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Social Islami Bank Ltd.
Head Office: 90/1, Motijheel Commercial Area, Dhaka-1000, Bangladesh
Phone : 09612001122, SWIFT : SOIVBDDH E-mail : [email protected]
URL: www.siblbd.com Webmail:mail.sibl-bd.com
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Contents
Standard Disclosure Checklist
5
Letter of transmittal
9
(i)
Capital Pattern of SIBL
38
SIBL Brand Values
10
(ii)
Pattern of Shareholding
38
Our Vision
11
(iii)
Pattern of Shareholder by holding in 2013
39
Our Mission
11
(iv)
Shares held by the Directors in 2013
39
Strategic Objectives and commitments
12
(v)
Financial Calendar
40
Code of Conducts and ethical principles
13
Corporate profile
15
Analysis & Value Added Statements
41
Milestones
16
(i)
Performance of the Bank
42
Founder of the Bank
17
(ii)
SIBL at a Glance
43
Sponsors of SIBL
18
(iii)
Graphical Presentation of SIBL
44
(iv)
Report & Statements of Value addition and
its Distributions.
46
Board and Committees
Shareholders’ Information
19
37
(i)
Board of Directors
20
(v)
Economic Value Added (EVA) Statement
48
(ii)
Directors’ Profile
21
(vi)
Market Value Added (MVA) Statement
49
(iii)
Executive Committee
24
(iv)
Audit Committee
24
Chairman’s Foreword
50
(v)
Risk Management Committee
24
From the Desk of the Managing Director
54
(vi) Shariah Supervisory Committee
25
Management report & Analysis
56
Report on Internal Control System
60
26
Report of the Board of Directors
61
Management & Committees
(i)
Management Team
27
Corporate Governance Compliance Report
114
(ii)
Core Decision Making Committee
28
Report on National Integrity Strategy
120
(iii)
Asset Liability Committee
28
Report on Going Concern
121
(iv)
Tender Evaluation Committee
29
Audit Committee Report
124
Report on Risk Management
126
(v)
MRS (Management Reporting
System) Committee
29
Market Disclosure under Pillar-III of BASEL-II
128
Investment Committee
29
SIBL Events & Highlights
139
(vii) MANCOM
30
Report of the Shariah Supervisory Committee
160
(Viii) SIBL Integrity Committee
30
(vi)
Auditors’ Report and financial statements
Functions of Social Islami Bank Limited
31
to the Shareholders for the year ended
Corporate Structure
32
31st December 2013
161
Products and Services
34
SIBL Network
240
36
Notice of the 19 Annual General Meeting
248
Form of Proxy
250
Media Accolade
th
3
Social Islami Bank Ltd.
Verses from the Holy Quran and Hadith
In the Name of Allah, Most Gracious, Most Merciful
“..... That is because they say: Trade is just like usury whereas,
Allah permitteth trading and forbideth usury.....”
-Surah Al-Baquarah, verse:275
“…..Allah will destroy Riba (usuary) and will give increase for Sadaqaat and
Allah likes not the disbelievers, sinners…..”
-Surah Al-Baquarah, verse:276
“..... O you who believe! Be afraid of Allah and give up what remains from Riba,
if you are really believers…..”
-Surah Al-Baquarah, verse:278
“..... If you do not do it, then take a notice of war from Allah and his messenger; but if repent,
you shall have your capital sums. Deal not unjustly (by asking more than your capital sums),
and you shall not be dealt with unjustly (by receiving less than your capital sums).....”
-Surah Al-Baquarah, verse:278
“..... Verily never will Allah change the condition of a people until they
change it themselves (with their own souls).....”
-Surah Ar-ra’ad, verse :11
“A man’s work ends upon his death except for three things:
(a) contribution to knowledge (b) on-going charity and (c) faithful child”
- Al Hadith: Muslim
4
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Standard Disclosure Checklist to the key
sections of the Annual Report 2013
Items
Ref. Page No
Corporate Objectives, Values & Structure
Clarity and Presentation
Vision and Mission
11
Overall Strategic Objectives
12
Core Values and Code of conduct / ethical principles
Profile of the Company
Director’s profile and their representation on Board of other companies & organization chart
13-14, 102-113
15
21-23, 32, 225
Management Report / Commentary and analysis including Director’s Report/Chairman’s
Review/CEO’s Review etc.
A general review of the performance of the company
Description of the performance of the various activities / products / segments of the company
and its group companies during the period under review
A brief summary of the Business and other risks facing the organization and
steps taken to effectively manage such risks
A general review of the future prospects / outlook
Social Responsibility initiatives (CSR)
Environment related initiatives
42, 56-59
68-80, 84-85,
87-96
81-83, 126-138
59
92-95, 145-147
75-76
Information on how the company contributed to its responsibilities
towards the staff (including health and safety)
88
Information on Company’s contribution to the national exchequer & to the economy
81
Appropriateness of Discloser of Accounting policies and General Discloser
Discloser of adequate and properly worded accounting policies relevant to assets, liabilities,
income and expenditure in line with best reporting standards
177-183
Any specific accounting policies
180
Impairment of assets
N/A
Changes in accounting policies/changes in accounting estimates
N/A
Segment Information
Comprehensive segment related information bifurcating Segment
Availability of Information regarding different segments and units of the entity
as well as non-segmental entities/units
Segment analysis of
Segment Revenue
80
Segment Results
Turnover
Operating Profit
Carrying amount of Net Segmental Assets
5
Social Islami Bank Ltd.
Items
Ref. Page No
Financial Statements
Disclosures of all contingencies and commitments
Comprehensive related party disclosures
165, 170
85, 225-226
Disclosures of remuneration & facilities provided to Directors & CEO
166, 218
Statement of Financial Position / Balance Sheet and relevant schedules
169-170
Income Statement/Profit & loss Account and relevant schedules
171
Statement of Changes in Equity/Reserves & Surplus schedule
173
Disclosures of types of Share Capital
Statement of Cash Flow
204-205
172
Consolidated financial Statement (CFS)
164-168
Extent of compliance with the core IAS/IFRS or equivalent National standards
176-183
Disclosures/Contents of Notes to Accounts
175-239
Information about Corporate Governance
Board of Directors, Chairman and CEO
Audit Committee (composition, role, meetings, attendance, etc.)
Internal Control & Risk Management
97-106
24, 107, 124-125
Ethics and Compliance
102-103
Remuneration and other Committees of Board
107-108
Human Capital
87-88
Communication to Shareholders & stakeholders
Information available on website
Other information
Environmental & Social Obligations
113
38-40
75-76, 90-95
Management Review and Responsibility
56-59, 99
Disclosure by Board of Directors or audit Committee on evaluation of quarterly reports
124-125
Any other investor friendly information
16
Stakeholders Information
Distribution of shareholding (Number of shares as well as category wise, e.g. Promoter group, FII etc.)
Shares held by Directors /Executives and relatives of Directors / Executives
Redresser of investor complaints
Graphical /Pictorial Data
6
38
39, 98
113
44-45
Earnings per Share
44
Net Assets
45
Stock Performance
44
Shareholders’ Funds
44
Return on Shareholders Fund
44
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Ref. Page No
Horizontal/Vertical Analysis including following
Operating Performance (Income Statement)
Total Revenue
Operating Profit
Profit before Tax
44-45, 57-58, 96
Profit after Tax
EPS
Statement of Financial Position (Balance sheet)
Shareholders Fund
Property , Plant & Equipment
Net Current assets
Long Term Liabilities/Current Liabilities
164, 169
196
164, 169, 174
164, 169
Profitability / Dividends/Performance and Liquidity Ratios
Gross Profit Ratio
57
Earnings before Profit, Depreciation & Tax
57
Price Earning Ratio
58
Current Ratios
57
Return of Capital Employed
58
Debt Equity Ratio
57
Statement of Value Added and its Distribution
Government as Taxes
47
Shareholders as Dividend
47
Employees as bonus / remuneration
47
Retrained by the entity
47
Market share information of Company’s product/services
49
Economic value added
48
Additional Disclosures
Sustainability Development Reporting
56-59
Human Resource Accounting
87-88
Any other good additional disclosures (Independence certification e.g. GNV/GRI)
N/A
Specific Areas for Banking Sector
Disclosure of Ratings given by various rating agencies for Instruments issued
by/of Bank for e.g. FD.CD. Tier-1 Perpetual Bonds
Details of advances portfolio classification wise as per the direction issued
by the central bank of the respective countries
Maturity pattern of key Assets and Liabilities (ALM)
Classification and valuation of investments as per regulatory guidelines /Accounting Standards
N/A
194-195
174
130-134
7
Social Islami Bank Ltd.
Items
Ref. Page No
Business Ratio / Information
Statutory Liquidity Reserve (Ratio)
Net interest income as a percentage of working funds/operating cost –Efficiency ratio
58
Return on Average asset
44
Cost/Income Ratio
58
Net Asset Value per Share
44
Profit per Employee
88
Capital Adequacy Ratio
68-69, 205-212
Operating profit as a percentage of working funds
N/A
Cash Reserve Ratio /Liquid Asset Ratio
184
Dividend Cover Ratio
58
Gross Non-Performing assets to gross advance / Non –Performing Investments (Asset) to
Total Investments (Assets)
239
Details of credit concentration /sector wise exposures
The break-up of ‘Provisions and contingencies’ included in the Profit and Loss account
Disclosure under regulatory guidelines
Details of Non Statutory investment portfolio
191-194
188-191, 194-195,
220-221
95-96, 114-119
188-190
Disclosure in respect of assets given on operating & finance lease
N/A
Disclosures for derivative investments
N/A
Bank’s Network: List of Centers or Branches
8
184-185
240-247
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Letter of transmittal
All Shareholders of SIBL
Registrar of Joint Stock Companies & Firms
Bangladesh Bank
Bangladesh Securities & Exchange Commission
Dhaka Stock Exchange Ltd.
Chittagong Stock Exchange Ltd.
Subject: Annual Report 2013 of Social Islami Bank Limited.
Muhtaram
As-salamu Alikum Wa Rahmatullah
Reference to the above, we enclose herewith the copy of Annual Report of Social Islami Bank Limited along with
audited consolidated and solo Financial Statements as at 31st December 2013. This report includes Income
Statements, Balance Sheet, Cash Flow Statements, Liquidity Statements, Statements of Changes in Equity and
Notes to the Accounts thereon of Social Islami Bank Limited, its subsidiaries namely SIBL Securities Limited and
SIBL Investment Limited.
This is for your kind information and record please.
Md. Humayun Kabir, ACS
Company Secretary
9
Social Islami Bank Ltd.
SIBL Brand Values
In the journey towards excellence, SIBL’s logo depicts bird’s wings with 9 feathers
to represent its core values- comfortable and safe flying in the economic sky of
the country connecting it with the global sky by passing the territorial boundary.
10
Honesty
Efficiency
Accountability
Transparency
honest to its
customers,
employees,
regulators,
shareholders and
others.
gaining efficiency
through best
use of man and
machine.
accountable to
the stakeholders
and to the society
transparent
in each and
every banking
transaction.
at large.
Flexibility
Innovation
Religiousness
Security
Technology
service flexibility
is one of the
most important
features
continuous
innovative idea
generations and
designing of
banking products
and services.
SIBL enhances
economic well
being with the
bliss of religious
ethics
protecting of
assets and
services
providing of
upgraded
technological
banking services.
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Our Vision
Working together for a caring society
hrhL xoJ\ VbPj xoPmf IÄvV´ye
Our Mission
Establishing Three Sector Banking Model
Transformation to a service oriented technology driven profit earning Bank
Fast, accurate and satisfactory customer service
Balanced & sustainable growth strategy
Optimum return on shareholders’ equity
Introducing innovative Islamic Banking Products
Attract and retain high quality human resources
Empowering real poor families and creating local income opportunities
Providing support for social benefit organizations by way of mobilizing funds and social services
11
Social Islami Bank Ltd.
Our Strategic Objectives
Transformation into a service-oriented technology-driven profit earning bank
Ensure fast, accurate and best-in class customer services with customers’ satisfaction
Balanced and sustainable growth strategy
Optimum return on shareholders’ equity
Introducing innovative Islamic Banking Products
Attract, motivate and retain high quality human resources
Empowering real poor families and creating local income opportunities
Providing support for social benefit organizations-by way of mobilizing Funds and social services
To achieve global standards in Islamic Banking
To invest in the priority sector for the overall economic development
Ensure best CSR (Corporate Social Responsibilities) practices
Ensure Green Banking
Our Commitments
to the Shariah
to the Regulators
to the Shareholders
to the Nation
to the Customers
to the Employees
to the other Stakeholders
to the Environment.
12
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Code of Conduct & Ethical Principles
Code of Conduct for the Employees
• AdheretotheShariahPrinciples
• Adheretothedisciplinarymeasuresofthebank
• Adheretoapplicablelawsandregulationsduring
performance of duties
• Toinformthecustomersaboutthebenefitsand
risks of the products and services offered to them
• Toofferunbiasedandfairservicetothecustomers
receiving the same services
• Nottodisclosethesecretsoftheircustomers
and the banks which they come to learn by virtue
of their positions and titles to anyone other than
those persons and authorities who are explicitly
authorized under laws
• Nottocauseanylossofreputationofthebank
during works and attitudes
• Nottobeengagedinanyactivitythatcanbe
classified as personal business
• Nottobehaveincontradictionwiththeprinciples
of justice, integrity, honesty, reliability and social
responsibility
• Tocooperatewithotheremployeesforcommon
purposes through building a courteous and diligent
communication during their fulfillment of duties
• Nottousethebank’sassetsandresources
unproductively and outside the designated purpose
• Nottoderiveanypersonalbenefitsbothfromtheir
own job potentials and from potentials of their
customers by using their positions and titles
• Torefuseallsuchbenefitoffersimmediatelyandto
inform such offers to the competent authorities and
to their superiors
• Nottobeinvolvedinrelationswiththecustomers
such as borrowing-lending, being guarantor and
opening common accounts with the customers
which do not correspond with ethical principles
• Nottoacceptpresentsfromthecurrentorpotential
customers, other than those presents accepted by
the bank personnel under the established practices
in the bank
• Tobeawareofhisaccountabilityregardingthe
duties assumed during the performance of the
services
• Nottoassumeanypositioninanyprivateandpublic
organization other than associations, foundations,
cooperatives, and similar organizations without the
approval of his bank
Ethical Principles of SIBL
• Objectivity- the bank shall possess strict principle
of objectivity in its day to day banking operations
in relations to its customers, employees,
shareholders, other banks, other organizations by
maintaining and protecting the stability and trust in
the banking sector.
• Just and equitable- the bank shall have no
discrimination and avoids all forms of bias in its
attitudes towards employees as well as to its
customers.
• Honesty-the bank during its operations shall
stick to the honesty principle in relations to
customers, employees, shareholders, other
banks, regulators and the stakeholders.
• Impartiality-the bank is impartial towards their
customers based on their nationality, religion,
financial and social standing, and gender
during banking service.
13
Social Islami Bank Ltd.
• Reliability- the bank shall offer clear,
comprehensible and correct information to its
customers within the principle of reciprocal trust
during services and transactions; and to provide the
customer services in a timely and complete manner.
• Transparency- the bank shall inform their customers
in an open, easily understandable and clear way
regarding the underlying rights and responsibilities,
benefits and risks attached to the products and
services offered to them.
• ObservingSocialBenefitandRespectto
Environment- the bank shall show due diligence
to support all kinds of social and cultural activities
in the light of the principle of observing, aside from
the profitability, the social benefit and respect to the
environment.
• Fightingwithmoneylaundering- the bank has
a policy to fight against corruption and Money
laundering etc. as a significant principle as stipulated
by international norms and the provisions of national
laws and regulations. The bank shall take appropriate
measures to discharges duties by the employees
with utmost due care and caution to fight the
laundering of crime originated assets.
• InsiderTrading- the bank has a clear policy and
take all measures in order to prevent the use of
insider information for the trading purposes.
• Relationswithpublicorganizations,regulators
and other institutions- the bank, during its relations
with the public organizations, regulators and other
institutions, should act in observance of the principles
of honesty, accountability and transparency, and
should show the utmost care for the correct,
complete and timely communication of the
information, documents and records in accordance
with the laws and regulations of the country.
• Personnelbehaviors- the bank shall avoid all kinds
of practices and applications that may cause unfair
competition on the employment of the personnel.
• Competition- the bank shall take appropriate
measures to take the challenges of industry
competition in compliance with the laws and
regulations. During the SIBL’s actions to defeat the
competitive forces- all of its activities within the free
market economy shall avoid any unfair means which
may cause indiscipline in the economy or industry
or may be term as immoral or unjustified behavior
or against the principles of integrity. All actions
against competition shall rather aimed to (i) overall
development of the financial sectors (ii) develop
public trust on overall banking operations (iii) observe
the common interest of banks.
14
• AdvertisementsandAnnouncements- SIBL
shall act honestly, realistically, and in compliance
with legal regulations and with the general
moral principles during its announcements,
advertisements and notices under the publicity
and advertising activities regarding products and
services as well as its financial structures. The bank
shall avoid all acts and behaviors that may damage
the reputation of the banking as a profession. The
bank shall also ensure that the announcements,
advertisements and notices do not contain any
statements or expressions degrading or humiliating
other banks, or the products and services of other
banks.
• Customercomplaints- SIBL shall establish a
system in order to respond all and any kinds of
questions of their customers stemming from the
services offered and shall accordingly inform to
customers about this system.
• Security- SIBL Shall recognize the concept of
“Security” that includes all measures towards the
protection of all and any service mediums of the
bank in banking sector including technical hazards
in the services offered to the customers.
• Generalemployeequalities-the bank shall
be aware that it shows due diligence in order
to ensure that the employees of the bank
possess knowledge, background and a sense of
responsibility required by jobs.
• Employmentandcareerdevelopment- the
bank shall in line with the principle of managing
the human resources in the best possible way,
offer trainings, courses, seminars and similar
opportunities to their employees in order to ensure
that they reach to the level necessitated by the
times and by the banking profession.
• Workingenvironment-the bank shall introduce
internal regulations requiring that its employees look
neat and clean in conformance with the reputation
of the banking profession and also provide with a
good congenial working environment.
• JobDescriptions-the bank shall maintain and
update a detailed job descriptions to distribute its
jobs among the employees so that the bank can
show due diligence for the employment of sufficient
number of personnel required by the workload,
organize their employees in a way that they yield
maximum productivity during the working hours,
and show utmost efforts for preventing overtime
work and for their employees use their annual
leaves regularly.
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Corporate Profile
Social Islami Bank Limited (SIBL) was established in the year 1995 as a public limited company which is
engaged in Shariah based commercial banking in the country and its modus-operandi are substantially
different from other conventional banks. This is the second generation pioneer Islamic Bank in this country
to introduce online banking facilities to its customers.
Name of the Company
:
Social Islami Bank Limited
Legal Form
:
Public Limited Company
Company Registration No
:
C-28763(44)/95
Authorized Capital
:
Taka 10,000,000,000
Paid up Capital
:
Taka 703,14,15,640
Registered Office
:
City Center, Level 19, 20, 21 & 22, 90/1 Motijheel C/A, Dhaka-1000
Phone: PABX 88 02 09612001122
FAX: 88 02 9568098
Email: [email protected] Web: www.siblbd.com SWIFT: SOIVBDDH
Tax Payer Identification No
:
035-200-4971
VAT Registration No
:
9011046380 Area Code: 90101
Credit Rating Agency
:
Emerging Credit Rating Ltd.
Auditors
:
M/S Kazi Zahir Khan & Co.
Chartered Accountants, 67/4, Pioneer Road, Kakrail, Dhaka-1000
Chairman
:
Major (Retd) Dr. Md. Rezaul Hoque
Managing Director
:
Md. Shafiqur Rahman
Company Secretary
:
Md. Humayun Kabir
Chief Risk Officer
:
Md. Yunus Ali
Chief Financial Office
:
Walid Mahmud Sobhani, FCMA
Number of Employees
:
1802
Number of Branches
:
94 (Ninety Four)
Number of Shareholders
:
82,614
Investors’ Enquiry
:
Share Division
City Center, Level-19, 90/1 Motijheel C/A, Dhaka-1000
Phone: PABX 88 02 09612001122
For SIBL Securities Limited
(a subsidiary of SIBL)
:
Managing Director
3rd floor, 15 Dilkusha C/A, Dhaka-1000
For SIBL Investment Limited
:
Managing Director
(a subsidiary of SIBL)
3rd floor, 15 Dilkusha C/A, Dhaka-1000
For Offshore Banking
:
Off Shore Banking Department
48 Kamal Attaturk Avenues, Banani, Dhaka-1213
Phone: PABX 88 02 09612001122
Listing Status (Shares)
:
DSE (Dhaka Stock Exchange):
Symbol: SIBL, Listing Date: 18.11.2000
CSE (Chittagong Stock Exchange):
Symbol: SIBL, Listing Date: 04.10.2005
Market Price as on 31.12.2013
DSE: Taka 13.30 Category: A, CSE: Taka 13.20, Category: A
15
Social Islami Bank Ltd.
Milestones
Incorporation Date
05.07.1995
Certificate of Commencement of Business
05.07.1995
Formal Inauguration
22.11.1995
Starting of 1st Branch
22.11.1995
Initial Public Offering (IPO)
26.06.2000
Listing with Dhaka Stock Exchange
18.11.2000
Listing with Chittagong Stock Exchange
04.10.2005
1st Right Share
23.07.2007
2nd Right Share
23.03.2009
3rd Right Share
26.05.2011
Opening of 50th Branch
22.08.2010
Online Banking Facilities Introduced
03.01.2004
Formation of Subsidiary Companies
16
a) SIBL Securities Ltd
20.07. 2010
b) SIBL Investment Ltd.
30.08.2010
Introducing Core Banking Software
01.05.2010
Own Corporate Head Office at City Centre
01.01.2012
Opening of 75th branch (Bashundhara)
27.12.2011
Agreement with VISA
19.08.2010
Launching of Offshore Banking Unit
02.05.2012
Launching of Internet Banking
12.01.2012
Launching of remittance service
18.05.2008
Introducing Green Banking Window
24.12.2011
Introducing Concurrent Audit System
20.01.2011
Opening of 94th Branch (Mymensingh)
09.10.2013
5,50,000 nos. of Deposit Accounts
24.12.2013
40,000 nos. of Investment Accounts
26.12.2013
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Founder of the Bank
The Architect of ‘Three Sector Specialized Banking Model’
Prof. Dr. M.A. Mannan M.A Econ (Michigan), Ph. D. Econ. (Mich. U.S.A)
Former Chief Economist, Islamic Development Bank, (IDB), Jeddah
Former Professor of Economics and Islamic Finance, King Abdul Aziz University, Jeddah, Saudi Arabia.
Founder Chairman of Social Islami Bank Limited.
17
Social Islami Bank Ltd.
Sponsors of SIBL
Foreign Sponsors
1
2
3
4
5
6
7
8
H. E.Dr. Hamid Al-Gabid, Ex-Secretary General,O.I.C.
Jeddah,Former Prime Minister & Finance Minister,
Niger.
H. E. Dr. Abdullah Omar Nasseef, Deputy Speaker
of Consultative Council, Saudi Arabia, Ex-Secretary
General, World Muslim League, and Ex-President,
King Abdul Aziz University, Jeddah, K.S.A.
H. E. Ahmed M. Salah Jamjoom, Former Commerce
Minister, Kingdom of Saudi Arabia.
Islamic Solidarity Fund and its Waqf, O. I.C.
Dr. Bedri Camel Rodoplu
Dr. Abdel Fattah M. Farah
Dr. Abalet Djabiev
Dr. Youssef Shaheed Youseef
Local sponsors
1
Prof. Dr. M. A. Mannan, MA (Econ) (Michigan), Ph.D.
(Michigan) (USA) Certificate in Economic Dev (USA).
2
Major (Retd) Dr. Md. Rezaul Haque
3
Dr. Md. Jahangir Hossain
4
5
6
7
8
9
10
11
12
13
14
Late Mohammad Ibrahim Miyan
Late Md. Abdul Malek
FOUNTAIN (Pvt.)Ltd.
Bangladesh Social Peace Foundation
Dr. J. H. Gazi.
Mr. M. Nurul Amin
Mr. Md. Shah Alam
Alhaj Sultan Mahmood Chowdhury
Alhaj Mohammad Nesaruddin.
Mr. Abdul Awal Patwary
Mr. Md. Anisul Hoque, Representing Hamdard
Laboratories (Waqf) Bangladesh
Mrs. Nargis Mannan, B.A.(Hons), M.A.(DU)
Mrs. Fatema Begum
Mrs. Shamsun Nahar Begum
Mrs. Zohra Alam
Islam Import & Export Associate Ltd.
Al-Haj Nasiruddin
Mr. Kamal Uddin Ahmed
Mr. Ahmed Akbar Sobhan
Mrs. Hasina Iqbal
Al-Haj Sk. Mohammad Rabban Ali
Alhaj Mohammad Aynul Haque
Mr. Mohammad Azam
Mr. Md. Aminuddin
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
18
Dr. Reshmi Mannan Siddique, B.Sc. (Econ.), (LSE),
U.KM.Sc. (Oxon.), M.S. (NY), Ph.D. (Ohio) (U.S.A.)
Dr. Ghalib Mannan, M.B.B.Ch. (Wales)
(U.K.),.M.D.(U.S.A.)
Mr. Sadat Sobhan
Alhaj S.N. Haque
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Board & Committees
•
•
•
•
•
•
BoardofDirectors
Directors’Profile
ExecutiveCommittee
AuditCommittee
RiskManagementCommittee
ShariahSupervisoryCommittee
19
Social Islami Bank Ltd.
Board of Directors
Major (Retd) Dr. Md. Rezaul Haque
:
Chairman
Mr. Md. Sayedur Rahman
:
Vice Chairman
Mr. Mohammad Azam
:
Vice Chairman
Mr. Abdul Awal Patwary
:
Director
Mr. Md. Anisul Hoque
:
Director
Alhaj Nasiruddin
:
Director
Alhaj Sk. Mohammad Rabban Ali
:
Director
Mr. Abdul Jabbar Mollah
:
Director
Mr. Md. Abdur Rahman
:
Independent Director
Mr. Abdul Mohit
:
Independent Director
Mr. Md. Shafiqur Rahman
:
Managing Director
The board comprises of ten members, each having years of experiences in the industry. The board ensures that the
company achieves superior financial result and stewards its leadership position in the industry. Moreover the board
is engaged in major activities such as addressing major policy, regulatory and strategic issue and providing proper
guidelines, monitoring financial performance, monitoring operations of internal control, approval of annual budget,
major capital expenditure. Evaluation of financial performance, approval of audit report, appointment and evaluation
of Managing Director and Senior Management team are the key decisions where the board of directors play a good
part to carry on a sound banking system. In addition, the board of directors is the responsible body to make timely
reporting to shareholders about the affairs and performance of the company. During the year 2013, total 21 number
of Board meetings were held.
20
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Directors’ Profile
Major (Retd.) Dr. Md. Rezaul Haque
Chairman
Major Dr. Md. Rezaul Haque (Retd.) is a veteran Freedom Fighter of Bangladesh Liberation
War-1971. He passed his M.B.B.S from Chittagong Medical College under Dhaka
University and has more than 43 years professional experience in his medical career. He
actively participated in the liberation war as Medical Officer under Sector Head Quarter
No.-1, Harina Army Camp, Subroom, India. He also participated in Arab-Israel War-1973
at the Syrian Front as a young Captain of Bangladesh Army. He served different units of
Bangladesh Army and Family Planning Directorate under MOH. After that he had left for
Kingdom of Saudi Arabia and served Ministry of Health of KSA for 22 years and voluntarily
retired in the year 2001 as Director of Chest Hospital, Jeddah. In the business arena he
is the 2nd Founding Director of Social Islami Bank Limited, Sponsor Director of United
Hospital Limited and Director of SIBL Securities Limited. Currently he is the Chairman of
Little House (Pvt.) Limited, Active Builders Limited, Probashi Forum Co-operative Limited
and SIBL Investment Limited. He is a well known philanthropist and social worker and
engaged himself in various social activities around the country including his home town.
He has established Younus Foundation in the name of his late father at Begumgonj,
Noakhali and has undertaken various social activities there also. Mr. Haque was elected
Chairman of Social Islami Bank Limited for the 1st term in the year 2006-2007. Currently,
for the 2nd term he has been continuing as Chairman of the Bank. Major Dr. Md. Rezaul
Haque (Retd.) was listed in international WHO’s WHO of professional of the world in 1999
in recognition of his academic and civic achievements of life.
Mr. Md. Sayedur Rahman is a Director of Social Islami Bank Limited and one of the
renowned and successful Industrialists and businessmen of high stature of the country.
He is a prominent figure in garments industry. Currently he is the Managing Director
of eminent M/S. Lodestar Garments Ltd., M/S. Mid-Asia Fashions Ltd. He has been
representing Social Islami Bank Limited to Bangladesh Association of Banks (BAB) since
long. He is also a Philanthropist and engaged in various social activities in the country. He
is also discharging his responsibilities as a member of Executive Committee (EC) and Risk
Management Committee of the Bank.
Mr. Md. Sayedur Rahman
Vice Chairman
Mr. Mohammad Azam is a Sponsor Director of Social Islami Bank Limited since its
inception. Mr. Azam is one of the distinguished personalities of Chittagong with 27
years business experience. Besides representing different private limited companies as
Director, he is associated with various social welfare activities in Chittagong as well as
other parts of the country. Currently he is the Proprietor of M/S. Zia & Brothers situated
in Chittagong. He is also discharging his responsibilities as a member of Board Audit
Committee (BAC) of the Bank.
Mr. Mohammad Azam
Vice Chairman
21
Social Islami Bank Ltd.
Mr. Abdul Awal Patwary is one of Sponsor Director of Social Islami Bank Limited since
its inception. Mr. Patwary is a renowned businessman of the country and has almost
34 years business experience as an industrialist. He is actively associated with various
social welfare organizations. He was the Chairman of the Board of Directors of Social
Islami Bank Limited from 27.09.2007 to 15.04.2009. Currently he is the Chairman of
M/S. Patwary Cold Storage Ltd., M/S. Patwary Potato Flakes Ltd., M/S. Greentech
Greenhouse Bangladesh Ltd. and Managing Director of Faysal Shopping Complex Ltd.,
Faysal Shipping Lines and also Proprietor of M/S. Faysal Traders. Mr. Abdul Awal Patwary
is also the Chairman of SIBL Securities Ltd. (a subsidiary Company of the Bank). He is
also discharging his responsibilities as a member of Executive Committee (EC) and Risk
Management Committee of the Bank.
Mr. Abdul Awal Patwary
Director
Mr. Md. Anisul Hoque is a graduate in Accounting from Dhaka University and completed
CA course from the country’s renowned Howladar Yunus & Co., Chartered Accountants,
Dhaka. He is the representative Director of Hamdard Laboratories (Waqf) Bangladesh and
has been working there as Finance Director for last 22 years Mr. Hoque is representing
Hamdard Laboratories (Waqf) Bangladesh, one of Sponsor of Social Islami Bank Limited.
Being in the senior management position in Hamdard Laboratories (Waqf) Bangladesh, he
has a wide range of expertise in Finance, Accounts and Banking. He was the Chairman
of Board of Directors of SIBL from 11.12.2011 to 31.05.2012 and from 14.11.2012 to
29.06.2013 respectively. He is also discharging his responsibilities as a Director of SIBL
Securities Ltd., member of the Risk Management Committee and Board Audit Committee
(BAC) of the Bank.
Mr. Md. Anisul Hoque
Director
Alhaj Nasiruddin is one of Sponsor Director of Social Islami Bank Limited. Mr. Nasiruddin
is a renowned businessman of Chittagong with 28 years experience and also associated
with various social welfare activities. He was the Chairman of the Board of Directors of
the Bank during the period from 15.04.2009 to 13.04.2010 & 01.06.2012 to 13.11.2012
respectively. Currently he is the Managing Director of J.A.N. Corporation Ltd. and also
Proprietor of M/S. Nams Trade Corporation and M/S. Nasim Trading Co. He is also
discharging his responsibilities as Director of SIBL Securities Ltd., and member of
Executive Committee (EC) of the Bank.
Alhaj Nasiruddin
Director
22
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2 0 13
Alhaj Sk. Mohammad Rabban Ali is a Sponsor Director of Social Islami Bank Limited
and one of the renowned and successful Industrialists and Businessmen in this country.
He has been managing directly several projects for the last 30 years. Mr. Ali has widely
traveled in several countries in connection with business and participated in different trade
fairs. Currently he is the Managing Director of M/S. Rabbani Trading Company Ltd., M/S.
Shamlon Industries Ltd., M/S. Shama Poly Yarn Industries Ltd. and also proprietor of M/S.
S. R. Impex Co. Currently, he is also discharging his responsibilities as the Chairman of the
Executive Committee (EC) of the Bank and Director of SIBL Securities Ltd.
Alhaj Sk. Mohammad Rabban Ali
Director
Mr. Abdul Jabbar Mollah is a well known businessman and has almost 28 years business
experience in exporting the frozen foods worldwide. He is a Commercially Important Person
(CIP) of Bangladesh. Currently he is the Managing Director of M/S. Jahanabad Sea Foods
Ltd., M/S. Jalalabad Frozen Foods Ltd. and M/S. Jabbar & Co. Ltd. Mr. Mollah gained
National Export Award for the year 1997-1998, 2000-2001 & 2008-2009 for his valuable
contribution to the national export. He is also discharging his responsibilities as a member of
Executive Committee (EC) of the Bank.
Mr. Abdul Jabbar Mollah
Director
Mr. Md. Abdur Rahman has almost 29 years work experience in different organizations like
State Bank of Pakistan (Karachi), Bangladesh Bank (Head Office) and various multinational
Companies at Jeddah, Saudi Arabia. He has achieved the Degree of Bachelor of
Arts (Economics) from the University of Karachi, Pakistan. He is also discharging his
responsibilities as the Chairman of the Board Audit Committee (BAC), Nominated Director
in SIBL Securities Ltd. and as a member of the Risk Management Committee of the Bank.
Mr. Md. Abdur Rahman
Independent Director
Mr. Abdul Mohit bears almost 50 years of Corporate Management Experience. He is a
knowledgeable individual in all aspects of business area. He is holding the degree of Bachelor
of Commerce. He also bears a vast business experience in diversified fields including Real
Estate business. He was the Director of Star Corporation Ltd. He was also the Member
of the Red Cross and Family Planning Council. He is discharging his responsibilities as a
member of Board Audit Committee (BAC) of the Bank.
Mr. Abdul Mohit
Independent Director
23
Social Islami Bank Ltd.
Executive Committee
Audit Committee
Alhaj Sk. Mohammad Rabban Ali
: Chairman
Mr. Md. Abdur Rahman
: Chairman
Major (Retd) Dr. Md. Rezaul Haque
: Member
Mr. Mohammad Azam
: Member
Mr. Abdul Awal Patwary
: Member
Mr. Md. Anisul Hoque
: Member
Alhaj Nasiruddin
: Member
Mr. Abdul Mohit
: Member
Mr. Md. Sayedur Rahman
: Member
Mr. Abdul Jabbar Mollah
: Member
SIBL has constituted six members’ executive
committee of the board as per Bangladesh Bank
guidelines to ensure good corporate governance in
the business. The executive committee of the board
is responsible for developing policy and strategy
for smooth operation of the business. Moreover,
the committee is also responsible for business
development of the bank to ensure maximization of
shareholders’ wealth protecting other stakeholders’
interest too in the company. Alhaj Sk. Mohammad
Rabban Ali is the Chairman of the present Executive
Committee of the bank. He is a renowned
industrialist and businessman having 30 years
experience, associated with various religious, social
and welfare activities. Currently he is holding leading
position in different organizations. During the year
2013, total 4 nos. of Executive Meetings were held.
SIBL has formulated an audit committee that plays
an effective role in devising an efficient and secured
banking system. The Audit Committee has been formed
comprising four members of the Board of Directors. As
it is guided by corporate governance guidelines, the
bank recruited the Chairman of the Audit Committee
who possesses sound knowledge with banking
experience of more than four decades. SIBL initiates
internal audit of the branches and head office divisions
on a periodical basis. The internal audit is supervised
under Internal Control & Compliance Division (ICCD)
and a separate division named ‘Board Audit Cell (BAC)’
also conducts internal audit supervised by Board
Audit Committee. This BAC directly reports to the
Chairman of Board Audit Committee. The committee
reviews the financial reporting process, the system of
Internal Control, Management Information System,
Management of Risks, the Bangladesh Bank and
Internal Audit reports, Audit process and Compliance
with laws and regulations and the bank’s own code
of conduct. During the year 2013, total 5 (five) nos. of
Board Audit Committee Meetings were held.
Risk Management Committee
Major (Retd) Dr. Md. Rezaul Haque
:
Chairman
Mr. Abdul Awal Patwary
:
Member
Mr. Md. Sayedur Rahman
:
Member
Mr. Md. Anisul Hoque
:
Member
Mr. Md. Abdur Rahman
:
Member
Under the stipulated instructions of Bangladesh Bank, the bank has formed a separate Risk Management
Committee (RMC) consisting of 5 (five) members of the Board of Directors. In view of the revised Risk Management
Guidelines 2012 and BRPD Circular no: 11, functions of the Risk Management Committee shall comprise an effort
to ensure proper risk management in bank. The RMC reviewed stress testing as per Bangladesh Bank guideline for
examining the bank’s capacity of managing future shocks as well as deals with all potential risks that might occur in
future. During the year 2013, total 1 (one) Risk Management Committee Meeting was held.
24
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A view of Shariah Supervisory Committee Meeting
Shariah Supervisory Committee
Principal Sayeed Kamaluddin Zafree
: Chairman
Prof. A.N.M. Rafiqur Rahman
: Vice Chairman
A.Q. M. Abdul Hakim Madani
: Member
Dr. Mohd. Ahsan Ullah Miah
: Member
Moulana Obaid Ullah Hamzah
: Member
Md. Anwar Hosain Molla
: Member
Barister Foysal Ahmed Patwary
: Member
Prof. Md. Abu Taleb
: Member
Md. Shafiqur Rahman
: Member
Shah Wali Ullah
: Member Secretary
25
Social Islami Bank Ltd.
Management & Committees
• ManagementTeam
• CoreDecisionMakingCommittee
(CDMC)
• AssetLiabilityCommittee
• TenderEvaluationCommittee
• MRS(ManagementReporting
System) Committee
• InvestmentCommittee
• MANCOM
• SIBLIntegrityCommittee
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ManagementTeam
Managing Director
Mr. Md. Shafiqur Rahman
Deputy Managing Director
Mr. Ihsanul Aziz
Mr. A.M.M. Farhad
Mr. Md. Yunus Ali
Senior Executive Vice President
Executive Vice President
Mr. Md. Shafiqul Islam
Mr. Mohammad Iqbal
Mr. Tarik Morshed
Mr. Md. Azizul Hakim
Mr. Mohd. Ghulam Sarwar
Mr. Gazi Mohammad Hasan
Mr. Walid Mahmud Sobhani, FCMA
Mr. Md. Akbar Ali
Mr. Md. Akhtar Hussain
Mr. Md. Habibur Rahman
Mr. Ziauddin Sawlet Ghani
Mr. Mohammad Forkanullah
Mr. Kazi Ahsan Khalil
Senior Vice President
Mr. Md. Abdul Hamid
Mr. Md. Khurshed Alam
Mr. M. Sayedur Rahman
Mr. Tabriz Shahjahan
Mr. Syed Ohidur Rahman
Mr. Sultan Badsha
Mr. Faruque Ahmed
Mr. Mahbub Hossain
Mr. Zahurul Islam Khondker
Mr. Md. Azharul Islam
Mr. Muhammed Zubair Sadik
Mr. Sheikh Zahidul Islam, ACA
Mr. Kazi Obaidul Al-Faruk
Mr. Mohammad Shoeb, FCA
Mr. Md. Sofi Ullah
Mrs. Shireen Akhterunnessa
The strategic management activities and overall business operations of SIBL are supervised and directed by the
core management team of the bank. The core management team, as well as the whole bank, is led by the Managing
Director Mr. Md. Shafiqur Rahman who has 35 years of extensive and immense experience in banking. The core
management team of the bank also consists of three Deputy Managing Directors and all of whom have vast
experience in banking ranging from 25 to 34 years. The members of the team have also attended numerous training
and development programs both at home and abroad which enabled them to build enormous knowledge base in
banking. The top management team of the bank (Senior Vice President and above), including the core management
team, consists of 34 qualified and experienced employees including Managing Director.
27
Social Islami Bank Ltd.
Core Decision Making Committee
Mr. Md. Shafiqur Rahman, Managing Director
Chairman
Mr. Ihsanul Aziz, Deputy Managing Director
Member
Mr. A.M.M Farhad, Deputy Managing Director
Member
Mr. Md. Yunus Ali, Deputy Managing Director
Member
For smooth and effective running of the Bank, major operational decisions are taken through CDMC (Core
Decision Making Committee) meeting involving most senior Officials of the Bank. During the year under report,
total 12 Nos. of CDMC meetings were held where 109 nos. of major issues were discussed and discharged.
Asset Liability Committee (ALCO)
Mr. Md. Shafiqur Rahman, Managing Director
Chairman
Mr. Ihsanul Aziz, Deputy Managing Director
Member
Mr. AMM Farhad, Deputy Managing Director
Member
Mr. Md. Yunus Ali, Deputy Managing Director
Member
Mr. Md. Shafiqul Islam, Senior Executive Vice President
Member
Mr. Tarik Morshed, Senior Executive Vice President
Member
Mr. Walid Mahmud Sobhani, Executive Vice President & CFO
Member Secretary
Mr. Mohammad Iqbal, Executive Vice President
Member
Mr. Gazi Md. Hasan, Executive Vice President
Member
Mr. Faruque Ahmed, Senior Vice President
Member
Mr. Mohammad Shoeb FCA, Senior Vice President
Member
Mr. Md. Sultan Badsha, Senior Vice President
Member
Mr. Zahurul Islam Khondker, Senior Vice President
Member
Mr. Syed Mahbubur Rahman, Vice President
Member
Mr. Shawket -ul- Amin, Senior Asstt. Vice President
Member
Mr. Ahsan Habib, Senior Asstt. Vice President
Member
Asset Liability Committee (ALCO) is one of the most vital ones for smooth and effective treasury operation and
Investment planning. To support the Asset Liability Management (ALM) process, the bank has established a
committee called Asset Liability Committee (ALCO) headed by the Managing Director. The Bank’s Asset Liability
Committee (ALCO) is entrusted with the responsibility of managing short-term and long-term liquidity and
28
a n n u a l
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2 0 13
ensuring adequate liquidity at optimal funding cost. The other responsibilities of the Committee include Balance
Sheet structuring and management, measuring Bank’s risk capital requirement and the capital cushion available
to meet the risk and determination of lending and deposit rates & the pricing strategy. The assessment and
control of liquidity is done through Liquidity Reports and Balance Sheet statements.
Now a days, treasury is one of the most risky and sensitive corner for a financial Institutions and major liquidity
decisions are taken through ALCO meeting involving most of the Senior Officials of the Bank. During the year
under report, total 13 Nos. of ALCO meetings were held where 41 major decisions were taken.
TenderEvaluationCommittee
Mr. A.M.M. Farhad, Deputy Managing Director
Chairman
Mr. Walid Mahmud Sobhani, Sr. Executive Vice President
Member
Mr. Md. Akhtar Hussain, Sr. Executive Vice President
Member
Mr. Gazi Mohammad Hasan, Executive Vice President
Member
Mr. Akbar Ali, Executive Vice President
Member
Mr. Zahurul Islam Khondker, Sr. Vice President
Member Secretary
MRS (Management Reporting System) Committee
Mr. Md. Shafiqul Islam, Senior Executive Vice President
Chairman
Mr. Sultan Badsha, Senior Vice President
Member
Mr. Mohammad Shoeb FCA, Senior Vice President
Member Secretary
Mr. Shawket-ul-Amin, Senior Asstt. Vice President
Member
Mr. Wahiduz Zaman, Asstt. Vice President
Member
Investment Committee
Mr. Ihsanul Aziz, Deputy Managing Director
Chairman
Mr. Md. Yunus Ali, Deputy Managing Director
Member
Mr. Mohd. Ghulam Sarwar, Sr. Executive Vice President
Member
Mr. Walid Mahmud Sobhani, Sr. Executive Vice President
Member
Mr. Mohammad Iqbal, Executive Vice President
Member
Mr. Gazi Mohammad Hasan, Executive Vice President
Member Secretary
29
Social Islami Bank Ltd.
MANCOM
Mr. Md. Shafiqur Rahman, Managing Director
Chairman
Mr. Ihsanul Aziz, Deputy Managing Director
Member
Mr. A.M.M. Farhad, Deputy Managing Director
Member
Mr. Md. Yunus Ali, Deputy Managing Director
Member
Mr. Mohd. Ghulam Sarwar
Member
Mr. Md. Shafiqul Islam, Sr. Executive Vice President
Member
Mr. Walid Mahmud Sobhani, Sr. Executive Vice President
Member
Mr. Md. Akhtar Hussain, Sr. Executive Vice President
Member
Mr. Mohammad Iqbal, Executive Vice President
Member
Mr. Akbar Ali, Executive Vice President
Member
Mr. Zahurul Islam Khondker, Sr. Vice President
Member Secretary
Management committee is comprised of eleven senior members of the bank, headed by Managing Director;
Mr. Md. Shafiqur Rahman who has more than 35 years of relevant experience with different banks and has
been serving this bank from the year of 2010. All of the members are from different respective departments.
The committee is highly experienced in the related field and possesses great deal of versatility in the overall
management practice. The day to day operation of the bank is handled by these professionals with modern
banking expertise in their respective fields. MANCOM meets on regular basis to discuss relevant agenda and
scrutinizes all the cases thoroughly before referring to Executive Committee/Board for due approval decision.
SIBL Integrity Committee
30
Mr. Ihsanul Aziz, Deputy Managing Director
Chairman
Mr. Walid Mahmud Sobhani, Senior Executive Vice President
Member
Mr. Md. Akhtar Hussain, Senior Executive Vice President
Member
Mr. Mohammad Shoeb FCA, Senior Vice President
Member Secretary
& Focal Point
Mr. Md. Sultan Badsha, Senior Vice President
Member
Mr. Zahurul Islam Khondker, Senior Vice President
Member
MS. Samia Islam, First Asstt. Vice President
Member
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2 0 13
Function of Social Islami Bank Limited
Deposit
procurement &
management
under Shariah
Principles
Financial
Services i.e.
Letter of
Guarantee, Money
Transfer etc.
Functions of
Social
Islami Bank
Limited
Corporate
Social
Responsibilities
(CSR)
Invesment
using Islamic
Financial
Contract
31
Social Islami Bank Ltd.
Organogram of Social Islami Bank Limited
Board of Directors
Executive Committee of the Board
of Directors
Managing Director
Board
Secretariat
Board
Audit Cell
Shares
Board Affairs
SEVP/EVP
(Chittagong Regional Office)
Deputy Managing Director
Deputy Managing Director
Retail &
Trade
Finance
Division
RMG &
Textile
Division
Support Service
Security &
Compliance
Software
Development &
Maintenance
BACH
Centralized Trade
Processing Unit
IT
Division
Investment Risk
Management
Division
Corporate Customer
Relationship
Department
Approval Unit
(Corporate, / Retail/
RMG)
Administration
Unit
Monitoring Unit
Centralized Clearing
Unit
International
Division
Correspondent
Banking
Foreign & Local
Currency Business
Dealing
SWIFT Operation
Central Bank &
Other Regulatory
Approval
Remittance
Marketing, Branding
and Communication
Division
Treasury
Front Office
Exchange Rate
Fixation & Profit
Rate Fixation
Foreign Remittance
Cell
Marketing
Branding
Market Research
Products
Development
Communication
Alternative
Delivery
Channel
OBU
MIS/R&D
Centralized Remittance
Processing Unit
Premises,
Decoration &
Dead Stock
32
Card
Division
Printing ,
Stationery &
Stores
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2 0 13
Shariah Supervisory Committee
Secretariat
Risk Management Committee
Board Audit
Committee
Member Secretary
MD’s Secretariat
Muraquib
Vigilance &
Inspection Unit
Administrative
Unit
Deputy Managing Director
Logistic
Support
Division
Financial
Administration
Division
Treasury Back
Office
(Treasury Mid
Office)
Foreign Currency
Market Information
Analysis & Strategy
Daily Statement of
Treasury Operations
Vouchers & Profit/
Loss Findings
MIS of Treasury
Operations
Budget & Financial
Control
FC & Taka
Dealing
Reconciliation
Nostro A/c
Management &
Reconciliation
Statement &
Returns
SME &
Agricultural
Finance Division
SME (Relationship)
Reconciliation
Central Accounts
Agriculture
(Relationship)
AML Unit
Monitoring
Unit
Special Asset
Management
Division
Recovery
Cell
Affairs
Legal
Affairs
Risk Management
Division
ALCO
Desk
Basel-II
Implementation Cell
Branches
Control &
General
Banking
Division
HR Personnel
Management
Human
Resources
Division
Internal
Control &
Compliance
Division
Audit &
Inspection Unit
Monitoring
Unit
Compliance
Unit
HR Policy
HR Training
CTR/STR
Disciplinary
Action Cell
B. Bank Returns
Security
Services
Transport &
Maintenance
33
Social Islami Bank Ltd.
Products & Services
Deposit Products
34
•
SonaliDinSpecialDepositScheme
•
MudarabaSpecialDepositPensionScheme
l Al-Wadeeah Current Account
•
MudarabaBashsthanSavingsScheme
l Mudaraba Savings Account
•
MudarabaHajjSavingsDeposit(Kafela)
l Mudaraba Notice Deposit Account
•
CashWaqf
l Mudaraba Term Deposit Account
•
MudarabaLakhopatiDepositScheme
•
1month
•
MudarabaDoubleBenefitDepositScheme
•
3months
•
ShamridhirShopanSpecialDepositScheme
•
6months
•
MudarabaMarriageSavingsScheme
•
12months
•
MudarabaMohoranaSavingsA/c(10Years)
•
MudarabaMonthlyProfitDepositScheme
•
MudarabaMohoranaSavingsA/c(5Years)
•
MudarabaMillionaireSavingsScheme
•
ShanchitaSpecialDepositScheme
•
MudarabaEducationDepositScheme
•
SubarnalataSpecialDepositscheme
•
SubarnaRekhaSpecialDepositScheme
•
SabujChayaSpecialDepositscheme
•
SabujSayannayaSpecialDepositScheme
•
ShukherThikanaSpecialDepositScheme
•
ShachhandaProtidinSpecialDepositScheme
•
SIBLYoungStarAccount
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2 0 13
Investment Products
•
MobileBanking
•
Bai-Murabaha
•
OffshoreBanking
•
Bai-Muajjal
•
CentralizedTradeProcessingServices
•
HirePurchaseunderShirkatulMelk
•
Remittance
•
Mudaraba
•
Locker
•
Musharaka
•
StudentFile
•
Bai-Salam
•
SWIFT
•
DocumentaryBillPurchase
•
CapitalMarketServicesthroughSIBL
•
Quard
•
SIBLEmployees’HouseBuildingInvestmentScheme
•
ADR(AlternateDeliveryChannel)
•
SME&AgriculturalFinance
•
SchoolBanking
Subsidiaries
Service Products
•
OnlineBanking
•
ATM24/7
•
CARD(Local&Foreign)
•
AutomatedClearing
•
ElectronicFundTransfer
35
Social Islami Bank Ltd.
Media Accolade
36
a n n u a l
Shareholders Information
• CapitalPatternofSIBL
• PatternofShareholdings
• PatternofShareholders
by holding in 2013
• SharesheldbytheDirectorsin2013
• FinancialCalendar
37
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2 0 13
Social Islami Bank Ltd.
Capital Pattern of SIBL
Year
Declaration
1995
No. of
Shares
Initial Capital
118,380
1996
1997
Face Value
per Share
(Taka)
6.43% Bonus issue for the year 1996
1998
1,000
Cumulative
no. of
Shares
118,380
Value of
issued Capital
fortheyear
(Taka)
Cumulative
value of
Capital
(Taka)
118,380,000
118,380,000
-
-
118,380
-
118,380,000
7,620
1,000
126,000
7,620,000
126,000,000
-
-
126,000
-
126,000,000
1999
Right Share Issued
74,000
1,000
200,000
74,000,000
200,000,000
2000
Placement
50,000
1,000
250,000
50,000,000
250,000,000
Initial Public Offer
10,000
1,000
260,000
10,000,000
260,000,000
-
-
260,000
-
260,000,000
2001
20% Bonus Issue (Declared in the year 2004)
2002
25% Bonus Issue (Declared in the year 2004)
-
-
260,000
-
260,000,000
2003
50% Bonus Issue (Declared in the year 2004)
-
-
260,000
-
260,000,000
2004
Bonus Issue (For the years 2001, 2002, 2003)
325,000
1,000
585,000
325,000,000
585,000,000
2005
-
-
585,000
-
585,000,000
2006
-
-
585,000
-
585,000,000
2007
1:1 Right Share
5,345,550
100
11,195,550
534,555,000
1,119,555,000
2008
17% Bonus Issue for the year 2007
1,903,243
100
13,098,793
190,324,300
1,309,879,300
2009
10% Bonus Issue for the year 2008
1,309,879
100
14,408,672
130,987,900
1,440,867,200
2010
11% Bonus Issue for the year 2009
1:1 Right Share
2011
14% Bonus Issue for the year 2010
1:1 Right Share
100
26,917,259
1,250,858,700
2,691,725,900
2,960,899
100
29,878,158
296,089,850
2,987,815,750
41,829,420
10
340,610,995
418,294,200
3,406,109,950
298,781,575
10
639,392,570
2,987,815,750
6,393,925,700
-
-
-
-
6,393,925,700
63,748,994
10
703,141,564
637,489,940
7,031,415,640
No. of
Shareholders
as on
31.12.2012
No. of
Shares
as on
31.12.2012
Percentage
as on
31.12.2012
2012
2013
12,508,587
10% Bonus Issue for the year 2012
Pattern of Shareholdings
Sl no
01
Investor Group
Sponsors & Placement
No. of
Shareholders
as on
31.12.2013
27
No. of
Shares
as on
31.12.2013
17,00,26,278
Percentage
as on
31.12.2013
24.18%
25
14,65,10,956
22.91%
0.63%
02.
Sponsor-Foreign
7
39,39,914
0.56%
8
40,20,633
03.
Sponsor & Placement-Company
3
2,11,27,116
3.00%
5
5,26,70,209
8.24%
04.
General Public
80824
40,58,49,477
57.71%
77957
33,34,70,339
52.15%
05.
Institutions (Bank & Insurance)
66
2,03,06,314
2.89%
69
2,18,74,567
3.42%
06.
Institutions (Others)
1593
7,29,79,399
10.38%
346
7,36,48,501
11.52%
07.
ICB Accounts Holders
68
4,71,973
0.07%
76
33,83,041
0.53%
08.
ICB
1
44,21,687
0.63%
2
2,56,216
0.04%
09.
ICB Unit Fund
2
34,95,025
0.50%
2
30,79,046
0.48%
10.
ICB Mutual Fund
11.
Non-Resident Bangladeshi
9
2,62,655
0.04%
9
2,38,781
0.04%
14
2,61,726
0.04%
14
2,40,281
0.04%
82,614
70,31,41,564
100.00%
78,513
63,93,92,570
100.00%
a n n u a l
re p o r t
2 0 13
Pattern of Shareholder by holdings in 2013
Share holding range
No. of
Shareholders
as on
31.12.2013
No. of
Shares
as on
31.12.2013
Percentage
as on
31.12.2013
No. of
Shareholders
as on
31.12.2012
No. of
Shares
as on
31.12.2012
Percentage
as on
31.12.2012
Less than 500 shares
31864
50,12,253
0.71%
33,009
6530028
1.02%
501-5000
42535
7,11,57,801
10.12%
38,886
65621940
10.26%
5001-10000
4211
2,93,82,116
4.18%
3,496
24935347
3.90%
10001-20000
2263
3,04,19,428
4.33%
1,724
23,145,340
3.62%
20001-50000
1090
3,22,76,868
4.59%
854
24,988,897
3.91%
651
53,48,93,098
76.07%
544
494,171,018
77.29%
82,614
70,31,41,564
100.00%
78,513
639,392,570
100.00%
50001-99999999999
Shares Held by the Director in 2013
Sl no
Name of the Director
Positionheldinthe
Numberof
Bank as on
Shares held on
31.12.2013
(31.12.2013)
Percentageof Totalnumberof
total holding
Shares as on
31.12.2013
01
Major (Retd) Dr. Md. Rezaul Haque
Chairman
1,40,67,491
2.00%
02
Mr. Md. Sayedur Rahman
Vice Chairman
1,40,67,554
2.00%
03
Mr. Md. Anisul Hoque
[Representative of Hamdard Laboratories
(WAQF) Bangladesh]
Director
1,40,66,727
2.00%
04.
Alhaj Sk. Mohammad Rabban Ali
Director
1,41,01,998
2.00%
05.
Mr. Abdul Awal Patwary
Director
1,40,73,417
2.00%
06.
Alhaj Nasiruddin
Director
1,40,69,676
2.00%
07.
Mr. Mohammad Azam
Director
1,40,66,904
2.00%
08.
Mr. A Jabbar Mollah
Director
1,42,08,452
2.02%
09.
Mr. Md. Abdur Rahman
Independent Director
1,22,068
0.017%
10.
Mr. Abdul Mohit
Independent Director
10,31,670
0.147%
Total
11,38,75,957
16.184%
70,31,41,564
39
Social Islami Bank Ltd.
Financial Calendar
Year 2013
Un-audited Consolidated results for the 1st Quarter announced on
15.05.2013
Un-audited Consolidated results for the 2nd Quarter announced on
03.09.2013
Un-audited Consolidated results for the 3rd Quarter announced on
27.10.2013
Audited Consolidated Financial Statements for the year ended 31st December 2013 approved on
31.03.2014
Declaration of Dividend for the year 2013
31.03.2014
Declaration of ‘Record Date’ for holding of 19th Annual General Meeting
24.04.2014
Notice of 19th Annual General Meeting served on
08.05.2014
19th Annual General Meeting to be held on
31.05.2014
Dividend for the year 2013 to be paid on
13.06.2014
Year 2014
40
Un-audited Consolidated results for the 1st Quarter to be announced on
11.05.2014
Un-audited Consolidated results for the 2nd Quarter to be announced on
31.07.2014
Un-audited Consolidated results for the 3rd Quarter to be announced on
30.10.2014
Audited Consolidated Financial Statements for the year ended 31st December 2014 approved on
26.02.2015
Dividend for the year 2014 expected to be declared on
26.02.2015
Expected date for declaration of ‘Record Date’ for holding of 20th Annual General Meeting
19.03.2015
Notice of 20th Annual General Meeting expected to be served on
12.04.2015
20th Annual General Meeting expected to be held on
27.04.2015
Dividend for the year 2014 expected to be paid on
07.05.2015
a n n u a l
re p o r t
2 0 13
Analysis & Value Added Statements
• PerformanceoftheBank
• SIBLataGlance
• GraphicalpresentationofSIBL
• StatementsofValueAdditionanditsDistributions
• EconomicValueAdded(EVA)Statements
• MarketValueAdded(MVA)Statements
41
Social Islami Bank Ltd.
Performance of the Bank
Performance of the year 2013 has been conspicuous
with a growth over the previous year recording
achievements in different segments of (i) client deposit:
18.37% (ii) Investment: 13.02% (iii) Foreign Exchange
Business: 4.63% (iv) Operating Profit: (19.17%).
The bank has achieved 70.46 % operating profit,
92.74% Deposit, 95.47% Investment, 77.87% Foreign
Exchange Business towards the target set for the year
2013. Although the operational results for the year 2013
are behind the target, but encouraging towards the
journey for the year of 2014.
Although the operational results of the year 2013 was
not up to the mark SIBL believes that the efforts of
the year 2013 will inspire & stimulate the employees
of the bank to accept the challenge of the year 2014
and accordingly the bank is in the process to explore
every potentiality of each individual employee to deploy
his/her sincere endeavor in the days ahead. In the
year 2014, the bank has focused specially on the
concepts of (i) Service Excellence (ii) Quality & Secured
Investment (iii) Non Funded Business (iv) Recovery
from both regular and non-performing Investment (iv)
Exploration of Low Cost & no Cost deposits, Retail &
Stable deposits particularly Scheme based deposit &
(v) Maintenance of an Ideal Deposit Mix with a view to
constraining the cost on one side and to establish a
safe & stable deposit management system on the other.
The results of the year 2013 are given as hereunder:
Fig in crore Taka
Indicators
Target2013
Actual-2013 Actual-2012 Achievementpercentage Growth%
Deposits
10,350.00
9,598.48
8,109.14
92.74%
18.37%
Investments
9,000.00
8,592.23
7,602.50
95.47%
13.02%
Foreign Exchange Business
17,000.00
13,237.47
12,651.99
77.87%
4.63%
415.00
292.43
361.78
70.46%
(19.17%)
Operating Profit
a n n u a l
re p o r t
2 0 13
SIBL at a Glance
Fig in million Taka
Sl no
Particulars
2008
01
Authorized Capital
4000.00
02
Paid-up Capital
03
2009
2010
2011
2012
2013
4000.00
10000.00
10000.00
10000.00
10000.00
1309.88
2691.72
2987.81
63693.92
6393.92
7031.42
Total Shareholders Equity
1867.36
3555.75
4198.77
9412.21
10181.97
11083.43
04
Capital Base (Tier I & II)
2168.22
3914.62
4678.56
9534.52
10596.51
11623.52
05
Total Deposits
24099.82
31588.16
44850.77
66852.55
93594.29
102104.48
06
Client Deposits
22065.79
27663.62
39833.37
56661.16
81091.39
95984.82
07
Investments (General)
19951.30
26580.58
36680.28
53908.58
76024.97
85922.33
08
Investments (Shares & Securities)
853.46
1310.66
3049.72
5241.36
6144.01
8538.18
09
Foreign Exchange Business
33363.20
39110.00
61931.00
108308.30
10
Operating Profit
787.37
1064.31
1638.63
2768.80
3617.82
2924.55
11
Profit before Tax
354.81
726.88
1136.69
1901.28
2747.89
2024.66
12
Fixed Assets
443.28
649.61
914.74
2134.87
2249.95
2653.88
13
Total Assets
29808.88
39980.82
55168.54
84406.18
14
Stock Dividend
Cash Dividend
10%
-
11%
-
14%
-
10.50%
10.00%
5.00%
0.00%
12.00%
15
Investments as a % of
total deposits
82.79%
84.15%
81.78%
80.63%
81.23%
84.15%
16
Investments as a %
of Client deposits
90.42%
96.08%
92.08%
94.65%
89.19%
86.78%
17
Risk Weighted Capital
Adequacy Ratio
10.87%
14.97%
9.33%
13.17%
11.52%
11.64%
18
Ratio of Classified Investments
to Total Investments
4.38%
3.19%
4.76%
3.93%
3.33%
5.35%
19
No. of Foreign Correspondents
2200
2250
2250
2250
2230
2230
20
Number of Employees
750
950
1252
1375
1625
1802
21
Number of Branches
28
52
64
76
86
94
22
Book Value per Share
100
100
10
10
10
10
23
Earning per Share
17.20
18.39
2.15
1.81
2.25
1.74
24
Credit Rating by:
*CRISL
CRISL
CRISL
CRISL
ECRL
**ECRL
Long Term
A-
A+
A+
A+
AA-
AA-
Short Term
ST-2
ST-2
ST-2
ST-2
ECRL-2
ECRL-2
126519.90 132374.70
115165.95 126616.56
*CRISL-Credit Rating Information and Services Limited
**ECRL-Emerging Credit Rating Limited
43
Social Islami Bank Ltd.
Graphical presentation of SIBL
60
4000
3500
3000
2500
2000
1500
1000
500
0
3617.82
2924.55
2768.8
1638.63
51.80
50
40
30.80
30
1064.31
26.20
19.40
20
2009
2010
2011
2012
2013
13.30
10
0
Opperating Profit (Taka in Million)
2009
2010
2011
2012
2013
Stock Performance
20
2.5
15.31
15
12.14
14.15
11.51
11.01
10
1.84
1.81
1.74
1.5
1.0
5
0.5
0
2009
2010
2011
2012
2013
0.0
2009
20
15
14.05
13.21
14.72
15.92
2010
2011
2012
2013
Earning per Share (Taka)
Return on Equity (%)
15.76
3.0
2.39
2.5
2.72
2.75
2.0
10
1.5
1.67
1.24
1.0
5
0.5
0.0
0
2009
2010
2011
2012
2013
2009
3000
2747.89
2500
2000
1500
1000
2012
2013
1441.13
600
1220.2
1083.42
1200
900
1136.69
726.88
431.52
643.02
300
500
0
2011
1500
2024.66
1901.28
2010
Return on Assets (%)
Net Asset Value per Share (Taka)
2009
2010
2011
2012
2013
Profit Before Tax (Taka in Million)
44
2.25
2.15
2.0
0
2009
2010
2011
2012
Profit after Tax (Taka in Million)
2013
a n n u a l
12000
9534.52
10000
10596.51
11623.52
8000
6000
3914.62
4000
4678.56
2000
0
2009
2010
2011
2012
Total Eligible Capital (Taka in Million)
12000
9412.21
10000
10181.97
2013
11083.43
4000
2987.81
2009
2010
3555.75
60000
4198.77
40000
2009
2010
2011
2012
81091.39
80000
0
2013
95984.82
93594.29
40000 27663.62
3158.16
2009
2010
2011
40000
2012
Total Deposit (Taka in Million)
100000
76024.97
2013
85922.33
53908.58
26580.58
36680.28
20000
2009
2010
2011
2012
0
2013
Client Depsit (Taka in Million)
150000
90000
2009
2010
2011
2012
2013
General Investment (Taka in Million)
126519.90132374.72
108308.30
120000
150000
115165.95
120000
60000
39110.00
126616.56
84406.18
90000
61931.00
30000
39980.82
55168.54
30000
2009
2010
2011
2012
2013
0
Foreign Exchange Busines (Taka in Million)
100
80
52
86
76
64
94
2009
2010
2011
2012
2013
Total Assets (Taka in Million)
12000
9412.21
10000
10182
11083.4
8000
6000
40
4000
20
0
102104.48
66852.55
60000
39833.37
20000
60
2013
44850.77
80000
56661.16
60000
0
2012
7031.42
20000
100000
60000
2011
120000
Total Share Holders’ Equity (Taka in Million)
0
6393.93
Total Paid-up Capital (Taka in Million)
80000
2000
0
2691.72
2 0 13
6393.93
100000
8000
6000
8000
7000
6000
5000
4000
3000
2000
1000
0
re p o r t
3555.75
4198.77
2000
2009
2010
2011
2012
Branch Network
2013
0
2009
2010
2011
2012
2013
Net Asset (worth Taka)
45
Social Islami Bank Ltd.
Report & Statements of Value Addition and its Distributions
Value Added Report for the year ended 31st December 2013
Value Added Report indicates exactly how a company accumulates total value from its area of operation in a particular
time frame and accordingly shows how the added value has been distributed to the society in the backdrop of the
general economy of a country.
Now a days the most complex and modern business environment does not earn profit for itself only rather it cares for
the society and thus is committed to contribute to the economic growth. Such value is being added due to spill over
economic impact due to operation of the business houses.
SIBL as a commercial bank, has a large scale of spill over economic impact side by side its financial impact through
creating values for distributions to the society year to year. .
Value Added Statement for the year ended 31st December 2013
Value addition is a measure of wealth as created by the bank through its banking activities. The Statement shows how
the total wealth has been created and distributed among the stakeholders of the Bank in the year.
Value Added Statement
for the year ended 31 December 2013
Particulars
Investment Income
Income from Investment in Shares and Securities
Commission, Exchange and Brokerage
Other Operating Income
Less: Cost of Services & Supplies
Profit paid on Deposits
Rent, Taxes, Insurances, Electricity etc.
Legal Expenses
Postage, Stamps, Telecommunication etc.
Stationery, Printings, Advertisements etc.
Directors’ Fees & Expenses
Shariah Supervisory Committee’s Fees & Expenses
Auditors’ Fees
Repair of Bank’s Assets
Other Expenses
Value added by Banking Services
Less: Provisions related to Investment
Specific provisions for Investment
General Provisions for Investment
General Provisions for off-Balance Sheet exposure
Provision for other assets
Provision for diminution in value of shares
TotalValueAddition
46
Fig in Crore Taka
Year 2013
1362.94
32.55
102.66
22.80
1520.95
Year 2012
1131.90
23.38
117.90
32.50
1305.68
970.69
22.78
0.79
3.15
9.10
0.43
0.03
0.05
1.79
43.15
1051.96
468.99
754.17
18.12
0.86
2.81
8.06
0.38
0.01
0.09
1.35
35.66
821.51
484.17
75.27
8.47
2.71
0.49
86.94
382.05
28.53
17.35
10.45
22.27
78.61
405.56
a n n u a l
re p o r t
2 0 13
Report & Statements of Value Addition and its Distributions
Value Added Report for the year ended 31st December 2013
Fig in Crore Taka
Distribution of Value Addition
Year 2013
Percentage
Year 2012
Percentage
151.41
39.63%
108.86
26.84%
80.30
21.02%
130.15
32.09%
5.05
1.32%
3.01
0.75%
To the growth of the entity-(-)
145.29
38.03%
163.54
40.32%
as Statutory Reserve (-)
40.49
10.60%
54.96
13.55%
as Retained Earnings (-)
81.53
21.34%
89.15
21.98%
as Deferred Tax (-)
0.15
0.04%
0.52
0.13%
as Depreciation (-)
15.53
4.06%
13.53
3.34%
7.59
1.99%
5.38
1.33%
382.05
100.00%
405.56
100.00%
To the Employees- as salaries & allowances
To the Government- as Tax
To the Society- as Zakat
as Gratuity Fund
Distribution of Value Addition (%) - 2012
26.84%
40.32%
To the Employees-as salaries & allowances
To the Society-as Zakat
To the Government-as tax
32.09%
To the growth of the entity
0.74%%
Distribution of Value Addition (%)-2013
To the Employees-as salaries & allowances
39.63%
38.03%
21.02%
To the Society-as Zakat
To the Government-as tax
1.32%
To the growth of the entity
47
Social Islami Bank Ltd.
Economic Value Added (EVA) Statement
for the year ended 31 December 2013
EVA indicates the true economic profit of a Company. EVA is an estimation of the amount by which earnings
exceed or fall short of required minimum return for shareholders at comparable risk. Shareholders are always
conscious about their return on the capital invested. As a commercial banking company, SIBL is deeply concern for
distribution of value to all of its Shareholders. EVA of SIBL has stood at Tk 95.08 crore as of December 31, 2013 as
against Tk 93.00 Crore in 2012.
Fig in Crore Taka
Particulars
Year-2013
Year-2012
1520.95
1305.68
-1228.50
-943.90
Operating profit
292.45
361.78
Less: Corporate Tax
-80.30
-130.15
Net operating profit after tax
212.15
231.63
1108.34
1018.20
277.34
193.97
SubTotal
1385.68
1212.17
Average Shareholders’ Equity
1063.27
979.71
Return of Equity
11.01%
14.15%
Capital Charges
117.07
138.63
95.08
93.00
Total Revenue from Banking Services
Less: Total expenses related to revenue
Shareholders’ Equity
Add: Accumulated provision for investment (Inclg. Off B/S items)
Economic Value Added
100
95.08
93.00
80
60
40
20
0
Year 2013
Year 2012
Economic Value Addition (Crore Taka)
48
a n n u a l
re p o r t
2 0 13
Market Value Added (MVA) Statement
for the year ended 31 December 2013
Market Value Added (MVA) is the difference between the equity market value of a company and the book value
of equity invested in the company. A high MVA indicates that the company has created substantial wealth for the
shareholders. MVA is equivalent to the present value of all future expected economic value (EVA). The equity market
value of the bank stood at Tk 935.18 crore whereas the book value of the equity stood at Tk 601.03 crore resulting
a MVA of 232.04 crore as of December 31, 2013 as against Tk. 601.03 crore in 2012.
Fig in Crore Taka
Particulars
Year-2013
Year-2012
Market Value of Total Equity
935.18
1240.42
Book Value of Total equity.
-703.14
-639.39
232.04
601.03
703,141,564
639,392,575
Book Value per share
10.00
10.00
Market value per share
13.30
19.40
Market Value Addition
Total number of Share outstanding
800
700
601.03
600
500
400
300
232.04
200
100
0
Year 2013
Year 2012
Market Value Addition (Crore Taka)
49
Social Islami Bank Ltd.
Chairman’s Foreword
Distinguished Shareholders, Ladies & Gentlemen
Assalamu-Alaikum
It is my immense pleasure to take the opportunity on
behalf of the Board of Directors of Social Islami Bank
Limited to present your bank’s achievements and
progress of 2013 and cordially welcome you all to
this great occasion –the 19th Annual General Meeting
(AGM). I pay debt of sincere gratitude to our respected
shareholders, clients, regulators and well-wishers for
their relentless support and confidence they have
reposed on us. I am also delighted to place before you
the Annual Report and the Auditors’ Report for the year
ended on 31 December 2013.
50
As a second generation Shariah-based bank, the
Social Islami Bank Limited was incorporated in the year
1995 under the profound leadership of the renowned
economist--Professor Dr. M.A. Mannan--the founder
chairman of the Bank in close cooperation and
assistance from a group of Bangladeshi expatriates,
local entrepreneurs, and foreign dignitaries of the Islamic
World.
The broad objective of SIBL is somewhat different from
other Islamic and contemporary banks. The operation
a n n u a l
re p o r t
2 0 13
of SIBL has been defined under a unique theme
of three-sector banking model: (I) Formal Sector,
commensurates with Islamic Commercial Banking
using modern technology; (II) Non-Formal Sector,
based on a concept of empowering family through
Micro Credit & Micro Enterprise Program; and (III)
Voluntary Sector, inviting Social Capital Mobilization
through Cash WAQF and others, with a firm
conviction to work together for a caring society. Our
vision is to minimize the poverty level in Bangladesh.
In this regard, the inherent concept and credence
of “Working Together for a Caring Society” is always
held high. To carry forward this commitment, the
personnel of SIBL are imbued with the highest degree
of enthusiasm, zeal and vigor to serve the society at
large.
during the year. The Investment Deposit Ratio (ID
Ratio) at the end of the year 2013 was 86.78% as
against 89.43% in 2012. The ratio of non-performing
loans stood at 5.35 percent, though appears slightly
higher compared to earlier years yet low compared to
industry average after meeting the prevailing stringent
classification rules. Ten new branches have been
commissioned and state-of-the-art IT services was
introduced to offer better banking services to the
existing and prospective clients.
As you will note from the Directors’ Report, before
saying a few words on this great occasion, I want
to recall the SIBL’s very special and unique productCASH WAQF which has attracted much the different
banks and Financial Institutions in the country and
abroad and has received both Local & International
accreditation because of the uniqueness of its
features. The main feature of the CASH WAQF
Deposit is that it creates philanthropic practices on
the hand of depositors and maintains a permanent
nature of deposit on the hand of a bank. Social Islami
Bank Limited is the pioneering ever in the world to
invent this unique product and the concept of this
scheme has been well received by the public in
general. Meanwhile, the Cash Waqf Program has
been replicated by some local commercial banks. By
opening a Cash Waqf Deposit Account, someone
can get an opportunity to do welfare to the mankind
through Sadaka-e-Jariah. SIBL urges all religious &
affluent persons of the society to come forward to
mobilize Cash Waqf Deposit so that the profit may be
utilized for the well being of mankind perpetually.
Capital
Dear Shareholders,
Despite of business calamity your bank is finally
able to declare 12% dividend for the year 2013 as
against 15% in 2012 which can be mainly attributed
for the strong fundamentals of the bank. At the
end of the year bank’s Deposit & Advance stood
at Tk 102,104.48 million and Tk 85,922.33 million
respectively and the ratio clearly supports the claim
of unfavorable investment climate that prevailed
Return on Equity (ROE) stood at 11.01 percent and
the Earning per Share (EPS) was Tk 1.74 as against
14.15% and Taka 2.05 respectively in the 2012 which
may be considered reasonable as against the industry
average.
We have successfully maintained our Capital
Adequacy Ratio throughout the year 2013 and at the
end of 2013, CAR stood at 11.69% (consolidated)
as against 11.55% in 2012 where the required CAR
was 10% under BASEL-II capital accord. To face the
challenges of BASEL-III, we are ready to maintain
buffer capital considering more risks. Stress Testing
exercises of the bank re¬affirms its position assuming
acute to most distressing circumstances. The process
also included continuous persuasion of the business
houses on the importance of Corporate Rating for a
mutual win-win situation. The Bank’s Stress-results of
last 4 (four) quarters of 2013 indicate that the bank is
shock absorbent under minor and moderate shock
levels. The Stress test-results after a minor shock at
the end of the 4th Quarter of 2013, the CAR stood at
10.18 % against 10.03% in 2012. Overall, the Bank
has put an all-out effort to maintain and develop its
major financial indicators.
Risk Management
To ensure sustainable and consistent growth, SIBL
has developed sound risk management policies and
framework as per Bangladesh Bank guidelines. All
the risk management policies and frameworks were
reviewed by the Board of Directors of SIBL during the
year 2013. A Risk Management Committee (RMC)
was formed consisting of 5 (five) members of the
Board of Directors in 2013. Main objectives of the
RMC to ensure proper and timely risk management in
51
Social Islami Bank Ltd.
every sphere of the bank. The Board has been made
responsible for Identifying the risks and formulation
of appropriate strategies to control inherent banking
risks. The Committee submits decisions and
recommendations to the Board on quarterly basis
for further reviews and guidance in the interest of the
stakeholders. To streamline the risk management
system of the bank, a separate division called “Risk
Management Division” has been formed where a
Deputy Managing Director is working as Chief Risk
Officer (CRO). The Division is staffed with some
brilliant and young professionals for consolidated risk
management. Besides that, a Management level Risk
Management Committee is actively working to focus
the entire risk management system of the bank.
Green Banking
The concept of Green Banking has been emerged
from global warming issue. Social Islami Bank Ltd.
has declared to prefer eco-friendly business and
energy efficient industries at the time of selecting
Investment clients. Adoption of Green Banking
Policy by the bank has been reducing paper-work
to a great extent. More and more Green-Banking
activities during the year 2013 have successfully
been recorded. The Bangladesh Bank has honored
SIBL and ranked it under the “top ten banks in
Bangladesh” In 2012.
Corporate Governance
Social Islami Bank Limited has given highest priority
to develop and ensure corporate governance. SIBL
strictly adheres to the compliance requirements of
Bangladesh Bank relating to the Directors. Duties
and responsibilities along with code of conducts
of the Chairman, Directors, Managing Director,
Company Secretary, Chief Financial Officer, Board
and Head of Internal Control & Compliance of Social
Islami Bank Limited are specifically defined by the
Board of Directors of SIBL and all such personnel
have singed under their own hand to abide by
their code of conduct. SIBL has separate code
of conduct for its employee and as you will note
from the Director’ Report, also the compliant of the
code of conduct set by the Bangladesh Securities
& Exchange Commission. During the year under
report, SIBL closely observed all compliance issues
including Shariah and ensured timely all regulatory
compliances.
52
Branding&Teamspirit
A division called “Branding & Communication
Division” has been formed headed by a Deputy
Managing Director which is mainly engaged in image
building activities using all modern concepts & tools
so that the messages of our bank easily reach to the
grassroots level of the nation and abroad. To support
the total activities and efforts of the bank, this division
is always planning and generating ideas which have
really made us confident in our day to day working
schedule. The bank formally declared its Branding
& Communication policy in 2010 and since then
many ideas have been implemented that stimulate us
towards building of team spirit with new and visionary
zeal. The activities of SIBL Branding have brought
many procedural changes in a developed way which
is clearly visible. Now, SIBL is undoubtedly gaining
momentum in its day to day activities to implement
the slogan “Journey towards continuous excellence”
by strengthening the Bank’s financial capability to an
international standard, increasing the brand image,
and by practicing high degree of planned corporate
good governance.
Corporate Social Responsibility
I am also pleased to inform you that operations of
2013 were meaningful and memorable for many
reasons. This year, Corporate Social Responsibility
(CSR) activities of the Bank expended Taka 5.32
crore against Taka 4.88 crore in 2012 under Health,
Education, Sports, Disaster Management and
Environmental programs—mostly belonging to social
utilities and reaffirm our commitment to help many
sectors. Operating Expenses, Profit of Cash Waqf
Fund, Compensation Fund, Doubtful Income and
Zakat Fund are the main source of CSR activities of
the bank.
Human Resources & Development
To provide developed and quick services to
customers with full satisfaction is a very challenging
job in the competitive banking era. Keeping
this challenge in view, we have focused on the
development of human resources and best HR
practices in our Bank. To this end, recruitment of fresh
blood and retention of competent personnel are our
number ONE priority. SIBL always tries to sort out
all possible ways it deems beneficial to promote its
a n n u a l
employees’ professional skill and efficiency. It has its
own Training Institute, which rendered useful training
to 974 employees last year. And 386 employees from
the Bank obtained training from outside including
BIBM in 2013 compared to 226 in 2012. The Training
Institute of SIBL conducted 9 (nine) foundation
training courses for total 296 nos. of fresh Officers
and 25 workshops on different burning issues related
to banking industries where 678 nos. different Officers
and executives had participated.
We recognize our personnel by awarding most
competitive pay scale and incentives including
different types of long term benefits like Provident
Fund, Gratuity, Social Insurance, Leave Encashment
etc. Depending on the market and growth of the
Bank, we review the pay structure on a regular interval
basis. Performance of the employee is determined
on the basis of annual employee rating (Annual
Confidential Report—ACR) system along with meeting
key performance indicators. Deserving employees are
rewarded under a performance-linked award system
with accelerated promotion.
Products & Services
SIBL is looking forward to expand its area of
operation from urban to rural by introducing new
customized products and services that are tailored
to different economic class of people of the society
in order to bring the un-banked people into banking
channels. During the year 2013, many Products
and Services were invented by the bank. Enormous
emphasis were given to create a technology based
banking environment realizing the facts that spending
on widespread technology would be an investment
to support our growth and accordingly your bank has
been relentlessly pushing to popularize technology
driven products and services.
re p o r t
2 0 13
Challenge 2014
We have taken the year 2014 as a challenge with
the promise to increase the stakeholders’ value and
be valued as a compliant organization. Adopting
new strategic business policy, your bank will leave
no stone unturned to boost business in all areas
of operation to achieve its corporate goal. SIBL
emphasises on employment generation, environment
friendly green banking for equitable distribution of
resources over geographical territory for sustainable
growth of macro economy of the country. The proactive management team of SIBL with their talent and
skill have been working continuously success in the
performance of the bank.
In conclusion, I would like to thank you all for your
kind presence in the 19th Annual General meeting
of the Bank. I would further recall and express my
deep sense of gratitude on behalf of the Board to
Bangladesh Bank, Well-wishers, Shareholders and
Stakeholders, Bangladesh Securities and Exchange
Commission and other regulators for their sincere
support, cooperation and guidance in quest for
excellence. I also place on record my appreciation to
the efforts made by the management of SIBL for their
hard work and deep-rooted commitment towards
achieving our cherished goals.
Ma-Assalam
Major (Retd) Dr. Md. Rezaul Haque
Chairman
53
Social Islami Bank Ltd.
From the Desk of Managing Director
Bismillahir Rahmanir Rahim.
Distinguished Shareholders, respected Members of the
Board and my beloved Members of Team SIBL.
Assalamu alaikum wa rahmatullahi wa barakatuhu.
I express my humble gratitude to Allah Subhanawata’la,
the Most Gracious and the Most Merciful for helping us
to end a challenging year with stable performance. My
heartfelt gratitude is also to our honorable shareholders,
valued clients, distinguished patrons and well-wishers
whose cooperation and support have always been
proved to be the strength in our journey towards
continuous excellence. I am also sincerely indebted to
all the respected Members of the Board of Directors and
my fellow colleagues for their invaluable support and
contribution towards business growth of the Bank.
For many reasons the year 2013 was quite eventful
at home and abroad. Nevertheless, Social Islami
Bank Limited (SIBL) maintained and achieved a stable
position in all key areas of operations despite manifold
54
challenges. Capital of the Bank was Tk.12.60 crore at
the very inception, and by the year 2013 it increased
to Tk 1,162.35 crore. Deposits of the Bank stood
at Tk. 10,210.45 crore and total assets stood at Tk.
12,661.66 crore as on 31st December, 2013. The total
investment portfolio of the Bank was Tk. 8,592.23 crore
in 2013. The classified investment was 5.35% of total
investment. The Bank registered an operating profit of
Tk.292.46 crore in the year 2013.
In our journey towards continuous excellence we are
relentlessly striving to become Bangladesh’s leading
Islamic Bank. Our everyday attempt is to conduct
our business ethically complying the laws of Islami
Shariah. By utilizing the most modern state-ofthe-art technological solutions, creating pro-active
organizational culture based on sound team spirit,
fairness, mutual understanding and pragmatic leadership
and adapting to the best practices, we always try to
provide our customers with quality banking experience
and deliver the best value to all our stakeholders.
a n n u a l
SIBL is always committed to the grooming of economic
and financial growth that would ultimately lead the
country to build a caring society. That is why the very
birth of this Bank was with the noble aim of “working
together for a caring society”. From the very beginning
SIBL has been operating with the objectives to
implement and materialize the economic and financial
principles of Islam in banking focusing on alleviating
poverty through micro investment with due emphasis
on non-funded business, SME Investment, Export
Finance, Women Entrepreneur & Agro Investment as
a part of its financial inclusion. In case of investment
SIBL emphasizes on the projects which generate
employment and environment friendly banking for
equitable distribution of resources over geographical
territory for sustainable growth of macro economy of the
country. Investment comprises a very large portion of
a bank’s total activities and major revenue is generated
from it. Therefore, SIBL is very much proactive in
managing its investment portfolios in order to minimize
possible losses and earn an acceptable level of return
for the shareholders. Investment strategy of SIBL mostly
focuses on non-funded business rather than funded
business. Because, this generates a significant income
without channeling any fund.
Green banking is an integrated idea in spirit of
environment friendly banking. SIBL has already
formulated Environment Risk Management (ERM)
Guidelines, Green Banking Policy, Green Office Guide
and Green Banking Unit at Head Office to protect its
finance from the risk arising out of the deteriorating
environmental scenario and to take all necessary
measures to comply with ERM and Green Banking
Guideline of Bangladesh Bank. SIBL always facilitates
agro-based industries for socio-economic development
of the country and play a vital role in employment
generation and financial inclusion. The Bank’s
continuous effort has been to increase the shareholders’
value and to be valued as a compliant organization.
Under the proactive guidance, policy and direction of
the Board of Directors, SIBL’s Management conducts
its business operations. The Corporate Governance
systems in SIBL ensure transparency and accountability
at all levels in conducting business.
SIBL also has a Shariah Supervisory Committee
consisting of prominent Islamic Scholars, Economists
and Lawyers to advise the Managementof the Bank
on Shariah matters relating to the business operations.
Branches are being regularly audited by the Shariah
Inspection teams. Necessary guidance with required
rules and procedures based on Islami Shariah
re p o r t
2 0 13
principles are being adopted as per Bangladesh Bank
guidelines and advice of the Bank’s Shariah Supervisory
Committee.
The Board of Directors provides leadership and direction
to the Management to attain goals and objectives of
the Bank. The performance of the Bank so far achieved
is due to the divine blessings of Allah Subhanawata’la
and constant guidance, cooperation and support
of the Board & Shariah Supervisory Committee as
well as committed, dedicated and hard work of the
Management Team and Team SIBL.
SIBL is quite conscious of its social business
responsibilities and is always trying to participate in
various social programs in the country under its CSR
portfolio by giving special emphasis on health, habitat &
education. The Bank is continuously expanding its CSR
activities. In the year 2013 SIBL has contributed a sum
of total Tk. 5.31 crore which was Tk. 4.88 crore in the
year 2012. SIBL strongly believes that any kind of social
& philanthropic activities would improve the quality of the
lives of the poor masses of the country.
To conclude I want to recall the immortal lines written by
Robert Frost:
“The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.”
The journey towards continuous excellence is always
challenging for both an individual and an organization.
To keep the “promises” and fulfill the dreams we have
“miles to go”, but the path is sometimes “lovely” and
most of the times “dark and deep”. In sha Allah, with
the valuable support of our honourable shareholders
& other stakeholders, proper & kind guidance of
the Board of Directors, dynamic leadership of the
Management and hardwork of the Team SIBL, we will
be able to provide our customers with modern & quality
banking experience and deliver the best value to our
shareholders & different stakeholders.
Aameen.
Ma-Assalam
______________________
Md. Shafiqur Rahman
Managing Director
55
Social Islami Bank Ltd.
Management Report & Analysis
Vision
InformationTechnology
Customer Service
Green Banking
Vision of this Bank is to minimize the poverty level in
Bangladesh. In this regard, the inherent concept and
credence of “Working Together for a Caring Society” is
always held high. To carry forward this commitment, the
personnel of SIBL are imbued with the highest degree of
enthusiasm, zeal and vigor to serve the society at large.
The Bank has focused on dignified, prompt and
personalized services as promise to render that to
the customers. SIBL believes in developing strong
interpersonal relationship. As such, the bank is morally
bound to provide high quality banking services supported
by the latest technology to obtain optimum return on
shareholder’s equity ensuring safety of depositor’s
money and making all out efforts to introduce innovative
Islamic Banking products to the existing and prospective
customers. SIBL is really happy that the bank could
give enough emphasis on empowering poor families
by creating income opportunity and providing financial
support to make them self-reliant. The Bank considers
that services to be of utmost importance to improve the
fate of deserving people in our society. Now, SIBL has
been able to extend more comfortable services to the
valued clients such as: any branch banking, 24/7 services
ATM services, VISA Debit and Credit Card, SMS Banking,
Internet Banking, Mobile Banking, Electronic Fund Transfer,
Central Clearing facilities, and the like. These services have
surely added new dimensions and have offered new and
advanced means of banking to the clients.
SIBL is looking forward to expand its area of operation
from urban to rural by introducing new customized
products and services that are tailored to different
economic class of people of the society in order to bring
the un-banked people into banking channels.
Branding
SIBL is undoubtedly gaining momentum in its day to
day activities to implement the slogan “Journey towards
continuous excellence” by strengthening the Bank’s
financial capability to an international standard, increasing
the brand image, and by practicing high degree of planned
corporate good governance. Change of “Logo” of the
Bank has brought new team spirit among the members of
the SIBL family and the year was declared as a “Journey
towards continuous excellence.” Ten new branches have
been commissioned and state-of-the-art IT services was
introduced to offer better banking services to the existing
and prospective clients.
56
The bank given due emphasis on the continuous
development of Information Technology (IT). In this regard,
some young and experienced professionals are working
to explore the ideas of the cutting-edge technology, new
IT products and services so that our IT-based banking
service can reach to the “banked and un-banked” people
around the country.
The bank has specially focused on green banking to
safeguard the mother planet. The concept of Green
Banking has been adopted by reducing paper-work to a
great extent. More and more Green-Banking activities have
successfully been done in 2013. The Bangladesh Bank
has honored SIBL and ranked it under the “top ten banks
in Bangladesh” in 2012.
Human Resources Development
The Bank has regularly arranged in-house and outside
training programs for the professional development (PD)
of the employees so that they can acquire the current,
advanced level banking knowledge and face the challenges
of the modern banking. During the year under review, a
total 386 nos. of employees of the Bank have been trained
from BIBM—the most prestigious Institute of the country.
The role of our Human Resource Department (HRD) is
praiseworthy and it is truly the core strength of the Bank.
SIBL always recognizes its personnel by awarding most
competitive pay scale and incentives including different
types of long term benefits. Depending on the market and
growth of the Bank, the bank reviews the pay structure on
a regular interval basis. Performance of the employee is
determined on the basis of annual employee rating (Annual
Confidential Report—ACR) system along with meeting key
performance indicators. Deserving employees are rewarded
under a performance-linked award system with accelerated
promotion.
Compliance
Management of the Bank very closely observes the issues
related to regulatory compliances including Islamic Shariah.
To guide the Shariah matters of the Bank, there is a Shariah
Supervisory Committee (SSC). The SSC-members are
highly qualified and competent people in Islamic Laws,
Islamic Economics, Islamic Banking and Finance. Shariah
Supervisory Committee is active and vigilant over the day
to day activities of the Bank being conducted strictly in line
with the Islamic Principles. SIBL is committed to be one of
the most leading bank with the development and practices
of compliance culture in every sphere of the bank to march
towards achievement of the desired objectives of targeting
poverty alleviation and overall socio economic development
of vast poor families of the country.
a n n u a l
Capital Management
During the year under review, management of the Bank
was even more cautious in proper risk management of the
Bank. The bank has successfully maintained the Capital
Adequacy Ratio (CAR) of 11.69% (consolidated) as against
the required CAR of 10% under BASEL-II capital accord.
To face the challenges of BASEL-III, the bank is getting
prepared. In this regard, many procedural changes have
already taken place.
Assets Liability Management
Activities of the Assets Liability Management of the
Bank are mostly visible in proper liquidity planning and
in matching of assets-liability gap despite the existence
of volatile money market. To mitigate the investment
risks, the bank has adopted some massive changes in
the investment processing, sanctioning, approval and
monitoring system as per core risk guidelines of the
Bangladesh Bank. Some well known corporate business
houses and individuals of the country have joined with us
as our business partners.
Corporate Social Responsibility
This year, Corporate Social Responsibility (CSR)
activities of the Bank expended Taka 53.17 million under
Health, Education, Sports, Disaster Management and
Environmental programs as against Taka 48.8 million in
2012 to reaffirm the commitments of the Bank towards
society.
12
10
10.68
9.19
8
9.21
7.1
Performance
In the year under review, Social Islami Bank Limited gained
(19.17%) growth in operating profit before Tax of Taka
2,024.66 million compared to Taka 2,747.89 million in
2012. Though achievements against target for the year
2013 were not optimum, management of the bank feels
that the actual results of the business segments (Deposits92.74%, Investment-95.47%, Foreign Exchange Business
77.87%, Operating Profit 70.46%) against target, have
a positive turn towards the journey of excellence leaving
a positive upward growth curve. GP Ratio (Gross Profit
Ratio) of 2013 was 40.37% compared to 48.72% in 2012.
In the year under review, country’s money market was
volatile and due to volatile liquidity situation of the market,
deposit rates were on high side whereas comparatively
investment yields were low. Return on equity was 11.01%
in 2013 against 14.15% % in 2012. Current ratio for the
year 2013 was 0.75 times which has been steady since
long. The bank was more levered in 2013 (Debt equity
ratio 9.21) compared to 2012 (9.19 times).Cost of Deposit
was 9.04% in 2013 compared to 9.12% in 2012, Return
on average assets was 1.67% in 2013 against 2.75% in
2012. At the end of year 2013, EPS and PE Ratio was
Taka 1.74 and 7.66 times respectively compared to Taka
2.25 and 8.61 times in 2012.
67.76%
60
55.78%
50
49.65%
2012
2013
10
2009
2010
2011
2012
2013
0
2009
1.07
1.0
1.02
0.97
2011
3000
1.04
2747.89
2500
0.75
0.8
2010
Gross Profit ratio (%)
Debt Equity ratio (Times)
1000
0.4
2024.66
1901.28
2000
1500
0.6
1136.69
726.88
500
0.2
0.0
48.72%
20
2
1.2
59.90%
30
4
0
Due emphasis was given on SME and Agricultural Financing
that stood at Taka 7164.3 million in 2013 as compared to
Taka 6868.8 million in 2012 which is 4.03% growth.
40
6
2 0 13
SME & Agricultural Investment
70
8.88
re p o r t
2009
2010
2011
2012
Current ratio (Times)
2013
0
2009
2010
2011
2012
2013
Profit Before Tax (Taka in Million)
57
Social Islami Bank Ltd.
20
2.0
15.31
15
12.14
11.51
14.15
11.01
1.5
10
1.0
5
0.5
0
2009
2010
2011
2012
2013
0.0
1.46
1.54
1.61
2009
2010
2011
Return on Equity (%)
12
15
14
15
11
12
10.5
9
15
6
10
0
2009
2010
2011
2012
Dividend Payout (%)
12000
9412.21
10000
10182
2013
11083.4
4000
2013
16.75
14.51
8.61
7.66
2009
2010
2011
2012
2013
PE Ratio (Times)
0.5
0.4
8000
6000
2012
Dividend Cover Ratio
5
3
0
1.45
24.53
25
20
1.5
0.47
0.38
0.38
2009
2010
0.33
0.37
0.3
3555.75
4198.77
0.2
0.1
2000
0
2009
2010
2011
2012
2013
Net Asset
0.0
2011
2012
2013
Cost-Income Ratio
Liquidity Position Analysis
During the year under review, SIBL had a net cash inflow of Taka (2680.05) million as stated in the Cash Flow
Statements as on 31st December 2013 which may be noted as under:
Fig in million Taka
Particulars
Year 2013
Year 2012
Net Cash flow from Operating activities
(1798.39)
6585.24
Net Cash flow from Investing activities
(562.92)
(257.48)
Net Cash flow from Financing activities
(318.74)
328.64
(2680.05)
6656.40
Opening Cash & Cash Equivalents
23,717.71
17,061.31
Closing Cash & Cash Equivalents
21,037.65
23,717.71
Net Increase / decrease in Cash & Cash equivalents
58
a n n u a l
The major components of net cash flows from operating
activities are operating profit by eliminating the effect of
depreciation and provisions. Net cash flow was negative
due to increase in General Investment clients. Due to
acquisition of fixed assets and buying was greater than the
selling of Shares or Securities, the net cash flow under this
head is negative. Besides that, due to payment of 10%
cash dividend for the year 2012, the Net cash flow from
financing activities was negative. However, cash balances
along with Bangladesh Bank and Agent bank balance
supported the cash position effectively.
re p o r t
2 0 13
We have analyzed the cash flows statements of the
bank for the year ended 31st December 2013 in
comparison with the liquidity statements to test the
liquidity position. The liquidity statements of the bank
show that the bank has been maintaining an effective
maturity profile of its total assets and liabilities in short
term and long term in a structured way. We found
positive gap in the liquidity profile for 1 month, 1-3
months, 3-12 months, 1-5 years and more than 5 years.
The liquidity gap maintaining by the bank is satisfactory.
Outlook 2014
From the beginning of the year 2014, due to unrest
in national politics, capital market and above all the
baking scandal overall economic condition of the
country looks unstable. 1st quarter operational results
of the banking sector are not up-to the mark. Despite
such limitation, financial sectors still expect to record
a steady growth. Operating profit of the 1st quarter of
Social Islami Bank Limited has been recorded at Taka
72.18 crore and expected to keep growing steadily. To
make the year 2014 another success, SIBL is ready to
accept the challenges of 2014 with new visionary zeal
to achieve the common objectives of the bank and
hence the year 2014 will definitely be a challenge for
every individual of SIBL. Considering the stands and
commitments towards stakeholders, SIBL has prepared
financial budget for the year 2014 which is realistic and
challenging. The Business Target for the year 2014 is
featured by setting of (i) Client Deposit Tk. 15,000 crore
(ii) Investment Taka 12,000 crore (iii) Foreign Exchange
Business Taka 23,000 crore & (iv) Operating Profit Taka
550 crore. To achieve success in the year, SIBL has
undertaken the following short term strategies side by
side with mid term and long term strategies:
• Topresentinnovativeandnewdeposit&investment
products to the customers.
Some factors may cause actual results to differ and
some may significantly deviate from the outlook
2014. Some of the factors that may affect the
business environment are given below:
*
*
*
*
*
*
*
• ToincreasATMfacilities.
*
*
*
*
• Openingofnewbranchesinimportanturban/rural
areas of Bangladesh.
*
• Tostrengthentheautomationproceduresofthebank.
• IncreasingnewADBranches.
• EnhancingtheCSRactivitiesinlinewiththebank’s
CSR policy.
*
• Specialrecoverydrive.
*
Changes in the general economic condition
resulting from natural calamities and political
disturbances.
Changes in government policy issues.
Increase in corporate tax rate.
Increase in CRR and SLR of the banks.
Withdrawal of incentive given to some thrust
sectors which may make the projects slow moving.
Directives to reduce the lending rates to finance
essential items.
Increase in provisioning requirement may reduce
the ROA and ROE.
Reducing the margin ratio for investment accounts.
Volatility in interest rate.
Volatility in capital market arising from speculations.
Compliance issues raised by the international
forums which are likely to affect the export growth.
Rise in international prices of essentials which may
lead to volatility in Foreign Exchange Market.
International embargo/unrest may affect
remittances and trade.
Adverse media reporting.
• Specialprogramsforbusinesslike‘Seba-Mash’.
• ToexplorethebusinessopportunitiesinSME
investments.
Md. Shafiqur Rahman
Managing Director
59
Social Islami Bank Ltd.
Report on Internal Control System
The Board of Directors of Social Islami Bank Limited
is very keen to establish and maintain a sound and
effective Internal Control System and good governance
in every sphere of the bank and accordingly have
established broad business strategies, adopted
significant policies for internal control and risk
management and implemented risk based internal
audits as per section 15 kha of Bank Company
(amended) Act 2013 for ensuring that the Bank is
appropriately and effectively managed and controlled.
During the period under review, the Board has reviewed
the policies and procedures in various aspects of
businesses in order to establish an effective internal
control system, which the Board thinks, adequate and
appropriate for achieving sustainable growth.
The Board of Directors monitors the adequacy and
effectiveness of Internal Control systems through the
establishment of Audit Committee and the Committee
has regularly reviewed and assessed the arrangement
adequacy made by management and corrective
measures taken by management relating to fraudforgery and deficiencies in internal controls. Internal
Control & Compliance Division (ICCD) of the bank
continuously inspects the operational aspect of the bank
and report deviations and all such findings along with
compliance status were placed by the Management
before the Board of Directors and regulators on a timely
basis and has performed all other functions relating to
Internal Control Systems of the Bank.
The Board of Directors has reviewed the control
procedures for ensuring – (i) safeguarding of the Bank’s
60
asset (ii) prevention and detection of fraud and error (iii)
adequacy and completeness of accounting records (iv)
timely preparation of financial information and (v) the
efficient management of core risk.
The Audit Committee has ensured that all the conditions
of the Bank Company Act, Bangladesh Bank guidelines,
Corporate Governance guidelines by Bangladesh
Securities and Exchange Commission have been
properly addressed. Internal control system, managing
of core risks and Bank’s process for monitoring
compliance with laws and regulations and codes of
business conduct were adequate.
The Board of Directors of the Bank declares that they
have actively and diligently discharged their duties and
responsibilities to establish a sound internal control
system and to ensure good corporate governance.
On behalf of the Board of Directors
Major (Retd) Dr. Md. Rezaul Hoque
Chairman
a n n u a l
re p o r t
2 0 13
Report of the Board of Directors
Act good and do good to serve better
being the motto, SIBL and those in the
operation always strive for their best
with the rules of Shariah to achieve as
much security and benefit for esteemed.
Customers.
61
Social Islami Bank Ltd.
Dear respected Shareholders,
It is my great pleasure to welcome you all on behalf of the
Board of Directors to the 19th Annual General Meeting
of Social Islami Bank Limited and to present before you
the Directors’ Report along with the audited financial
statements as on 31st December 2013 for your kind
consideration. I put on record my thanks and gratitude to
you for your presence on this big shareholders’ day. It is
worthwhile to place before you the financial position of the
bank on the backdrop of global economic scenario- the
changes that have taken place around the world and how
Bangladesh experienced the same and various functional
and administrative aspects during the year 2013 including
Bangladesh economy.
Global Economic Outlook
World Economic Outlook of IMF Update (WEO Update
October 2013) anticipated that average growth rate
of world Economy 2.9 percent will be lower than the
July 2013 WEO Update projections of 3.1 percent. The
WEO forecast was revised Downward mainly because
of slower growth in China and in a growing number
of emerging Market economies. Weaker growth may
include tightening capacity constraints, stabilizing or falling
commodity prices, less policy support, and slowing credit.
The forecast for growth rate for China is reduced to 7.6
percent in 2013 which will affect commodity exporters
among the emerging market and developing economies.
Growth rate of the United States is projected to decline
from 2.8 percent in 2012 to 1.6 percent in 2013. However,
activity in the US is regaining pace, helped by a recovering
real estate sector, higher household wealth, easier bank
lending conditions, and more borrowing. In Japan, growth
is projected to at 2.0 percent in 2013, compared to 2012.
In the euro area, economic growth is expected to contract
by 0.4 percent in 2013.
In advanced economies, consumer prices are anticipated
to ease from 2.0 percent in 2012 to 1.4 percent in 2013.
In the United States, the CPI inflation is projected to
fall from 2.1 percent in 2012 to 1.4 percent in 2013.
Moreover, in the euro area, inflation is projected to fall from
2.5 percent in 2012 to1.5 percent in 2013. In emerging
and developing economies, inflation is projected to
increase slightly from 6.1 percent in 2012 to 6.2 percent in
2013. The growth rate of world trade volume is projected
to rise from 2.7 percent in 2012 to 2.9 percent in 2013
(WEO, October 2013).This is lower than the projection
of WEO Update, July 2013. The growth rates of exports
and imports for the advanced economies are expected
to increase to 2.7 and 1.5 percent in 2013 from 2.0 and
1.0 percent in 2012 respectively. However, the projected
growth rates of exports and imports for emerging market
62
and developing economies are expected to decline to 3.5
and 5.0 percent in 2013 from 4.2 and 5.5 percent in 2012
respectively.
According to the IMF Global Financial Stability Report
October 2013, financial stability risks are broadly
under control. Accommodative monetary policies and
precautionary policy measures have eased monetary and
financial conditions and reduced near-term stability risks.
Bangladesh Economy Review
Macroeconomic situation in Bangladesh has been quite
stable for a considerable period of time in recent years and
proved resilient to global financial crisis posting GDP growth
rate averaging 6.2 percent during the past five years. Using
the 1995-96 base year the Bangladesh economy achieved
GDP growth of 6.0 percent in FY13, and 6.2 percent using
the 2005-06 bases. Substantial remittance inflows and
export activities helped to achieve this solid economic
growth rate. Inflation decreased sharply to 6.8 percent
(using the new 2005-06 base) at the end of FY13 driven
by a gradual decline both in food and non-food inflation.
Broad money (M2) registered 16.7 percent growth in FY13
due mainly to growth in net foreign assets; however, broad
money growth was lower than the targeted growth of 17.7
percent and 17.4 percent actual growth in FY12. Total
domestic credit declined from 19.2 percent in FY12 to
10.9 percent in FY13. The growth rate of credit to private
sector declined from 19.7 percent in FY12 to 10.8 percent
in FY13. This decline, however, was compensated partly
by newly introduced overseas financing by Bangladeshi
corporates. Other than European Union and US, export
diversification to the newly discovered markets improved
earnings from exports to record a satisfactory growth of
10.7 percent in FY13 as against 6.2 percent in FY12. The
growth of imports decreased from 2.4 percent in FY12
to 0.8 percent in FY13 due mainly to major reduction in
imports of food grain, some consumer goods and capital
machinery. A lower trade deficit and higher growth of
workers’ remittances led the current account balance to a
significant surplus of USD 2525 million in FY13. The overall
balance also showed a huge surplus of USD 5128 million
in FY13 with substantial contributions from current account
balance, capital account and financial account.
Growth in agriculture sector declined from 3.1 percent
in FY12 to 2.2 percent in FY13. Growth in crops and
horticulture sub-sector slid to 0.2 percent in FY13 from
2.0 percent in FY12, though growth in animal farming and
forest and related services subsectors increased slightly
during the period. Fishing sub-sector grew above 5.0
percent in FY13 Industry sector grew slightly more at 9.0
percent in FY13 compared to 8.9 percent in FY12 driven
in large part by faster growth in mining and quarrying,
a n n u a l
construction and small scale industries. Mining and
quarrying sub-sectors grew strongly by 11.1 percent in
FY13 compared with 7.8 percent in FY12. Power, gas and
water supply subsector demonstrated a lower growth of
8.6 percent in FY13 compared with 12.0 percent in FY12.
Services sector growth decreased to 5.7 percent in FY13
from 6.0 percent in FY12 affected mainly by lower growth of
wholesale and retail trade sub-sector. Wholesale and retail
trade sub-sector, the major services sub-sector, declined
to 4.7 percent in FY13 from 5.6 percent in FY12 reflecting
weaker domestic demand. On the other hand, growth rates
of financial intermediation, public administration defense,
health and social works sub-sectors edged down during
the period. Education subsector grew strongly from 7.2
percent in FY12 to 9.7 percent in FY13.
Gross fixed investment increased slightly to 26.8 percent
of GDP in FY13 from 26.5 percent in FY12 due to
increasing growth of public investment. During the same
period, private investment decreased from 20.0 to 19.0
percent of GDP and public investment increased from 6.5
to 7.9 percent of GDP. National savings rates increased
slightly from 29.2 percent of GDP in FY12 to 29.5 percent
of GDP in FY13.
The average inflation rate, using the FY06 new base,
moderated to 6.8 percent at the end of FY13 from 8.7
percent at the end of FY12. Over this period, food and
non-food inflation both decreased from 7.7 to 5.2 percent
and from 10.2 to 9.2 percent respectively of FY12. The
decrease in average inflation during FY13 was driven
mainly by a gradual fall of food inflation until January 2013
Bangladesh Banking Sector Review
In FY13, Bangladesh Bank designed its monetary policy
stance based on assessment of global and domestic
macroeconomic conditions and outlook. BB continued
restrained policy stance in H1 of FY13 to curb inflation. In
H2 of FY13 repo and reverse repo rates were decreased
from 7.75 and 5.75 percent in FY12 to 7.25 and 5.25
percent respectively in FY13. Besides, Bangladesh Bank
continued to maintain the Cash Reserve Ratio (CRR) and
the Statutory Liquidity Ratio (SLR) for banks at 6.0 percent
and 19.0 percent respectively.
Broad money (M2) recorded lower growth of 16.7 percent
in FY13 against the targeted growth of 17.7 percent and
17.4 percent actual growth in FY12. The growth in broad
money was attributed mainly by the growth in net foreign
assets (NFA). The NFA of the banking system increased
by 50.3 percent in FY13 against targeted 21.0 percent
resulting from robust growth in remittance and low import
growth. The credit to public sector increased by 11.1
re p o r t
2 0 13
percent in FY13. The growth rate of the credit to private
sector declined significantly from 19.7 percent in FY12
to 10.8 percent in FY13. This decline was mainly due to
investment uncertainty ahead of national general election
and more stringent lending practices by the banks. As a
result, net domestic assets (NDA) recorded a lower growth
of 11.1 percent in FY13 as compared to targeted 17.1
percent growth and 19.3 percent growth in FY12.
The weighted average interest rate on bank advances
decreased to 13.7 percent at the end of June 2013 from
13.8 percent at the end of June 2012, while the deposit
rate increased to 8.5 percent from 8.2 percent over the
same period.
Excluding grants, the overall budget deficit to GDP
ratio increased from 4.1 percent in FY12 to 4.8 percent
in FY13. However, domestic financing of the deficit
decreased to 3.1 percent of GDP in FY13 from 3.3
percent of GDP in FY12. Revenue receipts in FY13 were
13.5 percent of GDP. Its growth was 21.8 percent in FY13
compared to 23.3 percent growth in FY12.
Public expenditure in FY13 was 18.3 percent of GDP. In
nominal terms it grew by 24.2 percent compared to 18.8
percent growth in FY12. Current expenditure in FY13 was
9.9 percent of GDP.
The exports earnings increased to USD 26566 million
from USD 23989 million and import payments increased
marginally to USD 33576 million from USD 33309 million
in FY13 over FY12. Trade deficit declined to USD 7010
million in FY13 from USD 9320 million in FY12.
The export earnings, expressed as a percent of GDP,
decreased from 20.7 percent in FY12 to 20.5 percent
in FY13. The growth rate of exports earnings increased
from 6.2 percent to 10.7 percent during this period.
While leather, jute goods, knitwear and woven garments
experienced a positive growth, some of the exports
items like fish, shrimps, raw jute, tea, home textile and
engineering products experienced a negative growth.
Import payments, as a percent of GDP, decreased from
28.7 in FY12 to 25.9 in FY13Imports grew at a rate of
0.8 percent in FY13 compared to the 2.4 percent growth
in FY12. This lower growth of import payments resulted
mainly from negative growth in imports of food grains,
edible oil, sugar, POL, fertilizer, and capital machinery.
However, imports of pulses, chemicals, textile & textile
articles thereof and iron, steel & other base metals
showed positive growth in FY13.
The rate of growth of workers’ remittance inflows
increased by 12.6 percent in FY13 playing an important
role in strengthening the current account balance.
63
Social Islami Bank Ltd.
In order to achieve BB’s monetary policy goal and to
avoid undue volatility in the foreign exchange market,
Bangladesh Bank remained vigilant by closely monitoring
the exchange rate movements, and buying and selling of
foreign exchanges. In FY13, Bangladesh Taka experienced
appreciation of 5.2 percent against US dollar mainly due to
strong growth in the flow of inward remittances, increase
in export earnings and sluggish import payments. BB
purchased USD 4539.0 million in order to mop up excess
liquidity in the local foreign exchange market. The nominal
exchange rate of Taka stood atTaka 77.77 per US dollar as
of end June 2013 compared to Taka 81.82 per US dollar
as of end June 2012.
Outstanding external debt of Bangladesh increased to
USD 23.3 billion as of end June 2013 from USD 22.1
billion as of end June 2012. However, the outstanding
debt to GDP ratio declined to 18.0 percent at the end of
June 2013 from 19.0 percent at end of June 2012.
Call money rates declined to 7.17 percent in June FY13
and retail interest rates spread fell to 5.13 percent reflected
easing of liquidity pressure in the banking system.
Reserve money (RM) has been used as an operating
target to modulate liquidity consistent with the overall
monetary projection. The weekly auctions of treasury bills
were used in influencing the level of RM, while repo and
reverse repo operations were applied for smoothing the
money market.
Outstanding bank credit (excluding foreign bills and
inter-bank items) during FY13 rose by Taka 365.58 billion
or 8.88 percent to Taka 4482.15 billion as against an
increase of 18.40 percent in FY12.
Bank deposits (excluding inter-bank items) increased by
Taka 828.69 billion or 16.91 percent to Taka 5728.91
billion during FY13 against 19.38 percent increase in
FY12. The rise in total bank deposits was shared by
increase in all deposits, though mainly by time deposits.
Time deposits increased by Taka 725.14 billion or 17.80
percent and stood at Taka 4799.02 billion in FY13 against
growth of 20.74 percent during FY12. Demand deposits
increased by Taka 46.77 billion or 9.16 percent in FY13 to
Taka 557.37 billion against 6.14 percent Increase in FY12.
Government deposits increased by Taka 56.78 billion or
17.98 percent to Taka 372.52 billion in FY13against 26.70
percent increase in FY12.
The credit/deposit ratio of the scheduled banks, excluding
the specialized banks was 78% at the end of June 2013
and was 84% at the end of June 2012. Declining credit to
deposit ratio points to declining investor appetite for credit
64
during an election year as well as tightening bank loan
processing standards.
Scheduled banks’ borrowings from the Bangladesh Bank
decreased by Taka 122.30 billion or 56.43 percent to
Taka 94.42 billion at the end of June 2013 against 21.52
percent increase during FY12. The fall in schedule banks’
borrowing from BB resulted from the ample liquidity in the
money market.
Balances of scheduled banks with the BB increased by
Taka 4.05 billion or 1.08 percent to Taka 377.41 billion
at the end of June 2013 against the decrease of 2.77
percent to Taka 373.37 billion at the end of June 2012.
Cash in tills of scheduled banks increased to Taka 78.19
billion as of end June 2013 against Taka 64.79 billion as of
end June 2012.
The bank rate remained unchanged at 5.0 percent in FY13.
This rate has been in effect since 6 November 2003.
At the end of June 2013, the total number of banks and
their branches increased to 55 and 8427 respectively due
to opening of new PCBs and bank branches during the
year in compared to 47 banks and 8322 of June 2012.
The amount of capital was Taka 205.8 billion as on 31
December 2008 and it stood at Taka 498.9 billion as
on 30 June 2013.The CAR for the banking industry
as a whole was 9.1 percent at end of June 2013 as
against 10.5 percent at the end of 2012. The CAR of the
banking industry has decreased. The main reason for this
deterioration is the implementation of BB’s new guidelines
(BRPD Circular No. 14/2012. and 19/2012) on loan
classification & provisioning which were recently revised
in line with international standards. As a result, the Risk
Weighted Assets (RWA) as well as the classified loans
of the banks have increased. According to the Basel-II
standard, the Basel Committee of Banking Supervision
(BCBS) prescribed the CAR to be maintained at 8
percent. In Bangladesh, BB implemented a minimum CAR
of 8.0 percent up to June 2010, 9.0 percent up to June
2011 and 10.0 percent from July 2011 onwards.
The gross NPLs ratios to total loans for the SCBs, PCBs,
FCBs and DFIs were recorded as 26.4, 6.6, 4.7 and 26.2
percent respectively at the end of June 2013 compared to
23.9, 4.6, 3.5 & 26.8 percent of 2012.
In FY13 out of 47 banks in Bangladesh, 7 PCBs operated
as full-fledged Islamic banks, and 16 conventional banks
(including 3 FCBs) were involved in Islamic banking
through Islamic banking branches. The Islamic banking
industry continued to show strong growth since its
a n n u a l
inception in 1983 to December 2012, in tandem with
the growth in the economy, as reflected by the increased
market share of the Islamic banking industry in terms
of assets, financing and deposits of the total banking
system. Total deposits of the Islamic banks and Islamic
banking branches of the conventional banks stood at
Taka 1017.9 billion at end December 2012. This was
re p o r t
2 0 13
18.9 percent of deposits of the total banking system
at the end of December 2012. Total credit of the
Islamic banks and the Islamic banking branches of the
conventional banks stood at Taka 910.1 billion at end
December 2012. This was 21.1 percent of the credit of
the total banking system of the country.
Islamic Banking around the world
The twentieth century has witnessed a major shift of
thinking in devising banking policy and framework on
the basis of Islamic Shariah. This new thought was
institutionalized at the end of the third quarter of the century
and emerged as a new system of banking called Islamic
banking. The establishment of the Islamic Development
Bank (IDB) in 1975 gave momentum to the Islamic Banking
movement. Since the establishment of IDB, a number
of Islamic Banking and financial institutions have been
established all over the world irrespective of Muslim and
non-Muslim countries. Over the past few decades, the
Islamic financial industry has rapidly expanded worldwide.
Currently about more than 300 Islamic financial institutions
(IFIs) have total combined assets exceeding $250 billion
in more than 57 countries. It is projected that this will be a
$trillion. The Islamic financial market is estimated to grow
at annual rates averaging 15% a year. Their rapid growth
has gained considerable attention in international financial
circles where various market participants have recognized
promising potentials. Kuala Lumpur and Bahrain are the
world’s leading Islamic capital markets while Dubai and
other players in the Middle-East are fast catching up. In the
UK, the first Islamic bank has already opened its doors and
Singapore has expressed its interest to be a leading Islamic
financial centre, while China and India has expressed
interest in Islamic banking.
The Islamic finance market has become extremely
sophisticated as well as increasingly competitive. Today,
virtually all large western financial institutions are involved
in Islamic finance whether through Islamic subsidiaries,
“Islamic windows”, or the marketing of Islamic products.
In recent years, a range of new Islamic products have
appeared, such as Islamic bonds (or sukuk) and Islamic
derivatives. While some of those products are widely
accepted, others are still controversial.
Islamic Banking and its Development
in Bangladesh
Genesis of Islamic Banking in Bangladesh
Bangladesh is the third largest Muslim country in the
world with around 160 million populations of which 90
percent are Muslim. The hope and aspiration of the
people to run banking system on the basis of Islamic
principle came into reality after the OIC recommendation
at its Foreign Ministers meeting in 1978 at Senegal
to develop a separate banking system of their own.
After 5 years of that declaration, in 1983, Bangladesh
established its first Islamic bank. At present, out of
56 banks in Bangladesh, 8 full fledged Islamic Banks
and 20 Islamic Banking branches of 10 conventional
banks are working in the private sector on the basis of
Islamic Shariah. Islamic banks in Bangladesh since their
inception have been gaining popularity in spite of some
problems in their operation. An important development
in Islamic banking in the last few years has been the
entry of some conventional banks in the market and
their use of Islamic modes of financing through their
Islamic branches, windows, or units. It necessitates
and encourages the mobilized ion of Islamic banking,
which includes some of the giants in the banking and
finance industry. Bangladesh was not indifferent to this
turning move. Presently, 10 conventional banks have
opened 20 Islamic banking branches alongside their
interest- based branches. These conventional banks
should focus on the safeguards that ensure the Islamic
nature of these branches such as separation and
compliance with Shariah. Separation of Islamic banking
branches includes separation of capital, accounts, staff
employed and office. However, the most important thing
is compliance with Shariah. There should be strong
Shariah supervisory boards in order to prepare the
model agreement, to approve the structure of every new
operation, and lay down the basic guidelines for each
and every mode of financing.
Formation of IBCF
For effective interaction, communication and
exchanges the ideas & views of Shariah banking
development and its practices in Bangladesh among
the Islamic banking and Islami Banking Branches of
the conventional Banks, a forum called “Islamic Bank
Consultative forum (IBCF)” was formed in 1995. IBCF
may be called first ever organizational development
in establishing Islamic Banking in Bangladesh where
the member banks discuss together the problems
65
Social Islami Bank Ltd.
and issues relating to the growth and development of
Islamic Banking in Bangladesh and common strategy
and policies are formulated for implementation through
this common Forum. The immediate goals of the IBCF
were to establish Central Shariah Board for all Islamic
Banks in Bangladesh, Islamic Money Market, Islamic
Insurance Company(s), innovation of new financial
products. Among them, Central Shariah Board is now
functioning successfully. Bangladesh Government Islamic
Investment Bond (BGIIB) and Islamic Money Market are
the development of IBCF and Bangladesh Bank which
are being enjoyed by almost all the Member-Banks. At
present, 6 (six) numbers of full fledged Islamic Banks like
(i) Islami Bank Bangladesh Limited (ii) EXIM Bank Limited
(iii) Shahjalal Islami Bank Limited (iv) Social Islami Bank
Limited (v) ICB Islamic Bank Limited and (vi) Al-Arafah
Islami Bank Limited and 4 (four) numbers of Conventional
banks having Islami Banking Branches like (i) Prime Bank
Limited (ii) Dhaka Bank Limited (iii) Southeast Bank Limited
and (ix) AB Bank Limited are the members of IBCF.
Formation of CSBIBB (Central Shariah Board
for Islami Banks of Bangladesh):
CSBIBB was formed in 2001 with the view to
observance of uniform policies and practices of Islamic
banking among the member banks. Currently 7 (seven)
full fledged Islamic Banks and 10 (ten) conventional
banks of Islamic banking Branches are the member
of CSBIB. CSBIBB is manly rest with the functions of
(i) collections, translations & publications of Journals
and References on Islamic Banking (ii) to arrange and
undertake research programs, Training, workshop,
seminar, symposiums (iii) gives award for contribution in
Islamic Banking.
Bangladesh Government Islamic
Investment Bond
In principal, the method of treasury functions and
its management of an Islami bank are quite different
from other conventional bank. To support the daily
treasury functions of Islami banks, Ministry of Finance,
Government of the People’s Republic of Bangladesh in
the year 2004 introduced a very special type of Shariah
based bond called “Bangladesh Government Islami
Investment Bond.” which is treated as a component of
Statutory Liquidity Ratio (SLR).
The operation of 6-month, 1-year and 2-year
Bangladesh Government Islamic Investment Bond
introduced in Financial Year 2005 in accordance
66
with the rules of Islamic Shariah where per unit bond
price has been determined Taka 1,00,0000/-(Taka
one lac). As per the rules, Bangladeshi institutions
and individuals, and non-resident Bangladeshi, who
agree to share profit or loss in accordance with Islamic
Shariah, may buy this bond. Social Islami Bank Limited
has been actively involved in buying this bond and as
on 31.12.2013 total outstanding buy amount (principal
amount) of this bond stood at Taka 5.50 billion. Reinvestment facility featured has been tagged with the
bond and any Bangladeshi Institutions and Individuals,
and non-resident Bangladeshi, who agrees to share
profit or loss in accordance with Islamic Shariah, can
accept borrowing from the fund.
Islami Banks’ Fund Market
TemporaryarrangementoffundsthroughMSD
(Mudaraba Savings Deposit) and MND (Mudaraba
Notice Deposit) accounts.
In order to day to day liquidity management, Islami
banks cannot take part in call money Market operation
and other activities like REPO and Reverse REPO
which are very common techniques widely used by the
conventional banks. Besides that, the Islamic Money
Market of Bangladesh is not well structured. To mitigate the
immediate/short liquidity crisis and management of surplus
funds overnight, Banks running under Shariah principles
have an arrangement between themselves to maintain MSD
(Mudaraba Savings Deposit) Accounts or MND (Mudaraba
Notice Deposit) Accounts for temporary transactions.
Excess funds are placed to others banks and shortage
of funds are replenished by calling other Islamic Banks or
Islamic Banking Branches to deposit in these accounts. This
technique is very popular among the Islamic Banks/Islamic
Banking Branches.
Introduction of Islamic Inter Bank Fund Market (IIFM)
Bangladesh Bank has introduced Islami Inter Bank Fund
Market (IIFM) with a view to facilitating liquidity management
of the Shariah-based Islamic banks. Islami Banks cannot
borrow fund from the conventional call money market due
to non-compliance of Shariah. Moreover, absence of a
Shariah-based money market refrain the banks to borrow
fund from each other. Therefore, Islamic money market is
integral to the functioning of the Islamic banking system
in providing the Islamic financial institutions with the facility
for funding and adjusting portfolios over the short-term.
Financial instruments and inter-bank investment would
allow surplus banks to channel funds to deficit banks,
thereby maintaining the funding and liquidity mechanism
necessary to promote stability in the system. Although
the Islamic Shariah-based banks have about 20 per cent
a n n u a l
market share of the total asset and liability in the country’s
banking industry, they did not have any inter-bank money
market (call money market) before. As a result, the banks
were facing problems in managing excess liquidity, and on
the other hand, if a bank needed fund to overcome sudden
liquidity shortage, Islamic Banks had no option to manage
fund except internal arrangement in between Shariah banks
through MSD and MND accounts operations. At present,
Islamic banks are holding more than Tk 4000 crore as
excess liquidity, which is now remained idle due to absence
of a formal money market for them. Introduction of IIFM
has solved the problems of the Islamic banks and from
now they are able to collect fund from inter-bank money
re p o r t
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market. Shariah-based banks transact with each other
through a separate fund called IIFM and the central bank
is the custodian of this fund. According to the rules, if any
bank has excess fund, it will invest the amount in the IIFM
for one day. Besides, another Islamic bank requiring fund
can borrow funds from it from the IIFM for one day. The rate
of profit in the Islamic bank money market is determined
on the basis of the profit rates of the bank gives to its
depositors on a three months’ deposit. The contract will be
based on Mudaraba principle of Islamic banking law and the
new system would open a new window of investment for
the Islami banks having excess liquidity.
An Overview of the Bank
SIBL started its operation on the 22nd November,
1995 as a Second Generation Islamic Bank in close
co-operation and assistance of some renowned
personalities of the Islamic world. H.E. Dr. Hamid Al
Gabid, Former Secretary General of OIC & Prime
Minister of Niger, H.E. Dr. Abdullah Omar Nasseef,
Deputy Speaker of Saudi Shura Council & ExSecretary General of Rabeta Al-Islami, H.E. Ahmed
M. Salah Jamjoom, Former Commerce Minister of
Saudi Government, H.E. Prof. Dr. Ahmad El-Naggar
(Egypt) participated to this noble endeavor as sponsor
shareholders. Targeting poverty, SOCIAL ISLAMI BANK
LTD. is indeed a concept of 21st century participatory
three sector banking model in one: in the formal sector,
it works as an Islamic participatory Commercial Bank
with human face approach to credit and banking on the
profit and loss sharing: it is a Non-formal banking with
informal finance and credit package that empowers and
humanizes real poor family and creates local income
opportunities and discourages internal migration; it is a
Development Bank intended to monetize the voluntary
sector and management of Waqf, Mosque properties
and introducing cash Waqf system for the first time in
the history. In the formal corporate sector, this Bank
would, among others, offer the most up-to date banking
services through opening of various types of deposit
and investment accounts, financing trade, providing
letters of guarantee, opening letters of credit, collection
of bills, leasing of equipment and consumers’ durable,
hire purchase and installment sale for capital goods,
investment in low-cost housing and management of real
estates, participatory investment in various industrial,
agricultural, transport, educational and health projects
and so on.
To enhance the performance of the bank our
management adopted strategic plan that includes
increase in efficiency, establishment of transparency,
efficiency and accountability in all spheres of banking
practices and as a logical consequence, reform.
Establishing Central Trade Processing Unit (CTPU),
Central Remittance Processing Unit (CRPU), Central
Clearing Unit (CCU), ADC (Alternate Delivery Channel),
Offshore Banking above all customized Products
and Services are the reform processes that we had
undertaken from 2010 to 2013 to be the compliant on
one hand and to serve our client more efficiently and
effectively on the other.
Internal Control and Compliance
The network of activities of banking have so diversified
and widened that without proper internal control,
smooth functioning of banking cannot even thought of.
Effectiveness of the Bank’s Internal Control System is
being monitored on an ongoing basis. Social Islami Bank
established and maintain an adequate system of Internal
Control which can effectively control all the key functions
of the Bank, so that objectives of the bank are achieved
and shareholders, depositors & other beneficiaries are
sharply benefitted. To protect and safeguard the Bank
form any means of fraud and error as well as loss, Social
Islami Bank has introduced the “Internal Control and
Compliance guideline” and also established a separate
department called “Internal Control and Compliance
Division (ICCD)” at Head Office staffed with some
experienced Senior Bankers wrest with the power and
duties to train the employees of the bank, give direction,
monitor, audit and establish control on day to day
operational procedures and statutory and non-statutory
compliances. Still, it is important to recognize the
existence of inherent limitations of internal control.
67
Social Islami Bank Ltd.
During the year ended on 31st December 2013 Internal
Control & Compliance Division conducted auditing of
86 Branches on regular interval as per Annual Audit
plan 2013 duly approved by Board Audit Committee.
The Division conducted surprise Inspection on 25
branches in 2013. The Division also conducted audit on
10 Division/Departments of Head Office in 2013. Key/
high risk items are being reported to the Management
as Executive Summary in the form of Office Note.
Key notes were also placed before the Board Audit
Committee for information.
Capital Management of the Bank
The bank started its journey in the year 1995 with a paid up capital of Taka 118.36 million and thereafter within 19 years
it has built a total Capital of Taka 11,623.52 million using the external and internal sources. Given below table is the last
5 years history of SIBL towards its capital journey efforts:
Fig in million Taka
Year
PaidupCapital
TotalCapital
Growth(overthe
previous year)
SourceofCapital
2009
2,691.72
3,914.61
80.55%
Internal & external (right issue) generation
2010
2,987.81
4,678.56
19.52%
Internal generation
2011
6,393.93
9,534.52
103.79%
Internal & external (right issue) generation.
2012
6,393.93
10,596.51
11.13%
Internal generation
2013
7,031.42
11,623.52
9.69%
Internal generation
To comply with the international practices and to make
the bank’s capital more shock absorbent, SIBL is
compliant of risk based capital adequacy frameworkBASEL-II. As per regulatory requirements, the bank
uses standardized approach for assessing, evaluating
and calculation of risk weighted assets w.e.f 2010.
SIBL is always concerned about its capital and its due
maintenance and accordingly while forecasting the
business growth and regulatory capital requirements,
internal and external sources of capital are considered
in detail after capital impact study. Success of the year
2010 and 2011 and projected business growth in the
year 2012 and ahead, the bank issued 1:1 Right Shares
among its shareholder which injected a fresh capital
of Taka 2,987.81 million during the year 2011. The
final impact on capital at the year end 2013 stood at:
(a) paid-up capital Taka 7031.41 million against Taka
6,393.92 million of 2012 and (b) total capital (as per
BASEL-II) Taka11,623.52 million against Taka 10,596.51
million of 2012.
Capital of the Bank (fig. in million)
541.24
1081.33
Paid up Capital
846.53
Statutory Reserve
2122.99
1% provision on
unclassified investment
50% revaluation surplus
on fixed assets
7031.42
Retained Earnings
CapitalBase(Tier-i&Tier-ii)
As per directives of Bangladesh Bank, all commercial
banks are in the process of maintaining the minimum
risk weighted capital to 10% dividing the total capital
into Tier-I & II from 1st July 2011. Tier-I capital
consists of (a) paid up capital (b) statutory reserves
(c) retained earnings and Tier-II capital consists of
(a) general provision on unclassified Investments (b)
50% of revaluation surplus on Fixed Assets. As per
68
requirements of the capital, it is mandatory to maintain
the Tier-I capital minimum 5%. Capital base consisting
of Tier I & II of the Bank as on 31st December 2013
stood at Tk 11,623.52 million as against Tk. 10,596.51
million as on 31st December 2012. As per BASEL-II, the
Comparative position of Capital Base of the year 2013
and 2012 is given as under:
a n n u a l
re p o r t
2 0 13
Fig in million Taka
Particulars
Yr-2013
Yr-2012
1. Paid up capital
7,031.42
6,393.93
2. Statutory Reserve
2,122.99
1,718.06
3. Retained Earnings
846.53
960.00
10,000.94
9,071.99
1,081.33
969.53
541.24
554.98
1,622.57
1,524.52
11,623.52
10,596.51
Capital Adequacy Ratios
Yr-2013
Yr-2012
i. Tier –I Capital Adequacy Ratio (Requirement 5%)
10.02%
9.86%
ii. Risk Weighted Capital Adequacy Ratio (RWCAR) [Requirement 10%]
11.64%
11.52%
Tier-I
Sub-total
Tier-II
1. 1% provision on unclassified investment
2. 50% of Revaluation surplus on Fixed Assets
Sub-total
Total
StressTesting
To analyze the soundness of capital impact / capital’s shock resilience of the bank more elaborately in the backdrop of
5 major risk factors of bank i.e. (a) Profit rates (b) Forced sale value of collateral (c) Non Performing Investment (d) Share
price & (e) Foreign exchange rate based on minor, moderate and major levels of shocks consideration, Bangladesh
Bank vide its circular no: DOS Circular No: 1 dated 21st April 2010 and revised guideline on 23 February 2011 has
directed all the commercial banks for stress testing on the basis of ‘Simple Sensitivity and Scenario Analysis” w.e.f.
June 2010 on half yearly basis and thereafter quarterly basis w.e.f 1st quarter of 2011. Stress testing simply provide
information on strengthens of a bank to absorb the level of shocks against all the risk factors.
StressTestingResultoftheBankasonDecember2013
Required CAR
10.00%
CAR Maintained 11.69% (Consolidated)
Required CAR 10%
CAR after
Minor
Shock (%)
CAR after
Moderate
Shock (%)
CAR after
Major
Shock (%
Performing loan directly downgraded to B/L: Sectoral Concentration 1
11.60
11.31
11.01
Performing loan directly downgraded to B/L: Sectoral Concentration 2
11.69
11.59
11.49
Increase in NPLs due to default of Top large loan borrowers
9.91
8.76
6.37
Negative Shift in NPLs categories
11.28
11.87
11.12
Decrease in the FSV of the Collateral
11.37
11.00
10.25
Interest Rate
11.76
11.79
11.81
FEX: Currency Appreciation
11.72
11.70
11.68
Equity Shock
11.66
11.58
11.42
Individual Shocks
69
Social Islami Bank Ltd.
Required CAR 10%
Individual Shocks
Decrease in the FSV of the Collateral
Increase in NPLs due to default of Top large loan borrowers
Negative Shift in NPLs categories
Interest Rate
FEX: Currency Appreciation
Equity Shock
Total Change
CAR after combined shock applied (%)
Minor
Changes in
CAR
-0.37
-0.60
-0.46
0.02
-0.02
-0.08
-1.51
10.18
Moderate
Changes in
CAR
-0.74
-2.35
0.13
0.05
-0.04
-0.16
-3.11
8.58
Major
Changes in
CAR
-1.49
-5.77
-0.62
0.07
-0.07
-0.32
-8.20
3.49
The bank has a continuous plan on its capital structure to defeat any unforeseen minor or moderate shocks at any
time. The shock results of the 4th quarter of 2013 shows that the capital structure of the bank is well defined and also
indicative that the bank will be able to maintain the capital adequacy ratio at the standard level as set by the regulator.
To strengthen the capital base of the bank, the board of Directors have recommended to issue 6 years redeemabme
Mudaraba Sub-Ordinated Bond for Taka 300 crore which was approved by the Shareholders’ of the bank in the 18th
Annual General Meeting. The bank expects to complete the issue formalities by June 2014.
Liquidity
The bank has been following an approved ALM (Asset
Liability Management) guideline, duly approved by the
Board of Directors of the bank, in managing the day to
day liquidity since 2005. Senior management of the bank
is involved in the total process of liquidity management
and discharges decision through ALCO (Asset Liability
Committee) meeting. Management of the bank put
much stress on the bank’s liquidity on regular basis rather
than casual. Members of the ALCO sit minimum once
in a month and instantly in case of any emergency to
determine the strategy to manage any unusual market
liquidity situation. The bank has a clear guideline to
face the stress liquidity situation to protect the bank at
anytime from any means of liquidity mismatch. During
the year under report, the bank conducted 13 numbers
of ALCO meetings. To support the ALM and ALCO, the
bank has a special desk under the name and style ‘ALM
Desk’ which is (a) primarily responsible for scanning the
liquid market place along with national, continental and
international economy and economic factors in every
seconds (b) secondly, communication-monitoring-follow
up of ALCO decision and (c) thirdly, closely monitoring of
structured liquidity profile of the bank through in-depth
analysis of Asset & Liability position of the balance sheet
and tracking the different liquidly parameter whether all
these factors are moving within the controlled environment/
tolerable limit or not and report to the CEO. Some young
and brilliant professionals are assigned to perform the ALM
jobs and highly concerned to assist the bank in proper
liquidity management under the close supervision of senior
management.
Liquidity in the form of Balance with Bangladesh Bank, Sonali
Bank (as the agent of Bangladesh Bank) and cash in hand
including Foreign Currency stood at Tk. 8,894.75 million as
at 31 December 2013 as against Tk. 11,125.08 million in
last year to maintain cash & statutory liquidity. The Bank is
committed to maintain the CRR and SLR through effective
management of assets & liabilities of the Bank in order to
maximize the profit. During the year under report, the bank
effectively maintained required CRR and SLR throughout the
year without fail as per Bangladesh Bank’s norm.
Placement & Funding
Style and method of placement & funding of Shariah
compliant banks are quite different from conventional
banking style. Shariah banks operate their placement
& funding under restricted environment and keep
them apart from participation in ‘Call Money Market
Operation’ and from ‘Treasury Bill’ purchasing programs
like other contemporary banks- which are the mostly
famous and widely used techniques in the banking
70
industry at home and abroad. However, for the Islami
banks, borrowing from Bangladesh Govt. Mudarab
Bond –a recognized external fund, provides liquidity to
the Islami banks under some restricted environment.
Borrowings from Bangladesh Govt. Mudarab Bond
mostly depend on the availability of the fund and
availability of securities.
a n n u a l
re p o r t
2 0 13
SIBL as a Shariah based bank, surplus funds placement
and borrowings are usually initiated in the following way:
at the year end 2013 was Taka 9,064.88 million
compared to Taka 9,015.89 million of 2012.
(a) Placement of fund with the other Banks and
Financial Institutions in the form of Savings, Notice
and Term deposit: Since the funding of Shariah
banks are restricted to some extend, SIBL always
keep room in its ID ratio maximum to 90.00%
and such the surplus funds keep with other Islami
Banks or with the Islami banking branch / windows
of conventional banks. Usually, Savings & Notice
deposits accounts with other banks are used
to manage the temporary or short term surplus
for income generation purpose in one side and
to withdraw money instantly to support the total
liquidity system of the bank on the other side. Total
placement with other Banks and Financial Institutions
(b) Borrowings of fund from Bangladesh Govt.
Mudaraba Bond: SIBL borrows fund from
Bangladesh Govt. Mudaraba Bond against the lien
marking of
(i) Instruments of Investment in Bangladesh Govt.
Mudaraba Bond
(ii) IBP Instruments
(iii) MTDR receipts with other Bank’s Investment
SIBL has a borrowing of Taka. 4,700.00 million as on
31.12.2013 compared to Tk. 4,700.00 million of the
year 2012. The cost of such borrowings is equivalent to
savings deposit rate.
Deposits
During the year 2013, the bank drew-up a series
of action plan both short term and long term to
raise the deposit base of the Bank in line with the
Directives of the Bangladesh Bank. The shortterm action plan included launching of special
drives like deposit mobilization months during
March-April 2013. As a result of continuous
evaluation and monitoring we could significantly
improve the liquidity position as well as deposit
mix in 2013. The following graph shows the
deposit trend of the Bank:
95984.8
100000
81091.4
80000
56661.2
60000
39833.4
40000
20000
0
13460.7
2004
14342
16046.7
18601.5
22065.8
2005
2006
2007
2008
27663.6
2009
2010
2011
2012
2013
Customer Deposits
Comparative Deposit Mix
FiginmillionTaka
Particulars
Year-2013
Al-Wadeeah Current & Other Deposit
Mudaraba Savings deposit
Mudaraba Term deposit
Other Mudaraba deposit
Cash Wqf.
Total
12,198.62
6,468.73
62,746.87
20,605.68
84.58
102,104.48
Year-2012
10,903.16
4,905.32
62,267.65
15,449.26
68.90
93,594.29
Growth
11.88%
31.87%
0.77%
33.38%
22.76%
9.09%
The bank has specially focused on liability marketing and accordingly a special division named Corporate Customers
Relationship (CCRD) has been formed to concentrate the deposit products. To support the total efforts and activities
of the CCRD, another division called Marketing, Branding & Communications Division (MBCD) has also been formed
in the year 2010 supervised by a Deputy Managing Director which is mainly engaged in image building activities using
all modern concepts & tools so that the messages of our bank easily reach to the grassroots level to the nation and
abroad. BCD has made the MBDD confident in deposit procurement programs of the bank and accordingly trying to
introduce new and timeliness deposit product.
In the year under review, banking sector faced mixed liquidity situation and as a result of that cost of deposit in the
industry decreased marginally. SIBL maintained balanced liquidity position over the year successfully and posted a
required deposit growth in the year 2013. Cost of deposit for the year under review is 9.04 % compared to 9.12% of
the year 2012 and effective planning and utilization of deposits ensured a positive growth in revenue earning.
71
Social Islami Bank Ltd.
Profit paid to Depositors
The bank has distributed Tk. 9706.87 million among the Mudaraba Depositors as profit in 2013 as against Tk. 7541.68
million in 2012. Profit paid in 2013 among the various types of Mudaraba depositors at the following rate:
72
Sl. No.
Mode of Deposits
Profit rates for
the year 2013
Profit rates for
the year 2012
1
Mudaraba Savings Account
4.10%
4.10%
2
Mudaraba Notice Deposit Account
4%-10%
4%-10%
3
Mudaraba Term Deposit Account
a. 1 month
10.00%
12.50%
b.3 months
11.50%
12.50%
c.6 months
11.50%
12.50%
d.12 months
11.50%
12.50%
4
Mudaraba Scheme Deposit Accounts
a.
Mudaraba Monthly Profit Deposit Scheme
12.50%
12.50%
b.
Mudaraba Millionaire Savings Scheme
12.50%
12.50%
c.
Mudaraba Education Deposit Scheme
12.50%
12.50%
d.
Sonali Din Special Deposit Scheme
12.50%
13.50%
e.
Mudaraba Special Deposit Pension Scheme
12.50%
12.50%
f.
Mudaraba Bashsthan Savings Scheme
12.50%
12.50%
g.
Mudaraba Hajj Savings Deposit (Kafela)
13.00%
13.50%
h.
Cash Waqf
13.00%
14.00%
i.
Mudaraba Lakhopati Deposit Scheme
12.50%
12.50%
j.
Mudaraba Double Benefit Deposit Scheme
12.50%
12.50%
k.
Shamridhir Shopan Special Deposit Scheme
12.50%
13.43%
l.
Mudaraba Marriage Savings Scheme
12.50%
12.50%
m.
Mudaraba Mohorana Savings A/c (10 Years)
12.50%
12.50%
n.
Mudaraba Mohorana Savings A/c (5 Years)
12.50%
12.50%
o.
Shanchita Special Deposit Scheme
8.00%
8.00%
p.
Subarnalata Special Deposit scheme
12.50%
13.50%
q.
SubarnaRekha Special Deposit Scheme
12.50%
13.50%
r.
Sabuj Chaya Special Deposit scheme
12.50%
13.50%
s.
Sabuj Shayannaya Special Deposit Scheme
12.50%
13.50%
t.
Shukher Thikana Special Deposit Scheme
12.50%
13.50%
u.
Shachanda Protidin Special Deposit Scheme
12.50%
13.50%
v.
SIBL Young Star Account
10.00%
10.00%
a n n u a l
re p o r t
2 0 13
Investment
Our main challenge is to maintain and manage the
tremendous growth of the investment portfolio which
is expected to achieve a significant growth in 2013
from the current position of TK 85,922.33 million by
ensuring asset quality and to distribute investment to
the target group offering competitive price, inducting
best of the best clients and stopping migration of our
existing clients. We need to build our capacity further
and develop the overall discipline to cope with the
tremendous growth of investment portfolio and to meet
the challenges of banking business. To support the
total Investment management system of the bank, we
are constantly building professional knowledge of our
officials and executives. We are trying to attract our
client through product development and diversification
in line with the Shariah principles.
Generally Investment is the largest source of risks which
is stemmed from both on-balance sheet and off-balance
sheet activities. It may arise from either inability or from
unwillingness of the customers. Investment risk comes
from a bank’s dealing with individuals, corporate, banks
and financial institutions or a sovereign. The assessment
of investment risk involves evaluating both the
probability of default by the borrower and the exposure
or financial impact on the bank in the event of default.
SIBL is making greater efforts to identify and limit various
risks which affect investment directly like market risk,
liquidity risk and operational risk. IRMD is working to
have effective internal policies, systems and controls to
identify, measure, monitor and control investment risk.
Social Islami Bank Ltd. through its steady progress and
continued success has earned reputation. The network
of the branches widened and the size of investment
portfolio of the Bank has been increasing substantially
day by day. As in the past, over the years the
Management concentrated its efforts on popularizing
the Islamic Banking concept and side by side expanding
its operational activities. Alhamdulillah, our sincere
efforts have been crowned with success and Banks
businesses in all spheres have increased over years.
Now SIBL is one of the fast growing private commercial
banks in the country.
The bank has exerted its best efforts towards
implementation of Core Risk Management in IRMD.
Internal rearrangements have been carried out for
better and efficient operation of this robust division
by segregating the division into Investment Approval
Unit, Investment Administration and Monitoring Unit
as per CRM guideline. At the same time, the bank has
ensured the disposal of investment proposals within the
quickest time and by complying all rules, regulations and
investment norms of regulatory bodies.
Investment Risk Management Division is also very
much aware about the upcoming risk factors involved in
banking industry. As a result we are now more cautious
Taka in Million
100000
85922.3
76025
80000
53908.6
60000
36680.3
40000
20000
0
26580.5
19951.3
2008
2009
2010
2011
2012
2013
73
Social Islami Bank Ltd.
about implementing various risk mitigating factors in
line with the directives of Bangladesh Bank and GoB.
We are already in line to implement BASEL-II phase by
phase so that regulatory bindings can be implemented.
Meanwhile some of our investment clients have been
rated by leading rating agencies and many others are
in process. We therefore hope that in coming days we
would be more successful in mitigating risk factors and
presenting quality assets.
Global investment of SIBL in the year 2013 showed a
favorable growth. The total investments of the Bank
stood at Tk 85922.33 million in various sectors as at
31st December 2013 against Tk. 76,024.97 million of
2012 registering a growth 13.02% that signifies the
confidence of the clients on the Bank. The net increase
in investment by Tk 9,897.35 million as compared to
2012 was due to expansion of business. We are now
concentrating our efforts to increase quality investments
to facilitate the investment earnings. Till December
2013, 225 numbers of our investment clients have
been rated of whose investment value is 33,563.20
million by leading rating agencies and many others are
in queue for getting the rating report and we are now
concentrating our efforts to increase quality investments
to facilitate the investment earnings. The Bank has
extended financial support towards some of the largest
business conglomerates like Popular Diagnostic Ltd.
ACME, Bengal Group, Mir Akhter Ltd., S.A Group,
Aman Spinning, ABA Group etc in addition to existing
corporate clients named BSRM, KDS Group, Noman
Group, United Group, Abdul Monem Ltd., Pran Group,
NASA Group, Grameen Phone, City Group, ACI etc.
Out of the total investment our significant concentration
was towards cotton & textile sector equivalent to
16.52% of total investment in 2013 compared to
10.34 % in 2012. We also integrated our collaborative
efforts vigorously and successfully during this time
for helping various small and medium enterprises for
supplying their capitals through our different micro credit
investment tools. We are also very much successful in
helping several people through our Consumer Finance
Investment facilities during this year. The following chart
depicts the year wise position of investment since year
2005:
Despite stringent circulars of Loan Classification &
Provisioning by Bangladesh Bank, SIBL played a crucial
role for keeping Non-Performing Investment(NPI) at
5.35%, through vigorous drive towards recovery of NPI
and quality disbursement for fresh investments taken
seriously by the management. Non performing asset
(NPA) of SIBL has increased to 5.35% compared to 3.33
% in 2012. Drive towards recovery of NPA and quality
disbursement of fresh investments have been taken
seriously by the management. Our External Auditor and
Credit Rating Agency have also appreciated our policy
and endeavor towards new investment and recovery of
the NPAs. Out of Investment of Tk. 85922.33 million, Tk
4,593.33 million has become classified. It is mentionable
here that the asset quality of some of our Branches
have deteriorated since 2004 resulting in the increase
of classification by 11.36% in 2004 and as continuation
to that, the bank was put under Problem bank list in the
year 2005 by the Bangladesh Bank. Since then, our all
out efforts gradually reduced the classified investment
and successfully maintained required provision against
classified investment as depicted in the Audit Report.
To overcome the situation, we launched special drives
to recover the sticky and classified investments. Since
2004, the bank has written off investment to the tune
of Tk 2,307.44 million as on date of report and thus the
classification ratio stood at 5.35%. As per classification
rules of the Bangladesh Bank, the bank has maintained
a provision of Tk 1,692.05 million in this year against
required specific provision of Tk 1,692.05 million.
Classification composition of investment of the bank as
on 31.12.2013 has been given in the table below:
FiginmillionTaka
Status
2013
2012
Amount
Composition
Amount
Composition
0.25%, 1% & 2%
1,065.64
38.42%
965.87
49.80%
Special Mention Account
5%
15.69
0.57%
3.65
0.18%
Su-Standard investment
20%
4.62
0.17%
29.64
1.53%
Doubtful Investment
50%
171.82
6.20%
6.91
0.36%
Bad /Loss Investment
100%
1,515.61
54.64%
933.59
48.13%
2,773.38
100.00%
1939.66
100.00%
Unclassified investment
Total
74
Provision Rate
a n n u a l
re p o r t
2 0 13
Investment Plan for 2014
The plan has been formulated keeping in view with the
national economic priorities and aiming at diversification
of the investment portfolio by size, sector, geographical
area, economic purpose and securities to bring in
phases all sectors of the economy and all types of
economic activities and different economic strata of the
society within the fold of Bank’s investment operations.
SIBL has declared 2014 as the year of “Sustainability
and Growth” and budgeted to reach investment portfolio
to Tk. 120000 Million starting from Taka 85,922.33
million only and maximization of operating profit will help
us in achieving this goal. To achieve the target SIBL is
looking after the country’s top business tiers to boost
the growth of the bank. Segment of these groups are
Telecom Operators, Ready Made Garments (RMG),
Textiles, Pharmaceuticals, NBFI, MNCs etc. IRMD is
always ready to give a boost to the services to such
companies to support the branches.
With high quality resources equipped with both
operational and product expertise under a competent
management team, Investment Risk Management
Division (IRMD) is always ready to take the challenge
of tremendous growth of the investment portfolio. But
under any circumstances, quality of the investment
portfolio or related risks like market risk, liquidity risk
and operational risk will be analyzed and subsequently,
mitigated before investment approval. IRMD
(Investment Risk Management Division) is working to
have effective internal policies, systems and controls to
identify measure, monitor and control investment risk.
Green Banking
Green Banking is an emerging issue in the present
banking arena. Green Banking is a holistic approach,
which encourages environmental protection,
sustainability, resource-savings and economic attitude
in personal and professional life among others. In our
present context, bankers can extend financial support
in the field of ETP (Effluent Treatment Plant), Biomass,
Solar Panel and to promote HHK (Hybrid Hoffman
Kiln) technology in the brickfield. Bangladesh Bank is
emphasizing much on environment and environmentfriendly project.
Green Banking issues are properly addressed at SIBL as
per guidelines of Bangladesh Bank. Bangladesh Bank
vide BRPD Circular no. 02 dated 27.02.2011 advised all
banks to start Green Banking Activities comprising a set
of initiatives in 03 (three) phases with specific time frame.
Strategy Framework of Green Banking
Phase 01
Phase 02
Phase 03
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.1
2.2
2.3
2.4
2.5
2.6
2.7
3.1
3.2
Policy formulation and governance
Incorporation of environmental risk in CRM
Initiating in-house environment management
Introducing green house finance
Creation of climate risk fund
Introducing green marketing
Online banking
Supporting Employee training, consumer awareness and green event
Disclosure and reporting of green banking activities
Sector specific environmental policies
Green strategic planning
Setting up green branches
Improved in-house environment management
Formation of bank specific environmental risk management plan and guidelines
Rigorous programs to educate clients
Disclosure and reporting of green banking activities
Designing and introducing innovative products
Reporting in standard format with external verification
75
Social Islami Bank Ltd.
Green Banking initiatives are multi-stake holder approach and are never ending process, the implementation is possible
only when collective efforts of all are being made.
Sl. No.
Name
Achievement
01.
Formation of Green Banking Unit
Green Banking Unit has been restructured for smooth
functioning of Green activities
02.
Circulation of Environment Due
Diligence (EDD)
Environment Due Diligence (EDD) checklist is being Circulated
vide instruction Circular no. 2011/23 dated May 23, 2011
03.
Circulation of Environment Risk
Rating (ERR) Environment Risk Rating (ERR) is being done
as per instruction Circular no. 2011/23 dated May 23, 2011
04.
Circulation of Green Office Guide
Green Office Guide checklist is being monitored as instruction
Circular no. 2011/29 dated December 29, 2011
05.
Formation of Green Banking Policy
Green Banking Policy of SIBL has been approved by the
Board of Directors of the Bank in its 267th meeting
(emergency) held on 29.12.2011
06.
SomeGreenEvent
• GreenBankinghasbeenfocusedintheAnnualCalendar,
2013. Such endeavor has widely been accepted and
applauded.
• SIBLhasmadedonationforTk.2.00lacformakinga
Guava Garden of Public Order Management (POM) Unit at
Mirpur of Dhaka Metropolitan Police (DMP).
• e-Circularsystemhasbeenintroduced.
• e-Newsletterhasbeenintroducedreplacingpaperbook.
• Solarpanelinstalledinsomebranches.
Our future plan:
SIBL has the plan to focus on the following areas of operation for promoting Green Initiatives:
•
•
•
•
•
•
•
•
•
•
TopopularizeOnlineBanking,
ToincreaseInternet,SMS&MobileBanking
TointroduceVideoConferencing
ToincreaseEffortstowardsnearpaperlessbanking
TopromoteTreePlantationCampaign
Topromotegreeninitiativesthroughadvertisementinprint/electronicmedia
Torationalizeuseofconsumptionofpaper,water,electricityandutilities
ToreduceEmissionofCarbon
Toconserveenvironment
Toprotectair/waterpollution
Saving our ‘Mother Planet’ has become the crucial issue now-a-days. To save our beloved abode (the earth) from all
types of erosion and pollution we, as global citizens, have some obvious responsibilities to keep our mother planet
green remaining in our individual position we belong to.
Appreciation
In the Annual Report of Green Banking 2012 published by the Bangladesh Bank, Social Islami Bank Limited has been
ranked among top ten banks in Bangladesh for Green Banking Activities. SIBL has also been ranked as top three
banks that played 15.25% share among ten banks in marketing, training and development initiatives.
76
a n n u a l
re p o r t
2 0 13
Special Asset Management
Special Asset Management Division (SAMD) started its
activities from November 2010 for better functional and
continual process up gradation and to robustly initiate
the recovery activities of the bank. The whole division
is restructured and reorganized for ensuring a better
recovery of Classified & Written-Off Assets of the bank.
For this purpose, the Division is now segregated into the
following sections:
legal procedures to arrest deterioration of assets and to
speed up recovery of written-off investment.
i)
ii)
iii)
iv)
v)
The Division also processes all the related issues like
negotiations for settlement outside of the Court, writeoff and rescheduling for a better result of reducing the
classified investments.
On-sight Desk
Off-sight Desk
Desk for Execution of Decision
Legal affairs Desk
Desk for Reporting to the Regulators &
Management.
The main jobs of the Division is devoted to reduction
and /or adjustment of Bank’s NPI assets and for better
management of classified assets adopting advanced,
specialized tools and mechanism including initiating
The division is maintaining continuous & vigorous
contact & strong monitoring for recovery with the
branches having NPI Assets & also established direct
contacts with the clients to recover NPI dues outside of
the court.
The Division is expected to achieve a better position
through concerted efforts in reducing the classified
investment and recovery of the written-off investment in
the year 2014.
Investment Income
The bank has registered an income from investment of Taka 13,629.42 million under different modes of investment
accounts in the year under review compared to Taka 11,319.01 million of 2012 which is an increase of 20.41% from
the previous year. A comparative position on income received from different modes of investment in the year 2013 and
2012 is given below:
FiginmillionTaka
Investment Mode
Year-2013
Year-2012
Growth
Murabaha
475.91
524.58
-9.28%
Bai-Muzzal
6895.60
5630.41
22.47%
Hire Purchase Sirkatul Meelk
1802.28
1798.33
0.22%
Musharaka
57.86
43.33
33.53%
Bai-Salam
9.37
1.27
637.80%
1041.64
640.93
62.52%
Inland Document Bill Purchased
401.66
440.02
-8.72%
Foreign Document Bill Purchased
1070.39
822.85
30.08%
24.67
27.03
-8.73%
1367.36
1060.47
28.94%
448.13
326.23
37.37%
34.55
3.56
870.51%
13629.42
11319.01
20.41%
Quard against MTDR, Scheme & Others
Profit on Ijarah
Mudaraba Deposit with other Banks and NBFI’s
Other Investment (Card, Wakalat Fees etc)
Profit on Mudaraba
Total
77
Social Islami Bank Ltd.
Capital Expenditure
During the year under review, the total capital
expenditure on acquisition of fixed assets was Taka
56.51 crore which includes Taka 21.49 crore for
Building, Taka 17.34 crore towards Furniture & Fixtures,
Taka 16.61 crore for Office Equipments & Computers
and Taka 1.07 crore towards purchase of vehicles.
Non Funded Investment
The year under review, the bank had a collective effort
in non funded business from the first day of 2013.
The Bank undertook a target on foreign exchange
business for the year 2013 for Taka 1,70,000.00 million
and accordingly achieved 1,32,374.70 million which
is 77.86% of global target. The bank successfully
managed to earn a commission & exchange income of
Tk.1254.59 million in 2013 against Tk. 1503.94 million
of 2012. The growth rate of commission and exchange
earning is (16.25%) over the previous years. Despite
of the volatility of foreign currency throughout the year
2013, the bank accumulated an exchange gain of Taka
471.29 million against Taka 592.63 million of 2012.
Income from Investment in Shares &
Securities
Throughout the year, the country observed the capital
market as unsupported, fade and confidence less of the
investors irrespective of corporate and individual. SIBL
had an investment outstanding of Taka 8,538.18 million
in Quoted & Unquoted Shares, Preference Share, Bond
& Government Security against Taka 6,144.01 million
of 2012. This year earnings from this segment has
been recorded Taka 325.47 million against Taka 233.82
million in 2012. Despite of massive fall of capital market,
the bank saved its portfolios successfully however an
amount of Taka 182.90 million has been decreased
in fair value which was adjusted through profit & loss
account for the period 2013.
Significant variance in operating results between
Quarterly and Annually
Despite political turmoil and overall economic slowdown, SIBL was able to maintain a positive growth in Deposits,
Investment and Foreign Exchange. The operating profit of the year 2013 was Taka 292.45 against Taka 361.78 crore
which is a negative growth of (19.16%). While analyzing the operating results by month to month and quarter to quarter,
no significant deviation was found. The operating results for the 4 quarter of the year 2013 are given below with remarks:
Fig in million Taka
Sl no Accounting Head
78
31.03.13
30.06.13
30.09.13
31.12.13
Remarks
1
Investment Income
3215
6667
10006
13629
4 quarters trend of the year
2013 shows no significant
deviation in results.
2
Profit Paid on deposits
2415
4913
7246
9707
4 quarters trend of the year
2013 shows no significant
deviation in results.
3
Net Investment Income
800
1754
2760
3923
Operating results of 2nd ,3rd
& 4th quarter slightly deviated
from normal trend due to
Investment yield was slightly
increasing ( 13.74% to
13.39%) trend and decreasing
trend of Cost of Fund
(9.52% to 9.04%)
a n n u a l
4
Income from Investment
in Shares & Securities
63
160
212
325
5
Commission,
Exchange & Brokerage
226
477
753
1027
6
Other Operating
Income
60
110
142
228
7
Total Operating
Income
1150
2501
3867
5503
8
Operating Expenses
498
1122
1840
2578
9
Salaries & Allowances
287
634
1075
1514
10
Other Operating
Expenses
210
489
766
1064
11
Operating Profit
before provisions
taxes
652
1379
2027
2925
re p o r t
2 0 13
4 quarters trend of the year
2013 shows no significant
deviation in results.
4 quarters trend of the year
2013 shows no significant
deviation in results.
4 quarters trend of the year
2013 shows no significant
deviation in results.
4 quarters trend of the year
2013 shows no significant
deviation in results.
Sequence of the quarterly
results seems to be correct.
Due to new pay scale, 1st
quarter results is slightly
deviated.
4 quarters trend of the year
2013 shows no significant
deviation in results.
4 quarters trend of the year
2013 shows no significant
deviation in results.
SIBL Subsidiaries
SIBL Securities Limited: SIBL Securities Limited, a
wholly owned subsidiary of SIBL, was incorporated
as a Public Limited Company under the Companies
Act, 1994 vide certification of incorporation no.
C - 85876/10 dated 20 July 2010 and obtained its
certificate of commencement of business on the
same day. SIBL Securities Ltd. is corporate TREC
holder of Dhaka & Chittagong Stock Exchange Ltd.
The company started its commercial operation in
the month of January 2012. The principal place of
business is the Registered Office at 15 Dilkusha C/A,
Dhaka-1000. The principal objectives of the company
for which it was established are to carry on the
business as stock broker and stock dealer in relation
to shares and securities transastions, other services
related to the Capital Market and other activities
as mentioned in the Memorandum and Articles of
Association of the company. As on 31st December
2013, the company has made a profit after tax 32.00
million Taka as against Taka 24.16 million in 2012.
Total paid up capital of this company is Taka 1230
million.
SIBL Investment Limited: SIBL Investment Limited,
a wholly owned subsidiary of SIBL, was incorporated
as a Public Limited Company under the Companies
Act, 1994 vide certification of incorporation no.
C - 86726/10 dated 30 August 2010 and obtained
its certificate of commencement of business on the
same day. The principal place of business is the
Registered Office at 15 Dilkusha C/A, Dhaka-1000.
The principal objectives of the company for which
it was established are to carry on the business in
relation to shares and securities transactions, to
underwrite, manage and distribute the issue of
stocks etc. and other services as mentioned in the
Memorandum and Articles of Association of the
company. Total paid up capital of this company is
Taka 250 million.
TheBankholdsthemajorsharesofthesetwosubsidiarycompaniesasmentionedbelow:
Sl. No.
Name of Subsidiary Companies
% of holding of shares by the Bank
1.
SIBL Securities Ltd.
99.99%
2.
SIBL Investment Ltd.
99.99%
79
Social Islami Bank Ltd.
Segment Analysis - Graphical Presentation
Income Statement Analysis (fig. in million Taka)
16000
14000
12000
10000
8000
6000
4000
2000
0
Yr-2013
Yr-2012
Yr-2011
Yr-2010
Yr-2009
Investment Income
Income from Shares
& Securities
Commission, Exchnage
& Brokerage Income
Other Operating Income
Gross Income
Profit Paid to Depositors
Employee Cost
Other Operating
Expenditure
Operating Income
(Before Provisions & Tax)
13,629.42
11,319.01
6,922.21
3,886.18
3,078.98
325.47
233.82
171.11
341.63
51.48
1,026.57
1,178.95
1,206.19
653.19
514.95
228.02
324.99
387.90
187.10
135.85
15,209.48
13,056.77
8,687.41
5,068.11
3,781.26
9,706.87
7,541.68
4,541.15
2,435.02
2,063.62
1,514.11
1,088.56
904.35
637.40
403.76
1,063.95
808.71
473.11
357.06
249.58
2,924.55
3,617.82
2,768.79
1,638.63
1,064.31
Segment Wise Investment Income Analysis (fig. in million Taka)
Year 2013
Year 2012
0%
Profit on Bai-Muazzal
10%
9%
Profit on Murabaha
3% 5%
Profit on Bai-Muazzal
Profit on Hire-Purchase
Profit on Hire-Purchase
7%
Profit on Musharka
8%
Profit on Bai-Salam
3%
Profit on Quard
8%
51%
0%
0%
0%
Profit on Murabaha
3% 4%
Profit on IBP
Profit on FBP
0%
Profit on Bai-Salam
6%
Profit on Quard
Profit on IBP
50%
0%
Profit on FBP
16%
Profit on Deposits
13%
Profit on Musharka
4%
Profit on Deposits
Profit on other Investments
Profit on other Investments
Profit on Mudaraba
Profit on Mudaraba
Segment Wise Investment Income Analysis (fig in million Taka)
Year 2013
80
Year 2012
4000
4000
3500
3500
3000
3000
2500
2500
2000
2000
1500
1500
1000
1000
50
50
0
0
50
50
Social Islami
Bank Ltd
Offshore
Banking Unit
2,886.37
38.18
SIBL Securities SIBL Investment
Limited
Limited
40.31
(0.10)
Social Islami
Bank Ltd
3,614.68
Offshore
Banking Unit
3.14
SIBL Securities SIBL Investment
Limited
Limited
25.03
(0.03)
a n n u a l
re p o r t
2 0 13
Contribution to the National Exchequer
During the year under review, the bank has contributed a total sum of Taka 2,355.27 million as against Taka
2,290.69 million in 2012 to the National Exchequer. The summary is given as under:
Fig in million Taka
Particulars
Year 2013
Year 2012
Corporate Income Tax
817.86
1306.76
VAT Collection at Sources
127.40
131.40
1353.64
802.50
56.37
50.03
Tax Collection at Source
Excise Duty
Total
2,355.27 2,290.69
Risk Management
The risk management of the Bank covers a wide
spectrum of risk issues and the 6 (six) core risk areas
of banking i.e. investment risk, foreign exchange risk,
internal control & compliance risk, money laundering
risk, ICT risk and asset liability management risks.
To ensure sustainable and consistent growth, SIBL
has developed sound risk management policies and
framework as per Bangladesh Bank guidelines. All
the risk management policies and frameworks were
reviewed by the Board of Directors of SIBL during
the year 2013. A Risk Management Committee
(RMC) was formed consisting of 5 (five) members
of the Board of Directors in 2013. Main objectives
of the RMC are to ensure proper and timely risk
management in every sphere of the bank. The Board
has been made responsible for Identifying the risks
and formulation of appropriate strategies to control
inherent banking risks. The Committee submits
decisions and recommendations to the Board on
quarterly basis for further reviews and guidance in
the interest of the stakeholders. To streamline the
risk management system of the bank, a separate
division called “Risk Management Division” has
been formed where a Deputy Managing Director is
working as Chief Risk Officer (CRO). The Division is
staffed with some brilliant and young professionals
for consolidated risk management. Besides that, a
Management level Risk Management Committee is
actively working to focus the entire risk management
system of the bank. We are much concerned about
the business risk and its proper management so that
the risk and return could be optimized. Our policy
envisages that the management would pay special
attention to reduce the risk to an acceptable level
apart from prudent controls over the Bank’s assets.
Business Risk Analysis
Risk is an integral part of financing business and thus
every financial institution is exposed to risk of different
types and magnitudes. So, the prime responsibility
of every financial institution is to manage its risk such
that its return from business can be maximized. As a
prudent and responsible financial institution, the bank
attaches top priority to ensuring safety and security of
the finances that are being extended.
Risk Management for SIBL is performed at various
levels of the bank. By formulating policy regarding
profit rate, market, liquidity, currency, operational as
well as investment risk, SIBL manages its business
risks and aims to mitigate them.
Credit/Investment Risk
Investment risk is one of the major risks faced by
the bank which arises from the potential of failure of
a counter party to perform according to contractual
agreement with the bank. The factors involved here
may be the unwillingness of the counterparty as
well as adverse economic condition. To address the
risks, SIBL follows a guideline on Investment Risk
Management which has been prepared in the light
81
Social Islami Bank Ltd.
of broad guidelines provided by Bangladesh Bank
for the banking industry. The bank’s formulated
investment policies in compliance with regulatory
requirement covers investment assessment,
collateral requirements, risk grading and reporting,
documentation and legal formalities and procedures
along with up to date clean CIB report of the client.
The bank has incorporated a segregation of duty
among the officers/ executives who are involved
in investment activities to mitigate the risk to an
acceptable level. A separate Corporate Division has
been formed at Head Office, which is entrusted with
the duties of maintaining effective relationship with
the customer, marketing of investment products,
exploring new business opportunities etc. Moreover,
investment approval, administration, monitoring and
recovery function has been segregated. For this three
separate units have been formed within the credit
division namely Investment Risk Management unit
(IRMU), Investment Administration Unit (IAU) and
Investment Monitoring & Recovery Unit (IM&RU).
IRMU is entrusted with the duties of maintaining
assets quality, assessing risk to lending, sanctioning
investment, formulating policy and strategy for lending
operation etc.
Operational Risk
Bangladesh Bank defines operational risk as the
risk of loss resulting from inadequate or failed
internal processes, people and systems or from
external events. This operational risk also includes
legal risks but not strategic and reputational risks.
This can also arise from unexpected losses due to
physical catastrophe, technical failure and human
error in the operation of a bank, including fraud,
failure of management, internal process errors and
unforeseeable external events.
Internal Control and Compliance
Internal control facilitates systematic and orderly
flow of various operational activities within the
organization. To confront operational risk, SIBL follows
“Internal Control and Compliance guidelines” which is
approved by Bangladesh Bank. To ensure that sound
monitoring system is placed inside the organization,
Audit committee has been formed. Moreover, has
introduced the “Internal Department (ICCD)” at Head
Office staffed with some experienced senior Bankers
rest with the power and duties to train the employees
of the bank, give direction, minor, audit and establish
control on day to day operational procedures and
statutory and non-statutory compliances.
82
Money Laundering
Money laundering refers to a financial transaction
scheme that aims to conceal the identity, source, and
destination of illicitly-obtained money. To fight with
money laundering SIBL has framed an appropriate
Money Laundering Prevention Policy Guideline so
that it could be sufficient enough to protect the bank
from tribulations of money laundering. Besides that,
a Central Compliance Unit (CCU) has been formed
at Head Office in SIBL and a designated person has
been nominated to supply any information if required
as per Money Laundering Prevention Act 2002 and
Money Laundering Prevention circulars. Chief Anti
Money Laundering Compliance Officer (CAMALCO)
has been designated at Head Office and Branch Anti
Money Laundering Compliance Officers (BAMALCO)
has been nominated at branches. The second man of
the ninety four branches of SIBL have been complying
the responsibility for their respective branches as
Branch Anti Money Laundering Compliance Officers
(BAMALCO) as per the direction of Bangladesh Bank.
Market Risk
Market risk refers to the risk of losses in on and
off-balance sheet positions arising from flactuations
in market prices. It arises due to change in different
market variables like profit (interest) rate, exchange
rate, availability of liquidity with the lenders/
depositors, prices of securities in the stock exchange.
The risk arising from market risk factors such as
interest rates, foreign exchange rates, and equity
prices have been discussed below:
Rate of Return Risk
Investment profit rate risk is the potential impact
on the bank’s earnings and net asset values due to
changes in market interest rates. This can arise due
to mismatches between maturities of investment
and funds, imbalance between supply and demand
of fund for investment etc. Besides that, increase in
profit rate results in subsequent adjustment on the
deposit rates whereas the pricing of investments
cannot be done instantaneously giving rise to such
risk. Early repayment of investment, early deposit
encashment/withdrawals are additional factors of
such risk. The Asset Liability Committee (ALCO)
of SIBL is the primary body which looks after and
monitors investment profit rate structure. The
committee also evaluates any market risk that
arises from the regulatory pressure thus reducing
the profit rate. Moreover, ALCO committee is
always watchful to adverse movement of the
different market variables.
a n n u a l
Equity Financing Risk
Equity financing risk is defined as loss due to change
in market price of equity held by the bank. SIBL has
significant amount of investment in equity portfolio.
To measure, identify and reduce this kind of risk, the
bank practicing mark to market valuation of the share
investment portfolios which was reflected through the
bank’s balance sheet as provisions for diminution in
value of investment in shares. In FY 2013 the bank
has made fair value adjustment of BDT 182.90 million
on its quoted and unquoted equity investment.
Foreign Exchange Risk
Foreign-exchange risk refers to the potential for loss
from exposure to foreign exchange rate fluctuations.
This can be the current or prospective risk to earnings
and capital resulting from adverse movements
in currency exchange rates. Managing foreign
exchange risk involves prudently managing foreign
currency positions in order to control, within set
parameters, the impact of changes in exchange rates
on the financial position of the bank. Introduction of
market based exchange rate of Taka has resulted
in both trading opportunities and associated foreign
exchange volatility risk. SIBL adopted foreign
exchange risk manual and investment guideline of
Bangladesh Bank to identify and combat the foreign
exchange risk. International department of the bank
independently conducts the transactions relating
to foreign exchange is responsible for verification of
deals and passing entries. Besides that, the bank’s
Internal Control and Compliance Division performs
internal audit to supervise the activities of the
foreign exchange departments which measures the
effectiveness and efficiency of the division.
re p o r t
2 0 13
Liquidity Risk
Liquidity risk is the probability of loss arising from a
situation where there will not be enough cash and/or
cash equivalents to meet the needs of depositors and
borrowers, thus sale of illiquid assets will yield less
than their fair value. This also arises when the cushion
provided by the liquid assets are not sufficient enough
to meet maturing obligations. Liquidity risk is often
triggered by the consequences of other financial risks
such as credit risk, interest rate risk, foreign exchange
risk, etc. For instance, a large loan default or changes
in interest rate can adversely impact a bank’s liquidity
position. SIBL’s Asset Liability Committee (ALCO) is
entrusted with the responsibility of managing shortterm and long-term liquidity and ensuring adequate
liquidity at optimal funding cost. ALCO also reviews
liquidity requirement of the bank, the maturity of
assets and liabilities, deposit and lending pricing
strategy and the liquidity contingency plan.
Reputation risk
Reputation risk may arise from the possibility that
negative publicity regarding the bank and its business
practices, in the territory or elsewhere through related
entities, whether accurate or not, will adversely impact
the operations and position of the bank. Reputation
risk may also arise from an institution, or an affiliate,
being domiciled in a jurisdiction where the legal and
organizational framework for the regulation and
supervision of financial institutions is generally viewed
as failing to meet international standards for the
protection of consumers of financial services and for
the prevention of sheltering the proceeds of organized
crime. Reputation risks are very difficult to measure
but significantly important to manage since many new
banks have created the market more competitive ever
before.
Correspondent Banking Relationship
In order to facilitate the Foreign Exchange (FX),
Foreign Trade and Other Foreign Currency (FCY)
Business and Transactions, International Division of
the bank maintains affluent Correspondent Banking
Relationship with almost all the major and renowned
banks at home and abroad. International Division
comes forward to play its role and not only felicitates
foreign trade but also works for the development and
enhancement of foreign correspondence relationship.
The well experienced and dedicated team of the
division has established Standard Settlement
Instructions (SSI) including Drawing and Telegraphic
Transfer (TT) arrangements in all major currencies in
the locations of international business concentration.
The bank maintains 23 NOSTRO accounts in major
international currencies with reputed international
banks for the settlement of all the foreign currency
transactions of our customers. As a part of its
growth, International Division has been constantly
developing and improving the affiliation with foreign
correspondent banks on reciprocal basis.
83
Social Islami Bank Ltd.
Alternative Delivery Channel (ADC)
Social Islami Bank Limited believes in keeping abreast with latest technology in order to provide our customers
with convenient and time saving solutions which ensure banking transactions anytime and anywhere.
The Alternative Delivery Channel (ADC) Department of the bank is relentlessly working hard for the development
and integration of all technology based delivery channels for the banking products and services. The department
also plans for and ensures smooth operation of service delivery though ATM’s, CDMs, Web systems, SMS
and mobile phones etc. and enhance areas of delivery of customized services through these channels. The
Department ensures the operation of inland remittance service using all delivery channels and also ensures quick
and secure delivery of foreign remittance as well using as much delivery channels as necessary to make local and
foreign remittance payments attractive, useful and popular.
SIBL Cards
To provide advanced and enhanced banking facilities
to our valued customers SIBL has introduced both
Debit & Credit cards of VISA brand. At present, we
have the following categories of cards:
• VISAIsmaicDebitCards
• VISAIslamicCreditcards(LocalCard,Dual
Currency Card)
• VISAIslamicPrepaidCards
- Gift Card, Hajj Card, Travel Card
Our duel credit cards are now accepted worldwide
and cardholders have access to all ATMs & POS all
over the world having VISA Logo.
We have already setup and installed 19 ATMs of our
own in different locations of Bangladesh. Besides,
our cardholders also have access to more than 1000
ATMs all over the country as a member bank of
Q-cash. We are working to introduce POS at different
Merchant Outlets of the country for the satisfaction of
our valued customers.
Our continuous endeavor is to enhance service quality
and product diversification for ensuring customer
satisfaction all the times.
Centralized Remittance Processing
Unit (CRPU)
Social Islami Bank is in continuous effort to
encourage expatriate Bangladeshis living abroad
for remitting funds through banking channel. In this
regard the bank has established remittance drawing
arrangements with reputed exchange houses/ money
transfer companies around the world. At present the
84
bank is providing remittance service channeled through
Western Union, commonly known as the money transfer
giant having its presence in 240 countries with 3,50,000
agents around the world. SIBL has a very dedicated and
efficient team to source remittance business as well as
to ensure prompt & efficient services to the Customers
offering best competitive price for their hard earning Foreign
Currencies. Consequences upon different initiatives taken
by last one year, SIBL’s Foreign Remittance business
volume has triggered to Taka 6740 million in the year 2013.
SIBL handles both inward & outward Remittance products.
The outward Remittance includes FC Cash, FDD, FTT
& wire Transfer through SWIFT. The Inward Remittance
products are Over the Counter Payment (OTC), Account
Credit to all bank all branches, FTT, wire Transfer through
SWIFT etc. We have a strong Remittance Settlement
Network with different associate Banks, BEFTN & NGOs
which cover more than 9,000 remote locations besides
our 94 strategic Branch locations throughout the Country.
We have an admirable Remittance Tie-up with a good
number of world’s renowned Exchange Houses namely
Western Union Money Transfer, Xpress Money Services,
MoneyGram, Placid NK Corporation USA, UAE Exchange
SDN BHD, NEC Money Transfer, Purushottam Kanji
Exchange, KMB International Money Transfer, Aussie Forex,
Lotus Forex, Asia Express Exchange, Doha Exchange,
United Bank Ltd., Zenj Exchange Co. etc and different
Banks throughout the World to facilitate the Remittance
services to the beneficiaries. The bank is continuously
endeavoring to increase its remittance network and to
connect new destinations in places of concentration of
expatriate Bangladeshis. In this regard the bank shall
give due emphasis to Gulf Cooperation Countries (GCC)
in the Middle East and Saudi Arabia. The bank has also
established a special arrangement with Bangladesh Post
Office in order to increase its delivery channel and for the
a n n u a l
distribution of foreign remittance taking the advantage of
their wide network spread across the country. The devoted
and enthusiastic personnel of 94 branches of the bank have
ensured a privileged service for its customers. Besides, a
Centralized Remittance Processing Unit (CRPU) has been
set up to improvise and monitor the remittance service. The
centre is equipped with skilled and experienced work team
along with modern and sophisticated software.
Off Shore Banking
Social Islami Bank Limited is operating off-shore Banking
Units as a separate business unit under the rules and
guidelines of Bangladesh Bank. SIBL OBU has scored
a sizeable profit in the first year of its operation. We
hope these units will play a vital role in the foreign
trade business and facilitate the valued customers by
maximizing their benefit. In the year 2013, the OBU
has accumulated a Net Profit after Tax Taka 3.81 crore
against Taka 0.31 crore in 2012.
Centralized Clearing Unit (CCU)
Bangladesh Automated Clearing House (BACH) started
its LIVE Operation on the 7th October ‘ 2010 for
Bangladesh Automated Cheques Processing System
(BACPS) and 28th February, 2011 for Bangladesh
Electronic Fund Tranfer Network (BEFTN) in order to
make quick remittances in the whole Bangladesh. Since
its inception SIBL participated in BACH successfully with
the cooperation of Bangladesh Bank. For more efficient
and smooth functioning of the activities of BACH, SIBL
formed an independent unit in November 2011 under
the control of Head Office named as Centralized Clearing
re p o r t
2 0 13
Unit (CCU) where some dedicated, sincere and efficient
officers are working with an organizational zeal.
At present, all the 94 branches of SIBL have participated
in BACH by which the remote branches now collect
their cheques within 1 day and can make payment to
the customers very quickly. All branches of SIBL are
remitting the funds of customers by originating credit
entries to other banks through BEFTN and received
inward credit entries from other banks which are
crediting in the accounts of the customers in the same
day by the CCU through Online. Constant efforts are
continuing by the CCU, SIBL to boost all the financial
transactions under BACH.
RelatedPartyTransaction
Related party refers to the controlling entity (either directly
or commonly) or controlling individual or close group/
family member of such entity or individuals who have
substantial influencing power in management of a particular
organization. Whereas related party transactions refer to
those transactions with the entity / person as stated by way
of transfer of resources, services regardless of whether a
price is charged. Disclosure on related party transactions
with the Social Islami Bank Limited have been provided
in the audited accounts part in note no: 46 A. During the
year under review, four numbers of Investment accounts
were recorded under ‘related party transaction’ category
of whose total outstanding as on 31.12.2013 was Taka
53.63 million. Out of 4 transactions, three were related to
Director’s concern of whose value was Taka 3.63 million
and rest of the amount of Taka 50.00 million was related to
SIBL subsidiary company called SIBL Securities Limited.
Credit Rating
Emerging Credit Rating Limited (ECRL) has affirmed AA- (Pronounced as double A minus) long term credit rating
and ECRL- 2 short term credit rating to the Social Islami Bank Limited based on audited financials of 2013 and
other available information up to the date of rating declaration. The outlook on the rating is Stable. The ratings are
consistent with ECRL’s methodology for this type of company. ECRL considered financial performance, capital
base, asset quality, liquidity position, management experience and prospect of the industry while assigning the
rating. The assigned rating reflects the strengths of the Bank which is backed by significant growth in earnings,
deposits and investments, adequate capital coverage with high tier 1 capital, improved asset quality and well
controlled liquidity position.
Dateof
Declaration
Validtill
Rating
Action
LongTerm
Rating
ShortTerm
Rating
Outlook
May 29, 2013
May 28, 2014
Initial
AA-
ECRL-2
Stable
April 22, 2014
April 21, 2015
Surveillance
AA-
ECRL-2
Stable
85
Social Islami Bank Ltd.
Foreign Exchange Business
Foreign Exchange Business stood at Tk. 132374.70 million in 2013 against Tk. 126519.90 million in 2012 with
4.63% positive growth. The break-up of this foreign exchange business is as under:
(Fig in million Taka)
Particulars
2006
2007
2008
2009
2010
2011
2012
2013
Import
11791.00
13482.3
18343.80
22753.3
39459.50
68198.50
76985.60
73859.40
Export
10714.00
9961.60
12674.30
14433.20
21372.20
34975.00
42712.20
51775.30
Remittance
775.00
459.90
2341.10
1923.50
1099.40
5134.90
6822.10
6740.00
Total
23280.00
23903.80
33363.20
39110.00
61931.00 108308.30 126519.90 132374.70
InternationalTradeFinancing(Export&Import)
One of the core activities of the bank is to facilitate
International Trade through export and import financing.
Over the last few years the foreign trade financing of
the bank has gained a stable expansion. The bank has
been achieving significant growth in both export and
import financing despite/since global financial turmoil
and worldwide economic slowdown since 2008.
During the year, the foreign trade business of the bank
has recorded a significant growth of 4.63%. Export
business grew to Taka 51,775.30 million in 2013 which
is 21.22% percent higher than the export of Taka
42712.20 million in 2012. The bank has 13 Authorized
Dealer Branches well equipped with highly trained
professionals to meet different requirements of import
and export based clients. The bank was involved
in financing import business in the field of capital
machineries, industrial raw materials, food grains (rice,
wheat, sugar, dal, garlic, onion, spices), oil (soya bean,
palm, lubricant), motor vehicles, spare parts, garment
accessories, sports items, perfumery items, chemicals,
milk food etc. whereas the export was conspicuous in
the field of ready made garments. The bank has been
endeavoring to diversify its export financing in other
fields like leather, agricultural products, dry fish, PET
Flakes, spare parts of ships etc.
In order to facilitate trade finance, establishing
of ‘Central Trade processing Unit (CTPU)’ was a
timeliness decision and has changed the total process
of foreign exchange business through speed up the
service and business potential of SIBL. We have CTPU
facilities based in Dhaka and Chittagong.
Human Resource Development
Human Resource is the corner stone for accelerated
and sustained development of any organization.
The Bank recognizes the importance of skilled
Human Resources for overall growth of the Bank.
We believe that a congenial working environment
and human related policies generate team spirit and
promote a high level of integrity, loyalty, commitment
and devotion among the employees. This is being
materialized through a well-designed Human
Resource Management and development program.
Since its inception, the Bank has been trying to
ensure maximum output with minimum resources. So
quality manpower with good academic background is
being recruited in all levels of the Bank every year for
rendering quality services to its customers.
We have opened 10 new branches in the year 2013.
For this reason a good time was spent on recruitment
86
of experienced Bankers. Besides that, the recruitment
process of Trainee Officer for the Bank has been
initiated. The total manpower strength of the Bank
was 1802 as on 31.12.2013.
SIBL is an employee welfare-oriented organization.
For this reason the management of the Bank always
tries to sort out all possible ways it deems beneficial
to promote its employees’ professional skill and
efficiency. It has its own Training Institute, which
rendered useful training to 974 employees last year.
Eminent Bankers, scholars, and other resource
persons were invited to deliver lectures. Besides,
our personnel are sent to Bangladesh Bank Training
Academy, Bangladesh Institute of Bank Management,
Bangladesh Foreign Exchange Dealers Association,
the Central Shariah Board for Islamic Banks of
a n n u a l
re p o r t
2 0 13
Bangladesh and many other reputed institutions of the country for training on regular basis. 386 employees from
the Bank obtained training from outside including BIBM in 2013 compared to 226 in 2012. Subsequently, it is
seen that good performance is rendered by the employees who got trained. Besides that during the year under
review, Social Islam Bank Training Institute itself had conducted 9 (nine) foundation training courses for total 296
nos. of fresh Officers and 25 workshops on different burning issues related to banking industries where 678 nos.
different Officers and executives had participated.
SlNo.
Title
A.
01
02
03
B.
01
TrainingCourses
Foundation Course in Banking for PO
Foundation Course in Banking for AO
Training on Trade Finance
Total
Workshops
Workshop on “Import Management System, TM Form
Management System and C Form & Wage Earner’s Remittance
Reporting System – Online Reporting”
Workshop on “Mortgage Procedures of Immovable Properties”
Workshop on Documentation and mortgage Procedures
Workshop on Prevention of Money Laundering and
Combating Terrorist Financing
Workshop on IT Operation Risk and Security Management
Workshops to familiarize the Branch Officers of SIBL with
Bangladesh Automated Cheque Processing System (BACPS),
Bangladesh Electronic Fund Transfer Network (BEFTN)
under BACH (Bangladesh Automated Clearing House) along
with ELDORADO Software.
Workshop on “Guidelines, Operations and (OBU) in Bangladesh
Prospect of Off-shore Banking Unit
Workshop on “Various Issues of Investment”
Workshop on “Workshop on Basel-II and
SRP-SREP Dialogue on ICAAP”
Total
GrandTotal(A+B)
02
03
04
05
06
07
08
09
Number
TotalParticipants
2
4
3
9
64
126
106
296
1
28
2
2
3
95
81
160
1
37
2
88
1
34
1
2
55
100
15
24
678
974
Management of the bank has emphasized and specially focused on the development of employees and to bring
out the persons’ insider instinct into light, SIBL Training Institute (SIBL TI) has got restructured aiming to create
leaders.
In order to evaluate the level of efficiency, improve the healthy competition among the employees and in a way to
generate motivation for the employees, Employees’ Performance Evaluation and Key Performance Indicator (KPI)
have been introduced from time to time. Upon the evaluation, the employees are motivated and awarded with
promotion, accelerated promotion and other benefits. In addition to that, various types of drives are taken to keep
and upgrade the standard of the Bank.
Human Resource Accounting
Human Resource Accounting is the process of identifying and reporting the Investments made in the Human
Resources of an organization that are presently not accounted for in the conventional accounting practices. Social
Islami Bank Limited formally does not practice Human Resources Accounting but regularly works out and looks
into some important areas for mathematical and co-relational understanding on the main business factors. Given
below is the considerable index to the management on which human related decisions are taken:
87
Social Islami Bank Ltd.
Description
Yr-2013
Yr-2012
Yr-2011
Yr-2010
Yr-2009
Yr-2008
Total number of employee
1802
1625
1375
1252
950
750
Total number of Branches
94
86
76
64
52
28
Employee per branch (nos)
19
19
18
20
18
27
Deposit per employee (million Tk)
56.52
57.60
48.52
35.82
33.25
32.13
Investment per employee ( million Tk)
47.65
46.78
39.21
29.30
27.98
26.60
Operating profit per employee (million Tk)
1.62
2.23
2.01
1.31
1.12
1.05
Salaries & Allowances per employee ( million Tk)
0.83
0.67
0.66
0.51
0.43
0.44
51.47%
30.09%
32.66%
38.90%
37.39%
41.96%
Salaries & Allowances as percentage of
Operating profit
Employee Benefits
Social Islami Bank Limited is very keen to establish and retain a very congenial working atmosphere. The bank
has a competitive & unique pay structure for its employees and always keep track on the necessity of revision on
the passage of time that matches with the living standards of the employees in one hand and competitive with
other banks on the other hand. At present, SIBL offering three types of long term employee benefits of which
Provident Fund and Gratuity Fund are approved by the Revenue Board and are funded liability for the bank. As
on 31.12.2013, sufficient provisions have been provided in the financial statements of the bank for these two
employee benefit funds as per International Accounting Standard 19: Accounting for Employee Benefit. Apart from
these two, another welfare fund called “Social Insurance Fund’ has been maintaining solely for the purpose of
welfare of the employees of the bank. All these funds are governed and maintained by separate trustee board and
funds are investing in very safe mode. Given below is the position of the employee’s benefit funds:
Fig in million Taka
Particulars
2013
2012
Social Islami Bank Profit Dependent Employee’s Provident Fund
506.93
383.64
Social Islami Bank Employee’s Gratuity Fund
294.26
221.37
47.64
37.70
848.83
642.71
SIBL Social Insurance
Total
The nature of the Provident fund is 10% contributory from the both side of the employee and employer. The
eligibility of such Provident fund is 5 years whereas the eligibility of the gratuity fund to the employee is equivalent
to 1 basic pay for 5 years services & equivalent to 2 basic pay for 7 years services.
Safety Measures
Social Islami Bank Limited provides world class office
environment to its employees. Every branch of SIBL
is homogenously decorated with the provisions of
air condition, most modern safety office equipments
and machines and well structured office building
facilitate by sewerage and electricity connection and
security measures like 24/7 close circuit TV camera,
well trained security and gunmen, fire extinguishers
etc. Design of Office / Branch is considered on the
basis of sufficient free space, safe sewerage gas
and electricity connections etc. SIBL has the finest
88
corporate Head Office at its own Office premises of
90/1 Motijheel Commercial Area, Dhaka, City Center
level 19, 20, 21 & 22 measuring areas of 5,3153 sft.
Featured by most modern facilities. Fire drill programs
are organized by the bank at different location time to
time. As on date of report, the bank has appointed
one full time doctor for the employees of Head
Office and Dhaka city area. Moreover, the Board of
Directors has already approved a Group Insurance
policy including hospitalization benefit for the general
emplyees of the bank.
a n n u a l
re p o r t
2 0 13
InformationandCommunicationTechnology
The Bank is pioneer amongst the Islami Banks to
introduce online banking facilities for its customers. Now
a days, ICT plays an important role towards processing
and management of bulk amount of data, facts and
figures. Upon introduction of Islamic Banking Version of
Integrated ‘Ababil’ software, SIBL has been providing
IT oriented finest service to its valued clients. Ababil
is a core and centralized banking software to provide
the clients easy and readymade service as and when
required. This software has enabled the bank to reach to
our clients to their doorsteps by smooth and easy online
banking service like E-Banking. Our customers are able
to bank through internet and do their banking activities
faster and efficiently. Our accountability to our clients are
fair enough to build a relationship of trust.
Any Branch Banking
Online transaction facilitates ‘Any Branch Banking’ to
all customers meaning, customer is able to deposit or
withdraw money from any Branch of SIBL nationwide. Any
Branch Banking is a facility for our customers to operate
their accounts from any of our network branches.
Internet Banking
Internet banking is a success for Social Islami Bank Limited.
Internet banking refers to banking operations carried out
between banks and their clients through Internet. Internet
banking helps in expediting banking operations, reducing
the cost and ensuring that customer can utilize various
banking services from their living room or even while
traveling thousands of miles away from their home. The
process of Internet banking begins with every customer
being given a unique user name and password by the
bank. The customer can log on to the bank’s web site with
the user name and password to access to his or her bank
account sibl@ibank with a view to provide web-based
Internet Banking services to its customer from anywhere
anytime. Under this service, customers can check their A/c
balance, print A/c statement, place cheque book request,
inquire cheque status, transfer fund with allied accounts
and also pay utility bills. SIBL has stepped forward in
boundary less banking services, any where, any time in
which specially valued expatriate Bangladeshi wage earners
living and working in different countries can now check their
accounts with SIBL and perform various transactions which
shall ease their anxieties. SIBL is promising to become the
best technology friendly bank in the country and shall use
all modern banking channels to deliver most wonderful and
satisfying services to its valued customers.
SMS Banking
SMS Banking is a mobile technology that allows customer
to request and receive banking information from bank
on customer mobile phone via Short Message Service
(SMS). Individuals or corporate bodies can manage their
Bank Accounts, check their account balances and last
few transactions (Mini Statement) using their mobile
phones. Customers can also have SMS alert/ notification
for any financial transaction done on their account as well
as activate their Debit / Credit Card through SMS. The
Bank has recently signed Memorandum of Understanding
(MOU) with Semicon Private Limited to provide SMS
Banking services to its customers.
IP Phone
“Connecting People with a Single Click”
SIBL believes that modern communication devices are
the best option to minimize the communication cost and
allow the bank to build effective relationship with its clients
and staffs. The bank has recently installed IP PHONE
solution which simplifies voice & video communications
at branches and at head office level for all. These
solutions have minimized the communication cost in one
hand and surprisingly enhanced the means of effective
communication system of the bank on the other hand.
ATMNetwork
SIBL’s customers have been enjoying 24/7 service
through ATMs located around the country. The Bank has
undertaken some programs to expand its ATM network
through procurement of more proprietary ATMs and joining
hands with the common platforms of ATM network.
Online Data Centre (DC) & Disaster
recovery (DR)
SIBL has the largest Data centre running with secured AIX
operating system. All data are stored in this data centre and
branches get uploaded with this data center automatically
from remote site. The bank has established a separate
Disaster Recovery (DR) Center following the Bangladesh
Bank guideline to protect the bank’s information properties.
Data Security
A 24 hours dedicated surveillance team is working to ensure
the data security of the bank. Maximum security layers are
in place while transacting in Core banking System, Internet
Banking (IB) transactions, SMS banking etc.
89
Social Islami Bank Ltd.
ManagingInformationTechnologyRisk
IT risk is the business risk associated with the use,
ownership, operation, involvement, influence and adoption
of IT within an enterprise. Risks surrounding Information
Technology, such as network failure, lack of skills, hacking
and viruses and poor system integration have the
potential to have a negative impact on an organization.
To retrieve data in any crucial moment, the bank has
established a Disaster Recovery Center (DR Center) at
Uttara, Dhaka as per Bangladesh Bank guidelines. SIBL
has the largest Data centre in banking sector running with
secured AIX operating system. All the data are stored in
this data centre & branches are also uploaded the data
automatically. Here another replica of live system, located
in distant premises, with same capacity like Production
system, is running 365 x 24 continuously without any
pause. SIBL, always endeavors to improve the service
quality all of its departments and branches to excel the
optimum output by ensuring customer satisfaction.
Green Banking Support
SIBL is concerned to implement the concept of Green
Banking in its day to day banking business. The bank has
introduced e statement which has remarkably reduced
the usage of hard copy. This statement is generated by
the system and sent to the customer automatically at
specified interval with full authentication and security.
Launching of E-statement is a process to support the
concept of Go-Green to save the natural environment.
SIBL is using the most energy efficient IT equipments like
IBM Rack Server which consumes less power, less space
with maximum capacity. Most of the documents of the
banks are converted into softcopy.
Non–Formal Sector
As a corporate objective, SIBL has defined its operation
in three different sectors i.e. Formal, Non-formal &
Voluntary. Formal Sector deals in general commercial
activities as a scheduled Bank, Non-formal Sector
aims at “Empowering Family”- by creating investment
opportunities to the mass community through its (i)
Family Empowerment Micro-Finance Program (ii) Family
Empowerment Micro-Enterprise Program & (iii) Small
and Medium Enterprise (SME) Program. Voluntary
sector deals in Cash Waqf Certificate Scheme, Mosque
and Waqf Properties Development Program and CSR
activities on voluntary basis.
We have been focusing on the financial inclusion by
expanding the volume of investment in Micro, SME and
Agricultural sector keeping in view the green banking
initiatives of Bangladesh Bank.
MICRO-FINANCE,MICROENTERPRISEANDSME
PROGRAMOFSOCIALISLAMIBANKLIMITED(SIBL)
Social Islami Bank Limited (SIBL) has been successfully
operating (i) Family Empowerment Micro-Finance
Program, (ii) Family Empowerment Micro-Enterprise
Program & (iii) Small and Medium Enterprises (SMEs)
Program under Non-Formal Banking Sector with a view
to unlock the potentials of the missing middle, who
are not properly addressed by the Corporate Banking
Sector.
Family Empowerment Micro-Finance Program is
a group based lending providing to the poor segment
of the society who are not able to provide collateral
security. Maximum ceiling of investment in MicroFinance Program is Tk. 25.00 thousand repayable on
weekly installment basis.
Family Empowerment Micro-Enterprise Program
is best tailored for the small traders, shop-keepers,
manufacturers where ceiling of investment is from Tk.
30.00 thousand to Tk. 2.00 lac. Investment under
Micro-Enterprise Program is collateral free rendering
for maximum 3 years repayable on monthly installment
basis.
SIBL has been able to create job opportunities among
the significant Micro & SME borrowers. Many of
them have been able to establish them as successful
entrepreneurs.
SIBL has successfully implemented Micro-Finance
Program with the support from ILO to eliminate child
labor from Garment Sector in Bangladesh. SIBL and
UNICEF have also jointly implemented Micro-Finance
Program to extend investment facilities among the
parents /guardians of the former garment child workers.
SIBL & JOBS (a USAID project) with a collaborative
effort has also created easy access to business capital
for the Small & Medium Enterprises (SMEs). At SIBL
there is a provision for up gradation of Micro-Finance
(figure in crore)
Particulars
SME Outstanding
90
31/12/2010
31/12/2011
31/12/2012
31/12/2013
170.35
437.00
686.88
716.43
a n n u a l
graduates into Micro-Enterprise & SME Program and
successful SME graduates have opportunity to get
investment facilities from Formal Sector- as corporate
clients.
SME has emerged as the “Engine of Growth” in the
economy of Bangladesh. It contributed manifold
including industrial growth, resource generation, poverty
alleviation, employment generation and value addition.
SME & the Nation are now growing together.
Likely, SME is considered as one of the focus areas of
operation in SIBL. SMEs clients are being entertained
by all of our 94 branches situated both in rural and
urban areas. Total investment portfolio of the bank has
been segregated into 3 major aspects e.g Corporate,
SME & Retail. Such segregation has been made in line
with the definition and Guidelines of Bangladesh Bank.
SME operation of the Bank is in progress in a structured
800
2 0 13
manner. SME & Agricultural Finance Division has been
functioning in three separate units e.g SME Approval
Unit, SME Administration Unit and SME Monitoring &
Recovery unit. These units have been performing with
specific Terms of Reference (TOR).
In line with the Prudential Guidelines on SME financing
of Bangladesh Bank, SIBL has designed an array of
SME products for both small & medium segment.
We have been offering both Revolving & Term
Investment facilities to the SME clients. Small
Entrepreneurs, Agri. Clients and Women Entrepreneurs
are properly addressed by the diversified products
designed for this purpose.
SME portfolio of the bank has been increasing
significantly, which is shown in the following table and
graph.
686.88
700
re p o r t
716.43
600
500
437
400
300
200
100
0
2011
2012
2013
SME Outstanding (figure in crore)
SIBL as part of its social commitment will keep on patronizing the SME clients to fulfill their diversified needs.
Voluntary Sector: (Cash
Waqf Program)
In the Voluntary Sector, SIBL has introduced Cash
Waqf Program, a new product for the first time in the
history of Banking.
This scheme has been well received by the public in
general for its unique features. SIBL as a pioneer of
this innovative financial product has received both
Local & International accreditation. Meanwhile, the
Cash Waqf Program has been replicated by some
local banks including Islami Bank Bangladesh Limited,
Jamuna Bank Limited, Shahjalal Islami Bank Limited
& EXIM Bank Limited. As a result of successful
replication, many people are being benefited by the
beauty of Cash Waqf Program.
By opening a Cash Waqf Deposit A/C some one
can get an opportunity to do welfare to the mankind
through Sadake-Jariah. SIBL urges to all religious &
affluent persons of the society to come forward to
mobilize Cash Waqf Deposit so that the profit may be
utilized for the well being of mankind.
91
Social Islami Bank Ltd.
Modus Operandi of Cash Waqf
program
• Waqifshallalsohavetherighttogivestanding
instruction to the bank for regular realization of cash
waqf at a rate specified by him/her from any other
A/C maintained with SIBL.
• Cashwaqfsshallbeacceptedasendowmentin
conformity with the Shariah. Bank will manage the
waqf on behalf of the waqif.
• Cashwaqfshallbeacceptedinspecifiedendowment
Receipt Voucher and a Certificate for the entire
amount shall be issued as and when the declared
amount is built.
• Waqfsaredoneinperpetuityandtheaccountshallbe
opened in the title given by the waqif.
• The32purposesunder4majorfieldslike (1) Family
Rehabilitation (2) Education & Culture (3) Health
& Sanitation (4) Social Utility and (5) Others are
considered as General Guidelines for distribution of
profit of Cash waqf A/Cs. In the case, where only
fields(s) for distribution of profit are mentioned without
specifying the name of the beneficiary(s) whether
individual(s) or institution(s), those Cash Waqf will
be treated as General Cash Waqf and the profit of
those A/Cs will be spent for welfare of mankind in the
field of (1) Family Rehabilitation (2) Education &
Culture (3) Health & Sanitation (4) Social Utility and
(5) Others. On the other hand, Waqif may choose
distribution of the profit to any specific individual(s)/
institution(s). Those A/Cs will be treated as Specific
Cash Waqf, the profit of those A/Cs will be sent to
the beneficiary(s) as specified by the Waqif.
• TheamountdepositedintheCashWaqfA/Cswillbe
invested as per Bank’s own decision in conformity
with the Shariah and the Cash Waqf amount will earn
profit at the highest rate offered by the Bank from time
to time.
• Thewaqfamountwillremainintactandonlytheprofit
amount will be spent for the purpose(s) specified by
the Waqif. Unspent profit amount will automatically be
added to waqf amount and earn profit to be grown
over the time. No cheque book will be issued in this
account.
• WaqifmayalsoinstructtheBanktospendtheentire
profit for the purpose specified by him/her.
• Waqifhastheopportunitytocreatecashwaqfat
a time. Otherwise he/she may declare the amount
he/she intends to build up and may start with a
minimum deposit of Tk. 1,000/= (one thousand) only
(or equivalent foreign currency). The subsequent
deposits shall also be made in hundred or in multiple
of hundred Takas. However, General Cash Waqf A/
Cs (where name of beneficiary whether Individual(s)
or Institution(s) are not mentioned) may be opened
by depositing a minimum sum of Tk. 1,000/= only.
Specific Cash Waqf A/Cs (where name of beneficiary
whether Individual(s) or Institution(s) are mentioned) by
depositing a minimum sum of Tk. 5,000/= & above.
92
• AccountsofCashWaqfsaremaintainedinaseparate
ledger and necessary charges as per rules may be
deducted therefrom.
• IncaseofanychangeofaddressoftheWaqifor
beneficiary, must be informed by the Waqif to the
Bank immediately.
• Bankhoweverreservestherighttoregrettoopenany
Cash Waqf Account.
• TherulesofCashWaqfAccountaresubjectto
amendment in conformity with the Shariah at any time
by the Bank.
Mentionable, we have recorded an amount of Tk.
8.45 crore as on 31st December, 2013 in Cash
Waqf Fund which was Tk.6.89crore in the previous
year, registering a growth of 22.64% than the
preceding year.
Voluntary Sector: Corporate
Social Responsibility
SIBL has been responding spontaneously to its social
commitment. As part of Corporate Social Responsibility
(CSR), welfare activities of Social Islami Bank Limited
(SIBL) are being carried out mainly from (1) Profit
of Cash Waqf Fund (2) Compensation Fund (3)
Doubtful Income and (4) Zakat Fund.
SIBL is a pioneer of Cash Waqf Program which
has meanwhile achieved both local & international
accreditation for its unique welfare approach. Cash
Waqf Program of the Bank paved the way of doing
welfare of mankind in various sectors such as (i)
Family Rehabilitation (ii) Education & Culture (iii)
Health & Sanitation and (iv) Social Utility and
others in conformity with Shariah. Cash Waqf is
broadly categorized as a) General Cash Waqf & b)
Specific Cash Waqf. Where the Waqif (Donor) doesn’t
mention the name of beneficiary (may be individual or
organization) for receiving the profit of Cash Waqf fund,
we call those General Cash Waqf. In case of Specific
Cash Waqf, the Waqif (Donor) specify the name of
a n n u a l
specific beneficiary (may be individual or organization).
Profit of General Cash Waqf A/C are being sent to FAD,
HO annually & profit of Specific Cash Waqf A/C are
being sent to the specific beneficiary as per instruction
of the Waqif once annually.
Social Islami Bank Ltd. is extending financial help to
different orphanages, schools, madrashas, social
organizations & individuals who are suffering from fatal
diseases like cancer, kidney failure, heart diseases
etc. from the fund which are being accumulated from
the profit of Cash Waqf Fund, Compensation Fund,
Doubtful Income and Zakat Fund.
Bangladesh Bank vide DOS Circular No. 01 dated
1 June, 2008 titled “Mainstreaming Corporate
Social Responsibility (CSR) in banks and financial
institutions” gave a comprehensive guideline on
CSR. We have been submitting quarterly CSR report
to Bangladesh Bank as per format provided by them.
The format has following dimensions:
re p o r t
(i) Financial Inclusion
2 0 13
: (In the form of financing in
Agriculture, SME, Women
Entrepreneur, Renewable
Energy Finance,
Solar Irrigation etc.)
(ii) Donation to the
individuals, covering : Education, Health,
Disaster Management
(Family Rehabilitation),
Environment (Social Utility),
Sports, Art & Culture,
Others etc.
(iii) Donation to NGO’s : For supporting such
welfare activities
SIBL has contributed a sum of totalTk.53.17
million in the field of Health, Education, Disaster
Management (Family Rehabilitation), and Sports, Art
& Culture, Environment (Social Utility) & others during
year 2013, which are furnished hereunder:
(Figure in Taka)
Sectors
(Jan–Jun’13)
(Jul–Dec’13)
Total
Contribution
Health
1,695,000
2,079,624
3,774,624
Education
1,940,680
1,021,680
2,962,360
2,029,806
20,086,436
22,116,242
19,006,060
87,780
19,093,840
727,272
1,952,394
2,679,666
1,347,500
1,195,000
2,542,500
-
-
-
26,746,318
26,422,914
53,169,232
Disaster Management
CSR
(Family Rehabilitation)
Activities
Sports
of SIBL
Art & Culture
Environment
(Social Utility)
Others
Total
Sector-wise CSR Contribution (%)
7
5
Sports
6
5
Art & Culture
41
36
Disaster Management (Family Rehabilitation)
Environment (Social Utility)
Health
Education
Others
93
Social Islami Bank Ltd.
CSR Activities of the Bank During 2013 at a glance :
Sl. No.
Events
Particulars
1
“Bijoy theke Bijoye” arranged by Bangladesh Army on celebration of
Independence Day
SIBL has sponsored an amount of Tk.11.50 lac to arrange a
program titled “Bijoy theke Bijoye” organized by Bangladesh
Army in the occasion of celebrating Independence Day.
2
Scholarship among the brilliant
students of SSC & HSC examination
SIBL has awarded scholarship for total Tk.2.28 lac along with a
certificate & medal among 17 numbers of meritorious students of
SIBL family who have scored Golden GPA 5 & GPA 5 in SSC &
HSC examination.
3
Donation for construction of School
building of Fatickchari Girls Pilot
School, Chittagong
SIBL has donated Tk.5.00 lac for construction of a school building of Fatickchari Girls Pilot School, Chittagong on 01.04.2013.
4
Student Scholarship
SIBL has awarded scholarship for Tk.25.67 lac among the poor
& meritorious students.
5
Donation for treatment
SIBL has made donation for Tk.36.82 lac among poor &
distressed for bearing expenditure for treatment.
6
Promoting Art & Culture
SIBL has made donation for Tk.23.14 lac in this field.
7
Sponsoring a Sculpture titled “Rantadip” in front of Prime Ministers’ Office
SIBL has made sponsor for Tk.29.09 lac for a Sculpture titled
“Rantadip” in front of Prime Minister’s Office.
8
Sponsoring a Guava Garden in Public
Order Management (POM) Unit at Mirpur, Dhaka Metropolitan Police (DMP)
SIBL has made donation for Tk.2.00 lac for making a Guava
Garden of Public Order Management (POM) Unit at Mirpur of
Dhaka Metropolitan Police (DMP).
9
Decoration to Professor Mojaffar
Ahmed Chowdhury Auditorium, Dhaka
University, Dhaka
SIBL has sponsored Tk.24.38 lac for decoration of Professor
Mojaffar Ahmed Chowdhury Auditorium, Faculty of Social
Science, Dhaka University, Dhaka on 06.03.2013.
10
Contribution to develop sports in
Bangladesh
SIBL has co-sponsored in “BPL T20 Season-2” with an amount of
Tk.184.00 lac held from February 12, 2013 to February 29, 2013.
SIBL has sponsored an amount of Tk.6.06 lac in “Friendship
Cricket Tournament - 2013” organised by Chittagong Club.
11
12
EyeCataractTreatmentCampat
Bishnupur, Chandpur, Chowmohoni,
Noakhali & Chowgacha, Jessore
SIBL has organized Eye Camps among poor & distressed in
Bishnupur, Chandpur, Chowmohoni, Noakhali & Chowgacha,
Jessore costing Tk.4.54 lac.
Blood Donation Program on the eve of
18th Anniversary of SIBL
SIBL has organised a blood donation program titled ÒAvgiv
Avgv‡`i e¨vsK‡K fv‡jvevwm Ges Avgiv Avgv‡`i †`k‡KI fv‡jvevwm,
cÖwZôvevwl©Kxi ¯§viK wn‡m‡e †`‡ki AvZ©-cxwoZ gvby‡li Rb¨ i³`vbÓ on the
eve of 18th Anniversary of the Bank at Principal Branch, Dhaka
on 21.11.2013.
94
13
Distribution of blankets among the poor
& distressed people
SIBL has distributed 26,000 pieces of blankets among the poor
& distressed people during this year incurring an amount of
Tk.70.20 lac.
14
Distribution of Sharee & Lungi among
the poor and distressed
SIBL has distributed 29,000 pieces of Sharee & 15,700 pieces of
Lungi amounting to Tk. 182.40 lac among the poor and distressed
people of different parts of the country during the month of Holy
Ramadan-2013.
15
Financial Support to a family member
of BDR Carnage
SIBL has made donation for Tk.4.80 lac (as yearly contribution)
to Mrs. Shahapar Khan Sampa, family member Martyr Major
Mostafa Haider, a victim of BDR Carnage.
16
Financial Support to the family member
of Rana Plaza
SIBL has made donation for Tk.2.00 crore to the victim family
members of Rana Plaza.
a n n u a l
re p o r t
2 0 13
On going CSR activities of the Bank
Sl. No.
1
2
Events
Particulars
Banglar Pathshala
(School for underprivileged
supported by SIBL)
children
URECA
(School for underprivileged
supported by SIBL)
children
SIBL has been sponsoring the education program of Banglar
Pathshala (School for underprivileged children). It is mentionable
that 04 (four) schools of Banglar Pathshala situated at Mirpur,
Mohammadpur, Karail & Doyagonj are being sponsored by SIBL
involving total Tk.8.90 lac being paid on monthly and yearly basis.
SIBL has been sponsoring the education program of URECA
(School for underprivileged children). It is mentionable that 0
3(three) schools of URECA situated at Uttara, Sector 8 & 9 are
being sponsored by SIBL involving total Tk.9.00 lac being paid on
monthly and yearly basis.
A short list of our Beneficiaries
• MuktijuddhaJadughar
• BangabanduMemorialTrust
• CenterforRehabilitationofthe
Paralyzed (CRP)
• BangladeshAssociationof
Banks (BAB)
• AssociationofBankersof
Bangladesh (ABB)
• FederationofBangladesh
Chamber of Commerce &
Industries(FBCCI)
• DhakaChamberofCommerce&
Industries (DCCI)
• MetropolitanChamberof
Commerce & Industries (MCCI)
• BangladeshCricketBoard(BCB)
• SightSaversInternational
• KidneyFoundation
• BangladeshCancerFoundation
Hospital
• JatiyaAndoKalyanSamity,Comilla
• MosabbirCancerCareCentre
• DhakaCommunityHospital
• EastWestMedicalCollegeHospital,
Dhaka
• BanglarPathshala
(School for the slum children)
• URECA (School for under privileged
children supported by SIBL)
• BishyabidyalayaCAMPUS
• ChandpurDiebeticSamity
• KailakuriHealthcareProject,
Modhupur, Tangail
• Writer’sFoundation
SIBL intends to continue with its welfare activities as part of its Corporate Social Responsibility (CSR).
This Report also states
(a) The financial statements prepared as on
31.12.2013 by the Bank, presented fairly its state
of affairs, the results of its operation, cash flows
and changes in equity;
(b) There is no significant variance occurred between
quarterly financial performances and Annual
FinancialPerformancesof2013;
(c) During the year 2013, an amount of Taka 14.20
lacs. has been paid to the Directors of Social
IslamiBankLimitedasdirector’sremuneration
including Independent Director;
(d) The Bank has been maintained proper books of
accounts;
(e) Appropriate accounting policies have been
consistently applied in preparation and presentation
of the financial statements and that the accounting
estimates are based on reasonable and prudent
judgment;
(f) International Accounting Standards (IAS) Bangladesh
AccountingStandards(BAS)/InternationalFinancial
ReportingStandards(IFRS)/BangladeshFinancial
ReportingStandards(BFRS),asapplicablein
Bangladesh, have been followed in preparation of the
financial statements and any departure there-from
has been adequately disclosed;
(g) The system of internal control is sound in design and
has been effectively implemented and monitored; and
(h) Management has reasonable ground to believe that
therearenosignificantdoubtsupontheBank’sability
to continue as a going concern.
95
Social Islami Bank Ltd.
Operating Result & Profit:
Total Operating Income of the Bank as on 31st December 2013 stood at Tk. 5502.61 million against Tk. 5515.09 million of the
preceding year. The Bank made an operating profit of Tk. 2924.55 million in 2013 against Tk. 3617.82 million of 2012.
A summary of operating result of the Bank as on 31st December 2013 vis-à-vis the position as on 31.12.2012 is shown below:
(Taka in Million)
Particulars
Income on Investment
2013
2012
Growth Rate
13629.42
11319.01
20.41%
Profit paid to the Depositors
9706.87
7541.68
28.71%
Net Investment Income
3922.55
3777.33
3.84%
Commission, Exchange & Other Income
1580.06
1737.76
-9.07%
Total Operating Income
5502.61
5515.09
-.23%
Operating Expenses
2578.06
1897.27
35.88%
Profit before Provision
2924.55
3617.82
-19.16%
899.89
869.93
3.44%
2024.66
2747.89
-26.32%
Provision against Investment & Others
Profit before Tax
Particulars
2013
2012
i.
Net Investment Income Margin (NIIM)
3.68%
3.99%
ii.
Return on Assets (ROA)
1.67%
2.75%
iii
Return on Equity (ROE)
11.01%
14.15%
v.
Earning per Share [restated for the year 2012]
Tk. 1.74
Tk. 2.05
Profitability Ratio
During the year under review- high deposit cost,
increase in salary and allowances and depreciation on
fixed assets and other operating expenses affected
the overall performance of the Bank. Besides that,
Classified along with Block (rescheduled) Investment
leads the bank in income blocking that resulted
investment earnings in the year 2013 was not up to
the mark. To bring the banking operation in streamline,
management paying extra attention in recovery of bad
investments and all investments has brought under
the close monitoring system. Management has also
96
undertaken some programs to protect the banks
assets / investment from any future deflect.
• Duringtheperiodunderreport,therewasnoextra
ordinary gain or loss has recorded.
• The Board of Directors has recommended 12%
cash dividend for the year 2013 in its 308th Board
meeting held on 31.03.2014.
a n n u a l
re p o r t
2 0 13
Corporate Governance
In recent times, corporate governance has been
considered as most essential aspect for efficient
management of a business house. It is considered
to be a set of internal rules and procedures that
ensure the accountability of the Directors and Top
Management towards the stakeholders. SIBL gives
much emphasis on the corporate governance in
promoting a sound management. The objective of the
Bank is to comply with all regulatory requirements,
ensure equitable treatment of all stakeholders. It
confirms full and fair disclosure of financial and other
material information and show respect for norms of
business ethics and social responsibility. The Board
of Directors, Executive Committee, Audit Committee,
Risk Management Committee, MANCOM and
other Committees of the management perform their
respective tasks with accountability and transparency.
Besides, to support and enhance the practice of
corporate governance, the Audit Committee of the
Bank was duly constituted by the Board of Directors
with a view to evaluates the activities of the Bank
as per guidelines laid down in the BRPD Circular
Number 12 dated December 23, 2002 of Bangladesh
Bank. As per directives of Bangladesh Securities &
Exchange Commission (BSEC) on 7th August 2012,
to strengthen the corporate governance practice,
one of the most important and interesting part of the
corporate governance is inclusion of at least 1/5th
Independent Director of the total number of Board
of Directors in the listed companies who will be
knowledgeable individual with integrity and is able
to ensure compliance with financial, regulatory and
corporate laws and can make meaningful contribution
to business. SIBL is always keen to comply with and
focus highly the corporate governance issues and
accordingly included 1/5th number of Independent
Directors of its total number of Board of Directors.
Compliance Status of Corporate Governance Guidelines issued by Bangladesh Securities & Exchange
Commission (BSEC) under notification no: SEC/CMRRCD/2006-158/134/Admin/44 dated 7th August 2012
under condition no: 1.5 (xviii), (xx), (xxi a), (xxi b), (xxi c) & (xxi d):
Compliance of condition 1.5 (xviii): Key operating and financial data for the last five years are summarized in the
preface of this report.
Compliance of condition 1.5 (xx): Board Meeting held during the year 2013 and attended by each Director.
Sl.
No.
Composition of the Board
No. of Board Meetings in 2013
Held
Attended
Attendence fee
1.
Major (Retd.) Dr. Md. Rezaul Haque, Chairman
21
21
105,000
2.
Mr. Md. Sayedur Rahman, Vice Chairman
21
21
105,000
3.
Mr. Mohammad Azam, Vice Chairman
21
20
100,000
4.
Mr. Abdul Awal Patwary, Director
21
18
90,000
5.
Mr. Md. Anisul Hoque, Director
[RepresentativeofHamdardLaboratories(Waqf)Bangladesh]
21
20
100,000
6.
Alhaj Nasiruddin, Director
21
19
95,000
7.
Alhaj Sk. Mohammad Rabban Ali, Director
21
18
90,000
8.
Mr.A.JabbarMollah,Director
21
17
85,000
9.
Mr. Md. Abdur Rahman, Independent Director
21
17
85,000
10.
Mr. Abdul Mohit, Independent Director
21
11
55,000
97
Social Islami Bank Ltd.
Compliance of condition 1.5 (xxi): Pattern of shareholding
Statement in compliance with condition 1.5 (xxi a): Parent / Subsidiary /Associated Companies and other related parties: NIL
Statement in compliance with Condition 1.5 (xxi b) (i):
Shareholding Position of Directors of SIBL with their Spouse and Minor Children as on 31.12.2013
Sl.
Name of Directors
Relation
No. of Share(s) held
1
Major (Retd.) Dr. Md. Rezaul Haque
Mrs.Dr.LilyAmin
2
Mr. Md. Sayedur Rahman
Vice Chairman
14,067,554
3
Mr. Mohammad Azam
Vice Chairman
14,066,904
Mr. Abdul Awal Patwary
Mrs.FatemaBegum
Director
Wife(Sponsor)
14,073,417
1,234,813
Chairman
Wife
14,067,491
289,210
Total
4
14,356,701
Total
5
Mr. Md. Anisul Hoque [Representative of
HamdardLaboratories(Waqf)BD].
6
Alhaj Nasiruddin
Mrs.MonowaraShamim
15,308,230
Director
14,066,727
Director
Wife
14,069,676
9,020
Total
14,078,696
7
Alhaj Sk. Mohammad Rabban Ali
Mrs.ShamaRabbani
8
Mr.A.JabbarMollah
9
Mr. Md. Abdur Rahman
Independent Director
122,068
10
Mr. Abdul Mohit
Independent Director
1,031,670
Director
Wife
14,101,998
235,705
Total
14,337,703
Director
14,208,452
1.5 (xxi b) (ii) Shares held by the Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal
Audit and other top Executives of the Bank and their spouse and minor children:
Sl. No.
Name & Designation
Nos. of Share(s) held
01.
Mr. Md. Shafiqur Rahman
Managing Director and CEO
NIL
02.
Mr. Md. Humayun Kabir, ACS
Company Secretary
NIL
03.
Mr.WalidMahmudSobhani,FCMA
ChiefFinancialOfficer
NIL
04.
Mr. Zahurul Islam Khondker
SVP & Head of Internal Audit
NIL
1.5 (xxi c) (ii) Shares held by the top 5 (five) salaried Executives of the Bank and their spouse and minor children:
Sl. No.
Name & Designation
Nos. of Share(s) held
01.
Mr.A.M.M.Farhad
Deputy Managing Director
NIL
02.
Mr. Yunus Ali
Deputy Managing Director
NIL
03.
Mr. Md. Shafiqul Islam
Senior Executive Vice President
NIL
04.
Mr. Mohd. Ghulam Sarwar
Senior Executive Vice President
NIL
05.
Mr. Md. Tarik Morshed
Senior Executive Vice President
NIL
1.5 (xxi d) Shareholders holding ten percent or more voting interest in the Company: NIL
98
a n n u a l
re p o r t
2 0 13
Declaration by the CEO & CFO
In accordance with the notification of Bangladesh Securities and Exchange Commission (BSEC) no: SEC/
CMRRCD/ 2006-158/129/Admin/44 dated: 7 August 2012, we declare that for the financial year ended 31st
December 2013:
i) Wehavereviewedthefinancialstatementsfortheyearandthattothebestofourknowledgeandbelief:
a) These statements do not contain any materially untrue statement or do not omit any material factor
contain statements that might be misleading;
b) Thesefinancialstatementstogetherpresentatrueandfairviewofthebank’saffairsandarein
compliance with existing accounting standards and applicable laws;
ii) There are, to the best of our knowledge and belief, no transactions (carried out or recorded) into by the
bankduringtheyeararefraudulent,illegalorviolationofthebank’scodeofconduct.
WalidMahmudSobhani,FCMA
ChiefFinancialOfficer
Md.ShafiqurRahman
ManagingDirector&
Cheif Executive Officer
Certificate on Compliance of Corporate Governance Guidelines
[ Issued under Condition # 7(i) of Corporate Governance Guidelines of BSEC vide
Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 ]
I have reviewed the Compliance of Conditions of the Corporate Governance Guidelines by Social Islami Bank
Limited (“the Company”) for the year ended 31 December 2013. Such compliance is the responsibility of the
Company as stipulated in the above mentioned notification issued by Bangladesh Securities and Exchange
Commission (“BSEC”).
I have conducted my review in a manner that has provided me a reasonable basis for evaluating the compliances
and expressing my opinion thereon. This review has been limited to the measures adopted by the Company in
ensuring such compliances and this has not been for expression of opinion on the financial statements or future
viability of the Company.
According to the information and explanations provided to me by the Company, I hereby certify that, by the
date of issuance of this certificate, the Company has complied with all the conditions of aforesaid Corporate
Governance Guidelines of BSEC.
S.AbdurRashidFCS
Dhaka,07May2014
99
Social Islami Bank Ltd.
Board of Directors
Social Islami Bank Limited does not have its own
policy on appointment of Directors rather it follows
the directions and guidelines of regulatory authorities
like Bangladesh Bank, BSEC notification, Bank
Company Act and Company Act. All directors of the
Board are non-executive directors and one-fifth is
Independent Directors. There are two independent
directors appointed by the Board. The Chairman
has been independent of the CEO. At the time of
appointment of new directors, the existing Board of
Directors frequently assess the size and structure of the
Board evaluate the knowledge, skills, experience and
perceptions that may be necessary to allow the Board
to perform its functions. The directors are selected by
the shareholders in the Annual General Meeting. Casual
vacancy, if any, is filled up by the Board in accordance
with the conditions in the Companies Act and Articles of
the Company. During the year under report, no casual
vacancy was occurred. Total number of Directors of
Social Islami Bank Limited is 10 (ten) including 2 (two)
Independent Directors as on 31.12.2013 which is within
the compliance limit of Bangladesh Bank BRPD circular
no: 11 dated 5 November 2007 and all the Directors
have their sufficient share holdings i.e. minimum 2%
of the total paid-up capital of the Bank as per SEC
(Securities & Exchange Commission of Bangladesh)
Notification no: SEC/ CMRRCD/2009-193/119/
Admin/34 Dated 22.11.2011 published in the
Bangladesh Gazette on December 14, 2011. The
Board members of SIBL are highly competent and
professional in the arena of Banking, Business and
Industry. The board approves and reviews different
policies and business plans in line with six core risk
management guidelines with the ultimate objective
to achieve the goals whereas the administrative and
execution powers lie with the management team of
the bank which is headed by the Managing Director or
CEO. Managing Director of the Bank is paid salaries
and allowances as per approval of the Board of
Directors of the Bank subject to approval of Bangladesh
Bank and as per Bangladesh Bank BRPD Circular no: 9
dated 19/09/1996; the bank provides only the following
facilities/benefits to the members of the Board:
• ChairmanoftheBoardofDirectorsisprovidedwith
a car, telephone, office and private secretary.
• DirectorsareentitledandpaidMeetingAttendance
fees including actual travelling, fooding and lodging
expenses for attending the Board of Directors
100
Meeting, Executive Committee Meeting, Audit
Committee Meeting, Risk Management Committee
Meeting, Shariah Supervisory Committee meeting.
AsperBRPDCircularNo:03dated18thJanuary2010,
the highest slab of Honorarium for the Board member
to attend the Board meeting of any bank operating
in Bangladesh has been limited to Taka 5,000/- per
attendance and accordingly Social Islami Bank Limited
hasbeenpayingHonorariumtotheHon’bleDirector
for attending Board Meeting including attending to the
Executive Committee Meeting, Board Audit Committee
Meeting and Risk Management Committee Meeting @
Taka 5,000/- per attendance.
During the year 2013, the total expenditure related to
the Board meeting was Taka 4.26 million against Taka
3.79 million in 2012.
Board Meetings & Minutes
The Board meets to discuss and review business
strategy, financial performance, compliance and
governance, risk management issues etc. as well
as reports on matters deliberated by the respective
committees. Meetings of the Board are scheduled
in advance for the Directors to plan their schedules.
In addition, Special Board meetings are held when
necessary, to deliberate on major transactions and adhocmattersthatrequiretheBoard’surgentattention
and decisions.
Meeting papers on the proposals and reports are
delivered to the Directors prior to the meetings, giving
them sufficient time to evaluate the proposals and
if necessary, request additional information. This
enables the Board to function and discharge their
responsibilities effectively. Directors who are unable to
attend a meeting due to unavoidable circumstances
are encouraged to provide feedback to the Chairman
on matters to be deliberated for their views to be given
due consideration at the meetings. Proceedings and
resolutions are taken by the board are recorded as
minutes of the meeting signed by the Chairman of the
meeting and send to Bangladesh Bank. The decisions
taken by the board are disseminated by the Company
Secretary to whom such decision relates. Upon
a n n u a l
request of any member of the Board of Directors,
copy of minutes on specific agenda is provided by
the Company Secretary upon receipts of fees as per
Articles of Association of the Bank. As per Company
Act 1991, every company is required to hold minimum
4 (four) Board of Directors meeting in a year. Since
re p o r t
2 0 13
inception total 299 numbers of Board meetings were
held and all such meeting related papers, documents,
memo, attendance & honorarium registers, minutes
etc. are being maintained in good condition by the
Board Secretariat of the Bank.
Retirement of Directors
One third of the total number of Directors retires every year in the AGM (Annual General Meeting)-those who are
longest in the office. However, retiring Directors are also eligible for re-election in the same AGM. In the last 18th
AGM following 4 directors were retired by rotation out of them, 3 were re-elected:
1.
Major (Retd) Dr. Md. Rezaul Haque
Retired and Re-elected
2.
AL-Haj Sultam Mahmood Chowdhury
Retired
3.
Mr. Abdul Awal Patwary
Retired and Re-elected
4.
Alhaj Nasiruddin
Retired and Re-elected
As per Section 91(2) of the Companies Act, 1994 and as per provision of Article 83 of the Articles of Association
of the Bank the following 3(three) Directors are to be retired as one third of the total number of Directors in the
upcoming 19th Annual General Meeting of the Bank:
1.
2.
3.
Mr. Md. Anisul Hoque, Director
[RepresentativeofHamdardLaboratories(Waqf)Bangladesh]
Mr. Mohammad Azam, Director
Alhaj Sk. Mohammad Rabban Ali, Director
As per provision of Article 84 of the Articles of Association of the Bank the retiring 3(three) Directors as mentioned
above are also eligible for re-election in the same meeting they retire.
Director’s Responsibility Statement
The major responsibilities of the Directors of the board are:
• Developingandimplementingcorporatestrategies.
• Exercisingofbusinessjudgmentingoodfaithusing
general prudence for the best interest of the bank in line
withbank’sArticlesofAssociationandcomplyingwith
the prevailing applicable laws and regulations.
• Tosetthedirection,visionandpoliciesofthebankand
to determine objective and strategies to ensure the
effectivedischargeofthebank’sfunctions.
• Mostefficientuseofthebank’sresources.
• Monitoringandreviewingcorporategovernance
framework of BSEC.
• Monitoringandreviewingriskmanagementprocessof
the bank.
• FixationofBusinesstargets,reviewingbusinessresults
and monitoring budgetary control.
• ToevaluatethekeyperformanceindicatorsoftheTop
Executives of the bank.
• Toestablishandmaintaineffectivecommunication
system with the different regulatory bodies.
• Settingupstandardsandmonitoringcomplianceswith
thebank’ssocialresponsibilitypoliciesandpractices.
• Recommendationofappointmentandre-appointment
of statutory auditors of the bank along with their fees.
• ToprepareandsubmitDirectors’Reportbeforethe
shareholders’inAnnualGeneralMeetinginaccordance
with the BSEC notification and Listing Regulations of
DSE & CSE.
• RecommendingshareholderstoapproveFinancial
Statements, dividend and appointment of external
auditors.
101
Social Islami Bank Ltd.
Code of Conduct for the Board of Directors
Board of Directors of Social Islami Bank Limited has
adopted‘CodeofConducts’fortheallmembersofthe
Board who shall individually be liable to sign and follow
these Code of Conduct including any new members
who may assume office as from this date. The Code of
conduct includes all instructions /circulars/ guidelines
issued by Bangladesh Bank related to the Directors and
their interested group/organization. However, followings
are the general code of conducts approved and adopted
by the Board of Directors:
Fiduciary Duties:
The duties imposed on Board Members are fiduciary
duties, similar to those that the law imposes on those
in similar positions of trust, agents and trustees;
Powers vs Duties:
The duties apply to each Board Member separately,
while the powers apply to the Board jointly;
It is a statutory duty of the director(s) to declare
interests in relation to any transactions, and to make
proper disclosure thereof.
Competing with the company:
A Board Member must not compete directly with the
company without arising a conflict or interest.
A Board Member should not act as a director of any
competing companies, as his/her duties to each
company would conflict with each other.
Conflict of duty and interest:
As fiduciaries, the Board Members must not put
themselves in a position where their interests and
duties conflict with the duties that owe to the
company;
Each and every Board Member has an obligation of
loyalty to the company and should subordinate his/her
personal interest when they conflict with or threaten to
conflict with the best interests of the company;
Contribution in Meetings/Debates:
The Board Members are expected to contribute to
the debates in the Board without any personal biases
or other prejudices with the conviction and belief that
the outcome of every debate would be towards the
advancement of the company.
Each and every Board Member shall declare all actual
or potential material conflicts that may arise between
their duty to (i) the company and (ii) their personal
obligations, other fiduciary duties or financial interests
(direct or indirect) and these conflicts shall be reported
to the Chair;
Unfettered discretion:
Board Members cannot without the consent of the
company, fetter their discretion in relation to the
exercise of their powers, and cannot bind themselves
to vote in a particular way at future Board Meeting.
Use of corporate property, opportunity or information:
A Board Member must not, without the consent of
thecompany,usecompany’sassets,opportunities,or
information for his/her own profit.
Confidentiality:
Each Board Member must use utmost care and
discretion in the handling of confidential information
and other information not normally available to the
public, generally coming to them by reason of their
directorship, office or employment. Such information
shall, subject to certain limited circumstances, not be
disclosed to third parties and shall not be used for
personal benefit or for the benefit of family, friends, or
associates.
Transactions with the company:
A Board Member shall not enter into a transaction
where there is a conflict between his interest and duty
without the knowledge of the Board; and
102
A Board Member should not engage directly or
indirectly, as a director, officer, employee, consultant,
partner, agent or major shareholder in any business or
undertaking that competes with, does business with
or seeks to do business with the company;
Withrespecttorestrictedpartytransactions,full
disclosure of material transactions shall be recorded
intheboard’sminutesandwillbetransactedin
accordance with legislated restrictions; and
To avoid conflicts of interest, the Board Members
must do more than merely act within the law. They
must conduct their affairs in such a manner that their
performance will at all times bear public security.
The appearance of conflict of interest as well as the
conflict itself must be avoided.
Accepting Gifts:
No Board Member shall accept any gift, hospitality
or favour offered or tendered by virtue of the position
with the company;
Whendealingwithpublicofficialswhose
responsibilities include the business of the company,
acts of hospitality should be of such a scale and
a n n u a l
nature so as to avoid compromising the integrity or
reputation of either the public official or the company.
Such acts of hospitality should be undertaken in the
expectation that they could well become a matter of
general knowledge and public record.
Reporting of Questionable or Fraudulent Actions:
The Board Member shall report to the Board or to
the Audit Committee about their awareness of any
situation which might adversely affect the reputation
of the company. This would include any questionable,
fraudulent or illegal events or material actions in
violation of company policy which comes to their
attention.
Cooperation with Auditors:
Every Board Member is expected to comply promptly
with any request from internal and/or external auditors
for assistance and to provide full disclosure of any
situation under investigation.
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Acceptance of this code:
All members of the Board of Directors shall sign this
Code of Conduct, including any new members who
may assume office as from this date.
These signed copies shall be held by the Company
Secretary.
Affirmation & Compliance of the Code:
All Board Members shall read this Code at least
annually, and shall certify in writing that they have
done so and that they understand the Code;
Annual compliance of the code by all Board Members
shall be recorded in a meeting of the Board of
Directors;
This document is applicable with immediate effect; and
The Board shall have the authority to make
amendment to this document at any time.
The Company Secretary of the bank has submitted a declaration before the Board of Directors and affairmed that
all the member of the Board of Directors have complied with the code of conducts as were determined by the Board.
Terms of Reference (TOR) for the Chairman
The following Terms of Reference (TOR) (defining the roles, responsibilities and duties) for the Chairman has been
framed in line with the provisions of the Articles of Association of the Bank, BRPD Circular No.11 dated 27.10.2013
and other usual practices:
The Chairman as per the Articles of Association:
• TheDirectorsshallselectaChairmanfromamongst
themselves;
• IfatanymeetingoftheBoard,theChairmanbenot
present at the time appointed for holding the same,
such meeting shall be presided over by Vice-Chairman,
if any, and if none be present the Directors present
shall elect Chairman to preside over that meeting;
• AllmeetingsoftheBoardandShareholdersshallbe
presided over by the Chairman;
• TheChairmanmaycallameetingoftheBoardof
Directors of the Company;
• TheChairmanmaycallameetingoftheBoardof
Directors on shorter notice than seven clear days
as he may deem fit;
• IncaseofequalityofvotesinaMeetingoftheBoard
of Directors, the Chairman shall have a second or
casting vote;
• TheminutesofaMeetingoftheBoardofDirectors
or of the Shareholders shall be signed by the
Chairman of the meeting to which it relate or by the
Chairman of the succeeding meeting.
Roles & Responsibilities of the Chairman
As per BRPD Circular No.11 dated 27.10.2013:
1. As the Chairman of the Board of Directors (or
Chairman of any Committee formed by the Board
of Directors) does not personally possess the
jurisdiction to apply policy making or executive
authority, he shall not participate in or interfere into
the administration or operational and routine affairs
of the bank.
2. The Chairman may conduct on-site inspection
of any branch or financing activities under the
purview of the oversight responsibilities of the
Board. He may call for any information relating to
bank’soperationoraskforinvestigationintoany
103
Social Islami Bank Ltd.
such affairs; he may submit such information or
investigation report to the meeting of the Board
or the Executive Committee and if deemed
necessary, with the approval of the Board, he
shall take necessary action thereon in accordance
with the set rules through the CEO. However,
any complaint against the CEO shall have to be
apprised by the Bangladesh Bank through the
Board along with the statement of the CEO.
3. Chairman of the Board of Directors may be
provided with a car, telephone, office and private
secretary.
Roles & Responsibilities of the Chairman as per usual
practices:
• ThedutiesoftheChairman,whichisanonexecutive role, arise from his senior most position
in the Company and his responsibility for presiding
over the official business of the Company and the
Board.
(vi)
(vii) recommend the committees of the Board
and their composition, review the need for
and the performance and suitability of those
committees, and make such adjustments as
are deemed necessary from time to time;
(viii)
ensure that Board and committee meetings
are conducted in an efficient, effective and
focused manner;
(ix)
ensure that the corporate governance of
the company is maintained in line with
appropriate practice policies agreed by the
Board;
(x)
annually review Board Governance and
performance of the Board (leading the
processfortheBoard’sannualperformance
evaluation and the evaluation of its
committees and individual directors and
acting on the results of such evaluation by
recognizing the strengths and weaknesses
of the Board);
(xi)
be the contact person for the expression of
individual director concerns;
(xii)
foster a culture of openness and
engagement by facilitating the effective
contribution of all directors, in particular
non-executive directors and ensuring
constructive relations between executive and
non-executive directors;
(xiii)
ensure that new directors participate in a full,
formal and tailored induction program and
that the development needs of the directors
and the Board as a whole are identified and
are met to enhance the effectiveness of the
Board; and
A. While working with the Board, the Chairman
shall:
(i)
104
ensure that the Board has full governance
oftheCompany’sbusinessandaffairsand
that the Board is alert to its obligations to the
Company, shareholders, Management and
other stakeholders under the law;
(ii)
set the agenda for discussion at Board
Meetings and General Meetings and ensure
that adequate time is available for discussion
of agenda items;
(iii)
set the frequency of the Board meetings and
review such frequency from time to time as
considered appropriate or as requested by
the Board;
(iv)
chair all Board meetings and manage the
business of the Board ensuring that the
Board adopts a prompt and constructive
approach to make decisions;
(v)
provide strong leadership of the Board and
assist it in reviewing and monitoring the
aims, strategy, policy and directions of the
Company;
communicate with the Board to keep it upto-date on all major developments, including
avoiding surprises through timely discussion
of potential developments and ensuring the
Board has sufficient knowledge to permit
it to comfortably and properly make major
decisions when such decisions are required;
(xiv) be available to assist committee chairs in
carrying out their responsibilities and in
addressing their concerns.
a n n u a l
(ii)
(iii)
(iv)
(v)
act as the principal of the board and
counselor for the MD/CEO, including helping
to define problems, review strategy, maintain
accountability, build relationships, and
ensure the MD/CEO is aware of concerns
of the Board, shareholders and other
stakeholders;
keep under review with the Board
the general progress and long-term
development of the company and ensuring
that effective strategic planning for the
company is undertaken by the MD/CEO and
endorsed by the Board after discussion,
consistent with creating shareholder value
and promoting the long term success of the
company for the benefit of its members as a
whole;
ensure the submission to the Board by
the MD/CEO of objectives, policies and
strategies for the company, including the
company business plan and the annual
budget;
monitor progress towards timely and
effective achievement and implementation
of the objectives, policies and strategies set
by the Board and ensure that appropriate
decisions are taken promptly by or on behalf
of the Board;
lead the Board in:
(a) formally appraising, monitoring and
evaluating the performance of the MD/CEO
and make appropriate recommendations to
the Remuneration Committee;
(b) ensuring accountability of the MD/CEO;
2 0 13
(c) ensuring the implementation of the
succession and development plans by the
MD/CEO; and
B. While working with the Management, the
Chairman shall:
(i)
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(d) as appropriate, review with the MD/CEO
his recommendations on performance and
remuneration of senior executives;
(vi)
work with the MD/CEO and Company
Secretary to co-ordinate the agenda,
information packages and related events for
Board meetings.
(vi)
ensure that there is appropriate delegation
of authority from the Board to Executive
Management;
(vii)
provide advice to the MD/CEO on the
allocation of duties to individual directors
and assignment of adhoc responsibilities
or special tasks to directors or groups of
directors;
C. Recognizing the MD/CEO as the primary
spokesperson, the Chairman shall:
(i) chair all meetings of shareholders;
(ii) undertake public service as agreed with the MD/
CEOinconnectionwiththeCompany’scharitable,
educational and cultural activities;
(iii) participate with MD/CEO, as appropriate, in
corporate relations, including relations with the
shareholders, customers, government, other
companies, the media and stakeholders generally;
and
(iv) hold meetings with the non-executive directors.
• Thisdocumentisapplicablewithimmediateeffect.
• TheBoardshallhavetheauthoritytomake
amendment to this document at any time.
105
Social Islami Bank Ltd.
Role of the Chairman and Managing Director are independent
The Chairman of the Board is not the Managing Director of the Company. The role of Chairman and the Managing Director are
independent and detached from each other.
Role, Responsibilities & Power of the Managing Director
Roles, responsibilities and powers conferred of the Managing Director of Social Islami Bank Limited has been conferred by
the BRPD Circular No. 18 dated 27.10.2013. Apart from that, Managing Director or CEO of SIBL shall discharge the following
roles, responsibilities and duties as per Articles of Association of the Social Islmai Bank Limited and usual practices:-
The MD/CEO as per the Articles of The
Association:
106
• TheManagingDirector[“MD”]meanstheChief
Executive Officer [“CEO”] of the company appointed
by the Board and approved by Bangladesh Bank;
• TheMD/CEOoftheCompanyshallbeaccountable
to the Board and shall discharge his functions and
duties subject to supervision of the Board of
Directors; and
•
•
• TheMDwillbeanEx-officioMemberoftheBoard
without having any voting power and he shall not
need to have any qualification share.
•
•
•
General Roles & Responsibilities:
•
•
The General Roles and Responsibilities of the MD/CEO
shall be• ToactastheChiefExecutiveOfficerreportingtothe
Board of Directors;
• ToremainaccountabletotheBoardfortheoverall
performance of the company and for the day-to-day
operationandmanagementofthecompany’s
business, under the authority delegated by the
Board from time to time;
• Todevelopandpresentstrategicandannual
business plans, rules, regulations and systems for
legal functioning of the organization to the Board for
approval;
• ToimplementtheBoard’spoliciesandstrategies
and deliver the strategic plan in the most effective
and efficient manner;
• ToreporttotheBoardonprogressagainstthe
strategic and annual business plans on a regular
basis. Typically, reporting against the annual plan will
be monthly, while reporting against the strategic plan
will be less frequent, although it should be at least
two or three times a year;
• Tocoordinatetheoverallmanagement,
administration, corporate planning and business
development;
• ToensurethecompliancesofLaws,Rulesand
Regulations and for Good Corporate Governance;
• Tosupervisealltechnical,financialandwelfare
aspects of the organization, negotiations with
sources of credit/fund, and listing in the stock
exchange(s);
• Tomanagetheday-to-dayoperationsofthe
company Manage, motivate, develop and lead
members of the Management Team;
Tomanageresourcesefficientlyandeffectivelyto
achievethecompany’sobjectives;
ToleadtheLocalManagementTeamofthe
Company and chair Management Team meetings;
Totakealeadershiproleinestablishingthe
company’scultureandvalues;
Toensurethatthereisafitbetweenstrategyand
culture,andthecompany’sprocessesandstructure;
Toensurethatappropriateinternalauditandinternal
control processes and procedures are in place (in
liaison with Head of Internal Audit, External Auditors
and Board Audit Committee);
Todevelopandimplementariskmanagementplan;
and
Toensurethatthereisasuccessionplaninplace.
The Board has the authority to make amendment to
the above rules, responsibilities and document at
any time.
Independent Director
As per Corporate Governance Guidelines of Bangladesh
Securities & Exchange Commission (BSEC) modified on
7th August 2012, Social Islami Bank Limited appointed 2
(two) Independent Director-Mr. Abdur Rahman on March
12,2013Mr.AbdulMuhitonJune20,2013tobethe
compliant of the said guidelines of Bangladesh Securities
and Exchange Commission (BSEC). Independent Director in
the Board exerts independent views on the policy decisions
and ensures that all decisions are unbiased and for the best
interest of the bank. As per above corporate governance
guidelines, no independent director of Social Islami Bank
Limited.
- holds more than one percent shares of the total paidup capital.
- is not a sponsor of SIBL and is connected with the
Bank’sanysponsorordirectororshareholderwho
holds one percent (1%) or more share of the total
paid-up capital on the basis of family relationship.
- does not have any other relationship, whether
pecuniary or otherwise, with the Bank or its
Subsidiaries namely SIBL Securities Limited and
SIBL Investment Limited.
- is not a member, director or officer of any stock
exchange.
a n n u a l
-
-
is not a shareholder, director or officer of any member
of stock exchange or an intermediary of the capital
market.
is not a partner or an executive or was not a partner
or an executive during preceding 3 (three) years of
theSIBL’sstatutoryauditfirm.
is not an Independent Director more than 3(three)
listed companies.
has not been convicted by a court of competent
jurisdiction as defaulter in payment of any loan to a
BankorNon-BankFinancialInstitute.
has not been convicted for a criminal offence
involving moral turpitude.
Executive Committee
This is the subordinate committee to the Board. Members
of the Executive Committee are elected by the Board of
Directors of the Bank. As per Bangladesh Bank BRPD
CircularNo:06datedFebruary04,2010,everybankshall
form an Executive Committee. Duties and responsibilities of
the Executive Committee are determined by the Board of
Directors. The Executive Committee lies with the duties and
responsibilities to ensure an efficient, competent, complied
and secured structural approving system of Investment
proposal and business decision. The number of members
of Executive Committee of Social Islami Bank Limited is 6
(six), during the year under review, total 4 (four) number of
Executive Committee meetings were held.
Audit Committee
In order to establish good corporate governance and a
culture of adequate internal control system inside the bank
and to evaluate the activities of the bank as per guidelines
of Bangladesh Bank, the Audit Committee of the Board
was duly constituted by the Board of Directors of Social
Islami Bank Limited as per BRPD Circular Number 12 dated
December 23, 2002. As per BSEC notification no. SEC/
CMRRC/ 2006-158/ 129/ Admin/ 44 dated 7th August 2012
on Corporate Governance; the current Audit Committee is
consisted of 4 members. The Audit Committees constituted
of 2 Directors and 2 Independent Directors. All members
of the Audit Committee are non-executive directors. All
members are financially literate and one of the members of
thecommitteeisfromFinanceandAccountingbackground.
The head of internal audit always has direct access to the
audit committee as well, and can express his issues in
front of the committee. The Audit Committee has a term
of reference and is empowered to investigate/question
employees and retain external counsel as required. During
the year 2013, total 5 nos. of meetings were held. Audit
Committee plays the following role in the bank:
- Oversee the financial reporting process.
- Monitor choice of accounting policies and principles.
- Monitor internal control risk management process.
-
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2 0 13
Oversee hiring and performance of external auditors.
Review along with the management, the annual
financial statements before submission to the board
for approval.
Review along with the management, the quarterly
financial statements before submission to the board
for approval.
Review the adequacy of internal audit function.
Review statement of significant related party
transactions submitted by the management.
Review Management Letters / Letter of Internal
control weakness issued by the statutory auditors.
Risk Management Committee
As per revised Bangladesh Bank guidelines 2012 dated
15thFebruary2012(DOSCircularNo:02)andsubsequent
BRPD Circular No: 11 dated 27/10/2013 under paragraph
5(3), Social Islami Bank Limited has formed a Board
Committee under the name and style “Risk Management
Committee” by adopting a resolution in 299th Board of
Directors Meeting held on 16th November 2013 comprising
the following Board members:
1. Major (Retd) Dr. Rezaul Haque
2. Mr. Md. Anisul Hoque
3. Mr. Abdul Awal Patwary
4. Mr. Md. Sayedur Rahman
5. Mr. Md. Abdur Rahman
Chairman
Member
Member
Member
Member
In view of the revised Risk Management Guidelines
2012 and BRPD Circular no: 11, functions of the Risk
Management Committee shall comprise an effort to ensure
proper risk management in bank. A brief on the function of
the members of the Risk Management Committee may be
given as under:
a. to acquire clear understanding of the type of risk
inherent in Business line and to take appropriate
steps to ensure different risk management issue of
the bank.
b. to define the risk appetite. (Risk appetite is
generally expressed through both quantitative
and qualitative means and should consider
extreme conditions, events and outcomes. It
should be stated in terms the potential impact
on profitability, capital and liquidity)
c. to design the organization structure to manage risk
within the bank.
d. reviewing and approving risk management policies
and re-viewing at least annually to limit the risks,
consistentwiththebank’sriskappetite.
e. to ensure adequate record keeping and proper
reporting system.
f. to review and approve risk limits and re-reviewing at
least annually.
107
Social Islami Bank Ltd.
g. to ensure monitoring and compliance with overall
risk management policies.
h. to be knowledgeable about the methods available to
measure risks for various activities.
i. Supervising day to day activities of senior managers
and head of business line.
j. establishing committee and sub-committee to be in
charge of ongoing risk management.
k. to carefully evaluate all the risks associated with
new activities and ensure that proper infrastructure
and internal control are in place.
l. to provide adequate staffing for activity and
designated staff with appropriate credentials to
supervise the activity.
m. to ensure that all Senior Management including
line managers have sufficient knowledge on risk
management.
Shariah Supervisory Committee
SIBL is a fully shariah based bank and always adhere
to compliance of Shariah principles. The bank has a
Shariah Supervisory Committee consisting of prominent
Islamic Scholars, Economists and lawyers to advise the
Management on Shariah matters relating to business
operation. Branches are being regularly audited by the
Shariah Inspection Teams; and necessary guidance with
required rules and procedures based on shariah principles
are being adopted as per Bangladesh Bank guidelines and
adviceoftheBank’sShariahSupervisoryCommittee.
As per Article 104 of the Articles of Association of the Bank
the board of Directors of the Bank has determined the
terms and references as under:
functions of the Bank are being carried out in
accordancewiththeprinciplesofIslamicShari’ah.
The Member-Secretary shall remain responsible to the
Shari’ahSupervisoryCommittee.
7. Salaried Officer(s) designated as “Mudaqqiq” also called
“Muraquib” with sufficient knowledge about all schools
of Islamic thoughts may be appointed by the Bank on
the recommendation of the SSC to ensure compliance
ofthe Shari’ahprinciplesineachandeverycaseof
the Bank and will be responsible to the SSC. He (they)
would be employee(s) of the Bank.
8. The status of the SSC shall be advisory to the BOD and
Supervisory in respect of operational activities of the
Bank.
9. The Annual report of the bank should be certified by the
Shari’ahSSC
Remuneration Committee
Employees’remunerationalongwithfringebenefitis
reviewed by the Board of Directors of the bank on the basis
of inflation, market trend, employee satisfaction etc. Salaries
and allowances of Social Islami Bank Limited are very
competitive in comparison with other banks operating in the
market . There is no provision or instruction for formation of
Remuneration Committee as per Bangladesh Bank, however,
Board of Directors of the bank time to time reviews and
enhances the remuneration packages of the employees.
Terms of Reference (TOR) for the
Company Secretary
01. Appointment, Reporting Relationships and
Accountability:
The Company Secretary is an employee of the
Company who;
Powers and Functions:
a) ThefunctionoftheShari’ahSupervisoryCommittee
is to offer views on matters related to the Bank from
timetotime.TheShari’ahSupervisoryCommittee
may require any papers from the Bank and examine
the same in order to ensure that all activities of
the Bank are being carried out in accordance with
the Islamic principles.
b) The SSC will assist the Board of Directors
(BOD) by way of advice on matters relating to
Shari’ah.TheirrecommendationsonShari’ah
principles must be respected by the BOD as it is
committed to run the Bank strictly in accordance
withShari’ah.
c) The opinions of the majority of the members shall
be taken to be the opinion of the SSC provided that
the said opinion is supported by the majority of
Fakihs/Muftis/IslamicScholarspresentinthe
meeting.
6. The SSC shall have a Secretariat. There will be a
Member-Secretary, who will see whether the
108
•
reportsadministrativelytotheMD/CEOand
operationally to the Chairman of the Board;
•
isalsoaccountabletotheBoardofDirectors;
•
actsinthecapacityofSecretarytotheBoardand
its Committees;
•
isresponsibleforprovidingstrategicand
operational support to the Board by providing
resources and information links among the Board,
Management and the Shareholder, with particular
emphasis on facilitating the flow of information;
isalsoresponsibleformaintainingeffectiveworking
relationships with the Board Chairman, Committee
Chairs, individual Directors and Management;
•
•
musthaveabroadunderstandingofthe
organization and its operations to effectively carry
out his/her responsibilities.
a n n u a l
(i)
(ii) FacilitateinconsultationwithChairman,Committee
Chairs or MD/CEO, Notification of meetings,
preparation and distribution of agenda items etc.
and ensure that;
(iii) FacilitatethepracticalarrangementsforaBoard
meeting or Committee meeting, such as meeting
room, transports, lunch/dinner/tea etc. as required;
(iv) Attend Board and Committee meetings, and
provide advice to the Chairman to support effective
functioning of the Board or Committee and
adherence to proper meeting procedure;
(v)
Initiate the development of agenda for Board and
Committee Meetings in consultation with the Board
Chair, Committee Chairs and Management;
(vii) Promote the role and responsibility of the Company
Secretary both within the organization and
externally, building networks to share ideas,
discussing new trends in corporate governance
and best practice;
(viii) Refer issues for legal review and opinions as
required and may be directed to obtain advice on
behalf of the Board;
(vi) Whererequired,prepareandsubmittothe
Directors accurate and complete proposal for
written resolutions;
(ix) Retain and safeguard the official Minute books and
Corporate documents;
(xi) Review all minutes for consistency, appropriateness
of recorded decisions and issues with broader
implications;
(xii) Ensure that the record of minutes is at all times up
to date;
•
DutiesandResponsibilities:Corporate
Governance Services
DutiesandResponsibilities:BoardEvaluation
& Succession Planning Processes
The Company Secretary shall assist the Board and/or
Committees(i) In evaluating and reporting on corporate
governance commitments and the mandates of the
various Committees;
(ii) In implementing and reporting on the annual
processes to assess the performance of the Board,
Committees, Chairs and individual Directors;
(iii) In implementing and reporting on the annual
performance evaluation of the CEO;
(iv) FacilitatingBoardappointmentandrenewal
processes, and addressing Committee structures,
composition and mandates;
(v) In identifying and communicating any skill
requirements for making recommendations to fill
Board vacancies;
(vi) Identifying and communicating the professional
development needs of Directors.
•
Provide expertise and work with the Board
Chairman to implement best practices in corporate
governance by the Board and its Committees;
(ii)
Provide advice and guidance to Directors and
management regarding policies, directives and
processes regarding corporate governance and tax
issues related to the Board and Directors;
(iii)
Be responsible for promoting strong corporate
governance practices within the organization;
DutiesandResponsibilities:PolicyFramework
The Company Secretary is responsible for
o
Overseeingtheorganization’sPolicyFrameworkas
approved by the Board;
o
Providing advice and guidance to the Board, the
MD/CEO and management on compliance with
that framework.
The Company Secretary shall –
(i)
Maintain a record of consolidated Board motions.
•
(viii) In conjunction with management, clearly
communicate directives from the Board and
Committees to the person responsible for carrying
out the directives;
(xiii) Act as a Secretary for all Board and Committee
meetings.
(ix) ActascustodianforCompany’scorporateand
historical records, meeting minutes and related
Board information;
(x)
Prepare accurate, complete minutes of meetings;
(x) VerifyandAuthorizeDirector’sexpensesfor
performance of Board-related duties;
(v) WorkwiththeBoardChairtoensurecontinuous
improvement of the Board of Directors;
(vi) Keep up to date on evolving corporate governance
practices and trends;
(vii) Arrange for signatures of minutes and written
resolutions;
2 0 13
(iv) Draft and maintain all governance documentation
including the Governance Manual in collaboration
with the Board Chair;
02. Duties and Responsibilities:
• DutiesandResponsibilities:Managementof
Board and Committee Meetings:
The Company Secretary shall –
re p o r t
•
DutiesandResponsibilities:BoardBudget
The Company Secretary shall manage the
Board budget and review and ensure the effective
administration of Board expenditures including
compliance with entitlements.
109
Social Islami Bank Ltd.
Board Chair in respect of any matters where
conflict, potential or real, may occur between the
Board and its Members;
• DutiesandResponsibilities:Transparency
TheCompanySecretarysupportstheBoard’s
commitment to transparency by-:
o
Ensuring continuous disclosure of the governance
framework;
(ii)
o
Ensuring all external reporting requirements are met
including in relation to the disclosure of Board
meeting attendance, Board remuneration and expenses;
o
Ensuring that the appropriate controls are in place
in relation to access to board information;
o
Ensuring the preparation of governance related
materials for the Service Plan and Annual Service
Plan Report in collaboration with the Board Chair.
•
DutiesandResponsibilities:Communication
The Company Secretary shall –
(i)
Be the liaison between the Board and the MD/CEO
and Management and is the main contact for
Directors;
(ii)
Promote a strong and effective working relationship
between the Board and management;
(iii)
At the direction of the Board Chair, provide
Directors with timely information between Board
Meetings;
•
DutiesandResponsibilities:Statutory&Legal
Matters
The Company Secretary shall -
(iv) Ensure that all Directors have all the necessary
information to discharge their responsibilities;
(v)
Ensure that all Directors receive the same
information to support the cohesive working
relationship of the Board;
(vi) Develop templates and guidelines to support the
preparation of appropriate briefing material;
(vii) Ensure that the appropriate tools and mechanisms
are in place to manage Board information and
communication to ensure that Directors are able to
properly discharge their responsibilities;
(viii) Ensure that the appropriate technical support
is available to the Board in relation to any online or
paperless communication platforms;
(ix) Support the MD/CEO in ensuring that all decisions
made by the Board, or the Board Chair, are clearly
communicated to management in a timely manner
and that all consequential actions are taken by the
organization;
(x)
110
Additionally ensure the confidentiality of Board
materials, records and deliberations as appropriate,
or as directed by the Board Chair.
•
DutiesandResponsibilities:CodeofConduct
& Conflict of Interest
(i)
The Company Secretary shall administer the Code
of Conduct of the Board Members and advise the
If there is a conflict of interest, actual or
potential, on any particular matter, between the
CompanySecretary’sadministrativeormanagerial
responsibilities within the Company and his/her
responsibilities as a secretary to the Board, it is his
responsibility to draw it to the attention of the Board.
(i)
Keep under close review all legislative, regulatory
and corporate governance developments that
might affect the Company’soperations,andensure
the Board is fully briefed on these and that it has
regard to them when taking decisions;
(ii)
Ensure proper and timely documentary filings
and fulfillment of disclosure requirements to
statutory authorities under applicable legislation
and policy;
(iii)
Ensure that the standards and disclosures required
by the different statutes are observed and, where
required, reflected in the annual report of the directors;
(iv)
Make arrangements for and manage the process
of the General Meetings;
(v) MaintaintheCompany’sbooksandrecordsand
ensure the security and application of the
Company’sCommonSeal;
(vi)
Perform such other duties which usually pertain to
the Company Secretary or which may be from time to
time be prescribed by the Board or be required by law.
•
DutiesandResponsibilities:SpecialProjects
As directed and approved by the Board and its
committees, the Company Secretary will undertake
special projects ensure that the Board have
sufficient information on the resources required to
complete any proposed special projects.
Terms of Reference (TOR) for the Chief
Financial Officer (CFO)
01. Appointment, Reporting Relationships and
Accountability:
TheCFOisaSeniorExecutiveoftheCompanywho
• ReportstotheChiefExecutiveOfficer(CEO);
• IsalsoaccountabletotheAuditCommittee;
• Musthaveabroadunderstandingoftheorganization
and its operations to effectively carry out his/her
responsibilities.
a n n u a l
• FollowingapplicableAccountingStandardsand
FinancialReportingStandardslikeIAS,BAS,IFRS
andBFRS,andadequatedisclosureforany
departure there-from, if any;
• Compliancewithapplicationofappropriate
accounting policies, and ensuring that accounting
estimates are reasonable and prudent;
• Providingclosecooperationinestablishingeffective
internal financial control environment.
• AsaSeniorExecutive,theCFOisresponsiblefor
leadershipandmanagementoftheCompany’s
finance and accounting functions and is responsible for:
• TheCFOshallhavethefollowingResponsibilities
towards the Board of Directors:
(i) To attend the board meetings and be part of the
discussion having financial implication on relevant issues
(ii) To present to the board of directors information
on the following in order to strengthen and formalize
corporate decision- making process:
(i) TheCompany’sbusinessplanning,budgetingand
forecasting processes, including coordination and
integration of strategic and business plans for
business segments, departmental cost centers and
capital budgets;
(ii) TheintegrityoftheCompany’saccountingsystems,
sub-systems, internal controls, fund management,
and managing the relationship with the external auditors;
(iii) TheCompany’sfinancialandbusinessreporting,
tax planning, estimating and reporting, and
regulatory reporting (corporate and securities);
(iv)ManagementrelationshipswiththeCompany’s
bankers and investors, and leasing companies.
Responsibility for capital planning and structure
andtheraisingofequityordebttofundtheCompany’s
operations, investment analysis/ presentations, and
trackingoftheCompany’smarketvaluation;
(a) Annual business plans, cash flow projection,
forecasts and long term plans
(b) Budget including capital, manpower and overhead
budgets along with variance analysis
(c) Quarterly operating results of the Company as a
whole and in terms of its business segments
• TheCFOshallhaveResponsibilitiestowards
Shareholders to provide all the necessary data to
be presented in the “Director’s Report” and for
this purpose CFO must ensure the following:
(v) The financial analysis function which addresses
product contribution and pricing/margins, the
vetting of business cases and post reviews of
completed/implemented initiatives, business analysis,
operational efficiency and organizational
and system capacity modeling/utilization;
(a)
The financial statement, prepared by the
management of Company, present fairly its states
of affairs, the result of its operations, cash flows
and changes in equities
(b)
Proper books of accounts of the Company have
been maintained by the relevant units and that
operation & computer controls are in place
(c)
Appropriate accounting policies have been
consistently applied in preparation of financial
statements and accounting estimates are based on
reasonable an d prudent judgment
(d)
International accounting standards, as applicable
in the country, have been followed in preparation of
financial statements and any departure there from
has been adequately disclosed
(e)
There has been no material departure from the
best practice of corporate governance as detailed
in the listing regulations or applicable guidelines
Internal and External Reporting
• Asamemberoftheseniormanagementofthe
Company, the CFO shall:
(i) Assist the CEO in:
(a) Representing the Company in dealings with
government and regulatory bodies;
(b) Maintaining relationships with outside agencies and
strategic partners;
2 0 13
to ensure that the CEO is provided in a timely
manner with all the information he/she requires to
fulfill his/her statutory and other obligations;
(iii) Carry out analysis of assets and liability and submit
recommendations to the management on a quarterly
basis;
(iv) Recommend to the Management on how to match
assets and liabilities according to short term and
long term plan.
02. Roles, Responsibilities and Duties of the CFO
TheCFO,onbehalfoftheBoardofDirectors,is
responsible for
re p o r t
(f)
•
(c) Maintaining a policy of on-going communication
with investors and representatives of the investment
community.
Asapartofroutinework,theCFOshall
responsible for overseeing
(i)
Coordination with the internal auditors for statutory
auditing
(ii) Meet regularly and as required with the CEO to
review material issues and to take reasonable steps
(ii)
Asset Liability Management
111
Social Islami Bank Ltd.
(iii)
Treasury division
(i)
o
(iv) MonitoringCashFlows
(v)
Consulting with other departments, businesses
units and or affiliated companies to improve
financial performance
(vi)
Strategic financial planning/ capital budgeting
o
(vii) Cash forecasting
o
(viii) Financialriskmanagement
(ix)
Cash Management
(x)
Short term investing
(xi)
Short term borrowing
(xii) Budgeting and Accounting
o
To schedule and assign audits to team members,
ensuring effective and efficient use of resources;
o
Toensurequalitycontroloftheteam’sauditplans
on an ongoing basis by reviewing and approving plans
as they are developed and communicated to clients;
o
To ensure annual audit plans have contingency built
in, to provide unexpected audits to clients as they
may surface;
o
To report to the Audit Committee at the required
intervals on Internal Audit assignments including
planned reviews, investigations, risk advisory work
and any other ad-hoc activity as required.
(xiii) Designing a proper financial Model for the Business Plan
(xiv) based on data received from respective
departments, carrying out analysis on:
(a)
Cost of fund
(b)
Interest rates (both for deposits and lending)
Audit Planning/Design:
To develop an annual audit plan using input from
the team and stakeholders to identify priorities and
resource requirements for the year to cover audit of
all the activities of the Company;
To meet with Directors and Managers to discuss
needs and propose audits, to build stakeholder
requirements into department plans;
To ensure plan is developed to meet the Audit
Committee’sexpectations;
(xv) Identifying major profit and cost centers
(xvi) Maintenance of Investment in shares and securities
(xvii)PreparationofFinancialStatements
(ii) Conducting Audits:
• TheCFOhasextensiveresponsibilitiesfor
internal and external reporting, particularlyo All the financial information required for decisionmaking by the Board of Directors and Chief Executive
OfficerisprocessedandfurnishedbytheCFO.
o ExternalreportingrequirementisfulfilledbyCFO,
the accounts and financial statements are signed by
theCFObeforetheyaresenttoconcernedauthorities.
o
To oversee and provide quality control for the
internal audits, to ensure departmental mandate
and business goals are met and that professional
standards are maintained at all times.
o
To ensure completion of audit assignments to
provide independent, objective assurance to the
Audit Committee.
o
Todeveloptheteam’sengagementwithand
support of major business change programs thus
ensuring that appropriate consideration of risk and
control is given to all change.
Terms of Reference (TOR) for the Head of
Internal Audit (HOIA)
01. Appointment, Reporting Relationships and
Accountability:
The HOIA is an employee of the Bank who-
(iii) Reporting:
o
To ensure that internal audit reports are prepared
and finalized in a timely manner and the same are
submitted before the Audit Committee;
To ensure that internal audit reports are issued
with all recommendations agreed and accepted by
the audited individual/unit.
•
ReportsadministrativelytotheChiefExecutive
Officer (CEO) and operationally to the Chairman of
the Audit Committee;
o
•
IsaccountabletotheAuditCommittee;
•
Isresponsibleprimarilyforgivingassuranceon
the internal control arrangements in the Company
and playing a key role in promoting good corporate
governance;
(iv) People Management & Development:
•
Musthaveabroadunderstandingofthe
organization and its operations to effectively carry
out his/her responsibilities.
02. Roles, Duties and Responsibilities:
Roles, Duties and Responsibilities of the HOIA shall
include-
112
o
To manage and oversee team performance through
performance planning, coaching and performance
appraisals;
o
To hold direct reports accountable for managing
and developing their assignments to ensure the
department’sgoalsareachieved;
o
To provide ongoing feedback to the team to ensure
they develop the skills and competencies required
for effective planning and individual professional and
personal career growth;
a n n u a l
o
To motivate and inspire the team by providing them
with the information and tools they need to do their
jobs well and meet customer expectations;
o
To deal with performance issues, discipline as
necessary and address poor standards, ensuring
department targets and customer satisfaction is not
compromised;
o
To manage the head count, recruiting and deploying
resources as required, to ensure the department
budget is balanced and the right mix of skills and
strengths are being leveraged as effectively as
possible.
(v) Improving the Practice of Audits/Championing
Risk Management:
o
To build relationships with leaders across the
organization to understand issues and identify areas
for improvement for the organization as a whole;
o
To support and encourage team members to be
proactive in identifying opportunities to share best
practice with Directors and Managers to improve
the control environment;
o
To develop new methodologies to improve the audit
process, making it easier for the organization to
request audits and implement recommendations;
o
To provide assistance to the business in meeting
regulatory requirements;
o
To keep abreast of developments in Corporate
Governance practices and advise the business
accordingly.
(vi) General:
To perform any other duties as are within the scope,
spirit and purpose of the job, the title of the post
and its grading as requested by the line manager or
Head of Unit/Section/Department/Division.
re p o r t
2 0 13
Board of Directors of the bank has recommended to reappoint M/S Kazi Zahir Khan & Co., Chartered Accountants
as Auditors for the year 2014.
Publications
The full text of the Annual Report 2013 is available in the
company’swebsitewww.sibl-bd.com
Investor’s Complain Desk
ThebankhasanInvestor’sComplanDesktoinvestigate
any matters related to the Investors. Any aggrieved investor
may submit his complain or query to the following address:
Company Secretary &
Head of Investor Complain Desk
City Center, Level-20, 90/1 Motijheel C/A, Dhaka-1000
Phone: 88 02 09612001122, Fax: 88 02 9568098
email: [email protected]
Gratitude
The member of the Board of Directors of SOCIAL ISLAMI
BANK LTD. would like to place on record their gratitude to
allthevaluedShareholders,Clients,PatronsandWellWishersfortheircontinuedsupportandcooperation.
WearealsoindebtedtotheGovernmentofBangladesh,
Bangladesh Bank, Bangladesh Securities & Exchange
Commission (SEC), Stock Exchanges, Other Banks &
Financialinstitutions,OfficeoftheRegistrarofJointStock
Companies&Firmsandallotherconcernedfortheir
continuedandkindsupport.Finally,theBoardwouldliketo
place on record their deepest appreciation for the dedicated
services rendered by all the employees of the Bank.
Ma-assalam
On behalf of the Board of Directors
Appointment of Auditors
M/s Hawlader Yunus & Co., Chartered Accountants, Dhaka
was appointed as External Auditors of Social Islami Bank
Limited by the Shareholders in its 18th Annual General
Meeting. Due to issuance of “Unwillingness letter to
continue as Auditors of Social Islami Bank Ltd.” by them,
a causal vacancy was occurred. To fill the casual vacancy,
the Board of Directors appointed another audit firm M/S
Kazi Zahir Khan & Co., Chartered Accountants, Dhaka for
the year 2013 as per Companies Act 1994. As per law, M/S
Kazi Zahir Khan & Co., Chartered Accountants, Dhaka will
retire in the 19th Annual General Meeting of the Bank and
are eligible for re-appointment for the year 2014 and the
Major (Retd) Dr. Md. Rezaul Haque
Chairman
Dated: 18.04.2014
113
Social Islami Bank Ltd.
Corporate Governance Compliance Report
StatusofcompliancewiththeconditionsimposedbytheBangladeshSecuritiesandExchangeCommission’sNotificationNo:SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 issued under section 2CC of the Securities and Exchange Ordinance, 1969
Condition
No.
Title
Compliance Status
Complied
1.
BOARD OF DIRECTORS:
1.1.0
Board’s Size
1.1
(Should not be less than 5 but not more than 20)
1.2
Independent Directors
1.2 (i)
Independent Directors (At least 1/5th i.e. minimum one)
√
1.2 (ii) a)
who either does not hold any share in the company or holds less than
one percent (1%) shares of the total paid-up shares of the company
√
1.2(ii)b)Who is not a sponsor of the company and is not connected with
thecompany’sanysponsorordirectororshareholderwhoholdsone
percent (1%) or more shares of the total paid-up shares of the
company on the basis of family relationship. His/her family members
also should not hold above mentioned shares in the company:
Not Complied
Remarks
√
√
Provided that spouse, son, daughter, father, mother, brother, sister,
son-in-law and daughter-in-law shall be considered as family members
1.2 (ii) c)
who does not have any other relationship, whether pecuniary or
otherwise, with the company or its subsidiary/associated companies
√
1.2 (ii) d)
who is not a member, director or officer of any stock exchange
√
1.2 (ii) e)
who is not a shareholder, director or officer of any member of stock
exchange or an intermediary of the capital market
√
1.2 (ii) f)
who is not a partner or an executive or was not a partner or an
executive during the preceding 3 (three) years of the concerned
company’sstatutoryauditfirm
√
1.2 (ii) g)
who shall not be an independent director in more than 3 (three)
listed companies
√
1.2 (ii) h)
who has not been convicted by a court of competent jurisdiction
as a defaulter in payment of any loan to a bank or a Non-Bank
FinancialInstitution(NBFI);
√
1.2 (ii) i)
who has not been convicted for a criminal offence involving
moral turpitude
√
1.2 (iii)
the independent director(s) shall be appointed by the board of
directors and approved by the shareholders in the Annual General
Meeting (AGM)
√
1.2 (iv)
the post of independent director(s) cannot remain vacant for more
than 90 (ninety) days
1.2 (v)
the Board shall lay down a code of conduct of all Board members
and annual compliance of the code to be recorded
√
1.2 (vi)
the tenure of office of an independent director shall be for a period of
3 (three) years, which may be extended for 1 (one) term only.
√
1.3
Qualification of Independent Director(ID)
114
-
-
N/A
a n n u a l
Condition
No.
1.3 (i)
Title
Complied
√
The person should be a Business Leader/ Corporate Leader /
Bureaucrat / University Teacher with Economics or Business Studies
or Law background/Professionals like Chartered Accountants, Cost
& Management Accountants, Chartered Secretaries. The independent
director must have at least 12 (twelve) years of corporate management/
professional experiences
√
1.3 (iii)
In special cases the above qualifications may be relaxed subject to
prior approval of the Commission
-
1.4
Chairman of the Board and Chief Executive Officer
√
1.5
The Director’s Report to Shareholders
√
1.5 (i)
Industry outlook and possible future developments in the industry
√
1.5 (ii)
Segment-wise or product-wise performance
√
1.5 (iii)
Risks and concerns
√
1.5 (iv)
A discussion on Cost of Goods sold, Gross Profit Margin and Net
Profit Margin
√
1.5 (v)
Discussion on continuity of any Extra-Ordinary gain or loss
√
1.5 (vi)
Basis for related party transactions - a statement of all related party
transactions should be disclosed in the annual report
√
1.5 (vii)
Utilization of proceeds from public issues, rights issues and/or
through any others instruments
√
1.5 (viii)
An explanation if the financial results deteriorate after the company
goes for Initial Public Offering (IPO), Repeat Public Offering (RPO),
Rights Offer, Direct Listing, etc.
-
1.5(ix)
IfsignificantvarianceoccursbetweenQuarterlyFinancialperformance
and Annual Financial Statements the management shall explain
about the variance on their Annual Report
√
1.5 (x)
Remuneration to directors including independent directors
√
1.5 (xi)
The financial statements prepared by the management of the issuer
company present fairly its state of affairs, the result of its operations,
cash flows and changes in equity
√
1.5 (xii)
Proper books of account of the issuer company have been maintained
√
1.5 (xiii)
Appropriate accounting policies have been consistently applied in
preparation of the financial statements and that the accounting
estimates are based on reasonable and prudent judgment
√
1.5 (xiv)
International Accounting Standards (IAS)/ Bangladesh Accounting
Standards(BAS)/InternationalFinancialReportingStandards(IFRS)/
BangladeshFinancialReportingStandards(BFRS),asapplicablein
Bangladesh, have been followed in preparation of the financial
statements and any departure there-from has been adequately disclosed
2 0 13
Compliance Status
Independent Director shall be a knowledgeable individual with
integrity who is able to ensure compliance with financial, regulatory
and corporate laws and can make meaningful contribution to business
1.3 (ii)
re p o r t
Not Complied
Remarks
-
N/A
-
N/A
√
115
Social Islami Bank Ltd.
Condition
No.
Title
Complied
1.5 (xv)
The system of internal control is sound in design and has been
effectively implemented and monitored
√
1.5(xvi)
Therearenosignificantdoubtsupontheissuercompany’sabilityto
continue as a going concern. If the issuer company is not considered
to be a going concern, the fact along with reasons thereof should
be disclosed
√
1.5(xvii)
Significant deviations from the last year’s operating results of the
issuer company shall be highlighted and the reasons thereof should be
explained
√
1.5 (xviii)
Key operating and financial data of at least preceding 5 (five) years
shall be summarized
√
1.5 (xix)
If the issuer company has not declared dividend (cash or stock) for
the year, the reasons thereof shall be given
-
1.5 (xx)
The number of Board meetings held during the year and attendance
by each director shall be disclosed
√
1.5 (xxi)
The pattern of shareholding shall be reported to disclose the aggregate
number of shares (along with name wise details where stated
below) held by
1.5 (xxi) a) Parent/Subsidiary/Associated Companies and other related parties
(name wise details)
1.5(xxi)b) Directors,ChiefExecutiveOfficer,CompanySecretary,ChiefFinancial
Officer, Head of Internal Audit and their spouses and minor children
(name wise details)
√
√
1.5 (xxi) c) Executives
√
1.5 (xxi) d) Shareholders holding ten percent (10%) or more voting interest in the
company (name wise details)
√
1.5 (xxii)
In Case of the appointment/re-appointment of a director the company
shall disclose the following information to the shareholders:
1.5 (xxii) a) a brief resume of the director
1.5 (xxii) b) nature of his/her expertise in specific functional areas
1.5 (xxii) c) names of companies in which the person also holds the directorship
and the membership of committees of the board
2.0
CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT
AND COMPANY SECTARY(CS)
2.1
Appointment: The company shall appoint a Chief Financial Officer
(CFO), a Head of Internal Audit (Internal Control and Compliance)
and a Company Secretary (CS). The Board of Directors should clearly
define respective roles, responsibilities and duties of the CFO, the
Head of Internal Audit and the CS.
2.2
116
Compliance Status
Requirement to attend the Board Meetings: The CFO and the
Company Secretary of the companies shall attend the meetings of
theBoardofDirectors,providedthattheCFOand/ortheCompany
Secretary shall not attend such part of a meeting of the Board of
√
√
√
√
√
Not Complied
-
Remarks
N/A
a n n u a l
Condition
No.
Title
Directors which involves consideration of an agenda item relating to
their personal matters.
re p o r t
2 0 13
Compliance Status
Complied
Not Complied
Remarks
√
3.
AUDIT COMMITTEE
3(i)
The company shall have an Audit Committee as a sub-committee of
the Board of Directors
√
3(ii)
The Audit Committee shall assist the Board of Directors in ensuring
that the financial statements reflect true and fair view of the state
of affairs of the company and in ensuring a good monitoring system
within the business
√
3(iii)
The Audit Committee shall be responsible to the Board of Directors.
The duties of the Audit Committee shall be clearly set forth in writing
√
3.1
Constitute of the Audit Committee
3.1(i)
Size of the Audit Committee (Should be at least 3 members.)
√
3.1(ii)
The Board of Directors shall appoint members of the Audit
Committee who shall be directors of the company and shall include
at least 1 (one) independent director
√
3.1(iii)
All members of the audit committee should be “financially
literate” and at least 1 (one) member shall have accounting or related
financial management experience
√
3.1(iv)
When the term of service of the Committee members expires or
there is any circumstance causing any Committee member to be
unable to hold office until expiration of the term of service, thus
making the number of the Committee members to be lower than the
prescribed number of 3 (three) persons, the Board of Directors shall
appoint the new Committee member(s) to fill up the vacancy(ies)
immediately or not later than 1 (one) month from the date of
vacancy(ies) in the Committee to ensure continuity of the performance
of work of the Audit Committee
-
3.1(v)
The company secretary shall act as the secretary of the Committee.
√
3.1(vi)
The quorum of the Audit Committee meeting shall not constitute
without at least 1 (one) independent director.
√
3.2
Chairman of the Audit Committee
3.2(i)
The Board of Directors shall select 1 (one) member of the
Audit Committee to be Chairman of the Audit Committee, who shall
be an independent director
3.2(ii)
Chairman of the audit committee shall remain present in the Annual
General Meeting (AGM)
3.3
Role of Audit Committee
3.3(i)
Oversee the financial reporting process
√
3.3(ii)
Monitor choice of accounting policies and principles
√
3.3(iii)
Monitor Internal Control Risk management process
√
3.3(iv)
Oversee hiring and performance of external auditors
√
-
N/A
√
√
117
Social Islami Bank Ltd.
Condition
No.
Compliance Status
Complied
Not Complied
Remarks
3.3(v)
Review along with the management, the annual financial statements
before submission to the board for approval
√
3.3(vi)
Review along with the management, the quarterly and half yearly
financial statements before submission to the board for approval
√
3.3(vii)
Review the adequacy of internal audit function
√
3.3(viii)
Review statement of significant related party transactions submitted
by the management
√
3.3(ix)
Review Management Letters/Letter of Internal Control weakness
issued by statutory auditors
√
3.3(x)
When money is raised through Initial Public Offering (IPO)/Repeat
Public Offering (RPO)/Rights Issue the company shall disclose to the
Audit Committee about the uses/applications of funds by major
category (capital expenditure, sales and marketing expenses,
working capital, etc), on a quarterly basis, as a part of their quarterly
declaration of financial results. Further, on an annual basis, the
company shall prepare a statement of funds utilized for the purposes
other than those stated in the offer document/prospectus
√
3.4
Reporting of the Audit Committee
√
3.4.1
Reporting to the Board of Directors
√
3.4.1(i)
The Audit Committee shall report on its activities to the
Board of Directors
√
3.4.1(ii)a)
The Audit Committee shall immediately report to the Board of
Directors on conflicts of interests
-
-
N/A
3.4.1(ii)b)
suspected or presumed fraud or irregularity or material defect in the
internal control system
-
-
N/A
3.4.1(ii)c)
suspected infringement of laws, including securities related laws,
rules and regulations
-
-
N/A
3.4.1(ii)d)
Any other matter which shall be disclosed to the Board of Directors
immediately.
-
-
N/A
3.4.2
Reporting to the Authority
-
-
N/A
3.5
Reporting to the Shareholders and General Investors
4.
EXTERNAL/STATUTORY AUDITORS
4.(i)
Non-engagement in appraisal or valuation services or fairness opinions
4.(ii)
Non-engagement in financial information systems design and implementation
√
√
4.(iii)
Non-engagement in book-keeping or other services related to the
accounting records or financial statements
√
4.(iv)
Non-engagement in broker-dealer services
4.(v)
Non-engagement in actuarial services
√
√
4.(vi)
Non-engagement in internal audit services
√
4.(vii)
Non-engagement in any other service that the Audit Committee determines
√
118
Title
a n n u a l
Condition
No.
Title
4.(viii)
No partner or employees of the external audit firms shall possess
any share of the company they audit at least during the tenure of their
audit assignment of that company
4.(ix)
Non-engagement in Audit/Certification Services in Compliance of
Corporate Governance as required under clause (i) of condition No. 7
Complied
Provisions relating to the composition of the Board of Directors of the
holding company shall be made applicable to the composition of the
Board of Directors of the subsidiary company
√
At least 1 (one) independent director on the Board of Directors
of the holding company shall be a director on the Board of Directors
of the subsidiary company
√
5.(iii)
The minutes of the Board meeting of the subsidiary company shall be
placed for review at the following Board meeting of the holding company
√
5.(iv)
The minutes of the respective Board meeting of the holding
company shall state that they have reviewed the affairs of the subsidiary
company also
√
The Audit Committee of the holding company shall also
review the financial statements, in particular the investments made by
the subsidiary company
√
6.
DUTIES OF CHIEF EXECUTIVE OFFICER(CEO) AND CHIEF
FINANCIAL OFFICER(CFO):
√
6.(i)a)
The financial statements do not contain any materially untrue
statement or omit any material fact or contain statements that
might be misleading
√
these statements together present a true and fair view of the
company’s affairs and are in compliance with existing accounting
standards and applicable laws
6.(ii)
There are, to the best of knowledge and belief, no transactions
entered into by the company during the year which are fraudulent,
illegalorviolationofthecompany’scodeofconduct
7.0
REPORTING AND COMPLAINCE PEPORTING OF CORPORATE
GOVERNANCE:
7.(i)
The company shall obtain a certificate from a practicing Professional
Accountant/Secretary (Chartered Accountant/Cost and Management
Accountant/Chartered Secretary) regarding compliance of conditions
of Corporate Governance Guidelines of the Commission and shall
send the same to the shareholders along with the Annual Report on
a yearly basis
7.(ii)
The directors of the company shall state, in accordance with the
Annexureattached,inthedirectors’reportwhetherthecompanyhas
complied with these conditions
Remarks
√
5.(i)
6.(i)b)
Not Complied
√
SUBSIDIARY COMPANY
5.(v)
2 0 13
Compliance Status
5.
5.(ii)
re p o r t
√
√
√
√
119
Social Islami Bank Ltd.
Report on National Integrity Strategy
Integrity means behavioral excellence influenced by morality
and honesty and adherence to time-tested norms, values,
customs and principles of a society. At the individual level, it
means being duty-bound and honest.
National Integrity Strategy (NIS) is a living document of the
Bangladesh Government towards the vision 2020 with the
hope that this NIS will play its desired role in building the
Bangladesh as “Golden Bengal”.
Bangladesh Government has undertaken programs through
NIS to establish a system of governance that creates trust
amongcitizens.TheNISrecognizesthatthestate’slegal
institutions require watchdogs within the general population
tokeepitaccountable.Forthisreasonthestrategytargetsa
broad audience like State and Non State Organizations with
the vision to build this country as “Golden Bengal” where
the mission is to establish good governance in the state
institutionsandsociety.FollowingsaretheChallengesofNIS
in State Organizations:
• PromulgationofCivilServiceAct;
• Increasedfunctionalfreedomofpublicservicewith
stronger accountability;
• Enhancedefficiencyandeffectivenessinadministrative
activities;
• Establishinglinksbetweenpromotion,transfer,payand
emoluments with appraised performance;
• Introductionofacompetitivepayandincentivestructure;
• Overallreformbyensuringequitableopportunitiesfor
different cadre services;
• Buildingcitizen-friendlyenforcementagencies;
• Fair,neutralandvisibledecision-makinginpublic
administration.
National Integrity Strategy: Commercial Organizations in
the Private SectorThe private sector is playing an increasingly important role in
the socio-economic and contributing to wealth creation and
value addition to meet the demand of the population. Integrity
of this sector is of paramount importance. The culture of
loan-default needs to be eliminated beside that ‘Protection of
ConsumerRightsAct’hastobeimplementedproperly.The
main challenges in this regard are:
• Addressingoftheloan-defaultproblem;
• Promotionofcorporategovernance;
• Awardingofperformance-basedfairsalaryandwagesto
the employees;
• Properenforcementofthelawsonconsumerrightsand
bankruptcy;
• Preventionofcollusivepracticesinbusinessbyenforcing
the Competition Act;
120
• Promotionofacultureofself-controlbyChambersand
Associations.
To support the total activities of the Government of
Bangladesh in establishing NIS, Social Islami Bank Limited
has formed a 7 (seven) members Committee called “SIBL
Integrity Committee” as per BRPD Circular No: 21 dated 12
November 2013 headed a Deputy Managing Director also
determinedaFocalPoint.Thecommitteehasundertaken
the total responsibilities to work closely with the Bangladesh
Bank and Bangladesh Government to implement the NIS
and in this regard primary work plan have also been finalized
as the first step. The Prime objective of this committee is to
prevent corruption and to establish integrity in every sphere of
the bank as well as in the State and society.
SOCIAL ISLAMI BANK LTD (SIBL), a second-generation
bank, operating since 22 November, 1995 based
on Shariah Principles, has now 94 branches all over
the country with two subsidiary companies - SIBL
Securities Ltd. & SIBL Investment Ltd. It is a prime goal
and responsibility of the SIBL to secure fundamental
human rights, and ensure equality of opportunity and
dispensation of economic and social justice. SIBL is
dedicatedtoensuringemployee’swelfare.
Webelievethattheissueofintegrityshouldnotstopatthe
top level of institutions. Rather, each institution is expected to
find mechanisms to implement institution-specific strategies
at different tiers to implement National Integrity Strategy.
Steps should be taken for Promotion of Integrity
• Toensuretheattainmentofajustandegalitariansociety,
free from exploitation of man by man.
• Toguaranteefundamentalhumanrightsandfreedom.
• To respect human dignity and worth of the human person.
• Tocreateequalopportunityforallcitizens.
• Toremovesocialandeconomicinequalitybetweenman
and man and ensure equitable distribution of wealth and
opportunities among citizens.
• Toensureparticipationofwomeninallspheresof
national life.
• Topayeveryoneforhisworkonthebasisofthe
principle “from each according to his abilities to each
according to his work”.
on behalf of SIBL Integrity Committee.
Mohammad Shoeb, FCA
FocalPoint,SIBLIntegrityCommittee
a n n u a l
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2 0 13
Report on Going Concern
The board of Directors of the bank has made an annual
assessment whether there exists a material uncertainty
which may be an indicative of significant doubt about
SIBL’sabilitytocontinueasgoingconcern.Inthisregard,
the Board of Directors of the bank has made appropriate
inquiries, analysis, review and estimation in the backdrop
of existing and future financial and operational strength
of the bank. The Board of Directors are convinced and
provide a reasonable assurance to the stakeholders as to
SIBL’scontinuityasagoingconcernfortheforeseeable
future and accordingly the bank has been adopting the
‘goingconcern’basisforpreparingfinancialstatements.
The financial performance of the bank was good and
improvingsteadilyovertheyears.Whileanalyzingthe5
years comparative financial position of the bank as depicted
in page no. 43 of this Annual Report 2013, we find that
almost all the basic indicators of the bank is positive and
thebankismovingtowardsitswayof‘Journeytowards
continuousexcellence’leavingagrowthcurve.
• Gainingpublicconfidencedaybyday.Bothdeposits
and investment are maintaining upward trend over the
previous years.
• Builtanexcellentregulatorycomplianceculture.
• PracticingbestCorporateGovernance.
• Introducingstate-of-the-artInformation&Technology.
• InventedIT-baseddiversifiedproductsandservices
that are tailored to different economic class of people
of the society in order to bring the un-banked people
into banking channels.
• Motivatedemployees,excellentworkingworkforce&
team spirit, competitive pay scale & long term benefits.
• OutstandingAssetsLiabilityManagementforproper
liquidity planning & management.
• Expandedareaofoperationfromurbantorural.
• EffectiveRiskmanagementsystem.
• Outstandingassetquality.
• OutstandingCreditRatingbothinshorttermandlong
term.
• Excellentpubliccommunication,brandingandmedia
image.
• Payingdividendconsistently.
• Positivekeyfinancialindicators.
Banking business involves a high degree of risk and SIBL
is operating in an industry involving both external and
internal risk factors having direct as well as indirect effects
on the financial position. Here, the Board of Directors of
the Bank has carefully analyzed the financial position of
the bank and estimated the issue of continuity of the bank
as going concern considering some risk factors that may
seriously effects. If any of the following risks actually occur,
business, results of operations and financial condition
could suffer.
(A) Profit Rate & Foreign Currency Risks
Volatility in money market both in local and foreign,
increase in Investment demand, Increase Import and
decrease exports, slow remittance etc. may raise the
rate of profit on deposit & borrowings including foreign
currency.TheBank’sfinancingindifferentsectors
is generally structured at fixed and variable rates
forspecifiedterms.AchangeintheGovernment’s
monetary policy also tends to increase the rates.
Increaseinprofitratesornon-availabilityofForeign
Currencycouldadverselyaffectthebank’soperations.
Perception
Although the consequences of unusual and abrupt
increase in the deposit and borrowing rate cannot
be avoided, Social Islami Bank Ltd. (SIBL) takes all
the appropriate measures to minimize the negative
consequences.Forprofitraterisks,theBankcurrently
pursues a policy under which profit rates can be revised
for any unusual and abrupt change at its own discretion
as and when required. Moreover, SIBL foreign exchange
risk remains at minimum level as all of its foreign trade
& remittance transactions are carried out on behalf of
the customers and there is no direct selling or buying of
foreign currency i.e. dealing room operation. The demand
of foreign currency payment is mostly backed by Exports
earnings and remittance. Treasury continuously monitors
price movements of foreign exchange and uses various
hedging techniques to manage its open position in such a
way that minimizes risk and maximizes return.
(B) Non-payment Risk
Non-payment risk can arise if the Bank becomes
unable to repay to its depositors over the counter or
on time due to the impacts of (i) global financial crisis
(ii) pre-matures encashment (iii) economic recession (iv)
natural calamity (v) international sanctions (vi) adverse
classification of investments (vii) serious liquidity crunch
(viii) assets liability mismatch (ix) limit less ID ratio etc.
may have a direct negative impact on cash flow and
profitability of the bank. The situation would fell the
bank into serious trouble.
121
Social Islami Bank Ltd.
Perception
The management of SIBL is always concerned about
the prevailing and upcoming future changes in the global
financial policies and shall response appropriately and
timely to safeguard its interest. The Bank has a very
strong financial background as well as cash flow along
withdiversifiedbusinesspackage,that’swhytheriskis
very negligible. Moreover, the bank has a clear policy to
maintain its ID Ratio (Investment Deposit Ratio) within
90% and an ideal deposit mix. Structured liquidity profile
of the bank shows that all assets and liabilities are being
well managed and shaped. The bank has specific policy
guidelineson‘stressliquiditymanagement’.Besidesthat,
ALCO (Asset Liability Committee) of the bank is a powerful
committee entrusted with the overall liquidity management.
So the bank believe that if for some unwanted situation
excessive premature encashment occurs over the counter,
capable to shape up things. In the history of operation,
SIBLhasnotrecordedasinglecaseof‘Non-Payment’.
(C) Managements Risk
There may arise Management Risk in the Bank
which associates ineffectiveness, conflict of interest,
destructive or under-performing management which
may hamper the smooth operation of the Bank and fell
the organization in a question of going concern.
Perception
Social Islami Bank Limited (SIBL) has a very effective
and competent management which consistently
makes effective policy decision. Since inception upto 31.12.2013, the board of Directors of the Bank has
discharged their duties and responsibilities through
299 number of board meeting. The Board of Detectors
has formulated code of conducts including role and
responsibilities for its Chairman, Board Member, Managing
Director,CompanySecretary,ChiefFinancialOfficer&
Head of Internal Control & Compliance Division of the
Bank. The bank is a compliant of corporate governance
system imposed by Bangladesh Securities and Exchange
Commission (BSEC) and there is no such evidence
recorded so far which amounts to- management risk.
(D) Operational Risk
Operational risk is the risk of potential losses from
a breakdown in internal processes and systems,
deficiencies in people and management or operational
failure arising from external events which may seriously
shake the entity towards its continuation as going
concern.
Perception
The internal control and compliance division of the bank
controls the operational procedure of the Bank. Internal
Control and compliance division undertakes periodical
122
and special audit of the Branches and departments at the
Head Office to review the operation and compliance of
statutory requirements. The Audit Committee of the Board
subsequently reviews the reports of the internal control
and compliance division. So, the bank is aware about its
operational risk and accordingly policies and procedures
are regularly been reviewed by the Board of Directors of
the bank to ensure risk free operation.
(E) Business Risk
The bank may face business risk while doing their
banking business. Business risk implies uncertainty
in profit or danger of loss and the events that could
pose a risk due to some unforeseen events in future,
which causes business of SIBL to fail. Moreover,
strong competitor in the industry may compel SIBL to
squeeze its operations or may invite hard competitions
Perception
SIBL has a very good profitability record and the
management is well aware about business risk. The
Bank is operating in a highly competitive market as
modern banking industry has brought greater business
diversification. The Bank has a dedicated team to find new
scope to expand its business. The risk management team
to identify and manage different types of risk including
business risk. SIBL Securities Limited and SIBL Investment
Limited are the subsidiaries of SIBL incorporated with
the objective to carry on the business of stock brokers,
dealers in relation to shares and securities dealings, to
underwrite, manage and distribute the issue of stocks
etc. Thus SIBL also reduces the industry risk by making
versatile opportunity of business in the financial sector.
Moreover, to make the operation competitive, the bank
has implemented one of the best world class Information
Technology platform in the bank to ensure faster and
safer delivery of services to the customers on 24/7 basis.
The bank has built up its alternative delivery channel
infrastructure to offer the full suite of ATMs, POS, Internet
Banking, and SMS banking for its customers. In order to
support its growth strategies in future, the bank has made
a strategic decision to change its core banking software
to a more robust and internationally tested system.
As its unique contribution to a truly broad-based and
participatory electronic banking system in Bangladesh,
SIBL currently has a wide coverage of 94 Branches, as on
December 31, 2013. So, the board of directors estimated
that there is no sign that the bank fall in trouble on the
ground of business risk and hard competitions.
(F) Potential or Existing Government Regulations:
The Bank operates under the specific guidelines laid
down by Bangladesh Bank, Bangladesh Securities and
Exchange Commission (BSEC) and other regulatory
authorities. The Bank also operates under Companies
a n n u a l
Act 1994 and other related regulations, Bank
Companies Act 1991, Income Tax Ordinance 1984,
Value Added Tax (VAT) Act 1991 and Value Added Tax
(VAT) Rules 1991. Any abrupt change of the policies
made by the regulatory authorities may adversely affect
the business of the Company.
Perception
Unless any policy change negatively and materially
affects the industry as a whole, the business of the
Bank is expected not to be affected significantly. Like all
ScheduledBanksinBangladesh,SIBL’sassetgrowthand
cost of CRR and SLR are adjustable as per requirement.
(G) Potential Changes in Global or National Policies:
Afinancialinstitution’sabilitytooperateaprofitable
business is directly related to the monetary and fiscal
policy of the country at any given time. Imposition
of restrictive monetary and/or fiscal policy by the
governmentatanytimemayaffectacompany’s
profitability. Again, change in the existing global or
national policies can have either positive or negative
impacts for the Bank.
Perception
The management of SIBL is always concerned about the
prevailing and upcoming future changes in the global or
national policy and responds appropriately and timely to
safeguard its interest.
(H) History of Non-Operation:
Is there any history for the Bank to become nonoperative from its commercial operation.
Perception
The Social Islami Bank Limited (SIBL), a secondgeneration bank, was incorporated on November 05,
1995. SIBL started its commercial operation on November
22, 1995 and completed 18 (Eighteen) year successful
banking operation based on Shariah Principles without
having any history of non-operation. SIBL has now
94 branches all over the Country with two subsidiary
companies - SIBL Securities Ltd. & SIBL Investment
Ltd. Targeting poverty, The Social Islami Bank Limited
is indeed a concept of 21st century participatory three
sector banking model in one. In the formal sector, it
works as an Islamic participatory Commercial Bank
with human face approach to credit and banking on
the profit and loss sharing. The Bank is an independent
body that is operated by its Memorandum & Articles of
Association and other applicable laws implemented by
theGovernmentofBangladesh.Besides,theBank’s
financial strength is satisfactory. It has highly experienced
Directors and Management team which makes the Bank
re p o r t
2 0 13
more efficient and stronger for any commercial operations.
So, the chance of becoming non-operative for the Bank is
minimum.
(I) Portfolio Management Risk:
Poor quality of project appraisal, slack monitoring
of outstanding debts, inadequate/inappropriate
documentation and other forms of management
efficiencies may affect the quality of SIBL portfolio.
Perception
UndertheclosesupervisionofSIBL’sprudentshareholders
and the Board of Directors, the management of SIBL has
developed skills and ability to appraise a project efficiently,
ascertain the risk factors, address them and monitor
performance closely.
(J) Credit/Investment Risk:
Some of the customers or obligators may fail to meet
the terms of any contract or otherwise fail to perform
as agreed which will in turn reduce the profit of the
Bank,decreasingshareholders’earning.
Perception
Considering the key elements of credit/investment risk,
the Bank has segregated duties of the officers/executives
involved in credit related activities. Separate division
for Corporate, SME and retail has been formed which
are entrusted with the duties of maintaining effective
relationship with the customers, marketing of investment
products, exploring new business opportunities etc. for
transparency in the operation during the entire investment
period–i) Investment Approval Committee, ii) Investment
Administration Department, iii) Recovery Unit and iv)
Impaired Asset management have been set up.
Based on the above discussion, Board of Directors of
the bank anticipated that it is appropriate to adopt going
concern assumptions and there is no material uncertainty
in preparing financial statements.
Ma-assalam
On behalf of the Board of Directors
Major (Retd) Dr. Md. Rezaul Haque
Chairman
123
Social Islami Bank Ltd.
Audit Committee Report
Composition of the Audit Committee:
• TheAuditCommitteewasre-constitutedbytheBoardofDirectorsanasasub-committeeoftheBoardinits295th
Meeting held on 26th August, 2013 in compliance of the directives/ guidelines of Bangladesh Bank and BSEC.
• PresentCompositionoftheAuditCommitteeisasfollows:
Mr. Md. Abdur Rahman
(Independent Director) Chairman
Mr. Mohammad Azam
(Director)
Member
Mr. Md. Anisul Hoque
(Director)
Member
Mr. Abdul Mohit
(Director)
Member
• TheCompanySecretaryactsastheSecretaryoftheAuditCommittee.
Terms of Reference (TOR) of the Audit Committee:
• TheBoarddefinedTermsofReference(TOR)fortheAuditCommittee.ActivitiesoftheCommitteeareperformedas
per the said TOR.
• TheCommitteesubmitsitsreportdirectlytotheBoardofDirectors.
Meetings of the Audit Committee:
o The Committee had its five (05) meetings during the year. Attendance of the Members was as follows :
Name of the Member
Tenure of Membership
No. of Meetings held
No. of Meetings Attended
Major(Retd)Dr.Md.RezaulHaque
From13.11.2012
To 25.08.2013
03
03
AlhajSultanMahmudChowdhury
From13.11.2012
To 25.08.2012
03
03
Mr.AbdulJabbarMollah
From06.02.2013
To 25.08.2013
03
03
Mr.MohammadAzam
From13.11.2012
to till date
05
03
Mr.AbdulAwalPatwary
From13.11.2012
To 25.08.2013
03
01
Mr.Md.AbdurRahman
From26.08.2013
to till date
02
02
Mr.Md.AnisulHoque
02
02
From13.11.2012
to 05.02.2013 and
From26.08.2013totilldate
Mr.AbdulMohit
From26.08.2013totilldate
02
02
o Minutes of all Meetings of the Audit Committee are properly recorded and copy thereof is sent to Bangladesh Bank
regularly.
124
a n n u a l
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Activities:
o
The Committee reviewed the financial statements of the first quarter, half year, third quarter and the full year
2013 and subsequently recommended to the Board for consideration and approval.
o
The Committee also reviewed the work of the Internal Audit Department and made suggestions for
improvement.
o
The Committee recognized the observations of the Internal Audit Department regarding internal control and
suggestions made to improve operational systems and procedures and their implementation.
o
The Committee reviewed the integrity of the financial statements of the Company to ensure that these reflect a
trueandfairviewoftheCompany’sstateofaffairsfortheyearendedon31stDecember2013.
o
The Committee while reviewing the financial statements ensured that proper disclosure required under
International Accounting Standards as adopted in Bangladesh have been made and also complied with the
Companies Act and various other rules and regulations applicable to insurance business.
o
The Committee discussed with the statutory auditors about the nature and scope of audit as well as had postaudit discussions to address areas of concern;
o
The Committee approved the internal audit plan and gave direction to the Internal Auditor where appropriate
for carrying out in depth audit to ensure that the Company or its assets are not exposed to undue risk;
o
The Committee reviewed the Internal Auditors reports and suggested appropriate actions where needed.
Internal Auditors were also advised to carryout audit of all the branches in each year. Branch audit reports are
required to ensure their effectiveness and suggest appropriate information where required;
o
The Committee reviewed the management report submitted by the statutory auditors and suggested
corrective measures and fixed time frame for their implementation; and
o
The Committee reviewed the performance of External Auditors during the last year and recommended for
approval of their appointment.
o
Pursuant to Condition # 3.4.1 of the Corporate Governance Guidelines issued by BSEC, the Committee
reviewedtheInternalControlSystemandFinancialStatements.TheCommitteedidnotfindanyconflictof
interest or any fraud, irregularity, material defect in the Internal Control System. There are no infringement of
laws, rules and regulations also.
o
The Committee is of the view that risk management associated with the banking business is adequately
controlled.
o
The Committee also reviewed the financial statements/investments of the subsidiaries i.e SIBL Securities
Limited and SIBL Investment Limited.
On behalf of the Audit Committee
Md. Abdur Rahman
Chairman of the Audit Committee
March 30, 2014
125
Social Islami Bank Ltd.
Report on Risk Management
In accordance with the roadmap /action plan (Ref. BRPD
Circular no. 14, dated 30 December 2007), Bangladesh
Bank has decided to start implementation of Risk Based
Capital Adequacy for Banks prepared in line with the
“International Convergence of Capital Measurement and
Capital Standards” as recommended by Basel Committee
onBankingSupervision(BCBS)fromJanuary2010.This
standard is based on the three pillars mainly named as:
i. Minimum capital requirements to be maintained by
the bank against Investment Risk, Market Risk and
Operational Risk.
ii. Process for assessing overall Capital Adequacy in
relationtothebank’sriskprofileandastrategyfor
maintaining its capital at an adequate level.
iii. To make public disclosure of information on
thebank’sriskprofiles,capitaladequacyandrisk
management system.
Capital Base for Minimum Capital requirement:For
the purpose of calculating regulatory capital requirement,
capital is categorized into the following three tiers:
1) Tier I Capital: Tier I capital, also called ‘Core
Capital’, comprises of highest quality capital
elements and includes: a) Paid up capital/
capital deposited with Bangladesh Bank b) Nonrepayable share premium account c) Statutory
Reserve d) General Reserve e) Retained Earnings f)
Minority Interest in subsidiaries g) Non-Cumulative
irredeemable Preference Shares and h) Dividend
Equalization Account
2) Tier II Capital: Tier II capital is also called
‘Supplementary Capital’ which represents some of
the characteristics of the Core capital and contribute
as the overall strength of a bank like as a) General
Provision b) Asset Revaluation Reserves c) All other
Preference Shares d) Perpetual Subordinated Debt
e) Exchange Equalization Account f) Revaluation
Reserves for Securities
3) Tier III Capital: Tier III capital is called ‘Additional
Supplementary Capital’, consisting of short-term
subordinated debt (original/residual maturity less than
or equal to five years but greater than or equal to two
years) is meant solely for the purpose of meeting a
proportion of the capital requirements for market risk.
Supervisory Review Process of the Bank
The key principle of the supervisory review process of
the banks is that-the bank has a process for assessing
overall capital adequacy in relation to our risk profile
andastrategyformaintainingthebank’scapitalatan
adequate level. In this regard SIBL has an exclusive
body and process documents for assessing overall risk
126
profile and the strategy to maintain adequate capital.
Adequate capital means enough capital to compensate
all the risks involved in bank business and to develop
and practice better risk management techniques to
monitor and managing risks.
Supervisory Review Process of SIBL
i)
The supervisory review process is planned not only to
ensure adequate capital to compensate all the risks
in business, but also to be confident that the bank
has better risk management techniques in monitoring
and managing risks.
ii) Itsetsourbankmanagement’sresponsibilityfor
developing an internal capital assessment process
and setting capital targets that are commensurate
withthebank’sriskprofileundercontrolenvironment.
It also encourages bank management to continue
and to bear responsibility for ensuring that the bank
has adequate capital to support its risks beyond the
minimum regulatory requirements.
iii) Maintaining adequate capital is not regarded as a
substitute for addressing fundamentally inadequate
control or risk management processes. The process
will establish relationship between the planning of
adequate capital against all risks and the strength
andeffectivenessofthebank’sriskmanagementand
internal control processes.
iv) The process is considered that following three main
areas of risks are focused a) Risks covered under
minimum regulatory capital, b) Other risks which are not
captured by minimum regulatory capital, (e.g., credit
concentration risk, interest rate risk in the Banking Book,
business and strategic risk); and c) Risk factors external
to the bank (e.g., business cycle effects).
v) Afurtherimportantaspectofbank’sownsupervisory
review process is that the review body is responsible
to move gradually towards more advanced
approaches for calculation of risk weighted asset
against Investment Risk, Capital Charges against
Market Risk and Operational Risk.
Main features of review process
In assessing capital adequacy, the management of the
bank is watchful on different particular stage of business
cycle in which the bank is operating. Rigorous, forwardlooking, stress testing etc. that identifies possible events
or changes in market conditions that could adversely
impact the bank is performed- are forecasted at an early
stage.Bankmanagementiskeenforensuringbank’s
adequate capital to support its risks. The five main
features of a rigorous process are a) Board and senior
a n n u a l
management oversight b) Sound capital assessment c)
Comprehensive assessment of risks d) Monitoring and
reporting and e) Internal control and review.
Internal Capital Adequacy Assessment Process (ICAAP)
WehavealreadyestablishedourmodelforICAAP.Some
experienced and efficient members are monitoring the
process on a regular basis. As a result of that considering
all the probable risk factors we have decided to maintain
a surplus capital @ 3% on MCR amount in order to
safeguardourbank’sRWAs.
Market Discipline
Scope and purpose
a) The purpose of Market Discipline in the Revised
CapitalAdequacyFrameworkistocomplementthe
minimum capital requirements and the supervisory
review process. The aim of introducing Market
Discipline in the revised framework is to establish
more transparent and more disciplined financial
market so that stakeholders can assess the position
of our bank regarding holding of assets and to identify
re p o r t
2 0 13
the risks relating to the assets and capital adequacy
tomeetprobablelossofassets.Forthispurpose,
SIBL has developed a set of disclosure containing
- key information on assets, risk exposures, risk
assessment processes so that capital of the bank
remain adequate to meet all the risks.
b) SIBL has a formal disclosure framework approved
by the management. The process of the disclosures
includes validation and frequency.
Disclosure framework
The following components are the disclosure requirements:
a) Assets b) Credit Risk on Banking Book c) Market risk in
Trading Book d) Operational Risk e) Specific Provisions, f)
Regulatory Capital and g) Capital Adequacy
In light of the above discussion and framework for
implementation of Basel-II, SIBL is ready to face the challenge
and the bank has a total eligible capital of Taka 1162.23 crore
as at 31 December 2013 against required capital of Taka
995.48 crore as a percentage (10%) of total risk weighted
assets of Taka 9983.42 crore as per Basel II requirement.
Comparative Analysis of Capital maintained throughout the year 2013
Particulars
(FigureinmillionTaka)
31.03.2013
30.06.2013
30.09.2013
31.12.2013
Capital Requirement
9641.12
9450.82
9705.01
9954.73
Capital Maintained
10761.86
10638.75
10743.55
11623.54
Core capital
9165.25
9016.65
9076.50
10000.97
Supplementary capital
1596.61
1622.10
1667.05
1622.57
CorecapitaltoRWAs
9.51%
9.54%
9.35%
10.06%
SupplementarycapitaltoRWAs
1.65%
1.72%
1.72%
1.63%
RiskWeightedassets
96411.17
94508.24
97050.06
99547.28
a) Credit Risk
88799.11
86454.46
88248.16
90807.81
1. On Balance Sheet
65809.81
63949.24
69650.88
71079.25
2. Off Balance Sheet
22989.30
22505.22
18597.28
19728.56
b) Operation Risk
6432.70
6432.70
6432.70
6432.70
c) Market Risk
1179.36
1621.08
2369.20
2306.77
Capital Adequacy Ratio
11.16%
11.26%
11.07%
11.69%
10%
10%
10%
10%
Minimum Capital Requirement
Performance of SIBL regarding maintenance of capital as per Basel-II
As per Basel-II requirement, Social Islami Bank Limited has been maintaining capital adequacy adequately to support the
Investment policy, Risk management policy of the bank which ultimately supporting the overall growth of the bank. It appears from
the above table that SIBL has been maintaining its CAR adequately to cope up with the requirement. Total capital has increased
from Tk 10761.86 million to Tk.11623.54million(Fromthequarterto31.03.2013to31.12.2013)registeringanincreaseof8.01%.
on behalf of Risk Management Committee.
Mohammad Shoeb FCA
Senior Vice President &
Head of Risk Management Division
127
Social Islami Bank Ltd.
Market Discloser under Pillar-III of BASEL-II
A) Scope of Application
Qualitative Discloser
a) The name of the top corporate entity in the group to which this
guidelines applies
Social Islami Bank Limited
b) An outline of difference in the basis of consolidation for
accounting and regulatory purposes, with a brief description of the
entities within the group (i) that are fully consolidated;(ii) that are
given a deduction treatment; and (iii) that are neither consolidated
nor deducted (e.g. where the investment is risk-weighted).
The quantitative disclosures are made on the basis of
both solo & consolidated basis. SIBL has two subsidiaries
and an offshore banking unit; i) SIBL Securities Ltd & ii)
SIBL Investment Ltd. Both solo & consolidated financial
statements have been prepared under applicable financial
reporting standard & related instructions/ circulars issued by
Bangladesh Bank from time to time. The assets, liabilities,
revenues & expenses of the Subsidiaries are combined with
the parent company (SIBL) on consolidated basis. So assets
of the subsidiaries & offshore banking unit are risk weighted
and equities of the subsidiaries are crossed out with the
investment of SIBL while consolidating.
c) Any restrictions, or other major impediment, on transfer of
funds or regulatory capital within the group.
Not applicable
Quantitative Disclosures
d) The aggregate amount of capital deficiencies in all subsidiaries
not included in the consolidation that are deducted and name(s)
of such subsidiaries.
Not Applicable
B) Capital Structure
Qualitative Disclosures
a) Summary information on the terms and conditions of the main
features of all capital instruments, especially in the case of capital
instruments eligible for inclusion in Tier-1 or Tier-2.
As per Bangladesh Bank BASEL-II guidelines; Tier-I of the Bank
consist of (i) Paid up capital (ii) Non-repayable Share Premium
Account (iii) Statutory Reserve (iv) General Reserve (v) Retained
Earnings and (vi) Minority interest in subsidiaries.
Tier-2 Capital consists of (i)General provisions against
unclassified Investments, Off Balance Sheet Exposures &
Off shore Banking unit (ii) 50% of Asset Revaluation Reserve
(iii) 10% of revaluation reserve for equity instruments (iv)
Dividend equalization fund (v) non-convertible portion of
sub-ordinate bond.
Quantitative Disclosures
b) The amount of tier 1 Capital, with break up
Solo
Consolidated
i)Fullypaidupcapital
7031.41
7031.41
ii) Statutory Reserve
2122.99
2122.99
-
-
iii) Non-R epayable share premium account
iv) General Reserve
-
6.67
v) Retained Earnings
846.53
848.68
-
-
vi) Minority interest in subsidiaries
128
As on December 31, 2013 (in million taka)
a n n u a l
re p o r t
2 0 13
vii) Non -cumulative irredeemable preference shares
-
-
viii) Dividend equalization account
-
-
ix) Other(if any item approved by Bangladesh Bank)
Sub-Total (Core capital) A(i-ix)
-
-
10000.94
10009.76
1622.57
1622.57
-
-
1622.57
1622.57
c)Tier 2 and Tier 3 capital
i
Tier 2 capital
ii
Tier-3 capital (Eligible for market risk only)
Sub Total (Supplementary Capital) B (i+ii)
0
0
11623.52
11632.33
d) Other deductions from capital
e) Total Eligible Capital (A+B)
C) Capital Adequacy
Qualitative Disclosers
(a)Asummarydiscussionofthebank’sapproachtoassessthe SIBL has adopted standardized approach for computing
adequacy of its capital to support current and future activities. capital charge for credit risk & market risk and basic indicator
approach for operational risk. Assessment for capital
adequacy is carried out in conjunction with the guidelines and
regulations by Bangladesh Bank from time to time. Assessing
regulatory capital in relation to overall risk exposures of a
bank is an integrated and comprehensive process. SIBL,
through its SRP team, is taking active measures to identify,
quantify, manage and monitor all risks to which the Bank
is exposed to. Assessment of Regulatory Capital will be in
alignment with the findings of these exercises.
Quantitative Disclosures
Particulars
As on December 31, 2013 (in million taka)
Solo
Consolidated
b)
Capital requirements for Investment (Credit) Risk
91111.66
90807.90
c)
Capital requirements for Market Risk
2307.00
2307.00
d)
Capital requirements for Operational Risk
6415.50
6433.00
Total capital requirement
9983.42
9954.79
Capital Adequacy Ratio:
11.64%
11.69%
Tier-I CAR
10.01%
10.06%
Tier-II CAR
1.63%
1.63%
e)
Total CAR
129
Social Islami Bank Ltd.
D) Investment Risk
Qualitative Disclosures
a) The General Qualitative disclosures requirement with respect to investment (credit) Risk, including:
i) Definitions of past due and impaired (for accounting purpose)
As per Bangladesh Bank guidelines, any investment if not paid
within the fixed expiry date will be treated as Past due/ Overdue.
Bangladesh Bank issued circulars from time to time for
strengthening Investment discipline. All Investments are
categorized into four for the purpose of classification namely (i)
ContinuousInvestment(ii)DemandInvestment(iii)FixedTerm
Investment and (iv) Short-term Agriculture & Micro Investment.
Classification rules for the above 4 categorized Investments
are as under:
Continuous and Demand Investments are classified as:
‘Sub-Standard’- if it is past due / overdue for 3 months or
beyond but less than 6 months.
‘Doubtful’- if it is past due / overdue for 6 months or beyond
but less than 9 months.
‘Bad/Loss’- if it is past due / overdue for 9 months or beyond
from the date of expiry or claim by the bank or from the date
of creation of forced investment.
Fixed Term Investments are classified as:
(a) In case of any Installment(s) or part of a Fixed Term
Investment amounting up-to Taka 10 lac is not repaid within
the due date, the amount of unpaid installment(s) will be
termed as past due / overdue investment In such a case
following classification rules will be applied:
‘Sub-Standard’- if the amount of past due/overdue
installment(s) is equal or more than the amount of
installment(s) due within 6 months; the entire Investment
amountwillbeclassifiedas‘Sub-Standard’.
‘Doubtful’- if the amount of past due/overdue installment(s)
is equal or more than the amount of installment(s) due within
9 months, the entire Investment amount will be classified as
‘Doubtful’.
‘Bad/Loss’- if the amount of past due/overdue installment(s)
is equal or more than the amount of installment(s) due within
12 months, the entire Investment amount will be classified
as‘Bad/loss’.
(b) In case of any Installment(s) or part of a Fixed Term
Investment amounting more than Taka 10 lac is not repaid
within the due date, the amount of unpaid installment(s) will
be termed as past due / overdue investment In such a case
following classification rules will be applied:
‘Sub-Standard’- if the amount of past due/overdue
130
a n n u a l
re p o r t
2 0 13
installment(s) is equal or more than the amount of
installment(s) due within 3 months; the entire Investment
amountwillbeclassifiedas‘Sub-Standard’.
‘Doubtful’- if the amount of past due/overdue installment(s)
is equal or more than the amount of installment(s) due within
6 months; the entire Investment amount will be classified as
‘Doubtful’.
‘Bad/Loss’- if the amount of past due/overdue installment(s)
is equal or more than the amount of installment(s) due within
9 months, the entire Investment amount will be classified as
‘Bad/Loss’.
Short-term Agricultural and Micro-Investment are classified
as under:
‘Sub-Standard’-If the investment not repaid within the due
date as stipulated in the agreement and if such irregular
continues,theinvestmentwillbeclassifiedas‘Sub-Standard’
after a period of 12 month, as ‘Doubtful’ after the period of
36 months and as “Bad/loss’ after a period of 60 months
from due date.
Continuous Investment, Demand Investment or Term
Investment which will remain overdue for a period of 2 month
ormorewillbeputinto‘SpecialMentionAccount’.
ii) Description of approaches followed for specific and general
allowances and statistical method;
The rates of provisions are as under:
a) General Provisions-will be maintained:
Banks will be required to maintain General Provision in the
following way :
(1) @ 0.25% against all unclassified loans of Small and
Medium Enterprise (SME) as defined by the SME & Special
Program Department of Bangladesh Bank from time to time
and @ 1% against all unclassified loans (other than loans
under Consumer Financing, Loans to Brokerage House,
Merchant Banks, Stock dealers etc., Special Mention
AccountaswellasSMEFinancing.)
(2)@5%ontheunclassifiedamountforConsumerFinancing
whereas it has to be maintained @ 2% on the unclassified
amountfor(i)HousingFinanceand(ii)LoansforProfessionals
tosetupbusinessunderConsumerFinancingScheme.
(3) @ 2% on the unclassified amount for Loans to Brokerage
House, Merchant Banks, Stock dealers, etc.
(4) @ 5% on the outstanding amount of loans kept in the
‘SpecialMentionAccount’.
(5) @1% on the off-balance sheet exposures. (Provision will
be on the total exposure and amount of cash margin or value
131
Social Islami Bank Ltd.
of eligible collateral will not be deducted while computing
Off-balance sheet exposure.)
b) Specific Provisions-will be maintained:
i) Sub-standard: @ 20%
ii) Doubtful: @ 50%
i) Bad /Loss: @ 100%
c) Provision for Short-term Agricultural and Micro Investment:
i) All Investment except bad/loss: 5%
ii) Bad/Loss: @ 100%
iii)DescriptionoftheBank’sInvestmentRiskManagementPolicy:
Social Islami Bank Limited has a well defined Investment
Risk Management Manual duly approved its Board of
Directors which is reviewed annually. Investment risk is one
of the major risks faced by the bank and such investment risk
management of the bank has been designed to address all
risks associated with investments.
The Bank has segregated duties of the Officers / Executives
involved in investment related activities. A separate Corporate
Division has been formed at Head Office, which is entrusted
with the duties of maintaining effective relationship with the
customer, marketing of Investment products, exploring new
business opportunities etc. Moreover, investment approval,
administration, monitoring and recovery functions have
been segregated. For this purpose, three separate units
have been formed within the Investment Risk Management
Division. These are (a) Investment Risk Management Unit, (b)
Investment Administration Unit and (c) Investment Monitoring
Unit. Investment Risk Management Unit is entrusted with the
duties of maintaining asset quality, assessing risk in lending
to a particular customer, sanctioning credit, formulating
policy / strategy for lending operation etc.
A thorough assessment is done before sanctioning of
investment facility at Investment Risk Management Unit. The
risk assessment includes borrower risk analysis, financial
analysis, industry analysis, historical performance of the
customer, security of the proposed Investment facility etc.
The assessment process starts at Corporate Division by the
Relationship Manager/Officer and ends at Investment Risk
Management Unit. Proposal beyond their delegation are
approved / declined by the Executive Committee and / or
the Management.
In determining single borrower / large investment limit,
the Bangladesh Bank instructions are strictly followed.
Internal audit is conducted on periodical interval to ensure
compliance of Banks and regulatory policies. Investments
areclassifiedasperBangladeshBank’sguidelines.
132
a n n u a l
re p o r t
2 0 13
Quantitative Disclosures
b) Total gross Investment/ Credit Risk exposures broken
down by major types of Investment exposures.
Mode of Investment
Musharaka
Murabaha
Mudaraba
Bai-Muazzal
Hire-Purchase Sirkatul Meelk
Installment Investment Scheme
Quard
Bai-Salam
Staff Loan
Ijarah
Visa Card
Purchase & Negotiation
Total
c) Geographical Distribution of exposures, broken
down in significant areas by major types of credit
exposure.
d) Industry or counterparty type distribution of
exposures, broken down by major types of
Investment/credit exposure.
FigureinMillion
As on 31.12.2013
580.26
3090.25
2147.09
49304.24
12069.61
0.20
7895.56
38.04
944.29
180.06
148.99
9523.75
85,922.33
In million Tk.
Name of the Division
Dhaka
Chittagong
Sylhet
Rajshahi
Khulna
Rangpur
Barisal
Total
As on 31.12.2013
60489.65
18658.53
2525.95
230.35
3262.62
537.89
217.34
85922.33
In million Tk
Sectors
Commercial lending
ExportFinancing
House Building Investment
Consumer Investment Scheme
Small and Medium Enterprises
Micro Investment
Other Investments
Allied concern of Directors of SIBL
Executives & Staffs of SIBL
Agricultural Industries
Textile Industries
Food&AlliedIndustries
Pharmaceutical Industries
Leather, Chemical, Cosmetic etc.
Construction Industries
Cement and Ceramic Industries
As on 31.12.2013
23058.65
4850.94
2596.71
1635.57
8242.40
19.27
13766.20
1.42
1128.18
922.80
14194.79
1601.34
109.19
222.03
3428.42
632.30
133
Social Islami Bank Ltd.
Service Industries
Transport and Communication Industries
Other Industries
Total
e) Residual contractual maturity break down of the
whole portfolio, broken down by major types of
investment/credit exposure.
755.31
592.80
8164.02
85922.33
In million Tk.
Particulars
As on 31.12.13
Re-payable on Demand
4242.31
Not more than 3 months
26475.59
Over 3 months but not more than 1 year
39240.36
Over 1 year but not more than 5 years
15592.81
Over 5 years
371.26
Total
f)
By major industry or counterparty type
85922.33
Amount of impaired investments and if available, past due investments
In million Tk.
Particulars
As on 31.12.2013
Past due
--
Special Mention Account
429.71
Sub-standard
122.87
Doubtful
859.56
Bad/Loss
3,610.90
Total
5,023.04
Charges for specific allowances and charge-offs during the period
In million Tk.
Particulars
As on 31.12.2013
Provision for unclassified investment
84.75
Provision for classified investment
752.69
Off Balance sheet exposure
g) Gross Non Performing Assets (NPAs)
Gross Non Performing Assets of the bank is 4593.33 Million
Non Performing assets to outstanding investment
Non Performing assets to outstanding investment is 5.35%
In million Tk.
Movement of non-performing assets
Opening balance
2532.86
Addition
2060.47
Closing Balance
4593.33
In million Tk.
Movement of Specific provisions for Non performing
assets
Opening balance
970.13
Provision made during the year
752.69
Write-off
Writebackofexcessprovision
Closing balance
134
27.06
30.77
1692.05
a n n u a l
re p o r t
2 0 13
E) Equities: Disclosures for Banking Book Positions
Qualitative Disclosures
a) The general Qualitative Disclosures requirement with respect to equity risk, including:
a) Differences between holdings on which capital
gains are expected and those taken under other
objectives including for relationship and strategic
reasons ;and
Social Islami Bank limited has two categories of equity investments
namely (i) Quoted Shares- traded in the secondary market of DSE &
CSE like common stock, mutual fund, bond etc. and (ii) Unquoted
Shares- currently not tradable in the secondary market.
Unquoted shares include shares and securities which are characterized
and categorized as (i) Held to maturity (ii) long term investment i.e.
the Bank does not have any intention to sell securities immediately
or in the near future (iii) Securities acquired under private placement
which will be traded in the secondary market only after completion
of required legal formalities with the BSEC (Bangladesh Securities &
Exchange Commission), DSE, CSE as per prevailing laws etc.
b) Discussion of important policies covering the
valuation and accounting of equity holdings in
the banking book, This includes the accounting
techniques and valuation methodologies used,
including key assumptions and practices affecting
valuation as well as significant changes in these
practices.
Investment in Shares and Securities are for gaining dividend income or
capital gain. Dividend income are recognized in the books of accounts
of the bank as and when such dividend is received or right to receive
such dividend is established.
Both Quoted shares and unquoted shares are valued at cost and
necessary provisions are maintained if the price falls below the cost.
At the time of calculation of unrealized gain or loss of quoted shares,
sufficient provisions on shares & securities are made in the books
of accounts after netting off the values of the portfolios but however
unrealized gains are not accounted for. As per Bangladesh bank
guidelines, HTF (Held for Trading) securities are revalued once in a
week using marking to market concept and all such securities are
revalued once in a year according to the Bangladesh bank guidelines.
Quantitative Disclosures
As on December 31, 2013
In million Taka
Particulars
Solo
Consolidated
a)
Value disclosed in the balance sheet of investments, as well as the fair value of those
investments, for quoted securities a comparison to publicly quoted share values where
the share price is materially different from fair value.
906.62
906.62
b)
The cumulative realized gains (losses) arising from sales & liquidations in the reporting
period.
-
-
c)
Total unrealized gains (losses)
(182.90)
(182.90)
d)
Total latent revaluation gains (losses)
-
-
Any amounts of the above included in tier-2 capital
-
-
Specific Market Risk
90.66
90.66
General Market Risk
90.66
90.66
e)
Capital requirements broken down by appropriate equity groupings, consistent with
thebank’smethodology,aswellastheaggregateamountsandthetypeofequity
investments subject to any supervisory provisions regarding regulatory capital
requirements.
135
Social Islami Bank Ltd.
F) Profit Rate Risk in the Banking Book
Qualitative Discloser
a) The general qualitative discloser requirement
including the nature of Profit Rate Risk in the
Banking Book (PRRBB) and key assumptions,
including assumptions regarding Investment
prepayments and behavior of non-maturity
deposits, and frequency of PRRBB measurement
Profit rate risks in the banking book are taken into account as one
of the most potential risk. Sources and types of profit rate risks in
banking book are (i) Gap or mismatch risk (ii) basic risk (iii) Net position
risk (iv) embedded option risk etc. Changes in Profit rate in the market
may adversely affect the financial matters of a bank such as Current
Earnings, Net Investment Income, Net Worth etc. In the long run,
impact on cash flows of the earning assets is mostly visible which
may lead to asset liability mismatch.
Quantitative Discloser
(b) The increase (decline) in earnings or economic
value (or relevant measure used by management)
for upward and downward rate shocks according
to management’s method for measuring IRRBB,
broken down by currency (as relevant)
Particulars
Figureinmillion
1-90 Days
Over 3 Month-Up to
6 Months
Over 6 Months - Up to
1 Year
Risk Sensitive Assets (RSA)
31037.9
16583.1
34901.2
Risk Sensitive Liabillities (RSL)
59453.9
11837.4
8967.3
Gap
-28416.0
4745.7
25933.9
Cumulative Gap
-28416.0
-23670.3
2263.6
1%
1%
1%
Earnings Impact (Cum. Gap*PRC)
-284.16
-236.703
22.636
Accumulated Earnings Impact to Date
-284.16
-520.863
-498.227
Adjusted Profit Rate Change (PRC)
G) Market Risk
Qualitative Discloser
136
a) i) Views of BOD on trading / investment activities
The Board of Directors of Social Islami bank Limited approves policies
related to market risks by setting up limits and reviews of compliance
status regularly.
ii) Method used to measure market risk
Standardized approach is being used to measure the market risk. The
total capital requirement in respect of market risk is the aggregate
capitalrequirementcalculatedforeachoftherisksub-categories.For
each risk category minimum capital requirement is measured in terms
of two separately calculated capital charges for “specific risk” and
“general market risk”.
a n n u a l
re p o r t
2 0 13
iii) Market risk management system
The Treasury Division manages market risk covering liquidity, profit
rate and foreign exchange risks with oversight from asset-liability
Management Committee (ALCO) comprising senior executives of the
Bank. ALCO is chaired by the Managing Director. ALCO meets at
least once a month.
iv) Policies and processes for mitigating market risk
There are approved limits for Investment deposit ratio, liquid assets
to total assets ratio, maturity mismatch, commitments for both onbalance sheet and off-balance sheet items and borrowing from money
market and foreign exchange position. The limits are monitored and
enforced regularly to protect the market risks. The exchange rate of
the Bank is monitored regularly and the prevailing market condition,
exchange rate, foreign exchange position and transactions are
reviewed to mitigate foreign exchange risks.
Quantitative Discloser
AsonDecember31,2013
b) The capital requirements for
Solo
Consolidated
-
-
Equity position risk
181.32
181.32
Foreignexchangerisk
49.35
49.35
-
-
230.67
230.67
Profit rate risk
Figureinmillion
Commodity risk
Total Capital Requirement
H) Operational Risk
Qualitative Disclosures
i) Views of BOD on system to reduce operational risk
Operational risk implies the risk or loss of harm resulting from
inadequate or failure of internal processes, people and systems or from
external events. Capability to carry out a large number of transactions
effectively and accurately while complying with applicable laws and
rules constitutes operational risk management activities of the bank.
The policy for operational risks including internal control & compliance
risk is approved by the board taking into account relevant guidelines
of Bangladesh Bank. Audit Committee of the Board directly oversees
the activities of internal control & Compliance to protect against all
operational risk.
ii) Performance gap of executive and staffs
SIBL has a policy to provide competitive package and best working
environment to attract and retain the most talented people available in the
industry.SIBL’sstrongbrandimageplaysanimportantroleinemployee
motivation. As a result, there is no significant performance gap.
iii) Potential external events
No potential external events are expected to expose the Bank to
significant operational risk.
iv) Policies and process for mitigating operational risk
The policy for operational risks including internal control & compliance
risk is approved by the Board taking into account relevant guidelines
of Bangladesh Bank. Policy guidelines on Risk Based Internal Audit
137
Social Islami Bank Ltd.
(RBIA) system is in operation. As per RBIA branches are rated
according to their risk grading/ scoring audit procedure and required
frequent audit to the Branches are operated by the Audit Division.
In addition, there is a Vigilance Cell established in the Bank to
reinforce operational risk management of the Bank and to minimize
the same. Bank’s anti-money laundering activities are headed by
(Chief Anti Money Laundering Compliance Officer) CAMLCO and their
activities are devoted to protect against all money laundering and
terrorist finance related activities. Apart from that, there is adequate
check & balance at every stage of operation, authorities are properly
segregated and there is at least dual control on every transaction to
protect against operational risk.
v) Approach to calculating capital charges for
operational risk
Basic indicator Approach is used for calculating capital charge for
operational risk as of the reporting date.
Quantitative Disclosures
As per risk based capital adequacy guidelines, capital charge for operational risk is equivalent to 15% of average annual
gross income of three previous years where negative figures are excluded.
As per risk based capital adequacy guidelines Social Islami bank Limited follows the Basic Indicator Approach for computing
capital charge for operational risk.
Ason31.12.2013
Capital Requirement
Operational Risk
Figureinmillion
Solo
Consolidated
641.55
641.55
Stress testing
Bangladesh Bank through its DOS Circular No. 01 dated 21.04.2010 and subsequent DOS Circular No.01 dated 23.02.2011
introduced “Guidelines on Stress Testing” wherein Stress testing has been stated as one of the sophisticated technique used
to determine the reaction of different financial institutions under a set of exceptional, but plausible assumptions through a
series of battery of tests. At institutional level, stress testing techniques provide a way to quantify the impact of changes in a
number of risk factors on the assets and liabilities portfolio of the institution.
Bangladesh Bank also mentions in the said circular that at the system level, stress testing are primarily designed to quantify
the impact of possible changes in economic environment on the financial system. These tests help the regulators identify
structural vulnerabilities and the overall risk exposure that could cause disruption of financial markets.
Bangladesh Bank Circular No. 01 dated 23.02.2011 introduced “Guidelines on Stress Testing” wherein advised that “ Banks
shallcarryoutstresstestinginlinewiththerevisedguidelineonquarterlybasisi.e.onMarch31,June30September30and
December 31 and submitted the same to Bangladesh Bank within 30 days of each quarter end”.
SIBLhasalreadypreparedastresstestingreportinlinewiththeBangladeshBank’sguidelineswhichinitiallyfocuson“Simple
Sensitivity and Scenario Analysis” of the following five factors;
1.
Profit Rate
2.
Forcedsalevalueofcollateral
3.
Non-performing Investments(NPI)
4.
Equity/ Share prices
5.
ForeignExchangerate
The result of stress testing based on the financial performance of the bank as on December 31, 2012 has also been
completed which shows that the bank has adequate capital to absorb minor and moderate individual shocks. However,
some additional capital may be required under major level combined shocks.
138
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SIBL EVENTS &
HIGHLIGHTS
18th AGM
Social Islami Bank Ltd.
18th Annual General Meeting
The 18th Annual General Meeting of
Social Islami Bank Limited (SIBL) was
heldon22June,2013at“Sunrise
Community Center” Sylhet. In the
AGM shareholders approved 15%
dividend (10% stock & 5% cash) for
the financial year 2012.
140
a n n u a l
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Half Yearly Business Conference-2013
HalfYearlyBusinessConference-2013ofSocialIslamiBankLimitedwasheldon6thJuly,2013atHotelPurbani
InternationalLimited.Hon’bleChairmanoftheBoardofDirectorsoftheBankMajor(Retd.)Dr.Md.RezaulHaque
was present as the Chief Guest and inaugurated the conference.
141
Social Islami Bank Ltd.
SIBL Events 2013
Some functions are imperative, some occasions are milestones--these lead to occurrence of events. SIBL has always been sincere
to the desire and sentiment of its clients as well as the nation as a
whole
Events
142
a n n u a l
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18th Anniversary of SIBL
Hon’bleChairmanoftheBoardofDirectorsofthe
Bank Major (Retd.) Dr. Md. Rezaul Haque was
present in the 18th Anniversary program as the
Chief Guest and celebrated the day by cutting
an anniversary cake. Directors of SIBL were also
present in the program.
143
Social Islami Bank Ltd.
18th Anniversary of SIBL
144
a n n u a l
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Corporate Social Responsibility (CSR)
Eye Camp at Begumgonj
Major(Retd.)Dr.Md.RezaulHaque,Hon’ble
Chairman of the Board of Directors of SIBL is
checking eyes of a distressed patient at an eye
treatment camp at Begumganj, Noakhali held on
22nd November, 2013. Managing Director Mr. Md.
Shafiqur Rahman is also seen.
Eye Camp at Chowgacha
Major(Retd.)Dr.Md.RezaulHaque,Hon’bleChairman
of the Board of Directors of SIBL is checking eyes
of a distressed patient at an eye treatment camp at
Chowgacha,JessoreorganizedbytheBank.Hon’ble
Vice Chairman Mr. Md. Sayedur Rahman and Director
Mr.AbdulJabbarMollahwerealsopresentinthecamp.
Eye Camp at Chandpur
SIBL organized an Eye Cataract Treatment Camp at
Bisnupur Union, Chandpur on 30th August, 2013 in cooperation with the Mazharul Haque BNSB Eye Hospital,
Chandpur with a view to providing eye treatment to the
impoverishedpeopleofthesociety.Hon’bleChairmanof
the Board of Directors of SIBL Major (Retd.) Dr. Md. Rezaul
Haque inaugurated the camp as the Chief Guest. Hon’ble
Director of SIBL Mr. Abdul Awal Patwary was also present.
Eye Camp at Norshingdhi
Eye Camp at Bagerhat
SIBL organized an Eye Camp at Baghata Noor Aftaf
Adorsha Bidhapith of Norshingdhi District. Major (Retd.) Dr.
Md. Rezaul Haque, Chairman of the Board of Directors of
SIBL is checking eyes of a distressed patient at the camp.
SIBL organized an eye treatment camp at Bagerhat
BohumukhiCollegiateSchool.Hon’bleDirectorofSIBL
Mr.AbdulJabbarMollahandDeputyManagingDirector
ofSIBLMr.A.M.M.Farhadwerepresentintheprogram.
145
Social Islami Bank Ltd.
Corporate Social Responsibility (CSR)
Eid Clothes Distribution
Distribution of Blankets through YPSA
Hon’bleChairmanoftheBoardofDirectorsof
Social Islami Bank Limited Dr. Md. Rezaul Haque is
distributing Eid Clothes among the under privileged
people of Begumganj, Noakhali.
Hon’bleChairmanoftheBoardofDirectorsoftheSIBL
Major (Retd) Dr. Md. Rezaul Haque handed over blankets
to Mr. Md. Arifur Rahman, Chief Executive of Young
Power in Social Action (YPSA) for distribution among the
distressed cold stricken indigenous Tipra people living
in Shitakund a hills range. Managing Director Mr. Md.
Shafiqur Rahman was also present at the program.
Distribution of Blankets through
Bangladesh Bank
Blood Donation Camp
in Front of Principal Brach
Mr.A.M.M.Farhad,DeputyManagingDirectorof
Social Islami Bank Limited handed over blankets
toMr.A.F.M.Asaduzzaman,GeneralManager,
Governor’sSecretariatofBangladeshBankforthe
distressed cold stricken people of the country. Senior
Executives of SIBL were also present at the program.
Chairman of the Board of Directors of Social Islami Bank
Limited Major (Retd.) Dr. Md. Rezaul Haque is seen
beside a blood donor at the Blood Donation Camp
organized by SIBL in front of the Principal Branch of the
Bank. Managing Director Mr. Md. Shafiqur Rahman is
also seen.
146
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Staying Close - TJPZA IJKZ, kJPvA IJKZ
An initiative of Social Volunteers of SIBL
Hon’bleChairmanoftheBoardofDirectorsofSIBL
andChairmanofSIBLFoundationMajor(Retd.)Dr.
Md. Rezaul Haque inaugurated a campaign “Staying
Close” for distribution of clothes among the distressed
people of the country. Managing Director Mr. Md.
Shafiqur Rahman was present in the program.
SIBL donated money to Kailakuri Health Project
to build Chechua Diabetes Centre at Mymenshing
under “Staying Close” initiative of the Bank. The
Chairman of SIBL Major (Retd.) Dr. Md. Rezaul
Haque handed over the cheque to the Administrative
Officer of Kailakuri Health Project Ms. Navian Nedin.
SIBL handed over a donation for the
better treatment of distressed child
patients of various Departments of
Dhaka Medical College Hospital as a
part of its initiative of “Staying Close”.
Hon’bleChairmanofSIBLMajor
(Retd.) Dr. Rezaul Haque handed over
the donation to Brig. Gen Mustafizur
Rahman, Director of Dhaka Medical
College Hospital.
Hon’bleChairmanofSIBLFoundation
and Chairman of the Board of Directors of
SIBL Major (Retd.) Dr. Md. Rezaul Haque
handed over a cheque of donation to
Brig. Gen Mustafizur Rahman, Director,
Dhaka Medical College Hospital and Dr.
Samantolal Shen , Departmental Head
of Burn and Cosmetic Surgery Unit
for the better treatment of the critically
burnt distressed patients admitted to the
Burn and Plastic Surgery Unit of Dhaka
Medical College Hospital.
147
Social Islami Bank Ltd.
Art & Culture
Quran Talwat Competition
Social Islami Bank Limited organized a competition of recitation from the Holy Quran. Children of SIBL employees
participated in the competition. Major (Retd.) Dr. Md. Rezaul Haque, Chairman of SIBL, Managing Director Mr. Md.
Shafiqur Rahman and other distinguished Directors of the Bank were present in the programme.
National Anthem and Art Competition
Essay Competition
Social Islami Bank Limited (SIBL) organized an Art and National
Anthem competition for the children of the Officials of the Bank on
the occasion of Victory Day of the Country. The Chairman of SIBL
andFreedomFighterMajor(Rtd.)Dr.Md.RezaulHaquedistributed
awards among the winners of the competition as the Chief Guest. Mr.
Md. Shafiqur Rahman, Managing Director of SIBL presided over the
program.DeputyManagingDirectorsMr.A.M.M.FarhadandMr.Md.
Yunus Ali, other Senior Executives and Officials of the Bank were also
present in the program.
SIBL organized an Essay Competition
among the students of Begumgonj
Govt. Pilot High School, Begumgonj,
Noakhali. Major (Retd.) Dr. Md. Rezaul
Haque,Hon’bleChairmanoftheBoard
of Directors of Social Islami Bank
Limited distributed gifts among the
participants. Managing Director Mr. Md.
Shafiqur Rahman was also present in
the program.
148
a n n u a l
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mJÄuJ jmmwt 1421 ChpJkj
Celebrating
Pohela Boishakh
Social Islami Bank Limited celebrated the
Pohela Boishakh with fanfare and gaiety
upholding the usual Bengali tradition and
bringing the Bank close to people through
colourful rally and distribution of gifts among
people and sweets among children.
149
Social Islami Bank Ltd.
Seminar & Workshop
Cash Waqf Seminar
Seminar on Documentation and
Mortgage Procedures
Major (Retd.) Dr. Md. Rezaul Haque, Chairman of
the Board of Directors of Social Islami Bank Limited
is delivering speech at the seminar on “Cash
Waqf-eSanchoy,PorokaleShongiHoi-Kalyanar
Proshantite, Porokal Hoy Punyomoy” organized by
SIBLatOfficers’Club,Dhaka.ManagingDirectorof
SIBL Mr. Md. Shafiqur Rahman presided over the
program.
SIBL Training Institute organized a workshop on
“Documentation and Mortgage Procedures” at the
Corporate Office of the Bank. The Chairman of the
Board of Directors of Social Islami Bank Limited Major
(Retd.) Dr. Md. Rezaul Haque inaugurated the workshop
as Chief Guest. Managing Director of the Bank Mr.Md.
Shafiqur Rahman presided over the program.
Unveiling of a book
‘Mangsher Joto Pod’ (oJÄPxr pf kh)
Social Islami Bank Limited organized a seminar on
“Cash waqf” at Corporate Office of Bank on 18th
July,2013.DuringtheseminarChairmanofthe
Board of Directors of Social Islami Bank Limited
Major (Retd.) Dr. Md. Rezaul Haque unveiled two
books namely “Ziarat-E-Baitullah” and “Rasulullah (S:)
Er Salat O Masnun Dua”. Managing Director Mr. Md.
Shafiqur Rahman was also present in the program.
150
Social Islami Bank Limited (SIBL) published a recipe
booknamely“MangsherJotoPod”.Chairmanofthe
Board of Directors of Social Islami Bank Limited Major
(Retd.) Dr. Md. Rezaul Haque and Managing Director
Mr. Md. Shafiqur Rahman unveiled the book which was
distributed among the valued clients of the Bank on the
occasion of Holy Eid-ul-Azha.
a n n u a l
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2 0 13
Agreement Signing Ceremony
Agreement with
UAE Exchange, Malaysia
Social Islami bank Limited signed
Remittance Drawing Arrangement
with UAE Exchange Malaysia SDN.
BHD. Managing Director of Social
Islami Bank Limited Mr. Md. Shafiqur
Rahman and Manager and In–Charge,
Bangladesh Operation of BHD are seen
exchanging documents after signing the
arrangement
Agreement with SSL
Social Islami Bank Limited (SIBL) signed
an agreement with Software Shop
Limited(SSLWireless)toofferMobile
Top-up service using Internet Banking
for its customers. Mr. Md. Shafiqur
Rahman, Managing Director of SIBL
and Mr. Sayeeful Islam, Managing
DirectorofSSLWirelesssignedthe
agreement on behalf of their respective
organizations at SIBL Corporate Office.
Agreement with Datasoft
Social Islami Bank Limited signed a
memorandum of understanding for
new business initiative with Data Soft.
Mr. Md. Shafiqur Rahman, Managing
Director of SIBL and Mr. Mahboob
Zaman, Managing Director of Data
Soft signed the agreement on behalf of
their respective organizations at SIBL
Corporate Office.
151
Social Islami Bank Ltd.
Campaign
Grahok Sheba
Major (Retd.) Dr. Md. Rezaul Haque, Chairman of
Social Islami Bank Ltd. distributed gifts among the
achievers of business target fixed under the campaign
“ Shadhinotar March Mash , Grahok sheba baro
mash, Boishakh masher prothom din, Grahok sheba
protidin” Managing Director of the Bank Mr. Md.
Shafiqur Rahman is also seen in the picture.
Hajj Booth
Chairman of the Board of Directors of Social Islami
Bank Limited Major (Retd.) Dr. Md. Rezaul Haque is
distributing Gift Hampers among the Hajj Pilgrims at
the Hajj Booth of SIBL at Ashkona Haji Camp.
E-token
Chairman of the Board of Directors of Social
Islami Bank Limited Major (Retd.) Dr. Md. Rezaul
Haque inaugurated E-Token Management
SystemattheForeignExchangeBranchof
the Bank. Managing Director Mr. Md. Shafiqur
Rahman is also seen in the picture.
Cash Waqf
Social Islami Bank Limited arranged a campaign
titled “TqJv S~JT&Pl xû~, krTJPu xñL y~- TuqJe IJr
k´vJK∂Pf, krTJu y~ kNeqo~” The Chairman of the Board
of Directors of the Bank Major (Retd.) Dr. Md. Rezaul
Haque inaugurated the month-long Campaign by
handing over Campaign Replica to the Heads of
Branches present at the program. Managing Director
Mr. Md. Shafiqur Rahman was present in the program.
152
Deposit Mobilization
Chairman of the Board of Directors of SIBL Major
(Retd.) Dr. Md. Rezaul Haque has inaugurated a special
deposit mobilization campaign of the Bank titled “mJÄuJ
jmmPwtr ßxrJ x÷Jr, ßxJxqJu AxuJoL mqJÄT Fr Kjfq jm CkyJr”
Under this two months long campaign the bank
has been promoting its different scheme of deposit
products among its customers.
a n n u a l
re p o r t
2 0 13
Language Veteran Honoured
SIBL had the pleasure of honouring the great Language Veteran Mr. Abdul Matin on the
occasion of International Mother Language Day. Chairman of the Board of Directors of SIBL
Major (Retd.) Dr. Md. Rezaul Haque presented a crest and a cheque of honorarium to the
LanguageVeteranatafunctionheldatSIBLCorporateOfficeon21February2014.Managing
DirectorMr.Md.ShafiqurRahmanandDeputyManagingDirectorMr.A.M.M.Farhadwerealso
present at the program, among others.
153
Social Islami Bank Ltd.
SIBLNEWBRANCHES
SIBL New Branches Opened in the year 2013
154
87
Akhaura Branch
18 May 2013
88
Patkelghata Branch
22 May 2013
89
Mouchak Branch
18June2013
90
Aturar Depo Branch
26June2013
a n n u a l
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2 0 13
SIBLNEWBRANCHES
SIBL New Branches Opened in the year 2013
91
Chougacha Branch
30June2013
92
College Road Branch
4July2013
93
Maijdee Branch
18 August 2013
94
Mymensingh Branch
9 October 2013
155
Social Islami Bank Ltd.
Competence Recognised
Social Islami Bank Limited has been awarded
the “Certificate of Merit” in the 13th ICAB
National Award for Best Presented Annual
Reports-2012 by the Institute of Chartered
Accountants of Bangladesh (ICAB).
The award giving ceremony was held at
Pan Pacific Sonargaon Hotel, Dhaka on
December 21, 2013. The Managing Director
of Social Islami Bank Limited Mr. Md. Shafiqur
Rahman received the “Certificate of Merit”
awardfromHon’bleFinanceMinisterofthe
People’sRepublicofBangladeshMr.Abul
Mal Abdul Muhith, M.P.
156
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C O R P O R AT E F I N A N C E
Corporate Finance
Project Name:
Thermax Group
Financed by:
Principal Branch
Social Islami Bank Ltd.
Project Name:
CrosslineKnitFabricsLtd.
Financed by:
ForiegnExchangeBranch
Social Islami Bank Ltd.
Project Name:
Ocean Pride (BD) Ltd
Financed by:
Agrabad Branch
Social Islami Bank Ltd.
Project Name:
Partex Denim Ltd. (Textile Mill)
Financed by:
Principal Branch
Social Islami Bank Ltd.
157
Social Islami Bank Ltd.
S M E F I N A N C E
SME Finance
158
Project Name:
Best Electronic
Financed by:
Principal Branch
Social Islami Bank Ltd.
Project Name:
SKY Plastic factory
Financed by:
Agrabad Branch
Social Islami Bank Ltd.
Project Name:
AzadEngineeringWorks
Financed by:
Bogra Branch
Social Islami Bank Ltd.
Project Name:
JahangirZamdani
WevingFactory
Financed by:
Bhulta Branch, Narayangonj
Social Islami Bank Ltd.
a n n u a l
re p o r t
2 0 13
A G R I F I N A N C E
Agri Finance
Project Name:
Redwan Trade International
Financed by:
Agrabad Branch
Social Islami Bank Ltd.
Project Name:
Corona Tractor
Financed by:
Principal Branch
Social Islami Bank Ltd.
Project Name:
ChistiaDairyFarm
Financed by:
Mohakhali Branch, Dhaka
Social Islami Bank Ltd.
Project Name:
Md. Sayedul Islam
Financed by:
Mymensing Branch
Social Islami Bank Ltd.
159
Social Islami Bank Ltd.
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Financial Statements
Social Islami Bank Limited (SIBL) and Its Subsidiaries for
the year ended 31 December 2013
Auditor’s
Report
Social Islami Bank Ltd.
Auditors’ Report
to the Shareholders of Social Islami Bank Limited
We have audited the accompanying consolidated financial statements of Social Islami Bank Limited and its subsidiaries (the
“Group”) as well as the separate financial statements of Social Islami Bank Limited (the “Bank”), which comprise the consolidated
balance sheet and the separate balance sheet as at 31 December 2013, and the consolidated and separate profit and loss
accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements for
the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements and Internal Controls
Management is responsible for the preparation of consolidated financial statements of the Group and also separate financial
statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards as explained
in note 2 and for such internal control as management determines is necessary to enable the preparation of consolidated financial
statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether
due to fraud or error. The Bank Companies Act, 1991 and the Bangladesh Bank Regulations require the Management to ensure
effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make
a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and
forgeries.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial
statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing.
Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements of the Group and separate financial statements of the Bank are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements
of the Group and separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s preparation of consolidated financial statements of the Group and separate
financial statements of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements of the Group and also separate financial statements of the Bank.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank give a true
and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December
2013, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then
ended in accordance with Bangladesh Financial Reporting Standards as explained in note 2.
162
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Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act 1994, the Securities and Exchange Rules 1987, the Bank Companies Act, 1991 and the
rules and regulations issued by Bangladesh Bank, we also report the following:
(a)
we have obtained all the information and explanation which to the best of our knowledge and belief were necessary
for the purpose of our audit and made due verification thereof;
(b)
to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s
Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the
financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on antifraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the
Financial Statements and Internal Control:
i)
internal audit, internal control and risk management arrangements of the Group and the Bank (as disclosed in note
2 of the financial statements) appeared to be materially adequate;
ii)
nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and
exception or anything detrimental committed by employees of the Bank and its related entities;
(c)
financial statements of all subsidiaries of the Bank have been audited by other auditors and have been properly
reflected in the consolidated financial statements;
(d)
in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it
appeared from our examination of those books;
(e)
the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance
sheet and separate profit and loss account of the Bank dealt with by the report are in agreement with the books of account;
(f)
the expenditure incurred was for the purposes of the Bank’s business;
(g)
the consolidated financial statements of the Group and the separate financial statements of the Bank have been
drawn up in conformity with prevailing rules, regulations and accounting standards as well as with related guidance
issued by Bangladesh Bank;
(h)
adequate provisions have been made for advances which are, in our opinion, doubtful of recovery;
(i)
the records and statements submitted by the branches have been properly maintained and consolidated in the
financial statements;
(j)
(k)
the information and explanation required by us have been received and found satisfactory; and
we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 3,698 person hours
for the audit of the books and accounts of the Bank.
KAZI ZAHIR KHAN & CO.
Chartered Accountants
Dated: Dhaka
31 March, 2014
163
Social Islami Bank Ltd.
Social Islami Bank Limited
Consolidated balance sheet
As at 31 December 2013
Note(s)
PROPERTY AND ASSETS
Cash
Cash in hand (Including Foreign Currencies)
Balance with Bangladesh Bank & its Agent Banks
(Including Foreign Currencies)
1,104,657,620
7,627,790,250
8,895,004,217
10,020,554,834
11,125,212,454
1,899,243,196
1,178,527,956
3,077,771,152
9,064,879,564
2,726,839,850
849,779,375
3,576,619,225
9,015,879,564
5,500,000,000
1,558,185,070
7,058,185,070
2,900,000,000
1,764,016,584
4,664,016,584
76,348,581,962
9,523,749,964
85,872,331,926
2,662,660,343
9,770,561,641
126,401,393,912
66,459,100,077
9,565,873,831
76,024,973,908
2,256,597,940
8,165,811,105
114,829,110,780
4,700,000,000
4,700,000,000
6,468,729,754
62,746,867,195
19,288,768,828
11,936,321,181
1,316,909,958
84,577,685
4,905,319,144
62,267,653,508
13,984,000,422
10,585,704,537
1,465,257,228
68,903,770
101,842,174,601
93,276,838,609
12(a)
13
8,765,394,391
1,577,248
115,309,146,240
6,699,267,451
70,528
104,676,176,587
14.2
15
7,031,415,640
2,122,994,344
6,666,534
1,082,485,102
848,684,454
1 1,092,246,074
1,597
126,401,393,912
6,393,925,700
1,718,062,455
742,432
1,109,979,121
930,222,915
10,152,932,622
1,570
114,829,110,780
4(a)
Placement with Banks & other Financial Institutions
Investments in Shares & Securities
Government
Others
5
6(a)
Investments
General Investment etc.
Bills Purchased and Discounted
7 (a)
Fixed Assets including Premises, Furnitures and Fixtures
Other Assets
Non Banking Assets
Total Assets
8(a)
9(a)
Other Liabilities
Deffered Tax Liabilities/ (Assets)
Total Liabilities
Shareholders’ Equity
Paid-up Capital
Statutory Reserve
General reserve
Revaluation reserve on Fixed Assets
Retained Earnings
Total Shareholders’ Equity of Parent Company, SIBL
Non controlling Interest
Total Liabilities & Shareholders’ Equity of the Group
2012
Taka
1,267,213,967
Balance with other Banks and Financial Institutions
In Bangladesh
Outside Bangladesh
LIABILITIES AND CAPITAL
Liabilities
Placement from Banks & other Financial Institutions
Deposits and Other Accounts
Mudaraba Savings Deposits
Mudaraba Term Deposits
Other Mudaraba Deposits
Al-Wadeeah Current & Other Deposit Accounts
Bills Payable
Cash Waqf Fund
164
3(a)
3.1
2013
Taka
10
11
11.2(a)
11.3
16
17(a)
17(b)
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Social Islami Bank Limited
Consolidated balance sheet
As at 31 December 2013
Note(s)
CONTINGENT LIABILITIES
Acceptances and Endorsements
Irrevocable Letters of Credit (including Back to Back Bills)
Letters of Guarantee
Bills for Collection
Other Contingent Liabilities
2013
Taka
18.1
18.2
18.3
18.4
18.5
Total
OTHER COMMITMENTS
Documentary credits and
short term trade related transactions
Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving underwriting facilities
Undrawn formal standby facilities, credit lines
and other commitments
Total
Total Off Balance Sheet Items including
Contingent Liabilities
2012
Taka
14,986,882,397
9,854,239,886
3,246,076,013
2,383,031,491
-
12,634,753,997
7,395,594,893
4,949,826,296
2,784,274,732
-
30,470,229,787
27,764,449,918
-
-
-
-
30,470,229,787
27,764,449,918
Annexed notes (1 to 48) form an integral part of these financial statements
Chairman
Director
Director
Managing Director
Signed as per our report of same date
Dhaka, Bangladesh
Date: 31 March 2014
Kazi Zahir Khan & Co.
Chartered Accountants
165
Social Islami Bank Ltd.
Social Islami Bank Limited
Consolidated profit and loss account
For the year ended 31 December 2013
Note(s)
Investment Income
Less: Profit paid on Deposits
Net Investment Income
Income from Investment in Shares/securities
Commission, Exchange and Brokerage
Other Operating Income
2013
Taka
19(a)
20
21
22(a)
23(a)
Total Operating Income
Salaries and Allowances
Rent, Taxes, Insurances, Electricity etc.
Legal Expenses
Postage, Stamps, Telecommunication etc.
Stationery, Printings, Advertisements etc.
Managing Director’s Salary and Allowances
Directors’ Fees & Expenses
Shariah Supervisory Committee’s Fees & Expenses
Auditors` Fees
Depreciation & Repair of Bank’s Assets
Other Expenses
Total Operating Expenses
Profit/(Loss) before Provision
Specific provisions for Investment
General Provisions for Investment
General Provisions for off-Balance Sheet exposure
Other Provisions
Total Provision
Total Profit/(Loss) before Tax
24(a)
25(a)
26(a)
27(a)
28(a)
29
30(a)
31
32(a)
33(a)
34(a)
35(a)
Provision for Income Tax
Net Profit/(Loss) after Tax attributable to equity
holders of the group
Non-controlling Interest
Net Profit/(Loss) after Tax attributable to equity
holders of the parent
Appropriation
Statutory Reserve
Retained Earnings
36(a)
Earning Per Share (CEPS) (Restated for year 2012)
37(a)
2012
Taka
13,652,592,262
9,706,867,767
3,945,724,495
325,466,389
1,056,116,571
233,154,130
1,614,737,090
5,560,461,585
11,325,266,334
7,541,679,221
3,783,587,112
233,816,722
1,194,479,560
337,568,377
1,765,864,659
5,549,451,771
1,511,746,541
228,445,375
7,943,388
32,286,323
91,543,834
8,602,260
4,805,075
254,362
534,750
174,744,640
534,797,848
2,595,704,395
1,081,286,476
181,760,278
8,618,710
28,799,564
80,776,376
10,000,000
4,094,874
117,801
910,455
149,523,899
360,733,108
1,906,621,541
2,964,757,190
752,687,954
84,746,527
27,057,799
41,322,381
905,814,660
2,058,942,530
3,642,830,229
285,356,045
173,483,062
104,482,499
307,355,083
870,676,689
2,772,153,541
806,808,184
1,306,935,483
1,252,134,346
27
1,465,218,057
20
1,252,134,320
1,465,218,037
404,931,889
847,202,431
1,252,134,320
549,578,194
915,639,843
1,465,218,037
1.78
2.08
Annexed notes (1 to 48) form an integral part of these financial statements
Chairman
Director
Director
Managing Director
Signed as per our report of same date
Dhaka, Bangladesh
Date: 31 March 2014
166
Kazi Zahir Khan & Co.
Chartered Accountants
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Social Islami Bank Limited
Consolidated cash flow statement
For the year ended 31 December 2013
Note(s)
Cash Flow from operating activities
Investment Income receipt
Profit paid on deposits
Dividend receipts
Fees & commission receipt
Cash payments to employees
Cash payments to suppliers
Income tax paid
Receipts from other operating activities
Payments for other operating activities
Operating profit before changes in operating assets and liabilities
Changes in operating assets and liabilities
Statutory deposits
Net trading securities
Investments to other banks
Investment to customers
Other assets
Deposits from other banks
Deposits received from customers
Other liabilities on account of customers
Trading liabilities
Other liabilities
Sub Total
A. Net Cash flow from operating activities
Cash flows from investing activities
Proceeds from sale of securities
Payment for purchases of securities
Proceeds from sale of fixed assets
Purchases of property, plant & equipments
Purchase/Sale of subsidiaries
B. Net Cash flows from investing activities
Cash flows from financing activities
Receipts from issue of debt instruments
Payments for redemption of debt instruments
Receipts from issue of right shares/ordinary share
Dividend paid in cash
C. Net Cash flow from financing activities
D. Net increase/(decrease) in cash & cash equivalents (A+B+C)
E. Cash and cash equivalents at the beginning of the year
F. Cash and cash equivalents at the end of the year (D+E)
38(a)
39(a)
40(a)
41(a)
42(a)
43(a)
2013
Taka
2012
Taka
13,652,592,262
(6,901,278,644)
325,466,389
584,822,183
(1,520,348,801)
(123,830,157)
(1,356,696,826)
704,448,518
(794,669,804)
4,570,505,121
11,325,266,334
(5,247,109,745)
233,816,722
601,843,415
(1,091,286,476)
(109,575,940)
(929,894,508)
930,204,521
(569,670,338)
5,143,593,986
(2,394,168,486)
(9,847,358,018)
(248,053,710)
(6,383,245,811)
12,142,992,679
360,934,923
(6,368,898,423)
(1,798,393,302)
(902,656,827)
(22,116,398,136)
(140,718,961)
2,311,519,035
22,209,028,350
80,878,423
1,441,651,884
6,585,245,870
(562,918,036)
(562,918,036)
(257,483,184)
(257,483,184)
(318,744,971)
(318,744,971)
(2,680,056,309)
23,717,711,242
21,037,654,933
1,000,000,000
(671,362,199)
328,637,802
6,656,400,487
17,061,310,755
23,717,711,242
Annexed notes ( 1 to 48) form an integral part of these financial statements
Chairman
Director
Director
Managing Director
Dhaka, Bangladesh
Date: 31 March 2014
167
168
-
Surplus / (Deficit) on account of Revaluation of Properties
Surplus / (Deficit) on account of Revaluation of Investment
Currency translation difference
Net gain and losses not recognized in the Income Statement
Net profit for the year
Appropriation made during the year
Issue of Cash Dividend
Dhaka, Bangladesh
Date: 31 March 2014
Chairman
Total eligible capital as on 31 December 2013
Less: 50% of assets revaluation reserve
Add: General provision for unclassified investment
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share
Premium
Account
2,122,994,344
-
-
-
-
Director
6
Asset
Revaluation
Reserve
-
-
-
-
-
-
-
-
(27,494,019)
-
-
6,666,534 1,082,485,102
-
-
-
-
-
-
-
-
-
-
-
-
742,432 1,109,979,121
5
General /
Other
Reserves
404,931,889 5,924,102
-
-
-
-
-
-
-
1,718,062,455
4
Statutory
Reserve
Director
Annexed notes ( 1 to 48) form an integral part of these financial statements
7,031,415,640
-
Non-controlling interest
Total group shareholders’ equity as on 31 December 2013
-
Transferred to retained earnings
637,489,940
-
Resatated Balance
Issue of Share Capital (Bonus Share)
-
6,393,925,700
2
Paid-up Capital
Changes in Accounting Policy
Balance as at 01 January 2013
1
Particulars
For the year ended 31 December 2013
848,684,455
-
27,494,019
(637,489,940)
(318,744,971)
(404,931,889)
27
-
-
(318,744,971)
5,924,102
1,252,134,320
-
-
-
-
-
-
10,152,934,193
9=(2 to 7)
Total
(amount in Taka)
Managing Director
11,632,337,007
541,242,551
1,081,331,886
1,597 11,092,247,672
27
-
-
-
-
-
1,252,134,320
-
-
-
-
-
1,570
8
NonControlling
Interest
-
-
-
-
-
-
930,222,916
7
Retained
Earnings
-
Consolidated statement of changes in equity
Social Islami Bank Limited
Social Islami Bank Ltd.
a n n u a l
re p o r t
2 0 13
Social Islami Bank Limited
Balance sheet
As at 31 December 2013
PROPERTY AND ASSETS
Note(s)
2013
Taka
2012
Taka
Cash
Cash in hand (Including Foreign Currencies)
Balance with Bangladesh Bank & its Agent Banks
(Including Foreign Currencies)
1,266,962,343
7,627,790,250
1,104,528,222
10,020,554,834
8,894,752,593
11,125,083,056
1,870,113,449
1,178,527,956
2,713,496,766
849,779,375
3,048,641,405
3,563,276,141
9,064,879,564
9,015,879,564
5,500,000,000
3,038,183,470
8,538,183,470
2,900,000,000
3,244,014,984
6,144,014,984
76,398,581,962
9,523,749,964
85,922,331,926
66,459,100,077
9,565,873,831
76,024,973,908
8
9
2,653,882,382
8,493,893,405
126,616,564,745
2,249,954,737
7,042,770,623
115,165,953,013
Placement from Banks & other Financial Institutions
10
4,700,000,000
4,700,000,000
Deposits and Other Accounts
11
6,468,729,754
62,746,867,195
19,288,768,828
12,198,626,163
1,316,909,958
84,577,685
102,104,479,583
4,905,319,144
62,267,653,508
13,984,000,422
10,903,158,399
1,465,257,228
68,903,770
93,594,292,471
12
13
8,727,079,569
1,577,248
115,533,136,400
6,689,618,137
70,528
104,983,981,136
14.2
15
16
17
7,031,415,640
2,122,994,344
1,082,485,102
846,533,259
11,083,428,345
6,393,925,700
1,718,062,455
1,109,979,121
960,004,602
10,181,971,877
126,616,564,745
115,165,953,013
Balance with other Banks and Financial Institutions
3
3.1
4
In Bangladesh
Outside Bangladesh
Placement with Banks & other Financial Institutions
Investments in Shares & Securities
5
6
Government
Others
Investments
7
General Investment etc.
Bills Purchased and Discounted
Fixed Assets including Premises, Furnitures and Fixtures
Other Assets
Non Banking Assets
Total Assets
LIABILITIES AND CAPITAL
Liabilities
Mudaraba Savings Deposits
Mudaraba Term Deposits
Other Mudaraba Deposits
Al-Wadeeah Current & Other Deposit Accounts
Bills Payable
Cash Waqf Fund
Other Liabilities
Deffered Tax Liabilities/ (Assets)
Total Liabilities
Capital/Shareholders’ Equity
Paid-up Capital
Statutory Reserve
Revaluation reserve on Fixed Assets
Retained Earnings
Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity
11.2
11.3
169
Social Islami Bank Ltd.
Social Islami Bank Limited
Balance sheet
As at 31 December 2013
Note(s)
2013
Taka
2012
Taka
CONTINGENT LIABILITIES
Acceptances and Endorsements
Irrevocable Letters of Credit (including Back to Back Bills)
Letters of Guarantee
Bills for Collection
Other Contingent Liabilities
Total
18.1
18.2
18.3
18.4
18.5
OTHER COMMITMENTS
Documentary credits and short term trade related transactions
Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving underwriting facilities
Undrawn formal standby facilities, credit lines and other
commitments
Total
Total Off Balance Sheet Items including
Contingent Liabilities
14,986,882,397
9,854,239,886
3,246,076,013
2,383,031,491
30,470,229,787
12,634,753,997
7,395,594,893
4,949,826,296
2,784,274,732
27,764,449,918
-
-
-
-
30,470,229,787
27,764,449,918
Annexed notes (1 to 48) form an integral part of these financial statements
Chairman
Director
Director
Managing Director
Signed as per our report of same date
Dhaka, Bangladesh
Date: 31 March 2014
170
Kazi Zahir Khan & Co.
Chartered Accountants
a n n u a l
re p o r t
2 0 13
Social Islami Bank Limited
Profit and loss account
For the year ended 31 December 2013
Note(s)
Investment Income
Less: Profit paid on Deposits
Net Investment Income
Income from Investment in Shares and Securities
Commission, Exchange and Brokerage
Other Operating Income
2013
Taka
19
20
21
22
23
Total Operating Income
Salaries and Allowances
Rent, Taxes, Insurances, Electricity etc.
Legal Expenses
Postage, Stamps, Telecommunication etc.
Stationery, Printings, Advertisements etc.
Managing Director’s Salary and Allowances
Directors’ Fees & Expenses
Shariah Supervisory Committee’s Fees & Expenses
Auditors’ Fees
Depreciation & Repair of Bank’s Assets
Other Expenses
Total Operating Expenses
Profit/(Loss) before Provision
Specific provisions for Investment
General Provisions for Investment
General Provisions for off-Balance Sheet exposure
Other Provisions
Total Provision
Total Profit/(Loss) before Tax
13,629,421,075
9,706,867,767
3,922,553,308
325,466,389
1,026,570,990
228,021,115
1,580,058,494
5,502,611,802
11,319,014,211
7,541,679,221
3,777,334,989
233,816,722
1,178,954,865
324,986,845
1,737,758,432
5,515,093,421
1,505,503,042
227,846,521
7,926,138
31,544,647
90,997,426
8,602,260
4,264,575
254,362
517,500
173,161,578
527,443,752
2,578,061,801
1,078,563,216
181,239,535
8,618,710
28,130,288
80,593,969
10,000,000
3,795,874
117,801
882,855
148,750,842
356,575,106
1,897,268,196
2,924,550,001
752,687,954
84,746,527
27,057,799
35,398,279
899,890,558
2,024,659,443
3,617,825,225
285,356,045
173,483,062
104,482,499
306,612,651
869,934,257
2,747,890,968
804,458,005
1,306,763,692
1,220,201,438
1,441,127,276
404,931,889
815,269,549
549,578,194
891,549,083
1,220,201,438
1,441,127,276
1.74
2.05
24
25
26
27
28
29
30
31
32
33
34
35
36
Provision for Income Tax
Net Profit/(Loss) after Tax
Appropriation
Statutory Reserve
Retained Earnings
Earning Per Share (EPS) (Restated for year 2012)
2012
Taka
37
Annexed notes (1 to 48) form an integral part of these financial statements
Chairman
Director
Director
Managing Director
Signed as per our report of same date
Dhaka, Bangladesh
Date: 31 March 2014
Kazi Zahir Khan & Co.
Chartered Accountants
171
Social Islami Bank Ltd.
Social Islami Bank Limited
Cash flow statement
For the year ended 31 December 2013
Note(s)
Cash Flow from operating activities
Investment Income receipt
Profit paid on deposits
Dividend receipts
Fees & commission receipt
Cash payments to employees
Cash payments to suppliers
Income tax paid
Receipts from other operating activities
Payments for other operating activities
Operating profit before changes in operating assets and liabilities
Changes in operating assets and liabilities
Statutory deposits
Net trading securities
Investments to other banks
Investment to customers
Other assets
Deposits from other banks
Deposits received from customers
Other liabilities on account of customers
Trading liabilities
Other liabilities
Sub Total
A. Net Cash flow from operating activities
Cash flows from investing activities
Proceeds from sale of securities
Payment for purchases of securities
Proceeds from sale of fixed assets
Purchases of property, plant & equipments
Purchase/Sale of subsidiaries
B. Net Cash flows from investing activities
Cash flows from financing activities
Receipts from issue of debt instruments
Payments for redemption of debt instruments
Receipts from issue of right shares/ordinary share
Dividend paid in cash
C. Net Cash flow from financing activities
D. Net increase/(decrease) in cash & cash equivalents (A+B+C)
E. Cash and cash equivalents at the beginning of the year
F. Cash and cash equivalents at the end of the year (D+E)
38
39
40
41
42
43
2013
Taka
2012
Taka
13,629,421,075
(6,901,278,644)
325,466,389
555,276,602
(1,514,105,302)
(122,542,073)
(1,352,761,601)
699,315,503
(786,141,855)
4,532,650,094
11,319,014,211
(5,247,109,745
233,816,722
586,318,720
(1,088,563,216)
(108,724,257)
(926,823,440)
917,622,990
(564,664,993)
5,120,886,993
(2,394,168,486)
(9,897,358,018)
(98,361,181)
(6,383,245,811)
12,087,843,800
334,619,590
(6,350,670,106)
(1,818,020,012)
(902,656,827)
(22,116,398,136)
(55,882,097)
2,311,519,035
22,135,652,878
71,569,496
1,443,804,349
6,564,691,342
(559,200,216)
(559,200,216)
(250,397,905)
(250,397,905)
(318,744,971)
(318,744,971)
(2,695,965,199)
1,000,000,000
(671,362,199)
328,637,801
6,642,931,239
23,704,238,761
21,008,273,562
17,061,307,522
23,704,238,761
Annexed notes ( 1 to 48) form an integral part of these financial statements
Chairman
Dhaka, Bangladesh
Date: 31 March 2014
172
Director
Director
Managing Director
-
Surplus / (Deficit) on account of Revaluation of Properties
Surplus / (Deficit) on account of Revaluation of Investment
Currency translation Difference
Net gain and losses not recognized in the Income Statement
Net profit for the year
Dhaka, Bangladesh
Date: 31 March 2014
-
-
-
-
-
-
-
-
-
-
-
-
2,122,994,344
-
-
-
404,931,889
-
-
-
-
-
-
-
1,718,062,455
4
Statutory
Reserve
5
General /
Other
Reserve
Director
Director
Annexed notes ( 1 to 48) form an integral part of these financial statements
7,031,415,640
-
637,489,940
3
Share
Premium
Account
-
-
-
-
-
-
-
-
-
-
-
-
-
1,082,485,102
(27,494,019)
-
-
-
-
-
-
-
-
-
-
1,109,979,121
6
Asset
Revaluation
Reserve
8=(2 to 7)
Total
-
-
(318,744,971)
-
1,220,201,438
-
-
-
-
-
-
Managing Director
11,623,517,680
541,242,551
1,081,331,886
846,533,259 11,083,428,345
27,494,019
(637,489,940)
(318,744,971)
(404,931,889)
1,220,201,438
-
-
-
-
-
-
960,004,602 10,181,971,878
7
Retained
Earnings
(amount in Taka)
re p o r t
Chairman
Total eligible capital as on 31 December 2013
Less: 50% of assets revaluation reserve
Add: General provision for unclassified investment
Total shareholders’ equity as on 31 December 2013
Transferred to retained earnings
Issue of Share Capital (Bonus Dividend)
Issue of cash dividend
-
-
Resatated Balance
Appropriation made during the year
-
Changes in Accounting Policy
6,393,925,700
2
1
Balance as at 01 January 2013
Paid-up Capital
Particulars
For the year ended 31 December 2013
Statement of changes in equity
Social Islami Bank Limited
a n n u a l
2 0 13
173
174
-
Deferred tax liability
Director
Chairman
Dhaka, Bangladesh
Date: 31 March 2014
124,685,012
Net Liquidity Gap
16,766,503,945
-
Provision and other liabilities
Total Liabilities
15,966,503,945
800,000,000
16,891,188,957
-
387,751,359
16,422,514
Deposits and other accounts
Placement from Banks & other financial institutions
Liabilities
Total Assets
Non-Banking Assets
Other Assets
Fixed Assets including premises, furniture & fixtures etc.
9,537,431,276
Investments
500,000,000
Placement with Banks & other Financial Institutions
1,406,615,620
1,830,254,726
Balance with other Banks and Financial Institutions
Investment (in Shares & Securities)
3,212,713,462
Upto 01 Month
Cash in hand
Assets
Particulars
4,540,154,029
24,021,498,284
-
-
22,021,498,284
2,000,000,000
28,561,652,313
-
2,689,141,422
32,845,028
21,180,472,524
700,000,000
3,350,000,000
609,193,340
-
01-03 Months
3,979,373,287
17,004,269,062
1,577,248
4,250,572,172
12,752,119,641
-
20,983,642,348
-
4,112,476,843
776,782,356
15,592,813,699
501,569,450
-
-
-
01-05 Years
Director
1,035,216,463
49,004,285,319
-
-
47,104,285,319
1,900,000,000
50,039,501,782
-
533,789,958
141,281,962
39,240,356,958
4,300,000,000
5,214,879,564
609,193,340
-
03-12 Months
As at 31 December 2013
Liquidity statement
Assets and liabilities analysis
Social Islami Bank Limited
-
8,493,893,405
2,653,882,382
85,922,331,926
8,538,183,470
9,064,879,564
3,048,641,405
8,894,752,593
Total
4,700,000,000
1,577,248
8,727,079,569
11,083,428,345
Managing Director
1,403,999,556
8,736,579,791 115,533,136,400
-
4,476,507,397
4,260,072,393 102,104,479,583
-
10,140,579,346 126,616,564,745
-
770,733,825
1,686,550,522
371,257,469
1,629,998,400
-
-
5,682,039,130
More than 05 years
(amount in Taka)
Social Islami Bank Ltd.
a n n u a l
re p o r t
2 0 13
Social Islami Bank Limited
Notes to the financial statements
As at and for the year ended 31 December 2013
1
The Bank and its activities
1.1
Status of the Bank
The Bank was incorporated as a Public Limited Company in Bangladesh in the year 1995 under Companies Act, 1994. The
Bank is one of the interest-free Shariah based banks in the country and its modus- operandi are substantially different from
other conventional Banks. The Bank within the stipulations laid down by Bank Companies Act, 1991 and directives as received from time to time from Bangladesh Bank, provides all types of commercial Banking services. Besides as a matter of
policy the Bank conducts its business on the principles of Mudaraba, Musharaka, Murabaha, Bai-Muazzal & Hire Purchase
transaction approved by Bangladesh Bank. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock
Exchange Limited as a publicly traded company. The Bank carries its Banking activities through Ninety four (94) branches
operating as per Islamic Shariah prevailing in the country.
The Registered Office of the bank was located at 15, Dilkusha C/A, Dhaka-1000. But from November 2011 SIBL has shifted
its Corporate and Registered head office to a new location situated at ‘City Center’, 90/1 Motijheel Commercial Area.
1.2
Enlistment with the Stock Exchanges
The bank subscribed for IPO (Initial Public Offer) in the year 2000 and initially listed with Dhaka Stock Exchange (DSE) Ltd.
and later on in the year 2005 with Chittagong Stock Exchange (CSE) Ltd.
Subsidiaries of SIBL :
1.3
SIBL Securities Limited
SIBL Securities Limited, a wholly owned subsidiary of SIBL, was incorporated as a Public Limited Company under the Companies Act,1994 vide certification of incorporation no. C - 85876/10 dated 20 July 2010 and obtained its certificate of commencement of business on the same day. The company has already got it license for trading with Dhaka Stock Exchange
(DSE) and Chittagong Stock Exchange (CSE). The company started its commercial operation in the month of January 2012.
The principal place of business is the Registered Office at 3rd floor, 15 Dilkusha C/A, Dhaka-1000.
The principal objectives of the company for which it was established are to carry on the business of stock brokers, dealers
in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the company.
1.4
SIBL Investment Limited
SIBL Investment Limited, a wholly owned subsidiary of SIBL, was incorporated as a Public Limited Company under the
Companies Act,1994 vide certification of incorporation no. C - 86726/10 dated 30 August 2010 and obtained its certificate
of commencement of business on the same day.
The principal objectives of the company for which it was established are to carry on the business of stock brokers, dealers in relation to shares and securities dealings, to underwrite, manage and distribute the issue of stocks etc. and other
services as mentioned in the Memorandum and Articles of Association of the company.
Name of the Company
1 SIBL Securities Limited
2 SIBL Investment Limited
Total Capital
1.5
Paid up Capital (Taka)
1,230,000,000
250,000,000
1,480,000,000
Percentage of Share Holding
SIBL
Others
99.9999187%
99.9997600%
0.0000813%
0.0002400%
Off-Shore Banking Unit (OBU)
Bangladesh bank approved operation of Off-Shore Banking Unit (OBU) of Social Islami Bank Limited located at Banani
Branch, through their letter no. BRPD(P-3)744(119)/2010-4652, Dated: 11.11.2010. The bank has commenced the operation of its Off-Shore Banking Unit (OBU) from 02.05.2012.
175
Social Islami Bank Ltd.
1.6 Compliance of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting standards (BFRS):
In compliance with
BAS No.
Status
Presentation of Financial Statements
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates and Errors
Events After the Reporting Period
Construction Contracts
Income Taxes
Property, Plant and Equipment
Leases
Revenue
Employee Benefits
Accounting for Government Grants and Disclosure of Government
The Effects of Changes in Foreign Exchange Rates
Borrowing Costs
Related Party Disclosures
Accounting and Reporting by Retirement Benefit Plans
Consolidated and Separate Financial Statements
Investments in Associates
Interests In Joint Ventures
Financial Instruments: Presentation
1
2
7
8
10
11
12
16
17
18
19
20
21
23
24
26
27
28
31
32
Earnings Per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
33
34
36
37
Intangible Assets
Financial Instruments: Recognition and Measurement
38
39
Investment Property
Agriculture
40
41
Applied
N/A
Applied
Applied
Applied
N/A
Applied
Applied
Applied
Applied
Applied
N/A
Applied
Applied
Applied
N/A
Applied
N/A
N/A
Applied to the context of
compliance with BRPD circular
no. 15, Dated: 09.11.2009, DOS
Circular No. 5, Dated: 28.01.2009.
Applied
Applied
Applied
Applied to the context of compliance
with BRPD Circular No. 5, Dated:
05.06.2006 and BRPD circular
no. 14 Dated: 14.09.2012.
Applied
Applied to the context of compliance
with BRPD Circular No. 15,
Dated: 09.11.2009, DOS circular
no. 5, Dated: 26.05.2008 and DOS
Circular No. 5, Dated:28.01.2009.
N/A
N/A
In compliance with
First-time Adoption of International Financial Reporting Standards
Share-based Payment
Business Combinations
Insurance Contracts
Non-current Assets Held for Sale and Discontinued Operations
Exploration for and Evaluation of Mineral Assets
Financial Instruments: Disclosures
176
BFRS No.
1
2
3
4
5
6
7
Status
N/A
N/A
Applied
N/A
N/A
N/A
Applied to the extent of compliance
with core risk management guideline
of Bangladesh Bank.
Operating Segments
8
N/A
Consolidated Financial Statements
10
Applied
a n n u a l
re p o r t
2 0 13
2
Basis of Presentation of Financial Statements and Significant Accounting Policies
2.1
Basis of Preparation of the Financial Statements
The Financial Statements, namely, Balance Sheet, Profit and Loss Account, Cash Flow Statements, Statement of Changes
in Equity, Statement of Liquidity Analysis and relevant notes to the financial statements and disclosures thereto, of the Bank
are prepared under historical cost convention on a going concern basis.
2.1.1 Statement of Compliance
The Financial Statements of the Bank have been prepared in accordance with Bangladesh Financial Reporting Standards
(BFRS), and the requirements of Bank Companies Act 1991(as ammended upto year 2013), BRPD Circular no: 15 dated
09.11.2009 Along with other rules and regulations issued by Bangladesh Bank, the Companies Act 1994, the Securities
and Exchange Rules 1987. In case any requirement of the Bank Companies act 1991, and provisions and circulars issued
by Bangladesh Bank differ with those of BFRS, the requirement of the Bank Companies Act 1991, and provisions and
circulars issued by Bangladesh Bank shall prevail. Material and partial departures from the requirements of BFRS as well
as the compliance with the Bangladesh Bank circulars are as follows:
I)
Investment in Shares and Securities
The bank investment in different securities has been valued on 31.12.2013 as under:
Quoted Bond & Shares
At cost or Market Value whichever is lower
Unquoted Shares
At cost
Bangladesh Govt. Islamic Bond
At cost
CDBL Share & Preference Share
At cost
All investment in securities are initially recognized at cost, including acquisition charges associated with the investment.
Premiums are amortised and discounts are accredited.
As per BRPD Circular No. 15 (09 November 2009), investments in quoted shares and unquoted shares are revalued at
the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made
for any loss arising from diminution in value of investment. As such the company measures and recognizes investment in
quoted and unquoted shares at cost if the year–end market value (for quoted shares) and book value (for unquoted shares)
are higher than the cost. However as per requirements of Bangladesh Accounting Standard (BAS)- 39, investment in
shares falls either under “at fair value through profit and loss account” or under “available for sale” where any change
in the fair value at the year-end is taken to profit and loss account or revaluation reserve respectively. SIBL recognises its
‘Investment in Shares and Securities’ as per BAS-39 and accounted for the required profit/(loss) after adjustment of the
value of shares and securities through profit and loss account.
ii)
Revaluation gains/losses on Government Securities
SIBL is a bank running on Islamic Shariah Principle. Hence, we do not participate in buying interest bearing Government
Securities.
iii)
Investments and Provisions
As per BAS-39 impairmrnt assessment should be done by considering whether any objective evidence of impairment exists
for financial assets that are individually significant. For financial assets thet are not individually significant, the assessment
can be performed on an individual or collective (portfolio) basis.
However, Provision for classified and unclassified investment is made on the basis of year end review by the management
and of instructions contained in Bangladesh Bank BCD Circular No.34 Dated 16 November 1989, BCD Circular No.20 (27
December 1994), BCD Circular No. 12 (04 September 1995), BRPD Circular No. 16 (06 December 1998), BRPD Circular
No. 9 (14 May 2001), BRPD Circular Letter No. 10 (20 August 2005), BRPD Circular Letter No. 10 (18 September 2007),
BRPD Circular No. 5 (29 April 2008), BRPD Circular Letter No: 32 (10 October 2010), BRPD Circular No: 14 (23 September
2012), BRPD Circular No:19 (27 December 2012), and BRPD Circular No: 05 (29 May 2013) at the following rates:
Particulars
General Provision on Contingent Liability/ Non Funded Business
General Provision on Unclassified Investment
General Provision on Investment for Small and Medium Enterprise
General Provision on Investment for Professionals
General Provision on Investment for House Financing
General Provision on Investment for Consumer Financing
General Provision on Investment for Short term Agri/ Micro credit
General Provision on Special Mention Account
Specific Provision on Substandard Investment
Specific Provision on Doubtful Investment
Specific Provision on Bad / Loss Investment
Rate
1%
1%
0.25%
2%
2%
5%
5%
5%
20%
50%
100%
177
Social Islami Bank Ltd.
As per BRPD Circular No: 14 (23 September 2012), BRPD Circular No: 19 (27 December 2012), and BRPD Circular No: 05
(29 May 2013) a general provision at 0.25% to 5% under different categories of unclassified investments (good/standard
investments) has to be maintained regardless of objective evidence of impairment.
As per same circulars mentioned above we are to maintain provision @ 20%, 50% and 100% for investments classified as
sub-standard, doubtful and bad & loss category respectively depending on the duration of overdue.
As per BRPD Circular No. 10 (18 September 2007) and BRPD Circular No: 14 (23 September 2012), a general provision
at 1% is required to be provided for all off-balance sheet risk exposures.
However, such general provision on general investment & off-balance sheet exposures and specific provisions on classified
investmnets cannot satisfy the conditions of provision as per Bangladesh Accounting Standard (BAS)-39.
iv)
Recognition of profit suspense
Profit / Rent / Compensation Suspense account and Doubtful Income
Profit / Rent / compensation accrued on classified investments are suspended and accounted for as per BRPD Circular
no: 15 (09 November 2009) issued by the Bangladesh Bank. Moreover, incomes that are irregular (doubtful) as per Shariah
are also not included in the distributable income of the Bank.
Income on unclassified overdue investment of Murabaha and Bai-Muazzal is charged under compensation account instead
of showing as income of the Bank.
Interest received from NOSTRO accounts are not credited to the income as per Islamic Shariah.
v)
Other comprehensive income
As per BAS-1 (Presentation of Financial Statements), other comprehnsive income (OCI) or components of OCI, as a part
of financial statements are to be included in a single Other Comprehensive Income statement.
However, as per BRPD Circular No. 15 (09 November 2009), there are no statement of OCI and we follow the template for
reporting as per the circular. If there is any component of OCI, it is shown in statement of changes in equity.
vi)
Financial instruments-presentation and disclosure
Financial instruments-presentation and disclosures are made in several cases as per guidelines and instructions of
Bangladesh Bank in particular and respective cases. Requirements of BAS-32 and BFRS-7 can not be followed due to the
presentation and disclosure obligations of Bangladesh Bank.
vii)
Financial guarantees
Financial guarantees such as letter of credit, letter of guarantee etc. are treated as off-balance sheet items as per relevant
Bangladesh Bank Circular, BRPD 15 (09 November 2009) whereas as per BAS 39, these should be treated as ‘Other
Liability’. No liability is recognised for the guarantee except the cash margin.
We account for the financial guarantees as per BRPD 15 (09 November 2009) and liability for financial guarantees are not
recognised initially at their fair value and the fair value amortisation of the same liability is not done either as per BAS 39.
So that the financial guarantees are not also carried at the higher of this amortised amount and the present value of any
expected payment when a payment under the guarantee has become probable.
viii)
Cash and cash equivalent
As per BRPD circular no 15 (09 November 2009), cash and cash equivalents include notes and coins in hand, balances
lying with ATM, unrestricted balances held with Bangladesh Bank and its agent Bank, balance with other Banks and
Financial Institutions, placement with Banks and other Financial Institutions.
As per BAS 7, cash and cash and cash equivalents should be reported as cash item and reconciliation of the amounts of
the items in its cash flow statement should be presented also. However, presentation and reconciliation is done in line with
BRPD circular 15 and BAS 7.
ix)
Non-banking asset
In accordance with BRPD 15, non-banking asset should be presented in the face of Balance sheet if there is any. But, no
BFRS indicates for accounting of non-banking assets. However, there is no non-banking assets of SIBL.
x)
Cash Flow Statement
Bangladesh Accounting Standard (BAS)-7 “ Cash Flow Statement” requires SIBL to prepare cash flow statement under
direct method. However, Cash Flow Statement has been prepared under a adopted method of direct and indirect in
accordance with the BRPD Circular No. 15, (09 November 2009) issued by the Banking Regulation and Policy Department
of Bangladesh Bank.
xi)
Balance with Bangladesh Bank (Cash Reserve Requirement, CRR)
BAS 7 requires balance with Bangladesh Bank to be treated as other assets. However, as per BRPD circular 15, SIBL
treats balance with Bangladesh Bank as cash and cash equivalent though the amount is restricted for CRR purpose and
can not be used in our day to day operational requirement.
178
a n n u a l
xii)
re p o r t
2 0 13
Presentation of intangible asset
As per BAS 38, intangible assets are accounted for and amortized. Related necessary disclosures for the intangible asset;
i.e computer software is given in note 8.1.
There is no restriction or recommendation for accounting for the intangible assets as per any Bangladesh Bank circular.
xiii) Off-balance sheet items
Contingent Liabilities
Any possible obligation that arises form past events and the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or
Any present obligation that arises from past events but is not recognised because:
* it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
* the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow
of resources embodying economic benefits is reliably estimated. Contingent assets are not recognised in the financial
statements as this may results in the recognition of income which may never be realised. However, the amount of cash
margin is recognised as liability.
As per BRPD circular 15, contingent liabilities are recognised as off balance sheet items in absence of any recommendation in BFRS.
xiv) Investments net off provisions
Investments are presented at its actual value without netting off as per BRPD circular 15 though it is to be presented at net
off value as per related BFRS.
2.2
Consolidation Procedures (BAS-27)
The consolidated financial statements include the financial statements of Social Islami Bank Limited and its subsidiaries
SIBL Securities Limited and SIBL Investment Limited, made up to the end of the financial year.
The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard
(BAS)27: Consolidated and Separate Financial Statements, Bangladesh Financial Reporting Standards (BFRS):3Business Combinations and Bangladesh Financial Reporting Standards (BFRS):10- Consolidated Financial Statements.
The consolidated financial statements are prepared to a common financial period ended 31 December 2013.
2.3
Subsidiary
Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or
indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the
date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements
from the date that control effectively commences until the date that the control effectively ceases. Subsidiary company is
consolidated using the purchase method of accounting.
2.4
Functional and Presentation Currency
These financial statements are presented in Bangladesh Taka (Tk) which is the Bank’s functional currency. Except as
indicated, figures have been rounded off to the nearest Taka.
2.5
Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with BFRSs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
2.6
Foreign Currency Transactions /Translation
Foreign currency transactions are converted into equivalent Taka currency using the ruling exchange rates on the dates of
such transaction(s).
Assets and Liabilities in foreign currencies as on 31 December 2013 have been converted into Taka currency at the
weighted average of the prevailing buying and selling rate of inter-bank market as determined by Bangladesh Bank on the
closing date of every month. Balances held in foreign currencies other than US dollar are translated into equivalent US
dollar at buying rates of New York closing of the previous day. Differences arising through buying and selling transactions
of foreign currencies on different dates during the period from January to December 2013 have been adjusted by debiting
or crediting to the Profit and Loss Account.
179
Social Islami Bank Ltd.
2.7
Reporting Period
These financial statements cover twelve months from 01 January to 31 December 2013.
2.8
Statement of Changes in Equity
The statement of changes in equity reflects information about the increase or decrease in net assets or wealth.
2.9
Liquidity Statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term which
has been given in the statement.
2.10 Fixed Assets, Depreciation and Revaluation (BAS-16)
Assets have been shown at cost less depreciation as per paragraph 43 of Bangladesh Accounting Standard (BAS)-16
“Property, Plant & Equipments”. Depreciation has been charged on reducing balance method except motor vehicle;
which has been charged on straight-line method. Depreciation on addition of assets has been charged from the date of
purchase. Rate of depreciation are as under:
Particulars
Building
Furniture
Decoration
Mechanical Appliance
Motor Car
Books
Rate (%)
2.5
10
10
20
20
10
Estimated life(Years)
40
10
10
5
5
10
Revaluation
Land and building are revalued as per Bangladesh Accounting Standard (BAS)-16, ‘Property, Plant and Equipment’ as
well as Bangladesh Bank BCD Circular Letter No. 12 & 18, dated: 20 April 1993 & 15 June 1993, respectively and BRPD
Circular No. 10 and 09, Dated: 25 November 2002 and 31 December 2008.
The Bank revalued its fixed assets on 20.03.2011 by two separate valuers, namely- ‘Commodity Inspection Services (BD)
Ltd.’ and ‘Royal Inspection International Ltd.’ But the effects on assets have been accounted for as on 30.03.2011.
Reserve is created by the sum of revaluation surplus and depreciation is charged on the revalued assets except land as per
the respective rate of depreciation.
2.11 Capital/Shareholders’ Equity
Authorised capital
Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of
Association.
Paid up Capital
Paid up capital represents total amount of shareholder capital that has been paid in full by the ordinary shareholders.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at
shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders
and creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in Note-14.2.
Statutory Reserve
Statutory reserve has been maintained @ 20% of profit before tax in accordance with provisions of section 24 of the Bank
Companies Act, 1991 (as amended upto 2013) until such reserve equal to its paid up capital together with the share premium.
2.12 Revenue Recognition (BAS-18)
(i) Investment income & Revenue recognition
Profit on investments and deposits are recognized against the investment of fund under Mudaraba, Musharaka, Murabaha,
Bai-Muazzal and Hire Purchase etc. in line with related approved policy of the Board. Profit on investment ceases to be
taken into income when such investment accounts are classified. It is then kept in compensation/rent suspense account
and the same is accounted for on cash basis as and when recovered or de-classified as per related BRPD circular.
Fees and commission income are recognized when it is earned.
Income from investment in shares and securities is recognized on actual basis except Bangladesh Govt. Mudaraba Bond
income which is recognized on accrual basis.
Sharing of Investment Income
In case of Investment, Mudaraba fund gets preference over cost free fund. The investment income earned through deployment
of Mudaraba Fund is shared by Bank and the Mudaraba Depositors at the predetermined ratio fixed by the Bank.
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(ii) Profit Paid on Deposits and Other Expenses
Profit paid on deposits and other expenses are recognized on accrual basis.
As per Mudaraba Principle of Islamic Shari’ah, the Mudaraba Depositors are entitled to get minimum 75% of the investment
income earned through deployment of Mudaraba Fund as per weightage assigned to each type of Mudaraba Deposit. In
the year 2013, SIBL paid 76.68% of investment income earned through deployment of Mudaraba fund. Moreover, in some
Mudaraba deposits, additional rate was allowed over the rate as per weightage. Mudaraba Depositors do not share any
income derived from various banking services where the use of fund is not involved and any income derived from Investing
Bank’s Equity and other Cost Free Fund. Al-Wadeeah Depositors do not share any income of the Bank.
Profit is paid/provided to Mudaraba Deposit accounts at provisional rate on half yearly/anniversary basis considering overall
growth, performance, and profitability of the Bank during the year. Final rates of profit of any accounting year are declared
after finalization of Shari’ah Inspection Report and certifying the Investment Income of the Bank by the Statutory Auditors.
2.13 Provision for Taxation (BAS-12)
(a)
Current Tax
Provision for income tax has been calculated as per Income Tax Ordinance, 1984 as amended by the Finance Act 2013
considering all applicable allowances and disallowances.
(b)
Deferred Tax
The Bank has accounted for deferred tax as per Bangladesh Accounting Standard (BAS)-12, “Income Taxes”.
2.14 Zakat Fund
The Bank has created a Zakat Fund @ 2.58% for the period ended 31 December 2013 on reserve retained through out the
year. Hizri Calendar has been considered to calculate 2.5% of Zakat Fund. Since Hizri Calendar counts 11 days less than
the English Calendar, the percentage 2.5% represents equivalent to 2.58% of English Calendar. It is to be noted here that
shareholders should pay their individual Zakat based on face value (Taka- 10.00 per share) of their individual shareholding
along with their other zakatable assets.
2.15 Retirement Benefits (BAS-19)
Defined contribution plans:
Provident Fund
The Bank operates a contributory provident fund duly approved by the Income Tax Authority. Both the employer and all
eligible employees contribute @ 10% of basic salary to this fund. Trustee board administers this fund.
Defined benefit plans:
Gratuity
As per service rules of the Bank, employee who has completed five years regular service , are eligible for yearly gratuity
@ 1 (one) month basic salary for every full year of regular service and employee who has completed seven years regular
service are eligible for yearly gratuity @ 2 basic salary for full year regular service.The Bank has complied with Bangladesh
Accounting Standard (BAS) -19, “Employee Benefits” and necessary provision i.e @ 12.6% of basic salary of the
regular employees have been made as per actuary valuation of Z. Halim & Associates, Actuarial & Pension Consultants for
the period ended 31 December 2013.
2.16 Reconciliation of Inter Bank / Branch Transactions
Books of accounts with regard to inter bank/branch transactions (In Bangladesh and outside Bangladesh) are reconciled
and there are no material differences that may affect the financial statements significantly.
2.17 Risk Management
Today’s most risky nature of Banking business has caused the Central Banks of every country much concerned about
the risk factors affecting the financial position of the banks. In this connection every Central Banks have come forwarded
to establish a general framework to defeat the risk factors considering the laws of the land. Bangladesh Bank has also
undertaken an overall core-risk management project under which every bank shall be bounded to the authoritative
covenants to install risk management system. Social Islami Bank has established approved policies covering major
areas such as (a) Investment Risk Management, (b) Foreign Exchange Risk Management (c) Asset Liability Management
(d) Money Laundering Prevention (e) Internal Control & Compliance and (f) Guideline on Information & Communication
Technology according to the DOS circular no: 02 (15 February 2012) regarding ‘Risk Management Guidelines’ for Banks,
Bank Companies Act 1991 (as amended upto 2013) and other guidelines of Bangladesh Bank.
In addition, the bank is also following relevant Bangladesh Bank guidelines on risk based capital adequacy, stress testing
and managing the banking risks in other core risk areas.
The bank has established an independent Risk Management Unit (RMU) as per DOS cirular no:02 (15 February 2012). The
181
Social Islami Bank Ltd.
RMU conducts stress testing as per DOS circular no: 01 (23 February 2011), for examining the Bank’s capacity of handling
futur shocks, as well as deals with all potential risks that might occur in future.
The prime objective of the Risk Management is that the bank takes well calculative business risks while safeguarding the
bank’s capital, its financial resources and profitability from various risks. In this context, the bank took steps to implement
the guidelines of Bangladesh Bank as under:
(a)
Investment Risk Management
Investment risk is one of the major risks faced by the bank. This can be described as potential loss arising from the failure
of a counter party to perform as per contractual agreement with the bank. The failure may results from unwillingness of
the counter party or decline of financial condition. Therefore, the Bank’s investment risk management activities have been
designed to address all these issues.
The Bank has segregated duties of the Officers / Executives involved in investment related activities. A separate Corporate
Division has been formed at Head Office, which is entrusted with the duties of maintaining effective relationship with the customer,
marketing of credit products, exploring new business opportunities etc. Moreover, investment approval, administration, monitoring
and recovery functions have been segregated. For this purpose, three separate units have been formed within the Investment
Division. These are (a) Investment Risk Management Unit, (b) Investment Administration Unit and (c) Investment Monitoring &
Recovery Unit. Investment Risk Management Unit is entrusted with the duties of maintaining asset quality, assessing risk in
lending to a particular customer, sanctioning investment, formulating policy / strategy for lending operation etc.
A thorough assessment is done before sanctioning of investment facility at Investment 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 Division by the Relationship
Manager/ Officer and ends at Investment Risk Management Unit when individual executives. Proposal beyond their
delegation are approved / declined by the Executive Committee and / or the Management.
In determining single borrower / large investment limit, the Bangladesh Bank instructions are strictly followed. Internal audit
is conducted on periodical interval to ensure compliance of Bank’s and regulatory policies. Investments are classified as per
Bangladesh Bank’s guidelines.
(b)
Foreign Exchange Risk Management
Foreign Exchange risk is defined as the potential change in earnings arising 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 of single borrower limit shown in note.
International Department independently conducts the transactions relating to foreign exchange and 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
monthly basis and the management for its settlement reviews outstanding entry beyond 30 days.
(c)
Asset Liability Management Risk
Asset Liability Management (ALM) has been defined as a planned, structured and systematic process of managing the
asset and liability with a view to lead the Bank to a balanced and sustainable growth through minimizing various business
risk factors - market risk and liquidity risk. According to the Bangladesh Bank guidelines and considering the most practical
aspects of the Bank, an approved policy manual on ALM has been prepared so that it could be followed consistently every
sphere of the management. To support the ALM process, the Bank has established a committee called “Asset Liability
Committee (ALCO)” headed by the Managing Director and holds meeting at least once in every month. ALM Desk, an
exclusive functional and operational desk for the asset liability management, is embodied herewith the ALCO to function
under the direct control of Financial Administration Division (FAD).
ALCO reviews the liquidity requirement of the Bank, the maturity of assets and liabilities, deposit and lending, pricing strategy
and the liquidity contingency plan at the threshold of stress liquidity situation. Besides that monitoring and analyzing of significant
volatility in net investment income, investment value and exchange earnings etc. are the common and regular job of the ALM desk.
(d)
Money Laundering Risk
Social Islami Bank Limited (SIBL) has framed an approved Money Laundering Prevention Policy Guideline so that it could
be sufficient enough to protect the bank from tribulations of money laundering.
As per Money Laundering Prevention Act, 2002 and Money Laundering Prevention circular, a Central Compliance Unit
(CCU) has been formed at Head Office in SIBL and a designated person has been nominated to supply any information
if required and report any abnormal and suspicious transactions to Bangladesh Bank through CCU. Chief Anti Money
Laundering Compliance Officer (CAMALCO) has been designated at head office and Branch Anti Money Laundering
Compliance Officers (BAMALCO) has been nominated at branches. The second man of the ninety-four branches of SIBL
has been complying the responsibility for their respective branches as Branch Anti Money Laundering Compliance Officers
(BAMALCO) as per the direction of Bangladesh Bank.
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Know Your Customer (KYC) profile, Risk Rating and Assessment (RRA) profile and Transaction Profile (TP) have been
introduced as per the direction of Bangladesh Bank. These profiles facilitate and ease the KYC procedures, risk categorization,
transaction monitoring process, suspicious activity reporting process, self-assessment process, independent procedures
testing system etc. Proper record keeping procedure has been established also.
The action plan regarding the KYC procedures of those accounts, which opened before 30-04-2002 already has been sent
to the Bangladesh Bank. The branches, which are liable to act in accordance with this action plan, has been complying it
properly and vigorously.
Various types of statements such as Quarterly STR, Quarterly KYC statement for legacy accounts, Bi-monthly statements
etc has been sent to the Bangladesh Bank properly. “ FIU Reporting System “ Version-1.0.3 Software has been installed
all of the branches as per the direction of central bank. As a result, the soft copy of Cash Transaction Report (CTR) and
Suspicious Transaction Report (STR) has been sent to Bangladesh Bank properly in due time.
The training procedure has been conforming as per the action plan, which was given to Bangladesh Bank. It provides
significant role to develop and to aware the staffs of SIBL about Anti Money Laundering. The management of the Bank is
committed to train all of its workforces regarding anti money laundering.
(e)
Internal Control and Compliance Risk
Internal controls ensure systematic and orderly flow of various operational activities within the organization. Now a day in the
biggest and complex business environment, compliance becomes one of the major concern to the corporate being major risk
involved in non-compliance of statutory requirements and operational procedures. To protect and safeguard the Bank form any
means of fraud and error as well as loss - Social Islami Bank has introduced the “Internal Control and Compliance guideline and
also established a separate department called “Internal Control and Compliance Department (ICCD)” at Head Office staffed
with some experienced senior Banker rest with the power and duties to train the employees of the bank, give direction, monitor,
audit and establish control on day to day operational procedures and statutory and non-statutory compliances.
ICCD collects different periodical reports, departmental control function check list etc. for documentation and also
undertakes periodical and special audit of the branches and departments at Head Office for review of the operation and
compliance of statutory requirements and the Board Audit Committee reviews the reports.
(f)
Information and Communication Technology Security Risk
According to the latest requirement of the Bangladesh Bank on Core Risk Management, ICT policy guideline has been
newly introduced at Social Islami Bank. The prime objective of such guideline is to protect data properties of the Banks
from any means of loss, unauthorized use, forgery and destruction as well as documentation of all ICT related tasks to
reduce man dependency and increase process dependency. According to this guideline, ICT department responses,
monitors, trains and co-ordinates the total IT matter with other departments and branches so that man and machine could
effectively co-opt on timely fashion. The ICT department ensures necessary guidelines / instructions to the Departments /
Branches and monitors status of implementation strictly.
g)
Internal Audit
The bank initiates internal audit of the branches and head office divisions on a periodical basis, concurrent basis and surprise
inspection is also done to check the compliance status of the cost centers of the bank. The internal audit is supervised
under ICCD and a separate division named ‘Board Audit Cell (BAC)’ also conducts internal audit under supervision and
direct authority of Board Audit Committee. This BAC directly reports to the Chairman of Board Audit Committee. This way a
strong internal audit of the cost centers as well as of Head Office Divisions are conducted to ensure all related compliance.
h)
Fraud and Forgeries
Fraud and Forgeries are a critical dimension, the banking industry is facing now a days. In order to safeguard the bank from
all probable fraud and forgeries that may occur in any respect, the bank has taken all possible safety security measures that
are undertaken under direct supervision of ICCD. Concurrent audit, internal audit, Board audit etc. are done periodically
along with surprise audit from time to time. Moreover, there are a lot of safety measures initiated at the branch level also.
The core banking solution Ababil is desiged to prevent IT related fraud and forgeries.
2.18 Earning Per Share (BAS-33)
Basic Earnings Per Share has been calculated in accordance with Bangladesh Accounting Standard (BAS)-33: Earnings
Per Share (EPS), which has been shown on the face of profit and loss account. This has been calculated by dividing the
basic earnings by the weighted average number of ordinary shares outstanding during the period. Prior year EPS has been
restated as and when required.
183
Social Islami Bank Ltd.
3
Cash
In hand:
In local currency
In foreign currencies
ATM balance
In Foreign Currencies
Currency
3(a)
Foreign
Currency
USD
S. Rial
Amount in FC
100,701
1,940
Exchange
Rate
77.75
21.20
3.1.1
3.1.2
3.2
2012
Taka
1,243,774,013
7,870,630
15,317,700
1,266,962,343
1,086,536,063
5,128,359
12,863,800
1,104,528,222
7,829,502
41,128
7,870,630
5,128,359
5,128,359
1,266,962,343
251,624
250,004
1,620
1,267,213,967
1,104,528,222
129,398
116,228
13,170
1,104,657,620
7,528,272,016
99,518,234
7,627,790,250
9,912,135,883
108,418,951
10,020,554,834
6,434,688,027
1,093,583,989
7,528,272,016
8,702,803,548
1,209,332,335
9,912,135,883
99,518,234
108,418,951
Consolidated balance of cash in hand
Social Islami Bank Limited
Cash in hand of Subsidiary companies
SIBL Securities Limited
SIBL Investment Limited
3.1
2013
Taka
Balance with Bangladesh Bank and its agent bank (Sonali Bank)
Balance with Bangladesh Bank (Note-3.1.1)
Balance with Sonali Bank (as agent of BB) (Note-3.1.2)
Balance with Bangladesh Bank (Including foreign currencies)
In local currency
In foreign currencies
Balance with Sonali Bank (as agent of Bangladesh Bank)
In local currency
Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)
Cash Reserve Requirement (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 and BRPD Circular No. 22 dated November 6, 2003: BRPD Circular No. 12 dated August 25,
2005 and DOS Circular No.01 dated March 03, 2009 and MPD circular no: 04 and 05 dated 01 December 2010.
The statutory cash reserve requirement on bank’s time and demand liabilities at the rate of 6.00% has been calculated
and maintained with Bangladesh Bank in current account and 11.5% statutory liquidity ratio including CRR on the same
liabilities has also been maintained in the form of BD Govt. Islamic Bond including FC (Foreign Currency) balances with
Bangladesh Bank, Cash in vault and transit. Both the reserves are maintained by the Bank in excess of the statutory
requirements, as shown below:
3.3
Cash Reserve Requirement (CRR): 6.00% of average Demand and Time Liabilities)
Required Reserve
Actual Reserve held (in local currency)
Surplus
3.4
4,349,977,184
8,811,222,499
852,167,130
4,461,245,315
10,890,575,000
14,394,752,593
3,504,177,593
8,337,456,270
14,025,083,056
5,687,626,786
Statutory Liquidity Ratio (SLR): 11.5% (including 6.00% CRR) of
Average Demand and Time Liabilities
Required Reserve
Actual Reserve held (Note- 3.5)
Surplus
184
5,682,039,130
6,534,206,261
a n n u a l
re p o r t
2013
Taka
3.5
4
Held for Statutory Liquidity Ratio
Cash in hand (Note- 3)
Balance with Bangladesh Bank and its agent banks (Note-3.1)
Bangladesh Govt. Islamic Bond (Note- 6.4)
2012
Taka
1,266,962,343
7,627,790,250
5,500,000,000
14,394,752,593
1,104,528,222
10,020,554,834
2,900,000,000
14,025,083,056
1,870,113,449
1,178,527,956
3,048,641,405
2,713,496,766
849,779,375
3,563,276,141
1,870,113,449
2,713,496,766
262,304,982
12,350,525
249,954,457
317,453,862
67,498,715
249,955,147
2,132,418,431
262,304,982
12,350,525
249,954,457
3,030,950,628
317,453,862
67,498,715
249,955,147
29,129,747
29,129,747
-
13,343,084
13,343,084
-
1,899,243,196
2,726,839,850
620,568
20,201,422
608
5,470,364
4,805,052
4,906,750
36,004,763
5,132,544
16,742,099
7,936,152
4,207,787
2,787,307
36,805,889
829,409
13,442
366,738,442
7,004
348
502,205
6,684,335
30,037,506
75,522,077
10,940
480,345,708
790,819
16,092
1,671,876
8,272
1,456
487,240
1,003,221
866,873,778
280,426,511
7,008,090
1,158,287,355
Balance with Other Banks and Financial Institutions
(Other than Mudaraba Term Deposit)
In Bangladesh (Note - 4.1)
Outside Bangladesh (Note- 4.4)
4(a)
2 0 13
Consolidated balance of other Banks and Financial Institutions
In Bangladesh
Social Islami Bank Limited
Add: Account Balance of subsidiaries of SIBL with SIBL Principal Branch
SIBL Securities Limited (Current account and MTDR)
SIBL Investment Limited
Less: Inter company balance eliminated
SIBL Securities Limited (Current account and MTDR)
SIBL Investment Limited
Add: Account Balance of subsidiaries of SIBL
with other banks and financial institutions
SIBL Securities Limited
SIBL Investment Limited
Consolidated balance with Banks and Financial Institutions
The balances are held with the ‘Principal Branch’ of SIBL bearing current account no:
0002-13300056882 and 0002-13300057058 respectively.
4.1
4.2
Inside Bangladesh
Current Account
Islami Bank Bangladesh Limited
Sonali Bank Limited
Rupali Bank Limited
Brac Bank Limited (Remittance settlement Account)
Trust Bank Limited (ATM settlement Account)
Standard Chartered Bank (ATM settlement Account)
Mudaraba Short Notice Deposits
Al- Arafah Islami Bank Limited
ICB Islami Bank Limited
Shahjalal Islami Bank Limited
Prime Bank Limited (Islami Banking Branch)
United Commercial Bank Limited
Bank Asia Limited (Islami Banking Branch)
Islami Bank Bangladesh Limited
Jamuna Bank Limited (Islami Banking Branch)
Pubali Bank Limited (Islami Banking Branch)
Janata Bank Limited
185
Social Islami Bank Ltd.
2013
Taka
4.3
Mudaraba Saving Deposit
Al- Arafah Islami Bank Limited
ICB Islami Bank Limited
Dhaka Bank Limited (Islami Banking Branch)
Dhaka Bank Limited (Local Office)
AB Bank Limited (Islami Banking Branch)
Exim Bank Limited
Prime Bank Limited (Islami Banking Branch)
Shahjalal Islami Bank Limited
The City Bank Limited (Islami Banking Branch)
Southeast Bank Limited (Islami Banking Branch)
First Security Islami Bank Limited
Total
2012
Taka
432,449,439
82,004
2,446,407
102,786
1,614,888
24,581,248
11,476,239
109,527,985
2,894,458
760,484,529
8,102,995
1,353,762,977
310,957,544
82,814
2,262,515
4,766,449
57,724,211
404,460,677
305,830,073
57,657,256
366,932,088
7,729,895
1,518,403,522
1,870,113,449
2,713,496,766
2013
4.4
Outside Bangladesh (NOSTRO Account)
Current Account with
Currency
Mashreque Bank, Mumbai
ACUE
F.C. Amount
1,228.92
Rate
Taka
106.84
131,293
Mashreque Bank, Mumbai
ACU
3,405.97
77.75
264,814
Mashreque Bank, New York
USD
2,742,313.48
77.75
213,201,242
Mashreque Bank, New York (OBU)
USD
100.00
77.75
7,775
Standard Chartered Bank Limited, Mumbai
ACU
6,241.32
77.75
485,263
Standard Chartered Bank Limited, Frankfurt
EUR
626.76
106.84
66,961
Standard Chartered Bank Limited, London
GBP
3,532.48
128.10
452,514
Standard Chartered Bank Limited, Tokyo
JPY
764,955.00
0.74
564,764
Standard Chartered Bank Limited, New York
USD
12,356,973.44
77.75
960,754,685
United National Bank of London
GBP
314.05
128.10
40,230
Sonali Bank (UK) Limited
USD
6,056.34
77.75
470,886
Sonali Bank (UK) Limited
GBP
2,020.00
128.10
258,764
Sonali Bank (UK) Limited
EUR
440.33
106.84
47,043
Sonali Bank, Kolkata
ACU
1,593.88
77.75
123,924
United Bank of India, Kolkata
ACU
2,689.16
77.75
209,082
Summit Bank Ltd., Karachi
ACU
2,049.41
77.75
159,342
Nepal Bangladesh Bank Ltd.,Kathmandu
ACU
1,375.36
77.75
106,934
AB Bank Ltd., Mumbai
ACU
2,591.07
77.75
201,456
Habib Bank Ltd. Karachi
ACU
4,889.83
77.75
380,184
Bank of Bhutan
ACU
1,326.05
77.75
103,100
Commerz Bank Frankfurt
EUR
4,658.53
106.84
497,700
1,178,527,956
Currency wise Distribution:
Foreign Currency
USD/ACU
GBP
EUR
YEN
2013
Composition
2012
Composition
99.83%
0.06%
0.06%
0.05%
100%
96.89%
1.82%
1.22%
0.07%
100%
2013
Taka
1,176,468,687
751,508
742,997
564,764
1,178,527,956
2012
Taka
823,412,290
15,427,628
10,340,033
599,424
849,779,375
Please see ‘Annexure-C’ for details comparative statement of 2013 & 2012 of foreign currency amount and rate.
186
a n n u a l
re p o r t
2013
Taka
4.5
5,524,879,564
3,540,000,000
9,064,879,564
6,225,879,564
2,790,000,000
9,015,879,564
224,879,564
800,000,000
400,000,000
1,700,000,000
1,000,000,000
1,000,000,000
200,000,000
200,000,000
5,524,879,564
225,879,564
900,000,000
400,000,000
200,000,000
1,800,000,000
1,000,000,000
300,000,000
1,200,000,000
200,000,000
6,225,879,564
250,000,000
280,000,000
400,000,000
750,000,000
1,000,000,000
450,000,000
100,000,000
250,000,000
60,000,000
3,540,000,000
450,000,000
30,000,000
150,000,000
750,000,000
700,000,000
400,000,000
150,000,000
150,000,000
10,000,000
2,790,000,000
500,000,000
3,350,000,000
5,214,879,564
9,064,879,564
950,000,000
1,980,000,000
6,085,879,564
9,015,879,564
Mudaraba Term Deposits with Other Financial Institutions
United Leasing Company Limited
Islamic Finance & Investment Limited
IIDFC
International Leasing Finance & Services Limited
Prime Finance & Investment Limited
IDLC Finance Limited
Union Capital Limited
Lanka Bangla Finance Limited
Fareast Finance and Investment Limited
Hajj Finance Company Limited
5.3
2,196,712,971
683,281,585
683,281,585
3,563,276,141
Mudaraba Term Deposits with Banks
ICB Islamic Bank Limited
Al-Arafah Islami Bank Limited
Dhaka Bank Limited (Islami Banking Branch)
South East Bank Limited (Islami Banking Branch)
Shahjalal Islami Bank Limited
Exim Bank Limited
Bank Asia Limited (Islami Banking Branch)
First Security Islami Bank Limited
The City Bank Limited (Islami Banking Branch)
Union Bank Limited
5.2
1,830,254,726
609,193,340
609,193,340
3,048,641,405
Placement with Banks & other Financial Institutions
Placement with Banks (Note-5.1)
Placement with other Financial Institutions (Note-5.2)
5.1
2012
Taka
Maturity-wise groupings of balance with other
Banks and Financial Institutions (Both in Bangladesh and outside Bangladesh)
On Demand
Not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
More than 5 years
5
2 0 13
Maturity-wise groupings of placement with
Banks and other Financial Institutions
On Demand
Not more than 3 months
More than 3 months but less than 1 year
More than 1 year but less than 5 years
More than 5 years
187
Social Islami Bank Ltd.
2013
Taka
6
2012
Taka
Investment in Shares & Securities
Government
Government Bond (Islamic Investment Bond) (Note 6.1)
5,500,000,000
5,500,000,000
2,900,000,000
2,900,000,000
Investment in Shares, Quoted (Note 6.2)
1,089,519,317
738,620,499
Investment in Shares, Unquoted (Note 6.3)
2,131,567,850
2,631,567,850
3,221,087,167
3,370,188,349
Fair value adjustment through profit or loss (FVTPL) (note: 6.5)
(182,903,697)
(126,173,365)
Value of Investment in Shares and securities, Others
3,038,183,470
3,244,014,984
Grand Total
8,538,183,470
6,144,014,984
Maturity-wise Grouping of Investment in Securities:
Upto one month
1,406,615,620
812,447,134
700,000,000
400,000,000
Others
Not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
More than 5 years
6(a)
Consolidated Investment in Shares and Securities
Social Islami Bank Limited
Government
Investment in Government Islamic Bond
Others sectors
4,300,000,000
2,300,000,000
501,569,450
1,001,569,450
1,629,998,400
8,538,183,470
1,629,998,400
6,144,014,984
5,500,000,000
5,500,000,000
2,900,000,000
2,900,000,000
3,038,183,470
3,244,014,984
1,479,998,400
1,479,998,400
1,229,999,000
1,229,999,000
249,999,400
249,999,400
1,558,185,070
1,764,016,584
7,058,185,070
4,664,016,584
Less: Intercompany balance eliminated
Investments in Subsidiaries
Investment in SIBL Securities Limited
Investment in SIBL Investment Limited
Consolidated Investment in others sectors
Total consolidated balance of Investment in shares and securities
6.1
Bangladesh Bank introduced a new type of investment opportunity solely for the purpose of Shariah Banks in the year 2005
being inheritent limitation on the part of Shariah Compliant Banks to take part in buying and selling of treasury bill etc as a very
common form of treasury management. The fund has been operating under Mudaraba Principle and are being used as a part of
SLR (Statutory Liquidity Requirement) vide Bangladesh Bank Circular Letter Ref. No: AMA/AUSOBI/SANCHAY/S-03/2004/262
dated September 2, 2004.
The mobilized fund from Islamic Bond is invested by Bangladesh Bank and a portion of realized profit is distributed amongst
the bond holders as per mudaraba principle of Islamic Shariah on the basis of the tenure of the bond. So, the rate of return
from Islamic Bond is not prefixed rather dependent on fund deployment by Bangladesh Bank.
188
a n n u a l
6.2
2 0 13
2013
Taka
2012
Taka
12,155,000
11,965,679
478,500
1,071,536
ICB 3rd Mutual Fund
8,370,625
13,448,025
ICB 4th Mutual Fund
3,891,000
8,352,234
Investment (Cost) in Shares (Quoted)
ICB 1st Mutual Fund
ICB 2nd Mutual Fund
ICB 5th Mutual Fund
1,606,500
4,633,704
ICB 7th Mutual Fund
13,572,000
17,639,340
ICB 8th Mutual Fund
11,460,034
17,144,838
Popular Ist Mutual Fund
631,575
-
ICB Sonali Mutual Fund
852,326
-
MBL 1st Mutual Fund
651,074
-
AIBL 1st Mutual Fund
728,973
-
AB 1st Mutual Fund
739,845
-
4,600,000
20,000,000
Al-Arafah Islami Bank Limited
50,201,255
65,945,448
AB Bank Limited
27,297,000
59,533,246
Exim Bank Limited
31,163,200
42,489,473
Bank Asia Limited
15,365,400
28,687,500
Dhaka Bank Limited
22,888,466
34,856,688
Titas Gas Limited
19,599,905
27,362,281
City Bank Limited
10,720,000
16,106,827
Beximco Limited
11,270,000
25,248,318
9,564
10,580
National Life Insurance Ist Mutual Fund
MJ Bangladesh Limited
Shahjalal Islami Bank Limited
IBBL Mudaraba Perpetual Bond
Orion Pharma Limited
6.3
re p o r t
43,640,625
59,048,343
297,626,450
285,076,438
500,000,000
1,089,519,317
738,620,499
Investment (Cost) in Shares (Unquoted)
CDBL Share
Belhasha Accom JV Limited
Investment in subsidiary: SIBL Securities Limited
Investment in subsidiary: SIBL Investment Limited
Orin Laboratories Limited
FSIBL Mudaraba Subordinate Bond
1,569,450
1,569,450
500,000,000
500,000,000
1,229,999,000
1,229,999,000
249,999,400
249,999,400
-
500,000,000
150,000,000
150,000,000
2,131,567,850
2,631,567,850
Investment in Subsidiaries represents the amount invested in ‘SIBL Securities Limited’ and ‘SIBL Investment Limited’ that
were incorporated on 20 July 2010 and 30 August 2010 respectively vide certificate of incorporation no: C-85876/10 and
C-86726/10. SIBL holds 12,299,990 and 2,499,994 nos. shares of ‘SIBL Securities Limited’ and ‘SIBL Investment Limited’
respectively with a face value of Tk. 100 each and also representing holding of 99.99% shares in both the subsidiaries.
6.4
Government Bond (BD Govt. Islamic Bond)
5,500,000,000
2,900,000,000
189
Social Islami Bank Ltd.
6.5
Details of Shares & Securities in quoted and unquoted other than in subsidiaries
Particulars
2013
Taka
No. of Shares/
Securities
Market price
per Share
Fair value/ Market Cost price as on
value as on
31-12-2013
31-12-2013
Fair value
adjustment
ICB 1st Mutual Fund
14,300
850.00
12,155,000
12,155,000
-
ICB 2nd Mutual Fund
1,500
256.80
385,200
478,500
(93,300)
ICB 3rd Mutual Fund
56,750
190.50
10,810,875
8,370,625
2,440,250
ICB 4th Mutual Fund
30,000
190.10
5,703,000
3,891,000
1,812,000
ICB 5th Mutual Fund
15,000
159.40
2,391,000
1,606,500
784,500
ICB 7th Mutual Fund
174,000
86.00
14,964,000
13,572,000
1,392,000
ICB 8th Mutual Fund
229,660
52.20
11,988,252
11,460,034
528,218
Ist Mutual Fund
550,000
9.20
5,060,000
4,600,000
460,000
Popular Ist Mutual Fund
100,000
6.00
600,000
631,575
(31,575)
ICB Sonali Mutual Fund
100,000
7.90
790,000
852,326
(62,326)
MBL 1st Mutual Fund
100,000
6.30
630,000
651,074
(21,074)
AIBL 1st Mutual Fund
100,000
7.20
720,000
728,973
(8,973)
AB 1st Mutual Fund
100,000
6.90
690,000
739,845
(49,845)
Quoted Shares
National Life Insurance
Al-Arafah Islami Bank Limited
2,340,058
19.10
44,695,108
50,201,255
(5,506,147)
911,250
26.20
23,874,750
27,297,000
(3,422,250)
Exim Bank Limited
1,647,800
12.90
21,256,620
31,163,200
(9,906,580)
Bank Asia Limited
786,160
23.00
18,081,680
15,365,400
2,716,280
AB Bank Limited
Dhaka Bank Limited
1,070,589
18.80
20,127,073
22,888,466
(2,761,393)
Titas Gas Limited
300,000
73.80
22,140,000
19,599,905
2,540,095
City Bank Limited
440,000
20.20
8,888,000
10,720,000
(1,832,000)
Beximco Limited
201,25
32.20
6,480,250
11,270,000
(4,789,750)
MJ Bangladesh Limited
120
75.10
9,012
9,564
(552)
Shahjalal Islami Bank Limited
1,837,500
16.80
30,870,000
43,640,625
(12,770,625)
Orion Pharma Limited
6,000,000
58.70
352,200,000
500,000,000
(147,800,000)
615,509,820
791,892,867
(176,383,047)
291,105,800
297,626,450
(6,520,650)
291,105,800
297,626,450
(6,520,650)
500,000,000
500,000,000
-
500,000,000
500,000,000
-
Quoted Bond
IBBL Mudaraba Perpetual Bond
299,800
971.00
Preference Shares
Belhasha Accom JV Limited
50,000,000
-
Unqoted Shares/ Bond
CDBL Share
FSIBL Mudaraba Subordinate Bond
Grand Total
190
456,945
-
1,569,450
1,569,450
-
300
-
150,000,000
150,000,000
-
151,569,450
151,569,450
-
1,558,185,070
1,741,088,767
(182,903,697)
a n n u a l
re p o r t
2013
Taka
6.6
Cost of shares and securities under the head quoted and
unquoated other than investment in subsidiaries
Fair value adjustment {Profit/(Loss)} to be made
through profit and loss account
Value of shares and securites, Quoted and
Unquoted other than investment in subsidiaries
2 0 13
2012
Taka
1,741,088,767
-
(182,903,697)
-
1,558,185,070
-
Investments in Shares and Securities’ other than investments in subsidiaries under the category ‘Financial Assets at fair
value through profit or loss (FVTPL)’ has been recognised at fair value and the unrealized profit or loss i.e. difference between fair
value and cost has been charged to profit and loss account and value of the investment has been reduced by the same amount
as per requirements of Bangladesh Accounting Standard (BAS)-39, Financial Instruments: Recognition and Measurement.
7
7 (a)
Investments
In Bangladesh
General Investments etc. (Note-7.1)
Bills purchased and discounted-net (Note- 7.2)
76,398,581,962
4,539,818,951
66,459,100,077
2,546,846,049
Outside Bangladesh
Bills purchased and discounted-net (Note- 7.2)
4,983,931,013
7,019,027,782
85,922,331,926
76,024,973,908
76,398,581,962
66,459,100,077
50,000,000
-
-
76,348,581,962
66,459,100,077
9,523,749,964
9,565,873,831
85,872,331,926
76,024,973,908
4,242,313,145
26,475,590,655
39,240,356,958
15,592,813,699
371,257,469
5,130,683,788
16,970,988,616
43,460,289,892
6,770,166,468
3,692,845,144
85,922,331,926
76,024,973,908
580,258,358
3,090,245,590
2,147,088,153
49,304,237,348
12,069,609,964
195,154
7,895,556,887
38,043,913
944,293,881
180,063,656
148,989,056
76,398,581,962
541,697,156
5,571,248,529
203,153,922
40,705,723,827
12,156,391,561
245,009
6,361,565,166
59,592,522
591,391,402
185,294,803
82,796,180
66,459,100,077
Consolidated Investment
General Investments etc.
Less: Intercompany balance eliminated
SIBL Securities Limited
Quard Investment with SIBL- Principal branch
SIBL Investment Limited
Total consolidated general investment
Bills purchased and discounted-net
Grand total
Maturity wise Classification of Investments:
With a residual maturity of
Re-payable on Demand
Not more than 3 months
Over 3 months but not more than 1 year
Over 1 year but not more than 5 years
Over 5 years
7.1
Mode-Wise Investment (General)
a) In Bangladesh
Musharaka
Murabaha
Mudaraba
Bai-Muazzal
Hire-Purchase Sirkatul Meelk
Installment Investment Scheme
Quard
Bai-Salam
Staff Loan
Ijarah
Visa Card
191
Social Islami Bank Ltd.
2013
Taka
2012
Taka
Mode-Wise Investment (General)
b) Outside Bangladesh
Musharaka
Murabaha
Bai-Muazzal
Hire-Purchase Sirkatul Meelk
Installment Investment Scheme
Quard
Bai-Salam
Others
7.2
-
-
4,539,818,951
2,546,846,049
Foreign Bill Purchased
Murabaha Bill of Exchange
Murabaha Wes Bills L/C
Baim-Wes bills
113,086,049
1,062,509,738
1,712,491,073
2,095,844,154
4,983,931,013
53,498,799
2,670,155,998
1,586,192,651
2,709,180,334
7,019,027,782
Grand total of net Bills Purchased and Discounted
9,523,749,964
9,565,873,831
4,539,818,951
5,356,860,964
9,896,679,915
372,929,951
9,523,749,964
2,546,846,049
7,820,912,687
10,367,758,736
801,884,905
9,565,873,831
2,095,224,992
4,571,399,983
2,857,124,989
9,523,749,964
3,348,055,841
3,348,055,841
2,869,762,149
9,565,873,831
Bills Purchased and discounted
Inside Bangladesh
In land Bill Purchase
Bills Purchased and discounted
Outside Bangladesh
7.2.1
Bills Purchased and Discounted
Payable inside Bangladesh
Payable outside Bangladesh
Gross Bills Purchased and Discounted
Less: Profit receivable on Bills Purchased and Discounted
Net Bills Purchased and Discounted
Maturity wise Classification of Bills Purchased and Discounted:
On demand
Over 1 month but less than 3 months
Over 3 months but less than 1 year
1 year or more
7.3
192
Investments on the basis of significant concentration
Investments to allied concern of Directors
Investments to Executives & Staffs
Investments to Customer Groups
Industrial Investment
Others
2013
0.00%
1.31%
63.05%
35.64%
0.00%
100.00%
2012
0.00%
0.88%
65.82%
33.29%
0.00%
100.00%
1,418,206
1,128,178,199
54,169,735,521
30,623,000,000
85,922,331,926
2,050,000
669,332,251
50,041,324,437
25,312,267,220
76,024,973,908
a n n u a l
re p o r t
2 0 13
Investments allowed to individual customer exceeding 15% of Bank’s total capital:
Number of Client with amount of outstanding Investment to whom Investments sanctioned exceeds 15% of total capital of
the bank is reported hereunder. Total capital of the Bank was Tk. 1,162.26 Crore as on 31.12.2013 and was used as base
figure to calculate the single party exposure limit-funded liability; and such limit was fixed at Tk. 174.35 crore (1,162.26 crore x
15% ) till 31.12.2013. It is mentioned here that as per Bank Companies Act, 1991, single party exposure limit has been fixed
at 15% for funded and 20% non-funded investment based on capital maintained for non export oriented clients whereas 15%
funded and 35% non-fundend limit for 100% export oriented clients.
2013
2012
Taka
Taka
Total outstanding amount to such customers at end of the year (Funded)
Nil
Nil
Number of such types of customers
Nil
Nil
Amount of Classified Investments thereon
Nil
Nil
Measures taken for recovery
Not applicable
Not applicable
Details information of Investment more than 10% of Bank’s total capital
Sl
no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
7.4
Name of client
(Figure in Crore Taka)
Outstanding as on 31
December 2013
Outstanding as on 31
December 2012
Total (Funded and Non funded)
Total (Funded and Non funded)
M/s. Agrani Traders, Ovi Traders and A M Trading
M/s. Panama Composite Textile Mills Ltd
Dong Bang Textile Limited
Mars Textile Limited
Thermax Textile Mills Ltd.
Bashundhara Group
Dong Bang Dyeing Limited
Islam Brothers & Co.
FMC Dockyard Ltd.
Rabiul Islam, M/s Rhythm Trading, AR Center
Bashundhara Paper Mills Ltd. (BPML) and its subsidiaries
M/s. Western Dresses Ltd.
M/s Abdul Monem Ltd.
M/s. Mabiya Ship Breakers
218.32
247.94
194.67
184.87
146.49
144.23
119.86
0.00
113.60
109.69
124.40
108.84
215.50
198.42
151.76
126.14
112.93
109.54
-
Customer group and industry wise classification of Investment
Sector
Commercial lending
Export Financing
House Building Investment
Consumer Investment Scheme
Small and Medium Enterprises
Micro Investment
Other Investments
Allied concern of Directors of SIBL
Executives & Staffs of SIBL
Agricultural Industries
Textile Industries
Food & Allied Industries
Pharmaceutical Industries
Leather, Chemical, Cosmetic etc.
Construction Industries
Cement and Ceramic Industries
Service Industries
Transport and Communication Industries
Other Industries
Total
2013
Amount
23,058,648,740
4,850,941,148
2,596,711,263
1,635,570,074
8,242,397,820
19,270,951
13,766,195,525
1,418,206
1,128,178,199
922,802,251
14,194,788,660
1,601,338,497
109,194,225
222,025,782
3,428,418,033
632,300,562
755,306,656
592,802,760
8,164,022,574
85,922,331,926
2012
Composition
26.84%
5.65%
3.02%
1.90%
9.59%
0.02%
16.02%
0.00%
1.31%
1.07%
16.52%
1.86%
0.13%
0.26%
3.99%
0.74%
0.88%
0.69%
9.50%
100.00%
Amount
27,465,574,275
6,209,299,904
3,039,253,391
630,487,762
6,468,970,678
2,467,586
6,225,270,841
2,050,000
669,332,251
911,387,936
7,860,528,990
1,533,409,397
222,720,897
346,473,330
3,093,782,032
561,181,572
543,020,302
1,007,335,645
9,232,427,119
76,024,973,908
Composition
36.13%
8.17%
4.00%
0.83%
8.51%
0.00%
8.19%
0.00%
0.88%
1.20%
10.34%
2.02%
0.29%
0.46%
4.07%
0.74%
0.71%
1.33%
12.14%
100.00
193
Social Islami Bank Ltd.
7.5 Geographical Location-wise Investments
Division
As at 31 December 2013
Amount
Composition
As at 31 December 2012
Amount
Dhaka
60,489,650,493
70.40%
50,654,663,564
66.63%
Chittagong
18,658,533,752
21.72%
16,861,249,797
22.18%
2,525,946,943
2.94%
4,516,622,008
5.94%
230,352,123
0.27%
236,166,458
0.31%
3,262,619,829
3.80%
3,103,393,720
4.08%
Rangpur
537,888,858
0.63%
489,037,823
0.64%
Barisal
217,339,928
0.253%
163,840,538
0.22%
Sylhet
Rajshahi
Khulna
Total
85,922,331,926
100.00%
76,024,973,908
2013
Taka
7.6
Investments (Classification wise)
Unclassified
Standard
2012
Taka
79,753,250,407
72,769,842,801
429,711,876
6,953,779
Classified
Substandard
122,872,000
247,958,549
Doubtful
859,562,790
66,702,397
3,610,895,840
2,216,673,225
84,776,292,913
75,308,130,751
17,860,814
45,986,583
-
-
Standard (short term agri / micro credit)
Substandard (short term agri / micro credit)
Doubtful (short term agri / micro credit)
-
-
Bad or Loss (short term agri/micro credit)
-
1,524,323
17,860,814
47,510,906
Staff lnvestment
7.7
100.00%
Special Mentioned Account
Bad or Loss
1,128,178,199
669,332,251
85,922,331,926
76,024,973,908
775,629,589
691,883,063
1,692,052,956
970,134,818
304,702,298
277,644,499
2,772,384,842
1,939,662,380
Particulars of provision required for general investment
Unclassified (Excluding Off-balance sheet exposures)
Classified
Unclassified- Off-balance sheet exposures
194
Composition
a n n u a l
7.7.1
Detail Particulars of Provision for Investment
Rate
1%
2 0 13
Provision Required
Base for
Provision
Unclassified
Standard
re p o r t
2013
71,143,348,773
2012
711,433,488
654,062,568
Staff Investment
0%
-
-
-
Consumer Finance (Other than HF and LP)
5%
195,334,545
9,766,727
1,010,848
0.25%
8,162,512,764
20,406,282
16,099,675
Housing Finance (HF)
2%
1,400,434,520
28,008,690
17,962,292
Loan for Professionals (LP)
2%
4,403,080
88,062
107,691
Share
2%
50,000,000
1,000,000
-
SMA Investment
5%
426,260,821
5,033,299
340,660
Unclassified Off Balance Sheet Items
1%
30,470,229,787
304,702,298
277,644,499
Classified
Substandard
20%
23,093,201
4,618,640
29,635,056
Doubtful
50%
343,644,095
171,822,048
6,908,779
Bad or Loss
100%
1,515,612,268
1,515,612,268
933,590,983
2,772,491,802
1,937,363,051
893,041
2,299,329
-
-
Small and Medium Enterprise
Provision Required (Short term Agricultural & Micro Credit)
Unclassified
Standard (short term agri /micro credit)
5%
Classified
Substandard (short term agri /micro credit)
Doubtful (short term agri /micro credit)
5%
5%
Bad or Loss (Short term agri /micro credit)
100%
17,860,814
-
-
893,041
2,299,329
Required provision for Investments
2,773,384,842
1,939,662,380
Total provision maintained
2,773,384,842
1,939,662,380
-
-
1,075,405,547
966,887,573
5,033,299
340,660
4,618,640
29,635,056
171,822,048
6,908,779
Provision Surplus/(Shortfall)
Provision Made for funded exposures only: (Other than Short term Agricultural & Micro Credit)
Unclassified
Standard
SMA
Classified
Substandard
Doubtful
Bad or Loss
Provision Made: (Short term Agricultural & Micro Credit)
Standard (short term agri credit)
1,515,612,268
933,590,983
2,772,491,802
1,937,363,051
893,041
2,299,329
Substandard (short term agri credit)
-
-
Doubtful (short term agri credit)
-
-
Bad or Loss (Short term agri credit)
Grand Total
Required provision - Provision made = Surplus/ (Shortfall)
-
-
893,041
2,299,329
2,773,384,842
1,939,662,380
-
-
195
Social Islami Bank Ltd.
2013
Taka
7.7.2
2012
Taka
Particulars of provision for Off-Balance Sheet items
Status
Off-Balance Sheet Items
Rate
1%
Basis for
Provision
30,470,229,787
304,702,298
277,644,499
Required provision for Investments
304,702,298
277,644,499
Provision maintained {note # 12.1(c)}
Surplus Provision
304,702,298
-
277,644,499
-
74,619,694,332
62,675,946,788
7.8
Particulars of Investments:
(i)
Investment considered good in respect of which the banking company is fully secured
(ii)
Investment considered good for which the banking company holds no other security
other than the debtor’s personal security
8,977,966,781
10,073,828,666
(iii)
Investment considered good and secured by personal security of one or more parties
in addition to the personal security of the debtors
2,324,670,813
3,275,198,454
-
-
85,922,331,926
76,024,973,908
1,129,596,405
671,382,251
(iv)
Investment considered bad or doubtful not provided for
Total
(v)
Investment due by directors or officers of the banking company or any of them either
severally or jointly with any other person
(vi)
Investment due by companies or firms in which the directors of the banking company
are interested as directors, partners or managing agents or, in the case of private
companies as members.
2,605,206
3,237,000
(vii)
Maximum total amount of investments, including temporary investments made at any
time during the period to directors or managers or officers of the banking company or
any of them either severally or jointly with any other persons.
8,742,850
10,403,108
Nil
Nil
(viii)
Maximum total amount of Investments including temporary Investment granted during
the period to the companies or firms in which the directors of the banking company are
interested as directors, partners or managing agents or in the case of private companies
as members
(ix)
Investment due from other Banks
Nil
Nil
(x)
Classified Investment on which profit has not been charged
4,593,330,630
2,532,858,494
(xi)
Particulars of written off investments
a) Cumulative amount of written off Investments since inception to 31 December last year
b) Amount of written off / waiver of Investment during the year
2,307,438,210
30,769,817
2,168,870,700
138,567,510
Total amount of written off (a+b)
2,338,208,027
2,307,438,210
c) Amount recovered against debts which are previously written off (cumulative balance)
121,505,000
107,115,000
d) Amount of Investments written off against which cases have been filed for recovery
2,338,208,027
2,307,438,210
461,185,089
304,827,189
12,330,000
1,934,025,740
511,734,383
693,506,564
63,560,310
1,136,879
12,330,000
1,719,061,103
343,209,238
528,531,089
52,918,377
1,043,853
3,216,293,875
2,657,093,659
xii)
Amount of compensation suspense as at year end.
8
Fixed Assets including Premises, Furnitures and Fixtures
A. Cost
Land
Building
Furniture & Fixtures
Office Equipment
Vehicles
Books
196
a n n u a l
re p o r t
2013
Taka
B. Accumulated Depreciation
Land
Building
Furniture & Fixtures
Office Equipment
Vehicles
Books
Carrying value
8.1
2 0 13
2012
Taka
102,566,469
132,282,995
285,713,035
41,184,644
664,351
562,411,494
61,091,670
101,740,643
211,092,910
32,603,319
610,381
407,138,922
2,653,882,382
2,249,954,737
Intangible assets
Core banking solution ‘ABABIL’ is used in SIBL which was implemented in the year 2010. The value of all the softwares under
the head ‘Intangible Assets’ is included in ‘Office Equipment’ and being amortized @ 20% following the same method of
reducing balancing method as applied for mechanical appliance. Written down value of the software as on 31.12.2013 is Taka
28,110,992 and amortization for the year 2013 was Taka 6,301,993.
For details please refer to Annexure-A
8(a)
Consolidated written down value of Fixed Assets including intangible assets
Social Islami Bank Ltd.
Fixed assets of subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
Carrying value of Fixed assets of the Group
9
2,653,882,382
2,249,954,737
8,777,961
2,662,660,343
6,643,203
2,256,597,940
15,766,865
138,411,134
2,878,447
2,566,384,734
122,540,111
33,569
183,008
17,976,725
3,743,882,093
5,516,584
1,522,805
368,594,750
372,918,333
2,147,095,928
3,605,388
1,137,284,247
10,644,594,721
15,992,283
145,434,127
3,948,732
2,522,022,946
376,127,658
33,569
411,571
955,088
2,391,120,492
1,875,347
1,401,205
374,545,000
203,132,011
4,144,364
1,205,337,688
7,246,482,081
2,147,095,928
3,605,388
8,493,893,405
203,132,011
579,447
7,042,770,623
Others Assets
Stock of stationery, stamps and printing materials etc. (valued at cost)
Advance rent and advertisement
Security Deposit
Branch Adjustments (SIBG) (Note: 9.1)
Suspense Accounts (Note: 9.2)
Capitalized Expenditure
Other Repayments
Receivable from M/S. Stock & Bond and SIBL Securities Ltd.
Advance Income Tax
Receivable from SIBL Securities Limited
Receivable from SIBL Investment Limited
Protested Bills against Investment
Profit Receivable from Banks, NBFI and BD Govt.
Investment with Off-shore Banking Unit
Due from Off-shore Banking Unit
Others (Note: 9.3)
Less: Balance with OBU for elimination
Investment with Off-shore Banking Unit
Due from Off-shore Banking Unit
Grand total after elimination of balance with OBU
197
Social Islami Bank Ltd.
2013
Taka
9(a)
Consolidated other Assets
Social Islami Bank Limited
Add: Other assets of subsidiary companies
SIBL Securities Limited
Membership of Chittagong Stock Exchange
Membership of Dhaka Stock Exchange
Advance Income Tax
Advance Office Rent
Advance for floor space at nikunjo, DSE Tower
Advance to Interior Decorator
Investment in stock dealer activities
Receivable from Regulators
Receivable from client
Receivable from others
Security Deposit to CDBL, DSE
Security Deposit to BTCL
Others
SIBL Investment Limited
Less: Inter Company transactions eliminated:
Receivable from SIBL Securities Limited
Receivable from SIBL Investment Limited
9.1
2012
Taka
8,493,893,405
7,042,770,623
1,283,707,625
307,000,000
720,650,000
7,006,293
1,162,993
850,000
13,157,091
30,732,610
186,408,076
7,397,224
5,200,000
4,000
4,139,339
1,126,317,034
307,000,000
720,650,000
3,071,068
498,102
1,300,000
167,600
5,973,754
74,243,154
3,213,356
10,200,000
-
7,039,389
5,516,584
1,522,805
9,770,561,641
3,276,552
1,875,347
1,401,205
8,165,811,105
The balance of Branch adjustment (SIBG) represents unresponded Inter branch and head office transactions at balance sheet
date. Details of which are as follows:
Number of
Unrespondent entries
Upto 3 months
Over 3 months but within 6 months
Over 6 months but within 9 months
Over 9 months
-
Amount (in Tk) of
Unrespondent entries
2013
2012
2013
2012
126
25
-
38
9
-
2,283,772,577
282,612,157
-
2,266,666,249
255,356,697
-
151
47
2,566,384,734
2,522,022,946
9.2
Suspense Account represents advance against TA/DA, Entertainment Expenses, Advertisement Expenses, Branch Decoration
Expenses, Legal Charges and suspense -others. Necessary provision on others assets has been made in the accounts
according to the BRPD Circular no: 14 dated June 25, 2001 para Kha (1) & (2).
9.3
Others
Clearing Adjustment (Note: 9.3.1)
DD paid without Advice
Wes fund purchased
Adjusting A/c debit balance (Note: 9.3.2)
Advance VAT paid
BEFTN adjustment A/c
Balance with Principal Branch (PF)
Balance with Principal Branch (SIBL/ Social Insurance)
Balance with Principal Branch (SIBL/ Gratuity Fund)
198
3,000,000
13,000
1,134
359,721,110
3,815,178
506,934,651
47,638,442
216,160,732
1,137,284,247
48,877,717
938,534
3,289,774
561,798,420
1,907,589
53,255
383,644,225
37,695,442
167,132,732
1,205,337,688
a n n u a l
re p o r t
2013
Taka
2 0 13
2012
Taka
9.3.1
Clearing Adjustment
Return clearing advices on 31.12.2013 from the Clearing House Representing Branch (Principal Branch) were sent to different
branches, lying un-adjusted on the same date.
9.3.2
Adjusting A/c debit balance
359,721,110
561,798,420
Adjusting account debit balance represents Income Receivable from Bangladesh Govt. Islamic Bond on Tk. 550.00 crore,
MTDR’s with Other Banks as on 31.12.2013 and profit from preference shares etc.
10
Placement from Banks & Other Financial Institutions
Bangladesh Govt. Islamic Bond.
4,700,000,000
4,700,000,000
The Bank has an outstanding balance of borrowing Tk. 470.00 crore as on 31.12.2013 taken from Bangladesh Govt. Islamic
Bond Fund having different maturity dates. Profit rate of such borrowings is determined under Mudaraba Principle. Term Deposit
Receipts allowed favouring different Banks and Financial Institutions for Tk 470.00 crore have been pledged as security to
Bangladesh Bank against the borrowings.
Maturity Grouping of Borrowings
Up to 1 month
More than 1 month but less than 3 months
More than 3 months but less than 6 months
6 months and above
11
11.1
Deposits and Other Accounts
Mudaraba Savings Deposits (MSD)
Mudaraba Term Deposits (MTDR)
Other Mudaraba Deposit
Mudaraba Short Notice Deposits (MSND)
Mudaraba Scheme Deposits (Note-11.1)
Al- Wadeeah Current Deposit and other aacounts (AWCD) (Note- 11.2)
Bills payable (Note-11.3)
Cash Waqf Fund
Mudaraba Scheme Deposits
Mudaraba Hajj Savings Deposit
Mudaraba Pension Savings Deposit
Mudaraba Education Deposit
Mudaraba Monthly Savings Deposit
Mudaraba Monthly Profit Deposit
Mudaraba Bashansthan Savings Deposit
Mudaraba Millionaire Savings Deposit
Mudaraba Lakhopoti Deposit Scheme
Mudaraba Double Benefit Deposit
Mudaraba Marriage Savings Deposit
Mudaraba Moharana Savings Deposit
Subarnalata Special Deposit (Women)
Balance carried forward
800,000,000
2,000,000,000
1,900,000,000
4,700,000,000
800,000,000
2,600,000,000
1,300,000,000
4,700,000,000
6,468,729,754
62,746,867,195
19,288,768,828
3,909,715,577
15,379,053,251
12,198,626,163
1,316,909,958
84,577,685
102,104,479,583
4,905,319,144
62,267,653,508
13,984,000,422
3,524,027,294
10,459,973,128
10,903,158,399
1,465,257,228
68,903,770
93,594,292,471
23,663,269
3,161,444,037
44,066,037
147,237,136
1,444,736,357
436,116,509
365,599,621
329,073,668
1,917,537,282
138,383,698
17,153,078
48,020,989
8,073,031,682
15,363,209
3,015,352,007
90,148,754
174,239,208
1,275,650,566
382,359,331
259,793,833
365,981,761
2,186,825,125
149,623,827
11,940,815
24,909,572
7,952,188,009
199
Social Islami Bank Ltd.
2013
Taka
Balance brought forward
Subarnalata Rekha Special Deposit (Women)
Sabuj Chayanna Special Deposit
Sabuj Chaya Pension Deposit
Sanchita Special Deposit
Shonali Din Pension Deposit
Shukher Thikana Savings Deposit
Sachchandey Protidin Monthly Profit Deposit
Shamriddhir Shopan Deposit
Shopner Shiri Deposit
Sharner Shikhar
Proshanti (Mudaraba Zakat savings scheme)
11.2
Al-Wadeeah Current Deposit & other A/c
Al Wadeeah current deposit
Sundry deposit
Social fund deposit
Supervision charge
Risk fund deposit
FC deposit
Convertible Taka A/c*
F. C. held against B.B. L/C
Profit payable A/c
Compensation Realized
2012
Taka
8,073,031,682
498,360,868
321,613,172
190,604,769
92,754,352
1,239,935,022
2,653,759
1,248,024,244
3,532,415,441
89,770,060
89,364,691
525,192
15,379,053,251
7,952,188,009
253,316,984
187,537,598
74,920,687
25,772,406
294,937,281
927,442
172,936,700
1,443,001,879
31,619,273
22,814,869
10,459,973,128
4,314,149,081
2,962,594,046
23,575
1,337,282
1,213,027
1,257,602,337
10,280,348
1,816,128,979
1,791,429,921
43,867,567
12,198,626,163
4,184,770,966
2,867,259,107
17,075
1,316,661
1,342,995
526,405,519
9,258,398
1,686,037,343
1,619,177,384
7,572,951
10,903,158,399
12,198,626,163
262,304,982
12,350,525
249,954,457
11,936,321,181
10,903,158,399
317,453,862
67,498,715
249,955,147
10,585,704,537
*Balance of Convertible Taka A/c represents the portion of unsettled balance.
11.2(a) Consolidated balance of Al-Wadeeah Current Deposit & Other A/c
Social Islami Bank Limited
Less: Intercompany balance eliminated
SIBL Securities Limited
SIBL Investment Limited
Consolidated balance of Current deposit and other accounts
The balances are held with the ‘Principal Branch’ of SIBL bearing current account no: 0002-13300056882 and 000213300057058 respectively. For consolidation purpose the balances have been eliminated.
11.3
11.4
200
Bills Payable
Payment Order (PO)
Demand Draft (DD)
B/P awaiting remittance
Maturity wise classifcation of Deposits
Payable on demand
Up to 1 month
More than 1 month but up to 6 months
More than 6 months but up to 1 year
More than 1 year but up to 5 years
More than 5 years but up to 10 years
636,531,686
8,967,745
671,410,527
1,316,909,958
745,531,289
13,293,855
706,432,085
1,465,257,228
3,097,234,628
12,869,269,317
33,879,228,129
35,246,555,474
12,752,119,641
4,260,072,393
102,104,479,583
971,957,170
17,378,607,310
27,947,482,142
34,158,033,729
7,325,086,300
5,813,125,819
93,594,292,471
a n n u a l
re p o r t
2013
Taka
11.5
Segregation of deposits & other accounts
i) Client Deposit
Al-Wadeeah Current deposit & other accounts
Bills Payable
Mudaraba Savings Deposits
Mudaraba Short Notice Deposits
Mudaraba Term Deposit
Mudaraba Scheme Deposits
Cash Waqf Fund
ii) Bank Deposit
Mudaraba Term Deposit Receipt (MTDR)
Mudaraba Short Notice Deposit (MSND)
Mudaraba Savings Deposit (MSD)
Grand Total of deposits and other accounts
12
12(a)
Other Liabilities
Adjusting A/C (Cr.) Balance
Other Payable
SIBL Employees’ PF
SIBL Employees’ Gratuity fund (note: 12.1)
SIBL Employees’ Social Insurance
BEFTN Adjustment Account
ATM Settlement for Q-Cash
Provision for Investments ( note: 12.2)
Provision for other Assets (note: 12.3)
Compensation and Rent Suspense (note: 12.4)
Provision for Taxation (note: 12.5)
Provision for Zakat Fund (note: 12.6)
Provision for Mudaraba Profit Distribution (note: 12.7)
Consolidated Other Liabilities
Social Islami Bank Limited
Add: Other Liabilities of subsidiaries
SIBL Securities Limited
Accrued Expenses
Payable to SIBL-Term loan
Profit payable to SIBL
Payable to regulators
Payable to clients
Payable to service providers and suppliers
Security deposit payable
Provision for Tax
SIBL Investment Limited
Accrued Expenses
Provision for Tax
Less: Intercompany balance eliminated
SIBL Securities Limited
Payable to SIBL-Term loan
Grand total
2 0 13
2012
Taka
12,198,626,163
1,316,909,958
5,468,327,093
3,903,958,691
57,633,367,195
15,379,053,251
84,577,685
95,984,820,034
10,903,158,399
1,465,257,228
4,315,923,069
3,520,518,010
50,357,653,508
10,459,973,128
68,903,770
81,091,387,112
5,113,500,000
5,756,886
1,000,402,662
6,119,659,548
11,910,000,000
3,509,284
589,396,075
12,502,905,359
102,104,479,583
93,594,292,471
7,966,080
2,261,025
506,934,651
294,261,830
47,638,442
25,731,488
9,697,144
2,773,384,842
393,102,542
461,185,089
4,146,098,405
48,818,029
10,000,000
8,727,079,569
11,623,498
1,291,813
383,644,225
221,373,660
37,695,442
3,184,624
3,820,731
1,939,662,380
388,370,542
304,827,189
3,343,147,121
44,381,311
6,595,602
6,689,618,137
8,727,079,569
6,689,618,137
88,292,572
1,657,648
50,000,000
1,222,221
458,997
31,275,155
888,481
263,100
2,526,970
9,591,813
1,096,560
1,294,903
6,212,959
547,500
263,100
176,791
22,250
17,250
5,000
8,815,394,391
57,500
52,500
5,000
6,699,267,451
50,000,000
-
8,765,394,391
6,699,267,451
201
Social Islami Bank Ltd.
2013
Taka
12.1
12.2
2012
Taka
SIBL Employees’ Gratuity fund
Add: Provision for Gratuity
Opening balance
Current year required expenditure for gratuity fund
Add: Profit charged and other transfers made during the year
216,160,732
167,132,732
54,240,928
75,916,493
2,907,478
133,064,899
46,101,793
53,811,215
3,826,120
103,739,128
Less: Paid during the year
Less: Transferred to gratuity fund during the year
Balance of provision for gratuity at year end
(5,935,800)
(49,028,000)
78,101,099
(9,498,200)
(40,000,000)
54,240,928
Grand total of gratuity fund balance
294,261,830
221,373,660
970,134,819
(30,769,817)
752,687,954
1,692,052,956
691,947,212
(138,567,510)
71,081,185
57,706,167
2,611,720
285,356,045
970,134,819
691,883,062
84,746,527
776,629,589
2,468,682,545
518,400,000
173,483,062
691,883,062
1,662,017,881
277,644,499
27,057,799
304,702,298
2,773,384,842
173,162,000
104,482,499
277,644,499
1,939,662,380
388,370,542
(6,364,250)
11,096,250
393,102,542
166,130,000
(414,000)
222,654,542
388,370,542
374,959,000
(6,186,250)
(178,000)
368,594,750
162,630,000
212,329,000
374,959,000
13,411,542
6,186,250
4,910,000
24,507,792
3,500,000
(414,000)
10,325,542
13,411,542
Provision for Investment
(a) Specific Provision on Investment
Provision held at the beginning of the year
Fully provided Investment written off
Transferred from doubtful income/compensation realized
Transferred from provision for shares and securities
Transferred from provision for staff benefits
Provision made during this year
Provision held at the end of the year
(b) General Provision on Investment
Provision held at the beginning of the year
Addition during the year
Balance at the end of the year
Total Provision on Investments
(c) General Provision on Off-Balance Sheet items
Provision held at the beginning of the year
Addition during the year
Balance at the end of the year
Total Provision for Investments & Off-Balance Sheet items (a+b+c)
12.3
Provision for other Assets
Provision held at the beginning of the year
Provision written back during the year
Addition during the year
Balance at the end of the year
12.3.1 Provision for protested bills
Provision held at the beginning of the year
Provision written back during the year
Waiver/written off during the year
Addition during the year
12.3.2 Provision for suspense account
Provision held at the beginning of the year
Provision written back during the year
Provision Transferred from provision for protested bills
Addition during the year
202
a n n u a l
re p o r t
2013
Taka
12.4
2 0 13
2012
Taka
Compensation & Rent Suspense A/C
Compensation Receivable A/C
Murabaha (General)
Murabaha (Post Import)
Musharaka (Preshipment)
Bai-Muazzal
Bai-Muazzal Trust Receipt
Baim Wes bills
Bai-Muazzal (ME)
26,747,246
4,923,207
1,533,094
59,266,797
26,024,166
2,103,689
6,129,156
126,727,354
11,100,091
3,713,758
1,197,671
26,460,794
6,424,759
1,449,594
50,346,667
29,852,308
38,388,808
113,546,354
14,611
18,679,435
11,730,536
27,650,172
239,862,224
94,595,511
461,185,089
25,632,021
29,432,124
71,214,856
61,081
13,842,860
11,647,069
25,985,873
177,815,885
76,664,637
304,827,189
304,827,189
178,655,415
(19,016,649)
(3,280,866)
461,185,089
283,964,994
147,013,749
(81,460,516)
(44,691,039)
304,827,189
3,343,147,121
802,951,284
4,146,098,405
2,041,555,734
1,301,591,387
3,343,147,121
2,391,120,492
1,352,761,601
3,743,882,093
402,216,312
1,464,297,052
926,823,440
2,391,120,492
952,026,629
12.5.1 Provision made during the year
Operating Profit before provision & tax
Add: amount to be deducted for separate consideration
2,924,550,001
199,289,944
3,617,825,225
175,331,524
Less: amount to be deducted for separate consideration
1,384,486,987
840,010,580
Total Taxable Income
Total Tax liability for current year
Business Tax @ 42.5%
Dividend Tax @ 20%
Tax on gain on shares & securities @ 10%
Provision required
1,739,352,958
2,953,146,168
739,225,007
62,359,276
1,367,001
802,951,284
1,255,087,122
46,245,187
259,079
1,301,591,387
802,951,284
1,301,591,387
Compensation Suspense A/C
Murabaha (General)
Murabaha (Post Import)
Bai-Muazzal
Bai-Muazzal- House hold
Bai-Muazzal Trust Receipt
Musharaka (Preshipment)
Others
Rent Suspense A/C
Total Compensation & Rent Suspense
12.4.1 Movement of Compensation and Rent Suspense A/C
Balance at the beginning of the year
Add: Amount transferred to suspense account during the year
Less: Amount recovered from suspense account during the year
Less: Amount written off/ waived during the year
Balance at the end of the year
12.5
Provision for Taxation
Provision for Current tax
Balance at the beginning of the year
Add: Provision made during the year (Note:12.6.1)
Advance tax
Balance at the beginning of the year
Paid during the year
Balance at the end of the year
Provision made
203
Social Islami Bank Ltd.
2013
Taka
12.6
12.7
Provision for Zakat
Opening Balance
Addition this year
Less: Paid during the year
Closing Balance at the end of the year
33,888,497
30,146,894
(19,654,080)
44,381,311
6,595,602
10,000,000
(6,595,602)
10,000,000
6,595,602
6,595,602
70,528
1,506,720
1,577,248
(5,101,777)
5,172,304
70,528
10,000,000,000
10,000,000,000
7,031,415,640
6,393,925,700
260,000,000
4,773,229,450
1,998,186,190
7,031,415,640
260,000,000
4,773,229,450
1,360,696,250
6,393,925,700
1,950,933,080
5,080,482,560
7,031,415,640
2,032,017,980
4,361,907,720
6,393,925,700
Deferred Tax Liability
Balance at the beginning of the year
Add: Provision made during the year
Closing balance at the end of the year
14
Capital
14.1
Authorized Capital
1,000,000,000 ordinary shares of Tk. 10 each
14.2
44,381,311
50,488,279
(46,051,561)
48,818,029
Provision for Mudaraba Profit Distribution
Opening Balance
Addition the year
Less: Paid during the year
Closing Balance at the end of the year
13
2012
Taka
Issued, Subscribed and Paid up Capital
The Paid-up Capital of the Bank is currently Tk. 7,031,415,640 divided into
703,141,564 Ordinary Shares of Tk 10 each
Break up of paid up capital is as follows
26,000,000 no. Ordinary shares of Tk.10 issued for cash
477,322,945 no. Ordinary shares of Tk. 10 each for cash as right share
199,818,619 no.ordinary shares of Tk 10 each issued as bonus shares
Sponsor Shareholders Group
General Shareholders Group
Year 2013
14.3
Classification of Shareholders by holding
Year 2013
Less than 500 shares
501 to 5,000 shares
5,001 to 10,000 shares
10,001 to 20,000 shares
20,001 to 50,000 shares
50,001 to 99,999 shares
Total
204
No. of
Shareholders
No. of shares
Percentage of
holding of shares
31,864
42,535
4,211
2,263
1,090
651
82,614
5,012,253
71,157,801
29,382,116
30,419,428
32,276,868
534,893,098
703,141,564
0.71%
10.12%
4.18%
4.33%
4.59%
76.07%
100.00%
a n n u a l
re p o r t
2 0 13
Year 2012
Year 2012
Shareholding range
Less than 500 shares
501 to 5,000 shares
5,001 to 10,000 shares
10,001 to 20,000 shares
20,001 to 50,000 shares
50,001 to 99,999 shares
Total
14.4
No. of shares
33,009
38,886
3,496
1,724
854
544
78,513
6,530,028
65,621,940
24,935,347
23,145,340
24,988,897
494,171,018
639,392,570
Particulars of shareholding and Percentage Analysis
Particulars of shareholding:
Year 2013
Number of
Number of
Share holders
Shares
Sponsors & Placement
27
170,026,278
Sponsors Foreign
7
3,939,914
Sponsors & Placement Company
3
21,127,116
General Public
80,824
405,849,477
Institutions (Bank & Insurance)
66
20,306,314
Institution (Others)
1,593
72,979,399
ICB Account Holders
68
471,973
ICB
1
4,421,687
ICB Unit Fund
2
3,495,025
ICB Mutual Fund
9
262,655
Non-Resident Bangladeshi
14
261,726
82,614
703,141,564
Percentage of
holding of shares
1.02%
10.26%
3.90%
3.62%
3.91%
77.29%
100.00%
2013
Taka
2012
Taka
1,700,262,780
39,399,140
211,271,160
4,058,494,770
203,063,140
729,793,990
4,719,730
44,216,870
34,950,250
2,626,550
2,617,260
7,031,415,640
1,465,109,560
40,206,330
526,702,090
3,334,703,390
218,745,670
736,485,010
33,830,410
2,562,160
30,790,460
2,387,810
2,402,810
6,393,925,700
2013
Percentage
24.18%
0.56%
3.00%
57.71%
2.89%
10.38%
0.07%
0.63%
0.50%
0.04%
0.04%
100.00%
2012
Percentage
22.91%
0.63%
8.24%
52.15%
3.42%
11.52%
0.53%
0.04%
0.48%
0.04%
0.04%
100.00%
i) Paid-up Capital
7,031,415,640
6,393,925,700
ii) Statutory Reserve (Note: 15)
2,122,994,344
1,718,062,455
Percentage of shareholding Analysis:
Sponsors & Placement
Sponsors Foreign
Sponsors & Placement Company
General Public
Institutions (Bank & Insurance)
Institution (Others)
ICB Account Holders
ICB
ICB Unit Fund
ICB Mutual Fund
Non-Resident Bangladeshi
14.5
No. of
Shareholders
Capital Adequacy (Solo Basis)
Position of capital adequacy are given below:a) Core Capital ( Tier -I)
iii) Retained Earnings (Note: 17)
846,533,259
960,004,602
10,000,943,243
9,071,992,756
205
Social Islami Bank Ltd.
2013
Taka
2012
Taka
b) Supplementary Capital (Tier-II)
i) General Provision {Note 12.1(b+c)}
ii) Assets Revaluation Reserve (eligible)
(As per Bangladesh Bank Guideline 50% is considered as Supplementary Capital)
1,081,331,886
541,242,551
969,527,561
554,989,561
1,622,574,437
1,524,517,122
c) Total eligible capital (a +b)
11,623,517,680
10,596,509,878
d) Total Risk Weighted Assets
99,834,160,000
91,983,417,500
e) Required Capital (10% of Risk Weighted Assets)
9,983,416,000
9,198,341,750
f) Total Capital Surplus (c-e)
1,640,101,680
1,398,168,128
7,031,415,640
2,122,994,344
6,666,534
848,684,455
10,009,760,972
6,393,925,700
1,718,062,455
742,431
930,222,916
9,042,953,501
1,081,331,886
541,242,551
969,527,561
554,989,560
1,622,574,437
1,524,517,122
c) Total eligible capital (a +b)
11,632,335,409
10,567,470,623
d) Total Risk Weighted Assets
99,547,905,000
91,517,867,500
e) Required Capital (10% of Risk Weighted Assets)
9,954,790,500
9,151,786,750
f) Total Capital Surplus (c-e)
1,677,544,909
1,415,683,873
Capital Adequacy (Consolidated basis)
Position of capital adequacy are given below:a) Core Capital ( Tier -I)
i) Paid-up Capital
ii) Statutory Reserve (Note: 15)
iii) General Reserve
iv) Retained Earnings {Note: 17 (a)}
b) Supplementary Capital (Tier-II)
i) General Provision {Note 12.1(b+c)}
ii) Assets Revaluation Reserve (eligible)
(As per Bangladesh Bank Guideline 50% is considered as Supplementary Capital)
Capital Adequacy Ratio (Solo basis)
Particulars
Core Capital: (Tier-I )
Supplementary Capital: (Tier-II)
Total
2013
2012
Requirement Capital Maintained Requirement Capital Maintained
5.00%
10.01%
5.00%
9.86%
-
1.63%
-
1.66%
10.00%
11.64%
10.00%
11.52%
Capital Adequacy Ratio (Consolidated basis)
Particulars
Core Capital: (Tier-I )
Supplementary Capital: (Tier-II)
Total
206
2013
2012
Requirement Capital Maintained Requirement Capital Maintained
5.00%
10.06%
5.00%
9.88%
-
1.63%
-
1.67%
10.00%
11.69%
10.00%
11.55%
a n n u a l
14.6
re p o r t
2 0 13
Breakdown of gross Risk-Weighted Assets (RWA) in the various categories of risk-weights
Solo Basis
a) Risk Weights for Credit Risk
31.12.2013
31.12.2012
Risk Weights
(Both B/S & Off-B/S)
Principal
Risk Weighted
amount
Assets
0%
20%
50%
75%
100%
125%
150%
14,394,900,000
19,706,300,000
22,148,000,000
18,180,100,000
36,080,500,000
19,969,700,000
945,800,000
3,941,260,000
11,074,000,000
13,635,075,000
36,080,500,000
24,962,125,000
1,418,700,000
14,025,100,000
16,510,400,000
19,233,600,000
23,522,900,000
25,079,500,000
23,396,450,000
444,100,000
3,302,080,000
9,616,800,000
17,642,175,000
25,079,500,000
29,245,562,500
666,150,000
Total
131,425,300,000
91,111,660,000
122,212,050,000
85,552,267,500
641,550,000
230,700,000
6,415,500,000
2,307,000,000
99,834,160,000
460,335,000
182,780,000
4,603,350,000
1,827,800,000
91,983,417,500
-
b) Risk Weights for Operational Risk
c) Risk Weights for Market Risk
Total Risk Weighted Assets
Consolidate basis
Principal amount
Risk Weighted
Assets
a) Risk Weights for Credit Risk
31.12.2013
Risk Weights
(Both B/S & Off-B/S)
0%
20%
50%
75%
100%
125%
150%
Total
31.12.2012
Principal
Risk Weighted
amount
Assets
Principal amount
Risk Weighted
Assets
14,395,000,000
19,735,400,000
22,148,000,000
18,180,100,000
36,103,300,000
19,703,800,000
945,800,000
131,211,400,000
3,947,080,000
11,074,000,000
13,635,075,000
36,103,300,000
24,629,750,000
1,418,700,000
90,807,905,000
14,025,300,000
16,510,400,000
19,233,600,000
23,522,900,000
25,086,700,000
23,018,250,000
444,100,000
121,841,250,000
3,302,080,000
9,616,800,000
17,642,175,000
25,086,700,000
28,772,812,500
666,150,000
85,086,717,500
b) Risk Weights for Operational Risk
643,300,000
6,433,000,000
460,335,000
4,603,350,000
c) Risk Weights for Market Risk
230,700,000
2,307,000,000
182,780,000
1,827,800,000
Total Risk Weighted Assets
99,547,905,000
91,517,867,500
31.12.2013
A)
Credit Risk
1. Balance Sheet Exposure
(amounts in crore Taka)
Solo
Sl.
Exposure Type
BB’s
Rating Grade
1
2
3
a) Cash and Cash
Equivalents
b) Claims on Bangladesh
Government (other than
PSEs) and Bangladesh
Bank (denominated in
domestic and foreign
currency)
Risk Weight Exposure
4
5
Consolidated
Risk Weighted
Asset
6 = (4×5)
Exposure Risk Weighted Asset
7
8 = (4×7)
0%
126.71
-
126.72
-
0%
1,312.78
-
1,312.78
-
207
Social Islami Bank Ltd.
31.12.2013
(amounts in crore Taka)
Solo
c) Claims on other
Sovereigns & Central
Banks
d) Claims on Bank for
International
Settlements,
International Monetary
Fund and European
Central Bank
e) Claims on Multilateral
Development Banks
(MDBs):
i) IBRD , IFC, ADB,
AfDB, EBRD, IADB,
EIB, EIF, NIB, CDB,
IDB, CEDB
ii) Other MDBs
f)
Claims on Public
Sector Entities
(excluding equity
exposure) in
Bangladesh
g) Claims on Banks and
NBFIs:
i) Original maturity
over 3 months
i)
Claims under credit
risk mitigation
a) Corporate
b) Retail & Small
j)
Claims categorized
as retail portfolio &
Small Enterprise
(excluding
consumer loan )
k) Consumer Loan
208
0%
-
-
-
-
0%
-
-
-
-
0%
-
-
1
2,3
4,5
6
Unrated
1
2,3
4,5
6
Unrated
20%
50%
100%
150%
50%
20%
50%
100%
150%
50%
-
-
-
-
1
2,3
4,5
6
Unrated
20%
50%
100%
150%
100%
627.63
60.31
-
125.53
30.16
-
627.63
60.31
-
125.53
30.16
-
20%
1,028.85
205.77
1,031.76
206.35
20%
50%
100%
150%
125%
142.22
1,173.40
2,040.70
440.23
28.44
586.70
2,040.70
550.29
142.22
1,173.40
2,040.70
440.23
28.44
586.70
2,040.70
550.29
Corporate
125%
550.29
687.86
550.29
687.86
Retail and Small
125%
6.15
7.69
6.15
7.69
75%
1,293.28
969.96
1,293.28
969.96
100%
68.33
68.33
68.33
68.33
ii) Original maturity
less than 3 months
h) Claims on Corporate
(excluding equity
exposure)
Consolidated
1
2
3,4
5,6
Unrated
PSE
a n n u a l
re p o r t
2 0 13
31.12.2013
(amounts in crore Taka)
Solo
l)
Claims fully secured
by residential property
Consolidated
50%
345.38
172.69
345.38
172.69
100%
576.12
576.12
576.12
576.12
150%
94.58
141.87
94.58
141.87
100%
58.08
58.08
58.08
58.08
50%
11.48
5.74
11.48
5.74
2. Claims fully secured
against residential
property that are past
due for more than 90
days and/or impaired
specific provision held
there-against is less
than 20% of
outstanding amount
100%
73.54
73.54
73.54
73.54
3. Loans and claims
fully secured against
residential property that
are past due by 90 days
and /or impaired and
specific provision held
there-against is more
than 20% of
outstanding amount
75%
52.45
39.34
52.45
39.34
125%
-
-
121.41
151.76
125%
213.16
266.45
65.16
81.45
150%
-
-
-
-
m) Claims fully secured
by commercial real
estate
n) 1. Past Due Claims
- Where specific
provisions are less
than 20 per cent of
the outstanding
amount of the past
due claim ;
- Where specific
provisions are no less
than 20 per cent of the
outstanding amount of
the past due claim.
- Where specific
provisions are more
than 50 per cent
of the outstanding
amount of the past
due claim.
o) Capital Market
Exposure
p) Unlisted equity
investments and
regulatory capital
instruments issued
by other banks (other
than those deducted
from capital) held in
banking book
q) Investments in venture
capital
209
Social Islami Bank Ltd.
31.12.2013
(amounts in crore Taka)
Solo
r)
s)
t)
Consolidated
Investments in
premises, plant and
equipment and all
other fixed assets
100%
265.39
265.39
266.35
266.35
Claims on all fixed
assets under operating
lease
100%
-
-
-
-
All other assets
i) Claims on GOB &
BB (eg. Advanced
income tax,
reimbursement of
pratirakka/shdharon
sanchay patra, etc.)
0%
374.39
-
375.09
-
ii) Staff loan/Investment
20%
112.82
22.56
112.82
22.56
20%
-
-
-
-
100%
214.71
214.71
214.71
214.71
100%
0.40
0.40
1.72
1.72
iii) Cash items in
process for collection
iv) Claims on Off-shore
Banking Units (OBU)
v) Other assets (net
off specific provisions)
2. Off-Balance Sheet Exposure
Sl.
Exposure Type
1
2
BB’s Rating
Risk Weight
Exposure
Risk Weighted
4
5
6 = (4×5)
Grade
a)
Claims on Bangladesh
Government and
Bangladesh Bank
Risk Weighted
7
8 = (4×7)
Asset
0%
b) Claims on other Sovereigns
& Central Banks
0%
c) Claims on Bank for
International Settlements,
International Monetary
Fund and European
Central Bank
0%
d) Claims on Multilateral
Development Banks
(MDBs):
i) IBRD , IFC, ADB, AfDB,
EBRD, IADB, EIB, EIF,
NIB, CDB, IDB, CEDB
ii) Other MDBs
210
3
Exposure
0%
1
2,3
4,5
6
20%
50%
100%
150%
Unrated
50%
Asset
a n n u a l
re p o r t
2 0 13
31.12.2013
(amounts in crore Taka)
Solo
e) Claims on Public
Sector Entities (other
than Government) in
Bangladesh
f)
i)
Claims on Banks and FIs:
Maturity over 3
months
1
2,3
4,5
6
Unrated
20%
50%
100%
150%
50%
1
2,3
4,5
6
Unrated
20%
50%
100%
150%
100%
-
-
-
-
20%
-
-
-
-
20%
50%
100%
150%
125%
59.11
624.23
310.78
787.14
11.82
312.12
310.78
983.93
59.11
624.23
310.78
787.14
11.82
312.12
310.78
983.93
75%
472.28
354.21
472.28
354.21
100%
-
-
-
-
50%
-
-
-
-
100%
-
-
-
-
150%
100%
-
-
-
-
2,253.54
1,972.85
2,253.54
1,972.85
ii) Maturity less than
3 months
g) Claims on Corporate
(excluding equity
exposure)
Consolidated
1
2
3,4
5,6
Unrated
h) Against retail portfolio
& Small Enterprise
(excluding consumer loan)
i) Consumer Loan
j) Claims fully secured by
residential property
k) Claims fully secured
by commercial real estate
l) Investment in venture capital
m) All other assets
2013
B) Capital charge for Market Risk
Sl
Details
no.
A.
Interest Rate Related instruments
B.
Equities
C.
Foreign Exchange Position
Total (A+B+C):
(amounts in crore Taka)
Capital Charge
Total Capital
for General
Charge for Specific
Market Risk
Market Risk
Solo
Consolidated
Total Capital Charge
Total Capital Charge
for General &
for General &
Specific Market Risk Specific Market Risk
-
-
-
-
9.07
9.07
18.13
18.13
-
4.94
4.94
4.94
9.07
14.01
23.07
23.07
211
Social Islami Bank Ltd.
2013
C)
(amounts in crore Taka)
Capital Charge for Operational Risk
(Basic Indicator Approach)
Solo
Average Gross
Income
Year
Consolidated
Capital Charge
(15% of Average
Gross Income)
Average Gross
Income
Capital Charge (15%
of Average Gross
Income)
64.16
428.85
64.33
2012
2011
2010
427.70
15
Statutory Reserve
Opening balance
Add: Addition during the year
16
Revaluation Reserve on fixed assets
Revalued amount of fixed assets
Book Value of fixed assets
Balance of revaluation reserve
Less: Adjustment made based on difference amount of depreciation
Remaining balance of revaluation reserve
2013
Taka
2012
Taka
1,718,062,455
404,931,889
2,122,994,344
1,168,484,261
549,578,194
1,718,062,455
1,670,299,434
560,320,313
1,109,979,121
27,494,019
1,082,485,102
1,712,811,470
574,633,356
1,138,178,114
28,198,993
1,109,979,121
Property class under the head ‘Land and Building’ have been revalued in the year 2011, in accordance with the applicable rules
and regulations as per BAS-16, ‘Property, Plant and Equipment’ and as per Bangladesh Bank BCD circular letter no: 12 & 18,
dated: 20 April 1993 & 15 June 1993 and BRPD circular no: 10, dated: 25 November 2002. The valuation firms have used the
fair value model to revalue the class of property. The valuation was not reviewed in the year 2013.
a. The effective date of revaluation:
The revaluation was completed by the valuers on 20.03.2011. And the revaluation effect on the assets have been accounted
for on 30.03.2011.
b. Valuer:
Two separate independent valuer firm ‘Commodity Inspection Services (BD) Ltd.’ and ‘Royal Inspection International
Ltd.’ have been assigned to carry on the valuation job.
c. Method used for determination of fair value:
The valuer firms have used the market-based evidence to appraise the class of property ‘Land and Building’. They have used
current market prices as reference that has recently been observed for selling the land and buildings of same class of the same
locality for appraising the fair value. Using the appraisal they have determined the amount of revaluation of the assets.
(amounts in Taka)
Location
Class of
property
Book Value
Revaluation
Surplus
City Center, Head Office
Building
382,381,165
913,198,835
9,559,529
32,389,500
22,829,971
2,111,623
10,218,377
-
-
-
Chandaikona Branch
Savar Branch
212
Land
Depreciation on Depreciation on
book value
revalued amount
Amount of adjustment
Building
1,126,304
1,257,988
28,158
59,607
31,449
Building
30,700,940
27,825,083
767,524
1,463,151
695,627
Panthapath Branch
Building
25,544,016
51,583,410
638,600
1,928,186
1,289,586
Rampura Branch
Building
38,021,525
36,178,391
950,538
1,854,998
904,460
Khulna Branch
Building
17,913,374
14,114,344
447,834
800,693
352,859
Nawabpur Road Branch
Building
62,521,366
55,602,693
560,320,313 1,109,979,121
1,563,034
13,955,217
2,953,101
41,449,236
1,390,067
27,494,019
a n n u a l
17
17(a)
re p o r t
Retained Earnings
Opening balance
Less: Issue of cash dividend
Less: Issue of bonus shares
Add: Transferred from Profit & Loss Account
Add: Transferred from Revaluation Reserve for Fixed Assets
Add: Transferred from Revaluation Reserve for building (city center)
Consolidated retained earnings
Opening Balance
Less: Issue of cash dividend
Less: Issue of bonus shares
Add: Transfer from Profit & Loss Account of SIBL
Add: Transferred from Revaluation Reserve for Fixed Assets of SIBL
Add: Transferred from Revaluation Reserve for building (city center)
2 0 13
2013
Taka
2012
Taka
960,004,602
(318,744,971)
(637,489,940)
815,269,549
27,494,019
846,533,259
711,300,013
(671,362,199)
891,549,083
28,198,993
318,712
960,004,602
930,222,915
(318,744,971)
(637,489,940)
815,269,549
27,494,019
816,751,572
657,427,567
(671,362,199)
891,549,083
28,198,993
318,712
906,132,156
32,031,499
(98,590)
24,163,331
(72,551)
848,684,481
930,222,936
27
-
20
-
848,684,454
930,222,915
Add: Current year profit/(loss) of subsidiaries
SIBL Securities Limited
SIBL Investment Limited
Less: Non controlling interests of profit/(loss) attributable for current year
SIBL Securities Limited
SIBL Investment Limited
SIBL has invested amount of Taka- 1,229,999,000 and Taka- 249,999,400 in two of its subsidiaries ‘SIBL Securities Ltd.
(SIBL SL)’ and ‘SIBL Investment Ltd. (SIBL IL)’ respectively. SIBL holds 99.9999187% and 99.99976% of total shares of its
subsidiaries ‘SIBL SL.’ and ‘SIBL IL.’ respectively while the other shareholders of the subsidiaries hold 0.00008130081% and
0.00024% of total shares respectively.
Details of the shareholding position is as under:
Sl
no.
Shareholders
No. Shares
SIBL SL
Value of shares
SIBL IL
SIBL SL
Percentage of holding of shares
SIBL IL
SIBL SL
SIBL IL
249,999,400
99.999919%
99.99976%
0.00004%
1
Social Islami Bank
Limited
2
Alhaj Nasiruddin
1
1
100
100
0.000008%
3
Mr. Md. Sayedur
Rahman
1
-
100
-
0.000008%
4
Major (Retd.) Dr.
Md. Rezaul Haque
1
1
100
100
0.000008%
0.00004%
5
Alhaj Sultan Mahmood
Chowdhury
1
1
100
100
0.000008%
0.00004%
6
Mr. Abdul Awal Patwary
1
1
100
100
0.000008%
0.00004%
7
Hamdard Laboratories
(Waqf) Bangladesh,
Represented by:
Mr. Anisul Hoque
1
-
100
-
0.000008%
-
12,299,990
2,499,994 1,229,999,000
-
8
Mrs. Nargis Mannan
1
-
100
-
0.000008%
9
Mr. Kamaluddin Ahmed
1
1
100
100
0.000008%
0.00004%
10 Alhaj Sk. Mohammad
Rabban Ali
1
1
100
100
0.000008%
0.00004%
11 Mr. A. Jabbar Mollah
1
-
100
-
0.000008%
-
2,500,000 1,230,000,000
250,000,000
100.00%
100.00%
12,300,000
213
Social Islami Bank Ltd.
17.1
2013
Taka
2012
Taka
1,220,201,438
404,931,889
1,441,127,276
549,578,194
815,269,549
891,549,083
1,252,134,346
404,931,889
1,465,218,057
549,578,194
847,202,458
915,639,864
27
847,202,431
20
915,639,844
SIBL Securities Limited
Paid up capital
Retained earnings
General Reserve
1,230,000,000
3,740,171
6,666,534
1,230,000,000
(28,291,328)
742,432
Net Assets
1,240,406,705
1,202,451,104
Current year retained earnings
Social Islami Bank Limited
Profit after tax
Less : Statutory Reserve
17.1.(a) Consolidated Current year retained earnings
Profit after tax
Less :Statutory Reserve
Profit/(Loss) attributable to Group
Profit/(Loss) attributable to Subsidiaries
SIBL Securities Limited
SIBL Investment Limited
Profit/(Loss) attributable to parent
17(b) Non-controlling interest
SIBL Investment Limited
Paid up capital
Retained earnings
250,000,000
(1,588,978)
250,000,000
(1,490,388)
Net Assets
248,411,022
248,509,612
SIBL Securities Limited, @ 0.00008% of net assets
1,001
973
SIBL Investment Limited, @0.00024% of net assets
596
597
1,597
1,570
8,661,925,200
1,512,247,997
3,887,847,700
442,696,000
482,165,500
5,189,558,700
1,834,947,997
4,011,699,800
352,278,000
1,246,269,500
14,986,882,397
12,634,753,997
3,100,423,000
1,051,634,857
1,258,526,700
3,526,015,455
361,362,000
556,277,874
1,847,561,500
1,173,500,400
1,301,287,200
2,575,739,886
315,118,000
182,387,907
9,854,239,886
7,395,594,893
3,246,076,013
4,949,826,296
Non-controlling interests
Total non-controlling interest
18
18.1
Contingent liabilities
Acceptances and Endorsements
Bill bankers’ liabilities (DP)
Bill bankers’ liabilities (BB/FO)
Bill bankers’ liabilities (BB/LO)
Bill bankers’ liabilities (EPZ)
Bill bankers’ liabilities Others
18.2
18.3
214
Letter of Credit
L/C bankers’ liabilities (DP)
L/C bankers’ liabilities (BB/FO)
L/C bankers’ liabilities (BB/LO)
L/C bankers’ liabilities (Cash)
L/C bankers’ liabilities (EPZ)
L/C bankers’ liabilities (Others)
Letters of guarantees
Letters of guarantee
a n n u a l
18.4
Bills for collection
In-ward bills for collection
Out-ward Bills for Collection
re p o r t
2 0 13
2013
Taka
2012
Taka
662,472,572
1,720,558,919
617,457,746
2,166,816,986
2,383,031,491
2,784,274,732
18.5
Other Contingent Liabilities
-
-
18.6
Other Commitments
-
-
30,470,229,787
27,764,449,918
13,629,421,075
325,466,389
1,026,570,990
228,021,115
15,209,479,569
11,319,014,211
233,816,722
1,178,954,865
324,986,845
13,056,772,643
9,706,867,767
1,514,105,302
890,794,921
173,161,578
12,284,929,568
2,924,550,001
7,541,679,221
1,088,563,216
659,954,139
148,750,842
9,438,947,418
3,617,825,225
475,911,824
6,895,601,710
1,802,282,885
57,862,396
9,370,413
1,041,636,004
401,661,845
1,070,394,404
24,673,596
1,367,356,318
448,121,917
34,547,764
13,629,421,075
524,583,818
5,630,407,600
1,798,329,456
43,330,992
1,271,101
640,934,900
440,016,815
822,852,244
27,026,714
1,060,471,625
326,224,028
3,564,917
11,319,014,211
13,629,421,075
23,171,187
23,171,187
13,652,592,262
11,319,014,211
6,252,123
6,252,123
11,325,266,334
194,524,476
71,095,053
7,861,522,071
9,653,330
1,372,089,282
9,508,884,212
123,746,522
43,101,891
6,316,179,377
6,107,649
893,018,625
7,382,154,065
Total Off-balance sheet items
Income Statement (Note-19 to Note-38)
Income:
Income from Investment (Note-19)
Income from Investment in Shares & Securities (Note-21)
Commission, Exchange and Brokerage Income (Note-22)
Other operating income (Note-23)
Expenses:
Profit paid on Deposits (Note-20)
Administrative expenses
Other operating expenses
Depreciation on Banking assets
Income over expenditure
19
19(a)
20
Income from Investment
Profit on Murabaha
Profit on Bai-Muazzal
Profit on Hire-Purchase
Profit on Musharka
Profit on Bai-Salam
Profit on Quard against MTDR, Scheme and others
Profit on Inland Document Bill Purchased
Profit on Foreign Document Bill Purchased
Profit on Ijarah
Profit on Investment against Mudaraba Deposit with other banks and NBFIs
Profit on other investments (Card, Wakalat fee etc.)
Profit on Mudaraba
Consolidated income from investment
Social Islami Bank Ltd.
Add: Income from investment of subsidiaries of SIBL
SIBL Securities Ltd.
SIBL Investment Ltd.
Grand total of consolidated investment income
Profit paid on Deposits
Profit paid on deposits
Mudaraba Savings Deposits (MSD)
Mudaraba short notice deposit (MSND)
Mudaraba term deposit (MTDR)
Cash waqf fund deposit
Profit paid on Scheme Deposits & others
Profit paid on borrowings
Total profit paid on deposits and borrowings
197,983,555
159,525,157
9,706,867,767
7,541,679,221
215
Social Islami Bank Ltd.
2013
Taka
21
Income from Investment in Shares & Securities
Income from Investment in Islamic Bond
Income from Investment in Shares
Belhasha Preference share
Dividend Income
156,284,171
13,670,008
70,000,000
85,512,211
325,466,389
2012
Taka
111,022,091
2,590,786
70,000,000
50,203,845
233,816,722
Social Islami Bank Ltd. has investment of Tk. 550.00 crore in Bangladesh Govt.Islamic Investment Bond for which 4.67%,
average rate of income has been provided for January-December 2013. The nature of the Fund is to generate profit according
to Mudaraba Principle.
22
22(a)
23
23(a)
23.1
24
216
Commission, Exchange & Brokerage
Commission
Exchange income
Consolidated income from commission, exchange & brokerage
Social Islami Bank Ltd.
Add: Income from commission, exchange & brokerage of
subsidiaries of SIBL
SIBL Securities Ltd.
SIBL Investment Ltd.
Grand total of consolidated income from commission, exchange & brokerage
Other Operating Income
Telephone, fax, trunk call charge recovered
Telex charge recovered
P & T charge recovered
Courier Charges Recovery & Others
Services & charges
SWIFT/ Return charge recovered
SWIFT/ Return charge recovered (OBU)
Profit from leased Assets
Other charges (Note: 23.1)
Consolidated other operating income
Social Islami Bank Ltd.
Add: Other operating Income of subsidiaries of SIBL
SIBL Securities Ltd.
SIBL Investment Ltd.
Grand total of consolidated income from commission, exchange & brokerage
Other Charges
Rent receipts
Income from sale of forms
Service charge on SIBL Cards
Notice pay earnings
Miscellaneous income
Salary & Allowances
Basic Salary
Allowances
Bonus
L/E Salary & Allowances
Bank’s Contribution to Provident fund
Bank’s Contribution to Social Insurance fund
555,276,602
471,294,388
1,026,570,990
586,318,720
592,636,144
1,178,954,865
1,026,570,990
1,178,954,865
29,545,581
29,545,581
1,056,116,571
15,524,695
15,524,695
1,194,479,560
346
17,181,862
5,263,672
119,726,503
41,884,126
201,839
43,762,766
228,021,115
725
25
17,863,307
2,186,475
102,023,536
30,600,340
40,471
13,000
172,258,966
324,986,845
228,021,115
5,133,015
5,133,015
233,154,130
324,986,845
12,581,531
12,581,531
337,568,377
4,302,033
374,924
4,233,374
34,852,434
43,762,766
5,654,830
328,200
206,033
3,046,832
163,023,072
172,258,966
602,511,848
545,049,067
290,430,130
8,242,169
53,340,586
5,929,242
1,505,503,042
427,073,136
389,771,095
211,762,002
8,582,757
37,245,541
4,128,685
1,078,563,216
a n n u a l
24(a)
25
25(a)
25.1
Consolidated expenses for Salary and Allowance
Social Islami Bank Ltd.
Add: Salary and Allowance for subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
Rent, Taxes, Insurance & Electricity etc.
Rent, Rates & Taxes (note: 25.1)
Insurance (note: 25.2)
Electricity, Lighting & Water (note: 25.3)
Consolidated expenses for rent, taxes, insurance & electricity
Social Islami Bank Ltd.
Add: Rent, Taxes, Insurance & Electricity etc. of subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
Rents, Rates, Taxes, Insurance & Lighting etc.
Rents
Rent (Office)
Rent (Garage)
Rent (Godown & others)
Rates and Taxes
Total Rents, Rates & Taxes
25.2
25.3
26
26(a)
Insurances
Insurance Premium in Counter
Insurace Premium in Transit
Insurance Premium Safe/Vault
Insurance Premium on deposit
Insurance Premium on Vehicle
Other Insurance
Lighting & Electricity
Lighting & Electricity Bill (Office)
Lighting & Electricity Charges (Office)
Lighting & Electricity Charges (Godown)
Sub Total
Water & Sewerage
Legal Expenses
Legal Fees & Charge
Stamp Duties
Other Legal Expenses
Consolidated legal expenses
Social Islami Bank Limited
Add: Legal expenses for subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
re p o r t
2 0 13
2013
Taka
2012
Taka
1,505,503,042
6,243,499
6,243,499
1,511,746,541
1,078,563,216
2,723,260
2,723,260
1,081,286,476
128,700,530
58,495,559
40,650,432
227,846,521
109,851,005
38,825,508
32,563,022
181,239,535
227,846,521
598,854
598,854
228,445,375
181,239,535
520,743
520,743
181,760,278
125,238,963
240,448
2,145,557
127,624,968
1,075,562
128,700,530
106,644,870
216,580
2,151,605
109,013,054
837,950
109,851,005
731,641
898,900
2,187,670
53,040,467
1,225,885
410,996
58,495,559
644,894
978,563
1,799,001
34,056,576
756,035
590,439
38,825,508
34,972,178
3,327,850
38,300,028
2,350,404
40,650,432
28,384,831
2,463,327
30,848,158
1,714,864
32,563,022
7,570,649
5,780
349,709
7,926,138
7,297,017
89,130
1,232,563
8,618,710
7,926,138
17,250
17,250
7,943,388
8,618,710
8,618,710
217
Social Islami Bank Ltd.
2013
Taka
27
27(a)
28
28(a)
29
30
30(a)
31
218
Postage, Stamps, Telecommunication etc.
Postage
Internet Charges
SWIFT Charges
Cable Network rent
Telegram, Fax, Telex & other charges
Telephone charges
Mobile phone charges
Consolidated expenses for Postage, Stamps, Telecommunication etc.
Social Islami Bank Limited
Add: Postage, Stamps, Telecommunication etc. expenses for subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
Stationery, Printing, Advertisements etc.
Table Stationery
Printing Stationery
News Paper & Magazine
Television & Radio
Neon Sign, Banner etc.
Other Publicity
Consolidated expense of Stationery, Printing, Advertisement etc.
Social Islami Bank Ltd.
Stationery, Printing, Advertisement expense of Subsidiaries of SIBL
SIBL Securities Limited.
SIBL Investment Limited.
Managing Director’s Salary and Allowances
Basic Salary
Allowances
Festival & other Bonus
Directors’ Fees & Meeting Expenses
Directors Fee
Meeting Expenses
Consolidated Directors’ fees & Meeting Expenses:
Social Islami Bank Limited
Directors’ Fees & Meeting Expenses of Subsidiaries of SIBL
SIBL Securities Limited (VAT included)
SIBL Investment Limited (VAT included)
Shariah Supervisory Committee’s Fees & Expenses
Shariah Counsil Meeting Expenses
Others
2012
Taka
12,999,752
2,263,515
8,056,218
353,111
1,860
5,044,188
2,826,004
31,544,647
10,716,250
2,202,033
8,517,636
45,304
5,930
4,129,430
2,513,704
28,130,288
31,544,647
741,676
741,676
32,286,323
28,130,288
669,276
669,276
28,799,564
8,534,271
32,694,298
12,969,944
11,151,625
290,036
25,357,252
90,997,426
7,986,596
28,320,155
15,206,030
8,056,160
1,645,595
19,379,434
80,593,969
90,997,426
546,408
546,408
91,543,834
80,593,969
182,407
182,407
80,776,376
4,185,162
2,997,098
1,420,000
8,602,260
4,000,000
4,200,000
1,800,000
10,000,000
1,420,250
2,844,325
4,264,575
1,598,500
2,197,374
3,795,874
4,264,575
540,500
540,500
4,805,075
3,795,874
299,000
299,000
4,094,874
195,500
58,862
254,362
117,801
117,801
a n n u a l
32
Depreciation and Repair of Bank’s Assets
a) Depreciation of Bank’s Assets (Annexure A)
Land
Building
Furniture & Fixtures
Office Appliance & Equipment
Vehicles
Books
b) Repair on Bank’s Assets
Total of Depreciation and repair of Bank’s Assets
32(a)
33
Consolidated balance of Depreciation
Social Islami Bank Ltd.
Add: Depreciation on assets of subsidiaries
SIBL Securities Ltd.
SIBL Investment Ltd.
Other Expenses
Local conveyance
Business Development Exp.
Petroleum, oil & lubricants
Entertainment expenses
Traveling allowances
Travelling Foreign
Bank charges
Uniform charges
Subscriptions to Institutions
Banks’ clearing house charges
CIB Charges
Transportation charges
News paper, Journal & periodicals
Washing charges
Training expenses Academy/ Internal
Training expenses at outside Banks
Meeting expenses
Direct expenses on investment
Up keep of branches/office premises
Excise duty
Computer charges
Security Services
Cleaner Services
Others wages
Photocopy expenses
Photography expenses
Cash & Bank remittance charges
Honorarium
On-Line Expenses
ATM Rent Hardware
Credit Rating Fees
Other Utility
Balance carried forward
re p o r t
2013
Taka
2 0 13
2012
Taka
41,474,799
30,542,352
74,620,125
8,581,325
53,971
155,272,571
42,512,037
21,218,435
63,097,530
8,442,625
45,104
135,315,730
17,889,007
13,435,111
17,889,007
13,435,111
173,161,578
148,750,842
173,161,578
1,583,062
1,583,062
174,744,640
148,750,842
773,057
773,057
149,523,899
12,730,010
12,988,202
13,611,026
16,607,510
8,978,035
1,406,314
276,462
715,868
2,670,930
95,259
529,499
2,252,250
296,919
236,973
2,414,508
532,000
4,319,734
284,332
4,874,413
727,825
8,486,677
66,569,009
2,506,899
40,727,964
1,077,003
65,556
1,770,056
1,137,500
20,195,319
1,541,812
957,418
403,233
9,757,400
15,423,236
19,946,177
12,301,526
9,179,924
3,579,920
109,994
522,387
5,602,500
46,862
618,210
1,734,537
219,269
184,132
2,405,007
515,251
8,976,545
1,016,357
4,440,824
996,710
6,977,447
55,277,015
2,487,247
21,257,049
1,194,948
50,104
1,718,142
303,533
14,808,375
32,156
602,360
261,235
231,986,516
202,546,382
219
Social Islami Bank Ltd.
2013
Taka
Balance brought forward
Right Share issue related Expense
Fair value adjustment for shares and securities
Gratuity expense
Zakat Expense
Miscellaneous expenses
33(a)
Consolidated Other Expenses
Social Islami Bank Limited
Add:Other Expenses for SIBL Securities Limited
License, fees, renewals and incorporation expenses
Entertainment
Bank charge and Excise duty
Others
Other Expenses for SIBL Investment Limited
Incorporation and Other Regulatory expenses
Bank charge and Excise duty
Others
34
34.1
34(a)
Other Provision
Provision for Zakat fund (note: 34.1)
Provision for other assets
Provision for gratuity
Provision for Zakat fund
Provision required for the year
Provision consumed during the year
Rest of required provision provided for the year
Consolidated other provision
Social Islami Bank Ltd.
Add:Provision for subsidiaries
SIBL Securities Ltd.
Provision for general reserve
SIBL Investment Ltd.
35
35(a)
220
Provision against Investment, Off-Balance Sheet items & Others
Provision on classified investment
Provision on unclassified investment
Provision on Off-Balance Sheet items
Other provisions (note: 34)
Consolidated Provision against Investment, Off-Balance Sheet items & Others
Social Islami Bank Ltd.
Add:Provision for subsidiaries
SIBL Securities Ltd.- Provision for general reserve
SIBL Investment Ltd.
2012
Taka
231,986,516
273,341
182,903,697
75,916,493
20,000,000
16,363,705
527,443,752
202,546,382
8,870,128
126,173,365
18,985,232
356,575,106
527,443,752
7,272,755
3,020,983
215,464
38,158
3,998,150
356,575,106
4,099,252
2,246,740
110,181
42,906
1,699,425
81,340
20,692
600
60,048
534,797,848
58,750
42,848
10,920
4,982
360,733,108
30,488,279
4,910,000
35,398,279
30,146,894
222,654,542
53,811,215
306,612,651
50,488,279
20,000,000
30,488,279
30,146,894
30,146,894
35,398,279
306,612,651
5,924,102
742,432
41,322,381
307,355,083
752,687,954
84,746,527
27,057,799
35,398,279
899,890,558
285,356,045
173,483,062
104,482,499
306,612,651
869,934,257
899,890,558
5,924,102
5,924,102
905,814,660
869,934,257
742,432
742,432
870,676,689
a n n u a l
re p o r t
2013
Taka
36
36(a)
Provision for Income Tax
Current year provision (Note: 36.1)
Deferred Tax expense/(income) (Note: 36.2)
2012
Taka
802,951,284
1,506,720
804,458,005
1,301,591,387
5,172,304
1,306,763,692
804,458,005
2,350,179
806,808,184
1,306,763,692
171,791
1,306,935,483
Consolidated Provision for Income Tax
Social Islami Bank Limited
SIBL Securities Limited
SIBL Investment Limited
36.1
2 0 13
Current Year Tax Provision
Provision on tax has been calculated based on Income Tax Ordinance,1984 as amended upto 2013 by the Finance Act,
considering the allowances and disallowances.
36.2
Deferred Tax Expenses/(Income)
Defferred tax expense/(income) for liability/(asset) has been calculated as per Bangladesh Accounting Standard 12.
37
Earning Per Share (EPS)
SIBL has issued 1:1 right share for an amount of Taka- 2,987,815,750 as approved in its 242nd Board Meeting held on 02
March 2011 by the Directors of the Board. Before right issue SIBL had a total capital of Taka- 2,987,815,750 as on 31.12.2010.
The paid up capital was further enhanced by an amount of Taka- 418,294,200 and Taka-637,489,940, issued as bonus share
for the year ended 31 December 2010 and 2012. Now the total paid up capital after right issue and issue of bonus shares
amounts to Taka- 7,031,415,640 with a total no. of 703,141,564 shares having face value @ Taka- 10/share.
Net Profit after Tax
Number of ordinary shares outstanding
Earning Per Share (EPS) (Restated for year 2012)
37(a)
Consolidated Earning Per Share (CEPS)
Net Profit after Tax
Number of ordinary shares outstanding
Consolidated Earning Per Share (CEPS) (Restated for year 2012)
1,220,201,438
703,141,564
1,441,127,276
703,141,564
1.74
2.05
1,252,134,320
703,141,564
1.78
1,465,218,037
703,141,564
2.08
13,629,421,075
13,629,421,075
11,319,014,211
11,319,014,211
13,629,421,075
23,171,187
23,171,187
13,652,592,262
11,319,014,211
6,252,123
6,252,123
11,325,266,334
Notes for Cash Flow Statement (Note-38 to Note-44)
38
38(a)
Income from Investment
Investment profit receipt
Add: Opening profit receivable
Less: Closing profit receivable
Consolidated income from investment
Income from investment of SIBL
Income from investment of Subsidiaries of SIBL
SIBL Securities Ltd.
SIBL Investment Ltd.
Grand total
221
Social Islami Bank Ltd.
2013
Taka
39
39(a)
Receipts from Other Operating Activities (Other than profit on sale of fixed assets)
Exchange income
Rent receipts
Telephone, fax, trunk call charge recovered
Telex charge recovered
P & T charge recovered
Courier Charges Recovery & Others
Notice pay earnings
Miscellaneous income
Services & charges
SWIFT/ Return charge recovered
SWIFT/ Return charge recovered (OBU)
Service charge on SIBL Cards
Profit from leased Assets
Income from sale of forms
40(a)
222
471,294,388
4,302,033
346
17,181,862
5,263,672
4,233,374
34,852,434
119,726,503
41,884,126
201,839
374,924
699,315,503
592,636,144
5,654,830
725
25
17,863,307
2,186,475
3,046,832
163,023,072
102,023,536
30,600,340
40,471
206,033
13,000
328,200
917,622,990
699,315,503
5,133,015
5,133,015
704,448,518
917,622,990
12,581,531
12,581,531
930,204,521
125,238,963
240,448
2,145,557
1,075,562
731,641
898,900
2,187,670
53,040,467
1,225,885
410,996
34,972,178
3,327,850
2,350,404
7,926,138
4,264,575
254,362
517,500
17,889,007
527,443,752
786,141,855
106,644,870
216,580
2,151,605
837,950
644,894
978,563
1,799,001
34,056,576
756,035
590,439
28,384,831
2,463,327
1,714,864
8,618,710
3,795,874
117,801
882,855
13,435,111
356,575,106
564,664,993
786,141,855
8,527,949
8,429,359
98,590
564,664,993
5,005,345
4,932,795
72,550
794,669,804
569,670,338
Consolidated receipts from Other Operating Activities (Other than profit on
sale of fixed assets)
Receipts from Other Operating Activities of SIBL
Receipts from other operating activities of Subsidiaries of SIBL
SIBL Securities Ltd.
SIBL Investment Ltd.
40
2012
Taka
Payment to others
Rent (Office)
Rent (Garage)
Rent (Godown)
Rates and Taxes
Insurance Premium for cash in counter
Insurance Premium for cash in transit
Insurance Premium for cash in safe/ vault
Insurance Premium on deposit
Insurance Premium for vehicle
Other Insurance
Lighting and Electricity Bill (Office)
Lighting and Electricity Charges (Office)
Water and Sewerage
Legal Expenses
Directors Fees and Meeting Expenses
Shariah Supervisory Fees & Expenses
Audit Fees
Repairs and Maintenance
Other Expenses (note: 33)
Consolidated payment to others
Social Islami Bank Limited
Payment to others- Subsidiaries
SIBL Securities Limited
SIBL Investment Limited
a n n u a l
41
Cash Increase/ Decrease in Other Assets
Stock of stationery, stamps and printing materials etc. (valued at cost)
Advance rent and advertisement
Security Deposit
Branch Adjustments (SIBG) (Note: 9.1)
Suspense Accounts (Note: 9.2)
Capitalized Expenditure
Other Repayments
Receivable from M/S. Stock & Bond and SIBL Securities Ltd.
Advance Income Tax
Receivable from SIBL Securities Limited
Receivable from SIBL Investment Limited
Protested Bills against Investment
Profit Receivable from Banks, NBFI and BD Govt.
Due from Off-shore Banking Unit
Others (Note: 9.3)
Difference between (2013, 2012)
Advance Income Tax
Net change in Other Assets
41(a)
Consolidated cash increase/decrease in other assets
Social Islami Bank Limited
Cash Increase/ Decrease in Other Assets of subsidiaries
Difference between (2013, 2012)
Advance Income Tax
Consolidated net change in Other Assets
42
Cash Increase/ Decrease in Other Liabilities
Adjusting A/C (Cr.) Balance
Other Payable
SIBL Employees’ PF
SIBL Employees’ Social Insurance
Compensation and Rent Suspense (note: 12.4)
Transfer to Provision for Investment A/C from Compensation A/C
Gratutity Fund Balance with SIBL Principal Br.
BEFTN Adjustment Account
ATM Settlement for Q-Cash
Mudaraba Profit Distribution (note: 12.7)
Cash Increase/ (Decrease) in Other Liabilities
Difference between (2013 & 2012)
Add: Transfer to Provision for Investment from Compensation
(In Yrs. 2013 & 2012)
Less: Zakat distributed during the year
Less: Gratuity transferred & Paid during the year
Less: Adjustment of other provision made during the year
Less: Written off/ Waiver of investment during the year
re p o r t
2 0 13
2013
Taka
2012
Taka
15,766,865
138,411,134
2,878,447
2,566,384,734
122,540,111
33,569
183,008
17,976,725
3,743,882,093
5,516,584
1,522,805
368,594,750
372,918,333
1,137,284,247
8,493,893,405
15,992,283
145,434,127
3,948,732
2,522,022,946
376,127,658
33,569
411,571
955,088
2,391,120,492
1,875,347
1,401,205
374,545,000
3,564,917
1,205,337,688
7,042,770,623
(1,451,122,782)
1,352,761,601
(98,361,181)
(982,705,537)
926,823,440
(55,882,097)
8,493,893,405
1,276,668,236
9,770,561,641
7,042,770,623
1,123,040,482
8,165,811,105
(1,604,750,536)
1,356,696,826
(248,053,710)
(1,070,613,469)
929,894,508
(140,718,961)
7,966,080
2,261,025
506,934,651
47,638,442
461,185,089
292,077,224
25,731,488
9,697,144
10,000,000
1,363,491,145
11,623,498
1,291,813
383,644,225
37,695,442
304,827,189
71,081,185
167,132,732
3,184,624
3,820,731
6,595,602
990,897,040
372,594,105
372,594,105
27,777,166
27,777,166
71,081,185
26,051,561
52,056,322
178,000
30,769,817
334,619,590
248,100,000
19,654,080
45,672,080
414,000
138,567,510
71,569,496
223
Social Islami Bank Ltd.
42(a)
Consolidated cash increse/decrease in other liabilities
Cash Increase/ Decrease in other liabilities of Social Islami Bank Limited
Cash Increase/ Decrease in Other Liabilities of subsidiaries
2013
Taka
2012
Taka
1,363,491,145
35,782,854
1,399,273,999
990,897,040
9,467,522
1,000,364,562
398,909,437
(37,974,515)
360,934,923
37,086,093
43,792,330
80,878,423
1,266,962,343
1,104,528,222
7,627,790,250
10,934,993,013
1,178,527,956
21,008,273,562
10,020,554,834
11,729,376,330
849,779,375
23,704,238,761
21,008,273,562
29,381,371
29,379,751
1,620
23,704,238,761
13,472,482
13,459,312
13,170
21,037,654,933
23,717,711,242
Difference between (2013, 2012)
Other changes in other liabilities of Social Islami Bank Limited
Net change in Other Liabilities-Social Islami Bank Limited
43
43(a)
Cash and Cash Equivalent
Cash in Hand
Balance with Bangladesh Bank & Sonali Bank Limited (as agent
of Bangladesh Bank)
Balance with Other Banks & Financial Institutions-in Bangladesh
Balance with Other Banks & Financial Institutions-outside Bangladesh
Consolidated Cash and Cash Equivalent
Social Islami Bank Limited.
Cash and Cash Equivalent of subsidiaries
SIBL Securities Limited.
SIBL Investment Limited.
44
Number of Employees
The number of employees engaged for the whole year or part thereof who received
a total remuneration of Tk. 36,000 p.a or above were 1802.
45
Audit Committee
The Board of Directors in its 291th meeting held on 29.06.2013 reconstituted the Board Audit Committee comprising with the following:
Sl. No.
1
2
3
4
Name
Md. Abdur Rahman
Mohammad Azam
Anisul Haque
Abdul Mohit
Status with the
Bank
Independent Director
Director
Director
Director
Status with the
Committee
Chairman
Member
Member
Member
The Board Audit Committee conducted 86 (eighty six) meetings in the previous years since inception in the year 2003 out of
which 05 (five) meetings were held in the year ended on 31 December 2013.
The Board Audit Committee evaluates the activities of the Bank as per guidelines laid down in the Bangladesh Bank BPRD
Circular # 11 dated 27.10.2013. The Audit Committee reviews the internal control system, compliance of audit activities,
developing adequate risk management & information technology.
The Audit Committee makes recommendation on the control, compliance and reporting aspects to achieve excellence in the
areas, enhancing the effectiveness and reducing the risk of the business.
The Committee examinees the Annual Financial Statements before submission in the meeting of Board of Directors. The
Committee extends all necessary cooperation in implementing the decisions of the Board of Directors and initiates steps to
strengthen the audit activities as per working plan set out under section 7.3.a of Internal Control & Compliance Manual.
The Audit Committee also reviews the inspection reports submitted by the officials of Board Audit Cell on the assets position of
the branches considered to be risky in nature in the meeting of the Board Audit Committee and advises the management to take
necessary action and adhere to compliance position with a view to the interest of the Bank.
224
a n n u a l
re p o r t
2 0 13
46
Related Party Disclosures
46.1
Name of the Firms / Business Organizations where the Directors of the Social Islami Bank Limited have got interest:
SL
No
Name
Name of Firms/ Business Organizations Where the
Directors of SIBL have got interest
1
Major (Retd.)Dr. Md. Rezaul Haque
Chairman
Chairman
Little House Limited
Active Builders Limited
Sponsor Director
United Hospital Limited
2
Md. Sayedur Rahman
Vice Chairman
Managing Director
M/s Lodestar Fashions Limited
M/s Mid Asia Fashions Limited
3
Mohammad Azam
Vice Chairman
Proprietor
M/S Zia & Brothers
4
Abdul Awal Patwary
Director
Chairman
Patwary Cold Storage Ltd.
Patwary Potato Flakes Ltd.
Greentech Greenhouse Bangladesh Ltd.
Managing Director
Faysal Shopping Complex Ltd.
Faysal Shipping Lines
Proprietor
Faysal Traders
5
Anisul Haque
Director
Representative of: Hamdard Laboratories
(WAQF) Bangladesh. 291/1, Sonargaon Road, Dhaka
Director, Finance & Accounts
Hamdard Laboratories (WAQF) Bangladesh Limited
6
Alhaj Nasiruddin
Director
Managing Director
J.A.N. Corporation Limited
Proprietor
Nams Trade Corporation
Nasim Trading Co.
7
Alhaj Sk. Mohammad Rabban Ali
Director
Managing Director
Rabbani Trading Company Limited
Shamlon Industries Limited
Shama Poly Yarn Industries Limited
Proprietor
S.R. Impex Co.
8
Mr. Abdul Jabbar Mollah
Director
Managing Director
Jahanabad Sea Foods Limited
Jalalabad Frozen Foods Limited
Jabbar & Co. Limited
9
Md. Abdur Rahman
Independent Director
Nil
10
Abdul Mohit
Independent Director
Nil
46.2
Significant contracts where Bank is a party and where in Directors have interest: Nil
46.3
Lending Policies to Related Parties:
Lending to related parties is effected as per requirements of Section 27(1) of the Bank Companies Act, 1991.
225
Social Islami Bank Ltd.
A
Related Party Transaction
Name of the
Director
Relationship
Nature of
Investment
Outstanding Amount
(Taka)
Status
Mrs. Fatema Begum
Mr. Abdul
Awal Patwary
Wife
HPSM (Transport)
12.44 lac
UC
Md. Abdur Rahman
Md. Abdur Rahman
Self
HPSM (Transport)
12.00 lac
UC
SIBL Securities Ltd.
N/A
Subsidiary
Quard
500 lac
UC
Self
Bank Guarantee
11.87 lac
-
Name of Party
Funded Liability
Non-Funded Liability
M/S Foysal Traders
Mr. Abdul Awal
Patwary
B
Investment Policies to Related Parties
Lending to related parties is effected as per requirements of section 27 (1) of Bank Companies Act,1991
C
Business other than Banking business with any related concern of the Directors as per Section 18 (2) of the Bank Companies
Act, 1991: Nil
D
Investments in the securities of Directors and their related concern: Nil
E
Shares issued to Directors and Executives without consideration or exercisable at discount: Nil
47
Post Balance Sheet events (BAS-10)
No material events occurring after balance sheet date came to our notice, which could affect the values reported in the
financial statements significantly.
The Board of Directors has authorized the financial statements for issue on 31.03.2014 and recommended cash dividend @
12% for the year ended 31 December 2013.
48
General
(i) Figures appearing in these financial statements have been rounded off to the nearest Taka.
(ii) The expenses, irrespective of capital or revenue nature, accrued/due but not paid have been provided for in the books of
the Bank.
(iii) Figures of previous year have been rearranged wherever necessary to conform the current year’s presentation.
(iv) All types of financing made to the clients have been shown under the head ‘Investment’ whereas investment made in
different shares and securities of Government and others companies are shown as investment shares and securities.
226
2,406,695,754
31 December 2012
251,239,389
561,435,854
93,026
10,641,933
164,975,475
170,760,783
214,964,637
-
-
841,485
2,235,638
-
-
-
2,235,638
* Details of revaluation of Fixed assets is shown in note:16.
2,657,093,659
1,043,853
Books
31 December 2013
52,918,377
528,531,089
Office Equipment
Vehicles
343,209,238
1,719,061,103
12,330,000
Furniture & Fixtures
Building
Land
Particulars
C O S T / R E V A L U E D*
Additions
Disposal/
Balance as on
during the
Transfer
01 January 2013
year
during the year
2,657,093,659
3,216,293,875
1,136,879
63,560,310
693,506,564
511,734,383
1,934,025,740
12,330,000
Balance at 31
December 2013
(amounts in Taka)
Annexure A
10%
20%
20%
15%
2.50%
-
271,823,192
407,138,923
610,381
32,603,319
211,092,910
101,740,643
61,091,670
-
-
-
-
-
-
-
-
-
-
12,330,000
664,351
41,184,644
472,527
22,375,666
407,793,530
379,451,388
135,315,730 407,138,922 2,249,954,737
155,272,571 562,411,494 2,653,882,383
53,971
8,581,325
74,620,125 285,713,035
30,542,352 132,282,995
41,474,799 102,566,469 1,831,459,271
-
Written down
D E P R E C I A T I O N
value as at
Balance as on
Transfer/
Charged
Balance at
Rate of
31
December
01
January
Adjustment
during
the
31
December
Depreciation
2013
2013
during the year
year
2013
For the year ended 31 December 2013
Schedule of Fixed Assets
Social Islami Bank Limited
a n n u a l
re p o r t
2 0 13
227
228
93,026
565,153,674
258,324,668
1,043,853
Books
31 December 2013 2,664,538,817
31 December 2012 2,407,055,632
10,641,933
166,086,166
52,918,377
535, 721, 881
Office Equipment
173,367,912
214,964,637
-
Vehicles
343,463,603
1,719,061,103
12,330,000
Balance as on
01 January 2013
Furniture & Fixtures
Building
Land
Particulars
841,485
2,235,638
-
-
-
2,235,638
-
-
C O S T/REVALUED
Additions
Disposal/
during the
Transfer
year
during the year
2,664,538,816
3,227,456,853
1,136,879
63,560,310
701,808.,047
514,595,877
1,934,025,740
12,330,000
Balance at 31
December 2013
(amounts in Taka)
Annexure B
10%
20%
20%
10%
2.50%
-
271,852,089
407,940,876
610,381
32,603,319
211,869,205
101,766,301
61,091,670
-
-
-
-
-
-
-
-
-
-
12,330,000
664,352
41,184,644
472,528
22,375,666
413,962,076
382,060,803
136,088,787 407,940,876 2,256,597,940
156,855,633 564,796,509 2,662,660,343
53,971
8,581,325
75, 976,766 287,845,971
30,768,773 132,535,074
41,474,799 102,566,469 1,831,459,271
-
Written down
D E P R E C I A T I O N
value as at
Balance
as
on
Transfer/
Charged
Balance
at
Rate of
01 January
Adjustment
during the 31 December 31 December
Depreciation
2013
2013
during the year
year
2013
For the year ended 31 December 2013
Consolidated schedule of Fixed Assets
Social Islami Bank Limited
Social Islami Bank Ltd.
Mashreque Bank, Mumbai
Mashreque Bank, New York
Mashreque Bank, New York (OBU)
Standard Chartered Bank Limited, Mumbai
Standard Chartered Bank Limited, Frankfurt
Standard Chartered Bank Limited, London
United National Bank of London
Standard Chartered Bank Limited,Tokyo
Standard Chartered Bank Limited, New York
Sonali Bank (UK) Limited
ICICI Bank Ltd. Hongkong
Sonali Bank (UK) Limited
Sonali Bank (UK) Limited
Sonali Bank, Kolkata
United Bank of India, Kolkata
Summit Bank Ltd., Karachi
Nepal Bangladesh Bank Ltd.,Kathmandu
AB Bank Ltd., Mumbai
Habib Bank Ltd. Karachi
Bank of Bhutan
Commerz Bank Frankfurt
ICICI Bank Ltd., Mumbai
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
-
EUR
ACU
ACU
ACU
ACU
ACU
ACU
ACU
GBP
USD
USD
EUR
USD
JPY
GBP
GBP
EUR
ACU
USD
USD
ACU
ACUE
Currency
Name
-
4,658.53
1,326.05
4,889.83
2,591.07
1,375.36
2,049.41
2,689.16
1,593.88
2,020.00
6,056.34
-
440.33
12,356,973.44
764,955.00
314.05
3,532.48
626.76
6,241.32
100.00
2,742,313.48
3,405.97
1,228.92
Amount in
Foreign
Currency
-
106.84
77.75
77.75
77.75
77.75
77.75
77.75
77.75
128.10
77.75
-
106.84
77.75
0.74
128.10
128.10
106.84
77.75
77.75
77.75
77.75
106.84
2013
Conversion
rate per
unit F.C.
1,178,527,956
-
497,700
103,100
380,184
201,456
106,934
159,342
209,082
123,924
258,764
470,886
-
47,043
960,754,685
564,764
40,230
452,514
66,961
485,263
7,775
213,201,242
264,814
131,293
Amount in
BDT.
13,518.72
25,785.02
25,054.05
-
56,979.26
19,512.98
70,294.82
23,683.79
32,036.25
-
-
36,953.87
-
4,905,640.86
624,272.00
2,527.55
116,280.74
68,859.91
5,002.07
307.14
5,043,759.13
21,457.28
2,743.92
Amount in
Foreign
Currency
2012
80.30
106.17
80.30
-
80.30
80.30
80.30
80.30
80.30
-
-
80.30
-
80.30
0.96
129.85
129.85
106.17
80.30
80.30
80.30
80.30
106.17
Conversion
rate per unit
F.C.
849,779,375
1,085,553
2,737,664
2,011,840
-
4,575,435
1,566,892
5,644,674
1,901,808
2,572,511
-
-
2,967,396
-
393,923,013
599,424
328,210
15,099,418
7,311,040
401,666
24,663
405,013,818
1,723,020
291,329
Amount in
BDT.
Annexure C
re p o r t
Total
Mashreque Bank, Mumbai
Name of the Banks
1
SL
No.
(Referred to Note 4.2 of these financial statements)
Balance with other banks in foreign currencies
Social Islami Bank Limited
a n n u a l
2 0 13
229
230
M/s. Panama Composite Textile Mills Ltd
Dong Bang Textile Limited
Mars Textile Limited
Thermax Textile Mills Ltd.
Bashundhara Group
Dong Bang Dyeing Limited
Islam Brothers & Co.
FMC Dockyard Ltd.
Rabiul Islam, M/s Rhythm Trading, AR Center
Bashundhara Paper Mills Ltd. (BPML) and its subsidiaries
M/s. Western Dresses Ltd.
M/s Abdul Monem Ltd.
M/s. Mabiya Ship Breakers
2
3
4
5
6
7
8
9
10
11
12
13
14
Grand Total
M/s. Agrani Traders, Ovi Traders and A M Trading
Name of client
1
NO.
SL
-
1,015.17
46.68
105.56
65.52
94.40
-
-
66.17
142.69
153.48
94.05
127.67
118.95
Funded
-
588.90
77.72
4.13
48.08
25.46
-
-
78.06
3.80
31.39
100.62
120.27
99.37
Non-funded
-
-
1,604.07
124.40
109.69
113.60
-
119.86
-
-
144.23
146.49
184.87
194.67
247.94
218.32
Total
Outstanding as on 31 December 2013
Details information of Investment more than 10% of Bank’s total capital
Social Islami Bank Limited
703.87
-
-
-
-
103.41
88.62
118.67
58.97
-
-
80.28
145.08
-
108.84
Funded
-
-
319.26
-
-
-
-
6.13
24.31
7.47
92.79
-
-
118.14
70.42
Non-funded
1,023.13
-
-
-
-
109.54
112.93
126.14
151.76
-
-
198.42
215.50
-
108.84
Total
Outstanding as on 31 December 2012
(amounts in crore Taka)
(Funded & Non-funded)
Annexure D
Social Islami Bank Ltd.
50,000
10,000
No Dividend
Right Share Issued
Placement
Initial Public Offer
1998
1999
No dividend
No dividend
1:1 Right Share
17% Bonus Issue for the year 2007
10% Bonus Issue for the year 2008
2005
2006
2007
2008
10% Bonus Issue for the year 2012
63,748,994
298,781,575
41,829,420
14% Bonus Issue for the year 2010
1:1 Right Share
2,960,899
11% Bonus Issue for the year 2009
12,508,587
5,345,550
-
-
325,000
-
10
10
10
100
100
100
100
100
-
-
1,000
-
-
-
1,000
1,000
1,000
-
1,000
-
1,000
Face Value per
Share (Taka)
703,141,564
639,392,570
340,610,995
29,878,158
26,917,259
14,408,672
13,098,793
11,195,550
585,000
585,000
585,000
260,000
260,000
260,000
260,000
250,000
200,000
126,000
126,000
118,380
118,380
Cumulative no.
of Shares
637,489,940
2,987,815,750
418,294,200
296,089,850
1,250,858,700
130,987,900
190,324,300
534,555,000
-
-
325,000,000
-
-
-
10,000,000
50,000,000
74,000,000
-
7,620,000
-
118,380,000
Value of issued
Capital for the
year (Taka)
7,031,415,640
6,393,925,700
3,406,109,950
2,987,815,750
2,691,725,900
1,440,867,200
1,309,879,300
1,119,555,000
585,000,000
585,000,000
585,000,000
260,000,000
260,000,000
260,000,000
260,000,000
250,000,000
200,000,000
126,000,000
126,000,000
118,380,000
118,380,000
Cumulative value
of Capital (Taka)
Annexure E
re p o r t
2013
2011
2010
1:1 Right Share
1,309,879
Bonus Issue (For the years 2001, 2002, 2003)
2004
2009
1,903,243
50% Bonus Issue (Declared in the year 2004)
2003
-
25% Bonus Issue (Declared in the year 2004)
2002
-
20% Bonus Issue (Declared in the year 2004)
-
7,620
2001
2000
74,000
6.43% Bonus issue for the year 1996
1997
-
No Dividend
1996
118,380
No. of Share
Initial Capital
Declaration
1995
Years
History of Paid-Up Capital
Social Islami Bank Limited
a n n u a l
2 0 13
231
232
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2005
2006
2007
2008
2009
2010
2011
2012
2013
Assessment Year
2004
Accounting
Year
336,384,075
3,728,620,412
4,146,098,406
1,301,591,387
816,364,597
523,109,485
281,454,389
152,067,648
134,928,481
59,825,178
42,284,321
80,610,851
802,951,284
1,301,591,387
816,364,597
515,149,014
278,914,968
150,300,000
128,000,000
59,825,178
24,391,126
68,610,851
Tax Provision as per Advance Tax/TDS /
Settlement fee paid/
accounts
Appeal fee
3,753,931,161
336,384,075
1,301,591,387
816,364,597
523,109,485
281,454,389
152,067,648
134,928,481
85,135,927
42,284,321
80,610,851
Total Tax paid
2,309,017,591
-
-
858,889,820
523,109,485
315,315,060
175,548,021
169,150,459
85,135,927
42,284,321
139,584,498
Tax as per
assessment Order
as at 31 December 2013
Present Status
(amount in Taka)
Annexure F
Return not yet filed
Return filed
Pending at Commissioner (Appeal)
Pending at Commissioner (Appeal)
Pending at Appeallate Tribunal
Pending at Appeallate Tribunal
Pending at High Court Division of Supreme Court
Completed
Completed
Pending at High Court Division of Supreme Court
Statement of Corporate Income Tax status
Social Islami Bank Limited
Social Islami Bank Ltd.
a n n u a l
re p o r t
2 0 13
Annexure G
Social Islami Bank Limited
Off-shore Banking Unit (OBU)
Balance sheet
as at 31 December 2013
2013
PROPERTY AND ASSETS
Cash
Cash in hand (including foreign currencies)
Balance with Bangladesh Bank & its Agent Banks
(Including foreign currencies)
USD
2012
Taka
USD
Taka
-
-
-
-
-
-
-
-
550,145
550,145
42,773,780
42,773,780
307
307
24,663
24,663
Placement with Banks & other Financial Institutions
-
-
-
-
Investments in Shares & Securities
-
-
-
-
-
-
-
-
27,615,281
27,615,281
2,147,088,153
2,147,088,153
2,529,937
2,529,937
203,153,922
203,153,922
1,163
-
90,423
-
1,681
44,395
117,433
3,564,917
28,166,590
2,189,952,357
2,576,320
206,860,935
27,615,381
2,147,095,928
2,529,664
203,132,011
-
-
76
6,103
-
-
76
-
6,103
-
551,208
42,856,429
46,580
3,722,821
-
-
-
-
28,166,590
2,189,952,357
2,576,320
206,860,935
28,166,590
2,189,952,357
2,576,320
206,860,935
Balance with other Banks and Financial Institutions
In Bangladesh
Outside Bangladesh
Government
Others
Investments
General Investment etc.
Bills Purchased and Discounted
Fixed Assets including Premises, Furnitures and Fixtures
Other Assets
Non Banking Assets
Total Assets
LIABILITIES AND CAPITAL
Liabilities
Borrowing from Banks & other Financial Institutions
Deposits and Other Accounts
Mudaraba Savings Deposits
Mudaraba Term Deposits
Other Mudaraba Deposits
Al-Wadeeah Current & Other Deposit Accounts
Bills Payable
Other Liabilities
Deffered Tax Liabilities/ (Assets)
Total Liabilities
Capital/Shareholders’ Equity
Paid-up Capital
Statutory Reserve
Foreign currency translation gain/(loss)
Retained earnings
Total Shareholders’ Equity
Total Liabilities & Shareholders’ Equity
Off-Balance Sheet Items
233
Social Islami Bank Ltd.
Annexure G
2013
USD
2012
Taka
USD
Taka
CONTINGENT LIABILITIES
Acceptances and Endorsements
-
-
-
-
Irrevocable Letters of Credit (including Back to Back Bills)
-
-
-
-
Letters of Guarantee
-
-
-
-
Bills for Collection
-
-
-
-
Other Contingent Liabilities
-
-
-
-
Total
-
-
-
-
OTHER COMMITMENTS
Documentary credits and short term trade related transactions
-
-
-
-
Forward assets purchased and forward deposits placed
-
-
-
-
Undrawn note issuance and revolving underwriting facilities
-
-
-
-
commitments
-
-
-
-
Total
-
-
-
-
-
-
-
-
Undrawn formal standby facilities, credit lines and other
Total Off Balance Sheet Items including
Contingent Liabilities
234
a n n u a l
re p o r t
2 0 13
Annexure G
Social Islami Bank Limited
Off-shore Banking Unit (OBU)
Profit and Loss Account
For the year ended 31 December 2013
2013
Investment Income
Less: Profit paid on Deposits
Net Investment Income
Commission, Exchange and Brokerage
2012
USD
Taka
USD
406,334
31,592,497
Taka
44,395
3,564,917
-
-
-
-
406,334
31,592,497
44,395
3,564,917
-
-
-
-
Other Operating Income
98,732
7,676,391
504
40,471
Total Operating Income
505,066
39,268,888
44,899
3,605,388
Salary & Allowances
13,108
1,019,150
5,230
419,980
Rent & Utilities
556
43,220
305
24,467
Depreciation on fixed assets
299
23,237
219
17,567
Total Operating Expenses
13,963
1,085,607
5,754
462,014
-
-
-
-
491,103
38,183,281
39,145
3,143,375
-
-
-
-
491,103
38,183,281
39,145
3,143,375
Profit/(Loss) before Provision
Specific Provisions for Investment
General Provisions for Investment
General Provisions for Off-Balance Sheet exposure
Total Provision
Total Profit/(Loss) before Tax
Provision for Income Tax
Net Profit/(Loss) after Tax
235
Social Islami Bank Ltd.
Annexure G
Social Islami Bank Limited
Off-shore Banking Unit (OBU)
Cash Flow Statement
For the year ended 31 December 2013
2013
USD
Cash Flow from operating activities
Investment Income receipt
Profit paid on deposits
Dividend receipts
Fees & commission receipt
Cash payments to employees
Cash payments to suppliers
Income tax paid
Receipts from other operating activities
Payments for other operating activities
Operating profit before changes in operating assets and liabilities
Changes in operating assets and liabilities
Statutory deposits
Net trading securities
Investments to other banks
Investment to customers
Other assets
Deposits from other banks
Deposits received from customers
Other liabilities on account of customers
Trading liabilities
Other liabilities
Sub Total
A. Net Cash flow from operating activities
Cash flows from investing activities
Proceeds from sale of securities
Payment for purchases of securities
Proceeds from sale of fixed assets
Purchases of property, plant & equipments
Purchase/Sale of subsidiaries
B. Net Cash flows from investing activities
Cash flows from financing activities
Receipts from issue of debt instruments
Payments for redemption of debt instruments
Receipts from issue of right shares/ordinary share
Dividend paid in cash
C. Net Cash flow from financing activities
D. Net increase/(decrease) in cash & cash equivalents (A+B+C)
E. Cash and cash equivalents at the beginning of the year
F. Cash and cash equivalents at the end of the year (D+E)
236
2012
Taka
Taka
406,334
98,732
(13,108)
(556)
491,402
31,592,497
7,676,391
(1,019,150)
(43,220)
38,206,518
3,564,917
40,471
(419,980)
(24,467)
3,160,942
(27,615,281)
27,615,381
58,336
58,436
549,838
(1,943,934,231)
1,943,963,917
4,512,913
4,542,599
42,749,117
(203,153,922)
(3,564,917)
203,132,011
6,103
579,447
(3,001,278)
159,663
-
-
(135,000)
(135,000)
549,838
307
550,145
42,749,117
24,663
42,773,780
24,663
24,663
a n n u a l
re p o r t
Social Islami Bank Limited
2 0 13
Annexure G
Off-shore Banking Unit (OBU)
Notes to the Financial Statements
For the year ended 31 December 2013
1
Status of the unit
The Bank obtained the Off-shore Banking Unit (“the Unit”) permission vide letter no. BRPD(P-3)744(119)/2010-4652,
dated: 11 November, 2010. The Bank commenced operation of this unit from 02 may 2012. The Off-shore Banking Unit
is governed under the rules and guidelines of the Bangladesh Bank. Its office is located at SIBL Banani Branch, 48 Kemal
Ataturk Avenue, Banani, Dhaka 1213.
1.1
Principal activities
The principal activities of the unit are to provide all kinds of commercial banking services to its customers through its Offshore Banking Units in Bangladesh.
2
Significant accounting policies and basis of preparation of financial statements
2.1
Basis of accounting
The Off-shore Banking Unit maintains its accounting records in USD from which accounts are prepared according to the
Bank Companies Act, 1991, Bangladesh Accounting Standards, Bangladesh Financial Reporting Standard (BFRS) and
other applicable directives issued by the Bangladesh Bank, in particular, Banking Regulations and Policy Department
(BRPD) Circular No. 15 (09 November 2009).
2.2
Use of estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
2.3
Foreign currency transaction
a) Foreign currencies translation
Foreign currency transactions are converted into equivalent taka using the ruling exchange rates on the dates of respective
transactions as per BAS-21” The Effects of Changes in Foreign Exchange Rates”. Foreign currency balances held in US
Dollar are converted into Taka at weighted average rate of inter-bank market as determined by Bangladesh Bank on the
closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US
Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent.
b) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated
at contracted rates. Contingent liabilities/commitments for letter of credit and letter of guarantee denominated in foreign
currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.
c) Translation gains and losses
The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on
the translation of net investment in foreign subsidiary.
237
Social Islami Bank Ltd.
Annexure G
Cash flow statement
Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 “Cash Flow Statement”
under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation
& Policy Department of Bangladesh Bank.
2.4
Reporting period
These financial statements cover from January 01 to December 31, 2013.
2.5
General Investments
a) General investments of Off-shore Banking Units are stated in the balance sheet on net basis.
b) Profit is calculated on a daily product basis but charged and accounted for on accrual basis. Profit is not charged on bad
and loss investments as per guidelines of the Bangladesh Bank. Records of such interest amounts are kept in separate
memorandum accounts.
2.6
A provision is recognised in the balance sheet when the unit has a legal or constructive obligation as a result of a past event
and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS
37 “Provisions, Contingent Liabilities and Contingent Assets”.
2.7
Profit income
In terms of the provisions of the BAS-18 “Revenue”, the profit income is recognized on accrual basis.
Fees and commission income
Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission
charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the
transactions.
2.8
Profit paid and other expenses
In terms of the provisions of the BAS - 1 “Presentation of Financial Statements” interest and other expenses are recognized
on accrual basis.
2.9
Allocation of common expenses
Operating expenses in the nature of salary, rent, rates and taxes, management expenses, printing stationery, etc. are
allocated as common expense rather separately accounted for in the financial statements.
2.10 General
238
a)
These financial statements are presented in BDT, which is the Bank’s functional currency. Figures appearing in these
financial statements have been rounded off to the nearest BDT.
b)
Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 77.75 closing
rate as at 31st December 2013.
c)
Fixed assets of this unit are appearing in the books of the main operation of the bank and depreciation is also charged
to Profit & Loss Accounts of the main operation of the bank.
a n n u a l
re p o r t
2 0 13
Annexure H
Social Islami Bank Limited
Highlights of Performance
(amounts in Taka)
SL no.
Particulatars
2013
2012
1
Paid up Capital
7,031,415,640
6,393,925,700
2
Total Capital (Core + Supplementary)
11,623,517,680
10,596,509,878
3
Capital Surplus/(Deficit)
1,640,101,680
1,398,168,128
4
Capital Adequacy Ratio (CAR)
11.64%
11.52%
5
Total Assets
126,616,564,745
115,165,953,013
6
Total Deposit
102,104,479,583
93,594,292,471
7
General Investment
85,922,331,926
76,024,973,908
8
Total Contingent Liabilities and Commitments
30,470,229,787
27,764,449,918
9
Investment-Deposit (ID) Ratio ( % )
86.78%
89.43%
10
Percentage of classified investment against total investments
5.35%
3.33%
11
Profit before Tax and Provision
2,924,550,001
3,617,825,225
12
Profit after Tax and Provision
1,220,201,438
1,441,127,276
13
Amount of classified investment
4,593,330,630
2,532,858,494
14
Provisions kept against classified investment
1,692,052,956
970,134,819
15
Provisions surplus
-
-
16
Cost of Deposits
17
Profit Earning Assets
18
Non-Profit Earning Assets
19
Return on Investment in Securities
20
Return on average Assets (ROA)
21
Return on equity (ROE)
22
Income from Investment in Securities
23
Earning Per Share (Restated for year 2012)
9.04%
9.12%
106,574,036,365
94,748,144,597
20,042,528,379
20,417,808,416
3.81%
3.81%
1.67%
2.75%
11.01%
14.15%
325,466,389
233,816,722
1.74
2.05
24
Net Income Per Share (Restated for year 2012)
1.74
2.05
25
Price Earning Ratio (Times)
7.66
8.61
239
Social Islami Bank Ltd.
SIBL 94 Network
Dhaka Division
240
1
Principal Branch (Opening Date- 22-11-1995)
15, Dilkusha C/A, Dhaka-1000.
Phone-02-9550195,9559241, 9572303, 9564764
Fax-9562002
IP Phone (09612001122) Ext. 70201, 70202
7
Sonargaon Branch (Opening Date-09-06-2001)
Haji Jalal Tower (1st floor), Mogra Para,
Sonargaon,
Narayangonj.
IP Phone (09612001122) Ext. 71701,71702
2
Gulshan Branch (Opening Date-22-04-1998)
80, Gulshan Avenue, Gulshan-1, Dhaka.
Phone-02-8829137, 8813793
Fax: 02-9888857
IP Phone (09612001122) Ext. 70801, 70802
8
Foreign Exchange Branch (Opening Date-04-022002)
141-143, Motijheel C/A, BIWTA Bhaban, Dhaka.
Phone-02-9571254, 9571100
Fax: 02-9571100,
IP Phone (09612001122) Ext. 71801, 71802
3
Babu Bazar Branch (Opening Date-26-04-1998)
31, Nawab Yousuf Road,Naya Bazar, Dhaka.
Phone-02-7395118, 7395119
Fax: 02-7395119,
IP Phone (09612001122) Ext. 70901, 70902.
9
Hasnabad Branch (Opening Date-17-04-2002)
Hasnabad Super Market, Suvadda, Keranigonj,
Dhaka.
Phone-02-7761723, fax-02-7761723
IP Phone (09612001122) Ext. 72001,72002,
4
Moulvi Bazar Branch (Opening Date-30-09-1998)
77/7, Wahid Center (1st Floor), Moulvi Bazar, Dhaka.
Phone-02-7316225, 7315323, 7312911
Fax: 7312911
IP Phone (09612001122) Ext. 71001, 71002
10 Dhanmondi Branch (Opening Date- 14-05-2002)
House # 84, (Old-176), Road # 7/A (Old-14)
Satmasjid Road, Dhanmondi R/A, Dhaka.
Phone-02-9144682, Fax: 02-9120088
IP Phone (09612001122) Ext. 72101, 72102
5
Begum Rokeya Sarani Branch (Opening Date-23-09-1999)
Bangladesh Lions Foundation Bhaban, 3/C, West
Agargaon, Begum Rokeya Sarani, Dhaka.
Phone-02-8115789, 8141671, Fax-02-8115789
IP Phone (09612001122) Ext. 71301,71302,71303
11 Nawabpur Road Branch (Opening Date-26-07-03)
82, Nawabpur Road (1st Floor),
Nawabpur Road, Dhaka.
Phone-02-7174921, 7174922, 7174994, 7174995
Fax: 02-7174922
IP Phone (09612001122) Ext. 72201
6
Panthapath Branch (Opening Date-07-12-2000)
Level-2, Block-A, Bashundhara City, 13/Ka/1,
Panthapath, Dhaka.
Phone-02-9136819,9135229 Fax-02-9135229
IP Phone (09612001122) Ext. 71501,71502
12 Uttara Branch (Opening Date-07-12-2003)
Latif Emporium, 27 Uttara C/A, Road # 7
Sector-3, Uttara, Dhaka.
Phone-02-8959731, 8959732, 8959733
Fax: 8961124
IP Phone (09612001122) Ext. 72401, 72402.
a n n u a l
re p o r t
2 0 13
13 Fatullah Branch (Opening Date-23-12-2003)
Fatullah Bazar, Narayangonj.
Phone-02-7602144, 7670393,
Fax-02-7672144
IP Phone (09612001122) Ext. 72501 ,72502
19 Gopaldi Branch (Opening Date-11-08-2009)
Gopaldi Bazar, P.S- Araihazar, DistrictNarayangonj
IP Phone (09612001122) Ext. 73601, 73602.
14 Mirpur Branch (Opening Date-29-12-2003)
Plot No-29-30, Block-Kha, Main Road
(Goal Chakkar-10), Mirpur, Dhaka.
Phone- 02-8055323, 9013584, Fax-02-9013584
IP Phone (09612001122) Ext. 72601,72602,72603
20 Rampura Branch (Opening Date-24.11.2009)
Modina Tower (Opposite TV Centre), 464/1, West
Rampura DIT Road, Thana- Khilgoan, Dhaka
Phone-02-7281320, 7281879
IP Phone (09612001122) Ext. 74101 ,74102
15 Banani Branch (Opening Date-16-10-2008)
48 Kamal Attaturk Avenue, (Ground & 1st Floor)
Banani, Dhaka-1213.
Phone-02-89820996, 9820997, 9820998,
Fax-02-9820995
IP Phone (09612001122) Ext. 72701, 72702
21 Keranigonj Branch(Opening Date-13.12.2009)
East Aganogor Mosjid market, Shuvadda, Thana
Keranigonj, Karanigonj, Dhaka
Phone-02-7763253, 7763765
IP Phone (09612001122) Ext. 74401, 74402
16 Savar Branch (Opening Date-27-11-2008)
Yousuf Tower (2nd Floor), 35 Tatti, Dilkusha Bagh,
Savar Bus Stand, Savar, Dhaka.
Phone-02-7743707, 7745585
IP Phone (09612001122) Ext. 73001, 73002.
22 Madhabdi SME/Krishi Branch, (Opening Date-15-07-2010)
Madhabdi Plaza, P.O & Porosoba- Madhabdi,
P.S & Upazilla - Narsingdi, Zilla- Narsingdi.
Phone-9446883, 9446882 Fax-9446884
IP Phone (09612001122) Ext. 74501,74502
17 Mohammadpur Kaderia Tayebia Madrasha Branch
(Opening Date-18-05-2009)
9/2A Madrasha Road, Joint Quarter, Block-F,
Mohammadpur, Dhaka-1207.
Phone-02-8142572, 02-9132398, Fax-02-9132253
IP Phone (09612001122) Ext. 73101,73102
23 Islampur Branch (Opening Date-26-08-2010)
Lions Tower (2nd floor) 108, Islampur Road
Dhaka. Email: [email protected]
Phone-7392332, 7393208 Fax-7393208
IP Phone (09612001122) Ext. 75401, 75402
18 Donia Rosulpur Branch (Opening Date-28-05-2009)
49 Rosulpur, Kutubkhali, Donia, Jatrabari, Dhaka.
Phone-02-7541659, 7541650
IP Phone (09612001122) Ext. 73201, 73202
24 New Eskaton Branch (Opening Date-31-08-2010)
27, New Eskaton Road, P.S & P.ORamna, Dhaka-1000.
Phone-9359620, 8311592 Fax-8311591
IP Phone (09612001122) Ext. 75501, 75502
241
Social Islami Bank Ltd.
25 Bhulta SME/Krishi Branch, (Opening Date-05-09-2010)
Mir Market, Salam Mansion, P.O- Bhulta, P.S
Rupgonj, Zilla- Narayangonj.
IP Phone (09612001122) Ext. 75601 75602
26 Galimpur SME/Krishi Branch (opening Date-10-10-2010)
Khan Super Market (2nd floor), Galimpur Bazar,
NobabGonj, Dhaka.
IP Phone (09612001122) Ext. 75901, 75902
32 Bonosree Branch (Opening date-22.09.2011)
Plot No-L/2, Road-13,Block-L, South Bonosree,
Khilgaon, Dhaka.
Phone: 7811611,7811612,7811613
IP Phone (09612001122) Ext. 77201, 77202
27 Dhamrai SME/Krishi Branch (opening Date-09-11-2010)
Dhamrai Bazar, Porosoba- Dhamrai P.S & P.O
Dhamrai, Zilla- Dhaka.
Phone-06222-71908, 06222-71909
IP Phone (09612001122) Ext. 76101 ,76102
33 Bashundhara Branch (Opening date27.12.2011)
House # 16, Block-A, Bashundhara Avenue
Bashundhara, Dhaka
Phone-8402501,8402502
IP Phone (09612001122) Ext. 77701, 77702
28 Narayangonj Branch (opening Date-27-12-2010)
3 No. S. M. Maleh Road (Rupsi Height), Tanbazar,
P.O. & P.S.- Narayangonj, Dist.- Narayangonj.
Phone-7641621-3
IP Phone (09612001122) Ext. 76601, 76602
29 Mohakhali Branch (Opening date-20.09.2011)
6 (sixteen) storied building, 99 Mohakhali C/A,
Holding No-99, Ward No-20, P.O & P.S- Gulshan.
Dhaka Phone: 9888943
IP Phone (09612001122) Ext. 77001 ,77002
30 Tongi Branch (Opening date-03.10.2011)
8/B Anarkoli Road, Tongi Bazar, Qazi Market, Gazipur.
Phone-9817710, 9817711
IP Phone (09612001122) Ext. 77401, 77402
242
31 Bangshal Branch (Opening date-21.09.2011)
Bangshal Road, P.O & P.S- Bangshal Holding No45,
Ward No-68, Dhaka Sadar, Dhaka
Phone-7317175,7317396
IP Phone (09612001122) Ext. 77101 ,77102
34 Demra Branch (Opening date-07.10.2012)
Haji Hossain Plaza, Staff Quarter, P.O & P.S.Demra
Dhaka. Phone-7502915, 7502916
IP Phone (09612001122) Ext. 78101, 78102
35 Satarkul Road Branch (Opening Date-16.10.2012)
North Badda, Alir Moar, Satarkul Road,
Badda Union
Dhaka. Phone-9858072, 9858073
IP Phone (09612001122) Ext. 78401, 78402
36 Horirampur Union Branch (Opening Date-26.11.2012)
50, Garib-E-Neawaz Avenue, (Rosewood Areebah)
Sector-13, Uttara, Dhaka
Phone-8955884, 8955886
IP Phone (09612001122) Ext. 78601, 78602
a n n u a l
37 Kawran Bazar Branch (Opening Date-27.11.2012)
37, Kawran Bazar, Khansons Centre
Dhaka, Phone- 8180206, 8180207
IP Phone (09612001122) Ext. 78701, 78702
re p o r t
2 0 13
39 Mymensingh Branch (Opening Date-09-10-2013)
Ali Plaza, Muktijodda Sarani Road, 64, Choto Bazar
P.S- Kotwali (Sadar), Mymensingh
IP Phone (09612001122) Ext. 79601, 79602
38 Mouchak Branch (Opening Date-18-06-2013)
Advanced Melinda (1st Floor), 72, Malibagh
(Opposite Fortune Shopping Mall), Mouchak More,
Dhaka-1217
Phone- 9858072, 9858073
IP Phone (09612001122) Ext. 79101,79102
Chittagong Division
1
Agrabad Branch (Opening Date-10-04-1996)
World trade Centre, 102/103 Agrabad, C/A,Chittagong.
Phone-031-728342, 713947, 714041, 714504
Fax-031-710084
IP Phone (09612001122) Ext. 70401, 70402,70403
4
Elliotgonj Branch (Opening Date-30-10-2008)
Elliotgonj Bazar, P.O-Elliotgonj
P.S-Dawudkandi, Dist-Comilla.
IP Phone (09612001122) Ext. 72801,72802
2
Halishahar Branch (Opening Date-09-02-2002)
VIP Plaza, Plot # 5/4, Road # 2, Block-G, Halishahar
Housing Estate, Halishahar, Chittagong.
Phone-031-717201, 815702, Fax-031-2519284
IP Phone (09612001122) Ext. 71901,71902
5
Chandpur Branch (Opening Date-16-08-2009)
Faisal Shopping Complex, Bishnudi, Chandpur Bus
Stand, Thana- Chandpur, Dist- Chandpur.
Phone-0841-67932, 0841-67931,
IP Phone (09612001122) Ext. 73701 ,73702
3
Chowmuhoni Branch (Opening Date-12-11-2008)
Hossain Market, 276-284 D.B. Road,
Chowmuhani Powrosova, Begumgonj, Noakhali.
Phone-0321-56122, 0321-53622
IP Phone (09612001122) Ext. 72901,72902
6
Hathazari SME/Krishi Branch (Opening Date-16-08-2010)
Hazi M. Siddik Market,Block-B (2nd Floor)
Hathazari Bus Stand, Ward No-03, P.O & P.S –
Hathazari,Upazilla- Hathazari, Zilla-Chittagong
Phone-031-2601914, 031-2601915
IP Phone (09612001122) Ext. 75001 ,75002
243
Social Islami Bank Ltd.
244
7
Baryerhat SME/Krishi Branch (Opening Date-17-08-2010)
Al-Amin Shopping Complex (2nd Floor), Mouza
Jamalpur, Baryerhat Porosoba, Upazilla & P.S
Mirsorai, Zilla-Chittagong
IP Phone (09612001122) Ext. 75101, 75102
14 Jubilee Road Branch (Opening Date-30-07-2003)
Haque Market(1st Floor), 610/11, Jubilee Road, Chittagong.
Phone-031-628288, 627155, 840897,
Fax-031-628288
IP Phone (09612001122) Ext. 72301 ,72302,72303
8
Khatungonj Branch (Opening Date-12-12-1999)
Holding # 276-277, Ward # 35, Main Road,
Khatungonj, Chittagong.
Phone-031-636358, 624682, 624683,
Fax: 031-639014
IP Phone (09612001122) Ext. 71401, 71402
15 Comilla Branch (Opening Date-30-07-2009)
95/96 Chawk Bazar (2nd Floor), PO- Chawk Bazar,
P.S- Kotowali, Comilla.
Phone-081-61363, 081-61364,
IP Phone (09612001122) Ext. 73501, 73502
9
Roazarhat Branch (Opening date-24.11.2012)
A. Farida Shopping Complex, Kaptai Road,
Roazarhat, P.O & P.S-Rangunia, Chittagong
Phone-030-2556244, 2556245
IP Phone (09612001122) Ext. 78501,78502
16 Bibirhat SME/Krishi Branch (Opening Date-21-10-2010)
Fatikchari Collage Market, P.O-Fatikchari, P.S
Fatikchari, Upazilla- Fatikchari,Zilla- Chittagong.
Phone-03022-56321, 03022-56318
IP Phone (09612001122) Ext. 76001,76002
10 Lohagara Branch (Opening Date-18-06-2009)
“Mostofa City”,Lohagara, Chittagong.
Phone-0303456518, 0303456517, 01815-065948
IP Phone (09612001122) Ext. 73301 ,73302
17 Kachua SME/Krishi Branch (Opening Date-18-07-2010)
Talukder Super Market, Holding No-111
Ward No-08, Kachua, Chandpur.
Phone- 08425-56275,
IP Phone (09612001122) Ext. 74601 ,74602
11 GEC Moor Branch (Opening Date-25.11.2009)
358, Golden Plaza, CDA Avenue, East Nasirabad,
GEC Mour, Chittagong
Phone-0312555891, 0312555892, fax-2555893
IP Phone (09612001122) Ext. 74201 ,74202
18 Alanker More Branch (Opening date-27.10.2011)
PC Road, Holding No-68(A), Chittagong City Corporation,
P.O- Custom Academy,P.S- Pahartoly, Chittagong.
Phone-031-2773380,031-2773379, 031-2773378
IP Phone (09612001122) Ext. 77601,77602
12 NanuPur Branch (Opening Date-08.10.2009)
Nanupur Bazar, P.O-Nanupur, P.SFatikchari, Dist. Chittagong
Phone-044-37151939, 044-37151949
IP Phone (09612001122) Ext. 74001 ,74002
19 Chawk Bazar Branch (Opening Date-15-12-2010)
74/A, Chatteshawri Road, Mannan Tower(1st & 2nd foor),
P.O-ChawkBazar P.S.- Kotowali, Dist.-Chittagong
Phone-031-2867367, 2867368, 2867369
IP Phone (09612001122) Ext. 76301, 76302
13 Hajigonj Branch (Opening Date-19-09-2010)
Hajigonj Bazar, Ma Plaza, Degree College Road,
P.S.& P.O.- Hajigonj, Dist.-Chandpur.
Phone-08424-75129,08424-75130
IP Phone (09612001122) Ext. 75701,75702
20 Patherhat Branch (Opening Date-19-08-2009)
Patherhat, Noapara, Raozan, Chittagong.
Phone-031-2572315, 031-2572316
IP Phone (09612001122) Ext. 73801 ,73802
a n n u a l
21 Cox’s Bazar Branch (Opening Date-20.08.2009)
Evan Plaza (in front of Cox’s Bazar Pourashava)
Thana Road, Cox’s Bazar.
Phone- 0341-51822, 0341-51968
IP Phone (09612001122) Ext. 73901 ,73902
22 Feni Branch (Opening Date-18.09.2011)
Grand Huq Tower Ltd. (Near Diabetic Hospital)
Huq Villa, Mizan Road, P.S.-Kotwali, Dist.-Feni.
Phone-0331-74104,74103 Fax-0331-74117
IP Phone (09612001122) Ext. 76901 ,76902
23 Dewanhat Branch (Opening Date-04.10.2012)
700, DT Road, Dewanhat, P.O.-Pathantoly
P.S.-Double Mooring , Chittagong.
Phone-031-2515260, 2515261, 2515262
IP Phone (09612001122) Ext. 78001, 78002
24 Homna Branch (Opening Date-29.12.2011)
Homna Bazar, Homna
Phone-08025-54640, 54641
IP Phone (09612001122) Ext. 77801, 77802
re p o r t
2 0 13
26 Aturar Depo Branch (Opening Date-26-06-2013)
H S Tower, Holding No-1006,
(Beside CNG Petrol Pump), Hathazari Road
P.S-Panchlaish, Chittagong
IP Phone (09612001122) Ext. 79201,79202
27 Akhaura Branch (Opening Date-18-05-2013)
Sarker Plaza(opposite to Akhaura Poura Bhaban)
Holding No-3, Ward No-4, P.O. & P.S- Akhaura,
Brahmanbaria
IP Phone (09612001122) Ext. 78901,78902
28 College Road Branch (Opening Date-04-072013)
College Road, Debidwar, New Market, P.O & P.S
Debidwar ,Comilla
IP Phone (09612001122) Ext. 79401,79402
29 Maijdee Branch (Opening Date-18-08-2013)
Bismillah Tower, Holding No-428/B, Main Road,
Maijdee Bazar, P.S- Sudharam (Sadar),Noakhali
Phone-0321-71814, 71815
IP Phone (09612001122) Ext. 79501,79502
25 Shah Mohsen Aulia Branch (Opening Date-03.10.2012)
Hajee Imam Shopping Center, Battali
Anowara, Chittagong
Phone-01849-842400, 01967-786765
IP Phone (09612001122) Ext. 77901,77902
Barisal Division
1
Barisal Branch (Opening Date-25.09.2011)
Katpatty Road, Kotwali Model Thana, Holding No-1,
Ward No-9, Barisal Sadar, Barisal
Phone: 0431-61659, 0431-2177480
IP Phone (09612001122) Ext. 77301, 77302
245
Social Islami Bank Ltd.
Rajshahi Division
1
Rajshahi Branch (Opening Date-10-08-1996)
219, Shaheb Bazar, Main Road, Rajshahi.
Phone-0721-812317, 812452
Fax-0721-812317
IP Phone (09612001122) Ext. 70701, 70702
5
Shahjadpur SME/Krishi Branch
(Opening Date-03-10-2010)
Alhaj Rajjak Plaza, Monirampur Bazar, P.S &
P.O- Shahjadpur, Zilla-Sirajgonj
Phone- 07527-64049, 07527-64050
IP Phone (09612001122) Ext. 75801 ,75802
2
Bogra Branch (Opening Date-25-10-1998)
Bhandary Monjil, 776, Rangpur Raod, Borogola, Bogra.
Phone-051-65833, 63943, 61458
Fax- 051-63943
IP Phone (09612001122) Ext. 71101,71102
6
Dupchachia Branch (Opening Date-25-11-2010)
Jobeda Shopping Complex (2nd floor), C.O. Office
Bus Stand, Dupchachia, Bogra.
Phone- 05024-51250, 51251
IP Phone (09612001122) Ext. 76201 ,76202
3
Sirajgonj Branch (Opening Date-26-10-1998)
Zaman Complex, S.S. Road, Sirajgonj.
Phone-0751-63203, 64360,63203,
IP Phone (09612001122) Ext. 71201, 71202
7
Naogaon Branch (Opening Date-12.09.2011)
Naogaon Pourashava (Sonali Bank Road), Ward
No- 4, Vill- Qazipara, Naogaon.
Phone-0741-81112, 81113,
IP Phone (09612001122) Ext. 76701, 76702
4
Chandaikona Branch (Opening Date-19-12-2000)
Pabna Bazar, Raigonj, Sirajgonj.
Phone-07526-56122, 01715-805435
Fax-07526-56122
IP Phone (09612001122) Ext. 71601, 71602
8
Pabna Branch (Opening Date-05.10.2011)
Abdul Hamid Road, P.O & P.S- Pabna, Holding
No-0118-000, Ward No-02, Pabna.
Phone- 0731-51980, 0731-52080
IP Phone (09612001122) Ext. 77501 ,77502
Sylhet Division
246
1
Sylhet Branch (Opening Date-27-06-1996)
781, Karima Mansion, Dargah Gate, Sylhet-3100.
Phone-0821-711282, 0821-710485,
fax-0821-711282
IP Phone (09612001122) Ext. 70601,70602
2
South Surma Branch (Opening Date-23-07-2009)
Chandipool Baipass Road, (Opposite of South surma
Thana), P.O-Sylhet Sadar, P.S- South Surma, Sylhet.
Phone- 0821-2833431, 0821-2833432,
IP Phone (09612001122) Ext. 73401, 73402
3
4
Moulvibazar Branch(Opening date-10.10.2012)
183 Shamsher Nagar Road, Chowmohana,
Moulvibazar
Phone- 0861-63906, 63907,
IP Phone (09612001122) Ext. 78201,78202
Fenchugonj Branch(Opening date-11.10.2012)
Akul Shah Shopping City, General Osmani Sharak
(Thana road point), P.O. & P.S.- Fenchugonj, Sylhet
Mobile: 01711-040403
IP Phone (09612001122) Ext. 78301,78302
a n n u a l
re p o r t
2 0 13
Rangpur Division
1
Gobindagonj SME/Krishi Branch (Opening Date-22-08-2010)
Goleza Super Market (High way Road), Holding No
318, Ward No-6, Porosoba- Gobindagonj, P.O &
P.S -Gobindagonj, Zilla- Gaibandha
Phone-05423-75396, 05423-75397
IP Phone (09612001122) Ext. 75201, 75202
2
Dinajpur Branch (Opening Date-23-08-2010)
Lilir Moor, Holding No-1191/1150, Mouza
Pranonathpur, Ward No-3, P.O & P.S -Dinajpur
Dist.- Dinajpur.
Phone-0531-63692, 0531-61588,
IP Phone (09612001122) Ext. 75301, 75302
3
Rangpur Branch (Opening Date-13.09.2011)
Shah Bari Tower, Station Road (Guptapara),
House, No-286, Ward No-9, P.O-Rangpur,
P.S- Kotwali, Rangpur.
Phone-0521- 55183, 55184 (Fax)
IP Phone (09612001122) Ext. 76801, 76802
6
Jessore Branch (opening Date-19-12-2010)
36, Rail Road(Chowrasta), P.O.-Jessore
P.S.- Kotowali, Dist.-Jessore.
Phone-0421-64404
IP Phone (09612001122) Ext. 76401, 76402
7
Satkhira Branch (opening Date-20-12-2010)
London Plaza, Boro Bazar Road, P.S. & P.OSatkhira, Dist.- Satkhira.
Phone-0471-65078, 0471-65444 Fax- 0471-65444
IP Phone (09612001122) Ext. 76501, 76502
Khulna Division
1
Khulna Branch (Opening Date-20-06-1996)
22, Sir Iqbal Road, G.M. Baksh Tower, (Ground,
1st & 2nd floor) Khulna City Corporation, Khulna
Phone- & Fax-041-722133, 730533
IP Phone (09612001122) Ext. 70501,70502
2
PaikGacha Branch (Opening Date-06.12.2009)
Main Road, Paik Gacha, Khulna.
Phone- 04027 56678,
IP Phone (09612001122) Ext. 74301,74302
3
Monirampur SME/Krishi Branch (Opening
Date-08-08-2010)
Monirampur Bazar, Holding No-2145, Ward No
03, Monirampur, Zilla- Jessore.Phone-0422778400
IP Phone (09612001122) Ext. 74701, 74702
8
Bagerhat Branch (Opening date-29.11.2012)
13, Khan Jahan Ali Road, Bagerhat Pourashava,
Bagerhat.
Phone- 0468-64347, 0468-64348
IP Phone (09612001122) Ext. 78801, 78802
4
Noapara Branch (Opening Date-08-08-2010)
Noorbag Moor, P.O- Noapara, P.S.-Abhoynagar,
Dist. Jessore.
Phone-04222-72300
IP Phone (09612001122) Ext. 74801 ,74802
9
Patkelghata Branch (Opening date-22-05-2013)
Patkelghata Bazar, Ward No-05, P.O & P.S.Patkelghata, Satkhira.
IP Phone (09612001122) Ext. 79001,79002
5
Fakirhat SME/Krishi Branch (Opening Date-09-08-2010)
Mohammad Ali Market, Kathal Tolar More, Fakirhat
Bagerhat.
Phone-04655-56150
IP Phone (09612001122) Ext. 74901, 74902
10 Chougacha Branch (Opening date-30-06-2013)
Chougacha Bus stand (Dhoni Plaza), Ward No-01
P.O & P.S.- Chougacha, Jessore
IP Phone (09612001122) Ext. 79301, 79302
247
Social Islami Bank Ltd.
Corporate Office: City Center, 90/1, Motijheel C/A, Dhaka-1000
NOTICE OF THE 19TH ANNUAL GENERAL MEETING
Notice is hereby given that the 19TH ANNUAL GENERAL MEETING (AGM) of the Shareholders of SOCIAL ISLAMI BANK
LIMITED will be held on Saturday, the 31st May, 2014 at 10:30 a.m. at “Sunrise Community Center, Sunamgonj Road,
Pathantola, Sylhet” to transact the following business:
AGENDA
1.
To receive, consider and adopt the Directors’ Report and Audited Financial Statements of the Bank for the year ended
December 31, 2013 together with the reports of the Auditors’ thereon;
2.
To declare the dividend for the year 2013 as recommended by the Board of Directors;
3.
To elect Directors; and
4.
To appoint Auditors and fix their remuneration for the term until the next AGM.
By order of the Board
Date: May 14, 2014
(Md. Humayun Kabir, ACS)
Company Secretary
Notes:
(a) The ‘Record Date’ was on Thursday, the 24th April, 2014;
(b) Shareholders whose names appeared in the Members Register of the Company or in the Depository on the ‘Record Date’
will be eligible to attend, vote in the 19th AGM and receive entitled dividend;
(c) A Member who is entitled to attend and Vote at the Annual General Meeting (AGM) can appoint a Proxy to attend and vote
on his/her behalf. Forms of Proxy, duly stamped of Tk. 20/- (Taka twenty) only must be submitted at the Registered Office of
the Company at least 48 hours before the time fixed for the meeting i.e before 10.30 a.m on 29.05.2014;
(d) Admission into the venue of the AGM will be allowed on production of the Attendance Slip sent with the Notice as well as
verification of signature of Member(s) and/or Proxy holder(s);
(e) The registration for attending the AGM shall be started at 8.30 a.m. and
(f)
Annual Report along with Directors Report, Balance sheet, Audited Financial Statements and Proxy Forms are available at
the Bank’s website (www.siblbd.com).
(N.B: No gift or benefit in cash or kind other than in the form of Cash or Stock dividend shall be paid /offered to the holders of
equity securities at the time of AGM as per BSEC Circular No.SEC/CMMRCD/2009-193/154 dated 24.10.2013).
248
a n n u a l
re p o r t
2 0 13
Corporate Head Office: City Center, Level-19-22, 90/1 Motijheel C/A, Dhaka-1000
PROXY FORM
I/We............................................................................................................................................................................................
of (Address).................................................................................................................................................................................
....................................................................................................................................................................................................
...........................................................................................................................................................................................being
a member of SOCIAL ISLAMI BANK LIMITED and entitled to vote hereby appoint Mr./Mrs./Miss..............................................
............……...............................................as my proxy to attend and vote for me and on my behalf at the 19th Annual General
Meeting (AGM) of the Bank to be held on Saturday, 31st May, 2014 at 10:30 a.m. and at any adjournment thereof.
As witness my hand this ........................day of..........................................2014.
(Signature of the Proxy)
Date : .........................
Revenue
Stamp
Tk. 20.00
Signature of the Member
Folio No: …………………..
Authorized Signature
BO ID No:
No. of Shares held: .……………….
Notes:
1. A Member entitled to attend and vote at the General Meeting may appoint a Proxy who will also be a Member of the
company to attend and vote in his/her behalf. The Proxy Form, duly stamped, must be submitted at the Registered
Office of the Company not later than 48 hours before the time fixed for the meeting.
2.
Signature of the Member must be in accordance with the specimen signature registered with the Company or with the Depository.
....................................................................................................................................................................................................
Registered Office: 90/1, City Center, Motijheel C/A, Dhaka-1000
ATTENDANCE SLIP
I hereby record my presence at the 19th Annual General Meeting (AGM) of Social Islami Bank Ltd. at “Sunrise Community
Center”, Sunamgonj Road, Pathantola, Sylhet on Saturday, the 31st May, 2014 at 10:30 a.m.
Name of Member/Proxy: ……..............................................................................................………..........................……….......
Registered Folio/BO No: ...........................................….....….............................holding of....…..................…............Ordinary
Shares of Social Islami Bank Ltd.
Signature of Member/Proxy
(Members are requested to handover the Attendance Slip at the entrance of the meeting hall.)
249

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