Southeast Bank Limited: Consolidated Financial Statements - 31 December 2019

Transcription

1. g 201 Pina I n Chartered Accountants correspondent firm Reanda International Independent Auditor 's Report To the Shareholders of Southeast Bank Limited Report on the Audit of the Consolidated and Separate Financial Statements Opinion We have audited the consolidated financial statements of Southeast Bank Limited and its subsidiaries (the "Group") as well as the separate financial statements of Southeast Bank Limited (the "Bank"), which comprise the consolidated and separate Balance sheets as at 3l December 2019 and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Bank give a true and fair view of the consolidated Balance Sheet of the Group and the separate Balance Sheet of the Bank as at 3l December 2019 and of its consolidated and separate statement of profit and loss and cash flows for the year then ended in accordance with Intemational Financial Reporting Standards (IFRSs) as explained in note 2 and3. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We remained independent of the Group and the Bank in accordance with the Intemational Ethics Standards Board for Accountants' of Ethics for Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Code Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. We summarize below the key audit matters in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters are discussed below together with an explanation of how the risk and our audit response was tailored to address these specific areas. All key audit matters are applicable to both the group and parent company. L ffice: AHS{NDELL, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhaka-1000, Bangladesh. Regisftrcd Tel: +08802-965-09214, +8802-966-5095, Cell: +8801711-105302, +880153#130750. E-mail: pinaki_o@yahoo.com website: www.pinaki.com.M
2. (e 2016 o Pinaki & Company Chartered Accountants ITRTTI Auditor's Resnonses The carrying value of loans and We have established audit approach over Particulars st. l. A correspondent firm of Reanda International Provision for Loans and Advances: advances may be materially the individual provision for control and As of the reporting date, misstated in case of substantive tests considering the the Group reports loans inappropriate identification and following factors: and advances / Investment estimation of provision either D Accuracy of data input into the BDT 29,675.30 crore individually or collectively. system used for credit grading and representing 70.27 Yo of Provision calculations for loans the approval of credit facilities. total assets; and provisions and advances and credit risk ) Ongoing monitoring and recovery of regarding loans and are significant and complex for loans and advances displaying advances of BDT 458.33 manually processed vast indicators of provision and detection 31.85% of represents of classified and unclassified status crore databases, assumptions, design bank's total operating income. Refer to note no. 10, ll and 2l.l to the financial statements. and implementation. As a part of risk assessment, we identified the following judgments which could give rise to material misstatement or management bias: F Measurement of the provision is dependent on the reasonable on a timely basis. We have tested the design and operating effectiveness ofkey controls focusing on the following areas: F Tested the credit appraisal, loans disbursement procedures, monitoring and provisioning process; events, D Identification of loss including early waming and default valuation of collateral security, estimates of exit values and the timing of cash flows, F Key assumption factors to probability of default collateral and relating Estimation of firtu,e business performance and market value of collateral provided against > Actual business performance may be misled due to under or of loans and advances, F of provision of recognition of loans and advances in accordance with criteria set Completeness and timing out in BRPD circular numbers: 14 & l52:0l2, t9a0l2, 05D013, l6D0l4, 082015, 0 loans and advances. Our substantive audit procedures for loans and advances portfolio involved the regarding the provision DReviewed the adequacy of the company's general and sPecific provisions; )Assessed the methodologies on which the provision loans and advances, over provision of following factors: recovery process, F ) warning process; Reviewed quarterly classification l5'.0l7, l2D0t7, l/20 I 8, 07 D018, 03 12019. amounts based, recalculated the provisions and tested the completeness and accuracy; )In the tripartite meeting dated 16.06.2020 a discussion was made on fixation of ultimate Provision for loans and advances and adequate provision was maintained on unanimously agreed upon taking into consideration the overall global and national economic crisis arising out of unexpected Covid-l 9 disaster. Optimum results: Finally assessed the appropriateness and presentation of disclosures against relevant accounting standards and Bangladesh Bank guidelines. 2 ffice: AHSANDELI, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhaka-1000, Bangladesh. Tel: +08802-g56-0944, +gg02-956-50g5, ce[: +8801711-105302, +8801534-130750. E-mail: pinaki-m@yahoo.com website: www.pinaki.com'bd Regisbred
3. iBQtqlftee6 $ffi *, Pinaki & Company 2016 c Chartered Accountants sl. It. Particulars Measurement of deferred tax liabilities: The deferred tax liabilities amounting to BDT 40.30 crore were shown in the financial statements as at 3l December2019. Risks Recognition and measurement of deferred tax liabilities contain judgment and objective estimates regarding future taxable profit and the usability of unused tax losses and tax credits. For significant accounting The significant risk critical accounting estimates for from the estimation of future usability of the benefits. Such estimation required in relation to defened tax liabilities as policies and the recognition measurement of and defened tax liabilities, we refer to note 3.16.2 of the consolidated financial statements " Significant Accounting Policies" (Section " Tax their REAN DA A correspondent firm of Reanda International Auditor's Responses We have conducted a risk assessment to obtain an understanding ofthe relevant tax laws and regulations considering the following: recognition and measurement of deferred tax liabilities in accordance with IAS 12, arises recoverability is operating effectiveness of internal controls with respect to recognition of deferred tax liabilities, liabilities by applying appropriate of tax law to dependent on the forecasts of profitability available in near schedule reversals particularly the potential tax future. rates applicable provisions at the time of expected reversals, Expenses") tax laws. Optimum results: We We refer to note number 20,21 and 21.3.2 of the consolidated financial considered recognition and measurement of deferred tax liabilities in particular regarding the assumptions and parameters to develop the taxable profit and usability of tax losses statements. and credits to be reasonable. ut. Carrying value of investments in subsidiary(s) by the Bank: of Reeoverability of the foreign We have focused on the appropriateness investment the application of value in use model, the key assumptions used in the model, the is generally considered a high risk matter. the However, due to reasonably possible alternative The Bank has invested materiality of the investment assumptions, particularly where they had amount of BDT 548.99 in the context of the the most impact on the value in use crore in equity shares of parent company's financial calculation. its subsidiary Southeast statements, this is considered We have compared the carrying amount of Bank Capital Limited (in to be the area that had the the total investment balance with the Bangladesh). It has also great focus of our overall relevant subsidiary's financial position to invested in foreign subsidiaries namely Southeast Financial Services parent company audit. assessed historical financial performance. (UK) Ltd. Southeast identify whether their net assets were in excess of their carrying amount and and Exchange Optimum results: We considered banking group's assessment of Company (South Africa) Pty Ltd. as at 31 December 2019 the carrying value of the investment in foreign recoverability of the the the investment in subsidiaries to be acceptable. subsidiaries was 3 Registercd Office: AHSqNDELL, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhalo-1000, Bangladesh. Tel: +08802-966-09+4, +8802-95&5095, Cell: +8801711-106302, +880153+130750. E-mail: pinaki_o@yahoo.com website: www.pinaki.com.bd
4. qe 2016 o Pinaki & Com .L I Chaftered Accountants A correspondent of Reanda International BDT 4.2 crore. Total investment in subsidiaries was BDT 553.21 which represents l.3l% of the Bank's total assets. We refer to note no 15, 15.3 and 15.4 of the consolidated financial statements. Particulars st. w. IT Risks Systems and Internal Our audit procedures have a focus on IT systems and control due to previous nature the and of transactions proceeds in numerous locations daily and the reliance on automated and manual with automated (IT dependent) conffols . We have focused on Banks compliance with the Internal control set out in the "Guideline on ICT Security For Banks and NBFIs by the use of operating over the information technolory in relation to financial accounting and to-day conduct of the bank's reporting systems, including system access operations, reconciliation of and system change management, program computer systems in the day- books of accounts, and development and computer operations. and retrieval of We have obtained management's information and reports. The evaluation of the access rights granted to risk can occur due to the applications relevant to financial IT storage complexity of the environment, the large volume Information Technolory risk arises from Controls: Auditor's Responses We have tested a sample of key controls Bangladesh choice of faulty or unsuitable accounting and reporting systems. We also technolory and adoption of assessed the operating effectiveness of untested or obsolete technology. Major risk arises from breaches of security for controls over granting, removal and appropriateness of access rights. We have reviewed the System of Internal Conffol (ref: note number. 3.20.5) which is risks of failure system, and unauthorized use designed to manage all the level and this System to a reasonable of it. Historically, information provides reasonable assurance of effective technolory was used as a covering all effrcient operations and supporting tool for fast and financial & operational including controls accurate delivery of financial access to the computer system, tampering with the Bank. services. Over the years, the We refer to note number 3.20 to the consolidated technology in financial services have substantially financial statements. widened. Fierce competition uses of information among banks induced them to controls, reliability of the financial information, compliance with applicable laws & regulations, adherence to management policies. We have checked standards over systems related process and documentation, and IT enlarge their network of General controls to get reasonable banking products and assurance that the IT environment being services, and compelled them used to generate, process and transmit to offer services off-site and financial information/records has allow the customers to access the computers from their end. reasonable level ofcontrol in place. Optimum result: We considered the user access management, segregation of duties Banks are facing greater threats from rapid changes and change management controls in occurring in the technological relation to financial accounting and systems applicable to reporting systems appears to be reasonable. financial services. 4 RegisEred ffice: AHSAI{DELI, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhaka-1000, Bangladesh. Tel: +08802-955-0944, +8802-966-5095, Cell: +8801711-105302, +8801534-130750. E-mail: pinaki_o@yahoo.om website: www.pinaki,om.M
5. EI 2018 0 naki & Compa ny Chartered Accountants A firm of Reanda Other Information Management is responsible for other information. The other information comprises all of the information in the annual audit report other than the consolidated and separate financial statements and our auditor's report thereon. The annual report is expected to be made available to us after the date of this auditor's report. Our opinion on the consolidated and separate financial statements does not cover the other information and thereby we do not express any observation to that effect. However, in connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified in the Annual Report as & when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of Management and Those Charged Separate Financial Statements and Internal Controls Management is responsible for the preparation and with Governance for the Consolidated fair presentation of the consolidated and financial statements of the Group and also sepaxate financial statements of the Bank in accordance with IFRSs as explained in note 3.21, and, for such intemal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. The Bank Company Act, l99l (amended up to 2018) and the Bangladesh Bank Regulations require the Management to ensure effective intemal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries. In preparing the consolidated and separate financial statements, management is responsible for assessing the Group's and the Bank's ability to continue as a going concem, disclosing, as applicable, matters related to going concern and using the going concem basis of accounting unless management either intends to liquidate the Group and the Bank or to cease operations, or has no realistic altemative but to do so. Those charged with govemance are responsible reporting process. for overseeing the Group's and the Bank's financial 5 Regisftred OfEe: AHS{NDELI, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhaka-1000, Bangladch. Tel: +08802-966-09+4, +8802-966-5095, Cell: +8801711-105302, +8801534-130750. E-mail: pinaki_co@yahoo.com website: wwwpinaki.com.bd
6. qs D trll 2018 ny Chartered Accountants corespondent firm Reanda International Auditor 's Responsibilities for the Audit of the Consolidated and Separate Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: o Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from eror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of intemal control. o o . o Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. of accounting policies used and the reasonableness estimates and related disclosures made by management. Evaluate the appropriateness of accoulting Conclude on the appropriateness of management's use of the going concem basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Bank's ability to continue as a going concem. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modiff our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and the Bank to cease to continue as a going concem. Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation. o Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 6 RegisEred Offie: AHSANDELI, UA Mymensingh Road (2nd Flmr), Shahbag, Dhaka-1000, Bangladesh. Tel: +08802-966-0944, +8802-966-5095, Cell: +8801711-105302, +8801534-130750. E-mail: pinaki_co@yahoo.om website: www.pinaki.om.bd
7. eH E ] D o tl o pany dsmi.. Chaftered Accountants A firm of Reanda International We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in intemal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest/benefits of such communication. Report on other Legal and Regulatory Requirements In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the Bank Company Act, l99l(amended up to 2018) and the rules and regulations issued by Bangladesh Bank, we also report that: (i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; (iD To the extent noted during the course of our audit work performed on the basis stated under the Auditor's Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on antifraud internal controls and instances of fraud and forgeries as stated under the Management's Responsibility for the financial statements and internal control: (a) Intemal audit, internal control and risk management axrangements of the Group as disclosed in the financial statements appeared to be materially adequate; (b) Nothing has come to our attention regarding material instances of forgery or irregularity or administrative eror and exception or anything detrimental committed by employees of the Group and its related entities. (iii) Financial statements of Southeast Bank Limited and its subsidiaries in Bangladesh i.e Southeast Bank Capital Services Limited have been audited by us and in outside Bangladesh namely, Southeast Financial Services (UK) Ltd have been certified by Jahan & Co., Chartered Management Accountants and Southeast Exchange Company (South Africa) Pty Ltd have been audited by G.L. PALMER AND COMPANY as at 3l December 2019, and have been properly reflected in the consolidated financial statements (note no.1.5.1,1.5.2 & 1.5.3); 7 Registercd Office: AHSANDELL, 2/A, Mymensingh Road (2nd Floor), Shahbag, Dhalo-1000, Bangladesh. Tel: +08802-966-09+4, +8802-955-5095, Cell: +8801711-105302, +880153+130750. E-mail: pinaki_o@yahoo.com website: www.pinaki.com.bd
8. qs 2018 Chartered Accountants firm of Reanda International (iv) In our opinion, proper books ofaccounts as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books; (v) The records and statements submitted by the branches have been properly maintained and consolidated in the financial statements; (vi) The consolidated balance sheet and consolidated profit and loss account together with the annexed notes dealt with by the report are in agreement with the books of account and returns; (vii) The expenditures incurred were for the purpose of the Bank's business for the year; (viii) The consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank; in our opinion, (ix) Adequate provisions have been made for advance and other assets which are doubtful of recovery; (x) The information and explanations required by us have been received and found satisfactory; (xi) We have reviewed over 80olo of the risk weighted assets of the Bank and spent over 8,400 person hours; and (xii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank appeared to have been maintained. I)as, Dhaka, Date :30 June2020 For and on behalfof Pinaki & Company Chartered Accountants 8 Regis&rcd OfEce: AH$ANDELL, UA, Mymensingh Road (2nd Floor), Shahbag, Dhaka-1000 Bangladesh. Tel: +08802-966-0944, +8802-966-5095, Cell: +8801711-105302, +880153#130750. E-mail: pinaki-co@yahoo.com website: www.pinaki.om.M
9. , i:r* iF.t ' , Southeast Bank Limited and its Subsidiaries Consolidated Balance Sheet As at 3l December 2019 Particulars Note 2019 2018 Trkn Takr 3,664,880,130 3,598,852,097 PROPERTYAND ASSETS Cash 4 In hand (including foreign currencies) with Bangladesh Bank and is agent banls (including foreigr currencies) Balance 18.9s4.911.247 17.916.575.574 22,619,791371 21s15,427,671 In Bangladesh 5,568,594,836 3,984,794,486 Outsidc Bangladesh 1903.702.998 2.449.639.553 Bahnce with other brnkr rnd linancial institutions 5 7412,297$34 6434,434,039 4,739,531,100 6,897,100,000 Government 62,409,7G,654 50,963,038,896 Others t4-900.277.916 14.646.513.537 77310fi42,570 65,609,552,433 Money at call and on short notice 7 Investments 6 Loans and advanceVinvestments IO loans, cash credi! overdrafts etc./investnents 278,757,951,276 Bills purchased and discounted 255,400,659,122 17.995.011.999 12.270.968-683 296,752,963,275 2rt7,671,627$05 Fixed assets including premiscs, furniture and lixtures t2 9J33,65E,015 9,337,295,160 Other assctg t4 4,084,430,822 4,110,24w72 Non-banking assets Total rssets -!?2r!2,7!!#- -$l,!ZffZq$q- LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, Iinancirl institutions and agcnts I6 l 1,800,000,000 Subordinated bond 10,200,000,000 Other borrowings 13.701399.879 tt-ztt-700-343 23,901399879 23,011,700143 48,260,613,039 40.472,065,762 t8 Deposits and other accounts CurrenUAl-wadeeah current accounts and other accounts 4,095,294,208 Bills payable 30,416,E45,985 Savings banlc/Ir,Iudaraba savings bank deposis Fixed deposits/Ivludaraba fixed deposits 20 Other liabilities Total lirbilities 4,494,551,361 27,259,920,347 246.477.520.709 226-108.257.t17 329250273,941 29E334,794,5E7 3E,651,506,64E 391,E03,180,46E 32,102455.720 353,448,950,650 CapitrUshareholders' equity 22.2 11,599,419,720 10,544,927,020 Statutory reserve 23 10,969,433,607 10,094,153,565 Revaluation reserve 24 Other reserve 25 Foreigr currency tanslation reserve 26 Retained eamings 27 Total shareholders' equity Non-controlling interest Totel lirbitities and shareholders' equity 29 Paid up capital 4,248,271,218 247,650,000 (8,779,606) 4,360,801,902 247,650,000 (28,918,605) 3-443.466.969 2.898.043.836 30199161,90E 28,116,657,718 10,072,617 10,070,512 422,312.714,993 I I
10. Southeast Bank Limited and its Subsidiaries Consolidated Brlance Sheet As at 3l December 2019 Particulars Note 2019 201E Trke Takn OFF .BALANCE SHEET ITEMS Contingent lhbilities Acc€ptances and endorsernents 30.r 48,407,68t,253 l,etters ofguarantee 30.2 16,773,718,041 19,197,993,041 Irrevocable letters of credit 30.3 27,936,453,209 36,374,559,306 Bills for collection 30.4 28,s76,944,200 24,664,926,813 Other contingent liabilities 30.s t-4s4.224.000 r 4t1 684 000 t23,149,020,103 145,504,926,144 Total contingent liabilities 63,853,762,984 0ther commitments Documentary credits and short term hadc-related transactions Forward assets purchased and forward deposits placf,d Undrawn note issuance and revolving underuriting facilities Undrawn formal standby facilities, credit lines and other commitme,nts Total other commitments Total off-balance sheet items including contingent liabilities The annexed notes I to 7 I form an in egral pafi of these -!21'!!2'929ru- financial statements. . Mr.*ul.k.* Chairmrn Director Director Maneging Sigred in terms ofour separate report ofeven date Pinaki & Company Dhaka, Date: 30 June 2020 Chartered Accountants 10
11. Southeast Bank Limited and its Subsidiaries Consolidated Prolit and Loss Account For the year ended 3 I December 2019 Notc zot9 ,.{D Teke Taka Interest income/profit on investmenb 32 26,258,882,397 Interest paid/profit shared on deposits and borrowings etc. i4 (22.OO1.885.612\ tJ 23,977,837,107 fi*777 R91 101\ Net interest income/net profit on inv$tments Investment income 36 5,288,975,155 Commission, exchange and brokerage 38 3,859,609,254 Other operating income 40 5,129,753,568 3,6s2,775,278 10,133,724,097 9,761,976,731 M3mJ20,882 r4,961,916,s31 Totrl operating income (A) Salaries and allowances 42 44 Renq taxes, insurance, electricity, erc. legal expenses 2,175,294,624 2,026,521,807 1,083,363,1 r9 1,03 1,s66,389 1,998,326 Postage, stamp, telecommunication, etc. 1,299,331 46 t74,546,805 t82,353,593 Stationery printing, advertisements, etc. 48 165,746,039 165,642,288 Managing Directot's salary and fees Directors'fees 50 I 1,072,000 r0,072,000 5l 3468,248 2,926,099 Auditors'fees 53 1,904,078 1,847,371 Depreciation and repair 54 534,629,560 Other expenses 56 476,294,631 2RO ?97 900 I 25571A774 I 5,407,741,573 8,982,979,309 Total opereting expcnscs (B) Profit before provision (C=A-B) 9J82,995,122 2I.t Provision for loans and advances/invesfnents General provision (n9,210,024) 497424s 94* 328,228900 Specific provision 4 255 025 727 Provision for diminution in value of investments Other provisions Total provision @) Total prolit before tuation 5,178:921,410 21.7 4,583,253;727 319,600,000 21.5 (324-100_000) 4,855,075,924 4r3,060,983 (153.800-000) 4.578J53,727 4404225,582 (E{-D) Provision for taxation 5,114,336,907 4,668,638214 58 Current Deferred 2,640,055,033 1744 186 000) 2,230,449,370 ri5 000 000) 1,895,669,033 2,195449,370 Net prolit after taxation Net prolit after taxation attributable to: Equity holders' ofthe Bank 2A7t,t89,t3s 2,508,554,444 -?'!1!'29!&1-?,!9!,!!gd!22.105 Non-controlling interest 2,s08.s56549 Net profit aftcr taxetion Appropriations 23 Statutory reserve Retained surplus during the ffi- I 924.t53.565 E75,280{42 924,153,565 yerr Earnings per share (par value Taka The annexed notes 875.280.042 64 l0) to 7 I form an integral part of these financial stuements. A*rrne,I #!rr\.rr* Director 2.13 2.16 -!fiwzsw- -t!!2J5i2!g- Ie<I,""*- l*.rd,.* Director Signed in terms ofour separate report ofeven date Pinaki & Company Dhak4 Chartered Accountants Date: 30 June 2020 11
12. Southeast Bank Limited and its Subsidiaries Consolidatcd Cash Flow Stttemcnt For the year ended 3 I December 2019 Notc A . 2019 20tE Trkr Trkr Crsh flows from operating ectivitics: Interest receipts in cash Interest payments 7 Q0,768, Dividend receipts (l 252,697,447 Fees and commission receipb in cash Recoveries on loans previously written-off 3E Cash payments to employees Cash payments to suppliers 3,t59,609,2s4 178,893,878 9t7,0t2,200 3,652,775,278 404,812,584 983,474,309 Q,194,287 979,305,053 Q, Income taxes paid a, Receipts from other operating activities Payments for other operating activities 60 62 Operrting profit bcfore changcs in opcreting esscts end tiebilities (i) E,E75,868,818 Incrcrse (decrcese) in opcreting rsscB rtrd liebilitics Sale of trading securities 751,633 l, Purchase of trading securities Loans and advances to customerc 0ther assets 206,061,988 2,489,699,s36 29,472,7t4,367 Deposits from other banks Deposits from customers 1,030,051,615 27,230,35E,562 O,ther liabilities 4,666,455,169 1354,323,987 Crsh generatcd from (used in) opcreting asscts rnd lirbilitics (ii) Nct crsh fiows from opereting rctivitics (e=i+ii) B. Crsh flows from investlng 96,E34,627,41s Payments for purchase of securities offixed assets Sale of fixed assets (96,739,9U,762) 54,654,t39,635 (54,337,993,3s3) (340,168,614) (372,39r,753) 17.150.306 Crsh generatcd from (uscd in) invcsting rctivitics (b) C. 3,549,513,918 activities: Procecds from sale ofsecurities Purchase (6,231n394,905) (22E,335,655) 3.811.056 (52,434,4151 Cesh llows from finencing activities: Receipts from issue ofloan capital & debt security & debt security 5,000,000,000 Payments for redemption ofloan capital Dividends paid (2,477,13 Payment against lease obligation Receipts from issue ofordinary shares Crsh generated from (used in) Iinancing actlvltics (c) D. Nct incrersc (dccrcrsc) in cash rnd crsh cquivrlcnts (r+brc) I 1,580,608,949 E. (t,294,912) Effects ofexchange rete chengcs on cesh end cash cquivrlcnts F. Crsh rnd crsh cqulvelents at beginnlng of the ycrr G. Crsh and cash equivelenb at end of the ycar (IFE+F) 36,823,677,730 4E392991J67 Cash end cesh equivelents rt end ofthc ycrr rcprcscnts Cash in hand (including foreign currencies) 7,894,602,372 22,040,234 28,907,03s,123 36i23$17,730 3,598,852,097 4 Balance with Bangladesh Bank and its agent banks 4 5 (including foreign cunencies) Balance with other banks and fmancial institutions Money at call and on short notice Treasury bills Prize bond 7 9.Lt 9.t.1 12 18,954,91t,247 7,472,297,E34 4,739,531,100 13,555,450,056 17,916,575,574 6,434,434,039 6,897,100,000 1,97r,577,720
13. Prrticuhro rt I Jrnurry r3 Brl .[cc mmting e6mt 2019 of rcvaluation of prcpsties policy/ Prior yetr adjutmmts Shmges in Rcrtrted brlrncc SurpluVdcfrcit on Deccnbcr iD the incomc (Australia) Pty Ltd. 20lt 31 Ileccmbcr 2019 3l strtcmilt Surplus/dcficit on amunt of revaluation of investsnmts Swies ClJmcy tmslation diffcrmes Finmcisl yefi griN rld 10$6 not reognizcd Southeast Nct the dividmd Netprcfrtfor Cash Isre ofshm epitaV Bonu sharc Tmsfq to Southut Bilk StaffWelfrc Trust Apprcprirtion nede durilg the yerr u rt Strirtory rcswe Brhncc Behncc rs rt P.id up Crpitrl Teke 10,544,927,020 t0,544,927,O20 1,O54,492,700 u.599.419.20 ffirIffrtfiill Southeest Benk Limited end its Subsidiaries December 2019 Trrmlrtiotr I Other Teke Rcrcrye 3 Revrlurtion Tekr Ret.itr.d Errnings Trtc 2,89E,043,836 100,399,123 Totrl Trkr Non{ontrolling Intrrcst 28,126,728,230 Trlrr of thc Grcrp 18,48E,058 12,530,684) (76,t49,377\ 17,E91,249 l8JE8,0s8 (r 12,530,584) 100,399,123 Totrl Equity Tr lrr l2 28,227,127,353 17.893.249 l 0,070,5 10,070,512 00,399,1 23 28,116,657,7t8 I 28,217,056,84t (1,650,941 ) (76,t49,377\ 2,9E,442,959 17,893,249 (l 16,242,30E 2,508,556,549 10,0705r2 fi.a72.617 2E.126.72t230 30'509'534525 (150p00p00) 2t.tt6.657Jlt 30,4991461poE 2,t05 2,508,554144 50,000,000) tA8.466569 (150,000,000) 2,508,554,444 (l (1,o54,492,700) (tJ79.606) 2.t9t.043"&t5 (87s,280,042) rrrEl[rfirr 20,138,999 20,t38,999 (2E,91 8,60s) (2E,91 8,605) Rcrcryg zitr.frrrfiti) 247.650.Un 247,650,N0 247,650,000 Trkr ZFfff,iIlIEfitl 424t27121t 0 12.530.6E4) (l 12,s30,684) 4,360,801,902 4,360,80 1,902 Rscryc For the year ended Consolidated Stetement ofChrnges in Equity Strtutory R6cryc Trkr 10,094,1 53,565 10,094,t 53,565 87s28O,O42 10969.433607 i(ifitflfff,ff,{l 13
14. Southeast Bank Limited Balance Sheet As at 3l December 2019 Note 2019 2018 Taka Taka PROPERTY AND ASSETS Cash 4 .1 In hand (including foreigr currencies) 3,664,640,436 3,598,790,655 Balance with Bangladesh Bank and its agent banks (including foreigr currencies) Balance with other banks and financial institutions 18.9s4.911.247 17 22,619,551,693 21,515,366,229 -9t6-575-574 6 In Bangladesh 5,568,594,936 3,984,794,486 Outside Bangladesh t.762.989.139 2.272.907.523 7,331,583,975 6,257,702,009 4,739,531,100 6,897,100,000 Govemment 62,409,764,654 50,963,038,896 Others t2-074-625-437 Money at call and on short notice 7 lnvestments 9 74,484,390,091 62,8E3,756,194 277,020,t01,321 252,933,241,876 il Loans and advances/investments Loans, cash credit, overdrafu etc./investrnents Bills purchased and discounted 17.995.011.999 12.270.968.683 295,015,113,320 265,204,210,559 Fixed assets including premises, furniture and fixtures ti 8,754,955,398 8,782,363,746 Other assets Non - brnking assets Total assets t5 9,485,465,483 9,554,422,290 422,430,591,050 381,094,92r,027 LIABILITIES AND CAPITAL Liabilities I7 Borrowings from other banks, financial institutions and agents Subordinated bond 10,200,000,000 I 1,800,000,000 Other borrowings 13-701.399.879 I 1_157 491-516 23,901,399,879 22,957,491,516 48,807,799,671 40,457,857,55t l9 Deposits and other accounts Current/Al-wadeeah current accounts and other accounts Bills payable Savings bank/Mudaraba savings bank deposits Fixed deposits/tludaraba fixed deposits 2t Other liabilities Total liabilities 4,095,294,208 4,494,551,361 30,416,845,985 27,259,920,347 246.477-s20.709 226.108-257.117 329,797,460,573 298,320,586,377 38,312,892,783 392,011,753,235 31.765,504,056 353,043,581,949 CapitaUshareholderc' equity 22.2 11,599,419,720 10,544,927,020 Statutory reserve 23 10,969,433,607 10,094,153,565 Revaluation reserve 24 4,248,271,218 4,360,801,902 Other reserve 25 247,650,000 247,650,000 3-354.063.270 2-803^806-592 Paid up capital 28 Retained eamings 30,418,E37,E15 Total shareholders' equity Total liabitities and shareholders' equity 422.430.591.050 14 28,051J39,079 381,094,921,027
15. Southeast Bank Limited Balance Shcet As at 3l December 2019 Particulars 20t9 Note Taka 20r8 Taka OFF .BALANCE SHEET ITEMS Contingent liabilities Acceptances and endorsements 30. I 48,407,681,253 lrtters ofguarantee 30.2 16,713,718,041 19,197,993,041 Irrevocable letters of credit 30.3 27,936,453,209 36,374,559,306 Bills for collection 30.4 28,576,944,200 24,664,926,813 Other contingent liabilities 30.5 Total contingent liabilities 63,853,762,984 r.454.224.000 1,413,684,000 123,149,020,703 145,504,926,144 123,149,020,703 44 Other commitments Documentary credits and short term trade-related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities, credit lines and other commitments Total other commitments Total off-balance shcct items including contingent liabilities The annexed notes I % Qdhairman to 7l form an integral part ofthese financial statements. fuL,re 1$^<ot* Director Director Siged in lerms of our separate reporl of even date 6A Pinaki & Company Dhaka, Chartered Accountants Date: 30 June 2020 15
16. Southeast Bank Limited Profit and Loss Account For the year ended 3 I December 20 I 9 Note Interest income /profit on investnents Interest paid/profit shared on deposits and borrowings etc. 35 Net interest income/net profit on investments Investnent income i7 2019 2018 Taka Taka t,689,857 33 Commission, exchange and brokerage Other operating income 5,062,022,727 39 3,764,992,196 3,538,712,150 4l 9,547,791,212 Total operating income (A) 14r2l Salaries and allowances Rent, taxes, insurance, electricity, etc. Legal expenses Postage, stamp, telecommunication, etc. Stationery printing, advertisements, etc. Managing Dircctor's salary and fees 14,723,613,895 43 2,142,216,378 45 1,061,295,939 47 173,691,923 164,420,208 I 1,072,000 3,292,248 1,000,000 1,992,049,030 1,015,140,507 t,293,220 1,E63,455 49 50 Directors'fees Auditors'fees 52 Depreciation and repair ofbank's assets Other expenses Total operating expenses (B) 55 57 l 8 1,005,852 162,6t4,460 10,072,000 2,718,099 1,000,000 413,97s,642 478,520,t96 Prolit before provision (C=A-B) 2t.t Provision for loans and advances/investnents General provision Specific provision 328,228,000 4.255.025.727 4r5t3,253,727 Provision for diminution in value of investments Other provisions 21.7.1 3 4,E55,075,924 413,060,983 /l s3.800-000) 19,600,000 21.5 Total provision (D) Total prolit before taxation (C-D) 5,114i36,907 4,620,767,824 59 Provision for taxation Current Deferred 2,600,000,000 (7/M-386-000) 1$55,614,000 2,165,000,000 Net profit rfter trxetion -?l?!'135N--?'!55'15LP!irrrf,iIIm Appropriations 2i Statutory reserve E75280,042 Retrined surplus during the year Earnings per share (par value Taka The annexed rntes I 1.64s.s06.16E l0) to 7 I fonn an integral 2.17 65 Wt ol these firuncial r.5!rJ!4252_ statements. F-{"^1.^' fd-{Ar'r .A*r\o.*rc^ Al^naA Dircctor Director Signcd in terms of our separate report of wen date Qr;^uw Pinaki & Company Dhaka, Chartered Accountants Date: 30 June 2020 16
17. Southeast Bank Limited Cash Flow Statement For the year ended 3l December 2019 Prrticulars A . 'Note from opcrating 2019 2018 Trke Trkr Interest receipts in cash Interest payment (t7 Dividend receipts Fees and commission receipts in cash 39 Recoveries on lnans prwiously written-off 189,895,835 130,239,122 3,764,992,t96 3,s38,712,1s0 917,012,200 Cash payments to employees 404,812,584 (2,r Cash payments to suppliers Q,002,r21,030) (181,886, (140,101,E63) Income talrcs paid Receipts from other opcrating activities Payments for other operating activities 6t Operating profit before chrnges in operrting rssets and liabilities (i) Increase (decrease) in opereting rssets 977,243,064 946,913,502 63 76E rnd liabilities Sale of trading securities 932,751,633 Purchase of trading securities 168 (744,452,229) (29,602,3s7,424) Loans and advances to customers Other assets (188,674,412) 222,071,s83 Deposis from other banks Deposits from customers Other liabilities Cash generatcd from (used in) operating lssets end lirbilities Net clsh flows from operating activitles (a=i+ii) 2,543,908,363 975,842,788 30,034,109,210 27,211,136,730 950.4s9.975 (ii) 4336191,110 13,529A93,E7E B. Cash llows from invcsting ectivities: Proceeds from sale ofsecurities 96,794,627,4t4 (96,739,944,762) (271,637,s83) Payments for purchase of securities Purchase offixed assets Sale of fixed assets 54,654,139,635 (54,337,993,353) (374,799,8s0) 3.776.352 17.150.306 (54,t77,216\ (199,t04,625) Cash generated from (uscd in) investing ectivities (b) C. Crsh flows from financing ectivities: Receipts from issue ofloan capital & debt security & debt security (1,600,000,000) Payments for redemption ofloan capital Dividends paid (2,477,r3 (133,379,383) Payment against lease obligation Receipts from issue ofordinary shares (1,733,379,3t3) Cash generrted from (used in) financing activities (c) D. Net increase (dccrease) in crsh and cash equivelents (a+brc) E. Effects ofexchange rate changes on cash rnd cash cquivolents F. Crsh and cash equivalents at bcginning of the yerr G. Crsh and cash equivelents at end ofthe ycrr (D+E+F) 7,850,086,500 I 1,596,309,870 7,264,394 8,8,14,086 36,646,884,258 28,789,533,363 ---re|6A6.EdaF -Ir,es2,iIffiifr Cash and cesh equivalcnB at cnd of the year represents foreigr currencies) Balance with Bangladesh Bank and its agent bmks (including foreign currencies) Balance with other banls and financial institutions Money at call and on short notice Treasury bills Prize bond Cash in hand (including 4.1 4.1 6 7 9.1.1 9.1.1 t8,954,91t,247 t7,916,575,574 7,331,583,975 4,739,531,100 13,555,450,056 6,257,702,009 6,897.100,000 Note: The reconciliation ofnet profit with cash flows from operating activities has been presented at Annexure - J. 't7 t,971,577,720
18. Perticulart Belancc as at I Jenuary prior year adjustnents 2019 Changes in accounting policy / Restrtcd brlencc on account of revaluation of properties on account of revaluation of investnents ranslation differences end losscs not recognizcd in thc incomc stetcment dividend profit for the year ofshare capitaV Bonus share Southeast Bank Limited I December 2019 Rcvduation Reselc 3 Statement of Changes in Equity Statutory Rcserve For the year ended Paid up Capital Tekl 0thcr Rcscwes 247,6s0,000 247,650,000 Total 2,803,806,592 100,399,123 28,051,339,079 Retained Eernings 100,399,123 28,151,738,202 Taka 2,904,205,715 8,844,087 8,844,087 2,520,786,210 (103,686,597) 8,8'14,087 (r 12,530,684) 2,s20,786,210 (1,0s4,492,700) l5 (150,000,000) 3,354,063,270 28,051,339,079 (l 12,530,684) (l 12,530,684) 4,360,801,902 4,360,801,902 Teke 10,094,153,565 10,094,153,565 Take 10,544,927,020 10,5u,927,020 1,054,492,700 (150,000,000) 247,650,000 2,803,806,592 ycrr to Southeast Bank StaffWelfare Trust madc during thc 4.248.271.218 247,6s0,0N (875,280,042) t0,969.433,607 4,360,801,902 875,280,042 I 10,094,153,565 reserve es at 31 Dcccmbcr 2019 10,544,927,020 720 rs et 31 Dcccmbcr 2018 18
19. Southeast Bank Limited and its Subsidiaries Notes to the Finencial Statements As at and for the year ended 3l December 2019 Corporate profile and significant Accounting policies I Reporting cntity t .l Stetus of the Bank Southeast Bank Limited (the 'Bank') is a schcduled commercial bank in the private sector established under the Bank Companies Act, l99l and incorporated in Bangladesh on March 12, 1995 as a public limited company to carry out banking business in Bangladesh. The registered office of the Bank is located at Eunoos Trade Cenhe 52-53, Dilkusha Commercial Area (6vel 2,3 & I 6), Dhaka- I 000. The consolidated financial statements of the Bank as at and for the year endcd 3 I December 20 I 9 comprise the Bank and its subsidiaries (togethcr referrcd to as the *Group- and individually as "Group entities"). 1,2 Principal octivities of the Bank The Bank has 135 (2018:135) branches and 09 sub-branches established in 2019, with no overseas branch as on 3l December 2019' Out of 135 branches 5 (2018:5) branches run on Islamic banking and the rest 130 (2018:130) branches run on commercial conventional basis, ofwhich 15 (2018:15) SME/agricultural branches arc lopated across the county.The Bank offers services for all commercial banking needs of the customers, which includes deposit banking, loans and advances, export import financing, inland and intemational remittance facility etc. The Bank is listcd with Dhaka Stock Exchange Limited and Chinagong Stock Exchange Limited as a publicly taded company. The Bank operates Islamic banking in 5 branches designated for the purpose modus opcrandi. in complying with the nrles of Islamic Shariah the The Bank has three subsidiaries, one for its merchant banking operation (for details see note 1.5) and anothcr two for its remittance business of which one in the Unircd Kingdom (for details soe note 1.5.2), other one in South Africa (for details see note 1.5.3). 1.3 Ishmic Banking The Bank obtained the Islamic Banking branches permission vide lettet no. BRPD@)745(22W003-2525 dated 28 June 2003, BRPD(P)745(22)D004-1801dated 9 May 2004 and BRPD(P)745(22)D004-3957 darcd 13 October 2004. Thc Islamic banking branches are govemed under ttre rulcs and regulations 61 Bangladesh Bank. Separate financial statemcnts of Islamic Banking Branches are shown in Annexure-G, G.l and G.2. The financial statcments ofthe Islamic banking branches havc also been prepared as per the Bank Companies Act, up to 2018), IFRSs and other prevailing laws and regulations applicable in Bangladesh. l99l (amended A separate balance sheet and profit and loss account are shown in Anncxure-G and G.l and the ligures appearing in the annexure have been converted into relevant heads of financial staternents under conventional banking for consolidation and incorporation in these fi nancial statements. 1.4 Off-Shore Banking In order to cater the varied fmancial needs of 100% foreigr ovmed/joint venture industrid units and foreigrr entities located in Export Processing Zones of the counhy, the Bank obtained Off-Shore Banking License on 24 June 2008 vide letter no. BRPD(P3)744(98y2008-2213 from Bangladesh Bank. In thc mean time as per BRPD circular # 2, dated25 February 2019 we have already applied to Bangladesh Bank for conducting Off-shore banking in Bangladesh on l0 July 2019. Presently thc Bank has 2 (2018: 2) off-shore banking units - one at Dhaka Export ProcessingZone and the other at Chittagong Export ProocssingZnne. Off-shore banking unit is governed under the rulcs and regulations of Bangladesh Bank. The principal actMties of thc Units are to provide all kinds of commercial banking services to its customers in foreign curre,ncies approved by the Bangladesh Bank. Separate financial statements of Off- Shore Banking Units are shown in Anncxure-H, H.l and H.2. 1.5 Subsidiaries of the Bank The Bank has following subsidiaries : Name of thc Subsidiarics outheast Bank Canital Services Limited Southenst Financial Swims n IK'l Ltd Princlpal cctivities Tradins securities E'inencial seruiccs Country of incorporetion Banqladesh F.noland snd Weles South Africa \outheast Financial Seruies (Arrstralie\ Ftv I-td F'inancinl seruices 19 Arrstrslia Controlling interest of the Bnnk gg Rl69090/" lOOo/" l00o/o f)iscontinued
20. 1 .5.1 Southcest Bank Capitel Seruices Limitcd Southeast Bank Capital Services Limited is a subsidiary of Southeast Bank Limited which was incorporated on 23 September 20 l0 and commenced its operation from I Decernber 2010. The Bank transferred its Merchant Banking operation to the newly formed subsidiary company in pursuance ofthe direction ofBangladesh Bank vide DOS Circular No. 4 dated 15 June 2010. Thc principal activitics ofthis subsidiary @mpany is to provide quality serviccs to the prospective institutional and individual investors in the capital market. It is decisively providing the following services: i) ii) iiD Portfolio Management Services Underwriting of Share Issue Management Services etc. Copy of the audircd frnancial statements is attached in Appendix - A. 1,5.2 Southcast Finoncial Services (UK) Ltd Southeast Financial Services (lK) Ltd (the "Company") was incorporated as a private limited company with Companies House of England and Wales under registration no. 7539137 on 22 February 201 l. Thc company is a wholly owned subsidiary of Southeast Bank Limited. Earlier on 28 October 2010, Southeast Bank Limited got the approval of Bangladesh Bank to establish a wholly owned subsidiary in the United Kingdom. Southeast Financial Services QK) Limited obtained Certificate of Registration for Money Laundering Regulation (MLR) on 12 April 20ll from Her Majesty Customs and Excise. The company was granted registration from Financial Serviccs Authority (FSA) on 2l July 20ll as Small Paynrent Institution (SPI) to carry out Money Scrvicc Business (MSB) under Payment Services Regulations 2009. The Company commenced its operation of business on 26 September 20 I L The regisrcred office is located at 22 New Road, London E I 2AX, United Kingdom. The principal activities of the Company are to carry on the remittance business as well as to undertake and participate in transactions, activities and operations generally carried on or undertaken by Exchange House. The subsidiary is registered in the United Kingdom (JK). Audit of financial staternents of this subsidiary is not required as per nrles 7 regulations of UK. The financial statements including accountant's report of this subsidiary are attached in Appendix - B. of Directors of the group decided to discontinue the operation of Southeast Financial Services CJK) operation ofthe entity is suspended. Therefore the group considered the entity as abandoned. Board 1.5.3 Ltd. Currently the Southeast Exchange Company (South Africa) Pty Ltd Southeast Exchange Company (South Afiica) Pty Limited (the "Company") was incorporated as a private limircd company with Thc Companies and Intellectual Property Commission under registration no. 20111008619107 ot 15 April 201l. The Company is a wholly owned subsidiary of Southeast Bank Limited. Southeast Exchange Company (South Africa) Pty Limited operates its operation with two branchcs onc in Johannesburg anothcr in Cape Town (established in November 2019). The principal activitics of the Company are to carry on the remittance business as well as to undertake and participate in transactions, activities and operations generally carried on or undertaken by Exchange House. The subsidiary is registered in South Africa. Thc financial statements of the Company is audited by G. L Palmer and Company. Thc audited financial statements ofthis subsidiary are attached in Appendix - C. 1.5.4 Southeest Financial Senices (Australia) Pty Ltd Southeast Bank Limited discontinue operation of Southeast Financial Services (Ausralia) Pty Ltd after obtaining permission from the Bangladesh Bank vide letterno. BRPD(AM) 204113D019-3580 dated 09 May 2019. 20
21. 2 Basis 2 .1 Statcment of compliance ofpreparation The Financial Reporting Act, 2015 (FRA), was enacted in thc year 2015. The Financial Reporting Council (FRC) under the FRA was collstituted in20l7, but the Financial Reporting Standards @RS) under this council are yetto be issued for public interest entities such as banks. The Bank Company Act, 1991, was amended to require banls to prepare their financial statements under such financial reporting standards. As FRS is yet to be issued by FRC, as per the provisions ofFRA (section-69), consolidated and separarc financial statements ofthe Group and the bank respectively, have been prepared in accordance with the Intemational financia Reporting Standards (FRS) and lnternational Accounting Standards (IAS) as adopted by The Institute ofChartered Accountants ofBangladcsh (CAB) and, in addition to this, the bank also complied with the rcquirements of the following laws and regulations from various Government bodies: i) The Bank Company Act, l99l and amendment thereon; ii) The Companies Act, 1994; iii) Circulars, Rules and Regulations issued by Bangladesh Bank (BB) time to time; iv) Bangladesh Securities and Exchange Rules, 1987; Bangladesh Securities and Exchange Ordinance, 1969; Bangladesh Securities and Exchange Act, 1993 and Bangladesh Securities and Exchange Commission @ublic Issue) Rules 2015 and amendments thereon; v) The Income Tax Ordinancc, 1984, and amcndments thereon; vi) The Value Added Tax Act 20l2,T7re Value Added Tax Rules,2016 and amendments thereon; vii) Dhaka Stock Exchange Limited @SE), Chittagong Stock Exchange Limited (CSE) and Central Depository Bangladesh Limited (CDBL) rules and regulations; and viii) Financial Reporting Act 2015. In case any requirement of the Bank Company Act, 1991, and provisions and circulars issucd by Bangladesh Bank (BB) differ with those of IFRS, the requirements of the Bank Company Act, 1991, and provisions and circulars issued by BB shall prevail. Material departures from the requiremcnts of IFRS are as follows: i) Presentation of fi nancial strtements IFRS: As per IAS l: Presentation of Financial Statements, a complete set of financial statements shall comprise a statement of financial position as at the end of the period; a statemcnt of profit or loss and other comprehensive income for the period; a statement of changes in equity for the period; a statemelrt of cash flows for thc pcriod; notcs, comprising significant accounting policies and other explanatory information; and comparative information in respcct ofthe preceding period. The entity shall also present current and non-current assets and liabilities as separatc classifioations in its statement of financial position. Bangladesh Bank: The presentation ofthe linancial statetnents in prescribed format (i.e. balance sheet, profit and loss account, cash flow statement, statement of changes in equity, liquidity statemeot) and certain disclosures therein are guided by the "First Schedule" (section 38) ofthe Banking Companies Act l99l (as amcndment up to datQ and BRPD circular no. 14 dated 25 June 2003 and subscquent guidelines issued by Bangladesh Bank. In the prescribed format, there is no option to present assets and liabilities under currcnt and non-current classifications. ii) Name of thc financial strtcments IFRS: As per IAS 1, complete set of financial statements consists statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and notes, comprising sigrrificant accounting policies and other explanatory information. Bangladesh Bank: The forms of financial statements and directives for preparation thereof ofthe bank companies in Bangladesh areguidedbyBRPDCircularno. 14,datedzsJune2003andsubsequcntamendmentsthereoffromtimetotime.BRPDcircularno' 14 states the statement offinancial position as balance sheet and statement ofprofit or loss and other comprehensive income as profit and loss account. 21
22. iii ) Investment in shares and Sccurities IFRS: As per requirements of IFRS 9: olassification and measurement of investment in Share and Securities will depend on how these are managed (the entity's business model) and their contractual cash flow characteristics. Based on thesc factors it would generally fall either under "at fair value through profit and loss account" or under "at fair value through other comprehensive income" where any change in the fair valuc (as measured in accordance witt IFRS 13) at the year-end is taken to profit and loss account or other comprehensive income respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investnents in quoted shares and unquoted shares are revalued at the year end at market price and as per book value for any loss arising from diminution in value of investment. iv) oflast audited balance sheetiespectively. provision should be made Rcvaluation gain (loss) on Governmcnt sccurities IFRS: Govemment securities refer primarily various debt instuments which include both bonds and bills. As per requirements of IFRS 9 Financial Instruments, bonds can be categorised as "Amortised Cost (AC)" or "Fair Value tt'ough profit or loss (FVT?L)" or 'Fair Value through Otho Comprehensive Incomc (FVOCD". Bonds designarcd as Amortised cost are measured at amortized cost method and interest income is recognized through profit atrd loss account. Any changes in fair value of bonds designatcd as FVTPL is recognized in profit and loss account. Any changes in fair value of bonds designated as FVOCI is recogpized in other reserve as a part ofequity. As per requirements of IFRS 9, bills can be categorised either as "Fair Value Through profit or Loss (FVTpL)" or..Fair Value through Other Comprehensive lncome @VOCD". Any change in fair value of bills is recogrized in profit and loss or other reserve as a part ofequity respectively. Bangladesh Bank IIFT securities are rcvalued on the basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognized in other reserves as a part ofequrty and any losses on revaluation of securities which have not matured as at the balancc sheet date are charged in the profit and loss account. Interest on HFT securities including amortization ofdiscount are recognized in the profit and loss account. HTM securitics which have not manred as at the balance sheet date are amortized at the year end and gains on amortization are recognized in other reserve (loss are recognized in profit and loss account) as a part ofequity . v) Provision on loans and ldvonces IFRS: As per IFRS 9 Financial Instuments an entity shall recognize an impairment allowance on loans and advances based on expected credit losses. At each reporting date, an entity shall measure the impairment allowance for loans and advances at an amount equal to the lifetime expected credit losses if the credit risk on these loans and advances has increased significantly since initial recogtition, whether assessed on an individual or collective basis, considering all reasonable information (including that which is forwardJooking). For those loans and advances for which the credit risk has not increased significantly since initial recogrition, at each reporting date, an entity shall measure the impairment allowance at an amount equal to 12 month expected credit losses that may result from default events on such loans and advances that are possible within 12 months after reporting date. Bangladesh Bank: As per BRPD circular No. 24 da&d 17 November 2019, BRPD circular No. 6 dated 19 May 2019, BRPD circular No. 4 dated 16 May 2019, BRPD circular No. 3 dated 2l April 2019, BRPD circular No.l5 dated 27 September 2017, BRPD circular No.16 dated l8 November 2014, BRPD circular No.14 datsd23 September 2012, BRPD ctcular No. 19 dated2T December 2012, BRPD circular No. 05 dated 29 May 2013 and BRPD circular No.l darcd 20 February 2018 a general provision at 0.25o/oto 5% under different categories ofunclassified loans (good/standard loans) has to be maintained regardless ofobjective evidence ofimpairment. Also, specific provision for sub-standard loans, doubtful loans and bad losses has to be provided at2lVo, 50%o and 100% respectively for loans and advances depending on time past due. Again, as per BRPD circular no. l0 dated lE September 2007 and BRPD ckcular no. 14 dated 23 September 2012, BRPD circular no. 07, dated 2l June 2018, a generat provision at l% is required to be provided for all off-balance sheet exposurcs except on 'bills for collection' and 'guarantecs' whcre the counter guarantees have been issued by multilateral dcvelopment bank (MDB/intemational bank having BB rating grade equivalent outlined in the Guidelines on Risk Based Capital Adequacy @evised Regulatory Capital Framework for banks, in line with Basel-[I). Such provision policies are not specifically in line wittt those prescribed by IFRS 9. 'l' However, if there is any stay order issued by the Honorable High Court Division of the Suprerne Court of Bangladesh against any non-performing loans for reporting such loans as unclassified category, the Bank maintains at least general provision for such loans under unclassified loan category as pcr Bangladesh Bank guidelines. Where Bangladesh Bank suggests any additional provision to bc maintained for such loans, the Bank also complies with that. 22
23. vi ) Recognition of intercst in swpensc IFRS: Loans and advances to customers are generally classified at amortized cost as per IFRS 9 and interest income is recognized in profit and loss account by using the effective interest rate method to the gross carrying amormt over the term of the loan. once a loan subsequently become credit-impaired, the entity shall apply the effective interesi rate to the amortized cost ofthese loans and advances. Bangledcsh Bank As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans is not allowed to be recogrized as income, rather the corresponding amount needs to be credited to an intercst in suspense account, which is prescnted as liability in the balance sheet. vii) Other comprehcnsive income IFRS: As per IAS I Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a Single Comprehensive Lrcome statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The of frnancial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensivc Income allowed to be included in a single Other Comprehensive lncome (OCI) statunent. As such the Bank does not prepare the OCI statement. However, elements of OCI, if any, are shown in the statements of changes in equity. templates viii) Financial instrumcnts - prcsentation and disclosure In several cases Bangladesh Bank guidelines categories, rec,ogniza,, measure and present financial instruments differently from those prescribed in IFRS 9 Financial Instruments. Hence some disclosure and presentation requirements of IFRS 7 Financial Instuments: Disclosures and IAS 32 Financial Instruments: Presentation, carmot be made in this financial staternents ix) Repo and revene repo transactions IFRS: As per IFRS 9 when an entity sells a financial asset and simultaneously enters into an agreement to repurchase thc asset (or a similar asset) at a fixed price on a future date (repo or stock lcnding), the arrangement is accounted for as a deposit, and the underlying asset continues to be recogrized in the cntity's financial statements. This transaction will be treated as loan and the difference between selling price and repurchase pricc will be treated as interest expense. The same rule applies to the opposite side ofthe fiansaction (reverse repo). Bangladesh Benk: As per BRPD guidelines, when a bank sells a furancial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a normal sales transactions and the financial assets are derecognized in the seller's book and recognized in the buyer's book. x) Financial guarrntecs IFRS: As per IFRS 9 Financial Instruments, financial guarantees are conhacts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to makc payment when due in accordance with the term ofa debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortized amount and the loss allowance determined a:i expected credit loss under IFRS 9. Financial guarantees are prescribed to be included within other liabilities. Bangladesh Bank As per BRPD 14, financial guarantees such as [.,/C, UG will be treated as Off-Balance Sheet items. No liability is recoenized for the euarantee exceot the cash marsin. xi) Cash and cash equivalcnts IFRS: Cash and cash equivalent items should bc reported as cash item as per IAS 7. Bangladesh Bank: Some cash and cash equivalent items such as 'money at call and on short notice', Treasury bills, Prize bonds are not shown as cash and oash equivalent. Money at call and on short notice presented on the face of the balance sheet. Treasury bills and Prize bonds are shown in Investnents. 23
24. xii ) Non-banking assets IFRS: No indication ofnon-banking asset is found in any IFRS. Bangladcsh xiiD Bank As per BRPD 14, there must exist a face item named non-banking assets. Cash flow statement IFRS: As per IAS 7 Statement of Cash Flows, Cash Flow Statemcnt can be prepared using eithcr in direct method or in indirect method. The presentation is selected to present these cash flows in a maoner that is most appropriate for the business or industry. The method selected is applied consistentlv. Bangladesh xiv) Brnk As per BRPD 14, cash flow is the mixhrc of direct and indirect method. Balance with Bangladesh Bank (Cash reserue retio) IFRS: Balance with Bangladesh Bank should bc trcated as other asset as it is not available for use in day to day operations as per IAS 7. Bangladesh xv) Bank Balance with Bangladesh Bank is treated as cash and cash equivalens. Presentation of intangible asset IFRS: Intangible asset must be identified and recognizcd, and the disclosure must be given as per IAS 38. Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14. xvi) Off-balance sheet items IFRS: There is no concept ofoff-balance sheet items in any IFRS; hence there is no requirement ofdisclosure ofoff-balance sheet items on the face Bengladesh ofthc balanoe Bank As sheet. per BRPD 14, offbalanc,e sheet it€ms (e.g. Letter of crediq kfier of guarantee etc.) must be disclosed separately in face ofbalance sheet. xvii) Disclosure of appropriation of profit IFRS: There is no requirement to show appropriation ofprofit in the face ofstaternent ofcomprehensive income. Bengladesh Bank: As pcr BRPD 14, an appropriation ofprofit should be disclosed in the face ofprofit and loss account. xviii) Loans and advance netofprovision IFRS: As per IFRS 9, loans and advances/Investnents should be presented nct ofprovision. Bangladesh Bank: As per BRPD 14, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances. xix) Rccovery of written ofrloans IFRS: As per IAS I, an entity shall not offset assets and liabilities or income and experues, unless required or permitted by any IFRS. Again recovery of written offloans should be charged to profit & loss account as per IFRS 15. provision Bengladesh Bank As per BRPD 14, recoveries ofamount previously written offshould be adjusted with the specific for loans and advances. (Also refer to note 3.21 Compliance of IFRSs) 24
25. 2 .2 The Bank's compliance with related pronouncements by Bangladesh Bank i) Internsl control The objective ofinternal contol is to ensure that management has reasonable assurance that (i) operations arc effective, efficient and aligned with srategy, (ii) financial reporting and managcment information is reliable, complete and timely accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical values including sustainability and (iv) assets ofthe company arc safeguarded and frauds & errors are prevented or detected. Southeast Bank Limited has established an effective intemal connol system whose primary aim is to ensure the overall confol of rists and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high level compliance culture among the personnel of the Banh establish efficieot and qualified operating model in the Bank, ensure reliability of internal and external information including accounting and financial information, secwe the Bank's operations and assets, and comply with laws, regulatory requirements and internal policies. The Board of Directors of Southeast Bank Limited, through its Audit Committee, periodically reviews the effectiveness of Bank's internal control system covering all the material controls, including financial, operational and compliance controls, risk management systems, the adequacy of resources, qualifications and cxpericnce of staff of the accounting and financial reporting functions. Board Audit Committee reviews the actions takcn on intcrnal control issucs identified by the intemal and extemal auditors and regulatory authorities. It has activc oversight on the inrcrnal audit's independence, scope ofwork and resources and it also reviews the functions of Internal Contol & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the intemal audit activities. ii) Risk management Banking business faces uncertainties in its operating environment, which, if not managed and mitigated, would not only disrupt the achievement ofis srategic and operational objectives, but may also cause cxtensive financial and reputational loss. Effective risk management enables Banks to take better and informed decisions that substantially improve the probability of achieving their strategic and operational objectives. In this connection, the Bank has come forward to establish a general framework to manage the risk factors considering Bangladesh Bank's guidelines. As one of the leading Banks in Bangladesh, Southeast Bank Limited (SEBL) has established approved policies in compliance with central bank's guidelines covering major risk areas such as: (a) Credit (b) Foreigr Exchange (c) Asset Liability Management (d) Money Laundering Prevention (e) Intemal Control & Compliance (f) Information and Communication Technology. For strengthening and updating risk management systun, the Bank has dweloped a manual for core risks assessment in light of the Bangladesh Bank's Risk Managemcnt Guidelines. The purpose of this assessment is to inform management about the loopholes of full fledged implementation of core risks management, risk managemcnt culture, restructure minimum standard and assist in the ongoing improvement. Risk Managernent Reports (RMR) are being prepared on monthly, quarterly and semiannually basis and is reviewed in the mon&ly risk management meeting to have management opinion on the issues identified in RMR. iii) Internal audit Internal audit is the continuous and systematic process ofexamining and reporting on the activities ofan organization undertaken by the specially assigned staf(s). tntemal auditor works as the Eyes & Ears of the management. It may therefore be used to bridgc the gap between management & shop floor. It can assure the management that the internal controls arc adequate and in operations, the policics and systems laid down are being adhered to and accounting records provided by all levels are correct. is Internal audit mechanism is used as an important element to ensure good governance of SEBL. Internal audit activity of SEBL preventing errors and include detecting These services. of important number with a provides management senior effective and it regulations, and fraud, testing intemal confiol and monitoring compliance with own policies & procedures, applicable rules & instructions/ suidelines of regulatorv authoriW etc. of the important During the year 2019, Audit & Inspection Unit of ICCD conducted inspection on most of the branches and somc inspeotions to the audits/ the of presenting findings thc reports plan per submitted and as Bank of the head office divisions of guideline. Necessary control appropriate authorities. Thc bank conducted the risk grading of branches as per Bangladesh Bank The key points of the reports. in these madc or obscrvations suggestions on the taken have been n1i"r*, and corrective actions have been taken Reports have also been discussed in the meetings of the Audit Committee of the Board and necessary steps Bank' of the & Compliance Internal Contols of according to the decision of the said Committee for correct functioning 25
26. iv ) Fraud and forgerics Fraud can happen anywhere. Though, only relatively few major frauds are picked up by the media, huge sums are lost by all kinds of businesses against huge number of smaller frauds. The risks of fraud is increasing day by day as a result of growing globalization, more competitivc markets, rapid developments in technology, periods of economic difficulty, etc. Banks by virtue of the nature of activities undertaken and its operating environment are vulnerable to frauds, which take place when aggressive business sfrategy and process for quick growth is adopted without adequate/appropriate internal controls or non-adhering of operating standards/ oonfrols. In the recent past incidurce offrauds in the Banking industry has increased which calls for concerted steps in investigating the frauds and identifring the fraudsters for eventual criminal prosecution and intemal punitivc action. It will never be possible to eliminate all frauds and no system is completely fraud proof, since many fraudsters are able to bypass confol systems put in place. SEBL pays attention on anti-fraud internal contols for prevention of fraud and forgery. SEBL assesses/evaluates the effectivencss of its anti-fraud intemal control measures on quarterly basis as per the itsms/areas mentioned in the prescribed checklist ofBansladesh Bank. 2.3 Basis of meosuremcnt The financial statements ofthe Bank have been prepared on the historical cost basis except for the following: - Government Treasury Bills and Bonds designated as 'Held for Trading QfI)' at present value using marking to market concept with gain crediting revaluation reserve Govemment Treasury Bills and Bonds desigrated as 'Held to Maturity (ITM)' and remeasured Govemment Treasury Bond at present valuc using amortization concept Investrnent in shares of lisrcd companics Znro Coupon Bond are measured at present value using amortization concept. Land is recogrrized at cost at the time ofacquisition and subsequently measured at fair value following revaluation model as per IAS 16: Property Plant and Equipment. No adjustnent has been made for inflationary factors affecting the financial statements. The accounting policies, unless otherwise stated, have been oonsistently applied by the bank, as appropriate. 2.4 Functional and presentotion currency These financial statements are presented in Bangladesh Taka (Taka/Tk) which is the Bank's functional currency. Except otherwise indicated, frnancial information presented in Taka has been rounded to the ncarest integer. 2.5 as Use of cstimetcs and iudgments to The preparation of these financial statements in conformity with Bangladesh Bank circulars and IFRSs requires management amounts of assets, policies the reported and of accounting the application judgmenS, affect that assumptions and estimates maki liabilities, income and expenses. Actual results maY differ from these cstimates. are recognized in the Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates periods affected' period in which ttre estimate is revised and in any future judgments in applying accounting policies that have the Information about significant areas of estimation, ucertainty and critical the following notes: in included is 2019 year December ended 3l the in effect most sigrificant a) Note3.3.3 : b) Note 3.3.4 : c) Note 21.3.2 : d) Note 24 : e) Note2l.4.2 : 2.6 Rateofprovisionforloans,advances/investnents Useful lives of depreciable asses Provision for current tax & deferred tax Assets revaluation reserve Leaseliabilities Reporting period Thcse financial statements cover one calendar year from 2.7 I January 2019 to 3l December 2019' Cash flow stotement Cash flow statement has been prepared in accordance with thc BRPD Circular Regulation & Policy Department of Bangladesh Bank' 26 No. 14 dated 25 Junc 2003 issued by the Banking
27. 2 .E Stetemcnt of changcs in equity The Statement ofchanges in equity reflects information about the increase or decrease in net assets or wealth. 2.9 Liquidity strtements The consolidated and separate liquidity statfiient of assets and liabilities as on the reporting darc has been prepared on residual maturity term as on 3l December, 2019 under the presented format of BRPD Circular # 14 dated25 June 2003, SEBL has prepared its liquidity statemcnt on following basis: Sl, Nn- Items On the besis of Balance with other Banls and financial institutions, money at call and short noticc, etc. h Investsnents d Fixed e Other assets f Maturity tcrm lResnective mehrritv Reoavrnent schedules I Icefirl liwes Realizations/ amortizations from other banks, frnancial institutions and o Maturity term and past frcnd of withdrawal by the accounts E Maturities/ repayment terms depositors. h I Other lons term liabiliw Provisions end othr liehilities Maturitv term Pammts/ adirrstmmts schedule Consolidated liquidity statements of the Group and the separate liquidity starcmens of the Bank have been fumished in AnnexurcB and Anncxurc-B.l respectively. 3 Significant accounting policics The accounting policy set out below have applied consistently to all periods presented in these consolidated financial statements the Group and those ofthe Banh and have been applied consistently by the group entities. 3.1 of Basisofconsolidation The consolidated financial statements include the financial statements of Southcast Bank Limited and its three subsidiaries Southeast Bank Capital Services Limited, Southeast Financial Services (UK) Lt{ and Southeast Exchange Company (South Africa) Pty Ltd made up to the end of the financial year as on 3l December, 2019. The Consolidarcd Financial Statements have been prepared in accordance with IFRS-I0 "Consolidated Financial Statements". Consolidated Financial Statements have been prepared by using uniform accounting policies for like transactions and other events in similar circumstances. 3.1.1 Subsidiarics Subsidiaries are all entitics over which the bank has the power to govem the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. A parent of a subsidiary should present consolidated financial statements according to IAS 27 "separatc furancial staternents" and IFRS l0 "Consolidated Financial Statements"' The financial statements of subsidiary are included in the consolidated frnancial statements from the date that contol effectively commences until the date that the control effectively ceases. The conversion policy ofsubsidiary companies is given below: Price Perticulars ror Assets & Liabilities & F,xoeases 27 Southeast Financial Seniccs (UK) Ltd Exchange Company (South
28. 3 .1.2 Businesscombinations Business combinations are accounted for using the acquisition method as at the acquisition date; i.e. when control is transfcrred to the Group. Control is the power to govem the financial and operating policies ofan entity so as to obtain benefits from its activities. ln assessing control, the Group takes into consideration potential voting rights that are currcntly exercisable. The Group measures goodwill at the acquisition date as: the fair value ofthe consideration hansferred; plus the recogrized amount ofanynon-contolling interests in the acquire; plus ifthe business combination is achievcd in stagcs, the fair value ofthe pre-existing cquity interest in the acquiree; less o . o . the net recognized amount (generally fair value) ofthe idcntifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss. Transactions costs, other than those associated with the issue of debt or equity scourities, that the Group incurs in connection with a business combination are expensed as incurred. 3.1.3 Non-controllinginter€st For each business combination, the Group elects to measure any non-confiolting interests in thc acquiree either: a a at fair value; or at their proportionate share ofthe acquiree's identifiable net assets, which are generally at fair value. Changes in thc Group's interest in a subsidiary that do not result in a loss ofcontrol are accounted for as transactions with owncrs in their capacity as omers. Adjustnents to non-conrolling interests are based on a proportionatc amount of the net assets of the subsidiary. Subsidiaries are the entities controlled by thc Group. The financial steteNnents of subsidiaries are included in the consolidarcd financial statements from the date that control commences until fte date that conEol ceases. 3.1.4 Transactionseliminatedonconsolidation Intra-group balances, and income and expenses (except for foreign currency tansaction gains or losses) arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrcalised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence ofimpairment. 3,2 Foreign currency 3.2.1 Foreigncurrencytransactions Transactions in foreign cwrencies are translated into the respective functional cwrcncy the date ofthe transaction. ofthe operation at the spot exchange rate at Monetary assets and liabilities denominarcd in forcign currencies at the reporting date are translarcd into the functional currency at the spot exchange ratc at that date. Non-monetary assets and liabilities denominated in forcigr currencics that are measured at fair value are retranslated into the functional cwrency at the spot exchange rate at the date that the fair value was determined. Nonmonctary assets and liabilities that are measured in terms of historioal cost in a foreigr currcncy are translated using the exchange rate at dle date oftransaction. Foreigr currency differences arising on translation are recognised in profit or loss, except for differences arising on translation of equity investments in rcspect ofwhich an election has bcen made to present subsequent changes in fair value in equity' 774
29. 3 .2.2 Foreign opcretions The assets and liabilities of foreign operations, including goodwill and fair value adjustnents arising on acquisition, are translated into Taka at spot exchange rates at the reporting date. The income and expetNes of-forcign operations, are translated into Taka at average exchange rates. As per IAS 21, "Foreign Currency Transactions", foreign currency denominated nonmonetary items of oBUs are translated at historical ratg as the oBUs are considered as an integra part of the Bank,s operation not a foreign operation due to specific regulations goveming the OBU and unique nature. Foreign currency differences are presented in the foreign currency translation reserve in equity. However, ifthe operation is a nonwholly-ovmed subsidiary, then the relevant proportionate share of the tanslation difference is allocated to the non-conrolling interest. When the settlcment of a monctary itern receivable from or payable to a forcign operation is neithcr planned nor likely in foreseeable future, foreigr exchange gains and losses arising from such a monetary item are considered to form part investnent in the foreign operation and presented in the translation reserve in equity. the of the net oftheir veluation 3.3 Assets and basis 3.3.1 Cash and cash cquivalents Cash and cash equivalents include notes and coins on hand, unreshicted balances held with Bangladesh Bank and its agent bank, balance with other banks and financial institutions, money at call and on short notice, investnents in teasury bills and prize bond. 3.3.2 Investments All investrncnt securities are initially recognised at cost, including acquisition charges associated with the invesfinent. premiums are amortiscd and discounts are accredited. Hcld to Maturity Investments which have, 'fixed Maturity'. or determinable payments' and are intended to be held to maturity are classified as 'Held to Held for Trading Investnent classified in this category are acquired principally for the purposc of selling or repwchasing in short trading or if designated as such by the management. Re-measured bond As pcr DOS circular lettcr no. 2 dated 19 January 2012, Treasury bond held in HFT category by the Primary Dealer @D) may be re. measured at amortized cost instead offair value. Revaluation As per the DOS Circular letter no. 5 dated 26 May 2008, IIFT securities are revaluated each week using Marking to Market concept and HTM securities are amortised once a year according to Bangladesh Bank guidelines. Initial Name of thc Investment recogniti Veluation Mcthod Recording of changes on value (using Treasury Bills and Bonds (HFT) Cost Treasury Bills and Bonds (HTM) Cost Government Treasury Bonds Government Islamic Bond Prize Bonds Cost to market present value (using concept) present value (using concept) to profit and loss account, gain to rescrve. in value ofsuch investnents booked to equity, dccrease to profit acc,ount. in value ofsuch investnents bookcd to equity, decrease to profit Cost Cost 29 At cost Not aonlicable.
30. Name of thc Invcstment Valuation Method Rccording ofchrnges cost or net book Shares (unquoted)* Shares (quoted) * Mutual fund (closed-end) of thc last audircd sheet whichever Cost t to profit and loss account but no gain booking. Cost At cost or market value whichever is lower at balence sheet darc offgain) to profit and loss account but no unrealised gain booking. Cost Lower ofcost and (higher ofmarket value Loss (net) to profit and loss account but no unrealised gain booking. and 85% Loss (net ofNAV) Provision for shares against unrealised loss (gain net off) has been made as per DOS circular no. 4 dated 24 Novenrber 201 for mutual funds (close end) as per DOS circular letter no. 3 dated 12 March 2015 of Bangladesh Bank. I and Details are shovyn in notes 8 and 9. 3.3.3 Loans and advances/ investmcnts and provisions for loans and advances/ investments a) Loans and advances ofconventional Banking/Investncnts oflslamic Banking branches arc stated in the Balance Sheet on gross value. b) At each balance sheet date and periodically throughout the year, the Bank reviews loans and advances to assess whether objective evidence that impairment of a loan or portfolio of loans has arisen supporting a change in the classification of loans and advances, which may result in a change in the provision required in accordance with BRPD circular No. 24 (17 November 2019), BRPD ciroular No.6 (19 May 2019), BRPD circular No.4 (16 May 2019), BRPD circular No. 3 (21 April 2019), BRPD circular No.l (20 February 2018), BRPD circular No.15 (27 September 2017), BRPD circular No.l6 (18 November 2014), BRPD circular No.l4 (23 September 2012), BRPD circular No. 19 (27 Decembcr 2012) and BRPD circular No. 05 (29 May 2013). The guidancc in the circular follows a formulaic approach whereby specified rates are applied to the various categories of loans as defined in the circular. The guidance in the ciroular follows a formulaic approach whereby specified rates are applied to the various categories of loans as defined in the ciroular. BRPD circular No.l4 (23 September 2012) as amended by BRPD circular No. 19 (27 Decemb* 2012) also provides scope for firther provisioning based on qualitativejudgnents. The rates ofprovision for different classifications are given below: Ratc Particularc General provision on: All unclassified loans and advances/investnents except followings lo/o 0.25o/o Small and medium enterprise {inancing Housing finance (tIF) and loaos for professionals (LP) to set up business under consumer financing scheme Consumer financing Loan to Brokerage Houses @Hs/Merchant Banls Sponsor Directors (SDs) against shares Special mention account (SMA) t%-2% 2%-5% (MBs/ 2% 0.25%o-5o/o Specific provision on: Substandard loans and advances/investnents 20% Doubtfrrl loans and advances/investnents 50% 100% Bad/loss loans and advances/investments Provisions for Short tcrm Agricultural and Micro-Crcdits All credis except'Bad/Loss' t%-5% (i.e. Doubtful, Substandard, irregular and regular credit) l00o/o Bad/loss c) offto the extent that Loans are normally written off, when there is no realistic prospect of recovery of these arnounts and in accordance with (06 February 2Ol9), BRPD circular No.l3 (07 Novembcr 2013) and BRPD circular No'2 (13 Loans and advances are written i) BRpD circular No.0l January 2003), and ii) against which legal cases d) are filed and classified as bad/loss as per guidelines ofBangladesh Bank. These write offhowever will not undermine,/affect the claim amount against the borrower. Detailed mcmorandum records for all such write offaccounts are maintained and followed up. Amounts receivable on credit cards are included in advances to oustomers at the amounts cxpected to be recovered. Details are shown in notes l0 and I l. 30
31. 3 .3.4 Fixed assets and deprcciotion Rccognition and mcasuremcnt Items of fixed assets excluding land are measured at cost/revaluation less accumulated depreciation and accumulated impairment losses, ifany. Land is measured at revaluation. Cost includes expenditure that are directly atributable to the acquisition of asset and bringing to the location and condition neccssary for it to bc capable ofoperating in the intended manner. When parts ofan item of fixed asset have different useful lives, they are accounted for as separate items (major components) fixed assets. of The gain or loss on disposal of an item of fixed asset is detfinined by comparing the proceeds from disposal with the carrying amount ofthe item offxed asset, and is recognised in other income/other expenses in profit or loss. Subsequcnt costs The cost of replacing a component of an item of fixed assets is reoogrised in the carrying amount of the item if it is probable that the future cconomic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount ofthe replaced part is derecognised. The costs ofthe day-to-day servicing offixed assets are reoognised in profit or loss as incurred. Depreciation recogrised in profit or loss on reducing balance method, except motor vehiclcs which are depreciated on straight thc estimated useful lives of each part of an item of fixed assets since this most closely reflects the expected paftem ofthe future economic benefits embodied in the asset. Ia case ofacquisition offixed assets, depreciation is charged of acquisition, whereas depreciation on disposed off fixed assets is charged up to the month prior to the disposal. Asset category-wise depreciation rates for thc curent and comparative years are as follows: Depreciation is line basis, over ofconsumption from the month Rate ofdeorcciation Cetcqorv of assets Nit Land Buildings Fumiture and fixtures l0o/o Office appliances 20o/o Professional and reference books Electrical appliances 30o/o Computer 20o/o ATMBooth 20o/o Motor vehicles 20o/o 4o/o 20o/o Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted, ifappropriate. 3.3.5 Implementation of IFRS 16 and its rclevant assumptions and disclosures IFRS 16 Lrases, dcfines a leasc as "A contact, or part of a contract, that conveys the right to use an asset for a period of time in exchange for consideration". In order for such a contract to exist the user ofthe asset needs to have the right to: - Obtain substantially all of the economio benefits from the use of asset Qdentifiablc asset) - The right to direct the use ofasset As per the ncw standard, from lessee's perspective, almost all leases being recopized on the balance shcet the distinction between a lease operating and finance leases is rernoved. Upon lease cotnmencement a lessee recognizes a right-of-use (ROl) asset and lessee. liability.-The ROU asset is initially measured at the amount of the lease liability plus any initial direct costs incurred by the or obligations and rcstoration prior to commencernent AdjustmenS may also be rcquired for lease incentives, payments at or similar. The impact ofthe new standard on lessees' financial statements are: - An increase in recognized asses and liabilities - More lease expenses recognized in early periods oflease, and less in the later periods ofa lcase - A shift in lease expense classification from rental expcrses to interest expeDse and depreciation. 31
32. Leese liabilities At the commencemcnt date ofthe lease , the bank rccognizes leasc liabilities measured at the prescnt value of lease payments to be made ovcr the lease term usiug incremental borrowing rate at the date ofinitial application. Lrase liability is measured by increasing the carrying amount to reflect interest on the lease liability, rcducing the carrying amount to reflect the lease payments, and remeasuring the carrying amount to reflect any reassessment or lease modifications. Interest on the lease liability in each period during the lease term shall be the amount that produces a constant periodic rate interest on the remaining balance ofthe lease liability. of International Accounting Standard Board (IASB) has adopted IFRS 16 (replacing IAS 17) globally effective from 0l January 2019 and Bank has adopted IFRS 16 from the same date proposed by IASB. In Bangladesh Institute of Chartered Accountants of Bangladesh (CAB) adoprcd IFRS t6 with samc cffective date. As Bangladesh Bank (BB) has no other altemative regulation or guidance regarding the same, the bank has adopted IFRS 16 from the same date in preparing solo financial staternents as described in note no. 3.28. SummarvofIFRS 16: Particulars Addition during the year Depreciation/ interest cxpenSe Right Of Use (ROU) Opening Accumulatcd deprccirtion/ Lease Closing Belance Assets 27t,190,059 63,595,041 63,s9s,041 207,595,01 8 Lrase Liabilities 169,602,073 10,134,250 46,780,250 132,956,073 Short-term leeses end leeses oflow value assets The Bank has elected not to recognize right-of-usc asscts and lease liabilities for leases of low value assets and short term leases, i.e. for which the lease term ends within 12 months of the date of initial application. The Bank recogrizes lease payments associated with these leases as an expeille. 3.4 Liabilities rnd bosis of their valuation 3.4.1 Borrowings from othcr banks, financial institutions and rgcntg Bonowings from other banks, furancial institutions and agents includes refinance from Bangladesh Bank against agro-based credit, SME Loan etc., interest-bearing bonowings against securities from Bangladesh Bank and call borrowing from other banls. These items are brought to financial statements at the gross value ofthe outstanding balancc. Details are shown in notes 16 and 17. 3.4.2 Non-Convertible Subordinated Bond The Bank has issued 7 (Seven) years term subordinated bond during the year 2014 for BDT 3,000,000,000 to raise subordinated debt as part of the Tier-II Regulatory Capital following "Guideline on Nsk Based Capital Adequacy'' through Bangladesh Bank approval letter # BRPD @FIS) 661/148 (P)l 2014-7629, dated 30 November 2014. The Bank has turther issued 7 (Seven) years term 2nd subordinated bond during thc year 2016 for BDT 5,000,000,000 to raise subordinated debt as part of the Tier-II Regulatory Capital following "Guideline on Risk Based Capital Adequacy @evised Regulatory Capital Framework for banks in line with BASEL rII)" vide BRPD Circular No- l8 dated Decernber 21,2014 through Bangladesh Bank approval letter # BRPD (BFIS) 661/l4B(Py2Ol6-6188 dated September 19,2016 and Bangladesh Securities and Exchange Commission approval letter # BSEC/CI/DS-19/20141462 dated August 02,2016. The Bank has turther issued 7 (Seven) yeaf,s tefm 3rd subordinated bond during the year 2018 for BDT 5,000,000,000 to raise subordinated debt as part of the Tier-II Regulatory Capital following "Guideline on Risk Based Capital Adequacy @evised Regulatory Capital Framework for banls in line with BASEL I[)" vide BRPD Circular No' 18 dated December 2l,2Ol4 through Bangladesh Bank approval tetter # BRPD (BFIS) 661/I4B(P)D018-2144 dated March 07,2018' 27,2OlB and Bangladesh Securities and Exchange Commission approval letter # BSEC/CI/DS-19/20141459 datcd March 3.4.3 Deposits and other accounts and shortDeposits and other accounts inctudc non interest-bearing current deposit redeemable at call, intercst bearing on dernand of thc gross value the at financial statements to are brought items These deposit. term deposits, savings deposit and fixed outstanding balance. Details are shown in notes l8 and 19. 32
33. 3 .4.4 Other liabilities other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest suspense, accrued expenses, lease liability etc. Other liabilities are recogrized in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax ordinance, 1984 and intemal policy oitn. gurk. Details are shown in notes 20 and 21. 3.5 CapitaUSharehotdersr cquity 3.5.1 Authorized capital Authorized capital is the maximum amount of share capital that the Bank is authorized by its Memorandum and Articles of Association. Details are shown in note 22.1 3.5.2 Paid up capital Paid up capital reprcsents total amount ofshareholder capital that has been paid in futl by the ordinary shareholders. Holders of ordinary shares are entitlcd to receive dividends as declared from time to time and are entitled to vote at shareholders' meetings. In the event of a winding-up ofthe Bank, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown innote22.2. 3.s.3 Statutory nescrye Statutory reserve has been maintained Companies 3.5.4 Act 1991, until such reserve @20% of profit before tax in accordance equats to its paid up capital together with provisions of section 24 of the Bank with thc share prcmium. Revaluation resenye Revaluation reserve arises from the revaluation ofland and buildings as well as the revaluation ofTreasury bills and bonds (HFT & HTM) in accordance with the DOS circular no. 5 dated 26May 2008 and DOS(SR) llS3tl2ODOlO dated 8 Deccmber 2010. The tax effects on revaluation gain are measured and recognized in the financial statements as per IAS 12: Income Taxes . Details are shown in note 24. 3.6 Contingcnt liobilities A contingent liability is - A possible obligation that arises from past evcnts and the existence ofwhich will be confirmed only by the occurrence or nonoccurrence of one or more uncertrin future events not wholly within ttre conhol of the Bank; or A present obligation that arises from past events but is not recogrized because: - it is not probable that an outflow ofresources embodying economic benefits \ilill be required to settle the obligation; or the amount of the obligation cannot be measured with suflicient reliability. Contingent liabilities are not recognized but disclosed in the frnancial statements unless the possibility ofan outflow ofresources embodying economic benefits is reliably estimated. Contingent assets are not recognized in the financial statements as this may result in the recogrition of income which may never be realiz.ed. 3.7 Revenue recognition 3.7.1 Interest income (Conventional Bonking) Interest on loans and advances is calculated on daily product basis and accrued at the end ofeach month, but charged to customers' accounts on quarterly basis. Interest accrued on loans and advances fall under Sub Standards (SS) and Doubtful @F) category are credited to interest suspense account instead of income account. Interest is not charged on bad and loss loans as per BRPD circular No. I 4 (23 September 2012) as amended by BRPD circular No. I 9 (27 Decemb er 2012) and guideline of Bangladesh Bank. Such interest is kept in separatc memorandum account. lnterest on classified loans and advances is aooounted for on a cash receipt basis. Interest income from fixed deposit with other banks and call lending to other banks is recogtized on accrual basis. 33
34. 3 .7.2 Profit on investment (Islamic Banking) Mark-up on investnent is taken into income account proportionately from profit receivable account. Overdue charge,/compensation on classified investments is tansferred to profit suspense account instead ofincome accognt. 3.7.3 Investment incomc Income on invcstnents is recogrized on accrual basis. Investnent incomc includes discount on treasury bills and interest on heasury bonds. Capital gain on investnents in shares is also included in investnent income. Capital gain is recognized when it is realized. 3.7.4 Fees and commission income The Bank eams fecs and commissions from diverse range of services provided to its customers. Fees and commission income is recogrized on a rcalization basis. Commission charged to oustomers on letters of credit and letters of guarantee are credited to income at the time of elfecting the transactions. 3.8 Interest peid on borrowing and other deposits (Convcntionel Banking) Interest paid and other expenscs are recogrized on accrual basis. 3.9 Profit shared on deposi8 (Islamic Bonking) Profit shared to mudaraba deposits is recognized on accrual basis 3.10 as per provisional rate. Dividends Dividend income is recognized when the right to receive income is established. Usually this is the ex-dividend date for equity securities. Dividends are presented in investrnent income. 3.11 Employce benefits 3.11.1 Provident Fund Provident fund benefits are given to the staffof the Bank in accordance with the registered provident fund rules. The commissioner of Incomc Tax, Largc Tax Payers Unit (LTU), Dhaka has approved the Provident Fund as a rccogrizcd fimd within thc meaning of section 2(52) read with the provisions ofpart - B ofthc First Schedule oflncome Tax Ordinance 1984. The frrnd is operated by a Board of Trustees consisting of 6 (six) members of the Bank. All confirmed employees of the Bank are contributing l0% of their basic salary as subscription ofthe frrnd. The Bank also contributes equal amount to the fund. Contributions made by the Bank are charged as expense and the bank bears no further liability. Interest eamed from the invesments is credircd to the members'account on halfyearly basis. Members are eligible to get both the contribution after 5 (fivc) years ofcontinuous service from the datc of their membership. 3.11.2 Gratuity Fund Gratuity fund benefits are given to the staff of the Bank in accordance with the approved gratulty fund nrles. National Board of Revenuc has approved the gratuity fund as a recogrized gratuity fund wift effect from December 2001. The fund is operated by a Board of Trustces consisting of 7 (seven) members of ttre Bank. Employees are entitled to gratuity benefit after completion of minimum 7 (seven) years of service in the Bank. The amount payable at the date of balance sheet is recogrized and accounted for as at that date based on actual rate. The gratuity is calculated on the basis oflast basic pay and is payable at the rate ofonc month's basic pay for every completed year ofservice. The amount so calculated are tansferred to the fund and charged to expenses ofthe Bank. 34
35. 3 .11.3 Short-tcrmcmployeebencftts Short-term employee benefit obligations are measured on an undiscounted basis and are expenscd as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans ifthe Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. 3.11.4 Workers' Profit Participation Fund (WPPF) As per Bangladesh Labour Act 2006 (amended up to 2013) and SRO no.336ll-aw20l0, all companies fall within the scope of WPPF are required to provide 5% of its profit beforc charging such expense to their cligible employees within the stipulated time. The Bank obtained opinion from its legal advisor regrding this issue. The legal advisor opincd that,"Southeast Bank Limited being govemed by Banking Companies Act, Companies Act, l99l being l99l is obliged to follow thc provisions of Banking Companies Act, 1991, and Banking a special law, provisions of this Act shall prevail over Bangladesh Labour Laws, 2006 (amended up to 2013) which is a general law. Thus, wc take the view that the Bank is not bound to form a WPPF under Bangladesh Labour Laws, 2006 (amended up to 2013)". Consistent with the industry practice and in accordance with the legal opinion and the Bank Company Act, l99l (amcnded up to 2018), no provision has been made for WPPF. 3.12 Provisions and eccrued expemcs ln compliancc with IAS-37, provisions and accrued expenses are recognized in the consolidated and separate financial statements when the Group/Bank has a legal or constructive obligation as a result of past event, benefit will be required to settle the obligation and 3.13 a reliable estimate can be made it is probable that an outflow of economic of the amount of the obligation. Provision for Off-Balancc Shcct Exposurcs In compliance with Bangladesh Bank guidelines off-balance sheet items arc disclosed under contingent liabilitics. As per BRPD Circular No.l0 darcd l8 September 2007 nd BRPD Circular No. 14 dated 23 September 2012 and BRPD circular no. 7 dated2l June 2018 and BRPD Circular no. 13 dated 18 October 2018, a gen€ral provision at lYo is rcquired to be provided for all offbalance sheet exposures except on 'bills for collection' and 'guarante€s' where the counter guarantees have been issued by 'l' equivalent outlined in the Guidelincs on Risk multilateral developmort bank (MDB)/intcmational bank having BB rating grade Based Capital Adequacy @evised Regulatory Capital Framework for banks, in line with Basel-III).. Details fie shown in note 2t.5. t (c'r 3.14 Provision for Nostro Accounts According to guideline of Foreign Exchange Policy Deparfrnent of Bangladesh Bank, Circular No. FEOD (EEMO)/01D005-677 dated 13 Scptember 2005, Bank is not requircd to make provision regarding the un-reconciled dcbit balance as at Balance Sheet date since thcre was no debit entries more than three month. 3.15 Tax expense Tax expense comprises current and defened tax. Current tax and deferred tax are recogrized in profit or loss except to the extent that it relates to items recognized directly in equity. 3.15.1 Current tax Current tax is the tax expected to be payable on the taxable profit for the year, calculated using tax rates as prescribed in the Income Tax Ordinance (ITO) 1984 and relevant Statutory Regulatory Orders (SRO) and any adjustnent to tax payable in respect of previous yea$. Currently the income tax rat€ applicable for banls is 37.50o/o. The estimation of current tax provision involves making judgments regarding admissibility of ccrtain expenses as well as estimating the amount of other expenses for tax purposes. Details are shown in note 21.3.1. 3.15.2 Deferred tax Deferred tax is recognized in respect oftemporary differences between the carrying amounts ofassets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: . temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; . temporary differences related to investnents in subsidiaries to the extent that it is probable that they will not reverse in the forcseeable future; and o temporary differences arising on the initial rccognition ofgoodwill. 35
36. Deferred tax is measured at thc tax rates that are expccted to be applicd to the rcmporary differences when they reverse , based on the laws that have been enactcd or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against ourrent tax assets, and they relatc to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneousty. A defened tax asset is recognized for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and arc reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax rclating to unrealized surplus on revaluation ofheld to maturity (tITtvI) securities and held for hading (HFT) securities and land and buildings are recognized directly in revaluation reserve as a part ofequity and is subsequently recognized in profit and loss account on maturity ofthe security and disposal ofland and buildings. Dctails are shown in note 21.3.2. 3.15.3 Tax exposurcs In determining the amount of current and deferred tax, the Bank takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgmens about future events. New information may become available that causes the Bank to change its judgnent regarding thc adequacy ofexisting tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made. 3.f6 Impairmentofnon-financialassets The carrying amounts of the Group's and the Bank's non-financial assets, other than deferrcd tax assets, are reviewed at each reporting date to determine whether there is any indication ofimpairment. Ifany suoh indication exisB, then the asset's recoverable amount is estimated. An impairment loss is recogrized if the carrying amount of an asset or its Cash Generating Unit (CGQ exceeds its estimated recoverable amount. The recoverable amount ofan use, the estimated future cash ofits value in use and is fair value lcss costs to sell. In assessing value in flows are discounted to their present value using a pre-tax discount rate that reflects current market asset or CGU is the greater assessmeirts of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testin& assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent ofthe cash inflows ofother assets or CGU. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount of the other assets in the CGU (eroup of CGUs) on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has dccreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not cxceed the carrying amount that would have been detcrmined, net of depreciation or amortization, if no impairment loss had been recogtized. 3.17 Earnings per share The Group and thc Bank present basic and dilutcd eamings pcr share @PS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss atfibutable to ordinary shareholders ofthe Group/ Bank by the weighrcd average number ofordinary shares outstanding during the period. Diluted EPS is determincd by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number ofordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comorise share oDtions sranted to emDlovees. Details are shown in notes 64 and 65. 3.18 Reconciliation of inter-bank/inter-branch rccount Books of accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material differences which may affcct the financial statements sigrificantly' Un-reconciled entries in case ofinter-branch transactions as at the reporting date are not material. 36
37. 3 .r9 Risk managemcnt Effective risk management is an esscntial element of our operations and stratery. The Bank monitors risk at all levels throughout its operations and has established units to manage various t]?es of risk. Our risk management framework is designed to identiff, manage and mitigate the risk ofany failure to achieve business objectives. The risk management of the Bank covers following six core risk areas: i) ii) iii) iv) v) vi) Credit Risk Foreign Exchange Risk Asset Liability Management Risk Money Laundering Risk Intemal Contol & Complianoe Risk; and Information and Communication Technology Risk The Bank's risk management policy and process are composed with all the structures, policies, process and sfiategies in line with the guidelines ofcentral bank and other regularity authorities. The Bank endeavors to maximize profits through thc development of an integrated risk management system. 3.19.1 Credit risk Credit risk is the possibility that a borrower or oounter party will fail to repay the borrowed money as per the agreed terms and conditions. Managing Credit risk of the Bank in an efficient manner has become one of the most crucial tasks for the managernent. Given the fast changing, dynamic global economy, implementation of Basel-I[ and the increasing pressure of globalization and liberalization it is essential that banks have robust credit risk management policies and procedures that are sensitive and responsive to these chanses. A thorough assessment & due diligence are done before sanctioning any credit facility at Credit Risk Management Division (CRM) ofthe Bank. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performancc ofthe customor, security ofthe proposed credit facilities and various critical risk factors. The assessment process starts at Branch Credit department by the Officer and ends at Credit Risk Management Division (CRM) in Head Oflice where it is approved / declined by the competent authority. Credit approval authority has been partially delegated to the individual executives. Proposal beyond their dclegation are approved / declined by the Board / Executive Committee @C) of the Board. 3.19.2 Foreign Exchange Risk Foreign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates. The risk is that adverse fluctuations in exchange rates may result in a loss in eamings. As per lhe guidelines of Bangladesh Bank, Southeast Bank Limircd has devcloped a detailed Forcign Exchange Risk Management policy to minimize different types of risks associated with foreigr cxchange [ansactions. The Bank has also dcvclopcd different sfategies to handle foreigr exchange risk by sctting different types oflimits and risk parameters to mcasure and monitor foreign exchange risk exposure ofthe Bank. The Foreign Exchange Desk of Treasury Division is involved in foreign exchange dealing activities with different counterparty banla. The Treasury Back Office is engaged in transfer offunds and passing ofthe transaction entries in the books ofaccounts; the Mid Oflicc is responsible for verification ofthe deals. All foreigr cxchange assets and liabilities are revalued at market rate alt per the directive ofBangladesh Bank. All nostro accounts are reconcilcd on a monthly basis and outstanding entries beyond 30 days arc reviewed by the management for its settlement. 3.19.3 Asset Liability Management Banks are exposed to the several rislcs such as Liquidity Risk, Interest Rate Risk, Foreigr Exchange Risk, Credit Risk and Operational Risk etc. Monitoring and controlling these risks are vital to the survival of a financial institution. Asset-Liability Management is a tool to oversee whether diffcrent balance sheet risks are properly identified, appropriste policies and procedures are well established to control and limit these risks. Asset-Liability Committee (ALCO) reviews counfiy's overall economic position, the Bank's liquidity position, key performancc ratios, interest ratc risk, deposit and advancc growth, cost of deposit & yield on advances, dcposit & lending pricing strategy and different forecasted balance sheet risks ofthe Bank. 37
38. 3 .19.4 Money Laundering Risk Money laundering is the generic tcrm used to describe the process by which criminals disguise the original ownership and control thc proceeds ofcriminal conduct by making such proceeds appear to have derivcd from a legitimarc source. Ifmoney laundering is done successfully, it allows the criminals to maintain control over their procecds and ultimately to provide a legitimate cover for their source of income. Drug traflickers, the terrorists, the organized criminals, the insider dealer, the tax evaders as well as many others who intend to avoid the attention from the authorities of their sudden wealth brought from illegal activities take the help of money laundering. By engaging in this tlpe of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws. Southeast Bank Limited (SEBL) hCI implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably desigred to comply with applicable laws and regulations. It is the policy of SEBL to takc all reasonable and appropriate steps to prevent persons engaged in money laundering, fraud, or other financial crime, including the furancing ofterroris8 or terrorist operations, from utilizing SEBL products and services. SEBL makes evory cffort to remain in full compliance with all applicable AML and CFT laws, rules and standards in thejurisdictions in which it does business. kr order to facilitate compliance with AML and CFT requirements, SEBL has appointed one of its Senior Executives as the CAMLCO (Chief Anti-Money Laundaing Compliance Officer) and a team of employees with experience on AML and CFT requirements under law to oversee the Bank's AML and CFT program. SEBL has devcloped and implemented written AML and CFT policies, procedures, intemal controls and systems, which include Out not limihd to) a customer identification program and procedures; procedures to collect and refresh, as appropriate, customer due diligence information; processes to assess risk; processes and systems to monitor custom€r tansactions and activity; prooesses and syst€ms to identiff and report suspicious activity; and, processes to kccp required records. SEBL educarcs is all employees on AML and CFT requirements and activities and also subjects its AI\,fl. and CFT program to regular indcpendent testing. SEBL cooperates fully with law enforcement and regulatory invcstigations and inquiries in identi$ing thc criminals involve in Money Laundering and Terrorist Activities/Financing. 3.19.5 Internal Control & Compliance Risk Intemal control is fundamental to the successfrrl operation and day-to-day running ofa business and it assists the bank in achieving its business objectives. It encompasses all controls incorporated into tlre strategic, govemance and management proccsses, covering the bank's entire range ofactivities and operations, and notjust those directly related to financial opcrations and rcporting. Its scope is not confined to those aspects of a business ttrat could broadly be defined as compliance matters, but extends also to the performance aspects ofa business. SEBL has established a System of Internal Conrol, which is designed to manage all the risks of failure to a reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable asisurance of effective & eflicient operations covering all conhols including financial & opcrational contols, reliability ofthe financial information, compliance with applicable laws & regulations, and accuracv adherence to management policies, safcguarding ofBank's Asscts, prevention & detection offraud & crrors, & completeness ofthe accounting records. The Board of Directors of SEBL regularly reviews the effectiveness of inrcmal confrol process through its Audit Committee and the Audit Committee plays an effective role amongst the Board of Directors, Management, Shareholders, Dcpositors and develops an efficient, powcrful and a safe banking system. The committer also performs a very important role for publishing Bank's financial statements, developing an appropriate internal control system and maintains an effective communication with intemal and extemal auditors. It sigrificantly contributes in conholling and monitoring various risks factors that arise from the business activities ofthe Bank. Board Audit Committee reviews the actions taken on internal contol issues identified in the reports prepared by the internal & extemal auditors and regulatory authorities. It has active oversight on the internal audit's independence, scope of work and rcsources and it also reviews the functions of Inrcmd Control & Compliance Division of Head Office, particularly thc scope of the annual audit plan and frequency ofthe internal audit activities. 3.19.6 Information and communication technology The Bank has Cenfialized Core Banking Software (CBS)and providing online banking services to its clients through 135 Branches across the country. The Bank is also offering 2417 banh,ng services through its different delivery channels, like Intemet Banking, ATM and Mobile Financial Service (MFS). Besides, the Bank has intoduced Recycler ATM in the brand name of "SEBL Instant Banking Service." Through this service, customers are able to deposit cash on a real time basis other than cash withdrawal facility. SMS and E-Mail Alert services are availablc for any debit/credit transaotion through onlinc and Internet Banking or using Bank's Debit / Credit Card as a deterrent against fraudulent transaction attempts. The Bank has established its Far DC (Data Center) at Jessore as it falls under different seismio zone as part of its business continuity plan (BCP) as well as for compliance of ICT Security Guideline ofBangladesh Bank. Data synchronization in near real time basis has been established through fiber optic cables from main DC to near DC (Disaster Recovery Site at Uttara) and again main DC to far DC at Jessore to ensure availability of data in any catastrophic situation. 38
40. Standards issued but not yet effective standards and amcndments to standards are issued but not yet effectivc for annual periods beginning after I January 2019 and earlier application is permitted . However, the Bank has not adopted early the following new or amended standards in preparing these financial statements. None of these are expected to have a significant effect on the consolidated financial statements ofthe Group and the separate financial statements ofthe Bank when they become applicable. A number of new i) Amendments to References to Conceptual Framework in IFRS Standards. ii) Definition of a Business (Amendmens to IFRS 3). iii) Definition of Material (Amendments to IAS I and IAS 8). iv) IFRS I 7 Insurance Confacts Insurance contracts are effectivc for annual periods beginning on or after I January 2021. Earlier adoption is permitted. This has not been aoolied in oreoaring these consolidated and seoarate financial statements. 3.21 Credit Rating of the Bank As per the BRPD circular No.6 darcd 5 July 2006, the bank has donc its oredit rating by Credit Rating lnformation and Services Limited (CRISL) based on the audircd financial staternents dated 31 December 2018. Date Particulerr of Ratins Surveillance Rating 3O-Jun-19 Long tcrm Short term AA sr-2 Double A (High quality and High Sefefv\ (High Grade) Outlook 3.22 Correspondence items Correspondence items arc maintained to have control over all items of importance and for such fiansactions whcre the Bank has only a business responsibility and no legal commitnent. Stock ofravelers cheques, savings certificates, wage eamers bond and others fall under the corrcspondence items. 3.23 Offsettins Financial assets and liabilities are offset aod the net amount presented in the balance sheet when, and only when, the Group and the Bank have a legal right to set offthe recognized amounts and it intends either to settle on a net basis or to realize the asset and settle the liabiliB simultaneously. Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and losscs arising from a group of similar transactions such as in the Group's tading activity. 3.24 Operating segments The Group and the Bank have no identified operating segmcnt and as such presentation ofscgmental reporting is not made in the Iinancial statements as per IFRS 8. However, gcographical and business segmcnts wise limited disclosures are fumished in Annexure-I. 3.25 Going concern basis of accounting These financial statements have bcen prepared on the asscssment ofthe Bank's ability to continue as a going concem. The Bank has nei0rer any intention nor any legal or regulatory compulsion to liquidate or curtail materially the scale of any of is operations. The key frnancial parameters (including liquidity, profitability, asset quality, provision sufficiency and capital adequacy) of the Bank continued to exhibit a healthy trend for couple ofyears. The managcment do not sce any issue with respect to going concem due to recent pandemic COVID-l9. Besides, the management is not aware of any material uncertainties that may cast significant doubt upon the Bank's ability to continue as a going concem. 3.26 Materiality and aggrcgation Each material item as considered by managunent significant has been presented separately in financial statemcnts. No amount has been set offunless the bank has a legal right to set offthe amounts and intends to settle on net basis. lncome and expenditures are presented on a net basis only when permitted by the relevant accounting standards. 40
41. 3 .27 Changcs in accounting estimetes Changes are reflected in the assumptions when they occur in accordance with LAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. During the year, IFRS 16 supersedes IAS 17 L,eases, Intemational Financial Reporting Interpretations Committee (IFRIC) 4 Dercrmining whether an Arrangement contains a L,ease, Standard Interpretation Committee (SIC) 15 Operating Leases-Incentives and SIC 27 Evaluating the Substance of Transactions Involving the tegal Form of a kase. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognize most leases on the balance sheet. The bank has adopted IFRS 16 as per para C5O) & C8 (b,ii) ofthe same standard. 3.28 Consistency In accordance with the IFRS framework for the presentation of financial statements together with LAS I and IAS 8, the bank applies the accounting disclosure principles consistently from one period to the next. In case of selecting and applying new accounting policies, changes in accounting policies applied and corection of enors, the amounts involved are accounted for and disclosed retrospectivelv in accordancc with the requirernent of IAS 8. 3.29 Approval of fi nancial statements The financial statements were approved by the board ofdirectors on 30 June 2020. 3.30 General Figurcs ofprcvious year have been rearranged, whenever ncocssary, to confomr the current year's prcsentation. 41
42. Note 2019 201E Teka Taka Notes to the Financia ! Stetements 4 Consolidated cash In hand (including foreigr currencies): Southeast Bank Limited 4.1 Southeast Exchange Company (South Africa) Pty Ltd Southeast Financial Services (Australia) Pty Ltd 3,664,640,436 239,694 3,598,790,655 23 6t-419 3,598,t52,097 Balance with Bangladesh Bank and its agent banks (including foreign currencies): Southeast Bank Limited 4.1 4.1 Cash In hand: Local currency Foreign currencies 3,605,548,057 3,664,640,436 Balance with Bangladesh Bank: Local currency Foreign currencies 18,229,852,932 Balance with Sonali Bank Limited (as agent of Bangladesh Bank): Local cunency Balance with Bangladesh Bank and its agent banks (including foreiga currencies) 4.2 3,506,484,120 s9-092-379 92-306-534 3,59E,790,655 t6,778,266,745 291-691-563 724-543-372 1E,521,544,494 17,502,E10,117 433,366,753 18,954,911,247 l7 22,619,551,683 21,515366,229 413,765,457 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with section 33 of the Bank Companies Act, l99l (Amended up to 2013), MPD Circular nos. 4 and 5 dated I December 2010 and MPD Circular no. I and 2 datod 23 June 2014 and l0 December 2013 respectively and DOS Circular no.l dated 19 January 2014 and MPD Circular No.l dated 03 April 2018 and DOS Circular no 26 dated 19 August 2019. The statutory Cash Reserve Ratio on the Bank's demand and time liabilities at the rate of minimum 5.0o/o on daily basis and 5.50% on bi-weekly basis for conventional and Islamic banking has been calculated and maintained with Bangladesh Bank in current account and l3Vo Statutory Liquidity Ratio for conventional banking and 5.50% Statutory Liquidity Ratio for Islamic banking on the same liabilities has also boen maintained in the form ofheasury bills, bonds and debentures including excess cash reserve balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below: 4.2.1 a) Cash Reserve Ratio (CRR) for Conventional Banking 5.50% of average Demand and Time Liabilities: 14,738,207,613 Required reserve (Average daily on bi-weekly basis) Actual reserve held ll Surplus b) Cash Reserve Ratio (CRR) for Islrmic Banking 5.50% of average Demand and Time Liabilities: Required reserve (Average daily on bi-weekly basis) 1,155,277,695 Actual reserve held 1.398.10t.826 242,824,131 Surplus 42 1,007
43. rs 4 .2.2 r) Note 20r8 Taka 2019 Taka Statutory Liquidity Ratio (SLR) for Conventional Banking of Required reserve (l3o/o averuge Demand and Time Liabilities) 39,017,074,590 Actual reserve held 34,835,763,449 l9 65 Surplus Held for Statutory Liquidity Ratio of Conventional Banking: Cash in hand Balance with agent bank (Sonali Bank Limited) as per statement Excess cash reserve 3,448,576,000 432,860,426 225,251,654 15,658,489,282 45,795,353,970 Govemment Securities (HFT) Government Securities (HTM) Other eligible securitieV Prize Bond b) 399,436,000 374,9tt,525 I 0,8 16,964,383 39,170,936,211 5.r38.300 54,215,962,419 Statutory Liquidity Ratio (SLR) for Islamic Banking Required reserve (5.50 o/o of average Demand and Time Liabilities) 1,155,277,695 Actual reserve held 302,0E9,436 1,007,891,950 1.176,260.271 168,36E,321 264,507,000 36,000 242,824,131 50,468,271 r.457.367.131 Surplus Held for Statutory Liquidity Ratio of Islamic Banking: Cash in hand Balance with agent bank (Sonali Bank Limited) as per statement Excess cash reserye Govemment Securities (HTM) 5 5,572,000 000 Consolidated balance with other banks and financial institutions In Bangladesh: 6 Southeast Bank Limited Southeast Bank Capital Serviccs Limited Less: Inter company balance eliminated Outside Bangladesh: Southeast Bank Limited 6 Southeast Financial Services (UK) Ltd Southeast Financial Services (Australia) Pty Ltd Southeast Exchange Company (South Africa) Pty Ltd 4,008,118,637 23,324,151 5,56E,594,836 3,984,794,4K 1,762,989, 223,145 2,272,907,523 ,714 1,903r702,99E 7,472297,E34 6 3,984,794,486 5,568,594,836 622,941,348 6,191,536,184 622,941,348 23.324.t51 15,447,609 161,284,420 2,449,639,553 6.434.434.039 Balance with other banks and financial institutions In Bangladesh 6.1 Outside Bangladesh 6.2 5,568,594,836 t.762.989.139 7,331,5E3,975 Also refer to note 6.3 for maturity wise grouping 43 3,984,'
44. Particulars 6 .1 Note 2019 201E Trka Takr In Bangladesh Current account with: Agrani Bank Limited Al Arafah Islami Bank Limited Bangladesh Iftishi Bank 30,576,275 79,276,813 5,700 5,001 310,818 19,444,775 13,577 BRAC Bank Limited BRAC Bank Limited (El Dorado Networg The City Bank Limited Commercial Bank of Ceylon PLC EXIM Bank Limited The Farmers Bank Limited Islami Bank Bangladesh Limited Jamuna Bank Limited Janata Bank Limited Meghna Bank Limited Mercantile Bank Limited Modumoti Bank Limited Mutual Trust Bank Limited National Bank Limited One Bank Limited Rupali Bank Limited Shahjalal Islami Bank Limited Sonali Bank Limited South Bangla Agriculture 7,576,275 54,359,540 33,431,985 1,012,476 5,1 l6 5,001 283,060 8,20s,526 t3,577 23,515,071 866,009 5,501 t5,767,t69 47,917,936 24,392,635 19,447,552 25,904,570 2,804,587 18,863,525 29,407,803 21,491,284 10,494,634 12,054,707 1,552,095 r6,880 59,408 45,192,739 I,186,410 25,000 7,011,700 550,000 550,000 2,096,010 (2,166,519) 3,203,623 25,384,311 25,137,481 294,164,716 356,246,634 30,690 30,690 l,149,058 26,799 505,379,t24 3,351,284 28.6t1.897 (9,3 t3,930) & Commerce Bank Limited Trust Bank Limited Union Bank Limited Unircd Commercial Bank Limited 9 3 Short term deposits account with: AB Bank Limited The City Bank Limited Eastern Bank Limited EXIM Bank Limited l, l4g,o5g 26,799 8,355,164 220,796,878 29,072,531 259,430,120 Standard Chartered Bank Sonali Bank Limited Fixed deposits with other banks: Jamuna Bank Limited Mutual Trust Bank Limited 184 538,547,852 1,000,000,000 500,000,000 200,000,000 National Credit and Commerce Bank Limited Social Islami Bank Limited Fixed deposits with financial institutions: Bay Leasing and Invesfinent Limited IDLC Finance Limited 1,000,000,000 500.000.000 2,700,000,000 500,000,000 1,465,000,000 990,000,000 500,000,000 500,000,000 100,000,000 250,000,000 Delta Brac Housing Finance Corporation Limited Bangladesh Industrial Finance Company Limited Investment Corporation of Bangladesh 100,000,000 500,000,000 2,315,000,000 500.000.000 2,590,000,000 5,!!!Jrg- -15 44 -!'984'12!&-
45. Perticulars 6 .2 Note 2019 2018 Taka Take Outside Bangladesh Cu{rent account Interest bearing: Standard Chartered Bank, New Yorlq USA Standard Chartered Bank, New York OBU 149,899,156 145,806,434 Citibank N.A, New York, USA Standard Chartered Bank, London, UK Mashreq Bank PSC, New Yorlq USA Wells Fargo Banh N.A., New York, USA Citibank AG, Frankfurt, Germany Standard Chartered Banlq Kolkat4 India AB Bank Ltd., Mumbai, India ICICI Bank Ltd., Mumbai, India JP Morgan Chase Bank N.A., New Yorlq USA Habib American Bank, New York, USA Mashreq Bank, Mumbai, India Mashreq Bank, Mumbai, India 80,736,585 44,143,750 449,276 70,709,236 92,584,903 3,474,431 31,348,847 11,796,933 921,027,569 6,113,182 32,653,875 5,539,844 39,045,170 4,144,044 3,694,384 29,860,364 62,206,141 79,567,794 50,403,858 27,900,081 17,194,896 t6,7tt,425 1,264,967 102,923,021 603,335 175,698,521 248,392,506 48,318,227 1.478.825 United Bank Limited Karachi, Pakistan Standard Chartered Bank, Colombo, Srilanka 49,992,604 127,388,420 535,578,787 30,091,175 l -485-413 1,764,75E,909 54,375,563 Banque Saudi Fransi, Riyadh 137,769,758 5,793,934 308,627,026 4,588,519 67,721,709 25,533,159 45,309,651 18,249,482 Non-interest bearing: Bank ofSydney Ltd, Sydney 344,t42,27r Standard Chartered Banh Mumbai (AEB), India 2,1 18,895 Bank of Tokyo, Mitsubishi, JPY Nepal Bangladesh Bank Ltd., Kathmandu, Nepal Bank of Bhutan, Pheuntsholing Bhutan Commerz Bank AG, Frankfurt, Germany EURO Commerz Bank AG, Frankfurt, Germany USD Zrmcher Kantonal Bank, Zurich, Switzerland HDFC Bank, Mumbai, India Abu Dhabi Commercial Bank. Mashreq Bank PSC, Dubai, UAE Habib Metropoliton Bank Ltd., Karachi, Pakistan 19,892,956 8,417,708 2,002,608 479,696,009 t,852,844 77,512,594 69,162,123 14.607.335 E41,961,570 --L222'991823Details of Balance with other banls-Outside Bangladesh shown in Annexure-C. 6.3 Maturity grouping of balance with other banks and financial institutions -)#22t9 2,316,583,975 4,715,000,000 300,000,000 On demand Not more than three months More than three months but not more than six months More than six months but not more than one year More than one ycar but less than fivc years Above five years 7 !€! 3,684,700,000 2,373,002,009 200,000,000 Z5- Money at call and on short notice -5'2fl-J!2J44,- -7 In bank: Midland Bank Limited One Bank Limited 50,000,000 300,000,000 National Credit and Commerce Bank Limited National Bank Limircd Citi Bank N. A Dhaka Bank Limited Uttara Bank Limited The ICB Islamic Bank Limircd The City Bank Limited 100,000,000 700,000,000 s00,000,000 I 1,300,000 45 300,000,000 1,000,000,000 I 1,300,000 850.000.000
46. Note 2019 2018 Taka Taka In non-banking financial institutions (public and private): Bay Leasing and Investrnent Limited Delta BRAC Housing Finance Corporation Limited Investrnent Corporation of Bangladesh 750,000,000 180,000,000 410,000,000 300,000,000 390,000,000 280,000,000 IDLC Finance Limited 390,000,000 IPDC Finance Limited 50.000.000 1,540,000,000 1,210,000,000 In foreign currency: AB Bank Limited r69,800,000 254,700,000 424,500,000 Al Arafah Islami Bank Limited BRAC Bank Limited Agrani Bank Limited Eastern Bank Limited Mutual Trust Bank Limited Midland Bank Limited Modhumoti Bank Limited NCC Bank Limited Pubali Bank Limited The City Bank Limited Jamuna Bank Limited 849,000,000 587,300,000 251,700,000 241,031,100 254,700,000 335,600,000 169,800,000 251,700,000 419,500,000 254,700,000 2,618,231,100 ___#!9,5IJ99_ 8 1,845,800,000 _-___fd2?,!g0Jg0_ Consolidated Investments Government securities: Southeast Bank Limited 9 62.409.764.654 50.963.038.896 62,409,764,654 50,963,03E,896 12,074,625,437 11,920,717,298 2.725.796.239 Others: Southeast Bank Limited 9 Southeast Bank Capital Services Limited 9 2.825.652.479 14,9U0,277,916 14,646,513,517 77310,042,570 65.609.552.433 61,459,764,654 950.000.000 49,993,038,896 970.000.000 62,409,764,654 50,963,038,896 Investments Government securities: Conventional Banking Islamic Banking 9.1.1 9.2.t Others: Conventional Banking Islamic Banking 9.1.2 10,339,853,093 9.2.2 t,734,772,344 8,67 12,074,625,437 11,920,717,298 _02Jgu5g,!21_ 74.4E4390.091 Also refer to notes 9.3 to 9.8 for further analysis, maturity wise grouping, market value information, sector wise investment, €tc. 46
47. Perticulers 9 .1 9.1.1 Note 2019 20lE Trkn Takr Conventional Banking GovcrnmentSccurities Treasury Bills 9l days Treasury Bills HTM 364 days Treasury Bills IITM 9l days Treasury Bills IIFT 182 days Trcasury Bills HFT 364 days Treasury Bills HFT t,883,582,793 2,334,936,4s0 5,893,904,000 Add: Reverse repo with other banks (at book Value) [rss: Assurcd Repo with Bangladesh Bank/ Others (at book value) 48r,750,000 1,002,951,720 13,555,450,056 Prize Bonds Bangladesh Bank Bills 5,921,400 1,971,377,720 s,138,300 Government Bonds 2 Years BGTB HTM 5 Years BGTB HTM l0 Years BGTB HTM 15 Years BGTB HTM 20 Years BGTB HTM Rerneasured l0 years BGTB $s,6223s0 8,720,t63,602 t4,729,336,t47 7,485,640,t8s 7,269,670,9t6 9,321,865,80E 15,s33,082,040 8,341,430,864 8,712,742,194 HTM l0 966,125,363 3,000,489,000 472,231,200 5M,068,373 2,t29,280,900 968,690,1 2 Years BGTB HFT 5 Ycars BGTB HFT l0 Years BGTB IIFT l5 Years BGTB IIFT 20 Years BGTB IIFT 2,892,653,054 3,088,755,189 $,2A,704 I(M O57 18,453,195 51.5 47509,522,15E 388,871,040 Add: Reverse repo with other banks (at book value) lrss: Assurcd Repo with Bangladesh Bank/ Others (at book value) 698,469,480 47198,393,198 4E,016322,876 64@,- 9.1.2 -StLAl9rI Others Shares in listed companies -- Shares in un-listed companies -!2.2s1q$E2g1,648,793,522 77,069,912 610,169,912 6-950-000-000 Bonds 9.2 Islamic banking 9.2.1 Govcrnment sccurities -&gZ5,t6:!dfl 950-000.000 Bangladesh Govemment Islamic bond 950.000.000 9.2.2 Others t-734-772-344 Shares in listed companies 9.3 r.734J72344 3r44853.t63 Investments clsssilied as per Bangledcsh Benk Circular 15,664,410,682 Held for trading (HFT) Held to maturity (HTM) 46,745,353,972 12.074.625.437 Other securities _1!,!p!a2j@L -: 47 10,816,964,383 40,146,074,513 ll-920-7t7-298
48. Note 9 .4 2019 20lE Tekr Taka Meturity-wisc grouping of investments On demand 5,921,400 7,030,500,000 Not more than threc months More than three months but not morc than one year More than one year but not more than five years Above five years 18,230,498,779 20,s49,900,000 28.667-569-912 5,138,300 1,607,800,000 8,230,800,000 30,097,800,000 22942217_894 _z1dg1g9@L _g&gEJsg,!A9.5 Cost and morket value of invcstments 9.5.1 Government securitics 2019 2018 Market price Conventional Banking Toka Treasury Bills Bangladesh Government Treasury Bond Prize Bonds t3,372,027,t10 13,555,450,056 48,344,297,468 47,898,393,198 Trkr 1,971,577,720 48,0t6,322,876 5-921-400 5-138-300 61459,764,654 49,993,038,896 Cost price Cost price Taka Taka Islamic Banking Bangladesh Government Islamic Bond 9.5.2 Others (Investment in Shares) 201t Taka Convcntional Benking Shares in listed companies Shares in unJisrcd companies Islamic Banking Sharcs in listed companies -2!2'?5!l9S- Sheres in listcd comnenics Investments have been recorded at cost and adequate provision has been maintained for probable futurc losses as per Bangladesh Bank guidelines. Market value ofshares has been determined on thc basis ofthe value ofshares at the last trading day ofthe year. Details are shown in Anncxure-D. 9.6 Sector wise investment ofshares 2019 Mrrket price Cost price Shares in listed comoanies (A) 2018 Cost oricc Taka Banks and NBFI Insurance Companies Fuel and Power Companies 684,269,847 s2,685,251 168,406,514 300,547,969 2.806.368-420 4,012,278,001 Mutual Fund Manufacturing & Other 48 l,5ll 76,805,098 286,553,627 293,475,095 86t,676,102 381,160,963 293,475,095
49. Partlculars 20It 2019 Note Taka Shares in unJisted comoanies (B) Banks and NBFI Others Net bookvdue Cost Dnce 2018 Cost nrice Taka Teke Takr 54,183,820 54,183,820 555.986.092 610,169,912 5324,625,437 Total invcstment of shares (C=A+B) s4,183,820 22.886-092 77,069,912 4,970,717,299 - Thc investnents in shares ofunlisted companics are shown at cost or net book value ofthe last audited balancc sheet, whichever is lower. 9.7 Market price and cost pricc of investmcnts in ordinary sharcs rs on 31 Dec 2019 -: sL. I 2 3 4 Merket Taka ACIFormulat on Limited ACME Laboratories Limited ADNTELEC( AFC Acro Biotech Limited Taka 10.738-662 177.681,840 17,161.s80 5 6 7 8 9 It ll I AMANFeed Limited Apex Food Ltd Areon Denim Asia Insurance Ltd Baneladesh Bu ding Systems Ltd Barka Power ltc s3.299.214 4-140.000 188.654.832 3.234.000 .561.347 27.944-442 3.001.152 43-612.432 Cables Lt< I t6 BD COMltd t7 l8 BSRM 5 11.476.051 5: i.685.251 14.558.848 I t.469-250 l3 t4 BAY kasinc and Investnent Limitod l5 BBS I Re-Rolline Mills Limited Steel Mills Limircd l9 COPPERTECHLTD 2t Delta Life Insurance Ltd 22 Doreen Power Ltd 20 23 Draeon Sweater s-353.s9r .788.96s 222.000 732.687 .585.570 2s.s47.969 & Soinnine Ltd EXIMBankLt( 26 E)flMBank lstMuhralFund 25 Golden Harvest Agro industies Ltd (4.155-545) l 1.199.877) 76.805.098 (24.119-847\ 30.991.307 13.090.872 80.616.388 t6.432.4s9\ 0.621.622\ 27.3t7.174\ tt-647-591 (7-507-591) 6s3.582.763 5.515-678 0.281-678\ 23.932.942 65.049.432 7.019.678 (37.104.991\ (4.018.526) 64.878-145 (2t.265.713\ 12-382.964 23.687.937 455.78( 1.165.050 22-470-307 792.884 39.630.146 158-017 .l 14.718 2l 40.320.000 9.415.520 4-203.763 37 38 I 4t NEWLINE Clothinc Limit€d 49 0.837.262\ 02.490,5791 48.063.646 97-436.822 14.044.434 5.791.363 06.770.641 t2 57.116.822\ fl.587.600) l6 (55.268) 1.437.994,884 40.023 43 08.457.57r) 27.605.297 95.1 2.t74.341.283 OimexElectode Limited (432.363\ 2t.0t6,635 Mills Limited Insurance (8.898.971) 452.4r1 t.ttz Kattali Textile Limited 34 Khulna Power ( lomoanv Limited 35 lafarse Holcim Bangladesh Limircd 36 42 o.3s2.317' 22.675.929 17.534-550 lins Station Limircd Hossain (r9.784.747\ '99-Btt-297\ 9.581.913 15.789.619 32 33 39 40 36.946.327 145.3s9.t92 t7.633.33t 370.656.919 43.475.095 3.406 34.247.190 t 3l (6.153.6621 162.9s2.332 569.040 47.410 24 27 28 29 Diflerenccs (Provision to be reouired) Taka 2019 Name of the Company no. 140,019 153-621 t2 .375.000 19.767.327 23,349 (7,392,321 s
50. Particularc 44 45 46 47 48 49 50 5l 52 54 55 56 57 58 Note )rion Pharma Ltd Padma Oil Company Limited Paramount Textile Limircd Premier Cement Ltd Prime Bank Limihd 20r8 Taka 09.568.496 (2911 241\ i8-97s 32,384,399 9.556.184 671.1 l0 I 24.105.663 (.33.287.878\ 3ts.9l4-726 fi43.454.564 Runner automobiles Ltd Saif Power Tec Limited 25.681.082 450,195 376.018 A9-531-642\ (90.255 S.Alam Cold Rolled Srcels Ltd 16.687.000 RSRM STEEL Limited Sumit Alliance Port Ltd Sea Pearl Beach Resort & Spa limited Southeast Bank lst Mutual Fund Shahiibazar Power Company Ltd (15.282.454 (601-469 3l 392.078 Limited Silco Pharmactical Ltd SS Steel Ltd 60 SummitPower Ltd 62 2019 Teke Shasha Denim Titas Gas Transmission & Disfibution Comoanv Ltd Wata Chemical Ltd t6t,75t 124.451 275.000.000 4s,360,000 446.556 243,076 25.000.000 136.784.854\ I (671.395) 170.146 7.589 4.s23 3.813.31s 4.635.000 (808.91 7) 7 (3.03s.726\ fi_921.203\ Actual provision Surplus(deficit) 9.8 Transactions ofRcpo and Rcverse-repo during thc year Minimum outstandigg Maximum outstandinq Taka Deily average outstanding Taka 2019 Securitics sold under rcpo With Bangladesh Bank With othcr Banks & FIs 444229,650 1,495,833,500 Securitics purchased undcr rcverce repo With Bangladesh Bank With other Banks & FIs 149J47,2t0 3,295,576,303 545185,635 Securitics sold under rcpo With Bangladesh Bank With other Banls & FIs 156,713,657 1,535,260,0E0 47,674,919 Securities purchased under revcrse repo With Bangladcsh Bank With other Banla & FIs 157J43,152 1,217$50,720 79343,498 i) ii) i) ii) 42820,865 20rt i) ii) i) ii) 50
51. Particulars 10 Note 2019 2018 Taka Tekr Consolidated loans and advances /investments Loans, cash credit, overdrafu etc./investnents: Southeast Bank Limited Southeast Bank Capital Servicps Limit€d kss: lnter II company balance eliminated 278J57,951276 Bills purchased and discounted: Southeast Bank Limited ll t1 - r-z-jjsprr,e 17,995,011,999 12270,96t,683 296,752,963,275 267,671,627,E05 -'p7fFld.rr Lorns and advances/investments Loans, cash credit, overdraffs etc./invesftieots Bills purchased and discounted I I t.t 277,020,10t,32t t.t4 252,933,24t,876 17.995.011.999 29s.01s.113.320 11.1 255.400.659,122 12.270-968_683 26s204210.S59 Loans, cash credit, overdrafts etc./Investments In Bangladesh: Conventional Banking 7,446,663,360 27,005,835,559 99,358,892,070 99s,463,927 1,163,473,709 7,552,334,097 25,540,530,841 122,264,512,516 Demand loan Time loan Tenn loan Agricultural credit-Term Agricultural credit-Time Agricultural credit-OD 1,378,470,597 2,137,269,292 212.368,194 2,499,669 Consumer credit scheme Car loan Personal loan Home loan Rural Home [oan Loan against - LTFF 189,825,090 2.988,823 128,683,786 478,889,995 1,256,450,806 170,362,632 174,436,799 128,130,055 429,677,902 1,759,308,096 166,236,275 266,398,553 10,864,31s 67,897,772 Loan against GTF Cash credit and overdrafls Bills Against lrtter of Credit @LC) Loan re-finance housing sector Loan against Trust Receipt (LTR) Advances-packing credit @C) l,oan against foreign bills House building loan-staff s9,487,080,2s7 225,239,563 58,603,918,907 120,286,863 15,557,895 13,599,386 13,402,596,278 16,566,1t1,770 3,2t0,961,945 120,081,946 365,431,298 45,859 2,639,826,146 t26,345,398 375,s27,605 9,766 Digital device Export Development Fund (EDF) Loan against cash incentive loan-oredit card 18,199,188,944 19,057,302,226 30,545,174 132,t17,051 1.889.094-91I 237,605528,260 Islamic Banking Demand investment 888,481,948 Bai-Muajjal (Time) investnent Bai-Muajjal Time undcr CCS Bai-Murabaha-BlC 392,827,368 82,921,3s2 22,294 528,987,815 195,402,971 79,622,265 1,193,826,782 149,t33,314 16,635,522 773,063,701 1,057,138,547 Bai-Murabaha-LTR Bai-Salam (advances-packing credit) Staff house building investnent Export Development Fund @DF) Invesfinent against cash incentivc Bai-Muajj al-investnent Murabaha-investnent Hire purchase-investnrent 82,261,921 13,548,440 674,t78,978 17,131,016 3,833,616,144 3,371,439,522 110.999,291 t0-924-512.794 6t7,028,554 17598,332,455 0utside Bangladesh 5'r -- 7.923.165.532 15,327,613fi16 277,A20,101,321 2s2,933,241fi76 277.020.101.321 252.933241,876
52. Note tt .2 20lE Taka Taka Per{orming loens and advenccs/invcstmcnh Gross loans and advances/investnents Non-performing loans and advances/investnents 11.3 2019 295,0ts,tt3,320 04.375.2y2.023\ 265,204,210,559 05.s58.851.040) 280.639$21.297 249.6453s9.sr9 Maturity-wise grouping of loens and advances/investmcnts On demand 42,270,540,000 Less than three months 75,701,460,000 42,398,300,000 More than three months but less than one year 79,967,800,000 93,389,800,000 57,748,700,000 55,815,500,000 -- More than one year but less than five years More than five years 35,920,100,000 39,326,613,320 37,680,sr0,5s9 13J20 ll.4 265,204,210,559 Concentrationofloensandadvances/investmcnts Advances to allied concenu ofdirectors Advances to chiefexecutive and other senior executives 153,220,739 Advances to customersr group: Advances to large and medium industies Advances to small and cottage industries Commercial loans Consumer Credit Off-shore Banking Loans 202,681,057,418 t4,362,857,301 180,151,419,488 t2,993,557,061 43,670,568,760 4,052,000,000 42,230,548,t18 4,726,846,322 Other loans and advances 18,539,053,971 n,744,269,214 12.32t-529.45t 12.470.702.676 _-22fl8,tt3pzq_ Details of large loan/invcstments 121,693,360 26s204210,5s9 As at 3l Deccmber 2019 there were 33 (2018:34) clients with whom amount ofoutstanding loans and advances excceded l0% ofthe total capital of the Bank. Total capital of the Bank was Tk 35,993.86 million as at 3l December 2019 CIk. 38,755.80 million as at 3l December 2018). The Bank complies with the requirements of thc section 26 (b) of the Bank Companies the general limitations of credit line. Act l99l as arnended in 2018 in connection with Details are shown in Annexure-D. 11.5 Scctor-wise allocation ofloans and advsnces 2019 o/o 2018 o/o of total Taka Commercial Loans Consumer Credit Others: a) Off-shore Banking L,oans b) Finance to NBFIs c) loans to Capital Mfiket d) Miscellaneous tot l Taka loen loan Agriculture Industrial (Manufacturing) Industrial (Services) Export Financing of t.37% 8.41o/o 4,033,802,812 149,337,701,819 42,881,572,826 24,824,640,074 l4.3lo/o 42,230,548,1t8 16.470/o 1.600/o 4,726,846,322 1.53o/o 50.620/o 14.540/o 18,539,053,971 6.280/o 0.460/o 0.58% 1.82o/o r0-656ie- 52 1,355,234,4s3 1,715,987,471 5,369,725,453 295,015,113p20 47.980/o 2,630,200,000 127,250,7t4,579 16.260/o 43,r28,r00,528 8.680/o 23,019,757,073 43,670,568,760 4,052,000,000 0.990/o 4A3% 0.600/o 0.54o/o 2.52% 100.00% 11,744,269,2t4 1,582,459,039 1,436,350,764
53. Note rl .6 2019 2018 Taka Taka Industra-wise loans end advrnces (Industriel Loan) Ready Made Garment indusbies Loan @MG) Real Estate industies 61,487,892,563 19,75t,975,037 Texile industries Agro-Based Indusfics 16,61s,783,585 15,545,1 15,456 Ccment & Ceramics industries Ship Breaking & Ship Building indushies Pharmaceuticals industries Other Industries 50,850,227,088 20,733,831,268 15,234.847.108 13,015,700,000 6,474,774,052 5,693,618,007 1,755,866,65t 6,316,200,000 4,934,201,824 1,870,500,000 89.718.889.369 ,736 217,043,914,719 ll.7 Cetegora-wise Small Medium Enterprisc loans and advances (SME) Service sector 20,289,091,212 27,28s,989,052 Trading sector lndustrial scctor r8,175,639,030 25,165,945,179 30.428.060.601 : ll.E 73J69544,810 Geographicel location-wisc allocations ofloans and advances 2019 o/o of o/o total ol total Takr loen Taka loan Urban: Dhaka region Chittagong rcgion Rajshahi region Sylhet region 76.75o/o Khulna region Rangpur region Barisal region Mymensingh region 0.51o/o 226,421,370,679 41,121,892,238 5,39s,407,509 3,576,063,473 13.94% t.83% t.2t% 1,499,150,540 197,182,734,t67 74.350/o 42,2t6,725,24s 15.92o/o 1.89% 5,014,000,055 1.220/o 3,238,7t3,660 0.550/o t,470,516,829 0.28o/o 828,896,439 0.32o/o 836,234,155 0.08% 240,4U,709 399,5t3,382 0.08o/o 220,365,353 386,439,156 0.140/o 94.74Vo 0.15o/o 250,565,72E,620 94.4Eo/o Rural: Dhaka region 3.270/o 9,ill-,368,796 2.94% 7,792,380,927 Chittagong region Rajshahi region .Sylhet region Khulna region 1.560/o 4,s97,897,002 1.80o/o 4,769,399,t31 0.02o/o 61,396,883 0.16% 0.t7% 504,462,078 0.37o/o 727,29t,592 0.25o/o 15,532,416J51 295,015,113J20 5.260/o 100.00% 11.9 425,224,948 969,841,873 681,635,060 0.26% 5.52o/o 14,638,481,939 100.00o/o 265204210,559 Classification oflosns and advanccs 2019 o/o 201E o/o of total ol total Teke loan loan Unclassilicd: Standard including staff loan Special Mention Account (SMA) 92.28%) 2.85o/o 272,243,244,240 8.396.577.057 90.530/o 3.610/o 94.l3Vo 95.13o/o 240,083,546,744 9.561.812-775 249,645,359,519 Classified: Sub-standard 0.13o/o 375,565,881 0.060/o 17t,210,454 Doubtful 0.090/o 270,814,840 0.14o/o 359,@t,627 Bad/loss 4.65% 13.728.911,301 5.670/o 15.027.998.9s9 4.87o/o 14375.292,023 5.t7o/o 1s.ss8.851.040 100.009/0 53 --- 295.015.113320 100.00%
54. Particulars 11 .10 Note 2019 201E Taka Taka Particulars ofloans and advances i) ii) iiD w) v) Debts considered good in respect of which the bank is fully secured; 241,985581,080 22738E,609,049 Debts considered good for which the bank holds no other security than the debtors' personal security; 10,912,630,334 14,096,135J95 Debts considered good secured by the personal liabilities ofone or more parties in addition to the pcrsonal security ofthe debtors; 42,116,901,906 23,709,761,A59 Debts adversely classified; provision not maintained Debts due by directors or officers ofthe bank or any ofthem either severally orjointly with any other persons; vi) Debts due by companies or firms in which the directors or officers ofthc bank are interested as directors, partners or managing agents or, in case of private oompanies, as membersl vii) Maximum total amount of advances, including temporary advances made any time during the year to directors or managers or oflicers ofthe bank or any ofthem either severally orjointly with any other persons; viii) Maximum total amount of advances, including temporary advances granted during the year to companies or firms in which the directors ofthe bank are interested as directors, partncrs or managing agents or, in case of private companies, as members; ix) Duc from banking companies; x) Classified loans/invesfinents for which interest has not been charged: (a) Increase(decrease) of provision (specific) Amount of debts written off Amount realized against thc debts previously written off 387,E34168 375,355,363 387,834J68 375J55,363 E281,727,000 33332,9,444 10r10,926 917,012200 2,044946,4tE 404,812,584 (b) Provision against the debt classified as bad/loss at the date ofbalance sheet (c) Amount ofinterest charged in suspense xi) account 6562,579,457 7,024,062,597 9294,042,050 5,995,927271 l,oans written off: - 12,230,294841 2,53E,512,754 12,216,835,740 12,230,294,841 12,216,835,740 13,459,101 Currentyear Cumulative to-date The amount of written offloans for which lawsuit filed 54
55. ll .ll Partlcuhrc of requircd pruvision for loans end rdyanccs/investments Strt* 20t8 ffiffi pruvlslon Trkr 2019 Trka rs at 31 Dec rcqulrcd provision Required orovislon provlslotr Takr Trka For lorns end edvrnccs/ Itrycatments: Unclessilied-General Pruvlslon All unclassified loans (other than small enterprises, housing finance, lran to MBs loans for professional, consumer financing and special mention account) 172,510,444,404 Small and medium enterprise 172,510,444,404 lo/t l,72S,1O4,US 1,597,951,010 m,627,@934 O.25o/o 226,569,026 1s8,161,088 2'/o 34,319,749 2E,727,015 90,627,@,934 financing 1,713,987,471 1,715,9E7,471 Housing and loan for professional 2,057,233,078 2,057,233,078 lo/o-2o/o 21,420,O59 15,971,4M Consumer finance 2,571,70Ep$t 2,571,70E,353 2o/o4/c 67,751,293 67,997,3E6 Agriculture finance 2,373,141,024 237t,141,024 l'/c-SVo 21,731,410 12,628,962 387,119,y15 387,119,y15 lo/o 3,E7r,200 3,74E,293 7,042,515,213 0.23o/o-5o/o Loan to BIIS/MBYSDS egainst shares Staffloan Special Mention Account (SMA) 8,396,577,037 71.151-7,)? 2,173,v24,885 2,082,366,729 Clessified-Speclfi c Provision: Sub-standard 37$s61EEr Doubtful 270,E14,E40 Badfloss ' 13.728,911,301 295,015.113.320 285,376,05E56t Required provision for loans and advances (A) Total provision maintained (B) Excess provision as at 3l I I 1,800,442 115,889,209 6.862.579.457 $o/oAoYo 18,451,143 5o/o-50o/o 57,920,285 l00o/o 6.A62.379.457 6.938,960,885 7,157,117,820 9,112,'jc,5,769 9,239,4'i/,,349 lE 773,251000 q_660_369-21r December (C=B-A) 55 20,020,06 113,035,177 n an6, ao1 ,, 13,2E3,300,0O1 4-o43-8t5.452
56. Particulars ll .l2 2019 Note Teke 20r8 Taka Listing of assets plcdgcd ac security/collaterals Nature ofthe securrd assets Shares & Securities Merchandise Machinery with other fixed asset and financial obligation Real estate with financial obligation Financial obligation only (Insurance policies, savings certificates,bank deposit etQ 1,689,122,454 1,628,543,392 857,232,999 3,121,194,707 4,167,920,949 6,294,508,398 238,673,761,651 207,857,846,545 7,145,293,503 8,110,762,157 Miscellaneous- i) Crops/stock of crops hypothecation ii) Guarantee of individualVinstitutions ii) Others 250,625,273 974,760,191 34,355,140,556 27,346,728,778 7,876,0r6.035 295,015,113,320 ll.l3 Bills purchased and discounted Conventional Banking In Bangladesh 3,585,216,294 14.048.336.097 Outside Bangladesh 3,591,727,500 8.322.t47-295 11,633,552,391 ll,9l3,t74,7gi lslamic Banking In Bangladesh 337,062,325 357,093,888 Outside Bangladesh 357,093,888 I l.l4 _J2A!!25!@_ Maturity grouping of bills discountcd end purchased Within one month 6,096,700,000 8,849,911,999 3,048,400,000 More than one month but less than three months More than three months but less than six months More than six months 11.15 Information about restructured loln as per Bangladesh Benkrs BRPD Circutar 5,422,081,397 3,3 r 8,600,047 3,060,593,182 no. 4 dsted 29 January 2015. Loans amounting to Tk. 3,103.80 million (outstanding Tk.2,590.40 million as on 3l December 2019) of Keya Group, Gulshan Branch, Dhaka have been rcstructured by extension of validity of Term Loan for l2-years & conversion of demand loan into 06-years Term Loan including one year moratorium under the purview ofBRPD Circular # 04 dated29 January 2015. The status of the loans is unclassified and reported as SMA as per Bangladesh Bank's guidelines. Accordingly, 2% provision has been made. 12 Consolidated fixed assets including premises, furniture and fixtures Cost: Southeast Bank l3 Limited Limited Southeast Financial Services (UK) Ltd Southeast Bank Capital Services Southeast Financial Services (Australia) Pty 11,448,421,132 8t6,073,827 Ltd Southeast Exchange Company (South Africa) Pty Ltd r5.3r6.260 12,279,811,219 Less: Accumulated depreciation Southeast Bank Limited Southeast Bank Capital Services Limited Southeast Financial Services (IJK) Ltd Southeast Financial Services (Australia) Pty Ltd Southeast Exchange Company (South Africa) Pty Ltd l3 2,693,465,734 246,002,900 11,176,783,549 742,249,436 9,604,648 2,520,519 8.484.453 11,939,642,605 2,394,4t9,803 192,997,136 8,r93,109 1,919,000 6.684,570 2,946,153,204 Written down value at the end of the year __2,333,6s&9!!_ 56 4,8t8,396
57. Particulens Note There were no capitalized borrowing cost related to the acquisition offixed assets 2019 2018 Tekr Taka during the year (20I8: nil). Details ofconsolidated amounts have not been provided as such amounts are insignificantly different from those ofthe Banks. 13 Fixed essets including prcmises, fumiturc and fixtures Cost: Land Buildings Fumiture and fixtures 5,797,426,007 1,989,886,963 1,421,217,386 15,557,289 309,141,176 1,438,573,917 324,137,305 152.481.189 Offrce appliances Computer Electrical appliances ATM Booth Motor vehicles 11,448,421,132 5,797,250,693 t,989,262,277 1,33 t,9l 1,302 15,282,870 2t2,0t6,322 1,387,170,289 252,882,264 t3t-007-532 11,176,783,549 Less: Accumuleted deprecietion Buildings Furniture and fixtures Oflice appliances 585,392,846 712,788,895 10,989,673 Computer 161,083,t26 Elechical appliances ATM Booth Motor vehicles 955,186,841 166,056,528 tot-967-825 2,693,465,734 E.754,955.398 Written down value at the end of the year 526,877,198 640,658,640 10,185,235 128,482,224 857,053,965 130,074,144 101.088.397 2,394,419,803 8,782,363,746 Details are shown in Annexure-E. 14 Consolideted othcr rssets l5 Southeast Bank Limited Southeast Bank Capital Services Limited 9,485,465,483 126,836,034 (UK) Ltd Southeast Financial Services (Austalia) Pty Ltd Southeast Exchange Company (South Africa) Pty I I1,001,319 1,842,676 718,855 Southeast Financial Services Ltd 4.267.272 I llt at Less: Investment in subsidiaty: In Bangladesh 5,489,930,000 5,489,930,000 Outside Bangladesh 55-100.021 Intercompany balance 5,555,030,021 4,244,208 4.0u.430.822 57 4,110,241,172
58. Prrticulers 15 l5 .l Notc Othcrrsscb 2019 20lt Trlo Trka gf,frrz.fff,frFl 9.554.422.290 15.3 5,489,930,000 5,489,930,000 15.4 42,207,967 65, I 00,02 r Clrssificttionofothcrrsscts i) ii) Investment in shares of subsidiary companies: - In Bangladesh - Outside Bangladesh Stationery, stamps, printing matErials, etc. iii) Advance rent and advertisement 50,t76,317 42,239,443 294,913,787 343,744,4t3 1,563,924,636 1,585,574,838 iv) Interest accrued on investment but not coltected, commission and brokeragc receivable on shares and debentures, and other income receivables v) Security deposits vi) Preliminary, formation and organizational 4,923,619 renovation, development and prepaid expcnses 951,725,582 40,r40,155 vii) Suspense account viii Right to use (ROU) assets ix) Others 1,185,521,300 49,53r,540 207,595,018 9,485,465,483 15.2 4,622,119 expenses, 9.554.422.290 Non-incomc gcncrrting othcr rsscb i) Stationery, stamps, printing materials, etc. ii) Advance rent and advertisement iii) Suspense account 50,176,317 42,239,U1 294,9t3,787 343,744,413 40,140,155 49,531,540 iv) Preliminary, formation and organizational expenses, renovation, development and prepaid expenses r5.3 953-725.s82 1.338.955,t41 Invcstmcnt in shercs ofcubsidiery comprny In Benghdcsh Cost sI89,930,000 5,489,930,000 5-489-930-000 S.1t9.930-000 Provision for impairment loss 15.4 Invcstmcnt in sharcs ofsubsidirry compenics Ouhidc Benghdesh Cost Provision for impairment loss 82,704,302 G0496.3361 42,207,967 15.5 l 13,660,069 (48-560.048) 65,100,02I Prrticulers ofrcquired provisiotr for other rsscts Brsc for orovision Rrtc (%) Trkr 2019 kgal lrgal expenses for defaulting borrowings 21,555,745 Str/o t0,777,873 cxpcnses for defrulting borrowings 97,954,681 10ff/o 97,954,68t t05,957,797 l00o/o 105,957,797 5.987-140 r00% Others Protested bills 5.987,140 220,677,490 228,796,914 Required provision on other assets Total provision maintained Excess provision 8.1t9.424 Becc for orovision Rrtc (%) Trke 2018 6,216,8t9 Legal expenses for defaulting borrowings t2,433,639 50o/o lrgal 63,542,575 t00% 63,542,575 100% 100% 145,000,000 expenses for defaulting bonowings 145,000,000 Others 3.581-157 Protested bills 3,581,157 Required provision on other assets 218,340,551 Total provision maintaincd Excess provision 233,735,000 58 fit o,
59. Prrticulers 16 2019 Notc 2018 Trkr Consolidatcd borrowings from othcr banks , Iinancirl institutions end rgents Subordinrtcd bond: Southeast Bank Limited I7 Othcr borrowings: Southeast Bank Limited t7 13,70t,399,879 Southeast Bank Capital Services Limited 13,701,399,879 t12t ,700,343 Less: Inter company balance eliminated 13.701.399.E79 11,211,700.343 23.00t-300-n?o n.ott.1m3,3 t7 Borrowings from othcr banks, finencirl institutions end egcnts 17.2.ii 17.2.i +17.3 Subordinated Bond Other bonowings t7.t 10,200,000,000 ll ll 157, I l6 Borrowing from othcr benks, finrncial institutions rnd agcnts 17.2 17.3 In Baneladesh Outside Bangladesh 17.2 In Banglrdesh i, Securcd: Refinance against agro-based credit from Bangladesh Bank Refinance for housing sector from Bangladesh Bank Refinance against SME loan from Bangladesh Bank Refinance against Solar enerry, Bio Gas & ETP Scheme from Bangladesh Bank Refinance against RPGCL Borrowing from Pubali Bank Limited 60,380,t22 I 19,993,843 5,355,r l9 62,084,981 97,098,757 3,888,884 5,555,552 22,387 424,500,000 9,382,652 280,764,456 Bonowing from IDCOL I Bangladesh Bank Islamic Bond 460,241,516 ii. Unsecurcd: Subordinetcd Bond Rupali Bank Limited Sonali Bank Limited Agrani Bank Limited Pubali Bank Limited Mercantile Bank Limited Saudi-Bangladesh Industrial and Agricultural Investnent Company Ltd. Sadharan Bima Corporation UttaraBank Limited Dhaka Bank Limited National Life Insurance Limited Janata Bank Limitcd Delta Life Insurance Co. Limited 1,350,000,000 1,850,000,000 2,060,000,000 1,070,000,000 100,000,000 80,000,000 I 80,000,000 160,000,000 600,000,000 1,100,000,000 1,400,000,000 2,200,000,000 2,250,000,000 1,330,000,000 150,000,000 120,000,000 200,000,000 200,000,000 750,000,000 1,2s0,000,000 1,500,000,000 Totet (iii=i+ii) 17,3 Ouhidc Banglrdcsh Sccured: Bonowing from Commercial Bank of Qatar (CBQ) Borrowing from RAK BANK, UAE Bonowing FM SCB SINGAPORE Borrowing FM EIB, UAE Borrowing from ADCB,UAE Borrowing from DBS Bank Ltd Bonowing from NoorUAE Bonowing from FGB, UAE Bonowing FM NMB Bank, NePal Borrowing from HDFC BANK, Hong Kong 849,000,000 r,384,350,000 2,29,850,000 2,097,500,000 1,342,400,000 721,650,000 679,200,000 1,146,150,000 577,320,000 551,850,000 849,000,000 59 1,258,500,000 419,500,000
60. Particulers 20lE Teka 2019 Note Teke Unsccurcd : Borrowing from Global Climate Partnership Fund S.A. 1,698,000,000 1,678,000,000 BonowingfromADB 17.4 839.000.000 2,517,000,000 :: Maturity grouping of borrowings Repayable on demand Repayable within one month Over one month but within six months Over six months but within one year Over one year 12.081.270.000 10.697.2s0.000 424,800,000 9,259,600,000 2,795,600,000 1,266,890,000 7,613,624,456 2,019,500,000 tt.42l-399-879 22,957,L91$r6 23,901,399,879 l8 Consolidrted dcposits end other rcco[trts Currcnt/Al-wadccrh currcnt accounts and other eccountg Southeast Bank Limited Southeast Bank Capital Services Limited 622,941,348 Less: Inter company balance eliminated 48,260,613,039 23,324,151 40,472,065,762 Bills peyrblc Southeast Bank Limited Southeast Bank Capital Services Limited Sevings benldMuderebe sevinss bank dcpositr Southeast Bank Limited Southeast Bank Capital Services Limited 27 Fixed dcposits/llludrreba lircd deposits Southeast Bank Limited Southeast Bank Capital Services Limited ,794,s81 19 Dcposih and othcr rccounts CurrcnUAl-wedecah currcnt lccounts end othcr tccounts CunenVAl-wadecah cunent deposits Foreign currency deposis 2,222,988,779 1,34t,263,887 19.1 Sundry deposits Bills pavable 4,091 Payment order issued Demand draft I Sevings benk/llludrrrbe savings benk dcposits 30.416.845.98s Fixed dcposits/Mudarrbr fixcd deposits Fixed deposits/Iv{udaraba fixed deposits Special notice/Mudaraba special notice deposits 34,37729s,821 19,254,588,903 Scheme deposits Interest payable on FDR/Scheme t9.r @.'z'zo;lni 29,844,075,615 17,365,549,746 9 Sundrr dcposits 2,690,660,855 under letter of credit against IBP ageinst FBP under letter ofguarantee against time loan to issue pay order Deposit held against FDBP/IDBP, export bills etc' FC held against EDF UC and LTFF/GTF Accounts payable Margin Margin Margin Margin Margin 811,604 78,719,028 36,03 I,780 1Azt,074,98s 1,353,760,605 100,968,639 17,968,410 17,030,469,804 5,33 1,896 94,034,584 13,864,686 20,010,347,997 569,107 983,716 Telegraphic transfer Margin on acceptance Export proceeds awaiting disposal Remittance awaiting disposal 8,713,253,792 361,340,932 6,978,202.53 Others 14,988,274 780,290 6,26r,054275 6,787,264 27.866.161.3s4 60
61. Perticulrrs t9 .2 Notc 2018 Trke Dcposits from benks rnd othcrs Inter-bank deposits Other deposits 19.3 2019 Trkr 6,169,084,156 19.3 Intcr-brnk deposits AB Bank Limited Agrani Bank Limited AI-Arafa Islami Bank Limited Bangladesh Ikishi Bank Citibank N.A. 54,143 54,059 500,000,000 3,500,000,000 749,440,064 514,380,491 250,000,000 455,863,053 Commercial Bank of Ceylon Plc. Dutch Bangla Bank Limited |4,722,610 6s0,000,000 100,000,000 EXIM Bank Limited 5,191,092 5,078,U| First Security Islami Bank Limited 164,791 160,383 IFIC Bank Limited 268,662 264,244 Islami Bank Bangladesh Limited 8,607,582 Meghna Bank Limited 3,501,780 Mercantile Bank Limited 5,342,095 713,862 Mutual Trust Bank Limited NCC Bank Limih.d 4,9'10 221,567 1,196,746 200,000,000 NRB Commercial Bank Limited 24,108,748 Prime Bank Limited 1,000,000,000 Pubali Bank Limited 18,955,006 s00,000,000 500,000,000 Rajshahi Krishi Unnayan Bank (RAKUB) State Bank 8,418,107 140,000,000 oflndia 400,000,000 Sonali Bank Limited 3,000,000,000 Shahjalal Islami Bank Limited 4,000,000,000 4s1,703 105,431,394 200,000,000 Standard Chartered Bank 335,533 329,285 10,461,357 10,239,594 Govemment 10,307,1 16,456 Deposit money banks Other public Foreign currency Private 6,169,084,r56 25,926,851,338 21,882,296,084 8,556,499,639 10,814,479,860 22,396,797,707 Social Islami Bank Limited(SIBL) The City Bank Limited The Trust Bank Limite.d 19.4 19.5 Sector-wise dcposits t,359,193,796 265-512.1 10.538 255.193.415.374 329.797.460.s73 298.320.586.377 Unclaincd Deposits rnd veluablcs 221,282 221.282 2.682.163 Payment Order 2.682.163 r9.6 Anelysis of residual mrturity grouping of dcposits Inter-bank dcposits: -- Payable on demand Within one month More More More More than than than than 300,000,000 5,003,584,r56 one month but less than six months six months but less than one war one year but less than five vears five vears but less than ten years 58,553,592 10,500,000,000 Other Dcposits: Payable on demand 44,203,400,000 Within one month More More More More than than than than 79927,32s,844 one month but less than six months six months but less than one vear one year but less than five vears five ycars but lcss than ten vears 70,710,990,000 102,836,600,000 39,928,646,408 66,301,561,377 68,761,725,000 93,513,400,000 7t't 61
62. Particulers 20 Notc 2019 2018 Trkr Teka Consolidated other liebilities Southeast Southeast Southeast Southeast Southeast 2t Bank Limited Bank Capital Services Limited Financial Services (UK) Ltd Financial Services (Australia) Pty Ltd Exchange Company (South Africa) Pty Ltd 31,765,50 ,056 306,169,676 323,309 787,383 4,244,208 3&65r.506-648 32-tO2-455-720 18,773,255,000 13,283,300,001 Othcr liebilitics Provision for loans and advanceVinvestments 21.1 Interest suspense account 21.2 9,294,042,050 5,99s,927,271 Provision for taxation 21.3 4,814,160,997 5,030,480,?82 Obligation under lease liabilities 21.4 868,030 1,291,340 Lease Liabilities (Right of Use Assets) 21.4.2 132,956,073 Accrued expenses 20,738,308 Interest payable on borrowings 501,780,157 Accounts payable-Bangladesh Bank 66,346,869 Accounh payable-others 1,209,485,335 Provision for diminution in the market value ofshare Other provisions 21.7 684,270,141 21.5.1 1,062,908,714 Uneamed income 334,006,098 Branch adjustment 21.6 Withholding tax Provision for audit fees 14,467,280 391432,740 276,010,148 1,560,523,945 799,726,s00 1,456,946,800 380,676,896 393,14s,849 1,s76,218,799 t,023,929,163 99s,501,554 1-000.000 38312,892f,83 2l,l 3,348,674 s2.286.589 Less: Inter company balance eliminated 2t 284,773,226 1.000.000 31,765,504,056 Provision for loans end advencedinvcstmcnts A. Generel Balance as at 3,321,400,000 I January 3,440,610,024 Add: Provision made during the year On standard loans and advanceVinvestnents On Special Mention Account(SMA) etc. (3,120,000,000) Less: Transfer to specific provision Less: Provision no longer required Balance as at 3l December 529,628,000 3.321,400,000 9t7,012,200 404,8r2,584 4,974,285,948 B. Specilic Balance as at kss: Add: Add: Add: [,ess: I January Fully provided debt write offduring the year Recoveriesofamountspreviouslyudttenoff 4,255,025,727 Specific provision for the year Transfer from general provision Interest waiver during the year Net charge to Profit & Loss A/C Balance as at 3 I 3,120,000,000 8.281,727,000 18,243,627,000 December C. Total provision on loans and advancevinvestrnents (A+B) 21,2 : 9,961,900,000 18.773,255,000 Intercst suspense lccount Balance as at I Januarv Add: Amount transferred to "interest suspense" account during the year [.€ss: Amount of interest suspense recovered during the vear Amount wdtten offduring the vear Interest waiver during the Year 5,995,927,271 6.583.128.290 4A02,732,28r 3,086,779,100 3,148,17s 1,896,024,4't3 493,566,266 -179 Balance as at 3l .271 December 62 -x29!p12J59-
63. Perticuhrs 21 .3 Notc Provision for 2019 20lt Trlo Trke trntion Provision for current tax Defened tax liabilities 21.3.1 21.3.2 44tr,136,490 aItT 0)L <n1 3,88s,486,907 l-144-993-87s _43!4.16AJgl_ _5.030.410.42_ 21.3,1 Provision for currcnt ter Provision Balance as at I January Senlement/adjusfincnts for previous years Provision made for the current year (A) Brlencc rs rt Lcss: Advencc 21.3.1.1 r4,079,760,869 16,561,854,123 Q,694,106,06t) (4,682,093,2s4) 2,600,000.000 3l Dcccmbcr 2.200.000.000 14.019,760,869 tet Balance as at I January Paid during the par 10,r94273,962 2,074,350,417 2,172,386,062 Settlement/adiustnents for previous yea$ (B) Belencc es rt 31 Deccmbcr (2-694.105.Mt) (4717 174 t44\ (A-B) Net balance as at 3l December 12,755,022,044 9.574.518.31t 10.194.273.962 4.411.136.490 3.885.486.907 21.3.1.1 Provision mrde for thc currctrt ycrr Provision made during the year kss: Excess provision adjustment for prior laars 2,600,000,000 2,600,000,000 21.3.2 2,200,000,000 Dcfcrrcd tex lirbilitics Deferred tax liabilities are attributable to the following: Revaluation reserve of land Revaluation reserve of buildings Fixed assets- except land and revaluation reserve ofbuildings 6t5,761,2t3 615,76t,213 125,9r 1,051 125,9r r,05r t (353,849,640) 390,536,360 2r.i.3.2 10,840,095 21.3.i. Revaluation reserve of IITM securities Rcvaluation reserve of HFT securities 21.3.3.3 4,361,'189 403,024,507 7,662,748 5,122,503 1,144,993,E75 Deferred tax is calculated using the tor rates expecrcd to apply in the periods in which the assets will be realized or the liabilities settled, based on tax rates and laws enacted, by the balancc sheet date. Following are the descriptions for each individual item of the defened tax that are recogrized by the Bank as a temporary difference with expected time ofrealization. Rcvelurtion rcscnc of hnd As the land is not depreciable and as per local tax rules revaluation gain is not ta:rable. However, the tal( office will charge taxes on capital gain which is the same amount of revaluation gain whether recovered through use or sale. Hcnce a ta<able temporary difference arises against which the Bank recognizes defened tar liabilities. Howwer, the outstanding amount of deferred tax will be automatically releascd with the disposal of the assets. Rcvelurtion rcsclc of buildings Buildings are depreciable assets. Its revalued carrying amount will be recovered through use and this will generate taxable income which exceeds will be allowable for tax purposes in future periods. As a result taxable temporary difrerence will arise. the depreciation that Fixcd rsscts- cxccpt hnd rnd rcvrlurtion rcscrvc of buildings Accounting depreciation is not ta:( allowable expenses. Rather, the tax ofiice will allow tax depreciation as per 3rd Schedule of the Income To< Ordinance I 984. Hence a temporary difference arises due to the different dcpreciation rates and methodologa against which the Bank recognizes deferred tax. This is an ongoing item as there is a difference betwecn the tax depreciation rate and the accounting depreciation rate. However, the outstanding amount of deferred ta< will be automatically released with the expiry of the economic useful life of the assets. 63
64. Perticulers 20t9 Tekr Notc 2018 Trkr Reveluetion rcserycs of IITM rnd HFT sccurities ta >( relating to unrealized interest on the revaluation of Held to Maturity QITM) and Held for Trading (HFT) securities is recognized direcfly in other reserves as a part of equity and is subsequently recognized in the profit and loss account on maturity of the securities. The deferred tax recognized against this will be fully reversed at the maturity ofall related securities. Deferred 21,3,3 Movement of dcferrcd trx liabilitics Balance as at I January Provision made for deferred tax liabilities Charg€d to profit and loss account Charged to revaluation reserve 1.1,14.993.875 (744,386.000) 3.177.347 (741.208.653) Adjustnent made during the vear for revaluation reserve Balance as at 3l A/na.n December a.<fi1 1.3s6.288.s38 (35.000.000) 2.0s0.800 (32.949.200) t.tdd.003.r?5 21.3.3.1 Deferrcd tax on fixcd rsscts- cxceDt lrnd rnd rcvrlurtion rescrvc ofbuildinss Balance as at I Januarv Charge to profit and loss account Balance as at 3l December 390,536,360 (742,919,0001 (352.382.640) 425,536,360 (35.000.000) 390.536.360 21.3.3.2 Defcrred tax on rcvrluetion rcservc of HTM sccuritics Balance as at I Januarv Charge to revaluation reserves Adiustnent durins the year Balance as at 3 I December 7.662.748 3.177.347 5.611.947 2.050.800 10.840.095 7-662-748 5.122.503 183.467.967 21.3.3,3 Dcferrcd tex on reveluation rcscrvc of HFT securities Balance as at I January Charge to revaluation reserves Adiustrnent during the Year Balance as at 3l December 21.4 (,760.714\ 1361.789 fi18.145-464\ s.122.503 Obligetion undcr lcasc lebilitics Balance as at I January Addition durine the year Adiustment during the ycar Balance as at 21.4,1 3l (423,310) 0.4'17.131\ 868,030 1,291,340 December Aging anrlysis oflcesc lebilitics Finenciel Minimum chersc lcesc Teka Trkr Teka 2019 103.538 28.053 599.772 399,848 599,772 599.772 399.848 1.599.392 within I war Payable more than I year but less than 2 vears Payable more than 2 rrears but less than 5 years 496.234 3'il.795 t6fl o.lo 9aa-620 201E Parrable Principel outrtendinq firtrrra mriods ntvmcnt Pavable within I vear Parable more than I vear but less than 2 yeus Payable more than 2 vears but less than 5 vears for -r.lll9L 176.462 103.538 28.05f, 308.053 64 - 423.310 496.234 171 795 1.291.340
65. Perticulers 21 .4.2 20r8 Take 2019 Notc Trlo Lcesc Lirbilitics Right of usc (RO|-I) Asscts Balance as at I January Addition during the year Interest charge during the vear 169,602,073 46,780,250 .-.----tffi,i- Adjusnnent during the year Balance as at 3 I December 21.4.2.1 Aging analysis: Lcesc Liabilitics of Right of usc (ROU) Asscts Minimum lcesc Finenciel chrryc for frrtrrro nrriadc Principel outstrnding Trke Trke Trka 2019 Payable within I year Payable more than I year but less than 5 wars Payable more than 5 years 56,611,419 10,077.598 96.33s.282 13284.984 , 3.448200 76.247 _ls6.394JtlL-23.438J29- 46.s33,821 83,050,298 3.3?1.9s,3 -L32J!6^C3- 65
66. 2l .S 2019 2018 Trke Trka Other provisions charged to profit and toss Provision for other assets Provision for good borrowers Provision for off-balance sheet exposures 2t.5.t (A) 21.5.1 (B) 65,000,000 21.5.t (c) 21.5.1 OtherProvisions A) Provision for other asscts Balance as at I January 163,735,000 70-000-000 233,735,000 Addition during the year AdjusBnent during the year Balance as at 3l December (69,938,086) 229,796,914 233.735.000 B) Provision for good borrowerc Balance as at I January 22,011 1,800 Addition during the year Adjustment during the year Balance as at 3l 22roimo- December 22,011,800 C) Provision for off-balance sheet exposures Balance as at I January Provision made during the year Adjustments made during the year Balance as at 3l December 1,201,200,000 1,425,000,000 1,201,200,000 (389.100.000) (223.800.000) 812.100.000 D) Total other provisions (A+B+Q) 21.6 Branch adjustment (crcdit) l5l General accounts debit General accounts credit 1,451,973,000 9l 799 Branch adjustment account represents outstanding interbranch and head offrce transactions (net) originated but yet to be responded at balance sheet date. However, the un-respondent entries of 3 I Dec 2019 are given below: \o.,ofunrefpondgTtcntries Dgbit Upto 3 months Crcdit 449 1,805 Unrcspondententries(Tekr) Credit ,Dqbit 1,345,879,151 Over 3 months but within 6 months Over 6 months but within I year Over I year but within 5 years 21.7 Consolidated provision for diminution in velue of investments Southeast Bank Limited 2t.7.1 Southeast Bank Capital Services Limited Balance as at 3l December oo 319,600,000 t,739,025,000
68. Particulars Note 2010 20tt 2012 20t3 20t4 2015 2016 2017 2018 22 .5 Rieht Issue @l:2 2070 Stock Dividend Stock split (1:10) 5% Stock Dividend Less than 500 shares 501 to 5,000 shares 5,001 to 10,000 shares 10,001 to 20,000 shares 20,001 to 30,000 shares 30,001 to 40,000 shares 40,001 to 50,000 shares 50,001 to 1,00,000 shares 1,00,001 to 10,00,000 shares Over 10,00,000 shares 22,6 2018 Taka 23.102.801 2.3 l0-280-100 6.930.840.400 I3.861.680 1-385-158.000 8,3r7,008,400 748.530.756 None 5% Stock Dividend None None None 15% Stock Dividend l0% Stock Dividend Classification of shareholderc by holding 2019 Taka 4r.585.042 415.850.420 43.664.294 436-642-940 137.542.526 10s.449.270 1.375.425.260 1.054.492.700 Number of Holders 20t9 2018 9,048 8,404 8,317,008,400 8.732.858.820 8.732.858.820 9.169.501.760 9.169.501.760 9.169.501.760 9,169,501,760 10.544.927.020 t1.599.4t9.720 7o of Total Holding 2018 2019 0.13 0.15 3.14 2.65 16,342 3,322 17,794 2,984 1.97 1.99 2,024 1,903 2.45 2.52 674 379 646 328 1.42 1.50 t.t2 1.07 l8l 173 421 419 0.70 2.83 0.75 2.77 472 472 11.02 11.57 75.72 100.00 74.54 100.00 Initial public offer (IPO) Out ofthe total issued, subscribed and fully paid up capital ofthe bank 1,500,000 (after stock splif 15,000,000) ordinary shares Tk 100 (after stock splil Tk. l0) each amounting to Tk 150,000,000 was raised through public offering on shares in 1999. 22.7 of Name of the Directors and their shareholdings in thc year 2019 sl. no. Name of the dircctorc Status As at 1 January 2019 I Mr. Alameir Kabir, FCA Chairman 23.688.872 2 Mrs. Duluma Ahmed Mr. M. A. Kashem Mr. Azim Uddin Ahmed Mrs. Jusna Ara Kashem Mrs. Rehana Rahman Mr. Md. Akikur Rahman Mrs. Sirat Monira Vice Chaimerson Director Director Director Director Director 2t,945,153 3 4 5 6 7 8 (resigned on November 03,2019) 9 l0 ll Mr. Syed Saiedul Karim Dr. Ouazi Mesbahuddin Ahmed Mr. Mohammad Delwar Husain (appointed on December 22,2019) t2 Mr. M. Kamal Hossain Director 23,3s3,119 29,314,34s 21,090,453 21.670.766 As at 3l December 2019 26.057,759 24.139.668 25.688.430 32.245.779 23.t99.498 23,837,842 23,551,319 2t.410.290 t38,629 Independent Director Independent Director Independent Director Manacing Director 162,611,627 68 178.720.295 iEo
69. Particulars 22 ,8 Note 2019 2018 Taka Taka Cepital to Risk Wcighted Asset Retio (CRAR) of the Bank The calculation of CRAR has been done as per BRPD Circular no. 07 dated BRPD Circular no. I 8 dated 2 I December 2014. 3l March 2014 and the Basel-I[ guideline December 20 14 vide Common equity Ticr-l capital (Going Concern Cepitol) Paid up capital 11,599,419,720 10,544,927,020 Share premium Statutory reserve 23 10,969,433,607 10,094,153,565 Other reserve 25 Retained eamings 28 247,650,000 3-354-063.270 26,170,566,597 2.803.806.592 23,690,537,177 Add: Additional Tier I capital ll Less: Regulatory adjustrnents A) Total common equity Tier I capital 247,650,000 t24.4t9.075 936 26,052,129,662 23,566.118,102 8,600,000,000 529,628,000 10,200,000,000 3,321,400,000 Tier 2 Capitel (Gone -Concern Capitel) Subordinated bond General provision maintained against unclassified loar/invesfinents General provision on off-balance sheet items Asset revaluation reserve Revaluation reserve of Government securities Less: Regulatory adjustnents 8l2,l00,ooo 1,20t,200,000 2,101,404,750 234.027.984 12,277,160,734 2,335,432,734 2,101,404,750 234-021-984 17,058,032,734 1,868.346.187 9,941,728,000 Total Tier 2 capital B) Total capital C) Risk Weightcd Assets (RWA) Credit Risk On-balance sheet Off-balance sheet l5,lE9,6E6E4Z 3s.993.857.662 38.755,804,649 245,711,589,681 30.245.839.839 231,060,tt0,522 47.825.004,244 278,885,114,766 9,837,819,829 9,825,644,530 22.t28,575.152 24,176,795,376 275,957,429,520 Market risk Operational risk 309972,044,725 TotalRWA D) Required common equity Tier Required Tier I Capital I Capital 6oh (2018:6%) of E) F) Required totel capital L2.flo/o (2018: G) Surplus total capitel (B-E) Surplus common equity Tier Cepitrl to risk-weightcd On common equity Tier assets RWA) ll.t75%) of RWA I Cepital(A-D) t3.948.742.013 13.987.770.050 18,598,322,683 18,650,360,067 38.746.505.591 36.912.t70,966 12.101.387.649 9.578.348,052 =:- 0.752,647.9281 I,E43,633,684 ratio: I capital against standard of 7.Sto/o 8,400/o minimum 4.57o On Tier I capital - against standard of minimum 60lo On total capital - against standard of minimum 12.50o/o(2018:11.875W -- t.40o/o 7.58o/o ll.610/0 12.47Yo 69 REO
70. Porticulers 22 .9 Notc 2019 201t Teka Taka Leverage Ratio of thc Bank A) Tier I capital considering all regulatory B) On-balancesheetexposure C) Off-balance sheet exposure D) E) 26,052,129,662 adjustments 404,186,964,050 60,523,824,177 Deduction from on and offbalance sheet exposure /Regulatory adj ustment Total exposure (B+C-D) l 18,436.936 124.4t9-075 457,994,149,240 Leverage rrtio (A/E) Liquidity coverage retio Net stable funding retio 22.10 Capital 23,566,119,102 372,342,421,027 85,766,147,287 5.l5%o 5.610/o l54.O0o/o 123.37Vo 113.88% 115.18% to Risk weighted Assct Rrtio (CRAR) of the Group Common Equity Tier I Capitel Paid up capital 11,599,419,720 10,544,927,020 10,969,433,607 247,650,000 10,072,617 3.443.466.969 10,094,153,565 247,650,000 10,070,512 2.898.043.836 23,794,944,933 Share premium Statutory reserve Other reserve 23 25 29 27 Non- controlling interest Retained earnings 26,270,042,913 Add: Additional Tier I capital Less: Regulatory adjustnents A) Total common cquity Tier 124,4t9.075 23,670425,858 r 18,436,936 I capitat 26. Tier 2 capital (Gonc'Concern Cepital) Subordinated bond General provision maintained against unclassified loan/investrnents General provision on off-balance sheet items Asset revaluation reserve Revaluation reserve of Govemment securities 8,600,000,000 529,628,000 812,100,000 2,101,404,750 234-027-984 10,200,000,000 3,321,400,000 1,201,200,000 2,101,404,750 12,277,160,734 Less: Regulatory adjustnents 734 9,941,72t,000 Total Tier 2 capital B) Totel capital C) Risk weighted assets (RWA) _lEa2!i13pz!_ Credit dsk On-balance sheet Market risk Operational risk 24.515.099,5t2 Required common equity Tier I capitel I cepitel 6Yo Q0l8z 6%) 313.960.922.637 14.t28.241.519 14.099.259.458 of RWA E) Required total capital l2.50%o Q0l8:.11.875%o) F) Surplus common equity Ticr I cepitel (A-D) G) 227,901,721,877 47.825.004.244 275,726,726,121 15,778,852,594 313.316.876.851 Total RWA Required Tier 112,405 241,706,678,361 30.245.839.839 271,952,518,200 16,849,259,139 Off-balance sheet D) 17,058,032,734 1,868.346,187 15,189.686,542 of RWA 18,799,012,611 18,837,655,358 39.164.609.606 37.282.859.563 _t2prl3465l9- _t3 Surplus total capital @-E) !!,215.62eL -16IJ.252&L Capitrl to risk- weighted asset ratio: On common equity Tier I capital - against standard of minimum 4.5% On Tier I capital - against standard of minimum 60lo On total capital - against standard of minimum 12.50o/o(2018:11.875y0 184.339 7.54Yo 8,350/o 8.35o/o 7.54"/o ll.52o/" 12.38o/o 70 .PEo
71. Particulrrs 22 .11 Note A) Tier I capital considering all regulatory adjushents B) C) D) Or-balance sheet exposure Off-balance sheet oposure Deduction from on atrd offbalance sheet exposure /Rcgulatory adjusment Total orposure (B+C-D) 26,151,605,977 404,069,087,993 60,523,824,177 23,670,425,858 372,823,178,880 85,766,147,287 I 18.435.936 124.419.075 46447447s.234 Leveraqe ratio (A/X) Liquidity coverage retio Net stable funding ratio 4st,464.907,A92 5.630/o 5.160/o 154.00o/o 12337o/o 113.E8% 115.18olo Ststutory reserye Balance as at I January Addition during the year Balance as at 3l December 24 20lE Taka Lcverage ratio ofthe Group E) 23 2019 Tekr -$,q2!,Eldg!- Revaluation reservc Revaluation reserve of land and buildings: Balance as at I January Addition during the year Deferred tax liabilities Balance as at 3l 9,r70,000,000 924.t53.565 153,565 4,944,481,764 4,944,481,764 4,944481,764 4944,481,764 (741,672,29s) (741,672,26s) 4202,E09499 December Revrluation reserve on IITM securities: Balance as at I January 19,l 18,815 Addition during the year 13,650,014 8.472,925 5,468,801 27,591,740 19,118,t15 27,59W40 19,11t,E15 Adjusment during the year (10,840,09s) Deferred tax liabilities Balance as at 3l t6J3t$45 Dece,mber Revaluation reserve on HFT securities: Balance as at I January Addition during the year Adjustnent during the year l5 1,658,839 506,859,455 333-754.704 I.143.283.843 4t5A13,542 1,650,143297 (450,820,2s2) (1,498,484,459) 34,593,291 (5,883,217) Deferred tax liabilities Balance as at 25 3l 2EJt0,o73 December (7,662,748) 11A56,067 4248271,'1E 151,65t,t39 (s,t22,s03) 146,536,336 4$60$ot,9o2 Other reserve General reserve: Balance as at I January Addition during the year Balance as at 3l -: December 71 247,650,000 247,650,000 247,550,000 241.650000
72. Perticulers 26 Notc 2019 20rt Trka Tnkr Forelgn currcncy trrnslrtiotr rcscnyc Balance as at I January (Adjustnents)/addition during the year Balance as at 3l Decsnber The translation reserve comprises all foreign currency differences arising fiom the rmslation of the financial statfilents of foreign operations. 27 Consolideted retrined crrnings Southeast Bank Limited 28 3,354,063,270 Limitcd Southeast Financial Services (UK) Ltd Southeast Bank Capital Services Southeast Financial Services (Australia) Pty Southeast Exchange Company (South 276,328 (32,7s0,000) (16,615,s53) (17,893,249) Ltd Africa) Pty Ltd Less: Elimination for impairment of investnent in subsidiary 2t 2,803,806,592 1,423,733 80,233,629 79,909,680 40.496-336 48.550.048 3,443,46,969 2,89t,043,t36 2,803,E06,592 E,844,087 2,640,353,198 Retained earnings Brlence rs rt I JrnurrJ Currency translation differences Prior year adjusfinent -- 7,264,394 100-399-123 29I3.,A49$02 1,645,506,158 Retained surplus for the year 4,55t555,90 1,531,614,259 4,179231,t51 l,ess: Transfer to Southeast Bank StaffWclfare Trust 150,000,000 Issue ofbonus share Retained eernings crrried 29 forwrrd Non-controlling intcrcat Paid up capital Retained earnings Total net assets Non-controlling int€rest 0. lE309l% (2018:0. lE309l7o) of nct asscts :- 10,072,617 10,0701!2 Non-connolling interest arises only for Southeast Bank Capital Services Limited since all other subsidiaries are wholly owned by Southeast Bank Limitcd. 30 Contingent Iiabilitics 30.1 Acceptlnces and endorscments Acceptance under Lrtters ofCredit (LC) - other than back to back Acceptance under Letters ofCredit -back to back 30.2 31,298,942,846 l7-108.738.407 44,423,696,274 19.430-065.710 _!3,9,6n 2$_ _69,8s:Ug2pg1- Letters of gurrrntce 16,393,957,537 379.760-504 Local Foreign -!5JJ2r$.041 72 18,085,603,871
73. Particulars 30 .2.1 Notc Balance for which the Bank is contingently liable in respect of gurrantee issued favouring: Directors or officers Banks and other financial institutions 2019 20lE Takr Trka 4,783,06t t6.722-005.761 4,783,000 46,205,078 19.147.004.963 11,002,117,710 16.934.335.499 16,060,837,527 20.313.721.780 46,929,219 Others _!$J!IJ!N!L _!%!y,-3t!L 30.3 Irrevocablc Letters ofCredit (L/C) Back to back Others UC _n',935,!53J44,_ _!g;!Z!€5%!09_ 30.4 Bills for collection Iocal Foreigr 30.s 13,508,21 1,848 2*-$C 2!.66t-92r.flI3 -2 11.1s6.714.966 Other contingcnt liabilities Value ofBangladesh Sanchaypatra 3f 14,780,73s,049 13.796.209 151 & others t,4rt6E4Jt!D Income statement Income: 30,81 1,600,364 Interest, discount and similar income DMdendincome 189,895,835 2,201,445,993 458,154,698 34,391,265 1,563,546,203 Fees, commission and brokerage Gains Gains Gains Other less losses arising from dealing securities less losses arising from inveshnent securities less losses arising from dcaling in foreign currencies 88,341,080 t.328,341,566 33,MfiL{O 3,647,173,030 1,220,472,103 Adminisfative expenses Otho opoating expenses Depreciation on banking assets 9,01E,74t979 Income over expenses 18,775,867,174 3,448,714,783 1,209,933,472 329.860.908 23,764,376,338 9,735,L04,731 Consolidated interest incomc/proftt on invcstments Southeast Bank 33 Limited Limited Southeast Exchange Company (South Aftica) Pty Ltd Southeast Bank Capital Services Less: Inter company balance eliminated 33 2,210,370,584 (79,827,714) 947-056-334 operating income Expenses: Interest, fees and commission 32 28,874,960,097 130,239,122 26,242,459,146 35,365,624 7.545.394 23,95t,689,857 t7,246,869 9,067,230 26,285370,165 2397t,003B56 26,487,768 66.849 262st.ttz397 .837.107 23,547,858,446 798,674,353 21,875,787,034 473,435,429 Interest income/profit on investments Interest on loans and advences (Conventionrl Banking): 61s1'951 qa lsans and advances Interest on place'nrent with other banks and financial institutions Interest on foreign ourrerncy balances 73 t2t-469.232 22,470$91,694
74. Particulars Notc 2019 20tE Taka Taka Prolit on investment (Islamic Brnking): Profit on invesments Profit on placement with other barks 1,689,605,015 61.293.017 1,480,929,380 68.783 1,750,898,031 .480.998.r 26242,159,146 34 Consolidated intercst paid/profit shared on deposits rnd borrowings etc. Southeast Bank Limited Southeast Bank Capital Services kss: 35 35 18,775,867,174 1.55s-s13 2.196.982 22,02t373,3E1 1Er7E,064,156 26,487,768 166,849 _?2O0r,E819!2_ _1!,71L82LN_ Inter company balance eliminated Interest paid/profit shared on deposits and borrowings etc. Interest paid on deposits (Conventional Banking): Intercst on deposits Interest on borrowings Interest on repurchase agreement (repo) Interest on refinance Interest on foreign bank accounts 18,741,377,824 1,811,452,s74 2,741,871 5,5 16,939 Profit shared on deposits (Islamic Banking): Profit paid on deposits Profit on refinance bonowings 36 22,026,807,868 Limited s.886.244 15,988,578,364 1,487,780,085 2,415,850 4,940,677 2.704-430 20.566,975,453 17,486,419,405 t,428,244,515 1,206,982,422 Consolidated investment income Southeast Bank Limited Southeast Bank Capital Services 37 5,25 1,583,015 72.876.814 Limited 5324,459$29 35,484,673 [,€ss: Inter company balance eliminated 37 5,2tt,975,155 Investment income i7.1 i7.2 i7.3 Interest income from Government securities Capital gain (loss) on Govemment securities Revaluation gain (loss) on Govemment securities Dividend on investnrent in shares Gain on sale ofinvestrnent in shares Interest income from inveshnent in bonds 37.1 5,129,753,56E ,037,039 474,001,394 (l 189,895,835 34,391,265 179 4,340,846,226 - 1,094,874,269 (1,174, 130,239,122 88,341,080 Interest income from Government securities Interest on treasury bills Interest on freasury bondVT&T bonds Interest on Bangladesh Bank bills 4,458,232,675 (322,323) Interest expenses on freasury bills Interest exp€nses on treasurybonds (550-873_3 13) (551,195,636) 3,907,037,039 Net interest income from Govemment securities 74 10,670,572 4,862,083,421
75. Particulers 37 .2 Note 2019 201t Takr Take Capital grin on Government sccurities Capital gain on treasury bills Capital gain on treasury bondVT&T bonds 503,768,813 212.532.498 769,439 1.223.140.2r7 1,223,909,656 716,301prr Capital loss on Eeasury bills Capital loss on treasury bondVT&T bonds 37.3 (L28.294-128], Q42,299,9171 (129,035,387) _47 Net capital gain on Govemment securities (74t,2s9) (s,490,381) (236-809.s36) 4,Nt 3e!_ _!rg2!fi3!@_ Revaluation gain (loss) on Government securities Revaluation gain on teasury bonds 42,921,719 Revaluation loss on teasury bills Revaluation loss on treasury bonds Revaluation loss on Bangladesh Bank bills (r5,E46,696) (l (15,E46.696) (rs.846.rr9til Net revaluation gain (loss) on Government securities 38 Limited 39 Limit€d Southeast Financial Services (UK) Ltd Southeast Exchange Company (South Africa) Pty Ltd Southeast Bank Capital Services 3,764,992,196 387,500 4,401,964 3,538,712,150 325,000 21,392,216 Commission, exchange end brokerage Commission and brokerage Exchange gain 39.r (r.r?4.?0r.!!tI Consolidated commission, exchrnge and brokerage Southeast Bank 39 (1217,623,7021 39. I Exchange gain Exchange gain from revaluatior/trade Exchange gain from credit card offoreip currenry 1,292,788,635 3s.ss2-93 I 1,328341,566 40 Consolidated other opcrating income Southeast Bank 4l Limited Limited Southeast Financial Services (IlK) Ltd Southeast Bank Capital Services 978.908,443 10,298,550 664.535 34,170,935 9E9,E71,528 l,ess: 4t Inter company balance eliminated 4,73t,840 4,273,920 _2!!,t3Xgq!- 979.447$t5 Other operrting income Rernittance fces Service and incidental charges Other fees - telephone andpostage Income from ATM services Income from credit oard Income from retail banking Other Fees - SWIFT and others 94,984,07t 4l.l Gain on sale offixed assets Income from telecash Miscellancous income 52,660,074 39,103,635 176,148,439 7,453,193 229,756,216 1,665,379 2,662,321 789 75 17,674 99,288,754 58,491,405 43,787,777 150,609,s74 6,745,804 222,203,670 142,832 783,903
76. Particulars 4l .l Note 2019 2018 Tekr Tnkl Gain on sale of fixed assets Cost: Furniture and fixtures Office appliances 4,285,782 892,731 Computer 99,369 327,102 Electrical appliances 23,24,681 ATM 967,000 8,138,362 50,500 Motor vchicles Accumulrted depreciotion: Furniture and fixtures Office appliances Elecftical appliances 2,385,078 140,205 10,984,900 900,684 15.919.417 ATM Motor vehicles Written down valuc ofthe above fixed Gain on sale of fixed rssets Sale proceeds 42 3,633,520 assets Consolidated salaries and allowances Southeast Bank Limited 43 Limited Southeast Financial Services (UK) Ltd Southeast Financial Services (Ausfalia) Pty Ltd Southeast Exchange Company (South Aftica) Pty Ltd Southeast Bank Capital Services 43 2,142,216,378 13,775,340 6,t71,575 Salaries and allowances 1,058,499,8s4 684,957,939 309,8r4,083 Limited 45 Limited Southeast Financial Services (LJK) Ltd Southeast Bank Capital Services t,06t,295,939 14,435,593 7,188,500 Southeast Financial Services (Ausnalia) Pty Southeast Exchange Company (South Lrss: 13,075,067 3,932,573 616,3s6 Ltd Africa) Pty Ltd Inter company balance eliminated 5.174.927 707 1,oEE,094,959 4,731,840 1,083"363,119 4,273,920 Rent, taxes, insurance, electricity etc. -1q4,!ggi!2- Rent, rates and taxes Insurance Electricity and lighting 46 s97,803,225 304,014,470 Consolidated rent, taxcs, insurlnce, electricity etc. Southeast Bank 45 1,992,049,030 12,546,929 11,848,270 164,65t Basic salary Allowances Bonus Provident fund 44 91,000 7,254,710 35,279 224,724,893 662,528,072 243,894,399 Consolidated postoge, stamp, tclecommunication etc. 47 Southeast Bank Limited Southeast Bank Capital Services Limited Southeast Financial Services (UK) Ltd 165,2s3 126,671 423,3t1 15,104 Southeast Financial Services (Australia) Pty Southeast Exchange Company (South l59,r5l Ltd Africa) Pty Ltd 76
77. Particulrrs 47 Note Postage 49 ,385,385 17,224,826 VSAT on-line Reuters services Other Fees - SWIFT and others Limited 49 Limited Southeast Financial Services (uK) Ltd Southeast Exchange Company (South Africa) Pg Ltd I 5,723,162 41,893,216 45,543,5U 2,620,462 173fi91,923 1,612,44s 54.910.668 IE1,005,852 164,420,208 162,614,460 284,tO 304,136 729,184 l-994.508 302,974 738-715 165,746,039 165,642,288 Strtionery, printing, advertisemcnb etc. General and office stationery Printing and security stationery Publicity and advertisernent 78,530,832 88,952,597 28,990,001 46.477.610 36,103,821 47.979.807 164A20,20E 162,614460 4,020,000 1,740,000 900,000 1,200,000 4,020,000 1,740,000 900,000 1,200,000 urility 720,000 720,000 Special allowance Provident Fund Bonus 420,000 402,000 1,072,000 420,000 402,000 670.000 10,072,000 3,292,248 2,718,099 2,720,000 2,360,000 358.099 2,718,099 1,000,000 69,000 I Managing Director's salary and fees Basic salary House rent House maintenance Leave fare concession 5t 16,566,03 57,919 5,189,460 56.844.872 Southeast Bank Capital Services 50 57.125,786 Consolidatedstationery,printingrldvertisemenBetc. Southeast Bank 49 201E Taka Postage, stamp, telecommunication etc. Telephone /Telcx Elechonic banking service FC Charge (Nosto) 4E 2019 Takr Consolidateddirectors'fees Southeast Bank Limited (Note 52) 52 Southeast Bank Capital Services Limited 52 Directors'fees Directors'fees Directors' haltage and travelling Each Director is paid TK. 8,000/ per meeting per attendance. 53 Consolidrtedauditors'fees Southeast Bank Limited Southeast Bank Capital Services Limited Southeast Exchange Company (South Africa) Pty Ltd 69,000 I r,847371 77 iEo
79. Particulars 57 Note 2019 2018 Teke Teke Other expenses Security and cleaning Entertainment Car experses Books and periodicals Subscription 204 ,392,878 119,332,449 210,684,805 1,179,594 5,241,323 90,775,896 213,717,936 Donation including CSR Travelling expenses 82,4t0,436 1,083,090 5,772,577 174,603,215 14,004,861 t4,423,981 Finance charge on leased asscts Conveyance 10,3t7,712 139,653 14,699,0s9 9,402,055 14,732,210 8,79s,847 5,810,299 4,083,895 Petrol,oil and lubricant Training/seminar Uniforms and apparels Medical expenses Gratuity and others 5,636,562 3,97s,797 101,692 295,090,057 233,498 292,729,270 26,798,638 162,841 43,042,496 52,579,678 52,441,471 Professional expenses Expemses for CIB report IT enabled services Expenses regarding credit card Expenses regarding retail banking Expenses regarding call centre & agriculture 14,287,t58 194,670 46,529,061 43,029,2t9 47,464,491 2,540,476 3.096,628 Expenses relating to ATM services Expenses regarding mobile banking services-Telecash 49,332,6t4 4,468,701 32,262,133 4,585,765 17,000,000 Provision(Adjustnent) for Impairment loss from investuent in subsidiary (37 Others operating expenses 5E -litlrgqUg- Consolidated provision for tflxation -!'29!'6n'2s2 Current tax: Southeast Bank 59 Limited Limited Southeast Exchange Company (South Africa) Pty Ltd Southeast Bank Capital Services Deferred tax: Southeast Bank Limited 59 2,500,000,000 25,279,358 fl,?-4-4-38en6oll (744,3E6,000) 1,895,669,033 59 13,316,862 (35,000,000) _z!2t Provision for taxation 2,200,000,000 Current tax Deferred tax 59.1 44e'370 Reconciliation of effective tax rate @ank) o/o 2019 Profit before taxation as per Taka 4,376,400,210 profit and loss account 3750% Income tax as per applicable tax rate 1,641,150,079 Foctors affccting the tax chrrge for current year -0.29o/o r,717,623,968 (2s7,726,966) (454,9r8,586) (33,23r,771) (12,896,724) -17.01% (744,385,000) 39.25o/o Non deductible expenscs Deduotible expenses Tax exempt income Tax savings from reduced tax rates for dividend Tax savings for capital loss Change in taxable temporary difference Total income tax expenses -5.890/o -10.390/o -0.760/o -t!s5!o!1Jgg- -!2.40%79
80. Perticulars Note 201E Profit before taxation as per 2019 2018 Take Takr % Taka profit and loss account 4,620,767,824 lncome tax as per applicable tax rate 37.50o/o t,732,787,934 5l.l0o/o -0.76% 2,361,36s,304 (1,284,072,243) (410,s77,&st) (22,791,846) (33,127,90s) (3s,000,000) -3.tt% (143,583,393) Factors affecting the tox charge for current year Non deductible expenses Deductible expenses Tax exempt income Tax savings from reduced ta:r rates for dividend Tax savings for capital loss Change in taxable temporary difference -27.790/o -8.89o/o -0.49% -0.72% Excess provision Total income ta,r expenses 60 46.E5o/o Consolidated cash received from other operating activitics Southeast Bank 6t Limited Limited Southeast Financial Services (UK) Ltd Southeast Bank Capital Services 977,243,064 5,566,710 664,53s 946,913,502 29,897,015 2,494,536 Southcast Financial Services (Australia) Pty Ltd Southeast Exchange Company (South Africa) Pty Ltd 979,305,053 6l Cash received from othcr operating activities 55,326 94,984,071 52,660,074 39,103,635 176,148,439 Remittance fees Service and incidental charges Other Fees-Telephone md Postage Income from ATM services Income from Credit Card Other Fees - SWIFT and others 229,756,216 7,453,193 Income from Retail Banking Income from Teleoash Miscellaneous income 2,66232r 17,674 99,288,7s4 58,491,40s 43,787,777 t50,609,574 222,203,670 6,745,804 783,903 364-984.941 946913,502 62 Consolidated payments for othcr operating activities Southeast Bank 63 Limited Limited Southeast Financial Services (UK) Ltd Southeast Financial Services (Austalia) Pty Ltd Southeast Exchange Compury (South Afiica) Pty Ltd Southeast Bank Capital Services 2,604,170,083 24,153,005 14,324,886 6.814.075 2,649462$49 80 2,439,278,046 21,671,938 11,241,414 633,825
81. Particulars 63 Note Postage Directors 'fees Repairs kgal 1,098,529,475 997,505,888 173,691,923 l8 1,005,852 3,292,248 2,718,099 84,114,735 1,293,220 1,000,000 90,184,334 1,863,45s 1,000,000 expense Audit fees Other expenses r.235.608.648 1.171.640.2s2 2.604,170,0t3 2439,27E.046 2,508,554,444 1,t59,941,972 2,473,189,135 1,159,941,972 2,13 Consolidrted carnings per share Net profit after tax for the year ended 3l December (Taka) Number of ordinary shares outstanding Earnings per share (EPS) (Taka)* 65 Teke Payments for other operating rctivities Rent rates and taxes 64 20lt 2019 Teke 216 Earnings Per Share (EPS) Net profit after tax for the year ended 3 I December (Taka) Number of ordinary shares outstanding Eamings per share (EPS) (Taka)* *Eamings per share has been calculated in accordance with IIS 33; Eunings Per Share (EPS/. 2,520,786,2t0 t,159,941,972 2,455,767,E24 2.t7 2.12 t,r59,941,972 Previous year's figures have been restated for the issue ofbonus shares during the year. 66 Consolidated net ossets value (NAY) per share Net Asset Value (NAV) Number of ordinary shares outstanding Net Asset Value (NAV) per share 67 30,499,461,908 1,t59,941,972 26.29 Net Assets Value (NAV) per share Net Asset Value (NAV) Number of ordinary shares outstanding Net Assct Value (NAV) per share 68 30,41E,E37,E r5 t,t59,941,972 26.22 28,051,339,079 1,054,492,702 26.60 Consolideted net operoting cash flow per share (NOCFPS) t3,542,323,987 Net Operating Cash Flow Number of ordinary shares outstanding Net Operating Cash Flow per sharc (NOCFPS)* 69 28,116,657,718 1.054,492,702 26.66 1,159,941,972 I 1.68 3,549,513,918 1,054,492,702 3.37 Net Operating Cash Flow Der sharc (NOCf,'PS) 13,529,493,878 Net Operating Cash Flow Number of ordinary shares outstanding Net Operating Cash Flow per share (NOCFPS)* 1,159,94t,972 11.66 3,507,440,847 1,054,492,702 3.33 *Net operating cash flow per share (NOCFPS) increased due to higher deposit mobilization from customem than loan disbursement and considaably higher cash recovery from prwiously written offloan as compare to the last year. 81
83. Cherter of thc Audit Committee The Audit Committee is constituted by the Board ofDirectors for the primary purpose ofassisting the Board in : - Overseeing the integrity of$e company's financial statement. - Overseeing the imprcvement ofcorporale govemanoe standard ofthe company. - Overseeing the Company's syst€m ofdisclosure, int€mal confiols and procedure. - Overseeing Bank's intemal control over financial reporting. - Overseeing Bank's compliance with ethical standards adoprcd by the Bank. - Making reports and rccommendations to the Board. Roles and rcpomibilities The role of Audit Committee is to assist the Board in discharging its duties and responsibilities for financial reporting, effective monitorin& corporate governance, intemal control, green banking and environmental & climate change risks. The added rotes ofthe Audit Committee include, but not limited to, the following: i) iD iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) Overseeingthefinancialreportingprocess. Monitoringchoiceofaccountingpoliciesandprinciples. Monitoring Inrcmal Audit and Compliance process including approval of Intemal Audit and compliance ptan. Reviewing the Intemal Audit and Compliance Report. Overseeing hiring and performance ofextemal auditors. Reviewing the Annual Financial Statements before submission to the Board forapproval oradoption. Reviewing the quarterly and half-yeady Financial Statemens before submission to tlre Board for approval. Review the financial statements, in particular the investnents made by the subsidiary company. Reviewing the adequacyofinrcrnal audit functions. Reviewing the Management's Discussion and Analysis before disclosing in the Annuat Report Overseeing 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 a[dilors. Reviewing statement ofsignificant party ransactions submitted by the management xiv) Reviewing Management lrtters/ l€tter of Internal Control Weakness issued by Statutory Auditors. Reviewing the existing Risk Management Policy and prccedures to improve the quality of Bank's assets portfolio. xv) Reviewing fund raising through Repeat Public Offering/ Rights Issue and its use and application. xvi) Monitoring internal control process. xvii) Maintaining oversight on regulatory compliance, ethics and whisdeblower hotlines xviii) Reviewing Audit Committee's own xix) 71.2 terms of reference. Reviewing the compliance status of the Minutes of the Audit Committee Meeting. Risk Management Committec of the Board of Directors of the Bank The Bank Company Act- I 99 I (Amended up to 20 I 8), inter alia, provided for constitution of a Risk Management Committee of the Board of Directors of every Bank. The committee will scrutinize whether appropriate risk management measures are being put in place urd applied and whether adequate capital and provision is being maintained against difrerent risks. Ferture rnd composition The Risk Management Committee was reconstituted by the Board of Directors in its 577th meeting held circular no. I st. no- 3 4 l, ot luly 22, 20 I 9 in accordance darcd October 27,2013 issued by Burgladesh Bank. The composition of the Risk Management Committee in 2019 is given below: Memben Mr. Alamcir Kabir- FCA Mr M A Krshem Mr Azim llddin Ahmed Mr. Syed Sajedul Karim Qndependent Director) Position Meetings hcld Memher 4 Member Remerks AttendrDce 4 Ihe Members who could not attend 3 meeting showing genuine ground were 4 granted leave of absence. 4 Structure of the Risk Mrnrgement Commlttee (RMC) I 2 3 with the BRPD The Chairman of the Board of Directors of the Bank shall be the Chairman of the Risk Management Committee. Presence of 3 (three) members in a meaing of the Committee shall form quorum. The Company Secretary oftheBank shall act as the Secretary to the Risk ManagementCommitrce ofthe Board. 83 any
84. Functiom of thc Rbk Menegcment Committee The broad functional areas of the Risk Management Committee are the following : a b c d e f g h i j k I m n o 71.3 Formulating and reviewing risk manaSement policies and strat€gies for sound risk management. Monitoring implementation of risk management policies and process to ensure effective prevention and control measures. Ensuring consftuction ofadequate organizational sructure for managing risks within the Bank. Supervising the activities of Executive Risk lvfanagement Committee (ERMC). Ensuring compliance ofBangtadesh Bank instsuctions regarding implementation ofcore risk management. Ensuring formulation and review ofrisk appetite, limits and recommending these to Board ofDirectors for their review and approval. Approving adequate record keeping and reporting system and ensuring its proper use. Holding at least four meetings in a year and more if deemed necessary. Analyzing all existingand probable risk issues in the meeting, takingappropriate decisions forrisk mitigation, incorporatingthe same in the meeting minutes and ensuring follow up ofthe decisions for proper implementation; Submitting proposal, suggestions and summary of BRMC meetings to the Board of Drectors at lealt on quarterly basis. Compllng with insructions issued from time to time by the regulatory body. Analping all existing and probable risk issues in the meetingandtakingappropriate decisions forrisk mitigation. Ensuring suflicient and eflicient staffresources for RMD. Establishing standards ofethics and integrity for staffand enforcing these standards. Assessing overall effectiveness of risk management functions on yearly basis. Reletedparty(ies) st Neme ofpcrsonr Nn- Dgsignation I Mr. AlamgirKabir, FCA Chairman 1 DulumaAhmed Vice Chairperson M. A. Kashem Direcoor Mr. Azim Uddin Ahmed Director 3 4 5 Mrs. JusnaAraKashem Director 6 Mrs. Rehana Rahman Director 7 Mr. Md. AkikurRahman Director 8 Mrs. Sirat Monira (resigned on November 03, 2019) Director 9 Mr. Syed Sajedul Karim Independent Dircctor l0 Dr. Quazi Mesbahuddin Ahmed Independent Dircctor ll (appointed on l2 Mr. M. Kamal Hossain Independent Director Managing Director 7o ofsheres Prescnt eddress or or 1l Dm l0lf 226, Dilu Road, New Eskaton, Dhaka 2.25% 2.25o/o Plot No.sl, Road No.09, Block-F Banani- Dhaka 2.08% 2.08o/o 2.21% 2.21% 2.780/o 2.78% 2.N% 2.00% 2.060/o 2.06% 2.O3o/o 2.03o/o Gulshan Avenug Hous€ No.l0, Road No.6E, Gulshan-z, Dhalrn-l2 | 2 Sonarpara, Nobarun-227, Sylhet 226, Dilu Road (Ground Floor), New Eskaloq Dhaka O.Olo/o B/3, House No.08, Road Gulshan-l, Dhaka-I212 Flat No.C-I, House No.160, Road No.3, Block-A Bashundhara R/A, Dhaka-1229 Southeast Bank Limited, Head Offcc, 52- 53 Dilkusha C/A, Dhaka-l 000 +As per SEC notification no-SEC/CMRRCDDOOg-lgSlllglAdmin/34, dated: 22lllD}ll: "Each direclor other than independent directo(s/ nominated 2o/o (two percent) sharcs of the paid-up capital. Otherwise there shall be a casual vacancy of directo(s) of any listed company shall hold minimum director". 84
86. 71 .5 Number of employees The number of employees engaged for the whole year or part thereof in 2019 who received a total yearly remuneration of Tk 36,000 or above were 2885 The total number ofemployees were 2797 in 201 8. 71.6 Share treding The Bank started rading its ordinary shares in Dhaka Stock Exchange @SE) and Chittagong Stock Exchange (CSE) through CDBL from t6 May 2004. The closing market price of the sharc as on 31 December 2019 was Tk.13.40 (2018: Tk.15.60) for each Tk.l0 per value of share at DSE and Tk 13.20 (2018: Tk.15.70) for each Tk.10 per value ofshare at CSE. 71.7 Pettern of Shareholding Breakup of shareholding pattem as per clause 1.5 (xxi) of Securities and Exchange Commission notification No.SEC/CMRRCDI2@6-I58D07lAdminl8o dated 03 June 20t 8 issued under Section 2CC ofthe Securities and Exchange Ordinance, 1969, is as follows: a) ParenUSubsidiary/Associatcd companies and other related parties (name wise details): SI na I 2 Shrrehnldino Slnrcfirre Nlma nf lha lCnnnlnw Southeast Bank Capital Services Limited 99.816909% owned by Southeast Bank Limited Southeast Bank Financial Suvices (UK) Ltd 100% ovmed by Southeast Bank Limited 100% ovmed by Southeast Bank Limited 71,8 Eighlights on the overrll rctivitie of the Brnk Highlights on the overall activities of the Bank have been fumished in AnncxureA. 86
88. with otrcr Ara .13: in hrnd Perticuhrr fitrficial institlrtioos fiImin re and fimtrEs notice advances/investrneots at call ed asssb |lt'JI! .FTMTET Bmowings torn Bangla&sh B.nk, oth€r btnks, financial itrstitutions ltd assts DeDositt Provision and othcr liabilities Totrl lirbilitig (B) Nct liruiditv s.D (A - B) Southeast Bank Limited and its Subsidiaries 1.6t5.000.000 300,000,000 December 2019 5230-500-000 47-521.100.000 476-193-410 /O-l/O-155 18-230-498-779 79-967.800.000 3l Mrturity Amlysis) Consolidrtcd Llquldity Strtement As at (Asscts rnd Lirbilitics I motrth Trkr UD to 130 I t00 3-158-971-879 70.450.900.000 t -s61-921-635 424,800,000 l-5 varra 20.s49-900-000 57-748-700-000 1.553.035.274 1.791.653.985 vcr]! Trlr Abovc 5 212-518-637 l8-954-9lt-24? 4 7 Annexurc-B Trkr Totrl I 15 23,901,399,879 ir rtrflrt:Ir] l,000,000,000 329-250-273-94t 38.65 1.506.648 30509J34525 39lJot.lm.{68 19.049.460.573 iru.gEr F[trm
89. h Asaata : C.sh hrd P.rti.uLrs fumih[r ard fixtures with othcr burts and financial institutios Mdrcv ,t cdl and on shdl notic€ Investnents Lo.ns ord edva[c€dinvcskrcDts )th€r sssets Non bankim assets Totrl .3..1. aA) iFFffM'.IE Sorowiogs ftotn Bargladcsh Banlq olher bat*s, financial instifutior|s and aseots DeDoEits Pmvision and other liabilities Totil li.biliti.t (B) N.t liodditv rrD (A - B) Southeost Bank Limited Liquidtty Strtcmcnt (Assets and Liabilities Meturity Anelysis) As at 3l December 2019 l-5 varrr Trke Tohl AnnexureB.l Trkr Abovc 5 ycart 3.664.640.436 m/ltlIr7 392.01 1.75:,23s 38.312-892-783 '122J30.591.0s0 7-664.640-416 5-346-583-975 I,000,000,000 9.485.465.483 t0,42t,399,819 (36.428J71.617) 4-814- 160-99? 102.836.600.000 t-563-924.635 ,65.t10 ffi231,736 86J71101.5,16 57
90. Namc of aha B .trk stenddd Chrri.rcd BanL New YorL USA AB Bank lrd.- Mrmboi- India N Nrw India Ihkistan New Yorft OBU ChibonL N.A.- Ncw York- USA Hibib Americrn B.nk. Ncw York USA ICICr B,nk l-td Mumbai India IP Morrm Chrrc Bsnk N.A.- Ncw York USA strnderd chrrt rEd B.nk Kdh- Indi. thfll India Brnd'E S"rdi Frrn.i nivrdh Crmn u B'rrt AG Frtnlfirrt- GenneN Btnk Brllk Batlk of Toli,o-Mitsubishi- JPY Brnk PJSC United Brnt Limited. Ikrachi- P.kiltan Krnroml Brnk Zurich Switzerlrnd zmlr B.l.Ecc TvE ritt Cu.ftmy Southcast Brnk Limited As .t 3l t ecember 2019 tnr) Rrae Erchargc I.L. EquivaLrt othcr b.[k&Ou6idc BrDgl.d..h (Noltro A.coutrl) FC AmorDt Rri. Erctrng. Trkr EquiwLrt Anndlrc-C rc 83.m ftri1lFiIl 8t5 45 309 551 4lot 67.12170o 155 83 137.769.754 t49-t99 540-044 83 90 95 52 84.90 708-9?8 ,!S 992 604 USD q) ACUD t.u2-071 8190 5t9 3-694-384 I 257 X4l 79.5617111 2 118 895 29.t6036/ 27-900-081 7' St2 S9l 69162121 14.295-848 t7s.69a 52t 501 135 4-t44-&4 5-025.353 t6?lt l2s I 485 4t1 L76/-TSAJU) 30-091-175 3o8.6n.0i 4 588 EUR USD USD t3 90 t100 84.53 595 859 AIJD SAR lIIrtl USD 21.921 3 ,14-033 l-518-336 l7 ACIID FN
91. Annexure-D Southeast Bank Limited Detrils of Lergc Loen As at 3l December 2019 Number of clients Amount of outstanding advances (Amount in million Taka) Amount of classified advances (Amount in million Taka) Measures taken for recovery (Taka) 2019 20lE 33 133,009.10 139,088.20 34 NII NIL NIL Nil Client-wise break up is as follows: Oubtrndlng rs at 31 Ihccmbcr 2019 st. no. Non Fonded l6t I ) 0ubtrndlng es et 3l Deccmber 2018 Neme of clients 1 ACS Textiles (Bangladesh) Limited and its relatal cnneem Bashundham Croun 5 Capital Banani One Ltd. and its related Eundsl 00 Totel Funded Non Totrl 747.40 5-995 20 3,335.40 2,088.90 4,222.90 4,240.00 1.40 4,241.40 820.70 1,960.80 2,781.50 I 4,087.40 1.40 concem Fashion Ltd. and its related 6 7 Spanow Apparels Ltd. and its related concems Gmmeen Phone I.imited l0 tl 1) t3 7,644.90 7 49810 R 9 I 1,52t.30 I 526.20 254 Aaron Denim Limited and its related concems SO 3,1 I 1.40 3 t?8 s0 I 1,005.50 4,116.90 2,719.N , L ,'67 0n I -389. I 0 loa on t1 N. IR Darlav Grnrrn Iftl end if-s rclrtFi cnncf,ms R Croun ts 20 and @D) 2,7t4.50 I ?7? 50 t 851.70 3,570.70 2 462 lO l-995.10 5,434.40 1,120.50 oA6)n 3 I18.30 4 507 40 7rls50 1 116 An ?s9 so 1 09t 40 2 424.90 4 4116)_O I 256 90 4.524.30 L)A7 60 O56 40 2,1 88.30 ?n6 80 oso Mother Steel 8,093.80 1L)O7,n -495.80 Fabrics Limited and its related concems KDS Groun 6,572.50 503 40 I 14 l5 l5 3,976.t0 I off) ?o l8t 40 lol 3 7t9 (x) 6 sl9 40 nral 60 tt lo9,10 4 505 30 a 1n9,70 30.00 s,464.40 5,082.90 5,082.90 883.90 2,004.40 1,275.60 2,772.00 2 to Ff',ilifi-fifl 2t Housing Estate Limited and iB 22 Asian Apparels Ltd. and its related 23 24 Snowtex Outerwear 2, 70 2,422.60 5,177.30 25 Fashions Limited and its related 26 )7 Newene ('*nrrn 4,368.40 LAS' AO 1,902.60 6,271.00 2,059.50 l7 La7fl'tn L lA1 RO 1 )9 Raqhrrndhara 30 KSRM Steel Plant Ltd. and its related concems 1,381.80 3l 32 Vertex Groun Shanin Groun t-574.90 ?? IVfncrmq Khafirn Oil end Ges Comnanv .inifed L)1) I 7t6 )O 00 47 70 2,211.40 3,593.20 1,s36.40 1,088.50 2,624.90 285.30 1,987.50 r,431.80 1,241.90 2,673.70 18470 Tertilp fndrrcricc I td 34 I 6S6S0 ?s RO 71600 AI nO )*, Totrl 91
92. Particulm Motor rehicls TOTAI , Fumihrrc md fixhres F.lec+riml Amlimceq rs it 3l lleember Frrmifrre md fixhrres Motor rehicles Brl.ne ' 2019 as at Balance rh. Ptri.vl during Additions rIrlr) 7) )7) M'' I Jm 2019 I l-01' tt- I Southeast Bank Limited Disposal m'rvl during the ?l rl ?r4 I ?7 105 toR ltr6 4Ro Balance as at Dee ?Ol0 of )Il0/^ Rate l1OO7n Li) liL irl tlR,nl67 as at Balance Schedulc of lixed assets including prcmiscs, furniturc and fixturcs As at 3l December 2019 Cncl,/R*llrrrfion Revalued during lhe wear flt0\ 1067 000) 16 56? s2 during 33_988-945 445,368 445J68 505 04I trtr*,rtt;iltt I for disposal Adjustnert 1l De 2Ol9 as at Balance 58 855 ))7 !t 2-691-465-7i,/ d? I l2 /tO* 149-tln-(t( 7 to6 0)6 166 05lt 528 duinc the ffiio.l t-993 438 38t 502) 16 111375-177l l1 llt (9 557 91 5\ 557 9t 5\ 19 a2&&5S-(in bL{*tt Annexure-E Written 5R ORO 77' down value as at Dec ?OlO 1l 1 742-292 7&.2v2 utr:lrtir
93. Annexure 'F Southeast Bank Limited Names of Directors and their interest in different entities sl. no. I 2 Name Mr. Alameir Kabir. FCA Mrs. Duluma Ahmed Status with the Bank 4 Mr. M. A. Kashem Mr. Azim Uddin Ahmed o/o Vice Director Director Mutual Food Products Limihd Mutual Milk Produos Limited Mutual Tradins Co. Limited Rose Comer (Pvt.) Limited Mutual Food Products Limited Mutual Milk Ptoducts Limited Mutual Trading Co. Limited AD Holdinps Limited Rose Comer (Pw) Limited Bengal Tradeways Limited CHB Buildine Technoloeies Limircd of Position Shareholdings Chairman Nit 3t.78% t6.00% Chairman Chairperson 3 Names of lirms/companies in whlch lntcrested as proprietor/ director/ mrnrging ogenU guerantor/ employee/ partncr, etc. Direotor 12.960/o Chairman Managing Director 50.00% Chairman & MD Chairman 7130% Director Managing Dircctor Director 20.00o/" 44.780/o 52.00o/o 0.50o/o 6 Mrs. Jusna fua Kashem Mrs. Rehana Rahman Director Director 7 Mr. Md. Akikur Rahman Director Nil Independent Nil 5 8 9 l0 ll Mr. Syed Sajedul Kairm Director Dr. Quazi Mesbahuddin Independent Ahmed Mr. Mohammad Delwar Husain Independent Mr. M. Kamal Hossain 74.6t% 25.000/o Nil Director Nil Director Managing Director Nil 93
94. Annexure-G Southeast Bank Limited Islamic Banking Branches Brlrnce Sheet Asat3l December2019 Note 2019 20lE Taka Teka PROPERTY AND ASSETS I Cash In hand (including foreigr currencies) Balance with Bangladesh Bank and its agent banks (including foreign currencies) 263,677,t74 150,219,956 1.398.153.335 1,661"t40,509 Belance with other brnlrs rnd financial institutions 2 In Bangladesh Outside Bangladesh 1,008,357,038 1,00Er57,03E Money at call and on short notice InvestmenB in shares and securi6es 3 Government Others Investments 4 General Investnents etc. Bills purchased and discounted Fixed asscts including premises, furniture and firturcs Other assets Non - brnking rsscts Totel essets 5 6 24,709,206 1,568,842,060 7 1,001,916,667 25,338,77t 33,958,174 LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, finrncial institutions end agents 8 Deposits and other accounts CunenUAl-wadeeah current accounts and other accounts Bills payablc 2,050,246,536 107,742,717 2,165,717,779 Savings bar*/Ir,ludaraba savings bank dcposis Fixed depositVMudaraba fixed deposits E2,297,118 2,007,450,494 t7 Other liabilities Total liabilities 9 :- 2,2t4,6t6,47s 2,176,523,430 2490t313,220 22,17EA05,018 OFF-BALANCE SHEET ITEMS Contingent lirbilitics Acc€ptances and endorsements Letters ofguaraatee Irrevocable letters of credit t0.t 1,0t9,395,407 10.2 r,039,498,731 Bills for collection 10.4 I0.i 989,534,786 1,652,806,086 Other oontingent liabilities 4r0r135,009 Total contingent lirbilities Other commitments Docume,ntary credits and short term trade-related tansactions Forward assets purchased and forward deposits placed Undrawn note issuance and rwolving underwriting facilities Undrawn formal standby facilities, credit lines and other commifinents Total othcr commitments Total off-balance shect items including contingent lirbilities 94 l, 1,846,759,405 2,285,549,994 1,267,760,650
95. Annexure-G .1 Southeast Bank Limited Islamic Banking Branches Profit and Loss Account For the year ended 31 December 2019 Particulars Note Profit on investments 11 Profit shared on deposits and borrowings etc. Net profit on investments l2 Commission, exchange and brokerage Other operating income 13 14 2019 2018 Taka Taka I 7 El9,67l,3ll Total operating income (A) Salaries and allowances Rent, to(es, insurance, electricity etc. Legal expenses Postage, stamp, telecommunication etc, l5 t6 79,167,097 53,195,625 19,500 17 Stationery, printing, advertisements etc. t8 9,387,814 5,384,739 Depreciation and repair ofbank's assets 19 7,169,372 Other expenses 20 27-784.283 885,134,073 75,385,417 45,010,784 g,186,790 4,555,279 7,413,100 30.769.313 1E2r108,430 637,562,EE1 Total operating expenses @) Prolit before provision (C=A-B) Provision for investments General provision Specific provision 9.1 Provision for oftbalance sheet items Provision for diminution in value of invesfinents 9.2 (27 171,320,583 713,813,390 4,352,235 9.i 133,540,958 Total provision @) Total profit before tax (C-D) 504,A\923 95 (E85,673,204) 1,599,4E6,594
96. Annexure-G .2 Southeast Benk Limited Islemic Banking Brenches Notes to the Financial Statements As at and for the year ended 3l December 2019 Notc I 2019 201t Teke Teke Cesh In hand: Local currency Foreign currencies 148,326,584 l-893-371 263,591,679.61 8s-494 263,677,174 Balance with Bangledesh Bank: Local currency r50219,956 1,398,101,826 Foreigr currencies Balancc with Soneli Local currency Brnk Linited (es agcnt of Bengladcsb Bank): 61,509 5.585.532 1,063,945,753 1J9E,163J35 1,661r405D 1.1 1,214,165,709 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with section 33 of the Bank Companies Act 1991, MPD Circular nos. 4 and 5 dated I December 2010 and MPD Circular no. I and 2 dated 23 June 2014 and l0 December 2013 and DOS Circular No. DOS Circular no 26 dated 19 Ausust 2019. I dated 19 January 2014 and MPD Circulars No. I dated 03 April 2018 and The statutory Cash Reserve Ratio on the Shariah-based Islamic Bank's demand and time liabilities at the rate of minimum 5.0% on daily basis and 5.50% on bi-weekly basis been calculated and maintained with Bangladesh Bank in currcnt account and 5.50% Statutory Liquidity Ratio on the same liabilities has also been maintained in the form of tseasury bills, bonds and debentures including excess cash reserve balance with Bangladesh Bank. Both the rcserves maintained by the Bank are in excess of the statutorv requirements. as shown below: 1.1.1 a) Cosh Resene Ratio (CRR) for Islemic Benking Required reserve (5.50% of average Demand and Time Liabilities) 1,155,277,695 1,007,891,950 1,155,277,695 1,007,891,950 Actual reserve held (Average daily on bi-weekly basis): Surplus b) Statutory Liquidity Retio (SLR) for Islamic Benking Required reserve (5.50 % of average Demand and Time Liabilities) l3l Actual reserve held Surplus Held for Statutory Liquidity Ratio of Islamic Banking: 150,220,000 Cash in hand Balance with agent bank (Sonali Bank Ltd.) as per statemert Excess cash rescrve Government Securities (HTM) 2 36,000 242,824,131 Balence with other banks and financial institutions 2.1 In Bangladesh eutsid6 lenghdssh 96 5,s72,000 50,468,271 970-000-000
97. Note 2 .1 2019 20r8 Trkr Trkr In Bangladesh Current account with: Sonali Bank Limited 74 740 Short term deposits account with: Sonali Bank Limited 1,134 EXMBankLimited 8.355-164 1,134 505.379.124 8J56,298 505r80,258 Fixed deposits with other banks: Social Islamic Bank Limit€d s00 000 000 __$ggJ5zp!g_ 3 3.1 9s0,000,000 1.734-772.344 970,000,000 3.244.853.863 2,684,772344 4214,t53,863 1,734,772,344 3,244,853,863 Others Sharcs in listcd companies Shares in unJisted companies (785,507,639) Provision for diminution in the market value of shares 3.2 1.09!igg,22g- Investments in sharcs and sccurities Bangladesh Government Islamic Bond Others 3.1 [m 949264J0s (621,210,215',1 2.623.643.648 Investments classified as per Bangladesh Bank Circular Held to maturity (HTM) Other securities 3.3 Cost and markct valuc of invcstments 3.3.1 Governmentsecurities 950,000,000 t-734.772.344 970,000,000 3.244.853.863 2.684.772344 4.214.853.E63 2018 Taka Market nrice Taka Teka 950,000,000 Bangladesh Govemme,nt Islamic Bond 3.3.2 Market orice Others (Invcstment in shares) 2018 Market orice Cost nrice Takr Taka 949264,706 Shares in listed companies Shares in un-listed companies @- 97 1,734,772,344 Cost orice Take 3,244,853,863 @-zs,F6r
98. Notc 3 .4 2019 2018 Taka Taka Markct pricc, cost pricc and reloted provision of invcstments as on 31 Deccmber 2019 SL No. trrttt?lit?-i 20t9 Nome of thc Company @rovlslon to bc Cost pricc I 3 ACME Laboratories Limircd AFC Asro Biotech Limited Aftab Automobiles Limited AMAN Feed 177.681.840 l7 lrtl 5*0 162.952.332 36.946-327 145,359,t92. l-imited n 28t 0rs Aoex Food Ltd Arqon Denim l-td 1t 476051 17,633,331 9-581-913 22 67s 925 Bansladesh Shinninq Comoretion Limited lo 469 2SO 30-991-307 I 3 0S0 872 10 Barka Power ltd Bashundern Paner Mills Limited 53.299 2t4 4 140 000 80-616-388 11 647 591 ll BBS Cables Ltd 3 234.OOO 15 561 747 27 972942 3.001.152 65.O49.432 7 019 678 43.612.432 G.878.145 ll6.9M 47 410 23.687.937 455 746 5 u 9 t2 BDCOMltd t4 BSRM Mills Limited l5 Confidence Cement Ltd t6 COPPERTECH LTD Steel 17 Doreen Power I-td l9 F-souire l4-788-955 222.000 Knit Comnosite Ltd 732.687 20 EXIM Bank Ltd 21 Gener Infosvs I-td ),7 164.s8s.570 26.390 l5-789-619 Global Heaw Chemicals Limircd Cmldm Heroest Aro indrntries I-td l7 3l 534 550 158 017 INTRACO Retuelins Station Limited K attali Textile I -imited Khulna Power Comoanv Limited 28 Lafaree Holcim Bandadesh Limited 25 30 5-515-678 t.tt2 2t-293-005 40.320.000 4.203.753 vleehna Pefioleum Limited M.TL Benqladesh Ltd 11.29.050 i9 t6 848 63.372 NEWLINE Clothins Limited 34 35 12.375.000 YMPICLimited 9.556.184 Padma Oil Comoanv Limited 671.1 38 is 40 RSRM l0 24-tO5-663 25.681.082 Premier Cement Ltd Lrmlted 4t 376,018 t5-587-000 42 Saif Power Tec Limited Rolled Steels Ltd 44 SEa Pearl BeaCh Resort & SDa 7 161,751 limited 46 47 446-556 243.076 Steel Actual provision SurpluV(deficit) 98 7
99. Note 4 4 .1 20t9 2018 Tekr Teke Investmcnts Investsnents 4.t Bills purchased and discounted 4.2 17,598,332,455 36r.459.608 |s,327,6t3,6t6 -!!-E2,?2Zg63- -.Er6g4J9?.s01- Investments In Bangladesh Demand Investnent Bai-Muaji al (Time) Investment Bai-Muajjal Time under CCS 888,48r,948 392,827,368 82,92t,352 Bai-Murabaha-BLC Bai-Murabaha-LTR Bai-Salam @ACKING CREDIT) Staff House Building Inveshent Export Development Fund @DF) against LC Investnent against Cash Inceotive 22,294 t,057,138,547 82,261,921 t3,548,440 674,178,978 3,37r,439,522 1t0,999,291 1o.924.512.794 Murabaha - Investrnent Hire purchase - Investnent Outside Bangladesh 1,193,826,782 t49,t33,3t4 16,635,522 773,063,701 i-: 3,833,616,t44 617,028,554 7.923.165j32 17,59t332,455 15,327,613fi16 17.s9t332.4s5 13327.6t3$16 Bills purchased rnd discountcd h 357 Bangladesh Outside Bangladesh 5 79,622,265 17,13 1,016 Bai-Muajial - lnvestnent 4.2 528,987,815 195,402,971 Fixed assets including premises, furniturc and fixturcs Cost: 25,664,38t Fumiture and fixture Office Appliances Electrical Appliances Motor Vehicles 8t,620 81,620 30,626,923 2,620,000 29,402,923 2,620,000 ATMBooth Lcss: Accumulatcd deprcciation Fumiture and fixrure Office Appliances Electrical Appliances Motor Vehicles 13,662,54s 81,619 23,328,010 2,183,342 ATMBooth Written down value as at 6 3l 81,618 21,886,863 t,659,346 ll Decernber Classification of othcr assets i) iD iii) Stationery, stamps, printing materials, etc. Advance rent and advertisernent Interest accrued on investnent but not collecte4 commission and brokerage receivable on shares and 770 25,203,392 iv) v) debentures, and other income receivables Security deposits Preliminary, formation and organisational expenses, renovation, development and prepaid expenses 9,008,686 69,460 631,241 69,460 vii) Suspense account 8,778,327 1,755,520 12,859,073 1,676,6-60 viii) Silver lx) X) 1,519,984,1I Head office general account Others 99 I 15,53s,825
100. Note 7 2019 2018 Trke Takr Borrowing from other banks , financiel institutions end agents In Bangladesh Ouside Bangladesh 7.1 f--_-l 7.1 In Banqladesh Secured Borrowing against securities from Bangladesh Bank Unsccured L401.916.667 8 Deposits and other accounts Al-wadeeah current accounts and other accounts Al-wadeeah current deposic Foreigr currency deposits 585,002,713 234,s96,83s 998.136.827 Sundry deposits 1,817,736,376 480,070, l r3 t68,005,202 1.402.171.221 2,050,246,536 Bills payable Payment order issued T.T. payable 107,609,251 80,630 Demand draft 52.836 Mudaraba savings bank deposih 82,164,252 80,630 107,742,717 52.836 82,297,718 2,165,717J79 2,007,450,494 Mudaraba fixed deposits Mudaraba fixed deposits Mudaraba Special notice deposits 14,1t2,403,140 1,396,932,809 1,574,720,000 Scheme deposits Interest Payable on FDR./Scheme 519,691,322 1,005,212,686 224.s79.694 15,861,886,841 20001,881588 9 Other liabilities 9.2 Profit suspense account 30,484,290 s87,803,023 862,722 Accrued expenses Accounts payablc - Bangladesh Bank Accounts payable - others Provision for diminution in the market value of share Unearned income Head offrce general Account withholding tax 9.1 367,40t,062 9.1 Provision for investnents Provision for off-balance sheet exposures 9.3 3,726 4,205,700 785,507,639 334,006,098 58,384,916 120,629,304 70,443 5,955 t,774,777 621,210,215 380,676,896 s6t,325,472 A. General provision for investments Balance as at I January Provision made during the year t12,678,7s0 109,234,075 t8-896-392 3.444.675 112,678,750 131,575,141 Adjustnents made during the year Balance as at 31 December 100
101. Particulars Note 2019 2018 Teka Takr B . Specific provision for investments Balance as at I January Recoveries of amounts previously written Provision made during the year 254,722,312 off Adjustnents made during the year Balance as at 3l # December C. Total provision on investments (C=A+B) 9.2 1,163,547,260 39,264,573 303,610,553 1,202,E11,833 o1.752.232\ 281J58320 (948.089.521\ 413,433,462 367,401,462 58,384,916 54,032,681 5E3E4,916 o7.900.6261 58,384,916 254.722.312 Provision for off-balence shcet exposures Balance as at I January Provision made during the year 4.352.235 Adjustnents made during the year Balance as at 9.3 48,888,241 3l _lq$d.reo December <fl.1*4.o16 Provision for diminution in the market value of share Balance as at I January Provision made during the year 62t,210,215 l@.297.424 566,590,808 785,507,639 621,210,215 785507.639 621.210.215 54.619.407 Adjustrnents lnade during the year Balance as at 3l December 10 Contingent liabllities 10.1 Acceptances and endorscments Acceptance under Acceptance under Irtters ofcredit - Import ktters of credit - Export 429,264,253 l3 54 626,409,22t r.079.772.962 1,019J95,407 10.2 1,706,1E2,184 Lettersofguarantee Local 904"402,731 Foreigrr 1,507,850,405 33 _!,999J2qgL -!,g1gJ5&!95- 10.2.1 Balance for which the Bank is contingently liablc in respcct of guerentec issued favouring: Directors or offlceni Government Banks and other financial institutions Others 10.3 1.039.498.731 t-846-759-405 1846.759.405 lrrevocable lettcrs ofcredit (L,/C) 427,231,858 562302.927 Back to back UC Others 991,945,659 989,534,7E6 10.4 Bills for collection 642,129,455 l-010.676.631 1.652.806.0t6 local Foreigr 101 637,248,073 630.512.576
102. Note 11 . 2019 2018 Teke Tekn Profit on investment Demand investnent B ai-Muaji al ([ime) investment Bai-Muajjal time under CCS 783 t14,298,087 t0,032,773 23,067,695 1,460,707 4,818,214 129,255,381 9,020,244 Bai-Murabaha-BlC Bai-Murabaha-LTR Bai-Salam (PACKING CREDI) Staff house building investnent Investnent against cash incentive Bai-Muaiial - Investnetrt 156,847,090 7,396,112 Murabaha - Invesfurent 12,071,830 Profit on special term deposit STD Bills purchased and discounted lnterest on FDR lnterest Income Form NOSTRO ACCOUNTS (USD) Inter branch profit income 1,948,784 339,377,788 26,208,793 823,906,796 3,476,40s 48,771,798 57,816,61l 350 857,945,183 280,283,575 4t,775,746 272,778,245 35,504,446 1,102,246,206 3,938,989 896,801,767 1,897,963 3 1 -587-899 1-512iln-nil 68,783 44,359,133 82.46s.347 n$qilfi69 Commission, exchsnge and brokerage Commission and brokerage Exchange gain 14 I Profit sharcd on deposits and borrowings etc. Profit shared on deposits (slamic Banking Branch): Mudaraba Savings Deposits (MSB) Mudaraba Short Term Deposits (MSTD) Mudaraba Fixed Term Deposits (I FDR) Profit on foreign bank accouuts Profit on Re-finance borrowings 13 8,590,85 t66,230 2,046,929 32t,282,687 Hire purchase - Investment 12. 36,337,3t6 t36,412,367 I 19,684,128 Other operating income 47,318 s,997,988 Remittance fees Service and incidental chrges Other fees-telephone and postage lncome from retail banking Other fees - SWIFT 3,000,463 20,9W 13,074,012 6,833,387 3,051,706 73,000 13,844,029 Miscellaneous income 15 Salaries and allowances Basic salary 26,790,382 Allowances 6,400,767 Bonus 40,988,179 24,305,639 6,456,643 Provident fund 16 Rent, taxes, insurance, electricity etc. 34,253,316 Rent, rates and taxes Insurance Eleotricity and lighting 14,837,843 102 11,837,732
103. Note l7 2019 20r8 Trkr Trkr Postage , strmp, telccommunication etc. Postage Telephone /Telex 258,226 VSAT on-line 1,700,220 265,864 1,994,914 1,018,300 1,297,330 1,34E,659 1,602,590 r,7t2,714 SWIFT services 18 Stationery, printing, advcrtiscments etc. Geireral oflice stationery Printing and security stationery Publicity and advertisement Figures ofprevious year have been rearranged to conform the current yea/s presentation 19 Depreciation and repeir ofbank's asscts Depreciation: Fumiturc and fxtures Electrical appliances Motor vehicles 523,996 t-o87-923 4,563,169 ATMBoolh 524,004 Repeir: 488,715 788,790 239,189 Fumiture and fixtures Office and elcotical appliance Motor vehicles Repair, maintenance and utilities 497,864 1,198,035 277,694 924.365 2,tg7,git 7,413,100 20 Othcr cxpenscs Security and cleaning Entertainment 8,r86,069 t,932,0t8 t,466,620 Car expenses Books and periodicals 6,235,940 42,880 6,398,613 Donation lncluding CSR Travelling expenses 89,050 166,963 36,820 55,90s 326,s68 Conveyance Petol,oil and lubricant Uniforms and apparels l,oss on sale of fixed assets Expenses relating ATM services Expenses for CIB report Expcnses regarding retail banking IT cnabled services Gratuity and others 287,994 347,42t 3t2,575 246,328 tot,673 104,398 380,035 328,7t3 14,551 758,293 316,t74 8,720,251 Others operating expenses 103 5,920 951,157 474,279 8,961,162
104. Annexure-H Southeast Bank Limited Off-Shore Banking Unit Bengtodesh Belance Shcet Asat3l December2019 2019 USD Nl ?t?! 2019 Tntn 2018 Tnke PROPERTYAND ASSETS Crsh In hand (including foreign currencies) Balance with Bangladesh Bank and iu agent banks (including foreign currencies) Balances with other banks and financlal institutions In Bangladesh Outside Bangladesh 3 Money at Call and on shorl notice Investments 6,574,878 I 717 390 558,207,179 145 806 474 I 10,004,898 9,2y2,269 704,01r,613 190,741,482 10,000,000 849,000,000 839,000,000 RO 7?l( 5R5 Government Others Irans atrd advences [,oans, cash credit & overdrafts etc. Bills purchased and discounted 4 Fixed asseb including premises, furniturc end fixtures Other esscts Non-banklng assets Total 64,404,550 5,467,946,281 153 958 856 t7 071 to? 690 218,363,415 13,847 18,1t9,0s1,971 5 6 214,103 t8,l'17,339 mrffiFrrB essets 1,17s,649 20-ttt-420.s72 5,225,441,312 5 5l I 827 903 11,744,269,214 1,299,197 16,32s,091 12.791.634.985 LIABILITIES AIID CAPITAL Liabilitier Borrowings from other banks, finencial instituffons rnd.gents 211,900,000 17,990310,000 7 11,955,750,000 8 Deposits and other rccounts current accounts and other accounts Bills payable Savings bank deposits Fixed deposits 9 Other liabilities Total liabilities l8 909,2ss,020 6,538,058 485_082 41.183.492 34-093-501 11,194800 9g),t88'512 10,709, 5,688,731 228.783.531 476.701.201 19.417.U9,713 265.977.326 12,262.358,98s CapitaUsharcholders' equlty Paid up capital Statutory reserve Other reserves Foreigr currency losses Retained earnings IO 8.100.104 693-970-859 529.276-000 Total shareholdcrs' equity Total liabilities and sbareholders' equity -23689t53!L -2oil!,429,91L OFF.BAII\NCE SHEET ITEMS Contingcnt liabilities Acceptances and endorsements l,etters ofguarantee Inevocable letters of credit 33,98s,976 Bills for collection Other contingent liabilities total contingent liabllities 2,88s,409,358 176,671,092 176,671,092 Other commitments Documentary credits and short term trade-related transactions Forward assets purchased and forward deposits placed Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities, credit lines and other commitments Total other commitments Totel olT-balance sheet items including condngent ltrbilities -104 33.rg5e75- 'Ess/oq5ss-
105. Annexure-H .1 Southeast Bank Limited Off-Shore Banking Unit, Bangladesh Profit and Loss account For the year ended 3l December 2019 Note Interest income Interest paid on deposits and bonowings etc. Net interest income Commission, exchange & brokerage Other operating income il t2 13 ti.t Total operating income (A) 2019 2019 2018 USD Teka Taka 9,338,728 (7-155-899) 673,202,880 (499.561.684) 4 615.31E 51.9E1,561 45,268310 2,797,147 236300,750 218,909,506 t4 l5 55,533 11,662 4,69l,3gg 4,441,390 985,212 1,059,615 Postage, stamp, telecommunication t6 16,036 1,354,717 Stationery, printing, advertisements etc. Depreciation and repair ofbank's assets Other expenses l7 2,390 2,898 Salaries and allowances Ren! taxes, insurance, electicity etc. Legal expenses Total operating expenses (B) Operating prolit (C=A-B) Provision for loans and advances General provision Specific provision Other provisions t8 l9 9.2 Total provision @) Total profit before tax (C-D) 244,816 5.030.966 59.553 148,072 12,508,981 2.649.075 9.1 20t,882 _223,191@_ _20228&gg3- 800,247 67,941,000 36,200,000 800,247 67,941,000 36"200,000 67,941,000 155,850,769 35.964, 171,323,967 800,247 1,848,828 105 l,105,281 129,332 263,905 4.622.300 11,620,824 o35.284\
106. Annexure-H .2 Southeast Bank Limited Off-Shore Brnking Unit, Bangladcsh Notes to the Financial Statements As at and for the year ended 3 I December 2019 I Status ofthe unit Off-shore Banking Unit (OBU) is a separate bpsiness unit ofSoutheast Bank Limited, govemed under the Rules and Guidelines ofBangladesh Bank. The Bank obtained permission to operate OBU vide lrtter No. BRPD(P-3F44(9D|2005-2213 dated June 24, 2008. In the mean time as per BRPD circulu # 2, daled 25 February 2019 we have already applied to Bangladesh Bank for conducting OfFshore banking in Bangladesh on l0 July 2019. Presently the Bank has 2 (201 8: 2) off-shore banking units - one at Dhaka Export Processing Zone and the other at Chittagong Export Processing Zone. OBU boosts up foreign trade by extending finance to industrial units inside and outside thc Export Processing Zone (EPZ) area. OBU is free to make loans/advanccs to persons/institutions not resident in Bangladesh and to make loanVadvanccs to T]rye-A (wholly foreigrr owned) units in the EPZs in Bangladesh. Industrial units outside the EPZs and Type-B and Tpe.C indusrial units within thc EPZs in Bangladesh may avail term loans in foreign currencies from OBU subject to compliance with the guidelines issued by the Board oflnvestnent for borrowing abroad by industrial units Bangladesh. 2 Slgnilicent sccounting policics and basis ofpreparations 2,1 Basisofpreperation The financial statements are prepared on the basis of a going concern and represent the financial performance and financial position of the OBU. The financial statements of the OBU are prepared in accordance with the Bank Companies Act 1991, in particular, Banking Regulation and Policy Deparfiient (BRPD) Circular No. 14 dated June 25, 2003, other Bangladesh Bank Circulars and International Financial Reporting Standards (IFRS). 2,2 Foreign currtncy Items included in the financial statements are measured using the curency ofthe primary economic environment in which the entity op€rates, i.e., the functional currency. The financial strtements are presented in Taka which is the Bank's functional and presentation currency. Figures appearing in the financial statements have been rounded off to the nearest Taka. Assets & liabilities and income & expenses have been converled into Taka currency @ US$l = Tk. 84.9000 (closing rate as at 3l December 2019) and Tk.84.4792 (avenge rate which represents the year end) respectively. 2.3 Basis of Accountlng OBU maintains its accounting records in USD from which accounts arc prepared according to the Bank Companies Act, 1991, Bangladesh Financial Reporting Sundards and other applicable directives issues by Bangladesh Bank. 2.4 Functional and presentatlon currency The Financial Statements of OBU are presented in both USD and Bangladesh Taka (Taka/Tk.) except as otherwise indicated. Financial information presented in Taka and USD has been rounde.d off to the nearest integer. and financial information presented in USD has been rounded inlo two decimal points. 106
107. Note 3 20t9 2019 201E USD Trkr Taka Balerce with othcr brnks rnd financlel institudons In Bangladesh Outside Bangladesh 3 .t 6,5?4,878 1.717.390 3.2 558,207,179 145.806-434 I 10,004,898 80.736.585 7040r3,613 3.1 In Bangledcsh Southeast Bank Limited Other commercial bank 6,574,878 558,207,179 I 10,004,898 sJ8,207,179 3.2 Outsidc Brnglrdcsh (currtnt rccount) l-7l73ln Standard Chartered Bank, New York 80.736.s85 Money at call and on short notice In bank; Placement SEBL Head Offrce 839,000,000 Modhumoti Bank Limited BRAC Bank Limited 2,000,000 5,000,000 3-000.000 Jamuna Bank Limircd lo,ooo,u)o 4 169,800,000 424,500,000 2s4 700 000 849,fit0.m0 &t9,000,000 5,467,946,281 13.071.107.690 6.5 I 8.827.903 Loans and advances Loans, cash credit, overdrafts etc. Bills purchased and discounted 4.1 4.2 64,404,ss0 I 53-958-866 1E,539,053,971 4.1 Loans, casb crcdlt, ovedrafts 5,225,44t,312 11,7U,269,214 ctc In Bangladesh 64 4()4 550 5.467.946.281 5.225.441.312 Time loan 37,305,242 3, Term loan 25,492,124 2,t64,281,315 45,703,062 2,479,755,489 2,546,545,580 Outside Bangladesh 4.1.1 4,1.1 Outside Bangledcsh Advance-LTR Loan against foreign bill 4.2 538,316 ',21s,087 7 80,1 10,992 lt Bills purchased and discountcd In Bangladesh I Ou*ide Bangladesh 5 r107t 1o7590 6 sr 8 827 903 1,457,980 3,41't,250 f ired assets including prcmlscs, ftrrnlture and futurcs Cost: 40,730 Fumiture and fixtures Electrical appliances 1.851.389 5,268,639 kss: Accumulateddepreciation Fumiture and fixtures Electrical appliances 29,572 2,51O,672 2,273,891 r.7s2-tt6 I 4.2e2.744 Written down value as at 3l @. Docember 107 l,294t,l97
108. 6 Other asscts Interest on calls and placements (USD) Prepaid management fec GCPF Interest Receive Bills purchase/Discount Insurance Advance oflice rent others 7 20,582 105,336 1,747,406 8,943,000 85,652 7,271,885 4,870,862 11,254,793 96 8,154 7,443 2,397 203,542 3-352 180,270 11 721 39 Bonowing from other batrlrs, lltrancial institutions and agcnts Borrowings Borrowings Bonowings Borrowings Borrowings Bonowings Borrowings Borrowings Borrowings Borrowings Borrowings Borrowings fiom CBQ 17,500,000 from GCPF from RAK Bank,UAE from FGB, UAE from ADB fiom NBM Bank, Nepal from SCB, Singapore from EIB, UAE from FM HDFC Bank,Hong Kong from ADCB, UAE from DBS BANK LTD. from NOOR BANK UAE Borowings from Head Offrce 10,000,000 6,500,000 1,485,750,000 1,698,000,000 849,000,000 551,850,000 10,000,000 26,500,000 8,500,000 2,249,8s0,000 721,650,000 20,000,000 t5,000,000 8,000,000 13,500,000 6,800,000 6S 600 000 211,900,m0 E 8.1 10,709,718 I 25R 500 000 17,990.310,000 909,25s,020 6,538,058 14 0S? 60t Curnent deposlts 4,134,755 ?,149 351,040,692 6,5?4,8-78 558,207,179 84 Cunent A"/C USD-Resident FDD Payable Sundry crcditors 4,954,608 t -583-450 Other liabilities 917,526 Accrued intercst on borrowing others bank Interest payable-CBQ Loan Accrued interest on borrowing from NBM Bank, Nepal 107,922 69,840 Interest payable on RAK Banh UAE Interest payable on FGB, UAE Interest payable on ADB Accrued interest on borrowing from EIB, UAE Accrued interest on borrowing from SCB, Singapore Accrued interest on borrowing FM-HDFC Bank, Hong Kong Accrued interest on borrowing from ADCB, UAE Accrued interest on borrowing from DBS BANK LTD Interest Suspense Provision for unclassified loans and advances Provision for oftbalance sheet exposures 19,640,758 12,556,060 4,sst,575 6,462,631 8.834,995 tt2,s54 t4,994,897 247,659 21,026,265 41,048,677 8,852,594 31,026,848 9,004,848 464,486 365,452 106,064 5,4?l 9.1 9.2 77,897,989 9,162,576 5,929,440 76,121 1,326 483,494 104,271 Accrued intereston borrowing from NOORBANKUAE Accrued interest on FDR 9.1 s77,320,000 5 SOO O40 000 41.183.492 Current accounts 9 1,273,500,000 579,200,000 1,146,150,000 Depositaccounts Current accounts Fixed deposits 8,1 849,000,000 1,678,000,000 1,678,000,000 1,384,350,000 1,2s8,s00,000 839,000,000 419,500,000 2,097,500,000 1,342,400,000 9,968,047 16,110,291 27,293,236 I 8l 925,260 2,2s7,033 78,554,500 32,810,757 185,391,000 I 17,450,000 766711 r.766-7tt I 17,450,000 67 94l.OOO 81,250,000 35.200-000 21.291 1 Provision for unclassified loans end advlnces Balance as at I January Provision made during the year 1,456,785 800.247 2,257,O3t Adjustments made during the year Balance as at 3 I ,. December 108 r.$ na" _!8s.39t-00o_ 117,450,000
109. 9 ,2 Other provisions Pnovlsion for olf-balance shcet erposurcs Balance as at I January Add: Provision made during the year 21,29t 1,766,7n 2,001,995 21,291 1,766,711 2,001,995 kss: Adjustments made during the year Balance as at 10 It _2!2n December o3s.284\ _!ffiJtt Balance as at I January Add/less: foreign currency translation gain(loss) for last year 6,251,276 Addition during the year 1.848,828 8.100,104 155,850,769 593,970,859 3,000,290 253,462,121 1,548 220,267,367 l8 5,956,872 503,23t,744 431,026,422 381.548 32.232-859 43 3,591 529,276,OOO 8.844-089 171,323,967 s29,276,000 Intercst imome otr invcstmcnt income ftom loans and advances on overdraft incomc from bill purchased and discounted income calls & placement (FCY) 9,829 21.899.262 Interest paid on deposits and borrowings etc. Interest on FDR Interest expense on mashreq bank loan Interest expenses 4CPE loan Interest on IFC loan Interest on CBQ loan Interest expenses -ICIC bank Interest expenses -RAK bank,UAE Interest expenses -Bank Musca( Oman Interest expenses FGB, UAE Interest expenses ADB Interest expense on -HDFC BANK HONG Inter$t expense on -SCB, Singapore Interest expense on -EIB, UAE Interest expense on -NMB Bank Interest expense on -NOORBANK UAE Interest exp€nse on -ADCB, UAE Interest expense on - DBS BANK LTD Interest on calls and placement 13 _!,1sJ1t Retained earnings Interest Interest Interest Interest 12 3l Commission, exchatrge 2,898 14,288,517 99.164,755 t,285,440 108,592,919 681,343 57,559,324 38,666,637 60,252,403 12,954,324 455,569 38,486,128 76,779,269 386,394 32,642,218 22,044,233 8,480,808 t79,t9t 440,493 1,223,178 501,368 I 15,137,946 37,212,501 103,333,101 42,3s5,163 251,319 5,471 496,612 462,184 41,953,358 106,064 144 414 96679_167 22,76E 1,923,425 4,234 357,690 108.880 9 198 095 26,448 22,041 2,590 4 454 2,234,271 1,862,036 218,816 376-265 _u5g!2L 21,231,266 30,096,860 699,421 54,429,512 28,447,807 4.530,423 8,960,216 48.723.817 & brokcrrge Commission and other charges 13.1 Otheroperatingincome Other income- SWIFT Miscellaneous income Rebate from trade payments 14 2,323,251 2,208,008 7.302.123 Salaries and allowances Basic salary Allowances Provident fund contribution Bonus 109 t,796,939 202,822
110. 15 Rcnt , tarca, insunncc, electriclty etc Rent, rates and taxes Insurance Electricity and lighting 16 9,597 I t64 810,776 13,855 SOr 150-581 896,478 I 8,53 I 144 606 _!,g!gg!l Postrge, stamp, tclccommunlcation etc. Postage 3,0s7 2,995 Intemet service SWFT charges FC Nosro charges Telephone 5,580 3,909 395 258,262 253,045 479,85t 330,229 3? 110 16,684 260,078 547,280 247,190 i4 050 717 t7 Stationery, printing, rdvertlsemenb etc. Office and printing stationery l8 Deprcciation and repairofba[k's rsseb Depreciation on own assets: Furniture and fixtures Electrical appliances 19 2,470 428 208,640 15 176 2t5,907 47 998 28,810 2,433,815 2,386,283 159 13,430 2,976 842 251,443 71,130 64 s,380 40,346 Othererpenscs Entertainment Ivlanagement fee GCPF Pay Prolection 16,090 Travelling expenses and allowance House maintenance (Executive ) Repair, maintenance and utilities Books and periodicals Conveyance Miscellaneous 478 133 110 4,lll 190,472 61,t20 5,949 46,805
111. PartLrlar ! L€3i: Intcr scxma al incomc/e,ocnsc Totrl Incomc oDarding Daofit (Drofit bcforc unallocded €xDarl!6 ald tax) r. includins d.fcrcd t x Ptovirion rEeinst lo6ns & rdvsmas and oth€B Profit floss) bcforc t.,( t Southcmt Brnk Limited and its subsidiaries mflftni'irrt-ETtl CoDprry (South Afri.r) South.$t Ex.hrtrga Soutl.$a FimDcitl S..vic6 (UK) Ltd T.h C.pild S.rvic.i Limit d Trtr Ofi Stor. BrlliDg TrLr s 066 4E) 4E) 1?2 StC 97.37L944 q, t yt-37L9AA 414-855-3 160lll940 17.711.9Tr sa sl7 6\) (l4.775.6751 160 676 476\ m7(}2CrSl fi5 223.115 ?l? 9/m 221115 Sortl..at Ercl.Dg. Illtr,l'}ffirrlln fb.!ci.l t*2 Annexure-I Toa.l 7)A ,fPn 711 S'f\l 7517)7\ 882 l4-390-720-882 S7X 47 l{3m,72} (5 4.M225.542 6 895 669 013\ 2 508 555 549 fl 422j12114.93 4n3njl.eel) Totrl Teh (5-407 l{ 311.573\ 14-390-720 882 } 5a:2 721 1 6 5,41$ 0i1l 4.&4.225 160313.940 a21l27t1q)\ 1j22.312.711-9.11 2-508J56-s49 895 569 52517.652, It /,!{ I55 971n9qt E7-172988 Sctaic.. (UK) Lad 6\ 97jTL9AA CofrprDy (Solll Afrtc.) Pty Ltd t 14 ?q) 720 882 190 7r0 nt2 TiLr 636 fil7rS 6irsl 74197' 150_313-q|{} 17 tt5 221 1)1lLS fi5-636 d,6\ fis (m702Ets\ 5-066-499 5-()66-499 iaPn Soull .ra Lrd Uril 261t t16 21155.928 5 066 7al s 0116 d9!) TrLt 90 87s 208 SEEL Gcogrrphic.l rnd Bu3irc$ ScgD.rt SEBL (CoDv.Dlionrl & I.hEi. B.rtilg Trtr 216lrn?5Il !:iI:rffflrl 86 919 5-883-350-743 5 883 350-7i13 (25 Tn lSAl 17)6(x4l9l 16t IN;'ID)AOI 3m 7s0 a],61m750 l3-939-349.509 121155.828\ qil 105 437 961 lo5 437 l3 155 8S0 ?69 167-941-000) 13 614 nl L3st.1,6.-698 at t55 20-ttl -4N-572 SEBL C.Dia.I 20-ttL4m-s72 S.rvt .. LtElLd 3qi 157106-593 kovision for n IaL[ic T.L. B.nldng 395- 157-,106J93 ti.lrdh! IrL. m f,75 20t 9\ rI967t 1lt 5 883 350 (20-506-419) la62o2 11.1n i34.876 33,s,o,95r) 108 4301 90-875208 r sM o2t E21 50/-.O2l-921 24 m8 311220 ( 819-671-3 21271 fl 8i, tts (5 0?1A7LS61\ lL 6,to 5I4 Ist r.r5s.614.000) 2 003 035 544 391360513.945 19t :t50 513 945 ( 1 13.377134.475 OBU B.nkirg Coova!aloral ll€cment rrsats P.rliauLI! & advorccs and othcrs S.rmcnt lirbilities Totrl incomc Alloc.tld loans Prs6t rlm.l hef.E t x Prcyision for t x includin! d€fered tax Nct trmfit Sclmcl lirbilitiB 1tl
112. Annexure-J Southeast Bank Limited Reconciliation of net profit with cash flows from operating activities For the year ended 31 December 2019 Particulars Profit before tax as per prolit and loss accounts Adjustment for non-cash items Provision for loans and advances /investments Provision for diminution in value of investnents Provision for off- balance sheet items Provision for others assets Depreciation of property plant and equipment Recoveries on Loans previously written-off Forergn exchange gain(Loss) Sale proceeds ofthe fixed assets Increase/decrease in operating assets 2019 2018 Taka Taka 4,37614001210 4162017671824 4,583,253,727 319,600,000 (389,100,000) 65,000,000 324,740,820 917,012,200 4,855,075,924 9,944,087 17,150,306 413,060,983 (223,800,000) 70,000,000 324,740,820 404,812,584 7,264,394 3,776,352 & liabilities: (29,602,357,424) 222,071,583 2,543,908,363 30,034,109,209 2,183,211,214 (2.074,350,417\ Loans and advances to customers Other operating assets Deposits from other banks Deposits from customers Others operating liabilities Income tax paid (35,928,867,124) (188,674,412) 975,842,788 27,211,136,730 3,134,690,045 Q.172.386.062 Cash flows from operating activities as per cash flow statement -9r5!1r-,847 1',12