Annual Report 2012

Annual Report 2012 2

Auditors’ Report to the shareholders of Prime Bank Limited We have audited the accompanying consolidated financial statements of Prime Bank Limited and its subsidiaries (together referred to as the “Group”) as well as standalone financial statements of Prime Bank Limited (the “Bank”) for the year ended 31 December 2012 which comprise the balance sheet, profit and loss account, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies, other explanatory notes and information.

Management’s responsibilities for the Consolidated Financial Statements

Management is responsible for the preparation of consolidated financial statements that give a true and fair presentation of these in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) as explained in note 2, the Bank Companies Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994 and other applicable laws and regulations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and the financial statements of the Bank.

The financial statements of the Bank’s five subsidiaries, namely Prime Exchange Co. Pte. Ltd. (Singapore), Prime Exchange (UK) Ltd., PBL Finance (Hong Kong) Ltd., Prime Bank Investment Ltd. and Prime Bank Securities Ltd. reflects total assets of Tk. 10,458,486,721 as at 31 December 2012 and total revenue of Tk.1,327,577,073 for the year ended 31 December 2012. These financial statements have been audited by other component auditors who have expressed unqualified audit opinion and accepted by us for the audit of the Group’s consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the financial statements have been prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) as explained in note 2, give a true and fair view of the financial position of the Group and the Bank as at 31 December 2012 and of the results of their financial performance and their cash flows for the year then ended and comply with the applicable sections of the Bank Companies Act 1991, the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.


We also report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

b) in our opinion, proper books of account as required by law have been kept by the Bank so far as it appeared from our examination of those books and proper returns adequate for the purpose of our audit have been received from branches not visited by us;

c) the Bank’s balance sheet and profit and loss account together with the annexed notes 1 to 50 dealt with by the report are in agreement with the books of account and returns;

d) the expenditure incurred was for the purpose of the Bank’s operations;

e) the financial position of the Bank as at 31 December 2012 and the profit for the year then ended have been properly reflected in the financial statements, the financial statements have been prepared in accordance with the generally accepted accounting principles;

f) the financial statements have been drawn up in conformity with the Bank Companies Act 1991 and in accordance with the accounting rules and regulations issued by the Bangladesh Bank;

g) adequate provisions have been made for advances and other assets which are in our opinion, doubtful of recovery;

h) the financial statements conform to the prescribed standards set in the accounting regulations issued by the Bangladesh Bank after consultation with the professional accounting bodies of Bangladesh;

i) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;

j) the information and explanations required by us have been received and found satisfactory;

k) over 80% of the risk weighted assets have been reviewed by us spending over 5,000 person hours;

l) Capital adequacy Ratio (CAR) as required by the Bangladesh Bank has been maintained adequately during the year.

Hoda Vasi Chowdhury & Co Howladar Yunus & CoChartered Accountants Chartered Accountants

Dhaka, 28 February 2013


Consolidated Balance Sheet as at 31 December 2012

Particulars Notes Amount in Taka2012 2011

PROPERTY AND ASSETSCash 3

In hand (including foreign currencies) 2,069,226,315 1,474,979,105 Balance with Bangladesh Bank and its agent bank (s)(including foreign currencies) 14,117,939,937 12,032,573,269

16,187,166,252 13,507,552,374 Balance with other banks and financial institutions 4

In Bangladesh 251,534,389 382,122,372 Outside Bangladesh 1,466,724,570 1,197,482,195

1,718,258,959 1,579,604,567

Money at call and short notice 5 - -

Investments 6Government 44,936,697,967 34,395,651,805 Others 3,065,827,910 3,120,176,474

48,002,525,877 37,515,828,279 Loans, advances and lease /investments

Loans, cash credits, overdrafts etc./ investments 7 156,374,907,982 134,406,227,505 Bills purchased and discounted 8 8,667,419,387 7,395,421,459

165,042,327,369 141,801,648,964 Fixed assets including premises, furniture and fixtures 9 4,419,804,836 4,033,403,880 Other assets 10 2,798,965,983 2,557,642,372 Non - banking assets - - Total assets 238,169,049,276 200,995,680,436

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents 11 21,149,348,118 10,969,847,805

Deposits and other accounts 12Current / Al-wadeeah current deposits 27,294,077,412 23,625,794,636 Bills payable 3,421,438,111 2,992,596,076 Savings bank / Mudaraba savings deposits 19,188,831,632 17,943,888,911 Term deposits / Mudaraba term deposits 132,058,072,695 115,250,080,280 Bearer certificate of deposit - - Other deposits - -

181,962,419,850 159,812,359,903

Other liabilities 13 14,095,474,132 10,950,827,275 Total liabilities 217,207,242,100 181,733,034,983 Capital / Shareholders’ equityPaid -up capital 14.2 9,357,714,690 7,798,095,580 Share premium 14.8 2,241,230,396 2,241,230,396 Minority Interest 14.9 67 63 Statutory reserve 15 6,839,527,566 5,772,509,105 Revaluation gain / loss on investments 16 42,034,865 259,338,544 Revaluation reserve 17 251,603,567 251,603,567 Foreign currency translation gain 18 4,510,188 8,058,632 Other reserve - - Surplus in profit and loss account / Retained earnings 19 2,225,185,837 2,931,809,566 Total Shareholders’ equity 20,961,807,176 19,262,645,453 Total liabilities and Shareholders’ equity 238,169,049,276 200,995,680,436


Consolidated Balance Sheet as at 31 December 2012


OFF - BALANCE SHEET EXPOSURESContingent liabilities 20Acceptances and endorsements 20.1 26,979,335,910 28,963,416,330 Letters of guarantee 20.2 42,846,572,774 34,955,284,339 Irrevocable letters of credit 20.3 28,353,752,325 29,706,663,305 Bills for collection 20.4 10,007,661,530 7,429,741,406 Other contingent liabilities - -

108,187,322,539 101,055,105,380 Other commitmentsDocumentary 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 - - Liabilities against forward purchase and sale - -

- - - -

Total Off-Balance Sheet exposures including contingent liabilities 108,187,322,539 101,055,105,380

These financial statements should be read in conjunction with the annexed notes 1 to 50.

See annexed auditors’ report to the Shareholders of the date.



Chairman Director Managing DirectorDirector


Consolidated Profit and Loss Accountfor the year ended 31 December 2012

Particulars NotesAmount in Taka

2012 2011

Interest income / profit on investments 22 23,807,748,522 17,546,811,157 Interest / profit paid on deposits, borrowings, etc. 23 (17,987,629,591) (13,046,539,824)Net interest / net profit on investments 5,820,118,931 4,500,271,333 Investment income 24 4,451,946,974 4,224,206,552 Commission, exchange and brokerage 25 2,628,137,057 2,917,119,847 Other operating income 26 1,101,978,717 798,991,288 Total operating income (A) 14,002,181,679 12,440,589,020

Salaries and allowances 27 2,780,540,201 2,131,614,239 Rent, taxes, insurance, electricity, etc. 28 474,283,014 403,458,311 Legal expenses 29 32,391,528 18,559,956 Postage, stamp, telecommunication, etc. 30 134,466,650 138,050,963 Stationery, printing, advertisements, etc. 31 308,479,135 303,104,472 Managing Director’s salary and fees 32 11,448,000 9,192,067 Directors’ fees 33 5,217,746 3,699,624 Auditors’ fees 34 1,522,518 1,312,505Charges on loan losses 35 - - Depreciation and repair of Bank’s assets 36 345,856,437 284,073,883 Other expenses 37 1,068,015,016 1,010,684,627Total operating expenses (B) 5,162,220,245 4,303,750,647 Profit / (loss) before provision (C=A-B) 8,839,961,434 8,136,838,373

Provision for loans / investments 38 Specific provision 1,490,000,000 226,000,000 General provision 240,000,000 305,000,000 Provision for Off-Shore Banking Units - - Provision for off-balance sheet exposures 140,000,000 130,000,000

1,870,000,000 661,000,000 Provision for diminution in value of investments (27,053,710) 389,941,266 Provision for impairment of client margin loan 179,183,361 -Other provisions 1,301,942,300 - Total provision (D) 3,324,071,951 1,050,941,266 Total profit / (loss) before taxes (C-D) 5,515,889,483 7,085,897,107 Provision for taxation: Current tax 39 2,629,200,771 3,171,778,786 Deferred tax 186,283,025 225,165,885

2,815,483,796 3,396,944,671 Net profit after taxation 2,700,405,687 3,688,952,436 Retained earnings brought forward from previous year 19.1 591,798,618 596,047,115

3,292,204,305 4,284,999,551


Consolidated Profit and Loss Accountfor the year ended 31 December 2012


2012 2011

Appropriations Statutory reserve 1,067,018,461 1,353,189,982 Minority interest 7 3 General reserve - -

1,067,018,468 1,353,189,985 Retained surplus 19 2,225,185,837 2,931,809,566

Earnings per share (EPS) 44 2.89 3.94


See annexed auditors’ report to the Shareholders of the date





Consolidated Cash Flow Statementfor the year ended 31 December 2012 Particulars Notes

Amount in Taka2012 2011

A) Cash flows from operating activities

Interest receipts in cash 26,869,276,024 19,000,177,647

Interest payments (17,771,734,765) (11,980,804,137)

Dividend receipts 14,477,350 467,592,508

Fees and commission receipts in cash 2,628,137,056 2,916,034,666

Recoveries of loans previously written off 85,048,984 110,069,208

Cash payments to employees (2,654,658,200) (2,124,206,268)

Cash payments to suppliers (688,608,205) (579,510,579)

Income taxes paid (1,992,688,589) (2,761,312,666)

Receipts from other operating activities 40 1,918,600,187 1,913,154,655

Payments for other operating activities 41 (1,453,178,417) (1,474,437,464)

Cash generated from operating activities before

changes in operating assets and liabilities 6,954,671,425 5,486,757,570

Increase / (decrease) in operating assets and liabilities

Statutory deposits - -

Purchase of trading securities (Treasury bills) 1,157,486,973 (4,885,593,657)

Loans and advances to other banks - -

Loans and advances to customers (23,651,758,398) (23,078,063,101)

Other assets 42 (12,968,997,333) (10,746,999,469)

Deposits from other banks / borrowings 9,125,817,450 8,282,513,358

Deposits from customers 22,559,005,948 31,179,063,572

Other liabilities account of customers 428,842,035 554,840,857

Trading liabilities - -

Other liabilities 43 685,431,691 1,557,180,763

(2,664,171,634) 2,862,942,323

Net cash from operating activities 4,290,499,791 8,349,699,893

B) Cash flows from investing activities

Debentures 5,000,000 5,000,000

Payments for purchases of securities (2,591,181) (416,281,955)

Purchase of property, plant and equipment (676,877,625) (2,514,084,521)

Payment against lease obligation (5,720,867) (5,089,558)

Proceeds from sale of property, plant and equipment 3,893,813 240,300

Net cash used in investing activities (676,295,860) (2,930,215,734)


Consolidated Cash Flow Statementfor the year ended 31 December 2012 Particulars Notes


C) Cash flows from financing activitiesReceipts from issue of sub-ordinated bond - - Receipts from issue of ordinary share including premium net off Tax

- -

Dividend paid (779,809,558) (744,474,022) Net cash used in financing activities (779,809,558) (744,474,022)

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C)

2,834,394,373 4,675,010,137

E) Effects of exchange rate changes on cash and cash equivalents

(13,654,203) (251,323,912)

F) Cash and cash equivalents at beginning of the year 15,089,790,941 10,666,104,716 G) Cash and cash equivalents at end of the year (D+E+F) 17,910,531,111 15,089,790,941

Cash and cash equivalents at end of the yearCash in hand (including foreign currencies) 2,069,226,315 1,474,979,105 Balance with Bangladesh Bank and its agent bank (s)(including foreign currencies) 14,117,939,937 12,032,573,269 Balance with other banks and financial institutions 1,718,258,959 1,579,604,567 Money at call and short notice - - Reverse repo - - Prize bonds (note-6a) 5,105,900 2,634,000

17,910,531,111 15,089,790,941





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Balance Sheet as at 31 December 2012


2012 2011 (Restated)

PROPERTY AND ASSETSCash 3a In hand (including foreign currencies) 2,059,503,576 1,464,103,675 Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) 14,117,939,937 12,032,573,269

16,177,443,513 13,496,676,944 Balance with other banks and financial institutions 4a In Bangladesh 251,389,642 377,477,308 Outside Bangladesh 1,392,741,405 1,138,637,962

1,644,131,047 1,516,115,270

Money at call and short notice 5 - -

Investments 6a Government 44,936,697,967 34,395,651,805 Others 4,733,737,225 4,776,646,818

49,670,435,192 39,172,298,623 Loans, advances and lease / investments Loans, cash credits, overdrafts, etc./ investments 7a 153,440,706,958 132,028,898,117 Bills purchased and discounted 8a 7,449,141,605 6,819,531,891

160,889,848,563 138,848,430,008 Fixed assets including premises, furniture and fixtures 9a 4,363,349,270 3,975,458,490 Other assets 10a 4,087,797,994 2,941,514,147 Non - banking assets - - Total assets 236,833,005,579 199,950,493,482

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents

11a 20,681,977,457 10,969,847,805

Deposits and other accounts 12a.1.c Current / Al-wadeeah current deposits 27,373,823,258 23,628,852,206 Bills payable 3,421,438,111 2,992,596,076 Savings bank / Mudaraba savings deposits 19,188,831,632 17,943,888,911 Term deposits / Mudaraba term deposits 132,068,779,059 115,250,383,779 Bearer certificate of deposit - - Other deposits - -

182,052,872,060 159,815,720,972

Other liabilities 13a 13,311,117,157 10,069,949,491 Total liabilities 216,045,966,674 180,855,518,268 Capital / Shareholders’ equityPaid up capital 14 .2 9,357,714,690 7,798,095,580 Share premium 14.8 2,241,230,396 2,241,230,396 Statutory reserve 15 6,839,527,566 5,772,509,105 Revaluation gain / (loss) on investments 16a 19,719,692 243,159,736 Revaluation reserve 17 251,603,567 251,603,567 Foreign currency translation gain 18a 5,015,711 8,694,724 Other reserve - - Surplus in profit and loss account / Retained earnings 19a 2,072,227,283 2,779,682,107 Total Shareholders’ equity 20,787,038,905 19,094,975,214 Total liabilities and Shareholders’ equity 236,833,005,579 199,950,493,482


Balance Sheet as at 31 December 2012



OFF - BALANCE SHEET EXPOSURESContingent liabilities 20aAcceptances and endorsements 20a.1 26,979,335,910 28,963,416,330 Letters of guarantee 20a.2 42,846,572,774 34,955,284,339 Irrevocable letters of credit 20a.3 28,353,752,325 29,706,663,305 Bills for collection 20a.4 10,007,661,530 7,429,741,406 Other contingent liabilities - -

108,187,322,539 101,055,105,380 Other commitmentsDocumentary 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 - - Liabilities against forward purchase and sale - -

- - Total Off-Balance Sheet exposures including contingent liabilities 108,187,322,539 101,055,105,380


See annexed auditors’ report to the Shareholders of the date.

Hoda Vasi Chowdhury & Co. Howladar Yunus & Co.Chartered Accountants Chartered Accountants




Profit and Loss Accountfor the year ended 31 December 2012



Interest income / profit on investments 22a 22,821,500,674 16,708,767,903

Interest / profit paid on deposits, borrowings, etc. 23a (17,410,286,124) (12,647,982,518)

Net interest / net profit on investments 5,411,214,550 4,060,785,385

Investment income 24a 4,633,326,302 4,157,293,110

Commission, exchange and brokerage 25a 2,429,444,757 2,688,928,970

Other operating income 26a 1,017,962,459 652,092,975

Total operating income (A) 13,491,948,068 11,559,100,440

Salaries and allowances 27a 2,673,292,974 2,057,720,184

Rent, taxes, insurance, electricity, etc. 28a 430,873,148 367,568,017

Legal expenses 29a 28,570,418 16,312,942

Postage, stamp, telecommunication, etc. 30a 127,601,535 132,056,013

Stationery, printing, advertisements, etc. 31a 304,366,321 298,731,953

Managing Director’s salary and fees 32 11,448,000 9,192,067

Directors’ fees 33a 5,152,571 3,569,924

Auditors’ fees 34a 575,000 522,500

Charges on loan losses 35 - -

Depreciation and repair of Bank’s assets 36a 331,708,120 271,478,216

Other expenses 37a 1,027,527,828 974,998,715

Total operating expenses (B) 4,941,115,915 4,132,150,531

Profit / (loss) before provision (C=A-B) 8,550,832,153 7,426,949,909

Provision for loans / investments 38a

Specific provision 1,490,000,000 226,000,000

General provision 240,000,000 305,000,000

Provision for Off-Shore Banking Units - -

Provision for off-balance sheet exposures 140,000,000 130,000,000

1,870,000,000 661,000,000

Provision for diminution in value of investments 43,797,548 -

Other provisions 1,301,942,300 -

Total provision (D) 3,215,739,848 661,000,000

Total profit / (loss) before taxes (C-D) 5,335,092,305 6,765,949,909

Provision for taxation

Current tax 39a 2,449,800,000 2,907,320,000

Deferred tax 186,300,000 224,500,000

2,636,100,000 3,131,820,000

Net profit after taxation 2,698,992,305 3,634,129,909

Retained earnings brought forward from previous years 19.1a 440,253,439 498,742,179

3,139,245,744 4,132,872,089





Appropriations

Statutory reserve 1,067,018,461 1,353,189,982

General reserve - -

1,067,018,461 1,353,189,982

Retained surplus 19a 2,072,227,283 2,779,682,107

Earnings per share (EPS) 44a 2.88 3.88


See annexed auditors’ report to the Shareholders of date

Hoda Vasi Chowdhury & Co Howladar Yunus & Co

Chartered Accountants Chartered Accountants




Cash Flow Statementfor the year ended 31 December 2012


2012 2011

A) Cash flows from operating activities

Interest receipts in cash 25,883,028,176 18,162,184,424

Interest payments (17,194,391,298) (11,585,290,180)

Dividend receipts 14,477,350 467,592,508

Fees and commission receipts in cash 2,429,444,756 2,688,968,185

Recoveries of loans previously written off 85,048,984 110,069,208

Cash payments to employees (2,554,040,973) (2,066,912,251)

Cash payments to suppliers (683,868,903) (576,159,881)

Income taxes paid (1,992,688,589) (2,761,312,666)

Receipts from other operating activities 40a 1,775,963,262 1,698,153,270

Payments for other operating activities 41a (1,355,446,797) (1,369,935,123)

Cash generated from operating activities before changes in operating assets and liabilities 6,407,525,968 4,767,357,494

Increase / (decrease) in operating assets and liabilities

Statutory deposits - -

Purchase of trading securities (Treasury bills) 1,157,486,973 (4,885,593,657)

Loans and advances to other banks - -

Loans and advances to customers (22,041,418,555) (22,791,905,847)

Other assets 42a (13,647,964,993) (10,643,375,389)

Deposits from other banks / borrowings 8,658,446,788 8,282,513,358

Deposits from customers 22,646,097,089 31,097,395,141

Other liabilities account of customers 428,842,035 554,840,857

Trading liabilities - -

Other liabilities 43a 786,096,248 1,085,124,521

(2,012,414,415) 2,698,998,984

Net cash from operating activities 4,395,111,553 7,466,356,478

B) Cash flows from investing activities

Debentures 5,000,000 5,000,000

Proceeds from sale of securities - -

Payments for purchases of securities (127,663,428) (29,996,467)

Purchase of property, plant and equipment (666,354,778) (2,505,029,178)

Payment against lease obligation (5,720,867) (5,089,558)

Proceeds from sale of property, plant and equipment 3,893,813 240,300

Net cash used in investing activities (790,845,260) (2,534,874,903)




2012 2011

C) Cash flows from financing activities

Receipts from issue of sub-ordinated bond - -

Receipts from issue of ordinary share including premium net off Tax

- -

Dividend paid (779,809,558) (288,818,355)

Net cash used in financing activities (779,809,558) (288,818,355)

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C)

2,824,456,735 4,642,663,220

E) Effects of exchange rate changes on cash and cash equivalents

(13,202,489) (243,265,280)

F) Cash and cash equivalents at beginning of the year 15,015,426,214 10,616,028,274

G) Cash and cash equivalents at end of the year (D+E+F) 17,826,680,460 15,015,426,214

Cash and cash equivalents at end of the year

Cash in hand (including foreign currencies) 2,059,503,576 1,464,103,675

Balance with Bangladesh Bank and its agent bank (s)

(including foreign currencies) 14,117,939,937 12,032,573,269

Balance with other banks and financial institutions 1,644,131,047 1,516,115,270

Money at call and short notice - -

Reverse repo - -

Prize bonds (note-6a) 5,105,900 2,634,000

17,826,680,460 15,015,426,214





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Notes to the Financial Statementsfor the year ended 31 December 2012

1.1 Prime Bank Limited The Prime Bank Limited (“the Bank”) was incorporated as a public limited company in Bangladesh under

Companies Act, 1994 with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch from April 17, 1995 under the license issued by Bangladesh Bank. Presently the Bank has 130 (One Hundred Thirty) branches, 17 (Seventeen) SME Centre/ Branches all over Bangladesh and 2 (two) booths located at Dhaka Club, Dhaka and at Chittagong Port, Chittagong. Out of the above 130 branches, 05 (five) branches are designated as Islamic Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU). The Bank went for Initial Public Offering in 1999 and its share is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share.

1.1.1 Principal activities The principal activities of the Bank are to provide all kinds of commercial banking services to customers through

its branches and SME centre/ Branches in Bangladesh. The Bank also provides Offshore banking services through 3(three) OBU’s.

1.1.2 Off-shore Banking Unit The Bank obtained Off-shore Banking Unit permission vide letter no. BRPD(P)744(84)/2001-868 dated 19 March

2001. The Bank commenced operation of its one unit from March 15, 2007. Presently the Bank has 3 (Three) Off-shore banking Units (OBU) located at Dhaka EPZ, Chittagong EPZ and Adamjee EPZ. The Off-shore banking units are governed under the rules and guidelines of Bangladesh Bank. Separate financial statements of Off -shore banking unit are shown in Annexure-K.

1.2 The Bank has 5 (Five) Subsidiaries details of which are given at note no. 1.2.1-1.2.5.

1.2.1 Prime Exchange Co. Pte. Limited, Singapore Prime Exchange Co. Pte. Ltd., a fully owned subsidiary company of Prime Bank Limited was incorporated in

Singapore on January 06, 2006 and commenced its remittance business from July 08, 2006 under the remittance license issued by the Monetary Authority of Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act (Chapter 187), Singapore. The principal activities of the company are to carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried on or undertaken by remittance and exchange house. Financial Statements of the company are shown in Annexure-N.

1.2.2 Prime Bank Investment Limited Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited incorporated as a public limited

company on April 27, 2010 with the registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no.C-84266/10 dated 28 April 2010 which has commenced its business on the same date. There of 29,999,994 shares (out of 30,000,000 shares) of Prime Bank Investment Limited are held by Prime Bank Limited and only 6 shares are held by 6 senior executives of Prime Bank Limited and Prime Bank Investment Limited. The main objectives of the company for which was established are to carry out the business of full-fledged merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services etc. Securities and Exchange Commission (SEC) thereafter issued a full fledged merchant banking license in favor of Prime Bank Investment Ltd, vide letter no. SEC/Reg/MB/SUB/2010/03/208 dated 02 June 2010 with effect from 01 June 2010. Financial Statements of the company are shown in Annexure-L.

1.2.3 PBL Exchange (UK) Limited PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England

and Wales under registration no. 7081093 dated 19 November 2009. The company is a wholly owned subsidiary of Prime Bank Limited. The company commenced its operation on 02 August 2010 with three Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF. Financial Statements of the company are shown in Annexure-O.



1.2.4 Prime Bank Securities Limited Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the

Companies Act 1994 vide certificate of incorporation no.C-84302 /10. Prime Bank Securities Limited become member of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for brokerage transaction vide Security Exchange Commission certificate no. 3.1/DSE-219/2010/429 dated 16.09.2010 and 3.2/CSE-141/2010/239 dated 31.08.2010 respectively. Prime Bank Securities Limited commenced its operation from May 2011. The main objectives of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company. Prime Bank Limited and Prime Bank Investment Limited hold 95% and 5% of Prime Bank Securities Limited respectively. Financial Statements of the company are shown in Annexure-M.

1.2.5 PBL Finance (Hong Kong) Limited PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong)

Limited was incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business Registration no. 58197431 both dated April 7, 2011) . PBL Finance (Hong Kong) Limited obtained Money Lending Licenses (307/2011) issued by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011 with one branch located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong. Financial Statements of the company are shown in Annexure-P.

2.00 Significant accounting policies and basis of preparation of financial statements

2.1 Basis of accounting 2.1.1 Statement of compliance The financial statements of the Bank and its subsidiaries (the “Group”) are made up to 31 December 2012 and

are prepared under the historical cost basis, except for certain investments which are stated at fair/market value and freehold land which are measured at revalued amount, in accordance with the First Schedule (Sec-38) of the Bank Companies Act 1991, BRPD Circular # 14 dated 25 June, 2003 and DFIM Circular # 11, dated 23 December 2009, other Bangladesh Bank Circulars, Bangladesh Accounting Standards (“BAS”) and Bangladesh Financial Reporting Standards (“BFRS”) adopted by the Institute of Chartered Accountants of Bangladesh (“ICAB”), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges’ listing regulations and other laws and rules applicable in Bangladesh. In case the requirement of Bangladesh Bank differs with those of BAS/BFRS, the requirement of Bangladesh Bank have been applied.

In addition to foregoing directives and standards, the operation of Islamic Banking Branches are accounted for in accordance with Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions, Bahrain, and Bangladesh Bank circular no-15, dated November 09, 2009. A separate balance sheet, profit and loss account and a statement of profit paid on deposits are shown in Annexure-G and G(1) and the figures appearing in the annexure have been incorporated in the related heads of these financial statements as recommended by the Central Shariah Board for Islamic Banks in Bangladesh.

2.1.2 Basis of consolidation The consolidated financial statements include the financial statements of Prime Bank Limited, and its subsidiaries

Prime Bank Investment Limited, Prime Bank Securities Limited, Prime Exchange Co. Pte. Ltd., Singapore, PBL Exchange (UK) Limited and PBL Finance (Hong Kong) Limited made up to the end of the financial year.

The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard 27: Consolidated and Separate Financial Statements. The consolidated financial statements are prepared to a common financial year ending 31 December 2012.

Subsidiary Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly

or indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements from the date that control effectively commences until the date that the control effectively



ceases. Subsidiary companies are consolidated using the purchase method of accounting. The subsidiary Prime Exchange Co. Pte. Ltd., Singapore, Prime Exchange (UK) Ltd and PBL Finance (Hong Kong) Limited has a common financial year ending 31 December 2012. The conversion policy of subsidiary companies is given below.

Particulars Price “Prime Exchange Co.Pte. Ltd., Singapore”

“PBL Exchange(UK) Ltd.”

“PBL Finance (Hong Kong) Ltd.”

For assets & liabilities Closing price 65.23680 129.10130 10.30321

For income & expenses Average price 64.13665 127.78200 10.41756

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss

resulting from transactions between Group are also eliminated on consolidation.

2.1.3 Use of estimates and judgments In the preparation of the financial statements management required to make judgments, estimates and

assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

The most critical estimates and judgments are applied to calculate provision for loans, advances and investments.

2.1.4 Foreign currency transaction a) Foreign currency Items included in the financial statements of each entity in the group are measured using the currency of the

primary economic environment in which the entity operates, i e. the functional currency. The financial statements of the group and the Bank are presented in Taka which is the Bank’s functional and presentation currency.

b) Foreign currencies translation Foreign currency transactions are converted into equivalent Taka using the ruling exchange rates on the dates of

respective transactions as per BAS-21” The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances held in US Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent.

Assets and liabilities & income and expenses of Off-shore Banking Units have been converted into Taka currency

@ US$1 = Taka 79.8499 (closing rate as at 31st December 2012) and Tk.81.8532 (average rate which represents the year end).

c) Commitments Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are

translated at contracted rates. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance sheet date.

d) Translation gains and losses The resulting exchange transaction gains and losses are included in the profit and loss account, except those

arising on the translation of net investment in foreign subsidiary.



e) Foreign operations The results and financial position of the Group’s operations whose functional currency is not Bangladeshi Taka

are translated into Bangladeshi Taka as follows: i) Assets and liabilities are translated at the exchange rate ruling at the balance sheet date; ii) Income and expenses in the income statement are translated at an average rate approximating the

exchange rates at the year end; iii) Resulting exchange differences are recognized as a separate component of equity.

iv) As per BAS 21 “Foreign Currency Transactions”, foreign currency denominated non-monetary items of

the OBUs are translated at historical rate, as the OBUs are considered as an integral part of the Bank’s operation not a foreign operation due to specific regulations governing the OBU and its unique nature.

f) Consolidation of Financial Statements of foreign operations Consolidation, foreign exchange differences arising from the translation of net investments in foreign entities, as

well as any borrowings are taken into capital reserve. When a foreign operation is disposed of, such currency translation differences are recognized in the income statement as part of the gain or loss on disposal.

2.1.5 Statement of cash flows Statement of cash flows have been prepared in accordance with the Bangladesh Accounting Standard-7 “

Statement of Cash Flows” under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

2.1.6 Liquidity statement The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity

term as per the following basis [Annexure-I and I(1)]. i) Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis

of their maturity term; ii) Investments are on the basis of their respective maturity;

iii) Loans and advances / investments are on the basis of their repayment schedule;

iv) Fixed assets are on the basis of their useful lives; v) Other assets are on the basis of their realization / amortization;

vi) Borrowing from other Banks, financial institutions and agents, etc. are as per their maturity / repayment

terms; vii) Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the

depositors; viii) Provisions and other liabilities are on the basis of their payment / adjustments schedule.

2.1.7 Reporting period These financial statements cover one calendar year from 1 January to 31 December 2012.

2.1.8 Offsetting

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously (note-9a, 13a.1, 24a, 25a.1).



2.1.9 Restatement In order to comply with the Bangladesh Accounting Standards (BAS-8), Accounting Policies, Changes in

Accounting Estimates and Errors. As per the standard it requires to restate the interest income/profit for Taka 28,053,160 of 2011 (note 22a) and the retained earnings as on 01.01.2011 by Taka 15,696,557 to show the retrospective effect that has occurred for the relevant year of transaction. Consequently, the above amount was adjusted with interest/profit suspense account.

2.2 Assets and basis of their valuation 2.2.1 Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank

and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank management for its short-term commitments.

2.2.2 Loans, advances and lease / investments

a) Loans and advances are stated in the balance sheet on gross basis.

b) Interest / profit is calculated on a daily product basis but charged and accounted for on accrual basis. Interest / profit on classified loans and advances / investments is kept in suspense account as per Bangladesh Bank instructions and such interest / profit is not accounted for as income until realised from borrowers [note - 7a.10 (x)]. Interest / profit is not charged on bad and loss loans / investments as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts.

c) Commission and discounts on bills purchased and discounted are recognized at the time of realization.

d) Provision for loans and advances / investments is made on the basis of year-end review by the management following instructions contained in Bangladesh Bank BCD Circular no. 34 dated 16 November 1989, BCD Circular no. 20 dated 27 December 1994, BCD Circular no. 12 dated 4 September 1995, BRPD Circular no. 16 dated 6 December 1998, BRPD Circular no. 9 dated 14 May 2001, BRPD Circular no.02 of February 2005, BRPD Circular no. 09 of August 2005 ,BRPD Circular no. 17 dated 06 December 2005,BRPD circular no.32 dated 27 October 2010, BRPD Circular no.14 dated 23.09.2012 and BRPD Circular no.19 dated 27.12.2012. The provision rates are given below:

Particulars Rate

General provision on unclassified general loans and advances / investments 1%

General provision on unclassified small enterprise financing 0.25%

General provision on interest receivable on loans / investments 1%

General provision on unclassified loans / investments for housing finance, loans for professionals to set-up business and loans to share business

2%

General provision on unclassified consumer financing other than housing finance, loan for professionals and loans to share business

5%

General provision on special mention account 5%

Specific provision on substandard loans and advances / investments 20%

Specific provision on doubtful loans and advances / investments 50%

Specific provision on bad / loss loans and advances / investments 100%



e) Loans and advances / investments are written off to the extent that (i) there is no realistic prospect of recovery, (ii) and against which legal cases are pending for more than five years as per guidelines of Bangladesh Bank. These write off however will not undermine / affect the claim amount against the borrower. Detailed memorandum records for all such write off accounts are meticulously maintained and followed up.

f) Amounts receivable on credit cards are included in advances to customers at the amounts expected

to be recovered. 2.2.3 Investments All investment securities are initially recognised at cost, being fair value of the consideration given, including

acquisition charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield method and are taken to discount income. The valuation method of investments used are:

Held to maturity (HTM) Investments which have ‘fixed or determinable payments’, and are intended to be ‘held to maturity’, other than

those that meet the definition of ‘held at amortized cost-others’ are classified as held to maturity. Investment (HTM)-BHBFC is shown in the financial statements at cost price.

Held for trading (HFT) Investments classified in this category are acquired principally for the purpose of selling or repurchasing -in short-

trading or if designated as such by the management. After initial recognition, investments are measured at fair value and any change in the fair value is recognised in the statement of income for the period in which it arises. These investments are subsequently revalued at current market value on weekly basis as per Bangladesh Bank Guideline. Revaluation gain has been shown in revaluation reserve account & revaluation loss has been shown in Profit & Loss account.

Value of investments has been enumerated as follows :

Items Applicable accounting value

Government treasury bills-HTM Amortized value

Government treasury bills-HFT Market value

Government treasury bonds-HTM Amortized value

Government treasury bonds-HFT Market value

Prize bond At cost

BHBFCs-debenture At cost Investment in listed securities These securities are bought and held primarily for the purpose of selling them in future or hold for dividend

income. These are reported at cost. Unrealized gains are not recognized in the profit and loss account. But provision for diminution in value of investment is provided in the financial statements which market price is below the cost price of investment as per Bangladesh Bank guideline (note-13a).

Investment in unquoted securities Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of

book value over cost for determining the carrying amount of investment in unlisted securities.

Investments in subsidiary Investment in subsidiaries is accounted for under the cost method of accounting in the Bank’s financial statements

in accordance with the Bangladesh Accounting Standard no-28. Accordingly, investments in subsidiaries are stated in the Bank’s balance sheet at cost, less impairment losses if any.



2.2.4 Property, plant and equipment Property, plant & equipment are recognized if it is probable that future economic benefits associated with the

assets will flow to the Bank and the cost of the assets can be reliably measured. a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant

and Equipment”. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

b) The Bank recognises in the carrying amount of an item of property, plant and equipment the cost of

replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation, such as repairs and maintenance, is normally charged off as revenue expenditure in the period in which it is incurred.

c) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets other than vehicles, software and all fixed assets of ATM related on which straight line depreciation method is followed and no depreciation is charged on land:

Category of fixed assets Rate

Land Nil

Building 2.50%

Furniture and fixtures 10%

Office equipment 20%

Library books 20%

Vehicles (straight line) 20%

Category of fixed assets (ATM Assets) Rate

Furniture and fixtures (straight line) 10%

Office equipment (straight line) 20%

d) For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is charged up to the date of disposal.

e) On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets

schedule and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sale proceeds.

f) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset have been capitalized as part of the cost of the asset as per BAS-23.

g) Leasehold properties are recorded at present value of minimum lease payments or fair market value, whichever is lower as per the provisions of BAS-17. The carrying value of leasehold properties is amortized over the remaining lease term or useful of leasehold property, whichever is lower.

2.2.5 Intangible assets a) An intangible asset is recognized if it is probable that the future economic benefits that are attributable

to the asset will flow to the entity and the cost of the assets can be measured reliably. b) Software represents the value of computer application software licensed for use of the Bank, other

than software applied to the operation software system of computers. Intangible assets are carried at its cost, less accumulated amortization and any impairment losses.



Initial cost comprises license fees paid at the time of purchase and other directly attributable expenditure that are incurred in customizing the software for its intended use.

c) Expenditure incurred on software is capitalized only when it enhances and extends the economic benefits of computer software beyond their original specifications and lives and such cost is recognized as capital improvement and added to the original cost of software.

d) Software is amortized using the straight line method over the estimated useful life of 10 (ten) years commencing from the date of the application software is available for use over the best estimate of its useful economic life.

2.2.6 Impairment of Assets: The policy for all assets or cash-generating units for the purpose of assessing such assets for impairment is as

follows: The Bank assesses at the end of each reporting period or more frequently if events or changes in circumstances

indicate that the carrying value of an asset may be impaired, whether there is any indication that an asset may be impaired. If any such indication exits, or when an annual impairment testing for an asset is required, the bank makes an estimate of the assets recoverable amount. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount by debiting to profit & loss account.

Fixed assets are reviewed for impairment whenever events or charges in circumstances indicate that the carrying amount of an asset may be impaired.

2.2.7 Investment properties

a) Investment property is held to earn rentals or for capital appreciation or both and the future economic benefits that are associated with the investment property but not sale in the ordinary course of business.

b) Investment property is accounted for under cost model in the financial statements. Accordingly, after recognition as an asset, the property is carried at its cost, less accumulated depreciation and impairment loss.

c) Depreciation is provided on a reducing basis over the estimated life of the class of asset from the date of purchase up to the date of disposal.

2.2.8 Other assets Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity

and such accounts may be quite insignificant in the overall financial condition of the Bank.

2.2.9 Securities purchased under re-sale agreement Securities purchased under re-sale agreements are treated as collateralized lending and recorded at the

consideration paid and interest accrued thereon. The amount lent is shown as an asset either as loans and advances to customers or loans to other banks.

The difference between purchase price and re-sale price is treated as interest received and accrued evenly over

the life of Repo agreement. 2.2.10 Receivables Receivables are recognised when there is a contractual right to receive cash or another financial asset from

another entity. 2.2.11 Inventories Inventories measured at the lower of cost and net realizable value.



2.2.12 Leasing Leases are classified as finance leases whenever the ‘terms of the lease’ transfer substantially all the risks and

rewards of ownership to the lessee as per BAS-17 “ Leases”. All other leases are classified as operating leases as per BAS-17 “Leases”.

The Bank as lessor Amount due from lessees under finance leases are recorded as receivables at the amount of the Bank’s net

investment in the leases (note-7a.3). Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the bank’s net investment outstanding in respect of the leases.

The Bank as lessee Assets held under finance leases are recognised as assets of the Bank at their fair value at the date of acquisition

or, if lower, at the present value of the minimum lease payments (note-9a). The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation (note-13a.9). Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

2.2.13 Non-banking assets: There are no assets acquired in exchange for loan during the period of financial statements.

2.2.14 Reconciliation of inter-bank and inter-branch account Accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there

are no material differences which may affect the financial statements significantly. Un-reconciled entries / balances in the case of inter-branch transactions as on the reporting date are not material. 2.3 Share capital Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial

assets. 2.4 Statutory reserve Bank Companies Act, 1991 requires the Bank to transfer 20% of its current year’s profit before tax to reserve until

such reserve equals to its paid up capital.

2.5 Revaluation reserve When an asset’s carrying amount is increased as a result of a revaluation , the increase amount should be

credited directly to equity under the heading of revaluation surplus / reserve as per BAS-16: Property, Plant and Equipment. The Bank revalued the assets of land and buildings during the year 2008 which are absolutely owned by the Bank and the increase amount transferred to revaluation reserve. The tax effects on revaluation gain are measured and recognised in the financial statements as per BAS-12: Income Taxes.

2.5.1 Minority interest in subsidiaries Minority interest in business is an accounting concept that refers to the portion of a subsidiary corporation’s stock

that is not owned by the parent corporation. The magnitude of the minority interest in the subsidiary company is always less than 50% of outstanding shares, else the corporation would cease to be a subsidiary of the parent. Minority interest belongs to other investors and is reported on the consolidated balance sheet of the owning company to reflect the claim on assets belonging to other, non-controlling shareholders. Also, minority interest is reported on the consolidated income statement as a share of profit belonging to minority shareholders.



2.5.2 Prime bank sub-ordinated bond Prime Bank issued unsecured non-convertible sub-ordinated bond on 07 February 2010 after obtained approval

from Bangladesh Bank and Securities and Exchange Commission vide their letter # BRPD (BIC) 661 / 14B (P) /2009-319, dated 31 December 2009 and SEC / CI / CPLC-205 / 09 / 282, dated December 23, 2009 respectively. The Subordinated Bond is counted towards Tier- II capital of the Bank. The bond shall bear interest @ Tk.11.50% per annum, payable semi annually in arrear on 07 August and 07 February of each year.

2.5.3 Share premium Share premium is the capital that the Bank raises upon issuing shares that is in excess of the nominal value

of the shares. The share premium may be applied by the Bank in paying up unissued shares to be allotted to members as fully paid bonus shares or writing-off the preliminary expenses of the Bank or the expenses of or the commission paid or discount allowed on, any issue of shares or debentures of the Bank or in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the Bank. Share premium was shown in accounts after deduction of income tax @3% on share premium as per finance Act-2010.

2.7 Deposits and other accounts Deposits by customers and banks are recognised when the Bank enters into contractual provisions of the

arrangements with the counterparties, which is generally on trade date, and initially measured at the consideration received.

2.8 Borrowings from other banks, financial institutions and agents

Borrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from

banks. These are stated in the balance sheet at amounts payable. Interest paid / payable on these borrowings is charged to the profit & loss account.

Disclosures of borrowings against Repo are shown in notes- 6a.11 to 6a.12 and 46

2.9 Basis for valuation of liabilities and provisions 2.9.1 Provision for current taxation Provision for current income tax has been made as per prescribed rate in the Finance Ordinance, 2012 on the

accounting profit made by the Bank after considering some of the add backs to income and disallowances of expenditure as per income tax laws in compliance with BAS-12 “ Income Taxes”.

2.9.2 Deferred taxation Deferred tax is accounted for in accordance with BAS 12: Income Taxes. Deferred tax normally results in a

liability being recognized within the Statement of Financial Position. BAS 12 defines a deferred tax liability as being the amount of income tax payable in future periods. Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences, unused tax losses or unused tax credits can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis.


Notes to the Financial Statementsfor the year ended 31 December 2012 2.9.3 Benefits to the employees The retirement benefits accrued for the employees of the Bank as on reporting date have been accounted

for in accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefit”. Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below:

a) Provident fund Provident fund benefits are given to the permanent employees of the Bank in accordance with Bank’s service

rules. Accordingly a trust deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone - 5, Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52), read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from 07 July 1997. The Fund is operated by a Board of Trustees consisting six members (03 members from management and other 03 members from the Board of Directors) of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as subscription to the Fund. The Bank also contributes equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account on yearly basis.

b) Gratuity fund

The Bank operates an unfunded gratuity scheme on “Closed Plan Basis”, in respect of which provision is made annually covering all its permanent eligible employees. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “ Employee Benefits”.

c) Welfare fund Prime Bank’s employees’ welfare fund is subscribed by monthly contribution of the employees. The Bank also

contributes to the Fund from time to time. The Fund has been established to provide medical support and coverage in the event of accidental death or permanent disabilities of the employees. Disbursement of loan from the fund is done as per rules for employees’ welfare fund. Retirement benefit are also provided from this fund.

d) Incentive bonus 10% of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is being

distributed among the employees based on their performance. The bonus amount is paid annually, normally first quarter of every following year and the costs are accounted for in the period to which it relates.

2.9.4 Provision for liabilities A provision is recognised in the balance sheet when the Bank has legal or constructive obligation as a result

of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

2.9.5 Provision for Off-balance sheet exposures Off-balance sheet items have been disclosed under contingent liabilities and other commitments as per

Bangladesh Bank guidelines. As per BRPD Circular # 14, dated September 23, 2012, banks are advised to maintain provision @1% against off-balance sheet exposures (L/C and Guarantee) in addition to the existing provisioning arrangement.

2.9.6 Provision for nostro accounts As per instructions contained in the circular letter no. FEPD (FEMO) / 01 / 2005-677 dated 13 September 2005

issued by Foreign Exchange Policy Department of Bangladesh Bank, provision is to be maintained the un-reconciled debit balance of nostro account more than 3 months as on the reporting date in these financials. Since there is no unreconciled entries which are outstanding more than 3 months provision has not been made.


Notes to the Financial Statementsfor the year ended 31 December 2012 2.10 Revenue recognition 2.10.1 Interest income

In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognised on accrual basis. Interest

on loans and advances ceases to be taken into income when such advances are classified. It is then kept in interest suspense. After the loans / investments is classified as bad, interest / profit ceases to apply and recorded in a memorandum account. Interest/Profit on classified advances/investment is accounted for on a cash receipt basis.

2.10.2 Profit on investment (Islamic Banking Branches) Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue

charge / compensation on classified investments is transferred to profit suspense account instead of income account.

2.10.3 Investment income Interest income on investments is recognised on accrual basis. Capital gain on investments in shares is also

included in investment income. Capital gain is recognised when it is realised.

2.10.4 Fees and commission income Fees and commission income arising on services provided by the Bank are recognised on a cash basis.

Commission charged to customers on letters of credit and letters of guarantee is credited to income at the time of effecting the transactions.

2.10.5 Dividend income on shares Dividend income on shares is recognised during the period in which it is declared and ascertained.

2.10.6 Interest paid and other expenses (Conventional Banking Branches)

In terms of the provisions of BAS-1 “Presentation of Financial Statements” interest and other expenses are

recognised on accrual basis. 2.10.7 Profit paid on deposits (Islamic Banking Branches) Profit paid to mudaraba depositors is recognised on accrual basis as per provisional rate. However, the final profit

is determined and to be paid to the depositors as per Annexure-F.

2.10.8 Dividend payments Interim dividend is recognised when they are paid to shareholders. Final dividend is recognized when it is

approved by the shareholders. The proposed dividend for the year 2012 has not been recognized as a liability in the balance sheet in accordance

with the BAS-10 : Events After the Reporting Period. Dividend payable to the Bank’s shareholders is recognized as a liability and deducted from the shareholders’

equity in the period in which the shareholders’ right to receive payment is established.

2.11 Risk management The risk of Prime Bank Limited is defined as the possibility of losses, financial or otherwise. The risk management

of the Bank covers core risk areas of banking viz. credit risk, liquidity risk, market risk that includes foreign exchange risk, interest rate risk, equity risk, operational risk and reputation risk arising from money laundering incidences. The prime objective of the risk management is that the Bank evaluates and takes well calculative business risks and thereby safeguards the Bank’s capital, its financial resources and profitability from various


Notes to the Financial Statementsfor the year ended 31 December 2012 business risks through its own measures and through implementing Bangladesh Bank’s guidelines and following

some of the best practices as under: 2.11.1 Credit risk It arises mainly from lending, trade finance, leasing and treasury businesses. This can be described as potential

loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from unwillingness of the counter party or decline in his / her financial condition. Therefore, the Bank’s credit risk management activities have been designed to address all these issues.

The Bank has segregated duties of the officers / executives involved in credit related activities. A separate Corporate Division has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with the customers, marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval, administration, monitoring and recovery functions have been segregated. For this purpose, three separate units have been formed within the credit division. These are (a) Credit Risk Management Unit (b) Credit Administration Unit and (c) Credit Monitoring and Recovery Unit. Credit Risk Management Unit is entrusted with the duties of maintaining asset quality, assessing risk in lending to a particular customer, sanctioning credit, formulating policy / strategy for lending operation, etc. Adequate provision has been made on classified loans / investments is shown in note-13a.3.

A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk

assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facility, etc. The assessment process at Head Office starts at Corporate Division by the Relationship Manager / Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority. Credit approval authority has been delegated to the individual executives. Proposals beyond their delegation are approved / declined by the Executive Committee and / or the Management of the Bank. Concentration of credit risk is shown in note -7a. 5.

In determining Single borrower / Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory polices. Loans are classified as per Bangladesh Bank’s guidelines. Concentration of single borrower / large loan limit is shown in note-7a.9.

2.11.2 Liquidity risk The object of liquidity risk management is to ensure that all foreseeable funding commitments and deposit

withdrawals can be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core retail and corporate deposits and institutional balance (note - 12a). Management of liquidity and funding is carried out by Treasury Department under approved policy guidelines. Treasury front office is supported by a very structured Mid office and Back office. The Liquidity management is monitored by Asset Liability Committee (ALCO) on a regular basis. A written contingency plan is in place to manage extreme situation.

2.11.3 Market risk The exposure of market risk of the Bank is restricted to foreign exchange risk, interest rate risk and equity risk.

Foreign exchange risk Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign

exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments and other remittance requirements. No foreign exchange dealing on Bank’s account was conducted during the year.

Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly basis and outstanding entry beyond 30 days is reviewed by the management for its settlement. The position maintained by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank.



Interest rate risk Interest rate risk may arise either from trading portfolio or non-trading portfolio. The trading portfolio of the Bank

consists of Government treasury bills of 28 days maturity. The short-term movement in interest rate is negligible or nil. Interest rate risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset Liability Committee (ALCO) monitors the interest rate movement on a regular basis.

Equity risk Equity risk arises from movement in market value of equities held. The risks are monitored by Investment

Committee under a well designed policy framework. The market value of equities held was however higher than the cost price at the balance sheet date (Annexure-B).

2.11.4 Reputation risk arising from money laundering incidences

Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent

in prevention of money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head Office and Compliance Officers at branches, who independently review the transactions of the accounts to verify suspicious transactions. Manuals for prevention of money laundering have been established and transaction profile has been introduced. Training is continuously given to all the category of Officers and Executives for developing awareness and skill for identifying suspicious activities / transactions.

2.11.5 Operational risk Operational risk may arise from error and fraud due to lack of internal control and compliance. Management

through Internal Control and Compliance Division controls operational procedure of the Bank. Internal Control and Compliance Division undertakes periodical and special audit of the branches and departments at the Head Office for review of the operation and compliance of statutory requirements. The Audit Committee of the Board subsequently reviews the reports of the Internal Control and Compliance Division.

2.12 Earnings per share Basic earnings per share Basic earnings per share has been calculated in accordance with BAS 33 “Earnings per Share” which has been

shown on the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share No diluted earnings per share is required to be calculated for the year as there was no scope for dilution during

the year under review. 2.13 Events after the reporting period Where necessary, all the material events after the reporting period have been considered and appropriate

adjustment / disclosures have been made in the financial statements.

2.14 Directors’ responsibility on statement The Board of Directors takes the responsibility for the preparation and presentation of these financial

statements. 2.15 Memorandum items Memorandum items are maintained to have control over all items of importance and for such transactions where

the Bank has only a business responsibility and no legal commitment. Bills for collection, Stock of travelers cheques, savings certificates, wage earners bonds and other fall under the memorandum items. However, Bills for Collection is shown under contingent liabilities as per Bangladesh Bank’s format of reporting.



2.16 Related party transaction Related party transaction is a transfer of resources, services or obligation between related parties, regardless of

whether a price is charged. Detail of related parties transaction are given in note-48.

2.17 Information about business and geographical segments Segmental information is presented in respect of the Group’s business and of Prime Bank Limited.

Business segments Business segments report consists of products and services whose risks and returns are different from those of

other business segments. These segments comprise Conventional Banking including Off-shore Banking Units, Islamic Banking, Prime Bank Investment Limited and Prime Bank Securities Limited. Business segments report are shown in Annexure-H.

Geographical segments Geographical segments report consists of products and services within a particular economic environment

where risks and returns are different from those of other economic environments. These segments comprise of Prime Bank Limited, Off-shore Banking Units, Prime Bank Investment limited, Prime Bank Securities Limited, Prime Exchange Co. Pte. Ltd, Singapore, PBL Exchange (UK) Ltd. and PBL Finance (Hong Kong) Limited. Geographical segments report are shown in Annexure-H.

Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the management. Income, expenses, assets and liabilities are specifically identified with individual segments. Based on such allocation, segmental balance sheet as on 31 December 2012 and segmental profit and loss account for the year ended 31 December 2012 have been prepared.

2.18 Compliance report on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS)

The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). While preparing the financial statements, Prime Bank applied all the applicable of BAS and BFRS as adopted by ICAB. Details are given below:

Name of the BAS BAS no StatusPresentation of Financial Statements 1 Applied * Inventories 2 AppliedStatement of Cash Flows 7 AppliedAccounting Policies, Changes in Accounting Estimates and Errors 8 Applied Events after the reporting period 10 Applied Construction Contracts 11 N/AIncome Taxes 12 AppliedProperty, Plant and Equipment 16 AppliedLeases 17 AppliedRevenue 18 AppliedEmployee Benefits 19 AppliedAccounting for Government Grants and Disclosure of Government Assistance 20 N/A The Effects of Changes in Foreign Exchange Rates 21 AppliedBorrowing Costs 23 AppliedRelated Party Disclosures 24 AppliedAccounting and Reporting by Retirement Benefit Plans 26 N/A **


Consolidated and Separate Financial Statements 27 AppliedInvestments in Associates 28 AppliedInterests in Joint Ventures 31 N/AFinancial Instruments: Presentation 32 Applied * Earnings per share 33 AppliedInterim Financial Reporting 34 Applied *** Impairment of Assets 36 AppliedProvisions, Contingent Liabilities and Contingent Assets 37 AppliedIntangible Assets 38 AppliedFinancial Instruments: Recognition and Measurement 39 Applied * Investment Property 40 AppliedAgriculture 41 N/A

Name of the BFRS BFRS no. StatusFirst time adoption 1 N/AShare Based Payment 2 N/ABusiness Combinations 3 N/AInsurance Contract 4 N/ANon-current Assets Held for Sale and Discontinued Operations 5 N/AExploration for and Evaluation of Mineral Resources 6 N/AFinancial Instruments: Disclosure 7 AppliedOperating Segments 8 Applied

N/A Not Applicable* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are different to BAS/BFRS, some of the requirements specified in these BAS/BFRSs are not applied. Refer below for such recognition and measurement differences that are most relevant and material to the Bank and the Group.

** This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the plan. Therefore, it is not applicable for the Bank’s annual report as it is the employer and not the retirement benefit plan itself.

*** The objective of BAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the principles for recognition and measurement in complete or condensed financial statements for an interim period and hence it is not applicable for annual financial statements. However, the Bank being a listed entity in Dhaka and Chittagong Stock Exchanges regularly publishes Interim Financial Report complying with BAS 34.

New and amended standards adopted by the Bank and the Group There are no new standards, amendments to standards and interpretations that are effective for the first time for the financial year ended 31 December 2012 that have a significant impact on the Group and the Bank. New and amended standards and interpretations not yet adopted by the Bank and the Group A number of new standards, amendments to standards and interpretations are effective for annual periods beginning from 1 January 2013 or later, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group and the Bank. Although International Accounting Standards Board (IASB) has issued a new standard (IFRS 9) along with related amendments to existing standards (IAS/BAS 32, 39) but none of these have been adopted and/or endorsed locally as BAS/BFRS and as such any possible impact could not be determined.




Difference between BAS/BFRS and Bangladesh Bank Regulation:Provision for loans and advances “BAS/BFRS: As per BAS 39 an entity should start the impairment assessment of loans and advances by considering whether objective evidence of impairment exists for those loans that are individually significant. For loans and advances which are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis. Such provision shall be netted off against loans and advances.

As per BRPD Circular no. 14 & 15 dated 23 September 2012 and BRPD Circular no. 19 dated 27 December 2012, a general provision at 0.25% to 5% under different categories of unclassified loans (standard/ SMA loans) should be maintained regardless of objective evidence of impairment. And, specific provision for sub-standard loans, doubtful loans and bad losses should be provided at 20%, 50% and 100% respectively for loans and advances depending on the duration of overdue. Also, a general provision at 1% should be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39. Also for disclosure such provision shall be shown as liability as opposed to netting off against loans and advances.

Repo and reverse repo transaction of Government securities (i.e. treasury bills and bonds) “BAS/BFRS: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (REPO), the arrangement is accounted for as a deposit as opposed to a sale, and the underlying asset continues to be recognised in the entity’s financial statements. Such transaction do not satisfy derecognition criteria specified in BAS 39. Same rule applies to the opposite side of the transaction (Reverse REPO).

As per Bangladesh Bank circulars/guidelines, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (REPO), the arrangement is accounted for as a normal sales transactions and the financial assets should be derecognised in the seller’s book and recognised in the buyer’s book. Cash and cash equivalent BAS/BFRS: As per BAS 7 cash and cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Therefore, some items like Balance with Bangladesh Bank on account of CRR/SLR are not part of cash and cash equivalent as those are not readily available. As per Bangladesh Bank circulars/guidelines, balance with Bangladesh Bank is part of cash and cash equivalent regardless of any restriction.

2.19 Approval of financial statements The financial statements were approved by the Board of directors on February 28,2013

2.20 General

a) These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.

b) The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided for in the books of the Bank.

c) Figures of previous year have been rearranged whenever necessary to conform to current years presentation.




3 Consolidated cashi Cash in hand

Prime Bank Limited (note-3a.1) 2,059,503,576 1,464,103,675 Prime Bank Investment Limited 7,346 41,057 Prime Bank Securities Limited 4,895 10,817 Prime Exchange Co. Pte. Ltd., Singapore 9,710,498 10,823,556 PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

2,069,226,315 1,474,979,105 ii Balance with Bangladesh Bank and its agent bank(s)

Prime Bank Limited (note-3a.2) 14,117,939,937 12,032,573,269 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

14,117,939,937 12,032,573,269 16,187,166,252 13,507,552,374

3a Cash of the Bank

3a.1 Cash in hand

In local currency 1,971,441,919 1,414,850,909 In foreign currency 88,061,657 49,252,766

2,059,503,576 1,464,103,675 3a.2 Balance with Bangladesh Bank and its agent bank(s)

In local currency 10,816,492,170 9,433,960,795 In foreign currency 2,881,505,675 1,854,968,231

13,697,997,845 11,288,929,026 Sonali Bank as agent of Bangladesh Bank (Local currency) 419,942,092 743,644,243

14,117,939,937 12,032,573,269 16,177,443,513 13,496,676,944

Reconciliation statements regarding Bangladesh Bank balance are given Annexure-A-13a.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)

Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Bank Companies Act, 1991 and MPD circular nos.05, dated December 01, 2010.

The Cash Reserve Requirement on the Bank’s time and demand liabilities at the rate of 6% has been calculated and maintained with Bangladesh Bank in current account and 19% Statutory Liquidity Ratio for conventional banking and 11.50% Statutory Liquidity Ratio for Islamic banking , including CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below:

a) Cash Reserve RequirementRequired reserve 10,711,548,230 9,102,226,820 Actual reserve maintained (note-3a.2) 10,816,492,170 9,433,960,795 Surplus / (deficit) 104,943,940 331,733,975

b) Statutory Liquidity RatioRequired reserve (including CRR) 32,672,594,350 27,606,171,980 Actual reserve maintained (including CRR) - note-3a.5 61,114,141,480 47,892,328,749 Surplus / (dificit) 28,441,547,130 20,286,156,769

Total required reserve 32,672,594,350 27,606,171,980 Actual reserve held 61,114,141,480 47,892,328,749 Total surplus 28,441,547,130 20,286,156,769

3a.4 Maturity grouping of cashPayable on demand - - Up to 1 month 5,399,669,573 4,279,100,959 Over 1 month but not more than 3 months - - Over 3 months but not more than 6 months - - Over 6 months but not more than 1 year - - Over 1 year but not more than 5 years - - Over 5 years 10,777,773,940 9,217,575,985

16,177,443,513 13,496,676,944




3a.5 Held for Statutory Liquidity RatioCash in hand (note -3a.1) 2,059,503,576 1,464,103,675 Balance with Bangladesh Bank and its agent bank(s) (note-3a.2) 14,117,939,937 12,032,573,269 Government securities (note-6a.ii) 2,749,635,259 5,124,479,346 Government bonds (note-6a.ii) 40,969,705,594 29,271,172,459 Bangladesh Bank Bills (note-6a.ii) 1,217,357,114 -

61,114,141,480 47,892,328,749 4 Consolidated balance with other banks and financial institutions

In Bangladesh Prime Bank Limited (note-4a.1) 251,389,642 377,477,308 Prime Bank Investment Limited 90,411,112 3,213,517 Prime Bank Securities Limited 185,845 4,792,616 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

341,986,599 385,483,441 Less: Inter-company transaction 90,452,210 3,361,069

251,534,389 382,122,372Outside Bangladesh Prime Bank Limited (note-4a.2) 1,392,741,405 1,138,637,962 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore 37,476,454 32,812,263 PBL Exchange (UK) Ltd. 24,335,982 10,765,643 PBL Finance (Hong Kong) Limited 12,170,729 15,266,326

1,466,724,570 1,197,482,195 1,718,258,959 1,579,604,567

4a Balance with other banks and financial institutions of the BankIn Bangladesh (note-4a.1) 251,389,642 377,477,308 Outside Bangladesh (note-4a.2) 1,392,741,405 1,138,637,962

1,644,131,047 1,516,115,270 4a.1 In Bangladesh

Current accountAgrani Bank Ltd., Principal Branch, Dhaka 477,554 10,488,705 Agrani Bank Ltd., Purana Paltan Branch, Dhaka 94,739 4,007,817 Agrani Bank Ltd., Bhairab Bazar, Kishoregonj 3,500,000 2,500,450 Agrani Bank Ltd., Mirzapur Branch, Mirzapur 5,778,964 1,160,770 AB Bank Ltd. Principal Branch, Dhaka 2,997,108 2,998,108 The City Bank Ltd, Dhaka 274,719 275,515 Dutch-Bangla Bank Ltd., Head office, Dhaka 62,733,959 58,223,470 Exim Bank Ltd., Motijheel Branch, Dhaka 1,696,291 1,727,900 Islami Bank BD Ltd., Local Office, Dhaka 7,347,825 6,797,821 Islami Bank BD Ltd., Jhikorgacha 1,000 1,000 Janata Bank Ltd., Local Office, Dhaka 13,565,017 73,566,147 Janata Bank Ltd., Ishwardi Branch 3,288,797 5,187,818 Janata Bank Ltd., Companygonj Branch - 328 Janata Bank Ltd., Corporate Branch, Bogra 1,292 1,292 National Bank Ltd., Rangpur Branch 13,123,089 16,458 Pubali Bank Ltd., Dhaka Stadium Branch, Dhaka 1,167,259 16,199,476 Rupali Bank Ltd. ,Motijheel Branch, Dhaka 9,562,393 18,624,590 Sonali Bank Ltd., Rangpur Branch 3,045,665 22,173,332 Sonali Bank Ltd., Pabna Branch - 8,568,058 Sonali Bank Ltd., Sunamganj Branch 23,417,396 9,385,030 Sonali Bank Ltd., Dinajpur Branch - 8,220,571 Sonali Bank Ltd., Local Office, Dhaka 17,178,093 24,871,469 Sonali Bank Ltd., Narayangonj 6,932,833 12,182,617 Sonali Bank Ltd., Companygonj Branch - 1,001,000 Sonali Bank Ltd., Thakurgaon Branch - 6,064,601 Sonali Bank Ltd., Fakirapool Branch, Dhaka 599,503 11,562,209 Sonali Bank Ltd., Faridpur Branch, Faridpur 63,022 31,028,027 Sonali Bank Ltd., Narsingdi Branch 10,542,555 6,716,871 Sonali Bank Ltd., Satkhira 16,509,210 4,417,636 Standard Chartered Bank, Bangladesh 3,621,134 - United Commercial Bank Ltd., Principal Branch, Dhaka 7,448,342 1,867,771 Off-shore Banking Units 166,621,451 237,669,828 Uttara Bank Ltd., Local Office, Dhaka 176,341 177,841

381,765,551 587,684,526 Less: Off-shore Banking Units 166,621,451 237,669,828

215,144,100 350,014,698




Special notice deposit accountsAgrani Bank Ltd., Principal Branch, Dhaka 295,926 286,140 Agrani Bank Ltd., Takerhat Branch 2,112 1,003,195 ICB Islamic Bank Ltd., Principal Office, Motijheel, Dhaka 15,599 15,599 ICB Islamic Bank Ltd., Sylhet 18,971 18,970 Janata Bank Ltd., Local Office, Dhaka 5,028,074 4,827,406 National Bank Ltd., Narayanganj Branch, Dhaka 30,705,174 21,136,783 Sonali Bank Ltd., Bhairab Bazar, Kishoregonj 950 950 Social Islami Bank Ltd., Principal Branch, Dhaka 12,433 12,210

36,079,239 27,301,253 Savings accountsAl Arafah Islami Bank Ltd., Dhaka 63,492 61,297 Bank Al Falah Ltd., Dhaka 36,109 35,416 Social Islami Bank Ltd., Principal Branch, Dhaka 66,702 64,644

166,303 161,357 Fixed deposits - -

- - 251,389,642 377,477,308

4a.2 Outside Bangladesh (NOSTRO Accounts)

Current accountAB Bank Ltd., Mumbai, India 327,947 6,644,484 Banca Nazionale, del Lavoro, Rome, Italy 708,632 1,002,246 Bank of Bhutan Phuentsholing, Bhutan 12,070,342 4,191,187 The Bank of Tokyo Mitsubishi Ltd., Japan 8,633,221 3,292,821 SMBC, Tokyo, Japan 10,439,935 4,884,087 Citibank N.A., Mumbai, India 621,790 7,318,508 Citibank N.A., London , UK 14,492,798 9,394,222 Citibank N.A., New York, USA 56,046,201 17,997,373 Citibank N.A., New York, USA (Off-shore Banking) 429,879 440,662 Commerz Bank AG, Frankfurt , Germany (EURO) 54,469,945 29,960,877 Commerz Bank AG, Frankfurt , Germany (US$) 251,018 618,873 Commonwealth Bank of Australia, Australia 5,033,160 1,972,977 Credit Suisse (First Boston), Switzerland 5,927,202 3,791,449 Habib American Bank, New York, USA 7,927,789 12,742,153 Habib Metropolitan Bank Ltd, Karachi 18,116,329 33,567,690 HDFC Bank Limited, Kolkata, India 32,118,229 27,949,005 HSBC Bank USA, New York, USA 151,564,812 91,803,153 HSBC Bank Middle East Ltd., Karachi, Pakistan 84,844 2,541 HSBC PLC, London, UK 50,043,048 17,085,340 HANA Bank, Seoul 3,755,849 - ICICI Bank Ltd, Mumbai, India 10,295,770 32,738,763 Intesa Sanpaolo SPA, Milano, Italy 375,130 538,287 J. P. Morgan Chase Bank, New York 37,666,149 10,361,238 Mashreq Bank PSC, New York, USA 527,580,408 445,616,228 Mashreq Bank PSC, Mumbai, India 9,429,091 12,947,048 National Westminister Bank, London, UK 19,477,472 7,754,862 The National Commercial Bank, Jeddah 3,376,263 1,276,803 Nepal Bangladesh Bank Ltd., Kathmandu, Nepal 6,730,567 7,287,220 People’s Bank, Colombo, Sri Lanka 57,071,561 10,710,884 Skandinaviska Enskilda Banken, Sweden 2,641,429 1,915,572 Sonali Bank, Kolkata, India 9,146,985 16,321,338 Standard Chartered Bank, Kolkata, India 5,800,084 23,666,718 Standard Chartered Bank, New York, USA 55,539,532 43,555,382 Standard Chartered Bank, Singapore 132,751,323 206,634,472 Standard Chartered Bank, Frankfurt, Germany 8,715,241 2,891,913 State Bank of India, Kolkata - 16,786 The Bank of Nova Scotia, Toronto, Canada - 4,073,036 Unicredito Italiano SPA, Milano, Italy 34,428,476 3,226,925 Wells Fargo Bank N. A. Newyork 38,652,955 32,444,839 (Annexure -A) 1,392,741,405 1,138,637,962




4a.3 Maturity grouping of balance with other banks and financial institutionsPayable on demand 1,607,885,505 1,488,652,660 Up to 1 month 16,630 16,136 Over 1 month but not more than 3 months 36,079,239 27,301,253 Over 3 months but not more than 6 months - - Over 6 months but not more than 1 year 149,673 145,221 Over 1 year but not more than 5 years - - Over 5 years - -

1,644,131,047 1,516,115,270

5 Money at call and short notice - -

6 Consolidated investmentsGovernmentPrime Bank Limited (note-6a) 44,936,697,967 34,395,651,805 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

44,936,697,967 34,395,651,805

OthersPrime Bank Limited (note-6a) 4,733,737,225 4,776,646,818 Prime Bank Investment Limited 1,399,569,819 1,441,557,511 Prime Bank Securities Limited 741,051,850 696,472,977 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

6,874,358,894 6,914,677,306 Less: Inter-company transaction 3,808,530,984 3,794,500,832

3,065,827,910 3,120,176,474 48,002,525,877 37,515,828,279

6a Investments of the Banki) Investment classified as per Bangladesh Bank Circular:

Held for trading (HFT) 9,939,151,576 17,022,719,665 Held to maturity (HTM) 35,007,440,491 17,390,298,140 Other securities 4,723,843,125 4,759,280,818

49,670,435,192 39,172,298,623 ii) Investment classified as per nature:a) Government securities:28 days treasury bills - - 91 days treasury bills 1,075,511,325 483,460,154 182 days treasury bills 381,038,068 393,210,802 364 days treasury bills 1,293,085,866 4,247,808,390 5 years treasury bills - -

2,749,635,259 5,124,479,346 30 days Bangladesh Bank bills 1,217,357,114 - Government bonds:Prize bonds 5,105,900 2,634,000 Government bonds - (note-6a.2) 40,964,599,694 29,268,538,459

40,969,705,594 29,271,172,459 44,936,697,967 34,395,651,805

Treasury Bill & Bond amounting to Tk. 2,625,785,597.52 was placed as lien against ALS from Bangladesh Bank on 30.12.2012




b) Other investments:Debentures of HBFC-bearing interest rate @ 5.5% (note-6a.3) 15,000,000 20,000,000 Dhaka Bank Subordinated Bond interest rate @ 11.65% (note-6a.4) 171,430,361 171,595,403 National Bank Subordinated Bond interest rate @ 11.50% (note-6a.5) 201,661,111 201,661,111 DBH Zero coupon bond interest rate @ 8.25% (note-6a.6) 54,663,022 151,813,187 IDLC Zero coupon bond interest rate @ 8.25% (note-6a.7) 18,152,329 50,402,795 Orascom bond interest rate @ 13.50% (note-6a.8) 150,112,500 200,150,000 Investment in subsidiaries (note-6a.9) 3,808,530,984 3,794,500,832 Shares (note-6a.10) 314,186,918 186,523,490

4,733,737,225 4,776,646,818 49,670,435,192 39,172,298,623

6a.1 Maturity grouping of investments

On demand - - Up to 1 month 4,539,349,166 721,734,628 Over 1 month but not more than 3 months 615,376,253 418,719,985 Over 3 months but not more than 6 months 955,636,877 1,752,799,503 Over 6 months but not more than 1 year 1,022,318,981 2,920,653,204 Over 1 year but not more than 5 years 15,098,785,391 9,334,444,098 Over 5 years 27,438,968,524 24,023,947,205

49,670,435,192 39,172,298,623

6a.2 Government bonds

Name of the bonds

HTM3 years T & T bonds - - 2 years Bangladesh Government Islami Investment Bonds 850,000,000 850,000,000 5 years Bangladesh Government treasury bonds (7.80%-9.00%) 6,652,563,435 925,083,228 10 years Bangladesh Government treasury bonds(8.50%-11.74%) 18,007,844,578 8,305,142,769 15 years Bangladesh Government treasury bonds(8.69%-14.00%) 5,779,949,329 4,264,474,884 20 years Bangladesh Government treasury bonds(9.10%-13.29%) 3,702,083,149 3,025,597,258

34,992,440,491 17,370,298,139 HFT3 years T & T bonds - - 2 years Bangladesh Government Islami Investment Bonds - - 5 years Bangladesh Government treasury bonds (10.60%-11.55%) 2,168,556,000 5,288,669,108 10 years Bangladesh Government treasury bonds(11.50%-11.80%) 2,656,291,708 6,300,427,787 15 years Bangladesh Government treasury bonds(11.80%-12.10%) 677,658,330 163,754,791 20 years Bangladesh Government treasury bonds(12.10%-12.28%) 469,653,165 145,388,634

5,972,159,203 11,898,240,320 40,964,599,694 29,268,538,459

6a.3 Debentures of Bangladesh House Building Finance Corporation - at redeemable value

Principal 100,000,000 100,000,000 Add: Accrued Interest - - Less: Redeemed up to 31 December 2012 (85,000,000) (80,000,000)Redeemable value 15,000,000 20,000,000

6a.4 Dhaka Bank Ltd. Subordinated Bond

Opening balance 171,595,403 171,595,403 Add: Interest accrued during the year 19,805,000 19,805,000 Less: Principal redemption during the year - - Less: Interest received during the year (19,970,042) (19,805,000)Redeemable value 171,430,361 171,595,403




6a.5 National Bank Ltd. Subordinated Bond Opening balance 201,661,111 201,661,111 Add: Interest accrued during the year 23,000,000 23,000,000 Less: Principal redemption during the year - - Less: Interest received during the year (23,000,000) (23,000,000)Redeemable value 201,661,111 201,661,111

6a.6 DBH Zero Coupon BondOpening balance 151,813,187 233,648,062 Add: Interest accrued during the year 7,916,928 14,993,338 Less: Principal redemption during the year (75,000,000) (75,000,000)Less: Interest received during the year (30,067,093) (21,828,213)Redeemable value 54,663,022 151,813,187

6a.7 IDLC Zero Coupon BondOpening balance 50,402,795 77,553,649 Add: Interest accrued during the year 2,771,904 5,125,216 Less: Principal redemption during the year (25,000,000) (25,000,000)Less: Interest received during the year (10,022,370) (7,276,070)Redeemable value 18,152,329 50,402,795

6a.8 Orascom BondPrincipal 200,150,000 250,187,500 Add: Interest accrued during the year 23,981,250 30,750,000 Less: Principal redemption during the year (50,000,000) (50,000,000)Less: Interest received during the year (24,018,750) (30,787,500)Redeemable value 150,112,500 200,150,000

6a.9 Investment in subsidiaries

Prime Bank Investment Limited 2,999,999,940 2,999,999,940 Prime Bank Securities Limited 712,500,000 712,500,000 Prime Exchange Co. Pte. Ltd., Singapore 10,993,235 10,993,235 PBL Exchange(UK) Ltd. 56,352,624 49,633,289 PBL Finance (Hong Kong) Limited 28,685,185 21,374,368

3,808,530,984 3,794,500,832

6a.10 Investment in sharesQuotedAB Bank Ltd. 32,918,300 6,892,375 Bank Asia Ltd. 17,987,037 3,872,420 BRAC Bank Ltd. 21,243,239 - The City Bank Ltd. 18,648,926 5,311,538 DESCO 27,121,550 4,727,166 Dhaka Bank Ltd. 20,855,770 - Eastern Bank Ltd. 29,608,038 5,802,255 Federal Insurance Company Bangladesh Ltd. 20,380 20,380 Jamuna Bank Ltd. 14,338,010 3,482,316 Lanka Bangla Finance Ltd. 23,395,426 - M. I. Cement Factory Ltd. - 3,608,921 MJL Bangladesh Ltd - 4,622,080 National Bank Ltd. 21,314,190 4,429,698 NLI First MF 9,980,000 - One Bank Ltd. 19,867,211 4,135,407 Titas Gas - 11,298,243 Uttara Bank Ltd. 37,009,980 -

294,308,058 58,202,799

Unquoted as on 31 December 2012Central Depository Bangladesh Limited (CDBL) 15,694,430 15,694,430 Investment in SWIFT 4,184,430 2,413,761 NLI First MF - 10,000,000 9% Preference share of BRAC Bank - 100,212,500

19,878,860 128,320,691 (Annexure -B) 314,186,918 186,523,490




7 Consolidated loans, advances and lease / Investments

Prime Bank Limited (note-7a) 153,440,706,958 132,028,898,117

Prime Bank Investment Limited 6,348,091,622 5,897,653,045

Prime Bank Securities Limited 404,029,700 193,021,110

Prime Exchange Co. Pte. Ltd., Singapore - -

PBL Exchange (UK) Ltd. - -

PBL Finance (Hong Kong) Limited - -

160,192,828,280 138,119,572,272

Less: Inter-company transactions 3,817,920,298 3,713,344,767

156,374,907,982 134,406,227,505

Consolidated bills purchased and discounted (note-8) 8,667,419,387 7,395,421,459

165,042,327,369 141,801,648,964

6a.11 (i) Disclosure regarding outstanding Repo Counterparty name Agreement date Reversal date Amount

Bangladesh Bank-(Assured liquidity support) 30.12.2012 01.01.2013 2,424,510,000 Bangladesh Bank-(Special Repo) 30.12.2012 01.01.2013 1,500,000,000 Standard Chartered Bank 30.12.2012 01.01.2013 2,374,310,059 Pubali Bank Ltd. 30.12.2012 01.01.2013 1,105,530,248 Total 7,404,350,307 6a.11 (ii) Disclosure regarding outstanding Reverse Repo

Counterparty name Agreement date Reversal date Amount - - - -

Total - 6a.12 Disclosure regarding Overall transaction of Repo and Reverse Repo

Counterparty name Minimum Maximum Daily average Outstanding during outstanding during outstanding during the year the year the year Securities sold under Repo With Bangladesh Bank 1,987,615,000 14,924,630,000 9,526,479,483 With other Banks & FIS 276,952,437 4,713,754,422 1,403,485,189 Securities purchased under Reverse Repo

From Bangladesh Bank - - - From other Banks & FIS - - -




7a Loans, advances and lease / investments of the Bank

i) Loans, cash credits, overdrafts, etc.

Inside BangladeshSecured overdraft / Quard against TDR 38,485,351,177 36,375,509,274 Cash credit / Murabaha 22,797,516,730 17,533,655,691 Loans (General) 30,396,292,698 22,300,158,827 House building loans 3,615,477,187 3,634,699,533 Loans against trust receipt 17,724,668,458 20,912,413,500 Payment against document 679,994,650 701,741,974 Retail loan 11,303,238,002 10,938,785,871 Lease finance / Izara (note - 7a.3) 8,186,003,760 7,556,800,614 Credit card 915,407,506 750,396,269 SME loan 988,948,830 1,278,065,027 Hire purchase 8,118,559,532 7,156,823,052 Other loans and advances 10,229,248,428 2,889,848,485

153,440,706,958 132,028,898,117 Outside Bangladesh - -

153,440,706,958 132,028,898,117

ii) Bills purchased and discounted (note-8a)

Payable Inside BangladeshInland bills purchased 5,499,981,492 4,617,715,263 Payable Outside BangladeshForeign bills purchased and discounted 1,949,160,113 2,201,816,628

7,449,141,605 6,819,531,891 160,889,848,563 138,848,430,008

7a.1 Net loans, advances and lease / investments

Gross performing loans, advances and lease / investments (note-7a) 160,889,848,563 138,848,430,008 Less:Non-performing loans, advances and lease / investments (note-7a.11) 6,168,499,440 1,908,248,000 Interest suspense (note-13a.6) 620,359,575 538,695,707 Provision for loans, advances and lease / investments (note-13a.3, 13a.5) 3,974,248,435 2,563,399,971

10,763,107,450 5,010,343,678 150,126,741,113 133,838,086,330

7a.2 Residual maturity grouping of loans, advances and lease / investments including bills purchased and discounted

Repayable on demand - - Up to 1 month 36,933,559,434 25,469,685,668 Over 1 month but not more than 3 months 34,024,057,815 36,007,310,917 Over 3 months but not more than 1 year 44,801,021,311 42,281,182,417 Over 1 year but not more than 5 years 42,229,227,840 33,027,948,535 Over 5 years 2,901,982,163 2,062,302,471

160,889,848,563 138,848,430,008

7a.3 Lease finance / Izara Lease rental receivable within 1 year 3,283,525,539 1,572,495,257 Lease rental receivable within 5 years 11,226,832,700 5,576,138,596 Lease rental receivable after 5 years 585,251,400 2,246,981,454 Total lease / Izara rental receivable 15,095,609,639 9,395,615,307 Less: Unearned interest receivable 6,909,605,879 1,838,814,693 Net lease / Izara finance 8,186,003,760 7,556,800,614




7a.4 Loans, advances and lease / investments under the following broad categories

Loans 92,157,839,051 78,119,733,152 Cash credits 22,797,516,730 17,533,655,691 Overdrafts 38,485,351,177 36,375,509,274

153,440,706,958 132,028,898,117 Bills purchased and discounted (note-8a) 7,449,141,605 6,819,531,891

160,889,848,563 138,848,430,008

7a.5 Loans, advances and lease / investments on the basis of significant concentration including bills purchased and discounted.

a) Loans, advances and lease / investments to Directors of the Bank - -

b) Loans, advances and lease / investments to Chief Executive and other senior executives 1,724,309,911 1,394,937,859

c) Loans, advances and lease / investments to customer groups i) Commercial lending 21,690,116,112 20,675,645,192 ii) Export financing 13,119,356,738 8,691,928,762 iii) House building loan 3,615,477,187 3,634,699,533 iv) Retail loan 11,303,238,002 10,938,785,871 v) Small and medium enterprises 12,230,784,130 9,429,394,225 vi) Special program loan 682,454,196 1,060,828,000 vii) Staff loan 11,201,263 4,462,142 viii) Industrial loans / investments detail (note-7a.5 d) 81,767,701,149 65,426,459,723 ix) Other loans and advances (SOD) 14,745,209,875 17,591,288,701

159,165,538,652 137,453,492,149 160,889,848,563 138,848,430,008

d) Details of Industrial loans / investmentsi) Agricultural industries 2,274,808,715 2,283,317,008 ii) Textile industries 26,070,842,203 13,330,206,646 iii) Food and allied industries 5,340,966,112 3,959,449,000 iv) Pharmaceutical industries 1,574,636,341 1,581,394,927 v) Leather, chemical, cosmetics, etc. 1,170,213,626 1,617,250,000 vi) Tobacco industries 204,570,425 35,619,485 vii) Cement and ceramic industries 5,113,194,980 2,949,673,646 viii) Service Industries 5,958,981,208 3,966,959,793 ix) Transport and communication industries 9,325,671,441 5,157,154,311 x) Other industries including bills purchase and discounted 24,733,816,098 30,545,434,907

81,767,701,149 65,426,459,723

7a.6 Loans, advances and leases / investments -geographical location-wise

Inside BangladeshUrbanDhaka Division 117,138,250,054 101,503,759,729 Chittagong Division 25,060,277,567 21,356,686,758 Khulna Division 5,214,202,263 4,376,951,766 Rajshahi Division 4,510,325,528 3,669,923,389 Barisal Division 150,519,568 175,568,285 Sylhet Division 1,993,477,795 1,649,254,200 Rangpur Division 1,020,742,969 930,136,252

155,087,795,744 133,662,280,379 RuralDhaka Division 3,866,632,368 3,441,718,745 Chittagong Division 1,014,279,804 791,768,625 Khulna Division 121,042,186 25,696,491 Rajshahi Division 487,631,644 255,683,128 Sylhet Division 312,466,817 671,282,640

5,802,052,819 5,186,149,629 Outside Bangladesh - -

160,889,848,563 138,848,430,008




7a.7 Sector-wise loans, advances and lease / investments including bills purchased and discountedPublic sector 107,324,320 330,736,692 Co-operative sector - 48,203,108 Private sector 160,782,524,243 138,469,490,208

160,889,848,563 138,848,430,008

7a.8 Details of pledged collaterals with the Bank

Collateral of movable / immovable assets 115,788,853,865 89,543,240,119 Local banks and financial institutions guarantee 3,010,813,582 3,924,012,894 Government guarantee 242,063,041 - Foreign banks guarantee 5,131,043 1,696,097 Export documents 6,466,293,749 5,323,242,682 Fixed deposit receipts 7,566,583,262 10,550,622,940 FDR of other banks 1,408,779,115 549,884,386 Government bonds 1,853,220 992,852 Personal guarantee 10,412,344,557 10,767,830,041 Other securities 15,987,133,129 18,186,907,997

160,889,848,563 138,848,430,008

7a.9 Details of large loans, advances and lease / investments

Number of clients with outstanding amount and classified loans / investments exceeding 10% of total capital of the Bank. Total capital of the Bank was Taka 25,751.53 million as at 31 December 2012 (Tk 24,068.59 million in 2011).

Number of clients 14 10Amount of outstanding advances / investments 45,574,440,000 31,478,100,000Amount of classified advances / investments * 632,544,000 Nil Measures taken for recovery Negotiation under process Not applicable

Outstanding (Tk. in million) Total Total Funded Non-funded (Tk. in million) (Tk. in million)

Ananta Group 1,244.75 1,926.43 3,171.19 -

Bangladesh Rural Advancement Committee (BRAC) - - - 1,820.02

Bismillah Group 2,496.42 620.68 3,117.10 -

Bulk Trade International Ltd. - 3,119.78 3,119.78 2,257.35

Concord Pragatee Consortium Ltd. - - - 2,868.83

ENA Properties 1,358.82 1,419.79 2,778.61 -

Energy Pac Confidence Group 1,773.42 895.51 2,668.93 1,968.12

Janata Flour & Dal Mills Ltd. 2,510.44 3,959.03 6,469.47 6,650.62

M/s. Kabir Steel & BSA Group 2,065.97 2,320.25 4,386.21 3,927.25

Noman Group 2,214.00 591.73 2,805.73 -

Prime Bank Investment Ltd 3,816.30 - 3,816.30 3,555.68

Project Builders Ltd. 2,942.00 1,772.17 4,714.17 -

Rural Power Company Ltd. - - - 2,043.73

Tamishna Group 2,101.97 739.15 2,841.12 3,115.86

T.K Group 634.78 5,051.07 5,685.86 3,270.65

23,158.86 22,415.58 45,574.44 31,478.10

Name of clients

* The amount relates to Bismillah Group. However, there are challanges which are under scrutiny of our Audit & Inspection and Bangladesh Bank.




7a.10 Particulars of loans, advances and lease / investments

i) Loans / investments considered good in respect of which the Bank is fully secured 131,232,363,211 105,407,519,801

ii) Loans / investments considered good against which the Bank holds no

security other than the debtors’ personal guarantee 26,399,477,686 10,767,830,041

iii) Loans / investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors 3,258,007,666 22,673,080,166

iv) Loans / investments adversely classified; provision not maintained there against - -

160,889,848,563 138,848,430,008 v) Loans / investments due by directors or officers of the banking

company or any of them either separately or jointly with any other persons (note-7a.5b+7a.5c.vii) 1,735,511,174 1,399,400,001

vi) Loans / investments due from companies or firms in which the directors of the Bank have interest as directors, partners or managing agents or in case of private companies, as members - -

vii) Maximum total amount of advances / investments, including temporary advances made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person. 1,735,511,174 1,399,400,001

viii) Maximum total amount of advances / investments, including temporary advances / investments granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in the case of private companies, as members - -

ix) Due from banking companies - - x) Classified loans and advances / investments

a) Classified loans and advances / investments on which interest has not been charged (note-7a.11) 6,168,499,440 1,908,248,000

b) Provision on classified loans and advances / investments (for details see note-13a.3) 1,949,076,445 778,227,982

c) Provision kept against loans / investments classified as bad debts 1,354,840,849 528,916,000d) Interest credited to Interest Suspense Account (note-13a.6) 620,359,575 538,695,707

xi) Cumulative amount of written off loans / investments

Opening Balance 2,574,963,826 2,374,986,436 Amount written off during the year 404,200,520 199,977,390

2,979,164,346 2,574,963,826 Amount realised against loans / investments previously written off 85,048,984 110,069,208 The amount of written off / classified loans / investments for which law suits have been filed (note-7a.14) 3,487,369,161 2,662,458,142

7a.11 Classification of loans, advances and lease / investments

UnclassifiedStandard including staff loan 150,891,349,342 135,761,469,008 Special mention account (SMA) 3,829,999,781 1,178,713,000

154,721,349,123 136,940,182,008 ClassifiedSub-standard 2,286,522,275 560,878,000 Doubtful 709,305,223 309,826,000 Bad / Loss 3,172,671,942 1,037,544,000

6,168,499,440 1,908,248,000 160,889,848,563 138,848,430,008




7a.12 Particulars of required provision for loans, advances and lease / investments

Base Rate

Status for provision %

General Provision

Loans/investments (Excluding SMA) 150,891,349,342 *Various 1,789,525,189 1,660,355,150

Interest receivable on loans/investments 951,727,418 1 9,517,274 6,995,138

Special mention account (SMA) 3,829,999,781 5 191,499,989 54,294,850

1,990,542,452 1,721,645,138

*General provision is kept @ 1% on general loans and advances / investments and 0.25% on small enterprise financing, 2% on certain other types of lending and 5% on consumer financing.

Base Rate

Status for provision %

Specific provisionSub-standard 2,014,100,959 20 402,820,192 83,732,000 Doubtful 377,075,126 50 188,537,563 118,590,000 Bad / Loss 1,354,840,849 100 1,354,840,849 528,916,000

1,946,198,604 731,238,000 Required provision for loans, advances and lease / investments 3,936,741,056 2,452,883,138 Total provision maintained (note - 13, 13a3 & 13a.5) 3,983,765,735 2,563,399,971 Excess / (short) provision at 31 December 2012 47,024,679 110,516,833

Bangladesh Bank letter dated 28/02/2013 advised to classify few customer accounts in the current year’s financials, accordingly we have considered those accounts under classification list. However, the Bangladesh Bank has extended the time for provisioning on such accounts upto 30.06.2013, if fail to recover/reschedule.

7a.13 Particulars of required provision on Off-balance Sheet Exposures

Base Rate

for Provision 1%

Acceptances and endorsements 33,064,522,464 330,645,225 289,634,163

Letter of guarantee 44,031,123,130 440,311,231 349,552,843

Letter of credit 30,602,172,770 306,021,728 297,066,633

Required provision on Off-balance Sheet Exposures 1,076,978,184 936,253,639

Total provision maintained (note - 13a.4) 1,080,000,000 940,000,000

Excess / (short) provision at 31 December 2012 3,021,816 3,746,361




7a.14 Suits filed by the Bank (Branch wise details)Agrabad Branch 182,223,605 158,485,605 Adamjee EPZ Branch 619,020 - Asad Gate Branch 20,978,451 21,209,134 Ashulia Branch 12,667,127 8,088,417 Banani Branch 7,339,256 1,271,718 Bangshal Branch 22,095,540 21,496,140 Barisal Branch 779,085 779,085 Bashundhara Branch 7,412,477 6,432,545 Bogra Branch 733,109,329 733,109,329 Head Office, FMD & Card 25,440,651 24,106,651 Court Road Branch 507,721 69,519 Cox’s Bazar Branch 2,122,930 - Dinazpur Branch 440,993 - Elephant Road Branch 3,715,619 1,756,759 Foreign Exchange Branch 413,947,087 5,793,408 Ganakbari Branch 683,550 975,050 Gulshan Branch 93,893,494 95,007,494 Halishahar Branch 385,000 - Hathazari Branch 6,167,879 - IBB, Amberkhana Branch 3,132,100 1,957,174 IBB, Dilkusha Branch 26,740,776 29,606,523 IBB, Mirpur Branch 270,000 100,000 IBB, O.R. Nizam Road Branch 33,187,610 30,059,610 IBB, Pahattali Branch 212,146 212,146 Jessore Branch 6,592,865 6,632,612 Joypara 1,978,190 956,190 Jubilee Road Branch 480,606,863 19,111,290 Kawran Bazar Branch 132,755,491 56,292,005 Khatunganj Branch 16,137,047 145,804,110 Khulna Branch 120,302,380 200,019,715 Laldighi East Branch 6,357,500 5,202,500 Madhabdi Branch 3,348,640 3,964,324 Mirpur-1 Branch 9,802,051 10,812,220 Motijheel Branch 763,638,244 659,995,269 Mohakhali Branch 2,012,365 2,012,365 Mouchak Branch 4,117,086 3,362,086 Moulvibazar Branch, Dhaka 100,648,973 100,648,973 Mymensingha Branch 8,150,000 - Naogaon Branch - 100,981,115 Narayanganj Branch 40,825,730 41,086,654 New Eskatan Branch 1,410,176 861,249 Oxygen More Branch 727,696 - Pallabi Branch 1,290,144 - Panthpath Branch 3,763,525 1,654,686 Rajshahi Branch 49,272,272 49,272,272 Rangpur Branch 857,888 314,135 Ring Road Branch 42,195,523 33,627,402 Sat Masjid Road Branch 1,604,025 1,604,025 SBC Tower Branch 5,329,753 5,329,753 Simrail Branch 5,465,265 7,280,251 SME Banking, Dhaka 19,891,879 6,892,287 Sremangal Branch 21,903,286 21,654,662 Sylhet Branch 20,615,350 20,570,912 Subidbazar Branch, Sylhet 2,414,000 964,000 Tongi Branch 2,432,493 2,432,493 Uposhahar Branch, Sylhet 1,447,800 1,395,200 Uttara Branch 11,403,213 11,207,078




3,487,369,161 2,662,458,142

8 Consolidated Bills purchased and discounted Prime Bank Limited (note-8a) 7,449,141,605 6,819,531,891Prime Bank Investment Limited - -Prime Bank Securities Limited - -Prime Exchange Co. Pte. Ltd., Singapore - -PBL Exchange (UK) Ltd. - -PBL Finance (Hong Kong) Limited 1,218,277,782 575,889,568

8,667,419,387 7,395,421,459

8a Bills purchased and discounted Payable in Bangladesh 5,499,981,492 4,617,715,263 Payable outside Bangladesh 1,949,160,113 2,201,816,628

7,449,141,605 6,819,531,891

8a.1 Maturity grouping of bills purchased and discounted Payable within one month 2,975,545,974 3,344,016,715 Over one month but less than three months 1,938,801,812 1,912,325,394 Over three months but less than six months 2,534,793,819 1,563,189,782 Six months or more - -

7,449,141,605 6,819,531,891

9 Consolidated fixed assets including premises, furniture and fixtures Prime Bank Limited (note-9a) 4,363,349,270 3,975,458,490 Prime Bank Investment Limited 22,809,876 27,599,950 Prime Bank Securities Limited 8,710,077 10,142,395 Prime Exchange Co. Pte. Ltd., Singapore 5,095,255 2,623,453 PBL Exchange (UK) Ltd. 18,875,772 17,065,888 PBL Finance (Hong Kong) Limited 964,587 513,704

4,419,804,836 4,033,403,880

9a Fixed assets including premises, furniture and fixtures of the BankProperty, Plant & EquipmentLand 2,200,907,410 2,195,907,410 Building 761,773,433 543,182,545 Furniture and fixtures 694,293,990 617,233,126 Office equipment and machinery 1,157,551,128 1,032,982,037 Vehicles 325,821,316 216,602,023 Library books 1,558,890 1,535,005

5,141,906,167 4,607,442,146 Leased property:Leased vehicles 31,690,384 31,690,384

ATMHardware & equipment 211,498,500 132,396,714 Furniture & fixtures 34,070,094 17,092,221

245,568,594 149,488,935

Off-shore Banking UnitsFurniture and fixtures 2,946,983 2,946,983 Office equipment and machinery 1,637,587 1,607,562 Vehicles 1,410,371 1,410,371

5,994,941 5,964,916 5,425,160,086 4,794,586,381

Less: Accumulated depreciation 1,214,728,832 970,149,429 4,210,431,254 3,824,436,952

Intangibles assetsSoftware-core banking 226,740,063 197,956,054 Software-ATM 28,235,444 28,235,444 Cost of intangibles assets 254,975,507 226,191,498 Less: Accumulated amortization 102,057,491 75,169,960

152,918,016 151,021,538 Net book value at the end of the year (See annexure-C for detail) 4,363,349,270 3,975,458,490




The fixed assets recognised and measurements policy are described in note 2.2.4

10 Consolidated other assets

Prime Bank Limited (note-10a) 4,087,797,994 2,941,514,147 Less: PBIL investment in Prime Bank Securities Ltd.(below) (37,500,000) (37,500,000)Less: Dividend of Prime Bank Investment Limited (note-10a) (239,999,995) - Less: Due from Investment in PBL Finance (Hong Kong) Limited (note-10a) (1,128,039,537) (560,463,177)

2,682,258,462 2,343,550,971

Prime Bank Investment Limited (investment in PBSL) 37,500,000 37,500,000 Prime Bank Investment Limited 41,455,905 129,062,408 Prime Bank Securities Limited 28,155,379 37,383,172 Prime Exchange Co. Pte. Ltd., Singapore 5,920,175 2,474,309 PBL Exchange (UK) Ltd. 1,936,520 6,521,429 PBL Finance (Hong Kong) Limited 1,739,542 1,150,083

116,707,521 214,091,401 2,798,965,983 2,557,642,372

10a Other assets of the BankStationery and stamps 22,512,393 15,110,147 Exchange adjustment account - 584,074 Loan to Off-shore Banking Units 4,124,190,642 2,966,262,332 Due from Off-shore Banking Units 146,642,463 289,605,535 Loan to PBL Finance (Hong Kong) Limited 1,128,039,537 560,463,177 Prepaid expenses 30,971,838 8,773,938 Interest / profit receivable on loan (note-10a.1) 951,727,418 699,513,772 Interest receivable on Govt. securities 1,008,186,693 701,079,687 Advance deposits and advance rent 185,487,221 153,215,480 Prepaid expenses against house furnishing 7,430,885 7,416,864 Branch adjustments account 61,205,540 123,571,698 Migration account (2,440) (121,465)Suspense account (note -10a.2) 166,334,111 431,245,616 Encashment of PSP / BSP 259,196,282 153,725,551 ATM 2,050,889 - Credit card 90,683,814 78,050,003 Sundry assets ( note -10a.3) 173,973,813 8,885,605

8,358,631,099 6,197,382,014 Less: Off-shore Banking Units 4,270,833,105 3,255,867,867

4,087,797,994 2,941,514,147

10a.1 Interest / profit receivable: Amount represents interest / profit receivable on loans, advances and lease / investments, interest on term placement, Government securities & foreign currency balance, etc.

10a.2 Suspense account includes TT / DD in transit, advance against Land/ Building, advance against new branch, advance against TA/ DA, printing and stationery, postage, suspense- others, clearing adjustment account etc.

10a.3 Sundry assetsProtested Bills 1,141,024,661 7,454,399 Less: Writeoff during the year (1,126,313,064) - Receivable from/ (Payable to) branches (123,449) 1,431,206 Others 159,385,664 -

173,973,813 8,885,605

At year-end management has performed detailed review of all protested bills and claims originated during the course of banking operation, and upon assessing their recovery prospect, amounts which are considered to be not recoverable have been written off after observing required formalities (note-13a.8).

10a.4 Particulars of required provision for other assets RatePurchase of credit card bills 71,000,000 100% 71,000,000 71,000,000 Protested bills 14,711,597 100% 14,711,597 7,454,399 Advance deposits and advance rent 1,212,244 100% 1,212,244 1,212,244 Others 159,385,664 100% 159,385,664 - Required provision for other assets 246,309,505 79,666,643 Total provision maintained (note - 13a.8) 247,111,936 81,000,000




Excess / (short) provision at 31 December 2012 802,431 1,333,357

11 Consolidated borrowings from other banks, financial institutions and agents

Prime Bank Limited (note-11a) 20,681,977,457 10,969,847,805 Prime Bank Investment Limited 3,933,012,530 3,578,091,569 Prime Bank Securities Limited 352,278,429 135,253,198 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

24,967,268,416 14,683,192,572 Less: Inter-company transactions 3,817,920,298 3,713,344,767

21,149,348,118 10,969,847,805

11a Borrowings from other banks, financial institutions and agents of the Bank

In Bangladesh (note-11a.1) 20,043,096,293 10,969,847,805 Outside Bangladesh (note-11a.2) 638,881,164 -

20,681,977,457 10,969,847,805

11a.1 In BangladeshCall deposits 14,900,000,000 7,880,000,000 PBL bond 2,500,000,000 2,500,000,000 Standard Chartered Bank, Bangladesh - 4,943,855 Bangladesh Bank (Off-shore Banking Units) - 245,558,700 Repo of Treasury Bills 2,424,510,000 - Refinance against SME loan from Bangladesh Bank 218,586,293 339,345,250

20,043,096,293 10,969,847,805

11a.2 Outside BangladeshThe Bank of Nova Scotia, Canada 81,964 - Doha Bank, Qatar 399,249,500 - United Bank Ltd., UAE 239,549,700 -

638,881,164 -

11a.3 Security against borrowings from other banks, financial institutions and agents

Secured (Treasury bills) 2,424,510,000 - Unsecured 18,257,467,457 10,969,847,805

20,681,977,457 10,969,847,805

11a.4 Maturity grouping of borrowings from other banks, financial institutions and agents

Payable on demand 14,900,000,000 7,880,000,000 Up to 1 month 3,063,391,164 120,000,000 Over 1 month but within 3 months - - Over 3 months but within 1 year - 469,847,805 Over 1 year but within 5 years 2,718,586,293 - Over 5 years - 2,500,000,000

20,681,977,457 10,969,847,805




12 Consolidated deposits and other accounts

Current deposits and other accountsPrime Bank Limited (note-12a.1.c) 27,373,823,258 23,628,852,206 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

27,373,823,258 23,628,852,206 Less: Inter-company transactions 79,745,846 3,057,570

27,294,077,412 23,625,794,636

Bills payable Prime Bank Limited (note-12a.1.c) 3,421,438,111 2,992,596,076 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

3,421,438,111 2,992,596,076 Savings bank / Mudaraba savings depositsPrime Bank Limited (note-12a.1.c) 19,188,831,632 17,943,888,911 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

19,188,831,632 17,943,888,911 Term / Fixed depositsPrime Bank Limited (note-12a.1.c) 132,068,779,059 115,250,383,779 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

132,068,779,059 115,250,383,779 Less: Inter-company transactions 10,706,364 303,499

132,058,072,695 115,250,080,280 181,962,419,850 159,812,359,903

12a Deposits and other accounts of the Bank

Deposits from banks (note -12a.1.a) 3,232,242,135 4,285,925,000 Deposits from customers (note-12a.1.b) 178,820,629,925 155,529,795,972

182,052,872,060 159,815,720,972 12a.1 a) Deposits from Banks

Current deposits and other accounts 37,755,074 28,874,000 Savings bank / Mudaraba savings deposits 477,642,721 855,359,000 Special notice deposits 466,844,340 801,722,000 Fixed deposits 2,250,000,000 2,599,970,000

3,232,242,135 4,285,925,000 b) Customer Deposits

i) Current deposits and other accountsCurrent / Al-wadeeah current deposits 9,223,716,222 8,787,796,884 Foreign currency deposits 3,794,404,102 3,917,832,972 Security deposits 15,276,866 84,940,823 Sundry deposits (note - 12a.2) 14,469,292,445 11,047,077,355

27,502,689,635 23,837,648,034 Less: Off-shore Banking Units 166,621,451 237,669,828

27,336,068,184 23,599,978,206




ii) Bills payable Pay orders issued 3,305,503,224 2,847,424,899 Pay slips issued 4,425,077 5,179,467 Demand draft payable 111,195,865 139,677,288 Foreign demand draft 313,592 313,592 T. T. payable 318 - Bill Pay ATM 35 830

3,421,438,111 2,992,596,076

iii) Savings bank / Mudaraba savings deposits 18,711,188,911 17,088,529,911

iv) Term / Fixed depositsFixed deposits / Mudaraba fixed deposits 80,358,078,398 70,570,841,509 Special notice deposits 7,944,713,645 7,136,150,650 Non resident Taka deposits 601,207,853 305,972,722 Scheme deposits 40,447,934,823 33,835,726,898

129,351,934,719 111,848,691,779 178,820,629,925 155,529,795,972 182,052,872,060 159,815,720,972

c) Deposits and other accountsCurrent deposits and other accountsDeposits from banks (note -12a.1.a) 37,755,074 28,874,000 Deposits from customers (note-12a.1.b.i) 27,336,068,184 23,599,978,206

27,373,823,258 23,628,852,206 Bills payableDeposits from banks (note -12a.1.a) - - Deposits from customers (note-12a.1.b.ii) 3,421,438,111 2,992,596,076

3,421,438,111 2,992,596,076 Savings bank / mudaraba savings depositsDeposits from banks (note -12a.1.a) 477,642,721 855,359,000 Deposits from customers (note-12a.1.b.iii) 18,711,188,911 17,088,529,911

19,188,831,632 17,943,888,911 Term / Fixed depositsDeposits from banks (note -12a.1.a) 2,716,844,340 3,401,692,000 Deposits from customers (note-12a.1.b.iv) 129,351,934,719 111,848,691,779

132,068,779,059 115,250,383,779 182,052,872,060 159,815,720,972

12a.2 Sundry deposits

F.C. held against back to back L/C 6,085,186,554 3,982,771,999 Sundry creditors 162,584,000 169,851,369 Risk fund and service charges (CCS and lease finance) 20,572,395 84,798,208 Sale proceeds of PSP / BSP 45,110,000 6,550,001 Margin on letters of guarantee 1,184,550,356 967,024,934 Margin on letters of credit 2,248,420,445 1,772,883,324 Margin on FDBP / IDBP, export bills, etc 87,103,659 124,670,097 Lease deposits 120,955,692 106,652,132 Interest / profit payable on deposits 2,538,613,828 2,322,719,001 Withholding VAT/Tax /Excise duty payable to Government Authority 447,366,607 408,707,850 Others 1,528,828,909 1,100,448,440

14,469,292,445 11,047,077,355




12a.3 Payable on demand and time depositsa) Demand depositsCurrent deposits 9,261,471,296 8,816,670,884 Savings deposits (10%) 1,918,883,163 1,794,388,892 Foreign currency deposits (Non interest bearing) 3,627,782,651 3,680,163,144 Security deposits 15,276,866 84,940,823 Sundry deposits 14,469,292,445 11,047,077,355 Bills payable 3,421,438,111 2,992,596,076

32,714,144,532 28,415,837,174

b) Time depositsSavings deposits (90%) 17,269,948,469 16,149,500,019 Fixed deposits 82,608,078,398 73,170,811,509 Special notice deposits 8,411,557,985 7,937,872,650 Deposits under schemes 40,447,934,823 33,835,726,898 Non resident Taka deposits 601,207,853 305,972,722

149,338,727,528 131,399,883,798 182,052,872,060 159,815,720,972

12a.4 Sector-wise break-up of deposits and other accountsGovernment 3,331,169,000 3,182,610,000 Deposit money banks 3,232,242,135 4,285,925,000 Other public 6,281,049,000 6,641,406,000 Foreign currency 3,627,782,651 3,680,163,144 Private 165,580,629,274 142,025,616,828

182,052,872,060 159,815,720,972

12a.5 Unclaimed deposits and valuablesCurrent deposits 66,084 285,444 Savings deposits 173,417 122,972 Demand Draft 275,745 150,122 SDR 974,487 789,500 Pay order 4,388,608 2,005,578

5,878,340 3,353,616

12a.6 Maturity analysis of deposits a) Maturity analysis of deposits from BanksPayable on demand - - Up to 1 month 37,755,074 28,874,000 Over 1 month but within 3 months 524,327,155 935,531,000 Over 3 months but within 1 year 2,250,000,000 2,599,970,000 Over 1 year but within 5 years 420,159,906 721,550,000 Over 5 years but within 10 years - - Over 10 years - -

3,232,242,135 4,285,925,000

b) Maturity analysis of customer deposits excluding bills payablePayable on demand - - Up to 1 month 28,653,601,490 22,650,135,954 Over 1 month but within 3 months 39,295,756,247 34,968,176,650 Over 3 months but within 1 year 36,174,586,587 42,721,335,350 Over 1 year but within 5 years 47,903,487,671 42,616,651,942 Over 5 years but within 10 years 23,365,881,479 9,577,546,384 Over 10 years 5,878,340 3,353,616

175,399,191,814 152,537,199,896

c) Maturity analysis of bills payablePayable on demand 3,421,438,111 2,992,596,076 Up to 1 month - - Over 1 month but within 3 months - - Over 3 months but within 1 year - - Over 1 year but within 5 years - - Over 5 years but within 10 years - - Over 10 years - -

3,421,438,111 2,992,596,076 182,052,872,060 159,815,720,972




13 Consolidated other liabilitiesPrime Bank Limited (note-13a) 13,311,117,157 10,069,949,491 Prime Bank Investment Limited 680,344,842 806,406,171 Prime Bank Securities Limited 46,762,599 52,074,061 Prime Exchange Co. Pte. Ltd., Singapore 11,246,368 11,457,388 PBL Exchange (UK) Ltd. 26,138,237 7,411,726 PBL Finance (Hong Kong) Limited 19,864,929 3,528,439

14,095,474,132 10,950,827,275

13a Other liabilities of the Bank

Foreign currency held against EDF loan 2,198,309,830 1,545,582,036 Exchange equalization account (note - 13a.7) - 4,523,326 Exchange adjustment account 1,298,288 - Expenditure and other payables 78,241,569 84,951,171 Provision for bonus 279,347,201 368,115,248 Obligation under finance lease (note-13a.9) 9,750,730 15,471,597 Provision for income tax (note - 13a.1) 2,730,498,965 2,273,387,554 Deferred tax liability (note-13a.2) 1,097,321,222 911,021,222 Unearned commission on bank guarantee 126,153,370 45,760,373 Credit card 700 209,448 Provision for gratuity 591,083,488 403,599,750 Provision for off-balance sheet exposures (note-13a.4) 1,080,000,000 940,000,000 Provision for Off-shore Banking Units (note-13a.5) 60,500,000 60,500,000 Fund for employee welfare fund (EWF) 10,672,000 13,600,000 Fund for Prime Bank Foundation (PBF) 213,405,000 271,900,000 Provision for loans and advances / investments (note - 13a.3) 3,913,748,435 2,502,899,971 Provision for Interest receivable on loans and advances / investments (note- 38a) 9,517,300 - Provision for diminution in value of investments (note-38a) 43,797,548 - Interest suspense account (note - 13a.6) 620,359,575 538,695,707 ATM - 331,965 Other liabilities - 8,400,123 Other provision (note - 13a.8) 247,111,936 81,000,000

13,311,117,157 10,069,949,491 13a.1 Provision for income tax

Advance taxBalance of advance income tax on 1 January 9,203,364,417 6,442,051,751 Paid during the year 1,992,688,589 2,761,312,666 Settlement of previous year’s tax liability - -

11,196,053,006 9,203,364,417

ProvisionBalance of provision on 1 January 11,476,751,971 8,569,431,971 Provision of previous year (note-39a) - 40,817,745 Provision made during the year (note-39a) 2,449,800,000 2,866,502,255

13,926,551,971 11,476,751,971 Net balance at 31 December 2,730,498,965 2,273,387,554

* Corporate tax position of the bank is shown in annexure-D

13a.2 Deferred tax liability

Deferred tax liabilityBalance as on 1 January 866,620,593 642,120,593 Add: Provision for revaluation of land and building (note-17) 44,400,629 44,400,629 Add: Addition / Adjustment during the year (note-39a) 186,300,000 224,500,000 Balance as on 31 December 1,097,321,222 911,021,222

An amount of Tk. 186,300,000/- has been made against provision for deferred tax liability for the current year on account of depreciation & accrued interest on Government Securities.




13a.3 Provision for loans, advances and lease / investmentsMovement in specific provision on classified loans / investments: Provision held as on 1 January 778,227,982 642,136,164

Less: Fully provided debts written off during the year (404,200,520) (199,977,390)Add: Recoveries of amounts previously written off 85,048,984 110,069,208 Add: Specific provision made during the year for other accounts - 42,886,010 Less: Provision no longer required - (42,886,010)Add: Net charge to profit and loss account (note-38a) 1,490,000,000 226,000,000 Provision held as on 31 December 1,949,076,445 778,227,982

Movement in general provision on unclassified loans / investmentsProvision held as on 1 January 1,724,671,990 1,462,558,000 Add: Amount transferred to classified provision - (42,886,010)Add: General provision made during the year (note-38a) 240,000,000 305,000,000 Provision held as on 31 December 1,964,671,990 1,724,671,990

3,913,748,435 2,502,899,971

13a.4 Provision for off-balance sheet exposuresProvision held as on 1 January 940,000,000 810,000,000 Add: Amount transferred from classified provision - - Add: Provision made during the year (note-38a) 140,000,000 130,000,000 Provision held as on 31 December 1,080,000,000 940,000,000

13a.5 Provision for Off-shore Banking UnitsProvision held as on 1 January 60,500,000 60,500,000 Add: Provision made during the year (note-38a) - - Provision held as on 31 December 60,500,000 60,500,000

13a.6 Interest suspense account Balance as on 1 January 538,695,707 360,883,878 Add: Prior year adjustment (note-2.1.9) - 28,053,160 Add: Amount transferred to “interest suspense” account during the year 358,662,232 1,302,263,675 Less: Amount recovered from “interest suspense” account during the year (116,255,174) (1,101,726,798)Less: Amount written-off during the year (160,743,191) (50,778,208)Balance as on 31 December 620,359,575 538,695,707

13a.7 Exchange equalization account Balance as on 1 January 4,523,326 4,523,326 Less: Transfer during the year 4,523,326 - Balance as on 31 December - 4,523,326

13a.8 Other provision for classified assets Balance as on 1 January 81,000,000 81,000,000 Add: Addition during the year (note-38a) 1,292,425,000 - Less: Adjustment during the year (1,126,313,064) - Balance as on 31 December 247,111,936 81,000,000

At year-end management has performed detailed review of all protested bills and claims originated during the course of banking operation, and upon assessing their recovery prospect, amounts which are considered to be not recoverable have been written off after observing required formalities (note-10a.3).

13a.9 Obligation under finance leaseMinimum lease rental payableWithin 1 year 7,454,973 8,286,528 Above 1 year but within 5 years 3,064,950 8,708,312

10,519,923 16,994,840 Leas: Finance charge payable 769,193 1,523,243

9,750,730 15,471,597




14 Share capital

14.1 Authorized capital

2,500,000,000 ordinary shares of Taka 10 each 25,000,000,000 10,000,000,000

14.2 Issued, subscribed and fully paid up capital

30,000,000 ordinary shares of Taka 10 each issued for cash 300,000,000 300,000,000

790,244,129 ordinary shares of Taka 10 each issued as bonus shares 7,902,441,290 6,342,822,180

115,527,340 ordinary shares of Taka 10 each issued as right shares 1,155,273,400 1,155,273,400

9,357,714,690 7,798,095,580

14.3 History of paid-up capital

Given below the history of raising of share capital of Prime Bank Limited:

Accounting year Declaration No of share Value in capital Cumulative

1995 Opening capital 10,000,000 100,000,000 100,000,000

1996 60% Bonus share 6,000,000 60,000,000 160,000,000

1997 25% Bonus share 4,000,000 40,000,000 200,000,000

1999 Initial Public Offer (IPO) 20,000,000 200,000,000 400,000,000

2000 25% Bonus share 10,000,000 100,000,000 500,000,000

2001 20% Bonus share 10,000,000 100,000,000 600,000,000

2002 16.67% Bonus share 10,000,000 100,000,000 700,000,000

2003 42.86% Bonus share 30,000,000 300,000,000 1,000,000,000

2004 40% Bonus share 40,000,000 400,000,000 1,400,000,000

2005 25% Bonus share 35,000,000 350,000,000 1,750,000,000

2006 30% Bonus share 52,500,000 525,000,000 2,275,000,000

2007 25% Bonus share 56,875,000 568,750,000 2,843,750,000

2008 25% Bonus share 71,093,750 710,937,500 3,554,687,500

2009 30% Bonus share 106,640,620 1,066,406,200 4,621,093,700

25% right share 115,527,340 1,155,273,400 5,776,367,100

2010 35% Bonus share 202,172,848 2,021,728,480 7,798,095,580

2011 20% Bonus share 155,961,911 1,559,619,110 9,357,714,690 935,771,469 9,357,714,690




14.4 Group capital adequacy ratio (Consolidated)In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no. 35 dated December 29, 2010, required capital of the Bank (Consolidated) at the close of business on 31 December 2012 was Taka 20,510,265,643 as against available core capital of Taka 20,663,658,556 and supplementary capital of Taka 5,251,991,206 making a total capital of Taka 25,915,649,762 thereby showing a surplus capital / equity of Taka 5,405,384,119 at that date. Details are shown below:

Core capital (Tier-I)Paid-up capital (note-14.2) 9,357,714,690 7,798,095,580 Share premium (note-14.8) 2,241,230,396 2,241,230,396 Minority interest (note-14.9) 67 63 Statutory reserve (note-15) 6,839,527,566 5,772,509,105 Surplus in consolidated profit and loss account / Retained earnings (note-19) 2,225,185,837 2,931,809,566

20,663,658,556 18,743,644,710

Supplementary capital (Tier-II)

General provision maintained against unclassified loan / investments (note-13a.3) 1,964,671,990 1,724,671,990 General provision on off-balance sheet exposures (note-13a.4) 1,080,000,000 940,000,000 General provision on off-shore Banking Units (note-13a.5) 60,500,000 60,500,000 Revaluation gain / loss on investments-50% of total (note-16) 21,017,432 129,669,272 Revaluation reserve for equity instruments-10% of market gain - - Revaluation reserve-50% of total (note-17) 125,801,783 125,801,783 Prime Bank Sub-ordinated Bond 2,000,000,000 2,500,000,000 Exchange equalization account (note-13a.7) - 4,523,326

5,251,991,206 5,485,166,371 A) Total capital 25,915,649,762 24,228,811,081

Total assets including off-balance sheet exposures 346,356,371,815 302,050,785,816 B) Total risk weighted assets 205,102,656,431 194,379,600,000 C) Required capital based on risk weighted assets (10% on B) 20,510,265,643 19,437,960,000 D) Surplus (A-C) 5,405,384,119 4,790,851,081 Capital adequacy ratio 12.64% 12.46%

Capital requirement Required Held Required HeldTier - I 5% 10.08% 5% 9.64%Tier -II 5% 2.56% 5% 2.82%Total 10.00% 12.64% 10.00% 12.46%

Capital adequacy ratio (Solo Basis)

Core capital (Tier-I)Paid-up capital (note-14.2) 9,357,714,690 7,798,095,580 Share premium (note-14.8) 2,241,230,396 2,241,230,396 Statutory reserve (note-15) 6,839,527,566 5,772,509,105 Surplus in consolidated profit and loss account / Retained earnings (note-19a) 2,072,227,283 2,779,682,107

20,510,699,935 18,591,517,188

Supplementary capital (Tier-II)General provision maintained against unclassified loan / investments (note-13a.3) 1,964,671,990 1,724,671,990 General provision on off-balance sheet exposures (note-13a.4) 1,080,000,000 940,000,000 General provision on off-shore Banking Units (note-13a.5) 60,500,000 60,500,000 Revaluation gain / loss on investments-50% of total (note-16a) 9,859,846 121,579,868 Revaluation reserve-50% of total (note-17) 125,801,783 125,801,783 Prime Bank Sub-ordinated Bond 2,000,000,000 2,500,000,000 Exchange equalization account (note-13a.7) - 4,523,326

5,240,833,619 5,477,076,967 A) Total Capital 25,751,533,554 24,068,594,155

Total assets including off-balance sheet exposures 345,020,328,117 301,005,598,862 B) Total risk weighted assets 202,339,782,174 193,257,100,000 C) Required capital based on risk weighted assets (10% on B) 20,233,978,217 19,325,710,000 D) Surplus (A-C) 5,517,555,337 4,742,884,155 Capital adequacy ratio 12.73% 12.45%

Capital requirement Required Held Required HeldTier - I 5% 10.14% 5% 9.62%Tier -II 5% 2.59% 5% 2.83%Total 10.00% 12.73% 10.00% 12.45%




14.5 Percentage of shareholdings at the closing date

Particulars 2012 2011 2012 2011Taka Taka % %

Sponsors 3,795,534,470 3,177,407,770 40.56% 40.75%Financial Institutions 1,882,371,040 1,634,016,860 20.12% 20.95%Foreign Investors 356,952,120 142,822,810 3.81% 1.83%Non- resident Bangladeshi 50,310,430 60,180,260 0.54% 0.77%General Public 3,272,546,630 2,783,667,880 34.97% 35.70%

9,357,714,690 7,798,095,580 100.00% 100.00%

14.6 Shareholding range on the basis of shareholdings as at 31 December 2012

Shareholding range Number of share holders

TakaShare Percentage

Less than 500 10,481 1,825,733 0.20%500- 5,000 10,626 17,788,086 1.90%5,001 - 10,000 1,260 8,910,148 0.95%10,001 - 20,000 643 9,013,459 0.96%20,001 - 30,000 218 5,374,212 0.57%30,001 - 40,000 109 3,742,274 0.40%40,001 - 50,000 71 3,172,749 0.34%50,001 - 100,000 192 13,387,464 1.43%100,001 - 1,000,000 230 69,481,241 7.43%Over 1,000,000 134 803,076,103 85.82%

23,964 935,771,469 100.00%

14.7 Name of the Directors and their shareholdings as at 31 December 2012

Sl Name of the Directors Status Opening position Closing position % of shares as at

31.12.20121 Mr. Md. Shirajul Islam Mollah Chairman 9,640,093 18,768,111 2.01 2 Mr. M. A. Khaleque Vice Chairman 16,550,622 19,860,746 2.12 3 Mr. Mizanur Rahman Bhuiyan Vice Chairman - 18,720,079 2.00

4 Mrs. Marina Yasmin Chowdhury Director - 18,983,935 2.03

5 Mrs. Nasim Anwar Hossain Director - 22,150,681 2.37 6 Mrs. Nazma Haque Director - 18,798,231 2.01 7 Mr. Khandker Mohammad Khaled Director 21,644,226 25,973,071 2.788 Quazi Sirazul Islam Director 12,409,969 18,741,962 2.009 Mrs. Salma Huq Director - 29,322,129 3.1310 Mrs. Muslima Shirin Director - 18,716,136 2.0011 Mr. Mafiz Ahmed Bhuiyan Director 10,120,151 18,719,181 2.0012 Mr. Md. Nader Khan Director - 34,563,056 3.6913 Mr. Imran Khan Director - 18,716,670 2.0014 Mr. Md. Shahadat Hossain Director - 25,283,258 2.7015 Mr. Nafis Sikder Director 18,736,602 23,478,344 2.51

16Mr. Tanjil Chowdhury (Representative of East Coast ShippingLines Ltd.)

Director 9,040,272 18,728,326 2.00 (Share holding

of East Cost Shipping Lines Ltd.)

17 Prof. Ainun Nishat Depositor Director - - - 18 Mr. Manzur Murshed Depositor Director 22,180 26,616 0.00319 Prof. Dr. Mohammed Aslam Bhuiyan Independent Director - - - 20 Mr. Md. Ehsan Khasru Managing Director - - -

98,164,115 349,550,532




14.8 Share premium

11,552,734 ordinary shares of Taka 200 each per share 2,310,546,800 2,310,546,800 Less: Income tax deduction at source @ 3% on total premium 69,316,404 69,316,404

2,241,230,396 2,241,230,396

14.9 Minority interestShare capital 60 60 Retained earnings 7 3

67 63

15 Statutory reserveBalance on 1 January 5,772,509,105 4,419,319,123 Addition during the year ( 20% of pre-tax profit) 1,067,018,461 1,353,189,982 Balance at 31 December 6,839,527,566 5,772,509,105

16 Consolidated revaluation gain / loss on investments Prime Bank Limited (note-16a) 19,719,692 243,159,736 Gain on revaluation of Investment at Prime Exchange Co. Pte. Ltd., Singapore 5,315,965 4,765,890

Gain on revaluation of Investment at Prime Exchange (UK) Ltd. 8,198,026 7,274,926 Gain on revaluation of Investment at PBL Finance (Hong Kong) Limited 8,801,182 4,137,992

42,034,865 259,338,544

16(a) Revaluation gain / loss on investments of the BankOpening balance on 1 January 243,159,736 1,416,526,260 Add: Amortized/Revaluation Gain 145,134,659 161,342,461 Less: Adjustment of amortization/revaluation gain against sale/maturity (368,669,109) (1,334,266,010)Add: Adjustment of revaluation gain/(loss) of OBU fixed assets 94,406 (442,975)Less: Adjustment of Revaluation loss - -

19,719,692 243,159,736

17 Revaluation reserveBalance on 1 January 296,004,196 296,004,196 Addition during the year - - Balance at 31 December 296,004,196 296,004,196 Less: Provision for deferred tax (44,400,629) (44,400,629)

251,603,567 251,603,567

The Bank revalued the assets of Land and Buildings details described in note 2.5

18 Consolidated foreign currency translation gain/ (loss)Prime Bank Limited (note-18a) 5,015,711 8,694,724 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore 141,298 453,880 PBL Exchange (UK) Ltd. (152,759) (1,260,809)PBL Finance (Hong Kong) Limited (494,062) 170,837

4,510,188 8,058,632

18a Foreign currency translation gain/ (loss)Balance on 1 January 8,694,724 - Addition during the year (3,679,013) 8,694,724 Balance at 31 December 5,015,711 8,694,724




19 Consolidated retained earnings / movement of profit and loss accountPrime Bank Limited (note-19a) 2,068,548,270 2,788,376,831 Prime Bank Investment Limited 326,488,306 602,129,749 Prime Bank Securities Limited 33,096,718 4,495,828 Prime Exchange Co. Pte. Ltd., Singapore 30,646,814 27,172,736 PBL Exchange (UK) Ltd. (45,540,613) (29,966,981)PBL Finance (Hong Kong) Limited 47,761,808 3,315,705

2,461,001,303 3,395,523,868 Less: Minority Interest (7) (3)Less: Dividend of Prime Bank Investment Limited (239,999,995) (450,000,000)Less: Profit Remitted by Prime Exchange Co. Pte. Ltd., Singapore - (5,655,667)Less: Foreign currency translation gains 4,184,536 (8,058,632)

2,225,185,837 2,931,809,566

19a Retained earnings / movement of profit and loss account of the BankBalance on 1 January 2,779,682,107 2,824,985,571 Prior year adjustment (note-2.1.9) - (15,696,557)Addition during the year 2,698,992,305 3,634,129,909 Transfer to statutory reserve (1,067,018,461) (1,353,189,982)Cash dividend (779,809,558) (288,818,355)Issue of bonus shares (1,559,619,110) (2,021,728,480)Balance at 31 December 2,072,227,283 2,779,682,107 Add: Foreign currency translation gain/ (loss) (3,679,013) 8,694,724

2,068,548,270 2,788,376,831

19.1 Consolidated retained earnings brought forward from previous yearPrime Bank Limited (note-19.1 a) 440,253,439 498,742,180 Prime Bank Investment Ltd. 152,129,749 93,624,615 Prime Bank Securities Ltd. 4,495,828 - Prime Exchange Co. Pte. Ltd., Singapore 21,517,069 12,723,070 PBL Exchange (UK) Ltd. (29,966,981) (9,526,667)PBL Finance (Hong Kong) Limited 3,315,705 -

591,744,809 595,563,198 Foreign currency translation gain on 1 January 53,809 483,917

591,798,618 596,047,115

19.1.a Retained earnings brought forward from previous year of the BankBalance on 1 January 2,779,682,107 2,824,985,571 Prior year adjustment (note-2.1.9) - (15,696,557)Bonus shares issued (1,559,619,110) (2,021,728,480)Cash dividend paid (779,809,558) (288,818,355)Balance at 31 December 440,253,439 498,742,179 Foreign currency translation gain on 1 January - -

440,253,439 498,742,179

20 Consolidated contingent liabilities

20.1 Acceptances and endorsementsPrime Bank Limited (note-20a.1) 26,979,335,910 28,963,416,330 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

26,979,335,910 28,963,416,330




20.2 Letters of guaranteePrime Bank Limited (note-20a.2) 42,846,572,774 34,955,284,339 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

42,846,572,774 34,955,284,339 20.3 Irrevocable Letters of Credit


28,353,752,325 29,706,663,305 20.4 Bills for collection


10,007,661,530 7,429,741,406 108,187,322,539 101,055,105,380

20a Contingent liabilities of the Bank

20a.1 Acceptances and endorsementsBack to back bills (Foreign) 23,467,179,116 21,403,958,328 Back to back bills (Local) 8,735,295,070 10,668,342,246 Back to back bills (EPZ) 862,048,278 873,887,757

33,064,522,464 32,946,188,330 Less: Margin (6,085,186,554) (3,982,771,999)

26,979,335,910 28,963,416,330

20a.2 Letters of guaranteeLetters of guarantee (Local) 21,604,943,515 19,084,657,270 Letters of guarantee (Foreign) 22,426,179,615 16,837,652,003 Foreign counter guarantees - -

44,031,123,130 35,922,309,273 Less: Margin (1,184,550,356) (967,024,934)

42,846,572,774 34,955,284,339

Money for which the Bank is contingently liable in respect of guarantees given favoring:

Directors or officers - - Government 625,653,522 1,573,426,449 Banks and other financial institutions 3,924,452,092 1,242,185,336 Others 39,481,017,516 33,106,697,488

44,031,123,130 35,922,309,273 Less: Margin (1,184,550,356) (967,024,934)

42,846,572,774 34,955,284,339 20a.3 Irrevocable Letters of Credit

Letters of credit (Sight) 10,353,128,681 15,027,842,031 Letters of credit (Deferred) 7,598,796,833 5,560,834,089 Back to back L/C 12,650,247,256 10,890,870,508

30,602,172,770 31,479,546,628 Less: Margin (2,248,420,445) (1,772,883,324)

28,353,752,325 29,706,663,305

20a.4 Bills for collection

Outward bills for collection 10,094,765,189 7,554,411,504 10,094,765,189 7,554,411,504

Less: Margin (87,103,659) (124,670,097) 10,007,661,530 7,429,741,406

Bills for collection is a “Memorandum Item”. However bills for collection is shown under contingent liability as per Bangladesh Bank’s format for preparing financial statements.




21 Income statement

Income:Interest, discount and similar income (note-21.1) 27,200,349,631 20,398,468,504 Dividend income (note-24a) 254,477,345 467,592,509 Fees, commission and brokerage (note-21.2) 1,305,873,890 1,327,082,199 Gains less losses arising from dealing in securities - - Gains less losses arising from investment securities - - Gains less losses arising from dealing in foreign currencies (note-25a.1) 1,123,570,867 1,361,846,771 Income from non-banking assets - - Other operating income (note-26a) 1,017,962,459 652,092,975 Profit less losses on interest rate changes - -

30,902,234,192 24,207,082,957 Expenses:

Interest / profit paid on deposits, borrowings, etc. (note-23a) 17,410,286,124 12,647,982,518 Losses on loans, advances and lease/ investments - - Administrative expenses (note-21.3) 3,635,158,345 2,933,379,256 Other operating expenses (note-37a) 1,027,527,828 974,998,715 Depreciation on banking assets (note-36a) 278,429,742 223,772,560

22,351,402,039 16,780,133,049 8,550,832,153 7,426,949,909

21.1 Interest, discount and similar income

Interest income / Profit on investments (note-22a) 22,821,500,674 16,708,767,903 Interest income on treasury bills / reverse repo / bonds (note-24a) 3,806,588,945 2,625,327,712Gain on Discounted bond / bills (note-24a) 497,413,554 257,036,124 Gain on sale of shares (note-24a) 11,241,156 756,849 Gain on Govt. security trading (note-24a) 92,555,220 788,267,323 Interest on debentures (note-24a) 117,149,862 76,442,500

27,346,449,411 20,456,598,411 Less: Loss on sale of security trading (note-24a) 146,099,780 58,129,907

27,200,349,631 20,398,468,504

21.2 Fees, commission and brokerage

Commission (note-25a) 1,305,873,890 1,326,938,557 Settlement fee-PBIL (note-25a) - 143,642

1,305,873,890 1,327,082,199

21.3 Administrative expenses

Salary and allowances (note-27a) 2,673,292,974 2,057,720,184 Rent, taxes, insurance, electricity, etc. (note-28a) 430,873,148 367,568,017 Legal expenses (note-29a) 28,570,418 16,312,942 Postage, stamp, telecommunication, etc. (note-30a) 127,601,535 132,056,013 Stationery, printing, advertisement, etc. (note-31a) 304,366,321 298,731,953 Managing Director’s salary and fees (note-32) 11,448,000 9,192,067 Directors’ fees (note-33a) 5,152,571 3,569,924 Auditors’ fees (note-34a) 575,000 522,500 Repair of Bank’s assets (note-36a) 53,278,378 47,705,656

3,635,158,345 2,933,379,256




22 Consolidated interest income / profit on investment Prime Bank Limited (note-22a) 22,821,500,674 16,708,767,903 Prime Bank Investment Limited 861,132,742 815,326,644 Prime Bank Securities Limited 58,355,301 8,507,103 Prime Exchange Co. Pte. Ltd., Singapore 7,696 50,031 PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 66,752,109 14,159,476

23,807,748,522 17,546,811,157

22a Interest income / profit on investment of the BankLoans (General) / Musharaka 3,884,501,655 2,551,440,959 Loans against imported merchandise / Murabaha 11,259,564 15,668,727 Loans against trust receipts 3,293,804,014 2,697,573,875 Packing credit 89,028,712 87,132,916 House building loan 629,952,993 536,026,859 Lease finance / Izara 1,298,020,103 949,819,185 Hire purchase 1,082,367,798 767,445,920 Payment against documents 150,427,754 152,789,156 Cash credit / Bai-Muajjal 2,806,526,070 2,360,815,069 Secured overdraft 5,192,261,814 3,478,941,537 Consumer credit scheme 1,808,255,965 1,523,925,257 Portfolio loan - - Staff loan 109,932,550 89,705,776 Small and Medium Enterprise (SME) 700,008,462 355,645,152 Agricultural Loan 5,940,634 - Forced loan 216,807,034 43,461,973 Documentary bills purchased 926,720,192 900,572,000 Interest income from credit card 192,245,609 146,824,613 Other loans and advances / Investments 341,663,152 848,365 Total interest / profit on loans and advances / investments 22,739,724,075 16,658,637,340 Interest / profit on balance with other banks and financial institutions 296,162 264,038 Interest on call loans 1,846,528 17,383,333 Interest / profit received from foreign banks 79,633,909 32,483,192

22,821,500,674 16,708,767,903 An amount of Tk. 28,053,160 has been restated under the head loans against trust receipts, lease finance/izara, hire purchase and secured overdraft.

23 Consolidated interest / profit paid on deposits, borrowings, etc.Prime Bank Limited (note-23a) 17,410,286,124 12,647,982,518 Prime Bank Investment Limited 513,953,702 392,108,259 Prime Bank Securities Limited 41,618,117 3,044,198 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange(UK) Ltd. - - PBL Finance (Hong Kong) Limited 21,771,648 3,404,849

17,987,629,591 13,046,539,824

23a Interest / profit paid on deposits, borrowings, etc. of the Bank

i) Interest / profit paid on deposits:Savings bank / Mudaraba savings deposits 751,474,472 634,221,636 Special notice deposits 526,880,164 323,417,623 Term deposits / Mudaraba term deposits 9,752,597,209 7,428,847,528 Deposits under scheme 3,905,613,809 3,192,276,062 Foreign currency deposits (note-23a.1) 11,026,627 2,490,466 Others 16,108,114 8,773,346

14,963,700,395 11,590,026,661 ii) Interest / Profit paid for borrowings:Call deposits 1,017,498,487 179,134,736 Repurchase agreement (repo) 1,037,169,869 528,697,715 Bangladesh Bank-refinance 43,789,000 24,099,356 Local bank accounts 54,737,521 23,992,420 Foreign bank accounts 94,767 100,241 Islamic Bond Fund 4,283,154 14,431,389 PBL bond 289,012,931 287,500,000

2,446,585,729 1,057,955,857




17,410,286,124 12,647,982,518 23a.1 Foreign currency deposits

Interest / profit paid on F.C 5,026,115 458,941 Interest / profit paid on N.F.C.D 5,754,638 1,680,854 Interest / profit paid on R. F.C.D 245,874 350,671

11,026,627 2,490,466

24 Consolidated investment income

Prime Bank Limited (note-24a) 4,633,326,302 4,157,293,110 Prime Bank Investment Limited 48,825,592 64,887,747 Prime Bank Securities Limited 9,795,075 2,025,695 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

4,691,946,969 4,224,206,552 Less: Inter-company transactions 239,999,995 -

4,451,946,974 4,224,206,552

24a Investment income of the bank

Interest on treasury bills / Reverse repo / bonds 3,806,588,945 2,625,327,712 Interest on debentures / bonds 117,149,862 76,442,500 Gain on discounted bond / bills 497,413,554 257,036,124 Gain on sale of shares 11,241,156 756,849 Gain on Govt. security trading 92,555,220 788,267,323 Dividend on shares (note-24a.1) 254,477,345 467,592,509

4,779,426,082 4,215,423,017 Less: Loss on sale of security trading 146,099,780 58,129,907

4,633,326,302 4,157,293,110

24a.1 Dividend on Shares included dividend income of Tk. 239,999,995.20 from it’s subsidiary, Prime Bank Investment Limited.

25 Consolidated commission, exchange and brokerage

Prime Bank Limited (note-25a) 2,429,444,757 2,688,928,970 Prime Bank Investment Limited 59,713,167 150,521,169 Prime Bank Securities Limited 52,419,765 20,187,773 Prime Exchange Co. Pte. Ltd., Singapore 52,597,120 38,311,889 PBL Exchange (UK) Ltd. 33,937,621 19,185,250 PBL Finance (Hong Kong) Limited 24,627 (15,204)

2,628,137,057 2,917,119,847

25a Commission, exchange and brokerage of the Bank

Commission on L/Cs 300,728,857 342,140,821 Commission on L/Cs-back to back 583,764,007 571,342,706 Commission on L/Gs 315,647,991 315,888,659 Commission on remittance 68,781,312 64,334,299 Commission for services rendered to issue of shares 5,376 244,259 Merchant Commission 4,795,635 7,447,912 Underwriting Commission regarding Treasury bill/ Bond 17,972,030 17,174,070 Commission from sale of BSP /PSP 14,178,682 8,365,831

1,305,873,890 1,326,938,557 Exchange gain (note - 25a.1) - including gain from FC dealings 1,123,570,867 1,361,846,771 Settlement fees / Brokerage - 143,642

2,429,444,757 2,688,928,970

25a.1 Exchange gain

Exchange gain 1,129,771,972 1,360,253,211 Exchange gain-credit card - 1,632,775 Less: Exchange loss (6,201,105) (39,215)




1,123,570,867 1,361,846,771 26 Consolidated other operating income

Prime Bank Limited (note-26a) 1,017,962,459 652,092,975 Prime Bank Investment Limited 45,785,187 142,828,652 Prime Bank Securities Limited 859,572 328,617 Prime Exchange Co. Pte. Ltd., Singapore 320,683 294,300 PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 37,050,816 3,446,744

1,101,978,717 798,991,288

26a Other operating income of the Bank

Rent recovered 6,304,685 5,457,287 Service and other charges 201,195,485 60,034,388 Retail Income 220,364,527 197,319,531 Income from ATM service 88,912,804 55,246,951 Credit card income (note-26a.2) 39,803,095 34,549,851 Postage / telex / SWIFT/ fax recoveries 135,174,145 100,527,229 Incidental charges 35,206 111,233 Rebate from foreign Bank outside Bangladesh 149,696,068 106,866,438 Profit on sale of fixed assets 3,862,312 50,520 Miscellaneous earnings (note-26a.1) 172,614,132 91,929,547

1,017,962,459 652,092,975

26a.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank, notice fee and sale proceeds of various items, etc.

26a.2 Credit card income

Annual fees 22,108,347 18,873,535 Inter-change fees 16,812,014 13,472,340 Others 882,734 2,203,976

39,803,095 34,549,851

27 Consolidated salaries and allowances

Prime Bank Limited (note-27a) 2,673,292,974 2,057,720,184 Prime Bank Investment Limited 34,528,694 31,718,629 Prime Bank Securities Limited 13,586,783 4,737,211 Prime Exchange Co. Pte. Ltd., Singapore 19,563,859 15,287,014 PBL Exchange (UK) Ltd. 20,152,371 16,600,039 PBL Finance (Hong Kong) Limited 19,415,520 5,551,162

2,780,540,201 2,131,614,239

27a Salaries and allowances of the Bank

Basic pay 1,091,326,503 773,582,044 Allowances 809,496,228 580,941,549 Bonus 444,844,951 482,885,431 Bank’s contribution to provident fund 98,711,190 68,284,661 Retirement benefits 1,914,102 2,026,499 Gratuity 227,000,000 150,000,000




2,673,292,974 2,057,720,184 28 Consolidated rent, taxes, insurance, electricity, etc.

Prime Bank Limited (note-28a) 430,873,148 367,568,017 Prime Bank Investment Limited 11,274,109 10,451,172 Prime Bank Securities Limited 3,449,462 1,987,182 Prime Exchange Co. Pte. Ltd., Singapore 10,667,015 7,813,495 PBL Exchange (UK) Ltd. 12,652,718 12,175,298 PBL Finance (Hong Kong) Limited 5,366,562 3,463,147

474,283,014 403,458,311

28a Rent, taxes, insurance, electricity, etc. of the Bank

Rent, rates and taxes 222,399,771 186,694,137 Lease rent 8,160,897 7,998,996 Insurance 112,543,348 107,582,930 Power and electricity 87,769,132 65,291,954

430,873,148 367,568,017

29 Consolidated legal expenses

Prime Bank Limited (note-29a) 28,570,418 16,312,942 Prime Bank Investment Limited 339,295 415,014 Prime Bank Securities Limited 110,800 38,200 Prime Exchange Co. Pte. Ltd., Singapore 2,020,048 828,514 PBL Exchange (UK) Ltd. 1,309,766 627,619 PBL Finance (Hong Kong) Limited 41,201 337,667

32,391,528 18,559,956

29a Legal expenses of the Bank

Legal expenses 18,810,119 9,963,755 Other professional charges 9,760,299 6,349,187

28,570,418 16,312,942

30 Consolidated postage, stamp, telecommunication, etc.

Prime Bank Limited (note-30a) 127,601,535 132,056,013 Prime Bank Investment Limited 1,520,411 1,886,219 Prime Bank Securities Limited 1,162,653 633,364 Prime Exchange Co. Pte. Ltd., Singapore 1,502,209 2,447,401 PBL Exchange (UK) Ltd. 1,079,758 862,564 PBL Finance (Hong Kong) Limited 1,600,084 165,402

134,466,650 138,050,963

30a Postage, stamp, telecommunication, etc. of the Bank

Postage 13,378,380 17,456,614 Telegram, telex, fax and e-mail 39,380,812 48,587,510 Data communication 54,895,205 46,216,884 Telephone - office 18,930,111 18,457,953 Telephone - residence 1,017,027 1,337,052

127,601,535 132,056,013

31 Consolidated stationery, printing and advertisements, etc.

Prime Bank Limited (note-31a) 304,366,321 298,731,953 Prime Bank Investment Limited 1,472,157 2,383,560 Prime Bank Securities Limited 202,144 462,178 Prime Exchange Co. Pte. Ltd., Singapore 1,458,981 504,960 PBL Exchange (UK) Ltd. 798,382 807,192 PBL Finance (Hong Kong) Limited 181,151 214,629

308,479,135 303,104,472



31a Stationery, printing and advertisements, etc. of the BankOffice and security stationery 97,835,991 93,472,472 Computer consumable stationery 62,423,207 76,884,003 Publicity and advertisement 144,107,123 128,375,478

304,366,321 298,731,953 32 Managing Director’s salary and fees

Basic salary 5,940,000 5,029,000 Bonus 1,848,000 905,000 House rent allowance 1,320,000 1,348,667 Utility allowance 624,000 687,733 House maintenance allowance 960,000 1,032,667 Others 756,000 189,000

11,448,000 9,192,067 33 Consolidated Directors’ fees

Prime Bank Limited (note-33a) 5,152,571 3,569,924 Prime Bank Investment Limited 46,200 103,000 Prime Bank Securities Limited 18,975 26,700 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

5,217,746 3,699,624 33a Directors’ fees of the Bank

Meeting fees 1,715,000 1,890,000 Other benefits 3,437,571 1,679,924

5,152,571 3,569,924 Each Director is paid Tk.5,000/- per meeting per attendance.

34 Consolidated Auditors’ feesPrime Bank Limited (note-34a) 575,000 522,500 Prime Bank Investment Limited 115,000 62,700 Prime Bank Securities Limited 69,000 76,300 Prime Exchange Co. Pte. Ltd., Singapore 256,547 206,010 PBL Exchange (UK) Ltd. 319,455 295,156 PBL Finance (Hong Kong) Limited 187,516 149,839

1,522,518 1,312,505 34a Auditors’ fees of the Bank

External Audit fee 575,000 522,500 575,000 522,500

35 Charges on loan losses Loan -written off - - Interest waived - -

- - 36 Consolidated depreciation and repair of Bank’s assets

Prime Bank Limited (note-36a) 331,708,120 271,478,216 Prime Bank Investment Limited 6,351,755 6,603,129 Prime Bank Securities Limited 2,510,397 1,121,309 Prime Exchange Co. Pte. Ltd., Singapore 2,233,559 2,169,052 PBL Exchange (UK) Ltd. 2,760,602 2,647,076 PBL Finance (Hong Kong) Limited 292,004 55,101

345,856,437 284,073,883




36a Depreciation and repair of Bank’s assetsDepreciation - (see annexure-C for detail)Fixed assets 246,512,209 191,689,709 Leased assets 5,030,002 5,938,900

251,542,211 197,628,609 Amortization -(see annexure-C for detail)Software-core banking 24,056,251 23,320,407 Software-ATM 2,831,280 2,823,544

26,887,531 26,143,951 RepairsBuilding 3,964,557 4,137,754 Furniture and fixtures 3,041,227 5,628,106 Office equipment 26,522,967 24,256,541 Bank’s vehicles 9,020,713 7,420,205 Maintenance 10,728,914 6,263,050

53,278,378 47,705,656 331,708,120 271,478,216

37 Consolidated other expensesPrime Bank Limited (note-37a) 1,027,527,828 974,998,715 Prime Bank Investment Limited 12,942,088 24,435,919 Prime Bank Securities Limited 10,602,090 4,601,896 Prime Exchange Co. Pte. Ltd., Singapore 6,126,397 3,253,195 PBL Exchange (UK) Ltd. 9,660,191 2,890,284PBL Finance (Hong Kong) Limited 1,156,422 504,617

1,068,015,016 1,010,684,62737a Other expenses of the Bank

Security and cleaning 130,803,436 109,739,315 Entertainment 61,824,950 63,403,977 Car expenses 125,497,534 90,273,502 ATM expenses 110,491,112 75,129,985 Retail expenses 81,319,178 96,229,925 Books, magazines and newspapers, etc. 2,079,747 1,737,214 Liveries and uniforms 289,508 486,314 Medical expenses 63,981 287,968 Bank charges and commission paid 9,737,272 10,373,817 Loss on sale of fixed assets 2,755 216,836 Finance charge for lease assets 2,663,894 3,932,865 House furnishing expenses 3,292,671 3,173,226 Subscription to institutions 10,683,133 8,901,562 Donations 17,209,194 12,905,540 Traveling expenses 32,980,211 23,966,389 Expenses for merchant banking 11,816,537 12,750,590 Local conveyance, labor, etc. 34,037,537 26,612,003 Business development 29,615,867 17,448,135 Training and internship 16,220,803 13,736,209 Remittance charges 9,196,817 8,139,212 Cash reward to branches 6,481,666 5,160,000 Laundry, cleaning and photographs, etc. 5,729,029 5,176,223 Credit card expenses 39,682,609 39,180,836 Consolidated salary (staff) 27,351,178 26,575,532 Annual General Meeting 470,203 1,262,856 Exgratia 12,154,041 9,961,042 Welfare fund 10,672,000 13,600,000 Prime Bank Foundation 213,405,000 271,900,000 Miscellaneous expenses 21,755,965 22,737,643

1,027,527,828 974,998,715




38 Consolidated provision for loans, investments,off balance sheet exposure & other assetsProvision for bad and doubtful loans and advances / investments-PBL (note-38a) 1,490,000,000 226,000,000 Provision for unclassified loans and advances / investments-PBL (note-38a) 240,000,000 305,000,000 Provision for off-balance sheet exposure-PBL (note-38a) 140,000,000 130,000,000 Provision for diminution in value of investments-PBL (note-38a) 43,797,548 - Provision for diminution in value of investments-PBIL (74,084,236) 388,952,446 Provision for impairment of client margin loan-PBIL 178,586,273 - Provision for diminution in value of investments-PBSL 3,232,978 988,820 Provision for impairment of client margin loan-PBSL 597,088 - Provision for other assets (note-38a) 1,301,942,300 -

3,324,071,951 1,050,941,266

As per the Press release # SEC/Mukhopatro/2011/662 and SEC/Mukhopatro/2011/696, dated 29 January 2013 and 19 February 2013 respectively of Bangladesh Securities and Exchange Commission, 20% provision has been made by Prime Bank Securities Limited while Prime Bank Investment Limited made 100% provision on diminution in value of investments and 20% provision made on impairment of client margin loan.

38a Provision for loans, investments, off balance sheetexposure & other assets of the BankProvision for bad and doubtful loans and advances / investments 1,490,000,000 226,000,000 Provision for unclassified loans and advances / investments 240,000,000 305,000,000 Provision for off-shore banking units - - Provision for off-balance sheet exposure 140,000,000 130,000,000 Provision for diminution in value of investments 43,797,548 - Provision for other assets 1,301,942,300 -

3,215,739,848 661,000,000 39 Consolidated tax expenses

Current taxPrime Bank Limited (note-39a) 2,449,800,000 2,907,320,000 Prime Bank Investment Limited 154,052,683 255,939,030 Prime Bank Securities Limited 15,685,310 8,170,117 Prime Exchange Co. Pte. Ltd., Singapore 859,495 (250,096)PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 8,803,282 599,735

2,629,200,771 3,171,778,786 Deferred taxPrime Bank Limited (note-39a) 186,300,000 224,500,000 Prime Bank Investment Limited - - Prime Bank Securities Limited (16,975) 665,885 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

186,283,025 225,165,885 2,815,483,796 3,396,944,671

39a Tax expenses of the BankCurrent tax 2,449,800,000 2,907,320,000 Deferred tax 186,300,000 224,500,000

2,636,100,000 3,131,820,000




40 Consolidated receipts from other operating activities

Prime Bank Limited (note-40a) 1,775,963,262 1,698,153,270 Prime Bank Investment Limited 94,610,779 208,855,998 Prime Bank Securities Limited 10,654,647 2,354,312 Prime Exchange Co. Pte. Ltd., Singapore 320,683 344,331 PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 37,050,816 3,446,744

1,918,600,187 1,913,154,655 40a Receipts from other operating activities of the Bank

Rent recovered 6,304,685 5,457,287 Service and other charges 296,467,137 60,034,388 Credit card income 39,803,096 34,549,851 Retail Income 220,364,527 197,319,531 Income from ATM services 296,531,804 55,246,951 Postage / Telex / Fax / SWIFT charge recoveries 135,174,145 100,527,229 Incidental charges 35,206 111,233 Rebate from foreign Bank outside Bangladesh 149,696,068 106,866,438 Gain from sale of treasury bond / shares 455,110,150 1,046,060,296 Miscellaneous earnings 176,476,444 91,980,066

1,775,963,262 1,698,153,270 41 Consolidated payments for other operating activities

Prime Bank Limited (note-41a) 1,355,446,797 1,369,935,123 Prime Bank Investment Limited 27,323,852 37,354,024 Prime Bank Securities Limited 15,419,971 10,407,840 Prime Exchange Co. Pte. Ltd., Singapore 20,865,705 14,985,593 PBL Exchange (UK) Ltd. 25,770,307 36,905,228 PBL Finance (Hong Kong) Limited 8,351,785 4,849,656

1,453,178,417 1,474,437,464 41a Payments for other operating activities of the Bank

Rent, rates and taxes 430,873,148 367,568,017 Legal expenses 28,570,418 15,067,449 Postage and communication charges, etc. 127,601,536 132,056,013 Directors’ fees 5,152,571 3,569,924 Other expenses 763,249,124 851,673,720

1,355,446,797 1,369,935,123 42 (Increase) / decrease of consolidated other assets

Prime Bank Limited (note-42a) (13,647,964,993) (10,643,375,389)Inter-company capital 14,030,152 39,402,808 Prime Bank Investment Limited 87,583,771 (104,667,976)Prime Bank Securities Limited 9,227,793 (35,523,557)Prime Exchange Co. Pte. Ltd., Singapore (3,445,866) 511,307 PBL Exchange (UK) Ltd. 4,584,909 (2,196,579)PBL Finance (Hong Kong) Limited 566,986,901 (1,150,083)

(12,968,997,333) (10,746,999,469)




42a (Increase)/ decrease of other assets of the BankT & T bonds 41,560,619,018 30,044,160,955 Stationery and stamps 22,512,393 15,110,147 Advance deposits and advance rent 185,487,221 153,215,481 Branch adjustment account 61,205,540 123,571,698 Suspense account 166,334,111 431,245,616 Encashment of PSP / BSP 259,196,282 153,725,551 Credit card 90,683,814 78,050,003 Sundry assets 6,681,509,089 4,380,503,024

49,027,547,468 35,379,582,475 (13,647,964,993) (10,643,375,389)

43 Increase / (decrease) of consolidated other liabilitiesPrime Bank Limited (note-43a) 786,096,248 1,085,124,521 Prime Bank Investment Limited (129,311,326) 415,961,924 Prime Bank Securities Limited (6,205,212) 52,074,061 Prime Exchange Co. Pte. Ltd., Singapore (211,020) 5,629,702 PBL Exchange (UK) Ltd. 18,726,511 (5,137,884)PBL Finance (Hong Kong) Limited 16,336,490 3,528,439

685,431,691 1,557,180,763 43a Increase / (decrease) of other liabilities of the Bank

F.C. held against EDF L/C 2,198,309,830 1,545,582,036 Exchange equalization fund - 4,523,326 Expenditure and other payables 78,241,570 84,951,171 Provision for bonus 9,647,201 2,115,248 Unearned commission on bank guarantee 126,153,370 45,760,373 Other provision 388,462,283 457,199,437 Interest suspense account 620,359,575 494,945,990

3,421,173,829 2,635,077,581 786,096,248 1,085,124,521

44 Consolidated earnings per share (CEPS)Net profit after tax (Numerator) 2,700,405,687 3,688,952,436 Number of Ordinary shares outstanding (Denominator) 935,771,469 935,771,469 Consolidated earnings per share (CEPS) 2.89 3.94

Earnings per share has been calculated in accordance with BAS - 33: “Earnings Per Share (EPS)”. Previous year’s figures have been adjusted for the issue of bonus shares during the year.

44a Earnings per share (EPS) of the BankNet profit after tax (Numerator) 2,698,992,305 3,634,129,909 Number of Ordinary shares outstanding (Denominator) 935,771,469 935,771,469 Earnings per share (EPS) 2.88 3.88

Earnings per share has been calculated in accordance with BAS - 33: "Earnings Per Share (EPS)". Previous year's figures have been adjusted for the issue of bonus shares during the year.

45 Number of employees of the BankThe number of employees engaged for the whole year or part thereof who received a total remuneration of Tk. 36,000 p.a. or above were 2,544.

46 Assets pledged as security for liabilities of the BankTreasury bills & bonds to Bangladesh Bank for Repo 7,404,350,307 7,443,355,097



47 Disclosure on Audit Committee of the Bank

a) Particulars of Audit Committee The audit committee of the Board was duly constituted by the Board of Directors of the Bank in accordance with the

BRPD Circular no. 12 dated December 23, 2002 of Bangladesh Bank.

Pursuant to the BRPD Circular no. 08 dated 19.06.2011 and SEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 7, 2012 on Corporate Governance, the current Committee is Constituted with the following 5 (Five) members of the Board:

b) Meetings held by the Audit Committee during the year by date:

Name Status with bank Status with committee

Educational Qualification

Prof. Ainun Nishat Director Chairman M.Sc. Engineer (Civil), Bangladesh University of Engineering and Technology (BUET), Ph.D. in Civil Engineering from University of Strathclyde, Glasgow, U.K.

Mr. M. A. Khaleque Director Member M. Com. CA (CC) ICAB

Mr. Khandker Mohammad Khaled

Director Member B.Sc. Engineer (Mechanical), Bangladesh University of Engineering and Technology (BUET).

Mrs. Nazma Haque Director Member B.A. University of Rajshahi.

Prof. Dr. Mohammed Aslam Bhuiyan

Independent Director

Member B.A. (Hons.), M.A. University of Dhaka, MS in Sociology on Rural Development, Moscow University, Ph.D. from Bombay University.

Meeting No Held on

76th 09.02.2012

77th 14.02.2012

78th 11.04.2012

79th 13.05.2012

80th 25.07.2012

81st 17.09.2012

82nd 21.10.2012

83rd 17.12.2012



c) Review by the Audit Committee and Recommended thereof:

i) Review of the Internal Audit Plan for the year 2012 and suggested area of further concentration.

ii) Review of the Internal Control function and recommend before the Board for enhancement of the activities streamlining operational risk.

iii) Review of all branch and Head office inspection reports as submitted by the Internal Control and Compliance Division and advice management for timely implementation and follow up.

iv) Review of the draft consolidated financial statements along with the external auditors and the management and recommending it to the Board of Directors for consideration.

v) Review the scope and general extent of the annual audit, including an explanation of risk factors considered, any limitations on scope of work.

vi) Review with the top management of the organization’s policies and procedures to prevent illegal or unethical activities, the quality of its personnel and the adequacy of staffing, key accounting policies and procedures, internal controls, significant areas of risk, legal or regulatory matters that may have an impact on the financial statements, and any other matters that may affect financial reporting.

vii) Review of the Management Letter issued by Bangladesh Bank & External Auditors and Management response thereto as part of compliance.

viii) Review the results of the audit with external auditors, including material findings, changes to accounting principles, changes to audit plan, disputes with management, unresolved issues and access to information.

ix) Submission of compliance report on the minutes to the Board along with its decisions for information and concurrence of the Board on quarterly basis.

x) Recommend the appointment of external auditors of the bank considering suitability and all other compliances.

d) Steps taken for implementation of an effective internal control procedure of the Bank :

i) Review performance and portfolios of SME, Agriculture and Policy on Green Banking which has been declared a thrust sector for the economy of the country.

ii) Review the functioning of Human Resources Development Centre (Training Academy) at periodical interval for its significance and contribution towards transformation of the resources in to Human Capital.

iii) Review the performance of the Islamic Banking Branches and recommended introduction of Sharia Compliant software.

iv) Directed & ensured health checking of the IT System and taking measures for up gradation for efficiency & effectiveness.

v) Suggested software development for monitoring & following up compliance issues.

vi) Advise Audit Teams to carry out Audit & Inspections of all Divisions of the Head Office including Prime Bank Foundation alongside the branches and subsidiaries to ensure proper functioning as per laid down guidelines of the Board and the regulators.



48 Related Party Disclosures of the Banki) Names of the Directors together with a list of entities in which they have Interest Annexure-E

ii) Significant contracts where Bank is a party and wherein Directors have interest during the year 2012

(Figure in Taka)Name of party Relationship Nature of transaction Amount

- - - Nil

iii) Shares issued to Directors and Executives without consideration or exercisable at a discount Nil

iv) Related party transactions

Nature of party/ contract Relationship AmountBangla Trac Ltd. Common Director 6,355,000 Executive Motors Ltd. Common Director 10,120,000 Lease agreement Common Director 1,362,428 Lease agreement Common Director 280,800 Lease agreement Common Director 7,500,000

v) Lending policies in respect of related partya) Amount of transaction regarding loans and advances, deposits, guarantees and commitment as on 31.12.2012

Nil

b) Amount of transactions regarding principal items of deposits, expenses and commission Nil c) Amount of provision against loans and advances given to related party Nil d) Amount of guarantees and commitments arising from other off-balance sheet exposures Nil

vi) Disclosure of transaction regarding Directors and their related concernsName of Party Relation Type of

LoanStatus of the loan

Balance as on 31.12.2012 (Tk. In Lac)

Market Value Of Collateral Security (Tk.

in Lac)

Limit Outstanding

- - - - Nil Nil Nil

vii) Business other than banking business with any relation concern to the Directors as per Section 18(2) of the Bank Companies Act, 1991.

a) Lease agreement made with the Sponsor Director & Depositor Director

Nature of contract Branch Name Name of Director and related by

Remarks

Lease agreement Jubilee Road Branch

Mr. Md. Nader Khan Director & owner of the

premises

Lease period:01.08.2012 to

31.07.2015

Lease agreement ATM BoothJubilee Road Branch

Mr. Md. Nader Khan Director & owner of the

premises

Lease period:12.10.2011 to

11.10.2021



Nature of contract Branch Name Name of Director and related by

Remarks

Lease agreement Gulshan Branch Prof. Ainun Nishat (Depositor Director)

Prof. Ainun Nishat was not a Director of the Bank when the lease agreement was executed in 2002. However, Mr. Ainun Nishat became a Depositor Director on 19 March 2009. He is one of the co-sharer of the lease premises.Lease period: 01.09.2011 to 31.08.2014

b) Service receiving companies where the Directors interest subsisted during the year

Name of party Relationship Nature of transaction AmountBangla Trac Common Director Procurement of Generators 6,355,000Executive Motors Ltd. Common Director Procurement of Vehicles 10,120,000

viii Investment in the Securities of Directors and their related concern Nil

49 Workers Participation Fund and Welfare Fund

SRO-336-AIN/2010 dated 5-10-2010 issued by Ministry of Labor and Employment and published in Bangladesh gazette

on 7-10-2010 declaring the status of business of certain institutions and companies (like mobile operating companies,

mobile network service providing company, all Govt. and Non-govt. money lending companies, all insurance companies

etc. ) as “Industrial Undertakings” for the purposes of Chapter-XV of the Bangladesh Labour Act, 2006 which deals with

the workers participation in company’s profit by way of Workers Participation Fund and Welfare Fund (WPFWF). The

Bangladesh Labour Act, 2006 requires the “Industrial Undertakings” to maintain provision for workers profit participation

fund @ 5% on net profit. However, we have obtained legal opinion from Legal advisor in this regard where it has been

stated that Prime Bank Limited does not fall under this category. Therefore, no provision in this regard has been made in

the financial statements during the year under audit.

50 Events after the Reporting PeriodThe Board of Directors in its 393rd meeting decided to recommend payment of 10% (ten) cash and 10% (ten) stock dividend for the year 2012. The total amount of dividend is Tk.1,871,542,938 ( One hundred eighty seven crore fifteen lac forty two thousand nine hundred thirty eight) only.




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N.A

., Lo

ndon

, U

KC

DEU

RO

137

,281

.93

105

.569

6 1

4,49

2,79

8 8

8,70

0.47

1

05.9

095

9,3

94,2

22

Citi

bank

N.A

., N

ew Y

ork,

USA

CD

US$

701

,894

.44

79.

8499

5

6,04

6,20

1 2

19,8

74.5

9 8

1.85

29

17,

997,

373

Citib

ank

N.A.

, New

Yor

k, U

SA (O

ff-sh

ore

Bank

ing)

CD

US$

5,3

83.5

9 7

9.84

99

429

,879

5

,383

.59

81.

8529

4

40,6

62

Com

mer

z Ba

nk A

G, F

rank

furt

, Ger

man

yC

DEU

RO

515

,962

.41

105

.569

6 5

4,46

9,94

5 2

82,8

91.3

1 1

05.9

095

29,

960,

877

Com

mer

z Ba

nk A

G, F

rank

furt

, Ger

man

yC

DU

S$ 3

,143

.62

79.

8499

2

51,0

18

7,5

60.7

9 8

1.85

29

618

,873

C

omm

onw

ealth

Ban

k of

Aus

tralia

, Aus

tralia

CD

AUD

60,

801.

35

82.

7804

5

,033

,160

2

3,88

8.93

8

2.58

96

1,9

72,9

77

Cre

dit S

uiss

e (F

irst B

osto

n), S

witz

erla

nd

CD

CH

F 6

7,79

3.61

8

7.43

01

5,9

27,2

02

43,

675.

41

86.

8097

3

,791

,449

H

abib

Am

eric

an B

ank,

New

Yor

k, U

SAC

DU

S$ 9

9,28

3.64

7

9.84

99

7,9

27,7

89

155

,671

.37

81.

8529

1

2,74

2,15

3 H

abib

Met

ropo

litan

Ban

k, K

arac

hiC

DU

S$ 2

26,8

79.7

9 7

9.84

99

18,

116,

329

410

,097

.75

81.

8529

3

3,56

7,69

0 H

DFC

Ban

k Li

mite

d, K

olka

ta, I

ndia

CD

US$

402

,232

.55

79.

8499

3

2,11

8,22

9 3

41,4

54.0

6 8

1.85

29

27,

949,

005

HSB

C B

ank

USA

, New

Yor

k, U

SA

CD

US$

1,8

98,1

21.5

0 7

9.84

99

151

,564

,812

1,

121,

562.

62

81.

8529

9

1,80

3,15

3 H

SBC

Ban

k M

iddl

e Ea

st L

td.,

Kara

chi,

Paki

stan

C

DU

S$ 1

,062

.54

79.

8499

8

4,84

4 3

1.04

8

1.85

29

2,5

41

HSB

C P

LC, L

ondo

n, U

K C

DG

BP 3

87,6

26.2

1 1

29.1

013

50,

043,

048

135

,101

.81

126

.462

7 1

7,08

5,34

0 H

ANA

Bank

, Seo

ulC

DU

S$ 4

7,03

6.37

7

9.84

99

3,7

55,8

49

- 8

1.85

29

- IC

ICI B

ank

Ltd,

Mum

bai,

Indi

aC

DU

S$ 1

28,9

39.0

5 7

9.84

99

10,

295,

770

399

,970

.72

81.

8529

3

2,73

8,76

3 In

tesa

San

paol

o SP

A, M

ilano

, Ita

lyC

DEU

RO

3,5

53.3

9 1

05.5

696

375

,130

5

,082

.52

105

.909

5 5

38,2

87

J. P

. Mor

gan

Cha

se B

ank,

New

Yor

kC

DU

S$ 4

71,7

11.9

1 7

9.84

99

37,

666,

149

126

,583

.64

81.

8529

1

0,36

1,23

8 M

ashr

eq B

ank

PSC

, New

Yor

k, U

SAC

DU

S$ 6

,607

,151

.77

79.

8499

5

27,5

80,4

08

5,4

44,1

10.4

5 8

1.85

29

445,

616,

228

Mas

hreq

Ban

k PS

C, M

umba

i, In

dia

CD

US$

118

,085

.19

79.

8499

9

,429

,091

1

58,1

74.5

8 8

1.85

29

12,

947,

048


Bal

ance

with

oth

er b

anks

-Out

side

Ban

glad

esh

(Nos

tro

Acc

ount

) of

Prim

e B

ank

Lim

ited

as

at

31 D

ecem

ber 2

012

Ann

exur

e-A

(con

t’d)

Nam

e of

the

Ban

kA

ccou

nt

type

2012

2011

Cur

renc

y ty

peFC

amou

ntEx

chan

ge

rate

E

quiv

alen

t T

aka

FCam

ount

Exch

ange

ra

te

Equ

ival

ent

Tak

a N

atio

nal W

estm

inis

ter B

ank,

Lon

don,

UK

CD

GBP

150

,869

.68

129

.101

3 1

9,47

7,47

2 6

1,32

1.34

1

26.4

627

7,7

54,8

62

The

Nat

iona

l Com

mer

cial

Ban

k, J

edda

hC

DSA

R 1

58,5

77.0

0 2

1.29

10

3,3

76,2

63

58,

500.

00

21.

8257

1

,276

,803

N

epal

Ban

glad

esh

Bank

Ltd

., Ka

thm

andu

, Nep

al

CD

US$

84,

290.

24

79.

8499

6

,730

,567

8

9,02

8.24

8

1.85

29

7,2

87,2

20

Peop

le’s

Ban

k, C

olom

bo, S

ri La

nka

C

DU

S$ 7

14,7

35.5

3 7

9.84

99

57,

071,

561

130

,855

.28

81.

8529

1

0,71

0,88

4 Sk

andi

navi

ska

Ensk

ilda,

Ban

ken,

Sw

eden

C

DSE

K 2

15,6

58.5

8 1

2.24

82

2,6

41,4

29

161

,782

.68

11.

8404

1

,915

,572

So

nali

Bank

, Kol

kata

, Ind

iaC

DU

S$ 1

14,5

52.2

4 7

9.84

99

9,1

46,9

85

199

,398

.41

81.

8529

1

6,32

1,33

8 St

anda

rd C

harte

red

Bank

, Kol

kata

, Ind

ia

C

DU

S$ 7

2,63

7.33

7

9.84

99

5,8

00,0

84

289

,137

.20

81.

8529

2

3,66

6,71

8 St

anda

rd C

harte

red

Bank

, New

Yor

k, U

SAC

DU

S$ 6

95,5

49.1

8 7

9.84

99

55,

539,

532

532

,117

.76

81.

8529

4

3,55

5,38

2 St

anda

rd C

harte

red

Bank

, Sin

gapo

reC

DSG

$ 2

,034

,914

.70

65.

2368

1

32,7

51,3

23

3,27

8,01

3.08

6

3.03

65

206

,634

,472

St

anda

rd C

harte

red

Bank

, Fra

nkfu

rt, G

erm

any

CD

EUR

O 8

2,55

4.46

1

05.5

696

8,7

15,2

41

27,

305.

51

105

.909

5 2

,891

,913

St

ate

Bank

of I

ndia

, Kol

kata

CD

US$

- 8

1.85

29

- 2

05.0

8 8

1.85

29

16,

786

The

Bank

of N

ova

Scot

ia, C

anad

a

CD

CAD

- 8

0.10

62

- 5

0,97

9.54

7

9.89

55

4,0

73,0

36

Uni

cred

ito It

alia

no S

PA, M

ilano

, Ita

lyC

DEU

RO

326

,121

.12

105

.569

6 3

4,42

8,47

6 3

0,46

8.70

1

05.9

095

3,2

26,9

25

Wel

ls F

argo

Ban

k N

. A.,

New

Yor

kC

DU

S$ 4

84,0

70.1

8 7

9.84

99

38,

652,

955

396

,379

.83

81.

8529

3

2,44

4,83

9 T

otal

1,

392,

741,

405

1,13

8,63

7,96

2


Reconciliation Statement of Balance with Bangladesh Bankas at 31st December 2012

Annexure-A-1

1) Balance with Bangladesh Bank-Taka account of the Bank

Detail TotalBalance as per Bank ledger

10,816,492,170 Unresponded debit entries in

Bangladesh Bank statement 2,049,697

Prime Bank’s ledger 71,556,167 73,605,864

10,742,886,306 Unresponded credit entries in



Balance as per Bangladesh Bank statement 10,820,073,285

2) Balance with Bangladesh Bank-Foreign currency of the Bank

Balance as per Bank ledger 2,881,505,675

Unresponded debit entries in

Bangladesh Bank statement -


2,879,770,042 Unresponded credit entries in



Balance as per Bangladesh Bank statement 3,483,191,573


Investment in shares of the Bankas at 31 December 2012

Annexure-B

SL. No.

Name of the Company FaceValue

No of shares

Cost / present value of holdings

Average cost

Quoted rate per share as on 31.12.12

Total market value as at

31.12.12

Quoted:

1 AB Bank Ltd. 10 800,000 32,918,300 41.15 33.70 26,960,000

2 Bank Asia Ltd. 10 700,000 17,987,037 25.70 21.50 15,050,000

3 BRAC Bank Ltd. 10 600,000 21,243,239 35.41 34.80 20,880,000

4 The City Bank Ltd. 10 600,000 18,648,926 31.08 26.80 16,080,000

5 DESCO 10 349,550 27,121,550 77.59 72.10 25,202,555

6 Dhaka Bank Ltd. 10 700,000 20,855,770 29.79 24.80 17,360,000

7 Eastern Bank Ltd. 10 762,000 29,608,038 38.86 31.70 24,155,400

8 Federal Insurance Compnay Bangladesh Ltd.

10 2,241 20,380 9.09 27.20 60,955

9 Jamuna Bank Ltd. 10 600,000 14,338,010 23.90 21.70 13,020,000

10 Lanka Bangla Finance Ltd. 10 350,000 23,395,426 66.84 59.00 20,650,000

11 National Bank Ltd. 10 700,000 21,314,190 30.45 22.10 15,470,000

12 NLI First MF 10 998,000 9,980,000 10.00 9.20 9,181,600

13 One Bank Ltd. 10 700,000 19,867,211 28.38 22.80 15,960,000

14 Uttara Bank Ltd. 10 800,000 37,009,980 46.26 38.10 30,480,000

Sub Total 294,308,058 250,510,510

Unquoted:

1 Central Depository Bangladesh Ltd.

10 4,569,443 15,694,430 3.43 - 15,694,430

2 Investment in SWIFT 4,184,430 - - 4,184,430


Sche

dule

of F

ixed

Ass

ets

of th

e B

ank

as a

t 31

Dec

embe

r 201

2A

nnex

ure-

C

Parti

cula

rs

COST

DEPR

ECIA

TIO

N

Net b

ook

valu

e as

at 3

1.12

.12

Ope

ning

bal

ance

as

on

01.0

1.12

Addi

tions

du

ring

the

year

Disp

osals

/ ad

just

men

ts

durin

g th

e ye

ar

Tota

l bal

ance

as

at 3

1.12

.12

Ope

ning

ba

lanc

e as

on

01.0

1.12

Cha

rge

for

the

year

Disp

osals

/ ad

just

men

ts

durin

g th

e ye

ar

Tota

l bal

ance

as

at 3

1.12

.12

Taka

Taka

Taka

Taka

Taka

Taka

Taka

Taka

Taka

Land

2

,195

,907

,410

5

,000

,000

-

2,2

00,9

07,4

10

- -

- -

2,20

0,90

7,41

0 Bu

ildin

g 5

43,1

82,5

45

218

,590

,888

-

761

,773

,433

1

0,57

3,74

0 1

4,31

2,21

5 -

24,

885,

956

736

,887

,477

Fu

rnitu

re a

nd fi

xtur

es 6

17,2

33,1

26

77,

060,

865

- 6

94,2

93,9

90

235

,669

,447

4

1,88

6,29

6 -

277

,555

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4

16,7

38,2

47

Offi

ce e

quip

men

t and

mac

hine

ry 1

,032

,982

,037

12

5,00

1,09

0 4

32,0

00

1,1

57,5

51,1

28

540

,326

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11

3,76

1,98

5 3

97,7

45

653

,690

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5

03,8

60,1

39

Vehi

cles

216

,602

,023

11

5,78

4,35

7 6

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3

25,8

21,3

16

88,

135,

476

38,

802,

110

6,5

65,0

63

120

,372

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2

05,4

48,7

93

Libr

ary

book

s 1

,535

,005

23

,885

-

1,5

58,8

90

1,0

20,8

35

111

,130

-

1,1

31,9

65

426

,925

A

s at

31

Dec

embe

r 201

2 4

,607

,442

,146

54

1,46

1,08

5 6

,997

,064

5

,141

,906

,167

8

75,7

26,2

48

208,

873,

736

6,9

62,8

08

1,0

77,6

37,1

76

4,0

64,2

68,9

91

ATM

Offic

e eq

uipm

ent a

nd m

achin

ery

132

,396

,714

7

9,10

1,78

6 -

211

,498

,500

7

3,11

4,19

6 3

3,28

4,15

8 -

106

,398

,353

1

05,1

00,1

47

Furn

iture

and

fixt

ures

17,

092,

221

16,

977,

873

- 3

4,07

0,09

4 2

,885

,805

2

,645

,313

-

5,5

31,1

19

28,

538,

975

As

at 3

1 D

ecem

ber 2

012

149

,488

,935

9

6,07

9,65

9 -

245

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,594

7

6,00

0,00

1 3

5,92

9,47

1 -

111

,929

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1

33,6

39,1

22

Leas

ed V

ehic

les

31,

690,

384

- -

31,

690,

384

16,

528,

972

6,0

14,7

54

- 2

2,54

3,72

6 9

,146

,658

A

s at

31

Dec

embe

r 201

2 3

1,69

0,38

4 -

- 3

1,69

0,38

4 1

6,52

8,97

2 6

,014

,754

-

22,

543,

726

9,1

46,6

58

Off-

shor

e F

urni

ture

and

fixt

ures

2

,946

,983

-

- 2

,946

,983

9

05,3

37

256

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-

1,1

61,9

52

1,7

85,0

31

Offic

e eq

uipm

ent a

nd m

achin

ery

1,6

07,5

62

30,

025

- 1

,637

,587

8

13,5

76

185

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-

999

,136

6

38,4

51

Veh

icle

s 1

,410

,371

-

- 1

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,371

1

75,2

95

282

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-

457

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9

53,0

00

As

at 3

1 D

ecem

ber 2

012

5,9

64,9

16

30,

025

- 5

,994

,941

1

,894

,208

7

24,2

50

- 2

,618

,459

3

,376

,482

Su

b-to

tal

4,7

94,5

86,3

81

637

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,769

6

,997

,064

5

,425

,160

,086

9

70,1

49,4

29

251

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6

,962

,808

1,

214,

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832

4,21

0,43

1,25

4

Softw

are-

Am

ortiz

atio

nSo

ftwar

e-C

ore

Bank

ing

197

,956

,054

2

8,78

4,00

9 -

226

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,063

6

5,71

8,75

1 2

4,05

6,25

1 -

89,

775,

002

136

,965

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So

ftwar

e-AT

M 2

8,23

5,44

4 -

- 2

8,23

5,44

4 9

,451

,209

2

,831

,280

-

12,

282,

489

15,

952,

955

Sub-

tota

l 2

26,1

91,4

98

28,

784,

009

- 2

54,9

75,5

07

75,

169,

960

26,

887,

531

- 1

02,0

57,4

91

152,

918,

016

As a

t 31

Dece

mbe

r 201

2 5

,020

,777

,879

6

66,3

54,7

78

6,9

97,0

64

5,68

0,13

5,59

3 1,

045,

319,

389

78,

429,

742

6,96

2,80

8 1

,316

,786

,323

4

,363

,349

,270

As a

t 31

Dece

mbe

r 201

1 2

,517

,405

,010

2,

505,

029,

178

1,6

56,3

08

5,02

0,77

7,87

9 8

22,7

10,3

09

23,

772,

560

1,16

3,47

9 1

,045

,319

,389

3

,975

,458

,490


Stat

emen

t of t

ax p

ositi

on o

f the

Ban

kas

at 3

1 D

ecem

ber 2

012

Ann

exur

e-D

Acc

ount

ing

year

Ass

essm

ent

year

Tax

pro

visi

on

as p

er a

ccou

nts

Tax

as p

er

asse

ssm

ent

orde

r

Tax

paid

Exce

ss/

(sho

rtag

e)of

pro

visi

on

Exce

ss/

(sho

rtag

e)of

tax

paid

Pres

ent s

tatu

s

Taka

Taka

Taka

Taka

Taka

1995

to

20

00 -

411

,652

4

11,6

52

24,

947,

215

- 2

4,94

7,21

5 As

sess

men

t yea

r 199

9-20

00 is

fina

l but

the

Tax

Auth

ority

re

ferre

d it

to H

igh

Cou

rt D

ivis

ion.

2001

200

2-20

03

268

,743

,630

2

68,7

43,6

30

247

,455

,962

-

(21,

287,

668)

Com

plet

ed

2002

200

3-20

04

312

,590

,120

3

12,5

90,1

20

337

,138

,495

-

24,

548,

375

Com

plet

ed

2003

200

4-20

05

348

,903

,919

3

48,9

03,9

19

342

,757

,186

-

(6,1

46,7

33)

Com

plet

ed

2004

200

5-20

06

482

,287

,856

4

82,2

87,8

56

438

,405

,004

-

(43,

882,

852)

Com

plet

ed

2005

200

6-20

07

557

,500

,000

3

46,6

38,5

37

470

,158

,263

2

10,8

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Annexure-ESl no. Name of Directors Status with

PBL Entities where they have interest %of Interest

1 Mr. Md. Shirajul Islam Mollah Chairman

China - Bangla Ceramic Industries Ltd. 43.44Bengal Tiger Cement Industries Ltd. 12.00Bajnabo Textiles Mills Ltd. 50.00Trustee Securities Ltd. 22.00United Shipping Lines Ltd. 40.00Rajanigondha Tanker Ltd. 40.00Azbal International Ltd. 50.00Rajanigondha Cargo Ltd. 40.00People’s Leasing and Financial Services Ltd. 2.27Total Merchandizing & Trims Ltd. 39.00

2 Mr. M. A. Khaleque Vice Chairman

Fareast Finance & Investment Limited 1.77Fareast Stocks & Bonds Limited 7.24Maksons Bangladesh Limited 50.00Maksons Associates Limited 50.00Prime Property Holdings Limited 20.00PFI Properties Limited 10.00Prime Prudential Fund Limited 10.00Prime Financial Securities Limited 20.00GETCO Limited 37.50GETCO Agro Vision Limited 27.50GETCO Fibers Limited 37.50GETCO Power Limited 27.00GETCO Elevator Company Limited 30.00GETCO Agri Technologies 40.00GETCO Online Limited 40.00HRC Technologies Limited 40.00

3 Mr. Mizanur Rahman Bhuiyan Vice Chairman

Meghna Light Industrial Products Limited 80.00Meghna Components Ltd. 66.67Meghna Wheels Ltd. 66.67Meghna Cycle Industries Limited 33.33Meghna Bangladesh Ltd. 75.00Uniglory Cycle Components Ltd. 27.00Uniglory Wheels Ltd. 80.00Executive Motors Ltd. 33.33Meghna Rubber Ind. Ltd. 93.34Uniglory Steel Products Ltd. 65.00Trans-world Bi-cycle Co. Ltd. 64.00Meghna Associates Limited 40.00Mahin Cycle Industries Limited 40.00Abrar Steel Industries Limited 40.00Cycle Life Limited 75.00Meghna Holdings Limited 10.00Hola Limited 10.00Uniglory Cycle Industries Limited 50.00Meghna Mainetti Limited 80.00M/S Meghna Bangladesh 100.00Meghna Poly Propylene Limited 25.00Meghna Tyres Limited 25.00Meghna Innova Rubber Co. Ltd. 70.00

4 Mrs. Marina Yasmin Chowdhury Director

East Coast Trading (Pvt.) Ltd. 20.00East Coast Shipping Lines Ltd. 20.00EC Securities Limited 3.60EC Distribution Limited 40.00EC Bulk Carriers Ltd. 20.00Parkensine Products Ltd. 40.00

5 Mrs. Nasim Anwar Hossain Director

Ben Lloyds Lines Ltd. 12.00Bengal Tiger Cement Industries Ltd. 2.36Prime Cement Ltd. 2.86Lubricants Asia Ltd. 14.00

Name of Directors and theirinterest in different entities of the Bank


Annexure-E ContinuedSl no. Name of Directors Status with

PBL Entities where they have interest %of Interest

6 Mrs. Nazma Haque Director

Asian Gate Limited 30.00Acorn Limited 25.00THANE Technology Limited 25.00Anirban Enterprise Ltd. 50.00

7 Mr. Khandker Mohammad Khaled Director

Greenland Engineers & Tractors Company Limited 29.25Machinery & Equipment Trading Company Limited 29.25GETCO Trading Limited 51.00GETCO Limited 37.50GETCO Agro Vision Limited 20.00GETCO Telecommunications Limited 60.00GETCO Power Limited 28.00GETCO Jute Mills Ltd. 34.00GETCO Fibers Limited 41.50GETCO Fertilizers Limited 35.00GETCO One Line Limited 48.00GETCO Business Solutions Limited 34.00GETCO Elevator Company Limited 30.00GETCO Agri-Technologies Limited 50.00GETCO Textile Mills Limited 20.00GETCO Techno labs Limited 60.00GETCO Venture International Limited 10.00Greenland Technologies Ltd. 25.00Green Power Generation Company Ltd. 44.00Khaled Textile Mills Limited 50.00Acorn Trading Company Limited 75.00Eurasia Gate Limited 50.00K.S. Engineering & Technology Limited 25.00K.S. Consultant Limited 16.00Shatata Enterprise Limited 25.00Nirala Agro Fishing Limited 25.00Easy Fly Express Limited 4.00Fareast Finance & Investment Limited 4.90Fareast Islami Life Insurance Co. Ltd. 1.01Fareast Stocks & Bonds Limited 10.00

8 Quazi Sirazul Islam Director

Amin Jewelers Limited 75.00Ducati Apparels Limited 33.33City Hospital Limited 28.00Bangla Gold Limited 12.50Asian Watch Limited 95.00Amin Real Estate Ltd. 50.00

9 Mrs. Salma Huq Director

GQ Ball Pen Industries Limited 9.92GQ Industries Limited 42.00Maladesh International (Pvt.) Limited 0.13GQ Foods Limited 26.66GQ Enterprise Limited 68.81

10 Mrs. Muslima Shirin Director Mawsons Limited 19.23

11 Mr. Mafiz Ahmed Bhuiyan Director

Eastern University 3.33South East University 3.33Mirzapur Resorts Ltd. 4.55International Holdings Limited 3.33Shepherd World Trade Limited 62.00Australian International School 3.33Citizen Securities & Investment Ltd. 16.00



Annexure-E ContinuedSl no. Name of Directors Status with

PBL Entities where they have interest % of Interest

12 Mr. Md. Nader Khan Director

Pedrollo NK Limited 40.00Halda Valley Tea Company Limited 15.00PNL Water Management Limited 35.00PNL Holdings Limited 20.00Polyexprint Limited 30.00Polytape Limited 1.00Pragati Corporation 100.00Polyex Laminate Limited 2.00Pedrollo Dairy & Horticulture Limited 2.00Hill Plantation Ltd. 0.67Cider Education Services Ltd. 20.00

13 Mr. Imran Khan Director

Pedrollo NK Limited 10.00Halda Valley Tea Company Limited 15.00PNL Water Management Limited 15.00PNL Holdings Limited 20.00Polyexprint Limited 15.00Polytape Limited 1.00Prima Enterprise 100.00Polyex Laminate Limited 2.00Pedrollo Dairy & Horticulture Limited 2.00Hill Plantation Ltd. 6.60

14 Mr. Md. Shahadat Hossain Director VIP Shahadat Cold Storage 50.00 VIP Shahadat Poultry & Hatchery 50.00

15 Mr. Nafis Sikder Director

Palmal Packaging Ltd. 10.00 Marina Apparels Ltd. 99.00 Nafa Apparels Ltd. 99.00 M/S Ayesha Clothing Co. Ltd. 99.00 M/S Ayesha Fashion Limited 99.00 M/S Ayesha Washing Limited 99.00 M/S Safaa Sewing Limited 99.00 M/S Palmal Logistics 51.00 M/S Aswad Composite Mills Limited 95.00 M/S Cortz Apparels Limited 99.00 Palmal Garments Ltd. 43.75 Palmal Garments Hosiery Ltd. 43.75

16 Mr. Tanjil Chowdhury (Representative of East Coast Shipping Lines Limited)

Director

Parkesine Products Limited 20.00 East Coast Trading (Pvt.) Ltd. 20.00 EC Securities Ltd. 3.60 Bangladesh Trade Syndicate Ltd. 7.50 EC Bulk Carriers Ltd. 20.00 MJL Bangladesh Limited 0.22

17 Prof. Ainun Nishat Depositor Director N/A N/A

18 Mr. Manzur Murshed Depositor Director N/A N/A

19 Prof. Dr. Mohammed Aslam Bhuiyan

IndependentDirector N/A N/A



Annexure-F

Distribution of profit under Islamic Banking operation

Prime Bank is operating 05 (five) Islamic Banking branches based on Islamic Shariah, which absolutely prohibits receipts and payments of interest in any form. The operation of these 05 (five) branches are totally different from other conventional banking branches as they operate on the basis of profit sharing arrangement.

Fixation of final profit rate for the year 2012

Provisional profit are applied to the different types of depositors at the rates to be decided by the Bank from time to time taking into consideration of the industry trend and that of the rates of other Islamic Banks in Bangladesh. Final rates of profit are declared annually as at 31 December in every year on the basis of income earned from different investments and other business by individual branches and distributed as per weightage of the different deposit products.

For the year ended 31 December 2012, 70% of total investment income shall be distributed to the different types of Mudaraba depositors (except no cost fund) according to the weightage. The remaining 30% of the investment income will be retained by the Bank as Management fee (25%) and Investment loss Off-setting Reserve (5%).

Final Profit rate for the year 2012 is given below:

Deposit types Weightage Final rate of profit

for the year2012 (%)

Mudaraba Saving Deposits 0.75 8.46

Mudaraba Short Notice Deposits 0.52 5.87

Mudaraba Term Deposits

36 Months 1.00 11.28

24 Months 0.98 11.06

12 Months 0.96 10.83

06 Months 0.92 10.38

03 Months 0.88 9.93

01 Month 0.88 9.93

Mudaraba Education Savings Scheme 1.20 13.54

Mudaraba Monthly Contributory Savings Scheme 1.05 11.85

Mudaraba Monthly Benefit Deposit Scheme 1.02 11.51

Mudaraba Double Benefit Scheme 1.02 11.51

Mudaraba Hajj Savings Scheme 1.20 13.54

Mudaraba Lakhpoti Deposit Scheme 1.05 11.85

Mudaraba Millionaire Deposit Scheme 1.05 11.85

Mudaraba House Building Deposit Scheme 1.05 11.85

Distribution of Profit under IslamicBanking Operation


Annexure-G


2012 2011

PROPERTY AND ASSETS Cash in hand 1 Cash in hand (including foreign currencies) 62,420,709 48,302,086 Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) - -

62,420,709 48,302,086 Balance with other banks and financial institutions 2 In Bangladesh 213,306 208,136 Outside Bangladesh - -

213,306 208,136 Placement with banks & other financial institutions 3 - - Investments in share & securities 4 Government - - Others - -

- - Investments General investments etc 5 12,907,804,605 12,546,603,759 Bills purchased and discounted 6 761,805,137 722,057,259

13,669,609,742 13,268,661,018 Fixed assets including premises 7 39,803,189 40,705,631 Other assets 8 2,523,594,919 3,219,095,091 Non - banking assets - - Total assets 16,295,641,865 16,576,971,962

LIABILITIES AND CAPITALLiabilitiesPlacements from other banks, financial institutions and agents 9 - 200,000,000 Deposits and other accounts 10 Mudaraba savings deposits 1,883,521,658 2,266,710,947 Mudaraba term deposits 11,735,023,423 12,105,269,265 Other mudaraba deposits - - Al-wadeeah current deposits and other deposits accounts 2,498,804,441 1,781,332,574 Bills payable 128,706,901 145,661,582

16,246,056,423 16,298,974,368 Other liabilities 11 49,585,442 77,997,594 Total liabilities 16,295,641,865 16,576,971,962 Capital / Shareholders’ equityPaid up capital - - Statutory reserve - - Revaluation gain / (loss) on investments - - Revaluation reserve - - Other reserve - - Surplus in profit and loss account / Retained earnings - - Total Shareholders’ equity - - Total liabilities and Shareholders’ equity 16,295,641,865 16,576,971,962

Prime Bank Limited-Islamic BranchesBalance Sheet as at 31 December 2012



2012 2011

OFF- BALANCE SHEET EXPOSURE

Contingent liabilities 12Acceptances and endorsements 12.1 2,853,617,078 2,966,899,728 Letters of guarantee 12.2 967,587,167 1,197,088,153 Irrevocable letters of credit 12.3 1,056,519,014 2,149,395,458 Bills for collection 12.4 167,679,643 162,690,924 Other contingent liabilities - -

5,045,402,902 6,476,074,263 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 - - Other commitments - -

- - Total Off-Balance Sheet exposure including contingent liabilities 5,045,402,902 6,476,074,263

Prime Bank Limited-Islamic BranchesBalance Sheet as at 31 December 2012


Annexure-G(I)


Investment income 13 2,521,281,958 2,240,087,775 Profit paid on deposits 14 (1,663,610,420) (1,449,728,938) Net investment income 857,671,538 790,358,837 Income from investment in shares / securities - - Commission, exchange and brokerage 15 100,413,925 114,103,631 Other operating income 16 51,165,583 49,233,842 Total operating income (A) 1,009,251,046 953,696,309

Salaries and allowances 17 95,254,697 71,380,374 Rent, taxes, insurance, electricity, etc. 18 12,118,962 10,637,645 Legal expenses 19 211,615 175,870 Postage, stamp, telecommunication, etc. 20 9,397,036 8,476,519 Stationery, printing, advertisements, etc. 21 5,346,313 6,019,816 Chief Executive’s salary and fees - - Directors’ fees & expenses - - Shariah supervisory committee’s fees and expenses - - Auditors’ fees - - Charges on investment losses 22 - - Depreciation and repair of Bank’s assets 23 9,365,464 8,368,617 Zakat expenses - - Other expenses 24 15,858,328 15,314,304 Total operating expenses (B) 147,552,415 120,373,145 Profit / (loss) before provision (C=A-B) 861,698,631 833,323,164 Provision for investments 25 Specific provision - - General provision - - Provision for off-balance sheet exposures - -

- - Provision for diminution in value of investments - - Other provisions - - Total provision (D) - - Total profit / (loss) before taxes (C-D) 861,698,631 833,323,164

Prime Bank Limited-Islamic BranchesProfit and Loss Account for the year ended 31 December 2012


Particulars Amount in Taka2012 2011

A) Cash flows from operating activitiesInvestment income receipts in cash 2,179,669,119 1,713,726,320 Profit paid on deposits (1,661,136,450) (1,230,889,597)Dividend receipts - - Fees and commission receipts in cash 100,413,925 114,103,631 Recoveries of investments previously written off - - Cash payments to employees (95,254,697) (71,380,374)Cash payments to suppliers (5,346,313) (6,019,816)Income taxes paid - - Receipts from other operating activities 51,165,583 49,233,842 Payments for other operating activities (40,199,922) (42,972,956)Cash generated from operating activities before changesin operating assets and liabilities 529,311,245 525,801,052

Increase / (decrease) in operating assets and liabilitiesStatutory deposits - - Purchase of trading securities (Treasury bills) - - Investment to other banks - - Investment to customers (400,948,724) (1,917,534,519)Other assets (27,059,588) (2,723,942,943)Deposits from other banks (1,813,162,649) 2,047,262,309 Deposits from customers 1,760,244,704 2,057,532,945 Other liabilities account of customers - - Trading liabilities - - Other liabilities (28,412,152) 21,705,330

(509,338,409) (514,976,877)Net cash from operating activities 19,972,836 10,824,175

B) Cash flows from investing activitiesDebentures - - Proceeds from sale of securities - - Payments for purchases of securities - - Purchase of property, plant and equipment (5,849,042) (9,098,727)Payment against lease obligation - - Proceeds from sale of property, plant and equipment - - Net cash used in investing activities (5,849,042) (9,098,727)

C) Cash flows from financing activitiesDividend paid - - Net Cash from financing activities - -

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 14,123,793 1,725,448 E) Effects of exchange rate changes on cash and cash equivalents - - F) Cash and cash equivalents at beginning of the year 48,510,222 46,784,774 G) Cash and cash equivalents at end of the year (D+E+F) 62,634,015 48,510,222

Cash and cash equivalents at end of the yearCash in hand (including foreign currencies) 62,420,709 48,302,086 Balance with Bangladesh Bank and its agent bank (s)(including foreign currencies) - - Balance with other banks and financial institutions 213,306 208,136 Placement with banks & other financial institutions - - Prize bonds - -

62,634,015 48,510,222

Prime Bank Limited-Islamic BranchesCash Flow Statement for the year ended 31 December 2012


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1 Cash in handi) In local currency 60,635,745 46,823,168 ii) In foreign currency 1,784,964 1,478,918 Sub-total (a) 62,420,709 48,302,086 Cash with Bangladesh Bank and its agents Balance with Bangladesh Bank - - Balance with Sonali Bank (as agent of Bangladesh Bank) - - Sub-total (b) - - Grand total (a+b) 62,420,709 48,302,086 Required CRR and SLR of Islamic Branches are maintained at Head Office

2 Balance with other banks and financial institutionsIn Bangladesh (note-2.1) 213,306 208,136 Outside Bangladesh (note-2.2) - -

213,306 208,136 2.1 In Bangladesh

Short-term deposit accountsICB Islamic Bank Ltd., Motijheel, Dhaka 15,599 15,599 ICB Islamic Bank Ltd, Sylhet 18,971 18,971 Social Islami Investment Bank Ltd. Dhaka 12,433 12,210

47,003 46,780 Savings accountsAl Arafah Islami Bank Ltd. Dhaka 63,492 61,296 Bank Al Falah Ltd. Dhaka 36,109 35,416 Social Islami Investment Bank Ltd. Dhaka 66,702 64,644

166,303 161,356 2.2 Outside Bangladesh (NOSTRO Accounts) - -

213,306 208,136 3 Placement with banks & other financial institutions - - 4 Investment in share & securities - - 5 Investments

a) In BangladeshQuard against TDR 997,689,634 692,899,102 Bai-Murabaha (cc pledge) 4,450,284,608 3,929,345,733 Bai-Muajjal (cc hypo) 3,058,092,259 3,189,486,454 Retail investment 775,652,281 1,811,287,478 Izara (note-5.2) 673,512,624 640,978,677 Bai-Salam (packing credit) 74,271,401 112,671,581 Staff investment 125,249,403 100,878,183 Hire purchase 2,753,052,395 2,069,056,551

12,907,804,605 12,546,603,759 b) Outside Bangladesh - -

12,907,804,605 12,546,603,759 Payable Inside BangladeshInland bills purchased 757,557,115 686,031,463 Payable Outside BangladeshForeign bills purchased and discounted 4,248,022 36,025,796

761,805,137 722,057,259 13,669,609,742 13,268,661,018

Prime Bank Limited-Islamic BranchesNotes to the Financial Statements for the year ended 31 December 2012 (Please see PBL notes 1-2)



5.1 Investments under the following broad categoriesInvestments 4,401,738,103 4,734,872,470 Bai-Murabaha / Bai-Muajjal 7,508,376,868 7,118,832,187 Quard against TDR 997,689,634 692,899,102

12,907,804,605 12,546,603,759Bills purchased and discounted (note-6) 761,805,137 722,057,259

13,669,609,742 13,268,661,018 5.2 Izara

Lease rental receivable within 1 year 311,317,837 176,836,829 Lease rental receivable within 5 years 908,084,691 520,683,207 Lease rental receivable after 5 years - 18,088,000 Total lease / Izara rental receivable 1,219,402,528 715,608,036 Less: Unearned interest receivable 545,889,904 74,629,359 Net lease / Izara finance 673,512,624 640,978,677

5.3 Investments on the basis of significant concentration including bills purchased and discounted.a) Investments to Directors of the Bank - - b) Investments to Chief Executive and

other executives & officers 125,167,295 100,534,203 c) Investments to customer groups:

i) Commercial investment 1,690,146,448 832,450,507 ii) Export financing 112,903,107 929,531,086 iii) House building investment 1,392,961,486 1,205,731,803 iv) Retail investment 775,652,281 1,811,287,478 v) Small and medium enterprises 1,080,027,038 1,556,251,000 vi) Special program investment - - vii) Staff investment 82,108 - viii) Industrial investments 7,709,101,131 5,985,171,614 ix) Other investment 783,568,848 847,703,327

13,544,442,447 13,168,126,815 13,669,609,742 13,268,661,018

d) Details of Industrial investmentsi) Agricultural industries 192,491,753 200,615,006 ii) Textile industries 3,934,920,022 3,478,845,642 iii) Food and allied industries 536,801,685 275,232,159 iv) Pharmaceutical industries 101,150,019 122,539,541 v) Leather, chemical, cosmetics, etc. - 32,488,190 vi) Tobacco industries - - vii) Cement and ceramic industries 841,183,375 483,672,026 viii) Service Industries 13,561,298 168,190,814 ix) Transport and communication industries 305,297,467 344,746,492 x) Other industries including bills purchase and discounted 1,783,695,512 878,841,745

7,709,101,131 5,985,171,614 5.4 Investments -geographical location-wise

Inside BangladeshUrbanDhaka Division 9,601,679,320 9,912,388,992 Chittagong Division 3,873,823,138 3,126,517,903 Khulna Division - - Rajshahi Division - - Barisal Division - - Sylhet Division 194,107,284 229,754,123

13,669,609,742 13,268,661,018 RuralDhaka Division - - Chittagong Division - - Sylhet Division - -

- - Outside Bangladesh - -

13,669,609,742 13,268,661,018

Prime Bank Limited-Islamic BranchesNotes to the Financial Statements for the year ended 31 December 2012



5.5 Details of pledged collateralsCollateral of movable / immovable assets 11,973,280,644 11,638,549,621 Local banks and financial institutions guarantee 48,261,564 59,826,451 Export documents 44,061,714 121,756,469 Fixed deposit receipts 683,671,820 717,920,046FDR of other banks - - Personal guarantee 619,475,122 497,187,982 Other securities 300,858,878 233,420,449

13,669,609,742 13,268,661,018 5.6 Particulars of investments

i) Investments considered good in respect of which the Bank isfully secured 12,701,014,178 12,538,050,331

ii) Investments considered good against which the Bank holds nosecurity other than the debtors' personal guarantee 920,334,000 497,190,238

iii) Investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors 48,261,564 233,420,449

iv) Investments adversely classified; provision not maintainedthere against - -

13,669,609,742 13,268,661,018 v) Investments due by directors or officers of the banking company

or any of them either separately or jointly with any other persons 125,249,403 100,534,203 vi) Investments due from companies or firms in which the directors of

the Bank have interest as directors, partners or managing agents or in case of private companies, as members - -

vii) Maximum total amount of investments, including temporary investment made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person. 125,249,403 100,534,203

viii) Maximum total amount of investments, including temporary investments granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in the case of private companies, as members

- - ix) Due from banking companies - - x) Classified investments

a) Classified investments on which profithas not been charged (note-5.7) 311,786,384 65,061,000

b) Provision on classified investments (note-5.8) 97,528,306 21,485,100 c) Provision kept against investments classified as bad debts 66,572,306 14,843,000 d) Profit Suspense Account (note-11) 45,123,559 72,774,697

xi) Cumulative amount of written off investmentsOpening Balance - -Amount written off during the year - - Amount realised against investments previously written off - - The amount of written off investments - - for which law suits have been filed

- -




5.7 Classification of investmentsUnclassified

Standard including staff investment 13,156,437,869 13,111,506,018 Special mention account (SMA) 201,385,489 92,094,000

13,357,823,358 13,203,600,018 ClassifiedSub-standard 189,449,012 33,615,000 Doubtful 32,104,862 9,711,000 Bad / Loss 90,232,510 21,735,000

311,786,384 65,061,000 13,669,609,742 13,268,661,018

5.8 Particulars of required provision for investments

Base RateStatus for provision (%)General ProvisionInvestments (Excluding SMA) 13,156,437,869 *Various 199,007,118 217,834,900 Special mention account (SMA) 201,385,489 5 10,069,275 4,109,000

209,076,393 221,943,900

*General provision is kept @ 1% on general investments and 2% on small enterprise financing and 5% on consumer financing.Specific provisionSub-standard 103,318,662 20 20,663,732 2,810,600 Doubtful 20,584,535 50 10,292,268 3,831,500 Bad / Loss 66,572,306 100 66,572,306 14,843,000

97,528,306 21,485,100Required provision for investments 306,604,699 243,429,000Provision maintained by Head Office 306,604,699 243,429,000 Excess / (short) provision at 31 December 2012 - -

5.9 Particulars of required provision for Off-balance Sheet Exposures

Base Ratefor provision 1%

Acceptances and endorsements 3,495,699,949 34,956,999 29,668,997 Letter of guarantee 1,004,840,480 10,048,405 11,970,882 Letter of credit 1,682,087,711 16,820,877 21,493,955 Required provision on Off-balance Sheet Exposures 61,826,281 63,133,833 Provision maintained by Head Office 61,826,281 63,133,833 Excess / (short) provision at 31 December 2012 - -

6 Bills purchased and discounted Payable in Bangladesh 757,557,115 686,031,463 Payable outside Bangladesh 4,248,022 36,025,796

761,805,137 722,057,259




7 Fixed assets including premises, furniture and fixtures Property, Plant & EquipmentLand - - Building 7,752,957 7,951,751 Furniture and fixtures 14,099,795 13,361,043Office equipment and machinery 11,834,066 11,377,346 Vehicles 5,701,027 6,944,037 Leased vehicles 414,533 1,070,333 Library books 811 1,120

39,803,189 40,705,631 ATMHardware & equipment - - Furniture & fixture - - Interior decoration - -

- - 39,803,189 40,705,631

Less: Accumulated depreciation - - 39,803,189 40,705,631

Intangibles assetsSoftware-core banking - - Software-ATM - - Cost of intangibles assets - - Less: Accumulated amortization - -

- - Net book value at the end of the year 39,803,189 40,705,631

8 Other assets Stationery and stamps 306,281 362,381 Profit receivable 341,612,838 526,361,454 Advance income tax 104,062 - Advance deposits and advance rent 2,257,019 3,673,148 Branch adjustments account 1,000,059,777 2,644,960,989 Migration account - (121,393)Suspense account 683,312 107,795 Islamic transit account - - Sundry assets 1,178,571,630 43,750,717

2,523,594,919 3,219,095,091

9 Borrowings from other banks, financial institutions and agentsIn Bangladesh - 200,000,000 Outside Bangladesh - -

- 200,000,000

10 Deposits and other accountsDeposits from banks (note -10.1.a) 1,811,423,535 3,624,586,184 Deposits from customers (note-10.1.b) 14,434,632,888 12,674,388,184

16,246,056,423 16,298,974,368

10.1 a) Deposits from Banks

Al-wadeeah current deposits - - Bills payable - - Mudaraba savings deposits 477,642,721 855,358,468 Mudaraba special notice deposits 333,780,814 769,257,716 Mudaraba fixed deposits 1,000,000,000 1,999,970,000

1,811,423,535 3,624,586,184




Sl No. Name of Bank Type of Account1 Al Arafah Islami Bank Ltd MSB 53,202,185 11,168,569 2 Bank Al-Falah MSB 11,231 584,671 3 Social Islami Bank Ltd MSB 418,318,007 837,689,1054 Islami Bank Bangladesh Ltd MSB 6,111,298 5,916,123

Sub Total 477,642,721 855,358,468

5 Exim Bank Ltd MSND 20,759,196 22,307,715 6 ICB Islamic Bank Ltd MSND 2,049,567 1,978,848 7 Social Islami Bank Ltd MSND 7,809 8,730 8 Shahjalal Islami Bank Ltd MSND 288,840,944 235,597,457 9 Islami Bank Bangladesh Limited MSND 22,123,298 509,364,966

Sub Total 333,780,814 769,257,716

10 Al Arafah Islami Bank Ltd MTDR - - 11 Islami Bank Bangladesh Limited MTDR 1,000,000,000 1,999,970,000

Sub Total 1,000,000,000 1,999,970,000

Grand Total 1,811,423,535 3,624,586,184

b) Customer Depositsi) Al wadeeah current deposits and other accountsAl-wadeeah current deposits 576,646,553 510,694,300 Foreign currency deposits 131,027,883 81,493,770 Security deposits 591,119 8,091,331 Sundry deposits 1,790,538,886 1,181,053,173

2,498,804,441 1,781,332,574 ii) Bills payable Pay orders issued 126,215,349 141,131,970 Pay slips issued 70,594 70,594 Demand draft payable 2,420,958 4,459,018 Foreign demand draft - - T. T. payable - -

128,706,901 145,661,582 iii) Mudaraba savings deposits 1,405,878,937 1,411,352,479 iv) Mudaraba term depositsMudaraba fixed deposits 7,152,959,411 6,658,510,363 Mudaraba special notice deposits 628,218,239 418,056,563 Non resident Taka deposits - 2,205 Mudaraba special scheme deposits 2,620,064,959 2,259,472,418

10,401,242,609 9,336,041,549 14,434,632,888 12,674,388,184 16,246,056,423 16,298,974,368

c) Deposits and other accountsCurrent deposits and other accountsDeposits from banks (note -10.1.a) - - Deposits from customers (note-10.1.b.i) 2,498,804,441 1,781,332,574

2,498,804,441 1,781,332,574 Bills payableDeposits from banks (note -10.1.a) - - Deposits from customers (note-10.1.b.ii) 128,706,901 145,661,582

128,706,901 145,661,582 Savings bank / mudaraba savings depositsDeposits from banks (note -10.1.a) 477,642,721 855,358,468 Deposits from customers (note-10.1.b.iii) 1,405,878,937 1,411,352,479

1,883,521,658 2,266,710,947




Term / Fixed depositsDeposits from banks (note -10.1.a) 1,333,780,814 2,769,227,716 Deposits from customers (note-10.1.b.iv) 10,401,242,609 9,336,041,549

11,735,023,423 12,105,269,26516,246,056,423 16,298,974,368

11 Other liabilitiesExpenditure and other payables 4,461,883 5,222,897 Unearned commission on guarantee - - Obligation under finance lease - - Provision for unclassified investments - - Provision for classified investment - - Provision for off-balance sheet exposure - - Interest suspense account 45,123,559 72,774,697

49,585,442 77,997,594 12 Contingent liabilities

12.1 Acceptances and endorsementsBack to back bills (Foreign) 2,532,366,798 2,454,716,959 Back to back bills (Local) 931,935,821 794,887,752 Back to back bills (EPZ) 31,397,330 44,771,351

3,495,699,949 3,294,376,062 Less: Margin (642,082,871) (327,476,334)

2,853,617,078 2,966,899,728 12.2 Letters of guarantee

Letters of guarantee (Local) 379,740,629 903,232,150 Letters of guarantee (Foreign) 625,099,851 330,055,946 Foreign counter guarantees - -

1,004,840,480 1,233,288,096 Less: Margin (37,253,313) (36,199,943)

967,587,167 1,197,088,153 Money for which the Bank is contingently liable in respect of guarantees given favoring:Directors or officers - - Government 127,865,180 1,108,705 Banks and other financial institutions 643,680,136 930,102,770 Others 233,295,164 302,076,621

1,004,840,480 1,233,288,096 Less: Margin (37,253,313) (36,199,943)

967,587,167 1,197,088,153 12.3 Irrevocable Letters of Credit

Letters of credit (Sight) 441,735,207 1,043,230,675 Letters of credit (Deferred) 774,173,437 1,012,205,240 Back to back L/C 466,179,067 520,168,209 Bank’s liabilities PAD - -

1,682,087,711 2,575,604,124 Less: Margin (625,568,697) (426,208,666)

1,056,519,014 2,149,395,458




12.4 Bills for collectionOutward bills for collection 167,892,693 163,403,974 Inward local bills for collection - - Inward foreign bills for collection - -

167,892,693 163,403,974 Less: Margin (213,050) (713,050)

167,679,643 162,690,924 13 Investment income

i) Income from general investmentQuard against TDR 113,143,164 64,950,185 Bai-Murabaha (cc pledge) 690,481,270 472,312,148 Bai-Muajjal (cc hypo) 523,385,528 448,797,065 Retail investment loan 130,147,008 226,738,692 Izara 104,558,960 93,294,380 Bai-Salam (packing credit) 11,820,191 10,692,730 Staff loan 5,830,656 5,367,968 Hire purchase 351,409,160 238,802,553 Other investments 460,702,605 581,157,850 Inland bills purchased 129,796,772 97,967,658 Sub-total (i) 2,521,275,314 2,240,081,228 ii) Profit on deposits with other Islamic banksIn Bangladesh 6,644 6,547 Out side Bangladesh - - Sub-total (ii) 6,644 6,547 Grand total (i+ii) 2,521,281,958 2,240,087,775

14 Profit paid on depositsa) Profit paid on deposits:

Mudaraba savings deposits 119,574,501 93,942,793 Mudaraba special notice deposits 162,218,851 56,714,098 Mudaraba term deposits 1,059,813,449 978,435,287 Mudaraba special scheme deposits 266,068,567 220,885,638Foreign currency deposits 13,732 - Others 51,637,837 85,319,733

1,659,326,937 1,435,297,549 b) Interest / Profit paid for borrowings:

Bangladesh Bank/ Other Bank/ FI/Agents bank 328 - Islamic Bond Fund 4,283,155 14,431,389

4,283,483 14,431,389 1,663,610,420 1,449,728,938

15 Commission, exchange and brokerage Commission on L/Cs-sight 27,673,365 24,221,526 Commission on L/Cs-deferred 3,455,822 6,102,915 Commission on L/Cs-back to back 30,761,631 38,659,972 Commission on L/Gs 9,721,337 18,290,576 Commission on remittance 2,218,224 2,238,591 Other commission 67,933 56,067

73,898,312 89,569,647 Exchange gain (note - 15.1) - including gain from FC dealings 26,515,613 24,533,984 Settlement fees / Brokerage - -

100,413,925 114,103,631




15.1 Exchange gainExchange gain 26,515,613 24,533,984 Less: Exchang loss - -

26,515,613 24,533,98416 Other operating income

Rent recovered 533,210 429,377 Service and other charges 4,621,903 5,178,300 Retail Income 17,747,844 19,359,896 Income from ATM Service 2,647,483 1,550 Postage / telex / SWIFT/ fax recoveries 4,324,463 3,276,224 Gain on sale of assets - - Incidental charges - - Rebate from foreign Bank 4,123,454 3,844,192 Foreign correspondent charges - - Miscellaneous earnings (note-16.1) 17,167,226 17,144,303

51,165,583 49,233,842

16.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank and sale proceeds of various items, etc.

17 Salaries and allowancesBasic pay 47,632,946 35,724,009 Allowances 35,655,325 27,132,733 Bonus 7,426,000 5,284,450Bank’s contribution to provident fund 4,540,426 3,239,182

95,254,697 71,380,374 18 Rent, taxes, insurance, electricity, etc.

Rent, rate and taxes 7,354,877 6,681,659 Lease rent 10,617 23,866 Insurance 952,440 786,342 Power and electricity 3,801,028 3,145,778

12,118,962 10,637,645 19 Legal expenses

Legal expenses 211,615 175,870 Other professional charges - -

211,615 175,870 20 Postage, stamp, telecommunication, etc.

Postage 1,011,532 1,121,635 Telegram, telex, fax and e-mail 2,947,781 3,831,804 Data communication 4,897,397 2,856,468 Telephone - office 484,704 635,714 Telephone - residence 55,622 30,898

9,397,036 8,476,519 21 Stationery, printing and advertisements, etc.

Office and security stationery 2,167,810 2,391,134 Computer consumable stationery 2,943,042 3,403,078 Publicity and advertisement 235,461 225,604

5,346,313 6,019,816




22 Charges on loan losses Loan -written off - - Interest waived - -

- -23 Depreciation and repair of Bank’s assets

DepreciationFixed assets 6,751,484 5,039,864Leased assets - -

6,751,484 5,039,864 RepairsBuilding 343,938 133,357 Furniture and fixtures 170,805 980,779 Office equipment 1,401,163 1,383,913 Bank’s vehicles 96,221 130,480 Maintenance 601,853 700,224

2,613,980 3,328,753 9,365,464 8,368,617

24 Other expenses

Security and cleaning 4,888,973 4,681,490 Entertainment 2,223,296 3,249,146 Car expenses 4,850,965 3,414,506 Books, magazines and newspapers, etc. 21,737 32,364 Medical expenses - - Bank charges and commission paid 800 600 Loss on sale of assets - - Finance charge for lease assets - - Donations - - Traveling expenses 755,884 940,660 Local conveyance, labor, etc. 825,063 743,527 Business development - 5,140 Training and internship 202,750 182,200 Remittance charges 617,260 678,788 Laundry, cleaning and photographs, etc. 333,809 453,730 Exgratia 385,000 381,500 Miscellaneous expenses 752,791 550,653

15,858,328 15,314,304 25 Provision for investments & off -balance sheet exposure

Provision for bad and doubtful investments - - Provision for unclassified investments - - Provision for off-balance sheet exposure - - Provision for other assets - -

- -



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,797

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5 48

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,802

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,121

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157

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6


High Lights of the BankAnnexure-J

(Taka in million)

Sl no. Particulars 2012 2011

1 Paid-up capital 9,357.71 7,798.10

2 Total capital (Consolidated) 25,915.65 24,228.81

3 Total capital (Solo Basis) 25,751.53 24,068.59

4 Capital surplus / (deficit) (Consolidated) 5,405.38 4,790.85

5 Capital surplus / (deficit) (Solo Basis) 5,517.56 4,742.88

6 Total assets 236,833.01 199,950.49

7 Total deposits 182,052.87 159,815.72

8 Total loans and advances / investments 160,889.85 138,848.43

9 Total contingent liabilities and commitments 108,187.32 101,055.11

10 Credit deposit ratio 88.38% 86.88%

11 Percentage of classified loans / investments against total loans and advances / investments 3.83% 1.37%

12 Profit after tax and provision 2,698.99 3,634.13

13 Amount of classified loans / investments during the year 6,168.50 1,908.25

14 Provisions kept against classified loans / investments 1,949.08 778.23

15 Provision surplus / (deficit) against classified loans / investments 47.02 110.52

16 Cost of fund 8.75% 8.15%

17 Interest earning assets 212,204.41 179,536.84

18 Non-interest earning assets 24,628.59 20,413.65

19 Return on investment (ROI) 10.43% 13.94%

20 Return on assets (ROA) 1.24% 2.05%

21 Income from investment 4,633.33 4,157.29

22 Earnings per share (Taka) 2.88 3.88

23 Net income per share (Taka) 2.88 3.88

24 Price earning ratio (times) 12.83 11.46


Financial Statements (Annexure-K)O�-shore Banking Unit


Off-shore Banking UnitsBalance Sheet as at 31 December 2012

Particulars Notes2012 2011

USD Taka Taka

PROPERTY AND ASSETSCash In hand (including foreign currencies) - - - Balance with Bangladesh Bank and its agent bank (s) - - - (including foreign currencies) - - -

- - Balance with other banks and financial institutions In Bangladesh 3 2,086,683 166,621,451 237,669,828 Outside Bangladesh 5,384 429,879 440,662

2,092,067 167,051,330 238,110,490 Loans and advances Loans, cash credits, overdrafts, etc. 4 40,540,098 3,237,122,791 2,934,957,412 Bills purchased and discounted 5 20,763,690 1,657,978,582 535,408,180

61,303,788 4,895,101,373 3,470,365,592 Fixed assets including premises, furniture and fixtures 6 47,510 3,793,678 4,582,311 Other assets 7 1,494 119,278 137,307 Non - banking assets - - - Total assets 63,444,859 5,066,065,659 3,713,195,700

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents 8 59,649,290 4,762,989,842 3,211,821,032 Deposits and other accounts Current deposits 9 1,934,588 154,476,693 211,063,517 Bills payable - - - Savings bank deposits - - - Term deposits - - - Bearer certificate of deposit - - -

1,934,588 154,476,693 211,063,517 Other liabilities 10 1,860,981 148,599,124 290,311,151 Total liabilities 63,444,859 5,066,065,659 3,713,195,700

Capital / Shareholders’ equityPaid up capital - - - Statutory reserve - - - Foreign currency gain - - - Other reserve - - - Deficit in profit and loss account / Retained earnings - - - Total Shareholders’ equity - - - Total liabilities and Shareholders’ equity 63,444,859 5,066,065,659 3,713,195,700


Particulars Notes2012 2011

TakaUSD Taka

OFF- BALANCE SHEET EXPOSURES

Contingent liabilities 11Acceptances and endorsements 12,606 1,006,562 26,979,289 Letters of guarantee 227,296 18,149,544 18,604,817 Irrevocable letters of credit 6,645,924 530,676,369 876,183,273 Bills for collection 10,033,474 801,171,904 153,267,389 Other contingent liabilities - - -

16,919,300 1,351,004,379 1,075,034,768 Other commitmentsDocumentary 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 - - - Liabilities against forward purchase and sale - - - Other commitments - - -

- - Total Off-Balance Sheet exposures including contingent liabilities 16,919,300 1,351,004,379 1,075,034,768

Off-shore Banking UnitsBalance Sheet as at 31 December 2012


Off-shore Banking UnitsProfit and Loss Account for the year ended 31 December 2012 Particulars Notes

2012 2011TakaUSD Taka

Interest income 12 2,372,600 194,204,867 136,707,445

Interest paid on deposits, borrowings, etc. 13 (685,986) (56,150,131) (38,616,994)

Net interest 1,686,614 138,054,736 98,090,451

Commission, exchange, brokerage, etc. 14 279,844 22,906,115 29,568,129

Other operating income 15 75,069 6,144,669 6,668,604

Total operating income (A) 2,041,527 167,105,520 134,327,184

Salaries and allowances 16 149,214 12,213,631 9,215,024

Rent, taxes, insurance, electricity, etc. 17 12,080 988,779 766,946

Legal expenses 244 19,975 27,047

Postage, stamp, telecommunication, etc. 18 2,011 164,596 148,704

Stationery, printing, advertisements, etc. 19 2,890 236,585 177,140

Auditors’ fees - - -

Depreciation and repair of Bank’s assets 20 9,440 772,677 709,091

Other expenses 21 29,172 2,387,800 3,782,774

Total operating expenses (B) 205,051 16,784,043 14,826,724

Profit / (loss) before provision (C=A-B) 1,836,476 150,321,477 119,500,460

Provision for loans and advances / investments

Specific provision - - -

General provision - - -

- -

Provision for diminution in value of investments - - -

Other provision - - -

Total provision (D) - - -

Total profit / (loss) before taxes (C-D) 1,836,476 150,321,477 119,500,460

Provision for taxation

Current tax - - -

Deferred tax - - -

- - -

Net profit / (loss) after taxation 1,836,476 150,321,477 119,500,460


Particulars2012 2011

TakaUSD Taka

A) Cash flows from operating activitiesInterest receipts in cash 2,372,600 194,204,867 136,707,445 Interest payments (685,986) (56,150,131) (38,616,994)Fees and commission receipts in cash 279,844 22,906,115 29,568,129 Cash payments to employees (149,214) (12,213,631) (9,215,024)Cash payments to suppliers (19,398) (1,587,747) (1,358,680)Receipts from other operating activities 75,069 6,144,669 6,668,604 Payments for other operating activities (27,591) (2,258,415) (3,591,849)Cash generated from operating activities before changesin operating assets and liabilities 1,845,325 151,045,727 120,161,631

Increase / (decrease) in operating assets and liabilitiesLoans and advances to other banks - - - Loans and advances to customers (18,906,200) (1,509,658,150) 2,186,052,718 Other assets 184 14,669 (979)Deposits from other banks / borrowings - - - Deposits from customers (643,983) (51,421,947) (212,046,262)Other liabilities (3,522,238) (281,250,365) (5,310,901)

(23,072,237) (1,842,315,793) 1,968,694,576 Net cash from operating activities (21,226,912) (1,691,270,066) 2,088,856,207

B) Cash flows from investing activitiesPurchase / sale of property, plant and equipment (376) (30,025) (1,682,366)Proceeds from sale of property, plant and equipment - - - Net cash used in investing activities (376) (30,025) (1,682,366)

C) Cash flows from financing activitiesBorrowing from Prime Bank Limited, Other Bank and Bangladesh Bank 20,410,350 1,629,764,406 (1,916,881,711) Net cash use in financing activities 20,410,350 1,629,764,406 1,916,881,711)

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) (816,938) (61,535,685) 170,292,130 E) Effects of exchange rate changes on cash and cash equivalents - (9,523,475) (243,265,280)F) Cash and cash equivalents at beginning of the year 2,909,005 238,110,490 311,083,640 G) Cash and cash equivalents at end of the year (D+E+F) 2,092,067 167,051,330 238,110,490

Cash and cash equivalents at end of the yearCash in hand (including foreign currencies) - - - Balance with Bangladesh Bank and its agent bank (s) - - - (including foreign currencies)Balance with other banks and financial institutions 2,092,067 167,051,330 238,110,490

2,092,067 167,051,330 238,110,490

Off-shore Banking UnitsCash Flow Statement for the year ended 31 December 2012


1.1 Status of the units

Off-shore Banking Units of Prime Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank obtained the Off-shore Banking Unit permission vide letter no. BRPD (P) 744 (84)/2001-868 dated 19 March 2001. The Bank commenced the operation of its Off-shore Banking Unit from March 15, 2007. Presently the Bank has 3 (Three) units in Dhaka, Adamjee EPZ and Chittagong.

1.1.1 Principal activities

The principal activities of the units are to provide all kinds of commercial banking services to its customers through its Off-shore Banking Units in Bangladesh.


1.2.1 Basis of accounting

The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the Bank Companies Act 1991, Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank.

1.2.2 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

1.2.3 Foreign currency transaction

a) Foreign currencies translation

Foreign currency transactions are converted into equivalent Taka using the ruling exchange rates on the dates of respective transactions as per BAS-21” The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances held in US Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent.

b) Commitments

Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated at contracted rates. Contingent liabilities / commitments for letter of credit and letter of guarantee denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.

c) Translation gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the translation of net investment in foreign subsidiary.

Off-shore Banking UnitsNotes to the Financial Statements for the year ended 31 December 2012


1.2.4 Cash flow statement

Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 “ Cash Flow Statement” under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

1.2.5 Reporting period

These financial statements cover from January 01 to December 31, 2012.

1.3 Assets and basis of their valuation

1.3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit management for its short-term commitments.

1.3.2 Loans and advances / investments

a) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis.

b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts.

1.3.3 Fixed assets and depreciation

a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 " Property, Plant and Equipment". The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets.

Category of fixed assets Rate

Furniture and fixtures 10%

Office equipment 20%

c) For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is charged up to the date of disposal.

1.4 Basis for valuation of liabilities and provisions

1.4.1 Benefits to the employees

The retirement benefits accrued for the employees of the units as on reporting date have been accounted for in accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefit”. Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below:



a) Provident fund

Provident fund benefits are given to the permanent staffs of the OBU under the Provident Fund Rules of the Bank. The Commissioner of Income Tax, Taxes Zone - 5, Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from 07 July 1997. The Fund is operated by a Board of Trustees consisting six members (03 members from management and other 03 members from the Board of Directors) of the Bank. All confirmed employees of the Units are contributing 10% of their basic salary as subscription to the Fund. The units also contribute equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account on yearly basis.

b) Gratuity fund

Prime Bank operates an unfunded gratuity scheme, provision in respect of which is made annually covering all its permanent eligible employees. Actuarial valuation of gratuity scheme had been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “ Employee Benefits” . Gratuity fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited.

c) Welfare fund

Prime Bank’s employees’ welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental death or permanent disabilities of the employees. Disbursement from the fund is done as per rules for employees’ welfare fund. Welfare fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited.

d) Incentive bonus

Prime Bank started a incentive bonus scheme for its employees. 10% of net profit after tax is given by the Board of directors in every year for its employees. These bonus amount distributed among the employees as per performance. The bonus amount are paid annually, normally first quarter of every following year and the cost are accounted for the period to which it relates. Provision for incentive bonus for Off-shore Banking Units is kept with Head Office, Prime Bank Limited.

1.4.2 Provision for liabilities

A provision is recognised in the balance sheet when the unit has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

1.5 Revenue recognition

1.5.1 Interest income

In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognized on accrual basis.

1.5.2 Fees and commission income

Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.

1.5.3 Interest paid and other expenses

In terms of the provisions of the BAS - 1 “Presentation of Financial Statements” interest and other expenses are recognized on accrual basis.

2 General

a) These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.

b) Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 79.8499 (closing rate as at 31st December 2012) and Tk.81.8532 (average rate which represents the year end).




3 Balance with other banks and financial institutions

In Bangladesh (note-3.1) 2,086,683 166,621,451 237,669,828 Outside Bangladesh (note-3.2) 5,384 429,879 440,662

2,092,067 167,051,330 238,110,490

3.1 In Bangladesh 2,086,683 166,621,451 237,669,828

3.2 Outside Bangladesh (Nostro accounts)

Current accountCitibank N.A., New York, USA 5,384 429,879 440,662

4 Loans and advances

i) Loans, cash credits, overdrafts, etc.Loan (General) 14,608,301 1,166,471,360 487,692,056 Hire purchase 12,387,244 989,120,208 1,227,785,543 Lease finance - - - Over Draft 635,301 50,728,723 122,598,061 T.R Loan 12,909,252 1,030,802,500 1,096,881,752

40,540,098 3,237,122,791 2,934,957,412 ii) Bills purchased and discounted (note-5)

Payable Inside BangladeshInland bills purchased 12,816,999 1,023,436,123 - Payable Outside Bangladesh Foreign bills purchased and discounted 7,946,691 634,542,459 535,408,180

20,763,690 1,657,978,582 535,408,180 61,303,788 4,895,101,373 3,470,365,592

5 Bills purchased and discounted

Payable in Bangladesh 12,816,999 1,023,436,123 - Payable outside Bangladesh 7,946,691 634,542,459 535,408,180

20,763,690 1,657,978,582 535,408,180

6 Fixed assets including premises, furniture and fixtures

CostFurniture and fixtures 26,657 2,128,598 2,438,607 Office equipment and machinery 9,366 747,842 921,382 Vehicle 11,487 917,238 1,222,322

47,510 3,793,678 4,582,311

7 Other assets

Advance deposits and advance rent 1,339 106,921 109,603 Stationery A/c & Stamp in hand 155 12,357 27,704 Due from Head Office - - -

1,494 119,278 137,307

8 Borrowings from other banks, financial institutions and agents

Bangladesh Bank - - 245,558,700 Prime Bank Limited 51,649,290 4,124,190,642 2,966,262,332 Other Bank & Financial Institutes 8,000,000 638,799,200 -

59,649,290 4,762,989,842 3,211,821,032




9 Deposits and other accounts

Bank deposits - - - Customer deposits and other accounts (note-9.1) 1,934,588 154,476,693 211,063,517

1,934,588 154,476,693 211,063,517

9.1 Customer deposits and other accounts

Current deposits 1,503,392 120,045,666 110,154,729 Foreign currency deposits 181,317 14,478,118 14,785,744 Security deposits receipts - - - Sundry deposits 249,880 19,952,909 86,123,044

1,934,588 154,476,693 211,063,517

10 Other liabilities

Interest on bills discount - - - Interest on borrowing - - 47,702 Provision for Expenses 24,504 1,956,661 51,065 Suspense A/c - - 606,849 Due to Head Office 1,836,476 146,642,463 289,605,535

1,860,981 148,599,124 290,311,151

11 Contingent liabilities

11.1 Acceptance & endorsementBack to Back bills 12,606 1,006,562 26,979,289

12,606 1,006,562 26,979,289 Less: Margin - - -

12,606 1,006,562 26,979,289

11.2 Letters of guaranteeLetters of guarantee (Local) 227,296 18,149,544 18,604,817 Letters of guarantee (Foreign) - - - Foreign counter guarantees - - -

227,296 18,149,544 18,604,817 Less: Margin - - -

227,296 18,149,544 18,604,817

11.3 Irrevocable Letters of creditsLetters of credits 6,645,924 530,676,369 876,183,273 Back to Back letter of credit - - -

6,645,924 530,676,369 876,183,273 Less: Margin - - -

6,645,924 530,676,369 876,183,273

11.4 Bills for collectionOutward local bills for collection - - - Outward foreign bills for collection 10,033,474 801,171,904 153,267,389 Inward local bills for collection - - - Inward foreign bills for collection - - -

10,033,474 801,171,904 153,267,389 Less: Margin - - -

10,033,474 801,171,904 153,267,389




12 Interest income

Loan (general) 337,484 27,624,171 30,307,117 SOD 43,661 3,573,801 1,017,022 LTR loan 666,811 54,580,573 39,498,996 Lease finance - - - Hire purchase 987,244 80,809,094 46,202,758 Payment against documents - - 734,116 Documentary bills purchased 305,819 25,032,251 18,433,181 Others - - - Interest on loans and advances 2,341,019 191,619,890 136,193,190

Interest on balance with other banks and financial institutions - - - Interest received from FC account 31,581 2,584,977 514,255

31,581 2,584,977 514,255 Total Interest income 2,372,600 194,204,867 136,707,445

13 Interest on deposits, borrowings, etc.

a) Interest paid on deposits 679 55,551 48,680 b) Interest paid on local bank accounts 668,724 54,737,193 23,969,847 c) Interest paid on Bangladesh Bank 16,583 1,357,387 14,598,467

685,986 56,150,131 38,616,994

14 Commission, exchange and brokerage

Commission on L/Cs 85,324 6,984,070 11,162,368 Commission on L/Gs 2,025 165,779 - Commission on export bills 71,223 5,829,795 9,306,445 Commission on bills purchased - - - Commission on accepted bills 49,784 4,075,017 5,333,504 Commission on OBC, IBC, etc. - - - Commission on PO, DD, TT, TC, etc. 1,078 88,217 450,559 Commission for services rendered to issue of shares - - - Other commission 70,409 5,763,237 3,315,253

279,844 22,906,115 29,568,129 Exchange gain including gain from FC dealings - - - Brokerage - - -

279,844 22,906,115 29,568,129 15 Other operating income

Postage charge recovery 7,509 614,636 1,169,241 Service & other charge - - - SWIFT charge recovery 11,242 920,173 989,317 Miscellaneous earnings 56,319 4,609,860 4,510,046

75,069 6,144,669 6,668,604

16 Salaries and allowances

Basic pay 68,687 5,622,211 4,325,003 Allowances 63,418 5,190,934 3,880,152 Bonus 10,656 872,251 613,231 Unit’s contribution to provident fund 6,453 528,235 396,638 Retirement benefits and gratuity - - -

149,214 12,213,631 9,215,024




17 Rent, taxes, insurance, electricity, etc.

Rent, rate and taxes 9,059 741,506 558,905 Insurance 682 55,856 53,419 Power and electricity 2,339 191,417 154,622

12,080 988,779 766,946 18 Postage, stamp, telecommunication, etc.

Postage 1,084 88,754 47,681 Telegram, telex, fax and e-mail 665 54,396 49,403 Telephone - office 254 20,783 47,549 Telephone - residence 8 663 4,071

2,011 164,596 148,704

19 Stationery, printing and advertisements, etc.

Office and security stationery 1,601 131,044 97,692 Computer consumable stationery 1,154 94,476 75,389 Publicity and advertisement 135 11,065 4,059

2,890 236,585 177,140

20 Depreciation and repair of Bank’s assetsDepreciation Fixed assets 8,848 724,250 640,563 Leased assets - - -

8,848 724,250 640,563 RepairsFurniture and fixtures - - 20,156 Office equipment 392 32,104 33,943 Vehicle 53 4,321 3,263 Maintenance 147 12,002 11,165

592 48,427 68,528 9,440 772,677 709,091

21 Other expenses

Security and cleaning 10,449 855,283 829,481 Entertainment 1,530 125,254 73,844 Bank charge & Commission 9,031 739,180 3,434 Car expenses 4,485 367,085 274,674 Books, magazines and newspapers, etc. 115 9,426 11,065 Travel expenses 1,284 105,118 126,720 Local conveyance, labor, etc. 680 55,659 46,644 Training & internship - - - Other Pofessional Charges 427 34,928 - Exgratia 43 3,541 3,542 Miscellaneous expenses 1,128 92,326 2,413,370

29,172 2,387,800 3,782,774




Auditor’s Reportto the shareholders of Prime Bank Investment Limited

We have audited the accompanying financial statements of Prime Bank Investment Limited (PBIL) which comprise the financial position as at 31 December 2012 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information disclosed in Notes 1-39 to the financial statements.

Management’s Responsibility for the Financial Statements

Management of PBIL is responsible for the preparation and fair representation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements which have been prepared in accordance with Bangladesh Accounting Standards give a true and fair view of the state of affairs of the Company as at 31 December 2012 and of their cash flows for the period from 01 January 2012 to 31 December 2012 and comply with applicable laws and regulations.

Emphasis of matter

Without qualifying our opinion above, we draw attention to the following matters:

1. The company paid interim dividend, as mentioned in note# 23 to the financial statements, before issuance of press release# SEC/Mukhopatro/2011/696 dated 19 February 2013 of Bangladesh Securities and Exchange Commission, as referred in note# 20.02.

2. In note# 38 to the financial statements, the company disclosed contingent liability regarding waiver of interest on loan provided to affected investors.

Report on Other Legal and Regulatory Requirements

We also report that:

(a) we have obtained all the material information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;

(c) the Company’s financial position and financial performance dealt with by the report are in agreement with the books of account; and

(d) the expenditure incurred was for the purposes of the Company’s business.

Dated, Dhaka27 February 2013

ACNABINChartered Accountants


Statement of Financial Positionas at 31 December 2012

Notes Amount in Taka

2012 2011

ASSETS

Non-Current Assets

Property, plant and equipment 5 22,809,876 27,599,950 Investment in Prime Bank Securities Ltd 6 37,500,000 37,500,000 Preliminary and pre-operational expenses 7 3,660,401 4,183,316

Total non-current assets (A) 63,970,277 69,283,266

Current Assets

Advances, deposits and prepayments 8 6,356,759,509 5,909,408,197 Investment in shares 9 1,399,569,819 1,441,557,511 Dividend Receivable 10 - 48,603 Prepaid Expenses 11 108,044 735,332 Advance corporate income tax 12 29,019,573 112,340,005 Cash and bank balances 13 90,418,458 3,254,574

Total current assets (B) 7,875,875,403 7,467,344,223 Total Assets (A+B) 7,939,845,680 7,536,627,489

EQUITY AND LIABILITIES

Capital and Reserve

Share capital 14 3,000,000,000 3,000,000,000 Retained earnings 86,488,306 152,129,749

Total Equity (C) 3,086,488,306 3,152,129,749

Non-current liabilitiesDeferred tax liabilities 1,203,477 2,151,261

Total non-current liabilities (D) 15 1,203,477 2,151,261

Current Liabilities

Loan Facilities 16 3,933,012,530 3,578,091,569 Liability for withholding taxes 17 46,521 90,159,688 Security Deposit Receipt 18 44,100 44,100 Payable for expenses 19 8,037,006 7,092,400 Provision for investment and clients’ margin loan 20 504,502,037 400,000,000 Corporate income tax payable 21 155,023,509 253,038,532 Accounts payable 22 10,248,937 42,110,378 Dividend payable 23 240,000,006 6 Other payables 24 1,239,251 11,809,806

Total current liabilities (E) 4,852,153,897 4,382,346,480 Total Equity and Liabilities (C+D+E) 7,939,845,680 7,536,627,489

These financial statements should be read in conjunction with annexed notes 1 to 39.

Chief Executive Off icer Director Vice-Chairperson




Statement of Comprehensive Incomefor the year ended 31 December 2012

Notes Amount in Taka 2012 2011

INCOME (A)

Interest income 861,132,742 815,326,644 Transaction/settlement fee 59,535,567 149,381,569 Management fee 43,021,047 141,603,034 Gain on sale of shares 5,191,395 3,614,091 Dividend on shares 25 43,634,197 61,273,656 Underwriting Commission 26 177,600 1,139,600 Bank Interest on STD accounts 27 2,630,735 166,295 Documentation fees 7,500 54,000 Other Income 125,905 1,005,323

1,015,456,688 1,173,564,211 EXPENDITURE (B)

Interest expenses 513,953,702 392,108,259 Settlement and other fees 8,737,127 16,052,537 Transaction cost - 674,666 Salary and allowances 28 34,528,694 31,718,629 Rent, Taxes, Insurance and Electricity 29 11,274,109 10,451,172 Legal & Professional expenses 30 339,295 415,014 Postage, Stamp and Telecommunication 31 1,520,411 1,886,219 Stationery, Printing and Advertisement 32 1,472,157 2,383,560 Directors Remuneration 46,200 103,000 Auditor’s fee 115,000 62,700 Depreciation, Amortisation and Repair of assets 33 6,351,755 6,603,129 Entertainment, Travelling & Conveyance 34 1,141,992 4,191,404 Other expenses 35 3,062,969 3,517,313

582,543,411 470,167,601 Profit before provision and tax (C=A-B) 432,913,277 703,396,610

Less: Provision for investment and clients’ margin loan 104,502,037 388,952,446 Profit before tax 328,411,240 314,444,164 Less: Tax expenses 36 154,052,683 255,939,030 Profit after tax 174,358,557 58,505,134

Earnings per share 37 0.58 0.20


Dated, Dhaka27 February 2013 ACNABIN

Chartered Accountants


Statement of Changes in Equityfor the year ended 31 December 2012

Particulars Paid up capitalTaka

Retained earningsTaka

Total Taka

Balance as at 01 January 2012 3,000,000,000 152,129,749 3,152,129,749

Reversal of understated expense of prior years - - -

Restated balance as at 01 January 2012 3,000,000,000 152,129,749 3,152,129,749

Retained Profit for the year - 174,358,557 174,358,557

Interim dividend payable during the year - (240,000,000) (240,000,000)

Balance as at 31 December 2012 3,000,000,000 86,488,306 3,086,488,306




Statement of Cash Flowsfor the year ended 31 December 2012

Amount in Taka 2012 2011

A. Cash Flows from Operating Activities:

Cash generated from operations 379,037,404 696,049,250 Advance Income Tax (150,675,485) (100,000,000)Income tax on Dividend (89,999,999) - Payment for withholding taxes (2,383,026) - Advance deposit (1,000) - Income tax paid - (291,588,074)Net cash from operating activities 135,977,894 304,461,176

B. Cash Flows from Investing Activities:

Purchase of property, plant and equipment (474,932) (667,510)Sale of shares during the year 54,926,179 59,848,541 Purchase of shares during the year (7,747,640) (450,452,139)Margin Loan provided (6,348,091,622) (5,897,653,045)Recovery of Loan 5,897,653,045 5,041,355,927 Net cash from investing activities (403,734,970) (1,247,568,226)

C. Cash Flows from Financing Activities:

Loan from Prime Bank Ltd. & Bank Asia 354,920,960 1,295,084,571 Dividend paid - (359,999,994)Net cash used in financing activities 354,920,960 935,084,577

D. Net Cash Outflow for the Period (A+B+C) 87,163,884 (8,022,473)Opening cash and bank balances 3,254,574 11,277,047 Closing cash and bank balances 90,418,458 3,254,574




Notes to the Financial Statements for the year ended 31 December 2012

1. Reporting Entity

1.1 Prime Bank Investment Ltd is a subsidiary company of Prime Bank Ltd, incorporated as a public limited company on 28 April 2010 with the Registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no. C-84266/10 dated 28 April 2010 which has commenced its business on the same date. The functions of investment banking were separated from Prime Bank Ltd by forming a subsidiary company in terms of Bangladesh Bank’s BRPD circular no. 12 dated 14 October 2009. Bangladesh Securities and Exchange Commission (SEC) thereafter issued a full fledged merchant banking licence in favour of Prime Bank Investment Ltd, vide letter no. SEC/Reg/MB/SUB/2010/03/208 dated 02 June 2010 with effect from 01 June 2010.

1.2 Principal Activities The main objectives of the Company for which was established are to carry out the business of full-fledged

merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services, etc.

2. Basis of Preparation

2.1 Statement of compliance The financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards

(BFRS), the Companies Act 1994, Securities and Exchange Rules 1987 and other applicable laws in Bangladesh.

2.2 Basis of presentation of financial statements The financial statements are prepared on a going concern basis under historical cost convention in

accordance with generally accepted accounting principles. Wherever appropriate, such principles are explained in succeeding notes:

(i) Statement of Financial Position (Balance Sheet) (ii) Statement of Comprehensive Income (Income and Expenditure Statement) (iii) Statement of Cash Flows (iv) Statement of Changes in Equity (v) Notes to the Financial Statements 2.3 Reporting period The financial period of the Company under audit covers twelve (12) months from 01 January 2012 to 31 December 2012.

3. Significant Accounting Policies

The accounting policies set out below have been applied consistently to all periods.

3.1 Property, plant and equipment

3.1.1 Recognition and measurement Items of property, plant and equipment (PPE) are initially measured at cost. After initial recognition,

an item of PPE is carried at cost less accumulated depreciation and impairment losses.

3.1.2 Depreciation Depreciation is recognised in the statement of comprehensive income on monthly basis at straight-

line method over the estimated useful lives of each item of property, plant and equipment.

Items of property, plant and equipment are depreciated when the these come into use or are capitalised. In case of disposal, no depreciation is charged in the year of disposal.

Rate of depreciation on various items of property, plant and equipment considering the useful lives of assets are as follows:

Asset category Rate of depreciation (%)Furniture and fixtures 10Office and electrical equipment 20Books 20Vehicles 20



3.2 Preliminary and pre-operating expenses

3.2.1 Recognition and measurement

These are recognised as an asset if it is probable that future economic benefits that are attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably.

3.2.2 Amortisation of preliminary and pre-operating expenses

These are amortised over 10 years from the year of their first utilisation at the rate of Taka 522,915 per

year starting from the year ended 31 December 2010.

3.3 Advance, deposits and prepayments Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,

adjustments or charges to other account heads such as property, plant and equipment, inventory, etc.

Deposits are measured at payment value.

Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to Statement of Comprehensive Income.

3.4 Cash and cash equivalents Cash and cash equivalents comprise cash in hand and bank balances, which were held and available for use

of the Company without any restriction. 3.5 Statement of cash flows Statement of cash flows that has been prepare in accordance with the Bangladesh Accounting Standard-7

“Statement of Cash Flows” under direct method.

3.6 Investments During the previous year all investments in securities were recognised at cost, being fair value of the

consideration given, including acquisition charges associated with the investments. But from this year transaction costs have been treated as expenses in accordance with BAS-39, without considering the same. Due to impractibility of calculation prevoius year’s figure has not been restated. The valuation methods of investments used are:

3.6.1 Investment in listed securities These are acquired and held primarily for the purpose of selling them in future or held for dividend

income and are reported at cost. Unrealised gains are not recognised in the statement of comprehensive income. Provision for diminution in value of investment is provided in the financial statements on those securities whose market price is below the cost of investment by netting off with those whose value increase than cost.

3.6.2 Investment in Prime Bank Securities Ltd

Investment in associated company is accounted for under the cost method of accounting in the Company’s financial statements. Accordingly, investment in associated company is stated in the Company’s Statement of Financial Position at cost, less impairment losses, if any.

3.7 Intangible assets

(a) An intangible asset is recognised if it is probable that the future economic benefits that are attributable to the asset will flow to the entity and the cost of the assets can be measured reliably.

(b) Software represents the value of computer application software licensed for use of the Company other than those applied for the operating system of computers. Intangible assets are carried at their cost, less accumulated amortisation and impairment loss, if any.

Initial cost comprises license fees paid at the time of its acquisition and other directly attributable expenditures that are incurred in customising the software for its intended use.

(c) Expenditure incurred for software is capitalised only when it enhances and extends the economic benefits of software beyond its original specification and life and such cost is recognised as capital improvement and added to the original cost of software.



(d) Software is amortised using the straight-line method over the estimated useful life of 10 (ten) years commencing from the date of the acquisition available for use over the best estimates of its useful economic life.

3.8 Receivables Receivables are recognised when there is a contractual right to receive cash or another financial asset from another entity.

3.9 Share capital Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

3.10 Borrowing funds Borrowing funds include borrowings from Prime Bank Limited, which is stated in the statement of financial

position at amounts payable. 3.11 Provision for current taxation Provision for current income tax has been made @ 37.5% on business income as per Income Tax Ordinance-

1984, and the last year’s assessment has also been made at the same rate. Rates of tax on other categories of income applicable for the company are stated in note 21.

3.12 Provision for Deferred Taxation Deferred tax liabilities are amount of income taxes payable in future periods in respect of taxable temporary

differences. Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary differences. Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences arising between the carrying values of asset, liabilities, income and expenditure and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted at the date of statement of financial position. The impact on the account of changes in the deferred tax assets and liabilities has also been recognised in the statement of comprehensive income as per BAS-12 “Income Taxes”.

3.13 Benefits to the Employees The retirement benefits accrued for the employees of the Company as on reporting date have been accounted

for in accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefits”. Bases of enumerating the retirement benefit schemes operated by the Company are outlined below: (a) Provident Fund Provident fund benefits are given to the permanent employees of the Company in accordance with the

Company’s service rules. All confirmed employees of the Company are contributing 10% of their basic salary as contribution to the Fund. The Company also contributes equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account on yearly basis. The fund is administered by Prime Bank Ltd.

(b) Gratuity Fund The Company operates an unfunded gratuity scheme, provision in respect of which is made annually

covering all its permanent eligible employees. Actuarial valuation of gratuity scheme had been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employee Benefits”. The fund is administered by Prime Bank Ltd.

(c) Welfare Fund Prime Bank Investment Employees’ Welfare Fund is subscribed by monthly contribution of the

employees. The Company also contributes to the fund from time to time. The fund has been established to provide financial assistance in the event of death or permanent disabilities of the employees. Disbursement of loan from the fund is regulated as per rules of said fund. The fund is administered by Prime Bank Ltd.

(d) Incentive Bonus Prime Bank Investment Limited started an incentive bonus scheme for its employees. Maximum 10%

of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is being distributed among the employees based on their performance and is paid annually, normally first quarter of every following year and the costs are accounted for in the period in which it relates.



3.14 Provision for Liabilities A provision is recognised in the statement of financial position when the Company has a legal or constructive

obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS-37 “Provisions, Contingent Liabilities and Contingent Assets”.

4. Revenue Recognition

4.1 Interest income In terms of the provisions of BAS-18 “Revenue”, interest income is recognised on an accrual basis.

4.2 Investment income Interest income on investments is recognised on an accrual basis. Capital gains on investments in shares are

also included in investment income. Capital gains are recognised when these are realised.

4.3 Fees and commission income Fees and commission income arising on services provided by the Company are recognised on an accrual basis.

4.4 Dividend income on shares Dividend on shares is recognised during the period in which it is declared and ascertained i.e., established as

the right of shareholders. 4.5 Earnings per share Basic earnings per share Basic earnings per share have been calculated in accordance with BAS-33 “Earnings per Share” which have

been shown on the face of statement of comprehensive income. This has been calculated by dividing the basic earnings by the number of ordinary shares outstanding during the year.

4.6 Events after the reporting period Where necessary, all the material events after the reporting period date have been considered and appropriate

adjustment/disclosures have been made in the financial statements.

4.7 Directors’ responsibility on financial statements

The board of directors of the company is responsible for the preparation and presentation of these financial statements.

4.8 Related party transaction Related party transaction is a transfer of resources, services or obligation between related parties and here

the related party transaction is the three (03) STD A/C and two (02) Current A/C maintained with Prime Bank Limited- Motijheel Branch and the loan taken from Prime Bank Limited within the financial period.


Name of BAS No. Status

Presentation of Financial Statements 1 Applied

Inventories 2 N/A

Statement of Cash Flows 7 Applied

Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied

Events after the Reporting Period 10 Applied

Construction Contracts 11 N/A

Income Taxes 12 Applied

Segment Reporting 14 N/A

Property, Plant and Equipment 16 Applied

Borrowing Costs 23 Name of BAS

Related Party Disclosures 24 Applied

Accounting for Investments 25 Applied

Accounting and Reporting by Retirement Benefit Plans 26 N/A

Consolidated and Separate Financial Statements 27 N/A

Investment in Associates 28 N/A

Interests in Joint Ventures 31 N/A

Financial Statements: Disclosure and Presentation 32 Applied

Earnings per Share 33 Applied

Interim Financial Reporting 34 Applied

Impairment of Assets 36 Applied

Provisions, Contingent Liabilities and Contingent Assets 37 Applied

Intangible Assets 38 Applied

Financial Instruments: Recognition and Measurement 39 Applied

Investment Property 40 N/A

Agriculture 41 N/A

Name of the BFRS No. Status

First time adoption 1 N/A

Share-based Payment 2 N/A

Business Combinations 3 N/A

Insurance Contracts 4 N/A

Non-current Assets Held for Sale and Discontinued Operations 5 N/A

Exploration for and Evaluation of Mineral Resources 6 N/A

Financial Instrument Disclosure 7 Applied


4.9 Compliance report on Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting

Standards (BFRS) While preparing the financial statements, Prime Bank Investment Limited applied most of BAS and BFRS as

adopted by Institute of Chartered Accountants of Bangladesh. Details are given below:




5. Property, Plant and Equipment

Cost

Opening balance 35,774,588 35,107,078

Add: Additions during the period 474,932 667,510

Less : Disposals - -

Closing balance (A) 36,249,520 35,774,588

Accumulated Depreciation:

Opening balance 8,174,638 2,990,158

Add: Charge for the period 5,265,006 5,184,480

Closing balance (B) 13,439,644 8,174,638

Written down value (A-B) 22,809,876 27,599,950

Category-wise details of PPE are shown in Annex-A.

6. Investment in Prime Bank Securities Ltd. 37,500,000 37,500,000

An amount of Taka 37,500,000 was invested by the company in 3,750,000 ordinary shares of Taka 10 each of Prime Bank Securities Ltd (PBSL), a subsidiary company of Prime Bank Ltd. PBSL holds two membership of Dhaka Stock Exchange Ltd, membership no. 219 and Chittagong Stock Exchange Ltd, membership no. 141.

7. Preliminary and Pre-Operational Expenses

Opening Balance 4,183,316 4,706,231

Less : Amortised during the period 522,915 522,915

Closing Balance 3,660,401 4,183,316

8. Advances, Deposits and Prepayments

Clients’ margin loan, net (8.01) 6,348,091,622 5,897,653,045

Advance office rent 7,924,509 10,630,215

Advance deposit 30,200 29,200

Utility receivable from brokers 713,178 1,095,736

6,356,759,509 5,909,408,197

8.01 Client margin loan, net

Gross client margin loam 6,454,638,483 5,897,653,045

Less: Suspense account 106,546,861 -

6,348,091,622 5,897,653,045



2012 2011Cost Price Market Price Cost Price Market Price

9 Investment in share

Prime Bank 1st ICB AMCL MF 401,559,397 237,408,500 407,602,673 305,585,950

BATBC 335,856,081 395,698,325 335,856,081 295,206,505

Bata Shoe Company (Bd) Ltd. 121,400 107,140 121,400 119,700

Export Import Bank 488 1,560 2,144,940 8,049,960

Fareast Islami Life Ins. 22,225,320 10,370,430 22,225,320 12,655,440

First Janata MF 34,643,394 23,520,000 34,643,394 29,904,000

Green Delta MF 12,900,556 8,821,650 12,900,556 8,693,800

IFIL Islamic MF-1 39,213,709 25,547,100 39,213,709 25,959,150

Keya Cosmetics Limited 164,040 276,079 - -

M.I. Cement Factory 1,128,731 1,245,108 3,608,809 4,823,872

MJL Bangladesh Ltd. 4,621,826 4,236,135 4,621,900 4,617,278

RAK Ceramics Ltd 5,128,050 3,782,937 7,573,723 6,172,354

Powergrid Co. Ltd. 71,808,148 51,894,260 71,808,148 53,455,500

Pragati Insurance Ltd. 44,416,484 22,890,067 44,416,484 26,278,224

Titas Gas Co. Ltd. 111,097,971 82,243,718 120,368,643 87,846,200

PHP First MF 37,094,860 26,230,500 53,361,996 38,280,600

Popular Life 1st MF 11,832,515 9,064,800 15,127,088 11,102,100

Popular Life Insurance Co. Ltd. 23,263,881 11,826,196 23,263,881 13,181,181

DESCO Ltd. 98,043,053 55,345,726 98,043,360 75,761,307

S. Alam Cold Rolled Steels Ltd. 273 1,473 273 1,842

Confidence Cement Ltd. 140,066,058 99,227,952 144,655,133 101,354,330

GBB Power Limited 4,383,584 4,589,065 - -

1,399,569,819 1,074,328,721 1,441,557,511 1,109,049,292

Amount in Taka

2012 2011

10. Dividend Receivable

Dividend of M.I. Cement Factory - 48,603

- 48,603

11. Prepaid Expenses

Opening balance 735,332 -

Add: Insurance Expenses 56,244 52,732

CDS Account maintenance fee 51,800 682,600

Less: CDS Account maintenance fee (682,600) -

Insurance Expenses (52,732) -

108,044 735,332



Amount int Taka2012 2011

12. Advance Corporate Income Taxes

Opening balance 112,340,005 4,989,166 Addition during the period: Income tax withheld from

Dividend of PBL 1st ICB AMCL MF 3,423,550 6,229,860 Dividend of M.I. Cement Factory 9,701 - Dividend of DESCO 105,200 - Dividend of Power Grid Company 254,550 - Dividend of BATBC 4,430,690 4,133,760 Dividend of RAK Ceramics 23,619 19,835 Dividend of S.Alam Cold Rolled Steels Ltd 9 3 Dividend of Confidence Cement Ltd 325,636 385,570 Dividend of Pragati Insurance Ltd 100,044 79,080 Dividend of Bata Shoe Company Ltd. 1,100 - Dividend of Fareast Islami Life Insurance 19,530 - Dividend of First Janata Bank Mutual Fund - 604,800 Dividend of MJL Bangladesh Ltd 13,866 12,057 Dividend of Titas Gas - 779,700 Dividend of GBB Power 18,959 - Dividend of Square Pharmaceuticals Ltd. 45 - Interest on bank deposit 263,074 16,629 AIT on capital gain under Section-82( c) - 6,500 AIT on Company’s car 30,000 - Advance Income Tax for the year 2011 & 2012 160,675,485 100,000,000 Underwriting commission of BRAC Bank Ltd. - 11,250 Underwriting commission of MJL Bangladesh Ltd. - 60,960

169,695,057 112,340,005Less: Adjusted TDS for the year 2011 (12,340,005) (4,989,166)

Payment of Advance tax for the year 2011 (240,675,485) - Closing balance 29,019,573 112,340,005

13. Cash and Bank Balances

Cash in hand 7,346 41,057 Bank balances with Prime Bank Ltd, in

Prime Bank Invst Ltd Client Withdrw (A/C # 54501) 845,065 2,062,068 Prime Bank Invst Ltd Broker Payment (A/C # 54500) 249,376 41,406 Prime Bank Invst Ltd Client Deposit (A/C # 54503) 28,913,004 597,613 Prime Bank Invst Ltd Broker Deposit (A/C # 54502) 49,694,706 205,277 Prime Bank Invst Ltd Own (A/C # 54544) 10,706,364 303,499 PBL Client deposit (A/C # 01946) 2,595 3,653 PBL Broker deposit (A/C # 01947) 2 2

90,418,458 3,254,574

14. Share Capital 3,000,000,000 3,000,000,000

This represents amount received from Prime Bank Ltd as well as sponsor-directors which was subsequently transferred to the Company’s bank account. As at 31 December 2011, a total of 300,000,000 ordinary shares of Tk. 10 each were issued subscribed and fully paid up. Details are as follows: Authorized capital:

1,000,000,000 ordinary shares of Tk. 10 each 10,000,000,000 10,000,000,000

Issued, subscribed and paid up capital:

No. of shares Percentage (%)

Taka

Prime Bank Ltd. 299,999,994 99.99 2,999,999,940 Individuals 6 0.01 60

300,000,000 100 3,000,000,000




15 Deferred tax liabilitiesDeferred tax liabilities recognized in accordance with the provisions of BAS 12: Income taxes, is arrived as follows:

Balance as at 1 January 2,151,261 2,238,414 Addition/(Reversal) during the year (947,784) (87,154)Balance as at 30 June 1,203,477 2,151,261

16 Loan Facilities

Balance of OD facilities from Prime Bank Ltd. 3,465,641,868 3,578,091,569 Balance of OD facilities from Bank Asia Ltd. 467,370,661 -

3,933,012,529 3,578,091,569

PBIL is enjoying OD (General) limit of Tk. 325.00 Crore from Prime Bank Ltd, Motijheel Branch bearing interest @ 14% per annum on quarterly basis vide reference no. Prime/MJ/CR/2012/58162 dated 30 December 2012.

PBIL is enjoying OD (General) limit of Tk. 50.00 Crore from Bank Asia Ltd, Paltan Branch bearing interest @ 15% per annnum on quarterly basis vide reference no. BA/PAL/CR/2012/1317 dated 18 April 2012.

17 Liability for Withholding Taxes

Opening balance 90,159,688 649,404 Add: Additions during the period 2,269,858 91,848,371 Payment during the period (92,383,025) (2,338,087) Closing balance 46,521 90,159,688

18 Security Deposit Receipt (Earnest Money)

Opening balance 44,100 83,800 Add: Additions during the period 280,000 - Payment during the period (280,000) (39,700) Closing balance 44,100 44,100

19 Payable for Expenses

CDBL charges 923,947 412,918 Incentive bonus 6,527,500 5,800,000 Auditor’s fee 115,000 62,700 Office Rent 332,982 332,982 Electric bill 91,151 111,468 Wasa Bill 18,426 19,729 Closing Allowance 28,000 - Security Expenses - 150,219 Internet Bill - 141,194 Refreshment - 34,338 Utility bill, Uttara Branch - 26,852

8,037,006 7,092,400

20 Provision for investment and margin loanProvision for diminution in value of investment (20.01) 325,915,764 400,000,000 Provision for impairment of client margin loan (20.02) 178,586,273 -

504,502,037 400,000,000 20.01 Provision for diminution in value of investments

Investments have been recorded at cost and adequate provision for probable future losses has been made. Market value of securities has been determined on the basis of the value of securities at the last trading date’s closing price of the year i.e. 30 December 2012.

Opening balance 400,000,000 11,047,554 Add: Provision made for the year - 388,952,446 Less: Reversal of provision during the year (74,084,236) - Closing Balance 325,915,764 400,000,000




20.02 As per Press release# SEC/Mukhopatro/2011/696 dated 19 February 2013 of Bangladesh Securities and Exchange Commission, 20% provision has been made for unrealized loss arising out of year-end (31.12.2012) revaluation of shares purchased through margin loan. The press release prohibits payment of cash dividend if the company makes less than 100% provision on such unrealized loss. The company declared 8% interim cash dividend amounting to Tk. 24 crore to the shareholders of the company. The interim dividend was declared on 31 December 2012 and paid on 30 January 2013.

21 Current Income Tax liabilities

Balance as of 1 January 253,038,532 293,589,588 Add: Tax expenses for the year 2012 155,000,467 253,038,532 Less: Adjusted during the year (253,015,490) (293,589,588)Balance as of 31 December 155,023,509 253,038,532

22 Accounts Payable

Payable to Nabeel Mahmood 3,750 3,750 Payable to M/s. Nova Electronics - 27,840 Payable to Business automation - 620,000 Payable to Grameen Phone 10,000 34,713 Payable to K.I. Trading - 3,240 Payable to CDBL - 1,703,866 Payable to Ornate Security Services Ltd 94,806 - Payable to NKN Styling and Service Ltd 40,631 - Payable to Marshal Security Ltd. 20,316 - Payable to Deputy commissioner of Taxes 10,000,000 - Payable to BEXIMCO 5,750 5,750 Payable to Punarbhaba Security Services Ltd 67,718 32,166 Payable to United Express 5,966 - Payable to Alpine Fresh Water Systems Ltd - 33,900 Payable to PBSL Securities Ltd - 27,731,780 Payable to Wifang Securities Ltd - 48,573 Payable to PFI Securities Ltd - 416,073 Payable to CMSL Securities Ltd - 11,448,727

10,248,937 42,110,378

23 Dividend Payable

Opening balance 6 - Add: Dividend payable during the period 240,000,000 360,000,001 Less: Payment during the period - (359,999,996) Closing balance 240,000,006 6

The company declared 8% interim cash dividend amounting to Tk.24 crore to the shareholders of the company. The interim dividend was declared on 31 December 2012 and paid on 30 January 2013.

24 Other LiabilitiesPayable to Brokers 551,231 7,742,599 Payable to Clients 688,021 2,072,798 Un-earned Revenue - 1,994,409

1,239,251 11,809,806




25 Dividend on Investment in Shares

DESCO 526,000 - Power Grid Company 1,272,750 - Prime Bank 1st ICB AMCL Mutual Fund 17,167,750 31,149,300 BATBC 22,153,450 20,668,800 RAK Ceramics Ltd 118,166 99,260 S.Alam Cold Rolled Steels Ltd 45 216 Confidence Cement Ltd 1,628,202 1,927,850 Pragati Insurance Ltd. 500,220 395,400 Bata Shoe Company Ltd. 5,500 - Fareast Islami Life Insurance 97,650 - GBB Power Ltd. 94,814 - Beximco Pharmaceuticals Ltd 3 14 EXIM Bank Ltd 32 - First Janata Bank Mutual Fund - 3,024,000 Square Pharmaceuticals Ltd 225 1,346 MJL Bangladesh Ltd 69,391 60,367 Titas Gas - 3,898,500 M.I. Cement Factory - 48,603

43,634,197 61,273,656

26 Underwriting Commission

GBB Power Ltd. 147,600 - Keya Cosmetics Limited 30,000 - Brac Bank Ltd - 150,000EXIM Bank Ltd - 200,000Barakatullah Electro Dynamics Ltd. - 180,000MJL Bangladesh Ltd - 609,600

177,600 1,139,600 27 Bank Interest on STD Accounts

Prime Bank LtdClients’ deposit 369,592 93,164 Broker’s deposit 1,838,783 46,913 Own Investment 422,360 26,217

2,630,735 166,295

28 Salary and Allowances

Basic pay 13,662,803 12,768,110 Allowances includes House rent, Medical, Conveyance 11,915,861 9,946,350 Bonus 2,268,900 1,860,175 Bank’s contribution to provident fund 1,337,130 1,172,994 Incentive bonus 5,200,000 5,800,000 Chauffeur Expenses 144,000 171,000

34,528,694 31,718,629

29 Rent, Taxes, Insurance and Electricity

Rent, rate and taxes 9,819,593 9,574,902 Insurance 59,762 6,591 Electricity and water 1,394,754 869,679

11,274,109 10,451,172




30 Legal Expenses

Professional charges 255,445 376,349 Legal fees 83,850 38,665

339,295 415,014

31 Postage, Stamp and Telecommunication

Postage, Internet & Newspaper 1,138,214 1,471,909 Telephone-office 382,196 414,310

1,520,411 1,886,219

32 Stationery, Printing and Advertisement

Office and printing stationery 1,472,157 2,008,796 Publicity and advertisement - 374,763

1,472,157 2,383,560

33 Depreciation, Amortisation and Repairs

Depreciation/amortisation 5,265,006 5,184,480 Amortisation of preliminary expenses 522,915 522,915 Repair and maintenance 563,834 895,734

6,351,755 6,603,129

34 Entertainment, Traveling & Conveyance

Entertainment 969,449 1,158,820 Traveling Expenses - 870,461 Conveyance 122,543 118,962 Development (Fair) Expenses 50,000 2,043,161

1,141,992 4,191,404

35 Other Expenses

Security and cleaning 1,944,217 1,907,128 Bank charges 29,599 41,588 Subscription to institutions 50,000 157,510 Training and internship 113,484 - Donation - 300,000 Exgratia 168,000 164,500 Plant Maintenance 87,750 141,075 Miscellaneous 280,169 533,228 Car expenses 389,750 272,285

3,062,969 3,517,313

36 Tax Expenses

Current tax expensesHead of

Income (Tk.)Applicable

tax rate (%)Tax Liability

(Tk.)Tax Liability

(Tk.)

Capital gains on Phoenix Finance 1st MF - - 6,500 Tax paid U/S 53M which is final tax liability U/S 82/cCapital gains on sale of shares 5,191,395 10 519,139 345,042 Dividend on shares 43,634,197 20 8,726,839 12,254,731 Business income 388,678,635 37.5 145,754,488 240,432,259

437,504,227 155,000,467 253,038,532 Deferred tax expense (947,784) (87,154)Short provision of tax in 2010 - 2,987,652 Total 154,052,683 255,939,030




37 Earnings per share

Net profit after tax 174,358,557 58,505,134 Weighted average outstanding number of shares 300,000,000 300,000,000 Earnings per share 0.58 0.20

38 Contingent Liability

In order to comply with the government’s direction (Circular# 53.014.03102.00.002.2012-72 dated 05 March 2012 issued by Capital Market Section of Banking and Financial Institution Division of Ministry of Finance of The Government of the Peoples Republic of Bangladesh on ‘Special scheme for protecting interest of the affected small investors in capital market.’) to waive 50% interest of the affected clients, 761 clients who availed margin loan had been sorted under the criteria of affected investors set by the Special Scheme Committee. The total amount stood at Tk. 15,256,732.85 if 50% interest charged against the margin loan of the affected clients during 1st January 2011 to 31st December 2011 is waived. This amount of Tk.15,256,732.85 has been regarded as a contingent liability instead of making a provision, since the company is disputing such waiver.

39 Others

39.1 Figures in these notes and in the annexed financial statements have been rounded off to the nearest Taka.

39.2 These notes form an integral part of the annexed financial statements and accordingly are to be read in conjunction therewith.




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Auditor’s Reportto the shareholders of Prime Bank Securities Limited

We have audited the accompanying financial statements of Prime Bank Securities Limited (PBSL) which comprise the financial position as at 31 December 2012 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information disclosed in Notes 1-22 to the financial statements.


Management of PBSL is responsible for the preparation and fair representation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, financial statements which have been prepared in accordance with Bangladesh Financial Reporting Standards give a true and fair view of the state of affairs of the company as at 31 December 2012 and of its financial performance and cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion we draw attention to note # 06 to the financial statements where the Company explains the measurement procedure of DSE and CSE memberships cost.

Report on Other Legal and Regulatory RequirementsWe also report that:

(a) we have obtained all the material information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books;

(c) the Company’s financial position and financial performance dealt with by the report are in agreement with the books of account; and

(d) the expenditure incurred was for the purposes of the Company’s business.




Statement of Financial Positionas at 31 December 2012

Note Amount in Taka

2012 2011SOURCES OF FUNDS

Share Capital 3 750,000,000 750,000,000 Retained Earnings 4 33,096,718 4,495,828 Shareholders equity 783,096,718 754,495,828 APPLICATION OF FUNDS

Non-Current Assets (A)Fixed assets 5 7,492,430 9,326,599 Intangible assets 5 1,217,647 815,796 Membership at cost 6 664,000,000 664,000,000

672,710,077 674,142,395 Current Assets (B)Advances, deposits and prepayments 7 313,800 231,300 Advance income tax 8 19,568,538 8,143,350 Investment in securities 9 77,051,850 32,472,977 Accounts receivable 10 7,658,920 27,780,279 Loan to customers 404,029,700 193,021,110 Preliminary expenses 11 614,121 1,228,243 Cash and cash equivalents 12 190,740 4,803,433

509,427,669 267,680,692 Current Liabilities (C) Accounts payable 13 14,933,195 40,849,889 Secured overdraft 14 352,278,429 135,253,198 Provision for diminution value of investment in shares 9 4,221,798 988,820 Provision for impairment of margin loan 15.01 597,088 - Provision for Taxation 15 23,855,427 8,170,117 Deferred tax liabilities 15 648,910 665,885 Provision for expenses 16 2,506,181 1,399,350

399,041,028 187,327,258 Net current assets D=(B-C) 110,386,641 80,353,434

Total assets (A+D) 783,096,718 754,495,828


ChairmanDirectorChief Executive Officer




Statement of Comprehensive incomefor the year ended 31 December 2012

Note Amount in Taka

2012 2011

Operating Income

Revenue from brokerage commission 17 52,419,765 20,187,773 Interest income 18 58,355,301 8,507,103 Capital gain from investment in shares 8,850,564 1,916,822 Dividend income 944,511 108,873 Other operating income 19 859,572 328,617 Total operating income (A) 121,429,712 31,049,188

Operating expenses 20 65,988,517 14,144,974 Direct expenses 21 7,341,905 2,583,564 Total operating expenses (B) 73,330,421 16,728,538

Operating profit before provision C=(A-B) 48,099,291 14,320,650

Less: Provision for diminution in value of investment in shares 9 3,232,978 988,820 Provision for impairment of margin loan 15.01 597,088 - Total provision (D) 3,830,066 988,820

Operating profit before taxation E=(C-D) 44,269,225 13,331,830 Current tax 15 15,685,310 8,170,117 Deferred tax 15 (16,975) 665,885 Total provision for tax (F) 15,668,336 8,836,002 Net profit after tax [G=E-F] 28,600,890 4,495,828

Earnings per share 0.38 0.06






Statement of Changes in equity as at 31 December 2012

Particulars Share capital Retained earnings Total

Balance as at January 01, 2011 750,000,000 - 750,000,000

Profit for the year 2011 - 4,495,828 4,495,828

Balance as at December 31, 2011 750,000,000 4,495,828 754,495,828

Balance as at January 01, 2012 750,000,000 4,495,828 754,495,828

Share capital - - -

Profit for the year 2012 - 28,600,890 28,600,890

Balance as at December 31, 2012 750,000,000 33,096,718 783,096,718




Statement of Cash flowas at 31 December 2012

Amount in Taka 2012 2011

A Cash flow from operating activities

Net profit during the year 28,600,890 4,495,828

Add: Amount considered as non-cash itemsDepreciation & amortization charged 2,503,407 1,114,469 Write off of preliminary expenses 614,122 631,372 Dividend receipts (650,111) (60,367)Provision for diminuation in value of investment 3,232,978 988,820 Provision for negative equity under margin loan 597,088 -

6,297,484 2,674,294 Changes in working capital

(Increase)/decrease in advances, deposits and prepayments (82,500) (231,300)(Increase)/decrease in advance income tax (11,425,188) (8,145,350)(Increase)/decrease in investments in securities (44,578,873) (22,739,059)(Increase)/decrease in accounts receivable 20,121,360 (27,780,279)(Increase)/decrease in loans to customers (211,008,590) (193,021,110)(Increase)/decrease in deferred tax (16,975) - Increase/(decrease) in current tax 15,685,310 8,836,002 Increase/(decrease) in expenses 1,106,830 1,399,350 Increase/(decrease) in accounts payable (25,916,694) 40,849,889 Increase/(decrease) in secured overdraft 217,025,232 135,253,198

(39,090,088) (65,578,659)Net cash used in operating activities (4,191,714) (58,408,537)

B Cash flow from investing activitiesFixed assets acquisition (412,490) (10,387,589)Intangible assets acquition (658,600) (869,275)Net cash flows from investing activities (1,071,090) (11,256,864)

C Cash flows from financing activitiesIssue of share capital - - Dividend receipts 650,111 60,367 Dividend paid - - Net cash from financing activities 650,111 60,367

D Net cash increase / (decrease) (4,612,693) (69,605,034)E Cash and cash equivalents at the beginning of the year 4,803,433 74,408,467 F Cash and cash equivalents at the end of the year 190,740 4,803,433

Cash in hand 4,895 10,817 Cash at Bank 185,845 4,792,616

190,740 4,803,433





1.1 Status of the Company The Prime Bank Securities Limited (“the Company”) was incorporated as a private limited company in Bangladesh

under Companies Act, 1994 vide certificate of incorporation no. C-84302 /10. It commenced its broker business with one extension office from May 18, 2011 under the license issued by Bangladesh Securities and Exchange Commission. Presently the company has 2 (two) offices including Head Office all over Bangladesh.

The registered office of the company is located at people’s Insurance Bhaban (11th floor) 36, Dilkusha Commercial Area, Dhaka-1000.

1.2 Nature of Business The principal objectives of the Company are to act as a member of Dhaka Stock Exchange Ltd. and Chittagong Stock

Exchange Ltd. to carry on the business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company.


1.3.1 Basis of accounting 1.3.2 Statement of compliance These financial statements have been prepared under the historical cost convention on a going concern basis and

in accordance with Bangladesh Financial Reporting Standards (BFRS), the Companies Act-1994, Securities and Exchange Rules-1987 and other laws and rules applicable in Bangladesh.

1.3.3 Components of Financial Statements The financial statements referred to here comprises:

a) Statement of financial position b) Statement of comprehensive income c) Statement of change in equity d) Statement of cash flows and e) Notes to the financial statements

1.3.4 Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that

affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. It also requires disclosures of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates.

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

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

1.3.5 Statement of cash flows Statement of cash flows is prepared in accordance with the Bangladesh Accounting Standard-7 “ Statement Cash

Flows” and the cash flows from operating activities have been presented under indirect method.

1.4 Reporting period These financial statements cover one calendar year from 1 January to 31 December 2012.

1.5 Share capital Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial

assets. 1.6 Property, plant and equipment All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”.

The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.


Notes to the Financial Statementsfor the year ended 31 December 2012 The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing

part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation, such as repairs and maintenance is normally charged off as revenue expenditure in the period in which it is incurred.

Depreciation is charged on the basis of straight line method on all fixed assets at the following rate:

Category of assets Rate(%)

Furniture and fixtures 20

Office equipment 25

Air conditioners 25

Computer and hardwares 25

Vehicle 20

For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is charged up to the date of disposal.

On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sale proceeds.

1.7 Intangible assets and amortization of intangible assets

An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset will flow to the entity and the cost of the assets can be measured reliably.

Software represents the value of computer application software licensed for use of the Company other than those applied for the operating system of computers. Intangible assets are carried at their cost, less accumulated amortization and impairment loss, if any.

Initial cost comprises license fees paid at the time of its acquisition and other directly attributable expenditures that are incurred in customizing the software for its intended use.

Expenditure incurred for software is capitalized only when it enhances and extends the economic benefits of

software beyond its original specification and life and such cost is recognized as capital improvement and added to the original cost of software.

Software is amortized using the straight-line method over the estimated useful life of 5 (five) years commencing from the date of the acquisition available for use over the best estimates of its useful economic life.

1.8 Investment in Membership

Investment in membership are stated at cost. The cost of acquisition of an membership comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of stamp duty and non-refundable taxes, etc.

1.9 Advance, deposits and prepayments - Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,

adjustments or charges to other account heads such as property, plant and equipment, inventory, etc.

- Deposits are measured at payment value. - Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges

to Statement of Comprehensive Income.

1.10 Advance Income tax The amount of advance income tax are mainly deduction at sources by DSE & CSE on daily transaction of broker

& dealer operation. Tax deduction on interest income and dividend income are also included here.


Notes to the Financial Statementsfor the year ended 31 December 2012 1.11 Investments in securities Investment in marketable and non-marketable ordinary shares has been shown at cost. Full provision for diminution

in value of shares as on closing of the year on an aggregate portfolio basis has been made in the account.

1.12 Account receivables

Receivables are recognized when there is a contractual right to receive cash or another financial asset from another entity.

1.13 Loans to customers Loans to customers are stated in the balance sheet on gross basis. Interest is calculated on a daily product basis but

charged and accounted for on accrual basis. Interest on customer loans is realized quarterly.

1.14 Preliminary and pre-operating expenses These are recognized as an asset if it is probable that future economic benefits that are attributable to the asset will

flow to the enterprise and cost of the asset can be measured reliably. These are amortized over 3 years from the year of their first utilization at the rate of Taka 631,372 per year.

1.15 Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Banks and highly liquid

financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Company management for its short-term commitments.

1.16 Provision for taxation Provision for current income tax has been made in compliance with relevant provisions of Income Tax law.

1.17 Deferred taxation Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary

differences. Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary differences. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences arising between the carrying values of assets, liabilities, income and expenditure and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date. The impact on the account of changes in the deferred tax assets and liabilities has also been recognized in the profit and loss account as per BAS-12 “Income Taxes”.

1.18 Secured overdraft Borrowing fund include borrowings from Prime Bank Limited, which is stated in the statement of financial position at

secured overdraft. Interest on secured overdraft is recognized in statement of comprehensive income.

1.19 Incentive bonus Prime Bank Securities Ltd. started a incentive bonus scheme for its employees. 10% of net profit after tax is given

to the employees in every year as incentive bonus. This bonus amount is being distributed among the employees based on their performance. The bonus amount is paid annually, normally first quarter of every following year and the cost are accounted for the period to which it relates.

1.20 Provision for liabilities A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result

of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

1.21 Brokerage commission Brokerage commission is recognized as income when selling or buying order executed. 1.22 Interest income on marginal loan

Interest income on margin loan is recognized on accrual basis. Such income is calculated on daily margin loan

balance of the respective customers. Income is recognized on monthly but realized quarterly.


Notes to the Financial Statementsfor the year ended 31 December 2012 1.23 Capital gain on sale of share Capital gain on investments in shares is recognized when it is realized.

1.24 Fees income Fees income arises on services provided by the Company are recognized on accrual basis.

1.25 Dividend income on shares Dividend income on shares is recognized when the shareholder’s right to receive payment is established.

1.26 Interest paid and other expenses In terms of the provisions of BAS-1 “Presentation of Financial Statements” interest and other expenses are

recognized on accrual basis. 1.27 Earnings per share

Basic earnings per share has been calculated in accordance with BAS 33 “Earnings per Share” which has been shown on the face of the profit and loss account. This has been calculated by dividing the profit attributable to the ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

1.28 Events after the reporting period Where necessary, all the material events after the reporting period date have been considered and appropriate

adjustment/disclosures have been made in the financial statements.

1.29 Directors’ responsibility on financial statements

The board of directors of the company is responsible for the preparation and presentation of these financial statements.

1.30 Related party transaction Related party transaction is a transfer of resources, services or obligation between related parties and here the

related party transactions are the loan taken from Prime Bank Limited and the brokerage transactions done by the Company for Prime Bank Investment Ltd. as its client, within the financial period.

2.00 General

a) These financial statements are presented in Taka, which is the Company’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.

b) The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided

for in the books of the Company. c) Figures of previous year have been rearranged whenever necessary to conform to current years

presentation.




3 Share capitalAuthorized capital150000000 ordinary shares of Tk.10 each 1,500,000,000 1,500,000,000 Issued, subscribed and paid-up capital75,000,000 ordinary shares of Taka 10 each issued and fully paid each 750,000,000 750,000,000

Shareholding position of the company is as under Number of shares TakaPrime Bank Limited 71,250,000 712,500,000 Prime Bank Investment Limited 3,750,000 37,500,000

75,000,000 750,000,000 4 Retained earnings

Opening balance-Broker 2,481,403 - Opening balance-Dealer 2,014,425 -

4,495,828 Add: Net profit during the year 28,600,890 4,495,828

33,096,718 4,495,828 Less: Dividend - - Closing balance 33,096,718 4,495,828

5 Fixed assets less depreciationOffice equipment 1,255,574 1,183,584 Vehicle 338,700 - Air conditioners 1,135,500 1,135,500 Computer & hardware 5,902,620 5,902,620 Furniture & fixtures 2,167,685 2,165,885

10,800,079 10,387,589 DepreciationOpening balance 1,060,990 - Add: Depreciation for 2012 2,246,659 1,060,990 Less: Depreciation for disposal - - Closing balance 3,307,649 1,060,990

7,492,430 9,326,599

Intangible assetsBack office software-Broker 1,111,000 665,000 Back office software-Dealer 150,000 150,000 Web development 200,000 Anti virus software 66,875 54,275

1,527,875 869,275 AmortizationOpening balance 53,479 - Add: Amortization during the year 256,748 53,479 Less: Amortization for disposal - - Closing balance 310,228 53,479

1,217,647 815,796 Details in annexure-A

6 Membership at costThis represents the amount paid for purchasing membership of Dhaka Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) including stamp duty for transferring shares.Purchase of DSE membership 507,500,000 507,500,000 Purchase of CSE membership 156,500,000 156,500,000

664,000,000 664,000,000

We have measured DSE and CSE memberships at cost instead of fair value. As there is no active market for DSE and CSE memberships and the market price of the same fluctuates significantly over time, we shown the value at cost.




7 Advances, deposits and prepaymentsSecurity deposit with CDBL 200,000 200,000 Security deposit with CSE 25,000 25,000 Advances for software maintenance fees 82,500 - Security deposit with T&T 6,300 6,300

313,800 231,300

8 Advance income taxOpening balance 8,143,350 - Add: Tax deduction during the year:Advance income tax deducted by DSE on transaction-Broker 11,026,941 7,791,466 Advance income tax deducted by DSE on transaction-Dealer 197,994 32,894 Advance income tax deducted by CSE on transaction 23,535 132,300 Advance income tax deducted by Bank on deposits 9,217 174,409 Direct tax 26,767 - Advance income tax deducted by Bank on deposits-Dealer 1,009 224 Advance income tax deducted on dividend 139,726 12,057

11,425,188 8,143,350 19,568,538 8,143,350

9 Investment in securitiesCost PriceThe City Bank Ltd. 4,578,419 4,270,419 DESCO 10,721,200 - IFIC Bank Ltd. - 7,468,135 Jamuna Oil 14,105,710 -Lafarge Surma Cement 4,276,300 - Lankabangla Finance 8,763,100 - National Housing Finance and Investment Ltd. 4,602,900 - One Bank Ltd. 10,844,135 4,049,988 Phonix Finance and Investment Ltd. 6,546,850 6,070,050 Rupali Insurance Company Ltd. - 1,766,430 Square Pharmaceutical Ltd - 1,239,090 Unique Hotel 6,640,500 -Uttara Bank Ltd. 5,972,735 - M.I. Cement Factory Ltd. - 3,608,809 MJL Bangladesh Ltd. - 4,000,056 Total Cost price (A) 77,051,850 32,472,977

Market Price (B) 55,942,860 31,484,157 Loss for diminution in value of investment in shares (C=A-B) 21,108,990 988,820 20% provision for unrealized loss arising out of year end (31/12/12) revaluation of shares purchased*(d=C X 20%) 4,221,798 -

Less: Provision already kept in last year 988,820 - Net provision 3,232,978 988,820 Details in annexure-B*As per Press release# SEC/Mukhopatro/2011/696 dated 19 February 2013 of Bangladesh Securities and Exchange Commission, 20% provision has been made for unrealized loss arising out of year-end (31.12.2012) revaluation of shares purchased as dealer.

10 Accounts receivable

Receivable from DSE 7,317,754 - Receivable from DSE-Dealer 46,766 - Receivable from PBIL - - Dividend receivable 294,400 48,506 Receivable from clients - 27,731,774

7,658,920 27,780,279




11 Preliminary expenses

Opening balance 1,228,243 1,859,615 Add: expenses made during the year - - Less: Write-off in 2012 614,122 631,372

614,121 1,228,243

12 Cash and cash equivalent

Cash in hand 4,895 10,817 Cash at Bank:One Bank Limited (SND)-DSE Broker 8,865 4,222,066 One Bank Limited (SND)-DSE Dealer 30,638 83,542 One Bank Limited (CD)-DSE Broker 102,647 335,801 Prime Bank Limited (CD)-Operation 5,340 120,858 Prime Bank Limited (CD)-DSE Broker 14,505 29,640 Prime Bank Limited (CD)-CSE Broker 23,850 708

185,845 4,792,616 190,740 4,803,433

13 Accounts payable

Payable to DSE 57,192 29,028,119 Payable to CDBL 159,892 23,356 Payable to clients 9,519,781 10,907,860 Security deposits 283,220 890,554 Payable to PBIL 4,913,110 -

14,933,195 40,849,889

14 Secured Overdraft from Prime Bank Ltd, Motijeel Branch 352,278,429 135,253,198

The above loan, overdraft (general), was taken from Prime Bank Ltd, Motijheel Branch bearing interest @ 14.50% per annnum on quarterly basis vide reference no. Prime/MJ/CR/2011/33809 dated 04 September 2011.

15 Provision for tax

Current taxOpening balance 8,170,117 - Add: Provision for the during year 15,685,310 8,170,117 Less: Provision adjusted during the year - - Closing balance 23,855,427 8,170,117

Deferred taxOpening balance 665,885 - Add: Provision for the during year (16,975) 665,885 Less: Provision adjusted during the year - - Closing balance 648,910 665,885

24,504,337 8,836,002

15.01 Provision for impairment of margin loan

Impaired margin loan as at 31st December 2012 2,985,439 - 20% provision for unrealized loss arising out of year end (31/12/12) revaluation of shares purchased*. 597,088 -

*As per Press release# SEC/Mukhopatro/2011/696 dated 19 February 2013 of Bangladesh Securities and Exchange Commission, 20% provision has been made for unrealized loss arising out of year-end (31.12.2012) revaluation of shares purchased through margin loan.




16 Provision for expenses

Internet bill 265,000 33,000 Security and cleaning 63,250 52,000 Water bill 7,500 2,000 Telephone bill 25,000 28,000 Office rent 83,246 126,000 Electricity bill 55,000 60,000 Wasa bill 8,000 14,000 Salary-PF - 77,550 Salary arrear 395,100 500,000 Incentive bonus 1,459,085 449,000 Audit fee 69,000 41,800 Professional fees 69,000 - Fuel 7,000 16,000 Provision for negative equity

2,506,181 1,399,350

17 Revenue from brokerage commission

Commission from PBILDhaka Stock Exchange 18,463,381 14,813,162 Chittagong Stock Exchange 38,423 341,392

18,501,804 15,154,555 Commission from PBSLDhaka Stock Exchange 33,845,483 4,992,670 Chittagong Stock Exchange 72,478 40,548

33,917,961 5,033,218 52,419,765 20,187,773

18 Interest income

Interest income from margin loan 58,253,044 6,760,777 Interest on deposits 102,256 1,746,326

58,355,301 8,507,103

19 Other operating income

BO opening charge 215,000 131,000 CDBL income 337,072 160,617 Pledge charge 13,500 - Annual maintenance fee 235,000 37,000 Others 59,000 -

859,572 328,617




20 Operating expenses

Salary & allowances(a) 11,179,283 3,688,811 Festival bonus 977,500 599,400 Incentive bonus 1,430,000 449,000 Entertainment 475,414 167,466 Financial expenses (b) 42,469,849 3,609,724 Office rent 2,620,610 1,489,742 Utility bill ( C) 2,029,266 1,146,127 Repair & maintenance 6,990 6,840 Conveyance and traveling 44,510 13,250 Remuneration 18,975 26,700 Printing and stationery 202,144 347,017 Advertisement - 115,161 Director’s fee - Audit fee 69,000 76,300 Legal fee - 17,300 Fees and renewal (d) 186,185 157,600 Professional fee 110,800 20,900 Depreciation (e) 2,503,407 1,114,469 Subscription & donation 9,700 4,700 Facilities expenses - 6,700 Training expenses - 3,000 Office maintenance 44,499 56,384 Security & cleaning 687,501 353,770 Newspaper & magazine 14,644 4,940 Internship allowances 14,400 21,600 Computer accessories 153,519 14,700 Vehicle expenses 126,198 - Website expenses - 2,000 Write off of preliminary expenses 614,122 631,372

65,988,517 14,144,974 a Salaries & Allowances

Basic salary 6,232,120 1,953,018 House rent 2,569,312 782,318 Conveyance allowance 424,548 125,500 Medical allowance 961,058 289,200 Leave fare assistance 454,633 - Provident fund 531,112 38,775 Others - 500,000 Technical allowance 6,500 -

11,179,283 3,688,811 b Financial Expenses -

Bank charge & commission 45,183 47,457 Commission on Bank guarantee 806,550 518,070 Interest on loan 41,618,117 3,044,198

42,469,849 3,609,724 c Utilities

Electricity bill 668,389 366,125 Telephone bill 263,313 170,032 Wasa bill 93,446 105,055 Water bill (Drinking) 37,761 15,323 Fuel-generator 67,017 26,261 Internet bill 899,340 463,332

2,029,266 1,146,127




d Fees & renewalSEC 24,000 54,000 DSE 36,500 - RJSC 8,985 10,700 CDBL 2,500 TWS installation fees 30,000 70,000 Entrance fees 4,200 20,400 Software maintenance fees 82,500 -

186,185 157,600

e Depreciation & amortization

Furniture & fixture 408,530 194,867 Computer & hardware 1,223,078 589,213 Office equipment 307,638 140,806 Air conditioner 283,875 136,104 Vehicles 23,538 -

2,246,659 1,060,990 Software 256,748 53,479

2,503,407 1,114,469 21 Direct expenses

Howla 687,270 283,956 Laga 4,498,211 1,921,646 CDBL charge 2,146,337 373,973 Investor protection fund 10,086 3,989

7,341,905 2,583,564

22 Bank GuaranteeAs per trading rules of Dhaka Stock Exchange, Bank Guarantee is required for transactions (Buy) in a day exceeding Tk.5 crore. Prime Bank Securities Limited has received Bank Guarantee for Tk.15 crore from Prime Bank Limited, Motijheel Branch, Dhaka. Documents related to the Bank Guarantee have been submitted to Dhaka Stock Exchange.


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Reprot of the DirectorsPrime Exchange Co. Pte. Ltd.

The directors present their report to the member together with the audited financial statements of the Company for the financial year ended 31 December 2012.

The directors of the Company in office at the date of this report are as follows:

Tanjil Chowdhury Md. Ehsan Khasru Sharmila Gunasingham Ainun Nishat (appointed on 23.1.2013) ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement to which the Company is a party, being arrangements whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES

According to the register kept by the Company for the purposes of section 164 of the Singapore Companies Act, the interests of the directors who held office at the end of the financial year in the shares of the Company and the related corporation were as follows:

Direct interest

At beginning At end of

of financial financial

Name of directors year year

The Company

(Ordinary shares)

Tanjil Chowdhury - -

Md. Ehsan Khasru - -

Sharmila Gunasingham - -

Except as disclosed in this report, no directors who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company, or of the related corporation, either at the beginning of the financial year or at the end of the financial year.


Reprot of the DirectorsPrime Exchange Co. Pte. Ltd.

DIRECTORS’ CONTRACTUAL BENEFITS

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

SHARE OPTIONS

During the financial year, there were:

• no options granted by the Company to any person to take up unissued shares of the Company; and

• no shares issued by virtue of any exercise of option to take up unissued shares of the Company.

At the end of the financial year, there were no unissued shares of the Company under option.

AUDITORS

The auditors, C. C. Yang & Co., have expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

30 January 2013

Md. Ehsan Khasru Tanjil Chowdhury

18 February 2013


Statement by DirectorsPrime Exchange Co. Pte. Ltd.

In the opinion of the directors,

(a) the accompanying financial statements set out in the following sections of the financial statements:

• Statement of Comprehensive Income

• Statement of Financial Position

• Statement of Changes in Equity

• Statement of Cash Flows

• Notes, comprising a summary of significant accounting policies and other explanatory information

are drawn up so as to give a true and fair view of the state of affairs of the Company as at 31 December 2012 and the results, changes in equity and cash flows of the Company for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors

30 January 2013

Md. Ehsan Khasru Tanjil Chowdhury

18 February 2013


Independent Auditor’s Report to the Member of Prime Exchange Co. Pte. Ltd. Report on the Financial Statements

We have audited the accompanying financial statements of Prime Exchange Co. Pte. Ltd. (the “Company”), which comprise the statement of financial position as at 31 December 2012, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory information.


Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and balance sheet and to maintain accountability of assets.


Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.


Opinion

In our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company as at 31 December 2012 and of the results, changes in equity and cash flows of the Company for the financial year ended on that date.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

C.C. YANG & CO.PUBLIC ACCOUNTANTS ANDCERTIFIED PUBLIC ACCOUNTANTS

SINGAPORE18 February 2013


Statement of Comprehensive Income for the year ended 31 December 2012

(Expressed in Singapore Dollars)

Note2 0 1 2 2 0 1 1

$ $

Commission Income 560,416 314,463

Other Income 3 5,120 5,850

Employee Benefits Expense 4 (305,034) (259,718)

Depreciation 7 (230,249) (229,427)

Foreign Currency Gains 259,663 336,435

Other Expenses 5 (348,080) (263,176)

Profit Before Income Tax 141,836 104,427

Income Tax Benefit (Expense) 6 (13,401) 4,249

Net Profit for the Year 128,435 108,676

Other Comprehensive Income

Other Comprehensive Income, Net of Tax - -

Total Comprehensive Income $ 128,435 $ 108,676

The accompanying notes form an integral part of these financial statements


Statement of Financial Position as at 31 December 2012


Note2 0 1 2 2 0 1 1

$ $

ASSETS

Non-Current AssetsProperty, Plant and Equipment 7 78,104 41,618

Total Non-Current Assets 78,104 41,618

Current AssetsOther Receivables 8 90,749 39,252Cash and Bank Balances 9, 10 571,851 540,878Fixed Deposits 10 151,467 151,353

Total Current Assets 814,067 731,483

Total Assets $ 892,171 $ 773,101

EQUITY AND LIABILITIES

EquityShare Capital 11 250,000 250,000Retained Earnings 469,778 341,343

Total Equity 719,778 591,343

Non-Current LiabilitiesDeferred Tax Liabilities 12 6,615 2,869

Total Non-Current Liabilities 6,615 2,869

Current LiabilitiesTrade and Other Payables 13 156,312 178,556Tax Payable 9,466 333

Total Current Liabilities 165,778 178,889

Total Equity and Liabilities $ 892,171 $ 773,101



Statement of Changes In Equity for the year ended 31 December 2012


NoteShare RetainedCapital Earnings Total

$ $ $

Balance at 1.1.2011 250,000 330,737 580,737

Total Comprehensive Income for the Year - 2011 - 108,676 108,676

Distributions to Owner

Dividends 16 - ( 98,070) ( 98,070)

Total Distributions to Owner - ( 98,070) ( 98,070)

Balance at 31.12.2011 250,000 341,343 591,343

Total Comprehensive Income for the Year - 2012 - 128,435 128,435

Balance at 31.12.2012 $ 250,000 $ 469,778 $ 719,778



Statement of Cash Flowsfor the year ended 31 December 2012


Note 2 0 1 2 2 0 1 1$ $

Cash Flows From Operating ActivitiesProfit Before Income Tax 141,836 104,427

Adjustments For:

Depreciation 30,249 29,427Interest Income (120) (850)

Operating Profit Before Working Capital Changes 171,965 133,004

Decrease (Increase) inOther Receivables (37,815) 15,331Increase in Trade and Other Payables (22,244) 83,492

Cash Flows Generated From Operations 111,906 231,827Income Tax Paid (522) (4,056)Interest Received 114 865

Net Cash Flows From Operating Activities 111,498 228,636

Cash Flows From Investing ActivitiesPurchase of Property, Plant and Equipment (66,735) (56,506)

Net Cash Flows Used In Investing Activities (66,735) (56,506)

Cash Flows From Financing ActivitiesDividends Paid On Ordinary Shares - (98,070)Increase in Amount Due From Holding Company (13,676) -

Net Cash Flows Used In Financing Activities (13,676) (98,070)

Net Increase in Cash and Cash Equivalents 31,087 74,060

Cash and Cash Equivalents at Beginning of Year 692,231 618,171

Cash and Cash Equivalents at End of Year 10 $ 723,318 $ 692,231




These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. CORPORATE INFORMATION

Prime Exchange Co. Pte. Ltd. is a limited liability company incorporated and domiciled in the Republic of Singapore

whose registered office and principal place of business is located at 2A Desker Road Singapore 209549 and

another branch at Block 134 #01-305 Jurong Gateway Road Singapore 600134.

The Company is a wholly-owned subsidiary of PRIME BANK LIMITED, incorporated in Bangladesh, which is also

the Company’s ultimate holding company.

The principal activities of the Company are to carry on the remittance business and to undertake and participate in

transactions, activities and operations commonly carried on or undertaken by remittance and exchange house.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Singapore Financial

Reporting Standards (FRS) and the applicable requirements of the Singapore Companies Act.

The financial statements have been prepared on the historical cost basis except as disclosed in the

accounting policies below.

Functional currency

The management has determined the currency of the primary economic environment in which the Company

operates i.e. functional currency, to be the Singapore dollars. Revenue and major costs of providing

services including major operating expenses are primarily influenced by fluctuations in Singapore dollars.

The financial statements are presented in Singapore dollars.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the

current financial year, the Company has adopted all the new and revised standards and Interpretations of

FRS (INT FRS) that are relevant to its operations and effective for annual periods beginning on or after 1

January 2012. The adoption of these standards and interpretations did not have any effect on the financial

performance or position of the Company.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)2.3 Standards issued but not yet effective

The Company has not adopted the following standards and interpretations that have been issued but are only effective for annual financial periods beginning on or after the respective dates.

Effective 1 July 2012

Amendments to FRS 1 - Presentation of Items of Other Comprehensive Income

Effective 1 January 2013

Revised FRS 19 - Employee Benefits

FRS 113 - Fair Value Measurements

Amendments to FRS 107 - Disclosures – Offsetting Financial Assets and

Financial Liabilities

Improvements to FRSs 2012:

Amendments to FRS 1 - Presentation of Financial Statements

Amendments to FRS 16 - Property, Plant and Equipment

Amendments to FRS 32 - Financial Instruments : Presentation

Effective 1 January 2014

Revised FRS 27 - Separate Financial Statements

Revised FRS 28 - Investments in Associates and Joint Ventures

FRS 110 - Consolidated Financial Statements

FRS 111 - Joint Arrangements

FRS 112 - Disclosure of Interests in Other Entities

Amendments to FRS 32 - Offsetting Financial Assets and Financial

Liabilities

Except for the Amendments to FRS 1 and FRS 112, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the Amendments to FRS 1 and FRS 112 is described below.

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 1 change the grouping of items presented in Other Comprehensive Income (OCI). Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the Amendments only affect the presentations of items that are already recognised in OCI, the Company does not expect any impact on its financial position or performance upon adoption of this standard.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

2.3 Standards issued but not yet effective (Cont’d)

FRS 112 Disclosure of Interests in Other Entities

FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks associated with its interests in other entities and the effects of those interests on its financial statements. The Company is currently determining the impact of the disclosure requirements. As this is a disclosure standard, it will have no impact to the financial position and financial performance of the Company when implemented in 2014.

2.4 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost includes the cost of replacing part of the property, plant and equipment. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Other subsequent expenditure is recognised as repair and maintenance expense in the profit or loss during the financial year in which it is incurred.

Depreciation is computed on the straight line method to write off the cost of property, plant and equipment over the estimated useful lives. The estimated useful lives of property, plant and equipment are as follows:-

Furniture & fittings 3 years

Office equipment 3 years

Renovation 3 years

Fully depreciated assets are retained in the accounts until they are no longer in use and no further charge for depreciation is made in respect of these assets.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at the end of each reporting year to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit or loss in the financial year the asset is derecognised.




2.5 Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Company makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

Impairment losses are recognised in the profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.6 Financial assets

Financial assets are recognised on the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial assets at initial recognition.

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable transaction costs and subsequently carried at amortised cost using the effective interest method less impairment. Gains and losses are recognised in the profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised directly in other comprehensive income is recognised in the profit or loss.


Notes to the Financial Statements for the year ended 31 December 20122. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

The Company classifies the following financial assets as loans and receivables:• Cash and short term deposits• Other receivables, including amount due from holding company

2.7 Impairment of financial assets

The Company assesses at the end of each reporting year whether there is any objective evidence that a financial asset or group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in the profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the financial asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in the profit or loss.

2.8 Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances and fixed deposits that are readily convertible to known amounts of cash and which is subject to an insignificant risk of changes in value.

2.9 Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting year and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.10 Financial liabilities

Financial liabilities are recognised on the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent to initial recognition, derivatives are measured at fair value. Other financial liabilities (except for financial guarantee) are measured at amortised cost using the effective interest method.

For financial liabilities other than derivatives, gains and losses are recognised in the profit or loss when the liabilities are derecognised, and through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are recognised in the profit or loss. Net gains or losses on derivatives include exchange differences.




A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit or loss.

2.11 Employee benefits

Defined contribution plan

As required by law, the Company makes contributions to the Central Provident Fund (CPF) scheme in Singapore, a defined contribution pension scheme. CPF contributions are recognised as compensation expenses in the same period as the employment that gives rise to these contributions.

2.12 Leases

Operating leases

Leases where substantially all the risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Operating lease payments are recognised as an expense in the profit or loss on a straight-line basis over the lease term.

The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.13 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured regardless of when the payment is made. Revenue is measured at the fair value consideration received or receivable, taking into account contractually defined terms of payments and excluding taxes or duty. The following specific recognition criteria must also be met before revenue is recognised:

Revenue from rendering of services is recognised upon completion and delivery of services to the customers.

Interest income is recognised using the effective interest method.

2.14 Income taxes

(i) Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the Income Tax Authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting year.

Current taxes are recognised in the profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting year between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.




Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax asset is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at the end of each reporting year and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

2.14 Income taxes (Cont’d)

(ii) Deferred tax (Cont’d)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of each reporting year.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

• Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

2.15 Foreign currency transactions

Transactions in foreign currencies are measured and recorded in Singapore dollars on initial recognition at exchange rates approximating those ruling at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting year. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting year are recognised in the profit or loss.




2.16 Share capital

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital, net of any tax effects.

2.17 Dividend

Interim dividend is recorded in the financial year in which it is declared payable. Final dividend is recorded in the financial year in which the dividend is approved by the shareholders.

2.18 Significant accounting judgements and estimates

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting year. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Useful lives of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the property, plant and equipment estimated useful lives. Management estimates the useful lives of these property, plant and equipment to be 3 years. Changes in the expected level of usage and technological developments could impact the economic useful lives of these assets, therefore, future depreciation charges could be revised. The carrying amounts of the Company’s property, plant and equipment at the end of the reporting year are disclosed in Note 7 to the financial statements.

Income taxes

Significant judgement is involved in determining the Company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts of the Company’s income tax payable and deferred tax liabilities at 31 December 2012 were $9,466 (2011 - $333) and $6,615 (2011 - $2,869) respectively.



3. OTHER INCOME2 0 1 2 2 0 1 1

$ $

Interest income 120 850SME cash grant 5,000 5,000

$ 5,120 $ 5,850

4. EMPLOYEE BENEFITS EXPENSE2 0 1 2 2 0 1 1

$ $Salaries, bonuses andother related costs 287,226 242,706Employer’s contributionsto Central Provident Fund 17,808 17,012

$ 305,034 $ 259,718

The above includes remuneration of key management personnel as shown in Note 15(b) to the financial statements.

5. OTHER EXPENSES

The following items have been included in arriving at other expenses:

2 0 1 2 2 0 1 1$ $

Advertisement 12,980 3,647Bank charges 41,871 1,204Entertainment 12,441 19,085Insurance 28,608 12,886Office rental 117,050 102,000Professional and legal fees 25,496 8,076Software rental - 19,558Telephone charges 21,128 18,064Transportation 13,976 12,283Travelling 11,326 7,660Utilities 15,409 12,696

6. INCOME TAX EXPENSE2 0 1 2 2 0 1 1

$ $Based on results for the year

Current tax 9,466 333Deferred tax (Note 12) 4,128 398

13,594 731Underprovision (Overprovision)in respect of prior years

Current tax 189 ( 5,244)Deferred tax (Note 12) (382) 264

$ 13,401 $ (4,249)



6. INCOME TAX EXPENSE (Cont’d)

The reconciliation between the tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2012 and 2011 is as follows:-

2 0 1 2 2 0 1 1

Profit before income tax $ 141,836 $ 104,427

Tax expense calculated at tax rate of 17% (2011 - 17%) 24,112 17,753

Expenses not deductiblefor tax purposes 2,973 4

Income not subject to tax (850) ( 850)

Productivity and innovation credit (2,326) (15,177)

Singapore statutory steppedincome exemption (10,315) (999)

Underprovision (Overprovision)in respect of prior years

Current tax 189 (5,244)Deferred tax (382) 264

$ 13,401 $ (4,249)

7. PROPERTY, PLANT AND EQUIPMENT

Furniture Office& fittings equipment Renovation Total

2012 $ $ $ $

Cost:At 1.1.2012 7,142 66,242 104,858 178,242Additions - 22,991 43,744 66,735

At 31.12.2012 7,142 89,233 148,602 244,977

Accumulateddepreciation:

At 1.1.2012 6,207 52,231 78,186 136,624Depreciationfor the year 698 12,125 17,426 30,249

At 31.12.2012 6,905 64,356 95,612 166,873

Net book value:

At 31.12.2012 $ 237 $ 24,877 $ 52,990 $ 78,104



7. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Furniture Office& fittings equipment Renovation Total

2011 $ $ $ $

Cost:At 1.1.2011 6,432 50,454 64,850 121,736Additions 710 15,788 40,008 56,506

At 31.12.2011 7,142 66,242 104,858 178,242

Accumulateddepreciation:

At 1.1.2011 5,490 42,261 59,446 107,197Depreciationfor the year 717 9,970 18,740 29,427

At 31.12.2011 6,207 52,231 78,186 136,624

Net book value:

At 31.12.2011 $ 935 $ 14,011 $ 26,672 $ 41,618

8. OTHER RECEIVABLES2 0 1 2 2 0 1 1

$ $

Non-trade receivable- Holding company (Note 1) 13,676 -Interest receivable 8 2Deposits 69,750 34,000Prepayments 7,315 5,250

$ 90,749 $ 39,252

The non-trade receivable from holding company is unsecured, interest-free and repayable on demand. The amount is to be settled in cash.

9. CASH AND BANK BALANCES

The cash and bank balances include an amount of $148,850 (2011 - $171,703) (Note 13) received from customers for outward remittance at year end date. The amount was subsequently remitted on 2 January 2013 (2011 - 3 January 2012).

10. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statement of cash flows comprise the following amounts:2 0 1 2 2 0 1 1

$ $

Cash and bank balances (Note 9) 571,851 540,878Fixed deposits 151,467 151,353

$ 723,318 $ 692,231



10. CASH AND CASH EQUIVALENTS (Cont’d)

Cash and bank balances and fixed deposits are denominated in the following currencies:2 0 1 2 2 0 1 1

$ $

Singapore Dollars 550,060 648,973Taka 173,258 43,258

$ 723,318 $ 692,231

The fixed deposits placed with a bank mature within 12 months (2011 – 12 months) from the end of the reporting year and bear interest at 0.25% - 0.75% (2011 - 0.25% - 0.75%) per annum.

11. SHARE CAPITAL2 0 1 2 2 0 1 1

Issued and fully paid

250,000 (2011 – 250,000) ordinary shares $ 250,000 $ 250,000

The holder of ordinary shares is entitled to receive dividends as and when declared by the Company. All ordinary shares of no par value carry one vote per share without restriction.

12. DEFERRED TAX LIABILITIES2 0 1 2 2 0 1 1

Deferred tax liabilities $ 6,615 $ 2,869

The movements in deferred tax liabilities during the year are as follows:

AcceleratedTax

Depreciation Total$ $

Balance at 1.1.2011 $ 2,207 $ 2,207

Charged to profit or loss – 2011- Current year (Note 6) 398 398- Underprovision in respect of prior years (Note 6) 264 264

Balance at 31.12.2011 2,869 2,869

Charged (Credited) to profit or loss – 2012- Current year (Note 6) 4,128 4,128- Overprovision in respect of prior years (Note 6) (382) (382)

Balance at 31.12.2012 $ 6,615 $ 6,615



13. TRADE AND OTHER PAYABLES

2 0 1 2 2 0 1 1$ $

Accruals 7,462 6,853Funds received from customers (Note 9) 148,850 171,703

$ 156,312 $ 178,556

14. OPERATING LEASE COMMITMENTS

At the end of the reporting year, the Company was committed to making the following payments in respect of rental commitments under non-cancellable operating leases:

2 0 1 2 2 0 1 1$ $

Leases which expire:Within one year 162,000 98,000Later than one year but within five years 607,500 54,000

$ 769,500 $ 152,000

15. RELATED PARTY TRANSACTIONS

An entity or individual is considered a related party for the purpose of these financial statements if it has the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Company or vice versa, or where it is subject to common control or common significant influence.

The Company has the following significant related party transactions entered with its related parties and the effect of these transactions at terms agreed between the parties are reflected in these financial statements:-

(a) Transactions with related party

2 0 1 2 2 0 1 1$ $

Professional fee 9,940 5,726Secretarial fee - 1,070Other expenses 1,064 912

(b) Compensation of key management personnel

2 0 1 2 2 0 1 1

Key Executive OfficerSalary, bonus andother related costs $ 196,000 $ 72,000

16. DIVIDENDS

2 0 1 2 2 0 1 1

Exempt one-tier finaldividend of $0.39228 per ordinaryshare in respect of year ended31 December 2010 $ - $ 98,070



17. FINANCIAL INSTRUMENTS

The Company’s financial instruments comprise financial assets and liabilities. Financial assets and liabilities mainly relate to receivables and payables which arise directly from its operations.

Financial risk management objectives and policies

The main purpose for holding or issuing financial instruments is to raise and manage the finances for the Company’s operating, investing and financing activities. There is exposure to the financial risks on the financial instruments such as credit risk, liquidity risk, market risk comprising interest rate risk, foreign currency risk and other price risk exposures. The management has certain practices for the management of financial risks. However, these are not documented in formal written documents. The following guidelines are followed: All financial risk management activities are carried out and monitored by senior management staff. All financial risk management activities are carried out following good market practices.

The Company does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations in interest and foreign exchange rates.

The following sections provide details regarding the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Company’s exposure to credit risk arises primarily from other receivables. For other financial assets (including cash and cash equivalents), the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Company has significant concentration of credit risk with regards to amount due from holding company (Note 8). The Company has policies in place to ensure that transactions are entered into only with counterparties that are of acceptable credit quality.

The maximum exposure to credit risk is represented by the net carrying amount of financial assets recorded in the financial statements.

Other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company. Cash and short-term deposits that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.

The Company ensures that there are adequate funds available to meet all its operational requirements.

As at the end of the reporting year, the expected contractual undiscounted cash outflows of financial liabilities are due in less than a year.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company has no exposure to interest rate risks as interest arising primarily from fixed deposits is fixed and does not fluctuate with changes in market interest rate.



17. FINANCIAL INSTRUMENTS (Cont’d)

Financial risk management objectives and policies (cont’d)

Foreign currency risk

The Company’s remittance activities are transacted in Taka and United States dollars. Exchange rate movements in Taka, the United States dollars and the Singapore dollars, the Company’s functional currency, exposed the Company to foreign currency risk.

The Company does not use derivative financial instruments to hedge against the volatility associated with foreign currency transactions.

Sensitivity analysis: The effect is insignificant.

Equity price risk

The Company has no exposure to equity price risk.

Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The total capital of the Company as at the end of the reporting year is the “Total equity” as presented on the statement of financial position.

17. FINANCIAL INSTRUMENTS (Cont’d)

Financial risk management objectives and policies (Cont’d)

Capital risk management (Cont’d)

The Company is not subject to any externally imposed capital requirements.

18. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.

Financial instruments whose carrying amounts approximate fair values

Management has determined that the carrying amounts of cash and bank balances, fixed deposits, current other receivables and current trade and other payables, based on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature.

19. AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements for the year ended 31 December 2012 were authorised for issue in accordance with a resolution of the directors on 18 February 2013.



Report of the DirectorsPBL Exchange (UK) Limited

The directors present their report and financial statements for the year ended 31 December 2012.

Principal activities

The principal activity of the company continued to be that of providing remittance service.

Directors

The following directors have held office since 1 January 2012:

Mr. Md. Shirajul Islam Mollah

Mr. Nafis Sikder (Resigned 27 December 2012)

Mr. Isbahul Bar Chowdhury (Resigned 27 December 2012)

Prof. Ainun Nishat (Appointed 27 December 2012)

Mr. Md. Ehsan Khasru

Auditors

Reddy Siddiqui & Kabani were appointed auditors to the Company and have expressed their willingness to accept re-appointment.

Statement of directors’ responsibilities

The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;- make judgements and accounting estimates that are reasonable and prudent;- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company

will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditors

So far as the directors are aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditors are aware of that information.


Report of the DirectorsPBL Exchange (UK) Limited

Status of the Company

PBL Exchange (UK) Limited was incorporated as private limited company with Companies House of England and Wales under registration no. 07081093 on 19 November 2009. The company is a wholly owned subsidiary of Prime Bank Limited, incorporated in Bangladesh which is also the company’s ultimate holding company. Earlier on 25 August 2009, Prime Bank Limited got permission from Bangladesh Bank for opening a fully owned subsidiary in UK.PBL Exchange obtained Certificate of Registration for Money Laundering Regulations on 13 April 2010 issued by HM Customs and Excise.

The company got registration from Financial Services Authority (FSA) on 14 May 2010 as Small Payment Institution to carry out Money Service Business under Payment Services Regulations 2009. The Company commenced its operation on 02 August 2010 with three Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF.

This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

On behalf of the board

February 18, 2013

Md. Shirajul Islam MollahDirector


Independent Auditors’ Reportto the Members of PBL Exchange (Uk) Limited

We have audited the financial statements of PBL EXCHANGE (UK) LIMITED for the year ended 31 December 2012 set out on pages 5 to 12. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors’ Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.

Opinion on financial statements In our opinion the financial statements:

- give a true and fair view of the state of the company’s affairs as at 31 December 2012 and of its loss for the year then ended;- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and- have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:- adequate accounting records have not been kept, or returns adequate for our audit have not been received

from branches not visited by us; or- the financial statements are not in agreement with the accounting records and returns; or- certain disclosures of directors’ remuneration specified by law are not made; or- we have not received all the information and explanations we require for our audit; or- the directors were not entitled to prepare the financial statements and the directors’ report in accordance with the small

companies regime.

Seema Siddiqui (Senior Statutory Auditor)for and on behalf of Reddy Siddiqui & Kabani February 18, 2013

Chartered AccountantsStatutory Auditor Park View 183-189 The Vale Acton London W3 7RW



2 0 1 2 2 0 1 1Note £ £

Turnover 265,590 162,501

Administrative expenses (381,378) (312,591)

Loss on ordinary activities before taxation 2 (115,788) (150,090)

Tax on loss on ordinary activities 3 - -

Loss for the year 8 (115,788) (150,090)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses other than those passing through the profit and loss account.


Balance Sheetas at 31 December 2012

2012 2011

Notes £ £ £ £

Fixed assetsTangible assets 4 146,209 134,948

Current assetsDebtors 5 15,000 51,568Cash at bank and in hand 188,503 85,129

203,503 136,697

Creditors: amounts falling due within one year 6 (202,463) (58,608)

Net current assets 1,040 78,089 Total assets less current liabilities 147,249 213,037

Capital and reservesCalled up share capital 7 500,000 450,000Profit and loss account 8 (352,751) (236,963)Shareholders’ funds 9 147,249 213,037

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

Approved by the Board and authorised for issue on 18 February 2013

Md. Shirajul Islam MollahDirector

Md. Ehsan KhasruDirector



2012 2011

£ £ £ £

Net cash inflow/(outflow) from operating activities 80,382 (104,325)

Capital expenditurePayments to acquire tangible assets (27,008) (7,133)

Net cash outflow for capital expenditure (27,008) (7,133)

Net cash inflow/(outflow) before management of liquid resources and financing 53,374 (111,458)

FinancingIssue of ordinary share capital 50,000 150,000 Net cash inflow from financing 50,000 150,000

Increase in cash in the year 103,374 38,542


Notes To The Cash Flow Statementfor the year ended 31 December 2012

1 Reconciliation of operating loss to net cash inflow/(outflow) from operating activities

2012 2011

£ £

Operating loss (115,788) (150,090)Depreciation of tangible assets 15,747 17,888Decrease/(increase) in debtors 36,568 (12,130)Increase in creditors within one year 143,855 40,007 Net cash inflow/(outflow) from operating activities 80,382 (104,325)

2 Analysis of net funds 1 January 2012

Cash flow Other non-cash changes

31 December 2012

£ £ £ £

Net cash:Cash at bank and in hand 85,129 103,374 - 188,503Bank deposits - - - -Net funds 85,129 103,374 - 188,503

3 Reconciliation of net cash flow to movement in net fund 2012 2011£ £

Increase in cash in the year 103,374 38,542

Movement in net funds in the year 103,374 38,542Opening net funds 85,129 46,587Closing net funds 188,503 85,129



1 Accounting policies

1.1 Accounting convention The financial statements are prepared under the historical cost convention.

1.2 Compliance with accounting standards

The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).

1.3 Turnover

Turnover represents amounts received as commission from customers.

1.4 Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Land and buildings Leasehold Over the life of the Lease Computer equipment 25% srtaight line Fixtures, fittings & equipment 25% straight line

1.5 Foreign Currency Transactions Transactions in foreign currency are measured and recorded in Sterling by use of the exchange rate in effect at

the date of transaction. At each statement of financial position date, recorded monetary balances that are denominated in a foreign currency are adjusted to reflect the rate at the statement of financial position date. All realized and unrealized exchange adjustment gains and losses are taken to the statement of movements on profit and loss account.

2 Operating loss 2012 2011£ £

Operating loss is stated after charging:Depreciation of tangible assets 15,747 17,888

3 Taxation 2012 2011£ £

Total current tax - -

Factors affecting the tax charge for the year Loss on ordinary activities before taxation (115,788) (150,090)

Loss on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 0.00% (2011 - 0.00%)

- -

Current tax charge for the year - -

On the basis of these financial statements no provision has been made for corporation tax.



4 Tangible fixed assets Land and buildings

Plant and machinery etc Total

£ £ £

CostAt 1 January 2012 146,323 13,582 159,905Additions 27,009 - 27,009At 31 December 2012 173,332 13,582 186,914

DepreciationAt 1 January 2012 20,410 4,548 24,958Charge for the year 12,308 3,439 15,747At 31 December 2012 32,718 7,987 40,705

Net book valueAt 31 December 2012 140,614 5,595 146,209At 31 December 2011 125,914 9,034 134,948

5 Debtors 2012 2011£ £

Other debtor 15,000 51,568

6 Creditors: amounts falling due within one year 2012 2011£ £

Taxation and social security 6,873 2,727Other creditors 195,590 55,881

202,463 58,608

The cash and bank balances include an amount £185,672 received from customer for outward remittance at period end date. The amount was subsequently remitted on 02 January 2013. The payable amount is included within the balance of other creditors.

7 Share capital 2012 2011£ £

Allotted, called up and fully paid 500,000 Ordinary of £1 each 500,000 450,000



8 Statement of movements on profit and loss account Profit and loss account

£

Balance at 1 January 2012 (236,963)Loss for the year (115,788)Balance at 31 December 2012 (352,751)

9 Reconciliation of movements in shareholders’ funds 2012 2011£ £

Loss for the financial year (115,788) (150,090)Proceeds from issue of shares 50,000 150,000

Net depletion in shareholders’ funds (65,788) (90)Opening shareholders’ funds 213,037 213,127Closing shareholders’ funds 147,249 213,037

10 Control

The ultimate controlling party is Prime Bank Limited which is a public limited company registered in Bangladesh.



Report of the DirectorsPBL Finance (Hong Kong) Limited

Report of the Directors The Directors present their annual report and the audited financial statements for the year ended 31st December, 2012. Principal Activities PBL Finance (Hong Kong) Limited (“the Company”) is a company incorporated and domiciled in Hong Kong and has its registered office and principal place of business at Room 608, 6th Floor, Admiralty Centre, Tower Two, 18 Harcourt Road, Hong Kong. The principal activities of the Company are money lending in Hong Kong and providing the following services:-

- Advising of documentary credits; - Endorsing confirmation to the credit upon request of issuing bank; - Negotiating/discounting of documents; and - Remittance business.

Results and Appropriations The profit of the Company for the year ended 31st December, 2012 and the state of the Company’s affairs as at that date are set out in the Company’s financial statements on pages 5 to 15. The directors do not recommend the payment of a dividend for the year ended 31st December, 2012. Property, Plant and Equipment Details of the movements during the year in the property, plant and equipment of the Company are set out in note 10 to the financial statements. Share Capital and Reserves Details of the movement during the year in the share capital of the Company are set out in note 12 to the Company’s financial statements. There were no movements in reserves except for changes to retained earnings which arose from profit or loss. Directors The directors of the Company during the year and up to the date of this report were: Azam J CHOWDHURY Capt. Imam Anwar HOSSAIN Md. Ehsan KHASRU Ainun NISHAT (Appointed on 27th December, 2012) There being no provision in the Company’s articles of association in connection with the retirement of directors by rotation, all existing directors continue in office for the following year.

The Company did not enter into any contract, other than the contracts of service with the directors or any person engaged in the full-time employment of the Company, whereby any individual, firm or body corporate undertakes the management and administration of the whole, or any substantial part of any business of the Company.


Report of the DirectorsPBL Finance (Hong Kong) Limited

Arrangements to Purchase Shares or Debentures At no time during the year was the Company or its holding company a party to any arrangements to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Directors’ Interests Details of directors’ interest during the year are set out in note 13 to the financial statements. Apart from the above, there were no contract of significance to which the Company or its holding company was a party and in which a director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year. Auditors

A resolution will be submitted to the annual general meeting to re-appoint T. O. Yip & Co. Limited as auditor of the Company.

On behalf of the Board

Chairman

Date : 18th February, 2013


Independent Auditor’s Reportto the Shareholders of PBL Finance (Hong Kong) Limited

(Incorporated in Hong Kong with limited liability)

We have audited the financial statements of PBL Finance (Hong Kong) Limited (“the Company”) set out on pages 5 to 15, which comprise the statement of financial position as at 31st December, 2012, and statement of income and retained earnings and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Financial Statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with the Hong Kong Financial Reporting Standard for Private Entities issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit. Our report is made solely to you, as a body, in accordance with Section 141 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume responsibility toward or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.”

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.


Opinion

In our opinion, the financial statements give a true and fair view of the state of the Company’s affairs as at 31st December, 2012, and of its profit and cash flows for the year then ended in accordance with the Hong Kong Financial Reporting Standard for Private Entities and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

T. O. Yip & Co. LimitedCertified Public Accountants (Practising)

Yip Tak On, GeorgePractising Certificate Number : P00301

Date : 18th February, 2013


Statement of Income and Retained Earningsfor the year ended 31st December, 2012

NotesYear ended Period ended31.12.2012 31.12.2011

HK$ HK$

Interest income 6,407,656 1,417,470

Interest expenses 4 (2,097,317) (340,936)

Net interest income 4,310,339 1,076,534

Other operating income 5 3,556,575 345,045

Total operating income 7,866,914 1,421,579

Staff costs (1,863,731) (555,713)Depreciation 10 (28,030) (5,516)Other operating expenses (809,311) (485,487)

Total operating expenses (2,701,072) (1,046,716)

Profit before taxation 8 5,165,842 374,863

Income tax expense 9 (845,043) (60,038) Profit for the year/period 4,320,799 314,825

Retained earnings at start of year/period 314,825 -

Retained earnings at end of year/period 4,635,624 314,825


Statement of Financial Position as at 31st December, 2012

2012 2011Notes HK$ HK$

Non-current assets

Property, plant and equipment 10 93,620 48,776

Current assets

Discounted bills receivable 118,242,546 54,680,501 Deposits, prepayments and other receivables 168,835 109,200 Cash and bank balances 1,181,256 1,449,532

119,592,637 56,239,233

Current liabilities

Accrued liabilities and other payables 1,022,952 274,986 Amount due to ultimate holding company 11 110,190,600 53,408,160 Income tax payable 905,081 60,038

112,118,633 53,743,184

Net current assets 7,474,004 2,496,049

7,567,624 2,544,825

Equity

Share capital 12 2,932,000 2,230,000 Retained earnings 4,635,624 314,825

7,567,624 2,544,825

The financial statements on pages 5 to 15 were approved and authorised for issue by the Board of Directors on 18th February, 2013 and are signed on its behalf by:

DirectorDirector


Notes to Statement of Cash Flowsfor the year ended 31st December, 2012

NotesYear ended Period ended31.12.2012 31.12.2011

HK$ HK$

Operating activities

Profit before taxation 5,165,842 374,863 Adjustments for : Depreciation 10 28,030 5,516

Operating profit before changes in working capital 5,193,872 380,379

Increase in discounted bills receivable (63,562,045) (54,680,501)Increase in deposits, prepayments and other receivables (59,635) (109,200)Increase in accrued liabilities and other payables 747,966 274,986 Increase in amount due to ultimate holding company 56,782,440 53,408,160

Net cash used in operating activities (897,402) (726,176)

Investing activities

Purchase of property, plant and equipment 10 (72,874) (54,292)

Net cash used in investing activities (72,874) (54,292)

Financing activities

Issue of shares 12 702,000 2,230,000

Cash generated from financing activities 702,000 2,230,000

Net (decrease)/increase in cash and cash equivalents (268,276) 1,449,532

Cash and cash equivalents at start of year/period 1,449,532 -

Cash and cash equivalents at end of year/period 1,181,256 1,449,532

Analysis of cash and cash equivalents

Cash and bank balances 1,181,256 1,449,532


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 1. General Information PBL Finance (Hong Kong) Limited (“the Company”) is a limited company incorporated in Hong Kong. The address

of its registered office and principal place of business is Room 608, 6th Floor, Admiralty Centre, Tower Two, 18 Harcourt Road, Hong Kong. The principal activities of the Company are money lending in Hong Kong and provides the following services:-

- Advising of documentary credits; - Endorsing confirmation to the credit upon request of issuing bank;

- Negotiating/discounting of documents; and - Remittance business. 2. Basis of Preparation and Accounting Policies

These financial statements have been prepared in accordance with the Hong Kong Financial Reporting Standard

for Private Entities (HKFRS for Private Entities) issued by the Hong Kong Institute of Certified Public Accountants and the requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention.

(a) Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated

impairment losses. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful

lives, using the straight-line method. The following annual rates are used for the depreciation of property, plant and equipment:

Office equipment 33 1/3% Furniture and fixtures 33 1/3%

If there is an indication that there has been a significant change in the depreciation rate, useful life or residual value

of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

(b) Trade and other receivables Trade and other receivables are recognised initially at the transaction price. They are subsequently measured at

amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. (c) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquid investments

with original maturities of three months or less. Bank overdraft is shown within borrowings in current liabilities on the statement of financial position.

(d) Trade and other payables

Trade and other payables are recognised initially at the transaction price and subsequently measured at amortised

cost using the effective interest method.


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 2. Basis of Preparation and Accounting Policies (cont’d)

(e) Borrowings Borrowings are recognised initially at the transaction price and are subsequently stated at amortised cost. Borrowings

are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

(f) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and is shown net of discounts,

rebates, returns, sales-related taxes. Revenue is recognised in statement of income and retained earnings provided it is probable that the economic

benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably, as follows:-

(i) from the rendering of confirming and advising, checking, telex, postage and other services, when the services are rendered; and

(ii) interest income; on an accrual basis using the effective interest method by applying the rate that discounts

the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

(g) Borrowing costs All borrowing costs are recognised in profit or loss in the period in which they are incurred.

(h) Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the

statement of comprehensive income and retained earnings because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases using in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 2. Basis of Preparation and Accounting Policies (cont’d)

(i) Foreign currency translation -- transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of income and retained earnings.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in statement of income and retained earnings within “finance costs”. All other foreign exchange gains and losses are presented in statement of income within “other operating expenses”.

(j) Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the period in which the dividends are approved by the Company’s shareholders.

(k) Related parties For the purpose of these financial statements, related party includes a person and entity as defined below:

(i) A person or a close member of that person’s family is related to the Company if that person:

(a) is a member of the key management personnel of the Company or of a parent of the Company;

(b) has control over the Company; or (c) has joint control or significant influence over the reporting entity or has significant voting power in it.

(ii) An entity is related to the Company if any of the following conditions applies:

(a) the entity the Company are members of the same group (which means that each parent, subsidiary and

fellow subsidiary is related to the others). (b) either entity is an associate or joint venture of the other entity (or of a member of a group of which the other

entity is a member). (c) both entities are joint ventures of a third entity. (d) either entity is a joint venture of a third entity and the other entity is an associate of the third entity. (e) the entity is a post-employment benefit plan for the benefit of employees of either the Company or an

entity related to the Company. If the reporting entity is itself such a plan, the sponsoring employers are also related to the plan.

(f) the entity is controlled or jointly controlled by a person identified in (i). (g) a person identified in (i)(a) has significant voting power in the entity.

(l) Impairment of non-financial assets At each reporting date, property, plant and equipment is reviewed to determine whether there is any indication that

such has suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If an estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (group of related assets) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

(m) Operating leases Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the

relevant lease.


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 3. Key Sources of Estimation Uncertainty

Property, plant and equipment and depreciation

The Company determines the estimated useful lives and related depreciation charges for the Company’s property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions. The Company will revise the depreciation charge where useful lives are different to those previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

4. Interest ExpensesYear ended Period ended31.12.2012 31.12.2011

HK$ HK$

Bank charges and interest 7,417 85 Interest on amount due to ultimate holding company 2,089,900 340,851

2,097,317 340,936

5. Other Operating IncomeYear ended Period ended31.12.2012 31.12.2011

HK$ HK$

Advising commission income 410,906 43,449 Handling and checking fee 1,698,793 56,127 Other charges and commission fee 1,071,246 244,179 Other income 375,630 1,290

3,556,575 345,045

6. Directors’ Remuneration

Directors’ remuneration disclosed pursuant to Section 161 of the Hong Kong Companies Ordinance is as follows :-

Year ended Period ended31.12.2012 31.12.2011

HK$ HK$

Fees - - Other emoluments - -

7. Employee Benefit Obligations

The Company operates a Mandatory Provident Fund Scheme (“the MPF scheme”) under the Hong Kong Mandatory Provident Fund Schemes Ordinance for employees employed under the jurisdiction of the Hong Kong Employment Ordinance and not previously covered by the defined benefit retirement plan. The MPF scheme is a defined contribution retirement plan administered by independent trustees. Under the MPF scheme, the employer and its employees are each required to make contributions to the plan at 5% of the employees’ relevant income, subject to a cap of monthly relevant income of HK$20,000 (HK$25,000 effective from 1st June, 2012). Contributions to the plan vest immediately.

8. Profit Before Taxation

The following items have been recognised as expenses in determining profit before tax:


HK$ HK$

Auditors’ remuneration 18,000 15,000 Depreciation 28,030 5,516


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 9. Income Tax Expense

Taxation in the statement of income and retained earnings represents:


HK$ HK$Current tax – Hong Kong Profits Tax

Provision for the year 845,043 60,038

The provision for Hong Kong Profits Tax is calculated at 16.5% (2011 : 16.5%) of the estimated assessable profit for the year.No deferred tax has been provided as the effect of all temporary difference is immaterial.

10. Property, Plant and Equipment

Officeequipment Furniture Total

HK$ HK$ HK$Cost

At 31st December, 2011 38,292 16,000 54,292 Additions 72,874 - 72,874 At 31st December, 2012 111,166 16,000 127,166 Accumulated depreciation and impairmentAt 31st December, 2011 3,740 1,776 5,516 Charge for the year 22,702 5,328 28,030 At 31st December, 2012 26,442 7,104 33,546

Carrying amountAt 31st December, 2012 84,724 8,896 93,620 At 31st December, 2011 34,552 14,224 48,776

11. Amount Due To Ultimate Holding Company

The amount due to ultimate holding company (Note 15) is unsecured, interest-bearing at agreed premium over LIBOR and repayable within agreed maturity.

12. Share Capital 2012 2011 HK$ HK$

Authorised:-3,500,000 ordinary shares of HK$1 each 3,500,000 3,500,000

Issued and fully paid :-2,932,000 (2011: 2,230,000) ordinary shares of HK$1 each 2,932,000 2,230,000

Pursuant to an ordinary resolution passed on 3rd September, 2012 the issued share capital of the Company was increased from HK$2,230,000 to HK$2,932,000 by the issue of 702,000 ordinary shares of HK$1 each for cash at par.

13. Related Party Transactions

In addition to the transactions, balances and guarantees disclosed elsewhere in these financial statements, the Company has the following material related party transactions during the year:-

2012 2011 HK$ HK$

Transactions and balances with ultimate holding company:-

Discounted bills receivable 64,689,036 35,786,086 Bank balance 1,148,843 110,114 Interest payable, included in accrued liabilities and other payables 852,089 257,986

Interest expenses 2,089,900 340,851


Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December, 2012 14. Operating Lease Commitments

The Company rents an office premise and a director quarter under operating leases which cover a minimum period of fourteen months, with fixed rentals over the same period.


HK$ HK$

Minimum lease payments under operating leases recognised asan expense during the year/period 480,000 320,000

At the year-end, the Company had outstanding commitments under non-cancellable operating leases that fall due as follows:

2012 2011 HK$ HK$

Within one year 180,000 240,000 In the second to fifth years, inclusive - -

180,000 240,000

15. Parent And Ultimate Holding Company

At 31st December, 2012, the directors consider the immediate parent and ultimate controlling party of the Company to be Prime Bank Limited, which is incorporated in Bangladesh. This entity produces financial statements available for public use.

Annual Report 2012

Documents

khandker mohammad

procedures

medium enterprises

nafis sikder

shore banking

chief executive

agricultural

east coast