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Agrani Bank: Annual Report 2018

IM Insights
By IM Insights
1 month ago
Agrani Bank: Annual Report 2018

Islam, Islamic banking, Mudaraba, Murabaha, Salam, Shariah, Waqf, Zakat, Credit Risk, Net Assets, Participation, Provision, Receivables, Reserves, Sales, Specific Provision

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  1. About this report At Agrani Bank Limited (ABL), we recognize that transparency is a key to stakeholder engagement and through the timely reporting of both financial and non-financial performance, we share how we create practice value for our stakeholders. Besides this report, more information on ABL can be accessed at www.agranibank.org. Hard copies of the report have been printed on sustainably-sourced.
  2. Letter of Transmittal All shareholders Registrar of Joint Stock Companies & Firms Securities and Exchange Commission Bangladesh Bank, Dhaka. Sub: Annual Report for the year ended on 31 December, 2018. Dear Sir(s): We are pleased to enclose a copy of the Annual Report 2018 that contains the Audited Financial Statements of Agrani Bank Limited and its six Subsidiaries i.e. Agrani Equity & Investment Limited, Agrani SME Financing Company Limited, Agrani Exchange House Private Limited, Singapore, Agrani Remittance House Sdn. Bhd., Malaysia, Agrani Remittance House Canada Inc. and Agrani Exchange Company (Australia) Pty. Limited for your kind information and record. Sincerely, Mohammad Shams-Ul Islam Managing Director & CEO
  3. Notice of the 12th Annual General Meeting Notice is hereby given to all Shareholders of Agrani Bank Limited that the 12th Annual General Meeting of the Company will be held on 22 August 2019 at 1 .30 pm at Board Room of Agrani Bank Limited, Head Office, Dhaka to transact the following business and adopt necessary resolutions: Agenda i) To apprise the minutes of the 11th Annual General Meeting held on 26 May 2018; ii) To receive, consider and adopt the Audited Financial Statements of the Bank for the year ended on 31 December, 2018 together with the Auditors’ Report and the Report of the Directors’ thereon; iii) To elect /re-elect Directors; iv) To appoint Auditors for 2019 and to fix their remuneration; and v) To transact any other related business with the permission of the Chair. By Order of the Board of Directors 06 August, 2019 Khandaker Sajedul Haque Company Secretary
  4. Contents One step for ward to the excellance Management Discussion and Analysis 65-76 Signing of Accounts 2018 66 Performance Review 2018 67-69 Comparative Scenario 70-71 Graphical Presentation 72-73 Segment Analysis 74-75 Future Outlook 76 Directors ’ Report F E AT U R E S 6-64 About Agrani Bank Limited 6 What We Do 7 Where We Operate 8 Vision, Mission, Motto, Core Values 9 Business Ethics 10-11 Code of Conduct 12 Strategic Objectives 13 Corporate Information 14 Corporate Organogram 15 Key Indicators of ABL 16-17 Chairmen and Managing Directors 18 Bangabandhu Corner 19 How we performed in 2018 20 Board of Directors 21 Directors Profile 22-31 Shareholders Information 32 Committees of the Board 33 Management Team 34-37 Awards and Accolades 38 Photo Gallery 39-45 Five Years Performance 46-47 Graphical Presentation 48-51 Horizontal Analysis 52-53 Vertical Analysis 54-55 Credit Rating 56 Chairman’s Statement 57-58 Message for Managing Director and CEO 59- 64 77-118 Global Economy 78-79 Bangladesh Economy 80-83 Business Performance Review 84-103 Directors’ Report in Bangla 104-118 Integrated Report 119-168 Business Model 120 Products and Services 121-122 Business Strategy 123 Corporate Governance 124-138 Board Audit Committee 139-142 Internal Control and Compliance 143-148 Risk Management 149-157 Disclosure under Basel-III 157-168 Sustainability Report 169-183 Message from MD & CEO 171 Creating Sustainable Value through Banking Operation 172 Sustainability Approach 173-180 Value Added Statement 181 Economic Value Added (EVA) Statement 182-183
  5. Accounts of Subsidiary Companies Agrani Equity & Investment Ltd. 341-347 340-383 339-389 Agrani SME Financing Company Ltd. 349-357 Agrani Exchange House Private Ltd., Singapore 359-366 Agrani Remittance House Sdn. Bhd., Malaysia 368-378 Agrani Remittance House Canada Inc 380-381 Agrani Exchange Company (Australia) Pty. Ltd. 383 Sustainability Report 184-208 Green Banking 184-187 Corporate Social Responsibility (CSR) 188-192 Human Resource Management & Development 193-199 Automation and Digitalization 200-203 Stakeholder Engagement 204-207 Sustainability Scorecard 208 Financials 209-339 Independent Auditors’ Report 210-212 Consolidated Balance Sheet 213 Consolidated Off Balance Sheet Items 214 Consolidated Profit and Loss Account 215 Consolidated Statement of Changes in Equity 216 Consolidated Cash Flow Statement 217 Consolidated Liquidity Statement 218 Balance Sheet (Solo) 219 Off Balance Sheet Items (Solo) 220 Profit and Loss Account (Solo) 221 Statement of Changes in Equity (Solo) 222 Cash Flow Statement (Solo) 223 Liquidity Statement (Solo) 224 Notes to the Financial Statements 225-339 Agrani Bank Network 384-399 400-404 Head Office Divisions 385 Name and Address of Circles 386 Name of Zones with Branches 387 Corporate Branches 388 Authorised Dealer Branches 389-391 Zonewise Branches 392-399 Standard Accounting Disclosure Checklist 400-404
  6. About Agrani Bank Limited What We Are Agrani Bank Limited (ABL) was incorporated as a State-owned Commercial Bank on 17 May 2007 under the Companies Act 1994. Agrani Bank emerged as a Nationalized Commercial Bank following the Bangladesh Banks (Nationalization) Order 1972 vide President’s Order No. 26 of 1972 under which former Habib Bank Limited and Commerce Bank Limited and renamed as Agrani Bank . On a going concern basis ABL took over the business, assets, liabilities, rights and obligations of Agrani Bank through a vendor’s agreement signed on 15 November 2007 between the Ministry of Finance of the People’s Republic of Bangladesh and the Board of Directors of ABL with retrospective effect from 1 July 2007. ABL has been able to create 953 branches widely distributed and is a technology pioneer, with all branches providing real time online banking. We also have five subsidiaries: a merchant bank, a small and medium sized enterprises (SMEs) financing company and remittance house in Singapore, Malaysia and Canada. At ABL, we believe in being a responsible financial services provider and we are committed to making a difference in the lives of our stakeholders and nation of the country. Just as we are dedicated to helping our customers manage their finances prudently and grow their businesses, ABL is steadfast in our support of socio-economic development of Bangladesh.
  7. What Our Mandate Is ABL provides its corporate , SME and retail clients with a wide range of products or services such as extensive deposit and loan options that include Islamic banking, foreign currency and pension schemes. Our offering includes personal financial services, business banking, commercial and corporate banking, transaction banking, corporate finance, capital market activities, treasury services and clearing services. Through our subsidiaries, we also provide asset management, venture capital management, SME Finance and Foreign Remittance services.
  8. Where We Operate 953 Branches and 64 offices all over Bangladesh Rajshahi Branch -144 Office -9 Rangpur Branch -66 Office -6 Mymensingh Branch -89 Office -7 Sylhet Branch -60 Office -4 Dhaka Branch -202 Office -15 Chattogram Branch -194 Office -10 Branch -138 Khulna Office -8 Branch -60 Barishal Office -5 Our Subsidiaries 4 subsidiaries in Singapore , Malayasia, Canada and Australia 2 subsidiaries in Bangladesh
  9. Business Ethics Business Code Agrani Bank Limited is committed to conducting its business ethically and applying appropriate protection standards while dealing with its customers . Honesty and Fairness By honesty ABL means truthfulness, integrity, and trustworthiness; fairness is the quality of being just, equitable, and impartial. Honesty and fairness relate to the general moral attributes of decision makers. At a minimum, businesspeople are expected to follow all applicable laws and regulations. In addition, they should not willfully harm customers, clients, employees, or even other competitors through deception, misrepresentation, or coercion. Although businesspeople often act in their own economic self-interest, ethical business relations should be grounded on the corporate interest, fairness and justice rowers. Human Significance Agrani Bank supports the international human rights as outlined by the UN declaration and convention. No one in the Bank shall in any way cause or contribute to the violation or circumvention of human privileges. Human Capital Agrani Bank is devoted to human capital initiative connecting with milestone training, performance coaching & development, key talent management, balancing of work/ life choice and human capital reviews. Health, Safety and Working Environment Agrani Bank is committed to establishing effective arrangement to identify and eliminate or control all work-related hazards and risks and promote health at work and continuously improve health, safety and working environment. Secrecy Clear, honest and open communication is maintained in Agrani Bank to ensure full accountability but subject to normal business confidentiality. The use of company confidential information before it is made public for personal gain is strictly prohibited and is perceived as a criminal offense. Maintain privacy and secrecy of customer’s information; but at the same time it complies with ‘The Right to Information Act-2009’. Protection of Personal Data Agrani Bank’s processing of personal data shall be subject to care and awareness, which is required according to laws and regulation and relevant for information that might be sensitive, regardless of the data refer to customers, officials or others.
  10. Morality Protection Choice Environment Business law Honesty and Fairness Safety Human Significance Reliability Business Code Intellectual Property Money Laundering Fraud , Theft or Illegal Activities Employees shall be alert and vigilant with respect to waste, abuse, frauds, thefts or illegal activity committed within the office. If any such activity comes to the attention of an employee, the employee must immediately report the same to the relevant Manager, Zonal Head, Executive-in-Charge/GM/ GH and to the Audit Division, who will arrange for appropriate follow-up action. Failure to report any such activity will be subject to disciplinary action. Intellectual Property Intellectual property such as know-how, methodology, concepts and ideas are important to Agrani Bank’s successes in the market. Unless otherwise specified by law or orders from other public authorities, no employee shall make disclosure of corporate secret or other information to unauthorized persons. Nature and the Environment Agrani Bank is very much aware of the urgency of environmental protection, by minimizing environmental damages and by developing, promoting and utilizing environment-friendly technology. Accounting Agrani Bank has the highest concern for truth, completeness and accuracy in the recording of business transactions in full compliance with applicable Bangladesh laws & regulations, financial reporting standards, good accounting practices as well as maintaining valid authorization and ensuring complete documentation. The annual accounts and interim accounts shall be in accordance with the law, BFRS and good accounting practices. ABL strives to maintain accuracy and transparency in financial reporting. Contest Agrani Bank is committed to staying over and above the prevailing market competition through constant innovation of technology based products and efficiency enhancement; being responsive to the requirements of our customers and partners. Corruption and Bribery Agrani Bank is firmly opposed to all forms of corruption including bribery and malpractices. Bribery is fundamentally inconsistent with the Bank’s values; any direct and indirect promise of payment to gain any perceived personal advantage is totally unacceptable. Money Laundering The Bank has set its priority not to become implicated, in any way, with individuals or firms involved in criminal activities and money laundering and employees are expected to exercise maximum caution in this regard. Agrani Bank is firmly opposed to all forms of money laundering and takes steps to prevent its financial transactions from being used by others to launder money.
  11. Code Of Conduct Transparency and Disclosure : The Bank shall deal with customers in a continuously fair, equitable and professional manner. Suitability: The Bank shall gather sufficient information from the customer to ensure that the product or service meets his financial situation and needs. Awareness and Education: The Bank shall provide customers with (i) a list of their rights and responsibilities containing clear information on customer’s protection, (ii) Key Fact Statement containing ample key information on the conditions, benefits and risks of products or services, as well as a detailed list of the fees and charges collected by the Bank . Confidentiality (Secrecy and Data Protection): The Bank shall protect the customers’ personal and financial information in compliance with Banking Secrecy Law and without prejudice to Anti-Money Laundering and Counter Financing law. Complaints Handling: An efficient mechanism is developed enabling customers to submit their claims and guaranteeing the fair and timely follow-up and outcome thereof. Ensuring the Integrity of Records: Internal accounting information and customer records must be accurate and maintained with reliability and integrity. Transactions must be reflected in an accurate and timely manner. Providing Candor in Dealing with Auditors, Examiners, and Legal Counsel: All employees should be required to respond honestly and candidly when dealing with internal auditors, independent auditors and regulators. Avoiding Self-Dealings and Acceptance of Gifts or Favors: All employees are prohibited from seeking or accepting anything of value (including services, discounts or entertainment) from clients, suppliers or anyone else in return for any business (mainly granting loans), service or restricted information of the Bank Observing Applicable Laws: All employees must be aware of all applicable laws and regulations. Involving Internal Auditor in Monitoring Corporate Code of Conduct or Ethics Policy: ABL has a set of audit program to monitor the operation of internal controls against self-dealing, conflict of interests and other violations of the Code of Conduct, identify weaknesses, and ensure corrective action is taken. 12 Annual Report 2018
  12. Strategic Objectives A Winning at least 7 .00 percent share of deposits and 5.50 percent share of loans and advances of Bangladeshi market B Leaving behind industry players in rendering inovation & quality customer service Strengthening the Bank’s brand recognition A D B E C F Achieving technological leadership among the peer group by choosing cutting edge software and digital & automated solution C D Strengthening R & D capability for launching innovative products for customers’ satisfaction E Contributing towards the economic well- being of the country by providing Remittance service, SME and rural credit to the doorstep of the people F 13
  13. CORPORATE INFORMATION Company Information Name Legal Status Registered Office Date of Incorporation Date of Commencement of Business Tax Identification Number (TIN) VAT Registration Number Business Identification Number (BIN) Chairman Managing Director & CEO Company Secretary Share Capital Authorised Capital Paid up Capital Face Value per Share Shareholding Pattern : : : : : : : : : : : Agrani Bank Limited Public Limited Company (as per the Bank Companies Act 1991) 9/D Dilkusha, Dhaka 1000, Bangladesh 17 May 2007 under the Companies Act 1994 17 May 2007 395478266223 19011031730 000000221 Dr. Zaid Bakht Mohammad Shams-Ul Islam Khandaker Sajedul Haque : Tk. 2,500.00 Crore : Tk. 2,072.29 Crore : Tk.100 : 100 percent share owned by Government of the Peoples’ Republic of Bangladesh Credit Rating Rating Mode Govt. Support Stand Alone Service Network Branch Circle Office Zonal Office Corporate Branch Authorised Dealer (AD) Branch Foreign Correspondent Islami Banking Unit Agent Banking Remittance Only Points 953 11 53 34 42 302 5 200 200 Long Term AAA A Short Term ST-1 ST-2 Outlook Stable Stable Subsidiaries Domestic Agrani Equity & Investment Limited Agrani SME Financing Company Limited-52 branches Overseas Agrani Exchange House Private Limited, Singapore - 4 branches Agrani Remittance House Sdn. Bhd., Malaysia -6 branches Agrani Remittance House Canada Inc. Agrani Exchange Company(Australia) Pty. Limited. Auditors ACNABIN- Chartered Accountants MABS & J Partners Chartered Accountants Contact Address Phone +88-02-9566160-9, +88-02-9566153-4, +88-02-9566074-5 Fax : +88-02-9562346, +88-02-9563662, +88-02-9563658, E-mail :agrani@agranibank.org, info@agranibank.org SWIFT Code :AGBKBDDH, Web: www.agranibank.org
  14. CORPORATE ORGANOGRAM Board of Directors Risk Management Committee Executive Committee Audit Committee Managing Director & CEO Deputy Deputy Managing Managing Director-1 Director-1 Deputy Deputy Managing Managing Director-2 Director-2 Number of General Manager-21 Deputy Managing Director-3 General Manager Deputy General Manager Number of Assistant General Manager-303 Number of Senior Principal Officer-909 Number of Principal Officer-1818 Senior Principal Officer Number of Clerical- 1486 Deputy Deputy Managing Managing Director-4 Director-4 Number of Deputy General Manager-106 Assistant General Manager Principal Officer Senior Officer Clerical Non Clerical Total size of officials and workers as per organogram-21,038 Officer/ Equivalent Number of Non Clerical-2507 Number of Senior Officer-4745 Number of Officer/ Equivalent-9000
  15. Key Indicators of ABL From 1972 to 2018 BDT in Crore Year Deposits Foreign Operating Net Loans & Classified Import Export Remittance Profit Profit Advances Loans Man- No.of Authorised Paid up Equity power Branch Capital Capital Total Assets 1972 96 77 1 1 2267 249 5 1 1 137 1973 125 101 3 3 2363 283 5 3 4 213 1974 137 121 77 37 3 3 3517 289 5 3 5 270 1975 141 126 60 39 4 4 3561 305 5 3 6 310 1976 182 152 76 90 5 5 3770 351 5 3 6 354 1977 248 206 190 100 5 5 5074 510 5 3 6 480 1978 318 251 208 102 5 5 6672 602 5 3 7 560 1979 380 295 279 131 5 5 6981 690 5 3 7 769 1980 470 361 282 133 5 5 7901 775 5 3 7 853 1981 571 394 284 141 11 7 7 7460 775 5 3 7 950 1982 707 464 315 231 31 9 9 9334 776 5 3 7 1040 1983 1027 662 502 289 86 12 12 10062 777 5 3 7 1471 1984 1441 1031 863 470 182 17 17 10523 789 15 3.5 7 2309 1985 1742 1286 891 538 316 32 32 11128 808 15 3.5 10 2576 1986 1967 1466 901 509 430 28 28 11196 825 15 3.5 10 2642 1987 2381 1650 1162 593 651 18 18 11237 851 15 3.5 11 3200 1988 2625 1916 1106 735 757 13 13 12605 862 15 3.5 12 3525 1989 3060 2248 660 1746 822 780 1 1 13213 870 15 3.5 12 4644 1990 3187 2193 736 1285 1135 906 2 2 13152 881 800 106 116 4572 1991 3667 2458 867 1277 1218 1183 0.02 0.02 13154 889 800 106 116 5362 1992 4176 2650 930 1803 1724 1611 0.04 0.04 13143 891 800 106 116 5765 1993 4512 3060 1230 2163 2129 1846 0.64 0.64 13915 895 800 248 278 6420 1994 5250 3767 1292 3234 2853 2115 1 1 13981 899 800 248 278 7911 1995 6344 4650 1620 4058 3590 2026 1 1 13789 903 800 248 278 9723 16 Annual Report 2018 9
  16. Key Indicators of ABL From 1972 to 2018 BDT in Crore Year Deposits Foreign Operating Net Loans & Classified Import Export Remittance Profit Profit Advances Loans Man- No.of Authorised Paid up Equity power Branch Capital Capital Total Assets 1996 6713 4861 2023 2948 3510 2160 1 1 13952 903 800 248 279 9470 1997 7301 5101 2433 2832 3520 2517 1 1 13486 903 800 248 279 10422 1998 8278 5378 2846 3053 3521 2675 1 1 13530 903 800 248 280 11004 1999 9079 5837 3005 2597 3472 2795 1 1 13341 903 800 248 316 11939 2000 10053 7701 2937 3271 4202 3219 59 2 13320 903 800 248 325 12326 2001 10671 8002 3000 2634 3743 3371 24 0.20 13058 901 800 248 333 13107 2002 11547 8896 3144 3122 3458 3172 30 1.50 12901 891 800 248 340 14445 2003 11743 8931 2641 2897 3575 2743 26 0.14 12514 872 800 248 340 14144 2004 12538 9592 2692 3591 4197 3684 (75) (2172) 12208 870 800 248 -1890 15138 2005 13084 9940 2814 5119 4171 3457 214 163 11938 864 800 248 -1726 15553 2006 12892 10587 2782 11592 5171 3930 358 194 11793 866 800 248 -1532 15408 2007 13592 11849 3179 11343 4892 4281 526 316 11345 866 800 248 334 18628 2008 14681 11336 2549 10952 4954 5269 633 265 10988 867 800 248 642 18733 2009 16628 12224 2374 7753 4461 5587 644 111 11443 867 800 497 1144 21179 2010 20633 16326 2102 16792 6443 7097 1086 352 11900 867 800 547 1572 26485 2011 25221 19409 2149 26877 9310 8682 1474 250 12085 876 1000 901 2594 34882 2012 29243 21266 5380 16963 8838 11681 1007 (1862) 13890 889 2500 991 717 37872 2013 34868 20297 3580 15947 7845 12657 1064 905 14005 899 2500 2072 3564 44416 2014 38392 23509 3966 15741 8345 12980 1074 199 13414 921 2500 2072 3957 49487 2015 43998 24480 4640 10917 7543 13204 878 65 13396 930 2500 2072 4468 56535 2016 49405 26587 6804 10153 7396 12022 555 (697) 12672 935 2500 2072 3658 62357 2017 53035 31912 5570 13267 7059 10605 813 676 12798 941 2500 2072 4073 67392 2018 62193 39575 6993 23551 8280 12680 832 104 12656 953 2500 2072 4159 78915 17
  17. CHAIRMEN AND MANAGING DIRECTORS SINCE INCEPTION Chairmen of the Board Managing Directors AGRANI BANK AGRANI BANK M . Fazlur Rahman M. Fazlur Rahman 1972 to 2018 02-01-1972 to 31-03-1981 Abdur Rahman Biswas 01-04-1981 to 04-05-1982 Prof. M. Safiullah 05-05-1982 to 04-05-1985 M. Matiur Rahman 05-05-1985 to 16-04-1986 Mir Ataul Haque Khandker 17-04-1986 to 21-01-1987 Imamuddin Ahmad Chaudhury 22-01-1987 to 14-12-1990 Mohd. Faizullah 15-12-1990 to 05-10-1991 L.K. Siddiqi 06-10-1991 to 22-09-1993 M. Hafizuddin Khan(Acting) 23-09-1993 to 03-01-1994 Dr. Fashiuddin Mahtab 04-01-1994 to 31-01-1996 Atauddin Khan 01-02-1996 to 18-07-1996 H. T. Imam 11-08-1996 to 10-08-1998 Md. Matiur Rahman 1972 to 2018 26-03-1972 to 14-07-1982 Lutfar Rahman Sarkar 15-07-1982 to 31-08-1983 Humyun Hamid (Acting) 01-09-1983 to 13-10-1983 Mohammad Hossain 14-10-1983 to 11-04-1987 Humayun Hamid 11-04-1987 to 04-03-1991 Gulam Mohammad (Current Charge) 04-03-1991 to 09-09-1991 Quazi Baharul Islam 09-09-1991 to 30-07-1992 Mustafa Aminur Rashid 30-07-1992 to 30-09-1995 Foyezuddin Ahmed 30-09-1995 to 04-02-1996 A. Q. Siddiqui 04-02-1996 to 03-08-1996 Khondoker Ibrahim Khaled 03-08-1996 to 18-02-1997 Mosharraf Hossain 13-08-1998 to 21-06-2000 12-03-1997 to 28-04-1999 Abdul Hannan A. K. M. Nazmul Haq 22-06-2000 to 25-03-2001 Dr. Sohrabuddin 28-03-2001 to 12-11-2001 M. Ahsanul Haque 14-11-2001 to 12-11-2003 Sayed Mushtak (Acting) 19-11-2003 to 13-01-2004 Md. Fazlur Rahman 14-01-2004 to 26-11-2006 S. M. Jahurul Islam 31-05-1999 to 25-07-1999 M. Enamul Haq Chowdhury 01-08-1999 to 06-01-2000 M. A. Yousoof 06-01-2000 to 10-07-2001 A. S. M. Imdadul Haque 10-07-2001 to 05-09-2004 A. K. M. Asaduzzaman (Current Charge) 06-09-2004 to 01-10-2004 19-12-2006 to 02-04-2007 Syed Abu Naser Bakhtear Ahmed Siddiqur Rahman Choudhury 02-10-2004 to 30-06-2007 23-04-2007 to 30-06-2007 AGRANI BANK LIMITED AGRANI BANK LIMITED Siddiqur Rahman Choudhury 01-07-2007 to 16-09-2009 Dr. Khondoker Bazlul Haque 17-09-2009 to 09-09-2014 Arastoo Khan (Acting) 21-09-2014 to 18-11-2014 Dr. Zaid Bakht 19 -11-2014 to Continued Syed Abu Naser Bakhtear Ahmed 01-07-2007 to 30-09-2007 Dr. Syed Abdul Hamid, FCA (Acting) 01-10-2007 to 14-04-2008 Syed Abu Naser Bakhtear Ahmed 15-04-2008 to 12-04-2010 Dr. Syed Abdul Hamid, FCA 13-04-2010 to 29-06-2016 Mohammad Shams-Ul Islam 24-08-2016 to Continued
  18. Bangabandhu Corner An inspiring initiative to cherish and nurture ‘Bangabandhu’ in our hearts Mohammad Shams-Ul Islam, MD & CEO initiated the noble task of setting up ‘Bangabandhu Corner’ in Agrani Bank Bhaban . 19
  19. How we performed in 2018 Loans & Advances Customer Deposit Tk. 39,575 crore +24.01% Tk. 62,193 crore +17.26% AD Ratio 63.63% +3.46% Net Interest Income Operating Profit Business Performance Tk. 832 crore +2.33% Total Assets Tk. 892 crore +105.06% Import Export Tk. 23,551 crore +77.52% +17.30% Tk. 78,915 crore +17.09% Tk. 8,280 crore Tk. 12,680 crore +19.57% Foreign Remittance
  20. BOARD OF DIRECTORS Dr . Zaid Bakht Chairman Mahmuda Begum Director Sangita Ahmed Director Shameem Ahsan Director Hasina Newaaz Director Prof. Dr. Nitai Chandra Nag Director M. Ashiqul Hoque Chawdhury Director Kashem Humayun Director Md. Ansar Ali Khan Director 21
  21. Directors ’ Profile Appointed as Chairman: 13 November 2014 Re-appointed As Chairman: 13 November 2017 Dr. Zaid Bakht Chairman, Board of Directors Dr. Zaid Bakht was reappointed the chairman of the Board of Directors of Agrani Bank Limited for the 2nd consecutive term on 29 November 2017. Prior to this, he held the chair of the same board from 18 November 2014 to 17 November 2017. Dr. Zaid Bakht is a renowned development economist and has vast experience in designing, conducting and guiding research projects in the field of development economics with focus on trade, industry, private sector, SME development, macroeconomic management and physical infrastructure related issues. Dr. Bakht also has experience in national level policy formulation in the field of Industrial Policy, National Income Accounting Practices, Development Planning and Public Expenditure. Dr. Zaid Bakht started began his research career as a staff economist with the Bangladesh Institute of Development Studies (BIDS) in 1971. Prior to his retirement as the Research Director from BIDS in 2014, he served the institute in different capacities. As a veteran economist, Dr. Bakht has numerous international publications. In his illustrious research career, Dr. Bakht led many research projects of GOB and different world organizations like World Bank, ILO, ADB, ESCAP, EU, FAO, UNCTAD and Japan Bank for International Cooperation. He undertook several collaborative research projects with foreign institutions like London School of Economics, University of Sussex, Institute of Developing Economies, Tokyo, Japan. Dr. Zaid Bakht also edited several volumes of “The Journal of the Bangladesh Institute of Development Studies”. Dr. Zaid Bakht successfully performed the following international assignments: i) Member, Peer Review Committee on Regional Study Proposal for UNESCO’s Small Grant Program on Poverty Eradication, New Delhi, 2005. ii) Member, Government of Bangladesh Delegation to UNCTAD InterGovernmental Preparatory Committee Meeting on Third UN Conference on LDC, New York, July 2000. iii) Member, Government of Bangladesh Delegation to UNCTAD Expert Group Meeting on “Trade in the Agricultural Sector”, Geneva, April 1999. iv) Visiting Fellow, Department of Economics, Strathclyde University, Glasgow, 1997 v) Consultant, ESCAP, Report on Promoting Competitiveness of Public Sector Industries in Asian and the Pacific Region, 1992 vi) Member, Sector Review Mission on Rural Non-farm Employment in Sri Lanka, ILO, 1991 At national level, Dr. Zaid Bakht was a director of Sonali Bank Limited, syndicate member of Shahjalal University of Science & Technology, Sylhet. He was also a member of the Panel of Economists for the formulation of the Sixth Five Year Plan (2010), member of Public Expenditure Review Commission (2002), member of the Committee for Review of National Income Accounts (Ministry of Planning), member of the Advisory Committee for the Securities & Exchange Commission (2001) and member of National Committee on the Formulation of Industrial Policy-1998. In his academic career, Dr. Zaid Bakht obtained his graduation in Economics from Dhaka University. Later he completed M.Sc. and Ph.D. in Economics from Cornell University, USA. Dr. Zaid Bakht taught different undergraduate and graduate level courses on Macro and Microeconomics, Statistics, Econometrics and Business Mathematics as a visiting professor at North South University. He was also an Adjunct Professor at Dept. of Economics, East West University (2006 – 2008). Dr. Bakht has been a guest speaker at Armed Forces Staff College, BPATC, NAEM and the Planning Academy. Dr. Zaid Bakht is the son of the late Dr. Jamshed Bakht and Mrs. Zebunnessa Khatun. In his personal life, he is married to Halima Hossain and is blessed with a son and a daughter.
  22. Directors ’ Profile Appointed as Director: 7 September 2017 Board Committee Position: Board Audit Committee (Member) Mahmuda Begum Director Mahmuda Begum joined the Bangladesh Civil Service in 1986. She worked as Assistant Commissioner and Magistrate in different districts of Bangladesh. Her work experience covers Field Administration, Criminal Justice, Local Government Institutions, Land Administration and Secretariat. As a civil servant, she participated different professional trainings in various institutions of home and aboard. She extensively visited the following countries for training, workshop, exposure visit and higher studies: Australia, USA, UK, Germany, Switzerland, France, Russia, Italy, Ireland, Japan, China, North Korea, India, Nepal, Philippines, Singapore, Hong Kong, Malaysia, Indonesia, Qatar, Jordan, Lebanon, KSA, Thailand etc. Mahmud’s current position is Additional Secretary, (World Bank) in Economic Relations Division (ERD), Ministry of Finance where she is entrusted with the responsibility of aid and project programming with World Bank Group. Before taking the current assignment, she performed responsibilities for aid programming of European Development Partners (such as DFID, EU, KFW, Germany, Netherlands, Russia, EIB, AFD); Middle East & Africa including IDB, Nordic Countries, WFP, and IFAD. Since December 1997 she has been serving in the Economic Relations Division (ERD). She has also experience in dealing with aid effectiveness issues including coordination of Local Consultative Groups (LCGs) for harmonization of donor activities to make aid more effective. As a Debt Policy Management Specialist, she played instrumental role in strengthening of public debt management system in Bangladesh through installation and implementation of UNCTAD Debt Management Financial Analysis System (DMFAS). Moreover, she has vast experience of conducting Debt Sustainability Analysis (DSA) and preparing a number of policy documents and concept notes including Medium Term Debt Management Strategy (MTDS), Public Debt Act, Debt Statistical Bulletin, Institutional Reforms and Management of Contingent Liabilities. During her long career in the civil service, she has acquired extensive experience in the development, design and implementation of foreign aided projects including Health, Education, Power, Physical Infrastructure and Financial sector’s programs. This professional experience paved the way for her to work closely with all Development Partners providing external loans and grants in Bangladesh as well as all Ministries using foreign aid in Bangladesh which contributed to harnessing her expertise and excellent networking capabilities. She also has a good track record of conducting effective policy dialogues. She is an Alternate Governor of Multilateral Investment Guarantee Agency (MIGA), WB-Group and was an Alternate Governor of Islamic Development Bank (IDB). She is a Director of Infrastructure Investment Facilitation Company (IIFC) and Governing Body Member of Social Development Foundation (SDF). Education Mahmuda accomplished her Masters in Zoology from Dhaka University. Later, she pursued another Masters in Rural Management Studies from University of Sydney, Australia in 1997.
  23. Directors ’ Profile Appointed as Director: 07 March 2016 Board Committee Positions : Board Audit Committee (Member) Sangita Ahmed Director Entrepreneur, News Caster, Women Development Activist and Writer She has been reading the English Prime Time news since 1998 on BTV. Sangita Ahmed has been working in the development sector for the past 15 years. She is one of the founder board members of Bangladesh Women Chamber of Commerce & Industry BWCCI, the first women’s Chamber of Commerce in Bangladesh established in 2001. She has participated in numerous seminars, trainings and workshops related to her work, at home and abroad. Sangita has also been working in the media sector since 1996. At present, she is working as a consultant at ‘Green Bee Communications’ and has produced, narrated and scripted awareness raising documentaries and television programs on women entrepreneurs, foreign remittances, labour market, child labour, trafficking, literacy, maternal health and mortality, violence against women, education, health and hygiene, sanitation, child rights, workers’ health, CSR and compliance in the RMG sector. Sangita is at present the Director of Agrani Bank Ltd. She is serving as the Senior Vice President of BWCCI. Together with the BWCCI team, Sangita helps in providing services to 2500 womenowned enterprises in the form of trainings, workshops, seminars and research on product development, market assessment and access, entrepreneurship, campaigns for removing social barriers, easy access to finance for women, advocacy for policy reforms, fight against corruption and upholding democracy and Rights, thus helping Bangladeshi women have a voice in economic and public life. She is the Vice President of Bangladesh Mohila Samity. She is the founder and Managing Partner of ‘Time Out’ restaurant since November 2000.Sangita is an English newscaster at Bangladesh Television. Sangita Ahmed had been a Director of Janata Bank Ltd from 2012 to 2015 She is a free-lance writer. Many of her articles and poems have been published in The Daily Star newspaper and various magazines. Education She completed her A’ levels from the UK in English Literature and Classical Civilization and obtained her Bachelor and Master’s Degree in English Literature from the National University, Bangladesh.
  24. Directors ’ Profile Appointed as Director: 13 April 2016 Board Committee Positions : Board Executive Committee (Member) Shameem Ahsan Director Shameem Ahsan is an ICT entrepreneur, Venture Capital Investor & Policy maker widely recognized for his work to improve the reputation of the Bangladeshi ICT industry in the global space. He has played a pivotal role in the implementation of all the major policy changes related to the ICT sector in last one decade. He is a member of the Prime Minister’s Digital Bangladesh Task Force from the private sector, which is the highest policy making body to monitor and implement the vision of building Digital Bangladesh. He is a General Partner of Fenox Venture Capital, a US$ 1.5 billion fund head-quartered in Silicon Valley. He is the co-founder & Chairman of BAGDOOM.com, the largest lifestyle eCommerce venture in the country, as well as eGeneration Group, and Gemsclip.com. He is currently the Chairman of BASIS Presidents’ Forum and Immediate Past President of Bangladesh Association of Software and Information Services (BASIS), the largest national trade body for IT and ITES. He is serving as a Director of Federation of Bangladesh Chamber of Commerce and Industry (FBBCI) which is the apex trade body in Bangladesh and Chairman of Venture Capital & Private Equity Association of Bangladesh (VCPEAB). He is a Director of Agrani Bank and founder and President of TiE Dhaka. He is also a Director of Rajshahi Kings, a popular T20 cricket team of Bangladesh Premier League (BPL), which reached the final of BPL’2016 by participating for the first time. Education and Awards He has graduated from University of Central Oklahoma, USA. He has been recognized as “Outstanding Tech Personality of 2015”. He has been lauded many times for his significant contributions to the growth and development of the ICT industry–he has received the “Best Young Entrepreneur of Bangladesh” award from the Prime Minister of Bangladesh at Dhaka Chamber of Commerce Business Award; he was voted “Top Outstanding Young Person in Bangladesh” by JCI and awarded for his contribution to the eCommerce sector by Computer Jagat.
  25. Directors ’ Profile Appointed as Director: 13 April 2016 Board Committee Positions : Board Executive Committee (Member) Risk Management Committee (Member) Hasina Newaaz Director In late seventies, it was obdurate for a lot of people in Bangladesh to believe that women can become an entrepreneur. For them to accept that a woman in her late 20s can run any business successfully was almost unthinkable. The young woman who took on this challenge impetuously was Hasina Newaaz, who over time has been able to break a lot of norms and change a lot of minds through sheer hard work and thrive for success. She began her business career in 1978 by exporting live turtles from Bangladesh. She continued to do this for about a couple of years. Then in 1982 she established her printing press “Orchid Printers”. This baby step was revolutionary in terms of introduction of Japanese machines which eventually showed the whole printing industry and its set-up, a new way of printing. Printing is detail-oriented work and Hasina, coming from a printing background, being extremely meticulous and sincere, has naturally excelled in this area. She is providing her leadership and support for development, designing, planning and capacity building for the She received award of Outstanding Woman in Business, 2005, arranged Daily Star/DHL. She represented Bangladesh in15 UNIDO LDC Ministerial South South Conference on Industrial cooperation PERU (LIMA) She is ever attentive of the importance 2013 as Ministerial panelist. of women’s economic self-reliance in her immediate circle and insists that all her employees educate their daughters. Time and again, she reminds them that only economic power brings value for the womenrural and urban. promotion of women entrepreneurship in country level programs and trying that printing industry could get its thrust for the international market. Education and Achievements She completed Master in Bengali Literature from Rajshahi University in 1974. She stood second in the combined merit list. She completed Bachelor of Arts (Hons) from the same university in 1973. Currently she is the Director of FBCCI and Senior VicePresident of Bangladesh Women Chamber of Commerce and VicePresident of Bangladesh Mudron Shilpa Samity. She is the Convener of Export Development Committee of Bangladesh Mudron Shilpa Samity. She is also member of Working Committee of ‘New Business Development and Employment Generation’ and SME Foundation.
  26. Directors ’ Profile Appointed as Director: 13 April 2016 Board Committee Positions : Board Audit Committee (Member) Prof. Dr. Nitai Chandra Nag Director Dr. Nitai Chandra Nag is the founding professor of Dhaka School of Economics. He joined the Department of Economics at the University of Chittagong in 1981. Subsequently he was promoted to the posts of Associate Professor and Professor. The University of Chittagong granted Dr. Nag a lien in 2012 to serve as professor at the Dhaka School of Economics, a constituent institution of the University of Dhaka. Nitai C. Nag published research articles in national and international journals. His area of interest covers macroeconomics, international economics and various public sector economics. In his journal articles on devaluation published by the Philippine Review of Economics and Business, Dr. Nag empirically demonstrated that devaluations in Bangladesh were output-reducing and public-deficit-expanding. In his article on real salary of public sector employees in Bangladesh, published in the Asian Profile in 2007 he depicts that as many as fifty percent of the public sector employees lead lives below poverty level. He authored, jointly with Prof. Muinul Islam and coordinating editor Q. K. Ahmed, the research volume titled, “Economic Integration of South Asia: Issues, Pathways”. The volume has been published by Pearson Educations in 2008. His latest research analyses a proposition that BASEL III conditions ignore systemic environmental risk. Dr. Nag is also associated with journalism; he published around a hundred articles in such newspapers as the Bangladesh Observer, the Daily Star, the Financial Express, the New Age, and the Dainik Janakantha etc. He visited India, Philippines, Thailand and Japan. Dr. Nitai Chandra Nag was a member of the board of directors of Janata Bank Limited. Dr. N C Nag, son of the late Abinash Chandra Nag and late Shaila Bala Nag, was born in Chandina, Comilla on 07 July 1954. He is married and his family includes wife and two daughters. Education Dr. Nag obtained BA (Honours, 1975) and MA (1976) degrees in economics from the University of Chittagong securing second and third positions respectively in order of merit. In 1986 he obtained another MA degree in Economics from the School of Economics, University of the Philippines (UPSE). And in 1989 the same university conferred upon him the degree of Doctor of Philosophy in Economics. His expenses of higher studies abroad were borne by the Agricultural Development Council (ADC), the Winrock International and the UPSE. In the Ph.D thesis Dr. Nag analyzed both theoretically and empirically the macroeconomic effects of currency devaluation.
  27. Directors ’ Profile Appointed as Director: 27 April 2016 Board Committee Positions : Board Audit Committee (Chairman) Board Risk Management Committee (Member) M. Ashiqul Hoque Chawdhury Director M. Ashiqul Hoque Chawdhury, son of the late Sherazul Hoque Chawdhury & late Rahima Khatoon, was born on 1 February 1947 in a respectable muslim family in Narsingdi. Mr. Chawdhury, a valiant Freedom Fighter, during his student life actively participated in the Liberation War in 1971. Chawdhury joined Bangladesh Civil Service as Asst. Commissioner in 1973 and served in different capacities, viz. DC of Madaripur and Pabna. He also served as Joint Secretary in the Ministry of Home Affairs, Ministry of Public Administration and ERD, Ministry of Finance (MoF), Government of the Peoples’ Republic of Bangladesh. In 2002 he voluntarily retired from the Govt. service because of personal reason. In 2002, he joined Square Pharmaceuticals Limited as Executive Director (Admin.) and served until 2015. He was responsible for Strategic Planning, Human Resources Development, Supply Chain Management, Business Development and Corporate Legal Affairs Division of the Square Group. Chawdhury also served as a Director of the Board of Directors of Rupali Bank Limited from 2013 to 2016. Chawdhury visited Australia, the UK, France, Singapore, Thailand, the Kingdom of Saudia Arabia, Philippines, Thailand, Cambodia, Vietnam, India and participated in different seminars and short courses. Chawdhury is married to Mahmuda Chawdhury who is a housewife and has a son and a daughter. Education Chawdhury obtained B.A. (Hons.) & MBA degree from Dhaka University. He studied in the Birmingham University, UK and obtained Diploma in Dev. Administration. He participated in a Diploma course on Management of Training Program at Royal Institute of Public Administration (RIPA). He undertook a 4 (four)-month Diploma program on Project Management at PATC, Bangladesh.
  28. Directors ’ Profile Appointed as Director: 6 September 2016 Board Committee Positions : Board Executive Committee (Member) Board Risk Management Committee (Chairman) Kashem Humayun Director Kashem Humayun, an eminent journalist & managing editor of The Daily Sangbad, was appointed director of the board of directors of Agrani Bank Limited on 8 September in 2016. He is chairman of the risk management committee and also a member of the executive committee of the bank. Humayun, son of the late Chand Miah & the late Moymoona Khatoon was born on 21 September 1952.He obtained M.A. from the University of Dhaka. Humayun has a long career in journalism. He joined the Daily Sangbad as a reporter in 1972. He has wide experience as a senior reporter & chief reporter. His articles on politics, banking, economy etc. were regularly published. When current Prime Minister Sheikh Hasina returned home in 1981, he was one of the all-time companions of the entourage of the prime minister and reported on all the events. He also attended UN General Assembly in 1996 & Commonwealth heads of government meeting in Perth, Australia in 2011 as one of the members of the delegation led by Prime Minister Sheikh Hasina. He also played active role as a member of media cell and sub-committee for press of Awami League during the National Parliamentary Election in 2008. Humayun is now one of the members of the managing committee of journalist welfare trust, Dhaka Children (child) Hospital, Institute of mother & child health, Mautail , Dhaka. Humayun also played his role with honesty & integrity as a director of the board of the directors of Sonali Bank Limited from 2010 to 2013. He was also director of Jibon Bima Corporation. Humayun was vice-president & treasurer of National Shooting Federation for nearly two decades. He was also former vice president and executive member of Narayanganj Rifles Club. He is founder general secretary of Narayanganj Press Club, Bazlur Rahman foundation and Shapla, a cultural organization. He is also chairman of the board of directors of Biddyaniketon High School, Narayanganj; executive member of Kendrio Kochi Kachar mela, an organization for children and adolescents and a member for life of Sudhijon Pathagar, Narayanganj. He is the elected member of executive committee of National Press Club & Dhaka Journalist Union. Humayun has travelled multiple times the US, the UK ,Germany, France, Saudia Arabia, Dubai, India, Hong Kong, Australia, Itali, Nepal, Sri Lanka, Malaysia, Singapore,Thailand and many other countries. Humayun is married to Sahnaj Begum who is a professor of Rajarbag Police Lines School & College. He is a proud father of two daughters.
  29. Directors ’ Profile Appointed as Director: 9 January 2017 Board Committee Positions : Board Audit Committee (Member) Board Risk Management Committee (Member) Md. Ansar Ali Khan Director As an ex member of Bangladesh Civil Service Administration he has a very successful carrier in field and Secretariat admiration. After his retirement from the government service he was appointed Director, Board of Directors, Agrani Bank Limited on 09.01.2017. He possesses capabilities to develop innovative and creative solutions of diverse problems. He is also able to work on his own initiative and can demonstrate the high levels of motivation required to meet the tightest of deadlines. Even under significant pressure, he has strong ability to perform effectively. Having attended a number of local and foreign training on different issues including financial Management, he has a strong capacity to contribute in decision making process. He participated different workshops and seminars arranged by the local and International institutions of Bangladesh, England, America, Canada, New Zealand, Australia, Denmark, Germany, France, Italy, Switzerland, Greece, Philippines, UAE, Thailand, Vietnam, Indonesia, Ghana, Kenya, South Africa and India. Work Experience • Retired from the Ministry of Public Administration as Additional Secretary. of the Executive Committee for the welfare of the associates. • Three years’ experience as CEO, Dhaka South City Corporation. • As elected Vice chairman of Officers Club Dhaka provides all of his efforts to make the Club more prestigious and colorful. • About nine years’ experience as Senior Assistant Secretary, Deputy Secretary and Joint Secretary of Local Government Division under Ministry of LGRD & Co-Operatives. • Two years’ experience as Private Secretary to the State Minister, Ministry of Power, Energy and Mineral Resources. • Founder Member of Uttara Officers Club, Dhaka. • He is a column writer & participator of Television Talk Show on different issues. • He is the Chairperson of the Governing Body of State college, Dhaka • Nine years’ experience as senior Assistant Secretary of the Ministry of Education Commerce, Communications, and He obtained B.A (Honors) and Master’s Home Affairs. Degree in Philosophy from Rajshahi • Six years’ experience as Assistant University. Secretary of the Ministry of Finance and Commerce. • Seven years’ experience as Rural Development Officer of BRDB. Social Activities • He played a courageous role in liberation war, Sector-8, as an Indian trained Freedom Fighter. • He was very popular in his Service Association for his active participation as influential member
  30. Directors ’ Profile Appointed as Managing Director & CEO 24 August 2016 Mohammad Shams-Ul Islam Managing Director & CEO Mohammad Shams-Ul Islam was appointed Managing Director and CEO of Agrani Bank Limited on 24 August 2016. As a prudent banker he has 34 years of banking experience. Before that he was the Managing Director of Ansar-VDP Unnayan Bank. He worked in Agrani Exchange House Private Limited, Singapore, a flagship remittance company fully owned by Agrani Bank Limited, which played a pivotal role in earning foreign currencies from Singapore to Bangladesh. As the MD & CEO of Agrani Bank Limited he is the Chairman of Agrani SME Financing Company Limited; the Director of Agrani Equity and Investment Limited; Director of ICB; Director of Delta Life Insurance Company Ltd. Agrani Exchange House Pte. Ltd, Singapore; Agrani Remittance House Sdn,Bhd, Malaysia; Agrani Remittance House, Canada Inc. respectively. He is also a member of the Governing Board of Bangladesh Institute of Bank Management (BIBM). Member of the Council of IBB and Executive Committee of Bangladesh Foreign Exchange Dealers Association (BAFEDA). He was awarded “The Best Banker” of 8th International Gold Medal Award-2018 by Dr. M.A. Wazed Miah Memorial Foundation. Education : Mohammad Shams-Ul Islam obtained his B.Com (Hon’s) and M.Com in Accounting from University of Dhaka in 1980 and 1981 respectively. Born in Sirajgonj, he completed HSC from Notre Dame College in 1976 & SSC from Bindu Basini Govt. High School, Tangail in 1974. Training: Throughout the career, he attended a number of seminars, workshops and training at home and abroad conducted by world famous and prestigious institutions. He completed multifaceted trainings in the country covering almost all aspects of banking industry. Besides, he received overseas training on International Trade & Operational Risk Management, Retail Banking, Foreign Currency Management and Challenges for Treasury Management under BASEL and Anti-Money Laundering and Counter Terrorism Financing etc. held in Singapore, Hong Kong, Nepal, and Thailand. He attended “The Global Banks Conference-2018” in Miami, Florida on April 25, 2018. Career as a Banker: He was appointed Senior Officer (Financial Analyst) in Agrani Bank Limited in 1984. After his appointment, he worked in different branches under Chittagong Circle & Agrani Bank Limited got Licence of OBU for his direct initiatives being the Manager of EPZ Branch, Chittagong. After being promoted to Assistant General Manager in 1999, he was posted to Chittagong GM Office. In 2002, he was appointed CEO & Director of Agrani Exchange House Private Limited, Singapore. He performed his duty with utmost sincerity & skill and became able to come to good book of the then Authority. He played a pivotal and commendable role to put Agrani Bank Limited in the first place in foreign remittance receiving bank among all the State-owned Commercial Banks (SCBs). In 2008, he was promoted to General Manager. His responsibility was to oversee important Divisions, Circles and Corporate Branches. He got promotion as Deputy Managing Director of Agrani Bank Ltd. in 2011. During his tenure of Deputy Managing Director, he became Director of Agrani Exchange House Pte.Ltd., Singapore and Agrani Remittance House Sdn. Bhd., Malaysia. For his extraordinary banking experience and exceptional banking skill, he was appointed as Managing Director of Ansar-VDP Unnayan Bank by the Government. He navigated the Bank with skill and experience and became successful by bringing positive changes and remarkable progress in the Bank. The Government, being satisfied with his performance, appointed him Managing Director of Agrani Bank Limited. It is historic in the sense that he is the first Agranian to be appointed MD & CEO in Agrani Bank Limited. Immediate after joining in Agrani Bank Limited, to march the bank to a commendable height, he prepared a ‘100-day Roadmap’ for amelioration of the condition of the Bank. He brings a new era in Agrani Bank Limited by his exceptional experience in banking. Until now, he is steering and guiding the Bank to the right direction. He is always famous for his pioneering role in introducing innovative products for Banks. Accolades:  Appreciation letter from the then Managing Director & CEO of Agrani Bank Limited on 08/07/2010 for successfully leading International Division & achievement of approximately double income over the target set by the Management for Treasury Division in 2009.  Appreciation letters from the then Board of Directors of Agrani Exchange House Pvt. Ltd. along with 08 appreciation letters & several crest from Agrani Bank Limited time to time for achieving target of Agrani Exchange House Pvt. Ltd., Singapore during 2002 to 2009 and outstanding contribution for sending foreign remittance to Bangladesh through banking channel.  Appreciation letter from the then Managing Director & CEO of Agrani Bank Limited on 11/08/1998 for recovery of classified loan which have been defaulted before the Liberation War.  Received 04 Appreciation letters & cash incentive at several times from Agrani Bank Limited for success in mobilization of deposit & recovery of bad loan.
  31. Shareholders ’ Information Particulars Distribution of Shares 31 December 2018 Government of Bangladesh 31 December 2017 20,72,29,395 20,72,29,395 Directors 9 9 General Public _ _ 20,72,29,404 20,72,29,404 Total Shares held by Directors Sl. No. Particulars Status Closing Position Share Change 1 Dr. Zaid Bakht Chairman 1 1 0% 2 Mahmuda Begum Director 1 1 0% 3 Sangita Ahmed Director 1 1 0% 4 Shameem Ahsan Director 1 1 0% 5 Hasina Newaaz Director 1 1 0% 6 Prof. Dr. Nitai Chandra Nag Director 1 1 0% 7 M. Ashiqul Hoque Chawdhury Director 1 1 0% 8 Kashem Humayun Director 1 1 0% 9 Md. Ansar Ali Khan Director 1 1 0% Total 9 9 Dividend Distribution i) 100 Percent stock dividend i.e. 1 bonus share for every 1 share for the year 2008. ii) 10 Percent stock dividend i.e. 1 bonus share for every 10 shares for the year 2009. iii) 10 Percent stock dividend i.e. 1 bonus share for every 10 shares for the year 2010. iv) 10 Percent stock dividend i.e. 1 bonus share for every 10 shares for the year 2011. 32 Annual Report 2018
  32. Committees of The Board 500th Board Meeting a Landmark Executive Committee Chairman Dr . Zaid Bakht Hasina Newaaz Member Shameem Ahsan Kashem Humayun Audit Committee Chairman M. Ashiqul Hoque Chawdhury Mahmuda Begum Member Sangita Ahmed Md. Ansar Ali Khan Professor Dr. Nitai Chandra Nag Risk Management Committee Chairman Kashem Humayun M. Ashiqul Hoque Chawdhury Member Hasina Newaaz Md. Ansar Ali Khan
  33. Management Team Managing Director & CEO Mohammad Shams-Ul Islam Deputy Managing Directors Md. Yusuf Ali Md. Khairul Kabir (PRL on 26-03-2019) S.M. Nurul Ahsan (PRL on 09-03-2019) Md. Anisur Rahman General Managers Md. Monowar Hossain, FCA (Contractual) Md. Wali Ullah Md. Golam Kabir Sukanti Bikash Sanyal Shirin Akhter Shekhar Chandra Biswas Md. Nurul Islam Md. Liakat Ali Md. Akram Hossain (CFO) Md. Ohiduzzaman Mahmudul Amin Masud Md. Abdus Salam Mollah A. M. Abid Hossain Md. Anwarul Islam Md. Shafiqur Rahman Sadik Md. Golam Mostafa Jahar Lal Roy Abul Basar Serneabad Zakia Begum Md. Nazmul Haque Md. Jahangir Mondol Muhammad Altaf Hossain Full Time Law Advisor (Contractual)
  34. Management Team Mohammad Shams-Ul Islam Managing Director & CEO Md. Yusuf Ali Deputy Managing Director S.M. Nurul Ahsan Deputy Managing Director (PRL on 09-03-2019) Md. Khairul Kabir Deputy Managing Director (PRL on 26-03-2019) Md. Anisur Rahman Deputy Managing Director
  35. Management Team Md . Monowar Hossain, FCA Head of ICC Md. Wali Ullah Shekhar Chandra Biswas Md. Nurul Islam Mahmudul Amin Masud Md. Golam Mostafa Md. Abdus Salam Mollah Jahar Lal Roy Md. Jahangir Mondol 36 Annual Report 2018 Md. Golam Kabir Md. Liakat Ali A. M. Abid Hossain Abul Basar Serneabad Sukanti Bikash Sanyal Md. Akram Hossain (CFO) Md. Anwarul Islam Zakia Begum Muhammad Altaf Hossain Khandaker Sajedul Haque Full Time Law Advisor Company Secretary Shirin Akhter Md. Ohiduzzaman Md. Shafiqur Rahman Sadik Md. Nazmul Haque
  36. Deputy General Managers As on 31-12-2018 01 Md . Nurul Amin 38 Diptimoy Biswas 75 Md. Shahidul Islam 02 Md. Abul Hashem 39 Dewan Md. Sadeque 76 S.M. Mostofa-E- Kader 03 Md. Faruqe Ahmed 40 Khandaker Jawadul Haque 77 Md. Solaiman Mollah 04 S.M. Babul Islam 41 Rubana Pervin 78 Md. Jamir Hossain Gazi 05 Md. Akhtarul Alam 42 Shahinoor Begum 79 Md. Shahab Uddin 06 Mohammad Shawkat Ali 43 A.K.M. Fazlul Haque 80 Md. Abul Kashem 07 Ashok Kumar Shaha 44 Md. Abu Hasan Talukder 81 Md. Mashiur Rahman 08 Jashim Uddin Ahmed 45 Md. Mazharul Islam 82 Md. Asraf-Ul Islam 09 Md. Monirul Islam 46 Md. Siddiqur Rahman 83 Ashis Kumar Muhury 10 Md. Ruhul Amin 47 Abdul Aziz 84 Md. Afzal Hossain 11 Ajoy Kumer Podder 48 Md. Saiful Islam 85 Md. Sharful Alom Khan 12 Md. Mozammel Hossain 49 Md. Shamsul Alam 86 Shafia Akhter 13 Kazi Shafiqul Islam 50 Md. Aminul Haque 87 Gita Majumder 14 Md. Abdul Aziz Dewan 51 Md. Ashraf Ali 88 Jakir Hossain 15 Md. Iqbal Karim 52 Md. Abdus Samad Patwary 89 Anita Dey 16 Muhammad Ullah 53 Md. Shahidul Islam 90 Swapan Kumar Dhar 17 Md. Mahfuzur Rahman Miah 54 Md. Azizul Haque 91 Md. Mozammel Haque 18 Md. Taufiqul Islam 55 Md. Aminul Islam Gazi 92 Raofa Haque 19 Ranjit Banik 56 Md. Abul Bashar 93 Md. Shahidullah 20 Md. Fazle Khoda 57 Md. Asheque Elahi 94 Md. Mahbubur Rahman 21 Md. Abdullah Al Mamun 58 Iqbal Hossain 95 Shekh Akram Uddin 22 Shyamal Ch. Sarker 59 S.M. Monowar Hossain 96 Md. Moinuddin Shaikh 23 Md. Golam Kibria 60 Md. Rafique UD Daula 97 Md. Shamiul Huda 24 Md. Kamal Uddin 61 Ahmed Yousuf Abbas 98 Kazi Abdul Quader 25 Jahanara Begum 62 Shirin Akhter 99 Md. Faridul Alam 26 Md. Shamsul Haque 63 Sultana Mutahera Khanam 100 Salina Parveen 27 Enamul Mowla 64 Md. Aminul Hoque 101 S.M. Haider Ali 28 Shamim Uddin Ahmed 65 Mrinal Kanti Bokshi 102 Obaidul Haque 29 Md. Tariqul Islam 66 Md.Atiqur Rahman Siddique 103 Md. Rezaul Karim 30 Md. Abdul Alim 67 Md. Nurul Huda 104 Sukumar Das 31 Hossain Iman Akand 68 Mohammad. Fazlul Karim 105 Md. Mostafizur Rahman 32 A.K.M. Shameem Reza 69 Md. Wahidul Islam 106 Md. Yusuf 33 Suranjan Kumar Roy 70 Md. Nesar Uddin Ahmed 107 Major Md. Asaduzzaman (Retd.) 34 Md. Nurul Islam 71 Mohammad Yousuf Khan 35 Bahar-A-Alam 72 Md. Hedayet Hossain Sheikh 36 Md. Abdur Razzak 73 Susmita Mandal 37 Md. Saifur Rahman 74 Sk. Farid Ahmed 37
  37. Awards and Accolades Mohammad Shams-Ul Islam , Managing Director & CEO is receiving ‘NRB Remittance Award-2018’ from Muhammad Abdul Mannan, MP Hon’ble Planning Minister, Government of the Peoples’ Republic of Bangladesh Arabian Banker Award 2017 ICMAB Best Corporate Award 2014 NRB Remittance Award 2016 NRB Silver Award for Remittance 2014 Bangladesh Bank Remittance Award 2016 ICAB First Prize for best published Account and Report-2008 ICMAB Award 2009 NRB Remittance Award 2015 ICAB Award 2009
  38. Photo Gallery every picture tells a story
  39. Caption CaptionCaptionCaption Handing over of the picture of 'Bangabandhu Corner' established at Agrani Bank premises to the Prime Minister. 40 Annual Report 2018 Heartfelt greetings to hon’ble President of the Peoples’ Republic of Bangladesh Mohammad Abdul Hamid . Donation of cheque equivalent to the amount of staff’s 3 days' salary to the Prime Minister's Relief Fund.
  40. Felicitation to the Hon ’ble Finance Minister A.H.M. Mustafa Kamal FCA , MP on the occassion of Annual Conference-2019 Greetings to Hon’ble Finance Minister An especial event with Hon’ble Minister of Liberation War Mr. A K M Moazmmel Haque at unveiling ceremony of the book “Agrani Bank Paribar: Muktijuddher Smriti katha” A memorable moment with HT Imam, Hon’ble Political Advisor to the Prime Minister of Bangladesh at untying ceremony of the Book “Bangabandhu Corner-Nandita Udbhaban” A memorable moment with the Honorable Governor of Bangladesh Bank 41
  41. Honorable Secretary of Financial Institutions Division of the Ministry of Finance , Mohammad Asadul Islam distributing the certificates among the trainees at a training workshop organized by ABTI. Agreement signing ceremony of Government Officials and Staff Member House Building Loan Signing of Memorandum of Understanding regarding Women Entrepreneur Development, Training and Lending between Agrani Bank Limited and BWCCI. Auspicious inauguration of "Agrani Doer Banking" at Gohala Bazar, Muksudpur, Gopalgonj Loan agreement signing ceremony with Ashuganj Power Station Co. Ltd. Agreement signed between BTCL and Agrani Bank Limited 42 Annual Report 2018
  42. MD and CEO poses with Agrani Bank Taekwondo Team Agreement signed with Bashundhara Group as Lead Arranger of Syndicate Loan MD & CEO is delivering speech at ‘Meet the Press’ 11th "Annual General Meeting-2018" Signing ceremony of Audited financial statement-2017 Received ICMAB Best Corporate Award 43
  43. A moment of the 4th Bangladesh Cup Taekwondo Championship Inauguration of the Annual Sports Competition-2018 of Agrani Bank Limited MD & CEO of Agrani Bank Limited received Bangladesh Bank ‘National Remittance Award-2017’ The procession celebrating the historic success of Bangladesh's ability to overcome the status of LDC Handing over a Tapestry to the Hon’ble High Commissioner, Moh. Shahidul Islam on behalf of Agrani Remittance House Pvt. Ltd., Malaysia A special moment on the occasion of ‘Agrani Bank Shishu Academy Shishu Sahitya Puraskar’ 44 Annual Report 2018
  44. Hon 'ble High Commissioner Md. Mustafizur Rahman is giving crest to a remittance sender on behalf of Agrani Exchange House Pvt. Ltd., Singapore MD & CEO of Agrani Bank Limited is receiving award from Citibank N.A. USA Managing Director and CEO is with the National Hockey Team and other officials Great Independence Day celebration Paying tribute to the great Father of the Nation Bangabandhu Sheikh Mujibur Rahman 45
  45. Five Years Performance Crore Taka unless otherwise specified Particulars 2018 2017 2016 2015 2014 Authorized Capital 2 ,500 2,500 2,500 2,500 2,500 Paid-up Capital 2,072 2,072 2,072 2,072 2,072 Reserve Fund 2,009 1,938 1,744 1,747 1,693 total Shareholders’ Equity 4,159 4,073 3,658 4,468 3,957 Deposits 62,193 53,035 49,405 43,998 38,392 Loans and Advances 39,575 31,912 26,587 24,480 23,509 Investments 15,923 17,088 22,754 20,570 15,228 Fixed Assets 1,478 1,556 1,578 1,595 1,545 Total Assets 78,915 67,392 62,357 56,535 49,487 Total Off Balance Sheet Items 16,245 12,334 8,390 9,007 8,398 Interest Earning Assets 52,014 39,708 29,115 26,265 25,031 Non-interest Earning Assets 26,901 27,684 33,242 30,270 24,456 Interest income 3,231 2,253 2,145 2,364 2,339 Interest Expenses 2,339 1,818 2,062 2,294 2,221 Investment income 1,203 1,469 1,561 1,495 1,301 388 449 436 428 530 Non-interest Expenses 1,651 1,540 1,525 1,114 876 Total Income 4,822 4,171 4,142 4,286 4,170 total Expenditure 3,990 3,358 3,587 3,408 3,096 Operating Profit 832 813 555 878 1,074 Profit Before Tax 350 968 (751) (60) 170 Net Profit After Tax 104 676 (697) 65 199 39,414 33,679 26,700 26,469 25,326 Going concern capital (Tier-1) 2,697 2,066 1,692 1,747 1,552 Gone concern capital (Tier-2) 1,279 1,382 985 777 1,092 Total Capital 3,976 3,448 2,677 2,524 2,644 35 80 7 (123) 112 Tier-I Capital Ratio 6.84% 6.14% 6.34% 6.60% 6.13% Tier-II Capital Ratio 3.25% 4.10% 3.69% 2.94% 4.31% 10.09% 10.24% 10.03% 9.54% 10.44% 6,993 5,570 6,804 4,640 3,966 322 394 502 459 325 2,965 2,750 3,057 2,245 1,930 123 123 84 90 84 17.67% 17.45% 25.59% 18.96% 16.96% Balance Sheet Matrix Income Statement Matrix Non-interest income Capital Measures Risk Weighted Assets Capital Surplus/(Deficit) Capital to Risk Weighted Asset Ratio Basel-III & II Credit Quality Classified Loans Provision for Unclassified Loans Provision for Classified Loans Provision for Contingent Liabilities Percentage of NPLs to total Loans and Advances 46 Annual Report 2018
  46. Five Years Performance Crore Taka unless otherwise specified Particulars 2018 2017 2016 2015 2014 Import 23 ,551 13,267 10,153 10,917 15,741 Export 8,280 7,059 7,396 7,543 8,345 12,680 10,605 12,022 13,204 12,980 63.63% 60.17% 53.81% 55.64% 61.23% Cost of Deposit 3.89% 3.48% 4.35% 5.47% 5.94% Cost of Deposit & Brorrowing 4.20% 4.39% 4.99% 5.96% 7.30% Administrative Cost 3.33% 3.55% 4.07% 3.54% 3.64% Yield on Loans and Advances 7.67% 8.38% 10.02% 11.24% 12.17% Spread 3.60% 4.62% 4.49% 4.70% 4.56% Return on Assets 0.13% 1.00% -1.12% 0.12% 0.40% Return on Equity 2.49% 16.59% -19.06% 1.46% 5.02% 1.03 1.10 1.08 1.17 1.19 0.66 0.64 0.44 0.66 0.80 1.28% 1.43% 1.10% 1.82% 2.53% Ratio of Fees Income 10.20% 14.43% 14.85% 16.35% 22.25% Salary Exp. to total Overhead Exp. 67.41% 69.79% 66.05% 62.46% 70.44% Cost to income/Efficiency Ratio 82.75% 80.51% 86.58% 79.52% 79.25% 207.23 207.23 207.23 207.23 207.23 9 9 9 12 11 Earnings per Share (Taka) 5.00 32.62 (33.63) 3.15 9.58 Net Asset Value per Share (Taka) 201 197 177 216 191 952 943 935 930 921 Number of Islamic Windows 5 5 5 5 5 Number of Subsidiary Companies 6 6 6 6 6 12,656 12,798 12,672 13,396 13,414 335 335 318 322 328 Foreign Exchange Business Remittance (Inward) Operating Profit Ratios Credit Deposit Ratio Current Ratio Performance Ratios Profit per Employee (Million) Operating profit as % of Working Fund Shares Information Matrix No. of Shares Outstanding (Million) No. of Shareholders Other Information Number of Branches Number of Employees Number of Foreign Correspondents 47
  47. Five Years Performance Graphical Presentation Total Assets (BDT in Crore) 49,487 2014 78,915 56,535 2015 62,357 Deposits (BDT in Crore) 67,392 38,392 2016 62,193 2017 Loans and Advances (BDT in Crore) 2018 39,575 2014 43,998 2015 49,405 2016 53,035 2017 2018 Import (BDT in Crore) 23,551 31,912 23,509 2014 24,480 2015 26,587 2016 15,741 2017 2018 Export 2014 13,267 10,917 10,153 2015 2016 2017 2018 Remittance (BDT in Crore) 8,345 (BDT in Crore) 8,280 7,543 12,980 13,204 12,022 12,680 10,605 7,396 7,059 2014 48 2015 Annual Report 2018 2016 2017 2018 2014 2015 2016 2017 2018
  48. Five Years Performance Graphical Presentation Profit after Tax Total Shareholders ’ Equity (BDT in Crore) (BDT in Crore) 676 3957 199 2014 3658 4073 4159 2017 2018 6.35 6.58 2017 2018 3448 3976 2017 2018 104 65 2015 4468 2016 2017 2018 -697 2014 Return on Assets (ROA) 2015 2016 Profit per Employee (BDT in Lac) 8.01 1.00% 0.40% 2014 0.12% 2015 6.55 4.38 0.13% 2016 2017 2018 2014 -1.12% Return on Equity (ROE) 2015 2016 Total Capital (BDT in Crore) 2524 16.59% 2644 5.02% 2014 2677 2.49% 1.46% 2015 2016 -19.06% 2017 2018 2014 2015 2016 49
  49. Five Years Performance Graphical Presentation Net Interest Income Number of Employee 13414 (BDT in Crore) 13396 892 12672 2014 2015 2016 735 12798 12656 2017 2018 118 70 2014 2015 83 2016 2018 Non Interest Expenses Non Interest Income (BDT in Crore) (BDT in Crore) 530 1525 427 2017 436 449 388 1540 1651 1114 876 2014 2015 2016 2017 Number of Branches 2018 953 2014 2015 2016 2017 2018 Earnings per Share (EPS) 32.62 943 935 930 9.58 5.00 3.15 921 2014 2014 50 2015 Annual Report 2018 2016 2017 2018 2015 2016 -33.63 2017 2018
  50. Five Years Performance Graphical Presentation Net Asset Value per Share Capital to Risk Weighted Asset Ratio (CRAR) 216 191 197 177 201 10.44% 10.24% 10.03% 10.09% 9.54% 2014 2015 2016 2017 2018 NPL Ratio 2014 2015 2017 2018 NPL (BDT in Crore) 25.59% 17.45% 17.67% 3966 2014 2015 2016 NPL Ratio 16.96 23,509 6993 6804 5570 18.96% 16.96% 2016 18.96 24,480 2017 25.59 17.45 2018 17.67 39575 2014 4640 2015 2016 2017 Number of Foreign Correspondents 31912 335 26,587 2018 335 328 322 318 3,966 2014 4,640 2015 6,804 2016 6993 5,570 2017 2018 2014 2015 2016 2017 2018 51
  51. Horizontal Analysis Balance Sheet 2018 2017 2016 2015 2014 123 % 127% 119% 112% 100% 92% 89% 91% 96% 100% Balance with Bangladesh Bank and its agent bank (including FC) 128% 133% 123% 114% 100% Balance with Other Banks and Financial Institutions 817% 506% 180% 136% 100% In Bangladesh 913% 561% 198% 138% 100% Outside Bangladesh 280% 199% 82% 126% 100% 14% 54% 18% 32% 100% Investments 105% 112% 149% 135% 100% Government 76% 112% 156% 140% 100% Others 268% 112% 111% 109% 100% Loans and advances 168% 136% 113% 104% 100% Loans, cash credit & overdraft etc. 171% 138% 114% 105% 100% Bills discounted and purchased 46% 49% 67% 86% 100% Fixed assets including land, building, furniture and fixtures 98% 101% 102% 103% 100% Other Assets 134% 119% 120% 103% 100% Total Assets 159% 136% 126% 114% 100% Borrowings from Other Banks, Financial Institutions and Agents 264% 156% 50% 99% 100% Deposit and Other Accounts 162% 138% 129% 115% 100% Current deposits & other accounts 410% 313% 281% 109% 100% Bills payable 176% 111% 126% 96% 100% Savings bank deposits 169% 153% 136% 111% 100% Fixed deposits 118% 103% 101% 117% 100% Other Liabilities 163% 142% 142% 115% 100% Total Liabilities 164% 139% 129% 114% 100% Total Shareholders’ Equity 105% 103% 92% 113% 100% Paid-up capital 100% 100% 100% 100% 100% Statutory reserve 145% 133% 100% 100% 100% 12341% 11941% 11540% 10730% 100% Asset revaluation reserve 99% 99% 99% 100% 100% Revaluation & amortization reserve 72% 82% 211% 274% 100% Retained surplus/(deficit) 582% 879% 5002% -796% 100% Total Liabilities and Shareholders’ Equity 159% 136% 126% 114% 100% Property and Assets Cash Cash in hand (including foreign currencies) Money at Call and Short Notice Liabilities and Capital Liabilities Capital/Shareholders’ Equity General reserve 52 Annual Report 2018
  52. Horizontal Analysis Profit and Loss Account 2018 2017 2016 2015 2014 Operating Income Interest and Revenue Income 138 % 96% 92% 101% 100% Interest Paid on Deposit,Borrowings etc. 105% 82% 93% 103% 100% Net Interest Income 752% 367% 70% 58% 100% Investment Income 92% 113% 120% 115% 100% Commission,Exchange and Brokerage 58% 78% 71% 75% 100% Other Operating Income 140% 114% 132% 105% 100% Total Operating Income 127% 121% 107% 102% 100% Salaries & Allowances 180% 174% 163% 113% 100% Rent,Tax,Insurance,Light etc. 147% 118% 139% 112% 100% Law charges 140% 126% 175% 116% 100% Postage,Telegram & Stamp, telecommunication 165% 266% 220% 158% 100% 73% 66% 83% 112% 100% Chief Executive’s Salary and fees 111% 99% 93% 100% 100% Directors fees & allowance 215% 188% 120% 116% 100% Auditors fees 111% 100% 127% 100% 100% Depreciation & Repairs of bank’s assets 206% 185% 129% 136% 100% Other expenditure 340% 267% 383% 265% 100% Total Operating Expenses 188% 176% 174% 127% 100% 77% 76% 52% 82% 100% 0% 100% 100% 100% 100% 88% 72% 45% 79% 100% 31% -123% 200% 136% 100% Provision for off balance sheet exposure 0% 394% 0% -20% 100% Provision for diminution in the value of Investment 0% -42% 55% 66% 100% Provision for employees benefits 141% 181% 143% 107% 100% Other provision 168% 76% 107% 34% 100% Total Provision 63% -37% 152% 104% 100% 205% 568% -441% -35% 100% Current Tax 2588% 2129% 1844% 104% 100% Deffered Tax 195% -59% 703% 340% 100% 52% 340% -351% 33% 100% Stationery,Printing & Advertisement etc. Profit/(Loss) before Amortization, Provision & Tax Amortization for valuation adjustment Profit/(Loss) before Provision & Tax Provision for Loans & Advance/Investments Provision for loans and advances Total Profit before Tax Provision for Taxation Net profit /(loss) after Tax 53
  53. Vertical Analysis Balance Sheet 2018 2017 2016 2015 2014 Cash 4 .70% 5.70% 5.74% 5.97% 6.10% Cash in hand (including foreign currencies) 0.49% 0.56% 0.62% 0.72% 0.86% Balance with Bangladesh Bank and its agent bank (including FC) 4.21% 5.14% 5.13% 5.25% 5.25% Balance with Other Banks and Financial Institutions 15.92% 11.54% 4.45% 3.70% 3.11% In Bangladesh 15.09% 10.85% 4.14% 3.18% 2.64% Outside Bangladesh 0.83% 0.69% 0.31% 0.52% 0.47% Money at Call and Short Notice 0.09% 0.40% 0.14% 0.28% 1.02% Investments 20.18% 25.36% 36.49% 36.38% 30.77% Government 12.51% 21.61% 32.47% 32.01% 26.20% 7.66% 3.75% 4.02% 4.37% 4.57% Loans and advances 50.15% 47.35% 42.64% 43.30% 47.50% Loans, cash credit & overdraft etc. 49.83% 46.96% 42.05% 42.47% 46.40% Bills discounted and purchased 0.32% 0.40% 0.59% 0.83% 1.10% Fixed assets including land, building, furniture and fixtures 1.93% 2.31% 2.53% 2.82% 3.12% Other Assets 7.04% 7.33% 8.01% 7.54% 8.38% Property and Assets Others Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% Liabilities and Capital Liabilities Borrowings from Other Banks, Financial Institutions and Agents 2.98% 2.06% 0.71% 1.56% 1.80% Deposit and Other Accounts 78.81% 78.70% 79.23% 77.82% 77.58% Current deposits & other accounts 19.90% 17.82% 17.28% 7.42% 7.74% 1.12% 0.83% 1.02% 0.86% 1.02% Savings bank deposits 22.47% 23.90% 22.94% 20.72% 21.23% Fixed deposits 35.31% 36.15% 37.99% 48.83% 47.58% Other Liabilities 12.94% 13.20% 14.19% 12.71% 12.63% Total Liabilities 94.73% 93.96% 94.13% 92.10% 92.00% Total Shareholders’ Equity 5.27% 6.04% 5.87% 7.90% 8.00% Paid-up capital 2.63% 3.07% 3.32% 3.67% 4.19% Statutory reserve 1.08% 1.16% 0.94% 1.04% 1.18% General reserve 0.08% 0.09% 0.09% 0.09% 0.00% Asset revaluation reserve 1.39% 1.63% 1.77% 1.96% 2.24% Revaluation & amortization reserve 0.18% 0.25% 0.69% 0.98% 0.41% -0.09% -0.15% -0.94% 0.17% -0.02% Bills payable Capital/Shareholders’ Equity Retained surplus/(deficit) Total Liabilities and Shareholders’ Equity 54 Annual Report 2018 100.00% 100.00% 100.00% 100.00% 100.00%
  54. Vertical Analysis Profit and Loss Account 2018 2017 2016 2015 2014 Interest and Revenue Income 67 .01% 54.01% 51.78% 55.15% 56.09% Interest Paid on Deposit,Borrowings etc. 48.51% 43.59% 49.79% 53.53% 53.25% Net Interest Income 18.50% 10.42% 2.00% 1.62% 2.84% Investment Income 24.95% 35.21% 37.70% 34.89% 31.20% Commission,Exchange and Brokerage 5.25% 8.14% 7.46% 7.60% 10.40% Other Operating Income 2.79% 2.63% 3.06% 2.37% 2.31% Total Operating Income 51.49% 56.41% 50.21% 46.47% 46.75% Salaries & Allowances 23.06% 25.75% 24.30% 16.22% 14.78% Rent,Tax,Insurance,Light etc. 2.31% 2.15% 2.56% 1.99% 1.82% Law charges 0.06% 0.06% 0.09% 0.06% 0.05% Postage,Telegram & Stamp, telecommunication 0.54% 1.01% 0.84% 0.58% 0.38% Stationery,Printing & Advertisement etc. 0.38% 0.40% 0.50% 0.65% 0.60% Chief Executive’s Salary and fees 0.01% 0.01% 0.01% 0.01% 0.01% Directors fees & allowance 0.01% 0.01% 0.01% 0.01% 0.01% Auditor’s fees 0.01% 0.01% 0.01% 0.01% 0.01% Depreciation & Repairs of bank’s assets 3.06% 3.17% 2.22% 2.26% 1.72% Other expenditure 4.78% 4.34% 6.27% 4.20% 1.62% Total Operating Expenses 34.23% 36.92% 36.81% 25.99% 21.00% Profit/(Loss) before Amortization, Provision & Tax 17.26% 19.49% 13.40% 20.47% 25.75% 0.00% 6.94% 6.66% 6.92% 7.26% 17.26% 16.30% 10.19% 17.37% 22.56% Provision for loans and advances 2.67% -12.09% 19.72% 12.97% 9.81% Provision for off balance sheet exposure 0.00% 0.95% 0.00% 0.14% -0.72% Provision for diminution in the value of Investment 0.00% -1.71% 2.25% 2.62% 4.06% Provision for employees benefits 2.20% 3.26% 2.58% 1.87% 1.80% Other provision 5.12% 2.68% 3.78% 1.17% 3.52% Total Provision 9.99% -6.91% 28.33% 18.77% 18.47% Total Profit before Tax 7.26% 23.21% -18.13% -1.40% 4.09% Current Tax 6.76% 6.43% 5.61% 0.31% 0.30% Deffered Tax -1.64% 0.57% -6.91% -3.23% -0.98% Net profit /(loss) after Tax 2.15% 16.20% -16.83% 1.52% 4.76% Operating Income Amortization for valuation adjustment Profit/(Loss) before Provision & Tax Provision for Loans & Advance/Investments Provision for Taxation 55
  55. Credit Rating by Alpha Credit Rating Limited Alpha Credit Rating Limited (ACRL) has affirmed the rating of the Agrani Bank Limited With Government Support Stand Alone (ABL) on the basis of its financials up to Date of Rating : 30 June 2018 Date of Rating: 30 June 2018 December 31, 2017 Valid Till : 29 June, 2019 Valid Till : 29 June, 2019 and other qualitative Rating Mode: Rating Mode: Government Support and quantitative Without Goverment Support information up to Long Term Rating : AAA the date of rating. Long Term Rating : A Short Term Rating: ST-1 The rating Short Term Rating: ST-2 assigned by Outlook: Stable Outlook: Stable them to the bank is as follows: Rating Standard ‘AAA’ : Exceptionally Strong Capacity ‘ A-’ : Strong Capacity ‘ST-1’ : Superior Capacity ‘ST-2’ : Strong Capacity
  56. Message from Chairman Dr . Zaid Bakht Chairman, Board of Directors Dear Shareholders Assalamualaikum glimpse of the world and Bangladesh economy in recent times. It is my pleasure to welcome you all to the 12th Annual General Meeting of Agrani Bank Limited. On behalf of the Board of Directors, I have the honor of presenting before you the audited financial statements of the Bank for the year ended 31 December 2018. The performance of Agrani Bank Limited has been remarkable during the last few years, not only in terms of business growth – but also in terms of advancements in technology, innovation, human development and risks management and controls. All these have contributed towards a strong foundation for the years ahead. After a robust growth in 2017 global economic growth stumbled a bit in 2018. According to the latest IMF World Economic Outlook (January 2019) global economy grew at 3.8 percent during 2017 and the growth is estimated at 3.7 percent for 2018. Global growth for 2019 is projected at 3.5 percent which is 0.2 percent lower from the October outlook. The downward revision reflected continued trade tension, tighter global financial conditions and higher commodity prices, as well as a weaker outlook for some key emerging market and developing economies arising from country specific factors. At the outset, I recall with profound respect the architect of our Independence, the greatest Bangalee of all times, the father of the nation, Bangabandhu Sheikh Mujibur Rahman. It is because of his visionary leadership, Bangladesh came into being as an independent state in the world map. I remember with high esteem the martyred great national leaders of Bangladesh. I also pay my tribute to the martyred heroes of our liberation war in 1971. The Bangladesh economy grew at a rate of 7.86 percent in FY2017-18, satisfactorily up from 7.28 percent growth in FY2016-17, driven by strong domestic demand with support from robust credit growth, exports and remittance inflows. The per capita national income reached USD 1,751.00 in FY2017-18, which was USD 1,610.00 in FY2016-17. Aided by moderating food inflation from lower rice prices, headline CPI inflation (point to point) declined to 5.35 percent in December 2018. Consequently, 12 month average inflation edged down to 5.54 percent in December 2018. Valued shareholders, before focusing on bank’s activities and performances, I would like to give you a
  57. Although 2018 was not an easy year for the banking industry in Bangladesh , Agrani Bank Limited performed remarkably well in terms of key indicators. In 2018, the deposits of Agrani Bank increased by 17 percent and reached Tk. 62,193 crore from Tk. 53,035 crore in 2017. Total loans and advances of the bank in 2018 stood at Tk. 39,575 crore as against Tk. 31,912 crore in 2017, implying nearly 24 percent growth. In 2018, total import was Tk. 23,551 crore which was Tk. 13,267 crore in 2017. Total export for the bank was Tk. 8,280 crore in 2018 and Tk. 7,058 crore in 2017. Classified loans of the Bank increased marginally to 17.67 percent of total loans and advances in 2018 as opposed to 17.45 percent in 2017. Like preceding years, the Bank succeeded in posting positive operating margin. In 2018, operating profit of Agrani Bank stood at Tk. 832 crore. The inflow of foreign remittance through different channels of ABL stood at Tk. 12,680 crore in 2018 which is 20 percent up from Tk. 10,605 crore in the previous year 2017. Agrani Bank will continue its stride towards excellence in the coming days. In that pursuit the bank will place emphasis on customer-centric services with the following as its cutting edge: Stronger business relationship with SME customers Enhanced Digital Banking opportunities, and Investment in human capital and technology development I would like to take this opportunity to thank all our clients that choose to work with us. I want to assure them that the bank management and all employees across rank and file are deeply committed to delivering best in services in everything we do, so that we can be the preferred choice in the eyes of our customers. I would also like to thank our valued shareholder, customers and business partners, Bangladesh Bank and the Government of Bangladesh for the support that have been given to us. With their unfaltering faith and strong support, I strongly believe that Agrani Bank Limited will move ahead with greater achievements in the coming days. May Allah bless us in realizing our vision for the Bank’s prosperity. Dr. Zaid Bakht Chairman The Board of Directors
  58. Message from Managing Director and CEO At the very outset , I would like to reminisce with great esteem the great architect of our independence, the greatest Bangalee of all times, the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman under whose legendary and visionary leadership, a country named Bangladesh came into being and emerged in the comity of nations. I also call to mind those valiant hearts and martyrs of 1971 whose great sacrifice have given us the dignity as the citizens of an independent country. I commence this overview with a sense of deep satisfaction about Agrani Bank Limited. As I look back on 2018 – in fact, the last decade – it is remarkable how extraordinarily our Bank has carried through. And I am not only talking about our strong financial performance – but how much we have accomplished to help our clients, customers and communities all across the country. ABL is an exceptional institution with a rich heritage and promising future. Agrani Bank Limited carried its business in a more favorable environment, one of the positive in recent years. Mohammad Shams-Ul Islam Managing Director and CEO We continue to make excellent strides around technology, risk and controls, innovation, diversity of business and thus able to contribute to the socio-economic development of the country with a big difference. We have helped communities-large and small – by doing what we do best by creatively expanding our arms through Social Corporate Responsibility programs. Throughout a period of profound political and economic upheavals around the world, Agrani Bank Limited has been steadfast in our commitment to the clients, communities, countries we serve earning an exceedingly fair for our stakeholders. Agrani Bank Limited embarked upon its journey of 2018 with the aim of achieving cherished goals and higher vision and made headway fairly by attaining some stellar achievements. Maintaining trust is more important than ever in today’s global business environment. Wherever ABL operates, we strive to conduct our business in a manner reflecting the ethics, values, and norms which are in force in banking industries. With profound regards, we follow our regulators for the greater interest of our country. ABL has numerous policies and systems in place
  59. to help ensure that our business practices and operations are consistently effective , responsive and highly principled. We are committed to achieve this through integrity and sound corporate governance. Our rebuilding and progressive renaissance is not yet over. Virtually, everywhere in the Bank there is still much to do, partly because of the constantly evolving regulatory landscape. As we look forward, the focus has to be trained squarely on revenues and profitability – without making any compromises in our risk management and controls. We have to achieve sustained earning growth. In order to do this we have to continue investing, serve our existing clients better and win new clients for the Bank. The complexities of business in global economy create challenges for companies striving to operate in an effective and socially responsible manner. So we focus on innovation, excellence and variety in our products and services. We conform to global standard of business to sustain in a competitive corporate world. We continuously withstand for excellence in our service and embrace our obligation to be a good corporate citizen. We work in line with the need and demand of the people of our country and remain committed to serving them. Openness creates opportunities for dialogue with our customers, business partners, stakeholders and employees. We maintain corporate transparency and conduct ethical business practices. Such would enable awareness of emerging problems and fast resolution turnaround, hence greater efficiency. In 2018, our focus was to regain, reaffirm and revitalize ourselves to reach the apex of banking industry. We have built upon the progress we made last year by further strengthening our governance, risk management, corporate culture, rendering service to community, widening our products and engaging with stakeholders. ABL was repositioning itself to cater to the changing needs of its customers and focused on attuning itself to providing customer centric services across the land. The year 2018 saw geopolitical uncertainty, trade tensions and market volatility which bore down on economies, industries and businesses. Against this backdrop, ABL achieved healthy growth in almost all areas of operation. Even as global uncertainties heightened in 2018, we were steadfast in our aim. Our performance during the year reflected this discipline. A SNAPSHOT OF HOW WE PERFORMED AS AN ORGANIZATION Operating Profit We enjoyed a productive year overall in 2018.We accelerated a whopping operating profit of Operating Profit BDT 832 2.33% crore (8.32 billion) that means the Bank registered a 2.33% growth in profit. Net Interest Income We also achieved new height in net interest income. Net interest income rose 105.06% to BDT 892 crore (8.92 billion) from a year ago largely on the back of restriction Net Interest Income of classified loan and 105.06% healthy loan growth and also attributed to higher yields from interbank and non banking financial institutions’ balances. Our total loans and advances reached to BDT 39,575 crore (395.75 billion) by increasing 24.01 % up on 2018 and investment in interbank and non banking financial institutions rose by 62.11% to BDT 11,867 crore (118.67 billion). Expenses Although total expenses increased by 18.82% over the year 2017, the cost to income ratio Cost to Income increased Ratio slightly by 2.24% to 2.24% reach up to 82.75% which means we are on the right track in terms of running the Bank efficiently and cost effectively. Expenses increased by reason of salary structure and remuneration, investment in technology and infrastructure. These investments reflect our ongoing efforts to keep our commitment to serve the people
  60. By improving the deposit mix , the Bank was also able to reduce the cost of deposit. The ratio of low & no cost and high cost deposit stood at 45% and 55% respectively which was 46% and 54% in 2017. Because of such cost reduction, bank would offer loans to good corporate borrower at highly competitive rates that contributed to maintain moderate business growth. plan for lowering the NPL to single digit within couple of years. To reduce the classified loans and arresting new classification, higher authorities has enhanced intensive supervision and strict follow-up at the field level. To bring down the amount of classified and written off loan of the Bank to a logical level, financial incentives have been provided for the greater motivation of the executives and officers and separate committees, including executives and officers, were formed. Net Profit After Tax (NPAT) Deposit, Loans & Advances We made net profit of BDT 104 crore (1.04 billion) in 2018 because of target-oriented and pragmatic measures taken by the Management. We maintained our strong deposit position up by 17.26 percent over the last year to BDT 62,193 crore (621.93 billion).Loans and Advances stood at 39,575 crore (395.75 billion) in 2018 with a growth rate of 24.01% over 2017. Advance Deposit Deposit Ratio (ADR) has improved touching 17.26% to 63.63 percent. Loans and ADR increased by Advances 3.46% as a result 24.01% of disbursing new loan and ADR diversification 3.46% of loan products specially to the well reputed corporate and big conglomerates. We continued to manage actively and to optimize our asset-liability mix. The gradual upward propensity of deposit shows the trust that our depositors have on us which makes us capable to fund more to the borrowers. shaping up the future capabilities. Deposit Mix ROE We could be able to register growth in profitability ratios. At the end of 2018, Return on Equity (ROE) stood at 2.49 % which shows a positive trend. EPS Earning Per Share (EPS) stood at BDT 5.00 in 2018. These growth rates indicate the enhancing trend of profitability. EPS is the portion of company’s profit allocated to each outstanding share manifesting Bank’s profitability. NPL Management We could able to pull down the NPL legacy from alarming 25.59% of 2016 to 17.67% in 2018. We were wading through to break the legacy of NPL. We have chalked out a perspective Total Assets We decided to accelerate quality asset throughout the year. Our total asset accumulated to BDT 78,915 crore (789.15 billion) in 2018 which was BDT 67,392 crore (673.92 billion) in 2017 up by 17.09 percent. We became able to increase our Assets asset significantly 17.09% over the year. We were able to keep the positive trend of Return on Asset (ROA) compared to previous years. ROA stood at 0.13 percent which is attributable to our efficient management. Capital Adequacy Ratio (CAR) Bangladesh implemented Basel-III in banking sector. Our capital position remained healthy. Despite several constraints on and challenges in operation, the Bank has been able to maintain 10.09% as capital against the minimum requirement of 10% of total risk weighted assets as per requirement of Basel-III Accord. Our Common Equity remained strong and upward at 6.84 % which was 6.14% in 2017. Foreign Remittance ABL has been able to keep the first position unchanged in the year 2018 to earn foreign remittance among state-owned banks. ABL has earned $1515.07 million foreign remittance, the highest among the state-owned banks and the second highest among all banks in Bangladesh. Agrani Bank is accomplishing an important
  61. role by providing foreign currency in the national economy and in the development of 1st position GDP as well as among Statepoverty reduction owned Banks of rural community , employment generation and creating the opportunity to receive education and healthcare. To create employment opportunities abroad, ABL is providing loan through ‘ABJL’ project at a single digit interest. Up to December 2018, ABL disbursed BDT 74.64 million in this sector. Currently we have arrangement for bringing foreign remittance of Bangladeshi diaspora living in Singapore, Malaysia, Canada, Australia, and Brunei and so on. Import-Export We were able to catch up the growth of import of the country. Import of the Bank was BDT 23,551 crore (235.51 billion) registering a 77.51% growth. Besides export was BDT 8,280 crore (82,800 million) showing a growth of 17.29% which we think would improve in the coming years. Capital, Provision Although many banks and NBFIs in Bangladesh are stumbling for capital deficit, ABL could be able to maintain minimum capital. ABL has no provision deficiency as well. Contribution in Capital Market and Liquidity Support ABL played a pivotal role in providing liquidity in banking sector in 2018. Although the market was faltering for liquidity crunch, ABL maintained abundant liquidity and supplied the liquidity to other Banks and NBFIs, hence stabilizing the liquidity in the banking arena. ABL has played significant role in money market through investing BDT 9,875 crore (98.75 billion) in Treasury Bonds and Bills. Agrani Bank plays a vital role in strengthening the capital market by supplying fund to ICB, dedicated to strengthening the country’s capital Market. The Bank has provided funding of BDT 1,750 crore (17.50 billion) to ICB till December, 2018. The Bank also invested BDT 6,048 crore (60.48 billion) in the capital market in various forms. While deposits are our main source of funds, we also tapped debt capital markets to build term funding capabilities and to optimize funding costs. Premier role of ABL in financing capital deficit in banking sector is praiseworthy and known to all concerned in the industry. As of December 31, 2018 ABL has provided BDT 4,312 crore (43.12 billion) of funds through purchase of Tier-II bonds to increase the capability of the capital of 43 private banks in particular. Credit Rating Considering ABL a 100% State owned Commercial Bank (SCB) and highly integrated Government Supported Entity (GSE), the Credit Rating company, from risk point of view, affirmed its ‘AAA rating in the Long Term and ‘ST-1’ rating in the Short Term. The highest ratings have been assigned in consideration of implied commitment of the Government of the Peoples’ Republic of Bangladesh to the Bank to extend its support through policy and other matters to address any adverse situation. Pioneering Agent Banking In order to reach people in greater scale in their doorsteps, ABL has introduced ‘Agent Banking’ first ever among the state-owned banks. Agrani Bank has already been delivering the service through 200 agent booths. The project would run under the‘Agent Banking Guideline’ that has recently been formulated by Bangladesh Bank in a bid to achieve ‘Financial Inclusion’ goal of the nation. We believe that we will be able to bring greater rural population under the banking facilities through ‘Agent Banking’. We have a plan to extend ‘Agent Banking’ network to bring the people deprived of banking amenities under the banking arena. The service will be introduced immediately in 143 Upazilas as there is no branch of our bank in those areas. On top of that, we have launched ‘Remittance Only Points’- an innovative step augmenting remittance through which around 500 Remittance Only Points will work relentlessly in 7 days a week to catch-up remittance. SME Financing In order to make SME financing more active and relevant in recent times, ABL has created a comprehensive vision for the development of small
  62. and medium industries in 2018 as the development partner of the government . Until December 31, 2018 BDT 4,303 crore (43.03 billion) was distributed in the SME sector. According to Memorandum of Understanding (MOU) signed with Bangladesh Bank (Central Bank) in 2018, SME target was fixed at BDT 3,500 crore (35.00 billion) against which BDT 4,303 crore (43.03 billion) has been distributed in this sector and 122.94 % of the distribution target was achieved which is the top among the SCBs. ABL founded a subsidiary named “Agrani SME Financing Company Ltd.” for the betterment and development of SME sector in Bangladesh. Contribution to National Exchequer ABL also esclates the economy by collecting and depositing VAT, tax and excise duty to the government treasury in time and properly. ABL has credited a total of BDT 2,575 crore (25.75 billion) of revenue in the state treasury in the last five years against VAT, tax and excise duty. In the year 2018, the Bank deposited BDT 630 crore (6.30 billion) in the sate exchequer. Diversification in Portfolio Management We have expanded our business to new areas for diversifying our portfolio. In 2018, we introduced several deposit and loan products to diversify our portfolio.We believe these enterprises will provide opportunity for the future sustainable growth. Expanding our Horizon ABL is moving forward to establish a strong foothold in the country by taking advantage of the steady growth of Bangladesh. ABL is enlarging its nationwide footprint by continuously expanding its branch networks. The number of branches of ABL in 2018 stood at 953. Human Resource Development To convert our workforce into human asset, we provided world class training to them at home and abroad. For better management analysis of human resources, our own training institute called ABTI (Agrani Bank Training Institute) which has now emerged as center of Excellence introduced IHRM (Integrated Human Resources Management) Software. We provided quality training, covering all aspects of banking industry through the year for the welfare and development of our workforce. For the enhancement of human asset, ABTI (Agrani Bank Training Institute) has covered 10,992 participants by conducting 251 courses/ workshops in 2018. During the year we sent 73 people abroad attending various trainings and workshops, etc. The board frames and approves service rules relating to recruitment, promotion, transfer, disciplinary and punitive measures, human resources development etc. Core Risk Management We remained compliant in all aspects of legal and regulatory guidelines. We managed core risks of the Bank by enhancing managerial and operational efficiency and following the best practices of the industry. ABL has a separate division named ‘Risk management division’ as to deal with risk portfolio. It coordinates all risky phylum with management. Various types of operations like stress testing, Duration Gap analysis, calculation of Minimum Capital Requirement (MCR), Liquidity Coverage ratio (LCR), Net Stable Funding Ratio (NSFR) etc. are done to find out risky events. To find out instant arisen risk, surprise visit is conducted by the delegated authority and appropriate steps are being taken instantaneously. Striving for Excellence ABL will continue to play a greater role to activate usage and consumption in the country to promote economic growth. It is indeed your unwavering faith and confidence in the Bank that gives us the zeal, inspiration and motivation to continually strive for achieving the corporate creed and excellence. Today ABL is recognized as the preferred business partner throughout the country. As we look forward to coming years, we are confident of doing our best to enhance our customers’ values by providing comprehensive personalized banking service and
  63. introducing innovative techno-savvy banking products . Looking Ahead Market volatility is likely to remain elevated in 2019. The impact of ongoing US-China trade tensions and geopolitics, the trickle-down effect of US fiscal and monetary policy settings and concerns over a China slowdown are among the factors posing risks to global economic growth. We will continue to draw upon our extensive presence, integrated network, deep knowledge and strong position in the country to help our customers convert problems into opportunities. Our future-focused investments in connectivity capabilities and digital solutions also ensure that we are well-positioned for growth, including attracting and serving country’s burgeoning digital generation. To increase the inflow of remittance is another big challenge we have to face. In this scenario, we will focus on prudent liquidity management, accelerating export business, tactful portfolio management, elevating credit growth along with NPL management. We would continue to enlarge our network and embrace cutting edge technology to provide real-time and customized banking services to our customers. Digital banking services will be our focus. Mobilizing surplus liquidity in the market and providing quality loan are our main challenges in 2019. NPL management will get greater attention. Our customers shall remain at the pivot of our all banking activities. and the Members of the Board for their trust in me, practical support and guidance to me. I would also like to thank the valued customers, wellwishers and patrons for relentless support to our endeavor. Finally, I would like to say `Thank you’ to all my devoted, hardworking and dedicated colleagues of all ranks and the Management for their toil for the best result we could achieve and especially the team connected with the tenacious work and practice for bringing to light this Annual Report of the year 2018. Acknowledgements Lastly, let me express my sincere thanks and gratitude to the Government of Bangladesh, Bangladesh Bank and other regulatory bodies for their prudent guidance towards our journey of excellence. I would like to convey my sincere thanks and profound gratitude to the honorable Chairman Mohammad Shams-Ul Islam Managing Director and CEO
  64. Management Discussion & Analysis Performance Review -2018 66 67-69 Comparative Scenario 70-71 Graphical Presentation 72-73 Segment Analysis 74-75 Signing of Accounts 2018 Future Outlook 76
  65. SIGNING OF AUDITED FINANCIAL STATEMENTS -2018 A moment of signing ceremony of Audited Financial Statements -2018
  66. Management Discussion & Analysis Performance Review -2018 Financial Highlights Financial Highlights Total Income (BDT In Crore) 3232 1,950 1,831 1,991 1,922 2,080 1,997 2,353 2,340 1,918 Total Income total income showed strong momentum and rose 43% to BDT 3,232 crore, led by new high in net interest income. It was possible because of investing higheryielding assets. 892 119 2014 435 83 69 2015 Net Interest income 2016 2017 Non-Interest income 3232 crore +43.45% 2018 Total Operating Profit Operating profit stood at BDT 832 crore that means the Bank recorded a growth of 2.36%. Operating Profit (BDT In Croe) 1074 878 BDT 813 832 832 BDT crore 555 +2.36% 2014 2015 2016 2017 2018 Net Interest Income (BDT in Crore) 892 735 113 70 2014 2015 83 2016 2017 676 2014 2015 104 2016 2017 892 crore BDT 104 crore +105.06% Net Profit after Tax The Bank reported net earnings of BDT 104 crore in 2018, 84.62% which is smaller than the preceding year. (BDT in Crore) 65 BDT 2018 Profit after Tax 199 Net Interest Income Net interest income rose 105.06% to BDT 892 crore from a year ago on the back of higher net interest margin and healthy loan growth of 24%. Net interest margin increased mainly attributed to higher yields from interbank and non-banking financial institution balances, a function of both our measured efforts in deploying excess funds in higher-yielding assets and largely on the back of reduction of classified loan and healthy loan growth. 2018 -84.62% -697 67
  67. Management Discussion & Analysis Performance Review -2018 Financial Highlights NPL Recovery (BDT in Crore) 6993 6804 5570 4440 3966 2014 2015 2016 2017 Customer Loans/Deposits (BDT in Crore) 55.64% 61.23% 53.81% 23,509 2014 43,998 24,480 2015 Loans 63.63% 60.17% 62,193 53,035 49,405 38,392 2018 39,575 26,587 NPL Recovery The Bank has become able to pull down the amount of NPL through cash recovery of BDT 319 crore, regularization of BDT 667 crore and writing off BDT 73 crore. In 2018, the total recovery of NPL amounted to BDT 1,058 crore, which was BDT 1,875 crore in 2017. NPL recovery growth rate recorded by 43.57% smaller than previous year. NPL Cash Recovery Cash recovery decreased to BDT 319 crore which is 44.62% lower than a year ago. 2017 2018 AD Ratio (%) BDT 1,058 crore -43.57% Cash Recovery BDT 319 crore -44.62% Customer Deposits/ Loans Customer Deposits Customer deposits grew 17.27% to BDT 62,193 crore, led by growth in deposits especially in no and low-cost BDT deposits. crore 62,193 +17.27% 31,912 2016 Deposits NPL Recovery Customer loans grew 24.01% from a year ago to BDT 39,575 crore in 2018 because of quality loan disbursement. Customer Loans BDT 39,575 crore +24.01% The Bank’s funding position continues to be strong with a healthy loan-to-deposit ratio at 63.63% in 2018.. Loan/Deposit Ratio 63.63 % +3.46% Loans and Advances: Percentage 2018 Dhaka Region, 62.46% Chittagong Region, 7.16% Khulna Region, 7.17% Rajshahi Region, 6.24% Barisal Region, 2.23% Sylhet Region, 1.56% Rangpur Region, 4.29% Mymensign Region, 4.24% Comilla Region, 2.57% Faridpur Region, 2.08% 68 Annual Report 2018 Loans By Geography Gross loans grew 24.01% year-on-year to BDT 39,575 crore as at 31 December 2018. Dhaka region which accounted for 64.69% of the total loan reported 28.45% growth year-on-year to reach BDT 25,603 crore while other regional average growth of 16.63%. 39,575 crore +24.01%
  68. Management Discussion & Analysis Performance Review -2018 Financial Highlights Shareholders’ Equity/Return on Equity Return on Equity (ROE) 5.02% 2014 16.59% Shareholders’ equity increased 2.11% from the last year to BDT 4,159 crore as at 31 December 2018. 2.49% 1.46% 2015 2016 2017 Shareholders’ Equity BDT Return on equity is 2.49% for 2018. Return on Equity 2.49% Total Assets/Return on Assets Return on Equity (ROA) (BDT in Crore) Total assets grew 17.10% to BDT 78,915 crore in 2018 mainly on higher loan volume. 0.1659 2014 2016 2017 2018 3,448.26 1,552 1,093 2014 1,746 777 2015 TIER-1 (Core capital) crore +17.10% 0.13% Capital Adequacy Ratio (CAR) Total Capital (BDT in Crore) 2,523.80 78,915 Return on Assets Return on assets for 2018 recorded to 0.13%. -0.1906 2,644.39 BDT 0.0249 0.0146 2015 crore +2.11% 2018 -19.06% 0.0502 4,159 2,677.24 3,976.00 2,697 2,066 1,692 986 2016 1,382 2017 TIER-2 (Supplementary) 1,279 2018 Total Capital The Bank has been able to maintain 6.84 percent capital in form of Common Equity and finally maintained 10.09 percent as capital against the minimum requirement of 10% of total risk weighted assets as per requirement of Basel-III Accord CET-1 CAR 6.84% total CAR 10.09% -1.46% 69
  69. Management Discussion & Analysis Comparative Scenario Comparative Analysis Crore Taka unless otherwise specified Particulars 2018 2017 Change Interest revenue 3,231.52 2,253.05 43.43% Interest cost 2,339.40 1,818.32 28.66% 892.12 434.73 105.21% Income from investment 1,203.06 1,468.92 (18.10) % Other operating revenue 387.86 449.33 (13.68) % Total operating revenue 2,483.04 2,352.99 5.53% Salary & allowances 1,112.29 1,074.68 3.50% Other operating cost 538.57 465.30 15.75% Total operating cost 1,650.86 1539.98 7.20% 832.17 813.01 2.36% 0 133.04 (100.00) % Provision for loans and advances 128.72 (504.20) 125.53% Other provision 353.14 216.13 63.39% Profit before tax 350.31 968.05 (63.81) % Provision for tax (with deferred tax effect) 246.76 292.12 (15.53) % Net profit after tax 103.55 675.93 (84.68) % Paid up capital 2,072.29 2,072.29 - Total shareholders’ equity 4,158.61 4,073.46 2.09% Deposits 62,192.72 53,034.97 17.27% Total contingent liabilities and commitments 16,245.47 12,333.77 31.72% Loans and advances 39,575.30 31,911.86 24.01% Amount of classified loans 6,993.38 5,569.55 25.56% Provision kept against classified loans 2,964.68 2,750.14 7.80% Investments 15,923.02 17,087.61 (6.82%) Interest earning assets 52,014.36 39,708.40 30.99% Non interest earning assets 26,900.97 27,683.81 (2.83%) Fixed assets 1,478.36 1,556.07 (4.99%) Total assets 78,915.33 67,392.21 17.10% Performance during the year Net interest revenue Profit before amortization, provision and tax Amortization (valuation adjustment) 70 Annual Report 2018
  70. Management Discussion & Analysis Comparative Scenario Profitability and Performance Ratios Sl. No. Particulars 2018 2017 1 Net Interest income Ratio 27.60% 19.30% 2 Operating cost-Efficiency ratio 34.23% 36.92% 3 Return on Capital Employed 1.85% 2.15% 5 Net profit ratio 2.16% 16.20% 6 Cost to income ratio 82.73% 80.51% 7 Return on assets 0.13% 1.00% 8 Return on equity (after amortization, provision & tax) 2.49% 16.59% 9 Non-interest expenses to total assets 2.09% 2.29% 10 Non-interest income to total assets 2.02% 2.85% 11 Interest margin to total assets 1.13% 0.64% 12 Earnings per share (Taka) 5.00 32.62 13 Net asset value per share (Taka) 201 197 14 Cost of fund 6.95% 7.03% 15 Return on investment 7.56% 8.60% 16 Profit per Employee (Crore Taka) 0.07 0.06 17 Non-Performing Loans to total Loans 17.67% 17.45% 2018 2017 14.53% 27.86% 6.84% 6.97% 1.03 1.10 94.73% 93.95% 1797.48% 1554.60% Liquidity and Solvency Ratios Sl. No. Particulars 1 Statutory Liquidity Ratio 2 Cash Reserve ratio/ Liquid Asset ratio 3 Current Ratio 4 Debt to Assets Ratio 5 Debt Equity Ratio 6 Loans & advances to deposit ratio 63.63% 60.17% 7 Loans & advances to total assets ratio 50.15% 47.35% 8 Provision to total loans & advances 8.31% 9.85% 2018 2017 10.09% 10.24% Capital Adequacy Ratio Sl. No. Particulars 1 Capital adequacy ratio 2 i. Tier I Capital 6.84% 6.14% 3 ii. Tier II Capital 3.25% 4.10% 71
  71. Management Discussion & Analysis Graphical Presentation of Performance and Efficiency Ratio Deposits (BDT in Crore) 38,392 2014 62,193 43,998 2015 49,405 2016 Loans and Advances (BDT in Crore) 39,575 53,035 2017 31,912 2018 Advance /Deposit (AD) Ratio 23,509 24,480 2014 2015 26,587 2016 2017 2018 813 832 2017 2018 Operating Profit (BDT in Croe) 1074 63.63% 61.23% 878 60.17% 555 55.64% 2014 2015 53.81% 2016 2017 2018 Profit after Tax 2014 2015 2016 Return on Equity (ROE) (BDT in Crore) 16.59% 676 5.02% 199 2014 104 65 2015 2014 2016 -697 72 Annual Report 2018 2017 2.49% 1.46% 2015 2016 2018 -19.06% 2017 2018
  72. Management Discussion & Analysis Graphical Presentation of Performance and Efficiency Ratio Return on Assets (ROA) Cost to Income Ratio (CIR) 86.60% 82.73% 1.00% 0.40% 79.52% 0.12% 2014 2015 0.13% 2016 2017 2018 -1.12% 2014 2015 2016 2017 Total Assets (BDT in Crore) 9.01% 2015 8.42% 2016 7.03% 6.95% 2017 2018 49,487 2014 2018 78,915 56,535 2015 62,357 2016 67,392 2017 2018 Capital to Risk Weighted Asset Ratio (CRAR) NPL Ratio 25.59% 16.87% 74.25% 2014 Cost of Fund 9.58% 80.51% 10.44% 10.24% 18.95% 17.45% 17.67% 10.03% 10.09% 9.54% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 73
  73. Management Discussion & Analysis Segment Analysis (Consolidated) Agrani Bank (Consolidated) Crore Taka unless otherwise specified Particulars Operating Revenue Profit before Tax Total Asset 4,721.48 328.12 76,661.61 Islamic Banking 46.59 12.51 399.95 Offshore Banking 34.85 9.68 927.45 Local Subsidiaries 49.33 14.77 1,115.06 Foreign Subsidiaries, 11.28 (0.64) 31.60 4,863.53 364.44 79,135.67 Conventional Total Operating Revenue (Consolidated) Profit before Tax (Consolidated) Conventional 4721.48 Conventional 328.12 Islamic Banking 46.59 Islamic Banking 12.51 Offshore Banking 34.85 Offshore Banking 9.68 Local Subsidiaries 49.33 Local Subsidiaries 14.77 Foreign Subsidiaries 11.28 Total Asset (Consolidated) Conventional 7661.61 Islamic Banking , 399.95 Offshore Banking 927.45 Local Subsidiaries 1115.06 Foreign Subsidiaries 31.60 74 Annual Report 2018
  74. Management Discussion & Analysis Segment Analysis Agrani Bank (Solo) Crore Taka unless otherwise specified Particulars  Operating Revenue (SOLO) Profit before Tax Total Asset 4,741.00 328.12 77,587.90 Islamic Banking 46.59 12.51 399.95 Offshore Banking 34.85 9.68 927.45 4,822.44 350.31 78,915.33 Conventional Total Profit before Tax (Solo) Operating Revenue (Solo) Conventional 4741.00 Conventional 328.12 Islamic Banking 46.59 Islamic Banking 12.51 Offshore Banking 34.85 Offshore Banking 9.68 Total Asset (Solo) Conventional 77587.9 Islamic Banking 399.95 Offshore Banking 927.45 75
  75. Management Discussion & Analysis Future Outlook Future Outlook Future Outlook • to increase deposits - especially Low cost & No cost deposit; • to confirm the institutional good governance through the implementation of compliance culture; • to pull down the rate of classified loan to single digit; • to prevent classification of new loans; • to keep rescheduled loans regular; • Recovery of classified and written off loans; • to Increase import, export and foreign remittance; • Keeping the balance of retained earnings of the Bank to positive figure; • Improving the quality of technology-friendly services; • to build skilled workforce through training; • to confirm cyber ​​security; and • preserve Capital Adequacy as per Basel-III. Mitigation Strategies To overcome the challenges, we have taken various initiatives. Our management takes short, medium and long term strategies to mitigate the challenges. • Deposit collection target has been set to the circles, zones and branches. We declare incentive 76 Annual Report 2018 for the officers to collect ‘No cost & Low cost deposit’. We also communicate with our valuable customers, Government and Private Organizations. • The Bank is committed to establishing the highest level of ethics and compliance. We are giving importance to improve the bank’s credit risk management system, ensuring transparency in internal audit, monitoring and supervision and ensuring prompt trial, andvisible punishment of those involved in scams and irregularities to restore good governance in the Bank. • Various steps have been taken for ensuring the realization of cash against the classified and written off loans. At the beginning of the year, all zones and branches have been informed about the collection of cash targets against the classified and written off loans. Under the leadership of the Division Heads of the Head Office, arrangements have been made to monitor the collection of classified and written off loans. · Our people is our asset. Training programs strengthen knowledge and awareness of leadership. Agrani Bank recognizes the contribution of training towards enhancing efficiency and profitability. The Bank’s training policy applies to all employees and aims at ensuring that appropriate training is imparted to enable individuals to reach satisfactory performance levels. • to establish new entrepreneur for export and import business, we are extending our hand of cooperation to them by financing and professional counseling. Number of authorized dealer branch of the bank has to be increased gradually by identifying actual demand of new exporter and importer located in different regions in our country. • We have a dedicated team who are diligently ensuring cyber security from external malicious attacks. They initiate awareness programs, educate users about safe usage of our intellectual properties and also conduct periodic penetration/ vulnerability testing to identify weaker links to the system. • For Cyber Security and ICT risk mitigation, the Bank has updated ICT security policy which is in line with the latest Bangladesh Bank ICT guideline and the vastly practiced framework. • Agrani Bank Limited with its different exchange houses sponsored promotional programme during festival to motivate our remitter to send the money through legal channel. In this promo there are gifts for each remittance receiver from Agrani Bank Limited and mega gifts for 3 receivers selected through lottery. In addition to that, to motivate our branch level officers, gifts and prizes are awarded. • Agrani Bank adopts the standardized approach for credit risk in relation to implementation of Basel-III to maintain Capital to Risk Weighted Assets Ratio (CRAR) at a minimum of 10 percent.
  76. DIRECTORS ’ REPORT to shareholders Global Economy Bangladesh Economy Business Performance Review Director’s Report in Bangla 78-79 80-83 84-103 104-118 77
  77. Directors ’ Report to the Shareholders Global Economy Bismillahir Rahmanir Rahim Respected Stakeholders: Assalamu Alaikum, On behalf of the Board of Directors, I am really pleased to present before you the Audited Financial Statements and Annual Report- 2018 of Agrani Bank Limited. The report seeks to evaluate and analyze the Bank’s overall operational performance of 2018 compared to that of 2017. I would request you to read the information and analysis in connection with the audited financial statements presented here. The report presents a concise scenario on the overall performance of the Bank in perspective of global and Bangladesh economy. Global Economy The global economy began in 2018 with strong growth prospects. But as the year progressed, momentum faded and growth trends diverged. After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year. In April 2019 World Economic Outlook (WEO) of International Monetary Fund (IMF) global growth is projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019. The growth forecast for this year has been downgraded for almost all the industrialized developed countries by the global multilateral agencies and other specialized organizations. The U.S. economy is projected to slow from 3 percent in 2018 to 2.6 percent in 2019. The US-China trade war has now emerged as the biggest single 10 8 Real GDP Growth, by country Group (Year over year) World Advanced economies Emerging/developing economies 6 4 2 0 2 1980 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10 12 14 16 18 28 22 78 Annual Report 2018 risk to the global economy. This trade war, even with the current levels of tariffs in place, will shave off an estimated 0.2 percentage point off the global economic growth Global Trade Global trade has grown at 3.0% in 2018 against the estimated growth of 3.2%. Global trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty. WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019. Global Inflation Rate A temporary waiver in US sanctions on Iranian oil exports to certain countries and record-high US crude oil production as well as weakening global growth put downward pressure on global energy prices. According to the latest IMF World Economic Outlook (April 2019) oil prices dropped from a four-year peak of $81 a barrel in October to $61 in February. Global inflation is expected to decline to 1.6 percent this year in advanced economies, from 2.0 percent in 2018. Consumer price inflation (CPI) remained muted across advanced economies, given the drop in commodity prices. In the United States and United Kingdom, it is close to 2 percent, whereas among emerging market economies, core inflation has remained below 2 percent in China. Major Challenges Global trade, investment, and output remain under threat from ongoing trade tensions. The major challenge of the world economy is the yearlong trade war between the United States and China. Even if a trade deal is reached, it may do little to resolve tensions between the world’s two largest economies. As both countries battle for global dominance, stature and wealth the trade tensions may persists for decades. If trade tensions fail to ease, activity may fall short of expectations. Cyber attacks on financial infrastructure are another source of risk because they can severely disrupt cross-border payment systems and the flow of goods and services. Political risk factors that include policy uncertainty about the agenda of new administrations or surrounding elections, geopolitical conflict in the Middle East, and tensions in east Asia combined with trade tensions and tighter global financial conditions could have
  78. Directors ’ Report to the Shareholders Global Economy World Economic Perspective for 2019 The stronger momentum experienced in 2017 is expected to carry into 2018 and 2019, with global growth revised up to 3.9 percent for both years. The upward revisions to the global outlook result mainly from advanced economies, where growth is now expected to exceed 2 percent in 2018 and 2019. This forecast reflects the expectation that favorable global financial conditions and strong sentiment will help maintain the recent acceleration in demand, especially in investment. The Macroeconomic Situation of Bangladesh According to the World Bank report, Bangladesh is among the five fastest growing economies in the world. The growth was caused by manufacturing, construction and a bumper crop harvest, coupled with private consumption, remittance and rural income growth. The economy of Bangladesh is moving forward, growing at a decent pace. Domestic demand growth appears to have been the driving force with private consumption contributing 4.7 percentage points and investment contributing 3.25 percentage points. The per capita national income reached US$1,751 in FY2017-18. Provisional data showed that the per capita GDP rose at the same pace to US$1,827 in 2018-19 from US$1,675 the previous year. According to the provisional estimation of the Bangladesh Bureau of Statistics (BBS) Bangladesh’s GDP growth rate is going to reach 8.13% in fiscal year 2018-19, against 7.86% recorded in the last fiscal year. Economic Growth Bangladesh will be the third fastest growing economy in the world in terms of achieving high Gross Domestic Product (GDP) in 2019, according to a United Nations report. The Bangladesh economy recorded 7.86% growth in FY18, exceeding the FY18 budgetary target of 7.40%. A stable political and macroeconomic environment in FY18 contributed to a broad-based pick-up in economic activity. According to Bangladesh Bureau of Statistics (BBS) GDP at current market prices stood at Tk.22,50,479 crore in FY201718. No major political or security-related disruptions occurred in FY18, suggesting that the country has gradually moved into a new regime that will be marked by greater political stability and consequently higher growth rates. Massive investment in power and infrastructure projects are expected to start to pay off in the near future which will boost the growth by enhancing the real economy. Agricultural sector Bangladesh is a large deltaic country where agriculture remains a very important sector of its economy. According to preliminary estimate of BBS, in FY2017-18, food grains production stood at around 413.25 lakh metric tons (MT) of which Aus accounted for 27.09 lakh MT, Aman 139.94 lakh In Percent outsize effects on sentiment that reverberate on a larger scale. 9 8 8 7 7 6 6 5 5 4 FY13 FY14 GDP growth FY15 FY16 FY17 FY18 Per capita real GDP growth Source: Bangladesh Bureau of Statistics. MT, Boro 195.76 lakh MT, wheat 11.53 lakh MT and maize 38.93 lakh MT. After being self-sufficient in fish production for the first time in 2018 Bangladesh was ranked third (10.48 lakh tonnes) in producing fish from inland water-bodies and fifth (22 lakh tonnes) in world aquaculture production according to a report of Food and Agriculture Organization (FAO).Currently Bangladesh ranks 4th in Tilapia production in the world and 3rd in Asia. National fish Hilsha as a single species has been making the highest contribution to the country’s total fish production. ‘Geographical Indication Registration Certificate’ has been achieved for our national fish Hilsha. Industry Sector  In a developing country like Bangladesh, industrialisation is an essential pre-requisite for sustainable economic development and achievement of social progress. Here the contribution of Industry Sector to GDP is progressively increasing. According to BBS, the contribution of the broad industry sector to GDP has been estimated at 79
  79. Directors ’ Report to the Shareholders Bangladesh Economy 33.66 percent in FY2017-18 which was 32.42 percent in FY2016-17. Among the fifteen sectors of GDP, the broad industry sector includes four sectors namely mining and quarrying, manufacturing, electricity gas and water supply and construction. Among the broad industry sectors the contribution of the manufacturing sector is the highest. According to the GDP of FY2017-18 the contribution of the manufacturing sector in real GDP is 22.85 percent which was 21.74 percent in FY2016-17. The Bangladeshi economy has been one of the world’s fastest growing economies in recent years, lauded by such institutions as the World Bank. The ready-made garment sector has been the main driver of this growth. Our whole RMG sector—particularly Small and Medium Enterprises (SMEs) havo to face real challenges of upcoming era of ultramodern technology and innovation. 29.64 percent during the same period. For about a decade the ratio has been hovering between 27 and 30 percent. Overall investment crossed 31 percent of GDP for the first time in Bangladesh’s history in FY201718 mainly due to a spike in public spending on mega infrastructure projects now being implemented. The total investment to gross domestic product ratio stood at 31.23 percent, which was 30.51 percent the previous year, according to data from the Bangladesh Bureau of Statistics. Despite huge public investment in infrastructure, huge potential for demographic dividends and a demonstrated Chart 2.2 Trends in Sectoral GDP 14 Service Sector Savings & Investments According to the final data on the expenditure side, consumption increased by 2.50 percent from 74.67 percent of GDP in FY2016-17 to 77.17 percent in FY2017-18 that indicates domestic saving stood at 22.83 percent of GDP in FY2017-18 which was 25.33 percent in preceding fiscal year. However gross national savings as a percentage of GDP declined for second consecutive year to 27.42 percent from 80 Annual Report 2018 10 In percent Service sector will in future be the prime mover of the world economy, with industry and agriculture sectors losing market share significantly. Keeping with the global trend, the service sector of Bangladesh has been expanding fast and maintaining an upward trend over the years. Project handling capacities of service-oriented companies of the country are on the up with the continued development of large and medium infrastructural facilities. Of late, electronic dealings and infrastructure developments have marked significant rise alongside wholesale and retail activities. The service sector contributes the most to the national economy. In FY2017-18, the share of broad service sector in GDP stood at 52.11 percent. Within the broad service sector, the contribution of wholesale and retail trade sector (13.95%) was the highest. According to Bangladesh Economic Review 2018 the output of the ‘wholesale and retail trade’; ‘hotel and restaurants’ and ‘transport, storage and communication’ sector under broad service sector registered growth to 7.45 percent, 7.28 percent, 6.58 percent respectively in FY2017-18. 12 8 6 4 2 FY14 Agriculture FY15 FY16 Industry FY17 Services FY18 GDP Source: Bangladesh Bureau of Statistics dynamic class of entrepreneurs private sector investment is not at satisfactory level which increased marginally by 0.16 percentage points to 23.26 percent of GDP in FY201718 from the previous fiscal year. But we can be optimistic that the private investment will surely break out of the 21-23 percent of GDP trap if the efforts to establish special economic zones, liquefied natural gas terminal, base-load power plants, one-stop shop as well as mega projects are completed. Export The growth of export (f.o.b) earnings increased to 6.4 percent in FY18 from 1.7 percent in FY17 (Chart 1.8). Export as a percentage of GDP slightly decreased to 13.2 percent from 13.6 over the same period. Among the major export items, agricultural products, cotton and cotton products, knitwear, home textile, jute goods, chemical products, woven garments, and footwear products experienced a higher growth in FY18, while petroleum biproducts,
  80. Directors ’ Report to the Shareholders Bangladesh Economy engineering products, leather and leather products, plastic products, raw jute, and frozen food, slowed down the pace of export performance as these items experienced a negative growth. Chart 1.8 Trends in Export and Import Growth 29 Imports 19 14 9 Export (f.o.b) FY18 FY17 Bangladesh Economic Review 2018 Figure 2.1 : Broad Sectoral GDP Growth at Constant Prices FY16 FY13 1 FY15 4 FY14 Imports (c.i.f) grew at a rate of 25.2 percent in FY18 compared with the 9.0 percent growth in FY17 (chart 1.8). Import payments as a percentage of GDP increased to 19.9 In Percent 24 Imports (c.i.f) Source : Statistics Department, Bangladesh Bank, EPB 14.00 12.00 10.00 1 -1 0 01 2 2 3 -1 2 -1 0 01 0 01 2 Agriculture 4 5 -1 -1 2 0 01 0 01 2 Industry 6 -1 0 01 2 Services 7 4.19 12.06 6.39 2.97 10.22 6.69 0.00 2.79 11.09 6.25 2.00 7.86 7.28 7.11 6.55 6.06 3.33 9.67 5.80 4.46 9.02 6.22 4.00 6.01 3.01 9.44 6.58 6.00 6.52 4.37 8.16 5.62 6.46 2.46 9.64 5.51 8.00 8 -1 -1 0 01 2 0 01 2 GDP in FY18 from 17.4 in FY17. Import payments for food grains, milk and cream, spices, capital machinery, clinker, POL, oil seeds, fertilizer, textile & textile articles thereof, staple fiber, plastic and rubber articles thereof, raw cotton, and iron, steel & other base metals rose in FY18 compared to FY17 while those for pulses, crude petroleum and sugar declined during the same period. 2018. Remittance inflows rose to $15.53 billion in 2018 from $13.54 billion a year ago despite a falling trend in outbound jobs of Bangladeshis. Inflation Annual average inflation based on Consumer Price Index (CPI) reported an upward trend throughout FY18 except for the last two months of the financial year under review. The headline inflation rate stood at 5.78 percent in June 2018. The average inflation rate was 5.44 percent in FY17. The average Inflation rate steadily inched up since July 2017 (5.45 percent) until April 2018 (5.83 percent). For the following two months of FY18 the inflationary pressure gradually eased. Rising food inflation was mainly responsible for the increase in headline inflation rate despite declining non-food inflation rate during the first Overseas Employment and Remittances Chart 3.1 Monthly CPI Inflation in FY18 (12-month average: FY06-100) 8 6 4 General Food Jun-18 May-18 Apr-18 Mar-18 Feb-18 Jan-18 Dec-17 Nov-17 Oct-17 Sep-17 0 Aug-17 2 Jul-17 In Percent The significant rise in the country’s working age population – from 49 per cent in 1994 to 62.7 per cent in 2018 –provides a demographic dividend to the economy (UNFPA’s report on Bangladesh). Overseas employment would play a key role to utilize this demographic dividend. During FY201718 a total of 8.80 lakh Bangladeshi workers went abroad for employment. The foreign exchange remitted by the expatriate workers stood at US$14,981.69 million in FY2017-18 which is 17.32 percent more than the previous fiscal year. Of the total expatriate workers, more than 70 percent are employed in the Middle East. According to data of Bangladesh Bank inward remittance jumped by nearly 15 percent or about $2.0 billion in calendar year Non Food Source : Statistics Department, Bangladesh Bank, EPB 81
  81. Directors ’ Report to the Shareholders Bangladesh Economy half of the fiscal year. The non-food inflation rate had an upward trend for the remaining second half of the financial year. The twelve month point-to-point inflation rate stood at 5.54 percent in June 2018 compared to 5.94 percent in June 2017. Exchange Rate Bangladesh professes to maintain a floating exchange rate of its currency from 31 May 2003 but practices what is called managed floating or pegged floating regime. In order to avoid undue volatility in the foreign exchange market, Bangladesh Bank closely monitors the exchange rate movement and the buying and selling of foreign exchanges for stabilizing foreign exchange market. Bangladesh observed overall 3.77 percent depreciation of Taka against US dollar in FY2017-18 due mainly to increased demand for import payments. The central bank has continued to sell the US dollars to banks to meet their soaring demand, in fiscal 2017-18 the central bank had injected $2.31 billion -- the highest since fiscal 2009-10. The weighted average inter-bank rate stood at Tk.82.10 per US$ in FY2017-18, which was Tk.68.80 per US$ in FY2007-08. Economic Sustainability Bangladesh’s socio-economic achievements are widely acclaimed around the world. Pragmatic policy support, along with the low and stable inflation aided by a favorable macroeconomic environment helped Bangladesh become a role model of sustainable finance. Government is focusing on healthy credit growth, with particular attention to adequate credit flows to agriculture, SMEs and environmentally caring ‘green’ output initiative. These schemes would make finance and growth more sustainable.Governance system, society, communities and ecosystems must operate coherently for a sustainable economy. The whole population of Bangladesh must be incorporated into an inclusive growth paradigm. Thus, inclusive and sustainable growth and climate resilient development must encompass all aspects of Bangladesh’s development efforts. Bangladesh’s own journey towards sustainable development in the next two to three decades offer tremendous opportunities despite many challenges. Bangladesh aims to become a developed country in the early 2040s. Sustainable development pathways through incorporation of SDG successes, inclusive growth and climate resilient development offer the way forward. Financial inclusion Over the past three years, financial inclusion has made great progress and delivered numerous benefits to all segments of society in Bangladesh. The time period for 82 Annual Report 2018 implementation of the first National Financial Inclusion Strategy (NFIS) for Bangladesh has been set from 2019-2024 in the draft of the strategy. The time period was set in line with the government target to graduate to middle income country status by 2024. Bangladesh Bank has issued various circulars time to time to open bank account (popularly known as TK 10 bank account) with a minimum deposit of Tk10 to include the under-privileged and financially excluded population in the formal banking services. In 2016, Bangladesh Bank has instructed all the commercial banks operating in Bangladesh to open Tk10 bank accounts of the inhabitants of the 111 former enclaves, which have been included in the map of Bangladesh. With the initiatives of Bangladesh Bank the number of these account reached to 1.76 crore at the end of March 2018.  Social Safety Net Program The government has been continuing the social safety net programmes with a view to alleviating poverty through improvement of socio-economic condition of the ultra-poor. In 2017- 18 revised budget, an amount of Tk.48,524 crore has been allocated against social safety net programmes. The allocation is 13.06 percent of the budget and 2.17 percent of GDP of the same fiscal year. Some very common social safety net programmes such as ensuring food security, distribution of free food, food for work and test relief are being implemented by the government. The government has also implemented some project such as ‘Akti Bari Akti Khamar’(One House One Farm), ‘Ashrayan’,‘Grihayan,’ ‘Ghore Phera’ to bring a positive change in the lives of the poor. Digital Bangladesh The incumbent government has put a special emphasis on utilizing information and communication technology (ICT) as a tool for development and sustainability. Despite many bottlenecks and limitations, work is in progress for the realization of Digital Bangladesh. The country has witnessed exponential growth in internet connectivity, mobile phone usage, IT export earnings and use of ICT in education and accessibility of public services, driven by widespread digitization in the public and private sectors and policy support. Almost all services including those related to education, health- nutrition, agriculture, birthregistration, allowances under social protection programs are now easily and comfortably delivered to the doorsteps of intended beneficiaries through union information centres at union level, e-service centres in DC offices, e-centres in 147 upazilas and village post offices and 254 agricultural information centres. The latest achievement of Bangladesh
  82. Directors ’ Report to the Shareholders Bangladesh Economy is to enter the space age through successful launching of the first satellite into space on 11th May, 2018, which gave Bangladesh a newer height in using information technology. Taka in crore Particulars of Assets 2018 2017 Short and Medium Term Prospect of Bangladesh Economy Loans and Advances 39575.30 31,911.86 Investments 15923.02 17,087.61 The Medium-Term Macroeconomic Framework (MTMF), 2019-2021 envisaged the macro-economic and fiscal indicators for the budget year and the projection of two outer fiscal years. Based on the prospects and potential risks in global and domestic economic context, GDP, under MTMF, has been projected to grow at an average rate of 7.6 percent over short and medium term and predicted to attain a growth of 8.2 percent in FY2020-21. Investment as percent of GDP is expected to increase to 33.5 percent in FY2018-19 from 31.5 percent in FY2017-18. If this trend continues investment is likely to be 35.3 percent of GDP in FY2020-21, of which the investment of private and public sectors is expected to be 26.2 percent and 9.0 percent of GDP respectively. Fixed Assets 1478.36 1,556.07 69.00 270.00 16275.89 11,623.66 5593.76 4,943.01 78915.33 62,356.75 The achievement of the growth targets as set in the MTMF is contingent upon the success of certain reform programmes of the Government. Enhancement of productivity with particular attention on education, health, Information and Communication Technology (ICT) and development of physical infrastructures like power, energy, communication, transportation in a coordinated way are very important in this context. The Government has been implementing a wide range of activities in this regard, particularly to encourage private investment by reducing infrastructure constraints and creating ample opportunities for them. The success of these initiatives will dictate the extent to which the targets envisaged in MTMF will be fulfilled. FINANCIAL POSITION Authorized Capital and Paid -up Capital At present Autorised Capital of Agrani Bank Limited is BDT 2,500 crore and Paid -Up Capital is BDT 2072 crore. Shareholders’ Equity Shareholders’ equity increased 2.09% from a year ago to Tk.4158.61 crore as at 31 December 2019. Asset Portfolio The year-end asset portfolio scenarios of the Bank in 2017 and 2018 are appended below: Money at call and short notice Cash in hand and with other banks & FIs Other Assets Total Asset Portfolio Loans and Advances 7% Investments 7% 21% Money at call and short notice 17% Asset Portfolio 1% 0% 2% Fixed Assets 2% 47% 50% Cash in hand and with other banks & Fls Other Assets 26% 20% Funding Structure The year-end funding structures of the Bank in 2018 and 2017 are given below: Taka in Crore Sources of Fund 2018 2017 62192.72 53,034.97 2072.29 2,072.29 Statutory Reserve 849.61 779.55 Revaluation & Amortization Reserve in Govt. Securities 145.59 165.91 1097.72 1,099.21 61.71 59.71 (68.31) (103.21) 66351.33 57,108.43 Deposits Paid-up-Capital Assets Revaluation Reserve General Reserve Retained Surplus from Profit and Loss Account Total 83
  83. Directors ’ Report to the Shareholders Business Performance Review 0.22% 1.28% 3.12% 1.65% 0.09% -0.10% Funding Structure Deposits Paid-up-Capital Statutory Reserve Funding Structure 2018 Revaluation & Amortization Reserve in Govt. Securities Assets Revaluation Reserve General Reserve Retained Surplus from Profit and Loss Account 93.73% has been established. OBU of ABL located at EPZ Corporate Branch, Chattogram and successfully functioning as a separate entity. The main function of this Unit is borrowing and lending foreign currency both in short term and long term as well as providing International banking services. total financing of OBU increased very significantly in the year 2018 compared to the year 2017. In the year 2018 total financing from OBU in the form of Buyer’s Credit against UPAS L/Cs of different AD branches increased to USD 110.47 million from USD 33.04 million in 2017. The major imported item through UPAS L/C was machinery and industrial raw materials. Import Business BUSINESS PERFORMANCE Deposits The Bank achieved a remarkable growth in deposit mobilization. In 2018 deposit of the Bank was Tk. 62,192.72 crore compared to Tk. 53,034.97 crore at the end of previous year. The growth of deposit was 17.27 percent. to reduce the cost of fund gradually, the Bank, therefore, decided to mobilize low cost and no cost deposit. Asset Quality The Bank maintained quality of asset and this is one of the strong areas of its operation. The Bank never compromised with its standard of excellence in terms of maintaining asset quality while extending credit facilities. In order to improve the quality of our assets, the Bank Management has prioritized financing in trade and commerce by providing working capital. Moreover, some pragmatic steps have been adopted to reduce non-performing loans as well as to prevent new classification thereof. International Trade The foreign exchange market was relatively stable throughout the year. In 2018 total import of Bangladesh increased by 25.2 percent and stood at USD 58,850 Million as compared to total import USD 47,005 million in 2017. Total import of ABL in 2018 was BDT 23,551 crore. The major imported item through ABL was petroleum & petroproducts, industrial raw materials, capital machineries, machineries for misc. industry, raw cotton, chemical, food grains, medicine, milk and cream, spices, pulses, sugar, POL, plastic and rubber articles etc. Export Business In the year 2018 total export of Bangladesh increased by 6.4 percent and stood at USD 37,128 million as compared to total Export USD 34,835 million in 2017. total export of ABL in 2018 was BDT 8,280 crore. The major exported item through ABL was knitwear and woven garments, tea, raw jute, jute goods, footwear, leather goods, frozen foods, leather and handicraft products, engineering products, plastic products, cotton and cotton products, chemical products etc. The commendable share of foreign exchange business within the country is made through 42 Authorized Dealer branches of ABL. The Bank plays important role in country’s economy by operating 35 Nostro Accounts with prominent foreign banks in other country/countries through which transactions relating to Export receipts, Import payments, Inward and Outward remittances are settled as well as ear n valuable foreign currencies. Now, this Bank has become a symbol of confidence of the customers and the clients. Ways to overcome the barriers to Import & Export business by Agrani Bank Limited Apart from this, a separate off-shore banking unit (OBU) ABL monitors and operates foreign exchange business 84 Annual Report 2018 Taka in Crore Types of Business Year 2018 2017 Import 23,550.86 13,266.61 Export 82,78.83 7,059
  84. Directors ’ Report to the Shareholders Business Performance Review through all AD branches following guidelines of Bangladesh Bank, existing export policy, import policy and other rules and regulations imposed by the Government in time to time. It is an on going process of ABL to resolve problems in export/import within the existing policy and guidelines, in exchanging views with exporters/importers of bank. Plans of the Bank for increasing International Trade 1) To establish RMA with foreign banks as per requirement of the importers and exporters in our country; keep it up we have keen attention on specialized customer service & techno based distribution network to reach customers. Remittance Scenario of Bangladesh from 2014 to 2018 Million USD Year total National Foreign Remittance In Percentage ( %) ABL’s share 2014 14,807.86 1,670.40 11.28 2) To build capacity building of existing officers as well as newly assigned officers in the field of foreign exchange through arranging sufficient training & workshop to meet the demand of foreign exchange business; 2015 15,316.94 1,699.25 11.09 2016 13,603.98 1,535.26 11.29 2017 13,538.32 1,313.77 10.00 3) To facilitate prompt service regarding export and import related service to our valued customers; 2018 15,520.68 1515.07 9.76 4) To build new entrepreneurs for export and import business and extending co-operation to them by financing and professional counseling; 5) To fulfill the demand of existing importers and exporters for further increase the import and export business; and 6) To ensure increase in the number of authorized dealer branch of the Bank gradually by identifying actual demand of new exporter and importer located in different regions in our country. Foreign Remittance Business Inward foreign remittance plays a pivotal role in the economy of Bangladesh to be an emerging tiger in this region. It not only uplifts the livelihood of grass root people, empowers women and to ensure education for our children but also allows our government to undertake mega development project of our country. Agrani Bank Limited has a huge network and smart distribution channel to deliver the remittance of our expatriates to their near and dear one’s in a time effective way. We have established alternative payment channel besides conventional branch banking system by instigation Agent Banking and Remittance Only Point (ROP) to reach our beneficiaries at their doorstep. High skilled professionals, time-bound payment facility & technological integration makes us different from other banks. For this our Bank stood first among the state owned banks and second among all banks in Bangladeshi market for consecutive seven years. to Achievement of Foreign Remittance in 2018 Remittance Scenario of Bangladesh 14,807.86 10.00 15,316.94 1,670.40 2014 11.29 11.09 11.28 15,520.68 13,603.98 1,699.25 2015 9.76 13,538.32 1,535.26 2016 Total National Foreign Remittance 1515.07 1,313.77 2017 2018 ABL’S Share % Total Remittance Earning in 2018 is USD 1515.07 million which is 14.90% higher than the previous year 2017. Agrani Bank Limited achieved 14.90% growth in remittance earning where national growth is 14.67%. After pilot project ended in March, 2018 Agrani Bank Limited successfully launched 211 Remittance Only Point (ROP) within December 2018. Remittance Only Point (ROP) pay remittance 7 days of a week (Excluding Government holidays) from 10.00 am to 8.00 pm. Total volume of remittance paid through Remittance Only Point (ROP) in 2018 is 18438 and the total amount is BDT 62.74 crore. In 2018 Agrani Bank Limited signed remittance payment agreement with 4 new Exchange House. In 2018 Agrani Bank Limited successfully had taken 3 promotional programs to enhance remittance business collaborating with 85
  85. Directors ’ Report to the Shareholders Business Performance Review exchange houses. Agrani Bank Limited launched API-based remittance payment system in 2018. Now remittance of 5 Exchange Houses are being paid through API and we are the first among the state-owned banks. Remittance Drawing Arrangement with Bangladesh Krishi Bank (BKB) and Sonali Bank Limited has been signed to pay up remittance of AGEX Singapore, a subsidiary of Agrani Bank Limited. Future Plan for increasing Remittance Business: Bank-wise Remittance Statement (2015-2018) • Integrated mobile app for remittance collection through our subsidiaries; • API arrangement with all interested Exchange Houses; • Remittance Arrangement with Bkash; • Appoint bank officials at Bangladeshi Embassies/High Commissions in different remittance prone region to collect more remittance; • Launch promotional program in collaboration with Exchange Houses; • Increasing Number of ROP (Remittance Only Point) across the country; • Remittance Drawing Arrangement under process with different exchange houses specially in Japan, Mauritius, South Korea, Brunei and Kenyan exchange houses; • Remittance Collection from different parts of the world especially with the collaboration of USA/Singapore based companies; and • Remitter and beneficiary database software has been prepared and will be launched soon. Remittance (BDT in Crore) 12,980 2014 13,204 12,680 12,022 2015 10,605 2016 2017 2018 Million USD Year Name of Bank 2017 2018 IBBL 3,234.14 2,645.75 3013.65 Agrani Bank Limited 1,535.26 1,313.77 1515.07 Sonali Bank Limited 1,225.62 1,055.38 1137.33 Janata Bank Limited 1,188.46 878.34 904.91 Other Banks 6,420.50 7,645.08 8949.72 13,603.98 13,538.32 15520.68 Total 7,645.08 Bank-wise Remittance Statement IBBL AGRANI BANK LIMITED Annual Report 2018 904.91 878.34 SONALI BANK LIMITED 2017 86 1,137.33 1,055.38 1,515.07 1,313.77 3,013.65 2,645.75 (million in USD) JANATA BANK LIMITED 2018 8,949.72 2016 OTHER BANKS Treasury Operation The objective of the treasury is to manage the liquidity of the bank i.e. all current and projected cash inflow and outflow must be monitored to ensure regulatory obligation and there is sufficient cash for funding bank’s day-to-day operations as well as excess cash is properly invested to ensure optimization of income; to accomplish this objective, Agrani Bank Limited has a vibrant treasury team having a good combination of young and experienced personnel. The treasury of the bank is the major player in the interbank money market and foreign exchange market. The treasury team performed quite efficiently in 2018 through formulation of proper strategies and sound market forecasting. In accordance with the international standard, best practices and guidelines of the Central Bank for Core Risk Management Policy, our total Treasury Operations are an outcome of all the activities of four units, namely: Money Market, FX Market, Asset Liability Management (ALM) Desk and Fixed Income Desk/Investment Desk.
  86. Directors ’ Report to the Shareholders Business Performance Review Item-wise Income of Treasury Sl. no Items 1 Taka in Crore 2018 2017 Sale of securities 167.74 250.43 2 Sale of shares 19.72 32.86 3 Interest on debenture 0 - 4 Discount on Treasury Bills & Bonds 162.58 381.63 a) Discount on Treasury Bills 119.49 271.97 b) Discount on Bangladesh Bank Bills & bonds 43.09 109.66 5 5 Interest on Treasury Bonds 580.83 628.36 a) Interest on 2, 5, 10, 15 & 20 years Treasury Bonds 427.17 455.80 b) Other Govt. Bonds 153.66 172.56 6 Dividend warrant 95.77 82.11 7 Interest on Subordinated Bonds 155.37 80.12 8 Interest on Reverse Repo 16.71 13.23 9 Commercial Paper 4.34 0.18 1,203.06 1,468.92 Total Primary Dealership Bank Bill, Government Treasury Bill and Bond from primary auction for supporting budgetary deficit financing of the government. The bank is also working to develop a vibrant secondary market for government securities by trading the securities in the secondary market. Agrani Bank Limited is the founder-member of Primary Dealers Bangladesh Limited (PDBL). PDBL had started its journey in the year 2007 with 9 bank and 3 NBFI. From the very first day, as a member of PDBL the bank has been playing an important role by purchasing Bangladesh Taka in crore Type of Trading Purchase from Primary Auction Type of Securities 2018 2017 Treasury Bills 8229.02 13,567.71 Treasury Bonds 1694.53 - 9,923.55 13,567.71 - 17.00 Total Treasury Bills Trading in Secondary Market Treasury Bonds Total 240.13 257.13 Investment The investment portfolio of the Bank at the end of the year 2018 stood at Tk.15,923 crore as against Tk. 17,088 crore in the previous year. The Bank has always given emphasis to high yielding investments and maintains Statutory Liquidity Requirement (SLR) as fixed by Bangladesh Bank vide DOS circular no. 1 dated 19 January 2014. The portfolio of investment of the Bank as on 31 December 2018 is shown below: 87
  87. Directors ’ Report to the Shareholders Business Performance Review Taka in crore Year Types of Securities 2018 2017 Treasury Bills 2110.91 6,924.91 Treasury Bonds 6177.28 5,777.82 SLR Securities Government Securities Reverse REPO - 931.42 8288.19 13,634.15 Shares 63.06 63.06 Sub-total (B) 63.06 63.06 8351.25 13,697.21 Sub-total (A) Non-Government Securities (i) Total (A+B) Non SLR Securities Treasury Bills Government Treasury Bonds Securities Prize Bonds Non-Government Securities (ii) Total (C+D) (iii) G. Total (i+ii) An exterior view of a power plant financed by ABL 88 Annual Report 2018 199.55 - 1,385.73 927,40 1.19 0.91 Sub-total (C) 1,586.47 928.31 Other Bonds 4,312.00 1,049.00 Commercial Papers 60.00 20.00 Shares 1,613.31 1,393.09 Sub-total (D) 5,985.31 2,462.09 7571.78 3,390.40 15,923.03 17,087.61
  88. Directors ’ Report to the Shareholders Business Performance Review Loans and Advances The total loans and advances as on 31 December 2018 was Tk. 39575.30 crore as against Tk. 31,911.86 crore at the end of previous year. The advance portfolio of the Bank is well diversified and covers funding to a wide spectrum of business and industries including agrobased and agro-processing, ship building, ship breaking, steel & engineering, paper & paper products, chemicals, construction, real estate and loans under consumers’ credit schemes, various trading businesses, women entrepreneurs loan and ‘Agrani Bidesh Jawar Loan’. Taka in crore Sector-wise Loans Agriculture and Fishery 2018 2017 1,622.09 1,480.17 Jute and Jute goods 930.85 970.11 Transport, Storage & Communication 593.42 375.86 96.53 97.54 3,273.54 3,102.67 Ship Breaking Textile & Readymade Garments Food and Allied Industry Construction & Engineering 423.87 471.21 1,363.08 1,087.84 Pharmaceuticals & Chemicals 263.40 143.82 Leather 470.96 451.74 Power & Energy 960.66 819.41 Professional and Services 361.35 202.89 1,129.88 946.04 Housing Wholesale/ Retail Trading 8,775.68 7,610.03 Staff Loan 5,716.65 4,821.95 Others 13,593.35 9,330.58 Total 39,575.30 31,911.86 Sector Wise Loans & Advances Agriculture and Fishery 1,622.09 Transport, Storage & Communication 593.42 Textile & Readymade Garments 3,273.54 Construction & Engineering 1,363.08 Leather 470.96 Professinal and Services 361.35 Wholesale/Retail Trading 8,775.68 Others 1,3593.35 Jute and Jute goods 930.85 Ship Breaking 96.53 Food and Allied Industry 423.87 Pharmaceuticals & Chemicals 263.4 Power & Energy 960.66 Housing 1, 129.88 Staff Loan 5,716.65 MD and CEO visited a factory financed by the Bank 89
  89. Directors ’ Report to the Shareholders Business Performance Review Industrial Credit Agrani Bank Limited as one of the state-owned commercial banks, plays an important role in implementing the Government’s rapid industrial policy for the overall development of the country. It extends term loan as well as working capital loan facilities almost in all sectors of industrialization both individually and jointly with other government and private banks and financial institutions under consortium/ syndication arrangement. Credit facilities are made available not only in establishing new projects but also in BMRE of existing projects. A total sum of Tk. 10861.83 crore has been disbursed against a sanctioned amount of Tk. 13173.14 crore in 848 projects up to December 2018, the outstanding of which stands at 9864.07 crore. The comparative study of project loans between 2018 and 2017 is as follows: Taka in crore Year Loan Sanctioned Loan Disbursed Outstanding No. Amount No. Amount 2018 848 13173.14 802 10,861.83 9864.08 2017 834 11,019.16 791 9,608.77 8,747.87 Sectors of Loans Agrani Bank Limited sanctioned loans in different sectors, the important ones of which are as follows: • Textiles (Spinning, Weaving, • Power Plant • Plastic and Rubber Dyeing, Knitting, Finishing) • Export-Oriented Garments • Cement Industry • Ceramic • Dairy and Poultry • Paper and Board Mills • Land Developer • Tanneries • Leasing • Printing and Packaging • Fisheries • Engineering • Bread and Biscuit • Electrical and Electronics • Rice and Flour Mills • Computer • Ice Mills • Food and Allied • Forest and Allied • Chemicals • Pharmaceuticals • Hospitals and Clinics • Transportation • Salt • Auto Bricks/Environment- • Telecommunication • Filling Station friendly Bricks • Hotel • Glass and Glassware • Education and Poverty • Commercial Building and Alleviation • Small and Cottage Industries • Refinery 90 Annual Report 2018 Shopping Mall Credit Lines Apart from own source, ABL utilizes fund received from the following credit lines: IDA Credit Exim Bank Credit ADB Credit OPEC Credit Industrial Development Bond Fund BSCIC Consortium BSCIC Sub-contracting BSCIC Special Credit Light Engineering Credit (BSCIC) Credit Guarantee Scheme
  90. Directors ’ Report to the Shareholders Business Performance Review Loan to Power Sector In the recent years, Power Sector is treated as the priority sector of the country. This Bank has been playing a significant role in financing to this sector. Up to December 2018, the Bank has sanctioned a total of Tk. 3452.83 crore in 13 projects generating more or less 1713 MW electricity per day all of which are duly linked with the national grid of the country and more than 208 MW electricity will be supplied per day to national grid from another 2 project. An aerial view of a power plant of Power Pac-Mutiara financed by ABL Loan to Health Sector Individual’s sound health is mandatory for the overall development of the country. Sound health refreshes both body and mind and thereby induces motivation in daily work. Hence, to extend the medical services to the doorsteps of mass people of the country, the Bank has disbursed a total of Tk. 136.45 crore so far as to 12 hospitals, clinics, pharmacy and pharmaceuticals, the outstanding of which is Tk. 65.84 crore at the end of the year. An interior view of a pharmaceutical industry financed by the Bank Syndication Financing ABL has been playing an important role in implementing large projects under syndication financing. Since 2005 the Bank has financed Tk. 3089.05 crore against 85 projects up to December 2018 as the member bank as well as lead arranger of syndication/consortium, the outstanding of which is Tk. 1306.42 crore at the end of the year. Agreement signing between Bashundhara Group and ABL as a lead arranger of syndication finance 91
  91. Directors ’ Report to the Shareholders Business Performance Review SME Financing of ABL Business Sectors SME is a more valuable sector in the present developing world. This sector is labor intensive with short gestation period. It is treated as income generating machine and driving force of industrialization. The countries like China, Japan, Hongkong, Taiwan, Thailand, Malaysia and India have developed their national economy through the development of SME. So, the people’s republic of Bangladesh Government has been given more emphasis on SMEs considering as a priority sector. Bangladesh Bank has been taken various initiatives for the expansion of SME as a priority sector. As a development partner, Agrani Bank Limited has also been operating various loan activities for the development of SME sector. Grocery shop, cloth shop, medicine shop, plastic and synthetic shop, shop of spare parts, rods and cement, furniture, agro-business and other income generating and socially acceptable business. Industry Sectors Cotton industry, jute industry, garments, rice mill, plastic industry, saw mill, light engineering, agro processing, feed mill, furniture industry and other socially acceptable and eco-friendly business. Sector wise disbursement and outstanding SME in 2018: Taka in crore Sectors of SME Financing Sectors of SME financing Service Sectors Service sectors Hotel, restaurant, tailoring, laundry, hospital, clinic, kindergarden, block and printing, tractor, power tiller, irrigation equipment etc. Disbursement Outstanding 55.07 372.84 Business sectors 3,135.68 4,863.33 Industrial sectors 1,111.99 2069.50 Total 4302.74 7,305.67 Growth of Agrani Bank Limited in SME sectors in 2018 compared to 2017 is given below Year Disbursement Number Amount 2017 34,315 3,298.19 2018 39615 4302.74 ABL’s Contribution in Developing SME Sector After starting SME financing, Agrani Bank Limited has been taking various steps such as establishment of separate SME Credit Division, adopting SME financing activities according to Bangladesh Bank’s guidelines, operating SME financing activities through all branches, allocating sufficient budget for SME loan disbursement, zone & cluster wise SME loan disbursement, establishing SME Help Desk & Women Entrepreneur Dedicated Desk in all branches, establishing SME Monitoring Cell & Women Entrepreneur Development Unit in all zonal offices & Corporate branches, SME Monitoring Committee established by the chief of committee(DMD) And SME Monitoring Cell established by the chief of committee GM(CPCRMD), introducing separate 92 Annual Report 2018 Recovery Taka in crore Outstanding Number Amount 1,919.41 93,804 5,656.16 2143.95 99414 7305.67 loan activities for women entrepreneurs, vivid participation in different SME fairs & other promotional efforts etc. As a result the Bank has achieved a superior position. A small factory financed by ABL
  92. Directors ’ Report to the Shareholders Business Performance Review Position of SME Loan up to December 2018 Nature of loan Disbursement Target 2018 Disbursement upto Dec. 2018 Number Amount % of Disbursement Classified loans Taka in crore Outstanding amount as on Dec. 2018 Number Amount 12.00 23 0.18 1.50% 0.00 571 0.21 Micro Enterprises 112.80 17,702 228.82 202.85% 27.92 43186 1017.30 Small Enterprises 2814.90 21,740 3,170.42 112.63% 639.43 54974 4255.59 683 2032.57 99414 7305.67 Cottage Enterprises Medium Enterprises Total 939.66 150 903.32 96.13% 652.06 3,879.36 39,615 4302.74 110.91% 1219.41 SME Financing along with National and International Organization NGO Linkage program of ABL Agrani Bank Limited is a pioneer bank in expanding credit activities through the capable NGOs. The bank has engaged different NGOs for expanding the SME credit services. Any potential NGO can avail the credit facilities from this bank complying existing rules and regulations. Foreign Aided Credit Programs of ABL Agrani Bank Limited has been utilizing its own fund and foreign fund for credit operation. The credit programs namely EGPRP and MSFSCIP (Kurigram) are being successfully operated by the Bank under the financial assistance of IFAD. Under the program EGPRP, the Bank has been extending credits to the people through its 191 branches. Agrani Bank Limited has disbursed TK 18.25 crore under EGPRP program & TK 0.34 crore under MSFSCI program upto December 2018. SME Vision 2019 The Government of People’s Republic of Bangladesh formulated policy strategies for developing SME through industrial policy 2010 providing guidelines for SME development. As a development partner of the Government the Agrani Bank Limited has a wide vision for the year 2019. Under the vision, the SME credit should be extended to close to the door of people. Agrani Bank Limited continuously working to build up free from hunger & poverty of the society as per present Government commitment. In this purpose Agrani Bank Limited has disbursed 4302.74 crore ( Four thousand three hundred two crore and seventy four lac only) taka on behalf of Cottage, Micro, Small and medium industry/Enterprise in the year 2018. In the year 2019 TK. 5164.00 crore (Five thousand one hundred sixty fore crore only) has been assigned as SME loan disbursement target. In this target TK. 671.32 crore (Six hundred seventy-one crore and thirty two lac only) is reserved for women Entrepreneurs. Everyone will be informed through circular/letter to implement all instructions of Bangladesh Bank, various SME products of Agrani Bank Limited will be displayed in various fairs & the bank will be participated in various seminar/ conference. Special attention will be given to increase financing in environment friendly, agro based & agro processing industries, labor intensive & production oriented enterprise, production of import substitute commodities, export oriented enterprises, creative new enterprises, IT & technology related enterprises. Beside this, necessary steps will be taken time to time to gear up overall SME activities so that performance of Agrani Bank Limited will be pioneer to all in developing SMEs. Agriculture and Rural Credit Agrani Bank limited is one of the State Owned Commercial Banks. It plays an important role in the progress of economic development of Bangladesh. It finances with priority sectors in line with the Governments overall development policy so that country becomes a middle income country in 2021. This bank has been financing since 1977 through agriculture and rural credit programme including agriculture, livestock, fishery and various 93
  93. Directors ’ Report to the Shareholders Business Performance Review productive and income-generating activities. The bank is playing vital role through engaging the rural poor people in various productive and income-generating activities for the overall development of their social and economical condition. Loan amount to Tk 5,000-1,00,000 at only 9% interest is targeted to disburse among rural landless, marginal farmers, small enterpreneurs and distressed women. No collateral security is required for loan upto Taka 1,00,000 on certain agriculture/rural credit sector. So far the beneficiaries under the various programs implemented by the Rural Credit Division includes 4716921 persons of different sector and the amount involve is Tk. 6114.21 Crore upto December 2018 Comparative Figure of Agriculture and Rural Credit for the year 2017 and 2018 Taka in crore 2018 2017 Sl. No Sector 1 Crops 440.00 438.66 430.00 409.30 2 Fisheries 68.00 16.39 40.00 14.29 3 Livestock 72.00 46.17 66.00 47.29 4 Poverty Alleviation 84.00 162.93 101.00 143.83 5 Others 16.00 15.31 23.00 21.37 Total 680.00 679.46 660.00 636.08 Agriculture & Rural Credit 2018 Target Disbursement Crops 438.66 Fisheries 16.39 Livestock 46.17 Poverty Alleviation 162.93 Others 15.31 Participation of Agrani staff members in paddy harvesting festival 94 Annual Report 2018 Target Disbursement In the financial year 2018-2019 disbursement target of agriculture and rural credit of Agrani Bank Limited is Taka 680.00 crore. Taka 338.55 crore has disbursed to agriculture and rural credit up to December/18 and total outstanding is Taka 1622.09 crore as on 31/12/2018. Bangladesh Bank has set up the disbursement target of agriculture and rural credit Taka 21800.00 crore for all banks in the financial year 2018-19. On contrast to Bangladesh bank target, the disbursement target of agriculture and rural credit of Agrani Bank Limited is Taka 680.00 crore in the financial year 2018-19. This is
  94. Directors ’ Report to the Shareholders Business Performance Review circulated to the respective branches through circular no: RCD/97/18, Dated: 06-08-2018. Rural Credit Division is monitoring regularly for achieving the annual target at 100 % level. If any zone fails to achieve the disbursement target at the acceptable level, then officials of Rural Credit Division make regular visit to respective zone. During visiting hours, they make regular conversation with zonal heads & branch managers and give them necessary recommendation. Agrani Overseas Loan Project Remittances sent by migrant workers have been playing an increasingly significant role in the economic growth and livelihood of the people of Bangladesh. The remitted funds contribute critically to our national economy by increasing the foreign exchange reserve, per capita income and employment opportunities. In 2018, remittances amounted to 15,544.68 million US dollars. The government of Bangladesh has used these funds to pay official and non-governmental import bills, as well as to repay foreign debt with interest. Remittances received in hard currency have helped the government to reduce its dependence on foreign aid. These international fund transfers have also contributed to the expansion of financial market activities and the development of payment systems in Bangladesh by enhancing direct capital flows and distributing these funds to users and investors. Remittances have had a positive impact on the socio-economic conditions of the migrants’ families and these have served to make the Bangladeshi currency stronger against the US dollar. Future Plan of the Project Bangladesh is rapidly moving ahead towards development. As part of this voyage, many brilliant students from deprived families can be given the chance to have admission for higher studies in local universities. It is planned to lend them an additional 3 to 5 lac taka for studying in native country. Moreover, skilled migrant workers will also be eligible to receive this loan facility in the near future. Disbursement and Recovery of Overseas Loans Particulars Agrani Loan for Agrani Overseas Overseas Worker Education Loan Total number of loans disbursed 272 19 Total loan disbursed amount 6,75,90,300.00 70,50,000.00 Total recovery amount 4,10,47,014.00 21,52,986.00 93 16 9.00% 9.00% Total number of branches that have disbursed loans Rate of interest Non Performing Loan (NPL) Management NPL stood at17.67% of gross loan which was 17.45% in 2017 i.e., we were able to keep NPL to a minimum level. At the end of the year 2018, total loans and advances and classified loans stood at Tk. 39575.30 crore and Tk. 5750.54 crore respectively and the percentage of classified loan was 14.53% of total loans and advnces. In 2018, comparing with the year 2017, the total loans and advances has increased by Tk.7663.44 crore and classified loans also increased slightly by Tk.180.99 crore to reduce the classified loans and arresting new classification, higher authorities has enhanced intensive supervision and strict follow-up at the field level. To bring down the amount of classified and written off loan of the Bank to a logical level, financial incentives have been provided for the greater motivation of the executives and officers and separate committees, including executives and officers, were formed. Loan Recovery Activities 2018 Expatriates are taking preparation for boarding From the very begining of the year 2018, action plans have been formulated and accordingly recovery strategies were taken at the Head Office and grass-roots level to reduce the amount of classified and written-off loans of the Bank. Round the year monitoring activities continued to increase classified loan recovery through allocating the 95
  95. Directors ’ Report to the Shareholders Business Performance Review onus of recovering top-20 classified loans among the higher cxecutives of the Bank by forming the ‘Recovery Cell’ in the circle office, zonal office and branch level. The monitoring, supervision and follow-up have been made the year round. Besides, MD & CEO’s ‘80 Days Action Plan’ was formulated. In addition, from 1st October, 2018 to 19th December2018 was declared as ‘Classified Loan Recovery Month’. Special recovery activities were carried out by forming higher executive recovery teams. Moreover 36 Recovery Teams have been formed by a Deputy General Manager for recovery of classified and written-off loans. Comparative Position of Loan Recovery in 2018 & 2017 total loans and advances (including staff loan) on 31-122017 stood at Tk. 31911.86 crore. Against this, the amount of classified loans was Tk. 5569.55 Crore, i.e. 17.45% of total loans and advances. On the other hand in the year 2018 total loans and advances (including staff loan) was Tk. 39575.36 crore. Against this, the amount of classified loan was Tk.5750.54 crore. i.e. 14.53% of total loans and advances. In the year 2018 recovery of classified loans was Tk.1058.27 crore (against the yearly target of Tk 2500.00 crore) which was 42.33% of yearly recovery target. Comparative Recovery Position of Classified and Overdue Loans in 2017 and 2018 2018 Category 2017 Cash recov- RegularizaWrite-off ery tion total recovery increace/ decrease Cash RegularizaWrite-off recovery tion total recovery increace/ decrease Classified 319.05 666.55 72.67 1058.27 (816.33) 576.04 1,287.80 10.76 1,874.60 921.02 Overdue 224.86 427.12 0.00 651.98 369.33 239.87 42.78 0.00 282.65 (94.93) Total 543.91 1093.67 72.67 1710.25 (447.00) 815.91 1,330.58 10.76 2,157.25 826.09 Loan Recovery Plan 2019 Recovery target for all the circles and corporate branches was fixed at the begining of the year from Head Office. Follow up of recovery target achievement is going on in every month by Recovery and NPA Management Division. Besides, a circular has been issued which pertains to the recovery strategy of classified and written-off loans. to achieve target of classified and written off loans, instructions have been given to the zonal offices and branches. Inter-Branch Reconciliation Accounts with regard to inter-branches are reconciled regularly. Reconciliation Division has strengthened its efforts to reduce unreconciled entries. With this end in view, intensive monitoring both at the field and head office level has been carried out. Different task force has been set up inside the bank for effective follow up to reconcile unreconciled entries. At present reconciliation of inter branch accounts (CMO/CNG) is being done by newly introduced web based software, Agrani Reconciliation System ‘Agrani Recon’ of Information Technology and MIS Division of our Bank developed by their own pernonnel. 96 Annual Report 2018 Training has been imparted both at the field and Head Office level in this regard. Time bound action plan has been taken to reconcile unreconciled entries. Help Desk Agrani Bank Limited provides all time help desk service to all of its online branches. In addition to that, help desk exists in all branches. Any problem of the customer is being primarily resolved by the help desk. Branch Expansion The total number of Bank’s branches stands at 953 at December 2018 which was 941 in 2017. It has been planned to open more branches in all upazillas as well as all commercially important places of the country in the coming years so that the Bank can reach its service to the wider group of clients all over the country. Financial Performance Total Operating Income Total income increased by 43.45 % to 3,232 crore, led by new high in net interest income.
  96. Directors ’ Report to the Shareholders 11% 0% 11% % 20 6% 4% 11% 15% Net interest income rose 105% to Tk. 982 crore from a year ago on the back of higher net interest margin and healthy loan growth of 24%. Net interest margin increased mainly attributed to higher yields from interbank and non- banking financial institution balances, a function of both our measured efforts in deploying excess funds into higher-yielding assets and largely on the back of reduction of classified loan and healthy loan growth. Operating Profit Operating profit stood at Tk.832 crore that means the bank registered a big high of 2% growth. Appropriation of Profit During 2018, ABL earned Tk. 832.17 crore before provision and tax which has been appropriated in the following manner: Taka in crore Particulars 2018 2017 Profit/(Loss) before provision & tax 832.17 679.97 Provision for loans and advances 128.72 (504.20) Other provision (Including incentive bonus) 353.14 216.12 Total provision 481.86 (288.08) Net profit/(loss) before tax 350.31 968.05 Current tax 326.06 268.28 Deferred tax (79.30) 23.84 Total provision for tax 246.76 292.12 Net profit/(loss) after tax 103.55 675.93 Add: Retained surplus from the previous year 101.80 (585.53) 70.06 193.61 Retained surplus % -11 -5% -6% Net Interest Income Available for appropration % 14 14% 6% 27% 4% -2% % -12 8% -3% The Bank’s total operating expenditure was Tk 1,650.86 crore in 2018 as against Tk 1,539.98 crore in 2017 which indicates an increase of Tk. 110.88 crore (i.e. 7 percent higher) over the last year. This is mainly due to the increase of staff salary in line with the government policy and recruitment of new officers. 3% Total Operating Expenditure 3% 2% -2% Business Performance Review (68.31) (103.21) Profit/(Loss) before provision & tax Other provision (Including incetive bonus) Net profit/(loss) before tax Deferred tax Net profit/(loss) after tax Available for appropration Provision for loans and advances Total provision Current Tax Add: Retained surplus from the previous year Retained surplus Capital Adequacy Ratio All scheduled banks need to acquire and maintain adequate capital as per provisions of Section 13(2) of the Banking Companies Act 1991 and BRPD circular 18 dated 21 December 2014 issued by Bangladesh Bank to operate the banking activities smoothly. The Bank maintained total capital of Tk. 3,975.99 crore against requirement of Tk. 3,941.38 crore (Tk. 400 crore or 10.00 percent of total risk weighted assets of Tk. 39,413.76 crore whichever is higher) on 31-12-2018. Thus the Bank was able to maintain capital surplus of Tk. 38.61 crore on 31-12-2018 which was Tk. 80.38 crore as on 31-12-2017. Moreover, minimum capital requirement of the Bank was 10.09 percent as on 31-122018 which was 10.24 percent as on 31-12-2017. The Continuous Advancement of Islami Banking in Agrani Bank Limited Agrani Bank Limited apart from its conventional banking services is the first among the state-owned commercial banks to introduce shariah-based islami banking operations since February 28, 2010 at five branches. Increasing demand of customers drives the bank to apply Bangladesh Bank for more islami banking outlets after getting approval from Board of Directors of the bank. Consequently, Bangladesh Bank on condition of “setting up separate boundry and counter” approve licence for 10 branches. 97
  97. Directors ’ Report to the Shareholders Business Performance Review Islami Banking Services/Products of Agrani Bank Limited 2.5 Mudaraba Hajj Savings Scheme in overall banking sector of the country having fullfiled the demand of time. Online Banking facilities has been introduced in Islami Banking Windows of Agrani Bank Limited. With the help of modern technology and customization in banking software customer of islamic banking will get transaction facilities from any conventional one of Agrani Bank in-sa-allah. Hopefully, most expectations of the customers of Islamic Banking system will be fullfiled through online activities. In near future, the shariah-based banking of Agrani Bank will be able to occupy a significant place among the state-owned commercial banks, in-sa-allah. 2.6 Mudaraba Special Savings Scheme Off-Shore Banking Unit (OBU) Deposit products 1. Al Wadiah Current Deposit Account 2. Mudaraba Deposit Account 2.1 Mudaraba Savings Account 2.2 MudarabaTerm Deposit (MTDR) 2.3 Mudaraba Special Notice Deposit (MSND) 2.4 Mudaraba Probashi Kalyan Savings Account 2.7 Mudaraba Mohor Savings Scheme 2.8 Mudaraba Cash Waqf Savings Scheme Shariah-based different Investment modes • • • • • Bai-Murabaha Bai-Muajjal Hire Purchase under Shirkatul Melk Sevices: Foreign Remittance, LC Opening, Issuing Guarantee and Quard Hasanah. Achievement of Islami Banking in last 5 years Taka in crore The EPZ Corporate Branch, Chattogram of the Bank obtained the Off-shore Banking Unit (“the Unit”) permission vide letter No. BL/DA/5175/87 dated March 7, 1987. The Bank commenced operation of this unit from January 23, 2014. The Off-shore Banking Unit governed under the rules and guidelines of the Bangladesh Bank. The Off-shore Banking Unit is located at EPZ Corporate Branch, Bay Shopping Center, EPZ, Chattogram. The principal activities of this unit are to provide all kinds of commercial banking services to its customers through its off-shore Banking Units in Bangladesh. 2013 3082 323.82 433 54.85 8.47 2014 3646 216.02 468 57.53 10.84 2015 4026 207.21 492 58.51 4.27 2016 4450 98.79 579 76.15 5.19 The Off-shore Banking Unit maintains its accounting records in USD from which accounts are prepared according to the Bank Companies Act, 1991, Bangladesh Accounting Standards, Bangladesh Financial Reporting Standard (BFRS) and other applicable directives issued by Bangladesh Bank, in particular, Banking Regulations and Policy Department (BRPD) Circular No. 14 (25 June 2003). 2017 4683 112.71 696 108.67 9.52 Balance of OBU at a Glance 2018 4931 nos. 326.03 809 nos. 133.64 12.52 Year Deposit Accounts Total Investment Total Deposit Accounts Investment Profit Future Plan of Islami Banking Operation Islami banking activities of Agrani Bank Limited have already passed its successful 9 years’ journey though it faced many obstacles initially. All concerned highly praise its activities in terms of deposit collection, investment disbursement and profit earning having started with only five windows. Since inception, profit earning shows a rising trend with all round efforts. The use of Information Technology has become able to bring about a revolution 98 Annual Report 2018 Figure in Million USD Year Amount Growth (Amount) Growth % 2017 33.04 2018 110.47 77.43% (Increased) 234.35% Major Investment Area of OBU • • • • Power/Energy Sector Garments Sector Agro based Business Jute Spinning Mills
  98. Directors ’ Report to the Shareholders Business Performance Review • Cement Industry • Pharmaceuticals Limited that is going to raise capital through issuance of primary shares in the capital market. • Paper Mills • Tannery/ Leather Sector Summary of the Financial Results • Light Metal Industry • Chemical Industry 2018 2017 0.40 0.37 Capital Gain 12.58 38.28 Dividend Income 14.23 13.21 Other Income 0.63 0.50 Agrani Equity & Investment Limited Total Income 27.84 52.36 Agrani Bank Limited began to take part in the capital market operations since it got licence from BSEC on 23rd March, 2009. Initially its operations were executed under Merchant Banking Unit of the bank. On March 16, 2010, onward the bank has formed a subsidiary company named ‘Agrani Equity & Investment Limited’. “Agrani Equity & Investment Limited” as a full-fledged merchant bank has started its operation on 15th June, 2010 taking all the assets and liabilities of merchant banking unit of Agrani Bank Limited. Agrani Equity & Investment Limited started its operation with the vision to become the market leader in merchant banking operations by acting as a market maker and ensure development of the capital market by active participation. to act as a strong participant for increasing market depth which will ensure the proper channelling of funds among banks, NBFI’s & capital market. The activities of the Company are issue management, underwriting, portfolio management and financial advisory services. Operating Expense 19.79 17.05 8.05 35.31 - 10.00 Provision for Taxes 4.10 6.62 Net Profit 3.95 18.69 Subsidiary Companies of Agrani Bank Limited Agrani Bank Limited has six subsidiary companies of its 100 percent ownership. Two of them are in Bangladesh and four are in abroad. The companies are as follows: Operational Performance Even though the capital market observed bearish trend throughout the year 2018, Agrani Equity & Investment Limited posted an operating profit of Tk. 8.05 crore boosted by the collective efforts of all executives and employees of the organization. Dividend income increased 7.72% to Tk. 14.23 crore. The scope of making capital gain was narrowed due to sluggish market in 2018. As a result, the net profit stood at Tk. 3.95 crore. We worked as a co-issuer of Bonds issued through private placement by Best Holdings Limited in the past year. In addition, the issue management of initial public offering of Sonali Life Insurance is under process. We are also going to underwrite the shares of Aman Textiles Particulars Taka in crore Interest Income Operating Profit Provision for unrealzed loss Agrani SME Financing Company Limited Agrani SME Financing Company Limited was registered with the Registrar of Joint Stock Companies & Firms on October 27, 2010 as 100 percent owned Subsidiary Public Limited Company of Agrani Bank Limited. It emerged as a Non-bank Financial Institution (NBFI) having licence from Bangladesh Bank on January 31, 2011. The NBFI is rendering financial services to the existing and potential entrepreneurs in Bangladesh. It is for the development of entrepreneurship as well as small and medium scale labour-intensive enterprises to increase the income and employment for the missing middle eligible entrepreneurs with particular emphasis on women entrepreneurs in the urban, semi-urban and rural areas in the operational areas of the Company. Agrani SME Financing Company Limited started its activities with the following objectives: • Develop entrepreneurship and small/medium scale labour intensive enterprises; • Increase income and employment for the entrepreneurs; • Promote women entrepreneurs; and • Generate income and support a more equitable income distribution. 99
  99. Directors ’ Report to the Shareholders Business Performance Review Contribution of Agrani SME Financing Company Limited Agrani SME Financing Company Limited is the only NonBank Financial Institution (NBFI) owned by a state-owned commercial Bank, Agrani Bank Limited. From the inception, Agrani SME Financing Company Limited has disbursed the SME credit to 20,468 entrepreneurs. At present (December 31, 2018) total number of existing loanee /entrepreneurs is 11,457. During this period (December 31, 2018) company has distributed loan among the 1,061 women entrepreneurs. The company also has earned net profit of TK.3.82 crore in 2013, TK.6.02 crore in 2014, TK. 3.66 crore in 2015, TK. 0.97 crore in 2016, TK.2.17 crore in 2017 and TK.4.53 crore (un Audited) in 2018. The main objective of the company is to generate employment through entrepreneurship development/ creation. Up to December 31, 2018, the company has created employment to 47,614 persons. Through providing financial assistance the Company is alleviating poverty by generating employment to the entrepreneurs and employment to others who were engaged by the entrepreneurs with giving special emphasis to strengthening women empowerment. The Company also promoting Small and Cottage industries and Medium enterprises, establishing backward linkage to small -scale enterprises by integrating Missing Middle people of the country. The company is in its heartiest endeavor to develop the socio-economic status of the country beside the contribution of the holding company i.e. Agrani Bank Limited so that SDG could be achieved by 2030. Agrani Exchange House Private Limited, Singapore Agrani Exchange House Private Limited (AGEX) is a remittance company incorporated in Singapore on January 04, 2002 under Company Act CAP.50. It is a fully owned subsidiary of Agrani Bank Limited, embarked its journey in Singapore on February 08,2002 for catering the long-felt need of hassle free transfer of money by the Bangladeshi expatriates from Singapore. It’s authorized & paid up capital are SGD 10,00,000.00 and SGD 10,00,000.00 respectively The company is providing its remittance services through its five. Agrani Exchange House has remitted Tk. 10,855.36 crore since its inception. In 2018 it has remitted Tk. 842.36 crore while it was Tk. 812.89 crore in 2017. Over 99 percent remitters of this Remittance Company are of Bangladeshi nationality. Majority of the clienteles of the Remittance Company are low income workers of construction sector, shipyard and industrial sectors. Among others includes engineers, doctors, teachers and other Bangladeshi expatriates along with those who intend to send money to their friends or relatives in Bangladesh. With heightened competition among the market players, Agrani Exchange House Private Limited has put in place a number of strategies to maintain sustainable growth in all indicators during past years to remain market leader in Singapore. The real time online money transfer solution of the Company allows the beneficiaries to receive remittance from all locations of Agrani Bank Limited instantly which greatly been encouraged the remitters to send money through this AGEX House. The Company is continuously putting all its efforts to remain compliant under the regulatory guidelines and to develop standard of services to ensure hefty growth in times ahead. A growth chart of the Company of five years Year 100 No. of Remittance No. Change Amount in SGD (Million) Growth AMT Amount in BDT (Million) Change Growth AMT Change Growth 2018 168102 (15690) (8.54) 136.04 (3.04) (2.18) 8,423.61 294.7 3.49 2017 183,792 (80,335) (30.41%) 139.08 (45.31) (24.57%) 8,128.91 (2,369.92) (22.57) 2016 264,127 (47,254) (15.12%) 184.39 (18.86) (9.27%) 10,498.83 (1,041.52) (9.02) 2015 312,381 (11,384) (3.51%) 203.25 (1.29) (0.63%) 11,540.35 (995.35) (7.94) 2014 323,765 36,091 12.55% 204.54 20.34 11.04% 12,535.70 1,001.24 8.68% Annual Report 2018
  100. Directors ’ Report to the Shareholders Business Performance Review Agrani Remittance House Sdn Bhd, Malaysia Agrani Bank Ltd, one of the leading state owned banks of Bangladesh, started its journey in Malaysia in 2006 upon approval from the Ministry of Finance of the Government of the Peoples Republic of Bangladesh to meet the long-felt desire of a huge number of Bangladeshi Expatriates to remit money safely & conveniently through banking channel. Remittance Business in all over the Globe has been suffering because of stronger US Dollar recession in some economic zones including China & Russia and unexpected currency war in the last few months. Notwithstanding, Agrani Bank Ltd still continues its development in remittance procurement remarkably. Agrani Remittance House (ARH) is contributing significantly to this herculean effort by sending bulk of remittances. Mentionable that six (6) branches of ARH are successfully giving assistance to Bangladeshi Migrants in sending money, opening bank account with different Branches of Agrani Bank Limited, Bangladesh and in buying Wage Earners Development Bond (WEDB) of Bangladesh Government. Agrani Remittance House (ARH) remitted BDT 555.03 crore in 2018. Agrani Remittance House (ARH) has a business plan in 2019 to expand its business by opening 3 (Three) more branches in Malaysia, establishing drawing arrangement with other NCBs & NGOs and entering new era by opening new corridors in providing remittance services to Nepal, Indonesia, the Philippines, India and Pakistan. The company is very much committed to serving the Bangladeshi Expatriates in Malaysia maintaining the international level of efficiency, quality customer service and to increase business with multi-dimensional approach that will ensure the sustainable development of the company in times ahead. Agrani Remittance House Canada Inc. After approved by the Bangladesh Bank, Agrani Bank Limited opened its subsidiary, a 100 % owned, Agrani Remittance House Canada Inc. (ARHC Inc.), a federally incorporated ( by which the company is able to do business all over Canada in same registration) company, registered under the Canada Business Corporation Act of Industry Canada, as on May 11, 2012 with an objective to serve the expatriate Bangladeshi community in Canada, as a part of Agrani Bank Limited’s social commitment to the people of the country. to comply with the Money Service Business (MSB) regulations of Canada, ARHC Inc. is also registered with the Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC). ARHC Inc. is the only subsidiary company of a Government Bank of Bangladesh, is strategically located at 2978 Danforth Avenue, Unit#2, Toronto, Ontario, Canada the highest Bangladeshi concentrated area of Canada., and started its operation on May 26, 2014 and despite of strong competition and challenges. Within a short span of time, ARHC Inc. has achieved a substantial progress and remitted 11.1 Million Canadian Dollars (CAD) and day by day increasing its business volume and offering remittance services to the community. As the business is increasing, more and more people are showing interest to send their hard earned money in legal Banking channel. Performance of the Company Year No of Remittance CAD (Million) BDT (Million) No of WEDB 2014 106 0.71 49.52 2015 2,787 1.99 2016 2,932 2017 2018 Growth of Remitted amount CAD Number Amount (Million) 6 - - 121.87 5 2,681 1.29 1.92 113.56 5 145 -0.08 2,940 2.45 153.28 37 8 0.53 3,848 3.45 223.60 106 908 1.00 101
  101. Directors ’ Report to the Shareholders Business Performance Review Anti-Money Laundering and Terrorist Financing Money Laundering means transfer, conversion, remitting abroad or remit or bring from abroad to Bangladesh the proceeds or properties acquired through commission of a predicate offence for the purpose of concealing or disguising the illicit origin of the property or smuggle abroad fund or property earned through legal or illegal means. Agrani Bank Limited maintains an organizational structure for effective compliance of Anti Money laundering activities which includes: 1) Branches comply with the norms and procedures of AML & CFT in opening accounts of the customers. They are collecting accurate and complete information, keeping records, properly preparation of KYC (know your customer) and TP (transaction profile), preservation and monitoring. 2) Cash Transaction Report (CTR), Suspicious Transaction Report (STR) & Suspicious Activity Report (SAR) are being sent to the Regulatory authorities i.e. Bangladesh Bank regularly through GOAML middleware system. 3) Agrani Bank Limited emphasizes importance of Anti Money Laundering Training for all employees & subsequently training programs are in progress. 4) AML Velocity Solution Suite Software has been introduced for UN Sanction Screening list on 24.07.18. 5) Agrani Bank Limited published “Money Laundering & Terrorist Financing Risk Management” Guidelines on Money laundering on the light of Bangladesh Bank’s Money Laundering Risk Management Guidelines & also published “Compliance of AML & CFT: Policy & Procedure-Guide Book” in Bangla. Contribution to National Exchequer The Government is the most important stakeholder that plays a critical role in the economic development of the country. Being a legitimate and ethical entity, ABL contributes to the National Exchequer when it is necessary, such as deduction of income tax, value added tax and excise duty at source as per law from various expenditure, interest on deposit and banking services and deposited to the Government Exchequer. ABL also deducted AIT and deposited to the Government Exchequer on behalf of its employees. ABL made a handsome contribution to National 102 Annual Report 2018 Exchequer of an amount equal to Tk. 630.42 crore and Tk. 598.98 crore respectively in 2018 and 2017. This reflects its fair and consistent commitment towards national contribution. Particulars 2018 2017 AIT (Withholding Tax) 28.07 52.18 246.66 218.62 9.37 8.86 230.70 210.54 Vat deducted source and deposited 59.92 52.94 Excise duty deducted and deposited 55.70 55.84 630.42 598.98 Payment of tax on Bank’s income Tax on staff salaries deducted and deposited TDS of interest on deposit Total Outlook 2019 In spite of tremendous competitions and challenges, the Bank has made progress in almost all spheres of business to meet the challenges and to stay competitive, it has upgraded the skills of its workforce and introduced automation where possible, in its operation. It will continue to focus on achieving steady growth, by upgrading the quality of assets, augmenting interest and rendering quality service and operation. Moreover, it will constantly pursuit the policies of recruitment of skilled workforce, good corporate governance practices, and sound risk management. The Bank will make every possible effort to earn high operating profit, maintain minimum capital adequacy, bring classified loan at a minimum level and to do best in all sectors including deposit, credit, import, export, remittance, cost of fund etc. Moreover, we want to make utmost contribution to the community and society in which we operate. Preparation of Financial Statements The financial statements, prepared by the Bank in accordance with the Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) and in the format prescribed by Bangladesh Bank vide BRPD Circular No. 14 dated 25 June 2003, give a true and fair view of the financial statements as at December 31, 2018. The results of its operations and its cash flows for the year ended December 31, 2018 comply with the applicable
  102. Directors ’ Report to the Shareholders Business Performance Review sections of The Bank Companies Act 1991 and other applicable laws and regulations. The financial statements have been duly certified by the statutory auditors. Dividend Declaration The Board of Directors did not recommend any dividend for the year 2018. Appointment of Auditors ACNABIN and MABS & J Partners Chartered Accountants have served as the external Auditors of the Bank for the year ending 31 December 2018. Two new audit firms from among the audit firms enlisted by Bangladesh Bank will be appointed in the upcoming AGM for the next accounting year. Acknowledgement The success of the Bank during the year under review is mainly attributable to the support and cooperation from the varied group of stakeholders. We gratefully acknowledge the support provided by all valued customers who have been associated with us in the course of our journey. We also place on record our thanks and gratitude to the patrons, well-wishers, Government of Bangladesh, Bangladesh Bank and Registrar of Joint Stock Companies and Firms for their continued support and co-operation. We are also thankful to ACNABIN and MABS & J Partners, Chartered Accountants, the auditors of the Bank, for their timely completion of audit of Financial Statements. The employees including the members of top management of the Bank came up with their total commitment in implementing the agenda for improvement in a number of spheres of the banking operation. The Board takes this opportunity to thank them all. Finally, the Board would like to thank the respected shareholders and assure them that it will continue to add to the shareholders’ Interest through further strengthening and development of the Bank in which they have continuously placed trust and confidence. For and on behalf of the Board of Directors Dr. Zaid Bakht Chairman 103
  103. †kqvi‡nvìvi‡`i cÖwZ cwiPvjK‡`i cÖwZ‡e`b wek¦ A_©bxwZ wemwgjøvwni ivn&gvwbi ivwng m¤§vwbZ †kqvi‡nvìvie„›`t Avm&mvjvgy AvjvBKzg AMÖYx e¨vsK wjwg‡UW Gi 2018 mv‡ji wbixw¶Z Avw_©K weeiYx Ges evwl©K cÖwZ‡e`b cwiPvjbv cl©‡`i c¶ †_‡K Avcbv‡`i mvg‡b Dc¯’vcb Ki‡Z †c‡i Avwg AZ¨šÍ Avbw›`Z| G cÖwZ‡e`‡b Avcbviv 2017 mv‡ji mv‡_ 2018 mv‡j e¨vs‡Ki GKwU Zzjbvg~jK wPÎmn 2018 mv‡ji mvwe©K e¨emvwqK cwiw¯’wZi g~j¨vqb I we‡kølY Ae‡jvKb Ki‡Z cv‡ib| †ckK…Z Avw_©K weeiYxi mv‡_ m¤ú„³ †h mg¯Í Z_¨ Ges we‡kølY G‡Z mwbœ‡ewkZ n‡q‡Q Zv c‡o †`Lvi Rb¨ Aby‡iva KiwQ| G cÖwZ‡e`‡b wek¦ A_©bxwZ Ges evsjv‡`‡ki A_©bxwZi †cÖ¶vc‡U e¨vs‡Ki mvwe©K Kvh©μ‡gi GKwU msw¶ß wPÎ cÖwZfvZ| ‰ewk¦K A_©bxwZ kw³kvjx cÖe„w×i m¤¢vebv wb‡q 2018 mv‡j wek¦¦ A_©bxwZ hvÎv ïiæ K‡i| wKš‘ eQ‡ii AMÖMvwgZvi mv‡_ †m MwZ w¯ÍwgZ nq Ges cÖe„w×i aviv Acm„Z nq| 2017 Ges 2018 mv‡ji kw³kvjx cÖe„w×i ci MZ eQ‡ii wØZxqfv‡M G‡m wek¦ A_©bxwZ D‡jøL‡hvM¨fv‡e gš’i n‡q hvq| AvšÍRv©wZK gy`ªv Znwe‡ji GwcÖjÔ2019 Gi World Economic Outlook Gi cÖKvkbvq 2018 mv‡ji 3.6 kZvsk cÖe„w× n‡Z K‡g 2019 mv‡j 3.3 kZvsk nIqvi cÖ‡¶cb K‡i‡Q| GB eQ‡i mKj wkívbœZ †`‡ki cÖe„w× K‡g‡Q| eûRvwZK G‡RÝx Ges Ab¨vb¨ †¯úkvjvBRW msMVb¸‡jvi c~ev©bygv‡b Av‡gwiKvi A_©bxwZ 2018 mv‡ji 3.0 kZvsk n‡Z 2019 mv‡j 2.6 kZvs‡k †b‡g Avm‡e e‡j avibv Kiv n‡”Q| gvwK©b-Pxbv e¨emvwqK hy× ˆewk¦K h_©bxwZi Rb¨ GKKfv‡e me‡P‡q eo ûgwK wn‡m‡e Avwef©yZ n‡q‡Q| GB evwYR¨ hy× ˆewk¦K A_©bxwZi cÖe„w× 0.2 kZvsk Kwg‡q †`‡e| wek¦ evwYR¨ AbywgZ 3.2 kZvsk cÖe„w×i wecix‡Z wek¦ evwY‡R¨i 3 kZvsk cÖe„w× n‡q‡Q| µgea©bkxj evwYR¨ msNvZ Ges ewa©Z A_©‰bwZK AwbðqZvi Kvi‡Y 2018 mv‡ji wek¦evwY‡R¨i µggš’i cÖe„w×i ci 2019 Ges 2020 mv‡ji wek¦ evwYR¨ µgea©gvbfv‡e k³ cÖwZeÜKZvi m¤§~Lxb n‡e| wek¦ evwYR¨ ms¯’vi A_©bxwe`iv cÖZ¨vkv K‡i †h, wewfbœ c‡Y¨i evwY‡R¨i cÖe„w× 2019 mv‡j 2.6 kZvs‡k †b‡g Avm‡e| 104 Annual Report 2018 ˆewk¦K g~j¨ùxwZ wbw`©ó wKQy †`‡k Biv‡bi ˆZj ißvwb‡Z gvwK©b wb‡lavÁvi mvgwqK weiwZ Ges Av‡gwiKvi †iKW© cwigvY Acwi‡kvwaZ †Zj Drcv`b; GKB mv‡_ `ye©j ˆewk¦K cÖe„w× ˆewk¦K R¡vjvbxi g~‡j¨i Dci wb¤œgyLx Pvc ˆZwi K‡i| AvBGgGd Gi me©‡kl AvDUjyK G †Z‡ji g~j¨ Pvi eQ‡ii m‡ev©”P A‡±ve‡i BDGm Wjvi 81 n‡Z †deªæqvix‡Z BDGm Wjvi 61 †Z †b‡g G‡m‡Q| DbœZ A_©bxwZ‡Z ˆewk¦K g~j¨ùxwZ 2018 mv‡ji 2.00 kZvsk n‡Z 1.6 kZvs‡k †b‡g Avm‡e e‡j AvksKv Kiv n‡”Q| `ªe¨g~‡j¨i `icZ‡bi Kvi‡Y DbœZ A_©bxwZ‡Z †fvM¨c‡Y¨i g~j¨ùxwZ w¯’i wQj| gvwK©b hy³ivó I gvwK©b hy³iv‡R¨i g~j¨ùxwZ 2 kZvs‡ki KvQvKvwQ wQj| Ab¨ w`‡K D`xqgvb evRvi A_©bxwZ¸‡jvi g‡a¨ Px‡bi g~j¨ùxwZ 2 kZvs‡ki bx‡P wQj| cÖavb P¨v‡jÄmg~n Pjgvb evwYR¨ ؇Üi Kvi‡Y wek¦evwYR¨, wewb‡qvM Ges Drcv`b ûgwKi gy‡L i‡q‡Q| wek¦ A_©bxwZi g~j P¨v‡jÄ n‡jv eQie¨vcx gvwK©b-Pxb evwYR¨hy×| hw`I †Kvb Pzw³‡Z †cŠuQv‡bv hvq, GwU we‡k¦i e„nËg `ywU A_©bxwZi ga¨Kvi ØÜ wbim‡b Lye GKUv mnvqK n‡e bv| ‡h‡nZz `yB †`kB ˆewk¦K AvwacZ¨, gh©v`v Ges m¤ú‡`i jovB‡q e¨¯Í, †m‡nZz GB evwYR¨ ØÜ hyMe¨vcx Pj‡Z cv‡i| hw` evwbR¨ hy× cÖkwgZ bv nq, Zvn‡j e¨emvwqK Kvh©µg cÖZ¨vkvi †P‡q Kg n‡e| Avw_©K AeKvVv‡gvi Ici mvBevi nvgjv SzuwKi Ab¨Zg Av‡iKwU Drm, KviY GwU AvšÍt‡`kxq cwi‡kva c×wZ Ges †mev I c‡Y¨i mieivn aviv‡K gvivZœKfv‡e e¨vnZ K‡i| ivR‰bwZK KviY¸‡jvi g‡a¨ i‡q‡Q bZzb cÖkvmb ev wb©evPb‡K wN‡i cwjwm AwbðqZv, ga¨cÖv‡P¨ f‚ivR‰bwZK msKU; evwYR¨ ؇›`i mv‡_ c~e© Gwkqvi msKU Ges wek¦ A©_bxwZi AwaKZi AvuUmvuU Ae¯’v e„n`vqZ‡b cÖwZdwjZ g‡bve„wËi Dci eo ai‡Yi cÖfve †dj‡e| 2019 mv‡ji wek¦ A_©‰bwZK `„wófw½ 2017 mv‡ji AwfÁZvjã AwaKZi kw³kvjx MwZ‡eM 2018 Ges 2019 mv‡jI Pjgvb _vK‡e †h‡nZz `yB eQ‡iB ˆewk¦K cÖe„w× 3.9 kZvs‡k ms‡kvwaZ n‡q‡Q| ˆewk¦K `„wófw½i GB DaŸ©g~Lx cÖeYZv g~jZ DbœZ A_©bxwZi dj, †hLv‡b 2018 I 2019 mv‡j cÖe„w× 2 kZvsk Qvwo‡q hv‡e e‡j cÖZ¨vkv Kiv n‡”Q| D³ c~ev©fvm GB cÖZ¨vkv‡K cÖwZdwjZ K‡i †h, AbyK~j ˆewk¦K A_©‰bwZK Ae¯’v Ges kw³kvjx g‡bvfv‡ei Kvi‡Y Pvwn`vi mv¤úªwZK Da©g~LxZv (we‡klZ wewb‡qvM) envj _vK‡e|
  104. †kqvi‡nvìvi‡`i cÖwZ cwiPvjK‡`i cÖwZ‡e`b evsjv‡`k A_©bxwZ evsjv‡`‡ki mvgwóK A_©‰bwZK Ae¯’v wek¦e¨vs‡Ki wi‡cvU© Abyhvqx we‡k¦i cÖ_g cvuPwU `ªæZ ea©bkxj A_©bxwZi GKwU evsjv‡`k| g¨vbyd¨vKPvwis, wbg©vY Ges k‡m¨i ev¤úvi djb; G¸‡jvi mv‡_ e¨w³MZ †fvM, †iwgU¨vÝ Ges MÖvgxY Avq e„w×i Kvi‡Y G cÖe„w× m¤¢e n‡q‡Q| evsjv‡`‡ki A_©bxwZ cwiwgZ nv‡i e„w× †c‡q mvg‡b GwM‡q hv‡”Q| †`kxq Pvwn`vi cÖe„w×i mv‡_ e¨w³MZ †fvM Ges wewb‡qvM (†h¸‡jvi Ae`vb h_vµ‡g 4.7 kZvsk Ges 3.25 kZvsk) cÖe„w×i g~j wbqvgK| 2017-18 A_©eQ‡i gv_vwcQy RvZxq Avq gvwK©b Wjvi 1,751 G †cŠu‡Q‡Q| mvgwqK Dcv‡Ë †`Lv hvq †h, gv_vwcQz wRwWwc GKB MwZ‡Z †e‡o MZ eQ‡i 1,675 gvwK©b Wjvi n‡Z 2018-19 A_©eQ‡i 1,827 gvwK©b Wjv‡i †cŠu‡Q‡Q| evsjv‡`k ey¨‡iv Ae ÷¨vwUw÷K&m Gi mvgwqK cÖv°jb Abyhvqx 2018-19 A_© eQ‡i evsjv‡`‡ki cÖe„w× n‡e MZ A_©eQ‡i 7.86 kZvs‡ki Gi wecix‡Z 8.13 kZvsk| A_©‰bwZK cÖe„w× RvwZms‡Ni wi‡cvU© Abyhvqx D”PgvÎvi ‡gvU †`kR Drcv`‡bi Kvi‡Y 2019 mv‡j evsjv‡`k we‡k¦i Z…Zxq `ªæZZg ea©Ykxj †`k n‡e| A_© eQi 2018 Gi ev‡RU Abyhvqx ev‡RUxq j¶¨gvÎv 7.40 kZvsk Qvwo‡q evsjv‡`k 7.86 kZvsk cÖe„w× AR©b K‡i‡Q| w¯’wZkxj ivR‰bwZK Ae¯’v Ges 2018 mv‡ji mvgwóK A_©bxwZ A_©‰bwZK Kg©KvÛ‡K e¨vcKfv‡e Z¡ivwš^Z K‡i‡Q| evsjv‡`k ey¨‡iv Ae ÷¨vwUw÷K&m (weweGm) Gi Z_¨g‡Z eZ©gvb evRvi `‡i 201718 A_©eQ‡ii wRwWwc g~j¨ `vuwo‡q‡Q 22,50,479 †KvwU UvKv| 2018 mv‡j e„nr ivR‰bwZK A_ev wbivcËv mswkøó weNœ N‡Uwb| hv GUvB wb‡`©k K‡i †h, †`kwU Ggb GKwU bZzb hy‡Mi w`‡K GwM‡q hv‡”Q †hLv‡b ivR‰bwZK w¯’wZkxjZv I chv©qµwgK D”P cÖe„w× Ae¨vnZ _vK‡e| we`y¨r AeKvVv‡gv Lv‡Z wecyj A_v©qb wbKU fwel¨‡Z dj w`‡Z ïiæ Ki‡e, hv cÖe„wׇK evwo‡q g~j A_©bxwZi AvKvi evov‡e| K…wl LvZ evsjv‡`k GKwU e„nr e-Øxc m`„k †`k, †hLv‡b K…wl A_©bxwZi GKwU ¸iæZ¡cyY© LvZ| weweGm Gi cÖv_wgK cÖv°jb Abyhvqx 2018 A_©eQ‡i Lv`¨k‡m¨i cwigvY `vuovq cÖvq 413.25 j¶ †gwUªK Ub hvi g‡a¨ AvDm 27.9 j¶ †gwUªK Ub,Avgb 139.94 j¶ †gwUªK Ub, †ev‡iv 195.76 j¶ †gwUªK Ub, Mg 11.53 j¶ †gwUªK Ub Ges fzÆv 38.93 j¶ †gwUªK Ub FAO Gi wi‡cvU© Abymv‡i 2018 mv‡j evsjv‡`k cÖ_gev‡ii gZ gvQ Drcv`‡b ¯^qsm¤ú~Y© nIqvi ci Af¨šÍixb Rjvkq n‡Z gvQ Drcv`‡b Z…Zxq Ges RjR `ªe¨ Drcv`‡b cÂg ¯’vb AwaKvi K‡i| eZ©gv‡b †Zjvwcqv Drcv`‡b evsjv‡`k we‡k¦ 4_© Ges Gwkqv‡Z 3q| GKK cÖRvwZ wn‡m‡e RvZxq gvQ Bwjk †gvU gvQ Drcv`‡b wmsnfvM Ae`vb ivL‡Q| Avgv‡`i RvZxq gvQ Bwjk ÔGeographical Indication Registration CertificateÕ AR©b K‡i‡Q| wkí LvZ evsjv‡`ki gZ Dbœqbkxj †`‡k mvgwRK AMÖmiZv AR©b Ges ‡UKmB A_©‰bwZK Dbœq‡bi Rb¨ wkívqb Acwinvh© c~e©kZ©| evsjv‡`‡ki wRwWwc‡Z wkí Lv‡Zi Ae`vb avivevwnKfv‡e evo‡Q| weweGm Gi Z_¨g‡Z, 2017-18 A_©eQ‡i wRwWwc‡Z e„n`vqZb wkí Lv‡Zi cÖv°wjZ Ae`vb 33.66 kZvsk hv 2016-17 A_© eQ‡i wQj 32.42 kZvsk| wRwWwci 15wU Lv‡Zi g‡a¨ Lwb Ges D‡Ëvjb, g¨vbyd¨vKPvwis, we`y¨r, cvwb I M¨vm mieivn I wbgv©Y cÖf…wZ e„n`vqZb wkí Lv‡Zi g‡a¨ g¨vbyd¨vKPvwis Lv‡Zi Ae`vb m‡ev©”P| 2017-18 A_©eQ‡ii wRwWwc Abyhvqx g¨vbyd¨vKPvwis Lv‡Zi Ae`vb wQj 22.85 kZvsk hv 2016-17 A_© eQ‡i wQj 21.74 kZvsk| mv¤úªwZK mg‡q evsjv‡`ki A_©bxwZ we‡k¦i `ªyZZg ea©bkxj GKwU A_©bxwZ wn‡m‡e wek¦e¨vs‡Ki gZ cÖwZôv‡bi cÖksmv Kzwo‡q‡Q| ˆZix †cvkvK wkí LvZ we‡klZ GmGgB LvZ‡K AZ¨vaywbK cÖhyw³ I D™¢ve‡bi Avmbœ hy‡Mi P¨v‡jÄ †gvKv‡ejv Ki‡Z n‡e| ‡mev LvZ AvMvgx‡Z wek¦ A_©bxwZi g~j cÖfveK n‡e ‡mev LvZ †hLv‡b wkí I K…wl Lv‡Zi Ae`vb D‡jøL‡hvM¨fv‡e K‡g hv‡e| ˆewk¦K avivi mv‡_ m½wZ †i‡L evsjv‡`‡ki †mev LvZI `ªæZ ewa©Z n‡”Q Ges weMZ eQi¸‡jv‡Z DaŸ©©g~Lx cÖeYZv a‡i †i‡L‡Q| eo I ga¨g mvwii AeKvVv‡gv myweavi Pjgvb DbœwZi Kvi‡Y †`‡ki †mev LvZ mswkøó †Kv¤úvbx¸‡jvi cÖKí e¨e¯’vcbvi m¶gZv µgea©gvb, m¤úªwZ LyPiv I cvBKvwi Kg©Kv‡Ûi cvkvcvwk we`y¨r Pzw³mg~n Ges AeKvVv‡gvi Dbœqbmg~n D‡jøL‡hvM¨fv‡e †e‡o‡Q| RvZxq A_©bxwZ‡Z †mev Lv‡Zi Ae`vb m‡ev©”P| 2017-18 A_©eQ‡i wRwWwc‡Z †mev Lv‡Zi Ae`vb `vuwo‡q‡Q 52.11 kZvsk| e„n`vqZb †mev Lv‡Zi g‡a¨ LyPiv I cvBKvwi evwY‡R¨i Ae`vb(13.95 kZvsk) m‡ev©”P| Bangladesh Economic Review 2018 Abyhvqx e„n`vqZb †mev Lv‡Zi AšÍfz©³ ÔLyPiv I cvBKvwi e¨emvÕ, †nv‡Uj I †i‡¯Íviv cwienb, msi¶YvMvi I †hvMv‡hvM LvZ mg~n 2017-18 A_©eQ‡i h_vµ‡g 7.45 kZvsk, 7.28 kZvsk I 6.58 kZvsk Ae`vb †i‡L‡Q| mÂq I wewb‡qvM e¨q Lv‡Zi PyovšÍ DcvË Abymv‡i †fvM 2.50 kZvsk †e‡o 2016105
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  116. †kqvi‡nvìvi‡`i cÖwZ cwiPvjK‡`i cÖwZ‡e`b e¨emvwqK AMÖMwZ ch©v‡jvPbv kÖwgKB wb¤œ Av‡qi wbg©vY wkí, wkcBqvW© Ges wk퇶‡Îi kÖwgK| GQvovI i‡q‡Q cÖ‡KŠkjx, Wv³vi, wk¶K I Ab¨vb¨ cÖevmx evsjv‡`kx| GB G·‡PR nvDR A`¨vewa 10,855.36 †KvwU UvKv †iwg‡UÝ cvwV‡q‡Q| 2018 mv‡j †Kv¤cvwbwU †iwgU¨vÝ K‡i‡Q 842.36 †KvwU UvKv hv 2017 mv‡j wQj 812.89 †KvwU UvKv| wm½vcyi¯’ evsjv‡`kx †iwg‡UÝ mieivnKvix‡`i evRv‡i †bZ…Z¡ a‡i ivLvi gva¨‡g †UKmB cÖe„w×i Rb¨ AMÖYx G·‡PR nvDR cÖvB‡fU wjt A‡bK¸‡jv †KŠkj Aej¤^b K‡i‡Q| †Kv¤cvbx wbqš¿YKvix KZ©„c‡¶i wb‡`©kbv †g‡b Pjvi me©vZ¡K cÖ‡Póv MÖnY Ki‡Q Ges †mevi gvb e„w×i gva¨‡g AvMvgx eQi¸‡jv‡Z †UKmB cÖe„w× wbwðZ Kivi †Póv Pvwj‡q hv‡”Q| AMÖYx †iwg‡UÝ nvDR GmwWGb weGBPwW gvj‡qwkqv gvj‡qwkqvi wecyj msL¨K evsjv‡`kx‡`i e¨vswKs P¨v‡b‡j mnR Ges myweavRbK fv‡e UvKv cvVv‡bvi †ÿ‡Î `xN©w`‡bi Pvwn`vi †gUv‡bvi j‡¶¨ evsjv‡`k miKv‡ii Aby‡gv`‡b †`‡ki †bZ…Z¡¯’vbxq e¨vs‡Ki wn‡m‡e AMÖYx e¨vsK 2006 mv‡j gv‡j‡qwkqvi hvGv ïiæ K‡i| AMYx e¨vs‡Ki mvewmwWqvix wn‡m‡e AMÖYx †iwgU¨vÝ nvDR GmwWGb weGBWwW, gvj‡qwkqvi ivRavbx Kzqvjvjvgcy‡i hvGv ïiæ K‡i GwU †iwg‡UÝ e¨emvi cÖwZKyjZv m‡Ë¡I fvj MwZ a‡i †i‡L‡Q| kw³kvjx gvwK©b Wjvi, Pxb I ivwkqvmn wKQy A_©‰bwZK A‡j g›`v Ges AcÖZ¨vwkZ gy`ªv hy‡×i Kvi‡Y mviv we‡k¦i †iwgU¨vÝ e¨emv Lvivc hv‡”Q| Z_vwcI AMÖYx †iwgU¨vÝ nvDm †iwgU¨vÝ msMÖ‡n D‡jøL‡hvM¨ AMÖMwZ AR©b K‡i‡Q Ges cÖPzi cwigvY †iwgU¨vÝ AR©‡bi KwVb KvRwU K‡i hv‡”Q| AMÖYx †iwgU¨vÝ nvD‡Ri 6wU kvLv cÖevwm‡`i UvKv cvVv‡bvmn evsjv‡`‡k AMÖYx e¨vs‡Ki wewfbœ kvLvq wnmve †Lvjv, evsjv‡`k miKv‡ii I‡qR Avb©vm© †W‡fjc‡g›U eÛ †Kbvi †¶‡Î me©‡Zvfv‡e mnvqZv w`‡q hv‡”Q| AMÖYx †iwgU¨vÝ nvDm 2018 mv‡j 555.03 †KvwU UvKv †iwgU¨vÝ K‡i‡Q| AMÖYx †iwgU¨vÝ nvD‡Ri 2019 mv‡ji cwiKíbvq i‡q‡Q-gvj‡qwkqvq Av‡iv 3wU kvLv †Lvjv, Gbwmwe Ges GbwRI¸‡jvi mv‡_ Drawing Arrangement cÖwZôv| GQvov B‡›`v‡bwkqv, wcwjcvBb, fviZ I †bcv‡j bZzb kvLv †Lvjvi gva¨‡g behy‡M cÖ‡ek Ki‡e| AvšÍRv©wZK gv‡bi `¶Zv, ¸YMZ MÖvnK †mevi gva¨‡g †Kv¤úvbxwU gv‡jwkqvq evsjv‡`kx cÖevmx‡`i †mev w`‡Z m`v cÖ¯‘Z i‡q‡Q Ges eûgyLx cÖ‡Póv MÖn‡Yi gva¨‡g e¨emv e„w× Ki‡Q hv AvMvgx eQi¸‡jv‡Z †UKmB Dbœq‡b mnvqZv Ki‡e| AMÖYx †iwgU¨vÝ nvDm KvbvWv BbK‡cv©‡ikb AMÖYx †iwgU¨vÝ nvDm KvbvWv BbK‡cv©‡ikb AMÖYx e¨vs‡Ki wbR¯^ mvewmwWqvix †Kv¤úvbx| GwU †dWv‡ij Awafz³ ms¯’v hv †g 11,2012 mv‡j, evsjv‡`k miKv‡ii Aby‡gv`‡bi ci Canada Business Corporation AC Gi Aax‡b Awafz³ nq| Gi cÖavb D‡Ïk¨ n‡jv KvbvWv cÖevwm evsjv‡`kx‡`i‡K †mev †`Iqv| GwU KvbvWvi Financia; Transation & Reporting Analysis Center of Canada (FINTRAC) Gi Aax‡b wbewÜZ| GwU 26†k †g 2014 mv‡j evsjv‡`kx‡`i UvKv Sv‡gjvgy³fv‡e cvVv‡bvi Rb¨ hvÎv ïiæ K‡i| GwUB KvbvWv‡Z Aew¯’Z evsjv‡`ki GKgvÎ mvewmwWqvix †Kv¤úvbx| ¯^í mg‡q †Kv¤úvwbwU h‡_ó AMÖMwZ jvf K‡i‡Q| GwU B‡Zvg‡a¨ 11.1 wgwjqvb KvbvwWqvb Wjvi †iwgU¨vÝ cvwV‡q‡Q Ges w`‡b w`‡b e¨vemvwqK cwiwa e„w× Ki‡Q| ‡h‡nZz e¨vemv e„w× cv‡”Q †jvKRb e¨vswKs P¨v‡b‡j ‰eafv‡e Zv‡`i KóvwR©Z UvKv cvVv‡bvi AvMÖn cÖKvk Ki‡Q| gvwbjÛvwis I mš¿vmx Kv‡R A_©vqb cÖwZ‡iva cwicvjb gvwbjÛvwis Ggb GKwU cÖwμqv, hvi gva¨‡g A‰eafv‡e AwR©Z A_© ev m¤ú` cÖK…Z Drm †Mvcb evsjv‡`k n‡Z we‡`‡k A_ev we‡`k n‡Z evsjv‡`‡k n¯ÍvšÍi, iæcvšÍi A_ev †iwgU¨vÝ Kiv| AMÖYx e¨vsK wjwg‡UW G¨vw›U gvwbjÛvwis Kvh©µg cwicvj‡b GKwU mvsMVwbK KvVv‡gv †g‡b Pj‡Q| 1. MÖvnK‡`i wnmve †Lvjvi mg‡q AML & CFT ixwZbxwZ †g‡b Pj‡Q| Zviv mwVK Ges cyb©v½ Z_¨ msMÖn Ki‡Q, †iKW© ivL‡Q, †KIqvBwm I wUwc mwVKfv‡e ˆZwi K‡i Zv msiÿY I gwbUwis Ki‡Q| 2. wmwUAvi, GmwUAvi Ges GmGAvi Gi Z_¨ †MvGGgGj wgWjIq¨vi wm‡÷‡g wbqwgZfv‡e evsjv‡`k e¨vs‡K †cÖiY Ki‡Q| 3. AMÖYx e¨vsK wjwg‡UW mKj Kg©KZ©v Kg©Pvix‡`i G¨vw›U gvwbjÐvwis Gi cÖwkÿ‡Yi Dci ¸iæZ¡ cÖ`vb K‡i‡Q Ges Z`vbyhvqx cÖwkÿY Kg©m~wP Pjgvb i‡q‡Q| UN Sanction Screening list Gi Rb¨ 24 RyjvB 2018 Zvwi‡L AML Velocity Solution Suite Software Pvjy K‡i‡Q| 4. evsjv‡`k e¨vs‡Ki wb‡`©kbvi Av‡jv‡K AMÖYx e¨vsK wjwg‡UW eZ©gv‡b ÔgvwbjÛvwis I mš¿vmx Kv‡R A_©vqb SzuwK e¨e¯’vcbvÕ kxl©K GKwU g¨vby‡qj cÖKvk K‡i‡Q Ges evsjvq ÔCompliance of AML & CFT: Policy & Procedure-Guide BookÕ cÖKvk K‡i‡Q| RvZxq ivR¯^ Lv‡Z Ae`vb miKvi Avgv‡`i me‡P‡q ¸iæZ¡c~Y© Askx`vi hv †`‡ki A_©‰bwZK Dbœq‡b we‡kl f~wgKv cvjb K‡i| GKwU ˆea Ges ˆbwZK mËv wn‡m‡e cÖ‡qvR‡b AMÖYx e¨vsK wjwg‡UW AvqKi KZ©b, f¨vU Ges AveMvwi myé Ges wewfbœ e¨q, Rgvi Dci my` Ges e¨vswKs †mevi Dci Dr‡m Ki KZ©b K‡i Zv miKvwi †KvlvMv‡i Rgv K‡i| e¨vsK Zvi Kg©x‡`i c‡¶ AvqKi cwi‡kva K‡i _v‡K| e¨vsK 117
  117. †kqvi‡nvìvi‡`i cÖwZ cwiPvjK‡`i cÖwZ‡e`b e¨emvwqK AMÖMwZ ch©v‡jvPbv 2017 Ges 2018 mv‡j †gvUv`v‡M miKvwi †KvlvMv‡i h_vµ‡g 598.98 †KvwU UvKv Ges 630.42 †KvwU UvKv Rgv K‡i| GwU RvZxq Ae`v‡bi cÖwZ Avgv‡`i b¨vqmsMZ I avivevwnK cÖwZkÖæwZi cÖwZdjb| `„wófw½ 2019 Zxeª cÖwZ‡hvwMZv Ges bvbvwea P¨v‡jÄ _vKv m‡Ë¡I e¨vsK cÖvq mKj ¸iæZ¡c~Y© †¶‡ÎB DbœwZ mvab Ki‡Z m¶g n‡q‡Q| e¨vsK G mKj cÖwZ‡hvwMZv Ges P¨v‡jÄ †gvKv‡ejvq Kgx©‡`i `¶Zv e„w× K‡i Ges †hLv‡b hZUv m¤¢e AvaywbKvqb K‡i e¨vswKs Kvh©μg Pvwj‡q hv‡”Q| e¨vsK m¤úwËi ¸YMZgvb Dbœqb, D”PZi my` Avq, DbœZZi †mev I Kg© cwiPvjbvi gva¨‡g Gi e¨emvi cÖe„w× AR©‡b `„pZvi mv‡_ GwM‡q hv‡e| GQvovI `¶ Rbej, e¨emvwqK mykvmb I SzuwK e¨e¯’vcbvi j‡¶¨ cÖwZwbqZ myô cwiKíbv MÖnY Kiv n‡e| D”P Acv‡iwUs gybvdv AR©b, b~¨bZg g~jab msi¶Y, †kÖbxweb¨vwmZ FY me©wb¤œ ch©v‡q bvwg‡q Avbv Ges mKj LvZ †hgb- Avg`vwb ißvwb e¨emv, †iwgU¨vÝ AvniY, Znwej e¨q msi¶Y BZ¨vw` wel‡q mdjZv AR©‡b me©vZ¥K cÖ‡Póv Ae¨vnZ _vK‡e| GQvovI mvgwMÖK Dbœq‡b e¨vsK h_vmva¨ f‚wgKv cvjb Ki‡e| wnmve cÖ¯‘ZKiY evsjv‡`k GKvDw›Us ÷vÛvW© (weGGm), evsjv‡`k wdbvwÝqvj wi‡cvwU©s ÷vÛvW© (weGdAviGm) Ges evsjv‡`k e¨vs‡Ki weAviwcwW mvKz©jvi bs 14, ZvwiL 25 Ryb 2003 G cÖ`Ë QK †gvZv‡eK GB Avw_©K weeiYx ˆZix Kiv n‡q‡Q †hLv‡b 2018 mv‡ji †k‡l cÖYxZ wnmv‡e e¨vs‡Ki cÖK…Z I mwVK wPÎ dz‡U D‡V‡Q| e¨emvwqK Kvh©μ‡gi djvdj Ges bM` A_© cÖevn BZ¨vw` mwVKfv‡e cÖwZdwjZ n‡q‡Q Ges e¨vsK †Kv¤úvwb G¨v± 1991 Ges Ab¨vb¨ mswkøó weavb I AvBbvbymv‡i wnmve cÖ¯‘Z Kiv n‡q‡Q hv wewae× wbix¶KMY KZ©„K h_vh_fv‡e cÖZ¨vqb Kiv n‡q‡Q| jf¨vsk †NvlYv cwiPvjbv cl©` KZ…©K 2018 m‡bi Rb¨ †Kvb jf¨vsk cª`v‡bi mycvwik Kiv nqwb| wbix¶K‡`i wb‡qvM GKbvweb Ges g¨ve&m GÛ †R cvU©bvim PvU©vW© GKvD›U¨v›Um dvg©Øq‡K 2018 mv‡ji Rb¨ ewntwbixÿK wn‡m‡e wb‡qvM †`qv n‡q‡Q| cieZ©x evwl©K mvaviY mfvq evsjv‡`k e¨vs‡Ki ZvwjKv †_‡K `yÕwU AwWU dvg©‡K cieZ©x eQ‡ii Rb¨ bZzb wbix¶K wn‡m‡e wb‡qvM Kiv n‡e| 118 Annual Report 2018 K…ZÁZv ¯^xKvi eZ©gvb eQ‡i e¨vsK †h mvdj¨ AR©b K‡i‡Q Zv wewfbœ chv©‡qi †÷K‡nvìvi‡`i Ae`vb Qvov m¤¢e n‡Zv bv| e¨vs‡Ki mv‡_ m¤úK© `„p Ki‡Y †h me mš§vwbZ MÖvnK AvšÍwiK wQ‡jb, cwil` Zuv‡`i cÖwZ K…ZÁ| cwiPvjbv cl©` e¨vs‡Ki c„ô‡cvlK, ïfvbya¨vqx, miKvi, evsjv‡`k e¨vsK, R‡q›U óK †Kv¤úvwb I dvg©mg~‡ni †iwR÷ªvi‡K AvšÍwiK ab¨ev` Ávcb Ki‡Q e¨vs‡Ki Awfó j¶¨ AR©‡b wbišÍi mg_©b I mn‡hvwMZv cÖ`v‡bi Rb¨| mgqgZ wbix¶v Kvh©μg m¤úbœ Kivi Rb¨ cwiPvjbv cl©` Gi cÿ †_‡K GKbvweb Ges GgGweGm GÛ †R cvU©bvim, PvU©vW© GKvD›U¨v›Um‡K ab¨ev` Rvbvw”Q| e¨vs‡Ki cwiPvjbv Kvh©μgmn mKj †¶‡Î Dbœqb Z¡ivwš^Z Kivi j‡¶¨ GKwbô _vKvi AsMxKv‡ii Rb¨ cwiPvjbv cl©` e¨vs‡Ki DaŸ©Zb wbev©nxmn me©¯Í‡ii Kg©KZv© I Kg©Pvixe„›`‡K ab¨ev` Ávcb Ki‡Q| cwi‡k‡l, cwiPvjbv cwil` mš§vwbZ †kqvi‡nvìviMY‡K we‡klfv‡e ab¨ev` Ávcb Ki‡Q e¨vs‡Ki Dci wek¦vm I Av¯’v ¯’vc‡bi Rb¨| †m mv‡_ Zv‡`i‡K cwiPvjbv cl©` Avk¦¯Í Ki‡Q †h, e¨vs‡Ki Kvh©μg kw³kvjx K‡i G cÖwZôv‡bi Dbœq‡bi gva¨‡g Zviv †kqvi‡nvìviM‡Yi ¯^v_© myi¶vq cÖqvm Ae¨vnZ ivL‡e| cwiPvjbv cl©‡`i c¶ †_‡K W. Rv‡q` eL&Z †Pqvig¨vb
  118. Integrated Report 120 Products and Services Business Strategy 121-122 123 Corporate Governance 124-138 Board Audit Committee 139-142 Internal Control and Compliance 143-148 Risk Management 149-157 Disclosure Under Basel-III 157-168
  119. Integrated Report Business Model   Agrani Bank Limited operates with a diversified business model that helps enhance our resilience to adjust and adopt changes in response to the external environment. Our business model is aligned with our vision of being a leading, diversified transatlantic bank with global reach. We draw on the following to support our activities and deliver value to our stakeholders. We aim to provide superior services to help customers and clients create, grow and protect wealth in a sustainable way. We aim to deliver broad spectrum of value through the way of our commitment to serve the nation of our country We support our stakeholders via a commercially successful that generates business long-term sustainable returns. Products and Services Deposit Low cost/No cost Deposit Accounts • • • • • • • • • • 120 Current Deposit (CD) Savings Deposit (SB) Special Notice Time Deposit (SNTD) Non-Resident Special Taka Account (NRTA) Non-Resident Investors Taka Account (NRIT) Students Savings A/C (School Banking) Small Life Insurance Policy Holders A/C Ten Taka Farmers A/C Freedom Fighters A/C Other Beneficiaries A/C under Social Securities Program Annual Report 2018 FDR Account • Fixed Deposit (FDR) Deposit Scheme • • • • • • • • • • • Agrani Bank Pension Scheme (APS) Agrani Bank Bishesh Shanchay Scheme (ABS) Agrani Bank Quarterly Income scheme Agrani Bank Double Benifit scheme Agrani Bank Millinionaire Deposit scheme Agrani Bank Lakhpoti Deposit scheme Agrani Bank Prabash Deposit scheme Agrani Bank Deposit scheme for Women Agrani Senior Citizen Savings Scheme Agrani Bank Sanchay Pension Scheme (ASPS) Agrani Bank Wage Earners Deposit Scheme
  120. Integrated Report Products and Services Foreign Currency Account Import Finance • • • • • Loan Against Imported Merchandise (LIM) • Loan Against Trust Receipt (LTR) • Payment Against Document (PAD) Foreign Currency (FC) A/C Non-Resident Foreign Currency Deposit (NFCD) A/C Resident Foreign Currency Deposit (RFCD) A/C Exporters Retention Quota (ERQ) A/C Export Finance Loans & Advances Continuous Loan • Cash Credit (Hypo) • Cash Credit (Pledge) • Secured Overdraft (SOD) Term Loan • Industrial Credit (IC) • Housing Loan (General & Commercial) • Consumer Credit • Loan for Overseas Employment • Weavers’ Credit Rural & Agro Credit • Crop Loan • Fishery Loan • Animal Husbandry Loan • Agri Machinary Loan • Rural Transport Loan • Swanirvar Loan • Poverty Alleviation Loan Small and Medium Enterprise Loan • • • • Service Sector Loan Trading Sector Loan Manufacturing Sector Loan Women Enterpreneurs Loan Other Loan Products • Agrani Bidesh Jawar Loan (ABJL) • Green Finance • Any purpose Loan • Term Loan for Muktijoddha • Export Cash Credit • Packing Credit (PC) • Local / Foreign Bills Purchased (FBP) • Loan Against Export Development Fund (EDF) • Advance Against Cash Incentive (Subsidy, Assistance) Treasury Money Market • Call Money Transaction • Term Placement (FDR) • Treasury Bills • Treasury Bonds • Secondary Trading of Govt. Securities • Repo • Reverse Repo • Custodian Services • Other Investments Foreign Exchange Market • Selling Foreign Currency for Import Payment • Buying Foreign Currency against Export Proceeds • Fixation of Exchange Rate • Foreign Currency Buying and Selling • SWAP Transactions • Forward Transaction • Term Placement Letter of Credit • Letter of Credit - Sight • Letter of Credit - Usance • Back to Back L/C 121
  121. Integrated Report Products and Services Letter of Guarantee Value Added Service • Advance Payment Guarantee • Bid Bond • Performance Guarantee • Shipping Guarantee • Guarantee - Others • Standby Credit • Locker Service • Utility Bill Collection • Arm forces Pension Payment Other Foreign Exchange Service Merchant Banking Service • Issue Management • Underwriting • Portfolio Management • Documentary Bill Collection • Advanced Payment for Import & Export • Foreign Remittance (Incoming & Outgoing) • Foreign Currency Endorsement against Passport Islamic Banking Service • Issuance of Draft, TT Deposit • Collection of Draft, Cheque, TC • Al Wadiah Current A/C • Opening of Student File, Medical File Mudaraba Deposit Account • Mudaraba Savings Account • Mudaraba Hajj Savings Scheme • MudarabaTerm Deposit (MTDR) • Mudaraba Special Savings Scheme • Mudaraba Special Notice Deposit (MSND) • Mudaraba Mohor Savings Scheme • Mudaraba Probashi Kalyan Savings Account • Mudaraba Cash Waqf Savings Scheme Cash Service • ATM Service • Cheque Encashment • Foreign Currency Investment Fund Transfer • Inter-Branch Money Transfer • SWIFT • Telegraphic Transfer (TT) • Issuing Foreign Draft • Encashing Foreign Draft • Bangladesh Electronic Fund Transfer Network (BEFTN) • Bangladesh Automated Clearing House (BACH) • Online Deposit to Accounts • Real Time Gross Settelment (RTGS) 122 Annual Report 2018 • Bai Murabaha (Pledge) • Bai Muazzal (Hypo) • Higher purchase Shirkatul Meilk • Bai Sal
  122. Integrated Report Business Strategy Deposit At present mobilization of deposits became highly competitive . to create a technology-based most efficient banking environment for our customer. ABL has taken various strategies; • to achieve core deposit goals (Low cost, No cost deposit) taking rigorous campaign and Hajj deposit campaign and so on. • Offering cash management services, i.e. collection of institutional accounts to ensure fast & secure cash service. • Collect deposit from expatriates ABL lounches a new product for remitter given attractive interest rate. • Offering different smart deposit scheme, like Double benefit, Millionaire deposit scheme, Monthly deposit scheme. • Special deposit scheme for woman. • Garments sector will be more focused. • Focusing on service export sectors like IT and education. Remittance Amongst international flows, the region shows three distinct trends - emigration for settlement to Europe, Australia and North America; contract labour migration to Middle-Eastern and a few South-East Asian countries; and the movements of people in border areas such as India. • Initiatives and Incentives for Smooth Transfer of Remittances • Beneficiary account is accredited within 24 hours. • SMS alert system is introduce to Remitter & Beneficiary. • Upazilla/District level NRB list is to collect as data base. • Initiative to explore new markets. NPL Management Strategies Loans and Advances • Include all Staff & executives to collect NPL loans. Loans and advance credit program is an important development scheme in the banking sector in most of the developing economies including Bangladesh. In Bangladesh people of limited monthly income confront almost regularly the problem of improving their standard of living. The advance portfolio of the Bank is well diversified and covers funding to a wide spectrum of business & industries. • By forming Recovery Cell in the circle, Zonal and Branch level the monitoring; supervision and follow up have been made through the year. • Financing for small businesses is designed to help meet short-term financing needs and that acts as a great tool to help manage cash flow. • Act as an advisor, not Just a lender, for small businesses. • Loan segment to client base and create personalized customer experiences. • Create real customer relationships • Give priority to export-oriented industries to help increase forex flow, earn through multi-channel which will help increase no cost fund of the Bank. Export and Import The Bank has made a significant contribution to the national economy under the prudent leadership of management. ABL has a sizable portfolio in export and import financing to support the growing of national economy. to achieving the business target ABL takes different kind of steps are as follows: • Provide high quality financial services in import & export trade. • Arranging good looking credit lines for international trade. • Marketing for potential clients having strong entrepreneurship spirit to grow. • Special recovery activities were carried out by forming higher executive recovery team to different circles to monitor recovery achievement. • Active portfolio reductions can be achieved either through sales and/or writing off provisioned NPL exposures that are deemed unrecoverable. • Legal options include insolvency proceedings or out-ofcourt solutions. Focus As a bank company the principal objective of Agrani Bank Limited is to ensure good corporate governance through upholding the values of transparency and accountability of all concerned in respect of its overall financial , operational and administrative policymaking and executive affairs including overall business activities, internal control, human resources management and development & expenditure etc. along with lending and risk management issues. Board Structure The Board of Directors consists of 9 (nine) members, including the Chairman as the head of the board of directors and the Managing Director & CEO as an ex-officio director. All the directors of ABL are non-executive directors except the Managing Director. Consequent upon the 123
  123. Integrated Report on Corporate Governance corporatization , the Board exercises greater autonomy in running the bank more effectively than before. Committees of the Board As per BRPD circular no-11 dated 27 October 2013, The Board has formed three sub-committees - Executive Committee, Audit Committee, and Risk Management Committee. Board Members’ Independence All members of the Board are nominated by the Government and each of them holds one share which is less than one percent of paid-up shares of the Bank. The members of the board give decision on various business issues in the board meetings independently, since they do not have any sort of business relationship or involvement with the management of the bank. Directors’ Information As far as circulation of directors’ information is concerned, ABL, from time to time, disseminates updated directors’ particulars to other banks and financial institutions. Remuneration of Chairman & Director administrative or operational and routine affairs of the Bank. Complying with Banking Regulation & Policy Department of Bangladesh Bank, the Chairman conducts on-site inspection of any branch or financing activities under the purview of the oversight responsibilities of the board. He also calls for any information relating to bank’s operation or ask for investigation into such affairs and submits such information or investigation report to the meeting of the board and effects necessary action in accordance with set rules through the CEO of the bank. Responsibilities and authorities of the Board of Directors To ensure good governance in the bank, the Bank Company Act 1991(Amended up to 2013) has assigned the board of directors with required responsibilities and authorities for establishing policies for the Bank Company, for risk management, internal control, internal audit & compliance and for ensuring their implementation. Board Meetings Responsibilities of the chairman of the board of directors: Complying with the prudential guidelines for banks set by Bangladesh Bank, the board of directors with required quorum comprising not less than three members as stipulated in the memorandum and articles of association of Agrani Bank Limited meets at least once or more than once in a month.CEO of the Bank. The Chairman of the board of directors does not personally possess the jurisdiction to apply policymaking or executive authority. He also does not participate or interfere in the 54 board meetings were held in 2018. The number of meetings attended by each director has been shown in the table given below: As per DFIM Circular no.13 dated 2015, the directors each receive honorarium of tk 8000 (including tax) for attending a Board Meeting or any other committee meeting. Position in the bank Date of appointment Number of meetings attended Chairman 29.11.2017 54 Ms. Mahmuda Begum Director 07.09.2017 41 Mrs. Sangita Ahmed Director 07.03.2016 36 Mr. Shameem Ahsan Director 13.04.2016 35 Mrs. Hasina Newaaz Professor Dr.Nitai Chandra Nag Director Director 13.04.2016 13.04.2016 34 54 Mr. M. Ashiqul Hoque Chawdhury Director 13.04.2016 48 Mr. Kashem Humayun Director 06.09.2016 52 Mr. Md. Ansar Ali Khan Director 22.12.2016 51 Managing Director & CEO 16.08.2016 54 Name of Directors Dr. Zaid Bakht Mr. Mohammad Shams-Ul Islam 124 Annual Report 2018
  124. Integrated Report on Corporate Governance Annual Performance Agreement (APA) To develop organizational capacity & skills, strengthen transparency & accountability, ensure good governance and proper utilization of asset in order to implement vision 2021, honorable Chairman of the board of directors, MD & CEO on behalf of Agrani bank Limited and honorable secretary, financial institutions division, Ministry of Finance on 18.06.2017 signed Annual Performance Agreement(APA). APA includes Vision, Mission, Strategic Objectives and Functions Vision: The vision of ABL is to become one of the leading banks among the state-owned banks through maintaining international standard skills, quality, fair management, ensuring high quality customer service and mobilizing adequate liquidity. Misson: To implement vision 2021, seventh five year plan & SDGs and actualize priority sectors of the government through the highest level of skills & capacity achieved by combining ethics & transparency in light of the guidelines set by the regulatory bodies with professional skills & experience and benefit the customers and employees through development implementation of pragmatic business policies. Strategic Objectives: Strategic Objectives includes the following: • To increase income of the bank by expansion of loans & advances, investment & creating new entrepreneurs; • To keep the Non Performing Loans at satisfactory level; • To improve the financial position of the bank; • To minimize risk & strengthen financial foundation; • To strengthen financial & organizational discipline; and • To improve working skills & customer service through use of ICT and strengthen overall security. • To explore new avenues of export-import business & make the remittance service easily available to the public; • To do banking with accountability & professional skills for implementing vision 2021, seventh five year plan & SDGs and actualize priority sectors of the government; and • To build a trained & skilled human resources in order to form a strong financial foundation through improvement of financial discipline. Work-planning and Strategic Management The Board determines the objectives and goals and to this end formulates the strategies and work-plans on annual basis. It engages itself in the affairs of making strategies consistent with the determined objectives and goals and in the light of the issues relating to structural change and reorganization for enhancement of institutional efficiency and other relevant policy matters. Evaluation of MD & CEO With the objective of fostering proper corporate environment, increased efficiency, establishment of accountability and dynamism, the board of directors from time to time evaluates the performance of MD & CEO through observing and analyzing achievement of key performance targets as stated and set in the Annual Performance Agreement (APA) signed between Bank and Financial Institution Division, Ministry of Finance, and Agrani Bank Limited. Lending and Risk Management • To put emphasis on interest free & low cost deposit collection; The board approves under the purview of existing laws, rules and regulations, the policies, strategies, procedures etc. in respect of appraisal of loan/investment proposal, sanction, disbursement, recovery, rescheduling and writeoff. The board specifically distributes the power of sanction of loan/investment. No director, however, interferes, directly or indirectly, in the process of loan approval. The board frames policies for risk management and ensures complience monitors the degree of compliance thereof. • To disburse quality credit; Risk Management Committee • To bring the unbanked under banking service; • To digitize the banking system; • To check new loan classification & minimize classified loans; • To recover classified & written-off loans; to formulate appropriate strategies for risk assessment and control of the bank, a risk management committee comprising directors from among the members of the Board of Directors has been constituted complying with BRPD circular no-11 dated 27 October 2013. Functions: Strategic Functions includes the following 125
  125. Integrated Report on Corporate Governance Risk Management Committee Meeting The committee held 7 meetings in 2018 . The number of meetings attended by the committee members has been shown in the table given below: Designation Number of Meetings attended Mr. Kashem Humayun Chairman 7 Mr. M. Ashiqul Hoque Chawdhury Member 7 Mrs. Hasina Newaaz Member 5 Mr. Md. Ansar Ali Khan Member 5 Name Role of the Risk Management Committee The risk management committee approves policies & guidelines regarding risk of the bank. The committee also reviews and amends the policies, whenever necessary and sends it to the board of directors for approval. The committee monitors activities for compliance of instructions regarding lending risk, foreign exchange transaction risk, money laundering risk, data storage & communication risk including other risk related guidelines. Internal Control Management The board is always vigilant on the internal control system of the bank to ensure and maintain satisfactory qualitative standard of its loan/investment portfolio. The board reviews the reports submitted by its audit committee regarding compliance of recommendations made in internal and external audit reports and the Bangladesh Bank inspection reports. Audit Committee to strengthen internal control and compliance functions of the bank, the audit committee comprising directors from among the members of the Board of Directors has been formed complying with BRPD circular no-11 dated 27 October 2013. Audit Committee Meeting The committee held 15 meetings in 2018. The number of meetings attended by the committee members has been shown in the table given below: 126 Annual Report 2018 Designation Number of Meetings attended Mr. M. Ashiqul Hoque Chawdhury Chairman 15 Ms. Mahmuda Begum Member 15 Mrs. Sangita Ahmed Member 8 Member 15 Member 15 Name Professor Dr.Nitai Chandra Nag Mr. Md. Ansar Ali Khan Role of Audit Committee The committee approves Internal Control & Compliance (ICC) Policies of the bank and ensures that the activities of the Bank are being carried out in accordance with the applicable rules and regulations of Bangladesh Bank, Bank Companies Act 1991(amended up to 2013), Companies Act 1994 and internal rules, regulations & policies of the Bank. The committee examines whether internal control strategies, findings and recommendations made by the internal, regulatory and external auditors-Bangladesh Bank, Commercial Audit are implemented by the management or not. It also reviews the activities of the internal audit and ensures that no unjustified restriction or limitation hinders the internal audit process. The committee considers report relating to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authority and place it before the board after reviewing whether necessary corrective measures have been taken by the management. The committee reviews and discusses with the management and external auditors to ensure that the financial statements are prepared according to existing accounting rules, regulations and standard. Review of ICC Policy The board of directors time to time reviews and updates Internal Control & Compliance (ICC) policies in the context of banking business circumstances. Statutory Audit The profit & loss account and financial report of Agrani Bank Limited is audited by audit firms qualified under
  126. Integrated Report on Corporate Governance existing law for the time being in force to be an auditor of companies and approved by Bangladesh Bank . The board of directors appointed ACNABIN,Chartered Accountants and MABS & J Partners, Chartered Accountants firm to carry statutory audit on the bank for the year 2018. Human Resources Management and Development The board frames and approves service rules relating to recruitment, promotion, transfer, disciplinary and punitive measures, human resources development etc. The Chairman or directors in no way interfere into any administrative affairs including recruitment, promotion, transfer and disciplinary measures as executed under the set service rules. Recruitment and promotion to the immediate two tiers below CEO rests upon the board. Executive Committee To provide directions for maintaining daily or routine activities and organizational discipline of the bank, an executive committee comprising directors from among the members of the board of directors shown in the table below has been formed as per BRPD Circular no-11 dated 27 October 2013. Roles and Responsibilities of the Executive Committee The executive committee decides in those cases as instructed by the Board of directors that are not specifically assigned to full board through the Bank Company Act 1991 and other laws and regulations. The members of the committee take all necessary decisions within power delegated by the board of directors on punishment to the guilty employee depending on the nature of irregularities committed, reviews divisional legal cases regarding appeal by the affected staff, officer for reinstatement to service, appeal for remission of punishment and security related matters concerning theft, burglary taken place in different branches at different times. meetings attended by the committee members has been shown in the table given below: Name Designation Number of Meetings attended Dr. Zaid Bakht Chairman 6 Mr. Shameem Ahsan Member 2 Mrs. Hasina Newaaz Member 6 Mr. Kashem Humayun Member 6 Financial Management The board approves the annual budget and the statutory financial statements. It also reviews/monitors the positions in respect of bank’s income, expenditure, liquidity, nonperforming asset, capital base and adequacy, maintenance of loan loss provision and gives directives to take steps for recovery of defaulted loans including legal measures. The board also frames the policies and procedures for bank’s purchase and procurement activities and approves the distribution of power for making such expenditures. The maximum possible delegation of such power rests on the CEO and his subordinates. The decision on matters relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of bank’s business is adopted with the approval of the board. Responsibilities and authorities of the MD & CEO The CEO discharges his own responsibilities in terms of the financial, business and administrative authorities vested upon him by the board. He is accountable for achievement of financial and other business targets by means of business plan, efficient implementation thereof and prudent administrative and financial management. Executive Committee Meeting He ensures compliance of the Bank Companies Act, 1991(amended up to 2013) and other relevant laws and regulations in discharge of routine functions of the bank. He also reports to Bangladesh Bank of issues relating to violation of Bank Companies Act 1991 (amended up to 2013) or of other laws/regulations and if required, apprises the board post facto. The committee held 6 meetings in 2018. The number of The recruitment and promotion of all staff of the bank All decisions taken in the executive committee are ratified in the next board meeting. 127
  127. Integrated Report on Corporate Governance except those in the two tiers below him rests on the CEO . He acts in such cases in accordance with the approved service rules on the basis of the human resources policy and sanctioned strength of employees as approved by the board. Management Committee (MANCOM) The management committee (MANCOM) is mainly responsible for management of risks related to administration, operation, purchase, development, training, discipline and appeal etc. The committee places before the board for approval its policy recommendations and guidelines regarding risks assessment, management, control and reporting. It also puts forward its recommendations on quantification process of risk calibration, its use while capital allocation and relevance to annual budgeting & planning for board approval. It observes the precision and timeliness of risk reports on all activities of the bank. It is also responsible for introducing such a risk controlling culture that encourages the highest level of ethical behaviors among the employees. As far as risk related employees are concerned, the committee is also responsible for building a risk savvy smart workforce. Organizational Structure of MANCOM: The structure of MANCOM is as follows: Deputy Managing Director-1 (Chairperson) Deputy Managing Director-2 Deputy Managing Director-3 Deputy Managing Director-4 All General Managers Deputy General Manager (HRPDOD) Member Secretary Fig : Organizational Structure of MANCOM Credit Committee (CRECOM) The committee is mainly responsible for implementation of risk management policies approved by the board. The credit committee deals with introducing credit strategy after board approval proportionate to nature of debtor and business, interest rate, loan documentation, risk grading, standardization of credit analysis, proper valuation, scoring, reporting, auditing, classification, provisioning. The committee under the authority devolved on them by the board gives decision on new loan facility, rescheduling & reconsideration and approves rejects, recommends or ratifies loan proposals. Organizational Structure of CRECOM: The structure of CRECOM is as follows: Deputy Managing Director-1 (Chairperson) Deputy Managing Director-2 Deputy Managing Director-3 Deputy Managing Director-4 All General Managers Deputy General Manager (CPCRMD) Member Secretary Fig : Organizational Structure of CRECOM Asset Liability Committee (ALCOM) Asset Liability Committee ensures adequate liquidity capital reserves and proper fund management to meet business needs and comply with statutory laws and regulations. ALCOM performs balance sheet management in such a way that adequacy of liquidity and capital is maintained, ensuring proper application of fund diversification strategy in light of source, term, instrument and currency. The Asset Liability Committee is also responsible for introducing and implementation of policies on capital, funding, asset allocation and liquidity. 128 Annual Report 2018
  128. Integrated Report on Corporate Governance Organizational Structure of ALCOM : The structure of ALCOM is as follows: Managing Director & CEO (Chairperson) Head of BS & UCD Head of Treasury (Member Secretary) Head of Credit Head of CAD/CFO Head of ALM desk Head of ID Head of RMD Fig: Organizational Structure of ALCOM Compliance with Code of Conduct As part of upholding ethical business standard & practices, every employee of ABL has to comply with the code of conduct pertaining to the ABL service rule violation of which results in reduction to a lower stage in a time scale of pay, reduction to a lower post, compulsory retirement, and removal from service, dismissal from service. All employees shall conform to and abide by these regulations ,observe, obey all orders and directions which may, from time to time, given by any person or persons under whose jurisdiction, superintendence or control he may, from time to time, be placed. All employees should serve the bank honestly and diligently, use his/her utmost endeavour to promote the interest of the bank, maintain strict secrecy regarding the affairs of the bank. Compliance with Employee Income Tax Payment As far as employee income tax is concerned, the employees of Agarni Bank Limited pay regular income tax on salary complying with the ordinance of NBR (National Board Revenue). By doing so the employees of ABL have been contributing to the government’s tax collection from internal sources. Other Information Delegation of Power In order to extend business and settle internal affairs quickly and effectively in the perspective of ever changing banking environment, the hank has its delegation of power on administrative and financial related matters approved by the board of directors. The delegated power has been decentralized ensuring accountability so that the person concerned applies this power judiciously and prudently only for the welfare of the organization. Misuse of the delegated power amounts to violation of serious corporate norms. The delegation of power on administrative affairs concerns deployment of discretionary power within the perimeter of Agrani Bank Employees Service Rule 1995. The delegation of power on financial affairs concerns deployment of discretionary power within the approved sector-wise annual budget subjective to concerned regulatory bodies such as Ministry of Finance, Bangladesh Bank.Delegation of power in ABL is exercised complying with the rules and regulations set in the Delegation of Power-2017. Customer Sovereignty Since customers are the driving force of the bank, ABL always tries to the maximum level to ensure customer sovereignty by providing the customers with the excellent services following the corporate norms & regulations. To ensure customer supremacy, customers can lodge in writing their complaints over any sorts of dissatisfaction or send their opinions on any other matters to Managing Director & CEO. The Managing Director & CEO instructs the division concerned to take urgent necessary action on that score. 129
  129. Integrated Report on Corporate Governance Depositors ’ trust is protected by ensuring on-demand liquidity and giving the depositors fair contract terms & keen interest rate on various consumer products. As far as loans & investment is concerned, ABL makes investment in such sectors as are productive for the national economy while preserving the debtors’ interest in a way that they get fair lending rate and they do not get defaulters by monitoring the post loan supervision and maintaining timely and regular liaison with the debtors. Credit Rating As per BRPD Circular No. 6 dated 5 July 2006 requiring to safeguard the interest of the prospective investors, depositors and creditors and also the bank management as a whole overall performances in the relevant area including core risks, the bank has appointed Alpha Credit Rating Limited for doing credit rating of the bank . The credit rating agency in 2018 awarded ABL AAA for long term & ST-1 for short term in government support category and A for long term & ST-2 for short term in without government support category and the outlook for the bank was given stable. Publication of Annual Financial Report Agrani Bank Limited, complying with Bank Company Act 1991, prepares and publishes each year a balance sheet and profit & loss account as well as financial report duly signed by the concerned parties as on the last working day of the year. Compliance with BSEC and RJSC As far as increase of paid up capital is concerned, ABL receives Bangladesh Securities & Exchange Commission’s consent to that effect, complying with all the procedures. In terms of Director related information such as appointment, retirement, holding of shares and changes, whenever necessary, in the Memorandum and Articles of Association of the bank, Agrani Bank Limited has these duly certified by the Registrar of Joint Stock Companies and Firms (RJSC). Corporate Social Obligation and Responsibility Agrani Bank Limited spends a significant amount of money in the form of CSR activities as apart of our moral obligation to the society to provide the disadvantaged and the deprived with a platform to make his/her presence felt in the society, keeping in mind the mantra that each one counts irrespective of religion, caste and position. In 2017 ABL has spent tk7.60 lac from CSR fund as donation in the form of social development activities. Environmental Obligation From the prick of conscience for green planet, Agrani Bank Limited is trying to be at par with the government’s vision of Green Bangladesh. to aware all the employees of in-house green banking, a green office guideline has been circulated to all the branches and head office divisions. As far as green financing is concerned, Agrani Bank is providing loans on easy conditions to solar panel installation, bio-gas plants, compost plants and other enterprises producing ecofriendly agro-products. Besides, in terms of credit approval, ABL has made it mandatory for factories to have Effluent Treatment Plant (ETP). Directors’ Report to the Shareholders A moment of 491th meeting of the Board of Directors in presents of Bangladesh Bank inspection team. 130 Annual Report 2018 Complying with the section 1.5 of Bangladesh Securities and Exchange Commission Notification No. SEC/ CMRRCD/2006-158/Admin/44 dated 7 August 2012 and section 184 of the Companies Act 1994, Agrani Bank Limited discloses Directors’ Report to Shareholders each year.
  130. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance BRPD Circular no 11 dated 27 October 2013 1. 2. 3. Formation & Responsibilities of Board of Directors of a Bank Company. Board of Directors of a bank should be comprised with competent and professionally persons with a view to formulating policy-guidelines and supervising business activities of the bank efficiently as well as ensuring good governance in the bank management. The responsibilities of the board of directors of a bank-company are more important than those of other companies; because in case of a bank-company it is essential to earn and maintain confidence of the depositors as its business is mainly run with the depositors’ money. The following directives are given for ensuring good governance regarding constitution of board of directors, their duties & responsibilities and other related activities 1. Formation of Board of Directors: The newly amended Section 15 of the Bank Company Act, 1991 (Amended upto 2013) includes provisions for prior approval of Bangladesh Bank before the appointment of new bank directors, as well as dismissal, termination or removal of any director from the post; director’s fit & proper criteria; maximum number of directors; appointment of independent directors; appointment of maximum 2(two) members from a family as director; etc. Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status √ √ Appointment of New directors: Under section 15(4) of the Bank Company Act, 1991 (amended upto 2013), every banking company, other than specialized banks, at the time of taking prior approval from Bangladesh Bank for appointing/reappointing directors should furnish the following documents along with the application: a) Personal information of the nominated person (Appendix-ka) √ b) Nominated person’s declaration(Appendix-kha) √ c) ‘Declaration for confidentiality’ by the nominated person(Appendix-ga) √ d) In case of Independent director, the approval letter from Security and Exchange commission So far, no independent director has been appointed e) In case of Independent director, a declaration of the directors concern as Appendix-gha (he will also submit declaration under Appendix-ka, kha & ga) Do f) CIB report of the nominated person √ g) Updated list of the directors. √ 131
  131. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance 4. 1.2. Vacation of office of Director: a) The office of director shall be vacated according to the instructions specified in section 108(1) of the Companies Act, 1994. Besides, when a bank director becomes defaulter and does not repay the loan within two months after getting a notice under the section 17 of the Bank Company Act, 1991; provides false statement at the time of appointment; or fails to fulfil the minimum eligibility criteria, the office of the director will be vacated √ b) If the office of a director is vacated by a notice under the section 17 of BCA, the person will not be eligible to become a director of the bank or any other bank or any financial institution for one year from the date of repayment of the total amount due to the bank. It is mentionable here that the dues can be adjusted with the shares held by the director in that bank. When a director receives a notice under section 17 of BCA, 1991, he/she can’t transfer his/her shares of that bank until he/she repays all the liabilities of the noticed bank or financial institution. √ c) Besides, Bangladesh Bank can remove a director or chairman of a bank, except state owned banks, for conducting any kind of activities that is detrimental to the interest of the banks depositors or against the public interest under Section 46 and can supersede the board of a banking company under Section 47 of BCA, 1991. 5. 6. 132 Remarks (if any) N/A 1.3. Removal of Directors from office: According to section 108(2) of the Companies Act, 1994, with the prior approval of Bangladesh Bank, a bank director other than specialized banks can be removed from his office for the reason specified in its Articles of Association. For this purpose, the reason and grounds of the dismissal/ removal and copy of the decision of the board and list of directors should be submitted to Bangladesh Bank. In this case, the removal will be effective from the date of Bangladesh Bank’s approval √ 1.4. Appointment of Alternate Director: Subject to compliance of section 101 of the Companies Act, 1994, an alternate director can be appointed to act for a director during his absence for a continuous period of not less than three months from Bangladesh. In this context, the following instructions should be followed: √ b) Bank has to collect and properly maintain the documentary evidences relating to departure and arrival of the original director. If there is any exception, the chief executive officer should immediately inform it to Bangladesh Bank. √ Annual Report 2018 Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status
  132. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance 7. 8. 9. b) The copy of the decision of the board regarding appointment of alternate director, with original director’s probable returning date from abroad should be sent to Bangladesh Bank within 7 days of taking the decision and the director’s arrival date must be intimated to Bangladesh Bank immediately after his return. √ c) Any loan defaulter or any person who is not eligible to become a director as per any rules & regulation will not be appointed as an alternate director. √ d) As appointment of alternate director is a temporary measure; therefore, he/she will not be included in any kind of committee constituted by the board. √ e) While in the office, an alternate director or his/her affiliated organization will not get any kind of loan facilities from his bank. In case of previous loan, enhancement of limit or extension of time period or any kind of exemption or interest waiver will not be allowed. Moreover, all restrictions applicable to directors according to rules & regulations will also be applicable to the alternate director √ 2. Depositor Director: As the previous provisions regarding appointment of Depositor Directors of the Bank Company Act, 1991 has been amended; appointment of director from depositors is no longer required. But, after complying regulation under sec 15(9) of the Bank Company Act, 1991 (amended upto 2013) bank can consider the tenure of existing depositor director or may appoint them as independent director. Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status N/A 3. Information regarding Directors: Banks are advised to take the following steps regarding director information: a) Every bank should keep an updated list of bank directors, √ b) Banks should send a directors’ list to other banks or financial institutions immediately after the appointment or release of director. √ c) Banks should display a list of directors in the website and update it on a regular basis. √ Responsibilities and Authorities of the Board of Directors a) Work-planning and strategic management: i. The board shall determine the objectives and goals and to this end shall chalk out strategies and work-plans on annual basis. It shall specially engage itself in the affairs of making strategies consistent with the determined objectives and goals and in the issues relating to structural change and reformation for enhancement of institutional efficiency and other relevant policy matters. It shall quarterly analyze/monitor the development of implementation of the work-plans. √ 133
  133. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance ii. The board shall have its analytical review incorporated in the Annual Report asregards to the success/failure in achieving the business and other targets as set out inits annual work-plan and shall apprise the shareholders of its opinions/recommendations on future plans and strategies. It shall set the Key Performance Indicators (KPIs) for the CEO & officers immediate two tiers below the CEO, and have it evaluated from time to time. √ 10. b) Credit and risk management i. The policies, strategies, procedures etc. in respect of appraisal of loan/ investment proposal, sanction, disbursement, recovery, reschedule and write-off thereof shall be made with the board’s approval under the purview of the existing laws, rules and regulations. The board shall specifically distribute the power of sanction of loan/investment and such distribution should desirably be made among the CEO and his subordinate executives as much as possible. No director, however, shall interfere, direct or indirect, into the process of loan approval. √ ii. The board shall frame policies for risk management and get them complied with and shall monitor the compliance at quarterly basis and review the concerned report of the risk management team and shall compile in the minutes of the board meeting. The board shall monitor the compliance of the guidelines of Bangladesh Bank regarding key risk management. √ 11. c) Internal control management The board shall be vigilant on the internal control system of the bank in order to attain and maintain satisfactory qualitative standard of its loan/investment portfolio. The board will establish such an internal control system so that the internal audit process can be conducted independently from the management. It shall review the reports submitted by its audit committee at quarterly basis regarding compliance of recommendations made in internal and external audit reports and the Bangladesh Bank inspection reports. √ 12. d) Human resources management and development i. Policies relating to recruitment, promotion, transfer, disciplinary and punitive measures, human resources development etc. and service rules shall be framed and approved by the board. The chairman or the directors shall in no way involve themselves or interfere into or influence over any administrative affairs including recruitment, promotion, transfer and disciplinary measures as executed under the set service rules. No member of the board of directors shall be included in the selection committees for recruitment and promotion to different levels. Recruitment, promotion, transfer & punishment of the officers immediate two tiers below the CEO shall, however, rest upon the board. Such recruitment and promotion shall have to be carried out complying with the service rules i.e., policies for recruitment and promotion. 134 Annual Report 2018 √ Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status
  134. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance ii. The board shall focus its special attention to the development of skills of bank’s staff in different fields of its business activities including prudent appraisal of loan/investment proposals, and to the adoption of modern electronic and information technologies and the introduction of effective Management Information System (MIS). The board shall get these programmes incorporated in its annual work plan. √ iii. The board will compose Code of Ethics for every tier and they will follow it properly. The board will promote healthy code of conducts for developing a compliance culture. √ 13. e) Financial management i. The annual budget and the statutory financial statements shall be finalized with the approval of the board. It shall at quarterly rests review/ monitor the positions in respect of bank’s income, expenditure, liquidity, non-performing asset, capital base and adequacy, maintenance of loan loss provision and steps taken for recovery of defaulted loans including legal measures. ii. The board shall frame the policies and procedures for bank’s purchase and procurement activities and shall accordingly approve the distribution of power for making such expenditures. The maximum possible delegation of such power of expenditures shall rest on the CEO and his subordinates. The decision on matters relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of bank’s business shall, however, be adopted with the approval of the board. iii. The board will review whether an Asset-Liability Committee (ALCO) has been formed and it is working according to Bangladesh Bank guidelines. Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status √ √ √ 14. g) Other responsibilities of the Board The board should follow and comply with the responsibilities assigned by Bangladesh Bank. √ 15. 4.2. Meeting of Board: Board of directors may meet once or more than once in a month if necessary. But Board of directors shall meet at least once in every three months. Excessive meetings are discouraged. √ 16. 4.3. Responsibilities of the Chairman of the Board of Directors: a) As the chairman of the board of directors or chairman of any committee formed by the board or any director does not personally possess the jurisdiction to apply policy making or executive authority, he/she shall not participate in or interfere into the administrative or operational and routine affairs of the bank. √ 135
  135. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance b) The chairman may conduct on-site inspection of any bank-branch or financing activities under the purview of the oversight responsibilities of the board. He may call for any information relating to bank's operation or ask for investigation into any such affairs; he may submit such information or investigation report to the meeting of the board or the executive committee and if deemed necessary, with the approval of the board, he shall effect necessary action thereon in accordance with the set rules through the CEO. However, any complaint against the CEO shall have to be apprised to Bangladesh Bank through the board along with the statement of the CEO. 5. Formation of committees from the Board of Directors 17. Each bank company can form 1(one) executive committee, 1(one) audit committee and 1(one) risk management committee with the directors. Board can’t form any other permanent, temporary or sub- committee except the above mentioned three committees. 18. 5.1. Executive committee Roles and Responsibilities of the Executive Committee: i. The executive committee can decide or can act in those cases as instructed by the Board of directors that are not specifically assigned on full board through the Bank Company Act, 1991 and other laws and regulations. ii. The executive committee can take all necessary decision or can approve cases within power delegated by the board of directors. iii. All decisions taken in the executive committee should be ratified in the next board meeting. 5.2. Audit Committee Roles and Responsibilities of the Audit Committee: (i) Internal Control 1. Evaluates whether management is setting the appropriate compliance culture by communicating the importance of internal control and the management of risk and ensuring that all employees have clear understanding of their roles and responsibilities 136 √ √ √ √ √ √ 2. Reviews management’s actions in building computerization of the bank and its applications and bank's Management Information System (MIS) √ 3. Considers whether internal control strategies recommended by internal and external auditors have been implemented by the management √ 4. Considers reports relating to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authority and place it before the board after reviewing whether necessary corrective measures have been taken by the management √ Annual Report 2018 Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status
  136. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance (ii) Financial Reporting 1. Audit committee will check whether the financial statements reflect the complete and concrete information and determine whether the statements are prepared according to existing rules & regulations and standards enforced in the country and as per relevant prescribed accounting standards set by Bangladesh Bank √ 2. Discuss with management and the external auditors to review the financial statements before its finalization √ iii) Internal Audit 1. Audit committee will monitor whether internal audit working independently from the management. √ 2. Review the activities of the internal audit and the organizational structure and ensure that no unjustified restriction or limitation hinders the internal audit process; √ 3. Examine the efficiency and effectiveness of internal audit function √ 4. Examine whether the findings and recommendations made by the internal auditors are duly considered by the management or not. √ (iv) External Audit 1. Review the performance of the external auditors and their audit reports √ 2. Examine whether the findings and recommendations made by the external auditors are duly considered by the management or not. √ 3. Make recommendations to the board regarding the appointment of the external auditors. √ (v) Compliance with existing laws and Regulations Review whether the laws and regulations framed by the regulatory authorities (central bank and other bodies) and internal regulations approved by the board are being complied with. √ (vi) Other Responsibilities 1. Submit compliance report to the board on quarterly basis on regularization of the omission, fraud and forgeries and other irregularities detected by the internal and external auditors and inspectors of regulatory authorities √ 2. External and internal auditors will submit their related assessment report, if the committee solicit √ 3. Perform other oversight functions as desired by the Board of Directors and evaluate the committee's own performance on a regular basis. √ Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status 137
  137. Integrated Report on Corporate Governance Status of Compliance Requirement of Bangladesh Bank ’s Guidelines for Corporate Governance 5.3. Risk Management Committee Roles and Responsibilities of the Risk Management Committee: i) Risk identification & control policy Formulation and implementation of appropriate strategies for risk assessment and its control is the responsibility of Risk Management Committee. Risk Management Committee will monitor risk management policies & methods and amend it if necessary. The committee will review the risk management process to ensure effective prevention and control measures. √ vi) Other responsibilities 1. Committee’s decision and suggestions should be submitted to the Board of Directors quarterly in short form √ 2. Comply instructions issued time to time by the controlling body √ 3. Internal & external auditor will submit respective evaluation report whenever required by the committee. √ 19 Training for the Directors The directors shall make themselves fully aware of the banking laws and other related rules and regulations for performing his duties properly. √ 138 Annual Report 2018 Remarks (if any) Explanation for Non Compliance Particulars Not Complied Sl No. Complied Compliance Status
  138. Integrated Report on Internal control and compliance Statement of Board Audit Committee comply with the following : i. Members of the Audit Committee will be selected among the Directors of the Board; ii. Audit Committee of the Board will be comprised of maximum 05 (five) members. iii. Audit Committee will be constituted with those members of the Board, who are not included in the Executive Committee; iv. Members will be elected for a term of 03 (three) years; v. Company Secretary of the Bank will be secretary of the Audit Committee. Composition of Audit Committee in Agrani Bank Limited The Audit Committee (AC) consists of five members from the Board of Directors. The members of the Audit Committee are: Md. Ashiqul Hoque Chawdhury Chairman, Audit Committee of the Board The Audit Committee of the Board efficiently conducts the supervising activities of the audit in establishing the best practicing internal control & compliance system within the bank. The Committee supervises whether banking activities are carried out in line with the extant laws, rules and regulations imposed by the regulatory authorities. The Board approves the objectives, strategies and overall business plans of the Bank and the Audit Committee assists the Board in redeeming its oversight responsibilities. The Committee reviews the financial reporting process, the system of internal control and management of financial risks, the audit process, and the bank’s process for monitoring compliance with laws, regulations and Agrani Bank’s own code of conduct with the internationally accepted best practice Organizational Structure of Audit Committee: As per regulatory guidelines stipulated vide Bangladesh Bank BRPD Circular No.11 dated October 27, 2013, the composition of the Audit Committee of a Bank shall Sl. Name Status 1 Md.Ashiqul Hoque Chawdhury Chairman 2 Mahmuda Begum Member 3 Sangita Ahmed Member 4 Dr. Nitai Chandra Nag, Member 5 Md. Ansar Ali Khan Member Qualification of the Members of the Audit Committee i) Integrity, compliment, and opportunity to spare time in the functions of committee will have to be considered while nominating a director to the committee; ii) Each member of the committee should be capable of making valuable and effective contribution in the functioning of the committee; iii) To perform his or her role effectively each committee member should have adequate grasp of the detailed responsibilities of the committee membership as well as the Bank’s business, operations and its risks; iv) Professionally Experienced persons in banking/ financial institutions specially having educational qualification in Finance, Banking, Management, Economics, Accounting will be got preference in forming the committee. 139
  139. Integrated Report on Internal control and compliance Statement of Board Audit Committee ROLES AND RESPONSIBILITIES OF THE AUDIT COMMITTEE (a) Internal Control i. To evaluate management’s appropriate compliance culture by communicating the importance of internal control and the management of risk and ensuring that all employees have clear understanding of their roles and responsibilities; ii. To review management’s actions in building computerization of the bank and its applications and Bank’s Management Information System (MIS); iii. To consider whether internal control strategies recommended by internal and external auditors have been implemented by the management; iv. To consider reports relating to fraud, forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authority and places it before the Board after reviewing whether necessary corrective measures have been taken by the management. (b) Financial Reporting v. Audit committee will check whether the financial statements reflect the complete and concrete information and determine whether the statements are prepared according to the existing rules & regulations and standards enforced in the country and as per relevant prescribed accounting standards set by Bangladesh Bank; and vi. Audit committee will discuss with management and the external auditors to review the financial statements before its finalization. (c) Internal Audit i. Audit committee will monitor whether internal audit is working independently from the management. ii. Audit committee will review the activities of the internal audit and the organizational structure and ensure that no unjustified restriction or limitation hinders the internal audit process; iii. It will examine the efficiency and effectiveness of internal audit function; 140 Annual Report 2018 iv. It will also examine whether the findings and recommendations made by the internal auditors are duly considered by the management or not. (d) External Audit i. To review the performance of the external auditors and their audit reports; ii. To examine whether the findings and recommendations made by the external auditors are duly considered by the management or not; iii. To make recommendations to the board regarding the appointment of the external auditors. (e) Compliance with existing laws and Regulations To review whether the laws and regulations framed by the regulatory authorities (Central Bank and other bodies) and internal regulations approved by the Board are being complied with. (f) Other Responsibilities i. Submits compliance report to the board on quarterly basis on regularization of the omission, fraud and forgeries and other irregularities detected by the internal and external auditors and inspectors of regulatory authorities; ii. External and internal auditors will submit their related assessment report, if the committee solicit; iii. Performs other oversight functions as desired by the Board of Directors and evaluates the committee’s own performance on a regular basis. Meeting of the Committee i. To establish an effective internal control system within the bank, 15 (Fifteen) meetings of the Committee were held in the year 2018. The Audit Committee invites the Managing Director & CEO from time to time for special issue and Head of ICC, other responsible officials entrusted with internal control activities or any other personnel to participate in their meeting, as deemed necessary. ii. All recommendations/ observations of the Audit Committee were recorded in minutes’ form. Thus it has been playing a vital role in strengthening internal control and compliance functions in the Bank by ensuring all sorts of co-operation between the management and the Board of Directors.
  140. Integrated Report statement of Board Audit Committee Statement of Board Audit Committee Audit Committee ’s activities during the year During the year 2018, the Committee carried out the following activities: i. The committee reviewed status reports of internal audit to ensure that appropriate actions had been taken to implement the audit recommendations. ii. It analyzed the submission of statements and duly approved January-June, 2018 and July-December, 2018 statement of “Self-Assessment of Anti-Fraud Control” as instructed Bangladesh Bank. iii. As per BRPD Circular No-03 and BRPD Circular No-06 dated on-08/03/2016 and 04/09/2016 respectively of Bangladesh Bank, the Committee reviews ICC Policy and Procedure of the Bank in the year 2018. iv. As per BRPD Circular No-03 dated on-08/03/2016 of Bangladesh Bank, the Committee approved updated Health Report of the Bank for the year 2017. v. Result of Health Reports are as follows: Items 2017 2016 Assigned Score 300 300 Score Obtained 241 218 Very Good Good Result vi. As per the instruction given by the Bangladesh Bank through MoU, the Committee reviewed the ICC Policy Implementation status reports to ensure that appropriate actions had been taken to implement “ICC Policy & Procedure”. vii. The Committee recommended organizing risk based audit training and workshops to categorize the branches on risk basis. viii. The Committee monitored the progress of implementation status of last year plan as to its consistency and approved the audit plan for 2018. ix. In 2019, Division wise plan is prepared and approved due to emphasis, monitored and reviewed the effectiveness of the internal control system on each division separately. x. The committee had finalized the Financial Statements of the Bank as on 31-12-2017. AC monitors the integrity of the financial reporting process through ensuring compliance to accounting policies, standards and principles, oversee performance of external auditors. xi. The Committee directs the authority concerned to minimize audit objections through categorization of objections and monitored internal control and business risk management process. xii. The committee also advises quick settlement of pending audit objections internal and external both. xiii. The committee recommended the management to be cautious so that no loan and advance becomes classified any more. xiv. The committee recommended diversifying loans according to sector-wise importance especially emphasis on SME loan. xv. The committee also recommended to the management that effective steps should be taken to recover all classified loans. xvi. The committee reviewed compliances of audit objections detection on Bangladesh Bank inspection report. xvii. As per the instruction of BoD data base relating to commercial audit compliance has been prepared and all branches were instructed to compliance and resolve the Audit objections. xviii.Reviewed Agrani Bank’s Business Risk Management Framework, including the top risks for the Banking business as well as deep dive of key risks to assess and evaluate the relevance and robustness of mitigating plans. xix. For effective and efficient internal control system the Audit Committee invites a Circle Head at meeting for analysis, discuss, advise and recommend the concerned Circle Head to minimize audit objections (internal/ external/ commercial) of that concerned circle at lowest level. The committee also monitors and reviews the progress of settlement of audit objections of that circle at regular interval. The committee is proceeding this activity which helps to reduce the unsettled objections of the Bank to a great extent. 141
  141. Integrated Report Internal control and compliance Statement of Board Audit Committee xx . The ACB instructed the Circle Head to arrange bilateral or tri-lateral meetings with commercial auditors to reduce the number of audit objections of Commercial audit. A positive result is being observed by following this activity. xxi. ACB also instructed to arrange a pre-arranged meeting before conducting bi-lateral or tri-lateral meetings regarding commercial audit objections settlement. Sustainable results has been gotten from bi-lateral or tri-lateral pre-arranged meeting. In 2018 commercial audit objections 3,285 is settled by arranging prearranged meeting and taking special action whereas 1,080 objections was settled in 2017. xxii. Fraud, forgery has been increasing gradually in the bank. From this view Audit Committee fells to formulate a policy to detect and prevent fraud. A policy named “Fraud Detection and Management policy-2019” is going to formulate. xxiii.Bangladesh Bank’ BRPD circular no-11, dated 2710-2013 is mentioned to evaluation of the Audit Committee’s Own Performance on a regular basis. A standard is formulated for evaluation of the Audit Committee’s Own Performance and compliance of Bangladesh Bank instruction. xxiv.Core Risk Rating on ICC risk by Bangladesh Bank (5) Money Laundering Risk; (6) Information & Communication Technology Risk; (7) Environmental & Social Risk. BB analyses ICC related risk and makes grading. From beginning & formation of the ICC, obtaining result was marginal but complying smoothly of BB compliance (term, rules, and policy, etc regarding ABL), obtaining result is fair. Details of core risk related information comparatively is as follows: Particulars 2018 2017 2016 2015 Obtaining Marks (Out of 100) 75.00+ 66.25 65.00 42.74 Obtaining result Satisfactory Fair Scorings: 90-100= Strong, 75-90= Satisfactory, 60-75= Fair, 40-60= Marginal, Below 40= Unsatisfactory. Acknowledgements The Audit Committee expresses its sincere thanks to the respected Members of the Board, Management and the ICC Executives who are engaged in internal audit, monitoring and compliance for their continuous support. For and on behalf of the Audit Committee Bangladesh Bank (BB) makes grading on analysis of all risks. Risks are: (1) Credit Risk; (2) Asset Liability/ Balance Sheet Risk; (3) Foreign Exchange Risk; (4) Internal Control & Compliance Risk; 142 Annual Report 2018 Fair Marginal Md.Ashiqul Hoque Chawdhury Chairman, Audit Committee of the Board
  142. Integrated Report on Internal control and compliance Internal control and compliance Framework • Changes in rules and regulations Risk is almost an unavoidable phenomenon of our banking activities. Nothing is possible without risk in this earth. Naturally risks are growing faster around us. Our main challenges are keeping us and our assets away from the devastating sharp claws of it. This is why each and every organization has to work for minimizing the risks. Risk management can play an important and vital role on the overall management level which may consider as a very smart tool. The entire human society’s history is marked by the exposure to risks of all kinds and the efforts undergone by humans to deal with the risks. From ancient time the human practices risk management in order to survive. The practice of survival instincts leads to the avoidance of risks threatening to extinct the humankind. The very existence of human kind today is the proof of the success of applying risk management strategies by our ancestors. Risks are uncertainties. In the banking universe, there are large number of risks. As the goal of any state-owned organization, the main goal of bank’s management is to serve the nation and maximize the shareholders’ value. Bankruptcies in the financial sector are so costly, not only for the equity and debt holders of banks’ but also for taxpayers. Risk is the net negative impact of the exercise of vulnerability, considering both the probability and the impact of occurrence. Effective risk assessment identifies and considers both internal and external factors. Internal factors • Complexity of the organizational structure; • The nature of the Bank’s activities; • The quality of personnel; • Organizational changes; and • Employee turnover. External factors • Fluctuating economic conditions, • Changes in the Industry, • Socio-political realities, • Technological advancement. Internal control is the process, affected by a company’s Board of Directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the effectiveness and efficiency of operations, the reliability of financial reporting and compliance with applicable laws, regulations, and internal policies. Internal controls are the policies and procedures established and implemented alone, or in concert with other policies or procedures, to manage and control a particular risk or business activity, or combination of risks or business activities, to which the company is exposed or in which it is engaged. Banking operations involve both inherent and acquired risks in the pursuit of value creation. to avoid the complexities and risk arises out of those activities some sort of internal corrective measures must be there to control. The issues of effective internal control systems, corporate governance, transparency and accountability, and regulatory compliance have become prime need for high levels of performance. Thus internal control is now being termed as an integral part of the daily activities of a bank. So that the Bank’s management and stakeholders can confidently, assure that the Bank’s service delivery systems are efficient, safe and compliant with all their expectations. In turn, risk based internal audit activities are the most important means of reinforcing control systems through the regular review of operations. Compliance, on the other hand, means taking actions by the stakeholders as per advice/instruction laid down in inspection/ audit reports/ circular/ letter etc. by the supervisory/ regulatory/ administrative authority/ organization concern to mitigate deficiencies/ correct lapse, gaps, errors, omission, irregularities for overall soundness and improved performance in the organization. Internal Control & Compliance (ICC) of Agrani Bank Limited under direct supervision of Audit Committee of the Board has been implementing detail guidelines on ICC risk management to assess and mitigate risks. Internal control and compliance is a management process designed to achieve: • • • • • Effective system of control Effectiveness and efficiency of operations Reliability of financial reporting Compliance with applicable laws and regulations Safeguard of assets. 143
  143. Integrated Report on Internal control and compliance Internal control and compliance Framework Internal control consists of five interrelated components , which are: • Audit Monitoring Division Specify Objectives • Audit Compliance Division (External) • Audit Compliance Division (Internal) • Cyber Audit Cell (Proposed Division) • Pre-Audit Cell (Proposed Division) Control Environment Risk Assessment Control Activities Monitoring Information and communication Objective of ICC Objective of ICC is to ensure corporate governance, accountability, integrity, transparency and regulatory compliance in the operation of the Bank within the stringent frame work to achieve the International Standard of Banking. Qualification & appointment of Head of ICC Agrani Bank’s ICC is headed by a General Manager who is a professionally qualified Chartered Accountant, FCA, with 24 years professional experiences, he is also the Chief Internal Auditor. As per BRPD Circular No.-3, Dated-08/03/2016 and BRPD Circular No-06, Dated -04/09/2016 as a Head of Audit he has to place reports on Audit directly to the Audit Committee of the Board of Directors and as the Head of ICC he has to report to the Managing Director & CEO for administrative purpose. Formation of ICC ICC of ABL consists of five independent divisions for its effective operations headed by five Deputy General Managers. Recently a ‘Cyber Audit’ cell is launched to protect IT fraud-forgeries in the Bank headed by another Deputy General Manager. These divisions are: • Audit & Inspection Division-1 • Audit & Inspection Division-2 144 Annual Report 2018 Function of above Divisions 1. Audit & Inspection Division-1 The main function of this division is to carryout Risk Based Internal Audit and Inspection within the all 943 Branches other than AD and Corporate Branches, 2. Audit & Inspection Division-2 The main function of this division is to carryout Risk Based Internal Audit and Inspection in AD and Corporate Branches, Bank Divisions, Sub-divisions and Subsidiaries of the Bank. 3. Audit Monitoring Division • This division carries out ICT Audit by Internal Control Team. • to verify the internal control system & operational activities by Implementing of DCFCL (Departmental Control and Functional Check List), QOR (Quarterly Operation Report), LDCL (Loan Documentation Checklist) at Branch level. • to assist Audit Divisions in Risk Based Internal Audit by assessing branch/department wise risk (Off sight Analysis) with grading of all branches. • to prepare and submit Self-Assessment of Anti Fraud Internal Controls report and Bank’s Health report to Bangladesh Bank. • to prepare Bank’s Health Report to recognize the sensitivity of financial inclusion in Bank. • to observe 50.00 lac & above transaction through T24 software regarding instruction from BB for monitoring the utilization of fund of all Branches. 4. Audit Compliance Division (Internal) This division complies internal audit objections deducted by Internal Auditors of Audit & Inspection Division-1&2 within the Bank.
  144. Integrated Report on Internal control and compliance Internal control and compliance Framework 5 . Audit Compliance Division (External) To monitor compliance activities of branches, related other offices and sub-divisions under External Audit like Bangladesh Bank Inspection, Commercial Audit, External Audit, Statutory Audit, Issue Based Audit of other Regulatory Authorities. 6. Cyber audit Cell to protect Cyber Fraud in the Bank, Cyber Audit Cell has been formed under ICC. The main objective of Information Technology (IT) Audit is to examine independently assess the controls, reliability and integrity of the Bank’s IT environment. Also, to evaluate the system’s internal control, design, effectiveness and to monitor the T24 transactions under CBS of all Branches and detect any kinds of fraud & forgeries. At the same time, detected fraud & forgeries are reported to the management to take necessary action. Function held by ICC secretariat Co-ordination Meeting: Head of ICC arranges several meetings through all divisional heads of ICC for effective internal audit, monitoring, compliance. Audit/ Compliance/other issues are presented and discussed in that meeting. to run and establish effective internal control system, various suggestions are derived from that meeting. AQAT (Audit Quality Assessment Team) AQAT consists of all divisional heads of ICC which is presided by Head of ICC. Normally internal audit report is included two types of objections like Major Lapses (ML) and Serious Lapses (SL). Function of AQAT is to find out discrepancies of Internal Audit. If there is any discrepancies in audit report then letter issued to concern Branch mentioning these to take initiative action. ICC places all Serious Lapses find out by the internal audit to Audit Committee meeting of the BoD. Opinion on 10.00 (Ten) crore and above loan proposal by Head of ICC As per the MoU of Bangladesh Bank the Head of ICC makes opinion on 10.00 (Ten) Crore and above all loan proposals from Branches of Agrani Bank Limited. Regarding opinion on large loan proposal Head of ICC forms a team who are appointed as Auditor. They scrutinize all related documents, justification of loans, Bangladesh Bank circulars, Bank’s own circulars and other regulatory instructions etc. Comparative information of such opinion is as follows: Particulars No. of opinion given by Head of ICC 2018 2017 2016 145 113 39 Audit Committee of Agrani Bank Limited The Audit Committee of the Board is playing an effective role in providing a bridge among the Board and management, depositors, stakeholders to ensure efficient, safe and sound Banking practices. The Committee identifies various risk factors that arises from the business activities of the Bank by reviewing the audit reports for safe, sound and disciplined banking operations. Besides, the Committee gives time befitting directions on preparing risk-based internal audit planning, reducing the number of objections of the same nature raised by internal audit via categorizing them according to the nature of objections and re-defining them as Serious Lapses (SL), Major Lapses (ML) & Major Irregularities (MI). The Audit Committee works to ensure that the activities of the Bank are being carried out in accordance with the applicable rules and regulations of Bangladesh Bank, Bank Companies Act 1991, Companies Act 1994 and internal rules, regulations and policies of the Bank. The Board is responsible for ensuring the operation systems of internal control and for taking reasonable steps to safeguard the assets of the Bank and detecting & preventing fraud and other irregularities through ICC of the Bank. Audit Manual and Audit Implementation Manual have been introduced through ICC Manual to ensure proper internal control and compliance of the Bank. The Board also reviews the observations of the Audit Committee to make sure that internal control & compliance are rigorously maintained. The Audit Committee consists of five members of the Board of Directors. Fifteen meetings were held regarding Internal Control & Compliance in 2018 where all Memos were discussed by the Audit Committee. 145
  145. Integrated Report on Internal control and compliance ICC Organogram of ABL Board of Directors Audit Committee of the Board Managing Director & CEO General Manager (Head of ICC) 1 2 Audit & Inspection Division 3 Audit Monitoring Division DGM DGM DGM Audit & Inspection Divn. (all other than Audit & Inspection Division (all Audit Monitoring Division AID-2) AD Br. & H/O Div.) AID-1 AID-2 8 AGM 13 AGM 12 SPO 26 SPO 20 PO 27 PO 56 SO 22 SO 3 AGM 11 SPO 11 PO 4 Audit Compliance Division DGM DGM Audit Compliance Division (Internal) Audit Compliance Division (External) 4 AGM 3 AGM 8 SPO Staff position for GM’s Secretariat 8 SPO 9 PO Nil Nil 3 SPO 8 PO 3 PO/SO 13 Officer 5 Officer 8 NC Staff Sub Total= 212 11 SO 10 SO 10 SO 11 Officer 6 Officer 3 NC Staff Sub Total= 51 5 Officer 5 NC Staff 2 NC Staff Sub Total= 78 Sub Total= 9 Grand Total (212+51+78+9)= 350 50 Auditors out of 212 staff of Audit & Inspection Division will be engaged in concurrent audit. 146 Annual Report 2018 Nil
  146. Integrated Report on Internal control and compliance Activities of ICC for the year 2018 Internal Control and Compliance Policy of Agrani Bank Limited According to the instruction and direction of Bangladesh Bank Prudential guideline and regulations of Memorandum of Understanding (MoU) 2013 signed between Bangladesh Bank and Agrani Bank Limited and Bangladesh Bank’s “Guidelines on Internal control and compliance in Banks’ vide BRPD circular No.03 and circular No.06 Dated on-08.03.2016 and 04.09.2016 respectively, ABL has prepared “ICC Policy and Procedure-2016 [Risk Based Internal Audit Manual, Audit Compliance Manual, Audit Monitoring and Controlling Manual and IT Manual]” by merging and customizing (Amendment/Including/Excluding) different articles of ICC Policy-2015 and ICC Manual-2015 and have been approved in the 481st meeting of the Board of Directors vide memo no.1032/16 dated 28/11/2016. It has been circulated vide Circular No. ICC/ AMD/135/2016 dated 28/12/2016 all over the Agrani Bank Limited for compliance. All rules, regulations, policies and procedures of previous manual has been null and void after the execution of the “ICC Policy and Procedure-2016”. Activities of ICC for the year 2018 Risk Based Internal Audit and Inspection As per the Bangladesh Bank instructions, the ICC has been implementing ‘Risk Based Internal Audit (RBIA)’ through core risk factors in the daily activities of the Bank to assess the business risk as well as control risk associated with the branches. The Audit & Inspection Divisions prepares a risk based internal audit plan for every year. The internal audit plan is approved by Audit Committee of the Board. In 2018, Audit and Inspection Divisions conducted 449 comprehensive audits (273 Branches, 37 Corporate Branches, 13 AD Branches, 49 District Head Quarter Branches, 26 Zonal Offices, 5 Circle Offices, 18 Divisions and 28 others), 106% achievement than targeted. Comparative statement of Risk-based internal audit for 2018 Targeted Scope 2018 Targeted Achievement Corporate (all are AD) Branches 27 27 Authorized Dealer (AD) Branches 13 13 District Head Quarter Branches 49 49 Branches 268 273 Zonal Office 26 26 Circle Office 5 5 Head Office Division 1a8 18 High Value Corporate Branch 10 10 (yearly two times) Agrani Exch. House 2 Islamic Window 5 5 Others 2 2 Issue Based 21 Total 425 449 After completion of internal audit, the Audit & Inspection Divisions submit reports to the Head of ICC. The ICC places especially serious lapses (SL) reports to the Board Audit Committee for necessary suggestions. The Audit Committee evaluates the irregularities, fraud and forgeries and important deviations detected by internal auditors. In 2017, eighteen meetings of Audit Committee were held in which internal & external audit/ inspection reports, appropriateness of ICC, policy guidelines were reviewed, updated and approved for proper functioning of ICC. Audit Monitoring Monitoring is the Bank’s own oversight of the control system. Effectiveness of the Bank’s internal control should be monitored on an ongoing basis. Key or high risk items should be identified and monitored as the part of daily activities. In addition, there should be periodic evaluation. The Monitoring Division ensures its internal control process through review of DCFCL, LDCL, QOR of branches and other mechanism. If notable deviations are found, they have to report before Head of ICC for taking necessary actions to mitigate the risk. In the year 2018, Audit Monitoring Division achieved its full target through effectively serving the following activities: • Self-Assessment of Anti-Fraud Internal Controls. 147
  147. Integrated Report on Internal control and compliance Statement of Board Risk Management Committee • • • • Audit through Internal Control Team (ICT) Issue Based Audit/Inspection Team activities. Workshop to outreach on ICC Risk Management Data collection & analysis through DCFCL, LDCL, QOR (Daily, Monthly, Quarterly), etc. The Compliance Divisions of ICC maintains strong liaison with the regulators at all levels and ensures all guidelines received from regulatory authority are properly disseminated among the relevant divisions. Audit Compliance (External) Audit Compliance (External) of ICC is responsible to ensure that the Bank complies with all regulatory requirements while conducting its business. This Division is responsible to comply of Government Commercial Audit, Bangladesh Bank Inspection, Chartered Accountancy Firms Audit and other Issue Based Audit. Audit Compliance (Internal) Audit Compliance Division (Internal) of ICC is responsible to ensure that the Bank complies with all regulatory requirements while conducting its business. This Division is responsible for compliance of Internal Audit and Inspection. Compliance on Bangladesh Bank Inspection Objections Description Year 2018 2017 2016 No. of objections (opening balance) 1,042 1,276 1,287 Add: No. of objections raised in the year 3,897 4,450 5,280 (3,942) (4,684) (5,291) 997 1,042 1,276 Less: No. of objections compliance /settled Unsettled objections as on 31st Dec’18 In 2018, Commercial Audit team has conducted 13 comprehensive audits and 359 objections have been raised. Previous number of unsettled audit objections was 8,403 of them 8,403 objections has been settled during the year through arranging tripartite meetings. In 2018, Bangladesh Bank Inspection Team inspected 200 Branches and raised 3,897 objections. Previous number of unsettled objections was 1,042. During 2018 Internal Audit Team inspected a total number of 449 auditable items and raised 27,300 objections. Previous number of unsettled objections were 14,992. During the year 2018, the total number of objections 30,011 has been settled. Number of unsettled objections as on 31/12/2018 was 12,281. Like external, this division also maintains strong liaison with the regulators at all levels and ensures all guidelines received from regulatory authorities are properly disseminated among the relevant divisions. Comparative statement of Internal Audit Compliance for 2018 & 2017: During the year 3,942 objections have been settled. Description Compliance on Commercial Audit objections Description No. of objections (opening balance) Year 2018 8,403 2017 No. of objections (opening balance) 14,992 13,374 2017 2016 7,791 7,979 Add: No. of objections raised in the year 27,300 36,494 (30,011) (34,876) 12,281 14,992 Add: No. of objections raised in the year 359 1,692 648 Less: No. of objections compliance /settled Less: No. of objections compliance /settled (3,285) (1,080) (836) Unsettled objections as on 31st Dec’18 5,477 8,403 7,791 Unsettled objections as on 31st Dec’18 148 Annual Report 2018 Year 2018
  148. Integrated Report on Internal control and compliance Statement of Board Risk Management Committee  Approving adequate record keeping & reporting system and ensuring its proper use;  Supervision of execution of overall risk management policy;  Complying with instructions issued from time to time by the regulatory body; and  Any other task as assigned by the Board of Directors and Bangladesh Bank etc. Board Risk Management Committee Meeting The Board RMC of ABL held 7 (Seven) meetings in 2018 although Bangladesh Bank advised to hold at least 4 meetings in a year (preferably one meeting in every quarter). The number of meetings attended by the Committee members is shown in the table given below: Designation Meeting attended Chairman 7 M. Ashiqul Hoque Chawdhury Director 7 Hasina Newaaz Director 5 Md. Ansar Ali Khan Director 7 Name Kashem Humayun Kashem Humayun Chairman, Board Risk Management Committee The Board of Directors of Agrani Bank Limited formed a Board Risk Management Committee (BRMC) in its 335th meeting held in 21 September 2013 in accordance with the instruction of Bangladesh Bank to ensure whether appropriate risk management measures are being put in place and applied and whether adequate capital and provision is being maintained against the risks identified. Broad Objectives of The Committee  To review, guide, manage and reduce various risks resulting from implementation of strategies and action plan approved by the board;  Ensure that proper steps are taken by Management to identify, measure and reduce risk;  To review capital adequacy of the Bank against all risks; and  To review provision maintained against all risks etc. Roles And Responsibilities of The Committee The Committee was entrusted to supervise and review risk management process covering the following:  Risk identification and development of control strategy;  Monitoring implementation of risk management policies & process;  Formulating and reviewing (at least annually) risk management policies and strategies;  Supervising the activities of Executive Risk Management Committee (ERMC);  Ensuring compliance of BB instructions regarding implementation of core risk management;  Adoption of an organizational structure highlighting risk across the institution;  Review and approval of Risk Management policy; Activitities Of Board Risk Management Committee During 2018 The BRMC put recommendations on findings against various risk issues of bank affairs that needed to improve after comprehensive discussions and review session with the Chief Risk Officer (CRO). The committee reviewed and focused on various areas during the year. Some of them are as follows:  Review of Core Risk Guidelines;  Observation on Monthly Risk Management Report;  Observation on Stress Testing Report;  Review on restructured large loans;  Observation on Liquidity Position Reports;  Observation on Comprehensive Risk Management Report;  Observation on CAMELS Rating Report;  Observation report on Comprehensive Risk Management Rating by Bangladesh Bank;  Observation on the risk covered under SRP; and  Observation on Risk Appetite Report etc. Acknowledgement The Risk Management Committee expresses its sincere gratitude to the members of the Board, Management Team and Risk Management Division for their consistent support to discharge its due roles. Committee expects more vigilance, proactive risk identification and risk management initiatives from the concerned divisions in the banking operations of Agrani Bank Limited. On behalf of the Risk Management Committee, Kashem Humayun Chairman of the Risk Management Committee of the Board 149
  149. Integrated Report on Risk management Statement of the Board Risk management Committee Risk management Credit risk management To every business there exists risk which hampers business and even its outcome results in threats for the existence of the institute . So every transaction ought to be controlled prudently to avoid risk. To keep the entity forward in today’s competitive and complex market economies is a hard task. In this situation BB has identified six major field of risk in banking sector. They are referred as ‘Core risk’. They also formulated some policies for the FIs working in the country. Following the directives of the regulatory body ABL has adopted six guidelines on core risk based. The BOD, apex body of the bank has approved them and related transactions are made following the guidelines. Credit is the main source of income of financial institute like bank and there inherents acute risks. To get back money with accorded interest prudent risk management is inseparable. Credit risk arises from non compliances with agreed terms and conditions between bank and borrower or counterparty. It may arises from ill motive of nonpayment or from down gradation of business or financial and economical position of the borrower. To avoid this untoward situation quality borrowers are selected. Some standard criteria have been set up in ABL to handle the job. Risk management in ABL ABL a state-owned commercial bank is always aware to protect its capital and to enhance its activities in banking arena. It feels special responsibilities as inseparable partner of national economy. ABL has a separate division named ‘Risk management division’ to deal with risk related portfolio. This division works as secretariat of bank’s risk management team. It collects information in BB’s prescribed form from concern division and field level. To monitor risk parameter the movements of related components are observed keeping them side by side. A monthly meeting is held with concern divisional head and executives as member and chaired by chief risk officer (CRO) (a DMD level senior executive). Here implementation and progress of prior decisions are also discussed. To keep in monitoring stress testing, capital calculation, duration gap analysis to determine mismatch of asset-liability maturity are performed quarterly basis. All these are the tools of measuring risk profile. ABL has its own strategy to manage its risk portfolio in line with international standard and regulatory bodies’ requirement. ABL as a state owned bank has a consistent responsibility to protect its asset and to meet the liabilities in committed way. Taking into the consideration of its responsibilities underneath strategy are taken: (i) To protect bank’s capital ; (ii) Growth of business; (iii) Risk adjusted performance measurement; (iv) Consistency of earnings; and (v) Quality and transparency of management. To observe the movement of various parameter stressed situation of risk components are represented. All the information are submitted to BB and after their observation they send directives to bank and bank performs accordingly. 150 Annual Report 2018 Principle of credit risk management ABL has some consistent policy in line with regulatory requirement and international standard to protect credit from erosion. Following the underneath principles credits are sanctioned and extended in ABL: (1) Power of delegation has been segregated depending on size and importance of credit. BOD is the apex body to approve policy prepared by management and to grant credit beyond their delegated power. (2) Senior management oversight: Senior management of the bank is responsible for the implementation of BOD’s approved policy. ICC division, vigilance division and other instant required divisions readily help them. Necessary compliances are submitted to board and to regulatory authority through them. Loans and advances are evaluated in qualitative and quantitative aspect. Risk management procedure begins from initiation of a loan. First priority in this regard is selection of quality borrower. Following character of borrower is taken into consideration for the selection: (a) Character: Here character means financial and economical behavior .It can be gathered from personal information and social communication of the borrower. (b) Capital: It is important to have required equity of his business. (c) Collateral: Collateral is the main tool to cover risky event. So that its ownership would be easily transferable in favor of bank. Its legal aspect as well as ownership is vetted by the panel lawyer. The offered collateral is properly valued by the delegated authority. If value and legal aspect show positive result then this collateral is accepted. (d) Earning capacity: borrower’s business experience
  150. Integrated Report on Risk management Statement of the Board Risk management Committee (e) (f) (g) (h) (i) and market penetration capacity is considered to measure his earning. Credit requirement: To extend credit cash flow and other accounts related statements are examined. Over flow of cash led the party to divert them in unscrupulous field. On the other hand scarcity of cash make hard to run the project. So ABL prudently examines credit requirement for the applied project. Insurance coverage: To get clear access to offered collateral insurance coverage is a strong tool. Customers’ desire for not taking required insurance policy must be considered as deviation. Proper documentation: Error in documentation is a serious drawback to extend credit. It may lead bank to add risk portfolio. So all the documents are examined by the proper authority. KYC: To get proper identity of the party a prescribed form is supplied to fill in. Any deviation in verification is considered as risky point. Syndicate loans: Syndicate loans are assessed independently by ABL. If its quality, risk and returns are not acceptable, ABL does not depend only on lead arranger’s report. Monitoring and Mitigation Loan portfolio both on on-balancesheet and off-balance sheet are closely monitored by the higher management and by the BOD of bank. ABL has system to review loan portfolio and its inherent risks. Field level (branch, zonal office) reports the situation of each and every loan to the management through proper delegated authority and they give directives as situation demand. The NPA management (recovery) and C/L division directly monitor Classified and written-off loan. Risk assessment procedure actually begins before granting or extending credit. The delegated personnel work accordingly. ABL has a system of tracking risky and potentially weak loan accounts. Bank has dedicated teams to monitor and supervise them. Respective assigned person reports to the delegated authority to take measure so that the loan may not be downgraded or hindered assets portfolio of the bank. Early identification, prompt reporting and proactive measure can protect loans from being downgraded or negative shifting. NPA management division, an assigned division co-ordinates field level with higher management and chalks out plans to recover from CL and written-off loan. It reviews progress quarterly and reports to the higher management. The objective of credit risk management is to bring back lent money safely and strengthen the bank as well as national economy. Asset-Liability Management (ALM) Risk Asset and Liability management (ALM) risk is very essential for banks. The Asset-Liability Management has been structured as a systemic process to earn a sufficient return while maintaining a comfortable surplus of assets beyond liabilities. ALM is a balancing act, involving the continuous of the two sides of the balance sheet to obtain reasonable returns-while providing adequate capital, liquidity and responsiveness to both internal and external factors. Roles and Responsibilities Asset-liability management desk of the Bank closely monitors and controls liquidity requirements on daily basis of appropriate coordination of funding activities. The principle responsibility of the liquidity risk management of the bank rests with Treasury Division which maintains liquidity based on historical requirements, current liquidity position, anticipated future funding requirement, sources of fund, present and anticipated asset quality, present and future earning capacity etc. The overall objective is to provide cost effective funding to finance the asset growth and trade related transactions, minimize the funding cost, increase spread with the lowest possible liquidity, maturity, foreign exchange and interest rate risks. Liquidity Risk Asset-Liability mismatches create liquidity risk. Liquidity risk is termed as the possible inability of the bank to meet its financial obligations on account of maturity mismatch between assets and liabilities. It also includes inability to liquidate any asset at reasonable price in a timely manner. Liquidity risk can arise due to market liquidity or funding liquidity. ABL implements various business-as-usual and stress risk metrics and monitor these against limits and management action triggers to manage liquidity risk. This ensures that the Bank maintains an adequate and well-diversified liquidity buffer as well as a stable funding base. A funding plan is also developed for efficient liquidity projection to ensure that the Bank is adequately funded, in the required currencies, to meet its obligations and client funding needs. Governance Committee To deal with Asset-Liability Management risk, ABL has a dedicated committee called the Asset- Liability Committee (ALCOM) comprising of the senior officials of the Bank to make important decisions related to the Balance Sheet, 151
  151. Integrated Report on Risk management Statement of the Board Risk management Committee Liquidity , Interest Rate Risk and Foreign Exchange risk of the Bank. The ALCOM generally meets at least once in every month and reviews liquidity requirement, the maturity of assets and liabilities, deposit and loan pricing strategy/transfer pricing, sensitivity of assets and liabilities, key management indicators and the liquidity contingency plan of the bank. The key points of the discussions are minuted and the action points are highlighted to ensure implementation in every ALCOM meeting. As a part of regulatory requirement, the management reviews the ALM manual and its components regularly. Mitigation The Bank develops policies to address various risks and aims to maintain its risk profile within Risk Appetite. ABL has a contingency plan to reduce unexpected or unusual situations which could lead to market disruption. Contingency plan can provide a useful framework for managing liquidity risk both in short term and in the long term. Further, it helps ensure that bank prudently and efficiently manage routine and extraordinary fluctuations in liquidity. ALCOM regularly monitors money market condition as well as the bank’s interest rate on both deposit and lending to manage the interest rate risk. However, bank has been identifying both the interest rate sensitive assets and Liabilities and classified them into different maturity bucket to find the assets/liability mismatch. Monitoring Capital and liquidity risk are performed by Risk Management Division and Treasury Division respectively. The Bank regularly monitors capital and liquidity risks inherent in its business activities and arise from internal and external events. Internal risk management reports covering key risk areas, the capital and liquidity position of the Bank are presented to the Executive Risk Management Committee (ERMC). The reports contain key information on balance sheet trends, exposures against Risk Appetite and supporting risk measures which enable members to make informed decisions around the overall risk management of Bank. Money Laundering Risk Money Laundering Risk is the potential for legal or regulatory penalties, material financial loss or reputational damage resulting from the failure to comply with applicable laws and regulations relating to Money Laundering Prevention Act, 2012, and The Anti-Terrorism Act, 2009, Money Laundering Prevention Rules 2013, Anti Terrorism Rules 2013, Bangladesh Financial Intelligence Unit (BFIU) guidelines for Money Laundering and Terrorist Financing Risk Management Guidelines and international standards. 152 Annual Report 2018 Roles and Responsibilities For mitigating the risks, ABL has formed Central Compliance Unit (CCU) at Branch & Subsidiaries Unit Control Division (BSUCD) in Head Office headed by the Chief Anti-Money Laundering Compliance Officer (CAMLCO) equivalent to General Manager (GM). The roles of the CAMLCO are to establish and maintain effective systems and control to meet legal and regulatory obligations in respect of Money Laundering Risk. The CAMLCO is the chief reporting officer and reports to the MD or CEO of ABL. The bank has also nominated Deputy CAMLCO, Regional Anti-Money Laundering Compliance Officer (RAMLCO), Branch Anti-Money Laundering Compliance Officer (BAMLCO) and reporting officer for monitoring and reporting to the higher authority regarding the compliance issues of Money Laundering Risk. As the first line, the reporting officers at branch level have responsibility for the application of policy controls and the identification and measurement of money laundering risk. The reporting officers must communicate risks and any policy non-compliance to the second line (BAMLCO) for review. Similarly, the reporting and review processes flow upwards from BAMLCO to RAMLCO and RAMLCO to CAMLCO. Mitigation Being a Bank Company, ABL has statutory obligation to comply with all applicable Anti-Money Laundering rules and regulations. In line with evolving regulatory rules and acts relating to the prevention and combating process, ABL has formulated its own policy guidelines and manuals to follow and implement by the officials at all levels for effective management. The following activities are carried out by ABL to mitigate the risk regarding money laundering risk:  ABL has formed CCU headed by CAMLCO.  ABL has formulated its own policy guidelines and manuals related to money laundering risk and these are subjected to update as per necessity.  ABL has introduced uniform Account Opening Form in which ‘Know Your Customer’ (KYC) and ‘Transaction Profile’ (TP) are included. As the part of KYC requirements, duly filled in KYC form is mandatory for account opening. ABL has checked the reference and the back ground of the applicants compulsorily as per instruction of central bank. Every customer must specify in TP about the frequency and amount of transaction before opening the account.  ABL has introduced Automated Screening Software named as “Velocity AML Solutions Suite Software” to comply with Anti-Money Laundering (AML), and FATCA regulations with ease and simplicity.
  152. Integrated Report Risk Management Statement of the Board Risk management Committee  Monthly Cash Transaction Report (CTR) is submitted to BFIU of Bangladesh bank (BB) using go AML web for the customers depositing or withdrawing cash amounting BDT 1.00 million or above in a day.  Monitoring of suspicious transaction is carried out through internal technique of the bank. If any suspicious transaction is detected, ABL send Suspicious Transaction Report (STR) to the BFIU of Bangladesh Bank.  ABL has conducted AML training/workshop with cooperation of HR Training, Research & Development Division on a periodic basis to create awareness among the employees of the bank. Internal Control And Compliance (Icc) Risk Banking for having diversified and multifarious risks needs an effective internal control system, good governance, transparency of all financial activities, and accountability towards its stakeholders and regulators to ensure smooth performance. Effective risk management and internal control is therefore reliant on a regular evaluation of the nature and extent of risks. Internal control is fundamental to the successful operation and day-to-day running of a business and it assists the company in achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and management processes, covering the bank’s entire range of activities and operations, and not just those directly related to financial operations and reporting. It is a process within a financial organization designed to provide reasonable assurance regarding the following primary objectives: Audit & Inspection Divisions conduct on-site periodical and special inspections as per ‘Risk Based Audit Plan’ approved by the Board to verify non-compliant issue (if any). Monitoring Division is engaged with on-site and offsite monitoring functions. Compliance division deals with the in-house developed and regulatory compliance related activities and also functions as the contact point of the Bank. They ensure that corrective action plans are implemented within the set deadline as well as ensure proper corporate discipline and awareness. ICC places a summary of audit & inspection reports to the Board Audit Committee and measures are taken according to decisions of the Committee. Moreover, steps are taken by ICC to ensure transparency, accountability and corporate governance etc. by introducing of ‘Cyber Audit Cell’, forming ‘Concurrent Audit Team’, taking endorsement of expenses amounting Tk. 5.00 lac & above from ‘Pre-Audit Cell’ and prior endorsement for sanctioning loans of Tk. 10.00 crore & above. Information and Communication Technology (ICT) risk management Information and Communication Technology (ICT) has become an indispensible part of today’s banking and financial activities in both local and global arena. Besides, increased competition necessitated banking organizations to put emphasis on ICT for increasing customer base, wide range of choice for products and services offering, bank’s reputation. ICT tools enable bank to present professional product offer and sustain in innovative market place.  Accomplishment of established objectives and goals of operations or programs etc. Use of ICT tools has increased technology infrastructure of banks significantly. Numerous operations of bank are being performed using ICT tools in day to day activities. Such reliance on ICT, inter connectivity within the bank and with other banks, internally performed activities, increased transactions volume, wide range network coverage lead banks to a number of risks. The emergence of cyber risk along with the digitalization process and IT outsourcing, highlights the need for IT security and risk management at all levels of the business. Internal Control & Compliance (ICC) of ABL has been structured as per prescribed organizational structure of Bangladesh Bank given in the ‘Core Risk Management Guidelines’ to ensure appropriate level of internal control system. Functions of ICC are jointly performed by Audit & Inspection Division-1, Audit & Inspection Division-2, Audit Monitoring Division, Audit Compliance Division (Internal) and Audit Compliance Division (External). ICC is headed by a General Manager for co-ordination from a single platform. Considering IT threats, bank’s exposure towards IT logistics and IT infrastructure, IT risk management has become pressing and highly prioritized events for the bank. As such, ABL has been upgrading and strengthening its technology infrastructure in line with the growing needs to fulfill the requirements of its clients with utmost satisfaction, to cope up with technological dynamism, to sustain in competition and to make information management of the bank strong, effective and resourceful.  Secrecy, reliability and integrity of data and information;  Compliance with policies, plans, procedures, laws and regulations;  Safeguarding of its investments and assets;  Economical and efficient use of resources; and 153
  153. Integrated Report Risk Management Statement of the Board Risk management Committee Agrani Bank Limited has an ICT policy developed in accordance with the Bangladesh Bank Guidelines on ICT risk management to ensure proper use , control, management, protection and maintenance of IT activities and ICT environment in the bank. It has established Disaster Recover Site (DRS) and developed Business Continuity Plan (BCP) to prevent loss of data due to unforeseen events and ensure early recovery for smooth functioning even after failure of data management system, system failure and other natural disasters. Information Technology in Agrani Bank Limited has been upgraded to global standard to perform and execute accurate and flawless management of the increasing transaction volume from a larger customer base and has attained a standard customer satisfaction in terms of convenience and timeliness. ABL has been using “Temenos24 (T24)” software which has improved customer services to a large extent and minimized technological hazards. The bank has moved faster towards technological use and excelling in it with the expectation of fulfilling customer demand and achieves business objectives. Few recent technological changes of the bank are as follows: i) ABL has facilitated ATM services for its ATM card holders through Shared ATM booths and the ATM booths under NPSB (National Payment Switch of Bangladesh). ii) ABL has been performing IT Audit functions on a regular basis to ensure security in IT operations and avoid potential IT threats from cyber attack, hacking and frauds. Besides, bank has developed Comprehensive Audit Software and Software on Risk Based Audit for conducting comprehensive audit by internal audit divisions of the bank. Foreign Exchange Risk Management Foreign exchange risk is the current or prospective risk to earning and capital arising out of adverse movement of currency exchange rate. Foreign exchange risk management is fundamental for safe and sound management of all institution having exposure in foreign currencies. As per directives of central bank ABL formulated a well defined policies and manual with a view to minimize the foreign exchange risk. Bank also developed different strategies to control foreign exchange risk by setting limits on net open position by currencies, overall gross limit for forward transaction, maximum loss limits per deal and per day, counterparty limit etc. Market scenario of risk is monitored and measured by treasury division to manage the foreign exchange operations in such a way that earnings are not hampered against any adverse movement of market price. 154 Annual Report 2018 The function of treasury Front Office, Mid Office and Back Office are segregated. Mid Office and Back Office are conducting operations in a separate location apart from Treasury Front Office. ABL’s Treasury Front Office i.e. Treasury Division manages and controls day-to-day trading activities under the supervision of Managing Director and CEO and suggestion/instruction of ALCO that ensures continuous monitoring of the level of assumed risk .Treasury Mid Office verifies deal and monitors limit. Back Office is responsible for deal confirmation, settlement of transaction, transferring fund to Nostro account, timely recording and reporting of information on exchange transactions and currency transfer etc. Reporting lines of these three offices are separate and independent to ensure minimization of risk. The ABL’s FOREX risk is minimal as foreign exchange trading exposures are principally derived from customer driven transactions. At the end of the month all foreign exchange transactions are revalued at mark-to-market method as per guidelines of the central bank. As of December, 2018 ABL maintained 32 Nostro accounts to conduct FOREX operation in different currencies. All the Nostro accounts are reconciled fortnightly and outstanding entries are reviewed by the management for settlement. The NOSTRO accounts are verified by the external auditors and reports are submitted to management and Bangladesh Bank. Besides Bank’s Audit and Inspection Division is conducting annual audit to comply with the foreign exchange risk management policy. Audit findings are submitted to Internal Control and Compliance Division and are reported to the Board Audit Committee of the bank. Other Risks In addition, the Bank also manages the risk, taking into consideration the reputation risk, liquidity risk, operational risk, market risk, credit concentration risk, interest rate risk, settlement risk, environmental and climate risk, residual risk and equity price risk which are described below: Reputation Risk Reputation Risk is the current or prospective risk arising from adverse perception of the image of the Bank on the part of the customers, counterparties, shareholders, investors or regulators. Bank’s CAMEL’s rating, regulatory non-compliance, non-payment of banks commitment, customer complaint and service quality, regulatory penalties etc. are factors that cause this risk.
  154. Integrated Report Risk Management Statement of the Board Risk management Committee The Bank manages the reputation risk ensuring the following : a) The Bank effectively develops its policies for risk management to refrain from committing violation of laws, regulations, best banking practices and consumer rights that could affect its reputation. b) Management anticipates and responds to change of a market or regulatory nature that affect its reputation in the market place. Residual Risk A Bank may mitigate risks by the way of collateral, but collateral can pose additional risks (legal, documentation and liquidity risks) which may deteriorate the impact of risk mitigation. For example, (1) The liquidation of collateral is either problematic or time consuming due to error of documentation or delay in legal proceedings. (2) Collateral were valued inappropriately (i.e. Overvaluation). Bank takes extra precaution through process strengthening and CRM application. Operational Risk Operational risk arises mainly due to inadequate or failed internal process, people and systems, or from external events (including legal risk). The Bank is managing these risks through written procedures, regular training and awareness program. ICC Division monitors operational procedure of the Bank. It undertakes periodical and special audit of the branches and divisions at the Head Office for reviewing of the operation and compliance of statutory requirements. Liquidity Risk Liquidity Risk is defined as current or prospective threat to an institution’s earnings and capital as a result of the possibility that it will not be able to meet its short term payment obligations at any point in time without incurring unacceptable cost or losses. ABL manages its liquidity in such a way that it avoids running into liquidity problem. This means that asset and Liability position both On and Off Balance Sheet were matched in such a way that the Bank is able to meet its obligation immediately and continuously without adversely affecting its solvency. ABL has contingency plan approved by the Board for handling potential liquidity crisis. addresses through proper evaluation. Credit concentration of ABL is used in a broader sense and includes the following: i) Concentration by economic purpose (sector). ii) Concentration by size of Loan Accounts/ in the name of a single borrower. iii) Concentration by a legally connected group of borrowers. iv) Concentration by region (geographical). v) Concentration by portfolio type (granularity). Any higher concentration will require maintaining higher amount of capital buffer due to risks in these categories. ABL has strategy to redistribute credit concentration and cap borrowings exposures to reduce capital requirement for these risks. Settlement Risk Settlement risk arises from non-realization of receivable from bills and counterparty commitments (both local and foreign) . These are ABL’s receivables and bank has to ensure strong supervision, monitoring and tracking for realization of receivables in time. This often requires review of counterparty’s limit and exposure. The Bank‘s monitoring and follow-up tracking system address the cause of these risks. Market Risk It is the risk of potential losses in the On-balance Sheet and Off-balance Sheet positions of a bank steams from adverse movement in market rates or prices such as interest rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices. Treasury Division manages the market risk and ALCOM monitors the activities of Treasury Division in managing the risk. Interest Rate Risk Interest rate risk arises when a banks principal and interest cash flow (including final maturities) both On and OffBalance Sheet, have mismatched repricing dates. The amount at risk is a function of the magnitude or direction of interest rate changes and the size and maturity structure of the mismatched position. ALCOM of the Bank monitors the interest rate movement on a regular basis. Credit Concentration Risk Equity Price Risk Credit concentration risk may arise from credit exposures in the same economic or geographic sector and/or credit concentration in dependent industries which the Bank Equity risk is defined as losses due to changes in market price of equity held. Mark to market valuation of the share investment portfolio is done to measure and identify 155
  155. Integrated Report Risk Management Disclosure under Basel-III the risk . To minimize equity price risk, diversification is enforced as per bank’s own policy. Environmental and Climate change Risk management Environmental risk is a facilitating element of credit risk arising from environmental issues. It refers to the uncertainty or probable losses that originate from any adverse environmental or climate change events (natural or man made) and the non-compliance of the prevailing national environmental regulations. Climate change impact can lead to the borrower not being able to continue the business activities and hence unable to service/ repay the financing taken from the Bank. The overall purpose of Environmental Risk Management is to understand and manage risks that arise from environmental concerns. The specific purposes are to: a) Examine the environmental issues and concerns associated with potential business activities proposed for financing. b) Identify, evaluate and manage the environmental risks and associated financial implications arising from these issues and concerns. c) Enhance the credit risk appraisal process. Giving emphasis on the above topics, Bangladesh Bank vide BRPD Circular No.01 dated: 30-01-2011 formulated the guidelines on Environmental Risk Management (ERM) for Banks/ NBFIs. to comply with Bangladesh Bank guidelines and adoption thereof in our bank, ABL prepared its own guidelines which is the integral part of the Bank’s credit risk management. ABL addresses issues possessing environmental risks before any financing is made. It recognizes environmental risk management to comply with regulatory standard and for ethical values. ABL encourages financing to alleviate negative environmental impact on business thereby mitigating/avoiding environmental risks. These disclosures have been made in accordance with the Guidelines on “Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III)” issued by Bangladesh Bank vide BRPD Circular No-18 of 21 December 2014. The purpose of Market discipline in the Revised Capital adequacy Framework is to complement the minimum capital requirements (MCR) under Pillar I and the supervisory review process under Pillar II and to establish more transparent and more disciplined information on the position of the bank regarding holding of assets, assets 156 Annual Report 2018 quality, risk management framework & Process, risk mitigation techniques relating to the risk exposures and capital adequacy management so that stakeholders can assess the compliance status of the bank in risk related issues. The major highlights of the regulations regarding measurement of Risk Weighted Assets and capital requirement: a) to assess Minimum Capital Requirements to be maintained by a bank against credit, market and operational risks b) to maintain Capital to Risk Weighted Assets Ratio (CRAR) at a minimum of 10 percent c) to adopt the standardized approach for credit risk in relation to implementation of Basel-III d) to adopt Standardized (Rule Based) Approach for market risk e) to adopt Basic Indicator Approach for Operational risk f) to ensure public disclosures on the positions of a bank’s risk profiles, capital adequacy and risk management system g) to submit the returns to Bangladesh bank on a regular basis Disclosure Framework The following detailed qualitative and quantitative disclosures as on December 31, 2018 are furnished in line with Bangladesh Ban’s Risk Based Capital Adequacy (RBCA) guidelines. Scope of application Qualitative Disclosures a) The name of the top corporate entity in the group to which this guideline applies is Agrani Bank Limited. b) An outline of differences on the basis of consolidation for accounting and regulatory purposes, with a brief description of the entities within the group: 1) That is fully consolidated. ABL’s Minimum Capital Requirement (MCR) has been arrived at both on Solo & Consolidated Basis. 2) The following items are given a deduction treatment. • Deferred Tax Assets • Intangible Assets (Software) Following are the Five subsidiary companies of Agrani Bank Limited.
  156. Integrated Report Risk Management Disclosure under Basel-III i ) Agrani Equity & Investment Limited Agrani Bank Limited is the parent company of Agrani Equity & Investment Ltd. which is established to perform merchant banking activities in Bangladesh. Name : Date of incorporation : Date of Commencement : Authorized Capital : Paid up Capital : Ownership Interest in Capital Agrani Equity & Investment Ltd. 16.03.2010 16.03.2010 Tk. 500,00,00,000 Tk. 400,00,00,000 : Tk. 400,00,00,000 (100%) ii) Agrani SME Financing Company Limited Agrani Bank Limited is the parent company of Agrani SME Financing Company Limited which is established to perform retail banking activities in Bangladesh. Name : Date of incorporation : Date of Commencement : Authorized Capital : Paid up Capital : Ownership Interest in Capital: Agrani SME Financing Company Limited 27.10.2010 27.10.2010 Tk. 500,00,00,000 Tk. 100,00,00,000 Tk. 100,00,00,000 (100%) iii) Agrani Exchange House Private Limited, Singapore Agrani Bank Limited is the parent company of Agrani Exchange House Private Limited, Singapore which is established to perform activities as remittance house. Name : Date of incorporation : Date of Commencement : Authorized Capital : Paid up Capital : Ownership Interest in Capital: Agrani Exchange House Private Limited, Singapore 04.01.2002 08.02.2002 SGD 10,00,000 SGD 10,00,000 SGD 10,00,000 (100%) iv) Agrani Remittance House SDN, BHD, Malaysia Agrani Bank Limited is the parent company of Agrani Remittance House SDN, BHD, Malaysia which is established to perform activities as remittance house. Name : Date of incorporation : Date of Commencement : Authorized Capital : Agrani Remittance House SDN, BHD, Malaysia 18.08.2005 13.01.2006 MYR 50,00,000 Paid up Capital : MYR 30,00,000 Ownership Interest in Capital: MYR 30,00,000 (100%) v) Agrani Remittance House Canada, Inc. Agrani Bank Limited is the parent company of Agrani Remittance House Canada, Inc. which is established to perform activities as remittance house. Name : Agrani Remittance House Canada, Inc. Date of incorporation : 11.07.2012 Date of Commencement : 26.05.2014 Authorized Capital : CAD 100 Paid up Capital : CAD 100 Ownership Interest in Capital: CAD 100 (100% owned by Agrani Bank Limited) 3) That is neither Solo nor deducted (e.g. where the investment is risk- weighted). The accounts Of the ABL’s above mentioned subsidiary companies have been consolidated. However, the investment in these subsidiaries has not been deducted from the capital of ABL. Any restrictions or other major impediments on transfer of funds or regulatory capital within the group. Yes, there are. d) Quantitative Disclosures Since the Capital requirement of ABL has been arrived at both on Solo & Consolidated basis as such capital requirement of above mentioned subsidiaries have not been assessed. 2. Capital structure Qualitative Disclosures a) The composition of regulatory capital is different from accounting capital in line with Basel regime. As per the RBCA Guidelines each bank has to maintain CRAR on Consolidated basis and solo basis as per instructions given by Bangladesh Bank from time to time. The minimum CRAR for the year ended December 31, 2017 was 10%. The regulatory capital under Basel-III is composed of (i) a. Common Equity Tier-1 Capital (CET1), b. Additional T-1 Capital and (ii) Tier-2 capital. The capital structure of ABL consists of Common Equity Tier1 and Tier-2 capital. Common Equity Tier- 1 Capital comprises of paid up Capital, Statutory Reserve, General Reserve and Retained Earnings. 157
  157. Disclosure Under Basel-III Disclosure under Basel-III • During the same period Minimum Capital Requirement (MCR) of the Bank was BDT. 3941.38 Crore and Eligible Capital was BDT. 3975.99 Crore. and other banks or financial institutions. As regards capital charge for Credit Risk, all assets in Banking Book have been risk-weighted strictly based on prespecified weight as determined by Bangladesh Bank as per RBCA guidelines. However, the bank has conducted proper mapping with the grading of Bangladesh Bank for those exposures or claims graded by External Credit Assessment Institution (ECAI). (Taka in crore) Quantitative Disclosures Solo Consolidated b) Capital requirement for Credit Risk 3366.43 3290.36 c) Capital requirement for Market Risk 178.92 290.46 d) Capital requirement for Operational Risk 396.03 403.46 e) total and Tier- 1 capital ratio 1.00 : .68 1.00 : .68 • For the consolidated group and Yes • For stand alone Yes • f) Capital Conservation Buffer Could not maintain Could not maintain g) Available Capital under Pillar-2 requirement Under process Under process 4. Credit Risk Qualitative Disclosures a) Credit risk is the potential that a bank’s borrower or counterparty fails to meet its obligations in accordance with the agreed terms. Bank is exposed to credit risk from its dealing with or lending to corporate, individuals, Definitions of past due and impaired (for accounting purposes). As per guideline of Bangladesh Bank, All Loans and Advances are grouped into 4 (four) categories namelyContinuous Loan, Demand Loan, Fixed Term Loan and ShortTerm Agricultural Credit & Micro Credit for the purpose of classification. The bank follows Bangladesh Bank circulars and Guidelines related to classification and provisioning to define past due and impairment. General provisions @ 0.25% to 5% under different categories on unclassified loans (standard/SMA) and @ 1% on off balance-sheet exposures, and specific provisions @ 20%, 50% and 100% on classified (substandard/doubtful/bad-loss) loans are made on the basis of instructions contained in BRPD Circular/s. The summary of some objective criteria for loan classification and provisioning requirement is as follows: • During the same period Minimum Capital Requirement (MCR) of the bank was BDT. 3941.38 Crore and Eligible Capital was BDT. 3975.99 Crore. Loan Classification Type of Facility Sub Standard Overdue Period Doubtful Provision (%) Overdue Period Bad & Loss Provision (%) Overdue Period Provision (%) Continuous Loan & Demand Loan 3 months or more but less than 6 months 20% 6 months or more but less than 9 months 50% 9 months or more 100% Fixed Term Loan More than Tk. 10 lac 3 months or more but less than 6 months 20% 6 months or more but less than 9 months 50% 9 months or more 100% Fixed Term Loan up to Tk. 10 lac 6 months or more but less than 9 months 20% 9 months or more but less than 12 months 50% 12 months or more 100% 5% 36 months or more but less than 60 months 5% 60 months or more 100% Short Term Agricultural 12 months or more but & Micro Credit 158 Annual Report 2018 less than 36 months
  158. Disclosure Under Basel-III Disclosure under Basel-III ABL has no such capital under the criteria of Additional Tier-I capital Tier-2 Capital consists of General Provisions , NonConvertible redeemable Subordinated Bond issued to meet Tier-2 capital, Revaluation Reserve for fixed assets, Securities and Equity instruments. Non-convertible Subordinated Bond Agrani Bank Limited issued Redeemable Non Convertible floating rate Subordinated Bond of BDT 7,000,000,000 (Seven Hundred Crore) for a term of 07 years to strengthen the capital base of the bank on the consent of BSEC vide letter no. BSEC/CI/DS-88/2017/712 dated 26.12.2017 and NOC issued by Bangladesh Bank vide BRPD letter No. BRPD (BFIS)661/14B(P)/2017-8691 dated: 28-12-2017. Of the total issued limit of BDT 7,000,000,000 (Seven Hundred Crore), bank has raised BDT 6,000,000,000 (Six Hundred crore) in 2017 and used the amount as a component under Tier-2 Capital. Capital of the Bank In parallel to business growth, the bank effectively manages its capital to meet regulatory requirement considering the risk profile. Below are few highlights: Quantitative Disclosures (Taka in crore) Particulars Solo Consolidated Paid up capital 2072.29 2072.29 Non-repayable share premium account 0.00 0.00 (A) Statutory reserve 849.61 854.42 General reserve 53.71 59.18 Retained earnings (68.31) (56.23) Minority interest in subsidiaries - - Dividend equalization account - - Others (Any item approved by BB) 5.88 5.88 Sub-total (Common Equity Tier-1 Capital) 2913.18 2935.54 Deductions from Common Equity Tier-1 capital 216.41 216.41 Total Common Equity Tier-I Capital (A) 2696.77 2719.13 (B) Amount of Tier-2 Capital 1795.05 1795.05 Deductions from Tier-2 capital 515.83 515.83 Total Tier-II Capital (B) 1279.22 1279.22 Total regulatory capital (A+B) 3975.99 3998.35 3. Quacy Qualitative Disclosures a) With regard to regulatory capital computation approaches (Minimum Capital Requirement) the bank is following the approach as prescribed by Bangladesh Bank. Below are risk wise capital computation approaches that the Bank is currently applying: • Credit Risk: Standardized Approach (SA) • Market Risk: Standardized Approach (SA) • Operational Risk: Basic Indicator Approach (BIA) Capital of the Bank In parallel to business growth, the bank effectively manages its capital to meet regulatory requirement considering the risk profile. Below are few highlights: Currently Bangladesh Bank prescribed Minimum Capital to Risk Weighted Assets Ratio (CRAR) is 10% whereas as on December, 2018 the CRAR of the Bank was 10.09%. • Approaches followed for specific and general allowances and statistical methods. • The Bank has been following Standardized Approach for assessing the requirement of Capital charge against Credit Risk. The methodology used for this approach is to rate the exposures by the External credit Assessment Institution (ECAI). • Bank’s credit risk management policy: • The Bank has a well structured delegation of credit approved authority for ensuring good governance and better control in credit approval system. Considering the key elements of credit risk, the bank has established Credit Risk Management framework in line with the Bank’s Credit Risk Management (CRM) guideline. This framework defines CRM structure, role, responsibilities and the processes to identify, quantify, and manage risk under the given policy. The CRM guideline is reviewed from time to time to adopt new techniques, policies for measurement, management and mitigation of risks in line with the socioeconomic scenario of the country. ABL’s credit policy is based on the customers need for their business, earning capacity of borrower, the repayment capability of the business, and the value of collateral. The Credit policy of the bank focuses on the economic goal 159
  159. Disclosure Under Basel-III Disclosure under Basel-III of the country and policies adopted by the Government . Bank’s Loan Review Policy is in place to address the problem loans and to initiate appropriate action to protect the Bank’s interest on a timely basis. Off-Balance sheet exposure Region (Figure in crore Taka) Dhaka Region 13,642.77 ABL strictly adheres to the regulatory policies; rules etc. as regard to credit management and are in compliance with regulatory requirements as stipulated by Bangladesh Bank from time to time. The objective of credit risk management is to minimize the different dimension of risks associated with credit exposures and to maintain credit risk profile of the bank within a tolerable range. Chattogram Region 686.10 Khulna Region 115.05 Rajshahi Region 175.06 Barishal Region 12.60 Quantitative Disclosures Mymensingh Region b) Total (gross) Credit Risk Exposure broken down by major types of credit exposure is appeared below: Cumilla Region 25.86 Faridpur Region 6.55 (Figure in crore Taka) Solo Funded Non Funded Total Consolidated 72791.20 72136.97 3453.41 3453.41 76244.61 75580.38 b) Geographical distribution of exposures, broken down to significant areas by major types of credit exposure. Balance Sheet Exposures (Loans & Advances) Dhaka Region Urban Rural Rangpur Region Total Total 423.47 1,149.94 8.08 16,245.48 b) d) Industry or counterparty type distribution of exposures, broken down by major types of credit exposure. Funded Agriculture and Fishery (Figure in crore Taka) 1,622.09 Jute & Jute Goods 930.85 Transport Storage & Communication 593.42 Ship Breakings (Figure in crore Taka) Region Sylhet Region Textile & Readymade Garments Food & Allied Industry Construction & Engineering 96.53 3,273.54 423.87 1,363.08 24,977.04 625.55 25,602.59 Chattogram Region 2,500.68 107.02 2,607.70 Khulna Region 1,889.16 832.27 2,721.43 Rajshahi Region 1,717.87 632.24 2,350.11 Barishal Region 486.01 330.70 816.71 Housing Service 1,129.88 Sylhet Region 425.85 157.35 583.20 Wholesale/Retail Trading 8,775.68 Rangpur Region 1,082.11 529.30 1,611.41 Personal (staff and other personal loan) 5,716.65 Mymensingh Region 1,055.40 578.89 1,634.29 Cumilla Region 553.89 346.04 899.93 Faridpur Region 543.97 203.96 747.93 Sub total 160 Annual Report 2018 35,231.98 4,343.32 39,575.30 Pharmaceuticals and Chemicals 263.40 Leather Sector 470.96 Power Sector 960.66 Professional and Services 361.35 Bank & Other Non-Financial Institution - Electronics & Automobile - Cement & Ceramic - Others 13,593.34 Total 39,575.30
  160. Disclosure Under Basel-III Disclosure under Basel-III 5 . Equities: Disclosures for Banking Book Positions e) Residual Contractual maturity breakdown of the whole portfolio by major types of credit exposure. (Figure in crore Taka) Qualitative Disclosures Repayable on Demand 2,778.16 Not more than 3 months 4,909.09 a) The general qualitative disclosure requirement with respect to equity risk, including: More than 3 month but not more than 1 year 9,917.91 • More than 1 year but not more than 5 years More than 5 years 13,375.43 8,594.71 Total 39,575.30 f) By major industry or counterparty type: • Amount of impaired loans and if available, past due loans, provided separately: TK 5,361.30 crore • Specific Provisions : TK. 2,965.63 crore • General provisions : TK. 322.18 crore • Charges for specific allowances and charge-offs the period : Not Applicable • Gross Non Performing Assets (NPAs): TK. 8,326.93 crore. • Non Performing Assets (NPAs) to Outstanding Loans & advances: 0.18: 1.00 (Figure in crore Taka) Opening balance 5,569.55 Additions during the year 2,482.10 Reductions during the year (1,058.27) Closing balance 6,993.38 Movement of specific provisions for NPAs:   (Figure in crore Taka) Opening balance Recoveries of amount previously Written-off The equity markets are traditionally volatile with a high risk, high returns profile. In an uncertain market place like the present, investors cannot afford to place all hope in only one product. Therefore, it is very important to protect the total investment value by means of diversification. • Movement of Non Performing Assets (NPAs): 2,750.15 77.82 Provisions made during the period 203.42 Provision add back during the year - Transfer to Profit & Loss A/C - Less: Written-off (65.76) Closing balance 2,965.63 ABL has considerable investment in equity shares of various companies and mutual funds and has active participation in the secondary market. In the investment process ABL strictly follows the internal policies and procedures put into place in this respect. ABL also holds unquoted equities intent of which is not trading and the same are shown as banking book asset in the balance sheet. As these securities are not quoted or traded, they are shown in the balance sheet at cost price and no revaluation reserve has been created against these equities. Equity holdings under the banking book are recorded in the books of accounts at cost price. Quantitative Disclosures b) Value of investments disclosed in the balance sheet, as well as the fair value of those investments; for quoted securities, a comparison to publicly quoted share values where the share price is materially different from fair value. Book Value (Quoted Shares) 638.43 crore Market Value (Quoted Shares) 433.73 crore Provisions are kept against publicly quoted shares where the share price is materially different from fair value which is negative. However, no unrealized gain from publicly quoted share is accounted for. In case of publicly quoted shares only realized gain is accounted for. c) The cumulative realized gains (losses) arising from sales and liquidations in the reporting period. Cumulative realized gain arising from sales of shares: Tk. 19.72 crore 161
  161. Disclosure Under Basel-III Disclosure under Basel-III d ) Total unrealized gains/ (losses) Unrealized gain/ (loss) against investment in quoted shares is Tk. (204.70) crore • Total latent revaluation gains/ (losses) : None • Any amounts of the above included in Tier- 2 capital. Not Applicable e) Capital requirements broke down by appropriate equity groupings, consistent with the banks methodology, as well as the aggregate amounts and the type of equity investments subject to any Supervisory provisions regarding regulatory capital requirements. TK. 129.74 crore (Investment in unquoted share Tk. 1037.93 Crore × 1.25 Risk weight × 10% Capital requirement) has been assessed against unquoted equity holdings and shown in MCR. them and to bring the situation back in its favor for any change in interest rate. Quantitative Disclosures b) The increase (decline) in earnings or economic value (or relevant measure used by management) for upward or downward rate shocks according to management methods for measuring IRRBB, broke down by currency (as relevant). The bank has been exercising ‘Stress Testing’ based on guidelines published by Bangladesh Bank to determine the following: 1) Impact on earnings and 2) Impact on Capital requirements. 6. Interest Rate Risk in the Banking Book (IRRBB) Sl. No. Qualitative Disclosures 01. 33777.64 a) The general qualitative disclosure requirement including the nature of IRRBB and key assumptions, including loan pre-payments and behavior of non-maturity deposits, and frequency of IRRBB measurement. Total Risk Sensitive Assets 02. Risk Sensitive Liabilities 27788.05 03. Weighted Average Duration of Assets (DA) 2.15 04. Weighted Average Duration of Liabilities (DL) 1.24 05. Duration Gap (DA-DL) .97 Interest rate risk in the banking book arises from mismatches between the future yield of assets and their funding costs. Interest rate risk is the potential that the value of the on- balance sheet and the off-balance sheet positions of the bank would be negatively affected with the change in the interest rates. Changes in interest rates also affect the underlying value of the bank assets, liabilities and off-balance sheet instruments because the economic value of future cash flows changes when interest rates changes. Assets Liabilities committee (ALCO) monitors the interest rate movement on a regular basis. The bank uses a simple Sensitivity Analysis as well as Duration Gap Analysis to determine its vulnerability against the adverse movement of market variables. For changes in interest rates, currently, ABL is more risk sensitive for its Assets comparable to its liabilities. The Bank is on a continuous process of re -structuring in its assets and liabilities to make a balance between 162 Annual Report 2018 Particulars Amount (Figure in crore Taka) 1% 06. Assumed change in Interest rate 2% 3% Minor Moderate Major Repricing Impact Changes in value of bond portfolio 07. (Under stress testing) 08. Capital after shock 09. CRAR aftershock (%) -357.12 -714.23 -1071.35 3678.77 3381.55 3084.33 9.33 8.58 7.83
  162. Disclosure Under Basel-III Disclosure under Basel-III 7 . Market Risk 8. Operational Risk Qualitative Disclosures Qualitative Disclosures d) Views of the Board of Directors (BOD) on trading/ investment activities. (a) Views of BOD on system to reduce Operational Risk: Market Risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in different market variables, namely i. Interest rate movements; ii) Currency -foreign exchange rate movements; iii) Equity-Stock price movements; iv) Commodity-Commodity price movements The BOD of the Bank views the Market Risk as the risk to the bank’s earnings and capital due to Changes in the market level of interest rates of securities, foreign exchange and equities as well as the volatilities of those changes. Market Risk Management provides a comprehensive and dynamic framework for measuring, monitoring and managing interest rate, foreign exchange as well as equity risk of a bank that needs to be closely integrated with the bank’s business strategy. Methods used to measure market risk The BOD of the bank views risk as Operational Risk those arises from inadequate or failed internal processes, people and systems, or from external causes, whether deliberate, accidental or natural-inherent in all of the Bank’s activities. The policy for operational risks management includes internal control and compliance risk approved by the Board, taking into account relevant guidelines of Bangladesh Bank. The audit committee of the Board directly oversees the internal control and Compliance activities with the overall object of mitigating all operational risks. Performance gap of executives and staff Performance goals are most often attained by executives and staff with a few exceptions. Potential external events No potential external event is expected to expose the Bank to significant operational risk. Policies and processes for mitigating operational risk The Bank uses the standardized (Rule Based) approach to calculate market risk for trading book exposures Market Risk Management system The ABL manages this risk through a chain based processes which are documented, authorized and independent. Transactions, events etc. that are being taken place at the operational level monitored and reported. Decision taken in the monthly meeting of Risk Management and ALCOM is an important tool for managing market risk. ALCOM is in place in the bank to administer the system. If deviations are found, corrective actions are taken to bring the deviation back into the track. Policies and processes for mitigating market risk The only mitigation tool that the Bank uses is the “Marking to Market for mitigating market risk. Besides, a set risk/loss tolerance level is in place to mitigate market risk. An MIS is in place and is used to identify record and assess any kind of operational risk and to generate appropriate regular management reporting. Interest rate risk 37.59 37.59 Since inefficiency is one of the root causes of operational risk, the Bank trains its operational staff on regular basis to make them more effective and efficient for mitigating operational risks. Operational Risk Management Framework has been designed to provide a sound and well-controlled operational environment and thereby mitigate the degree of operational risk. Equity risk 74.13 185.66 Approach for calculating capital charge for operational risk: Foreign exchange risk 67.20 67.20 0.00 0.00 Quantitative Disclosures Solo (b) The capital requirements for (Figure in Crore Taka) Commodity risk Consolidated The Bank uses the Basic Indicator Approach to calculate the capital requirement of its operational risk. 163
  163. Disclosure Under Basel-III Disclosure under Basel-III Quantitative Disclosures (Figure in (b) Capital Requirements for operational risk: Crore Taka) Particulars Capital requirements to ensure proper liquidity management the authority of the bank has set some limits and instruction as follows: Solo 396.03 deposit and loan pricing strategy, transfer pricing, sensitivity of assets and liabilities, key management indicators and overview of the market. 403.46 • LCR should be at 150% to 250% 9. Liquidity Ratio • NSFR should be at 105% to 110% Qualitative Disclosures • ADR should be at 60%-70% (a) Views of BOD to reduce liquidity risk: • MTF at 30% to 45% Liquidity risk can be defined as the possible inability of the bank to meet its financial obligations on account of maturity mismatch between assets and liabilities. The Board of Directors of Agrani Bank Limited always strives to maintain adequate liquidity to ensure that sufficient fund is available for bank’s day to day operations as well as investment of excess liquidity in prudent way to maximize profit and maintain regulatory requirements. • Wholesale Borrowing Limit should be up to 100% of bank’s eligible capital • Commitment Limit should be up to BDT. 6,740.00 crore • MCO should not exceed 18.50% • Prior intimation for withdrawal of deposit • Maturity profile of assets and liabilities • Preparing monthly projected cash flows The Board of Directors of the bank set policy, different liquidity ratio limits and risk appetite for liquidity risk management. Moreover, in every BoD meeting, Treasury Division places the latest liquidity position of the bank before the board to analyze and take decision as per the liquidity requirements of the bank. (c) Policies and processes for mitigating liquidity risk • To develop an extensive liquidity risk management, Agrani Bank Limited has a useful framework for managing liquidity risk under unexpected or unusual situations which could lead to market disruption named the contingency funding plan. Contingency funding plan helps to ensure that bank prudently and efficiently manage routine and extraordinary fluctuations in liquidity. (b) Methods used to measure liquidity risk: The tools used to assess liquidity risks of Agrani Bank Limited are: • Statutory Liquidity Requirement (SLR) • Cash Reserve Ratio (CRR) • Asset to Deposit Ratio (ADR) • Structural Liquidity Profile (SLP) • Maximum Cumulative Outflow (MCO) • Liquidity Coverage Ratio (LCR) • Calculation of Net Stable Funding Ratio (NSFR) • Volatile Liability to total Assets Ratio (b)Liquidity risk management system Agrani Bank Limited has a dedicated committee to deal with Asset-Liability Management risk, called the Asset Liability Committee (ALCOM) comprising of the senior officials of the bank to take important decisions related to liquidity risk management of the bank. The ALCOM generally meets at least once in every month and reviews liquidity requirement, key liquidity ratios, the maturity of assets and liabilities, 164 Annual Report 2018 • Maturity bucket/profile of cash inflow and outflow with net deficit or surplus (GAP) is an effective tool to determine the cash position of the bank. • Structural Liquidity Profile (SLP) is another tool for mitigating liquidity risk which is prepared on monthly basis as per the guidelines of Bangladesh Bank. • Projected foreign currency inflow and outflow is useful tool for managing foreign currency liquidity risk of the bank. Action Plan/Mitigating Policy A. In case of Liquidity shortage (i) Short Term Plan • Borrowing short term fund from inter-bank market
  164. Disclosure Under Basel-III Disclosure under Basel-III • • • • • • • • Avail fund from central bank against Repo (ALS) / Special Repo Avail unused credit facilities from banks /FI’s Sell of Govt. Securities Restriction to purchase of Govt. securities Collecting short Term Deposit Impose margin for L/C opening Impose additional charges, commissions and fees in L/C opening Impose embargo on credit growth (i) Mid Term Plan • • • • • • • Re-fixing interest rate of deposits & advances as per liquidity requirements of the bank Recovery from overdue, classified & written-off loan Introducing new attractive deposit products Strengthen MIS & Reporting line Avail alternative sources of fund Emphasize on export business and inward remittance flow Discourage import business and outward remittance B. In case of Liquidity surplus (i) Short Term Plan • • • • • • • Increase investment in interbank market such as Call Money, Reverse Repo etc. Disburse maximum portion of undisbursed loan Purchase Govt. Securities Lending in short term placement to interbank money market Investment in Bangladesh Bank Reverse Repo Increase import business Expand credit growth (i) Mid Term Plan • Re-fixing interest rate of deposit & advance • • • • • Introducing new attractive loan products Discourage high cost deposit Increase investment in commercial paper, subordinate bond etc. Strengthen MIS & Reporting line Use alternative investment Quantitative Disclosures (Figure in Crore Taka) Particulars December, 2018 Liquidity Coverage Ratio (in %) 382.71% Net Stable Funding Ratio (in %) 102.46% Stock of High quality liquid assets 11907.81 total net cash outflows over the next 30 calendar days 3111.45 Available amount of stable funding 60090.29 Required amount of stable funding 58647.69 10. Leverage Ratio The leverage ratio is introduced into the Basel III framework to supplement risk-based capital requirements to avoid building-up excessive on- and off-balance sheet leverage in the banking system. The leverage ratio is calibrated to act as a credible supplementary measure to the risk based capital requirements. Qualitative Disclosures a) Views of BOD on system to reduce excessive leverage The Board of Directors of ABL primarily views on the growth of on and off balance sheet exposures commensurate with its expected capital growth so that the excessive leverage is reduced. Within the On -balance components, the Board emphasizes on the growth of the prime component i.e. the loans and advances and maintaining good asset quality so as to maximize the revenue as well as the capacity to generate capital internally (in the form of retained earnings) to trade-off the excessive leverage supposed to be caused by asset growth. (b) Policies and processes for managing excessive on and off- balance sheet leverage The bank reviews its leverage position as per the Guidelines on Risk Based Capital Adequacy (revised regulatory capital framework for banks in line with Basel III). In addition, the bank prepares a yearly Risk Appetite statement highlighting key risk areas including growth of assets size (both on and Off balance sheet exposures) of the bank with a desired internal appetite/tolerance limit. Bank also formulates 165
  165. Disclosure Under Basel-III Disclosure under Basel-III “remuneration in line with its HR management strategy/ policy under direct supervision and guidance of Management Committee (MANCOM) of the Bank. Annual Budget Plan and Capital Growth Plan in line with capital base, growth prospects and performance trends for managing excessive on and off balance sheet leverage. (c) Approach for calculating exposure Leverage ratio is calculated by dividing Tier 1 capital with total exposure. The exposure measure for the leverage ratio will generally follow the accounting measure of exposure. In order to measure the exposure consistently with financial accounts, bank also makes the following adjustments: i. On balance sheet exposures are considered for calculation after netting of specific Provisions, intangible assets (Software) and Deferred Tax Assets (e.g. surplus/ deficit on Available for sale (AFS)/ Held-for-trading (HFT) positions). ii. Physical or financial collateral, guarantee or credit risk mitigation purchased is not allowed to reduce onbalance sheet exposure. iii. Netting of loans and deposits is not allowed. Quantitative Disclosures (Figure in Crore Taka) Particulars Leverage Ratio (in %) December 2018 Solo 3.38% Consolidated 3.40% Tier-1 Capital after all regulatory adjustments 2696.77 2719.13 On balance sheet exposure 75949.70 76170.04 Off balance sheet exposure 4035.33 4035.33 total deductions from On and Off Balance sheet exposures 216.41 216.41 79768.62 79988.96 Total exposure (ii) External consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process. (iii) A description of the scope of the Bank’s remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches All Branch Manager, Zonal Head, Circle Head and Senior Management at Head Office. b) Qualitative Disclosures (i) An overview of the key features and objectives of the remuneration policy. 166 At the management level, primarily the HR Planning, Deployment and Operations Division oversees the Annual Report 2018 Agrani Bank Limited follows National Pay Scale/2015 declared by The Government of the Peoples Republic of Bangladesh (ii) Whether the remuneration committee reviewed the firm’s remuneration policy during the past year, and if so, an overview of any changes that was made. a) Qualitative Disclosures The remuneration policy of Agrani Bank Limited in Bangladesh follows National Pay Scale. Foreign subsidiaries and branches also follow National Pay Scale and the policy announced by the Ministry of Foreign Affairs of the Peoples’ Republic of Bangladesh. (iv) A description of the types of employees considered as material risk takers and as senior managers, including the number of employees in each group 11. Remuneration (i) Name, composition and mandate of the main body overseeing remuneration. Agrani Bank Limited follows National Pay Scale/2015. No external advice has been sought for remuneration process. The remuneration policy of Agrani Bank limited follows National Pay Scale/2015 from 1st July 2015. The Government of the Peoples Republic of Bangladesh declared National Pay Scale/15 on 15/12/2015 effect from 1st July, 2015 has also been taken as remuneration policy in Agrani Bank limited. (iii) A discussion of how the bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee. Agrani Bank Limited follows a uniform salary structure
  166. Disclosure Under Basel-III Disclosure under Basel-III for all employee declared by The Government of the Peoples Republic of Bangladesh (e) Qualitative Disclosures (i) An overview of the key risks that the bank takes into account when implementing remuneration measures. (i) A discussion of the bank’s policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance. (c) Qualitative Disclosures Agrani Bank Limited follows a uniform salary structure for all employee declared by the Government of the Peoples Republic of Bangladesh (ii) An overview of the nature and type of the key measures used to take account of these risks; including risks difficult to measure (values need not be disclosed). Not Applicable (iii) A discussion of the ways in which these measures affect remuneration. Not Applicable (iv) A discussion of how the nature and type of these measures has changed over the past year and reasons for the change, as well as the impact of changes on remuneration (ii) A discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and (if permitted by national law) after vesting through claw back arrangements. An overview of the forms of variable remuneration offered (i.e. cash, shares and share-linked instruments and other forms. A discussion of the use of the different forms of variable remuneration and, if the mix of different forms of variable remuneration differs across employees or groups of employees), a description the factors that determine the mix and their relative importance. Agrani Bank Limited follows National Pay Scale/2015 declared by The Government of the Peoples Republic of Bangladesh. (d) Qualitative Disclosures Individual employee (Excluding Head Office) has been imposed a yearly target of Deposit Mobilization, Classified Loan recovery, Fees & commission earnings, increasing Foreign remittance etc. But the target achievement has not affected in the remuneration policy of Agrani Bank limited. (ii) A discussion of how amounts of individual remuneration are linked to bank-wide and individual performance. Remuneration is not directly linked to individual performance as Agrani Bank limited follows National Pay Scale declared by The Government of the Peoples Republic of Bangladesh. (iii) A discussion of the measures the bank will in general implement to adjust remuneration in the event that performance metrics are weak Not Applicable. Not Applicable. (f) Qualitative Disclosures Not Applicable (i) An overview of main performance metrics for bank, toplevel business lines and individuals. The remuneration framework of the national Pay scale describes short term and long term benefits. Short term benefits include salary, festival bonus and incentive bonus as variable payments. Long term benefits include Gratuity, Provident Fund, Superannuation Fund and Leave encashment etc. g) Number of meetings held by the main body overseeing remuneration during the financial year and remuneration paid to its member. There were 32 (Thirty two) meetings of the Management Committee (MANCOM) held during the year 2018. All the members of MANCOM are from the core banking area/ operation of the Bank. No additional remuneration was paid to the members of the Management Committee for attending the MANCOM meeting. h) Qualitative disclosure (a) Number of employees received a variable remuneration award during the financial year. Agrani Bank Limited follows Government remuneration Policy. No variable remuneration policy exists in Agrani Bank Limited. 167
  167. Disclosure Under Basel-III Disclosure under Basel-III (ii) Number and total amount of guaranteed bonuses awarded during the financial year. Agrani Bank Limited follows Government remuneration Policy. No deferred remuneration paid during the financial year. Performance bonuses/Incentives given: 12798 employees (as on 31-12-2017), BDT 118.29 Crore (j) Qualitative disclosure Number of total guaranteed bonus (festival bonus): 02 (Two) total amount of guaranteed bonus (festival bonus): BDT 71.29 Crore Agrani Bank Limited follows the Government’s remuneration Policy. No remuneration award was paid during the financial year. (iii) Number and total amount of sign-on awards made during the financial year. No sign-on award made during the financial year. (iv) Number and total amount of severance payments made during the financial year. No severance payments made during the financial year. (i) Qualitative disclosure Total amount of outstanding deferred remuneration, split into cash, shares and share- linked instruments and other forms. total amount of deferred remuneration paid out in the financial year. Breakdown of amount of remuneration awards for the financial year to show: - Fixed and variable. Not Applicable - Deferred and non-deferred. Not Applicable. Different forms used (cash, shares and share linked instruments, other forms). Not Applicable. (k) Quantitative disclosures Quantitative information about employees exposure to implicit (e.g. fluctuations in the value of shares or performance units) and explicit adjustments (e.g. claw backs or similar reversals or downward revaluations of awards) of deferred remuneration and retained remuneration: Agrani Bank Limited follows National Pay Scale/2015. Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit and/or implicit adjustments. Not Applicable. Total amount of reductions during the financial year due to ex post explicit adjustments. Not Applicable. Total amount of reductions during the financial year due to ex post implicit adjustments Not Applicable. 168 Annual Report 2018
  168. Sustainability Report Shaping a better future 169
  169. Contents Message from MD & CEO 171 Creating Sustainable Value through Banking Operation 172 Sustainability Approach 173-180 Value Added Statement 181 Economic Value Added (EVA) Statement 182-183 Green Banking 184-187 Corporate Social Responsibility (CSR) 188-192 Human Resource Management & Development 193-199 Automation and Digitalization 200-203 Stakeholder Engagement 204-207 Sustainability Scorecard 208 170 Annual Report 2018
  170. Sustainability Report Message from Managing Director and CEO manufacturing being our primary focus areas . In 2018 we have distributed 4,302.74 crore. In distributing SME loans, ABL is the top among the SCBs. ABL founded a subsidiary named “Agrani SME Financing Company Ltd” for the welfare and development of SME sector in Bangladesh. Like previous year ABL remains first in 2018 to earn foreign remittance among state-owned banks. ABL has earned $1515.07 million foreign remittance, the highest among the state-owned banks and the second highest among all banks in Bangladesh. Agrani Bank is accomplishing an important role by providing foreign currency in the national economy and in the development of GDP as well as poverty reduction of rural community, employment generation and creating the opportunity to receive education and healthcare. Mohammad Shams-Ul Islam Managing Director and CEO Dear Stakeholders We live in a time of unprecedented change. In business we face challenges and opportunities that are more critical and complex than ever. The challenges are multifarious and interlinked. While we seek to reverse climate change, conserve water and relieve poverty, we also care about issues such as human rights, banking with human touch and supporting our nation. At the same time, we seek to act more ethically and responsibly, and care about our own well-being and happiness. I am delighted to present before you our ‘Business Sustainability Report 2018’. This is an important report that summarizes the slew of positive changes we made during the year, by following the tenets of financial prudence, operational excellence and enhancing capacity utilization for the Bank, thereby creating long-term value for all of our stakeholders. ABL has introduced ‘Agent Banking’ first ever among the stateowned banks. We have already set up 200 agent booths. By setting up more booths, we will be able to bring greater rural unbanked and under banked population under the banking facilities. We have planned to enlarge our agent banking network in the coming years. ABL is working in line with Government’s vision of making the economy more inclusive which is the demand of time. ABL has been providing banking services in 32 projects under the Social Safety Net Programs of the Government worth Tk. 4,000 crore approximately every year without taking any service charge. We are proud to have enhanced the degree of our support for SMEs again in 2018 through increased lending across a wide range of sectors with agriculture, retail, and small ABL contributes through substantial financing to the infrastructure development. We are the only foreign currency supplier for Padma Bridge construction. The PPP program is part of the Government’s ‘Vision-2021’ goal to ensure a more rapid, inclusive growth trajectory and to better meet the need for enhanced, high quality public services in a fiscally sustainable manner. Implementation of PPP in Bangladesh for the first time, the Bank has invested Tk. 500 crore in GulistanJatrabari ‘Mayor Mohammad Hanif Flyover’. We live in a country where lot many works to be done to deliver banking services to every citizen. To bring unbanked and underbanked people under the umbrella of banking services, Agrani Bank, following the guidelines of Bangladesh Bank, has taken all-out initiatives to open ‘No frill Accounts’ for the farmers, freedom fighters, government allowance– taking men and women, garments workers, physically challenged people, street urchins, natural disaster victims of rural population by simplifying the KYC. The Bank has already opened 10 Tk. Accounts for more than 14 lakh farmers. We believe that a competent workforce is necessary to run banking business efficiently and in sustainable manner. To convert our human resources into human asset, we provided world class training to our employees. For better management analysis of human resources, we introduced IHRM (Integrated Human Resources Management) Software. We provided quality training, covering all aspects of banking industry through the year for the welfare and development of our workforce. For the enhancement of human asset, ABTI (Agrani Bank Training Institute) has covered 10,992 participants by conducting 251 courses/workshops in 2018. We are committed to achieving long-term and stable growth that creates sustainable value for shaping a better future for our stakeholders. I thank you for your strong support and belief in us and at ABL, we look forward to growing together with you. Our success is defined by your well-being and the journey we embarked would go on. Mohammad Shams-Ul Islam Managing Director and CEO 171
  171. Sustainability Report Creating Sustainable Value through Banking Operation Key Highlights-2018 Value Addition through Banking Operation Service to Social Safety Net Program Worth BDT 4 ,035 crore (appx) in 32 Programs P.A. Economic Value Added BDT 3,110.00 million BDT 25,738.60 million Agent Banking Booths Contribution to National Exchequer 200 BDT 6,304.20million Coverage area 62 Districts Deep Pool of Talent and Expertise Established & Integrated Network e-Government Procurement (e-GP) Traning No. of course 251 310 service providing Branches 10,992 Participants 3,10,408 953 Real time manhours online Branches Contribution to CSR BDT 497 million Number of customers 1,14,91,001 Financial Inclusion Number of Accounts 33 million 172 Annual Report 2018 More than 2,197 ATMs Green Financing BDT 402 million
  172. Sustainability Report Sustainability Approach Sustainability Approach As a Leading State Owned Commercial Bank , ABL focuses on creating sustainable value for our stakeholders and aligning our long-term business strategies with their interests. As we continue to deepen our presence across the country, we seek to address the environmental, social and governance (ESG) risks and effects of our operations in a manner consistent with our values. This is also in consonance with our commitment to help ensure a safe, secure and credible banking system. Sustainability Strategy When making business decisions and developing our products and services, we consider our stakeholders’ expectations in appreciation of what is material to them. As part of our commitment to sustainable and responsible growth, we also seek to identify, to assess and to manage ESG risks, challenges, impact and opportunities. Goals (SDGs), the Paris Climate Agreement and the recommendations by the Task Force on Climate-related Financial Disclosures we determined our ‘Sustainability Strategy’. Our sustainability strategy mirrors our business approach of balancing growth with stability. It takes into account the influence and impact our decisions and actions might have on the industry, society and the environment. It was also formulated to ensure we remain economically relevant through managing ESG risks and opportunities practically and in line with market realities. Just as our business strategy hinges on doing what is right for our customers, our sustainability strategy informs our engagement with our stakeholders and how we can help them in their own practices for positive outcomes in the long run. As par the United Nations’ (UN) Sustainable Development Sustainability Pillars Our Sustainability Pillars Sustain Growth Responsibly Keep Customers at the Centre Develop Professionals of Principle Strengthen Community Bonds Create sustainable value for our stakeholders Our Fundamental Strengths Our Values Robust Risk Management and Corporate Governance; Strong Credit Ratings, Capital and Funding Established and Integrated Network Deep Pool of Talent and Expertise Strong corporate identity Create sustainable value for our stakeholders Honourable Enterprising United Committed Create sustainable value for our stakeholders 173
  173. Sustainability Report Corporate Philosophy and Strategic Focus Corporate Philosophy and Strategic Focus As a leading State-owned commercial bank , Agrani Bank Limited believes in the philosophy “ Triple Bottom Line (TBL)” coined by Elkington, the founder of a British consultancy called SustainAbility. TBL consists of three Ps: profit, people and planet. ABL always put emphasis on the people of the country, social and environmental issues and thinks that economic growth is only sustainable if business activities are integrated with social and environmental priorities. In line with this thought ABL’s sustainability focus is to (i) Creating a sustainable business (ii)Ensuring a fair and law-abiding society (iii) Living within environmental limits. th row g s le tab return ners i f o t r P tor e par s e ion Inv rpris loyer vat o n e p Ent l em and in a Ide tivity odel es a s m ge Cre ness roces anta i v p s ad Bu ient ve i c t i Eff para m Co Living within environmental limits. Re Lo plen En gist ish i i W d of cs a ng r as Em te the nd t eso u Su iss ma dis ran rce n s i p Bu stai ons age osa por s t Re ildi n d and me l n ne ng ive t wa de rsi poll ut bl sig ty io ee n n ne rg y 174 Annual Report 2018 Ensuring a fair society Loca lity a nd c Educ omm atio unit n and Rehi ies deve ring l p o over pme Hum ty nt an ri g hts Safe ty an d se Emir curit s an y d go Priv vern acy a ance nd e Heal q u th an ality d we llbei ng Creating a sustainable business
  174. Sustainability Report Sustainability Objectives Sustainability Objectives Sustainability Objectives The UN ’s 17 SDGs set the global agenda for sustainable economic, social and environmental development by 2030 and call for action by the public and the private sectors. At ABL , our sustainability objectives are as follows: Sustain Growth Responsibly Sustainability risk management. Social and environmental considerations in credit evaluation and approval processes. Develop and provide sustainable solutions that enable our customers to make a difference. Keep Customers at the Centre Introduce technology to make banking simpler, smarter and safer. Make banking more accessible and inclusive. Secure our systems and protect customer data and privacy. Sustainability Objectives Develop Professionals of Principle Build high-performing teams and develop individuals who are guided by our corporate values. Embrace diverse abilities and strengths. Develop skills and mindsets for the future. Strengthen Community Bonds Support social development in the areas of art, children and education. Encourage sustainable procurement and supply chain. Manage the impact of our environmental footprint. 175
  175. Sustainability Report Activities for Sustainability Activities for Sustainability Promoting sustainable banking to reach its long term objectives to living within an eco-friendly environment . Every decision will be taken on ABL philosophy. STEP 01 STEP 02 Financing environment friendly project for better future. STEP 03 STEP 04 Backing the society providing scholarship for Educating , donating for Art and Culture, Community Health, Disaster Management ect. 176 Annual Report 2018 Working for ensuring a society through it’s Deposit services, Agro credit Rural Credit , SME credit, Foreign remittance service, Agent Banking services under Govt. Safety Net Program. STEP 05 Ensuring service delivery standard for customer satisfaction.
  176. Sustainability Report Environmental , Social and Governance (ESG) Factors Material ESG Factors Material ESG Factors As we focus on creating sustainable value for our stakeholders, we assess the ESG matters relevant to the banking industry, the implications for the Bank and the insights provided by our internal and external stakeholders. Keeping in mind the significance of the economic, environmental and social impact of our operations and the influence such impact may have on our stakeholders, we set out the following material ESG factors as follows : Material ESG Factor Our Value Creation Our Goal Sustain Growth Responsibly Risk-focused Organizational Culture • Maintaining high standards of corporate governance and a robust risk management framework to protect the interests of our stakeholders. to achieve stable and sustainable growth through informed risk-based decisions. • Remaining nimble to seize business opportunities amid a fast-changing environment. Responsible Lending Regulatory Compliance • Addressing environmental, social and governance issues when making lending decisions. • Maintaining sound risk management systems. • Complying with applicable laws, rules, regulations and standards. to be a responsible financial services provider. to maintain the highest standards of professional and ethical behavior. Sustain Growth Responsibly Economic Value of Our Contributions • Contributing to local economies through taxes, job creation, facilitating trade and industries and building the financial resilience of our stakeholders. to create direct and indirect economic value for our stakeholders. Keep Customers at the Centre Customer Experience Cyber security, Fraud Prevention and Anti-money Laundering • Treating customers fairly based on the principles of integrity, trust and respect. • Creating responsible solutions across our businesses to meet our customers’ needs. • Protecting our customers from cyber threats through robust risk management systems and processes. • Assisting regulators in preventing cyber crime, money laundering, funding of terrorism and dealing with sanctioned persons. to keep the customers’ interests at the heart of all that we do. to uphold our role in maintaining a secure and trusted banking environment. 177
  177. Sustainability Report Material ESG Factors Material ESG Factor Digital Transformation Our Value Creation • Making banking simpler, smarter and saferfor our customers through innovation and technology. Our Goal To ensure that technology enhances our people and service capabilities as we deepen our culture of innovation and enterprise. Develop Professionals of Principle Attracting, Developing and Retaining Talent • Treating our colleagues with care and respect. • Investing in training and career development for our colleagues. To develop valuable and meaningful careers for our colleagues. Develop Professionals of Principle Diversity and Inclusion Workplace Safety, Health and Wellbeing • Hiring from diverse cultural backgrounds, age groups, gender and abilities. To champion more inclusive society. To ensure the physical, mental and • Providing our colleagues with a conducive social welfare of our colleagues. work environment. Strengthen Community Bonds • Supporting social development in the areas of art, children and education. Social Impact • Encouraging innovation and enterprise, and nurturing start-ups and small and medium-sized enterprises. Access to Financial Services Anti-corruption Environmental Footprint Sustainable Procurement 178 Annual Report 2018 To strengthen our social fabric through community-building and helping individuals and organizations realize their potential. • Making banking services and products accessible to target segments of society to meet their needs and expectations. To ensure that banking services and products are available through our comprehensive and diverse network of touch points. • Adopting zero-tolerance approach to bribery and corruption, and ensuring transparency and accountability. To help build a more transparent and accountable global economy. • Managing our resourceswisely by saving energy, reducing carbon emissions and resource consumption, and minimizing waste. • Adopting sustainable procurement practices To play our part in reducing climate change. To purchase from local suppliers where feasible.
  178. Sustainability Report Customer Commitments Customers Customers We are committed to acting in the best interests of our clients and customers , and to helping them meet their financial, business and lifestyle goals by providing the most appropriate solutions and services that suit their needs. As we harness technology to make banking simpler, smarter and safer for our customers, we also ensure that every digital experience is wrapped in the warmth of the human touch. Our Customer Commitments We are guided by four customer commitments built on our values of being Respectable, Enterprising, United and Committed. Honorable Treat You Fairly We maintain the highest professional and ethical standards in all our dealings with our customers. We nurture uncompromising discipline, clarity and courage to do what is right for them and to make every decision in their best interest. United Know You Personally We learn our customers’ preferences and know what matters to them in every interaction. By understanding them better, we anticipate our customers’ needs and offer them the most relevant financial solutions. We believe customer satisfaction is our best policy Enterprising Provide You with the Right Solution We draw on our experience, insight and entrepreneurial spirit to provide our customers with solutions that help them achieve their financial goals and aspirations and manage their daily and future requirements, however simple or complex. Committed Be There When It Matters We always stand by our customers and this is enabled by our long-term business approach, strength and stability. 179
  179. Sustainability Report Employee Commitment Colleagues Colleagues The decisions we make and the actions we take are guided by our values of Honour , Enterprise, Unity and Commitment. This is also expressed in how we care for the professional and personal development of our colleagues across the organization. We are dedicated to building a culture where our colleagues are empowered to make a positive and meaningful difference in what they do for our internal and external stakeholders. We do this by fostering an inclusive, prudent, progressive and high-performing organization that encourages the best of each individual from our team of principled professionals. Our Employee Commitments Our values give us a shared sense of identity and belonging, and our four employee commitments encourage us to keep raising the standards of our behavior and performance in service of our customers. Honorable Do What is Right We do what is right for all of our stakeholders and make decisions that are in the best interests of our organization, our people and our customers. United Make a Real Difference Our unwavering commitment to upholding the ABL’s corporate values is reflected in how passionately our colleagues serve our customers and our communities. We are here to make a real difference to shape our future and to add value to the lives we touch. ABL is always conscious to employee commitment Enterprising Build Meaningful Careers We encourage enterprise and ambition at all levels. We believe in bringing out the best innate in every staff member through professional development and empowering employees to take ownership of their career paths. Committed Lead by Positive Example Our leaders act as role models. They guide teams to take up challenges and to take ownership of their actions. We focus on enabling the success and advancement of individuals as well as teams. 180 Annual Report 2018
  180. Sustainability Report Value Added Statement Value Added Statement To meet certain obligations , the value created by ABL through operational activities and how it was distributed among stakeholders of the Bank is reflected through the value-added statement. A portion of added value has also been retained in the Bank for future investment and expansion. Value Added 2018 Operating revenue Cost of borrowing % 4,822.44 (2,339.40) Provisions Operating expenses excluding Staff cost and Depreciation Total 2017 % 4,171.31 (1,818.32) 481.86 (288.08) (391.04) 2,573.86 (333.46) 1,731.44 Distribution of value addition Employees as remuneration 1,112.29 Government 43% 1,074.12 62% 326.06 13% 268.28 15% Total 1,438.35 56% 1,342.40 78% Retained earnings brought forward from previous years 1067.28 41% 232.80 13% Deferred Tax (79.30) (3)% 23.84 1% Depreciation 147.53 6% 132.39 8% Amount Distribution 2573.86 100% 1,731.44 100% Value Created per Share (BDT) Number of employees at the end of the year 12656 12798 Value created per employee (Crore BDT) 0.20 0.14 Number of Share (Crore) 20.72 20.72 Value Created per Share (BDT) 124.20 83.55 -3% 1% Distribution of Value Addition 5% 8% Employees as remuneration 13% 39% 41% 16% 62% Government Retained earnings brought forward from previous years Deferred Tax Depreciation 12% 2018 2017 181
  181. Sustainability Report Economic Value Added (EVA) Statement Economic Value Added (EVA) Statement Economic Value Added means a value-based financial Performance measure which reflects the absolute amount of shareholders’ value created or ruined during each year. It provides a measurement of a bank’s economic success or failure over a period of time. Such a yardstick is useful to investors who wish to place confidence with the Bank to retain their fund for better earnings as compared to other similar Banks or companies. Economic value added is calculated by taking a bank’s net operating profit after tax, subtracting from it, the cost of average equity. EVA is calculated by applying following formula: EVA = (NOPAT – Cost of average equity) NOPAT NOPAT is the net operating profit after tax which is calculated by deducting the income tax expense from operating profit. BDT in Crore  Particulars 2018 2017 Shareholder's equity at the year end 4,159 4,074 482 (288) 3,677 4,362 Accumulated provision for doubtful losses Equity Average Equity Average Equity is calculated by averaging opening and closing equity of a year BDT in Crore Particulars  2018 2017 Shareholder's equity 3677 4362 Average equity 4020 4596 Cost of Equity BDT Crore 2017 Cost of equity reflects shareholders’ expected return. Eventually this is the opportunity cost for investing their funds in the company. Interest on 5 years Government Treasury Bond plus standard risk premium has been assumed to be cost of equity. Particulars 2018 Operating income 2,483 2,353 Operating expenses 1651 1,540 Operating profit 832 813 Income Tax 247 292 Particulars  NOPAT 585 521 Interest rate on 5 years Government Treasury Bond as on31 December Equity Shareholder’s equity is the total amount of equity at the year-end plus accumulated provision for doubtful losses. 21 0.075 311 175 0.079 21 14.81 8.33 521 Standard Risk premium Cost of equity 585 Economic Value Added per Share NOPAT 274 346 Cost of average equity Average shareholders’ equity Cost of Capital EVA 4596 4020 Number of Shares (in Crore) 2017 2018 182 Annual Report 2018 2018 2017 5.45% 5.94% 2% 2% 7.45% 7.94%
  182. Sustainability Report Economic Value Added (EVA) Statement Economic Value Added (EVA) Statement Economic Value Added Contribution to the Government Exchequer Cost of equity reflects shareholders’ expected return. Eventually this is the opportunity cost for shareholders’ for investing their funds in the company. Interest rate on 5 years Government Treasury Bond plus a standard risk premium has been assumed to be cost of equity. The Government is the most important stakeholder that plays a critical role in the economic development of the country. Being a legitimate and ethical entity, ABL contributes to the National Exchequer when it is necessary, such as deducts income tax, value added tax and excise duty at source as per law from various expenditure, interest on deposit and banking services and deposited to the Government Exchequer. ABL also deducted AIT and deposited to the Government Exchequer on behalf of its employees. ABL made a handsome contribution to National Exchequer of an amount equal to Tk. 630.42 crore and Tk. 598.98 crore respectively in 2018 and 2017. This reflects its fair and consistent commitment towards national contribution. Particulars  2018 2017 NOPAT 585 521 Cost of average equity 274 346 4020 4596 7.45% 7.94% 311 175 21 21 14.81 8.33 Average shareholders' equity Cost of Capital EVA Number of Shares (in Crore) Economic Value Added per Share The Bank’s overall objective is to deliver optimum value to our depositors, employees, shareholders and our business strategy is to gear up towards achieving this. This section covers the value we deliver to our shareholders and the nation at large. The Bank’s policy has been to deliver the best possible value in a manner that is consistent with the highest level of fairness and transparency. For the Bank, it has not been a case of building financial value and increasing profit at any cost, but rather participating in a process of creating value through fair and ethical means. Building sustainable value of all stakeholders is an important goal of the Bank. BDT in Crore Particulars 2018 2017 AIT (Withholding Tax) 28.07 52.18 246.66 218.62 9.37 8.86 TDS of interest on deposit 230.70 210.54 VAT deducted source and deposited 59.92 52.94 Excise duty deducted and deposited 55.70 55.84 630.42 598.98 Payment of tax on Bank’s income Tax on staff salaries deducted and deposited Total 2017 2018 National Exchequer 300 219 200 100 0 52 28 247 211 231 9 9 AIT Payment of TDS of Tax on staff (Withholding tax on Bank’s interest on salaries Tax) income deposit deducted and deposited 53 60 Vat deducted source and deposited 183
  183. Sustainability Report Green Banking Green Banking Green Banking Global warming also called Green House Effect is a universal issue that calls for an effective global response that is found responsible for alteration of balance in the environment and climate change . In line with global development and response to the global warming, Green banking plays significant roles. The term Green Banking has gained popularity all over the world in recent times. Green Banking is operation of banking activities while giving special attention to social, ecological and environmental factors with the aim of the conservation of nature and natural resources. Green Banking is defined as promoting environmental-friendly practices and reducing your carbon footprint from your banking activities. Green Banking thus involves a two pronged approach. Firstly, Green Banking focuses on the green transformation of internal operations of all banks. It means all the banks should adopt appropriate ways of utilizing renewable energy, automation and other measures to minimize carbon footprint from banking activities. Secondly, all banks should adopt environmentally responsible financing, weighting up environmental risks of project, before making financing decisions; and in particular supporting and fostering growth of upcoming green initiatives and projects. Generally Green Banking coverage includes: Sustainable banking, Ethical banking, Green mortgages, Green loans, Green credit cards, Green savings accounts, Green checking accounts, Green money market accounts, Mobile banking, Online banking, Remote deposit, Waste Management, Roof Gardening and Green Financing. Bangladesh Bank has been helping the Government in implementing the provisions of key environmental regulations related to the financial sector. From time to time Bangladesh Bank has been issuing environment 184 Annual Report 2018 related circulars and guidelines. Especially, their circular on ‘Policy Guidelines for Green Banking’ in 2011 is a remarkable step on the way to developing Green Banking practices in the financial sector of Bangladesh. A separate guideline on ‘Environmental Risk Management’ by Bangladesh Bank is also in place. In addition, Bangladesh Bank authority introduced refinancing schemes and major activities under the Green Banking for getting the scenario of that; Green banking policy, Green banking unit, Allotment of fund in green banking, Funds for green financing, Mobile banking, On line banking, Internet banking, Green banking budget, Environmental risk rating, Effluent Treatment plant (ETP), ETP related project. ABL’s Green Banking Initiatives As per Bangladesh Bank’s policy guidelines for Green Banking, ABL has formulated and adopt Green Banking policy and strategies. In this regards ABL issued some important Green Banking related circulars. Green Banking Structure: As per Bangladesh Bank’s policy guidelines for Green Banking, ABL has already taken necessary steps to implement the 1st phase, 2nd phase and the 3rd phase to implement environmental friendly banking activities. to carry out Green Banking activities ABLs organizational structure is as follows: Green Banking Committee Green Banking Structure Green Banking Division 1.Green Banking Committee With a view to execute the program, a Green Banking Committee has been formed comprising nine divisions of head office. These divisions are: Rural Credit Division, Industrial Credit Division, SME Credit Division, Card Division, Credit Policy and Credit Risk Management Division, Central Accounts Division, Information Technology and MIS Division, Planning Coordination and Marketing Division, HR Training Research and Development Division.
  184. Sustainability Report Green Banking Green Banking 2 .Formation of Green Banking Division Agrani Bank Limited started its Green Banking activities in the year 2011 by forming a ‘Green Banking Unit’ under its Rural Credit Division. From 9th September 2013, it has been upgraded into a separate and independent division named as ‘Green Banking Division’. As a good corporate citizen, ABL is upholding environmentally responsible practices through designing its’ CSR (Corporate Social Responsibility) activities into green banking practices. The bank has already launched several green financial products to facilitate an eco-friendly financial atmosphere in the country. ABL is going ahead with a forward looking green banking strategy. The Division has taken the following effective measures in order to carry out green banking activities as per Bangladesh Bank’s guidelines. 2.1.Set-up of green branch As a pilot project,Amin Court Corporate branch of Dhaka has been selected for converting it into green branch. Gradually all the branches of ABL will go under green branch. Three branches of maize development project in the districts of Dinajpur, Bogura and Thakurgaon have been surveyed for the purpose of converting them into a green branch. 2.2.Green Office Guideline to adopt and follow in-house green activities by all employees of ABL, ‘Green Office Guideline’ is issued and distributed to all its offices and branches. This would enable the staff-members of ABL for efficient use of electricity, fuel, water paper and to reuse of equipments. In-house green activities or Environmental Management: A number of initiatives have been taken for in-house environment management defining the clean indication for maintaining a green office. The following initiatives are taken in this regard: 01. Use of paper on both sides for internal use. 02. Use of online communication in the best possible manner. 03. Using more daylight instead of electric lights and proper ventilation in lieu of using air conditioning. 04. Use of Eco Font for printing light impression on both sides of the paper. 05. Vedio/Audio conference in lieu of physical travel. 06. Efficient use of printer cartridges, photocopy toner, office stationary, etc. 07. Sharing e-mail instead of paper memos(save paper save trees) 08. Use of solar energy/renewable energy sources 09. Developing Green Office Guide for reducing the information gap/reducing hazards/increasing efficiency/awareness/reducing pollution/ developing green banking for sustainable financing. • Incorporation of Environmental Risk in Core Risk Management (CRM) According to the ERM guidelines of Bangladesh Bank ABL also incorporate environmental risk in the Core Risk Management (CRM) considering EnvRR (Environmental Risk Rating) in the overall credit risk methodology to ensure required justice to the project/business deal. Budget Allocation ABL has approved a significant amount of money for Green banking in their annual budget , which will include (a) Budget for Green Finance (b)Budget for Climate risk fund (c) Budget for marketing & capacity building. ABL has allocate Tk. 500.00million for Green Finance,Tk.40.00 million for Climate risk fund and Tk.10.00 million for marketing & capacity building. BDT in million Year Budget Disbursement 2011 500.00 19.67 2012 500.00 99.21 2013 500.00 22.83 2014 500.00 28.42 2015 500.00 143.15 2016 500.00 147.73 2017 500.00 90.27 2018 500.00 27.91 Green Finance ABL have given preference to Eco-friendly business activities and energy efficient industries. Environmental infrastructure such as renewable energy, clean water supply project,Effluent Treatment (ETP) and project with ETP, solid & hazardous waste disposal plant, bio-fertilizer plant, brick fields having Hybrid Holfman Kiln (HHK) technology are 185
  185. Sustainability Report Green Banking Green Banking encouraged as a part of green financing practices .Up to December 2018 total disbursements of ABL’s loans under green financing in different sectors are as follows: BDT in Lac Sectors Disbursement 2018 2017 1.Solar Panel 258.35 252.29 2.Easy Bike 405.05 394.80 3. Bio Gas 322.52 322.52 2551.63 2507.03 4.HybridHoffman Kiln(HHK)/Tunnel. 5. Varmi-compost 6.Others (ETP) Total 82.46 68.29 404.00 400.00 4662.87 4024.01 Online Banking All the branches of ABL have now internet connectivity which enables the Bank to avail easy use of BACPS (Bangladesh Automated Cheque Processing System), BACH (Bangladesh Automated Clearing House) & BEFTN (Bangladesh Electronic Fund Transfer Network). Online banking is an important element of green banking strategy of ABL which is being started in the bank from 1st July 2010. total number of online branches in ABL is now 952. Green Marketing ABL is marketing products and services based on environmental factors or awareness. Presently we are advertising our product, notice, circular etc. through internet media. ABL’s investment in Green Technology as a part of its sustainability committment Green Awareness and Training Climate Risk Fund A good number of officers and executives have been trained on different Green Banking training programs held in BIBM and ABTI in the year 2013. One program about Training on Trainers (toT) on Green Banking held in BIBM and two programs on ‘Environmental Risk Management’ have been carried by ABTI. Among this Green Banking Division also carrying out some training program in Rajshahi,Bogura and Khulna where about 470 trainees has been trained up in this regards. A climate risk fund of Tk.4 crore has been created at a lower rate of interest/without interest to assist two types of projects one is to assists projects which might be affected due to natural calamities and the other is to promote the projects like forestry, embankment, pure drinking water etc. 186 Annual Report 2018 Present scenario of Green Financing The implementation of green banking in Bangladesh is still in an elementary stage. Banking sector has been facing a
  186. Green Banking number of challenges in implementing this . Some of the challenges are due to the developing nature of the country and include the lack of enforcement of the environmental laws, inability to adopt modern technology from the traditional ones, shifting red industries such as tanneries, pharmaceuticals, chemicals to appropriate location, unawareness of the end users etc. Besides, as a developing country we do not afford to adopt modern technologies abandoning the technologies currently in use. The consumer group in Bangladesh is very vulnerable. They are mostly unaware of green practices and are hesitant to pay extra for cleaning up industrial hazards. Some challenges ABL wants to make farmers happy are banking sector specific and include the reluctance of bank board of directors and top management; lack of awareness and motivation to formulate policy documents, strategic plan, sector specific environmental guidelines, lack of technical hand/skilled manpower in formulating green policies, strategies and other documents etc.Most of the directors and senior people of the bank do not have right attitude and understanding of the concept of green banking. They generally want to perform their responsibility simply by taking environmental clearance certificate which is not an effective measure in most of the cases. Maize Loan program under contract farming system at greater Bogura, Rangpur and Dinazpur district Bangladesh expenses an amount of near twelve and five thousand crore in exporting maize, pulses, spices and oil seeds product. Country may save tens of thousands crore taka if the above agri- products are cultivated broadly in our country. Bangladesh bank has instructed the schedule banks to introduce contract farming system in their credit activities. In the contract farming system, contractor ensures the marketing of the agri- products by supplying the farmers agri- inputs (seed, fertilizer, insecticide etc.) In order to alleviate poverty and unemployment situation in the districts of greater Rangpur, Dinajpur and Bogura, Agrani Bank Ltd. have introduced contract farming system in those areas jointly with Swiss -contract(Katalyst) and EDGE consulting Ltd (NGO). ABL in collaboration with NCC bank have published a training Manual on Maize Cultivation under Contract Farming system.Katalyst handed over the maize loan product to ABL in 2014. ABL is now replicating this program to its different branches. Rate of interest for short-term loan 4% per annum & for CC (Hypo) 11% per annum. The disbursement situation of loans of Maize cultivation under contract farming system is as follows (up to December 2018) Taka in Lac No of Disbursement Recovery Overdue Classified Outstanding Loanee 1052 275.83 1103.49 10.35 - 3142.80 Corporate Social Responsibility (CSR) has become a key 187
  187. Sustainability Report Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) initiatives and an essential tool for the development of the developing countries of the world throughout the globe, which ultimately reflects through its initiatives towards the betterment of the disadvantaged people of a society. Bangladesh Bank officially started encouraging towards mainstreaming CSR in Banks and financial institutions of Corporate Social Responsibility (CSR) has become a key initiatives and an essential tool for the development of the developing countries of the world throughout the globe, which ultimately reflects through its initiatives towards the betterment of the disadvantaged people of a society. Bangladesh Bank officially started encouraging towards mainstreaming CSR in Banks and financial institutions of Bangladesh since June 2008 to achieve the goal of Millennium Development Goals. The objective of MDG was to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality & empower women, reduce child mortality, improve maternal health, combating HIV/AIDS, malaria and other diseases, ensure environmental sustainability & develop a global partnership for development. ABL truly believes that a law-abiding society is prerequisite for a better business environment. to build a better society ABL’s ethical standard is not only meant for maximizing profit, building a society where human dignity and rights receive the highest consideration and evaluation. CSR is the idea by which business can balance profit making activities with activities that give benefits to the society. It involves developing business with a positive relationship to the society in which they operate. A dedication to social responsibilities can actually turn into profits, as the ideas inspire investors to invest and consume to purchase goods and services from the company. Put simply, social responsibility helps companies to develop a good reputation. to provide CSR facilities (Financial help) ABL always gives emphasis/preference on prioritized sector such as some special community or group (the people who are physically challenge, deprived and lagged behind, affected by natural calamities, meritorious but poor), some areas (poverty reduction, human resources development, expansion of education,health & treatment, establishment of ‘Day Care Center’), expansion of history, culture, tradition, sports and special attention to protect environment. Safety Net Program to support the poor and vulnerable, the government of Bangladesh implements a number of public social safety net programs. As a state owned Bank, Agrani Bank Limited provide various activities under this program without service charge/commission. Agrani Bank’s service to Safety Net Program SL. NO. Social Safety Net programs (SSNPs) No. of Service providing Branches Amount (BDT in Crore) 1 Old-Age Allowance 543 345.43 2 Allowance for Widowed 498 83.25 3 Allowance and Stipend for the Physically Challenged Insolvent Citizens 541 95.25 4 Maternity Allowance for Poor Women 278 125.11 5 Honorarium for Freedom Fighters 911 231.41 6 Salary distributed OF MPO Madrasa, School and College 114 2242.41 7 Collection money of Hajj & Zakat Fund 945 0.41 8 Electricity Bill of PDB 211 7.01 9 Electricity Bill of DPDC 171 251.11 10 Electricity Bill of DESCO 5 4.80 11 Electricity Bill of REB 461 108.00 12 Prize Bond Buy-Sell 946 56.10 13 Issue & liquidation of Wage Earners Bond 26 66.00 14 Payment of Army Pension 938 300.00 15 Others 941 181.74 188 Annual Report 2018
  188. Sustainability Report Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) Bangladesh is poised to gradually move from social safety net programs only to social security programs as well. This is because of opportunities emanating from continuing economic growth and increasingly positive democratic political environment. Agrani Bank Limited works to ensure smooth unfolding of a comprehensive social protection system in Bangladesh. Education ABL has been donating a sizeable amount of fund to various educational institutions for the last couple of years. These helps were extended for renovation or construction of building/class rooms of different schools, colleges, universities, libraries etc.; giving stipend to the poor meritorious students; sponsoring various seminars, conferences, convocations, alumni, anniversaries, drama festivals, competitions, training programs; observing important national days etc. With a view to providing a smooth interface between student life and professional life, One of the Students of Rajshahi University is seen in a delightful mood after being awarded “Agrani Bank Limited Gold Madel” ABL offers internship facility to the BBA and MBA passed students of different universities. The interns were granted the opportunities to groom with us in a truly professional, dynamic and challenging corporate environment. ABL has been awarding “ Agrani Bank Gold Medal to Rajshahi University brilliant students. Healthcare Access to healthcare facilities is one of the fundamental rights of every human being. However, most of our people, especially the underprivileged group has little or no access to health care facilities. ABL is committed to assist those poor people who have no way to secure basic treatment Disaster Relief ABL’s lending policies with regard to environmental management are responsive to emergency support needs of people affected by natural and manmade disasters. ABL donated an ambulance to Dhaka Shishu Hospital. Concern for the Environment today our planet is exposed to a severe environmental catastrophe than ever before. ABL’s corporate social responsibility contributes generously 189
  189. Sustainability Report Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) Mr. Mohammad Shams-Ul Islam, Managing Director & CEO of Agrani Bank Limited is distributing warm clothes among the winter affected people. to the development of Green Banking. Protection and nourishing the environment is part of ABL’s investment principle. Environmental issues are taken into account while the Bank is assessing credit proposal for the industrial projects. As a humble effort to reduce environmental pollution, the Bank is financing CNG refueling stations. Besides, most of office vehicles of the Bank have already been converted to CNG fueling system. Concern for Environment Sports Since inception the Bank has been continuously providing support to the football and hockey clubs and tournaments for the promotion of games and sports of the country. ABL has its own football team that has been participating in the national football league relentlessly since independence. In several times the team defeated renowned clubs of the country like Mohammedan, Abahone, Brothers Union etc. The Bank has been able to build a competent cricket team of its own that has been participating in the First Division Cricket League since independence. 2017 -2018 cricket season has been a progressive year for “Agrani Bank Limited Cricket Team”. In this season ABL Cricket Team has been promoted to Premier Cricket League by securing runners up position in First Division Cricket League. Md Azmir, a member of ABL Cricket Team has scored the sole double century in First Division Cricket League history of Bangladesh. A good number of cricketers and footballers are playing in the national and international levels who were once member of ABL sports team. A snapshot of Agrani Bank Taekwondo team with honorable Managing Director & CEO of Agrani Bank Limited Mr. Mohammad Shams-Ul Islam. 190 Annual Report 2018
  190. Sustainability Report Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) Arts and Culture Agrani Bank Limited is always committed to enriching Bengali heritage, art, culture and literature. In the previous years the Bank contributes to different programs and purposes relating to different cultural affairs. From 2011 onward, ABL is sponsoring children book fair at the Bangladesh Shishu Academy premises. In every year, seven eminent writers were awarded Agrani Bank Children Literary Award; a prestigious literary award of the country introduced by ABL since 1981 and is being offered every year. A total of 39 writers and artists were awarded the Agrani Bank-Shishu Academy Shishu Sahitya Puraskar for their contributions in respective fields on 10 March, 2018. The awards were given for the years of 2012 to 2018 under seven categories. Customers and Well-wishers ABL feels proud to provide services to the valued customers without any hidden cost. The Bank serves the customers as business partner. The Bank sincerely strives to improve business relationship with the customers for common benefit. By optimising financial performance at the least cost the Bank protects the interest of customers. The Bank is maintaining a good relationship with the peer business friends for mutual growth and development. The relationship with our business partners is based on reciprocal trust and respect. We transact with them in a fair and transparent way. Poverty Alleviation It is globally accepted that the Non-Government Organizations (NGOs) have been performing a laudable role in poverty alleviation across the world, especially in Bangladesh. With a view to widening the access to finance to the poor and ultra poor community, ABL has been financing NGOs since 1997 at privileged rates of interest. ABL financed NGOs are of various categories and capacities. Such activities also contributed to generation of income and employment as well. A special moment of the Agrani Bank-Shishu Academy Shishu Sahitya Puraskar for 2012 to 2018. Promotion of Crop Production to attain food security of the country, ABL has been in a unique position to provide credit facilities to the farmers at a lower rate of interest since 1977. A huge amount of foreign currency is spent every year to import pulse, oil-seeds, ginger, spices, maize etc. In order to save foreign currency, the Government of Bangladesh encourages our farmers to boost up the production of above crops by introducing rebate rate of interest at 4 percent which is considered the lowest rate of interest among any credit facilities. Promotion of Entrepreneurship The Bank envisages fostering entrepreneurship among the potential, new and small entrepreneurs and generating 191
  191. Sustainability Report Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) employment through financing Small and Medium Enterprises. Keeping the aim in mind, ABL does not run after the so called blue chips towards profit maximization of the Bank. Rather, it always remains stick to the triple bottom line: People, Planet & Profit and focused to the promotion of SMEs. In this way, a lot of entrepreneurs have grown with us through which employment opportunities are created for a huge number of people. Women Empowerment As half of our population is female, a sustainable national progress can’t be attained if women are left aside. Therefore, they should progressively be brought to the mainstream of our development activities. Considering this reality the Bank through its ‘Nari Agrani’ program has been mobilizing credit facilities in industry, service and business sector to the potential women entrepreneurs at a reduced rate of 10 percent interest. ABL’s program for the woman entrepreneurs will gain usual momentum in the days to come. Awareness Building Generation of awareness is a very useful tool to combat social evils, like drug addiction, smoking, pollution, terrorism, over population etc. For this purpose, the Bank has continued financial support to different social organizations who displayed banner, festoon, sticker, display board and use such other communication channels for discouraging drug, smoking, pollution, population growth etc. Other CSR Activities Agrani Bank Limited is always attentive to attain more and more good corporate attributes. So, apart from the exposures mentioned above, ABL’s CSR disclosure includes multi-faceted social activities. ABL has also been indirectly contributing to CSR activities. To support the poor and vulnerable, the Government of Bangladesh implements a number of public social safety net programs. As a state owned Bank Agrani Bank Limited provide various activities under this program without service charge/ commission which information’s are given below: Bangladesh is poised to gradually move from social safety net programs to social security programs as well. This is because of opportunities emanating from continuing economic growth and increasingly positive democratic political environment. Agrani Bank Limited works to ensure smooth unfolding of a comprehensive social protection system in Bangladesh. Agrani Bank Limited works to ensure women empowerment 192 Annual Report 2018
  192. Sustainability Report Human Resource Management & Development Human Resource Accounting ABL recognises human resource is the most valuable asset of an organization. Modern organizations are more conscious about the best utilization of its human resources. Now the top management is facing many challenges arising from globalization, competition, social changes, profitability and sustainability. They can address these challenges with the help of these human resources. The success of any organization depends on the proper, efficient and effective management of the human resources. HR planning division is doing some work in the name of human resource management. The basic work of HR Planning division is to formulate human resource management policy, to maintain the personal file of every stuff and officer, maintain the performance appraisal, make the PRL list and inform to concerned employee in due time, sanction increment, encashment of leave, settlement of retirement benefit, leave sanction inside and outside of Bangladesh, permit higher studies, update the human resource management information system and to verify the freedom fighter’s certificates from the related ministry. Through the approval of board of directors HR division formulated the Agrani Bank Limited service rules, 2008. The decisions we make and the actions we take are guided by our corporate values of Honor, Enterprise, Unity and Commitment. This is also expressed in how we care for the professional and personal development of our colleagues across the organization. We are dedicated to building a culture where our colleagues are empowered to make a positive and meaningful difference in what they do for our internal and external stakeholders. We do this by fostering an inclusive, prudent, progressive and high-performing organization that encourages the best of each individual from our team of professionals. Doing What is Right Our Commitment to Fairplay ABL is committed to building a safe, efficient and inclusive workforce where all colleagues are treated respectfully and professionally and are given equal opportunity based on merit. We promote work-life harmony and build a workplace free from discrimination, bullying or harassment. Our expectations of our people and the policies we expect them to abide by are stated in the ABL Code of Conduct. Upon joining, all new colleagues are informed of, and sign up to, their obligations and rights under this code. Maintaining a Risk-Focused Organizational Culture We are steadfast in maintaining the trust our stakeholders have placed in us. We do this through our focus on valuesled decision making and behavior, and ensuring a strong risk-focused organizational culture. Our comprehensive framework of policies, processes, methodologies and tools help us identify measure, monitor and manage material risks and opportunities faced by the Group. Where applicable, employees’ key performance indicators also include risk control metrics. Ongoing training is an essential part of our efforts to ensure a risk-focused organization. The topics for our training courses include anti-money laundering, countering the financing of terrorism, assessing and addressing operational and security risks, business ethics, core ethics for financial advisers, Fair Dealing ethics, global fraud prevention, financial crime prevention, IT security and cyber risk awareness. Our colleagues also participated in conferences, seminars and workshops to learn more about risk management industry trends and best practices. A photo session of a training program at ABTI. 193
  193. Sustainability Report Human Resource Management & Development Human Resource Accounting Encouraging Employee Feedback We value feedback from our people on our workplace culture and on how well we are upholding our values. We also ensure that our stakeholders have the ability to raise matters of potential concern in a secure manner without fear of adverse consequences through our whistle blowing policy. All reported cases are swiftly investigated and resolved. The status of all whistle blowing cases is tracked by Group Audit and reported to the Audit Committee every quarter. Upholding Human Rights We are committed to supporting internationally-accepted human rights principles, including those relating to nondiscrimination, child labour, forced labour and freedom of association and collective bargaining. Ensuring Freedom of Association We respect our employees’ lawful right to freedom of association and collective bargaining. Our approach is to maintain mutually trusted and respectful relations with employee unions. We hold regular meetings with union representatives to understand and to address their concerns and expectations. The collective bargaining agreements that we have with the unions cover wages and working conditions such as working hours, retirement age and re-employment, shift work, allowances, transport reimbursement, leave benefits, medical benefits, insurance benefits and grievance procedures. that can affect employee productivity and/or otherwise affect the organization’s operational and financial results. Human Resource Accounting Human Resource Accounting (HRA) involves accounting for a company’s management and employees as ‘human assets’ or capital that provide future benefits. Agrani Bank Limited has 952 branches though out the country which have 12,656 persons to perform the operation. The tables given below provide information on total workforce by region, employment type, age analysis, service analysis and gender. Existing Human Capital strength as on 31-12-18 Existing as on 31-12-18 Name of post Managing Director & CEO 1 Deputy Managing Director 4 General Manager (including Head of ICC on contract) 21 Deputy General Manager 106 Chief Medical Officer & others(on contract) 4 Assistant General Manager 302 Senior Principal Officer/Equivalent 908 Principal Officer/Equivalent 1813 Creating a healthy, safe and harmonious workplace is important to us and we have established a Group-wide workplace safety policy and guidelines to identify and to address health and safety risks. Senior Officer/Equivalent 3920 Officer/Equivalent 3598 Clerical 384 Various events Non Clerical 1595 Advancing Workplace Safety and Health Employee engagement throughout 2018, the Bank arranged a number of cultural events and sports events that help in creating stronger employee bonding and engagement. The Bank also arranged various employee engagement programs. Risks Human capital risks can be defined as events and employee behaviors that occur both within and outside the workplace SL. Name of Office Total Employee Male Total 12656 Breakdown of Human Resource as at 31-12-18 Agrani Bank Limited has 12656 employees in which 89% Male and 11% Female. As per designation our Executives portion has 3%, Officer to SPO 81%, Clerical and Non Clerical 16% in 2018. Female Executive Officer to SPO Clerical Non Clerical 1. Dhaka Circle-1 1171 933 238 50 970 31 120 2. Dhaka Circle-2 979 853 126 31 732 48 168 3. Chattogram 947 850 97 24 688 67 168 4. Khulna 1300 1205 95 29 1074 26 171 194 Annual Report 2018
  194. Sustainability Report Human Resource Management & Development Human Resource Accounting SL. Name of Office 5. Rajshahi 6. Total Employee Male Female Executive Officer to SPO Clerical Non Clerical 1212 1121 91 19 1044 29 120 Sylhet 654 607 47 12 575 13 54 7. Barishal 612 566 46 12 535 10 55 8. Rangpur 818 722 96 11 694 12 101 9. Maymensingh 874 786 88 18 756 20 80 10. Cumilla 919 852 67 12 734 23 150 11. Faridpur 501 464 37 8 408 11 74 12. Corporate Branches 1363 1160 203 74 1087 63 139 13. H/O Departments 1306 1135 171 138 942 31 195 12656 11254 1402 438 10239 384 1595 Total Average Salary per Employee Total Employees Total Salaries & Allowance (BDT in million) Average Salary per Employee (BDT in million) 2018 12,656 11,122.89 0.88 2017 12,798 10741.20 0.84 2016 12,672 10065.10 0.79 2015 13,396 6952.70 0.52 2014 13,414 6164.50 0.46 2013 14,005 5312.30 0.38 Year Promotion Promotion has been given in different grades in 2018, to remove the monotonous mood, increasing social prestige, motivating employees and for recognition of a job well done by an employee. The percentage of promotion in 2018, 2017 and 2016 respectively 19%,7% and 12% against total employee. Picture of promotions for last three years SL No Designation 2018 % 2017 % 2016 % 1. General Manager 7 0.29% 12 1.26% 10 0.65% 2. Deputy General Manager 28 1.17% 34 3.57% 29 1.88% 3. Assistant General Manager 68 2.84% 74 7.76% 62 4.02% 4. Senior Principal Officer 295 12.33% 111 11.65% 101 6.55% 5. Principal Officer 394 16.46% 268 28.12% 699 45.30% 6. Senior Officer 252 10.53% 199 20.88% 412 26.70% 7. Officer 5 0.21% 143 15.01% 4 0.26% 8 Clerical 63 2.63% 112 11.75% 187 12.12% 9. Non Clerical 1281 53.53% 0 - 39 2.53% Total 2393 953 1543 195
  195. Sustainability Report Human Resource Management & Development Human Resource Accounting Promotion, Motivation and Reward Scenario in 2018 Designation Male Female Total General Manager 6 1 7 Deputy General Manager 23 5 28 Assistant General Manager 55 13 68 Senior Principal Officer 259 36 295 Principal Officer 335 59 394 Senior Officer 245 7 252 Officer 5 0 5 Clerical Staff 58 5 63 Non Clerical Staff 1263 18 1281 Total 2249 144 2393 Information on the Deceased Age group-wise Human Resources as on 31st December 2018 In the arena of our employee age groups 59% of them are young and energetic to achieve our goals and future achievement. 2018 2017 2016 Assistant General Manager 2 1 1 Senior Principal Officer 9 3 2 Principal Officer 6 8 6 Senior Officer 7 5 14 Officer 9 10 16 Clerical 4 0 3 Non Clerical 14 19 19 Total : 51 46 61 Particulars Number of Employee Revenue Income (Tk. In crore) Revenue per employee Total Expenses (Tk. In crore) Expenses per employee Operating profit (BDT in Crore) Operating profit per employee 2018 12656 2483.00 19.62 1651.00 13.04 832.00 6.57 Male Female <30 816 197 30-50 6580 842 >50 3858 363 Total 11254 1402 Employee Turnover Rate Some of our employees expired in 2018. We express our deepest condolence to the concerned families. We always try to settle the retirement benefit of deceased cases on the top priority basis. Grade Age Group(years) SL. Year Number of Employee who left the bank Total Employees 1 2018 577 12,656 2 2017 758 12,798 3 2016 629 12,672 4 2015 561 13,396 5 2014 811 13,414 Employee’s Financial Contribution The overall position of bank depends on the capability of the employee’s performance year to year. The operating income raised gradually in every year. In 2016 the operating expenses increased Tk. 3.71 lac in respect of 2015 but in current year it remains same. The profit margin has ups and downs year to year due to employee recruitment. In spite of various difficulties in Banking sector our growth rate of profit per employee increased Tk. 1.97 lac in 2017 from that of 2016. 2017 12798 2353.00 18.38 1,540.00 12.03 813.00 6.35 2016 12672 2107.00 16.41 1,525.00 12.03 555.00 4.38 2015 13,396 1992.00 14.87 1,114.00 8.32 878.00 6.55 2014 13,414 1950.00 14.54 876.00 6.53 1,074.00 8.01 HR Information System Agrani Bank Limited is maintaining 12,656 employees. Agrani Bank has an effective HR information system. If the management desires to check the information at a glance of an employee itcan get it easily. HR information is becoming updated every day through HR division. Comparing to other Banks we have a rich HR information system. 196 Annual Report 2018
  196. Sustainability Report Human Resource Management & Development Training and Human Resource Development Action plan for 2018 i. to fill up the vacant post through promotion and direct recruitment, by which we can maintain our productivity & service standard; ii. to ensure the right man in right place in right time for maximizing our profitability; and iii. to settle the unsettled cases of retirement benefit. Training and Human Resource Development Training is an opportunity to build up a skilled and knowledge based human resource of an organization. Training has specific goals of improving capability, capacity, productivity and performance of the executive, officer and employee. A structured training and development program ensures consistent experience and knowledge of human resources. Training is provided i) to ensure that an individual has the necessary skills to perform the current job efficiently; ii) to prepare an individual for a future role within the organization; iii) to refresh knowledge/skills with the latest tools/ techniques; and iv) to meet legal and company specific requirements. With this point of view, Agrani Bank Training Institute (ABTI) was established in 1976 and since then ABTI is entrusted with the responsibility of designing course curriculum, reading materials, and course contents for conducting training for the purpose of enhancing professionalism and administrative efficiency of the executives and officers of the Bank. Agrani Bank Training Institute (ABTI) began its courses in 1976 at 18 Bangabandhu Avenue, Dhaka in a limited space. In 1996 it was shifted to 35/C Nayapaltan, Dhaka in a greater space to accommodate more training courses. Both those spaces were rented building. To provide standard, updated training, upholding our tradition and heritage in 2014 been shifted to 183, Sat Masjid Road, ADC Empire Plaza, (Opposite Star Kabab) at Dhanmondi, Dhaka comprising 3rd to 5th floor purchased space total 45 thousand square feet and started to arrange training courses. Out of these 3 at 3rd floor there are 4 classrooms able to accommodate 200 participants, room of the Director, 6 rooms for faculty members, one VIP room for Chairman of the bank, MD & CEO and other top level executives of the bank, ABTI library and office room. The 4th floor is used for ladies hostel that can accommodate 25 women participants, modern computer lab and central library. The 5th floor is provisioned for residence of 200 male participants, hostel super & guests and dining space cum auditorium. There is a high powered generator; all the rooms are accommodated with air condition, WiFi and modern sound system for class rooms. There is provision for two capsule lifts for ABTI. Many of these works have been finished and the rest is going on. Since its inception in 1976 till 2018, ABTI has covered a total number of 1,09,324 executives/officers/staff under different banners of training through 3,053 courses/ workshops. ABL has covered 10,992 participants by conducting 251 courses/ workshops in 2018 alone. In 2018, 2 management development training courses and workshops were arranged for 67 executives of the bank to develop managerial skill & knowledge. From the year 2009 to 2018 a huge number of probationary officers were included in workforce of ABL. to equip all of them with the banking activities, ABTI undertook comprehensive program both at Dhaka and outside Dhaka. In 2018, Foundation Courses conducted by ABTI are as under: Name of Course Level of Participants No of Course No of Participants Banking Foundation Course Senior Officer 16 638 Banking Foundation Course Promoted Officer 2 100 Apart from the above, by the following ways ABTI organized different courses for enhancing knowledge & skills of existing officers and of those who have completed the banking foundation course: Name of Course Level of Participants No of Course No of Participants Branch Management SO to SPO / B.M / 2nd Officer 2 91 SO to SPO 3 116 SO to SPO 1 49 SO to SPO 1 42 Credit Operation and Management Foreign Trade & Foreign Exchange CMSME 197
  197. Sustainability Report Human Resource Management & Development Training and Human Resource Development Name of Course Level of Participants No of Course No of Participants Laws of Banking SO to SPO 1 38 Islamic Banking & Investment SO to SPO 1 30 Risk management is the key focus for banks. Keeping it in mind, in 2018, ABTI has conducted workshops named & styled as ‘Risk Based Capital Management’ in Banks, which has been designed for executives. Besides this the following workshops related to risk management and other financial issues were conducted: No of No of Level of Participants Course Participants Name of Course Calculation & Capital Adequacy under BASEL-lll including stress testing Core Risk Management SO to SPO AGM /SPO Awareness of ICC Risk Management Through Risk Based Internal Audit, Monitoring & Compliance & DCFCL Foreign Remittance & Anti-Money Laundering 2 1 82 49 Application & Operation of Online banking Software (T-24) 198 SO to SPO SO to SPO Level of Participants Officer & above Annual Report 2018 No of Participants Implementation Officer & of ICT System above 11 820 Computer PC MS Office: Its use in Agrani Bank Ltd. Concern Officer 3 84 Computer Concern Hardware & Basic Officer Troubleshooting 2 56 IT Security Management & Cyber Audit 5 121 2 18 100 1035 No of Course No of Participants 28 829 Level of Participants Concern Officer Outreach Courses ABTI conducted following outreach training courses/ workshops outside Dhaka at training center established on circle offices or zonal offices under supervision of concern circle: No of Courses/ Workshops No of Participants Chattogram 7 384 Khulna 13 628 Rajshahi 9 441 Rangpur 8 406 Sylhet 6 240 Others 29 1469 Venue Credit Policy DGM/AGM & Credit Risk 1 32 Management Moreover, ABTI has organized the following course/ workshops related to Online Banking & Information Technology: Name of Course No of Course Name of Course Internal Training through ABTI The total number of courses and participants increased in 2018 from that of 2017. Statement of male & female participants and internal & guest speakers of different courses/workshops conducted by ABTI on 2018: Category Number of Courses Number of Employees received Training Total 251 Male 9940 Female 1052 Total 10992
  198. Sustainability Report Human Resource Management & Development Training and Human Resource Development Category Total Working hours of training received through in house Training Number of Trainer 310408 Regular Trainer 10 Guest Speaker 181 Total 191 External Training Other than ABTI (Arranged by HRPDOD) Number participants of local & foreign training of different institutes/academies conducted by HRPDOD on 2018: Category Local Foreign Total Number of Courses 179 20 199 Number of Employees received Training Male 272 63 335 Female 26 10 36 Total 298 73 371 6440 1752 8192 21 13 34 Working hours of training received through External Training No. of External Training Institution Countries Traveled 10 Expenditure of previous five years training courses/ workshops conducted by ABTI: Year Total Expenses (BDT Million) 2018 40.83 2017 33.56 2016 34.42 2015 56.38 2014 26.83 2013 19.39 2012 21.01 For the year 2019, a comprehensive need based following five categories training course curriculum has been designed by ABTI and the same has duly been approved by Board of Directors, in which 10,920 participants will be included in 255 courses/workshops: 1. Management development course 2. Foundation course 3. Skill development course 4.Workshop 5. Computer course. In the training program of 2019, emphasis has been given to train up the newly recruited officers by conducting banking foundation course & IT related courses to prevent fraud & forgeries associated with information technology. In this regard, Agrani Bank Training Institute of Dhaka along with Training institutes established outside Dhaka at Chattogram, Rajshahi, Khulna, Rangpur & Sylhet and under processing training institute of Barishal & Cumilla total 7 (seven) outreach centers will conduct different stipulated courses throughout the year in view of inclusion more employees into the training programed. To conduct sessions of training course & workshop honorable Chairman & Directors of Board of Directors, Managing Director & CEO, Deputy Managing Directors, General Managers of ABL take part as guest speakers along with Director & Faculty Member of ABTI. Beside them Experts & learned Deputy General Managers, Assistant General Managers & Senior Principal Officers of Agrani Bank Limited, teachers of different universities, Trainers of BIBM, BBTA & ICAB and Government officers are invited as guest speakers to conduct sessions. Agrani Bank Training Institute has been working hard for developing human resources full of potentiality, creativity, skill, integrity and motivation. We hope ABTI will a unique and exemplary institution regarding quality human resource development in the banking sector. Going forward, the Bank’s success will depend, in part, on its ability to retain, motivate, develop and continue to attract talents with the right skills and experience to help the bank ride over the challenges of the future on the one hand and make the most of the available opportunities on the other. Automation will continue to reshape the workforce now and well into the future. As a control function, the role of HR underwent changes in the recent years. More than ever before, it operates in partnership with the senior management and all business divisions and infrastructure functions. Key to this role has been its continued focus on bringing the Bank’s corporate values and beliefs to the fore through enunciating a longterm vision for the HR function and specific commitments underpinning this vision. 199
  199. Sustainability Report Automation and Digitalization Development in ICT Sector since pre liberation . Many important jobs of the bank are currently automated. The Information Technology and MIS Division of the Bank, responsible for managing automation of banking operations, is well equipped with IBM Mid Range computers, very High End Servers and latest microcomputers and staffed with trained and experienced personnel. The Bank uses its in-house software for processing most of the jobs performed in IT and MIS Division. The major jobs handled in IT and MIS Division are: Development in ICT Sector Information and Communication Technology (ICT) has its direct impact on productivity and competitiveness in both domestic and international markets. We are proud that Agrani Bank was the first among the commercial banks in this country to introduce computer-based technology. It began its journey from 1968, using IBM Main Frame computer. Since then amidst increasingly fierce competition, the efficiency gained and the speed of IT have offered us the opportunity to open up new sources of advanced, innovative products and better customer services. Sufficient allocation is made by the Bank for hardware and software to ensure complete implementation of our ambitious plans for the increased use of ICT and Management Information Systems (MIS). Overall Automation Agrani Bank Limited introduced use of computer technology for automation of its various banking operations a) Inter-branch Transaction Reconciliation. b) Foreign Bank Accounts Reconciliation (Nostro Accounts). c) Consolidation of Statement of Affairs/ Income & Expenditure Statements. d) Personnel System. e) Pay-roll of Head Office Employees. f) Inventory Management etc. Moreover different types of in-house Web Based Software have been made for Head Office superintendence, consolidation of various information along with other necessary jobs performed by the bank. Among them, some of the important software are:i. ‘Integrated On-line MIS- Affairs Consolidation’ software for consolidation of affairs, P/L of all the branches and also for preparing various important reports. ii. ‘Web Based On-line MIS (WMIS)’ software for Head Office superintendence and off-sight supervision of the branches. iii. ‘ISS’ software for reporting ISS statement correctly to the Bangladesh Bank web portal and also for consolidation of the statements of all the branches in Head Office. iv. ‘FEX-Monitor’ software for reporting the information 1000 Year-wise Online Branches 800 600 400 200 0 No. of branches brought under Online Total number of Online Branches after the year 200 Annual Report 2018 2010 2 2 2011 52 54 2012 54 108 2013 53 161 2014 148 309 2015 507 816 2016 118 934 2017 7 941 2018 11 952
  200. Sustainability Report Automation and Digitalization Online Banking of different export and import LC opened by the AD branches of the bank correctly in defined format to the Bangladesh Bank web portal . v. Online CL software (ABL loan) for preparing the classified loan of the bank and to report it to Bangladesh Bank. It is to be noted that, daily recovery statement from the NPL (Non-Performing Loan) has also been included in this software. vi. Moreover, Online Inventory Software for preparing inventory statement along with depreciation calculation and Online closing software for reporting half yearly and annual closing statements have also been prepared. Moreover, Online Bill Collection software for BTCL, KGDCL GAS BILL, DPDC, SGDCL Gas Bill have also been introduced. Using these software, all branches can post the bills collected from the customers of the respective company in their server in real time and amount is credited automatically. NID verification for various banking purpose has also been implemented in Agrani Bank Limited and branches have been given user ID and password to get access in the server of Election Commission. The Bank has a good team of highly skilled manpower both in technical and business areas to handle IT operation deployed in Head Office, Zonal Offices and in Branches. The Bank has recruited a large number of manpower exclusively for ICT operation. Those resources are being deployed in Head Office IT and MIS Division and in Zonal Offices from where they can monitor and control the various ICT operations at the gross root level. The relevant employees are provided with adequate training to cater to all kinds of needs related to ICT. A majority of manpower of the Bank has got IT literacy and training of basic and higher training on IT courses are offered throughout the year. The Bank has formulated its ICT policy as per Bangladesh Bank Guidelines in which proper directives have been provided for each and every operation of the Bank related to ICT every year. Branch Computerization Agrani Bank Limited has grown significantly over the years in branch automation. Till date all the branches became computerized, where they are operating under CBS and different online/offline software are used in various types of work. Most of the banking activities can be carried out using these software. Bank provides continuous training for the users of these software. Now, all the branches are providing computer services with internet connectivity along with ‘Online Foreign Remittance Payment Software’ and Online payment system of Western Union, MoneyGram etc and others also. capable of making instant payment of foreign remittance to the beneficiaries and preparing daily Statement of Affairs and Profit and Loss Statement besides making other day-today correspondences. Online Banking IT-based banking has a major role to play in rendering improved services to the valued customers and stakeholders in today’s competitive banking environment. The Bank has taken various measures for automation of its functions and services. One of the major steps is installation of fully integrated online core Banking Solution (T24 by Temenos). Agrani Bank Limited commenced Online Banking solution among all the state owned banks for the first time and it has the highest number of ‘online’ branches under core banking system. It began in 2010 with two pilot branches and now it has progressed further and as of December 2018, all the branches (951) throughout the country are operating under this software. It should be mentioned that T24 software is rated as number one core banking software all over the world. For this purpose, data center equipped with most modern hardware, database, connectivity and all other facilities was established in Head office. Besides, a Disaster Recovery Site (DRS) was rented in Mohakhali where a true replica of data center is established. The hardware related to data center and DRS has been set up with a capacity to handle all the online branches of the Bank. Again, to handle such a big customer base, Oracle database was chosen. A Wide Area Network (WAN) covering 951 branches was setup to facilitate online services. Two redundant network lines were setup for all these branches. The Core Banking Software (CBS) has four major functional areas. These are: a) Retail Module: All the functionalities of general banking like SB, CD, FDR, SND, APS, ABS, DD, PO/ PS etc. are covered under this module. b) Credit Module: All kinds of credit operation like CC, OD, consumer loan, staff loan are handled using this module. c) Trade Finance: All activities relating to foreign exchange business can be handled under this module. d) Treasury Module: All treasury functions i.e. security, money market, and investment are covered under this module. Also, centralized Head Office GL is incorporated with Treasury Module. All the modules of T24 have been customized as per existing business processes and rules of the Bank considering the guidelines of Bangladesh Bank. For all kinds of automation activities, the Bank has deployed human resources in the major areas from the existing manpower. Primarily, two teams i.e. business team and technical team are working. The business team was formed choosing experts from each and every functional area i.e. general banking, credit, trade finance and treasury. The technical team comprised of the experts of hardware, database, operating system, network, online banking software. For capacity building, they were given adequate training to 201
  201. Sustainability Report Automation and Modernization Electronic Banking make them capable of handling all the activities to run a core banking software smoothly . The Bank has also established a 24 Hours Help Desk in IT & MIS Division to render the operational and technical support to all the online based branches instantly. Within shortest possible time, the product that were not been migrated to T24 software from legacy software will be brought under On-line operation. Moreover, in near future, Introduction of T24 software will be ensured in the services like internet banking, mobile banking etc. and other modern banking facilities to the customers. BACH & BEFTN As part of the plan of Bangladesh Bank for automation of clearing payment system of the country, Bangladesh Automated Clearing House (BACH) was introduced in the bank. The two components of BACH – Bangladesh Automated Cheque Processing System (BACPS) & Bangladesh Electronic Fund Transfer Network (BEFTN) are active in the bank. A total of 400 branches of the bank in 70 clearing areas of the country have been brought under BACPS successfully and there is a plan to bring all the branches under this operation within year 2019. For this purpose, hardware, MICR check scanner and network connectivity have been established in each concerned location. For BACH operation, a sophisticated centralized software has been customized and installed which has facilitated the smooth operation of the system throughout the country. The other component BEFTN has been introduced in all branches of the Bank. As per Bangladesh Bank instruction, only credit operation has been allowed in it. The debit operation will begin very soon. With the introduction of automated clearing system, customer service has improved greatly. BD-RTGS Bangladesh Real Time Gross Settlement (BD-RTGS) is a system where large amount of interbank real time (the actual time during a transection process) fund transfer (both local and foreign currency) are done electronically. As per Bangladesh Bank rules, the originating bank should settle the payment within 30 minutes after getting the payment instruction from the client. On the other hand, the receiving bank needs to credit the respective client’s account within 30 minutes. BD-RTGS system makes it possible in case of bank to bank transection. Bangladesh bank has started ‘RTGS (Real Time Gross Settlement) Go Live’ activity for all the scheduled banks in the country from 29-10-2015. By implementing RTGS, Bangladesh Bank has given the opportunity of real time interbank transaction and its settlement for all the scheduled banks along with the option of transaction in foreign currency, foreign currency exchange (Gross Currency Trading) and treasury bond/bill buying and selling. 202 Annual Report 2018 Integration of a middleware software with T24 software for the implementation of RTGS has been done. The vendor has supplied and established the required middleware software accordingly by which RTGS Inward Message is being received from Bangladesh Bank and Outward Message is also being sent. It will be possible to operate RTGS activities properly in all the On-line branches of the bank with this Web Based “Xchanging” Software. Fund Transfer of minimum BDT 1,00,000.00 and above will be possible through BD-RTGS. As per Bangladesh Bank rules, the clients will be facilitated with RTGS system from 10.00 AM to 04.00 PM. Still now Bangladesh Bank has not fixed any charges yet for fund transfer facility through RTGS. Bangladesh Bank is expecting that RTGS will be a very popular system among the people in the near future. SWIFT Agrani Bank Limited provides SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) facility in its 38 branches to offer services relating to foreign exchange/foreign trade transactions (both import and export) and remittance. e-GP The Government of Bangladesh has introduced e-GP (Electronic Government Procurement) program under CPTU (Central Procurement Technical Unit) of Planning Ministry. Contractors of 2,236 purchasing organizations under 33 ministry and department of the People’s Republic of Bangladesh can participate in e-tendering by depositing their registration fee, renewal fee, tender document fee, bank guarantee etc. from designated 296 branches of the bank all over Bangladesh and more branches will be brought under this process very soon. Proper training on e-GP has been provided to a large number of employees of the bank. The bank has voluntarily participated in e-GP program to meet its commitment to serve the nation. Website Agrani Bank Limited has an informative website containing description of its various products, services, annual accounts, citizen’s charter and other up-to date information about the Bank. The website `www.agranibank.org` serves as a primary source of information of the bank. Current news on recruitment, tender etc. of the Bank can also be found on this website. ATM In order to be up-to-date with the fast advancing information technology, Agrani Bank Limited started ATM (Automated Teller Machine) service in 2002 for the clients named as E-Cash Debit Card. After that our bank is providing customer service by Q-Cash Brand shared ATM Network through IT Consultant Limited (ITCL). At present our customers are enjoying the benefit of 24 hours cash withdrawal, balance query, mini
  202. Sustainability Report Automation and Modernization Agent Banking & Online CIB Reporting statement etc along with other banking facilities from around 2197 ATMs of 31 scheduled banks under Q-Cash shared network. The Board of Directors of the bank has approved installation of 100 ATMs by ABL’s own source & management of which 35 ATMs have been lodged already and the rest are under process. Customers will be able to enjoy services from around 8,500 ATM Booths of 57 scheduled banks along with DBBL, AB Bank Limited, BRAC Bank Limited and The City Bank Limited, which are out of Q-Cash network, when all the Scheduled Banks of the country will be connected with ‘NPSB’ system of Bangladesh Bank. Besides, ABL plans to enrich ATM booth service consisting Visa Card, Master Card and Credit Card facilities. SMS Alert Service SMS Alert service for all amount of deposit, withdrawal, transfer and balance confirmation of the customer’s account has been introduced in 2017. Introduction of Agent Banking Agrani Bank Limited in association with DOER, has planned to extend its financial and banking services to the door of unbanked and under banked areas of Bangladesh through agents, which is termed as ‘Agrani Doer Banking’. The project would run under the ‘Agent Banking Guideline’ that has recently been formulated by Bangladesh Bank in a bid to achieve ‘Financial Inclusion’ goal of the nation. Agent Banking model would help to achieve the following: 1. Lowering transaction costs both for the customers and bank. 2. Help cover a large geographical area with minimum cost. 3. Cutting administrative overhead off. 4. Creating financial awareness. Features of Agent Banking 1. New Account Introduction and distribution of Account opening Form with KYC. 2. Deposit / withdrawal in Accounts. 3. Government Benefits (such as old, widow, disability allowance etc) Distribution. 4. Loan recovery and Disbursement for Agriculture and SME. 5. Installments collection for recurring Deposit in Bank. 6. Utilities bill collection. 7. Salary disbursement for educational, industries, Government and non-government institutes. Agrani Bank Limited, in collaboration with the associated partner ‘DOER’, implemented “Agent Banking” service on a pilot basis in two branches of ABL (Shaistagonj Branch, Hobigonj & Pangsha Branch, Rajbari) successfully. At present Agent Banking Software (Celloscope) integration with Core Banking Software (T-24) is established followed by the guidelines of Bangladesh Bank and the live operation of ‘Agrani Doer Banking’ is continuing in 200 agent locations under around 160 linked branches. The service will be introduced immediately in 143 Upozelas as there’s no branch of our bank in those areas. Moreover the project will also be implemented primarily in Union and District areas in more agent locations depending on the commercial importance and prosperity. It is to be noted that the customers will be able to get the facility of ‘Real Time Transaction’ with ‘Agrani Doer Banking’ service. Distribution of SEQAEP Stipend To inspire the poor yet meritorious students from class 6 to Class 10, Secondary Education Quality and Access Enchantment Project (SEQAEP) jointly financed by ministry of education, the Government of People’s Republic of Bangladesh and the World Bank is being conducted since 1993. Ministry of Education, World Bank and SEQAEP authority supervise this project. Besides distributing stipend to the students, different kinds of incentive awards and financing the development of concerned schools are provided through SEQAEP. Through this project, the Directorate for Secondary & Higher Secondary Education has been giving away stipend to the students enlisted with SEQAEP through 250 branches of Agrani Bank Limited across the country since 1993. The main objective of this project is to ensure that students at Secondary level do not drop out of education. At present, the number of students receiving the benefit under this project is ten lac. By receiving stipend money through bank, the students are getting introduced and used to banking system which brings momentum to the school banking program of ABL. In this project World Bank’s fund for, the stipend money is deposited through Bangladesh Bank to the SEQAEP account maintained with Principal Branch of ABL. to distribute the money directly to the beneficiaries, Principal Branch sends the money through IBCA to the concerned branches through respective Zonal offices. Online CIB Reporting MIS Division of the Bank receives previous months CIB information sent from related branches via zonal offices in online within 10th of the month. MIS Division verifies the accuracy of the information and after consolidating the information sends to Bangladesh Bank in online within 20th of the month. Corporate branches directly send CIB information and inquiry forms to MIS Division. The number of CIB information received by ABL from Bangladesh Bank server and sent to related branches from January to December 2017 are almost 83,500. 203
  203. Sustainability Report Stakeholder Engagement Stakeholder Engagement Stakeholder Engagement Engaging Our Stakeholders At ABL , we believe that constructive stakeholder engagement keeps us abreast of changes, attuned to possibilities and focused on remaining relevant to our stakeholders. It keeps us effective for the long term. This is essential for us to continue meeting the financial needs of our customers.. We continually seek our stakeholders’ views, concerns and expectations through conversations and collaborative initiatives. Our stakeholder engagement approach is presented in the following table. Stakeholder Customers What They Expect How we Meet Their Expectations Our Goals for 2019 • Fair products and • Maintaining the highest • Interactions at • Continue frequency and services professional and branches quality of employee • Reasonable fees ethical standards in all • Face-to-face training sessions • Responsible financial our dealings with our meetings and workshops with advice customers. • Marketing and sharper focus on • Secure transactions • Focusing on both the advertising service excellence and • Protection of data and personal and business campaigns digitalisation privacy financial needs of • Website and social • Extend reach of • Convenient access to our customers when media campaigns Customer Satisfaction, products and services developing our products and channels • Raise quality of • Prompt service and and services. • Events and customer interactions at resolution of complaints • Ensuring that our people seminars are equipped and committed to advise and to act in the best interests of our customers. • Providing our customers with clear and transparent information so that they can make informed financial decisions. • Ensuring access to our banking products and services through our extensive network of customer touch points. 204 How we Engaged Them in 2018 Annual Report 2018 all points of contact
  204. Sustainability Report Stakeholder Engagement Stakeholder Engagement Stakeholder What They Expect How we Meet Their Expectations How we Engaged Them in 2018 Our Goals for 2019 Colleagues • Trust and respect • Career development • Job satisfaction and recognition • Fair employment practices • Work-life harmony • Workplace well-being • Creating a values-based organisational culture • Providing opportunities for training and development to build skills for the digital economy • Empowering our people to take ownership of their career paths • Promoting teamwork and supporting one another to achieve shared goals • Ensuring fair human resource policies are practised • Ensuring transparent and objective performance appraisals, and performance-based rewards and recognition • Enabling colleagues to give back to the community through volunteer initiatives • Offering health and wellness benefits • Maintaining workplace health and safety • topical and regular communication to all staff from the CEO • Online and mobile employee portal with informative, collaborative and social features • HR policies and procedures • Periodic performance reviews • Training and workshops • Transparent communications between management and employees encouraged through an “open door” policy • Sports and recreational activities • Support for people with disabilities • Continue frequent and regular engagement programmes ,various communication channels • Implement initiatives and programmes that fulfil our employee value proposition • Ensure fair and equitable opportunities are open to all colleagues Community • Employment opportunities • Responsible lending and investment • Encouraging strategic investments that drive economic growth and social development • Offering jobs to local talent • Giving back to society through corporate social responsibility (CSR) programmes focused on art, children and education • Integrating ESG considerations into our risk assessment and credit decision processes • Participation in governments’ employment creation initiatives • Deepen and broaden reach of our CSR programmes, building awareness, interest and engagement for areas under focus • Conduct ESG training on responsible financing for relevant roles • University scholarships • Donations • Meet the borrowers and customers 205
  205. Sustainability Report Stakeholder Engagement Stakeholder Engagement Stakeholder What They Expect Governments and Regulators • Highest standards of corporate governance and ethical behaviour • Prevention of financial fraud and money laundering • Countering the financing of terrorism • Maintaining financial stability • Taxes to governments • Supporting the development of local economies and industry 206 Annual Report 2018 How we Meet Their Expectations How we Engaged Them in 2018 • Complying with applicable and current laws, regulations and policies • Maintaining sound risk management systems and processes • Preserving strong capital adequacy levels • Providing regular compliance training for our people • Conducting regular internal and external audits • Developing products and services for startups and smalland medium sized enterprises • Regular meetings and engagement with local authorities • Consultations with regulatory bodies • Annual reports • Audit reports • Electronic Government Procurement Our Goals for 2019 • Maintain level of engagement with equity, fixed income and ESG-focused investment community, including investors, analysts and credit rating agencies, ensuring high standards of corporate governance, transparency and disclosure • Highest standards of corporate governance and ethical behaviour • Prevention of financial fraud and money laundering • Countering the financing of terrorism • Maintaining financial stability • Taxes to governments • Supporting the development of local economies and industry • Complying with applicable and current laws, regulations and policies • Maintaining sound risk management systems and processes • Preserving strong capital adequacy levels • Providing regular compliance training for our people • Conducting regular internal and external audits • Developing products and services for start-ups and small- and mediumsized enterprises • Regular meetings and engagement with local authorities • Consultations with regulatory bodies • Annual reports • Audit reports • Maintain robust two-way engagement with regulators and industry bodies • Participate actively in consultation papers issued by regulators to help shape the regulatory framework • Improve data analytics and automation in compliance oversight tools in line with industry trends
  206. Sustainability Report Stakeholder Engagement Stakeholder Engagement Stakeholder What They Expect How we Meet Their Expectations How we Engaged Them in 2018 Our Goals for 2019 Suppliers • Fair vendor selection process • Ethical conduct • Timely payment • Ensuring integrity in all purchasing decisions • Adhering to agreement terms • Requests for Quotations and Proposals • Vendor briefings • Purchase agreements • Annual reviews • Ensure understanding and compliance of sustainable procurement practices and standards Media • Timely, topical and transparent information on subjects of relevance to the Bank, industry and the communities in which we operate • Prompt and accurate reporting of corporate news such as financial results • Access to senior executives with specific industry expertise for media interviews interviews • Providing regular statements and briefings to update the media and the public on our initiatives and progress • Ensuring prompt and relevant responses to media queries • Ensuring the availability of our spokespersons on topics of relevance to the Group, industry and the communities in which we operate • News releases and media statements • Media conferences • Media briefings • Media interviews • Ongoing engagement sessions with media in person and online • Issuance of research reports and white papers • Maintain frequency and level of engagement with key media partners • Keep media abreast of news relevant to ABL’s stakeholders • Develop deeper understanding of their mediums and constraints Other Financial Institutions, and Industry and Trade Associations • Cooperation and collaboration in addressing the sustainability issues the financial services sector and other sectors face • Participating and contributing actively to industry-wide efforts to ensure the long-term sustainability of the financial services sector and sectors to which our clients belong • Membership, governance and committee positions in industry-wide projects • Participation in, and contribution to, industrywide meetings and initiatives • Conferences and forums • Maintain active engagement to help shape the sustainability agenda and build industry capacity on ESG issues Membership of Associations ABL is active member of a number of industry associations. We hold governance or committee positions in associations such as The Association of Bankers , Bangladesh, The Institute of Bankers, Bangladesh, Bangladesh Foreign Exchange Dealers Association. 207
  207. Sustainability Report Sustainability Scorecard Sustainability Scorecard Sustainability Scorecard Performance Indicators 2018 Customers Number of customers Access to Financial Services Number of Branches Number of ATMS 2017   2016     1,14,91,001 10,155,882       953 941 935 35 96,81,952  35 30 5,500 5,500 Customer Experience and Advocacy     customers compliments     Loans to Agriculture (BDT Crore) 409.30 398.73 Loans Rural Credit 226.78 261.27     12,656 12,798 12,672 Number of Employee(Male)% 89% 89% 90% Number of Employee(Female)% 11% 11% 10% 28 34 38 3,715 4,133 4,332 5% 6% 5%     Medical Consultant Fee(BDT Million) 1.62 1.80 2.00 Medical Expenses(BDT Million) 2.25 3.80 3.10 Sports & Culture Fee(BDT Million) 38.79 29.10 22.80 Transport(BDT Million) 34.81 31.50 33.00 2.40 2.30 2.00 49.68 40.08 24.51     Number of ATMS (Group)   Number of Employee Average Training hours per Head count Training expenditure per Head count (Tk.) Employee attrition% Community Funeral Expenses(BDT Million) Monetary contributions (BDT Million) Environment Office paper consumption (kg) Electricity used (kwh) Water Consumption (m³) 13,010 13040 13280 1,12,24,789 9476769 10033375 50246460 54180000  50230000  Economic Value of Contributions total operating income (BDT Crore) Profit after tax (BDT Crore) Employee compensation and benefits (BDT Crore) Income tax to governments (BDT Crore)   2483 2353 2080 104 676 (697) 1112 1074 1007 326 268 232     305.95 328.42 644.60 Suppliers Total Purchase(BDT Million) 208 Annual Report 2018  
  208. INDEPENDENT AUDITORS ’ REPORT 2018 AUDITED FINANCIAL STATEMENT OF 209
  209. Independent Auditors ’ Report to the Shareholders of Agrani Bank Limited Report on the Audit of the Consolidated and Separate Financial Statements Opinion We have audited the consolidated financial statements of Agrani Bank Limited and its subsidiaries (the “Group”) as well as the separate financial statements of Agrani Bank Limited (the “Bank”), which comprise the consolidated and separate balance sheets as at 31 December 2018 and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Bank give a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2018, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note # 2. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group and the Bank in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and Bangladesh Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matters Without qualifying our opinion, we draw attention to the following matters: 1. As disclosed in notes # 9.1.i and 9.1.ii to the financial statements, the Bank has disclosed the current status of business operation of Agrani Exchange Company Pty Limited, Australia and Agrani Remittance House Canada Inc. 2. The consolidated financial statements of the Group have been prepared with the unaudited financial statements of Agrani Remittance House Canada Inc, Canada fully owned subsidiary of the Bank. 3. As disclosed in notes # 12.9 and 13.5 to the financial statements, the Bank has explained the basis for recognition and measurement of provision for loans & advances and also for calculation of regulatory capital amounts respectively. 4. As disclosed in notes # 13.4 and 13.4 (a) to the financial statements, the Bank has maintained risk-based capital amounting to Tk. 3,998.35 crore (Solo basis Tk. 3,975.99 crore) against the requirement of Tk. 3,984.28 crore (Solo basis Tk. 3,941.38 crore) specified by Bangladesh Bank vide BRPD Circular # 18 dated 21 December 2014 on Guidelines on Risked-Based Capital Adequacy (Revised Regulatory Capital Framework in line with Basel III) as at 31 December 2018. Consequently, this results in a surplus of Tk. 14.07 crore on a consolidated basis and a surplus of Tk. 34.61 crore on Solo basis for Minimum Capital Requirement (MCR) of the Bank. In this regard, we draw your attention to notes # 13.4 and 13.4(a) to the financial statements. The Bank has maintained Capital Conservation Buffer amounting to Tk. 14.07 crore (solo Tk. 34.61 crore) against the requirement of Tk. 747.05 crore (solo Tk. 739.01 crore) specified by Bangladesh Bank vide BRPD Circular # 18 dated 21 December 2014 on Guidelines on Risk-Based Capital Adequacy (Revised Regulatory Capital Framework in line with Basel III) as at 31 December 2018. Consequently, this results in a shortfall of Tk. 732.98 crore on a consolidated basis and Tk. 704.40 crore on solo basis in maintaining Capital Conservation Buffer. 5.In notes # 9.3, 24, 25, 26, 28, 36 to the financial statements, the Bank has disclosed the reasons for not restating the errors made in earlier years. 6.In note # 12.14 to the financial statements, the Bank has made disclosures for keeping provision against Employees’ Superannuation Fund. 7. In Annexure-G of the financial statements, the Bank has disclosed the addition and disposal of fixed assets amounting to Tk. 255,364,887 and Tk. 30,914,789 respectively. Out of these addition and disposal of fixed assets, we have not found item wise break down for Tk. 69,948,378 and Tk. 13,859,000 respectively. This is due to not maintaining a proper fixed assets register of the bank. 8. In notes# 7.1.c, 7.3.c and 7.6 to the financial statements, the Bank disclosed the reasons for non-compliance with Memorandum of Understanding (MOU) signed between the Bank and Bangladesh Bank in some cases. 210 Annual Report 2018
  210. Independent Auditors ’ Report to the Shareholders of Agrani Bank Limited Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the consolidated and separate financial statements and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditors’ report. Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements and Internal Controls Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Group and also separate financial statements of the Bank in accordance with IFRSs as explained in note # 2, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. The Bank Companies Act, 1991 a s a m e n d e d u p t o d a t e and the Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries. In preparing the consolidated and separate financial statements, management is responsible for assessing the Group’s and the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group and the Bank or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s and the Bank’s financial reporting process. Auditors’ Responsibilities for the Audit of the Consolidated and Separate Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: a) Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group and the Bank to cease to continue as a going concern. e) Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation. f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 211
  211. Independent Auditors ’ Report to the Shareholders of Agrani Bank Limited Report on other Legal and Regulatory Requirements In accordance with the Companies Act, 1994, the Bank Company Act, 1991 a s a m e n d e d u p t o d a t e and the rules and regulations issued by Bangladesh Bank, we also report that: (i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditors’ Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the financial statements and internal control: (a) internal audit, internal control and risk management arrangements of the Group as disclosed in the financial statements appeared to be materially adequate; (b) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Group and its related entities (other than matters disclosed in note # 2.39 of these financial statements); (iii) the consolidated financial statements of the Group have been prepared on the basis of the financial statements of the Bank and its six subsidiaries, namely, Agrani Exchange House Private Limited, Agrani Remittance House SDN, BHD, Agrani Equity and Investment Limited, Agrani SME Financing Company Limited, Agrani Exchange Company (Australia) Pty. Limited and Agrani Remittance House Canada Inc. The consolidated financial statements of the Group were prepared with the un-audited financial statements of Agrani Remittance House Canada Inc, Canada fully owned subsidiary of the Bank. (iv) in our opinion, proper books of accounts (except as mentioned above) as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books; (v) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; (vi) the consolidated balance sheet and consolidated profit and loss account together with the annexed notes dealt with by the report are in agreement (except as mentioned above) with the books of account and returns; (vii) the expenditures incurred were for the purpose of the Bank’s business for the year; (viii)the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank; (ix) adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery as explained in note#12.9; (x) the information and explanations required by us have been received and found satisfactory (except as mentioned above); (xi) we have reviewed over 80% of the risk-weighted assets of the Bank and spent over 15,000 person-hours; and (xii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank was 11.875% (including Conversion Buffer) of risk weighted assets. The Bank has maintained CRAR of 10.04% (solo 10.09%). This, there is a shortfall of 1.835% (solo 1.785%) of CRAR. MABS & J Partners Chartered Accountants Dated, Dhaka 30 April 2019 212 Annual Report 2018 ACNABIN Chartered Accountants
  212. Agrani Bank Limited Consolidated Balance Sheet As at 31 December 2018 (Amount in Taka) Notes 31 Dec 2018 31 Dec 2017 PROPERTY & ASSETS Cash: Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (including foreign currencies) 3(a) 37,149,897,888 3,920,842,937 33,229,054,951 38,508,318,461 3,849,273,273 34,659,045,188 Balance with Other Banks and Financial Institutions: In Bangladesh Outside Bangladesh 4(a) 125,925,126,736 119,252,493,702 6,672,633,034 77,941,275,858 73,143,717,356 4,797,558,502 690,000,000 2,700,000,000 6(a) 167,913,821,706 98,746,591,974 69,167,229,732 177,732,396,485 145,624,641,722 32,107,754,763 7(a).1 393,391,378,273 390,861,783,324 2,529,594,949 318,558,979,454 315,893,209,721 2,665,769,733 8(a) 9(a) 9.5 14,816,342,610 51,057,410,119 412,754,628 791,356,731,960 15,599,849,954 44,924,335,428 12,501,960 675,977,657,600 10(a) 23,529,390,694 13,871,567,614 11(a) 621,806,026,171 156,959,724,932 8,875,779,435 177,292,217,218 278,678,304,586 104,181,346,592 749,516,763,457 529,991,808,634 119,707,632,172 5,591,284,631 161,043,260,016 243,649,631,815 91,193,554,244 635,056,930,492 13.2 20,722,940,400 20,722,940,400 14(a) 15(a) 15.1(a) 16(a) 20,193,128,242 8,544,161,601 591,791,414 80,000,000 10,977,175,227 19,478,348,103 7,834,464,973 591,791,414 60,000,000 10,992,091,716 1,455,903,925 (562,330,948) 30,323,593 3,291 41,839,968,503 791,356,731,960 1,659,102,598 (974,537,032) 34,869,818 3,221 40,920,727,108 675,977,657,600 Money at Call and Short Notice Investments: Government Others Loans and Advances: Loans, cash credit & overdraft etc. Bills discounted and purchased Fixed Assets including land, building, furniture and fixtures Other Assets Non-banking Assets Total Assets 5 LIABILITIES & CAPITAL Liabilities: Borrowings from Other Banks, Financial Institutions and Agents Deposit and Other Accounts: Current deposits & other accounts Bills payable Savings bank deposits Fixed deposits Other Liabilities Total Liabilities Capital/Shareholders’ Equity: Paid-up capital Reserve: Statutory reserve General reserve Risk Fund Asset revaluation reserve Revaluation & amortization reserve Retained surplus/(deficit) Foreign currency translation reserve Minority interest Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity 12(a) 17(a) 18(a).2 19 20 213
  213. Agrani Bank Limited Consolidated Off Balance Sheet Items As at 31 December 2018 (Amount in Taka) Notes 31 Dec 2017 31 Dec 2018 Contingent Liabilities: Acceptances and endorsements 162,454,689,850 123,337,740,538 Letters of guarantee 21.1(a) 7,649,647,785 7,557,677,293 Letters of credit 21.2(a) 96,613,351,946 72,045,800,727 Bills for collection 21.3(a) 48,385,188,838 21,876,462,987 Other contingent liabilities 21.4(a) 4,489,805,281 6,121,467,531 5,316,696,000 15,736,332,000 Other commitments: - - Documentary credit and short term trade-related transactions - - Liability on account of outstanding forward exchange contract - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - 162,454,689,850 123,337,740,538 Claims against the Bank not acknowledged as debt Total Off-Balance Sheet Items These financial statements should be read in conjunction with the annexed notes 1 to 53. (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Director MABS & J Partners Chartered Accountants Dated, Dhaka 30-April-2019 214 Annual Report 2018 (MD. ANSAR ALI KHAN) Director (DR. ZAID BAKHT) Chairman ACNABIN Chartered Accountants
  214. Agrani Bank Limited Consolidated Profit and Loss Account For the year ended 31 December 2018 (Amount in Taka) Operating income Interest and Revenue income Interest paid on deposits, borrowings etc. Net interest income Investment income Commission, exchange earnings and brokerage Other operating income Notes 31 Dec 2018 31 Dec 2017 23(a) 24(a) 32,336,436,859 (23,386,595,674) 8,949,841,185 12,298,659,214 2,626,117,599 1,374,118,041 16,298,894,854 25,248,736,039 22,541,140,172 (18,033,112,443) 4,508,027,729 15,204,059,765 3,485,732,701 1,111,103,482 19,800,895,948 24,308,923,677 28(a) 29(a) 30(a) 31(a) 32(a) 33(a) 34(a) 35(a) 36(a) 37(a) 11,272,493,280 1,159,409,123 31,906,291 263,160,439 185,572,433 8,112,500 12,074,726 5,028,873 1,487,671,184 2,338,259,974 16,763,688,823 8,485,047,216 8,485,047,216 10,898,046,852 936,038,131 29,077,404 423,266,064 167,805,839 6,933,033 11,574,737 4,262,046 1,338,042,024 1,992,184,689 15,807,230,819 8,501,692,858 1,330,381,639 7,171,311,219 38(a) 39(a).1 39(a).2 39(a).3 39(a).4 1,287,192,231 10,000,000 1,072,000,000 2,471,408,474 4,840,600,705 (5,041,987,720) 394,354,459 (612,171,701) 1,368,500,000 1,118,984,436 (2,772,320,526) 3,644,446,511 9,943,631,745 3,334,313,848 (793,857,820) 2,540,456,028 1,103,990,483 (974,537,032) 17,912,229 147,365,680 2,765,890,309 265,271 237,625,796 3,003,781,376 6,939,850,369 (5,988,291,734) 14,343,301 965,901,936 709,696,628 709,696,628 (562,330,948) 5.33 1,940,438,968 1,940,438,968 (974,537,032) 33.49 25(a) 26(a) 27(a) Total operating income Operating expenses Salary and allowances Rent, taxes, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisement etc. Chief Executive’s salary and allowances Directors’ fees Auditors’ fees Depreciation and repair of bank’s assets Other expenses Total operating expenses Profit/(Loss) before amortization, provision & tax Amortization of valuation adjustment Profit/(Loss) before provision & tax Provision for loans and advances Provision for off balance sheet exposure Provision for diminution in the value of Investment Provision for employees benefits Other provision Total provision Net profit/(loss) before Tax Provision for Tax Current Tax Prior Year Tax Deferred Tax 40 41 Net profit/(loss) after Tax Retained earnings brought forward from previous years Net effect of all items directly recognized in Equity-retained earnings Appropriation: Statutory reserve General reserve 18(a).2 13.3(a) Retained surplus/(deficit) Earnings Per Share (EPS) These financial statements should be read in conjunction with the annexed notes 1 to 53. (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Director Dated, Dhaka 30-April-2019 MABS & J Partners Chartered Accountants (MD. ANSAR ALI KHAN) (DR. ZAID BAKHT) Director Chairman ACNABIN Chartered Accountants 215
  215. 216 Annual Report 2018 Dated , Dhaka 30-April-2019 Director (MS. MAHMUDA BEGUM) General Manager & CFO (MD. AKRAM HOSSAIN) Reserve transferred to retained earning from assets revaluation reserve Held to Maturity (HTM) Held for Trading (HFT) Net gains and losses not recognized in the income statement Issue of share capital Transfer from loan & other provision Net profit for the year Statutory reserve Risk fund Transfer to general reserve Balance as at 31 December 2018 Balance as at 31 December 2017 Balance as at 01 January 2018 Adjustment during the year: Surplus of Amortization of Securities (HTM) Revaluation reserve on investment in Govt. Securities (HFT) Retained surplus Restated Balance Particulars For the year ended 31 December 2018 277,411,709 2,969,348,477 1,455,903,925 1,659,102,598 20,722,940,400 20,722,940,400 709,696,628 8,544,161,601 7,834,464,973 591,791,414 591,791,414 - 591,791,414 591,791,414 General Reserve 20,000,000 80,000,000 60,000,000 - 60,000,000 60,000,000 Risk Fund 10,977,175,227 10,992,091,716 (14,916,489) 10,992,091,716 10,992,091,716 Asset Revaluation Reserve Director (MD. ANSAR ALI KHAN) These financial statements should be read in conjunction with the annexed notes 1 to 53. - - 7,834,464,973 (32,806,558) - (3,417,152,301) 20,722,940,400 (1,790,856,261) Statutory Reserve 7,834,464,973 Revaluation & Amortization Reserve 1,659,102,598 20,722,940,400 Paid up Capital Attributable to Shareholders of Agrani Bank Limited Agrani Bank Limited Consolidated Statement of Changes in Equity (70) 1,103,990,483 (709,696,628) (562,330,948) (974,537,032) 14,102,469 3,809,830 (970,727,202) (974,537,032) Retained Surplus 70 3,291 3,221 - 3,221 3,221 Minority Interest Chairman (DR. ZAID BAKHT) Managing Director & CEO 277,411,709 2,969,348,477 (4,546,295) 1,103,990,483 20,000,000 41,839,965,212 40,920,723,887 (814,020) (32,806,558) (3,417,152,301) 3,809,830 37,474,574,858 40,920,723,887 total (MOHAMMAD SHAMS-UL ISLAM) (4,546,225) 30,323,593 34,869,818 - 34,869,818 Foreign Currency Translation Reserve 34,869,818 277,411,709 2,969,348,477 (4,546,225) 1,103,990,483 20,000,000 41,839,968,503 40,920,727,108 (814,020) (32,806,558) (3,417,152,301) 3,809,830 37,474,578,079 40,920,727,108 total (Amount in Taka)
  216. Agrani Bank Limited Consolidated Cash Flow Statement For the year ended 31 December 2018 (Amount in Taka) Notes A. Cash flows from operating activities Interest receipts in cash 42(a) Interest payments 43(a) Dividend receipts Fees and commission receipts Recovery of loans previously written off Cash payments to employees Cash payments to suppliers Income taxes paid Receipts from other operating activities 44(a) Payments for other operating activities 45(a) Operating profit/(loss) before changing in operating assets and liabilities (Increase)/decrease in operating assets and liabilities Statutory Deposits Purchase/sale of trading securities Loans & Advances to other banks Loans & Advances to customers Other assets Deposits from other banks Deposits from customers Other liabilities account of customers Trading liabilities Other liabilities Net cash from operating activities (A) 31 Dec 2018 31 Dec 2017 41,880,266,634 (22,584,213,028) 601,097,735 2,163,147,234 778,235,486 (11,280,108,639) (297,840,624) (2,474,661,518) 1,371,174,889 (2,976,940,673) 7,180,157,496 31,279,978,408 (19,147,192,104) 604,521,613 1,737,717,956 902,969,108 (10,904,979,885) (884,579,634) (2,271,687,642) 1,109,592,032 (6,512,986,228) (4,086,646,376) 14,464,858,036 (72,093,242,728) (1,116,135,076) 2,463,473,164 89,114,015,670 (1,734,926,994) 31,098,042,072 38,278,199,568 49,484,012,299 (54,168,334,933) 1,934,987,444 (1,582,983,071) 37,882,672,966 2,332,643,361 35,882,998,066 31,796,351,690 B. Cash flows from investing activities Proceeds from sale of securities Payments for purchase of securities Purchase/sale of property, plant & equipment Purchase/sale of subsidiary Net cash from investing activities (B) 958,111,006,613 (962,171,570,564) (217,871,496) (4,278,435,447) 1,265,014,254,120 (1,253,088,108,923) (338,324,813) 11,587,820,384 C. Cash flows from financing activities Receipts from issue of loan capital & debt security Payments for redemption of loan capital & debt security Receipts from/Payments to other borrowings Receipts from issue of ordinary share Dividends paid Net cash from financing activities (C) Net increase in cash and cash equivalents (A+B+C) Effect of exchange rate change on cash and cash equivalent Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 1,000,000,000 9,070,129,091 10,070,129,091 44,069,893,212 548,329,493 119,158,675,019 163,776,897,724 6,000,000,000 3,444,996,596 9,444,996,596 52,829,168,670 1,580,712,935 64,748,793,414 119,158,675,019 47 (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Dated, Dhaka 30-April-2019 Director (MD. ANSAR ALI KHAN) Director (DR. ZAID BAKHT) Chairman 217
  217. 218 Annual Report 2018 Dated , Dhaka 30-April-2019 Director (MS. MAHMUDA BEGUM) General Manager & CFO (MD. AKRAM HOSSAIN) 125,195,162,791 125,195,162,791 3,844,011,713 51,281,684,371 3,103,765,389 65,062,607,524 (28,686,627,368) 65,260,000,000 14,688,234,640 49,090,939,864 129,039,174,504 1 - 3 months 10,677,157,764 1,219,924,000 6,672,633,034 690,000,000 11,873,100 27,781,550,022 36,375,980,156 Up to 01 month 144,986,686,376 148,971,411,376 42,195,093,627 3,984,725,000 53,992,493,702 40,356,554,567 96,817,456,734 191,166,505,003 3 - 12 months 165,157,572,466 165,960,227,466 19,045,768,753 802,655,000 51,251,737,080 133,754,259,139 185,005,996,219 1 - 5 years Director (MD. ANSAR ALI KHAN) Net result of the Liquidity Statement represents the Shareholders’ Equity of the Bank. Borrowing from Bangladesh Bank, other banks, financial institutions Deposits and other accounts Provision and other liabilities Total Liabilities Net Liquidity Gap Liabilities: Assets: Cash in hand Balance with other banks and financial institutions Money at call and short notice Investment Loans and advances Fixed assets including land, furniture and fixtures Other assets Non-banking assets Total Assets As at 31 December 2018 (Asset and Liability Maturity Analysis) Agrani Bank Limited Consolidated Liquidity Statement Chairman (DR. ZAID BAKHT) Managing Director & CEO 621,806,026,171 104,181,346,592 749,516,763,457 41,839,968,503 23,529,390,694 37,149,897,888 125,925,126,736 690,000,000 167,913,821,706 393,391,378,273 14,816,342,610 51,057,410,119 412,754,628 791,356,731,960 (Amount in Taka) total (MOHAMMAD SHAMS-UL ISLAM) 135,184,920,167 101,077,581,203 244,327,354,300 5,441,721,778 8,064,852,930 35,929,973,888 61,605,422,319 85,947,172,514 14,816,342,610 51,057,410,119 412,754,628 249,769,076,078 More than 5 years
  218. Agrani Bank Limited Balance Sheet As at 31 December 2018 (Amount in Taka) Notes 31 Dec 2018 31 Dec 2017 PROPERTY & ASSETS Cash: Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (including foreign currencies) 03 37,115,199,280 3,893,319,059 33,221,880,221 38,440,817,584 3,788,497,676 34,652,319,908 Balance with Other Banks and Financial Institutions: In Bangladesh Outside Bangladesh 04 125,643,681,585 119,099,906,202 6,543,775,383 77,795,816,230 73,143,717,356 4,652,098,874 Money at Call and Short Notice 05 690,000,000 2,700,000,000 Investments: Government Others 06 159,230,242,911 98,746,591,974 60,483,650,937 170,876,123,594 145,624,641,722 25,251,481,872 Loans and advances: Loans, cash credit & overdraft etc. Bills discounted and purchased 07 395,753,029,491 393,223,434,542 2,529,594,949 319,118,598,413 316,452,828,680 2,665,769,733 Fixed assets including land, building, furniture and fixtures Other Assets Non-banking Assets total Assets 08 09 9.5 14,783,579,480 55,524,785,411 412,754,628 789,153,272,786 15,560,736,445 49,417,524,622 12,501,960 673,922,118,848 10 23,529,390,694 13,871,567,614 11 621,927,230,672 157,080,929,433 8,875,779,435 177,292,217,218 278,678,304,586 102,110,537,215 747,567,158,581 530,349,741,838 120,065,565,376 5,591,284,631 161,043,260,016 243,649,631,815 88,966,229,283 633,187,538,735 LIABILITIES & CAPITAL Liabilities: Borrowings from Other Banks, Financial Institutions and Agents Deposit and Other Accounts: Current deposits & other accounts Bills payable Savings bank deposits Fixed deposits Other Liabilities Total Liabilities 12 Capital/Shareholders’ Equity: Paid-up capital 13.2 20,722,940,400 20,722,940,400 Reserve: Statutory reserve General reserve Risk Fund Asset revaluation reserve 14 15 15.1 16 20,090,349,590 8,496,114,213 537,060,150 80,000,000 10,977,175,227 19,384,638,526 7,795,486,660 537,060,150 60,000,000 10,992,091,716 1,455,903,925 (683,079,710) 41,586,114,205 789,153,272,786 1,659,102,598 (1,032,101,411) 40,734,580,113 673,922,118,848 Revaluation & amortization reserve Retained surplus/(deficit) Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity 17 18.1 219
  219. Agrani Bank Limited Off Balance Sheet Items As at 31 December 2018 (Amount in Taka) Notes 31 Dec 2017 31 Dec 2018 Contingent Liabilities: Acceptances and endorsements 21 162,454,689,850 123,337,740,538 Letters of guarantee 21.1 7,649,647,785 7,557,677,293 Letters of credit 21.2 96,613,351,946 72,045,800,727 Bills for collection 21.3 48,385,188,838 21,876,462,987 Other contingent liabilities 21.4 4,489,805,281 6,121,467,531 5,316,696,000 15,736,332,000 Other commitments: - - Documentary credit and short term trade-related transactions - - Liability on account of outstanding forward exchange contract - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - 162,454,689,850 123,337,740,538 Claims against the Bank not acknowledged as debt Total Off-Balance Sheet Items These financial statements should be read in conjunction with the annexed notes 1 to 53. (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Director MABS & J Partners Chartered Accountants Date, Dhaka 30-April-2019 220 Annual Report 2018 (MD. ANSAR ALI KHAN) Director (DR. ZAID BAKHT) Chairman ACNABIN Chartered Accountants
  220. Agrani Bank Limited Profit and Loss Account For the year ended 31 December 2018 (Amount in Taka) Notes Operating income Interest and revenue income Interest paid on deposits, borrowings etc. Net interest income Investment income Commission, exchange earnings and brokerage Other operating income 23 24 25 26 27 Total Operating Income Operating expenses Salary and allowances Rent, taxes, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc. Stationery, printing, advertisement etc. Chief Executive’s salary and allowances Directors’ fees Auditors’ fees Depreciation, Amortization and Repair of bank’s assets Other expenses Total operating expenses Profit/(Loss) before amortization, provision & tax Amortization of valuation adjustment Profit/(Loss) before provision & tax Provision for loans and advances Provision for off balance sheet exposure Provision for diminution in the value of Investment Provision for employees benefits Other provision Total provision 28 29 30 31 32 33 34 35 36 37 38 39.1 39.2 39.3 39.4 Net profit/(loss) before Tax Provision for Tax Current Tax Deferred Tax Expense/(Income) 12.4 9.4 Net profit/(loss) after Tax Retained earnings brought forward from previous years Net effect of all items directly recognized in Equity-retained earnings 18 Appropriation: Statutory reserve General reserve 14 Retained surplus/(deficit) Earnings Per Share (EPS) 18.1 13.3.2 31 Dec 2018 31 Dec 2017 32,315,200,802 (23,394,032,321) 8,921,168,481 12,030,572,753 2,532,705,162 1,345,905,044 15,909,182,959 24,830,351,440 22,530,542,343 (18,183,216,942) 4,347,325,401 14,689,209,079 3,395,581,119 1,097,744,530 19,182,534,728 23,529,860,129 11,122,888,134 1,116,319,894 29,850,288 260,104,708 182,345,360 6,312,500 6,507,639 4,040,000 1,475,315,709 2,304,928,738 16,508,612,970 8,321,738,470 8,321,738,470 1,287,192,231 1,060,000,000 2,471,408,474 4,818,600,705 10,741,234,028 897,670,632 26,738,416 420,293,635 165,432,752 5,643,033 5,687,365 3,636,000 1,323,897,628 1,809,542,130 15,399,775,619 8,130,084,510 1,330,381,639 6,799,702,871 (5,041,987,720) 394,354,459 (712,171,701) 1,360,000,000 1,118,984,436 (2,880,820,526) 3,503,137,765 9,680,523,397 3,260,640,205 (793,049,225) 2,467,590,980 1,035,546,785 (1,032,101,411) 14,102,469 17,547,843 2,682,800,000 238,433,187 2,921,233,187 6,759,290,210 (5,869,630,344) 14,343,402 904,003,268 700,627,553 700,627,553 (683,079,710) 5.00 1,936,104,679 1,936,104,679 (1,032,101,411) 32.62 These financial statements should be read in conjunction with the annexed notes 1 to 53. (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Director Dated, Dhaka 30-April-2019 MABS & J Partners Chartered Accountants (MD. ANSAR ALI KHAN) (DR. ZAID BAKHT) Director Chairman ACNABIN Chartered Accountants 221
  221. 222 Annual Report 2018 Date , Dhaka 30-April-2019 Director (MS. MAHMUDA BEGUM) General Manager & CFO (MD. AKRAM HOSSAIN) Balance as at 01, January 2018 Adjustment during the year: Surplus of Amortization of Securities (HTM) Revaluation reserve on investment in Govt. Securities (HFT) Retained surplus Restated balance Reserve transferred to retained earning from assets revaluation reserve Surplus on account of revaluation of investments in Approved Securities: Held to Maturity (HTM) (Note-17) Held for Trading (HFT) (Note-17) Issue of Share Capital ( Right Share ) Transfer from loan & other provision Net profit for the year General reserve Risk Fund Statutory Reserve Balance as at December 31, 2018 Balance as at December 31, 2017 Particulars For the year ended 31 December 2018 (32,806,558) (3,417,152,301) (1,790,856,261) - 277,411,709 2,969,348,477 1,455,903,925 1,659,102,598 20,722,940,400 20,722,940,400 - 20,722,940,400 20,722,940,400 700,627,553 8,496,114,213 7,795,486,660 7,795,486,660 - - 7,795,486,660 Statutory Reserve - 60,000,000 Risk Fund - 20,000,000 537,060,150 80,000,000 537,060,150 60,000,000 537,060,150 60,000,000 - - 537,060,150 General Reserve Director (MD. ANSAR ALI KHAN) Chairman (DR. ZAID BAKHT) Managing Director & CEO 1,035,546,785 (700,627,553) (683,079,710) (1,032,101,411) (1,032,101,411) 14,102,469 - (1,032,101,411) Retained Surplus 277,411,709 2,969,348,477 1,035,546,785 20,000,000 41,586,114,205 40,734,580,113 37,284,621,254 (814,020) (32,806,558) (3,417,152,301) 40,734,580,113 total (Amount in Taka) (MOHAMMAD SHAMS-UL ISLAM) 10,977,175,227 10,992,091,716 10,992,091,716 (14,916,489) - Asset Revaluation Reserve 10,992,091,716 These financial statements should be read in conjunction with the annexed notes 1 to 53. Revaluation & Amortization Reserve 1,659,102,598 Paid up Capital Agrani Bank Limited Statement of Changes in Equity
  222. Agrani Bank Limited Cash Flow Statement For the year ended 31 December 2018 (Amount in Taka) Notes A. Cash flows from operating activities Interest receipts in cash Interest payments Dividend receipts Fees and commission receipts Recovery of loans previously written off Cash payment to employees Cash payments to suppliers Income taxes paid Receipts from other operating activities Payments for other operating activities Operating profit/(loss) before changing in operating assets and liabilities (Increase)/decrease in operating assets and liabilities Statutory Deposits Purchase/sale of trading securities Loans & Advances to other banks Loans & Advances to customers Other assets Deposits from other banks Deposits from customers Other liabilities account of customers Trading liabilities Other liabilities 42 43 44 45 Net cash from operating activities (A) 31 Dec 2018 31 Dec 2017 41,859,030,577 (22,591,649,675) 508,897,133 2,069,734,797 778,235,486 (11,128,703,493) (294,613,551) (2,466,725,871) 1,342,961,892 (2,876,859,866) 31,269,380,579 (19,150,356,469) 476,040,559 1,647,566,374 902,969,108 (10,746,877,061) (882,206,547) (2,187,959,214) 1,096,233,080 (6,413,029,042) 7,200,307,429 (3,988,238,633) 16,369,615,420 (73,895,274,987) (1,090,321,174) 2,463,473,164 89,114,015,670 (1,576,223,833) 31,385,284,260 38,585,591,689 49,484,012,299 (53,247,475,526) 1,921,509,314 (1,582,983,071) 37,882,672,966 1,657,745,468 36,115,481,450 32,127,242,817 B. Cash flows from investing activities Proceeds from sale of securities Payments for purchase of securities Purchase/sale of property, plant & equipment Purchase/sale of subsidiary Net cash from investing activities (B) 958,111,006,613 (962,171,570,564) (216,140,860) (4,276,704,811) 1,264,749,882,015 (1,253,088,108,923) (327,944,283) 11,333,828,809 C. Cash flows from financing activities Receipts from issue of loan capital & debt security Payments for redemption of loan capital & debt security Receipts from/Payments to other borrowings Receipts from issue of ordinary share Dividends paid Net cash from financing activities (C) Net increase in cash and cash equivalents (A+B+C) Effect of exchange rate change on cash and cash equivalent Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 1,000,000,000 8,657,823,080 9,657,823,080 43,966,709,958 548,329,493 118,945,714,514 163,460,753,965 6,000,000,000 3,444,996,596 9,444,996,596 52,906,068,222 1,580,712,935 64,458,933,357 118,945,714,514 46 (MOHAMMAD SHAMS-UL ISLAM) (MD. AKRAM HOSSAIN) Managing Director & CEO General Manager & CFO (MS. MAHMUDA BEGUM) Director (MD. ANSAR ALI KHAN) Director (DR. ZAID BAKHT) Chairman Dated, Dhaka 30-April-2019 223
  223. 224 Annual Report 2018 Dated , Dhaka 30-April-2019 Director (MS. MAHMUDA BEGUM) General Manager & CFO (MD. AKRAM HOSSAIN) 10,677,157,764 51,281,684,371 3,103,765,389 65,062,607,524 (28,815,485,019) 1,219,924,000 6,543,775,383 690,000,000 11,873,100 27,781,550,022 36,247,122,505 Up to 01 month 125,195,162,791 125,195,162,791 3,844,011,713 65,260,000,000 14,688,234,640 49,090,939,864 129,039,174,504 1 - 3 months 1 - 5 years Director (MD. ANSAR ALI KHAN) 23,529,390,694 621,927,230,672 102,110,537,215 747,567,158,581 41,586,114,205 37,115,199,280 125,643,681,585 690,000,000 159,230,242,911 395,753,029,491 14,783,579,480 55,524,785,411 412,754,628 789,153,272,786 Chairman (DR. ZAID BAKHT) Managing Director & CEO 8,064,852,930 135,306,124,668 99,006,771,826 242,377,749,424 11,791,240,208 35,895,275,280 61,605,422,319 85,947,172,514 14,783,579,480 55,524,785,411 412,754,628 254,168,989,632 More than 5 years (Amount in Taka) total (MOHAMMAD SHAMS-UL ISLAM) 3,984,725,000 802,655,000 144,986,686,376 165,157,572,466 148,971,411,376 165,960,227,466 35,720,578,550 19,045,768,753 53,839,906,202 31,672,975,772 51,251,737,080 99,179,107,952 133,754,259,139 184,691,989,926 185,005,996,219 3 - 12 months Net result of the Liquidity Statement represents the Shareholders’ Equity of the Bank. Liabilities: Borrowing from Bangladesh Bank, Other banks, financial institutions and agents Deposits and other accounts Provision and other liabilities total Liabilities Net Liquidity Gap Assets: Cash in hand Balance with other banks and financial institutions Money at call and short notice Investment Loans and advances Fixed assets including land, furniture and fixtures Other assets Non-banking assets Total Assets As at 31 December 2018 (Asset and Liability Maturity Analysis) Agrani Bank Limited Liquidity Statement
  224. Agrani Bank Limited Notes to the Financial Statements As at and for the year ended 31 December 2018 1 . BACKGROUND INFORMATION 1.1 Establishment and status of the Bank Agrani Bank Limited (the “Bank”) has been incorporated as a Public Limited Company on May 17, 2007 Vide Certificate of Incorporation No. C-66888(4380)/07. The Bank has taken over the business of Agrani Bank (emerged as a Nationalized Commercial Bank in 1972, pursuant to Bangladesh Bank (Nationalization) Order No. 1972 (P.O. # 26 of 1972)) on a going concern Basis through a Vendor Agreement signed between the Ministry of Finance of the Peoples’ Republic of Bangladesh on behalf of Agrani Bank and the Board of Directors on behalf of Agrani Bank Limited on November 15, 2007 with a retrospective effect from July 01, 2007. The Bank’s current shareholdings comprise Government of the Peoples’ Republic of Bangladesh and 09 (Nine) other shareholders nominated by the Government. The Bank has 952 branches and 05 (five) windows that are working under Islamic Banking Unit complying with the rules of Islamic Shariah. 1.2 Nature of Business 1.2.1 Conventional Banking The principal activities of the bank include providing all kinds of commercial banking services to its customers through its branches and SME Centers and electronic delivery channels in Bangladesh. 1.2.2 Islamic Banking Unit The Bank obtained the Islamic Banking Unit permission vide letter no. BRPD(P-3)745(3)/2009-2567 dated July 22, 2009. The Bank commenced operation of its 05 (Five) Islamic windows on February 28, 2010. There are 05 (Five) Islamic Banking Windows which are located at Motijheel Branch, Gulshan Branch, Agrabad Branch, Laldighipar Branch and Maizdee Court Branch. The Islamic Banking Windows are governed under the rules and guidelines of Bangladesh Bank. The principal activities of the windows are to provide all kinds of Islamic Commercial Banking services to its customers. 1.2.3 Off-shore Banking Unit The Bank obtained the Off-shore Banking Unit permission vide letter no# BRPD(P-3)744(27)/2013-1993 dated December 03, 2013. The Off-shore Banking Unit is a separate Banking Unit of Agrani Bank Limited, operates its business through separate counter. The Off-shore Banking Unit is governed under the rules and guidelines of Bangladesh Bank. The Bank commenced the operation of its Off-shore Banking Unit with effect from the year 2013. The Unit is located at Chattogram EPZ Branch, Chattogram. Separate financial statements of Off-shore Banking Unit are also prepared. 1.3 Subsidiaries of the Bank The financial statements of subsidiaries which are included in the consolidated financial statements of the Group have been prepared using uniform accounting policies of the Bank (Parent) for transactions and other events of similar nature. There is no significant restriction on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans and advances. The Bank has 06 (Six) subsidiaries out of which Agrani Equity and Investment Limited & Agrani SME Financing Company Limited have been incorporated in Bangladesh and other four subsidiaries- Agrani Exchange House Private Limited incorporated in Singapore, Agrani Remittance House SDN, BHD. incorporated in Malaysia, Agrani Exchange Company (Australia) Pty Limited incorporated in Australia and Agrani Remittance House Canada, Inc. incorporated in Canada. 1.3.1 Agrani Exchange House Private Limited, Singapore Agrani Exchange House Private Limited is a limited liability company incorporated and domiciled in the Republic of Singapore with the Registration No. 200200048D whose registered office and principal place of business is located at 5A Lembu Road Singapore 208444. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company’s ultimate holding company. The principal activities of the Company are to carry on the remittance business and to undertake and participate in any or all transactions, activities and operations commonly carried on or undertaken by remittance and exchange houses. 1.3.2 Agrani Remittance House SDN. BHD., Malaysia The Company is a private limited liability company, incorporated and domiciled in Malaysia with the Registration No. 706823-M whose registered office is located at Suite 13.01, 13th Floor, tower Block Plaza Pekeliling, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state-owned bank of Bangladesh, which is also the Company’s ultimate holding company. The principal activity of the Company is that of providing remittance services to legal Bangladeshi expatriates working in Malaysia. 225
  225. Notes to the Financial Statements 1 .3.3 Agrani Equity and Investment Limited The Company is a public limited registered under the Companies Act 1994. The Company was incorporated in Bangladesh on 16 March 2010 with Certificate of Incorporation No. C-8357/10 whose registered office is located at 9/D, Dilkusha, Motijheel, Dhaka-1000, Bangladesh. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state-owned bank of Bangladesh, which is also the Company’s ultimate holding company. The principal activities of the Company comprise merchant banking, portfolio management, issue management and underwriting. 1.3.4 Agrani SME Financing Company Limited The Company has been incorporated as a public limited company on 27 October, 2010 vide certificate of incorporation No. C87827/10. The company has taken over the ongoing work of Small Enterprise Development Project (A Norway and Agrani bank funded Project of Ministry of Finance, Bangladesh) on a going concern Basis through a Vendor’s Agreement signed between the Ministry of Finance of the People’s Republic of Bangladesh, the Board of Directors on behalf of the Agrani Bank Limited and the Board of Directors on behalf of the Agrani SME Financing Company Limited on 27 December, 2011. The principal activities of the Company are providing support to Small and Medium Enterprises all over the country through training program on limited Basis and providing loan to the customers. 1.3.5 Agrani Exchange Company (Australia) Pty. Limited The Company is a private limited liability company, incorporated and domiciled in Australia with the Corporation No. 154851546 whose registered office is located at 301 Castlereagh Street, Sydney NSW 2000. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company’s ultimate holding company. The principal activity of the Company is that of providing remittance services to Bangladeshi expatriates working in Australia. On 25 July 2016, the directors of Agrani Exchange Company (Australia) Pty. Limited resolved that the business operation of the Company be terminated and the Company be wound up. Liquidation of Agrani Exchange Company (Australia) Pty. is under process. 1.3.6 Agrani Remittance House Canada, Inc. Agrani Remittance House Canada, Inc. is a limited liability company incorporated and domiciled in Canada with the Corporation No. 819190-5 whose registered office is located at 2962 Danforth avenue, East York, toronto on M4C 1M6. The Company is a wholly-owned subsidiary of Agrani Bank Limited, a fully state owned bank of Bangladesh, which is also the Company’s ultimate holding company. The principal activities of the Company are to carry on the remittance business and to undertake and participate in any or all transactions, activities and operations commonly carried on or undertaken by remittance and exchange houses. Bangladesh Bank has provided the approval letter no BRPD(M)204/08/2018-6156 dated on 16-08-2018 to continue the operation of Agrani Remittance House Canada Inc. for next 6 months, which was expired on 15 February 2019. Subsequently, the Bank has requested to Bangladesh Bank to give approval for continuing the operation of the Remittance House vide letter no FRD/383/19 dated 18 February 2019. Bangladesh Bank yet to reply on the same. 2 Basis of Preparation and Significant Accounting Policies 2.1 Statement of compliance The consolidated financial statements of the group and the financial statements of Agrani Bank Limited (ABL) have been prepared in accordance with International Financial Reporting Standards (IFRSs)) which are the International Finacial Reporting Standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) (Details in Note No-2.43) and the First Schedule (Section-38) of the Bank Companies Act-1991 (as amended in 2013) and Banking Regulation & Policy Department (BRPD) circular no-14, dated 25 June 2003 of Bangladesh Bank. In case, the requirements of Bangladesh Bank differ from those of IFRSs, the requirements of Bangladesh Bank have been complied. ABL has also complied with the requirements of following laws & regulations, as relevant: i) The Bank Company Act 1991 (as amended up to date) ii) The Companies Act, 1994 iii) Rules, regulations and circulars issued by the Bangladesh Bank from time to time iv) Income Tax Ordinance 1984 v) Income Tax Rules 1984 vi) Value Added Tax Act 1991 vii) Value Added Tax Rules 1991 viii) International Financial Reporting Standard (IFRS) ix) International Accounting Standard (IAS) However, material departures from the requirements of IFRSs are as follows: 226 Annual Report 2018
  226. Notes to the Financial Statements (a) Investments in shares and securities IFRS: As per requirements of IFRS 9, classification and measurement of investment in shares and securities will depend on how these are managed (the entity’s business model) and their contractual cash flow characteristics. Based on these factors it would generally fall either under “at fair value through profit or loss account” or under “at fair value through other comprehensive income” where any change in the fair value (as measured in accordance with IFRS 13) at the year-end is taken to profit and loss account or other comprehensive income respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise investments are recognized at cost. (b) Revaluation gain/loss on Government securities IFRS: As per requirement of IFRS 9 where securities will fall under the category of fair value through profit or loss account, any change in the fair value of assets is recognized through the profit and loss account. Securities designated as amortized cost are measured at effective interest rate method and interest income is recognized through the profit and loss account. Bangladesh Bank: HFT securities are revalued on the Basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognized in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortization of discount are recognized in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortized at the year end and gains or losses on amortization are recognized in other reserve as a part of equity. (C) Provision on loans and advances IFRS: As per IFRS 9 an entity shall recognize an impairment allowance on loans and advances based on expected credit losses. At each reporting date, an entity shall measure the impairment allowance for loans and advances at an amount equal to the lifetime expected credit losses if the credit risk on these loans and advances has increased significantly since initial recognition whether assessed on an Individual or collective basis considering all reasonable information, including that which is forwardlooking. For those loans and advances for which the credit risk has not increased significantly since initial recognition, at each reporting date, an entity shall measure the impairment allowance at an amount equal to 12 month expected credit losses that may result from default events on such loans and advances that are possible within 12 months after reporting date. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012, and BRPD circular no. 05 dated 29 May 2013, a general provision @ 0.25% to 5% under different categories of unclassified loans (standard/SMA loans) should be maintained regardless of objective evidence of impairment. And specific provision for sub-standard/doubtful/ bad-loss loans should be made at 20%, 50% and 100% respectively on loans net-off eligible securities(if any). Also, a general provision @ 1% should be provided for off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by IAS 39. (d) Recognition of interest in suspense IFRS: Loans and advances to customers are generally classified at amortized cost as per IFRS 9 and interest income is recognized by using the effective interest rate method to the gross carrying amount over the term of the loan. Once a loan subsequently become credit-impaired, the entity shall apply the effective interest rate to the amortized cost of these loans and advances. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognized as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet. 227
  227. Notes to the Financial Statements (e) Other comprehensive income IFRS: As per ‘IAS 1- Presentation of Financial Statements’, Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a single Other Comprehensive Income statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which are to be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI) Statement. As such the Bank does not prepare the other comprehensive income statement. However, elements of OCI, if any, are shown in the statements of changes in equity. (f) Financial instruments - presentation and disclosure In several cases Bangladesh Bank guidelines categories, recognize, measure and present financial instruments differently from those prescribed in IFRS 9. As such full disclosure and presentation requirements of IFRS 7 and IAS 32 cannot be made in the financial statements. (g) Financial guarantees IFRS: As per IFRS 9, financial guarantees are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor falls to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value plus transaction costs that are directly attributable to the issue of the financial liabilities. The financial guarantee liability is subsequently measured at the higher of the amount of lass allowance for expected credit losses as per impairment requirement and the amount initially recognized less, income recognized in accordance with the principles of 1FRS 15. Financial guarantees are included within other liabilities. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as letter of credit and letter of guarantee will be treated as off-balance sheet items. No liability is recognized for the guarantee except the cash margin. (h) REPO transactions IFRS: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the same (or a similar asset) at a fixed price on a future date (REPO or stock lending), the arrangement is accounted for as a collateralized borrowing and the underlying asset continues to be recognized in the entity’s financial statements. This transaction will be treated as borrowing and the difference between selling price and repurchase price will be treated as interest expense. Bangladesh Bank: As per BB circulars/guidelines, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the same (or a similar asset) at a fixed price on a future date (REPO or stock lending), the arrangement is accounted for as a normal sale transaction and the financial assets should be derecognized in the seller’s book and recognized in the buyer’s book. (i) Cash and cash equivalents IFRS: Cash and cash equivalent items should be reported as cash item as per ‘IAS 7- Statement of Cash Flows’. Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, treasury bills, Bangladesh Bank bills and prize bonds are not shown as cash and cash equivalents. Money at call and on short notice is presented on the face of the balance sheet, and treasury bills and prize bonds are shown in investments. 228 Annual Report 2018
  228. Notes to the Financial Statements (j) Non-banking assets IFRS: No indication in the name of Non-banking asset is found in any IFRS. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named Non-banking asset. (k) Cash flow statement IFRS: AS per ‘IAS 7- Statement of Cash Flows’ the Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flow is the mixture of direct and indirect methods. (l) Balance with Bangladesh Bank (CRR) IFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per ‘IAS 7- Statement of Cash Flows’. Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents. (m) Presentation of intangible asset IFRS: An intangible asset must be identified and recognized, and the disclosure must be given as per ‘IAS 38-Intangible Assets’. Bangladesh Bank: There is no regulation for intangible assets in BRPD circular no.14 dated 25 June 2003. (n) Off balance sheet items IFRS: There is no term in the name of off-balance sheet items in any IFRS; hence there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet. Bangladesh Bank: As per BRPD circular no.14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet. (o) Loans and advances net of provision IFRS: Loans and advances should be presented net of provisions. Bangladesh Bank: As per BRPD circular no.14 dated 25 June 2003, provision on loans and advances should be presented separately as liability and cannot be netted off against loans and advances. 2.2 Basis for Measurement The financial statements of the Bank have been prepared on the historical cost basis except for the following items: a) Government Treasury Bills and Bonds designated as ‘Held for Trading (HFT)’ at present value using marking to market concept with gain crediting to revaluation reserve. b) Government Treasury Bills and Bonds designated as ‘Held to Maturity (HTM)’ at present value using amortization concept. c) Land and building at revalued amounts. 229
  229. Notes to the Financial Statements 2 .3 Use of estimates and judgments The preparation of consolidated financial statements and separate financial statements (solo) of the Bank required management to make judgments, estimates and assumptions that affected the application of accounting policies and the reported amounts of assets, liabilities, income and expenditures. Actual results may differ from these estimates. Estimates and underlying assumptions have been reviewed considering business realities. Revisions of accounting estimates have been recognized in the period in which the estimates have been revised and in the future periods affected, if applicable. The preparation of financial statements in conformity with adopted IFRSs and BRPD circulars requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. 2.4 Foreign currency transactions 2.4.1 Functional and presentational currency Financial statements of the Bank have been presented in Bangladeshi Taka, which is the Bank’s functional and presentational currency except for OBU, where the functional currency is US Dollar (USD). All financial information presented in Taka and US Dollar (USD) has been rounded off to the nearby integer, except when otherwise indicated. 2.4.2 Foreign currency translation Foreign currency transactions have been converted into equivalent Taka at the ruling exchange rates on the respective date of such transactions as per IAS 21 “The Effects of Changes in Foreign Exchange Rates”. Foreign Currency conversion rates for the year 2018 are as follows: (Spot Rate) Sl. Particular SGD MYR CAD AUD USD 1 Assets & Liabilities 61.1249 20.0958 61.7411 56.6813 83.9500 2 Income & Expenses 61.4830 20.2729 63.7786 56.8407 83.9500 Here, SGD, MYR, CAD, AUS and USD indicate Singaporean Dollar, Malaysian Ringgit, Canadian Dollar, Australian Dollar and US Dollar respectively. 2.4.3Commitment Commitments for outstanding forward foreign exchange contracts disclosed in the consolidated financial statements and separate financial statements of Bank have been translated at contracted rates. Contingent liabilities/commitments for letter of credit, letter of guarantee and acceptance denominated in foreign currencies have been expressed in Taka terms at the rates of exchange ruling on the balance sheet date. 2.4.4 Transaction gains and losses Gains or losses arising out of transaction of foreign exchange have been included in the Profit and Loss Statement and in Balance Sheet. 2.4.5 Foreign operations The assets & liabilities of foreign operations are translated to Bangladeshi Taka at exchange rate prevailing at the balance sheet date. The income & expenses of foreign operations are translated at average rate of exchange for the year. Foreign currency differences are recognized and presented in the foreign currency translation reserve in equity. 2.5 Basis for Consolidation The consolidated financial statements include the financial statements of Agrani Bank Limited and its six subsidiaries named Agrani Equity and Investment Limited, Agrani SME Financing Company Limited, Agrani Exchange House Private Limited, Singapore, Agrani Remittance House, BHD, Malaysia, Agrani Exchange Co.(Australia) Pty. Limited, Agrani Remittance House Canada, Inc. made up to the end of the financial year. The Consolidated financial statements have been prepared in accordance with International Financial Reporting Standard-10 ‘Consolidated Financial Statements’. These Consolidated financial statements are prepared to a common financial year ended 31 December 2018. 230 Annual Report 2018
  230. Notes to the Financial Statements 2 .5.1Subsidiaries Subsidiaries are entities controlled by the group. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date the control ceases. Name of Subsidiary Ownership Status of Ownership Country of Operation Agrani Exchange House Pte. Limited 100.00% Wholly Singapore Agrani Remittance House SDN. BHD. 100.00% Wholly Malaysia Agrani Equity and Investment Limited 99.99% Wholly Bangladesh Agrani SME Financing Com. Limited 99.99% Wholly Bangladesh Agrani Remittance House Canada, Inc. 100.00% Wholly Canada Agrani Exchange Co.(Australia) Pty. Limited 100.00% Wholly Australia 2.5.2 Transactions eliminated on consolidation Intra-group balances and transactions and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the Consolidated Financial Statements. Unrealized gains or unrealized losses arising from transactions with equity investees are eliminated against the investment to the extent of the group’s interest in the investee. 2.6 Materiality, aggregation and offsetting The Bank aggregates each material class of similar items and separately which are dissimilar in nature or function unless those are immaterial. The Bank did not offset assets and liabilities or income and expense unless required or permitted by IFRSs. 2.7 Comparative Information Presentation of Financial Statements, comparative information in respect of the previous year have been presented in all numerical information in the financial statements and the narrative and descriptive information where it is relevant for the understanding of the current year’s financial statements. 2.8 Reporting period The accounting period of the Group has been determined to be from 01 January to 31 December each year and is followed consistently. 2.9 Cash flow statement Cash flow statement has been prepared in accordance with the BRPD circular no. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank. 2.10 Statement of changes in equity Statement of Changes in Equity has been prepared in accordance with IAS 1 “Presentation of Financial Statements” and following the guidelines of Bangladesh Bank BRPD circular no.14 dated 25 June 2003. 2.11 Liquidity statement The Basis of the liquidity statement of assets and liabilities as on the reporting date is given below: Particulars Basis Balance with other banks and financial institutions Maturity term Investments Respective maturity terms Loans and advances Repayment schedule Basis Fixed assets More than 5 years bucket Other assets Realization/ amortization Basis Borrowing from other banks, financial institutions & agents Maturity/ repayments terms Deposits and others accounts Maturity term/ Previous trend Other liabilities Payments/ adjustments schedule Basis 231
  231. Notes to the Financial Statements 2 .12 Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank management for its short-term commitments. 2.13Investments All investments are initially recognized at cost, including acquisition charges associated with the investment. Accounting treatment of government treasury securities (categorized as HFT or/and HTM) is given following DOS circular no. 5 dated 26 May 2008 and subsequent clarifications on 28 January 2009. 2.13.1 Held to Maturity (HTM) Investments which are intended to be held till maturity are classified as Held to Maturity (HTM). These are measured at amortized cost at each year-end by taking into account any discount or premium on acquisition. Premiums are amortized and discounts are credited, using the historical yield. Any increase in value of such investments is booked to equity but decrease to profit and loss account. 2.13.2 Held for Trading (HFT) These are investments primarily held for selling or trading. After initial recognition, investments are marked to market weekly and any decrease in the present value is recognized in the Profit and Loss Account and any increase is booked to Revaluation Reserve Account through Profit and Loss Account as per DOS Circular no. 05 dated 28 January 2009. 2.13.3 REPO and reverse REPO The Bank has been recording transactions of REPO and reverse REPO following DOS circular no. 6 dated 15 July 2010 issued by Bangladesh Bank. In case of REPO of both the coupon and non-coupon bearing (treasury bill) securities, the Bank adjusts the revaluation reserve account for HFT securities and stops the weekly revaluation (if the revaluation date falls within the REPO period) of the same security. For interest-bearing security, the Bank does not accrue interest during REPO period. Investments – Initial recognition and subsequent measurement at a glance. Investments are stated as per following bases: Investment class Initial recognition Measurement after initial recognition Recording of changes Govt. T-bills/T-bonds-Held for Trading (HFT) Cost Fair value Loss to Profit and Loss Account, gain to Revaluation Reserve through Profit and Loss Account. Govt. T-bills/T-bonds-Held to Maturity (HTM) Cost Amortized cost Increase in value of such investments is booked to equity, decrease to profit and loss account. Debenture/Bond Cost None None Shares (Quoted) * Cost Lower of cost or market value (overall portfolio) Loss (net off gain) to profit and loss account but no unrealized gain booking. Shares (Unquoted)* Cost Lower of cost or Net Asset Value (NAV) Loss to profit and loss account but no unrealized gain booking. Mutual fund (Closed-end) * Cost Lower of cost and (higher of market value and 85% of NAV) Loss (net) to profit and loss account but no unrealized gain booking. Prize bond Cost Cost None * Provision for shares against unrealized loss (gain net off) has been made as per DOS circular no. 4 dated 24 November 2011 and for mutual funds (closed-end) as per DOS circular letter no. 3 dated 12 March 2015 of Bangladesh Bank. 2.13.4 Investment in quoted securities These securities are bought and held primarily to sell them in future or held for dividend income, and are reported at cost. Unrealized gains are not recognized in the profit and loss statement. But required provision is kept for diminution in value of the investment. 232 Annual Report 2018
  232. Notes to the Financial Statements 2 .13.5 Investment in unquoted securities Investment in unlisted securities is reported at cost. Adjustment is given for any shortage of book value over cost for determining the carrying amount of investment in unlisted securities. As per Bangladesh Bank DOS Circular # 04 dated 24 November 2011, provision for diminution in value of the investment was made by netting off unrealized gain/loss of shares from market price/book value less cost price. Besides, bank complied with Bangladesh Bank BRPD Circular 14 dated June 25, 2003 as follows, “All investment in shares and securities (both dealing and investment) should be revaluated at the year-end. The quoted shares should be valued as per market price in the stock exchange(s) and unquoted shares as per book value of last audited balance sheet. Provision should be made for any loss arising from diminution in value of investment”. 2.13.6 Investment in subsidiary Investment in a subsidiary is accounted for under the cost method of accounting and presented in the Bank’s consolidated financial statements as that of a single economic entity in accordance with the IAS 27 “Separate Financial Statements” and IFRS 10 “Consolidated Financial Statements”. 2.14 Loans and advances 2.14.1 Presentation of loans and advances i) Loans and advances are initially recognized at fair value, representing the cash advanced to the borrowers plus the net of direct and incremental transaction costs and fees. They are subsequently measured at amortized cost and shown at gross amount instead of directly reducing the carrying amount of assets while interest suspense and loan loss provision against classified loans are shown under other liabilities in the Balance Sheet as per BRPD Circular no. 14, dated June 25, 2003. ii) Loans to staffs are allowed at concessional rate as approved by the authority and are shown under advances as per BRPD Circular no. 14, dated 25 June 2003. 2.14.2 Interest on loans and advances i) Interest is calculated on unclassified loans and advances and recognized as income during the year; ii) Interest calculated on classified loans and advances as per Bangladesh Bank Circulars is kept in interest suspense account; iii) Interest is calculated on daily product Basis but debited to the party’s loan account quarterly. No interest is charged on loans and advances which are classified as bad and loss; iv) Total balance of loans and advances as on 31 December 2018 includes bad/loss loan Tk. 63,484,516,283 on which the Bank did not accrue any interest because of deterioration of quality of loans and advances determined by the management and on the Basis of instructions contained in Bangladesh Bank Circulars as mentioned in Note-2.14.3 of this financial statement; and v) Interest suspense and penal interest, if any, calculated on classified loans and advances are taken into income in the year of its receipt from the defaulting borrowers. 2.14.3 Provision for loans and advances Provision for loans and advances is made on the Basis of instructions mentioned in Bangladesh Bank BRPD Circular no. 19 dated December 27, 2012; BRPD Circular no. 14, 15 dated September 23, 2012; BRPD Circular no. 05 dated May 29, 2013; BRPD Circular no. 16 dated November 18, 2014; BRPD Circular no. 15 dated September 27, 2017; BRPD Circular no. 01 dated February 20, 2018. Rate of Provision Short term agri credit Particulars Unclassified Classified Consumer Financing Other Than HF & LP HF LP SMEF Loans to BHs/MBs/ SDs All Other Credit Standard 1% 5% 1% 2% 0.25% 2% 1% SMA - 5% 1% 2% 0.25% 2% 1% SS 5% 20% 20% 20% 20% 20% 20% DF 5% 50% 50% 50% 50% 50% 50% BL 100% 100% 100% 100% 100% 100% 100% 233
  233. Notes to the Financial Statements 2 .14.4 Interest and discount income Interest on loans and advances, investment income and discount income are stated at the gross amount as per requirement of BRPD Circular no 14 dated June 25, 2003. 2.14.5 Written off loans and advances Loans and advances with no realistic prospect of recovery are written off against which full provisions were made earlier and legal cases initiated but pending, except the state owned enterprises for which no legal actions have been taken. Detailed memorandum records for all such written off accounts are maintained without reducing the Bank’s claim. Written off loans are calculated according to BRPD Circular no 2, dated January 13, 2003, DOS Circular no 1, dated December 29, 2004 and BRPD circular no.13, November 7, 2013. 2.14.6 Impairment of financial assets An asset is impaired when its carrying value exceeds its recoverable amount as per IAS 36 “Impairment of Assets”. At each balance sheet date, Agrani Bank Limited assesses whether there is objective evidence that a financial asset or a group of financial assets (i.e. loans and advances, off-balance sheet items and investments) is impaired. A financial asset or group of financial assets is impaired, and impairment losses are incurred ifi) there is objective evidence of impairment as a result of a loss event that occurred after the initial recognition of the asset up to the balance sheet date; ii) the loss event had an impact on the estimated future cash flows of the financial asset or the group of the financial assets; and iii) a reliable estimate of the loss amount can be made. 2.15 In the event of impairment loss, the Bank reviews whether a further allowance for impairment should be provided in the profit and loss statement in addition to the provision made Based on Bangladesh Bank guidelines or other regulatory requirements. Fixed assets and depreciation a) Fixed assets are stated at cost of acquisition/valuation less accumulated depreciation. b)Depreciation is charged on straight-line method on all fixed assets at the following rates per annum: Fixed Assets Land Rate of depreciation Nil Building 2.50% Furniture and Fixture 10.00% Library Books 10.00% Motor Vehicles 20.00% Office Equipment 20.00% Electric Materials 20.00% Computer and Computer accessories 20.00% c) Depreciation at the applicable rates is charged proportionately on additions made during the year from the month the assets are available for use if such assets are acquired in the first half of the month. Depreciation is charged on assets retiring during the year for the period up to the end of the month of their retirement if assets are retiring in the second half of the month. d) Upon retirement of items of fixed assets, the cost and accumulated depreciation are eliminated from the accounts and the resulting gains or losses, if any, are transferred to Profit and Loss Account. e) Repairs and maintenances costs of fixed assets are treated as revenue expenditure and charged to Profit and Loss Account when they are incurred. Depreciation of premises and equipment is included in general and administrative expenses. Repairs and maintenances are charged to general and administrative expenses and improvements of fixed assets are capitalized. Gain or loss on sale of fixed assets is recognized in profit and loss statement as per provision of IAS 16 “Property, Plant and Equipment”. f) Excess depreciation due to revaluation comparing the depreciation on cost value is transferred to the retained earnings from revaluation reserve. 234 Annual Report 2018
  234. Notes to the Financial Statements 2 .15.1 Impairment of fixed assets At each balance sheet date, the Bank assesses whether there is any indication that the carrying amount of an asset exceeds its recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and an impairment loss is recognized as an expense in the profit and loss statement unless the asset is carried at revalued amount in accordance with International Accounting Standard (IAS) 16, Property, Plant and Equipment in which case an impairment loss of a revalued asset should be treated as a revaluation decrease under that Accounting Standard. No impairment loss was recognized up to the reporting period as there were no such indication existed as on Balance Sheet date. 2.16 Other assets As per BRPD circular no. 14 dated 25 June 2003, other assets/item(s) have been shown separately as ‘income generating’ and ‘non-income generating’ in the relevant notes to the financial statements. Other assets include investment in subsidiaries includes all items of other assets, advance for revenue and capital expenditure, stocks of stationery and stamps, security deposits to government agencies, other receivables etc. 2.16.1 Provision for other assets Other assets have been classified as per BRPD Circular No. 14 dated June 25, 2001 of Bangladesh Bank and necessary provisions made thereon accordingly; and for items not covered under the circular, adequate provisions have been made considering their realizable ability. 2.16.2 Written off other assets Other assets having no realistic prospect of recovery have been written off against full provision without reducing the claimed amount of the Bank. Notional balances against other assets written off have been kept to maintain the detailed memorandum records for such accounts/assets. 2.17 Non-Banking assets Non-banking assets were acquired due to the failure of borrowers to repay the loan in time taken against mortgaged property. The Bank was awarded absolute ownership of a few mortgaged properties (mostly land) through the verdict of the Honorable Court under section 33(7) of the Artha rin Adalat Act 2003. The value of the properties has been recognized in the financial statements as non-earning assets on the Basis of third-party valuation report. Value of the assets received in addition to the loan outstanding has been kept as reserve against non-banking assets. 2.18 Reconciliation of inter-branch transactions Inter-branch transactions are reconciled on a regular Basis, and balance of un-reconciled entries at the closing date is accounted for according to its nature. 2.19 Assets pledged as security The Bank has no secured liabilities except as mentioned in Note-10.2 to the financial statements and there was no asset pledged as security against liabilities. 2.20 Revenue recognition Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the entity and it can be measured reliably. Items are treated as revenue/income when there is no existence of risk or uncertainty regarding their realizability. 2.21 Fees and commissions The recognition of fees revenue including commissions is determined by the purpose for the fees and the Basis of accounting for any associated financial instruments. Fees earned from services that are provided over a specified service period are recognized over that service period. Fees earned for the completion of a specific service or significant event are recognized when the service is completed or the event has occurred. Fees and commissions consist mainly of fees for opening of letters of credit and issuance of guarantees in BDT and in foreign currencies. Fees and commissions are charged when they become due. Commissions arising from foreign currency transactions are reported as income. 2.22 Interest income from investments Interest income on investments in government and other securities, debentures and bonds is accounted for on accrual Basis. 2.23 Dividend Income Dividend income from investments is recognized at the time when it is declared, ascertained and right to receive the payment is established as per IFRS-15 ‘Revenue from contracts with customers’. 235
  235. Notes to the Financial Statements 2 .24 Interest paid and expenses In terms of the provision of the International Accounting Standard (IAS-1) Presentation of Financial Statements, the interests and other expenses are recognized on accrual Basis. 2.25 Borrowings from other banks, financial institutions and agents Borrowings from other banks, financial institutions and agents include interest-bearing borrowings which are stated in the financial statements at principal amount of the outstanding balance. Interest payables on such borrowings are reported under other liabilities. 2.26 Deposits and other accounts Deposits and other accounts include non-interest-bearing current deposit redeemable at call, interest-bearing on demand and short-term deposits, savings deposits, fixed deposits and various scheme deposits. These items are brought to account at the gross value of the outstanding balances. 2.27 Other liabilities Other liabilities comprise items such as provision for loans and advances/investments, provision for taxes, interest payable on borrowing, interest suspense and accrued expenses etc. Individual item-wise liabilities are recognized as per the guidelines of Bangladesh Bank and International Financial Reporting Standards (IFRS). 2.28 Share Capital 2.28.1 Capital Management The bank has a capital management process for measuring, deploying and monitoring it’s available capital and assessing its adequacy. This capital management process aims to achieve four major objectives; exceed regulatory thresholds and meet long-term internal capital targets, maintain strong credit rating, manage capital levels commensurate with the risk profile of the Bank and provide the Bank’s shareholders with acceptable returns. Capital is managed in accordance with the board approved capital management planning from time to time. Senior management develops the capital strategy and oversees the capital management planning of the Bank. The bank’s Accounts and Risk management department are playing key role to implement the Bank’s capital strategy. Capital is managed using both regulatory control measures and internal matrix. 2.28.2 Paid-up Capital Paid up capital represents the total amount of shareholder capital that has been paid in full by the Government of Bangladesh i.e. ordinary shareholder. In the event of winding-up of the Company ordinary shareholder(s) rank after all other shareholders and creditors are fully entitled to any residual proceeds of liquidation for settlement of debt. Statutory Reserve As per the Bank Companies Act, 1991 (amendment up to 2013) under section-24, the Bank is required to transfer 20% of its current year's profit before tax to reserve until such reserve equals to its paid up capital. 2.28.3 Dividends on Ordinary Shares Dividends on ordinary shares are recognized as a liability and deducted from equity when it is approved by the bank’s Annual General meeting. Dividends for the year that are approved after the reporting date are disclosed as an event after the reporting date. 2.29 Retirement benefit scheme The Bank operates two alternative retirement benefit schemes for its permanent employees, elements of which are as under: a) Contributory recognized provident fund (CPF) scheme i) Employees’ contribution 10%; ii) Bank’s contribution 8.33%; iii) This fund is operated by a Board comprising of 8 Trustees; and iv) Employees enjoying contributory provident fund facilities are entitled to get gratuity for 2 months last basic pay drawn for each completed year of service subject to completion of minimum 10 years of service. 236 Annual Report 2018
  236. Notes to the Financial Statements b ) General pension fund scheme (Super Annuation Fund) i) Pension The Bank operates a pension scheme. This fund is operated by a Trustee Board comprising of 9 Trustees. ii) Annual provision Year % of Basic pay 1986 to 1994 10% 1995 to 1999 18% 2000 to 2003 25% 2004 to 2005 30% 2006 35% 2007 to 2013 30% 2014 to June'2017 50% From July'2017 75% In the year 2018, additional provision Taka 1,500,000,000 has been kept for the provision of Super Annuation Fund (SAF). This has been named as Super Annuation Fund (SAF) created for paying pension to retiring employees. It is fully funded. iii) General provident fund (GPF) 2.30 Employees opted for pensions are also contributing 5%-25% of basic salary as per their desire to GPF. The Bank does not contribute any amount to the GPF against these employees. The Fund is shown under Sundry Deposit. Death relief grant scheme The Bank operates a Death Relief Grant Scheme since January 01, 1989, which replaced the group insurance scheme. The scheme is applicable to all employees of the Bank and payments out of this fund are made to the successors of the employees on their death while in Bank’s service and quantum of payment is determined as per scale and grade of such employees. 2.31Taxation The expense comprises current and deferred tax. Current tax and deferred tax is recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity. i) Current tax: Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date and any adjustment to the tax payable in respect of previous years. Provision for current income tax of the Bank has been made on taxable income @ 40% considering major disallowances of expenses and concessional rates on certain incomes (0% on gain on trading of govt. securities, 10% on capital gain of shares & MFs and 20% on dividend income) as per Income Tax Ordinance (ITO) 1984. Tax provision of the Group entities is made on taxable income of subsidiaries at different rates applicable as per the ITO 1984 and the tax authority of the country where it is incorporated. Tk. 3,260,640,205 has been made for provision for the year 2018 and Tk. 2,682,800,000 in the year 2017 by the bank. Income Tax assessment has been finalized up to 2003, 2004 and 2007. Reference case is pending for the year 2002, 2005, 2006, 2008, 2009, 2010, 2011, 2012, 2013 and 2014. DCT appeal under process for the year 2015. The return has been submitted for the year 2016 and 2017. Details statuses of Tax assessment are shown annexure-F. ii) Deferred tax: Deferred tax has been calculated as per International Accounting Standard-12 Income Taxes and BRPD Circular No# 11 Dated 12 December 2011. Calculation shows net deferred tax assets of Tk. 11,762,791,741 (Note - 9.4), where asset has been recognized amount of Tk. 793,049,225 to the Profit & Loss Account. 2.32Provisions Provisions are recognized if the Bank has a present legal or constructive obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 237
  237. Notes to the Financial Statements The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation as of the Balance Sheet date , taking into account the risks and uncertainties surrounding the obligation. 2.33 Loan commitments No loan commitments are found to be designated at fair value through profit or loss under the fair value option. All loan commitments remain as off-balance sheet items. 2.34 Materiality, Aggregation and Off Setting Each material item as considered by management significant has been displayed separately in the financial statements. No amount has been set off unless the Bank has legal right to set off the amounts and intends to settle on a net Basis. Income and expenses are presented on a net Basis only when permitted by the relevant accounting standards. The values of any asset or liability as shown in the statement of financial position (balance sheet) are not off-set by way of deduction from another liability or asset unless there exist a legal right therefor. No such incident exists during the year. 2.35 Financial guarantees Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and other parties on behalf of customers to secure loans, overdrafts, other banking facilities and other various payments. Financial guarantees are recognized in the financial statements at fair value on the dates the guarantees were given as contingent liabilities. 2.36 Events after Reporting Period As per IAS -10 “Events after Reporting Period” events after the reporting period are those events, favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are authorized for issue. Two types of events can be identified: (a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and (b) those that are indicative of conditions that arose after the reporting period (non adjusting events after the reporting period). 2.37 Segment reporting For the purpose of Segment Reporting as per International Financial Reporting Standard-8 “Operating Segments”, the following segments relating to revenue, expenses, assets and liabilities have been identified and shown in the related notes accordingly as primary/secondary segments. i) domestic operations in line with geographical segments; ii) banking operations comprising of branches of the banking entity; and iii) treasury operations comprising of the banking entity. Information regarding the result of each reportable segment is included in Annexure-L. Performance is measured Based on segment profit before provision, as included in the internal management reports that are reviewed by the Bank’s Management. Segment report is used to measure performance as Management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. 2.38 Risk management Being a financial institution, in the ordinary course of business, the Bank is sensitive to verities of risks. The generic severity of such risk(s) is much intense in our locality due to presence of large number of banks and complex financial transactions. In such highly competitive environment to ensure a bank’s consistent system and performance, the presence of strong Risk Management culture is obligatory. Being compliant, the Bank is now looking forward to take risk management practice to a different level, preventing risk before occurrence, i.e., on a proactive Basis rather than on a reactive Basis. As a part of regulatory and global benchmarking the bank has based upon 06 (six) core risk guidelines of Bangladesh Bank and Basel framework. Listed below are the identified risks the Bank is currently managing or intends to manage in the future: 238 Annual Report 2018
  238. Notes to the Financial Statements Sl . No. Basel Accord Core Risk Guideline of BB Pillar 1 Credit Risk Credit Risk 2 Market Risk Foreign Exchange Risk 3 Operational Risk Asset Liability Risk 4 Residual Credit Risk Money Laundering Risk 5 Residual Risk (CRM) Internal Control & Compliance Risk Pillar –II 6 Residual Market Risk – Equity ICT Risk Pillar –II 7 Residual Market Risk - Currency Pillar –II 8 Credit Concentration Risk Pillar –II 9 Liquidity Risk Pillar –II 10 Interest Rate Risk Pillar –II 11 Settlement Risk Pillar –II 12 Reputation Risk Pillar –II 13 Strategic Risk Pillar –II 14 Pension Obligation Risk Pillar –II 15 Compliance Risk Pillar –II Pillar - I & Pillar - II Accordingly, the Bank has various high powered committees to monitor and ensure smooth risk management activities. For example, Management Committee (MANCOM), Asset Liability Committee (ALCOM), Credit Committee (CC), Audit Committee, etc. to manage the overall risks of the Bank in line of Basel the bank has formed a dedicated Risk Management Division. The details of ABL’s risk management are shown in the chapter “Risk Management”. 2.39 Disclosure on fraud and forgeries committed by bank employees: During the year of 2018, 10 instances of fraud and forgeries were identified. total amount of money involved against the 10 instances was Tk.120,037,111. Tk.2,720,550/- has been recovered/accounted for against 02 instances out of total defalcated amount of Tk.120,037,111 and the rest amount of Tk.117,316,561 against 08 instances has not been accounted for/recovered as yet. It is mentionable here that all the 10 instances were internal fraud. Administrative and disciplinary actions have been taken against the delinquent officials of the Bank. All efforts are in force to recover the remaining defalcated money. 2.40 Related party transactions A party is related to the company if (i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the company; has an interest in the company that gives it significant influence over the company; or has joint control over the company; (ii) the party is an associate; (iii) the party is a joint venture; (iv) the party is a member of the key management personnel of the Company or its parent; (v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or (vii) the party is a post-employment benefit plan for the benefit of employees of the company, or of any entity that is a related party of the company. Related party transaction is a transfer of resources, services, or obligations between related parties regardless a price is charged as per IAS 24- Related party disclosures. Details of related party transactions are disclosed in Annexure- A. 239
  239. Notes to the Financial Statements 2 .41 Directors’ responsibilities on statement The Board of Directors takes the responsibilities for the preparation and presentation of these financial Statements. 2.42 Approval of financial statements The Board of Directors approved the financial statements on April 30, 2019. 2.43 Credit Rating of the Bank As per the BRPD circular no. 6 dated 5 July 2006, the Bank has done its credit rating by Alpha Credit Rating Limited (Alpha Rating) Based on the financial statements of Agrani Bank Limited dated 31 December 2017. The following ratings had been awarded: Basis of Rating Government Support Long Term 2016 2017 2016 AAA AAA ST-1 ST-1 Stable A A- ST-2 ST-3 Stable Compliance of International Financial Reporting Standards (IFRS) IAS No. Status Presentation of Financial Statements 1 Applied* Inventories 2 N/A Statement of Cash Flows 7 Applied* Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied Events after the Reporting Period 10 Applied Construction Contracts 11 N/A Income Taxes 12 Applied Employee Benefits 19 Applied Accounting for Govt. Grants and Disclosure of Government Assistance 20 N/A The Effects of Changes in Foreign Exchange Rates 21 Applied Borrowing Costs 23 N/A Related Party Disclosures 24 Applied Accounting & Reporting by Retirement Benefit Plans 26 N/A Separate Financial Statements 27 Applied Investments in Associates 28 N/A Financial Instruments: Presentation 32 Applied* Earnings per share 33 Applied Interim Financial Reporting 34 N/A Impairment of Assets 36 Applied Provisions, Contingent Liabilities and Contingent Assets 37 Applied Intangible Assets 38 Applied* Financial Instruments: Recognition and Measurement 39 N/A Investment Property 40 N/A Agriculture 41 N/A Name of International Accounting Standards (IAS) 240 Outlook 2017 Without Government Support 2.44 Short Term Annual Report 2018
  240. Notes to the Financial Statements Name of International Financial Reporting Standards (IFRS) IFRS No. Status First-time Adoption of International Financial Reporting Standards 1 N/A Share-Based Payment 2 N/A Business Combinations 3 N/A Insurance Contracts 4 N/A Non-Current Assets Held for Sale and Discontinued Operations 5 Not Applied Exploration for and Evaluation of Mineral Resources 6 N/A Financial Instruments: Disclosures 7 Applied Operating Segments 8 Applied Financial Instruments 9 Applied Consolidated Financial Statements 10 Applied Joined Arrangement 11 N/A Disclosure of Interest in Other Entities 12 Applied Fair value Measurement 13 Applied Regulatory Deferral Accounts 14 N/A Revenue from Contracts with Customers 15 Applied Leases 16 N/A * Subject to departure mentioned earlier in note # 2.1 above 2.45 Audit Committee Name Status with Bank Status with Committee Address Ms. Mahmuda Begum Director Chairman Additional Secretary (World Bank) Economic Relations Division, Ministry of Finance, Block-16, Room-4, Sher-e-Bangla Nagar, Dhaka-1207. Mr. Kashem Humayun Director Member Managing Editor The Daily Sangbad Mr. Md. Ansar Ali Khan Director Member Gardenia-7, Eskaton Garden, Dhaka. 2.46 Changes in Accounting Policies As per IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” Accounting Policies are applied consistently for comparability between financial statements of different accounting periods. Changes in Accounting Policies are applied retrospectively to the financial statements (if any). Comparative amounts presented in the financial statements affected by the change in accounting policy for each prior period presented. 2.47 General: a) Figures have been rounded off to the nearest Taka. b) Prior Year’s figures have been shown for comparison purposes and rearranged wherever necessary to conform to current year’s presentation. c) Conversion rate is calculated Based on the simple average of buying and selling rates. 241
  241. Notes to the Financial Statements Amount in Taka 31-Dec-18 3 3 .1 Cash Cash in Hand: Local Currency Foreign Currency 3.2 Balance with Bangladesh Bank and its agent bank: Bangladesh Bank (Note - 3.2.1) Sonali Bank Limited as agent of Bangladesh Bank (Note - 3.2.2) total (Note 3.1+3.2) 3.2.1 3.2.2 3.3 Balance with Bangladesh Bank Local Currency Foreign Currency- Annexure-E(2) Balance with Sonali Bank Limited Local Currency Foreign Currency 31-Dec-17 37,115,199,280 38,440,817,584 3,798,989,739 94,329,320 3,893,319,059 3,752,277,207 36,220,469 3,788,497,676 31,729,192,142 1,492,688,079 33,221,880,221 37,115,199,280 33,274,111,396 1,378,208,512 34,652,319,908 38,440,817,584 31,142,663,162 586,528,980 31,729,192,142 33,138,743,507 135,367,889 33,274,111,396 1,492,688,079 1,492,688,079 1,378,208,512 1,378,208,512 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR): Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Bank Company Act, 1991 (Amendment upto 2013) and Monetory Policy Department (MPD) circular nos. 01 & 02, dated June 23, 2014 and December 10, 2013 & DOS circular no. 1 dated 19 January 2014 of Bangladesh. As per MPD Circular No.01 dated 03 April, 2018 of Bangladesh Bank (effective from 15 April, 2018), all scheduled banks (including islami bank) are required to maintain a CRR minimum 5.5% on bi-weekly basis based on weekly average demand and time liabilities of two months prior to current month and minimum 5.0% on daily basis for year 2018 and As per MPD Circular No.116/2014-853 dated 23 June, 2014 of Bangladesh Bank (effective from 24 June, 2014), all scheduled banks are required to maintain a CRR minimum 6.5% on bi-weekly basis based on weekly average demand and time liabilities of two months prior to current month and minimum 6.0% on daily basis for year 2017 and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory Liquidity Ratio for Islamic banking, excluding CRR, on the same liabilities in the form of treasury bills, bonds and debentures including FC balance with Bangladesh Bank. As per the above mentioned circular, CRR & SLR of December 2018 have been on weekly average balance of October 2018. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below: 3.3.1 Cash Reserve Requirement (Daily Basis) Reserve Required @ 5.0 % of total Demand and Time Liabilities Actual Reserve held Surplus/ (Deficit) 30,987,137,000 35,305,775,000 4,318,638,000 31,125,824,000 36,178,938,000 5,053,114,000 3.3.1.a CRR of Islamic Banking Unit (Daily Basis) Reserve Required @ 5.0 % of total Demand and Time Liabilities 48,829,000 54,926,820 Actual Reserve held 68,203,000 66,084,337 Surplus/ (Deficit) 19,374,000 11,157,517 As per MPD Circular No.01 dated 03 April, 2018, daily CRR may be kept @ 5.0% on daily basis. But bi-weekly average amount would not be below 5.5% of total Time & Demand Liabilities. 3.3.2 Cash Reserve Requirement (Bi-Weekly Average) Required Reserve @ 5.5 % of Average Demand and Time Liabilities Actual Reserve held Surplus/(Deficit) 242 Annual Report 2018 34,085,851,000 35,305,775,000 1,219,924,000 33,719,643,000 36,178,938,000 2,459,295,000
  242. Notes to the Financial Statements Amount in Taka 31-Dec-18 3 .3.2.a 3.3.3 3.3.3.1 3.3.4 3.3.4.1 3(a) CRR of Islamic Banking Unit (Bi-Weekly Basis) Required Reserve @ 5.5 % of Average Demand and Time Liabilities Actual Reserve held Surplus/(Deficit) 31-Dec-17 53,712,000 68,203,000 14,491,000 59,504,060 66,084,337 6,580,277 80,566,557,000 90,058,431,138 9,491,874,138 67,439,286,000 144,548,122,472 77,108,836,472 3,893,319,059 1,219,924,000 1,492,688,079 46,769,379,000 12,808,113,000 23,875,008,000 90,058,431,138 3,788,497,676 2,459,295,000 1,378,208,512 51,893,141,015 61,111,744,269 23,917,236,000 144,548,122,472 53,712,000 76,948,000 23,236,000 50,349,590 60,016,708 9,667,118 2,457,000 14,491,000 60,000,000 76,948,000 3,436,431 6,580,277 50,000,000 60,016,708 3,893,319,059 16,548 12,171,924 266,772 374,460 14,694,174 3,920,842,937 3,788,497,676 83,375 44,471,966 408,325 1,117,757 14,694,174 3,849,273,273 33,221,880,221 34,652,319,908 - - 7,174,730 6,725,280 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 33,229,054,951 37,149,897,888 34,659,045,188 38,508,318,461 Statutory Liquidity Ratio (SLR) Required Reserve @13 % of total Demand and Time Liabilities Actual Reserve held (Note: 3.3.3.1) Surplus/(Deficit) Actual Reserve Held : Cash in hand Excess of CRR Balance with Sonali Bank (as a agent of BB) Un encumbered Approved Securities ( HTM ) Un encumbered Approved Securities ( HFT ) Other eligible securities (HTM) Total SLR of Islamic Banking Unit Required Reserve @ 5.50 % of total Demand and Time Liabilities Actual Reserve held (Note: 3.3.4.1) Surplus/(Deficit) Actual Reserve Held : Cash in hand Excess of CRR Eligible Securities (Bangladesh Govt. Islami Investment Bond) Consolidated Cash (i) Cash in Hand: Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited (ii) Balance with Bangladesh Bank and its agent bank : Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited 243
  243. Notes to the Financial Statements Amount in Taka 31-Dec-18 4 4 .1 Balance with Other Banks & Financial Institutions In Bangladesh (Note - 4.1) Outside Bangladesh (Annexure E-1) In Bangladesh: Local Currency Banks Al-Arafah Islami Bank Limited Exim Bank Limited Shahjalal Islami Bank Limited First Security Islami Bank Limited Social Islami Bank Limited AB Bank Limited Agrani Bank Islami Banking Unit Bangladesh Development Bank Ltd. Bank Asia Limited BRAC Bank Limited Dhaka Bank Limited Dutch Bangla Bank Limited Eastern Bank Limited Karmasangsthan Bank National Bank Limited Ansar VDP Unnayan Bank Premier Bank Limited IFIC Bank Limited Jamuna Bank Limited Modhumoti Bank Limited Meghna Bank Limited Mercantile Bank Limited Midland Bank Limited Mutual Trust Bank Limited Commerce Bank of Cylon Bangladesh Commerce Bank Limited NCC Bank Limited NRB Bank Limited NRB Commercial Bank Limited NRB Global Bank Limited One Bank Limited Pubali Bank Limited Padma Bank Limited (former The Farmers Bank Limited) SBAC Bank Limited Southeast Bank Limited Standard Bank Limited The City Bank Limited Trust Bank Limited Union Bank Limited ICB Islamic Bank Limited Basic Bank Ltd. United Commercial Bank Limited Rajshahi Krishi Unnayan bank Balance with ABL Islamic Window National Bank of Pakistan Less: Inter unit transaction 244 Annual Report 2018 31-Dec-17 119,099,906,202 6,543,775,383 125,643,681,585 73,143,717,356 4,652,098,874 77,795,816,230 4,339,151,879 4,197,573,450 2,094,775,176 2,000,000,000 2,204,321,125 4,000,000,000 2,000,000,000 2,000,000,000 4,000,000,000 5,000,000,000 2,000,000,000 4,000,000,000 1,400,000,000 3,000,000,000 4,000,000,000 4,000,000,000 1,000,000,000 1,000,000,000 4,000,000,000 900,000,000 4,000,000,000 850,000,000 1,300,000,000 4,000,000,000 500,000,000 400,000,000 1,400,000,000 1,800,000,000 1,700,000,000 1,500,000,000 3,500,000,000 3,000,000,000 3,000,000,000 4,000,000,000 69,948,607 3,000,000,000 3,000,000,000 3,000,000,000 44,135,965 200,000,000 97,399,906,202 (2,000,000,000) 95,399,906,202 1,144,390,700 2,226,459,250 1,975,525,251 2,362,789,000 1,200,000,000 1,800,000,000 2,500,000,000 2,000,000,000 2,000,000,000 2,000,000,000 2,000,000,000 400,000,000 1,500,000,000 2,000,000,000 1,800,000,000 400,000,000 400,000,000 2,000,000,000 300,000,000 2,550,000,000 1,350,000,000 800,000,000 1,800,000,000 800,000,000 400,000,000 400,000,000 1,800,000,000 2,000,000,000 600,000,000 400,000,000 2,000,000,000 1,500,000,000 2,500,000,000 500,000,000 600,000,000 69,948,607 3,000,000,000 14,604,548 200,000,000 53,293,717,356 53,293,717,356
  244. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 Non- Bank Financial Institutions Bangladesh Financial Investment Company Limited 700 ,000,000 300,000,000 Bangladesh Industrial Finance Company Limited 200,000,000 200,000,000 Bay Leasing & Investment Limited 600,000,000 600,000,000 Delta Brac Housing Finance Corporation Ltd. 1,500,000,000 1,200,000,000 FAS Finance & Investment Company Limited 350,000,000 450,000,000 First Finance & Investment Limited 330,000,000 330,000,000 GSP Finance Company Limited 300,000,000 200,000,000 Hajj Finance Limited 500,000,000 - IDLC Finance Limited 900,000,000 1,000,000,000 IIDFC 200,000,000 - ICB 10,500,000,000 8,500,000,000 International Leasing and Financial Services Limited 500,000,000 500,000,000 IPDC Finance Limited 600,000,000 600,000,000 Lanka Bangla Limited 750,000,000 600,000,000 Peoples Leasing, Finance & Investment Limited 370,000,000 370,000,000 Premier Leasing & Finance Ltd. 500,000,000 400,000,000 Prime Finance & Investment Limited 500,000,000 500,000,000 Reliance Finance Limited 500,000,000 500,000,000 Fareast Finance & Investment Company Limited 600,000,000 550,000,000 Union Capital Limited 600,000,000 500,000,000 50,000,000 50,000,000 Islamic Finance and Investment Limited 300,000,000 200,000,000 Meridian Finance & Investment Limited 150,000,000 150,000,000 MIDAS Financing Limited 200,000,000 200,000,000 National Finance Ltd. 100,000,000 100,000,000 National Housing Finance And Investments Limited 600,000,000 600,000,000 Phoenix Finance and Investments Limited 600,000,000 350,000,000 Uttara Finance Limited 200,000,000 - Capm Venture Capital and Finance Limited United Finance Limited 4.2 4.3 Balance with Other Banks and Financial Institutions (Account wise): Current & Other Accounts Fixed Deposit Receipts (FDR) Maturity grouping of balances: On demand Within 1 to 3 months Within 3 to 12 months Within 1 to 5 years More than 5 years 500,000,000 900,000,000 23,700,000,000 19,850,000,000 119,099,906,202 73,143,717,356 6,543,775,383 119,099,906,202 125,643,681,585 4,652,098,874 73,143,717,356 77,795,816,230 6,543,775,383 65,260,000,000 53,839,906,202 125,643,681,585 4,652,098,874 60,876,500,000 12,267,217,356 77,795,816,230 245
  245. Notes to the Financial Statements Amount in Taka 31-Dec-18 4 (a) Consolidated balance with other banks and financial institutions (i) In Bangladesh Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) (ii) Outside Bangladesh Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 5 Money at call and short notice With Bank The Farmers Bank Limited NRB Commercial Bank Limited NRB Global Bank Limited BCBL With Non-Bank Financial Institution BD Finance & Investment Limited FAS Finance & Investment Limited Fareast Finance & Investment Limited Prime Finance & Investment Limited BIFC Lanka Bangla Finance IPDC Finance Limited First Finance Ltd. Bay Leasing & Investment Ltd. Pepples Leasing Premier Leasing GSP Finance Ltd. IIDFC Meridian Finance Limited National Housing & Finance Limited National Finance Limited CAPM Venture Capital & Finance 246 Annual Report 2018 31-Dec-17 119,099,906,202 2,299,603 276,980,217 119,379,186,022 (126,692,320) 119,252,493,702 73,143,717,356 5,129,177 361,002,145 73,509,848,678 (366,131,322) 73,143,717,356 6,543,775,383 111,398,480 17,459,171 6,672,633,034 125,925,126,736 4,652,098,874 83,717,192 61,742,436 4,797,558,502 77,941,275,858 - 890,000,000 350,000,000 200,000,000 140,000,000 1,580,000,000 70,000,000 90,000,000 40,000,000 60,000,000 70,000,000 240,000,000 10,000,000 60,000,000 50,000,000 690,000,000 690,000,000 60,000,000 50,000,000 50,000,000 40,000,000 150,000,000 150,000,000 60,000,000 250,000,000 80,000,000 50,000,000 100,000,000 30,000,000 50,000,000 1,120,000,000 2,700,000,000
  246. Notes to the Financial Statements Amount in Taka 31-Dec-18 6 Investments SLR Securities Government Securities (Note- 6.1 ) Other Investment (Note- 6.2 ) 82,881,919,024 630,580,970 83,512,499,994 136,341,540,314 630,580,970 136,972,121,284 15,864,672,950 59,853,069,967 75,717,742,917 159,230,242,911 9,283,101,408 24,620,900,902 33,904,002,310 170,876,123,594 21,109,151,327 61,772,767,697 82,881,919,024 69,249,093,824 57,778,203,773 9,314,242,717 136,341,540,314 Total 13,857,277,850 1,995,522,000 11,873,100 15,864,672,950 98,746,591,974 9,274,020,708 9,080,700 9,283,101,408 145,624,641,722 Treasury Bills SLR Securities 07 days Bangladesh Bank Bills 14 days Bangladesh Bank Bills 14 days Treasury Bills (Annexure-B.1) 91 days Treasury Bills 182 days Treasury Bills (Annexure-B.1) 364 days Treasury Bills (Annexure-B.1) Sub Total 1,999,623,639 7,456,093,778 11,653,433,910 21,109,151,327 17,495,839,939 6,496,288,548 6,916,599,915 13,436,723,102 24,903,642,320 69,249,093,824 Non SLR Securities 91 days Treasury Bills (Lien with BB)(Annexure-B.1) Total 1,995,522,000 23,104,673,327 69,249,093,824 4,213,790,160 5,723,256,140 13,330,018,364 7,953,038,722 6,352,710,909 18,827,500 18,126,800,000 5,098,800,000 895,525,902 60,000,000 61,772,767,697 306,841,807 3,128,327,869 14,652,739,616 9,113,051,048 6,344,434,491 61,055,000 18,126,800,000 5,098,800,000 896,153,942 50,000,000 57,778,203,773 Non SLR Securities Government Securities (Note- 6.1 ) Other Investment (Note- 6.2 ) Total 6.1 Government Securities: SLR Securities Treasury Bills (Note- 6.1.1 ) Govt. Treasury Bond/Other Govt. Bond/Other Securities (Note- 6.1.2 ) Reverse REPO Non SLR Securities Govt. Treasury Bond/Other Govt. Bond/Other Securities (Note- 6.1.2 ) Treasury Bills (Note- 6.1.1 ) Prize Bonds (at cost) 6.1.1 6.1.2 31-Dec-17 Govt. Treasury Bond/Other Govt. Bond/Other Securities SLR Securities 2 years Bangladesh Govt. Treasury Bond 5 years Bangladesh Govt. Treasury Bond 10 years Bangladesh Govt. Treasury Bond 15 years Bangladesh Govt. Treasury Bond 20 years Bangladesh Govt. Treasury Bond 25 years Treasury Bond (Jute Bond) 7-10 Yrs.(Agrani Bank-BPC) T.Bond 9-13 Yrs.(Agrani Bank-BJMC) T.Bond 10 years Bangladesh Govt. Treasury Bond (Remeasured) Bangladesh Govt. Islamic Investment Bond (BGIIB) 247
  247. Notes to the Financial Statements Amount in Taka 31-Dec-18 Non SLR Securities 15 & 20 years Bangladesh Govt. Treasury Bond (Lien with BB under ALS) 5 & 10 years Bangladesh Govt. Treasury Bond (Lien with BB infavour of SCB) Total 6.1.3 6.1.3.a 6.1.3.b 248 6,081,620,850 7,775,657,000 13,857,277,850 75,630,045,547 31-Dec-17 9,274,020,708 9,274,020,708 67,052,224,481 Investment in Government securities classified as per Bangladesh Bank’s DOS Circular Letter No. 05 date 26 May 2008 and DOS Circular Letter No. 05 date 28 January 2009. Held to Maturity (HTM) (Note: 6.1.3.a) 70,704,387,329 75,860,377,015 Held for Trading (HFT) (Note: 6.1.3.b) 12,808,112,664 61,111,744,269 83,512,499,993 136,972,121,284 Held to Maturity (HTM) Treasury Bill 07 days Bangladesh Bank Bills 17,495,839,939 14 days Bangladesh Bank Bills 6,496,288,548 30 days Bangladesh Bank Bills 14 days Treasury Bills 1,999,623,638 91 days Treasury Bills 6,916,599,915 182 days Treasury Bills 7,456,093,778 4,969,453,834 364 days Treasury Bills 11,653,433,910 1,057,513,530 21,109,151,326 36,935,695,766 Bond/Other Securities 2 years Bangladesh Govt. Treasury Bond 4,013,762,560 107,705,407 5 years Bangladesh Govt. Treasury Bond 5,620,266,840 639,465,873 10 years Bangladesh Govt. Treasury Bond 3,979,264,539 2,143,639,753 15 years Bangladesh Govt. Treasury Bond 5,984,277,806 5,999,390,148 20 years Bangladesh Govt. Treasury Bond 5,167,129,886 5,171,090,156 25 years Treasury Bond (Jute Bond) 18,827,500 61,055,000 7-10 Years.(Agrani Bank-BPC) T.Bond 18,126,800,000 18,126,800,000 9-13 Years.(Agrani Bank-BJMC) T.Bond 5,098,800,000 5,098,800,000 Bangladesh Govt. Islamic Investment Bond (BGIIB) 60,000,000 50,000,000 10 years Bangladesh Govt. Treasury Bond (Remeasured) 895,525,902 896,153,942 ICB Share 630,580,970 630,580,970 49,595,236,003 38,924,681,249 70,704,387,329 75,860,377,015 Held for Trading (HFT) Treasury Bill 07 days Bangladesh Bank Bills 91 days Treasury Bills 182 days Treasury Bills 8,467,269,268 364 days Treasury Bills 23,846,128,790 Reverse Repo (Treasure Bond) 1,965,000,000 34,278,398,058 Bond/Other Securities 2 years Bangladesh Govt. Treasury Bond 200,027,600 199,136,400 5 years Bangladesh Govt. Treasury Bond 102,989,300 2,488,861,996 10 years Bangladesh Govt. Treasury Bond 9,350,753,825 12,509,099,863 15 years Bangladesh Govt. Treasury Bond 1,968,760,916 3,113,660,900 20 years Bangladesh Govt. Treasury Bond 1,185,581,023 1,173,344,335 Reverse Repo (Bangladesh Govt. Treasure Bond) 7,349,242,717 12,808,112,664 26,833,346,211 12,808,112,664 61,111,744,269 Annual Report 2018
  248. Notes to the Financial Statements Amount in Taka 31-Dec-18 6 .2 Other Investment SLR Securities Shares Non SLR Securities Subordinated Bond (Note- 6.2.1) Commercial Paper Shares (Note- 6.2.2) Un-approved Debenture (Annexure-D) Total 6.2.1 Subordinated Bond (Annexure-B.3) UCBL Subordinated Bond-I One Bank Subordinated Bond AB Bank Subordinated Bond-I Southeast Bank Subordinated Bond EBL Floating Rate Dated Subordinated Bond Bank Asia Floating Rate Dated Subordinated Bond Prime Bank Floating Rate Dated Subordinated Bond EXIM Bank Floating Rate Dated Subordinated Bond UCBL Subordinated Bond-II Al-Arafah Islami Bank Subordinated Bond AB Bank Subordinated Bond-II Standard Bank Subordinated Bond Dhaka Bank Floating Rate Dated Subordinated Bond IFIC Bank Coupon Bearing Subordinated Bond Southeast Bank Subordinated Bond II Mutual Trust Bank Ltd Subordinated Bond-II Bank Asia Ltd. Subordinated Bond II Floating Rate Subordinated Mudaraba Bond fo Exim Bank Ltd. DBBL Subordinated Bond City Bank 2nd Subordinated Bond Premier Bank Subordinated Bond Standard Bank Subordinated Bond II Islami Bank Subordinated Bond Pubali Bank Ltd. Floating Rate Subordinated Bond National Bank 2nd Subordinated Bond FSIBL Subordinated Bond UCBL 3rd Subordinated Bond NCC Bank Non-Convertible Subordinated Bond Rupali Bank Subordinated Bond Jamuna Bank Subordinated Bond Mercantile Bank Subordinated Bond Southeast Bank Subordinated Bond III Dhaka Bank Floating Rate Dated Subordinated Bond II Prime Bank Subordinated Bond The Farmers Bank Subordinated Bond 31-Dec-17 630,580,970 630,580,970 630,580,970 630,580,970 43,120,000,000 600,000,000 16,133,069,950 17 59,853,069,967 60,483,650,937 10,490,000,000 200,000,000 13,930,900,885 17 24,620,900,902 25,251,481,872 210,000,000 200,000,000 300,000,000 300,000,000 160,000,000 160,000,000 160,000,000 400,000,000 160,000,000 240,000,000 400,000,000 180,000,000 500,000,000 500,000,000 450,000,000 300,000,000 250,000,000 500,000,000 500,000,000 200,000,000 200,000,000 500,000,000 1,000,000,000 1,000,000,000 250,000,000 300,000,000 300,000,000 500,000,000 2,000,000,000 500,000,000 1,000,000,000 1,500,000,000 1,500,000,000 2,000,000,000 1,000,000,000 300,000,000 300,000,000 400,000,000 400,000,000 200,000,000 200,000,000 200,000,000 500,000,000 200,000,000 300,000,000 500,000,000 240,000,000 500,000,000 500,000,000 450,000,000 300,000,000 250,000,000 500,000,000 500,000,000 200,000,000 200,000,000 500,000,000 1,000,000,000 1,000,000,000 250,000,000 300,000,000 300,000,000 - 249
  249. Notes to the Financial Statements Amount in Taka 31-Dec-18 Al Arafah Islami Bank Mudaraba Sub . Bond-II 1,000,000,000 - ICB Subordinated Bond 7,000,000,000 - City Bank Ltd. 3rd Subordinated Bond 1,000,000,000 - Trust Bank Ltd. Floating Rate Dated Subordinated Bond 2,000,000,000 - Shahjalal Islami Bank Ltd. Mudaraba Floating Rate Dated Subordinated Bond 2,500,000,000 - Islami Bank Ltd. Mudaraba Floating Rate Dated Subordinated Bond 3,000,000,000 - UCB 4TH Floating Rate Dated Subordinated Bond 2,500,000,000 - DBBL Floating Rate Dated Subordinated Bond-II 2,000,000,000 - 2,500,000,000 43,120,000,000 10,490,000,000 630,580,970 630,580,970 SIBL Floating Rate Dated Subordinated Bond 6.2.2 31-Dec-17 Shares SLR Shares Share Quoted (Annexure-C 1) Share Un-Quoted (Annexure-C 2) - - 630,580,970 630,580,970 Non SLR Shares Share Quoted (Annexure-C 1) Share Un-Quoted (Annexure-C 2) Total 6.3 8,779,344,165 16,133,069,950 13,930,900,885 16,763,650,920 14,561,481,855 11,873,100 9,080,700 Less than 3 months 14,688,234,640 59,489,863,426 More than 3 months but less than 1 year 31,672,975,772 41,088,638,223 More than 1 yesr but less than 5 year 51,251,737,080 36,692,061,255 More than 5 years 61,605,422,319 33,596,479,990 159,230,242,911 170,876,123,594 159,230,242,911 170,876,123,594 Net Investments Carrying amount Less: Provision (Note - 12.11) Net Investment 6.5 5,151,556,720 Maturity grouping of Investment On demand 6.4 5,753,725,785 10,379,344,165 (3,897,390,171) (3,897,390,171) 155,332,852,740 166,978,733,423 Other Investments included Tk. 3,000 million for investment in shares under buy back agreement from Beximco Group. The buy-back agreement has expired on 2012 for the second time. Agrani Bank Limited has completed all formalities to transfer of shares purchased from the three companies (Unique Hotel & Resorts Ltd., BEXIMCO Ltd. and GMG Airlines Ltd.). Meanwhile only the shares of GMG Airlines Limited have been transferred in favour of Agrani Bank Limited with book value of Tk. 670 million and market value nill respectively. It is noted that, the BEXIMCO Group approached a proposal vide a letter dated 28 March, 2018 where they expressed their interest to resolve outstanding liabilities under share sale and buy back agreement. The matter has been tabled out in 554th meeting of the Board of Directors of the Bank held on 09 April, 2018 and the Board resolved the issue that the outstanding liabilities under said Buy Back Agreement might be adjusted after being repaid Tk 307.00 crore by the BEXIMCO within three months from the date the decision communicated to them and fulfillment of some terms and conditions set forth in the board resolution. Meanwhile a letter dated 11 April, 2018 has been sent to the BEXIMCO informing the decision of the Board of Directors of the Bank. Upto 31 December 2018 BDT 130.00 crore has been received from BEXIMCO Group. The repayment of the rest amount of BDT 177.00 crore is under process. 250 Annual Report 2018
  250. Notes to the Financial Statements Amount in Taka 31-Dec-18 6 (a) Consolidated investments (i) Government Securities Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 98,746,591,974 98,746,591,974 145,624,641,722 145,624,641,722 60,483,650,937 8,606,633,275 52,249,080 24,696,440 69,167,229,732 167,913,821,706 25,251,481,872 6,778,821,411 51,125,000 26,326,480 32,107,754,763 177,732,396,485 383,949,190,516 9,274,244,026 2,529,594,949 395,753,029,491 313,720,312,722 2,732,515,958 2,665,769,733 319,118,598,413 16,220,861,826 7,683,946 98,640,758,362 9,308,473,800 4,709,506,254 41,069,613,268 87,595,031,097 73,175,305,734 330,727,234,287 14,801,686,679 7,877,194 87,478,668,530 9,701,124,222 4,517,353,422 36,972,779,729 68,914,719,225 56,593,827,622 278,988,036,623 c) Overdrafts Total (a+b+c) Outside Bangladesh: Total Loans, Cash Credit & Over Draft etc. 40,782,127,105 2,677,683,906 245,474,212 962,569,762 44,667,854,985 8,554,101,244 383,949,190,516 9,274,244,026 393,223,434,542 28,224,153,425 1,958,937,738 221,885,825 683,714,603 31,088,691,591 3,643,584,508 313,720,312,722 2,732,515,958 316,452,828,680 Bills Purchased & Discounted (Note - 7.10) Total Loans and Advances 2,529,594,949 395,753,029,491 2,665,769,733 319,118,598,413 (ii) Others Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited total Investments (i+ii) 7 Loans and Advances In Bangladesh (Note - 7.1.a) Outside Bangladesh (Note - 7.1.b) Bills Purchased & Discounted (Note - 7.1.c) 7.1.a In Bangladesh: a) Loans Rural Credits Weavers Credits Industrial Credits Jute Advances Leather Sector Advances Staff Loans Loan (Others) Small and Micro Credits including SME b) Cash credits Cash Credits Packing Credits Loan Against Imported Merchandise (LIM) Payment Against Documents (PAD) 7.1.b 7.1.c 31-Dec-17 According to clause # 1.a of Memorandum of Understanding (MOU) signed between Bank and Bangladesh Bank, the adjusted loan growth of 2018 was fixed at 20% of the outstanding adjusted loan of December 2017. As on 31 December, 2018 adjusted loan growth stands at 23.52%. However, bank’s Advance Deposit Ratio stands at 63.63% as on 31 December 2018 251
  251. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 7 .2 Maturity grouping of loans and advances: On demand Within 1 to 3 months Within 3 to 12 months Within 1 to 5 years More than 5 years 7.3.a Disclosure for significant concentration Advances to allied concerns of Directors Advances to Managing Director Advances to Other Executives Advances to Customers’ Group Industrial Credits 7.3.b Disclosure for sector-wise loans and advances Government sector Other public sector Private sector 7.3.c Disclosure on large loan Loan sanctioned to any individual or enterprise or any organization of a group amounting to 10% or more of total capital of the Bank according to Bangladesh Bank circular BRPD 02, dated 16.01.2014. total capital of the Bank is Tk. 3,975.99 crore as at 31 December 2018 (TK 3,448.26 crore in 2017). Orion Group Sikder Group Bashundhara Group Bangladesh Petroleum Corporation Dhaka Hyde & Skins Limited Tanaka Group Joj Bhuiya Group Pecefic Group Beximco Group Magpie Group Prime Group Bangladesh Services Bangladesh Suger & Food Organisation Sonali Group Moon Group Aristocrat Group BSRM Steel Jamuna Group Tharmax Group Unique Meghnaghat Power City Group Agrani Equity Jakiya Group 27,781,550,022 49,090,939,864 99,179,107,952 133,754,259,139 85,947,172,514 395,753,029,491 15,349,823,381 39,070,120,152 45,544,033,655 102,058,302,629 117,096,318,596 319,118,598,413 34,353,182,615 262,759,088,514 98,640,758,362 395,753,029,491 31,066,064,904 200,573,864,979 87,478,668,530 319,118,598,413 1,947,799,000 6,128,501,000 387,676,729,491 395,753,029,491 1,842,756,000 1,870,668,210 315,405,174,203 319,118,598,413 6,897,800,000 5,373,100,000 6,131,900,000 6,259,100,000 4,144,900,000 6,474,000,000 6,391,300,000 3,171,900,000 4,765,100,000 3,952,000,000 5,864,800,000 7,147,900,000 4,882,200,000 3,421,900,000 4,535,300,000 3,041,200,000 4,946,400,000 4,764,500,000 4,518,100,000 4,505,600,000 3,710,000,000 3,980,000,000 7,154,700,000 116,033,700,000 7,948,100,000 6,295,800,000 3,907,500,000 4,255,700,000 3,597,500,000 6,267,300,000 5,902,700,000 3,080,100,000 4,785,500,000 3,779,100,000 4,687,500,000 5,413,800,000 5,390,000,000 3,061,900,000 4,141,800,000 2,937,200,000 5,968,100,000 81,419,600,000 According to clause # 3 of Memorandum of Understanding (MOU) signed between the Bank and Bangladesh Bank, “Large loan Concentration” 15% of total capital, of which funded exposure shall not exceed 10% of total capital. As on 31 December 2018, 7 parties of the private sector and 2 parties of government sector capital exceed the agreed upon celling. 252 Annual Report 2018
  252. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 7 .3.d Disclosure on large loan re-structuring No large loan has been re-structured during the year 2018 & 2017 under BRPD circular No. 04 date 29 January 2015 of Bangladesh Bank. 7.4 Geographical Location - wise Loans and Advances: A. Urban Dhaka Region Chattogram Region Khulna Region Rajshahi Region Barishal Region Sylhet Region Rangpur Mymensing Region Cumilla Region Faridpur Region Sub Total B. Rural Dhaka Region Chattogram Region Khulna Region Rajshahi Region Barishal Region Sylhet Region Rangpur Mymensing Region Cumilla Region Faridpur Region Sub Total Total (A + B) 7.5 Sector-wise Loans and Advances Agriculture and Fishery Jute & Jute Goods Transport Storage & Communication Ship Breakings Textile & Readymade Garments Food & Allied Industry Construction & Engineering Pharmaceuticals and Chemicals Leather Sector Power Sector Professional and Services Housing Service Wholesale/Retail Trading Personal (staff and other personal loan) Bank & Other Non-Financial Institution Electronics & Automobile Cement & Ceramic Others 249,770,426,580 25,006,800,101 18,891,551,560 17,178,668,931 4,860,080,496 4,258,538,456 10,821,052,631 10,554,017,474 5,538,940,470 5,439,659,508 352,319,736,207 194,038,087,362 21,908,677,729 16,127,019,529 14,675,919,281 4,340,124,238 3,664,434,245 9,123,590,862 8,618,162,900 5,025,248,445 5,013,597,862 282,534,862,453 6,255,463,282 1,070,249,987 8,322,735,854 6,322,409,628 3,306,981,648 1,573,504,961 5,292,997,047 5,788,936,767 3,460,410,732 2,039,603,378 43,433,293,284 395,753,029,491 5,278,310,055 926,136,952 6,762,116,191 5,236,225,064 2,777,083,386 1,322,588,990 4,580,368,091 4,916,202,773 3,167,613,618 1,617,090,840 36,583,735,960 319,118,598,413 16,220,861,825 9,308,473,799 5,934,153,000 965,318,130 32,735,392,000 4,238,680,000 13,630,760,260 2,634,006,515 4,709,553,420 9,606,600,680 3,613,520,350 11,298,833,469 87,756,820,610 57,166,512,090 135,933,543,343 395,753,029,491 14,801,686,679 9,701,124,222 3,758,556,950 975,418,130 31,026,615,000 4,712,139,859 10,878,397,260 1,438,237,515 4,517,353,422 8,194,182,680 2,028,910,915 9,460,436,769 76,100,261,615 48,219,465,359 93,305,812,038 319,118,598,413 253
  253. Notes to the Financial Statements Amount in Taka 31-Dec-18 7 .6 Loans & Advances are Classified as per Bangladesh Bank Circular Unclassified : Standard (including staff loan) Special Mention Account Classified Sub-Standard Doubtful Bad & Loss 31-Dec-17 312,483,694,258 13,335,513,469 325,819,207,727 255,525,214,452 7,897,877,466 263,423,091,918 2,513,599,381 3,935,706,100 63,484,516,283 69,933,821,764 395,753,029,491 4,295,266,744 2,258,019,536 49,142,220,215 55,695,506,495 319,118,598,413 According to clause # 5 (i) of Memorandum of Understanding (MOU) signed between Bank and Bangladesh Bank, classified loan to be reduced 25% in amount from that of the previous year. However, as on 31 December 2018 Classified loan stood at 6,993.38 crore which was Tk. 5,569.55 crore in the year 2017. 7.7 Loans & Advances (Category wise) A. Inside Bangladesh I. Continuous loan (CL-2) Small & Medium Enterprise Finance Other Than Small & Medium Enterprise Finance II. Demand loan (CL-3) Small & Medium Enterprise Other Than Small & Medium Enterprise III. Term loan (CL-4) Small & Medium Enterprise Finance Consumer Finance (including staff, other than HF) Housing Finance (HF) Loans for Professional Set-up Business Others IV. Short term agri credit and microcredit (CL-5) Short Term Agri Credit Micro Credit B. Outside Bangladesh (Off-shore Banking Unit) Total Loans & Advances (Inside & Outside Bangladesh) (A+B) 7.8 Movement of classified loans and advances Opening balance Addition during the year Reduction during the year 7.9 Particulars of Loans and Advances Loans considered good in respect of which of the banking company is fully secured Loans considered good against which the banking company holds no security other than the debtor’s personal guarantee Loans considered good secured by the personal undertakings of one or more parties in addition to the personal guarantee of the debtors Loans adversely classified, for which no provision is created Loans due by directors or officers of the banking company or any of them either separately or jointly with any other persons Loans due from companies or firms in which the directors of the banking company have interests as directors, partners or managing agents or in case of private companies as members 254 Annual Report 2018 59,037,447,826 73,577,901,629 132,615,349,455 46,311,312,312 54,462,207,273 100,773,519,585 59,645,253 21,165,345,157 21,224,990,410 20,240,786 19,592,271,704 19,612,512,490 13,959,563,933 1,578,380,124 24,151,848,128 250,031,415 176,907,781,419 216,847,605,019 10,229,996,406 2,403,659,562 18,495,537,900 192,614,476 150,272,721,307 181,594,529,651 14,532,768,401 1,258,072,180 15,790,840,581 9,274,244,026 395,753,029,491 13,184,890,637 1,220,630,091 14,405,520,728 2,732,515,959 319,118,598,413 55,695,506,495 24,821,015,269 (10,582,700,000) 69,933,821,764 68,044,863,101 6,396,643,394 (18,746,000,000) 55,695,506,495 338,954,967,960 272,162,217,005 44,700,950,947 36,434,276,856 12,097,110,584 10,522,104,552 395,753,029,491 319,118,598,413 34,353,182,615 31,066,064,904 - -
  254. Notes to the Financial Statements Amount in Taka Maximum total amount of advances including temporary advance made at any time during the year to directors or managers or officers of the banking companies or any of them either separately or jointly with any other person Maximum total amount of advances including temporary advances granted during the year to the companies or firms in which the directors of the banking company have interests as directors , partners or managing agents or in the case of private companies as members Due from bank companies 31-Dec-18 31-Dec-17 34,353,182,615 31,066,064,904 - - - - Amount of classified loan on which interest has not been charged,mentioned as follows (Decrease) / increase in provision Amount of loan written off 726,693,000 Amount realized against loan previously written off 778,235,486 Amount of provision kept against loan classified as ‘bad/loss’ on the date of 28,283,759,114 preparing the balance sheet Interest creditable to the Interest Suspense A/c Cumulative amount of the written off loan 54,721,293,000 Amount written off during the current period 726,693,000 Amount of written off loan for which lawsuit has been filed 54,721,293,000 7.10 Bills purchased and discounted: In Bangladesh Outside Bangladesh 7.11 Maturity grouping of bills purchased and discounted Payable within 1 month Over 1 month but less than 3 months Over 3 months but less than 6 months 6 months or more 7.12 Net Loans and advances: Carrying amount Less: Interest suspense and penal interest Provision for loans & advances (Note-12.9) 7(a).1 Consolidated loans, advances and leases/investments Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction (s) 7(a).2 107,600,000 902,969,108 26,581,336,481 53,994,600,000 107,600,000 53,994,600,000 766,758,763 1,762,836,186 2,529,594,949 549,337,970 2,116,431,763 2,665,769,733 2,529,594,949 2,529,594,949 2,665,769,733 2,665,769,733 395,753,029,491 (19,798,688,304) (32,868,556,617) (52,667,244,921) 343,085,784,570 319,118,598,413 (17,059,532,213) (31,436,043,268) (48,495,575,481) 270,623,022,932 395,753,029,491 441,653,252 1,588,992,597 397,783,675,340 (4,392,297,067) 393,391,378,273 319,118,598,413 581,724,147 1,079,318,480 320,779,641,040 (2,220,661,586) 318,558,979,454 Consolidated loans & advances are classified as per Bangladesh Bank circular Unclassified : Standard (including staff loan) 314,376,200,033 Special Mention Account 13,406,679,276 327,782,879,309 Classified: Sub-Standard 2,531,345,686 Doubtful 3,945,755,109 Bad & Loss 63,523,695,236 70,000,796,031 397,783,675,340 Less: Inter-company transaction (s) (4,392,297,067) 393,391,378,273 257,078,181,612 7,948,940,373 265,027,121,985 4,309,930,471 2,266,925,246 49,175,663,338 55,752,519,055 320,779,641,040 (2,220,661,586) 318,558,979,454 255
  255. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 7 (a).3 Loans & Advances are Classified as per Bangladesh Bank Circular: Agrani SME Financing Company Limited Unclassified : Standard (including staff loan) 1,450,852,523 971,243,013 Special Mention Account 71,165,807 51,062,907 1,522,018,330 1,022,305,920 Classified: Sub-Standard 17,746,305 14,663,727 Doubtful 10,049,009 8,905,710 Bad & Loss 39,178,953 33,443,123 66,974,267 57,012,560 1,588,992,597 1,079,318,480 8 Fixed assets including land, buildings, furniture and fixtures (Annexure G) 8(a) 9 Cost/ Valuation: Balance at the beginning of the year Addition during the year Revaluation during the year Transfer to non-banking assets Disposal during the year Balance at the end of the year 18,979,895,753 255,364,887 (400,252,668) (30,914,789) 18,804,093,183 18,706,264,138 281,208,150 (7,576,535) 18,979,895,753 Less: Accumulated Depreciation Balance at the beginning of the year Charge for the year Disposal during the year Balance at the end of the year Written Down Value (WDV) 3,419,159,308 629,217,189 (27,862,794) 4,020,513,703 14,783,579,480 2,928,960,104 497,770,739 (7,571,535) 3,419,159,308 15,560,736,445 14,783,579,480 2,515,129 7,886,130 5,507,170 16,629,355 46,800 178,546 14,816,342,610 15,560,736,445 3,039,958 12,139,585 6,917,101 16,764,276 74,043 178,546 15,599,849,954 4,619,433,350 4,619,433,350 4,619,433,350 4,619,433,350 109,258,302 4,881,732,576 4,602,852 3,281,280 17,692,273,401 126,567,443 926,397,079 185 100,156,850 3,435,137,185 6,730,089 3,912,893 15,225,547,530 131,808,669 1,053,369,212 185 Consolidated Fixed assets including land, buildings, furniture and fixtures Written Down Value (WDV) Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Other Assets Income generating Other Assets Investment in shares of subsidiary companies (Note - 9.1) Non-income generating Other Assets Stationery, stamps, printing materials etc. Accrued Income (Note - 9.3) Receivable From Govt. Advance Deposits & prepayments Advance Tax Paid (Annexure-F) Advance Rent Suspense Account (Note - 9.2) Demonetized Notes 256 Annual Report 2018
  256. Notes to the Financial Statements Amount in Taka 31-Dec-18 Debit balance of Al-Rajhi Foreign Exchange Army pension (Note - 9.2(ii)) Civil pension Purchase of WES Bond Payment against sanchaya patra Pension paid- Staff D.D paid without advice Protested Bills Exempted Loans Interest on Exempted Loans Deferred Tax Assets (Note - 9.4) Foreign Correspondent draft paid Balance with Indian Bankw Balance with Pakistani Bank Software Purchase (Note - 9.8) Dividend Receivable from Preference Share Work in Progress for Consulting of Bank building Receivable from Agrani SME Financing Company Limited Receivable/(Payable) against Sale/Buy of Share of ICB Receivable from Agrani Remittance House Canada Inc. Receivable from Agrani Exchange Company (Australia) Pty. Limited 9.1 Total Investment in shares of subsidiary companies Agrani Equity & Investment Limited Agrani SME Financing Limited Agrani Exchange House Pvt. Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 31-Dec-17 1 3,703,760,763 121,449,446 42,728,368 4,206,026,446 9,423,733 155,897,000 70,820,672 47,492,217 421,633,595 11,762,791,741 17,081,105 23,505 1 987,823,944 4,426,132,522 1,070,740,536 55,672,663 52,909 29,197,654 32,490,122 50,905,352,061 55,524,785,411 1 3,436,349,597 126,868,306 151,131,524 3,056,731,072 294,162,350 72,631,505 47,315,217 422,135,913 10,969,742,516 20,904,703 23,505 1 1,107,332,546 3,977,298,044 978,034,774 55,672,663 63,719,647 28,884,654 32,490,121 44,798,091,272 49,417,524,622 4,000,000,000 600,000,000 6,457,000 8,967,168 8,217 4,000,965 4,619,433,350 4,000,000,000 600,000,000 6,457,000 8,967,168 8,217 4,000,965 4,619,433,350 9.1.i As per decision of 457th meeting of the Board of Directors of Agrani Bank Limited held on 29 May, 2016 and the consent letter BRPD(M) 204/8/2016-3995 of Bangladesh Bank regarding wind up of Agrani Exchange Company Pty Limited, Australia, the Company has closed down its operation in 30 June 2016 and it’s liquidation process is underway. As a part of liquidation process, the Company has submitted an application requesting to cancel the registration of the company to Australian Securities and Investments Commission (ASIC)- Australian government body that acts as Australia’s corporate regulator. Agrani Bank Limited would take next steps immediately after the liquidation of the company effectively comes to an end. 9.1.ii Although Bangladesh Bank instructed Agrani Bank Limited to close down the operation of Agrani Remittance House Canada Inc. due to the company not be able to make it profitable since it’s inception, the Bank has applied to Bangladesh Bank for giving a rational time span within which the Company becomes profitable with taking some realistic plan and implementing of the plan that mentioned in the prayer. Again on 03 December 2017 the Bank has written to Bangladesh Bank seeking approval for continuing operation of the above Remittance House; and in response, the Bangladesh Bank has provided the approval letter no BRPD(M)204/08/2018-6156 dated on 16-08-2018 to continue the operation of Agrani Remittance House Canada Inc. for next 6 months, which was expired on 15 February 2019. Subsequently, the Bank has requested to Bangladesh Bank to give approval for continuing the operation of the Remittance House vide letter no FRD/383/19 dated 18 February 2019. Bangladesh Bank yet to reply on the same. 257
  257. Notes to the Financial Statements Amount in Taka 31-Dec-18 9 .2 31-Dec-17 Suspense Account Sundry debtors -Staff (Note - 9.2(i) 21,325,705 20,831,039 Sundry debtors -other (Note - 9.2(i) 858,680,089 855,977,276 Legal charges Clearing adjustment Advance against petty cash Loan application form Clearing Suspense Remittance only point Clearing Suspense A/C for T-24 Branch Debit Card Off-us transactions Premium paid XPB 118,529 214,229 2,488,980 171,752,250 9,435 1,202,636 1,371,094 1,463,393 58,379 554,897 - 53,270 5,692,002 - 31,501,500 - 5,151,366 1,320,222 926,397,079 1,053,369,212 9.2 (i) Sundry debtors- staff & others An amount of Tk. 311,541,583 remain un-recovered/unadjusted over one year and provision has been kept againgst the amount. 9.2 (ii) Army Pension This represents pension paid to retired army personnel by the Bank of Tk. 3,703,760,763 as per Government decision which is reimbursable. Tk. 106,665,837 against the outstanding amount has already been reimbursed by the Government and kept in sundry deposit which is to be adjusted. Moreover an amount of Tk. 1,141,819,710 has been provided in the accounts against long outstanding. 9.3 Accrued income Accrued interest on loans & advances 394,524,710 303,701,536 Accrued interest on investment* 2,410,787,738 2,246,249,788 Accrued interest on balance with Other Banks & Financial Institutions 1,880,363,441 606,713,198 151,518,187 236,877,315 Accrued commission, exchange & brokerage Accrued other operating income 44,538,500 41,595,348 4,881,732,576 3,435,137,185 * Accrued Interest excludes amounting to Tk. 58,332,089 recorded previous year(s). However, the management was not sure about the source of that accrued interest. Management assumes that the amount was erroneously recorded as income during the previous year(s). As the error is not material, the accrued interest is adjusting with the total income/accrued income without restating the same. 9.4 Deferred Tax Deferred tax has been computed in accordance with provision of IAS -12 based on taxable temporary differences in the carrying amount of the assets/liabilities and their tax base as follows: i) Written down value of fixed assets a. Carrying amount (excluding land & building) b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) 258 Annual Report 2018 1,303,038,654 1,708,971,799 920,357,168 1,010,810,038 (382,681,486) (698,161,761) 40.00% 42.50% (153,072,594) (296,718,748)
  258. Notes to the Financial Statements Amount in Taka 31-Dec-18 ii ) Provision for Bad & Loss Loans and Advances * a. Carrying amount b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) iii) b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate 40.00% 42.50% 11,313,503,646 11,297,068,004 (1,780,035,228) (280,000,000) - - 1,780,035,228 280,000,000 40.00% 42.50% 712,014,091 119,000,000 (54,598,771) (30,273,771) - - 54,598,771 30,273,771 42.50% 12,866,353 (3,897,390,171) (3,897,390,171) - - 3,897,390,171 3,897,390,171 10.00% 10.00% 389,739,017 389,739,017 (1,711,265,740) (1,592,630,109) - - 1,711,265,740 1,592,630,109 10.00% 10.00% 171,126,574 159,263,011 8,989,074,835 8,994,204,742 - - (8,989,074,835) (8,994,204,742) 4.00% 4.00% Deferred tax asset/(liabilites) (359,562,993) (359,768,190) Revaluation reserve on Land a. Carrying amount b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate * Deferred tax asset/(liabilites) 4,304,467,512 (4,304,467,512) 3.00% (129,134,025) 4,304,467,512 (4,304,467,512) 3.00% (129,134,025) Loss in revaluation of share (Note-12.11) b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) Carry forward of loss on sale of share in current year a. Carrying amount b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) Revaluation reserve on Land a. Carrying amount b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate * vii.b) 26,581,336,481 40.00% a. Carrying amount vii.a) 28,283,759,114 21,839,508 Deferred tax asset/(liabilites) vi) (26,581,336,481) Provision for Death Relief Grant Scheme during the year (Note-12.16) a. Carrying amount v) (28,283,759,114) Provision for Supper Annuation Fund during the year (Note-12.14) a. Carrying amount iv) 31-Dec-17 259
  259. Notes to the Financial Statements Amount in Taka 31-Dec-18 viii ) Revaluation reserve on Building a. Carrying amount b. Tax base c. (Taxable)/deductible temporary difference (b-a) Applicable tax rate Deferred tax asset/(liabilites) total deferred tax assets/(liabilites)-A 31-Dec-17 509,153,705 (509,153,705) 40.00% (203,661,482) 523,700,954 (523,700,954) 42.50% (222,572,905) 11,762,791,741 10,969,742,516 Less: Opening deferred tax assets/ (liabilities)-B 10,969,742,516 Add: Adjustment to opening deferred tax asset resulting from reduction in 641,743,688 tax rate-C Deferred tax expense relating to the origination and reversal of temporary 1,434,792,913 differences (A-B-C) Less: Reduction in deferred tax income due to tax rate change 641,743,688 Deferred tax income 793,049,225 * As per 53H of Income Tax Ordinance 1984, 17II of Income Tax Rules 1984 and under the clause (b), (c), or (e) or subsection (1) of section 17 of the Registration Act 1908 9.4.a Year wise Deferred Tax breakdown for last 9 years Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2,232,196,835 3,545,392,538 2,796,355,659 4,398,529,766 6,554,559,973 6,961,853,368 8,344,803,824 11,208,175,703 10,969,742,516 11,762,791,741 2,232,196,835 3,545,392,538 2,796,355,659 4,398,529,766 6,554,559,973 6,961,853,368 8,344,803,824 11,208,175,703 10,969,742,516 Fixed assets, revaluation reserve of land and building, provision for bad/loss loan & advances, death relief grand scheme for the departed employees and loss of revaluation of shares have been considered during calculation of deferred tax due to having considerable taxable temporary differences. As per calculation of Deferred Tax Assets balance for the year ended December 31, 2018 has increased by the amount of Tk. 793,049,225 which charged to profit and loss account. The carrying amount has been arrived at by estimating temporary differences (based on analysis of prior years’ relevant figures) on account of bad/loss debts that are likely to be written off in future years out of the year-end total amount of provision for bad and loss loans and advances Tk. 28,283,759,114. As per BRPD Circular no. 11 dated 12 December 2011, the above amount of deferred tax originated against specific loan loss provision and included in the accumulated retained earning is not distributable as dividend. 9.5 Non-banking Assets The Bank has got the possession of ownership of the mortgage properties according to the judgment of the Honorable Court in accordance with the section 33(7) of “Artha Rin Adalat-2003”. An amount of Tk. 412,754,628 is reported in the financial statements as Non-Banking assets. 260 Annual Report 2018
  260. Notes to the Financial Statements Amount in Taka 31-Dec-18 9 .6 9(a) Software (Annexure G) Cost Balance at the beginning of the year Addition during the year Disposal / Transfer during the year Balance at the end of the year 1,249,994,906 3,365,147 (120,772) 1,253,239,281 1,202,855,622 47,210,369 (71,085) 1,249,994,906 Less: Accumulated Amortization Balance at the beginning of the year Charge for the year Disposal / Transfer during the year Balance at the end of the year Net Value (142,662,360) (122,873,749) 120,772 (265,415,337) 987,823,944 (22,222,247) (120,511,198) 71,085 (142,662,360) 1,107,332,546 55,524,785,411 126,500,590 89,928,546 34,231,350 20,516,043 2,508,973 3,055,122 55,801,526,035 (4,744,115,916) 51,057,410,119 49,417,524,622 107,947,671 61,250,052 63,151,534 9,490,968 5,718,375 3,055,122 49,668,138,344 (4,743,802,916) 44,924,335,428 23,529,390,694 13,871,567,614 15,464,852,930 8,064,537,764 23,529,390,694 12,420,898,985 1,450,668,629 13,871,567,614 20,252,232,930 3,277,157,764 23,529,390,694 13,839,028,985 32,538,629 13,871,567,614 10,677,157,764 3,984,725,000 802,655,000 8,064,852,930 23,529,390,694 167,538,629 5,200,000,000 1,418,130,000 7,085,898,985 13,871,567,614 7,400,000,000 4,787,380,000 3,277,157,764 15,464,537,764 135,000,000 5,200,000,000 1,418,130,000 32,538,629 6,785,668,629 Consolidated Other Assets Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction (s) 10 Borrowing from other banks including financial institutions & agents 10.1 Classification into the following broad categories In Bangladesh Outside Bangladesh 10.2 10.3 10.4 10.4.1 31-Dec-17 Segregated as: Secured (Secured by D.P Notes and agreements) Unsecured borrowing Maturity - wise grouping On demand Less than 3 months More than 3 months but less than 1 year More than 1 yesr but less than 5 year More than 5 years Term grouping Short Term Borrowing T.T buy (With Sonali Bank Limited) Borrowings from Local Bank Borrowings from Foreign Bank Credit Balance of NOSTRO Account (Annexure-E 1) 261
  261. Notes to the Financial Statements Amount in Taka 31-Dec-18 10 .4.2 Long Term Borrowing Rural Housing Scheme Borrowing from ADB Borrowing from EGBMP IFAD Loan -194 Borrowings from B. Bank (Bakna Basur Refinance Fund) Borrowings from B. Bank (Refinance Fund- Jute) Agrani Bank Shilpa Unnayan Bond 94,280 112,500 191,399,149 5,047,001 200,000,000 668,200,000 1,064,852,930 7,000,000,000 8,064,852,930 23,529,390,694 Agrani Bank 1st Subordinate Bond (Note-10.4.2.i) Total Long Term Borrowing 10.4.2.i Number Of Bonds Purchased Aggregate Principal Amount of the Bond Subscribed Janata Bank Limited 400 4,000,000,000 Investment Corporation of Bangladesh 300 3,000,000,000 Total 700 7,000,000,000 23,529,390,694 3,979,991,056 412,306,011 27,921,687,761 (4,392,297,067) 23,529,390,694 13,871,567,614 2,794,534,855 16,666,102,469 (2,794,534,855) 13,871,567,614 621,927,230,672 530,349,741,838 157,080,929,433 8,875,779,435 177,292,217,218 278,678,304,586 621,927,230,672 120,065,565,376 5,591,284,631 161,043,260,016 243,649,631,815 530,349,741,838 Consolidated borrowing from other banks, financial institutions and agents Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction (s) 11 Deposits and other accounts 11.1 Deposits and Other Accounts (Category wise) Current & Other Account (Note - 11.1.1) Bills payable (Note - 11.1.2) Saving Bank Deposits (Note - 11.1.3) Fixed Deposits (Note - 11.1.4) 262 264,781 112,500 183,479,184 4,099,000 200,000,000 697,850,000 93,520 1,085,898,985 6,000,000,000 7,085,898,985 13,871,567,614 Agrani Bank 1st Subordinate Bond Non-Convertible Subordinated Bond. The Bank with due approval from Bangladesh Bank and BSEC issued a 7-year Non-convertible Fully Redeemable Floating Rate Subordinated Bond of Tk. 7000.00 million (face value @ Tk 10.00 million) in which 6000.00 million issued in December 2017 and 1000.00 million issued in December 2018 through private placement to enhance Tier - II capital. The Bond will be redeemed at the end of 3rd, 4th, 5th, 6th and 7th year of maturity at 20% per year. Coupon rate of the issued bonds is variable with a floating rate between 7.00% and 10.00%. The instrument i.e. the Bond has been rated and awarded BBB+ by Alpha Credit Rating Limited in the long term with validity upto December 09,2018.  Although it’s a recognized component of Tier - II capital, the outstanding amount of the Bond is shown as a borrowing as per BB guidelines/ instruction. Following is the list of subscribers to this Bond: Investors Name 10(a) 31-Dec-17 Annual Report 2018
  262. Notes to the Financial Statements Amount in Taka 31-Dec-18 11 .1.1 11.1.1.i 11.1.1.ii Current & Other account Current Deposits (Note - 11.1.1.i) Balance with ATM Sundry Deposits (Note - 11.1.1.ii) Special Time Deposits (11.1.1.iii) Call Deposits (Note - 11.1.1.iv) Current Deposits Current Deposit-Government Organizations Current Deposit-Autonomous and Semi Autonomous Org Current Deposit-Non Financial Public Enterprises Current Deposit-Local Authority Current Deposit-Insurance Co.s & Pension Funds Public Current Deposit-Public Non-Banking Financial Org Current Deposit-Other Financial Public Organizations Current Deposit-Other Banks Current Deposit-Individuals and Others Current Deposit-Foreign Currency Current Deposit-Miscellaneous Sundry Deposits General Provident Fund Margin on Bills purchased Margin on Letters of Credit Margin on Letters of Guarantee Miscellaneous Margin Foreign Currency Key Deposit Staff Cash Security Foreign correspondence charges F. C Exp. Proceeds Commission Payable to Govt. Premium paid XPB Clearing Adjustment Self Employment Promotion Teachers Payment Boisko Bhata FSSAP Freedom Fighter Allowance Army Pension Small Enterprise Development Rural Finance Programme Hajj Deposit Others Clearing Cheque Sent for Collection T24 Debit Card Remote ON-US Transactions Debit Card Remote ON-US Commission SEQAEP Pre-paid Card Fees 31-Dec-17 42,869,023,340 878,848 9,158,000,201 104,940,665,090 112,361,954 157,080,929,433 39,815,994,197 1,046,848 8,533,471,529 71,594,213,224 120,839,578 120,065,565,376 7,535,527,393 3,522,300,526 5,059,250,608 1,926,507,891 187,937,025 199,796,246 143,090,692 618,131,981 22,162,754,352 1,465,834,740 47,891,886 42,869,023,340 6,412,893,233 3,029,503,058 4,874,898,342 1,534,806,616 101,679,699 178,923,523 189,149,457 603,865,512 21,374,945,361 1,468,123,121 47,206,275 39,815,994,197 3,403,447,286 11,690,472 3,382,846,190 379,362,143 32,001,863 213,866,111 10,443,323 23,524,641 2,136,800 85,686,484 74,399,146 856,976 3,862,616 391,671 674,933,599 3,970,128 17,410,554 53,388,471 71,671,159 167,260 5,008,021 613,863,880 82,202,185 9,459,841 1,409,381 9,158,000,201 3,083,404,019 18,799,852 2,845,837,742 361,574,083 25,662,258 250,622,269 8,418,432 23,341,083 2,533,848 46,062,138 49,932,205 856,976 17,769,539 163,280 456,536,673 10,805,480 353,754,449 58,735,134 290,653,631 87,825,469 5,432,476 60,000 507,753,417 3,883,163 18,709,160 2,935,372 1,409,381 8,533,471,529 263
  263. Notes to the Financial Statements Amount in Taka 31-Dec-18 11 .1.1.iii Special Notice Deposits Special Notice Deposit -Government Org. Special Notice Deposit -Autonomous and Semi Autonomous Organizations Special Notice Deposit -Non Financial Pub Enterprise Special Notice Deposit -Local Authority Special Notice Deposit -Insurance Co.s & Pension Funds-Public Special Notice Deposit -Public Non-Banking Financial Organizations Special Notice Deposit -Other Deposit Accepting Public Organizations Special Notice Deposit -Other Banks Special Notice Deposit -Individuals and Others 11.1.1.iv Call Deposits Call Deposit -Government Organizations Call Deposit -Autonomous and Semi Autonomous Org. Call Deposit -Non Financial Public Enterprises Call Deposit -Local Authority Call Deposit -Insurance Co.s & Pension Funds-Public Call Deposit -Public Non-Banking Financial Org. Call Deposit -Other Deposit Accepting Public Org. Call Deposit -Other Banks Call Deposit -Individuals and Others 11.1.2 11.1.3 264 Bills payable Draft payable TT’s payable MT’s payable Pay slip issued Pay order issued Inland Bill proceeds Awaiting for Remittance Foreign Bill proceeds Awaiting for Remittance Overdue DD payable Upahar cheque sold A/C FRMS Foreign D.D, T.T, & TC payable Saving Bank Deposits Saving Deposit -Government Organizations Saving Deposit -Autonomous and Semi Autonomous Organizations Saving Deposit -Non Financial Public Enterprises Saving Deposit -Local Authority Saving Deposit -Insurance Co.s & Pension Fund Saving Deposit -Public Non-Banking Financial Organizations Saving Deposit -Other Financial Public Organizations Saving Deposit -Other Banks Saving Deposit -Individuals and Others Female Secondary School Assistance Project Saving Deposit -Miscellaneous Saving Deposit -Foreign Currency Saving Deposit -Student Annual Report 2018 31-Dec-17 31,804,473,069 10,412,327,805 51,328,195,172 1,610,307,885 283,012,479 615,153,388 581,460,924 1,294,890,484 7,010,843,884 104,940,665,090 23,820,522,509 7,915,120,448 30,771,181,134 1,136,513,719 183,067,493 516,210,503 299,974,601 928,630,002 6,022,992,815 71,594,213,224 16,462,243 871,460 979,511 22,093,636 692 206,369 71,748,043 112,361,954 20,333,177 3,142,330 1,101,023 9,185,383 692 206,369 86,870,604 120,839,578 649,543,559 1,409,300 6,050 209,845,363 5,989,560,944 4,213,667 1,758,253,485 18,456,874 36,732 10,000 244,443,461 8,875,779,435 727,325,808 1,509,300 4,350 203,865,140 3,039,863,936 331,019 1,407,568,539 20,616,806 194,740 10,000 189,994,993 5,591,284,631 1,729,063,538 3,778,692,319 370,750,335 261,398,062 1,573,805,598 32,091,685 28,512,199 9,190,006 168,345,378,754 67,701,691 263,376,384 765,627,619 66,629,028 177,292,217,218 1,175,632,210 3,581,944,797 334,194,514 200,424,737 1,628,600,476 19,516,031 37,822,978 2,296,550 153,057,244,037 127,010,041 269,209,113 561,801,342 47,563,190 161,043,260,016
  264. Notes to the Financial Statements Amount in Taka 31-Dec-18 11 .1.4 Fixed Deposits Fixed Deposits (11.1.4.1) 243,323,528,584 210,471,056,664 Deposit Pension Scheme 39,162,924 39,217,698 Agrani Bank Pension Scheme 168,737,768 218,664,632 Month wise Fixed Deposits 952,880 1,023,224 Non Resident Special Deposits 272,680 335,159 Agrani Bank Bishesh Shanchay 31,336,345,630 27,882,107,539 Agrani Bank Monthly Income Scheme 71,439,525 122,430,718 Agrani Bank Monthly Deposit Scheme 129,045,289 1,663,285,731 3,516,416,400 3,202,254,268 16,841,900 22,379,500 9,399,074 8,550,000 Agrani Bank Millionaire Deposit Scheme 39,788,479 12,078,906 Agrani Bank Lakhopoti Deposit Scheme 6,897,550 1,689,389 Agrani Bank Probashi Deposit Scheme 2,010,202 1,269,818 Agrani Bank Deposit Scheme for Woman 9,250,089 3,288,569 737,693 - 4,790,091 - Agrani Bank Double Benefit Scheme Agrani Bank Quarterly Income Scheme Agrani Bank Double Benefit Scheme (New) AGB Senior Citizen Savings Scheme AGB Sanchaya Pension Scheme AGB Wages Earner Deposit Scheme 11.1.4.1 2,687,828 - 278,678,304,586 243,649,631,815 Fixed Deposit-Government Organizations 34,528,225,444 23,181,122,830 Fixed Deposit-Autonomous and Semi Autonomous Organizations 43,595,937,510 35,797,283,116 Fixed Deposit- Non Financial Public Enterprises 95,552,820,092 80,207,444,891 685,892,315 1,093,336,179 Fixed Deposit -Insurance Co.s & Pension Funds Public 1,234,109,238 1,062,384,965 Fixed Deposit -Public Non-Banking Financial Organizations 1,280,079,476 2,437,677,925 Fixed Deposit -Other Financial Public Organization 1,102,411,977 786,824,693 Fixed Deposit -Other Banks 7,744,175,796 5,668,123,039 59,587,491,682 60,223,936,609 9,760,751 9,685,971 Fixed Deposits Fixed Deposit -Local Authority Fixed Deposit -Individuals and Others Non-Resident Foreign Currency Deposit (NFCD) Fixed Deposit -Deceased Account 2,624,303 3,236,446 245,323,528,584 210,471,056,664 (2,000,000,000) - 243,323,528,584 210,471,056,664 On demand 20,681,354,885 20,770,285,631 Within 1 month 30,600,329,486 34,565,402,931 Within 1 to 3 months 125,195,162,791 130,893,976,397 Within 3 to 12 months 144,986,686,376 85,898,542,099 less: Inter Unit tranasction 11.2 31-Dec-17 Maturity Grouping of Deposits and Other Accounts Within 1 to 5 years 165,157,572,466 110,233,719,146 More than 5 years 135,306,124,668 147,987,815,634 621,927,230,672 530,349,741,838 265
  265. Notes to the Financial Statements Amount in Taka 31-Dec-18 11 .3 Geographical Location - wise Deposits Dhaka Region 309,248,077,706 253,612,738,269 Chattogram Region 73,617,375,099 57,231,242,472 Khulna Region 40,629,051,008 37,294,535,475 Rajshahi Region 37,588,947,304 34,064,434,992 Barishal Region 16,947,979,718 15,710,710,008 Sylhet Region 23,761,607,277 21,432,689,999 Rangpur Region 18,766,800,601 18,424,487,768 Mymensing Region 36,172,091,079 33,968,665,663 Cumilla Region 47,977,756,427 43,533,159,322 17,217,544,453 621,927,230,672 15,077,077,870 530,349,741,838 Government Organizations (President, PM’s Office, Ministry & Judiciary) 75,613,749,444 54,610,503,959 Autonomous & Semi Autonomous Bodies 61,310,129,619 50,326,993,749 9,666,594,636 7,203,121,472 Faridpur Region 11.4 Sector wise Deposits Deposit money bank 11.5 Other public sector 164,079,657,128 127,604,919,576 Private sector 311,257,099,845 290,604,203,082 621,927,230,672 530,349,741,838 618,131,981 9,190,006 7,744,175,796 1,294,890,484 206,369 9,666,594,636 603,865,512 2,296,550 5,668,123,039 928,630,002 206,369 7,203,121,472 621,927,230,672 530,349,741,838 Inter-Bank Deposits Current Deposits Savings Deposits Fixed Deposits Special Notice Deposits Call Deposits 11(a) Consolidated Deposits and other accounts Agrani Bank Limited Agrani Equity & Investment Limited 5,487,819 8,198,118 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 621,932,718,491 530,357,939,956 (126,692,320) (366,131,322) 621,806,026,171 529,991,808,634 19,798,688,304 5,931,530,574 4,000,000 1,268,042,144 1,045,533,425 17,059,532,213 5,101,394,580 3,600,000 1,380,310,335 846,793,535 184,091,987 152,240,967 Less: Inter-comopany transaction(s) 12 Other Liabilities Interest suspense (Note - 12.1) Provision for expenses (Note - 12.2) Provision for Auditors Fee (Note - 12.3) Sundry creditors Tax deducted at source VAT on services 266 31-Dec-17 Annual Report 2018
  266. Notes to the Financial Statements Amount in Taka 31-Dec-18 Excise duty Levy on interest payment Levy & Surcharge on interest payment (Bonds) Provision for Taxation (Note - 12.4 & Annexure-F) Provision for classified loans & advances (Note - 12.5) General provision maintained against UC loan (Note - 12.6) General provision for special mention account (Note - 12.7) 3 % General reserve for consumer financing (Note - 12.8) Provision for off balance sheet exposures (Note - 12.10) Payable to Islamic Banking Unit Provision for investment (Note - 12.11) Provision for Balance with Other Banks & Financial Institutions Provision for Other Assets (Note - 12.12) Provision for Incentive Bonus (Note - 12.13) Employees superannuation fund (Note - 12.14) Employees gratuity fund (Note - 12.15) Death relief grant scheme (Note - 12.16) Employees Benevolent Fund (Note - 12.17) Reserve for unforeseen losses Duty Draw back Imprest Fund Doctors self employment program Collection accounts Cash incentive to exporters SPL account MEDU fund Export Development Fund Govt. bond for land mortgage loan Special block account SPL block account (DD,TT, MT & PO) Unclaimed deposit 10 years & above Service charge on CIB report Provision for balance of bilateral trade Customer Fund Adjustment Account Vostro Account SIDR ADIP Project Fund Reserve Fund for Rebate Provision for arear of staff salary Interest waived on staff house building loan Interest rebate on good borrowers Branch Adjustment (Note- 12.18) 12.1 Interest Suspense Account Balance at the beginning of the year Add: Transferred during the year Less: Transferred to Income during the year Less: Amount waived/ written off during the year Balance at the end of the year 31-Dec-17 595,153,076 10,908,099 36,658 19,098,362,325 29,646,774,893 3,052,901,550 168,880,174 47,351,404 1,233,377,406 217,698 3,897,390,171 600,000,000 5,082,803,973 1,403,727,827 1,780,035,228 8,486 54,598,771 36,142,016 7,278,112 1,600,000 5,073,957 13,752,902 363,941,607 840,897 189 9,730,948 3,458 986,945 2 1,198,733 35,385,711 389,114 19,132,387 10,868,222 4,485 10,412,449 20,000,000 6,669,380,908 102,110,537,215 544,987,884 16,981,861 43,086 15,837,722,120 27,501,482,529 3,861,656,269 72,904,470 72,109,787 1,233,377,406 217,698 3,897,390,171 4,837,046,847 1,525,796,705 280,000,000 8,486 30,273,771 24,981,238 7,278,112 4,501 1,600,000 7,656,504 24,995,652 384,711,474 170,322,645 840,897 189 9,730,948 1,638,725 2 99,024,806 35,385,711 389,114 20,267,852 5,465,905 4,485 8,712,476 20,000,000 3,887,347,327 88,966,229,283 17,059,532,213 6,960,471,304 (4,006,817,422) (214,497,791) 19,798,688,304 13,343,427,150 7,391,778,719 (3,137,227,499) (538,446,157) 17,059,532,213 267
  267. Notes to the Financial Statements Amount in Taka 31-Dec-18 12 .2 Provision for expenses Provision for Interest on Savings Provision for Interest on DPS 91,400 9,883,417 404,797 29,255 Provision for Interest on FDR 4,040,016,661 3,149,112,477 4,997,555 9,506,577 Provision for Interest on Borrowings Provision for ABS Un-disbursed Salary and Other staff benefit Provision for other expenses 29,127,273 59,510,007 1,119,617,207 1,145,015,865 2,241,319 1,744,178 132,701,189 105,444,982 Provision for Interest on ABMIS 4,484,938 4,580,646 Provision for Interest on ABMDS 32,940,855 183,691,987 Provision for Interest on ABDBS 547,141,320 427,293,384 5,006,838 4,688,478 Provision for Interest on Agrani Bank Quarterly Income Scheme 274,100 188,275 Provision for Interest on Agrani Bank Double Benefit Scheme (New) 104,828 423,885 Provision for Interest on Agrani Bank Millionaire Deposit Scheme 2,551,716 159,574 Provision for Interest on Agrani Bank Lakhopoti Deposit Scheme 592,312 30,175 525 - 206,715 - 1,399 - Provision for Interest on Bakna Basur Refinance Fund Provision for Interest on Agrani Bank Probashi Deposit Scheme Provision for Interest on Agrani Bank Deposit Scheme Provision for Interest on Agrani Bank AGB Senior Citizen Provision for Interest on Agrani Bank Deposit Scheme for Woman Balance at the end of the year 18 18 5,931,530,574 5,101,394,580 3,600,000 3,600,000 (3,600,000) (3,600,000) 4,000,000 3,600,000 4,000,000 3,600,000 15,837,722,120 13,154,922,120 Provision for Auditors Fee Balance at the beginning of the year Less: Paid during the year Add: Provision made during the year Balance at the end of the year 12.4 181,234 8,937,775 Provision for Interest on STD Provision for Interest on ABPS 12.3 31-Dec-17 Provision for taxation: Balance at the beginning of the year Add: Transferred to Provision for Income Tax during the year Balance at the end of the year 3,260,640,205 2,682,800,000 19,098,362,325 15,837,722,120 Income tax assessment for last few years are pending with various stages of income tax appeal process. Income Tax assessment has been finalized up to 2004 (except 2002) and reference cases are pending for the years 2002, 2005, 2006, 2008, 2009, 2010, 2011, 2012. Appeal is pending for the year 2013 & 2014. The returns have been submitted for the years 2015, 2016 & 2017. The bank has kept a provision of Tk. 326.06 crore for the year 2018 as per Income Tax Ordinance 1984. 12.5 Provision for Classified loans and advances Balance at the beginning of the year Add: Recoveries of amount previously written off Add: Specific provision for the year Less: Provision Add back during the year Less: Written off/ waived Provision held at the end of the year 268 Annual Report 2018 27,501,482,529 30,574,462,405 778,235,486 902,969,108 2,024,729,629 - - (3,899,757,179) (657,672,751) (76,191,805) 29,646,774,893 27,501,482,529
  268. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 The Bank has shown some loans and advances as unclassified by dint of stay order of the Honorable High Court . But the actual position of those loans and advances is classified on the basis of objective criteria and qualitative judgment as per BRPD circular of Bangladesh Bank regarding provision of classification of loans and advances. The Bank has maintained 1% provision against those unclassified loans and advances. Moreover, Bank has maintained additional required provision of those loans and advances for 2014, 2015, 2016 and 2018. The Bank has maintained 60% provision for 2017 as per approval of Bangladesh Bank vide letter no BRPD(P-1)/661/13/2018-978 dated 30-01-2018. 12.6 12.7 12.8 12.9 General Provision maintained against UC loans Balance at the beginning of the year Add: Provision made during the year Less: Provision add back for the year Provision held at the end of the year 3,861,656,269 (808,754,719) 3,052,901,550 4,951,279,282 (1,089,623,013) 3,861,656,269 General Provision maintained against UC loans includes 1% provision against loans and advances that has been shown unclassified by dint of stay order of the Honorable High Court. General Provision for SMA Loans Balance at the beginning of the year 72,904,470 68,463,668 Add: Provision made during the year 95,975,704 4,440,802 Less: Provision add back for the year Provision held at the end of the year 168,880,174 72,904,470 3% General reserve for consumer financing: Reserve held at the beginning of the year Add: Additional reserve for the year Less: Provision add back for the year 72,109,787 (24,758,383) 129,158,117 (57,048,330) Reserve held at the end of the year 47,351,404 72,109,787 3,052,901,550 168,880,174 3,221,781,724 3,861,656,269 72,904,470 3,934,560,739 308,022,133 1,054,993,646 28,283,759,114 29,646,774,893 32,868,556,617 423,000,904 497,145,144 26,581,336,481 27,501,482,529 31,436,043,268 Provision for Loans & Advances: Agrani Bank Limited General provision i) Standard (including staff Loan) * ii) Special Mention Accounts ( SMA) Specific provision i) Substandard ii) Doubtful iii) Bad/Loss Total * General provision is kept @ 1% on general loans and advances and 1% on house finance & loan for professionals under consumer financing and 3% on consumer financing. The Bank was supposed to keep provision amounting to Tk. 4,741.29 crore against total loans and advances. But in response to the Bank’s request, Bangladesh Bank has allowed vide letter # BRPD(P-1)/661/13/2019-3353 dated 30 April 2019 to keep 77% of total required provision for the year 2018. Bangladesh Bank has also granted approval for not adjusting the rest of the exempted provision deficiency while calculating the Minimum Capital Requirement (MCR) of the Bank for the year 2018. While calculating the provision, the Bank deducted Tk. 593.10 crore as the deferred provision in compliance with letter # BRPD(P-1)/661/13/2018-2640 dated 18 April 2018 and letter # BRPD(P-1)/661/13/2018-9082 dated 29 November 2018. As such total required provision has been derived at Tk. 4,148.19 crore (Tk. 4,741.29 crore - Tk. 593.10 crore = Tk. 4,148.19). The Bank has kept provision amounting to Tk. 3,286.86 crore against loans and advances in the year 2018. An amount of provisoin shortfall stood at Tk. 861.33 (Tk. 4,148.19 crore - Tk. 3,286.86 crore) at the end of providing required provision as per Bangladesh Bank approval. 269
  269. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 As per the request of the Bank through letter # BRPD(P-1)/661/13/2019-3353 dated 30 April 2019 Bangladesh Bank allowed to keep 77% provision on total required provision against loans & advances subject to some conditions. The conditions are i. total net profit should not be more than 5% of the paid-up capital and ii. Provision cannot be add backed if already kept. As a result, the bank kept Tk. 92.75 crore more than required provision. In the year 2017 as per request of the Bank, Bangladesh Bank has allowed vide letter # BRPD(P-1)/661/13/2018-2640 dated 18 April 2018 to keep provision at least Tk. 2,375.17 crore against required provision of Tk. 3,264.82 against classified loans and advances and re-scheduled loans in the year 2017 and to keep the remaining amount of provision in the next 3 (three) years equally. Bank had a provision shortfall of Tk. 889.65 after providing minimal provision of Tk. 2,375.17 in 2017 as per Bangladesh Bank approval. In line with the granted approval, the Bank has provided the first installment of the deferred provision of Tk. 296.55 crore in the accounts and the remaining provision of (Tk. 889.65 crore - Tk. 296.55 crore) = Tk. 593.10 crore will be kept in 2019 and 2020 equally. While calculating the required provision, the bank follows the circular of Bangladesh Bank. And apply the facility given by BB through Letter No. BRPD(P-1)/661/13/2018-2640 Dated 18-04-2018. Based on the provision for the year ended 31 December 2017. Then the Bank keep the provision @77% in compliance with letter No. BRPD(P-1)/661/13/2019-3353 Dated 30-04-19 issued by BB on due basis for the provision of 2018. 12.10 Provision for off balance sheet exposure Balance at the beginning of the year 1,233,377,406 Add: Provision made during the Year Less: Provision add back during the Year 394,354,459 - - 1,233,377,406 1,233,377,406 Balance at the beginning of the year 3,897,390,171 6,530,823,229 Add: Provision made during the Year - - Less: Adjustment during the Year - (1,921,261,357) Less: Provision add back during the Year - (712,171,701) 3,897,390,171 3,897,390,171 Balance at the end of the year 12.11 839,022,947 Provision for diminution in the value of Investment: Balance at the end of the year Other Investments included Tk. 3,000 million for investment in shares under buy back agreement from Beximco Group. The buy-back agreement is expired in 2012 for the second time. Agrani Bank Limited has completed all formalities to transfer of shares purchased from the above three companies. Meanwhile only the shares of GMG Airlines Limited have been transferred in favour of Agrani Bank Limited with book value of Tk. 670 million and market value nill respectively. It is noted that, the BEXIMCO Group approached a proposal vide a letter dated 28 March, 2018 where they expressed their interest to resolve outstanding liabilities under share sale and buy back agreement. The matter has been tabled out in 554th meeting of the Board of Directors of the Bank held on 09 April, 2018 and the Board resolved the issue that the outstanding liabilities under said Buy Back Agreement might be adjusted after being repaid Tk 307.00 crore by the BEXIMCO within three months from the date the decision communicated to them and fulfillment of some terms and conditions set forth in the board resolution. Meanwhile a letter dated 11 April, 2018 has been sent to the BEXIMCO informing the decision of the Board of Directors of the Bank. Upto 31st December 2018 BDT 130.00 crore has been received from BEXIMCO Group. The repayment of the rest amount of BDT 177.00 crore is under process. 270 Annual Report 2018
  270. Notes to the Financial Statements Amount in Taka 12 .12 Provision for Other Assets Protested bill (Note - 12.12.d) Sundry Debtors Staff & Others Clearing Adjustment Suspense Accounts Army Pension Paid Suspense Accounts Civil Pension Paid Legal Charges CBL Pak A/c Receivable from Agrani SME Financing Company Accrued Income Stationary & Stamp Advance Deposit & Pre-payment Foreign Correspondent Draft Paid Wage Earner Bond BCCI Bank-London (Note - 12.12.e) Bank of Ceylon Balance with Al-Rajhi Foreign Exchange (Note - 12.12.c) Fixed Assets Branch Adjustment (Note - 12.12.f) Loan Application Form Exempted Loans & Interest on Exempted Loans (Note - 12.12.g) Provision for DD Paid without Advice Dividend receiveable from Preference Share 31-Dec-18 31-Dec-17 70,820,672 311,541,583 1,449,669 1,141,819,710 13,981,210 72,994 2 55,673,000 29,296,844 15,547,105 37,718,565 910,869 25,632,202 1 1 21,913,328 1,129,184,000 239,520 253,839,376 24,193,460 1,948,969,862 5,082,803,973 72,631,505 64,206,604 1,449,669 1,141,819,710 13,981,210 68,508 2 55,673,000 29,296,844 15,547,105 37,718,565 910,869 25,632,202 1 1 21,913,328 1,129,184,000 253,850,402 24,193,460 1,948,969,862 4,837,046,847 As per BRPD circular no 14 dated June 25, 2001 of Bangladesh Bank, the Bank has maintained a provision of Tk. 508.28 crore for the year 2018 against other assets that are outstanding for more than one year. 12.12.a 12.12.b 12.12.c 12.12.d 12.12.e In the year 2001 Tk. 1.00 crore had been made provision to adjust agri credit exemption on river erosion. An amount of Tk. 1,176,472 of that provision was unused from 2005 which has been transffered to Retained Earnings as per the decision of the competent authority in 2017. Cash and Cash Equivalent at the year-end 2016 included Libyan Currency (2,612,023) equivalent to BDT 147,579,300 which was purchased by Agrani Bank Limited before the Libyan civil war also referred as to Libyan revolution of 17th February in 2011. After that war those Libyan currencies were obsolete and Tk. 100,000,000 had been made provision against those Libyan Currency. After getting reimbursement from Bangladesh Bank the provision has been adjusted in the year 2017. Debit balance of BDT 347,892,609 (equivalent to USD 6.04 million) with Al Rajhi Foreign Exchange was outstanding since long against which 100% provision had been made. As there was no possibility to recover the outstanding balance, the amount has been written-off as per the decision of 539th board meeting of board of directors held on 24-12-2017. Provision for protested bills Balance at the beginning of the year Adjustment during the Year Addition during the Year Balance at the end of the year Protested Bills arises due to accidental loss of fraud, robbery, theft etc. Provision for balance with BCCI Bank- London Balance at the beginning of the year Provision made during the year Written-off during the year Balance at the end of the year 72,631,505 (5,640,322) 3,829,489 70,820,672 57,897,924 (2,267,769) 17,001,350 72,631,505 1 1 12,776,658 843,887 (13,620,544) 1 271
  271. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 The amount of Tk . 13,620,545 was outstanding in the year 2017 with BCCI Bank-London since long against which 100% provision was made.As there was no possibility to recover the outstanding balance due to liquidation of the company, the amount has been written-off as per the decision of 539th board meeting of board of directors held on 24-12-2017. 12.12.f Provision for Branch Adjustment Balance at the beginning of the year Provision add back Provision made during the year Balance at the end of the year 1,129,184,000 1,129,184,000 1,205,884,000 (76,700,000) 1,129,184,000 “Other Liabilities” include a net credit balance of Tk 6,669,380,908 as Branch Adjustment (such amount at 31 December 2017 was net creditt balance of Tk 3,887,347,327). While the full reconciliation process in underway, the Bank has made provision for Tk. 112.92 crore. 12.12.g Provision for Exempted Loans & Interest on Exempted Loans Balance at the beginning of the year Adjustment during the Year Provision add back during the Year 12.13 259,952,949 (11,026) (112,070,751) - - Provision made during the year - 105,968,204 Balance at the end of the year 253,839,376 253,850,402 1,525,796,705 1,209,681,750 (1,182,934,713) (1,045,919,663) Incentive Bonus: Balance at the beginning of the year Amount paid during the Year Addition during the Year Provision for the Year Balance at the end of the year 12.14 253,850,402 865,835 2,034,618 1,060,000,000 1,360,000,000 1,403,727,827 1,525,796,705 Employees Superannuation Fund 280,000,000 500,000,000 Addition during the year Balance at the beginning of the year 1,598,011,059 1,431,261,790 Provision made during the year 1,500,000,000 1,260,000,000 (1,597,975,831) (2,911,261,790) - - 1,780,035,228 280,000,000 Amount Transffered to SAF’s SB A/C Amount of pension paid during the year Balance at the end of the year According to the actuarial report submitted on 27 May 2018, a deficit of BDT 27,830,000,000 in the provision of Employees Superannuation Fund (SAF) as on 31 March 2018 has been shown. The said report contains, among others, phase-wise contribution to the provision for superannuation fund instead of providing the full amount of deficit in one go. Accordingly the bank is to be contributed BDT 500 crore in the first year. As the first year provision is to cover 09 (nine) months from 01 April 2018 to 31 December 2018, the amount comes to BDT 375 crore. However, the bank has provided BDT 313.98 crore (BDT 163.98 crore as 75% of Basic salary of current year and BDT 150 crore in addition to that). Thus there remains a shortfall of BDT 61.05 crore in the provision as on 31 Dec 2018. 12.15 272 Employees Gratuity Fund Balance at the beginning of the year Addition during the year Amount Transferred to Gratuity’s SB A/C Amount of Gratuity paid during the year Balance at the end of the year Annual Report 2018 8,486 378,752,076 (378,752,076) 8,486 339,299,512 (339,299,512) 8,486 8,486
  272. Notes to the Financial Statements Amount in Taka 31-Dec-18 12 .16 12.17 12.18 31-Dec-17 Death relief grant scheme Balance at the beginning of the year 30,273,771 61,698,771 Provision made during the year 70,000,000 12,500,000 Amount paid/adjusted during the year (45,675,000) (43,925,000) Balance at the end of the year 54,598,771 30,273,771 Balance at the beginning of the year 24,981,238 24,783,715 Provision made during the year 30,000,000 20,000,000 Amount paid/adjusted during the year (18,839,222) (19,802,477) Balance at the end of the year 36,142,016 24,981,238 Main Office Account (MO) 1,159,989,459,117 1,159,903,733,385 New General Account (NG) 1,155,652,293,545 1,155,594,636,853 Employees Benevolent Fund Branch adjustment: Debit balance Instant Financial Massaging System (IFMS) Inter-Branch Account for Online Transactions Computerized Main Office Account (CMO) 21,258,959,698 21,258,959,698 952,483,696,783 704,229,083,187 772,370,005,832 666,113,817,746 1,050,667,093,339 816,580,212,885 5,112,421,508,314 4,523,680,443,754 Main Office Account (MO) (1,160,786,468,639) (1,160,575,615,059) New General Account (NG) (1,155,535,467,375) (1,155,574,476,636) (21,278,495,787) (21,278,495,787) Inter-Branch Account for Online Transactions (952,482,439,078) (704,206,978,794) Computerized Main Office Account (CMO) (779,896,451,448) (670,925,420,663) Computerized New General Account (CNG) Less:- Credit balance Instant Financial Massaging System (IFMS) Computerized New General Account (CNG) (1,049,111,566,895) (815,006,804,142) (5,119,090,889,222) (4,527,567,791,081) (6,669,380,908) (3,887,347,327) During the year net balance of branch adjustment arrived as credit has been shown under head “Other Liabilities “.The Net debit balance of Branch Adjustment account arrived due to transit in responding entries. 12(a) Consolidated other liabilities Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited 102,110,537,215 88,966,229,283 1,715,684,083 1,798,635,541 265,938,566 273,130,100 Agrani Exchange House Private Limited, Singapore 50,542,102 84,261,887 Agrani Remittance House SDN. BHD., Malaysia 55,423,332 80,569,524 Agrani Remittance House Canada Inc. 54,554,683 61,748,298 Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) 53,349,176 53,349,176 104,306,029,157 91,317,923,809 (124,682,565) (124,369,565) 104,181,346,592 91,193,554,244 273
  273. Notes to the Financial Statements Amount in Taka 31-Dec-18 12 (a).1 Provision for Loans & Advances: Agrani SME Financing Com. Ltd. General provision i) Standard (including Staff Loan) ii) Special Mention Accounts ( SMA) Specific provision i) Substandard ii) Doubtful iii) Bad/Loss Total 12(a).2 Consolidated Provision for Loans & Advances General provision i) Standard (including staff Loan) ii) Special Mention Accounts ( SMA) Specific provision i) Substandard ii) Doubtful iii) Bad/Loss Total 31-Dec-17 3,627,131 3,553,596 7,180,727 2,428,108 2,547,600 4,975,708 3,299,759 4,074,330 28,153,061 35,527,150 42,707,877 2,421,800 2,647,500 23,527,344 28,596,644 33,572,352 3,056,528,681 172,433,770 3,228,962,451 3,864,084,377 75,452,070 3,939,536,447 311,321,892 1,059,067,976 28,311,912,175 29,682,302,043 32,911,264,494 425,422,704 499,792,644 26,604,863,825 27,530,079,173 31,469,615,620 13 13.1 Share Capital Authorized Capital The authorized capital of the Bank is Tk.2,500.00 crore divided into 250,000,000 ordinary shares of Tk.100.00 each. 13.2 Issued, subscribed and fully paid up capital 20,722,940,400 The paid up capital of the Bank was Tk. 9,912,940,400 divided into 99,129,404 ordinary shares @ Tk. 100.00 up to 29 December 2013. On 26 December 2013, Bank & Financial Institutions Division, Ministry of Finance has issued a letter # 53.013.002.00.00.80.2013 giving the permission to raise paid up capital by Tk. 10,810,000,000 to reduce capital shortage of the Bank. Subsequently, the Board of Directors in it’s 353rd board meeting held on 30 December 2013 approved the matter and increased the paid up capital to Tk. 20,722,940,400 by issuing 108,100,000 right shares to the Government of the People’s Republic of Bangladesh represented by Secretary, Finance Division, Ministry of Finance of the Government of the People’s Republic of Bangladesh. Therefore, the total number of ordinary shares reached to 207,229,404 shares. Earnings Per Share Earnings per share (EPS) have been computed by dividing the profit after tax by the weighted average number of ordinary shares as on 31 December 2018. 13.3 13.3.1 13.3.2 13.3(a) 274 20,722,940,400 Weighted average number of shares Number of shares before bonus share and right share issued Issue of bonus share & right share Weighted average number of shares Basic Earnings Per Share Profit attributable to the shareholders of ABL for the year (A) Weighted average number of ordinary shares outstanding (B) Earnings per share (A/B) Consolidated Earnings Per Share Profit attributable to the shareholders of ABL & its subsidiaries for the year (A) Weighted average number of ordinary shares outstanding (B) Earnings per share (A/B) Annual Report 2018 207,229,404 207,229,404 207,229,404 207,229,404 1,035,546,785 207,229,404 5.00 6,759,290,210 207,229,404 32.62 1,103,990,483 207,229,404 5.33 6,939,850,369 207,229,404 33.49
  274. Notes to the Financial Statements Amount in Taka 31-Dec-18 13 .4 31-Dec-17 Solo basis Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-III) A. Regulatory Capital: 1. Tier-1 Capital (Going concern capital) 26,967,700,000 20,663,400,000 2 .Tier-2 Capital (Gone concern capital) 12,792,200,000 13,819,200,000 3. total Regulatory Capital (1+2): B. total Risk Weighted Assets (RWA): 39,759,900,000 34,482,600,000 394,137,600,000 336,788,100,000 C. Capital to Risk Weighted Assets Ratio (CRAR) (A3 / B) X 100 10.09% 10.24% D. Tier-1 Capital to RWA (A1 / B) X 100 6.84% 6.14% E. Tier-2 Capital to RWA (A2 / B) X 100 3.25% 4.10% 39,413,760,000 33,678,810,000 346,140,000 803,790,000 F. Minimum Capital Requirement (10% of RWA) G. Capital Surplus / (Shortfall) Capital Requirements 13.4(a) 2018 2017 Required Held Required Held Tire-1 6.00% 6.84% 6.00% 6.14% Tire-2 4.00% 3.25% 4.00% 4.10% Total 10.00% 10.09% 10.00% 10.24% Consolidated Minimum Capital Requirement (MCR) under Risk Based Capital (Basel-III) A. Regulatory Capital: 1. Tier-1 Capital (Going concern capital) 27,191,300,000 2 .Tier-2 Capital (Gone concern capital) 12,792,200,000 13,819,400,000 39,983,500,000 34,634,100,000 398,428,100,000 341,640,000,000 10.04% 10.14% D. Tier-1 Capital to RWA (A1 / B) X 100 6.83% 6.09% E. Tier-2 Capital to RWA (A2 / B) X 100 3.21% 4.05% 39,842,810,000 34,164,000,000 140,690,000 470,100,000 3. total Regulatory Capital (1+2): B. total Risk Weighted Assets (RWA): C. Capital to Risk Weighted Assets Ratio (CRAR) (A3 / B) X 100 F. Minimum Capital Requirement (10% of RWA) G. Capital Surplus / (Shortfall) Capital Requirements 13.5 20,814,700,000 2018 2017 Required Held Required Held Tire-1 6.00% 6.83% 6.00% 6.05% Tire-2 4.00% 3.21% 4.00% 4.09% Total 10.00% 10.04% 10.00% 10.14% Solo basis Regulatory Capital: Tier-1 Capital Fully Paid-up Capital / Capital lien with BB Statutory Reserve General Reserve Retained Earnings Benefit from Deferred Tax Assets Sub-Total 20,722,900,000 20,722,900,000 8,496,100,000 7,795,500,000 537,100,000 537,100,000 (683,100,000) (1,032,100,000) 58,800,000 329,100,000 29,131,800,000 28,352,500,000 275
  275. Notes to the Financial Statements Amount in Taka 31-Dec-18 Deductions from Tier-1 Capital Goodwill and all other intangible assets Shortfall in provisions required against classified loans Deferred Tax Assets Sub Total Total Regulatory Tier-1 Capital Tier-2 Capital General Provision (UC + SMA + Off B/S exposure+ Consumer Finance) Subordinated debt/instruments issued by the Bank meeting BB criteria Revaluation Reserve (50% of Fixed Assets and Securities & 10% of Equities) Sub Total Deductions from Tier-2 Capital Revaluation Reserve for Fixed Assets, Securities and Equity Securites Total Regulatory Tier-2 Capital Total Regulatory Capital (Tier-1 + Tier-2) 31-Dec-17 987,800,000 1,176,300,000 2,164,100,000 26,967,700,000 1,107,300,000 6,581,800,000 7,689,100,000 20,663,400,000 4,502,600,000 7,000,000,000 6,447,900,000 17,950,500,000 5,240,000,000 6,000,000,000 6,447,900,000 17,687,900,000 5,158,300,000 12,792,200,000 39,759,900,000 3,868,700,000 13,819,200,000 34,482,600,000 In response to Bank request, Bangladesh Bank allowed the Bank vide letter no-BRPD(BFIS)661/14(B)P/2019/1798 dated 03 March 2019 to deduct deferred tax assets 10% in 2018 to calculate Tier-1 Capital. The Bank has complied with the above permission. While calculating CAR, the Bank did not comply with para 3.4.9 of the guideline of Risk-Based Capital Adequency dated 21 December 2014 issued by Bangladesh Bank. This is because para was not included in the format given by BB through letter 13.5(a) 276 no DOS(CAMS)1157/01(II)-2016-2851 dated 23 June 2016. Consolidated Regulatory Capital: Tier-1 Capital Fully Paid-up Capital / Capital lien with BB Statutory Reserve General Reserve Retained Earnings Benefit from Deferred Tax Assets Sub-Total: 20,722,900,000 8,544,200,000 591,800,000 (562,300,000) 58,800,000 29,355,400,000 20,722,900,000 7,834,500,000 591,800,000 (974,500,000) 329,100,000 28,503,800,000 Deductions from Tier-1 Capital Goodwill and all other intangible assets Shortfall in provisions required against classified loans Deferred Tax Assets Sub Total Total Regulatory Tier-1 Capital 987,800,000 1,176,300,000 2,164,100,000 27,191,300,000 1,107,300,000 6,581,800,000 7,689,100,000 20,814,700,000 Tier-2 Capital General Provision (UC + SMA + Off B/S exposure+ Consumer Finance) Subordinated debt/instruments issued by the Bank meeting BB criteria Revaluation Reserve (50% of Fixed Assets and Securities & 10% of Equities) Sub Total 4,502,600,000 7,000,000,000 6,447,900,000 17,950,500,000 5,240,200,000 6,000,000,000 6,447,900,000 17,688,100,000 Deductions from Tier-2 Capital Revaluation Reserve for Fixed Assets, Securities and Equity Securites Total Regulatory Tier-2 Capital Total Regulatory Capital (Tier-1 + Tier-2) 5,158,300,000 12,792,200,000 39,983,500,000 3,868,700,000 13,819,200,000 34,634,100,000 Annual Report 2018
  276. Notes to the Financial Statements Amount in Taka 31-Dec-18 13 .6 Solo basis Risk Weighted Assets (RWA) Risk Weighted Assets (RWA) for A. Credit Risk On - Balance sheet Off - Balance sheet B. Market Risk C. Operational Risk Total: RWA (A+B+C) 13.6(a) 321,130,200,000 15,512,200,000 336,642,400,000 17,891,800,000 39,603,400,000 394,137,600,000 270,681,600,000 14,179,200,000 284,860,800,000 15,109,300,000 36,818,000,000 336,788,100,000 313,523,900,000 15,512,200,000 329,036,100,000 29,045,600,000 40,346,400,000 398,428,100,000 265,461,200,000 14,179,700,000 279,640,900,000 24,260,100,000 37,739,000,000 341,640,000,000 7,795,486,660 700,627,553 8,496,114,213 5,859,381,981 1,936,104,679 7,795,486,660 Consolidated Risk Weighted Assets (RWA) Risk Weighted Assets (RWA) for A. Credit Risk On - Balance sheet Off - Balance sheet B. Market Risk C. Operational Risk Total: RWA (A+B+C) 14 31-Dec-17 Statutory Reserve Balance at the beginning of the year Transferred during the year Closing Balance This has been made in accordance with Section 24 of the Bank Companies Act, 1991 and shall be maintained until it equals to the Paid-up Capital. 14(a) Consolidated Statutory Reserve Agrani Bank Limited 8,496,114,213 7,795,486,660.00 - - 48,047,388 38,978,313 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 8,544,161,601 7,834,464,973.00 - - 8,544,161,601 7,834,464,973.00 537,060,150 - 536,983,145 - - 77,005 537,060,150 537,060,150 Agrani Equity & Investment Limited Agrani SME Financing Company Limited Minority interest Total 15 General Reserve Balance at the beginning of the year Transferred from other liabilities Transferred to Risk Fund Transferred during the year Closing balance 277
  277. Notes to the Financial Statements Amount in Taka 31-Dec-18 15 (a) Consolidated General Reserve Agrani Bank Limited Agrani Equity & Investment Limited 54,731,264 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 591,791,414 591,791,414 - - 591,791,414 591,791,414 Risk Fund Balance at the beginning of the year Transferred during the year Closing balance 60,000,000 20,000,000 80,000,000 40,000,000 20,000,000 60,000,000 Consolidated Risk Fund Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Total 80,000,000 80,000,000 60,000,000 60,000,000 10,992,091,716 (14,916,489) 10,977,175,227 11,006,638,965 (14,547,249) 10,992,091,716 10,977,175,227 10,977,175,227 10,992,091,716 10,992,091,716 1,659,102,598 277,411,709 2,969,348,477 (32,806,558) (3,417,152,301) 1,455,903,925 4,280,530,068 37,339,485 3,171,427,341 (159,356,291) (5,670,838,005) 1,659,102,598 Total 16 Asset Revaluation Reserve Balance at the beginning of the year Less: Transfer to retained earnings 16(a) 17 278 537,060,150 - Minority interest 15.1(a) 537,060,150 54,731,264 Agrani SME Financing Company Limited 15.1 31-Dec-17 Consolidated asset revaluation reserve Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Revaluation & Amortization Reserve Balance at the beginning of the year Add: Surplus of Amortization of Securities (HTM) Add: Revaluation reserve on investment in Govt. Securities (HFT) Less: Surplus of Amortization of Securities (HTM) Less: Revaluation reserve on investment in Govt. Securities (HFT) Closing Balance Annual Report 2018
  278. Notes to the Financial Statements Amount in Taka 31-Dec-18 17 (a) Consolidated revaluation and amortization Agrani Bank Limited 18 1,455,903,925 1,659,102,598 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 1,455,903,925 1,659,102,598 (1,032,101,411) (5,869,630,344) - (203,847) Retained earnings brought forward from previous year Opening Balance Less: Prior Year Adjustment Add: Transfer from loan & other provision Add: Transfer from asset revaluation reserve Less: Cash Dividend paid to Govt. 18.1 Prior Year Adjustment Transfer from loan & other provision Net profit after tax during the year Transfer from asset revaluation reserve 14,547,249 - - (1,017,998,942) (5,855,286,942) (1,032,101,411) (5,869,630,344) - (203,847) - - 1,035,546,785 6,759,290,210 14,102,469 14,547,249 (700,627,553) (1,936,104,679) (683,079,710) (1,032,101,411) (974,537,032) (5,988,291,734) 3,809,830 (203,847) - - Transfer from asset revaluation reserve 14,102,469 14,547,249 Foreign currency translation gain/(loss) (4,546,225) 21,586,879 Transfer to Statutory Reserve Consolidated Retained earnings brought forward from previous year Retained surplus/(deficit) (Opening Balance) Prior year adjustment Transfer from loan & other provision Minority interest Foreign currency translation reserve 18.(a).2 14,102,469 Retained surplus/(deficit) Opening Balance 18.(a).1 31-Dec-17 (70) (101) 4,546,225 (21,586,879) (956,624,803) (5,973,948,433) (974,537,032) (5,988,291,734) Consolidated Retained surplus/(deficit) Opening Balance Prior year adjustment Transfer from asset revaluation reserve Foreign currency translation gain/(loss) 3,809,830 (203,847) 14,102,469 14,547,249 (4,546,225) 21,586,879 Net profit/ (loss) after tax during the year 1,103,990,483 6,939,850,369 Statutory reserve (709,696,628) (1,940,438,968) Minority interest Foreign currency translation reserve (70) (101) 4,546,225 (21,586,879) (562,330,948) (974,537,032) 279
  279. Notes to the Financial Statements Amount in Taka 18 .(a).3 Consolidated Retained Surplus/(deficit) Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited Singapore Agrani Remittance House SDN. BHD. Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Minority Interest Foreign Currency Translation Reserve 19 Consolidated Foreign Currency Translation Reserve Opening Balance Foreign Currency Translation Gain/(Loss) 20 Minority Interest Capital of Agrani Equity & Investment Limited Capital of Agrani SME Financing Limited Statutory reserve General reserve Retained earnings 21 Acceptances and endorsements Letters of Guarantee (Note - 21.1) Letters of Credit (Note - 21.2) Bills for Collection (Note - 21.3) Other Contingent Liabilities (Note - 21.4) Claims against the bank not acknowledged as debt 21.1 Letters of Guarantee Directors Government Banks and other financial institutions Foreign Banks against government counter guarantee Others 21.1(a) 280 Consolidated Letters of Guarantee Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Annual Report 2018 31-Dec-18 31-Dec-17 (683,079,710) (521,562,848) 589,953,987 88,861,687 24,017,795 (22,247,139) (38,274,720) (562,330,948) (562,330,948) (1,032,101,411) (550,832,881) 553,679,240 88,770,201 30,315,976 (22,059,502) (38,274,720) (970,503,097) 101 (4,034,036) (974,537,032) 34,869,818 (4,546,225) 30,323,593 13,282,939 21,586,879 34,869,818 2,000 720 58 66 448 3,291 2,000 720 47 66 388 3,221 7,649,647,785 96,613,351,946 48,385,188,838 4,489,805,281 5,316,696,000 162,454,689,850 7,557,677,293 72,045,800,727 21,876,462,987 6,121,467,531 15,736,332,000 123,337,740,538 205,842,267 414,055,338 337,522,332 6,692,227,848 7,649,647,785 318,169,946 519,220,760 998,384,512 5,721,902,075 7,557,677,293 7,649,647,785 7,649,647,785 7,557,677,293 7,557,677,293
  280. Notes to the Financial Statements Amount in Taka 31-Dec-18 21 .2 21.2(a) Letters of Credit Government Others 21.4 31,700,685,703 40,345,115,024 72,045,800,727 96,613,351,946 72,045,800,727 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited 21.3(a) 48,408,984,798 48,204,367,148 96,613,351,946 Consolidated Letters of Credit Agrani Bank Limited 21.3 31-Dec-17 Bills for collection Payable in Bangladesh Payable outside Bangladesh Consolidated Bills for collection Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Other Contingent Liabilities Inland Travelers Cheque Upahar Cheque Shanchay Patra Agrani Bank Shilpa Unnayan Bond - - 96,613,351,946 72,045,800,727 384,025,659 48,001,163,179 48,385,188,838 373,933,600 21,502,529,387 21,876,462,987 48,385,188,838 48,385,188,838 21,876,462,987 21,876,462,987 41,437,000 2,352,850 4,441,915,431 4,100,000 4,489,805,281 43,897,000 2,487,100 5,362,183,431 712,900,000 6,121,467,531 Liability will be created for the Bank by the sales amount of Inland Travelers Cheque, Upahar Cheque, Shanchay Patra and Agrani Bank Shilpa Unnayan Bond. These items have been included in the Off-balance sheet exposure as per contra for keeping note only. 21.4(a) Consolidated Other Contingent Liabilities Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 4,489,805,281 4,489,805,281 6,121,467,531 6,121,467,531 281
  281. Notes to the Financial Statements Amount in Taka 31-Dec-18 21 .5 Geographical Location - wise Contingent Liabilities Dhaka Region 136,427,723,700 94,295,346,691 Chattogram Region 6,860,963,794 5,484,778,305 Khulna Region 1,150,477,554 1,284,236,269 Rajshahi Region 1,750,553,800 1,676,454,500 Barishal Region 126,015,594 146,251,864 4,234,653,334 4,342,567,351 11,499,436,480 15,723,021,787 80,791,467 45,055,076 Cumilla Region 258,557,837 265,422,250 Faridpur Region 65,516,290 74,606,445 162,454,689,850 123,337,740,538 162,454,689,850 123,337,740,538 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Sylhet Region Rangpur Region Mymensingh Region 22 Consolidated Contingent Liabilities Agrani Bank Limited Agrani Exchange Company (Australia) Pty. Limited 23 31-Dec-17 - - 162,454,689,850 123,337,740,538 1,272,838,255 1,109,404,070 185,983 711,954 5,093,404,001 5,104,503,224 699,431,232 808,115,686 Interest Income a. Interest on Loans and Advances Interest on Rural Credit Interest on Weavers Credit Interest on Industrial Credit Interest on Jute Advance Interest on Leather Credit 346,054,633 377,208,767 Interest on Staff Loans 1,528,390,993 1,390,981,816 Interest on Loan-Others 5,607,342,414 3,763,181,993 Interest on Small and Micro Credit 5,120,436,808 3,982,212,292 383,588,276 243,039,779 2,193,159,148 2,231,650,830 165,017,047 130,546,211 15,846,748 12,394,608 116,964,263 104,711,593 49,287,258 52,392,087 Interest on Overdrafts Interest on Cash Credit Interest on Packing Credit Interest on Loan against Impo. Merchandise Interest on Payment Against Document Interest on Foreign Bills Purchased Interest on Inland Bills Purchased Sub-Total 8,192,967 24,234,114 22,600,140,026 19,335,289,024 b. Interest on Balance with other Banks and Financial Institution: Interest on call loans to Banks Interest received from local banks Interest received from foreign banks Sub-Total c. Income From Write off Loan Total (a+b+c) 282 Annual Report 2018 382,688,689 272,792,789 9,332,313,387 2,922,217,376 58,700 243,154 9,715,060,776 3,195,253,319 - - 32,315,200,802 22,530,542,343
  282. Notes to the Financial Statements Amount in Taka 31-Dec-18 23 .1 23(a) Geographical Location - wise Interest income Dhaka Region Chattogram Region Khulna Region Rajshahi Region Barishal Region Sylhet Region Rangpur Region Mymensingh Region Cumilla Region Faridpur Region Consolidated Interest Income Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) 24 Interest paid on deposits & borrowings a. Interest paid on Deposits Savings Deposits Special Time Deposits Fixed Deposits Deposit Pension Scheme Interest on staff provident fund Interest paid on NFCD Interest paid on ABPS Interest on month-wise fixed deposits Interest on ABS Interest on MDS Interest on MIS Interest on ADBS Interest on Quarter Income Scheme Interest on Double Income Scheme Interest on Millionaire Income Scheme Interest on Lakhpoti Income Scheme Interest on Probashi Income Scheme Interest on Deposit Scheme for women Interest on AGB Senior Citizen Interest on AGB Pension Interest on AGB Deposit Sub Total 31-Dec-17 22,682,545,812 1,279,545,733 2,015,465,622 1,658,469,477 566,396,158 434,033,925 1,121,656,602 1,323,628,366 630,641,008 602,818,099 32,315,200,802 14,186,385,575 1,057,520,505 1,740,629,538 1,410,310,687 509,755,725 358,513,955 1,023,350,273 1,064,898,569 622,233,846 556,943,670 22,530,542,343 32,315,200,802 3,690,809 210,228,960 92,347 2,057,010 311,367 32,531,581,295 (195,144,436) 32,336,436,859 22,530,542,343 3,360,320 155,262,362 185,401 1,600,926 293,319 22,691,244,671 (150,104,499) 22,541,140,172 3,729,369,644 3,623,316,091 12,235,153,528 1,520,579 375,183,038 4,315,719 12,950,018 22,867 1,832,898,544 484,419 111,428,727 489,474,418 735,450 211,427 2,541,391 596,271 50,931 86,776 8,088 248,399 19,924 22,420,616,249 3,013,590,253 1,835,321,826 10,467,904,037 1,744,652 344,570,914 2,676,452 15,081,933 132,688 1,474,355,370 2,138,185 314,807,959 350,200,668 688,275 315,681 177,844 34,392 6,093 4,617 17,823,751,839 283
  283. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 b . Interest paid to Banks Foreign Banks 257,482,113 104,307,697 Bangladesh Bank 653,860,256 170,177,787 - - Sonali Bank Other Banks Sub Total 3,897,775 1,588,303 915,240,144 276,073,787 3,195,139 163,194 c. Interest paid on Borrowings Call Borrowings Agrani Bank Shilpa Unnayan Bond* 82,926 27,497 4,409,015 4,426,619 Bangladesh Bank 6,082,232 40,205,000 Other Borrowings 44,406,616 38,569,006 58,175,928 83,391,316 23,394,032,321 18,183,216,942 Discount on T.T sold Sub Total Total (a+b+c) * Interest on Agrani Bank Shilpa Unnayan Bond was understated amounting to Tk. 82,926 in the previous year which is adjusted this year without restating the same considering immaterial. 24(a) Consolidated Interest paid on deposits & borrowings Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) 25 18,183,216,942 18,183,216,942 (150,104,499) 23,386,595,674 18,033,112,443 957,731,611 821,040,559 Investment income Dividend on Shares Discount on 2, 5, 10,15 & 20 years Govt. Bond Interest on 2,5,10,15 & 20 years govt. treasury bond Interest on 25 years govt. jute bond - 272,882,866 4,329,975,784 4,558,018,759 2,377,791 4,882,671 Discount on Bangladesh bills & treasury bills 1,625,761,942 3,543,361,360 Govt. Treasury Bond (BPC) 1,279,305,120 1,465,096,547 254,940,000 255,638,466 Govt. Treasury Bond (BJMC) Prime Bank Bond - 1,270,401 Mutual Trust Bank Bond - 13,793,972 National Bank Bond - 8,909,750 5,402,365 87,634,315 United Commercial Bank Subordinated Bond 28,376,487 34,500,000 One Bank Subordinated Bond 35,632,678 47,802,740 AB Bank Subordinated Bond 40,191,743 51,202,738 South East Bank Subordinated Bond 44,356,794 55,818,494 Floating Rate Dated Subordinated Bond of EBL 18,806,135 23,000,000 Floating Rate Dated Subordinated Bond of Bank Asia 18,806,135 23,000,000 BRAC Bank Subordinated Bond 284 23,394,032,321 176,122,460 11,585,329 23,581,740,110 (195,144,436) Annual Report 2018
  284. Notes to the Financial Statements Amount in Taka 31-Dec-18 Floating Rate Dated Subordinated Bond of Prime Bank Floating Rate Dated Subordinated Bond of EXIM Bank United Commercial Bank Subordinated Bond II Al-Arafa Islami Bank Subordinated Bond AB Bank Subordinated Bond II Standard Bank Subordinated Bond Floating Rate Dated Subordinated Bond of Dhaka Bank IFIC Bank Coupon Bearing Subordinate Bond South East Bank Subordinated Bond II Mutual Trust Bank Limited Subordinated Bond-II Bank Asia Limited Subordinated Bond Exim Bank Limited Subordinated Mudaraba Bond DBBL Subordinated Bond City Bank 2nd Subordinated Bond Premier Bank Subordinated Bond Standard Bank Subordinated Bond II Islami Bank Mudaraba Subordinated Bond Pubali Bank Ltd . Floating Rate Subordinated Bond National Bank 2nd Subordinated Bond FSIBL Subordinated Bond UCBL Subordinated Bond III NCC Bank Non-Convertible Subordinated Bond Rupali Bank Subordinated Bond Jamuna Bank Subordinated Bond Mercantile Bank Subordinated Bond Southeast Bank Subordinated Bond III Dhaka Bank Floating Rate Dated Subordinated Bond II Prime Bank Subordinated Bond II The Farmers Bank Subordinated Bond Al Arafah Islami Bank Mudaraba Subordinated Bond-II Investment Corporation of Bangladesh Subordinated Bond City Bank Limited 3rd Subordinated Bond Trust Bank Ltd. Floating Rate Dated Subordinated Bond Shahjalal Islami Bank Ltd. Mudaraba Floating Rate Dated Subordinated Bond Islami Bank Ltd. Mudaraba Floating Rate Dated Subordinated Bond UCB 4th Floating Rate Dated Subordinated Bond DBBL Floating Rate Dated Subordinated Bond-II SIBL Floating Rate Dated Subordinated Bond Best Holding Ltd. Bond Interest on Commercial Paper Interest on Reverse REPO Profit on Sale of Shares Profit on Sale of Securities Excess income shown in previous year* 18,806,135 36,881,510 17,395,331 29,666,904 49,702,513 26,396,485 51,654,158 38,143,775 41,981,282 25,401,534 25,618,484 45,222,523 48,881,228 17,710,324 19,712,385 41,901,047 84,998,986 96,039,717 21,240,065 23,822,843 28,331,882 29,951,231 104,231,851 20,859,351 40,846,151 53,907,104 53,907,104 71,876,137 28,739,547 14,601,543 96,198,412 5,671,562 5,671,561 7,089,452 5,235,288 3,272,055 2,181,370 2,726,712 25,684,932 43,367,580 167,121,190 197,230,028 1,677,360,985 (58,332,089) 12,030,572,753 31-Dec-17 23,000,000 41,869,863 19,112,331 31,500,000 52,500,001 34,500,000 45,619,862 41,805,068 35,961,781 20,017,151 13,435,274 23,250,001 23,013,698 8,153,507 4,986,301 10,722,604 20,728,768 3,024,658 527,397 328,767 246,575 1,816,438 132,329,339 328,631,248 2,504,274,809 14,689,209,079 * Accrued Interest amounting to Tk. 58,332,089 was found for the previous year(s). However, the management was not sure about the source of that accrued interest. Management assumes that the amount was erroneously recorded as income during the previous year(s). Now the accrued interest is adjusting with the total income/accrued income without restating considering immaterial. The above investment incomes were earned from Dhaka region only. 285
  285. Notes to the Financial Statements Amount in Taka 25 (a) 31-Dec-18 31-Dec-17 12,030,572,753 14,689,209,079 Consolidated Investment Income Agrani Bank Limited Agrani Equity & Investment Limited 268,086,461 514,850,686 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited 26 - - 12,298,659,214 15,204,059,765 59,855,028 64,145,954 Commission, exchange earnings & brokerage Commission on bills (Foreign & Inland) Commission DD, TT & MT (Local) 129,301,945 123,660,748 Commission on DD, TT, TC (Foreign) 42,578,689 29,504,397 Commission on Letters of Guarantee (Local) 68,685,201 47,708,266 Commission on Letters of Guarantee (Foreign) 11,404,319 4,800,098 890,479,251 865,466,872 22,500,000 26,000,000 5,822,495 13,130,040 94,195,439 89,290,000 Commission on Letter of Credit CIB Service Charge Commission on Underwriting Commission on Export bill Commission on LIM Commission on Army Pension Paid* Commission on Food procurement Bills Foreign correspondence charges Exchange account foreign currency Commission on Sanchay patra Fees & Commission For Debit Card Consortium/Syndication Fee Loan processing fee Commission on Miscellaneous 1,057,988 945,574 50,372,515 8,685,532 219,823,535 89,320,934 7,694,702 2,273,336 548,329,493 1,580,712,935 45,505,669 56,153,308 2,546,840 1,625,867 31,648,705 45,005,291 58,859,306 49,412,939 242,039,854 297,726,953 Discount on Bills 4,188 12,075 2,532,705,162 3,395,581,119 *Commission on Army Pension was understated by amounting to Tk. 39,965,469 from 2008-2015. Now the same is adjusting with the total income/accrued income without restating considering immaterial. 26.1 Geographical Location - wise Commission, Exchange and brokerage Dhaka Region 1,819,308,344 2,799,827,828 Chattogram Region 106,630,389 106,458,411 Khulna Region 147,451,165 127,570,140 Rajshahi Region 118,983,806 79,876,732 Barishal Region 33,513,050 32,447,556 Sylhet Region 39,043,479 41,717,568 137,041,087 83,711,076 Mymensingh Region 64,118,206 46,524,220 Cumilla Region 46,945,494 59,873,633 Faridpur Region 19,670,142 17,573,955 2,532,705,162 3,395,581,119 Rangpur Region 286 Annual Report 2018
  286. Notes to the Financial Statements Amount in Taka 26 (a) Consolidated Commission, Exchange and Brokerage Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) 27 31-Dec-17 2,532,705,162 6,315,372 51,957,869 32,745,011 2,394,185 2,626,117,599 2,626,117,599 3,395,581,119 4,853,987 53,987,490 29,694,962 1,615,143 3,485,732,701 3,485,732,701 Other operating income Rent on Immovable Properties & Godown Rent on SD Lockers Profit on sale of Assets Postage Recoveries Telegram Recoveries Trunk-call Recoveries 616,229 1,855,852 11,962,854 10,440,206 2,442,458 469,236 46,121,426 48,483,501 665,383 573,352 150,593 83,270 817,157,311 705,766,471 5,974,283 6,507,290 Service charge on rural credit 9,798 4,943 Service charge on Weavers/ Hosiery credit 1,125 2,182 Service charge on Industrial credit 6,686 7,913 220,517,070 135,145,413 1,996,108 1,997,328 Annual Charges on deposit A/C 69,570 542,667 Annual Charges on Loan A/C 23,582 137,869 Service Charges on FSS (Female Student Scholarship) 28,114,949 63,031,658 Sale of LC/Export/Schedule form and tender Schedule 13,786,510 11,536,880 Telephone, Telex & Swift charges 40,089,141 35,620,927 Account Closing Charge 96,026,353 10,106,539 Rebate received from Foreign bank 20,144,121 21,012,268 Proceeds realization certificate charges 5,242,086 5,083,719 Remuneration received from Sanchaya Patra 1,513,900 7,920,929 Service Charges on Civil Pension paid 2,488,729 2,391,032 Account Maintenance Fee Remittance Service charge on other credit Sales proceeds on loan application form 27(a) 31-Dec-18 Electronic Govt. Procure (e-GP) 1,579,915 1,079,040 Service Charges on Deposit A/C 29,204,864 27,944,045 1,345,905,044 1,097,744,530 1,345,905,044 332,446 4,644,828 18,082,704 3,982,044 1,170,975 1,374,118,041 1,097,744,530 497,842 3,170,435 9,262,671 417,345 10,659 1,111,103,482 Consolidated Other Operating Income Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 287
  287. Notes to the Financial Statements Amount in Taka 31-Dec-18 28 Salary and allowance etc . Salaries- officers Salaries- staff Dearness allowance (Officers & Staff) Fringe Benefit (Officer & Staff) Bonus (officers & Staff)* Banks contribution to provident fund** Banks contribution to employees pension fund Banks contribution to gratuity fund Conveyance allowances Entertainment allowances Children education allowances Hill Allowances Honorarium & Fees Medical Expenses Medical Expenses (Consultation Fees) Medical allowances Uniform and other apparels Overtime expenses Staff Income Tax*** Compensatory Allowances Lunch subsidy/Iftar Coupon Leave Encashment Sports and cultural activities House rent allowances (officers) House rent allowances (staff) Wages paid to temporary employees Staff transport fare Police & Ansar Expenses Ex-Gratia Evening, Night & Charge Allowance Salary and allowance of Head of ICC Bangla Nobobarso Allowance 4,184,798,433 417,358,305 91,076 56,336,365 712,901,949 154,357,110 1,639,845,610 379,551,667 4,395,593 1,321,322 53,722,017 3,271,188 53,861,210 2,254,990 1,621,325 225,597,871 12,298,583 17,048,458 (20,127,570) 147,776 566,713,017 1,970,929 38,785,524 1,682,298,930 191,667,135 199,955,409 34,807,059 418,130,211 211,203 11,859,260 7,817,912 68,018,267 11,122,888,134 31-Dec-17 4,091,705,077 464,935,065 192,830 87,311,539 680,362,938 174,007,471 1,431,261,790 339,299,512 5,748,854 1,468,523 56,457,958 3,478,913 17,853,281 3,811,662 1,848,400 223,483,276 10,972,524 16,710,111 4,568,598 570,088,755 2,224,540 29,140,700 1,603,852,626 210,494,212 206,440,308 31,515,245 387,960,301 1,225,243 10,389,465 6,902,732 65,521,579 10,741,234,028 * Bonus was paid in 2010 amounting to Tk. 8000 return during this year ** Bank’s contribution to Provident Fund was overstated amounting to Tk. 27,898,527 during the years 2016 and 2017. Now the same is adjusting with Banks contribution to providnt fund without restating considering immaterial. *** Staff Income tax was overstated amounting to Tk. 20,127,570 in the year of 2013 and 2014. Now the same is adjusting with Staff Income Tax without restating considering immaterial. 28(a) 288 Consolidated Salary and Allowance etc. Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Annual Report 2018 11,122,888,134 12,953,822 90,142,588 25,179,194 19,390,481 1,939,061 11,272,493,280 10,741,234,028 14,263,284 89,154,974 32,335,416 19,444,875 1,614,275 10,898,046,852
  288. Notes to the Financial Statements Amount in Taka 31-Dec-18 29 Rent , taxes, insurance, lighting etc. Rent on Premises Rent on Godown Lighting Charges Insurance Charges on Cash Insurance Charges on vehicles Insurance Charges on property Rates, Taxes, Ceases Taxes on Immovable Property Insurance Charges on Deposits 29(a) Consolidated rent, taxes, insurance, lighting etc. Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 30 Legal expenses Court fees Lawyer’s fees Other legal expenses 30(a) Consolidated Legal Expenses Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 31 Postage, stamp, telegram & telephone Postages Telegram Charges Telex & Teleprinter charges Stamps Telephone Charges (Office) Telephone Charges (Residence) Trunk-call charges 31(a) Consolidated postage, stamp, telegram & telephone Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 31-Dec-17 618,522,524 4,628,986 112,247,899 1,201,673 2,857,352 1,310,597 53,079,517 325,463 322,145,883 1,116,319,894 573,878,400 4,174,381 97,710,753 6,173,318 1,315,132 48,748,980 423,894 165,245,774 897,670,632 1,116,319,894 3,542,622 5,681,583 22,416,271 11,056,515 392,238 1,159,409,123 897,670,632 3,572,301 5,697,339 21,437,698 7,288,322 371,839 936,038,131 1,414,093 9,078,945 19,357,250 29,850,288 1,736,178 8,091,173 16,911,065 26,738,416 29,850,288 345,307 42,250 805,366 134,409 728,671 31,906,291 26,738,416 239,175 20,375 686,152 395,395 997,891 29,077,404 39,893,283 106,758 203,633,270 6,289 13,994,371 2,464,430 6,307 260,104,708 39,446,330 89,963 362,299,528 1,134 16,043,572 2,406,252 6,856 420,293,635 260,104,708 53,533 394,485 1,762,718 844,995 263,160,439 420,293,635 66,027 321,325 1,621,401 963,676 423,266,064 289
  289. Notes to the Financial Statements Amount in Taka 31-Dec-18 32 Stationery , printing, advertisement Security Stationery Printing Stationery Paper & Table Stationery Advertisement publicity charge (Tender) Advertisement publicity charge (Development) 32(a) 33 Chief executive’s salary and allowances Basic Salary House Rent Allowance Festival Bonus Incentive Bonus Medical Allowance Utility Allowance House Maintenance Allowance 33(a) 34 Consolidated Stationery, printing, advertisement Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Consolidated Chief executive’s salary and allowances Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Fees & allowances of Directors Fees for attending board meetings Fees for attending executive committee meetings Fees for attending audit committee meetings Fees for attending risk management committee meetings Fees for shariah supervisory committee meetings Allowances 31-Dec-17 39,485,958 88,172,491 30,766,138 1,981,601 21,939,172 182,345,360 31,859,643 88,434,546 28,035,584 1,149,274 15,953,705 165,432,752 182,345,360 209,628 1,526,252 860,209 423,704 207,280 185,572,433 165,432,752 225,016 1,116,997 516,196 514,878 167,805,839 3,300,000 900,000 550,000 962,500 120,000 300,000 180,000 6,312,500 3,300,000 900,000 550,000 293,033 120,000 300,000 180,000 5,643,033 6,312,500 1,800,000 8,112,500 5,643,033 1,290,000 6,933,033 4,222,800 184,000 625,600 239,200 138,000 1,098,039 6,507,639 3,477,600 202,400 533,600 230,000 147,200 1,096,565 5,687,365 Note: Fee of the Chairman and directors is Taka 8,000 per meeting as per BRPD Circular Letter No. 11 date 04 October 2015. No other financial benefits are extended to Board of Directors [as per section 18(1) of the Banking Companies Act (Amendment) 2013] excluding above fees. 290 Annual Report 2018
  290. Notes to the Financial Statements Amount in Taka 31-Dec-18 34 (a) Consolidated Fees & allowances of Directors Agrani Bank Limited 6,507,639 5,687,365 Agrani Equity & Investment Limited 631,200 500,400 Agrani SME Financing Company Limited 572,000 560,000 Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 35 Audit Fee (Others) 4,826,972 - - - - 12,074,726 11,574,737 4,000,000 3,600,000 40,000 36,000 4,040,000 3,636,000 4,040,000 3,636,000 Consolidated Auditors’ Fees Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited 36 92,225 4,271,662 Auditors’ Fees Audit Fee (Statutory Audit) 35(a) 31-Dec-17 92,000 80,350 184,000 165,600 Agrani Exchange House Private Limited, Singapore 307,415 - Agrani Remittance House SDN. BHD., Malaysia 405,458 380,096 Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 5,028,873 4,262,046 154,625,017 65,917,371 31,869,327 44,883,664 66,814,592 264,880,182 227,036 629,217,189 22,594,978 60,579,691 63,713,646 36,630,599 63,255,031 250,828,965 167,828 497,770,738 122,873,749 122,873,749 120,511,198 120,511,198 14,876,359 4,362,734 213,799,805 7,563,652 453,054,955 21,979,818 7,587,448 723,224,771 1,475,315,709 8,896,976 4,058,487 208,102,037 7,188,120 449,770,397 19,276,079 8,323,596 705,615,692 1,323,897,628 Depreciation & repairs of bank’s assets a. Depreciation of Banks Assets (Annexure-G): Buildings* Furniture & fixtures Motor Vehicles** Office Equipment Electric material Computers Library Books & Others Sub Total b. Amortization of Intangible Assets Amortization of Software Purchase Sub Total c. Repairs & Maintenance of Banks Assets Bank Buildings Furniture & fixtures Motor Vehicles Office Equipment Computers Electric Equipment & Lighting Materials Renovation & Maintenance of Branch Premises Sub Total Total (a+b+c) 291
  291. Notes to the Financial Statements Amount in Taka 31-Dec-18 31-Dec-17 * Depreciation on Buildings was understated by amounting to Tk. 109,436,023 in previous periods from 2014-2017 due considering the longer life of the building compares to the remaining life proposed by the valuer. On the other hand, depriciation amounting to Tk.3,698,805 was charged on the buildings considering the same as PPE instead of Non-Banking Assets from the year 2014-2018. Instead of restating the financial statements, the Bank adjusts the full amount during the year. ** Depreciation on Motor Vehicles amounting to Tk. 12,375,808 was erroneously charged more than the cost value. Instead of restating the financial statements, the Bank adjusts the full amount during the year. 36(a) Consolidated Depreciation & repairs of bank’s assets Agrani Bank Limited 1,475,315,709 1,323,897,628 Agrani Equity & Investment Limited 2,063,654 2,680,216 Agrani SME Financing Company Limited 4,506,892 4,896,507 Agrani Exchange House Private Limited, Singapore 2,991,271 4,266,950 Agrani Remittance House SDN. BHD., Malaysia 2,770,251 2,163,886 23,407 136,837 1,487,671,184 1,338,042,024 Conveyance/ Transportation Charges 28,061,502 29,995,630 Petroleum, Oil and Lubricants for vehicles 26,436,247 26,769,526 Petroleum, Oil and Lubricants for generator 61,763,987 65,633,682 Entertainment Charges 36,136,417 35,728,617 Entertainment (Excluding ceiling) 23,333,839 18,538,231 Traveling Expenses 77,402,887 66,593,518 3,877,527 3,482,994 72,432,941 70,347,349 980,826 631,519 Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 37 Other expenses Remittance (Through Bank Exchanges) Remittance (Cash) Registration Charges Mortgages Fee of Land/Home of staff house building loan 4,273,382 3,304,515 Bankers Clearing House charges 382,567 492,810 Loss on Sale of Assets (Furniture) 48,872 - Loss on Sale of Share & Securities 118,635,631 2,436,409 Loss on Amortization of Securities 36,302,441 25,784,207 Loss on Sale of Properties 776,242 - Newspapers & Periodicals 10,048,366 9,687,580 Upkeep of office premises 61,062,044 55,005,198 Business Development Expenses 49,677,640 40,084,477 Training Expenses 33,669,280 28,414,049 Washing Charges 2,128,999 2,095,565 25,792,600 25,583,331 4,991,730 2,477,000 Closing expenditure Subscription Donation 12,600 59,700 Funeral expenses 2,400,000 2,277,000 Fees and commission 2,020,213 3,157,514 5,028,000 27,381,500 76,791,993 71,344,724 Fees and commission on bond issue Exchange a/c Charge paid to Foreign Bank Loss on Revaluation of Security 292 Annual Report 2018 1,540,459,965 1,192,235,485 2,304,928,738 1,809,542,130
  292. Notes to the Financial Statements Amount in Taka 31-Dec-18 37 (a) 38 Consolidated Other Expenses Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Provision for loans & advances Provision for Bad & Doubtful Loans & Advances Unclassified loans & advances Special Mention Account 3% General reserve for consumer financing (Note -12.8) Transfer to Retained Surplus Net Charge to Profit & Loss A/C 38(a) Consolidated provision for loans & advances Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited 39.1 39.2 39.3 Provision for off balance sheet exposures (Note - 12.10) Provision for diminution in the value of Investment (Note - 12.11) Provision for employees benefits (Note - 12.13) 39.4 Other provision Employee Benevolent Fund Supper Annuation Fund Death Relief Grant Scheme Balance with Other Banks & Financial Institutions Protested Bills (Note - 12.12.a) Risk Fund OPEC Fund Provision for Other Assets Sundry Debtors Staff & Others Clearing Adjustment Army Pension Paid Civil Pension Paid Exempted Loans & Interest on Exempted Loans Branch Adjustment 31-Dec-17 2,304,928,738 1,879,417 9,266,776 15,626,765 5,784,771 773,507 - 1,809,542,130 148,841,077 9,124,378 17,451,492 6,416,553 809,059 - 2,338,259,974 1,992,184,689 2,024,729,629 (808,754,719) 95,975,704 (24,758,383) 1,287,192,231 1,287,192,231 (3,899,757,179) (1,089,623,013) 4,440,802 (57,048,330) (5,041,987,720) (5,041,987,720) 1,287,192,231 1,287,192,231 (5,041,987,720) (5,041,987,720) 1,060,000,000 394,354,459 (712,171,701) 1,360,000,000 30,000,000 1,500,000,000 70,000,000 600,000,000 3,829,489 20,000,000 - 20,000,000 1,260,000,000 12,500,000 17,001,350 20,000,000 (70,508,242) 247,334,979 - 2,625,006 745,226 (92,832,778) (9,155,362) 105,968,204 (76,700,000) 293
  293. Notes to the Financial Statements Amount in Taka 31-Dec-18 Legal Charges 4 ,486 (13,985) Accrued Income - 2,912,567 Stationary & Stamp - 7,131,329 Advance Deposit & Pre-payment - (9,809,853) Foreign Correspondent Draft Paid - - Agri credit exemption on river erosion - (1,176,471) Libian Currency - (100,000,000) Wage Earner Bond - 25,532,202 DD paid W/A - 4,765,243 Loan Application Form Receivable from Agrani SME Financing Company Sub Total 39(a).2 (140,008,672) 1,118,984,436 Agrani Bank Limited - 394,354,459 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - - 394,354,459 - (712,171,701) Consolidated provision for off balance sheet exposures Consolidated provision for diminution in the value of Investment Agrani Equity & Investment Limited 10,000,000 100,000,000 Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 10,000,000 (612,171,701) 1,060,000,000 1,360,000,000 - - Consolidated provision for employees benefits Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited 12,000,000 8,500,000 Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited 294 - 247,578,985 Agrani Bank Limited 39(a).3 239,520 2,471,408,474 Net Charge to Profit & Loss A/C 39(a).1 31-Dec-17 Annual Report 2018 - - 1,072,000,000 1,368,500,000
  294. Notes to the Financial Statements Amount in Taka 31-Dec-18 39 (a).4 Agrani Bank Limited 40 2,471,408,474 1,118,984,436 Agrani Equity & Investment Limited - - Agrani SME Financing Company Limited - - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - 2,471,408,474 1,118,984,436 3,260,640,205 2,682,800,000 Agrani Equity & Investment Limited 41,038,789 66,243,440 Agrani SME Financing Company Limited 32,634,854 16,455,977 Agrani Exchange House Private Limited, Singapore - 390,892 Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Consolidated Current Tax Expense Agrani Bank Limited Agrani Exchange Company (Australia) Pty. Limited 41 Agrani Equity & Investment Limited Agrani SME Financing Company Limited 2,765,890,309 (793,049,225) 238,433,187 - - (808,595) (807,391) Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Agrani Exchange Company (Australia) Pty. Limited - - (793,857,820) 237,625,796 Loans & Advances 22,509,316,852 19,077,097,566 Investment 10,908,303,192 9,389,371,935 8,441,410,533 2,802,911,078 41,859,030,577 31,269,380,579 41,859,030,577 31,269,380,579 Interest Receipts in Cash Balance with Other Banks & Financial Institutions 42(a) 3,334,313,848 Consolidated Deferred Tax Expense Agrani Bank Limited 42 31-Dec-17 Consolidated Other Provision Consolidated Interest Receipts in Cash Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange House Private Limited, Singapore Agrani Remittance House SDN. BHD., Malaysia Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company (Transactions) 3,690,809 3,653,639 210,228,960 155,262,362 92,347 185,401 2,057,010 1,600,926 311,367 - - - 42,075,411,070 31,430,082,907 (195,144,436) (150,104,499) 41,880,266,634 31,279,978,408 295
  295. Notes to the Financial Statements Amount in Taka 31-Dec-18 43 Interest Payments in Cash Agrani Bank Monthly Deposit Scheme (ABMDS) Agrani Bank Pension Scheme (ABPS) Agrani Bank Special Deposit Scheme (ABS) Deposit Pension Scheme (DPS) Fixed Deposit Receipts Interest on ABDBS Unearned discount Interest on ABMIS 30,314,815 1,858,297,202 1,214,597,386 2,466,221 1,857,163 11,348,587,930 11,370,961,752 369,626,482 331,178,922 - 272,756,226 111,524,435 317,462,834 3,013,566,515 Special Notice Deposit 3,622,940,549 1,835,330,281 375,183,038 344,570,914 Quarterly Income Scheme 649,625 391,796 Millionaire Deposit Scheme 149,249 18,270 Lakhopoti Deposit Scheme 34,134 4,217 Probashi Income Scheme 50,406 6,093 Double Benefit Scheme Deposit Scheme Borrowings 16,815 - 319,057 - 31,325 4,599 88,558,662 43,312,271 915,240,144 276,073,787 22,591,649,675 19,150,356,469 22,591,649,675 19,150,356,469 176,122,460 146,940,134 11,585,329 - Agrani Exchange House Private Limited, Singapore - - Agrani Remittance House SDN. BHD., Malaysia - - Agrani Remittance House Canada Inc. - - Banks & Other Financial Institutions Consolidated Interest Payments in Cash Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited Agrani Exchange Company (Australia) Pty. Limited Less: Inter-company transaction(s) - - 22,779,357,464 19,297,296,603 (195,144,436) (150,104,499) 22,584,213,028 19,147,192,104 Cash receipts from other operating activities Account Closing Charge 95,507,415 10,105,399 814,622,226 705,720,481 Annual Charges on deposit A/C 27,976 532,532 Annual Charges on Loan A/C 23,582 137,869 1,579,915 1,079,040 Account Maintenance Fee Electronic Govt. Procure (e-GP) Miscellaneous Earnings Postage Recoveries Proceeds realization certificate charges Profit on sale of other assets Rebate received from Foreign bank Remittance 296 97,948,628 17,459,040 3,729,279,810 Bakna Basur 43(a) 151,235,551 Savings Deposit Staff Provident Fund 44 31-Dec-17 Annual Report 2018 - (1,090,407) 46,013,171 48,480,957 5,193,916 5,082,542 2,442,458 469,236 20,144,121 21,012,268 5,968,470 6,505,103
  296. Notes to the Financial Statements Amount in Taka 31-Dec-18 Remuneration received from Sanchaya Patra 275 ,588 7,849,403 Rent on Immovable Properties & Godown 616,229 1,855,852 Rent on SD Lockers 11,610,764 10,440,206 Sale of LC/Export/Schedule form and tender Schedule 13,786,510 11,536,880 1,996,108 1,997,328 Sales proceeds on loan application form Service charge on Industrial credit 6,686 7,913 Service charge on other credit 215,946,790 135,129,117 Service charge on rural credit 9,798 4,943 Service charge on Weavers/ Hosiery credit 1,125 2,182 2,624,520 2,373,866 Service Charges on Deposit A/C 29,720,874 27,925,295 Service Charges on FSS (Female Student Scholarship) 34,031,369 62,799,081 674,676 572,387 39,985,342 35,620,399 152,263 83,209 1,342,961,892 1,096,233,080 1,342,961,892 1,096,233,080 332,446 497,842 Service Charges on Civil Pension paid Telegram Recoveries Telephone, Telex & Swift charges Trunk-call Recoveries 44(a) Consolidated Cash receipts from other operating activities Agrani Bank Limited Agrani Equity & Investment Limited Agrani SME Financing Company Limited 4,644,828 3,170,435 18,082,704 9,262,671 Agrani Remittance House SDN. BHD., Malaysia 3,982,044 417,345 Agrani Remittance House Canada Inc. 1,170,975 10,659 Agrani Exchange House Private Limited, Singapore Agrani Exchange Company (Australia) Pty. Limited 45 - - 1,371,174,889 1,109,592,032 Auditors Fee 3,640,000 3,636,000 Directors’ fees and allowances 6,507,639 5,687,365 44,072,410 42,888,653 Other expenses 727,523,377 1,897,608,775 Postage, stamps, telegrams and telephone 260,058,048 421,297,845 Cash payment for other operating activities Legal charges Rent, taxes, insurance lighting etc. Repairs to fixed assets 45(a) 31-Dec-17 1,112,911,791 2,126,870,717 722,146,602 1,915,039,687 2,876,859,866 6,413,029,042 2,876,859,866 6,413,029,042 Consolidated Cash payment for other operating activities Agrani Bank Limited Agrani Equity & Investment Limited 8,596,083 55,991,196 Agrani SME Financing Company Limited 20,629,586 (30,983,412) Agrani Exchange House Private Limited, Singapore 43,694,616 45,463,693 Agrani Remittance House SDN. BHD., Malaysia 25,242,699 22,341,281 1,917,823 6,632,862 Agrani Remittance House Canada Inc. Agrani Exchange Company (Australia) Pty. Limited - 511,566 2,976,940,673 6,512,986,228 297
  297. Notes to the Financial Statements Amount in Taka 31-Dec-18 46 Cash & cash equivalent at the end of the period Cash in hand & with Bangladesh Bank & Sonali Bank Ltd. Balance with Other Banks Money at Call & Short Notice Prize Bonds 47 Balance with Other Banks Money at Call & Short Notice Prize Bonds 38,440,817,584 77,795,816,230 690,000,000 2,700,000,000 11,873,100 9,080,700 163,460,753,965 118,945,714,514 37,149,897,888 38,508,318,461 125,925,126,736 77,941,275,858 690,000,000 2,700,000,000 11,873,100 9,080,700 163,776,897,724 119,158,675,019 20,722,940,400 20,722,940,400 8,544,161,601 7,834,464,973 591,791,414 591,791,414 Consolidated Shareholder’s Equity Paid up Capital Statutory Reserve General Reserve Risk Fund 80,000,000 60,000,000 10,977,175,227 10,992,091,716 Revaluation & Amortization Reserve in Govt. Securities 1,455,903,925 1,659,102,598 Retained profit/(Loss) from profit and loss account (562,330,948) (974,537,032) 30,323,593 34,869,818 Asset Revaluation Reserve Foreign Currency Translation Reserve Minority Interest 49 37,115,199,280 125,643,681,585 Consolidated Cash & cash equivalent at the end of the period Cash in hand & with Bangladesh Bank & Sonali Bank Ltd. 48 31-Dec-17 3,291 3,221 41,839,968,503 40,920,727,108 Current Ratio The Bank had the following current assets and current liabilities as on 31 December 2018 & 2017 as per liquidity statement. Current Assets: Cash Balance with other banks and financial institutions Money at call and short notice Investment Loans and advances Other Assets total current assets 1,219,924,000 3,788,497,676 125,643,681,585 77,795,816,230 690,000,000 2,700,000,000 46,373,083,512 100,587,582,349 176,051,597,838 99,963,977,188 - 39,857,743,313 349,978,286,935 324,693,616,756 Current liabilities: Borrowing from other banks, FI and agents Deposits Provisions and other liabilities 14,661,882,764 5,367,538,629 321,463,533,538 272,128,207,058 3,103,765,389 18,877,533,139 339,229,181,691 296,373,278,826 10,749,105,244 28,320,337,930 Current assets 349,978,286,935 324,693,616,756 Current liabilities 339,229,181,691 296,373,278,826 1.03 1.10 total Current liabilities Current Assets exceeding Current Liabilities Current Ratio: 298 Annual Report 2018
  298. Notes to the Financial Statements 50 Categories of financial assets and financial liabilities in accordance with Bangladesh Financial Reporting Standard (BFRS7) Financial Instruments : Disclosures (Figure in million Taka) Consolidated 2018 Particular Carrying amount Bank 2017 Fair value Carrying amount 2018 Fair value 2017 Carrying amount Fair value Carrying amount Fair value Financial Assets Loans and receivable 686,231 686,231 517,611 517,611 684,060 670,885 397,077 397,077 Held to maturity 70,704 85,927 75,860 84,504 70,704 85,927 90,203 91,872 Held for trading 12,808 12,808 61,112 51,798 12,808 12,808 110,596 109,307 Available for sale 6,384 4,337 5,782 4,391 6,384 4,337 9,908 5,906 15,229 15,229 15,612 15,612 15,196 15,196 15,783 15,784 791,356 804,532 675,977 673,916 789,152 789,153 623,567 619,946 Financial Liabilities at fair value through profit or loss - - - - - - - - Financial liabilities measured at amortised cost 704,316 704,316 591,354 591,354 704,438 704,438 538,463 538,463 45,200 45,200 43,703 43,703 43,129 43,129 48,528 48,528 749,516 749,516 635,057 635,057 747,567 747,567 586,991 586,991 Non-Financial Assets Total Assets Financial Liabilities Non-Financial Liabilities-provision Total liabilities Detailed Classifications of Financial Instruments in Annexure-H. 51 Reconciliation between presentation of Assets & Liabilities in fair value as mentioned in note- 50 and balance sheet: Particular Consolidated Bank Assets presented at fair value as per note # 50 804,532 789,153 Add : Fall in Market price of assets (13,176) (1) Value of assets as per balance sheet 791,356 789,152 299
  299. Notes to the Financial Statements Consolidated 2018 52 Bank 2017 2018 2017 Performance Evaluation Average Cost of Deposits (%) 4.06 % 3.52 % 3.89 % 3.48 % Average Cost of Borrowing (%) 0.31 % 0.91 % 0.31 % 0.91 % Average Yield on Loans & Advances (performing loan) (%) 7.72 % 8.43 % 7.67 % 8.38 % Average Yield on Investments (%) 7.12 % 7.37 % 7.29 % 7.37 % Average Yield on Call loans to Bank (%) 5.04 % 4.31 % 5.04 % 4.31 % Average Yield on Balance with other Banks (%) 8.73 % 5.52 % 8.56 % 5.54 % Net Spread (%) 3.60 % 4.62 % 3.60 % 4.62 % Net Interest Margin (%) 3.25 % 3.59 % 3.25 % 3.59 % Contribution of non-interest bearing liabilities (%) 0.35 % 1.03 % 0.35 % 1.03 % Detail of calculations is given in Annexure I. 53 Workers Participation Fund Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) deals with the workers’ participation in company’s profit by way of ‘Workers Participation Fund’ and ‘Welfare Fund’. This Act requires the “Industrial Undertakings” to maintain provision for workers’ profit participation fund @5% on net profit. Since this requirement contradicts with the ‘Section 11’ of the Bank Company Act 1991 (as amended up to 2013), banks in Bangladesh took up the issue collectively and sought opinion from the Association of Bankers Bangladesh Limited (ABB) on the same. ABB wrote a letter to the Ministry of Finance of the Government of People’s Republic of Bangladesh on 09.03.2016 to draw attention of the honorable Finance Minister regarding relevance and applicability of Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) for the bank companies and to obtain a direction on the issue. The Ministry of Finance revealed their opinion that WPPF should not be relevant for bank companies, and therefore it should not be applied there. They also sought for an opinion on this issue from Bangladesh Bank. Subsequently, Bangladesh Bank agreed on all the logics and legal opinion collected by the ABB and expressed their consensus with them on 29.11.2016. In this backdrop, the Ministry of Finance has given their instruction, vide letter no. 53.00.0000.311.22.002.17-130 dated 14.02.2017, for not applying Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) in bank companies. Therefore, no provision in this regard has been made in the financial statements for the year ended on December 31, 2018. (MD. AKRAM HOSSAIN) General Manager & CFO Dated, Dhaka 30-April-2019 300 Annual Report 2018 (MOHAMMAD SHAMS-UL ISLAM) Managing Director & CEO
  300. Agrani Bank Limited Highlights on the Overall Activities of the Bank As at and for the year ended at 31 December , 2018 and 2017 SL No Consolidated Bank Particulars Unit 1 Paid up Capital Taka 20,722,940,400 20,722,940,400 20,722,940,400 20,722,940,400 2 Total Capital Taka 39,983,500,000 34,634,100,000 39,759,900,000 34,482,600,000 3 Capital surplus/(deficit) Taka 140,690,000 470,100,000 346,140,000 803,790,000 4 Shareholders’ Equity Taka 41,839,968,503 40,920,727,108 41,586,114,205 40,734,580,113 5 Total Assets Taka 791,356,731,960 675,977,657,600 789,153,272,786 673,922,118,848 6 Total Deposits Taka 621,806,026,171 529,991,808,634 621,927,230,672 530,349,741,838 7 Total Loans and Advances Taka 393,391,378,273 318,558,979,454 395,753,029,491 319,118,598,413 8 Total Contingent Liabilities and Commitments Taka 162,454,689,850 123,337,740,538 162,454,689,850 123,337,740,538 9 Classified loans against total loans Percentage 17.79% 17.50% 17.67% 17.45% 10 Net classified loans against net loans Percentage 6.98% 7.36% 6.98% 7.36% 11 Amount of classified loans Taka 70,000,796,031 55,752,519,055 69,933,821,764 55,695,506,495 12 Amount of classified loans during current year Taka 24,821,015,269 6,396,643,394 24,821,015,269 6,396,643,394 13 Provisions kept against classified loans Taka 29,682,302,043 27,530,079,173 29,646,774,893 27,501,482,529 14 Credit Deposit Ratio 63.27% 60.11% 63.63% 60.17% 15 Profit after tax and provision 1,103,990,483 6,939,850,369 1,035,546,785 6,759,290,210 16 Cost of fund 6.95% 7.03% 6.95% 7.03% 17 Interest earning assets Taka 518,063,439,040 396,669,853,468 520,143,645,107 397,084,012,799 18 Non-interest earning assets Taka 273,293,292,920 279,307,804,132 269,009,627,679 276,838,106,049 19 Income from investments Taka 12,298,659,214 15,204,059,765 12,030,572,753 14,689,209,079 20 Return on investment (ROI) Percentage 7.32% 8.55% 7.56% 8.60% 21 Return on Assets (ROA) Percentage 0.14% 1.03% 0.13% 1.00% 22 Return on Equity (ROE) Percentage 2.64% 16.96% 2.49% 16.59% 23 Earnings per Share 5.33 33.49 5.00 32.62 Percentage Taka Percentage Taka 2018 2017 2018 2017 301
  301. Agrani Bank Limited Related Party Disclosure ANNEXURE - A i ) Directors & their close family members’ Interest and Position in Different Entities Status Date of appointment No. of shares held in the Bank Chairman 29-Nov-17 01 Visiting Professor North South University, Dhaka, Bangladesh Former Research Director, BIDS Mrs. Sangita Ahmed Director 07-Mar-16 01 Managing Partner, Time Out House 65E, RD 19 Banani Ex-President, Bangladesh Women Chamber Mr. Shameem Ahsan Director 13-Apr-16 01 Managing Director, e-Generation Limited Saimon Center, 5th floor, House-4/A Road-22, Gulshan-1, Dhaka-1212. Mrs. Hasina Newaaz Director 13-Apr-16 01 Women Entrepreneur, Orkid Printers Ltd. 32/A, 33 Mymemsing Lane Bangla Motor, Dhaka Professor Dr. Nitai Chandra Nag Director 13-Apr-16 01 Professor, University of Chattogram Mr. M. Ashiqul Hoque Chawdhury Director 13-Apr-16 01 Ex-Joint Secretary Mr. Kashem Humayun Director 06-Sep-16 01 Manageing Editor The Daily Sangbad Mr. Md. Ansar Ali Khan Director 22-Dec-16 01 Additional Secretary (Rtd.) Ministry of Public Administration, Govt. of People’s Republic of Bangladesh Ms. Mahmuda Begum Director 29-Sep-17 01 Additional Secretary (World Bank) Economic Relation Division, Ministry of Finance, Block-16, Room-4,Sher-eBangla Nagar, Dhaka-1207 MD & CEO 24-Aug-16 Name and address Dr. Zaid Bakht Mr. Mohammad Shams-Ul Islam Entities where they have interest & position Managing Director & CEO Agrani Bank Limited Head Office, Dhaka ii) Related party relationship disclosure during the year 2018 (IAS-24 Related Party Disclosure) Name of Related Party Related Party Relationship Amount (Tk.) Nature Government (Note-21.1) Owner Government (Note-21.2) Owner 48,408,984,798 Letter of Credit Government (Note-6) Owner 82,881,919,024 Government Securities Government (Note-9) Owner 17,692,273,401 Advance Income Tax Ministry of Food and other Ministries (Note-7.3.b) Owner 1,947,799,000 Loans and Advances State Owned Enterprises (Note-7.3.b) Government (Note-11.d) Government Enterprises Owner 205,842,267 Letter of Guarantee 6,128,501,000 Guarantees for Loans and Advances 75,613,749,444 Deposits (CD, SB, FDR, STD and SP Deposit) Agrani Remittance House , Canada Subsidiary Company Agrani Exchange House Pvt. Ltd. (Note-9.1) Subsidiary Company 6,457,000 Investment in subsidiary company Agrani Remittance House SDN.BHD (Note-9.1) Subsidiary Company 8,967,168 Investment in subsidiary company Agrani Remittance House , Canada (Note-9.1) Subsidiary Company 8,217 Investment in subsidiary company Agrani Exchange House Pvt. Australia (Note-9.1) Subsidiary Company 4,000,965 Investment in subsidiary company Agrani Equity & Investment Ltd. (Note-9.1) Subsidiary Company 4,000,000,000 Investment in subsidiary company Agrani SME Financing Com. Ltd. (Note-9.1) Subsidiary Company 600,000,000 Investment in subsidiary company 302 Annual Report 2018 27,965,111 Loans to subsidiary company
  302. Agrani Bank Limited Treasury Bill , Treasury Bond, Other Bond As at 31 December 2018 ANNEXURE - B .1 Treasury Bill: Particulars No.of Quantity A. Treasury Bills in HTM (Un-encumbered/SLR) 14 Days 2 182 Days 3 364 Days 8 Sub total Face Value Rate of Interest 2,000,000,000 3.99-4.08 7,491,200,000 3.35-3.45 11,885,400,000 3.30-4.49 21,376,600,000 B. Treasury Bills in HTM (Encumbered/Non SLR-Lien with BB under ALS) 91 Days 1 2,000,000,000 0.90 Sub total 2,000,000,000 total Treasury Bill (A+B) 23,376,600,000 Amount Booked Rev. Amortization Reserve A/C Cost Value/ Previous Value Market value on 31.12.18 (Taka) 1,997,664,360 7,366,677,326 11,473,474,087 20,837,815,772 1,999,623,638 7,456,093,778 11,653,433,910 21,109,151,326 1,959,278 89,416,452 179,959,824 271,335,554 1,995,522,000 1,995,522,000 22,833,337,772 1,995,522,000 1,995,522,000 23,104,673,326 271,335,554 ANNEXURE - B.2 Treasury Bond: Particulars No.of Quantity A. Treasury Bond in HTM (Un-encumbered/SLR) Govt. Treasury Bond ( 2 years) 2 Govt. Treasury Bond ( 5 years) 8 Govt. Treasury Bond ( 10 years) 12 Govt. Treasury Bond ( 10 years2 Remeasered) Govt. Treasury Bond ( 15 years) 43 Govt. Treasury Bond ( 20 years) 44 Bangladesh Govt. Islamic Investment 1 Bond-BGIIB (IBU) Jute Sector (25 Years) 1 7 Yrs.(Agrani Bank-BPC) T.Bond-2020 1 8 Yrs.(Agrani Bank-BPC) T.Bond-2021 1 10Yrs.(Agrani Bank-BPC) T.Bond-2023 1 9 Yr.(Agrani Bank-BJMC) T.Bond-2021 1 11 Yr.(Agrani Bank-BJMC) T.Bond-2023 1 13 Yr.(Agrani Bank-BJMC) T.Bond-2024 1 Sub Total (A) Face Value 3,999,500,000 5,576,700,000 3,955,400,000 894,200,000 Rate of Interest Market value on 31.12.18 (Taka) Amount Booked Rev. Amortization Reserve A/C 5.04-5.14 5.74-9.59 6.77-11.75 9.45-9.53 4,015,878,564 5,624,709,194 3,983,231,815 896,153,942 4,013,762,560 5,620,266,840 3,979,264,539 895,525,902 1,071,696 16,795,126 - 5,891,900,000 7.79-14.00 5,071,600,000 8.24-13.14 60,000,000 5,999,390,148 5,171,090,156 60,000,000 5,984,277,806 5,167,129,886 60,000,000 6,501,112 1,955,880 18,827,500 6,000,000,000 6,000,000,000 6,126,800,000 1,359,700,000 1,699,600,000 2,039,500,000 48,994,881,319 18,827,500 6,000,000,000 6,000,000,000 6,126,800,000 1,359,700,000 1,699,600,000 2,039,500,000 48,964,655,033 26,323,813 - 3,040,364,910 3,041,255,940 6,081,620,850 3,040,364,910 3,041,255,940 6,081,620,850 - - 278,234,470 7,497,844,185 7,776,078,655 278,292,290 7,497,364,711 7,775,657,001 117,300 44,165 161,465 - 199,414,800 101,223,700 9,636,404,325 2,000,693,979 1,157,197,390 13,094,934,194 75,947,515,018 200,027,600 102,989,300 9,350,753,825 1,968,760,916 1,185,581,023 12,808,112,663 75,630,045,547 26,485,278 7,422,800 12,229,200 721,496,012 241,018,056 175,917,024 1,158,083,093 1,158,083,093 61,055,000 6,000,000,000 6,000,000,000 6,126,800,000 1,359,700,000 1,699,600,000 2,039,500,000 48,735,955,000 5.00 7.00 7.00 7.00 5.00 5.00 5.00 B. Treasury Bond in HTM (Encumbered/Non SLR-Lien with BB under ALS) Govt. Treasury Bond ( 15 years) 1 3,000,000,000 Govt. Treasury Bond ( 20 years) 1 3,000,000,000 Sub Total (B) 6,000,000,000 7.55 8.24 C. Treasury Bond in HTM (Encumbered/Non SLR-Lien with BB in favour of SCB) Govt. Treasury Bond ( 5 years) 1 278,500,000 9.66 Govt. Treasury Bond ( 10 years) 20 7,495,800,000 8.75-11.75 Sub Total (C) 7,774,300,000 D. Treasury Bond in HFT (Un-encumbered/SLR) Govt. Treasury Bond ( 2 years) 1 Govt. Treasury Bond ( 5 years) 1 Govt. Treasury Bond ( 10 years) 20 Govt. Treasury Bond ( 15 years) 16 Govt. Treasury Bond ( 20 years) 14 Sub Total (D) Total Treasury Bond (A+B+C+D) Cost Value/ Previous Value 200,000,000 4.44 100,000,000 5.84 7,754,600,000 6.77-12.22 1,512,700,000 11.50-12.42 862,200,000 12.00-12.48 10,429,500,000 72,939,755,000 303
  303. Agrani Bank Limited Treasury Bill , Treasury Bond, Other Bond As at 31 December 2018 ANNEXURE - B.3 Other Bond Particulars No.of Quantity Face Value Rate of Interest Cost Value/ Previous Value Market value on 31.12.18 (Taka) Amount Booked Rev. Amortization Reserve A/C Subordinated Bond (Encumbered/Non SLR) UCBL Subordinated Bond 1 210,000,000 15.50 210,000,000 210,000,000 ONE Bank Subordinated Bond 1 200,000,000 15.50 200,000,000 200,000,000 AB BANK Subordinated Bond 1 300,000,000 11.00-13.00 300,000,000 300,000,000 Southeast Bank Ltd. Subordinated Bond 1 300,000,000 11.25-14.50 300,000,000 300,000,000 Floating Rate Dated Sub. Bond of EBL 1 160,000,000 11.50-14.00 160,000,000 160,000,000 Floating Rate Dated Sub. Bond of Bank Asia 1 160,000,000 11.50-14.00 160,000,000 160,000,000 Floating Rate Dated Sub. Bond of Prime Bank 1 160,000,000 11.50-14.00 160,000,000 160,000,000 Floating Rate Dated Sub. Bond of Exim Bank 1 400,000,000 11.50-14.00 400,000,000 400,000,000 UCBL Subordinated Bond -II 1 160,000,000 10.00-13.50 160,000,000 160,000,000 Al-Arafah Islami Bank Subordinated Bond 1 240,000,000 10.50-13.50 240,000,000 240,000,000 AB Bank Subordinated Bond II 1 400,000,000 10.50-13.50 400,000,000 400,000,000 STANDARD Bank Subordinated Bond 1 180,000,000 11.50-14.00 180,000,000 180,000,000 Dhaka Bank Floating Rate Dated Subordinated Bond 1 500,000,000 7.00-11.00 500,000,000 500,000,000 IFIC Bank Coupon Bearing Subordinated Bond 1 500,000,000 7.00-11.00 500,000,000 500,000,000 Southeast Bank Subordinated Bond II 1 450,000,000 7.00-10.50 450,000,000 450,000,000 Mutual Trust Bank Ltd Subordinated Bond-II 1 300,000,000 7.00-10.50 300,000,000 300,000,000 Bank Asia Ltd. Subordinated Bond 1 250,000,000 7.00-10.50 250,000,000 250,000,000 Floating Rate Subordinated Mudaraba Bond fo Exim Bank Ltd. 1 500,000,000 7.75 500,000,000 500,000,000 DBBL Subordinated Bond 1 500,000,000 7.00-10.50 500,000,000 500,000,000 City Bank 2nd Subordinated Bond 1 200,000,000 7.00-10.00 200,000,000 200,000,000 Premier Bank Subordinated Bond 1 200,000,000 7.00-10.00 200,000,000 200,000,000 Standard Bank Subordinated Bond 2 1 500,000,000 7.00-10.50 500,000,000 500,000,000 Islami Bank Subordinated Bond 1 1,000,000,000 7.80 1,000,000,000 1,000,000,000 Pubali Bank Ltd. Floating Rate Subordinated Bond 1 1,000,000,000 7.50-10.50 1,000,000,000 1,000,000,000 National Bank 2nd Subordinated Bond 1 250,000,000 7.00-10.00 250,000,000 250,000,000 FSIBL Subordinated Bond 1 300,000,000 8.00 300,000,000 300,000,000 UCBL 3rd Subordinated Bond 1 300,000,000 7.00-10.00 300,000,000 300,000,000 NCC Bank Non-Convertible Subordinated Bond 1 500,000,000 11.50-14.00 500,000,000 500,000,000 Rupali Bank Subordinated Bond 1 2,000,000,000 10.00-13.50 2,000,000,000 2,000,000,000 Jamuna Bank Subordinated Bond 1 500,000,000 10.50-13.50 500,000,000 500,000,000 Mercantile Bank Subordinated Bond 1 1,000,000,000 10.50-13.50 1,000,000,000 1,000,000,000 Southeast Bank Subordinated Bond III 1 1,500,000,000 11.50-14.00 1,500,000,000 1,500,000,000 Dhaka Bank Floating Rate Dated Subordinated Bond II 1 1,500,000,000 7.00-11.00 1,500,000,000 1,500,000,000 Prime Bank Subordinated Bond 1 2,000,000,000 7.00-11.00 2,000,000,000 2,000,000,000 The Farmers Bank Subordinated Bond 1 1,000,000,000 7.00-10.50 1,000,000,000 1,000,000,000 Al Arafah Islami Bank Mudaraba Subordinated Bond-II 1 1,000,000,000 7.00-10.50 1,000,000,000 1,000,000,000 Investment Corporation of Bangladesh Subordinated Bond 1 7,000,000,000 7.00-10.50 7,000,000,000 7,000,000,000 City Bank Limited 3rd Subordinated Bond 1 1,000,000,000 7.75 1,000,000,000 1,000,000,000 Trust Bank Limited Floating Rate Dated Subordinated Bond 1 2,000,000,000 7.00-10.50 2,000,000,000 2,000,000,000 Shahjalal Islami Bank Mudaraba Floating Rate Dated Subordinated Bond 1 2,500,000,000 7.00-10.00 2,500,000,000 2,500,000,000 Islami Bank Mudaraba Floating Rate Dated Subordinated Bond 1 3,000,000,000 7.00-10.00 3,000,000,000 3,000,000,000 UCB 4th Floating Rate Dated Subordinated Bond 1 2,500,000,000 7.00-10.50 2,500,000,000 2,500,000,000 DBBL Floating Rate Dated Subordinated Bond-II 1 2,000,000,000 7.80 2,000,000,000 2,000,000,000 SIBL Floating Rate Dated Subordinated Bond 1 2,500,000,000 7.50-10.50 2,500,000,000 2,500,000,000 Total Other Bond (Un-Approved) Grand Total(Annexure B.1 + B.2+B.3) 304 Annual Report 2018 43,120,000,000 139,436,355,000 43,120,000,000 43,120,000,000 - - 141,900,852,790 141,854,718,873 297,820,832 1,158,083,093
  304. Agrani Bank Limited Repo , Reverse Repo and Inter-Bank Reverse Repo As at 31 December 2018 ANNEXURE - B.4 A.(i) Disclosure regarding outstanding Repo as on 31 December, 2018 Sl. No. Counter party name Agreement Date Reversal Date Amount (1st leg cash consideration) 1 Bangladesh Bank (ALS) 12/27/2018 1/1/2019 7,400,000,000 2 United Commercial Bank Limited 12/27/2018 1/1/2019 1,496,272,880 3 Southeast Bank Limited 12/27/2018 1/1/2019 1,002,499,860 4 Bank Asia Limited 12/27/2018 1/1/2019 1,503,749,790 5 Jamuna Bank Limited 12/27/2018 1/1/2019 501,249,930 Total 11,903,772,460 A.(ii) Disclosure regarding outstanding Reverse Repo as on 31 December, 2018 Sl. No. 1 Counter party name Agreement Date Reversal Date Amount (1st leg cash consideration) Nil Total - B. Disclosure regarding overall transaction of Repo and Reverse Repo: Minimum outstanding during the year Maximum outstanding during the year i) With Bangladesh Bank 7,400,000,000 7,400,000,000 7,400,000,000 ii) With Other Banks & Financial Institutions 1,244,346,250 4,503,772,460 3,000,893,905 - - 391,325,690 6,567,870,576 Daily average outstanding during the year Securities sold under repo Securities purchased under reverse repo i) With Bangladesh Bank ii) With Other Banks & Financial Institutions 2,059,894,501 305
  305. Agrani Bank Limited Share - Quoted As at 31 December 2018 ANNEXURE - C (1) A. Share - Quoted Particulars/ Name of Companies Banks AB Bank Ltd City Bank Ltd. Exim Bank Ltd. Southeast Bank Ltd. Uttara Bank Ltd. NBFI BAY Leasing PLFSL United Finance Insurance Pragati Insurance Ltd. Fuel & Power DESCO MJLBD Meghna Petrolium Padma Oil Power Grid Ltd SPCL Sumit Power Ltd Titas Gas Ltd Pharmaceutical ACI ACI Formula Beximco Pherma ORION Pherma Square Pharma Wata Chemical Engineering Atlas Bangla BD Lamps BSRM Steel RSRM Steel S Alam CRST Spinning & Textile Argon Denim Malek Spnning Pramount Textile Ltd. Square Textile Mills Ltd Zaheen Spin Cement Aramit Cement Confidence Cement Mutual Funds ICB AMCL 1st Agrani Bank Ltd. Popular Life 1st M F Vanguard AML BD Vanguard AML RD CAPMBDBL Miscelleneous Aamra Net BD COM Beximco Ltd EHL GP GHAIL Unique Hotel Non-Trading Shares B,D.Luggage Ltd B.C.I Ltd Bangladesh Shipping Corp. Bengal Biscuits Ltd Dacca Dying & Manf.Co.(Lock-in) ICB* Padma Printers & Colors Phoenix leather Complex Ltd Total Quoted Shares (A) 306 Annual Report 2018 No. of Shares Par Value Tk. Average cost per share Tk. total Book Value Tk. Market Rate as at 31-12-18 Tk. Market Value as at 31-12-18 Tk. Unrealised Capital Gain/(Loss) Tk. Provision Kept Tk. 69,503 1,816,829 8,456,764 3,715,947 3,013,280 10 10 10 10 10 65.25 49.28 17.33 36.44 39.86 4,535,049 89,527,647 146,572,807 135,419,483 120,120,805 12.00 30.20 11.80 15.60 28.50 834,036 54,868,236 99,789,815 57,968,773 85,878,480 (3,701,013) (34,659,411) (46,782,992) (77,450,710) (34,242,325) 3,701,013 34,659,411 46,782,992 77,450,710 34,242,325 321,678 136,360 473,757 10 10 10 72.22 50.85 45.95 23,232,160 6,934,276 21,769,543 20.50 5.60 17.80 6,594,399 763,616 8,432,875 (16,637,761) (6,170,660) (13,336,668) 16,637,761 6,170,660 13,336,668 471,865 10 114.56 54,056,951 27.90 13,165,034 (40,891,918) 40,891,918 282,560 1,145,209 16,240 560,173 4,020,083 1,917,797 9,305,240 2,150,162 10 10 10 10 10 10 10 10 86.28 108.42 262.94 365.58 94.70 108.87 60.84 100.71 24,378,756 124,162,658 4,270,109 204,787,797 380,690,702 208,787,915 566,151,063 216,536,187 40.40 99.20 188.60 225.20 48.00 94.80 39.40 36.40 11,415,424 113,604,733 3,062,864 126,150,960 192,963,984 181,807,156 366,626,456 78,265,897 (12,963,332) (10,557,925) (1,207,245) (78,636,837) (187,726,718) (26,980,759) (199,524,607) (138,270,290) 12,963,332 10,557,925 1,207,245 78,636,837 187,726,718 26,980,759 199,524,607 138,270,290 414,417 5,095 2,512,308 6,000,000 1,277,285 50,832 10 10 10 10 10 10 386.47 159.39 106.55 83.35 274.91 294.78 160,158,057 812,115 267,689,556 500,089,996 351,143,421 14,984,338 326.20 153.80 79.10 36.80 254.20 472.00 135,182,825 783,611 198,723,563 220,800,000 324,685,847 23,992,704 (24,975,232) (28,504) (68,965,993) (279,289,996) (26,457,574) 9,008,366 24,975,232 28,504 68,965,993 279,289,996 26,457,574 (9,008,366) 80,218 84,200 284,130 462,099 863,000 10 10 10 10 10 203.18 216.93 173.16 58.23 72.62 16,298,815 18,265,838 49,200,562 26,908,098 62,674,896 121.90 197.00 59.90 46.50 28.20 9,778,574 16,587,400 17,019,387 21,487,604 24,336,600 (6,520,241) (1,678,438) (32,181,175) (5,420,495) (38,338,296) 6,520,241 1,678,438 32,181,175 5,420,495 38,338,296 720,748 306,130 1,191,611 162,353 387,289 10 10 10 10 10 29.71 52.04 66.31 82.63 18.28 21,414,682 15,931,680 79,011,156 13,415,057 7,078,481 26.30 17.20 65.90 47.10 11.20 18,955,672 5,265,436 78,527,165 7,646,826 4,337,637 (2,459,010) (10,666,244) (483,991) (5,768,231) (2,740,844) 2,459,010 10,666,244 483,991 5,768,231 2,740,844 174,240 567,725 10 10 78.58 193.25 13,692,550 109,712,369 22.10 179.40 3,850,704 101,849,865 (9,841,846) (7,862,504) 9,841,846 7,862,504 50,000,000 241,209 8,194,550 20,000,000 1,899,979 10 10 10 10 10 10.00 10.39 10.00 10.00 10.00 500,000,000 2,505,903 81,945,500 200,000,000 18,999,790 6.90 4.20 6.90 7.60 6.70 345,000,000 1,013,078 56,542,395 152,000,000 12,729,859 (155,000,000) (1,492,825) (25,403,105) (48,000,000) (6,269,931) 155,000,000 1,492,825 25,403,105 48,000,000 6,269,931 966,375 70,100 4,103,472 2,002,024 332,486 2,915,081 1,254,325 10 10 10 10 10 10 10 103.43 26.91 90.96 52.43 380.80 39.24 52.85 99,949,570 1,886,596 373,232,380 104,965,259 126,609,338 114,389,888 66,286,827 58.80 28.70 23.50 46.60 367.30 29.30 52.80 56,822,850 2,011,870 96,431,592 93,294,318 122,122,108 85,411,873 66,228,360 (43,126,720) 125,274 (276,800,788) (11,670,941) (4,487,230) (28,978,015) (58,467) 43,126,720 (125,274) 276,800,788 11,670,941 4,487,230 28,978,015 58,467 600 1,230 10,770 420 98,349 35,021,915 28,484 599 180,559,095 100 100 100 100 10 10 10 100 8.00 15.25 171.42 33.00 5.07 18.01 3.40 100.00 4,800 18,756 1,846,247 13,860 498,750 630,580,970 96,846 59,900 6,384,306,755 8.00 15.25 39.00 33.00 5.50 18.01 3.40 100.00 4,800 18,756 0 (0) 420,030 (1,426,216) 1,426,216 13,860 540,920 42,170 (42,170) 630,580,970 96,846 59,900 4,337,348,542 (2,046,958,212) 2,046,958,212
  306. Agrani Bank Limited Share - Unquoted As at 31 December 2018 ANNEXURE - C (2) B. Share - Un-quoted Name of Companies No. of Shares A.B.Biscuit Co Ltd Par Value Average cost per share total Book Value Market Rate as at 31-12-18 Market Value as at 31-12-18 Unrealised Capital Gain/(Loss) Provision Required Tk. Tk. Tk. Tk. Tk. Tk. Tk. 378 100 100.00 37,800 - - (37,800) 37,800 Adamjee Jute Mills Ltd 30,000 10 8.16 244,800 - - (244,800) 244,800 Eastern Mercantile Bank Ltd 10,000 10 10.00 100,000 - - (100,000) 100,000 Karnafuly Rayan Chemicals 600 10 10.00 6,000 - - (6,000) 6,000 National Oxyzen Ltd 1,986 100 100.00 198,600 - - (198,600) 198,600 Paper Coverting & Pacg . 1,478 100 100.00 147,800 - - (147,800) 147,800 Spcialised Jute Manf. Co Ltd Swan Textile Mills Ltd Best Holdings Ltd. B. Commerce Bank Ltd 33,790 10 10.00 337,900 - - (337,900) 337,900 1,000 100 100.00 100,000 - - (100,000) 100,000 12,500 100,000 100,000.00 1,250,000,000 100,000.00 1,250,000,000 - - 900,000 100 100.00 90,000,000 100.00 90,000,000 - - Swift share 9 181,069 181,069.46 1,629,625 181,069.46 1,629,625 - - 8,567,705 10 2.75 23,541,640 2.75 23,541,640 - - 20,000,000 100 100.00 2,000,000,000 100.00 2,000,000,000 - - 30,000 100 100.00 3,000,000 100.00 3,000,000 - - 165,000,000 10 10.00 1,650,000,000 10.00 1,650,000,000 - - 1,600,000 100 100.00 160,000,000 100.00 160,000,000 - - Orion Infrastructure Ph-1 (Pref. Share) 150,000,000 10 10.00 1,500,000,000 10.00 1,500,000,000 - - Orion Infrastructure Ph-2 (Pref. Share) 150,000,000 10 10.00 1,500,000,000 10.00 1,500,000,000 - - 50,000,000 10 10.00 500,000,000 10.00 500,000,000 - - Beximco Ltd 5,200,000 10 198.08 1,030,000,000 23.50 122,200,000 (907,800,000) 907,800,000 GMG Airlines Ltd. 6,383,197 10 32.90 210,000,000 - - (210,000,000) 210,000,000 GMG Airlines Ltd. 8,801,760 10 34.08 300,000,000 - - (300,000,000) 300,000,000 GMG Airlines Ltd. 3,319,673 10 33.14 110,000,000 - - (110,000,000) 110,000,000 GMG Airlines Ltd. 1,371,351 10 36.46 50,000,000 - CDBL Bangladesh Fund Financial Excellence Ltd. Farmers Bank Ltd. Karma Sangsthan Bank Preference Shares Duth Bangla Power & Associates Ltd. Buy Back Shares Total buy back Total Unquoted share (B) GRAND TOTAL (A+B) - (50,000,000) 50,000,000 122,200,000 (1,577,800,000) 1,577,800,000 8,800,371,265 (1,578,972,900) 1,578,972,900 1,700,000,000 571,265,427 10,379,344,165 751,824,522 16,763,650,920 13,137,719,807 (3,625,931,112) 3,625,931,112 Total provision maintained against investment in capital market Additional shares of the following companies are pledged as additional security against buy back shares. Name of Companies Beximco Limited Shinepukur Ceramics Total No. of Shares Par Value Market Rate as at 31-12-2018 Market Value as at 31-12-2018 Tk. Tk. Tk. 19,947,211 10 23.50 468,759,459 9,900,000 10 14.00 138,600,000 29,847,211 607,359,459 307
  307. Agrani Bank Limited Debenture As at 31 December 2018 ANNEXURE - D Name of organisation Quantity Amount (Tk) M/S Bawa Jute Mills Ltd. 1 1 M/S Hotel Ilisium 1 1 Rupon Oil & Feeds Ltd. 1 1 Bay-Sodium Chemicals Ltd. 1 1 Monir Chemicals Ltd. 1 1 Ismail Carpet Mills Ltd. 1 1 Saleh Carpet Mills Ltd. 1 1 Mirzabo steel Mills Ltd. 1 1 Karnafuly Paper Mills Ltd. 1 1 Karnafuly Rayon & Chamicals Ltd. 1 1 Bangladesh Textile Mills Corporation 1 1 Bangladesh Textile Mills Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Bangladesh Steel & Engineering Corporation 1 1 Total Debenture 17 17 Unapproved Debenture 308 Annual Report 2018
  308. Agrani Bank Limited NOSTRO Account (Outside Bangladesh) As at 31 December 2018 ANNEXURE - E (1) Name of the Bank Conversion Currency Amount in FC Rate per unit Name FC Amount in USD Weighted Average Rate Amount in BDT Nostro Account: Debit Balance SCB LONDON GBP 1,738,579.87 1.266 2,201,389.83 83.900 184,696,607 PUBLIC BANK MALAYSIA USD 36,593.33 1.000 36,593.33 83.900 3,070,180 MASHREQUE BANK NY USD 39,311,231.47 1.000 39,311,231.47 83.900 3,298,212,320 SCB NY USD 23,282,641.81 1.000 23,282,641.81 83.900 1,953,413,648 KOOKMIN BANK, SEUL USD 13,511.40 1.000 13,511.40 83.900 1,133,606 ICICI BANK, HONGKONG USD 97,492.69 1.000 97,492.69 83.900 8,179,637 SCB, FRANKFURT, GERMANY EUR 540,787.07 1.137 615,091.21 83.900 51,606,153 UNICREDITO ITALIA EUR 65,359.42 1.137 74,339.80 83.900 6,237,110 CITY BANK NA, LONDON EUR 348,008.18 1.137 395,824.50 83.900 33,209,676 SONALI BANK KOLKATA ACUD 824,391.20 1.000 824,391.20 83.900 69,166,422 AB BANK, MUMBAI. INDIA ACUD 248,593.02 1.000 248,593.02 83.900 20,856,954 BANK OF CEYLON, COLOMBO ACUD 18,973.61 1.000 18,973.61 83.900 1,591,886 BANK OF CEYLON, MALDIVES ACUD 5,000.00 1.000 5,000.00 83.900 419,500 SCB NEPAL ACUD 26,453.46 1.000 26,453.46 83.900 2,219,445 SCB INDIA ACUD 949,221.44 1.000 949,221.44 83.900 79,639,679 ICICI BANK, MUMBAI, INDIA ACUD 5,879,778.43 1.000 5,879,778.43 83.900 493,313,410 UNITED BANK OF INDIA ACUD 711,092.97 1.000 711,092.97 83.900 59,660,699 HABIB METROPOLITAN BANK ACUD 512,545.02 1.000 512,545.02 83.900 43,002,527 BOT, TOKYO,JAPAN JPY 96,427,161.00 110.950 869,104.65 83.900 72,917,880 SCB, TOKYO, JAPAN JPY 28,565,909.00 110.950 257,466.51 83.900 21,601,440 SCB MUMBAI, INDIA ACUEUR 3,730.25 1.137 4,242.79 83.900 355,969 UNION BANK OF SWISS CHF 100,757.13 0.996 101,161.78 83.900 8,487,473 HABIB BANK AG, ZURICH CHF 60,721.03 0.996 60,964.89 83.900 5,114,954 SCB SINGAPORE SGD 101,655.80 1.373 74,066.16 83.900 6,214,151 DEVELOPMENT BANK OF SINGAPORE SGD 452,517.50 1.373 329,703.10 83.900 27,662,090 BANK OF MONTREAL,TARANTO,CANADA CAD 1,457,727.62 1.359 1,072,726.19 83.900 90,001,727 AL-RAJHI BANKING SAR 80,076.45 3.753 21,337.79 83.900 Total: Debit Balance 77,994,939.05 1,790,240 6,543,775,383 Nostro Account: Credit Balance CITY BANK NA, NY USD 38,758,429.89 1.000 38,758,429.89 83.900 COMMERZ EURO EUR 265,388.91 1.137 301,853.35 83.900 Total: Credit Balance 39,060,283.24 GBP USD EUR JPY Nostro Account Credit BANGLADESH BANK Total Credit Balance NIL 49,716.47 5,478,815.93 1,257,269.29 2,110,849.40 1.266 1.000 1.137 110.950 25,325,496 3,277,157,764 Balance with Bangladesh Bank Foreign Currency Nostro Account Debit BANGLADESH BANK BANGLADESH BANK BANGLADESH BANK BANGLADESH BANK Total Debit Balance 3,251,832,268 ANNEXURE - E (2) 62,950.99 5,478,815.93 1,430,018.09 19,025.23 6,990,810.25 - 83.900 83.900 83.900 83.900 5,281,588 459,672,657 119,978,518 1,596,217 586,528,980 - 309
  309. Agrani Bank Limited Advance Tax and Provision for Taxation ANNEXURE - F Income Year Assessment Year Tax Provision as per account Assessment status Assessed Tax liabilities (As per DCT & Return) Excess/(short) Provision after Tax Assessed Payment of Advance Tax (TDS) 1 2 3 4 5 6=(3-5) 7 Refundable from 1989 to 2004 (except 2002) - - - - 3,101,735,796 2002 2003-04 10,000,000 Ref.case submitted in High Court Div. 75,088,642 (65,088,642) 510,581,907 2005 2006-07 35,517,653 Ref.case submitted in High Court Div. - 35,517,653 224,697,050 2006 2007-08 930,815,389 Ref.case submitted in High Court Div. 1,550,205,298 (619,389,909) 239,419,933 2007 2008-09 - Finalized 2,069,296,117 (2,069,296,117) 1,020,571,233 2008 2009-10 - Ref.case submitted in High Court Div. 529,287,978 (529,287,978) 125,729,702 2009 2010-11 1,700,000,000 Ref.case submitted in High Court Div. 1,823,339,976 (123,339,976) 84,148,956 2010 2011-12 2,068,600,000 Ref.case submitted in High Court Div. 1,513,876,083 554,723,917 177,840,291 2011 2012-13 4,250,000,000 Ref.case submitted in High Court Div. 4,801,202,762 (551,202,762) 95,564,918 2012 2013-14 1,580,000,000 Ref.case submitted in High Court Div. 3,929,508,388 (2,349,508,388) 906,330,684 2013 2014-15 - Ref.case submitted in High Court Div. (248,804,955) 248,804,955 1,337,623,850 2014 2015-16 126,000,000 Ref.case submitted in High Court Div. 2,710,299,658 (2,584,299,658) 1,750,952,960 2015 2016-17 131,000,000 2nd appeal filed in Tribunal Court 15,319,058,719 (15,188,058,719) 1,285,000,143 2016 2017-18 2,322,989,078 Return submitted Return (8,388,935,408) 10,711,924,486 2,177,390,893 2017 2018-19 2,682,800,000 Return submitted Return (1,288,840,909) 3,971,640,909 2,187,959,214 2018 2019-20 3,260,640,205 Total 310 19,098,362,325 Annual Report 2018 DCT 2,466,725,871 24,394,582,349 (8,556,860,229) 17,692,273,401
  310. 311 103 ,694,229 (4,027) (2,953,277) (489,484) (3,329,722) 109,278,105 Sub-Total : B (Overseas Branches) 1,730,636 - - (120,772) (4,570) - (4,570) - - - - (120,772) 19,089,173,858 257,095,523 (30,919,359) 178,546 Agrani Exchange Company, Australia Grand Total (A+B) 1,377,759 Agrani Remittance House, Canada 854,902 389,676 39,698,226 26,500,096 253,438 30,442,944 Agrani Exchange House, Singapore 232,620 Agrani Remittance House, Malaysia Agrani Equity & Investment Limited Agrani SME Financing Limited 3,365,147 3,365,147 11,080,534 1,249,994,906 1,249,994,906 Total Intangible Asset : B) Subsidiary Companies: 244,667 21,695,304 (29,590,440) (370,662,228) 18,979,895,753 255,364,887 (30,914,789) (400,252,668) Software Purchase Intangible Asset : Sub-total : A (In Bangladesh) 5,866,925 2,336,604,241 Library Books Computer 47,539,833 361,591,784 630,477,185 Office Equipment Electric Materials (7,159,774) (2,076,682) (1,042,823) 6,107,565 2,437,345,193 677,527,534 379,957,366 561,920,141 910,484,517 872,132,002 12,958,618,865 1,253,239,281 111,004,171 178,546 1,373,189 27,354,998 40,087,902 30,696,382 11,313,154 1,253,239,281 - 18,915,097,354 - - - - - - - - - - 18,804,093,183 - - - - - - - - Cost/Revaluation Disposal/ Transfer to Revaluation total balance Adjustment Non-banking during as on during the Asset the year 31.12.2018 year Taka Taka Taka - (13,859,000) 45,409,285 872,235,006 575,779,141 Furniture & Fixture - 36,781,569 Taka Addition during the year Motor Vehicles 903,799,124 13,293,542,347 Opening balance as on 01.01.2018 Taka Building Land Tangible Asset : A) Agrani Bank Limited Particulars As at 31 December 2018 Agrani Bank Limited Schedule of Fixed Assets % - - (3,922) (2,901,389) (469,893) (3,328,787) (13,858,989) (7,083,494) (216,320) - - 532,319,368 281,507,999 509,073,316 615,855,862 246,659,494 Taka 227,036 3,436,106 264,880,182 1,831,661,558 66,814,592 44,883,664 31,869,327 65,917,371 154,625,017 Taka Taka 2,671,459 605,683,635 145,208,166 98,449,367 52,846,825 294,628,655 625,472,508 2,653,933 766,921,476 164,502,516 121,638,662 84,716,163 315,213,021 811,548,327 12,958,618,865 13,293,542,347 Taka Net book value Net book value as on as on 31.12.2018 31.12.2017 142,662,360 70,164,596 - 1,303,716 9,735,819 32,781,125 18,303,359 8,040,577 142,662,360 (120,772) 122,873,749 - - - - - - - 8,076,445 - 22,673 989,824 1,799,607 4,506,893 757,448 (120,772) 122,873,749 265,415,337 78,241,041 - 1,326,389 10,725,643 34,580,732 22,810,252 8,798,025 265,415,337 1,107,332,546 32,763,130 178,546 46,800 16,629,355 5,507,170 7,886,130 2,515,129 39,113,509 178,546 74,043 16,764,277 6,917,101 12,139,585 3,039,957 987,823,944 1,107,332,546 987,823,944 - 3,419,159,308 (27,862,794) 629,217,189 4,020,513,703 14,783,579,480 15,560,736,445 3,212,992 1,569,682,765 465,974,669 239,953,122 491,062,978 557,021,985 92,250,797 Taka total balance Adjustment Charge as on for for the year disposal 31.12.2018 Depreciation - 3,489,323,904 (27,862,794) 637,293,634 4,098,754,744 14,816,342,610 15,599,849,954 - - - - - - - 10% 10% 20% 20% 20% 20% 10% 2.5% 0% Rate of depriciation Opening balance as on 01.01.2018 Taka ANNEXURE - G
  311. 312 Annual Report 2018 85 ,927 12,808 12,808 6,384 Carrying Amount 6,384 4,337 4,337 - Fair Value 15,229 Carrying Amount 15,229 15,229 15,229 - Fair Value Available for sale Non-financial asset - Carrying Amount - Fair Value - 621,806 621,806 58,981 58,981 - 704,316 704,316 - Financial liabilities at fair value - 45,200 45,200 45,200 45,200 Taka in million Financial liabilities Non-finacial measure at liabilities amortised cost Carrying Fair Carrying Fair Amount Value Amount Value - - - - - - - 23,529 23,529 - - ANNEXURE - H 12,808 85,927 85,927 12,808 12,808 - Fair Value Held for trading Carrying Amount 12,808 - Fair Value Loans & Receivable Held to maturity Carrying Fair Carrying Amount Value Amount Cash 3,893 3,893 Balance with Bangladesh Bank and agent Bank 33,222 33,222 Balance with other bank and financial institution 126,334 126,334 Investments 69,333 56,158 70,704 Loans and advance 395,753 395,753 Fixed assets Other assets 55,525 55,525 Borrowing from other banks, Financial institution and agents Deposit and other accounts Other liabilities Total 684,060 670,885 70,704 Items 6,384 4,337 15,196 15,196 - - 621,927 621,927 58,981 58,981 - 704,438 704,438 - 43,129 43,129 43,129 43,129 Taka in million Available for sale Non-financial asset Financial liabilities Financial liabilities Non-finacial at fair value measure at liabilities amortised cost Carrying Fair Carrying Fair Carrying Fair Carrying Fair Carrying Fair Amount Value Amount Value Amount Value Amount Value Amount Value - - - 6,384 4,337 - - 15,196 15,196 - - 23,529 23,529 - - Classification of Financial Instruments as per International Financial Reporting Standard (IFRS-7): Agrani Bank Limited 12,808 85,927 - Fair Value Held to trading Carrying Amount 12,808 - Fair Value Loans & Receivable Held to maturity Carrying Fair Carrying Amount Value Amount Cash 3,921 3,921 Balance with Bangladesh Bank and agent Bank 33,229 33,229 Balance with other bank and financial institution 126,615 126,615 Investments 78,017 78,017 70,704 Loans and advance 393,391 393,391 Fixed assets Other assets 51,057 51,057 Borrowing from other banks, Financial institution and agents Deposit and other accounts Other liabilities Total 686,231 686,231 70,704 Items As at 31 December 2018 Agrani Bank Limited Classification of Financial Instruments as per International Financial Reporting Standard (IFRS-7): Consolidated
  312. 313 Average Cost of Deposits Average Cost of Borrowing Average Yield on Loans & Advances (performing loan) Average Yield on Investments Average Yield on Call loans to Bank Average Yield on Balance with other Banks Net Spread Net Interest Margin Contribution of non-interest bearing liabilities a) b) c) d) e) f) g) h) i) Ratio As at 31 December 2018 Equation = Net Spread - Net Interest Margin = {(Interest Earned/Interest Earning Assets) (Interest Paid/Interest Bearing Liabilities)} Net Interest Income = Gross Earning Assets = Interest from Balance with other Bank Average Balance with other Banks = Income from Call Loans Average Money At Call = Income from Investment Average Investment = Interest on Loans Performing Loans = Interest paid in Borrowings Average Borrowings = Interest paid on Deposits Average Deposit Agrani Bank Limited Performance Evaluation x 100 = 0.31% x 100 = 5.04% 0.35% 3.25% 3.60% 954.87 x 100 = 8.73% 10,940.15 38.27 759.17 1,229.87 x 100 = 7.12% 17,282.31 2,262.14 x 100 = 7.72% 29,309.85 5.82 1,870.05 2017 x 100 = 0.91% 292.25 5,296.92 27.28 633.50 1.03% 3.59% 4.62% x 100 = 5.52% x 100 = 4.31% 1,520.41 x 100 = 7.37% 20,618.25 1,934.59 x 100 = 8.43% 22,954.93 8.34 914.91 1,803.31 x 100 = 3.52% 51,179.52 Consolidated 2,338.66 x 100 = 4.06% 57,589.89 2018 x 100 = 0.31% x 100 = 5.04% 0.35% 3.25% 3.60% 933.24 x 100 = 8.56% 10,902.09 38.27 759.17 1,203.06 x 100 = 7.29% 16,505.32 2,260.01 x 100 = 7.67% 29,462.11 5.82 1,870.05 2,242.06 x 100 = 3.89% 57,613.85 2018 292.25 5,277.15 27.28 633.50 1,468.92 19,920.56 1,933.53 23,062.47 8.34 914.91 1,782.38 51,219.99 Bank 1.03% 3.59% 4.62% x 100 = x 100 = x 100 = x 100 = x 100 = x 100 = 2017 5.54% 4.31% 7.37% 8.38% 0.91% 3.48% ANNEXURE - I (Taka in crore)
  313. 314 Annual Report 2018 total 1 2 Continuous Loan (CL-2) Small and Medium Enterprise 59,037,448 Financing(SMEF) Other than SMEF & CF 73,577,902 Sub-total ( 1 ) = 132,615,350 Demand Loans (CL-3) Small and Medium Enterprise 59,645 Financing(SMEF) Other than SMEF & CF 21,165,344 Sub-total ( 2 ) = 21,224,989 Fixed Term Loan (CL-4) Small and Medium Enterprise 13,959,564 Financing(SMEF) Consumer Financimg(other 1,578,379 than HF&LP) Housing Finance(HF) 24,151,848 Loans for professionals setup 250,032 business (LP) Others 135,838,169 Sub-total ( 3 ) = 175,777,992 Short Term Agri. credit and Microcredit(CL-5) Short Term Agri. credit 14,532,769 Microcredit 1,258,073 Sub-total ( 4 ) = 15,790,842 Sub-total (1+2+3+4+5) 345,409,172 Staff Loan 41,069,613 OBU 9,274,244 Intt. suspense at Head Office Grand Total 395,753,029 Categories of Loans As at 31 December 2018 680,216 907,752 363,225 363,225 255,749 47,372 320,548 1,768 10,743,674 10,803,319 7,462,648 345,446 22,220,588 247,884 93,764,914 11,455,953 124,041,480 12,081,390 12,919,525 924,511 13,844,036 262,236,147 13,335,513 40,973,304 9,274,244 312,483,695 13,335,513 77,550 90 - 59,645 5,745,615 1,476,339 290 1,152,611 6,030,776 9,913,515 9,913,515 - 309,913 1,768 46,531 255,318 360,974 360,974 - 88,870 890,024 801,154 8 2,067,459 27,869,627 11,075,625 2,217,727 36,529,643 11,689,155 56,823 - 16,005 77,440 44,046 44,046 - 1,016,326 10,463,620 1,264,826 16,209,235 248,500 BL 7 SMA 418,183 484,767 12,267 90 16,186 38,041 99,356 99,356 - 84,117 194,458 110,341 9 SS 377,060 290 1,023,696 3,102,830 7,146,462 7,146,462 - 5,005,645 6,877,317 1,871,672 11 BL 609,080 5,301 1,054,019 3,163,521 7,710,512 7,710,661 149 7,139,902 9,202,315 2,062,413 12 Provision Required 1,276,689 13,907,058 24,169,074 1,367,762 18,410,934 29,000,995 8,523 - 14,974 67,576 281,081 281,081 - 346,449 421,133 74,684 10 DF Base for Provision 5,564,684 6,771,104 964,044 - 4,582 237,794 32,474 32,474 - 122,945 153,149 30,204 13 UC 678,845 337,760 596,639 673,833 329,502 568,784 748,147 20,107 123,039 71,347 139,176 122,286 70,604 133,104 151,994 114 801,884 409,107 735,815 796,119 400,106 701,888 900,141 20,221 2,513,599 3,935,706 63,388,207 12,940,154 1,574,700 2,470,082 33,136,601 46,814,112 6,976,948 96,309 506,042 92,743 2,513,599 3,935,706 63,484,516 12,940,154 1,574,700 2,470,082 33,136,601 47,412,897 6,976,948 16,945 132,951 100,884 100,884 - 192,370 703,079 89,705 890,898 61,815,881 113,547,312 510,709 801,193 51,731,431 Balance Outstanding Unclassified (UC) Classified Standard SMA SS DF 3 4 5 6 Agrani Bank Limited Summary of Loan Classification and Provisioning - 835 874 39 61,319,921 17 Eligible Securities 1,167,865 - 132,767 1,063,563 1,957,991 1,957,991 - 46,338,044 75,304,547 23,360,001 47,600 7,240 5,551,661 1,859,375 1,871,875 12,500 1,606,782 45,892,751 2,040,555 107,212,672 433,773 16 total 7,200,951 13,145,978 8,346,805 15,510,172 193,186 - 127,336 825,332 1,923,266 1,923,266 - 1,483,002 1,886,532 403,530 Classified (Amount in Thousand) 25,680 45,788 294,024 7,151 7,265 17,909 32,832 53,053 311,933 395,388 12,189,435 19,561,771 184,701,027 236,917 395,388 12,189,435 19,798,688 184,701,027 380,343 392,263 10,635 - 849 437 2,251 2,251 14 SMA Interest Suspense on ANNEXURE - J
  314. 315 - - More than nine months but less than twelve months More than twelve months - - - - - 27 ,106,406.09 107,858,299.59 Credit (USD) 36,444,802.94 121,511,258.49 211,686,281.07 134,964,705.68 - - - - - 211,686,281.07 Debit (USD) As per correspondents book 4,477,225.86 - - - 28,301.28 - 4,448,924.58 Debit (USD) Debit (USD) - - - - - 16,197,345.28 113,737,941.58 - - - - 3,102,011.71 13,095,333.57 ANNEXURE - K 69,198,049.65 - - - - 5,055,587.57 64,142,462.08 Credit (USD) As per correspondents book 113,737,941.58 2017 Credit (USD) As per local book (GL) The Bank is not required to keep provision regarding the unreconciled debit balance as at balance sheet date since there was no debit entry aging more than three months. Total - - More than six months but less than nine months - 70,734,813.47 - 50,776,445.02 Credit (USD) 2018 More than three months but less than six months 36,444,802.94 Debit (USD) As per local book (GL) More than one month but less than three months Less than one month Particular As at 31 December 2018 Agrani Bank Limited Nostro Reconciliation
  315. 316 Annual Report 2018 ANNEXURE - L .1 892.13 Commission & brokerage Other operating income total operating income Investment - 39,575.30 Loans & Advances 892.13 105.12% Rate of operating income Profit before provision - - total operating expenses 892.13 Investment income (2,339.39) Loans & Advances 3,231.52 Net interest income Interest paid on deposits, borrowings etc. Interest income Particulars Operating segments - - - 15,923.02 141.75% 1,203.06 - 1,203.06 - - 1,203.06 Treasury - - - - - -148.82% (1,263.01) (1,650.87) 387.86 134.59 253.27 Other Agrani Bank Limited 15,923.02 39,575.30 98.05% 832.18 (1,650.87) 2,483.05 134.59 253.27 1,203.06 892.13 (2,339.39) 3,231.52 total 860.66 44.17 0.95% 8.05 (2.17) 10.22 0.03 0.63 26.81 (17.25) (17.62) 0.37 AEIL - 158.90 1.07% 9.11 (11.41) 20.52 0.47 - - 20.05 (1.16) 21.21 ASMEFCL - - 0.01% 0.07 (6.78) 6.85 1.64 5.20 - 0.01 - 0.01 AEHPL Subsidiaries 5.22 - -0.08% (0.70) (4.58) 3.88 0.40 3.27 - 0.21 - 0.21 ARHSB 2.47 - -0.00% (0.02) (0.39) 0.37 0.11 0.23 - 0.03 - 0.03 ARHCI - (439.23) 0.00% - - - - - - - (18.36) (18.36) Deduction 16,791.38 39,339.14 100.00% 848.69 (1,676.20) 2,524.89 137.24 262.60 1,229.87 895.18 (2,339.81) 3,234.99 Grand total (Taka in crore) For the purpose of segment reporting as per Bangladesh Financial Reporting Standards (BFRS) 8, ‘Operating Segments’ is the following segment relating to revenue, expenses, assets and liabilities have been indentified and shown as follows: * Loans & Advances * Treasury * Agrani Equity & Investment Limited, Dhaka * Agrani SME Financing Limited, Dhaka * Agrani Exchange House Pvt. Limited, Singapore * Agrani Remittance House SDN. BHD., Malaysia * Agrani Remittance House Canada Inc. As at 31 December 2018 Agrani Bank Limited Segment Reporting
  316. 317 160 79 138 144 Operating profit (loss) as % 53.49 5.58% 6.30% 47.37 (35.23) (36.63) 1,295.02 1,229.87 2,524.89 Operating income from banking operation Operating income from investment operation total Operating Income Amount 5.14% 43.59 (1.62) 91.24 94.87 11.45 Amount 48.45% 100.00%2,483.05 100.00% 48.71%1,203.06 % 51.55% Bank (Taka in crore) 51.29%1,279.99 % Consolidated C. Treasury operations comprising of the banking entity 564.56 66.52% Operating profit (loss) (2,684.85) Branch Interest Expenses 294.18 126.63 13.34 (90.14) (148.48) (140.90) (846.56) 1,641.70 Allocated expenses Branch Interest Income 9.21 (121.44) 111.97 49.38 2,454.27 11.90 Other operating income 14.75 - 71.52 total operating income 10.66 - 83.88 56.64 43.40 4.58 3.90 - 27.51 (2.66) -9.29% 3.24% (78.87) (1.70) 54.42 111.54 (65.05) (45.95) (66.54) (35.42) 6.49 3.35 - (76.38) (43.90) (94.33) (133.02) (87.30) 165.85 181.93 - (141.31) (269.26) (117.67) 127.95 201.55 Commission, exchange earnings and brokerage 1,019.90 1,203.06 (1,248.36) 2,268.26 Investment income Nature of operation 59 Agrani Bank Limited 61 66 90 113 42 3.54% 30.04 (3.92) 37.46 (81.01) 77.51 8.22 13.71 - 55.58 (56.59) 112.17 63.06 7.42% 62.94 (1.28) 119.87 (91.35) 35.70 15.69 6.41 - 13.60 6.94% 58.92 - 229.07 (92.24) (77.91) 11.16 4.69 - (93.76) (118.76) (156.82) 132.36 3,231.52 total 952 total 0.37 AEIL 2,483.05 134.59 253.27 2,767.89 2.67% 22.63 98.05% 832.18 - (2,767.89) 61.78 0.95% 8.05 - - (2.17) 10.22 0.03 0.63 26.81 892.13 (17.25) 1,203.06 (49.19) (1,650.87) 10.04 5.07 1.97 - 3.00 (57.28) (2,339.39) (17.62) 60.28 Dhaka Chattogram Khulna Rajshahi Barishal Sylhet Rangpur Mymensing Cumilla Faridpur Net interest income Interest paid on deposits, borrowings etc. Interest income Particulars Agrani Bank Limited Dhaka Chattogram Khulna Rajshahi Barishal Sylhet Rangpur Mymensing Cumilla Faridpur B. Domestic operations in line with geographical segments Number of Branches Particulars A. Banking operations comprising of branches of the banking entity As at 31 December 2018 Agrani Bank Limited Segment Reporting 1.07% 9.11 - - (11.41) 20.52 0.47 - - 20.05 (1.16) 21.21 0.01% 0.07 - - (6.78) 6.85 1.64 5.20 - 0.01 - 0.01 ASMEFCL AEHPL Subsidiaries (0.02) - - (0.39) 0.37 0.11 0.23 - 0.03 - 0.03 ARHCI -0.08% -0.00% (0.70) - - (4.58) 3.88 0.40 3.27 - 0.21 - 0.21 ARHSB 3,234.99 Grand total 895.18 2,524.89 137.24 262.60 1,229.87 2,767.89 0.00% - 100.00% 848.69 - (2,767.89) - - (1,676.20) - - - - - (18.36) (2,339.81) (18.36) Deduction (Taka in crore)
  317. Agrani Bank Limited Islami Banking Unit Annexure- M Islami Banking activities was approved in Amin Court Corporate Branch , Gulshan Branch, Maizdi Court Branch, Lal Dighi Par Corporate Branch and Agrabad Jahan Building Corporate Branch of Agrani Bank Limited upon setting up Islami Banking windows with separate entry door and counter under a separate book of accounts. Islamic Banking Windows are operated under Islami Banking Unit where overall Islami Banking different from those of conventional banking. Accounting system is vital for ensuring Shariah compliance in such banking operation. Our Islamic Banking operation follows the accounting principles that refrain from interest. Islami Banking operation run through a separate Islami banking Software. Here are the principles for accounting under its Islamic Banking. 1. Deposits and Profit Sharing Islamic Banks mobilize its deposits through two principles of Shariah to provide interest-free banking facilities a. Al-Wadiah and b. Mudaraba principles. In Al-Wadiah Account, bank receives money with the condition to return the same, with permission to use/invest without paying benefit. In Mudaraba deposits, bank plays the role of entrepreneur (Mudarib) and the depositors as fund provider (Rabb al Maal). Under this principle, profit accrued from investment and financing are shared as per pre-agreed ratio. Islami Banking in Agrani Bank Limited share profit with depositors in accordance with the Guideline for Islami Banking by Bangladesh Bank. Mudaraba depositors are entitled to get minimum 65% of the investment income earned through deployment of Mudaraba Fund as per weight age assigned to each type of Mudaraba deposit. In the year 2017, the Bank paid 65% of Investment Income earned through deployment of Mudaraba Fund. In some Mudaraba Deposits, additional rate was allowed over the rate derived as per weight age. Profit is paid/provided to Mudaraba Deposit accounts at provisional rate on half-yearly/yearly/anniversary basis considering overall projected growth, performance and profitability of the Bank during the year. Final Rates of profit of any accounting year are declared after year end. 2. Investment Operation Investments are recognized at gross amount on the date on which they are originated. After initial recognition investments are stated in the Balance Sheet net off profit receivable and unearned income. However, provision for investments is not net-off with investments. Profit Receivable – the amount of unexpired portion of profit charged on Bai-Murabaha investment at the time of sale of goods/ services to customer/ client. Unearned Income - the amount of unrealized portion of profit/ value addition of fixed assets [property,plant & equipment] under Hire Purchase Under Shirkatul Melk (HPSM) investment for gestation period. For investment purpose two systems are followed: a. Fixed return based investment b. Variable return based investment Fixed return based investment system is applicable for Bai-Muajjal, Bai-Murabaha investment mode. Under this mode, Bank sells thegoods to a client at a fixed profit /mark-up on deferred payment basis. Hire Purchase Under Shirkatul Melk (HPSM) is also a fixed return based investment mode. In this case rate of rent is fixed but amount of rent becomes variable on the basis of diminishing balance method. Variable return based income is applied for our Musaharaka mode of investment. In these cases, only ratio of Income Sharing is stated in the agreement. 3. Income/Revenue Recognition Principle The bank earns income from various sources such as charges, fees, commission and investment. to recognize all sorts of income, Bank follows Shariah principle strictly. Usually charges, fees & commission etc. are recognized on actual basis. Recognition of income from investment follows principles as under: 318 Annual Report 2018
  318. For Bai-Muajjal , Bai-Murabaha Investment While creating each deal, in case of Bai-Muajjal, Bai-Murabaha mode of investment, mark up/profit is added to the bank’s purchase cost with a credit to unearned income A/c. Thereafter time apportionment of profit is recognised out of the unearned income amount at the end of each month on accrual basis. Allowance (rebate) for early repayment, if any, may however be applied at Bank’s discretion. For Hire Purchase Shirkatul Melk (HPSM) Investment In case of HPSM mode of investment Rent is charged and taken into income account at the end of each month on accrual basis. If the account has a provision of gestation period, no income is earned during the period. In this case income starts just after the end of gestation period. However Rent is chargeable in spite of gestation, if the delivery of asset is completed in usable condition such as a machine or a set of machinery or building etc. All accrual income is subject to prevailing classification and provisioning rules of Bangladesh Bank. 4. Cost Recognition Principle Cost in respect of profit paid on deposit is recognized on accrual basis. Monthly accruals in this respect are calculated on the basis of provisional profit rate. Other costs are also recognized on the accrual basis following the matching concept of Accounting. 319
  319. Islamic Banking Unit Balance Sheet As at 31 December 2018 ANNEXURE - M .1 (Amount in Taka) Notes PROPERTY AND ASSETS Cash in hand Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent banks(including foreign currencies) 31 Dec 2018 31 Dec 2017 1 70,659,752 2,456,846 68,202,906 69,520,768 3,436,431 66,084,337 Balance with other banks and financial institutions In Bangladesh Outside Bangladesh 2 44,135,966 44,135,966 - 14,604,548 14,604,548 - Placement with other banks and financial institutions 3 2,485,821,630 5,809,164,201 Investments in Share & Securities Governments Others 4 60,000,000 60,000,000 - 50,000,000 50,000,000 - 1,337,651,627 1,337,651,627 - 1,086,654,721 1,086,654,721 - 7 8 678,926 580,094 3,999,527,995 2,837,329 28,639 7,032,810,206 9 94,212,058 5,397,232,784 10 3,253,616,933 139,049,295 2,989,746,366 98,584,063 23,534,386 2,702,823 1,127,064,440 125,261,635 896,714,117 81,073,461 20,182,731 3,832,496 11 651,699,004 508,512,982 3,999,527,995 7,032,810,206 3,999,527,995 7,032,810,206 General Investments General Investment etc Bills purchased and discounted Fixed assets including premises Other assets Non-banking assets Total assets LIABILITIES AND CAPITAL LIABILITIES Borrowing & Placement from other banks, financial institutions and agents Deposits and other accounts Mudaraba savings deposits Mudaraba term deposits Other Mudaraba deposits Al-wadeeah currents deposits and other deposits accounts Bills payable Other Liabilities Deferred tax liabilities/(Assets) Total liabilities Capital/Shareholders’ equity Paid up capital Statutory reserve Revaluation gain/(loss) on investments Other reserve Surplus in profit and loss account/retained earning Total shareholders equity Total liabilities and shareholders equity 320 Annual Report 2018 5 6
  320. Islamic Banking Unit Off Balance Sheet Items As at 31 December 2018 ANNEXURE - M .2 Amount in Taka Notes Contingent Liabilities Acceptances and endorsements Letters of guarantee Irrevocable letters of credit Back to Back L/C Bills for collection Other Contingent Liabilities Other Commitments Documentary credits and short term trade related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Other Commitments Total off-balance sheet exposures including contingent liabilities 31 Dec 2018 31 Dec 2017 12 12,735,400 15,528,400 12.1 12.2 12.3 12,735,400 - 15,528,400 - 12,735,400 15,528,400 12.4 321
  321. Islamic Banking Unit Profit and Loss Account For the year ended 31 December 2018 ANNEXURE - M .3 (Amount in Taka) Notes 31 Dec 2017 31 Dec 2018 Profit from Investment 13 464,296,915 334,793,364 Profit paid on deposits, borrowing etc 14 (300,003,271) (202,784,342) 164,293,644 132,009,022 - - Net Investment Income Income from investment in shares/securities Commission, exchange and brokerage 15 1,110,803 1,126,427 Other operating income 16 485,082 25,549,659 165,889,529 158,685,108 Total operating income (A) Salaries and allowances 17 35,479,894 33,963,613 Rent, taxes, insurance, electricity, ect. 18 2,107,408 2,044,486 Legal Expenses 19 189,142 131,610 Postage, stamp, telecommunication etc. 20 54,452 54,066 Stationery, printing, advertisements. etc. 21 120,976 125,010 - - 138,000 147,200 - - Chief Executive’s Salary & fees Directors’ fees & expenses (Shariah supervisory committee) Auditors’ fees Charges on investment losses 22 - - Depreciation of Bank’s assets 23 235,055 219,365 - - Zakat expenses Repair & Maintainance to Bank Properties 24 1,104,521 1,141,743 Other expenses 25 1,319,324 25,672,791 40,748,772 63,499,884 125,140,757 95,185,224 - - Specific Provision - - General provision - - Provision for off-balance sheet exposures - - Provision for diminution in value of investments - - Other provisions - - Total Provision (D) - - 125,140,757 95,185,224 Total operating expenses(B) Profit/(loss) before provision (A-B)=( C ) Provision for investments Total profit before taxes (C-D) 322 Annual Report 2018 26
  322. Islamic Banking Unit Notes to the Financial Statements For the year ended 31 December 2018 ANNEXURE - M .4 Amount in Taka Notes 31 Dec 2017 31 Dec 2018 Cash Reserve Requirement (Daily Basis) Minimum Reserve Required @ 5.00 % of total Demand and Time Liabilities Actual Reserve held with Bangladesh Bank Surplus/ (Deficit) 48,829,000 54,926,820 68,203,000 66,084,337 19,374,000 11,157,517 As per MPD Circular No.01 dated 3 April, 2018, daily CRR may kept @ 5.0% on daily basis. But biweekly average amount not below 5.5% of total Time & Demand Liabilities. Cash Reserve Requirement (Bi-Weekly Average) Required Reserve @ 5.5 % of Average Demand and Time Liabilities Actual Reserve held with BB (on average for last bi-weekly of December) Surplus/(Deficit) 53,712,000 59,504,060 68,203,000 66,084,337 14,491,000 6,580,277 53,712,000 50,349,590 76,948,000 60,016,708 23,236,000 9,667,118 2,457,000 3,436,431 14,491,000 6,580,277 - - 60,000,000 50,000,000 76,948,000 60,016,708 Statutory Liquidity Ratio (SLR) Required Reserve @ 5.50 % of total Demand and Time Liabilities Actual Reserve held Surplus/(Deficit) Actual Reserve held Cash in hand Excess of CRR Balance With Sonali Bank (As Agent of BB) Eligible Securities (Bangladesh Government Islami Investment Bond) Total 323
  323. Islamic Banking Unit Notes to the Financial Statements For the year ended 31 December 2018 ANNEXURE - M .5 Amount in Taka 31 Dec 2017 31 Dec 2018 1 Cash in hand i) In local currency 2,456,846 3,436,431 - - Sub-total (a) 2,456,846 3,436,431 Cash with Bangladesh Bank and its agents Balance with Bangladesh Bank 68,202,906 66,084,337 - - ii) In foreign currency Balance with Sonali Bank (as agent of Bangladesh Bank) 2 Sub-total (b) 68,202,906 66,084,337 Grand total (a+b) 70,659,752 69,520,768 44,135,966 14,604,548 - - Balance with other banks and financial institutions In Bangladesh (note-2.1) Outside Bangladesh (note-2.2) 2.1 In Bangladesh AL Wadiah Current Deposit accounts AGRANI BANK LIMITED - - 41,675,099 9,277,307 1,200,648 1,927,028 c) Laldighirpar Corp. Br. Sylhet 230,028 72,116 d) Agrabad (J.B.) Corp. Br. Chattogram 279,558 66,767 e) Maizdee court Br. Noakhali 750,633 3,261,330 44,135,966 14,604,548 a) Amincourt Corp. Br, Dhaka b) Gulshan Corp. Br, Dhaka 2.2 Outside Bangladesh (NOSTRO Accounts) 3 Placement with other banks and financial institutions - Mudaraba term deposit accounts (Including Profit) 1,339,151,879 1,144,390,700 b) Sahjalal Islami Bank Ltd a) Al-Arafah Islami Bank Ltd 844,775,176 1,275,525,251 c) Social Islami Bank Ltd. 104,321,125 1,762,789,000 d) Exim Bank Ltd. 4 1,626,459,250 5,809,164,201 60,000,000 50,000,000 Investment in share & securities Governments ( Note 4.1) Others 4.1 197,573,450 2,485,821,630 60,000,000 50,000,000 60,000,000 50,000,000 Investment in Government securities Bangladesh Government Islami Investment Bond (BGIIB) Other Government Bond & Securities 60,000,000 324 Annual Report 2018 50,000,000
  324. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 5 31 Dec 2017 31 Dec 2018 General Investments a ) In Bangladesh Murabaha Industrial 73,303,276 71,482,066 Murabaha (TR) Industrial 18,943,643 3,749,890 Murabaha (Gen./Comm.) 334 2,334 153,626,308 121,874,578 14,396,405 35,759,934 Bai Muajjal Industrial 751,517,140 622,305,992 Hire Purchase Industrial 222,942,994 135,720,930 Hire Purchase (Real Estate) 79,751,959 66,013,470 HPSM DDIS (Gen.) 14,640,968 23,131,977 8,528,600 6,613,550 - - 1,337,651,627 1,086,654,721 - - - - - - - - 1,337,651,627 1,086,654,721 317,335,921 224,866,377 1,011,787,106 855,174,794 8,528,600 6,613,550 1,337,651,627 1,086,654,721 Bai Muajjal (Gen./Comm.) Bai Muajjal DDIS (Gen.) Quard Against MTDR b) Outside Bangladesh c) Bill Purchased and discounted Payable Inside Bangladesh Inland bills purchased Payable Outside Bangladesh Foreign bills purchased and discounted 5.1 Investments under the following broad categories HPSM Investments Bai-Murabaha / Bai-Muajjal Quard against MTDR Bills purchased and discounted (note-6) 5.2 - - 1,337,651,627 1,086,654,721 Lease rental receivable within 1 year - - Lease rental receivable within 5 years - - Izara Lease rental receivable after 5 years - - Total lease / Izara rental receivable - - Less: Unearned interest receivable - - Net lease / Izara finance - - 325
  325. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 5 .3 31 Dec 2017 31 Dec 2018 Investments on the basis of significant concentration including bills purchased and discounted a) Investments to Directors of the Bank - - b) Investments to Chief Executive and other executives & officers - - 165,512,383 153,284,306 79,751,959 1,069,217,718 66,013,470 837,611,418 14,640,968 8,528,600 1,337,651,628 23,131,977 6,613,550 1,086,654,721 3,696,227 849,472,942 119,411,192 6,187,650 628,581,757 2,624,678 120,347,491 10,561,105 90,449,707 - 44,424,485 31,071,903 - 1,069,217,718 837,611,419 8,528,600 6,613,550 14,640,968 19,773,574 23,169,568 26,387,124 c) Investments to customer groups: i) Commercial investment ii) Export financing iii) House building investment iv) Retail investment v) Small and medium enterprises vi) Special program investment vii) Staff investment viii) Industrial investments (Note 5.3 d) ix) Consumer investment x) Other investment (Quard Against MTDR) d) Details of Industrial investments i) Agricultural industries ii) Textile industries iii) Food and allied industries iv) Pharmaceutical industries v) Leather, chemical, cosmetics, etc. vi) Steel, Engineering etc. vii) Cement and ceramic industries viii) Service Industries ix) Transport and communication industries x) Other industries including bills purchase and discounted 5.4 Particulars of investments i) Investments considered good in respect of which the Bank is fully secured ii) Investments considered good against which the Bank holds no security other than the debtors’ personal guarantee iii) Investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors iv) Investments adversely classified; provision not maintained there against v) Investments due by directors or officers of the banking company 326 Annual Report 2018
  326. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes or any of them either separately or jointly with any other persons vi ) Investments due from companies or firms in which the directors of the Bank have interest as directors, partners or managing agents or in case of private companies, as members 31 Dec 2017 31 Dec 2018 - - - - - - - - 116,078,772 27,953,710 69,847,166 23,362,460 - - - - 1,164,002,313 57,570,543 1,221,572,856 1,004,428,608 12,378,947 1,016,807,555 44,379,286 18,618,029 53,081,457 116,078,772 1,337,651,628 25,116,826 5,930,003 38,800,337 69,847,166 1,086,654,721 11,640,023 1,208,981 12,849,005 5,206,894 38,375 5,245,269 vii) Maximum total amount of investments, including temporary investment made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person. viii) Maximum total amount of investments, including temporary investments granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in the case of private companies, as members ix) Due from banking companies x) Classified investments a) Classified investments on which profit has not been charged (note-5.8) b) Provision on classified investments (note-5.6) c) Provision kept against investments classified as bad debts xi) Cumulative amount of written off investments a) Opening Balance b) Amount written off during the year c) Amount realised against investments previously written off d) The amount of written off investments for which law suits have been filed 5.5 Classification of investments Unclassified Standard including staff investment Special mention account (SMA) Classified Sub-standard Doubtful Bad / Loss 5.6 Particulars of required provision for investments Status Base for Provision General Provision Investments (Excluding SMA) 1,164,002,313 Special mention account (SMA) 57,570,543 Rate (%) *Various 327
  327. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 31 Dec 2017 31 Dec 2018 Specific provision Sub-standard 44 ,379,286 20% 1,242,931 4,018,692 Doubtful 18,618,029 50% 2,290,018 2,846,401 Bad / Loss 53,081,457 100% Required provision for investments 11,571,758 11,252,098 15,104,706 18,117,191 27,953,710 23,362,460 Rate 1% Rate 1% Note: Provision maintained by Head Office. 5.7 Particulars of required provision for Off-balance Sheet Exposures Base for Provision Acceptances and endorsements less margin Letter of guarantee less margin 12.2 9,944,050.00 Letter of credit less margin 12.3 - Required provision on Off-balance Sheet Exposures Note: Provision maintained by Head Office 6 7 Bills purchased and discounted Payable in Bangladesh Payable outside Bangladesh Fixed assets including premises, furniture and fixtures Property, Plant & Equipment Land Building Furniture and fixtures Motor Vehicles Office Equipments Computer Electric Materials Library books ATM Hardware & equipment Furniture & fixture Interior decoration Less: Accumulated depreciation Furniture and fixtures Office Equipments Electric Materials Computer 328 Annual Report 2018 99,441 95,816 - - 99,441 95,816 - - 1,344,888 387,703 424,495 784,493 2,941,579 1,321,488 387,703 343,645 784,493 2,837,329 - - 903,833 297,823 731,043 329,954 2,262,653 775,231 275,523 667,257 305,221 2,023,232
  328. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes Intangibles assets Software-core banking Software-ATM Cost of intangibles assets Less : Accumulated amortization Net book value at the end of the year 8 9 10 10.1 10.1 Other assets Stationery and stamps Profit receivable Advance income tax Advance deposits and advance rent Branch adjustments account Migration account Suspense account Islami Banking General Account Sundry assets Borrowing From other Banks, Placements From Other Banks Borrowing From Bangladesh Bank (BGIIB) Borrowing From Other Bank Deposits and other accounts Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b) a) Deposits from Banks Mudaraba savings deposits Mudaraba Short Notice term deposits Mudaraba term deposits Other Mudaraba deposits Al-wadeeah currents deposits and other deposits accounts Bills payable b) Customer Deposits i) Al wadeeah current deposits and other accounts Al-wadeeah current deposits Foreign currency deposits Security deposits Sundry deposits (Margin on LG) 31 Dec 2017 31 Dec 2018 678,926 814,097 29,504 2,000 548,590 580,094 26,639 2,000 28,639 - 5,200,000,000 94,212,058 94,212,058 197,232,784 5,397,232,784 2,223,127,164 1,030,489,769 3,253,616,933 240,220,642 886,843,798 1,127,064,440 223,127,164 240,220,642 2,000,000,000 - - 2,223,127,164 240,220,642 20,725,036 18,000 2,791,350 23,534,386 14,217,881 18,000 5,946,850 20,182,731 329
  329. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes ii ) Bills payable Pay orders issued Pay slips issued Demand draft payable Foreign demand draft T. T. payable iii) Mudaraba savings deposits iv) Mudaraba term deposits Mudaraba Term deposits (MTDR) Mudaraba special notice Term deposits Mudaraba Term deposits (Monthly profit) Mudaraba Deposit Schemes Non resident Taka deposits 10.1 c) Deposits and other accounts Current deposits and other accounts Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.i) Bills payable Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.ii) Savings bank / mudaraba savings deposits Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.iii) Term / Fixed deposits Deposits from banks (note -10.1.a) Deposits from customers (note-10.1.b.iv) 11 330 Other liabilities Profit (Interest) suspense & Compensation account (Note 11.1) Provision for Expenses (Note 11.2) Sundry Creditors Unearned profit on Investment & Enhance profit fund VAT, AIT & Excise Duty Payable Payable to Benevolent & Other Fund Islami Banking General Account Annual Report 2018 31 Dec 2018 31 Dec 2017 2,702,823 2,702,823 139,049,295 3,832,496 3,832,496 125,261,635 736,205,107 13,437,045 16,977,050 98,584,063 612,512,934 11,665,019 32,315,522 81,073,461 865,203,265 1,030,489,769 737,566,936 886,843,798 23,534,386 23,534,386 20,182,731 20,182,731 2,702,823 2,702,823 3,832,496 3,832,496 139,049,295 139,049,295 125,261,635 125,261,635 2,000,000,000 865,203,265 2,865,203,265 612,512,934 612,512,934 11,204,752 24,714,814 26,563,725 54,651,382 12,426,055 58,752 522,079,524 651,699,004 5,567,133 59,287,262 46,662,955 43,957 396,951,675 508,512,982
  330. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 11 .1 11.2 Profit (Interest) suspense & Compensation account Compensation Receivable Profit Suspense Provision for Expenses Provision for MTDR Provision for Deposit Schemes Provision for Monthly Income Deposit Undisburse Salary & Other Allowances 12 Contingent liabilities 12.1 Letters of guarantee Letters of guarantee (Local) Letters of guarantee (Foreign) Foreign counter guarantees Less: Margin 12.2 Irrevocable Letters of Credit Letters of credit Back to back L/C Bank’s liabilities PAD Less: Margin 12.3 Bills for collection Outward bills for collection Inward local bills for collection Inward foreign bills for collection Less: Margin 13 Investment income i) Income from general investment Bai-Murabaha Bai-Muajjal Hire purchase Under Sherkatul Melk Quard against MTDR Bai-Salam Staff loan Foreign bills purchased Sub-Total (i) 31 Dec 2017 31 Dec 2018 3,765,221 7,439,531 11,204,752 3,941,221 1,625,912 5,567,133 21,129,659 3,422,542 150,498 40,320,013 16,944,017 2,011,116 12,115 12,115 24,714,814 12,735,400 59,287,261 15,528,400 12,735,400 12,735,400 2,791,350 9,944,050 15,528,400 15,528,400 5,946,850 9,581,550 - - - - 8,657,847 62,216,008 28,327,247 99,201,102 6,349,915 56,773,914 23,020,367 86,144,196 331
  331. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 31 Dec 2017 31 Dec 2018 ii ) Profit on deposits with other Islamic banks In Bangladesh 365,095,813 248,649,168 - - Sub-Total (ii) 365,095,813 248,649,168 Grand Total (i+ii) 464,296,915 334,793,364 4,941,445 3,839,375 Outside Bangladesh 14 Profit paid on deposits a) Profit paid on deposits: Mudaraba savings deposits Mudaraba special notice deposits Mudaraba term deposits Mudaraba deposit schemes Foreign currency deposits Others 13,409,077 5,787,291 130,961,631 37,483,646 5,516,403 4,788,267 - - 82,421 75,542 154,910,977 51,974,121 141,194,519 149,221,918 3,897,775 1,588,303 - - 145,092,294 150,810,221 300,003,271 202,784,342 b) Interest / Profit paid for borrowings: Bangladesh Bank Other Bank 15 Commission, exchange and brokerage Commission on Bills for Collection - 200 Commission on DD/TT 10,210 28,250 Commission on PO 20,179 Commission on Guarantee Commission on L/C-Fcy 844,670 819,664 - - Miscellaneous Commission 29,378 37,323 194,600 226,530 - 7,960 Discrepancy Charge Exchange gain (note - 15.1)- including gain from FC dealings Settlement fees / Brokerage 7,766 - - 1,110,803 1,126,427 7,766 - Exchange gain Exchange gain Less: Exchang loss 332 6,500 Commission on Export Bills Processing Fees 15.1 4,000 Annual Report 2018 - - 7,766 -
  332. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 16 Other operating income Income from Courier , Postage, Stamp etc. Telegram Recoveries/Telex, Fax etc Service & Incidental Charge Service Charge Other Credit Application Fees Processing Fees Income from Tele,Telex & Fax SWIFT etc. A/C closing charge Cheque Book Charge Solvency Cert./Proceed Real. Cert. Account Maintanance & others IBG income 17 Salaries and allowances Basic pay House Rent Allowances Other Allowances Bonus Fringe Benefit Bank’s contribution to Pension fund Bank’s contribution to provident fund Gratuity Expense Miscellaneous: Contractual Service- Security Guard 18 Rent, taxes, insurance, electricity, etc. Rent, rate and taxes Lease rent Insurance Power and electricity 19 Legal expenses Legal expenses Other professional charges 20 Postage, stamp, telecommunication, etc. Postage Telegram, telex, fax and e-mail Data communication 21 Stationery, printing and advertisements, etc. Office and security stationery Computer consumable stationery Stationaries- Table/Desk & Others 22 Charges on loan losses Loan -written off Interest waived 31 Dec 2017 31 Dec 2018 1,198 2,300 1,451 480,133 485,082 1,450 4,800 500 466,731 25,076,178 25,549,659 15,062,445 7,378,992 1,748,985 2,585,825 330,870 5,851,758 583,012 1,272,507 665,500 35,479,894 14,614,360 7,238,380 1,979,277 2,872,924 5,065,584 426,167 1,084,921 682,000 33,963,613 2,107,408 2,107,408 2,044,486 2,044,486 13,500 175,642 189,142 131,610 131,610 13,645 40,807 54,452 22,688 31,378 54,066 7,026 39,924 74,026 120,976 4,585 47,116 73,309 125,010 - 333
  333. Islamic Banking Unit Notes to the Financial Statements Amount in Taka Notes 23 Depreciation and repair of Bank ’s assets Depreciation Fixed assets (Note 23.1) Leased assets 23.1 24 25 26 Depriciatioin on Fixed Assets Depriciation on Furniture And Fixture Depriciation on Office Appliance/ Equipment Depriciation on Computer Depriciation on Electric material Repairs & Maintanance Building- Office Premises Furniture and fixtures Computer Office equipment Executives vehicles Electric Materials Other expenses Upkeep of Bank Premises Entertainment Books, magazines and newspapers, etc. Medical expenses Bank charges and commission paid Loss on sale of assets Finance charge for lease assets Oil & Lubricants for Vehicles Traveling expenses Local conveyance, labor, etc. Business development Telephone Remittance charges Laundry, cleaning and photographs, etc. Inter Branch ABBL General Account Profit Expenses and others Islami Banking Unit Expense Closing expenditure Provision for investments & off -balance sheet exposure Provision for bad and doubtful investments Provision for unclassified investments Provision for off-balance sheet exposure Provision for other assets 334 Annual Report 2018 31 Dec 2017 31 Dec 2018 1,339,576 1,361,108 235,055 235,055 219,365 219,365 125,180 22,245 79,128 8,502 235,055 129,452 15,458 15,291 59,164 219,365 4,640 41,133 69,413 960,000 29,335 1,104,521 52,965 79,635 12,208 972,000 24,935 1,141,743 79,872 106,968 38,405 654,000 191,843 36,241 48,968 87,375 3,600 18,052 74,822 111,244 39,540 73,668 84,405 69,152 83,182 3,600 25,076,178 54,000 1,319,324 57,000 25,672,791 - - - -
  334. Agrani Bank Limited Off-shore Banking Unit (OBU) Annexure- N 1.1 Status of the unit: Off-shore banking Unit (‘the Unit’) is a separate business unit of Agrani Bank Limited, (“the Bank”) governed under the Rules and Guidelines of Bangladesh Bank. The Bank obtained the Off-shore banking unit (OBU) permission vide letter No. BL/DA/5175/87 dated 07 March 1987. The bank commenced the operation of its Off-shore Banking Unit from 23 January 2014 and its office is located at EPZ Corporate Branch, Bay-Shopping Centre, Chattogram EPZ, Chattogram. 1.2 Principal activities: The principal activities of the units are to provide all kinds of OBU related commercial banking services to its customers through its Off-shore Banking Units in Bangladesh. 2. Significant accounting policies and basis of preparations 2.1 Basis of preparation: The financial statements are prepared on the basis of going concern and represent the financial performance and financial position of the Off-shore Banking Unit (OBU). The financial statements of the OBU are prepared in accordance with the Bank Companies Act 1991, in particular, banking regulation and Policy Department (BRPD) Circular No. 14 Dated 25 June 2003, other Bangladesh Bank Circulars, Bangladesh Financial Reporting Standards (BFRSs) and other rules and regulations where necessary. 2.2 Foreign Currency: Items included in the financial statements of the Unit are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Financial statements of the Unit are presented in US Dollar (USD) and Taka where USD is the functional currency and Taka is the Unit’s presentation currency. 2.3 Loans and advances: a) Loans and advances are stated in the balance sheet on gross basis. b) Interest is calculated on daily product basis, but charged and accounted for quarterly basis. Interest on classified loans and advances / investments is kept in interest suspense account as per BRPD circular no. 16 of 1998, 9 of 2001 and 10 of 2005 and recognized as income on realization. Interest is not charged on bad and loss loans and advances / investments as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts. c) Provision has been made as per BRPD circular no. 16 dated 18 November 2014, BRPD circular 14 dated 23 September 2012, BRPD Circular no. 19 dated 27 December 2012, BRPD Circular no. 16 dated 18 November 2014 and BRPD Circular no. 05 dated 29 May 2013. 2.4 Reporting period: These financial statements cover from January 01, 2018 to December 31, 2018. 2.5 Fixed assets and depreciation: a) Fixed assets are stated at cost of acquisition/valuation. b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets. Category of Fixed assets Rate Furniture and fixtures 10% Office equipment 20% 2.6 General: Assets and liabilities have been translated into Taka currency @ USD 1= BDT 83.95 (2017: BDT 82.70). Income and expenses are translated at an average rate @ USD 1 = BDT 83.95 (2017: BDT 82.70). Assets and liabilities and Income and expenses of Conventional Banking have been translated into Taka currency @ USD 1 = BDT 83.95. 335
  335. Off-shore Banking Unit Balance sheet As at 31 December 2018 ANNEXURE - N .1 Notes PROPERTY AND ASSETS Cash in hand Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent Banks (including foreign currencies) 2018 USD 2017 Taka USD Taka 1 - - - - Balance with other banks and financial institutions In Bangladesh Outside Bangladesh 2 - - - - Investments Governments Others 3 333,116 27,965,111 338,151 27,965,111 333,116 27,965,111 338,151 27,965,111 110,140,308 101,562,486 8,577,822 9,246,278,915 8,526,170,722 720,108,193 32,703,154 32,703,154 - 2,704,550,848 2,704,550,848 - 3,584 300,915 1,811 149,750 - - - - 110,477,008 9,274,544,941 33,043,116 2,732,665,709 110,477,008 110,477,008 9,274,544,941 9,274,544,941 33,043,116 33,043,116 2,732,665,709 2,732,665,709 110,477,008 9,274,544,941 33,043,116 2,732,665,709 - - - - Loans & Advances Loans, cash credit & overdraft etc. Bills purchased and discounted 4 4.1 4.2 Fixed assets including premises Other assets Non-banking assets 5 Total assets LIABILITIES AND CAPITAL LIABILITIES Borrowing Deposits and other accounts Other Liabilities total liabilities Capital/Shareholders’ equity Paid up capital Foreign currency translation difference Surplus in profit and loss account/retained earning Total shareholders’ equity Total liabilities and shareholders’ equity OFF-BALANCE SHEET EXPOSURES Contingent Liabilities Acceptances and endorsements Letters of guarantee Irrevocable letters of credit Bills for collection Other Contingent Liabilities Total off-balance sheet items including contingent liabilities 336 Annual Report 2018 6
  336. Off-shore Banking Unit Profit and Loss Account For the year ended 31 December 2018 ANNEXURE - N .2 Notes 2018 USD 2017 Taka USD Taka Operating Income Interest income 7 2,783,801 233,700,043 757,171 62,618,020 Interest paid on deposits and borrowing 8 (2,935,351) (246,422,707) (88,827) (7,345,973) (151,550) (12,722,664) 668,344 55,272,047 Net interest income Commission, exchange and brokerage 9 1,233,876 103,583,880 362,090 29,944,806 Other operating income 10 133,007 11,165,932 28,003 2,315,827 1,215,333 102,027,148 1,058,437 87,532,680 total operating income (A) Operating expenses Salaries and allowances 11 61,060 5,126,001 38,335 3,170,322 Postage, stamp, telecommunication etc. 12 268 22,500 251 20,780 Stationery, printing, advertisements. etc. 13 512 43,000 480 39,655 - - - - 641 53,780 312 25,835 62,481 5,245,281 39,378 3,256,592 1,152,852 96,781,867 1,019,059 84,276,088 Specific Provision - - - - General provision - - - - Provision for off-balance sheet exposures - - - - Provision for diminution in value of investments - - - - Other provisions - - - - Total Provision (D) - - - - 1,152,852 96,781,867 1,019,059 84,276,088 - - - - 1,152,852 96,781,867 1,019,059 84,276,088 - - - - 1,152,852 96,781,867 1,019,059 84,276,088 Auditors’ fees Depreciation of Bank’s assets total operating expenses(B) Profit/(loss) before provision (A-B)=( C ) Total profit before taxes (C-D) Provision for income tax Net profit/(loss) after Tax Balance of profit brought forward from previous year Surplus in profit and loss account carried forward 14 337
  337. Off-shore Banking Unit Notes to the Financial Statements For the year ended 31 December 2018 ANNEXURE - N .3 2018 Notes 3 USD 338,151 27,965,111 Invest in Agrani Remittance House, Canada Inc. 333,116 27,965,111 338,151 27,965,111 - - - - 110,140,308 9,246,278,915 32,703,154 2,704,550,848 101,562,486 8,526,170,722 32,703,154 2,704,550,848 8,577,822 720,108,193 - - 101,562,486 8,526,170,722 32,703,154 2,704,550,848 101,562,486 8,526,170,722 32,703,154 2,704,550,848 - - Loans & Advances Loans, cash credit & overdraft etc. Loans, cash credit & overdraft etc. Others 5 Bills purchased and discounted Fixed assets including premises Furniture & Fixture Computer Office Equipment 6 Borrowing 720,108,193 - - 8,577,822 720,108,193 - - - - - - 3,584 300,915 1,811 149,750 763 64,035 498 41,150 2,822 236,880 1,313 108,600 - - - - 9,274,544,941 33,043,116 2,732,665,709 81,491,482 6,841,209,953 12,834,121 1,061,381,800 Foreign Bank (SCB, Singapore) 28,981,942 2,433,034,073 20,207,185 1,671,134,159 3,584 300,915 1,811 149,750 2,783,801 233,700,043 757,171 62,618,020 1,859,117 156,072,831 757,171 62,618,020 924,684 77,627,212 - - 2,935,351 246,422,707 88,827 7,345,973 924,684 77,627,212 88,827 7,345,973 Interest paid for borrowings from own bank 1,148,167 96,388,620 - - Up Front Arrangement Fee & other espenses 862,500 72,406,875 - - Interest income Others Interest paid on deposits and borrowing Interest paid for borrowings from Foreign Bank 338 8,577,822 110,477,008 Interest on Loans, cash credit & overdraft etc. 8 - Own institution/Mother Bank Own institution (for Furniture & Fixture) 7 Taka 27,965,111 Bills purchased and discounted (Note-4.2) 4.2 USD 333,116 Loans, cash credit & overdraft etc. (Note-4.1) 4.1 Taka Investments Others 4 2017 Annual Report 2018
  338. Off-shore Banking Unit Notes to the Financial Statements For the year ended 31 December 2018 2018 Notes 9 USD Commission , Exchange and brokerage Exchange earnings Others 10 Other operating income Loan Processing Fee SWIFT Charge 11 13 USD Taka 1,233,876 103,583,880 362,090 29,944,806 1,233,876 103,583,880 362,090 29,944,806 - - - - 133,007 11,165,932 28,003 2,315,827 47,226 3,964,590 27,807 2,299,627 1,253 105,219 196 16,200 84,528 7,096,123 - - Salaries and allowances 61,060 5,126,001 38,335 3,170,322 Basic pay 26,808 2,250,563 18,312 1,514,440 House allowance 12,610 1,058,609 8,596 710,878 Medical allowance 1,072 90,000 816 67,500 71 6,000 - - Bonus 9,424 791,157 3,501 289,564 Bank’s contribution to provident fund 2,681 225,056 1,831 151,444 Gratuity expense 5,534 464,616 3,682 304,496 Lunch subsidy 2,859 240,000 1,596 132,000 Postage, stamp, telecommunication etc. 268 22,500 251 20,780 Postages 149 12,500 227 18,780 Telephone Charges 60 5,000 24 2,000 Others 60 5,000 - - 512 43,000 480 39,655 Security Stationery 6 500 6 500 Printing Stationary 292 24,500 242 20,000 Paper & Table Stationary 167 14,000 48 4,000 232 19,155 641 53,780 312 25,835 43 3,602 50 4,115 33 2,802 263 21,720 564 47,376 - - Stationery, printing, advertisements. etc. Other 14 Taka Service Charge on Others Education allowance 12 2017 Depreciation of Bank’s assets Furniture & Fixture Computer Office Equipment 339
  339. Agrani Equity & Investment Limited Auditors’ Report & Audited Financial Statement 340 Annual Report 2018
  340. Auditor ’s Report to the Shareholders of Agrani Equity & Investment Limited Opinion We have audited the financial statements of Agrani Equity & Investment Limited (the Subsidiary Company of Agrani Bank Limited), which comprise the statement of financial position as at 31 December 2018 and the related statement of comprehensive income, statement of changes in equity and cash flow statements for the year then ended, and notes to the financial positions, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Bangladesh and we have fulfilled our other ethical responsibilities in accordance with The International Ethics Standards Board for Accountants (IESBA Code) & the Institute of Chartered Accountants of Bangladesh (ICAB) Bye-Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls Management is responsible for maintenance of the required books of accounts & records, preparation and fair presentation of the financial statements in accordance with IFRSs and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and also for disclosure of matters that may affect any fact of the financial statements. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Charged with Governance are responsible for overseeing the Company’s financial reporting process. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we 341
  341. Auditor ’s Reportto the Shareholders of Agrani Equity & Investment Limited • are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Report on other Legal and Regulatory Requirements In accordance with the Companies Act 1994, we also report the following: 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 accounts as required by law have been kept by the Company so far as it appeared from our examination of those books; iii) The Statement of Financial Position and the Statement of Profit or Loss and Other Comprehensive Income dealt with by the report are in agreement with the books of account. Syful Shamsul Alam & Co. Chartered Accounts Dhaka Dated- 30 April, 2019 342 Annual Report 2018 Aziz Halim Khair Choudhury Chartered Accounts
  342. Agrani Equity & Investment Limited Statement of Financial Position As at 31 December 2018 Amount in Taka 31 Dec 2017 31 Dec 2018 ASSETS Non-Current Assets: Property, Plant and Equipments Intangible Assets total non-current asset 2,515,126 3 2,515,129 3,039,955 3 3,039,958 8,606,633,275 441,653,252 21,771,166 35,898,458 68,509,916 6,000 315,050 2,299,603 9,177,086,720 9,179,601,849 6,778,821,411 581,724,147 36,637,830 50,839,352 18,409,090 1,661,400 400,000 5,129,177 7,473,622,405 7,476,662,364 Shareholders’ Equity: Share Capital Retained Earnings total Shareholder’s Equity 4,000,000,000 (521,561,108) 3,478,438,892 4,000,000,000 (550,832,881) 3,449,167,119 Current Liabilities: Accounts Payable Advance and Security Deposits Bank Overdraft Other Liabilities Total Current Liabilities Total Equity & Liabilities 9,428,209 5,487,819 3,979,991,056 1,706,255,874 5,701,162,958 9,179,601,849 7,518,839 8,198,118 2,220,661,586 1,791,116,702 4,027,495,246 7,476,662,364 Current Assets: Investment in Shares & Securities Margin Loan Accounts Receivable Advance Income Tax Dividend Receivable Advance, Deposit & Prepayment Other Current Assets Cash and Cash Equivalents Total Current Assets Total Assets EQUITY AND LIABILITIES Ahmed Yousuf Abbas CEO Syful Shamsul Alam & Co. Chartered Accounts (Mohammad Shams-Ul Islam) Managing Director & CEO (Dr. Zaid Bakht) Chairman Aziz Halim Khair Choudhury Chartered Accounts Dhaka Dated- 30 April, 2019 343
  343. Agrani Equity & Investment Limited Statement of Comprehensive Income For the year ended 31 December 2018 Amount in Taka 31 Dec 2017 31 Dec 2018 Income Fees & Commissions Capital Gain on Investment in Share Income From Margin Loan Dividend Income Other Operational Income Total Income 6,315,372 4,853,987 125,785,033 382,760,345 3,690,809 3,360,320 142,301,428 132,090,342 332,446 497,842 278,425,087 523,562,835 21,090,274 22,629,005 680,908 971,407 Expenditure Administrative Expenses Operating Expense Financial Expenses 176,122,460 146,867,434 Total Expenditure 197,893,642 170,467,846 Provision for Margin Loan - - Provision for Unrealized Loss on Security - 100,000,000 10,000,000 - Total Provision 10,000,000 100,000,000 Net Profit/(Loss) Before Tax 70,531,445 253,094,989 41,038,789 66,243,440 29,492,656 186,851,549 0.74 4.67 Provision for investment in placement share Provision For Tax Net Profit After Tax Earnings Per Share (EPS) Ahmed Yousuf Abbas CEO Syful Shamsul Alam & Co. Chartered Accounts Dhaka Dated- 30 April, 2019 344 Annual Report 2018 (Mohammad Shams-Ul Islam) Managing Director & CEO (Dr. Zaid Bakht) Chairman Aziz Halim Khair Choudhury Chartered Accounts
  344. Agrani Equity & Investment Limited Statement of Cash Flows For the year ended 31 December 2018 Amount in Taka 31 Dec 2017 31 Dec 2018 A. B. C. D. E. F. Cash flow from operating activities Received from fees & commission Profit received on margin loan Received as Capital Gain Dividend income Other income received Administrative expenses Payment for CDBL expenses Bidding Fee for Book Building Method Interest paid on bank overdraft Advance Income Tax Paid Income tax paid Sale of placement share Receipt from sale of investment in shares Payment made for investment in shares Investment in margin loan Capital Gain on Investment in Share Advance against Book Building Method Suspense Account (other) Net receipt of security deposit Subscription fee for IPO application Net cash provided by/(used in) Operating activities 6,315,372 3,690,809 92,200,602 332,446 (24,276,061) (575,408) (15,000) (176,122,460) (35,214,310) (18,051,776) 1,611,202,618 (3,422,238,449) 75,188,212 125,785,033 (115,050) (33,000) (1,761,926,423) 4,853,987 3,360,320 128,481,054 497,842 (21,721,813) (891,007) (10,000) (146,867,434) (49,987,753) (9,230,941) 20,000,000 3,654,805,384 (3,008,434,164) 1,247,247 (1,255,400) (199,930) 1,775,540 576,422,932 (232,620) (232,620) (102,528) (102,528) 2,752,598,940 (993,269,470) 1,759,329,469 (573,873,269) (573,873,269) (2,829,573) 5,129,177 2,299,603 2,447,135 2,682,043 5,129,177 Cash flow from investing activities Property plant and equipment Net cash provided by/(used in) Investing activities Cash flow from financing activities Bank Overdraft Bank Overdraft repayment Net cash provided by/(used in) Financing activities Net cash Inflow/(Outflow) [A+B+C] Opening cash and cash equivalents Closing cash and cash equivalents[D+E] Ahmed Yousuf Abbas CEO (Mohammad Shams-Ul Islam) Managing Director & CEO (Dr. Zaid Bakht) Chairman Dhaka Dated- 30 April, 2019 345
  345. Agrani Equity & Investment Limited Statement of Changes in Equity For the year ended 31 December 2018 Amount in Taka Share Capital Balance as at 01 January 2018 Retained Earnings total Equity 4,000,000,000 (550,832,881) 3,449,167,119 Prior year Adjustment - (1,160,678) (1,160,678) Prior year Adjustment (Deffered Tax) - 939,794 939,794 Net Profit/(Loss) during the year 2018 - 29,492,656 29,492,656 4,000,000,000 (521,561,108) 3,478,438,892 4,000,000,000 (737,684,430) 3,262,315,570 Prior year Adjustment - - - Net Profit/(Loss) during the year 2017 - 186,851,549 186,851,549 4,000,000,000 (550,832,881) 3,449,167,119 Balance as at 31 December 2018 Balance as at 01 January 2017 Balance as at 31 December 2017 Ahmed Yousuf Abbas CEO Dhaka Dated- 30 April, 2019 346 Annual Report 2018 (Mohammad Shams-Ul Islam) Managing Director & CEO (Dr. Zaid Bakht) Chairman
  346. 347 Dhaka Dated- 30 April , 2019 8,777,875,551 28,054,886 Total Liabilities Net Liquidity Gap 22,567,067 Provision and other Liabilities - 8,805,930,438 - 57,790,674 - 159,206,885 8,586,633,275 - 5,487,819 Ahmed Yousuf Abbas CEO 2,299,603 Upto 1 month Deposits and other Accounts Borrowing from Banks Liabilities: Total Assets Non-Banking Assets Other Assets Fixed Assets Including Land, Furniture and Fixtures Loans and Advances Investments Money at Call and Short Notice Balance with other Banks and Financial Institutions Cash in Hand Assets: Particular As at 31 December 2018 Agrani Equity & Investment Limited Statement of Liquidity - - - - - - - - - - - - - - - (4,021,029,844) 4,021,029,844 41,038,789 - 3,979,991,056 3-12 months (Mohammad Shams-Ul Islam) Managing Director & CEO 68,509,916 - - - - 68,509,916 - 68,509,916 1-3 months - - - 302,278,454 167,913 167,913 - - 302,446,367 - - - 282,446,367 20,000,000 1-5 years Chairman (Dr. Zaid Bakht) (1,639,195,184) 1,641,910,313 1,641,910,313 - - 2,715,129 - 200,000 2,515,129 - - - - - - 3,488,438,892 5,691,162,957 1,705,684,082 5,487,819 3,979,991,056 9,179,601,849 - 126,500,590 2,515,129 441,653,252 8,606,633,275 - 2,299,603 More than 5 yearsAmount in Taka total
  347. Agrani SME Financing Company Limited Auditor ’s Report & Audited Financial Statement 348 Annual Report 2018 348
  348. Independent Auditor ’s Report to the Shareholders of Agrani SME Financing Company Limited Opinion We have audited the financial statements of Agrani SME Financing Company Limited (the “Company”), which comprise the balance Sheet as at December 31, 2018 and the profit and loss account, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our views, the accompanying financial statements give a true and fair view, in all material respects, of the financial position of the Company as at December 31, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note 2.01, 2.02 and 2.03. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter We draw attention to the note 8.2 of the financial statements where management disclosed the reason for making 100% provision against receivable from Agrani Bank Limited of Taka 7,322,127 as instructed by the Bangladesh Bank in 2015 and subsequent recommendation made on April 03, 2019 by the four members committee formed by the Audit committee of the company to write-off the above mentioned receivables from balance sheet. The decision will be placed to the Board through Audit Committee of the Company for approval. We also draw attention to the note 8.8 of the financial statements where management disclosed the reason for not adjusting payable to Agrani Bank of Taka 55,672,663 since long. Subsequently, a recommendation has been made on April 03, 2019 by the four members committee formed by the Audit committee of the company to issue Right Shares for adjustment of Payable to Agrani Bank Limited amounting to Taka 55,672,663. The decision will be placed to the Board through Audit Committee of the Company for approval. Our opinion is not modified in respect of the matters emphasized Other Matter The financial statements of Agrani SME Financing Company Ltd., for the year ended 31 December 2017 were audited by Hussain Farhad & Co., who expressed unmodified opinion on March 27, 2018. Other Information Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls 349
  349. Independent Auditor ’s Report to the Shareholders of Agrani SME Financing Company Limited Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with IFRSs as explained in note 2.01, 2.02 & 2.03, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 350 Annual Report 2018
  350. Independent Auditor ’s Reportto the Shareholders of Agrani SME Financing Company Limited We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the Financial Institutions Act, 1993 and the rules and regulations issued by Bangladesh Bank, we also report that: (i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (ii) in our opinion, proper books of accounts as required by law have been kept by the Company so far as it appeared from our examination of those books; (iii) the balance sheet and profit and loss account together with the annexed notes dealt with by the report are in agreement with the books of account and returns; (iv) the expenditures incurred were for the purpose of the Company’s business for the year; (v) the financial statements of the Company have been drawn up in conformity with the Financial Institutions Act, 1993 and in accordance with the accounting rules and regulations which were issued by Bangladesh Bank to the extent applicable to the Company; (vi) adequate provisions have been made for loans, advances, leases, investment and other assets which are, in our opinion, doubtful of recovery and Bangladesh Bank’s instructions in this regard have been followed properly; (vii) the financial statements of the Company conform to the prescribed standards set in the accounting regulations which were issued by Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh; (viii) the records and statements which were submitted by the branches have been properly maintained and recorded in the financial statements; (ix) statements sent to Bangladesh Bank have been checked on sample basis and no inaccuracy has come to our attention; (x) taxes and other duties were collected and deposited in the Government treasury by the Company as per Government instructions found satisfactory based on test checking; (xi) nothing has come to our attention that the Company has adopted any unethical means i.e. ‘window dressing’ to inflate the profit and mismatch between the maturity of assets and liabilities; (xii) proper measures have been taken to eliminate the irregularities mentioned in the inspection report of Bangladesh Bank and the instructions which were issued by Bangladesh Bank and other regulatory authorities have been complied properly as disclosed to us by management; (xiii) based on our work as mentioned above under the auditor’s responsibility section, the internal control and the compliance of the Company is satisfactory, and effective measures have been taken to prevent possible material fraud, forgery and internal policies are being followed appropriately; (xiv) the Company has complied with relevant laws pertaining to capital, reserve and net worth, cash and liquid assets and procedure for sanctioning and disbursing loans/leases found satisfactory; 351
  351. Independent Auditor ’s Reportto the Shareholders of Agrani SME Financing Company Limited (xv) we have reviewed over 80% of the risk weighted assets of the Company and we have spent around 676 person hours for the audit of the books and accounts of the Company; (xvi) the Company has complied with relevant instructions which were issued by Bangladesh Bank relevant to classification, provisioning and calculation of interest suspense; (xvii) the Company has complied with the ‘First Schedule’ of Bank Companies Act, 1991 in preparing these financial statements; and (xviii) all other issues which in our opinion are important for the stakeholders of the Company have been adequately disclosed in the audit report. Dhaka, 11th April 2019 352 Annual Report 2018 Hossain Farhad & Co. Chartered Accountants
  352. Agrani SME Financing Company Limited Balance Sheet As at 31 December 2018 Amount in Taka 31 Dec 2017 31 Dec 2018 PROPERTY AND ASSETS Cash and Cash Equivalents : Cash In hand Balance with Bangladesh Bank and its agent bank 284,171,495 7,191,278 16,548 7,174,730 367,810,800 6,808,655 83,375 6,725,280 Balance with other Banks and Financial Institutions 276,980,217 361,002,145 Money at Call and Short Notice - - Investments - - 1,588,992,597 1,588,992,597 1,079,318,480 1,079,318,480 7,886,130 12,139,584 89,928,546 61,250,053 - - 1,970,978,768 1,520,518,917 412,306,011 - - Other Liabilities 265,938,565 273,130,100 Total Liabilities 678,244,577 273,130,100 1,000,000,000 48,047,388 54,731,264 189,955,539 1,000,000,000 38,978,313 54,731,264 153,679,240 Total Shareholders’ Equity 1,292,734,191 1,24 7,388,817 Total Liabilities and Shareholders’ Equity 1,970,978,768 1,520,518,917 - - - - - - 129.27 124.74 Loans and Advances: Loans, cash credit and overdraft etc. Fixed Assets including Premises, Furniture and Fixtures Other Assets: Non-financial Institution Assets Total Assets LIABILITIES & CAPITAL Liabilities: Borrowings from other Banks, Financial Institutions and agents Deposit and Other Accounts: Shareholders’ Equity /Capital: Share Capital Statutory Reserve General Reserve Retained Earnings Off Balance Sheet Items: Contingent liabilities Letters of guarantee Irrevocable letters of credit Indemnity bond Other commitments Undisbursed contracted loans Total Off-Balance Sheet Items Net Asset Value Per Share 353
  353. Agrani SME Financing Company Limited Profit and Loss Account For the year ended 31 December 2018 Amount in Taka 31 Dec 2018 31 Dec 2017 Operating Income Interest income Interest paid on deposits , borrowings etc. 198,643,631 210,228,960 (11,585,329) 155,262,362 155,262,362 - Net Interest Income: Other operating income Total Operating Income (A) 198,643,631 4,644,828 203,288,459 155,262,362 3,170,435 158,432,797 Operating Expenses Salaries and allowances Rent, taxes, insurance, electricity etc. Postage, stamp, telecommunication etc. Legal expenses Stationery, printing, advertisement etc. Chief Executive Officer’s salary and allowances Directors’ fees Auditors’ fees Depreciation of assets Other expenses Total Operating Expenses (B) 90,142,588 5,681,583 394,485 42,250 1,526,252 1,800,000 572,000 184,000 4,506,892 9,266,776 114,116,826 89,154,974 5,697,339 321,325 20,375 1,116,997 1,290,000 560,000 165,600 4,896,507 9,124,378 112,347,495 89,171,633 46,085,302 12,000,000 - 8,500,000 - Total Provision (D) 12,000,000 8,500,000 Net Profit/(Loss) Before Tax (E)= (C-D) 77,171,633 37,585,302 Provision for Tax : Current tax Prior tax Deferred tax 31,826,259 32,634,854 (808,595) 15,913,857 16,455,977 265,271 (807,392) Net profit/(loss) after tax 45,345,374 21,671,445 Less: Appropriations Transferred to statutory reserve Transferred to general reserve Retained Surplus Earnings Per Share (EPS) 9,069,075 9,069,075 36,276,299 3.63 4,334,289 4,334,289 17,337,156 1.73 Profit/(Loss) before Amortization, Provision & Tax (C)=(A-B) Provision for loans and advances Provision for incentive bonus Provision for other assets 354 Annual report 2018
  354. Agrani SME Financing Company Limited Statement of Cash Flows For the year ended 31 December 2018 Amount in Taka 31 Dec 2017 31 Dec 2018 A . Cash flows from operating activities Interest receipts in cash 191,579,682 154,872,358 Interest payments (11,585,329) - Cash payment to employees (99,368,239) (89,154,974) 4,644,828 3,170,435 Receipts from other operating activities - - Payments for other operating activities (24,071,238) (23,322,521) Income Tax Paid (22,409,717) (11,706,032) Operating profit /(loss) before changing operating assets and liabilities 38,789,986 33,859,266 (Increase) / decrease in operating assets (1,152,141,500) (733,080,500) Loan to customers (1,152,141,500) (733,080,500) - - 617,540,444 474,611,586 Cash receipts from other activities Receivable form Agrani Bank Ltd. Increase/(decrease) in operating liabilities Deposit from customers - - Other liabilities (47,808,458) 36,403,558 Loan recovered from customers 665,348,902 438,208,027 (495,811,070) (224,609,649) Net cash from operating activities (A) B. Cash flows from investing activities Other Asset Sales/(Purchase) of properties, plant & equipment Net cash from investing activities (B) C. 119,191 (64,008) (253,438) (87,801) (134,247) (151,809) Cash flows from financing activities Receipt/(payment) of long term borrowings - - 412,306,011 - Net cash from financing activities (C) 412,306,011 - Net increase in cash and cash equivalents (A+B+C) (83,639,306) (224,761,458) Cash and cash equivalents at the beginning of the year 367,810,800 592,572,257 Cash and cash equivalents at the end of the year 284,171,495 367,810,800 Receipt/(payment) from other borrowings 355
  355. 356 Annual Report 2018 1 ,000,000,000 1,000,000,000 1,000,000,000 Prior Year Adjustments Adjustment of advance tax Restated balance General reserve Surplus/deficit on account of revaluation of properties Bonus share issue Issue right share Net profit for the year ended 31 December 2018 Statutory reserve Total Balance as at 31 December 2018 Paid up Capital Opening Balance as at 01 January 2018 Particulars For the year ended 31 December 2018 - - - - - - - - - - - Revaluation Reserve on Government Securities Agrani SME Financing Company Limited Statement of Changes in Equity 48,047,388 9,069,075 - - - - - 38,978,313 - - 38,978,313 Statutory Reserve 54,731,264 - - - - - 54,731,264 - - 54,731,264 General Reserve 189,955,539 (9,069,075) 45,345,374 - - - - 153,679,240 - - 153,679,240 Retained Earnings total 1,292,734,191 - 45,345,374 - - - - 1,247,388,817 - - 1,247,388,817 Amount in Taka
  356. 357 235 ,300,802 Other assets Total assets 164,613,120 - total liabilities Net Liquidity Gap 2017 - Provision and other liabilities 235,300,802 - Deposits and other accounts Net Liquidity Gap 2018 - Borrowing from other banks and financial institutions Liabilities - Fixed assets 113,716,807 - Investments Loans, advances and leases - 114,392,717 7,191,278 Not more than 1 month term Money at call and short notice Balance with other banks and financial institutions Cash in hand (including balance with Bangladesh Bank) Assets Particulars As at 31 December 2018 - 145,341,120 394,218,391 - - - - 394,218,391 - - 231,630,891 - - 162,587,500 1-3 months term Agrani SME Financing Company Limited Statement of Liquidity - - - - 579,660,799 278,630,467 436,376,649 436,376,649 - - 715,007,116 76,789,927 - 638,217,189 3-12 months term - - - - 465,785,997 476,208,870 141,016,983 141,016,983 - - 617,225,853 11,798,143 - 605,427,710 1-5 years term - - - - - (108,012,219) (91,624,339) 100,850,944 100,850,944 - - 9,226,605 1,340,476 7,886,130 Above 5 years term Amount in Taka 1,247,388,817 1,292,734,191 678,244,577 678,244,577 - - 1,970,978,768 89,928,546 7,886,130 1,588,992,597 - - 276,980,217 7,191,278 total
  357. AGRANI EXCHANGE HOUSE PRIVATE LIMITED , SINGAPORE Auditor’s Report & Audited Financial Statement 358 Annual Report 2018
  358. Directors ’ Report to the Member of Agrani Exchange House Private Limited AGRANI EXCHANGE HOUSE PRIVATE LIMITED (Incorporated in the Republic of Singapore) Co. Reg. No. 200200048D DIRECTORS’ STATEMENT The directors present their statement to the member together with the audited financial statements of the Company for the financial year ended 31 December 2018. OPINION OF THE DIRECTORS In the opinion of the directors, (a) the financial statements of the Company are drawn up so as to give a true and fair view of the financial position of the Company as at 31 December 2018 and of the financial performance, changes in equity and cash flows of the Company for the financial year ended on that date; and (b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. DIRECTORS The directors of the Company in office at the date of this statement are as follows: Zaid Bakht Mohammad Shams – Ul Islam Abu Suja Mohammed Shariful Islam ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement to which the Company is a party, being arrangements whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES According to the register maintained by the Company for the purposes of section 164 of the Singapore Companies Act, Chapter 50, the interests of the directors, who held office at the end of the financial year in the shares of the Company were as follows: Name of directors Direct interest At beginning of financial At end of year or date of financial appointment year The Company (Ordinary shares) Zaid Bakht Mohammad Shams – Ul Islam Abu Suja Mohammed Shariful Islam (appointed on 3.9.2018) - - - - - - 359
  359. Directors ’ Report to the Member of Agrani Exchange House Private Limited DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (Cont’d) Except as disclosed in this statement, no director who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company, or of the related corporation, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year. SHARE OPTIONS During the financial year, there were: • • no options granted by the Company to any person to take up unissued shares of the Company; and no shares issued by virtue of any exercise of option to take up unissued shares of the Company. At the end of the financial year, there were no unissued shares of the Company under option. AUDITORS The auditors, C. C. Yang & Co., have expressed their willingness to accept re-appointment. On behalf of the Board of Directors Abu Suja Mohammed Shariful Islam CEO & Director Mohammad Shams-Ul Islam Director 28 March 2019 360 Annual Report 2018
  360. Independent Auditor ’s Report to the Member of Agrani Exchange House Private Limited Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Agrani Exchange House Private Limited (the “Company”), which comprise the statement of financial position as at 31 December 2018, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (FRSs) so as to give a true and fair view of the financial position of the Company as at 31 December 2018 and of the financial performance, changes in equity and cash flows of the Company for the year ended on that date. Basis for Opinion We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Information Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages 1 and 2. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Directors for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The directors’ responsibilities include overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users 361
  361. Independent Auditor ’s Reportto the Member of Agrani Exchange House Private Limited taken on the basis of these financial statements. As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. C.C. YANG & CO. PUBLIC ACCOUNTANTS AND CHARTERED ACCOUNTANTS SINGAPORE 28 March 2019 362 Annual Report 2018
  362. Agrani Exchange House Private Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 200200048D STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018 (Expressed in Singapore Dollars) Revenue 2018 2017 $ $ 845,077 929,780 235,625 59,986 67,606 95,110 ( 409,531) ( 29,270) ( 700,399) ( 556,885) ( 60,580) ( 212) ( 731,080) 1,488 ( 256,261) - 6,732 1,488 ( 249,529) - - $1,488 $( 249,529) Other Items of Income Foreign Currency Gains Other Income Other Items of Expense Employee Benefits Expense Depreciation Finance Costs Other Expenses Profit (Loss) Before Tax from Continuing Operations Income Tax Benefit Profit (Loss) from Continuing Operations, Net of Tax Other Comprehensive Income Other Comprehensive Income, Net of Tax Total Comprehensive Income 363
  363. Agrani Exchange House Private Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 200200048D STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018 (Expressed in Singapore Dollars) 2018 2017 $ $ Non-Current Assets Property, Plant and Equipment 90,097 111,853 Total Non-Current Assets 90,097 111,853 Prepayments Fixed Deposit Cash and Bank Balances 549,765 10,258 600,901 1,420,704 1,003,803 17,389 600,000 1,472,883 Total Current Assets 2,581,628 3,094,075 $ 2,671,725 $ 3,205,928 Retained Earnings 1,000,000 844,859 1,000,000 843,371 Total Equity 1,844,859 1,843,371 Non-Current Liabilities Deferred Tax Liabilities - - Total Non-Current Liabilities - - Current Liabilities Trade and Other Payables 826,866 1,362,557 Total Current Liabilities 826,866 1,362,557 Total Liabilities 826,866 1,362,557 $ 2,671,725 $ 3,205,928 ASSETS Current Assets Other Receivables Total Assets EQUITY AND LIABILITIES Equity Share Capital Total Equity and Liabilities 364 Annual Report 2018
  364. Agrani Exchange House Private Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 200200048D STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018 (Expressed in Singapore Dollars) Total Equity $ Share Capital $ Retained Earnings $ 1,843,371 1,000,000 843,371 1,488 - 1,488 Closing Balance at 31/12/2018 $ 1,844,859 $ 1,000,000 $ 844,859 Opening Balance at 1/1/2017 2,092,900 1,000,000 1,092,900 Total Comprehensive Income for the Period ( 249,529) - ( 249,529) Closing Balance at 31/12/2017 $ 1,843,371 $ 1,000,000 $ 843,371 Opening Balance at 1/1/2018 Total Comprehensive Income for the Period 365
  365. Agrani Exchange House Private Limited (Incorporated in the Republic of Singapore) Co. Reg. No. 200200048D STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2018 (Expressed in Singapore Dollars) 2018 $ 2017 $ Operating Activities Profit (Loss) Before Tax from Continuing Operations 1,488 ( 256,261) Total Adjustments 27,768 57,599 Depreciation Interest Income Interest Expense ( Operating Cash Flows Before Changes In Working Capital 29,270 1,502) - ( 29,256 ( 198,662) 74,522) 60,580 3,193) 212 Total Changes In Working Capital ( 404,893 Decrease (Increase) in Other Receivables Decrease in Prepayments Increase (Decrease) in Trade and Other Payables 454,038 7,131 ( 535,691) Cash Flows From (Used In) Operations Interest Paid Interest Received ( 45,266) 1,502 Net Cash Flows From (Used In) Operating Activities ( 43,764) Investing Activities Purchase of Property, Plant and Equipment ( 7,514) ( 69,304) Net Cash Flows Used In Investing Activities ( 7,514) ( 69,304) ( 478,325) 3,002 880,216 ( 206,231 212) 3,075 209,094 Financing Activities Payment of Finance Lease Liability - ( 5,038) Net Cash Flows Used In Financing Activities - ( 5,038) Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Statement of Cash Flows, Beginning Balance Cash and Cash Equivalents, Statement of Cash Flows, Ending Balance 366 Annual Report 2018 ( 51,278) 134,752 2,072,883 1,938,131 $ 2,021,605 $ 2,072,883
  366. Agrani Remittance House SDN . BHD., Malaysia Auditor’s Report & Audited Financial Statement 367
  367. Directors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. DIRECTORS’ REPORT The directors hereby submit their report together with the audited financial statements of the Company for the year ended 31 December 2018. PRINCIPAL ACTIVITY The principal activity of the company during the financial year is that of providing remittance services and it is licensed under Money Services Business Act, 2011 of Bank Negara Malaysia. There has been no significant change in this principal activity during the financial year. FINANCIAL RESULTS Loss for the year before taxation Taxation Net loss for the year after taxation 2018 RM (310,670) (310,670) DIVIDENDS No dividends have been paid or declared since the end of the previous year. The directors do not recommend that a dividend to be paid in respect of the current year. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions except as disclosed in the financial statements. ISSUE OF SHARES AND DEBENTURES The Company did not issue any new shares or debentures during the year. SHARE OPTIONS No option has been granted by the Company to any parties during the year to take up unissued shares of the Company. No share has been issued during the year by virtue of the exercise of any option to take up unissued shares of the Company. As of the end of the year, there were no unissued shares of the Company under options. DIRECTORS The directors of the Company in office at any time during the year or since the end of the year are: SAID ABU HASSAN BIN SAID ABUL FAZAL DR. ZAID BAKHT MD.SAYEDUL ISLAM (Resigned w.e.f. 04.03.2019) MOHAMMAD SHAMS-UL ISLAM MD LUTFOR RAHMAN DIRECTORS’ BENEFITS During and at the end of the year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Since the end of the previous year, no director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of remunerations received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. DIRECTORS’ INTERESTS According to the register of directors’ shareholding under section 59 of the Companies Act, 2016, none of directors in office at the end of the financial year held any share in the Company during the financial year ended 31 December 2018. None of the other directors in office at the end of the year have interest in shares of the Company or its related corporations during the year ended 31 December 2018. 368 Annual Report 2018
  368. Directors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. DIRECTORS’ REMUNERATIONS The amounts of the remunerations of the directors or past directors of the Company comprising remunerations received/ receivable from the Company during the year are as follows: 2018 RM directors’ remunerations 210,708 210,708 None of the directors or past directors of the Company have received any other benefits otherwise than in cash from the Company during the year. No payment has been paid to or payable to any third party in respect of the services provided to the Company by the directors or past directors of the Company during the year. INDEMNIFYING DIRECTORS, OFFICERS OR AUDITORS No indemnities have been given or insurance premiums paid, during or since the end of the year, for any person who is or has been the director, officer or auditor of the Company. OTHER STATUTORY INFORMATION Before the statements of comprehensive income and the statements of financial position of the Company were made out, the directors took reasonable steps: (a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of allowance for doubtful debts, and have satisfied themselves that all known bad debts had been written-off and that adequate allowance had been made for doubtful debts; and (b) to ensure that any current assets which were unlikely to be realised at their book values in the ordinary course of business have been written down to their estimated realisable values. As of the date of this report, the directors are not aware of any circumstances: (a)  which would render the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to any substantial extent in the financial statements of the Company; or (b)  which would render the values attributed to current assets in the financial statements of the Company misleading; or (c)  which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company misleading or inappropriate; or (d)  not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Company misleading. As of the date of this report, there does not exist: a)  any charge on the assets of the Company which has arisen since the end of the year and secures the liability of any other person; or (b)  any contingent liability of the Company which has arisen since the end of the year. No contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the year which, in the opinion of the directors, will or may substantially affect the ability of the Company to meet their obligations as and when they fall due. 369
  369. Directors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. In the opinion of the directors: (a)  the results of the operations of the Company during the year were not substantially affected by any item, transaction or event of a material and unusual nature. (b)  no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the year and the date of this report which is likely to affect substantially the results of operations of the Company for the year in which this report is made. AUDITORS’ REMUNERATIONS Total amounts paid to or receivable by the auditors as remuneration for their services as auditors from the Company are as follows: 2018 RM 20,000 Statutory audit 20,000 AUDITORS The retiring auditors, Messrs. Ahamad Naina Mydin & Associates, have indicated their willingness to be re-appointed. Signed on behalf of the Board in accordance with a resolution of the directors. Said Abu Hassan Bin Said Abul Fazal Dr. Zaid Bakht Director Director Mohammad Shams-Ul Islam Director Kuala Lumpur Dated: 25 March 2019 370 Annual Report 2018
  370. Directors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. STATEMENT BY DIRECTORS Pursuant to Section 251 (2) of the Companies Act, 2016 We, SAID ABU HASSAN BIN SAID ABUL FAZAL and DR. ZAID BAKHT, being two of the directors of AGRANI REMITTANCE HOUSE SDN. BHD., do hereby state that in the opinion of the directors, the accompanying statement of financial statements are drawn up in accordance with the Malaysian Financial Reporting Standards (MFRSs) and the requirements of the Companies Act, 2016 in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2018 and of the results and cash flows of the Company for the financial year then ended. Signed on behalf of the Board in accordance with a resolution of the directors. Said Abu Hassan Bin Said Abul Fazal Dr. Zaid Bakht Director Director Kuala Lumpur Dated: 25 March 2019 371
  371. Directors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. STATUTORY DECLARATION Pursuant to Section 251 (1) (b) of the Companies Act, 2016 I, KHALED MURSHED RIZVI, the chief executive officer (CEO) primarily responsible for the financial management of AGRANI REMITTANCE HOUSE SDN. BHD., do solemnly and sincerely declare that the financial statements for the year ended 31 December 2018, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960. Khaled Murshed Rizvi Subscribed and solemnly declared by the above named at Kuala Lumpur in the state of Federal Territory on 25 March 2019 Before me, Commissioner for Oaths No. 10-1, Jalan Bangsar Utama 1, Bangsar utama, 59000 Kuala Lumpur. 372 Annual Report 2018
  372. Independent Auditors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. Opinion We have audited the financial statements of AGRANI REMITTANCE HOUSE SDN. BHD. which comprise the statement of financial position as at 31 December 2018, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 12 to 36. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2018, and of its financial performance and its cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards (MFRSs)and the requirements of the Companies Act, 2016 in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Malaysia, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”) (Ref: Note (a)), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Information Other than the Financial Statements and Auditors’ Report Thereon The directors of the Company are responsible for the other information. The other information comprises the Directors’ Report but does not include the financial statements of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Company does not cover the Directors’ Report and we do not express any form of assurance conclusion thereon. If, based on the work we have performed, we conclude that there is a material misstatement of the Directors’ Report, we are required to report that fact. We have nothing to report in thisregard. In connection with our audit of the financial statements of the Company, our responsibility is to read the Directors’ Report and, in doing so, consider whether the Directors’ Report is obtained in the audit or otherwise appears to be materially misstated. Responsibilities of Management and Directors for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Malaysian Financial Reporting Standards (MFRSs )and the requirements of the Companies Act, 2016 in Malaysia, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The directors are responsible for overseeing the Company’s financial reporting process. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia will always detect a material misstatement when it exists. Misstatements can 373
  373. Independent Auditors ’ Report to the Members of Agrani Remittance House Sdn. Bhd. arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with approved standards on auditing in Malaysia, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control; • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern; and • Evaluate the overall presentation, structure and content of the financial statements of the Company, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 2016 in Malaysia, we also report that in our opinion the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. Other matters This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Ahamad Naina Mydin & Associates [No. AF: 0938] Chartered Accounts Kuala Lumpur Dated : 25 March, 2019 374 Annual Report 2018 Ahamad Naina Bin MohamedMydin [Approval Number: 1468/12/18(J)]
  374. Agrani Remittance House Sdn . Bhd. Company No. 706823 - M, (Incorporated in Malaysia) STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018 2018 RM 2017 RM 827,504 827,504 819,769 819,769 579,339 311,767 2,600,000 882,072 129,806 4,502,984 357,628 2,500,000 3,039,157 106,478 6,003,263 5,330,488 6,823,032 3,000,000 (427,468) 2,572,532 3,000,000 (116,798) 2,883,202 37,000 2,720,956 2,757,956 1,596,832 36,000 2,306,998 3,939,830 TOTAL LIABILITIES 2,757,956 3,939,830 TOTAL EQUITY AND LIABILITIES 5,330,488 6,823,032 ASSETS NON CURRENT ASSETS Property, plant and equipment CURRENT ASSETS Trade receivables Other receivables, deposits and prepayments Fixed deposit Cash and bank balances Tax recoverable TOTAL ASSETS EQUITY AND LIABILITIES CAPITAL AND RESERVES Share capital Accumulated losses Shareholders’ equity CURRENT LIABILITIES Trade payables Other payables and accruals Amount due to a holding company 375
  375. Agrani Remittance House Sdn . Bhd. Company No. 706823 - M, (Incorporated in Malaysia) STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2018 REVENUE Add: Other income 2018 2017 RM RM 1,615,211 1,562,498 297,888 106,198 1,913,099 1,668,696 2,067,247 2,086,857 8,297 16,827 136,648 113,860 2,212,192 2,217,544 (299,093) (548,848) (11,577) (13,190) (310,670) (562,038) - - (310,670) (562,038) Less: Operational expenditure Administrative expenses Distribution expenses Other operating expenses Loss from operations Finance expenses Loss before taxation Taxation NET LOSS FOR THE YEAR AFTER TAXATION 376 Annual Report 2018
  376. Agrani Remittance House Sdn . Bhd. Company No. 706823 - M, (Incorporated in Malaysia) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018 Share Capital Accumulated Total losses RM RM RM 3,000,000 445,240 3,445,240 - (562,038) (562,038) As at 31 December 2017 3,000,000 (116,798) 2,883,202 As at 01 January 2018 3,000,000 (116,798) 2,883,202 - (310,670) (310,670) 3,000,000 (427,468) 2,572,532 As at 01 January 2017 Net loss for the year after taxation Net loss for the year after taxation As at 31 December 2018 377
  377. Agrani Remittance House Sdn . Bhd. Company No. 706823 - M, (Incorporated in Malaysia) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2018 2018 2017 RM RM (310,670) (562,038) 48,825 (261,845) 66,917 (495,121) (533,478) (122,132) Payables (1,595,832) 1,604,532 Cash generated from operations (2,129,310) 1,482,400 - 43,651 (23,328) (35,842) (2,414,483) 995,088 Purchase of property, plant and equipment (56,560) (171,380) Net cash used in investing activity (56,560) (171,380) CASH FLOWS FROM OPERATING ACTIVITIES Loss before taxation Adjustments for : Depreciation of property, plant and equipment Changes in Working Capital Receivables Tax Refund Tax paid Net cash generated from / (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITY CASH FLOWS FROM FINANCING ACTIVITY Advance from holding company 413,958 389,497 Net cash generated from financing activity 413,958 389,497 Net increase in cash and cash equivalents (2,057,085) 1,213,205 Cash and cash equivalents at the beginning of the year 5,539,157 4,325,952 Cash and cash equivalents at the end of the year 3,482,072 5,539,157 Cash in hand 13,275 19,967 Cash at bank 868,797 3,019,190 Fixed deposit 2,600,000 2,500,000 3,482,072 5,539,157 CASH AND CASH EQUIVALENTS COMPRISE OF: 378 Annual Report 2018
  378. Agrani Remittance House Canada Inc . Auditor’s Report & Audited Financial Statement 379
  379. Agrani Remittance House Canada Inc . Balance Sheet (Un-audited) As at 31 December 2018 ASSETS Current Assets Cash Short-Term lnsvestment Interest receivable Prepaid Expenses and Deposits Total Current Assets CAD $ 6,064.47 400,000.00 4,255.94 410,320.41 Non-Current Assets Properfy and Equipment Restricted Cash Preliminary E,xpenses Total Non-Current Assets Total Assets 758.25 26,637.78 9,743.08 37,139.11 447,459.52 LIABILITIES Current Liabilities Accounts payable and Accrued Liabilities Due to Holding Company Total Current Liabilities 33,753.98 449,850.00 483,603.98 Non -Current Liabilities Due to Holding Company Total Non-Current Liabilities Total Current & Non-Current Liabilities 400,000.00 400,000.00 883,603.98 Shareholders Deficit Issued Share Capital Profit/Loss Deficit opening Balance Retain earnings Total Liabilities 380 Annual Report 2018 100.00 (2,942.64) (433,301.82) (436,144.46) 447,459.52
  380. Agrani Remittance House Canada Inc . Profit and Loss Accouts (Un-audited) As at 31 December 2018 INCOME Commissions & fees lnterest income Exchange Gain Miscellaneous income Total Operating Income CAD $ 37,538.72 4,882.04 12,373.00 5,986.88 60,780.64 EXPENDITURE Salaries, Wages & Benefits Office Bank Charge Rent of Premises Travel Advertisement & Promotion Insurance of premises Vehicales expenses Utilities Telephone Repairs & maintanance Professional fee Loss on Sale of assets Depreciation lntangible Assets Total Operating Expenses Profit/(Loss) before Tax 30,403.18 1,153.34 5,078.92 6,150.00 3,250.00 2,666.01 600.00 1,548.01 11,424.50 366.75 1,082.57 63,723.28 (2,942.64) 381
  381. Agrani Exchange Company (Australia) Pty. Limited Auditor’s Report & Audited Financial Statement 382 Annual Report 2018
  382. Agrani Exchange Company (Australia) Pty. Limited CAN: 154 851 546 Statement of Financial Position 2018 2017 $ $ ASSETS Current Assets Cash and cash equivalents 259,242 259,242 Trade and other receivables 53,900 53,900 Plant and equipment - - Total Current Assets 313,142 313,142 - - Plant and equipment 3,150 3,150 Total Non-Current Assets 3,150 3,150 316,292 316,292 Trade and other receivables 412,479 412,479 Total Current Liabilities 412,479 412,479 Borrowings 528,734 528,734 Total Non-Current Liabilities 528,734 528,734 Total Liabilities 941,213 941,213 (624,921) (624,921) 50,000 50,000 (674,921) (674,921) (624,921) (624,921) Non-Current Assets Trade and other receivables Total Assets LIABILITIES Current Liabilities Non -Current Liabilities Net Assets Equity Issued Capital Retained losses Total Equity 383
  383. Agrani Bank Network 384 Annual Report 2018
  384. Head Office Division Head Office Divisions Credit Policy and Credit Risk Management Division Industrial Credit Division Rural Credit Division SME Credit Division Recovery and NPA Management Division Information Technology and MIS Division Establishment and Engineering Division Procurement and Common Service Division Planning Co-Ordination and Marketing Division Branch and Subsidiaries Unit Control Division Treasury Division HR Planning Deployment and Operations Division HR Discipline Grievances and Appeal Division HR Training Research and Development Division Vigilance Division Company Affairs and Board Division International Trade and Foreign Currency Management Division Foreign Remittance Division Law Division Central Accounts Division Reconciliation Division Public Relations Division Risk Management Division Audit & Inspection Division 1 Audit & Inspection Division 2 Audit Monitoring Division Audit Compliance (Internal) Division Audit Compliance (External) Division Sustainable Finance Division Card Division Islamic Banking Unit Special Study Cell 385
  385. Name and Address of Circles Dhaka Circle-1 Sunmoon Star Tower (12th Floor) 25/A Dilkusha C/A, Dhaka-1000 Dhaka Circle-2 Sunmoon Star Tower (12th Floor) 25/A, Dilkusha C/A, Dhaka-1000 Chattogram Circle Kaderi Chamber 37, Agradbad, Chattogram Khulna Circle Shilpa Bank Bhaban (4th Floor), Khulna Rajshahi Circle 280/2, Housing State, Upashahar, Rajshahi Barishal Circle Agrani Bank Bhaban Sadar Road, Barishal Sylhet Circle 28/A Bihongo, Kazitola, Sylhet Rangpur Circle Central Road, Rangpur Cumilla Circle Engineering Institutions Market Tomsom Bridge, Laksham Road, Cumilla Mymensingh Circle Chotto Bazar, Mymenshingh Faridpur Circle Chawkbazar, Faridpur 386 Annual Report 2018
  386. Name of Zones with Number of Branches Sl No . Name of Zone No. of Branch Sl No. Name of Zone No. of Branch 1 Bagerhat 14 30 Kushtia 21 2 Barishal 24 31 Laxmipur 15 3 Bhola 10 32 Madaripur 11 4 Bogura 30 33 Manikgonj 12 5 Brahmanbaria 16 34 Moulvibazar 18 6 Chandpur 21 35 Munshigonj 14 7 Chapai Nawabgonj 13 36 Mymensingh 18 8 Chattogram Central 22 37 Narayangonj 11 9 Chattogram North 24 38 Narsingdi 13 10 Chattogram South 26 39 Natore 14 11 Chuadanga 15 40 Netrokona 12 12 Cumilla 32 41 Naogaon 12 13 Dhaka East 19 42 Noakhali 14 14 Dhaka North 15 43 Pabna 26 15 Dhaka South 20 44 Patuakhali 19 16 Dhaka West 18 45 Pirojpur 7 17 Dinajpur 17 46 Rajshahi 19 18 Faridpur 18 47 Rangpur 16 19 Feni 14 48 Satkhira 10 20 Gaibandha 11 49 Sirajgonj 20 21 Gazipur 18 50 Sylhet East 20 22 Gopalgonj 13 51 Sylhet West 21 23 Jamalpur 22 52 Tangail 25 24 Jasshore 30 53 Thakurgaon 10 25 Jhenaida 18 26 Joypurhat 9 Sub - total 919 27 Khulna 28 Corporate Branch 34 28 Kishoregonj 12 Total 953 29 Kurigram 12 387
  387. List of Corporate Branches Sl No . Sl No. Name & Address 1 Principal Branch 9/D Dilkusha C/A, Motijheel, Dhaka 1000 18 Green Road Corporate Branch 28 Green Road, Dhaka 1205 2 Amin Court Corporate Branch 62/63 Motijheel C/A, Dhaka 1000 19 Moulavibazar Corporate Branch 144 Mitford Road, Dhaka 3 Ramna Corporate Branch 18 Bangabandhu Avenue, Dhaka 1000 20 Nawabpur Road Corporate Branch 243-244 Nawabpur Road, Dhaka 4 Foreign Exchange Corporate Branch 1/B DIT Avenue, Motjheel, Dhaka 1000 21 Sadarghat Corporate Branch 3/7 Johnson Road, Sadarghat,Dhaka 5 Bangabandhu Avenue Corporate Branch 32 Bangabandhu Avenue, Dhaka 1000 22 Tejgaon Industrial Area Corporate Branch 315/A, Tejgaon I/A Dhaka 1215 6 Purana Paltan Corporate Branch 56 Purana Paltan, Dhaka 1000 23 Clay Road Corporate Branch Clay Road, Khulna 9100 7 Laldighi East Corporate Branch 1012-1013 Laldighi East, Chattogram 4100 24 Bangabandhu Road Corporate Branch Bangabandhu Road, Narayanganj 1400 8 Commercial Area Corporate Branch 28 Sayada Court, Agrabad C/A Chattogram 4100 25 Shaheb Bazar Corporate Branch Shaheb Bazar, Boalia Rajshahi 6100 9 Agrabad Jahan Building Corporate Branch Jahan Building, 24 Agrabad C/A Chattogram 4100 26 Laldighirpar Corporate Branch Laldighirpar, Sylhet 3100 10 Sir Iqbal Road Corporate Branch 25 Sir Iqbal Road, Khulna 9100 27 WASA Corporate Branch WASA Bhaban 98 Kazi Nazrul Islam Avenue Kawran Bazar, Dhaka 1215 11 Asadgonj Corporate Branch Haji Amir Ali Chowdhury Road Asadganj, Chattogram 4000 28 Gulshan Corporate Branch Gulshan-1, Dhaka. 12 EPZ Corporate Branch CEPZ Area, Chattogram 4100 29 Mohakhali Corporate Branch Mohakhali, Dhaka. 13 New Market Corporate Branch 886/904 H. S. Suhrawardy Road Chattogram 4000 30 Uttara Model town Corporate Branch Uttara, Dhaka. Strand Road Corporate Branch 15 Strand Road, Chattogram 4100 31 Jatiya Press Club Corporate Branch 15 Strand Road, Chattogram 4100 15 Banani Corporate Branch Banani, Dhaka 32 Gazipur Corporate Branch Gazipur 16 B. WAPDA Corporate Branch Ellal Chamber, Motijheel C/A, Dhaka 1000 33 Rajgang Corporate Branch Cumilla 17 Dhaka Sheraton Hotel Corporate Branch Sheraton Hotel, Dhaka 1000 34 Chawk Bazar Corporate Branch 21 Chawk Bazar, Barishal 8200 14 388 Name & Address Annual Report 2018
  388. List of Authorised Dealer Branches Sl No . Name & Address Phone Cable Address 1 Chawk Bazar Branch 21 Chawk Bazar, Barishal 8200 (0431) 64082 Fx 62426 AGRANI BANK LTD., Barishal BANGLADESH 2 Thana Road Branch Thana Road, Bogura 5800 (051) 66564 Fx 65012 AGRANI BANK LTD., BOGRA BANGLADESH 3 Agrabad Jahan Building Corporate Branch 24, Agrabad C/A Chattogram 4100 (031) 716370 Fx 710152 COMAGRANI CHITTAGONG TLX NO. 633020 ABJBC-BJ 4 Asadgonj Corporate Branch Haji Amir Ali Chowdhury Road Asadgonj, Chattogram 4000 (031) 637728 631083 Fx 618507 ASADAGRANI CHITTAGONG TLX NO. 633161 AGASD-BJ 5 EPZ Corporate Branch CEPZ Area, Chattogram 4100 (031) 800421 Fx 740926 AGRANI BANK LTD., BAY SHOPING, CTG TLX NO. 66235 ABCG-Bj 6 Commercial Area Corporate Branch 28 Sayada Court Agrabad C/A, Chattogram 4100 (031) 716225 2521220 Fx 716225 AGRAAGRANI CHITTAGONG TLX NO. 633079 BCCA-BJ AGBKBDDH 015 7 Cox’s Bazar Branch Cox’s Bazar 4800 Ph/Fx (0341) 63259 AGRANI BANK LTD., COX’S BAZAR BANGLADESH 8 Laldighi East Corporate Branch 1012-1013 Laldighi East Chattogram 4100 (031) 611373 610133, 611373 630803-4 Fx 610133 AGRANI BANK LTD., CHITTAGONG BANGLADESH TLX NO. 66215 ABCG-BJ SWIFT: AGBKBDDH 017 9 New Market Corporate Branch 886/904 H. S. Suhrawardy Road Chattogram 400 (031) 611525 Fx 635561 NEWAGRANI, CHITTAGONG Tel: 611525 Fx 88-031-745926 10 Strand Road Corporate Branch 15 Strand Road Chattogram 4100 (031) 631724 716113 SALTAGRANI, CHITTAGONG 11 Rajganj Branch Rajganj, Cumilla 3500 (081) 76022 AGRANI BANK LTD., COMILLA BANGLADESH 12 Amin Court Corporate Branch 62/63 Motijheel C/A Dhaka (02) 9550967 955141 FX 9572045 DILAGRANI, DHAKA TLX NO. 632400 ABACD-BJ SWIFT: AGBKBDDH 004 13 Banani Corporate Branch Banani, Dhaka 8816279 BANANI-AGRANI DHAKA 14 Bangabandhu Avenue Corporate Branch 32 Bangabandhu Avenue, Dhaka (02) 9553242 9555651 9555642 AVENUE AGRANI, DHAKA TLX NO. 642160 ABRD-BJ 15 B. WAPDA Corporate Branch Ellal Chamber Motijheel C/A, Dhaka 1000 (02) 9554157 9554283 WAPDAAGRANI, DHAKA TLX NO. 632549 ABD-BJ 16 Dhaka Sheraton Hotel Corporate Branch Sheraton Hotel, Dhaka 8330130, 8330131 Tel/Fax 9348753 INTERAGRANI, DHAKA 389
  389. List of Authorised Dealer Branches 390 17 Foreign Exchange Corporate Branch 1 /B DIT Avenue, Motjheel Dhaka 1000 (02) 7176449 7176449, 9552319 9553602 FAX 9567185 FEAGRANI, DHAKA TEL NO. 642501 ABFED-BJ SWIFT: AGBKBDDH 006 18 Green Road Corporate Branch 28 Green Road, Dhaka 1205 (02) 8613679 8631372 GREENAGRANI, DHAKA TEL NO. 842757 ABD-BJ 19 Moulavibazar Corporate Branch 144 Mitford Road, Dhaka (02) 7314426 7313424 JOYAGRANI DHAKA TEL NO. 671260 ABM-BJ SWIFT: AGBKBDDH 003 20 Nawabpur Road Corporate Branch 243-244 Nawabpur Road, Dhaka (02) 9562679 NAWAGRANI, DHAKA TEL NO. 632550 ABD-BJ 21 Principal Branch 9/D Dilkusha C/A Motijheel, Dhaka 1000 (02) 956077 9561556 9554497 9553064 JHEELAGRANI, DHAKA TEL NO. 642757 ABD-BJ 632549 ABD-BJ SWIFT: AGBKBDDH 001 22 Purana Paltan Corporate Branch 56 Purana Paltan, Dhaka 1000 (02) 9560011 9561049 9564769 PURANAGRANI, DHAKA TLX 632550 ABD-BJ 23 Ramna Corporate Branch 18 Bangabandhu Avenue Dhaka 1000 (02) 7160070 9568744 9563086-88 Fax 9554040 GULAGRANI, DHAKA TLX NO. 642160 ABRD-BJ SWIFT: AGBKBDDH 005 24 Sadarghat Corporate Branch 3/7 Johnson Road, Sadarghat, Dhaka (02) 7118594 7123349 SADARAGRANI, DHAKA TLX NO. 671260 ABD-BJ 25 Tejgaon Industrial Area Corporate Branch 315/A, Tejgaon I/A, Dhaka 1215 (02) 9887426 9887858 TEJAGRANI, DHAKA TLX NO. 642757 ABD-BJ 26 Maldahpatty Branch Dinajpur 5200 (0531) 63306 63102 AGRANI BANK LTD. Dinajpur TLX NO. 671524 ABDJP-BJ 27 Hakimpur Branch Bangla Hili, Dinajpur 05329-75351 HAKIM AGRANI Hakimpur Branch 28 Faridpur Branch Faridpur 7800 (0631) 61972 63134, 63137 Fax 62508 AGRANI BANK LTD., FARIDPUR BANGLADESH 29 Gazipur Branch Gazipur 1700 (02) 9252202 Fax 9252013 AGRANI BANK LTD., GAZIPUR BANGLADESH 30 Jashore Branch Jess tower, Jashore 7400 (0421) 66516 66175 COMAGRANI, Jashore TLX NO. 633421 ABJES-BJ 31 Clay Road Corporate Branch Clay Road Khulna 9100 (041) 724024 723831 Ph./ Fax 720552 AGRANI BANK LTD., KHULNA TLX NO. 62714 ABK-BJ SWIFT: AGBKBDDH 023 32 Sir Iqbal Road Corporate Branch 25 Sir Iqbal Road Khulna 9100 (041) 722949 723713 724947 COMAGRANI, KHULNA TEL NO. 627214 ABK-BJ Annual Report 2018
  390. List of Authorised Dealer Branches 33 Bara Bazar Branch 14 N . S. Road Kushtia 7000 (071) 62336 Ph./ Fax 61866 AGRANI BANK LTD., KUSHTIA BANGLADESH 34 Bangabandhu Road Corporate Branch Bangabandhu Road Narayangonj 1400 (02) 7630090 7630165 Ph./ Fax 7630173 COMAGRANI NARAYANGANJ TEL NO. 671525 ABNJ-BJ 35 Court Road Branch Court Road Narayangonj 1400 (02) 7631808 Ph./ Fax 7631930 COURTAGRANI NARAYANGANJ TEL NO. 671525 ABNJ-BJ 36 Choumuhani Branch Choumuhani, Begumganj Noakhali 3821 (0321) 51867 Fax 52057 AGRANIBANK, CHOWMUHANI NOAKHALI, BANGLADESH 37 Shaheb Bazar Corporate Branch Shaheb Bazar, Boalia Rajshahi 6100 (0721) 776063 772393 774208 Fax 770642 AGRANI BANK, RAJSHAHI BANGLADESH SWIFT: AGBKBDDH 027 38 Rangpur Main Branch Central Road Rangpur (0521) 65437 Fax 62393 AGRANI BANK LTD., RANGPUR TEL NO. 671521 AZRNP-BJ 39 Laldighirpar Corporate Branch Laldighirpar Sylhet 3100 (0821) 716177 717038 725619 Fax 710303 AGRANI BANK LTD., SYLHET BANGLADESH SWIFT: AGBKBDDH 021 40 WASA Corporate Branch 98 Kazi Nazrul Islam Avenue Kawran Bazar, Dhaka 1215 02-9110082 02-58157082 02-9140680 02-9112267 (02) 9112267 AGRANI BANK LTD.WASA BRANCH, DHAKA. 41 Gulshan Corporate Branch Gulshan-1, Dhaka 02-9884271 02-8824172 br9787@bangla.net 42 Mohakhali Corporate Branch Mohakhali, Dhaka 02-9848753 02-9893553 br6659@bangla.net 391
  391. Zonewise List of Branches 1 Bagerhat Zone 1 Bangla Bazar 5 Brahmanbaria Zone 1 Bagerhat 2 Bhola 1 Akhaura 2 Badhal Bazar 3 Borhanuddin 2 Ashugonj 3 Bhaga Bazar 4 Char Shashibhusion 3 Bancharampur 4 Chitolmari 5 Charfession 4 Bangura Bazar 5 Chulkathi Bazar 6 Dalatkhan 5 Bitghar 6 Deypara Bazar 7 Kalinath Rayer Bazar 6 Brahmanbaria 7 Goalmath 8 Khairhat 7 Chandura Bazar 8 Jatrapur 9 Lalmohan 8 Jagat Bazar 9 Main Road 10 WAPDA 9 Kasba 10 Mongla Port 10 Lalpur Bazar 11 Morrelgonj 4 Bogura Zone 11 Nabinagar 12 Munigonj 1 Badurtola 12 Salimgonj 13 Polerhat 2 Chamrul 13 Shahpur 14 Sannyashi Bazar 3 Chelopara 14 Shibpur 4 Dupchanchia 15 Sarail 16 T .A. Road 2 Barishal Zone 5 Ghoradaphat 1 Amua Bazar 6 Mohasthangarh 2 Banaripara 7 Nishindara 6 Chandpur Zone 3 Batazore 8 Poradah Hat 1 Algee Bazar 4 Bottala 9 Raja Bazar 2 Babur Hat 5 Dhamura bandar 10 Shibbati 3 Balithuba 6 Gournadi 11 Sonatola 4 Beltali Bazar 7 Jhalakati 12 Talora 5 ChandraBazar 8 Kashipur Bazar 13 Thana Road 6 Changarchar Bazar 9 Lebubunia Hat 14 Tinmatha Railgate 7 Farakkabad 10 Motherkati 15 Zianagar 8 Hajigonj 11 Muladi 16 Bagbari 9 Kachua 12 Nalcity 17 Bhatra 10 Khajuria Bazar 13 Padarhat Bazar 18 Bogura Cantonment 11 Matlab Bazar 14 Paisar Hat 19 Dhunat 12 Munshirhat 15 Puran Bazar 20 Khandar 13 Nandalalpur 16 Rahut Kathi Bandar 21 Madla 14 Narayanpur 17 Rupatali 22 Majhira 15 Natun Bazar 18 Ranir Hat 23 Mirzapur 16 Puran Bazar 19 Sadar Road 24 Nandigram 17 Ramchandrapur Bazar 20 Satla Bazar 25 Noymile Hat 18 Rupsha Bazar 21 Shekher Hat 26 Saptapadi Market 19 Shaharasti 22 torky Bandar 27 Sherpur 20 Station Road 23 Ulania 28 Sonka 21 Nischintapur 24 Steamerghat 29 Sultangonj 30 Taranihat 7 Chapai Nawabgonj Zone 1 Amnura 3 392 Bhola Zone Annual Report 2018
  392. Zonewise List of Branches 2 Baroghoria 6 Colonel Hat 23 Khagrachari 3 Binodpur 7 Durgapur 24 Ramgar 4 Chapai Nawabgonj 8 Fouzdar Hat 25 Rangamati 5 Chowdala 9 Hathazari 26 Shanti Niketon 6 Gobratola 10 Madambibir hat 7 Khamar 11 Mirsarai 11 Chuadanga Zone 8 Mobarakpur 12 Madunaghat 1 Alamdanga 9 Monakahosa 13 Nazir Hat 2 Andulbaria 10 Rajarampur 14 Quaish Burischar 3 Asmankhali 11 Rohanpur 15 Samitirhat 4 Bamon Para 12 Sadarghat 16 Sitakundu 5 Bamundi Bazar 13 Shibgonj 17 Sandwip 6 Chuadanga 18 Chattogram University 7 Darsana 8 Chattogram Central Zone 19 Pahartoli 8 Gangni 1 Amanat Khan Sarak 20 Fatehabad 9 Hardi 2 Bahaddarhat B .T. 21 Industrial Area 10 Jiban Nagar 3 Chaktai 22 Jalalabad 11 Kedargonj 4 Chatteswari Road 23 Ghahira 12 Khashkarara Bazar 5 Firinghee Bazar 24 Rawzan 13 Meherpur 6 Jubilee Road 14 Mujibnagar 7 Kapashgola 10 Chattogram South Zone 15 Radhakantapur Bazar 8 Khatungonj 1 Amirabad 9 Lalkhan Bazar 2 Anwara 12 Cumilla Zone 10 Press Club 3 Boalkhali 1 BICIC 11 Reazuddin Bazar 4 Chatori Chowmuhoni 2 Balutopa 12 Sadarghat 5 Cox’s Bazar 3 Bataicori Bazar 13 Isanagar 6 Dohazari 4 Batakandi 14 Artillary Centre 7 Gunagori 5 Burichang 15 Ashkardighi 8 Keranirhat 6 Brammanpara 16 Khulshi 9 Khutakhali 7 Chandina 17 Ctg. Air Base 10 Maricha 8 Daudkandi 18 Halishahar 11 Minnat Ali Hat 9 Debiwar 19 Medical College 12 Mirzakil 10 Homna 20 Port 13 Patiya 11 Madhabpur 21 Sk.Mujib Road 14 Sarwatoli 12 Nimsar 22 Steelmill 15 Sattarhat 13 Rup Babu Bazar 16 Teknaf 14 Shankuchail 9 Chattogram North Zone 17 Aziznagar 15 Jahapur 1 Amirhat 18 Bandarban 16 Amratoli Bazar 2 Azadi Bazar 19 Banorupa 17 Boxgonj Bazar 3 Baroiar Hat 20 Chandraghona 18 Hasanpur 4 Baradogar Hat 21 Ichakali 19 Housing Estate 5 Cadet College 22 Kaptai 20 Jalam Bazar 393
  393. Zonewise List of Branches 21 Juktikhula Bazar 11 Narinda 11 Senpara 22 Kasinagar 12 Paridas Road 12 Shewrapara 23 Khila Bazar 13 Royshaheb Bazar 13 New Eskaton 24 Laksham 14 Rayer Bag 14 Panthpath 25 Manoharpur 15 S . S. College 15 Shantinagar 26 Medical College 16 Agamashi Lane 28 Nangol Kot 17 Central Law College 17 Dinajpur Zone 29 Nasratpur 18 North South Road 1 Amtoli 30 NatherPetua 19 Rajuk Bhaban 2 Bhushir bandar 31 Paduar Bazar 3 Birampur 32 Tomsom Bridge 15 Dhaka South Zone 4 Pulhat 1 Antrabarah 5 Phulbari 13 Dhaka West Zone 2 Babu Bazar 6 Hakimpur 1 Bank town 3 Becharam Dewri 7 Kamalpur hat 2 Dhamrai 4 Begum Bazar 8 Madilahat 3 Dhanmondi 5 Chowdhury Bazar 9 Maldahpatty 4 Gabtoli 6 Chowk Bazar 10 Munshipara 5 Jahangir Nagar Uni. 7 Churain Bazar 11 Nawabgonj 6 Mohammadpur 8 Imamgonj 12 Parbatipur 7 Nawar Hat 9 Islampur 13 Puratan Bazar 8 Rayer Bazar 10 Jagannath University 14 Setabgonj 9 Satmosjid Road 11 Joypara 15 Station Road 10 Savar 12 Narisha Bzar 16 Tajpurhat 11 Shyamoli 13 Nawabgonj (kalakopa) 17 Birgonj 12 Shimulia 14 Posta 13 Bangla Academy 15 Mitfort Hospital 18 Feni Zone 14 Dhaka University 16 Zinzira 1 Badamtoli 15 Elephant Road 17 Patiljhap Bazar 2 Bairagirhat 16 Jatiya Jadughar 18 Komargonj 3 Bashurhat 17 New Market 19 Kamrangirchar 4 Chhagalnaiya 18 Sonargaon Road 20 Nawabgonj Road 5 Chowmuhani 6 Dagonbhuiyan 14 Dhaka East Zone 16 Dhaka North Zone 7 Deltagate 1 Farashgonj 1 BAF 8 Feni 2 Thatari Bazar 2 Badda 9 Kamlapatty 3 Basaboo 3 Farmgate 10 Kashipur Bazar 4 Dholairpar 4 ICDDRB 11 Parshuram 5 Faridabad 5 Kurmitola 12 Senbag 6 Hatkhola 6 Malibag 13 Sonagazi 7 Jatrabari 7 Mirpur 14 Subar Bazar 8 Kadamtali 8 Mouchak 9 Kamlapur 9 Pallabi 19 Faridpur Zone 10 Matuail 10 Rampura TV 1 Badarpur 394 Annual Report 2018
  394. Zonewise List of Branches 2 Ahladipur 2 Bormi Bazar 10 Jhenaidah 3 Bhanga 3 Boktarpur 11 Kabirpur Bazar 4 Boalmari 4 Dolan Bazar 12 Kaligonj 5 Bus Stand 5 DUET 13 Kannadah 6 Charbhadrashan 6 Gazipur 14 Kot Chadpur 7 Faridpur 7 Ghagtia Chalar Bazar 15 Magura 8 Ghurua 8 Goshinga 16 Sadhuhati 9 Kalukhali 9 Kaoraid 17 Sreepur 10 Maligram 10 Kaliakoir 18 Mohammadpur 11 Nagarkanda 11 Kapasia 12 Naliajamalpur 12 Kashimpur 25 Jamalpur Zone 13 Pangsha 13 Mawna Bazar 1 Balijuri Bazar 14 Rajbari 14 Nagari 2 Bus Stnad 15 Sadarpur 15 Rajabari 3 Hazipur Bazar 16 Shariatullah Bazar 16 Sreepur 4 Islampur Bazar 17 Zila Parisad 17 tokenayan Bazar 5 Jagannathgonj Ghat 18 Golarbazar 18 tongi 6 Jamalpur 20 Joypurhat Zone 7 Jamtoli Bazar 1 Akkelpur 23 Gopalgonj Zone 8 Jamuna Fertilizer Factory 2 Awlai 1 Bangram Bazar 9 Lahirikanda 3 Chawk Barkat 2 Bhangarhat 10 Pingna 4 Joypurhat 3 BSMRSTU 11 Piyarpur 5 Girls Cadet College 4 Gopalgonj 12 Sarishabari 6 Kalai 5 Jalirpar 13 Shahbazpur 7 Kushumba 6 Jhutigram 14 Station Road 8 Matrai 7 Kasiani 15 Bhimgonj Bazar 9 Panchbibi 8 Kotalipara 16 Kakorkandi 9 Mukshudpur 17 Nandir Bazar 21 Gaibanda Zone 10 Poura Super Market 18 Nolitabhari 1 Bonarpara 11 Ramdia 19 Nanni Bazar 2 Dholbhanga 12 Tungipara 20 Sherpur 3 Fulcharighat 13 Kaligonj 21 Tinnani Bazar 4 Gaibandha 22 Sribordi 5 Kamarpara 24 Jhenaidah Zone 6 Naldanga 1 Arpara 26 Khulna North Zone 7 Panchpir Bazar 2 Beroil Palita Bazar 1 Boyra Bazar 8 Rasulpur 3 Bazar Gopalpur 2 Daulatpur 9 Sadullapur 4 Bhaynarmor 3 Goal Para 10 Saghatta 5 Chaprail 4 Jashore Road 11 Sundargonj 6 Hajipur 5 K .D.A. New Market 7 Holidhani Bazar 6 Kazdia 22 Gazipur Zone 8 Hamdah Bus Stand 7 Khalishpur 1 Board Bazar 9 Isakhada 8 Moheswarpasha 395
  395. Zonewise List of Branches 9 Neval Base 22 Bagharpara 5 Daulatpur 10 Fulbari Gate 23 Bhangura Bazar 6 Gopalnagar Bazar 11 Fultola 24 Gazirhat 7 Islamic University 12 Sheikhpara Bazar 25 Jagania 8 Khalishakundi 13 Terokhada 26 Kalabaria 9 Kumarkhali 14 Satrujitpur 27 Kalia 10 Mathurapur 15 Bajua Bazar 28 Lohagara 11 Mazampur 16 Banargati Bazar 29 Narail 12 Mirpur 17 Banka Bazar 30 Ratadanga 13 New Market 18 Batbunia Bazar 14 Panti 19 Chuknagar 28 Kishoregonj Zone 15 Patikabari 20 Farajipara 1 Bazitpur 16 Pragpur 21 Jaigir Mohal 2 Bhairab Bazar 17 S .C.B Road 22 Kapilmuni 3 Charpumdi 18 Shilaidah 23 Khanjahan Ali Road 4 Hossainpur 19 Station Road 24 Khulna Medical College & Hospital 5 Karimgonj 20 Thanapara 25 Khulna University 6 Katiadi Bazar 21 Ujangram 26 Liakatnagar (Dada Match) 7 Kishoregonj 27 Rupsha Strand Road 8 Kuliarchar 28 Shamsur Rahman Road 9 Mirzapur 1 Bhabanigonj 10 Mothkhola 2 Chandragonj 31 Laxmipur Zone 27 Jashore Zone 11 Nikli 3 Dalal Bazar 1 Bazar 12 Pakundia 4 Dasherhat 2 Benapole Bazar 5 Doshghoria 3 Bimanghati 29 Kurigram Zone 6 Khilpara Bazar 4 Doratana Road 1 Bhitorbondhat 7 Laxmipur 5 Dighalia Bazar 2 Bhurungamari 8 Mandari Bazar 6 Godkhali Bazar 3 Chilmari 9 Nagmud Bazar 7 Gonganandapur 4 Fulbari 10 Panpara Bazar 8 Hashimpur 5 Kurigram 11 Raipur 9 Jashore 6 Lalmonirhat 12 Ramgonj 10 Jhikargacha 7 Mission Mor 13 Ramgoti 11 Jhumjhumpur 8 Nageswari 14 Sompara 12 JSTU 9 Nazimkhan 15 Paniwala 13 Keshabpur 10 Rajarhat 14 Nowapara 11 Ulipur 32 Manikganj Zone 15 Protappur 12 Tushbhandar 1 Arichaghat 16 Pulerhat 2 Basta Bus Stand 17 Rail Bazar 30 Kushtia Zone 3 Bangladesh hat 18 Rajarhat 1 Allahar Dargah 4 Boyra 19 Shekh Hati 2 Kustia 5 Charigram 20 Monirampur 3 Baragangdia 6 Jhitka Bazar 21 Auria 4 Bheramara 7 Krishnapur 396 Annual Report 2018
  396. Zonewise List of Branches 8 Manikganj 4 Kalkini 14 Sreenagar 9 Manikganj Bus Stand 5 Madaripur 10 Maniknagar 6 Mulfatgonj 38 Narshingdi Zone 11 Saturia 12 Singair 7 Naria 1 Amirgonj 8 New Market 2 Baburhat 9 Shariatpur 3 Chalakchar Bazar 33 Moulvibazar Zone 10 Takerhat 4 Charsindur Bazar 1 Bhanugosh Bazar 11 Zajira 5 C & B Bazar 2 Bhukshimoil 6 Gangkulkandi 3 Giasnagar 7 Manohordi 36 Mymensingh Zone 4 Gopaya 1 Atharobari 8 Musapur Bazar 5 Hobigonj 2 Bhaitkandi 9 Narshingdi 6 Kailashgonj 3 Bhaluka 10 Palash Bazar 7 Kotarkona 4 Bidhyagonj Bazar 11 Radhagonj 8 Karmadha 5 C.K.Ghosh Road 12 Shibpur 9 Kulaura 6 Chhoto Bazar 13 Station Road 10 Mostafapur 7 Dhara Bazar 11 Moulvibazar 8 Gaffargaon 39 Natore Zone 12 Munshi Bazar 9 Mymensingh Girls Cadet College 1 Bagatipara 13 Nabigonj 10 Kaligonj Bazar 2 Chanchkoir Bazar 14 Fultala Bazar 11 Kashigonj 3 Gopalpur 15 Rabir Bazar 12 Mechua Bazar 4 Halsha 16 Shayestagonj 13 Medical Collage 5 Laxmikole 17 Sindurkhan Bazar 14 Muktagacha 6 Lokmanpur Bazar 18 Sreemongal 15 Mymensingh 7 Natore 16 Pagla Bazar 8 Natore Surgar Mill 34 Narayangonj Zone 17 Phulpur 9 Nazirpur 1 Araihazar 18 Trisal 10 North Bengle Sugar MIlls 2 B. K. Road 11 Quadirabad Cantonment 3 Court Road 37 Munshigonj Zone 12 Rajapur Hat 4 Demra 1 Baligaon Bazar 13 Singra 5 Kalir Bazar 2 Dighirpar Bazar 14 Station Road 6 Kanchan 3 Hasail Bazar 7 Mirjumla Road 4 Hashara Bazar 40 Netrokona Zone 8 Shastapur 5 Hossaindi Bazar 1 Barhatta 9 Siddhirgonj Power Station 6 Kalma Bazar 2 Birishiri 10 Sonargaon 7 Kolapara Bazar 3 Durgapur 11 Tanbazar 8 Mirkadim 4 Fakirer Bazar 9 Muktarpur 5 Jhanjail 35 Madaripur Zone 10 Munshigonj 6 Kalmakanda 1 Barhamgonj 11 Munshirhat 7 Kendua 2 Damudya 12 Ramgopalpur 8 Mohangonj 3 Dicrirchar Hat 13 Simpara Bazar 9 Netrokona 397
  397. Zonewise List of Branches 10 Purbadhala 8 Court Road 1 Bhandaria 11 Rupgonj Bazar 9 Dashuria 2 Kawkhali 12 Teasree Bazar 10 Dublia Bazar 3 Main Road 11 H .M.M. Road 4 Mathbaria 41 Naogaon Zone 12 Ishwardi 5 Mirukhali 1 Ahsangonj 13 Kashinathpur Bazar 6 Pererhat 2 Aihai 14 Mirzapur Hat 7 Zilla Parishad 3 Boalia 15 Muladuly 46 Rajshahi Zone 4 Bus Stand 16 Nagarbari Ghat 1 Bazu Bagha 5 Kashab 17 Nazirgonj 2 Godagari 6 Mainamhat 18 Pushpaparahat 3 Baneshwar Bazar 7 Matajeehat 19 Rail Bazar 4 Charghat 8 Naogaon 20 Ruppur 5 Court Bazar 9 Nithpur 21 Shibrampur 6 Horian 10 Patnitola 22 Shyamgonj Hat 7 Laxmipur 11 Porsha 23 Sujanagar 8 Malopara 12 Sapahar 24 Shatbaria Bazar 9 Nagar Bhaban 25 Trimohoni 10 Nawhata 42 Noakhali Zone 26 Saikola 11 New Market 1 Amishapara 12 Puthia 2 Badalkot Bazar 44 Patuakhali Zone 13 Riaghati 3 Bazra Bazar 1 Alipur Bandar 14 Rajshahi Cantonment 4 Chatkhil 2 Bauphal 15 Rajshahi University 5 Datterhat 3 Dasmania 16 RDA Bhaban 6 Gopalpur Bazar 4 Golachipa 17 Vadra 7 hatiya 5 Kanakdia 18 WAPDA (IRRI) 8 Joyag Bazar 6 Khepupara 19 Wasa Bhaban 9 Maijdhee Cort 7 Kuakata 10 Nadana Bazar 8 Mirzagonj 47 Rangpur Zone 11 Noakhali Science And 9 Nutan Bazar 1 Alam Nagar Technology University 10 New Market 2 Badargonj 12 Sonaimuri 11 Bus Terminal Road Zilla Board Patuakhali Science & Technology University 3 13 4 Central Road 14 Subarnachar 12 Puran Bazar 5 Jaldhaka 13 Amtali 6 Medical College Hospital 43 Pabna Zone 14 Barguna 7 Nekmamud Hat 1 Abdul Hamid Road 15 Betagi 8 Nilphamari 2 Ataikula 16 Gazipur Hat 9 Pawtana Hat 3 Atgharia 17 Kakchira 10 Pirgachha 4 Bera 18 Pathar Ghata 11 Rangpur Cadet College 5 Baral Bridge 19 Taltali bazar 12 Rangpur Main 6 Chatmohor 13 Sayedpur 7 College Gate 14 Sayedpur Cantonment 398 Annual Report 2018 45 Pirojpur Zone
  398. Zonewise List of Branches 15 Shanerhat 5 Dhaka Dokhin 3 Bhuyapur 16 Taragonj 6 Fenchugonj 4 Chapri Bazar 7 Gasbari Bazar 5 Deldhoar 48 Satkhira Zone 8 Godown Bazar 6 Dhuburia 1 Bangshipur Bus Stand 9 Golapgong 7 Ghatail 2 Bhetkhali 10 Hetimgonj 8 Gopalpur 3 Debhata 11 Jalalpur Bazar 9 Hemnagar 4 Gazir hat 12 Kamal Bazar 10 Zamurki 5 Moutala 13 Kamal Bazar 11 Kanchanpur 6 Sundarban 14 Kuchai 12 Karatia 7 Nurnagar 15 Mathiura (Eidgah) 13 Kawaljani 8 Patkelghata 16 Ramdha Bazar 14 Madhupur 9 Satkhira 17 Saraker Bazar 15 Mirzapur 10 Shyamnagar 18 Shahgoli Bazar 16 Mirzapur Cadet College 19 Shibgonj 17 Mohera 20 Station Road 18 Mymensingh Road 19 Nagarpur 49 Sirajgonj Zone 1 Bahuli 2 Beltail 51 Sylhet West Zone 20 Nalua Bazar 3 Brammagachha 1 Ambari Bazar 21 Sakhipur Bazar 4 Chandaikona 2 Ambarkhana 22 Salimabad 5 Dhubil 3 Bairagir Bazar 23 Suruj Bazar 6 Enayetpur 4 Balagonj 24 Tangail 7 Ghurka 5 Biswanath 25 Warshi 8 Kalibari 6 Boaljur Bazar 53 Thakurgaon Zone 9 Belkuchi 7 Chhatak 1 Chaklahat 10 New Market 8 Derai 2 Horipur 11 Nimgachhi 9 Duara Bazar 3 Jagodalhat 12 Pangashi Hat 10 Goala Bazar 4 Mirzapur 13 Porjana Vatpara 11 Haripur Gas Field 5 Munshirhat 14 Raigonj 12 Kaligonj Bazar 6 Panchagar 15 S. S. Road 13 Kazir Bazar 7 Pirgonj 16 Shahjadpur 14 Lala Bazar 8 Shalbahanhat 17 Sameshpur 15 Salutikar Bazar 9 Thakurgaon 18 Station Road 16 Subid Bazar 10 Tunirhat 19 Talgachhi Bazar 17 Sunamgonj 20 Ullapara 18 Umarpur Bazar Sub total 19 Zaflong Corporate Branches 20 Zinda Bazar Grand total ` 50 Sylhet East Zone 1 Bandar Bazar 2 Beani Bazar 52 Tangail Zone 3 Chawk Bazar 1 Aishara 4 Dewal Bazar 2 Basail 919 34 953 399
  399. Standard Accounting Disclosure Checklist Items Page Ref . Corporate Objectives, Values & Structure Clarity and presentation: • Vision and Mission 9 • Overall Strategic Objectives 13 • Core values and code of conduct/ethical principles 10-11 • Profile of the company 14-15 • Director’s profile and their representation on other companies & organizations chart 21-37, 124-125, 302 Management report/commentary and analysis including director's report/chairman's review/ CEO's review etc. • A general review of the performance of the company 46-55, 60-63, 67-75, 84-103 • Description of the performance of various actives/products/segments of the company its group companies during the period under review. (Weightage to be given for pictorial/graphical/ tabular presentations used for this purpose) 46-55, 84-103 • A brief summary of the Business and other risks facing the organization and steps taken to effectively manage such risks 149-168 • A general review of the future prospects/outlook • Information on how the company contributed to its responsibilities towards the staff (including health & safety) • Information on company’s contribution to the national exchequer & to the economy 65, 76 193-199 182 Sustainability Reporting • Social Responsibility Initiatives ( CSR) 188-192 • Environment related Initiatives 172, 188-192, 208 • Environmental & Social Obligations 172, 188-192, 208 • Integrated Reporting 120-168 Appropriateness of Disclosure of Accounting policies and General Disclosure • Disclosure of adequate and properly worded accounting policies relevant to assets, liabilities, Income and expenditure in line with best reporting standards. 225-334 • Any specific accounting policies 232-238 • Impairment of Assets 235-236 • Changes in accounting policies/changes in accounting estimates • Accounting policy on subsidiaries( if there is no any subsidiary, full marks should be granted) 400 Annual Report 2018 241 233, 340-383
  400. Standard Accounting Disclosure Checklist Items Segment Information • Comprehensive segment related information bifurcating segment revenue, segment results and segment capital employed • Availability of information regarding different segments and units of the entity as well as non- segmental entities/units. • Segment analysis of * Segment Revenue. * Segment Results. * Turnover. * Operating profit. * Carrying amount of Net Segment Assets Page Ref. 74-75, 83-103, 316-317 Financial Statements (Including Formats) • Disclosures of all contingencies and commitments 214, 220, 230, 238 • Comprehensive related party disclosures 239, 302 • Disclosures of Remuneration & Facilities provided to Directors & CEO 290-291 • Statement of Financial position / Balance sheet and relevant schedules 213-214, 219-220, 242-298 • Income statement / profit and Loss Account and relevant schedules 215, 221, 282-297 • Statement of changes in Equity / Reserves & Surplus Schedule 216, 222, 279-281 • Disclosure of Types of Share Capital • Statement of Cash Flow 275 217, 223, 296-299 • Consolidated Financial Statement (CFS) 213-218 • Extent of compliance with the core IAS/IFRS or equivalent National Standards 239-241 • Disclosures / Contents of Notes to Accounts 225-339 Information about Corporate Governance • Board Of Directors, Chairman and CEO • Audit committee (composition, role, meetings, attendance, etc.) internal Control & Risk Management • Ethics And Compliance • Remuneration and other Committees of Board • Human capital • Communication to Shareholders & Stakeholders * Information available on website * Other information 21-32 124-155 10-11, 126, 131-137 124 193-199 3, 32, 204-207 401
  401. Standard Accounting Disclosure Checklist Items • Management Review And Responsibility • Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports • Any other investor friendly information Page Ref. 57-60, 63-72, 100 123-126 59-64, 74-75 Risk Management & Control Environment • Description of the Risk Management Framework 150 • Risk Mitigation Methodology 150-155 • Description of the Risk Reporting 150-154 Stakeholders Information • Description of Shareholding(Number of shares as well as category wise, e. g Promoter group, etc. 32 • Share held by Directors/Executives and relatives of Directors/Executives) 32 • Redressed Of investors complaints 204-207 Graphical/ Pictorial Data • Earnings per Share 50 • Net Assets 51 • Stock Performance N/A • Shareholders’ Funds 49 • Return on Shareholders Fund 49 Horizontal/Vertical Analysis including following Operating Performance (Income Statement) • Total Revenue • Operating profit • Profit before Tax • Profit after Tax • EPS 49-51 Statement of Financial position (Balance Sheet) • Shareholders Fund • Property Plant & Equipment • Net Current Assets • Long Term Liabilities/Current Liabilities 49-51 Profitability/Dividends/ performance and Liquidity Ratios • Net Interest income Ratio • Profit before provisions and Tax • Price earnings ratio • Capital Adequacy Ratio • Return on Capital Employed • Debt Equity Ratio 402 Annual Report 2018 67-69, 302-303, 315
  402. Standard Accounting Disclosure Checklist Items Page Ref . Statement of Value Added and Its Distribution • Government as Taxes • Shareholders as dividend 181-183 32 • Employees as bonus/remuneration 193-195 • Retained by the entity 180-182 • Marker share information of the Company’s product/services 120-122 • Economic value added 181-183 Presentation of Financial Statements • Quality of the Report/ Layout of Contents • Cover and printing including the theme on the cover page • Appropriateness and effectiveness of photographs and their relevance • Effectiveness of Charts and Graphs • Clarity, simplicity and lucidity in presentation of Financial Statements Timeliness in issuing financial Statements and holding AGMs • 3 months time to produce the Annual Report and hold AGM are considered reasonable for full marks • Delay after the initial period of 3 month – deduction of 2 marks us to be made for each month • If the period is over 6 months- no marks shall be awarded Additional Disclosures For Example • Human Resource Accounting • Any other good additional disclosures ( Independence certification Eg GNV/GRI Audited Financial Statements signed on 30 April, 2019 AGM held on 22 August, 2019 193-196 Specific Areas for Banking Sector Disclosure of Ratings given by various rating agencies for the Bank and for its instruments issued by /of Bank. For eg. FD,CD, Tier l and Tier 11 Bonds 56 Details of Advances portfolio Classification wise as per the direction issued by the central bank of the respective countries 233, 314 Disclosure for Non Performing Assets • Movements In NPA • Sector-wise breakup of NPA • Movement of Provisions made against NPA • Details of accounts restructures as per regulatory guidelines Maturity Pattern of Key Assets and Liabilities (ALM) Classification and valuation of investments as per regulatory guidelines/Accounting standards 252, 254-255, 270-272, 294, 316 218, 222 233-235, 246-251 403
  403. Standard Accounting Disclosure Checklist Items Business Ratio /Information • Statutory Liquidity Reserve (Ratio) • Net interest income as a percentage of working funds/ Operating cost-Efficiency ratio • Return on Average Asset • Cost/ Income ratio • Net Asset Value Per Share • Profit per employee • Profit per employee Capital Adequacy ratio • Cost of Funds • Cash Reserve ratio/ Liquid Asset ratio • Dividend Cover ratio • Gross Non-Performing assets to gross advances /Non-Performing Loans (Assets) to total Loans (Assets) Page Ref. 68-71, 300-301, 313 Note: Meaning of working funds- these are total resources (total liabilities or total assets) of a bank as on a particular date. Total resources include capital, reserves and surplus, deposits, borrowings, other liabilities and provision. Details of credit concentration/ Sector-wise exposures The break-up Provisions and Contingencies included in the Profit and Loss Account Disclosure under regulatory guidelines Details of Non-statutory investment portfolio 89-90, 237-239 215, 221, 270-273, 293-295 140-144 88, 246-251, 303-309 Disclosure in respect of assets given on operating & finance lease N/A, 240 Disclosures for derivative investments 232-233 Bank’s Network : List of Centers or Branches 404 Annual Report 2018 8, 384-399