Beruflich Dokumente
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Corporate Profile
Name of the Company : Southeast Bank Limited
Chairman : Alamgir Kabir, FCA
Vice Chairman : Tillaghar Holdings Limited
Contents Represented by Abdul Hye
Managing Director : Neaz Ahmed
2 Company Secretary : Muhammad Shahjahan
Corporate Philosophy and Performance
Legal Status : Public Limited Company
corporate profile 2
vision, missions and Date of Incorporation : March 12, 1995
commitments to clients 3 Registered Office : 1, Dilkusha C/A (3rd Floor), Dhaka-1000
10 years at a glance 4 Line of Business : Banking
5 Authorized Capital
Paid Up Capital
: Tk.3,500.00 million
: Tk.2,281.76 million
Governance
board of directors 5 Year of Initial Public Offer : 1999
management team 6 Stock Exchange Listing : April 10, 2000 (DSE) & April 24, 2000 (CSE)
chairmans report 8
Phone : 9550081, 9567271-2
from the desk of managing director 20
boards report to shreholders 22 Fax : 9550086, 9550092-94, 9571052-3
report on corporate governance 60 SWIFT : SEBDBDDHXXX
report on risk management 65 E-mail : info@sebankbd.com
report on corporate social responsibility 68
Website : www.sebankbd.com
report of the audit committee 70
report of the shariah council 71
value added statement 72
Economic Value Added Statement 73
Market Value Added Statement 74 Financial Calendar for 2007
75 Dividend declaration for 2006 March 21, 2007
Financial Statements Publication of Financial Statements-2006 March 28, 2007
auditors report to shareholders 75
Record date for 12th AGM April 04, 2007
financial statements 76
notes to the accounts 83 12th Annual General Meeting held April 22, 2007
Cash dividend paid April 28, 2007
123 Stock dividend credited May 10, 2007
Information to Shareholders Half yearly result (June 2007) announced July 30, 2007
notice of 13th AGM 123
list of branches 124
proxy form & attendence slip 127
February : Managers Conference held and Annual Budget discussed
March : 20% cash and 8% stock dividend declared for shareholders
April : 12th Annual General Meeting held
May : Total Deposit was over Tk. 52,000 mn
June : Credit rating A2 for Long Term and ST-2 for Short Term
July : Half-yearly operating profit reached Tk. 1,310 mn
August : Half-yearly Business Review and Managers' Conference held
October : 3rd quarter profit crossed last years total profit
November : Total loans and advances crossed Tk. 45,000 mn
December : Received Recognition Award (Banking Sector) from ICAB for
Best Published Accounts and Reports-2006
Annual Report 2007
Our Vision
To be a premier banking institution in Bangladesh and contribute
significantly to the national economy.
Our Missions
v High quality financial services with state of the art technology
v Fast customer service
v Sustainable growth strategy
v Follow ethical standards in business
v Steady return on shareholders equity
v Innovative banking at a competitive price
v Attract and retain quality human resource
v Commitment to Corporate Social Responsibility
In Million Taka
PARTICULARS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Authorized Capital 500.00 500.00 500.00 500.00 2,500.00 2,500.00 2,500.00 2,500.00 3,500.00 3,500.00
Paid up Capital 150.00 300.00 330.00 363.00 399.30 677.16 880.31 1,056.37 2,112.74 2,281.76
Reserve Fund/ Others 85.13 145.70 235.28 394.20 571.66 622.98 769.13 1,180.47 2,828.18 4,186.60
Total Capital (Tier-I+Tier-II) 235.13 445.70 565.28 757.20 970.96 1,300.14 1,649.44 2,236.84 4,940.92 6,468.36
Deposit 5,483.39 7,512.49 8,569.70 10,570.25 15,343.45 19,618.82 27,930.84 38,258.15 46,056.18 55,474.05
Advance 3,402.21 5,051.88 7,061.87 9,178.03 13,027.13 15,541.50 22,001.70 32,551.09 41,147.28 48,164.60
Investment 509.73 971.81 1,369.92 1,727.44 2,282.08 2,581.61 3,190.15 5,113.14 6,265.55 8,462.86
Import Business 6,852.19 8,228.50 11,239.14 12,187.37 12,817.01 16,270.80 20,229.62 29,079.30 35,125.12 38,470.34
Export Business 353.43 704.47 1,319.51 2,675.05 2,263.45 3,033.79 6,761.93 13,511.10 25,874.61 28,771.36
Guarantee Business 744.92 907.18 1,306.24 1,854.50 2,502.48 3,391.19 4,717.82 7,975.00 8,656.80 9,008.32
Total Income 727.53 862.86 1,259.03 1,748.18 1,936.54 2,772.52 3,043.49 4,689.55 6,766.11 8,670.47
Total Expenditure 556.87 661.02 921.70 1,256.05 1,443.98 2,107.36 2,234.83 3,216.11 4,703.45 5,754.27
Operating Profit 170.66 201.84 337.33 492.13 492.56 665.16 808.66 1,473.44 2,062.66 2,916.20
Net Profit after Tax and Provision 98.01 170.48 172.84 270.74 253.56 256.06 294.69 374.20 909.88 1,222.97
Fixed Assets 85.92 78.37 71.13 36.26 48.81 288.02 313.73 790.62 1,300.39 1,708.11
Total Assets 5,962.71 8,336.17 11,710.56 14,468.66 18,882.48 23,135.74 33,744.96 43,294.81 53,706.12 64,370.69
Earning per Share (Tk.) 45.38 56.99 57.61 82.04 69.85 45.38 43.52 35.42 59.71 53.60
Return on Equity (ROE) 41.68% 38.25% 30.58% 35.76% 26.11% 19.69% 17.87% 17.64% 17.98% 19.90%
Return on Asset (ROA) 1.64% 2.05% 1.48% 1.87% 1.34% 1.11% 1.00% 0.86% 1.66% 1.90%
Non Performing Loan 4.25% 3.75% 2.95% 2.78% 1.99% 2.09% 4.96% 4.37% 3.97% 3.77%
Capital Adequacy Ratio 8.16% 9.52% 8.40% 8.77% 8.23% 9.20% 7.83% 6.90% 11.50% 13.00%
Number of Foreign Correspondents 238 253 269 280 295 350 463 507 536 598
Number of Shareholders 27 1129 1266 1429 1666 2912 4704 5750 8,855 9,636
Banking 369 399 445 479 488 586 685 759 845 964
Number of
Employees
Non Banking 78 81 83 96 107 115 150 154 153 152
Number of Branches 12 12 12 13 19 23 27 31 31 38
Annual Report 2007
Board of Directors
Company Secretary
Muhammad Shahjahan
Shariah Council
Chairman
Moulana Md. Aminul Islam
(expired on 19.11.2007, Inna Lillahe...)
Vice Chairman
Professor Moulana Mohammad Salah-Uddin
Members
A. S. M. Fakhrul Ahsan
Alamgir Kabir, FCA
M. A. Kashem
Ragib Ali
Azim Uddin Ahmed
Neaz Ahmed
6 Annual Report 2007
Management Team
Managing Director
Neaz Ahmed
Respected Members of the Board of Directors at the 12th Annual General Meeting held on April 22, 2007.
A partial view of the respected Shareholders at the 12th Annual General Meeting held on April 22, 2007.
Alamgir Kabir, FCA
Chairmans Report
Bismillahir Rahmanir Rahim
Dear Shareholders:
Assalamualikum
I warmly welcome you all to the 13th Annual General Meeting of respected shareholders of Southeast
Bank Limited. I would like to thank you for your continued interest in and support for the Bank. As the
Chairman of the Bank, I would also like to place before you a report on the position of the Bank and its
future prospects.
loan account showed any sign of weakness because of diverse reasons, it was put in the watch-list and
regularly monitored for timely adjustment.
Southeast Bank embarked through the charted course in 2007 to achieve the desired operational
excellence as is evident from the results of the year. Since the process set to achieve budgeted targets was
successfully completed, it ultimately resulted in an excellent set of financial results. Our inspiring earning
of high profit coupled with our qualitative growth initiatives put the Bank on the right course to achieve
further success in coming years.
04. Competitiveness
By Competitiveness, we mean relative position of one competitor against other competitors individually.
It has become a prominent business for us. As a financial institution, we always address our desire to
remain competitive in the economy. We try to acquire and expand ability to deliver quality products and
10 Annual Report 2007
Chairmans Report
Chairmans Report
Chairmans Report
We shall rapidly expand our network of branches and volume of business further in the coming days. We
foresee many opportunities mixed with challenges ahead. We are ideally positioned to harness those
opportunities.
Chairmans Report
17. Acknowledgement
I owe my gratitude to Almighty Allah for the success of the Bank in 2007. I also take this opportunity to
thank the members of the Board of Directors for their collective effort during the year for bringing
qualitative changes in the Bank. I would like to thank the Management Team and Staff members for their
dedication and commitment, without which, the Bank could not maintain the sequence of striving
towards reaching higher echelon of excellence. I respect their inner zeal to work hard to reach newer
heights of success.
My sincerest thanks go to our respected shareholders, valued customers, patrons, well-wishers,
Government of the Peoples Republic of Bangladesh, Bangladesh Bank, Securities and Exchange
Commission, Dhaka Stock Exchange Ltd., Chittagong Stock Exchange Ltd., Registarar of Joint Stock
Companies and Firms and all others concerned for giving us the benefit of their continued support, co-
operation, and guidance. We greatly value their continued support and co-operation which are our
constant source of encouragement. We renew our promise to remain most disciplined, compliant and
result-oriented. While we look forward to their continuous support and co-operation with trust and
confidence, we believe, on present indications and the prospects, our respected shareholders can expect
more satisfactory results in 2008.
While we look hopefully towards a bright and enduring future, we pray to Almighty Allah to bestow His
unbound blessings upon us for continued success.
Allah Hafiz
Sincerely,
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The year 2007 was an eventful year and witnessed many changes in political and business scenario of
Bangladesh. The financial sector also faced many challenges in line with the reforms undertaken by the
Government and other regulatory agencies. The process of liberalization with stringent discipline
continued and banking industry has also been impacted accordingly. Despite natural disasters like floods
and Sidr, the Government and private sectors are putting all out efforts to check the inflationary pressure
and rejuvenate the economy with much needed inputs. Now the outlook is more positive and productive
activities and exports have started to grow in pace and momentum. It is expected that we shall see
adequate credit flows at reduced cost to all productive sectors for realizing the expected increase in
economic activities in future.
The financial statements of the bank that are attached herewith in the Annual Report - 2007 provide a
summary of the last years activity. The numbers are self evident and self explanatory reflecting the banks
excellent state of health. There has been an improvement in credit quality. Our mission is still the same
as in the past to grow to be a bigger, stronger and better bank. We have gradually expanded our network
by establishing new branches in strategic locations and strengthened our overseas connections to a new
height. Our network strength stands at 41 branches and we are likely to add 9 branches this year with
the licence of Bangladesh Bank. The net profit for the year 2007 reached Tk.2,916.20 million posting a
growth of 41.38% over last years net profit. The banks total assets have grown from Tk.53,706.12
million to Tk.64,370.69 million, which accounts for 19.86% increase in a years time. The increase in
market share and profitability bear witness to our ability to compete within a system that is getting more
and more competitive and challenging.
Last year, we progressed well in securing balanced increase in deposit-mix and this, in turn, has become
the basis for strong growth in loans and advances. We have carefully calibrated both assets and liabilities
so that we move in equilibrium. Refinement of tools for managing the various risk profiles and strict
monitoring have enabled us to reduce the level of doubtful loans and lower the amount of provision.
Strong recovery drive throughout the last year has contributed significantly in reducing classified loans to
3.77%. Our treasury team had a very successful year delivering record revenues both from transactions
and trading activities. In remittance business, we have had a record increase of 1,587% over the last five
years, thus, making significant contribution in foreign exchange reserve for the bank. Our export
performance has surpassed our expectation and registered 11.20% increase compared to the year 2006.
Annual Report 2007
The strong upward trend in our business volume has resulted in increase in net interest and fee-based
income. We believe in efficient management which necessarily involve careful supervision and
monitoring of costs and administrative expenses. They have gone up to support large corporate structure
and in establishing new branches. Our new branches will give us not only large footprint but also
milestones on our road to growth. Our future plan is to build direct contact with the most dynamic and
innovative top entrepreneurs and established names in the areas we are located. We want to focus more
on small and medium enterprises locally. Our commitment is to serve our customers at competitive cost.
When I look back, I can say the bank is not only larger but also richer in experience and knowledge
gained of new places and customers and in terms of business opportunities offered by our expanding
economy. Our priority for the year 2008 is to continue with the growth strategy in all areas of business
operations. This will be achieved by being distinctively reinforcing our brand values of trust and integrity
in our dealings with customers. We shall broaden the range of our services and products through
integration of advanced technology. We are already in a very advanced stage of putting a robust core
banking solution in place.
I believe that highly capable and skilled staff members are our greatest asset. We always aim at attracting
talents and retaining efficient employees. We implemented incentive system that is in line with the banks
profitability and the performance of individuals so as to encourage our staff members to dedicate to the
banks objectives. We also attach importance for the training and development of banks staff to enhance
their skill and knowledge.
I should say it again that we are on a right track and we are growing stronger. Our results are impressive
by all standards for the year just concluded. We are pledge-bound to turn Southeast Bank into a modern
banking institution dynamic in actions, progressive in vision, honest in dealings, fair in judgment,
futuristic in attitude, straight 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 the 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
and the Regulatory Authorities.
The Bank conducts its business activities with due respect for existing values and norms and with an
understanding of the importance a large financial institution has for the society and the environment. We
are determined to meet the expectations of our shareholders. We will continue to fulfill our corporate
social responsibility by leveraging the resources in the implementation of new initiatives for the benefit
of the large section of the community. On behalf of the management, I express my gratitude and thanks
to the members of the Board of Directors, all staff, all regulatory agencies, shareholders and valued
customers for their guidance, advice and continued support.
Neaz Ahmed
Managing Director
22 Annual Report 2007
Board's Report
Dear Shareholders
The Board of Directors of Southeast Bank Limited takes the opportunity to welcome you all to the 13th
Annual General Meeting of the Shareholders and has immense pleasure to present before you the 13th
Annual Report of the Bank together with the Auditors Report for the year ended December 31, 2007.
The growth of world trade volume in 2007 was projected to decline to 6.6 percent compared with 9.2
percent in 2006. The growth of exports from both the advanced economies and other emerging markets
and developing countries were projected to decline to 5.4 percent and 9.2 percent respectively in 2007.
The growth of imports for both the advanced economies and other emerging markets and developing
countries were projected to decline in 2007. The U.S. current account deficit was projected to decline to
5.5 percent of GDP in 2007, as it benefited from recent real effective depreciation of the U.S. Dollar.
The Gross Domestic Product grew by 6.5% in FY07, slightly lower than 6.6% in FY06. The real GDP
growth in FY07 took place mainly due to robust growth in service sector and notable expansion in
manufacturing activities. Countrys economic growth was accelerated by reasonable growth of exports
and increased flow of remittances. Export earnings (USD 12,053 million) recorded a growth of 15.8%
while import payments (USD 15,511 million) grew by 16.6%. Remittances (USD 5,979 million) from
Bangladeshi nationals increased substantially by 24.5%. The current account balance exhibited notable
surplus of USD 952 billion in FY07. The industrial sector attained 9.5% growth in FY07, compared with
9.7% of FY06. The service sector contributed 49% of total GDP and grew by 6.7% in FY07, higher than
6.4% recorded in FY06. Domestic savings as a percentage of GDP rose from 20.3% of FY06 to 20.5% in
FY07 whereas domestic investment as a percentage of GDP decreased from 24.7 of FY06 to 24.3 in FY07.
Broad money (M2) growth stood at 17.1% in FY07 lower than 19.3% in FY06. Outstanding Bank Credit
during FY07 rose by 14.7% to Tk.1,651.19 billion as against increase of 20.2% in FY06. Outstanding
Bank Deposit increased by 16.5% to Tk.1969.57 billion during FY07 against 18.5% increase in FY06.
Foreign exchange reserve held by Bangaldesh Bank stood at US$5095.3 million as of Nov. 2007 which
is 44% higher compared to the reserve in the same period of 2006.
Annual Report 2007
Board's Report
The Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) for the scheduled Banks
remained unchanged in FY07 at 5% and 18% respectively of their total demand and time liabilities since
October 01, 2005. The Bank Rate was revised downward from 6 percent to 5 percent on November 06,
2003 and remains unchanged.
Bangladesh Bank continued to pursue restrained monetary policy during 2007 with a view to keeping
inflationary pressure under control while supporting the targeted real GDP growth. Inflation, however,
was on uptrend during 2007 mainly due to rising import prices of fuel oil, metal, foodgrains and some
other essentials in the international market coupled with problems in the domestic supply chains. The
annual rate of inflation (12-month annual average CPI) increased to 8.25% at the end of October 2007
from 6.98% at the end of October 2006. The rate of inflation on point-to-point basis increased to 10.6%
at the end of October 2007 from 7.31% at the end of October 2006.
Southeast Bank Limited, a second generation Private Bank, emerged in 1995. Currently, the Authorized
Capital of the Bank is Tk.3500 million and the Capital and Reserve stand at Tk.6,468.36 million as on
December 31, 2007. 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 almost thirteen years of banking operations recording
significant growth in all the performance indicators. In 2007, the Bank earned an after tax profit of
Tk.1,222.97 million with a deposit growth of 20.45% to Tk.55,474.05 million and advance growth of
17.05% to Tk.48,164.60 million compared to those of 2006. During the last five years (2003-2007) the
Bank achieved an average annual growth of 29.61% in deposit, 30.46% in advances, 71.89% in export
and 25.07% in import. During the last three years period, the export volume increased by four times and
foreign remittance increased by nine times.
Customers are our first priority. High quality customer services through right mindset, integration of latest
and tested banking technology and products are our tools to achieve success. We are trying hard to
evolve into a life-brand touching every aspect of customers life by providing them with 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 premier bank by helping
customers to become financially better off by providing advice, innovative leading-edge financial
solutions, choice and convenience. Whether our customers are individuals, small businessmen, or
commercial clients, we aim to deliver the best customer service by meeting their unique and different
needs in a professional, ethical, friendly and knowledgeable manner.
24 Annual Report 2007
Board's Report
Taka in Million
a) Core Capital (Tier-I Capital):
Paid Up Capital 2,281.76
Share Premium Account 1,056.37
Statutory Reserve 1,544.29
General Reserve 247.65
Retained Earnings 443.78
Total Core Capital 5,573.85
Board's Report
injected into the capital market. Much of the fund in the secondary capital market in
2007 came from institutional investors, such as Banks, Insurance Companies, Mutual
Funds, Foundations, Leasing Companies, Merchant Banks etc. Sizeable amount of
capital fund was also injected in the secondary market from individual investors in the
year.
The demand for quality shares by the investors increased significantly in the countrys
capital market in the year 2007. This created a gap between demand for and supply of
shares in both the bourses of the country. Resultantly, the mismatch between demand
and supply of quality shares in both the bourses of the country ended up in rise of prices
of securities of some companies. To address the situation, the countys only watchdog
for capital market, the Securities and Exchange Commission (SEC), took deterrent
measures in order that the small investors are not subjected to capital loss by unusual
market upheavals and stability in the market is maintained.
b) Number of Shareholders
The rising trend in number of shareholders of the Bank since IPO is continuing and at
the end of the year 2007 the number of shareholders of the Bank stood at 9,636 while
it was 8,855 as on December 31, 2006. It posted an increase in number of shareholders
of the Bank by 8.82%. The rate of increase in the number of shareholders of the Bank
since its listing in the Stock Exchanges in 2000 is shown below:
Board's Report
of Issued Shares and Earning Per Share is being maintained. The Banks positive Earning
Per Share since listing is shown below:
Year Earning Per Share (In Tk.)
2000 57.61
2001 82.04
2002 69.85
2003 45.38
2004 43.52
2005 35.42
2006 59.71 (Diluted)
2007 53.60
Our Banks assets are greater than liabilities with very satisfactory Net Assets Value
(NAV) per share. The NAV of the Bank in 2007 stood at Tk.269.29 while it was
Tk.239.47 in 2006, recording a significant growth of 12.45%. The NAV per share of the
Bank for the last eight years is shown below:
Board's Report
f) Declaration of Dividend
The Bank continuously pursues a stable dividend policy and declares dividends to the
shareholders at a good rate. To cope with the requirement of increased capital of the
Bank with the growth of volume of business, it also issued bonus shares out of the profit
generated by the Bank. The Banks declaration of cash dividend and stock dividend
since 1999 is given below:
Year Cash Dividend Stock Dividend Total
1999 15% 15%
2000 25% 10% 35%
2001 30% 10% 40%
2002 20% 10% 30%
2003 20% 20% 40%
2004 - 30% 30%
2005 - 20% 20%
2006 20% 8% 28%
2007 15% 25% 40%
g) Month-wise market price and total market turnover of Southeast Bank Shares
In the year 2007, trading of our shares took place on Dhaka Stock Exchange for 236
days and on Chittagong Stock Exchange for 237 days. On the basis of closing trading
price as on December 30, 2007, the market capitalization of our shares stood at
Tk.13,080.18 million in DSE and Tk.13,137 million in CSE. Month-wise high, low and
market turnover of traded shares of our Bank in the year 2007 in DSE and CSE are given
below:
The Bank so far issued 1,22,13,696 Rights Shares to the shareholders since its inception
to raise the capital base of the Bank. Out of these, 1,05,63,696 Rights Shares were
issued in 2006 to the shareholders at the ratio of 1:1 at issue price of Tk.200/- each with
a premium of Tk.100/- per share and 16,50,000 Rights Shares were issued to the
shareholders at par at the ratio of 1R:2 in the year 2003.
28 Annual Report 2007
Board's Report
08. Deposits
The Banks deposit stood Tk.55,474.05 million as on December, 2007 compared to
Tk.46,056.18 million in 2006, thus, recording 20.45% growth. Competitive interest
rates, attractive deposit products, deposit mobilization efforts of the Bank and
confidence reposed by the customers in the Bank contributed to the notable growth in
deposits. The Bank evolved a number of attractive Deposit Schemes to cater to the
requirement of small and medium savers. This improved not only the quantum of
deposits but also brought about qualitative changes in deposits structure. The deposit-
mix of the Bank as on December 31, 2007 was as follows:
Taka in Million Share in
Total Deposits
a) Current and Other Deposits 3,939.80 7.10%
b) Savings Bank Deposits 3,433.49 6.19%
c) Short Term Deposits 3,988.75 7.19%
d) Fixed Deposits or Term Deposits 40,368.38 72.77%
e) Deposits under different Deposit Schemes 3,055.35 5.51%
f) Bills Payable Accounts 688.28 1.24%
Total: 55,474.05 100%
Board's Report
Board's Report
17. Investment
The investment portfolio of the Bank during the year 2007 was Tk.8,462.86 million
against Tk.6,265.55 million in the previous year registering a growth of 35.07%. The
portfolio of investment includes Government Treasury Bills, Prize Bonds, Shares of
Publicly Listed Companies, etc. The Bank always gives emphasis on investment of funds
in higher yield areas simultaneously maintaining Statutory Liquidity Requirements (SLR)
as fixed by Bangladesh Bank.
Import Trade
As on December 2007, the Bank has handled Import business for Tk.38,470.34 million
(Equivalent to USD 557.50 Million) which is 9.52% higher than the import of
Tk.35,125.12 million handled by the Bank in 2006. Capital Machineries for export
oriented Garments Industries, Scrap Vessel, Vegetable Oil, Raw Cotton and Flat Rolled
Steel were the major import items in 2007.
Import Figures of the Bank for the last 5 years are shown below:
Year Import volume in eqvt. Import volume in eqvt. Growth rate
US Dollars (in million) Taka (In million)
2003 250.32 16,270.80 --
2004 306.51 20,229.62 24.33%
2005 421.44 29,079.30 43.75%
2006 501.79 35,125.12 20.79%
2007 557.50 38,470.34 9.52%
Annual Report 2007
Board's Report
Export Trade
Since 2003, the Bank has seen a dramatic upsurge in Export Sector performance due to
Managements desire to make this as a priority sector. In 2007, the total export of the
Bank was Tk.28,771.36 million (equivalent to USD 423.10 million) which is 11.20%
higher than the export of Tk.25,874.61 million handled by the Bank in 2006. The
export figure in 2007 increased by four times over the last three years. Our export items
include Readymade Garments, Raw Jute, Jute goods, Fish, Vegetables and other
Agricultural Products.
Board's Report
21. SWIFT
Southeast Bank is an active member of SWIFT user Group in Bangladesh and was one
of the Pioneer Banks to have 24 hours on-line SWIFT Connectivity in the country. At
present all of our Authorized Dealer Branches are connected to SWIFT. Our SWIFT
team has been putting relentless efforts for continuous upgrading of SWIFT as and when
any new features are introduced globally. The Banks SWIFT team plays an effective
role among SWIFT User Group Member Banks in Bangladesh.
Board's Report
Recent Initiatives
The Bank has recently introduced SMS Banking for its valued clients allowing them to
avail selected banking services e.g. Account balance, last 3 transactions, stop payment,
fund transfer, utility bill payment etc over their Mobile Phone(s) using SMS (Short
Message Service) while roaming. The Bank has also deployed well tested and very
reliable Anti-virus Software like eScan and eTrust to protect and secure the core
Network and automated banking operations. In line with Central Bank directives, the
Bank has redrawn its own Information and Communication Technology (ICT) Policies
for different operations and services offered. The Bank has already established a
Disaster Recovery (DR) site for its Network at Banani Branch which will act as fallback
connectivity when Data Center is down. There is an ongoing project for adoption of
MICR (Magnetic Ink Character Recognition) automated clearing system initiated by
Bangladesh Bank. The Bank has also joined the Cash Link Bangladesh Ltd.,- a Joint
Venture company as equity partner to form national and international payment gateway
for debit card and to facilitate electronic fund payments across the globe.
Board's Report
on unclassified loans and advances. The operating profit of the Bank during the year
2006 was Tk.2,062.66 million achieving 41.38% growth. The provision for income tax
for the year amounted to Tk.1,374.07 million and divisible profit available for
Alamgir Kabir, FCA, Chairman is appropriation amounted to Tk.443.78 million.
seen handing over a cheque for
Tk.50.00 lac to the Chief Advisor on 26. Budget and Budgetary Control
August 13,2007 for relief operation
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, business etc. from the Branches. The draft budget estimates are
then prepared by the Head Office Management and reviewed / finalized in the
Business Policy and Managers Conference. After approval in the meeting of the
Board of Directors, Banks budget is implemented. The Bank Management puts constant
efforts throughout the year for achievement of the budget. It periodically reviews the
variances and the progress towards achievement of the budgetary goals.
Interest Income
During the year 2007, interest income of the Bank was Tk.6,408.96 million as against
Tk.5,107.78 million of the previous year, thus, recording a growth of 25.47%. The
income growth generated mainly from Loans and Advances which remained the
principal contributor.
Interest Expenses
Total interest expenses in 2007 was Tk.4,852.50 million as against Tk.4,044.63 million
of 2006 posting an increase of 19.97%.
Investment Income
s In 2007, Banks income from investment was Tk.956.80 million as compared to
Signing Ceremony of Global Trade
Finance Program (GTFP) with Tk.439.22 million of the previous year. Income increased by Tk.517.58 million
International Finance Corporation registering a growth of 117.84%. Investment income consists of interest earned on
(IFC) held on April 23, 2007 treasury bills and bonds and dividend received on shares.
Other Income
In the year under review, commission, exchange and brokerage earnings increased to
Tk.1,159.02 million from Tk.1,084.18 million in 2006, showing an increase of 6.90%.
This was due to enhanced trade related and fee-based activity.
Operating Expenses
In the year under review, total operating expenses stood at Tk.901.77 million as against
Tk.658.82 million of the previous year, thus, registering an increase of 36.88%.
Board's Report
Net profit of the Bank after tax stood at Tk.1,222.97 million in 2007 as against
Tk.909.88 million of the previous year, thus, posting an increase of 34.41%. Alamgir Kabir, FCA, Chairman
handing over a cheque for Tk.5
on 29.11.2007 to the Army Rel
30. Statutory Reserve for Cyclone-SIDR
The Bank transferred Tk.519.41 million to statutory reserve as 20% of the profit after
provisions before tax and dividend during the year as per Section 24 of the Bank
Company Act, 1991. The total amount of Statutory Reserve stood at Tk.1,544.29 million
including the amount transferred in 2007.
The Bank focuses on customer friendly marketing approaches, mobilizes resources and
caters to the ever-growing financing needs of clientele by offering best competitive rates
through diverse financial products and services. Our marketing strategy is to provide
total solutions to the customer needs by constantly evaluating existing service standard
to bring dynamism and improvement in customer service. The Bank has introduced
relationship banking in asset and liability marketing with a view to providing efficient
personalized services to the target market through product diversification. The Bank has
been widely acclaimed by the business community ranging from small entrepreneurs to
large business houses and industrial conglomerates, multinationals etc. for possessing
visionary business outlook and offering innovative financial solutions to customers. The
Bank brought world class banking to clients doorstep by launching Real Time On Line
Any Branch Banking Service-using satellite based modern VSAT technology.
Customer care remains in our clear focus. We frequently visit our customers to listen to
their problems and thereby provide solutions immediately. Special counters are opened
to meet the growing demands of customers during heavy customer flow, especially
during IPO, bill collection, Eid etc. In order to give easy access to our products and to
give best possible services to the customers, the Bank offers personalized services by
recruiting highly exprienced and customer focused professionals. In order to provide
full support and high quality service, a Complaint Cell has been kept functional to
address customers issues with priority. Customers, in a nutshell, are the prime priority
Neaz Ahmed, Managing Dir
for the Bank and the company philosophy is to satisfy clients who act as ambassadors the Bank, is seen handing
of the Bank for its image building. cheque for Tk.25.00 lac
hillslide victims of Chi
In order to consolidate the existing position and cope with the ever increasing growth
potentials, the Bank focuses on making continuous investment in Research and
Development (R&D) and Training to optimize operational efficiency. The Banks
human resources policy is to build up quality workforce with skills and professional
expertise. In implementation of the human resources development strategy, the Bank
established a Training Institute in 2005 at the 4th floor of Head Office premises with the
vision to build up professionals with technical, human and conceptual skills. The
Institute is focused to ensure a formal platform where employees can exchange free
ideas, update knowledge base and open up their eyes to the complexities of banking
world. The objectives of designing all training programs are to bridge the gap between
present level of competence and desired level of competence of human resources.
36 Annual Report 2007
Board's Report
During the year 2007, the Southeast Bank Training Institute (SEBTI) arranged a total of
31 training courses, seminars and workshops with 1,066 participants. The particulars of
Alamgir Kabir, FCA, Chairman is seen internal trainings conducted in 2007 are as under:
handing over a cheque for Tk. 50.00
lac to the Chief Advisor on December Training Course/Workshop/Seminars Frequency Number of
03, 2007 for relief operations amongst
Cyclone-hit people
Participants
1. Foundation Training Course 03 77
2. Credit Risk Management (CRM) 01 35
3. Credit Risk Grading 02 70
4. Asset Liability Management 01 38
5. Foreign Exchange Risk (UCP 600) 01 45
6. Internal Control and Compliance 01 39
7. Anti-Money Laundering 12 441
8. New Capital Accord (Basel-II) 01 45
9. Credit Card Operation 01 32
10. Credit Information Method in CIB Form 01 29
11. Awareness on Cash Management 01 33
12. SBS 1, 2, & 3 01 35
13. SWIFT Operations 01 34
14. HO General A/C Reconciliation 01 27
15. Other Banking Related Trainings 03 86
Total 31 1,066
The Bank also set up an IT Training Institute in 2005 at the 4th floor of Head Office
premises and conducted 6 Training Courses in 2007 with 144 participants to enhance
IT knowledge base of employees and prepare them for the rapid technological changes.
Besides internal training, the Bank sent a total of 164 executives and officers in different
external training courses both at home and abroad. The particulars of participants in
external training courses in 2007 are as follows:
Board's Report
Board's Report
The Bank recruited skilled and experienced bankers and established Islamic Banking
Wing at Head Office to run the Islamic Banking operations smoothly and strictly based
on shariah principles. A separate set of accounts is being maintained by the Bank for
A partial view of an under
construction Medical College Islamic Banking Branches. Under the guidance of Shariah Council, the Bank designed
& Hospital building under all deposits, investments products and services of the Islamic Banking Branches and
Bank's finance
formulated policy guidelines and working procedure. The Bank obtained membership
of the Central Shariah Board of Islamic Banks of Bangladesh and the Islamic Banks
Consultative Forum. The Bank also maintains close relationship with Islamic Banks in
Bangladesh and abroad.
As on December 31, 2007, the deposits and investments of Islamic Branches were
Tk.5592.69 million and Tk.2053.71 million showing an annual growth of 37.55% and
45.06% respectively. In 2007, total import and export business handled by the Islamic
Banking branches of the Bank were Tk.781.97 million and Tk.440.65 million
respectively recording significant growths. Non-Performing Asset of Islamic branches
was 0.0040% of total investment as on 31st December, 2007.
The Bank started issuance of Visa Credit Card in early 2005 along with five major
competitors in this business. Currently, there are as many as twelve card issuing Banks
and many more Banks are planning to enter the market. At this stage, we are
experiencing fierce competition. In consequence, charges and fees have come under
pressure resulting in low profit margin. In 2007, we have made an operating income of
Tk.54.30 million with an average monthly income of Tk.4.53 million. We have issued
7450 Cards up to 31st December, 2007. The Bank registered growth of 24.17% in
marketing cards and 31.16% in income during the year under review.
Despite sharp competition among competitors, our challenge is not only to retain the
market share but also to increase the card base. While issuing new cards, we exercise
due diligence and put in conscious efforts in selecting cardholders. Besides, we have
launched a few campaigns with attractive offers which included reduced card fee and
s cash refund on purchase to create impact in the market. Such campaigns were also
A Knitwear Industry financed by aimed at building fair image of the Bank.
the Bank is in operation
In order to bring diversification in the card business, we are planning to launch some
new products in the near future. We have already introduced SMS Push-Pull service to
trigger transaction alert, balance enquiry and other status of card accounts. We shall
soon launch Card Cheque facility to remain competitive with other major players in the
industry.
The Bank is presently operating with 41 branches including 5 Islamic Banking branches
and 9 rural branches located at important business centers of the country. The Bank has
achived the highest per branch profit in 2007. To cater to the increasing demand of the
clientele, the Bank plans to open 9 (nine) more branches in 2008 in important business
hubs including non-urban growth centers to contribute to expansion of trade,
commerce and industries subject to obtaining licence from Bangladesh Bank.
Annual Report 2007
Board's Report
Board's Report
One of the basic policies of the Bank is to strengthen its corporate governance status by
Neaz Ahmed, Managing Director establishing responsible management system and strengthening supervision. Efforts are
is seen addressing the workshop also being geared up to improve the transparency and accountability of the
on Basel-II participated by all
Heads of Branches
management. While putting efforts to achieve corporate objectives, Southeast Bank
gives top priority to establishing corporate governance standard at all levels and in all
units.
In corporate governance, the Bank complies with the principles enunciated in BRPD
Circular No. 11 dated November 05, 2007 of Bangladesh Bank regarding the
composition of the Board of Directors, term of office of the Director, and competence
and eligibility of the Director. The Bank is also implementing the requirements
contained in Securities and Exchange Commission Notification No.
SEC/CMRRCD/2006-158/Admin/02-08 dated February 20, 2006. A brief report about
corporate governance scenario of Southeast Bank Limited is given at the page 60.
In the 12th Annul General Meeting of the Bank, M/S Hoda Vasi Chowdhury and Co.
was appointed External Auditors of the Bank for the term till conclusion of the next
Annual General Meeting. They are eligiable for re-appointment as External Auditors by
the shareholders in the 13th Annual General Meeting.
43. Dividend
The Bank focuses on the principles of sharing good achievements with the respected
Shareholders. Accordingly, the Board of Directors recommends 15% Cash Dividend
and 25% Stock Dividend (Bonus Share) in 2007. The Banks priority is to increase
shareholders value by enhancing the overall earnings of the Bank.
Section 15KAKA of the Bank Company Act-1991 has been replaced by Bank Company
(Amendment) Ordinance-2007 dated October 08, 2007.
s
A Composite Knit Industry
financed by the Bank
Amended Section 15KAKA of the Act provides that whatever provision made in any
other law or in the Memorandum or Articles of Association of the Bank Company, the
term of office of a Bank Director shall be 3 (three) years and no Director shall remain
in office in 2 (two) consecutive terms for 6 (six) years.
As per provision of Section 15KAKA of the Bank Company Act, the following Directors
shall retire in the 13th Annual General Meeting of the Bank and are eligible for re-
election for the second term in the same Annual General Meeting.
1. Tillaghar Holdings Limited
2. Mr. Alamgir Kabir, FCA
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 2007 is given at page 68 of this Annual Report.
Annual Report 2007
Board's Report
46. Acknowledgement
The Board expresses gratitude to the Almighty Allah for the grand success of the Bank
Neaz Ahmed, Managing D
in 2007. The Board extends thanks to the valued customers, patrons and well-wishers is seen with the Executi
for their continued support and co-operation to the Bank. The Board also places on Officers who receiv
rewards for deposit mobiliz
record its high appreciation for the Managing Director, all Executives and other
the Bank's get togother Par
members of the Staff for their dedicated services to the Bank. The Board offers thanks to
the Government of Bangladesh, Bangladesh Bank, Securities and Exchange
Commission, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited
and Registrar of Joint Stock Companies and Firms for their appreciable support and co-
operation to the Bank. The Board also expresses its appreciation to M/S. Huda Vasi
Chowdhury & Co., the Auditors of the Bank, for their efforts for timely completion of
Audit and preparation of Financial Statements. The Board of Directors also thanks both
the print and electronic media personnels for giving media coverage to Banks different
activities.
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.
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Annual Report 2007
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xPTJYjoNuT oNhsJjLKf Imuj TPrPZ @\tJKfT mJ\JPr \JuJjL fu, iJfm keq, UJhqvxq Fm KTZ Kjfq kP~J\jL~
hsmqoNPuqr CtVKf Fm hvL~ pJVJPj xoxqJr TJrPe 2007 xPj oNhsJLKfr CtVKf kKruKf y~ 2006 xJPur
IPJmPr oNhsJLKf KZu 6.98 vfJv pJ 2007 xJPu mPz 8.25 vfJv yP~PZ kP~ a kP~ KnKPf oNhsJLKf 2007
xJPur IPJmr jJVJh mPzPZ 10.6 vfJv pJ 2006 xJPu KZu 7.31 vfJv
APfJoPiq mqJT xTu TJptxNYPT kmOK I\tj Trf: kJ~ 13 mZr pJm mqJKT TJpto xlufJr xJPg kKrYJujJ TPr
@xPZ 2007 xJPu mqJPTr Tr krmftL oMjJlJr kKroJe 1,222.97 KoKu~j aJTJ @PuJYq mZPr mqJPTr @oJjf 2006
Fr fujJ~ 20.45% mOK kP~ 55,474.05 KoKu~j aJTJ~ Fm IVLo 17.05% mOK kP~ 48,164.60 KoKu~j aJTJ~
CjLf yP~PZ KmVf 5 mZPr (2003-2007) mqJT @oJjPf 29.61%, IVLPo 30.46%, rJjLPf 71.89% Fm
@ohJKjPf 25.07% Vz kmOK I\tj TPr KmVf 3 mZPr rJjLr kKroJe mPzPZ 4 (YJr) e Fm mPhKvT rKoPaPr
kKroJe mPzPZ 9 (j~) e
CTwtfJr @PuJPT TJpto kKrYJujJ Fm eVfoJPjr Cj~j mqJPTr KjTa xmtJKiT fkNet Kmw~ 31v KcPxr
2007 A fJKrU kpt xoV hv\MPz mqJPTr 38Ka vJUJ KZu nKmwqPf vJUJr xUqJ @rS mOKr kKrTjJ Vye TrJ
yP~PZ CxJy-CLkjJ Fm TotPhqJPor xJPg IKiTfr xJluq I\tPj @oJPhr kPYJ ImqJyf rP~PZ oMjJlJ I\tPjr fLms
kKfPpJKVfJ oJTJPmuJ~ @orJ @oJPhr h S IKn \jvKr Ckr Kjntr TKr @oJPhr vK yP VJyTPhr xJPg WKj
S yhqfJkNet IvLhJKrf, hPvr mqmxJK~T S mJKeK\qTnJPm fkNet JjxoNPy @oJPhr hO| ImJj Fm mPhKvT mJKe\q
mOK TP @\tJKfTnJPm UqJf mqJPTr xJPg TPrxkjP mqJKT xTt kYKuf Ee S mPhKvT mJKe\q xJ
xmJxoNy ZJzJS @oJPhr IjqJjq xmJ keqPuJ yP Real Time On-Line Any Branch Banking, AxuJoL mqJKT,
IJKvT oJPYt mqJKT, f oMhsJr KnxJ Kca TJct, FKaFo, KvJ Ee kT, Ke mOK kT, nJJ Ee, FxFoA
mqJKT, TPktJPra mqJKT, KxKPTa Ee, oJKxT x~ kT, oJKxT oMjJlJ kT, kjvj x~ kT, SP~\ @jtJr kjvj
Ko Fm FxFoFx mqJKT AfqJKh
VJyTrJA yP @oJPhr kiJj IVJKiTJr pgJgt oJjKxTfJ, IfqJiMKjT S krLKf mqJKT kpMK Fm xmJ keqxoNPyr
xoKjf mqmyJPrr oJiqPo Cjf VJyT xmJ khJj TrJA yP @oJPhr xlufJr oNu YJKmTJKb VJyTPhr \LmPjr kKfKa
P @KrT mqJKT xmJ kRPZ KhPf @orJ TPbJr kKrvso TPr pJK VJyTPhr @KgtT YJKyhJxoNy kNrPe @oJPhr
TotLmJKyjL jfj kpMK @ TrJxy VJyT CkPpJVL xmJkPeqr Jj mOK Fm VJyT xmJr hfJ~ jfj oJJ pJV
TPrPZ VJyTPhr kP~J\jL~ krJovt khJj Fm xOKvLu @KgtT YJKyhJr kZjL~ Fm JYZqkNet xoJiJj khJPjr oJiqPo
@orJ vsf I\tPj KmvJxL @orJ kvJVf, jqJ~KnKT, mMmxu Fm Jj-Kjntr @YrPer oJiqPo @oJPhr mJKeK\qT
S Mhs mqmxJ~Lxy xTu kptJP~r VJyTPhr xPmtJo VJyT xmJ khJj TPr gJKT
44 Annual Report 2007
KoKu~j aJTJ v~Jr oJPTtPa xJuj TPr F mZr xPTJrL v~JrmJ\JPrr fyKmPur mOyr Iv @Px
mqJT, mLoJ TJJjL, KoCY~Ju lJ, lJCPvj, KuK\ TJJjL, oJPYt mqJT knOKf kJKfJKjT
v~JrPyJflJrPhr TJZ gPT xJiJre v~JrPyJflJrPhr TJZ gPTS xPTJrL oJPTtPa CPuUPpJVq
kKroJe fyKmu kMK\mJ\JPr xJKuf y~
2007 xJPu kMK \mJ\JPr KmKjP~JVTJrLPhr oPiq nJu oJPjr v~JPrr YJKyhJr TJrPe hPvr v~JrmJ\Jr
CPrJr CjKf uJn TPr Fr lPu hPvr Cn~ v~JrmJ\JPr v~JPrr YJKyhJ S pJVJPjr oPiq FTKa
xJoxqyLjfJ kKruKf y~ nJu oJPjr v~JPrr YJKyhJ S pJVJPjr F xJoxqyLjfJr lPu hPvr
Cn~ v~JrmJ\JPr KTZ TJJjLr v~JPrr IJnJKmT oNuqLKf kKruKf y~ F kKrKKf
kptJPuJYjJ TPr hPvr FToJ kMK\mJ\Jr Kj~T xJ, KxKTCKrKa\ F FPY TKovj, Mhs
KmKjP~JVTJrLPhr oNuij yJrJPjJr of IjJTJKf kKrKKf oJTJPmuJ TrPf Fm v~JrmJ\Jr
JnJKmT rJUPf kP~J\jL~ khPk Vye TPr
U) v~JrPyJflJr xUqJ
kJgKoT VekJm gPT TPr mqJPTr v~JrPyJflJr xUqJ mOKr iJrJ ImqJyf rP~PZ, 2007 xJPur
vPw mqJPTr v~JrPyJflJPrr xUqJ hJzJ~ 9,636 \j, 2006 xPjr 31 v KcPxr fJKrPU pJr xUJ
KZu 8,855 \j v~JrPyJflJr xUqJ~ kmOKr yJr 8.82% v~JrmJ\JPr fJKuTJnNKr xo~ gPT
TPr mqJPTr v~JrPyJflJr xUqJ mOKr yJr jLPY hS~J yu
mZr v~JrPyJflJr mOKr yJr
2000 1,266
2001 1,429 12.88%
2002 1,666 16.59%
2003 2,912 74.79%
2004 4,704 61.54%
2005 5,750 22.24%
2006 8,855 54.00%
2007 9,636 8.82%
V) v~JrkKf ijJT @~
2007 xJPur vPw @oJPhr mqJPTr xJiJre v~JPrr xUqJ hJzJ~ 2,28,17,583 dJTJ S YVJo
T FPYP~ 2000 xJPu fJKuTJnN yS~Jr xoP~ Fr kKroJe KZu 30,00,000 KmVf
mZrPuJPf 1,98,17,583Ka v~Jr mJjJx S rJAa @TJPr Pv~JrPyJflJrPhr oPiq mj TrJ yP~PZ
pJr lPu mqJPTr xJiJre v~Jr xUqJ 660 vfJv mOK kP~PZ PpPyf @orJ Kfj mZr pJm
iJrJmJKyTnJPm kYr oMjJlJ I\tj TPrKZ xPyf IKiTyJPr mJjJx v~Jr mj Fm v~JrkKf @P~r
46 Annual Report 2007
oPiq FTKa xMxoj~ m\J~ rP~PZ v~Jr mJ\JPr fJKuTJnNKr xo~ yPf mqJPTr v~JrkKf ijJT
@P~r fgq jLPY hUJPjJ yu-
mZr v~Jr kKf @~
2000 57.61
2001 82.04
2002 69.85
2003 45.38
2004 43.52
2005 35.42
2006 59.71 (xoKjf)
2007 53.60
08. @oJjf :
mqJT 31v KcPxr 2007 kpt 55,474.05 KoKu~j aJTJ @oJjf xVy TPrPZ pJ 2006 xJPu KZu
46,056.18 KoKu~j aJTJ F xoP~ @oJjPf kmOKr yJr 20.45% kKfPpJVLfJoNuT xMPhr yJr,
@TwteL~ @oJjf keqxoNy mqJPTr @oJjf xVPyr TJptTr kPYJ Fm mqJPTr Ckr VJyTPhr
@JA @oJjPfr F CPuUPpJVq IVVKfPf ImhJj rPUPZ mqJT hs S oJ^JKr x~TJrLPhr \jq
mv KTZ @TwteL~ x~ kT YJuM TPrPZ x~ kTxoNy iM @oJjPfr kKroJe mOK TPrKj
@oJjPfr eVf oJPjrS kKrmftj WKaP~PZ 31Pv KcPxr 2007 fJKrPU mqJPTr @oJjf Kovse
KZu Kjk :
KoKu~j aJTJ oJa @oJjPfr Iv
T) YuKf S IjqJjq @oJjf 3,939.80 7.10%
U) x~L @oJjf 3,433.49 6.19%
V) o~JhL @oJjf 3,988.75 7.19%
W) J~L mJ o~JhL @oJjf 40,368.38 72.77%
X) KmKnj kTPr @SfJ~ xVOyLf @oJjf 3,055.35 5.51%
Y) kPh~ KmPur KyxJm UJPf 688.28 1.24%
oJa : 55,474.05 100%
09. Ee S IVLo
hPvr xJKmtT IgtQjKfT, xJoJK\T S rJ\QjKfT kKrKKf KmPmYjJ TPr xJCgA mqJT 2007 xJPu
EehJj P kKrKof @TJPr kmOKr kKrTjJ Vye TPr 31 v KcPxr 2007 xJPu mqJPTr oJa
Ee S IVLPor kKroJe kNPmtr mZPrr 41,147.28 KoKu~j aJTJ gPT mOK kP~ 48,164.60 KoKu~j
aJTJ~ CjLf yS~J~ 2007 xJPu EPer kKroJe 17.05% mOK kP~PZ 2007 xPj mqJT hPvr @gt
xJoJK\T ImJ KmPmYjJ TPr S xrTJPrr jLKfr xP xKf rPU TKw P Ee kmOKr Ckr f
h~ FmZr mqJT xrJxKr Fm kPrJnJPm FjK\Sr oJiqPo VJoLe vJUJxoNy gPT kJ~ 151.00
KoKu~j aJTJr TKw Ee Kmfre TPr
mqJPTr KmfreTf Ee S IVLo KZu KmKmioMUL pJ frL kJwJT Kv, aaJAu S KKj Kv,
aKuPpJVJPpJV, Hwi Kv, AJf S kPTRvu Kv, \JyJ\ nJJ, KxPo Kv, KrP~u FPa, nJ\q
fu Kv, KvJ Fm kKrmyjxy KmKnj UJPf xMwonJPm Kmjq FZJzJS, mqJT Fx,Fo,A, Kca S
Tj\MqoJr Kca LPor oJiqPo hs CPhqJJ IgtJ~j kT YJuM TPrPZ Fm hKrhs \jPVJKr CjKfTP
mv KTZ FjK\SPT IgtJ~j TPrPZ
mqJT FKcKmr kNe:IgtJ~j xMKmiJr KmkrLPf kJKrf kJTKfT VqJx TJ Ku: (@rKkK\KxFu) TftOT
VOyLf dJTJ KTj lP~u kP\Pr @SfJ~ KxFjK\ YJKuf mJx S KlKu vPj IgtJ~j TrPZ Ee oMrL
Annual Report 2007
kK~J~ pgJpg ^KT KmPvwe S fKz KxJ VyPer xMKmiJPgt kiJj TJptJuP~r Ee KmnJPV VJPotx
ACKja, KxKPTvj ACKja, kT Ee ACKja, hs S nJJ Ee ACKja AfqJKh kOgTnJPm TJ\ TPr
pJP xKf mJuJPhv mqJPTr kMj:IgtJ~Pjr KmkrLPf @P~r VJyTPhr VOyKjotJPe Ee khJPjr
\jq FTKa LoS YJuM TPrPZ
xPhr CoJj m\J~ rJUJr \jq @orJ xPY rP~KZ @oJPhr VJyTPhr xPJw\jT mqmxJK~T
ujPhj S xy\JoJjPfr Ckr f khJPjr kJvJkJKv kh EPer vseLTf yS~Jr kmefJ ysJx TrJr
\jq Ee fhJrKT TJpto \JrhJr TrJ yP~PZ mqJPTr vseLTf EPer yJr KmVf mZPrr 3.97%
gPT 2007 xJPu ysJx kP~ 3.77% F hJKzP~PZ
10. kKrYJuT Ee
2007 xPj mqJPTr kKrYJuTPhr mqJT gPT TJj jfj Ee khJj TrJ y~Kj
13. nJJEe kT
nJJEe kT xJCgA mqJPTr FTKa xmJ keq pJ nJJ xJiJrPer VOyJuL kPeqr YJKyhJ kNrPe
xyJ~fJ TPr nJJxJiJrePT Ee khJj frJKjf TrJr uPq mqJT kiJj TJptJuP~ kOgT FTKa
Tj\MqoJr Kca Lo (KxKxFx) xu Vbj TPrPZ 2007 xJPu mqJPTr IVJKiTJr KZu IjJhJ~L
KxKxFx Ee @hJ~ TrJ luvsKfPf, mqJT xPJw\jT yJPr KxKxFx Ee @hJ~ TrPf xo y~
InqrLe TRvPur Ckr KnK TPr KmhqoJj xTt m\J~ rPU fJPhrPT @KgtT xJyJpq khJj TrJ y~
xJoKT IgtjLKfr oRKuT Jj xj mqmJkjJ Tftk TPktJPra VJyTPhr \jq CkpM @KgtT
keqxoNPyr xMkJKrv TPr gJPT mqJT Kj\ IgtJ~j IgmJ KxKPTPca / TJm IgtJ~Pjr oJiqPo
TPktJPra VJyTPhr @KgtT xMKmiJ khJj TPr gJPT mqJPTr TPktJPra KmKjP~JV, hLwt o~JhL kKrTjJ
Fm @gt-xJoJK\T ImJ KmPmYjJ~ KmKnj irPjr mqmxJ~ / KvP UJfS~JrL xMwo mPjr oJiqPo
xMKmjq
17. KmKjP~JV
mqJPTr KmKjP~JPVr kKroJe 2006 xPjr 6,265.55 KoKu~j aJTJ gPT vfTrJ 35.07 nJV yJPr
mPz @PuJYq 2007 @KgtT mZPr 8,462.86 KoKu~j aJTJ~ CkjLf y~ KmKjP~JV oJiqoPuJPf
ItnN KZu xrTJrL as\JrL Kmu, kJA\ m, kJmKuT KuKoPac TJJjLr v~Jr AfqJKh mqJT xmthJ
C oMjJlJ xjUJPf KmKjP~JV Fm mJuJPhv mqJT TftOT KjitJKrf pMVk KmKim fJruq IjMkJf
(SLR) m\J~ rJUJr Ckr IKiTfr fJPrJk TPr
@ohJKj mJKe\q
mqJT F mZr oJa 38,470.34 KoKu~j aJTJr (557.50 KoKu~j oJKTtj cuJr) @ohJKj mJKe\q
xJhj TPrPZ pJ 2006 xJPur 35,125.12 KoKu~j aJTJr fujJ~ 9.52% mvL 2007 xJPu
CPuUPpJVq @ohJKj kPjqr oPiq rJjLoNUL kJwJT KvPr oNuijL pkJKf, kMrJfj xJoMKhsT \JyJ\,
nJ\q fu, fuJ S Ku Kva kiJj
mqJPTr KmVf 5 (kJY) mZPrr @ohJKj mJKeP\qr kKroJe Kjok:
rJjL mJKe\q
rJjL mJKe\qPT hPvr IVJKiTJr UJf KmPmYjJTrf mqJT 2003 xJu yPf F UJPf knNf xJluq
I\tj TrPf xo yP~PZ 2007 xJPu mqJT xmtPoJa 28,771.36 KoKu~j aJTJ (423.10 KoKu~j
oJKTtj cuJr) rJjL mJKe\q xJhj TPrPZ pJ 2006 xJPur 25,874.61 KoKu~j aJTJr fujJ~
11.20% mvL mqJPTr rJjL mJKe\q KmVf Kfj mZPr YJre mOK kP~PZ CPuUPpJVq rJjL
keqPuJr oPiq fKr kJvJT, TJYJ kJa, kJa\Jfhsmq, oxq, vJT -xm&K\ S IjqJjq TKw\Jf keq
kiJj
mqJPTr KmVf 5 (kJY) mZPrr rJjL mJKeP\qr kKroJe Kjok:
hvmqJkL KmOf jaS~JtT TJptoPT KjrJkh S xMKjKf rJUJr \jq mqJT krLKf S eVf oJjxoO
FqJK nJArJx xla&S~Jr (escan & etrust) APfJoPiqA Jkj TPrPZ TsL~ mqJPTr KjPhtvJmuLr
xoj~ xJiPjr uPq mqJT Kj\ fgq kpMK jLKfoJuJ YJuM TPrPZ cJaJ xJPrr jaS~JTt TJpto
kMjJPrr \jq KmT mqmJ KyPxPm mqJPTr mjJjL vJUJ~ FTKa Kmkpt~TJuLj TJpto kKrYJujJ Ts
(DR Site) Jkj TrJ yP~PZ mJuJPhv mqJPTr Fo@AKx@r (MICR) xJ ~K~ KT~JKr
mqmJ kmftPjr \jq xJCgA mqJT FTKa IfqJmvqT TotxNYL yJPf KjP~PZ
cKma TJct Fm APuTasKjT kPo KxPPor oJiqPo xoV KmvmqJkL uj-hPjr xMKmiJPgt \JfL~ S
IJ\tJKfT xPpJV JkPjr uPq xJCgA mqJT pRg CPhqJPV kKfKf TqJvKuT mJuJPhv-Fr
xJPg IKvhJrLr vftJiLPj ATqAKa kJatjJr KyPxPm IvVye TPrPZ
YJKyhJ xJKmtTnJPm xoJiJj TrJA @oJPhr mJ\Jr TRvPur oNu uq fJA FTKa VKfvLu Fm Cjf VJyT xmJ KjKf TrJr
\jq @orJ xJmtKeTnJPm xmJr oJj oNuqJ~j TPr gJKT KmKnj rTo kPeqr oJiqPo h yJPf VJyTPhr TJKf xmJ khJj
TrJr \jq @orJ xh S hJ~ mJ\Jr\JfTrPer P KrPuvjKvk mqJKT YJuM TPrKZ mqmxJK~T hNrhOK Fm VJyTPhr
Kjfqjfj mqmxJK~T xoJiJPjr \jq @orJ mqmxJ~L xoJP\ mqJkT kvxJ I\tj TPrKZ @iMKjT VSAT kpMK mqmyJr TPr
Real Time On-line any Branch Banking Fr oJiqPo KmvoJPjr xmJ VJyTPhr JrkJP kRPZ KhK
VJyT xmJr kKf xpf hOK h~JA @oJPhr oNu uq @orJ xmxo~ VJyTPhr xoxqJ \JjJr YJ TKr Fm x IjMpJ~L
fJKeT xoJiJj KhP~ gJKT @AKkS-Fr IgtVye, KmPur Igt xVy, Bh knOKf KmPvw CkuP VJyTPhr xmJr YJKyhJ
KmPmYjJ TPr KmPvw TJCJr UJuJr mqmJ TrJ y~ @oJPhr keqxoNy VJyTPhr TJPZ xy\unq TrJ S VJyThr hJrPVJzJ~
xPmJtTO xmJ kRPZ h~Jr KjKoP @orJ kKvKf S VJyTPhr kKf pfvLu kvJ\LmLPhr mqJPT KjP~JK\f TPrKZ
IVJKiTJPrr KnKPf VJyTPhr xmtJT xyPpJKVfJ khJj S CYMoJPjr xmJ khJPjr \jq IKnPpJV xu Vbj TrJ yP~PZ
mMf: VJyTVeA @oJPhr oNu KmPmYq Kmw~ mqJPTr hvtj yP VJyT xK KmiJj TrJ pJPf G x VJyT mqJPTr xMjJo
xOK Fm xMjJo mOKPf hNPfr nNKoTJ~ ImfLjt yj
InqrLe kKve ZJzJS, mqJT 2007 xJPu 164 \j TotTfJtPT Phv S KmPhPv KmKnj kKve TJPxt kre TPr 2007
xJPu mqJPTr mJAPr IjMKf kKvPer Kmmre KjPo h~J yPuJ :
IKiT, mqJT CPrJr Cj~j S VPmweJr k~Jx ImqJyf rPUPZ Fm APfJoPiq eVf mqmJkjJ kKf (QMS) S iJrJ
kmfte TPrPZ mqJPTr Tot kKrYJujJ~ jkNeq, xMv
O u TotxJhj, kPeqr CJmj Fm @iMKjT S Cjf VJyT xmJ khJPjr
LTKfk xJCgA mqJT DET NORSKE VERITAS, NETHERLAND gPT ISO 9001 : 2000 xjh I\tj TPrPZ
InqrLe Kj~e S kKrYJujVf hfJPT oJjxj TrJr \jq xJCgA mqJT oNu ^KTxoNPyr Ckr oqJjM~Ju rYjJxy
\jJPru mqJKT oqJjM~Ju kmftj TPrPZ
AxuJKoT mqJKT TJpto xNet xMhoM Fm AxuJKoT vrL~Jy oNujLKfr KnKPf kKrYJKuf yP mqJT KmKnj AxuJKoT
vrL~Jy& kKfPf KmKjP~JV TrPZ Fm KmKjP~JV yPf kJ oMjJlJ @oJjfTJrLPhr oPiq @jMkJKfT yJPr oMhJrJmJ oNujLKfr
KnKPf mj TPr gJPT AxuJKoT mqJKT TJpto xjJfj mqJKT TJpto gPT xNet @uJhJ AxuJKoT mqJKT TJpto
xKbTnJPm kKrYJujJr \jq FTKa vrL~Jy& mJct rP~PZ C vrL~Jy& mJct AxuJKoT mqJKT KmwP~ fkNet KxJ Vye
TrPZ hPvr KjomKetf jfJjL~ S xJKjf AxuJoL KYJKmhVe xojP~ mqJPTr vrL~Jy& TJCKu VKbf
1. oJSuJjJ oJ @KojMu AxuJo, Y~JroqJj, vrL~Jy& TJCKu Fm UKfm, uJumJV vJyL \JPo oxK\h Fm xJhT oJKxT
@u mJuJV, dJTJ (19-11-2007 A fJKrPU APTJu TPrj, AjJ KuuJPy ......)
2. kPlxr oJSuJjJ oJ xJuJy& CKj, nJAx Y~JroqJj, vrL~Jy& TJCKu Fm kJj KkKkJu, oJhsJxJ-A-@Ku~J, dJTJ
Fm UKfm VJCxMu @\o oxK\h, mjJjL, dJTJ
3. F,Fx,Fo, lUu @yxJj, xhxq, vrL~Jy& TJCKu Fm kJj ckMKa Vnjtr, mJuJPhv mqJT
mqJT AxuJKoT mqJKT TJpto xKbTnJPm kKrYJujJr \jq h S IKn mqJTJr KjP~JPVr oJiqPo kiJj TJptJuP~ AxuJKoT
mqJKT CA xVKbf TPrPZ mqJT AxuJKoT mqJKT Fr \jq xNet kOgT KyxJm kKf IjMxre TrPZ kxf CPuUq p,
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Board's Report
A. Board of Directors
The Board of Directors is the body responsible for corporate governance, devising policies, determining
objectives and for stewardship of Banks resources. The Board of Directors consists of 09 (nine) Directors
including the Managing Director. The Chairman, in his absence, the Vice Chairman, presides over
meetings of the Board of Directors, Annual General Meetings and the Extra-Ordinary General Meetings.
The functional areas of the Board include, but not limited to, approving suitable business policy, fixation
of operational budgets, approval of financial statements, review of Banks operational performance towards
achievement of objectives and approval of policies and operational manuals to establish effective risk
management in core banking areas.
The functions of the Board also include reviewing companys corporate governance standard for further
improvement, determining Banks corporate social responsibility status and taking steps for its
improvement, developing compliance culture in the Bank, approving proposals as are beyond the
delegated business / financial / administrative powers of the Management, appointment of the Chief
Executive Officer and fixation of his benefits, etc.
The Directors of the Bank excluding the Managing Director retire in rotation in accordance with the
provisions of law. In this respect, the provisions contained in Section 15 KAKA of the Bank Company Act-
1991 as amended from time to time are complied with in letter and spirit. The Board of Directors held 34
(thirty-four) meetings in 2007.
The Board has constituted the following 02 (two) Committees:
i) Executive Committee
The Board has set up the Executive Committee as a body to deliberate on generally important management
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 Committee is composed of 6 (six) members including the
Managing Director. The Chairman of the Board is the Chairman of the Executive Committee. 05 (five)
meetings of the Executive Committee were held in 2007.
B. Bank Management
The Bank is manned and managed by a team of efficient professionals headed by Mr. Neaz Ahmed, the
Managing Director who has long 30 years banking experience both at home and abroad. The functions of
the Board and the Management are clearly defined and sharply bifurcated. The Management implements
and acts within the policies and manuals approved by the Board. A clearly defined organizational structure
with definite lines of responsibility and delegation of powers to different echelons of the management are
in place in the Bank. The Management enjoys full freedom in conducting the business of the Bank within
the scope of the policy-guidelines of the Board and the regulatory bodies. However, the Board and the
Annual Report 2007
Board's Report
Management work in unison for the continued well-being of the Bank. To streamline the functions of
different divisions / departments of the Bank, the following Committees are actively working in the Bank:
D. Loan to Director
No fresh loan was allowed to any Director of the Bank during the year 2007.
H. Regulatory Authorities
The role of regulatory authorities is very important in respect of corporate governance practices of
Southeast Bank Limited. We are pledge-bound to comply with all the requirements of regulatory
authorities. We highly value their continuous support and prized guidance which are material for
improvement of corporate governance of the Bank.
G. Shareholders
The shareholders of the Bank voice their views in the Annual General Meetings. The constructive
suggestions of the shareholders are implemented in the interest of the Bank. Our Share Division is
shareholders relationship department. Shareholders have right to information which we provide them
timely. Any material change in the Bank concerning shareholders interest or any price sensitive information
is quickly dispensed with for information of the shareholders and potential investors.
A report on corporate governance of the Bank as per directives of the SEC dated February 20, 2006 is
appended hereto.
62 Annual Report 2007
Board's Report
Compliance report as per Securities & Exchange Commissions Notification dated 20th February,
2006 for all companies listed with any Stock Exchange in Bangladesh in order to improve Corporate
Governance in the interest of Capital Market on Comply or Explain basis.
Board's Report
Board's Report
D) Pattern of Shareholdings:
i) Shares held by Parent/Subsidiary/Associated Companies and other related Parties
NIL
iii) Shares held by Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of
Internal Audit and their spouses and minor children as on 31.12.2007.
1 a) Nead Ahmed NIL
Chief Executive Officer
b) Spouse / Minor Children of CEO NIL
2 a) Muhammad Shahjahan 108
Company Secretary
b) Spouse / Minor Children of Company Secretary NIL
3 a) Arun Chandra Paul NIL
Chief Financial Officer
b) Spouse / Minor Children of Chief Financial Officer 2
4 a) Haradhan Banik NIL
Head of Internal Audit
b) Spouse / Minor Children of the Head of Internal Audit NIL
v) List of Shareholders holdings 10% and above shares in the Paid-Up-Capital of the Bank.
NIL
Annual Report 2007
Board's Report
Board's Report
essential to the long-term success of any banking organization. The Basel Committee is encouraging Banks
to promote sound practices for managing credit risk.The sound credit risk management practices focus on
the following aspects:
Southeast Bank is keenly aware of the need to identify, measure, monitor and control credit risk as well as
to hold adequate capital against these risks for adequate compensation of risks incurred since exposure to
credit risk continues to be the leading source of problems in Banks world-wide. In this respect, the Bank is
following the system as per Guidelines of Bangladesh Bank. The Bank has also adopted a policy to review
the whole system from time to time to cope with the multifarious situations of credit risk.
The Bank has also taken steps for strengthening the function of Credit Administration i. e. Disbursement,
Custodial Duties, Compliance, Credit Monitoring and Recovery to maintain Credit Risk at the minimum
level. In order to achieve this goal, Credit Administration Department (CAD) is exerting all out efforts for
completion of Security Documentation before disbursement, ensuring adequate Insurance Coverage to
cover unforeseen risks, monitoring and follow up after disbursement of Credit to maintain the risk assets
standard.
Monitoring and Recovery Unit is engaged in vigilant monitoring of the total Credit Classification position
of the Bank, managing all Classified and Special Mention Accounts to regularize for maximization of
recovery and ensuring appropriate loan loss provision timely. By dint of special attention, the Bank could
reduce the percentage of classified portfolio from 3.97% to 3.77% in 2007 through substantial amount of
loan recovery and regularization.
During the year 2007, Inspection Teams of ICCD of the Bank and Bangladesh Bank carried out inspections
on different Branches of our Bank and submitted Reports thereof. Necessary remedial measures/corrective
steps have been taken on the suggestions/observations made in the said reports. The summary of key points
of the reports were also placed and discussed in the meeting of the Audit Committee of the Board of
Directors. Appropriate actions have also been taken as per the decisions of the said Committee for
protecting the Banks interest.
Compliance: The Bank ensures full compliance of regulatory requirements including, the directives of
Bangladesh Bank (primary regulator), National Board of Revenue, Securities and Exchange Commission,
Registrar of Joint Stock Companies and Firms, Finance Ministry etc. having significant impact on the Banks
business.
Compliance is not a one-time event rather it is a continuous process. For this purpose, the Banks Internal
Controls have been designed in such a manner so that the compliance with all the relevant regulatory
requirements is carried out in each activity of the Bank. The Board of Directors and Senior Management of
Annual Report 2007
Board's Report
the Bank have developed a high ethical and moral standard to ensure strong compliance culture in the
Bank. In this context, the Bank gives priority on the following issues:
i) To encourage employees to comply with all the policies, procedures and regulations,
ii) To maintain continuous liaison with the regulators at all level to obtain regular information on
regulatory changes and
iii) To establish an effective communication process to distribute smoothly the relevant regulations
among the officials of the concerned Divisions and Branches.
Board's Report
Customers
The main channel we use to discharge our responsibility to the customers is by way of offering financial
products and services those truly meet their needs. We strive to maintain the highest standard of ethics in
the conduct of our business and feel proud of the trust the customers repose in us. In return, we carry out
our every single transaction with them with the highest degree of commitment and transparency without
any hidden cost. Our customers are our partners in business and we sincerely endeavour to improve our
relationship with them for our mutual benefit.
Employees
In our business which is dynamic and growing, we depend on our skilled and experienced human resource
at every level in the organization. We offer them very competitive pay package and bonus. There are also
provisions for handsome retirement benefits by way of Contributory Provident Fund, Gratuity and
Superannuation benefits. We provide them with a safe and congenial work environment. Resultantly, our
Bank has come out as an employer of choice. Rapid growth of business of the Bank presents opportunities
for talented employees to take added responsibilities. Our employees follow the code of conduct as
embodied in the Service Rules and Regulations of the Bank. The employees of the Bank are aware of their
responsibilities to the society. They donated total Tk.0.423 million out of their salary for flood and cyclone-
hit people of the country in 2007.
Shareholders
We are fully committed to the interest of our shareholders. Their constructive suggestions are implemented
for the betterment of the company. We release enough disclosures for the information of the shareholders
in the Annual Reports, half-yearly financial statements, the print and electronic media and in the Banks
website. We always try to enhance shareholders value by optimizing financial performance at least cost.
We continuously pay good dividends to the shareholders. The number of shareholders of the Bank is
increasing which testifies their unshakable trust in the Bank.
We continuously try to create a lasting relationship with our suppliers and business associates for mutual
growth. Our relationship with them is based on mutual trust and respect. We deal with them in a fair and
transparent way.
Environment
We ensure that our operations are environment-friendly and discourage financing projects contrary to it.
We have extended our helping hands to initiatives of community leaders for environment protection and
development. We are one of the leading participants in the beautification of Dhaka City. The road-island
from Russel Square to Manik Miah Avenue was beautified by our Bank.
Regulators
To be a responsible corporate citizen, we comply with the relevant laws, rules and regulations of all
regulatory authorities. Our business practices are transparent and are appreciated by the regulators. We
operate cautiously observing the anti-money laundering practices.
Annual Report 2007
Board's Report
Community
We work to promote good community relations to foster a relationship of understanding, trust and
credibility. We have a long history of support for charitable causes. In 2007, we have spent Tk.22.56
million as donations for education, sports, art, culture, health-cares, community development, relief
operations etc. The major areas of donations are given in the table below:
Sl. Amount in
No. Date To whom given million
01 13.05.2007 Society for Assistance to Hearing Impaired Children Tk.1.20
02 07.08.2007 Chief Advisors Relief Fund for flood victims through Islamic
Banks Consultative Forum Tk.1.00
03 13.08.2007 Chief Advisors Relief Fund for countrys flood victims Tk.5.00
04 29.11.2007 Bangladesh Army Relief Fund for cyclone-SIDR victims Tk.5.00
05 03.12.2007 Chief Advisors Relief Fund for cyclone-SIDR affected people Tk.5.00
The Bank has also established Southeast Bank Foundation to participate in social work in a more organized
way. In 2007, the Foundation donated Tk. 6.33 million for the distressed humanity. It may be cited that
the Foundation has donated Tk.2.5 million to the Government of Bangladesh (GOB) for relief operations
amongst the hillslide victims of Chittagong. It also donated Tk.0.5 million amongst the tornado affected
people of Chhagalnaiya, Feni. To encourage female professionals in the field of accountancy of the
country, the Foundation has decided to award 02 (two) scholarships for 02 (two) deserving female articled
students of the Institute of Chartered Accountants of Bangladesh (ICAB) on a recurring basis to pursue
Chartered Accountancy Course. Each scholarship holder will be paid Tk.3,000.00 per month for 03 (three)
years and Tk.10,000.00 for books and other related expenditures.
70 Annual Report 2007
In 2007, the Audit Committee of the Board of Directors of the Bank played an effective role in
strengthening Internal Control and Compliance functions of the Bank. After threadbare discussions on the
related issues, the Committee also provided the following instructions / guidelines:
a) Advised that suits filed / to be filed against the defaulting borrowers be regularly monitored and
pursued through the Banks Lawyers for their early disposal in favour of the Bank.
b) Advised that efforts be geared up for recovery of overdue loans under Consumer Credit Scheme
(CCS).
c) Advised that the incomplete documentation formalities in certain loan accounts of branches be
completed at the earliest to safeguard Banks interest.
d) Advised the Management to ensure that the loan accounts as were showing signs of weakness are
regularly monitored for timely repayments.
e) Reviewed the Internal Inspection Reports conducted by Internal Control and Compliance Team of
the Bank on different branches during the year 2007 and instructed the Management to take all out
efforts for immediate rectification of the lapses and irregularities mentioned in the reports.
f) Reviewed the corrective measures taken by the Management against lapses and irregularities
detected by Banks internal auditors and primary regulators.
h) Advised the Management to vigorously and regularly monitor each of the classified loan account to
bring down the amount of classified loans substantially by recovery
i) Advised the Management to fully implement all the Core Risk Management Guidelines of the Bank.
j) As per suggestions of Bangladesh Bank, the Committee reviewed the Internal Control System of the
Bank and advised the Management to implement the guidelines / notes of Bangladesh Bank to
further improve the level of Internal Control and Compliance culture in the Bank.
k) Advised the Management to take proper steps for recovery of Banks overdues from the defaulting
Credit Card holders of the Bank.
Abdul Hye
Chairman
Audit Committee
Annual Report 2007
Praise be to the Almighty Allah, and prayer and peace be on the noblest of messengers, our holy Prophet
Mohammad (SM), his kindred and companions.
In the year 2007, Southeast Bank Limited catered its Islamic Banking Operations through 05 (five)
designated Islamic banking branches at the following locations:
01 Chhagalnaiya Branch : Mir Shopping Complex, Chhagalnaiya, Feni
02 Coxs Bazar Branch : Asha Shopping Complex, 430-431 Bazar Ghata, Coxs Bazar
03 Bandar Bazar Branch : Karimullah Market, Bandar Bazar, Sylhet.
04 Motijheel Branch : 125, Motijheel C/A, Dhaka.
05 CDA Avenue Branch : Ali Villa, 1640/1861 (new), CDA Avenue
Asian Highway, East Nasirabad, Chittagong.
We pray to Almighty Allah to give us enough strength and fortitude to implement Shariah Principles in
every sphere of our life. We evoke His unbound blessings. Ameen.
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 2,776.53 million as of December 31, 2007 as
against BDT 1,948.55 million in 2006 registering a growth of 42%.
Taka in 'million'
Particulars 2007 % 2006 %
Taka Taka
Income from Banking Services:
Interest and similar income on loan portfolios 6,408.96 5,107.78
Investment income 956.80 439.22
Commission, Exchange and Brokerage 1,159.02 1,084.17
Other Operating Income 145.69 134.94
8,670.47 6,766.11
Less: Cost of Services & Supplies
Interest paid on Deposits & Borrowings 4,852.50 4,044.63
Rent, Taxes, Insurance, Lighting etc. 108.66 81.64
Legal expenses 0.35 0.15
Postage, Stamp, Telegram & Telephone 54.93 51.37
Stationery, Printing, Advertisement 39.26 30.36
Directors' Fees and Expenses 1.59 1.17
Audit Fee 0.40 0.35
Repairs to Bank's property 23.13 14.24
Other expenses 223.96 169.31
5,304.78 4,393.22
Value Added by the Banking Services 3,365.69 2,372.89
Add: Non-banking income
Less: Loan Loss and Provisions
Specific provision on loan loss (140.00) (311.00)
Transfer to general provisions (80.00) (104.00)
Transfer to general reserve (220.00)
Provision for Off-Balance Sheet Exposures (107.10)
Provision for diminution in value of Investment 12.94 (6.34)
Provision for Other Assets (5.00) (3.00)
Transfer to SEBL Foundation (50.00)
(589.16) (424.34)
Value Added 2,776.53 1,948.55
Economic Value Added Statement for the year ended 31st December, 2007
Economic Value Added (EVA) indicates the true economic profit of a company. EVA is an estimate of
the amount by which earrings exceed or fall short of required minimum return for shareholders at
comparable risks. EVA of the bank stood at Tk.800.86 million as of December 31, 2007 as against
Tk.770.96 million in 2006.
Taka in 'million'
Economic Value Added
2007 2006
Particulars Taka Taka
Total Revenue 8,670.47 6,766.11
Less : Expenses (Interest & Operating) (5,754.27) (4,703.45)
Less : Corporate Tax (1,374.07) (728.44)
Less : Capital Changes (741.27) (563.26)
Economic Value Added 800.86 770.96
Market Value Added Statement for the year ended 31st December, 2007
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 Tk.13,080.18 million
whereas the book value of equity stood at Tk.6,468.36 million, resulting a Market Value Added of
Tk.6,611.82 million as of December 31, 2007 as against Tk.2,377.82 million in 2006.
Taka in 'million'
Market Value Added
2007 2006
Particulars Taka Taka
We have audited the accompanying balance sheet of Southeast Bank Limited as of 31 December 2007 and the
related profit and loss account, cash flow statement, statement of changes in equity, liquidity statement and a
summary of significant accounting policies and explanatory notes for the year then ended. These financial
statements are the responsibility of the Banks management. 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 plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BASs), give
a true and fair view of the state of the bank's affairs as of 31 December 2007 and of the results of its operations and
its cash flows for the year then ended and comply with the applicable sections of the Bank Companies Act 1991,
the rules and regulations issued by the Bangladesh Bank, the Companies Act 1994, the Securities and Exchange
Rules 1987 and other applicable laws and regulations.
Profit and Loss Account for the year ended 31 December 2007 Profit and Loss Account for the year ended 31 December 2007
Interest and Discount Income 20 6,408,962,289 5,107,779,714 Statutory Reserve 14 519,409,000 327,663,000
Interest paid on Deposits & Borrowings 21 (4,852,499,177) (4,044,631,543) General Reserve 15 220,000,000
Transfer to SEBL Foundation 50,000,000
Net Interest Income 1,556,463,112 1,063,148,171
789,409,000 327,663,000
Commission, Exchange & Brokerage 23 1,159,020,766 1,084,176,714 Earnings per share (EPS) 38 53.60 59.71
Other Operating Income 24 145,688,988 134,938,982
Provision for Loans and Advances 12.1 & 12.2 220,000,000 415,000,000
Provision for Off-Balance Sheet Exposures 12.3 107,100,000
Provision for diminution in value of investment 33 (12,942,823) 6,341,000
Other Provisions 12.9 5,000,000 3,000,000
1,233,193,391 929,454,331
80 Annual Report 2007 Annual Report 2007 81
Statement of Cash Flow for the year ended 31 December 2007 Statement of Changes in Equity for the year ended 31 December 2007
5,059,294,638
5,059,294,638
334,753,304
1,222,969,036
(422,547,876)
(50,000,000)
6,144,469,101
5,059,294,638
A. Cash flows from operating activities
(Taka)
Total
Interest receipts in cash 7,034,562,767 5,448,375,936
Interest payment (4,729,870,605) (3,778,180,500)
Dividend receipts 2,080,927 18,115,028
Fees and commission receipts in cash 1,159,020,766 1,084,176,714
601,791,332
601,791,332
1,222,969,036
443,784,391
601,791,332
(169,019,100)
(422,547,876)
(739,409,000)
(50,000,000)
Recoveries on Loans previously written-off 573,999 258,069
Retained
earnings
(Taka)
Cash payments to employees (379,959,998) (314,939,476)
Cash payments to suppliers (64,715,335) (41,292,573)
Income taxes paid (1,148,033,342) (676,326,385)
Receipts from other operating activities 34 143,226,731 134,680,913
27,650,000 235,866,506
27,650,000 235,866,506
334,753,304
247,650,000 570,619,810
27,650,000 235,866,506
Payments for other operating activities 35 (408,981,604) (319,959,780)
reserve
Other
(Taka)
Operating profit before changes in operating assets and liabilities (i) 1,607,904,306 1,554,907,946
220,000,000
Sale of trading securities 1,186,307,510 166,245,517
General
Reserve
(Taka)
Purchase of trading securities (1,429,251,163) (139,374,219)
Loans & advances to other banks
Loans & advances to customers (7,017,322,150) (8,596,192,208)
Other Assets 36 784,568,217 (965,975,572)
share dividend
(Taka)
Deposits from other banks (307,933,000) 244,329,500
Cash
Deposits from customers 9,295,236,296 7,531,579,509
Proposed
Trading Liabilities
Bonus
(Taka)
Other Liabilities 37 (110,643,710) (89,216,476)
Cash received from operating assets and liabilities (ii) 2,400,962,000 (1,848,603,949)
1,056,369,600
1,056,369,600
1,056,369,600
1,056,369,600
premium
Net cash inflow/(outflow) from operating activities (A=i+ii) 4,008,866,306 (293,696,003)
(Taka)
Share
B. Cash flows from investing activities
Proceeds from sale of securities 1,776,133,118 286,977,000
Payments for purchase of securities (2,287,576,200) (1,261,628,590)
2,112,739,200 1,024,878,000
2,112,739,200 1,024,878,000
519,409,000
2,281,758,300 1,544,287,000
2,112,739,200 1,024,878,000
Purchase of fixed assets (143,358,253) (567,518,335)
Statutory
reserve
(Taka)
Sale of fixed assets 2,744,851 167,616
Payment against lease obligation (28,036,583) (34,127,316)
Net cash inflow/(outflow) from investing activities (B) (680,093,067) (1,576,129,625)
C. Cash flows from financing activities :
169,019,100
Dividend paid (422,547,876)
Paid-up
Capital
(Taka)
Receipts from issue of right shares 2,112,739,200
Net cash inflow/(outflow) from financing activities (C) (422,547,876) 2,112,739,200
D. Net increase / decrease in cash & cash equivalent (A+B+C) 2,906,225,363 242,913,572
E. Cash and cash equivalents at beginning period 6,874,404,008 6,631,490,436
Surplus/deficit on account of
Surplus/deficit on account of
revaluation of investments
revaluation of properties
Restated balance
Dividends (Cash)
Money at call and short notice 310,000,000 830,000,000
Treasury bills 4,511,925,696 3,378,498,456 Particulars
Prize bond 4,343,600 3,644,800
9,780,629,371 6,874,404,008
82 Annual Report 2007 Annual Report 2007 83
Liquidity Statement (Assets and Liability Maturity Analysis) as at 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
3,407,371,900
1,546,988,175
310,000,000
8,462,863,000
6,509,000
48,164,604,150
1,708,110,172
770,752,643
64,370,690,040
55,474,048,109
2,745,663,830
58,226,220,939
6,144,469,101
Southeast Bank Limited is a scheduled commercial bank in the private sector established under the Bank
Companies Act 1991 and incorporated in Bangladesh as a public limited company to carry out banking
business in Bangladesh.
The bank has 38 branches, with no overseas branch as on 31 December 2007. Out of the above 38
branches, 5 branches are designated Islamic branch complying with the rules of Islamic Shariah the modus
More than
5 years
1,844,423,403
6,545,186,000
1,366,616,713
51,212,100
9,807,438,217
1,697,998,000
1,697,998,000
8,109,440,217
operandi of which is substantially different from other branches run on commercial conventional basis.
Southeast Bank Limited 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.
1-5 years
1,017,991,755
11,400,045,000
341,493,459
5,071,500
12,759,530,214
6,820,235,000
52,816,957
6,878,123,457
5,881,406,757
2. Summary of significant accounting policies and basis of preparation of the financial statements
Balance with other banks and financial institutions, Money at call on short notice are on the basis of their maturity.
Borrowings from Bangladesh Bank, other banks, financial institutions and agents are on the basis of their payment.
The financial statements of the bank are made upto 31 December each year and are prepared under the
historical cost convention and in accordance with the First Schedule (Sec. 38) of the Bank Companies Act
3-12 months
600,000,000
1,397,106,945
14,940,424,000
309,736,959
17,247,267,904
25,432,722,000
34,747,943
25,467,469,943
(8,220,202,039)
1991, BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank circulars, Bangladesh Accounting
Fixed assets including premises land & buildings, furniture & fixtures are on the basis of their useful life.
Standards(BAS) 30,the Companies Act. 1994, the Securities & Exchange Rules 1987 and other laws &
regulations applicable in Bangladesh.
1- 3 months
639,794,090
3,468,097,297
6,360,648,000
42,945,782
10,511,485,169
12,051,277,000
12,051,277,000
(1,539,791,831)
of Islamic Shariah. The financial statements of the branches have also been prepared as per Bank Companies
Act 1991, Bangladesh Accounting Standards. A separate balance sheet and profit and loss account are shown
Deposits and other accounts are on the basis of their maturity and payment.
The following assumptions have been applied in preparing the maturity analysis:
in Annexure - A and the figures under different heads appearing in the annexure have been converted into
relevant heads of counts under conventional banking for consolidation and incorporate
vii) Provision and other liabilities are on the basis of their adjustment.
Up to 1 Month
3,407,371,900
307,194,084
310,000,000
735,243,600
8,918,301,150
366,857,802
1,437,500
14,044,968,536
9,471,816,109
2,658,098,930
12,131,352,539
1,913,615,997
These financial statements are presented in Taka, which is the Bank's functional currency. Except as
indicated figures have been rounded to the nearest Taka.
Loans and advances are on the basis of their maturity.
A separate set of records for consolidating the statement of affairs and income and expenditure statements
Fixed Assets including premises land & building,
Balance with other banks & financial institutions
of the branches were maintained at the Head Office of the Bank in Dhaka based on which these financial
statements have been prepared.
The preparation of financial statements requires management to make judgments, estimates and assumptions
Loans and Advances
Non-Banking Assets
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
Other Accounts
Total Assets (A)
Cash in Hand
Liabilities
Deposits
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
Assets
are recognized in the period in which the estimate is revised and in any future periods affected.
iii)
iv)
vi)
ii)
v)
v)
i)
84 Annual Report 2007 Annual Report 2007 85
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
2.7 Foreign currency conversion Loans and advances are written off to the extent that (i) there is no realistic prospect of recovery, (ii) and
against which legal cases are filed and classified as bad loss for more than five years as per guidelines of
Transactions in foreign currencies are translated into Bangladeshi Taka and recorded at the ruling exchange
Bangladesh Bank. These write off however will not undermine/affect the claim amount against the borrower.
rates applicable on the date of transaction.
Detailed memorandum records for all such write off accounts are maintained and followed up.
i) Assets and liabilities denominated in foreign currency are translated into Taka at the weighted average
2.9.3 Investments
rates at the balance sheet date.
Value of investment has been enumerated as follows:
ii) Transactions in foreign currencies are converted into Taka currency at the rate of exchange prevailing
on the dates of such transactions and any gains or losses thereon are adjusted to revenue through foreign Items Applicable accounting value
exchange trading account. Government treasury bill (HTM) At present value
T&T treasury bond At cost price
2.8 Taxation Zero coupon bond At present value
Income tax expenses represent the sum of the tax currently payable and deferred tax. Bangladesh Government treasury bond At present value
Prize bond At cost price
2.8.1 Current tax Investment in shares (quoted) At cost or market value at the balance sheet date
whichever is lower.
Provision for current income tax has been made @ 45% as prescribed in the finance Act 2007 on the Investment in shares (unquoted) At cost price
accounting Profit made after considering some of the taxable add back income and disallowance of
expenditure. 2.9.4 Recognition of Fixed Assets
All Property and equipment are classified and grouped on the basis of their nature as required in paragraph
2.8.2 Deferred taxation 75(a ) of BAS-1 Presentation of Financial Statements. The major categories of Property and equipment held
The Bank has adopted deferred tax accounting policy as per Bangladesh Accounting Standard (BAS) 12. by the bank are property (land & Buildings), Furniture and fixtures, office appliance, electrical appliances
Accordingly deferred tax liability/asset is accounted for all temporary timing differences arising between the and motor vehicles. As per Para 31 of BAS 16 after recognition as an asset, an item of property, plant and
tax base of the assets and liabilities and their carrying value for financial reporting purposes. Deferred tax is equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair
computed at the prevailing tax rate as per Finance Act 2007. value at the date of the revaluation less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
2.9 Assets and basis of their valuation
Assets acquired under own finance
As guided in paragraph 30 of BAS-16 Property Plant and equipment these are capitalized at cost of
2.9.1 Cash and cash equivalents
acquisition and subsequently stated at coat less accumulated depreciation. The cost of acquisition of an asset
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh comprises its purchase price and directly attributable cost of brining the assets to its working condition for
Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, its intended use inclusive of inward fright, duties and refundable taxes. The opening and closing carrying
and are used by the bank management for its short term commitments. amounts of all property and equipment are presented including the amount of additions, disposals and
depreciation charged during the year as required by paragraph 73(a-e) of BAS-16,Maintanance expenses that
2.9.2 Advances and provisions does not increase in the future economic benefit of assets is charged to profit & loss account.
Advances are stated at gross value. Assets acquired under lease finance
Provision for loans and advances is made on the basis of periodical review by the management and of As per BAS 17 "Lease" all fixed assets acquired under finance lease is accounted for recording the asset at
instructions contained in Bangladesh Bank BRPD Circular no. 5 dated 5 June 2006. The classification rates the lower of present value of minimum lease payments under the lease agreements and the fair value of
are given below: assets. The related obligation under the lease is accounted for as liability. Financial charges are allocated to
accounting period in a manner so as to provide a constant rate of charge on the outstanding liability.
Particulars Rate
General provision on: 2.9.5 Depreciation on Fixed assets
Unclassified loans and advances 1% As required in paragraph 43 of BAS-16 property Plant and equipment depreciation has been charged at the
Small Enterprise 2% following rates on reducing balance method on all fixed assets other than vehicles, which are depreciated
Consumer finance for house building loan and loans for professional setup 2% on straight line basis.
Other consumer finance 5% Category of the assets Rate of depreciation
Special mention account 5% Land Nil
Building 4%
Specific provision on: Furniture and fixtures 10%
Substandard loans and advances 20% Electrical installation including computer 20%
Doubtful loans and advances 50% Typewriter, adding and calculating machine 20%
Bad/loss loans and advances 100% Vehicles 20%
86 Annual Report 2007 Annual Report 2007 87
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Depreciation has been charged from the month of purchase and in case of sale upto the month of sale. The 2.12.5 Dividend income on shares
gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale
Dividend income from shares is recognized during the period in which they are declared and actually
proceeds and the carrying amount of the asset and is recognized in the profit and loss account.
received.
2.10 Retirement benefit schemes
2.12.6 Gain on sale of security
2.10.1 Provident fund
Capital gain on sale of securities listed in the stock exchanges is recorded only when the securities are sold
Provident fund benefits are given to the staff of the bank in accordance with the registered Provident fund in the market.
rules. The commissioner of Income Tax, Large Tax Payers Unit, 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 2.12.7 Interest paid and other expenses (conventional banking)
Schedule of Income Tax Ordinance 1984. The fund is operated by a Board of Trustees consisting of 6 (six) Interest paid and other expenses are recognized on accrual basis.
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 2.12.8 Profit paid on deposits (Islamic banking)
bank are charged as expense. Interest earned from the investments is credited to the members' account on Profit paid to mudaraba deposits are recognized on accrual basis as per provisional rate.
half yearly basis.
2.13 Reconciliation of inter-bank and inter-branch account
2.10.2 Gratuity Accounts with regard to inter bank (in Bangladesh and outside Bangladesh) are reconciled regularly and
Gratuity fund benefits are given to the staff of the bank in accordance with the approved Gratuity fund rules. there are no material differences which may affect the financial statements significantly.
National Board of Revenue has approved the gratuity fund as a recognized gratuity fund with effect from
Unmatched entries/balances in case of inter branch transactions as on the reporting date are not material.
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 2.14 Cash flow statement
Company. The gratuity is calculated on the basis of last basic pay and is payable at the rate of one month's Paragraph 102 of BAS 1 presentation of financial statements requires that a cash flow statement is to be
basic pay for every completed year of service. Gratuity so calculated are transferred to the fund and charged prepared as it provides information about cash flows of the enterprise which is useful in providing users of
to expenses of the bank. financial statements with a basis to asses the ability of the enterprise to generate cash and cash equivalents
2.10.3 Superannuation and the needs of the enterprise to utilize those cash flows. Cash flow statement has been prepared under
the direct method for the period, classified by operating, investing and financing activities as prescribed in
The bank also contributes yearly amount to employees superannuation fund as per rules and regulations of
paragraph 10 and 18 (a) of BAS 7 Cash Flow Statements.
the fund recognized by the Tax Authority. Contribution of the bank to such fund charged as expense of
the bank. 2.15 Statutory reserve
2.11 Provisions and accrued expenses As per section 24 of the Bank company Act 1991,20% of the net profit is transferred to statutory reserve.
Provisions and accrued expenses are recognized in the financial statements when the bank has a legal or 2.16 Exchange equalization fund
constructive obligation as a result of past event, it is probable that an outflow of economic benefit will be This represents the amount arise from exchange gain due to devaluation of Bangladesh taka with foreign
required to settle the obligation and a reliable estimate can be made of the amount of the obligation. currencies and is accounted for as per instruction issued by the Bangladesh bank from time to time.
2.12 Revenue recognition 2.17 Comparative Information
2.12.1 Interest income As guided in paragraph 36 and 38 of BAS 1 Presentation of Financial Statements, comparative information
The interest receivable is recognized on accrual basis. Interest on loans and advances ceases to be taken in respect of the previous year have been presented in all numerical information in the financial statements
into income when such advances are classified. It is then kept in interest suspense account. Interest on and the narrative and descriptive information where, it is relevant for understanding of the current year's
classified advances is accounted for on a cash receipt basis. financial statements.
Mark-up on investment is taken into income account proportionately from profit receivable account. Risk Management is the key element for sound corporate governance of the Bank. With a recent addition
Overdue charge/compensation on classified investments transferred to profit suspense account instead of in regulatory mandates and increasingly active participation of shareholders, the Bank has become
income account. increasingly concerned to identify areas of risks in the business, whether it is financial, operational, ICT or
reputation risk. Southeast Bank identifies, measures, monitors and manages all risks of the Bank.
2.12.3 Investment income Sophisticated risk management framework is being implemented to carry out efficient risk management
Income on investments is recognized on accrual basis. exercises of the Bank including documenting and assessing risks, defining controls, managing assessments
and audit, identifying issues, implementing recommendations and corrective plans. In accordance with
2.12.4 Fees and commission income
Bangladesh Bank Guidance Notes, the Bank has established a risk framework that consists of six core
Fees and commission income arises on services provided by the Bank and recognized on a cash receipt factors, i.e. (i) Credit Risk (ii) Asset and Liability/Balance Sheet Risk (iii) Foreign Exchange Risk (iv) Internal
basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income Control and Compliance Risk (v) Money Laundering Risk and (vi) Information and Communication
at the time of effecting the transactions. Technology Risk.
88 Annual Report 2007 Annual Report 2007 89
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
The Bank has also identified the following four key infrastructure components for effective risk management 2.18.3 Foreign Exchange Risk Management
programs: Foreign exchange risk is defined as the potential change in earnings due to unfavorable movement in
(i) Proactive Board of Directors and Senior Managements Supervision, exchange rates. Generally, the Bank is less exposed to foreign exchange risk as all the transactions are
(ii) Adequate Policies and Procedures, carried out on behalf of the customers against L/C commitments and other remittance requirements. The
(iii) Proper Risk-Measurement, Monitoring and Management Information Systems and Bank has undertaken policy guidelines to minimize the foreign exchange risk for exposure in currency
(iv) Comprehensive Internal Controls. movement. Treasury department has separate front office. Its back office desks are responsible for currency
2.18.1 Credit risk transactions, deal verification and limit monitoring and settlement of transactions separately. The Bank
continuously revalued all foreign exchange positions at market rate as per the guidelines of Bangladesh
Credit Risk is most simply defined as the failure of a bank borrower or counterparty to meet its obligations
Bank. All Nostro Accounts are timely reconciled and all outstanding entries are reviewed on a regular basis.
in accordance with agreed terms. Financial institutions have been facing difficulties over the years for a
multitude of reasons. The major causes of serious banking problems continue to be directly related to tax 2.18.4 Anti-Money Laundering Risk Management
credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention to
The financial aspects of crime have become more complex due to rapid advancement in technology and
changes in economic or other circumstances that can lead to deterioration in the credit standing of a bank's
counterparties. The goal of credit risk management is to maximise a bank's risk-adjusted rate of return by the globalized character of the financial services industry. Money-Launderers often use their front
maintaining credit risk exposure within acceptable levels. The effective management of credit risk is a companies which co-mingle the proceeds of illicit activity with legitimate funds in order to hide the ill-
critical component of a comprehensive approach to risk management and essential to the long-term success gotten gains. Therefore, prevention of laundering the proceeds of crime has become a major priority from
of any banking organization. The Basel Committee is encouraging Banks to promote sound practices for all jurisdictions from which financial activities are carried out. The policy of the Bank includes establishing
managing credit risk. The sound credit risk management practices include the following areas: adequate procedures of customer due diligence, reporting, record keeping, internal control, risk
(i) Establishing an appropriate credit risk environment management and communication in order to forestall and prevent operations related to money laundering
(ii) Operating under a sound credit-granting process or financing of terrorism. Central Compliance Unit (CCU) of the Bank is performing supervisory and
(iii) Maintaining an appropriate credit administration, measurement and monitoring process; monitorial activities for the Banks internal procedures on anti-money laundering and anti-terrorism
(iv) Ensuring adequate controls over credit risk. financing. It also ensures that bank complies with the anti-money laundering and anti-terrorism financing
Southeast Bank is keenly aware of the need to identify, measure, monitor and control credit risk as well as legislation, including the Know Your Customer rules.
to hold adequate capital against these risks for adequate compensation of risks incurred since exposure to 2.18.5 Internal Control and Compliance Risk Management
credit risk continues to be the leading source of problems in Banks world-wide. In this line Bank is following
the system as per Guidelines of Bangladesh Bank. Bank has also adopted a policy to review the whole Adequate Internal Controls contribute significantly to the improvement of the performance of the Banks
system, from time to time to cope with the multifarious situations. through enforcing efficient managerial guards. Such control culture is duly reflected in the Policy
Guidelines and Structural Changes of the Bank. Our Bank has established sophisticated organizational
The Bank has also taken steps for strengthening the function of Credit Administration i. e. Disbursement,
structure to exercise strong control culture within the organization by implementing policy guidelines of
Custodial Duties, Compliance, Credit Monitoring and Recovery to maintain Credit Risk at the minimum
internal controls appropriately and strengthening internal controls system.
level. In order to achieve this goal Credit Administration Department (CAD) is exerting all out efforts for
completion of Security Documentation before disbursement, ensuring adequate Insurance Coverage to Internal Control and Compliance Division (ICCD) of the Bank comprises three units, namely (i) Compliance
cover unforeseen risks, monitoring and follow up after disbursement of Credit to maintain the loan standard. Unit, (ii) Monitoring Unit and (iii) Audit and Inspection Unit. The Division reviews and monitors Banks
Internal Control and Compliance Risk to help the Bank perform better through the use of its resources. The
Monitoring and Recovery Unit is engaged in monitoring the total Credit Classification position of the Bank
vigilantly, managing all Classified and Special Mention Accounts to regularize for maximization of recovery units of the Division are performing their functional activities in accordance with the Banks own policies
and ensuring appropriate loan loss provision timely. Because of special attention, The Bank could reduce as well as guidance notes issued by Bangladesh Bank from time to time for mitigating the Internal Control
the percentage of classified portfolio from 3.97% to 3.77% in 2007 through substantial amount of loan and Compliance Risks of the Bank.
recovery and regularization.
During the year 2007, Inspection Teams of ICCD of the Bank and Bangladesh Bank carried out inspections
2.18.2 Asset Liability Risk Management on different Branches of our Bank and submitted Reports thereof. Necessary remedial measures/corrective
Asset Liability Management (ALM) is one of the key areas of risk management which mainly focuses on steps have been taken on the suggestions/observations made in the said reports. The summary of key points
liquidity and interest rate risk of the Bank. In 2007, the Bank managed its assets and liabilities most of the reports were also placed and discussed in the meeting of the Audit Committee of the Board of
prudently ensuring optimum liquidity with full compliance of regulatory requirements. By closely Directors. Appropriate actions have also been taken as per the decisions of the said Committee for
monitoring the interest rate movement of the market, the Bank achieved a satisfactory net interest margin protecting the Banks interest.
by taking timely decisions regarding interest rates on deposits and loans and advances. ALM desk of the
Treasury Department prepared monthly Asset Liability Committee (ALCO) paper highlighting economic Compliance: The bank ensures full compliance of regulatory requirements including, the directives of
outlook and financial fundamentals of the Bank and arranged ALCO meetings in every month. Bangladesh Bank (primary regulator), National Board of Revenue, Securities and Exchange Commission,
Registrar of Joint Stock Companies and Finance Ministry etc. having significant impact on the Banks
Decisions taken in the ALCO meetings were duly recorded and action plans were implemented by the
business.
branches/departments to optimize Banks financial performances. As a result, the Bank registered substantial
growth in all the performance indicators including operating profit in 2007 by minimizing the liquidity and Compliance is not a one-time event rather it is a continuous process. For this purpose, the Banks Internal
interest rate risk. As a part of regulatory requirement, the Board of Directors also reviewed the ALM manual Controls have been designed in such a manner so that the compliance with all the relevant regulatory
and its components regularly. requirements is carried out in each activity of the Bank.
90 Annual Report 2007 Annual Report 2007 91
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
The Board of Directors and Senior Management of the Bank have developed a high ethical and moral 2007 2006
standard to ensure strong compliance culture in the Bank. In this context, the Bank gives priority on the 3 Cash Taka Taka
following issues:- In hand:
Local currency 411,691,638 272,580,765
i) To encourage employees to comply with all the policies, procedures and regulations;
Foreign currency 29,220,094 30,709,561
ii) To maintain continuous liaison with the regulators at all level to obtain regular information on
regulatory changes; and 440,911,732 303,290,326
iii) To establish an effective communication process to distribute smoothly the relevant regulations among Balance with Bangladesh Bank:
the officials of the concerned Divisions and Branches Local currency 2,884,138,665 2,167,310,932
Foreign currency 79,315,863 290,811,749
2.18.6 Information and Communication Technology Risk Management 2,963,454,528 2,458,122,681
The Bank has adequately addressed ICT Risk Management. It is an in-depth exercise and continual process. Balance with Sonali Bank (as agent of Bangladesh Bank): 3,005,640 22,002,536
The Risk Management exercise mainly includes minimizing financial loss to the institution in all events such 2,966,460,168 2,480,125,217
as natural disaster, technological failure, human error etc.
3,407,371,900 2,783,415,543
In line with Central Bank directives, the Bank has redrawn its own Information and Communication
Technology (ICT) Policies for operations and Services. Under these policy guidelines, a security policy has Bangladesh Bank adjustments account represents outstanding transactions (Net) originated but yet to be
also been worked out and implemented in the server system through Active Directory Services (ADS). It has responded at the balance sheet date. However, the status of unresponded entries of 31.12.2007 are given
been implemented through Password Policy, Kerberos Policy, Audit Policy, Group policy, User Rights, below:
Permission policy etc. to abide by and adhere to what is laid down in the policy. In order to secure network
resources from public network, the Bank has introduced Virtual Private Network (VPN), Access Control List Number of Unresponded entries Unresponded entries (Amount Taka)
(ACL), IP filtering and TCP/UDP service blocking through Router and firewall devices. It has already Dr. Cr. Dr. Cr.
centralized the administrative control to access the Network, mailing system and access to Internet under Upto 3 months 16 25 296,321,783 250,101,539
this policy. Over 3 months but within 6 months 1 819,643
The Bank has already established Disaster Recovery (DR) site for Communication Network System at Banani Over 6 months but within 1 year
Branch which acts as fallback connectivity when Data Center is down. The Bank has also deployed well Over 1 year but within 5 years
tested and very reliable Antivirus Software like eScan and eTrust to protect and secure the core Network 16 26 296,321,783 250,921,182
and Banking solution. The Bank has prepared Business Continuity Plan (BCP) which is well documented to
re-establish business critical functions within predetermined time frame with minimum financial loss to the 3.1 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)
institution. Under this business, Data Backup at on-site and off-site has already been started and well Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in
practiced. accordance with section 33 of Bank Companies Act, 1991 and BRPD circular no.11 and 12, dated August
25, 2005
2.19 Off balance sheet items
The Cash Reserve Requirement on the Bank's time and demand liabilities at the rate of 5% has been
Under general banking transactions, liabilities against acceptance, endorsements, and other obligations and calculated and maintained with Bangladesh Bank in current account and 18% Statutory Liquidity Ratio,
bills against which acceptance has been given and claims exists there against, have been shown as off including CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds, FC with
balance sheet items. Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as
2.20 Earning per share (EPS) shown below:
The Company calculates Earning Per Share (EPS) in accordance with BAS 33: Earning Per Share, which has 3.1.1 Cash Reserve Requirement (CRR):
been shown on the face of profit & loss account, and the computation of EPS is stated in Note 38. 5% of Required Average Demand and Time Liabilities:
Basic earnings Required reserve 2,514,956,150 2,167,215,950
This represents earnings for the year attributable to ordinary shareholders. As there was no preference Actual reserve held 2,884,138,665 2,167,310,932
dividend, minority or extra ordinary items, the net profit after tax for the year has been considered as fully Surplus 369,182,515 94,982
attributable to the ordinary shareholders.
3.1.2 Statutory Liquidity Requirement (SLR):
Weighted average number of ordinary shares outstanding during the year 18% of Required Average Demand and Time Liabilities:
This represents the number of ordinary shares outstanding at the beginning of the year plus the number of
Required reserve 9,053,842,140 7,801,977,420
shares issued during the year multiplied by a time-weighting factor. The time-weighting factor is the
Actual reserve held 10,970,916,354 8,662,332,166
numbers of months the specific shares are outstanding as a proportion of the total number of months in
the year. Surplus 1,917,074,214 860,354,746
Held for Statutory Liquidity Ratio
Basic earnings per share
Cash in hand 440,911,732 303,290,326
This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares
outstanding for the year. Balance with Bangladesh Bank and its agent bank(s) 2,966,460,168 2,480,125,217
Government securities 4,511,925,696 3,378,498,456
Diluted earnings per share Government bonds 3,051,618,758 2,500,418,167
No diluted EPS is required to be calculated for the year, as there was no scope for dilution during the year
10,970,916,354 8,662,332,166
under review.
92
4.1
Janata Bank
Sonali Bank
Sonali Bank
Agrani Bank
Annual Report 2007
Union Capital
Bank Asia Limited
Bank Asia Limited
1,258,788,896
870,000,000
40,000,000
350,000,000
100,000,000
250,000,000
19,794,090
1,185,065
1,546,988,175
100,000,000
50,000,000
100,000,000
100,000,000
2,771,317
14,941,355
113,399
145,040
(107,410)
176,025
528,502
18,994,806
802,047
675,042
100,000,000
380,000,000
10,000
30,795
100,000
550,000
6,034,080
(164,894)
438,171
506,163
2,511,575
5,295,125
163,644
(5,528,148)
248
204,672
1,855,999
5,537,387
288,199,279
1,258,788,896
2007
13,697
Taka
Notes to the Financial Statements for the year ended 31 December 2007
316,822,677
130,000,000
250,000,000
150,000,000
2,542,269
(80,990,439)
100,000,000
17,813,116
1,139,938
5,303,851
(121,154,791)
3,033,571
10,776,680
95,577
134,435
(111,702)
169,953
2,906,972
(25,487,587)
(88,723,321)
(437,977,468)
130,000,000
60
32,335
3,063,072
5,072,164
1,373,825
346,808
1,111,792
5,278,704
2,473,876
3,685,085
2,590,623
316,822,677
Taka
2006
13,697
Notes to the Financial Statements for the year ended 31 December 2007
288,199,279 (437,977,468)
93
94 Annual Report 2007 Annual Report 2007 95
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
6.3.1 Market price of investment those market prices were decreases as on 31.12.2007 2007 2006
Differences 7.2 Residual maturity grouping of loans and advances / Taka Taka
Provision to be investments including bills purchased and discounted
Name of the Company Cost price Market price (required) On demand 1,288,428,150 4,712,503,000
Less than three months 7,629,873,000 10,122,531,000
Beximco Pharma 6,280,619 5,694,158 (586,461) More than three months but less than one year 21,301,072,000 13,499,850,000
Rupali Bank 12,395,009 12,168,808 (226,201) More than one year but less than five years 11,400,045,000 9,173,467,000
H R Textile 2,800 2,177 (623) More than five years 6,545,186,000 3,638,931,000
Singer BD. Ltd. 589,155 190,000 (399,155)
48,164,604,150 41,147,282,000
Premier Leasing Int'l Ltd. 2,096,567 1,999,950 (96,617) 7.3 Loans and advances / Investments on the basis of significant
Islamic Finance & Investment 497,150 423,225 (73,925) concentration including bills purchased and discounted
Trust Bank Ltd 24,186,292 21,279,825 (2,906,467) i) Advances to allied concerns of Directors 40,187,521 35,297,944
Premier Bank Ltd. 10,421,063 9,925,600 (495,463) ii) Advances to Chief Executive and Other Senior Executives 53,298,703 73,964,033
Grameen MF Ltd. 1,670,944 1,472,100 (198,844) iii) Advances to large and medium industries 21,485,095,890 15,191,220,811
AIMS of BD LTD 2,575,664 2,194,660 (381,004) iv) Advances to small and cottage industries 37,974,650 36,300,000
Eastern Housing Ltd. 3,385,995 2,654,820 (731,175) v) Advances to Customers' Group 26,548,047,385 25,810,499,212
64,101,257 58,005,323 (6,095,934) 48,164,604,150 41,147,282,000
Provision maintained Tk.6,100,000/
7.4 Number of clients, with amount of outstanding and classified loans, to whom
2007 2006 loans and advances sanctioned more than10% of total capital of the bank:
7 Loans and Advances/Investments Taka Taka Number of the clients 32 35
7.A Loans, Cash Credits and Overdrafts: Amount of outstanding advances (Tk.) 23,516,200,000 19,323,600,000
Inside Bangladesh: Amount of classified advances (Tk.) 62,200,000
Cash credit and overdrafts 9,715,997,777 9,787,406,213 Amount of recovery/rescheduling thereon (Tk.)
Demand loan 843,265,091 1,063,657,578 Outstanding (Tk. in crore) Total
Time Loan 7,497,589,173 5,299,876,293 Non- Total (Tk. (Taka in
Term Loan 18,007,846,511 13,112,934,513 Name of clients Funded Funded in crore) crore)
Consumer Credit Scheme 175,858,566 203,663,122 Deshbandhu Sugar Mills Ltd. and its related concern, 73.81 15.68 89.49 63.86
Bills against Letter of Credit (BLC) 318,201,550 656,427,026 Metro Spinning Limited 48.87 1.82 50.69 51.58
Loan against Import Merchandised (LIM) Generation Next Fashions Limited 60.56 15.46 76.02 60.54
Loan against Trust Receipt (LTR) 6,351,969,326 4,763,253,004 Faar Ceramics Limited 53.41 5.07 58.48 56.55
Export Development Fund (EDF) 134,373,446 302,625,193 Basic Engineering Ltd. and its related concern 19.72
Advances-packaging Credit (PC) 464,677,898 398,421,716 S. M. Shakil Akhtar, Hot Dresses Limited 23.40
Car Loan-Staff 546,873 Grameen Knitwear Limited 13.88 27.97 41.85 51.33
House Building Loan-Staff 117,493,930 115,373,579 United Edible Oils ltd. and its related concern 80.64 54.58 135.22 116.82
Loan-Credit Card 168,058,878 123,300,925 MAB Spinning ltd. and its related concern 64.16 0.91 65.07 43.03
Hussain Pulp and Paper Mills ltd. and its related concern 54.63 3.30 57.93 50.16
Education Loans 390,771 673,902
Chittagong Asian Apparels ltd. and its related concern 16.65 31.15 47.80 39.47
Loan against Foreign Bills 5,492,421 Maksons Spinning Mills 53.61 10.73 64.34 87.06
43,801,215,338 35,828,159,937 Apurupa Garments, Burlingtons Limited 35.25 22.10 57.35 46.93
Investments - IBBs Chaity Composite ltd. and its related concern 99.80 14.24 114.04 103.05
Bai-Muajjal - Investment 636,570,866 396,514,361 Khaleque Knitting and Garments Industries (Pvt.) ltd.
Murabaha - Investment 231,192,865 203,192,777 and its related concern 95.71 51.66 147.37 132.34
Hire Purchase - Investment 698,658,393 608,171,725 ACS Textile (Bangladesh) Limited 72.43 13.33 85.76 78.23
Bai Salam-Investment PHP Continuous Galvanizing Mills ltd. and its related concern 61.93 10.00 71.93 42.40
Mother Steel 2.07 2.07 2.01
Quard against MTDR 163,993,256 106,660,063
Foyjun Ship Breaking Industries ltd. and its related concern 58.60
1,730,415,380 1,314,538,927 J. K. Enterprise and its related concern 13.93 5.32 19.25 21.82
45,531,630,718 37,142,698,864 Bay Leasing and Investment Limited 26.72 11.94 38.66 39.87
Outside Bangladesh Masuma Khatun Textile Industries ltd. 48.03 27.23 75.26 58.53
Marrine Vegetable Oils ltd. and its related concern 39.35 52.34 91.69 34.30
45,531,630,718 37,142,698,864
Abul Khair Steel Industries ltd. and its related concern 48.22 127.50 175.72 45.48
7.B Bills Purchased and Discounted Nasa Taipei Spinners ltd. and its related concern 59.60 3.87 63.47 84.11
(excluding treasury bills) New Line Clothings ltd. and its related concern 37.78 12.50 50.28 39.91
Payable in Bangladesh 2,143,263,174 3,069,602,060 Partex Sugar Mills ltd. and its related concern 77.25 14.07 91.32 80.74
S. Alam Colled Rolled Steel Limited 22.58 49.81 72.39 77.01
Payable outside Bangladesh 489,710,258 934,981,076
Appollo Ispat Complex ltd. and its related concern 62.54 30.28 92.82 73.53
2,632,973,432 4,004,583,136 Mahbub Spinning ltd. and its related concern 54.07 0.67 54.74 48.40
48,164,604,150 41,147,282,000 Refat Garments ltd. and its related concern 30.89 50.70 81.59 54.19
7.1 Performing loans and advances / Investments Biswas Fashion ltd and its related concern 27.75 25.85 53.60 53.13
Fahami Apparels ltd. and its related concern 84.27 37.35 121.62 51.53
Gross loans an advances / investments 48,164,604,150 41,147,282,000 Concrete and Steel Technologies ltd. and its related concern 27.93 3.08 31.01 42.73
Non-performing loans and advances / investments (1,813,938,231) (1,631,786,528) Kabir Steel ltd. and its related concern 41.17 31.62 72.79
46,350,665,919 39,515,495,472 1,589.49 762.13 2,351.62 1,932.36
98 Annual Report 2007 Annual Report 2007 99
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
8
7.9
7.B
7.B.1
Cost
Land
Buildings
Annual Report 2007
Bank's vehicles
Others Security
Share Certificate
Export Document
1,708,110,172
1,881,110,327
21,792,481
174,117,591
2,632,973,432
964,490,000
954,120,432
2,632,973,432
48,164,604,150
173,000,155
277,325,868
658,189,511
749,684,876
489,710,258
2,143,263,174
7,966,380,676
7,072,990,003
5,477,000
3,512,565,066
65,334,000
287,195,000
3,233,688,878
7,450,000
20,479,000
50,000,000
710,871,501
25,297,507,026
Taka
2007
649,029,000
Notes to the Financial Statements for the year ended 31 December 2007
1,300,385,135
1,411,156,239
23,297,449
140,686,258
4,004,583,136
1,294,322,000
2,078,052,136
4,004,583,136
41,147,282,000
110,771,104
200,232,949
485,869,940
561,069,643
25,531,000
934,981,076
3,069,602,060
5,045,127,691
5,595,713,374
3,191,000
4,003,419,666
566,101,000
3,034,005,547
5,200,000
8,615,000
50,000,000
520,539,000
22,315,369,722
606,678,000
Taka
2006
Own assets
Office:
Land 561,069,643 188,615,233 749,684,876 749,684,876
Buildings 485,869,940 26,181,500 146,138,071 658,189,511 4 22,729,982 18,527,692 41,257,674 616,931,837
Furniture and fixtures 93,111,432 76,867,918 169,979,350 10 10,251,772 12,615,377 22,867,149 147,112,201
Office appliances 1,930,426 104,150 2,034,576 20 1,160,701 164,786 1,325,487 709,089
Electrical appliances 70,935,330 32,852,184 103,787,514 20 13,392,180 15,596,930 28,989,110 74,798,404
Motor vehicles 1,527,767 20,000 (36,666) 1,511,101 20 1,463,599 1,463,599 47,502
Residence of executives:
Furniture and fixtures 1,070,290 225,000 1,295,290 10 402,627 79,915 482,542 812,748
Electrical appliances 8,933,694 975,000 (500,000) 9,408,694 20 4,255,387 1,001,718 (326,762) 4,930,343 4,478,351
1,224,448,522 137,225,752 334,753,304 (536,666) 1,695,890,912 53,656,248 47,986,418 (326,762) 101,315,904 1,594,575,008
Leased assets
At 31 December 2007 1,411,156,239 143,358,252 334,753,304 (8,157,469) 1,881,110,326 110,771,104 69,529,925 (7,300,875) 173,000,154 1,708,110,172
Annual Report 2007
Notes to the Financial Statements for the year ended 31 December 2007
At 31 December 2006 844,402,698 567,053,541 (300,000) 1,411,156,239 53,781,693 57,121,794 (132,383) 110,771,104 1,300,385,135
101
102 Annual Report 2007 Annual Report 2007 103
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
13 Share Capital
12.6 Deferred tax liability
Balance as on 1st January, 2007 13,353,300 (1,082,600)
13.1 Authorized
Addition during the year 19,438,767 14,435,900
35,000,000 Ordinary shares of Tk.100.00 each 3,500,000,000 3,500,000,000
Balance as on 31st December, 2007 32,792,067 13,353,300
To maintain the deferred tax liability of Tk.3,27,92,067 as at 31 December 2007 a deferred tax provision 13.2 Issued, subscribed and fully paid up Capital
of Tk.1,94,38,767 has been made during the year 2007 as per BAS-12 "Income Taxes". 14,713,696 Ordinary shares of Tk.100.00 each issued for cash 1,471,369,600 1,471,369,600
8,103,887 Ordinary shares of Tk.100.00 each issued as bonus shares 810,388,700 641,369,600
22,817,583 2,281,758,300 2,112,739,200
12.7 Provision for Taxation during the year
Provision for previous year 168,994,743 13.3 Shareholding position was as follows
Current tax provision 1,185,639,039 714,000,000 Face Value/Taka
Deferred tax provision 19,438,767 14,435,900 Number Percentage 2007 2006
Sponsors 6,590,076 28.88% 659,007,600 783,417,400
1,374,072,549 728,435,900
Financial Institutions & Investor A/C holders 4,212,640 18.46% 421,264,000 474,646,200
General Public & Others 12,014,867 52.66% 1,201,486,700 854,675,600
12.8 Obligation under Capital lease/Finance lease
22,817,583 100% 2,281,758,300 2,112,739,200
This represents fixed assets acquired under lease. Lease rentals include financial charges which have been
used as discounting factor and are payable on monthly basis. The Company has an option to purchase the
assets upon completion of lease period and has intention to exercise the option. 13.4 Classification of shareholders by holding
Number of holders % of Total holding
Leased Obligation on Fixed Assets 31-Dec-07 31-Dec-06 2007 2006
Leased Obligation on Furniture and Fixture 54,981,676 74,525,532 Less than 500 shares 8,337 7,123 3.14 4.58
Leased Obligation on Electrical Appliance 25,648,784 38,319,396 501 to 5,000 shares 1,053 1,455 5.86 9.85
Leased Obligation on Motor Vehicles 6,518,363 2,340,478 5,001 to 10,000 shares 69 88 2.22 3.05
87,148,823 115,185,406 10,001 to 20,000 shares 53 54 3.63 3.64
20,001 to 30,000 shares 11 23 1.16 2.71
30,001 to 40,000 shares 24 22 3.66 3.59
12.8.1 Movement of leased obligation on Fixed Assets:
40,001 to 50,000 shares 14 12 2.83 2.57
Opening balance as on 1st January, 2007 115,185,406 149,312,722
50,001 to 100,000 shares 27 29 9.12 10.38
Less: Adjustment during the year (34,169,083) (34,552,522)
100,001 to 1,000,000 shares 46 49 49.51 59.63
Add: Addition during the year 6,132,500 425,206
Over 1,000,000 shares 2 18.87
Closing balance as on 31st December, 2007 87,148,823 115,185,406 9,636 8,855 100.00 100.00
108 Annual Report 2007 Annual Report 2007 109
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Notes to the Financial Statements for the year ended 31 December 2007 Notes to the Financial Statements for the year ended 31 December 2007
Earnings per share (EPS) in 2007 53.60 59.71 1. Mr. Alamgir Kabir, FCA Chairman 226, Dilu Road,
New Eskaton, Dhaka 0.90%
EPS for the year 2006 is restated in consideration with issue of bonus shares @8% in year 2007
Notes to the Financial Statements for the year ended 31 December 2007 Balance Sheet Islami Banking Branches at 31 December, 2007
41 Name of the Directors and the entities in which they had interest as at 31 December 2007 Annexure - A
2007 2006
Sl.
PROPERTY AND ASSETS Taka Taka
No. Name of Directors Designation Entities where they % of
have interest Position Share-
Cash:
holdings In hand (Including Foreign Currencies) 36,640,332 30,114,779
Balance with Bangladesh Bank & Sonali Bank
1. Mr. Alamgir Kabir, FCA Chairman (Including Foreign Currencies) 2,829,597 8,044,867
2. Tillaghar Holdings Limited Vice The Sylhet Tea Co. Limited Director 78.33% 39,469,929 38,159,646
(represented by Mr. Abdul Hye) Chairman Rajangar Tea Co. Limited Director 33.33% Balances with Other Banks and Financial Institutions:
Union Syndicate Limited Director 19.58% In Bangladesh 16,126,420 11,916,618
Star Tea Estate Limited Director 46.77% Outside Bangladesh
16,126,420 11,916,618
3. MK Holdings Limited Rose Corner (Pvt.) Limited Director 25.00%
Money at Call on Short Notice
Director Mutual Real Estate Limited Director 25.00%
Investments including bills
(represented by Mrs. Sultana Kashem)
Profit and Loss Account of Islami Banking Branches for the year ended 31 December, 2007 Statement of tax position as at 31st December, 2007
Annexure - A
Annexure B
Present
Settled
Settled
Settled
Settled
Settled
Settled
Settled
Settled
Settled
status
Income from Investment 667,528,205 369,982,899
Profit paid on Deposits & Borrowings etc. (459,777,203) (250,101,956)
Net investment income 207,751,002 119,880,943
429,754
(7,522,416)
(30,197,414)
(37,290,076)
(Shortage) of
Tax paid
Commission, Exchange & Brokerage 19,699,269 11,619,030
Excess/
Other Operating Income 12,088,917 11,058,083
Total Operating Income (A) 239,539,188 142,558,056
(8,980,811)
(13,534,700)
(31,391,434)
9,314,167
14,621,488
(37,327,477)
(43,466,928)
41,315,910
(8,371,017)
51,139,778
(168,994,743)
(195,675,767)
(Shortage) of
provision
Rent, Taxes, Insurance, Lighting etc. 14,849,255 7,273,581
Excess/
Postage, Stamp, Telegram & Telephone 3,957,327 2,993,539
Stationery, Printing, Advertisement 1,479,943 1,088,343
Depreciation on and repairs to Bank's property 4,478,528 3,627,828
Other expenses 9,430,968 14,025,548
Total Operating Expenses (B) 62,242,078 47,193,203
12,238,230
34,012,284
42,494,020
75,685,833
99,878,512
168,819,477
225,452,928
258,021,090
256,314,771
492,135,222
882,994,743
2,548,047,110
Tax paid
Profit/(Loss) before Provision (C=A-B) 177,297,110 95,364,853
Provisions
Provision for Loans and Advances 21,325,000 14,581,000
Provision for Off-Balance Sheet Exposures 3,520,000
12,238,230
41,534,700
72,691,434
75,685,833
99,878,512
168,819,477
225,452,928
258,021,090
255,885,017
492,135,222
882,994,743
2,585,337,186
assessment
Tax as per
Provision for diminution in value of investment
order
Other Provisions
Total Provision (D) 24,845,000 14,581,000
Profit/(Loss) before Taxes (C-D) 152,452,110 80,783,853
Tax provision
3,257,419
28,000,000
41,300,000
85,000,000
114,500,000
131,492,000
181,986,000
299,337,000
247,514,000
543,275,000
714,000,000
2,389,661,419
accounts
as per
19971998
19981999
19992000
20002001
20012002
20022003
20032004
20042005
20052006
20062007
20072008
Assessment
year
Accounting
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
year
122 Annual Report 2007 Annual Report 2007 123
Highlights on the overall activites of the bank for the year ended 31 December 2007
Southeast Bank Limited
Registered Office
1, Dilkusha C/A (3rd Floor), Dhaka -1000
Annexure - C
Notice of the 13th Annual General Meeting
SL. Particulars 2007 2006 Notice is hereby given to all members of Southeast Bank Limited that the 13th Annual General Meeting of the
No. (Taka) (Taka) Shareholders of the Company will be held on April 28, 2008 at 10.00 a.m. at Hall of Fame, Bangladesh-
China Friendship Conference Centre, Agargaon, Sher-E-Bangla Nagar, Dhaka - 1207 to transact the following
1 Paid up Capital 2,281,758,300 2,112,739,200 business and adopt necessary resolutions:
2 Total Capital (core+suplementary) 6,468,361,219 4,940,916,000
AGENDA
3 Capital surplus deficit 1,490,616,809 1,074,478,740
1. To receive, consider and adopt the Profit and Loss Accounts of the Company for the year ended on 31st
4 Total Assets 64,370,690,040 53,706,124,795 December, 2007 and the Balance Sheet as at that date together with the Reports of the Board and the
Auditors thereon.
5 Total Deposits 55,474,048,109 46,056,183,240
2. To declare dividend for the financial year ended 31st December 2007.
6 Total Loans and Advances 48,164,604,150 41,147,282,000
3. To elect / re-elect Directors in place of those who shall retire in accordance with law/rules.
7 Total Contingent Liabilities and Commitments 21,670,608,579 23,812,293,630
4. To appoint Auditors for the term until the next Annual General Meeting and fix their remuneration.
8 Credit Deposit Ratio (%) 86.82% 89.34%
5. To transact any other related business with the permission of the Chair.
9 Percentage of classified loans against total
loans and advances 3.77% 3.97% All Members are requested to attend the meeting on the date, time and place mentioned above.
11 Amount of classified loans during current year 1,813,938,231 1,631,786,528 By order of the Board
12 Provisions kept against classified loan 1,075,932,628 1,117,350,408
15 Interest earning Assets 55,806,108,329 46,488,844,133 Dated: April 07, 2008 Muhammad Shahjahan
Senior Executive Vice President
16 Non-interest earning Assets 8,564,581,710 7,217,280,662
& Company Secretary
17 Return on Investment (ROI) 19.90% 18.42%
Principal Branch Chouhatta Branch Bandar Bazar Branch (Islamic Banking) Shyamoli Branch
1, Dilkusha Commercial Area, Dhaka-1000 Manru Shopping City Karimullah Market (1st Floor) ASA Tower (2nd Floor)
Tel : 9550081, 9567271-2, 9563101 Plot # 4953/4943 (1st Floor) Bandar Bazar, Sylhet 23/3 & 23/14, Khilji Road, Shyamoli
Fax : 88-02-9551575 Chouhatta Mirboxtola Road Tel : 0821-810322, 0821-812246 Mohammadpur, Dhaka
Chouhatta, Sylhet Fax : 0821-816111 Tel : 8123551, 8112250, 8128678, 8112227
Agrabad Branch Tel : 0821-720726, 0821-720277 Fax : 88-02-8120687
Jahan Building Fax : 88-0821-720276
59, Agrabad Commercial Area, Chittagong Banani Branch Joypara Branch (Rural)
Tel : 031-713097-8, 031-713094-5, 031-721151-3 Plot # 71, Block # B Begum Aysha Shopping Complex (1st Floor)
Fax : 88-031-713096 Karwan Bazar Branch Kemal Ataturk Avenue
Pragati - RPR Centre Holding # 222, Joypara Pourasava
Banani, Dhaka Dohar, Dhaka
Khatunganj Branch 20-21, Karwan Bazar (1st Floor)
Tel : 9860363, 8861697, 8859518, 8859987, 8861629 Tel : 06223-56040
410/411, Khatunganj, Chittagong Dhaka-1215 Fax : 06223-56040
Fax : 88-02-8861960
Tel : 031-2863594, 031-621934 Tel : 9136112, 9139276-8
031-620166-7, 031-620516 Fax : 88-02-9136510 Kakrail Branch
Fax : 88-031-62 05 17 Kulaura Branch (Rural)
Green House, Juri Road Musafir Tower (2nd Floor)
Halishahar Branch 90, Kakrail, Dhaka
Laldighirpaar Branch House # 02 (1st Floor) Kulaura, Moulvi Bazar
Tel : 9348551, 9330860, 9338934, 9330798
1778/1779, New Market, Sylhet Road # 03, Lane # 03 Tel : 08624-56208 Fax : 88-02-9348559
Tel : 0821-710955, 0821-715382, 0821-710218 Block-K, Halishahar Housing Estate Fax : 08624-56208
Fax : 88-0821-710102 Halishahar, Chittagong Madhabdi Branch (Rural)
Tel : 031-716826, 031-2526183, 031-2526184 Feni Branch Madhabdi Pauroshava
Imamganj Branch Surma Sadan (1st and 2nd Floor) Narshingdi
Fax : 88-031-727949
Bhuiyan Market Tel : 06257-56125-6
163/2, Mitford Road, Dhaka 176, 177 and 178 Trunk Road, Feni
Shahjalal Uposhahar Branch Tel : 0331-62884 Fax : 06257-56127
Tel : 7314801, 7316423, 7318567,
Fax : 88-02-7316644 Plot # 07, Block # D Fax : 0331-62884 Ext.-102
Main Road, Shahjalal Uposhahar Rangpur Branch
Sylhet RDRS Complex
Bangshal Branch Motijheel Branch (Islamic Banking)
Tel : 0821-711820, 0821-811655, 0821-810961 9416, Jail Road
14/3, North South Road, Dhaka 125, Motijheel C/A (1st Floor)
Fax : 88-0821-816007 Radhaballab, Rangpur
Tel : 7121248, 7121251, 9567163, 7176116, Dhaka-1000
7176117 Tel : 0521-64672, 64673, 64778, 64779
Tel : 9567286, 9567202, 9567303, 9567262 Fax : 0521-64780
Fax : 88-02-9567164 New Eskaton Branch Fax : 88-02-9567701
Chowdhury Centre Ashulia Branch (Rural)
Jubilee Road Branch 23/Ka, New Eskaton Road
Haji Golam Rasul Market CDA Avenue Branch (Islamic Banking) Helim Shopping Complex
(1st Floor), P.S. : Ramna Ashulia, Dhaka
96, Jubilee Road, Chittagong Ali Villa, 1640/1861 (New), CDA Avenue
Dhaka-1000 Tel : 7788440, 7788420
Tel : 031-611712-5, 031-635245, 031-635246 Tel : 9360953, 9340001, 9330176, 9340796 Panchliash, Chittagong
Fax : 88-031-611716 Tel : 031-652150, 031-654875 Fax : 88-02-7788441
Fax : 88-02-9362177
Fax : 031-654875 Ext. 300
Moulvibazar Branch Bashurhat Branch (Rural)
Jarif Tower New Elephant Road Branch Syeed Mansion
Kazi Bhaban Hetimgonj Branch (Rural) Holding # 75, Main Road
199/2, M. Saifur Rahman Road Khoyruganj Jame Masjid Market Complex (1st Floor)
Moulvibazar 39, New Elephant Road Bashurhat Pauroshava
Tel : 0861-53727-9 (1st and 2nd Floor), Dhaka-1205 Hetimgonj Chowrasta, Golapgonj, Sylhet Companyganj, Noakhali
Fax : 88-0861-53730 Tel : 9674588, 9674327, 9674324-5 Tel : 0821-841472, 0821-841471 Tel : 03223-56415, 56461
Fax : 88-02-9674326 Fax : 0821-841473 Fax : 03223-56430
Gulshan Branch
House # 82 CES (F) 1 Agargaon Branch Aganagar Branch (Rural) Chowmuhani Branch (Rural)
Gulshan Avenue, Dhaka Plot # E-4/B (1st Floor) Hassan Market (1st Floor) Hossain Market
Tel : 9883491, 9883401-5, 9883492 Agargaon Administrative Area Holding # 276-284, D. B Road
Keranigonj, Dhaka
Fax : 88-02-9883495 Sher-e-Bangla Nagar Chowmuhani Pauroshava
Tel : 7772516, 7761133 Begumganj, Noakhali
Dhaka-1207 Fax : 88-02-7761155
Khulna Branch Tel : 9132747, 9134247 Tel : 0321-53534, 0321-53535
155, Sir Iqbal Road, Khulna Fax : 88-02-9132704 Fax : 0321-54018
Tel : 041-730606, 041-731406, 041-731306, 041-731606 Corporate Branch
Fax : 88-041-731506 Chhagalnaiya Branch (Islamic Banking)
Eunoos Trade Centre (Ground Floor) Pahartali Branch
52-53, Dilkusha C/A Hajrat Taiyabia Complex
Mir Shopping Complex (1st Floor)
Dhanmondi Branch Chhagalnaiya Bazar, Feni Dhaka-1000 Holing # 801 (New)
House # 23 (New), Road # 16 (New)/27 (Old) Tel : 9567764, 9551444, 9571424, 9554447 D. T Road, Alongkar Mour
Tel : 03322-78302 Pahartali, Chittagong
Dhanmondi R/A, Dhaka Fax : 88-02-9567764 Ext.-200
Tel : 8126787, 8122474, 8126785-6 Fax : 03322-78302 Tel : 031-2771001, 031-2771002-4
Fax : 88-02-8122420 Fax : 031-2771005
Cox's Bazar Branch (Islamic Banking) Pathantula Branch
Uttara Branch Asha Shopping Complex Holding # 1227/1228 (New) Narayanganj Branch
House # 1, Road # 11, Sector # 1 430-431, Bazar Ghata (1st Floor) and 2406/2407 (Old), Pathantula 26-29, S. M Maleh Road
Uttara, Dhaka-1230 Cox's Bazar Sylhet Sadar, Sylhet Tanbazar, Narayanganj
Tel : 8923680, 8916538, 8922538 Tel : 0341-63406, 0341-51053 Tel : 0821-724545 Tel : 7648200, 7648201, 7648202, 7648203
Fax : 88-02-8918689 Fax : 0341-64742 Fax : 0821-724300 Fax : 88-02-7634331
Southeast Bank Limited
1, Dilkusha Commercial Area, Dhaka-1000
I/We of
appoint Mr./Mrs. of
as my/our proxy to attend and vote on my/our behalf at the 13th Annual General Meeting of the company to be
held on April 28, 2008 and at any adjournment thereof.
Signature Verified
ATTENDANCE SLIP
I/We hereby record my/our attendance at the 13th AGM being held today, the April 28, 2008 at 10:00 a.m. at Hall
of Fame, Bangladesh-China Friendship Conference Centre, Agargaon, Sher-E-Bangla Nagar, Dhaka-1207.