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National Credit and Commerce Bank Limited

Notes to the Financial Statements


As at and for the period ended December 31, 2010 1.1 1.1.1 Status of the bank The National Credit and Commerce Bank Limited (NCCBL) was formed as a public limited banking company incorporated in Bangladesh with primary objective to carry on all kinds of banking business in and outside Bangladesh. The registered office of the Bank is located at 7-8, Motijheel Commercial Area, Dhaka-1000. It has 79 branches all over the Bangladesh and the bank has no overseas branches as at December 31, 2010. It carries out all banking activities through it branches in Bangladesh. The Bank went for Initial Public Offering in 1999 and its share is listed with Dhaka and Chittagong Stock Exchange Limited as a publicly traded company for its general class of shares. The bank commenced its banking business with sixteen branches from May 17, 1993. Principal activities The commercial banking business activities of the bank encompass a wide range of services including accepting deposits, making loans, discounting bills, conducting money transfer, foreign exchange transactions and performing other related services such as safekeeping collection, issuing guarantees, acceptances and letter of credits through its branches in Bangladesh. The bank undertakes investments of its fund in the share investment and also engaged in buying and selling of securities for its customers through Brokerage House. The bank carries out all these activities by using a membership share of Dhaka Stock Exchange Limited & Chittagong Stock Exchange Limited. Moreover, as per guideline of Bangladesh Bank and The Securities & Exchange Commission, Bank has taken steps to form two subsidiary companies for Stock Brokerage business and Merchant Banking. 1.2 1.2.1 Significant accounting policies and basis of preparation of financial statements Basis of accounting Statement of compliance The financial statements of the bank are made up to December 31, 2010 and are prepared under the historical cost convention except investments, land & properties and in accordance with the First Schedule Section 38(4) of the Bank Companies Act, 1991, BRPD Circular # 14 dated 25 June, 2003, other Bangladesh Bank Circulars, Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards, The Companies Act, 1994, The Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges listing regulations and other laws and rules applicable in Bangladesh. 1.2.2 Basis of consolidation A separate set of records for consolidation of the statement of affairs and income and expenditure account of the branches are maintained at head office of the bank based on which these financial statements have been prepared. All significant inter branch transaction are eliminated on consolidation. 1.2.3 Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. 1.2.4 Going concern The financial statements have been prepared on a going concern basis, which contemplate the realization of assets and the satisfaction of liabilities in the normal course of business.

1.1.2

1.1.3 1.1.4

1.2.5

Functional and presentation currency The financial statements are presented in Bangladeshi Taka which is the bank's functional currency except as indicated. Materiality & aggregation Each significant material item as considered by the management has been presented separately in the financial statements. No amount has been set off unless the bank has a legal right to set off the amounts is intended to settle on net basis. Income and expenses are presented on a net basis only when permitted by the relevant Accounting Standards. Foreign currency transaction a) Foreign currencies translation Foreign currency transactions are converted into equivalent taka using the ruling exchange rates on the dates of respective transactions as per BAS-21 The Effects of Changes in Foreign Exchange Rates. Assets and liabilities in foreign currencies are converted into taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month. b) Commitments Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance sheet date. c) Translation gains and losses The resulting exchange transaction gains and losses are included in the profit and loss account.

1.2.6

1.2.7

1.2.8

Cash flow statement Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 Cash Flow Statements under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

1.2.9

Liquidity statement The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as per the following bases. i) ii) iii) iv) v) vi) vii) viii) Balance with other banks and financial institutions, money at call and short notice, etc. are shown on the basis of their maturity term; Investments are on the basis of their respective maturity; Loans and advances / investments are on the basis of their repayment schedule; Fixed assets are on the basis of their useful lives; Other assets are on the basis of their realization / amortization; Borrowing from other banks, financial institutions and agents, etc. are as per their maturity / repayment terms; Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors; Provisions and other liabilities are on the basis of their payment / adjustments schedule.

1.2.10 Reporting period These financial statements cover for the period from January 01, 2010 to December 31, 2010. 1.3 1.3.1 Assets and basis of their valuation Cash and cash equivalents Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial asset which are subject to insignificant risk of changes in their fair value and are used by the bank management for its short-term commitments.

1.3.2

Loans and advances a) b) Loans and advances of conventional banking in branches are stated in the balance sheet on gross basis. Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest on classified loans and advances are kept in suspense account as per Bangladesh Bank instructions and such interest is not accounted for as income until realized from borrowers (please refer Note- 9.10 (x) Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts. Provision for loans and advances are made on the bases of year-end review by the management following instructions contained in Bangladesh Bank BCD Circular no. 34 dated 16 November 1989, BCD Circular no. 20 dated 27 December 1994, BCD Circular no. 12 dated 4 September 1995, BRPD Circular 16 dated 6 December 1998, BRPD Circular no. 9 dated 14 May 2001, BRPD Circular no. 09 of August 2005 and BRPD Circular no.17 dated 06 December 2005. The classification rates are given below: Particulars General provisions on unclassified general loans and advances General provision on unclassified small enterprise financing General provision on unclassified loans for housing finance and on loans for professionals General provision on unclassified consumer financing other than housing finance and loans for professionals General provision on special mention account Specific provision on substandard loans and advances Specific provision on doubtful loans and advances Specific provision on bad / loss loans and advances Rate 1% 2% 2% 5% 5% 20% 50% 100%

c)

d) Loans and advances with no realistic prospect of recovery have been written off against which full provisions made and legal cases initiated but pending. Detailed memorandum records for all such written off accounts are maintained without reducing the banks claim. 1.3.3 Investments All investment securities are initially recognized at cost, being fair value of the consideration given, including acquisition charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield method and are taken to discount income. The valuation methods of investments used are: Held to maturity (HTM) Investments which have fixed or determinable payments and are intended to be held to maturity other than those that meet the definition of held at amortized cost-others are classified as held to maturity. These investments are subsequently measured at present value as per Bangladesh Bank guideline. Investments in securities have been revalued as mark to market as at December 31, 2010. The gain of revaluation from the held to maturity securities has been shown in the statement of changes in equity of December 31, 2010. Held for trading (HFT) Investments classified in this category are acquired principally for the purpose of selling or repurchasing in short-trading or if designated as such by the management after initial recognition, investments are measured at fair value and any change in the fair value is recognized.

Value of investments has been enumerated as follow: Item Government treasury bills Government treasury bonds ICBs Debenture Prize bonds Quoted shares Un-quoted shares Investment in listed securities These securities are bought and held primarily for the purpose of selling them in future of held for dividend income. These are reported at cost unrealized gains are not recognized in the profit and loss account. Investment in unlisted securities Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of book value over cost for determining the carrying amount of investment in unlisted securities. 1.3.4 Property, plant and equipment a) Land and building were revalued on 31.12.2008. Fixed assets are stated at historical cost or revalued amount (whenever applicable) less accumulated depreciation as per BAS -16 Property, Plant and Equipment the cost of acquisition of an assets comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non refundable taxes. b) The bank recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have been put into operation such as repairs and maintenance is normally charged of as revenue expenditure in the period in which it is incurred. c) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets other than vehicles and software on which straight line depreciation method is followed and no depreciation on land is charged: Category of fixed assets Land Building/Apartment & Structure Furniture & fixture Office equipment & Machineries Software (straight line) Vehicles (straight line) Rate Nil 2.5% 10.00% to 20.00% 20.00% 20.00% 20.00% Applicable accounting Value Present value Present value Present value At cost As per BRPD Circular no.14 dated June 25, 2001 At cost

d) For additions during the year, depreciation is charged for the remaining days of the period and for disposal depreciation is charged up to the date of disposal. e) On disposal of fixed assets the cost and accumulated depreciation are eliminated from the fixed assets schedule and gain or loss on such disposal is reflected in the profit and loss account which is determined with reference to the net book value of the assets and net sale proceeds.

Other assets a) Provision for other assets Other assets have been clarified as per BRPD circular no. 14 dated 25.06.2001 of Bangladesh Bank and necessary provisions made thereon accordingly and for item not covered under the circular adequate provision have been made considering their realisability. b) Written off other assets Other assets having no realistic prospect of recovery have been written off and full provisions have been kept against the debts. Notional balance against the written off investments have been kept to maintain the detailed memorandum records for written off account. Non-banking assets There are no assets acquired in exchange for loan during the year of financial statements. 1.3.5 Leasing Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of ownership to the lessee as per BAS-17 Lease. The Bank as lessor Amount due from lessees under finance leases are recorded as receivables at the amount of the Banks Loans and Advances in the leases. The Bank as lessee The Bank has no assets under finance or operating Leases. 1.4 1.4.1 Basis for valuation of liabilities and provisions Provision for taxation Provision for current income tax has been made @ 42.5% as prescribed in the Finance Act, 2010 on the accounting profit made by the Bank after considering some of the add backs to income and disallowances of expenditure as per income tax laws in compliance with BAS-12 Income Taxes. 1.4.2 Deferred taxation Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary differences. Deferred tax assets and liabilities are recognized for the future tax consequences of timing difference arising between the carrying values of assets, liabilities, income and expenditure and their respective tax bases. Deferred tax assets & liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date. The impact on the account of changes in the deferred tax assets and liabilities has also been recognized in the profit and loss account as per BAS -12 Income Taxes. 1.4.3 Dividend payments Interim dividends are recognized when they are paid to shareholders. Final dividend is recognized when it is approved by the shareholders. Dividend payable to the banks shareholders are recognized as a liability and deducted from the shareholders equity in the period in which the shareholders right to receive the payment is established. 1.4.4 Statutory reserve Bank Companies Act, 1991 requires the bank to transfer not less than 20% of its current period profit before tax to reserve until such reserve equals to its paid up capital.

1.4.5

Revaluation reserve When an assets carrying amount is increased as a result of a revaluation, the increased amount credited directly to equity under the heading of revaluation surplus/reserve as per BAS-16: Property, Plant and Equipment. The Bank revalued the assets of Land and Buildings which is absolutely own by the Bank and the increased amount transferred to revaluation reserve. The tax effects on revaluation gain are measured and recognized in the financial statements as per BAS-12: Income Taxes

1.4.6

Benefits to the employees The retirement benefits accrued for the employees of the bank as on reporting date have been accounted for in accordance with the provisions of BAS-19 Employee Benefits. The bank operates retirement benefits scheme for its permanent employees. Elements of which are as under: a) Provident fund Provident fund benefits are given to the permanent employees of the bank in accordance with banks service rules. Accordingly a trust of deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone-04, Dhaka has approved the provident fund as a recognized provident fund within the meaning of section 2(52), read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from 16.01.1992. The fund is operated by a Board of Trustees consisting 06 (six) members. All confirmed employees of the bank are contributing 10% of their basic salary as subscription to the fund. The bank also contributes equal amount of the employees contribution. Interest earned from the investments is credited to the members account on yearly basis. b) Gratuity fund The bank has operated funded gratuity fund which was approved by National Board of Revenue on. The fund is operated Board of Trustees. Provision in respect of which is made annually covering all its permanent eligible employees as per BAS-19 Employee Benefits. c) Superannuation fund The bank operates an employees Superannuation Fund Trust by a separate Board of Trustees consisting of 05 (Five) members. The death-cum survival benefits are given to the employees as per the eligibility narrated in the Trust Rules. The fund got recognition from the National Board of Revenue (NBR) effect from 01.01.2004 under the section 3 and 4 of part A of First Schedule of Income Tax Ordinance 1984. The bank contributes to the fund annually as per Superannuation Fund Rules of the bank. d) Benevolent Fund NCCBL employees benevolent fund was established in the year 2007 for the welfare of the distressed employees and their dependents. The employees of the bank contribute to the fund at a rate applicable for each grade from their monthly salary. 1.4.6 Provision for liabilities A provision is recognized in the balance sheet when the bank has a legal or constructive obligation of a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligation in accordance with the BAS-37 Provisions, Contingent Liabilities and Contingent Assets.

1.5 1.5.1

Revenue recognition Interest income In terms of the provision of the BAS-18 Revenue the interest income is recognized on accrual basis. Interest on loans and advances ceases to be taken in to income when such advances are classified. It is than kept in interest suspense in a memorandum account. Interest on classified advances is accounted for on a cash receipt basis.

1.5.2

Investment income Interest income on investments is recognized on accrual basis. Capital gain on investments in shares is also included in investment income. Capital gain is recognized when it is realized.

1.5.3

Fees and commission income Fees and commission income arises on services provided by the bank are recognized on a cash received basis. Commission charged to customer on letters of credit and letters of guarantee is credited to income at the time of effecting the transactions.

1.5.4

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

1.6

Reconciliation of inter-bank and inter-branch account Accounts with regard to inter-bank are reconciled regularly and there are no material differences which may affect the financial statements significantly. Un-reconciled entries / balances incase of inter-branch transaction as on the reporting date are not material.

1.7

Risk management The risk of NCCBL is defined as the possibility of losses, financial of otherwise. The risk management of the bank covers core risk areas of banking viz, credit risk, liquidity risk, operational risk and reputation risk arising from money laundering incidences. The prime objective of the risk management is that the bank evaluates and takes well calculative business risks and there by safeguarding the banks capitals, its financial resources and profitability from various business risks through its own measures and through implementing Bangladesh Bank guidelines and following some of the best practices as under:

1.7.1

Credit risk It arises mainly from lending, trade finance, leasing and treasury business. This can be described as potential loss arises from the failure of a counter party to perform as per contractual agreement with the bank. The failure may result from unwillingness of the counter party of decline in his or her financial condition there for the banks credit risk management activities have been designed to address all these issues. The Bank has segregated duties of the officers / executives involved in credit related activities a separate corporate division has been formed at Head office which is entrusted with the duties of maintaining effective relationship with the customers, marketing of credit products, exploring now business opportunities etc. more over, credit approval, administration, monitoring and recovery functions have been segregated. For this purpose, three separate units have been formed within the credit division these are a) Credit risk Management Unit b) Credit Administration Unit and c) Credit monitoring and recovery Unit. Credit risk management Unit is entrusted with the duties of maintaining assets quality, assessing risk in lending to a particular customer, sanctioning credit, formulating policy / strategy for lending operation, etc. Adequate provision has been made on classified loans is shown in Note 14.4 (a). A thorough assessment is done before sanction of any credit facility at Credit Risk Management unit. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facility, etc. The assessment process starts at Corporate Credit Division by the Relationship Manager / Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority. Credit approval authority has been delegated to the individual at executives. Proposals beyond their delegation are approved / declined by the Executives Committee and / or the Management of the Bank. In determining Single borrower / large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit is conducted at periodical intervals to ensure compliance of Banks and Regulatory policies. Loans are classified as per Bangladesh Banks guidelines. Concentration of single borrower/large loan limit is shown in Annexure-D.

1.7.2

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

1.7.3

Market risk The exposure of market risk of the bank is restricted to foreign exchange risk, interest rate risk and equity risk. Foreign exchange risk Foreign exchange risk is defined as the potential change in earning due to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments and other remittance requirements. No foreign exchange dealing on Banks account was conducted during the year. Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly basis and the management for its settlement reviews outstanding entry beyond 30 days. The position maintained by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank. Interest rate risk Interest rate risk may arise either from trading portfolio and non-trading portfolio. The trading portfolio of the Bank consists of Government treasury bills of 28 days maturity. The short-term movement in interest rate is negligible or nil. Interest rate risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset liability Committee (ALCO) monitors the interest rate movement on a regular basis. Equity risk Equity risk arises from movement in market value of equities held. The market value of equities is lesser than cost price against which provision is appearing made in these financial statements.

1.7.4

Reputation risk arising from money laundering incidences Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. For mitigating the risks, the bank has a designated Chief Compliance officer at Head office and Compliance officers at branches, who independently review the transactions of the accounts to verify suspicious transactions. Manuals for prevention of money laundering have been established and transaction profile has been introduced. Training is continuously given to all the category of Officers and Executives for developing awareness and skill for identifying suspicious activities / transactions. Operational risk Operational risk may arise from error and fraud due to lack of internal control and compliance. Management through internal control and compliance division controls operational procedure of the Bank. Internal Control and compliance division undertakes periodical and special audit of the branches and departments at the Head Office for review of the operation and compliance of statutory requirements. The Audit Committee of the Board subsequently reviews the reports of the internal control and compliance division.

1.7.5

1.8

Earnings per share Basic earning per share Basic earning per share has been calculated in accordance with BAS-33 Earning per Share which has been shown on the face of the profit and loss account. This has been calculated by dividing the basic earning by the weighted average number of ordinary shares outstanding during the period. Weighted average number of shares has been calculated with effects of Right share issued during the period ended December 31, 2010. The bonus shares issued during the period were treated as if they had been in issue in previous year also (declared for 2009 result). Hence, in computing the basic earning per share of December 31, 2009, the total number of shares including the said bonus shares has been considered as the weighted average number of shares outstanding during the period 2009 as per BAS-33 Earning per Share. Diluted earnings per share No diluted earning per share is required to be calculated for the year as there was no scope for dilution during the year under review.

1.9

Off-balance sheet items & provisions Off balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh Bank guidelines. Provision for Off-balance sheet items is made as per instruction contained in BRPD Circular # 10, dated September 18, 2007 @ 1% on Off-balance sheet items as on December 31, 2010.

1.10

Memorandum items Memorandum items are maintained to have control over all items of importance and for such transactions where the Bank has only a business responsibility and no legal commitment. Stock of Travelers Cheques (TC), Saving Certificates and other fall under the memorandum items.

1.11

Offsetting Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

1.12

Compliance of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS): Name of the BAS Presentation of Financial Statements Inventories Cash Flow Statements Accounting Policies, Changes in Accounting Estimates and Errors Events after the Balance Sheet Date Construction Contracts Income Taxes Property, Plant and Equipment Leases Revenue Employee Benefits BAS no 1 2 7 8 10 11 12 16 17 18 19 Status Applied Not applicable Applied Applied Applied Not applicable Applied Applied Applied Applied Applied

Accounting for Government Grants and Disclosure of Government Assistance The Effect of Changes in Foreign Exchanges Rates Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Consolidated and Separate Financial Statements Investments in Associates Disclosures in the Financial Statements of Banks and Similar Financial Institutions Interest in Joint Ventures Earnings Per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property Agriculture Name of the BFRS Share Based Payment Business Combinations Non-current Assets Held for Discontinued Operations Financial Instruments: Disclosure Operating Segments 1.13 Regulatory and legal compliance

20 21 23 24 26 27 28 30 31 33 34 36 37 38 40 41 BFRS no. 2 3 5 7 8

Not applicable Applied Applied Applied Applied Not applicable Not applicable Applied Not applicable Applied Applied Applied Applied Applied Not applicable Not applicable Status Not applicable Not applicable Not applicable Applicable Not applicable

Sale

and

The Bank complied with the requirements of following regulatory and legal authorities: The Bank Companies Act, 1991; The Companies Act, 1994; Rules and Regulations issued by Bangladesh Bank; The Securities and Exchange Rules 1987, The Securities and Exchange Ordinance 1969, The Securities and Exchange Commission Act, 1993, The Securities and Commission (Public Issue) Rules 2006; e) The Income Tax Ordinance, 1984; f) The VAT Act, 1991; g) Other Laws & Regulations as applicable. 1.14 Information and communication technology NCCBL follows the guideline stated in BRPD Circular no. 14 dated 23 October 2005 regarding Guideline on Information and Communication Technology for Scheduled Banks. IT management deals with IT policy documentation, internal IT audit, training and insurance. IT operation management covers the dynamics of technology operation management including change management, assets management and operating environment procedures management. The objective is to achieve the highest levels of technology service quality by minimum operational risk. a) b) c) d)

Physical security involves providing environmental safeguards as well as controlling physical access to equipment and data. In a) b) c) d) e) f) g) order to ensure that information assets are protected against risk, there are controls over : Password User ID maintenance Input Network security Data encryption Virus protection Internet and e-mail

The Business Control Plan (BCP) is formulated to cover operational risk and taking into account the potential for wide area disasters, data center disasters and the recovery plan. The BCP takes into account the backup and recovery process. 1.15 Asset Liability Management The Assets Liability Committee (ALCO) of the Bank monitors Market risk and liquidity risks of the bank. The Market risk is defined as potential charge in earnings due to change in rate of interest, foreign exchange rates which are not of trading nature. ALCO reviews liquidity requirement of the Bank, the maturity of assets and liabilities, deposit and lending, pricing strategy and the liquidity contingence plan. The primary objective of the ALCO is to monitor and avert significant volatility in Net Interest Income (NII), investment value and exchange earnings. 1.16 Segment reporting The bank has only one reportable business segment and operation of the bank is within the geographical territory of Bangladesh. Hence segment reporting in accordance with BFRS-8 Operating Segment is not applicable. 1.17 Events after the balance sheet date Events after the balance sheet date that provide additional information about the banks position at the balance sheet date are reflected in the financial statements. Events after the balance sheet date are not adjusting event are disclosed in the notes when material. 1.18 Assets pledge as security The bank has secured liability as mentioned in notes 12.01 and there was assets pledge as securities against liabilities. 1.19 Credit rating of the bank As per the BRPD instruction circular no. 6 dated July 5, 2006, the bank has done its credit rating by the Credit Rating Agency of Bangladesh (CRAB) based on the financial statements dated December 2009, the following rating has been awarded: Date of rating 24.06.2010 Long term A1 Short term ST-2

Entity Rating

1.20

Internal Control and Compliance Operational loss may arise from error and fraud due to lack of internal control and compliance. Management through Internal control and compliance Division controls operational procedure of the Bank. Internal control and compliance Division undertakes periodical and special audit of the branches and departments at Head Office for review of the operation and compliance of statutory requirement. The Audit Committee of the Board subsequently reviews the reports of the internal control and compliance division.

1.21

Audit committee The Audit committee of the Board of Directors of the Bank formed in accordance with Bangladesh Banks BRPD circular Letter No. 12 dated 23 December 2002 with its members as under : Sl. No. i) ii) iii) Name Status with the Bank Director Director Director Status with the committee Chairman Member Member Educational Qualifications

Mr. Khondkar Zakaria Mahmud Mr. Mohammad Ali Professor Shahid Uddin Ahmed

B.A. Ph.D.

During the period, the Audit committee of the Board conducted 05 (Five) meetings in which among others, the following issues where discussed: The committee studied Bangladesh Banks comprehensive inspection reports of branches as well as of Head Office accounts, reviewed compliance thereof and gave necessary instructions. The committee reviewed the audit and inspection reports of different branches as conducted by the Banks internal Audit and Inspection Department from time to time and gave necessary instructions to the management. The Committee perused and noted Bangladesh Banks policy Circulars/ Circular Letters and other listing regulations in force and gave necessary instructions.

Number of Employees Number of Employees at December 31, 2010 was 1865; (2009:1664) who were in receipt of remuneration for that year which in the aggregate was not less than Tk. 36,000 per annum and those employed for a part of that year who were also in receipt of remuneration of not less than Tk.3,000 per month.

General Figures appearing in these Financial Statements have been rounded off to the nearest Taka. Previous years figures whenever considered necessary have been rearranged in order to conform to current years presentation. Stock of Travelers Cheques, Shanchaya patras are not reflected as Off-balance Sheet items in the Financial Statements.

2010 Taka 4 Cash in hand ( Including Foreign Currencies) Local currency Foreign Currencies

2009 Taka

722,585,828 9,006,915 731,592,743

435,718,467 12,145,538 447,864,005

Balance with Bangladesh Bank and its agent bank(s) Local currency Foreign currencies
Sonali Bank Ltd. as agent of Bangladesh Bank ( Local Currency )-note 5.1

5,125,603,170 88,116,919 5,213,720,089 286,294,421 5,500,014,510

2,875,481,834 193,770,476 3,069,252,310 113,121,598 3,182,373,908

5.1

Sonali Bank Ltd. as agent of Bangladesh Bank ( Local Currency ) Cox's Bazar Branch Feni Branch Laxmipur Branch Moulvibazar Main Branch Jessore Branch Chaumuhani Branch Madaripur Branch Chakaria Branch Comilla Branch Joydevpur Branch Mymensingh Branch Tangail Branch Naogaon Branch Kushtia Branch Narayangonj Branch Brahmanbaria Branch Narsingdi Branch Maijdee Branch 43,200,925 15,531,864 18,081,375 3,023,615 30,092,311 10,785,499 1,782,075 130,547 8,648,582 6,728,401 22,388,625 44,682,738 7,593,288 6,555,207 58,461,260 4,601,761 3,735,431 270,917 286,294,421 16,603,251 46,822,838 4,120,656 671,212 17,723,845 3,666,117 1,341,600 399,381 4,328,902 993,786 4,140,302 8,660,699 3,649,009 113,121,598

5.2

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with the Section 33 of the Bank Companies Act 1991 and subsequent BCD Circular No.13 dated May 24, 1992; BRPD Circular No. 12, dated September 20, 1999, BRPD Circular No. 22 dated November 6, 2003, BRPD Circular No. 05 dated July 21, 2004 and DOS Circular no-06 March 23, 2005. BRPD Circular No. 11 & 12 dated 25 August 2005, MPD circular no. 116/2010-1712 & 04 dated December 2010. The cash reserve requirement on the Bank's time and demand liabilities @ of 6% has been calculated and maintained with Bangladesh Bank in current account and 19% Statutory Liquidity ratio including CRR on same liabilities has also been maintained in the form of treasury bills, treasury bonds and debenture including FC balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements as shown below:

5.3

Cash Reserve Requirement ( CRR) 6% of average Demand and Time Liabilities: Required Reserve Actual Reserve held Surplus/ (deficit) 4,044,500,000 5,125,603,170 1,081,103,170 2,738,400,000 2,875,481,834 137,081,834

2010 Taka 5.4 Statutory Liquidity Ratio ( SLR) 19% of average Demand and Time Liabilities: Required Reserve (including CRR) Actual Reserve held (including CRR) Surplus/ (deficit) Total required reserve Total actual reserve held Total Surplus/(deficit) 6 Balance with other Banks and Financial Institutions : In Bangladesh (Note -6.01 ) Outside Bangladesh ( Note-6.2) 6.1 In Bangladesh Current Accounts with Sonali Bank Ltd. ICB Islamic Bank Ltd. Janata Bank Ltd. IFIC Bank Ltd. Uttara Bank Ltd. Islami Bank Bangladesh Ltd. Pubali Bank Ltd. Commercial Bank of Ceylon United Commercial Bank Ltd. National Bank Ltd. Standard Chartered Bank Dutch Bangla Bank Ltd. Agrani Bank Ltd. Rupali Bank Ltd. The Trust Bank Ltd. Short-term Deposit Accounts Janata Bank Ltd. Dutch Bangla Bank Limited 331,517,804 235,808,073 567,325,877 12,792,100,000 16,493,914,140 3,701,814,140 12,792,100,000 16,493,914,140 3,701,814,140

2009 Taka

9,847,000,000 12,749,840,962 2,902,840,962 9,847,000,000 12,749,840,962 2,902,840,962

464,746,061 178,159,873 642,905,934

21,505,633 600,023 13,340,763 2,000 242,055 589,849 281,035 1,077,500 213,818 540 5,140,451 422,310 398,228 5,793,333 49,607,538 2,122,846 1,084,969 3,207,815

56,494,085 600,373 2,000 243,095 1,691,549 282,535 1,077,500 215,088 6,303,069 1,297,709 398,228 8,558,283 2,037,631 79,201,145 25,220,376 1,019,839 26,240,215

Fixed Deposit Accounts with ICB Islamic Bank Ltd. Bank Asia Ltd. United Commercial Bank Ltd. National Bank of Pakistan Bay Leasing & Investment Ltd. Lanka Bangla Finance BD Industrial Finance Co Ltd International Leasing & Financial Services limited

21,202,451 100,000,000 70,000,000 37,500,000 50,000,000 278,702,451 331,517,804

21,804,701 200,000,000 70,000,000 10,000,000 20,000,000 37,500,000 359,304,701 464,746,061

2010 Taka 6.2 Outside Bangladesh (NOSTRO Accounts) Current Accounts (non-interest bearing) with: Standard Chartered Bank, Singapore Standard Chartered Bank, Japan HSBC BANK N.Y Sumitomo Mitsui Banking Corp. Bank of Tokyo Mitsubishi, Japan Myanma Investment & Co, Mayanmar IFIC Bank Ltd., Karachi Bank of Tokyo Mitsubishi, Kolkata American Express Bank, Colombo BANCO ITAU United Bank Ltd., Karachi AXIS Bank Kolkata Nepal Bangladesh Bank, Nepal HSBC, Kolkata Bank of Bhutan, Phuentsholing Standard Chartered Bank, Kolkata Standard Chartered Bank, London Habib Metropoliton Bank Uni Credio Italiano Spa Wachovia NA Commerrz Bank AG UBAF,JAPAN ICIC Bank, HKK Nova Scotia Canada

2009 Taka

533,754 1,369,534 8,944,497 905,912 6,632,299 7,035,000 26,800,395 4,897,467 1,965,312 6,462,083 4,050,339 18,888,751 4,060,432 1,469,082 9,891,641 4,645,956 1,041,928 157,521 11,604,349 3,803,014 125,159,266

2,088,439 1,640,461 492,989 7,808,428 343,250 2,928,175 6,865,000 7,669,112 5,751,143 5,351,688 3,859,471 2,939,640 176,588 762,925 4,106,739 701,368 22,183,126 13,394,673 1,300,863 90,364,078

Current Accounts (interest bearing) with: Standard Chartered Bank, New York Citibank N. A., New York Standard Chartered Bank, London Banca Nazionale Commerge Bank AG Mashreq Bank ,New York

81,801,661 28,847,146 110,648,807 235,808,073

38,861,290 20,574,154 822,268 220,968 174,698 27,142,417 87,795,795 178,159,873

Annexure 'B' may kindly be seen for details 6.3 Balance with other banks and financial institutions (according to remaining maturity grouping) Payable : Payable on demand Up to one month Over one month but not more than three months Over three months but not more than six months Over six months but not more than one year Over one year but not more than five years Over five years 7 Money at Call and short notice : Banking Company Non-banking financial institutions 285,415,611 153,207,815 70,000,000 37,500,000 21,202,451 567,325,877 238,343,820 270,000,000 46,240,215 47,500,000 21,804,701 623,888,736 -

2010 Taka 8 Investments : Government Securities-Note 8(a) Other Investments-Note 8(b) Investment classified as per Bangladesh Bank Circular Held for trading (HFT) Held to maturity (HTM) Other Securities

2009 Taka

10,262,306,887 718,501,349 10,980,808,236 7,177,654,429 3,079,216,458 739,374,266 10,996,245,153

9,188,182,140 483,347,914 9,671,530,054 6,361,670,817 2,811,885,781 497,973,456 9,671,530,054

i)

a) Government Securities: Treasury bills: 364 days Treasury bills 5 years Treasury bills Treasury bonds: 5 years Treasury bonds 10 years Treasury bonds 15 years Treasury bonds 20 years Treasury bonds Margin on Treasury bills Treasury bonds Prize Bonds 15 years ICB's Debenture (Interest rate @ 5% p.a. ) b) Other investments: Zero Coupon Bonds Other Bonds Beximco Pharmaceuticals (Debenture ) Investment in shares (Note 8.3)
Less: Provision for diminution in the market value of shares (Note-8.1)

139,030,051 139,030,051 2,072,930,847 5,934,315,654 1,345,735,837 764,858,498 10,117,840,836 5,436,000 10,262,306,887 119,296,471 100,000,000 60,570 514,498,115 (15,353,807) 499,144,308 718,501,349 10,980,808,236 14,589,758 764,049 15,353,807

210,379,398 210,379,398 2,153,743,989 5,738,687,445 690,275,214 339,494,901 8,922,201,549 40,975,651 40,975,651 8,057,500 6,568,042 9,188,182,140 87,508,017 60,570 410,369,085 (14,589,758) 395,779,327 483,347,914 9,671,530,054 55,786,601 (32,981,953) (8,214,890) 14,589,758

8.1

Provision for Investment fluctuation in shares Opening Balance Add: Provision made during the year Less: Provision amount Transferred to P/Loss A/c Less: Adjusted during the year Closing Balance Maturity grouping of investments Demand Up to one month Over one month but not more than three months Over three months but not more than six months Over six months but not more than one year Over one year but not more than five years Over five years

8.2

238,091,108 19,401,385 139,029,911 2,292,227,318 8,292,058,514 10,980,808,236

403,897,397 257,923,091 2,241,252,006 6,768,457,560 9,671,530,054

2010 Taka 8.3 Investment in Share: Quoted: Agrani Insurance Ltd Prime Textile Spinning Mills Ltd. Olympic Industries Ltd. Asia Insurance Ltd. Al-Arafa Islami Bank Ltd. Bata Shoe Co. (BD) Ltd. BSRM Steel Ltd. Eastern Cables Ltd. DBH 1st Mutual Fund National Bank Limited Eastland Insurance Ltd Green Delta Insurance Co. Bangladesh Auto Cars Ltd. Eagle Star Textile Mills Ltd. Bank Asia Ltd Exim Bank Ltd Mercantile Bank Ltd Premier Leasing Ltd. Summit Power Ltd. Armit Ltd IDLC Bangladesh Industrial Finance Brac Bank Ltd. Prime Bank Ltd. Lanka Bangla Finance Ltd. Uttara Bank Ltd. Arab Bangladesh Bank Ltd City Bank Ltd ICB Islami Bank Ltd. DESCO Ltd. IFIC Bank Limited Jamuna Bank Ltd. Meghna Petroleum Ltd. Power Grid Co. Ltd. Pubali Bank Limited Square Pharma Standard Bank Ltd. BOC BD Limited Islami Bank Bangladesh Ltd. Navana CNG Ltd. First Lease Grameenphone Ltd. ICB 2nd NRB Marico Bangladesh Ltd. Prime Finance and Investment Ltd. Summit Alliance Port Ltd. Shahjalal Islami Bank Ltd. Social Investment Bank Ltd. Square Textiles Ltd Titas Gas Transmission Mutual Trust Bank Ltd. South East Bank Ltd. Khulna Power Co. Ltd. Laferge Surma Cement Ocean Containers Ltd. RAK Ceramics Ltd. Peoples Leasing and Finance

2009 Taka

8,738,938 300,000 511,650 6,137,650 26,719,575 3,008,892 4,599,429 277,852 4,000,000 5,984,195 11,650 2,691,070 223,932 4,227,951 337,500 13,681 12,919,344 9,255,159 99,825 3,444,450 934,833 870,280 5,490,645 9,945,178 3,730,599 3,292,656 18,277,987 11,400,286 1,211,893 757,781 17,923,420 6,053,665 7,806,380 8,040,555 2,788,029 35,577,269 2,471,700 3,504,400 2,325,945 2,184,864 238,091,108

300,000 1,284,535 7,447,025 442,348 277,852 12,416,334 223,932 4,227,951 3,389,059 4,824,949 3,372,220 14,409,910 36,410,120 3,781,210 8,187,702 12,480,134 3,412,639 7,167,920 21,125,836 27,196,250 2,407,226 14,499,913 8,060,622 24,830,797 4,573,886 3,045,381 5,060,262 59,245,508 4,667,151 1,032,911 4,799,282 12,226,629 858,721 2,136,028 2,037,043 8,925,259 965,138 3,383,556 1,520,195 1,122,974 13,668,256 3,612,885 3,304,529 358,362,078

2010 Taka Un- quoted: CDBL Dhaka Stock Exchange Ltd Venture Investment Partner Bangladesh Ltd. Swift Dhaka Vegetable Oil Industries Ltd. Chittagong Stock Exchange Ltd. Summit Uttaranchal PCL Summit Purbanchal PCL Nccbl Mutual Fund-1 Summit Power Ltd SEBL 1st Mutual Fund MBL 1st Mutual Fund Green Delta Mutual Fund Dun & Bradstreet Rating Agency 2,000,000 400,385 18,000,000 991,199 7,448,523 19,001,000 17,000,000 25,500,000 150,000,000 1,900,000 10,000,000 10,000,000 10,000,000 4,165,900 276,407,007 514,498,115

2009 Taka 2,000,000 400,385 18,000,000 991,199 7,448,523 19,001,000 4,165,900 52,007,007 410,369,085

Loans and Advances Loans,Cash Credits,Overdrafts etc.(Note-9.01) Bills Purchased and Discounted (Note-9.2) 59,632,249,645 3,597,891,983 63,230,141,628 48,530,225,335 1,857,457,868 50,387,683,203

9.1

Loans, Cash Credits, Overdrafts etc. Inside Bangladesh: Overdraft Cash credit Loan - general Transport loan House building loan Loan against trust receipt Loan against Imported Merchandise Loan against Investment Loan against packing credit Project loan Demand loan Lease Finance Payment against document Consumer Finance Scheme Housing Loan under B.Bank Refinance Scheme Loan Revolving Staff Loan Small Business Loan House Renovation Loan Personal Loan Scheme Term Loan (Small,Medium & Large) Agri Credit Festival Loan Special Housing Loan Credit Card Forced Loan Short Term Loan Retail Loan Education Loan Scheme Outside Bangladesh:

11,690,527,439 9,710,795,572 6,285,091,051 399,830,254 1,508,750,926 11,535,188,764 64,152,677 10,500 164,860,309 297,487,398 12,380,294 964,245,222 2,104,825,226 1,333,336 41,309,112 1,037 518,377,438 810,803,851 91,676,699 16,379,763 10,726,234,410 269,576,890 73,869,925 1,046,796,732 215,541,374 538,085,843 534,572,412 5,520,772 4,024,419 59,632,249,645 59,632,249,645

9,281,392,979 6,844,353,324 4,625,642,530 160,863,146 1,293,420,624 10,536,365,568 60,715,274 1,383,682 133,650,362 290,249,179 1,074,075 715,200,830 1,635,966,926 2,195,660 40,515,702 18,304,148 433,530,073 738,273,947 86,737,477 18,598,942 9,357,273,705 55,971,940 66,859,105 997,120,412 182,158,492 816,501,632 135,442,948 462,653 48,530,225,335 48,530,225,335

2010 Taka 9.2 Bills Purchased and Discounted Inside Bangladesh: Inland bills purchased Local documentary bills purchased Outside Bangladesh: Foreign bills purchased Foreign documentary bills purchased

2009 Taka

2,310,763 3,379,320,119 3,381,630,882 10 216,261,091 216,261,101 3,597,891,983 63,230,141,628

8,436,965 1,723,049,021 1,731,485,986 585 125,971,297 125,971,882 1,857,457,868 50,387,683,203

9.3

Net Loans and Advances Gross Loans and Advances Less: Non-performing loans and advances Interest suspense

63,230,141,628 1,425,280,000 265,448,405 1,690,728,405 61,539,413,223

50,387,683,203 1,420,567,000 230,367,473 1,650,934,473 48,736,748,730

9.4

Residual maturity grouping of loans and advances bills purchased and discounted Repayable on demand Up to one month Over one month but not more than three months Over three months but less than one year Over one year but less than five years Above five years

550,466,137 11,746,721,943 13,704,166,666 21,673,219,120 9,646,426,492 5,909,141,270 63,230,141,628

817,575,707 9,110,477,383 11,698,030,122 15,918,021,338 8,275,919,019 4,567,659,634 50,387,683,203

9.5

Loans and advances including bills purchased and discounted classified into the following broad categories In Bangladesh : Loans Cash credit Overdraft Bills Purchased & Discounted Outside Bangladesh (Bills Purchased & Discounted)

38,230,926,634 9,710,795,572 11,690,527,439 3,381,630,882 63,013,880,527 216,261,101 63,230,141,628

32,404,479,032 6,844,353,324 9,281,392,979 1,731,485,986 50,261,711,321 125,971,882 50,387,683,203

9.6

Loans and advances on the basis of significant concentration including bills purchased and discounted classified into the following broad categories I) Advances to allied concerns of Directors of the Bank II) Advances to customers' group-wise clients a) Import Financing b) Export financing c) House Building Loan d) Consumers credit scheme e) Small and Medium Enterprise (SME) f) Special program loan g) Staff Loans h) Others

52,966,452 5,556,397,235 3,779,699,125 2,757,288,562 307,448,468 8,940,710,658 129,856,422 518,377,437 1,729,558,158 23,719,336,065

30,514,000 4,558,199,000 4,680,058,000 1,897,979,000 2,195,660 2,849,871,000 1,950,125,325 433,530,073 1,558,545,326 17,930,503,384

2010 Taka III) Industrial loans a) Agriculture b) Industry c) Construction d) Transport and Communication e) Storage f) Business g) Others

2009 Taka

525,903,854 25,844,987,354 1,117,858,587 400,329,681 300,657,328 11,053,962,349 214,139,958 39,457,839,111 63,230,141,628

374,685,000 21,081,494,000 1,486,073,000 621,164,000 282,295,000 7,827,794,000 753,160,819 32,426,665,819 50,387,683,203

9.7

Number of clients with outstanding amount and classified Loans and advances exceeding 10% of total capital of the Bank. Number of the clients Amount of outstanding Advances Amount of classified advances Measures taken for recovery Annexure 'D' may kindly be seen for details.

6 8,714,500,000 -

8 7,441,100,000 -

9.8

Loans and advances on the basis of geographical location wise

Urban Dhaka Division Chittagong Division Rajshahi Division Sylhet Division Khulna Division

40,954,241,178 16,179,816,277 1,153,358,695 618,250,060 1,676,883,941 60,582,550,151

32,574,809,455 13,827,723,790 980,523,684 470,123,568 814,959,460 48,668,139,957

Rural Dhaka Division Chittagong Division Rajshahi Division Sylhet Division Khulna Division

749,305,306 927,209,872 601,137,484 369,938,815 2,647,591,477 63,230,141,628

456,610,936 542,007,285 425,863,199 295,061,826 1,719,543,246 50,387,683,203

9.9

Classification of Loans and advances Unclassified Standard (including staff loans) Unclassified Special Mention Account Sub-standard Doubtful Bad/Loss

60,634,171,628 1,170,690,000 143,404,000 60,831,000 1,221,045,000 63,230,141,628

48,860,259,203 106,857,000 50,784,000 74,103,000 1,295,680,000 50,387,683,203

2010 Taka 9.10 Particulars of loans and advances i) Loans considered good in respect of which the bank is fully secured. Loans considered good for which the bank holds no other security than the debtor's personal security. Loans considered good and secured by the personal security of one or more parties in addition to the personal security of the debtors. Loans considered doubtful or bad not provided for. 51,895,056,119

2009 Taka

43,708,090,983

ii)

7,137,073,880

5,009,197,240

iii)

4,198,011,629

1,670,394,980

iv)

63,230,141,628

50,387,683,203 433,530,073

* v) Debts due by directors or officers of the bank or any of them either severally or jointly with any other persons. vi) Debts due by companies or firms in which the directors of the Bank are interested as directors, partners or managing agent or in case of private companies as members. Maximum total amount of advances, including temporary advances made at any time during the year to directors or managers or officers of the bank or any of them either severally or jointly with Maximum total amount of advances, including temporary advances, granted during the year to the companies or firms in which the directors of the bank are interested as directors, partners or managing agents or, in case of private companies as members. ix) x) Due from banking companies
Classified loans for which interest/profit not credited to income

518,377,438

52,966,452

30,514,000

vii)

518,377,438

433,530,073

viii)

52,966,452 1,425,280,000 22,578,000

30,514,000 1,420,567,000 (192,680,000)

a) Increase/(decrease) of provision (specific) during the year * Amount represents loans to employees of the Bank only. b) Amount of provision kept against the amount classified as bad/loss at the Balance Sheet preparing date. c) Amount of interest charged in interest suspense account xi) Cumulative amount of written off debt Opening balance as on 1 January Add: Amount of debt written off during the year Closing balance as on 31 December xii) Amount of written off debt in 2010 against which law suit has been filed for its recovery during the year

703,841,000 265,448,405

666,479,000 230,367,473

1,658,506,255 426,699,758 2,085,206,013

1,392,391,074 266,115,181 1,658,506,255

91,112,193

71,027,119

2010 Taka

2009 Taka

9.11 Outstanding Bad & Loss Loans to be Written off Bangladesh Bank issued a circular no.02 dated 13 January 2003 instructing all the banks in the country to write off bad & loss loans which have passed five years after its classification and legal actions have been taken against all those default borrowers with an immediate effect. In compliance with the circular, the Bank formed a Debt Collection Unit in its Head Office from where monitoring has been made accordingly. During the year, the Bank allowed write off amounting to Tk. 9,11,12,193 against which legal actions have been lying with the money suit court. In this connection, branches have been maintaining separate ledger for all individual cases. The debt collection unit will follow-up the realisation of such debts in future also and time to time a progress report to be given to the management by the branches. 9.12 Bills purchased and discounted: a) Payable: In Bangladesh Outside Bangladesh b) Bills purchased & discounted on the basis of the residual maturity grouping Payable: Within one month Over one month but less than three months Over three months but less than six months Over six months Fixed assets including premises, furniture and fixtures Cost/valuation Land Structure ( on land II) Furniture and fixtures Machinery and Equipment Vehicles Total Cost / Valuation Less: Accumulated depreciation Net book value at the end of the year

3,381,630,882 216,261,101 3,597,891,983

1,731,485,986 125,971,882 1,857,457,868

1,088,654,000 1,870,965,000 619,961,000 18,311,983 3,597,891,983

414,994,000 792,422,000 364,802,000 285,239,868 1,857,457,868

10

413,139,440 414,335,133 236,983,642 388,912,606 68,915,337 1,522,286,158 330,792,968 1,191,493,190

363,792,577 192,398,501 197,239,809 295,342,856 62,001,525 1,110,775,268 261,671,687 849,103,581

Annexure 'A' may kindly be seen for details.


11 Other Assets Stationery in hand Stamps and stamped forms in hand Security deposits Advance against rent Suspense account (Note 11.1 ) Commission receivable Dividend receivable Interest receivable ( Note 11.2 ) Prepaid Expense(Soft ware) Others ( Note 11.3 ) Discount receivable Prepaid interest ( on BCD & Other A/Cs ) ATM Adjustment Building Construction Receivable from sale proceeds of Share

16,538,351 1,386,944 1,662,909 88,740,104 82,735,210 2,350,000 1,017,660 229,539,391 18,441,288 704,016,029 6,917,890 41,500 162,217 153,320,691 45,931,185 1,352,801,369

18,211,407 980,964 1,497,459 58,482,625 62,556,696 6,655,170 217,946,728 22,057,268 275,294,659 1,420,086 162,217 90,765,499 756,030,778

2010 Taka 11.1 Suspense Account Encashment Shanchaypatra awaiting realisation DD cancelled Cash Remittance DD paid without advice Clearing adjustment 11.2 Interest receivable : On loans and advances On Treasury Bill/Bond On bank balances/Financial Institutions 11.3 Others Advance against TA/DA Legal expenses Waiver of interest Money Gram Proposed Branches expenses Prefunding to TMSS Zenj Exchange T.C. Buying UAE Exchange Sundry debtors Foreign Remittance Payment Project Protested bill Prefunding to Foreign Remittance Xpress Money Postage Stamp Al-Fardan Exchange Co.L.L.C Habib Quarter Placid Express Arab National Bank (KSA) Advance against Salary Wall Street First Solution U.K. Kay Maks International Majan Exchange Three Star Federal Exchange Repo Adjustment account Advance for booking money agt.DSE Tower Advance for Purchase of Bank Property 35,055,088 23,600 28,171,886 6,516,705 12,967,931 82,735,210 223,370,640 6,168,751 229,539,391 43,055 236,109 4,404 29,622,649 4,626,100 19,177,949 883,966 98,626 1,985,208 569,231,642 2,245,789 2,125,020 8,159,443 11,775,203 2,006,103 2,674,163 3,237,877 411,000 13,060 8,000 3,000 38,563 850,000 44,559,100 704,016,029

2009 Taka

20,270,302 20,150 15,600,000 7,382,052 19,284,192 62,556,696 505,190 214,111,538 3,330,000 217,946,728 47,820 334,230 4,404 27,397,231 6,058,000 19,321,340 8,557 913,057 73,795,715 2,566,135 1,896,984 3,770,292 6,498,751 12,097 13,497,094 3,169,965 3,638,504 115,192 14,425 336,110 2,392,027 56,100 600,000 108,850,629 275,294,659

12

Borrowing from other Banks, Financial Institutions and agents in Bangladesh Bangladesh Bank The Trust Bank Ltd

1,570,189,614 915,952 1,571,105,566

1,813,482,052 1,813,482,052

2010 Taka
Outside Bangladesh: ICICI Bank, Kolkata Standard Chartered Bank, London Mashreq Bank Kolkata Standard Chartered Bank, Kolkata WACHOVIA NA Citi Bank NA HSBC Bank , New York 31,171,190 379,250 139,259,404 56,549,653 15,104,584 33,459,049 275,923,130 1,847,028,696

2009 Taka
5,197,150 4,017,730 9,214,880 1,822,696,932

Annexure 'C' may kindly be seen for details.

12.01 Security against borrowings from other banks, financial institutions and agents: Secured 1,570,189,614 Unsecured 276,839,082 1,847,028,696 12.02 Borrowings from other banks, financial institutions and agents
(according to remaining maturity grouping) Payable :

1,813,482,052 9,214,880 1,822,696,932

On demand In not more than three months In more than three months but not more than one year In more than one year but not more than five years Above five Years 13 Deposits and other Accounts Current deposits and other accounts Current deposits Sundry deposits (note 13.4) Saving deposits Fixed deposits Term deposits Short term deposits Special savings scheme Special deposit scheme Premium term deposits Instant earning term deposits Money Double Program 13.1 Bills Payable: Payment Order (issued) Pay slip Demand draft Bearer Certificate of Deposits 13.2 (a) Demand deposits From other banks Other than banks 13.2 (b) Other deposits: From other banks In Fixed Deposits Accounts: Sonali Bank Limited Bangladesh Development Bank Limited Eastern Bank Limited Other than banks

276,839,082 40,459,366 155,972,593 990,820,544 382,937,111 1,847,028,696

9,214,880 62,917,842 141,305,251 1,005,847,149 603,411,810 1,822,696,932

4,967,282,085 2,776,641,149 7,743,923,234 7,477,106,648 39,313,895,416 3,322,195,044 5,312,740,230 1,109,703,942 151,042,003 900,000 2,518,357,880 12,414,939,099 922,749,305 2,988 88,628,087 1,011,380,380 67,961,244,777 9,428,243,212 9,428,243,212

2,873,725,411 2,478,985,319 5,352,710,730 6,134,648,381 32,267,274,574 2,631,867,774 3,844,508,283 699,361,257 434,708,260 12,100,000 1,799,975,430 9,422,521,004 624,132,789 3,652 61,270,505 685,406,946 37,589,000 53,900,150,635 6,590,236,030 6,590,236,030

500,000,000 70,000,000 570,000,000 57,963,001,565 67,961,244,777

100,000,000 100,000,000 47,209,914,605 53,900,150,635

2010 Taka 13.3(a) Residual maturity grouping of Deposits: From other Banks Payable: On demand Within one month In more than one month but less than six months In more than six months but less than one year In more than one year but within five years In more than five years but within ten years 13.3 (b) From other than Banks Payable: On demand Within one month In more than one month but less than three months In more than three months but less than one year In more than one year but within five years In more than five years but within ten years 13.4 Sundry Deposits Sundry Creditors Clearing adjustment Margin on letters of guarantee Margin on letters of credit Security deposits against locker Foreign correspondents charge Credit balance in CC,SOD,Loan etc. Collection Account Sanchaypatras Money Gram LDBP, Export bill/ proceeds Security deposit Receipts U.A.E.Exchange Placid Express FC,FCY Retention Quota Cash Risk Allowance/Fund Majan Exchange Three Star Remittance Federal Exchange Advance Rent on Lease Finance First Solution money transfer Al-Fardan exchange Co.L.L.C. Habib Qatar K.M. Financial Services London Arab National Bank (KSA) Wall Street Exchange Dhaka Janata Express Visa Credit Card Foreign remittance Retained Comm.from Remittance Provident Fund Credit Card Deposit A/c. Alt.Cash Assistance Zenj Exchange Itau Unibanco.S.A National Exchange Co. IME(M) SDN.BHD Al Zaman Exchange Others Unclaimed Block Account for 10 years & above

2009 Taka

570,000,000 570,000,000

100,000,000 100,000,000

9,428,243,212 8,481,537,217 14,636,233,461 19,167,408,026 8,006,304,707 7,671,518,154 67,391,244,777 67,961,244,777 118,844,583 514,121,302 750,596,856 9,693,520 111,987 187,088,752 15,625,037 6,013,625 74,447,224 658,033,249 123,579,411 12,712,680 1,619,548 52,218,326 44,462,120 1,334,763 978,929 7,138,134 19,591,378 2,816,003 6,046,049 760,461 1,242,325 106,460,770 11,233,042 5,441,301 406,268 17,557,057 1,000,000 3,442,599 2,694,309 (34,525) 1,805,710 309,578 4,531,787 6,290,955 5,324,322 1,101,714 -

6,590,236,030 6,805,848,440 12,025,864,004 14,296,209,331 8,476,303,522 5,605,689,308 53,800,150,635 53,900,150,635 120,199,838 11,632,796 369,291,487 543,013,135 1,771,861 122,126 245,636,132 27,582,308 17,180,875 52,043,741 578,102,508 260,140,677 10,676,882 11,568,174 24,797,593 27,340,266 426,511 5,991,776 16,999,855 3,209,747 12,666,631 220,677 1,469,512 105,626,325 7,848,151 4,507,556 621,310 2,330,993 2,960,119 2,849,411 1,025,623 8,483,751 646,972 -

2010 Taka 14 Other Liabilities Outstanding interest Excise duty on loan Excise duty on deposit Special reserve of garments accounts Provisional for Expenses Audit fee payable Income tax deduction at source on interest Advance tax deducted at source Staff Income tax Inter Branch Transaction Account Stamp Deduction of VAT on LC commission and Service Charge Provision for loans and advances (Note 14.4 ) Provision on Off balance sheet items (Note-14.5) Interest Suspense (Note 14.7 ) Provision for Other Assets ( Note 14.2) Provision for Income tax ( Note 14.3) Provision for deferred tax liabilities ( Note 14.3.1) Exchange Equalization Reserve ( Note 14.1) Reserve for Unforeseen loss Provision for Gratuity (Note-14.9) Contribution to NCC Bank Foundation (Note-14.8) Provision for incentive Bonus Provision for Benevolent Fund Adjusting A/c Credit 1,050,474,409 15,656,123 43,866,064 12,390,230 2,558,886 150,000 26,240,653 1,073,164 692,853 363,458,684 22,224 15,718,121 1,483,115,000 174,925,506 265,448,405 13,872,632 672,855,396 67,216,207 8,704,738 59,032,636 16,322,766 95,000,000 4,388,794,697

2009 Taka 1,074,410,023 8,519,562 25,195,010 12,132,646 3,805,290 120,000 28,410,634 1,379,771 363,772 459,782,492 30,928 12,874,106 1,229,896,000 111,928,000 230,367,473 18,348,000 361,807,683 237,216,207 465,514 6,353,555 225,000,000 27,200,000 100,000,000 2,500,000 2,088,323 4,180,194,989

14.1 Movement in Exchange Equalization Account Opening Balance Adjusted during the year Closing balance 14.2 Provision for other Assets: Opening Balance Add: Provisions made during the year Less: Provisions no longer required Closing balance 14.3 Provision for Income Tax: Opening Balance Add: provision made for current tax Prior years tax 18,348,000 (4,475,368) 13,872,632 3,372,202 14,975,798 18,348,000 465,514 (465,514) 465,514 465,514

Less: Adjusted during the year Closing Balance Less: Advance income tax paid and deducted at source Advance tax at source on treasury bills/ bonds Advance tax at source on bank interest & dividend Advance income tax deposited by Bank 5% Advance income tax paid on L/C commission Net balance at 31 December

2,406,833,505 1,057,110,305 25,886,372 1,082,996,677 3,489,830,182 2,332,754,562 1,157,075,620 112,009 5,345,646 472,139,446 6,623,123 484,220,224 672,855,396

1,626,701,962 754,282,799 25,848,744 780,131,543 2,406,833,505 2,406,833,505 287,785,856 22,418,722 1,714,190,475 20,630,769 2,045,025,822 361,807,683

2010 Taka

2009 Taka

14.3.1 Deferred tax liabilities Balance as on 1 January Add: provision made during the year Add: Provision for revaluation reserve on Lands Less: adjusted during the year

237,216,207 237,216,207 36,444,940 (206,444,940) 67,216,207

50,356,122 186,860,085 237,216,207 237,216,207

14.4 Provision for Loans and Advances a) Movement in specific provision on classified loans and advances Opening balance Fully provided debt written off Add: Recoveries of amounts previously written off Net charged to Profit and Loss Account Provision held at the end of the period

720,224,000 (378,883,352) 9,769,106 391,692,246 742,802,000

912,904,000 (260,607,297) 9,545,272 58,382,025 720,224,000

b) Movement in general provision on unclassified loans and advances Opening balance 509,672,000 230,641,000 Add: Provision made for the year/net 740,313,000 charge in profit and loss account Total (a) + (b) 1,483,115,000

456,065,000 53,607,000 509,672,000 1,229,896,000

14.5 Provision on off-balance sheet items Opening balance Add: Provision made during the year 14.6 Provision for NOSTRO Accounts Opening balance Add: Provision made during the year 14.7 Interest suspense account Opening balance Add: Amount transferred during the year Less: Amount recovered during the year Less: Amount written off during the year Closing balance 14.8 Contribution to NCC Bank Foundation (NCCBF) Opening balance Add: Contribution during the year Less : Adjusted / transferred during the year 14.9 Provision for Gratuity
Opening Balance Add: Provision made during the year Less: Adjusted/Transferred to STD account during the year Closing Balance

111,928,000 62,997,506 174,925,506 230,367,473 213,675,197 (80,544,450) (98,049,815) 265,448,405

109,409,276 2,518,724 111,928,000 241,374,297 94,242,982 (64,945,410) (40,304,396) 230,367,473

27,200,000 16,322,766 43,522,766 27,200,000 16,322,766


225,000,000 59,032,636 (225,000,000) 59,032,636

10,000,000 27,200,000 37,200,000 10,000,000 27,200,000


68,918,090 225,000,000 (68,918,090) 225,000,000

2010 Taka 15 Share Capital

2009 Taka

15.1 Authorized Share Capital 1,000,000,000 ordinary shares @ of Tk. 10 each 10,000,000,000 5,000,000,000

The Shareholders of the bank in its 7th Extra-Ordinary General Meeting (EGM) held on 30.08.2010 decided to denomination of face value of shares to Tk.10 from Tk. 100 and after approval of Securities and Exchange Commission, the new denominated share traded both in Dhaka Stock Exchange & Chittagong Stock Exchange from November 15, 2010. The Bank has also increased its Authorised Share Capital from Tk.500.00 crore to 1000.00 crore as approved by the Shareholders in the same meeting. 15.2 Issued, Subscribed and Fully Paid-up Capital 39,000,000 Ordinary shares of Tk 10 each issued for cash 266,641,750 Ordinary shares of Tk 10 each issued as bonus
144,483,580 Ordinary shares of Tk 10 each issued as right share in Cash

450,125,330 Ordinary shares of Tk 10 each

390,000,000 2,666,417,500 1,444,835,800 4,501,253,300

390,000,000 1,592,514,500 302,385,700 2,284,900,200

15.3 % of Shareholdings as on 31 December 2010 Particulars Local sponsors Financial Institutions Foreign Investors Public issues No of share 187,351,900 69,779,200 1,509,140 191,485,090 450,125,330 % of holdings 41.62 15.50 0.34 42.54 100.00 1,873,519,000 697,792,000 15,091,400 1,914,850,900 4,501,253,300 1,059,929,600 484,877,700 6,956,100 733,136,800 2,284,900,200

15.4 Range wise Shareholdings as on 31 December 2010 Range of holding of LessShares than 5,000 5,001 to 10,000 10,001 to 20,000 20,001 to 30,000 30,001 to 40,000 40,001 to 50,000 50,001 to 100,000 100,001 to 200,000 200,001 to 300,000 300,001 to 400,000 400,001 to 500,000 500,001 to 1,000,000 1,000,001 to 10,000,000 10,000,001 to 100,000,000 Total No. of share holders 75590 2256 955 270 111 94 186 94 37 24 15 49 78 4 79763 % of shares holding 13.81 3.79 3.08 1.50 0.89 0.95 2.92 2.98 1.98 1.86 1.52 7.54 47.33 9.85 100.00 No. of Shares 62,165,663 17,066,110 13,860,756 6,747,600 4,007,850 4,275,430 13,140,230 13,429,716 8,921,525 8,370,030 6,822,200 33,947,780 213,055,240 44,315,200 450,125,330

2010 Taka 15.5 Capital Adequacy Ratio (CAR) Total assets including Off-Balance sheet items Total Risk Weighted Assets Required Capital ( 9% of Risk Weighted Assets) Actual Capital Held: Total Capital surplus/(deficit) i) Core capital (Tier- i) (%) Paid-up Capital Statutory Reserve General Reserve Surplus in Profit & Loss Account ii) Supplementary capital (Tier- ii) (%) General provision on Unclassified Loan General Provision for Off-balance sheet Exposures Revaluation Reserve on Govt. Securities Assets Revaluation Reserve Exchange Equalisation Total Capital surplus/(deficit) Capital Adequacy Ratio : Capital requirement Tier-I Tier-II Total 101,048,042,176 91,929,600,000 8,273,664,000 10,033,986,280 1,760,322,280 8,880,386,166 4,501,253,300 2,543,463,417 7,162,348 1,828,507,101 1,153,600,114 740,313,000 174,925,506 115,279,015 123,082,593 -

2009 Taka 77,130,294,228 46,652,000,000 4,665,200,000 6,322,418,616 1,657,218,616 5,366,257,297 2,284,900,200 1,893,817,316 67,162,348 1,120,377,433 956,161,319 509,672,000 111,928,000 192,790,742 141,305,063 465,514

Required 4.50% 4.50% 9.00%

Held 9.66% 1.25% 10.91%

Held 11.50% 2.05% 13.55%

15.6 Name of the Directors and their shareholdings as at 31 December 2010. Sl. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Name of Directors Mr. Yakub Ali Mr. Md. Harunnur Rashid Mr. A.S.M Main Uddin Monem Mr. Nurul Islam Mr.Md. Abdul Awal Mr. Amjadul Ferdous Chowdhury Mr. S.M. Abu Mohsin Mrs. Masuda Begum Mrs. Lutfun Nahar Begum Mr.Abdus Salam Mr. Mahbubul Alam Tara Mrs. Sohela Hossain Mr. Ainul Kabir Mr. Khondkar Zakaria Mahmud Mr. Md. Shahjahan Mr. Mostafizur Rahman Mr. Mohammad Ali Mr. Tofazzal Hossain Mr. Fakhrul Anwar Alhaj Md. Nurun Newaz Mr. Md. Humayun Kabir Mr. Din M.Rana Mr.Md.Abul Bashar Mr. Khairul Alam Chaklader Mr. Md. Moin Uddin Status Chairman Vice-Chairman Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director Position 31/12/2010 2,839,150 10,186,700 5,178,590 5,184,060 8,899,250 3,734,190 3,075,540 749,080 340,740 9,457,820 1,240,720 6,964,810 826,960 2,359,780 288,230 2,511,640 10,785,370 4,794,390 3,918,550 7,058,060 1,487,870 7,937,580 4,620,130 11,238,650 12,104,480
127,782,340

Position 31/12/2009 159,348 480,443 298,889 263,151 411,151 189,554 216,837 38,025 480,093 86,997 56,256 150,243 19,200 202,114 547,481 253,523 214,140 345,588 104,027 372,466 234,525 570,490 614,441
6,308,982

Note: Denomination of share (i.e; face value) changed from Tk.100.00 to Tk.10.00 w.e.f November 15, 2010.

2010 Taka 16 Statutory Reserve Opening Balance on 1 January Addition during the year (20% of pre-tax profit) Closing Balance at 31 December 1,893,817,316 649,646,101 2,543,463,417

2009 Taka 1,356,518,531 537,298,785 1,893,817,316

General Reserve Opening Balance on 1 January Addition during the year Less : Adjusted during the Year Closing Balance at 31 December 18 Other Reserve 18.1 Capital Reserve - Assets revaluation reserve Less: provision for deferred tax

17

67,162,348 60,000,000 7,162,348

67,162,348 67,162,348 282,610,127 282,610,127

282,610,127 36,444,940 246,165,187 18.2 Revaluation reserve on Govt. securities (Treasury Bills & Bonds)-HTM Opening balance Add: addition during the year Held to Maturity (HTM ) Held for trading (HFT) Less: adjusted during the year Held to Maturity (HTM ) Held for trading (HFT) Closing balance 385,581,483 35,930,464 35,930,464 (190,953,917) (190,953,917) 230,558,030 476,723,217

125,933,116 336,722,807 336,722,807 (77,074,440) (77,074,440) 385,581,483 668,191,610

19

Surplus in profit and Loss Account Retained earnings brought forward from previous year ( Note-19.1 ) Profit for the year Transfer to Statutory Reserve Transferred to General Reserve Transferred from General Reserve 46,474,433 2,371,678,769 (649,646,101) 60,000,000 1,828,507,101 5,336,270 1,719,502,296 (537,298,785) (67,162,348) 1,120,377,433

19.1 Retained earnings Opening balance Issue of Bonus Share 2009 & 2008 Closing Balance 20 Contingent Liabilities :

1,120,377,433 (1,073,903,000) 46,474,433

532,620,870 (527,284,600) 5,336,270

20.1 Acceptances and Endorsement 20.2 Letter of Guarantee


Money for which the Bank is contingently

5,404,953,559

3,596,232,028

liable in respect of guarantees issued Directors Government Banks and other financial institutions Others Total Less: Margin - Note 13.4 2,573,000 2,011,346,537 14,353,711 3,483,992,598 5,512,265,846 514,121,302 4,998,144,544 2,573,000 829,177,222 3,070,400 3,666,733,408 4,501,554,030 369,291,487 4,132,262,543

2010 Taka 20.3 Letter of Credit issued Documentary Credit and short-term trade-related transactions Forward Assets purchased and forward deposits placed Undrawn formal standby facilities, credit Spot and forward foreign exchange rate contract Other exchange contract Total Less: Margin - Note 13.4 20.4 Bills for Collection 21 Interest Income Interest on Loans and Advances Loan ( General) Loan against House Building Loan against Imported Merchandise Loan against Trust Receipts Loan against Packing Credit Loan Revolving SOD against Financial Obligation SOD against Real Estate SOD against Import permit SOD General SOD Export C.C. against pledge C.C. against hypothecation C.C. against Export Forced Loan Inland bill purchased Foreign bills purchased FDBP & Discounted Payment against documents Local documentary bills purchased Transport loan Project loan Demand loan Lease Finance Small Business Loan House Renovation Loan Personal Loans Consumers Finance Scheme Home improvement Loan Loan against Investment Agri Credit Festival Small Business Loan Festival Personal Loan Term Loan (Small,Med/Large) Special Housing Loan Housing Loan under Refinance Scheme Staff P.F Loan Staff House Building Loan Staff Car Loan Credit Card Car Loan Scheme Short Term Loan (STL) Education Loan Scheme

2009 Taka

7,832,081,986 7,832,081,986 750,596,856 7,081,485,130 7,967,342

4,003,613,216 4,003,613,216 543,013,135 3,460,600,081 3,708,113

649,340,935 173,129,961 7,658,838 1,458,779,618 17,635,702 343,498 781,034,925 5,943,442 11,533,256 532,742,454 33,134,612 29,885,476 958,249,847 117,196 63,197,905 506,131 12,681,648 231,234,283 299,672,753 31,044,509 40,464,528 458,394 114,053,345 106,568,807 14,450,510 2,731,883 176,286 68,535 2,816,832 18,322,946 12,325,007 997 1,043,368,184 132,224,492 3,753,785 11,937,027 15,926,536 1,768,638 32,283,633 9,377,266 43,585,242 146,566 6,904,676,428

567,516,110 165,848,576 7,871,050 1,522,090,611 22,750,595 638,607,546 4,256,374 11,400,507 450,646,431 32,942,139 42,435,992 810,128,699 140,353 125,656,495 163,681 12,525 14,358,802 227,641,773 212,134,022 14,970,713 40,628,751 661,219 111,181,167 97,362,245 13,330,345 3,431,619 279,369 914,918 6,398,550 14,009,190 5,126 1,068,703,251 140,408,533 3,028,584 10,324,512 11,363,727 1,784,483 29,605,663 4,394,839 4,388,784 49,927 6,433,827,796

2010 Taka Interest on balances with other banks and financial institutions Fixed Deposits Short term Deposits Nostro Accounts Money at call & short notice Financial Institutions Discount on Bills Purchased 30,971,445 1,167,616 5,115,759 16,555,597 8,398,057 3,125,626 65,334,100 6,970,010,528 227,123,790 127,349,891 3,132,198,306 1,026,880 443,912,734 106,937,755 52,538 96,499,054 68,210,520 5,172,346 15,364,998 50,000 29,284,259 618,633 229,740,020 4,483,541,724 7,739,088 99,715,597 102,000 408,677,346 269,954,699 626,478,064 8,768,502 203,519,671 2,280,538 14,780,979 1,642,016,484

2009 Taka 28,167,813 11,598 4,398,962 1,573,431 19,787,818 1,270 53,940,892 6,487,768,688 185,378,889 75,612,627 3,731,625,918 3,555,479 300,125,515 72,397,064 50,343 156,005,305 99,086,332 2,450,118 116,222,636 73,208 61,963,731 1,173,384 155,022,682 4,960,743,231 2,688,223 248,627 100,837,120 4,541,095 232,000 107,588,489 244,986,623 609,009,989 1,065,359 1,071,197,525

22

Interest paid on deposits and borrowings Savings deposits Short term deposits Fixed deposits Bearer certificate of deposits Special savings scheme Special deposit scheme Discount Borrowings from banks, financial institutions, etc. REPO agreement with Bangladesh Bank Wage Earners Welfare DPS Interest on Treasury Bonds Penal Interest Premium Term deposits Instant Earning Term deposits Money Double Program Interest from investments Dividend on shares Interest on Debentures Interest on Treasury bills Interest on Treasury bonds Commission from National Prize Bond Income from sale of Shares Interest on Treasury Bond (HTM) Interest on Treasury Bond (HFT) Discount on Zero Coupon Bond Discount on Treasury bill/bond Others Interest on Repo Commission, exchange and brokerage Commission: Commission on bill purchased Commission on Remittances Commission on Letter of Guarantee Commission on Letter of Credit Commission on Pur./Sale-Share/Securities Commission on Sanchaypatra Commission on Back to Back LC. Letter of Credit Advising Commission & handling charge Commission on Acceptance of BTB L/C Commission - Miscellaneous Commission on L/C Confirmation Underwriting Commission Commission on Instrument Cancellation ATM POS Commission Money Gram/Others

23

24

7,601,754 21,325,822 85,894,773 163,349,269 1,007,405 1,183,980 45,560,602 9,786,066 58,373,940 11,151,851 1,341,621 8,055,815 17,770 141,369 23,875,365

2,821,486 19,134,317 72,276,500 152,230,354 781,769 88,629 34,617,236 9,582,958 48,035,039 16,462,086 5,311,396 18,200,714 46,956 15,316,690

2010 Taka Exchange: Exchange gain net off exchange losses Brokerage 25 Other operating income Rent Locker Rent Godown Postage recoveries Telex, Telegram, Trunk call, Fax.Swift etc. recoveries Incidental charge recoveries Legal charge recoveries Service charge ATM Transaction Fees Profit on sale of Fixed assets Capital gain on sale of treasury bonds Risk Fund Account Maintenance Fees Card fees Exchange Equalization Gain Miscellaneous earnings Application and processing fees Salary & allowances Basic Salary House rent allowance Allowances ( Note 26.a) ) Bank's contribution to Provident fund Bonus Honorarium 233,625,544 591,988,616 1,264,281,562 1,210,932 806,030 10,380,563 32,372,320 12,524 688,564 62,142,091 4,435,914 4,374,486 32,320,952 5,547,172 54,483,771 14,022,249 465,514 51,469,812 6,951,233 281,684,127 381,333,522 135,405,245 125,413,083 32,334,626 82,091,620 1,123,304 757,701,400 30,023,275 60,372,555 885,547 421,484 12,663,948 21,046,274 125,413,083

2009 Taka 241,195,612 345,155,411 981,257,153 972,838 906,290 9,631,287 31,471,809 177,788 125,384,857 2,955,318 2,321,724 566,037,758 7,434,815 14,445,440 27,149,118 3,920,371 792,809,413 306,921,516 114,427,267 88,580,578 26,145,592 159,622,295 687,094 696,384,342 18,538,974 40,151,829 861,435 384,100 11,370,302 17,273,938 88,580,578

26

26(a) Allowances Entertainment Allowance Medical allowance Washing allowance Evening Banking Casual Wages Other allowance 27 Rent,taxes,insurance,electricity etc. Rent : Office Godown/Garage Clearing House Rates and Taxes: Rates Taxes Insurance: Cash Vehicles Deposits Godown Insurance

80,626,993 693,958 38,641 81,359,592 623,478 2,977,788 3,601,266 3,545,648 1,148,910 30,364,956 264,066 35,323,580

59,163,445 403,000 36,885 59,603,330 464,530 1,736,529 2,201,059 2,933,350 1,073,824 25,066,461 29,073,635

2010 Taka Electricity : Electricity - office Electricity - residence 19,901,140 986,890 20,888,030 141,172,468 3,645,085 112,608 70,505 400,000 4,228,198

2009 Taka 17,305,914 736,019 18,041,933 108,919,957 2,645,410 304,097 87,000 200,000 3,236,507

28

Legal Expenses Legal charge Stamp charge Consultancy fee Credit Rating Fee Postage,stamp and telecommunication Postage Telex/Swift/Internet Telephone -Office Telephone -Residence

29

9,329,852 9,451,671 5,836,738 2,465,860 27,084,121

8,479,027 9,490,888 5,859,310 2,255,096 26,084,321

30

Stationery,printing,advertisement etc. Printing and stationery: Printed stationery Security stationery Petty stationery Publicity and advertisement

13,689,168 9,326,302 12,289,620 35,305,090 33,303,511 68,608,601

9,151,243 2,189,919 9,915,223 21,256,385 16,124,669 37,381,054

31

Managing Director's Salary & allowances Basic Salary Festival Bonus Incentive Bonus Entertainment allowance Medical allowance House Rent allowance 3,555,000 600,000 1,000,000 213,750 427,500 892,500 6,688,750 3,210,000 540,000 195,750 391,500 832,500 5,169,750

32

Director's Fees For attending the meeting of the Board / Executive Committee/ Audit Committee etc. @ Tk 5,000 per attendance per person

2,406,000 150,000

1,840,000 200,000

33 34

Audit Fees Repairs,maintenance and depreciation Repairs & Maintenance: Repairs & Maintenance of Fixed assets Renovation & Maintenance of Premises Depreciation: (Annexure 'A') Furniture and fixtures Machinery and Equipment Vehicles Property

74,314,545 59,814,925 134,129,470 17,280,495 45,592,887 10,752,419 6,035,508 79,661,309 213,790,779

66,898,310 33,099,931 99,998,241 15,129,459 33,932,461 9,459,990 4,182,164 62,704,074 162,702,315

2010 Taka 35 Other expenses Entertainment Car expenses Paper and periodicals Trade Subscription Traveling & Conveyance Cartage & Freight Liveries and Uniform Water sewerage and gas Medical charges Laundry and cleaning Photography Training expenses Business promotion Donation Right Share offering Expenses Utility Charges Traveling and Haltage ( Directors ) Refreshment and dinner ( Directors ) Revaluation Reserve on BGTB/T.Bill (HFT) Welfare and Recreation Other Bank Charge CDBL Charge Miscellaneous expenses Credit Card Service Charge Sale Commission Superannuation Fund Cash received from other operating activities Other operating income Exchange earning Cash paid for other operating activities Expenses for the year Add: Opening accrued expenses Less: Closing accrued expenses Increase/(decrease) of other assets Closing other assets: Stationery in hand Stamps and stamped forms in hand Advance deposit Advance against rent Suspense account Prepaid Expenses (Software) Others Opening other assets: Stationery in hand Stamps and stamped forms in hand Advance deposit Advance against rent Suspense account Adjusting A/C debit Prepaid Expenses (Software) Others Income Tax paid during the year Increase/(decrease) for the year 39 Increase/(decrease) of other liabilities Closing other liabilities Interest Suspense Inter branch transaction account 18,232,496 30,171,430 1,165,022 17,553,826 48,206,974 194,555 975,713 3,826,920 177,005 762,765 162,336 1,627,316 14,407,640 8,214,530 1,230,240 12,557,420 1,803,522 1,287,768 117,543,492 3,072,481 2,352,601 35,255,967 1,881,716 5,925,240 19,326,324 4,500,020 352,415,319 277,309,641 233,625,544 510,935,185 531,732,521 3,925,290 2,708,886 532,948,925 16,538,351 1,386,944 1,662,909 88,740,104 82,735,210 18,441,288 931,591,963 1,141,096,769 18,211,407 980,964 1,497,459 58,482,625 62,556,696 22,057,268 388,027,076 771,948,964 1,323,762,459 (182,665,690)
265,448,405 363,458,684 628,907,089

2009 Taka 15,163,299 26,860,299 1,631,988 10,829,483 31,175,603 144,461 884,393 3,198,397 78,913 481,540 86,709 1,966,805 12,693,346 4,071,970 6,077,553 2,839,757 631,741 40,102,134 3,466,273 1,711,441 17,449,974 1,388,199 4,675,540 2,565,966 2,500,000 192,675,784 790,719,689 241,195,612 1,031,915,301 347,435,799 3,967,769 3,925,290 347,478,278 18,211,407 980,964 1,497,459 58,482,625 62,556,696 22,057,268 388,027,076 551,813,495 10,449,858 733,617 1,419,569 56,049,504 50,287,138 71,000 23,074,869 216,462,115 870,989,660 1,229,537,330 (677,723,835)
230,367,473 459,782,492 690,149,965

36

37

38

2010 Taka Opening other liabilities Interest Suspense Inter branch transaction account 40 Increase/(decrease) for the year Cash and Cash equivalents Cash in hand Balance with Bangladesh Bank and Sonali Bank Balance with other bank and financial institution Prize bonds Earnings Per Share (EPS) EPS for the year ended December 31, 2009 Net Profit after Tax Ordinary share outstanding as on January 01, 2010 Bonus Shares for the year 2009 transferred to paid-up Capital Number of Share outstanding Resated Earning per Share (REPS) {(171,95,02,296/33,58,80,320)*0.72} EPS for the year ended December 31, 2010 Right Issue A. Net Profit after Tax Ordinary share outstanding as on January 01, 2010 Right share issued (2:1) Record date as on March 16,2010 Bonus Shares for the year 2009 transferred to paid-up Capital B. Weighted average number of shares outstanding
{(228490020*74)/365*1.38+(342735030*291)/365}+10739030 (Bonus Share) C. Earnings per share (EPS ) C=A/B

2009 Taka
241,374,297 198,622,890 439,997,187 250,152,778 447,864,005 3,201,391,106 602,084,035 8,057,500 4,259,396,646

230,367,473 459,782,492 690,149,965 (61,242,876) 731,592,743 5,500,014,510 546,123,426 5,436,000 6,783,166,679

41

1,719,502,296 228,490,020 107,390,300 335,880,320 3.71

2,371,678,769 228,490,020 114,245,010 342,735,030 107,390,300 450,125,330 444,640,568 5.33 422.33

Theoretical ex-right value per share is

Fair value of all outstanding shares before the exercise of Rights+Total amount received from exercise of right Number of Shares outstanding before exercise +number of shares issued in the exercise (22849002*583.50)+(11424501*100) (22849002+11424501) Adjustment factor for current period 1.38 (Market Value/Ex-theoretical fair value per share) Adjustment factor for restating last period 0.72 (Ex-theoretical fair value per share/Market Value per Share) Fair value of each share (Market price as on March 15, 2010 583.50 Exercise value of right shares 100.00 Events after the balance sheet date i) The Board of Directors in its 224th meeting held on 12.03.2011 recommended 32% Stock Dividend (i.e; Bonus Share) for the year 2010. The total amount of Dividend is Tk.1,440,401,056 (One hundred forty four crore four lac one thousand fifty six) only. ii) As per Guidelines of Bangladesh Bank and The Securities & Exchange Commission, the Bank has taken steps to form two subsidiary companies for Stock Brokerage business and Merchant Banking namely NCCB Securities & Financial Services Limited & NCCB Capital Limited respectively. Accordingly, the Bank has got the permission from SEC for NCCB Securities and Financial Services Limited and has commenced operation from March 07, 2011.

42

Chairman

Director

Director

Managing Director

Annexur-A

National Credit and Commerce Bank Limited


FIXED ASSETS SCHEDULE AS AT DECEMBER 31, 2010
Balance on 1 January -2010 Particulars Cost Additions (Disposals) / during the adjustments year during the year Taka Taka Balance at 31 December2010 Balance on 1 January2010 Depreciation Balance at 31 Written down Charge for ( On December value at 31 the year Disposals)/ adjustments 2010 December-2010 during the year Taka Taka Taka Taka

Taka Furniture & fixture Machinery & equipment Land - I - Head Office Premise (Under Construction) Land - II - Head Office Premise (with Structure) Land - III Premise of Dhanmondi Branch Land - IV Premise of Islampur Branch Land -V - Premise of Savar Branch Land - V1 - Premise of Bijoynagar Branch Land - V11 - Premise of Pragoti Sarani Branch Land - V111 - Premise of Uttara Branch Land - 1X -Premise of Agrabad Branch Land - X -Premise of Elephant Road Branch Vehicles Sub-total Land - I - Premise of Head Office (Under Construction) Land - II - Head Office Premise (with Structure) Land - III Premise of Dhanmondi Branch Sub-total

Taka

Taka

197,239,809 295,342,856 95,284,000 24,709,834 26,699,950 47,780,237 26,021,474 53,085,456 62,001,525 828,165,141 79,816,000 163,150,265 39,643,862

39,743,833 97,440,324 32,597 62,115,010 62,847,200 58,902,420 87,386,268

(3,870,574) -

236,983,642 388,912,606 95,284,000 24,709,834 26,699,950 47,812,834 26,021,474 53,085,456 62,115,010 62,847,200 58,902,420 87,386,268

84,346,198 138,236,541 57,188 1,658,595 566,707 592,537 1,307,137 34,906,784 261,671,687 261,671,687 204,448,771

17,280,495 45,592,887 57,188 650,698 1,182,821 592,537 1,307,136 872,163 284,104 86,065 11,699 10,752,419 78,670,212 991,097 991,097 79,661,309 62,704,074

101,626,693 (3,452,521) 180,376,907 114,376 2,309,293 1,749,528 1,185,074 2,614,273 872,163 284,104 86,065 11,699

135,356,949 208,535,699 95,284,000 24,595,458 24,390,657 46,063,306 24,836,400 50,471,183 61,242,847 62,563,096 58,816,355 87,374,569 30,343,641 909,874,160 79,816,000 163,150,265 38,652,765 281,619,030 1,191,493,190 849,103,581

(7,123,968) 14,037,780 68,915,337 422,505,432 (10,994,542) 1,239,676,031 Re-valuation

(7,087,507) 38,571,696 (10,540,028) 329,801,871 Depreciation 991,097

422,505,432 136,780,081

79,816,000 163,150,265 39,643,862

December -2010 December-2009

282,610,127 Grand total 1,110,775,268 . 979,754,265

282,610,127 (10,994,542) 1,522,286,158 (5,759,078) 1,110,775,268

991,097 (10,540,028) 330,792,968 (5,481,158) 261,671,687

Annexure-B

NATIONAL CREDIT AND COMMERCE BANK LIMITED


Financial Statements For the year ended 31 December 2010 Balances with other banks and financial institutions Outside Bangladesh - Note 6(2) In demand deposit accounts (non interest bearing) with: 2010 Name of the Bank
Currency Name

2009 Amount in BDT. 533,754 1,369,534 8,944,497 905,912 6,632,299 4,897,467 7,035,000 26,800,395 1,041,928 1,965,312 157,521 4,050,339 18,888,751 6,462,083 4,060,432 4,645,956 11,604,349 3,803,014 9,891,641 1,469,082 125,159,266 Amount in Foreign Currency 42,806.15 2,202,257.00 661,819.00
10,482,518.00

Amount in Foreign Currency 9,808.62 1,585,843.00 127,142.81 1,048,995.00

Convertion rate per unit F.C. 54.4168 0.8636 70.3500 0.8636 70.3500 70.3500 70.3500 70.3500 92.4731 70.3500 0.8636 70.3500 70.3500 70.3500 70.3500 92.4731 70.3500 70.3782 70.3500 92.4731 -

Convertion rate per unit F.C. 48.7883 0.7449 0.7449 0.7449 68.6500 68.6500 68.6500 68.6500 68.6500 68.6500 68.6500 68.6500 97.6313 68.6500 68.6500 65.5996 68.6500 108.5368 68.6500

Amount in BDT. 2,088,439 1,640,461 492,989 7,808,428 343,250 6,865,000 7,669,112 2,928,175 5,751,143 5,351,688 3,859,471 2,939,640 701,368 22,183,126 13,394,673 1,300,863 4,106,739 762,925 176,588 90,364,078

Standard Chartered Bank, Singapore Standard Chartered Bank, Japan HSBC Bank, New York Sumitomo Mitsui Banking Corp. Bank of Tokyo Mitsubishi, Japan Myanma Investment & Co, Mayanmar Banko Itau Bank of Tokyo Mitsubishi, Kolkata American Express Bank, Colombo IFIC Bank Karachi Commerze Bank AG United Bank Ltd., Karachi UBAF,Japan Nepal Bangladesh Bank, Nepal HSBC, Kolkata AXIS Bank Kolkata Bank of Bhutan, Phuentsholing Uni Credio Italiano Spa Wachovia NA ICICI Bank HKK Nova Scotia Canada Habib Metropoliton Bank Standard Chartered Bank, London Standard Chartered Bank, Kolkata

SGD J.YEN USD J.YEN J.YEN ADLR USD ADLR ADLR ADLR EUR ADLR J.YEN ADLR ADLR ADLR ADLR EURO USD USD CAD ADLR EUR ADLR

94,275.75 69,615.74 100,000.00 380,957.99 11,267.36 27,936.21 182,400.00 57,574.12 268,496.81 91,856.19 57,717.59 50,241.16 164,951.65 54,036.82 140,606.13 15,886.59 -

5,000.00 100,000.00 111,713.21 42,653.68 83,774.85 77,956.12 56,219.53 42,820.69 7,183.84 323,133.66 195,115.41 19,830.35 59,821.40 7,029.18 2,572.29

In demand deposit account ( interest bearing) with : Currency Name Standard Chatered Bank, New York Mashreq Bank, New York Citi Bank N. A., New York Standard Chartered Bank, London Commerge Bank AG. BANCA NAZIONALE USD USD USD EURO EURO EURO Amount in Foreign Currency 1,162,781.25 410,051.83 Convertion rate per unit F.C. 70.3500 70.3500 Amount in Foreign Currency 566,078.52 395,373.88 299,696.34 8,422.18 1,789.37 2,263.29 Convertion rate per unit F.C. 68.6500 68.6500 68.6500 97.6313 97.6313 97.6313

Amount in BDT. 81,801,661 28,847,146 110,648,807 235,808,073

Amount in BDT. 38,861,290 27,142,417 20,574,154 822,268 174,699 220,968


87,795,795 178,159,873

Annexure - C

NATIONAL CREDIT AND COMMERCE BANK LTD


Financial Statements For the year ended 31 December 2010

Borrowings from other banks, Financial Institutions and agents ( Outside Bangladesh ) - Note -12 2010 Name of the Bank Convertion Amount in Currency Foreign rate per unit Name Currency F.C. 468,942.53 71.3500 CITI Bank NA USD ICICI Bank, Kolkata Standard Chartered Bank, London Standard Chartered Bank, Kolkata Wachovia NA Mashreq Bank Kolkata HSBC Bank,New York ADLR GBP ADLR USD ADLR USD
436,877.22 3,396.57 792,566.97 211,697.04 1,951,778.61 71.3500 111.6567 71.3500 71.3500 71.3500 -

Amount in BDT.
33,459,050 31,171,190 379,250 56,549,653 15,104,584 139,259,404 275,923,130

Amount in Foreign Currency


74,618.09 57,684.57

2009 Convertion rate per unit F.C.


69.6500 69.6500

Amount in BDT.
5,197,150 4,017,730 9,214,880

Annexure-D

NATIONAL CREDIT AND COMMERCE BANK LTD Notes to the Financial Statements
Statement of Large Loan Exposure made during the year 2010 more than 10% of Total Capital of the Bank (Note-9.7) 2010 Taka Sl. No 1 2 3 4 5 6 7 8 9 10 11 Name of Clients Doreen Power Generation & Systems Ltd. Tanvir Oil Mills & allied concern Aftab Group (all allied concern) Abul Khair Steel Industries Ltd. Best Holdings Ltd. Bengal plastic Industries Ltd Shephered Textile (BD) Ltd. BBC Steel BSRM Steel Ltd. DAF P.P. Ind. & allied concern Saad Musa Home Tex Grand -Total Outstanding Funded Non-Funded 195.20 9.96 113.89 19.94 9.35 143.25 108.29 3.85 81.56 84.73 62.49 38.94 570.78 300.67 Total Amount 205.16 133.83 152.60 112.14 166.29 101.43 871.45 (Amount in Crore) 2009 Taka Total Amount 227.14 65.12 78.26 78.61 78.44 67.46 64.64 84.44 744.11

Annexure-E

National Credit and Commerce Bank Limited


Notes to the financial statements for the year ended December 31, 2010 Investment in Shares as on 31.12.2010
SL No. Type of Shares Face Value Cost / Present value of holdings Average Cost Quoted rate per share as on 31.12.2010 8 652.90 338.00 720.00 9.90 191.60 2,831.75 813.00 1,580.50 902.00 232.70 66.80 2,118.50 16.10 2,031.50 1,594.25 63.70 245.80 326.50 4,647.50 800.50 55.00 497.90 237.10 203.00 1,116.50 944.75 107.40 174.10 600.25 209.80 3,522.00 646.00 140.10 999.00 1,660.75 19.40 112.60 563.75 131.20 171.60 Total Market Value as at 31.12.2010 9 3,264,500 610,090 1,802,880 2,521,530 17,265,076 1,874,619 813,000 1,580,500 7,937,600 5,817,500 24,732,700 4,237,000 6,440,000 11,343,896 15,943 2,149,875 5,161,800 2,612,000 11,990,550 1,601,000 3,309,515 3,485,300 2,548,825 15,225,000 18,981 236,188 22,017,000 5,223,000 35,414,750 6,923,400 17,610,000 1,950,920 14,010,000 2,997,000 1,660,750 7,761,940 1,689,000 2,818,750 2,315,024 7,810,889 268,798,289

Name of Company

No. of Shares

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

2 Quoted: Bata Shoe Co. (BD) Ltd. Bangladesh Auto Cars Ltd. Eastern Cables Ltd. Eagle Star Textile Mills Ltd. National Bank Limited Olympic Industries Ltd. Prime Textile Mills Ltd. A B Bank Ltd. Agrani Insurance Ltd. Asia Insurance Ltd. Al-Arafa Islami Bank Ltd. BSRM Steel Ltd. DBH 1st Mutual Fund DESCO Ltd. Eastland Insurance Ltd. Exim Bank Ltd. Grameenphone Ltd. Green Delta IDLC Islami Bank (BD) Ltd. Jamuna Bank Ltd. Lanka Bangla Finance Ltd. Meghna Petrolium Ltd Navana CNG Ltd. Premier Leasing Ltd. Prime Bank Ltd. Pubali Bank Ltd. Summit Alliance Port Ltd. South East Bank Ltd. Square Textiles Ltd Square Pharma Standard Bank Ltd. Summit Power Ltd. Titas Gas Transmission Uttara Bank Ltd. ICB Islamic Bank Khulna Power Co. Ltd. Laferge Surma Cement Ocean Containers Ltd. RAK Ceramics Ltd. Un-Quoted CDBL Dhaka Stock Exchange Ltd. Chittagong Stock Exchange Ltd. Swift Venture Invst. Partner BD Ltd. Dhaka Vegetable Oil Ind. Ltd. Dun & Bradstreet Rating Agency Summit Uttaranchal PCL Summit Purbanchal PCL NCCBL Mutual Fund -1 Summit Power Ltd. Green Delta Mutual Fund MBL Ist Mutual Fund SEBL 1st Mutual Fund

3 A B A Z A A A A A A A A N A A A N A A A A A A A A A A A A A A A A A A Z A A N N

6 3,008,892 223,932 277,852 4,227,951 5,984,195 511,650 300,000 870,280 8,738,938 6,137,650 26,719,575 4,599,429 4,000,000 9,945,178 11,650 337,500 6,053,665 2,691,070 9,255,159 757,781 3,730,599 3,444,450 3,292,656 17,923,420 13,681 99,825 18,277,987 7,806,380 35,577,269 8,040,555 11,400,286 1,211,893 12,919,344 2,788,029 934,833 5,490,645 2,471,700 3,504,400 2,325,945 2,184,864 238,091,108

7 601.78 124.06 110.96 16.60 66.41 772.89 300.00 870.28 993.06 245.51 72.17 2,299.71 10.00 1,781.01 1,165.05 10.00 288.27 336.38 3,587.27 378.89 62.00 492.06 306.29 238.98 804.75 399.30 89.16 260.21 603.00 243.65 2,280.06 401.29 129.19 929.34 934.83 13.72 164.78 700.88 131.82 48.00

10 5,000 100 1,805 100 2,504 10 254,700 10 90,110 100 662 100 1,000 100 1,000 100 8,800 10 25,000 10 370,250 100 2,000 10 400,000 100 5,584 100 10 10 33,750 10 21,000 10 8,000 100 2,580 100 2,000 10 60,173 10 7,000 10 10,750 10 75,000 100 17 100 250 10 205,000 10 30,000 100 59,000 10 33,000 100 5,000 100 3,020 10 100,000 100 3,000 100 1,000 10 400,100 10 15,000 100 5,000 10 17,645 10 45,518 Total Quoted Share :

400,000 2,000,000 2,000,000 1 400,385 400,385 1 19,001,000 19,001,000 1 991,199 991,199 180,000 18,000,000 18,000,000 31,920 7,448,523 7,448,523 41,659 4,165,900 4,165,900 170,000 17,000,000 17,000,000 255,000 25,500,000 25,500,000 1,500,000 150,000,000 150,000,000 19,000 1,900,000 1,900,000 1,000,000 10,000,000 10,000,000 1,000,000 10,000,000 10,000,000 1,000,000 10,000,000 10,000,000 Total Unquoted Share : 276,407,008 276,407,008 Grand Total : 514,498,115 545,205,296 Total market value of quoted shares is lesser than cost price by Tk.1,53,53,807/- against which provisionof Tk.1,53,53,807/- is appearing in these financial statements (Note-8.1).

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Annexure-F

National Credit and Commerce Bank Limited


Statement of the Name of the Directors and the entities in which they have interest as on December 31, 2010

SL. No.

Name of Directors

Status with the NCCBL Chairman

Name of the firms/companies in which interested as proprietor, partner, director, managing agent, guarantor, employee etc.
Ali Fashion Limited, Chairman Anowara Apparels Ltd., Chairman Anowara Fashions Ltd., Chairman Anowara Paper Mills Ltd., Chairman Bangladesh Fertilizer & Agro Chemicals Ltd., Director Diamond Cement Ltd., Chairman Habib Printers & Publisher Ltd., Chairman Habib Share & Securities Ltd., Chairman & Managing Director Habib Sons, Managing Partner Habib Steels Ltd., Chairman HG Aviation Limited, Director Legacy Fashion Ware Ltd., Chairman Maam Textile Mills Limited, Chairman MTS Re-Rolling Mills Ltd., Chairman Mudys Navigation Ltd., Chairman Noor Garments Ltd, Chairman Regent Fabrics Ltd., Chairman Regent Power Ltd., Chairman Regent Spinning Mills Ltd., Chairman Regent Textile Mills Ltd., Chairman Regent Weaving Ltd., Chairman Saims Superior Limited, Chairman Valiant Fashion Ware Ltd., Chairman Valiant Garments Ltd., Chairman

% of interest
23.81% 22.22% 21.83% 35.00% 18.35% 11.56% 33.35% 16.67% 1:03 33.34% 8.33% 10.60% 16.00% 23.34% 35.00% 31.25% 16.67% 13.33% 14.00% 22.11% 33.33% 1.00% 16.67% 16.84% 100.00% 100.00% 100.00% 100.00% 100.00% 95.00% 2.20% 15.00% 14.93% 93.33% 16.67% 18.00% 17.00% 15.00% 25.00% 25.00% 20.00% 25.00% 25.00% 10.00% 10.00% 25.00%

1 Mr. Yakub Ali

2 Mr. Md. Harunur Rashid

Vice Chairman Nazma Construction Company, Proprietor NCC Consortium, Proprietor Apurba Embrioidery, Proprietor HR Bricks, Proprietor Nazma Construction Company Consortium, Proprietor Faridgonj Fisheries Ltd., Managing Director Global Insurance Ltd., Sponsor

3 Mr. A.S. M. Main Uddin Monem

Director

Abdul Monem Ltd., Director Novus Pharmaceuticals Limited, Managing Director


AM Securities & Financial Services Ltd., Managing Director

Abdul Monem Sugar Refinery Limited, Director AM Pharma Ltd., Managing Director Igloo Ice Cream Limited, Director AM Energy Limited, Director AM Channel Limited, Director Igloo Foods Limited, Director AM Beverage Limited, Director AM Sugar Blending Limited, Director Igloo Dairy Limited, Director AML Power Limited, Director AML Infotech Limited, Director AM Dairy Limited, Director

Jainab Enterprise, Proprietor Jainab Overseas, Proprietor Pragati Insurance Co. Ltd., Director

100.00% 100.00% 0.20%

SL. No.

Name of Directors

Status with the NCCBL Director

Name of the firms/companies in which interested as proprietor, partner, director, managing agent, guarantor, employee etc.
Unilac Sanowara (BD) Ltd., Managing Director Sanowara International Products Ltd., Managing Director Sanowara Garments Ltd., Managing Director Sanowara Drinks & Beverage Industries Ltd., Sanowara Plastic Products Ltd., Managing Director Sanowara Poultry & Hatchery Ltd., Managing Director Sanowara Packaging Industries Ltd., Managing Director Sanowara Dairying Industries Ltd., Managing Director Sanowara Dairy Foods Ltd., Managing Director Sanowara Consumer Products Limited, Managing Director Sanowara Holdings Limited, Managing Director
Sanur Hatchery & Feed Processing Limited, Managing Director

% of interest
25.50% 38.18% 40.00% 26.34% 28.57% 40.04% 45.76% 33.66% 25.00% 22.22% 20.00% 28.57% 20.00% 35.00% 14.70% 6.51% 0.26% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% 4.56% 60.00% 50.00% 75.00% 75.00% 60.00% 50.00% 15.50% 20.00% 48.29% 0.80% 6.00% 8.33% 50.00% 19.00% 50.00% 25.00% 50.00% 35.00% 5.00% 33.00%

4 Mr. Nurul Islam

5 Mr. Md. Abdul Awal

Director

Prime Group of Industries Limited, Chairman & M.D. Prime Energy Limited, Managing Director Prime Textile Spinning Mills Limited, Managing Director Prime Composite Mills Limited, Managing Director Prime Steel Re-Rolling Mills Ltd., Managing Director Prime Dairy & Poultry Ind. Limited, Managing Director Prime Fisheries Industries Limited, Managing Director Prime Trans National Limited, Managing Director Prime Peoples Property Limited, Managing Director Prime World Trade Limited, Managing Director Prime Super Printing Mills Limited, Managing Director Prime Synthetic Limited, Managing Director Prime Weaving Mills Limited, Managing Director Prime Dyeing & Finishing Mills Limited, Managing Director Prime Blended Yarn Mills Limited, Managing Director Prime Melange Spinning Mills Limited, Managing Director Prime Knitwears Limited, Managing Director Prime Information Technologies Limited, Managing Director Prime Textile Fabrics Limited, Managing Director Prime Knit Fabrics Limited, Managing Director Prime Fine Yarn Mills Limted, Managing Director Prime Ship Breakers Limited, Chairman Prime Ship Recycling Limited, Chairman Prime FSS Ship Breakers Ltd., Chairman Prime Financial Consultants & Equities Limited, Shareholder Steel Enterprise Limited, Managing Director Doleswar Iron & Eng. Works Limited, Managing Director Unique Steel Industries Limited, Managing Director

6 Mr.Amjadul Ferdous Chowdhury

Director

Jahanabad Ship Breakers Limited, Chairman B.S.A. Garments Ind. (Pvt.) Limited, Managing Director

B.S.A. Fashion Ltd., Managing Director B.S.A. Apparels Limited, Managing Director Vanguard Garments Ltd., Managing Director Vanguard Fashion Ltd., Managing Director Vanguard Shares & Securities Ltd., Chairman Vanguard Packages Ltd., Managing Director

Vanguard Dresses Limited, Managing Director Glare Fashion Limited, Managing Director Royal Cement Ltd., Chairman Brave Royal Shipping Limited, Managing Director Vanguard Maritime Limited, Chairman Royal P P Bags Limited, Chairman Harrods Garments Ltd., Chairman Glare Trading, Proprietor

33.00% 50.00% 10.00% 20.00% 30.00% 15.00% 25.00% 100.00%

SL. No.

Name of Directors

Status with the NCCBL Director

Name of the firms/companies in which interested as proprietor, partner, director, managing agent, guarantor, employee etc.
J. M. Fabrics Limited, Chairman Brothers Oxygen Ltd., Managing Director Food of Accomodation Limited, Chairman

% of interest
79.88% 80.00% 19.10% 42.85% 36.66% 35.55% 62.50% 50.00% 9.37% 12.50% 74.00% 60.00% 20.00% 60.00% 31.29% 22% 15.00% 13.00% 25.00% 35.16% 12.37% 25.00% Nil 40.00% 20.00% 20.00%

7 Mr. S.M. Abu Mohsin

8 Mrs. Masuda Begum

Director

Arrow Fashion (Pvt) Ltd., Managing Director Neox Garments Ltd., Managing Director Kashmir Garments Ltd., Managing Director Arrow Fabrics (Pvt) Ltd., Chairperson EVE's Harbal Beauty Care Saloon, Managing Partner

9 Mrs. Lutfun Nahar Begum 10 Mr. Abdus Salam

Director Director

Wazhico International Ltd Sagarika Textile Ltd.


The Bengal Electric Ltd., Managing Director Multiple Equipment & Engineering Ltd., Managing Director Gangatia Fisheries Ltd., Managing Director Bengal Shipyard Ltd. (Bengal Energy Ltd.), Managing Director

11 Mr. Mahbubul Alam Tara

Director

Bangladesh Progressive Enterprise Press Ltd. Managing Director Progressive Poly-Pack Ltd., Managing Director

12 Mrs. Sohela Hossain

Director

Mir Akhter Hossain Ltd., Director Mir Cement Ltd., Chairperson Mir Real Estate Ltd., Managing Director Mir Concrete Products Ltd.,Director Mir Telecom Ltd., Chairperson Mir Power Ltd., Director

13 Mr. Ainul Kabir 14 Mr. Khondkar Zakaria Mahmud

Director Director

Nil Home Creations Ltd., Managing Director Kriya Consulting Limited, Director Agro Futures Limited, Director

15 Mr. Md. Shahjahan 16 Mr. Mostafizur Rahman

Director Director

Nil Sirina Garments & Textiles Ltd., Chairman & Managing Dircetor RMS Textile & Apparels Ltd., Chairman & Managing Dircetor Dragoni Fashions Ltd., Chairman & Managing Dircetor CNS Ltd. , Chairman Crown Housing Ltd., Chairman

Nil 25.00% 16.67% 35.00% 16.00% 33.33% 19.76% 50.00%

17 Mr. Mohammad Ali

Director

Imam button Industries Ltd., Managing Director Imam Garments Ltd., Managing Director Imam Dyeing Knitting Printing & Finishing Industries Ltd., Managing Director Hotel Al-Imam Ltd. (Residential), Chairman Super Label Industries Ltd., Director

13.00% 25.00% 25.00%

Faisal Nyeem Knit Garments Ltd., Chairman Prime Shrimp Hatchery Ltd., Chairman Ranal Design Ltd., Chairman Moon Fashion Ltd., Chairman Imam Package & Accessories Industries Ltd. Managing Director Imam Industries Ltd., Chairman Imam Food Industries Ltd., Chairman Shah Amanath Flour Mill Ltd., Chairman Sam Sweater Ltd., Chairman

20.00% 30.00% 25.00% 50.00% 50.00%

50.00% 50.00% 60.00% 20.00%

SL. No.

Name of Directors

Status with the NCCBL Director

Name of the firms/companies in which interested as proprietor, partner, director, managing agent, guarantor, employee etc.
Agro Equipments Ltd., Chairman Protik Ceramic Ind. Ltd., Chairman National Life Insurance Co. Ltd., Chairman Islami Insurance Bangladesh Ltd., Chairman New Nation Garments Ltd., Managing Director T.H. Fashions, Proprietor New Generation Trading, Proprietor T.H. Packages, Proprietor Great walls Land Properties Ltd., Director

% of interest
40.00% 40.00% 0.23% 5.00% 60.00% 100.00% 100.00% 100.00% 30.00% 30.00%

18 Mr. Tofazzal Hossain

19 Mr. Fakhrul Anwar

Director

Golden Inn Chattagram Ltd. Managing Director Federal Insurance Co Ltd., Director Holy Crescent Hospital Ltd., Director Fakhrul Anwar & Bros, Proprietor Neptune Motors Ltd., Director

2.00% 3.00% 100.00% 13.00% 30.00% 35.00% 35.00% 100.00% 100.00% 5.00% 50.00% 100.00% 0.03% 10.00% 25.00% 64.44% 77.58% 20.00% 50.00%

20 Alhaj Md. Nurun Newaz

Director

Electro Mart Limited, Chairman Trade International Marketing Ltd., Chairman Newaz International Ltd., Managing Director The Royal Bengal Agency, Proprietor Royal International, Proprietor Central Insurance Company Ltd., Shareholder Cross Trade Shipping Services Ltd., Managing Director Tuly Trading House, Proprietor

21 Mr. Md.Humayun Kabir

Director Director

22 Mr. Din M. Rana

National Life Insurance Company Limited, Shareholder The White Castle Limited, Chairman Hotel Lake Castle Limited, Director Bestclean Limited, Managing Director Rigs Limited, Managing Director Rigs Aviation Limited, Managing Director Rigs Publication Limited, Managing Director

Rigs Properties Ltd, Managing Director Rigs Organic Fertilizer Ltd. Director NRB World Club Ltd. Director Alliance Capital Management Ltd. Director Rigs Fisheries Prokalpa, Proprietor Rigs Marketing, Managing Director Rigs Herbs, Proprietor Cox's Inn, Proprietor Madina Industrial Corporation (USA), President Modina Corporation (USA), President Shaptahik Kagoj Inc.(USA), President

50.00% 51.00% 14.29% 10.00% 100.00% 50.00% 100.00% 100.00% 90.00% 90.00% 95.00%

SL. No.

Name of Directors

Status with the NCCBL Director

Name of the firms/companies in which interested as proprietor, partner, director, managing agent, guarantor, employee etc.
Prime Group of Industries Limited, Dy. Managing Director Prime Energy Limited, Dy. Managing Director Prime Textile Spinning Mills Limited, Dy.Managing Director Prime Composite Mills Limited, Dy. Managing Director Prime Steel Re-Rolling Mills Ltd., Dy. Managing Director Prime Dairy & Poultry Ind. Limited, Dy. Managing Director Prime Fisheries Industries Limited, Dy.Managing Director Prime Trans National Limited, Dy. Managing Director Prime Peoples Property Limited, Dy. Managing Director Prime World Trade Limited, Dy. Managing Director Prime Super Printing Mills Limited, Dy.Managing Director Prime Synthetic Limited, Dy. Managing Director Prime Weaving Mills Limited, Dy. Managing Director Prime Dyeing & Finishing Mills Limited, Dy. Managing Director Prime Blended Yarn Mills Limited, Dy. Managing Director Prime Melange Spinning Mills Limited, Dy. Managing Director Prime Knitwears Limited, Dy. Managing Director Prime Information Technologies Limited, Dy. Managing Director Prime Textile Fabrics Limited, Dy. Managing Director Prime Knit Fabrics Limited, Dy. Managing Director Prime Fine Yarn Mills Limted, Dy. Managing Director Prime Ship Breakers Limited, Managing Director Prime Ship Recycling Limited, Managing Director Prime FSS Ship Breakers Ltd., Managing Director Prime Financial Consultants & Equities Limited, Shareholder Steel Enterprise Limited, Dy. Managing Director Doleswar Iron & Eng. Works Limited, Dy. Managing Director Unique Steel Industries Limited, Dy. Managing Director

% of interest
1.00% 5.00% 0.34% 0.22% 0.01% 3.00% 3.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 4.54% 5.00% 25.00% 5.00% 5.00% 5.00% 10.00% 10.00% 6.00% 16.46% 0.02% 3.00% 4.17% 10.00% 25.00% 30.00% 50.00%

23 Mr. Md. Abul Bashar

24 Mr. Khairul Alam Chaklader

Director

Jahanabad Ship Breakers Limited, Managing Director Desh Medical College & Hospital , Chairman Gulshan Point (Pvt) Ltd., Managing Director Gold Vision Industries Ltd., Managing Director

Urban Responses Ltd., Managing Director Eastern Logistics Ltd., Director Maxwell Electronics, Proprietor

50.00% 10.00% 100.00% Nil Nil

25 Mr. Md. Moinuddin 26


Professor Shahid Uddin Ahmed, Ph.D.

Director
Independent Director

Nil Nil

Annexure-G

National Credit and Commerce Bank Limited


Related Party Transactions: as at December 31, 2010 Related Party Transactions: The Bank in normal course of business has had transactions with other entities that fall within the definition of Related party as contained in Bangladesh Accounting Standards (BAS-24) (Related Party Disclosures) and as defined in the BRPD Circular # 14 dated 25 June 2003. The Significant Related party transactions during the year were as follows: SL. No. Name of the Organization Directors relation with the concern Managing Director Proprietor Managing Director Proprietor Guarantor Guarantor Managing Director Managing Director Guarantor Managing Director Representing Directors Figure in Lac Nature of Outstanding Outstanding Total Transaction (Funded) (Non-funded) Outstanding SOD(G) CC(H) HBL Loan (G) CC(H) CC(H) SOD(G) CC(H) B/G B/G CC(H) LTR B/G Total 103.05 52.62 74.99 79.57 184.41 27.06 7.96 529.66 6.17 18.45 103.05 52.62 74.99 79.57 184.41 27.06 7.96 6.17 18.45 1.11 555.39

1 Habib Shares & Securities Ltd. 2 New Generation Trading 3 Self Prograsive poly pack Limited 4 M/S. Fahad Traders 5 M/s.Mr.A.Parvez Chowdhury Self 6 Chicks Field Sanowara Drinking & Bevarage Inds. Ltd. Sanowara Dairy & Food Ltd. 7 Samsong Corporation 8 Prime Steel Re-rolling Mills Limited

Mr. Yakub Ali Mr. Tofazzal Hossain Mr. Mahabubul Alam Tara Mr. Fakrul Anowar Mr.Amjadul Ferduse Chowdhury Mr. Humayun Kabir Mr. Nurul Islam

Mr. Khairul Alam Chaklader Mr.Md. Abdul Awal

1.11 25.73

Annexure-H

National Credit and Commerce Bank Limited


Corporate Tax Position as on December 31, 2010 Current Tax accounts Tax Liability as Order/Return Excess/ (Shortage) provision 5=(3-4) (6,862,957) Advance Income Tax paid 6 139,829,928

Accounting Year

Assessment Provision as per per Assessment Year

Dues/ (Refund)

Remarks

1 2001

2 2002-2003

3 139,829,928

4 146,692,885

2003

2004-2005

163,388,876

86,888,016

76,500,860

159,999,990

2004 2005 2006

2005-2006 2006-2007 2007-2008

221,398,901 322,623,135 518,131,245

222,971,622 322,779,734 571,482,877

(1,572,721) (156,599) (53,351,632)

226,708,126 322,779,734 544,969,341

2007

2008-2009

739,994,184

768,858,741

(28,864,557)

735,898,823

7=(4-6) 8 6,862,957 The Bank has filed appeal with the High Court Division of the Supreme Court of Bangladesh against appeal decision for excess tax liability of Tk.68.63 lac which has remained pending till date. (73,111,974) According to revised assessment and appeal decision tax liability comes to Tk.8.69 crore and refund of Tk.7.31 Crore against which tax department has filed an appeal with Appellate Tribunal, The Appellate Tribunal kept the decision of DCT unchanged against which the Bank has filed appeal with High Court Division to established it's right under first proviso to section 82 of ITO-1984. (3,736,504) Assessment Completed - Assessment Completed 26,513,536 Assessment completed under section 82B/120/173 of ITO 1984, but the Bank has filed an appeal to the Commissioner of Taxes (Appeal). 32,959,918 Assessment completed under section 82BB/(3)/83(2)/120/173 of ITO 1984, but the Bank has

2008

2009-2010

828,016,517

842,248,545

(14,232,028)

828,016,518

2009 Total

2010-2011

768,839,222 3,702,222,008

768,839,222 3,730,761,642

768,839,222 (28,539,634) 3,727,041,682

filed an appeal to the Commissioner of Taxes (Appeal). 14,232,027 The Bank has filed second appeal to the Appellate Tribunal to established its rights as per income tax return. - Return filed but assessment order yet to receive. 3,719,960

Annexure-I

National Credit and Commerce Bank Limited


Financial Statements for the year ended 31 December 2010

a.(i) Disclosure regarding outstanding Repo as on 31 December,2010. Amount (Ist leg cash consideration) 4,192,521,903 986,563,692 5,179,085,595

Sl No 01 02 Total

Counter Party Name Bangladesh Bank Standard Chartered Bank

Agreement Date 30/12/2010 30/12/2010

Reversal Date 02/01/2011 06/01/2011

a.(ii) Disclosure regarding outstanding Reverse Repo as on 31 December,2010. Amount (Ist leg cash consideration) NIL Total -

Sl No

Counter Party Name

Agreement Date

Reversal Date

b.Disclosure regarding overall transaction of Repo and Reverse repo. Minimum Maximum outstanding during outstanding during the year the year Securities sold undrer repo: i) with Bangladesh Bank ii)with other banks& FIs Securities Purchased undrer repo: i)from Bangladesh Bank ii)from other banks& FIs 5,663,402,933 2,750,000,000 Daily average outstanding during the year 803,912,337 1,132,215,809 NIL

Annexure-J

National Credit and Commerce Bank Limited FINANCIAL HIGHLIGHTS


For the year ended December 31, 2010 Sl. No. Year under Review (2010) Taka 4,501,253,300 10,033,986,280 1,760,322,280 83,554,177,553 67,961,244,777 63,230,141,628 17,492,550,575 0.93:01 2.27% 2,371,678,769 1,425,280,000 742,802,000 9.31% 74,691,625,856 8,862,551,697 14.95% 2.84% 1,642,016,484 5.33 5.33 12.91 Year under Review (2009) Taka 2,284,900,200 6,322,418,616 1,657,218,616 65,937,491,463 53,900,150,635 50,387,683,203 11,192,802,765 0.93:01 2.84% 1,719,502,296 1,420,567,000 720,224,000 11.10% 60,532,553,968 5,404,937,495 11.08% 2.61% 1,071,197,525 3.71 3.71 15.73

Particulars Paid-up Capital Total Capital Capital surplus / (Deficit) Total Assets Total Deposits Total Loans & Advances Total Contingent Liabilities Credit Deposit Ratio Percentage of classified loans against total Loans & Advances Profit after tax & provision Amount of classified loan during current year Provision kept against classified Loans Provision surplus / (deficit) Cost of Fund ( %) Interest earning Assets Non-interest earning Assets Return on Investment (ROI) Return on Assets (ROA) Income from Investment Earning per Share ( Taka) Net income per Share (Taka) Price Earning Ratio (Times)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Chairman

Director

Director

Managing Director