Global Islami Bank: Annual Report 2021

Transcription

59. GIB HEADS / IN-CHARGES AT THE CORPORATE HEAD OFFICE Sl. Name and Designation 01 Mr. Zulfiker Ahmed Khan Executive Vice President 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Functional Position Assigned Division/ Department/ Unit Head International Division Mr. Md. Jahir Uddin Ferdous Executive Vice President Head Investment Administration Division Agent Banking Division Mr. Zulfiquar Ali Khan Executive Vice President Mr. Md. Zillur Rahman FCA FCS Senior Vice President Mr. Deen Mohammad Khan Senior Vice President Mr. S.M. Mizanur Rahman Senior Vice President Head General Services Division CFO Finance & Accounts Division Head Treasury Division Head Investment Division CMSME Division Retail Banking Division Agricultural Investment Division Research & Development Division Financial Inclusion Department Sustainable Finance Department Mr. Imtiaz Ahmed Siddiqui Vice President Mr. Md. Osman Gani Mollah Vice President Mr. Md. Abdur Rahim Vice President Mr. A.N.M. Ahsan Habib Vice President Mr. Ali Akbar Quoreshi Senior Assistant Vice President Mr. A.K. Ariful Haque Senior Assistant Vice President Mr. Md. Manjur Hossain Senior Assistant Vice President Mr. Mohammad Shahidullah Assistant Vice President Mr. S. M. Mahafuzur Rahman Assistant Vice President Mr. Mohammad Ruhul Amin Assistant Vice President Mr. Mohammad Shahadat Hossain Assistant Vice President Mr. Yaqub Hossain First Assistant Vice President Mr. Muhammad Zakaria Mumen First Assistant Vice President Mr. Md. Safiqul Islam First Assistant Vice President Mr. Sk. Shaffat Ali Senior Principal Officer Mr. Md. Humayun Kabir Faculty Member Head Marketing & Development Division Head Human Resources Division Head Anti-Money Laundering Division Head ADC & Cards Division Head Internal Audit & Compliance Division CITO (In-Charge) Company Secretary Head Information Technology Division Board & Company Secretariat Division Risk Management Division In-Charge Branch Operation Department In-Charge Techno Business Team In-Charge Share Department In-Charge Special Asset Management Division Head Shari'ah Secretariat Division In-Charge Communication & Branding Division In-Charge Central Clearing Department Principal GiB Training Institute GIB Annual Report 2021 57
60. GIB SENIOR EXECUTIVES [In Alphabetical Order] Executive Vice Presidents ● Mr. Ekram Elahi ● Mr. Md. Shamsur Rahman Majumder ● Mr. Zulfiquar Ali Khan ● Mr. Md. Jahir Uddin Ferdous ● Mr. Zulfiker Ahmed Khan Senior Vice Presidents ● Mr. Md. Zillur Rahman FCA FCS ● Mr. S.M. Mizanur Rahman ● Mr. Deen Mohammad Khan Vice Presidents ● ● ● ● ● Mr. Ahmed Shoeb Mr. Imtiaz Ahmed Siddiqui Mr. Md. Abdur Rahim Mr. Md. Monower Hossain Mr. Mohammad Nasir Uddin ● ● ● ● ● Mr. A.N.M. Ahsan Habib Mr. Kazi Anwarul Azam Mr. Md. Faizur Rahman Mazumder Mr. Md. Osman Gani Mollah Ms. Humayra Chinu ● ● ● ● ● ● ● ● ● ● ● Mr. A.K.M. Zafor Ulla Mr. Ariful Hassan Khan Mr. Md. Abdur Rahim Mr. Md. Fazlur Rahman Mr. Md. Manjur Hossain Mr. Md. Noor-A-Alam Siddique Mr. Mohammad Ansarul Karim Shahed Mr. Mohammed Akther Hossain Mr. Syed Mosaddeque Hossain Chowdhury Ms. Shamsun Nahar Mr. Syed Asad Mahmood Senior Assistant Vice Presidents ● ● ● ● ● ● ● ● ● ● ● ● Mr. A.K. Ariful Haque Mr. Ali Akbar Quoreshi Mr. Bisawjit Bhattacharjee Mr. Md. Billal Hossain Mr. Md. Mahbubur Rahman Lasker Mr. Md. Mokterul Islam Mr. Md. Shamsul Alam Mr. Mohammad Kamruzzaman FCA Mr. Mohammmad Shahnour Alam Mr. Murad Mahmud Ms. Sharmin Khan Mr. Mohammad Zahid Hasan Tranining Institute Executives ● Mr. Md. Humayun Kabir ● Mr. Md. Abdul Mannan 58 GIB Annual Report 2021
61. GIB COLLEAGUES WE LOST IN RECENT TIMES Late S M Nurul Alam Chowdhury Length of Service with GiB 14 .06.2016 - 13.06.2019 Late Mst. Sadia Akter Length of Service with GiB 07.05.2019 - 30.05.2020 Late ANM Misbaul Hoque Length of Service with GiB 04.09.2014 - 11.06.2020 Late Md. Kamrul Hassan Length of Service with GiB 07.05.2017 – 01.07.2020 Late Kamrunnahar Length of Service with GiB 16.04.2018 – 11.01.2021 Late AAM Noorun Nabi Length of Service with GiB 09.10.2013 – 14.01.2021 Late Arshad Taufiq Length of Service with GiB 23.10.2018 – 02.04.2021 Late Mohammad Salah Uddin Length of Service with GiB 15.11.2020 – 30.10.2021 Late Murshida Afrin Length of Service with GiB 14.12.2015 – 13.12.2021 GIB Annual Report 2021 59
62. 60 GIB Annual Report 2021
63. Bismillahir Rahmanir Rahim Dear fellow Shareholders and respected Stakeholders , FROM THE DESK OF THE CHAIRMAN SINCE THE OUTBREAK, BANGLADESH'S BANKING INDUSTRY HAS BEEN PAINSTAKINGLY NAVIGATING THE UNPRECEDENTED PANDEMIC. DESPITE THE INHERENT CHALLENGING ISSUES, GLOBAL ISLAMI BANK (GIB) HAS WELL ACHIEVED IN ALL KEY PERFORMANCE INDICATORS AND SUCCEEDED IN ESTABLISHING AN UNPRETENTIOUS NETWORK OF BRANCHES, SUB-BRANCHES, ATMS, AND AGENT OUTLETS AROUND THE COUNTRY. I WOULD LIKE TO EXTEND MY SINCERE APPRECIATION TO OUR HONORABLE SHAREHOLDERS, REGULATORS, INDUSTRY PEERS, CSR PARTNERS, THE MASSIVE CUSTOMERS AND OTHER POTENTIAL STAKEHOLDERS FOR THEIR ENDURING CREDENCE IN GIB” Assalamu Alaikum WRWB, Welcoming you to 9th Annual General Meeting of Global Islami Bank with an extraordinary pleasure and honor. On behalf of the Board of Directors and myself, I would like to thank you for your continued trust in the Bank and to overcome difficult times. We hope that you and your family are in good health and safety. Even we are in masse living through a predicament that has taken-over our lives. It is inessential to say this crisis is unparalleled and there was no prototype for addressing it. Nevertheless, it is our resilient publics-centric attitude and persistent belief in our prospective to provide that facilitates us to traverse through the ambiguity ensuring stability of business and safety of all our individuals. I would like to express my heartfelt gratitude and respect to all of our well-wishers, as well as my sincere appreciation to all of our partners for their unwavering support and consistent contribution to Global Islami Bank since its inception. I am pleased to present the GIB Annual Report 2021 in this platform to shed light on the Bank’s overall performance, exchange views on economic environment and strategic priorities we followed in upcoming year. On behalf of our distinguished Directors and Sponsor Shareholders, I am expressing my sincere thankfulness to you as your marvelous relentless cooperation induced to acquire strength of my direction as well as Bank Management which greatly enabled me to supervise GIB scrupulously and properly while maintaining our operational excellence with full benevolence. ADVERSITY ADAPTABILITY The goal of Global Islami Bank is to foster excellent growth while maintaining a better client experience and sustainable business practices. We were focused in 2021 on rebuilding our balance sheet through cautious business practices that ensured long-term viability; the pandemic has taught us the value of creating long-term companies. GIB Annual Report 2021 61
64. With the ongoing epidemic , we have discovered and grasped the knowledge that the pandemic's true impacts will be long-lasting and will not be fully understood for some time. As a result, we chose to tread carefully in an operational environment that was challenging, unsteady, and likely to persist. We were more committed to maintaining a solid portfolio and strengthening our financials, which will serve the bank in the long run, rather than spending time and effort in portfolio expansion. As a result, guided by Islami Shari’ah, we continued to work to improve the healthy and efficiency of our customer relationships. During these trying times, we made sure that our customers knew they had our entire support. Backed by regulatory policies, our assistance gave them the time they needed to reestablish their businesses activities. It also increased their faith to do banking with us which is the goal of our bank. This faith is reflected in our all business segmental ratios; those are the core strengths of our regular inspiration to go forward. ADOPTION OF ISLAMIZATION IN GIB The Father of the Nation Bangabandhu Sheikh Mujibur Rahman made the assurance for embarking Islami Banking through signing the charter of Islamic Development Bank in the year, 1974. Consequently, Islami Banking prefaced its activities in our country in the year 1983. At present, the demand of welfare economics is at the highest level throughout the world. World Bank, IMF are doing researches in Islamic Economics for its increasing demand. Bangladesh is not also exempted from it. There is a growth of 20% each year in this regard. Islami Banking currently accounts for 25% of overall banking, and its popularity is growing day by day. Considering all these issues and for the welfare of the people of Bangladesh and in line with the effective policy of the present Government, the Bank has converted from Conventional Banking to Full-fledged Islami Banking and stared its full-fledged islami banking operations from January 01, 2021 with the changes of name as “Global Islami Bank” having “GIB” as the new affirmed entitled symbol of the Bank. RECESSION BUT INDICATORS OF BETTERMENT AND HOPEFULNESS ALSO EXISTS A global pandemic has struck; we have observed the worst economic collapse since the terrific downturn of the 1930s. The biggest economies of the globe were seriously shaken. The pandemic continues to wreak havoc on the world's most vulnerable people. Bangladesh had a terrible year in the prior year as well. It has, even so, performed better than most other countries when it comes to dealing with health and economic developments. 62 GIB Annual Report 2021 Regardless, the pandemic is still showing us how vulnerable we humans are amidst all our knowledge and technological prowess, in an era when we are capable of inter-planetary travel and setting up colonies on other planets. Undeniably, economic growth slowed in 2021, with a major shortfall in tax mobilization, a halt in the completion of public investment projects, an increase in the budget shortage, a curtailment in private sector’s credit escalation, and a dramatic decline in trade. After all, several key macroeconomic metrics have recently improved. Manufacturing industry and electricity production have increased, while VAT collection has increased at a good rate. Domestic demand has fared far better than private and governmental investment indicators, which have remained sluggish. Indeed, it is possible that the economy will take longer to fully recover. CLIENTS FIRST AS WELL AS CONCERN AND SECURITY OF GIB EMPLOYEES The post-pandemic world necessitates a new way of thinking and living in order to continue our business while ensuring our personal safety. This transition will undoubtedly provide us with certain obstacles, but it will also provide new chances for the business sector and industries. As a progressive bank, GIB all time prioritizes the well-being of our stakeholders, as well as the protection and safety of GIB employees over the development and economic efficiency as we believe without doubt that we have a significant social duty. We have modified our conventional tactics during the pandemic and emphasized on the health and safety of our employees, customers, the Board of Directors, and shareholders which caused to happen effectuation of new ideas such as work from home, digital customer service, holding board and general meetings via a digital video conference arena, etc. Our employees have shown strong resilience and ability to adapt to changing circumstances. Their steadfast commitment has helped to keep our operations running safely and continue to contribute to the economy. Therefore, we recorded no fatalities at our operations during the year. I would like to thank every employee of the Bank for their commendable efforts and character displayed during this challenging period, and for responsibly upholding the reputation of our beloved Bank. With encouraging news regarding successful vaccines, I look forward to resuming in-person engagement practices with our stakeholders when safe to do so.
65. STATURE OF GLOBAL ECONOMY The economic rebound in 2021 was driven by effective consumer spending , growth in trade of goods and rise of investment. This surpassing situation was marked as the highest growth rate in more than four decades. But at the year-end level of that year, the momentum for growth slowed down, especially in China, the United States and the European Union, as the effects of monetary and fiscal stimuli began to go down and major supply-chain disruptions had been discovered. The latest "Global Economic Prospects" published by World Bank report projects the global economy will expand 4.4% in 2022, marking a return to growth after year 2021. But substantial risks remain, and the recovery is expected to be subdued. A major factor in making any forecast for the global economy in general or for any particular country or a region still remains the path of the pandemic and capacities of the countries around the world, in particular advanced economies to cope with surges in more serious variants of the virus. Therefore, the pandemic will likely remain a headwind for the first half of 2022. The road ahead in 2022 appears to be mostly distinguished by new limits imposed by governments in order to combat Covid-19 virus that continues to elude specialists, with ramifications for economic growth. But the proverbial elephant in the room inflation remains the major concern. Higher inflation will lead to monetary policy divergence that could see turbulence in financial markets. Emergence of new variants of the Corona Virus, surge in consumer demand for goods coupled with supply bottlenecks, tighter labor markets, and rising commodity prices are affecting low-income household the hardest. Elevated inflation is expected to persist for longer than envisioned, with ongoing supply chain disruptions and high energy prices continuing in 2022. Assuming inflation expectations stay well anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds. Emerging market and developing economies (EMDEs) will hit harder with depreciating currencies and capital outflows as interest rates rise in developed countries, especially in the US. These countries are also struggling with servicing foreign currency denominated (mostly in the US dollar) debt as the US dollar appreciates and rising inflation in much of the world. The US dollar has appreciated largely due to strong US growth and higher bond yields. Risks to the global baseline are tilted to the downside. The emergence of new Covid-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility and localized wage pressures mean uncertainty around inflation and policy paths is high. As advanced economies lift policy rates, risks to financial stability and emerging market and developing economies’ capital flows, currencies, and fiscal positions especially with debt levels having increased significantly in the past two years - may emerge. Other global risks may crystallize as geopolitical tensions remain high, and the ongoing climate emergency means that the probability of major natural disasters remains elevated. The US economy has been on a roller coaster ride for the last two years due to effects of the pandemic and the Federal Reserve has been putting increased focus on fighting inflation that is running 30 years high. But consumer demand remains strong with the unemployment rate down to 4.2 per cent and industrial output showing a modest upward trend. Therefore, economic growth rates are still forecast to be above pre-pandemic levels despite the failure of President Joe Biden to get the support necessary to pass his US$1.8 trillion Build Back Better plan where economic stimulus was weaved into it. It is now estimated that the US economy will grow by 4 per cent in 2022 with the unemployment rate falling to 3.5 per cent by the end of 2022. The economic growth in the US will largely be driven by consumption which accounts for about 70 per cent of GDP. Output in the Eurozone is expected to grow by 4.3 per cent, the UK by 5.0 per cent, Japan by 2.6 per cent and China by 5.0 per cent in 2022. Emerging market economies excluding Chins are forecast to grow by 4.8 per cent during the same year. While the global economy is on the way to recovery as reflected in growth forecasts, it will be a bumpy ride at least in early 2022. The current inflationary pressures even if caused by transitory factors and if they fade away, other inflationary forces such as likely wages growth resulting from tight labor markets will have to be dealt with. Supply chain bottlenecks are expected to ease in the course of the year. 2022 would also be a year when more of the emergency monetary policy measures will be unwound, while fiscal policy measures will remain supportive but much less so than what was in 2020 and 2021. There will be a global tightening of financial conditions triggered by the Federal Reserve's tapering and rising interest rates which are GIB Annual Report 2021 63
66. typically negative factors for EMDEs . While overall the news is mostly optimistic for 2022, a great degree of uncertainty still remains about the path of the pandemic and the trends in inflation rate. STATURE OF BANGLADESH ECONOMY Over the previous era, Bangladesh has progressed slowly but steadily toward extreme economic independence. However, Bangladesh has been adapting to the digitization process, which has eventually proven to be a gift for the country during this worldwide epidemic. The majority of economic activities were successfully carried out throughout the year by promoting various internet platforms. As a result, there was a considerable increase in demand for technology-based businesses, particularly in digital transformation, communication, and the internet. This crisis, like previous ones, requires global citizens and enterprises to contemplate, re-imagine, recalibrate, and reinvent themselves. Businesses that follow them will undoubtedly be well-equipped to meet the difficulties and maintain their position in the post-pandemic era. In addition, the economy residues in the commonly unfree classification, the control of government spending and debt has been a positive attainment. Further enhancements in judicial success and government veracity would make stronger the rule of law, and inaugural the banking sector to foreign rivalry would promote help the nation. Bangladesh economy has displayed strong resilience and posted strong GDP growth compared to regional and global peers. High remittance inflow and lower imports contributed to offset the lower exports. The performance of the capital market is a silver lining for the year otherwise characterized as gloomy economic climate with index reaching at an all-time high. As per ECNEC data the country’s Gross Domestic Product (GDP) growth rate is 7.94 percent and Per Capital Income (PCI) stands at US$ 2591 at the end of fiscal year 2020-2021. Bangladesh is a member of the D-8 Organization for Economic Cooperation, the South Asian Association for Regional Cooperation, the International Monetary Fund, the World Bank, the World Trade Organization and the Asian Infrastructure Investment Bank. The economy facades encounter of infrastructure tailbacks, rigid corruption, and youth redundancy. In addition to above ADB forecasted inflation rate is 5.8 per cent for 2022. According to the Financial Express (December, 28) household expenditures on essentials like food and utilities rose by an average of 10-13 per cent while income rose by 4-6 per cent from the 2020 level. Therefore, it appears that 64 GIB Annual Report 2021 Bangladesh like many other countries around the world will have to brace for inflationary surges in 2022 and beyond. According to the Economist Intelligence Unit (EIU), Bangladesh will achieve growth in private consumption by 6.2 per cent, government consumption by 6.8 per cent, gross fixed investment by 6.5 per cent, exports of goods and services by 18 per cent and imports of goods and services by 9.8 per cent in 2022. In order to fund the mega infrastructural projects of the country, like: Padma bridge and others, Bangladesh takes debt from national and international sources. These debt taking activities alternately contribute largely towards the growth of the GDP rate of the country when these projects are implemented. According to a recent report of the finance ministry, at the end of last fiscal year, Bangladesh's total debt to GDP ratio hit a 13-year-high of 38% - way below the 70% threshold recommended by IMF. By the ending of June 30, the total outstanding debt of Bangladesh came to the fore at BDT 11,44,297 Crore of which 36.7% belongs to the foreign sources. The last fiscal year observed the lowest total external debt of BDT 420,358 Crore which is on an equal footing with 13% of GDP indicating beneath the IMF's recommended threshold of 55%. In this way, the country turns out to be at low risk of debt distress notwithstanding the present development and financing conditions change in unfavorable ways but within predictable frontier. On the total debt the effective nominal interest rate is about 6% and the effective real interest rate is below 1%. In particular, the effective nominal interest rate compares effectually with the nominal GDP growth of more than 10%. For FY 2021-22, the government has set aside BDT 68,589 Crore for loan repayment which in comparison was BDT 14,646 Crore for FY 2009-10. However, between 2021 and 2041, our country is expected to achieve desirable improving objectives by 2030, resulting in a first-rate mid-income country. All of those goals are not necessarily hallucinations; on the other hand, we have firm belief in that significant capableness and foresight in pursuance of the highest chosen level of growth route in a valedictory manner by recognizing all available potentials in the face of resource constraints. The present Government is focused and committed to achieving its goals in the short and long term.
163. Collateral Against Investment GiB focuses on collateral-based investment to secure its quality of investment . At the end of December- 2021, Collateral coverage ratio was 82.92% which was 80.76% in 2020. (BDT in Crore) Particulars Total Investment Secured Investment with Collateral (FSV) Unsecured Investment Collateral Coverage Ratio 2020 9290.92 7502.91 1788.01 80.76% 2021 10708.70 8879.40 1829.29 82.92% Stress testing result for Investment Risk, Profit (Interest) rate, Foreign Exchange and Equity Risk Stress testing is an important risk management tool that provides an indication of how much capital might be needed to absorb losses in different stressed situations. A rigorous and comprehensive stress-testing program must be in place. It will measure the vulnerability or exposure to the impacts of exceptional, rare but potentially occurring events like – profit/interest rate changes, exchange rate fluctuations, changes in investment rating, events which influence liquidity, etc. Particulars 2020 2021 Minor Moderate Major Minor Moderate Major Increase in NPI (1.57) (4.05) (6.17) (1.57) (4.29) (6.79) Decrease in value of collateral taken against Investments (0.01) (0.01) (0.02) (0.15) (0.30) (0.60) 00 (0.66) (0.68) (0.19) (0.39) (0.72) Negative Shifting of NPI If some sectors become classified (0.83) (2.52) (4.25) (0.02) (0.07) (0.12) If some large borrowers become classified (1.57) (4.05) (6.17) (0.56) (1.68) (2.84) Combined investment risk result (after shock) (1.36) (5.38) (11.12) (1.77) (5.65) (11.95) CAR after combined investment shock 9.25% 5.23% (0.51)% 8.42% 4.53% (1.77)% 4.40 8.79 13.79 0.00 0.00 0.00 10.67% 10.73% 10.78% 10.18% 10.18% 10.18% 3.47 6.93 10.40 -0.02 -0.04 -0.07 10.57% 10.53% 10.49% 10.16% 10.14% 10.12% 2.70 5.40 10.81 (0.15) (0.31) (0.46) 10.58% 10.55% 10.49% 10.03% 9.88% 9.72% Profit (Interest) rate CAR after Profit (interest) rate shock Currency depreciation CAR after exchange rate shock Equity shock CAR after equity shock Investment Risk Shock GIB Annual Report 2021 161
164. Profit (Interest) Rate Shock Exchange Rate Shock Equity Shock 162 GIB Annual Report 2021
165. ACTION PLAN FOR FUTURE Global Islami Bank has determined its action plan for the year 2022 and future which are as follows : • To strengthen the Tier-1 capital according to the Capital plan of the Bank, GiB has planned to issue Initial Public Offering (IPO) within the year 2022. • Annual Risk Conference 2022 with the participation of all the Branch managers and Deputy branch managers will be arranged. • Risk Appetite statement 2022. • Ensuring timely preparation and submission of risk management Report. • Strong and positive risk management culture will be nurtured at every level of banking operation. • Monitoring and follow up the Key Risk indicators/ Risk Register for mitigating the risks on timely basis. • Increased Credit rating with percentage and quality grading to the investment portfolio. • Recovery of NPI and restricting new inclusion of classification through regular monitoring will be one of the top priorities of our bank. • Risk management strategies will be determined based on the risk profile. • Ascertaining implementation status of risk management policies and procedures. • Monitoring the risks under Basel-III accord. • The key risk issues will be properly and timely communicated to BRMC/Board. • Capital adequacy will be improved by taking effective measures considering its underlying factors. • Regulatory Compliances will be ensured at all level of the bank. • In parallel to the generic audit function, the necessity of adoption of Risk-Based audit will be conducted to validate that the internal control environment is functioning as planned. • Strengthened risk management infrastructure with a sufficiently robust data-base, data architecture and information technology will be established. • More emphasize on employee awareness programs on risk management issues. • Capacity building programs for the risk management officials. • Analyzing the national and global risk issues in line with bank’s exposure. Global Islami Bank (GIB) has tuned the existing risk management practices to align with global best practices. The risk management activities are running with the motto that, 2021 was the year of risk management awareness and 2022 will be the year of strengthening risk management structure. Being an active part of country’s banking industry, GiB always undertakes an active approach to risk management and remained consistent in forming a best-in-class capability. The core mottos of risk management practice at GiB are a solid understanding of the material risks of the bank and continuous formulation of effective strategies for active risk mitigation. GIB Annual Report 2021 163
166. REPORT ON NPI MANAGEMENT One of our core business priorities is to curb non-performing investments by maintaining quality assets . In this regard, GiB investment approval process has been framed to unveil and assess the unforeseen, inherent risk so that assets quality will not deteriorate in the long run. Proper monitoring and strong recovery drive from branch and corporate head office help in maintaining quality assets of GiB. From 2016, Special Asset Management Division was formed for recovery drives of bad investments. TOTAL CLASSIFIED INVESTMENTS Particulars NPI Amount [BDT in Million] NPI Ratio (in %) 2021 2020 2,386.10 1,884.54 2.23% 2.03% STRATEGIC PLANNING FOR NPI MANAGEMENT ● Strong Supervision, follow up and monitoring for the NPI accounts as well as rescheduling & restructured investments to be ensured both by on-site and off-site basis. ● Recovery team may be formed for NPI prone branch & weekly feedback to be taken by SAMD. ● Proper monitoring, follow up & supervision in pre-classification stage should be ensured by management and concerned division of the bank. ● Adequate staff in Legal Division and SAM Division and optimum utilization of manpower to be ensured. ● Appropriate Legal action to be initiated. ● Amicable settlement may be allowed in applicable sector. ● Eligible accounts to be written-off as per Guidelines of Bangladesh Bank. We are optimistic that by deploying our above mentioned strategies, we will be able to keep the classified investments of the bank within significant level at the end of forthcoming year. Be the most compliant banks in the industry, GIB is putting all out efforts to recover money from defaulted clients and stop fresh inclusion of Classified Investments. For success in that front, management is further streamlining its investment appraisal process, adept negotiability, proper and timely legal actions and subsequent monitoring and follow up drives of its employees. 164 GIB Annual Report 2021
167. DISCLOSURES ON RISK BASED CAPITAL (BASEL-III) [Market Discipline for the year ended December 31, 2021] BACKGROUND To strengthen global capital and liquidity rules with the goal of promoting a more resilient banking sector, the Basel Committee on Banking Supervision (BCBS) issued “Basel-III: A global regulatory framework for more resilient banks and banking systems” in December 2010. The objective of the reforms was to improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy. Through its reform package, BCBS also aims to improve risk management and governance as well as strengthen banks’ transparency and disclosures. Basel Committee’s comprehensive reform package also addressed the lessons of the economic and financial crisis, which began in 2007, for holding insufficient liquidity buffers and building up excessive on and off-balance sheet leverage that results in a gradual erosion of the level and quality of the capital base. To cope up with the international best practices and to make the bank’s capital shock absorbent, Bangladesh Bank issued ‘Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel-III) in December 2014 with the instructions to maintain the minimum capital requirement under pillar 1, additional capital requirement under pillar 2 and market disclosure requirement under pillar 3. Global Islami Bank (GIB) has put special attention to implement Basel-III inside the Bank. INTRODUCTION The objective of the reforms was to improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy. Through its reform package, BCBS also aims to improve risk management and governance as well as strengthen banks’ transparency and disclosures. It effectively exploits the new frontiers of risk management. It seeks to give impetus to the development of a sound risk management system which hopefully will promote a more efficient, equitable and prudent allocation of resources. Both internationally and domestically, the implementation of Basel-III has gripped a lot of interest. To cope with the international best practices and to make the bank’s capital more risk sensitive as well as more shock resilient, ‘Guidelines on Risk Based Capital Adequacy (RBCA) for Banks' have been introduced by Bangladesh Bank with an action plan for implementing a new Capital Adequacy framework in line with Basel-III. A Basel-III implementation Committee has been formed in Global Islami Bank (GIB) and the Bank has effectively implemented Basel-III and submit the quarterly report to Bangladesh bank on time. The disclosure framework (i.e. Pillar-III) is designed to increase the transparency of banker’s risk profile by requiring it to give details of its risk management and risk distributions. 1. Purpose ● To complement the Minimum Capital Requirement (MCR) under Pillar-1 and the Supervisory Review Process (SRP) under Pillar-2 of Risk Based Capital Adequacy guideline issued by Bangladesh Bank. ● To establish more transparent and more disciplined financial market so that stakeholders can assess the position of a bank regarding holding of assets. ● To identify the risk relating to the assets and capital adequacy to meet probable loss of assets. 2. Disclosure Policy GIB has a disclosure policy fully complied with Bangladesh bank’s requirement as noted below: ● Bank have a formal disclosure framework approved by the Board of Directors/ Chief Executive Officer (CEO) ● This disclosure doesn’t conflict with the requirements of Accounting Standards as set by Bangladesh Bank from time to time. GIB Annual Report 2021 165
168. ● For MCR (pillar-1), Bank uses specified approaches/methodologies to identify as well as minimize the risks it face and the resulting capital requirements. ● The disclosure should be subject to adequate validation. Since information in the annual financial statements would generally be audited, the additionally published with such statements must be consistent with audited statements. ● Bank decides which disclosures are relevant for it based on the materiality concept. ● Bank submits a copy of all required disclosures in both qualitative and quantitative form to DOS (Department off of-site supervision) of Bangladesh Bank and upload the same on the bank’s website page as titled “Disclosure on Risk Based Capital (Basel III)” within end march of each year. ● The Bank follows below approaches for calculating Risk Weighted Asset (RWA) as per Basel-III guidelines stated in BRPD Circular No.18 dated December 21, 2014 of Bangladesh Bank: a) Standardized Approach for Investment (credit) Risk b) Standardized approach for Market Risk and c) Basic Indicator Approach for Operational Risk. 2.1 Major highlights of Bangladesh Bank regulations: ● To maintain Capital to Risk-weighted Assets Ratio (CRAR) at a minimum of 10% of risk weighted assets as per BRPD Circular No.18 dated December 21, 2014 of Bangladesh Bank. ● To adopt the standardized approach for investment (credit) risk ● To adopt standardized approach for market risk and basic indicator approach for operational risk. ● To submit capital adequacy report to Bangladesh Bank on a quarterly basis. ● To adopt better risk management policy 2.2 Factors of Disclosure Framework: Bangladesh Bank set out the following components in the disclosures under Pillar-3 of Basel III regulations. The following components set out in tabular form are the disclosure requirements: 1) Scope of Application 2) Capital Structure 3) Capital Adequacy 4) Investment (credit)) Risk 5) Equities: Disclosures for Banking Book Positions 6) Profit Rate Risk in Banking Book (PRRBB) 7) Market Risk 8) Operational risk 9) Liquidity Ratio 10) Leverage Ratio 11) Remuneration 3. Consistency and Validation The quantitative disclosures on “Risk Based Capital (Basel III)” has been prepared on the basis of consolidated Audited Financial Statements of Global Islami Bank (GIB) for the year ended 31 December, 2021. It was prepared in accordance with the “First Schedule (Section 38)” of the banking companies act 1991 and amendment thereof 2007 and 2013, related International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) and related circulars/instructions issued by Bangladesh Bank from time to time. GIB fully complied with the requirements of laws and regulations from various regulatory bodies. So, information given in the “Quantitative disclosures” section can easily be verified and validated with the corresponding information presented in the audited consolidated financial statements- 2021. This disclosure is prepared once a year and is available at the website of the bank (www.globalislamibankbd.com). 166 GIB Annual Report 2021
169. 4 . Scope of Application Qualitative Disclosures a) The name of the top corporate entity in the group to which this guideline applies. Global Islami Bank (GIB). The Bank has no subsidiary company as on December 31, 2021. b) An outline of differences in the basis of consolidation for accounting and regulatory purposes, with a brief description of the entities within the group (a) that are fully consolidated; (b) that are given a deduction treatment; and (c) that are neither consolidated nor deducted (e.g. where the investment is risk-weighted). A brief description of the bank: Global Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with the registered Office at Saiham Tower, House # 34, Road # 136, Block # SE (C-1), Gulshan Model Town, Gulshan – 1, Dhaka – 1212, Bangladesh. The Bank commenced banking operation on 23 October 2013 by obtaining license from Bangladesh Bank on 05 August 2013 under section 32(1) of the Bank Company Act 1991(amendment up to 2013). Now the number of branches of the Bank is 90 (Ninety) and sub-branches 76 (Seventy-six) located at different areas of Dhaka, Chattogram, Khulna, Rajshahi, Bogura, Sylhet and Barishal as on 31 December 2021. Currently the Bank does not have any Off-shore Banking Unit (OBU) and subsidiary company. The principal activities of the Bank are to provide all kinds of banking services to its customers through its branches. The bank has applied Basel-III on “Solo” basis. c) Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group. Not applicable Quantitative Disclosures a) The aggregate amount of surplus capital of insurance subsidiaries (whether deducted or subjected to an alternative method) included in the capital of the consolidated group. Not applicable 5. Capital Structure Qualitative disclosure a) Summary information on the terms and conditions of the main features of all capital instruments, especially in the case of capital instruments eligible for inclusion in CET-1, Additional Tier-1 or Tier-2. The terms and conditions of the main features of all capital instruments have been segregated in terms of eligibility criteria set forth vide BRPD circular No. 18 dated 21 December 2014 and other relevant instructions given by Bangladesh Bank from time to time. Constituents of Capital and Minimum Capital Requirement: Components of Capital: For the purpose of calculating capital under capital adequacy framework, the capital of the bank has been classified into two tiers. The total regulatory capital will consist of sum of the following categories: 1) Tier-1 Capital (going-concern capital) a) Common Equity Tier-1 b) Additional Tier-1 GIB Annual Report 2021 167
170. 2 ) Tier-2 Capital (gone-concern capital) Common Equity Tier-1 capital (Going concern capital): Common Equity Tier-1 of Global Islami Bank (GIB) comprises of; a) Paid up capital, b) Statutory Reserve, c) General Reserve and d) Retained Earnings. The Bank does not have any additional Tier 1 capital. Tire-2 capital (Gone concern capital): Tier-2 capital, also called ‘gone-concern capital’, represents other elements which fall short of some of the characteristics of the core capital but contribute to the overall strength of a bank. Tire-2 capital comprises of General Provision (on Unclassified investments + Off Balance Sheet Exposure), Revaluation Reserves for securities Up to 50%. Total Regulatory Capital: Total Regulatory capital comprises Tier-1 and Tier-2 capital. Tier-1 capital Tier-2 capital Total Regulatory capital (Amount in Crore) Quantitative Disclosure Total Regulatory Capital: The amount of Common Equity Tier-1 capital, with separate disclosure of Common Equity Tier-1 (CET-1) capital: Paid up capital Statutory reserve General reserve Retained earnings Sub Total: Common Equity Tier-1 Capital Less: Regulatory adjustment: Deferred tax assets (DTA) (A) Common Equity Tier-1 Capital Amount of additional Tier-1 capital: Non-cumulative irredeemable preference shares Instruments issued by the banks that meet the qualifying criteria for AT1 Minority Interest (B) Total additional Tier-1 capital (C ) Total Common Equity Tier 1 capital (A+B) Tier-2 Capital: General Provision Revaluation Reserves for Securities up to 100% Subordinated debt Total Tier-2 Capital E) Regulatory Adjustments/Deductions from capital (D): Revaluation reserve for fixed assets ,securities & equity securities @100% (D) Total Tier-2 Capital Available Total Regulatory Capital (C+D) 168 GIB Annual Report 2021 515.42 161.62 99.04 776.08 4.74 771.34 0.00 0.00 0.00 0.00 771.34 112.37 112.37 112.37 883.71
203. (4) Nomination & Remuneration Committee (NRC): The formation of Nomination & Remuneration Committee (NRC) is to assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive. 3.4 EXECUTIVE COMMITTEE MEETING AND ATTENDANCE The Executive Committee is a committees of the Board of Directors and it had 5 (Five) members. The Committee conducts their responsibility as per Terms of Reference (ToR) determined by the Board of Directors of GiB. This Committee looked after different issues of the Bank. This Committee conducted 03 (Three) meeting in 2021 based on necessity. The attendance records of Executive Committee meetings in the year, 2021 are as follows: Sl. Name of Directors Status in the Committee Total No. of Meetings No of Meetings Attended 1 Mrs. Maimuna Khanam Chairperson 2 Dr. Mohammed Faruque Member 08 3 Ms. Shahana Ferdous Member 4 Mr. Mohammad Mostan Billah Adil Member 08 5 Mr. Wahidul Alam Seth Member 08 08 08 08 3.5 REPORT OF THE EXECUTIVE COMMITTEE OF BOARD OF DIRECTORS A report of the Executive Committee is attached with this GiB Annual Report separately in “Report” section. 3.6 AUDIT COMMITTEE MEETING AND ATTENDANCE The Audit Committee is a committees of the Board of Directors and had 05 (Five) members. The Committee is guided by the Terms of Reference (ToR) as set by the Board of Directors of the GiB in line with the direction of Bangladesh Bank and Bangladesh Securities & Exchange Commission. This Committee met regularly and looked after the audit related issues, discussed the Self-Assessment of Anti-Fraud Internal Control reports to Bangladesh Bank, yearly/half-yearly unaudited financial statements, Inspection Reports from Internal Control & Compliance Division (ICCD) of Head Office and also from Bangladesh Bank. The Chairman of the Audit Committee is chaired by an Independent Director; the Company Secretary acts as the Secretary of the Committee. The Committee conducted 04 (Four) meetings during the year, 2021. The attendance records of Audit Committee meetings in the year, 2021 are as follows: Sl. Name of Directors Status in the Committee Total No. of Meetings No of Meetings Attended 1 Mr. Moahmmed Kutub Uddowllah Chairman 2 Mr. S.A.M Salimullah Member 04 3 Mr. Arif Ahmed Member 4 Mr. Subrata Kumar Bhowmick FCA Member 03 5 Mr. Mohammad Shahjahan Meah Member 04 04 04 04 The member(s) who could not attend the meeting(s) were granted leave of absence by the Committee. 3.7 REPORT OF THE AUDIT COMMITTEE OF BOARD OF DIRECTORS A report of the Audit Committee is attached with this GiB Annual Report separately in “Report” section. 3.8 RISK MANAGEMENT COMMITTEE MEETING AND ATTENDANCE The Risk Management Committee is one of the committees of the Board of Directors. The Committee had 4 (Four) members. This Committee met regularly and looked after the overall risk related issues focusing on mitigating risks. The Committee conducted 04 (Four) meetings during the year, 2021. GIB Annual Report 2021 201
204. The attendance records of Risk Management Committee meetings in the year , 2021 are as follows: Sl. Name of Directors Status in the Committee Total No. of Meetings No of Meetings Attended 1 Mr. Arif Ahmed Chairman 2 Dr. Mohammed Faruque Member 04 3 Dr. Md. Nurul Aktar Chowdhury * Member 4 Mr. Bourhanul Hasan Chowdhury Member 04 5 Mr. Hasan Mansur ** Member 02 04 04 02 The member(s) who could not attend the meeting(s) were granted leave of absence by the Committee. * Retired in the 8th Annual General Meeting dated July 29, 2021. ** Appointed as Member in the 55th Board of Directors Meeting dated July 29, 2021. 3.9 REPORT OF THE RISK MANAGEMENT COMMITTEE OF BOARD OF DIRECTORS A report of the Risk Management Committee is attached with this GIB Annual Report separately in “Report” section. 3.10 NOMINATION & REMUNERATION COMMITTEE MEETING AND ATTENDANCE As per clause 6 of BSEC CGC-2018 it is required to form Nomination and Remuneration Committee (NRC) by all listed companies. But the formation of “Nomination & Remuneration Committee” has been barred by Bangladesh Bank vide its letter under reference no. BRPD(R-1_717/2021-5064, dated: June 16, 2021. Therefore, the Bank didn’t hold any NRC meeting. 3.11 REPORT OF THE NOMINATION & REMUNERATION COMMITTEE OF BOARD OF DIRECTORS No NRC meeting held during the reporting period as per Bangladesh Bank letter no. BRPD(R-1_717/2021-5064, dated: June 16, 2021. 4.0 INDEPENDENT DIRECTORS 4.1 TERMINOLOGY OF INDEPENDENT DIRECTORS Independent director means a director who does not have any related business, hold any managerial position or have any beneficial interest in financial institutions that may affect his/her independent decision. The Independent Directors are conversant in the field of banking, financial, regulatory and corporate laws; enjoy full freedom to carry out their assigned responsibilities and to make a meaningful contribution towards the business. According to Section 9 of Clause 15 of Bank Company Act 1991 (Amended up to 2018), 03 (three) Independent Directors were appointed in the Board. Again, as per BSEC guidelines on Corporate Governance Code at least one fifth of the total Directors should be from independent category. Therefore, in compliance with BSEC's Corporate Governance Code, GIB Board of Directors nominated 04 (four) independent directors, so that Board comprises of core skills considered important for diversification in the composition of the company's directors. Therefore, complying to the Bangladesh Bank’s regulations and BSEC CGC 2018, among 04 (four) Independent Directors, Audit Committee of the Board consisted 02 (two) Independent Directors as member, where 01 (One) is the Chairman of the same Committee. 4.2 QUALIFICATION OF INDEPENDENT DIRECTORS In compliance with Bangladesh Bank BRPD Circular No. 11 and Circular Letter No. 18 dated: October 27, 2013 and Clause 1.4 of BSEC's CG Code dated: June 03, 2018, the qualification and detail profile of Independent Directors is discussed in “GIB Board of Directors Profile” of Corporate Structure section. 4.3 ROLE OF INDEPENDENT DIRECTORS ● The Independent Directors can provide guidance for management's decisions and ensure a focus on the investors' interest over those of the management; ● The powers of Independent Directors are not merely persuasive. Statute bestows upon them the power of the vote which is much more effective than mere persuasive power of words; ● Independent Directors have a large role to play in the shaping of the board's agenda and decisions. They are in a position to direct the board's attention to matters which require detailed analysis and review; 202 GIB Annual Report 2021
205. ● Independent Directors can ensure that the tone and tenor of the board's discussions and decisions are in conformity with the stewardship function of the board and management; ● Independent Directors should also conduct periodic executive sessions without management being present so that they can discuss and debate issues in an open and frank manner; ● The actions of the independent Directors should demonstrate ethics, integrity, honesty and transparency; ● Executive compensation is another area where leadership of Independent Directors is sought; ● Independent Directors can play a very important part in the area of compliance and Corporate Governance. Corporate Governance will continue to be primary responsibility of independent Directors; ● Rules and regulations alone cannot ensure that companies are clean and honest. There should be an atmosphere of ethical conduct and a proper mind set to do the right thing; ● The Independent Directors have a great responsibility to create, preserve and strengthen the ethical and moral fabric of the company. ● Independent Directors should serve as independent watchdogs serving the interests of shareholders, and ● Shareholders rely on Independent Directors to protect their interests, address conflict of interest and to ensure that shareholders and the business is managed properly by management. 4.4 INDEPENDENCY OF INDEPENDENT DIRECTOR Every Independent Director (ID) shall have a declaration that he meets the criteria of independence mentioned in the Bangladesh Securities and Exchange Commission (BSEC) Notification No.BSEC/CMRRCD/2006-158/207/admin/80 dated: June 03, 2018. Contents of such declaration are stated below: ● ID didn’t hold any share of Global Islami Bank; ● ID is not a sponsor of the bank, or nominated director or shareholder of the bank or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds one percent (1%) or more shares of the total paid-up shares of the bank on the basis of family relationship and his or her family members also shall not hold above mentioned shares in the bank connected (on the basis of family relationship) with any of the bank's sponsors, directors or shareholder who holds one percent (1%) or more of the total paid-up shares of the bank; ● ID has not been an executive of the bank in immediately preceding 2 (two) financial years; ID does not have any other relationship, whether pecuniary or otherwise, with the bank or its subsidiary/associated companies; ● ID is not a member, or TREC holder, director or officer of any stock exchange; ID is not a shareholder, director or officer of any member or TREC holder of stock exchange or capital markets intermediary; ● ID is currently not and was not a partner or an executive during the preceding 3 (three) years of the bank's statutory audit firm or audit firm engaged in internal audit services or conducting special audit or professional certifying compliance of CG Code; ● ID is not an Independent Director in more than 5 (five) listed companies; ● ID has not been convicted by a court of competent jurisdiction as a defaulter in payment of any investment to a Bank or a Non-Bank Financial Institution (NBFI); and ● ID has not been convicted for a criminal offence involving moral turpitude. 4.5 INDEPENDENT DIRECTOR AS EFFECTIVE INSTRUMENT OF GOVERNANCE ● Helps to improve the standard of corporate governance; ● With better accountability to stakeholders; ● Transparency in the operational activities by adequate and meaningful disclosures; ● Induction of IDs is expected to qualitatively change the composition of the Board. 4.6 NON-EXECUTIVE DIRECTORS All Directors of the Board are non-executive Directors except the Managing Director. The Directors attend Board and committee’s meetings regularly and participate in the deliberation and discussion effectively. 4.7 INDEPENDENCE OF NON-EXECUTIVE DIRECTORS None of the Directors takes part in the day to day affairs of the Bank. They attend only the Board of Directors and/or Committees meetings to discuss the agenda reserved. GIB Annual Report 2021 203
206. 5 .0 CHAIRMAN 5.1 CODE OF CONDUCT OF CHAIRMAN The Chairman of the Board is elected by the Directors. The Chairman’s primary responsibility is to lead the Board, to ensure a common purpose and effectiveness as a group to uphold and promote high standards of integrity, probity and corporate governance. 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 does not participate in or interfere into the administrative or operational and routine affairs of the bank. The Chairman steers the Board to ensure that it operates effectively and fully discharges its legal and regulatory responsibility. 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 of 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 Managing Director. ● Provide overall leadership to the Board, supplying vision and imagination, working closely with the MD; ● Take a leading role in determining the composition and structure of the board which will involve regular assessment of the: - Size of the Board, - Interaction, harmony and involvement of the Directors. ● Go through the Board’s Agenda and reviewing plan for Board Meetings; ● Chair all the Board Meetings, directing debate towards consensus; ● Ensure the Board receives appropriate, accurate, timely and clear information; ● Chair the General Meetings and other Shareholders’ Meetings to foster effective dialogue with shareholders; ● Ensure that the views of shareholders are communicated to the Board as a whole. 5.2 ROLE AND RESPONSIBILITIES OF THE CHAIRMAN OF THE BOARD The Chairman runs the Board. The Chairman serves as the primary link between the Board and Management, and works with the Managing Director and Company Secretary to set the agenda for Board meetings. It is the Chairman’s responsibility to provide leadership to the Board and ensure that the Board works effectively and discharges its responsibilities as Directors of the Company. The role and responsibilities of the Chairman of the Board is defined and set by the Board. The Chairman’s primary role is to ensure that the Board is effective in its tasks of setting and implementing the Company’s direction and strategy. The Chairman is appointed by the Board. The main features of the role of the Chairman of GiB are as follows: ● ● ● ● ● ● ● ● ● Providing leadership to the Board; Taking responsibility for the Board’s composition and development; Ensuring proper information for the Board; Planning and conducting Board meetings effectively; Getting all directors involved in the Board’s work; Ensuring the Board’s focuses on its key tasks; Engaging the Board in assessing and improving its performance; Overseeing the induction and development of directors; Supporting the Managing Director. The Chairman of the Board shall be responsible for the management, the development and the effective performance of the Board of Directors, and provides leadership to the Board for all aspects of the Board’s work. The Chairman is responsible for leadership of the Board. BRPD Circular No. 11 dated 27 October 2013 issued by Bangladesh Bank and BSEC Corporate Governance Code issued by BSEC on June 03, 2018 has been taken into consideration to set out the responsibilities of the Chairman of the Board. In particular, he will: ● Ensure effective operation of the Board and its committees in conformity with the highest standards of corporate governance; ● Ensure effective communication with shareholders, host governments and other relevant constituencies and that the views of these groups are understood by the Board; 204 GIB Annual Report 2021
207. ● The Chairman does not personally possess the jurisdiction to apply policy making or executive authority and never participates in or interferes into the administrative or operational and routine affairs of the Bank; ● Set the agenda, style and tone of Board discussions to promote constructive debate and effective decision- making; ● Ensure that all Board committees are properly established, composed and operated; ● Support the Managing Director in the development of strategy and, more broadly, to support and advise the Managing Director; ● Take a leading role in determining the composition and structure of the Board which will involve regular assessment of the: - Size of The Board, - Interaction, harmony and involvement of the Directors. ● Establish a harmonious and open relationship with the Managing Director; ● Ensure that Board committees are properly structured and all corporate governance matters are fully addressed; and ● Encourage active engagement by all the members of the Board; ● Chair all Board Meetings, directing debate towards consensus; ● Ensure the Board receives appropriate, accurate, timely and clear information; ● Chair the AGM and other Shareholders’ Meetings to foster effective dialogue with Shareholders; ● Ensure that the views of shareholders are communicated to the Board as a whole. 5.3 DISTINCT ROLE OF CHAIRMAN AND MANAGING DIRECTOR In compliance with Bangladesh Bank BRPD Circular No. 11 and Circular Letter No. 18 dated October 27, 2013 and Condition 1.4 of BSEC Corporate Governance Code (CGC) dated 03 June 2018 we report that the functional responsibilities of the Chairman of the Board and Managing Director are kept separate and independent of each other. The Chairman of the Board approves the agenda for the Board meetings, assisted by the Managing Director. Regular agenda items include approving investments beyond MD’s authority and aspects of the Bank’s corporate strategy, financial performance, core risks and investment policy, corporate governance, CSR and organizational structure, human resources policy, customer and services strategies, procurement policy etc. On the other hand, Managing Director, being the Head of Management Team of the Bank, is accountable to the Board and its Committees to run and manage the Bank in accordance with the prescribed policies, principles and strategies established by the Board and rules, regulations and guidelines from the Central Bank, BSEC and other regulatory authorities. In the absence of the Chairperson of the Board, the remaining other members of the Board elect one of them from non-executive directors Chairperson for that particular Board meeting. The reason of absence of the regular Chairperson is being duly recorded in the minutes. 6.0 MANAGEMENT 6.1 CODE OF CONDUCT OF MANAGING DIRECTOR As per BRPD Circular no. 18 dated: October 27, 2013 of Bangladesh Bank, Managing Director shall discharge the responsibilities and affect the authorities. The Code of Conducts of Managing Director includes but not limited to the following: In terms of the financial, business and administrative authorities vested upon him by the board, the Managing Director discharges his own responsibilities. He remains accountable for achievement of financial and other business targets by means of business plan, efficient implementation thereof and prudent administrative and financial management. The Managing Director ensures compliance of the Bank Company Act, 1991 and other relevant laws and regulations in discharging routine functions of the bank. At the time of presenting any memorandum in the Board Meeting or Board Committee Meeting, the Managing Director informs, if there is any deviation from the Bank Company Act, 1991 and other relevant laws and regulations. The Managing Director reports to Bangladesh Bank about any violation of the Bank Company Act, 1991 or of other laws/regulations. The recruitment and promotion of all staff of the bank except those in the two tiers below him rests on the Managing Director. He acts in such cases in accordance with the approved service rule on the basis of the GIB Annual Report 2021 205
208. human resources policy and sanctioned strength of employees as approved by the board . The authority relating to transfer of and disciplinary measures against the staff, except those at two tiers below the Managing Director, rests on him, which he applies in accordance with the approved service rules. Besides, under the purview of the human resources policy as approved by the board, he nominates officers for training etc. 6.2 ROLE AND RESPONSIBILITIES OF MANAGING DIRECTOR The Managing Director is responsible for overall activities of the business and for formulating and implementing Board strategy and policy. He has the control of the Bank on day to day basis and he is accountable to the Board for its financial and operational performances. It is pertinent to mention here that the Managing Director of GiB has been appointed and performed maintaining all regulations and guidelines i.e. Company Act 1994, Bank Companies Act 1991 (amended up to 2013), Bangladesh Bank’s rules and regulations, circulars, and other regulatory bodies. The Managing Director acts as a direct liaison between the Board and management of the Company and communicates to the Board on behalf of the management. The Managing Director also communicates on behalf of the Company to shareholders, employees, Government authorities, other stakeholders and the public (as when and where required). The Managing Director in his capacities will also carry out the following activities: ● Develop strategy proposals for recommendation to the Board and ensure that agreed strategies are reflected in the business; ● Develop annual plans, consistent with agreed strategies, for presentation to the Board for support; ● Plan human resourcing to ensure that the Company has the capabilities and resources required to achieve its plans; ● Develop an organizational structure and establish processes and systems to ensure the efficient organization of resources; ● Be responsible to the Board for the performance of the business consistent with agreed plans, strategies and policies; ● Lead the executive team, including the development of performance contracts and appraisals; ● Ensure that financial result, business strategies and, where appropriate, targets and milestones are communicated to the investment community; ● Develop and promote effective communication with shareholders and other relevant constituencies; ● Ensure that business performance is consistent with the Business Principles; ● Ensure that robust management succession and management development plans are in place; ● Develop processes and structures to ensure that capital investment proposals are reviewed thoroughly, that associated risks are identified and appropriate steps taken to manage the risks; ● Develop and maintain an effective framework of internal controls over risk in relation to all business activities including the Group’s trading activities; ● Ensure that the flow of information to the Board is accurate, timely and clear. 6.3 EVALUATION OF MANAGING DIRECTOR BY THE BOARD There is one of Strategic Priorities & Action Plans for the evaluation of the Managing Director and Management on an annual basis and it is revised from time to time by the Board. However, Better performance is always expected from the Managing Director of GiB. Performance of the Managing Director is assessed based on certain Key Performance Indicators (KPIs). A few mentionable KPIs like meet annual budgetary targets approved by the Board, maximize shareholder value measured through ROA, ROI, ROE, EPS, sustainable growth in investment and revenue earning, gradual reduction of the NPI ratio and improvement in the scores for CAMELS rating are expected by the Board of Directors from Managing Director of the Bank. 6.4 MANAGING DIRECTOR REMUNERATION The remuneration package of the Managing Director is determined by the Board and is subsequently approved by the Bangladesh Bank. The Managing Director has been appointed on a contractual basis and his remuneration is also disclosed separately in the financial statements of the Bank. 206 GIB Annual Report 2021
209. 6 .5 MANAGEMENT AND ITS COMMITTEES Management team of GiB is headed by the Managing Director. Several management committees have been formed to handle the Banking operation and identify and manage the risk associated with the businesses. The following are the Key Management Committees: ● ● ● ● ● ● ● ● ● ● Asset Liability Committee; Investment Committee; AML Committee; Special Recovery Committee; Risk Management Unit; Sustainable Finance Committee; Central Compliance Committee; National Integrity Strategy Committee; Procurement Committee; Basel Implementation Committee and so on. 6.6 DUTIES OF MD/ CEO AND CFO IN RELATION TO FINANCIALS The financial statements are prepared in compliance with the Bangladesh Financial Reporting Standards (BFRS), the Bank Companies Act 1991 (Amendment up to 2018), the rules and regulations issued by the Bangladesh Bank, the Company Act 1994, the rules/ regulations/ guidelines/ code issued by the BSEC and other applicable laws and regulations. The accounting policies used in preparation of the financial statements are appropriate and are consistently applied. However, as required under BSEC's Corporate Governance Code, the Directors further confirm that the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) have certified to the Board the following: They have reviewed the Financial Statements and that these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; They have reviewed the financial statements and believe that these statements together present a true and fair view of the Bank's affairs and are in compliance with the existing accounting standards and applicable laws; and There are, to the best of their knowledge and belief, no transactions entered into by the Bank during the year which are fraudulent, illegal or in violation of the Bank's Code of Conduct. The Certification of the Managing Director and CFO is disclosed in this GiB Annual Report. In addition to those, the bank has taken proper and sufficient measures to develop a system of internal control and accounting records, for safeguarding assets and for preventing and detecting frauds as well as other irregularities, which is reviewed, evaluated and updated on an ongoing basis. Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the bank were consistently followed. 6.7 COMPANY SECRETARY (CS), CHIEF FINANCIAL OFFICER (CFO), HEAD OF IAC AND CHIEF IT OFFICER (CITO) Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit and Compliance (HIAC) are being appointed as per the policy of the Bank, BSEC CGC 2018 and other regulatory laws and guidelines. In addition to this, to appoint Chief Financial Officer (CFO) and Chief Information Technology Officer (CITO) instruction of Bangladesh Bank under BRPD circular letter no. 03/2018, dated March 25, 2018 also followed by the Bank. They are well conversant in the field of financial, regulatory and corporate laws to carry out their assigned responsibilities. The Board of Directors of GiB clearly defined and approved the respective roles, responsibilities and duties of CS, CFO and HIAC. 6.8 ROLES AND RESPONSIBILITIES OF COMPANY SECRETARY (CS) To ensure effective assimilation and timely flow of information required by the Board of Directors and to maintain necessary liaison with internal organs as well as external agencies, the Board has appointed a Company Secretary. The Corporate Governance Code issued by the Bangladesh Securities and Exchange Commission (BSEC), also require a listed Company to appoint Company Secretary. In pursuance of the same, the Board of Directors has appointed the Company Secretary and defined his roles & responsibilities. GIB Annual Report 2021 207
210. In Global Islami Bank , among other functions, the Company Secretary: ● To ensure compliance with laws prevalent and applicable on the company and report to the Board of Directors about the same; ● To facilitate approval and conduct of Board and its Committee meetings and general meetings of shareholders; ● To ensure compliance with the applicable secretarial standards (as when and where required); ● To represent the company before various regulatory authorities; ● To ensure that the company engages in good corporate governance practices; ● Any other function that the Management of the bank may prescribe within rightful purview of the law of the land. 6.9 COMMUNICATION TO SHAREHOLDERS AND STAKEHOLDERS The Company Secretary is responsible for effective communication with shareholders and other stakeholders of the Bank. Shareholders and other stakeholders may contact the share department during office hours for any sort of information and queries. GiB provides updated information on its website from time to time for the shareholders and other stakeholders of the Bank. The Bank communicated method to its shareholders has been included in the “Grievance Redress of Stakeholders” under “Shareholder Information” section of this GiB Annual Report. 6.10 ROLES AND RESPONSIBILITIES OF CHIEF FINANCIAL OFFICER (CFO) A Chief Financial Officer (CFO) is the senior executive responsible for managing the financial actions of a company. CFO oversee all the financial operations of the organization, including accounting, financial reporting, tax, business control. CFO manage all aspects of financial matters and decision making. Basically, the Chief Financial Officer directs a company’s financial goals, objectives and budgets. He also advises the Board of Directors on the kind of actions to be adopted in upholding the high levels of financial control and reporting. Key responsibility and overall financial health of the Bank is separately disclosed in “Performance Analysis by the CFO” under “Report” section of this GiB Annual Report. 6.11 BSEC COMPLIANCE FOR CEO AND CFO’S STATEMENTS OF RESPONSIBILITIES Chief Executive Officers and Chief Financial Officer Statement in line with BSEC notification has been enclosed in the “Corporate Governance Reporting” section of this GiB Annual Report. 6.12 ROLES AND RESPONSIBILITIES OF HEAD OF INTERNAL AUDIT & CONTROL (HIAC) The Head of Internal Audit and Compliance (HIAC) is responsible for Bank’s strategic risk-based internal audit plan and managing the internal audit function in accordance with Bank’s internal audit charter. Responsibilities include providing reasonable assurance on the effectiveness of the organization’s risk management and the strength of internal controls. The position assesses organization wide compliance with Bank’s internal policies and procedures, laws and regulations, contractual terms and conditions. In compliance to the Bangladesh Bank “Guidelines on Internal Control & Compliance in Banks (Updated upto September, 2016) “the Head of Internal Audit reports directly to the Audit Committee of Bank’s Board of Directors. 6.13 ATTENDANCE OF CEO, CFO, CS & HIAC IN BOARD MEETING In compliance to the Clause 3.2 of BSEC CGC 2018 the Chief Executive Officer, Company Secretary, Chief Financial Officer and Head of IAC of the Bank attended the meetings of the Board of Directors. It is also provided that they are not attending the meeting which involve consideration of an agenda item relating to their personal matters. In addition, they are not entitled for any remuneration/ fees for attending such meetings of the Board of Directors. 6.14 SHAREHOLDING OF MD, CFO, CS, HEAD OF IAC AND TOP FIVE SALARIED EXECUTIVES Though the bank is a public limited company, it is yet to be listed with the stock exchanges as such no one except the Directors and the shareholders hold the any shares of the company. The detail shareholding structure and positions are provided in the shareholders’ information part. 6.15 REMUNERATION OF SENIOR MANAGEMENT AND EMPLOYEES All employees including the Senior Management employees are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank's performance and affordability. The remuneration also stresses on ensuring internal and external pay equity. 6.16 CODE OF CONDUCT FOR GIB EMPLOYEES For eminence corporate culture, all the employees should believe in same Code of Conduct. GiB has a 208 GIB Annual Report 2021
211. standard Code of Conduct for its employees (guided by Bangladesh Bank) which are also maintained by the employees. By any means, no employee will play a role detrimental to the interest of the business, society and the country as a whole as set in the Code of Conduct. For more on Code of Conduct, a separate disclosure as “GIB Code of Conduct” has been made in the “Corporate Ethos” section of this GIB Annual Report. 6.17 HUMAN RESOURCE CAPITAL GIB always believes any expenditure in training, development, health and support is an investment, not just an expense. Being a value driven organization, GIB considers its employees as the most precious capital that play the vital role in materializing the mission, vision, goals and objectives of the bank. GiB Human Resource policy serves as a baseline with clarity on the philosophy and principles for HR Management and Development in the bank. It incorporates key principles and philosophies that support GIB’s Mission and Vision. The Human Resource Policy consists of a set of policies and guidelines that governs all aspects of human resource management, from talent acquisition and development, performance and consequence management, code of conduct to cessation of employment. A Disciplinary Policy is also established to provide for a structure where disciplinary matters are dealt with fairly, consistently and in line with the prevailing labor laws and employment regulations. A Report on Human Resource related activities are included in the “Corporate Governance Reporting” section of this GIB Annual Report. 6.18 CONFLICT OF INTEREST The Code of Ethics and Business Conduct require all employees to avoid situations where their personal interests conflict, or may appear to conflict with those of the Bank. Employees are advised to take particular care when they are responsible for dealing with customers, business associates, agents on behalf of the Bank. Any failure to disclose a conflict of interest leads to a disciplinary action. 6.19 WHISTLE BLOWER POLICY The purpose of the Whistle Blowing Policy is to create an environment at GIB where honest, dedicated, and loyal employees are encouraged and feel confident to reveal and report any fraudulent, immoral, unethical, or malicious activity or conduct of employees that, in their opinion, may cause financial or reputational loss to the Bank, without fear of retaliation, subsequent discrimination, or being disadvantaged in any way. The Bank has formulated a Whistle Blower Policy. The policy of the Bank provides assurance to the Whistleblowers about secrecy and protection of their legitimate personal interests. Is also provides incentives for the Whistleblowers on reporting of suspicious activities. It is the Bank’s policy to support and encourage its honest, dedicated and loyal employees to report and disclose fraudulent, immoral, unethical or malicious activities and conduct investigation on such reports. The Corporate Whistle Blowing Policy assures that all reports under this policy would remain strictly confidential and that the Bank is also committed to address reports (if any) that alleges acts of interference, revenge, retaliation, threats, against the Whistleblowers. 7.0 COMPLIANCES 7.1 AUDIT BY THE BANGLADESH BANK Bangladesh Bank conducts comprehensive inspection on the Bank every year. The reports are reviewed by the Board and its Audit Committee. The Bank gives utmost importance to the inspection report and actions are taken regarding the inadequacies or lapses mentioned in the report. 7.2 APPOINTMENT OF THE EXTERNAL AUDITORS Section 210 of the Companies Act, 1994 gives authority to the shareholders to fix the appointment of the auditor and its remuneration. Hence, the board recommended to re-appoint Hoda Vasi Chowdhury & Co., Chartered Accountants as the external auditors of the Bank for the year, 2021 to conduct audit and hold office till conclusion of the 9th Annual General Meeting (AGM). The above auditor was re-appointed for the 3rd time. As Hoda Vasi Chowdhury & Co., Chartered Accountants is not eligible for re-appointment, a new external auditor will be appointed for the year, 2022 to conduct audit and hold office as such till conclusion of the 10th Annual General Meeting of the bank. Complying with Condition 7.1 of BSEC CGC we declare that the statutory external auditor only involved in statutory audit and was not engaged in any of following services: ● Appraisal or valuation services or fairness opinions; ● Financial information system design and implementation; GIB Annual Report 2021 209
212. ● ● ● ● ● Book keeping or other services related to accounting records or financial statements; Broker-dealer service; Actuarial services; Internal audit services; Any other service that creates conflict of interest. 7.3 RECOMMENDATION FOR APPOINTMENT OF EXTERNAL AUDITORS The Board and Audit Committee review the performance of the external auditors and their audit reports and examine whether the findings and recommendations made by the external auditors are duly considered by the management or not. The Audit Committee make recommendations to the board regarding the appointment /reappointment of the external auditor’s subject to approval of Bangladesh Bank. 7.4 APPOINTMENT OF THE COMPLIANCE AUDITORS BSEC Corporate Governance Code-2018 clause 9 stated that company in its Annual General Meeting shall appoint a Compliance Auditor for the purpose of compliance of the Corporate Governance Code, who shall be a Chartered Secretary (CS) or Chartered Accountant (CA) or Cost & Management Accountant (CMA). The Auditor will provide a certificate on compliance of this Corporate Governance. Hence, the board recommended to appoint Rahman Mostafa Alam and Co., Chartered Accountants as the Compliance Auditor of the Bank for the year, 2021 to provide Compliance Certificate. 7.5 RECOMMENDATION FOR APPOINTMENT OF COMPLIANCE AUDITORS The Board of Directors review the performance of the Compliance Auditors and their Compliance Certificate and examine whether the findings and recommendations made by the Compliance Auditors are duly considered by the management or not. 7.6 REVIEW OF INTERNAL CONTROL & COMPLIANCE SYSTEM The Bank stresses on both the design and operation effectiveness of its internal control system to protect the bank from possible loss that may arise from either intentional/ unintentional errors or from fraudulent activities. The Board of Directors retains the ultimate responsibility for its operations, through has delegated to the Audit Committee for the review of adequacy and effectiveness of the system of internal controls. Bank has a separate Division for Internal Audit and Compliance. This division operates independently and has given responsibilities by the Board in line with the Bangladesh Bank guidelines. Under Internal Audit and Compliance Division, there are three major units: (1) Audit & Inspection Unit (2) Monitoring Unit and (3) Compliance Unit. The Internal Audit & Compliance Division of the Bank is independent and able to carry out its assignments with objectivity and impartiality. The division makes a year wise risk based audit plan to carry out comprehensive audits and inspections on the banking operations in various divisions of head office and branches in order to ensure that internal control practice and procedures are in place and complied with. The Audit Committee of the Board subsequently reviews all audit/inspections reports and authorizes suggested corrective measures. The Compliance Unit of the division works as the point of contact when any regulatory inspection is carried out and ensures that corrective measures are taken and the appropriate responses are made on a timely fashion. If the regulatory authority identifies any major lapses then it notifies to the senior management and/or to the Audit Committee of the Board of Directors of the Bank. The Monitoring Unit of the division monitors and follow-up the ethical standards through Departmental Control Function Check List (DCFCL), Investment Documentation Check List (IDCL) and Quarterly Operation Reports. On receipt of the compliance report the Monitoring Unit carefully checks the compliance status with the help of systems. It also regularly monitors branch MIS (e.g. Classification, Excess Over Limit, Overdue facilities, KYC, TP etc.) online from the systems and notifies deficiencies, if any, to the auditee management as well as to the top management and/or the Audit Committee for regularization/rectification. 7.7 RISK MANAGEMENT The Risk Management Division (RMD) of GIB is responsible for management, integration and monitoring of all risks within the risk appetite set by the Risk Management Committee (RMC). The Risk Management Committee (RMC) of the Board reviews and monitors the overall Risk Management system of the Bank and updates to the Board from time to time. The Risk Management Committee (RMC) of the Board reviews and monitors the overall risk management system of the Bank and updates the Board from time to time. The roles and responsibilities and major areas of focus of RMC have been presented in the Risk Management Report of this annual report. 210 GIB Annual Report 2021
213. a ) Investment Risk Management: The investment related risks of GIB are primarily governed by the Investment Risk Management Guidelines approved by the Board of Directors. The Bank measures, monitors and manages investment risks at an individual borrower level and the portfolio level. The Bank has pursued a strategy of developing a diversified portfolio and investing in better-rated corporate customers. b) Foreign Exchange Risk Management: Major foreign exchange related transactions are carried out on behalf of the client thus the bank has minimal exposure to the captioned risk. It is mentionable that the bank does not involve in any speculative transactions. The treasury division independently conducts the transactions and the back office is responsible for verifying the deal and passes necessary accounting entries. c) Asset Liability Risk Management: ALCO reviews liquidity requirements of the Bank, maturity of assets and liabilities, deposit and investment pricing strategy and the liquidity contingency plan. The Asset Liability Committee also monitors balance sheet risk and informs the same to the Board of Directors from time to time. d) Money Laundering Risk Management: For mitigating the risks, the Bank has nominated a Chief Anti Money Laundering Compliance Officer (CAMLCO) at Corporate Head Office and Branch Anti Money Laundering Compliance Officer (BAMLCO) at branches, who independently review the accounting transactions to locate and verify suspicious transactions. Know Your Customer (KYC) policy and Transaction Profile (TP) format have been introduced. The regulatory requirements are being complied with and the guidelines in respect of KYC are being followed for the opening of new accounts. e) Internal Control & Compliance Risk Management: The Bank has a well-designed policy on Internal Control & Compliance Risk Management by which Internal Control & Compliance risks are identified and managed through all levels of the organization. The Board and management are accountable for the bank’s internal control & compliance, the compliance function has an important role in supporting corporate values, policies and processes that help ensure that the bank acts responsibly and fulfills all applicable obligations. f) ICT Risk Management: The Bank’s Information Technology policy ensures that the information technology related measures are aligned with the business strategy of the Bank. The Chief IT Officer periodically reviews current IT projects, major IT incidents, technology risk indicators and the state of regulatory compliance. The IT Security Unit continually assesses, monitors and manages IT-related risks in accordance with the Bank’s risk management policy. g) Liquidity Risk Management: GIB not only sets limit on major liquidity risk management indicators but also has an early warning system to identify a potential liquidity risk arising in the financial market. Besides, potential liquidity issues are constantly monitored through the application of various liquidity stress scenarios, statistical analysis and capital amount simulations. Contingency plans are also in place for various types of liquidity crises. GIB Annual Report 2021 211
214. 7 .8 FINANCIAL, STATUTORY AND REGULATORY REPORTING AND DISCLOSURE The primary regulator of the GIB is Bangladesh Bank and other major regulator includes Bangladesh Securities & Exchange Commission (BSEC), Registrar of Joint Stock Companies and Firms (RJSC) and National Board of Revenue (NBR) etc. GiB has been following related guidelines on submission of financial statements and other statutory reports ensuring timeliness, completeness, transparency, accountability and accuracy. In the preparation of quarterly, half-yearly and annual financial statements, the Bank has complied with the requirements of the Companies Act 1994, Bank Company Act 1991 (amended up to 2018) and rules & regulations of Bangladesh Bank, BSEC and other applicable. Status of various compliances is given hereafter. 7.9 GOING CONCERN ESTIMATION Reviewing the bank’s present and potential business growth, annual budget, performance, liquidity position, plans and financing arrangement, the Directors are satisfied that the Bank has adequate resources to continue to operate in the foreseeable future and confirm that there is no material issue threating to the going concern of the Bank. The Bank has neither intention nor the need to liquidate or curtail materially the scale of its operations. Therefore, there are no significant doubts upon the Bank’s ability to continue as a going concern. A separate report highlighting key financials and operations indicating to continuity as a going concern has been separately attached in the “Risk Management Report” section of this GiB Annual Report. 7.10 RELATED PARTY TRANSACTION The Bank in its ordinary course of business accomplished financial transactions with some entities or persons that fail within the definition of ‘Related Party’ as contained in IAS 24 (Related Party Disclosures) and as defined in Bangladesh Bank BRPD circular 14, 2013. Disclosure of all related party transactions, including basis for such transactions, has been provided in Note to the financial statements on “GiB Financial Reporting” section. 7.11 INSIDER TRADING Individuals with access to nonpublic information regarding a public company's shares or other securities (such as bonds or stock options) engage in insider trading. The reason insider trading is illegal is because it gives the insider an unfair advantage in the market, puts the interests of the insider above those to whom he or she owes a fiduciary duty, and allows an insider to artificially influence the value of a company’s stocks. The Board member shall also not pass such information to someone who buy or sell securities. Accordingly, GiB’s Board designed the Code of Conduct for all the members of the Board and abide by the code of integrity and good governance in line with the National Integrity Strategy of Bangladesh. 7.12 ETHICS AND COMPLIANCE As a islami shari’ah compliant bank, the foundation and growth of GIB rest on ethics and compliance. Ethics are the decisions, choices, and actions (behaviors) we make that reflect and enact our values. Compliance is conforming or adapting one’s actions to another’s wishes, to a rule, or a necessity. The terms “ethical” and “compliance” are often used interchangeably when dealing with businesses that are doing the right thing. For more on Ethics and Compliance, a separate disclosure as “GiB Business Ethics” has been made in the “Corporate Ethos” section of this GiB Annual Report. 7.13 ENVIRONMENTAL AND SOCIAL OBLIGATIONS We believe that every small “GREEN” step taken today would go a long way in building a greener future. As an environment responsive Bank we have Go Green approach. A detailed description regarding environmental and social obligation has been presented in “Sustainability Report”, Report on Green Banking” and “Report on CSR” under “Sustainability Reporting” sections of this GIB Annual Report. 7.14 LENDING TO DIRECTORS, CONTROLLING SHAREHOLDERS OR EMPLOYEES No lending has been made to the Directors/Controlling Shareholders of the Bank without approval of the Regulators/ General Members. However, the employees of the bank are entitled to House Building Investment, Executive Investment and Car Investment etc. at arm's length basis. 7.15 CONFIDENTIAL INFORMATION GIB is committed to making information about its operation available to the public. Though there are some price sensitive information are related with the operation of the Bank. Until an announcement in relation to 212 GIB Annual Report 2021
215. such information is made , directors and all employees of the Bank must ensure that such information is kept strictly confidential. 7.16 STRESS TESTING A bank's stress test is an analysis conducted under hypothetical scenarios (minor shock, moderate shock and major shock) designed to determine whether a bank has enough capital to withstand a negative economic shock. GIB has a rigorous and comprehensive quarterly stress-testing program in place. It measures the vulnerability or exposure to the impacts of exceptional, rare but potentially occurring events like profit/interest rate changes, exchange rate fluctuations, changes in investment rating, events which influence liquidity, etc. 7.17 MANAGEMENT’S DISCUSSION & ANALYSIS A more detailed discussion and analysis of the financials, as delivered by the CEO & Managing Director, is appended on “GIB Corporate Information” section. In addition to this a detail Management Report & Analysis has been described in “Performance Reporting” section. 7.18 CERTIFICATE AND COMPLIANCE CHECKLIST Certificate on compliance of Corporate Governance Certificate from professional accountant/ chartered secretary on compliance of corporate governance is exhibited in the “Corporate Governance Reporting” section of this GiB Annual Report. 7.19 STATUS OF COMPLIANCE IN LINE WITH BSEC REGULATION Status of compliance with the conditions imposed by the Commission’s Notification No.BSEC/CMRRCD/2006-158/207/Admin/80, dated: June 03, 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969: (Report under Condition No. 7.00) is exhibited in a separate segment in the “Corporate Governance Reporting” section of this GiB Annual Report. GIB Annual Report 2021 213
216. BANGLADESH BANK CHECKLIST FOR CG COMPLIANCE REPORT To ensure good governance i .e. corporate governance in bank management, Bangladesh Bank (BB) issued three circulars in 2013 covering three broad areas as follows: a) BRPD Circular No.11 dated 27 October 2013: Formation and responsibilities of Board of Directors. b) BRPD Circular No.18 dated 27 October 2013: Appointment and responsibilities of CEO. c) BRPD Circular No.19 dated 27 October 2013: Contractual appointment of Advisor and Consultant. The summary of the BB guidelines and GiB compliance thereto are presented below: a) BRPD CIRCULAR ON FORMATION AND RESPONSIBILITIES OF BOARD OF DIRECTORS Sl. Particulars 1 Formation of Board of Directors: Prior approval from BB to be taken before appointment of new Directors, as well as dismissal, termination or removal of any Director from the post. Qualification and competency of Directors, maximum number of Directors of the Board, appointment of independent Directors, appointment of maximum 04 (four) members from a family as Director. 1.1 Compliance Status Complied. As per Clause 15 and Sub- Clause 9 of Bank Company Act 1991 (amended till 2018), appointment of Independent Director was complied with the legislation of the law. Appointment of New Directors: Every bank company, other than specialized banks, at the time of taking prior approval from BB while appointing Directors should furnish the following information along with the application: a. b. c. d. Personal information of the nominated person Declaration of nominated person Declaration for confidentiality by the nominated person In case of independent director, the approval letter from Bangladesh Securities & Exchange Commission (BSEC) e. CIB report of the nominated person f. Updated list of directors Complied Complied Complied Complied Complied Complied 1.2 Vacancy of office of a Director (a) The office of a Director shall be vacated as per the provision of Section 108(1) of Companies Act 1994. Besides, provision of Section 17 of Bank No Such Case Occurred Company Act 1991, providing false declaration at the time of appointment or observing shortfall of qualification as a Director. (b) If the office of a Director is vacated as per Section 17 of Bank Company Act 1991, s/he will not be eligible to become Director of that bank company or any other bank company or financial institutions within one year from the No Such Case Occurred date of repayment of the total dues to the bank. The dues can be adjusted with the shares held by the Director in that bank company and he cannot transfer his shares of that bank company until he repays his all the liabilities of that bank company or financial institutions. (c) BB can remove Directors or Chairman of a bank company other than the state-owned banks for doing any activity that is detrimental to the interest of the banks depositors or against the public interest under Section 46 and No such case Occurred can also dissolve the Board of a bank company under Section 47 of Bank Company Act 1991. 1.3 Removal of Directors from office: With the prior approval of Bangladesh Bank, any Director of a bank company other than specialized banks can be removed from his office for the reasons specified in its Articles of Association. The reason and grounds of No such case Occurred the dismissal/removal and the copy of such decision taken by Board of Directors and a list of Directors shall be submitted to Bangladesh Bank. Such removal shall be effective from the date of Bangladesh Bank’s approval. 214 GIB Annual Report 2021
217. 1 .4 Appointment of Alternate Director: 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 No such director in GIB Bangladesh by fulfilling following instructions: (a) Bank has to collect and properly maintain the documentary evidences relating to departure and arrival of the original director while traveling Not Applicable abroad. If there is any exception, the CEO should immediately inform it to Bangladesh Bank. (b) The copy of the decision of the BoD regarding appointment of alternate director, with original director’s probable returning date from abroad should Not Applicable be sent to BB within 7 days of taking the decision and the director’s arrival date must be intimated to BB immediately after his/her return. (c) Any loan defaulter or any person who is not eligible to become a director as per any relevant guiding rules & regulation will not be appointed as an Not Applicable alternate director. (d) As an alternate director is appointed temporarily; therefore, he/she will not Not Applicable be included in any kind of committee constituted by the BoD. (e) The alternate director or his/her affiliated organization will not get any kind of loan facilities from the bank. In case of previous loan, enhancement of limit or extension of time period or any kind exemption or interest waiver will Not Applicable not be allowed. Moreover, all restriction applicable to directors according to rules & regulations will also be applicable to the alternate director. 2. Director from Depositors: As per Bank Company Act, 1991 (amended till 2018) appointment of Directors from depositors is no longer required. But, in compliance with the provision of section 15(9) of Bank Company Act 1991(amended up to 2018), Not Applicable bank company may consider the tenure of existing Directors from depositors or may appoint them as the Independent Director of the company. 3 Information regarding Directors: Banks are advised to take the following steps regarding directors 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 Complied immediately after the appointment or release of director. (c) Banks should display a list of directors on the website and update it on a Complied regular basis. 4 4.1 (a) Complied Responsibilities of the Board of Directors (BoD): Responsibilities and Authorities of the BoD: Work planning and strategic management (i) The BoD shall determine the objectives and goals and to this end shall chalk out strategies and work plans on annual basis. It shall analyze/monitor Complied at quarterly rests the development of implementation of work plans. (ii) The BoD shall have its analytical review presented in the Annual Report as regard to success/failure in achieving the business and other targets as set out in its annual work plan and shall apprise the shareholders of its Complied opinions/ recommendations on future plans and strategies. It shall set the Key Performance Indicators (KPIs) for the CEO and executives’ immediate two tiers below the CEO and have it evaluated at times. (b) Investment and Risk Management (i) The policies, procedures, strategies etc. in respect of appraisal of loan/investment proposal, sanction, disbursement, recovery, re-scheduling and write-off thereof shall be made with the BoD’s approval under the purview of the existing laws, rules and regulations. The BoD shall specifically distribute Partially Complied and the power of sanction of loan/investment and such distribution should Noted for future compliance desirably be made among the CEO and his subordinate executives as much as possible. No director, however, shall interfere, directly or indirectly, 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 rests and review the concerned report of the risk management team and shall Partially complied and compile in the minutes of the board meeting. The BoD shall monitor the Noted for future compliance compliance of the guidelines of BB regarding key risk management. GIB Annual Report 2021 215
218. (c ) Internal Control Management The Board shall be vigilant on the internal control system of the bank in order to attain and maintain satisfactory health or grade 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 Noted management. It shall review at quarterly rests the reports submitted by its audit committee regarding the compliance of recommendations made in internal and external audit reports and the BB inspection reports. (d) Human Resources (HR) Management and Development (i) Policies relating to recruitment, promotion, transfer, disciplinary and Complied punitive measures, human resources development are prepared. (ii) The BoD shall place special attention to the development of skills set to bank’s staff in different fields of its business activities including prudent appraisal of loan/investment proposals, and the adoption of modern Partially Complied electronic and information technologies and the introduction of effective Management Information System (MIS).The BoD shall get these programs incorporated in its annual work plan. (iii) The BoD will compose Code of Ethics for every tier of employees and they will follow it properly. The BoD will promote healthy code of Noted conducts for developing a compliance culture. (e) Financial Management (i) The annual budget and the statutory financial statements will be prepared with the approval of the BoD. It will at quarterly rests review/monitor the positions in respect of bank’s income, expenditure, Complied liquidity, non-performing assets, capital base and adequacy, maintenance of loan loss provision and steps taken for recovery of defaulted loans including legal measures. (ii) The BoD will frame the policies and procedures for bank’s purchase and procurement activities and shall accordingly approve the distribution of power for making such expenditure. The maximum possible delegation of such power shall rest on the CEO and his subordinates. The decision Complied on matters relating to infrastructure development and purchase of land, building etc. for the purpose of bank’s business shall, however, be taken with the approval of the BoD. (iii) The Board of Directors will review whether an Asset-Liability Committee Complied (ALCO) has been formed and it is working according to BB guidelines. 216 (f) Appointment of CEO: In order to strengthen the financial base of the bank and obtain confidence of the depositors, one of the major responsibilities of the BoD is to appoint an Complied honest, efficient, experienced and suitable CEO or Managing Director. The BoD will appoint a competent CEO for the bank with the approval of BB. (g) Other responsibilities of the BoD: In accordance to BB guidelines issued from time to time. 4.2 Meetings of the Board of Directors: Board of Directors may meet once or more than once in a month upon necessarily and shall meet at least once Complied in every three months. Executive meetings are discouraged. 4.3 Responsibilities of the Chairman of the BoD: (a) As the Chairman of the BoD or chairman of any committee formed by the BoD or any director does not personally possess the jurisdiction to apply policy making or executive authority, he/she shall not participate in or Complied interfere into the administrative or operational and routine affairs of the bank. (b) The Chairman may conduct on-site inspection of any bank branch or financing activities under the purview of the oversight responsibilities of the BoD. 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 BoD or the executive committee and if Complied deemed necessary, with the approval of the BoD, he shall affect necessary action thereof in accordance with the set rules through the CEO. However any complaint against the CEO shall have to be apprised to BB through the BoD along with the statement of the CEO. GIB Annual Report 2021 Complied and the Board will do such as and when required by BB in coming days too.
227. USAGE AND OPERATING EXPENDITURES OF MOTOR-VEHICLE FLEET (Compliance Report on BRPD Circular No: 02, Dated: January 16, 2014) In compliance of BRPD Circular Letter No.: 02 dated 16.01.2014 of Bangladesh Bank, the Bank furnished the following information related to usage and operating expenditures of motor-vehicle fleet for the year 2021 for perusal and review of the honorable shareholders: Sl. No. Particulars Amounts (in BDT) 1 Fuel 2 Repairs & Maintenance 3 Road Tax & Fitness 4 Registration 5 Depreciation 99,96,934.88 6 Insurance 15,31,780.00 7 Others Total 48,31,021.00 26,61,680.00 9,50,468.00 0.00 1,99,71,883.88 Insurane 8% Others 0% Fuel 24% Repairs & Maintenance, Road Tax & Fitness 13% Depreciation 50% Registration 5% GIB Annual Report 2021 225
228. CERTIFICATE OF THE COMPLIANCE AUDITOR ANNEXURE-B Report to the Shareholders of Global Islami Bank Limited On Compliance on the Corporate Governance Code For the year ended on December 31 , 2021 We have examined the compliance status to the Corporate Governance Code by Global Islami Bank Limited for the year ended as on December 31, 2021. This Code relates to the Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated: June-3, 2018 of the Bangladesh Securities and Exchange Commission. Such compliance with the Corporate Governance Code is the responsibility of the Company. Our examination was limited to the procedures and implementation thereof as adopted by the Management in ensuring compliance to the conditions of the Corporate Governance Code. This is a scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance Code as well as the provisions of relevant Bangladesh Secretarial Standards (BSS) as adopted by Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Corporate Governance Code We state that we have obtained all the information and explanations, which we have required, and after due scrutiny and verification thereof, we report that, in our opinion: (a) The Company has complied with the conditions of the Corporate Governance Code as stipulated in the above mentioned Corporate Governance Code issued by the Commission; (b) The Company has complied with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) as required by this Code: (c) Proper books and records have been kept by the Company as required under the Companies Act, 1994, the securities laws and other relevant laws, and (d) The Governance of the company is highly satisfactory. Dated: Dhaka April 27, 2022 226 GIB Annual Report 2021 Md. Anwaruzzaman FCA Partner Rahman Mostafa Alam & Co. Chartered Accountants
229. BSEC CHECKLIST FOR CORPORATE GOVERNANCE CODE Annexure – C [(As per condition No. 1(5) (xxvii)] Status of compliance with the conditions imposed by the Commission’s Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated June 03, 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969: Condition No. 1 1(1) Size of the Board of Directors 1(2) Independent Directors Title Compliance Status (Put √ in the appropriate column) Not Complied Complied Remarks (if any) Board of Directors 1(1) The total number of members of a company’s Board of Directors (hereinafter referred to as “Board”) shall not be less than 5 (five) and more than 20 (twenty). 1(2)(a) At least one-fifth (1/5) of the total number of directors in the company’s Board shall be independent directors; any fraction shall be considered to the next integer or whole number for calculating number of independent director(s); 1(2)(b) 1(2)(b)(i) 1(2)(b)(ii) √ Number of Board members of GiB is 19 (Nineteen) including 4 (Four) Independent Directors. GiB has complied relevant provision of the Bank Company Act 1991 (Amendment up to 2018) relating to ID's as per section 15(9) of the Act and also complied BSEC CG Code duly. For the purpose of this clause “Independent Director” means a directorWho either does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up shares of the company; √ Who is not a sponsor of the company or is not connected with the company’s any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship and his or her family members also shall not hold above mentioned shares in the company: Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members; √ 1(2)(b)(iii) Who has not been an executive of the company in immediately preceding 2 (two) financial years; 1(2)(b)(iv) Who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary or associated companies; 1(2)(b)(v) √ √ √ Who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange; √ 1(2)(b)(vi) Who is not a shareholder, director excepting independent director or officer of any member or TREC holder of stock exchange or an intermediary of the capital market; √ 1(2)(b)(vii) Who is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code; None of the Independent Directors hold any share of the company None of the Independent Directors has such connection as affirmed. None of the Independent Directors is an ex- employee of GiB The Independent Directors have submitted declarations about their copliances. Do Do √ Do GIB Annual Report 2021 227
230. Who is not independent director in more than 5 (five) listed 1(2)(b)(viii) companies; √ Do 1(2)(b)(ix) Who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan or any advance to a bank or a Non-Bank Financial Institution (NBFI); and √ Do 1(2)(b)(x) Who has not been convicted for a criminal offence involving moral turpitude; √ 1(2)(c) The independent director(s) shall be appointed by the Board and approved by the shareholders in the Annual General Meeting (AGM); √ 1(2)(d) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days; and √ Do No Vacancy Occurred The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) tenure only: 1(2)(e) Provided that a former independent director may be considered for reappointment for another tenure after a time gap of one tenure, i.e., three years from his or her completion of consecutive two tenures [i.e. six years]: Provided further that the independent director shall not be subject to retirement by rotation as per the Companies Act, 1994. √ Explanation: For the purpose of counting tenure or term of independent director, any partial term of tenure shall be deemed to be a full tenure. 1(3) Qualification of Independent 1(3)(a) Director Independent director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial laws, regulatory requirements and corporate laws and can make meaningful contribution to the business; 1(3)(b) Independent director shall have following qualifications: 1(3)(b)(i) Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member of any national or international chamber of commerce or business association; or 1(3)(b)(ii) Corporate Leader who is or was a top level executive not lower than Chief Executive Officer or Managing Director or Deputy Managing Director or Chief Financial Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal Service or a candidate with equivalent position of an unlisted company having minimum paid-up capital of Tk. 100.00 million or of a listed company; or Explanation: Top level executive includes Managing Director (MD) or Chief Executive Officer (CEO), Additional or Deputy Managing Director (AMD or DMD), Chief Operating Officer (COO), Chief Financial Officer (CFO), Company Secretary (CS), Head of Internal Audit and Compliance (HIAC), Head of Administration and Human Resources or equivalent positions and same level or ranked or salaried officials of the company. 1(3)(b)(iii) 228 GIB Annual Report 2021 Former official of government or statutory or autonomous or regulatory body in the position not below 5th Grade of the national pay scale, who has at least educational background of bachelor degree in economics or commerce or business or Law; or √ √ √ √ Qualifications and Backgrounds of Independent Directors confirm their capabilities as such.
231. 1 (3)(b)(iv) University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or Not Applicable Professional who is or was an advocate practicing at least in the High Court Division of Bangladesh Supreme Court or a 1(3)(b)(v) Chartered Accountant or Cost and Management Accountant or Chartered Financial Analyst or Chartered Certified Accountant or Certified Public Accountant or Chartered Management Accountant or Chartered Secretary or equivalent qualification; Not Applicable 1(3)(c) The independent director shall have at least 10 (ten) years of experiences in any field mentioned in clause (b); √ 1(3)(d) In special cases, the above qualifications or experiences may be relaxed subject to prior approval of the Commission. √ The positions of the Chairperson of the Board and the Managing Director (MD) and/or Chief Executive Officer (CEO) of the company shall be filled by different individuals; √ The Managing Director (MD) and/or Chief Executive Officer (CEO) of a listed company shall not hold the same position in another listed company; √ 1(4)(c) The Chairperson of the Board shall be elected from among the non-executive directors of the company; √ 1(4)(d) The Board shall clearly define respective roles and responsibilities of the Chairperson and the Managing Director and/or CEO; 1(4)(e) In the absence of the Chairperson of the Board, the remaining members may elect one of themselves from nonexecutive directors as Chairperson for that particular Board’s meeting; the reason of absence of the regular Chairperson shall be duly recorded in the minutes. 1(4) Duality of Chairperson 1(4)(a) of the Board of Directors and Managing Director or 1(4)(b) Chief Executive Officer √ Roles and responsibilities are as per Bangladesh Bank’s guidelines, Articles of the Bank and service rules of the Bank No Such Incident occurred in the reporting year. The Board of the company shall include the following additional statements or disclosures in the Directors’ 1(5) The Directors’ Report prepared under section 184 of the Companies Act, 1994 (Act No. XVIII of 1994): Report to Shareholders 1(5)(i) An industry outlook and possible future developments in the √ industry; 1(5)(ii) The segment-wise or product-wise performance; 1(5)(iii) Risks and concerns including internal and external risk factors, threat to sustainability and negative impact on environment, if any; 1(5)(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin, where applicable; 1(5)(v) A discussion on continuity of any extraordinary activities and their implications (gain or loss); 1(5)(vi) A detailed discussion on related party transactions along with a statement showing amount, nature of related party, nature of transactions and basis of transactions of all related party transactions; 1(5)(vii) A statement of utilization of proceeds raised through public issues, rights issues and/or any other instruments; √ √ Not Applicable GIB being a Shari’ah based Islami Bank such formation of P&L is not followed. No such item exists √ No such event occurred GIB Annual Report 2021 229
232. An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Share Offer, Direct Listing, etc.; Not Applicable 1(5)(ix) An explanation on any significant variance that occurs between Quarterly Financial performances and Annual Financial Statements; No such variation occurred 1(5)(x) A statement of remuneration paid to the directors including independent directors; √ A statement that the financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity; √ 1(5)(viii) 1(5)(xi) 1(5)(xii) A statement that proper books of account of the issuer company have been maintained; 1(5)(xiii) A statement that appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment; 1(5)(xiv) A statement that International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there from has been adequately disclosed; √ 1(5)(xv) A statement that the system of internal control is sound in design and has been effectively implemented and monitored; √ 1(5)(xvi) A statement that minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly and have effective means of redress; √ 1(5)(xvii) A statement that there is no significant doubt upon the issuer company’s ability to continue as a going concern, if the issuer company is not considered to be a going concern, the fact along with reasons there of shall be disclosed; √ 1(5)(xviii) 230 √ √ An explanation that significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof shall be explained; No such going concern arose No such deviation occurred 1(5)(xix) A statement where key operating and financial data of at least preceding 5 (five) years shall be summarized; 1(5)(xx) An explanation on the reasons if the issuer company has not declared dividend (cash or stock) for the year; 1(5)(xxi) Board’s statement to the effect that no bonus share or stock dividend has been or shall be declared as interim dividend; 1(5)(xxii) The total number of Board meetings held during the year and attendance by each director; 1(5)(xxiii) A report on the pattern of shareholding disclosing the aggregate number of shares (along with name-wise details where stated below) held by: 1(5)(xxiii)(a) Parent or Subsidiary or Associated Companies and other related parties (name-wise details); 1(5)(xxiii)(b) Directors, CEO, Company Secretary, CFO, HIAC and their spouses and minor children (name-wise details); GIB Annual Report 2021 √ Refer to the "Key Operating and Financial Highlights" Not applicable The Board at 62nd meeting held on March 24, 202 recommended 10% Cash Dividend for year 2021 subject to approval of the regulators and shareholders. Not applicable √ Not Applicable √
233. Executives ; and Explanation: For the purpose of this clause, the expression 1(5)(xxiii)(c) “Executive” means top 5 (five) salaried employees of the company, other than the Directors, CEO, CS, CFO and Head of Internal Audit and Compliance. 1(5)(xxiii)(d) 1(5)(xxiv) Shareholders holding ten percent (10%) or more voting interest in the company (name-wise details); In case of the appointment or reappointment of a director, a disclosure on the following information to the shareholders: √ Information regarding the Directors’ are disclosed in the “GIB Corporate Information” section of the Annual Report 2021 1(5)(xxiv)(b) Nature of his or her expertise in specific functional areas; and √ Do Names of companies in which the person also holds the 1(5)(xxiv)(c) directorship and the membership of committees of the Board; √ Do A Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s position and operations along with a brief discussion of changes in the financial statements, among others, focusing on: 1(5)(xxv)(a) Accounting policies and estimation for preparation of financial statements; Changes in accounting policies and estimation, if any, clearly describing the effect on financial performance or results and 1(5)(xxv)(b) financial position as well as cash flows in absolute figure for such changes; √ √ Comparative analysis (including effects of inflation) of financial 1(5)(xxv)(c) performance or results and financial position as well as cash flows for current financial year with immediate preceding five years explaining reasons thereof; √ Compare such financial performance or results and financial position as well as cash flows with the peer industry scenario; √ Briefly explain the financial and economic scenario of the 1(5)(xxv)(e) country and the globe; √ Risks and concerns issues related to the financial statements, 1(5)(xxv)(f) explaining such risk and concerns mitigation plan of the company; and √ 1(5)(xxv)(d) 1(7) Code of Conduct for the Chairperson √ 1(5)(xxiv)(a) A brief resume of the director; 1(5)(xxv) 1(6) Meetings of the Board of Directors √ 1(5)(xxv)(g) Future plan or projection or forecast for company’s operation, performance and financial position, with justification thereof, i.e., actual position shall be explained to the shareholders in the next AGM; 1(5)(xxvi) Declaration or certification by the CEO and the HoFAD to the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; and √ 1(5)(xxvii) The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 shall be disclosed as per Annexure-B & Annexure-C √ 1(6) The company shall conduct its Board meetings and record the minutes of the meetings as well as keep required books and records in line with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Code. √ 1(7)(a) The Board shall lay down a code of conduct, based on the recommendation of the NRC at condition No. 6, for the Chairperson of the Board, other board members and Chief Executive Officer of the company; No changes occurred during the year √ Bangladesh Bank barred to form NRC vide their letter no: BRPD(R1)717/2021-5064 Dated: June 16, 2021. GIB Annual Report 2021 231
234. other Board members and Chief Executive Officer 2 1 (7)(b) 2(a) Provisions relating to the composition of the Board of the holding company shall be made applicable to the composition of the Board of the subsidiary company; Not Applicable 2(b) At least 1 (one) independent director on the Board of the holding company shall be a director on the Board of the subsidiary company; Not Applicable 2(c) The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company; Not Applicable 2(d) The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also; Not Applicable The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company. Not Applicable Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal √ Audit and Compliance (HIAC) and Company Secretary (CS). 3(1) Appointment 232 3(1)(a) The Board shall appoint a Managing Director (MD) or Chief Executive Officer (CEO), a Company Secretary (CS), a Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC) √ 3(1)(b) The positions of the Managing Director or CEO, Company Secretary, Chief Financial Officer and HIAC shall be filled by different individuals; √ 3(1)(c) The MD or CEO, CS, CFO and HIAC of a listed company shall not hold any executive position in any other company at the same time; √ 3(1)(d) The Board shall clearly define respective roles, responsibilities and duties of the CFO, the HIAC and the CS; √ 3(1)(e) The MD or CEO, CS, CFO and HIAC shall not be removed from their position without approval of the Board as well as immediate dissemination to the Commission and stock exchange(s). √ The MD or CEO, CS, CFO and HIAC of the company shall attend the meetings of the Board: 3(2) Requirement to attend Board of Directors’ Meetings 3(3) Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Do Governance of Board of Directors of Subsidiary Company 2(e) 3 The code of conduct as determined by the NRC shall be posted on the website of the company including, among others, prudent conduct and behavior; confidentiality; conflict of interest; compliance with laws, rules and regulations; prohibition of insider trading; relationship with environment, employees, customers and suppliers; and independency. 3(2) 3(3)(a) 3(3)(a)(i) 3(3)(a)(ii) GIB Annual Report 2021 Provided that the CS, CFO and/or the HIAC shall not attend such part of a meeting of the Board which involves consideration of an agenda item relating to their personal matters. √ The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for the year and that to the best of their knowledge and belief: These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws; √ √
235. 4 3 (3)(b) The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board or its members; 3(3)(c) The certification of the MD or CEO and CFO shall be disclosed in the Annual Report. √ √ Board of Directors’ Committee. For ensuring good governance in the company, the Board shall have at least following sub-committees: 5 5(1) Responsibility to the Board of Directors. 4(i) Audit Committee; and √ 4(ii) Nomination and Remuneration Committee. √ Audit Committee 5(1)(a) 5(1)(b) 5(1)(c) 5(2) Constitution of the Audit Committee Bangladesh Bank barred to form NRC vide their letter no: BRPD(R1)717/2021-5064 Dated: June 16, 2021. 5(2)(a) 5(2)(b) 5(2)(c) 5(2)(d) 5(2)(e) The company shall have subcommittee of the Board; an Audit Committee as a √ The Audit Committee shall assist the Board in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business; √ The Audit Committee shall be responsible to the Board; the duties of the Audit Committee shall be clearly set forth in writing. √ The Audit Committee shall be composed of at least 3 (three) members; √ The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company excepting Chairperson of the Board and shall include at least 1 (one) independent director; All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting or related financial management background and 10 (ten) years of such experience; Explanation: The term “financially literate” means the ability to read and understand the financial statements like statement of financial position, statement of comprehensive income, statement of changes in equity and cash flows statement and a person will be considered to have accounting or related financial management expertise if he or she possesses professional qualification or Accounting or Finance graduate with at least 10 (ten) years of corporate management or professional experiences. √ √ When the term of service of any Committee member expires or there is any circumstance causing any Committee member to be unable to hold office before expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee; The company secretary shall act as the secretary of the Committee; No Such Incident occurred. √ GIB Annual Report 2021 233
236. 5 (3) Chairperson of the Audit Committee 5(4) Meeting of the Audit Committee 5(2)(f) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director. √ 5(3)(a) The Board shall select 1 (one) member of the Audit Committee to be Chairperson of the Audit Committee, who shall be an independent director; √ 5(3)(b) In the absence of the Chairperson of the Audit Committee, the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes. 5(3)(c) Chairperson of the Audit Committee shall remain present in the Annual General Meeting (AGM): Provided that in absence of Chairperson of the Audit Committee, any other member from the Audit Committee shall be selected to be present in the AGM and reason for absence of the Chairperson of the Audit Committee shall be recorded in the minutes of the AGM. 5(4)(a) The Audit Committee shall conduct at least its four meetings in a financial year: Provided that any emergency meeting in addition to regular meeting may be convened at the request of any one of the members of the Committee; GIB Annual Report 2021 √ √ 5(5)(a) Oversee the financial reporting process; √ 5(5)(b) Monitor choice of accounting policies and principles; √ 5(5)(c) Monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report; √ 5(5)(d) Oversee hiring and performance of external auditors; √ 5(5)(e) Hold meeting with the external or statutory auditors for review of the annual financial statements before submission to the Board for approval or adoption; √ 5(5)(f) Review along with the management, the annual financial statements before submission to the Board for approval; √ 5(5)(g) Review along with the management, the quarterly and half yearly financial statements before submission to the Board for approval; √ 5(5)(h) Review the adequacy of internal audit function; 5(5)(i) Review the Management’s Discussion and Analysis before disclosing in the Annual Report; √ 5(5)(j) Review statement of all related party transactions submitted by the management; √ 5(5)(k) Review Management Letters or Letter of Internal Control weakness issued by statutory auditors; √ 5(5)(l) 234 √ The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two-third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must. 5(4)(b) 5(5) Role of the Audit Committee No Such Incident occurred. Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors; and √ √ Shall be invited to remain present
237. Oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the Commission: 5(5)(m) 5(6) Reporting of the Audit Committee 5(6)(a) The Audit Committee shall report on its activities to the Board. The Audit Committee shall immediately report to the Board on the following findings, if any: √ 5(6)(a)(ii)(a) Report on conflicts of interests; No such event occurred Suspected or presumed fraud or irregularity or material defect 5(6)(a)(ii)(b) identified in the internal audit and compliance process or in the financial statements; No such event occurred 5(6)(a)(ii)(c) Suspected infringement of laws, regulatory compliances including securities related laws, rules and regulations; and No such event occurred 5(6)(a)(ii)(d) Any other matter which the Audit Committee deems necessary shall be disclosed to the Board Immediately; No such event occurred Reporting to the Authorities If the Audit Committee has reported to the Board about anything which has material impact on the financial condition and results of operation and has discussed with the Board and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board for three times or completion of a period of 6 (six) months from the date of first reporting to the Board, whichever is earlier. Report on activities carried out by the Audit Committee, including any report made to the Board under condition No. 5(6)(a)(ii) above during the year, shall be signed by the Chairperson of the Audit Committee and disclosed in the annual report of the issuer company. No such event occurred √ No report has been made under condition No. 5(6)(a)(ii) Nomination and Remuneration Committee (NRC) The company shall have a Nomination and Remuneration Committee (NRC) as a sub-committee of the Board; Bangladesh Bank barred to form NRC vide their letter no: BRPD(R1)717/2021-5064 Dated: June 16, 2021. The NRC shall assist the Board in formulation of the nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive; Do The Terms of Reference (ToR) of the NRC shall be clearly set forth in writing covering the areas stated at the condition No. 6(5)(b). Do 6(2)(a) The Committee shall comprise of at least 3 members including an independent director; Do 6(2)(b) All members of the Committee shall be non-executive directors; 6(1)(a) 6(1)(b) 6(1)(c) 6(2) Constitution of the NRC Reporting to the Board of Directors 5(6)(a)(ii) 5(7) Reporting to the Shareholders and General Investors 6(1) Responsibility to the Board of Directors Not Applicable 5(6)(a)(i) 5(6)(b) 6 Provided that the management shall disclose to the Audit Committee about the uses or applications of the proceeds by major category (capital expenditure, sales & marketing expenses, working capital, etc.), on a quarterly basis, as a part of their quarterly declaration of financial results: Provided further that on an annual basis, the company shall prepare a statement of the proceeds utilized for the purposes other than those stated in the offer document or prospectus for publication in the Annual Report along with the comments of the AC. Do GIB Annual Report 2021 235
238. 6 (2)(c) Members of the Committee shall be nominated and appointed by the Board; Bangladesh Bank barred to form NRC vide their letter no: BRPD(R1)717/2021-5064 Dated: June 16, 2021. 6(2)(d) The Board shall have authority to remove and appoint any member of the Committee; Do 6(2)(e) In case of death, resignation, disqualification, or removal of any member of the Committee or in any other cases of vacancies, the board shall fill the vacancy within 180 days of occurring such vacancy in the Committee; Do The Chairperson of the Committee may appoint or co-opt any external expert and/or member(s) of staff to the Committee as advisor who shall be non-voting member, if the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required or valuable for the Committee; Do 6(2)(g) The company secretary shall act as the secretary of the Committee; Do 6(2)(h) The quorum of the NRC meeting shall not constitute without attendance of at least an independent director; Do 6(2)(i) No member of the NRC shall receive, either directly or indirectly, any remuneration for any advisory or consultancy role or otherwise, other than Director’s fees or honorarium from the company. Do 6(3)(a) The Board shall select 01 member of the NRC to be Chairperson of the Committee, who shall be an independent director; Do 6(3)(b) In the absence of the Chairperson of the NRC, the remaining members may elect one of themselves as Chairperson for that particular meeting, the reason of absence of the regular Chairperson shall be duly recorded in the minutes; Do The Chairperson of the NRC shall attend the annual general meeting (AGM) to answer the queries of the shareholders: Provided that in absence of Chairperson of the NRC, any other member from the NRC shall be selected to be present in the annual general meeting (AGM) for answering the shareholder’s queries and reason for absence of the Chairperson of the NRC shall be recorded in the minutes of the AGM. Do 6(4)(a) The NRC shall conduct at least one meeting in a financial year; Do 6(4)(b) The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC; Do 6(4)(c) The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2)(h); Do The proceedings of each meeting of the NRC shall duly be recorded in the minutes & such minutes shall be confirmed in the next meeting of the NRC. Do 6(5)(a) NRC shall be independent and responsible or accountable to the Board and to the shareholders; Do 6(5)(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board: Do 6(5)(b)(i) Formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the Remuneration of the directors, top level executive, considering the following: Do 6(2)(f) 6(3) Chairperson of the NRC 6(3)(c) 6(4) Meeting of the NRC 6(4)(d) 6(5) Role of the NRC The level and composition of remuneration is reasonable and 6(5)(b)(i)(a) sufficient to attract, retain and motivate suitable directors to run the company successfully; 236 GIB Annual Report 2021 Do
239. The relationship of remuneration to performance is clear and 6 (5)(b)(i)(b) meets appropriate performance benchmarks; and Bangladesh Bank barred to form NRC vide their letter no: BRPD(R1)717/2021-5064 Dated: June 16, 2021. Remuneration to directors, top level executive involves a 6(5)(b)(i)(c) balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals; Do Devising a policy on Board’s diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality; Do Identifying persons who are qualified to become directors and who may be appointed in top level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board; Do Formulating the criteria for evaluation of performance of IDs and the Board; Do 6(5)(b)(v) Identifying the company’s needs for employees at different levels and determine their selection, transfer or replacement and promotion criteria; and Do 6(5)(b)(vi) Developing, recommending and reviewing annually the company’s human resources and training policies; Do 6(5)(c) The company shall disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report. Do 6(5)(b)(ii) 6(5)(b)(iii) 6(5)(b)(iv) 7 External or Statutory Auditors 7(1) The issuer company shall not engage its external or statutory auditors to perform the following services of the company, namely: 7(1)(i) 7(1)(ii) Appraisal or valuation services or fairness opinions; 7(1)(iii) Book-keeping or other services related to the accounting records or financial statements; √ 7(1)(iv) Broker-dealer services; 7(1)(v) 7(1)(vi) Actuarial services; √ √ Internal audit services or special audit services; √ 7(1)(vii) Any service that the Audit Committee determines; √ 7(1)(viii) Audit or certification services on compliance of corporate governance as required under condition No. 9(1); and √ 7(1)(ix) Any other service that creates conflict of interest. √ No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company; his or her family members also shall not hold any shares in the said company: √ 7(2) Financial information systems design and implementation; Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members. 7(3) 8 Representative of external or statutory auditors shall remain present in the Shareholders’ Meeting (AGM or EGM) to answer the queries of the shareholders. √ √ √ Maintaining a website by the Company 8(1) The company shall have an official website linked with the website of the stock exchange. √ 8(2) The company shall keep the website functional from the date of listing. √ Not applicable (Website already functional) 8(3) The company shall make available the detailed disclosures on its website as required under the listing regulations of the concerned stock exchange(s). √ Not applicable (Prospectus of forthcoming IPO has been linked in the website of the Stock Exchanges and detail disclosures under the listing regulations will comply upon listing) GIB Annual Report 2021 237
240. 9 Reporting and Compliance of Corporate Governance 9 (1) The company shall obtain a certificate from a practicing Professional Accountant or Secretary (Chartered Accountant or Cost and Management Accountant or Chartered Secretary) other than its statutory auditors or audit firm on yearly basis regarding compliance of conditions of Corporate Governance Code of the Commission and shall such certificate shall be disclosed in the Annual Report. Explanation: “Chartered Accountant” means Chartered Accountant as defined in the Bangladesh Chartered Accountants Order, 1973 (President’s Order No. 2 of 1973); “Cost and Management Accountant” means Cost and Management Accountant as defined in the Cost and Management Accountants Ordinance, 1977 (Ordinance No. LIII of 1977); “Chartered Secretary” means Chartered Secretary as defined in the Chartered Secretaries Act, 2010. 238 GIB Annual Report 2021 √ 9(2) The professional who will provide the certificate on compliance of this Corporate Governance Code shall be appointed by the shareholders in the annual general meeting. √ 9(3) The directors of the company shall state, in accordance with the Annexure-C attached, in the directors’ report whether the company has complied with these conditions or not. √ The required Certificate is Available in the GiB website and “Certification of the Compliance Auditor” section of this GiB Annual Report 2021
241. DISCLOSURE ON DIVIDEND POLICY “GiB Dividend Distribution Policy” is prepared in line with the bank's medium and long-term strategies, investment and financial plans, the state of the country's economy and the industry, and keeping the balance between the expectations of our shareholders and the needs of GiB into consideration, in accordance with the applicable rules and regulations of the land, is determined with the proposal of the Board of Directors and the decision taken in the General Meeting. The company aims to distribute handsome proportion of the distributable net profit as cash and / or stock for each fiscal year, as long as the entire net distributable period profit calculated within the framework of the capital market regulations can be met from the existing sources in its statutory accounts. This policy depends on the financial position of GiB, other funding needs related to the investments to be made, conditions in the sector, conditions in the economic environment. The dividend rate is reviewed annually by the Board of Directors depending on national and global economic conditions, medium and long-term growth and investment strategies and cash needs of GiB in the relevant profit distribution period. The General Meeting may decide to distribute dividends or allocate some or all of the net profit to extraordinary reserves. In case the Board of Directors proposes not to distribute the profit to the General Meeting, the shareholders are informed about the reasons of this situation and the way of using the undistributed profit. A separate resolution is made for each fiscal period by the Board of Directors regarding the dividend and this dividend proposal is disclosed to the public in accordance with the legislation and is announced on the bank website. The General Meeting may accept or reject the proposal. Dividend is distributed equally to all existing shares as of the distribution date, regardless of their issuance and acquisition dates. Distribution of dividend begins on the date to be determined by the Board of Directors provided that it is authorized by the General Meeting, at the latest by the end of the year in which the General Meeting is held. The Bank may consider distributing dividend advances or paying dividends in equal or different installments in accordance with the applicable rules and regulations of the land. Detail Dividend Policy is available at https://www.globalislamibankbd.com/dividend-distribution-policy/ GIB Annual Report 2021 239
242. DISCLOSURE ON UNPAID OR UNCLAIMED DIVIDEND As of December 31 , 2021 there is no Unpaid or Unclaimed Dividend against any shareholder of the Bank/ Company. 240 GIB Annual Report 2021
251. REPORT ON HUMAN RESOURCES Global Islami Bank (GiB) considers ‘Human Resource’ as the most important factors that can add special value for subsistence in this modest world. Therefore, the Bank always puts high greatness on development of human resource to add advantageous edge to drive the organization towards its goal. Global Islami Bank HR Division has adapted to wide ranging HR software, which operates the central storage of HR data, automation of Payroll, Leave Management, Personnel Management and others HR activities. HUMAN RESOURCE PLANNING GiB believes that employees are the most valuable asset of the organization, as their professionalism and proficiency, along with their diverse backgrounds and experience contributes significantly to it success. The primary goal of human resource management is to ensure that the right people will be in the right position at the right time by virtue of the individual quality. Global Islami Bank has already fixed the job-wise organogram and HR Division determined the HR requirements with support of other departments and evaluation of jobs. EMPLOYEE COMPENSATION & BENEFITS Pay package is one of the most effective motivational tools that really attract the potential employees. By keeping into account of the macro economic factors like cost of living, industry practices, Bank capability etc. the bank provides attractive compensation packages. The bank’s overall competitive strategy ensures the salary adjustment in commensurate with the increment of cost of living adjustment which in fact ensures purchasing capacity of the employee. Pay for Performance strategy highly encourages to boost up individual employee performance. To keep the employee motivation level high, Global Islami Bank has the following benefits and facilities for its employees: ● Provident Fund ● Gratuity ● Social Security Benevolent Fund ● Festival Bonus ● Annual Incentive Bonus ● Boishakhi Allowance ● Medical Benefit ● Group Insurance ● Leave Encashment ● Retirement Benefit ● Employees Investment facilities (Employees House Building Investment Scheme, Quard against Car Leasing Scheme, Bai Muajjal Investment (Staff). ● Incentives for IBB & BIM Diploma Holders ● Death Benefit etc. These facilities are designed in such a way so that employees will have a handsome amount of benefits while leaving the bank to enjoy a decent life with family. GIB Annual Report 2021 249
252. Besides it , a handsome amount pays to the deceased family of the employee while death during Bank Service. Disbursement of Death benefit in 2021: Amount in Million Total 3.045 No. of Employees 3 In addition to the above amount, the Bank has disbursed the following death benefit against COVID-19 death cases in 2021 as per BRPD Circular no. 24 dated April 19, 2021: Amount in Million Total 5.00 No. of Employees 1 EMPLOYEE HEALTH FACILITIES GIB is always concerned to provide medical support to all employees along with their Kids & Spouse. The Bank in this regard has entered into a group health insurance agreement with Padma Life Insurance Company Limited and brought all employees of the bank under health insurance coverage. The medical assistance benefits provide peace of mind to the employees and enable them to focus on their professional responsibilities without having to worry about financial crisis in the event of urgent medical needs. ROLE OF HR DURING COVID-19 Global Islami Bank Limited (GIB) has made continuous efforts to reduce the risk of the spread of COVID-19 among the employees of the Bank. GIB has set up a Quick Response Team (QRT) as directed by Bangladesh Bank. GIB has taken precautionary measures to ensure that its employees as well its customers and those visiting its branches and head offices remain safe and protected from COVID-19. All employees of the bank were advised to strictly follow to the circulated to them time to time. Roster duty at Branch and Head Office level has been implemented and the bank has provided sufficient hand sanitizers, mask across the branches & head office. DIVERSITY AT WORKSTATION GIB wishes to create collaboration through employing various group of people. Employees diversity prevents creation of any glass ceiling and gets better output from different views and opinions. Maintaining gender ratio at a reasonable level is another target of GIB. More and more females are joining the employees in Bangladesh and GIB also encourages female participation in its operations at different levels. Female employees hold diversified ranks ranging from officers to executives. The employees of GiB stood at 2,013 by the end of 2021. Gender-wise position of GIB manpower as on December 31, 2021 is shown in the chart: A detailed employee matrix is presented below: Ranks Executive 250 No. of Male Employee 134 No. of Female Employee 10 Total Employee 144 Percentage of Composition 7.15% Below Executive 1177 234 1411 70.10% Support Staff 453 5 458 22.75% Total 1764 249 2013 100% GIB Annual Report 2021
253. BUILDING & RETENTIVE HUMAN CAPITAL GiB has created an excellent work environment and this is apparent in the employee turnover trend. Employees’ length of service is one of the key indicator that they work for the organization with faithfulness and willingness to work together to help the bank reach its long term strategic goals. Employees’ length of service with GIB is presented in the chart below: After taking new employees into the system, GIB puts continuous efforts to refinement the abilities of employees and making them better suited for applying best performances. The employee development processes focus on qualifying employees to go further than their current capabilities and further enhancement of their potentials. Every employee is given the opportunity to attend training and development programs. Employees or their line managers can take the initiatives to be considered for training programs based on their capability and need assessment. Trend of GIB Manpower EMPLOYEE HEALTH & WORK-LIFE BALANCE There are around 2,013 employees working at the Bank. GIB has many schemes to ensure health status of employees, involve them into existences to enhance mental and physical well beings. The Bank has a medical fund and every permanent employee is entitled to receive benefits of the fund for self, spouse and child’s. Other than government holidays, GIB employees are entitled to thirty-three days Earned Leave annually, including ten days of Mandatory Leave. Moreover, employees can avail fifteen days of Casual Leave during a year. Female employees have the opportunity to get six months of maternity leave to enjoy their motherhood. SUCCESSION PLANNING- FUTURE LEADERS Senior level positions at GIB are filled up with people owning the right experiences and skills with the potential to lead the industry in the future. Not only that, to create future leaders for the industry, GIB offers “Probationary Officer (PO)” program a unique program designed to discover the best talents to work in the bank. GIB Annual Report 2021 251
254. TRAINING & DEVELOPMENT Global Islami Bank, believes that the employees must be furnished with all necessary skills to meet the ever-changing demands of this fast-faced, competitive industry. Therefore, the Bank’s goal to create a culture of continuous development to qualify them to grow and succeed during their careers. In 2021, there were 2174 participants attended in 95 Training Programs on different areas including Foundation course, Banking, Finance, Audit, IT, Islamic Banking, Asset Liability, Anti-Money Laundering, Investment etc. which is surely a landmark in the training arena among other commercial banks in the industry. Besides the in-house and customized training programs, employees of the bank are also sent to the training programs arranged by BBTA, BIBM, BIM, NAPD, BAB Research & Training Centre and other reputed local and foreign training institution. Statistics of training program conducted by Global Islami Bank during in 2021Type of Training No. of Participants Internal 45 External 50 165 Total 95 2174 Year-wise Participants in Training Programs- 252 No. of Trainings GIB Annual Report 2021 2009
255. REPORT ON ADC AND CARDS GiB has been providing Banking service to its valued clientele over the nation based on the principal of Islami Shari ’ah. The Management of the Bank is committed to provide 24/7 banking service to its clientele through Alternative Delivery Channel (ADC). This channel allows the customer to get all banking service without depending on branch banking. These alternative ways enable instant transmission of financial and non-financial information between the customer and financial service provider. In this context, GiB has implemented some alternative channel such as ATMs, Debit Cards, Credit Cards, Internet Banking & 24/7 Call Center. ATM ● GIB ATMs 92 ● Shared ATMs 11,000+ Through GiB and shared ATMs cardholders can access withdrawal, Balance Inquiry and Mini Statement facility. To ensure optimum level of security to the cardholders, Anti-skimming device and EPP (Encrypted PIN Pad) has been installed in all GIB ATMs. Anti-Skimming device helps protecting skimming in two ways. It will recognize modifications card slot and emits a disturbance field which prevent the skimmer to spying out cardholder data from magnetic strip. The module also creates an electromagnetic interference field around the card entry slot. This interference field impedes skimmer to read out sensitive data of the cardholder from the magnetic strip. In addition to that all the ATM booths of GIB is under 24/7 CCTV surveillance. Year 2020 Number of ATM Transaction Amount of ATM Transaction (BDT) 380,335 412,107 344,10,35,730 375,87,55,730 Amount of ATM Transaction Number of ATM transaction 420000 412107 410000 3800000000 3758755730 3700000000 400000 3600000000 390000 380000 2021 3500000000 380335 3441035730 3400000000 370000 3300000000 3200000000 360000 2020 2021 2020 2021 GIB Annual Report 2021 253
256. GiB CARDS GiB has introduced VISA EMV Chip Card with latest contactless technology . EMV Chip Card ensures optimum level of security to the cardholders from preventing card related fraud and to secure customer sensitive data. The combination of the chip-enabled cards and the chip-enabled terminal lower the risk of fraudulent activity. In addition, 2FA (Two Factor Authentication) service which is OTP (One Time Password) based is implemented to secure online transaction. DEBIT CARD ● 42000+ EMV VISA Classic Debit Card Year Number of Debit Card Transaction Amount of Debit Card Transaction (BDT) 2020 2021 350,276 377,445 300,06,03,550 418,02,93,535 Key Features: ● Debit Card is issued against Saving, Current and SND Account to facilitate ATM, POS and e-commerce transaction to access their account 24/7 in 365 days; ● Cardholders can withdraw up to BDT 100,000.00 in a day from any ATM throughout the country; ● Cardholders can make payment through POS up to BDT 150,000.00 in a day against purchase of product in any POS terminal in Bangladesh; ● Cardholders can make local online purchase/payment up to BDT 100,000.00 in a day. 254 GIB Annual Report 2021
257. CREDIT CARD GiB has introduced Shari ’ah based Credit Card with the concept of Ujrah and Qard to provide credit limit facility for Service, Business, Self-employed & General persons. Two categories of GIB Credit Card have been introduced so far: ● VISA Gold Dual (Limit Ceiling BDT 300,000.00) ● VISA Platinum (Limit Ceiling BDT 500,000.00) ▪ 1500+ EMV VISA Credit Card Year Number of Credit Card Transaction Amount of Credit Card Transaction (BDT) 2020 2021 20,055 24,303 16,61,47,053 22,55,36,700 Key Features: ● Interest free Credit Card. ● Monthly Maintenance Fee is calculated on outstanding amount which is slab based; ● GIB Credit Card has dual currency facility which can be used inside and outside the country for cash withdraw, POS purchase & online transaction; ● Cardholder can endorse passport and avail maximum $12,000 in a calendar year under Travel Quota (TQ) limit; ● EMI facility in selective merchant outlets; ● Airport Meet and Assist service in Hazrat Shahjalal International Airport, Dhaka. CALL CENTRE ● Short Code: 16671 ● Long Code: 09610016671 One number all solution. Customer can get 24/7 banking related queries, service and support through GIB Call Center. Year Total Inbound Call 2020 2021 Increased 11,087 25,892 134% INTERNET BANKING “GO FAST” ▪ 4000+ Internet Banking User. “Go Fast” Internet banking module allows accountholder to get a clear state of their financial position and offer a vast banking services. Key Features: ● Any Bank Fund Transfer; ● Account Balance and Statement; ● Cheque and Service Request; ● Credit Card Bill Payment; ● GiB Any Account Transfer; ● Customer Activity Report. GIB Annual Report 2021 255
258. KEY BUSINESS SUMMARY Year 2020 Number of POS Transaction 2021 43 ,083 51,346 19,58,86,148 20,54,61,643 13,921 24,998 Amount of E-commerce Transaction (BDT) 4,40,99,868 9,17,03,551 Income from Card and Transaction (BDT) 1.62 Crore 1.78 Crore Amount of POS Transaction (BDT) Number of E-commerce Transaction Number of POS Transaction Amount of POS Transaction 51346 52000 208000000 205461643 206000000 50000 204000000 48000 202000000 46000 200000000 44000 198000000 43083 195886148 196000000 42000 194000000 40000 192000000 190000000 38000 2020 2021 2020 Number of E-Commerce Transaction Amount of E-Commerce Transaction 30000 100000000 24998 25000 91703551 90000000 80000000 70000000 20000 15000 2021 60000000 13921 50000000 44099868 40000000 10000 30000000 20000000 5000 10000000 0 0 2020 2020 2021 Income 1.8 1.78 Amount in Crore 1.78 1.76 1.74 1.72 1.7 1.68 1.66 1.64 1.62 1.62 1.6 2020 256 GIB Annual Report 2021 2021 2021
291. GIB MOMENTS IN FRAME GiB signed an agreement today on Automated Challan System (ACS) with Bangladesh Bank. Under this agreement all the branches and sub-branches of Global Islami Bank will collect Passport Fees, VAT, Tax and other Govt. fees. The agreement was signed by Md. Forkan Hossain, General Manager, Bangladesh Bank and Syed Habib Hasnat, Managing Director of Global Islami Bank. GiB signed an agreement today with Global Airport Assisting Services Limited. Under this agreement, GiB Platinum Credit Cardholders will enjoy complimentary protocol services at Hazrat Shahjalal International Airport. These services will include assistance in all tasks of an arriving or departing passenger of international route like luggage handling, check-in formalities etc. GiB signed medical service agreements with Labaid Hospital and Labaid Cancer Hospital and Super Specialty Center at Corporate Head Office of the bank. Kazi Mashiur Rahman Jayhad, Additional Managing Director of Global Islami Bank & Sakif Shamim, Managing Director of Labaid Group signed the Agreement on behalf of their respective Organizations. GIB Annual Report 2021 289
292. GIB MOMENTS IN FRAME GiB formally opened its Narayanganj Branch and Mymensingh Branch on June 29 , 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branch as chief guest through online. GiB formally opened its 02 (two) Branches & 09 (Nine) Sub-Branches on August 18, 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branches as Chief Guest through online. GiB formally opened its two branches namely Cumilla Branch, Cumilla and Keranihat Branch, Chattogram on December 23, 2021. Syed Habib Hasnat, Managing Director of the Bank has virtually inaugurated the operation of the branches as Chief Guest. Additional Managing Directors Md. Golam Sarwar and Kazi Mashiur Rahman Jayhad, Deputy Managing Directors Ataus Samad and Sami Karim, Divisional Heads from head office, Branch Managers & distinguished clients were also present on the occasion. GiB formally opened its 13 (Thirteen) Sub-Branches on September 09, 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branches as Chief Guest through online. 290 GIB Annual Report 2021 GiB formally opened its 11 (Eleven) Sub-Branches on September 14, 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branches as Chief Guest through online.
293. GIB MOMENTS IN FRAME GiB formally opened its 12 (Twelve) Sub-Branches on August 29, 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branches as Chief Guest through online. GiB formally opened its 02 new branches at Natun Bazar, Cox’s Bazar and Rangpur Branch, Rangpur on June 28, 2021. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the branches as Chief Guest through online. GiB formally opened its two branches namely Mohammadpur Chowrasta Branch, Dhaka and South Keraniganj Branch, Dhaka on October 25, 2021. Syed Habib Hasnat, Managing Director of the Bank has virtually inaugurated the operation of the branches as Chief Guest. Additional Managing Directors Md. Golam Sarwar and Kazi Mashiur Rahman Jayhad, Deputy Managing Directors Ataus Samad, Divisional Heads from head office, Branch Managers & distinguished clients were also present on the occasion. Two agent banking outlets of GiB namely Hazaribhag Agent outlet and Bansree Agent outlet started their operations on February 07, 2021. Additional Managing Director Kazi Mashiur Rahman Jayhad inaugurated the outlets through online at its Head office, Dhaka. GiB formally opened its Gorgoria Masterbari Sub-Branch on February 7, 2021 at Gazipur. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branches as Chief Guest through online. GIB Annual Report 2021 291
294. GIB MOMENTS IN FRAME GiB formally opens its two sub-branches at Academy Road , Feni and Dakkhinkhan, Dhaka on October 14, 2021. Syed Habib Hasnat, Managing Director of the Bank has virtually inaugurated the operation of the sub-branches as Chief Guest. Additional Managing Director Md. Golam Sarwar and Kazi Mashiur Rahman Jayhad, Deputy Managing Director Ataus Samad, Divisional Heads from Corporate Head Office, Branch Managers, sub-branch in-charges and distinguished clients were also present on the occasion. GiB formally opened its Toitong Sub-Branch on March 07, 2021 at Pekua, Cox’s Bazar. Mr. Syed Habib Hasnat, Managing Director of the bank has inaugurated the operation of the Sub-Branch as chief guest through online. It was expected that through the latest technological support, the bank will provide quality service to the customers & will expand its network to provide “Banking with Faith” to its stakeholders. GiB formally opened its two sub-branches namely Nadana Bazar Sub-Branch, Noakhali and Kalipur Sub-branch, Chattogram on November 14, 2021. Syed Habib Hasnat, Managing Director of the Bank has virtually inaugurated the operations of the sub-branches as the Chief Guest. Additional Managing Director Kazi Mashiur Rahman Jayhad, Deputy Managing Director Ataus Samad, Divisional Heads from Head Office, Branch Managers, Sub-branch In-charges & distinguished clients were also present on the occasion. 292 GIB Annual Report 2021
295. GIB MOMENTS IN FRAME GiB inaugurated it 's 83rd ATM Booth at Highway Inn Hotel, Cumilla. Kazi Mashiur Rahman Jayhad, Additional Managing Director of the bank has formally inaugurated the ATM Booth as Chief Guest. Among others Zulfiquar Ali Khan, EVP and Head of GSD, Ijtehad U. Ahmed, Proprietor of Highway Inn Hotel and senior officials were also present on the occasion. GiB has opened its 82nd ATM Booth at Baunia, Turag Dhaka. Kazi Mashiur Rahman Jayhad Additional Managing Director of the Bank officially inaugurated it on April 13, 2021. Head of Marketing Mr. Imtiaz Ahmed Siddiqui, Manager of Uttara Branch Md Feroz Murad Hossain, Operation Manager of Uttara Branch Rashida Sultana, In-Charge of Baunia Badaldi Sub-Branch Rumana Yesmin Chowdhury and other officials were present during the inauguration. GIB Annual Report 2021 293
296. GIB TRAINING INSTITUTE ACTIVITIES Mr . Syed Habib Hasnat, Managing Director delivering his speech on inauguration of Foundation Course. Mr. Md. Golam Sarwar, AMD delivering his speech on Basic Concept of Islami Operations for Executives. Glimpses from a Virtual Training for the Probationary Officers of GiB held virtually. Virtual Training on Trade Based Money Laundering Glimpses from a Virtual Training for the officials of GiB Glimpses from a Virtual Training for the officials of GiB held virtually. 294 GIB Annual Report 2021
297. GIB TRAINING INSTITUTE ACTIVITIES Mr . Syed Habib Hasnat, Managing Director delivering his speech on inauguration of Foundation Course held virtually. Dr. Shoaib Ahmed delivering his speech at Foundation Course held virtually. Mr. Md. Osman Gani Mollah, Head of HRD delivering his speech at Foundation Course held virtually. Glimpses from a Virtual Training for the officials of GiB held virtually. GIB Annual Report 2021 295
298. GIB TRAINING INSTITUTE ACTIVITIES 296 Virtual Training on AML & CFT Virtual Training on AML & CFT Virtual Training on Investment Documentation Virtual Training on General Banking Virtual Training on Foundation Course Virtual Training on Investment Management Virtual Training on Investment Based Money Laundering Virtual Training on Investment Management GIB Annual Report 2021
315. viii . the records and statements submitted by the branches have been properly maintained in the financial statements; ix. the information and explanations required by us have been received and found satisfactory; and x. we have reviewed over 80% of the risk weighted assets of the Bank and spent over 3,380 person hours. Dhaka, Bangladesh Date: 27 APR 2022 For and on behalf of Hoda Vasi Chowdhury & Co. Chartered Accountants Showkat Hossain, FCA Senior Partner Enrollment No. 0137 DVC : 2204270137AS154589 GIB Annual Report 2021 313
316. GLOBAL ISLAMI BANK LIMITED BALANCE SHEET [As at 31 December 2021] Particulars PROPERTY AND ASSETS Cash in hand Note(s) Balance with other bank and financial institutions In Bangladesh Outside Bangladesh 4 Placement with bank and other financial institutions Investments in shares & securities (Annexure-B) 5 6 Other Liabilities Total Liabilities Capital/Shareholders' Equity Paid-up capital Statutory reserve Other reserve Retained earnings Total Shareholders' Equity Total Liabilities & Shareholders' Equity 314 GIB Annual Report 2021 735,621,228 11,087,302,742 11,822,923,970 93,409,074 80,971,566 174,380,640 3,293,177,219 3,011,961,805 7,303,217,054 1,507,758,431 8,810,975,484 7,300,613,167 270,200,388 7,570,813,555 105,782,681,421 1,304,291,889 107,086,973,310 87,412,938,196 5,496,232,247 92,909,170,443 2,374,914,072 4,396,715,871 47,385,200 132,810,304,907 2,075,509,392 3,323,041,954 14,313,361 120,902,115,120 219,871,604 1,382,375,182 6,506,906,127 105,282,008,914 6,549,212 5,453,125,751 556,872,224 117,805,462,228 4,679,812,754 98,027,950,724 2,744,275 3,620,030,873 418,951,059 106,749,489,685 13 7,024,214,312 125,049,548,145 6,070,251,006 114,202,115,873 14.2 15 16 17 5,154,187,500 1,616,183,345 990,385,917 7,760,756,762 132,810,304,907 4,908,750,000 ,130,977,828 660,271,419 6,699,999,247 120,902,115,120 7 General investment etc. Bills purchased and discounted Liabilities and Capital Liabilities Placement from bank and other financial institutions Deposits and other accounts Mudaraba Savings Deposits Mudaraba Term Deposits Other Mudaraba Deposits Al-Wadiah Current Deposit & Other Accounts Bills Payable 1,094,962,589 5,112,676,296 6,207,638,885 165,835,732 426,689,134 592,524,866 Government Others Fixed assets including premises Other assets Deferred tax asset Non-banking assets Total assets 31 Decemner 2020 3 Cash in hand (including foreign currency) Balance with Bangladesh Bank & it's agent bank(s) (including foreign currency) Investments Amount in Taka 31 Decemner 2021 8 9 13.5 10 11 12
317. GLOBAL ISLAMI BANK LIMITED BALANCE SHEET [As at 31 December 2021] Particulars Note(s) Amount in Taka 31 Decemner 2021 31 Decemner 2020 OFF - BALANCE SHEET EXPOSURES Contingent liabilities 18 Acceptances & endorsements Letters of guarantee Irrevocable letters of credit (including back to back bill) Bills for collection Other contingent liabilities Total 18.1 18.2 18.3 91,803,562 4,198,660,748 886,375,955 5,176,840,264 708,220,012 4,098,928,456 363,565,245 5,170,713,713 - - 5,176,840,264 5,170,713,713 15.06 13.00 Other commitments Documentary credits, short term and trade related transactions Forward assets purchased and forward deposits placed Undrawn note issuance, revolving and underwriting facilities Undrawn formal standby facilities,credit lines and other commitments Total Total off-balance sheet items including contingent liabilities Net Asset Value per Share [previous year's figure restated] 40(a) Accompanying notes form an integral part of these financial statements. Director Director Director Managing Director Signed in terms of our report of even date Dhaka, Bangladesh Date: 27 APR 2022 For and on behalf of Hoda Vasi Chowdhury & Co. Chartered Accountants Showkat Hossain, FCA Senior Partner Enrollment No. 0137 DVC : 2204270137AS154589 GIB Annual Report 2021 315
318. GLOBAL ISLAMI BANK LIMITED PROFIT AND LOSS ACCOUNT [For the Particulars year ended 31 December 2021] Note(s) Amount in Taka 31 December 2021 31 December 2020 Operating income Investment income Less: Profit paid on deposits Net Investment Income 20 21 13,029,982,174 8,013,886,814 5,016,095,361 12,048,740,165 9,089,482,061 2,959,258,104 Income from investment in shares/securities Commission, exchange and brokerage Other operating Income 22 23 24 210,087,025 59,592,117 133,406,140 403,085,282 5,419,180,642 998,683,928 69,065,263 63,668,406 1,131,417,597 4,090,675,701 Salaries and allowances Rent, taxes, insurances, electricity etc. Legal expenses Postage, stamps, telecommunication etc. Stationery, printings, advertisements etc. Chief executive's salary & fees Directors' fees & expenses Shariah supervisory committee's fees & expenses Auditors' fees Charges on investment losses Depreciation & repairs of bank's assets Zakat expenses Other expenses Total Operating Expenses 25 26 27 28 29 30 31 32 33 34 35 36 37 1,415,955,082 193,435,465 11,989,243 44,426,040 41,515,676 15,590,806 8,352,956 190,000 1,955,000 546,690,020 46,214,231 409,759,806 2,736,074,324 1,055,947,415 169,235,276 1,525,132 29,912,876 34,118,320 13,742,003 5,205,707 255,110 402,500 481,953,012 397,612,362 2,189,909,713 Profit / (Loss) before Provision 20 2,683,106,318 1,900,765,988 38 243,280,776 (26,386,911) 816,981 (1,359,100) 19,953,800 20,773,188 257,078,734 (176,386,077) 158,813,901 (26,454,039) 140,812,760 96,786,545 2,426,027,584 1,803,979,443 (33,071,840) 1,139,710,520 1,106,638,680 1,319,388,904 53,792,777 720,900,283 774,693,060 1,029,286,383 Total Operating Income Operating expenses Provision on classified investment Provision on unclassified investment Provision on off-Balance Sheet Special general provision-COVID-19 Provisions on Investment in Securities Other Provisions-Other Asset Total provision Total Profit / (Loss) before tax Provision for income tax Deferred tax Current tax Net Profit/(Loss) after Tax 316 GIB Annual Report 2021 39 39(a)
319. GLOBAL ISLAMI BANK LIMITED PROFIT AND LOSS ACCOUNT [For the Particulars year ended 31 December 2021] Note(s) Amount in Taka 31 December 2021 31 December 2020 Profit available for appropriation Less: appropriation Statutory reserve General reserve Dividend-cash Start-up fund Dividend-stock Retained surplus 15 17 Earnings per share (EPS) [previous year's figure restated] 40 485,205,517 13,193,889 820,989,498 1,319,388,904 360,795,889 245,437,500 10,292,864 245,437,500 167,322,630 1,029,286,383 2.56 2.00 Accompanying notes form an integral part of these financial statements. Director Director Director Managing Director Signed in terms of our report of even date For and on behalf of Hoda Vasi Chowdhury & Co. Chartered Accountants Dhaka, Bangladesh Date: 27 APR 2022 Showkat Hossain, FCA Senior Partner Enrollment No. 0137 DVC : 2204270137AS154589 GIB Annual Report 2021 317
320. GLOBAL ISLAMI BANK LIMITED CASH FLOW STATEMENT [For the year ended 31 December 2021] Particulars Note(s) 31 December 2020 11,874,107,246 (6,936,897,760) 211,477,300 1,033,475 59,592,117 (1,431,545,888) (41,515,676) (897,590,133) 132,083,830 (720,973,711) 2,249,770,800 11,890,961,718 (9,391,301,210) 1,071,207,510 2,475,050 69,065,263 (1,069,689,418) (34,118,320) (714,513,813) 63,668,406 (609,135,677) 1,278,619,509 (2,603,887) (14,177,802,867) 171,853,720 (1,162,503,578) 9,978,983,490 349,493,839 (4,842,579,283) 3,608,618,565 (10,543,572,821) 120,063,944 2,359,267,515 9,354,688,776 1,245,036,243 6,144,102,222 A) Net cash from/used in operating activities Cash flows from investing activities Proceeds from sale of securities Payment for purchase of securities Share money subscription Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase/Sale of subsidiaries (2,592,808,483) 7,422,721,731 684,009 (1,238,242,051) (841,943,730) 1,822,310 - 402,529 18,975,000 B) Net cash used in investing activities Cash flows from financing activities Dividend paid Receipts from issue of debt instruments Payment for redemption of debt instruments Receipts from issuing ordenary share/rights share (2,077,679,463) (1,708,467,921) (245,437,500) - - (245,437,500) - (4,915,925,445) 5,714,253,810 - - 15,009,266,415 9,295,012,605 10,093,340,970 15,009,266,415 Cash flows from operating activities Investment income receipt in cash Profit paid on deposits Income from investment Dividends receipts Fees and commission receipts in cash Recovery form written off investments Cash payments to employees Cash payments to suppliers Income tax paid Receipts from other operating activities (item-wise) Payments for other operating activities (item-wise) Operating profit before changes in operating assets: Changing in operating assets and liabilities Increase/Decrease of net trading Increase/Decrease of investment and advances to customers Increase/Decrease of other assets (item wise) Increase/Decrease of deposits from other banks/borrowings Increase/Decrease of deposits received from customers Increase/Decrease of trading liability Increase/Decrease of other liability on account of customers Increase/Decrease of other liabilities 41 42 43 44 C) Net cash from financing activities D) Net increase / (decrease) in cash and cash (A+ B + C) E) Add: Effects of exchange rate changes on cash and cash equivalents F) Add: Cash and cash equivalents at beginning of the year G) Cash and cash equivalents at end of the year (D+E+F) 318 Amount in Taka 31 December 2021 GIB Annual Report 2021 45 (1,727,845,450)
321. GLOBAL ISLAMI BANK LIMITED CASH FLOW STATEMENT [For the year ended 31 December 2021] Particulars Note(s) Cash and cash equivalents at end of the year Cash in hand (including foreign currencies) Money at call and short notice Prizebond Balance with Bangladesh Bank and its agent bank (s) Balance with other bank and financial institutions Placement with bank and other financial institutions 3.1 3.2 Amount in Taka 31 December 2021 31 December 2020 1,094,962,589 5,112,676,296 592,524,866 3,293,177,219 10,093,340,970 735,621,228 11,087,302,742 174,380,640 3,011,961,805 15,009,266,415 Accompanying notes form an integral part of these financial statements. Director Director Director Managing Director GIB Annual Report 2021 319
322. 320 GIB Annual Report 2021 2 - - (13,193,889) 7,760,756,762 (13,193,889) 990,385,917 (0) 990,385,917 - - Exchange Equalization Account Total Director - Dividend Equalization Account Previous Year 7,760,756,762 - Managing Director - - Current Year - Investment Loss Offsetting Reserve Director 1,616,183,345 - - - Director 5,154,187,500 General Reserves *General/Other Reserves: Total Shareholders' Equity as at 31 December 2021 - - - (485,205,517) Less: 50% of Assets Revaluation Reserve 1,616,183,345 - - (245,437,500) - 1,319,388,904 - 5,154,187,500 485,205,517 (245,437,500) (245,437,500) Add: General Provision for Unclassified Investment Total Shareholders' Equity as at 31 December 2021 Transfer to start-up fund Transfer to statutory reserve Issue of Share Capital Cash dividend Stock dividend 1,319,388,904 - Net Gain and Losses not recognized in the income statement 245,437,500 - Net Profit for the period - 6,699,999,247 8(2+3+4+5+6+7) Currency translation difference - 7 660,271,419 Surplus/(Deficit) on account of Revaluation Investments - Total Taka - 6 Retained Earnings - 5 Asset Revaluation Reserve Surplus/(Deficit) on account of Revaluation Properties - 4 1,130,977,828 *General/Other Reserves Restated Balance 3 Statutory Reserve - 4,908,750,000 Share Premium Account year ended 31 December 2021] Changes in Accounting Policy Balance as at 01 January 2021 1 Particulars Paid-up Capital GLOBAL ISLAMI BANK LIMITED STATEMENT OF CHANGES IN EQUITY [For the
331. 2 .1.12 Liquidity statement Liquidity Statement has been prepared based on the residual/remaining maturity of assets and liabilities as on 31 December 2020 as per the guidelines for islamic banking issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular No.14 dated 25.06.2003 as follows: i) Balance with other banks and financial institutions, etc. are on the basis of their respective maturity term; ii) Investments in shares & securities are on the basis of their respective maturity; iii) General investments are on the basis of their recovery/repayment schedule; iv) Fixed assets [property, plant & equipment] are on the basis of their useful lives; v) Other assets are on the basis of their realization/amortization; vi) Deposits and other accounts are on the basis of their maturity and payments; vii) Provisions and other liabilities are on the basis of their adjustment/settlement; viii) Due to perpetual in nature/maturity, Mudaraba Perpetual Bond (MPB) is reported under maturity more than 5 (five) years. 2.1.13 Changes in accounting policies The Bank changes its accounting policy only if the change is required by IFRS or Bangladesh Bank Guidelines or results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the Bank’s financial position, financial performance or cash flows. Changes in accounting policies is to be made through retrospective application by adjusting opening balance of each affected components of equity i.e. as if new policy has always been applied. 2.1.14 IFRS-16: Lease In January 2016, the International Accounting Standards Board (IASB) issued IFRS-16. IFRS-16 replaces IAS-17, IFRIC 4, SIC 15 and SIC 27 which sets out the principles for recognition, measurement, presentation and disclosure of leases which is effective from annual reporting periods beginning on or after 01 January 2019. Global Islami Bank Limited has applied IFRS 16: “xs” for the first time with the date of initial application of 01 January 2020 using modified retrospective approach where the bank measured the lease liability at the present value of the remaining lease payments and recognized a right-of-use asset at the date of the initial application on a lease by lease basis.As IFRS-16 supersedes IAS-17 Lease, the bank has made recognition, measurement and disclosure in the financial statements-2020 both as Lessee and Lessor as per IFRS-16. Bank as lessee: "The bank assesses at initiation of a contract whether the contract is, or contains a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange of consideration, then the bank consider the contract as a lease contract. The bank as a lessee applies a single recognition and measurement approach for all leases, except for short-term leases, or, and lease of low value of assets. The bank recognizes lease liabilities to make lease payment and right-of-use assets representing the right to use the underlying assets. If tenor of a lease contract does not exceed twelve months from the date of initiation/application, the bank considers the lease period as short term in line with the recognition threshold of ROU assets as per FA policy of the bank. The Bank determine incremental borrowing rate to calculate the ROU assets and depreciate the asset over the useful life by straight line method. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Bank, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is premeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. The Bank has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included other liabilities. GIB Annual Report 2021 329
332. Right-of-use assets (ROU): "The bank recognises the right-of-use (ROU) assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). ROU assets are measured at cost less any accumulated depreciation and impairment of losses and adjusted for any measurement of lease liabilities. The cost of ROU assets includes the amount of lease liabilities recognised, initial direct cost incurred, and lease payment made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight line basis over the lease term, or remaining period of the lease term. The bank assessed all lease contracts live in 2020 and recognised as ROU of assets of all leases, except short term and low value of assets as guided by Banks’ own policy set as per IAS-16 and IFRS-16. The ROU assets are presented in the Note 8.00 of these financial statements. " Lease Liabilities (Bank as a lessee): "At the commencement of the lease, the bank recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed and variable lease payment (less any adjustment for initial payment), and amount is expected to be paid under residual value of guarantees. The lease liabilities are presented in the Note 13.0 of these financial statements. Bank as a lessor: "Leases where the bank does not transfer substantially all of the risk and benefit of ownership of any asset are classified as operating assets. Rental income is recorded as earned based on the contractual term of the lease. However, the Bank did not hold any such assets in 2020." 2.1.14 (a) Recognition of Lease by the Bank Global Islami Bank Limited has applied IFRS 16 in 01 January 2020 using modified retrospective approach where the bank measured the lease liability at the present value of the remaining lease payments and recognized a right-of-use asset at the date of the initial application on a lease by lease basis. But among 158 branches and sub-branches ,GIB has applied IFRS-16 on only 29 branches. 2.1.15 Changes in accounting estimates Estimates arise because of uncertainties inherent within them, judgment is required but this does not undermine reliability. Effect of changes of accounting estimates is included in profit or loss account. 2.2 Summary of significant accounting policies Accounting policies are determined by applying the relevant guidelines of Bangladesh Bank as well as the relevant IFRS. Where there is no available guidelines of BB and IFRS, management uses its judgment in developing and applying an accounting policy that results in information that is relevant and reliable. The Bank selects and applies its accounting policies for a period consistently for similar transactions, other events and conditions, unless IFRS or Bangladesh Bank guidelines specifically requires or permits categorization of items for which different policies may be appropriate. The accounting policies set out below have been applied consistently in all material respects to all periods presented in these financial statements: 2.3 Cash and cash equivalents Cash and cash equivalents include notes and coins in hand and at ATM, balances held with Bangladesh Bank and its agent bank, balance with other banks and financial institutions which are not ordinarily susceptible to change in value. 330 GIB Annual Report 2021
333. 2 .4 Investment in shares and securities Investment in shares and securities (other than Investment in Bangladesh Government Islamic Investment Bond) are initially recognised at cost and subsequently measured and accounted for depending on their classification criteria as either held to maturity or held for trading. Transaction costs that are directly attributable to the acquisition added to the initial cost except for the investment classified as held for trading where they should be recognised in profit or loss. Investments in quoted and unquoted shares are revalued at the year-end at market price and at net assets value (NAV) of last audited balance sheet respectively. As such, provision is made against the diminution in value of investments netting off gain /loss arises from the market of the securities. Investment in subordinated bond is measured both initially and subsequently at cost. 2.4.1 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 accredited, using the effective or historical yield. Any increase in value of such investments is booked to equity but decrease to profit and loss account. 2.4.2 Investment- Initial recognition and subsequent measurement Investment class Initial Recognition Measurement after initial recognition Recording of Changes Govt. treasury securities BGIIB/Sukuk Cost Cost None Debenture/Bond Cost Cost 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) of last audited financial statements Loss to profit and loss account but no unrealized gain booking. 2.5 Investments 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 are 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. 2.6 Fixed assets [Property, plant & equipment and intangibles] 2.6.1 Property, plant and equipment 2.6.2 Recognition The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits will flow to the Bank and the cost of the item can be measured reliably. GIB Annual Report 2021 331
334. 2 .6.3 Measurement at recognition An item of property, plant and equipment that qualifies for recognition as an asset is measured at its cost. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. The cost of a self-constructed asset is determined using the same principles as for an acquired asset. 2.6.4 Elements of costs and subsequent costs Cost includes purchase price (including import duties and non-refundable purchase taxes), directly attributable costs to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management and the initial estimate of the cost of dismantling and removing the item and restoring the site on which it is located. Costs of day to day servicing (repairs and maintenance) are recognized as expenditure as incurred. Replacement parts are capitalized, provided the original cost of the items they replace is derecognized. 2.6.5 Measurement of property, plant & equipment after recognition Cost model After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated impairment losses. Revaluation model The revaluation model requires an asset, after initial recognition, to be measured at a revalued amount, which is its fair value less subsequent accumulated depreciation and impairment accumulated losses. Where an asset’s carrying amount is increased as a result of a revaluation, the increase is recognized in equity under the heading of revaluation surplus. However, the increase is recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. Where an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognized in profit or loss. However, the decrease is recognized in equity to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in equity reduces the amount accumulated under the heading of revaluation surplus. The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings when the asset is derecognized. However, some of the surplus is transferred as the asset is used by the Bank. In such a case, the amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost. 2.6.6 Derecognition of property, plant and equipment The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is included as other income in profit or loss when the item is derecognized. 2.6.7 Depreciation The depreciation charge for each period is recognized in profit or loss unless it is included in the carrying amount of another asset. Depreciation of an asset begins when it is installed and available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized. The residual value and 332 GIB Annual Report 2021
335. the useful life of an asset is reviewed at least at each financial year-end and , if expectations differ from previous estimates, the change(s) shall be accounted for as a change in an accounting estimate. Depreciation is calculated based on the cost/revalued amount of items of fixed assets [property, plant & equipment] less their estimated residual values using either of straight-line method (SLM) or reducing balance method (RBM) over their estimated useful lives and recognized in profit and loss. Land is not depreciated. Rates of depreciation considering the useful life of respective assets are as follows: Items Method Rates Furniture & Fixtures Straight-line 10% 10 Machineries and equipment Straight-line 20% 5 Motor vehicle Straight-line 20% 5 Computer and peripheral Straight-line 20% 5 Automated Teller Machines Straight-line 20% 5 Books and journals Straight-line 20% 5 2.7 Estimated useful life (Years) Intangible assets 2.7.1 Recognition The recognition of an item as an intangible asset requires the Bank to demonstrate that the item meets the definition of an intangible asset and the recognition criteria. An intangible asset is recognized as an asset if, and only if, it is probable that expected future economic benefits that are attributable to the asset will flow to the Bank and the cost of the item can be measured reliably. 2.7.2 Measurement An intangible asset is measured at cost less any accumulated amortizations and any accumulated impairment losses. Subsequent expenditures are likely to maintain the expected future economic benefits embodied in an existing intangible asset rather than meet the definition of an intangible asset and the recognition criteria. Therefore, expenditure incurred after the initial recognition of an acquired intangible asset or after completion of an internally generated intangible asset is usually recognized in profit or loss as incurred. The rates used for amortizing intangible assets is 20.00%. 2.7.3 Amortization The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life. Amortization begin when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortization ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized. An intangible asset with an indefinite useful life is not amortized. 2.7.4 Impairment of Fixed assets [property, plant & equipment and intangibles] Recognizing and measuring impairment loss Where the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss on a non-revalued asset is recognized in profit or loss. However, an impairment loss on a revalued asset is recognized directly in equity to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. Such an impairment loss on a revalued asset reduces the revaluation surplus for that asset. The Bank assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Bank estimates the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, the Bank tests an intangible asset with an indefinite useful life or an intangible asset not yet available for use for impairment annually. GIB Annual Report 2021 333
336. 2 .8 Other assets Other assets include all other financial assets, other income receivable, advance against expenses etc. 2.9 Non-banking assets Non-banking assets are acquired on account of the failure of a client to repay the investment in time after receiving the decree from the court regarding the right and title of the mortgaged property. 2.10 Placement from banks and other financial institutions Placement from banks and other financial institutions are stated in the financial statement at principal amount of the outstanding balance. 2.11 Deposits and other accounts Deposit and other accounts include Al Wadeeah current deposit as well as savings, term and other Mudaraba deposits. Deposits by customers and banks are recognized when the Bank enters into contractual agreements with the counterparties. These items are brought to Financial Statements at the gross value of the outstanding balance. 2.12 Provisions 2.12.1 Provision for investments Provision for investments is made on the basis of quarter-end review by the management and instructions contained in BRPD Circular no. 14 dated 23 September 2012, BRPD Circular no. 04 dated 29 January 2015, BRPD Circular no. 08 dated 02 August 2015, BRPD Circular No.12, dated 20 August, 2017, BRPD Circular No. 12 dated 20 August, 2017, BRPD Circular No. 01 dated 20 February, 2018, BRPD Circular No. 01 dated 20 February, 2018, BRPD circular no. 03 dated 21 April 2019, BRPD circular no. 07 dated 19 March 2020 BRPD circular no. 56 dated 10 December 2020,BRPD circular no. 05 dated 24 March 2021 & BRPD circular no. 19 dated 26 August 2021 Details are given below: Particulars Standard SMA SS DF BL Standard SMA SS DF 0.25% 0.25% 20% 50% 100% 0.25% 0.25% 20% 50% 100% Investment for Housing Finance 1% 1% 20% 50% 100% 1% 1% 20% 50% 100% Investment for Professionals 2% 2% 20% 50% 100% 2% 2% 20% 50% 100% Small and Medium Enterprise (SME) Financing Consumer Classification/Percentage (%) of provision requirement 31-Dec-21 31 December 2020 Particulars Classification/Percentage (%) of provision requirement 31-Dec-21 Standard Consumer Other than Investment for Housing Finance & Professionals All Other (Except Short-term Agricultural and Micro-Credits) Short-term Agricultural and Micro-Credits Investment to Stock Dealers & Stock Broker Special general provision for COVID 19: Unclassified loans/investments & advances 334 GIB Annual Report 2021 BL 31 December 2020 SMA SS DF 2% 2% 20% 50% 100% 5% 5% 20% 50% 100% 1% 1% 20% 50% 100% 1% 1% 20% 50% 100% 1% 2% 5% 20% 2% 50% BL Standard 100% 1% 100% 2% SMA SS DF 5% 20% 1% BL 100% 50% 100%
337. 2 .12.2 Provision for off-balance sheet exposures In compliance with BRPD circular no. 14 dated 23 September 2012, BRPD Circular No.7 dated 21 June 2018 and BRPD Circular No.13 dated 18 October 2018 the Bank has been maintaining provision against off-balance sheet exposures (mainly contingent assets/liabilities) Note-13.1 (e) 2.12.3 Provision for other assets Provision for other assets is made as per the instructions made in the BRPD circular No. 14 dated 25 June 2001 and other instructions made by Bangladesh Bank. (Note- 13) 2.12.4 Provision for nostro accounts According to Foreign Exchange Policy Department of Bangladesh Bank vide the circular letter No. (FEPD)/01/2005-677 dated 13 September 2005, Bank is not required to make provision regarding the unreconciled debit balance of nostro account as on the reporting date in these financials as there are no unreconciled outstanding entries for more than three months. 2.12.5 Other provisions, accruals and contingencies 2.12.6 Recognition of provisions, accruals and contingencies A provision is recognized when the Bank has a present obligation (legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; a reliable estimate can be made of the amount of the obligation. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amount due to employees. Contingent liabilities are not recognized in the financial statements. Disclosure on contingent liabilities has been made on the face of balance sheet under 'Off-balance Sheet Items' as per BRPD circular No. 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009. 2.12.7 Measurement of provision The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. 2.12.8 Changes and uses of provisions Provisions is reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. A provision is used only for expenditures for which the provision was originally recognized. Only expenditures that relate to the original provision are set against it. Setting expenditures against a provision that was originally recognized for another purpose would conceal the impact of two different events. 2.13 Employee benefits The Bank provides various long-term and short-term benefits to the employees under different schemes. Details of the benefits plans are given below: 2.13.1 Provident fund A “Defined Contribution Plan” is a post-employment benefit plan under which an entity pays fixed contribution into a separate entity and will have no legal constructive obligation to pay further amounts. Provident fund benefit is given to the eligible staffs of the Bank in accordance with the rules of the provident fund duly recognized by the National Board of Revenue of Bangladesh. The Fund is administered by the Board of Trustees and is funded by fixed contributions equally from the employees and the Bank. The fund is managed separately from the Bank’s assets, as per rules of the fund & section 399 of the Companies Act 1994. GIB Annual Report 2021 335
338. 2 .13.2 Gratuity fund Gratuity benefits are given to the staff of the Bank in accordance with the approved Gratuity Fund Rules. National Board of Revenue has approved the gratuity fund as a recognized gratuity fund and the fund is operated by a separate Board of Trustees. Employees are entitled to get the benefit after completion of minimum 06 (six) years of service in the Bank. The gratuity is calculated on the basis of last basic pay of every employee in service as per IAS-19 “Employee Benefits”. Gratuity fund is a “Defined Benefit Plan” and payable as per the modalities of the rules. Gratuity so calculated is transferred to the fund and charged to expenses of the Bank. 2.13.3 Other Employee Benefits Other employee benefits include which are not included in short-term employee benefits, post-employment benefits and other termination benefits. 2.13.4 Benevolent Fund The Benevolent Fund for the regular and confirmed employee’s of Global Islami Bank Limited. This fund is mainly used for payment of scholarship to the meritorious students among the children of GiBL’s officers and sub-staff, to allow short-term quard/grant for the unexpected and certain needs of the staff of GiBL and their family like accident, clinical treatment, marriage ceremony, etc. 2.13.5 Workers' Profit Participation Fund (WPPF) SRO-336-AIN/2010 dated 5-10-2010 issued by the ‘Ministry of Labour and Employment’ declares the status of business of certain institutions and companies along with Bank & insurance companies as “Industrial Undertakings” for the purposes of Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) which 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 2018)’, Banks in Bangladesh took up the issue collectively and sought opinion from ‘Association of Bankers Bangladesh Limited (ABB)’ on the same. ABB wrote a letter to the ‘Ministry of Finance’ of 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 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 period ended on 31 December 2021. 2.14 Taxation The tax expense for the period comprises current tax and deferred tax. Tax is recognized in the income statement, except in the case it relates to items recognized directly in equity. In this case, the tax is also recognized directly in equity. 2.14.1 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 has been made on taxable income of the Bank as per following rates: 336 GIB Annual Report 2021
379. Note (s) 28 Postage, stamps, telecommunication etc. Postage Data communication Telegram, Fax, Telex & Internet charge Telephone charges Mobile phone charges 29 6,953,000 5,424,006 3,213,800 15,590,806 5,865,000 5,865,003 2,012,000 13,742,003 2,367,200 161,380 5,824,376 8,352,956 950,400 77,022 4,178,285 5,205,707 190,000 190,000 255,110 255,110 1,955,000 402,500 - - Auditors' fees Auditors Fees 34 5,057,424 5,561,764 3,394,797 2,575,618 17,528,717 34,118,320 Shariah supervisory committee's fees & expenses Shariah Council Meeting Expenses 33 6,284,666 10,474,174 4,268,888 4,185,944 16,302,003 41,515,676 Directors' fees & expenses Directors' Fee Meeting Expenses Directors travelling expenses 32 6,916,335 19,294,334 38,606 554,827 3,108,774 29,912,876 Chief executive's salary & fees Basic Salary Allowances Bonus 31 9,275,133 31,340,187 500 570,527 3,239,693 44,426,040 Stationery, printings, advertisements etc. Table Stationery Printing Stationery Security Stationery Computer Stationery Publicity and Advertisement 30 Amount in Taka 2021 2020 Charges on investment losses GIB Annual Report 2021 377
380. Note (s) 35 Amount in Taka 2021 2020 Depreciation & repairs of bank's assets a) Depreciation of Assets (Annexure-C) Furniture & Fixtures Office Equipment Computer & Network Equipment Vehicles Right of use Assets (ROU)* Automated Teller Machine Books b) Amortization of Assets (Annexure B) Software-Core Banking c) Repair on Assets Office Equipment Office Furniture & Fixtures Vehicles 65,551,002 64,281,007 62,929,659 9,996,935 306,656,498 11,060,978 - 55,303,222 61,466,156 52,663,700 18,034,989 272,967,925 12,083,492 107,325 16,409,026 536,885,105 4,339,489 476,966,298 7,812,908 566,430 1,425,577 9,804,915 546,690,020 3,458,617 179,732 1,348,365 4,986,714 481,953,012 * As per note 2.1.14, in accordance with IFRS - 16, the Bank has recognized Right of use Assets (ROU) and related depreciation is shown above. 36 Zakat expenses Zakat Expenses 378 GIB Annual Report 2021 46,214,231 46,214,231 -
381. Note (s) 37 Other expenses Petrol, Oil and Lubricants Entertainment Donation and Subscription Traveling and Conveyance Expenses on Training, Seminer & Workshop Car expenses Computer software maintenance Expenses for corporate social responsibility SWIFT Charge Service and other charges ATM operation expenses Wages to casual labour Expenses for honorarium Holiday banking allowances Expenses for IPO Medical expenses Expenses for sponsorship Cash carrying charge Papers & Periodicals Uniform & Liveries Bank and NBFI Charges Business development & Promotion Security Service- Out-sourcing Branch Opening Expenses GIB Card expenses Laundry, Washing and Cleaning Loss on disposal of fixed assets Loss on Disposal of Securities Tax expenses for the settlement of income year 2015 & 2017 Miscellaneous Expenses 38 Amount in Taka 2021 2020 7,710,772 13,588,237 3,858,736 9,397,504 2,612,055 37,810,790 48,154,166 21,185,745 4,831,993 24,770,637 16,526,459 452,460 435,000 7,485,300 26,210 8,350,705 393,323 5,145,152 460,547 2,259,821 1,206,725 7,420,142 90,433,271 8,320,020 9,811,760 9,026,133 5,153,945 1,791,473 47,694,919 13,445,805 409,759,806 7,027,480 7,024,999 5,302,609 8,423,677 2,410,970 14,725,158 40,073,426 95,457,804 3,189,524 23,839,040 24,608,097 285,850 475,000 50,984,839 8,221,309 1,985,931 4,742,856 293,318 2,407,285 699,050 6,289,622 40,857,882 3,283,337 6,823,380 6,679,865 31,500,054 397,612,362 243,280,776 (26,386,911) 816,981 (1,359,100) 19,953,800 20,773,188 257,078,734 (176,386,077) 158,813,901 (26,454,039) 140,812,760 96,786,545 Provision for investment, off-Balance sheet and others Provision on classified investment Provision on unclassified investment Provision on off-Balance Sheet Special general provision-COVID-19 Provisions on Investment in Securities Other Provisions-Other Asset Provision for other assets is made as per the instructions made in the BRPD circular No. 14 dated 25 June 2001 GIB Annual Report 2021 379
382. Note (s) 39 Deferred tax Closing deferred tax asset Opening deferred tax asset Deferred tax Income during the period 39(a) Note-13.4 47,385,201 14,313,361 (33,071,840) 14,313,361 68,106,138 53,792,777 Note-13.4 Note-13.3 (33,071,840) 1,139,710,520 1,106,638,680 53,792,777 720,900,283 774,693,060 1,319,388,904 515,418,750 2.56 1,029,286,383 515,418,750 2.00 Tax expenses Deferred tax Current tax 40 Amount in Taka 2021 2020 Earnings per share (EPS) [previous year's figure restated] Calculation of Earnings Per Share Note- 2.20 Net Profit after Tax Number of Ordinary Shares outstanding Earnings Per Share (EPS) [previous year's figure restated] Earnings per share has been calculated in accordance with IAS - 33: "Earnings Per Share (EPS)". 40(a) Net asset value (NAV) per share Net Assets Value (Banks') No. of Outstanding Share Net Asset Value (NAV) Per Share [previous year's figure restated] 40(b) Net Operating Cash Flow per Share (NOCFPS) [previous year's figure restated] (2,592,808,483) 515,418,750 7,422,721,731 515,418,750 (5.03) 14.40 4,396,459 127,687,371 132,083,830 2,898,596 60,769,810 63,668,406 Receipt from other operating activities (Note-26) Postage & Telex Charge Recovery Other charges (except income from sale of fixed assets) 380 6,699,999,248 515,418,750 13.00 Net operating cash flows per share (NOCFPS): Net cash flows from operating activities No. of Outstanding Share 41 7,760,756,762 515,418,750 15.06 GIB Annual Report 2021
383. Note (s) 42 Amount in Taka 2021 2020 Payment for other Operating activities Rent, Taxes, Insurance, Lighting etc. Legal Expenses Postage, Stamp, Telegram & Telephone Directors' Fee & Expenses Shariah Supervisory Committee's Fees & Expenses Auditors' Fee Repair, Maintenance of Bank's Assets Zakat Expenses *Other Expenses (Note-26) (Note-37) (Note-28) (Note-30) (Note-32) (Note-33) (Note-35.c) (Note-36) 193,435,465 11,989,243 44,426,040 8,352,956 190,000 1,955,000 9,804,915 46,214,231 404,605,861 720,973,711 169,235,276 1,525,132 29,912,876 5,205,707 255,110 402,500 4,986,714 397,612,362 609,135,677 36,176,942 1,895,440 239,626,265 15,069,531 12,045,246 22,728,127 24,043,287 2,971 12,074,444 61,294 16,475,279 380,198,825 30,594,867 1,506,630 246,457,670 14,979,531 12,781,014 131,365,033 59,801,215 6,366,830 4,321 48,195,434 552,052,545 30,594,867 1,506,630 246,457,670 14,979,531 12,781,014 131,365,033 59,801,215 6,366,830 4,321 48,195,434 552,052,545 171,853,720 23,044,109 1,086,320 486,178,304 14,979,531 25,902,282 36,323,635 15,539,481 * Total other expeses excep loss on disposal of fiexed assets 43 Cash Increase/ Decrease in Other Assets of the Bank (Note-9) ClosingStock of Stationery, printing, and materials etc.(valued at cost) Stamps (valued at cost) Advance rent Security deposit** Other Prepayments Advance to suppliers* Receivable from Bangladesh Bank for Sanchay Patra payment Receivable from provident fund account Balance with First Security Islami Capital & Investment Limited Balance with Prime Bank Investment Limited Balance with Lanka Bangla Securities Limited Other Receivables OpeningStock of Stationery, printing, and materials etc.(valued at cost) Stamps (valued at cost) Advance rent Security deposit** Other Prepayments Advance to suppliers* Receivable from Bangladesh Bank for Sanchay Patra payment Receivable from provident fund account Balance with First Security Islami Capital & Investment Limited Balance with Prime Bank Investment Limited Balance with Lanka Bangla Securities Limited Other Receivables Cash (Increase)/ Decrease in Other Assets 4,321 69,058,506 672,116,489 120,063,944 GIB Annual Report 2021 381
384. Note (s) 44 Cash Increase/ Decrease in Other Liabilities (Note-13) ClosingProfit Suspense Account Provision for Gratuity Payable for sanchay patra Outstanding Expenses Leased Liabilities as per IFRS - 16 Expenditure and other payable OpeningProfit Suspense Account Provision for Gratuity Payable for sanchay patra Outstanding Expenses Leased Liabilities as per IFRS - 16 Expenditure and other payable Cash Increase/ (Decrease) in Other Liabilities 45 330,564,620 60,650,015 1,121,761,503 18,436,442 1,531,412,580 330,564,620 60,650,015 1,121,761,503 18,436,441 1,531,412,579 349,493,839 172,496,918 47,929,158 37,100,000 28,850,261 286,376,337 1,245,036,243 1,094,962,589 5,112,676,296 3,885,702,085 10,093,340,970 735,621,228 11,087,302,742 3,186,342,445 15,009,266,415 1,319,388,904 1,106,638,680 257,078,734 (1,153,451,178) 1,076,989,053 536,885,105 (897,590,133) 3,831,635 2,249,770,800 1,326,363,388 527,846,848 46,555,752 (82,779,815) (301,819,149) 476,966,298 (714,513,813) 1,278,619,509 Reconciliation of Net Profit after Taxation & Operating Profit before changes in operating assets & liabilities Cash flows from operating activities Net Profit after Taxation Provision for Tax Provision for Invstment, Share & Contingent Liability (Increase)/Decrease profit receivable Increase/(Decrease) Profit Payable on Deposits Depreciation & Amortization of Fixed Assets Income tax paid Loss/Profit on sale of property, plant and equipment Operating Profit before changes in operating assets & liabilities 382 556,811,579 37,950,015 1,160,134,174 126,010,650 1,880,906,417 Cash and Cash Equivalent Cash in Hand Money at call and short notice Prizebond Balance with Bangladesh Bank & Sonali Bank Ltd (as agent of Bangladesh Bank) Balance with Other Banks & Financial Institutions 46 Amount in Taka 2021 2020 GIB Annual Report 2021
385. Amount in Taka 2021 2020 Note (s) 47 Number of employees and support staffs Regular employee Officer and executives Contractual Officer and executives Support staff Total 1,534 1,168 27 451 2,012 24 336 1,528 As per the Schedule XI of the Companies Act, 1994, the number of employees (including contractual employees) engaged for the whole year or part thereof who received more than total remuneration of Tk 36,000 per annum or Tk 3,000 per month were 1450 as at 30 September 2020. 48 Disclosure on Audit Committee a) Particulars of Audit Committee The audit committee of the Board was duly constituted by the Board of Directors of the Bank in accordance with the BRPD circular no. 11 dated 27 October 2013 of Bangladesh Bank. Pursuant to the BRPD circular no. 08 dated 19 June 2011 and BSEC notification no. BSEC/CMRRCD/2006-158/207/Admin/80 dated June 03, 2018 on Corporate Governance, the current Committee is Constituted with the following 05 (Five) members of the Board: Sl No. Status with bank Name Educational Qualification Status with committee Independent Director Chairman Bachelor of Science (B.Sc) Mr. Arif Ahmed Director Member Master of Science (M.Sc) in C.E.M & AP-C.I.M 3 Mr. Subrata Kumar Bhowmick, FCA Director Member M.Com, FCA 4 Mr. Mohammad Shahjahan Meah Director Member Graduate 5 Mr. S.A.M Salimullah Independent Director Member Master of Business Administration (MBA) 1 Mr. Mohammed Kutub Uddowllah 2 b) Meetings held by the Audit Committee during the year by date: Sl No. Meeting no. 1 29th 04-March-2021 2 30th 03-May-2021 3 31st 25-November-2021 4 32nd 14-December-2021 Holding Date GIB Annual Report 2021 383
386. c ) Review by the Audit Committee and Recommendation thereof a) Reviewed the Summary Report on Comprehensive Inspection of different branches of the Bank conducted by the Bangladesh Bank Inspection Team; b) Oversee the financial reporting process and Monitor choice of accounting policies & principles; c) The Committee hold meeting with the external or statutory auditors for review of the year end annual financial statements before submission to the Board for approval or adoption; d) The Committee review along with the management, the annual financial statements before submission to the Board for approval; e) Review along with the management, the quarterly and half yearly financial statements before submission to the Board for approval; f) Scrutinized and evaluated the performance of the existing external auditors of the bank before recommending to the Board for onward placing of the names in the AGM for appointment; g) The Committee reviewed the Management Report on the financial statements of the Bank; h) Monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the IACD Plan and review of the Internal Audit and Compliance Report; i) Review the adequacy of internal audit function and its process to strengthened and creation of a sound compliance culture in the Bank; j) Review the Management’s Discussion and Analysis of Annual Report before disclosing for the Members and other Stakeholders; k) Review statement of all related party transactions submitted by the management; l) Review Management Letters or Letter of Internal Control weakness issued by statutory auditors; m) Whether the rules & regulations of Bangladesh Bank and all other authorities and Bank’s policy guidelines approved by the Board of Directors of the Bank duly complied with or not; n) Review periodic progress report of Internal Audit & Compliance report of the Bank; and o) Oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance of external auditors; 49 Related Party Disclosures As per IAS-24 “Related Party Disclosures”, a related party is a person or entity that is related to the entity (i.e. GIB) that is preparing its financial statements. Related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged as per IAS-24. Related Parties include the Bank's Directors, key management personnel, associates, companies under common directorship etc. as per IAS-24 “Related Party Disclosures”. All transactions involving related parties arising in the normal course of business are conducted at arm’s length at normal commercial rates on the same terms and conditions as third party transactions using valuation modes, as admissible. a) Disclosure of transaction regarding Directors and their related concerns b) Shares issued to Directors and Executives without consideration or exercisable at a discount. 384 GIB Annual Report 2021 Annexure-E Nil
387. c ) Lending Policies to Related Parties Transactions with Bank related person/related parties including Directors are made as per rules and regulations of the Bank Company Act, 1991 as amended and as per circulars issued by Bangladesh Bank time to time including the following general rules: i) Terms & conditions for financial transaction with bank related person/related parties will not be easier than other persons i.e. other investment clients. ii) Prior approval from the majority of Board of Directors shall be required for all financial transactions with bank related person/related parties. iii) The Bank shall not allow funded facilities exceeding 10% of Tier-I capital to the Bank related persons/related parties; real investment facilities shall be considered deducting encashable securities from funded investment. d) Business other than banking business with any related concern to the Directors as per Section 18(2) of the Bank Company Act, 1991. SL i) Particulars Amount Lease agreement made with the Director,Sponsor Director & Independent Director: Name Nature of Transaction Name of Party Shindurpur Branch, Feni Office Rent Mr. Nizam Chowdhuary 351,900 Shindurpur Branch, Feni ATM Booth Rent Mr. Nizam Chowdhuary 62,370 ii) Service receiving companies where the Directors interest subsisted during the year 50 Financial highlights as on 31 December 2021 are shown in Annexure-F Amount in BDT Nil "As per BRPD circular of Bangladesh bank and requirements of ICAB, Global Islami Bank not yet to receive any Audited financial statement from any Investment client of our Bank for online verification through DVS systems from the initiation of the login in the DVS systems. If any audited financial statement is received from any client for the Investment proposal in future, we will verify the statement through DVS systems." 51 Events after the reporting period The Board of directors in its 62nd meetings held on 24 March, 2022 has approved to paid 10% cash dividend to its shareholdersfor the year ended 31 December 2021 . But Bangladesh Bank vide their letter Ref. No: DOS(CAMS)1157/41(Dividend)/2022-2054 dated 18 April 2022 has given their NOC to pay maximam 7% cash & 10% total dividend. 52 Approval of the financial statements The financial statements of the Bank has been approved by the Board of Directors at its 62nd Board meeting held on 24 March, 2022. Director Director Director Managing Director GIB Annual Report 2021 385
388. 386 GIB Annual Report 2021 114 .9331 85.8500 85.8500 85.8500 85.8500 48,190 252,060 1,802 917,896 GBP£ ACU $ ACU $ ACU $ US $ CD CD CD CD CD kookmin Bank, Seoul, korea United Bank of India, Kolkata, India AB Bank, Mumbai, India MCB Bank,Karachi, Pakistan kookmin Bank,Seoul, Korea Total 114.9331 5,694 23,144 GBP£ CD Aktif Bank , Istanbul, Turkey 4,924,769 98.5278 241,289 EURO € CD Aktif Bank , Istanbul, Turkey 85.8500 3,434,694 US $ CD Rate Amount Mashreq Bank, New York Exchange FC Currency Type Account Type Name of the Bank 2020 4,523,388 4,116,448 63,062 4,683,564 114.77 84.80 84.80 84.80 84.8000 53,342 48,543 744 55,231 925,418 4,137,098 21,639,327 154,673 78,801,330 426,689,134 80,971,566 710,959 3,372,462 114.77 6,194 29,384 7,628,941 104.36 73,103 23,773,718 654,480 55,872,742 84.80 658,877 294,868,485 2,660,025 Taka Equivalent Rate Exchange Amount FC Taka Equivalent 2019 Annexure - A GLOBAL ISLAMI BANK LIMITED BALANCE WITH OTHER BANKS-OUTSIDE BANGLADESH (NOSTRO ACCOUNT) [As on 31 December 2021]
389. GIB Annual Report 2021 387 - 1 ,344,060,000 1,336,627,209 5,149,778 Sub Total (iv) (7,432,791) Quoted 500,000,000 500,000,000 100 5,000,000 Beximco Green Sukuk - Quoted Un-Quoted (7,432,791) 250,000,000 5,000 50,000 Perpetual Mudaraba Bond of SJIBL 491,412,209 Un-Quoted 250,000,000 - - Remarks 498,845,000 5,000 99,769 Perpetual Mudaraba Bond of IBBL Subordinated bond of Reliance Finance Limited - - - Un-realized gain/Loss - - - - Market Value - 95,215,000 Total Cost price As on 31 December 2021 7,379,331,192 7,379,331,192 95,215,000 - - - Face Value/ Average cost - 10,000,000 Particulars No. of share as at 31 December 2021 200,002 9 iv) Subordinated Debt Sub Total (iii) iii) Foreign Share Sub Total (ii) ii) Mutual Funds Sub total (i) i) Subsidiary Companies Other than Government Sub Total Government Un-Quoted Un-Quoted Share subscription 37,500,000 - 2,050,000,000 2,050,000,000 Bangladesh Government Islamic Investment Bond (Islamic Bond) 37,500,000 Un-Quoted - 5,251,200,000 5,251,200,000 Bangladesh Government Sukuk Bond (Islamic Bond) Un-Quoted 18,614,138 10,000,000 2 Un-Quoted Preference Shares of Union Capital Limited - Un-Quoted 2,017,054 20,000,000 Remarks 2,017,054 Un-realized gain/Loss 20,000,000 Market Value 100 Total Cost price As on 31 December 2021 200,000 Face Value/ Average cost Annexure-B 18,614,138 Preference Shares of Regent Energy and Power Limited 3 years Treasury Bonds Government Particulars No. of share as at 31 December 2021 GLOBAL ISLAMI BANK LIMITED INVESTMENTS IN SHARES & SECURITIES [As on 31 December 2021]
390. 388 GIB Annual Report 2021 Particulars Sub Total Government Share subscription Treasury bill 364 days Treasury bill 182 days 200 ,002 - 21,614,138 20,000,000 2,017,054 Market Value 781,552,300 37,500,000 7,379,727,305 7,379,727,305 37,500,000 1,508,798,213 1,508,798,213 781,552,300 3,292,425,600 3,292,425,600 21,614,138 20,000,000 2,017,054 Total Cost price As on 31 December 2021 8,810,975,482 8,799,017,481 Treasury bill 91 days 10,000,000 100 Face Value/ Average cost 83,059,080 6,006,000 5,467,000 12,166,000 7,326,000 2,278,080 26,787,500 13,592,000 9,436,500 Market Value 1,431,644,291 1,419,686,289 87,584,291 6,449,667 5,814,048 10,650,772 8,674,867 2,432,035 28,837,863 15,006,389 9,718,650 Total Cost price 1,715,820,000 1,715,820,000 2 200,000 No. of share as at 31 December 2021 29 83 48 289 72 231 188 360 Face Value/ Average cost As on 31 December 2021 Bangladesh Government Sukuk Bond (Islamic Bond) Preference Shares of Union Capital Limited Preference Shares of Regent Energy and Power Limited 3 years Treasury Bonds Government Investments in shares & securities 6,155,380 Total 805,600 5,955,378 Sub Total (v) Sub Total Other than Government (i- v) 220,000 70,000 The City Bank Limited Dutch Bangla Bank Limited 220,000 30,000 United Power Generation & Distribution Company Limited BRAC Bank Limited 33,600 Doreen Power Generation & systems Limited 125,000 80,000 Square Pharmaceuticals Limited Singer Bangladesh Limited No. of share as at 31 December 2021 27,000 Particulars Grameenphone Limited V) Othars GLOBAL ISLAMI BANK LIMITED INVESTMENTS IN SHARES & SECURITIES [As on 31 December 2021] Un-realized gain/Loss - - - - (11,958,001) (11,958,001) (4,525,210) (443,667) (347,048) 1,515,228 (1,348,867) (153,955) (2,050,363) (1,414,389) (282,150) Un-realized gain/Loss Un-Quoted Un-Quoted Un-Quoted Un-Quoted Un-Quoted Un-Quoted Remarks Quoted Quoted Quoted Quoted Quoted Quoted Quoted Quoted Remarks Annexure-B
391. GIB Annual Report 2021 389 Total Sub Total Other than Government (i- v) Sub Total (v) 200,014 12 - 12 v) Others 12 Sub Total (iv) - - - Subordinated bond of Reliance Finance Limited iv) Subordinated Debt Sub Total (iii) iii) Foreign Share Sub Total (ii) ii) Mutual Funds Sub total (i) i) Subsidiary Companies Other than Government Particulars No. of share as at 31 December 2021 - 10,000,000 Face Value/ Average cost GLOBAL ISLAMI BANK LIMITED INVESTMENTS IN SHARES & SECURITIES [As on 31 December 2021] - - - - - - 191,086,250 - 191,086,250 191,086,250 Market Value 7,570,813,555 7,570,813,555 191,086,250 - 191,086,250 191,086,250 Total Cost price As on 31 December 2021 Un-realized gain/Loss - - - - - - - - Un-Quoted Remarks Annexure-B
392. 390 GIB Annual Report 2021 Cost Total as on 31 December 2021 Software Intangible assets 721 ,136,620 120,807,111 120,807,111 841,943,730 113,985,240 113,985,240 3,355,372,955 234,792,351 234,792,351 4,177,410,269 19,906,416 3,942,617,919 - 19,906,416 - 3,241,387,715 514,733,599 1,713,342,475 128,035 60,173,802 213,334,211 805,000 124,620,742 5,000,000 6,282,737 129,458,960 596,546,868 6,816,555 164,641,985 - 863,110,275 7,961,826 242,203,313 - Closing Balance - Addition During Adjustment the Year During the Year 34,500,572 Opening Balance Furniture and fixture 628,868,788 Machineries and equipment 438,721,438 Motor vehicle 123,338,005 Computer and peripheral 454,687,832 Right of use assets 1,500,008,264 Automated Teller Machine (ATM) 94,958,388 Books and journals 805,000 Tangible assets Name of Assets GLOBAL ISLAMI BANK LIMITED SCHEDULE OF FIXED ASSETS [As on 31 December 2021] 99,371,849 278,644,389 20% 20% 805,000 20% - 11,060,978 16,409,026 16,409,026 1,279,863,563 536,885,105 86,853,230 86,853,230 1,193,010,333 520,476,079 70,972,213 20% 20% 62,929,659 9,996,935 64,281,007 65,551,002 173,260,485 20,251,958 273,334,847 595,392,867 Written Down Value 805,000 82,033,191 - 47,425,768 579,624,423 1,133,718,052 341,473,114 104,368,784 323,212,021 267,717,408 Closing Balance 103,262,256 103,262,256 131,530,095 131,530,095 14,252,471 1,802,496,197 2,374,914,072 - - 14,252,471 1,699,233,941 2,243,383,977 - - - 100,934 5,000,000 5,811,994 3,339,543 Dep. During the Adjustment Year During the Year Depreciation 272,967,925 306,656,498 264,743,008 - 205,505,949 20% Opening Balance 10% Rate Amount in Taka Annexure - C
393. GLOBAL ISLAMI BANK LIMITED NAME OF DIRECTORS AND THEIR INTEREST IN DIFFERENT ENTITIES [As on 31 December 2021] Annexure - D Sl # Name of Directors Status with GIB 1 Mr. Nizam Chowdhury Chairman 2 Mrs. Maimuna Khanam Vice Chairperson 3 Dr. Mohammed Faruque Director 4 Mr. Arif Ahmed representing Hasan Abasan (Pvt.) Limited Director 5 Ms. Farzana Begum representing Shah Amanat Prakritik Gas Company Limited Director 6 Mr. Shahidul Alam representing Fatehabad Farm Limited Director 7 Mr. Subrata Kumar Bhowmick representing Karnaphuli Prakritik Gas Limited Director Entities where they have interest Trade Balance USA Corporation (INC) Kushiara Power Limited Trade Balance Bangladesh Limited US Pharma Aviva Finance Limited Genesis Textiles Accessories & Apparels Limited Northern Islami Insurance Limited Unitex Steel Mills Limited Western Designers Limited Global Synthetic Limited Unitex LP Gas Limited Unitex Petroleum Limited Maimuna Trading Unitex Power Plant Limited Shahella Spinning Mills Limited UNI Paint Industries Limited Omnibus Logistics Limited First Security Islami Bank Limited C&A Fabrics Limited C&A Accessories Limited Blythe Limited Orchard Sweaters Limited Hotel Orchard Plaza Limited Orchard Developer & Construction Limited Bengal Telecom Company Limited Orchard Hotels & Resorts Limited Orchard Industries Limited Mecca Cola Limited Gulf Aviation Limited Indigo Biopharma Limited Royal Aviation Services Limited M/s Arif Traders Sparrow Textiles Limited Union Bank Limited Baraka Farm House Limited M/s. Farzana Trading Enterprise Shah Amanat Prakritik Gas Company Limited Lion Securities & Investments Limited Global Trading Corporation Limited Infinity C.R. Strips Industries Limited Union Bank Limited First Security Islami Bank Limited Kingston Flour Mills Limited M/s. Tazin Enterprise Galco Steel (BD) Limited S. Alam Vegetable Oil Limited Sonali Traders Union Bank Limited Social Islami Bank Limited Al-Arafah Islami Bank Limited Fatehabad Farm Limited First Security Islami Capital Investment Limited Norinco Engineering Limited Not Applicable Status % of Interest President Director Chairman Director Shareholder Director Shareholder Chairperson Director Managing Director Shareholder Chairperson Proprietor Chairperson Director Chairperson Managing Director Shareholder Director Director Director Managing Director Chairman Managing Director Managing Director Managing Director Managing Director Managing Director Managing Director Director Managing Director Propritor Managing Director Shareholder Managing Director Proprietor Managing Director Managing Director Director Director Shareholder Shareholder Director Proprietor Director Managing Director Proprietor Shareholder Shareholder Shareholder Director Shareholder Managing Director 100.00% 15.00% 100.00% 55.50% 5.28% 19.00% 1.82% 50.00% 1.48% 95.00% 18.00% 95.00% 100.00% 40.00% 20.00% 40.00% 18.00% 0.55% 4.10% 0.33% 14.29% 97.45% 14.30% 70.00% 80.00% 66.67% 66.67% 71.50% 64.17% 55.00% 71.06% 100.00% 80.00% 4.91% 75.00% 100.00% 30.00% 0.25% 40.00% 45.00% 5.06% 3.99% 45.00% 100.00% 36.00% 30.00% 100.00% 3.55% 0.37% 0.28% 6.00% 2.57% 15.00% Not Applicable Not Applicable GIB Annual Report 2021 391
394. GLOBAL ISLAMI BANK LIMITED NAME OF DIRECTORS AND THEIR INTEREST IN DIFFERENT ENTITIES [As on 31 December 2021] Annexure - D Sl # Name of Directors 392 Status with GIB 8 Mr. Mohammad Mostan Billah Adil representing WESCO Limited Director 9 Ms. Shahana Ferdous representing Portman Cements Limited Director 10 Mr. Mohammad Shahjahan Meah Director 11 Mr. Bourhanul Hasan Chowdhury representing Modern Properties Limited Director 12 Ms. Rokea Yesmin representing Prasad Paradise Resorts Limited Director 13 Mr. Hasan Mansur representing Unitex Tyre Limited Director 14 Mr. Wahidul Alam Seth representing Global Trading Corporation Limited Director 15 Mr. Mohammed Oheidul Alam representing Bangladesh Petro Chemicals Limited Director Entities where they have interest Status % of Interest Proprietor Managing Director Director Shareholder Managing Director Managing Director Proprietor Director Managing Director Shareholder Shareholder Shareholder Shareholder Shareholder 100.00% 70.00% 5.00% 4.67% 50.00% 50.00% 100.00% 30.00% 51.41% 4.91% 0.07% 8.44% 0.25% 3.98% M/s. Mostan Billah Adil Sparrow Spinning Limited Infinia Spinning Mills Limited Union Bank Limited Platinum Endeavors Limited Evergreen Shipping Limited M/s. Shahnaj Trading S Alam Super Edible Oil Limited Galco Steel (BD) Limited Union Bank Limited Al-Arafah Islami Basnk Limited Aviva Finance Limited AIBL Capital & Investments Limited First Security Islami Bank Limited Rashad Establishment (Sultanate of Oman) Rashad Industries (Pvt) Limited H.N. Automobiles Limited Muscat Holiday Resort Limited Greenvest Construction Limited Bijoy TV Limited Property Consortium Limited Idea Infinity Café Milano Premier University Milano Express Little Asia Black Hawk Security Service Metropolitan Chamber of Commerce Khaja Ajmiri School and College Milano Bakery Green Harvest Agro JMC Builders (Private) Limited Mostafa Salt Industries (Private) Limited Moon Express (Private) Limited JMC Shipping Lines (Pvt.) Limited Chittagong Export H.M International Padma Canada General Manager 10.00% Chairman Director Director Managing Director Director Director Proprietor Managing Partner Trustee Managing Partner Managing Partner Proprietor Director Trustee Managing Partner Proprietor Director Director Chairperson Vice Chairperson Proprietor Proprietor Director 25.00% 25.00% 25.00% 25.00% 25.00% 20.00% 100.00% 50.00% N/A 50.00% 25.00% 100.00% N/A N/A 33.30% 100.00% 30.00% 50.00% 33.00% 4.00% 100.00% 100.00% 50.00% INTRA Staple Food Global City HVAC Excel Dyeing & Printing Limited Land Mark Hotel & Restaurant Taysir Trade C&A Real Estate Limited Blue Touch Orchid Business Hotel Proprietor Proprietor Proprietor Managing Partner Proprietor Proprietor Director Partner Partner 100.00% 100.00% 100.00% 18.00% 100.00% 100.00% 25.00% 60.00% 50.00% D. S. Line Director and CEO 100.00% 16 Mr. Mohammed Kutub Uddowllah Independent Director 17 Mr. S.A.M Salimullah Independent Director Not Applicable Not Applicable Not Applicable 18 Dr. Md. Nizamul Hoque Bhuiyan Independent Director Not Applicable Not Applicable Not Applicable 19 Mr. Ahmed Muktadir Arif Independent Director Not Applicable Not Applicable Not Applicable GIB Annual Report 2021
403. GIB ATM BOOTHS NETWORK KHULNA DIVISION 1 2 3 4 5 GiB Jashore Branch ATM GiB Khulna Branch ATM GiB Kushtia Branch ATM GiB Narail Branch ATM GiB Satkhira Branch ATM RAJSHAHI DIVISION 1 2 3 4 5 6 7 GiB Chapainawabganj Branch ATM GiB Baraigram Branch ATM GiB Bogura Branch ATM GiB Khukni Branch ATM GiB Mondumala Branch ATM GiB Rajshahi Branch ATM GiB Tebunia Bazar Branch ATM SYLHET DIVISION 1 GiB Sylhet Branch ATM MYMENSINGH DIVISION 1 2 GiB Dhobaura Branch ATM GiB Mymensingh Branch ATM RANGPUR DIVISION 1 GiB Rangpur Branch ATM BARISHAL DIVISION 1 GiB Barishal Branch ATM * Expansion/ Relocation is under process. GIB Annual Report 2021 401
404. GIB GLOBAL CORRESPONDENTS NETWORK ARGENTINA ● Banco De La Provincia De Buenos Aires BHUTAN ● Bhutan National Bank Limited BAHRAIN ● Mashreq Bank PSC BRAZIL ● Haitong Banco De Investmento do Brasil S.A. CHINA ● ● ● ● ● ● ● ● ● ● ● ● AXIS Bank Limited Bank of Huzhou Co. Limited Jiangsu Jingjiang Rural Commercial Bank Co. Limited Jiangsu Jiangnan Rural Commercial Bank Co. Limited Jiangsu Jiangyan Rural Commercial Bank Co. Limited Jiangsu Haian Rural Commercial Bank Co. Limited Linshang Bank Co. Limited Yinzhou Bank Zhongshan Rural Commercial Bank Company Limited Zhejiang Chouzhou Commercial Bank Co. Limited Zhejiang Tailong Commercial Bank Co. Limited Zhejiang Mintai Commercial Bank ● ● Bank of Ruifeng Industrial Bank of Korea (China) Limited ● Wells Fargo Bank, NA, Shanghai Branch ● ● Mashreq Bank PSC., Hong Kong Branch Wells Fargo Bank, N.A., Hong Kong Branch ● ● ● ● Mashreq bank Punjab National Bank Punjab National Bank (E-UBI) Yes Bank Limited ● Wells Fargo Bank, N.A., Tokyo Branch ● Wells Fargo Bank, N.A., Seoul Branch ● NIB Bank Limited EGYPT ● Mashreq Bank HONG KONG ● AB International Finance Limited ● EBL Finance (HK) Limited INDIA ● ● ● ● AB Bank Limited AXIS Bank Limited Sonali Bank ICICI Bank Limited JAPAN ● Mizuho Bank Limited REPUBLIC OF KOREA ● Kookmin Bank ● Woori Bank, Seoul NEPAL ● Nepal Credit and Commerce Bank Limited NEW ZEALAND ● Kookmin Bank, Auckland Branch PAKISTAN ● MCB Bank Limited QATAR ● Mashreq Bank 402 GIB Annual Report 2021
405. GIB GLOBAL CORRESPONDENTS NETWORK RUSSIA ● ALFA Bank ● JSC Rosselkhoz Bank SAUDI ARABIA ● Islamic Development Bank SERBIA ● Banca Intesa Ad, Beograd Branch SINGAPORE ● AXIS Bank Limited ● Wells Fargo Bank, N.A., Singapore Branch ● AXIS Bank Limited ● EFG Bank AG ● Wells Fargo Bank, N.A., Taipei Branch ● Turkiye Vakiflar Bankasi T.A.O. ● AXIS Bank Limited, DIFC Branch ● ● Wells Fargo Bank, N.A., London Branch EXIM Exchange Company (U.K.) Limited ● ● Mashreq Bank PSC., New York Branch Wells Fargo Bank, N.A. SOUTH AFRICA ● Firstrand Bank Limited SRI LANKA ● Commercial Bank of Ceylon PLC SWITZERLAND ● Deutsche Bank (Suisse) SA - Private Banking ● Migros Bank TAIWAN ● Mizuho Bank, Limited., Taipei Branch THAILAND ● Mizuho Bank Limited, Bangkok Branch ● TMB thanachart Bank Public Company Limited TURKEY ● Albaraka Turk Participation Bank ● Aktif Yatirim Bankasi A.S. UKRAINE ● JSC 'Bank Credit Dnepr' UNITED ARAB EMIRATES ● Mashreq Bank PSC. UNITED KINGDOM ● Mashreq Bank PSC ● Sonali Bank (UK) Limited UNITED STATES OF AMERICA ● Kookmin Bank, New York Branch ● Habib American Bank VIETNAM ● Asia Commercial Bank GIB Annual Report 2021 403
406. GLOBAL REPORTING INITIATIVES GRI GENERAL STANDARD ASPECT INDICATORS OUR STATUS G4-1 Statement from the most senior decision-maker of the organization addressing sustainability Complied G4-3 G4-4 G4-5 G4-6 G4-7 G4-8 G4-9 G4-10 G4-11 G4-12 G4-13 G4-14 G4-15 G4-16 G4-17 G4-18 G4-19 G4-20 G4-21 G4-24 G4-25 G4-26 G4-27 G4-28 G4-30 G4-31 G4-32 G4-33 Name of the organization Primary brands , products, and services Location of the organization’s headquarters Countries where the organization operates Nature of ownership and legal form Markets served Scale of the organization Employment Collective bargaining Supply chain Organisational changes Precautionary approach Externally developed economic, environmental and social charters Memberships of associations Entities Process for defining the report Material aspects identified Material aspect within the organization Material aspect outside the organization Stakeholder groups Identification and selection of stakeholders Approach to stakeholder engagement Key topics and concerns raised Reporting period Reporting cycle Contact point Chosen content External assurance for the report Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Governance, Commitments and Engagements G4-34 Governance structure Complied Ethics and Integrity G4-56 Organization’s values, principles, standards and norms of behavior Complied Strategy and Analysis Organisational Profile Identifies Material Aspects and Boundaries Stakeholder Engagement Report Profile 404 GRI CODE GIB Annual Report 2021
407. GLOBAL REPORTING INITIATIVES GRI SPECIFIC STANDARD ASPECT GRI CODE INDICATORS OUR STATUS ECONOMIC Economic Performance Market Presence G4-EC1 G4-EC2 G4-EC5 G4-EC6 Indirect Economic Impacts G4-EC7 G4-EC8 Direct economic value generated and distributed Financial implications and other risks and opportunities for activities due to climate change Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation Proportion of senior management hired from the local community at significant locations of operation Development and impact of infrastructure investments and services supported Significant indirect economic impacts , including the extent of impacts Complied Energy consumption within the organization Reduction of energy consumption Extent of impact mitigation of environmental impacts of products and services Complied Complied Average hours of training per year per employee by gender, and by employee category Programs for skills management & lifelong learning that support the continued employability of employees and assist them in managing career Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity Complied Complied Complied Complied Complied Complied ENVIRONMENT Energy G4-EN3 G4-EN6 Products and Services G4-EN27 Complied LABOR PRACTICES AND DECENT WORK Training & Education Diversity & Equal Opportunity G4-LA9 G4-LA10 G4-LA12 Complied Complied SOCIETY Local Communities FS-13 FS-14 Access points in low-populated disadvantaged areas by type or economically Initiatives to improve access to financial services disadvantaged people for Complied Complied Anti-Corruption G4-SO4 Communication and training on anticorruption policies and procedures Complied Compliance G4-FS6 Percentage of the portfolio for business lines by specific region, size and by sector Complied G4-FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose Complied G4-FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose G4-FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures Product Portfolio Complied Complied GIB Annual Report 2021 405
408. SAFA CG DISCLOSURE PARTICULATS OUR STATUS 1 . BOARD OF DIRECTORS, CHAIRMAN AND CEO 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 Company's policy on appointment of directors disclosed Adequate representation of non-executive directors i.e., one third of the board, subject to a minimum of two At least one independent director on the board and disclosure/affirmation of the board on such director's independence Chairman to be independent of CEO Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure of independence of Non-Executive Directors Existence of a scheme for annual appraisal of the board's performance and disclosure of the same Disclosure of policy on annual evaluation of the CEO by the Board Disclosure of policy on training (including details of the continuing training program) of directors and type and nature of training courses organized for directors during the year Existence of a scheme for annual appraisal of the boards performance At least one director having thorough knowledge and expertise in finance and accounting to provide guidance in the matters applicable to accounting and auditing standards to ensure reliable financial reporting Disclosure of number of meetings of the board and participation of each director (at least 4 meetings are required to be held) Directors issue a report on compliance with best practices on Corporate Governance that is reviewed by the external auditors Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied Complied 2. VISION, MISSION AND STRATEGY 2.1 Company's vision, mission statements are approved by the board and disclosed in the annual report Complied 2.2 Identification of business objectives and areas of business focus disclosed Complied 2.3 General description of strategies to achieve the company's business objectives Complied 3. AUDIT COMMITTEES 3.1 Appointment and Composition Complied 3.1.1 Whether the Audit Committee Chairman is an independent Non-Executive Director and Professionally Qualified Complied 3.1.2 Whether it has specific terms of reference and whether it is empowered to investigate / question employees and retain external counsel Complied 3.1.3 More than two thirds of the members are to be Non-Executive Directors Complied 3.1.4 All members of the audit committee to be suitably qualified and at least one member to have expert knowledge of finance and accounting 3.1.5 Head of internal audit to have direct access to audit committee Complied 3.1.6 The committee to meet at least four times a year and the number of meetings and attendance by individual members disclosed in the annual report Complied 3.2 Objectives & Activities Complied 3.2.2 Statement on Audit Committee's review to ensure that internal controls are well conceived properly administrated and satisfactorily monitored Complied 3.2.3 Statement to indicate audit committee's role in ensuring compliance with Laws, Regulations and timely settlements of Statutory dues Complied Complied Statement of Audit committee involvement in the review of the external audit function ● Ensure effective coordination of external audit function ● Ensure independence of external auditors. 3.2.4 ● To review the external auditors' findings in order to be satisfied that appropriate action is being taken ● Review and approve any non-audit work assigned to the external auditor and ensure that such work does not compromise the independence of the external auditors Recommend external auditor for appointment/ reappointment 406 GIB Annual Report 2021 Complied
409. SAFA CG DISCLOSURE PARTICULATS 3 .2.5 3.2.6 3.2.7 Statement on Audit committee involvement in selection of appropriate accounting policies that are in line with applicable accounting standards and annual review Statement of Audit Committee involvement in the review and recommend to the board of directors, annual and interim financial releases Reliability of the management information used for such computation OUR STATUS Complied Complied Complied 4. INTERNAL CONTROL AND RISK MANAGEMENT 4.1 4.2 4.3 4.4 4.5 Statement of Director's responsibility to establish appropriate system of internal control Narrative description of key features of the internal control system and the manner in which the system is monitored by the Board, Audit Committee or Senior Management Statement that the Director have reviewed the adequacy of the system of internal controls Disclosure of the identification of risks the company is exposed to both internally & externally Disclosure of the strategies adopted to manage and mitigate the risks Complied Complied Complied Complied Complied 5. ETHICS AND COMPLIANCE 5.1 5.2 5.3 5.4 Disclosure of statement of ethics and values, covering basic principles such as integrity, conflict of interest, compliance with laws and regulations etc. Dissemination/ communication of the statement of ethics & business practices to all directors and employees and their acknowledgement of the same Board's statement on its commitment to establishing high level of ethics and compliance within the organization. Establishing effective anti-fraud programs and controls, including effective protection of whistle blowers, establishing a hot line reporting of irregularities etc. Complied Complied Complied Complied 6. REMUNERATION COMMITTEE 6.1 6.2 6.3 6.4 6.5 Disclosure of the charter (role and responsibilities) of the committee Disclosure of the composition of the committee (majority of the committee should be non-executive directors, but should also include some executive directors) Disclosure of key policies with regard to remuneration of directors, senior management and employees Disclosure of number of meetings and work performed Disclosure of Remuneration of directors, chairman, chief executive and senior executives Complied Complied Complied Complied Complied 7. HUMAN CAPITAL 7.1 7.2 Disclosure of general description of the policies and practices codified and adopted by the company with respect of Human Resources Development and Management, including succession planning. merit-based recruitment, performance appraisal system, promotion and reward and motivation, training and development, grievance management and counselling Complied Organizational Chart Complied 8. COMMUNICATION TO SHAREHOLDERS & STAKEHOLDERS 8.1 8.2 Disclosure of the Company's policy/strategy to facilitate effective communication with shareholders and other stakeholders Complied Disclosure of Company's policy on ensuring participation of shareholders in the Annual General Meeting and providing reasonable opportunity for the shareholder participation in the AGM. Complied 9. ENVIRONMENTAL AND SOCIAL OBLIGATIONS 9.1 9.2 Disclosure of general description of the company's policies and practices relating to social and environmental responsibility of the entity Complied Disclosure of specific activities undertaken by the entity in pursuance of these policies and practices Complied GIB Annual Report 2021 407
410. RELATED GLOSSARY 408 ACCRUAL BASIS Recognizing the effects of transactions and other events when they occur without waiting for the receipt or payment of cash or its equivalent . DIVIDEND Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. BILLS FOR COLLECTION A bill of exchange drawn by an exporter usually at a term, on an importer overseas and brought by the exporter to his bank with a request to collect the proceeds. EARNINGS PER SHARE (EPS) Profit attributable to ordinary shareholders divided by the number of ordinary shares in issue. BONUS ISSUE The issue of new shares existing shareholders in proportion to their shareholdings. It is a process for converting a company's reserves (in whole or part) into stated capital and hence does not involve all infusion of cash. ECONOMIC VALUE ADDED (EVA) EVA is a profitability measure designed to recognize the requirement to generate a satisfactory return on the economic capital invested in the business. If the business produces profit in excess of its cost of capital then value is created for shareholders. CAPITAL ADEQUACY RATIO A measurement of a bank's capital. It is expressed as a percentage of a bank's risk weighted asset exposures. FAIR VALUE Fair value, also called fair price, is a concept used in finance and economics, defined as a rational and unbiased estimate of the potential market price of a good, service, or asset. CASH BASIS Recognizing the effects of transactions and events when receipt or payment of cash or cash equivalent occurs. FINANCE LEASE A contract whereby a lessor conveys to the lessee the right to use all asset for rent over an agreed period of time which is sufficient to amortize the capital outlay of the lessor. The lessor retains ownership of the asset but transfers substantially all the risks and rewards of ownership to the lessee. COMMITMENTS Credit facilities approved but not yet utilized by the client as at the balance sheet date. FOREIGN EXCHANGE EARNINGS Profit earned on foreign currency transactions arising from the difference in foreign exchange rates between the transaction/last balance sheet date and the settlement/ balance sheet date. Also arises from trading in foreign currencies. CONSOLIDATED FINANCIAL STATEMENTS Financial statements of a group presented as those of a single company. GENERAL PROVISION General provision is made on outstanding loan and advance without considering the quality of loans and advances according to the prescribed rate of Bangladesh Bank. CONTINGENCIES A condition or situation existing at balance sheet date where the outcome will be confirmed only by occurrence or non-occurrence of one or more future events. GUARANTEE Three party agreement involving a promise by one party (the guarantor) to fulfill the obligation of a personal owing a debt if that person fails to perform. COST TO INCOME RATIO Operating expenses as a percentage of total income. INTANGIBLE ASSETS An intangible asset is as identifiable non-monetary asset without physical substance. CORPORATE GOVERNANCE The set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. INVESTMENT LOSSES & PROVISION Amount set aside against possible losses on investments, advances and other credit facilities as a result of such facilities becoming partly or wholly uncollectible. GIB Annual Report 2021