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2 Annual Report 2007

Corporate Profile
Name of the Company : Southeast Bank Limited
Chairman : Alamgir Kabir, FCA
Vice Chairman : Tillaghar Holdings Limited
Contents Represented by Abdul Hye
Managing Director : Neaz Ahmed
2 Company Secretary : Muhammad Shahjahan
Corporate Philosophy and Performance
Legal Status : Public Limited Company
corporate profile 2
vision, missions and Date of Incorporation : March 12, 1995
commitments to clients 3 Registered Office : 1, Dilkusha C/A (3rd Floor), Dhaka-1000
10 years at a glance 4 Line of Business : Banking

5 Authorized Capital
Paid Up Capital
: Tk.3,500.00 million
: Tk.2,281.76 million
Governance
board of directors 5 Year of Initial Public Offer : 1999
management team 6 Stock Exchange Listing : April 10, 2000 (DSE) & April 24, 2000 (CSE)
chairmans report 8
Phone : 9550081, 9567271-2
from the desk of managing director 20
boards report to shreholders 22 Fax : 9550086, 9550092-94, 9571052-3
report on corporate governance 60 SWIFT : SEBDBDDHXXX
report on risk management 65 E-mail : info@sebankbd.com
report on corporate social responsibility 68
Website : www.sebankbd.com
report of the audit committee 70
report of the shariah council 71
value added statement 72
Economic Value Added Statement 73
Market Value Added Statement 74 Financial Calendar for 2007
75 Dividend declaration for 2006 March 21, 2007
Financial Statements Publication of Financial Statements-2006 March 28, 2007
auditors report to shareholders 75
Record date for 12th AGM April 04, 2007
financial statements 76
notes to the accounts 83 12th Annual General Meeting held April 22, 2007
Cash dividend paid April 28, 2007
123 Stock dividend credited May 10, 2007
Information to Shareholders Half yearly result (June 2007) announced July 30, 2007
notice of 13th AGM 123
list of branches 124
proxy form & attendence slip 127
February : Managers Conference held and Annual Budget discussed
March : 20% cash and 8% stock dividend declared for shareholders
April : 12th Annual General Meeting held
May : Total Deposit was over Tk. 52,000 mn
June : Credit rating A2 for Long Term and ST-2 for Short Term
July : Half-yearly operating profit reached Tk. 1,310 mn
August : Half-yearly Business Review and Managers' Conference held
October : 3rd quarter profit crossed last years total profit
November : Total loans and advances crossed Tk. 45,000 mn
December : Received Recognition Award (Banking Sector) from ICAB for
Best Published Accounts and Reports-2006
Annual Report 2007

Our Vision, Missions and Commitments to Clients

Our Vision
To be a premier banking institution in Bangladesh and contribute
significantly to the national economy.

Our Missions
v High quality financial services with state of the art technology
v Fast customer service
v Sustainable growth strategy
v Follow ethical standards in business
v Steady return on shareholders equity
v Innovative banking at a competitive price
v Attract and retain quality human resource
v Commitment to Corporate Social Responsibility

Our Commitment 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:
v Provide service with high degree of professionalism and use of modern
technology.
v Create long-term relationship based on mutual trust.
v Respond to customer needs with speed and accuracy.
v Share their values and beliefs.
v Grow as our customers grow.
v Provide products and services at competitive pricing.
v Ensure safety and security of customers' valuables in trust with us
4 Annual Report 2007

Ten years at a Glance

In Million Taka

PARTICULARS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Authorized Capital 500.00 500.00 500.00 500.00 2,500.00 2,500.00 2,500.00 2,500.00 3,500.00 3,500.00

Paid up Capital 150.00 300.00 330.00 363.00 399.30 677.16 880.31 1,056.37 2,112.74 2,281.76

Reserve Fund/ Others 85.13 145.70 235.28 394.20 571.66 622.98 769.13 1,180.47 2,828.18 4,186.60

Total Capital (Tier-I+Tier-II) 235.13 445.70 565.28 757.20 970.96 1,300.14 1,649.44 2,236.84 4,940.92 6,468.36

Deposit 5,483.39 7,512.49 8,569.70 10,570.25 15,343.45 19,618.82 27,930.84 38,258.15 46,056.18 55,474.05

Advance 3,402.21 5,051.88 7,061.87 9,178.03 13,027.13 15,541.50 22,001.70 32,551.09 41,147.28 48,164.60

Investment 509.73 971.81 1,369.92 1,727.44 2,282.08 2,581.61 3,190.15 5,113.14 6,265.55 8,462.86

Import Business 6,852.19 8,228.50 11,239.14 12,187.37 12,817.01 16,270.80 20,229.62 29,079.30 35,125.12 38,470.34

Export Business 353.43 704.47 1,319.51 2,675.05 2,263.45 3,033.79 6,761.93 13,511.10 25,874.61 28,771.36

Guarantee Business 744.92 907.18 1,306.24 1,854.50 2,502.48 3,391.19 4,717.82 7,975.00 8,656.80 9,008.32

Total Income 727.53 862.86 1,259.03 1,748.18 1,936.54 2,772.52 3,043.49 4,689.55 6,766.11 8,670.47

Total Expenditure 556.87 661.02 921.70 1,256.05 1,443.98 2,107.36 2,234.83 3,216.11 4,703.45 5,754.27

Operating Profit 170.66 201.84 337.33 492.13 492.56 665.16 808.66 1,473.44 2,062.66 2,916.20

Net Profit after Tax and Provision 98.01 170.48 172.84 270.74 253.56 256.06 294.69 374.20 909.88 1,222.97

Fixed Assets 85.92 78.37 71.13 36.26 48.81 288.02 313.73 790.62 1,300.39 1,708.11

Total Assets 5,962.71 8,336.17 11,710.56 14,468.66 18,882.48 23,135.74 33,744.96 43,294.81 53,706.12 64,370.69

Earning per Share (Tk.) 45.38 56.99 57.61 82.04 69.85 45.38 43.52 35.42 59.71 53.60

Cash (%) 15% 25% 30% 20% 20% 20% 15%


Dividend
Bonus Shares 20% (5:1) 10%( 10:1) 10% (10:1) 10% (10:1) 20% (5:1) 30(10:3) 20%(5:1) 8%(12.5:1) 25% (4:1)

Return on Equity (ROE) 41.68% 38.25% 30.58% 35.76% 26.11% 19.69% 17.87% 17.64% 17.98% 19.90%

Return on Asset (ROA) 1.64% 2.05% 1.48% 1.87% 1.34% 1.11% 1.00% 0.86% 1.66% 1.90%

Non Performing Loan 4.25% 3.75% 2.95% 2.78% 1.99% 2.09% 4.96% 4.37% 3.97% 3.77%

Capital Adequacy Ratio 8.16% 9.52% 8.40% 8.77% 8.23% 9.20% 7.83% 6.90% 11.50% 13.00%

Number of Correspondent Banks 32 34 39 40 45 80 122 130 138 140

Number of Foreign Correspondents 238 253 269 280 295 350 463 507 536 598

Number of Shareholders 27 1129 1266 1429 1666 2912 4704 5750 8,855 9,636

Banking 369 399 445 479 488 586 685 759 845 964
Number of
Employees
Non Banking 78 81 83 96 107 115 150 154 153 152

Number of Branches 12 12 12 13 19 23 27 31 31 38
Annual Report 2007

Board of Directors

Chairman Executive Committee


Alamgir Kabir, FCA
Chairman
Vice Chairman
Alamgir Kabir, FCA
Abdul Hye
representing Tillaghar Holdings Limited
Members
Abdul Hye
Directors
Sultana Kashem
MK Holdings Limited represented by
Farzana Azim
Sultana Kashem
Tanveer Harun
AD Holdings Limited represented by
Neaz Ahmed
Farzana Azim
Bangla Capital Limited represented by
Tanveer Harun
Rehana Rahman
Sirat Monira Audit Committee
Karnafuli Tea Co. Limited represented by
Dewan Mustaq Majid Chairman
Abdul Hye

Managing Director Members


Neaz Ahmed Sultana Kashem
Farzana Azim

Company Secretary
Muhammad Shahjahan
Shariah Council
Chairman
Moulana Md. Aminul Islam
(expired on 19.11.2007, Inna Lillahe...)

Vice Chairman
Professor Moulana Mohammad Salah-Uddin

Members
A. S. M. Fakhrul Ahsan
Alamgir Kabir, FCA
M. A. Kashem
Ragib Ali
Azim Uddin Ahmed
Neaz Ahmed
6 Annual Report 2007

Management Team

Managing Director
Neaz Ahmed

Deputy Managing Directors


M. A. Muhith
Syed Imtiaz Hasib

Senior Executive Vice Presidents Vice Presidents


Saleh Uddin Ahmed Mozammel Hossain Chowdhury
Mohammed Gofran Md. Shamsul Huda
Muhammad Shahjahan Anwar Uddin
Giash Uddin Ahmed Mahfuzur Rahman Khan
S. M. Mainuddin Chowdhury Mirza Akhteruzzaman Begg
Kamal Uddin
Mahbubur Rahman Shabbir
Golam Akbar Chowdhury
Syed Nurul Bashar
Executive Vice Presidents Mohammed Hafizur Rahman
Shahabuddin Md. Jafar Nur Hossain Chowdhury
Shahid Hossain
A. F. M. Shariful Islam
Lutful Kabir
A. K. M. Nurul Alam
Md. Anwar Hossain First Vice Presidents
Abdul Hamid Mia Md. Abdul Naim
Fazle Kader Ahmed
Md. Shahjahan Sarker
Shafiur Rahman
Md. Zakir Hossain
Senior Vice Presidents Abdul Batin Chowdhury
Md. Altafur Rahman Nuruddin Md. Sadeque Hussain
M. Kamal Hossain Arun Chandra Paul
Haradhan Banik Md.Saidur Rahman
Md. Abdul Wali Delowar Hossain
Md. Sawkat Hossain Md. Giash Uddin Bhuiyan
Mustafizur Rahman Saiful Islam Chowdhury
Pritish Kumar Sarker Badruddoza Khan
Shahid Atiqul Islam
Mohammad Mahmud Hasan
Annual Report 2007

Respected Members of the Board of Directors at the 12th Annual General Meeting held on April 22, 2007.

A partial view of the respected Shareholders at the 12th Annual General Meeting held on April 22, 2007.
Alamgir Kabir, FCA

Chairmans Report
Bismillahir Rahmanir Rahim
Dear Shareholders:
Assalamualikum
I warmly welcome you all to the 13th Annual General Meeting of respected shareholders of Southeast
Bank Limited. I would like to thank you for your continued interest in and support for the Bank. As the
Chairman of the Bank, I would also like to place before you a report on the position of the Bank and its
future prospects.

01. The Year 2007 In Retrospect for Southeast Bank Limited


The year 2007 witnessed the implementation of numerous new initiatives to enhance operational
efficiency and profit to maximize shareholder value amid ever-increasing competitive environment and
rising customer expectations. Substantial progress was achieved in the key areas of operations which we
identified as priorities : augmenting profit, effective risk management, growing and diversifying revenue
streams. I am pleased with the Banks success in 2007. The excellent results reflect the tremendous efforts
and total commitment displayed by our management and staff. I offer my personal thanks to all our
employees for their invaluable contributions.
Despite sluggish economic scenario and fall in Gross Domestic Product (GDP) following corrective
actions by the Caretaker Government to free the economy from corrupt elements, Southeast Bank earned
an operating profit of Tk.2,916.20 million in 2007 as against the last years operating profit of Tk.2,062.66
million, thus, posting a growth of 41.38%. During the year, Banks net profit stood at Tk.1,222.97 million
which is 34.41% higher than the net profit of Tk.909.88 million earned in the previous year. We believe,
earning profit is the outcome of prudence, accuracy in evaluating market trends and timely execution of
strategies than a matter of chance.
The deposits of the Bank stood at Tk.55,474.05 million as at 31st December, 2007. In the year 2007, the
Bank conducted export business for Tk.28,771.36 million, import business for Tk.38,470.34 million,
guarantee business for Tk.9,008.32 million and foreign remittance for Tk.11,040.17 million. The total
outstanding credit of the Bank to the borrower customers amounted to Tk. 48,164.60 million as on 31st
December, 2007. In spite of increase in the volume of total credit to customer by 17.05%, the non
performing assets of the Bank remained at the tolerable level because of strict analysis of credit proposals
before their approval, post disbursement regular monitoring and adequate securitization. As soon as any
Annual Report 2007

loan account showed any sign of weakness because of diverse reasons, it was put in the watch-list and
regularly monitored for timely adjustment.
Southeast Bank embarked through the charted course in 2007 to achieve the desired operational
excellence as is evident from the results of the year. Since the process set to achieve budgeted targets was
successfully completed, it ultimately resulted in an excellent set of financial results. Our inspiring earning
of high profit coupled with our qualitative growth initiatives put the Bank on the right course to achieve
further success in coming years.

02. Capital Structure


Southeast Bank Limited is a highly capitalized Bank. Its Authorized Capital is Tk.3,500 million while its
Paid Up Capital is Tk.2,281.76 million as on 31st December, 2007. The total shareholders equity reached
Tk.6,144.47 million as on 31st December, 2007.
Our Capital Management framework is designed to ensure that the Bank maintains sufficient Capital
consistent with the Banks risk profile, all applicable regulatory requirement and credit rating
considerations. The Capital Management process is constantly reviewed by the Senior Management of the
Bank. It is frequently reviewed by the Board and suitable decisions are taken to increase capital.

03. Corporate Governance


Southeast Bank has been practicing corporate governance principles in all its activities. With the passage
of each year, the principles of corporate governance in practice are strengthened. Good corporate
governance practices are now firmly embedded in all our activities and its principles are inculcated in the
team work of employees.
Our corporate governance puts the focus not only on business risks and the companys reputations but
also on our corporate social responsibility to promote corporate fairness, transparency and accountability
to all stakeholders of the Bank. In course of our activities as a responsible corporate citizen, we maintain
respect for the society and the environment, communicate in an open and transparent manner and act in
accordance with the legal provisions contained in the Companies Act-1994, the Bank Company Act-1991
as amended from time to time and the rules and regulations of all regulatory agencies.
The operational and corporate secretarial activities of the Bank are under constant and effective
supervision of Bangladesh Bank, Securities and Exchange Commission, Dhaka Stock Exchange Limited,
Chittagong Stock Exchange Limited and Registrar of Joint Stock Companies and Firms. We comply with
all their requirements in respect of capital and reserve, statutory reserve, liquidity, periodical returns, anti-
money laundering practices, disclosure of price sensitive information, insider trading, dividend
declaration, appointment of Directors, management of companys securities, credit control, company
management, Boards supervision etc.
The Board of Directors of the Bank is collectively responsible for promoting the success of the Bank by
directing and supervising the companys policy and strategy and is directly responsible to shareholders for
its financial and operational performance. To look after urgent issues and dispose of credit-related and
other administrative and financial proposals, an Executive Committee of the Board comprising 6 (six)
Directors including the Managing Director has been constituted. Besides, an Audit Committee comprising
3 (three) Directors of the Bank has been constituted to effectively monitor Banks internal control,
compliance and audit functions.
The Board of Directors and the Management of the Bank are fully committed to high standard of corporate
governance, compliance with all the requirements of regulatory bodies, ethical standard in operations and
accountability to shareholders. Our corporate objective is to build Southeast Bank as a truly dynamic and
leading banking institution, a powerhouse with outstanding service quality and attractive products for its
customers, excellent career progression opportunities for its employees and high value potential for its
shareholders.

04. Competitiveness
By Competitiveness, we mean relative position of one competitor against other competitors individually.
It has become a prominent business for us. As a financial institution, we always address our desire to
remain competitive in the economy. We try to acquire and expand ability to deliver quality products and
10 Annual Report 2007

Chairmans Report

services in a highly competitive environment. By our competitiveness, we try to succeed in attaining a


favorable ranking and to reinvent ourselves to changing market conditions. We compare actual
performance with a pre-determined standard and take suitable actions required to ensure that all corporate
resources are used in the most effective and efficient way possible in achieving corporate objectives. We
also give attractive pay packages to the members of our staff to attract and retain the best human resource
in the Bank.

05. Independent Credit Rating of the Bank


Credit Rating Agency of Bangladesh (CRAB), an independent credit rating agency conducted credit rating
of our Bank. In their report dated March 30, 2008, they rated the Bank as A1 for the long term. Commercial
Banks rated in this long-term category are adjudged strong banks, characterized by good financials, healthy
and sustainable franchises and a first-rate operating environment. This level of rating indicates strong
capability for timely payment of financial commitments.

06. Senior Management Team


Our Bank intends to be a provider of financial services maintaining fairness, transparency and sound
management based on the principles of individual and collective responsibility. For this purpose, we
operate efficiently and take a long term view of our business for continuous improvement by
implementation of best practices.
To augment the purpose of sound management, we have a strong and efficient Senior Management Team
ably headed by Mr. Neaz Ahmed, Managing Director of the Bank. They have already implemented better
business practices. They are capable of bringing about further development in the Banks business. The
satisfactory financial results of the Bank in 2007 reflect the capability of the Banks senior management
team supported by their executives and officers.

07. Risk Management


Financial and economic deregulation, globalization and the advancement in Information Technology and
Communication have generated new business opportunities for Banks. The risks accompanying these
business are not only increasing in number but also growing in diversity and complexity. Our risk
management is a process of identifying, measuring analyzing, monitoring and controlling risks. The
objective of our risk management is to ensure that the Bank operates within the risk levels set by the Board
of Directors.
We conform to the following principles in our Risk Management Practices:
1. To define risk profile on the basis of our risk tolerance.
2. To determine risks and analyze them from the beginning with the help of our risk strategy.
3. To integrate Risk Management in different levels of the Management.
4. To allocate resources for different risks.
5. To comply with regulatory requirements and guidelines for Risk Management.
6. Risk reports are submitted before the Board and the Board regularly monitors risks to keep them
within the acceptable level.

08. Information Policy


Southeast Bank informs regulatory authorities, shareholders and the public in an open, transparent and
timely manner relating to its operational performance and progress made towards achievement of
corporate goals. Equal treatment to all shareholders is the guiding principle behind our partnership
oriented approach. We practice and nurture an open dialogue with our shareholders based on mutual
respect and trust. This promotes an understanding of our objectives and ensures a high degree of
awareness about our company.
The most important tools for the outflow of information from the Bank are annual reports, half-yearly
financial statements, media releases, disclosures to regulatory authorities, annual general meetings, extra-
ordinary general meetings etc. Besides, Banks website: www.sebankbd.com is rich with corporate
information.
Annual Report 2007

Chairmans Report

09. Our People


People working in the Bank are our best assets. We aspire to be the employer of choice. We want to
attract, train, and retain talented people in the service of the Bank. The dedication, skills and
professionalism of our employees are factors that contribute to the success of our Bank.
We want to create a demanding and rewarding environment which encourages our dedicated people to
flourish and excel. We encourage them to utilize their talents and skills to drive their career as well as
the Banks business forward. In human resource management, we focus on the following :
i) Continuous training and acquiring of new skills.
ii) Empowering people and creating a congenial work environment.
iii) Staff briefing
iv) Competitive compensation package
v) High end-service benefits which include Gratuity, Contributory Provident Fund,
Superannuation Fund etc.
vi) Liberal bonus policy
vii) Encouraging innovation
viii) Quality employees
ix) Equal opportunity
Bonded by common goals, each of our employees is truly proud to be a member of Southeast Bank
Limited.

10. Southeast Bank Shares


The share of Southeast Bank Limited is one of the most actively traded stocks on the Dhaka Stock
Exchange (DSE) and Chittagong Stock Exchange (CSE). Ours is the first Bank whose paper shares were
converted into electronic shares in Central Depository System in 2004. As on 31st December 2007, we
have 9636 shareholders. The shares of the Bank are held by a cross-section of people and institutions.

11. Customer Service


Customer Service is a question central to our concern. There is no limit to our ability to develop customer
convenience and choice. The investments we are making in our customers on a daily basis are extremely
beneficial to them. We will continuously help them realize their desires and dreams. Our Banks name
is synonymous with speed, trust, reliability and convenience for our all customer segments. We always
look for new and better ways to serve our customers.
Our customers want to be treated on priority basis with an access to the top of the range financial services
and products. We also aim to be the best in our industry for customer service. We firmly believe our
profitability, growth and market share of business depend on our quality of customer service. We provide
a full range of financial services to individuals, small and medium sized companies, entrepreneurs and
corporate bodies. In our customer service, we focus on the following:
i) Achievement of core competencies in all our business processes.
ii) Improvement of service standard.
iii) Addressing complaints / suggestions for improvement of service.
iv) Enrichment of products.
v) Speedy Service
vi) Service accuracy
vii) Fair treatment

12. Expansion of Network


In line with the Banks target of moving closer to the people, the Bank increased its network of branches
to reach a total of 38 branches in 2007 of which 5 (five) are Islamic Banking branches and 8 (eight) are
rural branches. Besides, we have shared ATMs all over the country to ease our customers quick
requirement of cash money.
12 Annual Report 2007

Chairmans Report

We shall rapidly expand our network of branches and volume of business further in the coming days. We
foresee many opportunities mixed with challenges ahead. We are ideally positioned to harness those
opportunities.

13. Our preparedness for Basel - II


Guidelines prescribed under New Capital Accord known as Basel II comprise the following
components:
a. Minimum Capital Requirement
b. Supervisory Review Process, and
c. Market Discipline.
The Prescribed guidelines are being implemented in the Bank. The Bank aims to create an environment
for Risk Management to identify and measure risks and report all important risk information distributing
capital within the framework of Basel II. In order to limit the risk taking within the prudential levels, we
always try to maintain a minimum level of capital to act as a cushion against unexpected losses arising
from our investments.
For migration to Basel II and to ensure that the Bank remains Basel II compliant, we have since
increased the Paid-Up Capital of the Bank to Tk.2,281.76 million. We are going to raise the Paid-Up
Capital further to Tk.2,852.19 million by issuance of bonus shares at 25% in 2008.
We are promoting safety and soundness in our financial system and augmenting the process of supervisory
control and market discipline. Bangladesh Bank has taken a proactive approach in implementing Basel II
for all Banks in Bangladesh by January 1, 2009 and made credit rating mandatory for all Banks. The Credit
Rating of Southeast Bank Ltd. was done by Credit Rating Agency of Bangladesh (CRAB) and they rated
the Bank A1 for the long term.
In order to ensure gradual and smooth transition to Basel II, Bangladesh Bank asked the Banks in
Bangladesh to maintain capital adequacy ratio at minimum 10% with effect from January 01, 2008. Our
Capital adequacy is 13.00% as on 31st December 2007. We have already shifted our focus from operating
profit to economic profit.

14. Our Budgetary Control


Our budget is a comprehensive and co-ordinated plan expressed mostly in financial terms for the
operations and resources of the Bank for a specific period. It is intended to promote an orderly
administration of the financial resources and efforts of the people entrusted towards achievement of
budgeted targets. The Board of Directors, therefore, monitors periodically the progress of the Bank
towards achievement of budget.

15. Corporate Social Responsibility


In recent years, there has been growing recognition and acceptance that the behavior of business houses
is an important factor in influencing a wide range of social, environmental, community and ethical issues.
Our customers want to be treated fairly. Our regulators want to be confident that we operate within the
logical and ethical standard with fairness, transparency and honesty. Our staff members want to be paid
competitively and treated with respect. Our shareholders want to be assured that we consider the risks
and opportunities while taking business decision and pay good dividend every year. The social spectrum
under which we operate desires that we carry on our business responsibly and positively contribute to the
society and the environment. We are committed to responsible business practices and to a policy of
continuous improvement in applying sound environmental and social standards in our dealings with all
our stakeholders.
In 2007, we have supported charitable ventures, relief operations, environment protection, education, art,
culture, sporting events and have come to the aid of poor people for treatment of serious diseases. We
have established Southeast Bank Foundation to do social work for community development. The
foundation has provided direct financial support to numerous charities, events and organizations.
Annual Report 2007

Chairmans Report

16. Outlook for 2008


Southeast Bank remains deeply committed to its vision of becoming a premier banking institution in
Bangladesh and contribute significantly to the national economy. The Bank intends to embrace the best
practices and technology. It provides first-class products, financial services and solutions to its customers.
The Bank is already in the process of choosing a robust and integrated software to provide more value
added services to them.
The network of the Bank will be increased by 12 (twelve) more branches to reach 50 in 2008 subject to
licence from Bangladesh Bank. We shall continue to make significant investments for more talented and
experienced people to help our customers realize their dreams. We shall continue to follow and improve
good corporate governance practices, sound risk management policy, modern human resource policies
and strictly maintain quality of our assets to elevate the Bank gradually to the pinnacle of glory.
We will make every effort to achieve Return on Equity of more than 20%, operating profit of Tk.4,000.00
million in 2008, maintain required capital adequacy ratio and limit classified loan at a tolerable level. By
achieving these targets, we foresee to be better placed to exploit fully the market potentials we see for
our profitable growth. We are confident that our execution of strategy will create further value for our
shareholders.
We have another extremely busy and exciting year 2008 in front of us. We hope to complete the co-
ordination and integration of our initiatives. We shall seek to attract additional financial, human and
material resources to manage our institution with the intention to create more value for shareholders,
customers, employees and the society. For obvious reasons, we look at the year 2008 with a considerable
optimism. However, as forward looking statements involve risk and uncertainties, it should be viewed
accordingly.

17. Acknowledgement
I owe my gratitude to Almighty Allah for the success of the Bank in 2007. I also take this opportunity to
thank the members of the Board of Directors for their collective effort during the year for bringing
qualitative changes in the Bank. I would like to thank the Management Team and Staff members for their
dedication and commitment, without which, the Bank could not maintain the sequence of striving
towards reaching higher echelon of excellence. I respect their inner zeal to work hard to reach newer
heights of success.
My sincerest thanks go to our respected shareholders, valued customers, patrons, well-wishers,
Government of the Peoples Republic of Bangladesh, Bangladesh Bank, Securities and Exchange
Commission, Dhaka Stock Exchange Ltd., Chittagong Stock Exchange Ltd., Registarar of Joint Stock
Companies and Firms and all others concerned for giving us the benefit of their continued support, co-
operation, and guidance. We greatly value their continued support and co-operation which are our
constant source of encouragement. We renew our promise to remain most disciplined, compliant and
result-oriented. While we look forward to their continuous support and co-operation with trust and
confidence, we believe, on present indications and the prospects, our respected shareholders can expect
more satisfactory results in 2008.
While we look hopefully towards a bright and enduring future, we pray to Almighty Allah to bestow His
unbound blessings upon us for continued success.

Allah Hafiz

With warm regards,

Sincerely,

Alamgir Kabir, FCA


Chairman
14 Annual Report 2007

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knKO f IVJKiTJrkJ P Igtmy xJluq IK\tf yP~PZ xf TJrPeA, 2007 xJPu mqJPTr xJlPuq @Ko UMmA @jKf
mqJPTr IK\tf CPuUPpJVq xJluq mMf:kP mqJPTr mqmJkjJ Tftk S xmtPrr TotTftJ-TotYJrLPhr TPbJr kKrvso
Fm hO| ILTJPrr lxu TotTftJ-TotYJrLPhr F IoNuq ImhJPjr \jq @Ko fJPhr ijqmJh \JjJK
hPvr IgtjLKfPT hMmOtoM TrJr fJmiJ~T xrTJPrr k~JPxr kanNKoPf IgtQjKfT TotTJP KTZaJ vgVKf Fm oJa
InqrLe CkJhj yJx kJS~J xPS, 2007 xPj xJCgA mqJT 2,916.20 KoKu~j aJTJ kKrYJuj oMjJlJ I\tj TPr
2006 xPj kKrYJuj oMjJlJr kKroJe KZu 2,062.66 KoKu~j aJTJ F P kmOKr yJr vfTrJ 41.38 nJV Vf mZPrr
909.88 KoKu~j aJTJ jLa oMjJlJr KmkrLPf @PuJYq mZr mqJT 1,222.97 KoKu~j aJTJ jLa oMjJlJ I\tj TPr F P
kmOKr yJr vfTrJ 34.41 nJV @oJPhr KmPmYjJ~ oMjJlJ @~ TJj hKmT mqJkJr j~ mr FaJ yP xJKmtT hMrhvtLfJ,
xMKmPmYjJ Fm KjntMufJr xJPg mJ\Jr KmPvwPer lxu
31v KcPxr 2007 A fJKrPU mqJPTr @oJjPfr kKroJe hJKzP~PZ 55,474.05 KoKu~j aJTJ~ I mZr mqJT
28,771.36 KoKu~j aJTJr rJjL mJKe\q, 38,470.34 KoKu~j aJTJr @ohJjL mJKe\q, 9,008.32 KoKu~j aJTJr VqJrJK
mqmxJ Fm 11,040.17 KoKu~j aJTJr KmPhv gPT hPv Igt kre kKrYJujJ TPrPZ 31Pv KcPxr 2007 A fJKrPU
VJyTPhr TJPZ mqJPTr mPT~J EPer kKroJe hJKzP~PZ 48,164.60 KoKu~j aJTJ~ Vf mZPrr fujJ~ oJa Ee vfTrJ
17.05 nJV mOK kPuS, Ee oMrLr kNPmt TPbJr KmYJr-KmPvwe, Ee KmfrPer kr xJmtKeT fhJrTL Fm kptJ \JoJjf
xrPer TJrPe mqJPTr UuJKk EPer kKroJe xyjL~ kptJP~ rP~PZ KmKmi TJrPe pUjA TJj Ee KyxJPm hMmtufJ
kKruKf y~ fUjA x KyxJmPT KmPvw fhJrTLr @SfJ~ FPj xo~of xojP~r \jq mqmJ Vye TrJ y~
InL uPq kRZJr \jq mqJPTr IKnpJJ 2007 xPjS ImqJyf gJPT Fr luvKfPf p BKf kKrYJuj xJluq IK\tf
yP~PZ fJ 2007 xPj mqJPTr mqmxJK~T luJlu gPT xM mJP\a uqoJJ I\tPj mqJPTr VOyLf kK~J CPuUPpJVq
@KgtT xJluq I\tPjr oJiqPo UMmA xPJw\jTnJPm xoJ yP~PZ F mZr @oJPhr CxJymqT C oMjJlJ @~ Fm
eVf kmOK I\tPjr iJrJ @VJoL mZrPuJPfS mqJTKaPT IKiT xJluq I\tPjr kPg kKrYJKuf TrPm

02. oNuij TJbJPoJ


xJCgA mqJT FTKa C oNuij-Kjntr mqJT mqJPTr IjMPoJKhf oNuiPjr kKroJe 3,500 KoKu~j aJTJ 31v KcPxr
2007 A fJKrPU mqJPTr kKrPvJKif oNuiPjr kKroJe KZu 2,281.76 KoKu~j aJTJ Fm v~JrPyJflJrPhr oJa ATqAKar
kKroJe KZu 6,144.47 KoKu~j aJTJ
@oJPhr oNuij mqmJkjJr uq yP mqJPTr KmhqoJj ^KTPuJr xJPg xKf rPU kptJ kKroJe oNuij xre,
fhJrTTJrL TftkPr keLf F xJ KmKi-KmiJPjr kKrkJuj Fm mqJPTr nJu Kca rKa I\tPjr \jq vft kNre
mqJPTr Ctfj mqmJkjJ Tftk oNuij mqmJkjJr Kmw~JmuL xJmtKeTnJPm kptJPuJYjJ TPr gJPT mqJPTr kKrYJujJ
kwth oNuij mqmJkjJr Kmw~JmuL kptJPuJYjJP oNuij mJzJPjJr fkNet KxJ pgJxoP~ Vye TPr gJPT

03. TJJjL xMvJxj


xJCgA mqJT KuKoPac Fr xTu TotTJP TJJjL xMvJxj jLKfoJuJ IjMxre TPr @xPZ kKf mZrJPA TJJjL
xMvJxj mqmJ \JrhJr yP TJJjL xMvJxj xJ @YJr-@Yre mqJPTr xTu TJptPo hO|nJPm VLf Fm Fr
jLKfoJuJxoNy TotTftJ-TotYJrLPhr Tot-xJhPj kKflKuf y~
Annual Report 2007

Y~JroqJj oPyJhP~r kKfPmhj

@oJPhr TJJjL xMvJxj Tmu TJJjLr mqmxJK~T ^KT Fm Fr xMjJPor kKf AKfmy j~ mr TJJjLr xJoJK\T
hJ~mfJr kKfS @PuJT-xPTf TJJjLr jqJ~-krJ~efJ, fJ Fm v~JrPyJflJrxy JgtKm\Kzf xTu kPr kKf
hJ~mfJr Cj~j TJJjL xMvJxPjr uq hJK~fvLu TJJjL KyPxPm @oJPhr TotTJ kKrYJujJ~ @orJ xoJ\ S
kKrPmPvr kKf vsJvLu, UJuJ oPj Fm fJr xJPg @orJ fgq xrmrJy TKr TJJjL @Aj-1994, xoP~ xoP~
xPvJKif mqJT TJJjL @Aj-1991 Fm fhJrTTJrL TftkPr keLf KmKi-KmiJj kKrkJuj TPr @orJ @oJPhr Tot-
xJhj TPr gJKT
mqJPTr kKrYJuj Fm TJJjL mqmJkjJ xJ TJptJmuL mJuJPhv mqJT, KxKTCKrKa\ F FPY TKovj, dJTJ T
FPY, YVJo T FPY Fm pRg TJJjL S kKfJjxoNPyr KjmT knOKf fhJrTTJrL TftOkPr xJmtKeT Fm
TJptTr j\rhJKrr IiLPj kKrYJKuf y~ oNuij S Kr\Jnt, xKmKim Kr\Jnt, fJruq, KraJjt hJKUu, oJKj uJKr kKfPrJi,
oNuq-xPmhjvLu fgq kTJv, InqrLe v~Jr ujPhj, unqJv WJweJ, kKrYJuT KjP~JV, TJJjLr v~Jr mqmJkjJ,
Ee Kj~e, TJJjL mqmJkjJ, kKrYJujJ kwtPhr j\rhJKr, knOKf KmwP~ fhJrTTJrL TftkPr xTu KmKi-KmiJj @orJ
FTKjnJPm kKrkJuj TPr gJKT
mqJPTr kKrYJujJ kwtPhr xhxqmO xKKufnJPm mqJPTr xJlPuqr Cj~j, KhT-KjPhtvjJ Fm TJJjLr jLKf S TRvu
kP~JPVr \jq hJK~fkJ Tfk
t kKrYJujJ kwth TJJjLr @KgtT S kKrYJuj TJptPor KmwP~ v~JrPyJflJrPhr xrJxKr
ImKyf TPr gJPT \rL Kmw~JmuL hUJjJ TrJ Fm Ee, kvJxKjT S IjqJjq @KgtT kJmJmuL KjKr \jq mqmJkjJ
kKrYJuTxy 6 (Z~) \j kKrYJuT xojP~ mJPctr KjmtJyL TKoKa Vbj TrJ yP~PZ fJZJzJ, mqJPTr InqrLe Kj~e,
KmKi-KmiJj kKrkJuj Fm IKca TJptJmuL kptPmPer \jq 3 (Kfj) \j kKrYJuT xojP~ IKca TKoKa Vbj TrJ yP~PZ
kKrYJujJ kwth Fm mqmJkjJ Tftk mqJPTr C TJJjL xMvJxj oJj m\J~, fhJrTTJrL TftkPr KmKi-KmiJj
kKrkJuj, kKrYJuj TotTJP jqJ~-jLKf kP~JV Fm v~JrPyJflJrPhr kKf IKktf hJK~f kJuPj kKfvKfm @oJPhr
TJJjLr uq yP xJCgA mqJTPT kTf kPA FTKa VKfvLu S vLwtJjL~ mqJKT kKfJPj kJKrf TrJ p
mqJPTr VJyT xmJ Ijjq, VJyTPhr \jq xmJ-keq @TwtjL~, TotTftJ-TotYJrLPhr YJTrLPf YoTJr KmTJPvr xMPpJV Fm
v~JrPyJflJrPhr xh mOKr kPYJ @KrT S kvJfLf

04. kKfPpJKVfJ
kKfPpJKVfJ muPf @orJ FTaJ kKfPpJVLr xJPg Ijq kKfPpJVLr fujJoMuT ImJjPT mMP^ gJKT kKfPpJKVfJ @oJPhr
\jq FTKa IfLm fkNet Kmw~ @KgtT kKfJj KyPxPm, IgtjLKfPf @orJ kKfKj~f kKfPpJKVfJ~ IPV ImJj TrPf
@VyL kKfPpJKVfJoNuT kKrPmPv Cjf xmJ-keq S VJyT xmJ khJPjr kNmtvft KyPxPm @orJ kP~J\jL~ hfJ I\tj
S mKitf TrPf xhJ xPY kKfPpJKVfJr oJiqPo @orJ FTKa xJj\jT ImJj kPf @VyL kKrmftjvLu mJ\Jr ImJj
xPTt @orJ xhJ xPYfj kNmt KjitJKrf uPqr xJPg @orJ @oJPhr kTf kP IK\tf xJlPuqr fujJoNuT KmYJr-KmPvwe
TPr gJKT TJJjLr uoJJ I\tPj TJJjLr xPhr xPmtJo mqmyJr KjKf TrJr \jq @orJ kP~J\jL~ xTu mqmJ
Vyj TPr gJKT mqJPT h TotTftJ @yre S xrPer uPq @orJ @oJPhr TotLPhr fujJoNuTnJPm CyJPr mfj-
nJfJ khJj TPr gJKT

05. JiLj kKfJj TftT mqJPTr Kca rKa


Kca rKa FP\K Im mJXuJPhv (Jm) jJoT FTKa JiLj Kca rKa kKfJj mqJPTr Kca rKa Fr TJ\ xj
TPrPZ fJrJ fJPhr oJYt 30, 2008 fJKrPUr kKfPmhPj hLWt o~JPhr \jq mqJTPT F1 rKa khJj TPrPZ nJu IJKgtT
KnK, xMxyf S TJptTr vJUJ-mMjj Fm kgo vseLr Tot-kKrPmPvr KmYJPr vKvJuL mJKeK\qT mqJTPuJPT F Vc khJj
TrJ y~ F oJPjr rKa xKv kKfJjPuJr pgJxoP~ IJKgtT ILTJr kNrPe o\mMf ImJPjr KjPhtvT

06. vLwt mqmJkjJ hu


xffJ, fJ, mqKVf S xoKVf hJK~fvLufJ Kjntr xM mqmJkjJr @vsP~ @oJPhr mqJT @KgtT xmJxoNy KhP~ gJPT
F CPPvq @orJ hfJr xJPg mqmxJK~T TotTJ kKrYJujJ TKr Fm vsfo mqJKT kgJr oJiqPo ImqJyf CjKf xJiPjr
uPq @orJ @oJPhr mqmxJPT hLWtPo~JhL hOKnLPf hKU
xM mqmJkjJr uq kNrPe @oJPhr rP~PZ mqmJkjJ kKrYJuT \jJm j~J\ @yoPhr jfPf vLwt mqmJkjJ hu fJrJ
APfJoPiqA vs mqJKT kgJxoNPyr kYuj TPrPZj Fm fJrJ mqJPTr mqmxJ~ @rS CjKf xJiPj xo 2007 xPj
IK\tf mqJPTr @KgtT xJluqA xmtPrr TotTftJ-TotYJrLPhr xJKmtT xyPpJKVfJ S fJPhr xofJr kT Jr
16 Annual Report 2007

Y~JroqJj oPyJhP~r kKfPmhj

07. ^KT mqmJkjJ


@KgtT S IgtQjKfT P IjKnPkf Kj~oJYJPrr ImxJj, KmvJ~j, fgq kpMK Fm pJVJPpJPVr IVVKf mqJPTr mqmxJr
\jq jfj xMPpJV xOK TPrPZ F xm mqmxJ~ ^KT iM xUqJ~ mJzPZ jJ mr F ^KTPuJ miJ Kmn Fm \Kau @oJPhr
^KT mqmJkjJ yP ^KT KYKfTre, kKroJkTre KmPvwe, j\rhJKr Fm Kj~e ^KT mqmJkjJr uq yP kKrYJujJ
kwth TftT IjMPoJKhf ^KTr xLoJr oPiq mqJPTr TotTJ KjmtJy TrJ

^KT mqmJkjJ~ @orJ KjomKetf jLKfoJuJr kKf vsJvLu

1 ^KT xyjL~ xLoJr oPiq xrPer \jq ^KTr kKroJe KmPvwe TrJ,
2 ^KT xJ keLf TRvPur @PuJPT ^KTxoNy KYKf S kptJPuJYjJ TrJ,
3 mqmJkjJr KmKnjPr ^KT mqmJkjJ Kmjq TrJ,
4 KmKnj ^KTr KmkrLPf xPhr xJj rJUJ,
5 ^KT mqmJkjJ~ fhJrTTJrL TftkPr KmKi-KmiJj kKrkJuj TrJ Fm
6 ^KTr Ckr kKfPmhj kKrYJujJ kwtPh kv TrJ y~ Fm kKrYJujJ kwth ^KT xyjL~ xLoJr oPiq rJUJr \jq
^KTxoNy Kj~Kof kptJPuJYjJ S j\rhJKr TPr gJPT

08. fgq jLKf


xJCgA mqJT UJuJoPj, fJr xJPg Fm pgJxoP~ Fr kKrYJuj luJlu Fm TJJjLr uqkNrPe IK\tf IVVKf
fhJrTTJrL Tftk Fm v~JrPyJflJrPhr ImKyf TPr gJPT xTu v~JrPyJflJrPhr kKf xo S KjrPk @Yre
v~JrPyJflJrPhr xJPg @oJPhr IvLhJKrPfr xPTtr YJKuTJvK kJrKrT vsJ S @Jr KnKPf @orJ
v~JrPyJflJrPhr xJPg xuJk TKr F mqmJ @oJPhr TJJjL uqoJJr iJreJPT fJ hJj TPr Fm TJJjL xPTt
xPYfjfJ mOK TPr
mqJPTr mJAPr fgq kTJPvr kiJj oJiqo yPuJ mJKwtT kKfPmhj, Iit-mJKwtT @KgtT KmmreL, Ve oJiqPo fgq xrmrJy,
fhJrTTJrL TftkPT fgq khJj, mJKwtT xJiJre xnJ, KmPvw xJiJre xnJ, knOKf fJZJzJ, mqJPTr SP~mxJAa
www.sebankbd.com TJJjLr fgq JrJ xoO

09. @oJPhr oJjmxh


mqJPT Totrf oJjmxh @oJPhr xPmtJo xh @oJPhr mqJT YJTrL kJgtLPhr kZPr KjP~JVTJrL TJJjL @orJ
oiJmL oJjmxh KjP~JVhJj, fJPhr kP~J\jL~ kKvehJj Fm fJPhrPT mqJPTr YJTrLPf iPr rJUPf @VyL TotTftJ-
TotYJrLPhr KjPmKhf-kJe kPYJ, hfJ Fm kvJ\LmL @Yre @oJPhr mqJPTr xJlPuqr YJKmTJKb
@oJPhr KjPmKhf-kJe TotLmJKyjLr IVVKf S xoOKr \jq @orJ fJPhr \jq FTKa IjMTu Totu KjKf TKr KjP\Phr
YJTrLPf IVVKf S mqJPTr mqmxJr CPrJr kxJPrr \jq @orJ @oJPhr TotLPhr oiJ S hfJr xPmtJo xqmyJr
KjKf TrPf CxJy KhP~ gJKT oJjm xh mqmJkjJ~ @orJ KjPoJ Kmw~JmuLr Ckr xKmPvw fJPrJk TKr
1 ImqJyf kKve S jfj jfj hfJ I\tj,
2 TotLmJKyjLPT ofJhJj Fm fJPhr \jq IjMTu Tot-kKrPmv,
3 TotLmJKyjLPT mqJPTr ImJj S YJKyhJ xPTt ImKyfTre,
4 fJPhrPT fujJoNuTnJPm nJu mfj-nJfJ khJj,
5 VqJYAKa, nKmwq fyKmu, xMkJr FqJjMP~vj fyKmuxy KmKnj Imxr xMKmiJ khJj,
6 ChJr mJjJx jLKf,
7 jfj keq S hfJ CJmPj CxJy hJj,
8 jxj TotLmJKyjL Fm
9 xMPpJPVr xofJ
FTA uq I\tPjr mPj @m, @oJPhr kPfqTKa TotL xJCgA mqJPTr FT\j xhxq yPf kPr xKfqA VKmtf
Annual Report 2007

Y~JroqJj oPyJhP~r kKfPmhj

10. xJCgA mqJT v~Jr


xJCgA mqJPTr v~Jr dJTJ S YVJo T FPYP KmkMu kKroJPe ujPhj y~ mqJTPuJr oPiq @oJPhr mqJPTr
v~JrA 2004 xPj kgo xsJu KcPkJK\arL KxPPor IiLPj APuTasKjT v~JPr kJKrf TrJ y~ 31 KcPxr
2007 A fJKrPU, @oJPhr v~JrPyJflJrPhr xUqJ 9,636 KZu KmKnj mqJK, kKfJj, Fm IjqJjq KmKjP~JVTJrL
@oJPhr mqJPTr xJKjf v~JrPyJflJr

11. VJyT xmJ


@oJPhr xTu TotTJP VJyT xmJ kiJj KmPmYq Kmw~ VJyTPhr xMPpJV-xMKmiJ Fm kZxA xmJhJPj @oJPhr TJj
xLoJmfJ jA @oJPhr kKfKhPjr VJyT xmJ gPT VJyTVe CkTf yPj VJyTPhr k kNrPe @oJPhr xyPpJKVfJ
ImqJyf gJTPm VKfvLufJ, @J, KmvJx Fm xTu VJyTPhr xPmJto xmJhJj @oJPhr mqJPTr jJPor xoJgtT @orJ
xmthJA jfj Fm Cjffr kJ~ VJyTPhr xmJhJPj @VyL
@oJPhr VJyTVe Cjf @Yre Fm CY oJPjr @KgtT S mqJKT xmJ kfqJvJ TPrj mqJKT KvP VJyT xmJ~ @orJ
xmtJPV gJTPf YJA @orJ oPjkJPe KmvJx TKr oMjJlJ uJn, kmOK I\tj Fm mqmxJr mJ\JPr CPuUPpJVq IKvhJKrf
muJPv @oJPhr VJyT xmJr oJPjr Ckr KjntrvLu @orJ mqJK, Mhs S oJ^JrL Kv kKfJj, CPhqJJ Fm
TJJjLxoNyPT kNet oJJ~ @KgtT xmJ KhP~ gJKT @oJPhr VJyT xmJ~ @orJ KjPoJ Kmw~JmuLr Ckr xKmPvw
fJPrJk TKr
1 mqJKT mqmxJr xTu P oRKuT PpJVqfJ I\tj,
2 xmJr oJPjJj~j,
3 xmJr oJj mOKr \jq krJovt S IKnPpJPVr Ckr fJPrJk,
4 xmJ-kPeqr KmTJv S @iMKjTJ~j,
5 hsf xmJ khJj,
6 KjnMtu xmJ khJj Fm
7 Co @Yre

12. vJUJ KmJr


xJCgC mqJPTr mqJKT xmJPT \jVPer JrkJP KjP~ pJS~Jr uPq 2007 xPj mqJPTr vJUJr xUqJ 38 F CjLf
TrJ yP~PZ Fr oPiq 5Ka AxuJKoT mqJKT vJUJ Fm 8Ka VJoLe vJUJ rP~PZ fhMkKr, VJyTPhr jVh IPgtr YJKyhJ
fJKeTnJPm oaJPjJr uPq xJrJ hv \MPz @oJPhr IvLhJKrPfr KnKPf FKaFo mMg rP~PZ
@VJoL KhjPuJPf mqJPTr vJUJ Fm mqmxJ hsf mOK TrPf @orJ hO| kKf nKmwqPfr KhPT fJKTP~ @orJ kYr
xMPpJV S kKfKfJkNet xJmjJ hUPf kJA G xMPpJVPuJ TJP\ uJVJPjJr \jq @orJ xNet kMf

13. mPxu-2 Fr \jq @oJPhr kMKf


jfj oNuij YK pJ mPxu-2 mPu UqJf-Fr IiLPj keLf jLKfoJuJ KjomKetf CkJhJjPuJr xojP~ Kmjq
T) jNqjfo oNuij kptJfJ,
U) fhJrTTJrL Tftk TftT kptJPuJYjJ S
V) mJ\Jr vOuJ
mPxu-2 Fr IiLPj keLf KmKioJuJ @oJPhr mqJPT mJmJ~j TrJ yP ^KT mqmJkjJr \Pjq @oJPhr mqJT Foj
FTKa kKrPmv rYjJ TrPf YJ~ pJPf ^KT KYKf S kKroJk TPr mPxu-2 Fr TJbJPoJ~ oNuij mj TPr xTu ^KTr
fgq xKuf kKfPmhj kv TrJ pJ~ @oJPhr ^K T VyPer oJJ xyeL~ xLoJr oPiq rJUJr uPq @orJ @oJPhr KmKjP~JPV
IjKnPkf Kf kMKwP~ j~Jr \jq jNqjfo oNuij m\J~ rJUPf YJA
mPxu-2 f khJktj Fm mPxu-2 Fr KmiJjJmuL kKrkJuPjr KjKoP @orJ AfqmxPr mqJPTr kKrPvJKif oNuij
2,281.76 KoKu~j aJTJ~ CjLf TPrKZ mqJPTr kKrPvJKif oNuij APfJoPiq WJKwf 25% mJjJx v~Jr AxMqr oJiqPo
2008 xPj 2,852.19 KoKu~j aJTJ~ CjLf TrJ yPm
18 Annual Report 2007

Y~JroqJj oPyJhP~r kKfPmhj

@orJ @oJPhr @KgtT mqmJr KjrJkJ S TJptTJKrfJr Cj~j xJij TPrKZ Fm fhJrTLr oJiqPo Kj~e Fm mJ\Jr
vOuJr KmTJv xJij TPrKZ mJuJPhv mqJT 1 \JjM~JrL, 2009 yPf mJuJPhPv Totrf xTu mqJPT mPxu-2 mJmJ~Pjr
\jq TJptTr nNKoTJ rJUPZ Fm xTu mqJPTr \jq Kca rKa mJiqfJoNuT TPrPZ Kca rKa FP\L Im mJuJPhv
(Jm) mqJPTr Kca rKa xj TPr mqJTPT hLwt o~JPhr \jq F1 rKa KhP~PZ
TJuPo Fm KKfvLunJPm mPxu-2 F khJktPer oJjPx mqJuJPhv mqJT 1 \JjM~JrL, 2008 yPf jNqjfo oNuij kptJfJr
yJr vfTrJ 10% nJV xrPer \jq mqJTPuJPT KjPhtv KhP~PZ 31 KcPxr, 2007 fJKrPU @oJPhr oNuij kptJfJr
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14. @oJPhr mJP\a Kj~e


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Annual Report 2007

Y~JroqJj oPyJhP~r kKfPmhj

17. LTKf
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Y~JroqJj
From the Desk of Managing Director

The year 2007 was an eventful year and witnessed many changes in political and business scenario of
Bangladesh. The financial sector also faced many challenges in line with the reforms undertaken by the
Government and other regulatory agencies. The process of liberalization with stringent discipline
continued and banking industry has also been impacted accordingly. Despite natural disasters like floods
and Sidr, the Government and private sectors are putting all out efforts to check the inflationary pressure
and rejuvenate the economy with much needed inputs. Now the outlook is more positive and productive
activities and exports have started to grow in pace and momentum. It is expected that we shall see
adequate credit flows at reduced cost to all productive sectors for realizing the expected increase in
economic activities in future.

The financial statements of the bank that are attached herewith in the Annual Report - 2007 provide a
summary of the last years activity. The numbers are self evident and self explanatory reflecting the banks
excellent state of health. There has been an improvement in credit quality. Our mission is still the same
as in the past to grow to be a bigger, stronger and better bank. We have gradually expanded our network
by establishing new branches in strategic locations and strengthened our overseas connections to a new
height. Our network strength stands at 41 branches and we are likely to add 9 branches this year with
the licence of Bangladesh Bank. The net profit for the year 2007 reached Tk.2,916.20 million posting a
growth of 41.38% over last years net profit. The banks total assets have grown from Tk.53,706.12
million to Tk.64,370.69 million, which accounts for 19.86% increase in a years time. The increase in
market share and profitability bear witness to our ability to compete within a system that is getting more
and more competitive and challenging.

Last year, we progressed well in securing balanced increase in deposit-mix and this, in turn, has become
the basis for strong growth in loans and advances. We have carefully calibrated both assets and liabilities
so that we move in equilibrium. Refinement of tools for managing the various risk profiles and strict
monitoring have enabled us to reduce the level of doubtful loans and lower the amount of provision.
Strong recovery drive throughout the last year has contributed significantly in reducing classified loans to
3.77%. Our treasury team had a very successful year delivering record revenues both from transactions
and trading activities. In remittance business, we have had a record increase of 1,587% over the last five
years, thus, making significant contribution in foreign exchange reserve for the bank. Our export
performance has surpassed our expectation and registered 11.20% increase compared to the year 2006.
Annual Report 2007

The strong upward trend in our business volume has resulted in increase in net interest and fee-based
income. We believe in efficient management which necessarily involve careful supervision and
monitoring of costs and administrative expenses. They have gone up to support large corporate structure
and in establishing new branches. Our new branches will give us not only large footprint but also
milestones on our road to growth. Our future plan is to build direct contact with the most dynamic and
innovative top entrepreneurs and established names in the areas we are located. We want to focus more
on small and medium enterprises locally. Our commitment is to serve our customers at competitive cost.

When I look back, I can say the bank is not only larger but also richer in experience and knowledge
gained of new places and customers and in terms of business opportunities offered by our expanding
economy. Our priority for the year 2008 is to continue with the growth strategy in all areas of business
operations. This will be achieved by being distinctively reinforcing our brand values of trust and integrity
in our dealings with customers. We shall broaden the range of our services and products through
integration of advanced technology. We are already in a very advanced stage of putting a robust core
banking solution in place.

I believe that highly capable and skilled staff members are our greatest asset. We always aim at attracting
talents and retaining efficient employees. We implemented incentive system that is in line with the banks
profitability and the performance of individuals so as to encourage our staff members to dedicate to the
banks objectives. We also attach importance for the training and development of banks staff to enhance
their skill and knowledge.

I should say it again that we are on a right track and we are growing stronger. Our results are impressive
by all standards for the year just concluded. We are pledge-bound to turn Southeast Bank into a modern
banking institution dynamic in actions, progressive in vision, honest in dealings, fair in judgment,
futuristic in attitude, straight 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 the 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
and the Regulatory Authorities.

The Bank conducts its business activities with due respect for existing values and norms and with an
understanding of the importance a large financial institution has for the society and the environment. We
are determined to meet the expectations of our shareholders. We will continue to fulfill our corporate
social responsibility by leveraging the resources in the implementation of new initiatives for the benefit
of the large section of the community. On behalf of the management, I express my gratitude and thanks
to the members of the Board of Directors, all staff, all regulatory agencies, shareholders and valued
customers for their guidance, advice and continued support.

Neaz Ahmed
Managing Director
22 Annual Report 2007

Board's Report

Dear Shareholders
The Board of Directors of Southeast Bank Limited takes the opportunity to welcome you all to the 13th
Annual General Meeting of the Shareholders and has immense pleasure to present before you the 13th
Annual Report of the Bank together with the Auditors Report for the year ended December 31, 2007.

01. World Economic Trend and Outlook


The world economy is projected to remain on track for sustained strong growth in 2008, led by rapid
growth in most emerging markets and developing countries, especially China and India. After achieving
a robust growth of 5.4 percent in 2006, the global economy was projected to grow by 5.2 percent in 2007
and 4.8 percent in 2008 (IMF, Oct. 2007). On the other hand, the developing world was likely to grow
by 8.1 percent in 2007 and 7.4 percent in 2008. This positive outlook, however, is subject to significant
risks, such as higher oil prices, volatile exchange rates in the major economies, higher global food
inflation, depressed housing market and a slower growth outlook for Japan and the Euro zone. Prior to
these recent turbulences, Central Banks around the world were generally moving towards tighter
monetary policy to face the challenge of inflation. The reaction among the emerging market economies
was mixed; while some Central Banks eased the monetary policy, others tightened it further.

The growth of world trade volume in 2007 was projected to decline to 6.6 percent compared with 9.2
percent in 2006. The growth of exports from both the advanced economies and other emerging markets
and developing countries were projected to decline to 5.4 percent and 9.2 percent respectively in 2007.
The growth of imports for both the advanced economies and other emerging markets and developing
countries were projected to decline in 2007. The U.S. current account deficit was projected to decline to
5.5 percent of GDP in 2007, as it benefited from recent real effective depreciation of the U.S. Dollar.

02. An Overview on the Performance of Bangladesh Economy


The Economy of Bangladesh is in the process of a transition from a predominantly agrarian to a quasi-
industrial and service economy. The private sector is playing an increasingly active role in the economic
development of the country, while the public sector concentrates more on the physical and social
infrastructure. Against the estimated growth of 6.5 percent in FY07, the target GDP growth rate for FY08
was set at 7.0 percent in the budget of FY08. However, recent domestic and global developments
including natural calamities, temporary disruptions in domestic production and adverse price movements
in the international market have adversely affected the growth performance of the economy requiring a
downward adjustment in the GDP growth rate in the range of 6.0 percent to 6.2 percent in FY08. During
Oct-Dec, 2007, the real economy showed an improving pace of growth as the domestic production
activities started to rebound after the floods and the cyclone (SIDR) and export growth started to gather
momentum.

The Gross Domestic Product grew by 6.5% in FY07, slightly lower than 6.6% in FY06. The real GDP
growth in FY07 took place mainly due to robust growth in service sector and notable expansion in
manufacturing activities. Countrys economic growth was accelerated by reasonable growth of exports
and increased flow of remittances. Export earnings (USD 12,053 million) recorded a growth of 15.8%
while import payments (USD 15,511 million) grew by 16.6%. Remittances (USD 5,979 million) from
Bangladeshi nationals increased substantially by 24.5%. The current account balance exhibited notable
surplus of USD 952 billion in FY07. The industrial sector attained 9.5% growth in FY07, compared with
9.7% of FY06. The service sector contributed 49% of total GDP and grew by 6.7% in FY07, higher than
6.4% recorded in FY06. Domestic savings as a percentage of GDP rose from 20.3% of FY06 to 20.5% in
FY07 whereas domestic investment as a percentage of GDP decreased from 24.7 of FY06 to 24.3 in FY07.
Broad money (M2) growth stood at 17.1% in FY07 lower than 19.3% in FY06. Outstanding Bank Credit
during FY07 rose by 14.7% to Tk.1,651.19 billion as against increase of 20.2% in FY06. Outstanding
Bank Deposit increased by 16.5% to Tk.1969.57 billion during FY07 against 18.5% increase in FY06.
Foreign exchange reserve held by Bangaldesh Bank stood at US$5095.3 million as of Nov. 2007 which
is 44% higher compared to the reserve in the same period of 2006.
Annual Report 2007

Board's Report

The Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) for the scheduled Banks
remained unchanged in FY07 at 5% and 18% respectively of their total demand and time liabilities since
October 01, 2005. The Bank Rate was revised downward from 6 percent to 5 percent on November 06,
2003 and remains unchanged.

Bangladesh Bank continued to pursue restrained monetary policy during 2007 with a view to keeping
inflationary pressure under control while supporting the targeted real GDP growth. Inflation, however,
was on uptrend during 2007 mainly due to rising import prices of fuel oil, metal, foodgrains and some
other essentials in the international market coupled with problems in the domestic supply chains. The
annual rate of inflation (12-month annual average CPI) increased to 8.25% at the end of October 2007
from 6.98% at the end of October 2006. The rate of inflation on point-to-point basis increased to 10.6%
at the end of October 2007 from 7.31% at the end of October 2006.

03. An Overview of the Bank

Southeast Bank Limited, a second generation Private Bank, emerged in 1995. Currently, the Authorized
Capital of the Bank is Tk.3500 million and the Capital and Reserve stand at Tk.6,468.36 million as on
December 31, 2007. 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 almost thirteen years of banking operations recording
significant growth in all the performance indicators. In 2007, the Bank earned an after tax profit of
Tk.1,222.97 million with a deposit growth of 20.45% to Tk.55,474.05 million and advance growth of
17.05% to Tk.48,164.60 million compared to those of 2006. During the last five years (2003-2007) the
Bank achieved an average annual growth of 29.61% in deposit, 30.46% in advances, 71.89% in export
and 25.07% in import. During the last three years period, the export volume increased by four times and
foreign remittance increased by nine times.

Operational excellence coupled with qualitative improvements continued to be of paramount


importance to the Bank. As on December 31, 2007, the Bank had 38 branches across the country. Plans
have been made to raise the number of branches further. Our journey towards greater operational success
continues with increased energy and enthusiasm. As we face the challenges on 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, alongwith global reach through our correspondent Banks
for expansion of foreign trade and foreign exchange. Our product-basket encompasses Real Time Online
Any Branch Banking, Islamic Banking, partial Merchant Banking, Dual Currency Visa Credit Card, ATMs,
Education Loan Scheme, Double Benefit Scheme, Consumer Loan, SME Banking, Corporate Banking,
Syndicated 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.

Customers are our first priority. High quality customer services through right mindset, integration of latest
and tested banking technology and products are our tools to achieve success. We are trying hard to
evolve into a life-brand touching every aspect of customers life by providing them with 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 premier bank by helping
customers to become financially better off by providing advice, innovative leading-edge 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.
24 Annual Report 2007

Board's Report

04. Capital and Reserves


The Authorized Capital of the Bank is Tk.3,500.00 million and the Paid-up Capital is
Tk.2,281.76 million as on December 31, 2007. The Capital and Reserve of the Bank
stood at Tk.6,468.36 million in 2007 from Tk.4,940.92 million of the previous year
showing an increase of 30.91%.
The Capital and Reserve position of the Bank as on 31 December 2007 is appended
below:

Taka in Million
a) Core Capital (Tier-I Capital):
Paid Up Capital 2,281.76
Share Premium Account 1,056.37
Statutory Reserve 1,544.29
General Reserve 247.65
Retained Earnings 443.78
Total Core Capital 5,573.85

b) Supplementary Capital (Tier-II Capital):


Provision for Unclassified Advances 500.00
General provision on off-Balance Sheet exposures 107.10
Assets Revaluation Reserves 283.21
Exchange Equalization Account 4.20
Total Supplementary Capital 894.51
Total Capital and Reserve (a+b) 6,468.36

05. Capital Adequacy Ratio


The Bank maintained a capital adequacy ratio of 13.00% of the risk-weighted assets as
on December 31, 2007 as against regulatory requirement of 10% as set by Bangladesh
Bank.

06. Capital Market Scenario


In this era of proliferation of market-based economy, modernization of financial
services, elimination of paper-based share trading and introduction of electronic share
trading through central depository system, the capital market of the country expanded
significantly showing high volume of share trading, increase in number of investors,
remarkable rise in market capitalization and so on.
The countrys stock market witnessed a robust growth in the year 2007. All indicators
such as market capitalization, general index and turn over improved significantly during
the year. The total market capitalization in both the bourses of the country i.e. in Dhaka
Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) at the end
of the year 2007 stood at Tk.742.20 billion and 612.58 billion respectively while it was
Tk.315.45 billion in DSE and Tk.270.51 billion in CSE at the end of 2006. In 2007, the
market capitalization grew at the rate of 135.28% in DSE and 126.45% in CSE. The
countrys main two bench-mark share price index, the DSE general index and CSE all
share price index finished at 3,017.21 points and 7,657.06 points respectively at the
end of 2007 while it was at 1,609.25 points in DSE and 3,724.39 points in CSE at the
end of 2006. It posted an increase of 87.49% in DSE and 105% in CSE.
In 2007, total fourteen companies entered the capital market to raise fresh funds needed
to finance their businesses. In the process of Initial Public Offers (IPOs), a fresh capital
fund Tk.10,056.88 million in the form of face value of shares of these companies was
Annual Report 2007

Board's Report

injected into the capital market. Much of the fund in the secondary capital market in
2007 came from institutional investors, such as Banks, Insurance Companies, Mutual
Funds, Foundations, Leasing Companies, Merchant Banks etc. Sizeable amount of
capital fund was also injected in the secondary market from individual investors in the
year.
The demand for quality shares by the investors increased significantly in the countrys
capital market in the year 2007. This created a gap between demand for and supply of
shares in both the bourses of the country. Resultantly, the mismatch between demand
and supply of quality shares in both the bourses of the country ended up in rise of prices
of securities of some companies. To address the situation, the countys only watchdog
for capital market, the Securities and Exchange Commission (SEC), took deterrent
measures in order that the small investors are not subjected to capital loss by unusual
market upheavals and stability in the market is maintained.

07. Southeast Bank Shares and its Shareholders


a) A Share with Strong Market Fundamentals
On the basis of volume of trade and market turnovers, Southeast Banks shares
registered fifth place in Dhaka Stock Exchanges DS-20 list in December 2007. Our
shares were traded in DSE and CSE in Top 20-index as A category shares having strong
market fundamentals. These are higher Net Asset Value, positive and good Earnings Per
Share, satisfactory dividend-yield in terms of market price, higher liquidity in terms of
market turnovers, higher percentage of market capitalization in terms of paid-up capital,
large number of shareholders etc. Southeast Banks Directors, Top Management and
Officers are highly committed to augmenting shareholders wealth by improving the
Banks financial performance. They also give due importance to the shareholders and
implement their constructive suggestions for the betterment of the Bank.

b) Number of Shareholders
The rising trend in number of shareholders of the Bank since IPO is continuing and at
the end of the year 2007 the number of shareholders of the Bank stood at 9,636 while
it was 8,855 as on December 31, 2006. It posted an increase in number of shareholders
of the Bank by 8.82%. The rate of increase in the number of shareholders of the Bank
since its listing in the Stock Exchanges in 2000 is shown below:

Year Shareholders Growth Rate


2000 1,266
2001 1,429 12.88%
2002 1,666 16.59%
2003 2,912 74.79%
2004 4,704 61.54%
2005 5,750 22.24%
2006 8,855 54.00%
2007 9,636 8.82%

c) Positive Earning Per Share (EPS)


At the end of the year 2007, the number of ordinary shares of our Bank stands at
2,28,17,583 shares. We had 30,00,000 shares at the time of listing with Dhaka Stock
Exchange and Chittagong Stock Exchange in 2000. We have issued 1,98,17,583 shares
in the form of Bonus Shares and Rights Shares after listing with stock exchanges,
showing 660% increase in number of Banks ordinary shares. As we are making
substantial profits for three consecutive years, the harmony between increased number
26 Annual Report 2007

Board's Report

of Issued Shares and Earning Per Share is being maintained. The Banks positive Earning
Per Share since listing is shown below:
Year Earning Per Share (In Tk.)
2000 57.61
2001 82.04
2002 69.85
2003 45.38
2004 43.52
2005 35.42
2006 59.71 (Diluted)
2007 53.60

d) Satisfactory Net Assets Value (NAV)

Our Banks assets are greater than liabilities with very satisfactory Net Assets Value
(NAV) per share. The NAV of the Bank in 2007 stood at Tk.269.29 while it was
Tk.239.47 in 2006, recording a significant growth of 12.45%. The NAV per share of the
Bank for the last eight years is shown below:

Year Net Asset Value (NAV)


per Share (in Tk.) Growth Rate
2000 148.38
2001 182.20 22.79%
2002 211.33 15.99%
2003 169.05 (20.01) %
2004 162.38 (3.95) %
2005 192.80 18.73%
2006 239.47 24.21%
2007 269.29 12.45%

e) Authorized Capital and Paid Up Capital of the Bank


At the time of incorporation of our Bank in 1995, the Authorized Capital of the Bank
was Tk.500.00 million and the initial Paid Up Capital was Tk.100.00 million. At the end
of 2007, the Authorized Capital and Paid Up Capital of the Bank stood at Tk.3,500.00
million and Tk.2,281.76 million respectively. The Authorized Capital and Paid Up
Capital since inception of our Bank has been increased by 600% and 2,181.76%
respectively to maintain sound capital adequacy of the Bank and to make the Bank
financially stronger. The growth of Authorized capital and Paid Up Capital of the Bank
is shown below:
Year Authorized Capital Paid Up Capital
(Taka in million) (Taka in million)
1996 500.00 100.00
1997 500.00 125.00
1998 500.00 150.00
1999 500.00 300.00
2000 500.00 330.00
2001 500.00 363.00
2002 2,500.00 399.30
2003 2,500.00 677.16
2004 2,500.00 880.31
2005 2,500.00 1,056.37
2006 3,500.00 2,112.74
2007 3,500.00 2,281.76
Annual Report 2007

Board's Report

f) Declaration of Dividend

The Bank continuously pursues a stable dividend policy and declares dividends to the
shareholders at a good rate. To cope with the requirement of increased capital of the
Bank with the growth of volume of business, it also issued bonus shares out of the profit
generated by the Bank. The Banks declaration of cash dividend and stock dividend
since 1999 is given below:
Year Cash Dividend Stock Dividend Total
1999 15% 15%
2000 25% 10% 35%
2001 30% 10% 40%
2002 20% 10% 30%
2003 20% 20% 40%
2004 - 30% 30%
2005 - 20% 20%
2006 20% 8% 28%
2007 15% 25% 40%

g) Month-wise market price and total market turnover of Southeast Bank Shares

In the year 2007, trading of our shares took place on Dhaka Stock Exchange for 236
days and on Chittagong Stock Exchange for 237 days. On the basis of closing trading
price as on December 30, 2007, the market capitalization of our shares stood at
Tk.13,080.18 million in DSE and Tk.13,137 million in CSE. Month-wise high, low and
market turnover of traded shares of our Bank in the year 2007 in DSE and CSE are given
below:

Month High Price Low Price Market Turnover


(Taka) (Taka) (Taka in million)
DSE CSE DSE CSE DSE CSE
January 395.50 399.00 308.50 310.00 777.99 294.12
February 393.75 390.00 320.00 323.00 368.43 138.39
March 360.00 356.00 317.00 305.00 352.23 107.49
April 341.50 345.00 290.00 290.00 254.65 86.67
May 467.50 470.00 324.75 324.00 1860.56 350.54
June 500.00 499.00 430.00 427.25 2247.85 188.04
July 593.00 591.00 475.00 472.25 3056.34 181.03
August 583.75 581.00 500.00 500.00 589.53 39.52
September 567.00 564.00 498.00 500.00 717.99 94.02
October 576.00 580.00 509.00 509.00 760.63 176.28
November 584.00 584.50 525.00 520.00 652.60 37.06
December 586.00 586.00 520.00 514.00 530.07 19.07
Total Turnover : 12,168.87 1,712.23

h) Rights Shares of the Bank

The Bank so far issued 1,22,13,696 Rights Shares to the shareholders since its inception
to raise the capital base of the Bank. Out of these, 1,05,63,696 Rights Shares were
issued in 2006 to the shareholders at the ratio of 1:1 at issue price of Tk.200/- each with
a premium of Tk.100/- per share and 16,50,000 Rights Shares were issued to the
shareholders at par at the ratio of 1R:2 in the year 2003.
28 Annual Report 2007

Board's Report

i) Characteristics of our Shares


Our shares are traded as A category shares in both the bourses of the country having
following characteristics:
i) Higher Net Asset Value Per Share.
ii) Satisfactory dividend-yield in terms of market price.
iii) Remaining in DSE and CSE in top 20-index for years together.
iv) Minimum payment of dividend at the rate of 20% and above to the shareholders
for the last eight years.
v) The trend of growth in number of shareholders since IPO shows a large number
of investors reposed their trust in us.
vi) The Earning Per Share is always positive and satisfactory.

08. Deposits
The Banks deposit stood Tk.55,474.05 million as on December, 2007 compared to
Tk.46,056.18 million in 2006, thus, recording 20.45% growth. Competitive interest
rates, attractive deposit products, deposit mobilization efforts of the Bank and
confidence reposed by the customers in the Bank contributed to the notable growth in
deposits. The Bank evolved 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, 2007 was as follows:
Taka in Million Share in
Total Deposits
a) Current and Other Deposits 3,939.80 7.10%
b) Savings Bank Deposits 3,433.49 6.19%
c) Short Term Deposits 3,988.75 7.19%
d) Fixed Deposits or Term Deposits 40,368.38 72.77%
e) Deposits under different Deposit Schemes 3,055.35 5.51%
f) Bills Payable Accounts 688.28 1.24%
Total: 55,474.05 100%

09. Loans and Advances


In 2007, Southeast Banks policy was to expand the loan portfolio moderately in
consideration of economic and socio-political scenario of the country. The Banks loans
and advances increased by 17.05% in 2007 to Tk.48,164.60 million as against
Tk.41,147.28 million in 2006.The Bank emphasised on disbursement of agriculture
credit for the farmers in fulfillment of government's socio-economic policy. The Bank
extended a considerable amount of agri-credit (Tk.151.00 million) this year directly or
indirectly via NGOs through rural branches.
The credit portfolio of the Bank is now very well diversified having a balanced mix
covering a wide spectrum of business and industries including readymade garments,
textiles and spinning, telecommunication, pharmaceuticals, steel and engineering, ship
scraping, cement, edible oil, real estate, education and transport etc. The Bank also
expanded its financing to the Small Enterprises and Consumers under SME Credit
Scheme and Consumers Credit Scheme. Moreover, in order to help the poor segment
of people of the society, the Bank extended its financial assistance to NGOs for onward
financing to the poor people.
The Bank also got involved in extending facilities in the CNG dedicated buses and CNG
filling stations under Dhaka Clean Fuel Project against refinance program of Asian
Development Bank (ADB) through Rupantarita Prakritik Gas Co. Ltd. (RPGCL). The
Bank has separate units at Credit Division of Head Office working for handling
Annual Report 2007

Board's Report

Garments Industry, Syndication Loans, Project Financing, Loans to Small Enterprises


and Consumers etc. to ensure due diligence and to expedite the decision making
process. Recently, the Bank also introduced House Building Finance Scheme under
Refinance Scheme of Bangladesh Bank.
We have continued our efforts in order to maintain high quality of assets. Besides giving
emphasis on the satisfactory business performance of the clients and collateral support,
we have geared up loan monitoring and follow up activities to arrest the loans from
becoming non-performing. The non-performing loans of the Bank decreased to 3.77%
as on December 31, 2007 from 3.97% of the previous year.

10. Loans to Directors


No fresh loan was allowed to any Director of the Bank during the year 2007.

11. Guarantee Business


The Bank issued guarantees amounting to Tk.9,008.32 million during the year 2007
compared to Tk.8,656.80 million of the previous year, registering a growth of 4.06%.
The guarantees were issued against proper securities in favour of different Govt.
Authorities, Ministries, Autonomous Bodies, Corporations, Multinational Companies,
etc. on behalf of the valued clients of the Bank.

12. SME Financing


The Bank introduced SME Finance Schemes in 2004. In order to give more focus, it also
established a separate SME unit at Head Office. The Bank so far extended facilities to
1,513 Small and Medium Enterprise accounts totaling Tk.3,023.05 million as on
31.12.2007 which was Tk.2,440.50 million disbursed to 1,337 accounts in 2006,
registering 23.87% growth in volume.

13. Consumer Credit Schemes (CCS)


Consumer Credit Scheme (CCS) is a credit product of Southeast Bank to meet personal
loan requirement of consumers for acquiring various household items. To expedite
quick disposal of cases of CCS loans, the Bank established a separate CCS Cell at Head
Office. The Banks priority for 2007 was to recover the overdue CCS loans. As a result,
the Bank could successfully recover a substantial amount of overdue CCS loans.

14. Syndicated Finance


Southeast Bank Limited is the pioneer amongst the Private Commercial Banks that
participated in the syndicated facility since 1996. The Bank has an independent
syndication unit which is enriched with qualified and experienced officers. Since then,
the Bank participated in 42 syndications of around Tk.23,300.00 million of which
Southeast Banks participation was around Tk.4,800.00 million. Out of total syndication
of around Tk.23,300.00 million, the Bank acted as a Lead Arranger / Arranger / Agent
of 13(thirteen) syndications for around Tk.4,500.00 million which are successfully
running as profitable concerns. In the meantime, the Bank extended facilities in
different sectors like Telecom, Power, Education, Hospital, Beverage, Cement, Steel and
Engineering, Sugar, Edible Oil, Textiles, Spinning, Ceramics, Construction, LP Gas,
Hydrogen Peroxide Plants etc. under syndicated arrangement.

15. Corporate Finance


Corporate Finance is the broad term given to different facilities that large companies,
governments, or other big institutions need in order to meet their long term and short
30 Annual Report 2007

Board's Report

term financial requirements. Southeast Banks business is focused to a considerable


extent on the corporate clients by maintaining a relationship and extending financial
assistance based on a deep understanding of the clients business environments,
financial needs and internal strategies for growth. The Bank Management, after taking
proper stock of macro economic fundamentals, recommends appropriate financing
package to a corporate client. The Bank extends its financial support to the corporate
clients either from own finance or by arranging syndicated/ club finance. The
investment in corporate sector is the combination of a mixed and balanced allocation
in various nature of business / industries based on the socio-economic perspectives and
long term planning.

16. Equity and Entrepreneurship Fund (EEF)


The Bank, on its own initiative, has also channeled the Equity and Entrepreneurship
Fund (EEF) of Bangladesh Bank to an exceptional sector viz. unique project of Breeding
Crocodile Farm to rear/ raise / process crocodiles and to export skins, meat and bones,
and support and promote conservation of crocodiles in Bangladesh. The project has
been implemented successfully and it is expected that the export will commence from
2010 and will bring a significant amount of foreign currency for the country.

17. Investment
The investment portfolio of the Bank during the year 2007 was Tk.8,462.86 million
against Tk.6,265.55 million in the previous year registering a growth of 35.07%. The
portfolio of investment includes Government Treasury Bills, Prize Bonds, Shares of
Publicly Listed Companies, etc. The Bank always gives emphasis on investment of funds
in higher yield areas simultaneously maintaining Statutory Liquidity Requirements (SLR)
as fixed by Bangladesh Bank.

18. International Trade Operations


Facilitating International Trade through Export and Import financing is one of the key
activities of the Bank. During the last five years, the foreign trade financing of the Bank
has witnessed steady growth. Despite economic slowdown of Bangladesh economy in
2007, the Bank achieved significant growth in both import and export sector financing.
The Banks 20 Authorized Dealer Branches are well equipped with highly trained
professionals to handle varied needs of import and export based clients.

Import Trade

As on December 2007, the Bank has handled Import business for Tk.38,470.34 million
(Equivalent to USD 557.50 Million) which is 9.52% higher than the import of
Tk.35,125.12 million handled by the Bank in 2006. Capital Machineries for export
oriented Garments Industries, Scrap Vessel, Vegetable Oil, Raw Cotton and Flat Rolled
Steel were the major import items in 2007.

Import Figures of the Bank for the last 5 years are shown below:
Year Import volume in eqvt. Import volume in eqvt. Growth rate
US Dollars (in million) Taka (In million)
2003 250.32 16,270.80 --
2004 306.51 20,229.62 24.33%
2005 421.44 29,079.30 43.75%
2006 501.79 35,125.12 20.79%
2007 557.50 38,470.34 9.52%
Annual Report 2007

Board's Report

Export Trade
Since 2003, the Bank has seen a dramatic upsurge in Export Sector performance due to
Managements desire to make this as a priority sector. In 2007, the total export of the
Bank was Tk.28,771.36 million (equivalent to USD 423.10 million) which is 11.20%
higher than the export of Tk.25,874.61 million handled by the Bank in 2006. The
export figure in 2007 increased by four times over the last three years. Our export items
include Readymade Garments, Raw Jute, Jute goods, Fish, Vegetables and other
Agricultural Products.

Year Export volume in eqvt. Export volume in eqvt. Growth rate


US Dollars (In million) Taka (In million)
2003 52.40 3,033.79 --
2004 112.32 6,761.93 122.89%
2005 202.41 13,511.10 99.81%
2006 369.64 25,874.61 91.51%
2007 423.10 28,771.36 11.20%

19. Foreign Remittance


Since 2003, the Bank has been highly active in remittance operations to facilitate
disbursement of remittance received from Bangladeshi wage earners working abroad.
Inward Foreign Remittance also played a significant role in decreasing the Banks
dependency on inter-bank market for payment of import bills in Foreign Currency.
Wage earners remittance together with export proceeds exceeded the total import
liabilities of the Bank in 2007. The total Foreign Remittance stood at USD 160.04
million (in eqvt. TK.11040.17 million) which increased nine times over the last three
years. We have expanded our remittance network across the globe covering Europe,
North America, Australia, and Middle East through 27 renowned Exchange Companies
and Banks in these regions. Our dedicated team in Remittance Department has the
expertise to disburse remittance all over Bangladesh within the shortest possible time
and we expect a sustained growth in future in this sector.
Position of year-wise foreign inward remittance of the Bank is given below:

Year Million-USD Taka in Million Growth rate


2003 11.00 654.24 --
2004 17.32 1,091.25 66.79%
2005 53.14 3,507.40 221.41%
2006 193.75 13,479.83 284.33%
2007 160.04 11,040.17 -18.10%

20. Foreign Correspondents


Over the years, the Bank has developed beneficial relationship with foreign
correspondents worldwide to facilitate the international trade operations of the Bank.
As on 31st December, 2007 the number of foreign correspondents stood at 598 Banks
in 94 countries of the world.
Due to strong capital base and excellent market reputation, the Bank could establish
special arrangements with both International Finance Corporation (IFC a subsidiary of
World Bank) and Asian Development Bank (ADB) to facilitate the foreign trade
operations of the Bank and enjoy credit line facilities from all the major internationally
reputed Banks that have country limits for Bangladesh.
32 Annual Report 2007

Board's Report

21. SWIFT
Southeast Bank is an active member of SWIFT user Group in Bangladesh and was one
of the Pioneer Banks to have 24 hours on-line SWIFT Connectivity in the country. At
present all of our Authorized Dealer Branches are connected to SWIFT. Our SWIFT
team has been putting relentless efforts for continuous upgrading of SWIFT as and when
any new features are introduced globally. The Banks SWIFT team plays an effective
role among SWIFT User Group Member Banks in Bangladesh.

22. Treasury Operations and Fund Management


In the area of treasury operations, our Bank remains one of the key players in the
interbank market, enhancing profitability through intuitively priced transactions. The
rise in global energy, commodity and metal prices and increase in import payments had
significant influence on our interbank foreign exchange market in 2007 and implied a
substantial demand / trading in Taka against related foreign currencies. Demand and
supply in the foreign exchange market was slightly volatile for most of the time during
the year. Expert knowledge of local environment coupled with a focus on international
standard practices led the Bank to offer its clients highly efficient range of trade services.
The activities of Money Market unit were greatly influenced by (i) the excess liquidity
due to low credit growth in the real sector (ii) two consecutive flood and Cyclone-SIDR
effect (iii) Government borrowing from the interbank market and (iv) the markets
subsequent move to increase interest rate in December 2007.
In 2007, secondary trading of Government securities showed some dynamism due to
various steps taken by Bangladesh Bank. As one of the nine Primary Dealers (PDs), we
were very active in the primary market and played a significant role in the secondary
trading amongst the Banks and Non Banking Financial Institutions. While managing
risk, the Treasury Unit focuses on expanding transaction volume, strengthening ALM
operations and diversifying fund management channels through the accurate
assessment of domestic and overseas market trends to further strengthen profitability.
Through its asset liability management and trading operations, the Treasury Unit strives
to minimize market and liquidity risks while maximizing earnings. To do this, it uses an
expanded array of investments techniques including alternative investments, leading to
a more diversified investment portfolio and increased arbitrage investment
opportunities through optimum maturity gap.
Our Treasury Department is an integral center of income generation. In 2007, we
generated an operating income of Tk.354.49 million in Foreign Exchange (FX)
operations, Tk.930.40 million in Money Market operations and Tk.14.40 million in
secondary trading of Government Securities. In addition to present business
transactions, we focused on portfolio restructuring in response to volatility in interest
rates and currency markets. The operating profit of the Treasury Unit shows that active
management of opportunities can make a significant contribution to the profitability of
the Bank.

23. Information and Communication Technology in Banking Operation


Southeast Bank Limited started its operation in 1995 with full commitment towards
providing high quality customer services through integration of modern technology.
With the passage of time, changes in communication and computational dimension
brought in opportunities as well as demand for introduction of newer products and
services. The Bank has always tried to be in line with the changing scenario and
introduced Online Any branch banking services for its customers through establishment
of Wide Area Network (WAN) connectivity among the branches using advanced
communication technology in 2003. It is time for business and technology to work
more intimately in achieving banking excellence for products and services. Adaptation
to technology and thriving on technological excellence are essential for survival and
moving forward.
Annual Report 2007

Board's Report

Recent Initiatives
The Bank has recently introduced SMS Banking for its valued clients allowing them to
avail selected banking services e.g. Account balance, last 3 transactions, stop payment,
fund transfer, utility bill payment etc over their Mobile Phone(s) using SMS (Short
Message Service) while roaming. The Bank has also deployed well tested and very
reliable Anti-virus Software like eScan and eTrust to protect and secure the core
Network and automated banking operations. In line with Central Bank directives, the
Bank has redrawn its own Information and Communication Technology (ICT) Policies
for different operations and services offered. The Bank has already established a
Disaster Recovery (DR) site for its Network at Banani Branch which will act as fallback
connectivity when Data Center is down. There is an ongoing project for adoption of
MICR (Magnetic Ink Character Recognition) automated clearing system initiated by
Bangladesh Bank. The Bank has also joined the Cash Link Bangladesh Ltd.,- a Joint
Venture company as equity partner to form national and international payment gateway
for debit card and to facilitate electronic fund payments across the globe.

Core Banking Solutions


It has become imperative for the Bank to find a replacement solution of its current core
banking system by an international standard, robust, flexible and integrated one. This is
very much essential for sustained growth, improved quality of services and capacity
building for introduction of technology driven products over multiple delivery
channels. This project has already been initiated and expected to reach a matured stage
within 2008. The IT initiatives and projects undertaken by the Bank in 2007 will have
a long term bearing on the banking business and for attaining core competence in
technology and services. These initiatives will lay foundation for the Bank for moving
forward.

24. Human Resources Capacity Building


In order to achieve sustained growth objectives, the Bank has adopted a Human
Resources Development Strategy considering quality human resources as the single
most valuable asset. An organization is as efficient as its people are. They are recruited
in the Bank through a rigid but transparent process and the best are sieved out from the
bulk aspirants. They are trained through a arduous process and acclimatized to be
suited with corporate culture of Southeast Bank. Integrity, impartiality, fairness,
efficiency and deep commitment characterize our people. The Bank always stresses
upon attracting and retaining quality human resources through competitive
compensation package and creating opportunities for individual career development.
The Bank also adopts policy to provide them a workplace which is flexible,
encouraging, comfortable and rewarding. The Bank ensures good social security
measures by way of Gratuity, Contributory Provident Fund, Superannuation Fund and
Encashment of Unavailed Leave. These factors contributed to the low turnover of
employees from the Bank in the past.
The Bank focuses on induction of fresh blood in the human resource of the Bank. To
provide support to our expansion program, we have recruited 51 experienced bankers
and 139 fresh entrants through a recruitment process during the year 2007. The Bank
plans to recruit more freshers having MBA/BBA and Master Degree with outstanding
academic background through an arduous recruitment process. The Bank arranged
several internship programs during the year 2007 to help the youngsters to understand
the dynamics of the business world. In the process the Bank accommodated 112 interns
from the leading universities of the country. As on December 31, 2007, the Banks total
staff strength stands 1,116 which includes 964 banking staff and 152 sub-ordinate staff.

25. Operating Result and Profit


The Bank earned an operating profit of Tk.2,916.20 million during the year before
making any provision for bad and doubtful debt, taxes etc. including general provision
34 Annual Report 2007

Board's Report

on unclassified loans and advances. The operating profit of the Bank during the year
2006 was Tk.2,062.66 million achieving 41.38% growth. The provision for income tax
for the year amounted to Tk.1,374.07 million and divisible profit available for
Alamgir Kabir, FCA, Chairman is appropriation amounted to Tk.443.78 million.
seen handing over a cheque for
Tk.50.00 lac to the Chief Advisor on 26. Budget and Budgetary Control
August 13,2007 for relief operation
The Bank follows bottom up planning approach in preparation of annual budget and
initially invites draft proposals on different budgetary items including deposits,
advances, profitability, business etc. from the Branches. The draft budget estimates are
then prepared 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, Banks budget is implemented. The Bank Management puts constant
efforts throughout the year for achievement of the budget. It periodically reviews the
variances and the progress towards achievement of the budgetary goals.

27. Analysis of Income and Expenditure Statement


A brief analysis on income and expenditure statements is given below:

Interest Income
During the year 2007, interest income of the Bank was Tk.6,408.96 million as against
Tk.5,107.78 million of the previous year, thus, recording a growth of 25.47%. The
income growth generated mainly from Loans and Advances which remained the
principal contributor.

Interest Expenses
Total interest expenses in 2007 was Tk.4,852.50 million as against Tk.4,044.63 million
of 2006 posting an increase of 19.97%.

Net Interest Income


The net interest income of the Bank for the year under review stood at Tk.1,556.46
million as against Tk.1,036.15 million for the previous year, thus, posting an impressive
growth of 46.40%.

Investment Income
s In 2007, Banks income from investment was Tk.956.80 million as compared to
Signing Ceremony of Global Trade
Finance Program (GTFP) with Tk.439.22 million of the previous year. Income increased by Tk.517.58 million
International Finance Corporation registering a growth of 117.84%. Investment income consists of interest earned on
(IFC) held on April 23, 2007 treasury bills and bonds and dividend received on shares.

Other Income
In the year under review, commission, exchange and brokerage earnings increased to
Tk.1,159.02 million from Tk.1,084.18 million in 2006, showing an increase of 6.90%.
This was due to enhanced trade related and fee-based activity.

Operating Expenses
In the year under review, total operating expenses stood at Tk.901.77 million as against
Tk.658.82 million of the previous year, thus, registering an increase of 36.88%.

28. Net Profit before Tax


Net profit of the Bank before tax stood at Tk.2,597.04 million in 2007 as against
Tk.1,638.32 million of the previous year, showing an increase of 58.52%.
Annual Report 2007

Board's Report

29. Net Profit after Tax

Net profit of the Bank after tax stood at Tk.1,222.97 million in 2007 as against
Tk.909.88 million of the previous year, thus, posting an increase of 34.41%. Alamgir Kabir, FCA, Chairman
handing over a cheque for Tk.5
on 29.11.2007 to the Army Rel
30. Statutory Reserve for Cyclone-SIDR

The Bank transferred Tk.519.41 million to statutory reserve as 20% of the profit after
provisions before tax and dividend during the year as per Section 24 of the Bank
Company Act, 1991. The total amount of Statutory Reserve stood at Tk.1,544.29 million
including the amount transferred in 2007.

31. Customer Service

The Bank focuses on customer friendly marketing approaches, mobilizes resources and
caters to the ever-growing financing needs of clientele by offering best competitive rates
through diverse financial products and services. Our marketing strategy is to provide
total solutions to the customer needs by constantly evaluating existing service standard
to bring dynamism and improvement in customer service. The Bank has introduced
relationship banking in asset and liability marketing with a view to providing efficient
personalized services to the target market through product diversification. The Bank has
been widely acclaimed by the business community ranging from small entrepreneurs to
large business houses and industrial conglomerates, multinationals etc. for possessing
visionary business outlook and offering innovative financial solutions to customers. The
Bank brought world class banking to clients doorstep by launching Real Time On Line
Any Branch Banking Service-using satellite based modern VSAT technology.

Customer care remains in our clear focus. We frequently visit our customers to listen to
their problems and thereby provide solutions immediately. Special counters are opened
to meet the growing demands of customers during heavy customer flow, especially
during IPO, bill collection, Eid etc. In order to give easy access to our products and to
give best possible services to the customers, the Bank offers personalized services by
recruiting highly exprienced and customer focused professionals. In order to provide
full support and high quality service, a Complaint Cell has been kept functional to
address customers issues with priority. Customers, in a nutshell, are the prime priority
Neaz Ahmed, Managing Dir
for the Bank and the company philosophy is to satisfy clients who act as ambassadors the Bank, is seen handing
of the Bank for its image building. cheque for Tk.25.00 lac
hillslide victims of Chi

32. Research and Development (R&D) and Training

In order to consolidate the existing position and cope with the ever increasing growth
potentials, the Bank focuses on making continuous investment in Research and
Development (R&D) and Training to optimize operational efficiency. The Banks
human resources policy is to build up quality workforce 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 conceptual skills. The
Institute is focused to ensure a formal platform where employees can exchange free
ideas, update knowledge base and open up their eyes to the complexities of banking
world. The objectives of designing all training programs are to bridge the gap between
present level of competence and desired level of competence of human resources.
36 Annual Report 2007

Board's Report

During the year 2007, the Southeast Bank Training Institute (SEBTI) arranged a total of
31 training courses, seminars and workshops with 1,066 participants. The particulars of
Alamgir Kabir, FCA, Chairman is seen internal trainings conducted in 2007 are as under:
handing over a cheque for Tk. 50.00
lac to the Chief Advisor on December Training Course/Workshop/Seminars Frequency Number of
03, 2007 for relief operations amongst
Cyclone-hit people
Participants
1. Foundation Training Course 03 77
2. Credit Risk Management (CRM) 01 35
3. Credit Risk Grading 02 70
4. Asset Liability Management 01 38
5. Foreign Exchange Risk (UCP 600) 01 45
6. Internal Control and Compliance 01 39
7. Anti-Money Laundering 12 441
8. New Capital Accord (Basel-II) 01 45
9. Credit Card Operation 01 32
10. Credit Information Method in CIB Form 01 29
11. Awareness on Cash Management 01 33
12. SBS 1, 2, & 3 01 35
13. SWIFT Operations 01 34
14. HO General A/C Reconciliation 01 27
15. Other Banking Related Trainings 03 86
Total 31 1,066

The Bank also set up an IT Training Institute in 2005 at the 4th floor of Head Office
premises and conducted 6 Training Courses in 2007 with 144 participants to enhance
IT knowledge base of employees and prepare them for the rapid technological changes.
Besides internal training, the Bank sent a total of 164 executives and officers in different
external training courses both at home and abroad. The particulars of participants in
external training courses in 2007 are as follows:

Training Course/Workshop/Seminars Frequency Number of


Participants
1. Different Banking Related Training Course/ 22 39
Workshops (namely on Credit, Foreign Exchange,
s
A modern Composite Knit General Banking) conducted at BIBM.
Industry financed by the Bank
2. Foundation Training Course at BIBM 01 32
3. Training Course/Workshops Seminars conducted 51 71
at different Training Institutes of the country other
than BIBM. (namely at BB Training Academy,
BAFEDA, SEC)
4. Training Courses / Seminars / Workshops abroad 17 22
Total 91 164

In addition to training, the Bank continuously searches for improvement in Research


and Development (R&D). The Bank has introduced Quality Management System (QMS)
and Procedures in recognition of which the Bank has obtained ISO 9001: 2000
Certification from DET NORSKE VERITAS, NETHERLAND for designing, developing
and providing banking products and services to bring excellence in banking operations
and customer service. The Bank has introduced Operational Manual on General
Banking including Manuals on core risk areas to standardize the operational procedures
and to ensure proper house keeping with operational efficiency.
Annual Report 2007

Board's Report

33. Risk Management of the Bank


Risk in Banking Industry is the possibility/uncertainty of the outcomes of an action or
event that may bring up adverse impact upon the Bank or result in direct loss of
earnings/capital or imposition of constraints on Banks ability to meet its business
Group photo of the participa
objectives. An elaborate risk report of the Bank is given at page 65. Foundation Training Course
Management Ex
34. Merchant Banking Operation
The operations of capital market were remarkable through creation of new scope of
investment and introduction of fresh capital from inside and outside the country by the
individuals and institutional investors in recent years. The Bank, a leading market
intermediary, expects to take part in all activities of operations of capital market in
Bangladesh. We firmly believe our Merchant Banking Operations will play an
important role in the improvement of capital market of the country and enhance earning
capability of the Bank. It is expected that capital market operation will be a big profit
center for the Bank. Our strategy is to deploy resources to establish as a leading
investment advisor and wealth management institution in Bangladesh. Innovative
products, appropriate advice, unparalleled service and relationships will be the key to
the success of this operation.
Necessary permission for Merchant Banking Operation from the Securities and
Exchange Commission under Merchant Banking and Portfolio Management Regulation
1996 is in the process. The Division is poised to start the full fledged merchant banking
activities which includes Issue Management, Underwriting and Portfolio Management.
Moreover, we are committed at all times to the highest levels of privacy and discretion.
Beyond the services of a merchant bank, we also meet our clients needs by engaging
ourselves in the activities of i) Custodial Banking Services ii) Banker to the Issue iii) Lead
Banker for IPO iv) Investment in Quoted Securities v) Capital Advising, Sourcing and
Placement vi) Private placement in IPO and vii) Investment in Preference Shares.

35. Islamic Banking Operation


Southeast Bank Limited is a full-house Bank which caters both traditional and islamic
banking services. The Bank started its islamic banking operation through opening 3
(three) Islamic Banking Branches in the year 2003. In the year 2004, the Bank opened
2 (two) more Islamic Banking Branches for smoothly running its Islamic Banking
operation based on the principles of Islamic Banking Shariah. At present, the Bank has
5 (five) Islamic Banking Branches. A partial view of
Chemical Industry f
All activities of Islamic Banking Branches are conducted on interest-free system by th
according to Islamic Shariah principles. Investment is made through different modes
and investment income is shared with the Mudaraba Depositors on an agreed ratio,
ensuring a reasonably fair rate of return on the deposits based on Islamic Shariah. The
Islamic Banking operations are completely separate from the conventional banking. The
Bank has constituted a Shariah Council to advise and provide guidance on Islamic
Banking operations. Leading Islamic Scholars of the country well versed in Shariah
concerning Islamic Banking operations are on the Banks Shariah Council comprising:
01. Moulana Md. Aminul Islam, Chairman, Shariah Council and Khateeb, Lalbagh
Shahee Jame Mosque, Dhaka and Editor, Monthly Al- Balagh, Dhaka (expired on
November 19, 2007, Inna lillahe)
02. Professor Moulana Mohammad Salah-Uddin, Vice Chairman, Shariah Council and
Former Principal, Madrasha-e-Alia, Dhaka and Khateeb, Gousul Azam Jame
Mosque, Banani, Dhaka.
03. Mr. A. S. M. Fakhrul Ahsan, Member, Shariah Council and former Deputy
Governor, Bangladesh Bank.
38 Annual Report 2007

Board's Report

The Bank recruited skilled and experienced bankers and established Islamic Banking
Wing at Head Office to run the Islamic Banking operations smoothly and strictly based
on shariah principles. A separate set of accounts is being maintained by the Bank for
A partial view of an under
construction Medical College Islamic Banking Branches. Under the guidance of Shariah Council, the Bank designed
& Hospital building under all deposits, investments products and services of the Islamic Banking Branches and
Bank's finance
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. The Bank also maintains close relationship with Islamic Banks in
Bangladesh and abroad.

As on December 31, 2007, the deposits and investments of Islamic Branches were
Tk.5592.69 million and Tk.2053.71 million showing an annual growth of 37.55% and
45.06% respectively. In 2007, total import and export business handled by the Islamic
Banking branches of the Bank were Tk.781.97 million and Tk.440.65 million
respectively recording significant growths. Non-Performing Asset of Islamic branches
was 0.0040% of total investment as on 31st December, 2007.

36. Credit Card

The Bank started issuance of Visa Credit Card in early 2005 along with five major
competitors in this business. Currently, there are as many as twelve card issuing Banks
and many more Banks are planning to enter the market. At this stage, we are
experiencing fierce competition. In consequence, charges and fees have come under
pressure resulting in low profit margin. In 2007, we have made an operating income of
Tk.54.30 million with an average monthly income of Tk.4.53 million. We have issued
7450 Cards up to 31st December, 2007. The Bank registered growth of 24.17% in
marketing cards and 31.16% in income during the year under review.

Despite sharp competition among competitors, our challenge is not only to retain the
market share but also to increase the card base. While issuing new cards, we exercise
due diligence and put in conscious efforts in selecting cardholders. Besides, we have
launched a few campaigns with attractive offers which included reduced card fee and
s cash refund on purchase to create impact in the market. Such campaigns were also
A Knitwear Industry financed by aimed at building fair image of the Bank.
the Bank is in operation
In order to bring diversification in the card business, we are planning to launch some
new products in the near future. We have already introduced SMS Push-Pull service to
trigger transaction alert, balance enquiry and other status of card accounts. We shall
soon launch Card Cheque facility to remain competitive with other major players in the
industry.

37. Branch Expansion Program

The Bank is presently operating with 41 branches including 5 Islamic Banking branches
and 9 rural branches located at important business centers of the country. The Bank has
achived the highest per branch profit in 2007. To cater to the increasing demand of the
clientele, the Bank plans to open 9 (nine) more branches in 2008 in important business
hubs including non-urban growth centers to contribute to expansion of trade,
commerce and industries subject to obtaining licence from Bangladesh Bank.
Annual Report 2007

Board's Report

38. Credit rating on the Bank

Name of Particulars Long Term Short Term Remarks


the Rating Alamgir Kabir, FCA, C
Company of th Bank opened the
Madhabdi Branch, Narsi
Entity A1 ST-2 Based on December
Rating Single A High Grade Audited
(High Safety) Financial
Statements
Credit Rating Commercial Banks rated Commercial Banks rated as on 31
Agency of in this category are in this category are December
Bangladesh adjudged to be strong considered to have strong 2007
Limited banks, characterized by capacity for timely
good financials, healthy repayment. Banks rated
and sustainable in this category are
franchises, and a first rate characterised with
operating environment. commendable position in
This level of rating terms of liquidity,
indicates strong capacity internal fund generation,
for timely payment of and access to alternative
financial commitments, sources of funds is
with low likeliness to be outstanding.
adversely affected by
foreseeable events.

Reporting Date: 30 March, 2008

39. Awards and Recognition


Southeast Bank believes that fully effective functioning of corporate governance is one
of the top priorities of the Bank for realizing its corporate objectives. The Bank
endeavors to publish its every Annual Report with full disclosures and Financial
Statements maintaining the accounting standards. In acknowledgement, the Institute of
Chartered Accountants of Bangladesh (ICAB) gave Recognition Awards to the Bank for
the best-published accounts of 2006. The Bank has introduced Quality Management
System (QMS) and Procedures in recognition of which the Bank has obtained ISO 9001:
2000 Certification from DET NORSKE VERITAS, NETHERLAND for bringing excellence
in banking operations and customer service.

40. Role of our Bank in the National Economy View of a f


manufacturin
Economy and banking Industry go together and are inseparable. Our Bank has been
financed by th
playing an important role in the economic development of the country. As many as
1,116 people are in the employment of the Bank as on December 31, 2007. Besides, we
have generated employments for hunderds of people in the projects and industries
established under our finance. We have been financing the trade and commerce of the
country since inception of the Bank in 1995. We have handled a big volume of country's
exports and imports. The deposits our Bank mobilized through the outlets of branches
helped in the formation of capital in the country. Our lending to borrowers reached
Tk.48,164.60 million as on December 31,2007. It has contributed to the
industrialization and improvement of trade and commerce of the country which
ultimately accelerated economic growth and national welfare through multiplying effect.
In 2007, we have given Tk.1,148.03 million to the national exchequer by way of
Corporate Tax. We have collected VAT and tax on interest / profit earnings of customers
of the Bank. Inward proeign remittance from the Bangladeshi wage earners abroad. eqv.
to Tk.11,040.17 million was brought into the country through our Bank in 2007. We
have donated Tk.16.42 million for relief and rehabilitation of natural calamity-hit
people of the country in 2007.
40 Annual Report 2007

Board's Report

41. Corporate Governance

One of the basic policies of the Bank is to strengthen its corporate governance status by
Neaz Ahmed, Managing Director establishing responsible management system and strengthening supervision. Efforts are
is seen addressing the workshop also being geared up to improve the transparency and accountability of the
on Basel-II participated by all
Heads of Branches
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.

In corporate governance, the Bank complies with the principles enunciated in BRPD
Circular No. 11 dated November 05, 2007 of Bangladesh Bank regarding the
composition of the Board of Directors, term of office of the Director, and competence
and eligibility of the Director. The Bank is also implementing the requirements
contained in Securities and Exchange Commission Notification No.
SEC/CMRRCD/2006-158/Admin/02-08 dated February 20, 2006. A brief report about
corporate governance scenario of Southeast Bank Limited is given at the page 60.

42. Appointment of Statutory Auditors

In the 12th Annul General Meeting of the Bank, M/S Hoda Vasi Chowdhury and Co.
was appointed External Auditors of the Bank for the term till conclusion of the next
Annual General Meeting. They are eligiable for re-appointment as External Auditors by
the shareholders in the 13th Annual General Meeting.

43. Dividend

The Bank focuses on the principles of sharing good achievements with the respected
Shareholders. Accordingly, the Board of Directors recommends 15% Cash Dividend
and 25% Stock Dividend (Bonus Share) in 2007. The Banks priority is to increase
shareholders value by enhancing the overall earnings of the Bank.

44. Election of Directors

Section 15KAKA of the Bank Company Act-1991 has been replaced by Bank Company
(Amendment) Ordinance-2007 dated October 08, 2007.
s
A Composite Knit Industry
financed by the Bank
Amended Section 15KAKA of the Act provides that whatever provision made in any
other law or in the Memorandum or Articles of Association of the Bank Company, the
term of office of a Bank Director shall be 3 (three) years and no Director shall remain
in office in 2 (two) consecutive terms for 6 (six) years.

As per provision of Section 15KAKA of the Bank Company Act, the following Directors
shall retire in the 13th Annual General Meeting of the Bank and are eligible for re-
election for the second term in the same Annual General Meeting.
1. Tillaghar Holdings Limited
2. Mr. Alamgir Kabir, FCA

45. 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 2007 is given at page 68 of this Annual Report.
Annual Report 2007

Board's Report

46. Acknowledgement
The Board expresses gratitude to the Almighty Allah for the grand success of the Bank
Neaz Ahmed, Managing D
in 2007. The Board extends thanks to the valued customers, patrons and well-wishers is seen with the Executi
for their continued support and co-operation to the Bank. The Board also places on Officers who receiv
rewards for deposit mobiliz
record its high appreciation for the Managing Director, all Executives and other
the Bank's get togother Par
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, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited
and Registrar of Joint Stock Companies and Firms for their appreciable support and co-
operation to the Bank. The Board also expresses its appreciation to M/S. Huda Vasi
Chowdhury & Co., 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 personnels for giving media coverage to Banks different
activities.

Finally, the Board thanks the respected Shareholders and assures them that it will
continue to add to the Shareholders 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

A partial view of a moder


export oriented textile
financed by th
42 Annual Report 2007

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44 Annual Report 2007

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xrKf @~ 443.78
oJa oNuij 5,573.85

U) mJzKf oNuij (aJ~Jr-2 oNuij) :


IPvseLTf EPer \jq xJj 500.00
xJmq hJP~r Ckr xJj 107.10
xh kNj:oNuqJ~j Kr\Jnt 283.21
FPY AT~JuJAP\vj KyxJm 4.20
oJa mJzKf oNuij 894.51
oJa oNuij S Kr\Jnt (T+U) 6,468.36

05. oNuij kptJfJ


mJuJPhv mqJT TftT KjitJKrf vfTrJ 10 (hv) nJV oNuij kptJfJ IjMkJPfr KmkrLPf 31v
KcPxr, 2007 fJKrPU mqJT ^KTkNet xPhr Ckr 13.00 nJV oNuij kptJfJ IjMkJf m\J~ rJPU

06. kMK\mJ\JPrr xJKmtT KY


mJ\Jr IgtjLKf kxJPrr F pMPV IgtQjKfT xmJxoMPyr @iMKjTJ~j, TJP\ v~JPrr ujPhPjr ImxJj
Fm TsL~ \oJnJJr mqmJr oJiqPo APuTasKjT v~Jr ujPhPjr xNYjJr lPu PhPvr kMK\mJ\Jr
IKiT kKroJe v~Jr ujPhj, KmKjP~JVTJrLr xUqJ mOK, v~Jr mJ\JPr IKiT kMK\KmKjP~JV knOKfr
AKfmJYT knJm kKruKf y~
2007 xJPu hPvr v~Jr mJ\Jr mqJkT kmOKr xJq myj TPr mJ\Jr oNuij, xJiJre xNYT Fm
ujPhPjr kKroJe F mZr CPuUPpJVq yJPr mOK kJ~ hPvr hMKa v~Jr mJ\Jr fgJ dJTJ T FPY
S YVJo T FPYP F 2007 xJPur vPw mJ\Jr oMuiPjr kKroJe KZu pgJPo 742.20 KoKu~j
aJTJ Fm 612.58 KoKu~j aJTJ pJ 2006 xJPur vPw KZu pgJPo 315.45 KoKu~j aJTJ Fm
270.51 KoKu~j aJTJ F fgq gPT hOvqoJj y~ p, v~JrmJ\JPr oNuij pJVJPjr kKroJe mOK
PkP~PZ pgJPo KcFxAPf 136.28% Fm KxFxAPf 226.45% hPvr kiJj hMKa kKfKf v~Jr
oNuqxNYT KcFxA xJiJre xNYT Fm KxFxA xTu v~JPrr oNuqxNYT 2007 xJPur vPw pgJPo
3,017.21 kP~ Fm 7,657.06 kP~P kRZJ~ pJ, 2006 xJPur vPw KZu pgJPo 1,609.25
kP~ Fm 3,724.39 kP~ F P kmOKr yJr KcFxAPf 87.49% Fm KxFxA Pf 105%
2007 xJPu oJa 14Ka TJJjL v~Jr mJ\JPr kPmPvr oJiqPo fJPhr mqmxJ xxJrPer \jq fyKmu
xVy TPr kJgKoT Ve-kJPmr oJiqPo F TJJjLPuJ v~JPrr ImKyf oNPuqr xoJj 10,056
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

KoKu~j aJTJ v~Jr oJPTtPa xJuj TPr F mZr xPTJrL v~JrmJ\JPrr fyKmPur mOyr Iv @Px
mqJT, mLoJ TJJjL, KoCY~Ju lJ, lJCPvj, KuK\ TJJjL, oJPYt mqJT knOKf kJKfJKjT
v~JrPyJflJrPhr TJZ gPT xJiJre v~JrPyJflJrPhr TJZ gPTS xPTJrL oJPTtPa CPuUPpJVq
kKroJe fyKmu kMK\mJ\JPr xJKuf y~
2007 xJPu kMK \mJ\JPr KmKjP~JVTJrLPhr oPiq nJu oJPjr v~JPrr YJKyhJr TJrPe hPvr v~JrmJ\Jr
CPrJr CjKf uJn TPr Fr lPu hPvr Cn~ v~JrmJ\JPr v~JPrr YJKyhJ S pJVJPjr oPiq FTKa
xJoxqyLjfJ kKruKf y~ nJu oJPjr v~JPrr YJKyhJ S pJVJPjr F xJoxqyLjfJr lPu hPvr
Cn~ v~JrmJ\JPr KTZ TJJjLr v~JPrr IJnJKmT oNuqLKf kKruKf y~ F kKrKKf
kptJPuJYjJ TPr hPvr FToJ kMK\mJ\Jr Kj~T xJ, KxKTCKrKa\ F FPY TKovj, Mhs
KmKjP~JVTJrLPhr oNuij yJrJPjJr of IjJTJKf kKrKKf oJTJPmuJ TrPf Fm v~JrmJ\Jr
JnJKmT rJUPf kP~J\jL~ khPk Vye TPr

07. xJCgA mqJPTr v~Jr Fm v~JryJflJrmO


T) vKvJuL mJ\JrKnK KmKv FTKa v~Jr
v~Jr ujPhPjr xUqJ S oJa ujPhPjr @KgtT oNPuqr KnKPf dJTJ T FPYPr KcFx-20
v~JPrr fJKuTJ~ 2007 xJPur KcPxr oJPx xJCgA mqJPTr v~Jr 5o ImJPj KZu vKvJuL
mJ\JrKnKr TJrPe dJTJ S YVJo T FPYP @oJPhr v~Jr vLwt 20 fJKuTJ~ 'F' TqJaJVKrr v~Jr
KyPxPm ujPhj y~ @oJPhr v~JPrr vKvJuL mJ\JrKnK gJTJr TJre Cfr jLa xhoMuq,
v~JrkKf @P~r CyJr, mJ\Jrhr IjMkJPf xPJw\jT unqJPvr yJr, v~Jr ujPhPjr @KgtToNuq
IjMpJ~L IKiT fJruq, kKrPvJKif oNuij KyPxPm IKiT mJ\Jr oNuij kmJy, IKiTxUqT v~JrPyJflJr
knOKf AKfmJYT KhT xJCgA mqJPTr kKrYJujJ kwth, Dtfj mqmJkjJ TftOk S TotTftJmO
mqJPTr IgtQjKfT kmOK WaJPjJr oJiqPo v~JrPyJflJrPhr xh mOK TrPf Ifq @KrT
FTAxJPg fJrJ mqJPTr mqmxJ kxJPrr \jq VbjoNuT krJovt Fm fJ mJmJ~Pjr Ckr pgJpg
fJPrJk TPr gJPTj

U) v~JrPyJflJr xUqJ
kJgKoT VekJm gPT TPr mqJPTr v~JrPyJflJr xUqJ mOKr iJrJ ImqJyf rP~PZ, 2007 xJPur
vPw mqJPTr v~JrPyJflJPrr xUqJ hJzJ~ 9,636 \j, 2006 xPjr 31 v KcPxr fJKrPU pJr xUJ
KZu 8,855 \j v~JrPyJflJr xUqJ~ kmOKr yJr 8.82% v~JrmJ\JPr fJKuTJnNKr xo~ gPT
TPr mqJPTr v~JrPyJflJr xUqJ mOKr yJr jLPY hS~J yu
mZr v~JrPyJflJr mOKr yJr
2000 1,266
2001 1,429 12.88%
2002 1,666 16.59%
2003 2,912 74.79%
2004 4,704 61.54%
2005 5,750 22.24%
2006 8,855 54.00%
2007 9,636 8.82%

V) v~JrkKf ijJT @~
2007 xJPur vPw @oJPhr mqJPTr xJiJre v~JPrr xUqJ hJzJ~ 2,28,17,583 dJTJ S YVJo
T FPYP~ 2000 xJPu fJKuTJnN yS~Jr xoP~ Fr kKroJe KZu 30,00,000 KmVf
mZrPuJPf 1,98,17,583Ka v~Jr mJjJx S rJAa @TJPr Pv~JrPyJflJrPhr oPiq mj TrJ yP~PZ
pJr lPu mqJPTr xJiJre v~Jr xUqJ 660 vfJv mOK kP~PZ PpPyf @orJ Kfj mZr pJm
iJrJmJKyTnJPm kYr oMjJlJ I\tj TPrKZ xPyf IKiTyJPr mJjJx v~Jr mj Fm v~JrkKf @P~r
46 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

oPiq FTKa xMxoj~ m\J~ rP~PZ v~Jr mJ\JPr fJKuTJnNKr xo~ yPf mqJPTr v~JrkKf ijJT
@P~r fgq jLPY hUJPjJ yu-
mZr v~Jr kKf @~
2000 57.61
2001 82.04
2002 69.85
2003 45.38
2004 43.52
2005 35.42
2006 59.71 (xoKjf)
2007 53.60

W) xPJw\jT jLa xhoNuq


@oJPhr mqJPTr oJa hJP~r fujJ~ xPhr kKroJe IKiT Fm v~JrkKf xmthJ xPJw\jT jLa
xhoMuq m\J~ rP~PZ 2007 xJPu mqJPTr v~JrkKf jLa xhoNuq hJzJ~ 269.29 aJTJ, 2006
xJPur vPw pJr kKroJe KZu v~JrkKf 239.47 aJTJ pJ jLa xhoNPuqr 12.45% Cfr kmOK
khvtj TPr jLPY KmVf 8 (IJa) mZPrr v~JrkKf jLa xhoNuq hUJPjJ yu
mZr v~JrkKf jLa xh oNuq mOKr yJr
2000 148.38
2001 182.20 22.79%
2002 211.33 15.99%
2003 169.05 (20.01) %
2004 162.38 (3.95) %
2005 192.80 18.73%
2006 239.47 24.21%
2007 269.29 12.45%

X) mqJPTr IjMPoJKhf S kKrPvJKif oNuij


1995 xJPu @oJPhr mqJT mqmxJ TrJr xo~ mqJPTr IjMPoJKhf oNuij KZu 500 KoKu~j aJTJ
Fm kKrPvJKif oNuiPjr kKroJe KZu 100 KoKu~j aJTJ 2007 xJPur vPw mqJPTr IjMPoJKhf
oNuij S kKrPvJKif oNuiPjr kKroJe hJzJ~ pgJPo 3500 KoKu~j aJTJ S 2,281.76 KoKu~j aJTJ
mqmxJ TrJr xo~ gPT F kpt @oJPhr mqJPTr IjMPoJKhf S kKrPvJKif oNuij mOKr yJr
pgJPo 600% Fm 2,181.76% mqJPTr oNuij kptJfJ m\J~ rJUJ Fm @KgtT Knf vKvJuL
TrPf, mqJT IjMPoJKhf S kKrPvJKif oNuiPjr kKroJe mOK TPr mqJPTr IjMPoJKhf S kKrPvJKif
oNuiPjr mZrKnKT xJreL KjPo h~J yu

mZr IjMPoJKhf oNuij kKrPvJKif oNuij


(KoKu~j aJTJ) (KoKu~j aJTJ)
1996 500.00 100.00
1997 500.00 125.00
1998 500.00 150.00
1999 500.00 300.00
2000 500.00 330.00
2001 500.00 363.00
2002 2,500.00 399.30
2003 2,500.00 677.16
2004 2,500.00 880.31
2005 2,500.00 1,056.37
2006 3,500.00 2,112.74
2007 3,500.00 2,281.76
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

Y) ImqJyfnJPm nJu unqJv WJweJ


mqJT ImqJyfnJPm nJu unqJv WJweJr jLKf IjMxre TPr Fm nJu yJPr v~JrPyJflJrVePT unqJv
khJj TPr mqmxJr kKrKi mJzJ~ mJzKf oNuiPjr kP~J\j oaJPf mqJPTr IK\tf oMjJlJ yPf mqJT
oNuijL unqJv khJj TPrPZ mqJPTr jVh unqJv S oNuijL unqJv WJweJr KY Kjok :

mZr jVh unqJv oNuijL unqJv oJa unqJv


1999 15% 15%
2000 25% 10% 35%
2001 30% 10% 40%
2002 20% 10% 30%
2003 20% 20% 40%
2004 30% 30%
2005 20% 20%
2006 20% 8% 28%
2007 15% 25% 40%

Z) v~JPrr oJxS~JrL mJ\JroMuq S ujPhjTf v~JPrr oJa oMuq


2007 xJPu mqJPTr v~Jr dJTJ T FPYP oJa 236 Khj Fm YVJo T FPYP oJa 237
Khj ujPhj y~ 30v KcPxr 2007 fJKrPU xoJkjL mJ\JroNPuqr KnKPf mqJPTr ujPhjTf
v~JPrr oJa oNuq hJzJ~ dJTJ T FPYP 13,080.18 KoKu~j aJTJ Fm YVJo T FPYP
13,137 KoKu~j aJTJ jLPY KcFxA S KxFxA-Pf 2007 xJPu @oJPhr v~JPrr oJxS~JrL xPmtJ
S xmtKjo mJ\JroMuq Fm ujPhjTf v~JPrr oJa oNuq hUJPjJ yu

oJPxr jJo xPmtJ oMuq xmtKjo oNuq ujPhjTf v~JPrr oMuq


(aJTJ) (aJTJ) (KoKu~j aJTJ)
KcFxA KxFxA KcFxA KxFxA KcFxA KxFxA
\JjM~JKr 395.50 399.00 308.50 310.00 777.99 294.12
lms~JKr 393.75 390.00 320.00 323.00 368.43 138.39
oJYt 360.00 356.00 317.00 305.00 352.23 107.49
FKku 341.50 345.00 290.00 290.00 254.65 86.67
o 467.50 470.00 324.75 324.00 1,860.56 350.54
\Mj 500.00 499.00 430.00 427.25 2,247.85 188.04
\MuJA 593.00 591.00 475.00 472.25 3,056.34 181.03
@V 583.75 581.00 500.00 500.00 589.53 39.52
xPr 567.00 564.00 498.00 500.00 717.99 94.02
IPJmr 576.00 580.00 509.00 509.00 760.63 176.28
jPnr 584.00 584.50 525.00 520.00 652.60 37.06
KcPxr 586.00 586.00 520.00 514.00 530.07 19.07
ujPhjTf v~JPrr oJa oNuq 12,168.87 1,712.23

\) mqJPTr rJAax& v~Jr AxMq


oNuiPjr v Knf VPz fuPf mqJT kKfJuV gPT F kpt fJr v~JrPyJflJrPhrPT rJAax& v~Jr
KyPxPm oJa 1,22,13,696Ka v~Jr AxMq TPrPZ Fr oPiq 2006 xJPu 100/- aJTJ KkKo~Joxy
200/- aJTJ AxMq oNPuq 1Ka KmhqoJj v~JPrr KmkrLPf 1Ka v~Jr KyPxPm oJa 1,05,63,696Ka Fm
2003 xJPu IKnKyf oNPuqr xoyJPr kKf 2Ka v~JPrr KmkrLPf 1Ka v~Jr KyPxPm oJa
16,50,000Ka rJAax& v~Jr AxMq TPr
48 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

^) @oJPhr v~JPrr mKvqxoNy


@oJPhr mqJPTr v~JrPT KjoKuKUf mKvPqr TJrPe hPvr Cn~ v~JrmJ\JPr 'F' TqJaJVKrr v~Jr
KyxJPm Veq TrJ y~
1 v~Jr kKf C xh oNuq
2 mJ\Jr oNPuqr KmkrLPf xPJw\jT unqJPvr yJr
3 xJrJ mZrmqJkL KcFxA Fm KxFxA vLwt-20 xNYPT ImJj
4 KmVf @a (8) mZr iPr v~JrPyJflJrPhrPT 20% mJ fPfJKiT yJPr unqJv khJj
5 kJgKoT VekJm gPT TPr iJrJmJKyTnJPm v~JrPyJflJr xUqJ mOKr kmefJ mqJPTr kKf
KmKjP~JVTJrLPhr @Jr kKrYJ~T
6 v~Jr kKf @~ ijJT S xPJw\jT

08. @oJjf :
mqJT 31v KcPxr 2007 kpt 55,474.05 KoKu~j aJTJ @oJjf xVy TPrPZ pJ 2006 xJPu KZu
46,056.18 KoKu~j aJTJ F xoP~ @oJjPf kmOKr yJr 20.45% kKfPpJVLfJoNuT xMPhr yJr,
@TwteL~ @oJjf keqxoNy mqJPTr @oJjf xVPyr TJptTr kPYJ Fm mqJPTr Ckr VJyTPhr
@JA @oJjPfr F CPuUPpJVq IVVKfPf ImhJj rPUPZ mqJT hs S oJ^JKr x~TJrLPhr \jq
mv KTZ @TwteL~ x~ kT YJuM TPrPZ x~ kTxoNy iM @oJjPfr kKroJe mOK TPrKj
@oJjPfr eVf oJPjrS kKrmftj WKaP~PZ 31Pv KcPxr 2007 fJKrPU mqJPTr @oJjf Kovse
KZu Kjk :
KoKu~j aJTJ oJa @oJjPfr Iv
T) YuKf S IjqJjq @oJjf 3,939.80 7.10%
U) x~L @oJjf 3,433.49 6.19%
V) o~JhL @oJjf 3,988.75 7.19%
W) J~L mJ o~JhL @oJjf 40,368.38 72.77%
X) KmKnj kTPr @SfJ~ xVOyLf @oJjf 3,055.35 5.51%
Y) kPh~ KmPur KyxJm UJPf 688.28 1.24%
oJa : 55,474.05 100%

09. Ee S IVLo
hPvr xJKmtT IgtQjKfT, xJoJK\T S rJ\QjKfT kKrKKf KmPmYjJ TPr xJCgA mqJT 2007 xJPu
EehJj P kKrKof @TJPr kmOKr kKrTjJ Vye TPr 31 v KcPxr 2007 xJPu mqJPTr oJa
Ee S IVLPor kKroJe kNPmtr mZPrr 41,147.28 KoKu~j aJTJ gPT mOK kP~ 48,164.60 KoKu~j
aJTJ~ CjLf yS~J~ 2007 xJPu EPer kKroJe 17.05% mOK kP~PZ 2007 xPj mqJT hPvr @gt
xJoJK\T ImJ KmPmYjJ TPr S xrTJPrr jLKfr xP xKf rPU TKw P Ee kmOKr Ckr f
h~ FmZr mqJT xrJxKr Fm kPrJnJPm FjK\Sr oJiqPo VJoLe vJUJxoNy gPT kJ~ 151.00
KoKu~j aJTJr TKw Ee Kmfre TPr
mqJPTr KmfreTf Ee S IVLo KZu KmKmioMUL pJ frL kJwJT Kv, aaJAu S KKj Kv,
aKuPpJVJPpJV, Hwi Kv, AJf S kPTRvu Kv, \JyJ\ nJJ, KxPo Kv, KrP~u FPa, nJ\q
fu Kv, KvJ Fm kKrmyjxy KmKnj UJPf xMwonJPm Kmjq FZJzJS, mqJT Fx,Fo,A, Kca S
Tj\MqoJr Kca LPor oJiqPo hs CPhqJJ IgtJ~j kT YJuM TPrPZ Fm hKrhs \jPVJKr CjKfTP
mv KTZ FjK\SPT IgtJ~j TPrPZ
mqJT FKcKmr kNe:IgtJ~j xMKmiJr KmkrLPf kJKrf kJTKfT VqJx TJ Ku: (@rKkK\KxFu) TftOT
VOyLf dJTJ KTj lP~u kP\Pr @SfJ~ KxFjK\ YJKuf mJx S KlKu vPj IgtJ~j TrPZ Ee oMrL
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

kK~J~ pgJpg ^KT KmPvwe S fKz KxJ VyPer xMKmiJPgt kiJj TJptJuP~r Ee KmnJPV VJPotx
ACKja, KxKPTvj ACKja, kT Ee ACKja, hs S nJJ Ee ACKja AfqJKh kOgTnJPm TJ\ TPr
pJP xKf mJuJPhv mqJPTr kMj:IgtJ~Pjr KmkrLPf @P~r VJyTPhr VOyKjotJPe Ee khJPjr
\jq FTKa LoS YJuM TPrPZ
xPhr CoJj m\J~ rJUJr \jq @orJ xPY rP~KZ @oJPhr VJyTPhr xPJw\jT mqmxJK~T
ujPhj S xy\JoJjPfr Ckr f khJPjr kJvJkJKv kh EPer vseLTf yS~Jr kmefJ ysJx TrJr
\jq Ee fhJrKT TJpto \JrhJr TrJ yP~PZ mqJPTr vseLTf EPer yJr KmVf mZPrr 3.97%
gPT 2007 xJPu ysJx kP~ 3.77% F hJKzP~PZ

10. kKrYJuT Ee
2007 xPj mqJPTr kKrYJuTPhr mqJT gPT TJj jfj Ee khJj TrJ y~Kj

11. VqJrJK mqmxJ


mqJT 2006 xJPur 8,656.80 KoKu~j aJTJr KmkrLPf F mZr oJa 9,008.32 KoKu~j aJTJr
VqJrJK AxMq TPr FP kmOKr yJr 4.06% nJV mqJPTr xJKjf VJyTPhr @PmhjPo KmKnj
xrTJrL TftOk, oeJu~, J~fvJKxf kKfJj, TPktJPrvj, m\JKfT TJJjLxy KmKnj kKfJPjr
IjMTPu CkpM \JoJjPfr KmkrLPf VqJrJK AxMq TrJ y~

12. FxFoA IgtJ~j


mqJT 2004 xJPu FxFoA IgtJ~j kT YJuM TPrPZ F UJPf KmPvw j\r hS~Jr uPq mqJT kiJj
TJptJuP~ FTKa @uJhJ FxFoA ACKja' kKfJ TPrPZ 31v KcPxr 2007A kpt 1513Ka
FxFoA KyxJPm oJa 2,023.05 KoKu~j aJTJ Ee khJj TrJ y~ 2006 xJPu 1,337Ka KyxJPm oJa
2,440.50 KoKu~j aJTJ Kmfre TrJ yP~KZu FxFoA IgtJ~Pj kmOKr yJr 23.87%

13. nJJEe kT
nJJEe kT xJCgA mqJPTr FTKa xmJ keq pJ nJJ xJiJrPer VOyJuL kPeqr YJKyhJ kNrPe
xyJ~fJ TPr nJJxJiJrePT Ee khJj frJKjf TrJr uPq mqJT kiJj TJptJuP~ kOgT FTKa
Tj\MqoJr Kca Lo (KxKxFx) xu Vbj TPrPZ 2007 xJPu mqJPTr IVJKiTJr KZu IjJhJ~L
KxKxFx Ee @hJ~ TrJ luvsKfPf, mqJT xPJw\jT yJPr KxKxFx Ee @hJ~ TrPf xo y~

14. KxKPTPac IgtJ~j


hvL~ mxrTJrL mqJPTr oPiq xJCgA mqJTPT KxKPTvj EPer kKgT muJ pJ~ mqJPTr FTKa
~ xj Ee KxKPTvj ACKja rP~PZ, pJ KxKPTvj EPer xTu TJpto kKrYJujJr KjKoP pgJpg
KvJVf pJVqfJ S TJKrVKr Jjxj h \jmu xojP~ VKbf F kpt mqJT xmtPoJa 42Ka
KxKPTvPj kJ~ 23,300 KoKu~j aJTJr KxKPTvPj IvVye TPr kJ~ 4,800 KoKu~j aJTJr Ee
khJj TPr C KxKPTvPjr oPiq xJCgA mqJT 13Ka kKfJPj xmtPoJa kJ~ 4,500 KoKu~j aJTJr
KxKPTvPj uLc mqJT S FP\Pr nKoTJ kJuj TrPZ pJ uJn\jTnJPm kKrYJKuf yP APfJoPiqA
xJCgA mqJT aKuTo, kJS~Jr kJ, KvJ kKfJj, yJxkJfJu, mnJPr\, KxPo, Lu, KYKj, nJ\q
fu, aaJAux, KKj, KxrJKoT&x, TjsJTvj, FuKk VqJx, yJAPcsJP\j kJr IJAc kJ AfqJKh
Kv UJPf KxKPTPac Ee khJj TPrPZ

15. TPktJPra IgtJ~j


mOyhJPgt TPktJPra IgtJ~j muPf mJ^J~ KmKnj mOy TJJjLxoNy, xrTJr Fm IjqJjq mz
kKfJjxoNPyr hLWt o~JhL S Po~JhL @KgtT kP~J\jL~fJ kNrPe xyJ~fJ TrJ xJCgA mqJPTr
mqmxJ TPktJPra VJyToNUL TPktJPra VJyPTr mqmxJK~T kKrPmv, IgtQjKfT kP~J\jL~fJ Fm kmOKr
50 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

InqrLe TRvPur Ckr KnK TPr KmhqoJj xTt m\J~ rPU fJPhrPT @KgtT xJyJpq khJj TrJ y~
xJoKT IgtjLKfr oRKuT Jj xj mqmJkjJ Tftk TPktJPra VJyTPhr \jq CkpM @KgtT
keqxoNPyr xMkJKrv TPr gJPT mqJT Kj\ IgtJ~j IgmJ KxKPTPca / TJm IgtJ~Pjr oJiqPo
TPktJPra VJyTPhr @KgtT xMKmiJ khJj TPr gJPT mqJPTr TPktJPra KmKjP~JV, hLwt o~JhL kKrTjJ
Fm @gt-xJoJK\T ImJ KmPmYjJ~ KmKnj irPjr mqmxJ~ / KvP UJfS~JrL xMwo mPjr oJiqPo
xMKmjq

16. ATqAKa F FjKasKkKjC~JrKvk lJ (AAFl)


mqJPTr Kj\ CPhqJPV mJuJPhv mqJPTr ATqAKa F FjKasKkKjC~JrKvk lJ (AAFl) Fr xyJ~fJ~
FTKa rJjLoMUL TKor k\jPjr of mqKfoL kT Jkj TrJ yP~PZ F kTPr uq yPuJ TKor
CkJhj S uJuj kJuj TPr Fr YJozJ, oJx Fm yJz KmPhPv rJjL TrJ Fm mJuJPhPv TKor
xrPe xJyJpq S xyPpJKVfJ khJj TrJ APfJoPiq kTKa xlunJPm JKkf yP~PZ Fm @vJ TrJ
yP @VJoL 2010 xJPur oPiq Fr rJjL kK~JS yP~ pJPm pJ hPvr \jq kYr kKroJPe
mPhKvT oMhsJ I\tj TrPf xo yPm

17. KmKjP~JV
mqJPTr KmKjP~JPVr kKroJe 2006 xPjr 6,265.55 KoKu~j aJTJ gPT vfTrJ 35.07 nJV yJPr
mPz @PuJYq 2007 @KgtT mZPr 8,462.86 KoKu~j aJTJ~ CkjLf y~ KmKjP~JV oJiqoPuJPf
ItnN KZu xrTJrL as\JrL Kmu, kJA\ m, kJmKuT KuKoPac TJJjLr v~Jr AfqJKh mqJT xmthJ
C oMjJlJ xjUJPf KmKjP~JV Fm mJuJPhv mqJT TftOT KjitJKrf pMVk KmKim fJruq IjMkJf
(SLR) m\J~ rJUJr Ckr IKiTfr fJPrJk TPr

18. @\tJKfT mJKe\q


xJCgA mqJPTr Ijqfo kiJj TJ\ yPuJ @ohJKj S rJjL mJKeP\q IgtJ~Pjr oJiqPo mKy:mJKeP\q
xyJ~fJ khJj TrJ KmVf kJY mZr iPr mqJT @ohJKj S rJjL mJKeP\q xPJw\jT kmOK m\J~
rPUPZ 2007 xJPu hPvr IgtjLKfPf orVKf kKf~oJj yS~J xPS mqJT @\tJKfT mJKeP\q
IgtJ~Pjr P CPuUPpJVq kmOK I\tj TrPf xo yP~PZ mqJPTr KmvKa IjMPoJKhf KcuJr vJUJ
@ohJjL S rJjL mJKeP\q KjP~JK\f VJyTPhr KmKmi YJKyhJ kNrPer \Pjq h \jmu JrJ xMxKf

@ohJKj mJKe\q
mqJT F mZr oJa 38,470.34 KoKu~j aJTJr (557.50 KoKu~j oJKTtj cuJr) @ohJKj mJKe\q
xJhj TPrPZ pJ 2006 xJPur 35,125.12 KoKu~j aJTJr fujJ~ 9.52% mvL 2007 xJPu
CPuUPpJVq @ohJKj kPjqr oPiq rJjLoNUL kJwJT KvPr oNuijL pkJKf, kMrJfj xJoMKhsT \JyJ\,
nJ\q fu, fuJ S Ku Kva kiJj
mqJPTr KmVf 5 (kJY) mZPrr @ohJKj mJKeP\qr kKroJe Kjok:

mZr @ohJKjr kKroJe @ohJKjr kKroJe mOKr yJr


(KoKu~j cuJr) (KoKu~j aJTJ)
2003 250.32 16,270.80 -
2004 306.51 20,229.62 24.33%
2005 421.44 29,079.30 43.75%
2006 501.79 35,125.12 20.79%
2007 557.50 38,470.34 9.52%
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

rJjL mJKe\q
rJjL mJKe\qPT hPvr IVJKiTJr UJf KmPmYjJTrf mqJT 2003 xJu yPf F UJPf knNf xJluq
I\tj TrPf xo yP~PZ 2007 xJPu mqJT xmtPoJa 28,771.36 KoKu~j aJTJ (423.10 KoKu~j
oJKTtj cuJr) rJjL mJKe\q xJhj TPrPZ pJ 2006 xJPur 25,874.61 KoKu~j aJTJr fujJ~
11.20% mvL mqJPTr rJjL mJKe\q KmVf Kfj mZPr YJre mOK kP~PZ CPuUPpJVq rJjL
keqPuJr oPiq fKr kJvJT, TJYJ kJa, kJa\Jfhsmq, oxq, vJT -xm&K\ S IjqJjq TKw\Jf keq
kiJj
mqJPTr KmVf 5 (kJY) mZPrr rJjL mJKeP\qr kKroJe Kjok:

mZr rJjLr kKroJe rJjLr kKroJe mOKr yJr


(KoKu~j cuJr) (KoKu~j aJTJ)
2003 52.40 3,033.79
2004 112.32 6761.93 122.89%
2005 202.41 13,511.10 99.81%
2006 369.64 25,874.61 91.51%
2007 423.10 28,771.36 11.20%

19. mPhKvT rKoaqJ


KmPhPv Totrf mJuJPhvLPhr TJK\tf Igt IKf hsf fJPhr @L~ \jPhr yJPf kRPZ h~Jr KjKoP
mqJT 2003 xJu yPf TJptTrL S xoKjf mqmJ Vsye TPr @xPZ mqJPTr @ohJKj hJ~ kKrPvJPi
IoMUL mPhKvT IgtkmJy Ifq fkNet nNKoTJ rJUPZ kJvJkJKv mPhKvT oMhsJr \jq IJmqJT
mJ\JPrr Ckr mqJPTr KjntrvLufJ ysJx TPrPZ 2007 xJPu rKoaqJ Fm rJjL @~ FTP G
mZPrr @ohJKj hJ~PT IKfo TPrPZ pJr oPiq 160.04 KoKu~j oJKTtj cuJr IK\tf yP~PZ
mPhKvT rKoaqJ gPT pJ Vf Kfj mZPr mPzPZ j~ e xJCgA mqJT IoMUL rKoaqJ xVPyr
\Pjq kOKgmLmqJkL jaS~JTt VPz fJuJr jLKf Vye TPrPZ mftoJPj ACPrJk, Cr @PoKrTJ,
IPsKu~J S oiqkJPYqr 27 Ka KmUqJf rKoaqJ TJJKj S mqJPTr xJPg rKoaqJ mqmJ KmhqoJj
@PZ fo xoP~ mJuJPhPvr p TJj kJP Igt kRPZ h~Jr \Pjq kP~J\jL~ hfJ @oJPhr
rKoaqJ KmnJPVr TotLPhr rP~PZ @orJ FUJPf nKmwqPf aTxA kmOK kfqJvJ TKr
mqJPTr mZrS~JrL IotNUL mPhKvT rKoaqJPr ImJj KjP hS~J yPuJ:

mZr KoKu~j cuJr KoKu~j aJTJ mOKr yJr


2003 11.00 654.24 -
2004 17.32 1,091.25 66.79%
2005 53.14 3,507.40 221.41%
2006 193.75 13,479.83 284.33%
2007 160.04 11,040.17 -18.10%

20. mPhKvT TPrxkP jaS~JTt


kKfmZrA mqJT KmvmqJkL @\tJKfT @KgtT TsxoNPy kP~J\jL~ TPrxkP xTt mOK TrPZ pJ
mPhKvT mJKeP\q kmOK I\tPj xyJ~T nNKoTJ rJUPZ 31v KcPxr 2007 kpt mqJPTr oJa
TPrxkPPr xUqJ KmPvr 94Ka hPvr 598Ka vLwt mqJT
vKvJuL oNuij KnK Fm mJ\JPr KmhqoJj pPg xMjJPor TJrPe mqJT AJrjqJvjJu lJAjqJ
TPktJPrvj (@AFlKx-KmvmqJPTr xJmKxKc~JrL) Fm FKv~Jj Cj~j mqJPTr xJPg mPhKvT mJKe\q
kKrYJuj S Kca uJAj xMKmiJr \jq KmPvw mqmJ xJhj TrPf xo yP~PZ Fr @SfJ~ xJCgA
mqJT @\tJKfT UqJKfxj mqJTPuJ yPf Kca xMKmiJ nJV TPr gJPT Fm @orJ F UJPf J~L
kmOK @vJ TrKZ
52 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

21. xMAla (SWIFT)


xJCgA mqJT hPvr xMAla oJr VPkr TJptTrL xhxq Fm hPvr Ijqfo kiJj mqJT KyxJPm 24
WJ xMAla& xPpJV YJuM TPrPZ mftoJPj kKfJjKar xTu IjMPoJKhf KcuJr vJUJPuJ xMAla
xPpJPVr @SfJ~ @jJ yP~PZ @oJPhr xMh xMAla Kao @\tJKfTnJPm kmKftf xTu kJVJo
xoKjf TrJr kPYJ YJKuP~ pJP Fm I mqJTKar xMAla Kao mJuJPhPvr xMAla oJr VPk
TJptTrL nNKoTJ kJuj TPr YPuPZ

22. as\JrL TJpto S fyKmu mqmJkjJ


as\JrL TJptPor P @oJPhr mqJT @:mqJT mJ\JPr Ijqfo oMUq nNKoTJ kJuj TPr @xPZ
xMKmPmYjJ kxNf ujPhPjr xJyJPpq mqJPTr oMjJlJ mOK TrJ xm yP~PZ KmvmJ\JPr \JuJjL, keqhsmq
Fm iJfPmr (Metal) oNuqmOK Fm @ohJKj mq~ mOKr lPu 2007 xJPu @:mqJT mPhKvT
oMhsJmJ\Jr mqJkTnJPm knJKmf y~ luvKfPf, xKv mPhKvT oMhsJr KmkrLPf kYr hvL~ oMhsJr
YJKyhJ mOK kJ~ mZPrr IKiTJv xo~ \MPzA mPhKvT oMhsJ mJ\JPr YJKyhJ Fm pJVJPjr CbJjJoJ
kKruKf y~ JjL~ kKrPmPvr kptJ IKnfJr xJPg @\tJKfT oJPjr kgJr @PuJPT @oJPhr
VJyTPhr @orJ CjfoJPjr xmJ khJPj xo yP~KZ (1) hOvqoJj UJPf (Real Sector) Ee kmJy
TPo pJS~J~ mJ\JPr IfqJKiT fJruq (2) krkr hMKa hLWtJK~f mjqJ Fm ku~TJrL WNKjt^z-Kxcr Fr
knJm (3) @:mJ\Jr gPT xrTJPrr Ee Vye Fm (4) xMPhr yJr mJzJPjJr \jq mJ\JPrr k~Jx,
mqJPTr JjL~ oMhsJ mJ\Jr TJptoPT mqJkTnJPm knJKmf TPrPZ
2007 xJPu mJuJPhv mqJPTr mv KTZ khPPkr lPu xrTJrL KxKTCKrKaP\r xPTJrL asKc F
pPg VKf kKruKf y~ j~Ka kJAoJrL KcuJrPhr FTKa KyPxPm @orJ kJAoJrL Fm xPTJrL
mJ\JPr xTu mqJT Fm jj-mqJKT @KgtT kKfJPjr oPiq Ijqfo fkNet nNKoTJ kJuj TPrKZ
as\JrL KmnJPVr Ijqfo oNu uq KZu InqrLe S @\tJKfT mJ\JPrr kmefJr xM KmYJr-KmPvwPer
oJiqPo mqmxJK~T ujPhj mOK, F.Fu.Fo TJpto vKvJuLTre Fm fyKmu mqmJkjJr KmKnj UJf
xOK xh S hJ~ mqmJkjJ Fm ~-Km~ TJptPor oJiqPo as\JrL KmnJV @~ mOKr xJPg xJPg
mJ\Jr Fm fJruq ^KT yJx TPr gJPT F\jq as\JrL KmnJV KmT KmKjP~JPVr of KmKnj KmKjP~JV
kKf Imuj TPr gJPT Fr luk FTKa jJjJoMUL KmKjP~JV kJatlKuS frL yP~PZ Fm kptJ
oqJYKrKa mqmiJPjr (Optimum Maturity Gap) mqmyJPrr oJiqPo CPrJr Arbitrage KmKjP~JPVr
xMPpJV xOK yP~PZ
@oJPhr as\JrL KmnJV mqJPTr oMjJlJ I\tPjr FTKa fkNet Cx 2007 xJPu @orJ mPhKvT
mJKe\q yPf 354.49 KoKu~j aJTJ, @mqJT oMhsJmJ\Jr yPf 930.40 KoKu~j aJTJ Fm xrTJrL
KmKjP~JV k (Secondary Trading) yPf 14.40 KoKu~j aJTJ TJpto kxNf oMjJlJ @~ TPrKZ
FZJzJ, mftoJj mqmxJK~T ujPhPjr kJvJkJKv @orJ xMPhr yJr S oMhJs mJ\JPrr CbJjJoJr xJPg xJoxq
rPU kJatlKuS kMjKmtjqJPx f KhP~KZ as\JrL ACKja Fr TJpto kxNf oMjJlJ yP xMPpJPVr
xKbT mqmJkjJr lu pJ mqJPTr xJoKVT oMjJlJ I\tPj CPuUPpJVq nNKoTJ rJPU

23. mqJKT TJptPo fgq kpMK


xJCgA mqJT KuKoPac @iMKjT kpMKr xojP~ VJyTPhr Cjf mqJKT xmJ khJPjr uq KjP~
1995 xPj pJJ TPr xoP~r @mftPj pJVJPpJV S fgq kpMKr KmTJPvr kJvJkJKv VJyTPhr
IKiTfr Cjf xmJ khJPjr uPq mqJT jfj jfj xmJ Fm mqJKT kPeqr xJr xJK\P~ @xPZ
pJVJPpJV kpMKr CTwtfJPT TJP\ uJKVP~ 2003 xJu gPT p TJj vJUJ yPf mqJKT xmJ khJj
mqJKT xmJUJPf FTKa oJAuluT KyPxPm KmPmKYf xo~ FPxPZ mqJKT keq Fm xmJ~ CTwt
@j~Pjr uPq mqJKT mqmxJ Fm kpMKr xoKjf kP~JPVr
xJKfT khPkxoNy
xKf mqJT xJKjf VJyTPhr \jq oJmJAPu hsmJftJr oJiqPo mqJKT (SMS) xmJ YJuM TPrPZ
VJyTVe JoqoJj ImJ~ hsmJftJ krPer oJiqPo KyxJPmr KKf, xmtPvw 3Ka ujPhj, ujPhj m
TrJr IjMPrJi, fyKmu JjJr Fm ACKaKuKa Kmu khJj TrPf kJrPmj ~K~ mqJKT xmJ S
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

hvmqJkL KmOf jaS~JtT TJptoPT KjrJkh S xMKjKf rJUJr \jq mqJT krLKf S eVf oJjxoO
FqJK nJArJx xla&S~Jr (escan & etrust) APfJoPiqA Jkj TPrPZ TsL~ mqJPTr KjPhtvJmuLr
xoj~ xJiPjr uPq mqJT Kj\ fgq kpMK jLKfoJuJ YJuM TPrPZ cJaJ xJPrr jaS~JTt TJpto
kMjJPrr \jq KmT mqmJ KyPxPm mqJPTr mjJjL vJUJ~ FTKa Kmkpt~TJuLj TJpto kKrYJujJ Ts
(DR Site) Jkj TrJ yP~PZ mJuJPhv mqJPTr Fo@AKx@r (MICR) xJ ~K~ KT~JKr
mqmJ kmftPjr \jq xJCgA mqJT FTKa IfqJmvqT TotxNYL yJPf KjP~PZ

cKma TJct Fm APuTasKjT kPo KxPPor oJiqPo xoV KmvmqJkL uj-hPjr xMKmiJPgt \JfL~ S
IJ\tJKfT xPpJV JkPjr uPq xJCgA mqJT pRg CPhqJPV kKfKf TqJvKuT mJuJPhv-Fr
xJPg IKvhJrLr vftJiLPj ATqAKa kJatjJr KyPxPm IvVye TPrPZ

IfqJiMKjT mqJKT xla&S~Jr


KmTKvf Cj~j, xmJr oJj CjfTre Fm moNUL Kmfre mqmJr (Delivery Channel) xoj~
xJiPjr uPq mftoJj mqJKT xla&S~JPrr Pu FTKa IfqJiMKjT S @\tJKfToJPjr xla&S~Jr YJuM
TrJ IfqJmvqT yP~ kPzPZ F uPq mqJT APfJoPiqA FTKa kT yJPf KjP~PZ pJ 2008 xJPur
oPiq mJmJ~j TrJ xm yPm mPu @vJ TrJ pJ~ mqJT fgq kpMKUJPf 2007 xJPu p xm TotxNYL
yJPf KjP~KZu fJ kpMK S keq xmJ~ IKn uPq kRZJPjJr \jq FTKa xMhNr kxJrL khPk KyPxPm
TJ\ TrPm kpKM PT xJhPr VyPer oJiqPoA IKPfr Knf o\mMf TrJ Fm xMUkJPj FKVP~ YuJ xm
S xy\ yPm

24. oJjm xh-hfJ mOK


aTxA kmOK I\tPjr uPq xJCgA mqJT fJr h \jvKPT xmtJKiT oNuqmJj xh KyxJPm Veq
TPr FTKa oJjmxh Cj~j TRvu Vye TPrPZ mqJPTr mJKeK\qT S IkrJkr xJlPuqr oNPu rP~PZ
Fr xMh oJjm xh mqJT TotLmJKyjL KjP~JPV Ifq IgY TPbJr jLKf IjMxrPer oJiqPo IPjT
kJgtLr oPiq gPT xMPpJVq S YRTw kJgtLPT mJZJA TPr KjP~JV khJj TPr gJPT KjP~JVkJ
TotLmJKyjLPT @iMKjT kKfPf kKve KhP~ xJCgA mqJPTr TPktJPra xKfr CkPpJVL TPr VPz
fJuJ y~ xO\jvLufJ, KjrPkfJ, jqJ~krJ~jfJ, hfJ, @jMVfq S mqJPTr kKf hO| ILTJr yP
xJCgA mqJPTr oJjm xPhr mKvq mqJT kKfPpJKVfJoNuT mfj-nJfJKh S TotLmJKyjLr kvJVf
CjKf xJiPjr oJiqPo h oJjm xh @TTre S xrPjr Ckr KmPvw fJPrJk TPr gJPT
FZJzJS @orJ fJPhrPT pgJxJiq CxJymitT, kvJKkNet Fm IjMPkreJhJ~L TotP CkyJr KhPf
@VyL xJCgA mqJT fJr TotLPhr @TwteL~ mfj-nJfJ, mJjJx, VqJYqAKa, nKmwq fyKmu, xMkJr
FqJjMP~vj lJ Fm IPnJVTf ZMKa jVhJ~jxy KmKnj xMKmiJKh khJj TPr @xPZ luvKfPf TotLPhr
F mqJT fqJPVr kmjfJr yJr Ifq To
mqJT KjP~JV kK~J~ fJeqPT f KhP~ gJPT pJrJ mqJPTr hNPfr nNKoTJ kJuj TPr @PuJYq
mZPr mqJT 51 \j IKn TotTftJ Fm 139 \j jfj TotTftJ KjP~JV TPrPZ FZJzJ, hPvr
jJoijq KmKnj KmvKmhqJuP~r xPmtJ KcVLkJ KmPvw TPr FoKmF/KmKmF/JfPTJr KcVLkJPhr oiq
yPf kKfPpJKVfJoNuT krLJr oJiqPo mqJPT KjP~JPVr kK~J TrJ yP~PZ FfqfLf, hPvr
KmKnj KmvKmhqJuP~r oJa 112 \j KvJgtLPT F mqJPT AJjtvLk TrJr xMPpJV h~J yP~PZ
31v KcPxr 2007 A fJKrPU @oJPhr 1,116 \j TotLmOPr oPiq TotTftJ 964 \j Fm IjqJjq
TotYJrL 152 \j

25. TJpto kxNf luJlu Fm oMjJlJ


2007 xPj mqJT KmfreTf IPvseLTf EPer Ckr xJjxy TEe Fm xPy\jT Ee, @~Tr
AfqJKhr Ckr kP~J\jL~ xJj xrPer kNPmt 2,916.20 KoKu~j aJTJ kKrYJuj kxNf oMjJlJ @~
TPr 2006 xPj mqJPTr kKrYJuj kxNf oMjJlJr kKroJe KZu 2,062.66 KoKu~j aJTJ Fm mqJPTr
kKrYJuj oMjJlJ~ kmOKr yJr 41.38% IK\tf yP~Z @PuJYq mZPr @~TPrr \jq xJPjr kKroJe
hJzJ~ 1,374.07 KoKu~j aJTJ Fm mjPpJVq (appropriation) oMjJlJr kKroJe 443.78 KoKu~j
aJTJ
54 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

26. mJP\a Fm mJP\a Kj~e


O Kjo gPT CkPr kKrTjJ IjMxre (bottom up planning approach) TPr KmKnj vJUJxoNy gPT mJP\Par
mqJT Tftk
UJfxoNPyr (poj @oJjf, IKVo, uJn, mqmxJ AfqJKh) kJgKoT kJmjJ @Jj TPr kiJj TJptJuP~r mqmJkjJ TftOk
vJUJxoNPyr CkJxoNy xoj~ TPr mJxKrT mJP\Par UxzJ frL TPr mqmxJK~T jLKf S mqmJkT xPuPj' @PuJYjJr
oJiqPo mJP\a frL xj TPr mqJPTr kKrYJujJ kwtPhr IjMPoJhPjr kr mJP\a mJmJ~Pjr \jq vJUJxoNPy kre TrJ
y~ mqJT mqmJkjJ TftOk xJrJ mxr mJP\Par KmkrLPf IK\tf uqoJJxoNy KmvhnJPm kptJPuJYjJ TPr, pJPf TPr
mJP\Par uqoJJ IK\tf y~

27. @~ S mqP~r UJfS~JrL KmPvwe


mqJPTr @~ S mqP~r Ckr FTKa xK KmPvwe KjPo h~J yPuJ :
xMh gPT @~ 2007 xJPu xJCgA mqJPTr xMh yPf @P~r kKroJe KZu 6,408.96 KoKu~j aJTJ, pJ 2006 xJPu KZu
5,107.78 KoKu~j aJTJ F P kmOKr yJr 25.47% F kmOKr jkPgq rP~PZ mqJT gPT h~J Ee S IKVo
xMh khJPjr \jq mq~ @PuJYq mZPr xMh UJPf mq~ KZu 4,852.50 KoKu~j aJTJ pJ 2006 xJPu KZu 4,044.63 KoKu~j
aJTJ FPP kmOKr yJr 19.97%
jLa xMh @~ mqJPTr jLa xMh @~ 2007 xJPu hJzJ~ 1,556.46 KoKu~j aJTJ~ pJ Vf mZr KZu 1,063.15 KoKu~j aJTJ
FPP kmOKr yJr 46.40% pJ UMmA xPJw\jT
KmKjP~JV yPf @~ Vf 2007 xJPu xJCgA mqJPTr KmKjP~JV gPT @P~r kKroJe KZu 956.80 KoKu~j aJTJ, pJ 2006
xJPu KZu 439.22 KoKu~j aJTJ F UJPf @PuJYq mZPr @~ 117.84% IgtJ 517.58 KoKu~j aJTJ mOK kJ~ KmKjP~JV
@P~r CkJhJj KZu as\JrL Kmu S mPr Ckr xMh S v~JPrr unqJv
IjqJjq @~ @PuJYq 2007 xPj, TKovj, KmKjo~ Fm hJuJKu gPT @~ yP~PZ 1,159.02 KoKu~j aJTJ, pJ Vf 2006
xJPu KZu 1,084.18 KoKu~j aJTJ FPP kmOKr yJr 6.90% oNuf: mKitf mqmxJ Fm Kl-KnKT TotTJ gPT F @~
FPxPZ
kKrYJuj mq~ 2007 xJPu mqJPTr oJa kKrYJuj mq~ KZu 901.77 KoKu~j aJTJ pJ 2006 xJPu KZu 658.82 KoKu~j
aJTJ FPP mq~ mOK kP~PZ 36.88%

28. Tr kNmt jLa @~


2007 xJPu mqJPTr Tr kNmt jLa @~ KZu 2,597.04 KoKu~j aJTJ pJ kNmtmftL mZr KZu 1,638.32 KoKu~j aJTJ FPP
Tr kNmt jLa IJ~ mOK kP~PZ 58.52%

29. Tr krmfLt jLa @~


2007 xJPu Tr krmftL jLa @~ KZu 1,222.97 KoKu~j aJTJ pJ kNmtmftL mZr KZu 909.88 KoKu~j aJTJ Tr kNmt jLa
IJ~ mOK kP~PZ 34.41%

30. xrKf fyKmu


mqJT TJJjL\ FqJ 1991 Fr 24 iJrJ IjMpJ~L kKnvj krmftL Fm @~Tr S unqJv WJweJr kNPmt oMjJlJr 20% IgJt
519.41 KoKu~j aJTJ xrKf fyKmPu JjJr TrJ yP~PZ CPuUq, mftoJj mZPr JjJrTOf xrKf fyKmuxy 31Pv
KcPxr 2007 fJKrPU oJa xrKf fyKmPur kKroJe hJKzP~PZ 1,544.29 KoKu~j aJTJ~

31. VJyT xmJ


kKfKj~f kKrmftjvLu VJyTYJKyhJ kNre Fm xh @yrPer uPq @oJPhr mqJT xmxo~ VJyTmJm oJPTtKa hOKnLr
Ckr f KhP~ gJPT F\jq @orJ xPmtJo kKfPpJKVfJoNuT oNPuq KmKnj @KgtT keq Fm xmJ khJj TPr gJKT VJyTPhr
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

YJKyhJ xJKmtTnJPm xoJiJj TrJA @oJPhr mJ\Jr TRvPur oNu uq fJA FTKa VKfvLu Fm Cjf VJyT xmJ KjKf TrJr
\jq @orJ xJmtKeTnJPm xmJr oJj oNuqJ~j TPr gJKT KmKnj rTo kPeqr oJiqPo h yJPf VJyTPhr TJKf xmJ khJj
TrJr \jq @orJ xh S hJ~ mJ\Jr\JfTrPer P KrPuvjKvk mqJKT YJuM TPrKZ mqmxJK~T hNrhOK Fm VJyTPhr
Kjfqjfj mqmxJK~T xoJiJPjr \jq @orJ mqmxJ~L xoJP\ mqJkT kvxJ I\tj TPrKZ @iMKjT VSAT kpMK mqmyJr TPr
Real Time On-line any Branch Banking Fr oJiqPo KmvoJPjr xmJ VJyTPhr JrkJP kRPZ KhK

VJyT xmJr kKf xpf hOK h~JA @oJPhr oNu uq @orJ xmxo~ VJyTPhr xoxqJ \JjJr YJ TKr Fm x IjMpJ~L
fJKeT xoJiJj KhP~ gJKT @AKkS-Fr IgtVye, KmPur Igt xVy, Bh knOKf KmPvw CkuP VJyTPhr xmJr YJKyhJ
KmPmYjJ TPr KmPvw TJCJr UJuJr mqmJ TrJ y~ @oJPhr keqxoNy VJyTPhr TJPZ xy\unq TrJ S VJyThr hJrPVJzJ~
xPmJtTO xmJ kRPZ h~Jr KjKoP @orJ kKvKf S VJyTPhr kKf pfvLu kvJ\LmLPhr mqJPT KjP~JK\f TPrKZ
IVJKiTJPrr KnKPf VJyTPhr xmtJT xyPpJKVfJ khJj S CYMoJPjr xmJ khJPjr \jq IKnPpJV xu Vbj TrJ yP~PZ
mMf: VJyTVeA @oJPhr oNu KmPmYq Kmw~ mqJPTr hvtj yP VJyT xK KmiJj TrJ pJPf G x VJyT mqJPTr xMjJo
xOK Fm xMjJo mOKPf hNPfr nNKoTJ~ ImfLjt yj

32. VPmweJ S Cj~j Fm kKve


xJCgA mqJT kKfPpJKVfJoNuT mqJKT \VPf kvJhJrL hfJ I\tPjr \jq VPmweJ S Cj~j Fm kKve Fr Ckr
xmJtKiT f KhP~ gJPT hfJ S kvJhJrLPfr xojP~ oJj-xf oJjm xh frLA mqJPTr oNu uq oJjm xh
Cj~Pjr TRvuVf, oJjmL~ Fm fVf hfJ mOKr uq mJmJ~Pjr \jq 2005 xJPu mqJPTr kiJj TJpJtuP~r 5o fuJ~
Kj\ kKve Ts Jkj TrJ yP~PZ asKj AjKKaCa ToLtPhr JjKnKT oMKYJr @hJj-khJj S JPjr yJujJVJh
Trexy mqJKT \VPfr \Kau TJptPor KmwP~ xKbT KhT-KjPhtvjJ h~
xTu kTJr kKve ke~Pjr oNu uq yP TotL mJKyjLr kvJVf e S TothfJ mOK TPr mftoJj hfJ S kP~J\jL~
hfJr xMxoj~ KmiJj TrJ xJCgA mqJT asKj AjKKaCa TftT 2007 xJPu @P~JK\f xmtPoJa 31Ka kKve TJxt,
xKojJr S TotvJuJ IjMKf y~, FPf kKvekJ TotLr xUqJ KZu 1066 \j
2007 xJPu InqrLe kKvPer TJxtPuJ yPuJ:
kKve TJxt/xKojJr/TotvJuJ TJPxtr xUqJ kKveJgLtr xUqJ
1. mMKj~JKh kKve TJxt 3 77
2. Ee ^KT mqmJkjJ 1 35
3. Kca Kr VKc 2 70
4. xh hJ~ mqmJkjJ 1 38
5. mPhKvT oMhsJ KmKjo~ ^KT (ACKxKk-600) 1 45
6. InqrLe Kj~e S kKrkJuj 1 39
7. oJKj uJKr kKfPrJi 12 441
8. jfMj oNuij TJbJPoJ (mqJPxu-2) 1 45
9. Kca TJct IkJPrvj 1 32
10. Kx@AKm S FPf Ee fgq kKrPmvj kKf 1 29
11. jVh mqmJkjJ~ xPYfjfJ 1 33
12. FxKmFx 1,2,3 1 35
13. xMAla& IkJPrvj 1 34
14. kiJj TJptJu~ \jJPru FTJC xoj~ 1 27
15. mqJT xJ IjqJjq TotvJuJ 3 86
xmtPoJa 31 1,066
FZJzJ, 2005 xJPu mqJPTr kiJj TJpJtuP~r 5o fuJ~ JKkf @AKa kKve TPs oJjm xPhr fgq kpMKVf Jj mOK
Fm fJPhrPT hsf kKrmftjvLu kpMKr xJPg UJk UJS~JPjJr uPq 2007 xPj 6Ka asKj TJxt xj yP~PZ FPf 144
\j kKveJgtL IvVye TPrPZ
56 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

InqrLe kKve ZJzJS, mqJT 2007 xJPu 164 \j TotTfJtPT Phv S KmPhPv KmKnj kKve TJPxt kre TPr 2007
xJPu mqJPTr mJAPr IjMKf kKvPer Kmmre KjPo h~J yPuJ :

kKve TJxt/xKojJr/TotvJuJ TJxtr xUqJ kKveJgLtr xUqJ


1. Km@AKmFo TftOT @P~JK\f KmKnj mqJKT xKTtf 22 39
ksKve/TotvJuJ (poj Ee, QmPhKvT mJKe\q,
\jJPru mqJKT AfqJKh)
2. Km@AKmFo TftOT @P~JK\f mMKj~JKh kKve TJxt 1 32
3. Km@AKmFo mqfLf hPvr IjqJjq PasKj AjKKaCa 51 71
(poj mJuJPhv mqJT asKj FTJPcKo, BAFEDA, SEC AfqJKh)
4. KmPhPv kKve TJxt / xKojJr/TotvJuJ 17 22
oJa 91 164

IKiT, mqJT CPrJr Cj~j S VPmweJr k~Jx ImqJyf rPUPZ Fm APfJoPiq eVf mqmJkjJ kKf (QMS) S iJrJ
kmfte TPrPZ mqJPTr Tot kKrYJujJ~ jkNeq, xMv
O u TotxJhj, kPeqr CJmj Fm @iMKjT S Cjf VJyT xmJ khJPjr
LTKfk xJCgA mqJT DET NORSKE VERITAS, NETHERLAND gPT ISO 9001 : 2000 xjh I\tj TPrPZ
InqrLe Kj~e S kKrYJujVf hfJPT oJjxj TrJr \jq xJCgA mqJT oNu ^KTxoNPyr Ckr oqJjM~Ju rYjJxy
\jJPru mqJKT oqJjM~Ju kmftj TPrPZ

33. mqJPTr ^KT mqmJkjJ


mqJKT \VPf ^KT muPf FTKa TJ\ mJ WajJr luJlu KyxJPm mqJPTr Ckr TJj o knJm mP~ @jJr xJmjJ mJ
IKj~fJPT mJ^J~, pJ mqJPTr @~ mJ oNuiPjr Ckr xrJxKr KfTr knJm lPu, jfmJ mqJPTr CPvq I\tPjr xJogtqPT
xLoJm TPr mqJPTr ^MKT mqmJkjJr Ckr FTKa ksKfPmhj 65 kOJ~ xKjPmKvf yu

34. oJPYt mqJKT TJpto


mJ\JPr jfj KmKjP~JPVr xMPpJV Fm InqrLe S KmPhvL oNuij KmKjP~JV mOKr lPu TqJKkaJu oJPTtPar TJpto xJKfT
xoP~ mOK kP~PZ xJCgA mqJT KuKoPac TqJKkaJu oJPTtPar xTu TJptPo IvVye TrPm @orJ KmvJx TKr p
@oJPhr oJPYt mqJKT TJpto hPvr kNK\ mJ\Jr Cj~Pj pPg nNKoTJ kJuj TrJr kJvJkJKv mqJPTr @~ mOKPf xJyJpq
TrPm TqJKkaJu oJPTta IkJPrvj mqJPTr FTKa mz uJn\jT T&s KyPxPm kKref yPm @oJPhr oNuo yP mJuJPhPvr
kgo vseLr KmKjP~JV CkPhJ S xh mqmJkjJ kKfJj KyPxPm KjP\PhrPT kKfJ TrJr \jq pgJpg mqmJ Vye TrJ
jfj keq, xo~PkJPpJVL xKbT KxJ, xPmtJo xmJ S kJrKrT xTt yPm @oJPhr Cj~Pjr oNu YJKmTJKb
oJPYt mqJKT S kJatPlJKuS mqmJkjJ kKmiJj 1996 Fr IiLPj KxKTCKrKa\ S FPY TKovPjr KjTa PgPT @orJ
oJPYt mqJKT TJpto kKrYJujJ TrJr kP~J\jL~ IjMoKf kfqJvJ TrKZ F KmnJV v~Jr AxMq mqmJkjJ, ImPuUj S
kJatPlJKuS mqmJkjJxy kNetJ oJPYt mqJKT TJpto kKrYJujJ TrJr \jq kf
fJZJzJ, VJyT xmJ~ xPmtJ VJkjL~fJ S xO\jvLufJ m\J~ rPU oJPYt mqJKT xmJr mJAPrS VJyTPhr YJKyhJr KnKPf
@orJ IjqJjq xmJxoNy khJj TPr gJKT poj: (T) TJKc~Ju mqJKT xmJ, (U) AxMq mqJTJr, (V) @A.Kk.S. Fr kiJj
mqJTJr, (W) fJKuTJnM TJJjLPf KmKjP~JV, (X) oNuij VbPj krJovt, oNuiPjr Cx S mj (Y) @A.Kk.S. Fr kxPo
v~JPr KmKjP~JV Fm (Z) IVJKiTJr v~JPr KmKjP~JV

35. AxuJoL mqJKT TJpto


xJCgA mqJT KuKoPac xTu mqJKT xmJ khJPjr FTKa Ijjq kKfJj F mqJT gPT xjJfjL S AxuJoL F Cn~Kmi
mqJKT xmJ TJpto kKrYJKuf y~ 2003 xPj 03 (Kfj)Ka AxuJKoT mqJKT vJUJ UJuJr oJiqPo xjJfjL mqJKT
TJptPor kJvJkJKv AxuJoL mqJKT TJptPor pJJ y~ AxuJKoT mqJKT TJpto xMnJPm kKrYJujJr \jq AxuJKoT
mqJKT vrL~Jy jLKfr KnKPf 2004 xPj mqJT @PrJ 2Ka AxuJKoT mqJKT vJUJ CPJij TPrPZ mftoJPj mqJPTr
AxuJKoT mqJKT vJUJ 5 (kJY) F CjLf yP~PZ
Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

AxuJKoT mqJKT TJpto xNet xMhoM Fm AxuJKoT vrL~Jy oNujLKfr KnKPf kKrYJKuf yP mqJT KmKnj AxuJKoT
vrL~Jy& kKfPf KmKjP~JV TrPZ Fm KmKjP~JV yPf kJ oMjJlJ @oJjfTJrLPhr oPiq @jMkJKfT yJPr oMhJrJmJ oNujLKfr
KnKPf mj TPr gJPT AxuJKoT mqJKT TJpto xjJfj mqJKT TJpto gPT xNet @uJhJ AxuJKoT mqJKT TJpto
xKbTnJPm kKrYJujJr \jq FTKa vrL~Jy& mJct rP~PZ C vrL~Jy& mJct AxuJKoT mqJKT KmwP~ fkNet KxJ Vye
TrPZ hPvr KjomKetf jfJjL~ S xJKjf AxuJoL KYJKmhVe xojP~ mqJPTr vrL~Jy& TJCKu VKbf
1. oJSuJjJ oJ @KojMu AxuJo, Y~JroqJj, vrL~Jy& TJCKu Fm UKfm, uJumJV vJyL \JPo oxK\h Fm xJhT oJKxT
@u mJuJV, dJTJ (19-11-2007 A fJKrPU APTJu TPrj, AjJ KuuJPy ......)
2. kPlxr oJSuJjJ oJ xJuJy& CKj, nJAx Y~JroqJj, vrL~Jy& TJCKu Fm kJj KkKkJu, oJhsJxJ-A-@Ku~J, dJTJ
Fm UKfm VJCxMu @\o oxK\h, mjJjL, dJTJ
3. F,Fx,Fo, lUu @yxJj, xhxq, vrL~Jy& TJCKu Fm kJj ckMKa Vnjtr, mJuJPhv mqJT
mqJT AxuJKoT mqJKT TJpto xKbTnJPm kKrYJujJr \jq h S IKn mqJTJr KjP~JPVr oJiqPo kiJj TJptJuP~ AxuJKoT
mqJKT CA xVKbf TPrPZ mqJT AxuJKoT mqJKT Fr \jq xNet kOgT KyxJm kKf IjMxre TrPZ kxf CPuUq p,
vrL~Jy& TJCKPur fJmiJPj mqJT AxuJKoT mqJKT Fr xTu vJUJr \jq vrL~Jy& @APjr @vsP~ Fm @PuJPT x~,
KmKjP~JV S xmJ kPeqr jLKfoJuJ ke~j TPrPZ Fm TotkKf KjitJre TPrPZ mqJT mJuJPhPvr xTu AxuJKoT mqJPTr
xVbj TsL~ vrL~Jy& TJCKu Fm AxuJKoT mqJTx& TjxJuPaKan lJrJPor xhxq kh Vye TPrPZ mqJT hPv S KmPhPv
TJptrf AxuJoL mqJKT kKfJPjr xJPg xMxTt m\J~ rPU YPuPZ
KcPxr 31, 2007 COk IjMxJPr AxuJoLT mqJKT vJUJxoNPyr oJa @oJjf S KmKjP~JV KZu pgJPo 5,592.69
KoKu~j Fm 2,053.71 KoKu~j aJTJ FPP mJKwtT kmKO r yJr pgJPo 37.55% Fm 45.06 % 2007 xJPu AxuJKoT
mqJKT vJUJxoNPyr oJa @ohJjL S rJjL mJKeP\qr kKroJe KZu pgJPo 781.97 KoKu~j Fm 440.65 KoKu~j aJTJ
Cn~PP kmOKr yJr xPJw\jT 2007 xJPur 31Pv KcPxr kpt AxuJKoT mqJKT vJUJxoNPyr UuJKk EPer kKroJe
KZu oJa KmKjP~JPVr 0.0040% oJ

36. Kca TJct


xJCgA mqJT 2005 A xPjr VJzJr KhPT VISA Kca TJct YJuM TPr kJrKT kKfPpJVL mqJT kJYKa yPuS mftoJPj
F xUqJ FPx hJKzP~PZ 12Pf Fm @rS TP~TKa mqJT F mqmxJ~ ImfLet ymJr kPg mftoJPj kKfPpJKVfJ fLms yS~Jr
lPu Kl Fm YJP\tr Ckr YJk kzPZ pJ oMjJlJr Ckr knJm luPZ 2007 xPj @orJ 54.30 KoKu~j aJTJ kKrYJuj oMjJlJ
I\tj TPrKZ pJr oJKxT Vz hJzJ~ 4.53 KoKu~j aJTJ mZrJP, mqJPTr AxMqTf TJct xUqJ yP~PZ 7450 F mZr @orJ
TJct KmkePj 24.17% Fm oMjJlJ~ 31.16% kmOK I\tj TPrKZ

fLms kKfKfJ xPS @oJPhr YqJPu iMoJ oJPTta v~Jr iPr rJUJA j~ mr fJ mOK TrJS jfj TJct AxMq Fm
TJctPyJflJr KjmtJYPjr P @oJPhr xPYfj kPYJ ImqJyf @PZ kJvJkJKv @orJ TJct Kl Fm Cash Refund Fr
of @TwteL~ xMKmiJxy KmPvw Campaign kKrYJujJ TPrKZ pJ @oJPhr mqmxJ kxJPr Fm mqJPTr nJmoNKft mOKPf xyJ~fJ
TPrPZ TJct mqmxJ~ KnjfJ @jPf KjTa nKmwqPf @orJ KTZ jfj xmJ YJuM TrPf pJK APfJoPiq @orJ SMS Push
Pull Service kYuj TPrKZ pJr oJiqPo Transaction Alertxy TJct FTJCPr fgqJKh VJyPTrJ IKf xyP\ \JjPf
kJrPmj FZJzJS, @orJ vLWsA Card Cheque kYuj TrPf pJK pJ @oJPhrPT mftoJj mJ\JPr @PrJ mvL kKfPpJVL TPr
fuPm

37. vJUJ xsxJre TotxNYL


mftoJPj xJCgA mqJT hPvr KmKnj CPuUqPpJVq mqmxJ TPs oJa 41Ka vJUJr oJiqPo TJpto kKrYJujJ TrPZ Fr oPiq
5Ka AxuJKoT mqJKT vJUJ S 9Ka kuL vJUJ rP~PZ 2007 xJPu mqJT vJUJkKf xPmJt oMjJlJ I\tj TPrPZ VJyTPhr
mJzKf YJKyhJ oaJPf mqJT nKmwqPf jfj jfj vJUJ UJuJr KxJ KjP~PZ pJ mqmxJ-mJKeP\qr xxJrPer P
CPuUqPpJVq ImhJj rJUPf kJrPm 2008 xJPu hPvr IgtQjKfT CjKf Fm mqmxJ mJKe\q S TKwPP nJrxJoqkNet IVVKf
58 Annual Report 2007

kKrYJujJ kwtPhr kKfPmhj

I\tPjr uPq mJuJPhv mqJPTr IjMPoJhjPo mqJT 9Ka jfj vJUJ UJuJr kKrTjJ KjP~PZ vJUJPuJr oJiqPo Cjffr
mqJKT xmJhJj @oJPhr uq

38. mqJPTr Kca rKa


Kca rKa Kmmre hLWt o~JhL o~JhL omq
TJJjLr jJo

vseLoJj F1 Fx Ka-2
KxPu F C Vc
(C KjrJkJ)

Kca rKa F vseLn mJKeK\qT mqJT-PuJPT nJu F vseLn mJKeK\qT mqJTPuJ fJPhr 31 KcPxr
FP\L Im IJKgtT KnK, xMxyf S TJptTr vJUJ mMjj IJKgtT kKfvsKf kNrPer xJoPgtqr P 2008 fJKrPUr
mJuJPhv Fm kgo vseLr Tot kKrPmPvr KmYJPr C Kj~fJr KjPhtvT Fm ^KTr KjrLf IJKgtT
vKvJuL mqJT KyPxPm Vjq TrJ y~ F CkJhJjxoNy poj : fJruq-mqmJkjJ, KmmreLr
oJPjr rKakJ kKfJjPuJ pgJxoP~ IJnqrLe fyKmu xOK Fm IjqJjq Cx KnKPf
IJKgtT ILTJrxoNy kNrPe o\mMf ImJPj
gPT Igt xVPyr P xMKmiJ\jT
gJPT Fm nKmwqPfr p TJj IWaj JrJ
F oJPjr mqJTPuJr KfV yS~Jr ImJPj gJPT
xJmjJ To gJPT
kKfPmhj khJPjr fJKrU : 30v oJYt 2008

39. kMrJr Fm LTKf


kJKfJKjT uq I\tPjr \jq xJCgA mqJT KuKoPac TJptTr kvJxKjT xMvJxPjr Ckr xmtJKiT f KhP~ gJPT mqJT
kKfmZr kptJ mqJUqJxy mJKwtT kKfPmhj kTJv TPr gJPT Fm KyxJmrPer VyePpJVq oJjh IjMxre TPr @KgtT KmmreL
fKr TPr 2006 xJPu xmPYP~ nJu KyxJm kTJvjJr \jq AjKKaCa Im YJatJct FTJCx Im mJuJPhv (@AKxFKm)
@oJPhr mqJTPT LTKf kMrJr khJj TPr mqJPTr Tot kKrYJujJ~ jkNjq, xMvOu TotxJhj, kPeqr CJmj Fm
@iMKjT S Cjf VJyT xmJ khJPjr LTKfk xJCgA mqJT DET NORSKE VERITAS, NETHERLAND gPT ISO
9001 : 2000 xjh I\tj TPrPZ

40. \JfL~ IgtjLKfPf IJoJPhr mqJPTr nKoTJ


IgtjLKf Fm mqJKT Kv xyVJoL S IKmPhq hPvr IgtQjKfT Cj~Pj IJoJPhr mqJT fkNet nKoTJ rPU IJxPZ
31v KcPxr 2007A fJKrPU mqJPT Totrf TotTftJ/TotYJrLr xUqJ hJKzP~PZ 1,116 \Pj kJvJkJKv IJoJPhr mqJPTr
IgtJ~Pj kKfKf kT S Kv TJrUJjJ~ vf vf uJPTr TotxJPjr mqmJ yP~PZ 1995 xJPu mqJPTr kKfJuV gPT
IJorJ hPvr mqmxJ mJKeP\q IgtJ~j TPr IJxKZ hPvr IJohJjL rJjL IgtJ~Pjr FTKa mz Iv IJorJ xj TPr gJKT
mqJPTr vJUJxoNPyr oJiqPo IJoJjf xVy TPr IJorJ hPvr oNuij xOKPf xyJ~fJ TPr IJxKZ VJyT S EeVyLfJPhrPT
IJoJPhr hS~J EexMKmiJr kKroJe 31v KcPxr 2007-F 48,164.60 KoKu~j aJTJ~ kRPZPZ F Ee hPvr KvJ~j S
mqmxJ mJKeP\qr kxJPr ImhJj rPUPZ IJorJ rJsL~ TJwJVJPr TPktJPra aqJ KyPxPm 2007 xPj oJa 1,148.03 KoKu~j
aJTJ \oJ KhP~KZ IJorJ nqJa Fm IJoJjfTJrLPhr KyxJPm IK\tf xMh mJ oMjJlJ gPT Tr xVy TPr rJsL~ TJwJVJPr \oJ
TPr IJxKZ 2007 xJPu IJoJPhr mqJPTr oJiqPo kmJxL mJuJPhvLPhr TJK\tf mPhKvT oMhsJr xokKroJe 11,040.17
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Annual Report 2007

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60 Annual Report 2007

Board's Report

Report on Corporate Governance


The Bank is responsibly managed and supervised in fulfilment of the objective to add value to the
shareholders wealth and contribute to the national economy. Our Corporate Governace principles serve
the goal of strengthening and consolidationg company positon with sustained growth objectives in
materializing the trust placed in the company by the Shareholders, clients, employees and the general
public. A brief report on our corporate governance is given below:

A. Board of Directors
The Board of Directors is the body responsible for corporate governance, devising policies, determining
objectives and for stewardship of Banks resources. The Board of Directors consists of 09 (nine) Directors
including the Managing Director. The Chairman, in his absence, the Vice Chairman, presides over
meetings of the Board of Directors, Annual General Meetings and the Extra-Ordinary General Meetings.
The functional areas of the Board include, but not limited to, approving suitable business policy, fixation
of operational budgets, approval of financial statements, review of Banks 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 companys corporate governance standard for further
improvement, determining Banks corporate social responsibility status and taking steps for its
improvement, developing compliance culture in the Bank, approving proposals as are beyond the
delegated business / financial / administrative powers of the Management, appointment of the Chief
Executive Officer and fixation of his benefits, etc.
The Directors of the Bank excluding the Managing Director retire in rotation in accordance with the
provisions of law. In this respect, the provisions contained in Section 15 KAKA of the Bank Company Act-
1991 as amended from time to time are complied with in letter and spirit. The Board of Directors held 34
(thirty-four) meetings in 2007.
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 power
delegated to it by the Board of Directors. The Committee is composed of 6 (six) members including the
Managing Director. The Chairman of the Board is the Chairman of the Executive Committee. 05 (five)
meetings of the Executive Committee were held in 2007.

ii) Audit Committee


The Audit Committee is primarily responsible for internal control, audit and financial reporting. It monitors
implementation of policies on internal control and compliances and management actions to rectify audit
objections. It actively reviews appropriateness of the accounting policies, internal annual audit plan, audit
reports, risk management of the Bank and Banks technological needs. It also oversees the discharge of
responsibilities of the 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. The Vice Chairman of the Bank is the Chairman of the Audit
Committee. The Audit Committee held 04 (four) meetings in 2007. The minutes of meetings of the Audit
Committee are submitted before the Board of Directors for review.

B. Bank Management
The Bank is manned and managed by a team of efficient professionals headed by Mr. Neaz Ahmed, the
Managing Director who has long 30 years banking experience both at home and abroad. The functions of
the Board and the Management are clearly defined and sharply bifurcated. The Management implements
and acts within the policies and manuals approved by the Board. A clearly defined organizational structure
with definite lines of responsibility and delegation of powers to different echelons 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 policy-guidelines of the Board and the regulatory bodies. However, the Board and the
Annual Report 2007

Board's Report

Management work in unison for the continued well-being of the Bank. To streamline the functions of
different divisions / departments of the Bank, 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 is the
Chairman of MANCOM. The meetings of the MANCOM are held in regular successions to review relevant
issues timely.

ii) Asset Liability Management Committee (ALCO)


Asset Liability Management Committee consists of the Managing Director, the two Deputy Managing
Directors and strategically important Divisional Heads of Head Office. The Managing Director and in his
absence either of the Deputy Managing Directors chairs the meeting of the Asset Liability Management
Committee. The Committee is responsible for managing balance sheet gap, 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 Deputy Managing Director I of the Bank has been constituted at Head
Office of the Bank for minute appraisal and quick disposal of credit proposals. The Chief of Credit Division
of Head Office 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.

C. Renewal of the Contractual Appointment of the Managing Director


The contractual appointment of Mr. Neaz Ahmed, Managing Director of the Bank, has been renewed for
another 3 (three) years with effect from 21.10.2007 with the approval of Bangladesh Bank.

D. Loan to Director
No fresh loan was allowed to any Director of the Bank during the year 2007.

E. Independent External Auditors


M/S Huda Vasi Chowdhury and Co., the Number-1 Audit Firm as per Bangladesh Banks list of the qualified
Chartered Accountants have been appointed as the External Auditors of the Bank in the 12th Annual
General Meeting held on April 22, 2007.

H. Regulatory Authorities
The role of regulatory authorities is very important in respect of corporate governance practices of
Southeast Bank Limited. We are pledge-bound to comply with all the requirements of regulatory
authorities. We highly value their continuous support and prized guidance which are material for
improvement of corporate governance of the Bank.

G. Shareholders
The shareholders of the Bank voice their views in the Annual General Meetings. The constructive
suggestions of the shareholders are implemented in the interest of the Bank. Our Share Division is
shareholders relationship department. Shareholders have right to information which we provide them
timely. Any material change in the Bank concerning shareholders interest or any price sensitive information
is quickly dispensed with for information of the shareholders and potential investors.
A report on corporate governance of the Bank as per directives of the SEC dated February 20, 2006 is
appended hereto.
62 Annual Report 2007

Board's Report

Compliance report as per Securities & Exchange Commissions 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 Title Compliance status Explanation for non-


No. (Put in the compliance with
appropriate column) the condition
Complied Not
Complied
1.1 Boards size. As per Bangladesh Bank
guidelines, maximum number
is restricted to 13 (thirteen)
1.2(i) Independent Director. Under Process
1.2(ii) Appointment of Independent Director. Under Process
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) Banks 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
CFO
Company Secretary
Head of Internal Audit.
2.2 Attendance of Attends as and when required
CFO
Company Secretary
in Board Meetings
3.0 Audit Committee
3.1(i) Constitution of Audit Committee
3.1(ii) Inclusion of independent Director Under Process
on the Audit Committee
3.1(iii) Filling of casual vacancy in the
Audit Committee No such situation
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.
3.3.1(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 Not The Audit Committee had no
to the Board Applicable findings on violation of law
during the year to report
to Board.
3.3.1(ii)(d) Reporting of any other matter to the Not The Audit Committee had no
Board Applicable findings for report to the
Board of Directors.
3.3.2 Reporting to the concerned Not The Audit Committee had no
Authorities. Applicable findings for report to the
Securities and Exchange
Commission.
Annual Report 2007

Board's Report

3.4 Reporting to the Shareholders and


general investors

4.0 External/Statutory Auditors


4.0(i) Non-engagement in appraisal or valuation
4.0(ii) Non-engagement in designing of
Financial Information System
4.0(iii) Non-engagement in Book keeping
4.0(iv) Non-engagement in Broker - Not
dealer service applicable
4.0(v) Non-engagement in actuarial services Not
Applicable
4.0(vi) Non-engagement in internal audit
4.0(vii) Non-engagement in any other services

Attendance of Directors in the meetings

A) Meeting of the Board of Directors


Name of the Directors Total no. Total Remarks
of meetings attendance
from
1.1.2007 to
31.12.2007
Alamgir Kabir, FCA 33 33 The Directors who
could not attend any
meeting were granted
leave of absence
Abdul Hye 33 5
representing Tillaghar Holdings Limited
Sultana Kashem 33 30
representing MK Holdings Limited
Farzana Azim 33 33
representing AD Holdings Limited
Tanveer Harun 33 1
representing Bangla Capital Limited
Rehana Rahman 33 30
Sirat Monira 33 33
Dewan Mustaq Majid 33 5
representing Karnafuli Tea Company Ltd
Neaz Ahmed 33 32

B) Meeting of the Executive Committee of the Board of Directors

Name of the Directors Total no. of Total Remarks


meetings from attendance
1.1.2007 to
31.12.2007
Alamgir Kabir, FCA 5 5 The Directors who could
not attend any meeting
were granted leave of
absence.
Abdul Hye 5 3
representing Tillaghar Holdings Limited
Sultana Kashem 5 5
representing MK Holdings Limited
Farzana Azim 5 5
representing AD Holdings Limited
Tanveer Harun 5 1
representing Bangla Capital Limited
Neaz Ahmed 5 5
64 Annual Report 2007

Board's Report

C) Meeting of the Audit Committee of the Board of Directors

Name of the Directors Total no. of Total Remarks


meetings from attendance
1.1.2007 to
31.12.2007
Abdul Hye 4 3 The Director who could
representing Tillaghar Holdings Limited not attend any meeting
was granted leave of
absence
Sultana Kashem 4 4
representing MK Holdings Limited
Farzana Azim 4 4
representing AD Holdings Limited

D) Pattern of Shareholdings:
i) Shares held by Parent/Subsidiary/Associated Companies and other related Parties
NIL

ii) Ownership of Companys 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 206,376 20,637,600.00 0.90
2. Tillaghar Holdings Limited 101,088 10,108,800.00 0.44
3. AD Holdings Limited 101,088 10,108,800.00 0.44
4. MK Holdings Limited 84,088 8,408,800.00 0.37
5. Bangla Capital Limited 33,696 3,369,600.00 0.15
6. Rehana Rahman 280,391 28,039,100.00 1.23
7. Sirat Monira 13,478 1,347,800.00 0.06
8. Karnafuli Tea Co. Limited 4,043 404,300.00 0.02
9. Neaz Ahmed
Managing Director & Ex-Officio Director NIL NIL NIL
Total Shares : 824,248 82,424,800.00 3.61

iii) Shares held by Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of
Internal Audit and their spouses and minor children as on 31.12.2007.
1 a) Nead Ahmed NIL
Chief Executive Officer
b) Spouse / Minor Children of CEO NIL
2 a) Muhammad Shahjahan 108
Company Secretary
b) Spouse / Minor Children of Company Secretary NIL
3 a) Arun Chandra Paul NIL
Chief Financial Officer
b) Spouse / Minor Children of Chief Financial Officer 2
4 a) Haradhan Banik NIL
Head of Internal Audit
b) Spouse / Minor Children of the Head of Internal Audit NIL

iv) Shares held by top five salaried Executives of the Bank.


Sl. No. Designation Shareholdings as on 31.12.2007
1. M. A. Muhith NIL
Deputy Managing Director-I
2. Syed Imtiaz Hasib NIL
Deputy Managing Director-II
3. Saleh Uddin Ahmed 1,000
Senior Executive Vice President
4. Mohammed Gofran NIL
Senior Executive Vice President
5. Giash Uddin Ahmed NIL
Senior Executive Vice President

v) List of Shareholders holdings 10% and above shares in the Paid-Up-Capital of the Bank.
NIL
Annual Report 2007

Board's Report

Report on Risk Management


Expansion of banking business, deregulations, globalization of financial activities, emergence of new
financial products and increased level of competition have necessitated a need for an effective and
structured Risk Management in the Bank. Risk Management is the core discipline of the Bank and the
Banks goal in Risk Management is to optimize risk-reward trade-off. The Bank efficiently involves in
identification, acceptance, measurement, monitoring, reporting and controlling of risks in the major
domains.
In accordance with Bangladesh Bank Guidance Notes, the Bank has established a risk framework that
consists of six core factors, i.e. (i) Asset Liability/Balance Sheet Risk (ii) Foreign Exchange Risk (iii) Credit
Risk (iv) Internal Control and Compliance Risk (v) Money Laundering Risk and (vi) Information and
Communication Technology Risk.
The Bank has also identified the following four key infrastructure components for effective risk
management programs:

(i) Proactive Board of Directors and Senior Managements Supervision,


(ii) Adequate Policies and Procedures,
(iii) Proper Risk-Measurement, Monitoring and Management Information Systems, and
(iv) Comprehensive Internal Controls.

01. Asset Liability Risk Management


Asset Liability Management (ALM) mainly focuses on liquidity and interest rate risk of the Bank. In 2007,
the Bank managed its assets and liabilities most prudently ensuring optimum liquidity with full compliance
of regulatory requirements. By closely monitoring the interest rate movement of the market, the Bank
achieved a satisfactory net interest margin by taking timely decisions regarding interest rates on deposits
and loans and advances. ALM desk of the Treasury Department prepared monthly Asset Liability
Committee (ALCO) paper highlighting economic outlook and financial fundamentals of the Bank and
arranged ALCO meetings in every month. Decisions taken in the ALCO meetings were duly recorded and
action plans were implemented by the branches/departments to optimize Banks financial performances.
As a result, the Bank registered substantial growth in all the performance indicators including operating
profit in 2007 by minimizing the liquidity and interest rate risk. As a part of regulatory requirement, the
Management also reviewed the ALM manual and its components regularly.

02. Foreign Exchange Risk Management


Foreign Exchange Risk is the potential change in earnings due to unfavorable movement in exchange rates.
Generally, the Bank is less exposed to foreign exchange risk as all the transactions are carried out on behalf
of the customers against L/C commitments and other remittance requirements. The Bank has undertaken
policy guidelines to minimize the foreign exchange risk for exposure in currency movement. The Back
Office of Treasury Department is totally segregated from the Front Office and is responsible for currency
transactions, deal verification and limit monitoring and settlement of transactions separately. The Bank
continuously revalues all foreign exchange positions at market rate as per the guidelines of Bangladesh
Bank. All outstanding entries in Nostro Accounts are reviewed on a regular basis and are timely reconciled.

03. Credit Risk Management


Credit Risk is the probability failure of a Bank borrower or counterparty to meet its obligations in
accordance with agreed terms. The major causes of serious banking problems continue to be directly
related to lack of credit standards for borrowers and counterparties, poor portfolio risk management, or a
lack of attention to changes in economic or other circumstances that can lead to deterioration in the credit
standing of a Bank's counterparties. The goal of credit risk management is to maximise a Bank's risk-
adjusted rate of return by maintaining credit risk exposure within acceptable levels. The effective
management of credit risk is a critical component of a comprehensive approach to risk management and
66 Annual Report 2007

Board's Report

essential to the long-term success of any banking organization. The Basel Committee is encouraging Banks
to promote sound practices for managing credit risk.The sound credit risk management practices focus on
the following aspects:

(i) Establishing an appropriate credit risk monitoring environment


(ii) Operating under a sound credit-granting process
(iii) Maintaining an appropriate credit administration, measurement and monitoring process, and
(iv) Ensuring adequate controls over credit risk

Southeast Bank is keenly aware of the need to identify, measure, monitor and control credit risk as well as
to hold adequate capital against these risks for adequate compensation of risks incurred since exposure to
credit risk continues to be the leading source of problems in Banks world-wide. In this respect, the Bank is
following the system as per Guidelines of Bangladesh Bank. The Bank has also adopted a policy to review
the whole system from time to time to cope with the multifarious situations of credit risk.

The Bank has also taken steps for strengthening the function of Credit Administration i. e. Disbursement,
Custodial Duties, Compliance, Credit Monitoring and Recovery to maintain Credit Risk at the minimum
level. In order to achieve this goal, Credit Administration Department (CAD) is exerting all out efforts for
completion of Security Documentation before disbursement, ensuring adequate Insurance Coverage to
cover unforeseen risks, monitoring and follow up after disbursement of Credit to maintain the risk assets
standard.

Monitoring and Recovery Unit is engaged in vigilant monitoring of the total Credit Classification position
of the Bank, managing all Classified and Special Mention Accounts to regularize for maximization of
recovery and ensuring appropriate loan loss provision timely. By dint of special attention, the Bank could
reduce the percentage of classified portfolio from 3.97% to 3.77% in 2007 through substantial amount of
loan recovery and regularization.

04. Internal Control and Compliance Risk Management


Our Bank has established sophisticated organizational structure to exercise strong control culture within
the organization by implementing policy guidelines of internal controls appropriately and strengthening
internal controls system. Internal Control and Compliance Division (ICCD) of the Bank comprises three
units, namely (i) Compliance Unit, (ii) Monitoring Unit and (iii) Audit and Inspection Unit. The Division
reviews and monitors Banks Internal Control and Compliance Risk to help the Bank perform better through
use of its resources. The units of the Division are performing their functional activities in accordance with
the Banks own policies as well as guidance notes issued by Bangladesh Bank from time to time for
mitigating the Internal Control and Compliance Risks of the Bank.

During the year 2007, Inspection Teams of ICCD of the Bank and Bangladesh Bank carried out inspections
on different Branches of our Bank and submitted Reports thereof. Necessary remedial measures/corrective
steps have been taken on the suggestions/observations made in the said reports. The summary of key points
of the reports were also placed and discussed in the meeting of the Audit Committee of the Board of
Directors. Appropriate actions have also been taken as per the decisions of the said Committee for
protecting the Banks interest.

Compliance: The Bank ensures full compliance of regulatory requirements including, the directives of
Bangladesh Bank (primary regulator), National Board of Revenue, Securities and Exchange Commission,
Registrar of Joint Stock Companies and Firms, Finance Ministry etc. having significant impact on the Banks
business.

Compliance is not a one-time event rather it is a continuous process. For this purpose, the Banks Internal
Controls have been designed in such a manner so that the compliance with all the relevant regulatory
requirements is carried out in each activity of the Bank. The Board of Directors and Senior Management of
Annual Report 2007

Board's Report

the Bank have developed a high ethical and moral standard to ensure strong compliance culture in the
Bank. In this context, the Bank gives priority on the following issues:

i) To encourage employees to comply with all the policies, procedures and regulations,
ii) To maintain continuous liaison with the regulators at all level to obtain regular information on
regulatory changes and
iii) To establish an effective communication process to distribute smoothly the relevant regulations
among the officials of the concerned Divisions and Branches.

05. Money Laundering Risk Management


It is the policy of the Bank to take all necessary steps to comply with the rules for prevention of money
laundering and combating the financing of terrorism. The Bank has recognized a mechanism of mitigating
the Risk of Money Laundering through its Central Compliance Unit (CCU) of Head Office and Branch Anti-
Money Laundering Compliance Officers (BAMLCO). The CCU has been ensuring the proper enforcement
and implementation of Anti-Money Laundering policies, procedures and legislations in the Bank. The
BAMLCOs have been conducting ongoing due-diligence in all business relationships on a risk-sensitive
basis. They also monitor and supervise all the Anti-Money Laundering devices at Branch level.

06. Information and Communication Technology (ICT) Risk Management


The Risk Management exercise mainly includes minimizing financial loss to the institution in all events
such as natural disaster, technological failure, human error etc. In line with Central Bank directives, the
Bank has redrawn its own Information and Communication Technology (ICT) Policies for operations and
services. Under these policy guidelines, a security policy has also been worked out and implemented in
the server system through Active Directory Services (ADS). It has been implemented through Password
Policy, Kerberos Policy, Audit Policy, Group policy, User Rights, Permission policy etc. to abide by and
adhere to what is laid down in the policy. In order to secure network resources from public network, the
Bank has introduced Virtual Private Network (VPN), Access Control List (ACL), IP filtering and TCP/UDP
service blocking through Router and firewall devices. It has already centralized the administrative control
to access the Network, mailing system and access to Internet under this policy. The Bank has already
established Disaster Recovery (DR) site for Communication Network System at Banani Branch which acts
as fallback connectivity when Data Center is down. The Bank has also deployed well tested and very
reliable Anti-Virus Software like eScan and eTrust to protect and secure the core Network and Banking
solution. The Bank has prepared Business Continuity Plan (BCP) which is well documented to re-establish
business critical functions within a predetermined time frame with minimum financial loss to the
institution. Under this BCP, Data Backup at on-site and off-site has already been started and well practiced.
68 Annual Report 2007

Board's Report

Report on Corporate Social Responsibility


Our banking business depends on a network of relationship with our customers, employees, shareholders,
suppliers, business associates, and the community. Our corporate social responsibility is about addressing
the needs of all the parties in a way that both advances the Banks business and makes a positive
contribution to the society.

Customers

The main channel we use to discharge our responsibility to the customers is by way of offering financial
products and services those truly meet their needs. We strive to maintain the highest standard of ethics in
the conduct of our business and feel proud of the trust the customers repose in us. In return, we carry out
our every single transaction with them with the highest degree of commitment and transparency without
any hidden cost. Our customers are our partners in business and we sincerely endeavour to improve our
relationship with them for our mutual benefit.

Employees

In our business which is dynamic and growing, we depend on our skilled and experienced human resource
at every level in the organization. We offer them very competitive pay package and bonus. There are also
provisions for handsome retirement benefits by way of Contributory Provident Fund, Gratuity and
Superannuation benefits. We provide them with a safe and congenial work environment. Resultantly, our
Bank has come out as an employer of choice. Rapid growth of business of the Bank presents opportunities
for talented employees to take added responsibilities. Our employees follow the code of conduct as
embodied in the Service Rules and Regulations of the Bank. The employees of the Bank are aware of their
responsibilities to the society. They donated total Tk.0.423 million out of their salary for flood and cyclone-
hit people of the country in 2007.

Shareholders

We are fully committed to the interest of our shareholders. Their constructive suggestions are implemented
for the betterment of the company. We release enough disclosures for the information of the shareholders
in the Annual Reports, half-yearly financial statements, the print and electronic media and in the Banks
website. We always try to enhance shareholders value by optimizing financial performance at least cost.
We continuously pay good dividends to the shareholders. The number of shareholders of the Bank is
increasing which testifies their unshakable trust in the Bank.

Our Business Associates

We continuously try to create a lasting relationship with our suppliers and business associates for mutual
growth. Our relationship with them is based on mutual trust and respect. We deal with them in a fair and
transparent way.

Environment

We ensure that our operations are environment-friendly and discourage financing projects contrary to it.
We have extended our helping hands to initiatives of community leaders for environment protection and
development. We are one of the leading participants in the beautification of Dhaka City. The road-island
from Russel Square to Manik Miah Avenue was beautified by our Bank.

Regulators

To be a responsible corporate citizen, we comply with the relevant laws, rules and regulations of all
regulatory authorities. Our business practices are transparent and are appreciated by the regulators. We
operate cautiously observing the anti-money laundering practices.
Annual Report 2007

Board's Report

Community

We work to promote good community relations to foster a relationship of understanding, trust and
credibility. We have a long history of support for charitable causes. In 2007, we have spent Tk.22.56
million as donations for education, sports, art, culture, health-cares, community development, relief
operations etc. The major areas of donations are given in the table below:

Sl. Amount in
No. Date To whom given million
01 13.05.2007 Society for Assistance to Hearing Impaired Children Tk.1.20
02 07.08.2007 Chief Advisors Relief Fund for flood victims through Islamic
Banks Consultative Forum Tk.1.00
03 13.08.2007 Chief Advisors Relief Fund for countrys flood victims Tk.5.00
04 29.11.2007 Bangladesh Army Relief Fund for cyclone-SIDR victims Tk.5.00
05 03.12.2007 Chief Advisors Relief Fund for cyclone-SIDR affected people Tk.5.00

The Bank has also established Southeast Bank Foundation to participate in social work in a more organized
way. In 2007, the Foundation donated Tk. 6.33 million for the distressed humanity. It may be cited that
the Foundation has donated Tk.2.5 million to the Government of Bangladesh (GOB) for relief operations
amongst the hillslide victims of Chittagong. It also donated Tk.0.5 million amongst the tornado affected
people of Chhagalnaiya, Feni. To encourage female professionals in the field of accountancy of the
country, the Foundation has decided to award 02 (two) scholarships for 02 (two) deserving female articled
students of the Institute of Chartered Accountants of Bangladesh (ICAB) on a recurring basis to pursue
Chartered Accountancy Course. Each scholarship holder will be paid Tk.3,000.00 per month for 03 (three)
years and Tk.10,000.00 for books and other related expenditures.
70 Annual Report 2007

Report of the Audit Committee

In 2007, the Audit Committee of the Board of Directors of the Bank played an effective role in
strengthening Internal Control and Compliance functions of the Bank. After threadbare discussions on the
related issues, the Committee also provided the following instructions / guidelines:

a) Advised that suits filed / to be filed against the defaulting borrowers be regularly monitored and
pursued through the Banks Lawyers for their early disposal in favour of the Bank.

b) Advised that efforts be geared up for recovery of overdue loans under Consumer Credit Scheme
(CCS).

c) Advised that the incomplete documentation formalities in certain loan accounts of branches be
completed at the earliest to safeguard Banks interest.

d) Advised the Management to ensure that the loan accounts as were showing signs of weakness are
regularly monitored for timely repayments.

e) Reviewed the Internal Inspection Reports conducted by Internal Control and Compliance Team of
the Bank on different branches during the year 2007 and instructed the Management to take all out
efforts for immediate rectification of the lapses and irregularities mentioned in the reports.

f) Reviewed the corrective measures taken by the Management against lapses and irregularities
detected by Banks internal auditors and primary regulators.

g) Minutely examined sticky loan accounts for adjustment of Banks overdues.

h) Advised the Management to vigorously and regularly monitor each of the classified loan account to
bring down the amount of classified loans substantially by recovery

i) Advised the Management to fully implement all the Core Risk Management Guidelines of the Bank.

j) As per suggestions of Bangladesh Bank, the Committee reviewed the Internal Control System of the
Bank and advised the Management to implement the guidelines / notes of Bangladesh Bank to
further improve the level of Internal Control and Compliance culture in the Bank.

k) Advised the Management to take proper steps for recovery of Banks overdues from the defaulting
Credit Card holders of the Bank.

Abdul Hye
Chairman
Audit Committee
Annual Report 2007

Report of the Banks Shariah Council

Bismillahir Rahmanir Rahim

Praise be to the Almighty Allah, and prayer and peace be on the noblest of messengers, our holy Prophet
Mohammad (SM), his kindred and companions.

In the year 2007, Southeast Bank Limited catered its Islamic Banking Operations through 05 (five)
designated Islamic banking branches at the following locations:
01 Chhagalnaiya Branch : Mir Shopping Complex, Chhagalnaiya, Feni
02 Coxs Bazar Branch : Asha Shopping Complex, 430-431 Bazar Ghata, Coxs Bazar
03 Bandar Bazar Branch : Karimullah Market, Bandar Bazar, Sylhet.
04 Motijheel Branch : 125, Motijheel C/A, Dhaka.
05 CDA Avenue Branch : Ali Villa, 1640/1861 (new), CDA Avenue
Asian Highway, East Nasirabad, Chittagong.

We report the following to the Shareholders:


i) During the Year 2007, Shariah Council of Southeast Bank Limited held 4 (four) formal meetings.
ii) The Shariah Council stressed upon frequent inspection of the islamic banking branches. The
Management of the Bank confirmed that all the Islamic banking branches were inspected in 2007
and Islamic banking branches strictly complied with the Shariah Principles.
iii) The accounts of Islamic banking operations of Southeast Bank Limited were being kept separately
from conventional banking accounts.
iv) The Council gave considered decision and guidelines on issues of Islamic banking operations
referred by the Management of the Bank and reviewed the operational issues in respect of Islamic
banking of the Bank.
v) During the year, the Islamic banking branches were inspected by the Muraquibs and no deviation
of any Shariah law was reported to the Council.
vi) The Shariah Council gave clearance to the Bank Management for investment of surplus fund of
Banks Islamic banking branches in the Bangladesh Government Islamic Investment Bond.
vii) The Council advised the Bank Management to publish brochures on Banks Islamic banking
products to inform the public and to take steps for wider advertisement of Islamic banking
products of the Bank.
viii) The Council opined that Garments Industries and Buying Houses established by pious Muslims be
brought within the Islamic banking fold of the Bank to increase investment in the sector.
ix) The Shariah Council was satisfied that Southeast Bank Limited was blessed with a sufficient
number of qualified officers to carry out Islamic banking operations smoothly.

We pray to Almighty Allah to give us enough strength and fortitude to implement Shariah Principles in
every sphere of our life. We evoke His unbound blessings. Ameen.

Prof. Moulana Mohammad Salah-Uddin


Vice Chaiman
Shariah Council
72 Annual Report 2007

Value Added Statement for the year ended 31 December, 2007

The value added statement for the Bank shows how the value is created and distributed among different
stakeholders of the Bank. Value added to the Bank stood at BDT 2,776.53 million as of December 31, 2007 as
against BDT 1,948.55 million in 2006 registering a growth of 42%.
Taka in 'million'
Particulars 2007 % 2006 %
Taka Taka
Income from Banking Services:
Interest and similar income on loan portfolios 6,408.96 5,107.78
Investment income 956.80 439.22
Commission, Exchange and Brokerage 1,159.02 1,084.17
Other Operating Income 145.69 134.94
8,670.47 6,766.11
Less: Cost of Services & Supplies
Interest paid on Deposits & Borrowings 4,852.50 4,044.63
Rent, Taxes, Insurance, Lighting etc. 108.66 81.64
Legal expenses 0.35 0.15
Postage, Stamp, Telegram & Telephone 54.93 51.37
Stationery, Printing, Advertisement 39.26 30.36
Directors' Fees and Expenses 1.59 1.17
Audit Fee 0.40 0.35
Repairs to Bank's property 23.13 14.24
Other expenses 223.96 169.31
5,304.78 4,393.22
Value Added by the Banking Services 3,365.69 2,372.89
Add: Non-banking income
Less: Loan Loss and Provisions
Specific provision on loan loss (140.00) (311.00)
Transfer to general provisions (80.00) (104.00)
Transfer to general reserve (220.00)
Provision for Off-Balance Sheet Exposures (107.10)
Provision for diminution in value of Investment 12.94 (6.34)
Provision for Other Assets (5.00) (3.00)
Transfer to SEBL Foundation (50.00)
(589.16) (424.34)
Value Added 2,776.53 1,948.55

Distribution of Value Addition


Employees-as Salaries and Allowances 379.96 14% 253.11 13%
Provider of Capital - as dividend 342.26 12% 591.57 30%
Government - as income tax 1,374.07 49% 728.44 37%
Expansion & Growth:
Statutory Reserve 519.41 19% 327.66 17%
Retained Earnings 91.30 3% (9.35) 0%
Depreciation 69.53 3% 57.12 3%
2,776.53 100% 1,948.55 100%
Annual Report 2007

Economic Value Added Statement for the year ended 31st December, 2007

Economic Value Added (EVA) indicates the true economic profit of a company. EVA is an estimate of
the amount by which earrings exceed or fall short of required minimum return for shareholders at
comparable risks. EVA of the bank stood at Tk.800.86 million as of December 31, 2007 as against
Tk.770.96 million in 2006.

Taka in 'million'
Economic Value Added
2007 2006
Particulars Taka Taka
Total Revenue 8,670.47 6,766.11
Less : Expenses (Interest & Operating) (5,754.27) (4,703.45)
Less : Corporate Tax (1,374.07) (728.44)
Less : Capital Changes (741.27) (563.26)
Economic Value Added 800.86 770.96

Capital Changes = Required Rate of Return X Total Capital & Reserves


Required Rate of Return (11.46%) = Return on 364-days Treasury Bills @8.46%+Risk Premium
@3% in 2007 (Return on 364-days Treasury Bills
@8.40%+Risk Premium @3% in 2006)
Total Capital & Reserves = Tk.6,468.36 million in 2007 (Tk.4,940.92 million in 2006)
Economic Value Added = Total Revenue - (Expenses + Corporate Tax +
Capital Changes)
74 Annual Report 2007

Market Value Added Statement for the year ended 31st December, 2007

Market Value Added (MVA) is the difference between the equity market value of a company and the
book value of equity invested in the company. A high MVA indicates that the company has created
substantial wealth for the shareholders. MVA is equivalent to the present value of all future expected
Economic Value Added (EVA). The equity market value of the Bank stood at Tk.13,080.18 million
whereas the book value of equity stood at Tk.6,468.36 million, resulting a Market Value Added of
Tk.6,611.82 million as of December 31, 2007 as against Tk.2,377.82 million in 2006.

Taka in 'million'
Market Value Added
2007 2006
Particulars Taka Taka

Market Value of Total Equity 13,080.18 7,318.74

Less: Book Value of Total Equity (6,468.36) (4,940.92)

Market Value Added 6,611.82 2,377.82

Total Number of Shares outstanding = 22,817,583 22,817,583


Market Value per Share = 573.25 320.75
Market Value of Total Equity = [Total Number of shares outstanding X Market value
per share as on 30.12.007]
Market Value Added = [Market Value of Total Equity] -
[Book Value of Total Equity]
Annual Report 2007 Annual Report 2007 75

Auditors' report to the shareholders of Southeast Bank Limited

We have audited the accompanying balance sheet of Southeast Bank Limited as of 31 December 2007 and the
related profit and loss account, cash flow statement, statement of changes in equity, liquidity statement and a
summary of significant accounting policies and explanatory notes for the year then ended. These financial
statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BASs), give
a true and fair view of the state of the bank's affairs as of 31 December 2007 and of the results of its operations and
its cash flows for the year then ended and comply with the applicable sections of the Bank Companies Act 1991,
the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and Exchange
Rules 1987 and other applicable laws and regulations.

We also report that:


(i) we have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit and made due verification thereof;
(ii) in our opinion, proper books of account as required by law have been kept by Southeast Bank Limited so
far as it appeared from our examination of those books and proper returns adequate for the purpose of our
audit have been received from branches not visited by us;
(iii) the Southeast Bank Limiteds Balance Sheet and Profit and Loss Account together with the annexed notes 1
to 44 dealt with by the report are in agreement with the books of account and returns;
(iv) the expenditure incurred was for the purpose of the Southeast Bank Limiteds business;
(v) the financial position of Southeast Bank Limited as on 31 December 2007 and the profit for the year then
ended have been properly reflected in the financial statements and the financial statements have been
prepared in accordance with the generally accepted accounting principles;
(vi) the financial statements have been drawn up in conformity with the Bank Companies Act, 1991 and in
accordance with the accounting rules and regulations issued by the Bangladesh Bank;
(vii) the financial statements conform to the prescribed standards set in the accounting regulations issued by the
Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;
(viii) the records and statements submitted by the branches have been properly maintained and consolidated in
the financial statements;
(ix) the information and explanations required by us have been received and found satisfactory;
(x) 80% of the risk- weighted assets have been reviewed by us.

Dhaka, 15 March 2008 Chartered Accountants


76 Annual Report 2007 Annual Report 2007 77

Balance Sheet as at 31 December 2007 Balance Sheet as at 31 December 2007

Notes 2007 2006 Notes 2007 2006


PROPERTY AND ASSETS Taka Taka Taka Taka
Capital/Shareholders' Equity:
Cash: 3
Paid up Capital 13 2,281,758,300 2,112,739,200
In hand (Including Foreign Currencies) 440,911,732 303,290,326 Share Premium 1,056,369,600 1,056,369,600
Balance with Bangladesh Bank & its agent Bank(s) Statutory Reserve 14 1,544,287,000 1,024,878,000
General Reserve 15 247,650,000 27,650,000
(Including Foreign Currencies) 2,966,460,168 2,480,125,217
Others Reserve 16 570,619,810 235,866,506
3,407,371,900 2,783,415,543 Surplus in profit and loss account/Retained Earnings 17 443,784,391 601,791,332
Balances with Other Banks and Financial Institutions: 4 Total Shareholders' Equity 6,144,469,101 5,059,294,638
In Bangladesh 1,258,788,896 316,822,677 Total Liabilities and Shareholders' Equity 64,370,690,040 53,706,124,795
Outside Bangladesh 288,199,279 (437,977,468)

1,546,988,175 (121,154,791) OFF-BALANCE SHEET ITEMS


Money at Call on Short Notice 5 310,000,000 830,000,000
Contingent liabilities 18
Investments: 6
Government 7,563,544,454 5,878,916,623
Acceptances and endorsements 18.1 7,377,208,948 9,496,157,924
Others 899,318,546 386,633,337 Letters of Guarantee 18.2 5,335,371,383 4,985,768,328
Irrevocable Letters of Credit 18.3 7,415,596,834 6,942,189,752
8,462,863,000 6,265,549,960
Bills for Collection 18.4 1,282,374,580 2,088,231,311
Loans and Advances: 7
21,410,551,744 23,512,347,315
Loans, Cash Credit & Overdrafts etc. 7.A 45,531,630,718 37,142,698,864
Bills purchased and discounted 7.B 2,632,973,432 4,004,583,136 Other Contingent Liabilities
Value of travellers' cheques on hand 8,505,835 23,535,315
48,164,604,150 41,147,282,000
Value of Bangladesh Sanchay Patra on hand 251,551,000 276,411,000
Fixed Assets including premises, furniture and fixtures 8 1,708,110,172 1,300,385,135
260,056,835 299,946,315
Other Assets 9 770,752,643 1,500,646,948
Non-banking assets Other Commitments
Documentary Credits and short term trade-related transactions
Total Assets 64,370,690,040 53,706,124,795 Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving facilities
LIABILITIES AND CAPITAL Undrawn formal standby facilities Credit lines and
other commitments
Claims against the Bank not acknowledged as debt
Liabilities:
Borrowings from other banks, financial institutions Total Off-Balance Sheet items including contingent liabilities 21,670,608,579 23,812,293,630
and agents 10 6,509,000 314,442,000
Deposits and Other Accounts: 11 The annexed notes 1 to 44 form an integral part of these financial statements.
Current/Al-wadeeah current accounts and other accounts 3,939,794,945 3,588,572,367
Bills Payable 688,281,765 598,513,410
Savings Bank/Mudaraba savings deposits 3,433,491,229 3,270,876,497 Managing Director Director Director Chairman
Fixed deposits/Mudaraba fixed deposits 47,412,480,169 38,598,220,966
See annexed auditors' report to the shareholders of date
55,474,048,109 46,056,183,240
Other Liabilities 12 2,745,663,830 2,276,204,917

Total Liabilities 58,226,220,939 48,646,830,157 Dhaka, 15 March 2008 Chartered Accountants


78 Annual Report 2007 Annual Report 2007 79

Profit and Loss Account for the year ended 31 December 2007 Profit and Loss Account for the year ended 31 December 2007

Notes 2007 2006 Notes 2007 2006


Taka Taka Taka Taka
Operating Income Appropriations:

Interest and Discount Income 20 6,408,962,289 5,107,779,714 Statutory Reserve 14 519,409,000 327,663,000

Interest paid on Deposits & Borrowings 21 (4,852,499,177) (4,044,631,543) General Reserve 15 220,000,000
Transfer to SEBL Foundation 50,000,000
Net Interest Income 1,556,463,112 1,063,148,171
789,409,000 327,663,000

Income from Investment 22 956,800,823 439,218,094 Retained surplus 443,784,391 601,791,331

Commission, Exchange & Brokerage 23 1,159,020,766 1,084,176,714 Earnings per share (EPS) 38 53.60 59.71
Other Operating Income 24 145,688,988 134,938,982

Total Operating Income (A) 3,817,973,689 2,721,481,961

The annexed notes 1 to 44 form an integral part of these financial statements.


Salary and Allowances 25 375,550,966 249,316,572
Rent, Taxes, Insurance, Lighting etc. 26 108,666,718 81,643,918
Legal expenses 349,466 153,550
Managing Director Director Director Chairman
Postage, Stamp, Telegram & Telephone 27 54,934,940 51,369,709
See annexed auditors' report to the shareholders of date
Stationery, Printing, Advertisement 28 39,260,461 30,358,555
Managing Director's remuneration 29 4,409,032 3,792,903
Directors' Fees and Expenses 30 1,584,817 1,171,029 Dhaka, 15 March 2008 Chartered Accountants
Audit Fee 400,000 350,000
Depreciation on and repairs to Bank's property 31 92,661,260 71,356,310
Other expenses 32 223,957,265 169,311,731

Total Operating Expenses (B) 901,774,926 658,824,277

Profit/(Loss) before Provision (C=A-B) 2,916,198,763 2,062,657,683

Provision for Loans and Advances 12.1 & 12.2 220,000,000 415,000,000
Provision for Off-Balance Sheet Exposures 12.3 107,100,000
Provision for diminution in value of investment 33 (12,942,823) 6,341,000
Other Provisions 12.9 5,000,000 3,000,000

Total Provision (D) 319,157,177 424,341,000

Profit/(Loss) before Taxes (E=C-D) 2,597,041,586 1,638,316,683


Provision for Taxation (F) 12.7 1,374,072,549 728,435,900

Net Profit after Taxation (E-F) 1,222,969,037 909,880,783


Retained earnings brought forward from previous year 10,224,354 19,573,548

1,233,193,391 929,454,331
80 Annual Report 2007 Annual Report 2007 81

Statement of Cash Flow for the year ended 31 December 2007 Statement of Changes in Equity for the year ended 31 December 2007

Notes 2007 2006


Taka Taka



5,059,294,638

5,059,294,638

334,753,304

1,222,969,036

(422,547,876)

(50,000,000)
6,144,469,101

5,059,294,638
A. Cash flows from operating activities

(Taka)
Total
Interest receipts in cash 7,034,562,767 5,448,375,936
Interest payment (4,729,870,605) (3,778,180,500)
Dividend receipts 2,080,927 18,115,028
Fees and commission receipts in cash 1,159,020,766 1,084,176,714


601,791,332

601,791,332

1,222,969,036

443,784,391

601,791,332
(169,019,100)
(422,547,876)

(739,409,000)
(50,000,000)
Recoveries on Loans previously written-off 573,999 258,069

Retained
earnings
(Taka)
Cash payments to employees (379,959,998) (314,939,476)
Cash payments to suppliers (64,715,335) (41,292,573)
Income taxes paid (1,148,033,342) (676,326,385)
Receipts from other operating activities 34 143,226,731 134,680,913






27,650,000 235,866,506

27,650,000 235,866,506

334,753,304

247,650,000 570,619,810

27,650,000 235,866,506
Payments for other operating activities 35 (408,981,604) (319,959,780)

reserve
Other

(Taka)
Operating profit before changes in operating assets and liabilities (i) 1,607,904,306 1,554,907,946

Increase / (Decrease) in operating assets and liabilities


220,000,000
Sale of trading securities 1,186,307,510 166,245,517

General
Reserve
(Taka)
Purchase of trading securities (1,429,251,163) (139,374,219)
Loans & advances to other banks
Loans & advances to customers (7,017,322,150) (8,596,192,208)
Other Assets 36 784,568,217 (965,975,572)

share dividend
(Taka)
Deposits from other banks (307,933,000) 244,329,500

Cash


Deposits from customers 9,295,236,296 7,531,579,509

Proposed
Trading Liabilities

Bonus

(Taka)
Other Liabilities 37 (110,643,710) (89,216,476)


Cash received from operating assets and liabilities (ii) 2,400,962,000 (1,848,603,949)








1,056,369,600

1,056,369,600

1,056,369,600

1,056,369,600
premium
Net cash inflow/(outflow) from operating activities (A=i+ii) 4,008,866,306 (293,696,003)

(Taka)
Share
B. Cash flows from investing activities
Proceeds from sale of securities 1,776,133,118 286,977,000
Payments for purchase of securities (2,287,576,200) (1,261,628,590)


2,112,739,200 1,024,878,000

2,112,739,200 1,024,878,000

519,409,000

2,281,758,300 1,544,287,000

2,112,739,200 1,024,878,000
Purchase of fixed assets (143,358,253) (567,518,335)

Statutory
reserve
(Taka)
Sale of fixed assets 2,744,851 167,616
Payment against lease obligation (28,036,583) (34,127,316)
Net cash inflow/(outflow) from investing activities (B) (680,093,067) (1,576,129,625)
C. Cash flows from financing activities :





169,019,100
Dividend paid (422,547,876)

Paid-up
Capital
(Taka)
Receipts from issue of right shares 2,112,739,200
Net cash inflow/(outflow) from financing activities (C) (422,547,876) 2,112,739,200

D. Net increase / decrease in cash & cash equivalent (A+B+C) 2,906,225,363 242,913,572
E. Cash and cash equivalents at beginning period 6,874,404,008 6,631,490,436

Appropriation made during the year


Net gain and losses not recognized
F. Cash and cash equivalents at end of period (D+E) 9,780,629,371 6,874,404,008

Currency translation differences

Balance at 31 December 2007

Balance at 31 December 2006


Changes in accounting policy

Surplus/deficit on account of

Surplus/deficit on account of

Transfer to SEBL Foundation


Cash and cash equivalents at end of the year

Balance at 1 January 2007

revaluation of investments
revaluation of properties

Dividends (Bonus share)


in the income statement
Net profit for the period
Cash in hand and balance with Bangladesh Bank 3,407,371,900 2,783,415,542

Issue of share capital


Balance with other banks 1,546,988,175 (121,154,790)

Restated balance

Dividends (Cash)
Money at call and short notice 310,000,000 830,000,000
Treasury bills 4,511,925,696 3,378,498,456 Particulars
Prize bond 4,343,600 3,644,800
9,780,629,371 6,874,404,008
82 Annual Report 2007 Annual Report 2007 83

Liquidity Statement (Assets and Liability Maturity Analysis) as at 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

1. The Bank and its activities


Total


3,407,371,900
1,546,988,175
310,000,000
8,462,863,000

6,509,000
48,164,604,150

1,708,110,172
770,752,643

64,370,690,040

55,474,048,109

2,745,663,830
58,226,220,939
6,144,469,101
Southeast Bank Limited 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 bank has 38 branches, with no overseas branch as on 31 December 2007. Out of the above 38
branches, 5 branches are designated Islamic branch complying with the rules of Islamic Shariah the modus




More than
5 years

1,844,423,403
6,545,186,000

1,366,616,713
51,212,100

9,807,438,217

1,697,998,000

1,697,998,000
8,109,440,217
operandi of which is substantially different from other branches run on commercial conventional basis.
Southeast Bank Limited 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.



1-5 years

1,017,991,755
11,400,045,000

341,493,459

5,071,500
12,759,530,214

6,820,235,000

52,816,957
6,878,123,457
5,881,406,757
2. Summary of significant accounting policies and basis of preparation of the financial statements

2.1 Conventional banking

Balance with other banks and financial institutions, Money at call on short notice are on the basis of their maturity.

Borrowings from Bangladesh Bank, other banks, financial institutions and agents are on the basis of their payment.
The financial statements of the bank are made upto 31 December each year and are prepared under the
historical cost convention and in accordance with the First Schedule (Sec. 38) of the Bank Companies Act


3-12 months

600,000,000

1,397,106,945
14,940,424,000

309,736,959

17,247,267,904

25,432,722,000

34,747,943
25,467,469,943
(8,220,202,039)
1991, BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank circulars, Bangladesh Accounting

Fixed assets including premises land & buildings, furniture & fixtures are on the basis of their useful life.
Standards(BAS) 30,the Companies Act. 1994, the Securities & Exchange Rules 1987 and other laws &
regulations applicable in Bangladesh.

2.2 Islamic banking


The bank operates Islamic banking in five branches designated for the purpose in complying with the rules



1- 3 months

639,794,090

3,468,097,297
6,360,648,000

42,945,782

10,511,485,169

12,051,277,000

12,051,277,000
(1,539,791,831)

of Islamic Shariah. The financial statements of the branches have also been prepared as per Bank Companies
Act 1991, Bangladesh Accounting Standards. A separate balance sheet and profit and loss account are shown
Deposits and other accounts are on the basis of their maturity and payment.
The following assumptions have been applied in preparing the maturity analysis:

in Annexure - A and the figures under different heads appearing in the annexure have been converted into
relevant heads of counts under conventional banking for consolidation and incorporate
vii) Provision and other liabilities are on the basis of their adjustment.

2.3 Functional and presentation currency



Up to 1 Month

3,407,371,900
307,194,084
310,000,000
735,243,600
8,918,301,150

366,857,802

1,437,500
14,044,968,536

9,471,816,109

2,658,098,930
12,131,352,539
1,913,615,997

These financial statements are presented in Taka, which is the Bank's functional currency. Except as
indicated figures have been rounded to the nearest Taka.
Loans and advances are on the basis of their maturity.

2.4 Basis of consolidation


Other assets are on the basis of their adjustment.
Investments are on the basis of their maturity.

A separate set of records for consolidating the statement of affairs and income and expenditure statements
Fixed Assets including premises land & building,
Balance with other banks & financial institutions

Borrowings from Bangladesh Bank, other banks,

of the branches were maintained at the Head Office of the Bank in Dhaka based on which these financial
statements have been prepared.

2.5 Approval of financial statements


The financial statements were approved by the Board of Directors in its 284th meeting held on 12 March 2008.
financial institutions and agents
Money at call on short notice

Provision & other liabilities

2.6 Use of estimates and judgments


Net Liquidity Gap (A-B)

The preparation of financial statements requires management to make judgments, estimates and assumptions
Loans and Advances

Non-Banking Assets

Total Liabilities (B)


furniture & fixtures

that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
Other Accounts
Total Assets (A)
Cash in Hand

expenses. Actual results may differ from these estimates.


Other Assets
Investments
Particulars

Liabilities

Deposits

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
Assets

are recognized in the period in which the estimate is revised and in any future periods affected.
iii)
iv)

vi)
ii)

v)
v)
i)
84 Annual Report 2007 Annual Report 2007 85

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2.7 Foreign currency conversion Loans and advances are written off to the extent that (i) there is no realistic prospect of recovery, (ii) and
against which legal cases are filed and classified as bad loss for more than five years as per guidelines of
Transactions in foreign currencies are translated into Bangladeshi Taka and recorded at the ruling exchange
Bangladesh Bank. These write off however will not undermine/affect the claim amount against the borrower.
rates applicable on the date of transaction.
Detailed memorandum records for all such write off accounts are maintained and followed up.
i) Assets and liabilities denominated in foreign currency are translated into Taka at the weighted average
2.9.3 Investments
rates at the balance sheet date.
Value of investment has been enumerated as follows:
ii) Transactions in foreign currencies are converted into Taka currency at the rate of exchange prevailing
on the dates of such transactions and any gains or losses thereon are adjusted to revenue through foreign Items Applicable accounting value
exchange trading account. Government treasury bill (HTM) At present value
T&T treasury bond At cost price
2.8 Taxation Zero coupon bond At present value
Income tax expenses represent the sum of the tax currently payable and deferred tax. Bangladesh Government treasury bond At present value
Prize bond At cost price
2.8.1 Current tax Investment in shares (quoted) At cost or market value at the balance sheet date
whichever is lower.
Provision for current income tax has been made @ 45% as prescribed in the finance Act 2007 on the Investment in shares (unquoted) At cost price
accounting Profit made after considering some of the taxable add back income and disallowance of
expenditure. 2.9.4 Recognition of Fixed Assets
All Property and equipment are classified and grouped on the basis of their nature as required in paragraph
2.8.2 Deferred taxation 75(a ) of BAS-1 Presentation of Financial Statements. The major categories of Property and equipment held
The Bank has adopted deferred tax accounting policy as per Bangladesh Accounting Standard (BAS) 12. by the bank are property (land & Buildings), Furniture and fixtures, office appliance, electrical appliances
Accordingly deferred tax liability/asset is accounted for all temporary timing differences arising between the and motor vehicles. As per Para 31 of BAS 16 after recognition as an asset, an item of property, plant and
tax base of the assets and liabilities and their carrying value for financial reporting purposes. Deferred tax is equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair
computed at the prevailing tax rate as per Finance Act 2007. value at the date of the revaluation less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
2.9 Assets and basis of their valuation
Assets acquired under own finance
As guided in paragraph 30 of BAS-16 Property Plant and equipment these are capitalized at cost of
2.9.1 Cash and cash equivalents
acquisition and subsequently stated at coat less accumulated depreciation. The cost of acquisition of an asset
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh comprises its purchase price and directly attributable cost of brining the assets to its working condition for
Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, its intended use inclusive of inward fright, duties and refundable taxes. The opening and closing carrying
and are used by the bank management for its short term commitments. amounts of all property and equipment are presented including the amount of additions, disposals and
depreciation charged during the year as required by paragraph 73(a-e) of BAS-16,Maintanance expenses that
2.9.2 Advances and provisions does not increase in the future economic benefit of assets is charged to profit & loss account.
Advances are stated at gross value. Assets acquired under lease finance

Provision for loans and advances is made on the basis of periodical review by the management and of As per BAS 17 "Lease" all fixed assets acquired under finance lease is accounted for recording the asset at
instructions contained in Bangladesh Bank BRPD Circular no. 5 dated 5 June 2006. The classification rates the lower of present value of minimum lease payments under the lease agreements and the fair value of
are given below: assets. The related obligation under the lease is accounted for as liability. Financial charges are allocated to
accounting period in a manner so as to provide a constant rate of charge on the outstanding liability.
Particulars Rate
General provision on: 2.9.5 Depreciation on Fixed assets
Unclassified loans and advances 1% As required in paragraph 43 of BAS-16 property Plant and equipment depreciation has been charged at the
Small Enterprise 2% following rates on reducing balance method on all fixed assets other than vehicles, which are depreciated
Consumer finance for house building loan and loans for professional setup 2% on straight line basis.
Other consumer finance 5% Category of the assets Rate of depreciation
Special mention account 5% Land Nil
Building 4%
Specific provision on: Furniture and fixtures 10%
Substandard loans and advances 20% Electrical installation including computer 20%
Doubtful loans and advances 50% Typewriter, adding and calculating machine 20%
Bad/loss loans and advances 100% Vehicles 20%
86 Annual Report 2007 Annual Report 2007 87

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

Depreciation has been charged from the month of purchase and in case of sale upto the month of sale. The 2.12.5 Dividend income on shares
gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale
Dividend income from shares is recognized during the period in which they are declared and actually
proceeds and the carrying amount of the asset and is recognized in the profit and loss account.
received.
2.10 Retirement benefit schemes
2.12.6 Gain on sale of security
2.10.1 Provident fund
Capital gain on sale of securities listed in the stock exchanges is recorded only when the securities are sold
Provident fund benefits are given to the staff of the bank in accordance with the registered Provident fund in the market.
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 2.12.7 Interest paid and other expenses (conventional banking)
Schedule of Income Tax Ordinance 1984. The fund is operated by a Board of Trustees consisting of 6 (six) Interest paid and other expenses are recognized on accrual basis.
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 2.12.8 Profit paid on deposits (Islamic banking)
bank are charged as expense. Interest earned from the investments is credited to the members' account on Profit paid to mudaraba deposits are recognized on accrual basis as per provisional rate.
half yearly basis.
2.13 Reconciliation of inter-bank and inter-branch account
2.10.2 Gratuity Accounts with regard to inter bank (in Bangladesh and outside Bangladesh) are reconciled regularly and
Gratuity fund benefits are given to the staff of the bank in accordance with the approved Gratuity fund rules. there are no material differences which may affect the financial statements significantly.
National Board of Revenue has approved the gratuity fund as a recognized gratuity fund with effect from
Unmatched entries/balances in case of inter branch transactions as on the reporting date are not material.
December 2001. 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 2.14 Cash flow statement
Company. The gratuity is calculated on the basis of last basic pay and is payable at the rate of one month's Paragraph 102 of BAS 1 presentation of financial statements requires that a cash flow statement is to be
basic pay for every completed year of service. Gratuity so calculated are transferred to the fund and charged prepared as it provides information about cash flows of the enterprise which is useful in providing users of
to expenses of the bank. financial statements with a basis to asses the ability of the enterprise to generate cash and cash equivalents
2.10.3 Superannuation and the needs of the enterprise to utilize those cash flows. Cash flow statement has been prepared under
the direct method for the period, classified by operating, investing and financing activities as prescribed in
The bank also contributes yearly amount to employees superannuation fund as per rules and regulations of
paragraph 10 and 18 (a) of BAS 7 Cash Flow Statements.
the fund recognized by the Tax Authority. Contribution of the bank to such fund charged as expense of
the bank. 2.15 Statutory reserve

2.11 Provisions and accrued expenses As per section 24 of the Bank company Act 1991,20% of the net profit is transferred to statutory reserve.

Provisions and accrued expenses are recognized in the financial statements when the bank has a legal or 2.16 Exchange equalization fund
constructive obligation as a result of past event, it is probable that an outflow of economic benefit will be This represents the amount arise from exchange gain due to devaluation of Bangladesh taka with foreign
required to settle the obligation and a reliable estimate can be made of the amount of the obligation. currencies and is accounted for as per instruction issued by the Bangladesh bank from time to time.
2.12 Revenue recognition 2.17 Comparative Information
2.12.1 Interest income As guided in paragraph 36 and 38 of BAS 1 Presentation of Financial Statements, comparative information
The interest receivable is recognized on accrual basis. Interest on loans and advances ceases to be taken in respect of the previous year have been presented in all numerical information in the financial statements
into income when such advances are classified. It is then kept in interest suspense account. Interest on and the narrative and descriptive information where, it is relevant for understanding of the current year's
classified advances is accounted for on a cash receipt basis. financial statements.

2.12.2 Profit on investment (Islamic banking) 2.18 Risk Management

Mark-up on investment is taken into income account proportionately from profit receivable account. Risk Management is the key element for sound corporate governance of the Bank. With a recent addition
Overdue charge/compensation on classified investments transferred to profit suspense account instead of in regulatory mandates and increasingly active participation of shareholders, the Bank has become
income account. increasingly concerned to identify areas of risks in the business, whether it is financial, operational, ICT or
reputation risk. Southeast Bank identifies, measures, monitors and manages all risks of the Bank.
2.12.3 Investment income Sophisticated risk management framework is being implemented to carry out efficient risk management
Income on investments is recognized on accrual basis. exercises of the Bank including documenting and assessing risks, defining controls, managing assessments
and audit, identifying issues, implementing recommendations and corrective plans. In accordance with
2.12.4 Fees and commission income
Bangladesh Bank Guidance Notes, the Bank has established a risk framework that consists of six core
Fees and commission income arises on services provided by the Bank and recognized on a cash receipt factors, i.e. (i) Credit Risk (ii) Asset and Liability/Balance Sheet Risk (iii) Foreign Exchange Risk (iv) Internal
basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income Control and Compliance Risk (v) Money Laundering Risk and (vi) Information and Communication
at the time of effecting the transactions. Technology Risk.
88 Annual Report 2007 Annual Report 2007 89

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

The Bank has also identified the following four key infrastructure components for effective risk management 2.18.3 Foreign Exchange Risk Management
programs: Foreign exchange risk is defined as the potential change in earnings due to unfavorable movement in
(i) Proactive Board of Directors and Senior Managements Supervision, exchange rates. Generally, the Bank is less exposed to foreign exchange risk as all the transactions are
(ii) Adequate Policies and Procedures, carried out on behalf of the customers against L/C commitments and other remittance requirements. The
(iii) Proper Risk-Measurement, Monitoring and Management Information Systems and Bank has undertaken policy guidelines to minimize the foreign exchange risk for exposure in currency
(iv) Comprehensive Internal Controls. movement. Treasury department has separate front office. Its back office desks are responsible for currency
2.18.1 Credit risk transactions, deal verification and limit monitoring and settlement of transactions separately. The Bank
continuously revalued all foreign exchange positions at market rate as per the guidelines of Bangladesh
Credit Risk is most simply defined as the failure of a bank borrower or counterparty to meet its obligations
Bank. All Nostro Accounts are timely reconciled and all outstanding entries are reviewed on a regular basis.
in accordance with agreed terms. Financial institutions have been facing difficulties over the years for a
multitude of reasons. The major causes of serious banking problems continue to be directly related to tax 2.18.4 Anti-Money Laundering Risk Management
credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention to
The financial aspects of crime have become more complex due to rapid advancement in technology and
changes in economic or other circumstances that can lead to deterioration in the credit standing of a bank's
counterparties. The goal of credit risk management is to maximise a bank's risk-adjusted rate of return by the globalized character of the financial services industry. Money-Launderers often use their front
maintaining credit risk exposure within acceptable levels. The effective management of credit risk is a companies which co-mingle the proceeds of illicit activity with legitimate funds in order to hide the ill-
critical component of a comprehensive approach to risk management and essential to the long-term success gotten gains. Therefore, prevention of laundering the proceeds of crime has become a major priority from
of any banking organization. The Basel Committee is encouraging Banks to promote sound practices for all jurisdictions from which financial activities are carried out. The policy of the Bank includes establishing
managing credit risk. The sound credit risk management practices include the following areas: adequate procedures of customer due diligence, reporting, record keeping, internal control, risk
(i) Establishing an appropriate credit risk environment management and communication in order to forestall and prevent operations related to money laundering
(ii) Operating under a sound credit-granting process or financing of terrorism. Central Compliance Unit (CCU) of the Bank is performing supervisory and
(iii) Maintaining an appropriate credit administration, measurement and monitoring process; monitorial activities for the Banks internal procedures on anti-money laundering and anti-terrorism
(iv) Ensuring adequate controls over credit risk. financing. It also ensures that bank complies with the anti-money laundering and anti-terrorism financing
Southeast Bank is keenly aware of the need to identify, measure, monitor and control credit risk as well as legislation, including the Know Your Customer rules.
to hold adequate capital against these risks for adequate compensation of risks incurred since exposure to 2.18.5 Internal Control and Compliance Risk Management
credit risk continues to be the leading source of problems in Banks world-wide. In this line Bank is following
the system as per Guidelines of Bangladesh Bank. Bank has also adopted a policy to review the whole Adequate Internal Controls contribute significantly to the improvement of the performance of the Banks
system, from time to time to cope with the multifarious situations. through enforcing efficient managerial guards. Such control culture is duly reflected in the Policy
Guidelines and Structural Changes of the Bank. Our Bank has established sophisticated organizational
The Bank has also taken steps for strengthening the function of Credit Administration i. e. Disbursement,
structure to exercise strong control culture within the organization by implementing policy guidelines of
Custodial Duties, Compliance, Credit Monitoring and Recovery to maintain Credit Risk at the minimum
internal controls appropriately and strengthening internal controls system.
level. In order to achieve this goal Credit Administration Department (CAD) is exerting all out efforts for
completion of Security Documentation before disbursement, ensuring adequate Insurance Coverage to Internal Control and Compliance Division (ICCD) of the Bank comprises three units, namely (i) Compliance
cover unforeseen risks, monitoring and follow up after disbursement of Credit to maintain the loan standard. Unit, (ii) Monitoring Unit and (iii) Audit and Inspection Unit. The Division reviews and monitors Banks
Internal Control and Compliance Risk to help the Bank perform better through the use of its resources. The
Monitoring and Recovery Unit is engaged in monitoring the total Credit Classification position of the Bank
vigilantly, managing all Classified and Special Mention Accounts to regularize for maximization of recovery units of the Division are performing their functional activities in accordance with the Banks own policies
and ensuring appropriate loan loss provision timely. Because of special attention, The Bank could reduce as well as guidance notes issued by Bangladesh Bank from time to time for mitigating the Internal Control
the percentage of classified portfolio from 3.97% to 3.77% in 2007 through substantial amount of loan and Compliance Risks of the Bank.
recovery and regularization.
During the year 2007, Inspection Teams of ICCD of the Bank and Bangladesh Bank carried out inspections
2.18.2 Asset Liability Risk Management on different Branches of our Bank and submitted Reports thereof. Necessary remedial measures/corrective
Asset Liability Management (ALM) is one of the key areas of risk management which mainly focuses on steps have been taken on the suggestions/observations made in the said reports. The summary of key points
liquidity and interest rate risk of the Bank. In 2007, the Bank managed its assets and liabilities most of the reports were also placed and discussed in the meeting of the Audit Committee of the Board of
prudently ensuring optimum liquidity with full compliance of regulatory requirements. By closely Directors. Appropriate actions have also been taken as per the decisions of the said Committee for
monitoring the interest rate movement of the market, the Bank achieved a satisfactory net interest margin protecting the Banks interest.
by taking timely decisions regarding interest rates on deposits and loans and advances. ALM desk of the
Treasury Department prepared monthly Asset Liability Committee (ALCO) paper highlighting economic Compliance: The bank ensures full compliance of regulatory requirements including, the directives of
outlook and financial fundamentals of the Bank and arranged ALCO meetings in every month. Bangladesh Bank (primary regulator), National Board of Revenue, Securities and Exchange Commission,
Registrar of Joint Stock Companies and Finance Ministry etc. having significant impact on the Banks
Decisions taken in the ALCO meetings were duly recorded and action plans were implemented by the
business.
branches/departments to optimize Banks financial performances. As a result, the Bank registered substantial
growth in all the performance indicators including operating profit in 2007 by minimizing the liquidity and Compliance is not a one-time event rather it is a continuous process. For this purpose, the Banks Internal
interest rate risk. As a part of regulatory requirement, the Board of Directors also reviewed the ALM manual Controls have been designed in such a manner so that the compliance with all the relevant regulatory
and its components regularly. requirements is carried out in each activity of the Bank.
90 Annual Report 2007 Annual Report 2007 91

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

The Board of Directors and Senior Management of the Bank have developed a high ethical and moral 2007 2006
standard to ensure strong compliance culture in the Bank. In this context, the Bank gives priority on the 3 Cash Taka Taka
following issues:- In hand:
Local currency 411,691,638 272,580,765
i) To encourage employees to comply with all the policies, procedures and regulations;
Foreign currency 29,220,094 30,709,561
ii) To maintain continuous liaison with the regulators at all level to obtain regular information on
regulatory changes; and 440,911,732 303,290,326
iii) To establish an effective communication process to distribute smoothly the relevant regulations among Balance with Bangladesh Bank:
the officials of the concerned Divisions and Branches Local currency 2,884,138,665 2,167,310,932
Foreign currency 79,315,863 290,811,749
2.18.6 Information and Communication Technology Risk Management 2,963,454,528 2,458,122,681
The Bank has adequately addressed ICT Risk Management. It is an in-depth exercise and continual process. Balance with Sonali Bank (as agent of Bangladesh Bank): 3,005,640 22,002,536
The Risk Management exercise mainly includes minimizing financial loss to the institution in all events such 2,966,460,168 2,480,125,217
as natural disaster, technological failure, human error etc.
3,407,371,900 2,783,415,543
In line with Central Bank directives, the Bank has redrawn its own Information and Communication
Technology (ICT) Policies for operations and Services. Under these policy guidelines, a security policy has Bangladesh Bank adjustments account represents outstanding transactions (Net) originated but yet to be
also been worked out and implemented in the server system through Active Directory Services (ADS). It has responded at the balance sheet date. However, the status of unresponded entries of 31.12.2007 are given
been implemented through Password Policy, Kerberos Policy, Audit Policy, Group policy, User Rights, below:
Permission policy etc. to abide by and adhere to what is laid down in the policy. In order to secure network
resources from public network, the Bank has introduced Virtual Private Network (VPN), Access Control List Number of Unresponded entries Unresponded entries (Amount Taka)
(ACL), IP filtering and TCP/UDP service blocking through Router and firewall devices. It has already Dr. Cr. Dr. Cr.
centralized the administrative control to access the Network, mailing system and access to Internet under Upto 3 months 16 25 296,321,783 250,101,539
this policy. Over 3 months but within 6 months 1 819,643
The Bank has already established Disaster Recovery (DR) site for Communication Network System at Banani Over 6 months but within 1 year
Branch which acts as fallback connectivity when Data Center is down. The Bank has also deployed well Over 1 year but within 5 years
tested and very reliable Antivirus Software like eScan and eTrust to protect and secure the core Network 16 26 296,321,783 250,921,182
and Banking solution. The Bank has prepared Business Continuity Plan (BCP) which is well documented to
re-establish business critical functions within predetermined time frame with minimum financial loss to the 3.1 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)
institution. Under this business, Data Backup at on-site and off-site has already been started and well Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in
practiced. accordance with section 33 of Bank Companies Act, 1991 and BRPD circular no.11 and 12, dated August
25, 2005
2.19 Off balance sheet items
The Cash Reserve Requirement on the Bank's time and demand liabilities at the rate of 5% has been
Under general banking transactions, liabilities against acceptance, endorsements, and other obligations and calculated and maintained with Bangladesh Bank in current account and 18% Statutory Liquidity Ratio,
bills against which acceptance has been given and claims exists there against, have been shown as off including CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds, FC with
balance sheet items. Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as
2.20 Earning per share (EPS) shown below:

The Company calculates Earning Per Share (EPS) in accordance with BAS 33: Earning Per Share, which has 3.1.1 Cash Reserve Requirement (CRR):
been shown on the face of profit & loss account, and the computation of EPS is stated in Note 38. 5% of Required Average Demand and Time Liabilities:
Basic earnings Required reserve 2,514,956,150 2,167,215,950
This represents earnings for the year attributable to ordinary shareholders. As there was no preference Actual reserve held 2,884,138,665 2,167,310,932
dividend, minority or extra ordinary items, the net profit after tax for the year has been considered as fully Surplus 369,182,515 94,982
attributable to the ordinary shareholders.
3.1.2 Statutory Liquidity Requirement (SLR):
Weighted average number of ordinary shares outstanding during the year 18% of Required Average Demand and Time Liabilities:
This represents the number of ordinary shares outstanding at the beginning of the year plus the number of
Required reserve 9,053,842,140 7,801,977,420
shares issued during the year multiplied by a time-weighting factor. The time-weighting factor is the
Actual reserve held 10,970,916,354 8,662,332,166
numbers of months the specific shares are outstanding as a proportion of the total number of months in
the year. Surplus 1,917,074,214 860,354,746
Held for Statutory Liquidity Ratio
Basic earnings per share
Cash in hand 440,911,732 303,290,326
This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares
outstanding for the year. Balance with Bangladesh Bank and its agent bank(s) 2,966,460,168 2,480,125,217
Government securities 4,511,925,696 3,378,498,456
Diluted earnings per share Government bonds 3,051,618,758 2,500,418,167
No diluted EPS is required to be calculated for the year, as there was no scope for dilution during the year
10,970,916,354 8,662,332,166
under review.
92

4.1

Janata Bank

Sonali Bank
Sonali Bank
Agrani Bank
Annual Report 2007

Union Capital
Bank Asia Limited
Bank Asia Limited

One Bank Limited

EXIM Bank Limited


Uttara Bank Limited

Pubali Bank Limited


Pubali Bank Limited
Rupali Bank Limited

Dhaka Bank Limited


a) Inside Bangladesh

Eastern Bank Limited

Lanka Bangla Finance


The City Bank Limited
The City Bank Limited

National Bank Limited


National Bank Limited
Current Account with:

Bangladesh Krishi Bank

Standard Chartered Bank


The Oriental Bank Limited

Dutch-Bangla Bank Limited

Fixed Deposit Account with:


Shahjalal Islami Bank Limited
In side Bangladesh - Note 4.1

Al-Arafah Islami Bank Limited

Arab Bangladesh Bank Limited


Arab Bangladesh Bank Limited
Arab Bangladesh Bank Limited
Outside Bangladesh - Note 4.2

Social Investment Bank Limited


Islami Bank Bangladesh Limited
United Commercial Bank Limited

Phoenix Leasing Company Limited


Short Term Deposit Account with:

Bay Leasing and Investment Limited


The Commercial Bank of Ceylon Limited

Peoples Leasing & Financial Services Ltd.


Fixed deposits With Financial Institutions:

Industrial Development Leasing Company Ltd.


International Leasing and Financial Services Limited
Balance with Other Banks and Financial Institutions
Balance with Other Banks and Financial Institutions:

1,258,788,896
870,000,000
40,000,000
350,000,000
100,000,000
250,000,000
19,794,090
1,185,065
1,546,988,175

100,000,000
50,000,000
100,000,000
100,000,000
2,771,317
14,941,355
113,399
145,040
(107,410)
176,025
528,502
18,994,806
802,047
675,042

100,000,000
380,000,000

10,000

30,795
100,000
550,000
6,034,080
(164,894)
438,171
506,163
2,511,575
5,295,125
163,644
(5,528,148)

248
204,672
1,855,999
5,537,387
288,199,279
1,258,788,896
2007

13,697
Taka
Notes to the Financial Statements for the year ended 31 December 2007

316,822,677
130,000,000
250,000,000
150,000,000
2,542,269
(80,990,439)

100,000,000
17,813,116
1,139,938
5,303,851
(121,154,791)

3,033,571
10,776,680
95,577
134,435
(111,702)
169,953
2,906,972
(25,487,587)
(88,723,321)
(437,977,468)


130,000,000





60
32,335


3,063,072
5,072,164
1,373,825
346,808
1,111,792
5,278,704
2,473,876
3,685,085
2,590,623
316,822,677
Taka
2006




13,697

4.2 2007 2006


Amount Conversion Amount Amount Conversion Amount
In demand deposit accounts Currency in Foreign Rate per in Taka in Foreign Rate per in Taka
(interest bearing) with: Name Currency unit of FC Currency unit of FC
American Express Bank, New York USD 464,489 68.5728 31,851,300 2,500,724 69.0651 172,712,753
Standard Chartered Bank, New York USD 814,509 68.5728 55,853,194 (2,281,242) 69.0651 (157,554,207)
Citibank, New York USD 543,342 68.5728 37,258,483 (3,317,883) 69.0651 (229,149,921)
HSBC, New York USD 754,990 68.5728 51,771,752 (1,444,204) 69.0651 (99,744,094)
HSBC, PLC London GBP 69,528 136.6999 9,504,472 (144,454) 135.3123 (19,546,472)
Mashreq Bank PSC New York USD 387,830 68.5728 26,594,586 1,912,691 69.0651 132,100,170
Wachovia Bank, New York USD 346,574 68.5728 23,765,565 (4,465,584) 69.0651 (308,416,006)
Citibank AG Frankfurt Germany EUR 67,680 100.8980 6,828,757 281,187 91.1659 25,634,675
Standard Chartered Bank London GBP 127,004 135.3123 17,185,209
Standard Chartered Bank, Kolkata ACUD 36,423 68.5728 2,497,652 233,174 69.0651 16,104,186
Arab Bangladesh Bank Ltd., Mumbai ACUD 17,315 68.5728 1,187,343 8,821 69.0651 609,223
ICICI Bank, Mumbai ACUD 217,280 68.5728 14,899,501 (181,011) 69.0651 (12,501,543)
262,012,604 (462,566,026)

In demand deposit accounts (non interest bearing) with:


Bank of Nova Scotia, Toronto, Canada CAD 10,159 69.9223 710,315 17,577 59.2833 1,042,023
Sonali Bank, Kolkata ACUD 57,455 69.0651 3,968,135
Standard Chartered Bank, Karachi ACUD 49,341 68.5728 3,383,455 265,568 69.0651 18,341,480
Standard Chartered Bank, Srilanka ACUD 294 68.5728 20,190 249 69.0651 17,197
Nepal Bangladesh Bank Ltd., Nepal ACUD 837 68.5728 57,362 1,309 69.0651 90,406
Citibank Mumbai ACUD 68.5728 1,596 69.0651 110,228
Bank of Bhutan, Pheuntsholing ACUD 995 68.5728 68,196 5,395 69.0651 372,606
Bank of Tokyo Mitsubishi, Kolkata ACUD 25,255 68.5728 1,731,806 29,136 69.0651 2,012,281
American Express Bank Ltd. Kolkata ACUD 79,207 68.5728 5,431,474 65,191 69.0651 4,502,423
Sumitomo Mitsui Banking Corp. YEN 16,782,547 0.6096 10,230,476 5,485,732 0.5805 3,184,339
Dresdner Bank, Frankfurt Germany EUR 34,782 100.8980 3,509,412 (123,643) 91.1659 (11,272,029)
UBS, Zurich CHF 14,322 56.6851 811,844
Zuercher Kantonal Bank, Zurich CHF 4,324 60.8292 263,028
National Australia Bank Ltd. Melbourne AUD 13,008 60.0355 780,962 25,950 54.2437 1,407,625
Total 26,186,675 24,588,558
Annual Report 2007

Notes to the Financial Statements for the year ended 31 December 2007

288,199,279 (437,977,468)
93
94 Annual Report 2007 Annual Report 2007 95

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka 6.1 Government securities are classified as follows Taka Taka
4.3 Maturity grouping of Balance with Other Banks and Financial Institutions:
Held for trading (HFT) 1,840,224,000
On demand 307,194,085 (518,967,907)
Held to maturity (HTM) 5,718,976,854 5,875,271,823
Less than three months 639,794,090 267,813,116
More than three months but less than six months 500,000,000 Other Securities 4,343,600 3,644,800
More than six months but less than one year 100,000,000 130,000,000 7,563,544,454 5,878,916,623
1,546,988,175 (121,154,791)
6.2 Maturity grouping of Investments as follows :
5 Money at call on short notice On demand 735,243,600 451,945,773
In Bank: Less than three months 3,468,097,297 1,470,484,515
The Oriental Bank Limited 20,000,000 20,000,000 More than three months but less than one year 1,397,106,945 872,138,824
Mutual Trust Bank Limited 200,000,000 More than one year but less than five years 1,017,991,755 1,783,412,310
AB Bank Limited 60,000,000
Above five years 1,844,423,403 1,687,568,538
280,000,000 20,000,000
In non-bank financial institutions (public and private): 8,462,863,000 6,265,549,960
International Leasing and Financial Services Limited 50,000,000 6.3 Cost and Market value of Investments as on 31.12.2007 as follows :
Bay Leasing and Investment Limited 30,000,000 200,000,000
Bangladesh Industrial Finance Company Limited 10,000,000 Type of
Investment Corporation of Bangladesh 300,000,000 market Nos. Cost Price Market Price
Lanka - Bangla Finance Ltd. 30,000,000 Government category
Premier Leasing International Limited 50,000,000 Treasury Bills 4,315,912,590 4,511,925,696
Peoples Leasing & Financial Services Ltd. 30,000,000 Reverse Repo
Phoenix Leasing Company Limited 80,000,000 T & T Treasury Bond 509,031,000 509,031,000
Oman Bangladesh Leasing & Finance Ltd. 60,000,000 Bangladesh Government Treasury Bond 2,497,354,360 2,538,244,158
30,000,000 810,000,000 Prize Bonds 4,343,600 4,343,600
310,000,000 830,000,000 7,326,641,550 7,563,544,454
Placement of Tk. 2,00,00,000/- in the Oriental Bank Limited on 20.12.2005. The Oriental Bank has already Un-quoted shares and bond:
been taken over by the ICB Islami Bank, Switzerland and will start their operation from April as well as Industrial & Infrastructure Dev. Finance Co. Ltd. 142,600 14,260,000 14,260,000
payment will be made from June 2008. Shares in Karmasangsthan Bank 100,000 10,000,000 10,000,000
Central Depository Bangladesh Ltd. 2 2,000,000 2,000,000
6 Investments
Venture Investment Partner 150,000 15,000,000 15,000,000
Government Securities:
28 days Treasury Bills 987,312,312 687,930,523 Zero Coupon Bond (IPDC) 5,119,000 5,119,000
91 days Treasury Bills 1,741,631,263 346,401,523 46,379,000 46,379,000
182 days Treasury Bills 692,142,017 299,700,449 Quoted Shares
364 days Treasury Bills 1,110,687,956 239,622,457 National Tea Company Ltd A 59,083 46,751,747 52,007,811
2 Years Treasury Bills 1,047,892,300 963,037,848
NCC Bank Ltd. A 8,737 3,705,574 3,857,386
5 Years Treasury Bills 691,805,656
EXIM Bank Ltd. A 1,855,849 698,280,059 725,637,350
5,579,665,848 3,228,498,456 Beximco Pharma A 96,675 6,280,619 5,694,158
Add: Reverse REPO with Others Bank 150,000,000
National Life Insurance A 6,704 16,556,580 17,061,680
5,579,665,848 3,378,498,456 Rupali Bank Z 4,190 12,395,009 12,168,808
Less: REPO with Others Bank 1,067,740,152 Mercantile Bank Limited A 36,200 13,550,267 15,167,800
4,511,925,696 3,378,498,456 H R Textile B 28 2,800 2,177
Prize Bonds 4,343,600 3,644,800 Singer BD. Ltd. A 100 589,155 190,000
T & T Treasury Bond 509,031,000 230,756,000
Premier Leasing Int'l Ltd. A 9,950 2,096,567 1,999,950
Bangladesh Government Treasury Bond 2,538,244,158 2,266,017,367
Islamic Finance & Investment A 2,025 497,150 423,225
3,051,618,758 2,500,418,167
Trust Bank Ltd N 22,900 24,186,292 21,279,825
7,563,544,454 5,878,916,623 Premier Bank Ltd. N 32,650 10,421,063 9,925,600
Other Investments: Grameen MF Ltd. A 21,000 1,670,944 1,472,100
Shares in quoted companies 859,039,546 367,343,796
Heidelberg Cement BD Ltd. A 12,850 14,873,565 15,481,038
Shares in unquoted companies 41,260,000 26,260,000
Zero Coupon Bond 5,119,000 12,072,364 Jamuna Bank LTD. A 3,622 1,220,497 1,406,242
Less: Provision for diminution in the market value of shares (6,100,000) (19,042,823) AIMS of BD LTD A 299,000 2,575,664 2,194,660
899,318,546 386,633,337 Eastern Housing Ltd. A 18,060 3,385,995 2,654,820

8,462,863,000 6,265,549,960 859,039,546 888,624,630


96 Annual Report 2007 Annual Report 2007 97

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

6.3.1 Market price of investment those market prices were decreases as on 31.12.2007 2007 2006
Differences 7.2 Residual maturity grouping of loans and advances / Taka Taka
Provision to be investments including bills purchased and discounted
Name of the Company Cost price Market price (required) On demand 1,288,428,150 4,712,503,000
Less than three months 7,629,873,000 10,122,531,000
Beximco Pharma 6,280,619 5,694,158 (586,461) More than three months but less than one year 21,301,072,000 13,499,850,000
Rupali Bank 12,395,009 12,168,808 (226,201) More than one year but less than five years 11,400,045,000 9,173,467,000
H R Textile 2,800 2,177 (623) More than five years 6,545,186,000 3,638,931,000
Singer BD. Ltd. 589,155 190,000 (399,155)
48,164,604,150 41,147,282,000
Premier Leasing Int'l Ltd. 2,096,567 1,999,950 (96,617) 7.3 Loans and advances / Investments on the basis of significant
Islamic Finance & Investment 497,150 423,225 (73,925) concentration including bills purchased and discounted
Trust Bank Ltd 24,186,292 21,279,825 (2,906,467) i) Advances to allied concerns of Directors 40,187,521 35,297,944
Premier Bank Ltd. 10,421,063 9,925,600 (495,463) ii) Advances to Chief Executive and Other Senior Executives 53,298,703 73,964,033
Grameen MF Ltd. 1,670,944 1,472,100 (198,844) iii) Advances to large and medium industries 21,485,095,890 15,191,220,811
AIMS of BD LTD 2,575,664 2,194,660 (381,004) iv) Advances to small and cottage industries 37,974,650 36,300,000
Eastern Housing Ltd. 3,385,995 2,654,820 (731,175) v) Advances to Customers' Group 26,548,047,385 25,810,499,212
64,101,257 58,005,323 (6,095,934) 48,164,604,150 41,147,282,000
Provision maintained Tk.6,100,000/
7.4 Number of clients, with amount of outstanding and classified loans, to whom
2007 2006 loans and advances sanctioned more than10% of total capital of the bank:
7 Loans and Advances/Investments Taka Taka Number of the clients 32 35
7.A Loans, Cash Credits and Overdrafts: Amount of outstanding advances (Tk.) 23,516,200,000 19,323,600,000
Inside Bangladesh: Amount of classified advances (Tk.) 62,200,000
Cash credit and overdrafts 9,715,997,777 9,787,406,213 Amount of recovery/rescheduling thereon (Tk.)
Demand loan 843,265,091 1,063,657,578 Outstanding (Tk. in crore) Total
Time Loan 7,497,589,173 5,299,876,293 Non- Total (Tk. (Taka in
Term Loan 18,007,846,511 13,112,934,513 Name of clients Funded Funded in crore) crore)
Consumer Credit Scheme 175,858,566 203,663,122 Deshbandhu Sugar Mills Ltd. and its related concern, 73.81 15.68 89.49 63.86
Bills against Letter of Credit (BLC) 318,201,550 656,427,026 Metro Spinning Limited 48.87 1.82 50.69 51.58
Loan against Import Merchandised (LIM) Generation Next Fashions Limited 60.56 15.46 76.02 60.54
Loan against Trust Receipt (LTR) 6,351,969,326 4,763,253,004 Faar Ceramics Limited 53.41 5.07 58.48 56.55
Export Development Fund (EDF) 134,373,446 302,625,193 Basic Engineering Ltd. and its related concern 19.72
Advances-packaging Credit (PC) 464,677,898 398,421,716 S. M. Shakil Akhtar, Hot Dresses Limited 23.40
Car Loan-Staff 546,873 Grameen Knitwear Limited 13.88 27.97 41.85 51.33
House Building Loan-Staff 117,493,930 115,373,579 United Edible Oils ltd. and its related concern 80.64 54.58 135.22 116.82
Loan-Credit Card 168,058,878 123,300,925 MAB Spinning ltd. and its related concern 64.16 0.91 65.07 43.03
Hussain Pulp and Paper Mills ltd. and its related concern 54.63 3.30 57.93 50.16
Education Loans 390,771 673,902
Chittagong Asian Apparels ltd. and its related concern 16.65 31.15 47.80 39.47
Loan against Foreign Bills 5,492,421 Maksons Spinning Mills 53.61 10.73 64.34 87.06
43,801,215,338 35,828,159,937 Apurupa Garments, Burlingtons Limited 35.25 22.10 57.35 46.93
Investments - IBBs Chaity Composite ltd. and its related concern 99.80 14.24 114.04 103.05
Bai-Muajjal - Investment 636,570,866 396,514,361 Khaleque Knitting and Garments Industries (Pvt.) ltd.
Murabaha - Investment 231,192,865 203,192,777 and its related concern 95.71 51.66 147.37 132.34
Hire Purchase - Investment 698,658,393 608,171,725 ACS Textile (Bangladesh) Limited 72.43 13.33 85.76 78.23
Bai Salam-Investment PHP Continuous Galvanizing Mills ltd. and its related concern 61.93 10.00 71.93 42.40
Mother Steel 2.07 2.07 2.01
Quard against MTDR 163,993,256 106,660,063
Foyjun Ship Breaking Industries ltd. and its related concern 58.60
1,730,415,380 1,314,538,927 J. K. Enterprise and its related concern 13.93 5.32 19.25 21.82
45,531,630,718 37,142,698,864 Bay Leasing and Investment Limited 26.72 11.94 38.66 39.87
Outside Bangladesh Masuma Khatun Textile Industries ltd. 48.03 27.23 75.26 58.53
Marrine Vegetable Oils ltd. and its related concern 39.35 52.34 91.69 34.30
45,531,630,718 37,142,698,864
Abul Khair Steel Industries ltd. and its related concern 48.22 127.50 175.72 45.48
7.B Bills Purchased and Discounted Nasa Taipei Spinners ltd. and its related concern 59.60 3.87 63.47 84.11
(excluding treasury bills) New Line Clothings ltd. and its related concern 37.78 12.50 50.28 39.91
Payable in Bangladesh 2,143,263,174 3,069,602,060 Partex Sugar Mills ltd. and its related concern 77.25 14.07 91.32 80.74
S. Alam Colled Rolled Steel Limited 22.58 49.81 72.39 77.01
Payable outside Bangladesh 489,710,258 934,981,076
Appollo Ispat Complex ltd. and its related concern 62.54 30.28 92.82 73.53
2,632,973,432 4,004,583,136 Mahbub Spinning ltd. and its related concern 54.07 0.67 54.74 48.40
48,164,604,150 41,147,282,000 Refat Garments ltd. and its related concern 30.89 50.70 81.59 54.19
7.1 Performing loans and advances / Investments Biswas Fashion ltd and its related concern 27.75 25.85 53.60 53.13
Fahami Apparels ltd. and its related concern 84.27 37.35 121.62 51.53
Gross loans an advances / investments 48,164,604,150 41,147,282,000 Concrete and Steel Technologies ltd. and its related concern 27.93 3.08 31.01 42.73
Non-performing loans and advances / investments (1,813,938,231) (1,631,786,528) Kabir Steel ltd. and its related concern 41.17 31.62 72.79
46,350,665,919 39,515,495,472 1,589.49 762.13 2,351.62 1,932.36
98 Annual Report 2007 Annual Report 2007 99

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

% of 2007 % of 2006 2007 2006


Total Taka Total Taka Taka Taka
7.5 Sector -wise Loans & Advances
7.8 Particulars of Advances
Agriculture, Fishing, forestry and dairy firm 0.05% 22,517,044 0.03% 10,700,000
Industry (Jute, textile, garments, chemicals, cements, etc.) 28.84% 13,890,708,164 21.33% 8,775,300,000 i) Debts considered good in respect of which the Bank
Working Capital finance 14.68% 7,071,406,058 15.60% 6,417,500,000 is fully secured. 34,945,899,145 29,704,927,204
Export Credit 4.71% 2,269,972,740 8.75% 3,601,600,000
Commercial Credit 31.27% 15,061,341,084 42.83% 17,662,700,000 ii) Debts considered good for which the bank holds
Small and Cottage industries 0.04% 20,869,185 0.09% 36,300,000 no other security than the debtor's personal security 4,943,199,581 4,231,824,924
Miscellaneous 20.40% 9,827,789,875 11.28% 4,643,182,000
100% 48,164,604,150 100% 41,147,282,000 iii) Debts considered good secured by the personal
7.6 Geographical Location-wise Loans and Advances: liabilities of one or more parties in addition to the
a) Urban: personal security of the debtors 6,461,567,194 5,578,743,344
Dhaka Region 72.15% 34,748,820,292 72.27% 29,738,241,219
iv) Loans/ adversely classified provision not
Chittagong Region 21.72% 10,463,535,150 20.87% 8,586,511,734
Sylhet Region 4.21% 2,026,333,659 5.02% 2,067,542,639 maintained thereagainst
Khulna Region 0.53% 256,413,240 0.68% 278,844,652
v) Debts due by directors or officers of the bank or
98.61% 47,495,102,340 98.84% 40,671,140,244
b) Rural: any of them either severally or jointly with
Dhaka Region 0.51% 246,630,384 0.00% 50,869,158 any other persons. 167,102,816 161,444,897
Chittagong Region 0.62% 300,083,048 0.73% 301,483,646
Sylhet Region 0.25% 122,788,378 0.30% 123,788,952 vi) Debts due by companies or firms in which the
Khulna Region directors or Officers of the Bank are interested as
1.39% 669,501,810 1.03% 476,141,756 Directors, partners or managing agents or in the
100% 48,164,604,150 100% 41,147,282,000 case of private companies, as members. 40,188,000 35,297,944
7.7 Classification of advances as per Bangladesh Bank circular
vii) Maximum total amount of advances, including
Unclassified
temporary advances made at any time during the year
Standard including staff loan 95.25% 45,878,389,693 95.39% 39,250,144,701
to directors or managers or officers of the bank or
Special Mention Account (SMA) 0.98% 472,276,226 0.64% 265,350,771
96.23% 46,350,665,919 96.03% 39,515,495,472 any of them either severally or jointly with any
Classified other persons. 194,602,816 196,281,914
Substandard 0.25% 120,300,292 0.14% 57,869,747
Doubtful 0.09% 45,581,283 0.15% 62,235,730
viii) Maximum total amount of advances, including
Bad / Loss 3.42% 1,648,056,656 3.67% 1,511,681,051 temporary advances granted during the year to the
3.77% 1,813,938,231 3.97% 1,631,786,528 companies or firms in which any of the directors of
100% 48,164,604,150 100% 41,147,282,000 the bank are interested as partners or managing agent
or in case of private companies as members. 40,188,000 35,297,944
7.7.1 Particulars of required provision for loans and advances / investments
Status ix) Due from other banking companies
General provision Base for provision Rate (%) Provision Provision
Loans / investment (Excluding SMA) 45,760,895,760 * Variance 473,408,909 406,920,157 x) Amount of classified loan on which interest has not
Special Mention Account (SMA) 455,890,030 5% 22,794,507 12,897,264 been charged, should be mentioned as follows;
496,203,416 419,817,421 a) Decrease / Increase in provision; (54,738,320) 540,055,931
General provision is kept @ 1% on general loans and advances / investments and 2% on small enterprise Amount of loan written off 181,417,780 6,250,973
financing and 5% on consumer financing Amount realized against loan previously written off;
Status Base for Provision Provision
b) Amount of provision kept against loan classified as
Specific provision provision Rate (%) required required
'bad/loss' on the date of preparing the balance sheet 1,046,085,346 1,100,823,666
Sub-standard 80,073,690 20% 16,014,738 2,603,975
Doubtful 23,350,482 50% 11,675,263 11,916,437 c) Interest creditable to the Interest suspense A/C; 222,480,287 133,711,235
Bad / Loss 1,046,085,346 100% 1,046,085,346 1,100,823,666
1,073,775,347 1,115,344,078 xi) Loans writtenoff
Required provision for loans and advances / investments 1,569,978,763 1,535,161,499 Current year 200,132,000 6,250,973
Total provision maintained 1,575,932,628 1,537,350,408 Cumulative to date 312,571,592 112,439,592
Excess / (shortfall) provision at 31 December 2007 5,953,865 2,188,909 The amount of written off loans for which lawsuit filed 2,071,407,000 150,957,746
100

8
7.9

7.B

7.B.1

Cost
Land
Buildings
Annual Report 2007

Bank's vehicles
Others Security
Share Certificate

Export Document

Within one month


Personal guarantee
Government Bonds
FDR of other Banks

Furniture and fixtures


More than six months
Payable in Bangladesh
Government Guarantee
Foreign Banks Guarantee

Payable outside Bangladesh


Nature of the secured assets:
Collateral of Land and Building

Less: Accumulated depreciation


Bills Purchased and Discounted

Office equipment and machinery


Fixed deposit receipts ( FDR/DBS)

Net book value at the end of the year


Local Banks and Financial Inst. Guarantee
Listing of assets pledged as security/collaterals

More than three months but less than six months


More than one month but less than three months
Maturity grouping of bills discounted and purchased

Fixed assets including premises, furniture and fixtures


Bills discounted and purchased excluding treasury bills:

1,708,110,172
1,881,110,327
21,792,481
174,117,591
2,632,973,432
964,490,000
954,120,432
2,632,973,432
48,164,604,150

173,000,155
277,325,868
658,189,511
749,684,876
489,710,258
2,143,263,174
7,966,380,676
7,072,990,003
5,477,000
3,512,565,066

65,334,000
287,195,000
3,233,688,878
7,450,000
20,479,000
50,000,000
710,871,501
25,297,507,026
Taka
2007

649,029,000
Notes to the Financial Statements for the year ended 31 December 2007

1,300,385,135
1,411,156,239
23,297,449
140,686,258
4,004,583,136
1,294,322,000
2,078,052,136
4,004,583,136
41,147,282,000

110,771,104
200,232,949
485,869,940
561,069,643
25,531,000
934,981,076
3,069,602,060
5,045,127,691
5,595,713,374
3,191,000
4,003,419,666

566,101,000
3,034,005,547
5,200,000
8,615,000
50,000,000
520,539,000
22,315,369,722

606,678,000
Taka
2006

8.1. Fixed assets including premises, furniture and fixtures


Cost Depreciation Written
Balance at Additions Revalued Disposals Balance at Rate Balance at Charged Adjustments Balance at down value at
1 January during during during 31 December of 1 January for the for disposals 31 December 31 December
Category of assets 2007 the year the year the year 2007 dep. 2007 year etc. 2007 2007
Taka Taka Taka Taka Taka % Taka Taka Taka Taka Taka

Own assets

Office:
Land 561,069,643 188,615,233 749,684,876 749,684,876
Buildings 485,869,940 26,181,500 146,138,071 658,189,511 4 22,729,982 18,527,692 41,257,674 616,931,837
Furniture and fixtures 93,111,432 76,867,918 169,979,350 10 10,251,772 12,615,377 22,867,149 147,112,201
Office appliances 1,930,426 104,150 2,034,576 20 1,160,701 164,786 1,325,487 709,089
Electrical appliances 70,935,330 32,852,184 103,787,514 20 13,392,180 15,596,930 28,989,110 74,798,404
Motor vehicles 1,527,767 20,000 (36,666) 1,511,101 20 1,463,599 1,463,599 47,502

1,214,444,538 136,025,752 334,753,304 (36,666) 1,685,186,928 48,998,234 46,904,785 95,903,019 1,589,283,909

Residence of executives:

Furniture and fixtures 1,070,290 225,000 1,295,290 10 402,627 79,915 482,542 812,748
Electrical appliances 8,933,694 975,000 (500,000) 9,408,694 20 4,255,387 1,001,718 (326,762) 4,930,343 4,478,351

10,003,984 1,200,000 (500,000) 10,703,984 4,658,014 1,081,633 (326,762) 5,412,885 5,291,099

1,224,448,522 137,225,752 334,753,304 (536,666) 1,695,890,912 53,656,248 47,986,418 (326,762) 101,315,904 1,594,575,008

Leased assets

Furniture and fixtures 106,051,227 106,051,227 10 20,149,733 8,590,149 28,739,882 77,311,345


Electrical appliances 58,886,808 58,886,808 20 21,199,258 7,537,510 28,736,768 30,150,040
Motor vehicles 21,769,682 6,132,500 (7,620,803) 20,281,379 20 15,765,865 5,415,848 (6,974,113) 14,207,600 6,073,779

186,707,717 6,132,500 (7,620,803) 185,219,414 57,114,856 21,543,507 (6,974,113) 71,684,250 113,535,164

At 31 December 2007 1,411,156,239 143,358,252 334,753,304 (8,157,469) 1,881,110,326 110,771,104 69,529,925 (7,300,875) 173,000,154 1,708,110,172
Annual Report 2007

Notes to the Financial Statements for the year ended 31 December 2007

At 31 December 2006 844,402,698 567,053,541 (300,000) 1,411,156,239 53,781,693 57,121,794 (132,383) 110,771,104 1,300,385,135
101
102 Annual Report 2007 Annual Report 2007 103

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


9 Other Assets Taka Taka Taka Taka
Classification of Other Assets 10 Borrowing from other Banks including Financial Institutions & Agents:
a) Income generating Other Assets
In Bangladesh 6,509,000 314,442,000
b) Non-Income generating Other Assets Outside Bangladesh
i) Investment in Shares of subsidiary companies: 6,509,000 314,442,000
In Bangladesh In Bangladesh
Outside Bangladesh
Refinance against agro-based credit from Bangladesh Bank 4,225,000 10,400,000
ii) Stationery, stamps, printing materials etc. 39,713,241 21,509,382 Refinance against SME loan from Bangladesh Bank 2,284,000 4,042,000
iii) Advance rent and advertisement 50,492,613 47,284,535 Call loan from Other Bank 300,000,000
iv) Interest accrued on investment but not collected, 6,509,000 314,442,000
commission & brokerage receivable on shares and
debenture and other income receivable 169,464,654 136,202,678 Security against borrowings from other banks, financial institutions and agents

v) Security Deposit 1,032,969 935,600 Secured 6,509,000 314,442,000


vi) Preliminary, formation and organization expenses, Unsecured
renovation /development and prepaid expenses 144,321,906 80,342,846 6,509,000 314,442,000
vii) Suspense account 890,089 29,642,795
viii) Branch adjustment (net and reconciled) 58,215,272 1,064,443,949 10.1 Maturity grouping of borrowings
Repable on demand 300,000,000
ix) Silver
Repable within one month 1,437,500
x) Others 306,621,900 120,285,163
Over one month but within 6 months 300,000
770,752,643 1,500,646,948 Over six months but within one year
No fictitious assets has been incurred during the year Over one year 5,071,500 14,142,000
6,509,000 314,442,000
9.1 Branch Adjustment (net & reconciled)
General Accounts Debit 15,035,335,554 11,483,424,148
11 Deposits and other accounts
General Accounts Credit (14,977,120,282) (10,418,980,199) Inter Bank 2,927,405,000 2,878,472,000
58,215,272 1,064,443,949 Other deposits 52,546,643,109 43,177,711,240
55,474,048,109 46,056,183,240
Branch adjustments account represents outstanding Inter-branch and Head Office transactions (Net)
originated but yet to be responded at the balance sheet date. However, the status of unresponded entries
11.1 Deposits and other accounts
of 31.12.2007 are given below:
Current deposits and other accounts
Number of Unresponded entries Unresponded entries (Amount Taka) Current / Al-wadeeah current deposits 1,565,669,748 1,388,169,019
Dr. Cr. Dr. Cr. Foreign currency deposits 311,529,151 397,920,329
Sundry deposits 2,062,596,046 1,802,483,019
Upto 3 months 557 447 989,994,628 933,745,284
3,939,794,945 3,588,572,367
Over 3 months but within 6 months 66 47 36,470,472 34,656,998
Over 6 months but within 1 year 19 4 184,537 32,084
Bills payable
Over 1 year but within 5 years Payment order issued 660,430,840 445,426,548
642 498 1,026,649,638 968,434,366 Demand draft 27,850,926 153,086,863
688,281,765 598,513,411
There is no provision has made against un-reconciled/un-respondend entries since there are no
unreconciled entries one year and above.
Savings bank / Mudaraba savings deposits 3,433,491,229 3,270,876,497

9.2 Break-up of Others:


Fixed deposits
Accounts Receivable Others 296,391,094 106,509,998 Fixed deposits / Mudaraba fixed deposits 40,368,378,713 35,576,557,588
ATM Teller A/C 10,226,100 7,610,400 Short term / Mudaraba short term deposits 3,988,750,122 1,524,975,218
DD paid without Advice 4,706 1,755,055 Scheme deposits 3,055,351,334 1,496,688,160
Right Issue of Shares 4,409,710 47,412,480,168 38,598,220,966
306,621,900 120,285,163 55,474,048,109 46,056,183,240
104 Annual Report 2007 Annual Report 2007 105

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka 11.4 Other Deposits Taka Taka
11.1.1 Sundry Deposits Analysis of residual maturity grouping of other deposits:
Margin under letter of credit 1,331,753,141 1,185,953,912 Repayable on demand 4,164,794,109 6,107,164,240
Margin against IBP 15,555,208 51,653,148 Repayable within 1 month 3,134,844,000 2,424,490,000
Margin under letter of guarantee 431,452,299 271,175,955 Over 1 month but within 6 months 17,168,877,000 14,046,481,000
Deposit held against FDBP/ IDBP, export bills 11,819,274 44,015 Over 6 months but within 1 year 15,040,544,000 12,547,221,000
Dormant Accounts 1,237,025 Over 1 year but within 5 years 11,339,586,000 7,387,809,000
D.A.D. Back to Back Foreign currency 12,612,583 Over 5 years but within 10 years 1,697,998,000 664,546,000
Accounts Payable 1,693,570 10,241,800 52,546,643,109 43,177,711,240
Telegraphic Transfer 2,734,703 5,942,772
55,474,048,109 46,056,183,240
Mail Transfer 6,052,100
Remittance awaiting disposal 114,973,186 61,799,052
12 Other liabilities
Others 132,712,958 215,672,365
Provision for classified advances 12.1 1,075,932,628 1,117,350,408
2,062,596,046 1,802,483,019 Provision for unclassified advances 12.2 500,000,000 420,000,000
General Provision on Off-Balance Sheet Exposures 12.3 107,100,000
11.2 Sector-wise deposits Interest suspense 12.4 222,480,287 133,711,235
Government 1,369,704,000 1,082,794,000 Provision for taxation 12.5 479,032,331 272,431,891
Deposit money banks 2,927,405,000 2,878,472,000 Provision for deferred tax 12.6 32,792,067 13,353,300
Other public 4,012,045,000 3,203,737,000 Provision for Superannuation Fund 2,500,000 4,300,000
Foreign currency 855,351,854 732,004,310 SEBL Foundation 50,000,000
Private 46,309,542,255 38,159,175,930 Obligation under lease capital 12.8 87,148,823 115,185,406
55,474,048,109 46,056,183,240 Accrued expenses 3,936,993 5,377,705
Interest payable on borrowings 9,121,674 846,673
11.3 Inter-bank deposits Accounts payable - Bangladesh Bank (local currency) 1,512,101 4,064,151
Rupali Bank 200,000,000 Accounts payable - Others 95,355,889 128,401,386
Uttara Bank Limited 200,000,000 Provision for bonus 287,501 3,457,150
Basic Bank Limited 450,000,000 300,000,000 Provision for Other Assets 12.9 13,505,181 8,569,807
Exim Bank Limited 148,206,000 264,830,000 Unearned income on treasury bills 416,077
IFIC Bank Limited 223,000 300,206,000 Withholding tax on interest on deposits 64,142,280 48,805,805
Brac Bank Limited 50,213,000 766,000 Provision for Audit Fees 400,000 350,000
Mercantile Bank Limited 108,000 100,000
2,745,663,830 2,276,204,917
Arab Bangladesh Bank Limited 1,000 49,000
Social Investment Bank Limited 461,560,000 191,835,000
12.1 Provision for classified loans and advances
National Bank Limited 200,000,000
Opening balance 1,117,350,408 812,601,381
Janata Bank Limited 300,000,000
Fully provided debts written off during the year (181,417,780) (6,250,973)
Bangladesh Shilpa Rin Sangstha 80,000,000 50,000,000
Specific provision for the year 140,000,000 311,000,000
Dhaka Bank Limited 59,000
Bangladesh Shilpa Bank 50,000,000 Closing balance 1,075,932,628 1,117,350,408
Shahjalal Islami Bank Limited 520,710,000 751,757,000
Al-Arafa Islami Bank Limited 303,534,000 25,798,000 12.2 Provision for unclassified loans and advances
Islami Bank Bangladesh Limited 241,067,000 228,397,000 Opening balance 420,000,000 316,000,000
Bank Al - Falah 50,000,000 Addition during the year 80,000,000 104,000,000
Trust Bank Limited 200,000,000 Closing balance 500,000,000 420,000,000
Datch Bangla Bank Limited 200,000,000
Accrued Interest 21,783,000 14,675,000 12.3 Provision for Off-Balance Sheet exposures
2,927,405,000 2,878,472,000 Opening balance
Addition during the year 107,100,000
Analysis of residual maturity grouping of inter-bank deposits: Closing balance 107,100,000
Repayable on demand 751,000 314,000
Repayable within 1 month 2,154,871,000 1,062,303,000 12.4 Interest Suspense Account
Over 1 month but within 6 months 771,783,000 1,815,855,000 Provision held at the beginning of the year 133,711,235 101,885,897
Over 6 months but within 1 year Add: Amount transferred to "Interest Suspense" A/c during the year 429,555,638 93,786,176
Over 1 year but within 5 years Less: Amount recovered in "Interest Suspense" A/c during the year (322,072,365) (61,950,828)
Over 5 years but within 10 years Less: Amount written-off during the year (18,714,220) (10,010)
2,927,405,000 2,878,472,000 Balance at the end of the year 222,480,287 133,711,235
106 Annual Report 2007 Annual Report 2007 107

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 12.8.2 Aging analysis of liabilities under finance lease:


Taka Taka 2007 2006
12.5 Provision for income tax
Financial Financial
Advance tax
Minimum charge Principal Minimum charge Principal
Balance of advance income tax on 1st January, 2007 1,118,710,158 934,054,202 Aging analysis of liabilities lease for future Out- lease for future Out-
Paid during the year 1,148,033,342 676,791,179 payment period standing payment period standing
Settlement of previous years tax liabilities (492,135,223) Payable within 1 year 42,657,570 8,581,977 34,075,593 45,077,652 12,132,145 32,945,507
2,266,743,500 1,118,710,158 Payable more than 1 year but less than 2 years 42,607,810 4,381,258 38,226,552 41,486,952 8,050,759 33,436,193
Provision Payable more than 2 years but less than 5 years 15,538,240 691,562 14,846,678 53,045,610 4,241,904 48,803,706
Balance of provision on 1st January, 2007 1,391,142,049 1,169,277,272 100,803,620 13,654,797 87,148,823 139,610,214 24,424,808 115,185,406

Provision for previous year 168,994,743


Provision made during the year The average lease terms of the leased assets taken under finance lease is 48 months and all leases are on
Current tax 1,185,639,039 714,000,000 fixed repayment basis. The Company's obligation under finance lease are secured by the lessor's charge
Settlement of previous years tax liability (492,135,223) over the lease assets.
2007 2006
2,745,775,831 1,391,142,049
Taka Taka
Net balance at 31st December, 2007 479,032,331 272,431,891 12.9 Provision for Other Assets
* Corporate tax position of the bank has been shown in annexure - B Balance, brought forward 8,569,807 5,569,807
Adjustment during the year (64,626)
Provision for current tax of Tk.118,56,39,039 has been made @ 45% as prescribed by Finance Act, 2007 Addition during the year 5,000,000 3,000,000
of the accounting profit made by the Bank after considering some of the add backs to income and
Balance, carry forward 13,505,181 8,569,807
disallowances of expenditure as per Income Tax Ordinance and Rules 1984.

13 Share Capital
12.6 Deferred tax liability
Balance as on 1st January, 2007 13,353,300 (1,082,600)
13.1 Authorized
Addition during the year 19,438,767 14,435,900
35,000,000 Ordinary shares of Tk.100.00 each 3,500,000,000 3,500,000,000
Balance as on 31st December, 2007 32,792,067 13,353,300
To maintain the deferred tax liability of Tk.3,27,92,067 as at 31 December 2007 a deferred tax provision 13.2 Issued, subscribed and fully paid up Capital
of Tk.1,94,38,767 has been made during the year 2007 as per BAS-12 "Income Taxes". 14,713,696 Ordinary shares of Tk.100.00 each issued for cash 1,471,369,600 1,471,369,600
8,103,887 Ordinary shares of Tk.100.00 each issued as bonus shares 810,388,700 641,369,600
22,817,583 2,281,758,300 2,112,739,200
12.7 Provision for Taxation during the year
Provision for previous year 168,994,743 13.3 Shareholding position was as follows
Current tax provision 1,185,639,039 714,000,000 Face Value/Taka
Deferred tax provision 19,438,767 14,435,900 Number Percentage 2007 2006
Sponsors 6,590,076 28.88% 659,007,600 783,417,400
1,374,072,549 728,435,900
Financial Institutions & Investor A/C holders 4,212,640 18.46% 421,264,000 474,646,200
General Public & Others 12,014,867 52.66% 1,201,486,700 854,675,600
12.8 Obligation under Capital lease/Finance lease
22,817,583 100% 2,281,758,300 2,112,739,200
This represents fixed assets acquired under lease. Lease rentals include financial charges which have been
used as discounting factor and are payable on monthly basis. The Company has an option to purchase the
assets upon completion of lease period and has intention to exercise the option. 13.4 Classification of shareholders by holding
Number of holders % of Total holding
Leased Obligation on Fixed Assets 31-Dec-07 31-Dec-06 2007 2006
Leased Obligation on Furniture and Fixture 54,981,676 74,525,532 Less than 500 shares 8,337 7,123 3.14 4.58
Leased Obligation on Electrical Appliance 25,648,784 38,319,396 501 to 5,000 shares 1,053 1,455 5.86 9.85
Leased Obligation on Motor Vehicles 6,518,363 2,340,478 5,001 to 10,000 shares 69 88 2.22 3.05
87,148,823 115,185,406 10,001 to 20,000 shares 53 54 3.63 3.64
20,001 to 30,000 shares 11 23 1.16 2.71
30,001 to 40,000 shares 24 22 3.66 3.59
12.8.1 Movement of leased obligation on Fixed Assets:
40,001 to 50,000 shares 14 12 2.83 2.57
Opening balance as on 1st January, 2007 115,185,406 149,312,722
50,001 to 100,000 shares 27 29 9.12 10.38
Less: Adjustment during the year (34,169,083) (34,552,522)
100,001 to 1,000,000 shares 46 49 49.51 59.63
Add: Addition during the year 6,132,500 425,206
Over 1,000,000 shares 2 18.87
Closing balance as on 31st December, 2007 87,148,823 115,185,406 9,636 8,855 100.00 100.00
108 Annual Report 2007 Annual Report 2007 109

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka Taka Taka
13.5 Name of Directors and their Shareholding as on December 31, 2007 13.6.2 Core capital (Tier-I)
Paid-up Capital 2,281,758,300 2,281,759,000
Sl. No. Name of Directors Status Position as on 31.12.2007 Position as on 31.12.2006 Non-repayable share premium account 1,056,369,600 1,056,370,000
1 Mr. Alamgir Kabir, FCA Chairman 2,06,376 shares of Tk.100/- each 1,61,460 shares of Tk.100/- each Statutory Reserve 1,544,287,000 1,024,878,000
total Tk.2,06,37,600/- total Tk.1,61,46,000/- General Reserve 247,650,000 27,650,000
Retained Earnings 443,784,391 10,224,000
2 Tillaghar Holdings Limited Vice Chairman 1,01,088 shares of Tk.100/- each 93,600 shares of Tk.100/- each
Represented by Mr. Abdul Hye total Tk.1,01,08,800/- total Tk.93,60,000/- 5,573,849,291 4,400,881,000
Supplementary capital (Tier-II)
3 MK Holdings Limited Director 84,088 shares of Tk.100/- each 93,600 shares of Tk.100/- each
General Provision maintained against unclassified loans/investments 500,000,000 420,000,000
Represented by Mrs. Sultana Kashem total Tk.84,08,800/- total Tk.93,60,000/-
General Provision on Off-Balance Sheet Exposures 107,100,000
4 AD Holdings Limited Director 1,01,088 shares of Tk.100/- each 93,600 shares of Tk.100/- each Exchange Equalization Account 4,204,046 4,204,000
Represented by Mrs. Farzana Azim total Tk.1,01,08,800/- total Tk.93,60,000/- Assets Revaluation Reserve 283,207,882 115,831,000
5 Bangla Capital Limited Director 33,696 shares of Tk.100/- each 31,200 shares of Tk.100/- each 894,511,928 540,035,000
Represented by Mr. Tanveer Harun total Tk.33,69,600/- total Tk.31,20,000/- 6,468,361,219 4,940,916,000
6 Mrs. Rehana Rahman Director 2,80,391 shares of Tk.100/- each 2,59,622 shares of Tk.100/- each
total Tk.2,80,39,100/- total Tk.2,59,62,200/- 13.6.3 Computation of risk-weighted assets 2007
7 Mrs. Sirat Monira Director 13,478 shares of Tk.100/- each 12,480 shares of Tk.100/- each Risk-
total Tk.13,47,800/- total Tk.12,48,000/- Balance weighted
as on Risk- balance
8 Karnafuli Tea Co. Limited Director 4,043 shares of Tk.100/- each 3,744 shares of Tk.100/- each 31.12.07 (net) weighted as at 31.12.07
Represented by total Tk.4,04,300/- total Tk.3,74,400/- Particulars (figure in'000) factor (figure in'000)
Mr. Dewan Mustaq Majid Cash in hand and balance with banks (except banks abroad) 3,727,072
Balance with other Financial Institutions - Private 870,000 0.20 174,000
13.6 Capital Adequacy of the Bank Money at call on short notice (Banking companies) 280,000
Calculated as per BRPD Circular no. 10 issued by Bangladesh Bank on 25 November 2002 and Money at call on short notice (Non-Banking companies) 30,000 0.20 6,000
subsequently amended Circular No. 3 dated 9 May 2004 and BRPD circular No.12 dated 05 November, Foreign currency balance held 406,972
2007. Export and other foreign bills 2,632,973 0.50 1,316,487
Advance:
Other Financial Institution-Private 672,800 0.50 336,400
Total assets of the bank including off-balance sheet items 86,041,298,619 78,637,128,583
Private Sector 41,095,276 1.00 41,095,276
Total risk weighted assets 49,777,444,100 42,960,414,000 Investments
Required capital @ 10% of risk weighted assets 4,977,744,410 3,866,437,260 Government 7,563,545
Capital held: Other Financial Institution-Public 10,000 0.20 2,000
Other Non-Financial public enterprise 46,751 0.50 23,376
Core capital 5,573,849,291 4,400,881,000
Other Financial Institution-Private 51,433 0.50 25,717
Supplementary capital 894,511,928 540,035,000 Private Sector 27,376 1.00 27,376
Total Capital 6,468,361,219 4,940,916,000 Deposit Money Banks 763,758 0.20 152,752
Surplus/ (deficit) 1,500,812,609 1,074,478,740 Contingent assets as per contra
Letter of credit and letter of guarantee 11,528,014 0.50 5,764,007
Percentage of capital held against risk weighted assets 13.00% 11.50%
Others 0.50
Fixed Assets 1,708,110 0.50 854,055
13.6.1 Capital requirement Required Held Required Held Expenditure account 770,753
Tier - I 5.00% 11.20% 4.50% 10.24% 72,184,833 49,777,444
Tier - II 1.80% 1.26%
10.00% 13.00% 9.00% 11.50% 14 Statutory Reserve
Balance brought forward 1,024,878,000 697,215,000
Constituents of Capital Addition during the year 519,409,000 327,663,000
In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no.01, Balance carried forward 1,544,287,000 1,024,878,000
14 and 10 dated January 08, 1996, November 16, 1996, November 25, 2002 and November 05, 2007
respectively, required capital of the Bank at the close of business on 31 December 2007 was Taka 15 General Reserve
Opening balance 27,650,000 27,650,000
49,777,444,100 as against available core capital of Taka 5,573,849,291 and supplementary capital of Taka
Addition during the year 220,000,000
894,511,928 making a total capital of Taka 6,468,361,219 thereby showing a surplus capital / equity of
Taka 1,490,616,809 at that date. Details are shown below: Closing balance 247,650,000 27,650,000
110 Annual Report 2007 Annual Report 2007 111

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka Taka Taka
16 Others Reserve 18.4 Bills for collection
Bills for collection (Local) 147,504,004 271,876,141
16.1 Revaluation reserve Bills for collection (Foreign) 1,134,870,576 1,816,355,170
Opening balance 231,662,460 231,662,460
1,282,374,580 2,088,231,311
Addition during the year 334,753,304
Commitments (18.1+18.3):
Closing balance 566,415,764 231,662,460 i) Documentary credit and short term business transactions 14,792,805,782 16,438,347,676
ii) Forward assets purchased and forward deposits
16.2 Exchange equalization fund iii) Existing facilities, loan facilities and other commitments
Opening balance 4,204,046 4,204,046 not accounted for:
Less than one year
Addition during the year
more than one year
Closing balance 4,204,046 4,204,046 iv) Spot and forward foreign exchange rate contracts
v) Other exchange contracts
570,619,810 235,866,506 14,792,805,782 16,438,347,676
19 Income Statement
17 Retained earnings Income
Balance brought forward 601,791,332 19,573,548 Interest, discount and similar income 7,067,824,743 5,492,160,273
Profit for the year 1,222,969,036 909,880,784
Dividend income 2,080,927 18,115,028
Transfer to Statutory reserve (519,409,000) (327,663,000)
Fees, commission and brokerage 688,913,676 611,838,044
Transfer to General reserve (220,000,000)
Gains less losses arising from dealing securities 47,105,332 19,923,740
Transfer to SEBL Foundation (50,000,000)
Gains less losses arising from investment securities 248,752,110 16,798,767
Issue of bonus shares (169,019,100)
Gains less losses arising from dealing in foreign currencies 470,107,089 472,338,670
Cash dividend paid (422,547,876)
Income from non-banking assets
443,784,391 601,791,332 Other operating income 145,688,988 134,938,982
Profit less losses on interest rate changes
18 Contingents Liabilities Nominal value of bonus share received
8,670,472,865 6,766,113,504
18.1 Acceptances and endorsements
Expenses
Acceptance under Letters of Credit -Import 3,887,041,048 8,056,775,924
Interest, fees and commission 4,852,499,177 4,044,631,543
Acceptance under Letters of Credit -Export 3,490,167,900 1,439,382,000
Losses on loans and advances
7,377,208,948 9,496,157,924 Administrative expenses 608,287,735 432,390,752
Other operating expenses 223,957,265 169,311,731
18.2 Letters of guarantee 5,335,371,383 4,985,768,328 Depreciation on banking assets 69,529,925 57,121,794
5,335,371,383 4,985,768,328 5,754,274,102 4,703,455,820
Income over expenditure 2,916,198,763 2,062,657,684
Claims lodged with the bank company, which is not recognized as loan;
Money for which the bank is contingently liable in respect 20 Interest income
of guarantee issued favoring: Interest on loans and advances 5,965,869,521 4,811,331,708
Directors or officers 7,527,387 7,530,000 Interest on placement with other banks and financial institutions 230,298,650 113,931,676
Government Interest on foreign currency balance 18,072,213 23,418,555
Banks and other financial institutions 6,214,240,384 4,948,681,939
Others 5,327,843,996 4,978,238,328 Profit on investment (Islamic Banking Branch):
5,335,371,383 4,985,768,328 Profit on Bai-Muajjal 61,842,574 50,478,327
Profit on Murabaha 35,455,398 28,661,658
18.3 Irrevocable Letters of Credit Profit on hire purchase/Izarah 82,198,161 69,368,742
Letters of credit (Back to Back) 2,263,080,500 1,633,383,000 Profit on Quard against MTDR 15,225,772 10,589,048
Letter of Credit (Other than Back to Back) 5,152,516,334 5,308,806,752 194,721,905 159,097,775
7,415,596,834 6,942,189,752 6,408,962,289 5,107,779,714
112 Annual Report 2007 Annual Report 2007 113

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka Taka Taka
21 Interest paid on deposits, borrowings, etc. 24.1 This represents gain / (loss) on sale of the following fixed assets during the year as follows :
Interest paid on Cost of :
Interest on deposits 4,338,580,546 3,694,400,003 Motor Vehicle 1,435,757
Furniture and Fixture 25,000
Interest on borrowings 50,286,878 104,012,706
Office Appliances
Interest on foreign bank accounts 3,854,551 Electrical Appliances 561,980 275,000
4,392,721,974 3,798,412,709 1,997,737 300,000
Less: Accumulated depreciation
Profit paid on deposits (Islamic Banking Branch):
Motor Vehicle 752,401
Mudaraba Savings Deposit 89,254,613 62,177,642 Furniture and Fixture 7,215
Mudaraba Short Term Deposits (MSTD) 30,278,056 3,740,896 Office Appliances
Mudaraba Fixed Term Deposits (MFDR) 340,244,534 180,300,296 Electrical Appliances 326,763 125,168
1,079,164 132,383
459,777,203 246,218,834 Written down value 918,573 167,617
Sale proceeds of the above fixed assets 2,806,831 167,617
4,852,499,177 4,044,631,543
Total Sales of the above fixed assets 2,806,831 167,617
Total Gain / (loss) on sale of fixed assets 1,888,258
22 Income from investment
Interest on treasury bills/bonds 658,862,454 384,380,559 25 Salary and Allowances
Basic salary 160,798,323 130,682,991
Dividend on investment in shares 2,080,927 18,115,028
Allowances 97,903,305 83,190,602
Capital Gain - Treasury bill/bond 47,105,332 19,923,740
Bonus 103,643,211 24,144,175
Gain on sale of investment in shares 248,752,110 16,798,767 Provident fund 13,206,127 11,298,804
Nominal value of bonus share received 375,550,966 249,316,572

956,800,823 439,218,094 26 Rent, Taxes, Insurance, Lighting etc.


Rent, rates and taxes 64,283,159 50,106,399
23 Commission, Exchange and Brokerage Insurance 30,728,992 20,406,076
Commission and brokerage 688,913,676 611,838,044 Electricity and lighting 13,654,568 11,131,443
108,666,718 81,643,918
Exchange gain ( note 23.1) 470,107,089 472,338,670

1,159,020,766 1,084,176,714 27 Postage, Stamp, Telegram & Telephone


Postage 12,206,348 10,367,615
Telephone 11,140,249 9,311,493
23.1 Exchange gain Telex 262,690 19,778
Exchange gain 470,107,089 472,338,670 Electronic banking service 3,881,837 3,595,930
Less: Exchange loss thereon FC Charge (Nostro) 1,172,482 1,053,979
VSAT On-Line 9,455,446 9,812,364
470,107,089 472,338,670 Reuters Services 2,251,122 2,755,087
SWIFT services 14,564,766 14,453,463
24 Other Operating Incomes 54,934,940 51,369,709
Remittance fees 2,470,368 3,523,644
28 Stationery, Printing, Advertisement etc.
Service and incidental charges 52,629,057 53,493,138 Table Stationery 4,938,677 4,435,305
Other Fees-Telephone/Telex/Postage 19,696,710 17,204,006 Printing Stationery 8,866,383 4,870,789
Income from ATM services 269,050 290,360 Security Stationery 1,221,994 1,072,946
Income from Credit Card 20,662,107 18,532,293 Computer Stationery 5,737,619 4,344,770
Publicity and advertisement 18,495,788 15,634,745
On-Line services 9,335,608 9,193,180
39,260,461 30,358,555
Other Fees - SWIFT 31,586,431 30,385,651
Demat and Custody Fees 1,766,314 29 Managing Director's remuneration
Gain on sale of fixed assets (Note 24.1) 1,888,258 Basic Salary 3,235,484 2,993,548
Miscellaneous income 5,385,085 2,316,710 Bonus 850,000 500,000
Provident Fund 323,548 299,355
145,688,988 134,938,982 4,409,032 3,792,903
114 Annual Report 2007 Annual Report 2007 115

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 2007 2006


Taka Taka Taka Taka
30 Directors' Fees and Expenses 33 Provision for diminution in value of investments
Directors' fees 1,232,200 880,200 Balance, brought forward 19,042,823 12,701,823
Directors' haltage and travelling 352,617 290,829 Addition during the year (12,942,823) 6,341,000

1,584,817 1,171,029 Balance, carry forward 6,100,000 19,042,823


31 Depreciation and Repairs at Bank's Property
34 Cash Received from Other Operating Activities
Depreciation:
Remittance fees 2,470,368 3,523,644
Building 18,527,692 6,079,376
Service and incidental charges 52,629,057 53,493,138
Furniture and Fixture 12,695,292 8,552,854
Other Fees-Telephone/Telex/Postage 19,696,710 17,204,006
Office Appliance 164,786 148,631 Income from ATM services 269,050 290,360
Electrical Appliance 16,598,648 11,877,457 Income from Credit Card 20,662,107 18,532,293
Motor Vehicles On-Line services 9,335,608 9,193,180
47,986,418 26,658,318 Other Fees - SWIFT 31,586,431 30,385,651
Fixed Assets under Capital Lease Demat and Custody Fees 1,766,314
Furniture and Fixture 8,590,149 9,544,610 Miscellaneous income 4,811,087 2,058,641
Electrical Appliance 7,537,510 9,421,896 143,226,731 134,680,913
Motor Vehicles 5,415,848 11,496,970
35 Payments for other operating activities
21,543,507 30,463,476
Rent rates and taxes 104,623,781 83,369,245
69,529,925 57,121,794 Postage 54,934,940 51,369,709
Repairs: Directors fees 1,587,817 1,171,029
Furniture and Fixture 1,428,502 1,786,860 Repairs 23,131,335 14,234,516
Office and Electrical Appliance 12,581,687 7,193,395 Others expenses 224,703,731 169,815,281
Motor Vehicles 1,869,716 2,621,676 408,981,604 319,959,780
Repair, Maintenance and Utilities 7,251,429 2,632,585
23,131,335 14,234,516 36 Increase / (Decrease) of Other Assets
92,661,260 71,356,310 Security deposit 1,032,969 935,600
Preliminary exp 144,321,906 80,342,846
32 Other expenses
Branch adjustment 58,215,272 1,064,443,949
Security and Cleaning 18,129,567 13,510,554
Suspense 890,089 29,642,795
Entertainment-Office and AGM 10,764,606 7,910,403
Others 306,621,900 120,285,163
Business Promotion Expenses 15,103,476 16,998,349
511,082,136 1,295,650,353
Car Expenses 37,505,274 26,711,384
Books and Periodicals 631,020 401,831 784,568,217 (965,975,572)
Subscription and Donation 25,094,556 8,913,139
37 Increase / (Decrease) of Other Liabilities
Travelling Expenses 6,509,688 4,944,202
Provision for classified advances 935,932,628 1,117,350,408
Finance charge on leased assets 12,517,926 16,147,793
Provision for Other Assets 8,505,181 8,569,807
Conveyance 2,576,339 2,159,899
Interest suspense 222,480,287 133,711,235
Petrol, Oil and Lubricant 4,333,164 3,738,547 Provision for Superannuation Fund 2,500,000 4,300,000
Training/Seminar 1,621,677 2,141,912 Accrued expenses 3,936,993 5,377,705
Uniforms and Apparels 698,669 649,132 Interest payable on borrowings 9,121,674 846,673
Medical Expenses 797,209 994,209 Accounts payable - Bangladesh Bank (local currency) 1,512,101 4,064,151
Gratuity 17,000,000 14,300,000 Accounts payable - Others 95,355,889 128,401,386
Superannuation Fund 2,700,000 4,300,000 Provision for bonus 287,501 3,457,150
Professional expenses 2,299,871 5,149,590 Unearned income on treasury bills 416,077
Expenses for CIB Report 84,600 77,400 Withholding tax on interest on deposits 64,142,280 48,805,805
Expenses Regarding Credit Card 12,625,345 10,977,545 Provision for Audit Fees 400,000 350,000
Miscellaneous 52,964,278 29,285,842 1,344,590,610 1,455,234,320
223,957,265 169,311,731 (110,643,710) (89,216,476)
116 Annual Report 2007 Annual Report 2007 117

Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007

2007 2006 40 Related Party Disclosures


Taka Taka i) Particulars of Directors of the Bank as on 31 December 2007

38 Earnings per share % of


Sl. Shares
Net profit after tax for the year ended 31 December 2007 1,222,969,037 909,880,783
No. Name of persons Designation Present Address as on
Number of ordinary shares outstanding 22,817,583 15,238,131 31.12.2007

Earnings per share (EPS) in 2007 53.60 59.71 1. Mr. Alamgir Kabir, FCA Chairman 226, Dilu Road,
New Eskaton, Dhaka 0.90%
EPS for the year 2006 is restated in consideration with issue of bonus shares @8% in year 2007

2. Tillaghar Holdings Limited Vice 67, Motijheel C/A,


(represented by Mr. Abdul Hye) Chairman Dhaka-1000 0.44%
39 Audit Committee
Audit committee of the Board of Directors of the bank has been constituted by the Board of Directors in its 3. MK Holdings Limited
231st meeting held on 15 June 2006. The Audit Committee currently consists of the following members; (represented by Mrs. Sultana Kashem) Director 73/C, Gulshan Avenue,
Gulshan, Dhaka-1212 0.37%

Sl No. Name Status with Educational 4. AD Holdings Limited


the committee qualification (represented by Mrs. Farzana Azim) Director House No.51, Block-F,
1) Tillaghar Holdings Limited (represented by Mr. Abdul Hye) Chairman Graduate Road No.9,
Banani Model Town,
2) AD Holdings Limited (represented by Mrs. Farzana Azim) Member M. A. (English)
Dhaka 0.44%
3) MK Holdings Limited (represented by Mrs. Sultana Kashem) Member BBA
5. Bangla Capital Limited
(represented by Mr. Tanveer Harun) Director T.K. Bhaban
During the year 2007, Audit Committee held 4 (four) meetings. In those meetings, internal inspection (11th Floor),
reports on bank's branches were reviewed and suitable decisions were given. The Audit Committee also 13, Kawran Bazar,
prescribed guidelines and gave directives for audit and inspection of branches routinely in order that rules Dhaka-1215 0.15%
and norms of banking are always complied with and lapses, if any, are rectified.
6. Mrs. Rehana Rahman Director House No.10,
Road No.68,
Gulshan-2,
Dhaka-1212 1.23%

7. Mrs. Sirat Monira Director 226, Dilu Road,


(Ground Floor)
New Eskaton,
Dhaka 0.06%

8. Karnafuli Tea Company Limited


(represented by
Mr. Dewan Mustaq Majid) Director 67, Motijheel C/A,
Dhaka -1000 0.02%

9. Mr. Neaz Ahmed Managing Aesthetica Concord,


Director Flat#5A, Plot#17,
Road#65, Gulshan
Dhaka
118 Annual Report 2007 Annual Report 2007 119

Notes to the Financial Statements for the year ended 31 December 2007 Balance Sheet Islami Banking Branches at 31 December, 2007

41 Name of the Directors and the entities in which they had interest as at 31 December 2007 Annexure - A
2007 2006
Sl.
PROPERTY AND ASSETS Taka Taka
No. Name of Directors Designation Entities where they % of
have interest Position Share-
Cash:
holdings In hand (Including Foreign Currencies) 36,640,332 30,114,779
Balance with Bangladesh Bank & Sonali Bank
1. Mr. Alamgir Kabir, FCA Chairman (Including Foreign Currencies) 2,829,597 8,044,867

2. Tillaghar Holdings Limited Vice The Sylhet Tea Co. Limited Director 78.33% 39,469,929 38,159,646
(represented by Mr. Abdul Hye) Chairman Rajangar Tea Co. Limited Director 33.33% Balances with Other Banks and Financial Institutions:
Union Syndicate Limited Director 19.58% In Bangladesh 16,126,420 11,916,618
Star Tea Estate Limited Director 46.77% Outside Bangladesh
16,126,420 11,916,618
3. MK Holdings Limited Rose Corner (Pvt.) Limited Director 25.00%
Money at Call on Short Notice
Director Mutual Real Estate Limited Director 25.00%
Investments including bills
(represented by Mrs. Sultana Kashem)

Bai-Muajjal, Murabaha, Quard against MTDR and Others 1,957,641,032 1,352,576,368


4. AD Holdings Limited Director Mutual Food Products Limited Director 8.93%
Bills Discounted and Purchased 96,072,392 63,123,498
(represented by Mrs. Farzana Azim) Mutual Milk Products Limited Director 10.00%
Mutual Trading Co. Limited Director 6.48% 2,053,713,424 1,415,699,866
Fixed Assets including premises, furniture and fixtures 21,242,252 22,385,807
5. Bangla Capital Limited Director Foremost Securities Limited Managing Director 50.00% Other Assets 3,652,503,205 2,682,398,595
(represented by Mr. Tanveer Harun) Megatrend Limited Managing Director 50.00% Non-banking assets
Total Assets 5,783,055,230 4,170,560,532
6. Mrs. Rehana Rahman Director Bengal Tradeways Limited Managing Director 50.06%
Knitex Dyeing & Printing Ltd Chairman 45.71% LIABILITIES AND CAPITAL
Gitano Apparels Limited Chairman 50.00%
Drip Packaging Limited Director 25.00%
Liabilities
Garmex Limited Chairman 50.00% Borrowings from other banks, financial institutions and agents
Deposit and Other Accounts
7. Mrs. Sirat Monira Director Al-wadeeah current deposits and other accounts, etc. 208,179,221 145,308,919
Bills Payable 45,130,854 22,439,736
8. Karnafuli Tea Company Limited Mudaraba savings deposits 1,171,299,757 1,382,987,017
(represented by Mudaraba term deposits 4,168,083,475 2,515,049,259
Mr. Dewan Mustaq Majid) Director
5,592,693,307 4,065,784,931
Other Liabilities 190,361,923 104,775,601
Total Liabilities 5,783,055,230 4,170,560,532
42 Loans and Advances to Directors and their related concern
OFF-BALANCE SHEET ITEMS
Name of the party Name of Director Related by Nature of transaction Amount Status
Contingent liabilities
in Taka
Acceptances and endorsements 96,908,000 18,369,000
Letters of Guarantee 291,060,901 160,821,361
Bangla German Latex Co. Ltd Mr. Tanveer Harun Director Syndicated term loan 40,187,521 Rescheduled Irrevocable Letters of Credit 306,209,500 229,585,500
Bills for Collection 9,747,953 3,477,735
Bangla German Latex Co. Ltd Mr. Tanveer Harun Director Bank Guarantee 2,000,000 Regular 703,926,354 412,253,596
Other Contingent Liabilities
Monorom Traders Mrs. Farzana Azim Director Bank Guarantee 5,527,387 Regular Value of travellers' cheques on hand
Value of Bangladesh Sanchay Patra on hand

43 Related party/(ies) transaction


As of the date of these financial statements' the bank had no transactions with the related party/(ies) as Other Commitments
Documentary Credits and short term trade-related transitions
defined on the BRPD Circular No.14 issued by the Bangladesh Bank on 25 June 2003.
Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving facilities
44 Events after the Balance Sheet date
Undrawn formal standby facilities Credit lines and other commitments
The Board of Directors in its 284th board meeting held on 12 March 2008 decided to recommend cash
Claims against the Bank not acknowledged as debt
divident @15% (amounting to Tk. 342,263,745) and stock dividend @25% (amounting to Tk.570,439,575)

that is 1 share for every 4 shares from share premium account subject to approval of the shareholders in the
13th Annual General Meeting. Total Off-Balance Sheet items including contingent liabilities 703,926,354 412,253,596
120 Annual Report 2007 Annual Report 2007 121

Profit and Loss Account of Islami Banking Branches for the year ended 31 December, 2007 Statement of tax position as at 31st December, 2007

Annexure - A

Annexure B

Appeal to High Court

Appeal to High Court


2007 2006
Taka Taka

Present

Settled

Settled

Settled

Settled

Settled

Settled

Settled

Settled

Settled
status
Income from Investment 667,528,205 369,982,899
Profit paid on Deposits & Borrowings etc. (459,777,203) (250,101,956)
Net investment income 207,751,002 119,880,943


429,754
(7,522,416)

(30,197,414)

(37,290,076)
(Shortage) of
Tax paid
Commission, Exchange & Brokerage 19,699,269 11,619,030

Excess/
Other Operating Income 12,088,917 11,058,083
Total Operating Income (A) 239,539,188 142,558,056

Salary and Allowances 28,046,057 18,184,364

(8,980,811)

(13,534,700)

(31,391,434)

9,314,167

14,621,488

(37,327,477)

(43,466,928)

41,315,910

(8,371,017)

51,139,778

(168,994,743)

(195,675,767)
(Shortage) of
provision
Rent, Taxes, Insurance, Lighting etc. 14,849,255 7,273,581

Excess/
Postage, Stamp, Telegram & Telephone 3,957,327 2,993,539
Stationery, Printing, Advertisement 1,479,943 1,088,343
Depreciation on and repairs to Bank's property 4,478,528 3,627,828
Other expenses 9,430,968 14,025,548
Total Operating Expenses (B) 62,242,078 47,193,203

12,238,230

34,012,284

42,494,020

75,685,833

99,878,512

168,819,477

225,452,928

258,021,090

256,314,771

492,135,222

882,994,743

2,548,047,110
Tax paid
Profit/(Loss) before Provision (C=A-B) 177,297,110 95,364,853

Provisions
Provision for Loans and Advances 21,325,000 14,581,000
Provision for Off-Balance Sheet Exposures 3,520,000

12,238,230

41,534,700

72,691,434

75,685,833

99,878,512

168,819,477

225,452,928

258,021,090

255,885,017

492,135,222

882,994,743

2,585,337,186
assessment
Tax as per
Provision for diminution in value of investment

order
Other Provisions
Total Provision (D) 24,845,000 14,581,000
Profit/(Loss) before Taxes (C-D) 152,452,110 80,783,853

Tax provision

3,257,419

28,000,000

41,300,000

85,000,000

114,500,000

131,492,000

181,986,000

299,337,000

247,514,000

543,275,000

714,000,000

2,389,661,419
accounts
as per

19971998

19981999

19992000

20002001

20012002

20022003

20032004

20042005

20052006

20062007

20072008
Assessment
year
Accounting

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006
year
122 Annual Report 2007 Annual Report 2007 123

Highlights on the overall activites of the bank for the year ended 31 December 2007
Southeast Bank Limited
Registered Office
1, Dilkusha C/A (3rd Floor), Dhaka -1000

Annexure - C
Notice of the 13th Annual General Meeting
SL. Particulars 2007 2006 Notice is hereby given to all members of Southeast Bank Limited that the 13th Annual General Meeting of the
No. (Taka) (Taka) Shareholders of the Company will be held on April 28, 2008 at 10.00 a.m. at Hall of Fame, Bangladesh-
China Friendship Conference Centre, Agargaon, Sher-E-Bangla Nagar, Dhaka - 1207 to transact the following
1 Paid up Capital 2,281,758,300 2,112,739,200 business and adopt necessary resolutions:
2 Total Capital (core+suplementary) 6,468,361,219 4,940,916,000
AGENDA
3 Capital surplus deficit 1,490,616,809 1,074,478,740
1. To receive, consider and adopt the Profit and Loss Accounts of the Company for the year ended on 31st
4 Total Assets 64,370,690,040 53,706,124,795 December, 2007 and the Balance Sheet as at that date together with the Reports of the Board and the
Auditors thereon.
5 Total Deposits 55,474,048,109 46,056,183,240
2. To declare dividend for the financial year ended 31st December 2007.
6 Total Loans and Advances 48,164,604,150 41,147,282,000
3. To elect / re-elect Directors in place of those who shall retire in accordance with law/rules.
7 Total Contingent Liabilities and Commitments 21,670,608,579 23,812,293,630
4. To appoint Auditors for the term until the next Annual General Meeting and fix their remuneration.
8 Credit Deposit Ratio (%) 86.82% 89.34%
5. To transact any other related business with the permission of the Chair.
9 Percentage of classified loans against total
loans and advances 3.77% 3.97% All Members are requested to attend the meeting on the date, time and place mentioned above.

10 Profit after tax and provision 1,222,969,037 909,880,783

11 Amount of classified loans during current year 1,813,938,231 1,631,786,528 By order of the Board
12 Provisions kept against classified loan 1,075,932,628 1,117,350,408

13 Provision surplus / deficit 5,953,865 2,188,909

14 Cost of Fund 9.40% 9.43%

15 Interest earning Assets 55,806,108,329 46,488,844,133 Dated: April 07, 2008 Muhammad Shahjahan
Senior Executive Vice President
16 Non-interest earning Assets 8,564,581,710 7,217,280,662
& Company Secretary
17 Return on Investment (ROI) 19.90% 18.42%

18 Return on Assets (ROA) 1.90% 1.66% NOTES :


19 Incomes from Investment 956,800,823 439,218,094 a) The Record Date in lieu of book closure for the purpose was on April 03, 2008
20 Earning per Share 53.60 59.71 b) Any member of the Company entitled to attend and vote at the general meeting may appoint a proxy to
attend and vote on his/her behalf. Such proxy except for a Corporation must also be a member of the
21 Net income per Share 53.60 43.07 Company. An Attorney of a member need not himself/herself be a member.
c) The instrument appointing a Proxy or the Power of Attorney duly signed by the Member and stamped
22 Price Earning Ratio 10.70 4.78
with requisite stamp duty must be submitted at the Registered Office of the Company at least 48 hours
before the meeting, i.e. latest by 10:00 a.m. on April 26, 2008.
d) Attendance of the Shareholder/Attorney/Proxy shall be recorded up to 11.00 a.m. at the entrance of the
venue. Attendance slip has to be submitted at the Registration Counter duly signed. The signature must
agree with the recorded signature.
e) Annual Report containing, among other papers, this Notice of the 13th Annual General Meeting,
Attendance Slip and Proxy Form are being sent to all members by post. The members may also collect
Proxy Form from the Registered Office of the Company.
f) Members are requested to notify change of address, if any, to the Depository Participant well in time.
124 Annual Report 2006 Annual Report 2006 125

Branches of Southeast Bank Limited Branches of Southeast Bank Limited

Principal Branch Chouhatta Branch Bandar Bazar Branch (Islamic Banking) Shyamoli Branch
1, Dilkusha Commercial Area, Dhaka-1000 Manru Shopping City Karimullah Market (1st Floor) ASA Tower (2nd Floor)
Tel : 9550081, 9567271-2, 9563101 Plot # 4953/4943 (1st Floor) Bandar Bazar, Sylhet 23/3 & 23/14, Khilji Road, Shyamoli
Fax : 88-02-9551575 Chouhatta Mirboxtola Road Tel : 0821-810322, 0821-812246 Mohammadpur, Dhaka
Chouhatta, Sylhet Fax : 0821-816111 Tel : 8123551, 8112250, 8128678, 8112227
Agrabad Branch Tel : 0821-720726, 0821-720277 Fax : 88-02-8120687
Jahan Building Fax : 88-0821-720276
59, Agrabad Commercial Area, Chittagong Banani Branch Joypara Branch (Rural)
Tel : 031-713097-8, 031-713094-5, 031-721151-3 Plot # 71, Block # B Begum Aysha Shopping Complex (1st Floor)
Fax : 88-031-713096 Karwan Bazar Branch Kemal Ataturk Avenue
Pragati - RPR Centre Holding # 222, Joypara Pourasava
Banani, Dhaka Dohar, Dhaka
Khatunganj Branch 20-21, Karwan Bazar (1st Floor)
Tel : 9860363, 8861697, 8859518, 8859987, 8861629 Tel : 06223-56040
410/411, Khatunganj, Chittagong Dhaka-1215 Fax : 06223-56040
Fax : 88-02-8861960
Tel : 031-2863594, 031-621934 Tel : 9136112, 9139276-8
031-620166-7, 031-620516 Fax : 88-02-9136510 Kakrail Branch
Fax : 88-031-62 05 17 Kulaura Branch (Rural)
Green House, Juri Road Musafir Tower (2nd Floor)
Halishahar Branch 90, Kakrail, Dhaka
Laldighirpaar Branch House # 02 (1st Floor) Kulaura, Moulvi Bazar
Tel : 9348551, 9330860, 9338934, 9330798
1778/1779, New Market, Sylhet Road # 03, Lane # 03 Tel : 08624-56208 Fax : 88-02-9348559
Tel : 0821-710955, 0821-715382, 0821-710218 Block-K, Halishahar Housing Estate Fax : 08624-56208
Fax : 88-0821-710102 Halishahar, Chittagong Madhabdi Branch (Rural)
Tel : 031-716826, 031-2526183, 031-2526184 Feni Branch Madhabdi Pauroshava
Imamganj Branch Surma Sadan (1st and 2nd Floor) Narshingdi
Fax : 88-031-727949
Bhuiyan Market Tel : 06257-56125-6
163/2, Mitford Road, Dhaka 176, 177 and 178 Trunk Road, Feni
Shahjalal Uposhahar Branch Tel : 0331-62884 Fax : 06257-56127
Tel : 7314801, 7316423, 7318567,
Fax : 88-02-7316644 Plot # 07, Block # D Fax : 0331-62884 Ext.-102
Main Road, Shahjalal Uposhahar Rangpur Branch
Sylhet RDRS Complex
Bangshal Branch Motijheel Branch (Islamic Banking)
Tel : 0821-711820, 0821-811655, 0821-810961 9416, Jail Road
14/3, North South Road, Dhaka 125, Motijheel C/A (1st Floor)
Fax : 88-0821-816007 Radhaballab, Rangpur
Tel : 7121248, 7121251, 9567163, 7176116, Dhaka-1000
7176117 Tel : 0521-64672, 64673, 64778, 64779
Tel : 9567286, 9567202, 9567303, 9567262 Fax : 0521-64780
Fax : 88-02-9567164 New Eskaton Branch Fax : 88-02-9567701
Chowdhury Centre Ashulia Branch (Rural)
Jubilee Road Branch 23/Ka, New Eskaton Road
Haji Golam Rasul Market CDA Avenue Branch (Islamic Banking) Helim Shopping Complex
(1st Floor), P.S. : Ramna Ashulia, Dhaka
96, Jubilee Road, Chittagong Ali Villa, 1640/1861 (New), CDA Avenue
Dhaka-1000 Tel : 7788440, 7788420
Tel : 031-611712-5, 031-635245, 031-635246 Tel : 9360953, 9340001, 9330176, 9340796 Panchliash, Chittagong
Fax : 88-031-611716 Tel : 031-652150, 031-654875 Fax : 88-02-7788441
Fax : 88-02-9362177
Fax : 031-654875 Ext. 300
Moulvibazar Branch Bashurhat Branch (Rural)
Jarif Tower New Elephant Road Branch Syeed Mansion
Kazi Bhaban Hetimgonj Branch (Rural) Holding # 75, Main Road
199/2, M. Saifur Rahman Road Khoyruganj Jame Masjid Market Complex (1st Floor)
Moulvibazar 39, New Elephant Road Bashurhat Pauroshava
Tel : 0861-53727-9 (1st and 2nd Floor), Dhaka-1205 Hetimgonj Chowrasta, Golapgonj, Sylhet Companyganj, Noakhali
Fax : 88-0861-53730 Tel : 9674588, 9674327, 9674324-5 Tel : 0821-841472, 0821-841471 Tel : 03223-56415, 56461
Fax : 88-02-9674326 Fax : 0821-841473 Fax : 03223-56430
Gulshan Branch
House # 82 CES (F) 1 Agargaon Branch Aganagar Branch (Rural) Chowmuhani Branch (Rural)
Gulshan Avenue, Dhaka Plot # E-4/B (1st Floor) Hassan Market (1st Floor) Hossain Market
Tel : 9883491, 9883401-5, 9883492 Agargaon Administrative Area Holding # 276-284, D. B Road
Keranigonj, Dhaka
Fax : 88-02-9883495 Sher-e-Bangla Nagar Chowmuhani Pauroshava
Tel : 7772516, 7761133 Begumganj, Noakhali
Dhaka-1207 Fax : 88-02-7761155
Khulna Branch Tel : 9132747, 9134247 Tel : 0321-53534, 0321-53535
155, Sir Iqbal Road, Khulna Fax : 88-02-9132704 Fax : 0321-54018
Tel : 041-730606, 041-731406, 041-731306, 041-731606 Corporate Branch
Fax : 88-041-731506 Chhagalnaiya Branch (Islamic Banking)
Eunoos Trade Centre (Ground Floor) Pahartali Branch
52-53, Dilkusha C/A Hajrat Taiyabia Complex
Mir Shopping Complex (1st Floor)
Dhanmondi Branch Chhagalnaiya Bazar, Feni Dhaka-1000 Holing # 801 (New)
House # 23 (New), Road # 16 (New)/27 (Old) Tel : 9567764, 9551444, 9571424, 9554447 D. T Road, Alongkar Mour
Tel : 03322-78302 Pahartali, Chittagong
Dhanmondi R/A, Dhaka Fax : 88-02-9567764 Ext.-200
Tel : 8126787, 8122474, 8126785-6 Fax : 03322-78302 Tel : 031-2771001, 031-2771002-4
Fax : 88-02-8122420 Fax : 031-2771005
Cox's Bazar Branch (Islamic Banking) Pathantula Branch
Uttara Branch Asha Shopping Complex Holding # 1227/1228 (New) Narayanganj Branch
House # 1, Road # 11, Sector # 1 430-431, Bazar Ghata (1st Floor) and 2406/2407 (Old), Pathantula 26-29, S. M Maleh Road
Uttara, Dhaka-1230 Cox's Bazar Sylhet Sadar, Sylhet Tanbazar, Narayanganj
Tel : 8923680, 8916538, 8922538 Tel : 0341-63406, 0341-51053 Tel : 0821-724545 Tel : 7648200, 7648201, 7648202, 7648203
Fax : 88-02-8918689 Fax : 0341-64742 Fax : 0821-724300 Fax : 88-02-7634331
Southeast Bank Limited
1, Dilkusha Commercial Area, Dhaka-1000

Shareholders' Notes PROXY FORM

I/We of

being a member of Southeast Bank Limited, do hereby

appoint Mr./Mrs. of
as my/our proxy to attend and vote on my/our behalf at the 13th Annual General Meeting of the company to be
held on April 28, 2008 and at any adjournment thereof.

As witness my/our hand this day of 2008.

Signature of Shareholder(s) Signature of PROXY

No. of Shares held


Revenue
Folio No.
Stamp
or Taka 8.00
BO ID No.

Note: i. Signature must agree with the recorded signature.


ii. A Member entitled to attend and vote at the 13th AGM may appoint a proxy to attend and vote on his/her
behalf. The Proxy Form duly stamped must be deposited at the Registered Office of the Company at least
48 hours before the time set for the Meeting, i.e. 10:00 a.m. of April 26, 2008.

Signature Verified

Proxy Regn. No Authorized Signatory

Southeast Bank Limited


1, Dilkusha Commercial Area, Dhaka-1000

ATTENDANCE SLIP
I/We hereby record my/our attendance at the 13th AGM being held today, the April 28, 2008 at 10:00 a.m. at Hall
of Fame, Bangladesh-China Friendship Conference Centre, Agargaon, Sher-E-Bangla Nagar, Dhaka-1207.

Name of the Shareholder(s)


(in Block Letter)
No. of Shares
Folio No.
BO ID No.
Name of the Proxy (if any)

Signature of Shareholder(s)/Proxy Signature verified by


REQUEST : Please bring your copy of Annual Report to the Meeting.
IMPORTANT : To facilitate registration formalities at the Meeting Place, shareholder(s) are requested to
bring the attendance slip duly filled in.
N.B. : General Meeting can only be attended by the honorable shareholders or properly constituted
Proxy/Attorney. Therefore, any friend or children accompanying the honorable shareholders
or proxies can not be allowed into the Meeting.