Untitled - Southeast Bank Limited

COMMITTED TOSUSTAINABLE GROWTHTOGETHER Nature has spirit and is the main seat of excellence. If we look deep

into nature, we get a variety of lessons from its different components

and forms. The gushing river heading towards the sea for awaited

unison teaches us to face odds with courage and fortitude. The

wonderful blooming flowers from the green teach us to smile. The lush

green grass signaling safety teaches us to be patient and generous. A

mountain with its huge strength teaches us determination. Beyond the

clouds, the sky is always blue and the sun is always shining. They want

us to be persistent and ready for the upcoming days. A small plant’s

gradual turning into a giant tree teaches us to pursue growth

trajectory with hope and tenacity. The change in nature with the

advent of each season displays that actions explain a lot more than

words do. Nature, as a whole, also teaches us integrity and stability.

Nature has many forms and patterns, and teaches us the benefit of

togetherness. It provides us sustenance and stimulates us to excel in

performance. It is our bounden duty to protect and nurture nature.

In the cover picture, the plant is growing into a better and more

advanced state by a process of evolution. So is our Bank. It is gradually

evolving into a higher stage and stature by execution of the strategies

of sustainable growth strongly supported by all stakeholders especially

the loyal customers. We submit ourselves to the nature’s intelligence to

rise up high. Our pursuit of sustainable growth path with the

togetherness of customers is a quest for superior performance for

continuous improvement. Ours is a safe depository for our all

stakeholders. Our pledge is to make it a customers’ coveted destination

and their preferred Bank to shape up their desired future. Together we

shall grow, excel and our actions shall determine our destination. We

firmly believe together we shall reach the goal we sincerely long for.

COMMITTED TOSUSTAINABLE GROWTH

TOGETHER

A N N U A L R E P O R T 2 0 1 6

Table ofContents

SEBL AT A GLANCE

Letter of Transmittal 4

Notice of the 22nd Annual General Meeting 5

Vision and Mission 7

Strategic Objectives, Planning and Priorities 9

Core Values, Code of Conduct and Ethical Principles 12

Corporate Profile 17

Corporate Philosophy and Business Model 18

22 Years of Glorious Journey 20

Awards and Recognitions 22

Corporate Organogram 25

Group Corporate Structure 26

Last 10 Years Financial Indicators 27

Forward Looking Ideology 28

PROFILE OF BOARD OF DIRECTORS AND REVIEW OF THE GROUP CHAIRMAN

Composition of Board of Directors and its Committees 29

Directors’ Profiles and their representation on Board of other Companies 36

Directors’ Responsibility Statement 48

Review from the office of the Group Chairman 50

Managing Director’s Review and Corporate Management 64

DIRECTORS’ REPORT 69

CORPORATE GOVERNANCE

Corporate Governance Report 85

Managing Director’s and CFO’s Declaration on Integrity ofFinancial Statements to the Board 99

Management Review, Responsibility and Evaluation 100

Credit Rating 143

Audit Committee (Composition, Role, Meetings,

Attendance etc.) and Internal Control 144

Report of the Risk Management Committee 149

Evaluation of the Quarterly Financials by the

Audit Committee and by the Board 151

Report of the Bank’s Shariah Supervisory Committee 152

Capital Plan 154

FINANCIAL STATEMENTS Independent Auditor’s Report to the Shareholders 260

Consolidated Balance Sheet 262

Consolidated Profit and Loss Account 264

Consolidated Cash Flow Statement 265

Consolidated Statement of Changes in Equity 266

Notes to the Financial Statements 272

FINANCIAL STATEMENTS OF ISLAMIC BANKING BRANCHES 344FINANCIAL STATEMENTS OF OFFSHORE BANKING 354FINANCIAL STATEMENTS OF SEBL SUBSIDIARIES 364

STANDARD DISCLOSURES CHECKLIST 419SAFA Corporate Governance Disclosure Checklist 420

Integrated Reporting Checklist 422

SAFA Standard Disclosure Checklist 427

Important Financial Indicators with Quantitative and Qualitative Factors 430

Proxy Form and Attendance Slip 441

RISK MANAGEMENT AND CONTROL FRAMEWORK

Report on Risk Management Framework,

Mitigation Methodology and Risk Reporting by CRO 159

Disclosure on Risk Based Capital Adequacy (Basel III) 166

Capital Market Exposure 177

SEBL OUTLOOK

Products and Services 218

Caring for the Employees (Health and Safety) 224

Career Development Program 225

Contribution to National Exchequer 226

Empowering Women 226

Financial Inclusion: Mobile Banking Services – Telecash 230

Service Excellence in Action 231

Bank’s Network: List of Branches and ATMs 232

Memories of 21st AGM 242

SUSTAINABILITY APPRAISAL AND INTEGRATED REPORTING

Sustainability Report - At A Glimpse 180

Report on Corporate Social Responsibility 182

Environment Related Initiatives 186

Green Banking Initiatives – Environmental and Social Obligation 188

Integrated Reporting 189

Communication to Shareholders and Stakeholders 197

Southeast Bank Limited I Annual Report 20164

All Shareholders of Southeast Bank Limited, Bangladesh Bank, Bangladesh Securities and Exchange Commission, Registrar of Joint Stock Companies & Firms, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited

Annual Report of Southeast Bank Limited for the Year -2016

Dear Sir,

Thank you for supporting us in the preceding years.

It is our immense pleasure to lay before you the Bank’s Annual Report-2016 along with the Audited Financial Statements (consolidated and separate) as at and for the year ended 31st December, 2016. Annual Report-2016 of the Bank comprises Balance Sheet, Profit and Loss Accounts, Statement of Changes in Equity, Cash Flow Statement along with Notes to the Accounts.

Information given in our Annual Report-2016 is complete, full and in line with Bangladesh Accounting Standard and International Accounting Standard. We hope that the report will be of use to you today and tomorrow.

Best regards,

Yours sincerely,

Muhammad Shahjahan Additional Managing Director & Company Secretary

Letter of Transmittal

Southeast Bank Limited I Annual Report 2016 5

Notice of the 22nd AnnualGeneral MeetingNotice is hereby given to all members of Southeast Bank Limited that the 22nd Annual General Meeting of the Shareholders of the Company will be held on Monday, May 22, 2017 at 11.00 a.m. at Officers’ Club Dhaka, 26 Baily Road, Dhaka to transact the following business and adopt necessary resolutions:

AGENDA

1. To receive, consider and adopt the Profit and Loss Accounts of the Company for the year ended on 31st December, 2016 and the Balance Sheet as at that date together with the Reports of the Board and the Auditors thereon.

2. To declare dividend for the financial year ended 31st December, 2016.

3. To elect / re-elect Directors.

4. To appoint Auditors for the term until the next Annual General Meeting and fix their remuneration.

5. Miscellaneous, if any, with the permission of the chair.

All Members are requested to attend the meeting on the date, time and place mentioned above. By order of the Board

Dated: May 07, 2017 Muhammad Shahjahan Additional Managing Director and Company SecretaryNOTES

a) The Record Date for the purpose was on April 27, 2017.

b) Any member of the Company entitled to attend and vote at the general meeting may appoint a proxy to attend and vote on his/her behalf. Such proxy except for a Corporation must also be a member of the Company. An Attorney of a member need not himself/herself be a member.

c) The instrument appointing a Proxy or the Power of Attorney duly signed by the Member and stamped with requisite stamp duty must be submitted at the Registered Office of the Company at least 48 hours before the meeting, i.e. latest by 11.00 a.m. of May 20, 2017.

d) Attendance of the Shareholder/Attorney/Proxy shall be recorded up to 11.30 a.m. at the entrance of the venue. Attendance slip has to be submitted at the Registration Counter duly signed. The signature must agree with the recorded signature.

e) Annual Report containing, among other papers, this Notice of the 22nd Annual General Meeting, Attendance Slip and Proxy Form are being sent to every member by post. The members may also collect “Proxy Form” from the Share Office of the Company.

f ) All members are requested to update: (i) The particulars of their Bank Account (ii) Change of Address and (iii) 12 Digits Tax Payer’s Identification Number (e-TIN) in their BOID through Depository Participants (DP) on or before May 15, 2017, with intimation to us.

g) Brokerage Houses and DPs are requested to notify us in details showing Shareholder’s name, BOID Number, e-TIN, client-wise shareholding position, Bank Account Number, Routing Number etc. of their Margin Loan holders who hold shares of Southeast Bank Ltd. on the Record Date on or before May 15, 2017.

h) If any individual shareholder fails to provide us his/her e-TIN within May 15, 2017, his/her Income Tax at source will be deducted from payable Dividend @15% (fifteen percent) instead to 10% (ten percent) as per amended Income Tax Ordinance 1984 (Section 54)

PS: As per Bangladesh Securities and Exchange Commission’s Circular No.SEC/CMRRCD/2009-193/154 dated October 24, 2013, “no benefit in cash or kind, other than in the form of cash dividend or stock dividend, shall be paid to the holders of equity securities” for attending the 22nd Annual General Meeting of the Bank.

SEBL at a glance


Vision &MissionOur vision, mission and value statements are the keys to the philosophy on which we base ourselves on, what we do and what we want to be


Vision &MissionOur vision, mission and value statements are the keys to the philosophy on which we base ourselves on, what we do and what we want to be

Vision

Mission

To be a premier banking institution in Bangladesh and contribute

signi�cantly to the national economy.

High quality �nancial services with state of the art technology.

Fast customer service.

Sustainable growth strategy.

High Ethical standards in business.

Steady return on shareholders’ equity.

Innovative banking at a competitive price.

Attraction and retention of quality human resource.

Commitment to Corporate Social Responsibility.


Vision

Mission












Strategic Objectivesa) Maintaining a high quality assets portfolio to achieve

strong and sustainable returns and to continuously build shareholders’ value.

b) Maintaining adequate capital in line with risk appetite of the Bank.

c) Strengthening trust and partnerships with customers by focusing on the Bank’s core values of quality customer service, professionalism, teamwork and integrity.

d) Hiring professionals with strong background and knowledge.

e) Strengthening technologies that reduce operational risks and promote the implementation of best practices in the industry.

f ) Developing innovative products and services that attract our targeted customers and market segments.

g) Exploring new avenues for growth and profitability.

h) Practicing efficient risk management principles in

i) Excellence in banking operations through maintaining strong fundamentals of Capital Adequacy, Business Diversification and Exploring Non-funded Business

ii) Prudent Asset Management

iii) Prudent Liability Management

iv) Excellence in Delivering Customer Service

v) Effective Risk Management

vi) Effective IT Framework and System

line with all six core risks in banking operation and green banking and environmental risk management.

i) Practicing efficient corporate governance and compliance processes through meeting all regulatory requirements and disclosures in line with national and international best practices by ensuring best internal control monitoring practices.

j) Upholding Bank’s brand image as a customer friendly bank through efficient and prompt customer service, product diversification with a view to establishing a long term profitable relationship with our customers.

k) Serving the society as part of our Corporate Social Responsibility (CSR) by giving stipends to poor students, distributing warm clothes to winter-hit people and contributing to the different relief fund. We also contribute to the society by paying taxes to the national exchequer timely.

l) Extending banking services to the un-banked people for financial inclusion meeting socio-economic requirements.

vii) Efficient Internal Control and Regulatory Compliance System

viii) Strong Human Resource Base

ix) Going green in the future of banking

Priorities followed in 2016The Bank had the following plans and road-map for business success in 2016.

Vision

Mission











SEBL at a glance


Strategic PrioritiesWe have strong conviction that SEBL will keep on flourishing as a leading financial institution of Bangladesh, despite existence of external challenges: first, because we have a visionary Board, dynamic management and an enthusiastic & skilled group of employee base that is committed to working together to provide our customers with excellent service; second, because we are building on a solid foundation of key strengths, including a strong capital base, and excellent risk and cost management skills; third, because we are strategically diversifying our business lines, products and locations; and finally, because we have a clear focus on our strategy and where we need to direct our efforts. Our strategic focus is built around a few key priorities that will guide our actions as we move forward over the next several years. They will serve as a roadmap to help us navigate through the new landscape in which we are now operating. Sustainable revenue growth, capital management, leadership, prudent risk & appetite management, efficiency & expense management – will be the pillars of our strategy in upcoming years. They will play a critical role in our success and, given the ongoing market uncertainty, they deserve a prominent place in our strategic framework.

Strategic priorities for sustainable revenue growth:

Sustainable revenue growth comes from our ability to build relationships with our customers and creating niche markets. We do this by providing our customers with exceptional service, such us:

Ensuring quality customer service at primary distribution channel such as Branch and development of alternative delivery channels to improve customer experience

Developing and upgrading customized asset, liability and transaction products for Retail, SME and Corporate clients

Mobilizing low cost sustainable deposit from retail and institutional client base

Increasing client base for financial inclusion and wider market penetration

Diversification and increasing loan clients and maintaining quality assets

Export expansion and diversification

Promoting Islamic banking through conventional branches

Emphasizing Small and Medium Enterprises financing

Agricultural & Rural Credit through Micro Financial Institutions

Sustainable financing for Energy efficiency and renewable energy projects

Arranging funds from overseas sources for Off-shore banking service and long term foreign currency loans for corporate clients

Integrated marketing development initiative by creation of customer oriented culture

Mobilizing remittance as a source of foreign currency

Strategic priorities for Capital management & maintaining strong capital base:

SEBL is committed to consolidate its solid capital base to support the risks associated with our diversified businesses, while still providing investors with superior returns. We actively manage our capital to support the execution of our business strategies. Our goal is to achieve the lowest cost of capital by managing its mix and by building our base through earnings and selective capital issues.

Expediting borrowers’ rating

Concentrating on lending portfolio having lower capital charge

Strengthening internal Capital adequacy assessment process (ICAP)

Preemptive preparation for Basel –III compliance

Revising the capital allocation to business in line with revised capital adequacy target ratios

Strategic priorities for Leadership/HR capacity development

SEBL’s success depends on having the right leaders to execute our strategy. For this reason, leadership remains one of our strategic priorities. Our leadership strategy continues to build competitive advantage through comprehensive development programs and tools.

Hiring the best talents in different arenas of Banking


Fostering a culture of creativity, innovation and diversity with a view to achieving sustainable business growth

Developing a Human resource base by rendering training and motivation so that they remain capable to lead new initiatives

Creating alignment between the leadership development strategy and the business strategy

Evaluating employees based on Key Performance Indicators (KPIs)

Developing Human resource management system to transform the organization

Strategic priorities for prudent risk & apatite management

At SEBL, we are known for our risk management culture, characterized by a conservative approach and rigorous processes. We try to know our customer fully. But at the heart of our strength is experience and good judgment.

For Credit Risk, our focus is developing a strategic business plan for apatite management and structured policy guideline and framework in order to manage default risk

Ensuring effective risk management system especially prudent management of Asset Liability risk, Foreign Exchange risk and Operational risk

Ensuring meticulous compliance of disbursement procedures and monitoring and follow-up of each loan by the Branch manager to ensure in time recovery

Strengthening recovery drive to bring down NPL at a minimum level

Ensuring efficient internal control and regulatory compliance in all levels of banking operations

Efficiency and expense management

Expense management is a traditional strength at SEBL – and today, it’s more important than ever. While revenue growth is ultimately decided by our customers & external factors, expenses are something we can control. At SEBL, we are carefully monitoring our spending and looking for ways to improve productivity by being innovative and doing more with less. Our priorities are:

Clear cost saving strategies

Business process reengineering (BPR) in different business and operational areas to improve efficiency

Optimizing efficiency by budgetary control

Paperless banking

Implementing green office guide

SEBL at a glance


Core Values

Our ValuesServe as a compass for our action

and describe our direction.

� Integrity

� Respect

� Fairness

� Harmony

� Team Spirit

� Courtesy

� Commitment

� Service Excellence

� Insight and Spirit

� Enthusiasm for work

� Business Ethics

CORESTRENGTHS

CORECOMPETENCIES

� Professionally Strong Board of Directors

� Strong Capital Base

� Transparent and Quick Decision Making

� E�cient Team of Performers

� Satis�ed Customers

� E�ective Internal Control

� Skilled Risk Management

� Knowledge

� Experience and Expertise

� Customer Orientation and Focus

� Transparency

� Determination

� Zeal for Improvement

� Pursuit of Disciplined Growth Strategies

� Reliability

� Focus on Diversi�cation

� Quality Customer Service

� Unique Corporate Culture

� Sharp bifurcation Between Board and Management Functions

� Strong Asset Base


Core Values

Our ValuesServe as a compass for our action

and describe our direction.

� Integrity

� Respect

� Fairness

� Harmony

� Team Spirit

� Courtesy

� Commitment

� Service Excellence

� Insight and Spirit

� Enthusiasm for work

� Business Ethics

CORESTRENGTHS

CORECOMPETENCIES

� Professionally Strong Board of Directors

� Strong Capital Base

� Transparent and Quick Decision Making

� E�cient Team of Performers

� Satis�ed Customers

� E�ective Internal Control

� Skilled Risk Management

� Knowledge

� Experience and Expertise

� Customer Orientation and Focus

� Transparency

� Determination

� Zeal for Improvement

� Pursuit of Disciplined Growth Strategies

� Reliability

� Focus on Diversi�cation

� Quality Customer Service

� Unique Corporate Culture

� Sharp bifurcation Between Board and Management Functions

� Strong Asset Base


Code of Conduct and Ethical Principles

A. WE ADHERE TO THE FOLLOWING PRINCIPLES IN DEALING WITH CUSTOMERS

1. Follow strict ethical banking practices.

2. Provide fair treatment to all customers, depositors and borrowers without any discrimination.

3. Provide speedy customer service at a very competitive cost.

4. Deal with customers in a transparent manner and without any hidden cost.

5. Maintain strict secrecy of customer account.

6. Provide free financial advice to clients.

7. Deal quickly with complaints received from the customers. We endeavour continuously to build relationship of trust and understanding with our customers.

8. Give very competitive return to the depositors on their investment.

9. Listen to our customers and work for improvement of customer service as per their suggestion.

10. Keep relations with customers in weal and woe.

11. Keep promises that we make.

12. Take competitive service charges and rates.

13. Discourage any sort of privilege/donation from customer

B. WE BELIEVE IN THE FOLLOWING PRINCIPLES IN DEALING WITH SHAREHOLDERS

1. Adequate disclosure of corporate information and operational results to help them take suitable investment decisions / options.

2. Stable Dividend Policy

3. Dialogue with them and implement their suggestions for improvement

4. Equal treatment to all shareholders irrespective of their individual size of shareholding.

5. Effective Risk Management

6. Maintenance of fairness and accuracy of financial reporting and records.

7. Restrictions on insider trading.

C. WE ABIDE BY THE FOLLOWING PRINCIPLES IN DEALING WITH OUR REGULATORS

1. We are transparent in operations and governance.

2. We have a culture of timely compliance of regulatory requirements.

3. We take their suggestions with utmost importance and implement those for improvement of our corporate governance standard.

4. We safeguard information and do not misuse it.

Southeast Bank believes that its efforts to become a leading bank in the private sector can only be achieved and sustained by creating effective corporate governance, inculcating professionalism among its staff and strictly adhering to rules and regulations. We believe that our aims and objectives can only be realized fully and sustained over time by adherence to ethics that cannot always be built into sets of rules and regulations. This belief in ethics motivates the Bank in its dealings with those with whom it interacts.


D. WE CONFORM TO THE FOLLOWING PRINCIPLES IN RESPECT OF OUR EMPLOYEES

1. We do not discriminate on grounds of religion, sex or race at any stage. We recruit the best on the basis of merit under a rigorous recruitment policy without any biasness or favoritism to anybody.

2. We pay competitive compensation package for the really deserving employees.

3. We care for our employees and create an environment to work together with dignity.

4. We have clearly defined duties and responsibilities for each employee. No one is responsible for unassigned jobs.

5. We have a zero tolerance to any act of dishonesty.

6. We provide a congenial work environment.

7. We encourage freedom to our employees to give opinion for both qualitative and quantitative improvement of the Bank.

8. We take care of their health and safety.

9. Our employees avoid conflict of interest.

10. Our employees obey code of conduct.

11. Professionalism, honesty, integrity and high moral and ethical standards are the creed of our employees.

E. WE UPHOLD THE UNDER NOTED PRINCIPLES IN RESPECT OF SOCIETY

1. We believe that the Bank gets business sustenance from the community in which it operates and, therefore, it must remain responsive to the community and the society in reciprocity.

2. We discourage financing projects that are not environment-friendly.

3. We provide material support for protection of environment.

4. We give aid to the poor, helpless and natural calamity-hit people.

5. We support charitable ventures.

6. We give sponsorships to sports, culture, education, health-care and community development ventures.

7. We support the women as a community and contribute to women empowerment.

8. We are keen to move fast for green banking to protect environment.

F. WE DEVOTE TO THE FOLLOWING PRINCIPLES IN RESPECT OF NATIONAL INTEREST

1. We protect national interests.

2. We refrain from prohibited business.

3. We promote causes for national upliftment.

4. We support nation building efforts from our position.

Commitments to Clients

Ours is a customer focused modern banking institution in Bangladesh. We deliver unparalleled financial services to Retail, Small and Medium Scale Enterprises (SMEs), Corporates, Institutions, Government, and individual clients through branches across the country. Our business initiatives center around the emerging demands of the market. Our commitments to the clients are as follows:

a) Provide service with high degree of professionalism and use of modern technology.

b) Create long-term relationship based on mutual trust.

c) Respond to customer needs with speed and accuracy.

d) Share their values and beliefs.

e) Grow as our customers grow.

f ) Provide products and services at competitive price.

g) Ensure safety and security of customers’ valuables in trust with us

SEBL at a glance


Our Banking Heritage

Southeast Bank Limited is a second-generation bank that was established in 1995 with a dream and a vision to become a pioneer banking institution of the country and contribute significantly to the growth of the national economy. The Bank’s journey began when it was incorporated as a Public Limited Company on March 12, 1995. The Registrar of Joint Stock Companies and Firms issued the Certificate of Commencement of Business of the Bank on the same date. The Southeast Bank received its Banking License from the Bangladesh Bank on March 23,1995. The Bank’s 1st branch was opened by Late M. Saifur Rahman, the then Honourable Finance Minister of the Government of the People’s Republic of Bangladesh as the Chief Guest at the commercial hub of the country at 1, Dilkusha Commercial Area, Dhaka on May 25, 1995.

In its arduous journey since, Southeast Bank has succeeded in realizing the dreams of those who established it. Today it is one of the country’s leading banks in the private sector contributing significantly to the national economy. The Authorized Capital of the Bank today is BDT 15,000 million. Its Paid-Up-Capital and Reserve reached BDT 34,056.28 million as on December 31, 2016. The Bank had 2,616 Staff of whom 229 were Executives, 1,860 were Officers and 527 were other Staff as on December 31, 2016.

The Southeast Bank was established by leading business personalities and eminent industrialists of the country with stakes in various segments of the national economy. They established the Bank with a vision to bring efficient and professional banking service to the people and the business community of Bangladesh to help the national economy grow. The incumbent Chairman of the Bank is Mr. Alamgir Kabir, FCA, a professional Chartered Accountant. The Bank’s Managing Director (Current Charge) is Mr. M. Kamal Hossain, a creative, experienced and eminent banker of the country with 34 years of experience in banking to his credit.

The Bank’s operations are built upon unequivocal emphasis on effective corporate governance. The objective is to create, promote and build long-term company value. The Bank’s first and the highest priority is to provide effective services and maximum satisfaction to the customers. The ethos of harmony and co-operation is widely practiced in the Bank. We take pride in the fact that the public and private face of the Bank is one and identical. We believe that transparency in decision-making, monitoring mechanism and full disclosure to shareholders and regulatory authorities are essential aspects of bank’s corporate governance and that they create an intense pressure to rationalize bank’s services and search for new competitive advantages. We work ceaselessly within these parameters.

A team of efficient professionals manages the Bank. They create and generate an environment of trust and discipline that encourages everybody in the Bank to work together for achieving the objectices of the Bank. The culture of maintaining congenial work-environment in the Bank has further enabled the staff to benchmark themselves better against management expectations. A commitment to quality and excellence in service is the hallmark of their identity.

Southeast Bank has become a synonym of quality banking services and products. It has a diverse array of products and services tailored carefully to cater to the needs of all segments of customers. Our operational strategies are structured to address the special and often complex needs of the customers. In the growth graph, the Bank has generated profit of BDT 2,435.07 million after provision and income tax in the year 2016. The curve keeps soaring upward everyday making it one of the leading and most successful banking institutions in Bangladesh with a total asset base of BDT 291,798.01 million as on December 31, 2016.


CorporateProfile

Name of the Company : Southeast Bank LimitedLegal Form : Public Limited CompanyDate of Inception : March 12, 1995Company Registration No. : C-27985 (1831)/95Authorized Capital : BDT 15,000 millionPaid Up Capital : BDT 9,169.50 millionRegistered Office : Eunoos Trade Centre 52-53, Dilkusha C/A (Level 2,3,4,6 & 16), Dhaka-1000, Bangladesh Phone:+88 02 9571115, 9576415, 9555466 & 9578324 Fax: +88 02 9550093, 9550094 & 9550086 SWIFT: SEBDBDDHXXX, E-mail: [email protected] Website: www.southeastbank.com.bdTax Payer Identification No. : 555495486932VAT Registration No. : 19011025625Chairman : Alamgir Kabir, FCAManaging Director (Current Charge) : M. Kamal HossainChief Risk Officer : S.M. Mainuddin ChowdhuryCompany Secretary & CAMLCO : Muhammad ShahjahanChief Financial Officer : Mohammad Aminul Haque, FCA, ACMA (CIMA), CGMAAuditors : Rahman Rahman Huq, Chartered Accountants Tax Consultant : Akhter Abbas Khan & Co.Credit Rating Agency : Credit Rating Information and Services Limited(CRISL)Date of Opening of First Branch : May 25, 1995Year of Initial Public Offer : 1999Number of Employees : 2,616No. of Branches : 128 (one hundred twenty eight)No. of Islamic Banking Branches : 05 (five)No. of Ladies Branches : 02 (two)No. of Off-Shore Banking Units : 02 (two)No. of Foreign Correspondents : 807 (eight hundred seven)Number of Outstanding Shares : 916,950,176Listing Status (Shares) : Dhaka Stock Exchange (DSE) Symbol: SOUTHEASTB, Listing Date: April 10, 2000 Chittagong Stock Exchange (CSE) Symbol: SOUTHEASTB, Listing Date: April 24, 2000Market Price Information DSE: BDT 18.70, Category A(as on 31.12.2016) CSE: BDT 18.80, Category A Investors’ Enquiry : Share Division Eunoos Trade Centre 52-53, Dilkusha C/A (Level-2), Dhaka-1000 Phone:+88 02 9567271, Fax: +88 02 9567273Name of the Bank’s Subsidiaries : Southeast Bank Capital Services Limited Southeast Financial Services (UK) Limited Southeast Financial Services (Australia) Pty Limited Southeast Exchange Company (South Africa) Pty Ltd.


Corporate Philosophy and Business Model

Our corporate philosophy centers around our corporate missions, business domain and management goals. We devote our talent and technology to the creation of value for our stakeholders. Everyday our people bring this philosophy to life and to their work. Our philosophy cannot be bound by a few words or issues. Yet we narrate the following: Customers

Our company philosophy is simple. It is customer-friendly and fully responsive to customer needs and expectations. We carry out required research, analysis and survey to find out what the customers expect. We leverage technology and expertise to provide best services and convenience to the customers. We spend money on things that matter to them and add value to the Bank in terms of image and profit. That is why our customer-base has been steadily expanding over the years.

Human Resource

Our people are smart, professional, well-qualified, energetic and sincere. They are passionate about what they do. Since they enjoy their work, it becomes easy for them to work hard. They do not follow any set model, rather they create models. They completely own what they plan and do.

Communication

Our philosophy is to reduce lines and layers of communication. We believe in free flow of ideas within the Management Team. The Senior Management Team is also open to ideas suggested by the lower level executives and officers. At the same time, our decision making process is short but quick.

Control Mechanism

Our control mechanism is practiced at all levels. We strive to control the behavior of the employees. Our control mechanism is closely linked to efficiency, quality, innovation and responsiveness to customers.

Quality and Productivity

Our philosophy is geared towards boosting productivity and maintaining a reliable high quality service standard. In the process of delivery of service, co-ordination is the essence of our business. Our philosophy is to achieve our goals through a combination of budgetary control, pay for performance, incentive system, unique corporate culture that continuously stresses key values.

Building Future

Our philosophy is to make decisions today to improve performance tomorrow. We know a company which is successful has to continue to be successful. We do not fear our future, we shape it by our corporate conduct.


Business Model Canvas ofSoutheast Bank Limited

Key Partners

Customers Shareholders Employees Regulators Strategic Partners

Value Proposition

Complete Solution of Business Needs One Stop Service for Personal Banking Innovative Tailor-made Products Timely, Cost-e�ective and Superior Services Geographically Well-spread Availability

Key Activities

Deposit Lending International Trade Remittance Treasury Solutions Islamic Banking O�-shore Banking

Key Resources

Highly Professional and Experienced Board Nationwide Network Worldwide Correspondent Network Highly Skilled Sta� Dedicated Service Attitude Wide Range of Products Strong IT platform Strong Capital Base

Cost Structure

Interest Expense Operating Expense Capital Expenditure

Customer Segments

Corporate Clients Small and Medium Enterprises Non-Banking Financial Institutions Banks Individuals/ Retail Clients Institutional Clients Govt. and Non-Govt. Organizations

Customer Care

KYC – Know Your Customer Personal Visit Phone Call/ Email/ SMS Automated Services Special Campaign In-depth Analysis Individual Solution Continuous Review Research and Development Receiving Feedback

Revenue Streams

Interest Income Investment Income Fees, Commission, etc. Other Operating Income

Delivery Channels

Branches ATMs Internet Banking Mobile Banking Call Center Subsidiary Companies

SEBL at a glance


22 Years ofGlorious Journey

Incorporation of SEBL 12.03.1995

Certificate of Commencement of Business 12.03.1995

License Issued by Bangladesh Bank 23.03.1995

Formal Inauguration 25.05.1995

Inauguration of 1st Branch 25.05.1995

Formation of SEBL Foundation 12.03.2002

Listing with Dhaka Stock Exchange Limited 12.04.2000

Listing with Chittagong Stock Exchange Limited 24.04.2000

Registered as Depository Participant of CDBL 17.02.2004

1st to Demat Shares in CDS of CDBL in Banking Sector 16.05.2004

Became a member of Trade Finance Program (TFP) of Asian Development Bank (ADB) 20.10.2004

1995

2000

20022004

Initial Public Offer (IPO)

Subscription Opened25.11.1999

Subscription Closed05.12.1999

1999

2001

2003

1st Rights Share Issue

Subscription Opened15.02.2003 Subscription Closed 15.03.2003

Commencement of Islamic Banking business from Chhagalnaiya Islamic Banking Branch, Feni 28.07.2003

License Issued from Bangladesh Bank as a Primary Dealer 28.10.2003

Launching of ATM 01.09.2001

Launching of Credit Card 01.01.2005

2nd Rights Share Issue

Subscription Opened 15.10.2006

Subscription Closed 31.10.2006

2005

2006


Introduction of new Core Banking Software 14.02.2009

Launching of 1st Off-shore Banking Unit 30.12.2009

Established Central Payment Centre (CPC) at Head Office for International Trade Payments 15.01.2013

Incorporation of Southeast Financial Services (Australia) Pty Limited 18.03.2013

Formation of Southeast Bank-The Financial Express-Policy Research Institute Green Award Trust 30.06.2013

Establishment of Southeast Bank Green School 12.09.2013

Issuance of Subordinated Bond for BDT 3,000.00 million. 11.11.2014

Introduction of Green Award 15.11.2014

Incorporation of Southeast Exchange Company (South Africa) Pty Limited 15.12.2014

Opening of Ladies Branches 29.12.2014

Introduction of Internet Banking 28.02.2011

Launching of SEBL 1st Mutual Fund 23.05.2011

Signed first Short Term Rollover Loan Agreement with International Finance Corporation (IFC) 28.06.2011

Incorporation of Southeast Financial Services (UK) Limited 15.09.2011

100% Online Banking 17.09.2011

Became a member of Global Trade Finance Program (GTFP) of International Finance Corporation (IFC) 23.04.2007

Signing of Revolving Credit agreement for USD 5.00 million with Asian Development Bank (ADB ) 31.03.2016

Launching of client acquisition drive through ‘Nibir’ Campaign 15.05.2016

Issuance of Subordinated Bond for BDT 5,000.00 million 02.08.2016

Introduction of Bank’s Health Care Centre 29.09.2016

Introduction of Bank’s E-Library 29.09.2016

Launching of ‘Cash Express Remit Card’ for beneficiary of Foreign Wage Earner Expatriates 08.10.2016

Bank awarded 1st position in “ICMAB Best Corporate Award-2015” 26.10.2016

Awarded ‘Tax Card and Trophy’ as 6th highest Tax Payers of the Country in the Banking Sector 24.11.2016

Signed of agreement with Bangladesh Bank for ‘Green Transformation Fund’ 01.12.2016

Launching of Telecash as Mobile Financial Services Product 29.01.2015

Signed Unsecured Facility Agreement with Global Climate Partnership Fund (GCPF) 25.02.2015

Introduction of Bank’s Modern and full-fledged Training Institute 21.05.2015

Signed funded Loan Agreement with International Finance Corporation (IFC) 05.08.2015

Commissioning of ‘SWIFT Sanction Screening Solution’ 30.08.2015

Introduction of Central Monitory System (CMS) to monitor (24X7) all branches 25.10.2015

Introduction of Real Time Gross Settlement (RTGS) 29.10.2015

Implementation of Credit Card Management Software 23.11.2015

Partnership with MasterCard Bangladesh and launched the complete range of Credit Cards (World, Platinum, Titanium and Gold) and Prepaid Card 15.12.2015

Introduction of Bank’s Call Centre 24X716.12.2015

Introduction of Chip-basedCredit Card 31.12.2015

Launching of ATM and ATM Cards with own System 27.03.2010

3rd Rights Share Issue Subscription Opened 07.07.2010

Subscription Closed 29.07.2010

Incorporation of Southeast Bank Capital Services Limited 23.09.2010

2007

2009

20112013

2014

2010 20162015


Southeast Bank Limited has been awarded the First Position as the best Corporate in the Banking Sector (Private Bank-Traditional Operation) by “ICMAB Best Corporate Award-2015”. The Institute of Cost and Management Accountants of Bangladesh (ICMAB) exhaustively analyzed the Bank’s Annual Report -2015 and bestowed the prestigious award of the “First Position” for Bank’s outstanding performance, encouraging financial results

and indicators, sufficient disclosures for all stockholders and its commitment to quality Corporate Governance, and compliance with legal and regulatory requirements. Former Managing Director of Southeast Bank Limited received The Award from Abul Maal Abdul Muhith M. P., Hon’ble Minister, Ministry of Finance, Government of the People’s Republic of Bangladesh in a ceremony held on October 26, 2016.

Muhammad Shahjahan, Additional Managing Director and Company Secretary, Southeast Bank Limited received Tax Card and Crest from Md. Nojibur Rahman, Senior Secretary, Internal Resources Division (IRD) and Chairman National Board of Revenue (NBR), Ministry of Finance,

Government of the People’s Republic of Bangladesh. Southeast Bank has been given the country’s 6th highest Tax Payers Award in the Banking Institutions Category for the assessment year 2015-2016.

Awards and Recognitions






Board of Directors

Managing Director

Risk Management Committee

Additional Managing Director (Retail Banking and Technology Administration)

Additional Managing Director (Corporate Banking)

Additional Managing Director (Company Affairs

and Islamic Banking)

ExecutiveCommittee

Board Audit Committee

P. S to MD

Board Audit Cell

P.S. to Chairman

Corporate Banking Division

Information Technology

Division

BoardDivision

Internal Control and Compliance

Division

MD’sSecretariat

International Division Retail Banking

Division

ShareDivision Human Resources

Division

SME and Agri. Credit Division Card

Division

Islamic Banking Division Training

Institute

Legal Affairs and Recovery Division

Treasury Back Office Unit Alternative

Delivery Channel Unit

Corporate Marketing Division

Financial Control and Accounts

Division Management Information System Unit

Research and Development Unit

Branches and General Banking

Division

Remittance Division

TreasuryDivision

Central Compliance Unit

Credit Risk Management

Division

EstateDepartment

Logistic and General Services

Division Risk Management Division

Corporate Organogram

Deputy ManagingDirector


Group Corporate Structure

Sout

heas

t Ban

k Ltd

., a

2nd

gene

ratio

n ba

nk

was

inco

rpor

ated

as a

Publ

ic Lim

ited

Com

pany

on

Mar

ch 1

2, 19

95.

Afte

r rec

eivin

g Ba

nkin

g Lic

ense

, its 1

st br

anch

w

as o

pene

d on

May

25

, 199

5. Pr

esen

tly th

e Ba

nk h

as 1

28

Bran

ches

&

117

ATM

s acr

oss t

he

coun

try.

A nu

mbe

r of a

ttrac

tive

Depo

sits a

nd Lo

an

prod

ucts

are

avail

able

in

its p

rodu

ct b

aske

t. SE

BL h

as la

unch

ed R

etail

Ba

nkin

g, D

ebit

Card

s, Cr

edit

Card

s, M

obile

Ba

nkin

g (T

eleca

sh),

Ladi

es B

ranc

hes a

nd

24/7

Call

Cen

tre to

ca

ter t

o th

e ne

eds o

f all

segm

ents

of cu

stom

ers.

Asse

t Size

:BD

T 26

5,01

1.95

milli

onD

epos

its:

BDT

213,

771.

32 m

illion

Loan

s & A

dvan

ces:

BDT

173,

746.

47 m

illion

Ope

ratin

g Pr

ofit:

BDT

7,65

4.18

milli

on

Asse

t Size

:BD

T 20

,606

.07

milli

onD

epos

its:

BDT

16,7

40.5

7 m

illion

Inve

stm

ent:

BDT

9,29

1.20

milli

onO

pera

ting

Profi

t:BD

T 73

5.84

milli

onAs

set S

ize:

BDT

6,37

4.98

milli

onLo

ans &

Adv

ance

s: BD

T 6,

327.

28 m

illion

Ope

ratin

g Pr

ofit:

BDT

107.

79 m

illion

Dat

e of

Inco

rpor

atio

n:Se

ptem

ber 2

3,20

10Pa

id u

p Ca

pita

l: BD

T.5,5

00 m

illion

Ow

ners

hip

Inte

rest

in

Capi

tal:

BDT

5,48

9.93

milli

onIn

Per

cent

age:

99.

82%

Asse

t Size

: BD

T 5,

801.

61 m

illion

Dat

e of

Inco

rpor

atio

n:Fe

brua

ry 2

2, 2

011

Paid

up

Capi

tal:

GBP

300

,000

Ow

ners

hip

Inte

rest

in

Capi

tal:

BDT

38.4

9 m

illion

In P

erce

ntag

e: 1

00%

Asse

t Size

: G

BP 3

71,3

25

Dat

e of

In

corp

orat

ion:

Mar

ch 1

8,20

13Pa

id u

p Ca

pita

l:AU

D 3

12,0

82.9

0O

wne

rshi

p In

tere

st

in C

apita

l:BD

T 25

.06

milli

onIn

Per

cent

age:

100

%As

set S

ize:

AUD

52,

303.

19

Dat

e of

Inco

rpor

atio

n:D

ecem

ber 1

5,20

14Pa

id u

p Ca

pita

l:RA

ND

6,6

32,1

79O

wne

rshi

p In

tere

st in

Ca

pita

l:BD

T 50

.10

milli

onIn

Per

cent

age:

100

%As

set S

ize:

RAN

D 1

3,02

0,60

5

Tota

l CSR

rela

ted

Expe

nditu

re u

nder

SE

B Fo

unda

tion

in

2016

: BD

T 13

5.85

milli

on

Besid

es c

onve

ntio

nal

Bank

ing,

SEB

L ha

s 05

(five

) Isla

mic

ban

king

Br

anch

es b

ased

on

Isla

mic

Sha

riah

whe

re S

epar

ate

Acco

untin

g sy

stem

is

bein

g m

aint

aine

d.As

a p

art o

f str

ateg

ic

busin

ess p

lan,

Isla

mic

Ba

nkin

g Se

rvic

e D

esk

(IBSD

) has

alre

ady

been

exp

ande

d to

ev

ery

conv

entio

nal

Bran

ch.

To c

ater

to th

e de

man

d fo

r off-

shor

e ba

nkin

g se

rvic

es,

Sout

heas

t Ban

k es

tabl

ished

two

(02)

O

ff-sh

ore

Bank

ing

Uni

ts (O

BUs)

, one

in

DEP

Z an

d th

e ot

her

is CE

PZ. S

EBL

OBU

s pr

ovid

e a

cont

inuu

m

of fi

nanc

ial s

ervi

ces

such

as F

C Ac

coun

t fo

r Non

-resid

ents

, U

sanc

e Pa

yabl

e At

Sig

ht (U

PAS)

D

ocum

enta

ry C

redi

t, Ti

me/

Term

Loa

n in

Fo

reig

n Cu

rrenc

y, Fu

ll fle

dged

exp

ort-

impo

rt se

rvic

es e

tc.

from

200

9.

To c

arry

on

Mer

chan

t Ba

nkin

g O

pera

tions

in

a st

ruct

ured

way

, th

e Ba

nk e

stab

lishe

d ‘S

outh

east

Ban

k Ca

pita

l Ser

vice

s Li

mite

d’ a

s a

subs

idia

ry c

ompa

ny

in 2

010.

To c

olle

ct re

mitt

ance

fro

m B

angl

ades

hi

expa

triat

es in

Uni

ted

King

dom

for t

heir

bene

ficia

ries i

n Ba

ngla

desh

thro

ugh

prop

er B

anki

ng

Chan

nel, t

he B

ank

esta

blish

ed ‘S

outh

east

Fi

nanc

ial S

ervi

ces

(UK)

Lim

ited’

as a

su

bsid

iary

com

pany

in

201

1.

To c

olle

ct re

mitt

ance

fro

m B

angl

ades

hi

expa

triat

es in

Aus

tralia

fo

r the

ir be

nefic

iarie

s in

Ban

glad

esh

thro

ugh

prop

er

Bank

ing

Chan

nel,

the

Bank

est

ablis

hed

‘Sou

thea

st F

inan

cial

Se

rvic

es (A

ustra

lia)

Pty

Lim

ited’

as a

su

bsid

iary

com

pany

in

201

3.

To c

olle

ct re

mitt

ance

fro

m B

angl

ades

hi

expa

triat

es o

f So

uth

Afri

ca fo

r th

eir b

enefi

ciar

ies

in B

angl

ades

h th

roug

h pr

oper

Ba

nkin

g Ch

anne

l th

e Ba

nk e

stab

lishe

d ‘S

outh

east

Exc

hang

e Co

mpa

ny (S

outh

Af

rica)

Pty

Lim

ited’

as

a su

bsid

iary

com

pany

in

201

4.

To c

arry

out

Co

rpor

ate

Soci

al

Resp

onsib

ility

(CSR

) re

late

d a

ctiv

ities

in

an o

rgan

ized

and

sust

aina

ble

man

ner,

‘Sou

thea

st B

ank

Foun

datio

n’ w

as

esta

blish

ed b

y th

e Ba

nk in

-200

2.It

also

runs

an

Engl

ish

Med

ium

scho

ol

nam

ed S

outh

east

Ba

nk G

reen

Sch

ool a

t D

haka

.

Sout

heas

t Ban

k Li

mite

d

Conv

entio

nal

Bank

ing

Isla

mic

Ba

nkin

g

Mai

n O

pera

tions

Subs

idia

ries

CSR

Win

g

Off

-Sho

re

Bank

ing

Uni

ts

Sout

heas

t Ban

k Ca

pita

l Ser

vice

s Lt

d.

Sout

heas

t Fi

nanc

ial S

ervi

ces

(UK)

Ltd

.

Sout

heas

t Fi

nanc

ial S

ervi

ces

(Aus

tral

ia) P

ty L

td.

Sout

heas

t Ex

chan

ge

Com

pany

(Sou

th

Afric

a) P

ty L

td.

Sout

heas

t Ban

kFo

unda

tion


Last 10 Years’ Financial IndicatorsBD

T in

mill

ion

PART

ICU

LARS

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

Auth

oriz

ed C

apita

l15

,000

.00

15,

000.

00

15,

000.

00

10,

000.

00

10,0

00.0

0 10

,000

.00

10,0

00.0

0 10

,000

.00

3,50

0.00

3,

500.

00

Paid

up

Capi

tal

9,16

9.50

9,16

9.50

9,16

9.50

8,73

2.86

8

,732

.86

8,31

7.01

6,

930.

84

3,42

2.64

2,

852.

20

2,28

1.76

Rese

rve

Fund

/ Oth

ers

24,8

86.7

8 1

9,34

0.03

1

8,29

2.59

1

3,07

4.71

10

,864

.68

10,6

83.0

5 10

,265

.96

6,50

4.52

4,

804.

81

4,18

6.60

Tota

l Cap

ital (

Tier

-I+Ti

er-II

)34

,056

.28

28,5

09.5

3 27

,462

.09

21,8

07.5

7 19

,597

.54

19,0

00.0

6 17

,196

.80

9,92

7.16

7,

657.

01

6,46

8.36

Dep

osit

229,

973.

43

210,

431.

09

189,

472.

54

1

77,5

19.4

6 15

2,90

1.24

12

7,17

8.22

10

7,25

3.19

96

,669

.05

68,7

14.6

7 55

,474

.05

Adva

nce

191,

865.

59

168,

878.

46

147,

070.

81

134,

863.

82

126,

968.

97

107,

288.

56

93,9

81.2

0 77

,497

.57

60,2

81.2

6 48

,164

.60

Inve

stm

ent

61,7

31.6

3 58

,829

.27

56,3

78.5

9 57

,589

.06

39,0

11.2

8 29

,846

.60

18,8

69.0

7 21

,350

.23

12,2

99.6

1 8,

462.

86

Impo

rt B

usin

ess

171,

531.

73

151,

812.

58

155,

691.

00

131,

644.

82

111,

537.

50

99,5

09.0

1 10

3,72

6.70

69

,582

.92

58,0

19.7

7 38

,470

.34

Expo

rt B

usin

ess

146,

606.

09

1

26,4

23.8

9 11

2,13

7.60

95

,220

.40

84,4

64.2

0 75

,982

.06

58,1

58.0

6 46

,724

.47

42,1

78.6

0 28

,771

.36

Fore

ign

Rem

ittan

ce64

,665

.84

60,7

08.5

0 48

,740

.50

39,2

99.1

0 41

,455

.40

49,5

44.1

0 28

,082

.25

23,7

79.2

0 15

,221

.87

11,0

40.1

7

Gua

rant

ee B

usin

ess i

nclu

ding

ILC

16,3

69.3

6 15

,245

.19

13,6

03.3

0 17

,226

.41

21,5

06.6

5 25

,673

.90

22,7

81.1

9 11

,916

.74

15,0

78.9

9 9,

008.

32

Tota

l Inc

ome

25,6

17.5

7 26

,260

.72

27,6

67.1

0 26

,918

.30

23,1

34.1

8 19

,931

.91

16,1

00.8

1 13

,415

.21

10,2

50.1

3 8,

670.

47

Tota

l Exp

endi

ture

17,1

14.3

5 18

,226

.45

19,3

77.3

4 20

,218

.11

17,6

38.9

9 13

,846

.24

9,33

1.55

8,

800.

55

7,23

7.55

5,

754.

27

Ope

ratin

g Pr

ofit

8,50

3.22

8,

034.

27

8,28

9.76

6,

700.

20

5,49

5.19

6,

085.

67

6,76

9.26

4,

614.

66

3,01

2.58

2,

916.

20

Net

Pro

fit a

fter T

ax a

nd P

rovi

sion

2,43

5.07

3,

069.

42

3,83

6.94

3,

378.

82

1,64

8.72

1,

912.

19

2,76

3.93

1,

870.

19

887.

24

1,22

2.97

Fixe

d As

sets

8,94

7.16

7,

885.

23

7,91

3.00

7,

795.

65

7,67

7.51

7,

373.

11

4,46

3.64

4,

323.

59

2,68

5.56

1,

708.

11

Tota

l Ass

ets

291,

798.

01

260,

718.

03

236

,608

.40

220,

930.

85

191

,276

.30

158,

078.

59

131,

784.

27

112,

676.

98

81,1

81.5

3 64

,370

.69

Earn

ing

per S

hare

(BD

T)2.

66

3.35

4

.18

3

.68

1.

89

2.19

3.

77

3.24

3.

11

4.28

Div

iden

d C

ash

(%)

20%

15%

15%

16%

15%

15%

10%

- 15

%15

%

Bonu

s Sha

res

-

- 5%

(20:

1)

-

5% (2

0:1)

20%

(5:1

)35

% (2

0:7)

20%

(5:1

)25

% (4

:1)

Retu

rn o

n Eq

uity

(RO

E)9.

06%

11.8

6%16

.51%

16.2

0%8.

42%

10.4

7%19

.41%

16.5

1%12

.06%

19.9

0%

Retu

rn o

n As

set (

ROA)

0.88

%1.

23%

1.67

%1.

64%

0.95

%1.

32%

2.26

%1.

66%

1.09

%1.

90%

Non

-Per

form

anin

g Lo

an4.

89%

4.25

%3.

64%

3.94

%4.

47%

3.51

%4.

26%

3.73

%4.

12%

3.77

%

Capi

tal A

dequ

acy

Ratio

12.1

5%11

.52%

12.4

1%10

.90%

10.8

7%11

.46%

11.2

5%11

.72%

11.1

2%13

.00%

Num

ber o

f Cor

resp

onde

nt B

anks

248

220

211

211

183

161

152

146

145

140

Num

ber o

f For

eign

Cor

resp

onde

nts

807

811

791

778

691

654

645

589

587

598

Num

ber o

f Sha

reho

lder

s39

,009

46

,285

58

,169

65

,413

64,

060

68,0

39

66,8

98

22,1

52

12,5

36

9,63

6

Num

ber o

f Em

ploy

ees -

Ban

king

2,08

9 18

8917

8017

0416

5515

2613

7312

5410

8096

4

-

Non

Ban

king

527

487

441

414

355

322

240

148

151

152

Num

ber o

f Bra

nche

s12

8 12

211

310

394

8476

5646

38

SEBL at a glance


Forward Looking Ideology

This Annual Report-2016 of Southeast Bank Limited also contains forward-looking statements. Since there are uncertainties about the occurrence of the future events, those should be treated from that viewpoint in decision-making by the users of the Annual Report.

A forward-looking statement is a statement that contains predictions, projections and possibilities. It relates to future events. It often predicts expected future business and financial performance. It contains words such as ‘expect’, ‘anticipate’, ‘believe’, ‘seek’, ‘will’, ‘may’, ‘would’, ‘presume’, ‘assure’, ‘hope’, so on and so forth. A forward-looking statement naturally addresses matters that are, to certain degrees, uncertain and may not happen. In most cases, a forward-looking statement is made in respect of company’s expected income, earning, business growth, horizontal expansion, cost structure, capital structure, dividends etc. Such a statement is made based on some assumptions about future events which may happen or may not happen.


Board of Directors

ChairmanAlamgir Kabir, FCA

Directors M. A. Kashem

Azim Uddin AhmedDuluma Ahmed

Jusna Ara KashemMd. Akikur Rahman

Rehana RahmanSirat Monira

IndependentDirectors

A.H.M. Moazzem HossainDr. Quazi Mesbahuddin Ahmed

AdvisorZakir Ahmed Khan

Managing Director (CC)M. Kamal Hossain

SEBL at a glance

Board ofDirectors

Zakir Ahmed Khan Advisor

Dr. Quazi Mesbahuddin Ahmed Independent Director

A.H.M. Moazzem Hossain Independent Director

M. A. Kashem Director

From Left Standing

Sirat Monira Director

Jusna Ara Kashem Director

From Left Seating

Alamgir Kabir, FCA Chairman

Azim Uddin Ahmed Director

Md. Akikur Rahman Director

M. Kamal Hossain Managing Director (CC)

From Left Standing

Duluma Ahmed Director

Rehana Rahman Director

From Left Seating



Members

M. A. Kashem

Azim Uddin Ahmed

M. Kamal Hossain

Executive Committee

Committees of the Board of Directors


Audit Committee

ChairmanA.H.M. Moazzem Hossain

Members

Duluma Ahmed

Jusna Ara Kashem

Rehana Rahman

Dr. Quazi Mesbahuddin Ahmed


hjhjhjh

Risk Management Committee


Members

M. A. Kashem

Azim Uddin Ahmed

A.H.M. Moazzem Hossain


Shariah Supervisory Committee

ChairmanProfessor Moulana Mohammad Salah-Uddin (not in the picture)

Members

M. Kamaluddin Chowdhury

Moulana Mohammad Kafiluddin Sarker

Alamgir Kabir, FCA

M. A. Kashem

Azim Uddin Ahmed

M. Kamal Hossain

Mr. Alamgir Kabir, FCA was born on December 28, 1947. He did B.Com (Hons.) from the University of Dhaka and M.Com from Punjab University. He is a professional Chartered Accountant. He has wide experience and profound knowledge in Auditing, Accounting, Banking, Insurance and Financial Institutions both at home and abroad.

Mr. Kabir has been Chairman of the Board of Directors of the Bank since September 29, 2004. He is also the Chairman of the Executive Committee of the Board of Directors and the Risk Management Committee of the Board of Directors. He is the Chairman of its all subsidiary companies. He is also the Director of Asia Insurance Limited and Independent Director of National Life Insurance Co. Limited.

Mr. Kabir started his career in the year 1969 with Rahman Rahman Huq and Co., Chartered Accountants, Member Firm of KPMG, and continued with EWP Associates, Management Consultants, a sister concern of Rahman Rahman Huq and Co. and stayed there until 1979. In 1972, he wasin-charge of Audit Team for the first statutory Audit of Accounts of Bangladesh Bank. He moved to Riyadh, Saudi Arabia in 1979 with assignment in Saudi Accounting Bureau, Chartered Accountants, member firms of Coopers & Lybrand, Moores Rowland International and Inbucon International Ltd., as Management Consultant from 1979 to 1993. He returned to Bangladesh in 1993 with assignment in Bangladesh Securities and Exchange Commission as Member from 1993 to 1996 and also acted as the acting Chairman for a period. During his stay with BSEC, he substantially contributed to the development of the Capital Market of Bangladesh. From 1996 onward, he has been involved in different capacities in formation and development of Bank, Non-Banking Financial Institution, Insurance and Capital Market related Institutions and others.

From 1999 to 2003, Mr. Kabir was the founder Advisor of Export Import Bank of Bangladesh Limited of which his brother Late Shahjahan Kabir was the Founder Chairman. Both the brothers were involved in the formation of EXIM Bank and contributed to its rapid growth.

Mr. Kabir belongs to a family whose members are involved with Banks, Insurances and Financial Institutions. He is member of a number of associations and also associated with many social organizations where he is working very silently for the welfare of the people. Mr. Kabir is a widely traveled person across the globe.

Alamgir Kabir, FCAChairman

Directors’ Profiles and their representationon Board of otherCompanies


Mr. M.A. Kashem was the Founder Chairman of Southeast Bank Limited. Currently, he is a Sponsor Director of the Bank. He is also a member of the Executive Committee and the Risk Management Committee of the Board of Directors of the Bank. He is a member of North South University Trustee Board.

Mr. Kashem is the former President of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI), the apex body of all the business communities of Bangladesh. He was the Chairman of Arbitration Tribunal of FBCCI. He is the past Chairman of the Association of Private Universities of Bangladesh (APUB) which represented all Private Universities of the country. Mr. Kashem was a member of Board of Trustees of Hamdard Laboratories (WAQF) Bangladesh, the leading producer of herbal medicines in the sub-continent for over 17 (Seventeen) years. He is the President of SAHIC Trust (Society for Assistance to Hearing Impaired Children), the only voluntary organization rendering health care assistance of the ear, nose and throat services to destitute and poor patients.

Mr. Kashem is an eminent industrialist, renowned patron of education, distinguished philanthropist and an active social worker. He is the winner of “President Export Trophy Award” for the year 1982-83 & 1983-84 for excellent export performance. Mr. Kashem also got “C.R. Das Gold” Medal for excellent contribution in the Industrial sector in the year 1995. He was awarded the “Highest Tax Prayer-2011” by National Board of Revenue (NBR) for Dhaka City Corporation.

Mr. Kashem was the leader of 20-member FBCCI Trade delegation to Far Eastern Countries in the year 1986. He was also the leader of 5 member Govt. delegations to U.K., U.S.A. and Canada sponsored by UNDP in 1987 and leader of 12 member EPB Govt. of Bangladesh delegations to EEC countries in 1985. As an industrialist, he travelled almost all major cities of the world many times on his own business and also led trade delegations.

As a philanthropist, Mr. Kashem set up a number of Schools, Madrashas, Moshjid, Club etc. and erected free dwelling houses for the poor and destitute people of his locality. He has established a Trust named M. Kashem Trust to foster education to the primary and mid-level students of schools in his locality. The Trust awarded stipends and Scholarships to the meritorious students during the last couple of years. Moreover, a General Hospital (Non-Profit) of 50 Beds in the name of “Tareque Memorial Hospital” is at present in operation at his home district. Mr. Kashem is a member of the Rotary Club of Dhaka West, Kurmitola Golf Club, Gulshan Club Limited, Bangladesh Diabetic Association, Dhaka, Bangladesh Red Crescent Society, National Shooting Club and Shishu Hospital, Chittagong.

M. A. KashemDirector

SEBL at a glance


Mr. Azim Uddin Ahmed was born on June 30, 1940. He is a graduate from the University of Dhaka. As a former Chairman of Southeast Bank Limited, he pushed the Bank forward. Currently, he is a Sponsor Director of the Bank. He is also a member of the Executive Committee and the Risk Management Committee of the Board of Directors of the Bank.

Mr. Azim Uddin Ahmed is a well-known business personality of the country. He is the Chairman of Mutual Food Products Limited, Mutual Milk Products Limited and Mutual Trading Co. Ltd. He is also the partner of Mutual Agro-complex, Mutual Departmental Store and Mutual Distribution and Silonia Agencies. Mr. Azim is the current chairman of the Board of Trustees of North South University and founder life member of North South University Foundation.

Mr. Azim is associated with a number of trade bodies and associations devoted to social work. He is the past President of Rotary Club of Dhaka North and Area Governor of Rotary District. He was the past President of Gulshan Club Ltd. He is the President of Baridhara Society. He served in different capacities in Dhaka Chamber of Commerce and Industry (DCCI), Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) and Bangladesh Indenting Association. He is the current President of Bangladesh Consumer Products Manufacturers and Marketers Association. He represented Bangladesh as a member of Trade Delegation to Europe and many other Govt. and private trade delegations to European, American and Asian countries.

Mr. Azim is also engaged in philanthropic activities. He is the Founder of Azimia Islamia Senior Madrasha, Duluma Azim High School, Fatema Farzana Kindergarten and Purba Silonia Forkania Madrasha. He is a widely traveled person across the globe.

Azim Uddin AhmedDirector


Mrs. Duluma Ahmed was born on July 7, 1947. She hails from a very respectable Muslim family. She is a Sponsor Director of the Bank and a member of the Audit Committee of the Board of Directors of the Bank. She is associated with business activities. She is the Director of Mutual Food Products Limited, Mutual Milk Products Ltd., Mutual Trading Co. Ltd. She is the partner of Mutual Distribution and Silonia Agencies.

Mrs. Duluma Ahmed is also associated with philanthropic activities. She is the Founder of Duluma Azim High School. She is the patron of Azimia Islamia Senior Madrasha and Fatema Farzana Kindergarten School in Chhagalnaiya. She is a member of Gulshan Ladies Community Club and Inner Wheel Club of Dhaka North. As a social worker, she is lavishly contributing to the poor and the needy section of the society. She traveled many countries of the world.

Duluma AhmedDirector

SEBL at a glance


Mrs. Jusna Ara Kashem was born on December 7, 1951. She is a leading industrialist and business leader of the country. She is a Director of Rose Corner (Pvt.) Limited. She hails from a very respectable Muslim family of Rajshahi. She is a Sponsor Director of the Bank and a member of the Audit Committee of the Board of Directors of the Bank.

Mrs. Jusna Ara Kashem is associated with many humanitarian and philanthropic organizations and is the Vice Chairman of M. Kashem Foundation. This Foundation set up a 50 bed Hospital namely “Tareque Memorial Hospital” at Chhagalnaiya, Feni. Mrs. Jusna Ara Kashem is very amiable in nature and a good social worker.

Jusna Ara KashemDirector


Mr. Md. Akikur Rahman was born on February 15, 1945. He is a Sponsor Director of the Bank. He is a successful businessman. He is the Chairman of RAR Investment Limited of Murad Vill, Nower Road, Dorking Surrey, RH43Y, United Kingdom. He is also the Chairman of Dorking Muslim Community Association of 11/15, Hart Road, Doring, Surrey, RH4 1JS, United Kingdom. He is the Managing Director of RAR Holding Limited, 12-25, Prioy Prangan Tower, 19 Kemal Ataturk Avenue, Banani, Dhaka. He is also the Vice Chairman of International Medical College and Hospital, Gusholia, Tongi, Gazipur, Bangladesh. Mr. Akikur Rahman is associated with Southeast Bank Limited since its inception in 1995 as a Sponsor.

Md. Akikur RahmanDirector

SEBL at a glance


Mrs. Rehana Rahman was born on June 06, 1948 in a respectable Muslim family of Khulna. She is a graduate. She is a leading industrialist and a business leader. She is the Managing Director of Bengal Trade Ways Limited and a Director of Drift Packaging Limited. She is a member of the Board of Trustees of North South University Foundation. Formerly, she was the Chairman of North South University Foundation. She was appointed a Sponsor Director of the Bank by the Board of Directors in its 443rd meeting held on August 11, 2014. Her appointment as Director was approved by Bangladesh Bank by Letter dated August 31, 2014. She is a Member of the Audit Committee of the Board of Directors of the Bank. Mrs. Rehana Rahman is a widely traveled person and a social worker.

Rehana RahmanDirector


Mrs. Sirat Monira was born on September 15, 1949. She obtained Master of Social Science (MSS) Degree from the University of Dhaka. She became a Director of Southeast Bank from ‘B’ Group i.e. Public Shareholders. She was also a member of Audit Committee of Board of Directors of the Bank. She is a member of Dhaka Ladies Club. She is a philanthropist. She widely traveled many countries across the globe.

Sirat MoniraDirector

SEBL at a glance


Mr. A.H.M. Moazzem Hossain was born on January 01, 1948. He did B.A(Hons) and MA in Economics from the University of Dhaka. He was appointed Independent Director of the Bank on 24 December, 2012. He took over as the Chairman of the Audit Committee of the Board of Directors of the Bank. He is also a member of the Risk Management Committee of the Board of Directors of the Bank. Mr. Moazzem Hossain started his career as a banker with Habib Bank Limited, Pakistan in 1969. He also worked as Economic Investigator, Ministry of Finance, Government of Pakistan in 1970. Later, he joined the Bangladesh Observer, a leading national daily in 1971 and continued there until 1987.

He also worked in the New Nation, the United News of Bangladesh (UNB) as Executive Editor, The Daily Star as Economic Editor and in The Telegraph as Deputy Editor. Currently, he is the Editor of The Financial Express. He was also associated with Press Institute of Bangladesh and Bangladesh Sangbad Sangstha. He was a member of the board of directors of Janata Bank, a nationalized commercial bank of the country for five years. He attended a number of seminars and workshops abroad mostly at the invitation of the host countries. He traveled many countries across the globe.A. H. M. Moazzem Hossain

Director


Dr. Quazi Mesbahuddin Ahmed was born on January 18, 1948. He holds BA (Hons.) and MA degrees in Economics from the University of Dhaka. He obtained MS Degree in Economics from the James Cook University of North Queensland, Australia. He did Masters as well as a PhD degree in Economics from the University of Illinois at Urbana-Champaign, USA. He was appointed as an Independent Director of the Bank in the 21st Annual General Meeting held on April 11, 2016. He is also a member of the Audit Committee of the Board of Directors of the Bank. Dr. Ahmed started his career at the Research Department of the Central Bank of Erstwhile Pakistan in February, 1969 and moved to the Planning Department of erstwhile East Pakistan in 1971.

He was the Economic Minister at the Bangladesh Embassy in Washington DC for 6 (six) years during 1997-2002. Dr. Ahmed was also the Additional Secretary in Economics Relation Division (ERD) of Ministry of Finance in 2003. He worked as Managing Director of Palli Karma Sahayak Foundation (PKSF) for over Five years from January 2008 to March 2013. Dr. Ahmed was a visiting fellow at the University of Western Australia during 1994. He was an adjunct faculty at the economics department of East West University, Dhaka and a fellow of Palli Karma Sahayak Foundation. Dr. Quazi Mesbahuddin is a widely traveled person across the globe. He represented Bangladesh Government in many international forums. He attended a number of seminars, workshops and meetings relating to aid consortium. He has publications on development planning, macroeconomic performance, use of foreign aid, budgetary accounts, national income accounts etc.

Dr. Quazi Mesbahuddin AhmedDirector

SEBL at a glance


Mr. M. Kamal Hossain was born on January 01, 1958. Mr. Hossain had an exemplary academic background. He did his MSS with distinction in Public Administration from the University of Chittagong in 1982. He started his banking career as a Probationary Officer with National Bank Limited in 1983. He spent 18 (eighteen) years in National Bank Limited holding important positions in different branches and Head Office.

Mr. M. Kamal Hossain has been serving Southeast Bank Limited (SEBL) as Managing Director (Current Charge) since the 29th March 2017. He joined SEBL in July 2003 as Vice President and prior to his current assignment, he served as Additional Managing Director of the Bank. During his years of journey with SEBL, he held the position of Head of Branch (HoB) of a number of Bank’s leading branches including Principal Branch. During his 34 years long banking journey, Mr. Hossain gained extensive banking experience and developed wide range of expertise in almost all areas of commercial banking comprising Import, Export, Credit, General Banking, Human Resources, Accounts etc. Under his visionary leadership, SEBL is expected to evolve as a leading commercial bank of Bangladesh with exemplary business and financial outcomes. Mr. Hossain is an alumnus of the Public Administration Department of the University of Chittagong. He attended numerous seminars, workshops and training programs at home and abroad. He extensively visited the United States of America (USA), United Kingdom (UK), Switzerland, Germany, France, Spain, Australia, Canada, Myanmar, Turkey, Singapore, Malaysia, Thailand, China, Saudi Arabia, Oman, Qatar, India, etc. Mr. Hossain is married to Ms. Manoara Begum and blessed with two sons and one daughter.

M. Kamal HossainManaging Director (Current Charge)


Mr. Zakir Ahmed Khan, Former Finance Secretary to the Government of Bangladesh joined Southeast Bank as Advisor on 26 September, 2010. He carries with him vast experience and expertise gathered from home and abroad.

Mr. Khan did BA (Hons) and Masters in Economics from the University of Dhaka in 1968. He had graduate study in Development Economics and Development Administration as a Hubert Humphrey North-South Fellow at the Colorado State University, USA. He also did Master of Business Administration from Vrijie Universiteit, Brussels, Belgium.

Before joining Government Service in 1970, he briefly worked as a Research Associate in the Bureau of Economic Research and Institute of Education and Research and Lecturer in Economics, University of Dhaka. He also worked as a part time Lecturer in the Department of Finance, University of Dhaka. During his 44 years of public service Mr. Khan held various senior level positions in the Ministries of Finance, Commerce, Establishment, Energy, Civil Aviation and Tourism, Cabinet Division and Bangladesh Audit and Accounts Department. He served as Finance Secretary and Secretary, Internal Resources Division and Chairman, National Board of Revenue for five years. He also briefly worked for a number of UN Agencies. Prior to his retirement in early 2009, he served as Alternate Executive Director of the World Bank for three and a half years.

He contributed a number of articles on public policy and public sector financial management to a number of national and international journals. He also made several key note presentations on public sector reforms and financial management in seminars and workshops at home and abroad.

Zakir Ahmed KhanAdvisor

SEBL at a glance


Directors’ ResponsibilityStatement

Work-Planning and Strategic Management

The Board determines Bank’s objectives and goals and chalks out strategies and work-plans on annual basis. It specially engages itself in the affairs of making strategies consistent with the determined objectives and goals and in the issues relating to structural change and reformation for enhancement of institutional efficiency and other relevant policy matters. It analyzes and monitors the implementation of its decision on quarterly basis.

The Board gives its analytical review as incorporated in the Annual Report regarding the success or failure in achieving the business and other targets as set out in its annual work-plan and apprises the shareholders of its opinions and recommendations on future plans and strategies. It sets the Key Performance Indicators (KPIs) for the CEO & Officers belonging to two tiers below the CEO and evaluates them from time to time.

Credit and Risk Management

The policies, strategies, procedures etc. in respect of appraisal of loan/investment proposal, sanction, disbursement, recovery, rescheduling and write-off of loans are made with the Board’s approval under the purview of the existing laws, rules and regulations. The Board specifically delegates the power of sanction of loan/investment and such delegations are suitably made amongst the CEO and his subordinate executives as far as desirable for efficient business operations. No Director interferes, directly or indirectly, in the process of loan approval.

The Board frames policies for Risk Management and ensures their implementation. It monitors compliance at quarterly intervals through reviews of the reports of the Risk Management Team. The Board monitors the compliance of the guidelines of Bangladesh Bank regarding Key Risk Management.

Internal Control Management

The Board remains vigilant on the internal control system of the Bank in order to attain and maintain satisfactory qualitative standard of its loan/investment portfolio. The Board establishes internal control system in such a way that the internal audit process can be conducted independently by the concerned department. It reviews the reports submitted by its Committees especially regarding compliance with recommendations made in Internal and External Audit Reports and the Bangladesh Bank Inspection Reports as well as reports on management of risks.

Human Resources Management and Development

Policies relating to recruitment, promotion, transfer, disciplinary action and punitive measures, human resource development etc. and service rules are framed with the approval of the Board. The Chairman or any Director in no way involves himself or interferes into or exercises influence over any administrative affairs including recruitment, promotion, transfer and disciplinary measures as conducted under the set service rules. No member of the Board of Directors is included in the selection committee for recruitment and promotion to different levels. Recruitment, promotion, transfer and punishment of the officers immediate two tiers below the CEO, however, rest upon the Board. Such recruitment and promotion are done complying with the service rules i.e., policies for recruitment and promotion.

The Board focuses its special attention on the development of skills of Bank’s staff in different fields of its business activities including prudent appraisal of loan/investment proposals, the adoption of modern electronic and information technologies and the introduction of effective Management Information System (MIS). The Board gets these programs incorporated in its annual work plan.

Directors’ Responsibility Statement is outlined below in compliance with Bangladesh Bank BRPD Circular No. 11 dated 27 October 2013:


The Board imposes Code of Ethics for every tier of employees and they follow it properly. It promotes healthy code of conduct in the Bank for developing a compliant banking operation.

Financial Management

The annual budget and the statutory financial statements are finalized with the approval of the Board. It reviews and monitors monthly position of Bank’s income, expenditure, liquidity, non-performing asset, capital base and capital adequacy, maintenance of loan loss provision and steps taken for recovery of defaulted loans including legal measures.

The Board frames the policies and procedures for Bank’s purchase and procurement activities and accordingly approves the delegation of power for making such expenditures. The maximum possible delegation of such power of expenditures vests on the CEO and his subordinates. The decision on matters relating to infrastructure development and purchase of land, building, vehicles etc. for the purpose of Bank’s business are, however, adopted with the approval of the Board.

The Board reviews the work of the Asset-Liability Committee (ALCO) on regular basis. The Committee is working according to Bangladesh Bank guidelines.

Appointment of Chief Executive Officer (CEO)

One of the major responsibilities of the Board of Directors is to appoint an honest, efficient, experienced and suitable CEO or Managing Director. The appointment of the CEO is made with the approval of the Bangladesh Bank.

Other Responsibilities of the Board

The Board follows and complies with all the responsibilities assigned to it by Bangladesh Bank from time to time.

On behalf of the Board of Directors,


SEBL at a glance


Review from the office of the Group Chairman

Alamgir Kabir, FCAGroup Chairman

Bismillahir Rahmanir Rahim

Dear Shareholders,

I warmly welcome you to the 22nd Annual General Meeting of the respected shareholders of the Bank. I sincerely thank you for your continued interest, support and patronage of Southeast Bank Limited over the years. I have minutely reviewed the operational performance of the Bank for the year 2016 to chart out our plans and programs for the next year. Based on it, I am privileged to place before you a report about the Bank for the year 2016 with an outlook for the years ahead.



01. Review of Operational Result

Being backed by your patronage, I am pleased to announce another set of record results in 2016. The results could be achieved through our strategy of creating and developing leading positions in our chosen areas of operations. And success is not our destination, it is our journey.

Bank’s total asset increased by 11.92 percent in line with the Bank’s policy of maintaining comfortable liquidity. Liquid assets to total assets stood at 9.30 percent at the end of 2016. During the year, adequate focus was aggressively put on liability management. It resulted in significant reduction of cost of fund (COF) and it reached 7.39 percent at year end. In the deposit mix of the Bank, the cost-free and low cost deposit reached 35.46 percent from 31.86 percent in 2015. The total deposit of the Bank including Islamic Banking Deposits increased by 9.29 percent over that of last year. It led to a healthy Loan to Deposit Ratio of 83.43 percent. The net interest margin of the Bank reached to 3.77 percent at the end of 2016. The Bank was able to increase Net Interest Income to BDT 4,207.21 million from BDT 3138.46 million in 2015. Fee and other income during the year 2016 had a good growth of 7.81 percent over those of 2015. The good contribution of Fee and other income to Bank’s total income is a clear testimony of Bank’s strength. The Bank’s operating income increased to BDT 12,852.45 million in 2016 from BDT11,604.39 million in 2015.

02. Evaluation of the Performance of the Bank Management

The management of the Bank was proactive and prescient in 2016 to handle Bank’s day-to-day affairs effectively in an environment of acute competition amongst banks and financial institutions. The demand for credit was low in the market in the year. The average lending rate witnessed a downward trend. Resultantly, bank’s dealing spread got squeezed and impacted bank’s profitability. The efficiency of any service-oriented organization is primarily determined by the quality and character of the people working within it. The Board of Directors of the Bank places top-most importance to recruit, develop and retain employees having required professional excellence and high level of integrity.

In such a situation, the whole management team performed appreciably to produce good operating result in the year under review under the leadership of the Managing Director. His team members deserve your blessings and support for continuity of their best effort to bring in more qualitative changes in the Bank.

03. Liquidity Management of the Bank

During the year 2016, the entire banking sector was awash with liquidity in the wake of poor demand for borrowing

of fund. The private sector credit growth was 15.55 percent. Inter-bank call rate hovered around 2.75 percent to 3.00 percent. On the contrary, the deposit of our bank grew by 9.29 percent during the year. Consequently, the Bank’s Loan to Deposit Ratio stood at 83.43 percent. Since there was less demand for new investment, the year 2016 ended up with a surplus investable fund for BDT 352,990.00 million. Our Bank did not have shortfall in Cash Reserve Requirement in 2016. The Bank’s fund was prudently managed by Bank’s Treasury Unit for maximum profit generation and there had not been any failure in complying with regulatory requirements in this respect.

04. Risk Management

The Bank defines its overall risk strategy. We determine the risk exposure on the basis of available capital cushion. Our risk management activities require that the risk is identified, measured, aggregated and managed. Accordingly, our risk policies aim to analyze and monitor the risk within appropriate limits. We allocate sufficient resource to monitor and control core risk areas.

05. Initiative to upgrade Business Continuity System

Southeast Bank has a Business Continuity System and Disaster Recovery Plan in place to deal with a number of crises. These include natural disaster, such as, earthquake and floods, system failures due to Cyber-Terror incidents and other crises. The Bank is also working to increase its capability to cope with crises through training and educating employees. To have our customers use our services with a sense of safety, we are continuing to enhance the sophistication of our Business Continuity System.

06. Our Response to Capital to Risk-Weighted Assets Ratio (CRAR)

Capital adequacy regulations are a framework aimed at securing the soundness of the Bank through enhancement of capital. This framework has three dimensions; namely, minimum capital requirement, self assessment and supervisory reviews, and a market discipline enhanced through information disclosure.

To maintain sufficient capital for the Bank in line with the aforesaid framework, the Bank has established the basic policy for its capital management. The policy sets forth (1) taking initiatives for maintaining sufficient level of capital, (2) taking proper measures for capital assessment, and (3) taking steps for the accurate calculation of capital adequacy ratio. The Bank is gearing efforts to enhance the level of risk management of the Bank.


We try to maintain a strong capital base to support the on-going development of business of the Bank. We prudently maintain a nice balance between the different components of capital. Bank’s total capital reached BDT 34,056.28 million as on 31 December, 2016.

07. Our Technology Use Platform

Information Technology governance is an area that has been effectively addressed and is being upgraded for total technology and control system cohesion. Most people use the surface of the technology. We take for granted the power and availability of unfathomable tools and technology. We look for creative ways to deeply leverage existing infrastructure and platforms. We use common technology in uncommon ways. As the Bank grows, we shall require to procure and put in place advanced versions of our selected technology to cope with the emerging needs of the Bank and its customers. We believe investment in technology facilitates access to untapped resources and improve competitive edge. Our people are also continuously learning use of latest technology technique and financial knowledge to help upgrade the Bank.

08. Acclimatizing new employees

New employees in our Bank need not spend weeks and months finding their feat in the Bank. We introduce them to their work-family so that they know co-workers and feel comfortable reaching out for resource. This acclimatization contributes to their building confidence, feeling supported, becoming productive and realizing their value sooner. We believe in training and equipping them, not just engaging them. The new entrants do not just add numbers, they add quality and value. They join to fill skill gap in the organization and to reach new heights of professional excellence. 9. Talent Management and Team Work

Our talent management is smart. We promote individuals’ brilliance to increase the value of the skills available to them. No one excels at everything, but everyone excels at something. We facilitate greater engagement and reap all the competitive advantages that a productive, engaged and skillful workforce provides. Ultimately success is reliant upon skills of multiple individuals. There is no ‘I’ in our team. Our team work divides the task and multiples the success.

10. Our Corporate Governance

Our Corporate Governance is the framework of rules and practices by which the Board of Directors of the Bank ensures accountability, fairness and transparency

in the Bank’s relationship with its all stakeholders namely, shareholders, business associates, customers, management, employees, government, regulatory bodies and the community. It encompasses both explicit and implicit contracts between the Bank and the stakeholders for (i) distribution of responsibilities, rights and rewards, (ii) procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges and roles, and (iii) procedure for proper supervision, control, and information flows to serve a system of checks and balances. This framework is periodically reviewed by the Board and necessary changes and revisions are made.

The Board of Directors exerts governance over all employees including the Managing Director. It makes sure that the business operations of the Bank adhere to all applicable rules of corporate governance and regulatory requirements. This governance culture is included in its own customer values, policies and laws relating to its employees from the highest to the lowest level. The intent is to increase the accountability of the company and avoid any deviation before they occur. We weed out and eliminate problems and issues that bar effective practice of corporate governance in the Bank. The Board’s supervision results in a clear and more ethical organization and makes the Bank appealing to the customers and investors. So, our themes of corporate governance are accountability, fairness, transparency, compliance, risk management, etc.

11. Bank’s Cyber Security

Recently the banking industry experienced serious breaches of cyber security. Such incidents heightened fears for more such cyber attacks. Banks in Bangladesh, as elsewhere on the globe, are not immune from the criminals’ target. The attacks become easy to be perpetrated if an insider can be used to get the details needed to prepare the attacks. In the face of such a situation and to ward off such attacks through hacking and tracking by use of technology, we have emphasized the need for keeping in place appropriate control system and risk assessment from time to time. Special monitoring has been put in place in the area of SWIFT messaging system to prevent fraudulent attempts of transferring money. We have also emphasized on expert guidance to protect our intra-connections and effectuating payments. We are upgrading our ICT security and risk management policies to mitigate IT operational risks. 12. Information about Subsidiary Companies as on

31st December, 2016

Southeast Bank has the following Foundation and Subsidiary Companies to carry on related activities and business operations at home and abroad.

SEBL at a glance


13. Issuance of Second Subordinated Bond

Our Policy is to move forward with initiatives to enhance the level of capital requirement of the Bank. Accordingly, the Board of Directors of the Bank in its 486th meeting held on April 11, 2016 approved Bank’s issuance of second Subordinated Bond for BDT 5.00 billion. After regulatory clearance, we got the fund in our books of accounts on October 27, 2016. It significantly increased Bank’s Tier-II Capital in 2016.

The first Subordinated Bond for BDT 3.00 billion was issued in 2014.

14. Code of Conduct for Directors

The Board of Directors of the Bank in its 410th meeting held on December 24, 2012, among other things, approved the Code of Conduct for the Directors of the Bank. The Directors are sincere in abiding by the Code of Conduct. There had not been any breach of the Code of Conduct by any Director of the Bank.

15. Loans to Directors

No loan excepting Credit Card limit was allowed to any Director of the Bank in the year 2016.

16. Awards and Accolades

Southeast Bank greatly weighs good corporate governance and operational excellence. These are our fundamental requirements in our aspiration to remain a leading banking institution in our country. We do have strategy, intent and ability to take the Bank forward. Our Annual Report contains enough disclosures. We also publish financial statements complying with all applicable Accounting Standards. In recognition, The Institute of Chartered Accountants of Bangladesh (ICAB) conferred upon us the Certificate of Merit for our published accounts and reports for a number of years including for the years

2012, 2013, 2014 and 2015 consecutively. The Institute of Cost and Management Accountants of Bangladesh awarded our Bank First Position as the Best Corporate in the Banking Sector (Private Commercial Bank-Traditional Operation) for the Bank’s published accounts and reports for the year 2015. Recognitions encourage us to make further qualitive and quantitative improvement in the Bank.

17. Integrity: a condition for our business sustainability

Profit generation is an essential pre-requisite for ensuring our business success and growth in the Bank. It is not sufficient per se. Profit must be generated with the highest degree of honesty and integrity for promotion of Bank’s reputation. We emphasize the entrepreneurial ability of our employees. To do that, we do not simply rely on an effective governance mechanism but also on a set of shared values to which our colleagues can relate in their working life. Fairness, respect, freedom, transparency, reciprocity, harmony, team spirit, courtesy, commitment, service excellence, enthusiasm for work and business ethics are essential for us to transform profit into value in a sustainable manner.

We provide useful behavioral framework for resolution of dilemma that our employees individually encounter while doing their everyday activities. We help them make a responsible and consistent professional decision selflessly.

18. Corporate Social Responsibility (CSR) Initiatives

Every business should give something back to the community in which it operates. As a Bank born and bred in Bangladesh, we have also a deep commitment to the Country’s economic development and preservation of the environment. We believe our conscious choice of protecting the environment today will lead to a better and sustainable tomorrow. Our CSR goes far beyond charity. We help achieve lasting changes in the lives of

Sl #Name of the Foundation

/ SubsidiaryCountry of

incorporationBank’s

OwnershipYear of

openingPurpose

1. Southeast Bank Foundation Bangladesh - 2002To carry on charitable activities in an organized and sustainable manner.

2.Southeast Bank Capital Services Limited

Bangladesh 99.816909% 2010To carry on merchant banking operations.

3.Southeast Financial Services (UK) Limited

United Kingdom 100% 2011To collect remittance from Bangladeshi expatriates for their beneficiaries in Bangladesh.

4.Southeast Financial Services (Australia) Pty Limited

Australia 100% 2013To collect remittance from Bangladeshi expatriates for their beneficiaries in Bangladesh.

5.Southeast Exchange Company (South Africa) Pty Limited

South Africa 100% 2015To collect remittance from Bangladeshi expatriates for their beneficiaries in Bangladesh.


people. We are pledge-bound to carry out our business of banking in an economically, environmentally and socially responsible way. We support initiatives of individuals or groups to protect wildlife habitat, curb effect of climate change and improve conditions of communities. Our CSR engagements are steadily increasing in depth and diversity both in expenditures, financial inclusion drives, greening the internal practices and processes, and in lending to environmentally benign projects. We created Southeast Bank Foundation to carry out CSR related activities in a most organized way. In the year 2016, our CSR related expenditure totaled BDT 135.85 million.

19. Keynotes of our Environmental Policy

We get business sustenance and support from the community and environment we operate in. Logically, we want to give back something in return to them. The keynotes of our environmental policy are given below:

We comply with environment-related laws and regulations.

We are environment-friendly in our core business practices.

We apply energy saving devices at office.

We promote activities for environment protection.

We operate in an environmentally responsible manner.

We make public disclosure about our environmental policy.

We confide in the society and the community.

We lend our support to community development.

We encourage our employee for efforts to protect environment in their private life.

We support initiatives of individuals and institutions in community development.

We work in harmony with the society for mutual advantage.

We ensure that no harm is caused to the environment as a result of our operations.

20. Status of Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) Initiatives of the Bank

Money laundering and financing of terrorism have emerged as major threats to peace and growth of economies across the globe. To combat the criminal activities in Bangladesh, there are sufficient laws in place. Money Laundering Prevention Act – 2012 and Anti-Terrorism Act-2009 were enacted by the country’s Parliament. These laws were also amended. Apart from the above, Bangladesh Financial Intelligence Unit (BFIU) prescribes guidelines for prevention of money laundering and combating financing of terrorism.

Southeast Bank complies with all the provisions of law and the regulations of the regulatory bodies. We are pledge-bound not to allow our banking channel to be used by any criminal, terrorist, terrorist group or network of terrorists to carry out any subversive activities in the country or elsewhere on the globe. There is appropriate structure in place at Bank’s Head Office and the branches to deal with the menace. The Bank has also developed and implemented AML and CFT compliance policy. Under the policy, customer due diligence is being done, transactions of clients are being monitored, reporting to regulatory authority are being made, sanction lists are being screened while allowing any transaction, and utmost care is being exercised in case of handling walk-in and unknown customers. Self-assessment and independent testing are being done to evaluate our compliance status in respect of AML and CFT. We do not put any officer in operation without giving him training on AML and CFT. The policy and procedure are periodically reviewed and updated to accommodate new and emerging issues.

21. Public Disclosure

The Bank’s disclosure controls and procedures are designed to ensure that information required to be disclosed are disclosed timely and with full accuracy.

22. Customers-Our Partners

Our customers do not just need a Bank. They need a partner which we are. As a partner, we provide them financial flexibility and speak the same language. With our profound understanding of the business and missions of our customers and the challenges being faced by them, we focus on delivering highly efficient products and services. We always work for new and better ways to serve them.

23. Outlook

Southeast Bank began its journey in 1995 and held excellent position consecutively over the years. It earned good profit and declared dividend at encouraging rates to the shareholders. Due to our long presence and successful journey over the last 22nd years, we have been able to deepen our relationship with customers. We had another good year in 2016 and expect reasonably that the momentum will continue in 2017 and beyond. Our continuous success over the years laid foundation for tangible results in the upcoming years.

Our mistakes of the past have been examined, learned from and then left behind. We have shifted our focus on the future and made sure our every employee re-engages himself in our journey into the future.

We are proud of our achievement, mindful of our weaknesses and careful of the future. I tend to be optimistic about success in the next year. Our aim is for each of our business to be market leader in its chosen areas through

SEBL at a glance


the backing of superior quality customer service and salesmanship. More intelligent ways of doing business is expected to enable us to leapfrog old methods. The best way for us to grow is to innovate and to be better than the peers and others racing with us in competition.

Our products and services are best in class. We deliver excellence. We strive for continuous improvement. We plan to hold our discipline and continue to strengthen the infrastructure, staff, officers, brand, information technology and customer relationship. We will continue to capitalize on our strength, remove weaknesses, make use of opportunities and mitigate threats to reach new heights of operational excellence. The Bank’s Board looks forward to making further progress in the upcoming years.

Bangladesh economy is growing from strength to strength. It is well-balanced and in good shape. Bangladesh has also improved its competitiveness for the fourth year according to Global Competitiveness Report. It has moved up one notch to 106 out of 138 countries on the Global Competitiveness Index for 2016-2017 prepared by Global Economic Forum. It is positive that Bangladesh has increased its score and is improving gradually. Besides, extreme poverty in Bangladesh declined further to 12.9% in the fiscal 2015-2016 according to World Bank. The latest official statistics put the country’s economic growth at 7.11% in the last fiscal. The growth of national economy denotes added business for banking industry.

Based on the state and trend of Bangladesh economy, we look to the future with energy and enthusiasm. However, we will continue to place high-value importance on your support and encouragement for our business success.

24. Acknowledgement

I am thankful to the Almighty Allah for the business success of the Bank in 2016 amid competitive and unfavorable business environment. I also take the opportunity to thank the Directors of the Bank for their support and input during the year under review. Their collective wisdom substantially contributed to our success. I also thank our Management and the members of the staff under the leadership of the Managing Director for their loyalty, support and relentless efforts for Bank’s qualitative and quantitative improvements. I respect their zeal to work hard to reach newer heights of success. I conclude by conveying my very sincere and special thanks to our respected shareholders, valued customers, patrons, well-

wishers, the Government of the People’s Republic of Bangladesh, Bangladesh Bank, Registrar of Joint Stock Companies and Firms, the Bangladesh Securities and Exchange Commission, the Dhaka Stock Exchange Limited, the Chittagong Stock Exchange Limited and all others concerned who have supported us and extended to us their valued co-operation. We look forward to their continued support, co-operation and guidance that are our constant source of encouragement in the days ahead. We reiterate with firm commitment that we will remain disciplined, compliant and result-oriented in all our endeavors and in return seek their continued co-operation.

I also thank the respected shareholders for attending the 22nd Annual General Meeting and contributing meaningfully to the deliberations and adoption of resolutions against the agenda.

May the Almighty Allah in His infinite mercy bestow upon us His compassion and blessings.

Allah Hafiz

With warm regards,

Sincerely yours,

Alamgir Kabir, FCAGroup Chairman


Senior Management Team

From Left

Shahidur Rahman Khan Senior Executive Vice President

Pritish Kumar Sarker Senior Executive Vice President

Muhammad Shahjahan Additional Managing Director

S. M. Mainuddin Chowdhury Additional Managing Director

M. Kamal Hossain Managing Director (Current Charge)

Mohammed Gofran Additional Managing Director

A.K.M Nurul Alam Additional Managing Director

Haradhan Banik Senior Executive Vice President


Names of the Committees andtheir MembersManagement Committee (MANCOM)

Sl. No. Name and Designation Position in MANCOM

1 M. Kamal Hossain, Managing Director (Current Charge) Chairman

2 Mohammed Gofran, AMD Member

3 S. M. Mainuddin Chowdhury, AMD Member

4 Muhammad Shahjahan, AMD Member

5 A.K.M Nurul Alam, AMD Member

6 Pritish Kumar Sarker, SEVP Member

7 Haradhan Banik, SEVP Member

8 Shahidur Rahman Khan, SEVP Member

9 Fahmida Chowdhury, EVP Member

10 Md. Shahjahan Sarker, EVP Member

11 Md. Mosharraf Hossain, SVP Member

12 Lt Col Md Abdur Rafique, psc (Retd), SVP Member

13 Shamim Ara Khanom, SVP Member

14 Md. Abul Kalam Howlader, SVP Member

15 Md. Amir Hossain Bhuian, SVP Member

16 Md. Abdus Sabur Khan, SVP Member

17 Khandaker Khaled Hassan, SVP Member

18 Mostofa Meer Khaled Omar, VP Member

19 Md. Minhazur Rahman, VP Member

20 A.K.M. Monirul Islam, VP Member

21 Mohammed Kamruzzaman, VP Member

22 Lt Cdr (Retd) Wares-Ul-Matin, VP Member

23 Abu Sabed Sayfullah, SAVP Member

24 Mohammad Aminul Haque, FCA, ACMA (CIMA), CGMA, SAVP Member

25 Md. Jahangir Kabir, SAVP Member

26 Navera Alam, SAVP Member

27 Mohammad Tanveer Rahman, AVP Member


Asset Liability Committee (ALCO)

Sl. No. Name and Designation Position in ALCO

1 M. Kamal Hossain, Managing Director (Current Charge) Chairman

2 Mohammed Gofran, AMD Member


4 Muhammad Shahjahan, AMD Member




8 Md. Jahangir Kabir, SAVP Member Secretary

Central Compliance Unit (CCU)

Sl. No. Name and Designation Position in CCU

1 Muhammad Shahjahan, AMD CAMLCO

2 Haradhan Banik, SEVP Deputy CAMLCO




6 Md. Amir Hossain Bhuian, SVP Member



9 Md. Feroj Hoshen, SAVP Member

10 Hafizur Rahman, SO Member

SEBL at a glance


Committee for Evaluation of the Effectiveness of Management Reporting System

Sl. No. Name and Designation

Position in CEEM

1 S. M. Mainuddin Chowdhury, AMD Chairman




5 Md Jahangir Kabir, SAVP Member

6Mohammad Aminul Haque, FCA, ACMA (CIMA), CGMA, SAVP

Member Secretary

Integrity Committee


Position in the

Committee

1 Muhammad Shahjahan, AMD Chairman

2 Haradhan Banik, SEVP Focal Point




Member

6 Md. Feroj Hoshen, SAVP Member

Head Office Credit Review Committee (HOCRC-1)

Sl. No. Name and Designation Position in

HOCRC-1

1 Mohammed Gofran, AMD Chairman


3 Shaidur Rahman Khan, SEVP Member Secretary

4 Mostofa Meer Khaled Omar, VP Member

Head Office Credit Review Committee (HOCRC-2)


Position in HOCRC-2

1 Pritish Kumar Sarker, SEVP Chairman

2 Shaidur Rahman Khan, SEVP Member

3 Mostofa Meer Khaled Omar, VPMember Secretary

Tender Committee


Position in PC

1 Mohammed Gofran, AMD Chairman



4 Lt Cdr (Retd) Wares-Ul- Matin, VP Member



Member

7 A.K.M. Moshiour Rahman, SPOMember Secretary

Procurement Committee

Sl. No.

Name and DesignationPosition

in PC

1M. Kamal Hossain, Managing Director (Current Charge)

Chairman

2 S. M Mainuddin Chowdhury, AMD Member



5 Lt Cdr (Retd) Wares-Ul- Matin, VP Member

6Mohammad Tanveer Rahman, SAVP

Member

7 A.K.M. Moshiour Rahman, SPOMember Secretary


Supervisors of the Branches


1 Mohammed Gofran, AMD

2 S.M. Mainuddin Chowdhury, AMD

3 Muhammad Shahjahan, AMD

4 Pritish Kumar Sarker, SEVP

5 Haradhan Banik, SEVP

6 Shaidur Rahman Khan, SEVP

7 Md. Shahjahan Sarker, EVP

8 Md. Mosharraf Hossain, SVP

9 Shamim Ara Khanom, SVP

10 Md. Amir Hossain Bhuian, SVP

11 Mohammad Omar Faruque, VP

12 Mostofa Meer Khaled Omar, VP

13 Md. Minhazur Rahman, VP

14 Md. Shaheen Miah, SAVP


16 Md. Jahangir Kabir, SAVP

17 Abu Sabed Sayfullah, SAVP

18 Muhammad Wahidur Rahman Patwary, SAVP

19 Kazi Abu Taher, SAVP

20 Syed Abu Naser, SAVP

21 Mohammed Showkat Hayat Khan, SAVP

22 Mohammad Kamruzzaman, SAVP

The Managing Director chairs the meeting of the Supervisors.

IT Steering Committee


Position in the

Committee

1 S. M. Mainuddin Chowdhury, AMD Chairman


3 Haradhan Banik, SEVP Member


5 Khandaker Khaled Hassan, SVPMember Secretary

6 Mohammed Kamruzzaman, VP Member

7 Kazi Md. Ehasanuzzaman VP Member


9 Md. Jahangir Kabir SAVP Member

10 F.M. Iqbal Bahar Khan, AVP Member

Taskforce for Monitoring and Recovery of Rescheduled and Restructured Loans


Position in the

Committee

1 Mohammed Gofran, AMDHead of

Taskforce




5 Mostafa Meer Khaled Omar, VP Member

6 Md. Shaheen Miah, SAVP Member

7 Head of Respective Branch Member

8 Md. Minhazur Rahman, VPMember Secretary

Taskforce for Recovery of Written-Off Loans


Position in the

Committee

1 S.M. Mainuddin Chowdhury, AMD Head of Taskforce


3Lt Col Md Abdur Rafique, psc (Retd), SVP

Member


5 One Representative of ICCD Member

6 Md. Mosharraf Hossain, SVP Member Secretary

7 Md. Akhtaruzzaman, SPO Member

Taskforce for Recovery of Classified Loans and Advances


Position in the

Committee

1 Pritish Kumar Sarker, SEVPHead of

Taskforce





6 Md. Akhtaruzzaman, SPOMember Secretary

SEBL at a glance


Corporate Governance Disclosure Checklist

ManagementCommittee ofthe Bank(MANCOM)



Managing Director’s Review

M. Kamal Hossain Managing Director(Current Charge)

At the outset, I would like to express my immense gratitude to Almighty Allah that Southeast Bank performed remarkably well during 2016 and positioned itself admirably in the industry, despite a challenging environment for the banking industry i.e. lower interest margins, weak credit growth, non-performing loans and surplus liquidity etc. Surmounting these challenges, we are successfully steering ahead with great resilience. Southeast Bank’s stability and growth in the industry is a reflection of its dynamic structure, innovative products, prudent policies, persistent endeavor to render quality services to its valuable clients and its commitment to strictly comply with regulatory norms and requirements.



Economic Roundup

In the backdrop of improved law and order situation, stable political environment in the country, better management of energy resources and declining trend in global commodity prices, the year 2016 witnessed marked improvement in key macroeconomic indicators which was reflected through economic growth and rapid infrastructure development. The successful implementation of mega projects like Padma Bridge, Rooppur Nuclear Power Plant, number of giant Flyovers, Metro Rail, Express Way etc. would usher in an era of development and prosperity for the country.

Business and Financial Achievements

The financial results of the Bank reflect healthy growth in quality assets, earnings and shareholders’ equity. In spite of the challenges posed by changing interest rate environment, we managed to achieve exceptional results with consistent growth in profitability. The growth was enabled by a strategy focusing on trimming down the cost of deposits through procuring low-cost deposits coupled with a strong risk management framework. Against this backdrop, I would like to give an overview of the Bank’s performance in important parameters as below:

Total deposits grew by BDT 19,542.34 million which is 9.29 percent more than that of last year. To provide a strong footing for managing the cost of deposits, bank consciously focused on procuring retail deposits and in the process, high cost bulk deposits (FDRs) were reduced proportionately. Therefore, low-cost deposit grew by 21.62 percent and total low-cost deposits stood at 35.46 percent of total deposits as on December 31, 2016.

Total asset base of the bank amounted to BDT 291,798.01 million recording an impressive growth of 11.92 percent; while loans and advances increased by 13.61 percent and stood at BDT 191,865.59 million.

The SME portfolio of the Bank increased by 19.62 percent to BDT 41,287.20 million.

In 2016 total Import business grew by 12.99 percent to BDT 171,531.73 million and Export business by 15.96 percent to BDT 146,606.09 million.

During the year, non-funded income contributed by business-related fees and commissions increased by 5.20 percent over that of last year.

Operating profit of the bank grew by BDT 468.95 million and reached BDT 8,503.22 million which shows 5.84 percent growth over that of last year.

Earnings per share and Book Value per share were at BDT 2.66 and BDT 10.00 respectively. Return on Equity was at 9.06 percent at the end of 2016.

Bank’s financial soundness is reflected in strong CRAR (Capital to Risk weighted Assets Ratio) which was 12.15 percent according to Basel III as on December 31, 2016.

The cost to income ratio stood only at 33.84 percent which is far below the industry average and it is a testimony to the Bank’s commitment to achieving operational controls and efficiencies.

Risk Management

We continue to prudently manage risk throughout the bank while maintaining a strong risk management culture. To achieve the desired objective, Southeast Bank has put in place an efficient Risk Management System to manage risk within acceptable levels and ensure that fresh lending decisions are not only commercially viable but carry manageable credit risk. The objective of this architecture is to ensure that the asset quality is sustained against economic shocks and sufficient capital buffers are available to withstand them.

Service Excellence

Customer centricity is instilled in all our policies, systems and processes. We have devised a service excellence guideline to ensure superior customer service to our clients. We provide a wide array of products and services to individuals, companies and institutional investors, with a convenience to transact, save and borrow in the best of ways possible. It is our ongoing endeavor to understand the unique requirements of our customers and to cater to these requirements to the best of our abilities. With this end in view, we are continuously collecting feedback from the customers to improve our services and exceed the expectations of our customers. We have also successfully introduced a ‘Customer Charter’ in line with the guidelines of the Bangladesh Bank.

Initiative for Financial Inclusion

The Bank has been chasing a very well thought out expansion plan with a view to taking its brand image to every corner of the country and ensure availability of state of the art banking products and services to its valued clients. Southeast Bank opened six (6) new branches and installed eleven (11) new ATM booths in different locations across the country reaching the total number of branches at one hundred twenty eight (128) and number of ATM booths at one hundred seventeen (117) as on December 31, 2016. Bank’s presence in the unbanked areas of the


country has brought a breakthrough in accelerating economic activities in remote areas. It displays our commitment to the national agenda of financial inclusion. The bank has also established three (03) exchange houses in Australia, United Kingdom and South Africa basically for expediting inward remittance flow for the country.

Capital Base

Southeast Bank has built up a strong balance sheet that provides a platform to accelerate business growth. It is a highly capitalized Bank. We maintained capital significantly above the requirement of the regulator and our Tier 1 common equity capital ratio today exceeds the minimum requirement of Basel-III standards. As such the CRAR of the Bank stood at 12.15 percent as on December 31, 2016 which is well above the regulatory requirement of 10.625 percent.

Impaired Asset Management

For the banking sector, 2016 had been a turbulent one due to worsening asset quality and its implication on the credit risk profile of banks. Deterioration in asset quality has an adverse impact on profitability and capital requirement for Basel III compliance. While the recovery of non-performing loans remained a corner stone of our strategy, the Bank did not shy away from new profitable lending opportunities to strengthen the asset portfolio. With all the concerted and coordinated efforts, the Bank could restrict its non-performing loans to 4.89 percent.

Human Capital

Our people are undoubtedly the core asset of our bank and we acknowledge their hard work and dedication in elevating our bank to where it is today. We are always conscious of the importance of retaining and attracting the best talents. Our human resource management policies are designed on the principles of care, capacity building, knowledge sharing and fairness. Besides hiring best resource on purely merit basis, performance of every staff member is evaluated on a uniform yardstick to help promoting culture of merit and fair play in the organization. Our Training Institute is relentlessly working and implementing training programs based on training need assessment of each employee.

Leveraging Technology

Technological leadership is an absolute necessity for the delivery of value to all our stakeholders amidst rapidly changing life styles and paradigms. Southeast Bank is committed to place cutting edge technology at the forefront of our delivery channels and operations. It would also create a need to move forward with advanced technology as well as mitigation of cyber risks.

In the process recently, southeast Bank has introduced web based live chat solution for the convenience of its customers in addition to 24X7 call center.

Looking Ahead

As we think about what the future holds, with the team we have and the institution we have built, there is a good reason to be optimistic and excited about what lies ahead. The year 2017 is expected to be the year of growth as major macro-economic fundamentals remained fairly positive during 2016 which will continue to contribute to our economic growth and development. Various development and policy initiatives taken by the Government are expected to drive the economy to a higher growth trajectory in the years ahead. Southeast Bank is well positioned to benefit from the transformation that is taking place in the banking landscape with low interest rates and intense pressure on margins and volumes on one hand and technology driven exciting developments in new products and services on the other.

Our Strategies for 2017

While celebrating the success of the Bank, the Management also remains vigilant of the future challenges. In order to maintaining the current growth trends and capturing due share in a highly competitive operating environment, it is required to continuously revamp its strategies and keep adding on latest products and services by ensuring appropriate monitoring system to stay a step ahead of its competitors. Among others, the following are the priorities for 2017:

Concerted efforts and aggressive marketing to procure more low-cost deposits with a view to reducing cost of deposits and improving Net Interest Margin (NIM) of the Bank.

Emphasizing on Retail Credit, SME and Agri-credit to make the loan portfolio more diversified.

Focusing on disciplined credit risk management especially credit appraisal process including documentation and monitoring with a view to maintaining strong asset quality.

As banking industry is predicted to remain highly competitive with low interest margins, fee-based income and non-funded incomes shall be a strategic imperative in 2017.

Maintaining asset quality by restricting increment of non-performing assets through early detection, monitoring, corrective action plans, shared information and disclosures to keep future recurrence in check.

SEBL at a glance


Strengthening the recovery against rescheduled, classified and written-off loans for reducing NPLs to a large extent through intensive recovery measures and further arresting fresh slippages.

Taking all required steps to maintain its position as a fully compliant bank in line with regulatory guidelines.

Strictly enforcing ‘code of conduct’ for all employees and elevating standard of service to new heights of excellence for all stakeholders.

With our rock-solid energy, seamless team work, unwavering unity of purpose and faith in Allah, I have no doubt that together we will continue to meet the challenging expectations of our shareholders, customers, employees and regulators in the years to come, In-Shaa-Allah.

Note of Thanks

My heartfelt gratitude to our customers for enabling us to achieve record excellent performance in 2016. I am greatly indebted to our honorable Chairman and Board of Directors for their valuable guidance, our Foreign partners, Bangladesh Bank, Bangladesh Securities and

Exchange Commission and other stakeholders who helped us make 2016 yet another successful year. I take this opportunity to extend my wholehearted appreciation to the management and staff for their indefatigable commitment and hard work that have resulted in such commendable results. We shall continue to rely on their support, dedication and commitment in taking Southeast Bank forward together to even greater heights.

M. Kamal Hossain Managing Director(Current Charge)


Directors’Report

Evaluation of our performance to date and strategies to

reach new heights of success and excellence


1. World economic scenario in 2016 and prospect for 2017

In 2016, world economy grew by 2.3 percent and the projected growth in 2017 is 2.7 percent (source: Global Economic Prospects by World Bank Group, January 2017). The moderation in growth in 2016 occurred because of slow growth in developed economies, persistent low commodity prices, timid global trade, thinning capital flows and policy uncertainty. Commodity-export dependent developing economies of Africa, Latin America and Middle East found it difficult to accustom to low prices for oil and other key commodities. Except few Asian economies, commodity-import dependent countries could not take substantial leverage from the situation because of weak demand in developed countries. Commodity exporting countries as a group grew at lower rate than commodity importers. In 2016, growth of advanced economies is estimated to have slowed to 1.6 percent while Emerging Market and Developing Economies (EMDEs) grew by 3.4 percent as previously estimated.

In 2017, advanced economies are projected to grow by 1.8 percent and the US economy in particular by 2 percent. Growth in EMDEs is expected to accelerate to 4.2 percent. Emerging Market and Developing Economies (EMDEs) representing commodity importing countries are expected to experience solid growth while the outlook for EMDE regions dependent on commodity exports is likely to be mixed. This projection is however deeply constrained by the growing uncertainty in the policy stance of the new US administration, the impact of Brexit, growing challenges to globalization and free trade and

the possible geopolitical developments around the world. All these lingering uncertainties together may have a significantly negative effect on global trade and growth prospects.

2. State of the Bangladesh Economy in 2016 and Economic Trends

Because of prevailing economic and political stability in 2016, Bangladesh economy was able to achieve 7.11 percent growth in GDP for the first time within the last nine years (source: Ministry of Planning). Industry played the main role in higher GDP growth although service and agriculture also made good contribution. Low fuel prices in the global market helped inflation rates to stay low (5.38% at the end of the year). Export earnings increased at a higher rate than imports and export-GDP ratio increased in FY2016 while import-GDP ratio declined. Remittance flow to the country experienced a declining trend despite increase in the number of migrant workers.

Other macroeconomic indicators including foreign exchange reserve ($32 billion equivalent to 8 months import cost), stable exchange rate and credit flow in private sector had been broadly in line with the target.

In FY2016, investment as a share of GDP was 29.7 percent, lower than the target for the fiscal year. The economy is moving forward with big public sector development projects, including Padma Bridge, metro rail, elevated expressway, flyovers, dozens of economic zones and new seaport. Capital markets have begun to make a turnaround because of policy shifts and buoyant liquidity.

Directors’ ReportBismillahir Rahmanir Rahim

Dear Shareholders,

The Board of Directors of Southeast Bank Limited takes this opportunity to welcome you all to the 22nd Annual General Meeting of the Shareholders and has immense pleasure to present before you the 22nd Annual Report of the Bank together with the Auditors’ Report for the year ended December, 2016.


In 2016, the banking sector continued to face challenges like excess liquidity, rise of non-performing loans, lower capital adequacy etc.

We expect, in 2017 Bangladesh economy will continue to be on a high growth trajectory with the objective to achieve 7.2 percent growth. It is a realistic goal and should be achieved through maintaining macroeconomic stability, increasing efficiency in project implementation as well as revenue mobilization, expediting private sector investment, building institutional capacity, improving governance and bringing back stringent discipline in the financial sector.

3. An overview of the Bank.

Southeast Bank Limited, a second generation private commercial bank, emerged in 1995 amid liberalization of global economies. Currently, its Authorized Capital is BDT 15,000.00 million and its capital and reserve reached BDT 34,056.28 million as on December 31, 2016. Its vision is to stand out as a premier banking institution in Bangladesh and contribute significantly to the national economy.

The Bank, in the meantime, successfully completed twenty two years of banking operations registering significant growth in performance indicators. In 2016, the Bank earned an after tax profit of BDT 2,435.07 million. The deposit of the Bank grew by 9.29 percent to BDT 229,973.43 million and loans and advances by 13.61 percent to BDT 191,865.59 million compared to those of 2015.

Operational excellence coupled with qualitative improvements continued to be of paramount importance to the Bank. At present, the Bank has 128 branches and 2 Off-Shore Banking Units across the country. Plans have been made to raise another 10 branches in 2017. Our journey towards greater operational success continues with increased energy and enthusiasm.

As we face the stiff challenges ahead on the way to further improving the profitability of the Bank, we rely on our skilled and experienced workforce. Our strengths are our close and cordial partnership with customers, our firmly anchored presence in the country’s strategic places of commercial and business importance and global reach through our correspondent Banks for expansion of foreign trade, foreign exchange and remittance business. Our product-basket encompasses Real Time Online Branch Banking, Islamic Banking, Merchant Banking, Dual Currency Visa Platinum Credit Card, Visa Travel Card, ATMs, Education Loan Scheme, Consumer Loan, Double Benefit Scheme,

Millionaire Deposit Scheme, SME Banking, Corporate Banking, Syndicate Loan, Monthly Savings Scheme, Fixed Deposit, Monthly Income Scheme, Pension Saving Scheme, Multi-Millionaire Gold Deposit Scheme(kept in abeyance for the time being), Mohor Saving Scheme, Zakat Account, Cash Wakfh Account, Wage Earner Pension Scheme, SMS Banking etc. in addition to our traditional credit and foreign trade related products and services.

High quality customer service through the integration of the latest and state of the art banking technology and products is our tool to achieve success. Customers are our first priority. We are trying hard to provide a system of one stop solutions for customers by providing a spectrum of services. Our employees have mastered new technology, enhanced their product knowledge and honed their skill to help customers meet their financial goals. We want to be the best at helping customers become financially better off by providing free advice, innovative leading-edge financial solutions, choice and convenience. Irrespective of customers’ size and type, we aim at delivering the best customer service by meeting their unique and different needs in a professional, ethical, friendly and knowledgeable manner.

We are pledge-bound to turn Southeast Bank into a modern banking institution, dynamic in actions, progressive in programs, honest in dealings, just in judgment, futuristic in attitude, fair in approaches and devoted to high quality service to customers. Our charted plans are aimed at boosting modern management, advanced technology, good profitability, sound financial strength and fair image of the Bank. We are firmly committed to transparent, responsible and accountable corporate governance with the participation of our strong and most capable team of professionals and under the prized policy directives and guidance of the Board of Directors of the Bank.

Southeast Bank carries out its business activities keeping in mind its core values, norms of business, commitment to clients, society and the environment at large. Southeast Bank in all its activities and operations tries to establish the Green Banking practice and attain a sustainable growth. The Bank in its all endeavors wants to assure its shareholders a steady and competitive return on their investment in line with the best among peer institutions.

4. Capital and Reserves

The Authorized Capital of the Bank was BDT 15,000.00 million and paid-up capital was BDT 9,169.50 million as of December 31, 2016. The Capital and Reserves (Tier-1

Directors’ Report


Capital and Tier-II Capital) stood at BDT 34,056.28 million as compared to BDT 28,509.53 million in last year showing an increase of 19.46 percent.

Capital and Reserve of the Bank as of December 31, 2016 were as follows:

BDT in million

Regulatory Capital Consolidated Solo

Tier-I capital

1) Common Equity Tier-I Capital (CET-1)

- -

Fully Paid up capital 9,169.50 9,169.50

Non-repayable share premium account

Statutory reserve 9,170.00 9,170.00

General reserve 247.65 247.65

Retained earnings 3,196.97 3,171.82

Minority interest in subsidiaries

10.00 -

Regulatory Adjustments

Goodwill and all other Intangible assets

108.60 108.60

2) Additional Tier-1 Capital (AT-1)

3) Total Tier-1 Capital (1+2) 21,685.52 21,650.38

Tier-2 Capital

General provision (unclassified loans, SMA, off balance sheet)

3,569.50 3,569.50

Subordinated debt 7,400.00 7,400.00

Revaluation Reserves as on December 31, 2015 (50% of Fixed Assets and Securities & 10% of Equities)

2,335.43 2,335.43

All other preference shares


Revaluation Reserves for Fixed Assets, Securities & Equity Securities (Phase in deductions as per Basel-III Guidelines)

934.17 934.17

4) Total Tier-2 Capital 12,370.76 12,370.76



934.17 934.17


108.60 108.60

Total eligible capital (3+4) 34,056.28 34,021.14

5. Capital to Risk Weighted Assets Ratio (CRAR)

Southeast Bank maintained capital adequacy ratio of 12.15 percent of the risk-weighted assets as on December 31, 2016 as against the minimum capital requirement of 10.625 percent as set by Bangladesh Bank under Basel-III reporting through BRPD Circular No.18 dated December 21, 2014 of Bangladesh Bank.

6. Capital Market Scenario

During the year 2016, country’s Capital Markets did not witness any noticeable performance, rather Capital Markets were lackluster like recent past years. At the prevailing scenario of Capital Markets, if we compare fundamentals of some financially strong listed companies with the trading prices of their stocks in exchanges, we can easily determine that their stock prices are still under-valued in comparison to their year-end corporate declarations. Daily turnover at the exchanges was under BDT 5,000.00 million almost throughout the year except during the month of December when it increased steadily above BDT 5,000.00 million level.

Some major parameters of both stock exchanges are depicted hereunder for a glimpse of performance of DSE and CSE in 2016:

DSEX, the bench mark price index of the prime bourse, Dhaka Stock Exchange Limited improved marginally by 8.78 percent from 4,629.64 on 30th December 2015 to 5,036.05 on 30th December 2016. Chittagong Stock Exchange Limited index, CSCX also improved from 8,572.12 to 9,369.91 in the same period and gained 9.31 percent. Combined total yearly turnover of country’s two Stock Exchanges was 1,268.95 billion as against 1,119.87 billion in 2015, a gain of 13.31 percent. Market capitalization at DSE at the close of the year 2016 stood at BDT 341,244.15 billion as against BDT 315,975.75 billion at the end of 2015, registering a gain of 8.00 percent. The total number of active BO Accounts in Central Depository System of CDBL was 2,947,952 at the end of 2016, which was 3,170,047 in 2015.

Infusion of funds from Institutional Investors, Wealthy Individual Shareholders, Foreign Institutional Investors, Large number of Small Shareholders, etc. to stocks of financially strong companies is now the most fundamental requirement for country’s ailing Capital Markets.

7. Southeast Bank Shares and Shareholders

Investors always look for a company which can meet their needs for dividend and capital gain. Honorable shareholders, who are with us since our listing with Stock Exchanges, witnessed a robust growth of our paid-up capital from BDT 300.00 million to BDT 9,169.50 million or by 2,956.50 percent. For the last few years country’s Stock


Markets have been remaining uncertain, inconsistent and unstable. But because of our visionary leadership, our paid-up capital is growing and the trend of payment of dividend is still high. We have a large number of shareholders which on 31st December 2016 stood at 39,009. Earning per Share, our Net Asset Value, our Trend of Payment of Dividend and growth of our Paid-up Capital over the years are mentioned below:

i) Ten years Earning Per Share (EPS) of our Company:

Earning Per Share: 4.28-2007, 3.11-2008, 3.24-2009, 3.77-2010, 2.19-2011, 1.89-2012 3.68-2013, 4.18-2014, 3.35-2015 and 2.66-2016.

ii) Ten years Net Asset Value (NAV) of our Company:

Net Asset Value: 26.92-2007, 25.79-2008, 33.10-2009, 23.37-2010, 23.30-2011, 22.66-2012, 23.92-2013, 26.77-2014, 29.67-2015 and 28.93-2016.

iii) Year-wise Paid-up Capital and Authorized Capital of the Bank :

From the commencement of our business, our prudent Board of Directors were planning that Bank’s capital base should be increased in harmony with the gradual growth of our Bank’s lending business by raising its paid-up capital. Our present Paid-up Capital of BDT. 9,169.50 million and Authorized Capital of BDT.15,000.00 million is the result of that initial vision of strong capital base and which precisely brought us here. Bank’s Paid-up Capital increased by 2,956.50 percent since our listing. A chart of Bank’s Authorized Capital and Paid-up Capital of the last five years is given below:

YearAuthorized Paid Up Capital

(Taka in million) (Taka in million)

2016 BDT 15,000.00 BDT 9,169.50

2015 BDT 15,000.00 BDT 9,169.50

2014 BDT 15,000.00 BDT 9,169.50

2013 BDT 10,000.00 BDT 8,732.86

2012 BDT 10,000.00 BDT 8,732.86

iv) Declaration of Dividend

Since the listing with DSE & CSE in the year 2000, it has been demonstrated that Southeast Bank has got the capability of paying good rate of dividend to its Shareholders. A company with large size of paid-up capital requires substantial amount of profit earning assets to pay off dividend. It shows our judgment in selecting borrowers, our strength, sincerity and honesty to run our primary operation, i.e. banking business smoothly for a

long period of time. Please see below the record of our declarations of Cash Dividend and Stock Dividend:

Cash Dividend: 15%-1999, 25%-2000, 30%-2001, 20%-2002, 20%-2003, 20%-2006, 15%-2007, 15%-2008, 10%-2010, 15%-2011, 15%-2012, 16%-2013, 15%-2014, 15%-2015 and 20%-2016.

Stock Dividend: 10%-2000, 10%-2001, 10%-2002, 20%-2003, 30%-2004, 20%-2005, 8%-2006, 25%-2007, 20%-2008, 35%-2009, 20%-2010, 5%-2011 and 5%-2013.

8. Deposits

Deposits create opportunity for the bank to extend credit facilities to its customers. Deposit mobilization is one of the core activities of commercial banks. A proper deposit structure of a bank plays significant role in increasing its interest income. Besides, the bank can contribute to the functioning of the broader financial system through providing fund to the deficit units. Southeast Bank maintained its liquidity position within the approved risk appetite and tolerance limits. Appropriate liquidity buffers were held in line with regulatory requirements, taking into account the risk profile and market conditions.

The amount of total deposits of the Bank as on December 31, 2016 stood at BDT 229,973.43 million as compared to BDT 210,431.09 million in 2015. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the employees and confidence reposed by the customers in the bank contributed to the notable growth in deposits. On the eve of the 21st anniversary, the bank conducted customer acquisition campaign “Nibir” and launched two exclusive products “Anonya” for women and “Bichokkhon” for senior citizens. This campaign not only improved the quantum of deposits but also brought about qualitative changes in deposit structure. Deposit-mix of the bank as on December 31, 2016 was as follows:

ParticularsBDT in million

Share in Total

Deposits

a) Current and Other Deposits

30,285.06 13.17%

b) Savings Bank/Mudaraba Savings Bank Deposits

19,700.58 8.57%

c) Special Notice Deposits / Mudaraba Special Notice Deposits

25,012.17 10.88%

d) Fixed and Scheme Deposits or Term Deposits

148,426.76 64.54%

e) Bill Payable Accounts 6,548.86 2.85%

Total 229,973.43 100.00%

Directors’ Report


9. Lending and Investment

Southeast Bank Limited is playing a pivotal role in the economic development of the country by ensuring smooth credit flow in different sectors with balanced diversification. The economy of our country has been passing through a challenging times for last couple of years, faced with the major problem of prolonged slow investment position caused by uncertainties among the investors. Amidst so many adverse challenges during last five years, Southeast Bank ensured its consistent growth with perfect blend of quality and quantity. Resultantly, total lending of the Bank stood at BDT.191,865.59 million as on 31st December, 2016 registering 13.61 percent growth over previous year. Bank’s total lending (consolidated) and its growth rate for the last five years are shown below:

YearOutstanding at the

end of the year(BDT in million)

Growth Rate

2016 191,865.59 13.61%

2015 168,878.46 14.83%

2014 147,070.81 9.05%

2013 134,863.82 6.21%

2012 126,968.97 18.34%

Most importantly, the Bank has put in place solid foundations through which to support it’s sustainable growth and development of the business across the segments in the industry.

10. Guarantee Business

Bank Guarantees shortly named as ‘Guarantee’ is one of the non-funded business products of the bank. The Bank issued guarantees amounting to BDT 16,369.36 million during 2016 favoring different Government Authorities, Ministries, Autonomous Bodies, Corporations, Private Companies, Individuals and Multinational Companies etc. on behalf of valued clients.

11. Investment Scenario

The investment portfolio of the Bank in 2016 was BDT 61,731.63 million against BDT 58,829.27 million in the previous year. The portfolio of investment included Government Treasury Bills, Prize Bonds, Shares of Public Limited Companies etc. The Bank has always given emphasis on investment of funds in high yielding areas simultaneously maintaining Statutory Liquidity Requirements (SLR) as fixed by Bangladesh Bank time to time.

12. Asset Liability Committee (ALCO)

Asset Liability Committee (ALCO) consists of senior level executives with the decision making capacity and responsibility to review, discuss and direct the financial

policy, position and risk exposures. ALCO is typically responsible for establishing, documenting and enforcing all policies that involve asset and liability management, such as liquidity, interest rate and foreign exchange risk. As per Bangladesh Bank guideline, Southeast Bank has a fully functional Asset Liability Committee (ALCO). The Managing Director is the Chairman of the Committee. Other members of the Committee are Additional Managing Directors and strategically important Divisional Heads of Head Office. The meeting of the Asset Liability Committee is held every month.

13. Internal Control and Compliance

The foundation of Internal Control and Compliance System of Southeast Bank Group is based on organizational structure, policies, procedures and instructions provided by its Board of Directors and senior management and as per the guidelines or instructions of the regulatory authorities. The Board always inspires a strong control and compliance culture based on sound understanding of laws, regulations and best practices that is disseminated at all levels. Southeast Bank Group has designed, developed and implemented an integrated internal control and compliance framework set in line with the internal control and compliance policies. Internal Control and Compliance Policies of the Group include (i) Compliance, (ii) Information Security, (iii) Internal Audit, (iv) Risk Management, etc. The above functions are independent of the operational activities. The Audit Committee of the Group, on behalf of the Board of Directors, reviews the various reports of internal auditors, external auditors, Bangladesh Bank’s inspection team and its compliance status. It also receives regular reports on emerging risks in each of its meetings from different divisions and conducts an annual review of the adequacy and effectiveness of the system of risk management as well as internal control. This system of internal control of Southeast Bank Group is capable of continually assessing and recognizing the material risks that could adversely affect the achievement of the goals of Southeast Bank Group. This internal control system also ensures immediate reporting of all the identified significant weaknesses and control failures together with details of corrective actions being undertaken at appropriate levels of the management.

14. Performance of Selected Liability Products as on 31st December, 2016

Both Traditional and Islamic Banking

Type of Accounts

No. ofAccount

Deposit Volume

BDT in million

CD 86,235 11,280.81

SND 9,624 25,012.17

SB 441,694 19,700.58

FDR 71,466 114,612.21


Traditional Banking

Type of Accounts

No. ofAccounts

Deposit Volume

BDT in million

MDS 4,296 1,921.51

DBS 15,801 15,494.18

MGDS 800 493.50

PSS 57,590 7,374.30

WPSS 1,451 152.75

MIS 632 733.31

MSS 37,807 3,207.68

ESS 10 0.76

SDBS 286 185.71

MRGSS 1 0.002

Islamic Banking

Type of Accounts

No. ofAccounts

Deposit Volume

BDT in million

MMDS 261 126.49

MDBS 1,553 1,002.53

MMGDS 46 29.80

MPSS 5,056 758.15

MWPSS 161 31.00

MMIS 79 136.36

MMSS 2,589 239.32

MESS 38 6.64

MSDBS 28 10.98

Hajj Sanchaya 9 1.11

TMMSS 127 17.22

MMRGSS 9 0.14

15. Budget and Budgetary Control

The Bank follows bottom up planning approach in preparation of annual budget and initially invites draft proposals on different budgetary items including deposits, advances, profitability and other businesses from the branches. The draft budget estimates are then scrutinized and analyzed by the Head Office Management after discussion with the Heads of the respective Branches and reviewed and finalized in the “Business Policy and Managers’ Conference”. The Management of the bank makes constant efforts throughout the year to achieve the budgetary target. Senior Management Team at Head Office quarterly reviews the variances and the progress towards achieving the budgetary goals.

16. Analysis of the Income and Expenditure Statements

A brief analysis on Bank’s income and expenditure in 2016 is given below:

Interest Income The interest income of the bank for the year 2016 was BDT 16,972.33 million as compared to BDT 17,794.80 million in the previous year. The income generated from Loans and Advances remained the main contributor.

Interest expenses Total interest expenses in 2016 was BDT 12,765.12 million as against BDT 14,656.34 million in 2015 posting a decrease of 12.90 percent.

Net Interest Income Net interest income of the Bank for the year 2016 stood at BDT 4,207.21 million as against BDT 3,138.46 million in the previous year resulting in an increase of 34.05 percent.

Investment Income In 2016, Bank’s income from investment was BDT 5,079.61 million as compared to BDT 5,158.54 million in the previous year. Investment income consisted of interest earned on treasury bills and bonds, capital gain, revaluation gain, gain from sales of shares and dividend received from shares.

Other Income In 2016, commission, exchange and brokerage earnings increased to BDT 2,903.03 million from BDT 2,759.46 million in 2015. This was due to enhanced business and trade related fee based activities.

Operating expensesOperating expenses of the Bank was BDT 3,570.11 million in 2015 which reached BDT 4,349.23 million in 2016.

Provision against Loans and AdvancesIn the year under review, provision against loans and advances was kept BDT 3,250.99 million as compared to BDT 2,245.05 million in 2015.

17. Asset Portfolio

As on 31st December 2016, total assets of the Bank stood at BDT 291,798.01 million. The break-up of total assets is given below:

Particulars BDT in million

Cash and Cash Equivalents 26,152.01

Investments 61,731.63

Loans and Advances 191,865.59

Fixed Assets 8,947.16

Other Assets 3,101.61

Total 291,798.01

Directors’ Report


18. Adoption of IAS and IFRS

The Institute of Chartered Accountants of Bangladesh (ICAB) adopted the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). Securities & Exchange Commission (SEC) and Bangladesh Bank also mandated the implementation of IAS & IFRS. These standards and reporting system have also been complied with by our Bank in preparation of the Financial Statements.

19. Growth in Operating Profit for the Last 5 years

The Bank has earned operating profit of BDT 8,503.22 million in 2016 which comprises net interest income, income from investment, commission, exchange etc. Operating profit in 2015 was BDT 8,034.27 million. The operating profit of the Bank for the last (5) five years is given below:

YearOperating Profit

BDT in million

2016 8,503.22

2015 8,034.27

2014 8,289.76

2013 6,700.20

2012 5,495.19

20. Operating Income for the Last 5 years

The operating income of the Bank stood at BDT 12,852.45 million at the end of 2016 while it was BDT 11,604.39 million in 2015. The operating income of the Bank for the last five (5) years is given below:

YearOperating Income

BDT in million

2016 12,852.45

2015 11,604.39

2014 11,617.19

2013 9,684.80

2012 7,831.62

21. Return on Equity for the Last 5 years

Return on Equity (ROE) of the Bank was 9.06 percent in 2016 while it was 11.86 percent in the previous year. The

Return of Equity of the Bank for the last five (5) years is given below:

Year Percentage (%) of ROE

2016 9.06%

2015 11.86%

2014 16.51%

2013 16.20%

2012 8.42%

22. Provision for Income Tax

The provision for income tax both current tax and deferred tax of the Bank was kept BDT 2,855.52 million for the year 2016 while it was BDT 2,448.07 million in the previous year.

23. Profit Before Tax and Provision

The Bank earned profit of BDT 8,503.22 million during the year before making any provision for bad and doubtful debt, off-balance sheet exposures, unclassified loans and advances and before taxes etc. as against BDT 8,034.27 million in the year 2015.

24. Net Profit after Provision and Income Tax

The Bank earned net profit of BDT 2,435.07 million during the year 2016 after making specific provision for classified loans, general provision for unclassified loans and off-balance sheet exposure, and after taxes etc. It was BDT 3,069.42 million in the year 2015.

25. Net Profit for the Last 5 years

Net Profit after tax and provision was BDT 2,435.07 million during the year 2016 which was BDT 3,069.42 million in the previous year. Net Profit for the last five (5) years is given below:

YearNet Profit

BDT in million

2016 2,435.07

2015 3,069.42

2014 3,836.94

2013 3,378.82

2012 1,648.72

26. Statutory Reserve

The Bank transferred to statutory reserve BDT 272.69 million. The total amount of statutory reserve stood at BDT 9,170.00 million as on 31st December, 2016.


27. Southeast Bank Capital Services Limited

Southeast Bank Capital Services Limited (SEBCSL) is a subsidiary company of Southeast Bank Limited. It was incorporated on 23rd September 2010 as a Public Limited Company with Registrar of Joint Stock Companies and Firms under Company Act 1994. Initially, its Authorized Capital was BDT 3000.00 million and Paid up Capital was BDT 1000.00 million. Subsequently, Authorized Capital was enhanced from BDT 3000.00 million to BDT 6000.00 million. Its Paid up Capital was enhanced from BDT.1000.00 million to BDT 5500.00 million by issuing new shares. As the holding company, Southeast Bank Limited owns 99.82% of the total shares of the company.

The company has a professional Board of Directors. It is managed by a professional management team under the policy guidelines of the Board. The Board comprises of the following professionals:

Sl. No. Name of the Directors Position

01 Mr. Alamgir Kabir, FCA Chairman

02Mr. A.H.M Moazzem Hossain Independent Director

Director

03

Mr. M. Kamal HossainManaging Director(Current Charge) Nominee of Southeast Bank Limited

Director

04 Dr. Zaidi Sattar Director

05Mr. Md. Khursheed Alam Nominee ofSoutheast Bank Foundation

Director

06Mr. Muhammad Shahjahan Managing Director(Current Charge)

Director(Ex-officio)

SEBCSL has been carrying out operation as a full-fledged Merchant Bank since its inception in 2010. The main focus of the Company is disciplined operation of merchant banking within the precinct of the regulatory rules and regulations. The main products and services of SEBCSL include, but not limited to, Portfolio Management, Pre-IPO Placement, Underwriting Management, Issue Management and Corporate Advisory Services. The Company’s own portfolio investment in the capital market also increased significantly over the years.

The Company has 11 employees including Managing Director (cc). They are honest, sincere, hard working, committed, innovative and forward looking. They are also devoted professionals who are relentlessly working hard for the continuous growth and development of the company.

The country’s capital markets have been showing signs of maturity and improvement since the second half of

the year 2016. During the year 2016, Profit befor tax of the Company was BDT 78.81 million whereas the Profit after Tax stood at BDT 59.07 million. Based on the current trend of Bangladesh capital market, it is expected that the Company will reap good return from its investments and earn good profit in 2017 from operations.

28. Network Expansion Program

In today’s intense competition, most of the financial institutions are striving hard to display their best possible efforts to be competitive. As customers are more fragmented, Banks are trying to enrich their services and network to serve the customers. Southeast Bank, as a leading financial institution, always gives highest priority to quicken its branch expansion programme to net the un-banked population across the country. It is to be mentioned that business is the prime objective of any branch expansion strategy of a bank and definitely a new branch is aimed at plugging geographical gaps in their network. Our Bank invests in network expansion and new technology adoption to achieve competitive edge. Presently our bank is functioning with country-wide network of 128 branches covering all divisions of the country. Division-wise distribution of branches are given below:

DivisionUrban

BranchesRural

BranchesTotal

Dhaka 33 31 64

Chittagong 12 18 30

Sylhet 07 05 12

Khulna 04 04 08

Rajshahi 08 01 09

Barisal 01 - 01

Rangpur 02 - 02

Mymensingh 02 - 02

Total 69 59 128

To facilitate the female entrepreneurs, the bank has set up two Ladies’ Branches in Dhaka city. The Bank is also offering Offshore Banking facilities through 02 (Two) Offshore Banking Units (OBU) in Dhaka Export Processing Zone and Chittagong Export Processing Zone.

Moreover, the Bank is providing “Shariah-Based Islamic Banking Services” to the customers. Out of 128 (One hundred twenty eight) Branches of the Bank, 05 (Five) Branches are designated as Islamic Banking Branches located at Dhaka, Chittagong and Sylhet region. At present Bank’s Authorized Dealer (AD) Branches are 21 (Twenty one). The Bank is also providing “Evening Banking Service” through 27 (Twenty seven) Branches to further augment its service delivery at extended banking hours. To expand the geographical outreach and to cover more strategic

Directors’ Report


locations of business importance, SEBL has applied to Bangladesh Bank for opening 10 new branches in the year of 2017.

29. Implementation of Basel III

Bangladesh has entered into the Basel III regime from January 01, 2015. Bangladesh Bank revised the capital standard based on Basel III and planned to implement it gradually from 2015 to 2019. A Capital Conservation Buffer (CCB) of 2.5% is to be built up @ 0.625% each year from the beginning of 2016 to 2019. This is in addition to existing Minimum Capital Requirement (MCR) of 10%. It means CRAR requirement will be 12.50% from January 01, 2019.

To increase the quality and quantity of the capital base of the Bank, Basel III has introduced the following measures:

1. Tier 1 capital has been divided into two parts: Common Equity Tier 1 (CET1) and Additional Tier 1 (AT1).

2. The definition of capital has been made stringent. Tier 3 capital has been eliminated.

3. The Bank has to maintain 3% leverage ratio along with Liquidity Coverage Ratio (LCR) of 100% or more and Net Stable Funding Ratio (NSFR) of more than 100%.

Southeast Bank is well positioned in respect of capital and risk management. It has commenced reporting of CRAR, leverage and liquidity ratio from January 01, 2015 following the new risk based capital adequacy framework. The overall scenario as of December 31, 2016 under Pillar-I is depicted below:

Solo CRAR

Consolidated CRAR

Leverage Ratio

LCR NSFR

12.18% 12.15% 6.14% 118.50% 109.53%

The Bank has a Supervisory Review Process (SRP) team comprising of members from the senior management. They participate in dialogues with the Supervisory Review Process Evaluation (SREP) team of Bangladesh Bank on the issue of maintenance of adequate capital to compensate all the risks associated with business. Stress testing is an integral part of Supervisory Review Process and is conducted through a prescribed format given by Bangladesh bank where impact on Capital to Risk Weighted Asset Ratio (CRAR) is assessed taking into account plausible shocks.

Pillar-III of Basel III aims at promoting market discipline through regulatory disclosure requirements. The reports on disclosure enable market participants to assess more effectively key information relating to Bank’s regulatory capital and risk exposures in order to instill confidence about the Bank’s exposure to risk and overall regulatory

capital adequacy. The Bank has published the disclosure incorporating all the changes in the revised guidelines. The Bank has also made a significant progress in implementing Basel-III and preparing itself to meet the upcoming challenges for implementing advanced approaches of calculating credit, market and operational risks.

30. Supervisory Review Process

Supervisory Review Process (SRP) is the second pillar of Basel-III framework. The aim of Pillar 2 processes is to enhance the link among institution’s risk profile, its risk management, risk mitigation systems and its capital planning. Bank’s responsibility is to develop sound risk management processes that will adequately identify, measure, aggregate, and monitor its risks. The task of the SRP team is to review and evaluate the ICAAP (Internal Capital Adequacy Assessment Process) and the soundness of the internal governance processes within which it is used.

SEBL has a 10 members SRP team at management level headed by the Managing Director. The team periodically reviews the risk assessment process and the requirement of adequate capital against all plausible risks. The Bank follows Bangladesh Bank guidelines ‘Revised Process Document for SRP-SREP Dialogue on ICAAP’ to assess level of risks and capital requirement. It also reviews the policy documents that would supplement the whole risk mitigating process under SRP. The ICAAP report of 2015 has already been sent to Bangladesh Bank and as per the latest reports the Bank will require of BDT25,179.80 million to act as cushion against risks under Pillar-I and Pillar-II of Basel-III. However, the Bank has been maintaining BDT 28,490.49 million as capital including Tier-I and Tier-II.

The Board of Directors, the senior management and the operational units of the Bank are working together for establishing sound risk management.

31. Corporate Governance

One of the basic policies of the Bank is to strengthen its corporate governance status by establishing responsible management system and strengthening supervision. Efforts are also being geared up to improve the transparency and accountability of the management. While putting efforts to achieve corporate objectives, Southeast Bank gives top priority to establishing appropriate corporate governance standard at all levels and in all units. A report on Corporate Governance of the Bank in 2016 is included in this Annual Report.

32. Declaration of the Compliance of BSEC Notification

The following disclosures are made in compliance of certain provisions contained in the BSEC Notification dated August 7, 2012.


a) The financial statements prepared by the management present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

b) All transactions have been recorded in the accounting records and are reflected in the financial statements. Accounting books have been properly maintained in the Bank.

c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.

d) Bangladesh Accounting Standards (BAS)/Bangladesh Financial Reporting Standards (BFRS) as applicable in Bangladesh have been followed except as outlined in Note No. 2.1 in the financial statements.

e) The system of internal control in the Bank is sound in design and has been effectively implemented and monitored.

f ) There are no doubts upon the Bank’s ability to continue as a going concern.

33. Declaration of Dividend

The Bank gives utmost importance on the principles of sharing good achievements with respected shareholders of the Bank. Accordingly, the Board of Directors in its 511th meeting held on April 08, 2017 recommended 20 percent Cash Dividend for distribution amongst the shareholders for the year-2016.

34. Corporate Social Responsibilities

Southeast Bank manages its business in a responsible way and contributes to the society and environment in which it operates. A report on Corporate Social Responsibility of the Bank in 2016 is included in this Annual Report.

35. Contribution to National Exchequer

During the fiscal year 2015-2016, Southeast Bank’s contribution to the National Exchequer was BDT.1,644.59 million. The bank’s contributions to the National Exchequer for the last five (5) years are given below:

Year BDT in million

2015 1,644.59

2014 2,519.31

2013 2,573.77

2012 2,069.85

2011 1,802.80

36. Acknowledgement

The Board expresses gratitude to the Almighty Allah for the success of the Bank in 2016. The Board extends thanks to the valued customers, patrons and well-wishers for their continued support and co-operation to the Bank. The Board also appreciates the dedicated services of the Senior Management Team, all Executives and other employees of the Bank.

The Board offers thanks to the Government of Bangladesh, Bangladesh Bank, Bangladesh Securities and Exchange Commission, Registrar of Joint Stock Companies and Firms, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for their appreciable support and co-operation to the Bank.

The Board also expresses its appreciation to Rahman Rahman Huq, the Auditors of the Bank, for their efforts for timely completion of Audit. The Board of Directors also thanks both the print and electronic media personnel for giving media coverage to Bank’s different activities and events.

Finally, the Board thanks the respected Shareholders and assures them that it will continue to add to the Shareholders’ wealth through further strengthening and development of the Bank in which they have placed their trust and confidence.

Sincerely

On behalf of the Board of Directors.


Directors’ Report


CorporateGovernanceOur Corporate Governance framework is a set of transparent rules, requirements and systems practiced by us with a high degree of integrity to meet the expectations that the stakeholders and the society place on us.


CorporateGovernanceOur Corporate Governance framework is a set of transparent rules, requirements and systems practiced by us with a high degree of integrity to meet the expectations that the stakeholders and the society place on us. CORPORATE GOVERNANCE

Statement of Board of Directors on the Responsibility to Establish Appropriate System of Internal Control

82

Statement of Board of Directors onAdequacy of Internal Control System

84

Corporate Governance Report 85Managing Director’s and CFO’s Declarationon Integrity of Financial Statements to the Board

99

Management Review, Responsibility and Evaluation 100Compliance Report on BSEC’s Notification on Corporate Governance 128Certificate on Compliance of Corporate Governance 134Compliance of Bangladesh Bank’s Guidelines on Corporate Governance 135Credit Rating 143Audit Committee (Composition, Role, Meetings, Attendance etc.)and Internal Control

144

Report of the Risk Management Committee 149Evaluation of the Quarterly Financials by theAudit Committee and by the Board

151

Report of the Bank’s Shariah Supervisory Committee 152Capital Plan 154Statement of Non Performing Loan 156


According to the instructions/guidelines of Bangladesh Bank (Central Bank), the Board has delegated specific responsibilities to 03 (three) subcommittees (Executive Committee, Audit Committee and Risk Management Committee). These committees have the authority to examine particular issues and report back to the Board with their recommendations. These committees also assist the Board to perform its oversight functions in ensuring the effectiveness of daily operations and that the operations of Southeast Bank are in accordance with the corporate objectives/goals, strategies, applicable laws and regulations, the annual budget as well as the policies and business directions that have been approved.

The Board of Southeast Bank has adopted necessary/required written policies and process guidelines including Management Control Policy (MCP) as well as Internal Control Policy (ICP). These Policies and process guidelines are updated as and when required to ensure relevance and compliance with current/applicable laws and regulations and are made available to all employees. The MCP outlines the specific responsibilities of the various parties, e.g. the Line Management, Internal Control Team, Audit Committee etc pertaining to Internal Control for Southeast Bank Ltd. The ICP creates awareness among all the employees regarding internal control components and the basic control policy of Southeast Bank.

The Board of Southeast Bank, in accordance with the guidance notes of Bangladesh Bank, has established an effective and integrated risk management framework

that consist of six core factors, i.e. Credit Risks; Asset and Liability/Balance Sheet Risks; Foreign Exchange Risks; Internal Control and Compliance Risks; Money Laundering Risks and Information and Communication Technology Risk. With this end in view, it has established 03 (three) lines of defense concept - risk taking units, risk control units and internal audit. The risk taking units are responsible for the day to day management of risks inherent in their business activities while the risk control units are responsible for setting the risk management framework and developing tools and methodologies. The internal audit, complementing these, provides independent assurance of effectiveness of the risk management approach.

An effective management information system is in place to support the organizational and procedural controls in order to managing the exposure soundly and prudently to mitigate it’s risks. The management of the Group assists the Board in the implementation of the policies and procedures adopted by the Board and works actively to manage and operate the Group in a sound and prudent manner.

An independent audit mechanism has been established for undertaking regular reviews of operations of the Bank. Through these reviews, the adequacy and efficiency of financial and operating controls are examined and evaluated as well as significance of risks and impacts of non-compliance on the Bank are highlighted. Various Internal Control Cycles or pre-defined Procedures, i.e Compliance Review Work Program (e.g, Departmental

Statement of Board of Directors on Adequacy of Internal Control System

The Board of Directors is actively concerned with sound Internal Controls and Risk Management Practices for good corporate governance. In order to support the maintenance of a strong Internal Control Environment of Southeast Bank, the Board has established an organizational structure with clearly defined lines of responsibility, authority, limits and accountability aligned to business and operational requirements.


Control Function Checklist, Quarterly Operation Report, Loan Documentation Checklist, MANCOM Certificate, Annual Summary Report, Annual Health Report, etc) have also been established to ensure efficient and effective internal control.

At the beginning of each calendar year, a risk based Audit/Inspection Plan on different Branches/ Divisions/Units is approved by the Audit Committee of the Board and Internal Audits/Inspections are carried out on the basis of the approved plan. All the reports of Internal Auditors, External Auditors and Regulatory Authorities with major deficiencies are discussed in the meetings of the Management and Audit Committee of the Board. The purpose of these meetings is to monitor the functioning of the internal controls during the financial year, so that necessary action can be taken where necessary. The management also follows up and reviews the status of actions taken on the recommendations provided by the Internal Auditors, External Auditors and Regulatory Authorities.

The Board of Directors, through its Audit Committee, reviews the effectiveness of the system of Internal Control and Compliance annually. In support of this review, the management conducts an Internal Control and Compliance Certification Process. The Audit Committee of the Board also reviews the actions taken on internal control issues identified in the reports submitted by the Internal Auditors, External Auditors and Regulatory Authorities and further evaluates the effectiveness and adequacy of the Internal Control System of the Group. The Audit Committee, where applicable, provides recommendations to improve on the effectiveness of risk management, control and governance process of the Bank. The Audit

Committee of the Board has active oversight on internal audit’s independence, scope of work and resources. It also reviews the functions of Internal Control and Compliance, particularly the scope of the annual audit plan and frequency of the internal audit activities.

The Board is satisfied that the System of Internal Control of the Group is effective and adequate and provide a reasonable assurance in achieving objectives/goals of the Group with the following standards:

reliability of the financial information;

effectiveness and efficiency of operations;

compliance with applicable laws and regulations;

adherence to management policies;

safeguarding Bank’s Assets;

prevention and detection of fraud and errors;

accuracy and completeness of the accounting records; etc.

However, the reality is that human error is always an element in decision-making and the cost always has to be balanced against the benefits when accepting risks and implementing controls. Even minor mistakes due to human error may have significant effects, employees may conspire to circumvent internal controls and responsible managers may ignore internal agreements.


Corporate governance


An essential part of the Board’s responsibilities is to review the effectiveness of internal control while management is accountable to the Board for developing, operating and monitoring the system of internal control and for providing assurance to the Board that it has done so.

The Board of Southeast Bank acknowledges its overall responsibility for maintaining sound, adequate and effective internal control systems to safeguard the assets of the Bank and interest of the shareholders. The Board of Southeast Bank recognizes that achievement of the objectives of banking business depends on the success of risk management. As such the internal control systems are primarily designed with a view to highlighting any deviations from the limits and indicators which comprise the risk appetite of the Bank. The Board is of the view that the internal control framework is designed to manage the risks of Southeast Bank within an acceptable level/risk profile rather than eliminate the risk of failure to achieve the policies, goals and objectives of the Bank. The system of internal controls can therefore only provide reasonable

but not absolute assurance, in achieving the policies, goals and objectives of the Bank. The Board of Southeast Bank also believes that a strong system of internal control has significant role over the reliability of financial information/reporting; effectiveness and efficiency of operations; compliance with applicable laws, regulations and internal policies, safeguarding its assets; early detection of fraud-forgery and protecting the Bank from the financial loss.

The Board of Southeast Bank has established an ongoing process for identifying, evaluating, monitoring and managing the significant risks faced by the Bank. All the processes and guidelines of the Bank are reviewed and updated time to time to suit the changes in business environment or regulatory guidelines.


Statement of Board of Directors on the Responsibility to Establish Appropriate System of Internal Control

According to the Section 15(Kha) and 15(Ga) of Bank Company (amended) Act 2013, the Board of Directors of a Bank is responsible for setting up policies and implementation thereof in the Bank. The Board is also responsible for risk management, internal control, internal audit and compliance of the Bank. The Board is required to ensure effective internal audit and control system in the Bank.


Conceptual Framework

Southeast Bank operates within the legal framework of the Companies Act-1994 and as a banking company, complies with the provisions of the Bank Company (Amendment) Act-2013. It also complies with the directives and guidelines issued from time to time by Bangladesh Bank and Bangladesh Securities and Exchange Commission. The Bank is responsibly managed and supervised in fulfillment of the objectives of adding value to the shareholders’ wealth and contributing to the national economy. Our Corporate Governance principles serve the goal of strengthening and consolidating company position with sustained growth objectives in materializing the trust placed in the company by the shareholders, clients, employees and the general public. Fair practice, accountability, transparency, compliance, value creation and corporate social responsibility are the pillars of our corporate governance. The Bank’s corporate governance structure comprises of the Shareholders, the Board, Bank Management, Regulatory Authorities, Independent External Auditors and the Employees.

Our Stakeholders

Our Stakeholders are individuals or groups that have an interest, claim or stake in the Company, in what we do and in how well we perform. All our Stakeholders are in an exchange relationship with us. Each of them supplies us with important resources and in exchange each expects that its interest is satisfied.

Board of Directors, Chairman and CEO

Policy on Appointment of Directors

Southeast Bank complies with the requirement of Bangladesh Bank and Bangladesh Securities and Exchange Commission (BSEC) for appointment of Directors. As per regulations, all Directors, except nominated, independent or alternate director, maintain at least 2% shares in the Bank.

As per the Companies Act 1994, one-third of the Directors retire and if eligible, place themselves for reappointment which is approved in the Annual General Meeting.

As per the Bank Company Act 1991 (As amended in 2013), the Directors are appointed for a term of three years which can be extended by one term only subject to approval by the shareholders in the Annual General Meeting (AGM).

The term of appointment for an Independent Director is also three years which can be extended by one term subject to approval by the Shareholders in the AGM. For appointment of an Independent Director, the approval of BSEC is obtained to comply with its requirement.

All appointments of the Board is made subject to approval of Bangladesh Bank.

The Managing Director is also appointed subject to the approval received from Bangladesh Bank. However, unlike other Directors, he is not subject to retirement as long as he remains Managing Director.

Ownership Composition

As on 31 December 2016, the Directors of Southeast Bank Limited held 15.33 percent of total shares whereas Financial Institutions and General Public are holding 35.97 percent and 48.70 percent shares respectively.

Corporate Governance Report



Sl.No.

Composition31-12-2016 31-12-2015

No. of Shares Held

% to Total Shares

No. of Shares Held

% to Total Shares

1 Directors 140,573,157 15.33% 168,011,868 18.32%

2 General Public 446,527,386 48.70% 467,707,676 51.01%

3 Financial Institutions 329,849,633 35.97% 281,230,632 30.67%

Total 916,950,176 100.00% 916,950,176 100.00%

Pattern of Shareholdings

i) Shares held by Parent/Subsidiary/Associated Companies and other related Parties

NIL

ii) Ownership of Company’s Securities by the Members of Board of Directors.

Sl.No.

Name DesignationRemuneration/

MeetingRemuneration

Drawn

1. Alamgir Kabir, FCA 19,944,672 199,446,720.00 2.18%

2. M. A. Kashem 20,307,060 203,070,600.00 2.21%

3. Azim Uddin Ahmed 25,490,735 254,907,350.00 2.78%

4. Duluma Ahmed 19,082,742 190,827,420.00 2.08%

5. Jusna Ara Kashem 18,339,525 183,395,250.00 2.00%

6. Md. Akikur Rahman 18,443,731 184,437,310.00 2.01%

7. Rehana Rahman 18,844,145 188,441,450.00 2.06%

8.Sirat Monira,Representing Public Shareholders

120,547 1,205,470.00 0.01%

9.A.H.M. Moazzem HossainIndependent Director

- - -

10.Dr. Quazi Mesbahuddin AhmedIndependent Director

- - -

11.M. Kamal HossainManaging Director (Current Charge)

- - -

Total: 140,573,157 1,405,731,570.00 15.33%

iii) Shares held by Managing Director, Company Secretary, Chief Financial Officer, Head of Internal Control and Compliance and their spouses and minor children.

Sl. No.

Designation Shareholdings as

on 31.12.2016

1a) M. Kamal Hossain

Managing Director (Current Charge)Nil

b) Spouse / Minor Children of Managing Director Nil

2a) Muhammad Shahjahan

Company SecretaryNil

b) Spouse / Minor Children of Company Secretary Nil

3a) Mohammad Aminul Haque, FCA, ACMA (CIMA), CGMA

Chief Financial OfficerNil

b) Spouse / Minor Children of Chief Financial Officer Nil

4a) Haradhan Banik

Head of Internal Control and ComplianceNil

b) Spouse / Minor Children of the Head of Internal Control and Compliance Nil


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

Sl. No. DesignationShareholdings as on

31.12.20161. S. M. Mainuddin Chowdhury

Additional Managing DirectorNil

2. Ziaus Shams ChowdhurySenior Executive Vice President

Nil

3. Pritish Kumar SarkerSenior Executive Vice President

Nil

4. Nasim Sekander Senior Executive Vice President

Nil

5. Haradhan BanikSenior Executive Vice President

Nil

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

Rotation and Retirement of Directors

In terms of Article 105 (i) of the Articles of Association of the Bank, one-third of the Directors for the time being or if their number is not three or multiples of three (3) then the number nearest to one third (1/3rd) shall retire in rotation from office. The following three (3) Directors will retire in the 22nd Annual General Meeting.

i) M. A. Kashemii) Rehana Rahmaniii) Sirat Monira

The brief resume of the above Directors in compliance of Notification No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 of Bangladesh Securities and Exchange Commission (BSEC) is appended in the Directors’ Profile in the Annual Report. Other information about them as required as per the aforesaid Notification is given below.

Name Expertise Memberships Directors inM. A. Kashem Banking Activities Executive Committee

Risk Management CommitteeRose Corner (Pvt.) Limited

Rehana Rahman Banking Activities Audit Committee Bengal Tradeways Limited

Sirat Monira Banking Activities - -

Non-Executive Directors

The Managing Director is the only Executive Director on the Board of Directors of the Bank. All other Directors including the Chairman are the Non-Executive Directors.

Independent Directors

In compliance with the Corporate Governance Guidelines of Bangladesh Securities and Exchange Commission (BSEC) and as per Section-15 of Bank Company (Amendment) Act-2013 regarding appointment of New Directors and the guidelines given by Bangladesh Bank in BRPD Circular No.11 dated 27 October, 2013, the Bank appointed 2 (two) Independent Directors observing all required formalities.

Independent Directors’ Independence

As per existing rules and regulations, Independent Directors are required not to have any significant relationship, whether pecuniary or otherwise, with the Bank, its top management and the Board. The Bank complies with the requirement and appoints Independent Directors who do not hold any shares in the Bank and do not have any family or other relationship with its Board of Directors and its executive management.



The Bank also ensures compliance with Bangladesh Bank’s guidelines and Bangladesh Securities and Exchange Commission’s requirements relating to appointment of Independent Directors and seeks prior approval from Bangladesh Securities and Exchange Commission and Bangladesh Bank before appointing a person as an Independent Director.

Chairman’s Independence

As per the requirements of Notification on Corporate Governance issued by the Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank’s requirements, the post of the Chairman and the CEO (Chief Executive Officer) will have to be held by different person. This compliance requirement has been ensured by the Bank. It has appointed Mr. Alamgir Kabir, FCA as the Chairman of the Board of Directors and the position of CEO (Managing Director-Current Charge) is held by Mr. M. Kamal Hossain. As per the Organogram of the Bank, Chairman and the Directors act as non-executives while the Managing Director is the sole executive director on the Board. In considering the appointment of the Chairman, procedures are observed to ensure that the independence of the Chairman is not hampered.

Chairman and the CEO

The Chairman is independent of the CEO, and this has been in practice since inception of the Bank. This also complies with clause 1.4 of the BSEC’s Notification on Corporate Governance Guidelines.

Independence of the Non-Executive Directors

The Non-Executive Directors enjoy full freedom in discharging their responsibilities. They sincerely try to attend all meetings of the Board and its any Committee of which they are members. They actively participate in discussion on any agenda for a well-thought-out decision.

Role and Responsibilities of the Board of Directors

Structure of the Board

The Board of Directors consists of 11 (eleven) Directors including the Managing Director. The Managing Director is an Executive Director (Ex-Officio). All other 10 (ten) Directors are non-executive directors. Of the 10 (ten) non-executive directors, 7 (seven) are sponsor directors, 1 (one) director is from the public shareholders and 2 (two) are independent directors.

Role and Responsibilities of the Board

The main roles and responsibilities of the Board of Directors as envisaged in the BRPD Circular No.11 dated 27 October, 2013 are the following:

1) approving suitable business strategies

2) fixation of operational budgets

3) approval of financial statements

4) review of Bank’s operational performance towards achievement of objectives

5) approval of policies and operational manuals to establish effective risk management in core banking areas and internal control.

6) reviewing company’s corporate governance standard for further improvement

7) determining Bank’s corporate social responsibility status and taking steps for its improvement

8) developing compliance culture in the Bank

9) approving proposals which are beyond the delegated business / financial / administrative powers of the Management

10) appointment of the Managing Director (CEO) and fixation of his benefits

11) purchase or acquire property for the Bank

12) providing welfare to the employees

13) making donation for any charitable ventures

14) devising annual work plan for goals and monitoring its pace of achievement.


15) analyzing reasons for success or failure of Bank’s annual budget achievement

16) periodical review of Bank’s operational budget achievement

17) taking risk management initiatives

18) review of sufficiency and requirement for internal control efforts of the Bank

19) reviewing Bank’s human resource policy

20) Bank’s financial management and its periodical review

21) approving policies or taking Policy decisions for improvement of operation and compliance culture in the Bank.

Role of the Chairman

The Chairman of the Bank is elected from amongst the Directors after every Annual General Meeting in obedience to the Articles of Association of the Bank. The functional areas of the Chairman and that of the Managing Director are sharply bifurcated within the rules of Bangladesh Bank. But they work in cohesion for the disciplined operation and growth of the Bank.

Responsibilities of the Chairman of the Board

The chairman discharges his responsibilities within the purview of the provisions contained in BRPD Circular No.11 dated 27 October, 2013. His main responsibilities are to :

Give leadership for Bank’s disciplined growth and operation. Ensure non-intervention of any Director in the routine affairs of the Bank. Ensure compliance with corporate governance requirements of regulatory bodies. Bring policies for Board’s deliberations and consideration for Bank’s reforms and development. Determine sense of direction for the Bank, etc.

Annual Appraisal of Board’s Performance

The shareholders elect the Directors in the Annual General Meeting. The directors are accountable to the shareholders. In the Annual General Meeting (AGM), the shareholders freely speak about the performance of the Bank and make a critical analysis of the performance of the Board of Directors. The Chairman replies to their queries made in the meeting. Their constructive suggestions are noted down and implemented for qualitative improvement of the Bank.

As per our existing policy, it is disclosed that no formal annual appraisal of the Board takes place in the Bank.

Role and Responsibilities of the Managing Director (CEO)

The main responsibilities and authorities of the Managing Director are enumerated below:

A. In terms of the financial, business and administrative authorities vested upon him by the Board, the CEO shall discharge his own responsibilities. He shall remain accountable for achievement of financial and other business targets by means of business plans, efficient implementation thereof and prudent administrative and financial management.

B. The CEO shall ensure compliance of the Bank Companies Act, 1991 and/or other relevant laws and regulations in the discharge of his functions in the bank.

C. The CEO shall include information on violation of any law, rules, regulation including Bank Company Act, 1991 while presenting memorandums before the Board or the Committees formed by the Board.

D. The CEO will provide all sorts of information to Bangladesh Bank about the violation of Bank Company Act, 1991 and/ or any violation of Laws, Rules and Regulations.

E. The recruitment and promotion of all staff of the Bank except those in the two tiers below him shall rest on the CEO. He shall act in such cases in accordance with the approved service rules on the basis of the human resources policy and sanctioned strength of employees as approved by the Board. The Board or the Chairman of any Committee of the Board or any Director does not get involved or intervene in such affairs.



F. The authority relating to transfer of and disciplinary measures against the staff, except those at two tiers below the CEO, shall rest on him, which he shall apply in accordance with the approved service rules. Besides, under the purview of the human resources policy as approved by the Board, he shall nominate officers for training. Besides, the CEO shall assume any other responsibility if the Board assigns within the purview of the Rules, Regulations, Acts and Articles of the Bank.

Annual Evaluation of Performance of the Managing Director (CEO) of the Bank

The Board of Directors prescribes the roles and responsibilities of the Chief Executive Officer (CEO) of the Bank. His performance is assessed on certain Key Performance Indicators (KPIs). A few mentionable KPIs for the CEO are to meet the annual budgetary targets of the Bank which was approved by the Board, maximize shareholder value measured through desired ROA, ROI, ROE, EPS and Risk Management as per expectation of the Board, sustainable growth in investment and revenue earning for the Bank, gradual reduction the NPL ratio and improvement in the scores for CAMELS rating. The Board evaluates the performance of the Managing Director in each month when the month-end financial performance of the Bank is placed before the Board for review. Apart from that, the Board seeks MD’s reports on various operational aspects periodically to assess the trend of movement of the Bank in various indicators. MD’s quality leadership to post better performance is always expected. The performance of the Managing Director is evaluated again annually by the Board based on Bank’s operational results mainly in the achievement of operational budgets.

Policy on Training of Directors

Most of the Directors of the Bank are on the Board for many years. They have acquired enough knowledge and acumen to lead the Bank well to the path of progress. The latest legislations on the financial sector and directives of the regulatory bodies are made available to them for their instant information in order that they can discharge their responsibilities effectively. They also attend various seminars and symposiums mainly on corporate governance organized by different professional bodies.

Corporate Governance Training and its Objectives

Corporate Governance has at its backbone a set of transparent relationships among the institution’s Management, Board, Shareholders and other stakeholders. With this in view, Southeast Bank has organized a special training on “Orientation for Potential Managers” where Heads of Branches designated from VP to EVP and a number of Heads of Departments of Head Office participated.

The main topics of the training were:

1. Corporate Governance in Banks-International best practices.

2. Banking Company Act, 1991 and stipulations on corporate governance and

3. Corporate Governance Regulations for banks in Bangladesh

A day long workshop on Corporate Governance was organized in 2016 to create a strong risk management culture. The main objectives of these training programs are:

i. To determine the best practices suited to the organization through structured assessment.

ii. To develop broad-spectrum insights into best practices to understand how they improve coherence in business directions and strategies, drive corporate responsibilities and improve company accountability for stakeholders’ confidence.

iii. To shed light on specific strategies to mitigate risk and maximize opportunities by paving the skills, tools and frameworks for action plans to address challenges and boost Board’s performance.

iv. To help the Board members develop the right strategies for change management and create advance plans for seamless change in order to identify internal and external opportunities and challenges, manage change or implement new approaches.

v. To drive positive Board culture such as skills and leadership style.


Directors’ Knowledge and Expertise in Finance and Accounting

Mr. Alamgir Kabir, FCA, Chairman of the Bank, is a Post-Graduate in commerce. He is also a qualified Chartered Accountant. One Independent Director is a Ph.D in Economics and another Independent Director is a B.A (Hons) and M.A in Economies. He is also a renowned expert in financial journalism. They have enough knowledge and expertise in the field of Accounting and Finance. Most of the other Directors are successful entrepreneurs and professionals. They are well conversant in business, economics and administration.

Directors’ Report in Compliance with Best Practices on Corporate Governance

The status of compliance with corporate governance guidelines of Bangladesh Bank and Bangladesh Securities and Exchange Commission has been given hereafter. Syful Shamsul Alam & Co., Chartered Accountants, duly certified the Bank’s Compliance Status which is re-produced in a page hereafter.

Board meetings and attendance

Sl. No.

Name Designation

Presence of Directors in the Meetings, During their Tenure Remuneration/

MeetingRemuneration

DrawnNo. of Meetings Present Absent

1 Alamgir Kabir, FCA Chairman 23 23 - 8000 X 23 BDT 184.000.00

2 Ragib Ali

Vice Chairman(Ceased to be

Director on and from March 08,

2017)

23 10 13 8000 X 10 BDT 80,000.00

3 M.A. Kashem Director 23 18 5 8000 X 18 BDT 144,000.00

4 Azim Uddin Ahmed Director 23 20 3 8000 X 20 BDT 160,000.00

5 Duluma Ahmed Director 23 21 2 8000 X 21 BDT 168,000.00

6 Jusna Ara Kashem Director 23 19 4 8000 X 19 BDT 152,000.00

7 Md. Akikur Rahman Director 23 13 10 8000 X 13 BDT 104,000.00

8 Rehana Rahman Director 23 21 2 8000 X 21 BDT 168,000.00

9 Sirat Monira Director 23 20 3 8000 X 20 BDT 160,000.00

10Abdul Hye, Representing by Karnafuli Tea Co. Limited

Director(Ceased to be

Director on and from March 08,

2017)

23 3 20 8000 X 3 BDT 24,000.00

11 A.H.M. Moazzem HossainIndependent

Director23 23 - 8000 X 23 BDT 184.000.00

12Dr. Quazi Mesbahuddin Ahmed

Independent Director

(Appointed on April 11, 2016)

23 16 - 8000 X 16 BDT 128,000.00

13 Dr. Zaidi Sattar

Independent Director

(Ceased to be Director on April

11, 2016)

23 1 - 8000 X 1 BDT 8,000.00

14. Shahid Hossain

Managing Director

(Resignation accepted on

March 27, 2017)

23 23 - - -

Note: Mr. Ragib Ali could not attend 13 meetings because of his personal issues.



Related Party Transactions

During the year 2016, the Bank concluded business deals with the following organizations in which the directors had interest. It was determined on the basis of Common Directorship and Bank’s Subsidiaries.

Name of Organization Relationship Nature of transaction

Asia Insurance Ltd. Common Director Insurance Coverage

Southeast Bank Capital Services Ltd. Subsidiary CompanyShare Capital

Invest on Loan

Southeast Financial Services (UK) Ltd. Subsidiary Company Share Capital

Southeast Financial Services (Australia) Pty Ltd. Subsidiary Company Share Capital

Southeast Exchange Company (South Africa) Pty Ltd. Subsidiary Company Share Capital

Board’s Committees and their Responsibilities

The Board has constituted following 3(three) Committees:

i. Executive Committee

Composition: In compliance with the provisions contained in BRPD Circular No.11 dated 27 October, 2013, the Board of Directors re-constituted the Executive Committee comprising 4 (four) members. To comply with regulatory requirement, no member of the Audit Committee is included as a member of the Executive Committee.

Responsibilities: The Executive Committee is a body to deliberate on generally important issues and matters in the execution of operations of the Bank. The committee performs within the power delegated to it by the Board of Directors. The resolution of the Executive Committee are ratified by the Board of Directors. The minutes of the Executive Committee are sent to Bangladesh Bank for their review.

Attendance of members of the Executive Committee in meetings

Sl. No. Name Designation

Presence of Directors in the Meetings, During their Tenure

Remuneration/ Meeting

Remuneration Drawn

No. of Meetings Present Absent

1 Alamgir Kabir, FCA Chairman 8 8 - 8000 X 8 BDT 64,000.00

2 Ragib Ali

Member (Ceased to be Director on and from March

08, 2017)

8 2 6 8000 X 2 BDT 16,000.00

3 M.A. Kashem Member 8 6 2 8000 X 6 BDT 48,000.00

4 Azim Uddin Ahmed Member 8 8 - 8000 X 8 BDT 64,000.00

5Shahid HossainManaging Director

Member(Resignation accepted on

March 27, 2017

8 8 - - -



ii. Audit Committee

Composition of the Audit Committee:

A 5-member Audit Committee was re-constituted by the Board in compliance with the relevant provisions contained in BRPD Circular No.11 dated 27 October, 2013 of Bangladesh Bank. As per rules, any member of the Executive Committee cannot be the member of the Audit Committee. A report of the Audit Committee is included in this Annual Report.

Chairman is an independent Non-Executive Director

The Chairman of the Audit Committee is a BSEC approved independent non-executive director. He is not involved in the day to day operations of the Bank. He is an experienced individual and qualified to be the Chairman of the Audit Committee. He did B.A (Hons) and MA in Economics from Dhaka University. He acted as the Director of Janata Bank Limited for 5 years. He is the Editor of financial daily The Financial Express.

All members are suitably qualified

The members of the Audit Committee are qualified and have years of experience in banking and financial institutions. They are also very competent. Dr. Quazi Mesbahuddin Ahmed is a member of Audit Committee as another Independent Director of the Bank. He did his Masters as well as PhD in Economics from the University of Illinois at Urbana-Champaign, USA. He was the former Managing Director of Palli Karma Sahayak Foundation and Member (GED), Planning Commission Government of Bangladesh. He has publications on development planning, macroeconomic performance, use of foreign aid, budgetary accounts, national income accounts, etc.

Conflict of Interest

The Code of Ethics and Business Conduct require all employees to avoid situations where their personal interests conflict, or may appear to conflict with those of the Bank. Employees are advised to take particular care when they are responsible for dealing with customers, business associaties, agents on behalf of the Bank. Any failure to disclose a conflict of interest leads to a disciplinary action.

Internal Control and Compliance Division’s access to Audit Committee

The Head of Internal Control and Compliance Division has direct access to the Audit Committee and can raise his concerns whenever required. Besides, he presents related memos for the Audit Committee for taking decisions.

Recommendation for appointment of External Auditors

The Audit Committee does an extensive review on the audit work done by the auditors after the audited financial statements have been signed. The Audit Committee evaluates the performance of auditors extensively and ensures that there were no threats to independence or any other issues with the auditors. The Audit Committee scrutinizes the applications of the auditors and recommends for appointment/reappointment of auditors for the next year.

Attendance of members of the Audit Committee in meetings



MeetingRemuneration


1 A.H.M. Moazzem Hossain Chairman 6 6 - 8000 X 6 BDT 48,000.00

2 Duluma Ahmed Member 6 5 1 8000 X 5 BDT 40,000.00

3 Jusna Ara Kashem Member 6 5 1 8000 X 5 BDT 40,000.00

4 Rehana Rahman Member 6 5 1 8000 X 5 BDT 40,000.00

5Dr. Quazi Mesbahuddin Ahmed

Member 6 4 2 8000 X 4 BDT 32,000.00

6Sirat Munira(Ceased to be Member from April 11, 2016)

Member 6 1 - 8000 X 1 BDT 8,000.00

Appointment of External Auditors

M/S Rahman Rahman Huq ‘A’ ranking Audit Firm has been appointed as the External Auditors of the Bank in the 21st Annual General Meeting held on April11, 2016 for the first term. They are eligible to re-appointment as per directives of



Bangladesh Bank in the ensuing 22nd Annual General Meeting. The External Auditors enjoy full freedom in their audit of accounts of the Bank and reporting to the shareholders. The competence and performance of the External Auditors are evaluated by the Bank’s Board Audit Committee.

Services not Provided by External Auditors

M/S Rahman Rahman Huq are the external auditors of the Bank. The services as are specifically barred in the Securities and Exchange Commission Notification No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 are not obtained from the external auditors.

Highlights on Central Bank Inspection

In the year 2016, Southeast Bank Limited (SEBL) received 45 (Forty Five) inspection Reports on Head office and different branches of SEBL from Bangladesh Bank. SEBL submitted compliances on said reports to Bangladesh Bank in time. Appropriate actions have been taken for implementation of the recommendations of Bangladesh Bank inspection Teams.

iii. Risk Management Committee

Composition: A 4-member Risk Management Committee was constituted by the Board in its 486th meeting held on April 11, 2016. A report of the Risk Management Committee is included in this Annual Report.

Attendance of members of the Risk Management Committee



MeetingRemuneration


1 Alamgir Kabir, FCA Chairman 4 4 - 8000 X 4 BDT 32,000.00

2Ragib Ali(Ceased to be Director on and from March 08, 2017)

Member 4 1 3 8000 X 1 BDT 8,000.00

3 M.A. Kashem Member 4 4 - 8000 X 4 BDT 32,000.00

4 Azim Uddin Ahmed Member 4 4 - 8000 X 4 BDT 32,000.00

5 A.H.M. Moazzem Hossain Member 4 4 - 8000 X 4 BDT 32,000.00

• Mr. Ragib Ali could not attend three meeting because of his personal issues.

Internal Control and Risk Management

Internal Control

The Board of Directors of Southeast Bank Group ensures maintenance of a sound system of internal control to safeguard assets. The Board through its Audit Committee conducts an annual review and evaluate effectiveness of the system of Internal Control of the Bank.

Establishment and Review of Internal Control System

A report on Establishment and Review of Internal Control System is included at in this report.

Identification of risk to which SEBL is exposed internally and externally

The risks related issues of the Bank are looked after by the Risk Management Committee of the Board. A report on Risk Management is included at page no. 149 of this Annual Report.

Vision, Mission and Strategy approved by the Board

Vision, Mission of the Bank

The vision, missions statement and the strategy of the Bank have been included in the beginning pages of the Annual Report. Those were approved by the Board. The Board firmly adheres to them.


Business objectives and areas of business focus The Board always sets business objectives and areas for focus in consistency with the market. The latest business objectives and areas of business focus can be found in the “Strategic Priorities Statement” of the Bank at page no. 10 in this Annual Report.

Strategies to achieve business objectives

Our strategies to achieve business objectives are elaborately discussed in the “Strategic Objectives” as contained in this Annual Report at page no. 9.

Ethics and Compliance

Code of Conduct for Directors

The Group Chairman’s Report contains the issue.

Code of Conduct for Bank’s Employees

Southeast Bank has a Code of Conduct and Ethical Guidelines for Bank’s employees which are integral parts of the Service Rules and Regulation for the employees of the Bank. The employees of the Bank comply with the code of conduct and requirements of ethical principles.

The Board’s commitment to establishing high level of ethics and compliance within the organization

The Board of Directors has always been deeply committed to establishing a high level of ethics and compliance among all employees of the Bank. It has always encouraged the management to ensure that everyone maintains a high ethical standard within the Bank. The Board guides the management on policies that should be adopted and followed by everyone in the Bank.

Management Committees and their responsibilities

Ensuring effective corporate governance is one of the top priorities of the Bank management for realizing the objectives advocated in our management philosophy. A clearly defined organizational structure with definite lines of responsibility and delegation of powers to different echelon of the management are in place in the Bank. To streamline functions, the following Committees are actively working in the Bank: Management Committee (MANCOM)

A Management Committee (MANCOM) is working in the Bank. It is composed of senior members of the Management Team. Its main functions are to address general issues of importance, introduce new products, frame strategies for improvement of operations, evaluate different types of risks, monitor internal control structure and to review effectiveness of the internal control system. To streamline the management functions further and to quicken decision making process based on best analysis and appraisal, sub-committees of the Management Committee for the following issues were constituted:

(a) Product Development and Marketing (b) Strategic Planning Issues and (c) Corporate Governance and Administrative Issues.

The following Sub-Committees of MANCOM are also functioning in the Bank:

i) Head Office Credit Review Committee (HOCRC)

Two Credit Review Committees, one headed by the Additional Managing Director (Corporate Banking) of the Bank and the other headed by the Senior Executive Vice President, Credit Risk Management Division, have been constituted for appraisal and quick disposal of credit proposals. Credit proposals that do not merit considerations are declined. Credit proposals that merit considerations in the opinion of the Credit Review Committee are presented before the competent authority as per the delegation of business power for approval.

ii) Asset Liability Management Committee (ALCO)

Asset Liability Management Committee consists of the Managing Director, Additional Managing Directors, the Deputy Managing Directors and strategically important Divisional Heads of Head Office.



iii) Central Compliance Unit

Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) are getting added importance day by day. All issues relating to AML and CFT are managed and monitored by the Bank. As required by the regulatory authority, Central Compliance Unit (CCU) has been working on the issues in the Bank.

iv) Integrity Committee

As instructed by Bangladesh Bank, a 6-Member Integrity Committee of the Bank headed by a Additional Managing Director was constituted on November 18, 2013. One Senior Executive Vice President of the Bank is the Focal Point of the Committee. The Committee sits in meeting to discharge its responsibilities effectively.

Function of Integrity Committee

The functional areas of the Integrity Committee include, but not limited to, implementation of National Integrity Strategy, implementation of Bank’s action-plan, resolving identified problems related to integrity, complaint management, reporting to the regulators, performing relevant activities in line with the guidelines of Bangladesh Bank regarding implementation of Integrity Strategy, etc.

v) Committee for Evaluation of the Effectiveness of Management Reporting System

As advised by Bangladesh Bank, a 9- Member Committee for Evaluation of Management Reporting System (MRS) has been constituted in the Bank with a Additional Managing Director as its head.

vi) Tender Committee

Transparency is very important in procuring things and services for the Bank. A 7-members Tender Committee is actively functioning in the Bank.

vii) Procurement Committee

The procurement policy of Southeast Bank Limited is designed to ensure that the purchase of all goods, services and works required for the satisfactory operation of the Bank is done in a transparent, timely and efficient manner.

viii) Taskforce for Monitoring and Recovery of Re-Scheduled and Re-Structured Loans

A 8-Member Taskforce for Monitoring and Recovery of Re-Scheduled and Re-Structured Loans are working in the Bank. The Taskforce frequently sits in meetings.

ix) Taskforce for recovery of classified and written-off loans

The increase of non-performing loans (NPLs) and written-off loans has a negative impact on profitability, capital adequacy, asset liability management and over all reputation of the Bank. Therefore, it was essential to strengthen recovery drive to downsize the non-performing/classified loans and written-off loans through cash recovery. From this point of view two taskforces with high level executives / officers were formed / reformed at Head Office in the year 2012 – both are headed by two Additional Managing Directors of the Bank.

The taskforces review the recovery progress of classified and written-off loans on monthly basis and provide necessary guidelines to the branches accordingly. The taskforces identify the reasons for becoming the loans non-performing in each and every individual case and chalk out the strategy of recovery upon discussion meeting / dialogue with the concerned borrowers at Head Office / Branch. The taskforces also review the court cases / suits against the defaulted borrowers and continue follow up with the panel lawyers of the Bank for early disposal of the suits. The members of the taskforces visit clients factory, office, security / mortgaged properties as and when needed. They also place their observations and recommendations before the competent authority for their guidance and next courses of action.

x) IT Steering Committee

An IT Steering Committee has been formed in 2012 comprising 06 (six) senior officials of the Bank for overall supervision of ICT Operations and ICT Projects Management.


Supervisors’ Role

In order to supervise and monitor the performance of the Branches, a supervisory system for the Branches has been prevailing in the Bank. The Branches are supervised by a group of executives working at Head Office. The Supervisors of the Branches monitor the activities of the Branches through regular contacts with Heads of Branches and evaluating their operational performance through periodic field visits. They work as focal points between Head Office and Branches to resolve functional problems of the Branches and provide proper guidelines in preparing business strategy and achieving budgetary goals.

The meetings of the Supervisors of the Branches with top management are held every two months. The performance of the supervisors is also evaluated in the meetings which are presided over by the Managing Director.

Remuneration Committee and Activities

The Bank cannot have more than three Committees of the Board of Directors as per law and rules of Bangladesh. For obvious reasons, activities relating to remuneration are done by the Board itself. However, the Management Committee of the Bank assists in the formulation of remuneration related policies and practices in alignment of Bank’s short and long-term business objectives.

Benefits provided to the Directors and the Managing Director

In accordance with the guidelines of Bangladesh Bank, the following facilities can only be given to the Directors.

Chairman :An office chamber, one Private Secretary / Office Assistant, a telephone in office, one mobile phone for use within the country and a full time car.

Directors : Fees and other facilities for attending each meeting of the Board or its any Committee.

Managing Director :Only those benefits as are agreed upon in his contractual appointment and as are approved by Bangladesh Bank.

Disclosure of key policies with regard to remuneration of directors, senior management and employees

All employees including the Senior Management employees are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability. The remuneration also stresses on ensuring internal and external pay equity.

Human Capital

The detailed discussion on Bank’s Human Capital has been presented at Page no. 191 of this Annual Report.

Communication to Shareholders and Stakeholders, and Company’s policy/strategy to facilitate effective communication with shareholders and other stakeholders

Southeast Bank ensures that all shareholders are notified at least 14 days before the AGM so that all shareholders may attend it. Also all other types of accounts (Quarterly and Half yearly) or information are updated on the website and notified to all stakeholders on a duly basis. The Bank tries to maintain liaison with all major shareholders as far as possible and ensures that all stakeholders are informed of the bank’s activities on a routine basis. SEBL also holds dialogue with the shareholders as far as possible and practicable for the progress and wellbeing of the Bank.

The Directors appreciate the importance of general shareholders of the Bank and use the Bank’s AGM as an ample opportunity to communicate with them. SEBL provides copies of Annual Reports in order that these are made available to them well in advance for detailed and constructive discussion. It is the company’s policy to give the shareholders the opportunity to ask questions about its activities and prospects at the AGM. The Board also structures these meetings so that shareholders can vote on each agenda by proposing resolutions.

Company’s policy on ensuring participation of shareholders in the Annual General Meeting and providing reasonable opportunity for the shareholder participation in the AGM

SEBL sincerely tries to ensure that all shareholders can participate in the AGM. Annual Reports are sent at least 14 days before the AGM to ensure all shareholders are notified about the event date, place and time. Also, SEBL always ensures that AGM is held at a convenient place where all shareholders may attend. Notices to shareholders are also published in



the daily newspapers and through the digital media as well. To ensure compliance with regulatory bodies, SEBL ensures that it publishes Bank’s Financial Statements in two widely circulated newspapers in English and Bangla and are sent to the stock exchanges and BSEC.

SEBL ensures effective communication with the shareholders and encourages shareholder participation at the AGM. The good number of shareholders that spoke in the Bank’s each AGM in the past bear the testimony of the statement. SEBL connects with the investors through AGM, EGM, Annual Report and Company’s website. All of the Bank’s publications to the market may be retrieved through the Company’s website. Shareholders are offered the chance to evaluate the performance of the Board regarding the operation of the Bank. They are also given scope to make queries to the Company’s auditors concerning topics linked to the audit of the Company’s financial statements at the AGM.

Environmental and Social Obligations

Southeast Bank integrates environmental and social obligation into all its business activities with the belief that success is not only measured by financial results. The Bank has a strong stake in the society through investments and projects which takes its banking role one step further. Southeast Bank supports its clients to be conscious about environmental issues. SEBL persuades its customers to avail facilities for renewable energy generation and other environmentally beneficial projects. The Bank has set guideline, namely “Southeast Shobuj Jibon” targeted to efficient use of electricity, water, paper and re-use of equipments. We believe that every small ‘GREEN’ step taken today would go a long way in building a greener tomorrow.

Sustainable Financing

The Risk Management Committee of the Board of Directors supervises and takes decision in principle and provide strategic directions regarding sustainable banking and sustainable finance (environment friendly banking) of the Bank. The Committee also monitors that green financing activities of the Bank are taking place to achieve sustainable development goals as per guidelines of Bangladesh Bank.

Green Award

As part of environmental and social obligation, SEBL wants to inspire the individuals and organizations working actively to preserve environment. With this end in view, the Bank has introduced ‘Southeast Bank-The Financial Express-Policy Research Institute Green Award’. The award aims at recognizing and honoring individuals and organizations for significant contributions towards achieving environmental sustainability through green business and operations, knowledge management and community engagement. The award also aims at boosting synergies between the Bank and the climate warriors for conserving environmental resources.

Dr. Mohammed Farashuddin, Chairman, Southeast Bank-The Financial Express-Policy Research Institute (SEBL-FE-PRI) Green Award Trust, Fazle Kabir, Governor, Bangladesh Bank, and Chief Guest of the ceremony, Alamgir Kabir, FCA, Chairman, Southeast Bank Limited along with other members of the Trust are seen in the Green Award distribution ceremony.


Date: March 29, 2017

The Board of DirectorsSoutheast Bank LimitedEunoos Trade Centre52-53 Dilkusha C/ADhaka-1000

Sub: Managing Director’s/CFO’s Declaration to the Board regarding integrity of financial statements.

We submit the following in our capacity of the Managing Director (CEO) and the Chief Financial Officer (CFO) of the Bank.

In accordance with the notification of Bangladesh Securities and Exchange Commission No. SEC/CMRRCD/2006-158/134/Admin/44 dated 7 August, 2012, we solemnly declare that:

i) We have reviewed the financial statements for the year 2016 and to the best of our knowledge and belief:

a) These financial statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

b) These statements together present a true and fair picture of the company’s affairs and are in compliance with existing accounting standards and applicable laws.

ii) To the best of our knowledge and belief, there is no transaction entered into the books of the bank during the year 2016 which is fraudulent, illegal or in violation of the Bank’s code of conduct.

Mohammad Aminul Haque, FCA, ACMA (CIMA), CGMA M. Kamal HossainChief Financial Officer Managing Director (Current Charge)

Managing Director’s and CFO’s Declaration on Integrity of Financial Statements to the Board



Corporate BankingThe Corporate Banking Division of Southeast Bank is engaged in planning, developing and managing the Bank’s corporate, commercial and institutional businesses to ensure desired profitability and sustained growth in line with the Bank’s strategic plans, credit policies and business objectives.

Southeast Bank finances its corporate clients generally in the following ways –

Export Finance Project Finance Trade Finance

Working Capital Finance

Besides, Southeast Bank has also set up a Cash Management Services Unit which mainly looks after mobilization of low-cost/ no-cost funds of the corporate houses by providing various tailor made services to them. In the coming years, the Bank will exert enhanced effort for more dynamism in such cash management activities.

In the year 2016, Southeast Bank’s strategic priorities were growth and profitability whilst maintaining asset quality and strengthening the foundations for future growth. During the period, the Bank continued to provide comprehensive and innovative banking solutions to its corporate clients including financial institutions.

Maximization of profitability through promotion of lending products and appropriate loan pricing is the primary focus of the Bank’s Corporate Banking Division (CBD). Diversification of credit portfolio in promising and productive sectors is also one of the prime objectives. The strategy of CBD is to maintain a prudent mix of various client segments and products, economic sectors, geographical locations, currency and maturity commensurate with economic and business trend, life cycle of the products, demand-supply gap, social obligation etc.

The overall credit policy of Southeast Bank has already been devised in accordance with Bangladesh Bank’s guidelines to ensure effective credit risk management and compliance with the regulatory framework. Corporate Banking activities of Southeast Bank are carried out addressing appropriate credit risk environment, sound

credit approval process, suitable credit administration, measurement and monitoring process and adequate control over credit risk.

Southeast Bank sets specific industry-wise lending caps considering the existing concentration, risk appetite, future growth opportunities etc. Lending caps discourage concentration of Bank’s global loan portfolio into one particular sector and encourage diversification of the total loan in various sectors with a view to minimizing concentration risk and to maximize the future growth of the Bank.

On the other hand, considering the cyclical aspects, economic condition, seasonal fluctuation, political environment, related risk factors as well as growth appetite in each sector, Corporate financing activities follows a prudent sector wise budgetary allocation as per annual credit plan.

Based on the policy guidelines given by the Board of Directors and catering to the ongoing requirements of the entrepreneurs and the economy, the management of the Bank periodically updates the policies and strategies in line with policy-parameters of the Central Bank with due approval of the Board of Directors.

Export Finance

The export sector in Bangladesh has grown up significantly making a major contribution to the national economy and is playing an important role in employment generation and foreign currency earnings. In the fiscal year 2015-16, Bangladesh exported goods worth USD 34.25 billion where the contribution of RMG sector is 82 percent. Southeast Bank has been financing in the export sector on priority basis and at present, a sizeable portion of Bank’s total loan portfolio belongs to around 250 export clients. During the year 2016, the Bank has handled export business to the tune of USD 1,862.61 million.

A dedicated unit named as ‘RMG, Textile and Export Financing Unit’ at Head Office has been handling the credit portfolio of export-oriented clients. This clientbase includes entrepreneurs in RMG - both Woven & Knit, Sweater, Textiles, Home Textiles, Spinning, RMG accessories, Jute and Jute goods and Leather goods. Southeast Bank

Management Review, Responsibility and Evaluation

Work Order Finance Real Estate Finance Syndicated Finance


extends both project finance and working capital finance to its export clients.

The teams working in export financing in Head Office and Branches not only conduct detailed and proper analysis of the clients’ requirements but also ensure meticulous compliance with Bank’s RMG /Export financing guidelines, Export and Import policies, Foreign Exchange regulations, Circulars of Bangladesh Bank and other prevailing rules and regulations of the regulatory bodies. Periodic visits are made to clients’ factories as a part of regular monitoring.Graphical presentation of year-wise performance of Southeast Bank’s export business has been shown under “Sustainability Appraisal and Integrated Reporting”.

Trade Finance

A significant portion of the Bank’s credit portfolio is distributed amongst trading sector. The portfolio is diversified in commodity trading, construction and supply business, import financing, work order financing, stopgap funding, fixed asset procurement, bill purchase etc. This Trade Finance and General Credit unit of Corporate Banking deals with various client segments for different economic purposes in trading, manufacturing and service sectors.

The Trade Finance and General Credit proposals are forwarded to Head Office by the Branches dispersed all over the country. The credit applications are then processed for approval by the Trade Finance and General Credit unit complying with Bank’s credit policy and rules and regulations of Bangladesh Bank and other regulatory authorities. During this process, the officials meet the clients and visit their business premises for better understanding of their needs and for appropriate evaluations of their proposals. This process of appraisal is done for all types of credit facilities including Term Loan, Overdraft, Time Loan, Letter of Credit, Loan against Trust Receipt, different types of Bank Guarantees such as Bid Bond, Performance Guarantee, Advance Payment Guarantee, Security Bond, Customs Guarantee etc.

In the year 2016, a good number of corporate clients have availed Trade Finance and General Credit products from the Bank. During this period, the Bank extended facilities in the form of working capital credit as well as Term Loan to both existing and new clients in the fields of food items, edible oil, other consumer items, food processing, rice mill, feed mill, petroleum, chemical, printing & packaging, publishing, ship breaking, construction materials, furniture & saw mill, IT, electronic goods, deemed export etc.

Project Finance

Southeast Bank provides Project Finance for setting up / BMRE of Manufacturing and Service Industries. Project Finance is generally provided in the form of Term Loan to facilitate the client for procurement of fixed assets, such as capital machinery, auxiliary machinery & equipment, shed / building etc. Project Finance is usually followed by Working Capital Finance to meet day to day operational expenses of the project so that the project can run profitably to repay the Bank’s dues.

A detailed appraisal called feasibility study is carried out before financing a project. The major aspects include Technical Appraisal, Marketing Appraisal, Financial Appraisal, Managerial Appraisal and Organizational Appraisal. Working Capital assessment is also done for Working Capital Finance for the project to ensure smooth operation of the project.

Since inception, Southeast Bank has been an active partner of the private sector in developing large and medium scale industries of the country. The Bank has financed setting up of various industrial units in the areas of Spinning, Textile, Garments, Pharmaceutical, Ceramic, Cement, Paper, Telecommunication, Steel etc. The Bank has also extended project finance to several service industries, such as hotel, resort, hospital, educational institution, transport, filling station etc. The Bank has also financed a good number of real estate projects.

Work Order Finance

Southeast Bank provides financial support – both funded & non-funded credit facilities to the contractors to execute work orders issued by various departments/ divisions of Government as well as different private organizations acceptable to the Bank. The Bank participated in several mega projects of the Government by financing the relevant contractors. In 2016, the Bank continued to facilitating reputed contractors having sound track record for accomplishment of project of LGED, RHD, Railway, City Corporation and other organizations. Bank’s work order financing products also cater to the need of contractors engaged in execution of supply orders.

Real Estate Finance

Real estate is an important sector for the development of an economy. Private sector real estate business has a huge growth prospect in this densely-populated country since a large segment of population belonging to middle and growing middle class prefer to buy apartments. Despite



such potential opportunity, the housing sector has been facing setback since 2007/2008. The real estate sector had to suffer severe sales-decline during this period. There is a long queue of unsold flats now. All the entrepreneurs in this sector have been suffering from sluggish sales trend.

Banks and other financial institutions seem to be reluctant to finance the developers in the prevailing condition of this sector. In the year 2016, Southeast Bank’s policy was to maintain the portfolio in real estate sector in a good shape and side by side to finance new real estate projects having extraordinary potentials. The Bank is of the opinion that the full opportunity of the housing finance sector can be realized only if all-out efforts are made to develop the housing finance market on sustainable and sound footing.

Syndicated Finance

The main objective of the Syndicated finance and Club finance is to spread and share the credit risk among and with all the participating Banks for specific investment. Southeast Bank is acting as one of the Lead Arrangers as well as participants in the Banking industry of the country for development/ operation of different projects under Syndication/ Club Financing Arrangement. Some of the sectors financed by the Bank through Syndication are textile, cement, steel, ceramic, refined sugar & oil, paper & pulp, aviation, hospital, University, telecom, power, aviation etc.

As a Lead Bank, Southeast Bank arranged a good number of Syndication deal with total facility of around BDT 3500.00 million. On the other hand, Bank’s participation in different Syndicated/ Club finance arrangement was around BDT 9000.00 million till 2016. In 2016 the Bank participated in a number of Syndication deal with total approval of BDT 1150.00 million and USD 12.50 million in petroleum refinery and steel sectors.

Performance in 2016

Funded Business

In 2016, the Banking Industry of Bangladesh experienced a slow credit growth due to sluggish credit demand by

the private sector and it was obviously a major challenge for Southeast Bank. The Bank has always focused on the ‘quality’ aspect of credit with cautious augmentation of its credit portfolio. During the year 2016, the Bank exerted continuous and all-out effort to attract more ‘quality’ customers to maintain the ongoing growth of loans & advances and strengthen further its credit portfolio.

In 2016 the Bank successfully accelerated growth of its funded business. The accumulated loans and advances of the Bank stood at BDT 191,865.59 million as on 31.12.2016 compared to previous year’s position at BDT 168,878.46 million registering a growth of 13.61 percent over the previous year. The Bank was able to maintain a prudent Loan Deposit Ratio throughout the year and it stood at 83.43 percent at the year end.

Graphical presentation of year-wise trend of loans and the distribution of loans in respect of different sectors, divisions, areas have been shown under “Sustainability Appraisal and Integrated Reporting”.

Non-funded Business

The Bank registered a positive growth of 12.99 percent in import business in 2016 as compared to that of previous year. The volume of import business payments (FOB) in 2016 was USD 2,179.29 million while the same in 2015 was USD 1,928.76 million. The main import commodities were capital machinery, raw cotton, scrap vessels, cement clinkers, wheat, edible oil, petroleum products, yarn, fabrics, garment accessories and other consumer items.

The export business of the Bank increased by 15.96 percent in 2016. In the year 2016 the volume of the Bank’s export business was USD 1,862.61 million which was USD 1,606.20 million in the previous year. The main export commodities were readymade garments, knitwear, frozen food, shrimp, handicrafts, jute & jute goods etc.

The Bank registered a positive growth in Bank Guarantee business too. The volume of this business was BDT 16,369.36 million in 2016 while it was BDT 15,245.19 million in 2015, posting a growth of 7.37 percent.


Retail Banking

Southeast Bank has started its Retail Banking Division in 2012. Since then Southeast Bank has been offering very good services to its customers in every aspect of retail banking. This year with the help of deposit campaign bank’s liability marketing team has gathered substantial amount of low cost / no cost fund which is very essential for the bank. At the same time through our branch, Retail Banking Division has disbursed good number of retail loans as well.

Southeast bank is structured in a way so that all the retail products and services can be accessible from all the branches of the bank. Therefore, our retail loan portfolio is not based on only divisional cities. To tap the opportunity of the rural areas bank has also introduced Rural Home Loan under prudential guideline of Bangladesh Bank. As a

result of collective efforts of the bank retail advances grew by 35.82 percent during last year while NPL was only 2.16 percent.

Success of Retail Banking depends on diversified product offering and importance of retail deposit for the bank is enormous. By predicting emerging challenges to the banking sector Southeast bank has introduced two new deposit products. Feedback from the customers is very positive regarding the features of the products.

Retail Banking Division of Southeast bank is prepared and well structured to face any future challenges and dedicated to attaining sustainable growth in Retail business by providing good quality service with minimum turnaround time.

Home loneRural home loneCar lonePersonal lone

8%2%

40%

50%

Make a bar chart on growth

Year Number of A/C Growth A/C Volume (BDT in millions) Growth of Volume

2014 1770 N/A 577 N/A

2015 1931 9.10% 734 27.31%

2016 2160 11.86% 997 35.82%

Retail Lone Composition



Small & Medium Enterprises

Small and medium enterprises (SMEs) play a significant role in Bangladesh’s economic development, generating large scale employment and facilitating inclusive growth. A strong SME sector is crucial for building a resilient and dynamic corporate sector. At the same time, SMEs also face multiple challenges in terms of scale of production, increasing competition and rapid adoption of innovative practices in their operations. Southeast Bank offers a comprehensive suite of banking products and solutions to SMEs for meeting their business and growth requirements. Our long-standing experience of partnering with SMEs has enabled us to develop non-traditional techniques for assessing credit risks. These techniques are unique and provide appropriate solutions customized to their needs. The Bank also offers supply chain financing solutions and small-ticket funding to the channel partners of large corporate clients. The Bank has set up dedicated desks in all branches to assist SMEs. Year 2016 continued to remain a challenging year for SMEs due to the gradual pick-up in economic activity, high leverage among corporates and

subdued investments. The Bank continued to pursue a strategy of calibrated growth of the SME portfolio, with higher focus on managing concentration risks, diversification of portfolio, monitoring and enhancement of collateral.

Outstanding SME loan of the Bank as on December 31, 2016 stood at BDT.41,287.20 million while it was BDT.28,946.70 million as on December 31, 2015, registering a growth of 42.63 percent. In 2016, the Bank disbursed BDT.40,206.00 million to clients through all its branches, which is 13.73 percent higher than that of 2015.

Growth to our loan to Small and Micro Enterprises is very remarkable. Since we felt that access to finance for smaller segment of SMEs is more challenging, we have concentrated more in this segment and as a consequence in last year small, micro & cottage enterprises outstanding experienced 21.95 percent growth making Small Enterprises 51.45 percent of SME portfolio.

SME Business-Disbursement Growth BDT in million

Year Target Achivment

2012 21000 18126

2013 21200 26501

2014 25000 30877

2015 27500 35349

2016 30000 40000

BDT in million

Year 2012 2013 2014 2015 2016Target 21000 21200 25000 27500 30000

Achivment 18126 26501 30877 35349 41287

SME, Agri-Credit and Financial Inclusion

ServiceTradeManufacturing

Sectorwise Disbursement in SME

25%

21%54%

MicroSmallMedium

Chart Titel

8%

42%50%

2012 2013 2014 20162015

21000 18126 26501 25000 30877 27500 35349 30000 4000021200

SME Disbursement over the Year

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SME Strategy

In 2016 the bank successfully implemented a medium term SME strategy and segregated SME Business and underwriting from other Business Segments. Now SME loan is also separated from Agricultural loan as Bank has created a separate Agri. Credit cell this year. As evident in our disbursement in SME segment and due to Branch expansion in SME centric areas SME business continues to remain the fastest growing business segment in the Bank. Almost all the branches opened during year 2016 are located in areas where SME business has high potential. Bank will initiate a focus group discussion on SME development where all Branches will participate to find ways for augmenting SME Business

Cluster Based SME Financing

Currently, cluster-based SME development is a popular approach for entrepreneurship development, SME promotion and industrialization with a view to facilitating employment generation and poverty alleviation around the world, especially in emerging economies. In Bangladesh it is considered as the most effective, economically viable and maximum output-oriented approach for economic development.

As per guidelines of Bangladesh Bank, SEBL has already adopted a cluster-based financing approach for SMEs in some industrial sectors such as Textile, RMG Accessories, Food processing, Dairy & Poultry, Fisheries etc. We are hopeful that we will be able to expand cluster based SME financing all over the country in the upcoming years through development of new clusters.

Southeast Bank is planning to role out a Cluster Financing for Hosiery industry in Pabna in collaboration with SME foundation in 2017.

Market &Products

CreditRisk

Management

SMEBanking

Performance

SalesDelivery

Strategy: SMEfocus andExecution

Capabilities

IT &MIS

AssetQuality

OperatingE�ciency

RevenueGeneration

Rural and Inclusive Banking

Bangladesh rural market presents significant growth opportunities as the market adapts to rapidly growing mobile connectivity and access to formal financial services. The Bank’s rural lending strategy is focused on leveraging these trends and building a sustainable model for extending financial services to rural customers. This is being made possible by offering them a comprehensive product suite backed by Mobile based technology Service. The Bank has set up a distribution network over the last few years to reach customers in this market. The Bank has developed customized financial products and services to cater to a wide range of rural customers including farmers, traders, processors as well as rural entrepreneurs. Bank is disbursing easy loan to Tk 10.00 account holders under a Bangladesh Bank refinancing scheme. School Banking is also a part of our financial inclusion strategy.

The Bank offers various types of loans covering the entire agricultural value chain including loans to seed/input dealers, crop loans and loans for purchasing irrigation equipment, raising cattle and purchasing farm equipments trough MFI (Micro Financial Institutions) linkage.

Agricultural and Rural Credit

Agriculture is the main life-blood for the economy of Bangladesh. Almost 47 percent of the total labor force of the country and 85 percent of rural workers of the country are directly involved with agricultural activities like crops, fisheries, livestock and forestry which ensure food security, create self-employment, diversification of income generating activities and better standard of living for the people. Agriculture, as a sector contributes 17 percent to the national GDP.

Agricultural credit has significant importance for the socio-economic development of the country since it has increased production in agriculture sector. This is also a priority sector of both the Government and the Bangladesh Bank to ensure food security and nutrition, poverty alleviation, employment generation and accelerate the financial inclusion program. To see our country as a middle income country, our GDP growth should be over 7% which may not be possible without 4%-4.5% agricultural growth. Considering the above, Southeast Bank Limited has been continuing proactive policy and program to boost up agriculture financing to the farmers and agricultural entrepreneurs with utmost importance.

We also believe that if the nation’s agriculture and rural based economy walks through a techno-based eco-friendly process, all the targeted goals will be achieved in a sustainable way. With the same vision, Bangladesh Bank announces a farmer-friendly agriculture and rural credit policy for each fiscal year. Keeping this in mind, our bank sets the agriculture and rural credit policy for each fiscal year. Our bank has also set sector wise (crops cultivation, irrigation machinery, agriculture machinery, pisciculture



farming, cattle/dairy and beef fattening, poultry farming, crop storing and marketing, poverty alleviation program and other activities related to agriculture) and branch wise yearly and monthly target for smooth allocation of agriculture credit. Our bank also extends Agriculture / Rural Credit as one of the major tools to bring the rural and unbanked people specially the farmers into the banking channel as financial inclusion program which plays a vital role in the rural economic development of the country. In the absence of own branch network, the bank extends agriculture credit facility through third party networks like well reputed NGOs / MFIs. It is worth mentioning that while using third party network for agriculture financing, the bank selects the NGOs/MFIs very meticulously to ensure proper utilization of the fund. The Bank has disbursed a quite large portfolio of agriculture loans during the year, which are listed below.

Sector of disbursementLoan disbursed

during 2016(BDT in million)

Disbursement at percent (%)

Crops / Vegetables cultivation

2160.37 61.0

Fisheries 389.57 11.0

Livestock 733.11 20.7

Irrigation equipment 106.25 3.0

Crop storage & marketing 35.42 1.0

Solar 10.62 0.3

Poverty Alleviation 106.25 3.0

Total 3541.59 100

Agriculture loan @4% rebate interest rate

There is a large demand for pulses, oil seeds, spices and maize in the country. But the production of these crops is not sufficient. As a result, we have to spend huge amount of foreign currency for importing them. In order to encourage production of such crops and disburse loan to this sector, Bangladesh Bank has set the concessional interest rate of credit disbursed in the cultivation of pulses, oil seeds, spices and maize at farmers level at 4%

from 01 July, FY 2010-2011 under interest-loss subsidy facilities of the Government. The Central Bank (BB) has advised all banks that credit facilities shall be allowed at rebate rate (4%) under interest loss compensation scheme of Government for cultivation of pulse, oil seeds and spices. Bank may receive 6% interest loss compensation from Government through Central Bank after realizing cultivation of the loan from borrower in full. Southeast Bank Limited has positive intention to contribute in flourishing these crops in the country with a view to reducing import dependency. In line with this, the Bank has financed a sizeable amount in cultivation of maize, oil seeds and spices. Credit facilities are allowed at rebate rate (4%) for cultivation of maize, oil seeds and spices under interest loss compensation from Government. During the year of 2016, our bank has disbursed Tk.1.90 million among 7 farmers against the target of Tk.1.50 million at rebate rate (4 percent) for cultivation of maize, oil seeds and spices. All these indicate our endeavor to bring more and more un-banked rural people in banking system by providing them with agriculture credit at a lower interest rate.

Crops Loan disbursed

during 2016(BDT in million)

No. of clients

Oil seeds 0.50 1

Maize 1.00 4

Spices 0.40 2

Total 1.90 7

Target and achievement

Southeast Bank Limited has achieved the Agricultural/Rural Credit disbursement target of Tk. 279.39 crore (achievement is 116.41% of the target) against total target of Tk. 240.00 crore for the FY 2015-2016. In line with the Agricultural & Rural Credit Policy and Programme of Bangladesh Bank, a target of agricultural credit amounting to Tk.295.00 crore has been set for Southeast Bank Limited for the FY 2016-2017. Out of total target, Tk. 167.23 crore has been disbrused during the period from July 2016 to December 2016 which is 56.69% of the yearly target.

FY Target Achievement Achievement in percent (%)

2015-16 240.00 279.39 116.41

Agricultural / Rural Credit disbursementtarget & achievement 2015-16BDT in crore

Target Achievement Achievement inpercent (%)

240.00 279.39 116.41

Crops & vegetables cultivationFisheriesLivestockIrrigation equipment

SolarPoverty Alleviation

Corp storage & marketing

Agricultural loan disbursement during 2016

3%

20%

11%

1%0.3%3%

61%


Women Entrepreneur Financing

Development of women entrepreneurs is an embedded element of SME financing. In our experience we observed that “Access to Finance” is a major challenge for a business owned by women especially during the initial years of starting a business. To address the issue, Southeast Bank has come forward to help the women entrepreneurs and has given utmost emphasis on the growth & development of women entrepreneurship. The Bank has a separate dedicated product named “Southeast Shuprova” for women entrepreneurs. To encourage women Southeast Bank provides loan to the women entrepreneurs at much easier terms & conditions including low interest, relaxed collateral requirement etc. Bangladesh Bank’s refinancing windows also help women led enterprises. Southeast Bank has 2 exclusive branches dedicated to provide banking services to women enterpreneurs. In 2016 the Bank has disbursed BDT 1,610.80 million to business exclusively owned by women (SME) entrepreneurs

Success Story of an Woman Entrepreneur

Secondary School Certificate (SSC) passed Suchana started her career at Ramganj of Laxmipur district. Initially she used to take orders from local tailoring shops. Later she started doing Block, Batik etc. Since her husband was staying abroad, she herself had to take care of her family and children. Of her two sons, one was handicapped. For this reason she came to Dhaka to get her son admitted to a special school. But all these adversities could not hold back her entrepreneurial spirit. After arriving Dhaka, she hired a shop at Bailey Road in 2011 investing Tk.4.00 lac and started trading business of saree. In the same year, she expanded her business by taking another shop with Tk.7.00 lac at “Fortune Shopping Mall” located at Mouchack Intersection. Now she is a successful woman entrepreneur. At present, her capital stands at about Tk.30.00 lac. We are proud of financing a hardworking entrepreneur like her and be a part of her adventure.

A Portrait of SME Entrepreneur



Glimpses of Some Projects Financed by SEBL

Southeast Bank Limited I Annual Report 2016 109Corporate governance


Glimpses of Some Projects Financed by SEBL

Southeast Bank Limited I Annual Report 2016 111Corporate governance


Southeast Bank Limited caters both Conventional and Islamic banking services. Out of total 128 branches, 05 (five) branches are designated Islamic Banking Branches of the Bank. To enjoy a very strong branding image with good market reputation in the Banking sector, a Strategic Business Plan has already been put in place in the Bank after approval of the Board for expansion of Islamic Banking Operations. The Strategic Business Plan encompasses introduction of Islamic Banking Service Desk (IBSD) in Bank’s Conventional Banking Branches through the use of Bank’s online banking facilities. It also branded the bank’s Islamic Banking services as Southeast Tijarah. The Islamic Banking operations are completely separate from conventional banking. Separate accounting system for Islamic banking branches is being maintained.

At present 97 staff members are working in the 5 Islamic Banking Branches. The Bank arranges regular training programs for them on operation of Islamic Banking. The Bank is an active member of the Central Shari’ah Board for Islamic Banks of Bangladesh and Islamic Banks’ Consultative Forum. It is deeply committed to run its Islamic Banking operations by strictly complying with all Shariah requirements.

Financial Analysis

Since inception of the Bank, Islamic banking business of Southeast Bank marked steady growth in all areas - deposit, investment and profit. With only 5 branches, around 8.53 % of Southeast Bank’s business (in terms of profit) is being achieved from Islamic Banking operation with only 4 percent of manpower. As on December 31, 2016, the deposit and investment of Islamic Banking Branches were BDT.16,740.60 million and BDT.9,291.20 million. During the period 2016, total import and export businesses handled by the Islamic Banking Branches were BDT.5,392.29 million and BDT.7,354.80 million respectively. Non Performing Investment of Islamic Banking Branches was 8.07 percent of their total investment in 2016. The performance of the Islamic Banking Branches during the year 2016 is also reflected in its Balance Sheet and Profit and Loss Account as are included in this report.

Major Activities in the Year 2016

i) 04 (Four) meetings of Bank Shari’ah Supervisory Committee were held where different operational issues, policies and strategies were reviewed.

ii) To provide premier banking services to holy Hajj Pilgrims, Southeast Bank signed Memorandum of Understanding (MOU) with Hajj Agencies Association of Bangladesh (HAAB), Ministry of Religious Affairs and Sonali Bank Limited to collect Hajj Pre-Registration and Registration Fee from the Hajj Pilgrims and Hajj Agencies. Side by side, most of the HAAB members are involved in IATA ticket, visa processing and overseas employment business in addition to their Hajj and Umrah related business. We provided financial support to the Hajj agencies as needed throughout the year by way of Bank Guarantee and other working capital finance.

iii) Five special review meetings with the HOBs and MOs of Bank’s Islamic Banking Branches were conducted for overall business review and charting future course of actions for improvement.

iv) 02 (Two) Training Programs were conducted on Islamic Banking Operations, IT issues and Islamic Banking Service Desk (IBSD) for the officers of the Bank.

v) The Muraqib of the Bank conducted Shariah inspection of the Islamic Banking Branches and submitted his reports to the Shariah Supervisory Committee. The Committee reviewed the report.

The Islamic Banking Branches (IBB) have made considerable progress in the Year 2016. It is expected that by the prized guidance and policy directives of Bank’s Board and Management, the Islamic Banking operation will progress further in 2017 and earn business success in different indicators, In Sha Allah.

Islamic Banking


International Business Operations

From the very outset of the commencement of business back in 1995, Southeast Bank Limited (SEBL) has been facilitating significant volume of International Trade and Foreign Exchange transactions of the country. Widely cherished as one of the leading banks in supporting Trade Finance and Foreign Exchange transactions of the country, Southeast Bank is constantly improving its capacity to satisfactorily serve its valued clients. Establishment of a large and effective network of correspondences worldwide to cater to the growing demand of quality trade services of the clients is the core strategy of international business operations of the Bank. Southeast Bank has earned enough trust from its valued clients by serving them leveraging its large relationship network. The Bank is constantly expanding its relationship with high street banks of different countries. As of December 31, 2016 Southeast Bank had established Relationship Management Apllication (RMA) with 807 correspondents in 79 countries all over the world.

Currently SEBL is maintaining 35 (Thirty Five) Nostro Accounts in major currencies including 10 (Ten) Nostros under Asian Clearing Union (ACU) and 01 (One) Nostro for Off-shore Banking Unit (OBU) to support foreign exchange transactions. SEBL is also enjoying hefty confirmation lines of over USD 500.00 million as well as funded credit lines with more than 50 reputed banks worldwide.

Business Highlights

2016(BDT in Million)

2015(BDT in Million)

Growth in Percentage

Import Business 171,531.73 151,812.58 12.99

Export Business 146,606.09 126,423.89 15.96

International Division

International Division, having decentralized trade operations through 21 (Twenty One) Authorized Dealer (AD) branches in important commercial hubs of the country, plays a crucial role in overall supervision and control of foreign trade and foreign exchange business of the Bank. With major focus on trade, International Division also coordinates L/C confirmation, negotiation, discounting, foreign guarantee, trade payments, nostro reconciliation, reporting, etc. A large pool of bright and dedicated professionals having international certification on trade products and procedures supervise and support international trade and foreign exchange business of the Bank using state of the art technology.

International Division consists of different units for the ease of operation and it relentlessly coordinates, supervises and supports International Trade and Foreign Exchange transactions of AD branches through following units-

Correspondence Banking and Financial Institutions Unit

Central Payment Center (CPC) Unit

Reconciliation Unit Reporting Unit EDF, Cash Incentive and Fund

Management Unit SWIFT Operations and

Sanctions Screening Unit

Correspondence Banking and Financial Institutions Unit

Correspondence Banking and Financial Institutions unit is the main international contact point of the Bank. Being the heart of International Division, this unit plays a pivotal role in facilitating foreign trade transactions of AD branches. With a pool of bright and professionally sound officials correspondence banking and financial institutions unit has meantime expanded the international network of the bank up to 807 RMA relationship with 248 banks in 79 countries. Side by side building and nurturing correspondent network, Correspondence Banking and Financial Institutions team looks after L/C advising, confirmation, negotiation, discounting and foreign guarantee, etc. This team also plays the key role in partnering with Development Finance Institutions (DFIs) and sourcing fund for Off-shore Banking Units (OBUs) of the Bank.

Partnering with multilateral development finance institutions is one of the key strategic focuses of the Bank as such relationship provides benefits in many ways. The Correspondence Banking and Financial Institutions unit of International Division has been constantly working to strengthen relationships with DFIs as well as other financial institutions worldwide. Currently, the Bank has relationship with following DFIs-

International Finance Corporation (IFC) - Southeast Bank is one of the very early members of Global Trade Finance Program (GTFP) of IFC from Bangladesh. The Bank has a hefty credit line under GTFP of IFC which support the Bank in L/C confirmation and guarantee

As of December31, 2016

79 Countries248 Banks35 Nostro Accounts

807 CorrespondentsIFC, ADB & GCPF



business internationally. IFC is also providing a funded facility for off-shore banking units of the Bank.

Asian Development Bank (ADB) - Southeast Bank is availing a sturdy credit line under Trade Finance Program (TFP) of ADB for L/C confirmation and other eligible international guarantee. The Bank in the reporting year has signed a Revolving Credit Agreement (RCA) with ADB for a revolving funded facility under TFP.

Global Climate Partnership Fund (GCPF) - With a commitment to the society and environment, the Bank partnered with Global Climate Partnership Fund (GCPF), a public-private partnership initiative registered in Luxemburg. GCPF uses public funding in order to mitigate climate change and drive sustainable growth in developing and emerging markets. The Bank is currently availing an unsecured funded facility from GCPF for financing energy efficiency projects that reduce projected greenhouse gas (GHG) emissions by at least 20% and renewable energy generation projects.

Central Payment Unit

Equipped with state of the art technological infrastructure and dedicated professionals Central Payment Unit looks after and facilitate fully centralized trade payment services at Head Office. The Bank has gained satisfactory level of efficiency in transactions settlement and fund management of nostro accounts of the Bank after centralization of trade payment. Central Payment Center (CPC) has also substantial contribution to the income of the Bank. The Bank is now working for centralization of outward remittance under CPC.

Reconciliation Unit

From the regulatory perspective as well as operational perspective, timely reconciliation of transactions made through different nostro accounts of the Bank is a must. To ensure regulatory and operational requirements, nostro reconciliation unit of International Division regularly reconciles foreign exchange transactions of the Bank using automated reconciliation software. Nostro reconciliation unit also acts as a watchdog to combat fraud, forgeries and errors in foreign exchange transactions.

Reporting Unit

Timely reporting of foreign exchange transactions is a mandatory requirement of regulators of the country. The reporting unit of International Division reports foreign exchange transactions of the Bank periodically and on demand basis to Bangladesh Bank and other regulators. Over the years the Bank gained remarkable efficiency in reporting due to dedication and expertise of the reporting unit in all manual and online reporting of foreign exchange transactions to Bangladesh Bank.

EDF, Cash Incentives and Fund Management Unit

Export Development Fund (EDF) and Cash Incentives have become very important source of funding for exporters now days. To ensure efficient handling of these special funds, EDF, Cash incentives and Fund Management unit of International Division plays a very important role. Besides, this unit manages foreign currency funds in the 35 (Thirty Five) Nostro accounts of the Bank for ensuring timely payment against imports and outward remittances. This unit also looks after disbursement and repayment of Long Term Financing Facility (LTFF) under Financial Sector Support Project (FSSP) and Green Transformation Fund (GTF) of Bangladesh Bank.

SWIFT Operations and Sanctions Screening Unit

Being a member entity of the Global SWIFT.NET since 2000, Southeast Bank facilitates cross border trade transactions, inward/outward remittance etc. of the Bank through state of the art secured infrastructure. SWIFT Operation Unit works as an authenticated communication medium of the Bank in International Division, Head Office. All AD branches are connected to Global SWIFT Network via Data center at Head Office and currently facilitating seamless delivery of SEBL’s innovative Trade and FEX business products and services to the valued clients. The Bank has already established one of the most resilient, secured and dedicated network architecture through adopting industry best practices e.g hosting SWIFT server at Demilitarized Zone (DMZ), using APNIC IP pool to connect to SWIFT Gateway, adoption of multifactor authentication framework, strict monitoring over SWIFT workstations, etc. The Bank continuously evaluates the robust control procedures already in place for operations like centralized trade payment, NOSTRO reconciliation, adhering to additional layer of authorization etc., so that Bank’s information in SWIFT network remain always safe and secured.

SWIFT Operation has also implemented ‘SWIFT Sanction Screening Solution’, a fully automated cloud based secured portal from SWIFT that screens both incoming and outgoing SWIFT transactions against sanction lists (OFAC, UN, US, EU etc.) for combating sanction and terrorist financing related threats. Customers of the Bank may feel relaxed more than ever before, knowing the banking channel is free from infiltration by any criminal or unscrupulous parties for money laundering and financing of terrorism.

Important Events of International Division in 2016

1. Signing of Revolving Credit Agreement for USD 5.00 million with Asian Development Bank (ADB) under their Trade Finance Program (TFP) on March 31, 2016.

2. Signing with Sustainable Finance Department (SFD) of Bangladesh Bank for participation in USD 200.00 million Green Transformation Fund (GTF) on December 01, 2016.


The Bank obtained permission from Bangladesh Bank for operation of Off-shore Banking Unit (OBU) on June 24, 2008 and commenced OBU operation on December 30, 2009 by inaugurating first OBU in Dhaka Export Processing Zone (DEPZ). Second OBU of the Bank was inaugurated on April 18, 2010 in Chittagong Export Processing Zone (CEPZ). Over the years OBU has become an important strategic business unit due to growing demand of cheaper foreign currency loan and Usance Payable At Sight (UPAS) Letter of Credit from the clients. The overall operation of the Off-shore Banking Units is controlled and supervised by Off-shore Banking, Head Office Cell of International Division. Southeast Bank OBUs provide a continuum of financial services such as deposit taking, money transmissions, trade finance, credit facilities, etc. Side by side supporting A Category industrial units of EPZ, OBUs of the Bank are also supporting on-shore clients within the purview set out by the Bangladesh Bank.

OBU of the Bank offers following products and services to valued clients -

Foreign Currency Deposit Account of Non-residents

Export-Import services to A- category industrial units

of Export Processing Zones (EPZ) and Economic Zone

(EZ).

Financing Usance Payable At Sight (UPAS)

Documentary Credit

Short Term Foreign Currency Loan to ADs doe

purchase of Export Bills in Foreign Currency

Foreign Currency Term Loan to eligible resident

industrial units.

Business Highlights of OBU

2016 2015Growth in %

In USD Mill: In BDT Mill: In USD Mill In BDT Mill:

Total Deposits & Borrowing 77.68 6,114.44 61.37 4,817.96 26.58

Total Loans & Advances 80.38 6,327.72 62.38 4,897.19 28.86

Total Operating Profit 1.38 107.79 0.75 58.89 84.00

Off-Shore Banking Operations

Total Deposits & BorrowingFig in USD mil

77.6861.37

20162015

GRO

WTH

26.

58%

Total Lones & AdvancesFig in USD mil

80.3862.38

20162015

GRO

WTH

28.

86%

Total Operating Pro�tFig in USD mil

1.380.75

20162015

GRO

WTH

84%



Treasury Management

To cater to the needs of different treasury solutions in different economic environments by the customers, Southeast Bank has a very dynamic and innovative treasury team. The team is committed to offer better prices and excellent services with an array of different products which best fit the changing environment. Through forecasting the market scenario in terms of liquidity, interest rate and exchange rate movement, SEBL treasury has contributed remarkably well in 2016 and also helped the Bank to earn a consistent profit over the years. SEBL treasury has separate designated desks to ensure optimum treasury solutions which are depicted below:

Money Market Desk Fixed Income Desk Asset Liability Management Desk Foreign Exchange Desk Corporate Service Desk

Money Market Desk

Money market desk assumes the responsibility of maintaining the Cash Reserve Requirement (CRR) along with local currency fund management of the Bank. This desk also ensures that the Bank remains sufficiently liquid to meet all its financial obligations and commitments to the customers of the Bank even in the stressed liquidity condition.

Money market was overburdened with excess liquidity throughout the year of 2016. Slower private sector credit growth coupled with reduced government borrowing from banking sector and access to foreign currency loan contributed to the extremely liquid market scenario. A total of BDT 355.99 billion surplus funds was parked in Bangladesh Bank bill by the banking sector. Call money rate was hovering around 2.75% to 3.00%. In such a scenario, money market desk with timely integration to fixed income and foreign exchange desk of treasury ensured optimum utilization of fund while maximizing the profitability of the Bank.

The desk handled around BDT 1,740 million on daily basis while maintaining optimum local currency liquidity of the Bank.

Fixed Income Desk

Main responsibility of fixed income desk of treasury team is to look after the Primary Dealership activities of the Bank and also to maintain required amount of government approved securities for maintenance of Statutory Liquidity Requirement (SLR) as per Bangladesh Bank directives.

SEBL exerts all out efforts to develop an active secondary market of government securities by participating both in the Primary Auction and the secondary transactions of the same.

As the market has been observing huge liquidity surplus consistently, demand for these instruments has increased manifold. With strong co-ordination among money market and FX desk, fixed income desk was able to maintain an optimum portfolio of government securities which contributed significantly to the overall profit of the Bank. This desk also analyzes the effective duration, impact of rate shock on the value of the portfolio as well as evaluates the total return from the risk-return perspective.

The desk also exploited the market opportunity of huge demand, maintained a sizable portfolio in trading book and earned capital gain by buying and selling these securities in the secondary market.

Asset Liability Management Desk

In banking, Asset-Liability Management is the practice of managing the risks that arise due to mismatches between the assets and liabilities of the Bank. In this dynamic financial market environment banks face several risks such as Liquidity Risk, Interest Rate Risk, Credit Risk and Operational Risk etc. Asset-Liability Management (ALM) is a strategic management tool to manage Interest Rate and Liquidity Risk faced by banks.

Asset-Liability Management properly addresses the risks that arise in the banking business. The main objectives and functions of Asset-Liability Management desk are the following:

Liquidity risk management of the bank

Management of market risks including interest rate and exchange rate risk

Planned growth of assets and liabilities

Undertaking financial hedge positions

Overall fund management of the bank

Trading risk management; and

Regulatory compliance

The year 2016 was a challenging year for bank’s Asset-liability management. The banking sector was awash with surplus liquidity with very minimum opportunity to invest. Southeast Bank with strong acumen and insight went for planned growth of assets and liabilities so that Net Interest Income (NII) registers a steady growth. Interest rate in the market was in a decreasing trend for both


asset and liabilities; so it was a challenge for the ALM to ensure a reasonable spread. The ALM desk was proactive in revising the rate of interest on deposit products so that interest rate risk is minimized as well as the profitability of the bank is safeguarded. The ALM is responsible for the management of balance sheet gap in order to mitigate the liquidity and interest rate risk of the bank. The ALM desk of Southeast Bank has been complying with the BASEL III requirement of maintaining Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) and reporting it to Bangladesh Bank on a regular basis. Apart from this the desk also reports to the Board of Directors about some liquidity ratios and other important financial indicators in every meeting as stipulated in the new ALM guideline of Bangladesh Bank.

To address and mitigate various risks involved in the business, ALM desk of the Treasury Division prepares Asset-Liability Committee (ALCO) paper each month and conducts monthly Asset-Liability meeting where all the issues associated with ALM are discussed and instructions are given accordingly. The ALM desk also reviews and revises the Asset-liability Management policy of the bank every year according to the policy guidelines of Bangladesh Bank.

Foreign Exchange Desk

Foreign Exchange (FX) desk consisting of experienced and skilled dealers having foreign training are engaged in foreign currency transactions. The desk closely monitored

the exchange rate movement of USD and other currencies against BDT and set the exchange rates of major foreign currencies for settling different transactions. The desk successfully maintained favorable Net Open Position (NOP) throughout the year. While maintaining favorable NOP, the desk also ensured maximum level of foreign currency liquidity and explored the market opportunities through SWAP, Placement and Forward transactions which helped the Bank to earn more profit.

The interbank foreign exchange market was quite stable and liquid until end of October’2016. Thereafter, USD started to appreciate against BDT and stood at 78.78 which was 78.40 at the end of June’2016. The inward remittance at the end of 2016 stood at USD 824 million compared to USD 778 million at the end 2015 recording a 5.91 percent growth.

Corporate Service Desk

Treasury Division of Southeast Bank provides superior services to its corporate clients through its diversified corporate service desk. The main responsibility of this desk is to ensure maximum utilization of the fund of the corporate customers. Basically different renowned life insurance companies are our corporate customers and they are maintaining a sizable amount of government securities portfolio with our bank. Corporate Service Desk of our treasury division gives its customers time befitting advices so that they can maximize their return by discovering new investment opportunities.



Foreign Remittance

Southeast Bank is a brand for its representation among the nonresident Bangladeshis and their family members at home and abroad. Apart from providing premier services, we are facilitating the Bangladeshi workers by Account Opening programs. Furthermore, we are marketing different products of the Bank through our subsidiaries, correspondents and contractual marketing agents among the expatriates.

Southeast Bank has designed its products as per the needs of the nonresident Bangladeshis and their family members by extending remittance receiving points through sub-agencyships with local scheduled commercial banks, Mobile Financial Services and Micro Finance Institutions. In addition, beneficiaries of remittance are receiving money on real time through My Remit Cards. The card holders can withdraw money from ATMs and do shopping using this card at any time (24X7). This Card helps us retain some money in the banking system.

Although the flow of remittance has slowed down recently, we were able to achieve positive growth of remittance in our Bank. In the year 2016, Bank collected USD 824 million as wage earners’ remittance. Inward Foreign Remittance plays a vital role in lessening the bank’s dependency on inter-bank market for payment of import bills.

In order to ensure hassle free pick up of remittances, we make payments through all the available means like mobile banking system, BEFTN, over the counter payment system, online account deposit and replenishment of remit card. These have taken smooth remittance service within the reach of beneficiaries anywhere in the country in the simplest way. Both the remitter and the receiver are communicated through an auto-generated SMS confirming that the money has already been deposited even in off banking hours.

We have initiated instant deposit system under API (Application Program Interface). Our foreign correspondents will be able to deposit remittance instantly in the accounts maintained with Southeast Bank.

Now, three subsidiaries (Own Exchange Companies) of the Bank located in the United Kingdom, Australia and South Africa are serving the Non Resident Bangladeshis in the respective countries of operation.

All the staff members of the Remittance Division are dedicated to rendering efficient & prompt services both to the remitters and the beneficiaries.

Southeast Bank treats the expatriate workers as genuine development partners of Bangladesh.

Country-wise percentage of remittance inflow in 2016

Country Amount (USD) PercentageUSA 180,617,621.21 22Oman 8,505,000.00 1UK 40,152,844.11 5South Africa 11,591,804.95 1UAE 11,037,572.00 1Australia 11,187.00 1KSA 58,746,285.42 7Others 513,873,010.6 62Total 824,535,325.34 100

Inflow of Foreign Remittance over the years

Year USD in Million

2012 544

2013 505

2014 629

2015 778

2016 824

Others

USAOmanUKSouth Africa

AustraliaKSA

UAE

Country wise Percentage of Remittance In�ow in 2016

5%1%

22%

1%1%1%

7%

62%

2012 2013 2014 20162015

544 505 629 778 824

In�ow of Foreign Remittance over the YearsUSD in million


Credit Card is a unique consumer financial product that offers credit and provides the means of payment at the same time. Credit Card also facilitates charge free repayment period and repayment in installments. With that unique profile Credit Card has been the convenient means by which people around the world spend trillions of money. It is no wonder that Credit Card is becoming popular in Bangladesh day by day and eventually will become centre to the financial lives of the most Bangladeshi consumers in future. Beside that the world is heading towards the concept of cashless society where physical cash transaction is being replaced by electronic transaction. Payment through Card is the most popular medium of cashless electronic transaction. The market size of credit card is enormous in our country compared to the number of credit card issued so far. There are 2.5 million taxpayers who submitted tax return in this year are eligible for credit card in terms of income level. But all the card issuers of the country could issue 0.7 million credit cards in total as of date.

Southeast Bank has been issuing Credit Card since the year 2005 and has shown sincerity and efficiency in meeting customer demands. The year 2016 has been the year of embracing the cutting-edge technology with product diversification and newer features. Following are the benchmarks of the year:

Chip Card: EMV Chip card has been introduced replacing the conventional magnetic strip card. This most advanced technology prevents fraudulent use of the card and ensures faster transaction processing.

Reward Point: Cardholders earn Reward Point whenever they purchase using card. Reward Points can be redeemed for waiver of card fee and cash reward.

EMI Pay: EMI based payment solution is a feature that allows cardholder to repay certain large purchases in equal monthly installments over an extended specific repayment period.

Discount Partners: The Bank has partnered with a good number of retail outlets, restaurants, hotels and fashion houses where cardholders get attractive discounts while they pay using our card.

Free visit at Balaka Lounge and Skylounge: The bank has made access available to Balaka Lounge and Skylounge at Shahjalal International Airport for its World and Platinum Cardholders free of cost.

SEBL Credit Card

2011 2012 2013 2014 2015

39000 57000 62700 14080 16570

Year wise transaction growth in BangladeshBDT in million

Tapped Untapped

Business opportunity

72%

28%



Since inception, the bank has been maintaining a steady growth in credit card business. Like previous years, 2016 was also a successful year with good business growth to the tune of 17.80 percent in net profit, 22 percent in card base and 25.57 percent on outstanding balance over the position of the last year.

The Bank is also working on exploring new dimensions of business and services. E-Commerce Acquiring is one of them. The Bank has been in card issuing business since the beginning of card operation. Now the Bank is focusing on E-Commerce Acquiring. We are in the process of establishing an online payment gateway through which customers will be able to pay online for goods and services. We have been observing a geometrical increase of online transactions in Asia as it is the most convenient way of ordering goods and services and pay for it.

Local prepaid card is another product that we are looking forward to introduce soon. There is a significant segment of customers who do not have enough means to prove credit worthiness, do not want to be burdened with credit facility or do not maintain bank account with us. Most of the population of our country still remains unbanked. There are also senior citizens and students who are either old or minor in ages whom we cannot grant credit card. Local prepaid card might be the right kind of product in order to reach that larger segment of customers.

A two-factor authentication is another service in process. It is a second line authentication system on transaction over internet and it prevents fraudulent use of the card.

We are very hopeful that with the present and upcoming features we will be able to provide better customer service than ever.

2013 2014 2015 2016

74.70 88.00

Year-Wise Growth of Card BusinessBDT in million

65.3055.25


Alternative Delivery Channel

Alternative delivery channel (ADC) has enabled the Bank to serve the customers beyond Banking hours. ADC team of SEBL is providing 24X7 service for customers’ convenience through Debit Cards and ATMs. ADC team is working relentlessly to provide new and improved services.

SEBL Debit Card Features

SEBL Debit Card holders can now do transactions at any ATM all over the country through National Payment Switch of Bangladesh (NPSB) network.

SEBL is the first Bank in Bangladesh to implement secured PIN based transactions on other banks’ Point of sales (POS) terminals to comply with Bangladesh Bank. SEBL Debit Card Holders now can purchase from different outlets at PIN enabled POS terminals.

Growth

ADC has implemented world class technology and re-engineered process to ensure faster, smooth and better service. This leads to a noteworthy growth in SEBL Debit Card Transaction Number, Transaction amount and Debit Card Issuance.

Transaction Amount

At the end of 2016, total transaction amount by SEBL Debit Card and ATM was BDT 736.89 crore. In comparison to the year 2015, Transaction amount has increased by 14.48%

SEBL Debit Card Growth

At the end of year 2016, our total number of issued SEBL Debit Card was 1,29,900. The number of card has increased by 35.32% in comparison to the year 2015.

SEBL ATM

At the end of 2016, our live ATMs were 127 across the country. Moreover, ADC has taken imperative initiatives for rapid expansion of ATM Booths at suitable locations to facilitate our existing customers and penetrate potential clients across the country.

Alternative Delivery Channel

2015 2016

736.89

Successful Transaction AmountIn Crore

643.68

DhakaChittagongBarishalKhulna

RangpurSylhet

Rajshahi

Total 127 ATMs of SEBL

2

25

14

11

26

672015 2016

129,900

No of issued Debit Card

95,993



The responsibility of managing credit risk of the Bank is vested upon Credit Risk Management (CRM) Division, which is entrusted with the task of overseeing various risk management measures envisaged under the credit risk management policy. CRM Division is playing among others the following major roles in line with the Credit Risk Management Guidelines of the Bank:

Formulation and/or up-gradation of different policies, procedures, strategies, guidelines related to credit risk management and credit operation of the bank with a view to mitigating its inherent risks.

Coordinating functions of Credit Approval Department and Credit Administration Department.

Assisting Corporate Banking Division regarding the business issues through in-depth analysis and evaluation of credit proposals as well as the compliance issues in order to mitigate different credit risks.

Ensuring due diligence in credit approval process.

Ensuring proper implementation of all the approved plans, policies and strategies of the Bank regarding credit portfolio for achievement of the organizational goals.

Setting different internal limits (with due approval from the competent authority) for diversifying the credit portfolio to avoid concentration risks.

Review and supervision of sectoral allocation/distribution of loans and advances, maturity gap analysis and intimate the same to the Board of Directors on quarterly basis.

Review and re-fixation of interest/profit rate based on cost of fund, cost of equity, cost of liquidity, risk appetite and market trend etc. against loans and advances /investment both for conventional and Islamic Banking operations as and when required.

Credit Risk Management (CRM) Division of the Bank is comprised of two departments named Credit Approval Department and Credit Administration Department. Two Departments work separately without compromising interest of the bank.

Credit Approval Department

Within this framework, Credit Approval Department analyzes the credit proposals, assesses different risk elements covering Management, Financial, Marketing, Technical, Environmental etc. aspects associated with the business, verifies the offered securities physically, visits projects and finds out the mitigating factors which help the management to expedite the decision making process. The Bank follows a well defined multi layered discretionary power structure for approval of any credit facility in accordance with Bank’s credit policy. The main functions of the Department are as follows:

To scrutinize the credit proposals in line with Bank’s Credit Policy, Risk elements and Bangladesh Bank’s Policy/regulations.

To assess risks inherent in the credit proposals with due diligence i.e. identification of credit risk, risk mitigation measure (if any) from assessment of credit requirement, evaluate proposed facility pricing etc.

To ensure that all credit lines are approved in accordance with Bank’s credit policy under defined approval authorities conferred by the Board.

To issue sanction advices to the respective branches incorporating all the applicable terms and conditions with a view to protecting interest of the Bank upon approval of the competent authority.

To liaison/correspond with Bangladesh Bank and other external agencies/regulatory bodies on various issues as and when required.

Credit Administration Department

The Credit Administration Department is assigned to look after post approval process such as to establish better control over loan portfolio by helping completion of documentation, scrutinizing the checklist of documents, limit, rate of interest, tenor etc. in a systematic manner and allow subsequent disbursement, ensuring utilization of fund, monitoring and compliance of all covenants and conditions precedent. This Department makes constant follow up of the credits just after its sanction and continues its efforts to keep the credits performing and unclassified. This Department also acts as a bridge between the branch

Credit Risk Management in SEBL


and the management as well as between management and Board of Directors by providing information in respect of health of the loans and advances. Main functions of the Department are segregated in the following four categories:

Disbursement Function;

Monitoring Function;

Compliance Function;

Custodial Function.

Major Achievements in 2016

Credit Risk Management Guidelines of the Bank has been reviewed and updated in line with the New Guidelines on Credit Risk Management by Bangladesh Bank, present and upcoming domestic and international economic conditions etc.

A number of policies like- Valuation Methodologies, Documentation methodologies, Revision of Interest/Profit rate has been reviewed, updated and approved by the Board of Directors

A well crafted Risk Appetite Statement has been prepared and approved by the Board

Through continuous monitoring and vigorous persuasion, sound health of the asset quality has been maintained and non-performing loans of the Bank could be restricted below 5% of the total loan portfolio

Loan documentation status has improved significantly due to regular monitoring and follow-up

Priorities for 2017

Introducing Centralized Limit Loading and Disbursement system in 2017 with a view to restricting unauthorized disbursement and bringing stability in assets quality through mitigating the associated risks

Establishing a separate MIS wing to keep proper history/records of credit portfolio elaborately and extensively

Strengthening Monitoring of standard credit portfolio so that slippage of performing loans into non-performing loans can be restricted and sound asset quality can be ensured

Curving the trend of non-performing loans of the bank down through proper monitoring and recovery of existing non-performing loans

Establishing a full-fledged documents Analysis Unit equipped with expert documents analyst under Credit Administration Department to ensure proper and flawless documentation



Sound Risk Management and balancing risk-reward trade-offs are critical to the Bank’s success. Business and revenue growth are, therefore, to be weighed in the context of the implicit risks in the Bank’s business strategy. As a financial institution SEBL is exposed to certain amount of risks which are associated with its lending, trade-service business and operational activities. Managing and mitigating such risks are always a prioritized concern of SEBL to build public trust and confidence which is necessary for mobilizing private savings for investment to facilitate economic growth. Therefore, effective risk management activities are a prerequisite for the Bank to achieve its business objectives. SEBL is committed towards embedding a risk culture in its organization and embraces risk management as a core competency that allows it to optimize risk-taking through objectivity and transparency. SEBL has always taken cognizance of the risks associated with conducting banking business. In this connection, the Bank has tailored its risk management program to its need and circumstances.

SEBL’s Risk Management Strategy

SEBL has clear risk management objectives and a well-established strategy to address them, through core risk and capital adequacy related risk management processes and encompasses all the activities that affect its risk profile. At strategic level, our risk management objectives are as follows

To ensure active involvement of the Board of Directors and senior management;

To ensure that business growth plans are properly supported by effective risk infrastructure;

To implement risk strategy approved by the Board of Directors;

To develop policies and procedures for identifying, measuring and controlling risk;

To provide all reports required by the Board and its committees for the effective performance of risk management oversight functions;

To optimize risk/return decisions by taking them as closely as possible to the business, while establishing strong and independent review and challenge structures;

To ensure that business growth plans are properly supported by effective risk infrastructure;

To help executives improving the control and co-ordination of risk taking across the busines;

There are other miscellaneous issues like submission of the decisions and recommendations of the Committee before the Board quarterly, compliance of the instructions of the regulatory authorities from time to time, evaluation report of the internal and external audit reports etc.

Activities of Risk Management Division

The Risk Management Division (RMD) of SEBL was established to comply the direction of Bangladesh Bank (DOS (EW)1164/14(southeast) 2009-452 dated 10-06-2009) for strengthening risk management activities of the bank. RMD looks after effectiveness of the Core Risks Management of the Bank and also ensures the capital management of the Bank under Basel Accords in association with the directives of Bangladesh Bank time to time. RMD is responsible to manage and measure risk on the basis of the bank’s approved risk parameters and regulatory requirements. Functions of RMD are furnished below in summary:

Communicating views to the Board and senior management regarding the Risk Management culture and risk concentration all over the bank

Collecting all relevant data related to the risk indicators from different models and information system at the earliest

Assessing the quality, completeness and correctness of those data

Designing bank’s overall risk management strategy

Developing, testing, and observing use of models for measuring and monitoring risks

Preparing and taking approval of various policies like ICAAP, Stress test policy, Disclosure policy etc.

Developing and using risk assessment tools and methodologies

Identifying and monitoring unauthorized limits overriding and analyse possible scenarios through stress testing

Preparing Minimum Capital Requirement (MCR) report

Preparing different financial parts of different Covenants (IFC, ADB, GCPF etc.)

Preparing the Risk Management Report on Monthly basis and Comprehensive Risk Management Report (CRMR) on Semi-annual basis

Ensuring management of Credit Rating

Risk Management Practices within SEBL


Preparing and analysing the liquidity risk through Liquidity Coverage Ratio (LCR) on Monthly basis and Net Stable Funding Ratio (NSFR) on quarterly basis

Analysing the overall impact on Bank’s capital base for the credit, market and operational activities and assist the management in streamlining the strategy for minimizing the impact on capital requirement

Preparing disclosures under Pillar-III and any other financial reporting as recognized by Bangladesh Bank

Basel -III Implementation

Central Bank of the country is always cautious about the need to keep the capital of individual Bank as per international standard and for this reason, Bangladesh Bank has declared the roadmap for implementation of BASEL III in banking sector effective from January 01, 2015. As per the phase wise arrangements for Basel-III implementation the Bank has started implementing Basel-III from January 2015. The Bank has taken initiatives to improve the Capital to Risk Weighted Asset Ratio (CRAR) in line with the Basel-III guideline. Besides the Bank has also started maintaining different ratios like Leverage Ratio, Liquidity Coverage Ratio (LCR), and Net Stable Funding Ratio (NSFR) as per Basel-III requirement.

Stress Testing

Stress Testing is one of the effective and popular ways to alert bank management with regard to adverse unexpected outcomes related to variety of risks and provides an indication how much capital adequacy ratio (CAR) might be needed to absorb losses, if any shocks occur.

In the context of ICAAP under Pillar II of Basel III, banks consider Stress Testing as a diagnostic tool to improve the understanding of its risk profile. Bangladesh Bank has advised to conduct quarterly Stress Testing to measure resilience of the Bank. Therefore as a part of risk management, the Bank prepares stress testing report on quarterly basis to check out four major risks (interest rate risk, credit risk, equity price risk, liquidity risk) under different levels of magnitude to ensure optimum allocation of capital across its risk profile. In Stress Testing of the Bank different analytical tools are used, like sensitivity analysis which assesses the impact on an institution’s financial condition of a move in one particular risk factor, scenario test which tends to consider the impact of simultaneous moves in a number of risk factors, and duration GAP analysis which is the analysis of the gap in duration

between the Bank’s Assets and Liabilities. On the other hand, different risk factors are judged using three different shocks: minor, moderate and major shocks. The risk factors are : performing loan downgraded to Bad/Loss, increase in NPL due to default of top 10 borrowers, negative shift in NPLs categories, decrease in the FSV of collateral, change in interest rate, FEX shock, equity shock and liquidity stress.

Risk Management Report

Risk Management Division (RMD) prepares Risk Management Report (RMR) on monthly and semi annual basis consisting information of six key risks areas (e.g. Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Foreign exchange risk and ICT risk) from all related divisions. Thereafter, it is presented in the monthly meeting of Risk Management Committee conducted under the supervision of Risk Management Division (RMD).

A report of the same is submitted to Bangladesh Bank and the decisions are communicated to relevant divisions of the bank for implementation. Another half yearly report namely CRMR is also prepared by RMD. Different tools and techniques are applied to analyse data and to make recommendations. Horizontal and vertical analyses of monthly and half yearly data are used to compare the development of each risk parameter. Recommendations are made over the changes of the risk position of a particular risk.

Liquidity Ratios

According to the revised road map issued vide BRPD Circular No.18/2014; banks have to maintain the minimum standard of Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) from January 2015. The threshold limit for LCR has been fixed at 100% or more and for NSFR it is greater than 100 %. Liquidity Coverage Ratio (LCR) is the ratio of unencumbered High Quality Liquid Assets (HQLA) to net cash outflows over the next 30 calendar days. Liquidity Coverage Ratio (LCR) is designed to test a bank’s ability to withstand a liquidity crisis over a 30-day period. On the other hand, Net Stable Funding Ratio (NSFR) aims to establish a minimum acceptable amount of stable funding based on the liquidity characteristics of an institution’s assets and activities over a one year horizon. The amount of stable funding available is calculated through applying weights to different categories of liability which is then, compared with the amount of stable funding required, calculated by applying weights to the institution’s assets and off-balance sheet items including potential liquidity exposure



Money Laundering (ML) and Terrorist Financing (TF) are major threats to the world’s Financial Service Industry. Southeast Bank Group is pledge-bound not to allow its banking channel to be used by any criminal, terrorist or network of terrorists to carry out subversive activities or militancy in the country and elsewhere. The Bank is committed to ensuring the best corporate governance practices and aims at protecting the Bank and its employees, shareholders, management and customers from the adverse effect of ML and TF.

Considering the social and political cost of ML and TF, Southeast Bank Group always attempts to thwart occurrence of both ML and TF in its day-to-day activities. In order to be compliant with FATF recommendations, instructions and guidelines of BFIU and relevant laws and regulations, Southeast Bank Group is always sincere to the implementation of its AML and CFT compliance program. In the recent past, the Group took a number of initiatives on the issue of AML and CFT compliance.

An eleven-member Central Compliance Unit (CCU) at Head Office has been established to ensure compliance with AML and CFT requirements properly. Anti-Money laundering Division of the Bank is assisting the CCU continuously. In this respect, the Chief Anti-Money Laundering Compliance Officer (CAMLCO) leads CCU and AMLD to ensure oversight of all aspects of the bank’s AML and CFT activities including corrective actions to be taken to address the deficiencies identified through the inspection of BFIU, Independent Testing Procedure and Self- Assessment Report. Deputy CAMLCO, Head of Anti-Money Laundering Division and Branch Anti-Money Laundering Compliance Officers (BAMLCOs) also exercise care and caution to prevent acts of ML and TF through the use of Southeast Bank Group service outlets.

The Group has strengthened its process of submitting CTR and STR through goAML Software set down by BFIU. It has given added concentration on Customer Due Diligence (CDD) Process. The CDD measures include KYC Procedure, KYE Procedure, Customer Acceptance Policy, Customer Identification Process, Verification Process, Transaction Monitoring, etc. SEBL is utilizing automated screening mechanism in respect of various Sanction Lists, e.g. sanction lists of UNSCR, OFAC, AUSTRAC, EU, and local Government. In this connection, the screening software of the Group ‘S3’ for Core Banking Systems and ‘SWIFT’ for international transaction have been put in place and are being used for combating the threats.

SEBL has also taken reasonable attempts to ensure that all the officials are fully informed of the AML and CFT Compliance requirements. The Group does never excuse any violation of applicable legislations or rules or regulations or policies or procedures or industry guidance, etc relating to AML and CFT in the conduct of business of the Group.

Prevention of Money Laundering


Information Technology in Banks has greatly contributed to improve operational efficiency, transparency, speed and accuracy in banking transactions. The customers are benefited by getting a number of options for doing banking through a different delivery channels according to their convenience. The business people are also getting benefit of faster realization of receivables from their clients and making payments to their suppliers instantly and securely through various established payment channels.

This year, the Bank has scaled its technology infrastructure to create a contemporary, secure and robust infrastructure and taken several initiatives to protect its information assets from cyber threats. SEBL has established its Data Center (DC) and Disaster Recovery Site (DRS) keeping in mind future expandability to meet emerging needs and for high availability. During setup of Data Center, environmental security has been provided highest priority. This year more manpower (experienced and fresh) has been recruited for capacity expansion of IT. The Core Banking Software (CBS) has been upgraded to its latest release to enhance existing features and functionalities and ensure transaction security.

The Bank has reviewed its ICT infrastructure and taken pragmatic steps to procure state of the art IT Security solutions (Hardware and Software) for implementation of multi-layer security with multiple security solutions for Network, Mailing System, Web/Internet and the end users devices. Various policies and procedures including ICT Security Policy have been revised to minimize technological and operational risks and comply with ICT Security Guideline-2015 of Bangladesh Bank. The Business Continuity Plan (BCP) and Disaster Recovery Plan have also been revised. The SWIFT payment channel has been reviewed and restructured through separating

its network connectivity from Office LAN and internet access of SWIFT user PCs and file sharing with other PCs have also been blocked. Several training on ICT Security and Risk Management has been arranged throughout the year at the Training Institute of the Bank as part of awareness buildup among the employees of the Bank. As the business processes and initiatives are now driven by IT, therefore, the Bank will continue investing in IT to ensure sound and secure IT operation.

Internet Banking: The Bank is offering different services to its clients, like inter-Bank Fund transfer, utility bill and student’s tuition fees payment. All these transactional services have been secured through implementation of Hardware / Software token based Two Factor Authentication (2-FA). This year the Bank has brought more Utility Service Providers and Educational Institutions under I-Banking service for utility bill and student’s tuition fee payment at customer’s convenience from home or office. SEBL’s I-Banking module has further been upgraded with more features and functionalities and to strengthen security to perform various financial transactions. SMS and E-Mail Alert services are available for any transaction performed through online / Internet Banking or using Debit / Credit Card.

The available transactional services are:

Intra and Inter Bank Fund Transfer

Utility Bills and Student Tuition Fees Payment

Mobile Air time Recharge

SEBL’s Credit Card Bill Payment

FDR and Scheme Deposit Account Opening

Information Technology (IT) and Cyber Security Measures



BSEC Guidelines for Corporate Governance: Our Compliance Status of compliance with the conditions imposed by Bangladesh Securities and Exchange Commission Notification No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012

Condition No.

TitleCompliance Status (Put √ in the

appropriate column) RemarksComplied Not complied

1.1

The number of the board members of the company shall not be less than 5 (five) and more than 20 (twenty): Provided, however, that in case of banks and non-bank financial institutions, insurance companies and statutory bodies for which separate primary regulators like Bangladesh Bank, Insurance Development and Regulatory Authority, etc. exist, the Boards of those companies shall be constituted as may be prescribed by such primary regulators in so far as those prescriptions are not inconsistent with the aforesaid condition.

√

1.2(i)At least one fifth (1/5) of the total number of directors in the company’s board shall be independent directors.

√

1.2(ii)(a)Who either does not hold any share in the company or holds less than one percent (1%) shares of the total paid-up shares of the company

√

1.2(ii)(b)

Who is not a sponsor of the company and is not connected with the company’s any sponsor or director or shareholder who holds one percent (1%) or more shares of the total paid-up shares of the company on the basis of family relationship. His/her family members also should not hold above mentioned shares in the company Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members

√

1.2(ii)(c)who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies;

√

1.2(ii)(d)who is not a member, director or officer of any stock exchange;

√

1.2(ii)(e)who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market;

√

1.2(ii)(f )

who is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm;

√

1.2(ii)(g)who shall not be an independent director in more than 3 (three) listed companies;

√

1.2(ii)(h)

who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a Non-Bank Financial Institution (NBFI);

√

1.2(ii)(i)who has not been convicted for a criminal offence involving moral turpitude

√

1.2(iii)The independent director(s) shall be appointed by the board of directors and approved by the shareholders in the Annual General Meeting (AGM).

√


Condition No.



1.2(iv)The post of independent director(s) cannot remain vacant for more than 90 (ninety) days.

N/ANo such event occurred

1.2(v)The Board shall lay down a code of conduct of all Board members and annual compliance of the code to be recorded.

√

1.2(vi)The tenure of office of an independent director shall be for a period of 3 (three) years, which may be extended for 1 (one) term only.

√

1.3(i)

Independent Director shall be a knowledgeable individual with integrity who is able to ensure compliance with financial, regulatory and corporate laws and can make meaningful contribution to business.

√

1.3(ii)

The person should be a Business Leader/Corporate Leader/ Bureaucrat/ University Teacher with Economics or Business Studies or Law background /Professionals like Chartered Accountants, Cost & Management Accountants, Chartered Secretaries. The independent director must have at least 12 (twelve) years of corporate management/ professional experiences.

√

1.3(iii)In special cases the above qualifications may be relaxed subject to prior approval of the Commission.

N/A

1.4The Position of the Chairman of the Board and Chief Executive Officer of the company shall be filled by different individuals.

√

1.5(i)Industry outlook and possible future developments in the industry.

√

1.5(ii) Segment-wise or product-wise performance. √

1.5(iii) Risks and concerns. √Presented innote 3.20

1.5(iv)A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin

√

1.5(v)Discussion on continuity of any Extra-Ordinary gain or loss.

N/A

1.5(vi)Basis for related party transactions- a statement of all related party transactions should be disclosed in the annual report

√Presented innote 69.3.1

1.5(vii)Utilization of proceeds from public issues, rights issues and/or through any others instruments.

N/A

1.5(viii)

An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.

N/A

1.5(ix)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

N/A

1.5(x)Remuneration to directors including independent directors

√



Condition No.



1.5(xi)

The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

√

1.5(xii)Proper books of account of the issuer company have been maintained.

1.5(xiii)

Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment.

√

1.5(xiv)

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/ International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.

√

1.5(xv)The system of internal control is sound in design and has been effectively implemented and monitored.

√

1.5(xvi)

There are no significant doubts upon the issuer company’s ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed.

√

1.5(xvii)Significant deviations from the last year’s operating results of the issuer company shall be highlighted and the reasons thereof should be explained.

√

1.5(xviii)Key operating and financial data of at least preceding 5 (five) years shall be summarized

√

1.5(xix)If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

N/A

1.5(xx)The number of Board meetings held during the year and attendance by each director shall be disclosed.

√

1.5(xxi)(a)Parent/Subsidiary/Associated Companies and other related parties (name wise details);

√

1.5(xxi)(b)

Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);

√

1.5(xxi)(c) Executives; √

1.5(xxi)(d)Shareholders holding ten percent (10%) or more voting interest in the company (name wise details).

√

1.5(xxii)(a) a brief resume of the director; √

1.5(xxii)(b)nature of his/her expertise in specific functional areas;

√

1.5(xxii)(c)Names of companies in which the person also holds the directorship and the membership of committees of the board.

√Presented-in Annexure - F


Condition No.



2.1

The company shall appoint a Chief Financial Officer (CFO), a Head of Internal Audit (Internal Control and Compliance) and a Company Secretary (CS). The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the CS

√

2.2

The CFO and the Company Secretary of the companies shall attend the meetings of the Board of Directors, provided that the CFO and/or the Company Secretary shall not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to their personal matters

√

3(i)The company shall have an Audit Committee as a subcommittee of the Board of Directors.

√

3(ii)

The Audit Committee shall assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business.

√

3(iii)The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee shall be clearly set forth in writing.

√

3.1(i) Constitution of Audit Committee √

3.1(ii)Inclusion of independent Director on the Audit Committee

√

3.1(iii)All members of the Audit Committee are ̋ financially literate˝

√

3.1(iv)

When the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors shall appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy(ies) in the Committee to ensure continuity of the performance of work of the Audit Committee.

√

3.1(v)The company secretary shall act as the secretary of the Committee.

√

3.1(vi)The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director

√

3.2(i) Chairman of the Committee √

3.2(ii)Presence of the Chairman of the Audit Committee in the AGM

√

3.3(i) Oversee the financial reporting process. √

3.3(ii)Monitor choice of accounting policies and principles.

√

3.3(iii) Monitor Internal Control Risk management process. √



Condition No.



3.3(iv)Oversee hiring and performance of external auditors.

√

3.3(v)Review along with the management, the annual financial statements before submission to the board for approval.

√

3.3(vi)Review along with the management, the quarterly and half yearly financial statements before submission to the board for approval.

√

3.3(vii) Review the adequacy of internal audit function √

3.3(viii)Review statement of significant related party transactions submitted by the management.

√

3.3(ix)Review Management Letters/ Letter of Internal Control weakness issued by statutory auditors.

√

3.3(x)

When money is raised through Initial Public Offering (IPO)/Repeat Public Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/applications of funds by major category (capital expenditure, sales and marketing expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration of financial results. Further, on an annual basis, the company shall prepare a statement of funds utilized for the purposes other than those stated in the offer document/prospectus.

√

3.4.1(i)The Audit Committee shall report on its activities to the Board of Directors.

√

3.4.1(ii)(a) report on conflicts of interests; N/A

3.4.1(ii)(b)suspected or presumed fraud or irregularity or material defect in the internal control system;

N/A

3.4.1(ii)(c)suspected infringement of laws, including securities related laws, rules and regulations;

N/A

3.4.1(ii)(d)any other matter which shall be disclosed to the Board of Directors immediately

N/A

3.4.2 Reporting to the Authorities N/A

3.5Reporting to the Shareholders and General Investors

-

4(i) Appraisal or valuation services or fairness opinions. √

4(ii)Financial information systems design and implementation.

√

4(iii)Book-keeping or other services related to the accounting records or financial statements.

√

4(iv) Broker-dealer services. √

4(v) Actuarial services. √

4(vi) Internal audit services. √

4(vii)Any other service that the Audit Committee determines

√

4(viii)

No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company.

√

4(ix)Audit/Certification Services on Compliance of the corporate Governance as required.

√


Condition No.



5(i)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company.

N/A

5(ii)

At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company

N/A

5(iii)The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company

√

5(iv)

The minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the subsidiary company also.

√

5(v)The Audit Committee of the holding company shall also review the financial statements, in particular the investments made by the subsidiary company.

√

6(i)(a)these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

√

6(i)(b)

these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards and applicable laws.

√

6(ii)

There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

√

7(i)

The company shall obtain a certificate from a practicing Professional Accountant/Secretary (Chartered Accountant/ Cost and Management Accountant/Chartered Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

√

7(ii)

The directors of the company shall state, in accordance with the Annexure attached, in the directors’ report whether the company has complied with these conditions.

√




Compliance of Bangladesh Bank’s Guidelines on Corporate GovernanceBangladesh Bank Guidelines for Corporate Governance: Our Status of Compliance with BRPD Circular No.11 of 27th October 2013.

Sl No. ParticularsCompliance

StatusRemarks

1.

Constitution of Board of Directors

For appointment of new Directors and removal of Directors Bangladesh Bank’s approval to be obtained.

√

Eligibility and Qualification of Directors, maximum number of Directors on the Board of Directors.

√

Appointment of Independent Director. √

Maximum 2 Directors from one family. √

1.1

Appointment of New Directors Section 15.4 of Bank Company (Amendment) Act-2013 requires that application for obtaining approval of Bangladesh Bank to appoint new Directors should be sent along with some specified declarations and approval of Bangladesh Securities and Exchange Commission.

√

1.2 Vacancy of Office of a Director

(a) Vacancy as per Section 108 (i) of Companies Act 1994 and Vacancy as per Section 17 of Bank Company Act 1991.

No such event

(b) i) Bar to become a Director who was removed by operation of Section 17 of Bank Company Act 1991.

No such event

ii) Bar to transfer share by a Director who was removed by operation of Section 17 of Bank Company Act 1991.

No such event

CRemoval of Director and dissolution of the Board by Bangladesh Bank.

No such event

1.3Removal of Directors and Dissolution of the Board For removal of a Director, Bangladesh Bank’s approval to be obtained.

No such event

1.4 Appointment of Alternate Directors

(a) To appoint alternate director in place of original Director, documentary evidence of foreign visit and return of original Director shall be kept in records. Any deviation from this shall be reported to Bangladesh Bank by the Bank’s Chief Executive Officer.

No such event

(b) Copy of resolution for appointment of Alternate Director by the Board of Directors along with original Director’s probable date of return are to be sent to Bangladesh Bank.

No such event

(c) Any loan defaulter and anybody who is not eligible to be appointed as Director under Bank Company Act or Companies Act or any other law or rules shall not be appointed as Alternate Director.

No such event

(d) No Alternate Director shall be appointed as a member of any committee of the Board of Directors.

There is no Alternate Director on the Board of SEBL

(e) No credit facilities to Alternate Director or to entities where he has interest shall be allowed.

√ No such event

All requirements of Law, Rules and Directives applicable to a Directors are also equally applicable to an Alternate Director.

√ No such event

2. Depositor DirectorNo requirement for appointment of Depositor Director. The tenure of office of current Depositor Directors shall be determined by the Board.

√




StatusRemarks

3. Particulars of Directors(a) Updated list of Directors; √

(b) Distribution of list of Directors to the scheduled Banks and NBFIs √

(c) Updated profile of Directors in the website. √

4. Responsibility and Power of the Board of Directors Board of Directors is responsible for policy framing and implementation, Risk Management, Internal Control, Internal Audit and ensuring compliance of Internal Audit objections etc.

√

4.1 Responsibility and Powers of the Board of Directors(a) Work Plan and Strategic Management

i) Board shall determine Bank’s goals and objectives and devise strategies and work plan. Progress towards achievement of work plan shall be reviewed quarterly by the Board.

√

ii) Board of Directors shall include its analytical/critical review of Bank’s achievement and its failures in the Bank’s Annual Report. It shall also inform the shareholders about the Bank’s future work plan and strategies. KPI(s) of CEO and two grades below the CEO shall be determined and evaluated by the Board of Directors.

√

(b) Credit and Risk Management

i)Board of Directors shall approve re-schedule & write off of credit within existing Laws and Rules & Regulations.

√

Board shall delegate power to approve credit/investment. √

All policies relating to credit evaluation sanction, recoveryre-schedule and write-off shall be approved by the Board.

√

ii) Board of Directors review Risk Management Policy on quarterly basis

√

Implementation of guidelines of Bangladesh Bank about major risks shall also be monitored by the Board.

√

(c) Management of Internal ControlBoard of Directors shall closely monitor Internal Control System in order to maintain qualitative standard of Credit/Investment. Board of Directors shall review on quarterly basis the reports of the Audit Committee submitted before it regarding compliance status of suggestions and recommendation of inspection report of Internal Audit, External Auditors and Inspection Team of Bangladesh Bank.

√

(d) Human Resource Management and Development of Human Resourcei) All policies and service Rules relating to Human Resources

of the Bank shall be approved by the Board.√

The appointment, promotion, transfer and disciplinary action against an executive up to two grades below the CEO shall made/taken by the Board.

√

ii) Board of Directors shall give special emphasis on Training for enhancement of capability of Bank’s Executives and Officers for accurate assessment of Credit/Investment proposals.

√

Modern electronic and information technology and Management Information System (MIS) shall be stressed up and included in the annual work-plan.

√



StatusRemarks

iii) Board of Directors shall devise Code of Ethics for all grades of Executives and Officers and it should be meticulously complied with by all Executives and Officers.

√

Board of Directors shall promote high ethical standard for the purpose of developing a culture of compliance in the Bank.

√

(e) Financial Management i) Bank’s Annual Budget and Statutory Financial Statements

shall be prepared with the approval of the Board of Directors. Bank’s Income, Expenditure, Liquidity, Expired / Unrecovered Loans, Capital Base and Capital Adequacy, Provision, classified loans etc must be reviewed by the Board on quarterly basis.

√

ii) Purchase and Procurement Policy shall be devised by the Board of Directors.

√

Delegation of powers in this behalf shall be approved by the Board.

√

Board’s prior approval shall be required to purchase Land, Building, Establishment, construction, Vehicle etc on business consideration.

√

iii) Board of Directors shall review whether Asset-Liability Committee (ALCO) is formed and functioning observing the directives of Bangladesh Bank.

√

(f ) Appointment of Chief Executive Officer Board of Director shall appoint a honest, skilled, experienced and a suitable person as Chief Executive Officer. Appointment of CEO shall require Bangladesh Bank’s approval.

√

(g) Board’s added Duty Board shall ensure proper execution and compliance of any duty vested upon it by Bangladesh Bank.

√

4.2 Meeting of Board of DirectorsOne meeting of the Board in each month and if required more than one meeting in a month.

But minimum one meeting of the Board shall be held in a quarter.

4.3 Responsibilities of Chairman of Board of Directors(a) Chairman’s area of activities. √

(b) He may visit a branch or Bank’s financial project. √

He may order for an enquiry, if required. √

He may take actions through the CEO with the approval of the Board.

√

(c) An Office Room, a personal Secretary / Assistant, one Peon / MLSS, Telephone at the office, one Mobile Phone and a vehicle may be provided to the chairman with the approval of Board.

√

5. Constitution of Supporting CommitteeEvery Bank Company shall constitute one Executive Committee, one Audit Committee and one Risk Management Committee consisting of members of the Board of Directors.

5.1 Executive CommitteeIn order to resolve urgent matters and day to day or / routine work during interval of meeting of Board of Directors, it shall constitute an Executive Committee.

√

(a) Structure √




StatusRemarks

(b) Eligibility of the Members of the Executive Committee √

(c) Responsibilities and Duties of the Executive Committee √

(d) Calling Meeting of the Executive Committee √

5.2 Audit Committee Audit Committee to be constituted to carry out supervisory role on presentation of Financial Reports, Internal Control System, Auditing System, compliance of existing Laws and Rules and Regulations of regulators.

√

(a) Structure √

(b) Qualification of Members of Audit Committee √

(c) Duties and Responsibilities of the Audit Committee √

(A) Internal Control √

(B) Publication of Financial Reports √

(C) Internal Audit √

(D) External Audit √

(E) Compliance of existing Laws and Rules √

(F) Miscellaneous Work √

(d) Calling Meeting of the Audit Committee √

Risk Management Committee Risk Management Committee shall be formed in order to play an effective role in lowering possible risks in respect of implementation of strategies and work-plan formulated by Board of Directors. Risk Management Committee shall analyze the policy / system of lowering risks properly by the management and maintenance of required capital against Risks and Provision for Reserve for Credit Risk, Foreign Exchange Risk, Internal Control and Compliance Risk, Money Laundering Risk, Information and Communication Technology Risk, Operation Risk, Interest Rate Risk, Liquidity Risks shall be looked after by the Risk Management Committee etc.

√

(a) Structure √

(b) Qualification of Committee Members √

(c) Responsibilities and Duties of the Risk Management Committee √

(A) Risk Identification and Control Strategy √

(Av) Preparation of Organizational Structures (B) Review of Risk Management Policy and approval

√

(C) Preparation of Information and Reporting System √

(D) Supervision of Implementation of Overall Risk Management Policy

√

(E) Miscellaneous Work √

(d) Calling Meeting of the Risk Management Committee √

6. Training of Directors √

7.This Circular is issued to implement Section 15, 15 Kha and 15 Ga of Bank Company (Amended) Act, 2013.

- -

8. Enforcement of the Circular. -with immediate

effect


BRPD Circular No.18 of 27th October 2013 Appointment and responsibilities of Chief Executive Officer (CEO)

Sl. No.

ParticularsCompliance

Status

A Rules and regulations for appointment of the CEO

Complied

1 Moral Integrity: In case of appointment to the post of CEO, satisfaction in respect of the concerned person should be ensured to the effects that:

a) He has not been convicted by any Criminal Court of Law.

b) He has not been punished for violating any rules, regulations or procedures / norms set by any regulatory authority.

c) He was not associated with any such company / organization; registration or license of which has been cancelled.

2 Experience and Suitability:

Complied

a) For appointment as a CEO, the concerned person must have experience in banking profession for at least 15 (fifteen) years as an active officer and at least 2 (two) years experience in a post immediate below the CEO of a bank.

b) He must have a Master’s Degree at minimum from any recognized university. Higher academic education in the field of Economics, Banking and Finance or Business Administration will be treated as additional qualification for the concerned person.

c) In respect of service, the concerned person should have excellent track record of performance.

d) Satisfaction should be ensured that the concerned person was not dismissed from service when he was chairman/director/official of any company.

e) Any director of any bank or financial institution or any person who has business interest in the concerned bank will not be eligible for appointment to the post of CEO.

3 Transparency and financial integrity: Before making appointment as a CEO, satisfaction should be ensured to the effects that:

Complieda) The concerned person was not involved in any illegal activity while performing duties in his

own or banking profession.

b) He has not deferred payment to creditors or has not compromised with his creditors to be relieved from debts or he is not a loan defaulter.

c) He is not a tax defaulter.

4 Age Limit: No person crossing the age of 65 years shall hold the post of CEO of a Bank. Complied

5 Tenure: The tenure of the CEO shall not be more than 03 (three) years, which is renewable. If the candidate has less than 3 years left to attain 65 years, he/she can be appointed for the shorter person.

Complied

6 Guidelines in fixing the salary and allowance: Banks are required to follow the guidelines stated below while determining the salary and allowances of the CEO and submitting such proposals to BB.B.

Complied

a) In fixing the salary and allowances of the CEO, financial condition, scope of operation, business-volume and earning capacity of the Bank; qualifications, achievement of the candidate in the past, age and experience and the remuneration paid to the persons occupying same position in the peer banks shall have to be taken into consideration.

Complied

b) Total salary shall be comprised of direct salary covering ‘Basic Salary’ and ‘House Rent’ and allowances as ‘Others’. The allowances (e.g., provident fund, utility bill, leave-fare assistance) in ‘Others’ head should be specified in amount/ceiling. Besides, other facilities (e.g., car, fuel, driver etc), as far as possible, shall have to be converted in the monetary value and thus determining monthly total salary, it shall have to be mentioned in the proposal submitted to BB. In the proposal, Basic Salary, House Rent, Festival Allowance, other allowances and other facilities shall have to be specified in Taka amount.

Complied

c) Without improving the bank’s major financial indicator like-CAMELS, annual salary increment will not be payable.

Complied

d) Terms of salary-allowances and other facilities as specified in the terms and conditions of appointment cannot be changed during the tenure. In case of renewal, proposal may be made for re-fixation of the salary considering the work performance of the current CEO.

Complied

e) The CEO so appointed shall not get any other direct or indirect facilities (e.g., dividend, commission, club expenses, etc.) other than the salary-allowances and other facilities as enumerated in clause (b) above.

Complied

f ) The bank shall not pay any income tax for the CEO, i.e. the CEO so appointed shall have to pay it.

Complied



Sl. No.

ParticularsCompliance

Status

7 Inventive Bonus: The CEO will gent incentive bonus subject to paying incentive bonus to all executives/officers/workers of the bank and the said bonus amount will not exceed BDT 1,000,000 in a year.

Complied

8 Honorarium for attending the Board Meeting: Being a salaried executive, CEO will not get any honorarium for attending the Board meeting or Board formed Committee meeting

Complied

9 Evaluation Report: For reappointment of the CEO, the Chairman of the bank shall have to submit a Board approved evaluation report to BB.

Complied

10 Prior Approval from Bangladesh Bank: Prior approval from Bangladesh Bank is mandatory before appointing CEO as per section 15(4) & (5) of Bank Company Act 1991 (amended up to 2013). For processing such approval, along with the proposal signed by the Chairman of the BoD, the selected person’s complete resume, offer letter (mentioning the direct & indirect remuneration and facilities) and copy of Board’s approval must be submitted to BB. The selected person must also submit declarations as per Annexure A & Annexure B to BB.

Complied

11 Decision of Bangladesh Bank is final: The decision of BB for appointment of the CEO will be treated as final and the CEO such appointed cannot be terminated, released or removed from his/her office without prior approval from BB.

Complied

B Responsibilities and Authorities of the CEO: The CEO of the bank, whatever name called, shall discharge the responsibilities and exercise the authorities as follows:

Complied

a) In terms of the financial, business and administrative authorities vested upon him by the BoD, the CEO shall discharge his own responsibilities. He shall remain accountable for achievement of financial and other business targets by means of business plan, efficient implementation thereof and prudent administrative and financial management.

Complied

b) The CEO shall ensure compliance of the Bank Company Act 1991 and other relevant laws and regulations in discharging routing functions of the bank.

Complied

c) The CEO include clearly any violation from Bank Company Act 1991 and/or other relevant laws and regulations in the “Memo” presented to the meeting of the BoD or any other Committee(s) engaged by the BoD.

Complied

d) The CEO shall report to Bangladesh Bank of issues in violation of the Bank Company Act 1991 or of other laws/regulations.

Complied

e) The recruitment and promotion of all staffs of the bank except those in the two tiers below him/her shall rest on the CEO. He/she shall act in such cases in accordance with the approved service rules on the basis of the human resources policy and approved delegation of employees as approved by the BoD.

Complied

f ) The authority relating to transfer of and disciplinary measures against the staff, except those at two tiers below the CEO, shall rest on him/her, which he/she shall apply in accordance with the approved service rules. Besides, under the purview of the human resources policy as approved by the BoD, he/she shall nominate officers for training etc.


Status of compliance with the conditions imposed by Bangladesh Bank BRPD Circular Letter No.19 dated 27 October 2013 on Contractual appointment of Advisor and Consultant.

Sl No. Particulars Compliance Status Remarks

A Rules and regulations for appointment of an Advisor

1 Experience and Suitability Complied

2

Responsibilities of the Advisor: The roles and responsibilities of the Advisor are defined specifically. The Advisor can advise the Board of Directors or CEO only on those matters specified in the appointment letter.atters specified in the appointment letter.

Complied

3 Prior approval from Bangladesh Bank Complied

4 Remuneration and other facilities of Advisor Complied

5Tenure of Advisor: The tenure of the Advisor shall be maximum 01(one) year which is renewable.

Complied

6

Appointment of Former-executive: For ensuring good governance, any former Director, CEO or any other Executive of the bank will not be eligible to become an Advisor in the same bank immediately after their retirement or resignation.

Complied

B Rules and regulations for appointment of a Consultant

1Terms of reference of Consultant: Consultant can be appointed for specialized tasks like tax, law and legal procedures, engineering and technical works, information technology, etc.

Complied

2Responsibilities of a Consultant: The responsibilities or terms of reference of a Consultant are specified. He does not involve in any activities beyond his terms of references.

Complied

3

Appointment of a Consultant: A Consultant can be appointed with the approval of the BoD. After such appointment the bank shall send the Consultant’s complete resume, terms of reference and details of remuneration to Bangladesh Bank immediately.

CompliedNo Consultant in office as on 31st December 2016.

4Tenure of a Consultant: The tenure of a Consultant should be consistent with the terms of reference but would not exceed 02 (two) years.

Complied

5 Remuneration/honorarium of a Consultant Complied

6

Appointment of Former-executive: For ensuring good governance, any former Director, CEO or any other Executive of the bank will not be eligible to appointment as a Consultant in the same bank immediately after their retirement or resignation.

Complied



March 27, 2016

Internal Control is a process effected by the Board of Directors, Senior Management and personnel of all levels. It is not solely a procedure or policy that is performed at a certain point of time rather it is continually operating at all levels within the Bank. As per guidelines of Bangladesh Bank, the Board of Directors and Senior Management are required to take appropriate steps for establishing appropriate culture to facilitate an effective internal control process and for monitoring its effectiveness on an ongoing basis; however, each individual within the organization must participate in the process.

The MANCOM received an updated “Review Report on the Risk Management of Internal Control & Compliance of the Bank” and reviewed the internal control mechanism in place and different issues on risk management of Internal Control and Compliance, e.g appropriateness and effectiveness of Internal Control Environment; Internal Control Objective; Internal Control Policy Guidelines; Organization Structure; Process Guidelines and Internal Control Process of the Bank. The Committee also reviewed the key points of Bangladesh Bank’s last inspection report on ICC of the Bank alongwith the Bank’s compliance thereof.

The Management Committee is satisfied that Internal Control Policy, Practice and Procedure of the Bank are effective and these provide a reasonable assurance in achieving objectives of the Bank in respect of (i) reliability of the financial information; (ii) effectiveness and efficiency of operations; (iii) compliance with applicable laws and regulations; (iv) adherence to management policies; (v) safeguarding of Bank’s assets; (vi) prevention and detection of fraud and errors; and (vii) accuracy and completeness of the accounting records. However, internal control environment of the Bank will further be strengthened after implementation of the processes as mentioned in the revised “Guidelines on Internal Control and Compliance in Banks” provided by Bangladesh Bank vide BRPD Circular No.03 dated 08.03.2016.

Shahid Hossain Managing Director(Former)

Certificate of MANCOM Regarding the Effectiveness of Internal Control Policy, Practice and Procedure


Credit Rating Information and Services Limited (CRISL) has reaffirmed the long term rating of Southeast Bank Limited at AA (Pronounced as Double A) and the short term rating at ST-2 based on audited financials up to 31st December, 2015 and unaudited financials up to 31st March, 2016 and other relevant qualitative as well as quantitative information up to the date of rating.

Surveillance RatingExplanation

Rating (2014) Rating (2015)

Long TermAA

Double A(High Quality and High

Safety)

Long TermAA

Double A(High Quality and High

Safety)

The Bank rated AA (High Safety) in credit rating is adjudged to be of high quality, offers higher safety and has high credit quality. This level of rating indicates a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time because of economic conditions.

Short termST-2

High Grade

Short termST-2

High Grade

The Bank rated ST-2 (High Grade) in the short term in credit rating is considered to have high certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection factors. Risk factors are very small.

Outlook Stable

Date of Rating June 23, 2016

Validity Up to June 22, 2017

Credit Rating on the Bank



The Audit Committee is an important functional Committee of the Board of Directors of the Bank. It is assigned with oversight of financial reporting, disclosure, regulatory compliance and disciplined banking operation complying with the rules and norms of banking.

Feature and Composition

The Audit Committee was lastly re-constituted by the Board of Directors in its 486th meeting held on April 11, 2016. The membership and attendance of the members of the Audit Committee are given below:

Sl. No

Members PositionMeetings

heldAttendance Remarks

1.Mr. A.H.M. Moazzem Hossain (Independent Director)

Chairman 6 6 a) The Members who could not attend any meeting were granted leave of absence.

b) Mrs. Rehana Rahman was appointed member of the Audit Committee on 11-04-2016.

c) Mrs. Sirat Monira ceased to be member of the Audit Committee on 11-04-2016.

d) Dr. Quazi Mesbahuddin Ahmed was appointed member of the Audit Committee on11-04-2016

2. Mrs. Duluma Ahmed Member 6 5

3. Mrs. Jusna Ara Kashem Member 6 5

4. Mrs. Rehana Rahman Member 6 5

5. Mrs. Sirat Monira Member 6 1

6.Dr. Quazi Mesbahuddin Ahmed(Independent Director)

Member 6 4

Quorum

Presence of 3 (three) members constitutes quorum for validly holding a meeting of the Audit Committee.

Head of Internal Control and Compliance of Head Office attended the meeings to present the agenda. On invitation, Senior Executives of the Bank including the Managing Director, Chief Financial Officer (CFO) and Head of Risk Management Division attended the meetings to meet instant queries of the Audit Committee to make its decisions fact-based. In addition, Heads of Branches whose audit reports were placed to the Audit Committee were also present in the meetings to respond to the issues raised in the reports of Internal Control and Compliance Division.

Terms of Reference of the Audit Committee

i. Mr. A.H.M. Moazzem Hossain, in his capacity as the Independent Director, shall be the Chairman of the Audit Committee.

ii. Presence of 03 (three) members shall form quorum.

iii. The tenure of office of the Audit Committee shall be for 3 years.

iv. The Company Secretary shall act as Secretary to the Audit Committee.

v. The terms of reference of the Audit Committee shall also be as specified in the BRPD Circular No.11 dated October 27, 2013 of Bangladesh Bank and provisions contained in Notification No.SEC/CMRRCD/2006-158/134/Admin 144 dated 07 August, 2012 of Bangladesh Securities and Exchange Commission (BSEC).

vi. Mr. Zakir Ahmed Khan, Advisor of the Bank, shall remain present in every meeting of the Audit Committee as far as possible and shall give his advice and suggestions for improvement of Bank’s operations and strict compliance of rules of both the Bank and its regulators.

Audit Committee (Composition, role, meetings, attendance, etc) and Internal Control


Charter of the Audit Committee

The Audit Committee is constituted by the Board of Directors for the primary purpose of assisting the Board in :

Overseeing the integrity of the company’s financial statement.

Overseeing the improvement of corporate governance standard of the company.

Overseeing the Company’s system of disclosure, internal controls and procedure.

Overseeing Bank’s internal control over financial reporting.

Overseeing Bank’s compliance with ethical standards adopted by the company.

Making reports and recommendations to the Board.

Roles and Responsibilities

The role of Audit Committee is to assist the Board in discharging its duties and responsibilities for financial reporting, corporate governance, internal control, green banking, and environmental and climate change risks. The added roles of the Audit Committee include, but not limited to, the followings:

i. Overseeing the financial reporting process.

ii. Monitoring choice of accounting policies and principles.

iii. Monitoring Internal Control Risk Management process.

iv. Overseeing hiring and performance of external auditors.

v. Reviewing the annual financial statements before submission to the Board for approval.

vi. Reviewing the quarterly and half yearly financial statements before submission to the Board for approval.

vii. Reviewing the adequacy of internal audit functions.

viii. Reviewing statement of significant party transactions submitted by the management.

ix. Reviewing Management Letters/ Letter of Internal Control Weakness issued by Statutory Auditors.

x. Reviewing the raising of fund through Repeat Public Offering/ Rights Issue and its use and application.

xi. Monitoring internal control process.

xii. Maintaining oversight regulatory compliance, ethics and whistleblower hotlines

xiii. Reviewing Audit Committee’s own terms of reference.

Reporting of the Audit Committee

The Audit Committee reported its findings and observations to the Board of Directors. It is also required

to report to the Bangladesh Securities and Exchange Commission about anything which has material impact on the financial condition and result of operation of the Bank. But such reporting was not necessitated in 2016 as nothing which has/had material impact on the financial condition and results of operation had occurred in the Bank during the year 2016.

Deliberations of the Audit Committee in 2016

During the year 2016, the Audit Committee carried out its regular functions on areas pertaining to its responsibilities. The issues it discussed and the decisions it took for improvement of operational performance of the Bank are listed below:

i. The Inspection plan of the Bank for the year 2016 was approved.

ii. Management Information System (MIS) Report for the year 2015 was reviewed by the Audit Committee and suitable decisions were given.

iii. The Audit Committee reviewed the status of key financial and business indicators of Bank and thanked the Management for the good work on Management Information System (MIS).

iv. Position of classified, re-scheduled and written-off loans of the Bank was repeatedly discussed. The Audit Committee advised to bring down classified loans by recovery and regularization. It also advised for recovery of written-off loans and regularization of re-scheduled loans.

v. The Committee studied the status of collaterals held against classified loans and gave its decisions for improving and strengthening security back up against loans and advances.

vi. The Committee recommended for appointment of bank’s external auditors for the year 2016.

vii. The Audit Committee minutely examined the Head Office Comprehensive Inspection Reports on Bank’s different branches and gave suitable decisions.

viii. The Audit Committee examined the certificate of the Management Committee regarding the effectiveness of Internal Control, Policy, Practice and Procedures.

ix. The Audit Committee reviewed periodic recovery positions of the Bank against classified, re-scheduled and written-off loans and gave suitable decisions.

x. The Audit Committee periodically examined position of classified loans and provision requirement there against. Accordingly, it gave suitable decisions.

xi. The Audit Committee reviewed the quarterly, half yearly and annual financial statements before their submission to the Board for final review and approval.



xii. The Audit Committee reviewed the report on the position of Southeast Bank Ltd. (Health Report) and gave suitable decisions for improving the Bank’s Financial Health (CAMELS Rating).

xiii. The Committee reviewed the Bank’s Self Assessment of Anti-Fraud Internal Controls and advised to put in place enough control measures following the guidelines given by the Bangladesh Bank to avert attempts of frauds and forgeries in the Bank.

xiv. The Audit Committee thoroughly reviewed the progress report of task forces on recovery of classified, written off and rescheduled loans and gave its decisions for improving and strengthening recovery efforts substantially.

xv. The Audit Committee thoroughly reviewed the findings of the Bangladesh Bank Inspection Team on different branches and instructed management to take appropriate actions to prevent repetition of lapses identified in their inspection reports.

xvi. The Audit Committee reviewed the Annual Summary Report on Audit Findings-2015 and advised for strong monitoring of non-performing loans of different branches for their timely adjustment and turning them into performing loans. The Committee also advised to obtain additional collateral against the loan where there is no collateral or inadequate collateral on best effort basis to safeguard Bank’s interest.

xvii. The Committee carried out in-depth review of audit findings of the Branches in pursuance of the respective Heads of Branches and gave directives to rectifying the lapses / irregularities within the deadlines set by the Committee.

xviii. The Committee reiterated its decision about zero tolerance to repetition of lapses identified by the Bangladesh Bank Inspection Team as well as ICCD.

xix. The Committee advised that recovery drives be geared up by strengthening and, where necessary, by further streamlining the system of recovery.

xx. The Audit Committee advised the Management to correctly assess fund requirement of a borrower and to refrain from allowing high exposure disproportionate to business needs in an account.

xxi. The Committee expressed the considered opinion that Special Mention Accounts (SMAs) need to be effectively monitored for their timely regularization. Appraisals of such loans are done by the concerned credit officers. Hence, they shall monitor the respective SMA Accounts. The system of monitoring of SMAs be effectively put in place and supervised.

xxii. The Audit Committee advised that office orders of dismissal/termination of officials for gross misconduct should be copied to appropriate authorities and circulated through the internal web-portal of the Bank for information of all after observing due procedures.

Report to the Board

All findings and decisions of the Audit Committee were reported to the Board and the Board closely reviewed them.

Minutes of Audit Committee to Bangladesh Bank

The minutes of meetings of the Audit Committee were sent to Bangladesh Bank for their information.

Reporting to the Regulatory Authorities

There had not been any occurrence in the Bank that required reporting to the relevant authorities by the Bank’s Audit Committee.

A.H.M. Moazzem Hossain Chairman


Effective internal control is essential to a bank for efficient management of its risks. It is commonly agreed that a bank requires a strong and effective system of internal controls to ensure operation of the bank safely and soundly. Indeed, internal control is the foundation of safe and sound banking. A good system of internal controls, when properly designed and consistently enforced, will broadly facilitate the management to:

Safeguard the bank’s resources;

Ensure effective and efficient operations of the bank;

Achieve the goals and objectives of the bank;

Enforce efficient managerial guards;

Produce reliable financial information and reports;

Comply with applicable laws, regulations and internal policies of the bank;

Become responsive to the changes so that the bank can adapt such changes quicker than its competitors;

Reduce the possibility of significant errors and irregularities and help in timely detection thereof;

Early detect fraud / forgeries and protect the bank from financial loss there against, etc.

Southeast Bank Ltd. (SEBL) has established the following Internal Control Cycles or pre-defined Procedures, i.e Compliance Review Work Program to identify and measure the risk of internal control and compliance of the bank:

Define terms of reference through adopting relevant policy, manuals, processes, procedures and practices.

Evaluate the control function through establishing Departmental Control Function Checklist (DCFCL), Quarterly Operation Report (QOR), Loan Documentation Checklist (LDC).

Utilize the approved Methodology of Risk Assessment for undertaking Risk Based Inspection.

Evaluate the effectiveness of internal control system through establishing MANCOM Certificate.

Review of periodical self assessment of Anti-Fraud Internal Control Report.

Establish Annual Inspection Plan.

Review of Annual Summary Report of the lapses/irregularities raised in the Internal Inspection Reports.

Review of Annual Health Report of the bank.

Review of safety and security issues of the bank etc.

The management of SEBL has put in place a successful and effective system of internal control in line with standard guidelines and guidance note of Bangladesh Bank in order to control and mitigate the risks of Internal Control and Compliance as well as to keep the bank on sound course toward profitability goals, achievement of its mission and improvement of its performance. The aspects of SEBL relating to risk control and mitigation are as under:

Control Environment: An appropriate and effective internal control environment is in place to ensure that the bank is managed and controlled in a sound and prudent manner. The Board of Directors of the bank is actively concerned with sound corporate governance and diligently discharging its responsibilities. Bank Management proactively discharges their responsibilities and supervises the activities of the bank.

Control Activities and Segregation of Duties: The management of SEBL has set up an appropriate control structure with control activities defined at every business level, i.e. top level review and appropriate activity control for different divisions/units and branches/departments. The management has also established an appropriate segregation of duties with necessary authority, job description/flow chart of works etc. to maintain an effective internal control structure.

Management Information System: SEBL has established an effective management information system to support the organizational and procedural controls. SEBL uses a new version of Core Banking Software (CBS) named ‘Bank ULTIMUS’. Access control of the CBS is properly defined and exercised. Data Center for backup of data and information has been established. Testing of system’s backup procedure and contingency plan are done regularly.

Internal Control and Compliance



Monitoring of Activities and Correcting Deficiencies: The activities of SEBL are monitored on an ongoing basis so that adopted policy, manuals, processes, procedures and practices are being adhered to. Key and high risk items are identified and monitored as part of daily activities and periodical evaluation is done by the business lines and internal inspection team. Internal control deficiencies identified by business lines, internal control team or other control personnel are reported timely and promptly to the appropriate management level and addressed immediately.

Independent Audit Mechanism: SEBL has established an independent audit/inspection mechanism to monitor the effectiveness of the organizational and procedural controls of the Bank. Internal Control and Compliance Division of the Bank with its three units (Compliance Unit, Monitoring Unit, Audit and Inspection Unit) is performing the supervisory and monitoring works to manage the risks. They are performing their day to day activities with an intention

to contribute positively towards strengthening the system of managing the risk of Internal Control & Compliance of the bank. They utilize the various internal control cycle, i.e. compliance review work program to evaluate the adequacy and effectiveness of internal controls in the operation and business process of the bank.

Inspection Teams of ICCD of SEBL carry out risk based surprise and comprehensive inspection, special inspection, investigation, IT inspection on different Branches and Divisions at Head Office of the Bank and submit report thereof. They also conduct independent testing on AML and CFT compliance at branch level. Necessary remedial measures/corrective steps are taken on the suggestions/observations made in the said reports. The summary of key points of the reports are also presented and discussed in the meeting of the Audit Committee of the Board of Directors. Appropriate actions are also taken as per the decisions of the Audit Committee for protecting the Bank’s interest.


The Bank Company (Amendment) Act-2013, inter alia, provided for constitution of a Risk Management Committee of the Board of Directors of every Bank. Bangladesh Bank issued BRPD Circular No.11 dated October 27, 2013 delineating, among other things, the composition and functions of the Risk Management Committee especially in the areas of Bank’s core risk-related issues.

Feature and Composition

The Board of Directors of the Bank in its 486th meeting held on April 11, 2016 re-constituted the Risk Management Committee comprising the following Directors of the Bank. One Independent Director was included in the Committee. The membership of the Risk Management Committee of the Board of Directors of the Bank and members’ attendance in its meetings in 2016 are given below:

Sl. No

Members PositionMeetings

heldAttendance Remarks

1. Alamgir Kabir, FCA Chairman 4 4

The Members who could not attend any meeting showing genuine ground were granted leave of absence

2.Ragib Ali(Ceased to be Director on and from March 08, 2017)

Member 4 1

3. M. A. Kashem Member 4 4

4. Azim Uddin Ahmed Member 4 4

5.A. H. M. Moazzem Hossain (Independent Director)

Member 4 4


Report of the Risk Management Committee

Structure of the Risk Management Committee

i. The Chairman of the Board of Directors of the Bank shall be the Chairman of the Risk Management Committee.

ii. Presence of 3 (three) members in a meeting of the Committee shall form quorum.

iii. The Company Secretary of the Bank shall act as the Secretary to the Risk Management Committee.

Functions of the Risk Management Committee

The broad functional areas of the Risk Management Committee are the following:

i. Risk assessment and risk control strategy.

ii. Review of Risk Policy and its approval.

iii. Review of the Information Management and reporting system of the Bank.

iv. Overseeing the overall implementation of Risk Management Policy of the Bank.

v. Reporting its decisions and recommendations to the Board.

vi. Overseeing the implementation of related guidelines issued by the regulatory bodies from time to time.

Reporting of the Risk Management Committee

As required, the Risk Management Committee reported its decisions and recommendations to the Board of Directors for review.

Deliberation of the Risk Management Committee in 2016

During the year 2016, the Risk Management Committee discharged its functions in areas relating to its responsibilities. The issues it discussed and the decisions it took for improvement of risk management scenario in the Bank are enumerated below:

1. Advised the management to regularly monitor the large loans to protect Bank’s exposure and obtain additional securities from such borrowers on best effort basis to reduce charge on Bank’s capital.



2. Advised the management to persuade the existing good corporate and SME borrowers for their credit rating to reduce charge on Bank’s capital.

3. Periodically reviewed the maturity and duration gaps of Bank’s assets and liabilities and advised the management for their prudent management.

4. Advised the management to monitor the Non Performing Loans of the bank constantly to bring those back to performing status.

5. Early Warning System be strengthened and post-loan monitoring process be intensified for effective credit risk management.

6. Advised the management to get Credit Rating of the large borrowers to reduce charge on Bank’s capital.

7. The Heads of Branches be asked to exercise added due diligence in assessing credit proposals.

8. Loan to a customer shall be disbursed only after completion of documentation formalities.

9. Off-Balance Sheet items of the Bank be handled with more care and caution so that these don’t turn into funded exposure.

10. Advised for diversification of Bank’s loan portfolio as far as possible and practicable.

11. Reviewed the Capital to Risk-weighted Assets Ratio (CRAR) of the Bank from time to time against minimum requirement.

12. Advised the management to improve asset quality by taking pragmatic steps. A balance between the growth of asset and capital be maintained to improve the Bank’s Capital to Risk-weighted Assets Ratio (CRAR).

13. Large loans shall be reduced gradually within a reasonable level.

14. Rules for single borrower exposure limit shall be strictly followed and performance of the top borrowers shall be regularly monitored.

15. All out efforts shall be given for recovery of non-performing loans as well as for creation of new quality assets to increase Bank’s profitability.

16. Effective measures be geared up for recovery of Bank’s dues from the top defaulters.

17. The advice and guidelines of Bangladesh Bank as given in the comprehensive risk rating letter be complied with for qualitative improvement of the Bank.

18. Reviewed the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) of the Bank from time to time against minimum requirement set by the regulator.

19. Advised the management to strictly follow the single borrower exposure limit as per the guidelines of Bangladesh Bank.

20. Loans to large borrowers not be increased unless sufficiently covered by additional collaterals.

21. Reviewed Bangladesh Bank’s report on SEBL’s Risk Rating and Stress Testing.

22. Loans to RMG and Textile sectors be regularly monitored to keep them within the sectorial allocation.

23. The Heads of Branches be asked to diversify their loans and manage related risks efficiently.

Reporting to the Board

The decisions and recommendations of the Risk Management Committee were submitted before the Board of Directors for review and the Board closely reviewed them.

Minutes of the Risk Management Committee to Bangladesh Bank

The minutes of meetings of the Risk Management Committee were submitted to Bangladesh Bank for their information.

Alamgir Kabir, FCAChairmanRisk Management Committee


BDT in million

Particulars

2016 2015 2016 2015 2016 2015 2016 2015

1 Jan16 to 31

Dec 16

1 Jan 15 to 31 Dec 15

1 Jan 16 to 30 Sep 16

1 Jan 15 to 30 Sep 15

1 Jan 16 to 30 June 16

1 Jan 15 to 30 June 15

1st Jan 16 to 31 Mar 16

1st Jan 15 to 31 Mar 15

4th Qtr. 4th Qtr. 3rd Qtr. 3rd Qtr. 2nd Qtr. 2nd Qtr. 1st Qtr. 1st Qtr.

Balance Sheet - - - - - - - -

Cash 17,835 15,997 17,541 13,812 16,487 14,593 14,306 14,446

Money at call and on short notice 4,271 923 3,822 2,134 3,325 627 1,113 648

Loans and advances/investments 191,866 168,878 187,505 166,204 181,450 160,177 174,428 151,106

Fixed assets including premises, furniture and fixtures

8,947 7,885 8,718 7,876 8,638 7,882 8,331 7,907

Other assets 3,102 4,813 3,118 5,558 4,526 3,554 4,829 4,118

Total assets 291,798 260,718 289,004 257,937 276,404 245,430 265,479 242,823

Borrowings from other banks, financial institutions and agents

7,372 4,557 5,249 7,590 7,018 7,816 7,034 8,340

Subordinated bond 8,000 3,000 3,000 - 3,000 - 3,000 -

Deposits and other accounts 229,973 210,431 234,293 206,958 220,406 197,059 211,081 193,743

Other liabilities 19,919 15,514 19,428 17,053 19,631 15,983 16,562 16,827

Total liabilities 265,264 233,502 261,970 231,602 250,055 220,858 237,677 218,910

Paid up capital 9,170 9,170 9,170 9,170 9,170 9,170 9,170 9,170

Total shareholders' equity 26,524 27,207 27,025 26,327 26,341 24,562 27,793 23,903

Total liabilities and shareholders' equity 291,798 260,718 289,004 257,937 276,404 245,430 265,479 242,823

Off- Balance Sheet Items 113,911 88,522 103,350 93,867 101,312 96,729 93,116 99,160

Profit And Loss Account - - - - - - - -

Net interest income/net profit on investments

4,207 3,138 3,357 2,279 2,270 1,509 1,095 774

Total operating income (A) 12,852 11,604 9,363 8,617 6,098 5,717 2,871 2,779

Total operating expenses (B) 4,349 3,570 3,005 2,537 1,888 1,592 906 766

Profit before provision (C=A-B) 8,503 8,034 6,358 6,080 4,210 4,125 1,965 2,012

Net profit after taxation 2,435 3,069 2,280 2,348 1,307 1,672 542 770

Earnings Per Share (EPS) 2.66 3.35 2.49 2.56 1.42 1.82 0.59 0.84

As per the regulatory requirement of Bangladesh Securities and Exchange Commission (BSEC), Bank has prepared and presented Quarter Ended Financial Statements. These statements are prepared in accordance with BAS (Bangladesh Accounting Standards). The statements are sent to Audit committee for review. After review by the Audit Committee and approval by the Board, the statements are finally submitted to Bangladesh Securities and Exchange Commission (BSEC). Afterwards, the Quarter Ended Financial Statements are published in several daily newspapers. The statement is also published in the website of the bank.

Evaluation of the Quarterly Financials by the Audit Committee and by the Board



Bismillahir Rahmanir Rahim

We solemnly pray to Allah, Subhanhu Wa Ta’ala for bestowal of His unbound blessing upon us and granting us tawfique to fulfill Shariah requirements in our Islamic Banking Operations. May Allah also grant us ability to reap the full benefits of Shariah-based banking in our Bank.

In the year 2016, Southeast Bank Limited catered Islamic Banking services through the following 05 (five) designated Islamic banking branches:

Branch Name Address

01 Chhagalnaiya Branch, Feni Mir Shopping Complex, Chhagalnaiya, Feni

02 Cox’s Bazar Branch, Cox’s Bazar Asha Shopping Complex, 430-431 Bazar Ghata, Cox’s Bazar

03 Bandar Bazar Branch, Sylhet Karimullah Market, Bandar Bazar, Sylhet.

04 Motijheel Branch, Dhaka 125, Motijheel C/A, Motijheel, Dhaka.

05 CDA Avenue Branch, ChittagongAli Villa, 1640/1861 (new), CDA avenue, Asian Highway, East Nasirabad, Chittagong

The Bank constituted a Shariah Supervisory Committee to oversee the Shariah compliance in Bank’s Islamic Banking. The following veterans versed in Islamic jurisprudence are the Faquih Members on the Shariah Supervisory Committee:

1. Professor Moulana Mohammad Salah-Uddin

Chairman Khateeb, Baitul Mukaram National Mosque, Dhaka,

and former Principal, Madrasha-e-Alia, Dhaka

2. Mr. M. Kamaluddin Chowdhury Member Former Managing Director of Islami Bank Bangladesh

Ltd. and Shahjalal Islami Bank Ltd.

3. Moulana Mohammad Kafiluddin Sarker Member Principal, Dhaka Nesaria Kamil Madrasa and Katib,

Aminbagh Jame Mosque

The Shariah Supervisory Committee also reviewed different operational issues including those referred by the Management of the Bank. It gave necessary guidelines and counseling.

We report the following to the Shareholders in respect of Islamic Banking operation of the Bank.

During the Year 2016, Shariah Supervisory Committee of Southeast Bank Limited held 04(four) formal meetings.

The Shariah Supervisory Committee advised to extend the Islamic Banking Services Desks to all the newly opened Branches of the Bank.

The Shariah Supervisory Committee advised to arrange Shariah Inspection of every Branch twice in a year and ensure compliance of shariah requirements in Bank’s Islamic Banking operations.

Training Program on Islamic Banking were arranged. Members of Shariah Supervisory Committee and experts in Islamic Banking were invited to speak to the participants in such training programs.

The people that work in Bank’s Islamic Banking Branches as well as Islamic Banking Division at Head Office are sufficiently trained to offer best Islamic banking services complying Shariah principles.

The Islamic Banking Branches were advised to move aggressively to procure more low-cost and no-cost deposit by increasing the number of Accounts and number of deposit customers of the Islamic Banking Branches to improve deposit-mix.

Report of the Bank’sShariah Supervisory Committee


The Shariah Supervisory Committee advised to park more fresh investment clients in the Islamic Banking Branches.

The Shariah Supervisory Committee approved the Branding of Islamic Banking products within one folder named “Tijarah”. The Committee also advised that the folder containing the salient features of Bank’s Islamic Banking Products be supplied to the Islamic Banking Branches. The instruction was complied.

The Shariah Supervisory Committee advised to continue frequent training programs on Islamic Banking to develop quality human resources for Islamic Banking Service Desks. The advice has been taken in right earnest by the Bank’s Management

The Shariah Supervisory Committee approved the documentation checklist for Shariah compliance.

Shariah Inspection reports of Islamic Banking Operation of the Bank for the year 2016

The Bank engaged one Muraquib for Shariah inspection of Bank’s five Islamic Banking Branches. The Muraquib has been performing his duties satisfactorily.

i) The Shariah Supervisory Committee stressed upon frequent inspection of the Islamic Banking Branches.

The Management of the Bank confirmed that all the Islamic Banking Branches were inspected by the Muraquib in 2016. It was observed from the inspection reports that compliance of Shariah has significantly improved during the year.

ii) No deviation of any Shariah requirement was reported to the Shariah Supervisory Committee by the Management.

iii) The accounts of Islamic Banking Operations of Southeast Bank Limited were kept separate from conventional banking ones.

iv) Efforts regarding engagement of buying agents at branch level and their eagerness to attain the expected level in shariah compliance while discharging their duties and responsibilities have been strengthened.

May Allah give us tawfique to achieve His satisfaction through implementation of Shariah in every sphere of our life including those applicable to banking transactions. Ameen.

Prof. Moulana Mohammad Salah-UddinChairman



Capital is one of several ways for the Bank to fund itself, alongside deposits and other sources of funding. It absorbs losses, promotes public confidence, helps restrict excessive asset growth, and provides protection to depositors. It provides a measure of assurance to the public that the Bank will continue to provide financial services even when losses have been incurred, thereby helping to maintain confidence in the banking system and minimize liquidity concerns. A bank with insufficient capital can easily go bust if it suffers large losses. Therefore, SEBL performs proactive capital planning that incorporates more robust financial and operational risk assessments which will have the following benefits for the Bank:

Assisting in the identification, assessment, monitoring and mitigation of the Bank’s risks.

Increasing the Management and the Board’s understanding of the Bank’s current risk profile.

Helping the Management and the Board to define its risk tolerance.

Facilitating the quantification of risk thresholds.

Assisting in the development of action plans to manage key risks.

Aiding in contingency planning.

The starting point for a capital plan is the annual budget cycle which forecasts the Bank’s Balance Sheet trajectory over a five year forward looking horizon. The budget cycle incorporates assumptions about the future shape and direction of the Balance Sheet of the Bank. It includes assumptions around the future path of Risk Weighted Assets, profitability and tax. The future direction of regulation which are known (for example phasing in of BAESL III requirements) or expected is also taken into account. The capital plans are then tested for capital adequacy and measured against the Bank’s risk appetite framework using a range of stress scenarios covering adverse economic conditions as well as other adverse factors that could impact the Bank. In addition, the Bank maintains a recovery plan which sets out a range of potential mitigating actions that could be taken in response to an extreme stress.

Regular reporting of actual and projected capital and leverage ratios including those in stressed scenarios, is

undertaken along with submissions to the Management Level Risk Committee, SRP (Supervisory Review Process) team, ALCO, MANCOM, Board Risk Committee and the Board.

The Bank continues to monitor regulatory developments very closely and analyze the potential capital impacts to ensure maintenance of a strong capital position that exceeds the minimum regulatory requirements and risk appetite and is consistent with market expectations. Considerations include:

Internal risk appetite (including stress testing).

Regulatory policies and guidance.

Market conditions and expectations.

Capital Management in SEBL

Capital Management lies at the core of SEBL’s strength and sustainability goals. The construction of capital starts with Common Equity Tier 1 (CET1) and other classes of capital such as Additional Tier 1 (AT1) and Tier 2. Capital Management involves the optimization and efficient use of capital required by the Bank’s businesses, the outcomes of stress testing, the requirements of the market and the regulators and the supply of adequate forms of capital at acceptable prices.

The Bank has capital management framework including policies and procedures that are designed to measure actual and projected capital performance against risk appetite, ensures that it continues to comply with regulatory requirements and is positioned to meet projected future changes to its capital requirements.

Southeast Bank maintains a sufficient level of capital that allows it to operate over its strategic horizon with an agreed risk appetite in pursuit of its business strategy, taking into account regulatory requirements, support for customers and to provide confidence to stakeholders. The Bank issued a Basel III compliant Tier 2 Subordinated bond for BDT 5,000 million in 2016. It has also improved its capital mix with a Basel III compliant subordinated capital instrument. Besides, the Bank is able to accumulate additional capital through the reduction in Risk Weighted Assets, accumulation of profits over time, by raising new equity via, for example, a rights issue or Tier 2 capital

Capital Plan


by issuing subordinated debt. The Bank is also able to manage the demand for capital through management actions including adjusting its lending strategy through business disposals.

Capital Requirement under Basel III

Basel III aims to improve the quality of capital, increase capital levels and remove inconsistencies in the definition of capital as explained in the table below-

SEBL adopted the Basel III framework introduced by the Central bank. It came into effect on January 2015 and the Bank has been compliant with the minimum requirements from that date. The Bank is well positioned to comply with the requirements that are subject to phase-in rules within 2019 as per the following table-

Particulars 2015 2016 2017 2018 2019

Minimum Common Equity Tier-1 (CET-1) Capital Ratio 4.50% 4.50% 4.50% 4.50% 4.50%

Capital Conservation Buffer - 0.625% 1.25% 1.875% 2.50%

Minimum CET-1 plus Capital Conservation Buffer 4. 50% 5.125% 5.75% 6.375% 7.00%

Minimum T-1 Capital Ratio 5.50% 5.50% 6.00% 6.00% 6.00%

Minimum Total Capital Ratio 10.00% 10.00% 10.00% 10.00% 10.00%

Minimum Total Capital plus Capital Conservation Buffer 10.00% 10.625% 11.25% 11.875% 12.50%

Increased quality, quantity and consistency of capital> Increased focus on common equity tier (CET I)> Increased capital levels

Capital conservation buffer> 2.5% CET I capital buffer by 2019 to decrease pro-cyclicality> Build up capital during favourable economic conditions that can be drawn on during times of stress.



Loan classifications are expression of different degrees of risk against non-repayment of any loan by the borrower based on past due days. In general, the asset quality of the banking industry came under severe pressure during the year due to broader macroeconomic factors as well as issues specific to certain sectors in the economy. The banking industry on a collective basis saw a sharp spike in non-performing assets. Maintenance of quality of asset in such an economic condition has been a great challenge. By the grace of the Almighty Allah and as an evidence of collective effort of both Head Office management and Branch officials, Southeast Bank could arrest the deterioration of loan portfolio and maintain the highest standards of governance in respect of recognition and provisioning of non-performing loans. Maintenance of asset Quality has been given top priority by restricting non-performing assets through early detection, monitoring, corrective action plans, shared information and disclosures to keep future recurrence in check.

Industry Scenario of Non-Performing Loans

The Banking sector of Bangladesh is trapped in a gridlock of non-performing loans (NPL). The overall banking sector has passed through an adverse business environment during 2016. A number of factors like slow growth of investment, uncertainty among the investors, financial scams especially in state owned Banks, fund diversion, sluggishness in real estate sector, excess liquidity, etc impacted the performances of banking industry. Establishing or maintaining good governance, managing NPL including collecting bad loans and increasing profitability were major challenges for 2016 since recovery from rescheduled/restructured loans were not encouraging. Major industrial sectors did not perform in line with expectations mainly due to procedural delays and infrastructural bottlenecks. Therefore, many of rescheduled/restructured loans have become classified again due to failure of repayment of instalments.

Classification Status of Credit Portfolio

The Bank classifies its loan portfolio in accordance with the rules and regulations set by Bangladesh Bank from time to time. In case of need, the Bank classifies some loans on qualitative judgment too. Our Bank Management always remains vigilant to arrest new loans from being classified, minimize the existing non-performing loans by way of cash recovery and regularize through rescheduling to the deserving cases under the purview of Bangladesh Bank’s guidelines. Amidst adverse trend of loan classification, Southeast Bank could restrict its classified loan position to BDT 9,257.79 million which was 4.89% of total loans and advances as on December 31, 2016. The status

of unclassified and classified loans of the bank as on 31.12.2016 was as follows:

StatusAmount

BDT in Million

Percentage

Unclassified Loans

Standard 171,314.82 90.47

Special Mention Account 8,792.35 4.64

Sub-Total 180,107.17 95.11

Classified Loans

Sub-Standard 1,567.13 0.83

Doubtful 587.80 0.31

Bad/Loss 7,102.86 3.75

Sub Total 9,257.79 4.89

Grand Total 189,364.96 100

Impact of Non-performing Loans

Non-performing assets have multidimensional impact on the Bank and its profitability. The higher NPL indicates incremental non-income generating assets. NPL affects banks’ profitability adversely and reduces return on investment (ROI) and hampers the capital adequacy ratio (CAR). At the same time, it has a great impact on reputation of the Bank.

Provisioning

Provisioning is the computation and maintenance of required provisions against the impaired as well as regular portfolio including off-balance sheet items. Specific loan loss provisions in respect of non-performing advances are made based on the degree of impairment of loans and advances as per guidelines of Bangladesh Bank. The Bank also maintains general provisions for its standard loans and off-balance sheet items as per the regulatory requirement. In addition, the Bank keeps some additional provision as per the advice of Bangladesh Bank.

The Bank exerts its best endeavor to reduce the existing classified loans by way of cash recovery and rescheduling in some deserving cases and writing-off the loans complying the rules and regulation of Bangladesh Bank. As a result of concerted effort, the Bank could restrict the amount of non-performing loans to BDT 9,257.79 million which was 4.89% of total loans as on December 31, 2016. At the same time, the Bank kept provisions of BDT 7,297.78 million for classified/unclassified loans and off balance sheet items against required provisions of BDT 5,984.91 million.

Statement ofNon-Performing Loan (NPL)


Loan Write-offs

Minimizing the amount of non-performing loans through writing-off of bad loans is an internationally accepted practice to keep the balance sheet sound. Southeast Bank has started writing-off of loans since 2004. Impaired loans are written-off when there is no longer any realistic prospect of recovery of part, or the entire loan in a shorter span of time.

Initiatives taken for recovery of Non-Performing Loans (NPL)

In order to arrest NPL, our focus was not only on reducing NPL portfolio, but also avoiding further NPL. In line with that, we have strengthened our recovery and monitoring drives, utilized external sources where found suitable, strengthened our legal team, intensified recovery initiatives by establishing a task force for sizeable recovery. Southeast Bank has taken the following initiatives to recover the non-performing loans:

Defaulted clients are being continuously pursued jointly by the Branch and the Head Office officials through letters, phone calls, visits to their business places and residences and holding meetings at Head Office and branches.

A strong ‘Taskforce’ comprising senior level executives of Head office and Heads of Respective Branches has been formed for recovery of classified loans of the Bank. Taskforce is actively reviewing the recovery position of those loans in their monthly meeting and giving necessary directions/guidelines to gear up the recovery process.

Respective Branches have been given targets for recovery of classified loans at the beginning of the year and achievement of target by the branches is reviewed by Head Office continuously. In case of need, branches are given necessary guidelines/assistance to achieve the recovery target of the branches.

Officials of Legal Affairs & Recovery Division of Head Office are regularly visiting the branches with defaulted loans and meeting the defaulted clients to find out ways for settlement/adjustment of bad loans of the bank outside the court.

Considering the client’s business/financial condition, long-drawn legal procedures, time value of money concept several measures like rescheduling with longer repayment period, concessional interest rate and in few cases settlement arrangement with waiver of a portion of interest are allowed to recover the loans.

After exhausting all recovery efforts suits are filed with Artha Rin Adalat as well as CMM court to recover non-performing loans. All cases are properly followed up jointly by the Branch and Head Office. In case of inadequate collateral security initiatives are taken to attach other properties of the client/guarantor/mortgagor through the court.

In respect of certificate owned properties all possible steps are taken to obtain the possession of the properties from the court as well as to sell out those through auction at a competitive price.

Court cases are constantly monitored through the panel lawyers of the bank. In case of need senior lawyers are appointed to conduct the court cases of the Bank. Efforts are taken to recover bad loans through early disposal of court cases.

A 06-member special committee has been constituted comprising 03-officials of Legal Affairs & Recovery Division of Head Office and 03-officials of the concerned branch to follow up the big cases of the branch for early disposal.

Top Management of the Bank always remain vigilant to monitor and review all the relevant aspects; provides necessary directions and guidance time to time; to ensure asset quality through reducing NPL ratio of the Bank.



Risk Managementand ControlFrameworkOur risk Management and Control Measures are aimed at remaining disciplined, reducing risks and augmenting success.


Risk Managementand ControlFrameworkOur risk Management and Control Measures are aimed at remaining disciplined, reducing risks and augmenting success. The world is passing through a very uncertain time both

economically and politically. Although global growth is estimated to be 2.70 percent in 2017 according to World Bank’s latest projections; the stagnant global trade, subdued investment and above all heightened policy uncertainty are the downside risks for global growth. Protectionist policies announced by the new US administration, likely fallout from Brexit and growing popularity of populism and anti-globalization rhetorics in the US and Europe pose serious threats to global trade, multilateralism and geopolitical environment. While the withdrawal of US from Trans Pacific Partnership (TPP) may have some positive inpact on our trade with the US no one knows to what extent abandonment of multilateralism would be replaced by bilateralism. Thus, Bangladesh will have to watch carefully the likely developments in policy directions outside its boderes and take advantage of the situation as they come by in days to come.

The Bangladesh economy has demonstrated resilience and is on a consistent upward growth trajectory as reflected in a number of indicators such as GDP growth of 7.11 percent, a five-year low average CPI inflation of 5.50 per cent, moderate private sector credit growth of 15.55 per cent, foreign currency reserve of over 32 billion and current account balance of 3.70 billion in FY 2015-16. All the macroeconomic indicators are expected to remain stable and favorable in 2017 for attaining GDP growth target of 7.20 per cent. The banking sector is however presently burdened with excess liquidity, swelling Non Performing Loan (NPL), decreasing interest rate spread, falling remittance, and the threat of cyber attacks. Promising macroeconomic environment, growth oriented and pragmatic monetary policy, increasing public and private sector investment and stronger regulatory supervision are expected to invigorate the banking sector in 2017. In the midst of all these uncertainties the financial sector will not be immune from risks.

In the era of financial liberalization, risk management has been a much talked about issue in the financial industry around the globe. The increased deregulation in the financial sector and its global consequences in the form of financial turmoil have stirred the regulators to rein in the defiant market for financial discipline. In Bangladesh we have also felt the heat; and the central bank focused more on regulations, control mechanisms and limits so that financial soundness of the financial institutions is ensured.

Risk is directly proportionate to return. The more risk a bank takes, the more profit it can expect. But exposure to excessive risk may lead to vulnerabilities and force it out of the business. Thus maintaining a trade-off between risk and return is the prime objective of the risk management activities of our bank. Southeast Bank aims to administer

risks in an integrated approach to generate consistent and steady income keeping the risk of doing business within limit. We have risk management framework in place to identify, prioritize, manage and mitigate the risks we face. The process is forward looking which keeps us aware of future risks. It ensures addressing the risks in a consistent and systematic way through robust internal control. We set the overall level of risk that can be absorbed and accommodated. We accept risk taking as part of our strategy to get financial and non-financial returns commensurate with the risk. Southeast Bank tries to ensure that risk taking is prudent, within limit and informed.

Southeast Bank always strives for excellence in all its endeavors to effectively manage risks. Identifying and addressing various kinds of risks is a continuous process and the Bank has established an effective framework to revise and update the framework as and when needed. Our commitment is to be a fully compliant, transparent, resilient and sustainable bank.

S. M. Mainuddin ChowdhuryAdditional Managing Director & Chief Risk Officer (CRO)

Report on Risk Management Framework, Mitigation Methodology & Risk Reporting by Chief Risk Officer

Risk managem

ent


Overview

SEBL has a robust and integrated risk management framework which sets out elaborately the responsibilities and the accountabilities for risk management of the Bank. The framework consists of two key components-

1. Strategy and Risk Appetite: The Bank has established a strategy as well as articulated a statement of risk appetite that is consistent with that strategy. The risk appetite statement describes and measures the amount and types of risk that the Bank is prepared to take in executing its strategy.

The strategic risk appetite objectives are:

Maintaining capital adequacy: To ensure that there is sufficient capital resources to meet regulatory requirements and to cover the potential unexpected losses.

Delivering stable earnings growth: To ensure sustainable growth based on a longer-term risk-versus reward consideration.

Ensuring stable and efficient access to funding and liquidity: To ensure optimum liquidity to meet its all financial obligations.

Maintaining stakeholder confidence: To ensure that SEBL is valued and trusted by stakeholders to attain its strategic objectives.

2. Policies: Policies have been established for the management of each risk type which are subject to annual Board review and approval. They specify responsibility for managing each risk and requirements for measurement and reporting. The Risk Management Framework outlines the formal structure for the flow of risk information and reporting from business areas to the risk management committees and the Board. It also defines how strategic direction and guidance is cascaded down from the Board and risk management committees.

Risk Management at Management level of the Bank

The three lines of defense model is used for the management of risk. It provides a clear set of principles by which a cohesive operating model is implemented that provides a framework for the articulation of accountabilities and responsibilities for managing risk across the Bank. SEBL’s risk management approach is premised on the following three lines of defense:

1st Line of Defense

Business Unit Management/Branches

Primarily responsible for risk management. The process of assessing, evaluating and measuring risk is integrated into the day-to-day activities of the business. This process includes implementing the Bank’s risk management framework, identifying issues and taking remedial action where required. Business unit management is also accountable for reporting to the Head Office management and regulatory bodies.

2nd Line of Defense

Head Office management by different specialized

divisions and committees like: MANCOM; ALCO, Strategic Committee,

Product Committee are other major committees.

Prepare policies in line with the regulatory and economic changes.

The business unit risk management functions implement the Bank’s risks management framework and policy in the business units and Head Office Management approves risk within specific mandates and provide an independent overview of the effectiveness of risk management by the first line of defense.

3rd Line of Defense

a)Internal Control and Compliance

a) Ensure that the Bank will comply with laws and regulations as well as policies, plans, internal rules and procedures, and decrease the risk of unexpected losses or damage to the Bank’s reputation.

b) Risk Management Division

b) Provides an independent assessment of the adequacy and effectiveness of the overall risk management framework and risk governance structures, and reports to risk management committee of the Board.

Risk Management in SEBL


Risk Management at Board level

Risk Management Structure

Three separate committees of Board named: Executive Committee, Audit Committee and Risk Management Committee, are responsible for risk management and operations of the Bank.

Executive Committee of the Board:The Executive Committee can take all necessary decisions or can approve cases within power delegated by the Board of Directors. However, all decisions taken in the Executive Committee should be ratified in the next Board.

Audit Committee of the Board:The Audit Committee assists the Board in fulfilling its oversight responsibilities. The committee reviews the financial reporting process, the system of internal control and management of financial risks, the supervision of the audit process, and the Bank’s process for monitoring compliance with laws and regulations.

Risk Management Committee of the Board:Board Risk Management Committee is responsible for mitigating risks arising from strategies and policies formulated by the Board.

Risk Management Committees and Reporting Line

Risk management of the Bank has risk oversight for the following core risk areas:

1. Credit Risk Management

2. Asset-Liability Risk Management

3. Foreign Exchange Risk Management

4. Internal Control and Compliance Risk Management

5. Money Laundering Risk Management

6. Information and Communication Technology Risk Management

Apart from the core risks mentioned above, the Environmental risk is one of the major risks that has been considered as an integral part of credit risk. The Bank’s risk management processes, policies and mitigations of the

core risks along with Environmental risk are described below:

01. Credit Risk Management

Credit risk entails the risk of loss that may occur from any borrower’s failure to abide by the terms and conditions of any financial contract, principally the failure to make required payments to the Bank against a loan received by the Borrower. Southeast Bank has a comprehensive credit risk management policy, which deals with identification, assessment, measurement and mitigation of credit risk. Credit Risk Management process of the bank is articulated through various Board approved policies viz. Credit Risk Management Policy, Delegation of Business Powers to Individual Executives/Officers for loans and advances, Valuation Methodology, Standardized Recovery/

Board ofDirectors

ALCO

ManagingDirector

MANCOM Risk ManagementDivision

Audit Committeeof the Board

Risk ManagementCommittee of the Board

Management LevelRisk Committee

Internal Control andCompliance Division

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Collection Procedure etc. The Bank measures, monitors and manages credit risk at an individual borrower level and at the portfolio level as well. The Bank’s structured and standardized credit approval process includes a well-established procedure of comprehensive appraisal based on the guidelines- Credit Risk Management Policy of the Bank and rules and regulations of Bangladesh Bank and other regulatory authorities. This policy is being reviewed and updated annually incorporating the new instructions of regulators, considering the global and local economic trend and based on appetite of the Bank. Bank’s Credit Risk Management practices are based on policy directives duly approved by the Board which, inter-alia, encompasses the followings:

i. Credit marketing.ii. Credit approval processes/risk assessment and ways

and means of mitigation.iii. Credit Risk monitoring processes.iv. Credit Risk mitigation processes.

i. Credit Marketing

All the branches are the ambassadors of the Bank located at the door step of the customers and they are the primary contact point with the clients. Branch officials and Direct Sales Executives promote the business of the Bank and sell the products and services to the prospective customers. They establish contact with the potential clients and park them to the Bank as per the directives of Head Office in line with the Credit Risk Management Guidelines, annual sectoral allocation, strategies and policies to achieve the targets.

ii. Credit Approval Process

The Credit Officer at Branch level acts as relationship officer and is held responsible to ensure the accuracy of the entire credit application/ proposal submitted for approval. A thorough credit and risk assessment is conducted prior to granting any loan. The Corporate Banking Division, SME & Agri Credit Division, Islamic Banking Division, Retail Banking Division of Head Office are actively involved in scrutinizing, analyzing, assessing and processing the credit proposal and in some cases marketing (syndication finance). The Credit Risk Management Division is involved in evaluation and in-depth analysis of risks associated with the individual borrower and in finding out the mitigating factors to minimize those risks. Then the respective credit officers of Head Office further process the proposal embodying and complying the observations of CRM and place the proposal to Head Office Credit Review Committee (HOCRC) for consideration/decision. Upon recommendation of Head Office Credit Review Committee, the competent authority (as per delegated business power) may approve or decline the proposal. Managing Director may recommend the proposals which are beyond the Managing Director’s delegated authority to the EC / BoD as per delegation for approval/ decision.

Upon approval a letter, conveying the sanction of loans, is issued in four copies (for the Branch, CAD, ICCD and Corporate Banking) by the credit approval Department of CRM. (if declined, the same is communicated accordingly.)

iii. Credit Risk Monitoring Process

The Credit Risk Management activities of the Bank aim at ensuring that there is no undue deterioration in quality of individual assets within the portfolio. It also aims at continuing improvement of the overall quality of assets at the portfolio level, by deploying appraisal skills, ensuring adherence to credit basics/lending guidelines, maintaining documentation standards and complying with the rules and regulations of regulatory authorities while leaving enough room for flexibility and innovation. The primary monitoring is done by branches’ relationship officers/managers as well as Head of Branch regarding their performances, business, transaction and turnover, repayment behavior etc.

Simultaneously, the Credit Administration Department under CRM Division is assigned to look after post approval process such as to establish better control over loan portfolio by helping completion of documentation, scrutinizing the checklist of documents, setting limits and tenor and pricing of loans etc. in a systematic manner and allow subsequent disbursement, ensuring utilization of fund, monitoring and compliance of all covenants and conditions precedent. This Department keeps constant follow-up of the credits right from its sanction and continues its efforts to keep the credits performing and unclassified. Besides, overall portfolio of the bank is reviewed at regular intervals and brought to the notice of senior level management regarding concentration risks, geographical distribution, downgradation along with early alert list (if any) for information & their guidance. These coherent activities altogether help the bank to maintain sound health of the credit portfolio and to attain a sustainable growth.

iv. Credit Risk Mitigation Process

The bank makes all possible efforts to mitigate risks associated with credit accounts through suitable collaterals, guarantors, insurance coverage etc. wherever it is considered feasible and desirable. In addition to that, terms and conditions under which credit is sanctioned also go a long way to mitigate risks associated with credit. Regular monitoring and control of accounts also add to the risk mitigation. In order to mitigate risks, the Bank takes necessary guarantees and documents including charge documents.

2. Asset-Liability Risk Management

Asset Liability Risk Management (ALM) can be defined as a mechanism to address the risk faced by a bank due to a mismatch between assets and liabilities either as a result of liquidity or changes in interest rates. Liquidity is an institution’s ability to meet its liabilities either by borrowing


or converting assets. Apart from liquidity, a bank may also have a mismatch due to changes in interest rates as banks typically tend to borrow short term and lend long term.

Liquidity Risk

Liquidity risk refers to the risk of a bank’s inability to meet its financial obligations as they fall due without incurring unacceptable costs or losses through fund raising and assets liquidation. Liquidity risk can also arise due to bank’s incapability to manage unexpected decrease or change in funding sources. It can negatively affect the earnings and growth potential if the liquidity position constrains a bank from undertaking a transaction at normal market rates/prices.

Measurement and Mitigation of Liquidity Risk

Southeast Bank has a well established liquidity strategy, policy and procedure in line with the Bangladesh Bank guidelines that establishes an appropriate and properly controlled liquidity risk environment. The ALCO, which oversees the liquidity and other risks of the bank, manages the liquidity by ensuring the followings:

Preparation of Structural Liquidity Profile (SLP) of Assets and Liabilities in different time buckets as per Bangladesh Bank Guideline.

Maintenance of a cushion of high quality, unencumbered, liquid assets that can be used, without impediment, to obtain funding in times of stress;

Remaining present in the inter-bank market by regular borrowing and lending side by side maintaining credibility and good reputation with the depositors / lenders to make sure that liabilities matured are promptly renewed.

Diversification in the sources (including counterparties, instruments, currencies and markets) and tenor of funding, and regular review of concentration limits;

The BASEL III guideline provided two effective monitoring tools to measure the liquidity named Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) which our bank is maintaining from the beginning.

Interest Rate Risk

Interest rate risk is the risk to income or capital arising from fluctuation in the interest rates. Changes in interest rates also affect the underlying value of the assets and liabilities of the bank because the present value of future cash flows changes when interest rates change. Interest Rate Risk, if assumed correctly, can be an important source of profit and share value. However, excess Interest Rate Risk can significantly jeopardize the bank’s income and capital base.

Measurement and Mitigation of Interest Rate Risk:

Effective Interest Rate Risk management is a key component of earnings, capital preservation, and growth. We measure Interest Rate Risk (IRR) through Gap Analysis of Rate Sensitive Assets and Liabilities to estimate the probable impact on Net Interest Income of the bank. Where rate sensitive assets are more than rate sensitive liabilities (i.e. positive gap) an increase in interest rate will impact the Net Interest Income positively and vice versa.

Another gauge to measure IRR is Duration Gap Analysis which is used to predict the likely impact of interest rate movements on the net worth of the bank. By changing the durations of investment assets, we try to obtain the desired impact of interest rate movements on the Balance Sheet of the bank.

3. Foreign Exchange Risk Management

The uncertainty about fluctuations in exchange rates leads to Foreign Exchange Risk. Typically, a depreciating currency leads to gains from assets and losses from liabilities whereas an appreciating currency results in the opposite. In the foreign exchange business, banks also face the risk of default of the counter parties or settlement risk. The foreign exchange positions arise from the following activities:

Trading in foreign currencies through spot, forward and option transactions as a market maker or position taker, including the unheeded positions arising from customer-driven foreign exchange transactions;

Holding foreign currency positions in the banking book (e.g. in the form of loans, bonds, deposits or cross-border investments); or

Engaging in derivative transactions that are denominated in foreign currency for trading or hedging purposes.

Bank has formulated a Foreign Exchange Risk Management Manual as per the guidelines given by Bangladesh Bank to measure, monitor and control different foreign exchange risks. Apart from this manual, Bank also applies other standard tools to minimize foreign exchange risks, some of which are given below:

Maintaining Net Open Position (NOP) within the limit set by Bangladesh Bank.

Setting counterparty limit which includes forward, placement, SWAP limits for foreign exchange transactions.

Setting limits for the foreign exchange dealers (intraday open position limit, stop loss limit, per deal limit, trigger limit).

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Reconciling Nostro accounts periodically as per the instruction of Bangladesh Bank.

Calculating VaR (Value at Risk) to measure the highest possible loss of holding of foreign currency.

4. Internal Control and Compliance Risk Management

The risk of Internal Control and Compliance is one of the Core Risks in Banking Industry. In today’s environment, it is commonly agreed that a bank requires a strong and effective system of internal controls, if the bank’s authority desires to be operated safely and soundly. Failure of understanding and managing the risks of Internal Control and Compliance may greatly increase the possibility that some risks will go unrecognized and uncontrolled.

The management of Southeast Bank has put in place an effective system of internal control in line with standard guidelines and Bangladesh Bank Guidance Notes on Internal Control and Compliance in order to keep the Bank on course towards profitability goals, achievement of its mission and improvement of the performance and to minimize surprises along the way. The management has also established sophisticated organizational structure to exercise strong culture within the Bank by implementing policy guidelines of internal controls appropriately and strengthening internal controls system.

Internal control and Compliance Division (ICCD) of Southeast Bank has 03 units named Audit and Inspection Unit, Monitoring Unit and Compliance Unit.

a) Audit and Inspection Unit conducts internal inspections (comprehensive/surprise) on all the Branches and Divisions of our Bank to identify lapses/ irregularities therein and to rectify those in an effective way.

b) Monitoring Unit ensures effective implementation of control functions. Off-site monitoring under Monitoring Unit is done on the operational activities of the Branches from Head Office. If any unusual transaction or activity is identified/observed by Off-Site Supervision Team, respective branch is informed to take immediate corrective action.

c) Compliance Unit is responsible for ensuring that the Bank remains fully compliant with the regulation prescribed by the regulatory authority.

During the year 2016, inspection teams of ICCD conducted comprehensive and surprise inspection of 103 branches and 08 divisions. Besides, Foreign Exchange operations of all the AD branches had been inspected by the inspection team. ICT inspection team inspected 42 branches and 03 divisions of HO on ICT operation and policy compliance of SEBL to mitigate the ICT risk. A number of special inspections for investigation and inquiry were carried out

by the inspection team as per direction of the competent authority.

All the irregularities/lapses identified by the inspection team were aggregated in inspection report and those reports were sent to the respective branch/division for compliance. All the branches/divisions sent compliance report to the ICCD within the time frame. Major observations and summary of the report were discussed in the Audit Committee of the Board. Implementation of decision of the Committee is being monitored by ICCD.

5. Money Laundering Risk Management

Southeast Bank is constantly vigilant to money laundering prevention and combating the financing of terrorism to mitigate reputational, legal and regulatory risks. In this respect, it exercises zero tolerance.

The Bank has put the following tasks in place for mitigating the risk of money laundering, terrorist financing and proliferation financing at home and abroad:

Maintaining an enterprise-wide Anti- Money-Laundering and Anti-Terrorist Financing Policy.

Compiling with applicable Anti-Money Laundering & Terrorist Financing laws and regulations as made by Bangladesh Financial Intelligence Unit.

Reporting all identified suspicious transactions/activities to the extent that it can do so under all applicable foreign and domestic laws.

Monitoring banking functions of the branches and concerned divisions in respect of compliance of related laws and regulations of regulators.

Retaining all customer related documents for a period specified by Bangladesh Bank.

Training staffs on AML and CFT requirements and maintaining the records.

Doing Enhanced Due Diligence (EDD) for high risk customers.

Conducting awareness building program on AML and CFT requirements round the year.

6. Information and Communication Technology Risk Management

The adoption of technology in the Banking industry is growing faster and a variety of delivery and payment channels for electronic banking are being offered to the customers. However, information technology based banking products and services invite more internal and external vulnerabilities and risks. Therefore, it is necessary for the Bank to ensure that the risks are properly identified


and mitigated through a prudent ICT risk management strategy.

The Bank took a number of steps to protect its core business operation and other delivery channels from ICT related risk. These are mainly:

Upgradation of Core Banking Software (CBS);

Deployment of new Debit Switch and Debit Card Management System;

Introduction of chip based credit card (Visa and Master);

Reviewing of ICT Security and Risk Management Policy to cope with the evolving changes in the ICT environment;

Performance of the internal vulnerability assessment (VA); and

Periodic ICT Audit and inspection (internal and external) in different Divisions and Branches.

The Bank took considerable measures from time to time to mitigate identified vulnerabilities and risks. The Bank is gradually implementing various ICT related security solutions to ensure further security of the threat factors (like: Network, Mail, Web/Internet, ATM and SWIFT Operation etc.). As the ICT risk management is an ongoing process, the Bank is constantly assessing risk by analyzing threats and vulnerabilities within its risk management framework and taking appropriate actions to mitigate and maintain an acceptable level of risk. 7. Environmental Risk Management

Southeast Bank recognizes that balancing non-financial factors such as environmental and social issues with financial priorities is an essential part of good corporate citizenship, in addition to being fundamental to risk management and the protection of investors. We have a direct impact on the environment through our daily consumption of energy and paper/ink resources. Our actions have potential indirect effect on the environment through the provision of financial services to projects located at environmentally sensitive areas. We recognize that the policies and practices we adopt today will shape not only our lives but also those of future generations. We therefore have an opportunity to make a positive contribution to environmental and social concerns by enacting appropriate policies so that our business operations do not degrade the environment or cause social harm. Such policies not only indicate positive

environmental responsibility but also present business opportunities such as innovative financial products and investments in sustainable forestry and renewable energy. This will help us better manage our risks, develop expertise, and provide clients with solutions to evolving exposures.

To keep its commitment, Southeast Bank has adopted a comprehensive environmental policy. The policy will be implemented with an Environmental Management System that includes planning, training, implementation, measurement, reporting and review, and will apply to new business and existing business that comes up for renewal or extension. Specifically, we will integrate environmental and social awareness into the credit analysis and financing decision process and incorporate it, where appropriate, as part of our due diligence review. We will train relevant employees to take responsibility for and implementation of these policies.

According to the policy

SEBL defines the term “environment” to include both ecological (such as physical and biological) aspects and related social aspects (such as worker protection and community issues).

SEBL recognizes that taking ecological and social aspects into account is part of good business and leads to sustainable development. The Bank believes that this approach enhances the client’s competitive advantage and that economic growth and a healthy environment go hand in hand.

SEBL prioritizes and actively seeks to finance projects with direct or indirect environmental benefits.

SEBL assesses the environmental aspects of all loan applications.

SEBL commits itself to act as a good corporate citizen and will continually pursue improvements in its operations and apply best practices in environmental management in its internal operations.

SEBL seeks business partners who share our vision and commitment to sustainable development. We are committed to work together with them to promote sound, coordinated and effective approaches to environmental issues.

At the end of 2016, Bank formed a new Sustainable Finance Unit as per Bangladesh Bank guideline. Terms of Reference of the Unit includes implementation of Environmental and social risk management policy.

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Bangladesh Bank vide its BRPD Circular No.18 dated December 21, 2014 implemented revised regulatory capital framework for banks in line with Basel III in Bangladesh with effect from January 01, 2015. Implementation process of this framework has started in January 2015 and will continue till December 2019. The new Basel III has incorporated strengthening capital framework, enhancing risk coverage, risk based capital requirement with leverage ratio, reducing procyclicality and promoting countercyclical buffers, addressing systemic risk and introducing global liquidity standard.

Under this framework, Bank has to maintain 2.5 percent additional capital buffer with the minimum capital requirement 10%. Besides, in order to avoid building-up excessive on-and off-balance sheet leverage, the Bank is required to maintain minimum 3 percent leverage ratio. Here, Leverage Ratio expresses total tier-I capital (after related deduction specified by BB) to total exposure i.e. on balance sheet and off- balance sheet exposure (after related deduction specified by BB) which is to be submitted to Bangladesh Bank on quarterly basis.

To ensure strong liquidity base, the Bank is also required to maintain two other liquidity ratios i.e. Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NFSR). The standard maintenance limit of these ratios is set as ≥100% and >100% respectively. LCR was introduced to ensure short-term resilience of Bank’s liquidity risk profile by ensuring that it has sufficient high quality liquid assets (HQLA) to survive an acute stress scenario lasting for one month. Whereas, NSFR was introduced to ensure resilience over a longer horizon (1 year) by creating additional incentives for the Bank to fund its activities with more stable sources of funding on an ongoing structural basis. The Bank prepares LCR and NSFR and submits to Bangladesh Bank on monthly and quarterly basis respectively.

The Pillar-II of Basel-III framework is the Supervisory Review Process (SRP). According to the key principles of SRP the Banks shall have a process for assessing overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital at an adequate level. SRP covers additional risks like Residual Risk, Concentration Risk, Liquidity Risk, Reputation Risk, Strategic Risk, Settlement Risk etc. The Bank assessed its additional capital requirement under Pillar-II and submitted the statements on Internal Capital Adequacy Assessment Process (ICAAP) to Bangladesh Bank for the year 2015. The Bank conducts stress testing on its financials on quarterly basis and

reports the outcomes to Bangladesh Bank, as a part of Pillar-II of Basel-III.

In a nutshell the purpose of this Disclosure Report is to set out how Southeast Bank Ltd. complies with the Pillar-III requirements under Basel-III. The following detailed qualitative and quantitative disclosures are prepared in accordance with guidelines on Risk Based Capital Adequacy (Basel-III) framework by Bangladesh Bank on December 2014. These disclosures are purported to affirm the information on Minimum Capital Requirement (MCR) under Pillar-I and Supervisory Review Process (SRP) under Pillar-II and ensure transparency about the capital adequacy framework, risk assessment and mitigation methodologies, risk exposure in various spectrum so that the stakeholders of the industry can examine the risk related compliance of the Bank.

A) SCOPE OF APPLICATION

Qualitative Disclosures

a) The name of the top corporate entity to which this framework applies: Southeast Bank Limited.

b) The quantitative disclosures are made on the basis of consolidated audited financial statements of the Bank and its Subsidiaries as at and for the year ended December 31, 2016 prepared under relevant International Accounting and Financial Reporting Standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) and related circulars/instructions issued by Bangladesh Bank from time to time. In preparing consolidated financial statements, the Bank and its subsidiaries’ financial statements are combined on a line by line basis by adding together like items of assets, liabilities, equity, income and expenses. However all intra group balances, transactions, profits and losses are eliminated in full.

c) Southeast Bank Limited has four subsidiaries and the descriptions are given below.

Southeast Bank Capital Services Limited

Date of Incorporation: September 23, 2010

Date of Commencement: September 23, 2010

Authorized Capital : BDT.6,000 million

Paid up Capital : BDT.5,500 million

Ownership Interest in Capital : BDT.5,489.93 million (99.82%)

Disclosure on Risk Based Capital Adequacy (Basel III)


Southeast Financial Services (UK) Limited

Date of Incorporation: February 22, 2011

Date of Commencement: September 26, 2011

Paid up Capital : BDT 38.49 million

Ownership Interest in Capital : 100.00%

Southeast Financial Services (Australia) Pty Limited

Date of Incorporation: March 18, 2013

Date of Commencement: March 18, 2013

Capital : BDT 25.06 million


Southeast Exchange Company (South Africa) Pty Limited

Date of Incorporation: December 15, 2014

Date of Commencement: December 15, 2014

Capital : BDT 50.10 million


The BRPD circular 02 dated 16 January 2014 regarding ‘Single Borrower Exposure Limit’ is being applied by the Bank in determining maximum amount of finance to the subsidiaries of the Bank. As on year end 2016, the Bank had a credit line to Southeast Capital Services Ltd of BDT 2863.90 million.

Quantitative Disclosures

d) Southeast Bank Ltd has four subsidiaries: Southeast Bank Capital Services Limited, Southeast Financial Services (UK) Limited, Southeast Financial Services (Australia) Pty Limited and Southeast Exchange Company (SouthAfrica) Pty Limited. Assets and liabilities of these subsidiaries are consolidated with the financials of the parent company. There is no capital deficiency in the financial year 2016.

B) CAPITAL STRUCTURE


a) The regulatory capital under Basel-III is composed of (I) Tier-1 (Going-concern Capital) and (II) Tier-2 (Gone-concern Capital). From regulatory capital perspective, going-concern capital is the capital which can absorb losses without triggering bankruptcy of the Bank and gone-concern capital is the capital which will absorb losses only in a situation of liquidation of the Bank.

Tier-1 capital is composed of (a) Common Equity Tier 1 and (b) Additional Tier 1

Common Equity Tier 1 (CET1) capital consists of paid-

up capital, statutory reserve, general reserve, retained earnings, minority interest in subsidiaries etc.

Tier-2 capital is composed of general provision, subordinated debt, revaluation reserves etc.

Capital requirement rules

The Bank is required to maintain the following ratios on an ongoing basis:

i. Common Equity Tier 1 of at least 4.5% of the total RWA.

ii. Tier-1 capital will be at least 6.0% of the total RWA.

iii. Minimum CRAR of 10% of the total RWA.

iv. Additional Tier 1 capital can be admitted maximum up to 1.5% of the total RWA or 33.33% of CET1, whichever is higher.

v. Tier 2 capital can be admitted maximum up to 4.0% of the total RWA or 88.89% of CET1, whichever is higher.

vi. In addition to minimum CRAR, Capital Conservation Buffer (CCB) of 2.5% of the total RWA is being introduced which will be maintained in the form of CET1.

Following is the phase-in arrangement for the implementation of minimum capital requirements:

Particulars 2015 2016 2017 2018 2019

Minimum Common Equity Tier-1 Capital Ratio

4.5% 4.50% 4.50% 4.50% 4.50%

Capital Conservation Buffer

- 0.625% 1.25% 1.875% 2.50%

Minimum CET-1 plus Capital Conservation Buffer

4. 5% 5.125% 5.75% 6.375% 7.00%

Minimum T-1CapitalRatio

5.50% 5.50% 6.00% 6.00% 6.00%

Minimum Total Capital Ratio

10.00% 10.00% 10.00% 10.00% 10.00%

Minimum Total Capital plus Capital Conservation Buffer

10.00% 10.625% 11.25% 11.875% 12.50%

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Quantitative DisclosuresBDT in million

b) Regulatory Capital: Consolidated Solo

Tier-1 capital

1) Common Equity Tier-1 Capital (CET-1)

21,685.52 21,650.38

Fully Paid-up capital 9,169.50 9,169.50

Non- repayable share premium account

Statutory reserve 9,170.00 9,170.00

General reserve 247.65 247.65

Retained earnings 3,196.97 3,171.82

Dividend equalization Reserve

Minority interest in subsidiaries

10.00



108.60 108.60

2) Additional Tier-1 Capital (AT-1)

- -

3) Total Tier-1 capital (1+2)

21,685.52 21,650.38

Tier-2 capital

General provision(unclassified loans, SMA, off balance sheet)

3,569.50 3,569.50

Subordinated debt 7,400.00 7,400.00

Revaluation Reserves as on December 31, 2014 (50% of Fixed Assets and Securities & 10% of Equities)

2,335.43 2,335.43

All other preference shares



934.17 934.17

4) Total Tier-2 capital 12,370.76 12,370.76

c) Regulatory Adjustments


934.17 934.17


108.60 108.60

d) Total eligible capital (3+4)

34,056.28 34,021.14

C) CAPITAL ADEQUACY


a) The Bank is presently following Standardized Approach for assessing and mitigating Credit Risk, Standardized Rule Based Approach for quantifying Market Risk and Basic Indicator Approach for Operational Risk to calculate Minimum Capital Requirement (MCR) under pillar-I of Basel-III framework as per the guidelines of Bangladesh Bank.

Quantitative Disclosures BDT in million

Capital Adequacy Consolidated Solo

b)Capital requirement for Credit Risk

24,624.15 24,952.49

c)Capital requirement for Market Risk

1,500.50 1,068.73

d)Capital requirement for Operational Risk

1,915.58 1,904.58

e)

Minimum capital requirement(MCR)

28,040.23 27,925.80

Total capital maintained 34,056.28 34,021.14

Capital surplus over MCR

6,016.05 6,095.34

Capital to Risk Weighted Assets Ratio(CRAR)

12.15% 12.18%

CET-1 to RWA ratio 7.73% 7.75%

Tier-1 Capital to RWA ratio

7.73% 7.75%

Tier-2 Capital to RWA ratio

4.41% 4.43%

f )Capital Conservation Buffer (Required)

0.625% 0.625%

g)Available Capital under Pillar 2 Requirement

6,016.05

6,095.34

D) CREDIT RISK


a) Credit risk is the potential loss that may arise from a borrower’s failure to repay a loan or meet its obligation in accordance with agreed term.

Credit Approval

Bank’s credit risk management guideline has been prepared in line with Bangladesh Bank guidelines illustrating the approval process, delegation of authority and other credit related important issues. The approval process segregates relationship management/marketing from the approval authority. The approval authorities are delegated to different levels of management and Board.


Board of Directors of the Bank has the highest level of authority to approve any credit proposal and delegate such authority to the competent authority (EC, MD, DMD, Branch Manager). The Corporate Banking Division receives the proposals from the branches and thereafter scrutinizes, analyzes and processes in conformity with Credit Risk Management (CRM) guidelines of Bangladesh Bank and forward the memorandum embodying their recommendations to the CRM division for scrutiny and to ensure that all regulatory procedures/rules and regulations etc. are complied with. After exercising due diligence by CRM, they convey their observations to Corporate Banking/Islamic Banking/SME and Agri Credit Division for submitting the proposals to Head Office Credit Review Committee (HOCRC) and finally forward it to the competent authority for approval.

Credit Administration

The Bank accomplishes documentations and makes disbursements with utmost care to reduce the potential credit risk. The disbursement authority is given to the branches within approved limit after the completion of necessary documentation. Furthermore, the bank constantly monitors clients’ repayment behaviors, fulfillment of conditions given before disbursement and compliance of covenants in post disbursement period.

Credit Monitoring

The loan portfolio with classification status is reviewed periodically and brought to the notice of Board of Directors of the Bank and senior level management regarding down gradation, overdue, special mention account (SMA), classified and rescheduled portfolio along with early alert list for their information and guidance. The Branches are communicated through letters and circulars for implementation of efficient credit risk management in a proper manner including adherence to the Bank’s and Bangladesh Bank’s rules and regulations. They have also been advised to follow the guidelines of comprehensive recovery/collection procedures and systems to keep the sound wealth of credit portfolio of the bank.

Credit Assessment and Grading

Know Your Client (KYC) is the first step to analyze any credit proposal. Banker-Customer relationship is established through opening of CD/SB accounts of the customers. Proper introduction, photographs of the account holders/ signatories, passports etc., and all other required papers as per Bank’s policy are obtained during account opening. Physical verification of customer address is done prior to credit appraisal. At least three Cs, i.e., Character, Capital and Capacity of the customers are confirmed. Credit Appraisals include the details of amount and type of loan(s) proposed, purpose of loan (s), result of financial analysis, loan Structure (Tenor, Covenants, Repayment Schedule, Interest), security arrangements. The above are

minimum components to appraise a credit and there are other analyses depending on the nature of credit.

The bank follows the CRG manual of Bangladesh Bank circulated on December 11, 2005 through BRPD circular no. 18. Borrowers are assigned risk grades based on the qualitative and quantitative factors of their business. There are 08 grades based on the marks obtained in qualitative and quantitative factors. The grades and factors are:

GradingShort Name

marks Number

Superior SUP 85-100 1

Good GD 75-84 2

Acceptable ACCPT 65-74 3

Marginal/Watch list MG/WL 55-64 4

Special Mention SM 45-54 5

Substandard SS 35-44 6

Doubtful DF 25-34 7

Bad & Loss BL <25 8

Qualitative and Quantitative factors/principal risk components

Weight

Financial Risk 50%

Business/Industry Risk 18%

Management Risk 12%

Security Risk 10%

Relationship Risk 10%

Credit Risk Mitigation

Potential credit risks are mitigated by taking primary and collateral securities. There are other risk mitigants like netting agreements and other guarantees. The legal certainty and enforceability of the mitigants are verified by the professionals of the respected fields. Collateral types which are eligible for risk mitigation include cash, residential, commercial and industrial property, land and machinery; marketable securities etc. Collaterals are physically verified by the officials of the Branches and Head Office. At the same time, these are also valued by independent third party surveyor in accordance with the credit policy and procedures.

Past Due and Impaired Credit

A claim that has not been paid as of its due date is termed as past due claim. Payment may be for repayment/renewal/rescheduling or as an installment of a loan. For loan classification and maintenance of specific and general provision, Bank follows BRPD circular no-14 and 19 of 2012, 05 of 2013 and 16 of 2014 and as advised by Bangladesh Bank from time to time.

Risk managem

ent


Approaches followed for specific and general allowances:

Particulars

Short Term Agri

Credit

ConsumerFinancing

SMEF

Loans to

BHs/MBs/SDs

All otherCredit

Other than

HF, LPHF LP

Standard 2.5% 5% 2% 2% 0.25% 2% 1%

SMA - 5% 2% 2% 0.25% 2% 1%

SS 5% 20% 20% 20% 20% 20% 20%

DF 5% 50% 50% 50% 50% 50% 50%

B/L 100% 100% 100% 100% 100% 100% 100%

NB: CF=CONSUMER FINANCING, HF=HOUSING FINANCE, LP=LOANS FOR PROFESSIONALS TO SET UP BUSINESS, SMA=SPECIAL MENTION ACCOUNT, SS=SUBSTANDARD, DF=DOUBTFUL, B/L=BAD/LOSS, BHs/ MBs,/SDs= LOANS TO BROKERAGE HOUSES/MERCHANT BANKS/STOCK DEALERS.

Base for Provision

For the following types of eligible collaterals, provision is maintained at the stated rates mentioned above on the base for provision. Base for provision is calculated deducting interest suspense and the value of eligible collateral from outstanding classified loans.

i. Deposit with the same bank under lien against the loan

ii. Government bond/savings certificate under lien,

iii. Guarantee given by Government or Bangladesh Bank.

For all other eligible collaterals, the provision will be maintained at the stated rates mentioned above on the balance calculated as the greater of the following two amounts:

i. Outstanding balance of the classified loan less the amount of Interest Suspense and the value of eligible collateral; and

ii. 15% of the outstanding balance of the loan.

Eligible Collateral

The following collateral is included as eligible collateral in determining base for provision:

100% of deposit under lien against the loan

100% of the value of government bond/savings certificate under lien

100% of the value of guarantee given by Government or Bangladesh Bank

100% of the market value of gold or gold ornaments pledged with the bank.

50% of the market value of easily marketable commodities kept under control of the bank

Maximum 50% of the market value of land and building mortgaged with the bank

50% of the average market value for last 06 months or 50% of the face value, whichever is less, of the shares traded in stock exchange.

Subjective Judgment

Considering the nature and performance of a loan, the bank can also classify a particular loan on the basis of subjective judgment taking into consideration the factors such as uncertainty or doubt of repayment, continuous loss of capital, adverse situation, decrease of value of securities, legal suit etc. However, regardless of all rules and regulations the central bank can classify any loan on the basis of their subjective judgment and can instruct the bank to make additional provision on non-performing loans.


b) Total gross credit risk exposures broken down by major types of credit exposure:

Total gross credit risk exposures by major types: Bangladesh Bank guidelines on Basel III, stipulated to segregate bank’s asset portfolio into different categories, and the following table shows our gross exposure in each asset category.

BDT in million

Particulars Consolidated Solo

a Cash 17,835.45 17,831.24

bClaims on Bangladesh Government and Bangladesh Bank

54,299.80 54,299.80

c Claims on Banks & NBFIs 18,582.83 18,516.32

d Claims on Corporate 110,350.61 110,350.61

e Claims on SME 35,348.11 35,348.11

f Claims under Credit Risk Mitigation 9,505.23 9,505.23

g

Claims categorized as retail portfolio (excluding SME, Consumer finance and Staff loan ) up to 1 crore

686.42 686.42

h Consumer finance 1,411.62 1,411.62

i Claims fully secured by residential property 863.44 863.44

j Claims fully secured by commercial real estate 2,675.48 2,675.48

k

1. Past Due Claims that is past due for 60 days or more (Risk weights are to be assigned net of specific provision):



Where specific provisions are less than 20% of the outstanding amount of the past due claim

12,382.14

12,382.14

Where specific provisions are no less than 20% of the outstanding amount of the past due claim

1,358.47

1,358.47

Where specific provisions are more than 50% of the outstanding amount of the past due claim

535.62

535.62

2. Claims fully secured against residential property that are past due for more than 60 days and/or impaired specific provision held there-against is less than 20% of outstanding amount

45.86

45.86

3. Loans and claims fully secured against residential property that are past due for more than 60 days and/or impaired and specific provision held there-against is no less than 20% of outstanding amount

1.10

1.10

l Capital Market Exposure 2,500.64 0.01

m

Investment in equity and other regulatory capital instruments issued by other banks and Merchant Banks/Brokerage Houses/Exchange Houses which are not listed in the Stock Exchanges (other than those deducted from capital) held in banking book

1,261.49 6,779.52

nInvestments in premises, plant and equipment and all other fixed assets

8,947.16 8,613.69

o Claims on all fixed assets under operating lease

p All other assets

i) Claims on GoB & BB 1,297.88 1,297.88

ii) Staff loan 207.62 207.62

iv) Claims on Offshore Banking Unit - -

v) Others 1,803.73 1,662.15

Total 281,900.72 284,372.34

c) Geographical distribution of exposuresBDT in million

Region Based

Dhaka 138,473.58

Chittagong 37,770.74

Rajshahi 4,397.76

Sylhet 4,874.44

Khulna 2,264.04

Rangpur 901.46

Barisal 158.02

Mymensingh 524.91

Total 189,364.96

Country Based

Domestic 189,364.96

Overseas

d) Major Industry wise distribution of exposures (Industrial Loan)

BDT in million

Textile and Garments Industries including Spinning Industries

48,935.90

Food and allied Industries 6,149.35

Pharmaceutical Industries 747.70

Chemical, Fertilizer, etc. 78.41

Cement and Ceramic Industries 3,455.07

Service Industries 2,724.60

Other Industries 21,148.18

Total 83,239.21

e) Residual contractual maturity breakdown of the whole portfolio

BDT in million

On demand 43,794.11

Less than three months 24,803.47

More than three months but less than one year

50,941.23

More than one year but less than five years

47,341.37

More than five years 22,484.78

Total 189,364.96

Risk managem

ent


f) Major Industry type amount of impaired loansBDT in million

Agriculture 6.80

Large and Medium Scale Industries 2,001.10

Small and Cottage Industry 262.60

Exports 116.10

Commercial Lending 3,362.30

Finance to NBFIs 0.00

Real Estate 1,503.90

Retail Banking 33.00

Transport & Communication 270.90

Credit Card 63.20

Others 1,638.00

Total 9,257.79

g) Gross Non Performing Assets (NPAs)BDT in million

Gross Non Performing Assets (NPAs)

Nonperforming assets to outstanding loans and advances

4.89%

Movement of Non Performing Assets (NPAs):

Opening balance 7,193.80

Additions 7,226.90

Reductions 5,162.90

Closing balance 9,257.79

Movement of specific provisions for NPAs:

Opening balance 2,323.30

Provision made during the period 2,433.70

Write off 1,028.70

Write back of excess provisions -

Closing balance 3,728.30

E) EQUITIES: DISCLOSURES FOR BANKING BOOK POSITIONS


a) Banking book positions consist of those assets which are bought for holding until they mature. The bank treats unquoted equities as banking book assets. Unquoted equities are not traded in the bourses or in the secondary market, they are shown in the balance sheet at cost price and no revaluation reserve is created against these equities.


b) Values of investments as disclosed in the Balance Sheet:

BDT in million

Consolidated Solo

Cost Price

Market Price

Cost Price

Market Price

Unquoted Share

61.49 61.49 61.49 61.49

Quoted Share

6,170.34 5,138.13 3,893.72 2,979.31

c) For Banking Book EquityBDT in million

Consolidated Solo

The cumulative realized gains (losses) arising from sales and liquidations in the reporting period

- -

d) For Banking Book Equity

Consolidated Solo

Total unrealized gains(losses)

- -

Total latent revaluation gains (losses)

- -

Any amounts of the above included in Tier 2 capital

- -

e)BDT in million

ParticularsCapital

Requirement

Unquoted Share 7.69 7.69

Quoted Share 1,027.63 595.86

As equities do not have any maturity, we have calculated risk weighted assets for unquoted equities on the basis of fixed risk weight which is 125% of investment value. And for quoted share capital charge is 10% for both specific and market risks.

F) INTEREST RATE RISK IN THE BANKING BOOK (IRRBB)


Interest rate risk affects the bank’s financial condition due to adverse movements in interest rates of interest sensitive assets. Changes in interest rates have two types of impact:

i. Earnings perspective: It affects a bank’s earnings by changing its net interest income and the level of other interest sensitive income and operating expenses.


ii. Economic value perspective: The economic value of future cash flows changes when interest rate changes.

At present SEBL is following the Bangladesh Bank prescribed format for assessing the economic value due to interest rate shock.


i. Earnings perspective:

Here, we have used maturity gap method to measure changes in earnings due to changes in interest rates

BDT in million

Up to 12 Month

(Cumulative Gap)

Percentage changes ininterest rate

Net interest income

andre-pricing

impact

(24,038.42)

1% increase in interest rate

(240.38)

1% decrease in interest rate

240.38


(480.76)


480.76


(721.14)


721.14

G) MARKET RISK


View of the Board of Directors on trading/investment activities

Market risk arises due to changes in the market variables such as interest rates, foreign currency exchange rates, equity prices and commodity prices. The financial instruments that are held with trading intent or to hedge against various risks, are purchased to make profit from spreads between the bid and ask price are subject to market risk. SEBL is exposed to market risk mostly stemming from Government Treasury Bills and Bonds, Shares of listed Public Limited Companies, foreign currency etc.

Methods used to measure Market Risk

There are several methods used to measure market risk and the bank uses those methods which are deemed fit for a particular scenario. For measuring interest risk from

earnings perspective, the bank uses Maturity Gap analysis, Duration Gap analysis, Sensitivity Analysis and marked to market method and for measuring foreign exchange risk, the bank uses VaR analysis.

We use standardized (Rule Based) method for calculating capital charge against market risks for minimum capital requirement of the Bank under Basel-III.

Market Risk Management System

The Bank has its own Market Risk Management System which includes Asset Liability Risk Management (ALM) and Foreign Exchange Risk Management under the core risk management guidelines.

Asset Liability Management (ALM): The ALM policy specifically deals with liquidity risk management and interest rate risk management framework.

Foreign Exchange Risk Management: Foreign exchange risk arises when the bank is involved in foreign currency transactions. These include foreign currency exchange, placement, investments, loans, borrowings and different contractual agreements. We use different hedging techniques to mitigate foreign exchange risks.

Policies and processes for mitigating market risk are mentioned below:

Risk Management and reporting is based on parameters such as Maturity Gap Analysis, Duration Gap Analysis, VaR etc, in line with the global best practices.

Risk Profiles are analyzed and mitigating strategies/ processes are suggested by the Asset Liability Committee (ALCO).

Foreign Exchange Net Open Position (NOP) limits (Day limit / Overnight limit), deal-wise trigger limits, Stop-loss limit, Profit / Loss in respect of cross currency trading are properly monitored and exception reporting is regularly carried out.

Holding of equities is monitored regularly so that investment remains within the limit as set by Bangladesh Bank.

Asset Liability Management Committee (ALCO) analyzes market and determines strategies to attain business goals.

Reconciliation of foreign currency transactions

Risk managem

ent



The capital requirements for: BDT in million


Interest rate risk 430.47 430.47

Equity position risk 1,027.63 595.86

Foreign exchange risk 42.40 42.40

Commodity risk - -

Total 1500.50 1068.73

H) OPERATIONAL RISK


Views of the Board of Directors on system to reduce Operational Risk

Operational risk is the risk which may arise directly or indirectly due to failure or breakdown of system, people and process. This definition includes legal risk, but excludes strategic and reputation risk. The bank manages these risks through a control based environment in which processes are documented, authorization is independent and transactions are reconciled and monitored. This is supported by a periodic process conducted by ICCD, and monitoring external operational risk events, which ensure that the bank stays in line with the international best practices.

Performance Gap of Executives and Staffs

The bank believes that training and knowledge sharing is the best way to reduce knowledge gap. Therefore, it arranges trainings on a regular basis for its employees to develop their expertise. The bank offers competitive pay package to its employees based on performance and merit. It always tries to develop a culture where all employees can apply his/her talent and knowledge to work for the organization with high ethical standards in order to add more value to the company and for the economy.

Policies and processes for mitigating operational risk

The Bank has adopted policies which deal with managing different Operational Risk. Bank strongly follows KYC norms for its customer dealings and other banking operations. The Internal Control and Compliance Division of the Bank,

the inspection teams of Bangladesh Bank and External Auditors conduct inspection of different branches and divisions at Head Office of the Bank and submit reports presenting the findings of the inspections. Necessary control measures and corrective actions have been taken on the suggestions or observations made in these reports.

Approach for calculating capital charge for operational risk

The Bank has adopted Basic Indicator Approach (BIA) to compute capital charge against operational risk under Basel-III as per Bangladesh Bank Guidelines.


BDT in million


The capital requirements for operational risk

1,915.58 1,904.58

Calculation of Capital Charge for Operational Risk (Consolidated)

Basic Indicator Approach

YearGross

Income (GI)

Average GI

15% of Average

GI

December, 2014 12,670.92

12,770.56 1,915.58December, 2015 12,071.43

December, 2016 13,569.32

Total GI 38,311.67

I) LIQUIDITY RATIO


Views of the Board of Directors on system to reduce Liquidity Risk

Southeast Bank Limited has proficient Board of Directors that has always been giving utmost importance to minimizing the liquidity risk of the bank. In order to reduce liquidity risk strict maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Reserve (SLR) is also being emphasized on a regular basis. Apart from these as part of Basel-III requirement Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) are also maintained under the guidance of our honorable Board of Directors.


Methods used to measure Liquidity Risk

In order to measure liquidity risk various methods are being used which are as follows:

GAP analysis is being done regularly that deals with the mismatch of assets and liabilities in different time buckets like 0-30 days, 31-90 days, 91-180 days, 181-270 days, 271-365 days and beyond 1 year. In our monthly ALCO paper, we show this GAP analysis based on which different strategic decisions are taken in order to reduce liquidity risk that may arise due to the mismatch between assets and liabilities.

Cash flow forecasting is another technique to measure liquidity risk that may arise due to future cash flow mismatch. In our monthly ALCO paper we show this cash flow forecasting.

Liquidity Risk Management system

As part of liquidity risk management system, we have Board approved liquidity contingency plan. In this liquidity contingency plan, we have incorporated all the strategic decisions to tackle any sort of liquidity crisis. As per the Bangladesh Bank ALM guideline, this liquidity contingency plan is reviewed annually which is approved by the Board of Directors.

Policies and processes for mitigating Liquidity risk

We have Board approved policies named “Medium to Long Term Liquidity Management Policy (LMP)” for mitigating liquidity risk. This policy is reviewed annually and placed before the Board of Directors for their kind approval.


Liquidity Coverage Ratio (LCR) 118.50%

Net Stable Funding Ratio (NSFR) 109.53%

Stock of High quality liquid assets 72,491.18

Total net cash outflows over the next 30 calendar days

61,174.85

Available amount of stable funding 239,231.80

Required amount of stable funding 218,417.32

J) LEVERAGE RATIO


Views of the Board of Directors on system to reduce excessive leverage

Leverage is an inherent and essential part of modern banking business. In other words, banks are highly leveraged organizations which facilitate leverage for others. Leverage, in simple terms, is the extent to which a bank funds its assets with borrowings rather than capital. More debt relative to capital means a higher level of leverage.

Banks have a range of financial incentives to operate with high leverage. But it creates risk when it crosses a certain point. Therefore, the Board views that sound prudential controls are needed to ensure that the organization maintains a balance between its debt and equity. The Board also believes that the bank should maintain its leverage ratio on and above the regulatory requirements which will eventually increase the public confidence in the organization.

Policies and processes for managing excessive on and off-balance sheet leverage

The leverage ratio is a non ¬risk based approach to the measurement of leverage. The ratio acts as a ‘backstop’ against the risk-based capital requirements and is also designed to constrain excess leverage. There are three types of leverage: balance sheet, economic, and embedded. Under Basel III, the Bank has to maintain a leverage ratio in excess of 3% of its exposures. The leverage ratio is intended to achieve the following objectives:

a) Constrain the build-up of leverage in the bank

b) Reinforce the risk based requirements with an easy to understand and a non-risk based measure.

To manage excessive leverage, the Bank follows all regulatory requirements for capital, liquidity, commitment, Advance Deposit Ratio (ADR), Maximum Cumulative Outflow (MCO), large exposures as well as risk management which are eventually reinforcing standards set by Bangladesh Bank. The aim is to ensure that the high leverage inherent in banking business models is carefully and prudently managed.

Approach for calculating exposure

Leverage ratio reflects the Bank’s tier 1 capital (the numerator) over total exposure (the denominator), which includes its balance sheet exposures and certain off-balance sheet exposures.

The capital measure for the leverage ratio is based on the Tier 1 capital. The exposure measure for the leverage ratio follows the accounting measure of exposure. In order to measure the exposure consistently with financial accounts, the followings are applied by the bank:

1. On balance sheet, non-derivative exposures will be net of specific provisions and valuation adjustments

2. Physical or financial collateral, guarantee or credit risk mitigation purchased is not considered to reduce on-balance sheet exposure.

3. Netting of loans and deposits is not considered.

Off-balance sheet (OBS) items are calculated by applying a uniform 100% credit conversion factor (CCF). For any commitments that are unconditionally cancellable at any time by the bank without prior notice, a CCF of 10% is applied.

Risk managem

ent




Leverage Ratio 6.14% 6.13%

On balance sheet exposure

288,083.49 288,205.42

Off balance sheet exposure

65,343.13 65,343.13

Total exposure 353,318.01 353,439.95

K) REMUNERATION

Qualitative Disclosure

a. Information relating to the bodies that oversee remuneration:

The Human Resources Division of the Bank oversees the remuneration in line with its HR policy under direct guidance of the Board of Directors of the Bank.

A committee comprising of few members of senior Management (Additional Managing Director and Deputy Managing Directors) led by the Managing Director is responsible for formulating remuneration policy. The Head of Human Resources Division acts as the Member Secretary of the committee.

The remuneration committee is the main body for overseeing the Bank’s remuneration. The committee reviews the position of remuneration and recommend to the Board of Directors for approval taking into consideration present cost of living index, rate of inflation and the existing remuneration of peer banks.

The Bank does not have any external consultant in preparing and implementing the remuneration policy.

The Bank follows a non-discriminatory policy in respect of remuneration and benefits for Head quarter and regions. However, a foreign posting allowance in remuneration is in practice for employees who are posted outside Bangladesh.

b. Information relating to the design and structure of remuneration processes:

The motto of the remuneration policy is to attract and retain productive employees who can contribute substantially to the overall growth of the Bank. The remuneration policy is carefully designed and regularly updated to provide adequate incentives so that the employees are fully committed to do their best to achieve the operational goals of the Bank.

The committee reviewed the salary structure of a few grades in the year 2016 and the authority concerned approved upward revision of the pay packages of the employees of those grades as an incentive for posting better result.

The risk and compliance related employees are carrying out the activities independently in line with delegation of powers and job descriptions approved by appropriate authorities.

c. Description of the ways in which current and future risks are taken into account in the remuneration processes:

When implementing remuneration measures, the Bank considers business risk, financial and liquidity risk, compliance and reputational risk for each official.

Various types of measures are taken into account in determining these risks. The measures focus on the organizational goals set for operational areas. Asset quality (NPL ratio), cost-income ratio, net profit growth etc. are used for measuring the risks.

The performance of each employee is evaluated for a particular period especially annually against performance indicators set and agreed with the officials at the beginning of the year. Performance differs from employee to employee and this affects the remuneration package.

In the year 2016, there has been no material change that could create impact on the remuneration.

d. Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration:

The Bank has one set of Performance Appraisal Form (PAF) to evaluate the performance of all categories of officials of the bank. The PAF has 3 (Three) parts i.e. (i) Key Performance Indicators, (ii) Personal Attributes and (iii) Job Related Skills and Competencies. Key Performance Indicators (KPIs) are deposit, investment and profit target oriented.

Decisions about promotion, granting of annual increment and incentive bonus are linked to the performance of the employees against set Key Performance Indicators.

e. Description of the ways in which the bank seek to adjust remuneration to take account of longer-term performance:

The Bank does not seek to adjust remuneration to take account of longer-term performance.

f. Description of the different forms of variable remuneration that the bank utilizes and the rationale for using these different forms

The Bank pays variable remuneration such as, Technical Allowance for the officials of Information Technology Division, Alternative Delivery Channel (ADC) Unit, Surveillance Allowance for the Head/Supervisor, In-charges & Operators of Central Monitoring System (CMS) of Head Office and Charge Allowance for Heads of Branches. Those allowances are paid taking into account the special and technical nature of the job they perform.


Quantitative Disclosure

Number of meetings held by the main body overseeing remuneration during the financial year and remuneration paid to its matter

03 (three) meetings of remuneration committee were held and no remuneration was paid to the members

Number of employees having received a variable remuneration award during the financial year

212 employees received a variable remuneration in the year 2016

Number and total amount of guaranteed bonuses awarded during the financial year

2 (two) guaranteed bonuses were awarded and the total amount of bonus was Taka 139.34 Million

Number and total amount of sign on awards made during the financial year

No amount was paid as sign-on awards

Number and total amount of severance payments made during financial year

No payment was paid as severance

Total amount of outstanding deferred remuneration, split into cash, shares and share-linked instruments and other forms. Total amount of deferred remuneration paid out in the financial year

Not Applicable

Breakdown of amount of remuneration awards for the financial year to show:

fixed and variable. deferred and non-deferred. different forms used (cash, shares and share linked

instruments, other forms)

Particulars Amount(BDT in million)

Fixed 139.34 Total149.85Variable 10.51

Deferred 0

Non- deferred 149.85

Form used (cash) 149.85

Quantitative information about employee’s exposure to implicit (e.g. fluctuation in the value of shares or performance units) and explicit adjustments (e.g. clawbacks or similar reversals or downward revaluation of awards) of deferred remuneration and retained remuneration:

Not Applicable

Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit and/or implicit adjustments

Not Applicable

Total amount of reductions during the financial year due to ex post explicit adjustments

Not Applicable

Total amount of reductions during the financial year due to ex post implicit adjustments

Not Applicable

Southeast Bank Limited (SEBL) has its own portfolio investment in the listed shares. Despite the dull scenario in the capital market, SEBL has done fairly well due to its prudent managerial capacity and adopting right decision at the right time. Bank’s total exposure in the capital market was BDT 4,523.50 million (21.53 percent of total capital of the bank) as on December 31, 2016. The Bank’s loan exposure to Southeast Bank Capital Services Limited for BDT.2833.20 million was fully paid off by way of increase of Paid up Capital of the Subsidiary Company to BDT 5,500.00 million. It was approved by Bangladesh Bank by their Letter No. BRPD(R-1)717/2016-4328 dated 28 June, 2016. The total exposure of the Bank is within the prescribed exposure limit of 25 percent as per Bank Companies Act (Amendment) Act 2013. The capital market experienced downward trend in the year 2016 though in the last quarter of 2016 the market rebounded a bit. It is hoped that the market will improve further in 2017 and we will be able to gain more from the capital market investment in 2017 complying with all applicable rules and regulations of the regulatory authority.

Capital Market Exposure

Risk managem

ent


SustainabilityAppraisal andIntegratedReportingThe pressure of adversity is the most powerful sustainer of accountability


SustainabilityAppraisal andIntegratedReportingThe pressure of adversity is the most powerful sustainer of accountability

SUSTAINABILITY APPRAISAL AND INTEGRATED REPORTING

Sustainability Report - At A Glimpse 180Report on Corporate Social Responsibility 182Environment Related Initiatives 186Green Banking Initiatives – Environmental and Social Obligation 188Integrated Reporting 189

Report on Human Capital and HR Accounting 191

Contribution to National Economy 193Value Added Statement 194Economic Value Added Statement 195Market Value Added Statement 196Communication to Shareholders and Stakeholders 197


General Overview

Prosperity, environmental protection, and social justice are considered to be the core of every economy. Sustainable Banking creates long-term resilient and sustainable economic, social and environmental values. It also facilitates development of a responsible and inclusive strategy through transparent and efficient utilization of resources.

We believe sustainability must lie at the heart of business if it is to achieve the long-term success that allows it to contribute to the economic well-being of society. Our success as a Bank is linked intrinsically to the welfare of the society. To achieve this we align our business and sustainability strategies as closely as possible. We believe that sustainability and business go hand in hand.

Sustainability Report

This sustainability report articulates how we perceive and practice sustainability at SEBL, the way we incorporate sustainability into our business model, both in terms of business opportunities and risk management. Our strategy for sustainability is rooted into four steps:

Serving Customers

Sustainable development is achieved when people grow and fulfill their needs in harmony with the rest of the society and the planet. This implies respect for and protection of the environment, human rights, labor rights and business ethics. The customers are at the heart of everything we do. Our definition of sustainable

development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Our core purpose is to serve them as well as our communities. We provide trust and growth through serving customer, offering products and services, and carrying out other activities.

Client centricity is becoming firmly embedded in our culture. We always offer simple, transparent, and cost effective products and services which help our customers to choose the right product. We actively involve our clients in developing and improving our services. Every product and service is examined to see what value it adds for them and how it contributes to building lasting client relationships.

Currently, the Bank is offering different types of products and services according to our customer needs. As a result, our customer base is increasing day by day. Besides conventional and Islamic banking services, the Bank provides alternative delivery channels like ATM, internet banking, online banking and mobile banking (Telecash) etc.

Serving Society and Environment

We believe that a stable environment and a strong economy are correlated and precondition for progress of the country. We acknowledge our social responsibility well and align our business strategies with our culture. SEBL is working towards improving the energy efficiency of its operations and optimizing the use of resources. We are concentrating our efforts on reducing our energy consumption and waste generation. We track energy consumption and waste production at our branches and offices in order to make adjustments where possible.

The Bank strives to ensure that its operations are environment friendly. To promote green banking the bank has a policy which serves the following objectives:

Reducing paperwork, utilizing email to disseminate information, saving important information electronically instead of using paper, encouraging double-sided printing etc;

Reducing electricity consumption, using energy efficient electronic equipments, replacing normal bulbs with energy saving bulbs and turning off computers, lights, fans, air coolers during unoccupied times;

Introducing online banking that allows the customers to transfer funds and pay bills through the Internet;

Sustainability Report – At A Glimpse

Sustainability

Serving Customers

Serving Society& Environment

HumanResources

SupportingCommunities


Reducing giving loans to environmentally harmful projects;

Creating awareness amongst the stakeholders about environmental and socially responsible business practices;

Human Resources

The Bank considers its human resources as its prime assets and grooms them to excel in every sphere of life. By providing right technical and professional training, the Bank keeps its employees up to date with the latest technologies and changes so that they can effectively contribute to the Bank’s strategy of sustainable development.

The Bank has a safety policy to ensure sound health of the staff. This ties in nicely with our HR policy and our ambition to be the best place to work. To this end, we offer our employees a range of facilities to support their physical, mental, emotional and spiritual well-being. The Bank’s healthy, safe and good working conditions enhance job enjoyment and reduce the chance of illness, accidents, injuries and damage. The Bank rewards high performance and superior delivery, but equally gives emphasis on how those results are achieved.

Our Human Resource strategy is designed to attract, retain, and motivate the best people in many ways:

Provide a Positive Working Environment

Recognize, Reward and Reinforce the Right Behavior

Engage employees with the Bank and its purpose

Help our people develop continuously and create a Culture of Excellence in which employees are encouraged and enabled to develop their expertise and sharpen their skills.

Provide an extensive leadership development program which grooms managers to become inspiring leaders.

Sustainable Communities

The Bank is closely related with the communities where it runs its business. It encourages and engages in programs that promote social and economic development focusing on health, sports and education. We always extend our hands towards disadvantaged and vulnerable groups of the society. We launched and contributed in different programs with the desire to generate more social impact through our activities. It enables us to more effectively steer the building of expertise and to help people in a more systematic way. Our focus is on sports, arts & culture, education, and entrepreneurship, and on identifying the links between them. We are participating in programs which make a distinctive contribution to our society.

Moreover, the Bank has created a trust in association with The Financial Express and Policy Research Institute as part of its Corporate Social Responsibility (CSR) to create awareness in green retention and green business.

Sustainability report


Our CSR activities follow transparent business practices that are based on ethical values, compliance with legal and regulatory requirement and respect for people, communities and the environment. We are responsible for the totality of our impact on people and the planet, beyond making profit. Our corporate social responsibility is about addressing the needs of all the stakeholders in a way that advances its business and makes a positive and meaningful contribution to the society.

Employees

The Bank offers its employees very competitive pay package and bonus that are reviewed on a continuous basis in line with the market dynamics. It provides the employees a safe and congenial work environment. It also offers its employees handsome retirement benefits by way of Contributory Provident Fund, Gratuity etc.

Customers

Focusing on the need of customers is fundamental to banking business. Southeast Bank discharges this vital responsibility by offering financial products and services that truly meet their needs. In discharging this vital responsibility, the Bank always strives to maintain the highest standard of ethics in the conduct of its business.

Shareholders

The Southeast bank is fully committed to protect the interest of its shareholders. It always endeavors to enhance shareholders’ value by optimizing financial performance at least cost.

The Bank’s Business Associates

The Bank continuously endeavors to create a long-lasting win-win relationship with its suppliers and business associates for mutual growth.

Environment

The Bank continuously strives to ensure that its operations are environment-friendly and discourages financing projects contrary to it. It has extended its helping hands to initiatives of community leaders for environment protection and development. It is one of the leading participants in the beautification of Dhaka city.

Regulators

Southeast Bank firmly believes that it is an imperative to comply with the relevant laws, rules and regulations of all regulatory authorities to be a responsible corporate citizen.

Community

a) We take into active consideration the impact of our activities on all groups of people involved and affected by our business operations.

b) Our credit policy has been redesigned to avoid concentration of Bank’s credit in major cities and to encourage distribution of credit in priority sectors particularly in Agriculture and SMEs.

c) In 2016, the Bank contributed BDT 27,119,394 to finance its scholarship program, green school project and the ‘SEBL-The Financial Express-Policy Research Institute’ Green Award Trust.

Green Award

Corporate citizenship to us means thinking long term and working to integrate social and environmental considerations into how we run our business. We want to inspire the individuals and organizations who are actively working to preserve environment. With that end in view, the Board of Directors of the Bank in its 395th meeting held on March 14, 2012 decided to give Green Awards to

Report on Corporate Social Responsibility


institutions and Women Entrepreneurs for really making significant contribution to the preservation of environment. The award was named, ‘Southeast Bank- The Financial Express – Policy Research Institute Green Award’. Accordingly, a Green Award Trust has been created comprising the following personalities as trustees:

Sl No Name Background Status

1. Mohammed Farashuddin, Ph.DChairperson, Board of Trustees, East West University, Former Governor, Bangladesh Bank

Chairman

2. Yussuf Abdullah Harun, FCAA renowned business personality and former president of the FBCCI

Member

3. Dr. Zaidi Sattar Chairman, Policy Research Institute Member

4. A.H.M. Moazzem Hossain Editor, The Financial Express Member

5. Saadat Husain, Ph.DPresident, Bangladesh Society for Training and Development and Former Cabinet Secretary, Govt. of Bangladesh

Member

6. Zakir Ahmed KhanAdvisor, Southeast Bank Limited, Former Secretary, Ministry of Finance, Govt. of Bangladesh

Member

7. M. Kamal HossainManaging Director (Current Charge), Southeast Bank Limited

Member

8. Professor Ainun Nishat, Ph.DProfessor Emeritus, Centre for Climate Change and Environmental Research, BRAC University

Member

9. Professor Shahnaz Huq HussainFormer Dean & Professor of Department of Geography and Environment, University of Dhaka

Member

10. Dr. Quazi Mesbahuddin AhmedIndependent Director, Southeast Bank Ltd., Former Managing Director, Palli Karma-Sahayak Foundation (PKSF)

Member

11. Md. Khursheed AlamManager, CSR & Administration, Southeast Bank Foundation

Member Secretary

The Green Awards were decided to be given in the following two categories: Category 1: Leadership in Sustainable Green Business and Operation Category 2: Leadership in Sustainable Community Development and Poverty Reduction.

A few CSR expenditures of the Bank in 2016 are given below

Sl. No. DateAmount in

BDTRecipient Organization/

IndividualsPurpose

1 18/01/2016 2,000,000Dhaka University Alumni Association (DUAA)

To sponsor "Hironmoyee Alumni Melobondho -2016" program.

2 27/01/2016 2,500,000Law and order coordination committee of Dhaka Metropolitan Police (DMP)

To contribute in the CCTV Surveillance project to ensure security

3 24/02/2016 3,360,000Seven Bereaved family members of BDR carnage

To support the bereaved families in their living

4 1/03/2016 500,000Society for the Welfare of Autistic Children

To sponsor a workshop on Autism to create awareness

5 8/03/2016 200,000Bangladesh Society of Neurosurgeons

For organizing "6th South Asian Neurosurgical Congress"



Sl. No. DateAmount in

BDTRecipient Organization/

IndividualsPurpose

6 26/04/2016 10,000,000Army Head Quarter, Adjutant General's Branch

For the construction of "Proyash School" for physically challenged children

7 29/03/2016 250,000Mr. Md. Shohel Rana, a damaged kidney patient

To help him in the medical treatment of his damaged kidneys

8 26/06/2016 15,000,000 Prime Minister's Relief FundFor carrying out the relief work for the poor and deprived people of the country

9 18/07/2016 200,000The Mayor of Chittagong city corporation

To procure rickshaw van and plastic bin to keep the environment neat and clean

10 27/07/2016 2,700,000Faculty of Business Studies, Dhaka University.

For installation of a lift in MBA Building

11 7/8/2016 7,500,000 Prime Minister's Relief FundFor carrying out relief work for flood affected people of the country

12 28/08/2016 500,000 Sammilito Nagorik SamajTo sponsor and contribute to their activity for social upliftment

13 5/9/2016 1,000,000 Ratanpur Jame MoshjidFor construction of the mosque in the village

14 23/10/2016 500,000Mr. Pear Ahmed, Assistant Teacher, Daiya BIBI Azimiya Islamia Madrasha

For medical treatment of cancer of his son

15 29/11/2016 2,462,872 Bhaluka Model Thana

For purchasing a Double Cabin Pick-up Van to support the law enforcement activity of Bhaluka Model Thana.

16 29/11/2016 6,540,000Department of Information Science and Library Management, University of Dhaka

For modernization of computer lab

17 15/12/2016 7,210,000Arts Faculty, Arts Building, University of Dhaka

For modernization of the building

18 15/12/2016 3,850,000Department of Information Science and Library Management, University of Dhaka

For modernization of the building

19 22/12/2016 17,420,000 For cold-hit peopleFor purchasing blankets to help them in the cold

20 6/12/2016 10,000,000 Prime Minister's Relief FundFor the distribution of winter clothes for cold-hit people of the country


With a view to discharging Corporate Social Responsibilities in a most organized way, Southeast Bank Foundation was founded by Southeast Bank Limited. Because of having effective and organized frameworks, it has succeeded in undertaking a number of CSR programs, such as, Scholarship for poor but meritorious students, English medium school etc.

The scholarship program of SEBF began its march in the year 2009. It is aimed at helping the promising and brilliant learners coming from poor families. The scholarship as launched had two dimensions: one for school level and the other for HSC level students. The program was further strengthened by covering scholarship at graduation level in 2011.

At the school level, the Foundation materializes its project with the sincere co-operation of SEBL branches. In the year 2015, the foundation took care of 52 students and out of them 32 will appear at the SSC examination of 2017.

For students of the higher secondary level, the news of scholarship initially comes into light through the advertisement in the widely read daily newspapers. In addition, it is also made available in the Bank’s web site. In 2014, the total recipients of scholarship at the HSC level was 206. In the session 2015-16, the Foundation received around 1600 applications for scholarship. After scrutiny and conducting viva voce, the Foundation eventually finalized a list of 200 candidates for the scholarship. Thus the total number of scholarship recipients stands at 400. In the year 2016 (session 2016-17), around 1000 scholarship seekers have sent their application to the Foundation. The scrutiny of the applications is under way.

The announcement of scholarship for the students of the Graduation level is also first published in the daily newspapers. It is also made available in the Bank’s website. In the academic session 2011-2012, scholarships were awarded to 75 applicants. In the academic session 2012-2013, as many as 75 students were nominated for scholarship. In the next session 2013-2014, total 60 students were selected for the purpose. Again for the session 2014-15, the Foundation managed to select yet another 60 candidates. Thus the number of recipients of scholarship at the graduation level in the reporting year stands at 270.

Southeast Bank Green School

Considering the predominating demand for quality education at the grooming stage of life, the Foundation initiated a school project for the kids of families with moderate income. To materialize this dream, the

Foundation has established an English medium school “Southeast Bank Green School” at Mohammadpur, one of the densely populated areas of Dhaka Metropolitan City. It comprises of two adjacent buildings centrally located in the midst of a number of Housing Societies.

On September 2013, the journey of the first session of the school began. The school offers classes for children aged 3 through kindergarten all the way up to 10th grade (O’ level) and follows edexcel British curriculum. The school is equipped with all available modern amenities and facilities. Currently, 19 teachers are putting their relentless effort to teach the students. As a part of the extra-curricular activities, the teachers and students celebrate all national- cultural events. With its ongoing performance, the school has succeeded in drawing keen interest among the dwellers of the area. We are very much optimistic that in no time, it will emerge as one of the leading schools in Dhaka city. Based on the experience of this school, the Foundation is contemplating to expand its branches in other locations of Dhaka city.

CSR expenditure under Southeast Bank Foundation for the year 2016

Education

Scholarship Project

Level Amount (Tk.)

School (class vi-x) 870,400

College level 8,826,500

University level 6,360,000

Total expenditure on Scholarship project

16,056,900

Southeast Bank Green School project 10,087,397

Total expenditure on education 26,144,297

Others Amount (Tk.)

Donation to Late Poet Samsur Rahman family

480,000

Total expenditure on others 480,000

Grand Total 26,624,297

In 2016, Southeast Bank spent total BDT 135.85 million as donations for education, sports, art, culture, promotion of national heritage, improvement of the condition of autistic children, promotion of women entrepreneurs, health-care, community development, relief operation, winter-clothes for the cold-hit poor people, etc.

Southeast Bank Foundation (SEBF)



Southeast Bank aims at facilitating to build a sustainable business that brings benefit to our stakeholders, society, environment and economy as a whole. Our existing Environmental Policy provides a framework for managing our environmental impacts, including climate change by establishing a set of commitments to deliver.

Highlights of ‘Sustainable Finance Activities’ of the Bank

In 2016 Bangladesh Bank instructed to form a “Sustainable Finance Unit” by abolishing existing Green Banking Unit. The new Unit consists of six (06) members under the supervision of Head of Credit Risk Management (CRM) Division.

As per the directives of Bangladesh Bank Southeast Bank adopted a policy namely “Guidelines on Environmental Risk Management (ERM)” on Social, Climate Change and Environmental Risk Management (SCERM) in 2011.

A separate policy guidelines for ‘Green Banking’ was adopted in 2011.

Green Finance activities of the Bank:

Environmental Activities 2014 2015 2016

Direct Green Finance

BDT.7.80 million

BDT.32.50 million

BDT.9.45 million

In-direct Green Finance

BDT.13400.00 million



Southeast Bank arranged several training programs and workshops on green banking and environmental risk management.

Environmental Risk has been incorporated in credit proposals and plays important role in decision making.

The Bank has introduced Green Awards to encourage individuals and organizations who are actively working to protect the environment and tackle the risks of climate change through green business, environment-friendly operations, community investment and knowledge management.

Enhancing online coverage for clients; for example: ATM, SMS Banking, Internet Banking, mobile Banking etc.

The Bank has adopted and implemented a green office guide named ‘Southeast Shobuj Jibon’ for the Bank. Salient features of this Green Office Guide are as follows:

‘Southeast Shobuj Jibon’ is an initiative that moves beyond our processes and our customers to cost efficient automated channels for building awareness and consciousness for environmental issues. The Bank will introduce a monthly news letter to distribute among the employees of the Bank to create green awareness which will provide attention to the following aspects:

Save Paper Save Trees (Every ton of paper involves 17 trees).

Maximum communication through e-mail

Purchase recycled paper.

Print on reusable sheets.

Print multiple pages on single sheets of paper.

Set defaults to print double-sided and print on both sides.

Print only the pages required.

Preview documents before printing.

Increase margin width of the documents.

Introduction of Biometric Attendance system.

Change the default font size from 12 point to 10 which would shrink your document by about 10%.

Use e-mail statements.

Using post-consumer waste recycled paper internally (copy and printer paper) and externally (brochures, etc.)

Shredding and recycling all paper internally

Sharing electronic files, voice mail and e-mail instead of paper memos

Both side printing (two-sided) when possible as well as limiting printed materials.

Environment Related Initiatives


Conserve Energy, Conserve Natural Resources

Plant or help plant more trees and preventing the cutting of the existing ones, contribute towards the making of a healthy planet at no extra cost.

Pay your bills online. For every 38,000 bills paid online, 5,058 pounds of greenhouse gases are avoided and two tons of trees are preserved.

Use Car pools to go to work. Avoiding 10 miles of driving every week would eliminate about 500 pounds of carbon dioxide emissions a year.

Drive responsibly. Every gallon of gas burned emits 20 pounds of carbon dioxide.

Use LED lights. Compact Fluorescents Lights produce the same amount of light as normal bulbs, but use about a quarter of the electricity and last ten times longer.

Unplug electronics. Cell phone chargers, TVs, DVD players, stereos, microwaves and other electronics with transformers continue to draw power, even when they’re off or not charging anything, as long as they’re plugged in.

Turn off the tap while brushing teeth and of course after use.

Always use a cloth bag. Do not use paper or plastic bags for your grocery.

Global Climate Partnership Fund SEBL takes pride for its partnership with a prominent Energy Fund named Global Climate Partnership Fund (GCPF) managed by RespoosAbility AG of Switzerland. In 2016, we could drawdown 2nd tranche of USD 5.00 million after successfully utilizing USD 5.00 million in the year 2015.

SEBL under a technical assistance of GCPF engaged Frankfurt School of Management and Finance (a renowned European Educational Institution) for capacity building in Energy Efficiency and Renewable energy financing.

Under Another technical assistance of the fund, world famous “Enclude” Advisory Group of Netherlands is helping the Bank develop a Social and Environmental Management Guideline that will be rolled out in 2017.



Green banking or Sustainable finance refers to any form of financial service integrating environmental, social and governance (ESG) criteria into the business or investment decisions for the lasting benefit of both clients and society at large.

Southeast Bank recognizes that balancing non-financial factors such as environmental and social issues with financial priorities is an essential part of good corporate citizenship, in addition to being fundamental to risk management and protecting investors.

We recognize that the policies and practices we adopt today will shape not only our lives but also those of future generations. We therefore have an opportunity to make a positive contribution to environmental and social concerns by enacting policies designed so that our business operations do not degrade the environment or cause social harm. Such policies not only indicate positive environmental responsibility, but also present business opportunities such as innovative financial products and investments in sustainable forestry and renewable energy. This will help us better manage our risks, develop expertise and provide clients with solutions to evolving exposures. To demonstrate our commitment, Southeast Bank has adopted a comprehensive environmental and social policy. The policy implemented with Social & Environmental Management System that includes planning, training, implementation, measurement, reporting and review and applies to new business and existing business that comes up for renewal or enhancements. Specifically, we integrate environmental and social awareness into the credit analysis and financing decision process and incorporate it, where appropriate, as part of our due diligence review. We train relevant employees to take responsibility for and implementation of these policies.

In this connection, various steps have been taken to minimize the bank’s direct operational impact to the

environment to reduce paper usage and help save trees and to reduce energy & water consumption. In 2016, southeast Bank developed a new Social and Environmental Risk management system in line with Bangladesh Bank’s draft guide line, IFC’s Performance Standard (PS) and Global Climate Partnership Fund Guidelines.

The Bank prioritizes and actively seeks projects with direct or indirect environmental benefits which will contribute in reducing pollution in the country.

Environmental Due Diligence Checklist is meticulously followed whicle financing new customers and extending credit facilities to existing customers. Environmental Risk Rating (EnvRR) is now mandatory for all individual customers (corporate, institutional, personal, small and medium enterprise) whose aggregate facilities are above the following financing thresholds:

For Small and Medium Enterprise-financing >BDT 2.5 million

For Corporate-Financing> BDT 10 million

For Real Estate-Financing> BDT 10 million

Comparative position of Environmental Risk Rating conducted by the Bank is as follows:

Environmental Activities 2014 2015 2016

Environmental Risk Rating

Around 600

projects/clients loan

proposal were rated.

Around 630 projects/

clients loan proposal

were rated.

Around 680 projects/

clients loan proposal

were rated.

Green Banking Initiatives-Environmental and Social Obligation


Southeast Bank Limited is always committed to implement the principles of integrated reporting. This Integrated Report provides information on how we create value, considering both qualitative and quantitative matters that may influence our stakeholders’ decision-making.

Our business operation is based on trust and competency. We do believe that the stakeholders are the supreme arbiters regarding the legitimacy and the sustainability of the entity. Hence, we are committed to leave no stone unturned for the assurance of our integrated thinking.

We believe that our approach represents a steady and considerable level of integrated thinking, which we continue to deepen as we execute our strategy within our organization. We recognize that embedding integrated thinking at every level of our organization forms part of our longer-term work to create a culture in which risk management, compliance, ethics and social responsibility are coordinated with the effective and innovative accomplishment of our clients’ needs. This comprehensive approach is reflected in our report this year.

Scope and Boundary of the Report

The Integrated Report covers the period from January 1 to December 31, 2016. The report covers all operational areas and businesses of Southeast Bank Limited and its subsidiaries. In the report, we have considered the reporting of both Financial and Nonfinancial issues as Non financial information including the strengths and weaknesses has material impacts on the decision making of the Stakeholders and sustainable growth of the Bank.

The report is intended to address the information requirements of long-term investors. We also present information relevant to other key stakeholders, including our staff, clients, regulators and communities etc.

We have prepared and presented financial statements and other reports in compliance with the requirements of

Banking Companies Act, 1991 (Amendment in 2013) Bangladesh Bank Regulations Companies Act 1994 Bangladesh Accounting Standards Bangladesh Financial Reporting Standards Financial Institutions Act 1993 Securities and Exchange Rules 1987 The Income Tax Ordinance, 1984 And other applicable laws and regulations of the

bank

Materiality

In the preparation of this Integrated Report, we have focused particularly on those issues, opportunities and

challenges that have material impact on Southeast Bank and its ability to be a sustainable business entity that consistently delivers value to its stakeholders.

Assurance Approach:

We have an assurance model comprising three lines of defenses to ensure the validity and authenticity of the information provided in the Annual Report. Our combined assurance model has three parts namely, Management Review, Internal Audit Assurance and External Audit Assurance.

We have engaged different external assurers and auditors to ensure the credibility of the report.

Financial Statements Audit Rahman Rahman Huq

Corporate Governance compliance Syful Shamsul Alam & Co.

TAX Consultant Akhter Abbas Khan & Co.

Legal Advisors The Legal Edge

Credit Rating Agency Credit Rating Information and Services Ltd. (CRISL)

We do believe that our capitals including Human, Financial, Intellectual, Natural, Manufactured, Social and Relationship Capital have significant impact on the integrated thinking and sustainable value creation of the bank. These capitals are interrelated with the value creation for the stakeholders and the society through a broad range of activities.

Key drivers that Create Value to our organization

1. Ensuring quality customer service to ensure customer satisfaction.

2. Maintaining high quality assets portfolio to achieve strong and sustainable returns.

3. Practicing efficient corporate governance and compliance processes through meeting all regulatory requirements and making disclosures.

4. Increasing client base for financial inclusion.

5. Strengthening technologies that reduce operational risks and promote implementation of best practices in the industry.

Integrated Reporting

Chart: Combined Assurance Model of information to Stakeholders

Management Review

Extternal Audit Assurance

Internal Audit Assurance

Assured and Reliable Information

to the Stakeholders



1. Lending & Investment

Lending to clients create assets that help us derive interest income ensuring our financial growth and strength of the bank.

Lending through Loan Products Strategic investments Emphasizing Small and Medium Enterprise Financing Long term Foreign Currency loan for corporate clients Agricultural and renewable energy financing

2. Funding

Funding allows the bank to collect deposits and loans from our valued customers and investors in various forms to facilitate the lending and business operation of the Bank.

Mobilizing Low Cost Deposit from retail client base Capital Accretions Arranging Funds from overseas sources for Offshore

Banking service Loans from Other Banks Central Bank Loans and Refinance

3. Accessibility to the market

With the accessibility to the market, our various business products and services work as instruments to explore markets and utilize resources with diverse investment options.

Explore New market through branch establishment Business And Product segmentation Direct Marketing

4. Employing efficient personnel

Our efficient workforce with proper planning of career development and performance appraisal work professionally for the accomplishment of the organizational goal.

Planned Work Schedule Proficient Recruitment and Selection Scrutinized Performance Appraisal State-of-the-Art Training and Development

5. Our Technological brilliance in Business Operation

Our brilliance in business operation is clinched through the Technological development to ensure the operational performance and security of the transactions.

Incessant Banking Service Efficient Electronic Fund Transfer System Competent Core Banking System (CBS) Mobile and Online Banking

6. Excellence in Client Service

Strengthening trust and partnerships with customers by focusing on the Bank’s core values of quality customer service, professionalism, teamwork and integrity.

Speedying Customer Service through customer need recognition

Design prominent product facilities Initiating customer oriented culture Strengthening trust and partnerships with customers Growing as our customers grow

7. Strong Corporate Governance and Resource Management

Strong Governance with Regulatory obligation and compliance enables the management to manage the resources with professional efficiency and accountability.

Meeting all regulatory requirements and disclosures Hiring professionals with strong background and

knowledge Effective Risk Management Efficient Internal Control and Regulatory Compliance

System

Value Creation Process


Human Resources Division (HRD) of Southeast Bank Limited is responsible to manage its human resources in an effective manner, develop their skills and knowledge and motivate them to give best efforts for the growth and development of the Bank.

HRD of the bank is committed to achieving excellence in acquiring, developing and retaining talented employees through formulation and implementation of appropriate recruitment policies, compensation and employee welfare package and promotion policies. The Bank has established a fully equipped training institute where many in-house training courses are offered to develop various banking knowledge as needed by the employees of the Bank. Employees are also sent for training in other training institutes at home and abroad for development of their skills and familiarizing them with the latest technological developments in the banking industry. Career counseling and guidance is an area where increasing attention is being given for creating required scope for career advancement of employees.

Human Capital – Capacity Building

Investments in skills development, accelerating employees’ professional and personal development are essential components of the Bank’s human resource. The Bank considers its employees as the most valuable assets. Southeast Bank is committed to strengthening the capacity of its employees and holding them accountable to thrive and achieve their full potential. The Bank spends considerable resources in building the capacities of its employees. Human Resources capacity building equips employees to achieve organizational goals and objectives.

Bank takes a holistic approach for leadership development which encompasses corporate culture, individual leadership capabilities and team work. The bank promotes the continuous professional and personal development of its employees. The bank develops short, medium and long term plans for recruitment of employees and make sure that new recruits are not only trained to do the job but also continue to grow and develop new skills in their job. This practice has contributed to substantial growth of productivity for organizational development.

In the year 2016, as part of capacity building of human resources, a total number of 215 officials of different grades were sent to various training programs/ workshops/ seminars at home and abroad. Out of total 215 officials, 111 officials were trained in Bangladesh Institute of Bank Management (BIBM), 42 officials in Bangladesh Bank Training Academy (BBTA) and 62 officials in other institutes at home and abroad.

Organizational Chart

The Bank has an organizational chart which outlines the roles, responsibilities and relationships amongst individuals within the Bank. The Organizational Chart of Southeast Bank Limited is revised from time to time to respond to emerging situations and challenges. It helps to determine the working relationship amongst employees, chain of command, work specialization, authority and span of control. The job descriptions of each and every employee are laid out in details and their Key Performance Indicators (KPIs) are determined on the basis of job descriptions. Their performance evaluation is done on the basis of achievements of their KPIs.

The Senior Management Team

The Bank has a Senior Management team consisting of Additional Managing Directors and Divisional Heads of Head Office. The team is headed by its Managing Director. The members of the team are academically and professionally highly qualified and vastly experienced in their respective fields. The team is supported by the Heads of Divisions. The members of the team are devoted to effective governance, protecting the interest of all stakeholders and promoting the long-term sustainability of the bank.

The senior management team is responsible for setting bank’s business strategy, prioritizing the allocation of bank’s overall resources, monitoring adherence to bank’s core principles and views, driving higher returns to stakeholders and ensuring good services to the customers. The team is also responsible to share their views with one other and provide suggestions from time to time to the Managing Director in making decisions for developing the strategic plan, diversifying the customer service, increasing quality asset and upholding the image of the Bank. The team monitors the performance of the Bank and makes decisions on the day to day operational activities of the bank. The team is accountable to the Managing Director and exercises their power within their delegated authority.

Human Resource Accounting (HRA)

Success and failure of an organization purely depends on its human resources. HRA is the managerial technique which helps the management to identify the cost for human resources. HRA of the bank measures the cost relating to recruitment, selection, compensation and training.

Report on Human Capital and HR Accounting



An overview of HRA for last five years (2012 to 2016) is given below(BDT in million)

Particulars 2012 2013 2014 2015 2016

Employee (Person) 2010 2118 2221 2376 2616

Operating cost per employee 1.13 1.27 1.49 1.51 1.60

Training cost per employee (excluding sub-staff ) 0.0015 0.00096 0.0016 0.0018 0.0027

Operating profit per employee 2.70 3.25 3.70 3.39 3.25

Salary cost as % of operating profit 18.04 18.22 16.29 17.40 20.25

Human Resource Position

The permanent officials of the Bank as on December 31, 2016 were 2089 out of which 229 were Executives (Assistant Vice President and above) and 1860 were Officers. In addition, 527 employees worked as Sub-Staff.

Human Resources by Age Group in the Year 2016

Age Group Total Percentage (%)

Below 30 435 16.63 %

30 – 39 1256 48.01 %

40 – 49 779 29.78 %

50 and above 146 5.58 %

Total 2616 100.00%

Creation of new employment opportunity

The HRD of the bank primarily focuses on HR planning, recruiting and staffing. The bank is constantly strengthening its work force. To create new employment opportunity, the Bank regularly recruits a good number of young, energetic and self-motivated fresh post-graduates from different disciplines of the renowned academic institutions. As per Bank’s strategic plans, a good number of new jobs will be created in the year 2017 for filling in existing vacancies and expansion of its business by opening a few new Branches.

In the year 2016, the Bank recruited a total number of 284 Employees (fresh entrants 217 and experienced bankers 67) to strengthen its team and sustain its fast development programs.

Recruitment status for last five years (2012 to 2016)

Apart from the above as part of social responsibility, in the year 2016, 601 numbers of students of different reputed universities of Bangladesh were given opportunity to complete their internship program in the Bank.

BDT in million

2012 2013 2014 20162015

207

35

172

113

35

78

177

30

147

197

62

135

284

67

217

FreshExperiencedTotal


Banking industry is said to be the nerve and vein of a modern economy. It plays a pivotal role for development of the economy of a country. In the last 5-years Bangladesh witnessed a GDP growth of around 6.50 percent and achieved 7.01 percent in 2016. It has been largely driven by its exports of readymade garments, remittances and the domestic agriculture sector. Southeast Bank Limited (SEBL) has been contributing to the growth of national economy by providing different services to the economy. SEBL has wide network of 128 branches located at strategic places of commercial and business importance all over the country. Through the countrywide network, it has invested BDT 247,491.40 million during the year 2016 in different areas including garments, textiles, pharmaceuticals, ICT, import of essential food items and capital machinery, working capital finance e.t.c and thus helped achieve the expected GDP growth of the country as well as generate employment opportunity for the people of the country. The role of Small and Medium Enterprises (SMEs) is indispensible for overall economic development of Bangladesh. During the year 2016 SEBL invested BDT 41,727.60 million in SME sector and BDT 3,241.60 million in agricultural sector of the country. SEBL is helping the economy by providing assistance in import and export business and thus facilitate economic activities of the country. The Bank also invested BDT.18,181.51 million in environment friendly projects i.e renewable energy, auto

brick kiln, bio-gas, solar home system, establishment of ETP, ensuring work environment and security for workers of textile and Garments Industry, green industry, fire & safety measures e.t.c. In 2016, import business of BDT 171,531.70 million and export business of BDT 146,606.10 million were transacted through SEBL. Remittances help in macroeconomic development process of our country as it provides significant sources of foreign currency, increases national income, finances imports and contributes to improve the balance of payment situation. During 2016, the Bank mobilized total inward remittances of BDT 64,665.80 million and the same was distributed to the beneficiaries through bank’s wide branch network across the country. In 2015-2016 fiscal year, SEBL deposited BDT 1,644.59 million to the government exchequer as corporate income tax. Also BDT 302.52 million and BDT 290.98 million were collected and deposited to the government exchequer as VAT and exercise duty. The Bank mobilized total deposits of BDT 229,973.43 million which contributed to the formation of country’s capital.

As ever, SEBL is committed to be an active partner for contributing to the ongoing economic development of the country and to attain the targeted GDP growth of over 8.00 percent in the near future by providing all sorts of financial services within the limits of its capacity.

Contribution to National Economy



The value added statement for the Bank shows how the value is created and distributed among different stakeholders of the Bank. Value added to the Bank stood at BDT 7352.70 million as of December 31, 2016 as against BDT 7,230.60 million in 2015.

BDT in million

Particulars 2016Taka % 2015

Taka %

Income from Banking Services:Interest and similar income on loan portfolios 16,972.33 17,794.80 Investment income 5,079.61 5,158.54 Commission, Exchange and Brokerage 2,903.03 2,759.46 Other Operating Income 662.60 547.93

25,617.57 26,260.73 Less: Cost of Services & SuppliesInterest paid on Deposits & Borrowings 12,765.12 14,656.34 Rent, Taxes, Insurance, Lighting etc. 801.04 658.26 Legal expenses 0.60 1.49 Postage, Stamp, Telegram & Telephone 166.45 147.33 Stationery, Printing, Advertisement 132.23 112.62 Directors' Fees and Expenses 2.91 2.65 Audit Fee 1.60 1.04 Repairs to Bank's property 94.93 59.20 Other expenses 1,087.36 874.41

15,052.24 16,513.34 Value Added by the Banking Services 10,565.33 9,747.39 Add: Non-banking income - -Less: Provision for loans and advances/investmentsSpecific provision on loan loss (2,360.99) (2,039.77)Transfer to general provision (890.00) (205.28)Provision for Off-Balance Sheet Exposures (249.50) 19.65 Provision for diminution in value of Investment 403.60 (269.48)Provision for Other Assets (115.74) (21.91)

(3,212.62) (2,516.79)Value Added 7,352.70 7,230.60

Distribution of Value AdditionEmployees-as Salaries and Allowances 1,753.44 23.85% 1,433.13 19.82%Transfer to SEBL Foundation 300.00 4.08% 300.00 4.15%Provider of Capital - as dividend 1,833.90 24.94% 1375.43 19.02%Government - as income tax 2,855.52 38.84% 2,448.07 33.86%Expansion & Growth: Statutory Reserve 272.69 3.71% 1104.50 15.28% Retained Earnings 28.48 0.39% 289.49 4.00% Depreciation 308.67 4.20% 279.98 3.87%

7,352.70 100% 7,230.60 100%

Value Added Statement

To employees as salaries andallowancesTo SEBL FoundationTo Shareholders as dividendTo Government as income tax

Retained EarningsDepreciation

Statutory Reserve

Wealth Distribution of 2016

4%

24%

25%39%

4%

0.4% 4%

Percentage PercentageWealth Distribution of 2015

20%

4%

4%

19%34%

15%4%


Economic Value Added (EVA) indicates the true economic profit of a company. EVA is an estimate of the amount by which earnings exceed or fall short of required minimum return for shareholders at comparable risks. EVA of the bank stood at BDT 1383.86 Million as of December 31, 2016 as against BDT 3,559.17 million in 2015.

Economic Value AddedBDT in million

Particulars 2016Taka

2015Taka

Total Revenue 25,617.57 26,260.72

Less: Expenses (Interest & Operating) (17,114.35) (18,226.45)

Less: Corporate Tax (2,855.52) (2,448.07)

Less: Capital Charges (4,263.85) (2,027.03)

Economic Value Added 1,383.86 3,559.17

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

Required Rate of Return (12.52%) = Weighted average rate of 10 years treasury bond @ 10.52% +Risk Premium @ 2% in 2016

(Weighted average rate of 10 years treasury bond @ 5.11% +Risk Premium @ 2% in 2015)

Total Capital & Reserves = BDT 34,056.28 million in 2016 (BDT 28,509.53 million in 2015)

Economic Value Added = Total Revenue - (Expenses + Corporate Tax + Capital Charges)

Economic Value Added Statement

878.72 936.23 2012.92 3561.16 1383.86

2012 2013 2014 20162015

BDT in million



Market Value Added (MVA) is the difference between the equity market value of a company and the book value of equity invested in the company. A high MVA indicates that the company has created substantial wealth for the shareholders. MVA is equivalent to the present value of all future expected Economic Value Added (EVA). The equity market value of the Bank stood at BDT 17192.82 million whereas the book value of equity stood at BDT 9169.50 million, resulting a Market Value Added of BDT 8,023.32 million as of December 31, 2016 as against BDT 7,014.67 million in 2015.

Market Value AddedBDT in million

Particulars 2016Taka

2015Taka

Market Value of Equity 17,192.82 16,184.17

Less: Book Value of Equity (Share Capital) (9,169.50) (9,169.50)

Market Value Added 8,023.32 7,014.67

Total Number of Shares outstanding 916,950,176 916,950,176

Market Value per Share 18.75 17.65

Market Value of Total Equity = [Total Number of shares outstanding X Market value per share as on 31.12.16]

Market Value Added = [Market Value of Total Equity] - [Book Value of Equity]

Market Value Added Statement

Market Value AdditionBDT in million

8,732.86 6,898.96 8,665.18 7,014.67 8,023.32

2012 2013 2014 20162015

Communicationto Shareholders& Stakeholders

Communicationto Shareholders& Stakeholders


BDT in million

Particulars

Group Bank

2016 2015Change

%2016 2015

Change %

Performance During the Year

Net Interest Income 4,207.21 3,138.46 34.05% 4,203.21 3,265.57 28.71%

Non Interest Income 8,645.24 8,465.93 2.12% 8,492.73 8,367.74 1.49%

Operating Income 12,852.45 11,604.39 10.76% 12,695.94 11,633.32 9.13%

Operating Profit 8,503.22 8,034.27 5.84% 8,497.82 8,043.94 5.64%

Profit After Tax 2,435.07 3,069.42 -20.67% 2,416.37 3,082.48 -21.61%

Year End Financial Position

Loans 191,865.59 168,878.46 13.61% 189,364.96 169,378.86 11.80%

Investments 61,731.63 58,829.27 4.93% 59,455.01 56,888.41 4.51%

Deposits 229,973.43 210,431.09 9.29% 230,533.70 210,435.77 9.55%

Shareholders Equity 26,523.56 27,206.66 -2.51% 26,522.86 27,224.92 -2.58%

Total Assets 291,798.01 260,718.03 11.92% 291,993.00 260,253.04 12.20%

Earning per share(BDT) 2.66 3.35 -20.73% 2.64 3.36 -21.61%

Dividend (%) 20% 15% 33.33% 20% 15% 33.33%

Price earning ratio(times) 7.06 5.27 34.02% 7.12 5.25 35.52%

Net asset value per share (BDT) 28.93 29.67 -2.51% 28.93 29.69 -2.58%

Market price per share(BDT) 18.75 17.65 6.23% 18.75 17.65 6.23%

Ratios (%)

Capital adequacy ratio (as per Basel III) 12.15% 11.52% 5.44% 12.18% 11.60% 4.99%

Non performing loans 4.89% 4.25% 15.11% 4.89% 4.25% 15.11%

Cost to income ratio 33.84% 30.77% 9.99% 33.07% 30.85% 7.17%

Financial Highlights


BDT in million

Particulars 2016 2015 2014 2013 2012BALANCE SHEET MATRIXAuthorized Capital 15,000.00 15,000.00 15,000.00 10,000.00 10,000.00

Paid up Capital 9,169.50 9,169.50 9,169.50 8,732.86 8,732.86

Reserve Fund & Surplus 24,886.78 19,340.03 18,292.59 13,074.71 10,864.68

Total Shareholders’ Equity 26,523.56 27,206.66 24,543.21 21,929.15 19,784.12

Deposits 229,973.43 210,431.09 189,472.54 177,519.46 152,901.24

Loans and Advances 191,865.59 168,878.46 147,070.81 134,863.82 126,968.97

Investments 61,731.63 58,829.27 56,378.59 57,589.06 39,011.28

Fixed Assets 8,947.16 7,885.23 7,913.00 7,795.65 7,677.51

Total Assets 291,798.01 260,718.03 236,608.40 220,930.85 191,276.30

Total Off Balance Sheet Items 113,910.63 88,522.24 92,184.70 82,126.39 71,863.58

Interest Earning Assets 254,120.97 225,546.44 203,449.40 192,452.88 165,980.25

Non-Interest Earning Assets 37,677.04 35,171.59 33,159.00 28,477.97 25,296.05

INCOME STATEMENT MATRIX

Interest Income 16,972.33 17,794.80 19,233.89 19,200.64 17,394.05

Interest Expenses 12,765.12 14,656.34 16,049.91 17,233.51 15,302.55

Investment Income 5,079.61 5,158.54 5,274.27 4,782.65 3,258.44

Non-Interest Income 3,565.64 3,307.39 3,158.93 2,935.02 2,481.68

Non-Interest Expenses 4,349.23 3,570.11 3,327.43 2,984.60 2,336.44

Total Income 25,617.57 26,260.72 27,667.09 26,918.31 23,134.17

Total Expenditure 17,114.35 18,226.45 19,377.34 20,218.11 17,638.99

Operating Profit 8,503.22 8,034.27 8,289.75 6,700.20 5,495.18

Profit before Tax 5,290.60 5,517.48 6,760.66 6,078.82 3,603.84

Net Profit after Tax 2,435.07 3,069.42 3,836.94 3,378.82 1,648.72

CAPITAL MATRIX

Risk Weighted Assets 280,402.29 247,250.88 221,249.27 200,098.46 180,327.66

Tier-I Capital 21,685.52 21,211.19 19,882.29 17,608.48 15,560.00

Tier-II Capital 12,370.76 7,298.35 7,579.80 4,199.09 4,037.54

Total Capital 34,056.28 28,509.53 27,462.09 21,807.57 19,597.54

Capital Surplus/(Deficit) 4,263.54 3,784.44 5,337.16 1,797.72 18,032.77

Tier I Capital ratio 7.73% 8.57% 8.99% 8.80% 8.63%

Tier II Capital ratio 4.41% 2.95% 3.43% 2.10% 2.24%

Total Capital to Risk Weighted Assets Ratio 12.15% 11.52% 12.41% 10.90% 10.87%

CREDIT QUALITY

Classified Loans 9,257.79 7,193.82 5,387.74 5,350.24 5,687.92

Provision for Unclassified Loans 2,430.00 1,540.00 1,334.72 1,220.28 1,210.28

Provision for Classified Loans 3,728.28 2,323.29 2,673.49 2,656.72 2,326.31

Provision for Contingent Liabilities 1,139.50 890.00 909.65 813.04 711.31

Percentage of NPLs to total Loans and Advances

4.89% 4.25% 3.64% 3.94% 4.47%

Key Financial Data, Ratios and Graphical Presentation



Particulars 2016 2015 2014 2013 2012FOREIGN EXCHANGE BUSINESS

Import 171,531.73 151,812.58 155,691.00 131,644.82 111,537.50

Export 146,606.09 126,423.89 112,137.60 95,220.40 84,464.20

Remittance (Inward) 64,665.84 60,708.50 48,740.50 39,299.10 41,455.40

OPERATING PROFIT RATIOS

Credit Deposit Ratio 83.43% 80.25% 78.09% 76.44% 83.21%

Cost of Deposit & Borrowing 5.51% 7.12% 8.32% 10.01% 10.20%

Administrative Cost 1.88% 1.69% 1.69% 1.72% 1.66%

Yield on Loans and Advances 9.41% 11.30% 13.52% 14.96% 15.13%

Spread 3.90% 4.18% 5.20% 4.95% 4.84%

Return on Assets 0.88% 1.23% 1.67% 1.64% 0.95%

Return on Equity 9.06% 11.86% 16.51% 16.20% 8.42%

Debt Equity Ratio 10.00 8.58 8.64 9.07 8.6

PERFORMANCE RATIOS

Net Profit per Employee 0.92 1.30 1.72 1.58 0.83

Net Profit per Branch 19.02 25.16 33.96 32.80 17.54

Operating profit as % of Working Fund 2.91% 3.08% 3.50% 3.03% 2.89%

Net Interest income as % of Working Fund 1.44% 1.20% 1.35% 0.89% 1.10%

Efficiency Ratio 33.84% 30.77% 28.64% 30.82% 29.83%

Ratio of Fees Income 22.59% 23.78% 22.96% 25.20% 26.22%

Salary Exp. to total Operating Exp. 40.32% 39.88% 40.92% 42.55% 42.51%

Salary Exp. to Fees Income 60.40% 51.59% 51.05% 52.03% 48.37%

Cost to Income Ratio 33.84% 30.77% 28.64% 30.82% 29.83%

DIVIDEND ISSUE & RIGHT ISSUE

Cash 20% 15% 15% 16% 15%

Stock - - - 5% -

Right Issue 1R:2 - - - -

SHARES INFORMATION MATRIX

No. of Shares Outstanding 9,169.50 9,169.50 9,169.50 9,169.50 8,732.86

Earnings Per Share (Actual Figure) 2.66 3.35 4.18 3.68 1.89

Number of Shareholders (Actual Figure) 39,009 46,285 58,169 65,413 64,060

Market Value Per Share-DSE (Actual Figure) 18.70 17.60 19.40 17.90 20.00

Price Earnings Ratio 7.06 5.27 4.67 4.91 10.52

Net Assets Value Per Share 28.93 29.67 26.77 23.92 22.66

Dividend Cover Ratio 0.75 0.45 0.36 0.54 0.79

OTHER INFORMATION

Number of Branches 128 122 113 103 94

Number of Islamic Windows 5 5 5 5 5

Number of Employees 2616 2376 2221 2118 2010

Number of Foreign Correspondents 807 811 790 778 691

BDT in million


Horizontal Analysis

Balance SheetBDT in million

Particulars2016(%)

20162015(%)

20152014(%)

20142013(%)

20132012(%)

2012

PROPERTY AND ASSETS

Cash

In hand (including foreign currencies)

173% 2,432.62 136% 1,903.29 114% 1,598.09 129% 1,802.67 100% 1,402.35

Balance with Bangladesh Bank (including foreign currencies)

163% 15,402.83 149% 14,093.70 147% 13,859.38 116% 10,955.39 100% 9,432.42

Balance with other banks and financial institutions

- - - - -

In Bangladesh 114% 2,860.09 87% 2,187.97 170% 4,283.51 107% 2,706.54 100% 2,517.87

Outside Bangladesh 153% 1,185.13 155% 1,203.35 191% 1,482.74 90% 695.51 100% 774.44

Money at call and on short notice

441% 4,271.34 95% 923.45 57% 548.3 104% 1,008.90 100% 969.1

Investments - - - - -

Government 159% 54,299.80 154% 52,620.79 147% 50,185.30 149% 50,860.91 100% 34,077.31

Others 151% 7,431.83 126% 6,208.48 126% 6,193.29 136% 6,728.16 100% 4,933.97

Loans, cash credit, overdrafts etc./investments

151% 182,661.82 133% 161,556.32 117% 141,778.21 107% 129,184.62 100% 121,239.44

Bills purchased and discounted

161% 9,203.77 128% 7,322.14 92% 5,292.59 99% 5,679.20 100% 5,729.53

Fixed assets including premises, furniture and fixtures

117% 8,947.16 103% 7,885.23 103% 7,913.00 102% 7,795.65 100% 7,677.51

Other assets 123% 3,101.61 191% 4,813.31 138% 3,473.97 139% 3,513.30 100% 2,522.35

Total assets 153% 291,798.01 136% 260,718.03 124% 236,608.40 116% 220,930.85 100% 191,276.30

Liabilities - - - - -

Borrowings from other banks, financial institutions and agents

108% 7,371.64 66% 4,556.92 70% 4,815.92 116% 7,921.43 100% 6,853.95

Subordinated bond 8,000.00 3,000.00 3,000.00 - -

Deposits and other accounts

- - - - -

Current/Al-wadeeah current accounts and other accounts

248% 30,285.06 190% 23,179.89 155% 18,935.05 116% 14,212.91 100% 12,201.09

Bills payable 373% 6,548.86 121% 2,127.21 154% 2,701.46 109% 1,914.53 100% 1,755.50

Savings bank/Mudaraba savings bank deposits

231% 19,700.58 216% 18,419.86 159% 13,531.82 166% 14,118.81 100% 8,515.19

Fixed deposits/Mudaraba fixed deposits

133% 173,438.93 128% 166,704.14 118% 154,304.20 113% 147,273.21 100% 130,429.45

Other liabilities 170% 19,919.38 132% 15,513.93 126% 14,766.54 116% 13,550.33 100% 11,729.24

Total liabilities - - - - -

Horizontal and Vertical Analysis



Particulars2016(%)

20162015(%)

20152014(%)

20142013(%)

20132012(%)

2012

Capital/shareholders' equity - - - - -

Paid up capital 105% 9,169.50 105% 9,169.50 105% 9,169.50 100% 8,732.86 100% 8,732.86

Statutory reserve 175% 9,170.00 170% 8,897.31 149% 7,792.81 123% 6,444.82 100% 5,236.10

Revaluation reserve 113% 4,763.89 141% 5,968.13 110% 4,670.87 102% 4,331.54 100% 4,231.90

Other reserve 100% 247.65 100% 247.65 100% 247.65 100% 247.65 100% 247.65

Foreign currency translation reserve

102144% (24.45) 116439% (27.87) (1015%) 0.24 1651% (0.40) 100% (0.02)

Retained earnings 239% 3,196.97 221% 2,951.94 199% 2,662.14 163% 2,172.67 100% 1,335.63

Total shareholders' equity 134% 26,523.56 138% 27,206.66 124% 24,543.21 111% 21,929.15 100% 19,784.12

Non-controlling interest 129% 10.00 121% 9.43 131% 10.18 135% 10.48 100% 7.76

Total liabilities and shareholders' equity

153% 291,798.01 136% 260,718.03 124% 236,608.40 116% 220,930.85 100% 191,276.30

Acceptances and endorsements

172% 43,813.55 143% 36,223.42 121% 30,725.22 129% 32,847.49 100% 25,416.70

Letters of guarantee 107% 15,154.12 94% 13,395.24 100% 14,253.37 114% 16,230.48 100% 14,188.45

Irrevocable letters of credit 174% 32,881.30 132% 24,992.38 165% 31,246.71 105% 19,925.64 100% 18,908.74

Bills for collection 141% 17,830.30 102% 12,812.74 117% 14,739.31 97% 12,300.43 100% 12,616.80

Other contingent liabilities 201% 1,474.68 150% 1,098.46 166% 1,220.08 112% 822.34 100% 732.88

Other Commitments 2,756.66 - - - - - - -

Total off-balance sheet items including contingent liabilities

159% 113,910.63 123% 88,522.24 128% 92,184.70 114% 82,126.39 100% 71,863.58

BDT in million


Horizontal AnalysisProfit and Loss Account BDT in million

Particulars 2016(%) 2016 2015

(%) 2015 2014(%) 2014 2013

(%) 2013 2012(%) 2012

Operating Income

Interest income/profit on investments 98% 16972.33 102% 17794.8 111% 19233.9 110% 19200.64 100% 17394.05

Interest paid/profit shared on deposits and borrowings etc. 83% 12765.12 96% 14656.34 105% 16049.91 113% 17233.51 100% 15302.55

Net interest income/net profit on investments 201% 4207.21 150% 3138.46 152% 3183.99 94% 1967.13 100% 2091.5

Investment income 156% 5079.61 158% 5158.54 162% 5274.27 147% 4782.65 100% 3258.44

Commission, exchange and brokerage 141% 2903.03 134% 2759.46 130% 2666.73 119% 2440.37 100% 2053.68

Other operating income 155% 662.6 128% 547.93 115% 492.2 116% 494.65 100% 428.01

Total operating income (A) 164% 12852.45 148% 11604.39 148% 11617.19 124% 9684.8 100% 7831.62

Salaries and allowances 175% 1741.46 143% 1423.68 137% 1361.48 128% 1269.82 100% 993.27

Rent, taxes, insurance, electricity etc. 206% 801.04 169% 658.26 146% 569.34 126% 491.84 100% 389.06

Legal expenses 90% 0.60 224% 1.49 92% 0.62 135% 0.90 100% 0.67

Postage, stamp, telecommunication etc. 162% 166.45 143% 147.33 141% 145.63 126% 129.59 100% 103.06

Stationery, printing, advertisements etc. 123% 132.23 105% 112.62 106% 113.72 105% 112.64 100% 107.52

Managing Director's salary and fees 106% 11.97 83% 9.45 83% 9.45 83% 9.45 100% 11.35

Directors' fees and expenses 108% 2.91 98% 2.65 127% 3.43 68% 1.84 100% 2.7

Auditors' fees 221% 1.60 143% 1.04 184% 1.34 114% 0.83 100% 0.73

Depreciation and repair of bank's assets 159% 403.6 133% 339.18 140% 356.79 120% 305.33 100% 254.64

Other expenses 230% 1087.36 185% 874.41 162% 765.65 140% 662.36 100% 473.44

Total operating expenses (B) 186% 4349.23 153% 3570.11 142% 3327.43 128% 2984.6 100% 2336.44

Profit before provision (C=A-B) 155% 8503.22 146% 8034.27 151% 8289.76 122% 6700.2 100% 5495.19

General provision 2433% 890 561% 205.28 313% 114.45 27% 10 100% 36.58

Specific provision 182% 2360.99 157% 2039.77 75% 974.01 41% 537.81 100% 1299

Provision for off-balance sheet items 159% 249.5 (13)% (19.65) 62% 96.61 65% 101.73 100% 157.03

Provision for diminution in value of investments (104)% (403.6) 70% 269.48 85% 329.03 (11)% (41.3) 100% 386.94

Other provisions 981% 115.74 186% 21.91 127% 15 111% 13.14 100% 11.8

Total provision (D) 170% 3212.62 133% 2516.79 81% 1529.1 33% 621.37 100% 1891.35

Total profit before taxation (C-D) 147% 5290.6 153% 5517.48 188% 6760.66 169% 6078.82 100% 3603.84

Provision for taxation 146% 2855.52 125% 2448.07 150% 2923.72 138% 2700 100% 1955.12

Net profit after taxation 148% 2435.07 186% 3069.42 233% 3836.94 205% 3378.82 100% 1648.7

Retained surplus during the year 232% 2162.38 211% 1964.92 267% 2488.95 233% 2170.1 100% 931.9

Earnings per share (Tk.) 141% 2.66 177% 3.35 221% 4.18 195% 3.68 100% 1.89



Vertical Analysis Balance Sheet BDT in million

Particulars 2016(%) 2016 2015

(%) 2015 2014(%) 2014 2013

(%) 2013 2012(%) 2012

PROPERTY AND ASSETSCash In hand (including foreign currencies) 1% 2,432.62 1% 1,903.29 1% 1,598.09 1% 1,802.67 1% 1,402.35

Balance with Bangladesh Bank and its agent banks(including foreign currencies)

5% 15,402.83 5% 14,093.70 6% 13,859.38 5% 10,955.39 5% 9,432.42

Balance with other banks and financial institutions - - 0% - 0% - 0% - - -

In Bangladesh 1% 2,860.09 1% 2,187.97 2% 4,283.51 1% 2,706.54 1% 2,517.87Outside Bangladesh 0% 1,185.13 0% 1,203.35 1% 1,482.74 0% 695.51 0% 774.44Money at call and on short notice 1% 4,271.34 0% 923.45 0% 548.3 0% 1,008.90 1% 969.1Investments - - 0% - 0% - 0% - - - Government 19% 54,299.80 20% 52,620.79 21% 50,185.30 23% 50,860.91 18% 34,077.31Others 3% 7,431.83 2% 6,208.48 3% 6,193.29 3% 6,728.16 3% 4,933.97Loans and advances/investments - - 0% - 0% - 0% - - - Loans, cash credit, overdrafts etc./investments 63% 182,661.82 62% 161,556.32 60% 141,778.21 58% 129,184.62 63% 121,239.44

Bills purchased and discounted 3% 9,203.77 3% 7,322.14 2% 5,292.59 3% 5,679.20 3% 5,729.53

Fixed assets including premises, furniture and fixtures 3% 8,947.16 3% 7,885.23 3% 7,913.00 4% 7,795.65 4% 7,677.51

Other assets 1% 3,101.61 2% 4,813.31 1% 3,473.97 2% 3,513.30 1% 2,522.35Non - banking assets - - - - - - - Total assets 100% 291,798.01 100% 260,718.03 100% 236,608.40 100% 220,930.85 100% 191,276.30LIABILITIES AND CAPITAL - - - - - Liabilities - - - - - Borrowings from other banks, financial institutions and agents 3% 7,371.64 2% 4,556.92 2% 4,815.92 4% 7,921.43 4% 6,853.95

Subordinated bond 3% 8,000.00 1% 3,000.00 1% 3,000.00 0% - 0% -

Deposits and other accounts 0% - 0% - 0% - 0% - 0% - Current/Al-wadeeah current accounts and other accounts 10% 30,285.06 9% 23,179.89 8% 18,935.05 6% 14,212.91 6% 12,201.09

Bills payable 2% 6,548.86 1% 2,127.21 1% 2,701.46 1% 1,914.53 1% 1,755.50Savings bank/Mudaraba savings bank deposits 7% 19,700.58 7% 18,419.86 6% 13,531.82 6% 14,118.81 4% 8,515.19

Fixed deposits/Mudaraba fixed deposits 59% 173,438.93 64% 166,704.14 65% 154,304.20 67% 147,273.21 68% 130,429.45

Bearer certificates of deposit 0% - 0% - 0% - 0% - 0% - Other deposits 0% - 0% - 0% - 0% - 0% - Other liabilities 7% 19,919.38 6% 15,513.93 6% 14,766.54 6% 13,550.33 6% 11,729.24Capital/shareholders' equity 0% - 0% - 0% - 0% - 0% - Paid up capital 3% 9,169.50 4% 9,169.50 4% 9,169.50 4% 8,732.86 5% 8,732.86Statutory reserve 3% 9,170.00 3% 8,897.31 3% 7,792.81 3% 6,444.82 3% 5,236.10Revaluation reserve 2% 4,763.89 2% 5,968.13 2% 4,670.87 2% 4,331.54 2% 4,231.90Other reserve 0% 247.65 0% 247.65 0% 247.65 0% 247.65 0% 247.65Foreign currency translation reserve 0% -24.45 0% -27.87 0% 0.24 0% -0.4 0% -0.02

Retained earnings 1% 3,196.97 1% 2,951.94 1% 2,662.14 1% 2,172.67 1% 1,335.63Total shareholders' equity 26,523.56 27,206.66 24,543.21 21,929.15 0% 19,784.12Non-controlling interest 0% 10 0% 9.43 0% 10.18 0% 10.48 0% 7.76Total liabilities and shareholders' equity 100% 291,798.01 100% 260,718.03 100% 236,608.40 100% 220,930.85 100% 191,276.30

OFF-BALANCE SHEET ITEMS - - - - - - - - - - Acceptances and endorsements 38% 43,813.55 41% 36,223.42 33% 30,725.22 40% 32,847.49 35% 25,416.70Letters of guarantee 13% 15,154.12 15% 13,395.24 15% 14,253.37 20% 16,230.48 20% 14,188.45Irrevocable letters of credit 29% 32,881.30 28% 24,992.38 34% 31,246.71 24% 19,925.64 26% 18,908.74Bills for collection 16% 17,830.30 14% 12,812.74 16% 14,739.31 15% 12,300.43 18% 12,616.80Other contingent liabilities 1% 1,474.68 1% 1,098.46 1% 1,220.08 1% 822.34 1% 732.88Other commitments 2% 2,756.66 - - - - Total off-balance sheet items including contingent liabilities 100% 113,910.63 100% 88,522.24 100% 92,184.70 100% 82,126.39 100% 71,863.58


Vertical AnalysisProfit and Loss Account BDT in million

Particulars 2016(%) 2016 2015

(%) 2015 2014(%) 2014 2013

(%) 2013 2012(%) 2012

Operating Income

Interest income/profit on investments 66% 16,972.33 68% 17,794.80 70% 19,233.90 71% 19,200.64 75% 17,394.05

Interest paid/profit shared on deposits and borrowings etc. 50% 12,765.12 56% 14,656.34 58% 16,049.91 64% 17,233.51 66% 15,302.55

Net interest income/net profit on investments 16% 4,207.21 12% 3,138.46 12% 3,183.99 7% 1,967.13 9% 2,091.50

Investment income 20% 5,079.61 20% 5,158.54 19% 5,274.27 18% 4,782.65 14% 3,258.44

Commission, exchange and brokerage 11% 2,903.03 11% 2,759.46 10% 2,666.73 9% 2,440.37 9% 2,053.68

Other operating income 3% 662.60 2% 547.93 2% 492.20 2% 494.65 2% 428.01

Total operating income (A) 50% 12,852.45 44% 11,604.39 42% 11,617.19 36% 9,684.80 34% 7,831.62

Salaries and allowances 7% 1,741.46 5% 1,423.68 5% 1,361.48 5% 1,269.82 4% 993.27

Rent, taxes, insurance, electricity etc. 3% 801.04 3% 658.26 2% 569.34 2% 491.84 2% 389.06

Legal expenses 0% 0.60 0% 1.49 0% 0.62 0% 0.90 0% 0.67

Postage, stamp, telecommunication etc. 1% 166.45 1% 147.33 1% 145.63 0% 129.59 0% 103.06

Stationery, printing, advertisements etc. 1% 132.23 0% 112.62 0% 113.72 0% 112.64 0% 107.52

Managing Director's salary and fees 0% 11.97 0% 9.45 0% 9.45 0% 9.45 0% 11.35

Directors' fees and expenses 0% 2.91 0% 2.65 0% 3.43 0% 1.84 0% 2.70

Auditors' fees 0% 1.60 0% 1.04 0% 1.34 0% 0.83 0% 0.73

Depreciation and repair of bank's assets 2% 403.60 1% 339.18 1% 356.79 1% 305.33 1% 254.64

Other expenses 4% 1,087.36 3% 874.41 3% 765.65 2% 662.36 2% 473.44

Total operating expenses (B) 17% 4,349.23 14% 3,570.11 12% 3,327.43 11% 2,984.60 10% 2,336.44

Profit before provision (C=A-B) 33% 8,503.22 31% 8,034.27 30% 8,289.76 25% 6,700.20 24% 5,495.19

General provision 3% 890.00 1% 205.28 0% 114.45 0% 10.00 0% 36.58

Specific provision 9% 2,360.99 8% 2,039.77 4% 974.01 2% 537.81 6% 1,299.00

Provision for off-balance sheet items 1% 249.50 0% (19.65) 0% 96.61 0% 101.73 1% 157.03

Provision for diminution in value of investments -2% (403.60) 1% 269.48 1% 329.03 0% (41.30) 2% 386.94

Other provisions 0% 115.74 0% 21.91 0% 15.00 0% 13.14 0% 11.80

Total provision (D) 13% 3,212.62 10% 2,516.79 6% 1,529.10 2% 621.37 8% 1,891.35

Total profit before taxation (C-D) 21% 5,290.60 21% 5,517.48 24% 6,760.66 23% 6,078.82 16% 3,603.84

Provision for taxation 11% 2,855.52 9% 2,448.07 11% 2,923.72 10% 2,700.00 8% 1,955.12

Net profit after taxation 10% 2,435.07 12% 3,069.42 14% 3,836.94 13% 3,378.82 7% 1,648.72



Segment Information

AgricultureIndustryWorking capital �nancingExport credit

Small and cottage industries

Finance to NBFIsReal EstateTransport & communicationSmall Enterprise �nancingMiscellaneousCommercial credit

Sector wise Investment

21%

1%1%

11%5%1%1%

8%23%

21%

7%

Conventational bankingIslamic BankingO�-shore Banking

Operating Revenue

1%

92%

7%

Interest IncomeInvestment IncomeCommission, exchange and brokerageOther Operating Income

Revenue Sources

11%

3%66%

20%

Interest paidOperating ExpensesProvisionTax

Expenditure Mix

14%

12%55%

19%

DhakaChittagong

RajshahiSylhet

KhulnaRangpur

BarisalMymensingh

Division wise Loans

2%1%

1%0%0%

73%

20%

Rural AreaUrban Area

Area wise Loans

93%

7%


Graphical Presentation

Market price per share

20.00 17.90 19.40 17.60 18.75

2012 2013 2014 20162015

Price earning ratio

2012 2013 2014 20162015

10.52 4.91 4.67 5.27 7.06

Earning per share

2012 2013 2014 20162015

1.89 3.68 4.18 3.35 2.66

Total assetsBDT in million

2012 2013 2014 20162015

191,276 220,931 236,608 260,718 291,798


Loans and advancesBDT in million

2012 2013 2014 20162015

126,969 134,864 147,071 168,878 191,866

DepositsBDT in million

2012 2013 2014 20162015

152,901 177,519 189,473 210,431 229,973

Import businessBDT in million

2012 2013 2014 20162015

111,538 131,645 155,691 151,813 171,532

Operating incomeBDT in million

2012 2013 2014 20162015

7,832 9,685 11,617 11,604 12,852

Operating pro�tBDT in million

2012 2013 2014 20162015

5,495 6,700 8,290 8,034 8,503

Pro�t before taxBDT in million

2012 2013 2014 20162015

3,604 6,079 6,761 5,517 5,291

Dividend

2012 2013 2014 20162015

15% 21% 15% 15% 20%

Shareholders’ equityBDT in million

2012 2013 2014 20162015

19,784 21,929 24,543 27,207 26,524

Return on equity

2012 2013 2014 20162015

8.42% 16.20% 16.51% 11.86% 9.06%

Return on average assets

2012 2013 2014 20162015

0.95% 1.64% 1.67% 1.23% 0.88%

Non performing loans

2012 2013 2014 20162015

4.47% 3.94% 3.64% 4.25% 4.89%

InvestmentBDT in million

2012 2013 2014 20162015

39,011 57,589 56,379 58,829 61,732



Loans and advancesBDT in million

2012 2013 2014 20162015

126,969 134,864 147,071 168,878 191,866

DepositsBDT in million

2012 2013 2014 20162015

152,901 177,519 189,473 210,431 229,973

Import businessBDT in million

2012 2013 2014 20162015

111,538 131,645 155,691 151,813 171,532

Operating incomeBDT in million

2012 2013 2014 20162015

7,832 9,685 11,617 11,604 12,852

Operating pro�tBDT in million

2012 2013 2014 20162015

5,495 6,700 8,290 8,034 8,503

Pro�t before taxBDT in million

2012 2013 2014 20162015

3,604 6,079 6,761 5,517 5,291

Dividend

2012 2013 2014 20162015

15% 21% 15% 15% 20%

Shareholders’ equityBDT in million

2012 2013 2014 20162015

19,784 21,929 24,543 27,207 26,524

Return on equity

2012 2013 2014 20162015

8.42% 16.20% 16.51% 11.86% 9.06%

Return on average assets

2012 2013 2014 20162015

0.95% 1.64% 1.67% 1.23% 0.88%

Non performing loans

2012 2013 2014 20162015

4.47% 3.94% 3.64% 4.25% 4.89%

InvestmentBDT in million

2012 2013 2014 20162015

39,011 57,589 56,379 58,829 61,732



Export businessBDT in million

2012 2013 2014 20162015

84,464 95,220 112,138 126,424 146,606

Operating expenseBDT in million

2012 2013 2014 20162015

2,336 2,985 3,327 3,570 4,349

Total provisionBDT in million

2012 2013 2014 20162015

1,891 621 1,529 2,517 3,213

Pro�t after taxBDT in million

2012 2013 2014 20162015

1,649 3,379 3,837 3,069 2,435


Name of the Category Number of Shares Percentage

Sponsors 296,760,231 32.36

Financial Institutions & Investor A/C Holders 336,576,964 36.71

General Public 283,612,981 30.93

TOTAL 916,950,176 100.00

Shares held by the Directors in 2016Sl.

No.Name of the Directors Designation Shares Percentage

1 Alamgir Kabir, FCA Chairman 19,944,672 2.18

2 Ragib Ali (ceased to be Director on and from March 8, 2017) Vice Chairman 28,026,291 3.06

3 M.A. Kashem Director 20,307,060 2.21

4 Azim Uddin Ahmed Director 25,490,735 2.78

5 Duluma Ahmed Director 19,082,742 2.08

6 Jusna Ara Kashem Director 18,339,525 2.00

7 Md. Akikur Rahman Director 18,443,731 2.01

8 Rehana Rahman Director 18,844,145 2.06

9 Sirat Monira Director 120,547 0.01

10 Abdul Hye (Representing Karnafuli Tea Co. Limited) (Ceased to be Director on and from March 8, 2017) Director 162,420 0.02

11 A.H.M. Moazzem Hossain Director - -

12 Dr. Quazi Mesbahuddin Ahmed Director - -

13 M. Kamal Hossain Managing Director

(Current Charge) - -

Total Shares - 140,573,157 18.41

Distribution of Shareholders in 2016


SponsorsFinancial Institutions & Investor A/C HoldersGeneral Public

Distribution of ShareholdersPercentage

30.93

36.71

32.36


Market Price Information

MonthDSE CSE Total

Volume on DSE & CSE

MonthHigh

Month Low

Total Volume

Month High Month LowTotal

Volume

Jan-16 17.80 16.80 13,369,892 17.80 17.00 473,210 13,843,102

Feb-16 17.70 16.90 7,638,876 17.60 16.70 658,591 8,297,467

Mar-16 17.60 14.50 12,083,761 17.70 14.40 1,212,997 13,296,758

Apr-16 15.10 13.70 6,483,648 15.00 13.50 533,730 7,017,378

May-16 15.00 13.50 6,181,544 15.70 13.40 299,983 6,481,527

Jun-16 15.90 14.50 7,190,504 15.80 14.70 336,907 7,527,411

Jul-16 16.50 15.80 5,734,704 16.50 15.70 241,660 5,976,364

Aug-16 16.50 15.60 6,993,428 16.50 15.00 300,154 7,293,582

Sep-16 16.70 14.80 5,375,753 16.70 15.80 324,157 5,699,910

Oct-16 17.50 16.30 11,689,124 18.00 16.20 476,993 12,166,117

Nov-16 18.10 16.80 10,307,877 18.20 16.70 1,212,253 11,520,130

Dec-16 18.80 16.90 16,124,892 18.90 17.30 899,260 17,024,152

20

18

16

14

12

10

8

6

4

2

0

Jan

Feb

Mar Apr

May Jun Jul

Aug

Sep

Oct

Nov

Dec

High

Low

Month-wise High Low Share Price in Dhaka Stock Exchange Limited (DSE)

Month-wise High Low Share Price in Chittagong Stock Exchange Limited (CSE)

20

18

16

14

12

10

8

6

4

2

0

Jan

Feb

Mar Apr

May Jun Jul

Aug

Sep

Oct

Nov

Dec

High

Low


Financial Calendar

Financial Calendar 2016

Business policy and Planning Conference held and Annual Budget discussed

Chittagong Division January 22, 2016

Sylhet Division January 28, 2016

Dhaka & Barisal Division February 06, 2016

Khulna, Rajshahi & Rangpur Division February 12, 2016

Audited Consolidated Financial Statements for the year 2015 finalized and signed March 02, 2016

Publication of Financial Statements for the year 2015 in two news papers March 24, 2016

21st Annual General Meeting held April 11, 2016

Final Dividend for 2015 for payment May 02, 2016

Interim Financial Statements

For the 1st quarter ended March 31, 2016 (unaudited) published in two widely circulated news papers

May 15, 2016

For the 2nd quarter ended June 30, 2016 (unaudited) published in two widely circulated news papers

July 30, 2016

For the 3rd quarter ended September 30, 2016 (unaudited) published in two widely circulated news papers

October 31, 2016

Financial Calendar 2017

Audited Financial Statements for the year 2016 will be finalized and signed April 08, 2017

22nd Annual General Meeting will be held May 15, 2017

Final Dividend for the year 2016 proposed to be paid June 06, 2017

Interim Financial Statements( Proposed)

For the 1st quarter ended March 31, 2017 (unaudited) approved by the Board of Directors

April 25, 2017

For the 2nd quarter ended June 30, 2017 (unaudited) approved by the Board of Directors

July 25, 2017

For the 3rd quarter ended September 30, 2017 (unaudited) approved by the Board of Directors

October 25, 2017



Our Relationship-Activity with Stakeholders:

The following table discusses various aspects of stakeholders, their engagement process and our responses:

Our Stakeholders Mode of Engagement Frequency of

Engagement Their Priorities Methodologies used for Feedback

Customers

Customer Feedback Survey Branches/ATM/Retail Banking and Card Agent

Information Brochure Newspaper and Electronic Media advertisements

Corporate website Call Centre Customer education and awareness

Complaint Box

Monthly Frequently As and when required

As and when required

Continuous Frequently Any time

Innovative products and services

Service Quality Competitive Pricing Flexibility in offerings No undisclosed Cost Ethical banking Extra ordinary service

Customer Feedback Survey

Shareholders

Annual Report Annual General Meeting Extra-Ordinary General Meetings

Corporate Disclosures Price Sensitive Information Interim Financial Statements

Annually Annually As and when required



Quarterly

Results of operation Business ethics Sustainable Growth Assets Quality

Concerns of existing and prospective shareholders are addressed

Periodical dialogue Financial Risk Management Process.

Risk Management Culture Timely debt/ investment recovery

Employees

Managers’ Conference, Workshops, Seminars.

Cross Functioning Training Program

Internet Portal Website Awareness about news/ developments in the business sector

Team building through development of cross-cutting working groups

Annually, Half-Yearly & as when felt necessary


Continuous Continuous Daily

Staff Welfare Measures

Remuneration linked with performance

Whistle blowing mechanism

Training and workshop program.

Salary packages revised and adjusted considering industry scenario.

Comprehensive Training and other development program.

Health and safety standards are maintained including, Health Centre and Gym in Corporate Office.

Regulators

On-site surveillance by the Bangladesh Bank

Off-site supervision Directives and Circulars Filing of Returns and Statements

Meetings

As and when felt necessary

As and when required As and when required Within deadlines As and when required

Proper compliance with laws and Regulations.

Timely payment of all regulatory dues.

Timely reporting

Ensuring strict compliance with all regulatory matters

Focus on Compliance Culture in the Bank

Business Associates

Adherence to proper procurement regulations while maintaining a good business relationship with the service providers.

Regular interaction on issues for mutual benefit

As Required Transparency Timely payment of their bills.

Rigorous observance of Bank’s procurement policy

Environment and Society

Invest in Environment Friendly Projects

Awards to entrepreneurs for outstanding performance in sustainable development and protection of environment.

Green School/ Student Scholarship Program

Donation to Govt. Fund/ Individual on regular basis to promote citizens’ welfare

Sponsoring efforts for protection of environment

Other CSR Activities

Continuous Annually Continuous/Annually



As and when felt necessary

Financial Inclusion Micro/SME Financing

Green Banking Sustainable operations

Transparency Return to the society

Charitable ventures Contribution to education, health, disaster mgt. & environmental sector

Financial Inclusion through Mobile Banking and

I-Banking Operations

Stakeholders’ Engagement Process


Southeast Bank ensures equal treatment to all shareholders. The Bank does not discriminate between minority and majority shareholders. To ensure equal treatment of all shareholders, the bank created various mechanisms, such as:

i) Shareholders who are unable to attend the shareholders’ meeting are provided with proxy forms to nominate proxy to attend and vote on their behalf. The proxy forms which are in accordance with the standard format, are sent along with the annual report.

ii) The shareholders’ meetings proceed in accordance with the order of agenda, without adding new and uninformed agenda, to give shareholders the opportunity to study the information on the given agenda before the poll. Moreover, important information for the shareholders’ meetings are not changed abruptly to the disadvantage of the shareholders.

iii) The bank sees the importance of the consideration of transactions which may have conflict of interest or may be connected or related transactions, and abides by good corporate governance principles, including the rules and regulations of the Bangladesh Securities and Exchange Commission and the Dhaka Stock Exchange and Chittagong Stock Exchange transactions. Directors, management and those who are related persons do not participate in the consideration to approve such transactions.

iv) The bank continues to have regular communication with the shareholders through periodic updates of performance and at any other time when it believes it to be done in the best interest of shareholders generally.

v) At times, the investors lodge complaints. These complaints are timely resolved. Investors at times lodge complaints through DSE and CSE. Those are also timely taken up and resolved. The concerned investors and the DSE/CSE are informed of the resolution of the complaint.

SEBL follows the following principles in dealing with the Investors

Fair treatment

Timeliness in the resolution of investors’ complaints

Information to investors about the resolution of their complaints

Friendliness with all investors and all investor segments.

Protection of investors’ interest.

Way of Redress of Investors’ Complaints

An investor can complain through email [email protected]

An investor can make a written complaint through letter.

The company maintains investor grievance file in which full details of every written compliant are kept.

We have 3 designated persons who look after the investor grievances within a timeframe.

The full details of the written complaint are passed on to the concerned department. The compliance officer of the Company must be apprised of it as soon as it is received.

A letter or email is sent to the investor who has submitted written complaint by the designated person or compliance officer acknowledging receipt of the complaint and informing him/her of the process for suitable decision.

If necessary, the points of complaints are thoroughly enquired into.

Availability of information about Southeast Bank Limited

Annual Report of each year and other relevant information about SEBL may be viewed on SEBL’s website www.southeastbank.com.bd. The Bank provides copies of Annual Reports to the Bangladesh Securities and Exchange Commission, Bangladesh Bank, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for their reference. Investors may read them at public reference room or library.

Investors’ Inquiries

Queries relating to shareholdings, for example, transfer of shares and payment of dividend, are to be sent to the following address:

Investors’ Relation Department

Address : Southeast Bank LimitedHead Office Share Division, Eunoos Trade Centre (Level-2) 52-53, Dilkhusha C/A, Dhaka-1000Web Address : www.southeastbank.com.bdName of Contact Person : Mohammad Omar Faruque Vice PresidentE-mail: [email protected] : +8802 9567271 (10:00 A.M. to 6:00 P.M.)Fax : +8802 9567273

Redressal of InvestorsComplaints



SEBLOutlookWe are proud of our achievements and careful of our future. We will continue to capitalize on our strengths, address our weaknesses, seize opportunities in the face of threats to become market leader in all areas.


SEBLOutlookWe are proud of our achievements and careful of our future. We will continue to capitalize on our strengths, address our weaknesses, seize opportunities in the face of threats to become market leader in all areas.

SEBL OUTLOOK

Products and Services 218Media Highlights 220Caring for the Employees (Health and Safety) 224Career Development Program 225Contribution to National Exchequer 226

Empowering Women 226

Environment - Responsive Bank 227SEBL Green School 228Financial Inclusion: Mobile Banking Services – Telecash 230Connecting with Customers 230Service Excellence in Action 231Bank's Network: List of Branches and ATMs 232

Memories of 21st AGM 242

Worldwide Correspondents Network 244


ISLAMIC BANKING DEPOSIT PRODUCTS

Mudaraba Savings Bank Account Al-Wadiah Current Deposit Account Mudaraba Short Notice Deposit Mudaraba Monthly Savings Scheme Mudaraba Monthly Income Scheme Mudaraba Pension Savings Scheme Mudaraba Double Benefit Scheme Mudaraba Millionaire Deposit Scheme Mudaraba Term Deposit Receipt Hajj Sanchaya Prokalpo Mudaraba Super Double Benefit Scheme Mudaraba Cash Waqf Mudaraba Mohor Savings Scheme

VALUE ADDED SERVICES

Student File Locker Service Insurance Coverage

Deposit Scheme Senior Citizen Scheme Passport Endorsement Individual Remittance

(Inward and Outward) Internet Banking Service

TREASURY SERVICES

Fixed-income Investment Portfolio Service (Individual and Corporate)

Foreign Exchange Fund Management (Spot, Forwards, SWAPS)

Treasury Auction Management (Primary Dealer) Bank’s Liquidity and Fund Management Export/Import Fund Management Secondary Transaction of Govt. Securities

ProductsandServices

CONVENTIONAL BANKING DEPOSIT PRODUCTS

Saving Bank Account (SB) Current Deposit Account (CD) Short Notice Deposit (SND) Fixed Deposit Receipt (FDR) Monthly Saving Scheme (MSS) Monthly Income Scheme (MIS) Pension Savings Scheme (PSS) Double Benefit Scheme (DBS) Wage Earners Pension Savings

Scheme (WEPSS) Anonya(™) Bichokkhon(™)

CARD SERVICES

SEBL VISA Credit Card SEBL Debit Card- My Card SEBL VISA Platinum Credit Card SEBL My Remit Card SEBL Dual Currency

VISA Credit Card SEBL VISA Virtual Card


SME & AGRI. LOAN

Southeast Shopan Southeast Shikhor Southeast Shuprova Southeast Shopnil Southeast Agri. Loan

CORPORATE LOAN Working Capital Finance Term Finance Project Finance Syndication & Club Finance Work Order Finance Real Estate Finance Trade Finance Commercial Finance Export Finance Loan to NBFI

RETAIL BANKING SERVICES

SEBL Home Loan SEBL Personal Loan SEBL Car Loan

EXPORT SERVICES Advising Export Documentary Credit Transferring Export Documentary Credit Opening Back- to-Back Documentary Credit

(Local & Foreign)

Foreign Documentary Bills Collection:a. Documentary Collections against Payment (D/P)b. Documentary Collections against Acceptance (D/A)

Pre-shipment Finance: Packing Credit

Post-shipment Finance:a. Foreign Documentary Bills Purchase (FDBP)b. Purchase/Discounting Export Bills (Local)c. Export Development Fund (EDF) from Bangladesh Bankd. Cash Incentive from Bangladesh Bank

Foreign Currency (FC) Account Resident Foreign Currency Deposit Account (RFCD) Non-Resident Foreign Currency Deposit Account (NFCD) Non-Resident Taka Account (NRTA) Export Retention Quota (ERQ) Account

IMPORT SERVICES Documentary Credit:

a. Opening Import Documentary Credit (Local and Foreign)

b. Arranging Add Confirmation through Foreign Correspondent Banks

c. Arranging Discounting through Foreign Correspondent Banks

Post Import Finance :a. Trust Receipt (TR)b. Time Loans (TL)c. Term Loans

Documentary Collection services:a. Documentary Collections against

Payment (D/P)b. Documentary Collections against

Acceptance (D/A)

Issuing Shipping Guarantee

ADDITIONAL SERVICES PROVIDED BY OFF-SHORE BANKING UNIT

Usance Payable At Sight (UPAS) facility to the Documentary Credit opened by the AD Branches

Time Loan in Foreign Currency to the AD Branches

Term Loan in Foreign Currency

220MediaHighlights

Southeast Bank Limited I Annual Report 2016 221Southeast bank outlook




The compensation and benefit package for the employees of the bank is designed by taking into consideration the strategic goals and business objectives of the Bank. Other than the salary, the bank provides various cash and non-monetary benefits to its employees i.e. contributory provident fund, gratuity, incentive bonus, encashment of un-availed leave, car maintenance allowance and house furnishing allowance, etc. It revises the salary structure of the Bank periodically for inflation adjustment and better living of its employees.

The bank believes that good health and safety of the employees make a significant contribution to the bank’s profitability and ensure continual improvement in health and safety standards. The bank ensures appropriate health and safety system in its work places. It has established “Southeast Bank Health Care Center” at Head Office to provide health advice and First Aid treatment for both the male and female employees of the Bank.

Bank gives great emphasis on keeping the employees’ health fit and active. To support the healthcare facility of the employees, bank has established a health care centre at its Head Office which can be used separately by both male and female employees. Bank has already established an e-library and going to start a cafeteria at Head Office.

Bank provides financial assistance to support special medical care of the employees. In 2016, bank donated BDT 1,425,615.00 million to employees for their medical treatment. Southeast Bank Limited (SEBL) believes that sound physical and mental fitness of the employees is the key to sustainable growth of the bank.

To facilitate day care services for the children of employees of the bank, it has established a Day Care Center at Mothijheel, Dhaka jointly with 21 other private commercial Banks. This facility gives comfort to our employees and help them discharge their duties with more satisfaction.

Caring for the Employees (Health and Safety)


The career development program of Southeast Bank Limited is designed to provide self-understanding and necessary tools to its employees to pursue a meaningful career and prepare themselves for higher level positions within the Bank. The Bank’s Career Development Program intends to help its employees to explore and to sort out their interests, abilities and strategically develop towards job goals.

The Bank considers its employees as the most valuable asset. The Career Development Program of the Bank contains training, workshops, seminars and specialized programs. Each and every year the Bank devotes considerable amount of resources for continuous development of the employees through in-depth operational and professional training relating to laws and practices, rules and regulations of trade finance, investment/loans and advances, day to day banking operation, reporting and compliance, Information Technology, leadership, time and stress management, skill development and global banking competencies etc. The Bank has a wide span of 8000 sft own Training Institute located at the business hub of Dilkusha C/A, Dhaka. Southeast Bank Training Institute conducts Training Needs Assessment (TNA) on regular basis to identify the Training Needs of the Employees of the Bank.

In the year 2016, Southeast Bank Training Institute has conducted a total of 96 (Ninety Six) training courses, workshops, seminars and round table discussions including Foundation Training Courses for newly recruited freshers in the positions of Probationary Officer, Trainee Officer, Trainee Cash Officer at its institute. It has also conducted 2 (two) outreach training programs at Chittagong and Sylhet. The participants of the courses/workshops/seminars were from all levels of Officers according to the contents of the programs. A good number of senior level Executives also participated in several workshops/seminars.

Apart from the above, a total number of 215 officials of different grades participated in training/ workshops/seminars in various institutions at home and abroad under Career Development Program of the Bank in the year 2016.

Career Development Program

Southeast bank outlook


During the fiscal year 2015-2016, Southeast Bank’s contribution to the National Exchequer was BDT 1,644.59 million. The Bank’s contributions to the National Exchequer for the last five (5) years are given below:

Year Amount in million

2015 1.644.59

2014 2,519.31

2013 2,573.77

2012 2,069.85

2011 1,802.80

Southeast Bank has been awarded the country’s 6th highest Tax Payers in the Banking Institution Category for the assessment year 2015-2016.

Contribution to National Exchequer

Southeast Bank Limited (SEBL) believes in the empowerment of women for sustainable and balanced development of the Bank. It will not be possible to achieve the organizational goal without active participation of female workforce of the Bank. In support of female empowerment, the bank gives priority to recruitment of qualified female employees and ensures their career progression. The Bank does not allow any discrimination between male and female employees and it encourages the women to take up leadership opportunity for balanced development of the bank. As part of women empowerment, SEBL established two ladies branches namely, Moghbazar Ladies Branch and Dhanmondi Ladies Branch where all the employees are women including the Heads of Branches. Out of total number of 2089 officials of the Bank as on 31st December, 2016, 446 employees i.e. 22 percent were female.

Empowering Women


SEBL takes pride in its partnership with a prominent energy fund named Global Climate partnership Fund (GCPF) managed by RespoosAbility AG of Switzerland. In 2016 we could drawdown 2nd trench of USD 5.00 million after successfully utilizing USD 5.00 million in year 2015.

SEBL under a technical assistance of GCPF engaged Frankfurt School of Management and Finance -a renowned European Educational institution for capacity building in Energy Efficiency and Renewable energy financing.

Under another technical assistance of the fund world famous “Enclude” advisory group of Netherlands is helping the Bank develop a social and environmental management guideline that will be rolled out in early 2017.

Environmental and social risk means the risk of causing pollution or destruction of the natural environment (land, water, air. natural habitats, animals and plant species) and violation

Environment -Responsive Bank


Introduction

Southeast Bank Green School is a noble venture of Southeast Bank Limited. It started functioning from 2013. The aim of the school is to provide quality education in English Medium to the students at a reasonably lower cost affordable to the parents of the locality. The school has also extra-curriculum activities for students. The school aims at creating a right human resource who enter to learn and ultimately go forth to serve the society.

School Curriculum

The school is based on Edexcel British Curriculum. The school offers classes from pre-play (starts with age 2.5 years old) to 10th grade (O’level). At present, the school has 21 dedicated teachers. They serve under the supervision of an experienced principal. .

Extra Academic Activity

Our school has already been implementing many plans and projects. We offer enough extra-curriculum activities for the students to ignite their inner zeal and longing for learning. Our teachers and students do not confine themselves within the boundary of academic activities. They travel beyond and involve themselves in extra-curriculum activities like annual sports, science fair, graduation ceremony, several competitions on singing, dancing, debate, drama, recitation, art, etc..

Our participation in celebration of events

We integrate our students in the celebration of national occasions and traditional events. It is intended to develop in them the seeds of patriotism. We come out with specially designed programs on the occasions of the International

SEBL Green School


Mother Language, Independence Day, Victory Day, Pohela Baishak etc.

Technology-Based Education

The school is equipped with all modern equipments and facilities. To facilitate learning of our students, we have a science laboratory and a computer laboratory. We encourage our students to elevate their thoughts independently and comfortably in Social Club along with the classroom activities.

Looking forward

We have completed a very successful year in 2016. With its ongoing performance, the school has succeeded in drawing keen interest among the dwellers of the area. We look forward with much energy and optimism to the upcoming academic sessions. It will herald further development and innovation both in academic and infrastructural areas. Based on the success already achieved, we are confident that Southeast Bank Green School will develop further and emerge as an ideal temple of learning within a short period of time.


Mobile Financial Service (MFS): Southeast Bank Limited (SEBL) has been providing mobile financial services with the brand name of TeleCash to its customers since January 29, 2015. Around 55,000 customers have been enrolled so far in the TeleCash network. Among them, 32,000 customers are availing TeleCash services through the channels of USSD and Android-based Mobile Apps according to their convenience. Utility Bills Payment, Tuition Fees Payment and mobile Top-up services are the most prominent services out of its wide range of services. Near about 5200 authorized agents across the country are under the TeleCash distribution channel to serve mobile financial services to the remote customers and majority of them are unbanked people. Monthly average transaction of TeleCash is BDT.855 million by considering last six months transaction. Recently TeleCash has joined the pilot project of ‘Access to MFS for women in Bangladesh’ which has been jointly initiated by International Finance Corporation (IFC) and Bangladesh Bank. SEBL is trying to execute school banking program (i.e. educational institution-based financial literacy and financial services program) by deploying its TeleCash MFS delivery channel. SEBL is planning to incorporate QR (Quick Response) Code Technology with TeleCash MFS System to bring a unique dimension in electronic banking concept. Core objective of TeleCash is to achieve customer satisfaction by ensuring instant and secure transaction and park no-cost deposit for the Bank.

Financial Inclusion:Mobile Banking Services – Telecash

Southeast Bank Limited (SEBL) offers a wide range of products and services to corporate, SME and retail customers to meet the tailormade requirements of all segments of customers. On the eve of the Bank’s 21st Anniversary, it launched a special deposit campaign named “Nibir” from 15 May 2016 to 30 June 2016 which offered some attractive benefits on Savings/Current accounts for Women and Senior Citizen. “Anannya” is an exclusive savings product for women and “Bichokkhon” is an attractive savings product for Senior Citizens. The campaign was a resounding success as it could mobilize large number of deposit customers and a significant volume of low cost deposit. The Bank will continue to introduce unique and innovative products and services to connect with its existing and potential customers and to meet their ever evolving financial needs.

Connecting with Customers


Service Excellence is one of the core values of Southeast Bank Limited. The Bank focuses on providing fast and high quality customer service with state of the art technology. Various methods have been adopted such as, 24X7 Call Center, Central Monitoring System (CMS), Web Chat Service to provide customer service in the most hassle-free way. Short code 16206 is now used round the clock 24X7 to address telephonically the business needs and queries of the clients. Through CCTV, all the activities of the branches are monitored by Head Office Central Monitoring System. Recently, bank introduced customer service through Web Chat. It enables live interaction between the client and bank’s customer service executives to meet clients’ banking queries.

We resolve customer complaints fairly, consistently and promptly. Every branch has a dedicated “Customer Service and Compliant Management Desk” for dispute resolution. Customers can lodge complaints in person or through other available means such as letter, telephone, facsimile and email. Compliant Lodgment Forms are available at all our branches. We deal quickly with complaints received from the customers. We seek ideas and suggestions of the customers on how we can serve them better. The customers can give their valuable feedback through Service Quality Forms available at all branches under sealed envelope. The branches send the sealed envelopes containing Service Quality feedback received from the clients to the Head Office for evaluation of customer opinion. The opinion/feedback of the customers are scrutinized and widely discussed in the monthly Management Committee meeting and necessary steps are taken for improvement of customer service.

Branch Supervisors at Head Office work relentlessly to ensure service excellence. Supervisors periodically visit the branches to monitor various performance areas including quality of customer service of the branches. In the Mangers’ Conferences, different aspects of branches are elaborately reviewed and necessary steps are taken for further improvement of the service quality of the bank. As part of off-site supervision, the supervisors can monitor their respective branches’ activities through Central Monitoring System (CMS)-(a state of art technology) which has been placed at the Bank’s Head Office. According to BRPD Circular No.07 dated July 05, 2015, Southeast Bank is the pioneer among peer banks, to set-up this technological solution in order to become compliant and diciplined.

Service Excellencein Action



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> DHAKA DIVISION (64)

> CHITTAGONG DIVISION (30)

> SYLHET DIVISION (12)

> KHULNA DIVISION (08)

> RAJSHAHI DIVISION (09)

> RANGPUR DIVISION (02)

> BARISAL DIVISION (01)

> MYMENSINGH DIVISION (02)

BRANCHES AND ATMS

Bank’s Network:List of Branches and ATMS


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> MYMENSINGH DIVISION (02)

BRANCHES AND ATMS

DHAKA DIVISION (64)

Principal Branch1, Dilkusha Commercial Area, Dhaka-1000.Tel: 9563101, 9550081, 9567271Fax: 88-02-9551575

Imamganj BranchBhuiyan Market 163/2, Mitford Road, DhakaTel: 7314801, 7316423, 7318567, 7316644, Fax: 88-02-7314801

Bangshal Branch14/3, North South Road, DhakaTel: 7121248, 7121251, 9567163, 7176116, 7176117Fax: 88-02-9567164

Gulshan BranchHouse # 82 CES (F) 1, Gulshan Avenue, Dhaka. Tel: 9883491, 98834 01-5, 9883492, Fax: 88-02-9883495

Dhanmondi BranchHouse # 23 (New),Road # 16 (New)/27 (Old)Dhanmondi R/A, DhakaTel: 8122474, 9123183, 9123518, 9123167, Fax: 88-02-9111427

Uttara BranchHouse # 1, Road # 11, Sector # 1Uttara, Dhaka-1230Tel: 8922538, 8923680, 8916538 Fax: 88-02-8923781

Kawran Bazar Branch Jamuna Bhaban (1st Floor), 2, Kawran Bazar C/A, Dhaka-1215Tel: 9136112, 8189737, 9139276, 8189738-40, Fax: 88-02-9136510

New Eskaton Branch Chowdhury Centre23/Ka, New Eskaton Road,(1st Floor), P.S. : Ramna, Dhaka-1000 Tel: 9360953, 9340001, 9330176, 9340796, Fax: 88-02-9362177

New Elephant Road BranchKazi Bhaban39, New Elephant Road(1st and 2nd Floor)Dhanmondi, Dhaka-1205Tel: 9674588, 9674327, 9674324-5Fax: 88-02-9674326

Agargaon BranchPlot # E-4/B (1st Floor)Agargaon Administrative Area,Sher-e-Bangla Nagar, Mohammadpur, Dhaka-1207, Tel: 58151717, 9132747, 9134247, 58150498, 58153934Fax: 9132704

Banani BranchPlot No.71, Block-B, Kemal Ataturk Avenue, Banani, DhakaTel: 9860363, 8861697, 8859518, 8859987, 8861629 Fax: 88-02-9841960

Motijheel Branch(Islamic Banking) 125, Motijheel C/A(1st Floor), Dhaka-1000Tel: 9567286, 9567202, 9567303, 9567262, Fax: 9567701

Aganagar Branch (Rural) “Mahboob Plaza” (1st & 2nd Floor)Aganagar, Keraniganj, DhakaTel: 7772516, 7761133Fax: 7761155

Corporate BranchEunoos Trade Centre (Ground Floor)52-53, Dilkusha C/A, Dhaka-1000Tel: 9567764, 9551444, 9554447, 9564878, Fax: 9571424

Shyamoli Branch ASA Tower (2nd Floor) 23/3 & 23/14, Khilji Road, Block # B, Mohammadpur, Shyamoli, DhakaTel: 8123551, 8112250, 8128678, 8112227, Fax: 8120687

Joypara Branch (Rural) Begum Aysha Shopping Complex(1st Floor), Holding # 222,Joypara PourasavaThana: Dohar, Dist.: DhakaTel: 06223-56040, 56041, 56042Fax: 06223-56040 Ext.-111

Kakrail Branch Toma Tower (1st & 2nd Floor) 77/1, VIP Road, Kakrail, DhakaTel: 9356115, 9356116, 9340852-3 Fax: 9355990

Madhabdi Branch (Rural) Khatian # 28 (1st Floor), Madhabdi Pauroshava, PS & Dist.: NarshingdiTel: 9446127, 9446125 Fax: 9446126

Ashulia Branch (Rural)Helim Shopping Complex(Opposite Fantasy Kingdom Main Gate)Ashulia, DhakaTel: 7788440, 7788420Fax: 7788441

Narayanganj BranchHoling # 26-29, S. M Maleh RoadTanbazar, NarayanganjTel: 7648201, 7648202, 7648203, 7634331, Fax: 7648200

Savar Branch (Rural) Plot # A-109, Bazar Road (1st Floor)Pourasava & P.S. : Savar, DhakaTel: 7743691, 7743692, 7743693, 7743694, Fax: 7743690

Mouchak BranchKarnaphuli Point (1st Floor)70, New Circular Road, Malibagh, Dhaka, Tel: 8333347, 8333676, 8333678, 8333679, Fax: 8333348

Konabari Branch (Rural)Plot # A-147/148, BSCIC I/RUnion: Konabari,P.S.: Joydebpur, Dist.: GazipurTel: 9298840, 9298836, 9298838, 9298839, Fax: 9298837

Tongi Branch (Rural)8/B, Anarkoli Road (1st Floor)Tongi Bazar, GazipurTel: 9816647, 9816648, 9816650-51Fax: 9816649

Bashundhara BranchPlot # 142, Block # BBashundhara R/A, Baridhara, Dhaka-1212Tel: 8401031, 8401032, 8401034-5Fax: 8401033

Sat Mashjid Road BranchADC Empire Plaza (1st & 2nd Floor)Plot # 183 (Old) 91 (New),Road # 22 (Old) 12/A (New)Sat Mashjid Road, Dhanmondi, DhakaTel: 8191167, 8191168, 8191170, 8191171, Fax: 8191169

Mohammadpur BranchAxis Delvista (1st Floor)7/1, Aorongozeb Road, Block-A, Mohammadpur Housing EstateMohammadpur, DhakaTel: 8129649, 8129604, 9101254, 58150961, Fax: 9119583



Pragati Sarani BranchPlot # Ga-25/5/1, ShahjadpurPragati Sarani, Gulshan, DhakaTel: 8899238-9, 8899610, 8899240Fax: 8899208

Mawna SME/Krishi BranchHolding # 1497, Mawna Bazar Road (1st Floor), Sreepur PauroshavaWard # 8, Thana : Sreepur, Dist.: GazipurTel: 068-2552900, 068-2552901Fax: 068-2552902

Tangail SME/Krishi Branch“Noor Plaza”, Holding # 263,Tangail Main RoadWard # 13, Pauroshava &Thana: Tangail, Dist.: TangailTel: 0921-51336, Fax: 0921-62798

Madanpur SME/Krishi Branch Ekata Samabay Super Market (2nd Floor)Mouza: Chanpur, Union: MadanpurThana: Bandar, Dist.: NarayanganjTel: 7648083, 7648081Fax: 7648082

Narsingdi SME/Krishi Branch“Islam Plaza” (1st Floor)Holding # 1, Maddha Kanda Para Sadar Road, Ward # 4, Narsingdi Pauroshava, Thana: Narsingdi Sadar,Dist.: Narsingdi, Tel: 9452082, 9452080Fax: 9452081

Rokeya Sarani Branch“Kusholi Bhaban” Holding # 238/1, West Kafrul, Rokeya Sarani, Mirpur, Ward # 16Dhaka City Corporation,Thana: Sher-e-Bangla NagarDhaka. Tel: 9103249, 9103251, 9103246, 9103247, Fax: 9103248

Islampur Branch“Adel Complex” (1st, 2nd & 3rd Floor)40, Islampur Road, Dhaka - 1100Tel: 57394570, 57396174, 57394538, 57394589, Fax: 57396175

Hemayetpur Branch (Rural)Hemayetpur Super Market (2nd Floor)Mouza: Kulashur, Union: TetuljoraThana: Savar, Dist.: DhakaTel: 7747914, 7747464, 7747915, 7747916, Fax: 7747465

Munshigonj Branch“B. M Complex” (1st Floor)House # 55, Jubillee Road, Ward # 3Munshigonj Pauroshava, Thana: Munshigonj Sadar, Dist.: MunshigonjTel: 7620594, 7620591, 7620592, 7620593, Fax: 7620595

Joydebpur Branch (Rural)Holding # 235, Block # K, Shib Bari MoreB.I.D.C Road, Ward # 3, Gazipur Pauroshova, Thana: Joydebpur,Dist.: Gazipur.Tel: 9252852, 9252851Fax: 9252850

Donia Branch (Rural)“Chowdhury Complex” (1st Floor),Village: Noyapara, Mouza: DhaniaUnion: Dhania, Thana: Demra,Dist.: Dhaka. Tel: 7547955, 7548055Fax: 7548122

Rupnagar Branch“Rangan”, Plot # 14, Road # 11Ward # 7, Rupnagar Residential AreaMirpur Housing Estate, Dhaka City Corporation, Mirpur, DhakaTel: 8031924, 8051981Fax: 8051965

Kamrangirchar Branch (Rural)“Elham Square”, Rony Market RoadMouza: Char KamrangircharUnion: Sultangonj,Thana: Kamrangirchar, Dist.: Dhaka,Tel: 55160210, 55160209 Fax: 55160211

Bhulta Branch (Rural)Bhulta Bus Stand,Union: Golakandail, Thana: Rupgonj, Dist.: NarayanganjMob.: 01755-637195

Dakhin Khan Branch (Rural)“Faisal Mansion”Shah Kabir Mazar RoadVillage: Moshair, Mouza: Uttar KhanUnion: Dakhin Khan Adarsha Union Parishad, Thana: Dakhin Khan,Dist.: Dhaka.Tel: 8953290, 8953292Fax: 8953299

Gopaldi Branch (Rural)Gopaldi Bazar, Union: Sadasadi Thana: Araihazar, Dist.: NarayanganjMob.: 01755-637194

Ati Bazar Branch (Rural)Mouza: Ati, Union: SaktaThana: Keranigonj, Dist.: DhakaTel: 55103281, 55103282Fax: 55103280

Hasnabad Branch (Rural)“Roky Tower”, Hasnabad, Mouza: EkuriaUnion: Subatta, Thana: Keranigonj,Dist.: DhakaMob: 01730-781277

Mohakhali Branch“Bay’s” (1st Floor)50, Mohakhali C/A, DhakaTel: 9882523, 9885712, 9882527, 9885710, Fax: 9885711

Banasree Branch (Rural)Twin Tower, House # 13, Block # C,Main Road, Banasree Project, East Rampura, DhakaMob: 01730-781279

Bandura Branch (Rural)Puraton Bandura BazarMouza: Puraton Bandura,Union: BanduraThana: Nawabgonj, Dist.: DhakaMob: 01730-781278

Sarulia BranchSamsul Haque Nilu Shopping ComplexMouza: Sarulia, Union: SaruliaThana: Demra, Dist.: DhakaMob.: 01730-792169

Kapasia Branch (Rural)Akter MarketKapasia Main RoadThana: Kapasia, Dist.: GazipurMob.: 01766-673597

Mirpur BranchSimpletree Plot # 01, Road # 08, Block-C, Section-06 Mirpur Housing Estate, Pallabi, DhakaMob.: 01766-673595

Ashulia Bazar Branch (Rural)Shahid Sonamia Plaza,Bangabandhu Road Ashulia Bazar, Mouza: Boro AshuliaUnion & Thana: Ashulia, Dist.: DhakaMob.: 01755-630358

Balivadra Branch (Rural)Bhandari Latif Super Market,Balivadra Bazar, Mouza: Ganakbari, Union: DamsonaThana: Ashulia, Dist.: DhakaMob.: 01755-630359

Kalibari Branch (Rural)Sobur Market, Duptara Adorsha BazarSattabhandi Bhuiyan Para (Kalibari)Mouza & Union: Duptara, Thana: Araihazar, Dist.: NarayanganjMob.: 01939-900570

Rajbari Branch“Saleha Akkas Tower” Holding # 237, Binodpur (College Road)Ward # 08, Thana : Rajbari SadarPauroshava : Rajbari, Dist.: RajbariMob.: 01934-448903


Dhanmondi Ladies Branch“Rupayan Khan Plaza”Plot # 500/A (Old) / 18 (New), Road # 7, Dhanmondi R/A, DhakaMob.: 01934-448906

Moghbazar Ladies Branch“Hall Mars”, Holding # 66 (Old)Outer Circular Road, 05 (New) Shahid Sangbadik Salina Parvin SarakBoro Mogbazar, DhakaMob.: 01934-448905

Kazi Nazrul Islam Avenue Branch“Rupayan Trade Centre”114, Kazi Nazrul Islam Avenue, DhakaMob.: 01755-624864

Sherpur BranchMuslim MarketHolding # 166, Shahid Bulbul SarakMunshi Bazar, Ward No.: 02,Pourasava: SherpurThana: Sherpur Sadar, Dist.: SherpurMob.: 01705-403797

Ghior Branch (Rural)Mouza+Union: Ghior, Upazila : Ghior , Dist.: ManikganjMob.: 01705-403799

Balla Branch (Rural)Mouza & Union: BallaP.S.: Kalihati, Dist.: TangailMob.: 01705-403798

Malibagh BranchABN Tower, 45, Siddheswari Circular Road, Dhaka, Mob.: 01787-694948Singair Branch (Rural)Singair New MarketHolding No.: 2/2, Kansha RoadWard No.: 04, Pourasava + P.S.: SingairDist.: ManikganjMob.: 01934-448918

R. K. Mission Road BranchNir Chhayabithi53, 53/1, R. K. Mission Road, DhakaMob.: 01934-448919

Monipur Bazar Branch (Rural)“Isha Chowdhury Tower”Pirozali Road, Monipur BazarUnion: Bhawal Gor, P.S.: Gazipur SadarDist.: GazipurMob.: 01934-448920

CHITTAGONGDIVISION (30)

Agrabad BranchFaruk Mahal, 93, Agrabad Commercial Area, ChittagongTel: 031-721152, 031-713097-8,031-7130 94-5, 031-721151-3Fax: 88-031-713096

Khatunganj Branch410/411, Khatunganj, ChittagongTel: 031-2863594, 031-621934,031-620166-7, 031-620516Fax: 88-031-62 05 17

Jubilee Road Branch96, Jubilee Road, ChittagongTel: 031-635265, 031-611712-5,031-635245, 031-635246Fax: 88-031-611716

Halishahar BranchHouse # 3, Block # GPort Connecting Road, Halishahar Housing EstateHalishahar, ChittagongTel: 031-727949, 031-716826,031-2526183, 031-2526184Fax: 88-031-727949

CDA Avenue Branch(Islamic Banking) Ali Villa, 1640/1861 (New), CDA Avenue Asian Highway, East NasirabadPanchliash, Chittagong Tel: 031-652150, 031-654875,031-2552385-6Fax: 031-2552387

Pahartali BranchHajrat Taiyabia ComplexHolding # 801 (New),D.T Road, Alongkar Mour Abdul Alir Hat, Pahartali, ChittagongTel: 031-2771001, 031-2771002-4Fax: 031-2771005

Cox’s Bazar Branch(Islamic Banking)Asha Shopping Complex 430-431, Bazar Ghata(1st Floor), Cox’s BazarTel: 0341-63406, 0341-51053Fax: 0341-64742

Chhagalnaiya Branch(Islamic Banking)Mir Shopping Complex (1st Floor)Chhagalnaiya Bazar, P.S.: Chhagalnaiya, Feni. Tel: 03322-78302, 78432 Fax: 03322-78302 Ext.-111

Feni BranchSurma Sadan (1st and 2nd Floor), 176, 177 and 178 Trunk RoadThana - Feni Sadar, Dist. - FeniTel: 0331-63004, 62884, 61362, 61852 Fax: 0331-62884 Ext.-102

Bashurhat Branch (Rural)Ayesha Motaleb New MarketHolding # 428, Main Road, Ward # 5, Bashurhat Pauroshava, Companyganj, Noakhali. Tel: 03223-56415, 56461Fax: 03223-56430

Chowmuhani Branch (Rural)Hossain MarketHolding # 276-284, D. B RoadChowmuhani Pauroshava,Thana: Begumganj, Dist.: NoakhaliTel: 0321-53534, 0321-53535,0321-54018, Fax: 0321-54018

Momin Road BranchEquity Central, 42-43, Momin RoadChittagong City CorporationP.S.: Kotwali, Dist.: ChittagongTel: 031-2857345, 031-2857346,031-2857347, 031-2857348Fax: 031-2857349

Madambibir Hat Branch (Rural)Madambibir Hat, Union-BhatiaryP.S.: Sitakunda, Dist.: ChittagongTel: 031-2781001, 031-2781003,031-2781004, 031-2781005Fax: 031-2781002

Comilla Branch359/328, Jhawtala1st Kandir Paar, Thana: Kotwali, ComillaTel: 081-64278, 081-64280,081-64279, 081-61322 Fax: 081-61321

Lohagara SME/Krishi BranchMostafa City Center,Mouza: Amirabad Thana:- Lohagara, Union: Amirabad, Dist.: ChittagongTel: 0303-456623, 01713-065986 (Mob.)Fax: 0303-456624

Brahmanbaria SME/Krishi BranchShikder Plaza, Holding # 1001Dr. Faridul Huda Road, Ward # 4Pauroshava & Thana: BrahmanbariaDist.: BrahmanbariaTel: 0581-58202Fax: 0581-58201



Hathazari SME/Krishi BranchS. A Shopping Complex,Hathazari Bus StandRangamati Road, Plot # 14238,Khatian # 2517, Mouza: Fatika,Union: Fatehpur Thana: - HathazariDist.: Chittagong, Tel: 031-2601855Fax: 031-2601856

Shebarhat SME/Krishi BranchShebarhat Bazar, Mouza – RazarampurFeni Chowmuhani Sarak (1st Floor)Thana – Shenbag, District - NoakhaliTel: 01713-065972

Sonagazi SME/Krishi BranchHolding # 431, Ward #4, Pauroshava & Thana: Sonagazi, Dist.: FeniTel: 03325-76386, 76377Fax: 03325-76386

Oxygen More BranchHolding No.405, KulgaonChittagong City CorporationOxygen Mour, Ward # 2, Thana: Bayezid Bostami, Dist.: ChittagongTel: 031-2584018, 2584019,2584020, 2584059Fax: 031-2584017

Chowdhury Hat SME/Krishi Branch “Halim Mansion”, (1st Floor) Chowdhury Hat, Mouza: Chikandandi Union: Fateyabad,Thana: Hathazari, ChittagongTel: 031-2584007, 031-2584006Fax: 031-2584005

Potherhat Branch (Rural)“Khaiz Ahmed Shopping Centre” (1st Floor), Mouza: Noapara,P.O: Gujra Noapara, Union: 13 No. Noapara, Thana: Raujan, Dist.: ChittagongTel: 031-2573214, 031-2573216,031-2573217, Fax: 031-2573215

Fatikchari Branch (Rural)“Mir Jahanara Complex” (1st Floor)College Road (Bibir Hat),Khatian # 4989, Union: Dhurang,Thana: Fatikchari, ChittagongTel: 030-2256317, 030-2256316Fax: 030-2256315

Kotwali Branch“Equity Anitri” (1st Floor)Holding # 32, Shahid Sohrawardy RoadWard # 33, Chittagong City CorporationThana: Kotwali, Dist.: ChittagongTel: 031-632750, 632751, 632752Fax: 031-632753

Companigonj Branch (Rural)“Saudia Manjil” (1st & 2nd Floor)R.S Khatian # 395, CompanigonjMouza: North Tirish, Union: 15 No. Nobipur (West), Nabinagar Road,Thana: Muradnagar, Dist.: ComillaTel: 08026-59011, 59004Fax: 08026-59017

Chakaria Branch (Rural)“Society Jame Mosque Complex”Mouza: Chiringa, Chakaria PauroshovaThana: Chakaria, Dist.: Cox’s BazarTel: 03422-56161, 03422-56162Fax: 03422-56163

Miabazar Branch (Rural)Haji Siraj MansionMouza: Ashrabpur, Union: 2 No. UjirpurThana: Chauddagram, Dist.: ComillaMob.: 01766-665140

Haidergonj Branch (Rural)Gazi Super MarketHaidergonj Bazar, Mouza: Char AbabilUnion: Char Ababil, Upazila: RaypurDist.: LaxmipurMob.: 01766-673599

Teknaf Branch (Rural)Alo Shopping Complex, PC-177,K K Para, Main Road, Ward No.: 03, Pourashova: Teknaf, Thana: TeknafDist.: Cox’s BazarMob.: 01934-448900

Gunabati Branch (Rural)Mouza: Gunabati, Union: 12 No. GunabatiP.S.: Chouddogram, Dist.: ComillaMob.: 01709-633280

SYLHET DIVISION (12)Laldighirpaar BranchMubarak Tower1794/1788, New Market, SylhetTel: 0821-710955, 0821-715382,0821-710218Fax: 88-0821-710102

Moulvibazar BranchJarif Tower 199/2, M. Saifur Rahman Road, Moulvibazar, Tel: 0861-53727-9Fax: 88-0861-53730

Chouhatta BranchManru Shopping CityPlot # 4953/4943 (1st Floor)Chouhatta Mirboxtola RoadChouhatta, SylhetTel: 0821-720276, 0821-720276 Fax: 88-0821-720276

Shahjalal Uposhahar Branch Plot # 07, Block # D, Main Road,Shahjalal Uposhahar, Sylhet Tel: 0821-713057, 0821-713052,0821-713062, 0821-811655Fax: 88-0821-711820

Bandar Bazar Branch(Islamic Banking)Karimullah Market (1st Floor)Bandar Bazar, SylhetTel: 0821-810322, 812246, 4116495, 4011350, 0821-721243Fax: 0821-2831455

Kulaura BranchAziz Rowshon Shopping Centre and Garden City, Holding No. 334,Ward No. 3, Pourasava: KulauraThana: Kulaura, Dist.: Moulvi BazarTel: 08624-56208Fax: 08624-56208

Hetimgonj Branch (Rural)Khoyruganj Jame Masjid Market Complex (1st Floor)Thana: Golapgonj, Dist.: SylhetTel: 0821-840374, 840373Fax: 0821-840372

Pathantula BranchHaque Mansion of Modina MarketThana: Jalalabad, Dist.: SylhetTel: 0821-728745, 0821-724300Fax: 0821-724300

Tazpur SME/Krishi BranchTazpur Bazar, Mouza: Boraya,Union: 8 No TazpurThana: Balagonj, Dist.: SylhetTel: 08242-56191, Fax: 08242-56191

Biswanath SME/Krishi Branch“Haji Monir Uddin Market” Natun Bazar, Biswanath, Mouza - Mashala, Union/Pourashova: BiswanathThana: Biswanath, Dist.: SylhetTel: 08224-56205

Beanibazar SME/Krishi Branch“Panchakhanda Haragabinda High School Market”834, Beanibazar-Sylhet Road,P.S.: Beanibazar, Dist.: SylhetTel: 08223-56164, Fax: 08223-56165

Charkhai Branch (Rural)Anisha ComplexMouza: Kamar Gram, Union: 2 No. Charkhai, Thana: Beanibazar,Dist.: SylhetMob.: 01766-665141


KHULNA DIVISION (8)

Khulna BranchHaji Hanif Complex 12 & 13, Khan Jahan Ali Road, KhulnaTel: 041-730606, 041-7314 06, 041-731306, 041-731606 Fax: 88-041-731506

Jessore SME/Krishi BranchHolding # 11, R. N. Road, Ward # 2Pauroshava: Jessore, Kotwali, JessoreTel: 0421-67683,Fax: 0421-68094

Satkhira SME/Krishi BranchHolding # 5896, Polash Pole, (1st Floor)Shahid Nazmul Sarak(Satkhira Old Bus Stand)Ward # 08, Satkhira Paurashava Thana: Satkhira, Dist.: SatkhiraTel: 0471- 63568, 62508Fax: 0471- 63569

Sir Iqbal Road Branch“Noor Jahan Plaza”155, Sir Iqbal Road, KhulnaTel: 041-721056, 731848, 724471Fax: 041-722852

Rupdia Bazar Branch (Rural)“Bhowmik Super Market”, Mouza: Zirat, Union: 12 No. Norendrapur P.S.: Jessore Sadar, Dist.: JessoreMob.: 01709-633282

Dumuria Branch (Rural)R. R. Plaza, Mouza: Araji SajiyaraUnion: 11 No. Dumuria P.S.: Dumuria, Dist.: KhulnaMob.: 01705-403796

Kushtia BranchAneek Tower295, Nowab Sirajuddoula RoadWard # 03, Pauroshava : KushtiaP.S.: Kushtia Sadar, Dist.: KushtiaMob.: 071-71845, 071-71895

Chuadanga Branch“Brothers Tower”Holding No.: 686-06, Thana RoadWard No.: 03, Pourasava: ChuadangaP.S.: Chuadanga Sadar, Dist.: ChuadangaMob.: 01934-448917

RAJSHAHI DIVISION (9)

Bogra Branch Bhandari Manjil (2nd Floor)776-777 Barogola, BograTel: 051-68083, 68084, 68085, 68086 Fax: 051-51939

Rajshahi BranchPlot # 447, Mangol Bhaban (2nd Floor)Alupatti Mour, P.O.: GhoramaraP.S: Boalia, Dist.: RajshahiTel: 0721-812203, 0721-812204,0721-812205, 0721-812206 Fax: 0721-812207

Naogaon Branch“Kazi Habibur Rahman Market” Old Hospital Road (Bridge Mour)Pauroshava: Naogaon, Thana: Naogaon Sadar, Dist.: NaogaonTel: 0741-63227, 0741-63286, 0741-63397, 0741-61274Fax: 0741-61831

Chapainawabganj BranchHolding # 8, Boro Indara More,Ward # 15, Chapainawabganj Municipal Corporation, Thana: Nawabganj SadarDist.: ChapainawabganjTel: 0781-51717, 0781-51718 Fax: 0781-51716

Sirajganj BranchBasak Plaza947-948, Shaheed Suharawardy Road, Sirajganj,Mob.: 01766-665142

Baneshwar Branch (Rural)Al-Haj Amzad Hossain MarketMouza: Shibpur, Union: BaneshwarThana: Puthia, Dist.: Rajshahi Mob.: 01766-673596

Pabna Branch “Khairul Tower”116, Mawlana Mohammed Ali Road (Narikel Bagan Road), Ward # 3 (Shibrampur) Pabna Pauroshava,Thana: Pabna Sadar, Dist.: PabnaMob.: 0731-65027, 65032, 65059, 65073Fax: 0731-65089

Ishwardi Branch“Adib Rana Plaza” 994/930 &1017, Station RoadWard # 07, Thana: IshwardiPauroshava: Ishwardi, Dist.: PabnaMob.: 01787-678778

Natore Branch“Lily Plaza”, Holding No.: 838, Kanaikhali Ward No.: 04, Pourasava: NatoreP.S.: Natore Sadar, Dist.: NatoreMob.: 01712-803701

RANGPURDIVISION (2)

Rangpur BranchRDRS ComplexHolding # 9416, Jail Road, Radhaballab, RangpurTel: 0521-64672, 64673, 64778, 64779Fax: 0521-64780

Dinajpur BranchHolding # 808/837, GaneshtolaJail Road, Dinajpur Municipal Corporation, Ward # 3, Thana: Kotwali, Dist.: DinajpurTel: 0531-52025, 0531-52026Fax: 0531-52024

BARISALDIVISION (1)

Barisal Branch54 Sadar Road (1st Floor)Kotwali, BarisalTel: 0431-2176601, 0431-2176602, 0431-2176603-04Fax: 0431-64056

MYMENSINGH DIVISION (2)

Mymensingh Branch“Minar Complex”, Holding # 09Mukti Joddha Sarani (Choto Bazar)Ward # 08, Pauroshava: MymensingThana: Kotwali Sadar, Dist.: MymensingMob.: 01934-448904

Off-Shore Banking Unit, DEPZZone Servicing Building-1Room # 77 (3rd Floor),Dhaka EPZ, Ganakbari,Savar, Dhaka, Tel: 7788628-9

Off-Shore Banking Unit, CEPZZone Service Complex (1st Floor)East Wing North Chittagong EPZChittagong, Tel: 031-740780Fax: 031-740779



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Dhaka DivisionCorporate Br. ATMEunoos Trade Centre (Ground Floor), Plot #52-53, Dilkusha C/A, Dhaka-1000

Uttara Br. ATM-ATM-1- Sector-1House #1, Road #11, Sector #1, Uttara, Dhaka-1230

Gulshan Br. ATMHouse #82 CES (F)1, Gulshan Avenue Dhaka

Dhanmondi Br. ATMHouse#23 (New), Road#16 (New)/ 27(Old), Dhanmondi R/A, Dhaka

Pragati Sarani Br. ATMPlot No. GA - 25/5/1, Shahjadpur Pragoti Sarani, Gulshan, Dist.: Dhaka

Banani Br. ATMPlot #71, Block #B, Kamal Ataturk Avenue, Banani, Dhaka

Dhonia Br. ATMChowdhury Complex” (1st & 2nd Floor) 440-441, Noyapara, Donia, Jatrabari, Dhaka - 1236

Mouchak Br. ATMKarnaphuli Point (1st Floor), 70 New Circular Road, Malibagh, Dhaka

Madobdi Br. ATMMadhabdi Pauroshava, Thana: Narsingdi, Dist: Narsingdi

Savar Br. ATMPlot # A -109, Bazar Road (1st Floor), Pauroshava & P.S.: Savar, Dhaka

Rokeya Sarani Br. ATM“Khusholi Bhaban”, Holding # 1, West Kafrul Rokeya Sarani, Ward # 16, Dhaka City Corporation, Thana: Sher -e-Bangla Nagar, Mirpur, Dhaka

Basundhara Br. ATMPlot#142, Block# B, Bashundhara R/A, Baridhara, Dhaka -1212

Hemayetpur Br. ATMHemayetpur Super Market(2nd Floor), Thana: Savar,District: Dhaka

Ashulia Br. ATMHelim Shopping Complex,(Opposite Fantasy Kingdom), Ashulia, Dhaka

Konabari Br. ATMPlot # A-147/148, BSCIC I/R,Union: Konabari, P.S. - Joydebpur,Dist - Gazipur

NSU ATMNorth South University Campus ATM Booth Plot 15, Block-B,Bashundhara, Dhaka-1229

Narayanganj Br. ATMHolding #44, Mohim Ganguly Road, Taan Bazar, Narayanganj

Uttara - ATM-2, Sector 14Plot No:20, Road No: 12,Sector No: 14, Uttara ResidentialModel Town, Dhaka-1230

ACS Textile ATMACS Textiles (Bangladesh) Limited, Tetlabo, Word No: 03, P.O: Parabo, P.S: Rupgonj, Narayanganj

Elephant Road-ATM-1Concord ArcadiaConcord Arcadia Shopping Mall, Plot No. 1 & 2, Road No: 04, Dhanmondi Residential Area, Dhaka

Green Road-Comfort Hospital ATM167, Green Road(Besides Comfort Hospital)

Bhulta Br. ATMBhulta Bus Stand, Union: Golakandail, Thana: Rupgonj, Dist.: Narayanganj

DokkhinkhanFaisal Mansion, Shah Kabir Mazar Road, P.S # Dakshin Khan, Dhaka

JoydebpurTaj Tower,82, Shibbari more,Joydebpur, Gazipur

New Eskaton ATM-1Chowdhury Center, 23/Ka,New Eskaton Road (1st Floor),P.S.: Ramna, Dhaka - 1000

Shimanto Square ATMShimanto Square Market, BGB, Dhanmondi-02, Dhaka-1205

Bakshi Bazar, Bagshal-ATMDhaka Medical City Corporation Market, Shop No-50, Bakshi Bazar, Dhaka

Mohammadpur Br. ATMAxis Delvista (1st .Floor), Holding No:7/1, Block - A, Aurongajeb Road, Mohmmadpur Housing Estate, Mohammadpur

Principal Br. ATMHolding No: 1, Dilkusha C/A, Dilkusha Road, Annex Building Hotel Purbani International, Ward: 32, Motijheel Thana, Dhaka City Corporation, Dhaka

Aganagar Br. ATMP.S.: Keraniganj, Mouza: Subadda, Din Complex, Kodomtoli Circle, Keranigonj, Dhaka

Pirjongi Mazar ATMPirjongi Shah Mazar,Motijheel Coloney Jamee Masjid Complex Market, Shop No# 08,Pirjongi Shah Mazar, Outer Circular Road, Paltan Thana, Dhaka City Corporation, Dhaka.

Elephant Road, ATM-2, HatirpoolHolding No # 149/1, Elephant Road (Presently- Dr. Kudrat -e- Khuda Road), Thana # Kalabagan, Dhaka

Dholaipar ATM169/A/2 Dolaipar, Dhaka-1204

Tangail Br. ATMNoor Plaza, Holding # 263,Main Road, Tangail-1900

Satmasjid Road Br. ATMADC Empire Plaza, Holding No# 91, Road No# 12/A, Satmasjid Road, Dhanmondi, Dhaka

Boro Mogh Bazar ATMShitol Bhaban625, Boro Moghbazar, Red Crescent Road, Dhaka City Corporation,Ramana Thana, Dhaka

Shahabuddin Medical College ATMShahabuddin Medical College,Plot No-12, Road No-113/A,Gulshan Model Town, Gulshan-2, Dhaka-1212

Kapasia Br. ATMAkhter Market, 874, Kapasia Main Road, Village: Kapasia, Mouza: Banar Hawla, Union : Kapasia, Kapasia Thana,District : Dhaka

Farr Ceramics ATM“Farr Ceramics”,Noulapara (Bhabaniur), Monipur,Union: Vaoalergor,Gazipur Sadar Thana, Gazipur

Hasnabad Br. ATMRocky Tower, Subatta, Keranigonj Thana, Dhaka

Kamrangirchar Br. ATMAt the ground floor of Rony Market Bhaban, Holding No. 648-649,Rasulpur, Market Road,Ward No. 56,Dhaka South City Corporation, Kamrangirchar Thana, Dhaka



Rupnagar Br. ATM“Rangan”, Plot # 14, Road # 11,Ward # 7, Rupnagar Residential Area,Mirpur Housing Estate, Dhaka City Corporation,Thana: Mirpur, Dist.: Dhaka

MBA Bhaban ATMAt the ground floor of Administrative Building, Faculty of Business Studies, University of Dhaka, Shahabag Thana, Dhaka South City Corporation, Dhaka-1000

Bhulta-ATM-2Panchrukhi Bazar, AraihazarMP Tower Building, Panchrukhi Bazar, Araihazar, Mouza Name: Panchrukhi, Union : Panchrukhi, Araihazar Thana, District : Narayangonj

Ashulia Bazar Br. ATM“Shahid Sonamia Plaza”, Ashulia Bazar, Bangobondu Road, Ashulia Union, Ashulia Thana, Dhaka

Kalibari Br. ATM“Sabur Market”, Dhuptara Adarsha Bazar, Kalibari, Village: Shapta Bandi Bhuyian Para, Mouza: Dhuptara, Union: Dhuptara Union Parishad, Thana: Araihazar, District: Narayangonj

Balivhadra Br. ATM“Vhandari Latif Super Market”, Village: Balivhadra Bazar, Mouza: Ganakbari, Union: Swanirvar Damsona Union Parishad, Thana: Ashulia, District: Dhaka

Mirpur Br. ATM“Simpletree” Plot # 01, Road # 8, Section # 6, Mirpur, Ward # 6, Dhaka City Corporation, Thana: Pallabi, District: Dhaka under the supervision of Mirpur Branch, Dhaka

Tongi Br. ATM“Kazi Market”, Holding No: 8/B, Anarkoli Road, Ward No: 57, Gazipur City Corporation, Thana:Tongi, Gazipur.

Rajbari Br. ATM“Saleh Akkas Tower”, Holding # 237, Binodpur (College Road), Ward # 08, Rajbari Porusova, Rajbari Sadar Thana, Dist.-Rajbari.Mymensignh Br. ATMMinar Complex, Holding No: 09, Moktijodda Sarani (Choto Bazar), Ward No: 08, Mymensingh Porosuva, Kotwali Sadar Thana, District: Mymensingh

BTI Premier Plaza- ATM“bti Premier Plaza”, Holding No: Plot: Cha 90/A, Pragoti Sarani, Badda Road, Dhaka North City Corporation, Gulshan Thana, Dhaka..

Malibag Br. ATM“Fakhr-E-Nur ABN Tower”, Holding # 45, Siddeswari Circular Road, Ward No: 19, Ramna Thana, Dhaka South City Corporation, Dhaka.

Joydebpur, ATM-2“OK Tower”, Holding No: F-214/10, Hakkani Housing Society,Rajbari-Jourpukur Road, Ward No: 28, Gazipur City Corporation, Joydebpur Thana, District: Gazipur

Balla Br. ATMBalla, Mouza :Balla, Union:Balla, Thana: Kalihati, District: Tangail

Ghior Br. ATMGhior, Union: Ghior, Thana: Ghior, District: Manikganj

Navana New Bury ATM“Navana Newbury Place”, Road/Holding No.4/1/A, Area: Subhanbagh, Mirpur Road, Ward No.17, Kalabagan Thana, Dhanmondi-1213, Dhaka South City Corporation, Dhaka

Latif Bawany Jute Mills ATMLatif Bawany Jute Mills Ltd. Demra, Dhaka.

Wari Br. ATM4/2 Joykali Mondir, Wari, Dhaka

Imamganj Br. ATMBhuiyan Market, 163/2,Metford Road, Dhaka

Agargaon Br. ATM248-1/G, West Agargaon,Sher-e-Bangla Nagar, Dhaka

Singair Br. ATM“Singair New Market”, Holding # 02/02, Kansha Road, Singair Bazar, Singair Pauroshava, Ward # 04,Upazilla/Thana: Singair,District: Manikganj

ChittagongDivision

Halishahar Br. ATMHouse # 03, Block - G, Port Connecting Road, Halishahar Housing Estate, Halishahar, Chittagong

Agrabad Br. ATMJahan Building, 59, Agrabad Commercial Area, Chittagong

Oxygen Moor Br. ATM405, Kulgao, Oxygen More, Biozid Bostami, Chittagong

Potherhat Br. ATMKhaiz Ahmed Shopping Centre”(1st Floor), Raujan,Chittagong

Jubilee Road Br. ATMHaji Golam Rasul Market,96 Jubilee Road, Chittagong.

CDA Avenue ATM 1 & 2Ali Villa, 1640/1861 (New),CDA Avenue, Asian Highway,East Nasirabad, Thana - Panchliash, Dist.: Chittagong

Chakaria Br. ATM“Society Jame Mosque Complex”, Chiringa, Chakaria Pauroshova,Thana: Chakaria, Dist.: Cox’s Bazar

Hathazari Br. ATMS. A. Shipping Complex Hathazari Bus Stand, Ranganati Road, Plot # 14238, Thana: Hathazari, Dist: Chittagong

Basurhat Br. ATMKabirhat Road, Basurhat Bazar , Basurhat Pourusava, PS: Companygonj, Dist. Noakhali

Companyganj Br. ATMSaudia Manjil (1st & 2nd Floor), Nabinagar Road, Thana: Muradnagar, Dist.: Comilla

Chowdhury Hat Br. ATMS.N. Tower, Dadaram Sharok Road, Chowdhury Hat Bazar

Chowmuhani Br. ATMTara Manjil, Holding No# 72, Feni Road, Hajipur, PS# Begumgonj, Chowmuhani Pourashava, Noakhali

Cox’s Bazar Br. ATMM&M Shopnaloy, Plot# A-12, Kolatoli, Main Road, Cox’s Bazar

Mia Bazar Br. ATMHazi Siraj Mansan, Chowddrogram Thana, Comilla

Haidergonj Br. ATMKazi Super market,Haidergonj Bazar,Mouza-Char Ababil,Union-Char Ababil, Raipir, Laxmipur

Fatikchari Br. ATMMir Jahanara Complex, College Road, Bibirhat, Mouza : North Dhurung, Thana: Fatikchari, Chittagong

Madambibir Hat Br. ATMMadambibir Hat Union, Bhatiary, P.S.: Sitakunda, Dist. :Chittagong


Shebarhat Br. ATMJahanara & Sons Market, Mouza: Raja Rampur, Union : 7 No Mohammadpur, Senbagh Thana, Noakhali

Teknaf Br. ATM“Alo Shopping Complex’, Teknaf Pauroshova, Ward No # 03, Thana: Teknaf, District: Cox’s Bazar

Tareque Medical Hospital ATM“Tareque Memorial Hospital Complex”, Dhaka-Chittagong old Main Road (Banshpara), Chhagalniya Thana, Feni

Coral Reef ATM“Coral Reef Mannan Plaza”, Main Road, Bazar Ghata, Cox’s Bazar City Corporation, Sadar -Cox’s Bazar Thana, District: Cox’s Bazar.

Momin Road Br. ATM“Equity Central”, Holding No: 42-43, Momin Road, Ward No: 32, Chittagong City Corporation, Thana: Kotwali, Chittagong..

Gunabati Br. ATMGunabati Bazar”, Village: Gunabati, Thana: Choddogram, District: Comilla

Kotwali Br. ATM“Equity Anitri”, Holding No: 32, Hossain Shahid Sarwardi Road, Chittagong City Corporation, Kotwali Thana, Chittagong.

Sylhet DivisionRagib Rabeya Medical College and Hospital ATMJalalabad Ragib-Rabeya Medical College and Hospital, Road: Sunamgonj, Pathantula, Sylhet -3100

Shahjalal UposharBlock# D, Main Road, Shahjalal Uposhahar, Sylhet

Moulvibazar Br. ATMJarip Tower, 199/2, Road No: 59,Central Road (Saifur Rahman Road), Thana : Moulvibazar, Moulvibazar

VIP Tower ATMVIP Tower, Plot No: 3714, VIP Road Sylhet, Sylhet City Corporation, Kotwali Than, Sylhet

Kazirtula ATMMujibur Rahman Complex, Holding No: 1469, 1470, 1471, 1472, Kazirtula Main Road, Kotwali Than, Sylhet

Kulaura Br. ATMAziz Rowshon Shopping Center & Garden City, Kulaura Pourashava, Kulaura Thana, District: Moulvibazar

Khulna DivisionKhulna Br. ATMHaji Hanif Complex (1st floor), 12 & 13, Khan Jahan Ali Road, Khulna.

Sir Iqbal Road Br. ATM155, Sir Iqbal Road, Khulna (Thanar Moor)

Satkhira Br. ATM896, Palash Pole (Ground Floor), Shahid Kajal Sarak (Satkhira Bus Stand), Satkhira Pouroshova, Thana: Satkhira, District: Satkhira

Jessore Br. ATM11, R.N. Road, Thana: Kotwali, Dist.: Jessore

Rupdia Br. ATMBhoumik Super Market, Rupdia Bazar, Vill: Zirat, Union: 14 no Narendropur, Jessore

Dumuria Br. ATM“R.R. Plaza”, Village: Araji Sajiara, Mouza: Araji Sajiara, Union: 11 No. Dumuria Union, Thana: Dumuria, District: Khulna.

Kahishpur Jute Mills ATM Khalishpur Jute Mills Ltd. Khalishpur, Khulna

Eastern Jute Mills ATMEastern Jute Mills Ltd. Atra Industrial Area, Khulna.

Kushtia Br. ATMAneek Tower, 295, Nowab Sirajuddoula Road Ward # 03, Pauroshava : Kushtia P.S.: Kushtia Sadar, Dist.: Kushtia

Chuadanga Br. ATM“Brothers Tower”, Holding # 0686-06, Thana Road, Chuadanga Pauroshava, Ward # 03, Thana: Chuadanga Sadar, District: Chuadanga

Rajshahi DivisionChapainawabgonj Br. ATMBoro Indara More, Chapainawabganj

Bogra ATM-1Mofiz Paglar Moor, Bogra

Naogaon Br. ATMShahid Matiul Isalm Poura Market, Naogaon Pourashava, Thana: Naogaon sadar, Dist.: Naogaon

Rajshahi ATM-1, LaxmipurHolding No: 634, Sher-Sha Road, Laxmipur, Rajshahi

Bogra, Borogola ATM288/325, 289/326, Jamil Shopping Center, Borogola, Rangpur Road, Bogra

Baneswar Br. ATM“Alhaj Amjad Hossain Market”, Village: Kolahata, Mouza: Shibpur, Union: Baneswar, Thana: Potia, District: Rajshahi

Rajshahi-ATM-2Uposhahar New Market, RajshahiUposhahar New Market, Holding No: 10, Ward No: 14, Rajshahi City Corporation, Boalia Thana, Rajshahi

Rajshahi-ATM-3Greater Road, RajshahiGreater Road, Ward No: 13, Rajshahi City Corporation, Boalia Thana, Rajshahi

Rajshahi-ATM-4Natore Road, RajshahiRokeya Bhaban, Holding No: 219, Natore Road, Ward No: 22, Rajshahi City Corporation, Boalia Thana, Rajshahi

Pabna Br. ATMKhairul Tower, Maowlana Mohammad Ali Road (Narikel Bagan Road), Ward No: 03 (Shibrampur), Pabna Porosuva, Pabna Sadar Thana, District: Pabna

Iswardi Br. ATMHolding # 994/930 & 1017, Ishwardi Porosova, Ishwardi Thana,District: Pabna

Rangpur Division

Dinajpur Br. ATMHolding # 880/837, Ganesh Tola Jail Road, Dinajpur Municipal Corporation, Ward # 3, Thana: Dinajpur Sadar,Dist: Dinajpur

Rangpur Shah Murad Complex, RK Road, Medical Moor, Rangpur

Barisal Division

Nazirerpool ATMHolding No: 1367-000, Birsreshta Captain Mohiuddin Jahangir Sarok (Nazirerpool), Ward No: 19, Barisal City Corporation, Kotwali Thana, Barisal

Sadar Road ATMHolding No: 241, Sadar Road (Opposite of Barisal Zila School), Ward No: 10, Barisal City Corporation,Kotwali Thana, Barisal.



Memories of 21st AGM



ALGERIA CITIBANK N.A. ALGERIA

ARGENTINAHSBC BANK ARGENTINA SABANK OF TOKYO-MITSUBISHI LTD.BNP PARIBAS SUCURSHL

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AUSTRIA

BANK AUSTRIA AG CREDITANSTALTBANK AUSTRIA AG COMMERZBANK AG, NIEDERLASSUNG WIEN WIENCITIBANK INTERNATIONAL PLC - AUSTRIA BRANCHCREDIT AANSTALT AGRAIFFEISENLANDESBANK NIEDEROESTERREICH-WIEN AG

BAHRAIN

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BANGLADESH

BANGLADESH BANKAB BANK LIMITEDAGRANI BANK LIMITEDAL-ARAFAH ISLAMI BANK LTDBANGLADESH COMMERCE BANK LTD.BANGLADESH DEVELOPMENT BANK LIMITED (BDBL)BANGLADESH KRISHI BANKBANK ASIA LTDBASIC BANK LIMITEDBRAC BANK LIMITEDCITIBANK N.A.CITY BANK LIMITED THECOMMERCIAL BANK OF CEYLONDHAKA BANK LIMITEDDUTCH-BANGLA BANK LTDEASTERN BANK LTD.EXPORT IMPORT BANK OF BANGLADESH LTDFIRST SECURITY ISLAMI BANK LIMITEDTHE FARMERS BANK LIMITEDHABIB BANK LTD.HONGKONG AND SHANGHAI BANKING CORPORATION LTD, THEICB ISLAMIC BANK LIMITED

Worldwide CorrespondentsNetwork


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BELGIUM

BANK OF TOKYO-MITSUBISHI LTD.BNP PARIBAS S.A.CBC BANQUE S.A.COMMERZBANK AGDEXIA BANK SAFORTIS BANQUE S.A/NVFORTIS BANQUE S.A/NV (HEAD OFFICE)ING BELGIUM NV/SAKBC BANK NVKBC BANK NVSUMITOMO MITSUI BANKING CORPORATION SYDNEY BRANCHUNION BANK OF INDIAKBC BANK NV

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CANADA

BANK OF NOVA SCOTIABANQUE NATIONALE DU CANADABNP PARIBAS CANADA, MONTREALBNPPARIBAS CANADABANK OF MONTREAL, THEHABIB CANADIAN BANK



HSBC BANK CANADAICICI BANK CANADAINTESABCI S.P.ASTATE BANK OF INDIATORONTO-DOMINION BANK

CAMBODIA SHINHAN KHMER BANKCHILE SCOTI SUD AMERICANO

CHINA

ANSHAN CITY COMMERCIAL BANKAXIS BANK LIMITED SHANGHAI BRANCHBANK OF CHINABANK OF COMMUNICATIONSBANK OF DALIANBANK OF HEBEI (FORMERLY SHIJIAZHUANG CITY COMMERCIAL BANK)BANK OF JIANGSU CO LTDBANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.BANK OF TOKYO-MITSUBISHI LTD.BANK OF JINHUA (FORMERLY JINHUA CITY COMMERCIAL BANK)BANK OF TIANJIN CO., LTD.BANK OF HUZHOU CO.,LTDBNP PARIBAS (SUISSE) SABSI SACHINA DEVELOPMENT BANKCHINA MERCHANTS BANKCHINA CITIC BANKCHINA EVERBRIGHT BANK LTDCITIBANK N.A.CITIBANK N.A.HANGZHOU UNITED RURAL COMMERCIAL BANK CO.LTDHSBC BANK,THEHUA XIA BANKJANGSU JIANGNAN RURAL COMMERCIAL BANK CO. LTD.INDUSTRIAL AND COMMERCIAL BANK OF CHINAICICI BANK, CHINAING BELGIUM NV/SA, BRUSSELS, GENEVA BRANCH (FORMERLY BBL BRUXELLES, SUCCURSALE DE GENEVE)INTESABCI S.P.AIANGSU JIANGNAN RURAL COMMERCIAL BANK CO.,LTD.(FORMALY JIANGSU WUJIN RURAL BANK)JPMORGAN CHASE BANK (CHINA) COMPANY LIMITEDJPMORGAN CHASE BANK (CHINA) COMPANY LIMITEDJPMORGAN CHASE BANK (CHINA) COMPANY LIMITEDKBC BANK NVLINSHANG BANK CO. LTD (FORMERLY LINYI CITY COMMERCIAL BANK CO., LTD)MIZUHO CORPORATE BANK (CHINA),LTD.MIZUHO CORPORATE BANK LTDNINGBO YUYAO RURAL COOPERATIVE BANKPOSTAL SAVINGS BANK OF CHINASTANDARD CHARTERED BANK, CHINASWEDBANK ABYANTAI BANK CO., LTD.ZHEJIANG NANXUN RURUAL COOPERATIVE BANK

CHINA

STANDARD CHARTERED BANKSUMITOMO MITSUI BANKING CO.THE BANK OF NEW YORK MELLON, SHANGHAI BRANCHWOORI BANK (CHINA) LIMITEDYINZHOU BANKWELLS FARGO BANK, NA, SHANGHAI BRANCH (FORMERLY KNOWN AS WACHOVIA)BANK OF CHINABANK OF CHINAICICI BANK LIMITED


ZHEJIANG ZHUJI RURAL COMMERCIAL BANK COMPANY LIMITEDZHEJIANG SHAOXING COUNTY RURAL COOPERATIVE BANKJIANGSU WUJIANG RURAL COMMERCIAL BANKWOORI BANK SHANGHAI BRANCH (RETAINED BRANCH)

CAYMAN ISLANDSNORDEA BANK FINLAND PLCHSBC BANK BRASIL S.A. - BANCO MULTIPLO (GRAND CAYMAN BRANCH)

FINLAND

SVENSKA HANDELSBANKENDANSKE BANKPOHJOLA PANKKI OYJ (POHJOLA BANK PLC)PART OF DANSKE BANK GROUP)

DENMARK

DANSKE BANK A/SNORDEA BANK DENMARK A/SNORDEA BANKSYDBANK A/SUNIBANK A/S

EGYPTCREDIT AGRICOLE EGYPTCITIBANK CAIROMASHREQ BANK

FRANCE

INTESA SANPAOLO SPABANCO DE SABADELL S.ABANK OF TOKYO-MITSUBISHI LTD.BNP-PARIBUS SABANQUE PALATINECOMMERZBANK AGCREDIT AGRICOLE INDOSUEZ.CREDIT AGRICOLE SAHSBC FRANCE (FORMERLY HSBC CCF)KBC BANK NV PARISMIZUHO CORPORATE BANK LTDSUMITOMO MITSUI BANKING CO.UNION DE BANQUES ARABES.ET

GERMANY

KBC BANK DEUTSCHLAND AGAKBANK AGBANK OF TOKYO-MITSUBISHI LTD.LANDESBANK BADEN-WUERTTEMBERGBANK OF TOKYO-MITSUBISHI LTD.BAYERISCHE HYPO-UND VEREINS BANKBNP PARIBAS DEUTCHLANDJPMORGAN CHASE BANK, N.ACITIBANK N.A.COMMERZBANK AG

GERMANY

COMMERZBANK AGCOMMERZBANK AGCOMMERZBANK AGDANSKE BANKDEUTSCHE BANK AGDEUTSCHE BANK AGDEUTSCHE BANK PRIVAT-UND GESCHAEFTSKUNDEN AGDRESDNER BANK AGFORTIS BANK, NIEDERLASSUNG DEUTSCHLANDHSBC TRINKAUS UND BURKHARTDHSBC TRINKAUS UND BURKHARDT AGHSH NORDBANK AG (MERGER OF HAMBURGISCHE LANDESBANK AND LANDESBANK SCHLESWIG-HOLSTEIN)ING BHF-BANK AKTIENGESELLS ING BHF-BANK AKTIENGESELLS CHAFTING BHF-BANK AKTIENGESELLS CHAFTINTESABCI S.P.AJ.P.MORGAN CHASE BANK



GERMANY

JPMORGAN CHASE BANK, N.A., FRANKFURT BRANCHKBC BANK NV NIEDERLASSUNG DEUTSCHLANDMAINZER VOLKSBANK E.G.MIZUHO CORPORATE BANK, LTD., DUESSELDORF BRANCHNASSAUISCHE SPARKASSENORDEA BANK FINLAND PLC NIEDERLASSUNG DEUTSCHLANDSEB AGSHINHAN BANK EUROPE GMBHSPARKASSE KOELNBONN (FORMER STADTSPARKASSE KOELN)SPARKASSE KREFELDSTADT-UND KREISSPARKASSE LEIPZIGSUMITOMO MITSUI BANKING CORPORATIONSPARKASSE HERFORD, COMMERCIAL AND SAVINGS BANKSTANDARD CHARTERED BANKSYDBANK A/SVEREINS-UND WESTBANKWGZ BANK AG WESTDEUTSCHE GENOSSENSCHAFTS-ZENTRALBANKKREISSPARKASSE STEINFURTWESTFALENBANK AG

GREECE EGNATIA BANK S.A .GUYANA HSBC BANK BRASIL S.A. - BANCO MULTIPLO (GRAND CAYMAN BRANCH)

HONG KONG

AXIS BANK LIMITEDAB INTERNATIONAL FINANCE LTDBANCO SANTANDER, S.A. HONG KONG BRANCHBANK OF AMERICA, N.A. HONG KONGBANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.BANK OF TOKYO-MITSUBISHI UFJ, LTD., THEBANCA MONTE DEI PASCHI DI SIENA SPA - BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCHBANK ONE, N.A.BNP PARIBASCITIBANK (HONG KONG) LIMITEDCITIBANK N.A.COMMERZBANK AGDBS BANK (HONG KONG) LIMITEDDEUTSCHE BANK AGEBL FINANCE (HK) LIMITEDHANG SENG BANK LIMITEDHBZ FINANCE LTD.HSBC, HONG KONGICICI BANK LTDINTESA SANPAOLO SPA HONG KONGINDUSTRIAL AND COMMERCIAL BANK OF CHINAINDUSTRIAL BANK OF KOREA, HONG KONG BRANCHJPMORGAN CHASE BANK, N.A., HONG KONG BR.KBC BANK NV, HONG KONGMASHREQ ASIA LTD.MIZUHO CORPORATE BANK LTDNATIXIS (FORMERLY NATEXIS BANQUES POPULAIRES)SHINHAN ASIA LTD.SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) HONG KONG BRANCHSTATE BANK OF INDIASTANDARD CHARTERED BANKSUMITOMO MITSUBI BANKING CO.THE BANK OF NEW YORK MELLON, HONG KONG BRANCHUBAF UNION BANK OF ARABIESUNICREDIT BANK AG HONG KONG BRANCH (HYPOVEREINS BANK HONG KONG BRANCH)


UNICREDIT BANK AG HONG KONG BRANCH (HYPOVEREINS BANK HONG KONG BRANCH)WELLS FARGO BANK, N.A.WOORI BANK, HONG KONG

HUNGARYUNICREDIT BANK HUNGARY ZRT.CITIBANK EUROPE PLC HUNGARIAN BRANCH

INDIA

AXIS BANK LIMITEDARAB BANGLADESH BANKBANK OF AMERICA, N.A. MUMBAIBANK OF NOVA SCOTIA, THEBANK OF TOKYO-MITSUBISHI LTD.BANK OF TOKYO-MITSUBISHI LTD.CITIBANK N.A.DEUTSCHE BANK AGHDFC BANK LIMITEDHSBC BANK,THEICICI BANK LIMITEDINDUSTRIAL BANK OF INDIAJPMORGAN CHASE BANKMASHREQ BANKMIZUHO CORPORATE BANK LTDPUNJAB NATIONAL BANKSHINHAN ASIA LTD.SONALI BANKSTANDARD CHARTERED BANKSUMITOMO MITSUI BANKING C0.UNION BANK OF INDIAUNITED BANK OF INDIAUTI BANK LTD

INDONESIA

BANK BNP PARIBAS INDONESIAANZ PANIN BANK, P.T.BANK DBS INDONESIA, PTBANK MEGA PTBANK NEGARA INDONESIA - PT (PERSERO)BANK OF NEGEAR BANK OF TOKYO-MITSUBISHI LTD.BANK RAKYAT INDONESIACITIBANK, N.A.JPMORGAN CHASE BANK, N.AHSBC BANK,THEPT BANK OCBC NISP TBKSTANDARD CHARTERED BANKWOORI BANK, INDONESIA P.T. JAKARTA

IRANBANK SADERAT IRANBANK MELLI IRAN

IRELAND

ABN AMRO BANK NVCITIBANK N.A.WELLS FARGO BANK INTERNATIONALNATIONAL IRISH BANK (PART OF DANSKE BANK GROUP)

ITALY

UGF BANCA SPABANCA ANTONVENETA SPABANCA CARIM-CASSA DI RISPARMIO DI RIMINI SPABANCA CARIPE SPA (BANCO POPOLARE GROUP)BANCA COMM.ITALIANABANCA DELLE MARCHE SPABANCA DI CIVIDALE S.P.A.BANCA DI TRENTO E BOLZANO S.P.A.BANCA MONTE DEI PASCHI DI SIENA S.P.A.BANCA POPOLARE DI SONDRIOBANCA NAZIONALE DEL LAVORO S.P.A.



BANCA NUOVA SPABANCA POPOLARE DE VERONABANCA POPOLARE DELL'EMILIA ROMAGNABANCA POPOLARE DI CREMA S.P.A. (BANCO POPOLARE GROUP)BANCA POPOLARE DI CREMONA SPA (BANCO POPOLARE GROUP)BANCA POPOLARE DI INTRABANCA POPOLARE DI LODI SPA (BANCO POPOLARE GROUP)BANCA POPOLARE DI VICENZA SCPARLBANCA POPOLARE FRIULADRIA SPABANCA POPOLARE DI NOVARA SPA (BANCO POPOLARE GROUP)BANCO DI NAPOLI SPABANCO POPOLARE SOC. COOP.BANK OF TOKYO-MITSUBISHI LTD.BANCA UBAE SPABANCA POPOLARE VALCONCACASSA DEI RISPARMI DI FORLI' E DELLA ROMAGNA SPACASSA DI RISPARMIO DEL FRIULI VENEZIA GIULIA SPACASSA DI RISPARMIO DEL VENETO S.P.A.CASSA DI RISPARMIO DI CESENA S.P.A.CASSA DI RISPARMIO DI FIRENZE S.P.A.CASSA DI RISPARMIO DI LUCCA PISA LIVORNO SPA (BANCO POPOLARE GROUP)CASSA DI RISPARMIO IN BOLOGNA SPA - CARISBO SPACASSA DI RISPPARMIO DI PADOVA E ROVIGO SPACOMMERZBANK AGCREDITO BERGAMASCO S.P.A. (BANCO POPOLARE GROUP)CREDITO DI ROMAGNA SPACREDITO ITALIANO SPACREDITO VALTELLINESE BANKEFIBANCA S.P.A. (BANCO POPOLARE GROUP)INTESA SANPAOLO SPA (FORMERLY BANCA INTESA SPA)INTESA SANPAOLO SPA (FORMERLY BANCA INTESA SPA)HSBC BANK PLCMIZUHO CORPORATE BANK, LTD. MILAN BRANCHUBI BANCA (UNIONE DI BANCHE ITALIANE) S.C.P.A.UNICREDIT BANCA DI ROMA S.P.A.UNICREDIT BANK AG (HYPOVEREINSBANK)VENETO BANCA HOLDING S.C.P.A.UNICREDIT S.P.A.

JAPAN

BANK OF NOVA SCOTIAASAHI BANK LTD,(FORMERLY--BANK,LTD)BANK OF TOKYO-MITSUBISHI LTD.BNP PARIBAS S.A-TOKYO CHIBA KOGYO BANK,LTD.CITIBANK N.A.COMMERZBANK AGDEUTSCHE BANK AGHONGKONG AND SHANGHAI BANKING CORPORATION LIMITED,THEINTESABCI S.P.AMIZUHO CORPORATE BANK LTDOKAZAKI SHINKIN BANK, THERESONA BANK, LTDHOKURIKU BANK, LTD.,THESHINHAN ASIA LTD.STANDARD CHARTERED BANKSUMITOMO MITSUI BANKING CO.SUMITOMO MITSUI BANKING CO.UBAF UNION BANQUE ARABIES


WELL FARGO BANKWOORI BANK, TOKYO

JORDAN JORDAN INVESTMENT & FINAN.BK.

KENYADUBAI BANK KENYA LTDCITIBANK N.A. NAIROBI

KOREA

BANK OF NOVA SCOTIA BANK OF TOKYO-MITSUBISHI LTD.BANK SUMITOMO BANKING CO.BNP PARIBASCITIBANK KOREA INCDAEGU BANK LTD,THEHSBC BANK,THEINDUSTRIAL BANK OF KOREAJPMORGAN CHASE BANK, N.AKOOKMIN BANKKOREA DEVELOPMENT BANK, THEKOREA EXCHANGE BANKMIZUHO CORPORATE BANK LTDNATIONAL BANK OF PAKISTAN, SEOUL BRANCH KOREASHINHAN BANKSTANDARD CHARTERED BANKSUHYUP BANK (FORMERLY NATIONAL FEDERATION OF FISHERIES COOPERATIVES)SUMITOMO MITSUI BANKING CORPORATIONUBAF UNION BANQUE ARABIESWELL FARGO BANKWOORI BANK

KUWAITNATIONAL BANK OF KUWAITBNP PARIBAS KUWAITCITIBANK N.A.

LEBANONCITIBANK BEIRUTBANK OF BEIRUT S.A.L.NORDEA BANK S.A. LUXEMBOURGBANQUE DE COMMERCE ET DE PLACEMENTS S.A. SUCCURSALE DE LUXEMBOURGHSBC TRINKAUS UND BURKHARDT (INTERNATIONAL) SADANSKE BANK INTERNATIONAL S.A.COMMERZBANK AG

LATVIA NORDEA BANK FINLAND PLC LATVIA BRANCHLITHUANIA NORDEA BANK FINLAND PLC LITHUANIA BRANCH

Liechtenstein LGT BANK AGMEXICO HSBC MEXICO, S.A. INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIER HSBC

MALTAFIMBANK PLCAKBANK T.A.S. (MALTA BRANCH)

MACAU HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, THESTANDARD CHARTERED BANK

MOROCCOCITIBANK MAGHREBATTIJARIWAFA BANK (FORMERLY BANQUE COMMERCIALE DU MAROC)

MAURITIUS MAURITIUS COMMERCIAL BANK LTD., THE

MALAYSIA

BANK OF NOVA SCOTIABANK MUAMALAT MALAYSIA BERHADBANK MUAMALAT MALAYSIA BERHAD (6175-W)CITIBANK BERHADHSBC BANK MALAYSIA BERHAD,MYAM BANK (M) BERHADJPMORGAN CHASE BANK, N.AMALAYAN BANKING BERHADRHB BANK BERHADSTANDARD CHARTERED BANKMIZUHO CORPORATE BANK, LTD., LABUAN BRANCH



NETHERLAND

ABN AMRO BANK N.V. (FORMELY KNOWN AS FORTIS BANK (NEDERLAND) N.V.)ABN AMRO BANK N.V. ABN AMRO BANK N.V.AKBANK NVCOMMERZBANK AGDEUTSCHE BANK A.G. AMSTERDAMHOLLANDSCHE BANK-UNIE N.VING BANK N.V.KOREA EXCHANGE BANK, AMSTERDAM BRANCHYAPI KREDI BANK NEDERLAND N.V.

NEPAL NEPAL BANGLADESH BANK LIMITED

NEW ZEALAND

BANK OF NEWZEALANDCITIBANK NA NEW ZEALAND BRANCHHSBC(HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, THE)NATIONAL NOMINEES LIMITED

NORWAY

DEN NORSKE BANKFOKUS BANK, PART OF DANSKE BANK GROUPNORDEA BANK FINLAND PLCNORDEA BANK NORGE ASAUNION BANK OF NORWAY

OMANBANK SOHARBANKMUSCAT SAOG

PAKISTAN

ASKARIBANK LIMITEDBANKISLAMI PAKISTAN LIMITEDBANK AL HABIB LIMITED.CITIBANK N.A.HABIB METROPOLITAN BANK LIMITEDHSBC BANK MIDDLE EAST LIMITEDMASHREQ BANKNIB BANK LIMITEDASKARIBANK LIMITEDPRIME COMMERCIAL BANK LTDSONERI BANK LIMITEDUNITED BANK LIMITED.STANDARD CHARTERED BANK

PANAMAKOREA EXCHANGE BANKPOWSZECHNA KASA OSZCZEDNOSCI BANK POLSKI SA

PHILLIPINES

ASIAN DEVELOPMENT BANKMIZUHO CORPORATE BANK, LTD., MANILA BRANCHHONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, THECITIBANK,N.A., MANILA BRANCHNORDEA BANK POLSKA S.A.KOREA EXCHANGE BANKBANK OF TOKYO-MITSUBISHI LTD.

PORTUGALBANCO ESPIRITO SANTO S.A.BANCO ESPIRITO SANTO S.A.CITIBANK INTERNATIONAL PLC

POLAND

BANK HANDLOWYW WARSZAWIE SABANK POLSKA KASA OPIEKI SA - BANK PEKAO SADANSKE BANK A/S S.A. ODZIAL W POLSCEBNP PARIBAS S.A. BRANCH IN POLAND

QATAR

MASHREQ BANKCOMMERCIAL BANK OF QATAR, LTD.QATAR NATIONAL BANKSTANDARD CHARTERED BANKUNITED BANK LIMITED, DOHAHSBC BANK MIDDLE EAST LIMITED


ROMANIAUNICREDIT TIRIAC BANK SAPIRAEUS BANK ROMANIAUNICREDIT BANK SRBIJA A.D.

RUSSIA

BANK FOR FOREIGN TRADECOMMERZBANK AGZAO CITIBANK, MOSCOWUNICREDIT BANK ZAOWOORI BANK MOSCOWUNICREDIT BANK ZAOMOSCOW BUSINESS WORLD BANK

SENEGAL CITIBANK N.A.

SAUDI ARABIA

SAUDI BRITISH BANKAL RAJHI BANKBANK AL BILADBANQUE SAUDI FRANSIBNP PARIBAS SAUDI ARABIAEMIRATES NBD BANK PSCNATIONAL COMMERCIAL BANK, THESAUDI HOLLANDI BANK

SINGAPORE

AXIS BANK LIMITEDABN AMRO BANK N.V., SINGAPOREBANK OF AMERICA, N.A. SINGAPOREBANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.BNP PARIBAS - SINGAPORE BRANCHCITIBANK N.A.COMMERZBANK AGCREDIT LYONNAISDBS BANK LTD.DEUTSCHE BANK AGEMIRATES NBD BANK PSCHABIB BANK LIMITEDHSBC BANK,THEICICI BANK LIMITEDINDIAN OVERSEAS BANKINDIAN BANKINTESA SANPAOLO S.P.A. (FORMER SANPAOLO IMI), SINGAPORE BRANCH, SINGAPOREJPMORGAN CHASE BANK, N.A.KBC BANK NVKOREA EXCHANGE BANK, SINGAPORE BRANCHMIZUHO CORPORATE BANK LTDMALAYAN BANKING BERHADNATIONAL BANK OF KUWAIT S.A.K., THENORDEA BANK FINLAND PLC, SINGAPORENATIXIS BANKSHINHAN BANKSKANDINAVISKA ENSKILDA BANKEN AB (PUBL)STANDARD CHARTERED BANKSTATE BANK OF INDIASUMITOMO MITSUI BANKING CO.UCO BANKUBAF UNION BANQUE ARABIESUNICREDIT BANK AG SINGAPORE BRANCH (HYPOVEREINSBANK AG SINGAPORE BRANCH)WOORI BANK, SINGAPORE

SLOVAKIACESKOSLOVENSKA OBCHODNA BANKA, A.S.CITIBANK EUROPE PLC, POBOCKA ZAHRANICNEJ BANKY

SLOVENIA UNICREDIT BANKA SLOVENIJA D.D.

SOUTH AFRICAFIRSTRAND BANK LTD CITIBANK SOUTH AFRICA



SPAIN

BANCO ATLANTICO S.AARESBANK, S.A.BANCO PASTOR S.A.BANKIA S.A.BANCO POPULAR ESPANOL, S.A.CATALUNYA BANC, S.A. (CATALUNYACAIXA)CAJAMAR CAJA RURAL, SOCIEDAD COOPERATIVA DE CREDITOSVENSKA HANDELSBANKENCAIXA D'ESTALVIS I PENSIONS DE BARCELONA (LA CAIXA)-CAJA DE AHORROS Y PENSIONES DE BARCELONACAJA MEDITERRANEOBANCO BILBAO VIZCAYA(ARG)S.ABANCO DE SABADELL S.ABANCO SANTANDER S.A.BANK OF TOKYO-MITSUBISHI LTD.BNP PARIBAS SUCURSHL ENESPANABANCO ESPANOL DE CREDITOSVENSKA HANDELSBANKENCAJA DE AHORROS DE VALENCSKANDINAVISKA ENSKILDA BANKENKBC BANK N.V.CAJA DE AHORROS DE VALENCIA, CASTELLON Y ALICANTE (BANCAJA)COMMERZBANK AG

SRILANKA

CITIBANK N.A. SRI LANKACOMMERCIAL BANK OF CEYLON PLCICICI BANK LTDSTANDARD CHARTERED BANKMASHREQ BANK

SWEDEN

DANSKE BANKDEN NORSKE BANKNORDEA BANK SWEDEN ABSKANDINAVISKA ENSKILDA BANKENNORDEA BANK AB (PUBL)SVENSKA HADELSBANKENSWEDBANK

SWITZERLAND

BANQUE CANTONALE VAUDOISEBANQUE DE COMMERCE ET DE PLACEMENTS S.A.BANCA POPOLARE DI SONDRIO (SUISSE)BANQUE CANTONALE DE GENEVEBHF BANK (SCHWEIZ) AGBANCA ALETTI E C. (SUISSE) SA (BANCO POPOLARE GROUP)COMMERZBANK AGCREDIT AGRICOLE (SUISSE)SACREDIT SUISSE AGCREDIT EUROPE BANKATLANTIC FORFAITIERUNGS AGHABIB BANK AG ZURICHNORDEA BANK S.A., LUXEMBURG, ZWEIGNIEDERLASSUNG, ZUERICH.RAIFFEISENBANK A.S.UNITED BANK AG ZURICHZUERCHER KANTONALBANKUBS AGUBS AG (HEAD OFFICE, ADUNION BANCAIRE PRIVEE, GENEVA

TAIWAN

BANK OF AMERICA, N.A. TAIPEIBANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.CITIBANK N.A.CITIBANK TAIWAN LIMITEDDBS BANK (TAIWAN) LTD


HSBC BANK,THEHUA NAN COMMERCIAL BANK, LTD.JPMORGAN CHASE BANK, N.A.KBC BANK NVKBC BANK NVKRUNG THAI BANK PUBLIC COMPANY LIMITEDLAND BANK OF TAIWANMIZUHO CORPORATE BANK LTDMEGA INTERNATIONAL COMMERCIAL BANK CO., LTD.STANDARD CHARTERED BANKSUMITOMO MITSUI BANKING CO.SHANGHAI COMMERCIAL AND SAVINGS BANK, LTD., THETHE BANK OF NEW YORK MELLON, TAIPEI BRANCHTAISHIN INTERNATIONAL BANKTHE HONGKONG AND SHANGHAI BANKING CORPORATION LTD.WELL FARGO BANK

THILAND

BANK OF TOKYO-MITSUBISHI LTD.MIZUHO CORPORATE BANK, LTD., (FORMERLY THE DAI-ICHI KANGYO BANK, LTD., BANGKOK BRANCH)CITIBANK N.A.EXPORT-IMPORT BANK-IMPOHSBC BANK,THEISLAMIC BANK OF THAILANDCITIBANK N.A.MIZUHO BANK, LTD., BANGKOK BRANCHSUMITOMO MITSUI BANKING CO.THANACHART BANK PUBLIC COMPANY LIMITEDKASIKORNBANK PUBLIC COMPANY LIMITEDTMB BANK PUBLIC COMPANY LIMITEDSTANDARD CHARTERED BANK

TANZANIA CITIBANK TANZANIA LTDTUNISIA BANQUE TUNISO-LIBYENNE

TURKEY

TEKSTIL BANKASI A.S.AKBANK T.A.S.AKTIF YATIRIM BANKASI A.S.CITIBANK N.A.ODEABANK A.S.ICBC TURKEY BANK A.S. (FORMERLY TEKSTIL BANKASI A.S.)TURKIYE HALK BANKASI A.S. (HEAD OFFICE)TURKIYE CUMHURIYETI ZIRAAT BANKASI A.S.TURK EKONOMI BANKASI A.S.

UAE

AXIS BANK LIMITED, DIFC BRANCH (REGULATED BY DFSA)ABU DHABI COMMERCIAL BANKBANK OF TOKYO-MITSUBISHI UFJ, LTD.,BNP PARIBAS, ABU DHABIBNP PARIBAS, DUBAICITIBANK N.A.COMMERCIAL BANK OF DUBAIDUBAI ISLAMIC BANKEMIRATES NBD BANK PSCCREDIT EUROPE BANK (DUBAI) LTDHABIB BANK AG ZURICHHSBC BANK MIDDLE EASTMASHREQ BANK PSCNOOR ISLAMIC BANKNATIONAL BANK OF UMM AL QAIWAIN PSC.SMBC DUBAIUNION NATIONAL BANKUAE EXCHANGE CENTERUNITED BANK LTD.



STANDARD CHARTERED BANKNATIONAL BANK OF FUJAIRAH

UK

ABN AMRO BANK NVAKBANK NV LONDON BRANCHBANCA MONTE DEI PASCHI DI SIENA SPA - LONDON BRANCHBANK MANDIRI (EUROPE) LIMITEDBANK MANDIRI (EUROPE) LTD.BANK NEGARA INDONESIA (PERSERO) P.T., LONDON BRANCHBANK OF AMERICA, N.A. LONDONBANK OF NOVA SCOTIABANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.BANCO POPOLAREBNP PARIBAS FINANCE PLCBRITISH ARAB COMMERCIAL BANK PLCCITIBANK N.A.COMMERZBANK AGCREDIT AGRICOLE S.A. LONDON BRANCHDANSKE BANKFORTIS BANK SA/NVGULF INTERNATIONAL BANK (UK) LIMITEDHABIB BANK AG ZURICHHABIBSONS BANK LIMITEDHABIB-UK PLCHSBC BANK PLCICICI BANK UK PLCING BANK N.V., LONDON BRANCHING BHF-BANK AKTIENGESELLS INTESABCI S.P.AJPMORGAN CHASE BANK, N.A.KBC BANK NVKEYBANK NATIONAL ASSOCIATIONMASHREQ BANK PSCMIZUHO CORPORATE BANK LTDNORDEA BANK FINLAND PLC LONDON BRANCHNORTHERN BANK (PART OF DANSKE BANK GROUP)NATIONAL BANK OF ABU DHABIQIB (UK) PLCSHINHAN BANK EUROPE GMBHSONALI BANK (UK) LTDSTANDARD CHARTERED BANKSUISSE CREDIT CAPITAL (2009) LTD.SUMITOMO MITSUI BANKING CO.UNITED NATIONAL BANKWELLS FARGO BANK, N.A.WELLS FARGO SECURITIES INTERNATIONAL LIMITEDWOORI BANK, LONDON

USA

ABN AMRO BANK NVATLANTIC BANK OF NEW YORKABN AMRO CAPITAL USA LLCBANCA MONTE DEI PASCHI DI SIENA SPA - BANK OF AMERICABANK OF AMERICA, N.ABANK OF AMERICA, N.A.BANK OF NEW YORK BANK OF THE WESTBANK OF NOVA SCOTIABANK OF TOKYO-MITSUBISHI LTD.BANKERS TRUST COPANY


USA

BNP PARIBAS U.S.A - NEW YORK BRANCHCATHAY BANKCITIBANK N.A.CITY NATIONAL BANKCOMERICA BANKCREDIT LYONNAISEAST-WEST BANKFIRST TENNESSEE BANK N.A.FLEET NATIONAL BANKFRENCH AMERICAN BANKING COHABIB AMERICAN BANK LTDHABIB BANK LIMITEDHSBC BANK ICICI BANK LIMITEDINTERNATIONAL FINANCE CORPORATIONINTESABCI S.P.AJPMORGAN BANK CHASE BANKKBC BANK NVKEB NY FINANCIAL CORP.KEYBANKMASHREQ BANKMERCHANTS BANK OF CALIFORINAMIZUHO CORPORATE BANK LTDNATIONAL BANK OF PAKISTANNATIONAL CITY BANK CLEVELANORDEA BANK FINLAND PLC, NEW YORK BRANCHSHINHAN BANKSTERLING NATIONAL BANKSTANDARD CHARTERED BANKSUMITOMO MITSUI BANKING CO.TD BANK, N.A.UNITED BANK LTD.U.S.BANK (FORMERLY FIRST BANK)WELLS FARGO BANKWOORI AMERICA BANK, NEW YORKWOORI BANK, LOS ANGELESWOORI BANK, NEW YORK

UZBEKISTAN NATIONAL BANK FOR FOREIGN ECONOMIC ACTIVITY OF THE REPUBLIC OF UZBEKISTANURUGUAY EXPRINTER (URUGUAY) S.A.

UKRAINEPJSC 'CITIBANK'UNEX JOINT STOCK BANKDIAMANT BANK JOINT STOCK BANK

VIETNAM

ASIA COMMERCIAL BANKCITIBANK N.A.BANK OF TOKYO MITSUBISHIJOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAMHSBC BANK (VIETNAM) LTD.JPMORGAN CHASE BANKKOREA EXCHANGE BANK, HANOI BRANCHMIZUHO CORPORATE BANK LTDSHINHAN BANKSTANDARD CHARTERED BANKSUMITOMO MITSUI BANKING CO.THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, HANOI BRANCHWOORI BANK, HANOIWOORIBANK HOCHIMINH



FinancialStatements

Southeast Bank Limited I Annual Report 2016 259Financial statem

ents

FINANCIAL STATEMENTS

Independent Auditor's Report to the Shareholders 260

Consolidated Balance Sheet 262

Consolidated Profit and Loss Account 264Consolidated Cash Flow Statement 265

Consolidated Statement of Changes in Equity 266

Balance Sheet 267

Profit and Loss Account 269

Cash Flow Statement 270

Statement of Changes in Equity 271


FINANCIAL STATEMENTS OF ISLAMIC BANKING BRANCHESBalance Sheet 344



FINANCIAL STATEMENTS OF OFF-SHORE BANKINGBalance Sheet 354



FINANCIAL STATEMENTS OF SEBL SUBSIDIARIESFinancial Statements of Southeast Bank Capital Services Ltd. 364

Financial Statements of Southeast Financial Services (UK) Ltd 378

Financial Statements of Southeast Financial Services (Australia) Pty Ltd 391

Financial Statements of Southeast Exchange Company (South Africa) Pty Ltd 399


Independent auditor’s reportto the shareholders of Southeast Bank Limited

Report on the financial statements

We have audited the accompanying consolidated financial statements of Southeast Bank Limited and its subsidiaries (the “Group") as well as the separate financial statements of Southeast Bank Limited (the “Bank”), which comprise the consolidated balance sheet and the separate balance sheet as at 31 December 2016, and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements and internal controls

Management is responsible for the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards as explained in note 2 and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 and the Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.

Auditor's responsibility

Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial statements of the Bank 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 consolidated financial statements of the Group and separate financial statements of the Bank are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of consolidated financial statements of the Group and separate financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 consolidated financial statements of the Group and also separate financial statements of the Bank.

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 consolidated financial statements of the Group and also separate financial statements of the Bank give a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2016, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards as explained in note 2.


ents

Report on other legal and regulatory requirements

In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991 and the rules and regulations issued by Bangladesh Bank, we also report the following:

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

b) to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial Statements and Internal Control:

i) internal audit, internal control and risk management arrangements of the Group and the Bank as disclosed in Notes 2.2 (i,ii, and iii) of the financial statements appeared to be materially adequate; and

ii) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Bank and its related entities other than matters disclosed in these financial statements;

c) financial statements of all subsidiaries of the Bank have been audited by other auditors and have been properly reflected in the consolidated financial statements;

d) in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our examination of those books;

e) the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance sheet and separate profit and loss account of the Bank dealt with by the report are in agreement with the books of account;

f ) the expenditure incurred was for the purposes of the Bank’s business;

g) the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as with related guidance issued by Bangladesh Bank;

h) adequate provisions have been made for advances which are, in our opinion, doubtful of recovery;

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

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

k) we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 5,200 person hours for the audit of the books and accounts of the Bank; and

Other matter

The consolidated financial statements of the Group and also separate financial statements of the Bank as at and for the year ended 31 December 2015 were audited by another auditor who expressed an unmodified opinion on those statements on 2 March 2016.

Rahman Rahman HuqDhaka, 08 April 2017

Financial statements


Southeast Bank Limited and its subsidiariesConsolidated Balance SheetAs at 31 December 2016

Note 2016 Taka

2015 Taka

PROPERTY AND ASSETS

Cash 4In hand (including foreign currencies) 2,432,620,307 1,903,292,780 Balance with Bangladesh Bank and its agent banks(including foreign currencies) 15,402,827,761 14,093,697,688

17,835,448,068 15,996,990,468

Balance with other banks and financial institutions 5In Bangladesh 2,860,092,475 2,187,972,750 Outside Bangladesh 1,185,128,939 1,203,350,315

4,045,221,414 3,391,323,065 Money at call and on short notice 7 4,271,344,100 923,451,500 Investments 8Government 54,299,803,894 52,620,785,540 Others 7,431,830,566 6,208,480,661

61,731,634,460 58,829,266,201 Loans and advances/investments 10Loans, cash credit, overdrafts etc./investments 182,661,818,983 161,556,322,321 Bills purchased and discounted 9,203,770,254 7,322,136,224

191,865,589,237 168,878,458,545 Fixed assets including premises, furniture and fixtures 12 8,947,162,556 7,885,226,411 Other assets 14 3,101,610,244 4,813,314,263 Non-banking assets - - Total assets 291,798,010,079 260,718,030,453

LIABILITIES AND CAPITAL

LiabilitiesBorrowings from other banks, financial institutions and agents 16Subordinated bond 8,000,000,000 3,000,000,000 Other borrowings 7,371,635,082 4,556,919,852

15,371,635,082 7,556,919,852 Deposits and other accounts 18Current/Al-wadeeah current accounts and other accounts 30,285,059,627 23,179,887,835 Bills payable 6,548,856,941 2,127,206,788 Savings bank/Mudaraba savings bank deposits 19,700,582,409 18,419,861,332 Fixed deposits/Mudaraba fixed deposits 173,438,929,873 166,704,137,174

229,973,428,850 210,431,093,129

Other liabilities 20 19,919,384,323 15,513,931,810 Total liabilities 265,264,448,255 233,501,944,791

Capital/shareholders' equityPaid up capital 22.2 9,169,501,760 9,169,501,760 Statutory reserve 23 9,170,000,000 8,897,307,905 Revaluation reserve 24 4,763,888,676 5,968,128,051 Other reserves 25 247,650,000 247,650,000 Foreign currency translation reserve 26 (24,449,246) (27,870,748)Retained earnings 27 3,196,967,474 2,951,940,410 Total shareholders' equity 26,523,558,664 27,206,657,378 Non-controlling interest 29 10,003,160 9,428,284 Total liabilities and shareholders' equity 291,798,010,079 260,718,030,453


ents

Southeast Bank Limited and its subsidiariesConsolidated Balance SheetAs at 31 December 2016

Note 2016 Taka

2015 Taka

OFF-BALANCE SHEET ITEMS

Contingent liabilitiesAcceptances and endorsements 30.1 43,813,553,641 36,223,420,210 Letters of guarantee 30.2 15,154,116,600 13,395,240,916 Irrevocable letters of credit 30.3 32,881,303,677 24,992,379,957 Bills for collection 30.4 17,830,304,866 12,812,744,729 Other contingent liabilities 30.5 1,474,684,000 1,098,459,000 Total contingent liabilities 111,153,962,784 88,522,244,812

Other commitmentsDocumentary credits and short term trade-related transactions - - Forward assets purchased and forward deposits placed 2,756,664,000 - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total other commitments 2,756,664,000 - Total off-balance sheet items including contingent liabilities 113,910,626,784 88,522,244,812

The annexed notes 1 to 69 form an integral part of these financial statements.

Dhaka,Date: 08 April 2017

As per our report of same date.

Chairman Director Director

AuditorRahman Rahman HuqChartered Accountants

Managing Director (CC)



Southeast Bank Limited and its subsidiariesConsolidated Profit and Loss AccountFor the year ended 31 December 2016

Note 2016 Taka

2015 Taka

Interest income/profit on investments 32 16,972,326,566 17,794,795,961 Interest paid/profit shared on deposits and borrowings etc. 34 (12,765,116,463) (14,656,338,002)Net interest income/net profit on investments 4,207,210,103 3,138,457,959 Investment income 36 5,079,606,748 5,158,537,123 Commission, exchange and brokerage 38 2,903,034,957 2,759,457,588 Other operating income 40 662,602,892 547,933,577

8,645,244,597 8,465,928,288 Total operating income (A) 12,852,454,700 11,604,386,247

Salaries and allowances 42 1,741,464,516 1,423,681,923 Rent, taxes, insurance, electricity, etc. 44 801,036,278 658,260,750 Legal expenses 599,813 1,491,730 Postage, stamp, telecommunication, etc. 46 166,450,976 147,329,178 Stationery, printing, advertisements, etc. 48 132,234,398 112,623,969 Managing Director's salary and fees 50 11,975,000 9,450,000 Directors' fees 51 2,912,276 2,650,734 Auditors' fees 53 1,599,917 1,040,000 Depreciation and repair 54 403,602,733 339,176,671 Other expenses 56 1,087,356,457 874,406,519 Total operating expenses (B) 4,349,232,364 3,570,111,474 Profit before provision (C=A-B) 8,503,222,336 8,034,274,773 Provision for loans and advances/investments 21.1 General provision 890,000,000 205,278,770 Specific provision 2,360,990,098 2,039,766,952

3,250,990,098 2,245,045,722 Provision for diminution in value of investments 58 (403,600,751) 269,481,899 Other provisions 21.5 365,235,000 2,263,106 Total provision (D) 3,212,624,347 2,516,790,727 Total profit before taxation (E=C-D) 5,290,597,989 5,517,484,046 Provision for taxation 60

Current 2,790,553,126 2,308,068,504 Deferred 64,971,265 140,000,000

2,855,524,391 2,448,068,504 Net profit after taxation 2,435,073,598 3,069,415,542 Net profit after taxation attributable to:

Equity holders' of the Bank 2,434,965,442 3,070,132,933 Non-controlling interest 108,156 (717,391)

Net profit after taxation 2,435,073,598 3,069,415,542 Appropriations Statutory reserve 23 272,692,095 1,104,495,904

272,692,095 1,104,495,904 Retained surplus during the year 2,162,381,503 1,964,919,638 Earnings per share (par value Taka 10) 66 2.66 3.35








ents

Southeast Bank Limited and its subsidiariesConsolidated Cash Flow StatementFor the year ended 31 December 2016

Note 2016 Taka

2015 Taka

A. Cash flows from operating activities:

Interest receipts in cash 21,465,956,048 22,649,008,849 Interest payments (13,436,169,366) (15,065,727,470)Dividend receipts 206,501,017 169,586,070 Fees and commission receipts in cash 38 2,903,034,957 2,759,457,588 Recoveries on loans previously written-off 72,709,902 174,604,278 Cash payments to employees (1,753,439,516) (1,433,131,923)Cash payments to suppliers (680,680,071) (410,177,004)Income taxes paid (1,857,082,933) (2,544,706,496)Receipts from other operating activities 62 658,098,860 547,079,920 Payments for other operating activities 64 (2,171,105,188) (1,847,880,920)Operating profit before changes in operating assets and liabilities (i) 5,407,823,710 4,998,112,892

Increase (decrease) in operating assets and liabilitiesSale of trading securities 1,890,405,541 705,788,371 Purchase of trading securities (3,044,094,011) (420,588,600)Loans and advances to customers (24,196,787,280) (21,807,652,336)Other assets 2,181,098,442 (1,779,218,427)Deposits from other banks 7,814,715,230 (258,998,658)Deposits from customers 20,213,388,624 21,367,938,895 Other liabilities 1,261,627,976 729,018,180 Cash generated from (used in) operating assets and liabilities (ii) 6,120,354,522 (1,463,712,575)Net cash from operating activities (A=i+ii) 11,528,178,232 3,534,400,317

B. Cash flows from investing activities:

Proceeds from sale of securities 53,629,810,359 51,230,852,388 Payments for purchase of securities (56,304,115,364) (57,543,612,089)Purchase of fixed assets (1,359,221,862) (245,198,107)Sale of fixed assets 5,141,124 2,516,411 Net cash used in investing activities (B) (4,028,385,743) (6,555,441,397)

C. Cash flows from financing activities:

Dividends paid (1,375,425,264) (1,375,425,264)Payment against lease obligation (8,388,117) (15,486,885)Net cash used in financing activities (C) (1,383,813,381) (1,390,912,149)

D. Net increase (decrease) in cash and cash equivalents (A+B+C) 6,115,979,108 (4,411,953,229)E. Effects of exchange rate changes on cash and cash equivalents 25,257,242 979,724 F. Cash and cash equivalents at beginning of the period 21,006,750,533 25,417,724,038 G. Cash and cash equivalents at end of the period (D+E+F) 27,147,986,883 21,006,750,533

Cash and cash equivalents at end of the period representsCash in hand (including foreign currencies) 4 2,432,620,307 1,903,292,780 Balance with Bangladesh Bank and its agent banks(including foreign currencies) 4 15,402,827,761 14,093,697,688 Balance with other banks and financial institutions 5 4,045,221,414 3,391,323,065 Money at call and on short notice 7 4,271,344,100 923,451,500 Treasury bills 9.1.1 991,930,001 689,598,000 Prize bond 9.1.1 4,043,300 5,387,500

27,147,986,883 21,006,750,533



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Southeast Bank LimitedBalance Sheet As at 31 December 2016

Note 2016 Taka

2015 Taka

PROPERTY AND ASSETS

Cash 4.1In hand (including foreign currencies) 2,428,412,898 1,903,292,780 Balance with Bangladesh Bank and its agent banks(including foreign currencies) 15,402,827,761 14,093,697,688

17,831,240,659 15,996,990,468 Balance with other banks and financial institutions 6In Bangladesh 2,860,092,475 2,187,972,750 Outside Bangladesh 1,118,618,354 1,149,021,361

3,978,710,829 3,336,994,111 Money at call and on short notice 7 4,271,344,100 923,451,500 Investments 9Government 54,299,803,894 52,620,785,540 Others 5,155,205,613 4,267,629,032

59,455,009,507 56,888,414,572 Loans and advances/investments 11Loans, cash credit, overdrafts etc./investments 180,161,187,214 162,056,722,487 Bills purchased and discounted 9,203,770,254 7,322,136,224

189,364,957,468 169,378,858,711 Fixed assets including premises, furniture and fixtures 13 8,613,686,700 7,751,078,875 Other assets 15 8,478,052,796 5,977,253,927 Non - banking assets - - Total assets 291,993,002,059 260,253,042,164


LiabilitiesBorrowings from other banks, financial institutions and agents 17Subordinated bond 8,000,000,000 3,000,000,000 Other borrowings 7,363,947,263 4,519,780,424

15,363,947,263 7,519,780,424 Deposits and other accounts 19Current/Al-wadeeah current accounts and other accounts 30,845,332,890 23,184,569,410 Bills payable 6,548,856,941 2,127,206,788 Savings bank/Mudaraba savings bank deposits 19,700,582,409 18,419,861,332 Fixed deposits/Mudaraba fixed deposits 173,438,929,873 166,704,137,174

230,533,702,113 210,435,774,704

Other liabilities 21 19,572,488,052 15,072,571,985 Total liabilities 265,470,137,428 233,028,127,113 Capital/shareholders' equityPaid up capital 22.2 9,169,501,760 9,169,501,760 Statutory reserve 23 9,170,000,000 8,897,307,905 Revaluation reserve 24 4,763,888,676 5,968,128,051 Other reserve 25 247,650,000 247,650,000 Retained earnings 28 3,171,824,195 2,942,327,335 Total shareholders' equity 26,522,864,631 27,224,915,051 Total liabilities and shareholders' equity 291,993,002,059 260,253,042,164



Note 2016 Taka

2015 Taka


Contingent liabilitiesAcceptances and endorsements 30.1 43,813,553,641 36,223,420,210 Letters of guarantee 30.2 15,154,116,600 13,395,240,916 Irrevocable letters of credit 30.3 32,881,303,677 24,992,379,957 Bills for collection 30.4 17,830,304,866 12,812,744,729 Other contingent liabilities 30.5 1,474,684,000 1,098,459,000 Total contingent liabilities 111,153,962,784 88,522,244,812

Other commitmentsDocumentary credits and short term trade-related transactions - - Forward assets purchased and forward deposits placed 2,756,664,000 - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total other commitments 2,756,664,000 - Total off-balance sheet items including contingent liabilities 113,910,626,784 88,522,244,812






Southeast Bank LimitedBalance Sheet As at 31 December 2016



ents

Southeast Bank LimitedProfit and Loss Account For the year ended 31 December 2016

Note 2016 Taka

2015 Taka

Interest income/profit on investments 33 16,988,878,395 17,918,296,225 Interest paid/profit shared on deposits and borrowings etc. 35 (12,785,664,559) (14,652,724,337)Net interest income/net profit on investments 4,203,213,836 3,265,571,888 Investment income 37 5,014,416,110 5,125,174,462 Commission, exchange and brokerage 39 2,847,697,916 2,724,003,399 Other operating income 41 630,611,620 518,566,500

8,492,725,646 8,367,744,361 Total operating income (A) 12,695,939,482 11,633,316,249

Salaries and allowances 43 1,720,787,663 1,399,383,806 Rent, taxes, insurance, electricity, etc. 45 781,507,962 644,286,649 Legal expenses 583,977 1,283,794 Postage, stamp, telecommunication, etc. 47 165,740,473 146,538,853 Stationery, printing, advertisements, etc. 49 130,657,839 111,489,118 Managing Director's salary and fees 50 11,975,000 9,450,000 Directors' fees 52 2,697,276 2,610,734 Auditors' fees 1,000,000 1,000,000 Depreciation and repair of bank's assets 55 372,736,739 321,444,898 Other expenses 57 1,010,435,457 951,884,557 Total operating expenses (B) 4,198,122,386 3,589,372,409 Profit before provision (C=A-B) 8,497,817,096 8,043,943,840 Provision for loans and advances/investments 21.1

General provision 890,000,000 205,278,770 Specific provision 2,360,990,098 2,039,766,952

3,250,990,098 2,245,045,722 Provision for diminution in value of investments 59 (364,779,225) 274,155,492 Other provisions 21.5 365,235,000 2,263,106 Total provision (D) 3,251,445,873 2,521,464,320 Total profit before taxation (C-D) 5,246,371,223 5,522,479,520 Provision for taxation 61

Current 2,765,000,000 2,300,000,000 Deferred 65,000,000 140,000,000

2,830,000,000 2,440,000,000 Net profit after taxation 2,416,371,223 3,082,479,520

Appropriations Statutory reserve 23 272,692,095 1,104,495,904

272,692,095 1,104,495,904 Retained surplus during the year 2,143,679,128 1,977,983,616

Earnings per share (par value Taka 10) 67 2.64 3.36



As per our report of same date.Chairman Director Director





Southeast Bank LimitedCash Flow StatementFor the year ended 31 December 2016

Note 2016 Taka

2015 Taka

A. Cash flows from operating activities:

Interest receipts in cash 21,482,507,877 22,772,509,113 Interest payment (13,377,940,965) (15,062,113,805)Dividend receipts 171,780,691 131,633,489 Fees and commission receipts in cash 39 2,847,697,916 2,724,003,399 Recoveries on Loans previously written-off 72,709,902 174,604,278 Cash payments to employees (1,732,762,663) (1,408,833,806)Cash payments to suppliers (679,103,512) (408,742,152)Income taxes paid (1,847,199,924) (2,535,875,626)Receipts from other operating activities 63 626,107,588 517,712,843 Payments for other operating activities 65 (2,134,111,013) (1,820,501,267)Operating profit before changes in operating assets and liabilities (i) 5,429,685,897 5,084,396,466

Increase (decrease) in operating assets and liabilitiesSale of trading securities 1,717,610,078 265,378,290 Purchase of trading securities (2,542,420,203) (322,445,392)Loans and advances to customers (21,195,755,345) (21,422,307,226)Other assets (1,971,677,448) (1,798,912,238)Deposits from other banks 7,844,166,839 (231,521,530)Deposits from customers 20,768,980,312 21,372,903,220 Other liabilities 1,256,507,386 580,771,990 Cash generated from (used in) operating assets and liabilities (ii) 5,877,411,619 (1,556,132,886)Net cash from operating activities (A=i+ii) 11,307,097,516 3,528,263,580

B. Cash flows from investing activities:

Proceeds from sale of securities 53,629,810,359 51,230,852,388 Payments for purchase of securities (56,304,115,364) (57,543,612,089)Purchase of fixed assets (1,129,882,695) (246,747,420)Sale of fixed assets 4,942,879 2,516,411 Net cash used in investing activities (B) (3,799,244,821) (6,556,990,710)

C. Cash flows from financing activities:

Dividends paid (1,375,425,264) (1,375,425,264)Payment against lease obligation (8,388,117) (15,486,885)Net cash used in financing activities (C) (1,383,813,381) (1,390,912,149)

D. Net increase (decrease) in cash and cash equivalents (A+B+C) 6,124,039,314 (4,419,639,279)E. Effects of exchange rate changes on cash and cash equivalents 807,996 945,864 F. Cash and cash equivalents at beginning of the period 20,952,421,579 25,371,114,994 G. Cash and cash equivalents at end of the period (D+E+F) 27,077,268,889 20,952,421,579

Cash and cash equivalents at end of the period representsCash in hand (including foreign currencies) 4.1 2,428,412,898 1,903,292,780 Balance with Bangladesh Bank and its agent banks(including foreign currencies) 4.1 15,402,827,761 14,093,697,688 Balance with other banks and financial institutions 6 3,978,710,829 3,336,994,111 Money at call and on short notice 7 4,271,344,100 923,451,500 Treasury bills 9.1.1 991,930,001 689,598,000 Prize bond 9.1.1 4,043,300 5,387,500

27,077,268,889 20,952,421,579


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1 Reporting entity

1.1 Status of the Bank

Southeast Bank Limited (the “Bank”) is a scheduled commercial bank in the private sector established under the Bank Companies Act, 1991 and incorporated in Bangladesh on March 12, 1995 as a public limited company to carry out banking business in Bangladesh. The registered office of the Bank is located at Eunoos Trade Centre 52-53, Dilkusha Commercial Area (Level 2, 3, 4, 6 & 16), Dhaka-1000. The consolidated financial statements of the Bank as at and for the year ended 31 December 2016 comprise the Bank and its subsidiaries (together referred to as the “Group” and individually as “Group entities”).

1.2 Principal activities of the Bank

The Bank has 128 (2015: 122) branches, with no overseas branch as on 31 December 2016. Out of 128 branches 5 (2015: 5) branches of Islamic banking, the rest 123 (2015: 117) branches run on commercial conventional basis, of which 15 (2015: 15) SME / agricultural branches are located across the country. The Bank offers services for all commercial banking needs of the customers, which includes deposit banking, loans and advances, export import financing, inland and international remittance facility etc. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company.

The Bank operates Islamic banking in 5 branches designated for the purpose in complying with the rules of Islamic Shariah the modus operandi.

The Bank has four subsidiaries, one for its merchant banking operation (for details see note 1.5) and another three for its remittance business of which one in the United Kingdom (for details see note 1.6), one in Australia (for details see note 1.7) and other one in South Africa (for details see note 1.8).

1.3 Islamic Banking

The Bank obtained the Islamic Banking branches permission vide letter no. BRPD(P)745(22)/2003-2525 dated 28 June 2003, BRPD(P)745(22)/2004-1801 dated 9 May 2004 and BRPD(P)745(22)/2004-3957 dated 13 October 2004. The Islamic banking branches are governed under the rules and regulations of Bangladesh Bank. Separate financial statements of Islamic Banking Branches are shown in Annexure-G, G.1 and G.2 .

The financial statements of the Islamic banking branches have also been prepared as per the Bank Companies Act, 1991 (amended up to 2013), BFRSs and other prevailing laws and regulations applicable in Bangladesh.

A separate balance sheet and profit and loss account are shown in Annexure-G and G.1 and the figures appearing in the annexure have been converted into relevant heads of financial statements under conventional banking for consolidation and incorporation in these financial statements.

1.4 Off-Shore Banking

In order to cater the varied financial needs of 100% foreign owned/joint venture industrial units and foreign entities located in Export Processing Zones of the country, the Bank obtained Off-Shore Banking License on 24 June 2008 vide letter no. BRPD(P-3)744(98)/2008-2213 from Bangladesh Bank. Presently the Bank has 2 (2015: 2) off-shore banking units - one at Dhaka Export Processing Zone and the other at Chittagong Export Processing Zone. Off-shore banking unit is governed under the rules and regulations of Bangladesh Bank. Separate financial statements of Off- Shore Banking Units are shown in Annexure-H, H.1 and H.2.

1.5 Southeast Bank Capital Services Limited

Southeast Bank Capital Services Limited is a subsidiary of Southeast Bank Limited which was incorporated on 23 September 2010 and commenced its operation from 1 December 2010. The Bank transferred its Merchant Banking operation to the newly formed subsidiary company in pursuance of the direction of Bangladesh Bank vide DOS Circular No. 4 dated 15 June 2010. The principal activities of this subsidiary company is to provide quality services to the prospective institutional and individual investors in the capital market. It is decisively providing the following services:

i) Portfolio Management Servicesii) Underwriting of Shareiii) Issue Management Services etc.

Copy of the audited financial statements is attached in Appendix A.

Southeast Bank Limited and its SubsidiariesNotes to the Financial StatementsAs at and for the year ended 31 December 2016


ents

1.6 Southeast Financial Services (UK) Ltd

Southeast Financial Services (UK) Ltd (the "Company") was incorporated as a private limited company with Companies House of England and Wales under registration no. 7539137 on 22 February 2011. The company is a wholly owned subsidiary of Southeast Bank Limited. Earlier on 28 October 2010, Southeast Bank Limited got the approval of Bangladesh Bank to establish a wholly owned subsidiary in the United Kingdom. Southeast Financial Services (UK) Limited obtained Certificate of Registration for Money Laundering Regulation (MLR) on 12 April 2011 from Her Majesty Customs and Excise. The company was granted registration from Financial Services Authority (FSA) on 21 July 2011 as Small Payment Institution (SPI) to carry out Money Service Business (MSB) under Payment Services Regulations 2009. The Company commenced its operation of business on 26 September 2011. The registered office is located at 22 New Road, London E1 2AX, United Kingdom.

The principal activities of the Company are to carry on the remittance business as well as to undertake and participate in transactions, activities and operations generally carried on or undertaken by Exchange House.

The subsidiary is registered in the United Kingdom (UK). Audit of financial statements of this subsidiary is not required as per rules 7 regulations of UK. The financial statements including accountant's report of this subsidiary is attached in Appendix B.

1.7 Southeast Financial Services (Australia) Pty Ltd

Southeast Financial Services (Australia) Pty Limited (the "Company") was incorporated as a private limited company with Australian Business Register (ABR) under registration no. 40160673165 on 08 October 2012. The Company is a wholly owned subsidiary of Southeast Bank Limited.


The subsidiary is registered in Australia. Audit of financial statements of this subsidiary is not required as per the Corporations Act 2001 of Australia. The Financial Statements of the Company is certified by SolTax Pty Ltd. The financial statements including accountant's report of this subsidiary is attached in Appendix C.

1.8 Southeast Exchange Company (South Africa) Pty Ltd

Southeast Exchange Company (South Africa) Pty Limited (the "Company") was incorporated as a private limited company with The Companies and Intellectual Property Commission under registration no. 2011/008619/07 on 15 April 2011. The Company is a wholly owned subsidiary of Southeast Bank Limited.


The subsidiary is registered in South Africa. The Financial Statements of the Company is audited by H Tayob and Co. The financial statements of this Company is attached in Appendix D.

2 Basis of preparation

2.1 Statement of compliance

The Financial Reporting Act, 2015 (FRA) has been enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) is to be formed and it is to issue financial reporting standards for public interest entities such as banks. Section 38 of the Bank Company Act, 1991 (amended up to 2013) has been replaced in 2015 by two new sub-sections to require banks to prepare their financial statements under such financial reporting standards.

The FRC is yet to be formed and as such no financial reporting standards have been issued as per the provi-sions of the FRA. Hence, the consolidated financial statements of the Bank and its subsidiaries and the separate financial statements of the Bank as at and for the year ended 31 December 2016 have been prepared in accor-dance with Bangladesh Financial Reporting Standards (BFRSs) and the requirements of the Bank Company Act, 1991, the rules and regulations issued by Bangladesh Bank (BB), the Companies Act, 1994, the Securities and Exchange Rules, 1987. In case any requirement of the Bank Company Act, 1991 and provisions and circulars issued by BB differ with those of BFRSs, the requirements of the Bank Company Act, 1991 and provisions and circulars issued by BB shall prevail. Material departures from the requirements of BFRSs are as follows:

i) Investment in shares and Securities

BFRS: As per requirements of BAS 39 investment in shares and securities generally falls either under “at fair value through profit and loss account” or under “available for sale” where any change in the fair value (as mea-sured in accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquot-ed shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment.



ii) Revaluation gain (loss) on Government securities

BFRS: As per requirement of BAS 39 where securities; i.e. T-Bills and T-Bonds will fall under the category of Held for Trading (HFT), any change in the fair value of HFT assets is recognized through profit and loss account.Securities; i.e. T-bills designated as Held to Maturity (HTM) are measured at amortized cost method and interest income is recognized through the profit and loss account.

Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognized in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortization of discount are recognized in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortized at the year end and gains on amortization are recognized in other reserve (loss are recognized in profit and loss account) as a part of equity.

iii) Provision on loans and advances

BFRS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012 and BRPD circular no. 05 dated 29 May 2013 a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard loans, doubtful loans and bad/losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on the duration of overdue. Again as per BRPD Circular No.10 dated 18 September 2007 and BRPD Circular No. 14 dated September 23, 2012, the Bank is required to maintain provision @ 1% against Off-Balance Sheet Exposures. Such provision policies are not specifically in line with those prescribed by BAS 39.

However, if there is any stay order issued by the Honorable High Court Division of the Supreme Court of Bangladesh against any non-performing loans for reporting such loans as unclassified category, the Bank maintains at least general provision for such loans under unclassified loan category as per Bangladesh Bank guidelines. Where Bangladesh Bank suggests any additional provision to be maintained for such loans, the Bank also complies with that.

iv) Recognition of interest in suspense

BFRS: Loans and advances to customers are generally classified as 'loans and receivables' as per BAS 39 and interest income is recognized through effective interest rate method over the term of the loan. Once a loan is impaired, interest income is recognized in profit and loss account on the same basis based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans is not allowed to be recognized as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet.

v) Other comprehensive income

BFRS: As per BAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to be included in a Single Comprehensive Income statement.

Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI) statement. As such the Bank does not prepare the OCI statement. However, elements of OCI, if any, are shown in the statements of changes in equity.

vi) Financial instruments - presentation and disclosure

In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 cannot be made in the accounts.

vii) Repo transactions

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 or stock lending), the arrangement is accounted for as a deposit, and the underlying asset continues to be recognized in the entity’s financial statements. This transaction will be treated as loan and the difference between selling price and repurchase price will be treated as interest expense.


ents

Bangladesh Bank: As per BRPD 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 or stock lending), the arrangement is accounted for as a normal sales transactions and the financial assets are derecognized in the seller’s book and recognized in the buyer’s book.

viii) Financial guaranteesBFRS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortized amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14, financial guarantees such as L/C, L/G will be treated as Off-Balance Sheet items. No liability is recognized for the guarantee except the cash margin.

ix) Cash and cash equivalents

BFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7.

Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, Treasury bills, Prize bonds are not shown as cash and cash equivalent. Money at call and on short notice presented on the face of the balance sheet, Treasury bills and Prize bonds are shown in Investments.

x) Non-banking assets

BFRS: No indication of non-banking asset is found in any BFRS.

Bangladesh Bank: As per BRPD 14, there must exist a face item named non-banking assets.

xi) Cash flow statement

BFRS: Cash flow statement can be prepared using either in direct method or in indirect method. The presen-tation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently.

Bangladesh Bank: As per BRPD 14, cash flow is the mixture of direct and indirect method.

xii) Balance with Bangladesh Bank: (Cash reserve ratio)

BFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per BAS 7.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

xiii) Presentation of intangible asset

BFRS: Intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38.

Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14.

xiv) Off-balance sheet items

BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement of disclosure of off-balance sheet items on the face of the balance sheet.

Bangladesh Bank: As per BRPD 14, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately in face of balance sheet

xv) Disclosure of appropriation of profit

BFRS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.

Bangladesh Bank: As per BRPD 14, an appropriation of profit should be disclosed in the face of profit and loss account.

xvi) Loans and advance net of provision

BFRS: Loans and advances should be presented net of provisions.

Bangladesh Bank: As per BRPD 14, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances.

xvii) Recovery of written off loans

BFRS: As per BAS 1, an entity shall not offset assets and liabilities or income and expenses, unless required or permitted by any BFRS. Again recovery of written off loans should be charged to profit & loss account as per BAS 18.



Bangladesh Bank: As per BRPD 14, recoveries of amount previously written off should be adjusted with the specific provision for loans and advances.

(Also refer to note 3.21 Compliance of BFRSs)

2.2 The Bank’s compliance with related pronouncements by Bangladesh Bank

i) Internal control

The objective of internal control is to ensure that management has reasonable assurance that (i) operations are effective, efficient and aligned with strategy, (ii) financial reporting and management information is reliable, complete and timely accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical values including sustainability, and (iv) assets of the company are safeguarded and frauds & errors are prevented or detected.

Southeast Bank Limited has established an effective internal control system whose primary aim is to ensure the overall control of risks and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high level risk culture among the personnel of the Bank, establish efficient and qualified operating model in the Bank, ensure reliability of internal and external information including accounting and financial information, secure the Bank’s operations and assets, and comply with laws, regulatory requirements and internal policies.

The Board of Directors of Southeast Bank Limited, through its Audit Committee, periodically reviews the effectiveness of Bank’s internal control system covering all the material controls, including financial, operational and compliance controls, risk management systems, the adequacy of resources, qualifications and experience of staff of the accounting and financial reporting functions. Board Audit Committee reviews the actions taken on internal control issues identified by the internal and external auditors and regulatory authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of head office, particularly the scope of the annual audit plan and frequency of the internal audit activities.

ii) Risk management

Banking business faces uncertainties in its operating environment, which, if not managed and mitigated, would not only disrupt the achievement of its strategic and operational objectives, but may also cause extensive financial and reputational loss. Effective risk management enables Banks to take better and informed decisions that substantially improve the probability of achieving their strategic and operational objectives. In this connection, every Bank has come forward to establish a general framework to manage the risk factors considering Bangladesh Bank’s guidelines.

As one of the leading Banks in Bangladesh, Southeast Bank Limited (SEBL) has established approved policies in compliance with central bank’s guidelines covering major risk areas such as: (a) Credit (b) Foreign Exchange (c) Asset Liability Management (d) Money Laundering Prevention (e) Internal Control & Compliance (f ) Information and Communication Technology.

For strengthening and updating risk management system, the Bank has developed a manual for core risks assessment in light of the Bangladesh Bank’s Risk Management Guidelines. The purpose of this assessment is to inform management about the loopholes of full fledged implementation of core risks management, risk management culture, restructure minimum standard and assist in the ongoing improvement.

Reports on Risk Management (RRM) are being prepared on monthly, quarterly and semiannually basis and is reviewed in the monthly risk management meeting to have management opinion on the issues identified in RRM.

iii) Internal audit

Internal audit is the continuous and systematic process of examining and reporting on the activities of an organization undertaken by the specially assigned staff(s). Internal auditor works as the Eyes & Ears of the management. It may therefore be used to bridge the gap between management & shop floor. It can assure the management that the internal controls are adequate and in operations, the policies and systems laid down are being adhered to and accounting records provided by the all levels are correct.

Internal audit mechanism is used as an important element to ensure good governance of SEBL. Internal audit activity of SEBL is effective and it provides senior management with a number of important services. These include detecting and preventing errors and fraud, testing internal control, and monitoring compliance with own policies & procedures, applicable rules & regulations, instructions/ guidelines of regulatory authority etc.


ents

During the year 2016, Audit & Inspection Unit of ICCD conducted inspection on most of the branches and some of the important divisions of head office of the Bank as per plan and submitted reports presenting the findings of the audits/ inspections to the appropriate authorities. The bank conducted the risk grading of branches as per Bangladesh Bank guideline. Necessary control measures and corrective actions have been taken on the suggestions or observations made in these reports. The key points of the Reports have also been discussed in the meetings of the Audit Committee of the Board and necessary steps have been taken according to the decision of the said Committee for correct functioning of Internal Controls & Compliance of the Bank.

iv) Fraud and forgeries

Fraud can happen anywhere. Though, only relatively few major frauds are picked up by the media, huge sums are lost by all kinds of businesses against huge number of smaller frauds. The risks of fraud is increasing day by day as a result of growing globalization, more competitive markets, rapid developments in technology, periods of economic difficulty, etc. Banks by virtue of the nature of activities undertaken and its operating environment are vulnerable to frauds, which take place when aggressive business strategy and process for quick growth is adopted without adequate/ appropriate internal controls or non-adhering of operating standards/ controls. In the recent past, incidence of frauds in the Banking industry has increased which calls for concerted steps in investigating the frauds and identifying the fraudsters for eventual criminal prosecution and internal punitive action.

It will never be possible to eliminate all frauds and no system is completely fraud proof, since many fraudsters are able to bypass control systems put in place. SEBL pays attention on anti-fraud internal controls for prevention of fraud and forgery. SEBL assesses/evaluates the effectiveness of its anti-fraud internal control measures on quarterly basis as per the items/areas mentioned in the prescribed checklist of Bangladesh Bank.

2.3 Basis of measurement

The financial statements of the Bank have been prepared on the historical cost basis except for the following:

● Government Treasury Bills and Bonds designated as 'Held for Trading (HFT)' at present value using marking to market concept with gain crediting revaluation reserve

● Government Treasury Bills and Bonds designated as 'Held to Maturity (HTM)' and remeasured Government Treasury Bond at present value using amortisation concept

● Investment in shares of listed companies● Land and buildings are measured at fair value

2.4 Functional and presentation currency

These financial statements are presented in Bangladesh Taka (Taka/Tk) which is the Bank's functional currency. Except as otherwise indicated, financial information presented in Taka has been rounded to the nearest integer.

2.5 Use of estimates and judgments

The preparation of these financial statements in conformity with Bangladesh Bank circulars and BFRSs 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.

Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect in the year ending 31 December 2017 is included in the following notes:

a) Note 3.3.3 : Rate of provision for loans, advances/investmentsb) Note 3.3.4 : Useful lives of depreciable assetsc) Note 21.3.2 : Provision for deferred taxd) Note 24 : Assets revaluation reserve

2.6 Reporting period

These financial statements cover one calendar year from 1 January 2016 to 31 December 2016.



2.7 Cash flow statement

Cash flow statement has been prepared in accordance with the BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

2.8 Statement of changes in equity

The Statement of changes in equity reflects information about the increase or decrease in net assets or wealth.

2.9 Liquidity statements

The consolidated and separate liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term which has been given in the statement.

Consolidated liquidity statements of the Group and the separate liquidity statements of the Bank have been furnished in Annexure-B and Annexure-B.1 respectively.

3 Significant accounting policies

The accounting policy set out below have applied consistently to all periods presented in these consolidated financial statements of the Group and those of the Bank, and have been applied consistently by the group entities.

3.1 Basis of consolidation

The consolidated financial statements include the financial statements of Southeast Bank Limited and its four subsidiaries Southeast Bank Capital Services Limited, Southeast Financial Services (UK) Limited, Southeast Financial Services (Australia) Pty Ltd and Southeast Exchange Company (South Africa) Pty Ltd made up to the end of the financial year.

3.1.1 Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date; i.e. when control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The Group measures goodwill at the acquisition date as:

● the fair value of the consideration transferred; plus

● the recognised amount of any non-controlling interests in the acquiree; plus

● if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less

● the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

3.1.2 Non-controlling interest

For each business combination, the Group elects to measure any non-controlling interests in the acquiree either:

● at fair value; or ● at their proportionate share of the acquiree’s identifiable net assets, which are generally at fair value.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

Subsidiaries are the entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.


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3.1.3 Transactions eliminated on consolidation

Intra-group balances, and income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2 Foreign currency

3.2.1 Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currency of the operation at the spot exchange rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the spot exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction.

Foreign currency differences arising on translation are recognised in profit or loss, except for differences arising on translation of equity investments in respect of which an election has been made to present subsequent changes in fair value in equity.

3.2.2 Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Taka at spot exchange rates at the reporting date. The income and expenses of foreign operations, are translated into Taka at average exchange rates.

Foreign currency differences are presented in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interest.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the net investment in the foreign operation and presented in the translation reserve in equity.

3.3 Assets and basis of their valuation

3.3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and its agent bank, balance with other banks and financial institutions, money at call and on short notice, investments in treasury bills and prize bond.

3.3.2 Investments

All investment securities are initially recognised at cost, including acquisition charges associated with the investment. Premiums are amortised and discounts are accredited.

Held to MaturityInvestments which have, 'fixed or determinable payments' and are intended to be held to maturity are classified as 'Held to Maturity'.

Held for TradingInvestment 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.

Re-measured bondAs per DOS circular letter no. 2 dated 19 January 2012, Treasury bond held in HFT category by the Primary Dealer (PD) may be re-measured at amortized cost instead of fair value.

RevaluationAs per the DOS Circular letter no. 5 dated 26 May 2008, HFT securities are revaluated each week using Marking to Market concept and HTM securities are amortised once a year according to Bangladesh Bank guidelines.

Value of investments has been shown as under:

Government Treasury Bills and Bonds (HFT) At present value (using marking to market concept)Government Treasury Bills and Bonds (HTM) At present value (using amortisation concept)Re-measured Government Treasury Bonds At present value (using amortisation concept)



Bangladesh Government Islamic Bond At costPrize Bonds At costUnquoted shares At cost or net book value of the last audited balance

sheet whichever is lowerQuoted shares At cost or market value whichever is lower at balance

sheet date

Details are shown in notes 8 and 9.

3.3.3 Loans and advances/ investments and provisions for loans and advances/ investments

a) Loans and advances of conventional Banking/Investments of Islamic Banking branches are stated in the Balance Sheet on gross value.

b) Provision for loans and advances is made on the basis of periodical review by the management and of instructions contained in Bangladesh Bank BRPD Circular Nos. 14 and 15 of 23 September 2012, BRPD Circular No. 19 of 27 December 2012, BRPD Circular No. 05 of 29 May 2013 and BRPD circular No. 16 of 18 November 2014. The rates of provision for different classifications are given below:

Particulars RateGeneral provision on:All unclassified loans and advances/investments except followings 1%Small and medium enterprise financing 0.25%Housing finance (HF) and loans for professionals (LP) to set up business

under consumer financing scheme 2%Consumer financing 5%Loan to Brokerage Houses (BHs)/Merchant Banks (MBs)/

Sponsor Directors (SDs) against shares 2%Special mention account (SMA) 0.25%-5%

Specific provision on:

Substandard loans and advances/investments 20%Doubtful loans and advances/investments 50%Bad/loss loans and advances/investments 100%

Provisions for Short term Agricultural and Micro-CreditsAll credits except 'Bad/Loss' (i.e. Doubtful, Substandard, irregular and regular credit)

2.5%-5%

Bad/Loss 100%

c) Loans and advances are written off to the extent thati) there is no realistic prospect of recovery, andii) against which legal cases are filed and classified as bad/loss 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 maintained and followed up.

d) Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.


3.3.4 Fixed assets and depreciation

Recognition and measurement

Items of fixed assets excluding land are measured at cost/revaluation less accumulated depreciation and accumulated impairment losses, if any. Land is measured at revaluation.

Cost includes expenditure that are directly attributable to the acquisition of asset and bringing to the location and condition necessary for it to be capable of operating in the intended manner.

When parts of an item of fixed asset have different useful lives, they are accounted for as separate items (major components) of fixed assets.


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The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds from disposal with the carrying amount of the item of fixed asset, and is recognised in other income/other expenses in profit or loss.

Subsequent costs

The cost of replacing a component of an item of fixed assets is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of fixed assets are recognised in profit or loss as incurred.

Depreciation

Depreciation is recognised in profit or loss on reducing balance method, except motor vehicles which are depreciated on straight line basis, over the estimated useful lives of each part of an item of fixed assets since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. In case of acquisition of fixed assets, depreciation is charged from the month of acquisition, whereas depreciation on disposed off fixed assets is charged up to the month prior to the disposal. Asset category-wise depreciation rates for the current and comparative years are as follows:

Category of assets Rate of depreciationLand NilBuildings 4%Furniture and fixtures 10%Office appliances 20%Professional and reference books 30%Electrical appliances 20%Computer 20%ATM Booth 20%Motor vehicles 20%

Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted, if appropriate.

3.3.5 Leased assets – lessee

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and are not recognised in the Group’s Balance Sheet.

3.4 Liabilities and basis of their valuation

3.4.1 Borrowings from other banks, financial institutions and agents

Borrowings from other banks, financial institutions and agents includes refinance from Bangladesh Bank against agro-based credit, SME Loan etc., interest-bearing borrowings against securities from Bangladesh Bank and call borrowing from other banks. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in notes 16 and 17.

3.4.2 Deposits and other accounts

Deposits and other accounts include non interest-bearing current deposit redeemable at call, interest bearing on demand and short-term deposits, savings deposit and fixed deposit. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in notes 18 and 19.

3.4.3 Other liabilities

Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest suspense, accrued expenses, obligation under finance lease etc. Other liabilities are recognised in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance, 1984 and internal policy of the Bank. Details are shown in notes 20 and 21.

3.5 Capital/Shareholders' equity

3.5.1 Authorised capital

Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of Association.

Details are shown in note 22.1



3.5.2 Paid up capital

Paid up capital represents total amount of shareholder capital that has been paid in full by the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in note 22.2.

3.5.3 Statutory reserve

Statutory reserve has been maintained @ 20% of profit before tax in accordance with provisions of section 24 of the Bank Companies Act 1991, until such reserve equals to its paid up capital together with the share premium.

3.5.4 Revaluation reserve

Revaluation reserve arises from the revaluation of land and buildings as well as the revaluation of Treasury bills and bonds (HFT & HTM) in accordance with the DOS circular no. 5 dated 26 May 2008 and DOS(SR) 1153/120/2010 dated 8 December 2010. The tax effects on revaluation gain are measured and recognised in the financial statements as per BAS 12: Income Taxes.

Details are shown in note 24.

3.6 Contingent liabilities

A contingent liability is -

A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or

A present obligation that arises from past events but is not recognised because:

- it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

- the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated.

Contingent assets are not recognised in the financial statements as this may result in the recognition of income which may never be realised.

3.7 Revenue recognition

3.7.1 Interest income (Conventional Banking)

Interest on loans and advances is calculated on daily product basis and accrued at the end of each month, but charged to customers' accounts on quarterly basis. Interest accrued on loans and advances fall under Sub Standards (SS) and Doubtful (DF) category are credited to interest suspense account instead of income account. Interest is not charged on bad and loss loans as per guideline of Bangladesh Bank. Such interest is kept in separate memorandum account. Interest on classified loans and advances is accounted for on a cash receipt basis. Interest income from fixed deposit with other banks and call lending to other banks is recognized on accrual basis.

3.7.2 Profit on investment (Islamic Banking)

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.

3.7.3 Investment income

Income on investments is recognised on accrual basis. Investment income includes discount on treasury bills and interest on treasury bonds. Capital gain on investments in shares is also included in investment income. Capital gain is recognised when it is realised.

3.7.4 Fees and commission income

The Bank earns fees and commissions from diverse range of services provided to its customers. Fees and commission income is recognised on a realisation basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.


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3.8 Interest paid on borrowing and other deposits (Conventional Banking)

Interest paid and other expenses are recognised on accrual basis.

3.9 Profit shared on deposits (Islamic Banking)

Profit shared to mudaraba deposits is recognised on accrual basis as per provisional rate.

3.10 Dividends

Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend date for equity securities. Dividends are presented in investment income.

3.11 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.

Lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

3.12 Employee benefits

3.12.1 Provident Fund

Provident fund benefits are given to the staff of the Bank in accordance with the registered provident fund rules. The commissioner of Income Tax, Large Tax Payers Unit (LTU), Dhaka has approved the Provident Fund as a recognized fund within the meaning of section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The fund is operated by a Board of Trustees consisting of 6 (six) members of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as subscription of the fund. The Bank also contributes equal amount to the fund. Contributions made by the Bank are charged as expense and the bank bears no further liability. Interest earned from the investments is credited to the members' account on half yearly basis. Members are eligible to get both the contribution after 5 (five) years of continuous service from the date of their membership.

3.12.2 Gratuity Fund

Gratuity fund benefits are given to the staff of the Bank in accordance with the approved gratuity fund rules. National Board of Revenue has approved the gratuity fund as a recognized gratuity fund with effect from December 2001. The fund is operated by a Board of Trustees consisting of 7 (seven) members of the Bank. Employees are entitled to gratuity benefit after completion of minimum 7 (seven) years of service in the Bank. The amount payable at the date of balance sheet is recognised and accounted for as at that date based on actual rate. The gratuity is calculated on the basis of last basic pay and is payable at the rate of one month's basic pay for every completed year of service. The amount so calculated are transferred to the fund and charged to expenses of the Bank.

3.12.3 Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

3.12.4 Workers' Profit Participation Fund (WPPF)

As per Bangladesh Labour Act 2006 and SRO no. 336/Law/2010, all companies fall within the scope of WPPF are required to provide 5% of its profit before charging such expense to their eligible employees within the stipulated time. The Bank obtained opinion from its legal advisor regarding this issue. The legal advisor opined that, "Southeast Bank Limited being governed by Banking Companies Act, 1991 is obliged to follow the provisions of Banking Companies Act, 1991, and Banking Companies Act, 1991 being a special law, provisions of this Act shall prevail over Bangladesh Labour Laws, 2006 (amended in 2013) which is a general law. Thus, we take the view that the Bank is not bound to form a WPPF under Bangladesh Labour Laws, 2006 (amended in 2013)". Consistent with the industry practice and in accordance with the legal opinion and the Bank Company Act, 1991 (amended in 2013), no provision has been made for WPPF.

3.13 Provisions and accrued expenses

In compliance with BAS-37, provisions and accrued expenses are recognized in the consolidated and separate financial statements when the Group/Bank has a legal or constructive obligation as a result of past event, it is probable that an outflow of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.


3.14 Provision for Off-Balance Sheet Exposures

In compliance with Bangladesh Bank guidelines off-balance sheet items are disclosed under contingent liabilities. As per BRPD Circular No.10 dated 18 September 2007 and BRPD Circular No. 14 dated 23 September 2012, the Bank is required to maintain provision @ 1% against off-balance sheet exposures. Details are shown in note 21.5.1 (C).

3.15 Provision for Nostro Accounts

According to guideline of Foreign Exchange Policy Department of Bangladesh Bank, Circular No. FEOD (FEMO)/01/2005-677 dated 13 September 2005, Bank is not required to make provision regarding the un-reconciled debit balance as at Balance Sheet date since there was no debit entries more than three month.

3.16 Tax expense

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity.

3.16.1 Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Details are shown in note 21.3.1.

3.16.2 Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:

● temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;

● temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and

● temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax relating to unrealised surplus on revaluation of held to maturity (HTM) securities and held for trading (HFT) securities and land and buildings are recognised directly in revaluation reserve as a part of equity and is subsequently recognised in profit and loss account on maturity of the security and disposal of land and buildings. Details are shown in note 21.3.2.

3.16.3 Tax exposures

In determining the amount of current and deferred tax, the Bank takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Bank to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

3.17 Impairment of non-financial assets

The carrying amounts of the Group’s and the Bank's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its Cash Generating Unit (CGU) exceeds its estimated recoverable amount.


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The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows 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 or CGU.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount of the other assets in the CGU (group of CGUs) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.18 Earnings per share

The Group and the Bank present basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group/ Bank by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.


3.19 Reconciliation of inter-bank/inter-branch account

Books of 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 in case of inter-branch transactions as at the reporting date are not material. 3.20 Risk management

In the context of Banking and Finance 'Risk' has always been at the heart of banking. As a consequence, it has become more important for banks to manage effectively the various types of risk they confront, including market, credit, liquidity, operations, and information technology risk.

Effective risk management is an essential element of our operations and strategy. The Bank monitors risk at all levels throughout its operations and has established units to manage various types of risk. Our risk management framework is designed to identify, manage and mitigate the risk of any failure to achieve business objectives.

The risk management of the Bank covers following six core risk areas:i) Credit Riskii) Foreign Exchange Riskiii) Asset Liability Management Riskiv) Money Laundering Riskv) Internal Control & Compliance Risk; andvi) Information and Communication Technology Risk

The Bank’s risk management policy and process are composed with all the structures, policies, process and strategies in the line with the guidelines of central bank and other regularity authorities. The Bank endeavors to maximize profits through the development of an integrated risk management system.

3.20.1 Credit risk

Credit risk is the possibility that a borrower or counter party will fail to repay the borrowed money as per the agreed terms and conditions. Managing Credit risk of the Bank in an efficient manner has become one of the most crucial tasks for the management. Given the fast changing, dynamic global economy, implementation of Basel-III and the increasing pressure of globalization and liberalization it is essential that banks have robust credit risk management policies and procedures that are sensitive and responsive to these changes.


A thorough assessment & due diligence are done before sanction of any credit facility at Credit Risk Management Division (CRM) of the Bank. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facilities and various critical risk factors. The assessment process starts at Branch Credit department by the Officer and ends at Credit Risk Management Division (CRM) in Head Office where it is approved / declined by the competent authority. Credit approval authority has been partially delegated to the individual executives. Proposal beyond their delegation are approved / declined by the Board / Executive Committee (EC) of the Board.

3.20.2 Foreign Exchange Risk

Foreign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates. The risk is that adverse fluctuations in exchange rates may result in a loss in earnings. As per the guidelines of Bangladesh Bank, Southeast Bank Limited has developed a detailed Foreign Exchange Risk Management policies to minimize different types of risks associated with foreign exchange transactions. The Bank has also developed different strategies to handle foreign exchange risk by setting different types of limits and risk parameters to measure and monitor foreign exchange risk exposure of the Bank.

The foreign exchange desk of treasury division is involved in foreign exchange dealing activities with different counterparts; the treasury back office is engaged in transfer of funds and passing of the transaction entries in the books of accounts, and the mid office is responsible for verification of the deals. All foreign exchange transactions are revalued at market rate as per the directive of Bangladesh Bank. All nostro accounts are reconciled on a monthly basis and outstanding entries beyond 30 days are reviewed by the management for its settlement.

3.20.3 Asset Liability Management

Banks are exposed to the several risks such as Liquidity Risk, Interest Rate Risk, Foreign Exchange Risk, Credit Risk and Operational Risk etc. Monitoring and controlling of these risks is vital to the survival of a financial institution. Asset-Liability Management is a tool to oversee whether different balance sheet risks are properly identified, appropriate policies and procedures are well established to control and limit these risks.

Asset-Liability Committee (ALCO) reviews country’s overall economic position, the Bank’s liquidity position, key performance ratios, interest rate risk, deposit and advance growth, cost of deposit & yield on advances, deposit & lending pricing strategy and different forecasted balance sheet risks of the Bank.

3.20.4 Money Laundering Risk

Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. If money laundering is done successfully, it allows the criminals to maintain control over their proceeds and ultimately to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions of the drug trafficker, the terrorist, the organized criminal, the insider dealer, the tax evader as well as many others who need to avoid the attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.

Southeast Bank Limited (SEBL) has implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably designed to comply with applicable laws and regulations. It is the policy of SEBL to take all reasonable and appropriate steps to prevent persons engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or terrorist operations, from utilizing SEBL products and services. SEBL makes every effort to remain in full compliance with all applicable AML and CFT laws, rules and standards in the jurisdictions in which it does business.

In order to facilitate compliance with AML and CFT requirements, SEBL has appointed one of its Senior Executives as the CAMLCO (Chief Anti-Money Laundering Compliance Officer) and a team of employees with experience on AML and CFT requirements under law to oversee the Bank's AML and CFT program. SEBL has developed and implemented written AML and CFT policies, procedures, internal controls and systems, which include (but not limited to) a customer identification program and procedures; procedures to collect and refresh, as appropriate, customer due diligence information; processes to assess risk; processes and systems to monitor customer transactions and activity; processes and systems to identify and report suspicious activity; and, processes to keep required records. SEBL educates its all employees on AML and CFT requirements and activities and also subjects its AML and CFT program to regular independent testing. SEBL cooperates fully with law enforcement and regulatory investigations and inquiries in identifying the criminals involve in Money Laundering and Terrorist Activities/Financing.


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3.20.5 Internal Control & Compliance Risk

Internal control is fundamental to the successful operation and day-to-day running of a business and it assists the bank in achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and management processes, covering the bank’s entire range of activities and operations, and not just those directly related to financial operations and reporting. Its scope is not confined to those aspects of a business that could broadly be defined as compliance matters, but extends also to the performance aspects of a business.

SEBL has established a System of Internal Control, which is designed to manage all the risks of failure to a reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable assurance of effective & efficient operations covering all controls including financial & operational controls, reliability of the financial information, compliance with applicable laws & regulations, adherence to management policies, safeguarding of Bank’s Assets, prevention & detection of fraud & errors, and accuracy & completeness of the accounting records.

The Board of Directors of SEBL regularly reviews the effectiveness of internal control process through its Audit Committee and the Audit Committee plays an effective role amongst the Board of Directors, Management, Shareholders, Depositors and develops an efficient, powerful and a safe banking system. The committee also performs a very important role for publishing Bank’s financial statements, developing an appropriate internal control system and maintains an effective communication with internal and external auditors. It significantly contributes in controlling and monitoring various risks factors that arise from the business activities of the Bank. Board Audit Committee reviews the actions taken on internal control issues identified in the reports prepared by the internal & external auditors and regulatory authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities.

3.20.6 Information and communication technology

The Bank has Centralized Core Banking Software (CBS) and providing online banking services to its clients through 128 Branches across the country. The Core Banking Software (CBS) has further been upgraded to its latest release to enhance existing features and functionalities and secure online banking transaction. The Bank is offering 24/7 banking services through establishing country wide alternate delivery channels, like ATM and Mobile Financial Service (MFS). It has also introduced Internet Banking service. For customer convenience, the Bank is collecting utility bills of DPDC, DESCO, WASA, Titas Gas and BTCL, PDB and Student Tuition Fees of North-South, BRAC and Asia Pacific University through its alternate delivery channels other than over the counter of its online Branches. Two Factor Authentication System (2-FA) has been introduced for doing inter-bank fund transfer or to pay utility bills/student tuition fees through Internet Banking system. SMS and E-Mail Alert services are available for any debit/credit transaction through online and internet banking or using Bank’s Debit / Credit Card as a deterrent against fraudulent transaction attempts. Data replication and synchronization between DC (Data Center) and DRS (Disaster Recovery Site) has been established through two dark fiber optic cables to ensure availability of data / information. The Bank has also deployed Web Gateway and Web Application Firewall to further strengthen its system infrastructure. This will secure its internal network and server system by way of giving protection of information that flows to and from the internet.

The Bank has reviewed and taken instant steps to procure and deploy industry leading IT security solutions to plug off security gaps. Bank’s ICT Security Policy has been revised according to the guideline on ICT Security for Banks and NBFIs of Bangladesh Bank which was published in October 2015 to cope with evolving changes in the ICT environment. The Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP) and ICT Risk Management Policy have also been revised. Gradual implementation of the different policies is being carried out. The network connectivity of the SWIFT payment channel has been reviewed and restructured to ensure security and minimize operational risks. As part of building awareness on ICT Security and Risk among the employees of the Bank, regular training program is being arranged.

3.20.7 Environmental Risk Management (ERM)

Environmental Risk is a facilitating element of credit risk arising from environmental issues and applicable across all financing transactions undertaken by the Bank. The responsibilities of Credit Risk Management functions are: i) to be aware of environmental issues confronting the various sectors, ii) to review the completed due-diligence checklist and the environmental risk rating, iii) to integrate environmental risk considerations into the credit risk assessment and iv) to specify financing conditions/covenants , if any, are required.

Environmental risk is assessed by Environmental Due Diligence (EDD) Checklists. It is a set of questionnaire provided by Bangladesh Bank. There are eleven checklists, one for general purpose and ten others for ten specific sectors for environmental risk rating. For a specific sector both General EDD and Specific EDD checklists are applicable and for other than these specific sectors only General EDD checklist is applicable to determine the environmental risk rating (EnvRR). The EnvRR can be High, Moderate or Low depending on the borrower’s business activity and the vulnerability of the location of the business activity.


3.21 Compliance of Bangladesh Financial Reporting Standards (BFRSs)

Name of the standards Ref. Status

First-time Adoption of Bangladesh Financial Reporting Standards BFRS-1 Not applicableShare-based Payment BFRS-2 Not applicableBusiness Combinations BFRS-3 AppliedInsurance Contracts BFRS-4 Not applicableNon-current Assets Held for Sale and Discontinued Operations BFRS-5 Not applicableExploration for and Evaluation of Mineral Resources BFRS-6 Not applicableFinancial Instruments: Disclosures BFRS-7 * AppliedOperating Segments BFRS-8 ** AppliedConsolidated Financial Statements BFRS-10 AppliedJoint Arrangements BFRS-11 Not applicableDisclosure of Interests in other Entities BFRS-12 AppliedFair Value Measurement BFRS-13 * AppliedRegulatory Deferral Accounts BFRS-14 Not applicablePresentation of Financial Statements BAS-1 * AppliedInventories BAS-2 Not ApplicableStatement of Cash Flows BAS-7 * AppliedAccounting Policies, Changes in Accounting Estimates and Errors BAS-8 AppliedEvents after the Reporting Period BAS-10 AppliedConstruction Contracts BAS-11 Not ApplicableIncome Taxes BAS-12 AppliedProperty, Plant and Equipment BAS-16 AppliedLeases BAS-17 AppliedRevenue BAS-18 AppliedEmployee Benefits BAS-19 AppliedAccounting for Government Grants and Disclosure of Government Assistance BAS-20 Not Applicable

The Effects of Changes in Foreign Exchange Rates BAS-21 AppliedBorrowing Costs BAS-23 AppliedRelated Party Disclosures BAS-24 AppliedAccounting and Reporting by Retirement Benefit Plans BAS-26 Not ApplicableSeparate Financial Statements BAS-27 AppliedInvestments in Associates BAS-28 Not ApplicableInterests in Joint Ventures BAS-31 Not ApplicableFinancial Instruments: Presentation BAS-32 * AppliedEarnings per Share BAS-33 AppliedInterim Financial Reporting BAS-34 AppliedImpairment of Assets BAS-36 AppliedProvisions, Contingent Liabilities and Contingent Assets BAS-37 * AppliedIntangible Assets BAS-38 * AppliedFinancial Instruments: Recognition and Measurement BAS-39 * AppliedInvestment property BAS-40 Not ApplicableAgriculture BAS-41 Not Applicable* Subject to departure described in note 2.1** Subject to departure described in note 3.25


ents

New standards:

The Institute of Chartered Accountants of Bangladesh (ICAB) has adopted following new standards during the year 2015-2016. All previously adopted reporting standards are consistently applied by the Bank to the extent relevant for the Bank.

New standards Summary of the requirements Possible impact on financia

BFRS 9 Financial Instruments

BFRS 9 replaces the existing guidance in BAS 39 Financial Instruments: Recognition and Measurement. BFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from BAS 39.BFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.

The Bank is assessing the potential impact on its financial statements resulting from the application of BFRS 9.

BFRS 15 Revenue from Contracts with Customers

BFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including BAS 18 Revenue, BAS 11 Construction Contracts and BFRIC 13 Customer Loyalty Programmes.BFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.

The Bank is assessing the potential impact on its financial statements resulting from the application of BFRS 15.

3.22 Credit Rating of the Bank

As per the BRPD circular No.6 dated 5 July 2006, the bank has done its credit rating by Credit Rating Information and Services Limited (CRISL) based on the audited financial statements dated 31 December 2015

Particulars Date of Rating Long term Short term

Surveillance Rating23-Jun-16

AA ST-2Double A

(High quality and High Safety)

(High Grade)

Outlook Stable

3.23 Correspondence items

Correspondence 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. Stock of travelers cheques, savings certificates, wage earners bond and others fall under the correspondence items.

3.24 Offsetting

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group and the Bank have a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Income and expenses are presented on a net basis only when permitted under BFRSs, or for gains and losses arising from a group of similar transactions such as in the Group’s trading activity.


3.25 Operating segments

The Group and the Bank have no identified operating segment and as such presentation of segmental reporting is not made in the financial statements as per BFRS 8. However, geographical and business segments wise limited disclosures are furnished in Annexure-I.

3.26 Going concern basis of accounting

These financial statements have been prepared on the assessment of the Bank’s ability to continue as a going concern. The Bank has neither any intention nor any legal or regulatory compulsion to liquidate or curtail materially the scale of any of its operations. The key financial parameters (including liquidity, profitability, asset quality, provision sufficiency and capital adequacy) of the Bank continued to exhibit a healthy trend for couple of years. Besides, the management is not aware of any material uncertainties that may cast significant doubt upon the Bank’s ability to continue as a going concern.

3.27 Approval of financial statements

The financial statements were approved by the board of directors on 8 April 2017.

3.28 General

Figures of previous year have been rearranged, whenever necessary, to conform the current year's presentation.


ents

4 Consolidated cash

In hand (including foreign currencies):Southeast Bank Limited 4.1 2,428,412,898 1,903,292,780 Southeast Exchange Company (South Africa) Pty Ltd 4,164,053 - Southeast Financial Services (Australia) Pty Ltd 43,356 -

2,432,620,307 1,903,292,780 Balance with Bangladesh Bank and its agent banks(including foreign currencies):

Southeast Bank Limited 4.1 15,402,827,761 14,093,697,688 17,835,448,068 15,996,990,468

4.1 Cash

In hand:Local currency 2,381,811,031 1,850,553,332 Foreign currencies 46,601,867 52,739,448

2,428,412,898 1,903,292,780 Balance with Bangladesh Bank:

Local currency 14,733,980,769 13,333,892,854 Foreign currencies 378,978,102 586,094,753

15,112,958,871 13,919,987,607 Balance with Sonali Bank Limited (as agent of Bangladesh Bank):

Local currency 289,868,890 173,710,081 Balance with Bangladesh Bank and its agent banks 15,402,827,761 14,093,697,688 (including foreign currencies)

17,831,240,659 15,996,990,468

4.2 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with section 33 of the Bank Companies Act, 1991 (Amended up to 2013), MPD Circular nos. 4 and 5 dated 1 December 2010 and MPD Circular no. 1 and 2 dated 23 June 2014 and 10 December 2013 respectively and DOS Circular no. 1 dated 19 January 2014.

The statutory Cash Reserve Ratio on the Bank's demand and time liabilities at the rate of minimum 6.0% on daily basis and 6.50% on bi-weekly basis for conventional and Islamic banking has been calculated and maintained with Bangladesh Bank in current account and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory Liquidity Ratio for Islamic banking on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including excess cash reserve balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below:

4.2.1 a) Cash Reserve Ratio (CRR) for Conventional Banking

6.50% of average Demand and Time Liabilities:

Required reserve (Average daily on bi-weekly basis) 14,028,676,662 12,257,453,364 Actual reserve held 14,188,314,690 12,559,045,682 Surplus 159,638,028 301,592,318

b) Cash Reserve Ratio (CRR) for Islamic Banking

6.50% of average Demand and Time Liabilities:

Required reserve (Average daily on bi-weekly basis) 815,652,913 783,041,796 Actual reserve held 870,294,183 834,839,164 Surplus 54,641,270 51,797,368

Note 2016 Taka

2015 Taka


4.2.2 a) Statutory Liquidity Ratio (SLR) for Conventional Banking

Required reserve (13% of average Demand and Time Liabilities:) 28,057,353,324 24,514,906,728 Actual reserve held 56,373,180,749 54,255,264,173 Surplus 28,315,827,425 29,740,357,445

Held for Statutory Liquidity Ratio of Conventional Banking:

Cash in hand 2,289,521,421 1,817,641,355 Balance with agent bank (Sonali Bank Limited) as per statement 274,217,000 155,245,000 Excess cash reserve 159,638,028 301,592,318 Government Securities (HFT) 21,205,497,000 21,864,407,000 Government Securities (HTM) 32,440,264,000 30,110,991,000 Other eligible securities/ Prize Bond 4,043,300 5,387,500

56,373,180,749 54,255,264,173

b) Statutory Liquidity Ratio (SLR) for Islamic Banking

Required reserve (5.50 % of average Demand and Time Liabilities:) 690,167,850 662,573,830 Actual reserve held 859,075,747 777,844,023 Surplus 168,907,897 115,270,193

Held for Statutory Liquidity Ratio of Islamic Banking:

Cash in hand 138,891,477 85,651,425 Balance with agent bank (Sonali Bank Limited) as per statement 15,543,000 395,230 Excess cash reserve 54,641,270 51,797,368 Government Securities (HTM) 650,000,000 640,000,000

859,075,747 777,844,023

5 Consolidated balance with other banks and financial institutions

In Bangladesh:Southeast Bank Limited 6 2,860,092,475 2,187,972,750 Southeast Bank Capital Services Limited 581,276,914 21,374,639

3,441,369,389 2,209,347,389 Less: Inter company balance eliminated 581,276,914 21,374,639

2,860,092,475 2,187,972,750 Outside Bangladesh:

Southeast Bank Limited 6 1,118,618,354 1,149,021,361 Southeast Financial Services (UK) Ltd 2,542,480 3,473,088 Southeast Financial Services (Australia) Pty Ltd 177,967 2,268,786 Southeast Exchange Company (South Africa) Pty Ltd 63,790,138 48,587,080

1,185,128,939 1,203,350,315 4,045,221,414 3,391,323,065

6 Balance with other banks and financial institutions

In Bangladesh 6.1 2,860,092,475 2,187,972,750 Outside Bangladesh 6.2 1,118,618,354 1,149,021,361

3,978,710,829 3,336,994,111

Also refer to note 6.3 for maturity wise grouping

Note 2016 Taka

2015 Taka


ents

6.1 In Bangladesh

Current account with:Agrani Bank Limited 575,850 575,850 Al Arafah Islami Bank Limited 14,894,941 14,011,899 BRAC Bank Limited 5,001 1,774,610 BRAC Bank Limited (El Dorado Network) 543,506 3,964,484 Commercial Bank of Ceylon PLC 13,337 13,337 EXIM Bank Limited 8,758,775 7,120,339 The Farmers Bank Limited 6,614,752 2,553,122 Jamuna Bank Limited 34,804,125 27,253,637 Meghna Bank Limited 3,129,809 2,316,169 Mercantile Bank Limited 5,538,588 5,410,710 Modumoti Bank Limited 2,301,653 2,569,738 Mutual Trust Bank Limited 13,832,137 17,869,673 National Bank Limited 19,074 12,210 One Bank Limited 1,742,091 3,735,933 Prime Bank Limited 2,008 3,158 Sonali Bank Limited (326,533) 2,589,257 Shahjalal Islami Bank Limited 550,000 550,000 Trust Bank Limited 3,160,509 3,160,509 Union Bank Limited 14,251,563 6,194,312 United Commercial Bank Limited 16,782,341 5,345,854 NRB Commercial Bank Limited 100,000 100,000 South Bangla Agriculture & Commerce Bank Limited 491,452 1,611,292

127,784,979 108,736,093 Savings deposits account with:

EXIM Bank Limited - 110,557 Social Islami Bank Limited - 108,679

- 219,236 Short term deposits account with:

AB Bank Limited 28,005 28,004 The City Bank Limited 1,106,755 1,106,755 Eastern Bank Limited 29,556 29,556 EXIM Bank Limited 120,792 184,254 Standard Chartered Bank 4,232,231 2,430,368 Sonali Bank Limited 26,789,812 25,238,139 Uttara Bank Limited 345 345

32,307,496 29,017,421 Fixed deposits with other banks:

The Farmers Bank Limited - 50,000,000 NRB Global Bank Limited 250,000,000 - One Bank Limited 500,000,000 - Social Islami Bank Limited 300,000,000 - The ICB Islamic Bank Limited - 1,000,000,000

1,050,000,000 1,050,000,000

Fixed deposits with financial institutions:Bay Leasing and Investment Limited 500,000,000 450,000,000 Fareast Finance and Investment Limited - 100,000,000 Industrial and Infrastructure Development Finance Company Limited 100,000,000 - IPDC Finance Limited 200,000,000 - International Leasing and Financial Services Limited 100,000,000 200,000,000 Union Capital Limited 100,000,000 - Bangladesh Industrial Finance Company Limited 150,000,000 50,000,000 GSP Finance Company (Bangladesh) Limited - 200,000,000 Investment Corporation of Bangladesh 500,000,000 -

1,650,000,000 1,000,000,000 2,860,092,475 2,187,972,750

Note 2016 Taka

2015 Taka


6.2 Outside Bangladesh

Current accountInterest bearing:

Standard Chartered Bank, New York, USA 79,939,791 162,867,320 Standard Chartered Bank, New York OBU 2,502,922 25,993,493 Citibank N.A, New York, USA 12,320,169 6,230,285 Standard Chartered Bank, London, UK 35,706,219 10,421,686 Mashreq Bank PSC, New York, USA 378,944,176 536,105,342 Wells Fargo Bank, N.A., New York, USA 43,158,173 17,096,588 Citibank AG, Frankfurt, Germany 2,966,473 (4,849,259)Standard Chartered Bank, Calcutta, India 5,150,727 16,498,010 AB Bank Ltd., Mumbai, India 34,012,582 15,948,685 ICICI Bank Ltd., Mumbai, India 3,331,684 3,140,691 JP Morgan Chase Bank N.A., New York, USA 144,963,770 42,798,605 Habib American Bank, New York, USA 54,519,931 15,442,516 Mashreq Bank, Mumbai, India 13,876,284 16,181,958 Mashreq Bank, Mumbai, India 1,278,977 6,467,370 Sonali Bank (UK) Ltd. USD 54,288,239 102,989,122 Sonali Bank (UK) Ltd. GBP 16,012,568 8,114,118 Sonali Bank (UK) Ltd. EURO 2,442,370 4,772,406

885,415,055 986,218,936 Non-interest bearing:

Bank of Nova Scotia, Toronto, Canada - 2,517,501 United Bank Limited, Karachi, Pakistan 12,773,370 289,179 Standard Chartered Bank, Colombo, Srilanka 15,961,921 9,240,541 Standard Chartered Bank, Mumbai (AEB), India 1,987,849 1,982,525 Habib Allied Intl Bank, UK EUR 6,024,463 - Bank of Tokyo, Mitsubishi, JPY 1,258,241 - Nepal Bangladesh Bank Ltd., Kathmandu, Nepal 3,789,947 2,357,015 Bank of Bhutan, Pheuntsholing, Bhutan 6,233,334 2,994,202 Commerz Bank AG, Frankfurt, Germany EURO 4,947,574 598,944 Commerz Bank AG, Frankfurt, Germany USD 39,325,786 41,682,998 U.B.A.F., Tokyo, Japan - 5,482,794 Zuercher Kantonal Bank, Zurich, Switzerland 10,784,568 10,945,034 National Australia Bank Ltd., Melbourne, Australia

7,725,805 21,916,941

HDFC Bank, Mumbai, India 83,931,106 54,238,086 Habib Bank AG Zurich, Zurich, Switzerland 1,830,346 1,951,850 Mashreq Bank PSC, Dubai, UAE 2,229,915 144,445 Habib Metropoliton Bank Ltd., Karachi, Pakistan 28,769,758 4,408,327 Al Rajhi Bank, Saudi Arabia 5,629,316 2,052,043

233,203,299 162,802,425 1,118,618,354 1,149,021,361

Details of Balance with other banks-Outside Bangladesh shown in Annexure-C.

6.3 Maturity grouping of balance with other banks and financial institutions

On demand 1,246,403,333 1,094,955,029 Not more than three months 2,632,307,496 2,042,039,082 More than three months but not more than six months 100,000,000 200,000,000 More than six months but not more than one year - - More than one year but less than five years - - Above five years - -

3,978,710,829 3,336,994,111

Note 2016 Taka

2015 Taka


ents

7 Money at call and on short notice

In bank: The ICB Islamic Bank Limited 11,300,000 15,300,000 NRB Commercial Bank Limited - 220,000,000 NRB Bank Limited - 40,000,000 Bank Al Falah Ltd. - 100,000,000 Habib Bank Limited, Dhaka - 150,000,000 Midland Bank Limited 200,000,000 - Modhumoti Bank Limited 200,000,000 - BRAC Bank Limited 230,000,000 - NCC Bank Limited 800,000,000 -

1,441,300,000 525,300,000 In non-banking financial institutions (public and private):

Phoenix Finance and Investment Limited 190,000,000 - IPDC Finance Limited 100,000,000 - LankaBangla Finance Ltd. 100,000,000 -

390,000,000 - In foreign currency:

AB Bank Limited 708,399,900 398,151,500 BRAC Bank Limited 314,844,400 - Premier Bank Limited 314,844,400 - NCC Bank Limited 236,133,300 - Social Islami Bank Limited 157,422,200 - Commercial Bank of Ceylon PLC 236,133,300 - Mutual Trust Bank Limited 78,711,100 - Eastern Bank Limited 393,555,500 -

2,440,044,100 398,151,500 4,271,344,100 923,451,500

8 Consolidated Investments

Government securities:Southeast Bank Limited 9 54,299,803,894 52,620,785,540

54,299,803,894 52,620,785,540 Others:

Southeast Bank Limited 9 5,155,205,613 4,267,629,032 Southeast Bank Capital Services Limited 2,276,624,953 1,940,851,629

7,431,830,566 6,208,480,661 61,731,634,460 58,829,266,201

9 Investments

Government securities:Conventional Banking 9.1.1 53,649,803,894 51,980,785,540 Islamic Banking 9.2.1 650,000,000 640,000,000

54,299,803,894 52,620,785,540 Others:

Conventional Banking 9.1.2 2,267,841,260 1,093,455,544 Islamic Banking 9.2.2 2,887,364,353 3,174,173,488

5,155,205,613 4,267,629,032 59,455,009,507 56,888,414,572

Also refer to notes 9.3 to 9.8 for further analysis, maturity wise grouping, market value information, sector wise investment, etc.

Note 2016 Taka

2015 Taka


2016 Taka

2015 Taka

9.1 Conventional Banking

9.1.1 Government Securities

Treasury Bills364 days Treasury Bills 991,930,001 985,535,100

991,930,001 985,535,100 Assured Repo with Bangladesh Bank/ Others (at book value) - (295,937,100)

991,930,001 689,598,000

Prize Bonds 4,043,300 5,387,500 Bangladesh Bank Bills - -

4,043,300 5,387,500 Government Bonds2 Years BGTB HTM 1,324,190,350 172,000,000 5 Years BGTB HTM 5,059,213,001 4,095,252,659 10 Years BGTB HTM 13,114,179,977 12,226,663,613 15 Years BGTB HTM 6,496,362,680 4,664,118,802 20 Years BGTB HTM 5,484,568,752 3,890,282,974 Remeasured 5 years BGTB HTM - 4,102,785,342 Remeasured 10 years BGTB HTM 961,749,167 959,887,889 2 Years BGTB HFT 3,197,926,886 5,866,512,662 5 Years BGTB HFT 9,452,112,789 8,647,430,447 10 Years BGTB HFT 7,184,666,536 5,254,892,396 15 Years BGTB HFT 167,447,843 1,155,363,067 20 Years BGTB HFT 211,412,612 250,610,189

52,653,830,593 51,285,800,040 53,649,803,894 51,980,785,540

9.1.2 Others

Shares in listed companies 1,006,352,650 878,467,734 Shares in un-listed companies 61,488,610 214,987,810 Bonds 1,200,000,000 -

2,267,841,260 1,093,455,544

9.2 Islamic banking

9.2.1 Government securities

Bangladesh Government Islamic bond 650,000,000 640,000,000 650,000,000 640,000,000

9.2.2 Others

Shares in listed companies 2,887,364,353 3,174,173,488 2,887,364,353 3,174,173,488

9.3 Investments classified as per Bangladesh Bank Circular

Held for trading (HFT) 21,209,539,967 21,869,794,261 Held to maturity (HTM) 33,090,263,927 30,750,991,279 Other securities 5,155,205,613 4,267,629,032

59,455,009,507 56,888,414,572

9.4 Maturity-wise grouping of investment

On demand 4,043,300 5,387,500 Not more than three months 2,343,870,935 3,965,660,049 More than three months but not more than one year 7,032,299,074 9,737,790,409 More than one year but not more than five years 25,889,694,776 22,646,851,734 Above five years 24,185,101,422 20,532,724,880

59,455,009,507 56,888,414,572


ents

9.5 Cost and market value of investments


2016 2015

Cost price Market price Market price

Taka Taka Taka Conventional Banking

Treasury Bills 991,337,930 991,930,001 689,598,000 Bangladesh Government Treasury Bond 52,958,226,446 52,653,830,593 51,285,800,040 Prize Bonds 4,043,300 4,043,300 5,387,500

53,953,607,676 53,649,803,894 51,980,785,540 Islamic Banking

Bangladesh Government Islamic Bond 650,000,000 650,000,000 640,000,000 54,603,607,676 54,299,803,894 52,620,785,540

9.5.2 Others (Investment in Shares) 2016 2015 Market price Cost price Cost price

Taka Taka Taka

Conventional Banking

Shares in listed companies 816,353,273 1,006,352,650 878,467,734 Shares in un-listed companies 61,488,610 61,488,610 214,987,810

877,841,883 1,067,841,260 1,093,455,544

Islamic Banking

Shares in listed companies 2,162,953,949 2,887,364,353 3,174,173,488 2,162,953,949 2,887,364,353 3,174,173,488

Shares in listed companies

Investments have been recorded at cost and adequate provision has been maintained for probable future losses as per Bangladesh Bank guidelines. Market value of shares has been determined on the basis of the value of shares at the last trading day of the year.

9.6 Sector wise investment of shares 2016 2015 Market price Cost price Cost price

Taka Taka Taka

Shares in listed companies (A)

Banks and NBFI 1,102,737,124 2,055,989,695 2,610,329,218 Insurance Companies 552,623,098 573,997,079 523,211,903 Fuel and Power Companies 138,175,934 151,199,550 25,531,440 Mutual Fund 438,541,544 365,642,276 401,538,326 Manufacturing & Other 747,229,522 746,888,403 492,030,335

2,979,307,222 3,893,717,003 4,052,641,222

2016 2015 Shares in un-listed companies (B) Net book value Cost price Cost price

Taka Taka Taka

Banks and NBFI 166,935,993 54,183,820 57,683,820 Manufacturing - - 149,999,200 Others 33,830,764 7,304,790 7,304,790

200,766,757 61,488,610 214,987,810 Total investment of shares (C=A+B) 3,955,205,613 4,267,629,032

The investments in shares of unlisted companies are shown at cost or net book value of the last audited balance sheet, whichever is lower.


2016 Differences (Provision to be

required)Market price Cost price

Taka Taka Taka

9.7 Market price and cost price of investments in ordinary shares as on 31 December 2016

1 Asia Insurance Limited 40,720,872 76,805,098 (36,084,226)2 Bay Leasing & Investment Limited 306,804,802 643,319,328 (336,514,526)3 EXIM Bank 1st Mutual Fund 91,050,036 93,296,119 - 4 EXIM Bank Limited 338,449,996 696,815,163 (358,365,167)5 IFIC Bank 1st Mutual Fund 7,867,060 11,905,461 - 6 Islami Bank Limited 15,992,708 16,412,876 (420,168)7 Lafarge Surma Cement Limited 131,028,398 155,264,542 (24,236,144)8 National Life Insurance Co. Limited 456,695,360 397,735,353 58,960,007 9 Prime Bank Limited 242,721,782 433,586,851 (190,865,069)10 Rupali Bank Limited 2,172,142 9,074,723 (6,902,581)11 Standard Bank Limited 15,241,258 15,940,654 (699,396)12 Titas Gas Trans. Co. Ltd. 89,160,973 92,298,169 (3,137,196)13 SEBL MF 335,500,000 250,000,000 85,500,000 14 Trust Bank 1st Mutual Fund 4,124,448 10,440,696 (3,896,572)15 Trust Bank Limited 1,190,000 1,189,740 260 16 NCC Bank Limited 36,887,183 49,228,082 (12,340,899)17 One Bank Limited 32,585,297 35,307,295 (2,721,998)18 Eastern Bank Limited 37,511,413 52,068,101 (14,556,688)19 RN Spinning 3,446,079 4,459,649 (1,013,570)20 Premier Cement Mills Limited 40,032,240 48,428,204 (8,395,964)21 Prime Finance Limited 7,884,394 26,958,933 (19,074,539)22 Premier Leasing & Finance Limited 18,234,930 26,902,718 (8,667,788)23 Generation Next Fashion Limited 37,121,088 65,982,996 (28,861,908)24 Union Capital Limited 12,218,995 14,012,426 (1,793,431)25 Bangladesh LAMPS LTD 12,740,943 16,791,948 (4,051,005)26 Bangladesh Submarine Cable Co. Ltd. 31,913,837 46,266,367 (14,352,530)27 Delta Life Insurance Limited 55,206,866 99,456,628 (44,249,762)28 Aftab Automobiles Limited 61,249,892 94,751,115 (33,501,223)29 Global Heavy Chemicals Limited 24,917,993 34,247,190 (9,329,197)30 Fuwang Food 160,000 125,956 34,044 31 Delta Spinners Limited 2,577,850 3,719,475 (1,141,625)32 Envoy Textile Mills Ltd. 839,244 1,157,799 (318,555)33 Meghna Petroleum Limited 11,955,946 16,651,636 (4,695,690)34 ACME Laboratories Limited 285,575,400 151,004,255 134,571,145 35 Matin Spinning Mills Limited 11,400,720 14,044,434 (2,643,714)36 Ifad Autos 400,800 324,726 76,074 37 Aman Feed Ltd. 13,708,853 14,321,866 (613,013)38 Orion Pharma 8,257,915 8,110,242 147,673 39 Olympic Aceessories ltd 2,165,027 1,947,978 217,049 40 ACI Formulation 11,109,984 11,887,880 (777,896)41 BRAC Bank Limited 9,666,665 9,935,565 (268,900)42 Apolo Ispat 205,000 148,688 56,312 43 IPDC Finance Limited 6,998,445 7,044,521 (46,076)44 Phoenix Finance & Investment Ltd. 6,160,100 6,268,931 (108,831)45 BSC 4,702,000 4,699,724 2,276 46 Fuwang Ceramic 1,829,100 1,592,344 236,756 47 Emerald Oil 591,000 461,698 129,302 48 S ALAM 3,730,000 4,004,908 (274,908)49 LankaBangla Finance Limited 8,799,563 8,579,814 219,749


ents

2016 Differences (Provision to be

required)Market price Cost price

Taka Taka Taka

50 Saif Power Tec Ltd. 34,991,612 35,704,991 (713,379)51 ICB 3,217,451 3,343,974 (126,523)52 Khan Brothers 1,477,688 1,471,488 6,200 53 BSRM Limited 12,760,000 17,059,559 (4,299,559)54 Yeakin Polymer 69,385 20,749 48,636 55 Fortune Shoes Ltd.. 511,200 432,229 78,971 56 ShahjiBazar Power Company Ltd. 27,097,510 32,184,686 (5,087,176)57 Baraka Power 9,961,505 10,065,059 (103,554)58 GQ Ballpen 2,148,274 2,308,967 (160,693)59 BSRM Steel Mills Ltd. 5,568,000 6,146,439 (578,439)

2,979,307,222 3,893,717,006 (905,705,624)Actual provision 905,705,624 Surplus/(deficit) -

As at 31 December 2016, the value of investment cell which includes all investment in shares, corporate bond, debenture, mutual fund and total market value of other capital certificates and loan facilities given to own sub-sidiary company or companies directly or indirectly involved in capital market affairs stood at Tk 2,100.91 (2015: 1,960.08) crores which is 21.53% (2015: 36.37%) of total sum of paid up capital, statutory reserve and retained earnings of the bank.

9.8 Transactions of Repo and Reverse-repo during the year

Minimum outstanding

Maximum outstanding

Daily average outstanding

Taka Taka Taka 2016

Securities sold under repoi) With Bangladesh Bank - - - ii) With other Banks & FIs 102,379,665 1,922,396,270 297,493,731

Securities purchased under reverse repoi) With Bangladesh Bank - - - ii) With other Banks & FIs 148,297,350 1,275,868,120 23,960,609

2015

Securities sold under repoi) With Bangladesh Bank 294,950,000 3,590,955,000 230,726,383 ii) With other Banks & FIs 2,477,729,244 244,107,750 449,183,076

Securities purchased under reverse repoi) With Bangladesh Bank 300,000,000 2,350,000,000 36,843,779 ii) With other Banks & FIs 15,166,352 1,108,374,030 94,121,541

2016 Taka

2015 Taka

10 Consolidated loans and advances/investments

Loans, cash credit, overdrafts etc./investments:Southeast Bank Limited 11 180,161,187,214 162,056,722,487 Southeast Bank Capital Services Limited 2,500,642,443 2,363,503,025

182,661,829,657 164,420,225,512 Less: Inter company balance eliminated 10,674 2,863,903,191

182,661,818,983 161,556,322,321

Bills purchased and discounted:Southeast Bank Limited 11 9,203,770,254 7,322,136,224

9,203,770,254 7,322,136,224 191,865,589,237 168,878,458,545


11 Loans and advances/investments

Loans, cash credit, overdrafts etc./investments 11.1 180,161,187,214 162,056,722,487 Bills purchased and discounted 11.14 9,203,770,254 7,322,136,224

189,364,957,468 169,378,858,711

11.1 Loans, cash credit, overdrafts etc./Investments

In Bangladesh:Conventional BankingDemand loan 5,025,639,557 4,551,141,658 Time loan 20,064,629,716 16,711,508,514 Term loan 69,051,082,952 60,080,906,138 Agricultural credit-Term 933,182,554 535,330,860 Agricultural credit-Time 1,105,435,895 964,023,377 Agricultural credit-OD 94,413,590 39,729,457 Consumer credit scheme 4,924,067 7,544,224 Car loan 73,227,474 51,040,857 Personal loan 373,219,780 367,078,166 Home loan 515,726,845 265,658,130 Cash credit and overdrafts 45,296,952,050 38,617,922,709 Bills Against Letter of Credit (BLC) 294,075,920 212,508,158 Loan re-finance housing sector 20,349,457 21,447,159 Loan against Trust Receipt (LTR) 13,378,652,768 17,067,432,717 Advances-packing credit (PC) 2,397,107,920 2,084,196,551 House building loan-staff 188,907,457 180,324,168 Digital device 185,449 403,990 Export Development Fund (EDF) 11,112,134,762 7,058,645,348 Loan against cash incentive 130,507,407 123,693,689 Loan-credit card 1,135,680,036 904,417,015

171,196,035,656 149,844,952,885

Islamic BankingDemand investment 242,699,956 39,653,688 Bai-Muajjal (Time) investment 310,841,197 259,042,064 Bai-Muajjal Time under CCS 55,960,365 43,418,633 Bai-Murabaha-BLC 32,499,080 6,738,157 Bai-Murabaha-LTR 476,095,001 1,199,083,998 Bai-Salam 84,436,201 73,641,541 Staff house building investment 8,362,607 8,648,005 Investment against cash incentive 17,327,114 9,932,898 Export Development Fund (EDF) 633,716,266 394,527,668 Bai-Muajjal-investment 3,269,956,321 6,350,895,335 Murabaha-investment 624,262,832 562,799,707 Hire purchase-investment 3,208,994,618 3,263,282,206 Quard against MTDR - 105,702

8,965,151,558 12,211,769,602 180,161,187,214 162,056,722,487

Outside Bangladesh - - 180,161,187,214 162,056,722,487

Note 2016 Taka

2015 Taka


ents

11.2 Performing loans and advances/investments

Gross loans and advances/investments 189,364,957,468 169,378,858,711 Non-performing loans and advances/investments (9,257,788,205) (7,193,823,963)

180,107,169,263 162,185,034,748

11.3 Maturity-wise grouping of loans and advances/ Investments

On demand 43,794,108,537 39,477,070,239 Less than three months 24,803,469,746 20,774,326,085 More than three months but less than one year 50,941,232,848 48,736,933,155 More than one year but less than five years 47,341,367,857 37,652,834,591 More than five years 22,484,778,480 22,737,694,641

189,364,957,468 169,378,858,711

11.4 Concentration of loans and advances/ Investments

Advances to allied concerns of directors - - Advances to chief executive and other senior executives 72,967,000 66,078,000 Advances to customers' group:

Advances to large and medium industries 83,239,207,953 74,011,200,000 Advances to small and cottage industries 1,875,500,000 1,082,000,000 Commercial lending 39,031,160,279 41,015,100,000 Export financing 14,375,200,000 9,744,600,000 Real estate 14,994,200,000 13,046,400,000 Consumer credit scheme 60,884,432 50,962,857 Other loans and advances 35,715,837,804 30,362,517,854

189,364,957,468 169,378,858,711 Details of large loan/investments

As at 31 December 2016 there were 25 (2015: 28) clients with whom amount of outstanding loans and advances exceeded 10% of the total capital of the Bank. Total capital of the Bank was Tk 34,021.14 million as at 31 Decem-ber 2016 (Tk. 28,490.49 million as at 31 December 2015).

The Bank complies with the requirements of the section 26 (b) of the Bank Companies Act 1991 as amended in 2013 in connection with the general limitations of credit line.

Details are shown in Annexure-D.

11.5 Sector-wise allocation of loans and advances

2016 2015

% of total loan

Taka% of total loan

Taka

Agriculture 1.29% 2,438,900,000 0.92% 1,554,400,000 Industry (other than working capital) 23.10% 43,734,198,080 22.86% 38,720,100,000 Working capital financing 20.86% 39,505,009,874 20.84% 35,291,100,000 Export credit 7.59% 14,375,200,000 5.75% 9,744,600,000 Commercial credit 20.61% 39,031,160,279 24.22% 41,015,100,000 Small and cottage industries 0.99% 1,875,500,000 0.64% 1,082,000,000 Others:

a) Finance to NBFIs 0.64% 1,213,000,000 0.60% 1,018,800,000 b) Real Estate 7.92% 14,994,200,000 7.70% 13,046,400,000 c) Transport & communication 0.76% 1,446,700,000 0.78% 1,325,200,000 d) Small Enterprise financing 11.21% 21,231,811,601 11.16% 18,896,200,000 e) Miscellaneous 5.03% 9,519,277,634 4.54% 7,684,958,711

100.00% 189,364,957,468 100.00% 169,378,858,711

2016 Taka

2015 Taka


2016 Taka

2015 Taka

11.6 Industry-wise loans and advances (Industrial Loan)

Textile and garments industries including spinning industries 48,935,900,000 38,256,800,000 Food and allied industries 6,149,345,353 5,580,700,000 Pharmaceutical industries 747,703,027 718,400,000 Chemical, fertilizer, etc. 78,410,637 150,900,000 Cement and ceramic industries 3,455,073,480 3,381,900,000 Service industries 2,724,598,492 2,221,200,000 Other industries 21,148,176,964 23,701,300,000

83,239,207,953 74,011,200,000

11.7 Category-wise Small Medium Enterprise loans and advances (SME)

Service sector 10,190,100,000 4,862,854,509 Trading sector 25,062,000,000 21,869,170,231 Industrial sector 6,035,000,000 7,782,155,638

41,287,100,000 34,514,180,378

11.8 Geographical location-wise allocations of loans and advances

2016 2015

% of total loan

Taka% of total loan

Taka

Urban:Dhaka region 69.96% 132,470,612,723 69.77% 118,174,627,186 Chittagong region 18.10% 34,265,791,215 21.02% 35,604,749,224 Rajshahi region 2.07% 3,918,908,039 1.35% 2,293,150,022 Sylhet region 1.76% 3,334,117,812 2.08% 3,527,342,515 Khulna region 0.64% 1,203,827,539 0.88% 1,495,952,883 Rangpur region 0.48% 901,462,668 0.44% 750,949,679 Barisal region 0.08% 158,019,720 0.05% 90,222,155 Mymensingh region 0.28% 524,914,224 0.05% 79,589,318

93.35% 176,777,653,940 95.65% 162,016,582,982

Rural:Dhaka region 3.17% 6,002,966,153 2.74% 4,639,965,758 Chittagong region 1.85% 3,504,951,864 1.44% 2,433,193,648 Sylhet region 0.81% 1,540,320,041 0.14% 232,130,495 Rajshahi region 0.25% 478,849,898 0.03% 56,985,828 Khulna region 0.56% 1,060,215,572 0.00% -

6.65% 12,587,303,528 4.35% 7,362,275,729 100.00% 189,364,957,468 100.00% 169,378,858,711

11.9 Classification of loans and advances

Unclassified:Standard including staff loan 90.47% 171,314,821,176 91.70% 155,315,330,299 Special Mention Account (SMA) 4.63% 8,792,348,087 4.06% 6,869,704,449

95.11% 180,107,169,263 95.75% 162,185,034,748 Classified:

Sub-standard 0.83% 1,567,127,630 0.90% 1,517,889,736 Doubtful 0.31% 587,799,462 0.73% 1,240,806,394 Bad/loss 3.75% 7,102,861,113 2.62% 4,435,127,833

4.89% 9,257,788,205 4.25% 7,193,823,963 100.00% 189,364,957,468 100.00% 169,378,858,711


ents

The amount reported above under standard category includes certain non-performing loan accounts with an aggregate outstanding amount of Tk.14,037.6 million at 31 December 2016 which have not been reported as classified loans at year-end on the basis of stay order from the Honorable High Court Division of the Supreme Court of Bangladesh. The amount of interest suspense and eligible securities available against these loans as at 31 December 2016 were Tk.1,323 million and Tk. 2,310.4 million respectively. As at 31 December 2016, an aggregate amount of Tk.138.3 million has been kept as general provision applicable for loans under standard category.

In connection with these loans Bangladesh Bank suggested vide letter reference no. DBI-1/78/2017-1206 dated 27 March 2017 to maintain additional provision of Tk. 767.6 million in 2016. The Bank has provided such additional provision in the financial statements of 2016.

2016 Taka

2015 Taka

11.10 Particulars of loans and advances

i) Debts considered good in respect of which the bank is fully secured; 155,162,481,958 131,029,202,890

ii) Debts considered good for which the bank holds no other securitythan the debtors' personal security; 12,149,368,473 14,387,425,624

iii) Debts considered good secured by the personal liabilities of oneor more parties in addition to the personal security of the debtors; 22,053,107,036 23,962,230,197

iv) Debts adversely classified; provision not maintained - -

v) Debts due by directors or officers of the bank or any of themeither severally or jointly with any other persons; 197,859,451 189,805,585

vi) Debts due by companies or firms in which the directors or officersof the bank are interested as directors, partners or managing agents or, in case of private companies, as members; - -

vii) Maximum total amount of advances, including temporaryadvances made any time during the year to directors or managersor officers of the bank or any of them either severally or jointlywith any other persons; 197,859,451 189,805,585

viii) Maximum total amount of advances, including temporary advancesgranted during the year to companies or firms in which the directors of the bank are interested as directors, partners or managing agentsor, in case of private companies, as members; - -

ix) Due from banking companies; - -

x) Classified loans/investments for which interest has not been charged:

(a) Increase/(decrease) of provision (specific) 1,404,996,225 (350,206,903) Amount of debts written off 1,012,890,775 2,452,261,045 Amount realised against the debts previously written off 72,709,902 174,604,278

(b) Provision against the debt classified as bad/loss at the date of balance sheet 2,956,142,427 1,707,744,942

(c) Amount of interest charged in suspense account 3,549,523,832 2,832,654,051

xi) Loans written off:● Current year 1,130,516,095 2,963,802,165 ● Cumulative to-date 9,076,603,000 8,050,306,676

● The amount of written off loans for which lawsuit filed 9,076,603,000 8,050,306,676


11.11 Particulars of required provision for loans and advances/investments

Status

2016 2015

Outstanding as at 31 Dec

2016

Base for provision % of

required provision

Required provision

Required provision

Taka Taka Taka Taka

For loans and advances/ Investments:

Unclassified-general provision

All unclassified loans

(other than small enterprises,

housing finance, Loan to MBs

loans for professional, consumer

financing and special mention

account) 130,240,699,926 130,240,699,926 1% 1,302,407,000 1,178,158,981

Small and medium enterprise financing 35,940,138,752 35,940,138,752 0.25% 89,850,351 75,775,474

Loan to BHs/MBs/SDs against shares 1,418,736,083 1,418,736,083 2% 28,374,722 82,317,321

Housing and loan for professional 631,759,684 631,759,684 2% 12,635,194 7,980,279

Consumer finance 1,458,331,315 1,458,331,315 5% 72,916,567 62,066,145

Agriculture finance 1,427,885,352 1,427,885,352 2.50% 35,697,134 31,101,800

Staff loan 197,270,064 197,270,064 1% 1,972,701 1,889,723

Special Mention Account (SMA) 8,792,348,087 8,705,458,297 0.25%-5% 117,685,493 98,500,037

1,661,539,162 1,537,789,760

Classified-specific provision:

Sub-standard 1,567,127,630 576,068,882 5%-20% 114,289,342 128,161,657

Doubtful 587,799,462 228,127,330 50% 113,835,313 279,926,029

Bad/loss 7,102,861,113 2,956,142,427 100% 2,956,142,427 1,707,744,942

189,364,957,468 183,780,618,112 3,184,267,082 2,115,832,628

Required provision for loans and advances (A) 4,845,806,244 3,653,622,388

Total provision maintained (B) 6,158,284,306 3,863,288,081

Excess provision as at 31 December (C=B-A) 1,312,478,062 209,665,693

* Provision for loans and advances has been kept as per Bangladesh Bank letter reference no: DBI-1/78/2017- 1206 dated 27 March 2017.


ents

2016 Taka

2015 Taka

11.12 Suits filed by the Bank (Branch wise details)

Aganagar Branch 24,601,270 57,354,953

Agargaon Branch 46,495,055 32,208,767

Agrabad Branch 3,400,105,252 1,694,861,880

Banani Branch 478,744,788 478,377,367

Bandar Bazar Branch 33,472,439 31,862,743

Bangshal Branch 756,783,708 302,426,168

Bogra Branch 102,439,383 95,118,164

CDA Avenue Branch 1,001,878,996 568,628,205

Chapainawabgonj Branch 6,670,345 -

Chouhatta Branch 32,123,958 31,481,125

Corporate Branch 56,546,456 58,392,487

Cox's Bazar Branch 67,768,272 59,302,319

Dhanmondi Branch 1,828,021,588 1,816,479,159

Gulshan Branch 119,890,152 255,942,698

Halishahar Branch 1,824,036,037 1,824,036,037

Imamgonj Branch 298,675,545 304,124,658

Jubilee Road Branch 40,036,273 39,543,618

Kakrail Branch 41,352,380 41,352,380

Kawranbazar Branch 98,482,809 4,437,057

Khatungonj Branch 859,750,230 859,750,230

Khulna Branch 98,484,842 98,088,592

Konabari Branch 1,862,261 1,862,261

Kotowali Branch 74,826,552 74,826,552

Kulaura Branch 9,078,456 9,078,456

Laldighirpar Branch 113,465,769 107,401,973

Madambibirhat Branch 27,584,384 27,584,384

Mohammadpur Branch 10,406,570 10,406,570

Momin Road Branch 109,818,537 109,818,537

Mouchak Branch 79,543,346 79,543,346

Moulvibazar Branch 171,254,940 157,084,193

Naogaon Branch 7,375,594 7,375,594

Narayangonj Branch 54,511,315 57,204,744

New Elephant Road Branch 127,592,586 127,592,586

New Eskaton Branch 171,552,903 171,552,903

Pahartoli Branch 826,535,766 814,940,063

Principal Branch 5,515,730,861 5,615,943,766

Progoti Soroni Branch 61,593,200 61,593,200

Rupnagar Branch 5,582,437 -

Shahjalal Uposhahar Branch 138,193,352 128,539,223

Sir Iqbal Road Branch 14,315,940 -

Uttara Branch 270,340,241 270,340,241

19,007,524,788 16,486,457,199


11.13 Listing of assets pledged as security/collaterals

Nature of the secured assetsShares & Securities 1,295,544,654 779,939,729 Merchandise 2,956,323,198 5,316,351,142 Machinery with other fixed asset and financial obligation 7,794,104,888 8,002,585,325 Real estate with financial obligation 140,515,613,690 125,630,176,235 Financial obligation only 10,714,696,416 5,310,266,244 "(Insurance policies, savings certificates, bank deposit etc)"Miscellaneous-i) Crops/stock of crops hypothecation 2,058,718,058 3,424,026,215 ii) Guarantee of individuals/institutions 20,977,372,216 18,318,775,687 ii) Others 3,052,584,348 2,596,738,134

189,364,957,468 169,378,858,711

11.14 Bills purchased and discounted

Conventional BankingIn Bangladesh 2,632,005,815 2,099,077,877 Outside Bangladesh 6,245,714,954 5,064,117,418

8,877,720,769 7,163,195,295 Islamic Banking

In Bangladesh 248,139,426 140,539,240 Outside Bangladesh 77,910,059 18,401,689

326,049,485 158,940,929 9,203,770,254 7,322,136,224

11.15 Maturity grouping of bills discounted and purchased

Within one month 3,311,763,128 2,230,552,240 More than one month but less than three months 2,758,723,516 2,755,870,023 More than three months but less than six months 1,928,586,180 1,782,847,068 More than six months 1,204,697,430 552,866,893

9,203,770,254 7,322,136,224

11.16 Information about restructured loan as per Bangladesh Bank's BRPD Circular no. 4 dated 29 January 2015

Loans amounting to Tk. 3,103.80 million (outstanding Tk. 3,117.60 million as on 31 December 2016) of Keya Group, Gulshan Branch, Dhaka have been restructured by extension of validity of Term Loan for 12-years & conversion of demand loan into 06-years Term Loan including one year moratorium under the purview of BRPD Circular # 04 dated 29 January 2015. The status of the loans is unclassified and reported as SMA as per Bangladesh Bank's guidelines. Accordingly, 2% provision has been made.

12 Consolidated fixed assets including premises, furniture and fixtures

Cost:Southeast Bank Limited 10,406,610,372 9,276,727,677 Southeast Bank Capital Services Limited 405,480,073 176,908,853 Southeast Financial Services (UK) Ltd 8,456,935 9,989,882 Southeast Financial Services (Australia) Pty Ltd 2,422,206 2,440,636 Southeast Exchange Company (South Africa) Pty Ltd 5,022,585 4,259,695

10,827,992,171 9,470,326,743 Less: Accumulated depreciation

Southeast Bank Limited 1,792,923,672 1,525,648,802 Southeast Bank Capital Services Limited 77,764,768 50,574,583 Southeast Financial Services (UK) Ltd 6,323,279 6,594,017 Southeast Financial Services (Australia) Pty Ltd 1,596,346 1,465,330 Southeast Exchange Company (South Africa) Pty Ltd 2,221,550 817,600

1,880,829,615 1,585,100,332 Written down value at the end of the year 8,947,162,556 7,885,226,411

There were no capitalized borrowing cost related to the acquisition of fixed assets during the year (2015: nil).

Details of consolidated amounts have not been provided as such amounts are insignificantly different from those of the Banks.

2016 Taka

2015 Taka


ents

Note 2016 Taka

2015 Taka

13 Fixed assets including premises, furniture and fixtures

Cost:Land 5,775,037,313 5,348,446,725 Buildings 1,898,987,918 1,524,312,748 Furniture and fixtures 1,124,644,629 993,739,499 Office appliances 14,193,473 12,142,094 Computer 180,392,040 113,605,311 Electrical appliances 1,108,311,271 1,004,834,193 ATM Booth 174,746,153 158,100,064 Motor vehicles 130,297,575 121,547,043

10,406,610,372 9,276,727,677 Less: Accumulated depreciation

Buildings 410,635,626 357,278,241 Furniture and fixtures 509,258,430 447,598,059 Office appliances 8,854,864 7,660,051 Computer 62,231,950 40,537,969 Electrical appliances 640,516,858 537,942,747 ATM Booth 80,142,933 59,176,131 Motor vehicles 81,283,011 75,455,604

1,792,923,672 1,525,648,802 Written down value at the end of the year 8,613,686,700 7,751,078,875

Details are shown in Annexure-E.

14 Consolidated other assets

Southeast Bank Limited 15 8,478,052,796 5,977,253,927 Southeast Bank Capital Services Limited 115,351,911 269,542,908 Southeast Financial Services (UK) Ltd 25,059,186 24,153,678 Southeast Financial Services (Australia) Pty Ltd 1,923,109 1,807,474 Southeast Exchange Company (South Africa) Pty Ltd 980,261 550,000

8,621,367,263 6,273,307,987 Less:

Investment in subsidiary:In Bangladesh 5,452,930,000 1,394,930,000 Outside Bangladesh 65,100,021 65,063,724

5,518,030,021 1,459,993,724 Intercompany balance 1,726,998 -

3,101,610,244 4,813,314,263

15 Other assets 8,478,052,796 5,977,253,927

15.1 Classification of other assetsi) Investment in shares of subsidiary companies: - In Bangladesh 15.3 5,452,930,000 1,394,930,000 - Outside Bangladesh 15.4 65,100,021 65,063,724 ii) Stationery, stamps, printing materials, etc. 54,324,003 48,134,002 iii) Advance rent and advertisement 421,683,670 336,304,591 iv) Interest accrued on investment but not collected,

commission and brokerage receivable on shares and debentures, and other income receivables 1,403,482,450 1,025,207,893

v) Security deposits 2,282,039 2,275,239 vi) Preliminary, formation and organisational expenses,renovation, development and prepaid expenses 489,509,292 1,156,827,743 vii) Branch adjustment 15.5 - 1,328,252,847 viii) Suspense account 153,037,756 200,451,481 ix) Others 435,703,565 419,806,407

8,478,052,796 5,977,253,927


Note 2016 Taka

2015 Taka

15.2 Non-income generating other assets

i) Stationery, stamps, printing materials, etc. 54,324,003 48,134,002 ii) Advance rent and advertisement 421,683,670 336,304,591 iii) Branch adjustment 15.5 - 1,328,252,847 iv) Suspense account 153,037,756 200,451,481 v) Preliminary, formation and organisational expenses,

renovation, development and prepaid expenses 489,509,292 1,156,827,743 1,118,554,721 3,069,970,664

15.3 Investment in shares of subsidiary company in Bangladesh

Cost 5,489,930,000 1,489,930,000 Less: Provision for impairment loss (37,000,000) (95,000,000)

5,452,930,000 1,394,930,000

15.4 Investment in shares of subsidiary companies outside Bangladesh

Cost 113,660,069 113,623,772 Less: Provision for impairment loss (48,560,048) (48,560,048)

65,100,021 65,063,724

15.5 Branch adjustment (Debit)

General accounts debit - 3,221,095,847 General accounts credit - 1,892,843,000

- 1,328,252,847

15.6 Particulars of required provision for other assets

Base for provision Rate (%) Taka

2016

Legal expenses for defaulting borrowings 6,602,196 50% 3,301,098


Others 97,209,000 50% 48,604,500

Others 48,782,784 100% 48,782,784

Protested bills 3,581,157 100% 3,581,157

Nostro account balance - 100% -

Required provision on other assets 163,735,000

Total provision maintained 163,735,000

Excess provision -

2015



Protested bills 3,615,397 100% 3,615,397

Nostro account balance - 100% -

Required provision on other assets 52,623,487

Total provision maintained 71,000,000

Excess provision 18,376,513


ents

Note 2016 Taka

2015 Taka

16 Consolidated borrowings from other banks, financial institutions and agents

Subordinated bond:Southeast Bank Limited 17 8,000,000,000 3,000,000,000

8,000,000,000 3,000,000,000 Other borrowings:Southeast Bank Limited 17 7,363,947,263 4,519,780,424 Southeast Bank Capital Services Limited 7,698,493 2,901,042,619

7,371,645,756 7,420,823,043 Less: Inter company balance eliminated 10,674 2,863,903,191

7,371,635,082 4,556,919,852 15,371,635,082 7,556,919,852

17 Borrowings from other banks, financial institutions and agents

Subordinated Bond 17.2.ii 8,000,000,000 3,000,000,000 Other borrowings 17.2.i +17.3 7,363,947,263 4,519,780,424

15,363,947,263 7,519,780,424

17.1 Borrowing from other banks, financial institutions and agents

In Bangladesh 17.2 9,625,908,073 3,163,013,774 Outside Bangladesh 17.3 5,738,039,190 4,356,766,650

15,363,947,263 7,519,780,424

17.2 In Bangladesh

i. Secured:Refinance against agro-based credit from Bangladesh Bank 8,784,992 12,919,537 Refinance for housing sector from Bangladesh Bank 30,013,624 21,755,851 Refinance against SME loan from Bangladesh Bank 7,850,000 9,853,571 Refinance against Solar energy, Bio Gas & ETP

Scheme from Bangladesh Bank 3,866,844 7,508,176 Refinance against RPGCL 75,392,613 110,976,639 Bangladesh Bank Islamic Bond 1,500,000,000 -

1,625,908,073 163,013,774

ii. Unsecured:Subordinated BondRupali Bank Limited 1,250,000,000 1,000,000,000 Sonali Bank Limited 1,750,000,000 750,000,000 Agrani Bank Limited 950,000,000 500,000,000 Pubali Bank Limited 1,300,000,000 300,000,000 Mercantile Bank Limited 250,000,000 250,000,000 Saudi-Bangladesh Industrial and Agricultural

Investment Company Ltd. 200,000,000 200,000,000 Sadharan Bima Corporation 100,000,000 - Uttara Bank Limited 200,000,000 - Dhaka Bank Limited 750,000,000 - National Life Insurance Limited 750,000,000 - Janata Bank Limited 500,000,000 -

8,000,000,000 3,000,000,000 Total (iii=i+ii) 9,625,908,073 3,163,013,774


Note 2016 Taka

2015 Taka

17.3 Outside Bangladesh

SecuredBorrowing from International Finance Corporation (IFC) 1,180,666,500 1,177,504,500 Borrowing from MASHREQ BANK PSC-USD 393,555,500 - Borrowing from Commercial Bank of Qatar - 1,491,505,700 Borrowing from Global Climate Partnership Fund S.A. 787,111,000 392,501,500 Borrowing from ICICI Bank, Hongkong - 549,502,100 Borrowing from RAK BANK, UAE 1,416,799,800 745,752,850 Borrowing from Bank Muscat, Oman 393,555,500 - Borrowing from FGB, UAE 1,180,666,500 - Borrowing from ADB 385,684,390 -

5,738,039,190 4,356,766,650 Unsecured - -

5,738,039,190 4,356,766,650

17.4 Maturity grouping of borrowings

Repayable on demand - 52,037,135 Repayable within one month 1,393,555,500 110,976,639 Over one month but within six months 3,530,377,350 2,786,760,650 Over six months but within one year 1,526,995,340 1,177,504,500 Over one year 8,913,019,073 3,392,501,500

15,363,947,263 7,519,780,424

18 Consolidated deposits and other accounts

Current/Al-wadeeah current accounts and other accounts Southeast Bank Limited 30,845,332,890 23,184,569,410 Southeast Bank Capital Services Limited 21,003,651 16,693,064


30,285,059,627 23,179,887,835 Bills payable

Southeast Bank Limited 6,548,856,941 2,127,206,788 Southeast Bank Capital Services Limited - -

6,548,856,941 2,127,206,788

Savings bank/Mudaraba savings bank depositsSoutheast Bank Limited 19,700,582,409 18,419,861,332 Southeast Bank Capital Services Limited - -

19,700,582,409 18,419,861,332 Fixed deposits/Mudaraba fixed deposits

Southeast Bank Limited 173,438,929,873 166,704,137,174 Southeast Bank Capital Services Limited - -

173,438,929,873 166,704,137,174 229,973,428,850 210,431,093,129

19 Deposits and other accounts

Current/Al-wadeeah current accounts and other accountsCurrent/Al-wadeeah current deposits 10,325,582,928 8,580,318,120 Foreign currency deposits 955,223,540 822,460,651 Sundry deposits 19.1 19,564,526,422 13,781,790,639

30,845,332,890 23,184,569,410 Bills payable

Payment order issued 6,544,011,764 2,116,401,698 Demand draft 4,845,177 10,805,090

6,548,856,941 2,127,206,788 Savings bank/Mudaraba savings bank deposits 19,700,582,409 18,419,861,332 Fixed deposits/Mudaraba fixed deposits

Fixed deposits/Mudaraba fixed deposits 114,612,212,666 128,735,942,147 Special notice/Mudaraba special notice deposits 25,012,168,173 23,325,303,495 Scheme deposits 31,923,436,868 12,080,726,463 Interest payable on FDR/Scheme 1,891,112,166 2,562,165,069

173,438,929,873 166,704,137,174 230,533,702,113 210,435,774,704


ents

Note 2016 Taka

2015 Taka

19.1 Sundry deposits

Margin under letter of credit 2,371,615,981 2,579,058,314 Margin against IBP 436,626 388,943 Margin against FBP 61,007,589 106,298,525 Margin under letter of guarantee 959,140,248 753,822,647 Margin under export proceeds 4,336,873 - Margin against time loan to issue pay order 61,704,891 25,614,612 Deposit held against FDBP/IDBP, export bills etc. 19,456,399 66,253,425 FC held against EDF L/C 10,935,473,081 6,438,473,901 Accounts payable 168,310 58,492 Telegraphic transfer 911,042 975,934 Margin on acceptance 4,955,318,557 3,705,283,123 Remittance awaiting disposal 35,073,275 4,034,291 Others 159,883,550 101,528,432

19,564,526,422 13,781,790,639

19.2 Deposits from banks and others

Inter-bank deposits 19.3 5,583,333,738 11,701,953,424 Other deposits 224,950,368,375 198,733,821,280

230,533,702,113 210,435,774,704

19.3 Inter-bank deposits

EXIM Bank Limited 6,461,754 3,963,579,057 Mercantile Bank Limited 239,288 235,417 AB Bank Limited 2,488,046 6,673,675 Social Islami Bank Limited 4,230,200 244,853,611 BRAC Bank Limited 45,769 45,842 Shahjalal Islami Bank Limited 433,626 218,522,464 Al-Arafa Islami Bank Limited 565,983,998 1,110,397,115 Commercial Bank of Ceylon Plc. 390,000,000 - Islami Bank Bangladesh Limited 3,208,051,238 4,007,008,533 First Security Islami Bank Limited 7,077,931 8,953,756 Dhaka Bank Limited 213,089 214,739 IFIC Bank Limited 255,406 250,687 United Commercial Bank Limited 500,000,000 1,000,000,000 The City Bank Limited 9,810,644 9,504,551 Citibank N.A. 185,520,586 129,366,266 The Trust Bank Limited 4,963 5,947 NRB Commercial Bank Limited 747,504 710,017 Mutual Trust Bank Limited 781,492 1,153,135 Meghna Bank Limited 988,204 478,612 NCC Bank Limited - 500,000,000 Prime Bank Limited 700,000,000 500,000,000

5,583,333,738 11,701,953,424

19.4 Sector-wise deposits

Government 5,415,989,663 4,339,796,234 Deposit money banks 5,583,333,738 11,701,953,422 Other public 22,754,898,930 19,408,302,537 Foreign currency 975,352,673 889,386,816 Private 195,804,127,109 174,096,335,695

230,533,702,113 210,435,774,704

19.5 Unclaimed Deposits and valuables

Payment Order 482,443 81,351 482,443 81,351


19.6 Analysis of residual maturity grouping of deposits

Inter-bank deposits:Payable on demand 191,014,838 3,900,228,399 Within one month 1,692,318,900 5,801,725,025 More than one month but less than six months 3,700,000,000 2,000,000,000 More than six months but less than one year - - More than one year but less than five years - - More than five years but less than ten years - -

5,583,333,738 11,701,953,424 Other Deposits:

Payable on demand 3,862,485,162 9,281,332,483 Within one month 45,180,881,100 21,091,924,267 More than one month but less than six months 38,086,500,000 82,224,903,770 More than six months but less than one year 79,864,100,000 27,302,161,680 More than one year but less than five years 41,774,400,000 44,624,741,090 More than five years but less than ten years 16,182,002,113 14,208,757,990

224,950,368,375 198,733,821,280 230,533,702,113 210,435,774,704

20 Consolidated other liabilities

Southeast Bank Limited 21 19,572,488,052 15,072,571,985 Southeast Bank Capital Services Limited 309,418,341 399,452,170 Southeast Financial Services (UK) Limited 18,831,655 19,009,233 Southeast Financial Services (Australia) Pty Ltd 1,881,449 4,328,367 Southeast Exchange Company (South Africa) Pty Ltd 18,491,824 18,570,055

19,921,111,321 15,513,931,810 Less: Inter company balance eliminated 1,726,998 -

19,919,384,323 15,513,931,810

21 Other liabilities

Provision for loans and advances/investments 21.1 6,158,284,306 3,863,288,081 Interest suspense account 21.2 3,549,523,832 2,832,654,051 Provision for taxation 21.3 4,998,658,798 3,654,456,280 Obligation under finance lease 21.4 10,265,943 18,654,060 Accrued expenses 11,784,329 9,866,847 Interest payable on borrowings 93,508,887 14,732,390 Accounts payable-Bangladesh Bank 53,746,147 45,147,874 Accounts payable-others 587,702,202 399,098,655 Provision for diminution in the market value of share 59 905,705,624 1,725,241,065 Other provisions 21.5.1 1,326,235,000 972,878,000 Unearned income 388,476,342 680,406,920 Branch adjustment 21.6 592,435,184 - Withholding tax 895,161,458 855,147,762 Provision for audit fees 1,000,000 1,000,000

19,572,488,052 15,072,571,985

Note 2016 Taka

2015 Taka


ents

21.1 Provision for loans and advances/investments

A. GeneralBalance as at 1 January 1,540,000,000 1,334,721,230 Add: Provision made during the year

On standard loans and advances/investments etc. 870,814,544 139,033,953 On Special Mention Account (SMA) 19,185,456 66,244,817

890,000,000 205,278,770 Less: Provision no longer required - - Balance as at 31 December 2,430,000,000 1,540,000,000

B. SpecificBalance as at 1 January 2,323,288,081 2,673,494,984 Less: Fully provided debt write off during the year (1,012,890,775) (2,452,261,045)Add: Recoveries of amounts previously written off 72,709,902 174,604,278 Add: Specific provision for the year 2,360,990,098 2,039,766,952 Less: Recoveries and provisions no longer required - - Less: Interest waiver during the year (15,813,000) (112,317,088)

Net charge to Profit & Loss A/C 1,404,996,225 (350,206,903)Balance as at 31 December 3,728,284,306 2,323,288,081

C. Total provision on loans and advances/investments (A+B) 6,158,284,306 3,863,288,081

* Provision for loans and advances has been kept as per Bangladesh Bank letter reference no: DBI 1/78/2017-1206 dated 27 March 2017.

21.2 Interest suspense account

Balance as at 1 January 2,832,654,051 2,365,612,512 Add: Amount transferred to "interest suspense" account during the year 1,790,397,963 1,868,832,473

4,623,052,014 4,234,444,985

Less: Amount of interest suspense recovered during the year 892,575,369 869,905,545 Amount written off during the year 117,625,320 511,541,120 Interest waiver during the year 63,327,493 20,344,269

1,073,528,182 1,401,790,934 Balance as at 31 December 3,549,523,832 2,832,654,051

21.3 Provision for taxation

Provision for current tax 21.3.1 3,607,144,155 2,689,344,079 Deferred tax liabilities 21.3.2 1,391,514,643 965,112,201

4,998,658,798 3,654,456,280

21.3.1 Provision for current tax

ProvisionBalance as at 1 January 10,966,854,123 11,846,498,876 Provision made during the year 2,765,000,000 2,300,000,000

13,731,854,123 14,146,498,876 Adjustments made during the year - (3,179,644,753)Balance as at 31 December 13,731,854,123 10,966,854,123

Advance taxBalance as at 1 January 8,277,510,044 8,940,257,721 Paid during the year 1,847,199,924 2,535,875,626

10,124,709,968 11,476,133,347 Adjustments made during the year - (3,198,623,303)Balance as at 31 December 10,124,709,968 8,277,510,044

Net balance as at 31 December 3,607,144,155 2,689,344,079

Provision for current tax of Tk. 2,765,000,000 has been made @ 40.00% as prescribed by Finance Act 2016 of the accounting profit made by the Bank after considering some of the add backs to income and disallowances of expenditure as per the Income Tax Ordinance and Rules 1984 and in compliance of para 46 of BAS 12 "Income Tax".

Note 2016 Taka

2015 Taka


Note 2016 Taka

2015 Taka

21.3.2 Deferred tax liabilities

Deferred tax liabilities are attributable to the following:

Revaluation reserve of land 615,761,213 615,761,213 Revaluation reserve of buildings 125,911,051 125,911,051 Fixed assets- except land and revaluation reserve of buildings 21.3.3.1 275,536,360 210,536,360 Revaluation reserve of HTM securities 21.3.3.2 4,060,523 12,903,577 Revaluation reserve of HFT securities 21.3.3.3 370,245,496 -

1,391,514,643 965,112,201

Deferred tax is calculated using the tax rates expected to apply in the periods in which the assets will be realised or the liabilities settled, based on tax rates and laws enacted, by the balance sheet date. Following are the descriptions for each individual item of the deferred tax that are recognised by the Bank as a temporary difference with expected time of realisation.

Revaluation reserve of land

As the land is not depreciable and as per local tax rules revaluation gain is not taxable. However, the tax office will charge taxes on capital gain which is the same amount of revaluation gain whether recovered through use or sale. Hence a taxable temporary difference arises against which the Bank recognises deferred tax liabilities. However, the outstanding amount of deferred tax will be automatically released with the disposal of the assets.

Revaluation reserve of buildings

Buildings are depreciable assets. Its revalued carrying amount will be recovered through use and this will generate taxable income which exceeds the depreciation that will be allowable for tax purposes in future periods. As a result taxable temporary difference will arise.

Fixed assets- except land and revaluation reserve of buildings

Accounting depreciation is not tax allowable expenses. Rather, the tax office will allow tax depreciation as per 3rd Schedule of the Income Tax Ordinance 1984. Hence a temporary difference arises due to the different depreciation rates and methodology against which the Bank recognizes deferred tax. This is an ongoing item as there is a difference between the tax depreciation rate and the accounting depreciation rate. However, the outstanding amount of deferred tax will be automatically released with the expiry of the economic useful life of the assets.

Revaluation reserves of HTM and HFT securities

Deferred tax relating to unrealised interest on the revaluation of Held to Maturity (HTM) and Held for Trading (HFT) securities is recognised directly in other reserves as a part of equity and is subsequently recognised in the profit and loss account on maturity of the securities. The deferred tax recognised against this will be fully reversed at the maturity of all related securities.

2016 Taka

2015 Taka

21.3.3 Movement of deferred tax liabilities

Balance as at 1 January 965,112,201 839,075,601 Provision made for deferred tax liabilities

Charged to profit and loss account 65,000,000 140,000,000 Charged to revaluation reserve 371,434,778 4,768,630

436,434,778 144,768,630 1,401,546,979 983,844,231

Adjustment made during the year for revaluation reserve (10,032,336) (18,732,030)Balance as at 31 December 1,391,514,643 965,112,201


ents

Note 2016 Taka

2015 Taka

21.3.3.1 Deferred tax on fixed assets- except land and revaluation reserve of buildings

Balance as at 1 January 210,536,360 70,536,360 Charge to profit and loss account 65,000,000 140,000,000 Balance as at 31 December 275,536,360 210,536,360

21.3.3.2 Deferred tax on revaluation reserve of HTM securities

Balance as at 1 January 12,903,577 26,866,977 Charge to revaluation reserves 1,189,282 4,768,630 Adjustment during the year (10,032,336) (18,732,030)Balance as at 31 December 4,060,523 12,903,577

21.3.3.3 Deferred tax on revaluation reserve of HFT securities

Balance as at 1 January - - Charge to revaluation reserves 370,245,496 - Adjustment during the year - Balance as at 31 December 370,245,496 -

21.4 Obligation under finance lease

Balance as at 1 January 18,654,060 34,140,945 Addition during the year - -

18,654,060 34,140,945 Adjustment during the year (8,388,117) (15,486,885)Balance as at 31 December 10,265,943 18,654,060

21.4.1 Aging analysis of liabilities under finance lease

Minimum lease payment

Financial charge forfuture periods

Principaloutstanding

Taka Taka Taka

2016Payable within 1 year 9,258,860 1,108,945 8,149,915 Payable more than 1 year but less than 2 years 2,318,297 202,269 2,116,028 Payable more than 2 years but less than 5 years - - -

11,577,157 1,311,214 10,265,943

2015Payable within 1 year 11,148,047 2,656,495 8,491,552 Payable more than 1 year but less than 2 years 9,258,860 1,108,945 8,149,915 Payable more than 2 years but less than 5 years 2,214,862 202,269 2,012,593

22,621,769 3,967,709 18,654,060

Note 2016 Taka

2015 Taka

21.5 Other provisions charged to profit and loss

Provision for other assets 21.5.1 (A) 92,735,000 10,035,106 Provision for good borrowers 21.5.1 (B) 23,000,000 11,878,000 Provision for off-balance sheet exposures 21.5.1 (C) 249,500,000 (19,650,000)

365,235,000 2,263,106


Note 2016 Taka

2015 Taka

21.5.1 Other Provisions

A) Provision for other assetsBalance as at 1 January 71,000,000 60,964,894 Addition during the year 92,735,000 10,035,106

163,735,000 71,000,000 Adjustment during the year - - Balance as at 31 December 163,735,000 71,000,000

B) Provision for good borrowersBalance as at 1 January 11,878,000 - Addition during the year 23,000,000 11,878,000

34,878,000 11,878,000 Adjustment during the year (11,878,000) - Balance as at 31 December 23,000,000 11,878,000

C) Provision for off-balance sheet exposures

Balance as at 1 January 890,000,000 909,650,000 Provision made during the year 249,500,000 -

1,139,500,000 909,650,000 Adjustments made during the year - (19,650,000)Balance as at 31 December 1,139,500,000 890,000,000

D) Total other provisions (A+B+C) 1,326,235,000 972,878,000

21.6 Branch adjustment (credit)

General accounts debit 928,625,816 - General accounts credit 1,521,061,000 -

592,435,184 -

Branch adjustment account represents outstanding interbranch and head office transactions (net) originated but yet to be responded at balance sheet date. However, the un-respondent entries of 31 December 2016 are given below:

No. of unrespondent entries Unrespondent entries (Taka)

Debit Credit Debit Credit

Upto 3 months 594 1,526 928,625,816 1,521,061,000

Over 3 months but within 6 months - - - -

Over 6 months but within 1 year - - - -

Over 1 year but within 5 years - - - -

594 1,526 928,625,816 1,521,061,000


ents

Note 2016 Taka

2015 Taka

22 Share Capital

22.1 Authorised

1,500,000,000 Ordinary shares of Tk 10 each 15,000,000,000 15,000,000,000

22.2 Issued, subscribed and paid up

378,164,970 ordinary shares of Tk 10 each issued for cash 3,781,649,700 3,781,649,700

538,785,206 ordinary shares of Tk 10 each issued as bonus shares 5,387,852,060 5,387,852,060 916,950,176 9,169,501,760 9,169,501,760

22.3 Dividends

The following dividends were declared and paid by the Bank for the year ended 31 December.

1.50 Taka per ordinary share for 2015 (1.50 Taka per ordinary share for 2014 1,375,425,264 1,375,425,264

After the end of the reporting period, the following dividends were proposed by the directors. The dividends have not been provided for and no tax consequences.

2.00 Taka per ordinary share for 2016 and 1.50 Taka per ordinary share for 2015 1,833,900,352 1,375,425,264

22.4 Share capital at a glance from inception

Year Particulars Number of shares

Capital amount (Taka)

Cumulative (Taka)

1995 Opening / Sponsors Capital 1,000,000 100,000,000 100,000,000 1996 None - - 100,000,000 1997 25% Stock Dividend 250,000 25,000,000 125,000,000 1998 20% Stock Dividend 250,000 25,000,000 150,000,000 1999 Initial Public Offer (IPO) 1,500,000 150,000,000 300,000,000 2000 10% Stock Dividend 300,000 30,000,000 330,000,000 2001 10% Stock Dividend 330,000 33,000,000 363,000,000 2002 10% Stock Dividend 363,000 36,300,000 399,300,000

2003 Right Issue @ 1:2 1,650,000 165,000,000 564,300,000 20% Stock Dividend 1,128,600 112,860,000 677,160,000

2004 30% Stock Dividend 2,031,480 203,148,000 880,308,000 2005 20% Stock Dividend 1,760,616 176,061,600 1,056,369,600

2006 Right Issue @1:1 10,563,696 1,056,369,600 2,112,739,200 8% Stock Dividend 1,690,191 169,019,100 2,281,758,300

2007 25% Stock Dividend 5,704,395 570,439,500 2,852,197,800 2008 20% Stock Dividend 5,704,395 570,439,500 3,422,637,300 2009 35% Stock Dividend 11,979,230 1,197,923,000 4,620,560,300

2010 Right Issue @1:2 23,102,801 2,310,280,100 6,930,840,400 20% Stock Dividend 13,861,680 1,386,168,000 8,317,008,400

2011 Stock split (1:10) 748,530,756 - 8,317,008,400 5% Stock Dividend 41,585,042 415,850,420 8,732,858,820

2012 None - - 8,732,858,820 2013 5% Stock Dividend 43,664,294 436,642,940 9,169,501,760 2014 None - - 9,169,501,760 2015 None - - 9,169,501,760


22.5 Classification of shareholders by holding

Number of holders % of total holding

2016 2015 2016 2015

Less than 500 shares 12,031 14,760 0.22 0.26

501 to 5,000 shares 21,160 24,891 3.91 4.58

5,001 to 10,000 shares 2,744 3,149 2.10 2.40

10,001 to 20,000 shares 1,521 1,791 2.31 2.71

20,001 to 30,000 shares 471 538 1.27 1.45

30,001 to 40,000 shares 217 252 0.82 0.95

40,001 to 50,000 shares 121 141 0.60 0.70

50,001 to 1,00,000 shares 309 327 2.45 2.56

1,00,001 to 10,00,000 shares 311 311 9.63 9.91

Over 10,00,000 shares 124 125 76.69 74.48

39,009 46,285 100.00 100.00

22.6 Initial public offer (IPO)

Out of the total issued, subscribed and fully paid up capital of the bank 1,500,000 (after stock split: 15,000,000) ordinary shares of Tk 100 (after stock split: Tk. 10) each amounting to Tk 150,000,000 was raised through public offering on shares in 1999.

22.7 Name of the Directors and their shareholdings in the year 2016

Sl. no. Name of the directors Status As at 1 January

2016

As at 31 December

20161 Mr. Alamgir Kabir, FCA Chairman 19,694,672 19,944,672

2"Mr. Ragib Ali (ceased to be Director on and from March 8, 2017)"

Vice Chairman 28,026,291 28,026,291

3 Mr. M. A. Kashem Director 20,307,060 20,307,060 4 Mr. Azim Uddin Ahmed Director 25,490,735 25,490,735 5 Mrs. Duluma Ahmed Director 19,082,742 19,082,742 6 Mrs. Jusna Ara Kashem Director 18,339,525 18,339,525 7 Mr. Md. Akikur Rahman Director 18,443,731 18,443,731 8 Mrs. Rehana Rahman Director 18,344,145 18,844,145 9 Mrs. Sirat Monira Director 120,547 120,547

10

"Mr. Abdul Hye(Representing Karnafuli Tea Co. Limited) (Ceased to be Director on and from March 8, 2017)"

Director 162,420 162,420

11 Mr. A. H. M. Moazzem Hossain Independent Director - -

12 Dr. Quazi Mesbahuddin Ahmed Independent Director - -

13 Mr. M. Kamal Hossain Managing Director (Current Charge) - -

168,011,868 168,761,868


ents

Note 2016 Taka

2015 Taka

22.8 Capital to Risk weighted Asset Ratio (CRAR) of the Bank

The calculation of CRAR has been done as per BRPD Circular no. 07 dated 31 March 2014 and the Basel-III guide-line December 2014 vide BRPD Circular no. 18 dated 21 December 2014.

Common equity Tier-1 capital (Going Concern Capital)Paid up capital 9,169,501,760 9,169,501,760 Share premium - - Statutory reserve 23 9,170,000,000 8,897,307,905 General reserve 25 247,650,000 247,650,000 Retained earnings 28 3,171,824,195 2,942,327,335

21,758,975,955 21,256,787,000 Add: Additional Tier 1 capital - - Less: Regulatory adjustments 108,599,195 64,641,458 A) Total common equity Tier 1 capital 21,650,376,760 21,192,145,542

Tier 2 Capital (Gone -Concern Capital)Subordinated bond 7,400,000,000 3,000,000,000 General provision maintained against unclassified loan/investments 2,430,000,000 1,540,000,000 General provision on off-balance sheet items 1,139,500,000 890,000,000 Asset revaluation reserve 2,101,404,750 2,101,404,750 Revaluation reserve of Government securities 234,027,984 234,027,984

13,304,932,734 7,765,432,734 Less: Regulatory adjustments 934,173,094 467,086,547 Total Tier 2 capital 12,370,759,640 7,298,346,187 B) Total capital 34,021,136,400 28,490,491,729

C) Risk Weighted Assets (RWA)

Credit Risk On-balance sheet 197,023,731,313 171,797,949,395 Off-balance sheet 52,501,153,245 47,096,419,890

249,524,884,558 218,894,369,285 Market risk 10,687,308,524 9,476,714,296 Operational risk 19,045,800,808 17,229,996,177 Total RWA 279,257,993,890 245,601,079,758

D) Required common equity Tier 1 Capital 12,566,609,725 11,052,048,589

Required Tier 1 Capital (5.5% of RWA) 15,359,189,664 13,508,059,387

E) Required total capital 10.625% of RWA (2015: 10%) 29,671,161,851 24,560,107,976

F) Surplus common equity Tier 1 Capital(A-D) 9,083,767,035 10,140,096,953

G) Surplus total capital (B-E) 4,349,974,549 3,930,383,753

Capital to risk-weighted assets ratio:

On common equity Tier 1 capital against standard of minimum 4.5% 7.75% 8.63%On Tier 1 capital - against standard of minimum 5.5% 7.75% 8.63%On total capital - against standard of minimum 10.625% (2015:10%) 12.18% 11.60%


22.9 Leverage Ratio of the Bank

A) Tier 1 capital considering all regulatory adjustments 21,650,376,760 21,192,145,542

B) On-balance sheet exposure 288,205,418,780 257,929,754,083 C) Off-balance sheet exposure 65,343,127,141 53,959,699,503 D) Deduction from on and off balance sheet

exposure / Regulatory adjustment 108,599,195 64,641,458

E) Total exposure (B+C-D) 353,439,946,726 311,824,812,128

Leverage ratio (A/E) 6.13% 6.80%Liquidity coverage ratio 118.50% 140.77%Net stable funding ratio 109.53% 107.60%

22.10 Capital to Risk weighted Asset Ratio (CRAR) of the Group

Common Equity Tier 1 CapitalPaid up capital 9,169,501,760 9,169,501,760 Share premium - - Statutory reserve 23 9,170,000,000 8,897,307,905 General reserve 25 247,650,000 247,650,000 Non- controlling interest 29 10,003,160 9,428,284 Retained earnings 27 3,196,967,474 2,951,940,410

21,794,122,394 21,275,828,359 Add: Additional Tier 1 capital - - Less: Regulatory adjustments 108,599,195 64,641,458 A) Total common equity Tier 1 capital 21,685,523,199 21,211,186,901

Tier 2 capital (Gone- Concern Capital)

Subordinated bond 7,400,000,000 3,000,000,000 General provision maintained against unclassified loan/investments 2,430,000,000 1,540,000,000 General provision on off-balance sheet items 1,139,500,000 890,000,000 Asset revaluation reserve 2,101,404,750 2,101,404,750 Revaluation reserve of Government securities 234,027,984 234,027,984

13,304,932,734 7,765,432,734 Less: Regulatory adjustments 934,173,094 467,086,547 Total Tier 2 capital 12,370,759,640 7,298,346,187

B) Total capital 34,056,282,839 28,509,533,088

C) Risk weighted assets (RWA)

Credit risk On-balance sheet 193,740,348,940 169,788,524,420 Off-balance sheet 52,501,153,245 47,096,419,890

246,241,502,185 216,884,944,310 Market risk 15,004,950,584 13,052,166,626 Operational risk 19,155,835,724 17,313,773,484 Total RWA 280,402,288,493 247,250,884,420

D) Required common equity Tier 1 capital 12,618,102,982 11,126,289,799

Required Tier 1 capital (5.5% of RWA) 15,422,125,867 13,598,798,643

E) Required total capital 10.625% of RWA (2015: 10%) 29,792,743,152 24,725,088,442

F) Surplus common equity Tier 1 capital (A-D) 9,067,420,217 10,084,897,102

G) Surplus total capital (B-E) 4,263,539,686 3,784,444,646

Capital to risk- weighted asset ratio:On common equity Tier 1 capital - against standard of minimum 4.5% 7.73% 8.57%On Tier 1 capital - against standard of minimum 5.5% 7.73% 8.57%On total capital-against standard of minimum 10.625% of RWA (2015:10%) 12.15% 11.52%

Note 2016 Taka

2015 Taka


ents

Note 2016 Taka

2015 Taka

22.11 Leverage ratio of the Group

A) Tier 1 capital considering all regulatory adjustments 21,685,523,199 21,183,282,293

B) On-balance sheet exposure 288,083,485,568 258,394,742,372 C) Off-balance sheet exposure 65,343,127,141 53,959,699,503 D) Deduction from on and off balance sheet

exposure /Regulatory adjustment 108,599,195 64,641,458

E) Total exposure (B+C-D) 353,318,013,514 312,289,800,417

Leverage ratio (A/E) 6.14% 6.78%Liquidity coverage ratio 118.50 140.77%Net stable funding ratio 109.53% 107.60%

23 Statutory reserve

Balance as at 1 January 8,897,307,905 7,792,812,001 Addition during the year 272,692,095 1,104,495,904 Balance as at 31 December 9,170,000,000 8,897,307,905

24 Revaluation reserve

Revaluation reserve of land and buildings:Balance as at 1 January 4,944,481,764 4,944,481,764 Addition during the year - -

4,944,481,764 4,944,481,764 Deferred tax liabilities (741,672,265) (741,672,265)Balance as at 31 December 4,202,809,499 4,202,809,499

Revaluation reserve on HTM securities:Balance as at 1 January 31,062,627 71,177,255 Addition during the year 2,973,204 12,198,938

34,035,831 83,376,193 Adjustment during the year (24,264,378) (52,313,566)

9,771,453 31,062,627 Deferred tax liabilities (4,060,523) (12,903,577)Balance as at 31 December 5,710,930 18,159,050

Revaluation reserve on HFT securities:Balance as at 1 January 1,747,159,502 427,129,047 Addition during the year 1,437,433,310 2,942,233,152

3,184,592,812 3,369,362,199 Adjustment during the year (2,258,979,069) (1,622,202,697)

925,613,743 1,747,159,502 Deferred tax liabilities (370,245,496) - Balance as at 31 December 555,368,247 1,747,159,502

4,763,888,676 5,968,128,051

25 Other reserves

General reserve:Balance as at 1 January 247,650,000 247,650,000 Addition during the year - - Balance as at 31 December 247,650,000 247,650,000

26 Foreign currency translation reserve

Balance as at 1 January 27,870,748 243,022 (Adjustments)/addition during the year (3,421,502) 27,627,726 Balance as at 31 December 24,449,246 27,870,748

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.


Note 2016 Taka

2015 Taka

27 Consolidated retained earnings

Southeast Bank Limited 28 3,171,824,195 2,942,327,335 Southeast Bank Capital Services Limited (36,442,114) (94,939,716)Southeast Financial Services (UK) Ltd (21,927,930) (22,785,689)Southeast Financial Services (Australia) Pty Ltd (16,753,827) (17,223,301)Southeast Exchange Company (South Africa) Pty Ltd* 14,707,102 1,001,733 Less: Elimination for impairment of investment in subsidiary 85,560,048 143,560,048

3,196,967,474 2,951,940,410

* Opening retained earnings of Southeast Exchange Company (South Africa) Pty Ltd has been adjusted to conform with its audited financial statements.

28 Retained earnings

Balance as at 1 January 2,942,327,335 2,638,523,119 Currency translation differences 807,996 945,864 Prior year adjustment 435,000 300,000

2,943,570,331 2,639,768,983 Retained surplus for the year 2,143,679,128 1,977,983,616

5,087,249,459 4,617,752,599 Less:

Transfer to SEBL Foundation* 300,000,000 300,000,000 Transfer to Employees Welfare Fund* 200,000,000 - Transfer to Green Award Trust* 40,000,000 - Cash dividend paid 1,375,425,264 1,375,425,264

1,915,425,264 1,675,425,264 Retained earnings carried forward 3,171,824,195 2,942,327,335

* The Board of Directors in its 504th meeting held on 29 December 2016 has decided to transfer Tk. 30 crore to SEBL Foundation, Tk. 20 crore to Staff Welfare Fund and Tk. 4 crore to Southeast Bank Green Award Trust from retained earnings of the Bank.

29 Non-controlling interest

Paid up capital 5,500,000,000 1,500,000,000 Retained earnings (36,508,959) (95,581,382)Total net assets 5,463,491,041 1,404,418,618

Non-controlling interest 0.183091% (2015: 0.67133%) of net assets 10,003,160 9,428,284

Non-controlling interest arises only for Southeast Bank Capital Services Limited since all other subsidiaries are wholly owned by Southeast Bank Limited.

30 Contingent liabilities

30.1 Acceptances and endorsements

Acceptance under Letters of Credit (LC) - other than back to back 28,774,137,644 23,373,332,515 Acceptance under Letters of Credit -back to back 15,039,415,997 12,850,087,695

43,813,553,641 36,223,420,210

30.2 Letters of guarantee

Local 12,150,518,547 10,266,430,750 Foreign 3,003,598,053 3,128,810,166

15,154,116,600 13,395,240,916


ents

Note 2016 Taka

2015 Taka

30.2.1 Balance for which the Bank is contingently liable in respect of guarantee issued favouring:

Directors or officers 4,857,301 4,783,060 Government - - Banks and other financial institutions 51,189,342 81,078,227 Others 15,098,069,957 13,309,379,629

15,154,116,600 13,395,240,916

30.3 Irrevocable Letters of Credit (L/C)

Back to back L/C 13,920,027,996 11,323,226,669 Others 18,961,275,681 13,669,153,288

32,881,303,677 24,992,379,957

30.4 Bills for collection

Local 8,626,271,866 5,856,105,661 Foreign 9,204,033,000 6,956,639,068

17,830,304,866 12,812,744,729

30.5 Other contingent liabilities

Value of Bangladesh Sanchaypatra & others 1,474,684,000 1,098,459,000

31 Income statement

Income:Interest, discount and similar income 21,860,782,434 22,691,325,422 Dividend income 171,780,691 131,633,489 Fees, commission and brokerage 1,716,151,498 1,713,156,821 Gains less losses arising from dealing securities (92,035,077) 204,718,261 Gains less losses arising from investment securities 62,766,457 15,793,515 Gains less losses arising from dealing in foreign currencies 1,131,546,418 1,010,846,578 Other operating income 630,611,620 518,566,500

25,481,604,041 26,286,040,586 Expenses:

Interest, fees and commission 12,785,664,559 14,652,724,337 Administrative expenses 2,907,702,764 2,372,891,418 Other operating expenses 1,011,019,434 953,168,351 Depreciation on banking assets 279,400,188 263,312,640

16,983,786,945 18,242,096,746 Income over expenses 8,497,817,096 8,043,943,840

32 Consolidated interest income/profit on investments

Southeast Bank Limited 33 16,988,878,395 17,918,296,225 Southeast Bank Capital Services Limited 98,716,858 125,781,000 Southeast Financial Services (Australia) Pty Ltd - 23,843 Southeast Exchange Company (South Africa) Pty Ltd 3,159,897 2,839,532


16,972,326,566 17,794,795,961


Note 2016 Taka

2015 Taka

33 Interest income/profit on investments

Interest on loans and advances (Conventional Banking):Interest on loans and advances 15,723,721,273 16,574,625,488 Interest on placement with other banks and financial institutions 235,799,541 276,652,770 Interest on foreign currency balances 41,032,156 15,215,538

16,000,552,970 16,866,493,796

Profit on investment (Islamic Banking):Profit on investments 960,821,860 965,947,429 Profit on placement with other banks 27,503,565 85,855,000

988,325,425 1,051,802,429 16,988,878,395 17,918,296,225

34 Consolidated interest paid/profit shared on deposits and borrowings etc.

Southeast Bank Limited 35 12,785,664,559 14,652,724,337 Southeast Bank Capital Services Limited 97,880,488 255,758,304


12,765,116,463 14,656,338,002

35 Interest paid/profit shared on deposits and borrowings etc.

Interest paid on deposits (Conventional Banking): Interest on deposits 11,055,657,345 12,622,563,921 Interest on borrowings 632,784,047 542,801,433 Interest on repurchase agreement (repo) 17,128,657 72,434,392 Interest on refinance 6,122,088 10,285,260 Interest on foreign bank accounts 688,517 194,742

11,712,380,654 13,248,279,748

Profit shared on deposits (Islamic Banking): Profit paid on deposits 1,033,652,397 1,343,581,570 Profit on refinance borrowings 39,631,508 60,863,019

1,073,283,905 1,404,444,589 12,785,664,559 14,652,724,337

36 Consolidated investment income

Southeast Bank Limited 37 5,014,416,110 5,125,174,462 Southeast Bank Capital Services Limited 65,190,638 33,362,661

5,079,606,748 5,158,537,123

37 Investment income

Interest income from Government securities 37.1 4,850,203,187 4,773,029,197 Capital gain on Government securities 37.2 165,315,064 719,429,991 Revaluation gain (loss) on Government securities 37.3 (257,350,141) (514,711,730)Dividend on investment in shares 171,780,691 131,633,489 Gain on sale of investment in shares 62,766,457 15,793,515 Interest income from investment in bonds 21,700,852 -

5,014,416,110 5,125,174,462

37.1 Interest income from Government securities

Interest on treasury bills 50,888,907 239,535,791 Interest on treasury bonds/T&T bonds 5,212,036,586 4,835,121,203 Interest on Bangladesh Bank bills 12,775,336 6,711,914

5,275,700,829 5,081,368,908

Interest expenses on treasury bills - - Interest expenses on treasury bonds (425,497,642) (308,339,711)

(425,497,642) (308,339,711)Net interest income from Government securities 4,850,203,187 4,773,029,197


ents

Note 2016 Taka

2015 Taka

37.2 Capital gain on Government securities

Capital gain on treasury bills 33,613,398 98,425,984 Capital gain on treasury bonds/T&T bonds 470,308,910 731,661,716

503,922,308 830,087,700

Capital loss on treasury bills (10,522,317) (8,331,996)Capital loss on treasury bonds/T&T bonds (328,084,927) (102,325,713)

(338,607,244) (110,657,709)Net capital gain on Government securities 165,315,064 719,429,991

37.3 Revaluation gain (loss) on Government securities

Revaluation gain on treasury bills 34,853,444 25,849,050 Revaluation gain on treasury bonds 1,123,041,580 449,723,766 Revaluation gain on Bangladesh Bank bills 331,058 19,708

1,158,226,082 475,592,524

Revaluation loss on treasury bills (36,796,312) (22,675,968)Revaluation loss on treasury bonds (1,378,764,241) (967,628,286)Revaluation loss on Bangladesh Bank bills (15,670) -

(1,415,576,223) (990,304,254)Net revaluation gain (loss) on Government securities (257,350,141) (514,711,730)

38 Consolidated commission, exchange and brokerage

Southeast Bank Limited 39 2,847,697,916 2,724,003,399 Southeast Bank Capital Services Limited 442,368 154,998 Southeast Financial Services (UK) Ltd 17,672,592 19,999,820 Southeast Financial Services (Australia) Pty Ltd 283,051 715,009 Southeast Exchange Company (South Africa) Pty Ltd 36,939,030 14,584,362

2,903,034,957 2,759,457,588

39 Commission, exchange and brokerage

Commission and brokerage 1,716,151,498 1,713,156,821 Exchange gain 39.1 1,131,546,418 1,010,846,578

2,847,697,916 2,724,003,399

39.1 Exchange gain

Exchange gain from revaluation/trade of foreign currency 1,084,482,265 979,255,985 Exchange gain from credit card 47,064,153 31,590,593

1,131,546,418 1,010,846,578 40 Consolidated other operating income

Southeast Bank Limited 41 630,611,620 518,566,500 Southeast Bank Capital Services Limited 33,385,795 31,107,205 Southeast Financial Services (UK) Ltd 956,063 1,503,333 Southeast Financial Services (Australia) Pty Ltd 994,837 5,243 Southeast Exchange Company (South Africa) Pty Ltd 241,617 109,376

666,189,932 551,291,657 Less: Inter company balance eliminated 3,587,040 3,358,080

662,602,892 547,933,577


Note 2016 Taka

2015 Taka

41 Other operating income

Remittance fees 383,507 232,871 Service and incidental charges 75,606,799 68,803,075 Other fees - telephone and postage 48,779,453 41,362,545 Income from ATM services 23,717,399 14,540,945 Income from credit card 84,365,797 69,282,425 Income from retail banking 6,203,956 4,377,757 Other Fees - SWIFT and others 187,078,571 164,828,036 Gain on sale of fixed assets 41.1 4,504,032 853,657 Income from telecash 1,544,548 432,573 Miscellaneous income 198,427,558 153,852,616

630,611,620 518,566,500

41.1 Gain on sale of fixed assets

Cost:Motor vehicles 1,950,826 2,956,000 Furniture and fixtures - 116,769 Office appliances 43,200 - Electrical appliances 1,725,338 1,504,190

3,719,364 4,576,959 Accumulated depreciation:

Motor vehicles 1,882,200 1,675,067 Furniture and fixtures - 41,123 Office appliances 43,200 - Electrical appliances 1,355,117 1,198,015

3,280,517 2,914,205 Written down value 438,847 1,662,754 Sale proceeds of the above fixed assets 4,942,879 2,516,411 Gain on sale of fixed assets 4,504,032 853,657

42 Consolidated salaries and allowances

Southeast Bank Limited 43 1,720,787,663 1,399,383,806 Southeast Bank Capital Services Limited 8,625,400 11,696,995 Southeast Financial Services (UK) Ltd 7,711,740 7,853,081 Southeast Financial Services (Australia) Pty Ltd 333,190 2,039,009 Southeast Exchange Company (South Africa) Pty Ltd 4,006,523 2,709,032

1,741,464,516 1,423,681,923

43 Salaries and allowances

Basic salary 859,905,510 654,328,225 Allowances 528,545,144 459,126,067 Bonus 259,398,089 228,817,202 Provident fund 72,938,920 57,112,312

1,720,787,663 1,399,383,806

44 Consolidated rent, taxes, insurance, electricity etc.

Southeast Bank Limited 45 781,507,962 644,286,649 Southeast Bank Capital Services Limited 16,836,502 8,242,562 Southeast Financial Services (UK) Ltd 3,811,899 4,140,741 Southeast Financial Services (Australia) Pty Ltd 377,117 2,938,733 Southeast Exchange Company (South Africa) Pty Ltd 2,089,838 2,010,145

804,623,318 661,618,830 Less: Inter company balance eliminated 3,587,040 3,358,080

801,036,278 658,260,750


ents

Note 2016 Taka

2015 Taka

45 Rent, taxes, insurance, electricity etc.

Rent, rates and taxes 506,634,063 391,707,570 Insurance 175,031,301 164,455,956 Electricity and lighting 99,842,598 88,123,123

781,507,962 644,286,649

46 Consolidated postage, stamp, telecommunication etc.

Southeast Bank Limited 47 165,740,473 146,538,853 Southeast Bank Capital Services Limited 128,918 142,424 Southeast Financial Services (UK) Ltd 183,062 310,829 Southeast Financial Services (Australia) Pty Ltd 21,703 103,425 Southeast Exchange Company (South Africa) Pty Ltd 376,820 233,647

166,450,976 147,329,178

47 Postage, stamp, telecommunication etc.

Postage 44,488,954 37,338,508 Telephone /Telex 14,263,286 12,711,247 Electronic banking service 3,461 125,000 FC Charge (Nostro) 5,409,679 2,605,770 VSAT on-line 45,683,245 42,060,483 Reuters services 1,962,811 1,879,528 Other Fees - SWIFT and others 53,929,037 49,818,317

165,740,473 146,538,853

48 Consolidated stationery, printing, advertisements etc.

Southeast Bank Limited 49 130,657,839 111,489,118 Southeast Bank Capital Services Limited 202,117 200,311 Southeast Financial Services (UK) Ltd 607,780 346,291 Southeast Financial Services (Australia) Pty Ltd - 16,844 Southeast Exchange Company (South Africa) Pty Ltd 766,662 571,405

132,234,398 112,623,969

49 Stationery, printing, advertisements etc.

Office stationery 21,152,613 18,314,078 Printing stationery 41,971,518 31,346,737 Security stationery 22,542,957 17,357,258 Computer stationery 12,055,150 12,003,521 Publicity and advertisement 32,935,601 32,467,524

130,657,839 111,489,118

50 Managing Director's salary and fees

Basic salary 4,793,333 3,900,000 House rent 1,497,500 1,200,000 House maintenance 895,833 600,000 Leave fare concession 1,497,500 1,200,000 Utility 595,000 - Special allowance 895,834 900,000 Bonus 1,800,000 1,650,000

11,975,000 9,450,000

51 Consolidated directors' fees

Southeast Bank Limited 52 2,697,276 2,610,734 Southeast Bank Capital Services Limited 215,000 40,000

2,912,276 2,650,734


Note 2016 Taka

2015 Taka

52 Directors' fees

Directors' fees 2,344,000 1,649,000 Directors' haltage and travelling 353,276 961,734

2,697,276 2,610,734

Each Director is paid TK. 8,000/-from 15 October 2015 per meeting per attendance.

53 Consolidated auditors' fees

Southeast Bank Limited 1,000,000 1,000,000 Southeast Bank Capital Services Limited 40,000 40,000 Southeast Exchange Company (South Africa) Pty Ltd 559,917 -

1,599,917 1,040,000

54 Consolidated depreciation and repair

Depreciation:Southeast Bank Limited 55 279,400,188 263,312,640 Southeast Bank Capital Services Limited 27,190,185 14,093,586 Southeast Financial Services (UK) Ltd 888,708 1,091,829 Southeast Financial Services (Australia) Pty Ltd 152,406 497,887 Southeast Exchange Company (South Africa) Pty Ltd 1,039,886 981,349

308,671,373 279,977,291

Repair:Southeast Bank Limited 55 93,336,551 58,132,258 Southeast Bank Capital Services Limited 1,255,742 673,000 Southeast Financial Services (UK) Ltd 100,822 161,603 Southeast Financial Services (Australia) Pty Ltd - 10,893 Southeast Exchange Company (South Africa) Pty Ltd 238,245 221,626

94,931,360 59,199,380 403,602,733 339,176,671

55 Depreciation and repair of bank's assets

A. Depreciation:Buildings 53,357,385 48,619,767 Furniture and fixtures 61,317,791 56,984,104 Professional and reference books - 95,360 Office appliances 1,238,052 1,062,247 Computer 19,968,426 13,529,237 Electrical appliances 107,395,523 100,824,170 ATM Booth 20,857,361 21,141,517 Motor vehicles 15,265,650 21,056,238

279,400,188 263,312,640

B. Repair:Furniture and fixtures 35,969,647 5,754,714 Office and electrical appliances 23,976,704 21,824,795 Motor vehicles 4,258,022 3,640,520 Repair, maintenance and utilities 29,132,178 26,912,229

93,336,551 58,132,258 Total (C=A+B) 372,736,739 321,444,898

56 Consolidated other expenses

Southeast Bank Limited 57 1,010,435,457 951,884,557 Southeast Bank Capital Services Limited 5,369,534 3,462,957 Southeast Financial Services (UK) Ltd 4,359,925 3,423,049 Southeast Financial Services (Australia) Pty Ltd 12,489 89,168 Southeast Exchange Company (South Africa) Pty Ltd 9,179,052 10,546,788 Adjustment for impairment loss of investment in subsidiary 58,000,000 (95,000,000)

1,087,356,457 874,406,519


ents

Note 2016 Taka

2015 Taka

57 Other expenses

Security and cleaning 148,841,877 127,232,340 Entertainment 116,860,733 46,674,147 Car expenses 164,676,795 130,489,223 Books and periodicals 898,728 976,679 Subscription and donation 115,669,497 60,498,693 Travelling expenses 11,164,330 9,859,639 Finance charge on leased assets 3,035,011 4,944,097 Conveyance 12,223,285 11,633,629 Fuel 8,897,361 8,397,740 Training/seminar 5,739,140 3,448,952 Uniforms and apparels 5,307,757 4,007,760 Medical expenses 104,721 74,702 Gratuity 45,000,000 62,000,000 Professional expenses 6,360,999 6,839,375 Expenses for CIB report 714,180 544,370 Expenses regarding credit card 38,096,943 50,265,397 Expenses regarding retail banking & agriculture 72,976,339 60,970,927 Expenses regarding call centre 1,281,797 937,221 Expenses relating to ATM services 14,747,512 3,788,855 Expenses regarding mobile banking services-Telecash 8,001,219 2,926,838 Impairment loss from investment in subsidiary (58,000,000) 95,000,000 Miscellaneous 287,837,233 260,373,973

1,010,435,457 951,884,557

58 Consolidated provision for diminution in value of investments

Southeast Bank Limited 59 (364,779,225) 274,155,492 Southeast Bank Capital Services Limited (38,821,526) (4,673,593)

(403,600,751) 269,481,899

59 Provision for diminution in value of investments

Dealing securities- QuotedRequired provision for the year 9.7 905,705,624 1,725,241,065 Provision has already been maintained last year (1,725,241,065) (1,457,858,600)Provision released for disposal of shares during the year 454,756,216 6,773,027 Provision maintained during the year (364,779,225) 274,155,492

60 Consolidated provision for taxation

Current tax:Southeast Bank Limited 61 2,765,000,000 2,300,000,000 Southeast Bank Capital Services Limited 19,740,876 7,590,516 Southeast Exchange Company (South Africa) Pty Ltd 5,812,250 477,988

2,790,553,126 2,308,068,504 Deferred tax:

Southeast Bank Limited 61 65,000,000 140,000,000 Southeast Exchange Company (South Africa) Pty Ltd (28,735) -

64,971,265 140,000,000 2,855,524,391 2,448,068,504

61 Provision for taxation

Current tax 2,765,000,000 2,300,000,000 Deferred tax 65,000,000 140,000,000

2,830,000,000 2,440,000,000


Note 2016 Taka

2015 Taka

62 Consolidated cash received from other operating activities

Southeast Bank Limited 63 626,107,588 517,712,843 Southeast Bank Capital Services Limited 29,798,755 27,749,126 Southeast Financial Services (UK) Ltd 956,063 1,503,333 Southeast Financial Services (Australia) Pty Ltd 994,837 5,243 Southeast Exchange Company (South Africa) Pty Ltd 241,617 109,375

658,098,860 547,079,920

63 Cash received from other operating activities

Remittance fees 383,507 232,871 Service and incidental charges 75,606,799 68,803,075 Other Fees-Telephone and Postage 48,779,453 41,362,545 Income from ATM services 23,717,399 14,540,945 Income from Credit Card 84,365,797 69,282,425 Other Fees - SWIFT and others 187,078,571 164,828,036 Income from Retail Banking 6,203,956 4,377,757 Income from Telecash 1,544,548 432,573 Miscellaneous income 198,427,558 153,852,616

626,107,588 517,712,843

64 Consolidated payments for other operating activities

Southeast Bank Limited 65 2,134,111,013 1,820,501,267 Southeast Bank Capital Services Limited 24,047,813 12,801,254 Southeast Financial Services (UK) Ltd 9,063,488 8,382,513 Southeast Financial Services (Australia) Pty Ltd 411,309 3,159,063 Southeast Exchange Company (South Africa) Pty Ltd 3,471,565 3,036,823

2,171,105,188 1,847,880,920

65 Payments for other operating activities

Rent rates and taxes 864,196,369 754,051,071 Postage 165,740,473 146,538,853 Directors' fees 2,697,276 2,610,734 Repairs 93,336,551 58,132,258 Legal expense 583,977 1,283,794 Audit fees 1,000,000 1,000,000 Other expenses 1,006,556,367 856,884,557

2,134,111,013 1,820,501,267

66 Consolidated earnings per share

Net profit after tax for the year ended 31 December (Taka) 2,434,965,442 3,070,132,933 Number of ordinary shares outstanding 916,950,176 916,950,176 Earnings per share (EPS) (Taka) 2.66 3.35

67 Earnings per share

Net profit after tax for the year ended 31 December (Taka) 2,416,371,223 3,082,479,520 Number of ordinary shares outstanding 916,950,176 916,950,176 Earnings per share (EPS) (Taka) 2.64 3.36


ents

68 Group entities

Name of subsidiary Country of incorporation

Ownership interest %

2016 2015

Southeast Bank Capital Services Limited Bangladesh 99.816909 99.32867Southeast Financial Services (UK) Ltd England and Wales 100 100Southeast Financial Services (Australia) Pty Ltd Australia 100 100Southeast Exchange Company (South Africa) Pty Ltd South Africa 100 100

69 General

69.1 Audit Committee

The Audit Committee is an important functional Committee of the Board of Directors of the Bank. It is assigned with oversight of financial reporting, disclosure, regulatory compliance and disciplined banking operation complying with the rules and norms of banking.

Feature and composition

The Audit Committee was lastly re-constituted by the Board of Directors in its 486th meeting held on 11 April 2016. The membership and attendance of the members of the Audit Committee are given below:

Sl. no. Name Position Meetings

held Attendance Remarks

1 Mr. A.H.M. Moazzem Hossain (Independent Director) Chairman 5 5 a) The Members who could

not attend any meeting were granted leave of absence.b) Ms. Rehana Rahman was appointed as member of the Audit Committee on 11-04-2016.c) Ms. Sirat Monira ceased to be member of the Audit Committee on 11-04-2016.d) Dr. Quazi Mesbahuddin Ahmed was appointed as member of the Audit Committee on 11-04-2016.

2 Mrs. Duluma Ahmed Member 5 4

3 Mrs. Jusna Ara Kashem Member 5 5

4 Mrs. Rehana Rahman Member 5 4

5 Mrs. Sirat Monira Member 5 1

6Dr. Quazi Mesbahuddin Ahmed (Independent Director)

Member 5 3

On invitation, Senior Executives of the Bank including the Managing Director, Chief Financial Officer (CFO), Head of Internal Control and Compliance and Head of Bank’s Risk Management Division attended the meetings to meet instant queries of the Audit Committee to make its decisions fact-based.

The academic qualifications of the members of the Audit Committee are given below:

Sl. no. Name Status with the

committee Educational Qualification

1 Mr. A.H.M. Moazzem Hossain Chairman MA in Economics2 Mrs. Duluma Ahmed Member Graduate3 Mrs. Jusna Ara Kashem Member HSC4 Mrs. Rehana Rahman Member Graduate5 Mrs. Sirat Monira Member MSS6 Dr. Quazi Mesbahuddin Ahmed Member B.A (Hons), M.A., MEC, MSC., Ph.

D. in Economics

Terms of reference of the Audit Committee

i) Mr. A.H.M. Moazzem Hossain, in his capacity as the Independent Director, shall be the Chairman of the Audit Committee.

ii) Presence of 03 (three) members shall form quorum.iii) The tenure of office of the Audit Committee shall be for 3 years.iv) The Company Secretary shall act as Secretary to the Audit Committee.


v) The terms of reference of the Audit Committee shall also be as specified in the BRPD Circular No.11 dated October 27, 2013 of Bangladesh Bank and provisions contained in Notification No.SEC/CMRRCD/2006-158/134/Admin 144 dated 07 August, 2012 of Bangladesh Securities and Exchange Commission (BSEC).

vi) Mr. Zakir Ahmed Khan, Advisor of the Bank, shall remain present in every meeting of the Audit Committee as far as possible and shall give his advice and suggestions for improvement of Bank’s operations and strict compliance of rules of both the Bank and its regulators.

Charter of the Audit Committee

The Audit Committee is constituted by the Board of Directors for the primary purpose of assisting the Board in:

- Overseeing the integrity of the company’s financial statement.- Overseeing the improvement of corporate governance standard of the company. - Overseeing the Company’s system of disclosure, internal controls and procedure.- Overseeing Bank’s internal control over financial reporting.- Overseeing Bank’s compliance with ethical standards adopted by the company.- Making reports and recommendations to the Board.

Roles and responsibilities

The role of Audit Committee is to assist the Board in discharging its duties and responsibilities for financial reporting, corporate governance, internal control, green banking, and environmental and climate change risks. The added roles of the Audit Committee are to:

i) Overseeing the financial reporting process.ii) Monitoring choice of accounting policies and principles. iii) Monitoring Internal Control Risk management process. iv) Overseeing hiring and performance of external auditors.v) Review the annual financial statements before submission to the Board for approval.vi) Reviewing the quarterly and half yearly financial statements before submission to the Board for approvalvii) Reviewing the adequacy of internal audit functionsviii) Reviewing statement of significant related party transactions submitted by the management. ix) Reviewing Management Letters/ Letter of internal control weakness issued by external auditors.x) Reviewing the raising of fund through repeat public offering/ rights issue and its use and application.xi) Monitoring internal control process.xii) Maintaining oversight regulatory compliance, ethics and whistleblower hotlines.xiii) Reviewing Audit Committee’s own terms of reference.

69.2 Risk Management Committee of the Board of Directors of the Bank

The Bank Company (Amendment) Act-2013, inter alia, provided for constitution of a Risk Management Committee of the Board of Directors of every Bank. Bangladesh Bank issued BRPD Circular No.11 dated October 27, 2013 delineating, among other things, the composition and functions of the Risk Management Committee especially in the areas of Bank’s core risk-related issues.

Feature and composition

The Board of Directors of the Bank in its 486th meeting held on April 11, 2016 re-constituted the Risk Management Committee comprising the following Directors of the Bank. One Independent Director was included in the Committee. The membership of the Risk Management Committee of the Board of Directors of the Bank and members’ attendance in its meetings in 2016 are given below:

Sl. no. Members Position Meetings

held Attendance Remarks

1 Mr. Alamgir Kabir, FCA Chairman 4 4 The Members who could not attend any meeting showing genuine ground were granted leave of absence

2 Mr. Ragib Ali (ceased to be Director on and from March 8, 2017)

Member 4 3

3 Mr. M. A. Kashem Member 4 4

4 Mr. Azim Uddin Ahmed Member 4 4

5 Mr. A. H. M. Moazzem Hossain (Independent Director)

Member 4 4


ents

Structure of the Risk Management Committee (RMC)

i) The Chairman of the Board of Directors of the Bank shall be the chairman of the RMC.ii) Presence of 3 (three) members in a meeting of the Committee shall form quorum. iii) The Company Secretary of the Bank shall act as the Secretary to the RMC.

Functions of the Risk Management Committee

The broad functional areas of the Risk Management Committee are the following:

i) Risk assessment and risk control strategy.ii) Review of risk policy and its approval. iii) Review of the information kept by the Management of the Bank and approval of reporting system.iv) Overseeing the overall implementation of Risk Management Policy of the Bank.v) Reporting its decisions and recommendations to the Board.vi) Overseeing the implementation of related guidelines issued by the regulatory bodies from time to time.

69.3 Related party/(ies)

Particulars of Directors of the Bank as at 31 December:

Sl. No. Name of persons Designation Present address

% of shares

as at 31 Dec 2016

% of shares

as at 31 Dec 2015

1 Mr. Alamgir Kabir, FCA Chairman 226, Dilu Road, New Eskaton, Dhaka 2.18% 2.15%

2 Mr. Ragib Ali (ceased to be Director on and from March 8, 2017)

Vice Chairman

House No.06, Road No.76, Gulshan, Dhaka 3.06% 3.06%

3 Mr. M. A. Kashem Director 73/C, Gulshan Avenue, Dhaka-1212 2.21% 2.21%

4 Mr. Azim Uddin Ahmed Director Plot No.51, Road No.09, Block-F,Banani, Dhaka 2.78% 2.78%

5 Mrs. Duluma Ahmed Director Plot No.51, Road No.09, Block-F,Banani, Dhaka 2.08% 2.08%

6 Mrs. Jusna Ara Kashem Director 73/C, Gulshan Avenue, Dhaka-1212 2.00% 2.00%

7 Mr. Md. Akikur Rahman Director Sonarpara, Nobarun-227, Sylhet 2.01% 2.01%

8 Mrs. Rehana Rahman Director House No.10, Road No.68, Gulshan, Dhaka 2.06% 2.00%

9 Mrs. Sirat Monira Director 226, Dilu Road (Ground Floor),New Eskaton, Dhaka 0.01% 0.01%

10 Karnafuli Tea Company Limited (represented by Mr. Abdul Hye) (ceased to be Director on and from March 8, 2017)

Director 67, Motijheel C/A (2nd floor), Dhaka-1000 0.02% 0.02%

11 Mr. A. H. M. Moazzem Hossain Independent Director

Apartment # A-16, Building # 03, Ramna Estate Complex, Bara Moghbazar, Dhaka-1217

- -

12 Dr. Quazi Mesbahuddin Ahmed Independent Director

Flat No.C/3, House No.01, Road No.36, Gulshan, Dhaka-1212

- -

13 Mr. M. Kamal Hossain Managing Director (Current Charge)

Southeast Bank Limited, Head Office, 52-53 Dilkusha C/A, Dhaka-1000 - -

*As per SEC notification no-SEC/CMRRCD/2009-193/119/Admin/34, dated: 22/11/2011; "Each director other than independent director(s)/ nominated director(s) of any listed company shall hold minimum 2% (two percent) shares of the paid-up capital. Otherwise there shall be a casual vacancy of director". But Mrs. Sirat Monira and Mr. Abdul Hye holds 0.01% and 0.02% respectively of total outstanding share who became Director(s) from B Group i.e. public shareholders.


69.3.1 Related party transactions

During the year 2016, the Bank concluded business deals with the following organizations in which the directors had interest:

Name of Organization Relationship Nature of

transaction

Transaction value for the year ended 31 December

Balance outstanding as at 31 December

2016 2015 2016 2015

Taka Taka Taka TakaAsia Insurance Ltd.

Common Director

Insurance coverage 48,939,025 51,428,563 - -


Subsidiary company

Share capital 4,000,000,000 500,000,000 5,489,930,000 1,489,930,000 Interest 118,428,584 252,144,639 - - Loan - - 10,674 2,863,903,191

Southeast Financial Services (UK) Ltd

Subsidiary company Share capital - - 38,493,247 38,493,247

Southeast Financial Services (Australia) Pty Ltd

Subsidiary company Share capital 36,297 - 25,063,712 25,027,415

Southeast Exchange Company (South Africa) Pty Ltd

Subsidiary company Share capital - - 50,103,110 50,103,110

69.3.2 Loans and advances to directors and their related concern

Name of party Name of the director Related by Nature of transaction

Amount in Taka Status

Monorom TradersMr. Azim Uddin Ahmed

Director Bank Guarantee 4,783,061 Regular

Mrs. Duluma Ahmed

Rajnagar Tea Company Ltd.

Mr. Ragib AliDirector Bank

Guarantee 41,349 RegularMr. Abdul Hye

(Both of them ceased to be Director on and from March 8, 2017)

The Sylhet Tea Co. Ltd.

Mr. Ragib AliDirector Bank

Guarantee 32,891 RegularMr. Abdul Hye

(Both of them ceased to be Director on and from March 8, 2017)

Mr. M.A. Kashem Mr. M. A. Kashem Director Credit Card 93,329 Regular

Mr. Azim Uddin Ahmed Mr. Azim Uddin Ahmed Director Credit Card 153,846 Regular

Mrs. Duluma Ahmed Mrs. Duluma Ahmed Director Credit Card 46,948 Regular

Mrs. Suraiya Begum Mr. Alamgir Kabir, FCA Chairman’s wife Credit Card 110,961 Regular

Ms. Sultana Kashem Mr. M. A. Kashem Director’s daughter Credit Card 77,627 Regular

Ms. Farzana Azim Mr. Azim Uddin Ahmed Director’s daughter Credit Card 106,676 Regular

Mr. Mamun Azim Mr. Azim Uddin Ahmed Director’s son Credit Card 169,441 Regular

The Bank complies with the requirements of the section 26 (c) of the Banking Companies Act 1991 as amended in 2013 in connection to the transactions executed with persons related to the Banks.


ents

69.4 Events after the reporting period

The Board of Directors in its 511 th meeting held on 8 April 2017 has recommended a cash dividend @ 20% subject to the approval of the shareholders at the next Annual General Meeting.

The Board of Directors also decided to issue Right Share at the rate of 1:2 (i.e. one Right Share for every two existing shares of Tk.10 each held by a shareholder) with a premium of Tk. 2.50 only for each new share (i.e. one Right Share price shall be Tk.12.50 only) subject to the approval of the regulatory authorities and the shareholders in the 8th Extra-Ordinary General Meeting scheduled to be held on 22 May 2017.

69.5 Number of employees

The number of employees engaged for the whole year or part thereof in 2016 who received a total yearly remuneration of Tk 36,000 or above were 2,616. The total number of employees were 2,376 in 2015.

69.6 Share trading

The Bank started trading its ordinary shares in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) through CDBL from 16 May 2004. The closing market price of the share as on 31 December 2016 was Tk. 18.70 (2015: Tk.17.60) for each Tk.10 per value of share at DSE and Tk. 18.80 (2015: Tk.17.70) for each Tk.10 per value of share at CSE.

69.7 Pattern of Shareholding

Breakup of shareholding pattern as per clause 1.5 (xxi) of Securities and Exchange Commission notification No.SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under Section 2CC of the Securities and Exchange Ordinance, 1969, is as follows:

a) Parent/Subsidiary/Associated companies and other related parties (name wise details):

Sl. no. Name of the Company Shareholding Structure

1 Southeast Bank Capital Services Limited 99.816909% owned by Southeast Bank Limited

2 Southeast Bank Financial Services (UK) Ltd 100% owned by Southeast Bank Limited

3 Southeast Financial Services (Australia) Pty Ltd 100% owned by Southeast Bank Limited

4 Southeast Exchange Company (South Africa) Pty Ltd 100% owned by Southeast Bank Limited

69.8 Highlights on the overall activities of the Bank

Highlights on the overall activities of the Bank have been furnished in Annexure-A.


Southeast Bank LimitedHighlights on the overall activitiesas at and for the year ended 31 December 2016

Sl. no. Particulars 2016 2015

1 Paid-up capital Taka 9,169,501,760 9,169,501,760

2 Total capital Taka 34,021,136,400 28,490,491,729

3 Capital surplus Taka 4,349,974,549 3,930,383,753

4 Total assets Taka 291,993,002,059 260,253,042,164

5 Total deposits Taka 230,533,702,113 210,435,774,704

6 Total loans and advances/investments Taka 189,364,957,468 169,378,858,711

7 Total contingent liabilities and commitments Taka 111,153,962,784 88,522,244,812

8 Credit deposit ratio 82.14% 80.49%9 Percentage of classified loans/investments against total

loans and advances/investments 4.89% 4.25%10 Profit after tax and provision Taka 2,416,371,223 3,082,479,520

11 Amount of classified loans/investments Taka 9,257,788,205 7,193,823,963

12 Provisions kept against classified loans/investments Taka 3,728,284,306 2,323,288,081

13 Provision surplus/(deficit) against classified loans/investments Taka 1,312,478,062 209,665,693

14 Cost of fund 7.32% 8.81%

15 Interest earning assets Taka 251,553,828,013 225,988,551,344

16 Non-interest earning assets Taka 40,439,174,046 34,264,490,820

17 Return on investment (ROI) 0.93% 1.32%

18 Return on assets (ROA) [PAT/ Average assets] 0.88% 1.24%

19 Income from investment Taka 5,014,416,110 5,125,174,462

20 Capital adequacy 12.18% 11.60%

21 Dividends

a) Stock dividends 0% 0%

b) Cash dividends 20% 15%

22 Earnings per share Taka 2.64 3.36

23 Net income per share Taka 2.64 3.36

24 Price earning ratio Times 7.12 5.25

Annexure-A


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osits

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as a

t 31

Dec

embe

r 201

6

Ann

exur

e-C


ents

2016 2015

Number of clients 25 28

Amount of outstanding advances (Amount in million Taka) 86,912.40 77,807.30

Amount of classified advances (Amount in million Taka) NIL NIL

Measures taken for recovery (Taka) NIL NIL

Client-wise break up is as follows:

(Amount in million Taka)

Sl. no. Name of clients

Outstanding as at 31 December 2016

Outstanding as at 31 December 2015

Funded Non funded Total Funded Non

funded Total

1 Abul Khair Group 69.60 2,266.40 2,336.00 1,060.30 2,414.80 3,475.10 2 ACS Textiles (Bangladesh) Limited and its related concerns 2,128.50 1,207.50 3,336.00 2,236.90 1,701.10 3,938.00 3 Bashundhara Group 1,301.10 3,558.60 4,859.70 2,124.80 965.50 3,090.30 4 Designer Fashion Ltd. and its related concerns

(Formerly named as Designer Jeans Ltd.) 799.00 521.30 1,320.30 838.50 616.00 1,454.50 5 Caixa Bank, S.A. LA Caixa - - - - 2,802.30 2,802.30 6 Capital Banani One Ltd. and its related concerns 4,872.80 - 4,872.80 4,347.40 - 4,347.40 7 Cassiopea Fashion ltd. and its related concerns 488.60 1,591.20 2,079.80 446.90 1,139.80 1,586.70 8 Crown Wears (Pvt.) Ltd. and its related concerns 499.70 3,568.10 4,067.80 464.70 2,139.90 2,604.60 9 Deshbandhu Sugar Mills Ltd. and its related concerns 3,929.80 2,645.10 6,574.90 3,800.70 2,508.70 6,309.40

10 Grameen Phone Limited - 1,146.60 1,146.60 - 893.70 893.70 11 Irish Design Limited and its related concerns 670.20 1,383.70 2,053.90 601.30 1,064.60 1,665.90 12 Jaj Bhuiyan Textiles mills and its related concerns 2,301.00 55.80 2,356.80 1,918.00 665.60 2,583.60 13 KDS Group - - - 160.90 569.00 729.90 14 Keya Group 3,512.10 5,614.50 9,126.60 3,419.00 2,500.30 5,919.30 15 Aaron Denim Limited and its related concerns 2,261.80 890.20 3,152.00 2,007.70 544.00 2,551.70 16 Maksons Spinning Mills ltd. 2,341.60 2,095.90 4,437.50 2,493.30 184.00 2,677.30 17 Meghna Group - 6,778.50 6,778.50 277.60 3,483.00 3,760.60 18 Mother Steel ltd. and its related concerns 701.30 452.90 1,154.20 486.20 20.10 506.30 19 N. R. Group 390.70 1,366.80 1,757.50 290.30 1,013.90 1,304.20 20 Partex Group 1,033.70 2,412.20 3,445.90 1,307.90 1,792.10 3,100.00 21 S. Alam Super Edible Oil Ltd. - - - 179.60 3,975.80 4,155.40 22 Yunusco (BD) Limited and its related concerns

(Formarly named as Shore to Shore (BD) Ltd.) 1,263.10 1,640.30 2,903.40 764.80 1,355.00 2,119.80 23 Southeast Bank Capital Services Ltd. - - - 3,099.70 - 3,099.70 24 T. K. Group - 3,182.20 3,182.20 - 2,936.80 2,936.80 25 Rupayan Housing Estate Limited and its related concerns 4,554.80 2.10 4,556.90 3,406.00 - 3,406.00 26 Chittagong Asian Apparels Ltd. and its related concerns 1,748.30 1,765.90 3,514.20 1,600.40 910.60 2,511.00 27 Snowtex Apparels Limited and its related concerns 1,897.90 1,427.50 3,325.40 1,047.40 1,053.10 2,100.50 28 Generation Next Fashions Limited 975.40 1,280.90 2,256.30 1,092.80 1,084.50 2,177.30 29 Designtex Fashions Limited and its related concerns 1,006.40 1,310.80 2,317.20 - - -

Total 38,747.40 48,165.00 86,912.40 39,473.10 38,334.20 77,807.30

Southeast Bank LimitedDetails of Large Loanas at 31 December 2016

Annexure-D


Sout

heas

t Ban

k Li

mite

dSc

hedu

le o

f fixe

d as

sets

incl

udin

g pr

emis

es, f

urni

ture

and

fixt

ures

as a

t 31

Dec

embe

r 201

6

Part

icul

ars

Cos

t/Re

valu

atio

n R

ate

of

dep

.

Dep

reci

atio

n

Wri

tten

d

own

valu

e a

s at

3

1 D

ecem

ber

Bal

ance

a

s at

1

Janu

ary

Add

ition

s d

urin

g th

e ye

ar

Rev

alue

d d

urin

g th

e ye

ar

Dis

posa

l d

urin

g th

e ye

ar

Bal

ance

a

s at

3

1 D

ecem

ber

Bal

ance

a

s at

1

Janu

ary

Cha

rged

d

urin

g th

e ye

ar

Adj

ustm

ent

for d

ispo

sal

dur

ing

the

year

Bal

ance

a

s at

3

1 D

ecem

ber

Tak

a T

aka

Tak

a T

aka

Tak

a %

T

aka

Tak

a T

aka

Tak

a T

aka

Ow

n as

sets

Offi

ce:

Land

5,3

48,4

46,7

25

42

6,59

0,58

8

-

-

5

,775

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,313

-

-

-

-

- 5,

775,

037,

313

Build

ings

1,5

24,3

12,7

48

37

4,67

5,17

0

-

-

1

,898

,987

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4%

3

57,2

78,2

41

5

3,35

7,38

5

-

4

10,6

35,6

26

1,48

8,35

2,29

2 Fu

rnitu

re a

nd fi

xtur

es

884

,008

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131,

043,

614

-

(6

88,4

84)

1,

014,

364,

112

10%

3

40,2

29,7

12

6

1,05

2,19

3

388

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401,

670,

312

6

12,6

93,8

00

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ce a

pplia

nces

12,1

42,0

94

2,0

94,6

19

-

(43,

240)

14,

193,

473

20%

7,6

60,0

51

1,2

38,0

52

(4

3,23

9)

8

,854

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5

,338

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mpu

ter

1

13,6

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11

6

6,78

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9

-

-

180

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20

%

40

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19,

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426

1,7

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6

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0

118

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El

ectr

ical

app

lianc

es

987

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106,

702,

539

-

(5,6

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58)

1,

088,

249,

591

20%

5

27,6

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80

10

5,69

1,83

7

(4

,162

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) 6

29,1

81,5

91

4

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00

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th

158

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20,

880,

439

-

(4,2

34,3

50)

174,

746,

153

20%

59,1

76,1

31

2

0,85

7,36

1

109

,441

80,

142,

933

94,6

03,2

20

Prof

essio

nal a

nd re

fere

nce

book

s

-

-

-

-

- 30

%

-

-

-

-

-

Mot

or v

ehic

les

45,2

15,4

26

1

8,25

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0

-

(6

8,62

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6

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0 20

%

11

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440

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22

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41

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9,

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1,14

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- (1

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0,20

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0 1

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27

2,61

3,69

4 (

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2,36

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614,

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8,59

4,49

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0

Resi

denc

e of

exe

cutiv

es:

Furn

iture

and

fixt

ures

3,7

04,2

90

5

50,0

00

-

-

4,

254,

290

10%

1,3

42,1

20

2

65,5

97

(4

5,82

6)

1

,561

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2

,692

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El

ectr

ical

App

lianc

es

17

,619

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3

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-

(833

,303

)

2

0,06

1,68

0 20

%

10

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1

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(

658,

885)

11,3

35,2

67

8,7

26,4

13

21

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3,8

25,0

00

-

(83

3,30

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315,

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11

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83

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8

- (

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1,3

55,8

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14

274,

582,

977

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52

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ed a

sset

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re a

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es

106

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-

-

-

1

06,0

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27

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1

06,0

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27

-

-

1

06,0

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27

- M

otor

veh

icle

s

76

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-

-

(9,4

38,2

42)

66,

893,

375

20%

63,7

41,4

60

4,8

17,2

10

(

9,43

8,24

3)

59

,120

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7

,772

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18

2,35

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4

-

- (9

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)

172,

919,

602

169,

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687

4

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(9,4

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165

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7,7

72,9

48

Bala

nce

as a

t 31

Dece

mbe

r 201

69,

276,

727,

677

1,15

0,85

6,09

8

-

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973,

403)

10,

406,

610,

372

1,5

25,6

48,8

01

279,

400,

187

(12,

125,

316)

1,79

2,92

3,67

2 8

,613

,686

,700

Ba

lanc

e as

at 3

1 D

ecem

ber 2

015

9,0

29,9

80,2

57

27

3,69

1,22

2

-

(26,

943,

802)

9,

276,

727,

677

1,2

68,8

06,6

37

26

3,31

2,64

0

(6

,470

,475

) 1

,525

,648

,802

7

,751

,078

,875

Ann

exur

e-E


ents

Sl. No. Name Status with

the Bank

Names of firms/companies in which interested as proprietor/ director/

managing agent/ guarantor/ employee/ partner, etc.

Position % of Shareholdings

1 Mr. Alamgir Kabir, FCA ChairmanAsia Insurance Limited Director 6.40%

National Life Insurance Co. Ltd. Independent Director Nil

2Mr. Ragib Ali(ceased to be Director on and from March 8, 2017)

Vice Chairman

The Sylhet Tea Co. Limited Managing Director 21.46%

Rajnagar Tea Co. Limited Do 41.66%

Union Syndicate Limited Do 22.55%

Doloi Tea Co. Limited Chairman 99.98%

Panchaghar Tea Co. Limited Do 25.76%

3 Mr. M. A. Kashem Director Rose Corner (Pvt.) Limited Chairman 50.00%

4 Mr. Azim Uddin Ahmed Director

Mutual Food Products Ltd. Managing Director 44.78%

Mutual Milk Products Ltd. Do 52.00%

Mutual Trading Co. LimitedChairman & Managing Director

71.30%

5 Mrs. Duluma Ahmed Director

Mutual Food Products Ltd. Chairman 31.78%

Mutual Milk Products Ltd. Do 16.00%

Mutual Trading Co. Limited Director 12.96%

6 Mrs. Jusna Ara Kashem Director Rose Corner (Pvt) Ltd. Director 20.00%

7 Mr. Md. Akikur Rahman Director - - Nil

8 Mrs. Rehana Rahman Director Bengal Tradeways Limited Managing Director 74.61%

9 Mrs. Sirat Monira Director - - Nil

10

Karnafuli Tea Company Limited (represented by Mr. Abdul Hye) (ceased to be Director on and from March 8, 2017)

Director - - Nil

11 Mr. A.H.M. Moazzem Hossain Independent Director

International Publication Ltd. (Owning company of the

Financial Express)Director 1.33%

12 Dr. Quazi Mesbahuddin Ahmed Independent Director - - Nil

13 Mr. M. Kamal Hossain

Managing Director (Current Charge)

- - Nil

Southeast Bank LimitedNames of Directors and their interest in different entities

Annexure-F


Southeast Bank LimitedIslamic Banking BranchesBalance Sheet As at 31 December 2016

Note 2016 Taka

2015 Taka

PROPERTY AND ASSETS

Cash 1In hand (including foreign currencies) 138,891,477 85,651,425 Balance with Bangladesh Bank and its agent banks(including foreign currencies) 885,846,050 835,234,394

1,024,737,527 920,885,819 Balance with other banks and financial institutions 2In Bangladesh 300,122,666 221,110 Outside Bangladesh - -

300,122,666 221,110 Money at call and on short notice - - Investments in shares and securities 3Government 650,000,000 640,000,000 Others 2,887,364,353 3,174,173,488

3,537,364,353 3,814,173,488 Investments 4General Investments etc. 8,965,151,558 12,211,769,601 Bills purchased and discounted 326,049,485 158,940,930

9,291,201,043 12,370,710,531 Fixed assets including premises, furniture and fixtures 5 20,834,669 21,977,545 Other assets 6 6,431,807,594 7,756,135,005Non - banking assets - - Total assets 20,606,067,852 24,884,103,498


LiabilitiesBorrowings from other banks, financial institutions and agents 7 1,500,000,000 -

Deposits and other accounts 8Current/Al-wadeeah current accounts and other accounts 1,308,121,942 1,030,499,965 Bills payable 333,143,196 105,260,070 Savings bank/Mudaraba savings bank deposits 1,663,579,436 5,130,145,722 Fixed deposits/Mudaraba fixed deposits 13,435,727,150 15,752,155,994

16,740,571,724 22,018,061,751

Other liabilities 9 2,365,496,128 2,866,041,747 Total liabilities 20,606,067,852 24,884,103,498


Contingent liabilitiesAcceptances and endorsements 10.1 849,894,171 1,190,152,160 Letters of guarantee 10.2 908,652,217 711,261,320 Irrevocable letters of credit 10.3 727,081,836 674,363,740 Bills for collection 10.4 1,013,397,994 894,904,882 Other contingent liabilities - -

3,499,026,218 3,470,682,102

Annexure-G


ents

Southeast Bank LimitedIslamic Banking BranchesProfit and Loss Account For the year ended 31 December 2016

Note 2016 Taka

2015 Taka

Profit on investments 11 1,871,410,563 2,301,101,633 Profit shared on deposits and borrowings etc. 12 (1,073,283,905) (1,448,561,806)Net profit on investments 798,126,658 852,539,827 Commission, exchange and brokerage 13 71,521,015 59,885,760 Other operating income 14 27,758,952 26,078,464

99,279,967 85,964,224 Total operating income (A) 897,406,625 938,504,051

Salaries and allowances 15 78,885,814 65,896,637 Rent, taxes, insurance, electricity etc. 16 37,555,015 28,818,708 Legal expenses 36,500 16,450 Postage, stamp, telecommunication etc. 17 8,217,481 7,476,055 Stationery, printing, advertisements etc. 18 3,273,577 3,331,088 Depreciation and repair of bank's assets 19 7,415,589 6,063,055 Other expenses 20 26,177,936 23,641,527 Total operating expenses (B) 161,561,912 135,243,520 Profit before provision (C=A-B) 735,844,713 803,260,531

Provision for investments 9.1 General provision (56,358,307) 66,516,369 Specific provision 440,905,620 (233,058,135)

384,547,313 (166,541,766)Provision for off-balance sheet items 9.2 283,441 (399,591,185)Provision for diminution in value of investments 9.3 (587,847,712) 722,967,262 Total provision (D) (203,016,958) 156,834,311 Total profit before tax (C-D) 938,861,671 646,426,220

Annexure-G.1


Southeast Bank LimitedIslamic Banking BranchesNotes to the Financial Statements As at and for the year ended 31 December 2016

Note 2016 Taka

2015 Taka

1 Cash

In hand:Local currency 138,859,993 85,572,925Foreign currencies 31,484 78,500

138,891,477 85,651,425 Balance with Bangladesh Bank:

Local currency 870,294,183 834,839,164 Foreign currencies - -

870,294,183 834,839,164 Balance with Sonali Bank Limited (as agent of Bangladesh Bank):

Local currency 15,551,867 395,230 885,846,050 835,234,394

1,024,737,527 920,885,819

1.1 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with section 33 of the Bank Companies Act 1991, MPD Circular nos. 4 and 5 dated 1 December 2010 and MPD Circular no. 1 and 2 dated 23 June 2014 and 10 December 2013 and DOS Circular No. 1 dated 19 January 2014.

The statutory Cash Reserve Ratio on the Shariah-based Islamic Bank's demand and time liabilities at the rate of minimum 6.0% on daily basis and 6.50% on bi-weekly basis been calculated and maintained with Bangladesh Bank in current account and 5.50% Statutory Liquidity Ratio on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including excess cash reserve balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below:

1.1.1 a) Cash Reserve Ratio (CRR) for Islamic Banking

Required reserve (6.50% of average Demand and Time Liabilities:) 815,652,913 783,041,796 Actual reserve held (Average daily on bi-weekly basis): 870,294,183 834,839,164 Surplus 54,641,270 51,797,368

b) Statutory Liquidity Ratio (SLR) for Islamic Banking

Required reserve (5.50 % of average Demand and Time Liabilities:) 690,167,850 662,573,830 Actual reserve held 859,075,477 777,844,023 Surplus 168,907,627 115,270,193

Held for Statutory Liquidity Ratio of Islamic Banking:

Cash in hand 138,891,477 85,651,425 Balance with agent bank (Sonali Bank Ltd.) as per statement

15,543,000 395,230

Excess cash reserve 54,641,000 51,797,368 Government Securities (HTM) 650,000,000 640,000,000

859,075,477 777,844,023

Annexure-G.2


ents

2 Balance with other banks and financial institutions

In Bangladesh 2.1 300,122,666 221,110 Outside Bangladesh - -

300,122,666 221,110

2.1 In Bangladesh

Current account with:Sonali Bank Limited 740 740

740 740 Savings deposits account with:

EXIM Bank Limited - 110,557 Social Investment Bank Limited - 108,679

- 219,236 Short term deposits account with:

Sonali Bank Limited 1,134 1,134 EXIM Bank Limited 120,792 -

121,926 1,134 Fixed deposits with other banks:

Social Islami Bank Limited 300,000,000 - 300,000,000 -

300,122,666 221,110

3 Investments in shares and securities

Bangladesh Government Islamic Bond 650,000,000 640,000,000 Others 3.1 2,887,364,353 3,174,173,488

3,537,364,353 3,814,173,488

3.1 Others

Shares in listed companies 2,887,364,353.00 3,174,173,488 Shares in un-listed companies - -

2,887,364,353 3,174,173,488 Provision for diminution in the market value of shares (722,164,321) (1,310,012,033)

2,165,200,032 1,864,161,456

3.2 Investments classified as per Bangladesh Bank Circular

Held to maturity (HTM) 650,000,000 640,000,000 Other securities 2,887,364,353 3,174,173,488

3,537,364,353 3,814,173,488

3.3 Cost and market value of investments


2016 2015 Cost price

Taka Market price

Taka Market price

Taka

Bangladesh Government Islamic Bond 650,000,000 650,000,000 640,000,000 650,000,000 650,000,000 640,000,000

3.3.2 Others (Investment in shares) 2016 2015 Market price

Taka Cost price

Taka Cost price

Taka

Shares in listed companies 2,162,953,949 2,887,364,353 3,174,173,488 Shares in un-listed companies - - -

2,162,953,949 2,887,364,353 3,174,173,488

Note 2016 Taka

2015 Taka


3.4 Market price, cost price and related provision of investments as on 31 December 2016

Name of the Company2016 Differences

(Provision to be Required)

Market price Taka

Cost price Taka

1 Bay Leasing & Investment Limited 306,804,803 643,319,328 (336,514,525)2 EXIM Bank 1st Mutual Fund 91,050,036 93,296,119 - 3 EXIM Bank Limited 338,449,996 696,815,163 (358,365,167)4 Lafarge Surma Cement Ltd. 131,028,398 155,264,542 (24,236,144)5 National Life Insurance Co. Limited 456,695,360 397,735,353 58,960,007 6 Titas Gas Trans. Co. Ltd. 89,160,973 92,298,169 (3,137,196)7 RN Spinning 3,446,079 4,459,649 (1,013,570)8 Premier Cement Mills Limited 40,032,240 48,428,204 (8,395,964)9 Prime Finance Limited 7,884,394 26,958,933 (19,074,539)10 Premier Leasing & Finance Limited 18,234,930 26,902,718 (8,667,788)11 Generation Next Fashion Limited 37,121,088 65,982,996 (28,861,908)12 Union Capital Limited 12,218,995 14,012,426 (1,793,431)13 Bangladesh LAMPS LTD 12,740,943 16,791,948 (4,051,005)14 Bangladesh Submarine Cable Co. Ltd. 31,913,837 46,266,367 (14,352,530)15 Delta Life Insurance Limited 55,206,866 99,456,628 (44,249,762)16 Aftab Automobiles Limited 61,249,892 94,751,115 (33,501,223)17 Global Heavy Chemicals Limited 24,917,992 34,247,190 (9,329,198)18 Fuwang Food 160,000 125,956 34,044 19 Delta Spinners Limited 2,577,850 3,719,475 (1,141,625)20 Envoy Textile Mills Ltd. 839,244 1,157,799 (318,555)21 Meghna Petroleum Limited 11,955,946 16,651,636 (4,695,690)22 ACME Laboratories Limited 285,575,400 151,004,255 134,571,145 23 Matin Spinning Mills Limited 11,400,720 14,044,434 (2,643,714)24 Ifad Autos 400,800 324,726 76,074 25 Aman Feed Ltd. 13,708,854 14,321,866 (613,012)26 ACI Formulation 11,109,984 11,887,880 (777,896)27 IPDC Finance Ltd. 6,998,445 7,044,521 (46,076)28 Phoenix Finance & Investment Ltd. 6,160,100 6,268,931 (108,831)29 BSC 4,702,000 4,699,724 2,276 30 Fuwang Ceramic 1,829,100 1,592,344 236,756 31 S ALAM 3,730,000 4,004,908 (274,908)32 LankaBangla Finance Limited 8,799,562 8,579,814 219,748 33 Saif Power Tec Ltd. 34,991,612 35,704,991 (713,379)34 BSRM Limited 12,760,000 17,059,559 (4,299,559)35 ShahjiBazar Power Company Ltd. 27,097,510 32,184,686 (5,087,176)

2,162,953,949 2,887,364,353 (722,164,321)Actual provision 722,164,321 Surplus/(deficit) -

Note 2016 Taka

2015 Taka

4 Investments

Investments 4.1 8,965,151,558 12,211,769,601 Bills purchased and discounted 4.2 326,049,485 158,940,930

9,291,201,043 12,370,710,531


ents

4.1 Investments

In BangladeshDemand Investment 242,699,956 39,653,688 Bai-Muajjal (Time) Investment 310,841,197 259,042,064 Bai-Muajjal Time under CCS 55,960,365 45,738,419 Bai-Murabaha-BLC 32,499,080 6,738,157 Bai-Murabaha-LTR 476,095,001 1,199,083,998 Bai-Salam (PACKING CREDIT) 84,436,201 73,641,542 Staff House Building Investment 8,362,607 6,328,219 Export Development Fund (EDF) against LC 633,716,266 394,527,668 Investment against Cash Incentive 17,327,114 9,932,898 Bai-Muajjal - Investment 3,269,956,321 6,350,895,335 Murabaha - Investment 624,262,832 562,799,707 Hire purchase - Investment 3,208,994,618 3,263,282,206 Izarah - Investment - 105,700

8,965,151,558 12,211,769,601 Outside Bangladesh - -

8,965,151,558 12,211,769,601


In Bangladesh 248,139,426 140,539,241 Outside Bangladesh 77,910,059 18,401,689

326,049,485 158,940,930


Cost:Furniture and fixture 20,161,166 18,414,466 Office Appliances 81,620 581,620 Electrical Appliances 26,276,457 24,355,701 Motor Vehicles 2,620,000 2,620,000 ATM Booth 3,915,270 4,820,105

53,054,513 50,791,892 Less: Accumulated depreciation

Furniture and fixture 11,270,813 9,812,806 Office Appliances 81,618 504,737 Electrical Appliances 18,515,303 16,642,945 Motor Vehicles 611,339 87,334 ATM Booth 1,740,771 1,766,525

32,219,844 28,814,347 Written down value as at 31 December 20,834,669 21,977,545

6 Classification of other assets

i) Stationery, stamps, printing materials, etc. 600,598 642,187 ii) Advance rent and advertisement 31,963,867 15,877,032 iii) Interest accrued on investment but not collected,

commission and brokerage receivable on shares anddebentures, and other income receivables 5,791,241 131,241

iv) Security deposits 69,460 69,460 v) Preliminary, formation and organisational expenses,

renovation, development and prepaid expenses 4,154,592 3,335,680 vii) Suspense account 2,404,214 5,034,090 viii) Silver - - ix) Head office general account 6,384,977,192 7,728,329,525X) Others 1,846,430 2,715,790

6,431,807,594 7,756,135,005

Note 2016 Taka

2015 Taka


Note 2016 Taka

2015 Taka

7 Borrowing from other banks, financial institutions and agents

In Bangladesh 7.1 1,500,000,000 - Outside Bangladesh - -

1,500,000,000 -

7.1 In Bangladesh

SecuredBorrowing against securities from Bangladesh Bank 1,500,000,000 -

1,500,000,000 - Unsecured - -

1,500,000,000 -

8 Deposits and other accounts

Al-wadeeah current accounts and other accountsAl-wadeeah current deposits 386,612,640 365,847,770 Foreign currency deposits 25,072,729 26,757,443 Sundry deposits 896,436,573 637,894,752

1,308,121,942 1,030,499,965 Bills payable

Payment order issued 332,989,460 105,081,077 T.T. payable 100,700 125,707 Demand draft 53,036 53,286

333,143,196 105,260,070

Mudaraba savings bank deposits 1,663,579,436 5,130,145,722

Mudaraba fixed depositsMudaraba fixed deposits 11,682,637,461 13,951,911,085 Mudaraba Special notice deposits 675,707,267 625,271,927 Scheme deposits 981,521,681 1,015,417,570 Interest Payable on FDR/Scheme 95,860,741 159,555,412

13,435,727,150 15,752,155,994 16,740,571,724 22,018,061,751

9 Other liabilities

Provision for investments 9.1 1,023,198,841 637,201,528 Provision for off-balance sheet exposures 9.2 34,990,262 34,706,821 Interest suspense account 123,540,202 135,050,659 Obligation under finance lease - - Accrued expenses 1,003,044 85,000 Interest payable on borrowings 4,001,370 - Accounts payable - Bangladesh Bank - - Accounts payable - others 1,568,524 979,793 Provision for diminution in the market value of share 9.2 722,164,321 1,310,012,033 Provision for other assets - - Unearned income 388,476,342 680,406,920 Withholding tax 66,562,222 67,598,993

2,365,946,128 2,866,041,747


ents

Note 2016 Taka

2015 Taka

9.1 A. General provision for investments

Balance as at 1 January 124,744,414 58,228,045 Provision made during the year - 66,516,369

124,744,414 124,744,414 Adjustments made during the year (56,358,307) - Balance as at 31 December 68,386,107 124,744,414

B. Specific provision for investments

Balance as at 1 January 512,457,114 745,515,249 Recoveries of amounts previously written off 1,441,000 - Provision made during the year 440,905,620 -

954,803,734 745,515,249 Adjustments made during the year - (233,058,135)Balance as at 31 December 954,803,734 512,457,114

C. Total provision on investments (C=A+B) 1,023,189,841 637,201,528

9.2 Provision for off-balance sheet exposures

Balance as at 1 January 34,706,821 434,298,006 Provision made during the year 283,441 -

34,990,262 434,298,006 Adjustments made during the year - (399,591,185)Balance as at 31 December 34,990,262 34,706,821

9.3 Provision for diminution in the market value of share

Balance as at 1 January 1,310,012,033 587,044,771 Provision made during the year - 722,967,262

1,310,012,033 1,310,012,033 Adjustments made during the year (587,847,712) - Balance as at 31 December 722,164,321 1,310,012,033

10 Contingent liabilities

10.1 Acceptances and endorsements

Acceptance under Letters of credit - Import 267,075,882 654,937,680 Acceptance under Letters of credit - Export 582,818,289 535,214,480

849,894,171 1,190,152,160

10.2 Letters of guarantee

Local 790,957,217 692,391,320 Foreign 117,695,000 18,870,000

908,652,217 711,261,320

10.2.1 Balance for which the Bank is contingently liable in respect of guarantee issued favouring:

Directors or officers - - Government - - Banks and other financial institutions - - Others 908,652,217 711,261,320

908,652,217 711,261,320

10.3 Irrevocable letters of credit (L/C)

Back to back L/C 328,505,407 375,225,832 Others 398,576,429 299,137,908

727,081,836 674,363,740


Note 2016 Taka

2015 Taka

10.4 Bills for collection

Local 519,166,618 599,526,326 Foreign 494,231,376 295,378,556

1,013,397,994 894,904,882

11. Profit on investment

Demand investment 9,166,698 3,135,713 Bai-Muajjal (Time) investment 29,191,073 19,315,006 Bai-Muajjal time under CCS 6,076,491 5,678,947 Bai-Murabaha-BLC 7,132,582 5,038,070 Bai-Murabaha-LTR 78,329,760 164,424,716 Bai-Salam (PACKING CREDIT) 8,598,552 6,648,440 Staff house building investment 257,208 316,890 Staff car loan investment 166,130 464,143 Investment against cash incentive 1,707,058 994,744 Bai-Muajjal - Investment 403,072,130 453,633,383 Murabaha - Investment 56,450,361 63,004,321 Hire purchase - Investment 323,550,262 211,452,358 Izarah - Investment - 54,106 Quard against MTDR - 14,659 Interest on savings accounts 18,524 - Interest on special term deposit STD 3,300,000 - Bills purchased and discounted 37,123,554 31,771,932 Interest on placement with other banks 24,185,041 85,855,000 Interest branch interest income 883,085,139 1,249,299,205

1,871,410,563 2,301,101,633

12. Profit shared on deposits and borrowings etc.

Profit shared on deposits (Islamic Banking Branch): 80,923,783 187,470,478 Mudaraba Savings Deposits (MSB) 49,073,389 24,810,112 Mudaraba Short Term Deposits (MSTD) 903,655,225 1,131,300,980 Mudaraba Fixed Term Deposits (MFDR) 39,631,508 60,869,206 Interest on Re-finance borrowings - 44,111,030 Inter Branch interest expenses 1,073,283,905 1,448,561,806

13 Commission, exchange and brokerage

Commission and brokerage 60,283,607 52,899,859 Exchange gain 11,237,408 6,985,901

71,521,015 59,885,760

14 Other operating income

Remittance fees 351,761 201,481 Service and incidental charges 5,547,600 5,326,747 Other fees-telephone and postage 2,831,104 2,178,043 Income from retail banking 84,480 262,683 Other fees - SWIFT 8,362,968 7,483,894 Miscellaneous income 10,581,039 10,625,616

27,758,952 26,078,464


Basic salary 39,540,655 30,882,057 Allowances 24,090,710 21,143,291 Bonus 11,770,082 11,100,653 Provident fund 3,484,367 2,770,636

78,885,814 65,896,637


ents


Rent, rates and taxes 23,940,299 15,990,000 Insurance 9,316,439 8,800,826 Electricity and lighting 4,298,277 4,027,882

37,555,015 28,818,708


Postage 2,150,441 1,916,248 Telephone /Telex 411,530 475,698 VSAT on-line 2,241,596 2,199,119 SWIFT services 3,413,914 2,884,990

8,217,481 7,476,055


Office stationery 862,027 767,155 Printing stationery 1,147,213 1,497,034 Security stationery 1,001,573 785,199 Computer stationery 250,094 278,842 Publicity and advertisement 12,670 2,858

3,273,577 3,331,088


Depreciation:Furniture and fixtures 873,253 1,003,308 Office appliances - - Electrical appliances 1,712,153 2,104,553 Motor vehicles 524,004 87,334 ATM Booth 592,011 453,255

3,701,421 3,648,450

Repair:Furniture and fixtures 318,002 368,175 Office and electrical appliance 1,933,309 1,269,593 Repair and maintenance computers 172,965 197,200 Motor vehicles 106,130 98,040 Repair, maintenance and utilities 1,183,762 481,597

3,714,168 2,414,605 7,415,589 6,063,055

20 Other expenses

Security and cleaning 5,511,574 4,793,648 Entertainment 1,509,768 1,296,432 Car expenses 6,697,612 5,961,640 Books and periodicals 33,272 35,426 Subscription and donation 55,000 3,000 Travelling expenses 564,269 389,550 Conveyance 321,351 264,590 Fuel 187,131 121,480 Uniforms and apparels 187,949 156,837 Loss on sale of fixed assets 44,498 - Finance charge on leased assets - 523,489 Expenses for CIB report 6,370 4,080 Expenses regarding retail banking 18,800 202,058 Miscellaneous 11,040,342 9,889,297

26,177,936 23,641,527

Note 2016 Taka

2015 Taka


Southeast Bank LimitedOff-Shore Banking Unit, BangladeshBalance Sheet As at 31 December 2016

Note 2016 2015

USD Taka Taka

PROPERTY AND ASSETS

CashIn hand (including foreign currencies) - - - Balance with Bangladesh Bank and its agent banks - - - (including foreign currencies) - - -

Balances with other banks and financial institutions 3In Bangladesh 393,079 30,939,647 25,288,318 Outside Bangladesh 31,799 2,502,922 25,993,493

424,878 33,442,569 51,281,811 Money at Call and on short notice - - - InvestmentsGovernment - - - Others - - -

- - - Loans and advances 4Loans, cash credit & overdrafts etc. 22,435,600 1,765,930,769 1,254,004,353 Bills purchased and discounted 57,950,547 4,561,351,334 3,643,187,365

80,386,147 6,327,282,103 4,897,191,718 Fixed assets including premises, furniture and fixtures 5 21,601 1,700,220 2,118,263 Other assets 6 159,516 12,555,735 14,505,983 Non-banking assets - - - Total assets 80,992,142 6,374,980,627 4,965,097,775


LiabilitiesBorrowings from other banks, financial institutionsand agents 7 77,405,000 6,092,632,695 4,795,975,829 Deposits and other accounts 8Current accounts and other accounts 66,230 5,213,018 8,845,370 Bills payable - - - Savings bank deposits - - - Fixed deposits 210,847 16,595,974 13,142,470

277,077 21,808,992 21,987,840 Other liabilities 9 1,050,221 82,342,885 63,371,404 Total liabilities 78,732,298 6,196,784,572 4,881,335,073

Capital/shareholders' equityPaid up capital - - - Statutory reserve - - - Other reserves - - - Foreign currency losses - - - Retained earnings 10 2,259,844 178,196,055 83,762,702 Total shareholders' equity 2,259,844 178,196,055 83,762,702 Total liabilities and shareholders' equity 80,992,142 6,374,980,627 4,965,097,775

Annexure-H


ents

Southeast Bank LimitedOff-Shore Banking Unit, BangladeshBalance Sheet As at 31 December 2016

Note 2016 2015

USD Taka Taka


Contingent liabilitiesAcceptances and endorsements - - 156,738,710 Letters of guarantee - - - Irrevocable letters of credit 115,439 9,086,309 33,235,820 Bills for collection 2,427,026 191,033,922 22,613,972

2,542,465 200,120,231 212,588,502 - - -

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 - - -

Claims against the Bank not acknowledged as debt - - - - - -

Other memorandum itemsValue of travelers' cheques on hand - - - Value of Bangladesh Sanchay Patra on hand - - - Total off-balance sheet items including contingent liabilities 2,542,465 200,120,231 212,588,502


Southeast Bank LimitedOff-Shore Banking Unit, BangladeshProfit and Loss account For the year ended 31 December 2016

Note 2016 2015

USD Taka Taka

Interest income 11 4,046,078 317,159,565 219,271,868

Interest paid on deposits and borrowings etc. 12 (2,731,554) (214,118,055) (158,653,769)

Net interest income 1,314,524 103,041,510 60,618,099

Commission, exchange & brokerage 13 189,999 14,893,415 8,119,730

Other operating income 13.1 89,495 7,015,243 4,687,108

279,494 21,908,658 12,806,838

Total operating income (A) 1,594,018 124,950,168 73,424,937

Salaries and allowances 14 45,786 3,589,013 3,258,804

Rent, taxes, insurance, electricity etc. 15 12,243 959,695 854,789

Legal expenses 44 3,449 699,603

Postage, stamp, telecommunication 16 15,003 1,176,104 1,076,393

Stationery, printing, advertisements etc. 17 1,610 126,208 114,076

Depreciation and repair of bank's assets 18 5,891 461,737 414,823

Other expenses 19 138,296 10,840,461 8,130,434

Total operating expenses (B) 218,873 17,156,667 14,548,922

Operating profit (C=A-B) 1,375,145 107,793,501 58,876,015

Provision for loans and advances

General provision 9.1 182,337 14,292,821 30,569,299

Specific provision - - -

182,337 14,292,821 30,569,299

Provision for diminution in value of investments - -

Other provisions 9.2 (1,656) (124,682) 186,385

Total provision (D) 180,681 14,168,139 30,755,684

Total profit before tax (C-D) 1,194,464 93,625,362 28,120,331

Annexure-H.1


ents

Southeast Bank LimitedOff-Shore Banking Unit, BangladeshNotes to the Financial Statements As at and for the year ended 31 December 2016

1 Status of the unit

Off-shore Banking Unit (OBU) is a separate business unit of Southeast Bank Limited, governed under the Rules and Guidelines of Bangladesh Bank. The Bank obtained permission to operate OBU vide Letter No. BRPD(P-3)744(98)/2008-2213 dated June 24, 2008. The Bank presently has 2 (two) OBUs – one at Export Processing Zone, Dhaka and the other at Export Processing Zone, Chittagong.

OBU boosts up foreign trade by extending finance to industrial units inside and outside the Export Processing Zone (EPZ) area. OBU is free to make loans/advances to persons/institutions not resident in Bangladesh and to make loans/advances to Type-A (wholly foreign owned) units in the EPZs in Bangladesh. Industrial units outside the EPZs and Type-B and Type-C industrial units within the EPZs in Bangladesh may avail term loans in foreign currencies from OBU subject to compliance with the guidelines issued by the Board of Investment for borrowing abroad by industrial units Bangladesh.

2 Significant accounting policies and basis of preparations

2.1 Basis of preparation

The financial statements are prepared on the basis of a going concern and represent the financial performance and financial position of the OBU. The financial statements of the OBU are prepared in accordance with the Bank Companies Act 1991, in particular, Banking Regulation and Policy Department (BRPD) Circular No. 14 dated June 25, 2003, other Bangladesh Bank Circulars and Bangladesh Financial Reporting Standards (BFRS).

2.2 Foreign currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates, i.e., the functional currency. The financial statements are presented in Taka which is the Bank’s functional and presentation currency. Figures appearing in the financial statements have been rounded off to the nearest Taka. Assets & liabilities and income & expenses have been converted into Taka currency @ US$1 = Tk. 78.7111 (closing rate as at 31 December 2016) and Tk. 78.3869 (average rate which represents the year end) respectively.

2.3 Basis of Accounting

OBU maintains its accounting records in USD from which accounts are prepared according to the Bank Companies Act, 1991, Bangladesh Financial Reporting Standards and other applicable directives issues by Bangladesh Bank.

2.4 Functional and presentation currency

The Financial Statements of OBU are presented in both USD and Bangladesh Taka (Taka/Tk.) except as otherwise indicated. Financial information presented in Taka and USD has been rounded off to the nearest integer. and financial information presented in USD has been rounded into two decimal points.

Annexure-H.2


Note 2016 2015

USD Taka Taka 3 Balance with other banks and financial institutions

In Bangladesh 3.1 393,079 30,939,647 25,288,318 Outside Bangladesh 3.2 31,799 2,502,922 25,993,493

424,878 33,442,569 51,281,811

3.1 In Bangladesh

Southeast Bank Limited 393,079 30,939,647 25,288,318 Other commercial bank - - -

393,079 30,939,647 25,288,318

3.2 Outside Bangladesh (current account)

Standard Chartered Bank, New York 31,799 2,502,922 25,993,493

4 Loans and advances

Loans, cash credit, overdrafts etc. 4.1 22,435,600 1,765,930,769 1,254,004,353 Bills purchased and discounted 4.2 57,950,547 4,561,351,334 3,643,187,365

80,386,147 6,327,282,103 4,897,191,718

4.1 Loans, cash credit, overdrafts etc.

In Bangladesh - - - Outside Bangladesh 4.1.1 22,435,600 1,765,930,769 1,254,004,353

22,435,600 1,765,930,769 1,254,004,353

4.1.1 Outside Bangladesh

Time loan 5,341,060 420,400,688 541,122,980 Term loan 16,050,898 1,263,383,837 638,664,332 Overdraft 37,109 2,920,921 2,949,219 Advance-LTR 1,006,533 79,225,323 71,267,822

22,435,600 1,765,930,769 1,254,004,353


In Bangladesh - - - Outside Bangladesh 57,950,547 4,561,351,334 3,643,187,365

57,950,547 4,561,351,334 3,643,187,365


Cost:Furniture and fixtures 40,730 3,205,905 3,157,511 Electrical appliances 21,014 1,654,017 1,649,587

61,744 4,859,922 4,807,098 Less:

Furniture and fixtures 21,803 1,716,144 1,490,283 Electrical appliances 18,340 1,443,558 1,198,552

40,143 3,159,702 2,688,835 Written down value as at 31 December 21,601 1,700,220 2,118,263


ents

6 Other assets

Accrued interest on bill purchased and discounted 713 56,116 55,965 Prepaid interest expenses-ICICI - - 2,910,071 Prepaid management fee GCPF 84,591 6,658,410 3,528,428 Prepaid interest mashreq 65,167 5,129,340 - Prepaid expense-IFC monitoring fee 5,750 452,590 7,817,321 Insurance 146 11,447 5,603 Advance office rent 2,149 169,121 168,668 Head office general account 1,000 78,711 - Accounts receivable others - - - Others - - 19,927

159,516 12,555,735 14,505,983

7 Borrowing from other banks, financial institutions and agents

Borrowings from IFC 15,000,000 1,180,666,500 1,177,504,500 Borrowings from Mashreq bank PSC-USD 5,000,000 393,555,500 - Borrowings from GCPF 10,000,000 787,111,000 392,501,500 Borrowings from ICIC - - 549,502,100 Borrowings from Bank Muscat, Oman 5,000,000 393,555,500 - Borrowings from CBQ - - 1,491,505,700 Borrowings from ADB 4,900,000 385,684,390 - Borrowings from FGB, UAE 15,000,000 1,180,666,500 - Borrowings from RAK Bank ,UAE 18,000,000 1,416,799,800 745,752,850 Borrowings from Head Office 4,505,000 354,593,505 439,209,179

77,405,000 6,092,632,695 4,795,975,829

8 Deposit accounts

Current accounts 8.1 66,230 5,213,018 8,845,370 Fixed deposits 210,847 16,595,974 13,142,470

277,077 21,808,992 21,987,840

8.1 Current deposits

Current accounts 19,755 1,554,917 3,167,981 Margin against L/C 11,544 908,631 3,323,582 Sundry creditors 204 16,057 1,627,783 Sundry deposit FCY 34,727 2,733,413 726,024

66,230 5,213,018 8,845,370

9 Other liabilities

Interest payable on borrowings 17,576 1,383,457 10,007,761 Interest payable on FDR 1 61 59 Accrued expenses payable 1,562 122,964 27,244 Interest payable-IFC loan 31,620 2,488,845 2,230,455 Interest payable on RAK Bank, UAE 60,000 4,722,667 - Interest payable on Bank Muscat, Oman 42,328 3,331,677 - Interest payable on FGB, UAE 33,364 2,626,091 - Interest payable on ADB 30,404 2,393,099 - Interest payable-CBQ Loan - - - Provision for unclassified loans and advances 9.1 807,941 63,272,821 48,980,000 Provision for off-balance sheet exposures 9.2 25,425 2,001,203 2,125,885 Other provisions - - -

1,050,221 82,342,885 63,371,404

Note 2016 2015

USD Taka Taka


9.1 Provision for unclassified loans and advances

Balance as at 1 January 625,604 48,980,000 18,410,701 Provision made during the year 182,337 14,292,821 30,569,299

807,941 63,272,821 48,980,000 Adjustments made during the year - - - Balance as at 31 December 807,941 63,272,821 48,980,000

9.2 Other provisions

Provision for off-balance sheet exposuresBalance as at 1 January 27,081 2,125,885 1,939,500 Add: Provision made during the year - - 186,385

27,081 2,125,885 2,125,885 Less: Adjustments made during the year (1,656) (124,682) - Balance as at 31 December 25,425 2,001,203 2,125,885

10 Retained earnings

Balance as at 1 January 1,065,380 83,762,702 54,696,491 Add/less: foreign currency translation gain for last year - 807,991 945,880

1,065,380 84,570,693 55,642,371 Addition during the year 1,194,464 93,625,362 28,120,331

2,259,844 178,196,055 83,762,702 Add/less: foreign exchange gain (loss) - - - Balance as at 31 December 2,259,844 178,196,055 83,762,702

11 Interest income on investment

Interest Income from loans and advances 959,475 75,210,306 48,268,010 Interest on overdraft 1,306 102,359 104,889 Interest income from bill purchased and discounted 3,085,297 241,846,900 170,898,969

4,046,078 317,159,565 219,271,868

12 Interest paid on deposits and borrowings etc.

Interest on IFC loan 662,347 51,919,334 14,472,797 Interest expense on mashreq bank loan 100,944 7,912,722 47,595,535 Interest on CBQ loan 456,651 35,795,422 50,649,008 Interest expenses -GCPE loan 360,612 28,267,290 13,125,581 Interest expenses -ICIC bank 93,275 7,311,538 10,545,132 Interest expenses -RAK bank,UAE 475,640 37,283,968 914,724 Interest expenses -Bank Muscat, Oman 204,341 16,017,653 - Interest expenses FGB, UAE 115,999 9,092,776 - Interest expenses ADB 30,404 2,383,242 - Interest on FDR 19 1,483 884 Interest on calls and placement 231,322 18,132,627 21,350,108

2,731,554 214,118,055 158,653,769

13 Commission, exchange & brokerage

Commission and other charges 189,999 14,893,415 8,119,730 189,999 14,893,415 8,119,730

13.1 Other operating income

Other income- SWIFT 7,783 610,087 429,521 Miscellaneous income 13,982 1,096,011 972,766 Rebate from trade payments 67,730 5,309,145 3,284,821

89,495 7,015,243 4,687,108

Note 2016 2015

USD Taka Taka


ents


Basic salary 21,663 1,698,081 2,009,151 Allowances 15,619 1,224,312 663,246 Provident fund contribution 1,927 151,046 126,848 Bonus 6,577 515,574 459,559

45,786 3,589,013 3,258,804


Rent, rates and taxes 10,101 791,789 699,799 Insurance 217 17,001 22,315 Electricity and lighting 1,925 150,905 132,675

12,243 959,695 854,789


Postage 126 9,852 11,631 Expenses regarding On-line - - - Internet service 4,550 356,688 192,357 SWIFT charges 6,706 525,690 654,889 FC Nostro charges 3,086 241,906 171,023 Telephone 535 41,968 46,493

15,003 1,176,104 1,076,393


Office and printing stationery 1,610 126,208 114,076 1,610 126,208 114,076


Depreciation on own assets:Furniture and fixtures 2,819 220,945 231,091 Electrical appliances 3,072 240,792 183,732

5,891 461,737 414,823

19 Other expenses

Entertainment 311 24,358 22,121 Management fee GCPF 10,355 811,691 393,808 Expense- IFC front-end fee 99,583 7,806,029 3,929,990 Expense-IFC commitment free - - 1,808,011 Expense-IFC portfolio monitoring expense 4,250 333,144 - Travelling expenses and allowance 218 17,090 6,613 House maintenance (Executive ) 2,272 178,082 168,004 Repair, maintenance and utilities 554 43,391 32,840 Books and periodicals 93 7,265 9,214 Conveyance 557 43,623 58,926 Miscellaneous 20,103 1,575,788 1,700,907

138,296 10,840,461 8,130,434

Note 2016 2015

USD Taka Taka


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12,5

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124,

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96,2

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18,6

28,6

55

1,27

7,88

8 40

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12

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211,

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18,6

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40,3

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6,66

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Appendix-A

Audited Financial Statementsof



ents

AUDITOR’S REPORT TO THE SHAREHOLDERS OF

SOUTHEAST BANK CAPITAL SERVICES LIMITED

We have audited the accompanying financial statements of Southeast Bank Capital Services Limited which comprises the Statement of Financial Position as at December 31, 2016 and the related Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in Shareholders Equity, Statement of Cash Flows and for the year ended and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting standards (BFRS), the companies Act 1994, and other applicable laws and regulations, This responsibility includes designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

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 (BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 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.

In our opinion, the financial statements prepared in accordance with Bangladesh Financial Reporting Standards (BFRS), give a true and fair view of the state of the company’s affairs as at December 31, 2016 and its cash flows for the year ended and comply with the companies Act 1994 and other applicable laws and regulations.

We also report that:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;

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

(iii) The financial statements dealt with by the report are in agreement with the books of account and returns.

Dhaka Pinaki & Company

Dated: 23.03.2017 Chartered Accountants


Southeast Bank Capital Services Ltd.Statement of Financial PositionAs at 31 December 2016

PARTICULARS Note 2016 Taka

2015 Taka

ASSETS

A. NON-CURRENT ASSETS 327,715,305 126,334,270 Property, Plant and Equipment 04 327,715,305 126,334,270

B. CURRENT ASSETS 5,473,896,220 4,595,272,201 Margin Loan 05 2,500,642,443 2,363,503,024 Accounts Receivable 06 35,890,284 17,631,297 Advances, Deposits and Prepayments 07 79,461,626 251,911,612 Investment in Quoted Shares 08 2,276,624,953 1,940,851,629 Cash and Cash Equivalents 09 581,276,914 21,374,639

C. TOTAL ASSETS [A + B] 5,801,611,525 4,721,606,471

EQUITY AND LIABILITIES

D. CAPITAL AND RESERVE 5,463,491,041 1,404,418,618 Share Capital 10 5,500,000,000 1,500,000,000 Retained Earnings 11 (36,508,959) (95,581,382)

E. NON-CURRENT LIABILITIES - - - -

F. CURRENT LIABILITIES 338,120,484 3,317,187,852 Margin Deposit 12 21,003,651 16,693,063 Accounts Payable - - Advance Received for Rent 13 13,095,140 19,091,280 Collection in Transit 14 67,035,027 27,320,020 Loan From ICB 15 7,687,819 37,139,427 Bank Overdraft 10,674 2,863,903,191 Provision for Corporate Income Tax 16 61,831,939 42,091,063 Provision for Diminution in Value of Investments 17 114,303,939 153,125,465 Accrued Expenses 18 486,276 114,684,052 Other Liabilities 19 52,666,021 43,140,292

G. TOTAL EQUITY AND LIABILITIES [D + E + F] 5,801,611,525 4,721,606,471

Chairman Director Managing Director (C.C.) PINAKI & COMPANYChartered Accountants


ents

Southeast Bank Capital Services Ltd.Statement of Profit or Loss and Other Comprehensive IncomeFor the year ended December 31, 2016

PARTICULARS Note 2016 Taka

2015 Taka

Income:Interest on Portfolio Loan 76,502,732 125,781,000 Interest on Fixed Deposit - - Portfolio Management Fee 15,192,687 16,095,484 Documentation Charge 22,087 78,887 Settlement Fee 14,385,736 11,484,801 Commission on Underwriting 442,368 120,001 Income on Investment Shares 30,470,312 (4,589,920)Commission on Issue Management - 34,996 Dividend Income 34,720,326 37,952,581 Other Income 20 3,785,285 3,358,080 Interest on SND Acc. 22,214,126 80,092 IPO Application Commission - 9,862

Total Income 197,735,660 190,405,863

Expenses:Salary & Allowances 21 8,625,400 9,836,715 Financial Expenses 22 97,880,488 255,758,304 Printing & Stationery 202,117 209,108 Local Conveyances 15,550 12,480 Entertainment 247,863 225,393 House Service & Utilities 154,000 244,800 House Maintenance 614,000 720,000 Telephone & Postage 128,918 142,425 Office Rents and Other Rates & Taxes 16,831,652 8,242,562 Miscellaneous Expenses 42,854 77,177 CDBL Expenses 2,068,918 1,644,216 Car Maintenance 361,490 895,480 Misc. Contractual Services 778,165 738,599 Bank Charges 29,570 28,209 Director Remuneration 215,000 40,000 Other Professional Service Charge 132,250 115,000 Audit Fees 40,000 40,000 Corporate Expenses (Subscription) 887,875 105,000 Repair , Maintenance & Utilities 1,255,742 1,088,745 Trainning & Seminar 37,000 90,000 Interest Waiver on Margin Loan - - Electricity & Lighting 4,850 2,340 Depreciation 27,190,185 14,093,586

Total Expenses 157,743,888 294,350,140

Net Profit Before Provision 39,991,772 (103,944,277)Add/(Less): Provision for Diminution in Value of Investments 23 38,821,526 4,673,592 Profit/(Loss) Before Tax 78,813,298 (99,270,685)Less: Provision for Corporate Income Tax 19,740,876 (7,590,516)Retained Earnings Carried Forward 59,072,422 (106,861,201)

Chairman Director Managing Director (C.C.) PINAKI & COMPANYChartered Accountants


(Amount in Taka)

Particulars Share Capital General Reserve

Retained Earnings Total

Balance as on 01.01.2016 1,500,000,000 - (95,581,382) 1,404,418,618 Add: during the year 4,000,000,000 - - 4,000,000,000 Retained earnings during the year - - 59,072,422 59,072,422 Balance as on 31.12.2016 5,500,000,000 - (36,508,960) 5,463,491,040

(Amount in Taka)

Particulars Share Capital General Reserve

Retained Earnings Total

Balance as on 01.01.2015 1,000,000,000 - 11,279,819 1,011,279,819 Add: during the year 500,000,000 - - 500,000,000 Retained earnings during the year - - (106,861,201) (106,861,201)Balance as on 31.12.2015 1,500,000,000 - (95,581,382) 1,404,418,618

Southeast Bank Capital Services Ltd.Statement of Changes in Shareholders EquityFor the year ended December 31, 2016

Statement of Changes in Shareholders EquityFor the year ended December 31, 2015


ents

Southeast Bank Capital Services Ltd.Statement of Cash FlowsFor the year ended December 31, 2016

2016 Taka

2015 (Restated) Taka

Cash flow from operating activities

Cash receipt from Customer 58,243,745 110,173,485 Cash Received from Others 64,298,475 26,592,192 Cash paid to Employee and Suppliers (23,045,110) (20,885,763)Advances, Deposits and Prepayments 182,332,995 7,817,520 Income Tax Paid (9,883,009) (8,830,870)Margin Loan (137,139,419) (8,717,985)Margin Deposit 4,310,588 (3,366,142)Advance Received for Rent (5,996,140) (5,984,640)Collection in Transit 39,715,007 749,823

Net cash provided by operating activities 172,837,132 97,547,620

Cash flow from investing activities Investment in Quoted Shares (508,568,787) (105,585,806)Disposal of Investment in Quoted Shares 172,795,463 17,536,549 Acquisition of Fixed Asset (Land) (228,571,220) - Interest on SND 22,214,126 80,092 Income from Dividend 34,720,326 37,952,581

Net cash used in investing activities (507,410,091) (50,016,584)

Cash flow from financing activities Net Increase/(Decrease) in Overdraft (2,863,892,516) (376,627,124)Net Increase/(Decrease) ICB Loan- Pronodona Scheme (29,451,609) (27,477,129)Interest Paid on Overdraft (210,342,810) (138,016,287)Interest on ICB Loan - Pronodona Scheme (1,837,830) (3,812,312)Increase share capital 4,000,000,000 500,000,000

Net cash used in financing activities 894,475,234 (45,932,852)

Increase/(decrease) in cash and cash equivalents 559,902,275 1,598,184

Cash and cash equivalents at the opening 21,374,639 19,776,455

Cash and cash equivalents at the closing 581,276,914 21,374,639


Southeast Bank Capital Services Ltd.Notes to the Financial StatementsAs at December 31, 2016

1.0 Legal Status and Nature of the Company

Southeast Bank Capital Services Limited (hereinafter referred to as “the Company”) was incorporated in Bangladesh as a public limited company on 23.09.2010 under the Companies Act 1994 and granted registration number C-87139/10.

1.1 Address of the Registered Office

The company operates its activities from Eunoos Trade Center, 52/53 Dilkusha C/A, Dhaka-1000.

1.2 Nature of Business Activities:

The main object of Southeast Bank Capital Services Limited is to carry on the business of merchant banking under the Bangladesh Securities and Exchange Commission (Merchant Banking and Portfolio Management) Rules 1996.

2.0 Significant Accounting Policies

2.1 Statement of Compliance

The financial statements of Southeast Bank Capital Services Limited have been prepared in accordance with the Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), Companies Act 1994 and other applicable laws and regulations.

2.2 Measurement Bases Used in Preparing the Financial Statements

The elements of financial statements have been measured on “Historical Cost” basis, which is one of the most commonly adopted base provided in “the framework for the preparation and presentation of financial statements” issued by the International Accounting Standard Board (IASB).

2.3 Going Concern

Financial Statements have been prepared on going concern basis as there was no significant doubt or uncertainty to continue the operation of the company in the foreseeable future.

2.4 Components of Financial Statements:

According to International Accounting Standard (IAS) – 1, as adopted by ICAB as BAS – 1 “presentation of financial statements “the complete set of financial statements includes the following components:

i) Statement of Financial Position

ii) Statement of Profit or Loss and Other Comprehensive Income

iii) Statement of Changes in Shareholders Equity

iv) Statement of Cash Flows and

v) Notes to the Financial Statements.

3.0 Principal Accounting Policies:

3.1 Cash Flow Statement

Cash Flow Statement is prepared in accordance with BAS 7 “Cash Flow Statement”. The cash flow from the operating activities have been presented under Direct Method as prescribed by the Securities and Exchange Rules 1987 and considering the provisions of Paragraph 18(b) of BAS-7 which provides that “Enterprises are encouraged to report Cash Flow from Operating Activities using the Direct Method”.

3.2 Reporting Currency and Level of Precision:

The figures in the financial statements represent Bangladesh Currency (Taka), which have been rounded-off to the nearest Taka.

3.3 The board at its meeting dated 26-12-2016 identified certain parties quite unable to accommodate interest on its portfolio loan which were considered totally unrealizable and as such kept the same out of interest during the year.

3.4 Others:

a) There is no claim against the company, which has not been acknowledged as debt in the Statement of Financial Position.

b) There was no contingent liability as on 31-12-2016.

c) Figures of the previous year have been rearranged, wherever considered necessary to conform to current year’s presentation.

d) The Statement of Cash flows for the year ended 31st December 2015 has been restated for fair presentation.


ents

No. Particulars Note 2016 Taka

2015 Taka

04. Property, Plant and Equipment

Details of Property, Plant and Equipment and Depreciation as on December 31, 2016 are shown in the annexed Schedule - A. This is arrived at as follows:

Written Down Value (a-b) 327,715,305 126,334,270 Opening Balance - At Cost 176,908,853 176,908,853 Add: Addition during the year ( At Cost) 228,571,220 -

405,480,073 176,908,853 Less : Adjustment during the year - -

Closing Balance (a) 405,480,073 176,908,853

Accumulated Depreciation

Opening Balance 50,574,583 36,480,997 Add: Charged during the year 27,190,185 14,093,586


Closing Balance (b) 77,764,768 50,574,583

05 Margin Loan 2,500,642,443 2,363,503,024 As per Last Account 2,363,503,024 2,354,785,039 Add: During the year 1,836,503,044 1,438,263,990

4,200,006,068 3,793,049,029 Less: Received during the year 1,699,363,625 1,429,546,006

06 Accounts Receivable 35,890,284 17,631,297 BLI Securities Ltd. 06.1 35,328,355 3,748,872 AD Holdings Ltd. 06.2 399,584 409,183 Int. Leasing Securities Ltd. 06.3 121,654 2,260,237 National Securities & Consultants Ltd. 06.4 2,788 457,544 IIDFC 06.5 37,903 10,755,461

06.1 BLI Securities Ltd. 35,328,355 3,748,872 As per Last Account 3,748,872 479,335 Add/Less: Net balancing figure during the year 31,579,483 3,269,537

06.2 AD Holdings Ltd. 399,584 409,183 As per Last Account 409,183 345,726 Add/Less: Net balancing figure during the year (9,599) 63,457

06.3 Int. Leasing Securities Ltd. 121,654 2,260,237 As per Last Account 2,260,237 1,150,761 Add/Less: Net balancing figure during the year (2,138,583) 1,109,476

06.4 National Securities & Consultants Ltd. 2,788 457,544 As per Last Account 457,544 47,961 Add/Less: Net balancing figure during the year (454,756) 409,583

06.5 IIDFC 37,903 10,755,461 As per Last Account 10,755,461 - Add/Less: Net balancing figure during the year (10,717,558) 10,755,461




2015 Taka

07 Advances, Deposits and Prepayments 79,461,626 251,911,612 Lease Rental (Eunoos Center) 07.1 14,802,960 22,204,440 Corporate Income Tax 07.2 51,291,888 41,408,879 Interior Decoration and Air Conditioning-(As per Last Account) 13,078,428 13,078,428 Security Deposits-(As per Last Account) 238,915 238,915 Office Space Purchase-(As per Last Account) - 174,780,200 Advance for Misc. Expenses 20,835 200,750 Advance for Salary 28,600 -

07.1 Lease Rental (Eunoos Center) 14,802,960 22,204,440 As per Last Account 22,204,440 30,222,710 Less : Adjustment during the year 7,401,480 8,018,270

07.2 Corporate Income Tax 51,291,888 41,408,879 As per Last Account 41,408,879 32,578,009 Add: Addition during the year 9,883,009 8,830,870


08 Investment in Quoted Shares 08.01 2,276,624,953 1,940,851,629 As per Last Account 1,940,851,629 1,852,802,372 Add: Net investment during the year 335,773,324 88,049,257

08.01 The total amount is invested as under:Exim Bank Ltd. 97,872,791 97,872,791 Bay Leasing & Investment Ltd. 382,935,045 255,014,682 VIPB( Non Listed) 3,500,000 - National Life Insurance Co. Ltd. 1,501,719,117 1,384,784,845 Asia Insurance Co. Ltd. 39,043,100 39,043,100 Delta Life Insurance Co. Ltd. 75,668,264 63,233,226 Rupali Life Insurance Co. Ltd. 9,203,333 1,673,266 Greemen One : Sceem Two 352,526 - Appolo Ispat 5,358,122 - Titas Gas 15,838,465 - Generation Next Fashion Ltd 667,731 - Beximco pharma 221,962 - ACI Ltd. 38,231,777 - BATA Shoes 1,434,152 - Fortune Shoes Ltd.(IPO) 102,470 - FU-Wang Ceramic 1,656,378 - Unique Hotels & Resorts Ltd. 28,506,765 19,391,600 Bangladesh Shipping Corporation - 4,533,015 Prime Bank Ltd. 74,312,955 74,312,955 Orion Pharma Ltd - 992,148

2,276,624,953 1,940,851,629

09 Cash and Cash Equivalents 581,276,914 21,374,639 Cash in hand - - Cash at bank 09.1 581,276,914 21,374,639



ents


2015 Taka

09.1 Cash at Bank 581,276,914 21,374,639 Southeast Bank Ltd -CD A/C- 1100007409 5,398,400 47,300,701 Southeast Bank Ltd -SND-13100000785(Public Issue) 512,098,296 6,038,517 Southeast Bank Ltd -Al- Wadiah A/C- 11100006778 63,780,218 (31,964,579)

10 Share Capital 5,500,000,000 1,500,000,000 Authorised Capital

600,000,000 shares of TK. 10/- each 6,000,000,000 3,000,000,000

Issued and Subscribed Capital550,000,000 shares of TK. 10/- each

Paid up Capital550,000,000 shares of TK. 10/- each 5,500,000,000 1,500,000,000

11 Retained Earnings (36,508,959) (95,581,382)As per Last Account (95,581,382) 11,279,819 Add: Profit/Loss during the year 59,072,422 (106,861,201)

12 Margin Deposit 21,003,651 16,693,063 As per Last Account 16,693,063 20,059,205 Add:During the year 230,147,989 255,653,970

246,841,052 275,713,175 Less: Paid during the year 225,837,401 259,020,112

13 Advance Received for Rent 13,095,140 19,091,280 As per Last Account 19,091,280 25,075,920 Add:Received During the year - -

19,091,280 25,075,920 Less : Adjustment during the year 5,996,140 5,984,640

14 Collection in Transit 67,035,027 27,320,020 As per Last Account 27,320,020 26,570,197 Add: Received During The Year 2,715,903,852 1,934,805,184

2,743,223,872 1,961,375,381 Less: Paid during the year 2,676,188,845 1,934,055,361

15 Loan From ICB 7,687,819 37,139,427 As per Last Account 37,139,427 64,616,556 Add: Received during the year - 7,822,360

37,139,427 72,438,916 Less: Paid during the year 29,451,609 35,299,489

16 Provision for Corporate Income Tax 61,831,939 42,091,063 As per Last Account 42,091,063 34,500,547 Add: Addition during the year (Tax on Dividend Income U/S 54) 19,740,876 7,590,516


17 Provision for Diminution in Value of Investments Schedule-B 114,303,939 153,125,465 Opening Balance 153,125,465 157,799,057 Add:/(Less): During the year (38,821,526) (4,673,592)




2015 Taka

18 Accrued Expenses 486,276 114,684,052 Interest on ICB Loan 44,846 216,646 Interest on Overdraft - 114,128,352 Excise Duty & Bank Charge 40,375 31,500 CDBL Bill 271,813 265,254 Audit Fee 40,000 40,000 News paper Bill 644 - Other Expenses 88,598 - Closing Allowance - 2,300

19 Other Liabilities 52,666,021 43,140,292 Accounts Payable (Others) 41,603,981 37,176,292 IPO Application Fund 10,702,600 5,964,000 Provident Fund 359,440 -

20 Other Income 3,785,285 3,358,080 Rental Income 3,587,040 3,358,080 Miscellaneous Income 198,245 -

21 Salary & Allowances 8,625,400 9,836,715 Salary & Allowances 6,544,600 6,985,411 Festival Bonus 661,100 625,400 Incentive Bonus - 453,000 Leave Fare Concession 1,046,600 1,123,471 Provident Fund Contribution 373,100 389,433 Leave Encashment - 104,000 Gratuity - 156,000

22 Financial Expenses 97,880,488 255,758,304 Interest on Bank Overdraft 96,214,458 252,144,639 Interest on ICB Loan 1,666,030 3,613,665

23 Provision for Diminution in Value of Investments 38,821,526 4,673,592 Opening Balance 153,125,465 157,799,057 Less: Required on December 31, 2016 114,303,939 153,125,465



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Southeast Bank Capital Services Ltd.Schedule to the Financial StatementsAs at December 31, 2016

Diminution in Value of Investments Schedule-B

Particulars Cost Price Market Price Net Difference (Provision Required)

Exim Bank Ltd. 97,872,791 59,492,640 (38,380,151) Bay Leasing & Investment Ltd. 382,935,046 318,854,883 (64,080,163)

VIPB( Non Listed) 3,500,000 - -

National Life Insurance Co. Ltd. 1,501,719,117 1,575,602,207 73,883,090

Asia Insurance Co. Ltd. 39,043,100 23,725,191 (15,317,909)

Delta Life Insurance Co. Ltd. 75,668,265 51,424,708 (24,243,557)

Rupali Life Insurance Co. Ltd. 9,203,333 8,349,626 (853,707)

Greemen One : Sceem Two 352,526 388,326 35,800

Appolo Ispat 5,358,121 7,407,421 2,049,300

Titas Gas 15,838,465 15,493,322 (345,143)

Generation Next Fashion Ltd 667,731 825,680 157,949

Beximco pharma 221,962 215,090 (6,872)

ACI Ltd. 38,231,778 29,538,938 (8,692,840)

BATA Shose 1,434,152 1,347,560 (86,592)

Fortune Shoes Ltd.(IPO) 102,470 520,548 418,078

FU-Wang Ceramic 1,656,379 1,934,471 278,092

Unique Hotels & Resorts Ltd. 28,506,766 24,487,632 (4,019,134)

Prime Bank Ltd. 74,312,955 39,212,775 (35,100,180)

Orion Pharma Ltd - -

2,276,624,957 2,158,821,018 (114,303,939)


ents

Appendix-B

Financial Statementsof

Southeast Financial Services (UK) Ltd



ents



ents

SOUTHEAST FINANCIAL SERVICES (UK) LTDDIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2016

The directors present their report and accounts for the year ended 31 December 2016

PRINCIPAL ACTIVITIES

The principal activity of the company in the year under review was MONEY REMITTANCE

DIRECTORS

The directors who served during the year and their interests in the share capital of the company were as follows:

2016 2015No. No.

ALAMGIR KABIR, FCA 0 0SHAHID HOSSAIN 0 0MUHAMMAD NAZMUL HUDA AZAD 0 0

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 they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice)

The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss for that period.

The report of the directors has been prepared in accordance with the special provisions within Part 15 of the Companies Act 2006.

This report was approved by the board on 13 January 2017

MUHAMMAD NAZMUL HUDA AZADDirector


SOUTHEAST FINANCIAL SERVICES (UK) LTDACCOUNTANTS’ REPORT TO THE BOARD OF DIRECTORS ON THE FINANCIAL STATEMENTS OF SOUTHEAST FINANCIAL SERVICES (UK) LTDFOR THE YEAR ENDED 31 DECEMBER 2016

In order to assist you to fulfill your duties under the Companies Act 2006, we have prepared for your approval the accounts of SOUTHEAST FINANCIAL SERVICES (UK) LTD for the year ended 31 December 2016 as set out on pages 5 to 9 from the company's accounting records and from information and explanations you have given us.

As a practising member of the Chartered Institute of Management Accountants (CIMA), we are subject to its ethical and other professional requirements which are detailed on their website.

This report is made solely to the Board of Directors of SOUTHEAST FINANCIAL SERVICES (UK) LTD, as a body, in accordance with the terms of our engagement letter dated 28 December 2011. Our work has been undertaken solely to prepare for your approval the accounts of SOUTHEAST FINANCIAL SERVICES (UK) LTD and state those matters that we have agreed to state to the Board of Directors of SOUTHEAST FINANCIAL SERVICES (UK) LTD, as a body, in this report, in accordance with the requirements of the Chartered Institute of Management Accountants (CIMA) as detailed on their website. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than SOUTHEAST FINANCIAL SERVICES (UK) LTD and its Board of Directors as a body for our work or for this report.

It is your duty to ensure that SOUTHEAST FINANCIAL SERVICES (UK) LTD has kept adequate accounting records and to prepare statutory accounts that give a true and fair view of the assets, liabilities, financial position and profitability of SOUTHEAST FINANCIAL SERVICES (UK) LTD. You consider that SOUTHEAST FINANCIAL SERVICES (UK) LTD is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the accounts of SOUTHEAST FINANCIAL SERVICES (UK) LTD. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory accounts.

Jahan & Co Chartered Management Accountants 22 Osborn Street LondonE1 6TD 13 January 2017


ents

Note 2016 £

2015 £

TURNOVER 2 176,454 180,698

GROSS PROFIT 176,454 180,698 Distribution costs (2,963) (702)

Administrative expenses (164,503) (146,245)

OPERATING PROFIT 3 8,988 33,751 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 8,988 33,751

PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 8,988 33,751 PROFIT FOR THE FINANCIAL YEAR 8,988 33,751

SOUTHEAST FINANCIAL SERVICES (UK) LTDPROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2016


SOUTHEAST FINANCIAL SERVICES (UK) LTDBALANCE SHEETAT 31 DECEMBER 2016

Notes 2016 2015£ £

FIXED ASSETSTangible assets 5 21,972 29,199

Current AssetDebtors (amounts falling due within one year) 6 258,055 207,683Cash at bank and in hand 26,182 29,862

284,237 237,545CREDITORS: Amounts falling due within one year 7 193,925 163,448NET CURRENT ASSETS 90,312 74,097TOTAL ASSETS LESS CURRENT LIABILITIES 112,284 103,296

CAPITAL AND RESERVES

Called up share capital 8 300,000 300,000Profit and loss account 9 (187,716) (196,704)SHAREHOLDERS' FUNDS 112,284 103,296

For the year ending 31 December 2016 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies. The members have not required the company to obtain an audit in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Approved by the board on 13 January 2017 and signed ontheir behalf by

MUHAMMAD NAZMUL HUDA AZAD Director


ents

SOUTHEAST FINANCIAL SERVICES (UK) LTDNOTES TO THE ACCOUNTSFOR THE YEAR ENDED 31 DECEMBER 2016

1. ACCOUNTING POLICIES

1a. Basis Of Accounting The accounts have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).

1b. Cash Flow Statement

The Company is exempt from including a statement of cash flows in its accounts in accordance with Financial Reporting Standard for Smaller Entities (effective January 2015).

1c. Depreciation

Depreciation has been provided at the following rates in order to write off the assets over their estimated useful lives.

Short Leasehold Properties straight line 14.28%Fixtures and Fittings reducing balance 20%Equipment reducing balance 20%

1d. Turnover

Turnover represents the invoiced value of goods and services supplied by the company, net of value added tax and trade discounts.

2. TURNOVER

The turnover and pre-tax result is attributable to MONEY REMITTANCE.

2016 2015£ £

Remittance Commissions 86,752 93,049 Exchange Gain 80,646 75,016 Fees Income 9,056 12,633

176,454 180,698

3. OPERATING PROFIT

Operating Profit is stated after charging:Depreciation 8,418 9,175

8,418 9,175

4. TAX ON ORDINARY ACTIVITIES

5. TANGIBLE FIXED ASSETSShort

LeaseholdProperties

Fixturesand

Fittings

Equipment Total

£ £ £ £CostAt 1 January 2016 30,000 47,262 8,635 85,897 Additions - 311 880 1,191 At 31 December 2016 30,000 47,573 9,515 87,088 DepreciationAt 1 January 2016 20,700 30,368 5,630 56,698 For the year 4,200 3,441 777 8,418 At 31 December 2016 24,900 33,809 6,407 65,116 Net Book AmountsAt 31 December 2016 5,100 13,764 3,108 21,972 At 31 December 2015 9,300 16,894 3,005 29,199


2016 2015£ £

6. DEBTORS

Amounts falling due within one year:Trade debtors 244,526 193,104 Other debtors 13,529 14,579

258,055 207,683

Trade debtors represent money in transit from merchant service providers. Other Debtors balance includes Prepayments of £2529, Rent Deposit of £9000 and Amount Receivable from Parent of £2000

7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Taxation and social security 3,118 2,991 Other creditors 190,807 160,457

193,925 163,448

Other creditors balance includes TT Payable balance of £186,046, Accrued Expenses of £2676 and Suspense Account balance of £2085. TT Payable balance is not reconciled with the Parent Company balance

8. SHARE CAPITAL

Allotted, issued and fully paid:300000 Ordinary shares of £ 1 each 300,000 300,000

300,000 300,000

9. PROFIT AND LOSS RESERVE

Opening balance (196,704) (230,455)Profit for the year 8,988 33,751

(187,716) (196,704)

SOUTHEAST FINANCIAL SERVICES (UK) LTDNOTES TO THE ACCOUNTSFOR THE YEAR ENDED 31 DECEMBER 2016


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SOUTHEAST FINANCIAL SERVICES (UK) LTDTRADING AND PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2016

2016 2015£ £

Turnover 176,454 180,698 Cost of Sales:Gross Profit 176,454 180,698

176,454 180,698 Less:Distribution costs 2,963 702 Administrative expenses 164,503 146,245

167,466 146,947 Net profit for the year before taxation 8,988 33,751 Net profit for the year after taxation 8,988 33,751 Retained losses brought forward (196,704) (230,455)Retained losses carried forward (187,716) (196,704)

This page does not form part of the Company's Statutory Accounts and is prepared for the information of the Directors only.


SOUTHEAST FINANCIAL SERVICES (UK) LTDPROFIT AND LOSS ACCOUNT SUMMARIESFOR THE YEAR ENDED 31 DECEMBER 2016

2016 2015

£ £Distribution Costs:Advertising and sales promotion 2,839 531 Travel and Subsistence 124 171

2,963 702

Administrative Expenses:Rent, Rates & Insurance 33,645 31,987 Business Insurance 904 882 Heat, light & water 1,558 1,927 Waste Disposal - 192 Cleaning 972 589 Wages - regular 72,020 64,585 Staff Bonus - 1,000 Staff welfare 1,027 407 Training - 253 Repairs & maintenance 955 1,358 Computer and IT costs 420 350 Accountancy fees 3,800 3,800 Legal and Professional expenses 150 1,339 Stationery & office supplies 2,918 2,379 Telephone 1,734 2,612 Fees & Subscriptions 989 933 Customer Due Diligence 432 432 Security costs 908 651 Bank charges 33,653 21,394

Depreciation and Amortisation:Depreciation of short leasehold properties 4,200 4,200 Depreciation of fixtures and fittings 3,441 4,224 Depreciation of equipment 777 751

164,503 146,245

This page does not form part of the Company's Statutory Accounts and is prepared for the information of the Directors only.


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SOUTHEAST FINANCIAL SERVICES (UK) LTD455/8986421677CORPORATION TAX COMPUTATIONFOR THE PERIOD 01/01/2016 - 31/12/2016

£

Profit as per Accounts 01/01/2016 - 31/12/2016 8,988 Add:Depreciation & Asset Disposal 8,418

8,418 Less:General Pool Allowances 7,005

(7,005)

Trading Profit 10,401

Losses brought forward and used against profits (10,401)

Capital Allowances General Pool

01/01/2016 - 31/12/2016pool b/f 38,916 additionsdisposals

38,916 wda (18%) 7,005 7,005 wdv 31,911

Corporation tax chargeableTrading and professional profits 10,401.00 Losses brought forward 10,401.00 Net trading and professional profits .00Bank building society or other interest and profits .00Income from UK land and buildings .00Annual profits and gains not falling under any heading .00Profit before charges and reliefs .00Profits chargeable to corporation tax .00TotalsTax

Tax payable .00

Tax reconciliation

MEMO: Summary of trading lossesLosses brought forward 186,579 Losses brought forward used against profits 10,401 Losses carried forward 176,178



Southeast Financial Services (Australia) Pty Ltd

Appendix-C


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Prepared by: SolTax Pty Ltd

Level 2, 356 Chapel Road Bankstown NSW 2200

Southeast Financial Services (Australia) Pty LtdABN 40 160 673 165

FINANCIAL REPORTFor the year ended 31 December 2016



FINANCIAL REPORT

Contents

Page

Trading Statement 2

Balance Sheet 3

Notes to Financial Statement 4

Director’s Declaration 5

Compilation Report 6


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Southeast Financial Services (Australia) Pty LtdABN 40 160 673 165TRADING, PROFIT AND LOSS STATEMENTFor the year ended 31 December 2016

December 2016 December 2015

$ $

INCOMECommission Collected 438.76 4,794.24 Exchange gain 4,416.15 7,480.00 Interest Earned 0.09 409.31 Other Income 17,063.80 90.00

21,918.80 12,773.55

EXPENDITUREAdvertising - 110.00 Bank charges 179.02 388.33 Depreciation - SB general pool 2,614.13 8,546.99 Electricity - 822.95 Entertainment - - Insurance 149.36 1,136.93 Legal Services - 834.19 Motor vehicle expenses: - - Other vehicle expenses 35.2 725.90 Parking - - Office supplies - 89.57 Postage - 47.00 Printing and Stationery - 89.57 Rental expenses 6,319.08 48,488.00 Repair and maintenance - 187.00 Security - 416.46 Superannuation 415.00 4,519.98 Telephone, mobile and fax 372.25 1,728.44 Wages 5,300.00 30,482.75 Total 15,384.04 98,614.06

PROFIT/LOSS BEFORE INCOME TAX 6,534.76 (85,840.51)


Southeast Financial Services (Australia) Pty LtdABN 40 160 673 165BALANCE SHEETAs on 31 December 2016

December 2016 December 2015

$ $

ASSETSCurrent AssetsCash on Hand 763.45 32.20 Westpac Cheque Account - 321645 19.15 2,323.87 St George Freedom Account- 10775735 2,839.08 30,006.73 St George Saver Account 158.11 - SEBL Account 883.68 383.68 Westpac Cash Reserve - 321653 117.44 6,902.37 Receivables 13,860.87 12,467.99 Office Bond Deposit 19,119.04 19,119.04

37,760.82 71,235.88 Non-current AssetsSB general pool 42,652.06 42,652.06 Less accumulated depreciation (28,109.69) (25,607.81)

14,542.37 17,044.25 TOTAL ASSETS 52,303.19 88,280.13

LIABILITIESCurrent LiabilitiesRemittance Payable - - PAYG Withhold Payable 11,696.35 10,958.85 SEBL Account 29,526.62 62,293.46 Rent Payable 12,016.29 15,809.07 Superannuation payable 4,624.99 4,209.99 Provision for GST (24,734.28) (17,629.70)

33,129.97 75,641.67

EQUITYShare Capital 312,082.90 312,082.90

Retained EarningsAccumulated Losses beginning of the year (299,444.44) (213,603.93)Prior Year Adjustments - - Gain/Losses for the Period 6,534.76 (85,840.51)TOTAL EQUITY (292,909.68) (299,444.44)Total Liability & Equity 52,303.19 88,280.13


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Southeast Financial Services (Australia) Pty LtdABN 40 160 673 165NOTES TO THE FINANCIAL STATEMENTSFor the period ended 31 December 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNT POLICYa. This financial report is a special purpose financial report prepared for use by directors and members of the company.

The directors have determined that the company is not a reporting entity.

The financial report is prepared in accordance with the requirements of the following Australian Accounting Standards:

AASB 1031: Materiality

AASB 110: Events after the Balance Sheet Date

The financial report is prepared on an accruals basis and is based on historic costs and does not take into account changing money values or, except where specifically stated, current valuations of non-current assets.

The following specific accounting policies, which are consistent with the previous period unless otherwise stated, have been adopted in the preparation of this report:

b. Property Plant and equipment

Property, Plant and equipment are carried at cost, independent or directors’ valuation. All assets, excluding freehold land and buildings are depreciated over their useful lives to the company.

c. Inventories

Inventories are measured at the lower of its cost and net realizable value. Costs are assigned on a first-in first-out basis and include direct materials, direct labour, and appropriate proportion of variable and fixed overhead expenses.


The directors have determined that the company is not a reporting entity. The directors have determined that this special purpose financial report should be prepared in accordance with the accounting policies outlines in Note 1 to the financial statements.

The directors of the company declared that:1. The financial statements and the notes attached present fairly the company’s financial position as at 31/12/2016

and its performance for the period ended on that date in accordance with the accounting policies described in Note 1 to the financial statements;

2. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with the resolution of the Board of Directors:


Dated: 16/01/2017

Manager & Director:

DIRECTORS’ DECLARATIONS

Khandoker Ziaul Karim


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COMPILATION REPORT

Scope

On the basis of information provided by the directors of Southeast Financial Services (Australia) Pty Ltd, we have compiled in accordance with APES 315: Compilation of Financial Information the special purpose financial report of Southeast Financial Services (Australia) Pty Ltd for the period ended 31/12/2016.

The specific purpose for which the special purpose financial report has been prepared is set out in Note 1. The extent to which Accounting Standards and other mandatory professional reporting requirements have or have not been adopted in the preparation of the special purpose financial report is set out in Note 1.

The directors are solely responsible for the information contained in the special purpose financial report and have determined that the accounting policies used are consistent with the financial reporting requirements of Southeast Financial Services (Australia) Pty Ltd constitution and are appropriate to meet the needs of the directors and members of the company.

Our procedures use accounting expertise to collect, classify and summarize the financial information, which the directors provided into a financial report. Our procedures do not include verification or validation procedures. No audit or review has been performed and accordingly no assurance is expressed.

To the extent permitted by law, we do not accept liability for any loss or damage which any person, other than the company, may suffer arising from any negligence on our part. No person should rely on the special purpose financial report without having an audit or review conducted.

The special purpose financial report was prepared for the benefit of the directors and members of Southeast Financial Services (Australia) Pty Ltd and the purpose identified above. We do not accept responsibility to any other person for the contents of the special purpose financial report.

Name of the Firm

SolTax Pty LtdLevel 2, 356 Chapel RoadBankstown NSW 2200

Date: 16/01/2017

Hasan Shahiad

SolTax Pty Ltd

Name of the Partner



Southeast Exchange Company (South Africa) Pty Ltd

Appendix-D


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SOUTHEAST EXCHANGE COMPANY (SOUTH AFRICA) (PTY) LTD(REGISTRATION NUMBER 2011/008619/07)

ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2016


Southeast Exchange Company (South Africa) (Pty) LtdAnnual Financial Statements for the year ended 31 December 2016

General InformationCountry of incorporation and domicile South Africa

Nature of business and principal activities Facilitator of funds remittance Directors Alamgir Kabir

Shahid Hossain

Registered office 9 Dolly Rathebe RoadCorner Mint RoadFordsburgJohannesburg2092

Business address 9 Dolly Rathebe RoadCorner Mint RoadFordsburgJohannesburg2092

Holding company Southeast Bank Limitedincorporated in Bangladesh

Bankers Standard Bank of South AfricaFirst National Bank

Auditors GL Palmer and Company Registered Auditors

Secretaries KPMG Inc

Tax reference number 9084402180

Level of Assurance These annual financial statements have been audited in compliance with the applicable requirements of the South African Reserve Bank

Preparer The annual financial statements were independently compiled by: MM Zackey CA(SA)

Issued 03 February 2017


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Index

The reports and statements set out below comprise the annual financial statements presented to the shareholder:

Contents page

Independent Auditors' Report 3 - 5

Directors' Responsibilities and Approval 6

Directors' Report 7 -9

Statement of Financial Position 10

Statement of Comprehensive Income 11

Statement of Changes in Equity 12

Statement of Cash Flows 13

Accounting Policies 14 -16

Notes to the Annual Financial Statement 17 -20

The following supplementary information does not form part of the annual financial statements and is unaudited:

Detailed Income Statement 21 - 22


Independent Auditors’ ReportTo the shareholder of Southeast Exchange Company (South Africa) (Pty) Ltd

Opinion We have audited the annual financial statements of Southeast Exchange Company (South Africa) (Pty) Ltd. Set out on pages 10 to 20, which comprise the Statement of Financial Position as at 31 December 2016, and the Statement of Comprehensive Income, Statement of Changes in Equity and statement of Cash Flows for the year then ended, and notes to the Annual Financial Statements, including significant accounting policies.

In our opinion, the annual financial statements present fairly, in all material respects, the financial position of Southeast Exchange Company (South Africa) (Pty) Ltd As at 31 December 2016, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008.

Basis for opinion We conducted our audit in accordance with the International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the annual financial statements section of our report. We are independent of the company in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual financial statements of the current period. These matters were addressed in the context of our audit of the annual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

Other informationThe directors are responsible for the other information. The other information comprises the Directors’ Report as required by the Companies Act 71 of 2008, which we obtained prior to the date of this report. Other information does not include, the annual financial statements and our auditors’ report thereon.

Our opinion on the annual financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the annual financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the annual financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Annual Financial StatementsThe directors are responsible for the preparation and fair presentation of the annual financial statements in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and the requirements of the Companies Act 71 of 2008, and for such internal control as the directors determine is necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error.


ents

In preparing the annual financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditors’ responsibilities for the audit of the Annual Financial StatementsOur objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements.

As part of an audit in accordance with the International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the annual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the annual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the annual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

GL PALMER AND COMPANY Registered Auditors Philippos Philippou (CA) SA Partner Johannesburg 03 February 2017



Directors’ Responsibilities and Approval

The directors are required by the Companies Act 71 of 2008, to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with the International Financial Reporting Standard for Small and Medium-sized Entities. The external auditor is engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimize it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The directors have reviewed the company’s cash flow forecast for the year to 31 December 2017 and, in the light of this review and the current financial position, they are satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the company's annual financial statements. The annual financial statements have been examined by the company's external auditors and their report is presented on pages 3 to 5.

The annual financial statements set out on pages 7 to 22, which have been prepared on the going concern basis, were approved and signed by the directors on 03 February 2017:

Alamgir Kabir M. Kamal Hossain

Johannesburg


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Directors’ Report

The directors have pleasure in submitting their report on the annual financial statements of Southeast Exchange Company (South Africa) (Pty) Ltd for the year ended 31 December-2016.

1. Nature of business

Southeast Exchange Company (South Africa) (Pty) Ltd was incorporated and operates in South Africa with interests in the facilitator of funds remittance industry.

There have been no material changes to the nature of the company's business from the prior year.

2. Review of financial results and activities

The annual financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium size Entities and the requirements of the Companies Act 71 of 2008. The accounting policies have been applied consistently compared to the prior year.

Full details of the financial position, results of operations and cash flows of the company are set out in these annual financial statements.

3. Share capital 2016 2015

Authorised Number of Shares Ordinary shares 4 000 4 000

2016 2015 2016 2015Issued R R Number of Shares Ordinary shares 120 120 120 120

There have been no changes to the authorised or issued share capital during the year under review.

4. Control over unissued shares

The unissued ordinary shares are the subject of a general authority granted to the directors in terms of section 38 of the Companies Act 71 of 2008.

5. Dividends

No dividends were declared or paid to the shareholder during the year under review (2015-Nil)

6. Directors

The directors in office at the date of this report are as follows :

Directors Alamgir Kabir Shahid Hossain

There have been no changes to the directorate for the year under review.

7. Directors' interests in contracts

During the financial year, no contracts were entered into which directors or officers of the company had an interest and which significantly affected the business of the company.

8. Property, plant and equipment

There was no change in the nature of the property, plant and equipment of the company or in the policy regarding their use.At 31 December 2016 the company's investment in property , plant and equipment amounted to R493 140(2015 -R573 536), of which R1 14 840(2015 - R48 194) were introduced in the current year through additions .



Directors’ Report

9. Special resolutions

No special resolutions, the nature of which might be significant to the shareholder in its' appreciation of the state of affairs of the company were made by the company during the period covered by this report .

10. Events after the reporting period

The directors are not aware of any material event which occurred after the reporting date and up to the date of this report

11. Going concern

The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on the going concern basis. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. The directors are also not aware of any material non-compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.

12. Litigation statement

The company is not currently involved in any claims or lawsuits, which individually or in the aggregate, are expected to have a material adverse effect on the business or its assets.

13. Auditors

GL Palmer and Company continued in office as auditors of the company for 2016.

At the AGM, the shareholder will be requested to reappoint GL Palmer and Company as the independent external auditors of the company and to confirm Mr. Philippos Philippou (CA) SA as the designated lead audit partner of the 2017 financial year.

14. Secretaries

The company secretaries are KPMG Inc.

Business address 85 Empire RoadParktownJohannesburg2198

15. Date of authorisation for issue of financial statements

The annual financial statements have been authorised for issue by the directors on 03 February 2017. No authority was given to anyone to amend the financial statements after the date of issue .


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Statement of financial position as at 31 December 2016

Figures in Rand Note 2016 2015

Assets

Non-current Assets Property, plant and equipment

2 493,140 573,536 3 25,017 19,622

Deferred tax 518 157 593,158

Current Assets Trade and other receivables 4 971 689 26 282 Current tax receivable 122 764 - Cash and cash equivalents 5 11 016 877 9 651 392

12 111 330 9 677 674 12 629 487 10 270 832

Total Assets

Equity and liabilities Equity Share capital 6 6 632 179 6 632 179 Retained income 2 741 705 (318 597)

9 373 884 6 313 582

Liabilities Non-Current Liabilities 7 89 347 70 077 Operating lease liability

Current Liabilities Trade and other payables 8 3 166 256 3 887 173 Total Liabilities 3 255 603 3 957 250 Total Equity and Liabilities 12 629 487 10 270 832



Statement of Comprehensive Income

Figures in Rand Note

12 months ended

31 December2016

10 monthsended

31 December2015

Revenue 9 6 935 214 1 669 486 Other income 10 45 363 800 Operating expenses (3 427 693) (1 666 378) Operating profit 3 552 884 3 908 Investment revenue 11 593 263 494 080 Finance costs 12 (4) - Profit before taxation 4 146 143 497 988 Taxation 13 (1 085 841) 6 809 Profit for the year 3 060 302 504 797 Other comprehensive income - - Total Comprehensive income for the year 3 060 302 504 797


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Statement of Changes in Equity

Figures in Rand Share

Capital and Reserves

Share premium

Total sharecapital

Retained income Total equity

Balance at 01 March 2015 6 594 179 - 6 594 179 (823 394) 5 770 785 Profit for the year - - - 504 797 504 797 Other comprehensive income - - - - - Total comprehensive income for the period - - - 504 797 504 797 Shareholder's contributions 38 000 38 000 - 38 000 Total Changes 38 000 38 000 - 38 000 Balance at 31 December 2015 6 594 179 38 000 6 632 179 (318 597) 6 313 582 Profit for the year 3 060 302 3 060 302 Other comprehensive income - - - - - Total comprehensive income for the year - - - 3 060 302 3 060 302 Shareholder's contribution 38 000 (38 000) - - - Total Changes 38 000 (38 000) - - - Balance at 31 December 2016 6 632 179 - 6 632 179 2 741 705 9 373 884 Note 6 6 6



Statement of Cash Flows

Figures in Rand Note

12 months ended

31 December2016

10 months ended

31 December2015

Cash flows from operating activities

Cash generated from operations 14 2 101 066 2 193 821 Interest income 593 263 494 080 Finance costs (4) - Tax paid 15 (1 214 000) - Net cash from operating activities 1 480 325 2 687 901

Cash flows from investing activities

Purchase of property, plant and equipment 2 (114 840) (48 194)

Cash flows from financing activities

Proceeds on share premium 6 - 38 000

Total cash movement for the year 1 365 485 2 677 707 Cash at the beginning of the year 9 651 392 6 973 685 Total cash at end of the year 5 11 016 877 9 651 392


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Accounting Policies

1. Presentation of annual financial statements The annual financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sized Entities, and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rand.

These accounting policies are consistent with those applied in the previous year.

1.1 Property, plant and equipmentProperty, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.

Cost include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.

Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over the useful life of the property, plant and equipment as follows:

Item Depreciation Average useful life

Leasehold improvements Straight line 5 years Office equipment Straight line 3 years Computer equipment Straight line 3 years

The residual value, depreciation method and useful life of each asset are reviewed only where there is an indication that there has been a significant change from the previous estimate.

1.2 Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price (including transaction costs except in the initial measurement of financial assets and liabilities that are measured at fair value through profit or loss) unless the arrangement constitutes, in effect, a financing transaction in which case it is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial instruments at amortised cost

These include loans, trade receivables and trade payables. Those debt instruments which meet the criteria in section 11.8(b) of the standard, are subsequently measured at amortised cost using the effective interest method. Debt instruments which are classified as current assets or current liabilities are measured at the undiscounted amount of the cash expected to be received or paid, unless the arrangement effectively constitutes a financing transaction.

At each reporting date, the carrying amounts of assets held in this category are reviewed to determine whether there is any objective evidence of impairment. If there is objective evidence, the recoverable amount is estimated and compared with the carrying amount. If the 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.

1.2 Financial instruments (continued)

Financial instruments at costCommitments to receive a loan are measured at cost less impairment.

Equity instruments that are not publicly traded and whose fair value cannot otherwise be measured reliably are measured at cost less impairment.



Accounting Policies

1.3 Tax

Current tax assets and liabilitiesCurrent tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date.

The tax liability reflects the effect of the possible outcomes of a review by the tax authorities.

Deferred tax assets and liabilitiesA deferred tax liability is recognised for all taxable temporary differences.

A deferred tax asset is recognised for all deductible temporary differences and for the carry forward of unused tax losses and unused tax credits.

Deferred tax assets and liabilities are measured at an amount that includes the effect of the possible outcomes of a review by the tax authorities using tax rates that, on the basis of enacted or substantively enacted tax law at the end of the reporting period, are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax asset balances are reviewed at every reporting date. When necessary, a valuation allowance is recognised against the deferred tax assets so that the net amount equals the highest amount that is more likely than not to be realised on the basis of current or future taxable profit.

Tax expensesTax expense is recognised in the same component of total comprehensive income or equity as the transaction or other event that resulted in the tax expense.

1.4 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership to the lessee. All other leases are operating leases.

Operating leases – lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term unless:

• another systematic basis is representative of the time pattern of the benefit from the leased asset, even if the payments are not on that basis, or

• the payments are structured to increase in line with expected general inflation (based on published indexes or statistics) to compensate for the lessor’s expected inflationary cost increases.

Any contingent rents are expensed in the period they are incurred.

1.5 Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

1.6 Revenue

Interest is recognised, in profit or loss, using the effective interest rate method.

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.

1.7 Foreign exchange

Foreign currency transactions

Exchange differences arising on monetary items are recognised in profit or loss in the period in which they arise.

The foreign exchange component of a non-monetary item is recognised consistently with any other gains or losses on those items, in other comprehensive income or in profit or loss.


ents


Notes to the Annual Financial Statements

Figure in Rand

12 months ended 31

December 2016

10 months ended 31

December 2015

2. Property, plant and equipment

2016 2015

Cost Accumulated depreciation

Carrying value Cost Accumulated

depreciationCarrying

valueLeasehold improvements 625 800 (260 750) 365 050 600 000 (130 000) 470 000Office equipment 20 093 (6 613) 13 480 10 493 (2 049) 8 444Computer equipment 238 365 (123 755) 114 610 158 925 (63 833) 95 092Total 884 258 (391 118) 493 140 769 418 (195 882) 573 536

Reconciliation of property, plant and equipment - 2016Opening balance Additions Depreciation Total

Leasehold improvements 470 000 25 800 (130 750) 365 050Office equipment 8 444 9 600 (4 564) 13 480Computer equipment 95 092 79 440 (59 922) 114 610

573 536 114 840 (195 236) 493 140

3. Deferred taxDeferred tax asset

Operating lease accrual 25 017 19 622

Reconciliation of deferred tax asset

At beginning of year 19 622 12 812Movement in operating lease accrual 5 395 6 810

25 017 19 622

4. Trade and other receivables Cash in transit 946 889 -Deposits 24 800 24 800Prepayments - 1 482

971 689 26 282

5. Cash and cash equivalentsCash and cash equivalents consist of:Cash on hand 733 108 -Bank balances 10 283 769 9 651 392

11 016 877 9 651 392

Included in the above bank balances figure at year end, is an amount of R 5 000 000 (2015 - R 5 000 000) which is an unimpaired capital requirement of the South African Reserve Bank.




Figure in Rand

12 months ended 31

December 2016

10 months ended 31

December 2015

6. Share capital Authorised4000 Ordinary shares of no par value

3880 unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting.

IssuedOrdinary 6 632 179 6 594 179Reserves - 38 000

6 632 179 6 632 179

Reserves consist of capital contributions made by the shareholder.

7. Operating lease accrualLease accrual 89 347 70 077

8. Trade and other payables

Trade payables 2 922 368 3 764 773Value added tax 52 402 -Accrual for audit fees 74 100 122 400Other payables 117 386 -

3 166 256 3 887 173

9. RevenueCommissions and transaction fees 4 237 061 1 861 181Exchange gain income/(loss) 2 698 153 (191 695)

6 935 214 1 669 486

10. Other incomeQuery, cancellation and amendment income - 200Sundry income 45 363 600

45 363 800

11. Investment revenueInterest revenueBank 593 263 494 080

12. Finance costsInterest paid 4 -

13. TaxationMajor components of the tax expense (income)

CurrentLocal income tax - current period 1 091 236 -

DeferredDeferred tax (5 395) (6 809)

1 085 841 (6 809)


ents

Figure in Rand

12 months ended 31

December 2016

10 months ended 31

December 2015

Reconciliation of the tax expenseReconciliation between accounting profit and tax expense.Accounting profit 4 146 143 497 988

Tax at the applicable tax rate of 28% (2015: 28%) 1 160 920 139 437

Tax effect of adjustments on taxable incomeNon-deductible expenses 94 617 78 848Temporary differences (89 222) (72 038)Assessed tax loss brought forward (75 079) (221 326)

1 091 236 (75 079)

14. Cash generated from operationsProfit before taxation 4 146 143 497 988Adjustments for:Depreciation 195 236 144 306Interest received (593 263) (494 080)Finance costs 4 -Movements in operating lease assets and accruals 19 270 24 318Changes in working capital:Trade and other receivables (945 407) 116 188Trade and other payables (720 917) 1 905 101

2 101 066 2 193 821

15. Tax paidCurrent tax for the year recognised in profit (loss) or loss (1 091 236) -Balance at end of the year (122 764) -

(1 214 000) -

16. Directors' remunerationNo emoluments were paid to the directors or any individuals holding a prescribed office during the year.

17. Auditors' remunerationFees 65 000 52 500Adjustment for previous year 40 123 -

105 123 52 500

18. Related partiesRelationshipsHolding company Southeast Bank Limited

Related party balances and transactions with entities over which the company has control, joint control or significant influence

Related party balancesAmounts included in Trade Payables regarding related partiesSoutheast Bank Limited 2 922 368 3 764 773

19. Comparative figuresThe comparative figures are for a 10 month period. Certain comparative figures have been reclassified to conform with changes in presentation in the current year.





Detailed Income Statement

Figure in Rand Note12 months ended 31

December 2016

10 months ended 31

December 2015

Revenue 4 237 061 1 861 181Commissions and transaction fees 2 698 153 (191 695)Exchange gain income/(loss) 9 6 935 214 1 669 486

Other incomeQuery, cancellation and amendment income - 200Sundry income 45 363 600Interest received 11 593 263 494 080

638 626 494 880

Expenses (Refer to next page) (3 427 693) (1 666 378)Operating profit 4 146 147 497 988Finance costs 12 (4) -Profit before taxation 4 146 143 497 988Taxation 13 (1 085 841) 6 809Profit for the year 3 060 302 504 797

The supplementary information presented does not form part of the annual financial statements and is unaudited


ents

Figure in Rand Note12 months ended 31

December 2016

10 months ended 31

December 2015Operating expensesAccounting fees 128 187 28 342Advertising 62 264 30 301Auditors remuneration 17 105 123 52 500Bank charges 403 867 134 804Cash carrying charges 638 699 -Cleaning - 19 000Computer expenses 30 531 -Depreciation 195 236 144 306Employee costs 750 469 380 000Entertainment 51 642 30 335Insurance 29 264 -Lease rentals on operating lease 337 919 281 599Municipal expenses 25 179 23 000Office expenses 8 862 -Postage 16 892 4 450Printing and stationery 81 675 51 625Profit and loss on exchange differences 180 131 -Rates and taxes - 746Repairs and maintenance 44 730 31 804Security 215 672 385 766Staff costs 1 746 -Telephone and fax 53 855 31 374Travel - local 65 750 36 426

3 427 693 1 666 378

The supplementary information presented does not form part of the annual financial statements and is unaudited


Detailed Income Statement


AD Authorized DealerALCO Asset Liability CommitteeATM Automated Teller MachineBB Bangladesh Bank (Central Bank of Bangladesh)B/L Bad/LossBAS Bangladesh Accounting StandardsCRR Cash Reserve RequirementCRG Credit Risk GradingCSR Corporate Social ResponsibilityCPI Consumer Price Index

CDBL Central Depository Bangladesh LimitedCBS Core Banking Software

CRISL Credit Rating and Information Services Ltd.DEPZ Dhaka Export Processing Zone

DP Depository ParticipantsEPS Earnings Per ShareEPZ Export Processing ZoneFY Fiscal Year (July to June)

GDP Gross Domestic ProductGRI Global Reporting Initiative

HOB Head of BranchIT Information Technology

IMF International Monetary FundIAS International Accounting StandardsIPO Initial Public OfferingLC Letter of Credit

MANCOM Management CommitteeNII Net Interest Income

NIM Net Interest MarginNPL Non Performing LoanOBU Of shore Banking Unit

IR Integrated ReportingPOS Point of SalePV Present Value

RWA Risk Weighted AssetsRMG Readymade GarmentsROA Return on Assets ROE Return on EquityR&D Research and DevelopmentSAFA South Asian Federation of AccountantsSME Small and Medium EnterpriseSOP Standard Operating ProcedureSLR Statutory Liquidity Ratio

RMA Relationship Management ApplicationSWIFT Society for Worldwide Interbank Financial Telecommunication

SEBCSL Southeast Bank Capital Service LimitedSEFSL Southeast Financial Services (UK) Limited

SEFSPL Southeast Financial Services (Australia) Pty Limited SEECPL Southeast Exchange Company (South Africa) Pty Ltd

Terminology


ents

StandardDisclosure

Checklist


Items Page No.1. BOARD OF DIRECTORS, CHAIRMAN AND CEO1.1 Company's policy on appointment of directors disclosed. 85

1.2Adequate representation of non executive directors i.e. one third of the Board, subject to a minimum of two

87

1.3At least one independent director on the board and disclosure / affirmation of the Board on such director’s independence.

87

1.4 Chairman to be independent of CEO 88

1.5Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure of independence of Non Executive Directors

89

1.6Existence of a scheme for annual appraisal of the boards performance and disclosure of the same.

89

1.7 Disclosure of policy on annual evaluation of the CEO by the Board. 90

1.8Disclosure of policy on training (including details of the continuing training program) of directors and type and nature of training courses organized for directors during the year Existence of a scheme for annual appraisal of the boards performance

90

1.9At least one director having thorough knowledge and expertise in finance and accounting to provide guidance in the matters applicable to accounting and auditing standards to ensure reliable financial reporting.

91

1.10Disclosure of number of meetings of the board and participation of each director (at least 4 meetings are required to be held)

91

1.11Directors issue a report on compliance with best practices on Corporate Governance that is reviewed by the external auditors

91

2. VISION / MISSIONS AND STRATEGY

2.1Company’s vision / mission statements are approved by the board and disclosed in the annual report.

7-8

2.2 Identification of business objectives and areas of business focus disclosed 92.3 General description of strategies to achieve the company's business objectives 10-113. AUDIT COMMITTEES3.1 Appointment and Composition 93

3.1.1 Whether the Audit Committee Chairman is an independent Non – Executive Director 93

3.1.2Whether it has specific terms of reference and whether it is empowered to investigate / question employees and retain external counsel

144-145

3.1.3 More than two thirds of the members are to be Non Executive Directors 87

3.1.4All members of the audit committee to be financially literate and at least one member to have expert knowledge of finance and accounting.

93

3.1.5 Head of internal audit to have direct access to audit committee 93

3.1.6The committee to meet at least four times a year and the number of meetings and attendance by individual members disclosed in the annual report.

93

3.2 Objectives & Activities

3.2.1Statement on Audit Committee’s review to ensure that internal controls are well conceived properly administered and satisfactorily monitored

145

3.2.2Statement to indicate audit committees role in ensuring compliance with Laws, Regulations and timely settlements of Statutory dues

145

SAFA Corporate Governance Disclosure Checklist


ents

3.2.3 Statement of Audit committee involvement in the review of the external audit function

144-146

- Ensure effective coordination of external audit function- Ensure independence of external auditors- To review the external auditors findings in order to be satisfied that appropriate action is

being taken- Review and approve any non audit work assigned to the external auditor and ensure that

such work does not compromise the independence of the external auditors.- Recommend external auditor for appointment/ reappointment

3.2.4Statement on Audit committee involvement in selection of appropriate accounting policies that are in line will applicable accounting standards and annual review.

3.2.5Statement of Audit Committee involvement in the review and recommend to the Board of Directors, annual and interim financial releases

3.2.6 Reliability of the management information used for such computation4. INTERNAL CONTROL & RISK MANAGEMENT4.1 Statement of Director's responsibility to establish appropriate system of internal control 82

4.2Narrative description of key features of the internal control system and the manner in which the system is monitored by the Board, Audit Committee or Senior Management.

144-145, 160-161

4.3 Statement that the Director's have reviewed the adequacy of the system of internal controls 82-834.4 Disclosure of the identification of risks the company is exposed to both internally & externally 161-1654.5 Disclosure of the strategies adopted to manage and mitigate the risks 124-1255. ETHICS AND COMPLIANCE

5.1Disclosure of statement of ethics and values, covering basic principles such as integrity, conflict of interest, compliance with laws and regulations etc..

14-15

5.2Dissemination / communication of the statement of ethics & business practices to all directors and employees and their acknowledgement of the same

54,96

5.3Board’s statement on its commitment to establishing high level of ethics and compliance within the organization

95

5.4Establishing effective anti-fraud programs and controls, including effective protection of whistle blowers, establishing a hot line reporting of irregularities etc.

147-148

6. REMUNERATION COMMITTEE6.1 Disclosure of the charter (role and responsibilities) of the committee 97

6.2Disclosure of the composition of the committee (majority of the committee should be non-executive directors, but should also include some executive directors)

97

6.3Disclosure of key policies with regard to remuneration of directors, senior management and employees

97

6.4 Disclosure of number of meetings and work performed 95-966.5 Disclosure of remuneration of directors, chairman, chief executive and senior executives. 977. HUMAN CAPITAL

7.1

Disclosure of general description of the policies and practices codified and adopted by the company with respect to Human Resource Development and Management, including succession planning, merit based recruitment, performance appraisal system, promotion and reward and motivation, training and development, grievance management and counseling.

191-192

7.2 Organizational Chart 258. COMMUNICATION TO SHAREHOLDERS & STAKEHOLDERS

8.1Disclosure of the Company's policy / strategy to facilitate effective communication with shareholders and other stake holders

97-98

8.2Disclosure of company’s policy on ensuring participation of shareholders in the Annual General Meeting and providing reasonable opportunity for the shareholder participation in the AGM.

97-98

9. ENVIRONMENTAL AND SOCIAL OBLIGATIONS

9.1Disclosure of general description of the company's policies and practices relating to social and environmental responsibility of the entity

186-889.2

Disclosure of specific activities undertaken by the entity in pursuance of these policies and practices


Items Page No.1. Elements of an Integrated Report1.1 Organizational overview and external environment

An integrated report should disclose the main activities of the organization and the environment of which it operates. An integrated report should identify the organization’s mission and vision, and provides essential context by identifying matters such as:• The organization’s: • culture, ethics and values • ownership and operating structure including size of the organization, location of its operations) • principal activities and markets • competitive landscape and market positioning (considering factors such as the threat of new

competition and substitute products or services, the bargaining power of customers and suppliers, and the intensity of competitive rivalry)

• position within the value chain • Key quantitative information e.g., the number of employees, revenue and number of countries in which the organization operates

highlighting, in particular, significant changes from prior periods• Significant factors affecting the external environment and the organization’s response (include aspects of the legal, commercial, social, environmental and political context that affect the

organization’s ability to create value in the short, medium or long term) Eg:• The legitimate needs and interests of key stakeholders • Macro and micro economic conditions stability, globalization, and industry trends • Market forces, such as the relative competitors and customer demand• The speed and effect of technological change• Societal issues, such as population and demographic changes, human rights, health, poverty,

collective values and educational systems • Environmental challenges, such as climate change, the loss of ecosystems, and resource shortages

as planetary limits are approached • The legislative and regulatory environment in which the organization operates • The political environment in countries where the organization operates and other countries that may

affect the ability of the organization to implement its strategy

12-15211219190

70-7153

1.2 GovernanceAn integrated report should how does the organization’s governance structure support its ability to create value in the short, medium and long term.An integrated report needs to provide an insight about how such matters as the following are linked to its ability to create value:

• The organization’s leadership structure, including the skills and diversity (e.g., range of backgrounds, gender, competence and experience) of those charged with governance and whether regulatory requirements influence the design of the governance structure

• Specific processes used to make strategic decisions and to establish and monitor the culture of the organization, including its attitude to risk and mechanisms for addressing integrity and ethical issues

• Particular actions those charged with governance have taken to influence and monitor the strategic direction of the organization and its approach to risk management

• How the organization’s culture, ethics and values are reflected in its use of and effects on the capitals, including its relationships with key stakeholders

80-98

Integrated ReportingChecklist


ents

Items Page No.• Whether the organization is implementing governance practices that exceed legal requirements/

Key Policies• The responsibility those charged with governance take for promoting and enabling innovation• How remuneration and incentives are linked to value creation in the short, medium and long

term, including how they are linked to the organization’s use of and effects on the capitals.1.3 Stakeholder Identification/ relationships

An integrated report should identify its key stakeholders and provide insight into the nature and quality of the organization’s relationships with its key stakeholders, including how and to what extent the organization understands, takes into account and responds to their legitimate needs and interests.

Capitals An integrated report needs to provide insight about the resources and the relationships used and affected by the organization, which are referred to collectively as the capitals and how the organization interacts with the capitals to create value over the short, medium and long termAn integrated report need to identify the various forms of capitals which are essential for the success of its business operations. Eg: financial, manufactured, intellectual , human, social and relationship,and natural, However an entity can do its own classification of capitals based on its business activities. An entity needs to ensure that it does not overlook a capital that it uses or affects.

214-215

189

1.4 Business modelAn integrated report should describe the organization’s business model An integrated report need to describe the business model, including key: • Inputs • Business activities • Outputs • Outcomes Features that can enhance the effectiveness and readability of the description of the business model include: • Explicit identification of the key elements of the business model • A simple diagram highlighting key elements, supported by a clear explanation of the relevance

of those elements to the organization• Narrative flow that is logical given the particular circumstances of the organization • Identification of critical stakeholder and other (e.g., raw material) dependencies and important

factors affecting the external environment • Connection to information covered by other Content Elements, such as strategy, risks and

opportunities, and performance (including KPIs and financial considerations, like cost containment and revenues).

Inputs An integrated report shows how key inputs relate to the capitals on which the organization depends, or that provide a source of differentiation for the organization, to the extent they are material to understanding the robustness and resilience of the business model. Business activities An integrated report describes key business activities. This can include: • How the organization differentiates itself in the market place (e.g., through product differentiation,

market segmentation, delivery channels and marketing) • The extent to which the business model relies on revenue generation after the initial point of

sale (e.g., extended warranty arrangements or network usage charges) • How the organization approaches the need to innovate • How the business model has been designed to adapt to change.

When material, an integrated report discusses the contribution made to the organization’s long term success by initiatives such as process improvement, employee training and relationships management.

19

206-211218-219


Items Page No.Outputs An integrated report identifies an organization’s key products and services. There might be other outputs, such as by-products and waste (including emissions), that need to be discussed within the business model disclosure depending on their materiality. Outcomes An integrated report describes key outcomes, including: • Both internal outcomes (e.g., employee morale, organizational reputation, revenue and cash

flows) and external outcomes (e.g., customer satisfaction, tax payments, brand loyalty, and social and environmental effects)

• Both positive outcomes (i.e., those that result in a net increase in the capitals and thereby create value) and negative outcomes (i.e., those that result in a net decrease in the capitals and thereby diminish value).

Organizations with multiple business models Some organizations employ more than one business model (e.g., when operating in different market segments). This requires a distinct consideration of each material business model as well as commentary on the extent of connectivity between the business models (such as the existence of synergistic benefits)

72-76

1.5 PerformanceAn integrated report needs to explain the extent to which the organization has achieved its strategic objectives for the period and what are its outcomes in terms of effects on the capitals? An integrated report should contain qualitative and quantitative information about performance that may include matters such as: • Quantitative indicators with respect to targets and risks and opportunities, explaining their

significance, their implications, and the methods and assumptions used in compiling them • The organization’s effects (both positive and negative) on the capitals, including material effects

on capitals up and down the value chain • The state of key stakeholder relationships and how the organization has responded to key

stakeholders’ legitimate needs and interests • The linkages between past and current performance, and between current performance and the

organization’s outlook. KPIs that combine financial measures with other components (e.g., the ratio of greenhouse gas emissions to sales) or narrative that explains the financial implications of significant effects on other capitals and other causal relationships (e.g., expected revenue growth resulting from efforts to enhance human capital) may be used to demonstrate the connectivity of financial performance with performance regarding other capitals. In some cases, this may also include monetizing certain effects on the capitals (e.g., carbon emissions and water use). Include instances where regulations have a significant effect on performance (e.g., a constraint on revenues as a result of regulatory rate setting) or the organization’s non-compliance with laws or regulations may significantly affect its operations.

197-215

1.6 Risks and opportunitiesAn integrated report should explain what are the specific risks and opportunities that affect the organization’s ability to create value over the short, medium and long term, and how is the organization dealing with them? This can include identifying: • The specific source of risks and opportunities, which can be internal, external or, commonly, a mix

of the two. • The organization’s assessment of the likelihood that the risk or opportunity will come to fruition

and the magnitude of its effect if it does. • The specific steps being taken to mitigate or manage key risks or to create value from key

opportunities, including the identification of the associated strategic objectives, strategies, policies, targets and KPIs.

158-165166-177


ents

Items Page No.1.7 Strategy and resource allocation

An integrated report should describe it strategic direction (Where does the organization want to go and how does it intend to get there) An integrated report need to identify: • The organization’s short, medium and long term strategic objectives • The strategies it has in place, or intends to implement, to achieve those strategic objectives • The resource allocation plans it has to implement its strategy • How it will measure achievements and target outcomes for the short, medium and long term.

This can include describing: • The linkage between the organization’s strategy and resource allocation plans, and the information

covered by other Content Elements, including how its strategy and resource allocation plans: • relate to the organization’s business model, and what changes to that business model might be

necessary to implement chosen strategies to provide an understanding of the organization’s ability to adapt to change

• are influenced by/respond to the external environment and the identified risks and opportunities affect the capitals, and the risk management arrangements related to those capitals

• What differentiates the organization to give it competitive advantage and enable it to create value, such as:

• the role of innovation • how the organization develops and exploits intellectual capital • the extent to which environmental and social considerations have been embedded into th

organization’s strategy to give it a competitive advantage • Key features and findings of stakeholder engagement that were used in formulating its strategy and

resource allocation plans.

9-11

1.8 Outlook An integrated report should explain what challenges and uncertainties is the organization likely to encounter in pursuing its strategy, and what are the potential implications for its business model and future performance? An integrated report should highlight anticipated changes over time and provides information on • The organization’s expectations about the external environment the organization is likely to face in

the short, medium and long term • How that will affect the organization • How the organization is currently equipped to respond to the critical challenges and uncertainties

that are likely to arise. The discussion of the potential implications, including implications for future financial performance may include: • The external environment, and risks and opportunities, with an analysis of how these could affect the

achievement of strategic objectives • The availability, quality and affordability of capitals the organization uses or affects (e.g., the continued

availability of skilled labour or natural resources), including how key relationships are managed and why they are important to the organization’s ability to create value over time.

An integrated report may also provide lead indicators, KPIs or objectives, relevantinformation from recognized external sources, and sensitivity analyses. If forecasts or projections are included in reporting the organization’s outlook, a summary of related assumptions is useful. Comparisons of actual performance to previously identified targets further enables evaluation of the current outlook. Disclosures about an organization’s outlook in an integrated report should consider the legal or regulatory requirements to which the organization is subject.

9160-165


Items Page No.1.9 Basis of preparation and presentation

An integrated report should answer the question: How does the organization determine what matters to include in the integrated report and how are such matters quantified or evaluated? An integrated report describes its basis of preparation and presentation, including: • A summary of the organization’s materiality determination process • Brief description of the process used to identify relevant matters, evaluate their importance and

narrow them down to material matters • Identification of the role of those charged with governance and key personnel in the identification

and prioritization of material matters. • A description of the reporting boundary and how it has been determined Eg: Include process used for identifying the reporting boundary, geographic scope, the entities

represented in the report and the nature of the information provided for each entity • A summary of the significant frameworks and methods used to quantify or evaluate material matters (e.g., the applicable financial reporting standards used for compiling financial information, a company-

defined formula for measuring customer satisfaction, or an industry based framework for evaluating risks).

189

2. Responsibility for an integrated reportAn integrated report should include a statement from those charged with governance that includes: • An acknowledgement of their responsibility to ensure the integrity of the integrated report • An acknowledgement that they have applied their collective mind to the preparation and

presentation of the integrated report • Their opinion or conclusion about whether the integrated report is presented in accordance with the

Framework or, if it does not include such a statement , it should explain: • What role those charged with governance played in its preparation and presentation • What steps are being taken to include such a statement in future reports • The time frame for doing so, which should be no later than the organization’s third integrated report

that references this Framework.

189

3. Other Qualitative Characteristics of an Integrated ReportConciseness An integrated report should be concise. An integrated report need to include sufficient context to understand the organization’s strategy, governance, performance and prospects without being burdened with less relevant information

9-10

3.2 Reliability and completeness An integrated report should include all material matters, both positive and negative, in a balanced way and without material error

189

3.3 Consistency and comparability The information in an integrated report should be presented: • On a basis that is consistent over time • In a way that enables comparison with other organizations to the extent it is material to the

organization’s own ability to create value over time. Eg: • Using benchmark data, such as industry or regional benchmarks • Presenting information in the form of ratios (e.g., research expenditure as a percentage of sales,

or carbon intensity measures such as emissions per unit of output) • Reporting quantitative indicators commonly used by other organizations with similar activities,

particularly when standardized definitions are stipulated by an independent organization (e.g., an industry body).

198-200

3.4 Connectivity of information An integrated report should show a holistic picture of the combination, interrelatedness and dependencies between the factors that affect the organization’s ability to create value over time. Eg: Connectivity between – Capitals - Content elements - Past , Present & Future - Finance and other information

189

3.5 Materiality An integrated report should disclose information about matters that substantively affect the organization’s ability to create value over the short, medium and long term

189-190

3.6 Assurance on the Report • The policy and practice relating to seeking assurance on the report, • the nature and scope of assurance provided for this particular report • any qualifications arising from the assurance, and the nature of the relationship between the

organization and the assurance providers

189


ents

Disclosure checklist to the key sections of the Annual Report - 2016

Items Ref. Page No.CORPORATE OBJECTIVES, VALUES & STRUCTURE CLARITY AND PRESENTATION

Vision and Mission 6-8Overall strategic objectives 9Core values and code of conduct/ethical principles 12-15Profile of the Company 17Director’s profiles and their representation on Board of other companies & Organizations Chart 36-47,25

MANAGEMENT REPORT AND ANALYSIS INCLUDING DIRECTOR’S REPORT / CHAIRMAN’S REVIEW/CEO’S REVIEW ETC.A general review of the performance of the company 50-56Description of the performance of the various activities / products / segments of the company and other companies of the group during the period under review.

72-76

A brief summary of the Business and other Risks facing the organization and steps taken to effectively manage such risks

158-165

A general review of the future prospects/outlook. 28,55-56Information on how the company contributed to its responsibilities towards the staff (including health & safety)

192,224-225

Information on company's contribution to the national exchequer and to the economy 78,226SUSTAINABILITY REPORTING

Corporate Social Responsibility (CSR) Initiatives 54,182-185Environment Related Initiatives 186-187Environmental and Social Obligations 188Integrated Reporting 189-190

APPROPRIATIONS OF DISCLOSURE OF ACCOUNTING POLICIES AND GENERAL DISCLOSUREDisclosure of adequate and properly worded accounting policies relevant to assets, liabilities, Income and expenditure in line with best reporting standards.

272-290Any Specific accounting policiesImpairment of AssetsChanges in accounting policies/Changes in accounting estimates

SEGMENT INFORMATIONComprehensive segment related information bifurcating segment revenue, segment results and segment capital employed

206-211,362-363

Availability of information regarding different segments and units of the entity as well as non-segmental entities/unitsSEGMENT ANALYSIS OF

- Segment Revenue- Segment Results- Turnover- Operating profit- Carrying amount of Net Segment assets

FINANCIAL STATEMENTS (INCLUDING FORMATS)Disclosures of all contingencies and commitments 322Comprehensive related party disclosures 333Disclosures of Remuneration & Facilities provided to Directors & CEO 327-328Statement of Financial Position / Balance Sheet and relevant schedules 267Income Statement / Profit and Loss Account and relevant schedules 269

SAFA Standard Disclosure Index


Items Ref. Page No.Statement of Changes in Equity / Reserves & Surplus Schedule 271Disclosure of Types of Share Capital 317Statement of Cash Flow 270Consolidated Financial Statements (CFS) 262Extent of compliance with the core IAS/IFRS or equivalent National Standards 288Disclosures / Contents of Notes to Accounts 272

INFORMATION ABOUT CORPORATE GOVERNANCEBoard of Directors, Chairman and CEO 85-86Audit Committee (Composition, role, meetings, attendance, etc) Internal Control and Risk Management

144-150

Ethics and Compliance 95Remuneration and other Committees of Board 97,32Human Capital 191Communication to Stakeholders

197-215- Information available on website - Other informationManagement Review and Responsibility 100-127Disclosure by Board of Directors of Audit Committee on evaluation of quarterly reports 151Any other investor-friendly information 215

RISK MANAGEMENT AND CONTROL ENVIRONMENTDescription of the Risk Management Framework 158-165Risk Mitigation Methodology 158-165Disclosure of Risk Reporting 125

STAKEHOLDERS INFORMATIONDistribution of shareholders (Number of shares as well as category wise, e.g Promoter group, FII etc)

211

Shares held by Directors/Executives and relatives of Directors/Executives 211Redress of investors complaints 215

GRAPHICAL/ PICTORIAL DATAEarnings per Share 207Net Assets 209Stock Performance 207Shareholders’ Funds 209Return on Shareholders Fund 209

HORIZONTAL/VERTICAL ANALYSIS OF DIFFERENT PERFORMANCE/OPERATION INDICATORSOperating Performance (Income Statement)

198-200

- Total Revenue- Operating profit- Profit before Tax- Profit after Tax- EPSStatement of Financial Position (Balance Sheet)- Shareholders Fund- Property Plant and Equipment- Net Current Assets- Long Term Liabilities/Current Liabilities

PROFITABILITY/DIVIDENDS/ PERFORMANCE AND LIQUIDITY RATIOSGross Profit Ratio

198-200

Earning before Interest, Depreciation and TaxPrice Earning RatioCurrent RatiosReturn on Capital EmployedDebt Equity Ratio


ents

Items Ref. Page No.VALUE ADDED STATEMENT AND ITS DISTRIBUTION

Taxes Paid to the Government

194-196

Dividend Paid to ShareholdersBonus/Remuneration Paid to EmployeesRetained by the entityMarket share information of the Company’s product/servicesEconomic value added

ADDITIONAL DISCLOSURESSustainability Development Reporting 180Human Resource Accounting 191-192Geographical Presence 233

SPECIFIC AREA FOR BANKING SECTORDisclosure of ratings given by various rating agencies for instruments issued by /of Bank. 143Details of loans and advances portfolio: classification wise as per the direction of Bangladesh Bank

156-157

Disclosure for Non Performing Assets- Movements in NPA- Sector-wise breakup of NPA- Movement of Provisions made against NPA- Details of accounts restructured as per regulatory guidelinesMaturity Pattern of Key Assets and Liabilities Classification and valuation of investments as per regulatory guidelines/Accounting Standards

BUSINESS RATIO/INFORMATION - Statutory Liquidity Reserve (Ratio)

25,198-200

- Net interest income as a percentage of working funds / Operating cost - Efficiency Ratio- Return on Average Asset- Cost / Income Ratio- Net Asset Value Per Share- Profit per Employee- Capital Adequacy Ratio- Operating profit as a percentage of working funds / Return on Asset- Cash Reserve Ratio / Liquid Asset ratio- Dividend Cover Ratio- Gross Non-Performing Assets to Gross Advances/Non-Performing Loans (Assets) to Total Loans (Assets)Details of credit concentration/Sector vise exposures 301-302The break-up of ‘Provisions and contingencies’ included in the Profit and Loss Account 312-113Disclosure under regulatory guidelines (Market Discipline- Pillar 3 Disclosures under Basel-III) 319-320Details of Non-Statutory investment portfolio 295Disclosure in respect of assets given on operating & finance lease 315Disclosures for derivative investments 295-300Bank's Network : List of Branches or Centers 232


Items Page No.A Quantitative Factors

Profitability1 ROA (before Tax)

27,198-2022 ROE (After Tax)3 NIM4 Return of Average weighted Asset5 Efficiency ratio

Capital Adequacy1 Risk Weighted Asset

319-3212 Internal Capital Generation Ratio3 Leverage Ratio

Asset Quality1 Gross NPL Ratio

156-1572 Net NPL Ratio3 Gross NPL Coverage4 SMA to Credit Portfolio

Liquidity and Funding1 Liquid Asset Ratio

52,174-1752 Loan to Deposit Ratio

B Qualitative FactorsCapital Adequacy

1 Capital Buffer154-155

2 Trend of Internal Capital GrowthAsset Quality

1 Trend of Non Performing Assets

156,27,301-3022 Credit Growth/Outreach3 Exposure Concentration4 Priority Sector Financing

Board and Management1 Organization Development

25-26,29,34-47,80-98

2 Director's Profile3 Corporate Governance

Earnings1 Bank Vs Industry Earnings

198-2102 Earnings Stability3 Movement of Profitability Indicators

Liquidity1 Liquidity and Deposit Base 73-75

Quality of Accounts & Disclosure1 Quality of Accounts/ Compliance

260-261,272-3632 Disclosure

Risk Management & Compliance1 Risk Management Guidelines

159-165,92,1772 Related Party Transaction3 Capital Market Exposure

Franchise Value1 Foreign Affiliation

244-257,143,226,182-185

2 Credit Rating of the Bank3 Contribution of National Exchequer

4 Contribution of CSR Activities

Market Presence1 Market Share

196,232-237,218-219

2 Branch Network3 Product Diversification

Important Financial Indicators with Quantitative and Qualitative Factors

Events2016

Southeast Bank Limited donated BDT10.00 million to the Prime Minister’s Relief and Welfare Fund for blankets for country’s cold-hit poor people. Honorable Prime Minister Sheikh Hasina is seen receiving the Cheque from Alamgir Kabir, FCA, Chairman of the Bank. Azim Uddin Ahmed, Director of Southeast Bank was also present on the occasion.

Azim Uddin Ahmed, Director, Southeast Bank handed over a Cheque for BDT 7.50 million to Prime Minister Sheikh Hasina on August 09, 2016 in Dhaka as donation for Prime Minister’s Relief Fund.

Azim Uddin Ahmed, Director, Southeast Bank handed over a Cheque for Tk. 15.00 million to the Honorable Prime Minister Sheikh Hasina at Gonobhaban on June 27, 2016 in Dhaka as donation for Prime Minister’s Relief Fund.


Southeast Bank Foundation organized a reception on 27 February 2016 for the Higher Secondary and Graduation level meritorious students coming from different poor families for disbursement of scholarships. Dr. Atiur Rahman, former Governor, Bangladesh Bank, was present on the occasion as the Chief Guest. Alamgir Kabir, FCA, Chairman, Southeast Bank Limited was present as the special guest.

Southeast Bank Limited signed a Memorandum of Understanding with Hajj Agencies Association of Bangladesh (HAAB) on February 01, 2016 at Southeast Bank, Head Office. Shahid Hossain, Former Managing Director of Southeast Bank Limited and the President of HAAB Mohammad Ibrahim Bahar, signed the agreement on behalf of their respective organizations.

Southeast Bank Limited signed an Agreement with Bangladesh Bank for Participation in Green Transformation Fund. Manoj Kumar Biswas, General Manager, Sustainable Finance Department, Bangladesh Bank and Shahid Hossain, Former Managing Director, Southeast Bank Limited signed the agreement on behalf of their respective organizations. Shitangshu Kumar (S.K.) Sur Chowdhury, Deputy Governor, Bangladesh Bank was the Chief Guest of the signing ceremony.


ents

Shahid Hossain, Former Managing Director of Southeast Bank unveiled the newly designed product “Ananya” along with its first Account Holder Hasnat Ara Haque.

Mohammed Gofran, Additional Managing Director of Southeast Bank unveiled the Campaign “NIBIR” at the Bank’s Agrabad Branch with valued clients of the Bank.

Shahid Hossain, Former Managing Director of Southeast Bank unveiled the newly designed product “Bichokkhon” along with its first Account Holder Muhammad Mahmood.


Southeast Bank launched a new product in the name and style “Southeast- Cash Express Remit Card” in collaboration with World Wide Cash Express, UAE for the expatriates’ family members. Shahid Hossain, Former Managing Director of Southeast Bank formally launched “Southeast-Cash Express Remit Card” service.

Southeast Bank Limited launches EMI PAY (Equal Monthly Installment Plan) service. The formal launching ceremony was held on April 26, 2016 at the Bank’s Head Office, Dhaka. Shahid Hossain, Former Managing Director of the Bank formally launched this service for Southeast Bank Card Members.

Southeast Bank signed an agreement with bKash to provide payment and collection service to bKash distributors through the bank’s branches network as well as transmission of real time collection information to bKash through online link. Shahid Hossain, Former Managing Director of Southeast Bank and Kamal Quadir, Chief Executive Officer of bKash Limited signed the agreement on behalf of their respective organizations on 22 August, 2016.


ents

Southeast Bank facilitated the modernization and automation works of the Department of Information Science and Library Management as part of Bank’s Corporate Social Responsibility. The inauguration of the “modernization and automation works” of the Department of Information Science and Library Management, University of Dhaka was held on June 06, 2016. Prof. Dr. A A M S Arefin Siddique, Vice-Chancellor of University of Dhaka was present as Chief Guest. Shahid Hossain,

Former Managing Director of Southeast Bank was also present as the Special Guest. Muhammad Shahjahan, Additional Managing Director of the Bank was also present in the function.

Southeast Bank donated Tk.5.00 million on June 23, 2016 for the installation of a Capsule Lift for Teachers at the MBA Bhaban of the University of Dhaka as a part of its Corporate Social Responsibility in the area of education. In the cheque handing over ceremony, Prof. Dr. A A M S Arefin Siddique, Vice-Chancellor, University of

Dhaka, Shahid Hossain, Former Managing Director of Southeast Bank and Prof. Shibli Rubayat-Ul-Islam, Dean, Faculty of Business Studies, University of Dhaka and Muhammad Shahjahan, Additional Managing Director of Southeast Bank were present.

Southeast Bank gave financial support for renovation modernization of Computer Laboratory of Department of Information Science and Library Management, University of Dhaka as part of Bank’s Corporate Social Responsibility. The inauguration of the Computer Laboratory was held on November 13, 2016. Prof. Dr. A A M S Arefin Siddique, Vice-Chancellor of University of Dhaka graced the occasion as Chief Guest. Shahid Hossain, Former Managing Director of Southeast Bank Limited was also present in the ceremony as the Special Guest. Professor Dr. Muhammad Mezbah-ul-Islam, Chairman of the Department of Information Science and Library Management, University of Dhaka chaired the function.


Annisul Huq, Mayor, Dhaka North City Corporation, received the cheque from Shahid Hossain, Former Managing Director, Southeast Bank. As a part of CSR activities, Southeast Bank donated Tk.2.50 million on January 21, 2016 at the office of the Dhaka City Corporation (North) for installation of CCTV Cameras primarily at the Diplomatic Zone of Dhaka city to ensure safety and security to the communities.

Southeast Bank opened a Municipal Tax Collection Booth at Feni Pourashava on October 10, 2016 at College Road, Feni. Nizam Uddin Hajari, MP and Member, Parliamentary Standing Committee on the Ministry of Health and Family Welfare formally inaugurated Booth as Chief Guest. Haji Alauddin, Mayor, Feni Pourashava; Abdur Rahman, Upazila Chairman, Feni Sadar, Feni Pourashava; Shahid Hossain, Former Managing Director, Southeast Bank were also present as Special Guest in the program.

Southeast Bank Limited, as a part of its Corporate Social Responsibility, donated One Double Cabin Pick-up Van to “Valuka Model Thana” Valuka, Mymensingh on November 02, 2016. S.M. Mainuddin Chowdhury, Additional Managing Director of the Southeast Bank handed over the key of One Double Cabin Pick-up Van to A K M Shahidul Hoque, bpm, ppm, Inspector General of Police, Bangladesh Police in presence of Fahmi Gulandaz Babel, Member of Parliament, Mymensingh-10.


ents

Southeast Bank inaugurated its Malibagh Branch at Siddheswari Circular Road, Dhaka on May 29, 2015. Mohammed Gofran, Additional Managing Director of the Bank formally inaugurated the Branch as the Chief Guest.

Southeast Bank and Bangladesh Telecommunications Company Limited (BTCL) signed an agreement. Under this agreement, SEBL will facilitate BTCL customers’ bill collection through its branch network and delivery channels, and transmit real time collection information to BTCL through online link. S. M. Mainuddin Chowdhury, Deputy Managing Director of Southeast Bank and Golam Fakhruddin Ahmed Chowdhury, Managing Director, BTCL signed the agreement on behalf of their respective organizations.

Southeast Bank signed an MoU with Bakhrabad Gas Distribution Company Limited for collection of Gas bills. The signed MoU was exchanged between Shahid Hossain, Former Managing Director of Southeast Bank and M. A. Hannan Azad, Secretary of Bakhrabad Gas Distribution Company Limited.


Southeast Bank signed a Memorandum of Understanding with Infrastructure Development Company Limited on February 07, 2016 for a strategic partnership for Renewable Energy and Infrastructure projects. Shahid Hossain, Former Managing Director of Southeast Bank Limited signed the agreement on behalf of the Bank.

An agreement was signed between Southeast Bank and Le Meridien Dhaka. Under this agreement, Southeast Bank Credit Cardholders can now enjoy luxurious lodging, dining, fitness centre and laundry services at Le Meridien Dhaka at attractive discounts up to 15% on the regular price. S. M. Mainuddin Chowdhury, Additional Managing Director of the Bank and Ashwini Nayar, General Manager of Le Meridien Dhaka exchanged copies of the agreement. Senior officials from the both sides were present at the signing ceremony.

An agreement was signed between Southeast Bank and US-Bangla Airlines on October 20, 2016. Under this agreement, Southeast Bank Credit Cardholders can avail EMI (Equal Monthly Installment) facility up to 6 months @ 0% interest. Shahid Hossain, Former Managing Director and Md. Shafiqul Islam, Head of Sales and Marketing of US-Bangla Airlines signed the Agreement on behalf of their respective organizations.


ents

Southeast Bank Limited opened its 125th Branch at Chuadanga on December 08, 2016. Muhammad Shahjahan, Additional Managing Director and Company Secretary, Southeast Bank, formally inaugurated the Chuadanga Branch as the Chief Guest.

Southeast Bank and Election Commission (EC) signed an agreement on May 15, 2016. Under this agreement, Southeast Bank will collect fees against NID related services for the commission. S. M. Mainuddin Chowdhury, Additional Managing Director of Southeast Bank and Md. Anowar Hossain, Director (Administration and Finance) of EC signed the agreement on behalf of their respective organizations.

Southeast Bank Limited opened its 127th Branch at R.K.Mission Road, Dhaka on December 26, 2016. Shahid Hossain, Former Managing Director, Southeast Bank formally inaugurated the R, K, Mission Road Branch as the Chief Guest.


Notes

Registered Office: 52-53, Dilkusha C/A, Dhaka-1000

PROXY FORMI/We……………………………………………....………………………..…of…………………………………………

……………………………………………………. being a member of Southeast Bank Limited, do hereby appoint

Mr./Mrs.……………………………………………….of……………………………………………. as my/our proxy to

attend and vote on my/our behalf at the 22nd Annual General Meeting of the company to be held on May 22, 2017 and

at any adjournment thereof.

As witness my/our hand this …………………day of ……………….. 2017.

……………………………… ……………………….Signature of Shareholder(s) Signature of PROXYNo. of Shares held…………………………………….. Folio/BOID #

Folio No.

Or

BO ID No.

Note: i. Signature must agree with the recorded signature.ii. A Member entitled to attend and vote at the 22nd AGM may appoint a proxy to attend and vote on his/her behalf. The Proxy Form duly stamped must be deposited at the Registered Office of the Company at least 48 hours before the time set for the Meeting, i.e. 11:00 a.m. of May 20, 2017.

Signature Verified

Proxy Reg. No …………………… ………………………….. Authorized Signatory

Registered Office: 52-53, Dilkusha C/A, Dhaka-1000

ATTENDANCE SLIP I/We hereby record my/our attendance at the 22nd Annual General Meeting being held today, the Monday, May 22, 2017 at 11:00 a.m. at Officers’ Club Dhaka, 26 Baily Road, Dhaka.

Name of the Shareholder(s) / Proxy (in Block Letters)

No. of Shares

Folio No.

BO ID No.

Name of the Proxy (If any)

…………………………………… ………………………….Signature of Shareholder(s)/Proxy Signature verified by

REQUEST : Please bring your copy of Annual Report to the Meeting. IMPORTANT : To facilitate registration formalities at the Meeting Place, shareholder(s) are requested to bring the attendance slip duly filled in.

N.B. : General Meeting can only be attended by the honorable shareholders or properly constituted Proxy/Attorney. Therefore, any friend or child accompanying the honorable shareholders or proxies can not be allowed into the Meeting.

PS: As per Bangladesh Securities and Exchange Commission’s Circular No.SEC/CMRRCD/2009-193/154 dated October 24, 2013, “no benefit in cash or kind, other than in the form of cash dividend or stock dividend, shall be paid to the holders of equity securities” for attending the 22nd Annual General Meeting of the Bank.

RevenueStamp

Tk.20.00

Southeast Bank LimitedRegistered Office: Eunoos Trade Centre52-53, Dilkusha C/A (Level 2,3,4,6 & 16), Dhaka-1000, BangladeshPhone:+88 02 9571115, 9576415, 9555466 & 9578324SWIFT: SEBDBDDHXXX, E-mail: [email protected]: www.southeastbank.com.bd

Untitled - Southeast Bank Limited

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