38,300,000 Revarsal of provision for diminution in value of investments 36 (16,444,985) Other provisions 1,000,000 14,409,000 Total provision (D) 1,831,705,015 1,162,894,000 Total profit before tax (CD) 4,923,236,468 3,451,764,771 Provision for taxation 37 Current 2,145,600,000 1,581,579,531 Deferred 14,500,000 2,160,100,000 1,581,579,531 Net profit after tax 2,763,136,468 1,870,185,240 Appropriations Statutory reserve ,647, ,353,200 General reserve 984,647, ,353,200 Retained surplus 18 1,778,489,174 1,179,832,040 Earnings per share (par value 100) Notes The annexed notes 1 to 41 form an integral part of these financial statements. Chairman Vice Chairman Director Managing Director As per our report of same date. Dhaka, 20 February 2011 Annual Report Auditors Rahman Rahman Huq Chartered Accountants 97

100 Southeast Bank Limited Statement of Changes in Equity for the year ended 31 December 2010 Particulars Paid up capital () Statutory reserve () Share premium () Revaluation reserve () Other reserves () Retained earnings () Total () Balance as at 1 January ,852,197,800 1,975,251, ,930,025 1,249,249, ,854, ,790,957 7,357,274,431 Statutory reserve 690,353,200 (690,353,200) Revaluation reserve 2,460,959,271 2,460,959,271 Issue of bonus share 570,439,500 (485,930,025) (84,509,475) Cash dividend (427,829,670) (427,829,670) Adjustment of deferred tax liabilities 26,325,015 26,325,015 Diminution in value of investments 72,263,000 72,263,000 Transfer to SEBL Foundation (30,000,000) (30,000,000) Net profit for the year 1,870,185,240 1,870,185,240 Balance as at 31 December ,422,637,300 2,665,605,000 3,710,209, ,854,046 1,278,871,867 11,329,177,287 Statutory reserve 984,647,294 ( 984,647,294) Revaluation reserve (558,481,304) (558,481,304) Issue of bonus share 1,197,923,000 (1,197,923,000) Issue of right share 2,310,280,100 1,386,168,060 3,696,448,160 Exchange equalization reserve (4,204,046) 4,204,046 Transfer to SEBL Foundation (50,000,000) (50,000,000) Transfer to SEBL Employees' welfare fund (35,000,000) (35,000,000) Net profit for the year 2,763,136,468 2,936,136,468 Balance as at 31 December ,930,840,400 3,650,252,294 1,386,168,060 3,151,727, ,650,000 1,778,642,087 17,145,280, Annual Report 20 10

101 A) Cash flows from operating activities: Southeast Bank Limited Cash Flow Statement for the year ended 31 December 2010 Notes Interest receipts 11,716,929,142 10,509,289,650 Interest payments (8,341,947,605) (7,425,614,632) Dividends receipts 35,198,093 15,500,611 Fee and commission receipts 1,700,994,440 1,644,226,192 Recoveries on Loans previously writtenoff 25,100,439 3,827,501 Payments to employees (739,478,337) (535,222,578) Payments to suppliers (100,981,726) (68,951,459) Income taxes paid (1,870,473,293) (1,405,698,677) Receipts from other operating activities ,443, ,251,336 Payments for other operating activities 39 (728,450,427) (579,529,930) Operating profit before changes in operating assets and liabilities (i) 2,112,333,802 2,347,078,014 Increase/decrease in operating assets and liabilities: Sale of trading securities 10,319,595,939 2,195,701,194 Purchase of trading securities (7,888,084,519) (1,486,681,267) Loans and advances to customers (14,955,042,294) (17,216,312,810) Other assets (3,581,984,237) (737,255,105) Deposits from other banks 714,616,705 (1,300,156,889) Deposits from customers 11,821,632,149 27,536,758,170 Other liabilities (728,773,956) (511,880,820) Cash (used in)/received from operating assets and liabilities (ii) (4,298,040,213) 8,480,172,473 Net cash (outflow)/inflow from operating activities (i+ii) (2,185,706,411) 10,827,250,487 B) Cash flows from investing activities Proceeds from sale of securities 117,665,845,085 12,837,225,250 Payment for purchase of securities (119,632,611,805) (20,966,627,782) Purchase of fixed assets (259,333,841) (675,645,178) Sale of fixed assets 4,057, ,157 Net cash inflow/(outflow) from investing activities (2,222,042,783) (8,804,514,553) C) Cash flows from financing activities: Payment of dividend (427,829,670) Payment against lease obligation (16,191,990) (29,122,069) Receipts from issue of right shares 3,696,448,160 Net cash flow from financing activities 3,680,256,170 (456,951,739) D) Net (decrease)/increase in cash and cash equivalents (A+B+C) (727,493,024) 1,565,784,195 E) Cash and cash equivalents at beginning of the year 12,844,289,866 11,278,505,671 F) Cash and cash equivalents at end of the year (D+E) 12,116,796,842 12,844,289, Cash and cash equivalents at end of the year represents Cash in hand (including foreign currencies) 826,992, ,493,449 Balance with Bangladesh Bank and its agent bank (including foreign currencies) 6,468,590,498 5,413,864,130 Balance with other banks and financial institutions 3,031,107,119 1,122,345,917 Money at call and on short notice 509,500, ,700,000 Treasury bills 1,276,504,519 5,506,036,370 Prize bond 4,102,600 5,850,000 12,116,796,842 12,844,289,866 Annual Report

102 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Reporting entity 1.1 Status of the Bank Southeast Bank Limited ("the Bank") is a scheduled commercial bank in the private sector established under the Bank Companies Act 1991 and incorporated in Bangladesh as a public limited company to carry out banking business in Bangladesh. The registered office of the Bank located at Eunoos Trade Centre 5253, Dilkusha Commercial Area (Level 2,3 &16), Dhaka1000. The consolidated financial statements of the Bank as at and for the year ended 31 December 2010 comprise the Bank and its subsidiary (together referred to as the Group and individually as Group entities ). 1.2 Principal activities of the Bank The Bank has 76 branches, with no overseas branch as on 31 December Except 5 (five) branches of Islamic banking the rest 71 branches run on commercial conventional basis, of which 15(fifteen) agricultural branches are located across the country. The Bank offers services for all commercial banking needs of the customers, which includes deposit banking, loans and advances, export import financing, inland and international remittance facility etc. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company. The Bank operates Islamic banking in 5 branches designated for the purpose in complying with the rules of Islamic Shariah the modus operandi. The bank has one subsidiary for its merchant banking operation (For details see note 1.5). 1.3 Islamic banking The Bank obtained the Islamic Banking branches permission vide letter no. BRPD(P)745(22)/ dated 28 June 2003, BRPD(P)745(22)/ dated 9 May 2004 and BRPD(P)745(22)/ dated 13 October The Islamic banking branches are governed under the rules and regulations of Bangladesh Bank. 1.4 OffShore Banking In order to cater the varied financial needs of 100% foreign owned/joint venture industrial units and foreign entities located in Export Processing Zones of the country, The Bank obtained OffShore Banking License on 24th June 2008 vide letter no. BRPD(P3)744(98)/ from Bangladesh Bank. Presently the Bank has 2 (two) offshore banking units one at Dhaka Export Processing Zone and the other at Chittagong Export Processing Zone. Offshore banking unit is governed under the rules and regulations of Bangladesh Bank. 1.5 Southeast Bank Capital Services Limited Southeast Bank Capital Services Limited is a subsidiary of Southeast Bank Limited which was incorporated on 23 September 2010 and commenced its operation from 1 December The Bank has transferred its Merchant Banking operation to the newly formed subsidiary company in pursuance of the direction of Bangladesh Bank vide DOS Circular No. 4 dated 15 June The principal activities of the subsidiary company is to provide quality services to the prospective institutional and individual investors in the Capital Market. It is decisively providing the following services: i) Portfolio Management Services ii) Underwriting of Share iii) Issue Management Services etc. Due to separation of the Bank's merchant banking unit opearation the following assets and liabilities were transferred to Southeast Bank Capital Services Limited: i) Cash at bank ii) Margin loan iii) Fixed assets 100 Annual Report 20 10

103 Southeast Bank Limited and it s subsidiary Notes to the Financial Statements as at and for the year ended 31 December Basis of preparation of the financial statements 2.1 Statement of compliance The consolidated financial statements of the Group and the financial statements of the Bank are made up to 31 December each year and are prepared in accordance with the First Schedule (Sec. 38) of the Bank Companies Act 1991 as amended by the BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank Circulars, International Financial Reporting Standards (IFRSs) as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other prevailing laws and regulations applicable in Bangladesh. The financial statements of the Islamic banking branches has also been prepared as per Bank Companies Act 1991, Bangladesh Financial Reporting Standards (BFRSs) and other prevailing laws and regulations applicable in Bangladesh A separate balance sheet and profit and loss account are shown in Annexure I and I.1 and the figures appearing in the annexure have been converted into relevant heads of financial statements under conventional banking for consolidation and incorporation in these financial statements. The consolidated financial statements were approved by the Board of Directors on 20 February Basis of measurement The financial statements of the Bank have been prepared on the historical cost basis except for the following: Government Treasury Bills and Bonds designated as 'Held for Trading (HFT)' at present value using marking to market concept with gain crediting revaluation reserve. Government Treasury Bills and Bonds designated as 'Held to Maturity (HTM)' at present value using amortisation concept 2.3 Basis of consolidation The consolidated financial statements include the financial statements of Southeast Bank Limited and its subsidiary Southeast Bank Capital Services Limited, made up to the end of the financial year. The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard 27: Consolidated and Separate Financial Statements. The consolidated financial statements are prepared to a common financial year ended 31 December Figures in the comparative were not consolidated amounts as there was no subsidiary in 2009 to consolidate. Subsidiary Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or indirectly, to govern the financial and operating policies of an enterprise. The financial statements of subsidiary are included in the consolidated financial statements from the date that control effectively commences until the date that the control effectively ceases. Subsidiary company is consolidated using the purchase method of accounting. Transactions eliminated on consolidation Intragroup balances, and income and expenses (except for foreign currency transaction gains or losses) arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 2.4 Functional and presentation currency These financial statements are presented in Bangladesh (Tk) which is the Bank's functional currency. Except as otherwise indicated, financial information presented has been rounded to the nearest. Annual Report

104 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Use of estimates and judgements The preparation of the consolidated financial statements in conformity with BFRSs requires management to make judgements, 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 these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are described in notes and Foreign currency conversion Transactions in foreign currencies are translated into the respective functional currency of the operation at the spot exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated into the functional currency at the spot exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the spot exchange rate at the end of the period. Nonmonetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss. Nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. 2.7 Reporting period These financial statements cover one calendar year form 1 January to 31 December Cash flow statement Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard7 " Statement of Cash Flows" under direct method as recommended in the BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank. 2.9 Statement of Changes in Equity The Statement of changes in equity reflects information about the increase or decrease in net assets or wealth Liquidity Statement The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term which has been given in the Statement Adoption of new accounting standards Adoption of new accounting standards with effective from 1 January 2010 the Group/Bank has adopted the following Bangladesh Financial Reporting Standards: i) BFRS 4 : Insurance Contracts ii) BFRS 7 : Financial Instruments: Disclosures iii) BFRS 8 : Operating Segments iv) BAS 32: Financial Instruments: Presentation v) BAS 39 : Financial Instruments: Recognition and Measuremenrs 102 Annual Report 20 10

105 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Significant accounting policies The accounting policy set out below have applied consistently to all periods presented in these consolidated financial statements and those of the Bank, and have been applied consistently by the group entities except as explain in note Assets and basis of their valuation Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and its agent bank, balance with other banks and financial institutions, money at call and on short notice, investments in treasury bills and prize bond Investments All investment securities are initially recognised at cost, including acquisition charges associated with the investment. Premiums are amortised and discounts are accredited. Held to Maturity Investments which have, 'fixed or determinable payments' and are intended to be held to maturity are classified as 'Held to Maturity'. Held for Trading Investment classified in this category are acquired principally for the purpose of selling or repurchasing in short trading or if designated as such by the management. Revaluation As per the DOS Circular letter no. 5 dated 26 May 2008, HFT securities are revaluated each week using Marking to Market concept and HTM securities are amortised once a year according to Bangladesh Bank guidelines. Value of investments has been shown as under: Government Treasury Bills and Bonds (HFT) Government Treasury Bills and Bonds (HTM) Prize Bond Unquoted shares Quoted shares At present value (using marking to market concept) At present value (using amortisation concept) At cost At cost or book value of the last audited balance sheet whichever is lower At cost or market value whichever is lower at balance sheet date. Details are shown in Note Loans, Advances/Investments and provisions a) Loans and advances of conventional Banking/Investments of Islamic Banking branches are stated in the Balance Sheet on gross value. b) Provision for loans and advances is made on the basis of periodical review by the management and of instructions contained in Bangladesh Bank BRPD circulars no. 16 of 6 December 1998, 9 of 14 May 2001, 9 and 10 of 20 August 2005, 5 of 5 June 2006, 8 of 7 August 2007, 10 of 18 September 2007, 5 of 29 April 2008 and BRPD Circular No. 32 of 27 October The rates of provision for different classifications are given below: Annual Report

106 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Particulars Rate General provision on: All unclassified loans and advances/investments except followings 1% Small and medium enterprise financing 2% Consumer finance for house building loan and loans for professional setup 2% Loan to BHs/MBs/SDs against shares 2% Other consumer finance 5% Special mention account 5% Specific provision on: Substandard loans and advances/investments 20% Doubtful loans and advances/investments 50% Bad/loss loans and advances/investments 100% c) Loans and advances are written off to the extent that i) there is no realistic prospect of recovery, and ii) against which legal cases are filed and classified as bad loss for more than five years as per guidelines of Bangladesh Bank. These write off however will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such write off accounts are maintained and followed up. d) Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered. Details are shown in Note Fixed assets and depreciation Recognition and measurement Items of fixed assets excluding land are measured at cost/revaluation less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost/revaluation. Cost includes expenditure that are directly attributable to the acquisition of asset and bringing to the location and condition necessary for it to be capable of operating in the intended manner. Subsequent costs The cost of replacing part of an item of fixed assets is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the daytoday servicing of fixed assets are recognised in profit or loss as incurred. Depreciation Depreciation is charged on reducing balance method. In case of acquisition of fixed assets, depreciation is charged from the month of acquisition, whereas depreciation on disposed off fixed assets is charged up to the month prior to the disposal. Asset categorywise depreciation rates are as follows: 104 Annual Report 20 10

107 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Category of assets Rate of depreciation Land Nil Building 4% Furniture and fixtures 10% Office appliances 20% Electrical appliances 20% Motor vehicles 20% Gain or loss on sale of fixed assets are recognised in profit and loss account as per provision of BAS 16 "Property, plant and equipments" Leased assets lessee Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and, except for investment property, the leased assets are not recognised in the Group s Balance sheet. Investment property held under an operating lease is recognised in the Group s Balance sheet at its fair value. 3.2 Liabilities and basis of their valuation Borrowings from other banks, financial institutions and agents Borrowings from other banks, financial institutions and agents includes refinance from Bangladesh Bank against agrobased credit, SME Loan etc., interestbearing borrowings against securities from Bangladesh Bank and call borrowing from other banks. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in Note Deposits and other accounts Deposits and other accounts include non interestbearing current deposit redeemable at call, interest bearing on demand and shortterm deposits, savings deposit and fixed deposit. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in Note Other liabilities Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest suspense, accrued expenses, obligation under finance lease etc. Other liabilities are recognised in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance 1984 and internal policy of the Bank. Details are shown in Note Capital/shareholders' equity Authorised capital Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of Association. Paid up capital Paid up capital represents total amount of shareholder capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at shareholders meetings. In the event of a windingup of the Bank, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in Note Annual Report

108 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Statutory reserve Statutory reserve has been 20% of profit before tax in accordance with provisions of section 24 of the Bank Companies Act 1991 until such reserve equal to its paid up capital together with the share premium. Revaluation reserve Revaluation reserve arises from the revaluation of Treasury bills and bonds (HFT & HTM) in accordance with the DOS circular no. 5 dated 26 May 2008 and DOS(SR) 1153/120/2010 dated 8 December The tax effects on revaluation gain are measured and recognised in the financial statements as per BAS 12: Income Taxes. 3.4 Contingent liabilities A contingent liability is A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Bank; or A present obligation that arises from past events but is not recognised because: * it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or * the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated. Contingent assets are not recognised in the financial statements as this may results in the recognition of income which may never be realised. 3.5 Revenue recognition Interest income "Interest on loans and advances is calculated on daily product basis, but charged and accounted for on quarterly basis. Interest on loans and advances ceases to be taken into income when such advances fall into SMA and under classification. It is then kept in interest suspense account. Interest on SMA and classified loans and advances is accounted for on a cash receipt basis. Interest is not charged on bad and loss loans as per guideline of Bangladesh Bank. Such interest is kept in separate memorandum account. Profit on investment (Islamic Banking) Markup on investment is taken into income account proportionately from profit receivable account. Overdue charge/compensation on classified investments is transferred to profit suspense account instead of income account. Investment income Income on investments is recognised on accrual basis. Investment income includes discount on treasury bills, interest on treasury bonds and fixed deposit with other banks. Capital gain on investments in shares is also included in investment income. Capital gain is recognised when it is realised. Fees and commission income The Bank earns fees and commissions from diverse range of services provided to its customers. Fees and commission income is recognised on a realisation basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions. 106 Annual Report 20 10

109 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Interest paid on borrowing and other deposits (Conventional banking) Interest paid and other expenses are recognised on accrual basis. Profit Shared on deposits (Islamic Banking) Profit shared to mudaraba deposits is recognised on accrual basis as per provisional rate. 3.6 Employee benefits Provident Fund Provident fund benefits are given to the staff of the Bank in accordance with the registered provident fund rules. The commissioner of Income Tax, Large Tax Payers Unit, Dhaka has approved the Provident Fund as a recognized fund within the meaning of section 2(52) read with the provisions of part B of the First Schedule of Income Tax Ordinance The fund is operated by a Board of Trustees consisting of 6 (six) members of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as subscription of the fund. The Bank also contributes equal amount to the fund. Contributions made by the Bank are charged as expense. Interest earned from the investments is credited to the members' account on half yearly basis. Members are eligible to get both the contribution after 5 (five) years of continuous service from the date of their membership Gratuity Fund Gratuity fund benefits are given to the staff of the Bank in accordance with the approved gratuity fund rules. National Board of Revenue has approved the gratuity fund as a recognized gratuity fund with effect from December The fund is operated by a Board of Trustees consisting of 7 (seven) members of the Bank. Employees are entitled to gratuity benefit after completion of minimum 7 (seven) years of service in the Bank. Actuarial valuation is not considered essential since amount payable at the date of balance sheet is recognised and accounted for as at that date based on actual rate. The gratuity is calculated on the basis of last basic pay and is payable at the rate of one month's basic pay for every completed year of service. The amount so calculated are transferred to the fund and charged to expenses of the Bank Superannuation Fund The Bank operates a Superannuation Fund covering all its eligible employees. The Fund is operated by a separate Board of Trustees. 3.7 Provisions and accrued expenses In compliance with BAS37, provisions and accrued expenses are recognized in the consolidated financial statements when the Group has a legal or constructive obligation as a result of past event, it is probable that an outflow of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 3.8 Provision for OffBalance Sheet Exposures In compliance with Bangladesh Bank guidelines OffBalance Sheet items have been disclose under contingent liabilities. As per BRPD Circular No.10 dated 18 September 2007, the Bank is required to maintain 1% against OffBalance Sheet Exposures. Details are shown in note Provision for Nostro Accounts According to guideline of Foreign Exchange Policy Department of Bangladesh Bank, Circular No. FEOD (FEMO)/01/ dated 13 September 2005, Bank is not required to make provision regarding the unreconciled debit balance as at Balance Sheet date since there was no debit entries more than three month. Annual Report

110 3.10 Taxation Southeast Bank Limited and it s subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax relating to unrealised surplus on revaluation of held to maturity (HTM) securities and land and buildings are recognised directly in revaluation reserve as a part of equity and is subsequently recognised in profit and loss account on maturity of the security and disposal of land and buildings. Details are shown in note Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees Reconciliation of interbank/interbranch account Books of accounts with regard to interbank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material differences which may affect the financial statements significantly. Unreconciled entries in case of interbranch transactions as at the reporting date are not material Risk management Risk is an integral part of the banking business and the Bank aims at delivering superior shareholder value by achieving an appropriate tradeoff between risk and return. The Bank s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. The Bank s risk management policy defines the relationship between the risk management philosophy, process and procedures. Developing and communicating the risk policy is an important step in ensuring that risk is managed effectively at all levels of the Bank. The framework under which the Risk Management Unit (RMU) would work is not one discrete policy, strategy or document, rather it is composed of all the structure, policies, strategies and procedures within the Bank that deal with risk management. The essential elements of an effective risk management framework are: a) Clearly defined management responsibility and accountability. b) Clear separation of responsibilities and reporting lines between risk management functions, business lines and support functions to avoid conflict of interests. 108 Annual Report 20 10

111 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 c) Detailed risk controls for each business line. d) A comprehensive and independent internal audit or compliance process for reviewing and testing internal controls and risk management systems. e) Strong risk governance and stewardship by the Board, which demonstrates an understanding of all major risks. The risk management of the Bank covers following six core risk areas: i) Credit Risk ii) Foreign Exchange Risk iii) Asset Liability Management iv) Money Laundering Risk v) Internal Control & Compliance vi) Information and communication technology Credit risk Credit risk is the possibility that a borrower or counter party will fail to meet agreed obligations. Managing credit risk for efficient management of a bank has become one of the most crucial tasks. Given the fast changing, dynamic global economy and the increasing pressure of globalization and liberalization it is essential that banks have robust credit risk management policies and procedures that are sensitive and responsive to this changes. A thorough assessment is done before sanction of any credit facility at Credit Risk Management Division of the Bank. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facility etc. The assessment process starts at Branch Credit Division by the Officer and ends at Credit Risk Management Division when it is approved/declined by the competent authority. Credit approval authority has been partially delegated to the individual executives/credit Committee. Proposals beyond their delegation are approved/declined by the Board. In determining Single borrower/large loan limit, the instruction of Bangladesh Bank is strictly followed. Internal Audit is conducted at periodical intervals to ensure compliance of the Bank s and Regulators' policies Foreign Exchange Risk Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The Bank has a Functional Instruction Manual covering foreign exchange risk policies and investment policy. The Bank has also developed different strategies to handle foreign exchange risk by setting limits on Net Open Positions by currencies, mismatch limits by currency and time buckets of Forward Foreign Exchange transactions, overall gross limits for FWD transaction, Maximum Loss limits per day and per month, as well as Value at Risk limits which are measured and monitored. All treasury functions are disseminated and are separately overseen by treasury front office, mid office and back office. The front office is involved only in dealing activities, the back office is responsible for passing of their entries in the books of account and the mid office is responsible for verification of the deals. All foreign exchange transaction are revalued at MarktoMarket rate as per the directive of Bangladesh Bank. All Nostro accounts are reconciled on a monthly basis and outstanding entry beyond 30 days is reviewed by the management for its settlement Asset Liability Management Changes in market liquidity threaten the survival of a financial institution. As such, emphasis has been given on ALM so that the level of the balance sheet risks are effectively managed, appropriate policies and procedures are established to control and limit these risks and proper resources are available for evaluating and controlling these risks. The Asset Liability Committee (ALCO) of the Bank monitors Balance Sheet risk and liquidity risk of the Bank. Asset Liability Committee (ALCO) reviews country s overall economic position, the Bank s Liquidity position, ALM Ratios, Interest Rate Risk, Deposit Advance Growth, Cost of Deposit & yield on Advance, Market Interest Rate, Loan loss provision adequacy and deposit and lending pricing strategy. Annual Report

112 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Money Laundering Risk Money Laundering is the participation in any transaction that seeks to conceal or disguise the nature or origin of funds/assets derived from illegal activities, for example, fraud, forgery, corruption & bribery, trading of illegal arms, drug trafficking, smuggling, theft or burglary, extortion, etc. It is a vital process of making the crime worthwhile and provides the fuel for drug dealers, smugglers, terrorists, illegal arms dealers, corrupt public officials and others to operate and expand their criminal activities. Southeast Bank Ltd has developed and enforced an AntiMoney Laundering and Anti Terrorist Financing Program, which can deter criminals from using their facilities for money laundering, in order to ensure that the Bank complies with the obligations under the law. This Program includes establishing adequate procedures for customer due diligence, reporting, record keeping, internal control, risk management & communication in order to forestall & prevent operations related to money laundering or financing of terrorism. The elements of the program are communicated to all levels of personnel to ensure a thorough understanding of individual responsibilities; the prompt identification of unusual activity to senior management and maintaining record retention requirements set forth by the law of the Country Internal Control & Compliance Effective internal control is essential to a bank for management of risk and it is the foundation of safe and sound banking. A good system of internal controls helps the management to safeguard the bank s resources. The Board of Directors and Management of Southeast Bank Limited (SEBL) take the plan of the Bank and adopt all the methods, policies & procedures as per standard guidelines with a view to continually recognize and assess all of the material risks that could adversely affect the achievement of the bank s goals. The system of Internal Control of SEBL has been designed with intention to provide reasonable assurance in achieving objectives against material misstatement or loss and ensure the: i) reliability of the financial information; ii) effectiveness of operations; iii) compliance with applicable laws and regulations; iv) adherence to management policies; v) safeguarding of Bank s Assets; vi) prevention and detection of fraud and errors; and vii) accuracy and completeness of the accounting records. Board of Directors, Board Audit Committee, Senior Management, each Division of Head Office including Internal Control & Compliance Division and Branches of SEBL are discharging their role on the issue of managing the risk of Internal Control & Compliance effectively Information and Communication Technology Information assets are critical to the services provided by the Bank to its customers. Protection and maintenance of these assets are critical to its sustainability. Today s ICT infrastructure is more often logical and virtual in nature rather than physical. It requires logical approach to define critical functions for assessing threats and vulnerabilities and consequences of loss, degradation, or compromise of these functions rather than physical assets or locations. The Bank has already taken initiatives to protect the information from unauthorized access, modification, disclosure and destruction to protect customers interest. The Bank has already introduced number of logical protection levels between web layer and its core application and database layer. In general, ICT risk management is embedded in organizational internal control and audit which are widely used as part of the management control for risk management in organization. This management control emphasizes both business control and technological control which support business requirements and governance. Business and technological controls are involved in the policies, processes, systems and people in the organization. The Bank has already revised its own ICT policies on ICT Training, Problem Management, Data Encryption, Business Continuity, Backup and Restore, and SLA (Service Level Agreement). The topics are very detailed and are closely in line with the ICT guideline of Bangladesh Bank. The Bank has developed a critical human resource backup plan with detail job description for each IT personnel, segregation of duties for IT tasks and system support in respect of severity. Further to safeguard the bank has taken insurance coverage for its entire ICT asset from a reputed insurance company. 110 Annual Report 20 10

113 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Compliance of Bangladesh Financial Reporting Standard (BFRS) Name of the standards Firsttime adoption of Bangladesh Financial Reporting Standards Share based Payment Business Combinations Insurance Contracts Noncurrent Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Financial Instruments: Disclosures Operating Segments Presentation of Financial Statements Inventories Statement of cash flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Income Taxes Property, Plant and Equipment Leases Revenue Employee Benefits Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Consolidated and Separate Financial Statements Investments in Associates Interests in Joint Ventures Financial Instruments: Presentation Earnings Per Share Interim Financial Reporting Impairments of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Financial Instruments: Recognition and Measurement Investment property Agriculture Ref. BFRS1 BFRS2 BFRS3 BFRS4 BFRS5 BFRS6 BFRS7 BFRS8 BAS1 BAS2 BAS7 BAS8 BAS10 BAS11 BAS12 BAS16 BAS17 BAS18 BAS19 BAS20 BAS21 BAS23 BAS24 BAS26 BAS27 BAS28 BAS31 BAS32 BAS33 BAS34 BAS36 BAS37 BAS38 BAS39 BAS40 BAS41 Status Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Applied with some departure (note ) Not applicable Applied with some departure (note ) Not Applicable Applied Applied Applied Not Applicable Applied Applied Applied Applied Applied Not Applicable Applied Applied Applied Not Applicable Applied Not Applicable Not Applicable Applied with some departure note Applied Applied Applied Applied Not Applicable Applied with some departure see note Not Applicable Not Applicable Annual Report

114 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Disclosure of departures from few requirements of BFRSs due to mandatory compliance of Bangladesh Bank s requirements Bangladesh Bank is the prime regulatory body for banks in Bangladesh. Some requirements of Bangladesh Bank s rules and regulations contradict with those of financial instruments and general provision standards of BFRSs. As such the Bank has departed from those contradictory requirements of BFRSs in order to comply with the rules and regulations of the Bangladesh Bank which are disclosed below along with financial impact where applicable: 1. 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. As such the Bank measures and recognizes investment in quoted and unquoted shares at cost if the year end market value (for quoted shares) and book value (for unquoted shares) are higher than the cost. At the yearend the Bank s market value and book value of investments in quoted and unquoted shares was higher than cost price by Tk. 277 million. However as per requirements of BAS 39 investment in shares falls either under at fair value through profit and loss account or under available for sale where any change in the fair value at the yearend is taken to profit and loss account or revaluation reserve respectively. 2. According to DOS circular no. 05 dated 26 May 2008 and subsequent clarification in DOS circular no. 05 dated 28 January 2009 loss on revaluation of Government securities (Tbill/Tbond) should be charged in profit and loss account, and gain on such revaluation should be recorded under Revaluation Reserve Account. At the year end the company has accumulated revaluation gain of Tk. 1, million for Tbonds. However as per requirement of BAS 39, such Tbills and Tbonds will fall under the category of held for trading and held to maturity where any change in the fair value of held for trading is recognized in profit and loss account, and amortized cost method is applicable for held to maturity using an effective interest rate. 3. As per BRPD circular no. 5 dated 5 June 2006 a general provision at 1% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained. However such general provision cannot satisfy the conditions of provision as per BAS 37. At the year end the Bank has recognized an accumulated general provision of Tk million in the balance sheet under liabilities as per Bangladesh Bank s requirement. 4. As per BRPD circular no. 10 dated 18 September 2007, a general provision at 1% is required to be provided for all offbalance sheet exposures. However such general provision cannot satisfy the conditions of provision as per BAS 37. At the year end the Bank has recognized an accumulated general provision of Tk million in the balance sheet under liabilities as per Bangladesh Bank s requirement. 5. 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 include in a Single Comprehensive Income (OCI) Statement. As such the company does not prepare the other comprehensive income statement. However elements of OCI, if any, are shown in the statements of changes in equity. 6. As per Bangladesh Bank guidelines financial instruments are categorized, recognized and measured differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 have not been made in the accounts. 112 Annual Report 20 10

115 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Credit Rating of the Bank As per the BRPD instruction 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 dated 31 December 2009 Particulars Date of Rating Long term Short term Entity Rating 27Apr10 AA ST2 double A minus (High certainty) (High Safety) 3.16 Correspondence items Correspondence items are maintained to have control over all items of importance and for such transactions where the Bank has only a business responsibility and no legal commitment. Stock of travelers cheques, savings certificates, wage earners bond and others fall under the correspondence items Offsetting Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group has a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under BFRSs, or for gains and losses arising from a group of similar transactions such as in the Group s trading activity General "Figures of previous year have been rearranged, whenever necessary, to conform the current year's presentation." 4. Cash In hand: Local currency 796,113, ,197,415 Foreign currencies 30,878,494 38,296, ,992, ,493,449 Balance with Bangladesh Bank: Local currency 6,120,864,709 5,051,775,889 Foreign currencies 242,354, ,671,909 6,363,219,299 5,318,447,798 Balance with Sonali Bank Limited. (as agent of Bangladesh Bank): Local currency 105,371,199 95,416,332 6,468,590,498 5,413,864,130 7,295,582,604 6,020,357, Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) have been calculated and maintained in accordance with section 33 of Bank Companies Act, 1991, MPD circular nos. 4 and 5 dated 1 December The statutory Cash Reserve Requirement on the Bank's time and demand liabilities at the rate of 6% has been calculated and maintained with Bangladesh Bank in current account and 19% Statutory Liquidity Requirement, including CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both reserves maintained by the Bank, are shown below: Annual Report

116 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December a) Cash Reserve Requirement (CRR) for Conventional Banking 6% (2009: 5%) of average Demand and Time Liabilities: Required reserve 5,774,410,000 4,096,239,550 Actual reserve held 6,326,690,991 5,051,775,889 Surplus 552,280, ,536,339 b) Cash Reserve Requirement (CRR) for Islamic Banking 6% of average Demand and Time Liabilities: Required reserve 391,539,000 Actual reserve held 424,834,444 Surplus 33,295, a) Statutory Liquidity Requirement (SLR) for Conventional Banking 19% (2009: 18%) of required Average Demand and Time Liabilities: Required reserve 18,285,632,000 14,746,462,380 Actual reserve held 23,384,829,469 25,427,964,183 Surplus 5,099,197,469 10,681,501,803 Held for Statutory Liquidity Requirement of Conventional Banking: Cash in hand 766,897, ,493,450 Balance with Bangladesh Bank as per statement 6,326,690,991 5,381,447,798 Balance with agent bank (Sonali Bank Ltd.) as per statement 99,779,395 95,416,332 Government treasury bills 1,276,504,519 5,512,691,126 Government treasury bonds 14,914,956,623 13,894,915,477 23,384,829,469 25,427,964,183 b) Statutory Liquidity Requirement (SLR) for Islamic Banking 11.5 % of required average Demand and Time Liabilities: Required reserve 750,450,000 Actual reserve held 890,520,413 Surplus 140,070,413 Held for Statutory Liquidity Ratio of Islamic Banking: Cash in hand 60,094,165 Balance with Bangladesh Bank as per statement 424,834,444 Balance with agent bank (Sonali Bank Ltd.) as per statement 5,591,804 Government treasury bills Government treasury bonds 400,000, ,520,413 In Bangladesh (Note 5.1) 1,972,298, ,767,997 Outside Bangladesh (Note 5.2) 1,058,808, ,577, In Bangladesh Current account with: Sonali Bank Limited 3,031,107,119 60,720,142 1,122,345,917 54,688,065 Agrani Bank Limited 1,426,229 15,275,576 AB Bank Limited 6,728,716 75,166 13,457 2,816,303 National Bank Limited 2,216, ,476 Janata Bank Limited 2,596,921 2,138,766 Pubali Bank Limited 8,048,037 8,352,609 Rupali Bank Limited 3,137,981 5,019,306 United Commercial Bank Limited 8,719,014 3,045,891 Bangladesh Krishi Bank AlArafah Islami Bank Limited 2,795 3,945 1,407 (161,424) Islami Bank Bangladesh Limited 1,017,963 (103,393) Annual Report 20 10

117 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Bank Asia Limited (165,079) 3,943,421 Shahjalal Islami Bank Limited 550, ,673 One Bank Limited 98,545 99,382 DutchBangla Bank Limited 3,255,964 1,338,522 Jamuna Bank Limited 25,321 2,009,725 Mercantile Bank Limited 89,008 5,504,072 Mutual Trust Bank Limited (2,925,121) Dhaka Bank Limited 1,452 Brac Bank Limited 1,665,011 97,223, ,794,781 Short term deposits account with: 976, ,693 AB Bank Limited 28,003 29,273 Eastern Bank Limited 28, ,174 Uttara Bank Limited 3,555 13,047 EXIM Bank Limited 567, ,953 Sonali Bank Limited 20,118,522 20,362,428 Standard Chartered Bank 3,049,867 2,122,048 DutchBangla Bank Limited 302,313 8,723,600 25,075,102 32,973,216 Fixed deposits with other banks: AB Bank Limited 200,000,000 Dhaka Bank Limited 400,000, ,000,000 Bay Leasing and Investment Limited 300,000, ,000,000 Bangladesh Industrial Finance Company Limited 250,000,000 International Leasing and Financial Services Limited 500,000, ,000,000 Fareast Finance & Investment Limited 50,000,000 Prime Finance & Investment Limited 200,000,000 1,250,000, ,000,000 1,972,298, ,767, Outside Bangladesh Current account Interest bearing : Standard Chartered Bank, New York 75,380,904 11,245,447 Standard Chartered Bank, New York 175,941,057 Citibank, New York 18,980,057 79,517,685 HSBC, New York 24,993, ,079,316 HSBC, PLC London 69,872,782 55,522,881 Mashreq Bank PSC New York 246,905, ,962,332 Wells Fargo Bank, N.A., New York 112,710,060 38,297,211 Citibank AG Frankfurt Germany 11,002,585 25,433,403 Standard Chartered Bank, Kolkata 10,831,283 18,985,301 Arab Bangladesh Bank Ltd., Mumbai 34,449,169 25,372,899 ICICI Bank, Mumbai 43,476,635 44,378,668 JP Morgan Chase Bank, New York 15,707,367 1,974,058 Habib American Bank, New York 23,749,121 45,580,662 Mashreq Bank, Mumbai, India 23,630,032 Mashreq Bank, Mumbai, India 3,440, ,071, ,349,863 Annual Report

118 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Noninterest bearing : Bank of Nova Scotia, Toronto, Canada 3,159,715 1,989,364 United Bank Limited, Karachi 55,474,785 6,166,397 Standard Chartered Bank, Colombo 10,446,227 1,146,974 Standard Chartered Bank, Mumbai (AEB) 23,154,511 1,764,223 Nepal Bangladesh Bank Ltd., Nepal 1,276,113 3,746,775 Bank of Bhutan, Pheuntsholing 1,081, ,265 Bank of Tokyo Mitsubishi, Kolkata 1,786,784 1,749,331 Commerz Bank AG 31,329,842 10,970,625 U. B. A. F., Tokyo 29,472,127 5,796,165 Zuercher Kantonal Bank, Zurich 5,671,874 6,252,988 National Australia Bank Ltd. Melbourne 4,884,290 2,290, ,737,642 42,228,057 1,058,808, ,577, On demand 1,156,032, ,794,781 Not more than three months 1,225,075, ,551,136 More than three months but not more than six months 650,000,000 More than six months but not more than one year 100,000,000 3,031,107,119 1,122,345,917 In Bangladesh Southeast Bank Limited (Note 5.1) 1,972,298, ,767,997 Southeast Bank Capital Services Limited 539,907,204 2,512,205, ,767,997 Less: Inter company balance eliminated 539,907,204 1,972,298, ,767,997 Outside Bangladesh Southeast Bank Limited (Note 5.2) 1,058,808, ,577,920 Southeast Bank Capital Services Limited 1,058,808, ,577,920 3,031,107,119 1,122,345, Money at call and on short notice In bank: 19,500,000 19,700,000 Bank Asia Limited 300,000, ,500,000 19,700,000 International Leasing and Financial Services Limited 80,000,000 Bangladesh Industrial Finance Company Limited 10,000,000 10,000,000 Prime Finance & Investment Limited 100,000,000 Premier Leasing International Limited 50,000,000 Phonix Leasing Company Limited 30,000,000 Bay Leasing and Investment Limited 80,000, ,000, ,000, ,500, ,700, Annual Report 20 10

119 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Investments Government securities Conventional Banking (Note 7.1.1) 16,203,461,142 19,407,606,604 Islamic Banking (Note 7.2.1) 400,000,000 16,603,461,142 19,407,606,604 Others Conventional Banking (Note 7.1.2) 273,872,881 1,942,627,246 Islamic Banking (Note 7.2.2) 1,450,313,250 1,724,186,131 1,942,627, Conventional Banking 18,327,647,273 21,350,233, Government Securities 28 days Treasury Bills 91 days Treasury Bills 648,356,492 3,475,576, days Treasury Bills 1,033,294, ,129, days Treasury Bills 1,711,243,193 1,130,985,385 2 Years Treasury Bills 5 Years Treasury Bills 3,392,894,097 5,512,691,126 Add: Reverse repo with other banks 3,392,894,097 5,512,691,126 Less: Repo with other banks 2,116,389,578 1,276,504,519 5,512,691,126 Government Bonds Prize Bonds 4,102,600 5,850,000 T & T Treasury Bond 196,273,800 4,102, ,123,800 Bangladesh Government Treasury Bond 17,584,154,526 15,564,891,678 Less: Repo with other banks 2,661,300,503 1,872,100,000 14,922,854,023 16,203,461,142 13,692,791,678 19,407,606, Others Shares in listed companies 18,172,881 1,825,647,346 Shares in unlisted companies 260,000, ,979, ,172,881 2,020,627,246 Less: Provision for diminution in the market value of shares 4,300,000 78,000, ,872,881 1,942,627, Islamic Banking Government Securities Bangladesh Government islamic bond 400,000, Others Shares in listed companies 1,070,514,010 Shares in unlisted companies 407,999,240 1,478,513,250 Provision for diminution in the market value of shares (28,200,000) 1,450,313, Held for trading (HFT) 11,508,624,726 16,344,376,400 Held to maturity (HTM) 5,090,733,815 2,861,049,165 Other securities 1,728,288,732 2,144,808,285 18,327,647,273 21,350,233,850 BGTB (HTM) of Tk 12,000,000 is held in Bangladesh Bank as Lien for T.T. discounting facilities. Annual Report

120 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Maturitywise grouping On demand 4,102,600 1,942,627,246 Not more than three months 1,924,187,721 4,264,205,360 More than three months but not more than one year 1,476,504,305 1,580,461,138 3,232,007,202 5,479,460,143 11,690,845,445 8,083,479,963 18,327,647,273 21,350,233, Cost and market value of investments Government securities Cost price Market price Market price Conventional Banking Treasury Bills 1,270,375,378 1,276,504,519 5,512,691,127 T & T Treasury Bond 196,273,800 Bangladesh Government Treasury Bond 14,327,299,874 14,922,854,023 13,692,791,677 Prize Bonds 4,102,600 4,102,600 5,850,000 15,601,777,852 16,203,461,142 19,407,606,604 Islamic Banking Bangladesh Government islamic bond 400,000, ,000,000 16,001,777,852 16,603,461,142 19,407,606, Others Conventional Banking Investment in Shares & Bonds Particulars Shares in listed companies 13,956,402 18,172,881 1,825,647,346 Shares in unlisted companies 260,000, ,000, ,979, ,956, ,172,881 2,020,627,246 Provision for diminution in the market value of shares (4,300,000) (78,000,000) 273,872,881 1,942,627,246 Islamic Banking Shares in listed companies 1,319,565,179 1,070,514,010 Shares in unlisted companies 407,999, ,999,240 1,727,564,419 1,478,513,250 Provision for diminution in the market value of shares (28,200,000) 1,450,313,250 1,724,186,131 1,942,627,246 Shares in listed companies Investments have been recorded at cost and adequate provision for probable future losses as per Bangladesh Bank guidelines. Market value of shares has been determined on the basis of the value of shares at the last trading day of the year. Details are shown in AnnexureD 118 Annual Report 20 10

121 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Market price Cost price Cost price 7.6 Sector wise investment Shares in Listed Companies Banks and NBFIs 323,417, ,984,811 1,063,547,526 Insurance Companies 284,065, ,264, ,692,426 Fuel and Power Companies 111,801, ,239,936 Manufacturing & Others 614,236, ,197, ,407,394 1,333,521,522 1,088,686,891 1,825,647,346 Shares in UnListed Companies Banks and NBFIs 20,000,000 20,000,000 46,814,000 Fuel and Power Companies 87,000,000 87,000,000 Manufacturing 200,000, ,000, ,000,000 Others 360,999, ,999,240 48,165, ,999, ,999, ,979,900 1,756,686,131 2,020,627,246 Provision for diminution in the market value of shares (32,500,000) (78,000,000) 1,724,186,131 1,942,627,246 statements as per provision of BRPD Market price of investments whose prices decreased as on 31 December (Provision to Name of the Company Market price Cost price be required) Rupali Bank Limited 6,268,765 9,074,723 2,805,958 KPCL 6,756,000 8,394,665 1,638,665 Summit Power Ltd. 29,421,000 32,112,348 2,691,348 Titas Gas Trans & Dist. Co. Ltd. 75,624,300 80,732,923 5,108,623 Beximco Limited 15,575,000 16,269, ,238 Trust 1st MF 7,656,000 9,068,228 1,412,228 Lafarge Surma Cement Limited 272,460, ,381,578 17,921, ,761, ,033,703 32,272,263 Actual provision 32,500, , Repo and Reverserepo Repo as on 31 December 2010 Counter party name Agreement date Reversal date Amount Bangladesh Bank 30Dec10 2Jan11 4,557,606,272 Standard Chartered Bank 28Dec10 4Jan11 255,850,384 4,813,456,656 Annual Report

122 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Transactions of Repo and Reverserepo during the year 2010 Minimum Maximum Daily average outstanding outstanding outstanding Securities sold under repo i) With Bangladesh Bank 255,532,535 6,837,714, ,572,016 ii) With Other Bank & FIs 100,000,000 1,000,000,000 65,897,839 Securities purchase under reverse repo i) With Bangladesh Bank ii) With Other Bank & FIs 76,803,439 1,499,831,011 25,591,216 7 (a) Consolidated Investments Government securities Southeast Bank Limited 16,603,461,142 19,407,606,604 Southeast Bank Capital Services Limited 16,603,461,142 19,407,606,604 Others Southeast Bank Limited 1,724,186,131 1,942,627,246 Southeast Bank Capital Services Limited 541,423,964 2,265,610,095 1,942,627,246 18,869,071,237 21,350,233, Loans and advances/investments Loans, cash credit, overdrafts etc./investments (Note 8.1) 86,880,309,365 73,466,742,724 Bills purchased and discounted (Note 8.14) 5,572,306,128 4,030,830,475 92,452,615,493 77,497,573, Loans, cash credit, overdrafts etc./investments In Bangladesh Conventional Banking Cash credit and overdrafts 20,270,923,124 14,630,464,999 Demand loan 2,338,351,118 2,262,183,637 Time loan 8,246,310,483 11,598,808,511 Term loan 27,991,248,054 24,982,363,453 Consumer credit scheme 221,556, ,214,801 Bills against letter of credit (BLC) 951,307, ,343,375 Loan against trust receipt (LTR) 19,952,749,783 12,072,275,458 Export Development Fund (EDF) 957,178, ,475,856 Advances Packing credit (PC) 1,114,041, ,519, ,831, ,869,198 Loan Credit card 427,787, ,261,434 Education Loans 137, ,364 27,015,776 21,803,098 Portfolio Margin Loan 1,969,179,889 Loan against foreign bills 77,029,201 6,748,245 Loan against Cash Incentive 17,782,749 82,738,250,840 69,908,689, Annual Report 20 10

123 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Islamic Banking BaiMuajjal Investment 1,883,633,679 1,315,720,799 Murabaha Investment 228,762, ,547,196 Hire purchase Investment 1,510,030,936 1,012,574,568 Izarah Investment 119,461, ,514,748 Quard against MTDR 400,169, ,696,070 4,142,058,525 3,558,053,381 Outside Bangladesh 86,880,309,365 73,466,742,724 86,880,309,365 73,466,742, Performing loans and advances/investments Gross loans and advances/investments 92,452,615,493 77,497,573,199 Nonperforming loans and advances/investments (3,938,492,848) (2,892,999,553) 88,514,122,645 74,604,573, Maturitywise grouping On demand 3,341,467,493 4,231,362,199 Less than three months 29,109,474,000 23,573,383,000 More than three months but less than one year 31,522,946,000 24,973,906,000 18,857,218,000 15,634,707,000 9,621,510,000 9,084,215,000 92,452,615,493 77,497,573, Concentration of loans and advances Advances to allied concerns of directors 24,578,165 Advances to chief executive and other senior executives 29,500,548 47,912,000 Advances to customers' group: Advances to large and medium industries 41,672,900,000 32,061,100,000 Advances to small and cottage industries 115,300, ,100,000 Commercial Lending 34,428,800,000 30,846,100,000 Export Financing 4,369,600,000 2,684,900,000 House Building Loan 4,804,300,000 3,518,000,000 Consumer Credit Scheme 221,556, ,300,000 Other Loans and Advances 6,810,658,945 7,980,583,034 Details of large loan/investments 92,452,615,493 77,497,573,199 As at 31 December 2010 there were eighteen (2009: thirty two) clients with whom amount of outstanding loans and advances exceeded 10% of the total capital of the Bank. Total capital of the Bank was Tk 17,095.9 million as at 31 December 2010 (Tk 9, million in 2009). Details are shown in AnnexureE. 8.5 Sectorwise allocation of loans and advances Industry (jute, textiles, garments, chemicals, cements, etc.) Export credit Commercial credit Small and cottage industries Miscellaneous % of total 0.22% 22.17% 22.90% 4.73% 37.24% 0.12% 12.62% % ,000,000 20,500,900,000 21,172,000,000 4,369,600,000 34,428,800, ,300,000 11,667,015,493 92,452,615, % of total 0.35% 23.79% 17.58% 3.46% 39.80% 0.15% 14.86% % ,500,000 18,437,400,000 13,623,700,000 2,684,900,000 30,846,100, ,100,000 11,518,873,199 77,497,573,199 Annual Report

124 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Industrywise Loans and Advances (Industrial Loan) Textile and Garments Industries including Spinning Industries 23,208,000,000 19,008,100,000 Food and allied Industries 3,871,800,000 2,067,900,000 Pharmaceutical Industries 351,500, ,900,000 Chemical, Fertilizer, etc. 815,800, ,100,000 Cement and Ceramic Industries 1,294,900,000 1,089,300,000 Service Industries 1,960,100,000 1,733,500,000 Other Industries 10,170,800,000 7,053,400,000 41,672,900,000 32,174,200, Categorywise Small Medium Enterprise Loans and Advances (SME) Service Sector 1,264,132, ,051,000 Trading Sector 8,639,298,000 5,638,949,000 Industrial Sector 3,157,246,000 2,540,302,000 13,060,676,000 8,884,302, Geographical locationwise allocations of loans and advances Urban: Rural: Dhaka region Chittagong region Rajshahi region Sylhet region Khulna region Barishal region Dhaka region Chittagong region Sylhet region Khulna region % of total loan 66.37% 25.33% 1.17% 2.89% 1.02% 0.05% 96.83% 2.07% 0.88% 0.22% 0.00% 3.17% % 61,363,563,852 23,417,343,706 1,082,447,266 2,668,533, ,668,597 47,954,638 89,520,511,892 1,911,857, ,654, ,152,098 4,439,589 2,932,103,601 92,452,615,493 % of total loan 69.88% 21.95% 0.76% 4.75% 0.54% 0.00% 97.87% 1.25% 0.65% 0.23% 0.00% 2.13% % 54,153,529,067 17,006,897, ,200,731 3,679,419, ,172,615 27,078 75,846,246, ,101, ,971, ,253,366 1,651,326,997 77,497,573,199 Special Mention Account (SMA) 94.19% 1.55% 95.74% 87,079,031,934 1,435,090,711 88,514,122, % 1.51% 96.27% 73,433,338,556 1,171,235,090 74,604,573,646 Substandard Doubtful Bad/loss 0.88% 1.76% 1.62% 4.26% % 811,798,731 1,625,919,229 1,500,774,888 3,938,492,848 92,452,615, % 0.33% 2.44% 3.73% % 751,554, ,995,691 1,889,449,495 2,892,999,553 77,497,573, Annual Report 20 10

125 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Particulars of loans and advances i) Debts considered good in respect of which the bank is fully secured; ii) Debts considered good for which the bank holds no other security than the debtors' personal security; iii) Debts considered good secured by the personal liabilities of one or more parties in addition to the personal security of the debtors; iv) Debts adversely classified; provision not maintained v) Debts due by directors or officers of the bank or any of them either severally or jointly with any other persons; vi) Debts due by companies or firms in which the directors or officers of the bank are interested as directors, partners or managing agents or, in case of private companies, as members; vii) Maximum total amount of advances, including temporary advances made any time during the year to directors or managers or officers of the bank or any of them either severally or jointly with any other persons; viii) Maximum total amount of advances, including temporary advances granted during the year to companies or firms in which the directors of the bank are interested as directors, partners or managing agents or, in case of private companies, as members; ix) Due from banking companies; x) Classified loans/investments for which interest has not been charged: (a) Increase/decrease of provision (specific) Amount of debts written off Amount realised against the debts previously written off (b) Provision against the debt classified as bad/loss at the date of balance sheet (c) Amount of interest charged in suspense account xi) Loans written off: Current year Cumulative todate The amount of written off loans for which lawsuit filed ,037,472,644 11,006,727,866 18,907,640, ,831, ,745, ,003, ,950,000 25,734, ,860, ,489, ,950,000 2,462,301,328 2,462,301, ,135,566,398 4,938,802,676 16,533,754, ,485,824 24,578, ,486,599 29,774,798 36,406, ,644, , ,048, ,029, ,644,225 1,610,351,328 1,610,351,328 Annual Report

126 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Particulars of required provision for loans and advances/investments Status Outstanding as at 31 Dec 2010 For loans and advances/investments: Unclassified General provision All unclassified loans (other than small enterprises, housing finance, loan to MBs loans for professional, consumer financing and special mention account) 74,691,508, Base for provision 74,691,508,555 % of required provision 1% Required provision 746,915, Required provision 632,504,773 Small and medium enterprise financing 10,722,214,056 10,722,214,056 1% 107,222,141 85,407,564 Loan to BHs/MBs/SDs against shares 550,671, ,671,799 2% 11,013,436 Housing and loan for professional 343,709, ,709,803 2% 6,874,196 14,792,961 Consumer finance 626,095, ,095,804 5% 31,304,790 37,780,243 Special Mention Account (SMA) 1,435,090,711 1,376,915,725 5% 68,845, ,175,435 56,811, ,296,811 Classified Specific provision: Substandard 811,798,731 Doubtful 1,625,919,229 Bad/loss 1,500,774, ,670,462 1,283,883, ,860,350 20% 50% 100% 80,934, ,941, ,860,350 1,578,735,974 91,340,370 79,328, ,048,230 1,120,717,425 Required provision for loans and advances 2,550,911,409 1,948,014,236 Total provision maintained 2,834,946,840 1,958,742,922 Excess/(short) provision at 31 December 284,035,431 10,728, Annual Report 20 10

127 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Suits filed by the Bank (Branchwise details) Principal Branch Agrabad Branch Khatungonj Branch Laldighirpar Branch Imamgonj Branch Bangshal Branch Jubilee Road Branch Moulvibazar Branch Gulshan Branch Khulna Branch Dhanmondi Branch Uttara Branch Chouhatta Branch Kawranbazar Branch Shahjalal Uposhahar Branch Agargoan Branch Kulaura Branch Hetimgonj Branch Corporate Branch Banani Branch Rangpur Branch Kakrail Branch 8.13 Listing of assets pledged as security/collaterals Nature of the secured assets Collateral of Land and Building Share Certificate Local Banks and Financial Institutions Guarantee Government Guarantee Foreign Banks Guarantee Export Document Fixed deposit receipts ( FDR/DBS) FDR of other Banks Government Bonds Personal guarantee Others Security 8.14 Bills purchased and discounted Bills purchased and discounted excluding treasury bills: ,550,584,935 40,504,207 3,863,000 42,972,000 34,837, ,037,000 42,620,000 13,070, ,693,858 67,868, ,010, ,692,000 2,911,000 3,674,000 1,943,000 11,242,000 9,078,000 1,800,000 5,437, ,622,000 32,054, ,000 4,021,403,000 51,491,318,009 4,145,673,173 1,744,726,509 7,425,337,940 5,509,513, ,130,902 17,754,595 6,213,086,308 15,797,074,515 92,452,615, ,546,703, ,898,000 3,863,000 1,447,000 16,328, ,008,000 38,103,000 13,069, ,109,000 23,459, ,541,000 9,090,000 3,007,000 3,237,000 1,943,000 4,632,000 4,992,000 14,309,000 5,437,000 2,770,175,000 41,790,346,075 5,260,979, ,626,405 33,216,000 3,922,875,394 4,563,707,446 92,813, ,357 6,964,794,550 14,354,110,955 77,497,573,199 In Bangladesh Outside Bangladesh 4,211,295,366 1,361,010,762 5,572,306,128 3,177,031, ,798,828 4,030,830,475 Annual Report

128 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Maturity grouping of bills purchased and discounted Within one month More than one month but less than three months More than three months but less than six months More than six months 8 (a) Consolidated Loans and advances/investments Loans, cash credit, overdrafts etc./investments Southeast Bank Limited Southeast Bank Capital Services Limited Less: Inter company balance eliminated Bills purchased and discounted Southeast Bank Limited Southeast Bank Capital Services Limited ,536,067,000 2,235,084, ,856, ,299,128 5,572,306,128 86,880,309,365 1,721,557,083 88,601,866, ,970,253 88,408,896,195 5,572,306,128 5,572,306,128 93,981,202, ,879,353,475 1,591,373, ,400,000 14,704,000 4,030,830,475 73,466,742,724 73,466,742,724 73,466,742,724 4,030,830,475 4,030,830,475 77,497,573,199 9 Fixed assets including premises, furniture and fixtures Cost: Land 2,785,035,544 2,784,940,544 Building 1,065,320,239 1,065,280,239 Furniture and fixture 542,878, ,218,069 Office Appliances 6,805,625 4,269,062 Electrical Appliances 484,663, ,192,258 Motor vehicles 43,802,452 25,630,216 4,928,505,490 4,656,530,388 Less: Accumulated depreciation Building 113,364,380 75,426,046 Furniture and fixture 151,489, ,807,921 Office Appliances 2,306,768 1,796,456 Electrical Appliances 181,928, ,189,368 Motor vehicles 16,334,072 13,720, ,423, ,939,853 Written down value at the end of the year 4,463,082,010 4,323,590,535 Details are shown in AnnexureF 9(a) Consolidated fixed assets including premises, furniture and fixtures Cost: Southeast Bank Limited 4,928,505,490 4,656,530,388 Southeast Bank Capital Services Limited 696,229 4,929,201,719 4,656,530,388 Less: Accumulated depreciation Southeast Bank Limited 465,423, ,939,853 Southeast Bank Capital Services Limited 139, ,562, ,939,853 Written down value at the end of the year 4,463,638,993 4,323,590,535 Details of consolidated amounts have not been provided as such amounts are insignificantly different from those of the Bank s. 126 Annual Report 20 10

129 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Other assets 5,862,577,526 2,173,183, Classification of other assets a) Income generating other assets b) Nonincome generating other assets: i) Investment in shares of subsidiary companies: In Bangladesh 899,970,000 Outside Bangladesh ii) Stationery, stamps, printing materials, etc. 73,322,732 53,582,292 iii) Advance rent and advertisement 85,618,942 69,562,259 iv) Interest accrued on investment but not collected, commission and brokerage receivable on shares and debentures, and other income receivables 444,918, ,942,505 v) Security deposits 1,339,982 1,311,392 vi) Preliminary, formation and organisational expenses, renovation, development and prepaid expenses 2,006,092, ,779,931 vii) Branch adjustment (Note 10.2) 911,161,905 viii) Suspense account 3,424,352 10,147,485 ix) Silver x) Others (Note 10.3) 1,438,092,261 1,185,857,980 5,863,941,651 2,173,183, Branch adjustment General accounts debit 4,250,855,905 General accounts credit 3,339,694, ,161,905 Branch adjustments account represents outstanding interbranch and head office transactions (net) originated but yet to be responded at balance sheet date. However, the unrespondent entries of 31 December 2010 are given below: No. of unrespondent entries Unrespondent entries () Debit Credit Debit Credit Upto 3 months 1, ,559,076,905 2,678,688,000 Over 3 months but within 6 months ,251, ,422,000 Over 6 months but within 1 year ,897,000 1,422,000 Over 1 year but within 5 years ,631,000 2,162,000 1,353 1,157 4,250,855,905 3,339,694, Others Accounts receivable others 1,435,930, ,520,127 Advance paid for preference share 510,353,500 ATM teller account 8,147,600 DD paid without advice 2,161, ,753 1,438,092,261 1,185,857,980 Annual Report

130 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Particulars of required provision for other assets Base for provision Rate (%) Legal Expenses for Defaulting Borrowings 19,923,400 50% 9,961,700 5,948,617 Legal Expenses for Defaulting Borrowings 7,444, % 7,444,374 8,916,450 Protested bills 1,778,900 Nostro Account Balance 1,769, % 1,769,807 1,769,807 Required Provision on Other Assets 19,175,881 18,413,774 Total Provision maintained 19,635,281 18,414,181 Excess / (Short) Provision 459, (a) Consolidated other assets Southeast Bank Limited 5,863,941,651 2,173,183,844 Southeast Bank Capital Services Limited 102,416,433 5,966,358,086 2,173,183,844 Less: Investment in subsidiary 899,970,000 Inter company balance eliminated 1,432,219,836 2,332,189,836 3,634,168,248 2,173,183,844 In Bangladesh (Note 11.1) 976,452, ,836,236 Outside Bangladesh 976,452, ,836, In Bangladesh Secured: 447, , ,707, ,388, ,298,629 Borrowing against securities from Bangladesh Bank 600,000,000 Call borrowing from Other Banks 80,000, ,452, ,836,236 Un secured 976,452, ,836, Maturity grouping of borrowings Repayable on demand 80,000,000 Repayable within one month 200,000,000 Over one month but within six months 400,000,000 Over six months but within one year Over one year 296,452, ,836, ,452, ,836,236 Southeast Bank Limited 976,452, ,836,236 Southeast Bank Capital Services Limited 192,970,253 1,169,423, ,836,236 Less: Inter company balance eliminated 192,970, ,452, ,836, Annual Report 20 10

131 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Deposits and other accounts Current/Alwadeeah current accounts and other accounts Current / Alwadeeah current deposits 5,060,678,437 2,857,053,475 Foreign currency deposits 558,110, ,335,289 Sundry deposits (Note 12.1) 4,430,177,461 3,000,866,377 10,048,965,997 6,226,255,141 Bills payable Payment order issued 1,230,191,392 1,094,777,697 Demand draft 116,015,990 68,362,450 1,346,207,382 1,163,140,147 Savings bank/mudaraba savings bank deposits 5,773,710,807 6,694,031,711 Fixed deposits/mudaraba fixed deposits Fixed deposits / Mudaraba fixed deposits 77,934,184,382 70,969,472,459 Short notice / Mudaraba short notice deposits 7,877,810,445 6,573,407,109 Scheme deposits 2,845,825,965 2,378,766,263 Interest Payable on FDR/Scheme 1,902,882,795 2,663,979,309 90,560,703,587 82,585,625, ,729,587,773 96,669,052, Sundry deposits Margin under letter of credit 1,522,363,055 2,256,298,601 Margin against IBP 3,927,002 15,976,555 Margin under letter of guarantee 432,928, ,536,387 Margin under Export Procceds 1,433,841,093 6,858,296 Deposit held against FDBP/ IDBP, export bills etc 65,566,109 14,051,749 Accounts Payable 1,497,709 21,838,847 Telegraphic Transfer 13,110,442 9,763,670 Mail Transfer 10,000 Remittance awaiting disposal 36,613,989 35,171,592 Others 920,329, ,360,680 4,430,177,461 3,000,866, Deposits from banks and others Interbank deposits (Note 12.3) 4,087,053,000 7,805,232,000 Other deposits 103,642,534,773 88,863,820, ,729,587,773 96,669,052, Interbank deposits Basic Bank Limited 400,000,000 Exim Bank Limited 3,640,000 3,400,000 IFIC Bank Limited 100,225, ,223,000 The City Bank Limited 2,480,000,000 Mercantile Bank Limited 1,905,000 2,639,000 AB Bank Limited 200,070,000 50,000,000 Social Islami Bank Limited 10,672, ,500,000 Brac Bank Limited 902, ,078,000 Janata Bank Limited 130,000, ,000,000 Shahjalal Islami Bank Limited 373,066, ,200,000 AlArafa Islami Bank Limited 2,605,347, ,700,000 Islami Bank Bangladesh Limited 185,000 1,007,800,000 Bangladesh Krishi Bank 257,525, ,000,000 First Security Islami Bank Limited 3,510,000 96,300,000 Dutch Bangla Bank Limited 6, ,000,000 Premier Bank Limited 400,000,000 Grameen Bank 80,000,000 Bangladesh Bank Refinance 34,400,000 Accrued Interest 21,992,000 4,087,053,000 7,805,232,000 Annual Report

132 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Sectorwise deposits Government 6,725,732,000 8,403,447,000 Deposit money banks 4,087,053,000 7,805,232,000 Other public 6,995,924,000 7,751,335,000 Foreign currency 558,110, ,335,289 Private 89,362,768,674 72,340,702, ,729,587,773 96,669,052, Unclaimed Deposits and valuables Payment Order 10,666 12,240 10,666 12, Analysis of residual maturity grouping of deposits Interbank deposits: Payable on demand Within one month 1,099,528,000 3,657,891,667 More than one month but less than six months 2,530,000,000 4,147,340,333 More than six months but less than one year 457,525,000 More than one year but less than five years More than five years but less than ten years 4,087,053,000 7,805,232,000 Other Deposits: Payable on demand 1,913,812,073 2,777,072,000 Within one month 15,397,140,700 13,994,108,333 More than one month but less than six months 39,639,280,000 30,883,912,667 More than six months but less than one year 21,777,814,000 26,226,814,000 More than one year but less than five years 19,613,369,000 10,962,482,139 More than five years but less than ten years 5,301,119,000 4,019,431, ,642,534,773 88,863,820, ,729,587,773 96,669,052,139 12(a) Consolidated deposits and other accounts Current/Alwadeeah current accounts and other accounts Southeast Bank Limited 10,048,965,997 6,226,255,141 Southeast Bank Capital Services Limited 63,509,749 10,112,475,746 6,226,255,141 Less: Inter company balance eliminated 39,907,204 10,072,568,542 6,226,255,141 Bills payable Southeast Bank Limited 1,346,207,382 1,163,140,147 Southeast Bank Capital Services Limited 1,346,207,382 1,163,140,147 Savings bank/mudaraba savings bank deposits Southeast Bank Limited 5,773,710,807 6,694,031,711 Southeast Bank Capital Services Limited 5,773,710,807 6,694,031,711 Fixed deposits/mudaraba fixed deposits Southeast Bank Limited 90,560,703,587 82,585,625,140 Southeast Bank Capital Services Limited 90,560,703,587 82,585,625,140 Less: Inter company balance eliminated 500,000,000 90,060,703,587 82,585,625, ,253,190,318 96,669,052, Annual Report 20 10

133 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Other liabilities Provision for loans and advances/investments (Note 13.1) 2,834,946,840 1,958,742,922 Provision for offbalance sheet exposures (Note 13.2) 554,280, ,330,000 Interest suspense account (Note 13.3) 666,489, ,029,930 Provision for taxation (Note 13.4) 1,375,765, ,693,953 SEBL Foundation 50,000,000 30,000,000 SEBL Employee s welfare fund 35,000,000 Obligation under finance lease (Note 13.5) 28,102,542 24,684,153 Accrued expenses 10,377,120 8,428,052 Interest payable on borrowings 4,939,465 4,023,909 Accounts payable Bangladesh Bank (local currency) 6,623,432 2,033,839 Accounts payable Others 138,790, ,468,621 Provision for bonus 287, ,501 Provision for other assets (Note 13.6) 17,635,281 18,414,181 Unearned income 72,682,558 Branch Adjustment (net & reconciled) (Note 13.7) 119,514,234 Withholding tax on interest on deposits 295,734, ,767,967 Provision for audit fees 500, ,000 6,092,154,825 4,416,919, Provision for loans and advances/investments A. General Balance at the beginning of the year 828,000, ,315,000 Add: Provision made during the year On general loans and advances/investments etc. 132,165, ,765,000 On Special Mention Account (SMA) 12,035, ,200, ,765,000 Less: Provision no longer required 3,080,000 Balance at the end of the year 972,200, ,000,000 B. Specific Balance at the beginning of the year 1,130,742,922 1,094,336,048 Less: Interest waiver during the year 8,117,000 19,935 Write off during the year 759,879, ,073, ,996, ,093,126 Add: Recoveries of amounts previously written off Specific provision made during the year for other accounts 1,500,000, ,500,000 1,500,000, ,500,000 Balance at the end of the year 1,862,746,840 1,130,742,922 C. Total provision on loans and advances/investments (A+B) 2,834,946,840 1,958,742, Provision for offbalance sheet exposures Balance as at 1 January 351,330, ,030,000 Add: Provision made during the year 202,950,000 38,300, ,280, ,330,000 Less: Adjustments made during the year Balance as at 31 December 554,280, ,330,000 Annual Report

134 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Interest suspense account Balance as at 1 January 477,029, ,945,475 Add:Amount transferred to "interest suspense" account during the year 938,096, ,799,483 1,415,126,192 1,138,744,958 Less: Amount of interest suspense recovered 635,272, ,673,995 Amount written off during the year 90,618,158 94,571,033 Interest waiver during the year 22,746,000 9,470, ,636, ,715,028 Balance as at 31 December 666,489, ,029, Provision for taxation Current tax ( Note ) 1,222,514, ,387,874 Deferred tax ( Note ) 153,251,002 26,306,079 1,375,765, ,693, Provision for current tax Advance tax Balance as at 1 January 1,928,792,756 1,740,422,086 Add: Paid during the year 1,870,473,293 1,405,698,677 3,799,266,049 3,146,120,763 Less: Adjustments made during the year 1,217,328,007 Balance as at 31 December 3,799,266,049 1,928,792,756 Provision Balance as at 1 January 2,876,180,630 2,511,929,106 Add: Provision made during the year 2,145,600,000 1,581,579,531 5,021,780,630 4,093,508,637 Less: Adjustments made during the year 1,217,328,007 Balance as at 31 December 5,021,780,630 2,876,180,630 Net balance as at 31 December 1,222,514, ,387,874 Corporate tax position of the bank has been shown in AnnexureG. Provision for current tax of Tk.2,145,600,000 has been 42.5% as prescribed by Finance Act 2010 of the accounting profit made by the Bank after considering some of the add backs to income and disallowances of expenditure as per Income Tax Ordinance and Rules 1984 and incompliance of para 46 of BAS 12 "Income Tax" Provision for deferred tax Balance as at 1 January 26,306,079 52,631,094 Add : Provision made for deferred tax liabilities Charged/(credited) to profit and loss account 14,500,000 (26,325,015) Charged/(credited) to revaluation reserve 112,444, ,944,923 (26,325,015) 153,251,002 26,306,079 Less: Provision made for deferred tax assets Balance as at 31 December 153,251,002 26,306, Annual Report 20 10

135 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December ,143,658 Electrical appliances 3,941,214 Motor vehicles 28,102,542 12,599,281 28,102,542 24,684,153 Balance as at 1 January 24,684,153 53,806,222 Add: Addition during the year 19,610,379 9,998,338 44,294,532 63,804,560 Less: Adjustment during the year 16,191,990 39,120,407 Balance as at 31 December 28,102,542 24,684,153 Particulars Payable within 1 year Payable more than 1 year but less than 2 years Payable more than 2 years but less than 5 years Minimum lease payment 9,637,150 8,304,245 19,916,130 37,857, Financial charge for future period 3,502,735 2,724,467 3,527,781 9,754,983 Principal outstanding 6,134,415 5,579,778 16,388,349 28,102,542 Minimum lease payment 17,685,980 4,202,840 6,736,580 28,625, Financial charge for future period 1,896,206 1,017,123 1,027,918 3,941,247 Principal outstanding 15,789,774 3,185,717 5,708,662 24,684, Provision for Other Assets Balance as at 1 January 18,414,181 24,005,181 Add: Addition during the year 1,000,000 14,409,000 19,414,181 38,414,181 Less: Adjustment during the year 1,778,900 20,000,000 Balance as at 31 December 17,635,281 18,414, Branch Adjustment (net & reconciled) 13(a) General Accounts Debit (26,925,449,388) General Accounts Credit 27,044,963, ,514,234 Consolidated other liabilities Southeast Bank Limited 6,092,154,825 4,416,919,262 Southeast Bank Capital Services Limited 1,648,585,107 7,740,739,932 4,416,919,262 Less: Inter company balance eliminated 1,432,219,836 6,308,520,096 4,416,919,262 Annual Report

136 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Share capital 14.1 Authorised: ,000,000 ordinary shares of Tk 100 each 10,000,000,000 10,000,000, Issued, subscribed and paid up: 37,816,497 ordinary shares of Tk 100 each issued for cash 3,781,649,700 1,471,369,600 31,491,907 ordinary shares of Tk 100 each issued as bonus shares 3,149,190,700 1,951,267,700 69,308,404 6,930,840,400 3,422,637, Share capital at a glance from inception Year Particulars Opening / Sponsors Capital 25% Stock Dividend 20% Stock Dividend Initial Public Offer (IPO) 10% Stock Dividend 10% Stock Dividend 10% Stock Dividend Right 1:2 20% Stock Dividend 30% Stock Dividend 20% Stock Dividend Right 8% Stock Dividend 25% Stock Dividend 20% Stock Dividend 35% Stock Dividend Right Number of shares 1,000, , ,000 1,500, , , ,000 1,650,000 1,128,600 2,031,480 1,760,616 10,563,696 1,690,191 5,704,395 5,704,395 11,979,230 23,102,801 Capital amount 100,000,000 25,000,000 25,000, ,000,000 30,000,000 33,000,000 36,300, ,000, ,860, ,148, ,061,600 1,056,369, ,019, ,439, ,439,500 1,197,923,000 2,310,280,100 Cumulative 100,000, ,000, ,000, ,000, ,000, ,000, ,000, ,300, ,300, ,160, ,308,000 1,056,369,600 2,112,739,200 2,281,758,300 2,852,197,800 3,422,637,300 4,620,560,300 6,930,840, Classification of shareholders by holding: Less than 500 shares 500 to 5,000 shares 5,001 to 10,000 shares 10,001 to 20,000 shares 20,001 to 30,000 shares 30,001 to 40,000 shares 40,001 to 50,000 shares 50,001 to 100,000 shares 100,001 to 1,000,000 shares Over 1,000,000 shares Number of holders ,796 19,302 8,343 2, ,898 22,152 % of total holding Annual Report 20 10

137 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Initial public offer (IPO) Out of the total issued, subscribed and fully paid up capital of the bank 1,500,000 ordinary shares of Tk 100 each amounting to Tk 150,000,000 was raised through public offering on shares in Name of the Directors and their shareholdings as at 31 December 2010 Sl Name of the directors Mr. Alamgir Kabir, FCA Mr. Ragib Ali Mr. M. A. Kashem Mr. Azim Uddin Ahmed Mr. Tahnoun A. Harun (Representing Bangla Capital Limited) Mrs. Jusna Ara Kashem Mrs. Duluma Ahmed Mr. Syed Shahid Ali Mrs. Rehana Rahman Mr. Md. Akikur Rahman Mr. Monjur Miah Mrs. Sirat Monira Mr. Abdul Hye (Representing Karnafuli Tea Co. Limited Dr. Zaidi Sattar Mr. A. H. M. Moazzem Hossain Status Chairman Vice Chairman Director Director Director Director Director Director Director Director Director Director Director Independent Director Depositor Director Opening position 385, , , ,522 50, , , , , ,393 4,500 6,063 4,875,998 Closing position 859,613 1,951,404 1,964,751 1,896, , ,192 1,421, , , , ,313 9,112 12,277 10,717, Capital adequacy ratio (CAR) The calculation of CAR has been done as per BRPD Circular no. 10 dated 10 March 2010 and the BaselII guideline December 2010 vide BRPD Circular no. 35 dated 29 December Core capital (TierI) Paid up capital 6,930,840,400 3,422,637,300 Share premium 1,386,168,060 Statutory reserve (Note 15) 3,650,252,294 2,665,605,000 General reserve 247,650, ,650,000 Retained earnings (Note 18) 1,778,642,087 1,278,871,867 13,993,552,841 7,614,764,167 Supplementary capital (TierII) General provision maintained against unclassified loan/investments 972,200, ,000,000 General provision on offbalance sheet items 554,280, ,330,000 Exchange equalization reserve 4,204,046 Asset revaluation reserve 1,064,467,110 1,117,640,994 Revaluation reserve of Government securities 511,396,776 11,221,344 3,102,343,886 2,312,396,384 Additional Supplementary capital (TierIII) A) Total capital 17,095,896,727 9,927,160,551 B) Risk weighted assets (RWA) Credit Risk OnBalance Sheet 100,523,580,100 OffBalance Sheet 31,506,735, ,030,315,350 Market Risk 9,489,934,111 Operational Risk 10,462,877,222 Total RWA 151,983,126,683 84,669,322,000 C) Required capital 13,678,481,402 8,466,932,200 D) Surplus (AC) 3,417,451,325 1,460,228,351 Capital adequacy ratio: On core capital against standard of minimum 4.5% 9.21% 8.99% On total capital against standard of minimum 9% 11.25% 11.72% Annual Report

138 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December (a) Capital adequacy ratio (CAR) the Group Core capital (TierI) Paid up capital 6,930,840,400 3,422,637,300 Share premium 1,386,168,060 Statutory reserve (Note 15) 3,650,252,294 2,665,605,000 General reserve 247,650, ,650,000 Minority interest in subsidiary 100,109,680 Retained earnings {Note 18(a)} 1,779,358,967 1,278,871,867 14,094,379,401 7,614,764,167 Supplementary capital (TierII) General provision maintained against unclassified loan/investments 972,200, ,000,000 General provision on offbalance sheet items 554,280, ,330,000 Exchange equalization reserve 4,204,046 Asset revaluation reserve 1,064,467,110 1,117,640,994 Revaluation reserve of Government securities 511,396,776 11,221,344 3,102,343,886 2,312,396,384 Additional Supplementary capital (TierIII) A) Total capital 17,196,723,287 9,927,160,551 B) Risk weighted assets (RWA) Credit Risk OnBalance Sheet 100,204,966,100 OffBalance Sheet 31,506,735, ,711,701,350 Market Risk 10,573,348,111 Operational Risk 10,472,053,889 Total RWA 152,757,103,350 84,669,322,000 C) Required capital 13,748,262,062 8,466,932,200 D) Surplus (AC) 3,448,540,903 1,460,228,351 Capital adequacy ratio: On core capital against standard of minimum 4.5% 9.23% 8.99% On total capital against standard of minimum 9% 11.26% 11.72% 15. Statutory reserve Balance as at 1 January 2,665,605,000 1,975,251,800 Addition during the year ( 20% of pretax profit) 984,647, ,353,200 Balance as at 31 December 3,650,252,294 2,665,605, Revaluation reserve Revaluation reserve of land and buildings Balance as at 1 January 2,235,281,987 1,181,365,279 Addition during the year 1,053,916,708 2,235,281,987 2,235,281,987 Deferred tax liabilities (106,347,768) Balance as at 31 December 2,128,934,219 2,235,281, Annual Report 20 10

139 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 Revaluation reserve on HTM securities Balance as at 1 January 22,442,688 7,918,910 Addition during the year 5,002,198 14,523,778 27,444,886 22,442,688 Adjustment during the year (13,098,640) 14,346,246 22,442,688 Deferred tax liabilities (6,097,155) Balance as at 31 December 8,249,091 22,442,688 Revaluation reserve on HFT securities Balance as at 1 January 1,452,484,399 59,965,614 Addition during the year 942,922,121 1,392,518,785 2,395,406,520 1,452,484,399 Adjustment during the year (1,380,862,060) Balance as at 31 December 1,014,544,460 1,452,484,399 3,151,727,770 3,710,209, Other reserves General reserve: Balance as at 1 January 247,650, ,650,000 Addition during the year Balance as at 31 December 247,650, ,650,000 Exchange equalisation reserve Balance as at 1 January 4,204,046 4,204,046 Addition during the year 4,204,046 4,204,046 Transfer to retained earnings (4,204,046) Balance as at 31 December 4,204, ,650, ,854, Retained earnings Balance as at 1 January 1,278,871, ,790,957 18(a) Add: Retained surplus for the year 1,778,489,174 1,179,832,040 Transfer from Nonrepayable share premium account 485,930,025 Transfer from diminution in the market value of shares 72,263,000 Transfer from Deferred Tax Liability 26,325,015 Transfer from Exchange equalization fund 4,204,046 1,782,693,220 1,764,350,080 Less : Transfer to SEBL Foundation 50,000,000 30,000,000 Transfer to SEBL Employee s welfae fund 35,000,000 Issue of bonus share 1,197,923, ,439,500 Cash dividend paid 427,829,670 1,282,923,000 1,028,269,170 Balance as at 31 December 1,778,642,087 1,278,871,867 Consolidated retained earnings Southeast Bank Limited 1,778,642,087 1,278,871,867 Southeast Bank Capital Services Limited 796,560 1,779,438,647 1,278,871,867 Less: Noncontrolling interest 79,680 1,779,358,967 1,278,871,867 Annual Report

140 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Noncontrolling interest Paid up capital 1,000,000,000 Retained earnings 796,560 Total net assets 1,000,796,5560 Noncontrolling interest % of net assets 100,109, Contingent liabilities 20.1 Acceptances and endorsements Acceptance under Letters of Credit Import 13,652,126,205 7,625,122,880 Acceptance under Letters of Credit Export 10,973,691,963 4,395,033,900 24,625,818,168 12,020,156, Letters of guarantee Letters of guarantee (Local) 6,272,041,927 6,034,183,466 Letters of guarantee (Foreign) 429,723,271 6,701,765,198 6,034,183,466 Less: Margin 432,928, ,536,387 6,268,836,544 5,567,647,079 Balance for which the Bank is contingently liable in respect of guarantee issued favouring: Directors or officers 4,783,060 6,783,060 Government Banks and other financial institutions Others 6,696,982,138 6,027,400,406 6,701,765,198 6,034,183,466 Less: Margin 432,928, ,536,387 6,268,836,544 5,567,647, Irrevocable letters of credit Back to back L/C 8,034,101,896 4,041,059,383 Others 14,391,464,194 10,972,585,010 22,425,566,090 15,013,644,393 Less: Margin 1,522,363,055 2,256,298,601 20,903,203,035 12,757,345, Bills for collection Bills for collection (Local) 2,199,074, ,119,973 Bills for collection (Foreign) 1,429,670,963 1,332,320,663 3,628,745,629 2,059,440, Value of Bangladesh Sanchaypatra 632,084, ,555, Annual Report 20 10

141 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Workers' profit participation fund (WPPF) As per Bangladesh Labour Act 2006 and SRO no. 336/Law/2010, all companies fall within the scope of WPPF are required to provide 5% of its profit before charging such expense to their eligible employees within the stipulated time. The Bank obtained opinion from its legal advisor regarding this issue which stated that the Bank was not required to make provision for WPPF as bank was not within the scope of WPPF. As such the Bank did not make any provision during the year for WPPF. 21. Income statement Income: Interest, discount and similar income 11,789,905,591 10,650,537,628 Dividend income 35,198,093 15,500,611 Fees, commission and brokerage 1,112,113,309 1,005,811,745 Gains less losses arising from dealing securities 23,736, ,061,294 Gains less losses arising from investment securities 2,196,625, ,046,381 Gains less losses arising from dealing in foreign currencies 588,881, ,414,447 Income from nonbanking assets Other operating income 324,873, ,078,838 Profit less losses on interest rate changes 16,071,333,391 13,702,450,944 Expenses: Interest, fees and commission 7,580,851,091 7,843,236,025 Losses on loans and advances Administrative expenses 1,177,039, ,057,291 Other operating expenses 421,443, ,503,364 Depreciation on banking assets 137,057,947 90,995,493 9,316,391,907 9,087,792,173 Income over expenditure 6,754,941,484 4,614,658, Interest income/profit on investment 22(a) Interest on loans and advances 9,563,144,261 8,384,139,685 Interest on placement with other banks and financial institutions 265,731, ,089,779 Interest on foreign currency balances 13,271,277 15,129,164 9,842,147,086 8,593,358,628 Profit on investment (Islamic Banking Branch): Profit on BaiMuajjal 176,669, ,792,378 Profit on Murabaha 27,504,419 33,801,612 Profit on hire purchase 163,884, ,279,541 Profit on Quard against MTDR 46,832,483 42,860, ,890, ,733,849 10,257,037,859 8,962,092,477 Consolidated interest income/profit on investments Southeast Bank Limited 10,257,037,859 8,962,092,477 Southeast Bank Capital Services Limited 18,124,938 10,275,162,797 8,962,092,477 Annual Report

142 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Interest paid/profit shared on deposits and borrowings etc. 23(a) Interest paid on: Interest on deposits 6,836,113,042 6,823,792,052 Interest on borrowings 81,204,239 43,992,729 Interest on foreign bank accounts 10,321,431 7,348,130 6,927,638,712 6,875,132,911 Profit shared on deposits (Islamic Banking Branch): Mudaraba Savings Deposits (MSB) 52,114,145 72,931,036 Mudaraba Short Term Deposits (MSTD) 7,640,058 8,465,013 Mudaraba Fixed Term Deposits (MFDR) 593,458, ,469, ,212, ,865,705 7,580,851,090 7,555,998,616 Consolidated interest paid/profit shared on deposits and borrowings etc. Southeast Bank Limited 7,580,851,090 7,555,998,616 Southeast Bank Capital Services Limited 12,955,653 7,593,806,743 7,555,998, Investment income Interest income from Government Securities (Note 24.1) 1,532,867,732 1,428,070,534 Capital Gain on Government Securities (Note 24.2) 120,084, ,294,520 Revaluation gain/(loss) on Government Securities (Note 24.3) (96,348,085) (24,096,018) Dividend on investment in shares 35,198,093 15,500,611 Gain on sale of investment in shares 2,196,625, ,046,381 3,788,427,272 2,615,816,028 Figures of previous year have been rearranged, wherever considered necessary, to conform the current year's presentation Interest Income from Government Securities Interest on treasury bills 71,109, ,066,684 Interest on treasury bonds/t&t bonds 2,014,708,240 1,377,378,466 2,085,817,371 1,688,445,150 Interest Expenses on treasury bills (6,138,118) Interest Expenses on treasury bonds (546,811,521) (260,374,616) (552,949,639) (260,374,616) Net Interest Income from Government Securities 1,532,867,732 1,428,070, Capital Gain on Government Securities Capital Gain on treasury bills 11,509,684 28,606,686 Capital Gain on treasury bonds/t&t bonds 161,290, ,446, ,799, ,052,694 Capital loss on treasury bills (7,744,999) (1,687,756) Capital loss on treasury bonds/t&t bonds (44,970,670) (70,418) (52,715,669) (1,758,174) Net capital gain on Government Securities 120,084, ,294, Annual Report 20 10

143 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Revaluation Gain/(loss) on Government Securities Revaluation gain on treasury bills 45,812,782 1,008,600 Revaluation gain on treasury bonds 71,519, ,332,675 1,008,600 Revaluation loss on treasury bills (59,243,803) Revaluation loss on treasury bonds (154,436,957) (25,104,618) (213,680,760) (25,104,618) Net revaluation gain/(loss) on Government Securities (96,348,085) (24,096,018) 25. Commission, exchange and brokerage Commission and brokerage 1,112,113,309 1,005,811,745 Exchange gain (Note 25.1) 588,881, ,414,447 1,700,994,440 1,644,226, Exchange gain Exchange gain from revaluation/trade of foreign currency 574,301, ,638,460 Exchange gain from credit card 14,580,030 2,775, ,881, ,414, Other operating income Remittance fees 1,849,284 2,798,942 Service and incidental charges 55,656,992 62,304,550 Management feesportfolio 46,692,619 Settlement feesportfolio account 82,006,192 Other FeesTelephone and Postage 33,252,763 26,927,129 Income from ATM services 76, ,744 Income from Credit Card 26,025,313 33,021,285 Online services fees 784,026 8,914,038 Other Fees SWIFT 41,914,958 36,196,642 Demat and Custody Fees 666, ,000 Gain on sale of fixed assets (Note 26.1) 1,662,979 Recovery of written off loans 25,100,439 3,827,501 Miscellaneous income 9,185,523 18,654, ,873, ,078, Gain on sale of fixed assets Cost: Motor vehicle 1,438,144 1,546,043 Furniture and fixtures 542, ,000 Office appliances 238, ,350 Electrical appliances 4,750,617 1,175,000 6,969,119 3,058,393 Accumulated depreciation: Motor vehicle 1,421,061 1,536,043 Furniture and fixtures 175,086 61,585 Office appliances 238, ,350 Electrical appliances 2,740, ,258 4,574,320 2,525,236 Written down value 2,394, ,157 Sale proceeds of the above fixed assets 4,057, ,157 Gain on sale of fixed assets 1,662,979 Annual Report

144 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December (a) Consolidated other operating income Southeast Bank Limited 324,873, ,078,837 Southeast Bank Capital Services Limited 11,354, ,228, ,078, Salaries and allowances 27(a) Basic salary 348,807, ,639,935 Allowances 225,883, ,505,553 Bonus 128,628,129 94,204,301 Provident fund 25,809,345 18,665, ,128, ,015,328 Consolidated salaries and allowances Southeast Bank Limited 729,128, ,015,328 Southeast Bank Capital Services Limited 306, ,434, ,015, Rent, taxes, insurance, electricity etc. Rent, rates and taxes 134,919,560 99,877,702 Insurance 60,189,336 45,647,397 Electricity and lighting 33,362,949 25,033, ,471, ,558,136 28(a) Consolidated rent, taxes, insurance, electricity etc. Southeast Bank Limited 228,471, ,558,136 Southeast Bank Capital Services Limited 41, ,512, ,558, Postage, stamp, telecommunication etc. 29(a) Postage 27,269,430 18,338,929 Telephone 8,007,679 7,982,893 Telex Electronic banking service 3,060,682 1,871,341 FC Charge (Nostro) 1,315,867 1,405,453 VSAT online 19,582,301 9,566,603 Reuters services 7,159,546 4,014,609 SWIFT services 11,920,846 10,837,388 78,316,636 54,018,201 Consolidated postage, stamp, telecommunication etc. Southeast Bank Limited 78,316,636 54,018,201 Southeast Bank Capital Services Limited 16,850 78,333,486 54,018, Stationery, printing, advertisements etc. Office stationery 9,847,735 9,361,798 Printing stationery 18,797,480 16,740,478 Security stationery 7,427,815 2,737,044 Computer stationery 8,193,404 7,662,523 Publicity and advertisement 36,402,443 30,213,346 80,668,877 66,715, Annual Report 20 10

145 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December (a) Consolidated stationery, printing, advertisements etc Southeast Bank Limited 80,668,877 66,715,189 Southeast Bank Capital Services Limited 21,209 80,690,086 66,715, Managing Director's salary and fees Basic Salary 5,100,000 3,922,500 House Rent 1,440, ,000 House Maintenance 600,000 1,815,000 Leave Fare Concession (LFC) 500, ,000 Special Allowance 1,200, ,000 Watch & Ward Duty at Residence 300, ,500 Cook & Gardener 360, ,000 Bonus 850, ,000 Provident Fund 137,250 10,350,000 9,207, Directors' fees and expenses 32(a) Directors' fees 1,953,500 2,034,000 Directors' haltage and travelling 1,056,879 1,406,553 3,010,379 3,440,553 Consolidated directors' fees and expenses Southeast Bank Limited 3,010,379 3,440,553 Southeast Bank Capital Services Limited 30,000 3,040,379 3,440, Consolidated auditors' fees Southeast Bank Limited 500, ,000 Southeast Bank Capital Services Limited 25, , , Depreciation on and repairs of Bank's assets Depreciation on own assets: Building 37,938,334 16,572,347 Furniture and fixtures 33,594,452 25,172,229 Office appliance 748, ,743 Electrical appliance 50,620,256 33,307, ,901,454 75,405,549 Depreciation on leased assets: Furniture and fixtures 6,262,219 6,958,021 Electrical appliance 3,859,203 4,824,007 Motor vehicles 4,035,071 3,807,916 14,156,493 15,589,944 Repairs: Furniture and fixtures 3,114,337 2,545,299 Office and electrical appliance 28,449,340 15,024,999 Motor vehicles 2,242,426 2,055,715 Repair, maintenance and utilities 12,493,413 10,617,368 46,299,516 30,243, ,357, ,238,874 Annual Report

146 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December (a) Consolidated depreciation and repairs Southeast Bank Limited 183,357, ,238,874 Southeast Bank Capital Services Limited 139, ,496, ,238, Other expenses 35(a) Security and cleaning 49,488,201 34,670,512 Entertainment Office and AGM 22,781,835 19,263,149 Business promotion expenses 10,228,861 9,609,360 Car expenses 61,475,518 56,020,973 Books and periodicals 1,082, ,440 Subscription and donation 27,729,891 28,329,969 Travelling expenses 6,521,302 5,868,915 Finance charge on leased assets 2,546,741 5,281,353 Conveyance 6,379,249 4,585,182 Fuel 3,766,617 3,373,652 Training/seminar 2,386,978 1,581,453 Uniforms and apparels 1,540,285 1,152,648 Medical expenses 1,007,233 3,882,374 Gratuity 65,369,500 35,000,000 Professional expenses 4,295,945 3,092,091 Expenses for CIB report 165, ,150 Expenses regarding credit card 23,536,022 20,631,710 Miscellaneous 131,140,698 59,396, ,443, ,503,363 Consolidated other expenses Southeast Bank Limited 421,443, ,503,363 Southeast Bank Capital Services Limited 1,618, ,062, ,503, Provision for diminution in value of investments Provision to be maintained for the year ,500,000 78,000,000 Provision has already been maintained last year (78,000,000) (150,263,000) Loss against sale of shares 29,055,015 Excess provision transferred to Retained Earnings/profit or loss account (16,444,985) (72,263,000) 36(a) Consolidated provision for diminution in value of investments Southeast Bank Limited (16,444,985) (72,263,000) Southeast Bank Capital Services Limited 8,156,600 (8,288,385) (72,263,000) 37. Tax expense Current tax 2,145,600,000 1,581,579,531 Deferred tax 14,500,000 2,160,100,000 1,581,579, Annual Report 20 10

147 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December ,754,941,483 4,614,658,771 Income tax using the tax 42.5% 2,870,850,130 1,961,229,977 Nondeductible expenses 148,183,194 93,746,889 Deductible expenses (88,769,455) (66,353,652) Tax exempted income (74,051,857) (175,976,050) Dividend income (7,919,571) (3,487,637) Capital gain from sale of shares in stock market (704,460,350) (258,390,074) Additional current tax provision 1,767,909 30,810,078 14,500,000 Total income tax expenses 2,160,100,000 1,581,579,531 37(a) Consolidated tax expense Current tax Southeast Bank Limited 2,145,600,000 1,581,579,531 Southeast Bank Capital Services Limited 5,372,000 2,150,972,000 1,581,579,531 Deferred tax Southeast Bank Limited 14,500,000 Southeast Bank Capital Services Limited 14,500,000 2,165,472,000 1,581,579, Cash received from other operating activities 38(a) Remittance fees 1,849,284 2,798,942 Service and incidental charges 55,656,992 62,304,550 Revaluation gain on government securities 117,332,674 Management feesportfolio 46,692,619 Settlement feesportfolio account 82,006,192 Other FeesTelephone/Telex/Postage 33,252,763 26,927,129 Income from ATM services 76, ,744 Income from Credit Card 26,025,313 33,021,285 OnLine services 784,026 8,914,038 Other Fees SWIFT 41,914,958 36,196,642 Demat and Custody Fees 666, ,000 Miscellaneous income 9,185,523 18,654, ,443, ,251,336 Consolidated cash received from other operating activities Southeast Bank Limited 415,443, ,251,336 Southeast Bank Capital Services Limited 11,354, ,797, ,251, Payments for other operating activities Rent, rates and taxes 243,956, ,465,180 Postage 78,316,636 54,018,202 Directors fees 3,010,379 3,440,553 Repairs 46,299,515 30,243,381 Others expenses 356,867, ,362, ,450, ,529,930 Annual Report

148 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December (a) Consolidated Payments for other operating activities Southeast Bank Limited 728,450, ,529,930 Southeast Bank Capital Services Limited 1,731, ,182, ,529, Earnings per share 2,763,136,468 1,870,185,240 Number of ordinary shares outstanding 61,134,224 57,653,812 Earnings per share (EPS) () (a) Consolidate earnings per share 2,763,933,028 1,870,185,240 Number of ordinary shares outstanding 61,134,224 57,653,812 Earnings per share (EPS) () General 41.1 Audit Committee Audit Committee of the Board of Directors of the Bank has been reconstituted by the Board of Directors in its 354th Meeting held on 29 March 2010 comprising the following members: Sl. no. Name Status with the committee 1) Mr. Azim Uddin Ahmed, Director Chairman MA 2) Mr. M. A. Kashem, Director Member Commerce Graduate 3) Dr. Zaidi Sattar, Independent Director Member Ph. D. in Economics Functions of the Bank's Audit Committee i) Review of the appropriateness of the Bank's accounting policy ii) Overseeing the Bank's relationship with external auditors iii) Review of the Bank's existing system and upgradation of systems iv) Review of the Bank's annual audit plan v) Review of all reports of internal auditors vi) Review of Management's report on risk management vii) Review of Audit Committee's own terms of reference within the purview of BRPD Circular No.12 dated 23 December 2002 of Bangladesh Bank. During the year 2010, the audit Committee held 4(four) meetings. On invitation, senior executives of the Bank Division and Head of Credit Risk Management Division attended the meeting of the Audit Committee to instantly meet the queries of the Audit Committee and take directives for improvement. In those meetings, annual audit plan of the Bank was reviewed, performance of the internal and external auditors was widely were given to the management. 146 Annual Report 20 10

149 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December 2010 The Audit Committee gave directives for pragmatic steps for reduction of classified loans by recoveries and regularization of classified loans, rectification of lapses and irregularities, punishment of delinquent employees for any misconduct, BaselII compliance completion of incomplete documentation formalities initiation of legal action against reconciliation borrowers, constant monitoring of top 20 (twenty) borrowers and compliance of rules and regulations of all regulatory bodies. The decision and directives of the Audit Committee have been implemented or are being complied with to upgrade the Bank s operational status and better placement in crediting and CAMELS Related party/(ies) i) Particulars of Directors of the Bank as on 31 December 2010 Sl. % of shares as No. Name of persons Designation Present address on 31 Dec Mr. Alamgir Kabir, FCA Chairman 226, Dilu Road, New Eskaton Dhaka Mr. Ragib Ali Vice Chairman House No.06, Road No.76, Gulshan, Dhaka Mr. M. A. Kashem Director 73/C, Gulshan Avenue, Gulshan, Dhaka Mr. Azim Uddin Ahmed Director 14, Topkhana Road, Segunbagicha Dhaka "Bangla Capital Limited T.K. Bhaban (11th Floor), 13, (represented by Mr. Tahnoun A. Harun)" Director Kawran Bazar, Dhaka Mrs. Jusna Ara Kashem Director 73/C, Gulshan Avenue, Gulshan Dhaka Mrs. Duluma Ahmed Director 14, Topkhana Road, Segunbagicha Dhaka Mr. Syed Shahid Ali Director Saleha Monzil, Diganto # Roy Hussain R. A., Electric Supply Road, Amborkhana, Sylhet 9 Mrs. Rehana Rahman Director House No.10, Road No Gulshan, Dhaka Mr. Md. Akikur Rahman Director Sonarpara, Nobarun227, Sylhet Mr. Monjur Miah Director Roy Nagar, Rajbari, Sylhet Mrs. Sirat Monira Director 226, Dilu Road, (Ground Floor) New Eskaton, Dhaka Karnafuli Tea Company Limited Director 67, Motijheel C/A, Dhaka (represented by Mr. Abdul Hye) 14 Dr. Zaidi Sattar Independent Director House No.41, Road No.35A Gulshan, Dhaka Mr. A. H. M. Moazzem Hossain Depositor Director Apartment #A16, Building #03 Ramna Estate Complex Bara Moghbazar, Dhaka Mr. Mahbubul Alam Managing Director Southeast Bank Limited Head Office, 5253 Dilkusha C/A Dhaka1000. ii) As of the date of these financial statements the Bank had no transactions with the related party/(ies) as defined in the BRPD Circular No. 14 issued by the Bangladesh Bank on 25 June Annual Report

150 Southeast Bank Limited and its subsidiary Notes to the Financial Statements as at and for the year ended 31 December Related party transactions During the year 2010, the Bank concluded business deals with the following organizations in which the directors had interest: Nature of Name of organization Relationship transactions Amounts Asia Insurance Ltd. Southeast Bank Capital Services Limited Common director Group Company Insurance coverage Interest on loan 8,378,206 12,955, Loans and advances to directors and their related concern Name of party Name of the director Related by Nature of transaction Amount in Status Monorom Traders Mr. Azim Uddin Ahmed Mrs. Duluma Ahmed Director Director Bank Guarantee 4,783,060 Regular 41.3 Events after the reporting period a cash 10% subject to the approval of the shareholders at the next Annual General Meeting Number of employees Tk 36,000 or above were 1613 (2009: 1402) Share trading December 2010 was Tk at DSE and Tk at CSE General Highlights on the overall activities of the Bank have been furnished in Annexure A Coverage of external audit Bank's risk weighted assets as on the reporting date. 148 Annual Report 20 10

151 Southeast Bank Limited Highlights on the overall activities as at and for the year ended 31 December 2010 AnnexureA Sl no. Particulars Paidup capital Total capital Capital surplus Total assets Total deposits Total loans and advances/investments Total contingent liabilities and commitments Credit deposit ratio Percentage of classified loans/investments against total loans and advances/investments Profit after tax and provision Amount of classified loans/investments Provisions kept against classified loans/investments Provision surplus/(deficit) against classified loans/investments Cost of fund Interest earning assets Noninterest earning assets Return on investment (ROI) Return on assets (ROA) [PAT/ Average assets] Income from investment Capital adequacy Stock dividend Earnings per share Net income per share Price earning ratio Times 6,930,840,400 17,095,896,727 3,417,415, ,943,476, ,729,587,773 92,452,615,493 58,013,979, % 4.26% 2,763,136,468 3,938,492,848 1,862,746, ,035, % 108,389,127,376 13,554,348, % 2.26% 3,788,427, % 20% ,422,637,300 9,927,160,551 1,460,228, ,676,984,924 96,669,052,139 77,497,573,199 35,650,980, % 3.73% 1,870,185,240 2,892,999,553 1,130,742,922 10,728, % 96,174,903,386 16,501,581, % 1.66% 2,615,816, % 35% Annual Report

152 Southeast Bank Limited Consolidated Liquidity Statement (Analysis of maturity of assets and liabilities) as at 31 December 2010 AnnexureB Particulars Up to 1 month 13 months 312 months 15 years Above 5 years Assets: Cash in hand 1,521,172,604 5,774,410,000 7,295,582,604 Balance with other banks and financial institutions 1,156,032,017 1,225,075, ,000,000 3,031,107,119 Money at call and on short notice 509,500, ,500,000 Investments 4,102,600 2,465,611,685 1,476,504,305 3,232,007,202 11,690,845,445 18,869,071,237 Loans and advances / investments 16,910,533,493 17,068,994,830 31,522,946,000 18,857,218,000 9,621,510,000 93,981,202,323 Fixed assets including premises, furniture and fixtures 335,258,981 4,128,380,012 4,463,638,993 Other assets 61,502,411 2,835,320, ,345,640 3,634,168,250 Non banking assets Total assets (A) 20,162,843,125 23,595,001,816 34,386,795,945 28,198,894,183 25,440,735, ,784,270,526 Total Liabilities: Borrowings from Bangladesh Bank, other banks, financial institutions and agents 280,000, ,000, ,452, ,452,941 Deposits 18,434,083,318 24,183,287,000 39,721,332,000 19,613,369,000 5,301,119, ,253,190,318 Provision and other liabilities 347,345, ,135,145 1,287,884, ,638,627 3,627,516,957 6,308,520,096 Total liabilities (B) 19,061,428,604 24,465,422,145 41,409,216,081 20,673,460,568 8,928,635, ,538,163,355 Net liquidity gap (A B) 1,101,414,521 (870,420,329) (7,022,420,136) 7,525,433,615 16,512,099,500 17,246,107, Annual Report 20 10

153 Southeast Bank Limited Liquidity Statement (Analysis of maturity of assets and liabilities) as at 31 December 2010 AnnexureB.1 Particulars Up to 1 month 13 months 312 months 15 years Above 5 years Assets: Cash in hand 1,521,172,604 5,774,410,000 7,295,582,604 Balance with other banks and financial institutions 1,156,032,017 1,225,075, ,000,000 3,031,107,119 Money at call and on short notice 509,500, ,500,000 Investments 4,102,600 1,924,187,721 1,476,504,305 3,232,007,202 11,690,845,445 18,327,647,273 Loans and advances / investments 16,910,533,493 15,540,408,000 31,522,946,000 18,857,218,000 9,621,510,000 92,452,615,493 Fixed assets including premises, furniture and fixtures 334,701,998 4,128,380,012 4,463,082,010 Other assets 61,502,411 4,165,123, ,345, ,970,000 5,863,941,651 Non banking assets Total assets (A) 20,162,843,125 22,854,794,423 34,386,795,945 28,198,337,200 26,340,705, ,943,476,150 Total Liabilities: Borrowings from Bangladesh Bank, other banks financial institutions and agents 280,000, ,000, ,452, ,452,941 Deposits 18,410,480,773 24,683,287,000 39,721,332,000 19,613,369,000 5,301,119, ,729,587,773 Provision and other liabilities 347,345,286 64,405,749 1,287,884, ,638,627 3,628,881,082 6,092,154,825 Total liabilities (B) 19,037,826,059 24,747,692,749 41,409,216,081 20,673,460,568 8,930,000, ,798,195,539 Net liquidity gap (A B) 1,125,017,066 (1,892,898,326) (7,022,420,136) 7,524,876,632 17,410,705,375 17,145,280,611 Annual Report

154 Southeast Bank Limited Balance with other banksoutside Bangladesh(Nostro Account) as at 31 December 2010 AnnexureC Name of the Bank Currency type FC amount Exchange rate Equivalent FC amount Exchange rate Equivalent Interest bearing : Standard Chartered Bank, New York USD 1,065, ,380, , ,245,447 Standard Chartered Bank, New York USD 2,503, ,941,057 Citibank, NA, New York, USA USD 268, ,980,057 1,147, ,517,685 HSBC Bank, New York, USA USD 353, ,993,908 1,979, ,079,316 HSBC Bank PLC, London, UK GBP 635, ,872, , ,522,881 Mashreq Bank PSC, New York, USA USD 3,489, ,905,610 3,016, ,962,332 Wells Fargo Bank, N.A., New York, USA USD 1,593, ,710, , ,297,211 Citibank AG, Frankfurt, Germany EUR 117, ,002, , ,433,403 Standard Chartered Bank, Kolkata, India ACUD 153, ,831, , ,985,301 Arab Bangladesh Bank Ltd., Mumbai, India ACUD 486, ,449, , ,372,899 ICICI Bank Ltd., Mumbai, India ACUD 614, ,476, , ,378,668 JP Morgan Chase Bank, New York, USA USD 222, ,707,367 28, ,974,058 Habib American Bank, New York, USA USD 335, ,749, , ,580,662 Mashreq Bank, Mumbai, India ACUD 333, ,630,032 Mashreq Bank, Mumbai, India ACUEUR 36, ,440, ,071, ,349,863 Noninterest bearing : Bank of Nova Scotia, Toronto, Canada CAD 44, ,159,715 30, ,989,364 United Bank Limited, Karachi, Pakistan ACUD 784, ,474,785 89, ,166,397 Standard Chartered Bank, Colombo, Srilanka ACUD 147, ,446,227 16, ,146,974 Standard Chartered Bank, Mumbai (AEB), India ACUD 327, ,154,511 25, ,764,223 Nepal Bangladesh Bank Ltd., Kathmandu, Nepal ACUD 18, ,276,113 54, ,746,775 Bank of Bhutan, Pheuntsholing, Bhutan ACUD 15, ,081,374 5, ,265 Bank of Tokyo Mitsubishi, Kolkata, India ACUD 25, ,786,784 25, ,749,331 Commerz Bank, Frankfurt, Germany EUR 334, ,329, , ,970,625 U. B. A. F., Tokyo, Japan JPY 33,942, ,472,127 7,718, ,796,165 Zuercher Kantonal Bank, Zurich, Switzerland CHF 75, ,671,874 93, ,252,988 National Australia Bank Ltd. Melbourne, Australia AUD 67, ,884,290 37, ,290, ,737,642 42,228,057 1,058,808, ,577, Annual Report 20 10

155 Southeast Bank Limited Investment in Shares as at 31 December 2010 AnnexureD Sl. no. Name of the company Quoted Type of shares Face value No. of shares including bonus shares Cost of holding Average cost Quoted rate per share as at 31Dec10 Total market value as at 31Dec Asia Insurance Beximco Pharma Beximco Limited Bay Leasing & Investment Exim Bank Limited First Security Bank Ltd H.R. Textile KPCL Lafarge Cement Maksons Spinning Mills Metro Spinning National Life Ins. National Tea RAK Ceremic Rupali Bank Singer BD SIBL Sumitpower Titas Gas TRUST Bank 1ST MF. Trust Bank Ltd. A A A A A A A A Z A A A A N Z A A A A A A ,950 1,944,939 50, ,234, , , , ,997 9, , ,000 75, , ,561,331 61,268, ,387,644 16,269, , ,466,126 3,300,580 2,137 8,394, ,381,578 11,275 4,470 47,996,222 7,478,475 5,664 9,074, , ,112,348 80,732,923 9,068,228 29,930 1,088,686, , , , , , , , , , , ,576, ,761,259 15,575, , ,578,554 13,400,355 15,253 6,756, ,460,375 30,848 32, ,489,404 54,692,937 20,249 6,268, , ,421,000 75,624,300 7,656,000 31,637 1,333,521,522 Unquoted Industrial & Infrastructure Development Finance Co. Ltd. Shares in Karmasangsthan Bank Central Depository Bangladesh Ltd. Venture Investment Partner STS Holding Limited Dun & Breasdstreet Rating Agency Aftab Automobile Limited Summit Power Limited Southeast Bank 1st Mutual Fund , ,000 1,083, ,000 8,000, ,000, ,000 2,500,000 14,963,133 10,000,000 10,000,000 8,833,340 18,000,000 80,000,000 4,165, ,000,000 87,000, ,000, ,999, Annual Report

156 Southeast Bank Limited Details of Large Loan as at 31 December 2010 AnnexureF Number of clients Amount of outstanding advances () 30, , Amount of classified advances () NIL NIL Measures taken for recovery () NIL NIL Clientwise break up is as follows: Sl. no. Name of clients Deshbandhu Sugar Mills Ltd. and its related concern, NRG Spinning Mills Ltd. Generation Next Fashions Limited Faar Ceramics Limited Nurjahan Super Oil Limited S. S. Steel (Pvt.) Limited United Edible Oils Ltd. and its related concern MAB Spinning Ltd. and its related concern Shore to Shore (BD) Ltd. and its related concern Chittagong Asian Apparels Ltd. and its related concern Maksons Spinning Mills T. K. Group Chaity Composite Ltd. and its related concern Khaleque Knitting and Garments Industries (Pvt.) ACS Textile (Bangladesh) Limited PHP Continuous Galvanizing Mills Ltd. And its related concern Navana Group Mostafa Paper Complex Ltd. and its related concern J. K. Enterprise and its related concern Bay Leasing and Investment Limited Masuma Khatun Textile Industries Ltd. Marrine Vegetable Oils Ltd. and its related concern Abul Khair Steel Industries Ltd. and its related concern Nasa Taipei Spinners Ltd. and its related concern Partex Sugar Mills Ltd. and its related concern S. Alam Colled Rolled Steel Limited Appollo Ispat Complex Ltd. and its related concern Mahbub Spinning Ltd. and its related concern Refat Garments Ltd. and its related concern Biswas Fashion Ltd. and its related concern Fahami Apparels Ltd. and its related concern Concrete and Steel Technologies Ltd. And its related concern Ahmed Muztaba Steel Industries Limited KYCR Coil Industries Ltd. and its related concern Kabir Steel Ltd. and its related concern Toma Construction Company Ltd., Toma Properities Ltd. S. N. Corporation S. Alam Super Edible Oil Ltd. S. Alam Vegetable Oil Ltd. Bashundhara Group Total Outstanding () 2010 Funded , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Outstanding () 2009 No Funded Total Funded No Funded Total , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Annual Report 20 10

157 Southeast Bank Limited and its subsidiary Schedule of fixed assets including premises, furniture and fixtures as at 31 December 2010 AnnexureF Particulars Balance as at 1 January Additions during the year Cost/Revaluation Depreciation Revalued during the year Disposal during the year Balance as at 31 December Rate of dep. % Balance as at 1 January Charged during the year Adjustment for disposal during the year Balance as at 31 December Written down value as at 31 December Own assets Office: Land 2,784,940,544 95,000 2,785,035, ,785,035,544 Building 1,065,280,239 40,000 1,065,320, ,426,046 37,938, ,364, ,955,859 Furniture and fixtures 347,271,552 87,777,303 (92,258) 434,956, ,762,719 33,445,473 (71,137) 101,137, ,819,542 Office Appliances 4,269,062 2,774,663 (238,100) 6,805, ,796, ,412 (238,100) 2,306,768 4,498,857 Electrical Appliances 251,196, ,971,875 (3,250,617) 413,918, ,388,029 49,431,906 (1,696,658) 132,123, ,794,737 Motor vehicles 1,509,933 (17,083) 1,492, ,463,599 1,463, ,251 4,454,468, ,658,841 (3,598,058) 4,707,528, ,836, ,564,125 (2,005,895) 350,395,079 4,357,133,790 Residence of executives: Furniture and fixtures 1,895, ,000 (450,000) 1,870, , ,979 (103,949) 661,197 1,209,093 Electrical Appliances 11,108,694 2,250,000 (1,500,000) 11,858, ,210,552 1,188,350 (1,043,415) 6,355,487 5,503,207 13,003,984 2,675,000 (1,950,000) 13,728,984 6,826,719 1,337,329 (1,147,364) 7,016,684 6,712,300 4,467,472, ,333,841 (5,548,058) 4,721,257, ,663, ,901,454 (3,153,259) 357,411,763 4,363,846,090 Leased assets Furniture and fixtures 106,051, ,051, ,429,035 6,262,219 49,691,254 56,359,973 Electrical Appliances 58,886,808 58,886, ,590,787 3,859,203 43,449,990 15,436,818 Motor vehicles 24,120,283 19,610,380 (1,421,061) 42,309, ,256,463 4,035,071 (1,421,061) 14,870, ,439, ,058,318 19,610,380 (1,421,061) 207,247,637 95,276,285 14,156,493 (1,421,061) 108,011,717 99,235,920 4,656,530, ,944,221 (6,969,119) 4,928,505, ,939, ,057,947 (4,574,320) 465,423,480 4,463,082,010 Annual Report

158 Southeast Bank Limited and its subsidiary Schedule of fixed assets including premises, furniture and fixtures as at 31 December 2010 AnnexureF.1 Particulars Balance as at 1 January Additions during the year Cost/Revaluation Depreciation Revalued during the year Disposal during the year Balance as at 31 December Rate of dep. % Balance as at 1 January Charged during the year Adjustment for disposal during the year Balance as at 31 December Written down value as at 31 December Own assets Office: Land 1,656,437, ,675, ,827,262 2,784,940, ,784,940,544 Building 636,888, ,301, ,089,446 1,065,280, ,853,699 16,572,347 75,426, ,854,193 Furniture and fixtures 261,079,269 86,192, ,271, ,729,316 25,033,403 67,762, ,508,833 Office Appliances 2,903,869 1,552,543 (187,350) 4,269, ,630, ,744 (187,350) 1,796,456 2,472,606 Electrical Appliances 178,512,343 72,684, ,196, ,135,375 32,252,654 84,388, ,808,727 Motor vehicles 1,479,933 40,000 (10,000) 1,509, ,463,599 1,463,599 46,334 2,737,301, ,446,839 1,053,916,708 (197,350) 4,454,468, ,812,051 74,212,148 (187,350) 230,836,849 4,223,631,237 Residence of executives: Furniture and fixtures 1,645, ,000 (150,000) 1,895, , ,825 (61,584) 616,167 1,279,123 Electrical Appliances 10,483,694 1,800,000 (1,175,000) 11,108, ,896,237 1,054,576 (740,261) 6,210,552 4,898,142 12,128,984 2,200,000 (1,325,000) 13,003,984 6,435,163 1,193,401 (801,845) 6,826,719 6,177,265 2,749,430, ,646,839 1,053,916,708 (1,522,350) 4,467,472, ,247,214 75,405,549 (989,195) 237,663,568 4,229,808,502 Leased assets Furniture and fixtures 106,051, ,051, ,471,014 6,958,021 43,429,035 62,622,192 Electrical Appliances 58,886,808 58,886, ,766,780 4,824,007 39,590,787 19,296,021 Motor vehicles 15,657,988 9,998,338 (1,536,043) 24,120, ,984,589 3,807,916 (1,536,042) 12,256,463 11,863, ,596,023 9,998,338 (1,536,043) 189,058,318 81,222,383 15,589,944 (1,536,042) 95,276,285 93,782,033 2,930,026, ,645,177 1,053,916,708 (3,058,393) 4,656,530, ,469,597 90,995,493 (2,525,237) 332,939,853 4,323,590, Annual Report 20 10

159 "Accounting year" Southeast Bank Limited and its subsidiary Schedule of fixed assets including premises, furniture and fixtures as at 31 December 2010 AnnexureG "Assessment year" "Tax provision as per accounts" "Tax demand as per assessment order" Tax paid "Tax Excess/(Short) provision Excess/(Short) paid "Status of assessment/ pending with" ,257,419 28,000,000 41,305,000 85,000, ,500, ,492, ,986, ,337, ,514, ,275, ,000,000 1,354,633,782 1,247,747,625 1,581,579,531 12,238,230 41,534,700 72,691,434 75,685,833 99,878, ,819, ,452, ,021, ,885, ,135, ,994,743 1,217,328,007 1,252,928,926 1,550,769,453 12,238,230 34,012,284 42,494,020 75,685,833 99,878, ,819, ,452, ,021, ,314, ,135, ,994,743 1,217,328,007 1,252,928,926 1,550,769,453 (8,980,811) (13,534,700) (31,386,434) 9,314,167 14,621,488 (37,327,477) (43,466,928) 41,315,910 (8,371,017) 51,139,778 (168,994,743) 137,305,775 (5,181,301) 30,810,078 (7,522,416) (30,197,414) 429,754 Final Appeal to High Court Appeal to High Court Final Final Final Final Final Final Final Final Final Final Return filed with DCT Annual Report

160 Southeast Bank Limited 'Names of Directors and their interest in different entities AnnexureH Sl. no. Name Status with the Bank Names of firms/companies in which interested as proprietor/director/managing agent/guarantor/employee/partner, etc. % of Shareholdings Mr. Alamgir Kabir, FCA Mr. Ragib Ali Mr. M. A. Kashem Mr. Azim Uddin Ahmed Mr. Tahnoun A. Harun (representative of Bangla Capital Limited) Mrs. Jusna Ara Kashem Mrs. Duluma Ahmed Mr. Syed Shahid Ali Mrs. Rehana Rahman Mr. Md. Akikur Rahman Mr. Monjur Miah Mrs. Sirat Monira Mr. Abdul Hye (representative of Karnafuli Tea Co. Ltd.) Dr. Zaidi Sattar Mr. A. H. M. Moazzem Hossain Chairman Vice Chairman Director Director Director Director Director Director Director Director Director Director Director Independent Director Depositor Director Asia Insurance Limited National Life Insurance Co. Ltd. The Sylhet Tea Co. Limited Rajnagar Tea Co. Limited Union Syndicate Limited Star Tea Estate Limited Rose Corner (Pvt.) Limited Mutual Food Products Ltd Mutual Milk Products Ltd. AD Holdings Ltd. Mutual Trading Co. Limited Incontrade Limited Portlink International Ltd. Bangla Capital Limited Carlton Holdings Ltd. Agricultural Logistics Ltd. Rose Corner (Pvt.) Limited Mutual Food Products Ltd. Mutual Milk Products Ltd. Mutual Trading Co. Limited Nil Bengal Tradeways Limited Drip Packaging Limited Nil Nil Nil Nil Nil International Publication Ltd. (Owning company of the Financial Express) 6.40% Nil 19.58% 41.67% 19.00% 34.51% 50.00% 53.30% 64.00% 50.50% 79.63% 0.13% 16.66% 20.00% 5.00% 90.00% 20.00% 31.78% 16.00% 12.96% 50.06% 25.00% 1.33% 158 Annual Report 20 10

161 Southeast Bank Limited Islamic Banking Branches Balance Sheet for the year ended 31 December 2010 AnnexureI PROPERTY AND ASSETS Cash: Cash in hand (including foreign currencies) 60,094,165 21,959,473 Balance with Bangladesh Bank and its agent bank 432,454, ,476,534 (Including foreign currencies) 492,548, ,436,007 Balance with other banks and financial institutions In Bangladesh 600,101, ,944 Outside Bangladesh 600,101, ,944 Placement with other banks and financial institutions Investments in shares & Securities Government 400,000,000 Others 1,450,313,250 1,850,313,250 Investments: General investments etc. 5,625,792,557 4,762,187,745 Bills purchased and discounted 509,701,445 80,009,851 6,135,494,002 4,842,197,596 Fixed assets including premises, furniture and fixtures 29,746,355 20,631,728 Other assets 1,935,599,507 5,056,348,789 Non banking assets Total assets 11,043,802,439 10,645,881,064 LIABILITIES AND CAPITAL Liabilities: Placement from other banks, financial institutions and agents 600,000,000 Deposits and other Accounts : Alwadeeah current and other deposit accounts etc. 463,601, ,118,186 Bills payable 5,445,592 74,738,770 Mudaraba savings deposits 1,146,483,758 2,127,856,375 Mudaraba term deposits 8,321,431,297 7,713,826,673 9,936,962,536 10,307,540,004 Other liabilities 506,839, ,341,060 Total liabilities 11,043,802,439 10,645,881,064 OFF BALANCE SHEET ITEMS Contingent liabilities Acceptances and endorsements 12,020,156, ,543,500 Letters of guarantee 6,034,183, ,550,910 Irrevocable letters of credit 15,013,644, ,984,539 Bills for collection 2,059,440,636 40,279,698 35,127,425,275 1,019,358,647 Other commitments: Total OffBalance Sheet items including contingent liabilities 35,127,425,275 1,019,358, Annual Report

162 Southeast Bank Limited Islamic Banking Branches Profit and Loss Account for the year ended 31 December AnnexureI Investment income 1,128,761,463 1,025,674,179 Profit paid on deposits, borrowings etc. (725,968,399) (686,847,168) Net investment income 402,793, ,827,011 Commission, exchange and brokerage 49,653,907 39,035,259 Other operating income 6,397,613 13,626,908 Total operating income 458,844, ,489,178 Salaries and allowances 46,786,488 35,445,111 Rent, taxes, insurance, electricity etc. 18,340,235 21,172,265 Legal expenses 10,750 23,050 Postage, stamp, telecommunication etc. 4,300,205 3,692,659 Stationery, printing, advertisement etc. 2,909,953 2,429,404 Depreciation and repair of Bank's assets 6,190,646 4,850,161 Other expenses 15,292,705 12,382,116 Total operating expenses 93,830,982 79,994,766 Profit /(loss) before provision 365,013, ,494,412 Provision for investments General provision 600,000 65,148,818 Specific provision 775,000 1,375,000 65,148,818 Provision for offbalance sheet items 6,190,896 10,193,500 Provision for diminution in value of investments 28,200,000 Total provision 35,765,896 75,342,318 Total profit/(loss) before taxes 329,247, ,152, Annual Report 20 10

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181 Southeast Bank Limited A B a n k W i t h V i s i o n 5253, Dilkusha Commercial Area, Dhaka1000, Bangladesh Phone: , , , , Fax: , , , SWIFT: SEBDBDDHXXX info@southeasbank.com.bd