Rationale of the Cover - Prime Bank Limited Bank Annual... · Bangladesh Bank, Bangladesh ......

Rationale of the Cover

Prime Bank has journeyed far and long on the eventful

paths in the last two decades.

It has achieved much and has a firm resolution to

achieve more in the future.Therefore, it stands TALL

& STRONG, ensures consistency in performance

and portrays firm current position along with

readiness to march forward with strong COMMITMENT

& DETERMINATION.

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A n n uA l R e p o R t 2 0 1 4

Letter of Transmittal 03Notice of the 20th Annual General Meeting 04Standard Disclosure Index 05Corporate Governance Disclosure Checklist 08Vision 10Mission 11Corporate Philosophy 12Strategic Priority 13Ethics, Integrity and Trust 14Green Banking 14Statement Regarding Forward Looking Approach 15Corporate Profile 16Milestones 18Board of Director’s Profile 20

Awards and Recognition 175Media Highlights 180Products and Services 182Sustainability Report 2014 - GRI G4 187Prime Bank Foundation (Corporate Social Responsibility) 223

Stakeholders’ Information 258(a) Distribution of Shareholdings in 2014 258(b) Shares held by Directors in 2014 258(c) Redressal of Investors Complaint 259

Financial Highlights-Group & PBL 260Financial Highlights - PBL 261Graphical Presentation - PBL 262Stock Performance - Market Price Information 264Segment Analysis 265Horizontal/Vertical Analysis-Key Financial Data & Key Ratios - PBL 266Statement of Value Added and its Distribution 268Economic Value Added Statement 269Economic Impact Report 269Maintaining Capital Adequacy 270Maintaining Liquidity 271Payment of Dividends 272Disclosure for Non Performing Assets 273Financial Calendar 2014 274Glimpses of 19th AGM 275

Independent Auditor’s Report to the Shareholders 278Consolidated Balance Sheet 280Consolidated Profit and Loss Account 282Consolidated Cash Flow Statement 284Consolidated Statement of Changes in Equity 286Balance Sheet of PBL 287Profit and Loss Account 289Cash Flow Statement 291Statement of Changed in Equity 293Notes to the Financial Statements 294Financial Statements - OBU 391Financial Statements - PBIL 401Financial Statements - PBSL 407Financial Statements - PECL, Singapore 413Financial Statements - PBL Exchange (UK) Ltd. 419Financial Statements - PBL Finance (Hong Kong) Ltd. 425Some PBL Activities during 2014 430Gallery of Some Significant Events in 2014 432Branch Network 433Glossary 439

Composition of Board and Committees 29From the office of the Chairman 30Managing Director & CEO’s Roundup 34Director’s Report 38Report on the Activities of the Audit Committee 47Report of Prime Bank Shari’ah Supervisory Committee 49CEO/CFO’s Declaration to the Board 50Corporate Governance Report 52Green Banking Report 80Corporate Management 86Corporate Organogram 99Group Corporate Structure 100Management Discussion & Analysis 101Report on Risk Management by Chief Risk Officer 138Risk Management Report 140Market Discipline Disclosure on Risk Based Capital (Basel-II) 154

Table ofcontents

01About Prime Bank

03Other Information

04Stakeholders’ Information

05Financial Statements

02Corporate Governance

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

Dear Sir(s),

Annual Report of Prime Bank Limited for the year ended December 31, 2014

Enclosed please find a copy of the Annual Report of Prime Bank Limited along with the Audited Financial Statements at the position of December 31, 2014. The Report includes Income Statements, Cash Flow Statements along with notes thereon of Prime Bank Limited, its Subsidiaries namely Prime Exchange Co. Pte. Limited, Singapore, PBL Exchange (UK) Limited, PBL Finance (Hong Kong) Limited, Prime Bank Investment Limited and Prime Bank Securities Limited.

This is for your kind information and record please.

Best regards.Yours sincerely,

Mohammed Ehsan HabibCompany Secretary

Letter ofTransmittal

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Notice of the TwentiethAnnual General Meeting

Notice is hereby given to all Members of Prime Bank Limited that the 20th Annual General Meeting of the Company will be held on Monday, 30 March 2015 at 11:00 a.m. in the KIB Complex, Krishi Khamar Sarak, Farmgate, Dhaka-1215 to transact the following business:

AGENDA1. To receive, consider and adopt the Directors’ Report and Audited Financial Statements of the Bank for the year

ended 31st December 2014 together with the Auditors’ Report thereon. 2. To declare dividend for the year ended 31st December 2014 as recommended by the Board of Directors.3. To elect/re-elect Directors.4. To appoint Auditors for the term until the next Annual General Meeting and fixing their remuneration.

By order of the Board of Directors

February 26, 2015 Mohammed Ehsan Habib Company Secretary Notes:a. The ‘Record Date’ shall be Tuesday, March 10, 2015. Shareholders whose names appear in the Members

Register of the Company and/or in the Depository on the Record Date will be eligible to attend the meeting and qualify for dividend.

b. The Board of Directors has recommended @ 15% Cash Dividend for the year 2014.

c. A Member eligible to attend and vote at the Annual General Meeting may appoint a proxy to attend and vote on his/her behalf. Duly stamped Proxy Form must be submitted to Share Department of the Company at least 72 hours before the scheduled Meeting starting at 11.00 a.m. Proxy Form will be available with the Annual Report, Bank’s website and at the Share Department of the Bank.

d. Shareholders and proxies are requested to record their entry in the Annual General Meeting well in time.

e. Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2014 together with the Auditors’ Report thereon shall be available on bank’s website from 16th March 2015 onward.

f. Hon’ble Members are requested to update the particulars of their Bank Account, change of address and BO Accounts with 12 Digits Taxpayer’s Identification Number (e-TIN) through Depository Participants (DP) before the “Record Date”. If the Members fail to update their e-TIN before the “Record Date” Income Tax at source will be deducted from payable Dividend @15% (fifteen percent) instead of @10% (ten percent) as per amended Income Tax Ordinance 1984 under Section 54.

N.B: No gift or benefit in cash or kind shall be paid/offered to the Shareholders in the 20th AGM as per BSEC Directive No. SEC/CMRRCD/2009-193/154 dated 24.10.2013.

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StandardDisclosure Index

PARTICULARS PAGE NO.

Corporate Objectives, Values & Structure Vision and Mission 10,11Overall strategic objectives 13Core values and code of conduct/ethical principles 14Profile of the Company 16-17Director’s profiles and their representation on Board of other companies & Organization Chart 20-27, 99-100, 368-370

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 30-37, 101-139

Description of the performance of the various activities / products / segments of the company and its group companies during the period under review. (Weightage to be given for pictorial / graphical / tabular presentations used for this purpose)

34-46, 80-85, 101-139, 258-273

A brief summary of the Business and other Risks facing the organization and steps taken to effectively manage such risks

138-173

A general review of the future prospects/outlook. 32-33, 36-37

Information on how the company contributed to its responsibilities towards the staff (including health & safety)

37, 41, 128-131, 208-211 (GRI)

Information on company's contribution to the national exchequer & to the economy 268-269Sustainability Reporting

Social Responsibility Initiatives (CSR) 32, 37, 224-256Environment related Initiatives 37, 80-85, 197-207 (GRI)Environmental & Social Obligations 187-222 (GRI)Integrated Reporting 187-222 (GRI)

Appropriateness of Disclosure of Accounting policies and General DisclosureDisclosure of adequate and properly worded accounting policies relevant to assets, liabilities, Income and expenditure in line with best reporting standards.

44-45, 294-314

Any Specific accounting policies 295

Impairment of Assets 299

Changes in accounting policies/Changes in accounting estimates 295

Segment InformationComprehensive segment related information bifurcating Segment revenue, segment results and segment capital employed

101-118, 265, 387Availability of information regarding different segments and units of the entity as well as non-segmental entities/units

Segment analysis of

- Segment Revenue

101-118, 265, 387

- Segment Results

- Turnover

- Operating profit

- Carrying amount of Net Segment assets

Financial Statements (Including Formats)

Disclosures of all contingencies and commitments 281, 288, 345-347

Comprehensive related party disclosures 360-361

Disclosures of Remuneration & Facilities provided to Directors & CEO 44, 66, 69-71, 353-354

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Statement of Financial Position / Balance Sheet and relevant schedules

278-429

Income Statement / Profit and Loss Account and relevant schedules

Statement of Changes in Equity / Reserves & Surplus Schedule

Disclosure of Types of Share Capital

Statement of Cash Flow

Consolidated Financial Statement (CFS)

Extent of compliance with the core IAS/IFRS or equivalent National Standards

Disclosures / Contents of Notes to Accounts

Information about Corporate Governance

Board Of Directors, Chairman And CEO 20-27, 52-68

Audit Committee (Composition, role, meetings, attendance, etc) Internal Control & Risk Management

29, 52-79

Ethics And Compliance 12, 14, 31-79

Remuneration and other Committees of Board 29, 55, 69-71

Human Capital 41, 128 -131, 208-211 (GRI)

Communication To Shareholders & Stakeholders 274, www.primebank.com.bd

Information available on website

Other information 191-195 (GRI)

Management Review And Responsibility 101-137

Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports 55-56

Any other investor friendly information 274

Risk Management & Control Environment

Description of the Risk Management Framework

138-153Risk Mitigation Methodology

Disclosure of Risk Reporting

Stakeholders InformationDistribution of shareholding (Number of shares as well as category wise, e.g Promoter group, FII etc)

258-259, 343

Shares held by Directors/Executives and relatives of Directors/Executives 258, 343

Redressal of investors complaints 274

Graphical/ Pictorial Data:

Earnings per Share

262-263

Net Assets

Stock Performance

Shareholders’ Funds

Return on Shareholders Fund

Horizontal/Vertical Analysis including following

Operating Performance (Income Statement)

- Total Revenue

41-44, 266-267

- Operating profit

- Profit Before Tax

- Profit after Tax

- EPS

Statement of Financial Position (Balance Sheet)

Shareholders Fund

41-44, 266-267 Property Plant & Equipment

Net Current Assets

Long Term Liabilities/Current Liabilities

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Profitability/Dividends/ Performance and Liquidity Ratios

Gross Profit Ratio

266-267

Earning before Interest, Depreciation and Tax

Price earning ratio

Current Ratios

Return on Capital Employed

Debt Equity Ratio

Statement of Value Added and Its Distribution

Government as Taxes

268-270

Shareholders as dividend

Employees as bonus/remuneration

Retained by the entity

Market share information of the Company’s product/services

Economic value added

Additional DisclosuresFor ExampleHuman Resource AccountingAny other good additional disclosures ( Independence certification Eg GNV / GRI )

131, 223-256, 187-221 (GRI)

Specific DisclosuresDisclosure of Ratings given by various rating agencies for Instruments issued by /of Bank. For eg. FD, CD, Tier I perpetual Bonds

261

Details of Advances portfolio Classification wise as per the direction issued by the central bank of the respective countries

325-328

Disclosure for Non Performing assets- Movements in NPA- Sector-wise breakup of NPA- Movement of Provisions made against NPA- Details of accounts restructured as per regulatory guidelines

338-340

Maturity Pattern of Key Assets and Liabilities (ALM) 388-389

Classification and valuation of investments as per regulatory guidelines/Accounting Standards 365

Business Ratio/Information - Statutory Liquidity Reserve (Ratio)- Net interest income as a percentage of working funds / Operating cost Efficiency ratio- Return on Average Asset- Cost / Income ratio- Net Asset Value Per Share- Profit per employee- Capital Adequacy ratio- Operating profit as a percentage of working funds- Cash Reserve Ratio / Liquid Asset ratio- Dividend Cover ratio- Gross Non-Performing assets to gross advances/Non-Performing Loans (Assets) to Total Loans (Assets)

41-44, 266-267

Details of credit concentration / Sector vise exposures 326-327

The break-up of ‘Provisions and contingencies’ included in the Profit and Loss Account 356

Disclosure under regulatory guidelines 154-173

Details of Non-Statutory investment portfolio 320-323, 365

Disclosure in respect of assets given on operating & finance lease 323-327

Disclosures for derivative investments 319-323

Bank's Network : List of Centers or Branches 433-438

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Corporate GovernanceDisclosure Checklist


1. BOARD OF DIRECTORS, CHAIRMAN AND CEO1.1 Company's policy on appointment of directors disclosed. 521.2 Adequate representation of non executive directors i.e. one third of the board, subject to a

minimum of two52

1.3 At least one independent director on the board and disclosure/affirmation of the board on such director’s independence.

52

1.4 Chairman to be independent of CEO 521.5 Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure

of independence of Non Executive Directors55

1.6 Existence of a scheme for annual appraisal of the boards performance and disclosure of the same.

55

1.7 Disclosure of policy on annual evaluation of the CEO by the Board. 551.8 Disclosure of policy on training (including details of the continuing training program) of

directors and type and nature of training courses organized for directors during the year Existence of a scheme for annual appraisal of the boards performance

55

1.9 At least one director having thorough knowledge and expertise in finance and accounting to provide guidance in the matters applicable to accounting and auditing standards to ensure reliable financial reporting.

56

1.10 Disclosure of number of meetings of the board and participation of each director (at least 4 meetings are required to be held)

69

1.11 Directors issue a report on compliance with best practices on Corporate Governance that is reviewed by the external auditors

73

2. VISION / MISSION AND STRATEGY2.1 Company’s vision / mission statements are approved by the board and disclosed in the

annual report.57

2.2 Identification of business objectives and areas of business focus disclosed 572.3 General description of strategies to achieve the company's business objectives 58

3. AUDIT COMMITTEES3.1 Appointment and Composition

3.1.1 Whether the Audit Committee Chairman is an independent Non – Executive Director and Professionally Qualified

58

3.1.2 Whether it has specific terms of reference and whether it is empowered to investigate / question employees and retain external counsel

58

3.1.3 More than two thirds of the members are to be Non Executive Directors 583.1.4 All members of the audit committee to be suitably qualified and at least one member

to have expert knowledge of finance and accounting.58

3.1.5 Head of internal audit to have direct access to audit committee 583.1.6 The committee to meet at least four times a year and the number of meetings and

attendance by individual members disclosed in the annual report.70

3.2 Objectives & Activities3.2.1 Statement on Audit Committee’s review to ensure that internal controls are well

conceived properly administered and satisfactorily monitored60

3.2.2 Statement to indicate audit committees role in ensuring compliance with Laws, Regulations and timely settlements of Statutory dues

60

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3.2.3 Statement of Audit committee involvement in the review of the external audit function: � Ensure effective coordination of external audit function � Ensure independence of external auditors � To review the external auditors findings in order to be satisfied that appropriate

action is being taken � Review and approve any non audit work assigned to the external auditor and

ensure that such such work does not compromise the independence of the external auditors.

� Recommend external auditor for appointment/ reappointment

61

3.2.4 Statement on Audit committee involvement in selection of appropriate accounting policies that are in line will applicable accounting standards and annual review.

61

3.2.5 Statement of Audit Committee involvement in the review and recommend to the board of directors, annual and interim financial releases

62

3.2.6 Reliability of the management information used for such computation 624. INTERNAL CONTROL & RISK MANAGEMENT

4.1 Statement of Director's responsibility to establish appropriate system of internal control 624.2 Narrative description of key features of the internal control system and the manner in which

the system is monitored by the Board, Audit Committee or Senior Management.62-63

4.3 Statement that the Director's have reviewed the adequacy of the system of internal controls 624.4 Disclosure of the identification of risks the company is exposed to both internally & externally 644.5 Disclosure of the strategies adopted to manage and mitigate the risks 64

5. Ethics and Compliance5.1 Disclosure of statement of ethics and values, covering basic principles such as integrity,

conflict of interest, compliance with laws and regulations etc..65

5.2 Dissemination / communication of the statement of ethics & business practices to all directors and employees and their acknowledgement of the same

65

5.3 Board’s statement on its commitment to establishing high level of ethics and compliance within the organization

65

5.4 Establishing effective anti-fraud programs and controls, including effective protection of whistle blowers, establishing a hot line reporting of irregularities etc.

65

6. REMUNERATION COMMITTEE6.1 Disclosure of the charter (role and responsibilities) of the committee 666.2 Disclosure of the composition of the committee (majority of the committee should be non-

executive directors, but should also include some executive directors)66

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

66

6.4 Disclosure of number of meetings and work performed 666.5 Disclosure of Remuneration of directors, chairman, chief executive and senior executives. 66

7. HUMAN CAPITAL7.1 Disclosure of general description of the policies and practices codified and adopted by

the company with respect to Human Resource Development and Management, including succession planning, merit based recruitment, performance appraisal system, promotion and reward and motivation, training and development, grievance management and counselling.

66-67

7.2 Organizational Chart 99

8. COMMUNICATION TO SHAREHOLDERS & STAKEHOLDERS8.1 Disclosure of the Company's policy / strategy to facilitate effective communication with

shareholders and other stake holders67

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

68

9. ENVIRONMENTAL AND SOCIAL OBLIGATIONS9.1 Disclosure of general description of the company's policies and practices relating to social

and environmental responsibility of the entity68

9.2 Disclosure of specific activities undertaken by the entity in pursuance of these policies and practices

68

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To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.

O U R V I S I O N

11

To build Prime Bank Limited into an efficient, market

driven, customer focused institution with good

corporate governance structure.

Continuous improvement of our business policies,

procedures and efficiency through integration of

technology at all levels.

O U R M I S S I O N

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CorporatePhilosophy

Constantly seeking to improve performance by aligning our goals with stakeholders’ expectations. Because we value them.

FOR OUR CUSTOMERSTo provide the most courteous and efficient service in every

aspect of its businessTo be innovative in the development of new banking products

and services

FOR OUR EMPLOYEESBy promoting their well-being through attractive

remuneration and fringe benefitsBy promoting good staff moral through proper staff training

and development,And provision of opportunities for career development

FOR OUR SHAREHOLDERSBy forging ahead and consolidating its position as a stable

and progressive financial institutionBy generating profits and fair return on their investment

FOR OUR COMMUNITYBy assuming our role as a socially responsible corporate

citizen in a tangible mannerBy adhering closely to national policies and objectives

thereby contributing towards the progress of the nation………upholding ethical values and best practices

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StrategicPriority

� Maintain strong capital base by expediting borrowers’ rating, concentrating on lending portfolio having lower capital charge, strengthening Internal Capital Adequacy Assessment Process (ICAAP)

� Continuation of diversification of credit portfolio in corporate exposure, emphasize on retail, SME and agricultural loan, address gender issue by providing loans to women entrepreneurs in SME segment and emphasize on geographical diversification.

� Improvement of deposit mix by maintaining efficient deposit mix, increase share of low cost and no cost deposit in total deposit, increase non-funded business including cash management.

� Maintain adequate level of liquidity through minimizing asset-liability mismatch and recovery of past due loans. � Diversification of products and services by introducing IT based innovative products and alternate delivery

channels. � Increase share of inward remittance by expansion of existing exchange houses, opening of new exchange

houses, increase in domestic network for the beneficiaries through strategic alliance, development of new products for the NRBs

� Increase non-funded (not-interest fee based) income � Extend banking services to un-banked and under banked people for inclusive growth. � Innovative approach in dealing with complex and large transactions/fund requirements with strategic alliance. � Improve internal governance through strengthening good corporate cultures, motivation, training and

supervision as per KPIs in all levels of management. � Strengthening internal control and monitoring through centralisation � Conduct BPR (Business Process Re-engineering) in different functional areas to improve efficiency and bring in

required structural change. � Improvement of IT infrastructure in order to develop new IT based products and services. � Integrated marketing effort by creating a customer-orientated relationship management culture, for brand strategy

development, Brand Repositioning and extensive marketing for branding “Hasanah” investment and card. � Development in Human Resource Management System to motivate and retain the Human Resources and

transform Human Resources to Human Capital through proper training in every aspects of working area. � Cost optimization at all levels of operation by ensuring budgetary control. � Expansion of activities related to Corporate Social Responsibility and Green Banking.

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Ethics, Integrityand Trust

Banking deals with public money where Ethics, Integrity and Trust is utmost important. Prime Bank upholds these principles in every section by its management and customer service. The following are the key principles of Employee Codes of Ethics and Business Conduct: � Provide service to customers with

uncompromising integrity, utmost respect, unwavering responsibility and dedicated citizenship

� Protect privacy and confidentiality of customer information

� Prevent money laundering and fraud

� Demonstrate workplace respect

GreenBanking

The environmental degradation needs to be tackled in a concerted manner by all. Society demands that business also take responsibility in safeguarding the planet. As a responsible Corporate Citizen, Prime Bank reinforced its Green Banking initiatives.

Trust

IntegrityEthics

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Statement Regarding ForwardLooking Approach

The Annual Report contains some forward looking statements regarding the business environment and its likely effect in the financial conditions of PBL. Statements which are not historical facts including statement of PBL’s belief, expectation are forward looking statements. Words such as plan, anticipate are forward looking statements. Forward looking statement involves inherent risks and uncertainties. Some factors may actually cause actual results to differ and some may significantly deviate from the forward looking approach. Some of the factors that may affect the business environment are given below:

� Changes in the general economic condition resulting from natural calamities and political disturbances

� Changes in government policy issues

� Increase in Tax, VAT on banking services

� 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 result to volatility in Foreign Exchange Market

� International embargo/unrest in Middle-East countries may affect remittances and trade

� Risk management of lending portfolio often requires stress testing which is based on sophisticated mathematical tools and cannot solely be dependent on existing MIS. The level of technology in banking industry is yet to acquire that sophistication.

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CorporateProfile

Established in April, 1995 by a group of visionary entrepreneurs conceive an idea of floating a commercial bank with different outlook. Prime Bank is known for its superior service quality, brand image, strong corporate governance and corporate culture. Committed for excellence, Prime Bank is a top-tier bank in Bangladesh and reputed among regulators as distinctly ‘compliant’ and among customers as agile and responsive to change. A Bank aligned to its vision, mission, values and strategic priorities.

Business Strategy

The bank is driven by key business areas, namely Corporate Banking, SME & Retail and Islamic Banking. These are competently supported by other functions such as Operations, IT, R&D, Marketing, HR, Procurement, Risk Management, Compliance, Internal Audit and Financial Administration etc. In addition, the global subsidiaries- Prime Exchange Co. Pte Ltd. Singapore, PBL Exchange (UK) Limited, PBL Finance (Hong Kong) Limited; and our local subsidiary Prime Bank Investment Limited (PBIL) and Prime Bank Securities Limited. High on our list of strengths are our growing customer base, our highly trained and motivated staff, our superior technological platform, IT driven processes and our highly developed work ethic and culture. Prime Bank has always been a very customer centric Bank maintaining the highest levels of engagement with its customers. This was reinforced by the highly visible initiatives taken to make our services more accessible and convenient. Our channel expansion and subsequent presence within top tier supermarket chains has significantly enhanced accessibility and convenience in respect of the customer. Likewise, our upgraded Internet banking platform is extremely user friendly, a factor that will aid in our efforts to promote its usage among most of our customers. Both of these initiatives have made transacting business with Prime Bank much easier. We are also reinforcing the ‘personal touch’ through more optimal staff management and deployment whilst centralization and automation frees up time at our branches to better serve customers. Our footprint in the country has widened considerably this year with 140 branches and 160 ATMs plus on

line banking services. The Bank has also strengthened infrastructure and enhanced productivity by maximizing our IT capabilities and upgrading our risk management system.

Strong Deposit Base

We work for increasing savings to contribute towards country’s economic development. We have introduced a new deposit product named My First Account for students that received wide response of the young generation. The Bank always stressed upon maintaining efficient deposit mix. Customer deposits of the bank have been growing substantially. The growth was supported by branch network, innovative IT based products and superior services along with liability campaigns carried out throughout the year.

Capital Adequacy Ratio

In maintaining adequate capital against overall risk exposure of the Bank, our guiding philosophy has been to strengthen risk management and internal control. PBL’s regulatory capital as on December 31, 2014 stood at Tk. 27,266.20 million. Whereas, the Capital Adequacy Ratio (CAR) was 12.64% under Basel-II, as per Central Bank’s minimum capital requirement of 10.00%.

Economic Capital for Efficient Asset Management

In the wake of the global credit crisis, it is very important to implement the concept of economic capital, which will act as a safety cushion for the bank. Still reeling from the effect of unanticipated losses, a large number of banks are now struggling to conserve and manage capital. In 2014, credit risks continued to be ferment and fuelled in driving up market volatility. In such a market, the capability to manage the banking business in a risk-sensitive Economic Capital framework becomes necessary. Bankers have had no other choice but to reallocate or even reduce their portfolios. We are carefully considering the potential unexpected losses, thus bringing up the concept of economic capital that is associated with each individual activity to minimize the risks of the Balance Sheet and safeguard the interest of the stakeholders.

17

ALM

We continued to have a firm grip on the levers of risk, cost and investment, and using our balance sheet strength to increase the financing support to our customers. Deposit increased by Tk.2,931 million during 2014 with an impressive growth rate of 1.45 percent. We maintained a well-diversified Loans & Advances portfolio and at the same time continued to take the conservative approach to manage the balance sheet, maintain a strong liquidity position and keep a watchful eye on asset quality given the uncertainties that remain in the external environment. Retail deposits were mobilized by providing competitive and superior products while corporate deposits have been collected with corporate deposit campaign. Thus, high cost of fund been managed with adequate focus on no and low cost fund. Thus, sector wise the Bank maintained optimum exposure with due concentration on SME and Retail assets. The Bank adequately diversified its investment through project finance, SME and Retail. Funds under Corporate, SME and Retail stood at Tk.114.30 billion, 20.05 billion and 12.58 billion respectively.

Environment-friendly Banking

We have incorporated sustainability principles into day-to-day activities of the bank. Our aim is to do best to ensure that the credits we extend to our customers are utilized for environmentally sound and sustainable purposes. As per Environmental and Social Risk Policy, i.e. “Environmental Blueprint” of the bank approved by the Board, all business units must recognize the social concerns and impact on the environment caused by their customers before taking business decisions. Green banking considers all the social and environmental factors along with financial priorities with an aim to protect the environment as well as to foster the economic development in a more environment friendly way. It covers a multitude of areas from a bank being environmentally friendly to how their money is invested. To reduce carbon emission, green house effects, dependency on traditional energy, natural gas as well as reduce the environmental degradation, PBL has established a separate cell called “Green Financing Cell” for financing under refinance scheme of Bangladesh Bank to set up of Effluent Treatment Plant (ETP), Bio-gas Plant, Solar Energy (i.e. Solar panel, Solar home System, Solar mini Grid, Solar irrigation pumping system, Solar PV Assembly plant), Water Electricity Plant, PET bottle reprocessing plant, Hybrid Hoffman Kiln (HHK) etc. The Green Banking Cell (GBC) have been formed with the task of developing policies, products, planning, reporting to management

and Bangladesh Bank and overseeing the overall green financing activities of the bank.

Our Strategic Priorities

Sustainable business growth, dynamic and talented human capital driven by values, excellent risk management, and involvement of mid-level management in decision-making process will surely command some key strength for Prime Bank. We believe that, as long as we adhere to the right development strategy, take pro-active actions and forge ahead determinedly, 2015 will be full of hopes and harvests. Few of the major tactical and strategic moves that have been chalked out to drive for the current year are:

� Diversify loan portfolio to avoid excessive concentration to particular sectors as well as to invest funds in the productive sectors.

� Grow business in SME and Retail portfolio at least by 40%.

� Implement Economic capital framework to derisk the Balance Sheet for the potential associated unexpected losses.

� Greater emphasis to serve unbanked and under-banked population of the country.

� Allocation of capital through customer account review and transaction analysis upon determination of Risk Adjusted Return on Capital.

� Strengthen Information Technology to ensure security of technology and enable safer banking service to customers.

� Monitor and strengthen recovery drive to bring down the NPL below 3% to maintain asset quality at standard level.

� Formation of Head line Business Banking Team to provide priority service to our valued customers to ensure better services with maximum satisfaction for more business.

Our Commitments

PBL is committed to deliver value to its stakeholders. PBL will continue to provide effective and competitive financials solutions and services to its customers. It will continue to enhance the shareholders’ value through consistent financial performance and efficient capital management. PBL will foster a strong performance and learning culture that allows the development and talents of its employees so that they can effectively play the role of PBL Brand Ambassador.

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MILESTONES DATE

Memorandum and Articles of Association signed by the Sponsors 05.02.1995

Incorporation of the Company 12.02.1995

Certificate of Commencement of Business 12.02.1995

License issued by Bangladesh Bank 20.02.1995

License issued for opening the first Branch, Motijheel 08.04.1995

Formal launching of the Bank 17.04.1995

Commencement of business from the Motijheel Branch 17.04.1995

Commencement of Islamic banking business from IBB, Dilkusha 18.12.1995

Initial Public Offerings (IPO)Publication of Prospectus Subscription Opened Subscription Closed

29.08.199909.09.199922.09.1999

Listed with Chittagong Stock Exchange Limited 15.11.1999

Listed with Dhaka Stock Exchange Limited 27.03.2000

Trading of Shares on Dhaka Stock Exchange Limited 29.03.2000

Trading of Shares on Chittagong Stock Exchange Limited 29.03.2000

Dividend declared in the 5th AGM (First after the IPO) 14.03.2000

Registered as Merchant Banker with the Securities and Exchange Commission 29.03.2001

M I L E S T O N E S

19

License issued from the Bangladesh Bank as Primary Dealer 11.12.2003

Registered as Depository Participant of CDBL 29.03.2004

Trading of Shares started in Demat Form in Stock Exchanges 15.06.2004

Completion of 10 years of Service 17.04.2005

Agreement with Temenos for Core Banking Software Temenos T24 30.06.2005

Incorporation of Prime Exchange Co. Pte. Ltd., Singapore 06.01.2006

Prime Exchange Co. Pte. Ltd., Singapore formally started business 08.07.2006

Opening of first Off-shore Banking Unit at DEPZ, Savar, Dhaka 15.03.2007

Launching of ATM 11.03.2008

Launching of Internet Banking 01.08.2009

Opening of first SME Centre 04.08.2009

Recipient of SAFA Best Bank Award 05.12.2009

Incorporation of PBL Exchange (UK) Ltd. 19.11.2009

Obtained Permission for issuance of Subordinated Bond for Tk. 2,500 Million for Basel-II Compliance

31.12.2009

Incorporation of PBIL 28.04.2010

Incorporation of PBSL 29.04.2010

Obtained permission for issuance of Rights Share 25.05.2010

Launching of SMS Banking 25.08.2010

Ground breaking of Prime Tower 22.09.2010

Change of Face Value and Market Lot of Shares of PBL 06.01.2011

Launching of Phone Banking 02.08.2011

Commencement of business of PBL Finance (Hong Kong) Ltd. 01.09.2011

Launching of Mobile Banking 25.03.2012

Launching of Biometric Smart Card-Prime Cash 20.05.2012

Recipient of ICMAB Best Corporate Award-2012 15.01.2013

Launching of Prime Bank Nursing Institute 13.04.2013

Launching for the first time in Bangladesh the JCB Card’s online acquiring service 20.07.2013

Launching of Islamic Credit Card 24.07.2013

Launching of JCB Cards in Bangladesh 04.06.2014

Launching of Premium Banking Service 'Monarch’ 27.10.2014

Recipient of “14th ICAB National Award for Best Presented Annual Reports 2013” (Category: Private Sector Banks including Co-operative Banks) – 1st Prize

30.11.2014

Recipient of “14th ICAB National Award for Best Presented Annual Reports 2013” (Category: Corporate Governance Disclosures) – 2nd Runner Up

30.11.2014

Recipient of SAFA “SAARC Anniversary Awards for Corporate Governance Disclosures 2013” - Winner

04.12.2014

Recipient of SAFA “Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures 2013” – 2nd Runner Up

04.12.2014

20


Board ofDirectors’ Profile

Mr. Azam J Chowdhury current Chairman of the Board of Directors is an entrepreneur and leading industrialist of the country. He had been Chairman of the Board in the past also on more than five occasions.

Mr. Chowdhury is Chairman of East Coast Group (ECG), a diversified conglomerate engaged in Oil and Energy business for more than three decades. Besides, he is the Chairman of The Consolidated Tea & Lands Company Bangladesh Limited (formerly James Finlay Limited) and Bangladesh Trade Syndicate Limited, an associate of TNT Global Express Company.

Mr. Chowdhury is also the Managing Director of MJL Bangladesh Limited, a listed company and affiliate of Exxon Mobil Corporation, USA actively engaged in expansion of Fuel & Energy sector of the country. In addition, he is Vice President of Bangladesh Energy Companies Association and a Member of Advisory Council of the Government, People’s Republic of Bangladesh on Power, Energy & Mineral Resources.

Mr. Chowdhury is also elected President of Bangladesh Ocean Going Ship Owner’s Association (BOGSOA) and Director of Central Depository Bangladesh Limited (CDBL).

In recognition of his repute and contribution, Mr. Chowdhury has earned acclamation both home and abroad and is currently Honorary Consulate of Hungary in Bangladesh.

He is a keen Golfer and achieved several laurels in this sporting arena.

AzAm J ChowdhuryChairman

Khandker Mohammad Khaled, former Chairman and present Vice Chairman of Prime Bank Limited is a BUET graduate in Mechanical Engineering. After graduation he joined the then Water & Power Development Authority (WAPDA), now Bangladesh Water Development Board (BWDB). After having served BWDB for thirteen years, he started his own business in 1975 establishing Greenland Engineers & Tractors Company Limited (GETCO).

He is currently Chairman & Managing Director of GETCO Telecommunications Limited, GETCO Agro Vision Limited and GETCO Limited. He is Vice- Chairman and Member, Board of Governor, Prime Asia University. Besides, he is associated with numerous Chamber Bodies and Societies in different capacities, prominent among which are Institute of Engineers, Bangladesh, National Heart Foundation of Bangladesh, Diabetic Association of Bangladesh, AMCHAM, Bangladesh, Bangladesh Railway Spares and Accessories Suppliers’ Association, International WHO’s WHO Historical Society and 62-Engineers’ Club. A very widely traveled person, Mr. Khaled is an amiable personality continuously contributing to the social and educational development activities of the country.

He is also a Member of the Audit Committee and Risk Management Committee of the Board of Directors of Prime Bank Limited.

KhAndKer mohAmmAd KhAled

Vice Chairman

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Mr. M. A. Khaleque is the founder, Sponsor Director, and incumbent Vice Chairman of the Board of Directors of Prime Bank Limited. During the last 27 years, he has set an enviable standard by establishing high end institutions ranging from banks, non-banks, life and general insurance in the country. Mr. Khaleque’s name has now become synonymous with some of the finest institutions having high professional outlook and vision in the nation. Spanning over a period of around 22 years, success came as a matter of choice through Prime Finance & Investment Ltd, Fareast Islami Life Insurance Company Ltd., Prime Insurance Ltd., Fareast Finance & Investment Ltd., PFI Securities Ltd., Fareast Stocks and Bonds Ltd., Prime Islami Securities Ltd., Prime Prudential Fund Ltd., Prime Financial Securities Ltd some of which are already market leaders in their respective fields. Having set epoch making standards in the financial arena, he set his sight into the emerging information technology, booming property sector and promising Agrobased sector of the country and his dreams were fulfilled through promotion of GETCO Limited / GETCO Agrovision Ltd., GETCO Telecommunications Ltd., HRC Technologies Ltd., Prime Property Holdings Limited and PFI Properties Ltd. He is a member of the Board of Governors, Primeasia University. His social contribution came through his foundation under the name and style of MAK Foundation through establishment of a good number of educational institutions such as University, Degree and honors College, Technical College, Krishi College, High School, Girls’ High School, Kindergartens and Madrasahs and a HefzKhana too imparting quality education in the society. He is actively involved with SEBA, a benevolent organization in Bangladesh.

He is currently the Chairman of Fareast Stocks & Bonds Ltd. and PFI Properties Ltd. He is also a Member of the Audit Committee of the Board of Directors of Prime Bank Limited.

m. A. KhAlequeVice Chairman

Quazi Sirazul Islam, a Sponsor Director & former Chairman is current Chairman of the Executive Committee of the Board.

A freedom fighter and elected Member of Parliament in 1996 and 2001, Mr. Islam is the Managing Director of renowned Jewellery House, Amin Jewellers Limited.

He is the Chief Advisor of Sonar Bangla Insurance Limited, Member of Gulshan Club Limited and Chairman of the City Hospital (Burn Hospital), only Private Sector Hospital of such kind in Bangladesh.

A philanthropist by nature, Mr. Islam was awarded Kabi Jasimuddin Gold Medal, Maulana Akram Khan Gold Medal, Sufi Motahar Hossain Gold Medal and Atish Dipankar Gold Medal for remarkable contribution in education and social welfare. He was also awarded MJF (Melvin Jones Fellow) Medal by the Lions International Foundation for his contribution to the Society.

He is the current Chairman of Bangladesh Jewellery Association and also life member of Red Crescent Society, Bangladesh and Member Trustee, People’s University of Bangladesh.

quAzi SirAzul iSlAmChairman

Executive Committee

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Mr. Imran Khan was inducted as Director in the Prime Bank Board in the year 2012. He has been serving as the Vice Chairman of the Executive Committee of the Board since 2013.

He is one of the Directors of the reputed Pedrollo nk Limited – a market leader for sales & distribution of PEDROLLO Brand Water pumps of Italy in Bangladesh. A promising business personality, he is also Director of the family business enterprises like PNL Holding Limited, PNL Water Management Limited, Polyexprint Ltd, Halda Valley Tea Co. Ltd, Hill Plantation Limited.

Mr.Khan is an Ex-Cadet of Fauzdarhat Cadet College, Chittagong and went on to complete his graduation from North South University, Dhaka. Mr. Khan actively associates himself with social activities and is a member of the Governing body of Lion Mukhlesur Rahman Foundation- a renowned NGO and Charitable Organization operating in and from Chittagong for the underprivileged and poor masses.

imrAn KhAnVice Chairman

Executive Committee

Prof. Ainun Nishat, a renowned personality in the arena of Water Management, Climate Change, Environment and Disaster Management, is an Independent Director and Chairman, Audit Committee of the Board of Prime Bank. Immediate past Vice Chancellor of BRAC University, Dr. Nishat is presently Professor Emeritus of the same University.

He obtained Ph.D. in Civil Engineering from University of Strathclyde, Glasgow, U.K. He is a graduate of Bangladesh University of Engineering and Technology (BUET) in Civil Engineering where he started his teaching career in the Department of Civil Engineering and he became Professor of Water Resource Engineering in due course.

He is past Director of Institute of Water and Flood Modeling BUET, Dhaka, and Country Representative of International Union for Conservation of Nature and Natural Resources.

A widely traveled person Prof. Nishat has authored many books and articles at home and abroad.

Prof. Ainun niShAtIndependent Director &

Chairman, Audit Committee

Mrs. Nasim Anwar Hossain, Chairperson of the Risk Management Committee of the Board, is one of the Sponsor Directors of Prime Bank Limited. Mrs. Hossain, Masters in Political Science from Dhaka University, is a successful business personality and currently Director of Prime Cement Ltd., Lubricants Asia Ltd. and Bengal Tiger Cement Industries Limited.

Mrs. Hossain is an active social worker and takes keen interest in different benevolent and philanthropic activities.

She is also a Member of the Executive Committee of the Board of Directors of Prime Bank Limited.

nASim AnwAr hoSSAinChairperson

Risk Management Committee

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Mr. Md. Shirajul Islam Mollah, a Sponsor Director of Prime Bank is also past Chairman of the Board of Directors. He also held the position of Chairman of the Executive Committee of the Board on more than one occasions and is currently Member of the same Committee.

A very successful business personality, Mr. Shirajul Islam is the Managing Director of China-Bangla Ceramic Industries Limited, Bengal Tiger Cement Industries Limited, Bajnabo Textile Mills Limited and United Shipping Lines Limited.

Widely traveled, Mr.Shirajul Islam is involved with various social and educational activities and earned recognitions from a number of organizations. He is the founder of Bajnabo Abul Faiz Mollah High School, Shibpur, Narsingdi. A philanthropic, Mr. Md. Shirajul Islam Mollah is also the Chairman of Shirajul Islam Mollah Samaj Seba Foundation.He is a member of Dhaka Stock Exchange (DSE) and elected Member of Parliament and current President of Bangladesh Ceramic Wares Manufacturers’ Association.

md. ShirAJul iSlAm mollAh

Director

Mr. Md. Nader Khan is a Sponsor Director and immediate past Chairman of the Board of Prime Bank. He is a prominent entrepreneur and has the credentials of setting up many high-ended business establishments in different sectors. Currently, he is associated with the following business concerns:Chairman: � Artisan Ceramics Ltd. � New Vision Information Technology Ltd.

Managing Director: � Pedrollo nk Limited � Polyexprint Ltd. � Polyex Laminate Ltd. � Halda Valley Tea Co. Ltd. � Polytape Ltd. � PNL Water Management Ltd.

Director: � The Consolidated Tea and Lands Company (BD) � Hill Plantation Ltd. � Baraoora (Sylhet) Tea Company Ltd.

One of his business concerns, Pedrollonk Limited, is the market leader in water pump sales & distribution in Bangladesh since 1985. Mr. Khan was honored with ‘Prime Minister’s Award 2010’ for his contribution in tree plantation. A goodhearted personality, Mr. Khan is actively involved in diverse CSR activities. He is the Chairman of Lion Mukhlesur Rahman Foundation, Lion Mukhlesur Rahman Plastic Surgery Hospital, Zero Club Foot Project, Founder of Cider International School, Ex- Governor (2000-2001) of Lions Club International- District 315 B4 Bangladesh, to mention a few.

He is a trustee Member of Independent University of Bangladesh (IUB) & Chittagong Independent University (CIU).

Mr. Khan believes hard work and business integrity are the key to success. He considers vision is necessary to give proper directions for economic development. He, in view of his vast experience, likes to contribute in national development through his experience for expansion of quality education and tea plantation across the country.

md. nAder KhAnDirector

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Mr. Mafiz Ahmed Bhuiyan is a Sponsor Director and past Chairman of the Executive Committee and Vice Chairman of the Board of Directors. He is currently member of the Executive Committee and Risk Management Committee of the Board.

As a Businessman, Mr. Bhuiyan in the early years of RMG in Bangladesh led in setting up joint-venture with the reputed firms belonging to the developed countries like Taiwan, Hong Kong, China and Korea.

He is also involved with Australian International School (International Holdings Ltd) and Eastern University & South East University.

He is also Managing Director of Shepherd World Trade Limited, Shepherd Consultant & Management Ltd. and Representative Director in the Board of Citizen Securities & Investment Limited as Chairman. mAfiz A. BhuiyAn

Director

Mrs. Nazma Haque, Director is one of the Sponsor Directors of Prime Insurance Company Limited. Mrs. Nazma Haque, a Graduate in Economics from Dhaka University is a successful business personality as well. She is Executive Director of Bangla Trac Limited, Chairman of Anirban Enterprise Limited and also Director of Asian Gate Limited, ACORN Limited And THANE Technology Limited.

Outside business, Mrs. Nazma Haque is an active social worker and engages herself in Social Welfare programs exhaustively.

She is one of the founders of Bangla Trac Cricket Academy located in Rajshahi engaged in training of the underprivileged sportsman of the locality.

nAzmA hAqueDirector

Mrs. Marina Yasmin Chowdhury is a Sponsor Director and former Vice Chairperson of Prime Bank Limited. She is currently the Director of East Coast Group (ECG), a conglomerate that has been engaged in Oil and Energy business for last thirty one years. She is also the Chairman of Clean Fuel Filling Station Limited and Parkesine Products Limited, sister concerns of ECG.

Mrs. Chowdhury is also former director of Green Delta Insurance Company Limited, one of the leading general insurance companies of Bangladesh.

Outside the business, Mrs. Marina Y. Chowdhury is actively engaged in Social Welfare programs conducted through East Coast Group Foundation and is also takes keen personal interest in other philanthropic and charitable causes like Health and Education for the underprivileged.

In her leisure time she enjoys working out, shopping and cooking variety of culinary dishes for her family.

mArinA yASmin Chowdhury

Director

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Mrs. Salma Huq is one of the Sponsor Directors and former Chairman of the Executive Committee of Prime Bank Ltd. She is a Director of GQ Group since 1986, which is engaged in manufacturing pen, plastic furniture, disposable plastic wares, pp woven sacks, mosquito coils and snack foods. GQ Group is also one of the sponsors of Prime Insurance Co Ltd, Prime Finance and Investment Ltd, PFI Securities Ltd and Prime Capital Management Ltd.

Mrs. Salma Huq is actively engaged in philanthropic activities providing scholarship to needy students, free medicine and arranging treatment for the poor.

She is one of the founders of Qazi Saleema Huq Women’s College and Qazi Saleema Huq Girls’ High School.

She is currently Member of the Executive Committee and Risk Management Committee of the Board of Directors of Prime Bank Limited.

SAlmA huqDirector

Mrs. Muslima Shirin, Director is the Chairperson of MAWSONS Ltd- a business house engaged in real estate business.

She was also a Director in the Board of Prime Finance & Investment Limited representing M/s MAWSONS Ltd.

She is also a Member of the Risk Management Committee of the Board of Directors of Prime Bank Limited.

muSlimA ShirinDirector

A successful businessman, Mr. Md. Shahadat Hossain is a Sponsor Director of Prime Bank Limited. He is a past Vice Chairman of the Board of Directors also. His business entity consists of VIP Shahadat Poultry & Hatchery, VIP Shahadat Cold Storage and Rangpur Agro Industries. An active social worker, Mr. Hossain is associated with different social welfare organizations dedicated to the services of general masses. He is also a Member of the Executive Committee of the Board of Directors of Prime Bank Limited.

md. ShAhAdAt hoSSAin

Director

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Mr. Mizanur Rahman Bhuiyan, Chairman of Meghna Group, is a renowned industrialist of Bangladesh. Through his strong leadership & vision, he expanded & diversified the family business to its present level.

Mr. Rahman, a Director, is representing the Uniglory Cycle Industries Ltd in the Board of Prime Bank. The core business of Uniglory Cycle Industries is to manufacture & export bicycle & its components to Europe, whereas, Meghna manufactures full range of bicycle, CNG & motorcycle tyres & tubes and recently started manufacturing automobile tyres. Meghna has also a steel tube manufacturing unit that produces quality steel pipe for bicycle frame & steel furniture. Besides involvement in the bicycle industry, Meghna has a joint venture of Hanger manufacturing unit with the renowned firm Mainetti of Italy. The group also has business stake in a white cement manufacturing in collaboration with eminent Siam Group of Thailand. In the recent years, Meghna has started a new line of business of manufacturing garments accessories; like button, poly bags, printed & woven labels tags and tapes. A fully automated corrugated carton factory is already in operation where elastics, yarn & dyeing etc. are in the pipeline. Meghna Group is very successful in the automotive sector in Bangladesh. Mehgna is the sole distributor of prestigious German Brand BMW, KIA Motors of Korea.

For contribution to national economy Meghna Group has been awarded many times by the Govt. & non govt. bodies for export performance. Transworld Bicycle Co. Limited received the “National Export Trophy – Gold” and Meghna Bangladesh limited received “National Export Trophy – Silver”. Meghna was awarded with the “Business Enterprise of the year 2009” by the Daily star – DHL Bangladesh Business Award. In the year 2005 Meghna received the “BMW Best Facility in the region Award” from BMW Asia Limited. In the year 1999 Meghna Automobiles Limited also received Best distributor of the year in Asia Region from KIA Motors Corporation.

Mr. Mizanur Rahman is one of the Sponsor Directors of Prime Bank Limited and past Chairman of the Board.

Widely traveled, Mr. Rahman is a member of Kurmitola Golf Club, Dhaka Cantonment.

mizAnur rAhmAn BhuiyAn

Director

Mr. Nafis Sikder, Director is the Managing Director of renowned Palmal Group founded by his late father, Engr. Nurul Haque Sikder, a prominent business personality of the early eighties.

Mr.Nafis after completion of ‘O’ and ‘A’ level went to Washington University, Saint Louis, Missouri, USA and obtained BS in Business Administration with distinction. With his ingenuity and expertise in operations, strategic management & marketing skills, expanded the Group’s business many folds in all the spheres of RMG business. The group at present is the most prolific and trusted suppliers of Apparels to some of the reputed North American, Australian and European buyers.

Mr. Nafis Sikder is an avid philanthropist and actively contributes in the promotion and expansion of educational activities through establishing Schools and Colleges. He is also associated with numerous socio welfare and charitable organizations actively supporting the causes of Health Care and poverty alleviation.

nAfiS SiKderDirector

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Prof. Dr. Mohammed Aslam Bhuiyan, Pro-VC of National University, is a renowned educationist and was appointed an Independent Director of the Bank in April 2009. He obtained his MS in Sociology on Rural Development from the Moscow University, erstwhile USSR in 1976. He was also educated in the USA & Germany. He did his Ph.D from Bombay University under the fellowship of Indian Council of Social Science Research (ICSSR). Professor Dr. Bhuiyan also successfully completed a training programme for Director’s Financial Institution on Corporate Governance held in Kuala Lumpur, Malaysia in 2012.

Mr. Bhuiyan is former Vice Chancellor of The People’s University of Bangladesh and Chairman of the Department of Sociology, University of Chittagong. He was also Director CUCSU, Provost Shamsun Nahar Hall, Registrar (In charge) of Chittagong University in the past. Presently Dr. Bhuiyan is a Senate Member of Chittagong and Dhaka University, Syndicate Member of the Moulana Bhashani University of Science & Technology and member, Presidium, Bangladesh India Friendship Society. He is also Member of Governing Council of Bangladesh Climate Change Resilience Fund (BCCRF), Ministry of Environment and Forest.

Prof. Bhuiyan wrote more than 100 academic papers published in National & Foreign Journals including many leading Newspapers.

He is currently a Member of the Audit Committee of the Board of Directors of Prime Bank Limited.

Prof. dr. mohAmmed ASlAm

BhuiyAnIndependent Director

Mr. Manzur Murshed, a retired bureaucrat, is one of the Independent Directors of the Bank. He graduated in Engineering (Electrical) in 1961 from the then Ahsan Ullah Engineering College under the University of Dhaka and did MA (Public Admin) from American University, Beirut. He started his career in 1961 as Assistant Engineer in East Pakistan Water and Power Development Authority (EPWAPDA) and retired from service as Member Planning & Development, Bangladesh Power Development Board in December 1995. He was also Director of Eastern Cables Ltd. He at present runs a consultancy firm offering expertise services in the power sector.

He is a Member of the Audit Committee of the Board of Directors of Prime Bank Limited.

mAnzur murShedIndependent Director

Mr Ahmed Kamal Khan Chowdhury took over the charge of Prime Bank on 15th September 2014 as Acting Managing Director prior to becoming Managing Director on 14th December 2014. Before taking over the charge as Managing Director, he was Deputy Managing Director and Chief Risk Officer of the same bank. He has over 30 years of banking experience in the field of Finance, Risk Management, Internal Control and Compliance. He held important management position viz. Chief Finance Officer, Chief Risk Officer, Head of Credit Committee, CAMLCO (Chief Anti Money Laundering Compliance Officer), Head of Finance and Head of Branch in International, Specialized and Private Commercial Banks operating in Bangladesh during his banking career. Over the time he developed strong professional skills in multitasking environment and as a believer in process development was always the core team member of the process development to bring more transparency and smooth workflow.

Mr. Chowdhury is Masters in Economics from the University of Dhaka and MBA in Finance and attended various trainings, workshops and seminars at home and abroad on different aspects of banking.

He is a member of the Executive Committees of Association of Bankers of Bangladesh and Primary Dealers Association of Bangladesh.

Ahmed KAmAl KhAn ChowdhuryManaging Director

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C O R P O R A T E G O V E R N A N C E

02

29

Composition ofBoard and Committees

Mr. Azam J Chowdhury ChairmanKhandker Mohammad Khaled Vice ChairpersonMr. M.A. Khaleque Vice ChairpersonMr. Quazi Sirazul Islam DirectorMr. Md Nader Khan Director Mr. Md. Shirajul Islam Mollah DirectorMr. Mafiz Ahmed Bhuiyan DirectorMr. Md. Shahadat Hossain DirectorMr. Mizanur Rahman Bhuiyan Director Mrs. Marina Yasmin Chowdhury DirectorMrs. Nazma Haque DirectorMrs. Nasim Anwar Hossain DirectorMrs. Muslima Shirin DirectorMrs. Salma Huq DirectorMr. Nafis Sikder DirectorMr. Imran Khan DirectorProf. Ainun Nishat Independent DirectorProf. Dr. Md Aslam Bhuiyan Independent Director Mr. Manzur Murshed Independent Director Mr. Ahmed Kamal Khan Chowdhury Managing Director

Prof. Ainun Nishat ChairmanMr. M.A. Khaleque MemberKhandker Mohammed Khaled MemberMr. Manzur Murshed MemberProf. Dr. Md Aslam Bhuiyan Member

Prof. Maolana Mohammad Salahuddin Chairman Prof. Maolana Dr. Mohammad Shahidul Islam MemberProf. Dr. Shamsher Ali MemberMr. M. Azizul Huq MemberDr. Muhammad Abdur Rashid MemberMaolana Shah Mohammad Wali Ullah MemberMr. Muhammad Abdul Wahhab MemberMr. Azam J Chowdhury MemberMr. Ahmed Kamal Khan Chowdhury MemberMr. Abu Zafar Md. Sheikhul Islam Member Secretary

Mr. Quazi Sirazul Islam ChairmanMr. Imran Khan Vice ChairmanMr. Mafiz Ahmed Bhuiyan MemberMr. Md. Shahadat Hossain MemberMrs. Nasim Anwar Hossain MemberMrs. Salma Huq MemberMr. Md. Shirajul Islam Mollah Member

Mrs. Nasim Anwar Hossain ChairpersonKhandker Mohammad Khaled MemberMr. Mafiz Ahmed Bhuiyan MemberMrs. Muslima Shirin MemberMrs. Salma Huq Member

Board of Directors

Audit Committee

Shari’ah Supervisory Committee

Executive Committee

Risk Management Committee

30


From the Office ofthe Chairman

31

The country witnessed an uneasy calm during the entire two thousand fourteen but then it appears that the full period was a kind of preparation for the bad time to follow. This is also evident as 2015 has just set in and early symptoms are suggestive of the unfavourable situation, banking industry is going to confront rest of the year. Again, such phenomenon is nothing unusual as each year industry faces typical challenges though in different formats. However, a good bank always has its preparedness in store to ward of such challenges on the strength of strong fundamentals and with the support of the stakeholders. Our valued patrons can, therefore, continue to have confidence on our management skills and policies to carry forward the projected goals of consolidation for the year no matter what the global or local scenario is.

Global and National Outlook

The world economy is in the middle of a balancing act. On one hand, countries have to address the legacies of the global financial crisis, ranging from debt overhangs to high unemployment. On the other, they face a gloomy future. Potential growth rates are being revised downward and these worsened prospects are in turn affecting the confidence and demand today. Bank credit growth has continued to be slow in the emerging markets and economies, although it remains different in few.

Bangladesh currently stands strong with international reserves more than twice the low levels of late 2011 with a prudent overall fiscal stance and lower underlying inflation. Significant progress has also been made with structural reforms. Amendments to the Banking Companies Act, passed in July 2013, have significantly strengthened banking system governance, enhancing the supervisory powers of BB to safeguard financial stability. Progress towards MDG is also remarkable, particularly on increasing access to primary education and eliminating gender disparity. Women participation in the parliament increased from 12.7% in 1991 to 20% in 2014 and in labor force it has increased to 36%

The country’s fiscal deficit is contained and public debt is on a downward path. Real GDP growth is expected at about 6¼% in FY15. The per capita income has increased to USD 1,190 in 2014 from USD 843 in 2009. The government expects both export earnings and import expenditure to experience around 15% growth this year.

Customer Focus

Strong correlation has been found between consistent customer journey and overall performance in customer experience. In an era of proliferated banking products, multi-channel touch points, Prime Bank has ensured consistency in its services. The motto has always been in delivering consistent pursuit of quality customer experience. This is why the Bank places high emphasis on ensuring courteous interaction with every customer. The Bank’s customer account has been significantly

increasing each year and therefore, considering our customer’s unique needs, the Bank launched “Monarch” Priority Banking Service which is a testimony to our ongoing pursuit of delivering superior service. In addition to our wide range of payment services, this year the Bank has partnered with one of the largest payment services of the world JCB. It is significant to mention that it was the first initiative by any bank in the South Asian region. In addition, bank has decided to re-focus its attention on the Cash Management Services through its strategically located branches across the country to broaden its Customer base, be it individual or large corporate.

Besides, to assess whether we are providing consistent superior customer services, the Bank undertook customer satisfaction survey at regular interval and on various segments. One of the major outcomes of such research has been encouraging that demonstrates customer’s positivity and trusted brand image in banking with us.

Performance -2014

The Banking industry’s profitability is always impacted by the aggregate output and growth of the economy. Fifty Six (56) Scheduled banks operating in an economy where private sector growth is merely 12.7%. The performance over the years in terms of achieving sustainable financial results, therefore, can be stated to be consistent like any yesteryears. Despite the slowness in every aspect and borrower’s inclination of availing foreign funds and not going beyond contingent UPAS import portfolio Bank succeeded in declaring double digit dividend. At the end of the year Bank’s Advance-Deposit ratio hovered around 70% as against normal above 80%+ clearly supporting the statement made above on lesser demand of credit .

Capital Adequacy at the end of the year stood as usual impressive 12.71% against the regulatory requirement of 10.00%. Return on Equity (ROE) was 10.08%. & Earnings Per Share 2.32% suggesting significant improvement over the performance of last year

The ratio of non-performing loans was slightly unfavorable considering Prime Bank standard but it can be assured that it’s bound to improve as this has been chalked out as one of the priorities of the bank for the year 2015.

Business Strategies & Priorities

It’s obvious from the statistics that performance ratios of 2014 are not heartening and requires taking up measures for improvement. To those end in view, one of the measures is about re-introducing the concept of CLUSTER Management System in the right earnest. The concept provides an opportunity of understanding challenges ahead through interactive dialogues with senior management. It’s a bottom up approach in setting

32


up budget which includes all key parameters of core risk management, good profitability and strong asset quality. The system also strengthens the compliance culture, transparency and accountability of the Mangers not to mention the process of grooming future business leaders.

Maintaining adequate liquidity has been always the strategic priority for better maneuvering and flexibility in terms of venture and acquiring large business. The Bank is, therefore, indebted for the prudent decision of the Shareholders for approving the special resolution in the last AGM about raising subordinated bond of BDT 2,500 million to add to its already strong capital base.

A long term key strategy to sustain profitability growth and improved return on equity is to expand the scale and scope of FEE or TRANSACTION based income infrastructure for rendering financial services. Using of innovative approaches and tools under the services of Alternative Delivery Channel could prove useful as such bank has decided extra focus and attention this year.

Centralization and Automation are interrelated and bank of its own realization that widespread technology shall be an investment to support growth, Bank has been relentlessly aiming to popularize technology driven product and services. For the purpose Bank has engaged renowned Audit & IT firm, KPMG for upgrading the existing core Banking Software of the bank to have positive impacts on both the conventional and Islamic businesses.

The recovery of non-performing loans remains as usual the key and this has been chalked out as one of the major priorities of the bank for the year 2015.

Corporate Governance

Prime Bank Ltd. is committed to maintaining high standard of corporate governance. It is fully compliant with the guidelines of both BSEC and Bangladesh Bank in the operation of the banking activities. Statutory Committees like the Executive Committee, Audit Committee and Risk Management Committee are fully functional as per laid down guidelines. The Audit Committee consists of three IDs and is also headed by an Independent Director and all the subsidiaries of the Bank have at least one ID on behalf of the holding Company. Minutes of the Board Meetings of the subsidiary companies are placed for review of the Board on regular basis while their financials are also reviewed by the Audit Committee and the Board.

Codes of Conduct for the Directors are in place and annual compliance is also recorded. Responsibilities and authority of the Chairman, CEO, CFO, Head of Internal Audit & Inspection, Company Secretary and Roles of Audit Committee are well defined and is meticulous followed.

Maximum disclosure is being ensured enabling the stakeholders have a fair assessment on the activities and performance of the Bank. The Bank also engaged

multiple rating agencies during the year to ascertain the functioning and compliance with its own policy guidelines and regulatory authorities. It also disclosed Directors’ key business outside the bank and related party transactions if any to ensure transparency and avoid conflicts of interest.

Bank believes in doing an activity not well enough only but on a sustained basis as well. As such, it paid due importance to rigorous risk assessment, constant review of all processes, functioning of risk and control committees, vigilant compliance and thorough rechecking of the operational functions by the Audit & Inspection of the bank on routine basis.

Contribution for the Society

Banking is all about the society. It’s the society we do banking about and it’s the society to which we belong. Prime Bank, as such, since its inception has been alert about its commitment to the Society and with each passing day, involvement has been increasing. Our attention is primarily focused on the development of Education, Health care & Sports which we consider vital for the growth of the nation.

The bank has been performing its responsibilities from dual front. On one end, the Bank entertains and responds to local and national level issues on day to day basis, while the Prime Bank Foundation undertakes organized approach taking permanent projects like running of Schools, Colleges, Eye Camps and holding education support programs for the meritorious but needy students round the year. A lot of thoughts and deliberations are also on for larger projects of significance like setting up of a Medical College, international standard Auditorium and a Cricket Academy on its owned premises and all these appear materializing in the nearest future.

On the business front, Bank has been contributing to the society by extending credit facilities on softer terms to the Women Entrepreneur, SME Sector, Education Loan & Environment friendly projects under Green Banking Financing Policy of the bank.

All these activities are geared for the unique objective of giving back to the society for which the banking activities is all about.

Challenges and Reality

By the time this report reaches the stakeholders, the year 2015 will be well set in. But early symptoms are not very encouraging for the service sector industry like banks etc which makes a contribution of about 50 percent to the GDP as some of the legacy of the past and the current ones shall persist to impact its growth, such as:

� Borrowers having availed the recent rescheduling facilities as per BB Guidelines to overcome the difficult time faced due to political turmoil will have to prove their financial strength.

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� Industry NPL ratio which was helped down might re-surface as demand for credit is yet to show signs of momentum.

� RMG export, though stood test of time, is yet to receive boost as apparent from the impending decision on GSP and European Union’s tilt for a general consensus among the political parties to help build a peaceful environment in the country.

� Government decision to build mighty Padma Bridge with own funds may induce heavy borrowings consequently impacting the liquidity in the market.

� Unfavourable Policy changes and stricter regulations on financial Management may force banking industry shy away from complex investments resulting in loss of interest income and business opportunities.

� The cautious restrained monetary policy stance of the first half of FY2015 will be continued unchanged in the second half of FY2015, without any new loosening or tightening. The second half of FY2015 monetary program will seek to limit broad money (M2) growth at 16.5 %, using controls on Bangladesh Bank’s reserve money growth. Private sector credit will have space for 15.5% growth, a level substantially higher than the 12.7% November 2014 level. Besides, access to external term financing and input import financing will remain open for industrial manufacturers.

� Bangladesh Bank’s supervisory oversight on credit disbursement and loan recovery disciplines in banks and financial institutions will intensify; with particular emphasis on risk management, internal audit and internal controls, accountability and transparency.

� Deposit and lending interest rates of banks and financial institutions have been coming down in line with decline in CPI inflation; intermediation spreads between weighted average deposit and lending interest rates of banks and financial institutions have come down to 5 percentage points or lower in the state owned banks and the majority of private sector banks.

� Bangladesh Bank’s attention towards rationalization of these higher spreads will continue.

� Bangladesh Bank resort to setting ceilings on lending interest rates in two priority areas, i.e. pre-shipment export credit and agricultural credit. In the context of general declining trend in interest rates, in the first half of FY2015 Bangladesh Bank has revised the lending rate ceiling for agriculture downward from 13% to 11%. Competitive rate setting behavior in the market would have made the setting of such ceilings unnecessary. Bangladesh Bank will pursue ways of fostering of competitive price setting, rate setting attitudes and practices in our financial markets.

Note of optimism

Despite the challenges & the realities, we have reasons to draw inspirations from our past and the strong

fundamentals on which the bank stands coupled with the skilled workforce of the bank backed by appropriate policy guidelines from the Board of Directors, challenges will be overcome and our march for consolidation shall continue.

The outlook for long-term growth is excellent - our Bank’s clients are growing, and they need us as such the growth will be broad based and global. The financial needs of countries, companies and individuals will continue to grow overtime and we will continue to do what we do best.

Note of appreciation

I had intended to touch upon many more subjects but as it appears most of those have been attended in different sections of this Annual Report; I therefore, restrain myself from duplications.

I am thankful for the continuous support of all well-wishers, shareholders and stakeholders. As tough as the year was — the company was under constant and intense pressure- I can hardly express the admiration, even pride, I feel because of the enduring resolve and resilience demonstrated by the Board of Directors, the Management and above all the employees. We all owe them a great deal of gratitude. I would like to extend my special gratitude to the Central Bank for always providing guidance, direction and unwavering support. My sincerest appreciation also goes to the Commercial Auditors of the bank for being a constant guide al-through.

When I look back at the company with all ups and downs last year, I remember the quote from the “A Tale of Two Cities”: “It was the best of times; it was the worst of times.” We came through it scarred but strengthened- steadfast in our commitment to do the best we can.

Before I conclude, I must inform that the ‘Special Resolution’ adopted in the last AGM about issuance of “Prime Bank Subordinated Bond-2” worth BDT 2,500 million has been materialized. We, as such, feel more confident on the pillar of strong CAPITAL to meet higher expectation of the stakeholders in the future activities of the bank.

With the assurance and commitment of taking the bank to a higher level and improved performance in 2015, I conclude in anticipation that the next AGM shall bring more rewards for all.

Warmest regards,

Azam J ChowdhuryChairman

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Managing Director &CEO’s Round up

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The year 2014 proved to be a challenging year for the banking sector in Bangladesh. Lower demand for credit, decline in interest spread and commission earning, rise in non performing loans exerted pressure on the profitability of the banks. Despite the challenges, Prime Bank did well in 2014 in terms of net profit and return on assets. The growth rate of net profit and return on assets were 30.80 and 26.31 percent respectively. This was possible due to prudent balance sheet management and recovery of non performing assets. Prime Bank focuses on sustainable growth and as such emphasized on diversification of assets, increasing non-funded revenue generating services, strengthening internal control and compliance through the implementing process of centralization.

Global and Regional Outlook

World Economic Outlook has lowered the global growth prediction for 2015 from 3.9 percent to 3.8 percent. Growth projection for both advanced and emerging economies has been down scaled because of their slower than expected rate of recovery from the post crisis stage. However, in a comparative scenario, the global outlook portrays a slightly encouraging picture for the world since its output growth is expected to rise from 3.3 percent in 2014 to 3.8 percent in 2015. The main contributor to this growth performance is Asia and the Pacific region. The average growth of the emerging and developing economies is likely to be 5 percent while both China and India, the two emerging giants of the globe, will outperform the 5 percent mark. In 2015, the growth rate of 7.1 percent that China is likely to experience is the lowest in its history of 29 years. As India’s growth has slide down, now Bangladesh is expected to do as good as India in that performance to earn a growth rate of 6.4 percent. Global economic activity and trade picked up in the second half of 2013, with world output averaging a 3.0 percent growth we see a clear shift in economic power away from advanced economies to emerging economies. While slide in oil price would affect the exporting countries, the importing countries would be greatly benefited by the decline. This would reduce the budgetary gap of many developing countries including Bangladesh. As a result positive impact on economic activities is expected.

Bangladesh Economy

The prospects of the Bangladesh economy over the near and medium terms are reasonably good. During last two years Global meltdown and compliance of RMG sector affected the growth of export sector of our economy. In addition the economy witnessed political turmoil for last two years which impacted the overall growth of the country. In spite of above factors the growth rate of GDP was 6.15 percent during 2014. Import of capital machinery showed upward trend during 2nd

quarter of fiscal year 2015 indicating an increase in the activities in manufacturing sector. The fall in global oil price is a good news for the country and this is going to improve subsidy management in energy sector. As such the GDP growth is expected to pick up between 6.2 to 6.5 percent in FY15. The monetary policy is managed to keep the inflation below 7 percent and macro-economic policy support is expected to continue in agriculture and manufacturing sector. However, the performance of the economy depends on private investment which in turn is depended on infrastructure facilities in power and gas and political stability. Bangladesh managed well in some of the millennium goal viz Eradicate extreme poverty & hunger, achieve universal primary education, eliminate gender disparity in primary and secondary education, promote gender equality and empower woman, improve maternal health etc. and policy support in those areas would continue.

Business Performance

In 2014 we made significant progress in transforming ourselves to become the ‘compliant’ bank for regulators and customers. During 2014 the macroeconomic environment remained challenging – economic contraction, unemployment and political and regulatory uncertainty impacted both us and our competitors. Against these uncertainties we successfully controlled branch operations while taking steps to de-risk the business. The Bank continued its growth momentum despite challenges in the banking sector, and stayed alongside of industry average growth rates in business volumes and the underlying streams of revenue. The profit after tax increased by 30.80 percent and return on assets by 26.31 percent during 2014. Total assets grew by 4.53 percent to BDT 254,912 million with investments showing 27.58 percent growth. Deposits grew by 1.45 percent to BDT 204,838 million during 2014. Prime Bank contained the rise in NPLs through constant monitoring and focused recovery efforts, closing the year with an NPL ratio of 7.61 percent as against an industry average of 9.69 percent. Interest spread and commission came under pressure in the wake of a declining interest rate regime which saw assets being re-priced faster than the liabilities. However, our Bank’s cost of deposit has came down to 7.36 percent (2013: 8.80 percent). Moving forward, we expect interest rates to be stable in 2015 and provide the impetus for a higher credit growth. As we head into 2015, many commercial projects that were not previously deemed financially viable could gain new life in this more favorable interest rate environment and non performing situation may improve. Even though our margins will be leaner, it would be compensated through growth in volume and improved asset quality with borrowers finding their credit obligations more affordable. Remittance growth started gaining momentum and became positive in the second half of 2014. The growth in remittance was 10.30 percent during 2014. However, the export and import business

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declined during the year as the Bank gave more efforts on compliance and risk management in financing in some key areas viz. RMG, commodity trading and ship breaking. Our aim has always been to focus on our fundamentals - strengthening the Balance Sheet, ensuring stability and maintaining a strong liquidity. Capital adequacy ratios grew from 12.04 percent to 12.71 percent. However, taking into consideration BDT 2,500 million sub ordinate bond raised, the capital adequacy now stands at 13.87 percent.

FOCUS FOR 2015

Business Model

PBL seeks to satisfy the needs of our customers and clients by offering a rounded value proposition – a full range of products and services – and thereby, we aim to achieve a smoother income stream and sustainable returns. PBL’s competitive advantage is created by the scale and diversity of our businesses and the quality, character and relationships of our people. Implementation of centralisation processes have allowed us to take advantage of synergies through the sharing of ideas and collaboration from cross-functional working groups. The Bank is noticing shift in customers’ preference. They want to carry out their own banking business through STP (Straight through processing) and self service channel. This would reduce human cost but would be implemented after proper risk management is in place. First time resolution process has been implemented for priority customers and would remain as strategic priority during 2015. Expansion of self service channels and STP would get due attention in the growth process.

Very strong supervisory oversight on credit disbursement and loan recovery disciplines will intensify with particular emphasis on risk management, internal audit and controls, accountability and transparency. while firmly discouraging the abetting of habitual, willful repayment default, the Bank would create room for helping out recovery of genuine businesses distressed by circumstances beyond their control with realistic debt restructuring in line with regulatory guidelines under consideration.

Capital Adequacy

PBL’s regulatory capital as on December 31, 2014 stood at BDT 27,313 million which 12.71 percent with regard to risk weighted assets. With a view to ensuring the implementation of Basel III in a phased manner and keeping in view raising the quality and level of capital to ensure absorb losses, we have issued sub ordinate bond to the tune of BDT 2,500 million which is clearly depicted in our notes to accounts under post balance sheet event. With the bonds the capital adequacy would

rise to 13.87 percent. The higher capital adequacy will give us strength to enhance the business further and remain complied under Basel III also.

Assets and Liability

The Bank would have focused growth in 2015 in order to have a strong balance sheet and improvement in key performance indicators. Separate asset growth has been planned in 2015 giving more emphasis in Small and Medium Enterprise (SME) and retail businesses. Since the Bank has established expertise in corporate sector, we are foreseeing growth in business with our existing clients. SME would have higher growth target in order to increase client base and reduce concentration risk. Retail asset viz mortgage loan, personal loan and vehicle financing would get preference and have separate team for marketing and sale. In order to diversify our asset growth, the new businesses in corporate sector would be sought for where concentration is minimal. On the liability side mobilization of low cost and no cost deposits would get preference. The cash management of corporate clients and other private and public enterprises is being strengthened with adequate manpower and processes. Various road shows would be taken for increasing the customer base of low cost deposit.

Information Technology

The bank’s core banking software Temenos T24, which is an excellent technology platform fine-tuned to achieve efficiency in its operations. In order to provide prompt service to the valued customer’s efforts were given on automation, developing procedure and reducing manual operations. Information technology of PBL enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Technological development of the Bank tremendously increased its customer service as well as established trust worthiness among the stakeholder. The security controls are properly applied to reduce the risks associated with connectivity to external/internal networks. The implementation of connectivity with external/internal networks is properly authorized, authenticated, monitored, encrypted and managed by IT staffs that are properly trained in networking technologies. The Bank has taken up the up gradation project of Temenos which would further strengthen our processes and give opportunities for further growth with proper control in place.

Branding & Public Relations

The Prime Bank brand name is now well established and is synonym with innovation, multiple product

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choice, technology driven and customer friendly bank. The bank’s phenomenal performance has reflected not only in its financial results but also with honors and awards on local and global fronts. It has been awarded for its published annual report and corporate governance both by international and local accounting bodies. The bank retained its image by receiving ICAB Best Corporate Award. Furthermore, the bank proved its strict adherence to regulations and disclosure by winning “The Best Presented Annual Reports for Corporate Governance Disclosure SAFA (South Asian Federation of Accountants).” We have developed annual comprehensive strategic marketing plan for corporate branding and product groups which will further strengthen our brand image among all stakeholders.

Human Resources

Prime Bank always gives the highest focus on the right placement of human resources. The bank believes in certain core values as practiced by all employees to meet the mission and the broader vision of the organization. We strongly believe human resources are the greatest assets and recognize them as building blocks of the bank’s performance. Recognizing “Service Excellence” as the prime differentiator in a market of homogeneous products and services, we continued to invest in people to enhance and upgrade their skill sets through various training programs at home and abroad. To ensure long-term sustainability, PBL is relentlessly pursuing its vision to transform the human resources into human capital. Diversely talented, motivated and engaged employees have always been our key assets.

It is the teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare. If we could get all of us rowing in the same direction we can dominate the industry against any competition. We always boosted of our Team spirit and this should be sustained. The Bank has been maintaining a highly favorable employer image by creating a performance-driven rewarding work culture; where employees receive plenty of opportunities to realize their diverse potentials fully as well as benefit the organization by demonstrating value creating behaviors. Our Efforts are focused on the delivery of quality services in all areas of activities with the aim to add increased value to shareholders’ investment and offer highest possible convenience and benefits to our customers.

Corporate Social Responsibility

As per corporate responsibility, Prime Bank was focused on following specific key areas namely, nation building, and enhancement of market place, promotion of the work place, support to the community and protection of environment. The bank has been delivering

sustainable profit growth for the long-term benefits of our stakeholders, building sustainable customer relationships and demonstrating that our business contributes to the environment, social and economic well-being of the world at large. These activities involved not only of financial assistance but of also highlighting our role as highly aware corporate entity contributing towards community as a whole. The Prime Bank foundation has taken exemplary strides, which have proved our mission of making a difference.

There is no denying the fact that the banking activities directly and indirectly add to carbon foot print. Considering the direct and indirect impact of carbon emission and our strong ethical business principles, we continue to make endeavor to lessen our carbon footprint by being responsive in different facets of our Banking activities. Prime Bank issued a general guideline to facilitate the green banking objectives of the bank. The office guide is a primary document to be used by all employee concern and must be exercised with maximum effort to accelerate green banking.

In addition, PBL has established a separate cell called “Green Financing Cell” for financing under refinance scheme of Bangladesh Bank to set up of Effluent Treatment Plant (ETP), Bio-gas Plant, Solar Energy (i.e. Solar panel, Solar home System, Solar mini Grid, Solar irrigation pumping system, Solar PV Assembly plant), Water Electricity Plant, PET bottle reprocessing plant, Hybrid Hoffman Kiln (HHK) etc. The Green Banking Cell (GBC) have been formed with the task of developing policies, products, planning, reporting to management and Bangladesh Bank and overseeing the overall green financing activities of the bank.

Conclusion

In summary, 2015 will be a challenging year yet our firm commitment towards excellence with outstanding operational efficiency will make the bank stronger, set examples for others to follow and create positive differences. Sustainable business growth, dynamic and talented human capital driven by values, better risk management, and involvement of mid-level management in decision-making process will surely command some key strength for Prime Bank. We believe that, as long as we adhere to the right development strategy, take pro-active actions and forge ahead determinedly, the year will be full of hopes and harvests.

Ahmed Kamal Khan ChowdhuryManaging Director & CEO

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Directors’Report

The Board of Directors of Prime Bank Limited has the pleasure of presenting the 20th Annual Report and Audited Financial Statements for the year 2014 together with the Report of the Auditors to the shareholders. A brief overview of the world market trend with the performance of Bangladesh Economy has also been provided in this Report. A review of this report would reveal continuous growth of the bank in a stiff competitive environment.

Global Economy

Global growth in 2014 was lower than initially expected, continuing a pattern of disappointing outturns over the past several years. Growth picked up only marginally in 2014, to 2.6 percent, from 2.5 percent in 2013. Beneath these headline numbers, increasingly divergent trends are at work in major economies.

While activity in the United States and the United Kingdom has gathered momentum as labor markets heal and monetary policy remains extremely accommodative, the recovery has been sputtering in the Euro Area and Japan as legacies of the financial crisis linger, intertwined with structural bottlenecks. China, meanwhile, is undergoing a carefully managed slowdown. Disappointing growth in other developing countries in 2014 reflected weak external demand, but also domestic policy tightening, political uncertainties and supply-side constraints.

Several major forces are driving the global outlook: soft commodity prices; persistently low interest rates but increasingly divergent monetary policies across major economies; and weak world trade. In particular, the sharp decline in oil prices since mid-2014 will support global activity and help offset some of the headwinds to growth in oil-importing developing economies. However, it will dampen growth prospects for oil-exporting countries, with significant regional repercussions.

Overall, global growth is expected to rise moderately, to 3.0 percent in 2015, and average about 3.3 percent through 2017. High-income countries are likely to see growth of 2.2 percent in 2015-17, up from 1.8 percent in 2014, on the back of gradually recovering labor markets, ebbing fiscal consolidation, and still-low financing costs.

In developing countries, as the domestic headwinds that held back growth in 2014 ease and the recovery in high-income countries slowly strengthens, growth is projected to gradually accelerate, rising from 4.4 percent in 2014 to 4.8 percent in 2015 and 5.4 percent by 2017. Lower oil prices will contribute to diverging prospects for oil-exporting and importing countries, particularly in 2015.

Bangladesh Economy

The prospects of the Bangladesh economy over the near and medium terms are reasonably good. The strong domestic demand base, gradually improving investment climate, decreasing uncertainty and reduced inflation are expected to lead to better economic performance. GDP growth is expected to pick up between 6.2 to 6.5 percent in FY15 keeping inflation at a reasonable level provided that macroeconomic policies must continue to support sustained expansion in agriculture and industry together with large investment in infrastructure while striving to enhance government revenue collection. The risks of high inflation include global food price volatility, any shocks to domestic crop production and the knock-on impact of upward adjustments in public sector wages. Fiscal monetary coordination will continue and the track record of containing Government borrowing well within budgetary limits is expected to continue. As such there is no risk of crowding out of private sector credit flow.

Bangladesh Bank will continue to focus on containing inflation to its target level of 6.5 percent while providing sufficient space in its monetary program for lending to activities which support broad-based investment and inclusive growth objectives. Bangladesh Bank is considering to adopt some macro prudential tools such as counter cyclical capital buffer and dynamic provisioning to address pro-cyclicality which would give protection to the banks against a possible downturn that could result from build up of systemic risks. Besides, Bangladesh Bank will continue strengthening financial supervision within the approach of Integrated Supervision while avoiding regulatory forbearance. Efforts have been continued to maintain the country’s external sector stability. Further build up in foreign exchange reserves in FY15 will continue at

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a more moderate pace than FY14. BB will continue to support a market based exchange rate regime while seeking to avoid excessive exchange rate volatility. Although restrictions in major host countries leading to a reduction in migrant workers outflows resulted in decline of remittance inflows during FY14, it is expected that remittances will increase in FY15. Government is trying to send more people with the help of recruiting countries. Bangladesh Bank projects a 12 and 15 percent growth of export earnings and import bills respectively during FY15. Bangladesh’s aspiration to become a middle income country by 2021 is likely to be possible if there is good governance in financial and fiscal fronts, political stability and development of infrastructural facilities.

Performance of PBL

The bank maintained satisfactory growth of asset and liabilities in spite of all challenges during the year 2014. Trade finance and other ancillary businesses recorded considerable growth in spite of all odds and economic turmoil. The bank further expanded its branch network and alternate delivery channels. New IT based products and services were introduced.

Vision, Mission, Corporate Philosophy, Strategic Priorities and Corporate Conduct

PBL’s vision, mission, corporate philosophy, strategic priorities and corporate conduct are given in the beginning of the report. In achieving bank’s vision, mission and strategic priorities, the highest level of ethical standards are maintained.

Brief History of PBL

PBL started its journey in the year 1995 with the firm commitment of excellence in customer service with a difference. Its vision remained to be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, profitability along with strong liquidity.

PBL formally launched its business in April 1995 with one branch at Motijheel Commercial Area, Dhaka. It started its Islamic banking operations in December of the same year. It was listed with both the bourses of Bangladesh viz. Chittagong Stock Exchange and Dhaka Stock Exchange in 1999 and 2000 through initial public offering.

PBL became a primary dealer for buying and selling securities under the license issued by Bangladesh Bank in 2003.

With the aim to offer innovative banking service to the

Non Resident customers, PBL opened its first Offshore Banking unit in 2007 at DEPZ, Savar, a new dimension in its customer friendly business activities. The bank opened two more Offshore Banking Units at CEPZ, Chittagong and Adamjee EPZ, Narayangonj.

It was registered as a Merchant Banker with the Bangladesh Securities and Exchange Commission, Bangladesh in 2001 for starting its Investment Banking and Advisory services. As per directives of Bangladesh Bank, PBL converted its Merchant Banking and Investment Division (MBID) into a subsidiary in the name and style “Prime Bank Investment Ltd.” in 2010. With the view of business diversification in mind, the bank also established another subsidiary company in the name and style “Prime Bank Securities Ltd.” to provide brokerage services in the stock market.

PBL has also expanded its services cross border with a view to providing banking services globally. It opened its first fully owned subsidiary- Prime Exchange Co. Pte Ltd. in Singapore, which started its operation from July 2006 to offer remittance service to Bangladeshi Nationals living in Singapore. This is the first ever fully owned Exchange Company of a Private Sector Bank of Bangladesh established in Singapore with the approval of the Bangladesh Bank and the Monetary Authority of Singapore.

With permission from Bangladesh Bank and registration of Financial Services Authority, UK, another fully owned subsidiary of PBL, Prime Exchange (UK) Limited, started its operation from August 2010 in the UK along with its three branches in London, Birmingham and Manchester. The company is engaged in remittance business.

PBL Finance (Hong Kong) Limited, a fully owned subsidiary of PBL started its operation in September 2011. The main functions of the subsidiary are to advise, negotiate, confirm and provide discounting facilities against LCs originating from PBL and other banks in Bangladesh. The company also handles remittance business.

At present, the bank has been working with 140 branches including 18 SME branches. The introduction and expansion of ATM network, Internet Banking, SMS Banking, Phone Banking, Mobile Banking, Biometric Smart Card and KIOSK ushered a new era and PBL is now well poised towards sustainable development.

Principal Activities

The principal activities of the bank are banking and related businesses. The banking businesses include deposits taking, cash withdrawal, extending credit to

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corporate organizations, organizing syndication deals, retail and SME financing, trade financing, project financing, lease and hire purchase financing, credit cards, remittance services etc. The mode of banking includes conventional and Islamic banking. The services are provided through both traditional and modern IT based products. The bank performs investment banking and advisory services through Prime Bank Investment Limited and brokerage services through Prime Bank Securities Limited. Bank’s subsidiaries at Singapore and UK are engaged in providing remittances faculties to expatriate Bangladeshis. PBL Finance (Hong Kong) Limited advises, negotiates, confirms and provides discounting facilities against LCs originating from PBL and other banks in Bangladesh. The company also handles remittance business. 3 (three) Off-shore Banking Units offers banking services involving foreign currency denominated assets and liabilities.

Review of Operations, Products and Services of PBL

Review of operations along with products and services of the bank has been given in “Management Discussion and Analysis”, and other chapters in this report.

Offshore Banking

PBL has been offering Offshore Banking facilities through 3 (three) Offshore Banking Units (OBU) located in Dhaka Export Processing Zone (DEPZ), Chittagong Export Processing Zone (CEPZ) and Adamjee Export Processing Zone (AEPZ). The total loans and advances of three OBUs reached to USD 110.74 million equivalent to Tk. 8,632 million as on December 31, 2014 compared to USD 77.81 million equivalent to Tk. 6,050 million as on December 31, 2013 recording a growth of 43 percent. During the year 2014, OBUs made operating profit of USD 1.71 million equivalents to Tk. 132.84 million as against USD 1.43 million equivalents to Tk. 132.34 million in 2013 with a positive growth of 18 percent.

Prime Bank Investment Limited

PBL was registered as Merchant Banker with the Bangladesh Securities and Exchange Commission, Bangladesh in 2001 for starting its Investment Banking and Advisory services. As per directives of the Bangladesh Bank, PBL converted its Merchant Banking and Investment Division (MBID) into a subsidiary in the name and style “Prime Bank Investment Ltd.” in 2010. During the year 2014, the company made operating profit of Tk. 18.79 million as against Tk. 168.52 million in 2013.

Prime Bank Securities Limited

“Prime Bank Securities Ltd.” was established to provide brokerage services in the stock market. During the year 2014, the company made operating loss of Tk. 28.23 million as against profit of Tk. 26.18 million in 2013.

Prime Exchange Co. Pte. Ltd., Singapore

The company operates with two branches in Desker Road and Jurong East complying with the regulations of both Bangladesh Bank and Monetary Authority of Singapore (MAS). Growth in business of the company was possible due to marketing efforts, personalized service, efficient service platform under “RemitFast’ software and enhanced distribution network. The company significantly expanded business in 2014. Total volume of remittance was SGD 102.60 million in 2014 compared to SGD 89.80 million in 2013, showing growth of 14.27 percent. The company made profit before tax of SGD 276,036 in 2014 compared to SGD 99,795 in 2013.

PBL Exchange (UK) Limited

The company has been operating with three branches in London, Birmingham and Manchester. The business volume has marked growth despite stiff competition. The volume of remittance was GBP 22.38 million in 2014 which was 5.89 percent lower than GBP 23.78 million in 2013. The company incurred operating loss of GBP 15,303 in 2014 compared to operating loss of GBP 33,697 in 2013. The subsidiary has taken some pragmatic steps for further acceleration of business growth.

PBL Finance (Hong Kong) Limited

Total assets of the company reached to HKD 231.08 million as on December 31, 2014 compared to HKD 243.83 million on December 31, 2013. The company made a net profit after tax of HKD 5.50 million in 2014 compared to HKD 5.04 million in 2013. The main functions of the subsidiary are to advise, negotiate, confirm and provide discounting facilities against LCs originating from PBL and other Bangladeshi Banks. The company also handles remittance business.

Risk Management

PBL has always been in the forefront of implementing different risk management tools and techniques. The “Risk” of any banking institution may be defined as the possibility of incurring losses, financial or otherwise. Banking business is in fact a business of risk taking. So it is vital to manage all these risks efficiently. In today’s challenging financial and economic environment effective risk management is must for sustainable

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growth in shareholders’ value. In banking arena, key risks include credit, market, operational, liquidity, reputation risk and other risks like strategic risk, concentration risk, compliance risk etc. The risk management strategy is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring.

Capital Management

Capital management of the bank is based on the objective to maintain an adequate capital base to support the projected business and regulatory requirement. This is done by drawing an annual planned business growth vis-à-vis capital requirement. PBL recognizes the impact of shareholders’ returns on the level of equity and seeks to maintain a prudent balance between Tier-I and Tier-II capital. As per directives of Bangladesh Bank, the banks are required to maintain capital at 10.00 percent of risk-weighted assets under Basel-II. Tier-I capital should be minimum 5 percent of total capital.

The bank’s capital fund is divided into two parts- Tier-I and Tier-II capital. Tier-I includes the equity (paid-up capital, share premium, statutory reserve and retained earnings) and Tier-II includes general provision on unclassified loans and advances, revaluation reserves, unsecured subordinated debt and exchange equalization account. Total consolidated capital fund of the bank increased by Tk. 611.73 million and stood at Tk. 27,424 million during 2014. Tier-I capital grew by Tk. 903.68 million and stood at Tk. 22,611 million during the year under review. Total consolidated capital fund is equivalent to 12.68 percent of total risk weighted assets. More details regarding capital management are given in the “Market Discipline- Disclosures on Risk Based Capital (Basel-II)” chapter of this Annual Report.

Human Resources

PBL is working with a vision of converting human resources into human capital through appropriate knowledge, skills, abilities and personal attribution. A healthy environment has been created where employees enjoy working with pride. Believing that the human resources are main elements behind the success and future sustainability of the bank, the bank is developing and motivating the workforce with contemporary HR policies and attractive benefits. The bank is not only offering a job but also learning, challenging and rewarding career.

Corporate Sustainability

In respect of corporate sustainability, PBL has focused on following specific key areas namely, nation building, enhancement of market place, promotion of the work

place, support to the community and protection of environment. PBL established “Prime Bank Foundation” and contributes equal to 4 percent of net profit before tax (Tk. 131.20 million in 2014) as donation to this foundation for undertaking projects in health and education sector. Details of activities of the foundation are given in “Prime Bank Foundation” chapter in this report). Apart from the CSR activities taken by Prime Bank Foundation, the bank conducted various CSR activities during the year 2014, details of which are given in “Corporate Sustainability” and “Green Banking” chapters of this Annual Report.

Corporate Governance

The bank adheres strictly to the regulatory guidelines on corporate governance. Disclosures on corporate governance are provided in the “Corporate Governance” chapter of this Annual Report.

Financial Analysis

Total Assets

Consolidated assets of the bank stood at Tk. 256,349.33 million in 2014 as against Tk. 245,507.03 million in 2013. Total assets of PBL stood at Tk. 254,912.20 million in 2014 from Tk. 243,868.80 million in 2013 registering a growth of 4.53 percent. The increase in assets of PBL was mainly driven by growth of customer deposits. The growth of deposits was used for funding growth in credit and holding of securities for SLR purpose and as a primary dealer. The economy witnessed a satisfactory growth scenario in credit and deposits mobilization.

Growth of Balance Sheet Items

ParticularsOutstanding Taka in Million Growth of

PBL

2014 2013 %

Assets 254,912 243,869 4.53

Deposits 204,838 201,907 1.45

Loans & Advances 147,367 153,589 (4.05)

Cash and Balance with Bangladesh Bank & its Agent

Consolidated position of the bank is Tk. 17,560 million in 2014 as against Tk. 17,665 million in 2013. PBL’s position decreased from Tk. 17,535 million in 2014 to Tk. 17,643 million in 2013 depicting a negative growth of 0.61 percent. The growth in deposits increased the Cash Reserve Requirement of the Bank which is maintained with Bangladesh Bank and its agent

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Balance with other banks and financial institutions

Consolidated position of the bank is Tk. 1,604 million in 2014 as against Tk. 1,080 million in 2013. PBL’s position increased from Tk. 1,513 million in 2014 to Tk. 870 million in 2013.

Investment

PBL’s investment increased during the year by Tk. 15,702 million and stood at Tk. 72,642 million as at 31 December 2014. The bank purchased government treasury bills to cover the increased SLR requirement. In addition, as a primary dealer PBL had to buy government treasury bills which were devolved by Bangladesh Bank.

Loans and Advances / Investments

Consolidated loans and advances/investments (credit under Islamic Shar’iah) of the bank stood at Tk. 152,719 million in 2014. Loans and advances of PBL was Tk. 147,367 million during 2014. Investment of Islamic banking branches was Tk. 10,902 million and with negative growth of 13.56 percent during 2014. Outstanding loans and advances of off-shore banking units was Tk. 8,632 million showing a growth of 42.68 percent. Yield on loans and advances of PBL decreased to 12.09 percent from the level of 13.85 percent of previous year due to increase of lending rates. Concentration of loans and advances was well managed and details of credit are given at notes to accounts no 7(a).4. Ratio of non performing loan of PBL was 7.61 percent which was much below the industry average of 9.69 percent.

Liabilities

Consolidated total liabilities (excluding equity) of the bank stood at Tk. 231,768 million in 2014 as against Tk. 222,149 million in 2013. The total liabilities (excluding equity) of PBL stood at Tk. 230,451 million in 2014 from Tk. 220,839 million in 2013 registering a growth of 4.35 percent. The increase in liability was mainly due to growth in deposits and borrowings.

Borrowings from other banks, financial institutions and agents

The borrowing of PBL stood at Tk. 7,669 million which represents PBL’s borrowing against PBL Bond, borrowings from other banks and institutions, repo of treasury bills and refinance against SME loan from Bangladesh Bank. The borrowed amount was mainly used for purchasing Treasury Bills/Bonds which were devolved on the bank in excess of SLR requirement.

Deposits

The deposits of PBL grew by 1.45 percent in 2014. Customer deposits of the bank grew by 1.45 percent. The growth was supported by branch network and high standard service provided to customers along with liability campaign carried out by retail liability team for mobilization of no cost and low cost deposits. Fixed deposits remained the main component of deposits contributing 42.90 percent of the total deposits. Interest cost of deposit increased to 7.36 percent as against 8.80 percent of the previous year as a result of increase in rates of high cost term deposits fuelled by the liquidity position in the market. Scheme deposits decreased by 1.90 percent over the previous year. The clientele group of the Bank was individuals, corporation, NGO, NBFI, government bodies etc.

Deposits Mix of PBL Types of Deposits

Outstanding Taka in million Growth over

%Mix (%)

2014 2013 2014 2013Current & Contingent 28,490 27,407 3.95% 13.91 13.57

Bills Payable 2,943 2,081 41.42% 1.44 1.03

Savings 25,106 21,126 18.84% 12.26 10.46

Special Notice Deposits 14,013 15,097 -7.18% 6.84 7.48

FDR 87,881 90,251 -2.63% 42.90 44.70

Scheme Deposits 46,405 45,945 1.00% 22.65 22.76

Total Deposits 204,838 201,907 1.45% 100.00 100.00

Shareholders’ Equity

Consolidated shareholders’ equity increased by 5.24 percent during the year. PBL’s shareholders’ equity increased by 6.21 percent during 2014. Paid-up capital of PBL stood

at Tk. 10,293 million during 2014. The statutory reserve increased by Tk. 656 million during the year and stood at Tk. 8,185 million. Distributable profit stood at Tk. 1,791 million during the year. The strong growth in shareholders’ equity will help the bank to expand its business.

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Analysis of Income Statement of PBLInterest Income

PBL’s interest income decreased by 16.20 percent during 2014. Interest earned from loan and profit earned on investment remained the principal component of interest income. Yield on loans and advances was 12.09 percent in 2014 as against 13.85 percent in the previous year.

Interest Expense

On the other hand, PBL’s interest expense decreased by 11.91 percent during 2014. Interest cost on deposits was the main component of interest expenses whereas interest cost on borrowings also had a significant impact in 2014. Interest cost of deposits decreased to 7.36 percent in 2014 from 8.80 percent.

Net Interest Income

PBL’s net interest income decreased by 33.70 percent during 2014. Net interest income was the main contributor to operating income, accounting for 24 percent followed by investment income and non-interest income.

Investment Income

PBL’s investment income consists of interest / discount earned on treasury bills / bonds, gain on government security trading, dividend received on shares and capital gain from sale of securities of listed companies. Investment income increased by Tk. 612 million during the year registering a growth of 11 percent over the previous year, accounted for 52 percent of the operating income. Since PBL is a primary dealer, securities were devolved by the Bangladesh Bank in excess of SLR requirement. As such interest/discount income became the main contributor to investment income.

Non-Interest Income

Non-interest income of PBL decreased by 0.75 percent

during the year. Commission and exchange based income of the bank decreased by 5.68 percent during the year due to fall in import business and lower spread between buying and selling rates of foreign currencies.

Total Operating Expense

Total operating expenses of PBL increased by 6.30 percent during the year mainly due to increase in personnel and other operating expenses. To match with the growth of SME and retail business and branch expansion a number of manpower was recruited along with sales force. PBL also made donation amounting to Tk. 131.20 million to Prime Bank Foundation to carry on various CSR activities. PBL also focused on developing brand image and increased promotional and advertisement expenses. This strategy added value to the business. The bank’s cost income ratio was 48.29 percent in 2014 which slightly increased from 41.98 percent in 2013 due to increased investment in branch expansion and development of IT infrastructure. Considering the factors stated above, the ratio indicates the satisfactory operating efficiency of the bank as per the industry standard.

BDT in millionSl No Particulars 2014 2013 % Change

1 Interest income 18,446 22,011 -16%2 Interest expense (15,574) (17,678) -12%3 Net interest income 2,872 4,332 -34%4 Investment income 6,194 5,582 11%5 Non-interest income 2,840 2,968 -4%6 Total operating income 11,906 12,883 -8%7 Total operating expenses 5,750 5,409 6%8 Profit before tax and provision 6,157 7,474 -18%9 General provision on loans 160 654 -76%10 Provision for classified loans 2,674 3,330 -20%11 General provision on off-balance sheet items - 10 -100%12 Provision for diminution in value of investments - 25 -100%13 Other provisions 52 10 409%14 Net profit before tax 3,280 3,445 -4.80%15 Provision for tax including deferred tax 887 1,616 -45%16 Net profit after tax 2,393 1,829 31%

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The productivity of the employee continued to grow which is evident from the following ratio:

BDT in million

Particulars 2014 2013

Income per employee 4.15 4.75

Expense per employee 2.01 1.99

Profit before provision per employee

2.17 2.76

Profit before tax per employee

1.14 1.27

Assets per employee 88.91 89.99

Provision for Classified Loans

The provision against classified loans increased during the year due to change in loan classification and provisioning policy by the Bangladesh Bank. Total provision against classified loan was Tk. 2,674 million during 2014 as against Tk. 3,330 million of previous year. Provision adequacy ratio was 107 percent.

Particular 2014 2013

NPL ratio 7.61 5.09

Industry averageof NPL ratio

9.69 12

Provision adequacy 100.38% 100.19%

General Provision

Adequate provision has been made against unclassified loans and advances and off-balance sheet exposures as per regulatory guideline. Provision against unclassified loans of off-Shore banking units was made Tk. 160 million during the year. This is to be noted that general provision is regarded as Tier-II capital of the bank and provides safeguard against future default as well as supports business growth by strengthening the capital base.

Other Provisions

Upon assessing the recovery prospects, the bank made full provision against protested bills and claims amounting to Tk. 6.5 million, delinquent asset for Tk. 76 million and impairment loss on investment equity for Tk. 45 million originated during the course of banking operations.

Net Profit before Tax

After making above provisions, net profit before tax of PBL stood at Tk. 3,280 million registering a negative

growth of 4.80 percent due to higher provision requirement due mainly change in loan provisioning policy by the Bangladesh Bank

Provision for Income Tax

Provision against current year income tax of PBL was Tk. 1,180 million compared to Tk. 1,616 million of preceding year.

Net Profit after Tax

Net profit after tax stood at Tk. 2,393 million registering a positive growth of 30.80 percent during 2014. Earnings per share increased to Tk. 2.32 as at December 31, 2014 from Tk. 1.78 in the previous year. Average ROA and ROE stood at 0.96 percent and 10.08 percent respectively.

Statutory Reserve

As per Bank Company Act 1991, 20 percent of profit before tax is required to be transferred to statutory reserve. As such an amount of Tk. 656 million has been transferred to statutory reserve.

Dividends

Thus fund available for distribution is Tk. 1,791 million (Tk. 1,737 million from current year profit plus Tk. 54 million from retained earnings of previous year). In order to maintain a satisfactory capital adequacy ratio of the bank, the Board decided to recommend 15 percent cash dividend for the year 2014. Satisfactory capital fund will enable the bank to increase business activities.

Remuneration of Directors

The Bank does not pay any remuneration to its Directors. As per the BRPD circular no. 09 dated 19/09/1996 that the Chairman may be provided car, telephone, Office chamber and private secretary. In addition to above, Directors are entitled to fees and other benefits for attending the Board, Executive Committee, Audit Committee and Shariah supervisory committee meeting. Managing Director is paid salaries and allowances as per approval of the Board and Bangladesh Bank.

Adequate Accounting Records

The directors’ responsibilities also include maintaining adequate accounting records and an effective system of risk management as well as preparation of the supplementary schedules included in these Financial Statements. The directors have made an assessment of the Bank’s ability to continue as a going concern and have no reason to believe that the business will not be a going concern in the year ahead.

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Accounting Policy and Implementation of BAS/BFRS

Board of Directors are responsible for the preparation and fair presentation of the Bank Annual Financial Statements, comprising the statements of financial position at 31 December 2014, and the statements of comprehensive income, changes in equity and cash flow for the year then ended, and the notes to the Financial Statements, which include a summary of significant accounting policies and other explanatory notes, and the Directors’ report, in accordance with Bangladesh Financial Reporting Standards (BFRS) and in the manner required by the Companies Act, 1994.

The directors’ responsibilities include: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of these Financial Statements that are free from material misstatement, whether due to fraud and error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Internal Control System

Board of directors have the responsibility for approving reviewing the overall business strategies and significant policies of the bank; understanding the major risks run by the bank, setting acceptable levels for these risks and ensuring that senior management takes steps necessary to identify, measure, monitor and control these risks; Senior management have the responsibility for implementing strategies and policies approved by the board; developing processes that identify, measure, monitor and control risks incurred by the bank; maintaining an organizational structure that clearly assigns responsibility, authority and reporting relationships; ensuring that delegated responsibilities are effectively carried out; setting appropriate internal control policies; and monitoring the adequacy and effectiveness of the internal control system. An effective internal control system also requires that an appropriate control structure is set up, with control activities defined at every business level. These include: top level reviews; appropriate activity controls for different departments or divisions; physical controls; checking for compliance with exposure limits and follow-up on non-compliance; a system of approvals and authorizations; and a system of verification and reconciliation.

Standards of Reporting

The financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards (BFRS) as adopted by The Institute of

Chartered Accountants of Bangladesh and applicable provisions of the Companies Act, 1994. Management accepts responsibility for the integrity and objectively of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect the financial operations of the Bank in a true and fair manner.

Going Concern

Going concern is one the fundamental assumptions in accounting on the basis of which financial statements are prepared. Financial statements are prepared assuming that a business entity will continue to operate in the foreseeable future without the need or intention on the part of management to liquidate the entity or to significantly curtail its operational activities. Therefore, it is assumed that the entity will realize its assets and settle its obligations in the normal course of the business. It is the responsibility of the management of a company to determine whether the going concern assumption is appropriate in the preparation of financial statements. If the going concern assumption is considered by the management to be invalid, the financial statements of the entity would need to be prepared on break up basis. This means that assets will be recognized at amount which is expected to be realized from its sale (net of selling costs) rather than from its continuing use in the ordinary course of the business. Assets are valued for their individual worth rather than their value as a combined unit. Liabilities shall be recognized at amounts that are likely to be settled.

No indication of possible problems of going concern: � Deteriorating liquidity position of the bank not

backed by sufficient financing arrangements. � High financial risk arising from increased gearing

level rendering the bank vulnerable to delays in payment of interest and loan principle.

� Significant trading losses being incurred for several years.

� Profitability of the bank is essential for its survival in the long term.

� Aggressive growth strategy not backed by sufficient finance which ultimately leads to over trading.

� Increasing level of short term borrowing and overdraft not supported by increase in business.

� Inability of the bank to maintain liquidity ratios as defined in the loan covenants.

� Serious litigations faced by the bank which does not have the financial strength to pay the possible settlement.

� Inability of the bank to develop a new range of commercially successful products

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Control Environment

Control activities are the policies and procedures which help ensure that management directives are carried out, and the necessary actions are taken to minimize the risks of failure to meet stated objectives. Policies and procedures are effectively established within the Bank and are continuously reviewed for compliance, adequacy and improvement opportunities.

The Board of Directors sets the tone for an effective control environment through regular reviews of the processes for identifying, evaluating, and managing significant risks. The Standard Operating Procedures (SOP) are signed off by each Head of Department to provide assurance that these standards are communicated, understood and complied with. An effective Control environment is set by top management and cascades across all business functions. Every year the top team conducts a self-assessment of key controls that affect the business and develops up action plans to make the internal control environment more robust

Supplier Payment Policy

PBL developed and implemented a set of payment polices for all suppliers. We explain the payment method and system and review the process with the vendor before issuing a purchase order. Bills are paid according to the payment terms and VAT and other withholding taxes are deducted from bills as per law. As of date there is no legal case filed by the Bank or filed against the Bank by any supplier.

Shareholders’ Value

PBL remains fully committed to delivery of higher shareholders’ value. The high profitability track record underpins the value the shareholders derived from investing in the shares of PBL. The earnings per share decreased and stood at Tk. 2.32 and return on equity stood at Tk. 10.08 during 2014. Market capitalization stood at Tk. 20,175 million as at December 2014 holding the 20th

position among the listed companies and 4th position among the listed banks in the Dhaka Stock Exchange.

Meeting of the Board

During the year 2014, 17 Board Meetings were held.

Appointment of Auditors

M/S ACNABIN and Syful Shamsul Alam & Co. Chartered Accountants were appointed for the year 2014 and will be completing their terms in the AGM. However, they are eligible for reappointment for next one year.

Annual General Meeting

Annual General Meeting will be held on 30th March 2015 at KIB Complex, Krishe Khemar Sarak at 11.00 a.m. The Directors’ Report and financial statements were approved at 430th Board Meeting held on 26 February, 2015 for presentation to the shareholders.

Note of Appreciation

We have been systematically implementing our Strategic Priorities and Action Plan since 2012. Continuous centralization of business process, changes to our corporate culture, leadership and structures, and a stronger performance orientation are the pillars of our program. Our clear objective is to become a profitable and sustainable bank. We want to be best in class in terms of growth, earning power and capital efficiency. We still have a long way to go, but I am convinced that we will make good progress in 2015, further improve our operating earning power and free cash flow, and reduce our net financial debt.

We, the board members attach great priority to achieving the earning power that will make it possible to distribute a dependable dividend to our shareholders. All our employees are working hard to ensure we can pay attractive dividends every year.

The progress we made in the past year confirms that with our strategies are on the right track to a successful future. We have more than 2,850 employees around the country working with great commitment and expertise to achieve this bank a successful one.

My special thanks to the Regulators, especially Bangladesh Bank for their guidance and recommendations without which the Bank might not have attained a steady growth. I would also like to give thanks to our customers, depositors, auditors, employees for their support and cooperation.

Many thanks and best regards for your trust and confidence on us.

On behalf of of the Board of Directors

Chairman

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Report on the Activities of Audit Committee

Among the three statutory Committees allowed as per Banking Company Act to assist the Board in running the affairs of Banking business, the Audit Committee happens to be most pivotal and for which Independent guidelines with regard to its constitution and functioning has been laid down by the regulators such as Bangladesh Bank & BSEC. Both the Regulators, however, focus on the common and prime objective of fulfilling oversight responsibilities and relevant check & balance functions on behalf of the Board.

Pursuant to the laid down guidelines, the Audit Committee has been discharging its responsibilities by reviewing the financial reporting process, the system of internal control and management of financial risks, the audit process, and the bank’s process for monitoring compliance with laws and regulations and its own code of business conduct.

The Committee also reports its activities to the Board of Directors on a periodical basis and passes independent opinion on the financial statements based on the findings of Audit & Inspections Teams which included both internal & external ones.

Formation & Members of the Committee

The Board of Prime Bank has been very meticulous in the formation of the Current Audit Committee which constitutes of 05 (five) members and majority members belonging to the Independent Category despite the requirement of lesser number as per BSEC guidelines. As directed, Members of the Committee are excluded from being a member of the Executive Committee and the Company Secretary discharges the function of the Secretary to the Committee.

Current Audit Committee was formed with the following members as per decision of the 418th Board Meeting held on 12/05/2014 in compliance with the BRPD Circular No. 11 dated October 27, 2013 issued by Bangladesh Bank and Bangladesh Securities and Exchange Commission (BSEC) notification SEC/CMRRCD/2006-158/134/admin/44 dated August 07, 2012:

NameDesignation in the committee

Status in the Board

Prof. Ainun Nishat ChairmanIndependent

DirectorMr. M. A. Khaleque Member DirectorMr. Khandker Mohammad Khaled

Member Director

Prof. Dr. Mohammad Aslam Bhuiyan

MemberIndependent

Director

Mr. Manzur Murshed

MemberIndependent

Director

All the members are financially “literate” and have accounting or related financial management experience.

Activities of the Committee

In line with the new organogram designed the previous year, the Committee successfully carried out its activities as per Audit Plan-2014 to attain the objectives of oversight and other relevant responsibilities, with the assistance of the Internal Control & Compliance teams that worked independently of Management and in compliance with the directives of Bangladesh Bank & BSEC.

In all, 10 (ten) meetings were held during the year where all the investigation reports in the form of agenda were presented for perusal and decision. The Committee made in-depth study of those memorandums and communicated its decision for required actions leading to removal of objection and regularization as appropriate. The committee also followed up the issues by seeking latest compliance reports to ensure its decisions were duly attended and numbers of lapses are finally reduced to ‘zero’. The Committee also drew attention of the concerned where necessary and also forwarded reports to the regular Board Meetings about issues of concern for further guidance.In discharging its due responsibilities, the Committee endeavored to bring about qualitative improvement in the approach of auditing with the prime objective of establishing a corporate & compliance culture in the operation of banking. The concentration, as such, was,

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all-through on the following fundamentals which also happen to be the base of Auditing functions:

� Internal Control � Financial Reporting � Internal Audit � External Audit � Compliance

The Committee also undertook the following:

i) Reviewed & approved the Audit Plan-2014 of Internal Audit & Inspection Department including IT Audit.

ii) Reviewed Management Letter issued by Bangladesh Bank & other External Auditors and Management response thereto as part of compliance activities.

iii) Reviewed expressed interest of 17 Audit Firms and upon scrutinizing, recommended for appointment.

iv) On the Risk Management issues, the committee directed updating all existing questionnaire/check list in light of the BCA-2013 to ensure mitigation of the risks inherent with the banking business.

v) The committee reviewed statements on ICAAP (Internal Capital Adequacy Assessment Process) under SRP (Supervisory Review Process) for the year 2012 & 2013 as per guidelines of Bangladesh Bank and advised maintaining required preparedness for the periodical dialogue/reviews on the subject with the Bangladesh Bank.

vi) Conducting inspections of the wholly owned subsidiaries abroad.

vii) Brought Shariah Audit & inspection Report under the scrutiny of the committee to maintain uniformity in the oversight responsibilities as per BCA.

In addition, the Committee made the following recommendations:

i) Recommended for opening Islamic Desk at all branches of the bank to respond to customer’s popular demand of Shariah based Banking services across the country.

ii) Recommended for IT Test Area & Lab facilities to build up technical expertise through practical exercises.

iii) Directed Management to arrange special training program to acquaint all the employees about the range & use of T-24 System for controlling lapses in banking system T24.

iv) Advised formation of Task force for resolving non compliance issues upon segregation of the audit objections nature & merit-wise and setting time schedule for completion accordingly.

The Committee obtained all the satisfactory information & explanations to the best of the members’ knowledge and necessary for the purposes of auditing. The committee opines that all the transactions of the Bank which had come to notice were found complied with the directives of the regulators. The Committee also expresses its satisfaction on the external auditors’ objective, expertise and resources in performing their due role.

Before concluding, I would like to extend sincerest thanks to all the members of the Audit Committee for their time and support to carry forward the challenges of the committee. I would also like to thank the members of the Board of Directors for allowing the Committee to discharge its due function as a self-regulating assistive committee of the Board.

Prof. Ainun NishatChairman

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Report of Prime Bank Shari’ahSupervisory Committee

Bismillahir Rahmanir Rahim.

All praises are for Allah Subhanahu-wa-ta’ala. He is the One and Second to none.

Salat and Salam are on Hazrat Muhammad (peace be upon him) who is the best Prophet and the last messenger of Allah.

In the year 2014, three meetings of Prime Bank Shari’ah Supervisory Committee were held where different operational issues including those referred to by the Management of the Bank were perused by the Committee and necessary guidelines and counseling were provided thereon. Respected members of the Committee also addressed IftarMahfils arranged by the Islamic Banking Division of the Bank and held formal and informal discussions on Shari’ah issues that inspired all concerned for compliance with Shari’ah principles. Apart from this, the Muraqibs audited all Islamic banking branches during the year 2014 and submitted reports thereon. Based on the reports, some branches were advised to improve their standard of Shari’ah compliance in certain areas.

After reviewing Shari’ah audit reports, the Prime Bank Shari’ah Supervisory Committee opined that awareness on Shari’ah compliance has been increased during the year under report, among the officials related to investment and also among the investment clients as compared to the previous year. It has also been observed from the reports of the Muraquibs that desk level violations in investment deals have been substantially decreased. Most of the Shari’ah violations occur due to non-availability of Islamic banking software.

Based on the Committee observations, the Management of the Bank considered installing Islamic banking software as a special project and has given top priority to install the software at the earliest. It has also been observed that Shari’ah audit conducted by the Muraqibs resulted in increased commitment on Shari’ah compliance among the branch officials.

Besides providing observations and guidelines, the Shari’ah Supervisory Committee also recommended the Management for doing the needful for advancement of Islamic banking operations at Prime Bank. It was suggested that training on Shari’ah principles should be enhanced and the manpower of Islamic banking branches of all tiers should be brought under the process.

The Committee recommended to engage manpower having sufficient knowledge and to impart training on Islamic Shari’ah at all Islamic banking branches to ensure proper observation of Islamic mode of finance and banking in investment operation and the Committee also felt that officials should be more cautious about Shari’ah compliance while financing, especially in buying and selling of goods. Furthermore, strict supervision of Islamic banking activities based on Manual/SOP prepared for the purpose was stressed by the Shari’ah Supervisory Committee.

May Allah give us Taufique to attain His satisfaction through implementation of Shari’ah in every sphere of life.

Ameen.

Abu Zafar Md. Sheikhul IslamMember Secretary

Prof. Maolana Mohammad SalahuddinChairman

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CEO/CFO DeclarationTo The Board

30th March, 2015

Board of Directors Prime Bank Limited Adamjee Court Annex Building-2119-120 Motijheel Commercial AreaDhaka-1000

SUB: CEO/CFO DECLARATION TO THE BOARD

The following is provided to the Board of Directors of Prime Bank Limited in our capacity as the persons responsible for performing the functions of Managing Director & CEO and Chief Financial Officer of the Bank.

In accordance with the notification of Bangladesh Securities and Exchange Commission No.SEC/ CMRRCD/2006-158/134/ Admin/44 dated 07, August, 2012 we declare that for the financial year ended 31 December, 2014:

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

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

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

ii) There are, to the best of knowledge and belief, no transactions entered into by the Bank during the year which are fraudulent, illegal or violation of the Bank’s code of conduct.

Managing Director & CEO Chief Financial Officer (Acting)

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C O R P O R A T E G O V E R N A N C E R E P O R T

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CorporateGovernance Report

The Board of Directors is fully committed to maintaining the highest standards in corporate governance, professionalism and integrity in driving Prime Bank to create and deliver long-term sustainable shareholder value.

In line with the Bank’s aspirations, the Board has continued to ensure that the highest standards in corporate governance are upheld, with a view to continuously enhancing stakeholder value, increasing investor confidence, establishing customer trust and building a competitive organization, whilst at the same time not losing sight of its stakeholders by establishing and overseeing requisite governance policies and processes.

Board of Directors

Policy on appointment of DirectorsPrime Bank Limited does not have its own policy on appointment of Directors. PBL always complies with the prescription of the regulatory authorities regarding appointment of directors. Bangladesh Bank circulars, BSEC notification, Bank Company Act and Company Act are strictly followed regarding this matter. In order to be a member of the Board, a Director other than a nominated and alternate Director must maintain at least two percent of the outstanding shares of the company. The Independent Directors are excused from such requirements.

As per the Companies Act, 1994, non-executive Directors are subject to retirement. At least one-third of the non-executive Directors shall retire by rotation in every AGM. As per Bangladesh Bank’s guidelines, a Director may be assigned for a period of three years and the term may be prolonged for another three years period. The Managing Director is elected for a minimum period of three years subject to the approval of Bangladesh Bank. The office of the Managing Director is not subject to retirement by rotation. The term of an Independent Director is three years and may be lengthened by another tern of three years.

Composition of the Board of Directors – Non-executive Directors and Independent DirectorsAll directors of the Board are non-executive directors

including three independent directors appointed by the Board and approved by the shareholders in the AGM. Bangladesh Securities Exchange Commission (BSEC) has also approved their appointment.

Independent DirectorAs per SEC Circular No. SEC/CMRRCD/2006-158/134/Admin/44, dated August 07, 2012, the elected directors of the Board of PBL nominates three independent directors in the Board of Directors so that the Board contains core skills considered appropriate in the framework of the company.

Independent Director’s independenceAs per the Bank Companies Act (Amended) 2013 at least 3 (three)of the total Directors should be Independent Directors. In order for a Director to be eligible as an Independent Director, the Board constructively establishes that the Director has no substantial relationship with PBL either as a partner, shareholder or officer of an organization that has a relationship with PBL that would prevent that nominee from becoming an Independent Director. For the purpose of such determination, the Directors consider that the Independent Director does not hold any share of the Company; who is not associated with the Company’s Promoters or Directors or Shareholders who maintains one percent or more than one percent shares of the total paid up shares of the Company; on the basis of family relationship; who does not have any other relationship, whether monetary or otherwise,with the company or its subsidiary/associate companies; who is not a member, Director or officer of any Stock exchange and who is not a shareholder,Director or officer of any stock exchange or an intermediary of the capital market. The Independent Director is engaged for a period of three years which may be extended by one term only. A person cannot be appointed as Independent Director who has already been appointed as an Independent Director of three listed companies

Chairman and CEOThe positions of the Chairman of the Board of Directors and CEO are filled by different individuals and this has been in practice from the inception of PBL. This also complies with Section 1.4 of the BSEC’s notification on Corporate Governance Guidelines. All directors are

53

financially literate and quite a few of them are from Financial Management background, which shows that PBL has an enriched Board of Directors.

Selection and Appointment of New DirectorsIn context to the selection and appointment of new directors, the existing Board of Directors has the following obligations and duties:

1. Frequently asses the size and structure of the Board and the mix of knowledge, skills, experience and perceptions that may be necessary to allow the Board to perform its functions.

2. Recognize any capabilities not sufficiently represented and approve the procedure necessary to be certain that an applicant designated by the shareholders with those capabilities is nominated

The directors are selected by the shareholders in the Annual General Meeting. Casual posts, if any, are filled up by the Board in accordance with the conditions in the Companies Act and Articles of the Company.

Retirement and Re-election of Directors

As per Companies Act, Bank Companies Act and Articles of Association of the Company, each year one-third of the Directors retire from the office and depending on eligibility, may offer themselves for re-election by shareholders at the Annual General Meeting. As per routine procedure following directors will retire at the 20th AGM:

1. Mr. Nafis Sikder2. Mr. Imran Khan3. East Coast Shipping Lines Limited4. Prof. Ainun Nishat - Independent Director5. Prof. Dr. Md. Aslam Bhuiyan - Independent Director6. Mr. Manzur Murshed - Independent Director

Among the above six Directors, the following three are eligible for re-election:

1. Mr. Nafis Sikder2. Mr. Imran Khan3. East Coast Shipping Lines Limited

While the rest three, as per BSEC Notification on Corporate Governance are not eligible for re-appointment as they have completed 02 (two) terms consecutively. As such, the Board of Directors in its 430th Meeting on 26.02.2015 appointed the following three distinguished personalities as Independent Directors of the Bank for a term of 03 (three) years subject to approval of the regulators and the consent of the shareholders in the 20th AGM:

1. Dr. G.M. Khurshid Alam

2. Dr. Shamsuddin Ahmed

3. Mr. M. Farhad Hussain, FCAA brief on the qualifications and experiences of the respective Independent Directors are furnished below:

Dr. G. M. Khurshid Alam

Educational Qualifications: Ph.D. Economics, Boston University, Boston,

M.A. Economics, Boston University, Boston,

M.A. Economics, Dhaka University,

B.A. (Honors) Economics, Dhaka University

Experience: � Senior Private Sector Specialist, The World Bank.

� Private Sector Development and Finance Sector (PSD&F) Unit, The World Bank

� Consultant, Annual Review of the DFID/EU

� Consultant, USAID

Present Attachment: Director (Operations) of Policy Research Institute (PRI) since 1st January 2014.

Dr. Shamsuddin Ahmad

Educational Qualifications:Ph.D. (Economic Development) , University of Hawaii,

USA

M.A. Economics, University of, Hawaii, USA

M.B.A. Finance, IBA, Dhaka University,

Experience: � Senior Financial Sector Specialist, South Asia

Finance and Private Sector Development Unit, The World Bank, Washington DC.

� Consultant, Hawaii State Tax System

M. Farhad Hussain FCA

Educational Qualifications: � Accountancy Foundation Course, Institute of

Chartered Accountants of England and Wales

� GEC ‘A’ Levels

Professional Qualification: FCA

Experience: � World Bank Consultant

� RIRA, Consultant

� Katalyst, Consultant

� Corporate Director, Bengal Group of Companies

� Audit Manager, Lawrence & Co, Birmingham, UK

� Audit Senior, Calthorpes Chartered Accountants, UK

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Present Attachment: � Managing Partner, Hussain Farhad & Co.,

Chartered Accountants

� Council Member, ICAB

� Director, Dhaka WASA

� Independent Director: Matin Spinning Mills Ltd

� Independent Director: Alhaj Textile Mills Ltd

� Director: Bay Asset management Ltd.

Role and Responsibilities of the BoardThe Prime Bank Board is responsible for the periodic review and approval of the overall strategies, business and significant policies of the Bank. The Board also sets the Bank’s core values, adopts proper standards to ensure that the Bank operates with integrity, and complies with the relevant rules and regulations.

The Board’s responsibilities are, but are not limited to: � Reviewing and approving the strategies and

business plans for the Bank

� Approving the Bank’s annual budget and carrying out periodic review of the achievements by the various operating divisions against their respective business targets

� Prescribing the minimum standards and establishing policies on the management of credit risks and other key areas of the Bank’s operations

� Ensuring that the operating infrastructure, systems of control, systems for risk identification and management, financial and operational controls, are in place and properly implemented

� Reviewing the adequacy and integrity of the Bank’s internal control systems

� Overseeing the conduct and performance of the Bank’s businesses

� Succession planning, including ensuring all candidates appointed to senior management positions are of sufficient calibre and programmes are in place to provide for the orderly succession of senior management.

� Reviewing succession planning and talent management plans for the Bank and approving the appointment and compensation of senior management staff

� Approving changes in the corporate organization structure

� Approving policies relating to corporate branding, public relations, investor relations and shareholder communication programmes

� Reviewing the Bank’s strategies on promotion of sustainability focusing on environmental social and governance aspects

The Board duly complies with the guidelines issued by Bangladesh Bank, BSEC, Bank Company Act and Company Act regarding the responsibility and accountability of the Board, its Chairman and Managing Director.

Code of Conduct for the Board of DirectorsThe Board of Directors follows a Code of Conduct which was adopted to provide guidance to directors to carry out their duties in an honest, responsible and businesslike manner and within the scope of their authority, as set forth in the laws of the country as well as in the Memorandum and Articles of Association of the Company.

The Code of Conduct states:

1. The Members shall act honestly, in good faith and in the best interests of the shareholders and the company.

2. The members shall not make improper use of information acquired as a director.

3. The members shall not take improper advantage of the position as a director.

4. The members will be obligated to be independent in judgment and actions and take all reasonable steps to be satisfied as to the soundness of decision taken by the board of directors.

5. Confidential information acquired by the members in the course of exercise of directorial duties shall remain the property of the company and it will be improper to disclose or allow it to be disclosed, unless that disclosure has been authorized by the company, or the person from whom the information has been received.

6. Members shall make every effort to attend all Board and Committee Meetings during their tenure. They will not absent themselves without good reasons or confirming leave of absence.

7. To maximize effectiveness of the Board/Committee Meetings, contribution of individual director shall be monitored and appraised on an annual basis.

8. Board members having interest of any nature in the agenda of the meeting, shall declare beforehand the nature of their interest and withdraw from the room, unless they have a dispensation to speak.

9. Training opportunities/orientation/workshops will be arranged for the members (especially for the newly inducted members) to make them acquainted with the international best practices, their fiduciary obligations, Code of Conduct etc.

10. Members shall always maintain ‘Fit and Proper

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Test Criteria’, clean CIB status and other obligations declared by the Primary and other Regulators.

11. Members shall be judicious about their entitlement of benefit/privileges as per Banking Companies Act -1991 and all circulars issued by Bangladesh Bank and shall be willing to produce supporting documents, if required.

12. Members shall comply with Article 23.1 of the Bank’s Memorandum and Articles of Association of the Company while making Sale-Buy of Company’s share and shall refrain from making such transaction without formal declaration.

Every Director will assure annually signing a confirmation that they have gone through, have complied with and will continue to comply with the set of codes approved by the Board of Directors.

Directors’ RemunerationDirectors are not eligible to any remuneration other than attendance fee for the board and its Committee Meeting. As per BRPD Circular No. 03, dated January 18, 2010, directors are eligible to the remuneration of BDT 5,000 for each Meeting.

Chairman of the BoardThe Chairman of the Board is elected to the office of the Chairman by the directors. The Board considers that the Chairman is independent.

Role and Responsibilities of the Chairman The role and responsibilities of the Chairman are:

� 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

� 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’s operation or ask for investigation into any 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.

Besides this, the Chairman may/shall assume any other responsibility if the Board assigns within the purview of the Rules, Regulations, Acts and Articles of the Bank. The Chairman’s responsibility is defined by the Board as directed by BSEC’s notification on CGG.

Non-executive Director’s independenceAll the Directors except the MD are non-executive Directors in the Board. None of the Directors takes part in the day to day affairs of the Company. They attend only in the Board/Committee meetings to discuss the agenda reserved for the Board/ Committees.

Policy on training of Board of Directors Prime Bank is fully committed to maintain highest standards of Corporate Governance & professionalism in driving Bank’s progress on the principles of transparency and openness. For this purpose, training at home and abroad especially on the Corporate Governance is encouraged by the Board. As such, whenever opportunities arise, bank utilizes the same to train and orient its members. Recently few Directors along with the Chairman attended a workshop titled “Revisiting Corporate Governance Regulations for Banks in Bangladesh” organized by Bangladesh Bank in association with IFC. There are also records of Directors taking part in Training Courses abroad on Corporate Governance. A Code of Conduct has also been adopted by the Board to be followed by its Members and annual compliance of the Code is ensured. Besides, all relevant regulations promulgated/circulated time to time by the concerned authorities are placed to the Board Meeting on regular basis to keep the members updated.

Appraisal of the Board’s performancePrime Bank Limited doesn’t have a scheme for annual appraisal of the board’s performance till date, but the company is abiding by the Code of Conduct which was formulated by the Board. The Board members have always taken decisions that have benefited the bank as a whole and they have always performed their duties outstandingly. Also, the Board members have always been appraised at the AGM and shareholders have always been very supportive of the Board’s decisions.

Evaluation of the CEO by the BoardThere is a three year (2014-2017) Strategic Priorities & Action Plan (KPI) for the evaluation of the CEO/Management on an annual basis and it is revised from time to time accordingly by the Board.

The CEO is also evaluated on an annual basis and is also given KPI’s for the years ahead. The Board has the

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capability to evaluate the CEO whenever it wishes so. All CEO’s are evaluated after their term, and on the basis of their evaluation is appointed for another term if the Board approves of it.

Knowledge and Expertise in Finance and AccountingThe Board of Directors of Prime Bank Limited comprises of members who boast a wide diversity of knowledge and experience in finance, economy, management, business administration, marketing and law. This is to ensure that together, they can devise the appropriate policy for the growth of the bank while having expertise skills, ability to perceive matters in a bigger perspective and adequate independence to review the management in a sensible manner. One of the directors has exquisite knowledge on finance and has also completed his article ship in the Chartered Accountancy profession (CACC). Details about Prime Bank’s directors can be found on page 20.

Role and Responsibilities of the CEOThe responsibilities and authorities of the Managing Director are as follows:

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

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

c. The CEO shall include information on violation of any law, rules, regulation including Bank Company Act, 1991 while presenting memos before the Board or the committee formed by the board.

d. CEO will provide all sorts of information to Bangladesh Bank about the violation of Banking Companies Act, 1991 and/ or any violation of Laws, rules and regulations.

e. The recruitment and promotion of all staff of the bank except those in the two tiers below him shall rest on the CEO. He shall act in such cases in accordance with the approved service rules on the basis of the human resources policy and sanctioned strength of employees as approved by the board. The board or the chairman of any committee of the board or any director shall not get involved or interfere into such affairs.

f. The authority relating to transfer and disciplinary measures against the staff, except those in the two tier below the CEO, shall rest on him, which he shall apply in accordance with the approved service rules. Besides, under the purview of the human resources policy as approved by the board, he shall nominate officers for training

Besides, the Managing Director shall assume any other responsibility if the Board assigns within the purview of the Rules, Regulations, Acts and Articles of the Bank.

Board MeetingsThe Board meets as required to discuss business strategy, financial performance, matters pertaining to compliance and governance as well as reports on matters deliberated by the respective committees. The Board reviews, amongst others, the financial performance of the Bank and subsidiaries, risk management and compliance reports and approve the quarterly results of the Bank at its meeting. The 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 ad-hoc matters that require the Board’s urgent attention and decisions. A Board meeting is held at the beginning of the year to discuss the Bank’s Business plan and Budget.

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. The minimum information required for the Board to make an informed and effective decision includes background, objective, key issues, rationale, financial and non-financial impact of the proposal. 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.

Role of the Company SecretaryCompany Secretary is responsible for advising the Board on issues relating to corporate compliance with the relevant laws, rules, procedures and regulations affecting the Board and the Bank, as well as best practices of governance. He is also responsible for advising the Directors of their obligations and duties to disclose their interest in securities, disclosure of any conflict of interest in a transaction involving the Bank, prohibition on dealing in securities and restrictions on disclosure of price-sensitive information.

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The responsibilities of the Company Secretary comprises of:

i. Ensuring the compliance of the Bank in relation to financial and legal practices, as well as issues of corporate governance. He acts as a point of communication between the management, board of directors, company shareholders, reporting in a timely and accurate manner on company procedures and developments

ii. Ensure the Bank complies with its governing document, policies, company law and any other relevant legislation i.e. regulations with Bangladesh Bank, Bangladesh Securities and Exchange Commission (BSEC) and Registrar of Joint Stock Companies etc. Support and advise the Chair by ensuring the smooth functioning of the Board. Work in partnership with the Chief Executive and other Trustees to ensure the activities & operations of the Bank.

iii. Support the Chairman in the smooth functioning of the Board. Receive agenda items from other Directors/staff and ensure appropriate agenda items are tabled at Board meetings. This is done in consultation with the Chief Executive and the Chair who is responsible for preparing Board meeting agendas.

iv. In line with Bangladesh Bank guidelines the company secretary has to act as the Secretary to the Audit Committee of the Board of Directors. In this area of risk mitigation, the Company Secretary has a pivotal role to play in support of the members of the Audit Committee, Board Audit Cell, Audit & Inspection Division and Internal Control & Compliance Division.

v. Act as a custodian of Banks governing documents and policies. Ensure the Bank pursues its objects as defined in its governing document. He should act as a custodian of the interests of the Bank. So it is his prime duty to protect and safeguard such interests of the Bank at all levels: statutory, administrative, and arbitrational and in other policy matters. He should also ensure that Board meeting minutes are signed by the Chair once they have been confirmed and copies filed and kept at the Bank.

vi. Ensure the appointment of Bank’s board members, that those appointed are not disqualified in law and are eligible to be members under the provisions of the governing documents and policies, and that the appointment procedure laid down in the governing document and policies is followed.

vii. Make sure that the Directors have information to enable them to comply with the decisions and fulfil their responsibilities. This includes organizing the induction of new Directors also.

viii. Ensure that Board meetings are held in compliance with Bank’s governing documents and arrangements for the meetings are made.

ix. Confirms that Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) are run effectively and in accordance with the provisions of Bank’s governing document. This includes checking that a quorum is present. Also make sure that agendas and minutes of AGMs and EGMs are circulated timely.

x. File the annual list of members and summary of share capital together with the authenticated Balance Sheet and the Profit and Loss account. Issue Dividend Warrants, bonus share certificates and make arrangement for disposal of fractional shares, if any.

xi. Maintain strict confidentiality of information, manage situations like conflict of interest, identify problems and implement or recommend solutions.

xii. Maintain and liaise with various corporate bodies viz. BAB, ABB, Chambers/other bodies, regulators.

Vision, Mission and Strategy approved by the Board

Vision/Mission approved by DirectorsThe Board of Directors has approved the vision and mission statements of Prime Bank, and adheres and strictly follows what has been approved. They strongly believe in the vision and mission set for PBL and try to apply them in every business context possible. The Vision and Mission statements can be found on 10 & 11.

Business objectives and areas of business focusPBL’s Board has set business objectives and areas for business focus since its inception. As the country’s economy grew, the Board has changes its objectives and focus areas accordingly. PBL has always tried to change its objectives when the situation has changed, and focused its business on sectors that have been thriving whenever the opportunity has come up. The latest business objectives and areas of business focus can be found in the “Statement Regarding Forward Looking Approach” section of the annual report on page 15.

Strategies to achieve the business objectivesPBL always sets up a Strategic Action Plan in the

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beginning of the year to align its business objectives for the year with its strategies. The Board always sets strategies accordingly to give direction to the management of the Bank on how to steer the bank forward for the upcoming year. Strategies set to achieve the business objectives can be found in the “Strategic Priority” section of the annual report on page 13.

Audit Committee

Chairman is an independent Non-Executive DirectorThe Chairman of the Audit Committee is a BSEC approved independent non-executive director, who is not involved in the day to day operations of the bank. He is an experienced individual and competently qualified to qualify to be the Chairman of the Audit Committee.

Terms of Reference (TOR) and empowerment to investigate employeesThe Audit Committee established a terms of reference (TOR) so that it could function effectively and smoothly. The TOR was created to define the roles and responsibilities of the Audit Committee. The committee is also empowered to investigate/question employees and retain external counsel when required.

Composition of the Audit CommitteeAs 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 5 members. The Audit Committee is constituted of 2 Directors and 3 Independent Directors. All members of the Audit Committee are non-executive directors.

All members suitably qualifiedAll members of the Audit Committee are very well qualified and have years of experience in the banking sector. They are also very competent regarding education and come from a variety of educational backgrounds, which brings diversity in the committee. PBL does have one director in the Audit Committee that has extensive knowledge in the finance and accounting field, and has been very active in all the meetings of the committee as well.

Head of Internal Audit’s access in the Audit CommitteeThe Head of Internal Audit always has access to the audit committee and can raise his concerns whenever required.

Terms of ReferenceTo steer the Audit Committee forward, a terms of reference (TOR) has been established. According to the

TOR for the Audit Committee, some of the roles and responsibilities are as follows:

1.0 PurposeTo monitor and review the formal arrangements established by the Board in respect of:

a. The financial reporting and narrative reporting of the Bank

b. The effectiveness of the internal controls and the risk management framework

c. Whistle blowing

d. Internal audit process

e. External auditors’ appointment/reappointment.

The Committee will act independently to ensure that the interests of shareholders are properly protected in relation to financial reporting and internal control, always within the principle of all directors having a duty to act in the interests of the Bank and all directors remaining equally responsible for the Company’s affairs.

2.0 AuthorityThe Audit Committee is a committee of the Board of the Company. The Committee is authorized by the Board to:

a. Investigate any activity within its terms of reference and have such direct access to the resources of the Bank as it may reasonably require

b. Seek any information that it requires from any employee, and all employees are directed to co-operate with any request made by the Committee

c. Engage outside legal or other independent professional advisers and obtain appropriate funding for the payment of relevant fees and expenses.

Where the Committee is not satisfied with any aspect of the proposed financial reporting by the Company it shall report its views to the Board of the Company. In the event of any disagreement between the Committee; members and the rest of the Board, such matters will be resolved at Board level.

3.0 ResponsibilitiesFinancial Affairs of the Group

� To monitor the integrity of the financial statements of the Bank (and any discussion or analysis thereof including annual and interim reports), and any formal announcements relating to the Bank’s actual and forecast financial performance, reviewing significant financial reporting judgments contained in them.

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� To review any unusual items or matters brought to its attention requiring the exercise of managerial judgment affecting the preparation of the statements and announcements

� To provide a forum for the discussion and resolution of areas of disagreement in relation to the statements and announcements, e.g. between management and the External Auditor

Accounting, Financial Reporting and Regulatory Compliance

� To review, and challenge where necessary, the actions, estimates and judgments of management (and any changes in them), in relation to the interim and annual financial statements before submission to the Board, paying particular attention to:

(1) Significant accounting policies and practices, and any changes in them

(2) Disclosures and estimates requiring a major element of judgment

(3) The extent to which the financial statements are affected by any unusual transactions in the year, the methods used to account for any significant or unusual transactions where different approaches are possible, and how such transactions are disclosed

(4) The clarity and completeness of disclosures, and the context within which financial statements are made

(5) Compliance with accounting standards

(6) Compliance with legal and regulatory requirements

(7) The going concern assumption

(8) The representation letter to the auditors; and

(9) All material information presented with the financial statements including the business review, and corporate governance statements relating to the audit and risk management.

� To review the controls and procedures established by management for compliance with regulatory and financial reporting requirements and with the requirements of external regulators

� To review the content of the annual report and accounts and advise the Board on whether, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the company’s performance, business model and strategy. The review undertaken by the Committee

should assess whether the narrative is consistent with the accounting information.

Standards of Internal Control

� To review the arrangements of the Bank’s systems of internal controls in relation to financial management, compliance with laws and regulations and safeguarding of assets, and the procedures for monitoring the effectiveness of such controls

� To monitor any significant deficiencies and material weaknesses in internal controls and disclosure controls and procedures, as reported by Internal Audit and the External Auditor, and the implementation by management of appropriate remedial action

� To review arrangements for the receipt, retention and treatment of complaints including those regarding accounting, internal accounting controls or auditing matters. To review procedures by which employees may, in confidence and with anonymity, raise concerns including those of questionable financial reporting, accounting or auditing matters.

� To monitor and review in broad terms the scope, nature of the work and effectiveness of Internal Audit and to receive and review its reports, findings and recommendations covering key operating risks.

� Review the arrangements made by the management for building a suitable Management Information System (MIS) including computerization system and its application

� Review the existing risk management procedures for ensuring an effective internal check and control system

� Evaluate whether management is setting the appropriate compliance culture by communicating the importance of internal control and the management of risk and ensuring that all employees have understanding of their roles and responsibilities

� Review the corrective measures taken by the management as regards the reports relating to fraud-forgery, deficiencies in internal control or other similar issues detected by internal and external auditors and inspectors of the regulatory authority and inform the board on a regular basis

The Group’s Relationship with its External Auditors

� Make recommendations to the Board, to be put to

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shareholders for approval at the Annual General Meeting, on the appointment, reappointment and removal of the external auditor. The Audit Committee shall oversee the process for selecting the external auditor

� Oversee the relationship with the external auditor, including:

a) Approving the terms of engagement (and the engagement letter) of the external auditor, including the remuneration to be paid

b) Assessing the external auditor’s effectiveness, independence and objectivity, ensuring that key partners are rotated at appropriate intervals

c) Agreeing the policy for, and where required by that policy, approving the provision of non-audit services by the external auditor and the related remuneration

d) Agreeing with the Board a policy on the employment of former employees of the Bank’s auditor, and monitoring the implementation of this policy

� Review and approve the annual audit plan, and ensure that it is consistent with the scope of the audit engagement, and coordinated with the activities of the Internal Audit function

� Discuss with the external auditor, before the audit commences, the nature and scope of the audit and review the auditor’s quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements

� Review the findings of the audit with the external auditor, considering the external auditor’s management letter and management’s responsiveness to the auditor’s findings and recommendations

� Review reports prepared by the external auditor as the Audit Committee shall require, considering management’s response to any major external audit recommendations

� Review annually and report to the Board on the qualification, expertise and resources, and independence of the external auditors and the effectiveness of the audit process, with a recommendation on whether to propose to the shareholders that the external auditor be re-appointed. The assessment should cover all aspects of the audit service provided by the audit firm, and include obtaining a reporting on the audit firm’s own internal quality control procedures and consideration of the audit firm’s annual transparency report where available

� Ensure that the audit committee section of the annual report should include an explanation of

how the committee has assessed the effectiveness of the external audit process and the approach taken to the appointment or reappointment of the external auditor, including length of term

� Review the audit representation letters before signature, giving particular consideration to any non-standard issues within the representations

Other Responsibilities

� Place compliance report before the board on quarterly basis regarding regularization of the errors & omissions, fraud and forgeries and other irregularities as detected by the internal and external auditors and inspectors of regulatory authorities

� Perform other oversight functions as requested by the board and evaluate the committee’s own performance on a regular basis

Audit committee’s review on internal controlsThe Internal Audit Division of the bank reviews the internal control systems of the bank and ensures that internal controls are considered properly managed and satisfactorily supervised. The Internal Audit Division reviews internal controls throughout all divisions/branches of the bank and then reports to the Audit Committee on their findings. The Audit Committee then reviews the report submitted by the Internal Audit Division, and provides feedback on the lapses found. The Audit Committee also guides the Internal Audit Division on how to properly monitor internal control and ensure that internal controls are being correctly administered throughout the bank. The Audit Committee is committed that internal controls are well conceived, properly administered and satisfactorily monitored by the bank in 2014.

Audit committee’s role in compliance with laws and regulationsPBL being a part of the banking industry in Bangladesh is obliged to act in accordance with applicable laws and regulations. There are several regulatory authorities, primarily Bangladesh Bank, who are associated with the company’s operation and performance. The Audit Committee supervises and guarantees the Board, that the company obeys all the applicable laws, rules and regulations of various regulatory authorities. The Audit Committee takes all measures to ensure that PBL complies with all laws and regulations and that all statutory dues are being settled timely.

Audit committee’s contribution in the external audit functionThe Audit Committee analyses the audited financial statements with management and the external auditors to ensure that the Company’s financial statements are

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objectively presented in compliance with the relevant Bangladesh Financial Reporting Standards, International Financial Reporting Standards and Bangladesh Accounting Standards in all substantial aspects, based on its review and consultations with management and the external auditors. External Auditors’ are requested to attend the Audit Committee meeting where Financial Statements of PBL is revised for circulation to the Public. The Committee also implements an annual assessment of the efficiency of the Company’s Internal Audit function and certifies that Internal Audit has sufficient resources to accomplish its duties. The audit committee has quite a few roles regarding the external audit functions:

1. Ensure effective coordination of external audit functionFrequent and open interaction between the audit committee and the auditor is necessary for the audit committee to acquire the information it needs to accomplish its responsibilities to administer the company’s financial reporting processes. The quality of communications also provides opportunities to assess the auditor’s performance. The auditors should correspond with the audit committee as noteworthy issues develop. Such communications will emphasis on the key accounting or auditing issues that, in the auditor’s finding, give rise to a greater risk of material misstatement of the financial statements, as well as any questions or concerns of the audit committee. Through proper communication, the audit committee ensures the effective coordination of the external audit function.

2. Ensure independence of external audit functionThe auditor must be independent of Prime Bank Limited. Audit committee is familiar with the statutory and regulatory independence requirements for auditors. The technical competency of the auditor alone is not appropriate to ensure a high-quality audit. The auditor also must exercise a high level of objectivity and professional skepticism. The audit committee’s interactions with the auditor during the audit provide numerous opportunities to evaluate whether the auditor demonstrated integrity, objectivity and professional skepticism.

3. Review the external auditors’ findings in order to be satisfied that appropriate action is being takenThere are many reviews that happen throughout the entire process during the audit committee meetings held. The audit committee extensively reviews all findings of the external auditors and ensures that management is informed and is taking action for resolving any discrepancies. Before the financial statements are signed, the audit committee reviews all the findings and ensures that they are satisfied with the actions that management has taken.

4. Review and approve non-audit work assigned to the external auditor and ensure that such work does not compromise the independence of the external auditorExternal auditors should not carry out work that does not relate directly to the discharge of audit functions, if it would impair the auditors’ independence, or might give rise to a reasonable perception that their independence could be impaired. The audit committee must ensure that external auditors do not undertake any work that might compromise their independence. If any work is being done by the external auditors, the audit committee must approve before the work commences. In short, the audit committee is responsible that the independence of the external auditors is not comprised under any circumstance.

5. Recommend external auditor for appointment/reappointmentThe audit committee does an extensive review on the audit work done by the auditors after the audited financial statements have been signed. The audit committee evaluates the auditors on a very detailed level, and ensures that there were no threats to independence or any other issues with the auditors. The Audit Committee decides whether to recommend appointing new auditors or reappointing the same auditors after every AGM.

Audit committee’s involvement in selection of appropriate accounting policiesThe Audit Committee shall support the Board of Directors in certifying that the financial statements reflect a true and fair view of the company and is maintaining a good supervising system within the Bank. The Board delegates the duty to the Audit Committee to decide on the appropriate accounting policies that are in line with applicable accounting standards as applicable and adopted by the ICAB, IFRS, IAS and Bangladesh Securities and Exchange Commission. After choosing the appropriate accounting policies, the Audit Committee recommends the Board concerning implementation of the selected accounting guidelines. The Board subsequently accepts the selected accounting policies for implementation.

Audit committee’s involvement in the review of annual and interim financial reportsAs per the Corporate Governance guideline of BSEC, the Audit Committee is expected to assess alongside with management, the interim and half yearly and annual financial statements before proposing to the Board for consent. PBL’s Audit Committee appraises the interim and annual financial releases whether audited or

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unaudited and places it before the Board for approval. The audit committee always ensures that the financial statements reflect a true and fair view of the company and analyses the financials for any discrepancies.

Reliability of management information used for computation in financialsThe Audit committee ensures that the management information used for computation in the financials is true and fair. In order to ensure reliability of the information, the audit committee always has an extensive meeting with management regarding issues of the financial statements. The Audit committee queries management on issues that they find material to the financial statements and makes sure that management has a proper response to their queries. Through meetings with management the Audit committee will be able to understand the reliability of the information used for computation in the financials.

Internal Control

A system of effective internal controls is a critical component of bank management and a foundation for the safe and sound operation of the organization. A system of strong internal controls can help to ensure that the goals and objectives of a banking organization will be met, that the bank will achieve long-term profitability targets, and maintain reliable financial and managerial reporting. Such a system can also help to ensure that the bank will comply with laws and regulations as well as policies, plans, internal rules and procedures, and decrease the risk of unexpected losses or damage to the bank’s reputation.

Internal control is a process affected by the board of directors,senior management and all levels of personnel. It is not solely a procedure or policy that is performed at a certain point in time, but rather it is continually operating at all levels within the bank. The board of directors and senior management are responsible for establishing the appropriate culture to facilitate an effective internal control process and for monitoring its effectiveness on an ongoing basis; however, each individual within an organization must participate in the process. The main objectives of the internal control process can be categorized as follows:

1. Efficiency and effectiveness of activities (performance objectives);

2. Reliability, completeness and timeliness of financial and management information (information objectives); and

3. Compliance with applicable laws and regulations (compliance objectives).

Performance objectives for internal controls pertain to

the effectiveness and efficiency of the Bank in using its assets and other resources and protecting the bank from loss.

Information objectives address the preparation of timely, reliable, relevant reports needed for decision-making within the banking organization. They also address the need for reliable annual accounts, other financial statements and other financial-related disclosures and reports to shareholders, supervisors, and other external parties.

Compliance objectives ensure that all banking business complies with applicable laws and regulations, supervisory requirements, and the organization’s policies and procedures. This objective must be met in order to protect the Bank’s reputation.

Director’s responsibility to establish appropriate system of internal controlThe Board of Directors has always been extremely active in establishing appropriate systems of internal control. The Board of Directors has no sympathy for any type of fraud in the Bank, and always promotes a sound and strong internal control system inside the Bank. The Board of Directors has always appreciated the internal controls that have been set up by management and have also given advice on any matters when required. The Board has always been very responsible and active in establishing an appropriate system of internal control.

Key features of Internal Control System and the manner in which the system is monitoredKey features of Internal Control System are as follows: 1. Management oversight and the control culture2. Risk recognition and assessment3. Control activities and segregation of duties4. Information and communication5. Monitoring activities and correcting deficiencies

Management oversight and the control cultureThe board of directors provides governance, guidance and oversight to senior management. It is responsible for approving and reviewing the overall business strategies and significant policies of the organization. The board of directors has the ultimate responsibility for ensuring that an adequate and effective system of internal controls is established and maintained.

Senior management is responsible for carrying out the directives of the board of directors, including the implementation of strategies and policies and the establishment of an effective system of internal control.An essential element of an effective system of internal control is a strong control culture. It is the responsibility

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of the board of directors and senior management to emphasize the importance of internal control through their actions and words. This includes the ethical values that management displays in their business dealings, both inside and outside the organization.

Risk recognition and assessmentAn effective internal control system requires that the material risks that could adversely affect the achievement of the bank’s goals are being recognized and continually assessed. This assessment should cover all risks facing the bank (which are credit risk, country and transfer risk, market risk, interest rate risk, liquidity risk, operational risk, legal risk and reputational risk). Internal controls may need to be revised to appropriately address any new or previously uncontrolled risks.

Control activities and segregation of dutiesControl activities should be an integral part of the daily activities of a bank. An effective internal control system requires that an appropriate control structure is set up, with control activities defined at every business level. These should include: top level reviews; appropriate activity controls for different departments or divisions; physical controls; checking for compliance with exposure limits and follow-up on non compliance;a system of approvals and authorizations and, a system of verification and reconciliation.

Information and communicationAn effective internal control system requires there are adequate and comprehensive internal financial, operational and compliance data, as well as external market information about events and conditions that are relevant to decision making. Information should be reliable, timely, accessible, and provided in a consistent format.

Monitoring activities and correcting deficienciesThe overall effectiveness of the bank’s internal controls should be monitored on an ongoing basis. Monitoring of key risks should be part of the daily activities of the bank as well as periodic evaluations by the business lines and internal audit.

The board of directors of Prime Bank performs the following activities to monitor the Internal Control System:

1. Periodic discussions with management concerning the effectiveness of the internal control system.

2. Timely review of evaluations of internal controls made by management, internal auditors, and external auditors.

3. Periodic efforts to ensure that management has

promptly followed up on recommendations and concerns expressed by auditors and supervisory authorities on internal control weaknesses.

4. Periodic review of the appropriateness of the bank’s strategy and risk limits.

Through the establishment of the Audit Committee, the Board of Directors monitors the effectiveness of internal control system. The Audit Committee evaluates whether management is setting the appropriate compliance culture by communicating the importance of internal control among the employees. They also review the corrective measures taken by the management relating to operational lapses.

Senior management of Prime Bank develops processes that identify, measure,monitor and control risks incurred by the bank; maintains an organizational structure that clearly assigns responsibility, authority and reporting relationships;ensures that delegated responsibilities are being carried out effectively; sets appropriate internal control policies; and monitors the adequacy and effectiveness of the internal control system. They ensure proper control through techniques such as top level reviews, activity controls, physical controls, compliance with exposure limit, approvals & authorizations and verification & reconciliation of transactions of the Bank.

Directors have reviewed the adequacy of the system of internal controlsIn almost every Audit Committee meeting the issue of adequacy of the system of internal controls is a factor that is taken into consideration. The Audit Committee is responsible to the Board of Directors to ensure that the system of internal controls is adequate to protect against any type of fraud. The committee has reviewed the corrective measures taken by management relating to fraud-forgery and deficiencies in internal control. The Audit Committee places all the compliance report before the Board of Directors and regulators on a timely basis and has performed all other oversight functions in relation to Internal Control System of the Bank. In this way, the Directors review the adequacy of the system of internal controls.

Identification of risks PBL is exposed to internally and externally

Banking industry is unique in many ways and one of the features that set it apart from other business is the diversity and complexity of the risks it is exposed to. Deregulated regimes along with globalization of business have opened new frontiers that warrant risk management an even greater priority. The failure

64


to adequately manage these risks exposes banks not only to business losses but also may result in circumstances that they cannot remain in business. Prime Bank has identified six core risk areas of banking which are as follows:

1. Credit Risk

2. Asset and Liability/Balance Sheet Risk

3. Foreign Exchange Risk

4. Internal Control and Compliance risk

5. Money laundering Risk

6. Information and Communication Technology Security Risk

Banking companies in Bangladesh, while conducting day-to-day operations, may face some other risks both internally and externally:

� Credit risk also includes concentration risk, country risk, transfer risk, and settlement risk

� Market risk (including interest rate risk in the banking book, foreign exchange risk and equity market risk)

� Liquidity Risk

� Operational Risk

� Strategic Risk

� Reputation Risk

Strategies adopted to manage and mitigate the risks

Prime Bank adopted the following strategies to manage and mitigate the risk:

� Setting targets for capital ratios and capital composition

� Managing the balance sheet

� Managing the funding structure

� Determining general principles for measuring, managing, and reporting the bank’s risks

� Developing risk policies for business units

� Determining the overall investment strategy

� Identifying, monitoring, and managing the bank’s current and potential operational risk exposures

� Handling “critical risks” (risks that require follow-up and further reporting)

� Following up on reviews by and reports from Bangladesh Bank and informing the Board of issues affecting the bank’s operational risks

� Following up on reports prepared by Internal Audit and informing the Board through Audit Committee of unusual circumstances

� Preparing management information on issues such as IT security, physical security, business continuity, and compliance.

More information regarding Risk management techniques used by management to identify and mitigate risk can be found in the Risk Management chapter on page 140.

Ethics and Compliance

Prime Bank is always committed to establish the highest level of business compliance and ethical standard.

The Bank has an ‘Employee Code of Ethics and Business Conduct’ – a framework of ethical behavior for all the employees of the organization.

The leaders/managers are required to exemplify the highest standards of conduct and ethical behavior. The leaders/managers are expected to:

� Lead according to Prime Bank standards of ethical conduct, in both words and actions.

� Create and maintain an environment where employees feel comfortable asking questions or reporting concerns.

� Be diligent in enforcing the Bank’s ethical standards and taking appropriate action if violations occur.

� Contact the Human Resources Division when in need of assistance.

The Employee Code of Ethics and Business Compliance also specify the grounds of punishment to refrain employees from any unwanted behavior. For instances, an employee shall be liable to disciplinary actions, if he/she:

� Is convicted of any offence involving moral turpitude; or

� Is corrupt or may reasonably be considered to be corrupt; or

� Assumes a style of living beyond his/her ostensible means; or

� Is engaged or is reasonably suspected of being engaged in subversive activities, or is reasonably suspected of being associated with others engaged in subversive activities, and whose retention in service is therefore considered prejudicial to national security; or

� Is in possession of pecuniary resources or property disproportionate to his/her known sources of income etc.

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The code of employee ethical behavior gives focus on the followings:

� Protecting Privacy of Customers’ and Confidential Company Information,

� Preventing Money Laundering and/or Fraud,

� Avoiding Drug/ Substance/ Alcohol Abuse in the Workplace

� Protecting Bank’s assets

� Avoiding any conflict of interest etc.

Each of the above stated issue is properly explained as separate section in the ‘Employee Code of Ethics and Business Compliance’.

IntegrityThe ‘Employee Code of Ethics and Business Conduct’ starts with the phrase “Uncompromising integrity”. Employees of Prime Bank are judged not only in terms of competencies, but also with their integrity. The reputation and continued success of Prime Bank largely depend on a shared commitment to the core value of integrity. Respecting this value is the responsibility of each and every member of the organization.

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

Compliance with the laws and regulationsPrime Bank maintains its reputation as a law-abiding organization and a good corporate citizen. It complies with all the prevailing laws and regulations of the country. Employees are trained and guided to conduct business in compliant manner. The policy and procedures regarding Prime Bank’s business process are prepared in adherence to the laws and regulations.

Communication of the statement of ethics & business practicesAll employees are properly inducted to comply with Code of Ethics and conform to the relevant laws and regulations. HR Division makes sure that during joining employees read, understand the ‘Code of Ethics and Business Conduct’ and acknowledge the same by signing. HR continuously raises awareness on regular interval among employees to ensure that business decisions and actions undertaken by employees are completely in compliance with the prevalent rules and

regulations. The leaders/managers of the Bank are mandatorily required to communicate and help their employees to understand how ethics apply to their positions and everyday behavior.

The Board of Directors of Prime Bank has approved the ‘Employee Code of Ethics and Business Compliance’ with a commitment to set the high ethical standards so that customers’ expectations and interests are protected in a compliant manner.

The Board’s commitment to establishing high level of ethics and compliance within the organizationThe Board of Director has always been committed to establishing a high level of ethics and compliance among all employees of the organization. They have always encouraged management to ensure that everyone maintains a high ethical standard within the Bank. The Board guides management on principles that should be adopted and followed by everyone in the Bank.

WhistleblowingWhistle blowing about bad practices early can help to ensure that problems are identified before it is too late. This helps to prevent disasters ranging from customer mistreatment to huge financial loss. Prime Banks whistleblowing procedures encourage employees to disclose concerns using appropriate channels before these concerns become a serious problem which might jeopardize Bank’s reputation through negative publicity, regulatory investigation, fines and/or compensation.

Whistleblowing is increasingly recognized as an important tool in the prevention and detection of corruption and other malpractice. The clandestine nature of corrupt behavior means that it may never come to light unless cases are reported by people who discover them in the course of their work.

Employees are encouraged to report any wrong-doing within the Bank. The Head of Internal Control and Compliance and Human Resources Divisions are the primary channel to report any incident. The Reporting channels offer the employees the opportunity to report while maintain their identity as confidential. However, from experience Prime Bank understands that an effective whistleblowing policy demands for a shift in the culture.

The Bank has a division named Internal Control and Compliance Division which dedicatedly works to ensure effective controls mechanism in the entire business entity.

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Remuneration CommitteeComposition and Charter

Prime Bank ltd. has a Management Committee which comprises Managing Director, Deputy Managing Directors and other Heads of Division to review, discuss and decide on important business issues. In addition to the regular roles and responsibilities, the Committee assist in formulation of remuneration related policies and practices in alignment of the Bank’s short and long-term business objectives.

The roles and responsibilities of the committee are the followings:

� Review the effectiveness of remuneration policy to ensure that whether the Board’s set objectives and expectations are being met;

� Ensure that an effective remuneration policy, procedure and practice are in place, aligned with the Bank’s strategy, and is applied consistently for all employee levels.

� Ensure that the structure and mix of fixed and variable pay and other elements are in alignment with the overall business objectives;

� Guide and give suggestion to HR team during preparation and review of any policy or process related to compensation and benefits;

� Ensure that all benefits, including retirement benefits and other financial arrangements, are justified, appropriately valued and promoting the performance based reward & recognition etc.

Disclosure of key policies with regard to remuneration of directors, senior management and employeesAll employees including the Senior Management employees are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability. The remuneration also stresses on ensuring internal and external pay equity.

Meetings and work performedThe committee holds meeting on a regular interval throughout the year. So, if any remuneration related issue needs committee’s attention, it is placed as agenda for necessary review. However, if required, the meeting is held on need basis to review and discuss any remuneration related issue exclusively. In 2014, a total of 06 meetings were held by the Management Committee.

Disclosure of Remuneration of Directors, Chairman, Chief Executive and Senior ExecutivesThe Directors of the Board are paid only honorarium for

attending Board or Committee meetings. On the other hand, the Managing Director is paid salary and other allowances (the details are shown in page number 353). The total cost related to employee compensation is shown in the page number 352.

Human Capital

Employees are the key driving force of Prime Bank’s continuous success A group of motivated and engaged employees with diverse talents are the key asset of Prime Bank. Prime Bank is highly reputed in the market as an employer of choice. The Bank has positioned itself with a performance-driven rewarding work culture; where employees are treated with respect and receive widened opportunities to realize their diverse potentials fully as well as benefit the organization by demonstrating value creating behaviors.

To ensure long term sustainability, Prime Bank has a special focus on skill and merit based recruitment and selection process, highly competitive remuneration package, adequate training and development programs, career growth with succession planning, high-performance culture and pleasant working atmosphere where employees are able to escalate their grievance and receive counseling.

Recruitment and selection process with ‘best-fit’ ethos followed by clearly defined policy and proceduresThe recruitment and selection of Prime Bank follows the ‘best fit’ approach. As per Bank’s requirement Human Resources Division ensures that the potential candidates are properly assessed, selected and placed on-time as per required competencies (KSA – Knowledge, Skill & Attributes) and experience. Prime Bank has a recruitment policy that clearly states the criteria and procedures to recruit fresh and lateral entrants. The Bank has a Management Trainee Program which is aimed to recruit outstanding fresh graduates and develop them as the future leaders of Prime Bank Ltd.

Ensuring adequate learning & development opportunities through effectively designed training programs and on-the-job experience PBL continuously thrives to transform Human Resources to Human Capital through appropriate learning and development initiatives in every aspects of work area. HR Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment. The Bank has a separate HR Training & Development Centre.

67

Well-crafted compensation & benefits package to have a positive impact on employees’ overall well-being PBL has a flexible compensation and benefits system that helps to ensure pay equity, is linked with performance that is understood by employees, and keeps in touch with employee desires and what’s coveted in the market, while maintaining a balance with the business affordability.

All employees are paid competitive remuneration package. The structure and level of remuneration are reviewed time to time based on Bank’s performance and affordability.

Ensuring horizontal and vertical career growth PBL always plans for employees so that they can advance their career goals. This includes advancement into more responsible positions. The company supports career opportunities internally so that talented employees are placed in upgraded positions and thereby enables them to deliver their greatest value to the organization. In addition to vertical career growth, employees may also grow horizontally. Whenever possible Human Resources Division mobilizes employees across different functions and branches; thus assisting them to progress with varied skills and experience.

Succession planning for the talents in different layers of the organizational hierarchy Besides encouraging individual employee growth and development, PBL also gives effort o identify and retain the human resources who can potentially be the successors of mission critical roles. PBL acknowledges that Succession Planning & Management is vital to the continued success of the Bank. PBL continuously assesses organizational, divisional and team capability gaps to identify, develop and retain the successors in a timely manner to meet the demands of the future.

Comprehensive performance management program to reward employees and drive further developmentPBL has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. This performance appraisal system is considered as crucial for the Bank as this is a very important tool to identify and distinguish the performers and non-performers. Prime Bank believes that a well-executed performance appraisal system can help to reward the deserving employees, as well as help to ensure further development program for the rest.

Reward & recognition program to meet employees’ intrinsic psychological need for appreciationPBL has a well-designed Reward & Recognition program

that gives special attention to employees’ actions, efforts, behavior and performance. It meets the intrinsic psychological need for appreciation of employees’ efforts and supports business strategy by reinforcing certain behaviors (e.g., extraordinary accomplishments) that contribute to Bank’s success.

Grievances and counselingSince employee’s behavior affects work discipline, HR Division always encourages employees to report if they have any work related grievance. In PBL there is formal procedure to address the employee grievance. Time to time HR Division also counsels employees as part of its job as people’s advocate.

Ensuring a decent workplace where employees can participate in work with respectPrime Bank believes that the business can grow favourably if the organization enables employees through creating and maintaining a decent workplace. In PBL, there is a decent work environment where employees can work with dignity, have the freedom to express opinions, can participate in the decision making process that affect their lives, and receive equal treatment and opportunity. PBL ensures security in the workplace and social protection for employees’ families, better prospects for their personal development and social integration.

Communication to Shareholders & Stakeholders

Company’s policy/strategy to facilitate effective communication with shareholders and other stakeholdersPrime Bank ensures that all shareholders are notified at least 2 weeks before the AGM so that all shareholders may attend on the day. Also all other types of accounts (Quarterly and Half yearly) or information are updated on the website and notified to all stakeholders on a duly basis. The Bank tries to maintain liaison with all major shareholders as much as possible and ensures that all stakeholders are informed about the bank’s activities on a routine basis. PBL also engages with all types of stakeholders’ as much as possible to ensure that information is effectively communicated. More details about the PBL’s policy on engaging stakeholders can be found in the Sustainability Report on page 187.

Company’s policy on ensuring participation of shareholders in the Annual General Meeting and providing reasonable opportunity for the shareholder participation in the AGMPBL tries its utmost to ensure that all shareholders can participate in the AGM. Annual Reports are sent out

68


as early as 2 weeks or before the AGM to ensure all shareholders are notified about the event date, place and time. Also, PBL always ensures that AGM is held at a convenient place where all shareholders may attend. Notices to shareholders are made by publication in the daily newspapers and through the digital media as well. To ensure compliance with regulatory bodies, PBL ensures that it publishes in two widely circulated newspapers in English and Bangla and sent to the stock exchanges and BSEC.

PBL ensures effective communication with the shareholders and encourages shareholder participation at the AGM. PBL connects with the investors through AGM, EGM, the Annual Report and Company’s website. All of the Bank’s publications to the market may be retrieved through the Company’s website. Shareholders are offered the chance to interrogate the Board regarding the operation of the Bank. They are also presented the ability to query the Company’s auditors concerning topics linked to the audit of the Company’s financial statements at the AGM.

Environmental and Social Obligation

Description of the company’s policies and practices relating to social and environmental responsibility of PBLA natural and fresh environment, efficient use of reserves and appreciation for people’s well-being and safety are what PBL has always believed in. In harmony with this, PBL is constantly working towards decreasing consumption of energy (especially electricity, water and gas) at its branches, removal of use of hazardous substances from its practices and reducing waste generation. The importance is on diminishing paper transactions to the extent that the Credit Committee has already been made paperless, and PBL is moving forward and thinking about implementing it more

through the branches. One of the key objectives for financing manufacturing companies is to ensure that they try to lessen their carbon footprint.

Bangladesh Bank has taken steps to inspire green banking in Bangladesh through the issuance of guidelines on green banking and Environmental Risk Management (ERM). It is always inspiring banks in lessening paper communications and fitting solar power system in branches and giving refinance to the solar energy, bio-gas and effluent treatment plant (ETP) sectors at eased interest rates.

PBL has always been committed to the environment and also been active in social activities throughout the year 2014, and will remain to do so in the future.

Specific activities undertaken by the PBL regarding environmental and social responsibilitiesPBL has always been active regarding its activities for the environment. One of its achievements was to make the Credit Committee paperless in 2014. It is also in the process of issuing a green manual for how to make all branches and divisions more environmental friendly. Also, solar panels have been set up in quite a few branches as well, and the initiative has been taken to install more sonar panels in branches in the future. Environmental activities during the year can be found more in details in the Green Banking Report on page 80 and the Sustainability Report on page 187.

PBL has always been an active member of society and has tried to enhance people’s lives and its employees as well. Prime Bank Foundation was solely initiated for the purpose of Corporate Social Responsibility. PBL’s social activities can be found on the Prime Bank Foundation chapter on page 223 and its commitment to its employees can be found in the Sustainability Report on page 187.

69

BoardMeeting : 2014

SlNo.

Name of Directors Designation

Presence of the Directors in the Meetings Remuneration drawn

(Tk.5,000.00/Meeting)No. of Meetings

Present Absent

1Mr. Azam J Chowdhury(Representative of East Coast Shipping Lines Ltd.)

Chairman 11 10 01 Tk.50,000.00

2 Mr. M. A. Khaleque Vice Chairman 17 10 07 Tk.50,000.00

3Mr. KhandkerMohammad Khaled

Vice Chairman 17 07 10 Tk.35,000.00

4 Mr. Md. Nader Khan Director 17 08 09 Tk.40,000.00

5 Quazi Sirazul Islam Director 17 12 05 Tk.60,000.00

6Mr. Md.Shirajul Islam Mollah

Director 17 12 05 Tk.60,000.00

7Mr. Mafiz Ahmed Bhuiyan

Director 17 15 02 Tk.75,000.00

8 Mr. Md. Shahadat Hossain Director 17 13 04 Tk.65,000.00

9Mr. Mizanur RahmanBhuiyan

Director 17 01 16 Tk.5,000.00

10Mrs. Marina YasminChowdhury

Director 17 05 12 Tk.25,000.00

11 Mrs. Nazma Haque Director 17 16 01 Tk.80,000.00

12 Mrs. Salma Huq Director 17 10 07 Tk.50,000.00

13 Mrs. Muslima Shirin Director 17 14 03 Tk.70,000.00

14Mrs. Nasim AnwarHossain

Director 17 16 01 Tk.80,000.00

15 Mr. Imran Khan Director 17 05 12 Tk.25,000.00

16 Mr. Nafis Sikder Director 17 07 10 Tk.35,000.00

17 Prof. Ainun NishatIndependent

Director17 12 05 Tk.60,000.00

18 Mr. Manzur MurshedIndependent

Director17 13 04 Tk.65,000.00

19Prof. Dr. MohammedAslam Bhuiyan

Independent Director

17 17 - Tk.85,000.00

20

Mr. Tanjil Chowdhury(Representative of East Coast Shipping Lines Ltd. upto27.04.2014)

Director 06 02 04 Tk.10,000.00

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Audit CommitteeMeeting : 2014

Executive CommitteeMeeting : 2014

SlNo.




Present Absent

1 Quazi Sirazul Islam Chairman 15 14 01 Tk.70,000.00

2 Mr. Imran KhanVice

Chairman23 12 11 Tk.60,000.00

3 Mr. Md. Shirajul Islam Mollah Member 15 08 07 Tk.40,000.00

4 Mr. Mafiz Ahmed Bhuiyan Member 20 15 05 Tk.75,000.00

5 Mr. Md. Shahadat Hossain Member 23 19 04 Tk.95,000.00

6 Mrs. Salma Huq Member 23 17 06 Tk.85,000.00

7 Mrs. Nasim Anwar Hossain Member 15 11 04 Tk.55,000.00

8

Mr. Tanjil Chowdhury(Representative of East Coast Shipping Lines Ltd.upto 27.04.2014)

Director 07 07 - Tk.35,000.00

9Mrs. Marina Yasmin Chowdhury(Upto 16.07.2014)

Director 03 - 03 --

10Mrs. Muslima Shirin(Upto 31.05.2014)

Director 08 08 - Tk.40,000.00

11Mr. Nafis Sikder(Upto 31.05.2014)

Director 08 - 08 --

SlNo.




Present Absent

1 Prof. Ainun Nishat Chairman 10 10 - Tk.50,000.00

2 Mr. M. A. Khaleque Member 10 6 4 Tk.30,000.00

3 Mr. Khandker Mohammad Khaled Member 10 5 5 Tk.25,000.00

4 Mr. Manzur Murshed Member 10 10 - Tk.50,000.00

5Prof. Dr. Mohammed Aslam Bhuiyan

Member 10 10 - Tk.50,000.00

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Risk Management CommitteeMeeting: 2014

The pattern of Shareholding along with name wise details of:

SlNo.




Present Absent

1 Mrs. Nasim Anwar Hossain Chairperson 04 04 - Tk.20,000.00

2 Mr. Khandker Mohammad Khaled Director 04 01 03 Tk.5,000.00

3 Mr. Mafiz Ahmed Bhuiyan Director 04 03 01 Tk.15,000.00

4 Mrs. Salma Huq Director 04 01 03 Tk.5,000.00

5 Mrs. Muslima Shirin Director 04 01 03 Tk.5,000.00

i) Parent/Subsidiary/Associated Company and other related: Nil

ii) Shareholding of CEO, CFO, Company Secretary & Head of Internal Audit:

SLNo.

Name of Executives% of Shares as at

31.12.2014

1. Chief Executive Officer and his spouse and minor children -

2. Chief Financial Officer and his spouse and minor children -

3. Company Secretary and his spouse and minor children -

4. Head of Internal Audit and his spouse and minor children -

iii) Shareholding of Directors:

SL No. Name of the Directors Status % of shares as at 31.12.2014

1

Mr. Azam J Chowdhury(Representative of East Coast Shipping Lines Ltd.)

Chairman

2.00(Shareholding of East Cost

Shipping Lines Ltd.)2 Mr. Khandker Mohammad Khaled Vice Chairman 2.783 Mr. M. A. Khaleque Vice Chairman 2.124 Quazi Sirazul Islam Director 2.005 Mr. Md. Nader Khan Director 3.696 Mr. Md. Shirajul Islam Mollah Director 2.017 Mr. Mafiz Ahmed Bhuiyan Director 2.00

72


8 Mr. Md. Shahadat Hossain Director 2.70

9

Mr. Mizanur Rahman Bhuiyan(Representative of Uniglory Cycle Industries Ltd.)

Director

2.02(Shareholding of Uniglory Cycle Industries Ltd.)

10 Mrs. Marina Yasmin Chowdhury Director 2.0311 Mrs. Nazma Haque Director 2.0112 Mrs. Nasim Anwar Hossain Director 2.2713 Mrs. Salma Huq Director 3.1314 Mrs. Muslima Shirin Director 2.0015 Mr. Nafis Sikder Director 2.5116 Mr. Imran Khan Director 2.0017 Prof. Ainun Nishat Independent Director -

18 Mr. Manzur Murshed Independent Director 0.003

19 Prof. Dr. Mohammed Aslam Bhuiyan Independent Director -

20 Mr. Ahmed Kamal Khan Chowdhury Managing Director -

iv) Shareholding of Senior Executive (Top five salaried executives other than CEO, CFO, CS, HIA):

SLNo.

Name of Executives% of Shares as at

31.12.2014

1. Mr. Md. Tabarak Hossain Bhuiyan, DMD -

2. Mr. Habibur Rahman, DMD -

3. A.S.M Khairuzzaman, SEVP -

4. Kazi Mahmood Karim, SEVP -

5. Md. Iqbal Hossain, SEVP -

v) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details) - Nil.

74


Report on Compliance of BSEC’s Notification onCorporate Governance

Condition No.

Title Compliance Status

(Put √ in the appropriate column)Remarks(if any)

Complied Not complied

1.0 Board of Directors

1.1 Board’s size shall not be less than 5 and more than 20 √

1.2 Independent Director

1.2 (i)Independent director: At least 1/5th of the total number of directors

√

1.2 (ii) For the purpose of this clause “independent director” means a director .

√

1.2 (ii) a)Independent director does not hold any share or holds less than one percent (1%) shares of total paid up capital.

√

1.2 (ii) b)

Independent Director is not a sponsor of the company and is not connected with the company’s Sponsor Or Director Or Shareholder who holds 1% or more shares of the company (certain family members are also required to comply with this requirement).

√

1.2 (ii) c)Independent director does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies.

√

1.2 (ii) d)Independent directors are not the members, directors or officers of any stock exchange.

√

1.2 (ii) e)Independent director is not the shareholder, director or officers of any member of Stock Exchange or an Intermediary of the capital market.

√

1.2 (ii) f)Independent director is/was not the partners or executives during preceding 3 (three) years of concerned company’s statutory audit firm.

√

1.2 (ii) g)Independent directors is not the independent director in more than 3 (three) listed companies.

√

1.2 (ii) h)

Independent director is not convicted by a court of competent jurisdiction as a defaulter in payment of any loan to a bank or a non-bank financial institution (NBFI).

√

1.2 (ii) i)Independent director has not been convicted for a criminal offence involving moral turpitude.

√

1.2 (iii)The independent director shall be appointed by the Board of Directors and approved by the Shareholders in the AGM.

√

1.2 (iv)The post of independent directors cannot remain vacant for more than 90 days.

√

(Notification No SEC/CMRRCD/2006-158134/Admin/44 dated 07 August, 2012)

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Condition No.




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 Directors 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)

1.3 (i)Independent director shall be knowledgeable individual with integrity who is able to ensure required compliance.

√

1.3 (ii)The independent director must have at least 12 (twelve) years of corporate management/ professional experiences along with other requisites.

√

1.3 (iii)In special cases above qualification may be relaxed by the Commission

N/A

1.4Separate Chairman and CEO and their clearly defined roles and responsibilities.

√

1.5 Directors 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)Discussion on cost of goods sold, gross profit margin and net profit margin

√

1.5 (v)Discussion on continuity of any Extra-Ordinary gain or loss

N/A

1.5 (vi)Basis for related party transaction- a statement of all related party transactions should be disclosed in the annual report

√

1.5 (vii)Utilization of proceeds from public issues, right issues and/ or through any others instruments.

√

1.5 (viii)An explanation if the financial results deteriorate after the company goes for IPO, RPO, Rights Offer, Direct Listing etc.

N/A

1.5 (ix)

If significant variance occurs between Quarterly Financial performance and Annual Financial Statements the management shall explain about the variance on their Annual Report.

N/A

1.5 (x)Remuneration to directors including independent directors.

√

1.5 (xi)

The financial statements prepared by the management of the company present fairly its state of affairs, the results of its operation, cash flows and changes in equity.

√

1.5 (xii)Proper books of account of the company have been maintained.

√

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Condition No.




1.5 (xiii)

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

√

1.5 (xiv)

International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting Standards (BFRS), as --applicable in Bangladesh, have been followed in preparation of the financial statements and any departure there-from has been adequately disclosed.

√

1.5 (xv)The system of internal control is sound in design and has been effectively implemented and monitored.

√

1.5 (xvi)There are no significant doubts upon the company's ability to continue as a going concern.

√

1.5 (xvii)Significant deviations from the last year’s operating results of the 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 company has not declared dividend (cash or stock) for the year, the reasons thereof shall be given.

N/A

1.5 (xx)The number of Board meetings held during the year and attendance by each director shall be disclosed.

√

1.5 (xxi)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, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details);

√

1.5 (xxi) c)Executives (top five salaried employees of the company other than stated in 1.5(xxi)b);

√

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 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, Head of Internal Audit & Company Secretary

2.1Appointment of CFO, Head of Internal Audit and Company Secretary and their clearly defined roles, responsibilities and duties.

√

2.2Attendance of CFO and the Company Secretary at Board of Directors meeting

√

3 Audit Committee:

77

Condition No.




3 (i)Audit Committee shall be the 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 Constitution of the Audit Committee

3.1 (i)The Audit Committee shall be composed of at least 3 members.

√

3.1 (ii)Constitution of Audit Committee with Board Members including 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) Filling of Casual Vacancy in Committee N/A

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 independent director.

√

3.2 Chairman of the Audit Committee

3.2 (i)Chairman of the Audit Committee 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. √

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.

√

78


Condition No.




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.

N/A

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)The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:

3.4.1 (ii) a) Report on conflicts of Interests. √

3.4.1 (ii) b)Suspected or presumed fraud or irregularity or material defect in the internal control system;

√

3.4.1 (ii) c)Suspected infringement of laws, including securities related laws, rules and regulations;

NIL

3.4.1 (ii) d)Any other matter which shall be disclosed to the Board of Directors immediately.

√

3.4.2Reporting of anything having material financial impact to the Commission.

NIL

3.5 Reporting to the Shareholders and General Investors. NIL

4 External/Statutory Auditors should not be engaged in:

4 (i) Appraisal or valuation services or fairness opinions. √

4 (ii)Financial information systems design and implementation.

√

4 (iii)Book-keeping or other services related to the accounting records or financial statements.

√

4 (iv) Broker-dealer services. √

4 (v) Actuarial services. √

4 (vi) Internal audit services. √

4 (vii)Any other service that the Audit Committee determines.

√

4 (viii)

No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that Company.

√

4 (ix)Audit/certification services on compliance of corporate governance as required under clause (i) of condition No. 7

√

5 Subsidiary Company

5 (i)

Provisions relating to the composition of the Board of Directors of the holding company shall be made applicable to the composition of the Board of Directors of the subsidiary company.

√

79

Condition No.




5 (ii)At least 1 (one) independent director on the Board of Directors of the holding company shall be a director on the Board of Directors of the subsidiary company.

√

5 (iii)The minutes of the Board meeting of the subsidiary company shall be placed for review at the following Board meeting of the holding company.

√

5 (iv)The Minutes of the respective Board meeting of the holding company shall state that they have reviewed the affairs of the Subsidiary Company also.

√

5 (v)The Audit Committee of the holding company shall also review the Financial Statements, in particular the investments made by the Subsidiary Company.

√

6 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

6 (i) They have reviewed financial Statements for the year and that to the best of their knowledge and belief:

√

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

√

6 (i) b)

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

√

6 (ii)

There are, to the best of knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violation of the company’s code of conduct.

√

7 Reporting and Compliance of Corporate Governance:

7 (i)

The company shall obtain a Certificate from a Professional Accountant/Secretary (CA/CMA/CS) regarding compliance of conditions of Corporate Governance Guidelines of the Commission and shall send the same to the shareholders along with the Annual Report on a yearly basis.

√

7 (ii)

The directors of the company shall state, in accordance with the Annexure attached, in the directors' report whether the company has complied with these conditions.

√

80


Green BankingReport

Why Green Banking is necessary?

Human activities and natural events are responsible for increasing average global temperatures and primarily by increases in “greenhouse” gases, such as Carbon Dioxide (CO2). A warming planet thus leads to a change in climate which can affect weather in various ways. Global warming and climate change refer to an increase in average global temperatures. In this context in 1992, United Nations Framework Convention on Climate Change (UNFCCC) commits State Parties to reduce greenhouse gases emissions, which is widely known as The Kyoto Protocol, an international treaty. The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on 16 February 2005. The Kyoto Protocol implemented the objective of the UNFCCC to fight global warming by reducing greenhouse gas concentrations in the atmosphere to a level that would prevent dangerous anthropogenic interference with the climate system. Negotiations were held in Paris in 2014 to agree on a post-Kyoto legal framework that would obligate all major polluters to pay for CO2 emissions.

If we consider the impact of global warming, the following things will come to the point. With rapid climate change, one-fourth of Earth’s species could be headed for extinction by 2050.

Climate change is already beginning to transform life on Earth. Around the globe, seasons are shifting, temperatures are climbing and sea levels are rising. And

meanwhile, our planet must still supply us – and all living things – with air, water, food and safe places to live. If we don’t act rightly, the climate change will rapidly alter the lands and waters and then we have to leave our children and grandchildren in a very challenging situation.

Here some of the most dangerous consequences of climate change, which will have impact on our life, or on the places we care about.1. Higher Temperature,2. Changing Landscape,3. Wildlife at risk,4. Rising seas,5. Increased risk of draught, fire and floods,6. Stronger storms and increased storm damage,7. More heat related illness and diseases,8. Economic losses.

1- The five hottest years on record have all occurred since 1997.Heat-trapping gases emitted by power plants, automobiles, deforestation and other sources are warming up the planet. In fact, the five hottest years on record have all occurred since 1997 and the 10 hottest since 1990, including the warmest years on record – 2005 and 2010. High temperatures are to blame for an increase in heat-related deaths and illness, rising seas, increased storm intensity etc. During the 20th century, the Earth’s average temperature rose one degree Fahrenheit to its highest level in the past four

81

centuries – believed to be the fastest rise in a thousand years. Scientists project that if emissions of heat-trapping carbon emissions aren’t reduced, average surface temperatures could increase by 3 to 10 degrees Fahrenheit by the end of the century.

2- Changing temperatures are causing vegetation shifts and conservation challenges.Rising temperatures and changing patterns of rain and snow are forcing trees and plants around the world to move toward polar region and up mountain slopes. These vegetation shifts will undermine much of the work the conservation community has accomplished to date, with the potential to permanently change the face of Conservancy preserves, local land trusts, and even our national parks. In the tundra, thawing permafrost will allow shrubs and trees to take root. In the Great Plains of the United States, grasslands will likely become forests. And New England’s fiery fall foliage will eventually fade as maple and beech forests shift north toward cooler temperatures. As plant communities try to adjust to the changing climate by moving toward cooler areas, the animals that depend on them will be forced to move. Development and other barriers may block the migration of both plants and animals.

3- Climate change could influence one-fourth of the Earth’s species to be headed for extinction by 2050.Rising temperatures are changing weather and vegetation patterns across the globe, forcing animal species to migrate to new, cooler areas in order to survive. The rapid nature of climate change is likely to exceed the ability of many species to migrate or adjust. Experts predict that one-fourth of Earth’s species will be headed for extinction by 2050 if the warming trend continues at its current rate.

4- Sea level rise from climate change could displace tens of millions of people.As the Earth heats up, sea levels rise because warmer water takes up more room than colder water, a process known as thermal expansion. Melting glaciers compound the problem by dumping even more fresh water into the oceans. Rising seas threaten to inundate low-lying areas and islands, threaten dense coastal populations, erode shorelines, damage property and destroy ecosystems such as mangroves and wetlands that protect coasts against storms. Sea levels have risen between four and eight inches in the past 100 years. Current projections suggest that sea levels could continue to rise between 4 inches and 36 inches over the next 100 years.

5- Climate change is making floods, fires and droughts more frequent and severe.Climate change is intensifying the circulation of water

on, above and below the surface of the Earth — causing drought and floods to be more frequent, severe and widespread. Higher temperatures increase the amount of moisture that evaporates from land and water, leading to drought in many areas. Lands affected by drought are more vulnerable to flooding once rain falls. As temperatures rise globally, droughts will become more frequent and more severe, with potentially devastating consequences for agriculture, water supply and human health. This phenomenon has already been observed in some parts of Asia and Africa, where droughts have become longer and more intense. Hot temperatures and dry conditions also increase the likelihood of forest fires.

6- Climate change will cause storms, hurricanes and tropical storms to become more intense.Climate change will cause hurricanes and tropical storms to become more intense — lasting longer, unleashing stronger winds, and causing more damage to coastal ecosystems and communities. Scientists point to higher ocean temperatures as the main culprit, since hurricanes and tropical storms get their energy from warm water. As sea surface temperatures rise, developing storms will contain more energy. At the same time, other factors such as rising sea levels, disappearing wetlands, and increased coastal development threaten to intensify the damage caused by hurricanes and tropical storms.

7- Climate change brings health risks to the world’s most vulnerable communities.As temperatures rise, so do the risks of heat-related illness and even death for the most vulnerable human populations. Scientists have linked the deadly heat waves to climate change and warn of more to come. In addition to heat-related illness, climate change may increase the spread of infectious diseases, mainly because warmer temperatures allow disease-carrying insects, animals and microbes to survive in areas where they were once thwarted by cold weather.

8- Climate change is already affecting economies around the world.Declining crop yields could put hundreds of thousands of people at risk for starvation. Climate change is affecting businesses and economies at home and around the world. If action is not taken to curb global carbon emissions, climate change could cost between 5 and 20 percent of the annual global gross domestic product. In comparison, it would take 1 percent of GDP to lessen the most damaging effects of climate change.

Bangladesh Bank initiativesWe all are aware of the fact that the change in climate has direct impact on biodiversity, agriculture, forestry, dry land, water resources and human health. To safeguard

82


the planet and it’s ecosystem from the adverse effect of environmental degradation caused by rising carbon emission, encroachment of rivers, improper disposal of industrial, medical & household waste, deforestation, loss of open space etc. Bangladesh Bank in line with global norms has already introduced Green Banking and sustainable practices for all scheduled banks of Bangladesh and circulated a indicative policy guidelines for Green Banking, vide BRPD Circular No. 02 dated 27, February 2011. Bangladesh Bank has declared the following preferential treatments for the compliant banks:

� Points to be awarded on management component while computing CAMELS rating resulted ultimately in overall rating of the Bank;

� Top 10 (ten) Banks’ name will be declared in the Bangladesh Bank website.

� Consideration will be given while according permission for opening new Branch of the Bank.

The policy guidelines segregated the Green Banking activities into 03 (three) phases for implementation. Deadline of phase I was December 31, 2011; Phase II was December 31, 2014 and Phase III is June 30, 2015. Prime Bank Limited has completed all the assigned tasks under phase I and completed all the activities of phase II except formulation of Bank Specific Environmental Risk Management Plan and Guidelines. PBL already approached Bangladesh Bank for introducing an environment friendly innovative green product and publishing independent Green Annual Report following internationally accepted format like Global Reporting Initiatives (GRI) under phase III of Green Banking activities.

Bangladesh Bank also, vide GBCSRD Circular No. 04 dated September 04, 2014 instructed all scheduled banks to allocate 5% of its total funded disbursed loan for Direct Green Finance under 47 (forty seven) refinancing scheme product of Bangladesh Bank.

Prime Bank’s CommitmentAs one of the leading commercial bank of the country, PBL is committed to ensure proactive and prudent management for the environmental degradation arising from our business activities. We are also committed to comply with the environmental regulation for maintaining ecological balance and retaining the globe safe habitable for all living beings and their future generation. In compliance with Bangladesh Bank guidelines, PBL has already formed Green Banking Cell headed by the Chief Risk Officer (CRO). The Green Banking Cell (GBC) has been formed with the task of developing policies, planning and overseeing the overall green banking activities of the bank.

As per GBCSRD Circular No. 08 dated December 24, 2013 the Risk Management Committee (RMC) of the Board shall review the Bank’s green or environmental policies, strategies and program for governing the overall green banking activities of the Bank. Moreover, Prime Bank Limited has formed dedicated Green Finance Cell (GFC) for looking after all green financing issues only. Beside this, formation of an independent Green Banking Division is also under active consideration.

Besides, one of the strategic focuses of Prime Bank Limited is ‘going green’, which includes but not limited to efficient energy consumption, paperless office, financing renewable energy etc. Prime Bank’s achievements in green initiatives are detailed out in green banking section.

Green Banking Policy In light with Banking Regulations & Policy Department, Bangladesh Bank vide their Circular No.02 dated February 27, 2011; Prime Bank Limited has outlined a comprehensive Green Banking Policy for implementing Green Banking activities. During the year 2014, a revised Green Banking Policy was approved by the RMC of the Board.

Green Office GuideThe Bank has developed Green Office Guide and circulated it to all employees for creating awareness on green banking activities & providing instructions on efficient use of energy, water, saving paper, etc. However it is mentionable that, PBL is in process of introducing an advanced Green Office Guide.

Incorporation of Environmental Risk in CRMPrime Bank has incorporated the Environmental Risk Policy in its Credit Risk Management Policy as part of the due diligence review. The incorporation of the environmental scanning to assess credit risk of the borrowers has improved CRM principles significantly. Prime Bank is allowing facilities to the client on the condition of supporting environmental matters and obtaining permission from the related environmental regulatory agencies. Regular monitoring is being done by the respective Credit officials for existing Customers. Moreover, during the year 2014, the Bank has developed Sector Specific Environmental Policies for Agriculture Financing, Textile, Cement, Ship Breaking, Construction & Housing, Chemicals (Fertilizer, Pesticides and Pharmaceuticals), Sugar and Distillers.

Major In house Green Banking Initiatives taken by Prime Bank LtdSeveral initiatives have been taken by the Bank with a view to practice Green Management in the offices.

83

Efficient use of resources, reduction of waste, saving energy and money shall definitely improve our working environment. Some major In-house Environmental Management initiatives are as below:

Solid waste management: 3R approach (Reduce, Reuse and Recycle) has been advised for lowering solid waste. However, careful management and disposal of solid waste has been advised.

Energy & water management: The Bank advised the officials to adopt energy and water efficient practices. The officers have been advised to put emphasis to ensure efficient use of gas, fuel, electricity and water with a view to reduce carbon emission. Energy efficient equipments like energy saving bulbs, products with ecofriendly features are being used in the office.

Paper Consumption Management: Use of scrap or one side used papers for note pad has become usual practice in the workplace. One side used papers are also used for printing draft copies of the office assignments. In addition to that, the Bank has taken following initiatives during 2014: � Arranging paperless Credit Review Committee

meeting (both SME & Corporate) by soft copy presentation.

� Most of the interbank correspondence is done by email instead of letter.

� Requisition for printing & stationery, office stationery, printing of MICR cheque and pool car are done by online requisition software.

� The bank has successfully introduced a software named “E-DOC” for Credit Administration Division, which allows electronic archiving of documents against loans along with reminder system for better monitoring and control.

� Trade Service Department has been centralized, which ultimately reduces paper consumption.

� Human Resource Division has successfully launched online performance appraisal system.

� During the year 2014, a software named “Agenda and Compliance Management Software” was introduced, which eliminated the process of presenting paper based memo during the meeting of the Executive Committee of the Board.

� Currently nine (9) branches are well equipped to arrange video conference which ultimately reduces official travels and establishment of video conference facilities between major distant offices are under process.

� Total number of branches were increased from 134 to 140, but our expenditure for stationery, printing & advertisement was decreased by BDT 1.65 crore which is 7.26% lower compared to previous year,.

Renewable Energy Usage: Up to year 2014, The Bank has already installed solar panels at 21 branches as well as at 12 ATM booths and SME unit offices as part of its commitment to the usage of renewable energy resources.

Green Travel: PBL always encourage the officials to consider Green approaches for any business travel which reduce carbon emission. Moreover, use of public transport and car pooling system has been advised by Human Resource Division during 2014.

Online Banking and Internet Banking facilitiesAll the 140 branches of the Bank are providing online banking facilities through its core banking system namely “Temenos T24”. Fund Transfer to Other bank’s Accounts through BEFTN has been made available through Online Banking for the Consumer Banking Customers. As a result, customers can execute fund transfer through paperless and automated Online Banking over internet to any other account in Bangladesh.

Prime Bank Limited has also offered a safe and convenient Internet Banking, which is to accessible 24/7. By using real-time internet banking our customers can avail the services like Balance enquiry, View account statement, View loans & deposit of their own, Mobile & Utility Bill Payment.

20

20.5

21

21.5

22

22.5

23

2013 2014

Stationery, printing & advertisement expenditure (amount in crore)

134

140

Number of branches

131

132

133

134

135

136

137

138

139

140

141

2013 2014

84


Automated Teller Machine (ATM)In addition to the Bank’s own 160 ATMs, the Bank has joined National Payment Switch Bangladesh (NPSB) network during the year 2014, which enabled the Debit Cardholders of the Bank to enjoy cash withdrawal facility from other ATMs under NPSB Network. Prime Bank has used the BACH and BEFTN mechanism for convenient payment activities which to a great extent supports the concept of green banking.

SMS Banking facilitiesPrime Bank also offers SMS Banking services to ensure instant access to customers’ account information at any time. Any mobile phone user having account of Prime Bank can get the service through their mobile phone upon subscribing. By using SMS banking our customers can avail the services like Balance Enquiry, Mini Statement, Exchange Rate, and PIN Change.

Biometric Smart Card based alternate banking servicePrime Bank Limited in collaboration with Dipon Consultancy Services introduced a Biometric Smart Card based alternate banking service in the brand name “Prime Cash” for the un-banked rural and urban people to address their banking and payment needs. Most importantly, it will provide a fast, safe and simple mechanism for the un-banked men/women across Bangladesh in all municipalities and upazilas. The services that can be obtained through Prime Cash are: Account Opening, Deposit, Withdrawal, Local Money Transfer, Inward Foreign Remittance, DPS, Prime Bank ATM Facility, Mobile Recharge, Salary Disbursement, Balance Inquiry, and Mini Statement.

Cash Back ServiceCash Back Service allows the debit cardholders of the Bank to meet instant requirement of cash through POS terminals of selected merchant points while shopping. Cash Back service meets instant requirement of cash which ultimately increase customer satisfaction.

Capacity BuildingHuman Resource Training & Development Center of PBL arranged 12 Green Banking training Programs for 403 employees during 2014 to familiarize with the Green Banking aspects. In addition to that, officials of the Bank attended various training programs/workshop/seminars on Green Banking issues arranged by Bangladesh Bank Training Academy.

Customer Awareness ProgramThe Bank arranged a customer awareness program in Jessore on March 19, 2014 to create awareness among 120 participants to protect the environment from different pollution and hazards.

Green MarketingPrime Bank Limited is using their web portal for advertising new products as well as the features of existing products to capture the market and also it will penetrate to get new customers. Moreover, customer can contact the respective desk to get more information in this regard. PBL, also convey the various offers of different Credit Cards through SMS.

Green FinancingThe “Green Finance Cell” of PBL was formed exclusively to look after the Bangladesh Bank enlisted green financing products. PBL financed various projects which are environment friendly. During 2014, the bank has extended finance of BDT 6,757.46 million in 24 projects having ETP. The bank has further strengthened its green banking initiatives by financing environment-friendly Hoffman Kiln and Zigzag based automated brick fields, which contribute towards a greener climate. PBL has also disbursed 32.00 million to set up 4 (four) Hybrid Hoffman Kiln (HHK) projects.

0

1000

2000

3000

4000

5000

6000

7000

8000

2013 2014

448.77

6757.46

Green FinanceAmount in million

85

Disclosure and Reporting of Green Banking ActivitiesPBL has been regularly reporting its Green Banking Activities to Bangladesh Bank on quarterly basis since 2011. In view of highlighting our Green Banking activities and creating awareness amongst the stakeholders, a separate section has been incorporated in our Annual Report and Bank’s official website for disclosing our Green Banking activities.

Management Approach towards Green BankingThe Bank’s continuous effort to uphold Green Banking serves as the fundamental base for reduction of carbon footprint impact. The Bank has been vigorously supporting sustainable Green Finance. The Bank adopts processes to assess the environmental and social risks and opportunities arising from its clients’ business activities and manages the Bank’s exposure to reduce its own carbon foot print on the environment as per Environmental Conservation Rules (ECR) 1997 and Environmental Risk Management (ERM) Guidelines of Bangladesh Bank.

Way ForwardPBL is committed to build a sustainable business that brings benefit to the society, environment and the economy of Bangladesh. Some future planning regarding Green Banking are- � Increase Green Finance for installing solar energy

plant, bio-gas plant and other renewable energy plants, bio-fertilizer plants, Effluent Treatment Plant (ETP), Hybrid Hoffman Kiln projects for the production

of brick etc. at lower interest and utmost care. � Proposed necessary budget allocation for Direct

Green Financing as per GBCSRD Circular No. 04 dated September 04, 2014 and committed to finance in Direct Green Finance products in coming days.

� Finance in the economic activities at flood, cyclone and drought prone areas without charging additional risk premium.

� Now a days, Alternative Delivery Channel (ATM, Debit / Credit Card, Internet Banking, BACPS, BEFTN, SMS Banking, Bio-Metric Smart Card, Cash Back service) are ensuring modern banking facilities and PBL will introduce more creative services through Alternative Delivery Channel.

� The Bank’s remote branches will join meeting through Video Conference rather than physical visit.

� Already solar panels have been installed in some of our branches, ATM booths & SME Unit Offices and we are expecting to expand the volume.

� Continuously monitor the inventory details such as consumption of water, paper, electricity, gas, fuel etc. to reduce the consumption of the same and ultimately protecting the environment.

� Arranging Training/Workshop related to Green Banking for both our employees & our customers and committed to continue the same in coming days.

� Planned to arrange more seminars to create customer awareness regarding Green Banking as well as to avail Green Products.

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M A N A G E M E N T T E A M

87

SeniorManagement

Ahmed Kamal Khan ChowdhuryManaging Director & CEO

Md. Golam RabbaniDeputy Managing Director

Rahel AhmedDeputy Managing Director

Habibur RahmanDeputy Managing Director

88


Managing director Ahmed Kamal Khan Chowdhury

Deputy Managing DirectorHabibur RahmanMd. Tabarak Hossain BhuiyanMd. Golam RabbaniRahel Ahmed

Senior Executive Vice PresidentMd. Ezaz Hossain Md. Iqbal HossainKazi Mahmood KarimMd. Anwarul Islam Mohammed Ehsan HabibHasan Mohiuddin Bhuiyan A. S. M. KhairuzzamanA. O. M. Rashed

Executive Vice PresidentShahidur Rahman Khan Farhad UddinSk. Matiur Rahman Muhammad Anowarul Islam Md. Mashiur RahmanAbu Zafar Md. Sheikhul IslamMd. Shahadat HossainMd. Shahjahan MajumderMd. Shahin AlamAbu Ashraf Siddique Md. Iftekhar UddinFerdousi Sultana Nuhal Ahmed Choudhury Mohammad Jashim UddinJaoharul Haq ShahediMd. Omar Kabir Mohd. Muin Uddin Latif HasanRaquibur RahmanSyed Tofail AliKhondoker Fazle HaiderAbdus Salam KhanS. H. Mukhter Ahmad

Senior Vice PresidentSarqume Mohd. Kabir Kazi Tozammel Huq A K M Kamal Uddin Mohd. Afzal Hossain Md. Mahiuddin Ahmed Syed Sahadat HossainImtiaz Ahamed Bhuiyan Mozammel HoqueMd. Anwarul Islam Md. Amzad HossainSyed Md. Nazmul HuqueMd. Shahidul AlamMir Md. Hassanul ZahedMohd. Jamil HossainMd. Tarique Parvez JewelMd. Moniruzzaman Anwarul Hoque Md. Salah Uddin Md. Amir Hossain Majumder Wasequddin Ahmed Chowdhury Farhad Ahmad Khan

Muhammad Muzahid Ho ssain Kazi Zillur RahmanTaher JamilSyed Shafqat RabbiMd. Shaiful HossainMd. Abdul MatinMd. Safiul AminMd. Milon Miah A B M Habibur Rahman Mohammed Abul KalamKamruzzaman Khairul KabirSyeda Nazma ParvinMd. Abul KasemSyed Fakhre FaisalMd. Shahidul HoqueMd. Ramiz Uddin Miah Md. Giash Uddin Mohammed ZakariaMd. Shamsuddin Md. Habibur Rahman Nurul Momen Khan

Vice PresidentMohammad Aminul IslamMd. Moniruzzaman Md. Hafizur Rahman Mallick Md. Toufiqur Rahman Ayeni Sharif Uddin Choudhury Md. Omar Faruque Md. Golam HaiderMd. Shah Alam HowladerAshraf Uddin Ahmed Dewan Arfanul Alam Md. Ibrar Masudur Rahman M A Mubin Shamsher Jamal Mohammad YaqubMostafa Hasan A N M Baki Billah Morshed AhammedMd. Rezaul HaqueAmirul Alam Chowdhury Md. Reza HossainMd. Abdul QuddusMd. AmanullahMd. Abul Kalam AzadA S M Azizul Karim Harunur Rashid Chowdhury Md. Firdous Alam Mohammad Nazim UddinBidyut Kumar DasMd. Nur-A-KaosarMd. HasanuzzamanM. M. Emranul HoqueMehedi HasanChowdhury Fakhruddin Mahmud SiddiqueMohammad Masud ShahjahanMohammad Aminur RahmanFaisal Nurul AminMd. Kabirul Hasan Md. Shahidul Islam Mollah Farid Ahmed Kazi Azharul Islam Md. Jafar HasanMd. Showkat Kamal Sarker A K M Enamul Haque

Md. Abdul Bari Mollah Abu Taher Md. ZakariaDorothy SultanaAli Mohammad Nurul Huda Md. Mozahid Kabir Md. Khaled Anwar Md. Mamunur RashidZahed IqbalMd. Mahbub AlamSaif-Ul-Alam Md. Al-Amin

Senior Assistant Vice PresidentMd. Ahsan Habib Ajmal Hoque Chowdhury Md. Kamrul Islam Md. Yusuf Ali Sharmin AktherGiash Uddin AhmedMd. Ziaul LatifAbdul Mannan Khan Farid Ahmed Syed Tazul Islam S M Khurshed AlamKazi Moinul Haque Md. Aminur Rahman Akanda Sirajul HoqueDebashis Chakraborty Mohammed Abu ShayemMd. Arman Uddin BhuiyanMd. Taj Uddin AhmedMd. Syadur RahmanMd. IqbalHasan-Ul-HuqTofail AhmedMd. Ruhul QuisthFarid AhmedMohammad Khurshid AlamSayed Delwar HossainMd. Abdur RaafiA. K. M. ShahnurSharmin AhmedMd. Saidur Rahman DipuMd. Nazrul Islam K. M. Sakhawat HossainMd. RashaduzzamanNahida SultanaSabina Rahman KhanMd. Alamgir Md. Ariful HoqueMd. Rabiul Islam Md. Rezwan Uddin Swhel Md. Nazrul Islam Florence Sutopa Majumder Kamrun Nahar Md. Mainul Kabir A K M Abdul Alim Ibne Khabir Ekram Ullah Chowdhury Mohammad Jahangir B huiyan Nazrul Islam Nehal Hossain Md. Moinul Hasan Mohammad Ashrafuzzaman S M Parvez Kabir Md. NuruzzamanA T M AhsanSyed Mahammed Ali SuhelMd. Emdad Hossain

Assistant Vice PresedentIqbal HaiderAfzalun Nahar Md. Rabiul AhasanMohd. Baqui Billah Md. Nasir Uddin Siddique Ahmed Md. Mobasshirul IslamAmal Chandra BasakMd. Mizanur RahmanMohammad Shawkat AliMohammad Nazmul HossainMohammad Kamal UddinA H M Be-darul Alam Goni S M Shahidul Islam Shah Mohd. Zakir Hossain Md. Touhiduzzaman Quazi Anwarul Azim Md. Hashmot Ali Mollah Shah Mohammad Mohsin Mohammad Anisur Rahman A K M Khairul Basher Masood Mizan Rupan Kanti PaulNazneen Akhter Shamima Pervin M Faroque Hossain Suhrawardy Mohammad Raihan S haheed Mohammad Sazzad Hossain Shahid Uddin AhmedMunshi Abdus SalimGiash Uddin AhmedS M Shahidul IslamMasud Uddin AhmedSultan Mahbubul HaqueMuhammad Mahmud HasanB. M. Shahrier MajumderKazi Muhammad Rezaul KarimMd. Fazle RabbyMd. Ariful IslamMd. Abu SayeedMohammad Mamunur RahmanSifat Ahmed ChaudhuriMd. Hasan JamalMohammad Badrul AnamShubir Kumar BaruaSalah UddinMd. Rubait Tauhid SiddiqueIftIkhar Ahmed ChowdhuryMd. Walidul IslamMd. Saidur Rahman Md. Rezaul Karim Md. Adil Uddin Mohammad Rafiqul Islam Md. Mobinul Haque Mohammad Sazzad Hossain Khan Md. Abu Muhit Md. Saiful Hasan Md. Faridul Islam A K M Humyun Kabir Ashis Bhattacharjee Mohammad Shakhawat HossainMohammad Mamunur RashidMahmood Khan

89

ManagementCommittee

Asset LiabilityCommittee

90


ManagementTeams

Agriculture Banking

Alternative Delivery Channel (ADC)

Anti-Money Laundering

91

Board Secretariat

Cash Management Department

Card Division

Audit & Inspection Division

92


Centralized Clearing Cell

Corporate & Public Affairs Relationship Division (C&PARD)

Credit Administration Division (CAD)

Corporate Banking Division

93

Credit Risk Management (CRM)

Facility Management Division (FMD)

Human Resources Division (HRD)

Financial Administration Division (FAD)

94


Information Security Division (ISD)

Internal Control & Compliance Division (ICCD)

Islamic Banking Division

International Division (ID)

95

IT Infrastructure & Planning Division

IT Operations Division

Marketing Division

Legal Division

96


Monarch

Operations Division

Research & Development (R&D)

Recovery Division

97

Retail CRM Dept

SME Banking

Risk Management Division (RMD)

Retail Banking Division (RBD)

98


Structured Finance Department

T-24 Upgradation Project

Treasury Division

Trade Services Division (TSD)

99

Corporate Organogram ofPrime Bank Limited

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100


Group CorporateStructure

BangladeshiCompanies

Prime Bank Limited

Overseas Companies

Prime Bank InvestmentLtd. (99.99%)

Prime Bank SecuritiesLtd. (95%)

Prime Bank ExchangeCo. Pte. Ltd. SIngapore

(100%)

Prime Exchange (UK)Ltd. (100%)

Prime Finance (HongKong) Ltd. (100%)

101

ManagementDiscussion & Analysis

The country’s scheduled banks in the year 2014 showed a diverse performance as some banks posted well operating profits while other banks lost their success due to the political instability in the country. The banking sector faced hardship during the year with the political situation, which led to low pick up of investments and in the long term led to low credit growth through the year. Domestic credit growth only grew by 11.6 percent till June 2014, and has not been significantly high by the end of the year. Both credit to the public and private sector have been sluggish throughout the year, which did not help the banking industry. Lower credit growth with increasing NPL has made it a difficult year for all banks in Bangladesh. Export receipts advanced up by 17.65 percent in December 2014 over November, recording a 1.56 percent growth in July-December 2014 compared to the same period in 2013. Import payments based on shipment data increased by 16.64 percent during July-November 2014 over the equivalent period in 2013. Import L/C opening data ascended by 14.77 percent during July-November 2014,which suggests imports may be high in the upcoming year. Treasury operations were successfully managed in the last year which achieved profits similar to last year.

What we did well

� Excellent “Brand Image”

� Network of 122 branches and 18 SME branches at strategic financial centers all over Bangladesh

� Deep market penetration and continuous growth in corporate, commercial and trade finance sectors

� Good market share and healthy financial performance

� Islamic banking products and services including Islamic Credit Cards

� Off-shore banking units in major EPZs

� Exchange House (fully-owned subsidiaries) at Singapore and UK for remittance business

� PBL Finance (Hong Kong) Ltd., a fully owned subsidiary for financing and remittance business

� Real-time online banking through core

banking software Temenos-T24, a world class technology platform

� Expansion of ATM service and KIOSK

� Internet Banking, SMS Banking and Phone Banking

� Credit Cards – Launching of JCB Credit (Classic & Gold)

� Consumer finance - Launching of Shukonna for women only

� Small & Medium Enterprise (SME) finance

� Syndicated financing

� Merchant Banking activities through Prime Bank Investment Limited (fully-owned subsidiary)

� Brokerage activities thought Prime Bank Securities Limited (fully-owned subsidiary)

� Strong framework for Corporate governance and CSR activities

� Initiated a paperless Credit Committee

� Organized an event for Green Banking only for the first time in Bangladesh

� Strong Management team and skilled HR

� Wide customer base all over the country

� Growth of foreign exchange business despite slow economic situation

� Continuous expansion of branches throughout the year

� Diversified product base

CORPORATE BAnkInG DIVISIOnIn line with the countries movement towards developing the country from its present rank, Prime Bank Limited branded itself as the country’s leading corporate base by providing a wide range of financial services, products and offering specialist advice to corporate clients to meet assorted demands of shifting market scenario as well as emerging markets. PBL has enhanced its footprints into Edible Oil Refinery, Vessel financing, Packaging, Food,

102


Power, Construction, Glassware, Healthcare, Renewable Energy, Plastic Polymer, Telecommunications, Agri-Business (Poultry, Food Processing), etc. in addition to traditional industries like RMG, Steel, Pharmaceuticals, Textiles, Ship Breaking & Trading sector.

Corporate Banking Division provides services to its corporate clients through six wings namely (i) Headline Banking Business Group (ii) General Credit Unit (iii) Export Finance Unit (iv) Structured Finance Department (v) Lease Finance Unit and (vi) Corporate Liability Marketing and Cash Management Unit.

Brief description of other units under Corporate Banking Division is as under:

Headline Business Banking Group

Headline Business Banking Group usually deals with the top-ranking customers of Prime Bank Limited. Now-a-days it is very challenging to maintain a smooth business relationship with large corporate customers as there is huge competition in the market. With the fast

changing business environment, the demand of service from the customer’s end is increasing exponentially day by day. PBL believes in keeping pace with the fast changing business era. With an aim to maintain the best possible relationship and to provide most custom-made services to it’s top-ranking customers, PBL has formed a new Business Unit named Headline Business Banking Group (HBBG) under Corporate Banking Division. HBBG is unlikely to the other Business Units of Corporate Banking Division, which process and analysis the credit proposals. The additional feature of this unit is a dedicated team of Relationship Managers. In HBBG, there is a team of dedicated credit analysts who process the credit proposals received from different branches of Dhaka and Chittagong only and places these proposals for approval after complying with regulatory issues and guidelines. Furthermore, the unit is engaged in maintaining value based relationship with top-ranking customers along with analysis of credit proposals. The dedicated Relationship Managers team regularly gives drive for new customers booking and maintains relationship with existing top-ranking customers in connivance with branches. The dedicated Relationship Managers are also engaged to manage the relationship with customers to understand and to cater the customer’s needs on a priority basis and to extend co-operation to credit analyst. HBBG deals with array of products e.g. L.C, LTR, BG, LIM, Overdraft, Time Loan, PC, Long Term Long, Bid Bond, SOD (W), PG and APG. HBBG has customers from different sectors like Commodity, Tobacco, RMG, PTS (Primary Textile Sector), EPC Contracting, Cement, Steel, Engineering and Electronics.

General Credit Unit (GCU)

General Credit Unit was formed considering the nature of credit appraisal and type of clients. General Credit serves through two units, one is GCU-1 and another is GCU-2. These units handle proposals other than Export and Lease & Structured Finance.

Currently these units are dealing with essential commodity trading and processing, construction, pharmaceuticals, telecommunications, real estate, work order financing (for construction of roads, highways, bridges, jetty, embankment, rehabilitation and new construction of railway lines etc.), ship building, ship breaking, manufacturing and steel re-rolling, renewable energy, health etc. The experienced and trained officials of GCU team handle credit proposals and are engaged with processing the proposals while complying with regulatory issues and guidelines under a well-defined structure. After getting request/proposal from branches, proper scrutiny is done by GCU and then it

Industry 43%

Con

stru

ctio

n 9%

Power, Gas, Water &Sanitary Services 1%

Transport, Storage &Communication 4%

Trade Services 15%

Housing Services 10%

Professional andMiscellaneousServices 4%

Others 14%

Corporate Exposure

Text

ile 18

%

Basic metal products 13%

Non-met

allic

miner

al

product

s 12%

Food

man

ufac

turin

g 11

%

Oth

er m

anuf

actu

ring

indu

strie

s 7%

Pharmaceutical 3%

Ship breaking 3%

Ship Building 2%

Rubberproducts 2%

Others 8%RM

G (including bills) 21%

Exposure under Industrial Loan

103

places it to the competent authority for approval. GCU has been maintaining an enviable standard of credit processing. Team members also keep communication with customers from Head Office end to get more understanding on business needs, so that the proper banking solution can be provided.

Export Finance Unit (EFU)

Prime Bank Ltd. has a sizable portfolio in Export financing to support the growing and important textile and Readymade Garments (RMG) sectors of the country. The Unit was formed to take challenge of serving exporters with a specialized team to add value and support 100% export oriented customers. Export contributes around 21% of Country’s GDP and readymade garments contribute 81% of the export earnings. Home Textile, Sweater, knit and other specialized factories are getting prompt support to get various banking services and assistance from this unit. With 28 Authorized Dealer (AD) branches and 3 Off-shore Banking Units (OBUs), PBL is well equipped to serve the country’s export oriented industries. RMG Monitoring Team has been set up under Export Finance Unit for better understanding & monitoring of the business and quick transaction support.

Structured Finance Department

Structured Finance Department (SFD) deals with project finance – both bilateral projects financing and financing through loan syndication. It covers every sector of the economy with a focus on infrastructure, industrial and service sector projects under the umbrella of Corporate Banking Division.

In addition to conventional projects, the Bank is keen to support government’s initiatives for electricity generation through financing power projects. As part of this initiative, Bank provided bridge finance to 341 MW Summit Bibiyana II Power project, the largest Independent power project of Summit Group.

SFD also arranged fund from Japan International Cooperation Agency (JICA) under Bangladesh Bank refinance scheme for one of its customer namely Bengal Remedies Ltd.

SFD was also involved in the process of availing long term Senior Debt of USD 25 Million from Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO) in collaboration with International Division of the Bank.

During 2014, SFD successfully arranged additional syndication loan of BDT 1,120.00 million for Sea Pearl Beach Resort & Spa Ltd. and arranged fund of BDT 630.00 million out of total syndication debt of BDT 850 million for Mehmud Industries Ltd., a concern of Anwar Group. During this period, SFD earned fee income of around BDT 30.00 million from syndication and bilateral project financing.

Lease Finance Unit

With a view to further strengthening and making it more effective, the bank has formed a separate Lease Finance Unit under Corporate Banking Division which commenced operation since 2001. Leasing is a method of financing for acquisition of capital machinery/equipment/vehicles involving a contractual relationship in which the Lessor grants exclusive right to the Lessee to use the machinery/equipment for a stipulated period of time in exchange of a series of rentals. Thus, leasing enables the lessee to avail the uses or services of a machinery/equipment without investing his own fund. Lease Finance yields comparatively higher rate of return. Moreover, lease financing is a secured form of credit as the bank retains the ownership of the leased items.

Lease Finance unit under Corporate Banking Division is also taking care of the NBFI (Non-banking Financial Institution) and finance to the reputed and sound institutions considering growth and NPL position.

Lease Finance Unit of the Bank undertakes the following activities:

I. To diversify credit portfolio for minimizing investment risk.

II. To add more value to the investment since yield is higher comparing other mode of finance.

III. To reap the benefit as a financial service provider having an edge over other leasing companies operating in the country, who have to tap resources from banks at a bit higher price.

IV. To take an effective role in the industrial development of the country.

V. To help generate employment opportunities by providing financial assistance to different projects promoted by entrepreneurs and professionals.

At the end of the year, 2014, the lease finance portfolio of the Bank stood at Tk. 4.90 billion. Prime Bank Limited offers lease finance facility against the following items:

a. Capital Machinery required for industrial unit;

104


b. Capital Machinery required for BMRE of the existing industrial units;

c. Medical Equipments for Clinics, Pathological Laboratories, hospitals etc.;

d. Elevators, Central Air Conditioners, Generators etc. ;

e. Vehicles including luxury coach, bus, minibus, micro-bus trucks etc. &

f. Construction Equipments

Apart from this, the Bank extended loans to 12 Non-Banking Financial Institutions (NBFIs) against which total outstanding was Tk. 1.52 billion at the end of the year 2014.

Corporate Liability Marketing and Cash Management Unit

Corporate liability marketing and cash management serves as the means to keep an organization functioning by making the best use of its cash or liquid resources. At present the department is regularly sourcing cash management business from Govt. agencies, Large local corporate, MNCs, NBFIs, Universities, Schools, TELCOs, Banks, NGOs, etc. Cash management solutions thus help customers in managing liquidity, payments, collection, reconciliation and MIS. Prime Bank has leveraged collection and payment services in different sectors of the country. In addition, the team also provides a wide range of corporate fund management solutions for business houses using the most vibrant technology in Bangladesh.

SME Banking

SMEs play a dominantly important role in the national economy of Bangladesh by making up over 90 per cent of industrial enterprises, providing employment to industrial workers and contributing industrial value addition to gross domestic product (GDP). The relative SME share in manufacturing value-added is much higher than the manufacturing industries sector. Further, as important sources of new business are created and developing new entrepreneurial talents arise, these industries provide

the much needed dynamism and vitality to the national economy. Rapid and sustainable growth of SMEs is undoubtedly one of the vehicles for accelerating national economic growth to the point of having a measurable impact, in the way of reduction of poverty, unemployment and creation of more job opportunities. Generally, SMEs are labor intensive with relatively low capital intensity and possess a character of privilege as cost effective and cost competitive in nature.

Bangladesh Bank has formulated SME policy strategies to assist in achievement of the goals and targets of the Millennium Development Goals (MDG) set by the Government. Accordingly, Bangladesh Bank has formulated/introduced/undertaken different schemes for new entrepreneurs, physically challenged persons, creative writers, green entrepreneurs etc with special funds to provide refinance to banks and financial institutions against lending to CMSEs.

Keeping this in view, Prime Bank Limited has formulated a comprehensive policy on SME financing and made significant progress in financing this sector and the Bank is offering congenial lending products and services so that SMEs can aspire to opportunities of growth and wealth generation.

Prime Bank Limited has been operating SME business as one of the market leaders in Bangladesh successfully since 1995. For efficient SME operation, the division adopted centralized operating practices from the inception by developing need-based, market oriented and transparent check & balance working models.

� The Board has approved SME Financing Policy in its 318th meeting held on 20.04.2009.

� Established a centralized SME Banking Division on July- 2009 and dedicated SME desk in all Branches.

� Separate SME dedicated desk for Women Entrepreneurs.

� Separate monitoring team for SMEs.

� Separate team for selling loan and collecting deposit through SME products.

� Special Credit Risk Management team for SME Banking.

� Different trainings for SME officials as well as for entrepreneurs.

� Commission/incentives based on the performances of Direct Sales team, Dedicated collection team for SME loan.

� Customized products and services for SME.

� Establishment of 18 SME/Agri Branches at different places in Bangladesh.

Agreement with PRAN - RFL Group for Nationwide distributors payment collection service

105

� Developed 8 (Seven) SME loan products.

� Developed clusters under area approach method etc.

� Dedicated Green Officer in all Branches.

Prime Bank’s strategy is to focus on marketing the products to wider range of customers and providing working capital and term loan to different manufacturers, traders and service providers including backward and forward linkage industries that fall within the purview of SME segment.

Bank’s exposure is thus well diversified among 5,600 customers to different sectors viz. cottage, handy crafts, power loom, auto parts, garments accessories, rice mills, light engineering, commodity financing, textile mill, permitted brick field, ship breaking/ scrap iron, poultry farming, fish processing/ dry fish, animal feed, agro-based and agro-processing industry, furniture, hospital / diagnostic center, packaging industry, leather goods sector, jute goods and jute-mixed goods, computer software and ICT goods, green financing-renewable energy etc.

Prime Bank is operating SME business through 18 SME/Agri. branches as well as through Direct Sales Executives deputed at conventional branches all over Bangladesh. Besides, the branches network consisting of 122 branches is playing a significant role in developing the SME sector.

In 2014, Prime Bank has participated in an agreement with Bangladesh Bank for Refinance scheme for Startup Business. Therefore PBL is a party to various refinance programme executed with Bangladesh Bank for making available easy finance to SME sector. So far Prime Bank received Tk. 4,000 lac against 900 clients from various re-finance scheme of Bangladesh Bank.

Prime Bank introduced different customized products tailored to needs of SMEs namely i) Sahaj Rin ii) Chalti Rin iii) Moushami Rin iv) Digun Rin v) Anchol Rin vi) Prodip vii) Prime Subidha & viii) Srijon Rin. Upcoming products: Prime Sohayok Rin for for the benefit of persons with disabilities and product for startup business.

Capacity Building Activities

Prime Bank puts its efforts for the development of their SME position by organizing in various training, workshops, seminar, and symposium to build capacity and awareness among the staff as well as SME Entrepreneurs. In 2014, in such endeavor, Prime Bank–HRTDC imparted training to 494 staffs through different sessions for capacity building and awareness. Moreover the management of the Bank has also affirmed that the all conventional branches should be treated as SME branches.

Sector-wise SME Outstanding

Trade 52%

Manufacuturing

30%

Service

18%

Size-wise SME Outstanding

Micro 7%

Medium40%

Small53%

Rangpur3%

Dhaka59%

Rajshahi 9%

Khulna 9%

Geographical-wise SME Outstanding

Sylhet 3%

Chittagong17%

BB-General

36%

EG8MP 3%

ABD

Fund

32%

JICA11%

PBL Re-Finance availed in di� schemes

88-Wom

en

18%

106


Prime Bank’s Workshop on “SME Delinquency Management”

Prime Bank - HRTDC organized a day long workshop on “SME Delinquency Management” at a local hotel in Dhaka on 12th April, 2014. Mr. Robert Patterson, Canadian CA. former Banker and project advisor INSPIRED, Bangladesh conducted was coordinated the program. SEVP and Head of SME Banking Division Kazi Mahmood Karim and Senior officials of the Bank attended the workshop.

SME Marketing Strategy

Prime Bank Limited is relentlessly working to ensure a vibrant national economy through financing in the SME sector. During the year Bank has been taken several initiatives conducive to the overall growth of

this sector; it is consistently putting an increasing focus on the development of SME sector in the line with the guidelines of Bangladesh Bank.

During the year 2014, the Bank has participated in different local or international seminars, fairs like Women Entrepreneur fair on 13-Mar-2014 organized by Bangladesh Bank, International Seminar on Sustainable SME Development on 30.04.2014 organized by CIRDAP, Women Entrepreneur Fair on 22-Jun-2014 organized by For the women and by the women forum, and SME Financing Fair on 12-13 November, 2014 combinedly organized by SME Foundation and Bangladesh Bank.

Moreover, in order to emphasize on push marketing the bank has implemented Direct Sales Team. This has helped PBL to penetrate the market further and make available finance to the door steps of small and medium enterprises.

Financing women entrepreneurs under SME

Another notable idea in SME financing is the development of women entrepreneurs. In the new framework of SME, Prime Bank is giving top priority in developing and harnessing women entrepreneurs. Bank has designed a separate product “Anchol” for women entrepreneurs. In order to empower the Womenfolk, bank has already disbursed SME loans to 163 women entrepreneurs at lower interest rate. This has made considerable scopes for employment opportunities as well as entrepreneurship motivation among the women business community. During the year bank has been actively participated in different women fairs organized by different stakeholders.

Anchol Rin to Women Entrepreneur“SME Financing Fair-2014” at Pan Pacific Sonargaon Hotel

Prime Bank’s Workshop on “SME Delinquency Management”

107

Project Pictures of SME Loan financed by Prime Bank

Textile (Bed Sheet production)

Textile (Grey Cloth)

Rice Mill

Handicraft

“Women Entrepreneur Fair 2014” organized by Bangladesh Bank at Ruposhi Bangla Hotel

“SME Financing Fair-2014” organized by SME Foundation and Bangladesh Bank at Pan Pacific Sonargaon Hotel

108


Borni Handicraft

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Borni Handicraft –SME Loan financed by Prime Bank Ltd

109

RETAIL BAnkInG DIVISIOnRetail Banking Division plays a momentous role in the Bank by securing a large base of customers, deposits and lending. It also prepares the retail-banking business for far-reaching transformations in its operating environment, organizational structures and customer dynamics by facilitating the innovation of retail products and services in the market.

Through delivery channels like Asset and Liability Teams, Retail Value Center, Premium Banking, Service Quality and Payroll Services the division wires the changes in the retail banking business. Each and Every member under this umbrella, contributes to implement a shared vision of the business, and optimizes the pooling of resources and building a sound portfolio to the epitome of excellence.

2014 showed the tremendous value of the breadth and diversity of division’s earnings profile, and it has seen continued evidence of the strong fundamentals which are essential for longer term growth.

After a successful year in 2014, the Division has much more to do; expecting that the operating environment to remain challenging. But, there is every reason to feel positive and confident about the prospects that this Division will make over the Prime Bank Ltd. as ‘a bank with difference’ for all the stakeholders.

What is Retail Banking Division for

It exists for the clients and customers, for the shareholders, the colleagues, and the stakeholders –it exists for the purpose of helping people achieve their ambitions.

How will the division do that

Respect means respecting and valuing all stakeholders. It is about building trust and promoting collaboration.

Integrity demands the member of this division to act fairly, ethically and honestly. This requires having the courage always to do the right thing and to be accountable for the decisions.

Service means ensuring the clients and customers that they are always uppermost for the division.

Excellence and Innovation call on to use energy, skills and resources to deliver great service for customers and clients and outstanding sustainable results for shareholders.

Stewardship is about being determined to leave things better than to find them, so it constantly strives to improve the way to operate as an organization and the impact it has on society.

Our Customers

The division seeks to support the day-to-day banking needs of the customers who can be categorized as:

� Personal � Premier/High Net Worth Customers

What we offer to them

Retail Banking Division focuses on providing banking services by enabling customers to be serviced in ways that best suit their needs:

� Retail Deposit Products (including current accounts, savings and payments)

� Retail Lending (secured, semi secured and unsecured)- A full suite of loans

� Premium Banking � Payroll Account and Payroll Banking Services

Banking in the right way – means how the division does it becomes as important as what it does.

Provide Value Through

� Accessibility for all customers to simple, transparent and speedy products and services

� Faster or instant decision making and processing

� A focus on providing suitable services for customers’ key requirements

� Relationship propositions tailored for different segments

� The radiant use of data to improve and tailor

offers to customers

Contributing To Income By

Retail Banking Division delivers a significant

contribution to the bank’s revenue through offering

long term value and great customer service to our

customer base, and prudently managing the risk.

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Sustaining Business By

� Supporting society through responsible lending

� Responding to demand for cost effectiveness by investing in innovative and resourceful sales channels

� Running a risk-conscious business � Ensuring we have the right people with the

right tools, delivering the most suitable service

Ensuring Customer Satisfaction By

‘Service First’ and it is key to retain the customers; so, the retail banking division focuses on to achieve the excellence in customer service at branch and other points of contacts through the ‘Service Quality Unit’ which monitors the customer service status of the bank in regular basis by using different techniques.

RETAIL ASSET

A Leading Player In Responsible Lending

Keeping all the uncertainty in mind, the timely executed decisions and foresight of the Retail Banking Division made the hurdle so easy to achieve sustainable profit. Through constant improvement and stance, now Prime Bank Ltd. holds 13% market share.

Financial Highlights of 2014

3.62% Growth in 2014

BDT 12,577.20 Million Loans and Advances in

Portfolio

Total Disbursement of BDT 3,916 Million through

Processing 9,876 Loan Proposals in 2014

15 asset products to meet the different customer

requirements

The landscape for the division has fundamentally changed and will continue to evolve in the coming years. It is believed that these changes are not recurring but represent a structural shift.

A Full Range of Retail Loans

Prime Bank Limited provides retail lending through:

Sales Channel- Retail Asset TeamBranch Network- 140 Branches

RETAIL LIABILITY

A Broader Product Range to Remain The Bank of Choice

The Retail Banking Division has taken strong measures to make sure that it remains the bank of choice for the customers.

As a bank operating in the very competitive market, the Retail Banking Division continues to develop a range of products for all tiers of customers. It leads to an increase in the number of customers and an increase in low or no cost fund in retail liability portfolio

Financial Highlights of 2014

Procured 45,786 nos. of CASA through which

Monthly Average of BDT 153 Million Low No Cost

Fund booked.

Semi SecuredLoan 3%

Secured

Loan 47%

Unsecured

Loan 50%

Figure: Composition of Retail Asset Portfolio as on 31st December, 2014

9293.5

10936.4 11303.312138.3 12577.2

0

2000

4000

6000

8000

10000

12000

14000

2010 2011 2012 2013 2014

BDT

Mill

ion

Figure: Retail Asset position for last 5 years

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51,826 nos. of My First Account with an

Outstanding Amount of BDT 144 Million

Procured 7,444 Fixed Deposit with an amount BDT

4,513.35 Million

620,381 Savings Accounts

205,354 Deposit Schemes

4,518 “SHUKONNA” Account Holder

A PAST TO BE PROUD OF

In 2014, Retail Banking Division undertook various initiatives to provide superior support to the customers and procure business in the approach dubbed different campaigns.

Through the network of sales channel and branches,

the campaigns delivered a range of tailored banking

solutions and ensured the promised business

2,469 Dreams came true with our home loan

(Swapna Neer) in 2014

We served 18,222 needs with our Any Purpose

Loan in 2014

981 Customers decorated their home with ‘House

Hold Durable’ Loan in 2014

Outside of DAP 295 Customers built their houses

with ‘Abash’ Loan

Retail Asset Tournament - 2014

The division initiated this campaign in May 15, 2014 for

three months to achieve the sales target and to motivate

as well as to groom up the retail business people.

BDT 1,135.83 Million retail loan has been acquired

through this campaign.

“Let’s Increase Low Cost Fund”

This campaign was launched with an aim to acquire

more low cost/no cost deposit due to strengthen

deposit mix of the bank for reducing cost of deposit

32,773 no’s of CASA & My First Account were

procured through this campaign

Prime Bank achieved ‘First’ position in School Banking Conference at Sylhet, organized by Central Bank

Payroll Banking and Prime Payroll AccountPrime Bank launches ‘Payroll Banking’ and ‘Prime Payroll Account’ in April, 2014 leveraging our existing and new Corporate, SME, Islamic Banking and Retail relationships which transformed into a new customer acquisition strategy with lower originating costs, low delinquency, highly focused on cross selling and servicing. So far, the division has bagged 43 corporate and more than 6,000 accounts under this service.

‘Branch Visit’ Program

“Branch Visit” program alike mystery shopping was initiated in April, 2014 under the supervision of ‘Service Quality Unit’. The unit has devised a methodology to measure the overall branch performance and evaluated 138 branches based on that.

‘Acquiring Team’ Formation

For attaining maximum access to the market and utilizing business opportunities, acquiring team has

No. of CASA

99,548

65,929

97,612

0

20,000

40,000

60,000

80,000

100,000

120,000

2012 2013 2014

Figure: Number of CASA in last 3 years

3496.793725.77

4513.35

0500

100015002000250030003500400045005000

2012 2013 2013

BDT Mill

Figure: FDR Amount in last 3 years

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been formed, who will making tie-ups with strategic partners to build quality portfolio, attaining business targets as well as to reach target customers

UNDERSTANDING AND PLANNING FOR THE FUTURE

Innovation has always played a central role in Retail Banking

Division’s activity and is reflected in its business. The

division perceives innovation as understanding changes

and customer expectations and finding solutions in the

face of economic changes and market competitions. For

Prime Bank Limited, innovation is a commitment to its

customers, and the stakeholders are going to experience

and enjoy the changes that will be brought through the

different initiatives near-term in 2015.

In 2014, 837 New people are driving their cars with

our “Car Loan”

FOCUS OF EFFORTS IN 2015

In 2015, the division will continue to build on the

progress made in 2014. It aims to respond positively

to the evolving market. The business environment

will inevitably call for continued rigorous review and

adaption of the mix and structure of the businesses of

the division to ensure it generates sustainable returns.

Another key focus over 2014 and the coming years

are rebuilding the trust that customers, clients, and

stakeholders have in Prime Bank Limited. The division

has pledged to increase transparency and conduct the

business in the right way, as set out in the values.

The Division has started to put legacy issues behind and

have greater clarity on what the future holds, particularly

in terms of regulation and compliance. So, in 2015

the Division is going to bring noteworthy changes like

business process improvement and applying different

concepts in retail banking to strength the business of

the bank.

The main challenge ahead of this Division is to respond

better to the current needs and anticipate the future

demands of the customers and clients. As they become

increasingly savvy, Retail Banking Division is going to embed new offers across the product line.

ABSOLuTE PRESTIGE BAnkInG - MOnARCh

Prime Bank Limited has recently introduced Premium banking service which is named as

‘MONARCH’. The idea behind such type of banking is to provide hassle free services to the high net worth customers who require very personalized and sophisticated banking services. ‘MONARCH’ is a symphony of banking benefits, unique investment products, personalized service and exclusive lifestyle benefits that bring complete harmony to all financial needs of our Premium customers.

‘MONARCH’ is designed to manage the wealth and enrich the life of our premium clients with exceptional privileges.

At Prime Bank, it is our constant efforts to meet all the requirements of Premium Banking Customers efficiently by offering various banking services. As such our Monarch customers are enjoying the following exclusive benefits:

Exclusive Services � Exclusive Premium Lounges in Banani, Baridhara &

Tejgaon � Dedicated Relationship Manager � Family Benefits � Meet & Greet Privileges at Hazrat Shahjalal

International Airport � Flight Reservation Assistance for Domestic &

International Travel

Prioritized Banking � Exclusive Dual Currency Debit Card with Higher

Withdrawal Limit � Free Cheque Book � Free Internet Banking, SMS Banking & Mobile

Banking � Discounted Rate on Retail Loans � Waiver of Fees on Various Products & Services � 50% Discount on Safe Deposit Locker Facilities � Pre-approved Platinum Credit Card

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Diversified Lifestyle � Fantastic Shopping Discount At

- Leading Local & International Stores- Home Décor Outlets- Food & Beverage Outlets

� Special Rates on Room Booking at Selected Hotels � Discounts at Salons/Spas and Health Clubs � Invitation to Glamorous Premier Shows & Events � Exclusive Health Packages at Reputed International

Hospitals like Bangkok, Parkway& Raffles Hospital. � Travel Benefits � Special Discount at Antique Luxuries - Jewellery

Stores

The following qualification criteria have been set forth as a pre-requisite of becoming a Monarch Customer.

Category Eligibility CriteriaPrime Bank

Limited

1

A/C Opening Balance (Individual/Joint Account)

BDT 20 Lac & above.

FD Opening Balance (Individual/Joint Account)

BDT 30 Lac & above.

Family Package (No. of Beneficiaries)

3 persons.

A/C opening Balance of the family members.

BDT 10 Lac per person.

2Persons having salary accounts through PBL.

BDT 3 Lac & above.

3 Home loanBDT 70 Lac

& above.

CARD DIVISIOnThe day is not so far away when people will feel comfortable to hold a Credit Card rather than cash money. Plastic card is the sharp weapon of future banking business. As it is convenient, safe and prestigious to carry with, all-class customers are rushing for it. Banks have also introduced a number of credit cards which have already spurred the competition of growing card market. Prime Bank Limited is a leading name in plastic card market. “Get more from life with Prime Bank Credit Cards” it is the motto of Prime Bank Cards. Every day we try to add more value to our existing customers, we ensure convenience while they shop, dine, stay at hotels, roam cities and countries or anytime they swap the card anywhere. No need to mention, credit cards have become a part of metro lifestyle & payment mood.

We just ensure our customers are happy with our cards. Prime Bank commenced its card business as one of the pioneer local bank issuers in 1999 and started acquiring cards in 2001. Since then it has captured a substantial portion of the market share by having around 90,000 issued cards. Prime Bank has a superfluous privilege in grabbing the market as it is a prominent member of both MasterCard & VISA brand. We have also exclusively launched JCB Credit Card this year – the only Japanese Credit Card which is also the only Asian brand of Plastic Card in the world. We have simultaneously conventional credit cards as well as Islamic credit card. Moreover, we are playing a leading role in acquiring business in the areas of 5 star hotels, restaurants and chain-shops.

We have a wide range of card types as per the inevitable needs to amuse the life style e.g. Classic/Silver Card, Gold Card, Platinum Card. It is Prime Bank Credit Card which first put its step in the industry as a card with cardholder picture to avoid fraud transactions. Prime Bank is also highly cognizant about the quality of portfolio and adopted FRM, first time in the industry, a real time transaction monitoring to bring a safeguard against potential risk of credit card fraud & unauthorized use of cards. Another unique value added service of Prime Bank Cards in the industry is SMS Pull facility under which a cardholder can meet up his card related selected queries through sending SMS and getting instant feedback from the bank.

Prime Bank’s unique selling proposition includes Reward Card (a complimentary card based on transaction profile), complimentary health packages in Apollo and Square Hospitals and Shop N Win Loyalty program (Get an opportunity to grab Tk. 100,000 or Tk. 45,000 or Tk. 15,000 as a surprised reward while making transaction through Prime Platinum Credit Card).

Among vigorous initiatives taken by Card Division in 2014 the promising ones were launching of JCB Credit Card – the only Japanese Credit Card, 16% cash back facility over all retail purchases on the occasion of National Victory Day which is the 1st ever in Bangladesh, 1st year annual fee free campaign, revision of card cheque processing fee at 1.25% and launching of Prime PMI (pay in monthly installment). Various MoU sighed in this year with merchants in regard of up to 12% discount at Meena Bazar, up to 12% discount at Agora, 15% discount at TNT, 15% discount at NOVOAIR and many more.

As a continuous process, the bank achieved technological advancement, service improvement and product development during the year which contributed in the growth of key performance indicators of card business as given under:

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Key Performance Indicators

Year

2011 2012 2013 2014% Growth Over 2013

Card Base 57,741 67,947 76,442 86,435 13.07%

Advance (BDT in million )

750 915 1,042.20 1131.75 8.59%

Operating Profit (BDT in million )

65.37 80.23 94.10 100.78 7.09%

The last but not the least word that is to be marked for the past year is our sharp outlook in grabbing every business threshold that made it possible to achieve the business KPIs of Card division.

InTERnATIOnALDIVISIOnForeign Remittance

The consistent growth of foreign remittance inflow for Prime Bank Ltd. further progressed in 2014, enabling the Bank to contribute in routing a total of Tk. 3,948.35 Crore of foreign remittance from different parts of the world. The regular inflow of foreign remittance has brought stability in the foreign currency administration of the Bank. Prime Bank is maintaining years of effective and fruitful relationship with the renowned exchange houses of Saudi Arabia, UAE, Malaysia, USA, Italy, South Korea, Oman and the global players Western Union Money Transfer & RIA Financial Services. Inclusion of ‘Al Ansari LLC’ in the network in 2014 has further extended the strength of Prime Bank for sourcing remittance from UAE. Two of our deputed officials are working in UAE towards increasing volume of remittance from UAE. Furthermore, a good numbers of officials have been stationed in Singapore and UK to promote and procure foreign remittance from expatriate Bangladeshis. In 2014, amount of inward foreign remittance received from Saudi Arabia was more than 40%, while PBL’s fully owned subsidiaries in Singapore and UK added more than 20% and 10% remittance respectively.

The NRB Banking Department of the Bank backed by state-of-the-art IT facilities has given their utmost dedication and effort towards the sourcing and speedy distribution of foreign remittance throughout the year 2014. As a part of Bank’s strategic initiative to handle increased volume of inward foreign remittance, the Bank has continuously proved its efficiency and competency in speedy delivery of inward remittance to the beneficiary through its excellent distribution network comprising

of own branches along with country-wide network of two reputed NGO - Buro Bangladesh and UDDIPAN.

Correspondent Relationship

Prime Bank’s wide correspondent network now includes 638 members, covering 277 banks spread across 75 countries as on December 31, 2014. The Bank is successfully maintaining such relationships around the world to facilitate international trade transactions. Prime Bank maintains 37 Nostro Accounts in 10 major currencies with reputed international banks around the world in all of the important global financial centers. Prime Bank also offers Vostro account service to foreign correspondents. PBL enjoys sufficient credit lines from its correspondents, including Credit Limit under TFFP of Asian Development Bank (ADB) and International Finance Corporation (IFC), for adding confirmation to letter of credit as and when needed. During 2014, Prime Bank availed bilateral loan in USD from IFC, FMO and other Correspondent Banks for use in trade finance transactions through Offshore Banking Units.

Offshore Banking

Prime Bank is offering Offshore Banking facilities through 3 (three) Offshore Banking Units (OBU) located in Dhaka Export Processing Zone, Chittagong Export Processing Zone and Adamjee Export Processing Zone. Total Loans and Advance of three OBUs reached to USD 110.74 million as on December 31, 2014 compared to USD 77.81 million as on December 31, 2013, recording a growth of 42.32%. During the year 2014, OBUs have made a Profit of USD 1.71 million as against USD 1.43 million in 2013.

Prime Exchange Co. Pte. Ltd. , Singapore

The Company experienced satisfactory level of business growth in 2014, however, due to changes in policies by Singaporean government on expatriate workers; the money services business has become quite competitive. Total volume of remittance was SGD 102.60 million in 2014 compared to SGD 89.79 in 2013. The company made profit before tax of SGD 276,036 in 2014 compared to SGD 99,795 in 2013. The company operates with two Branches in Desker Road and Jurong East in compliance with the regulations of both Bangladesh Bank and Monetary Authority of Singapore (MAS). Growth in business was possible due to marketing efforts, personalized service, enhanced distribution network and the efficient service platform of “RemitFast” software.

The company has been effectively utilizing its PBL branches as well as 3,000 (approx) outlets of other banks and NGOs branch network in Bangladesh for

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distribution of remittance to beneficiaries in the far flung areas timely and efficiently. Also on June 2014, the company signed a drawing arrangement with Janata Bank to expand its reach in Bangladesh. Based on experience from providing remittance service to Non-resident Indians (NRIs) in Singapore through HDFC Bank, PEC has also signed rupee drawing arrangement with ICICI Bank, India which is going to help increase its coverage in India manifold. As part of its endeavor to expand in different corridors, in Sep 2014 the Company signed PESO remittance agreement with BDO UNIBANK INC, Philippines to cater to Philippines nationals living in Singapore to send remittance to the Philippines. PESO remittance service is going to be launched soon. The effort to explore business to new remittance corridors will help keep the growth momentum that has been achieved in 2014.

PBL Exchange (UK) Limited

The company operates with three Branches in London, Birmingham and Manchester. Strict adherence with compliance issues made the business environment very challenging for the MSBs in the UK. The business figures has remained static at volume of remittance GBP 22.38 million in 2014 compared to GBP 23.77 million in 2013. Introduction of WorldPay POS machines in all three branches to facilitate credit/debit card transactions has helped to diversify the clientele and reduce the dependence on cash transaction. All the three branches are putting continuous efforts for business growth and expansion of customer base. The Company is expected to reach a better position in 2015.

PBL Finance (Hong Kong) Limited

Total asset of the company reached to HKD 231.08 million as on December 31, 2014 compared to HKD 243.83 million as on December 31, 2013. The company has made a net profit of HKD 5,495,536 in 2014 compared to HKD 5,037,527 in 2013. The overseas team, which includes expert officials on deputation from PBL as well as local recruits from Hong Kong, has been rendering personalized service to corporate/businesses in Hong Kong and has gained satisfactory response from its widening client base. Within the short span of operation since Sep 2011, the Company established SWIFT connectivity (BIC: PRBL HK HH) which went live in Aug 2014, making its trade finance service operations smooth and world class. The company is going to strive forward to increase its revenue through advisement, negotiation, confirmation and discounting facilities against banker’s acceptance on L/Cs originating from Prime Bank Limited and other Bangladeshi Banks.

TREASuRyTreasury is a vital and indispensable part of every Bank. Prime Bank Treasury Division is not an exception. Over the last couple of years Prime Bank Treasury has been continuously performing very well despite adversaries & economic turmoil globally as well as within the country. The Year 2014 was unlike the previous year. There was no such political turmoil within the country that was observed in 2013; although it took almost half of the year before confidence of the business entities started to grow. But once people were convinced about the encouraging environment, they started investing again, which was witnessed through growth in import, export and remittance that started from third quarter of 2014.

In the year 2014 Treasury achieved all of its KPIs successfully, even exceeded in some areas especially in Liquidity Management, Primary Dealers Operations, Government Securities Trading & Foreign Currency Dealing and Investment.

Prime Bank’s Treasury primarily focuses on expanding transaction volume, utilizing different market opportunities within all risk and regulatory limits, strengthening ALM operations and creating a diversified fund management channel by accurate assessment of domestic and overseas market trends and movements. Through its proper Asset Liability Management and efficient trading operations, Treasury Division strives to minimize market and liquidity risks. On the other hand, for enhancement of its profitability, Treasury makes every effort for proper assessment of the market trend and allocation of its assets and liabilities in line with the market trend.

In most of 2014, the Local Money Market as well as Foreign Exchange Market was liquid. This was primarily due to slow down in our local investment. In this situation, to support country’s economic growth and to revive investor’s confidence, Bangladesh Bank took several steps under inclusive banking, specially credit accessibility for agricultural as well as small and medium enterprises (SME), empowerment of women, green banking, modernization of financial sector, Mobile Banking, e-commerce, export promotion and liberalizing foreign exchange transaction to ensure steady economic growth while containing inflation.

Prime Bank Treasury, at the very beginning of the year, through its own market research and market intelligence anticipated the situation very correctly and adopted an investment and fund management strategy accordingly.

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Our investment strategy in Money Market and Primary Dealership as well as Foreign Exchange contributed to a very successful 2014.

In 2014, Prime Bank has once again been able to establish themselves as one of the top Primary Dealer Bank of the country, in both Primary & Secondary Market of Govt. securities. Bangladesh Banks recognition in this connection depicts it all. Overall trading of Govt. securities achieved new milestone of BDT 61,344.20million and we earned BDT 255.90 million as capital gain in 2014 compared to BDT 152.25 million of 2013. We also earned an underwriting commission of BDT 46.57 million for successful bidding in the primary auction market.

Prime Bank Money Market Desk was very active in the money market all through the year. The revenue generated by MM Desk in 2014 was BDT 250.66 million.

The Interbank Foreign Exchange Market was quite stable and liquid up until November’14 when USD started to appreciate against BDT and stood at 77.95 at the end of December’14 which was 77.45 at the very beginning of November’14. Despite of facing low volatility in USD/BDT rate for the first 10 months of 2014, our FX Desk was able to generate exchange gain of BDT 876.41 million in ’14. FX desk handled a business volume of USD 3,053.81 million. The inward remittance at the end of 2014 stood at USD 509.42 million.

In 2014, Treasury also developed and launched a new kind of deposit product named “Prime NFCD Account” for its Offshore Banking Branches. The main objective was to mobilize FC deposit for the Offshore Banking Branches. Prime NFCD Account is also a unique kind of Deposit Product in our country. In 2014 FX desk of Treasury also restarted cross currency dealing with the permission of the Board of Directors.

Asset Liability Management (ALM) is an integral part of Bank Management. Head of Treasury is the member secretary of ALCO. Through ALM our Bank mainly aims to achieve objectives such as:

� Growth in assets & liabilities. � Containment of risk in a coherent manner. � Stability and consistency in earnings and � Profitability.

ALM desk, through its own market research and market intelligence presented the market outlook throughout the year to give an explicit idea about the market liquidity for availing market opportunities for investment and fund deployment in the market. ALM desk also presented the bank’s overall financial position in front

of the senior management to formulate an effective investment and fund management strategy for the bank.

In 2014, Treasury operated within all regulatory limits and there was no single instance where Treasury violated any regulatory limit, which reflects Prime Bank Treasury’s commitment to operate within the rules and regulations of the Bank as well as other regulatory bodies.

Treasury, as a major contributor to bank’s revenue line, contributed significantly in 2014. All our strategy and policies that were adopted in 2014 paid us very well and helped us to have a profitable 2014. Overall Treasury revenue numbers in 2014 from different revenue heads are given below with a comparison of 2013 to show the growth in its business horizon and revenue line:

Figures in Million

Treasury Income


Foreign Exchange Gain 876.41 930.44

Interest Income Call Loan 83.11 91.89

Interest Income on Placement /Deposit (Local)

1.89 0.90

Interest Income on Placement /Deposit (Foreign)

165.66 142.51

Interest Income on Govt. Securities

4,998.19 4,650.71

Interest Income on Debenture/Bonds

56.71 96.61

Capital Gain for Sell of Govt. Sec.

255.90 152.25

Gain on discounted bond/bills 1,029.56 672.17

Underwriting Commission against Treasury Bill/Bond

46.57 21.71

Total 7,514.01 6,759.19

Growth 11.17%

6759.197514.01

0

1000

2000

3000

4000

5000

6000

7000

8000

2013 2014

In millionTreasury Income

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TRADE SERVICE DEPARTMEnTAs part of Strategic Priorities & Action Plan (2012-2014) Prime Bank Limited has started centralization of its Trade Finance Business since February, 10 2013. The primary objective of centralization of Trade Finance Business was to optimize utilization of the resources and their expertise under one roof without compromising regulatory control while enhancing service standards and minimize transactional turnaround. Currently all Trade Finance Business of Non-Authorized Dealer (Non- AD) Branches are being routed through Trade Service Department (TSD). Consequence of which, the customers of the Non- Authorized Dealer Branches (Non-AD) are now receiving trade services of the bank from one point which helps them to minimize the turnaround time with better service standard complying all relevant controls.

After successful completion of Trade Finance Business of Non-Authorized (Non-AD) Branches, Prime Bank started centralization of Trade Finance Business of its Authorized Dealer (AD) Branches of Dhaka Division since October 01, 2013. Out of 28 Authorized Dealer (AD) branches, Trade Finance business of 25 Authorized Dealer Branches of the whole country has been completed by December31, 2014.

As of today Trade Finance businesses of 117 branches (98% of the total number of branches including both AD and Non-AD Branches) of Prime bank Limited across the country have been centralized. As per Road map centralization process of the remaining Authorized Dealer (AD) Branches will be completed by within 1st Quarter of 2015.

ISLAMIC BAnkInG DIVISIOnIslamic banking products and services based on Islamic Shari’ah principles introduced by Prime Bank through its five Islamic banking branches got tremendous response from a considerable portion of its clientele who are eager to accept Shari’ah compliant products and services. Prime Bank is also offering Islamic banking products and services through Islamic Banking Service Desks set up at some of its conventional banking branches.

Prime Bank enjoys a very strong brand image in the banking sector and the bank has a very good market reputation and its Islamic banking business also has proved to be superior compared to others and also its own conventional system. Its Islamic banking market share and growth rate is the highest among the conventional banks having Islamic banking branches. Considering the fact that the Islamic banking industry is at its growth stage in the country and competitive rivalry among the industry members is increasing, Prime Bank have set the vision to be a trend setter in this field by adopting proper strategy and objective in order to achieve its goal.

The bank identifies all of its Islamic banking activities by adopting a generic name ‘Hasanah’ - the brand name for Islamic products and services of the bank, which has been used in the Qur’an and the Hadith to denote good deed, welfare, virtue, beauty spot etc. The strategy to launch ‘Hasanah’ brand has proved to be a good move - the Islamic banking business is growing at a competitive rate despite various limitations for its expansion. This growth is also comparable to the overall growth of the Islamic banking sector of the country.

The Islamic banking manpower of the bank is more than one hundred for whom the bank arranges regular training programs on operation of Islamic banking. Prime Bank is an active member of Central Shari’ah Board for Islamic Banks of Bangladesh and Islamic Banks Consultative Forum. Thus Prime Bank is committed to uphold the sentiment of majority of the people in the country as ‘A bank with a difference’.

Products and servicesPresently Prime Bank offers almost all the products those are available in the country under its Islamic

Uncovered2%

Covered98%

All Branch

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banking operations for sourcing and utilization of funds or in other words, pooling resources and deployment of the said resources. The following products are available now:

Deposit products1. Al-Wadeeah Current Account (AWCA)

2. Mudaraba Savings Account (MSA)

3. Mudaraba Special Notice Deposit (MSND)

4. Mudaraba Term Deposit Receipt (MTDR)

5. Mudaraba Double Benefit Deposit Scheme (MDBDS)

6. Mudaraba Contributory Savings Scheme (MCSS)

7. Mudaraba Education Savings Scheme (MESS)

8. Mudaraba Hajj Savings Scheme (MHSS)

9. Mudaraba Monthly Benefit Deposit Scheme (MMBDS)

10. MudarabaLakhpati Deposit Scheme (MLDS)

11. Mudaraba Millionaire Deposit Scheme (MMDS)

12. Mudaraba House Building Deposit Scheme (MHBDS)

13. MudarabaLaksmaPuron Savings Scheme (MLPSS)

14. Mudaraba 150% Deposit Scheme

15. Mudaraba My First Account

16. Mudaraba Brighter Tomorrow Deposit Scheme

17. MudarabaSukonna Deposit Account

18. Mudaraba cash Waqf Deposit Scheme

Investment products � Hasanah Home Investment (Manjeel)

� Hasanah Auto Investment (Burak)

� Hasanah Household Durables Investment (Asbab)

� Hasanah Medical Investment (Shifa)

� Hasanah Card (Islamic Credit Card)

Financial analysisNationwide, Islamic banking earned around 20% market share of the banking sector (private commercial banks)

of Bangladesh. Among the Islamic banks, fully fledged Islamic banks conduct around 95% of the Islamic banking business of the country while the rest is done by the conventional banks having Islamic branches and windows. Among these banks, Prime Bank has the lion’s share – around 25% of the market share in deposit, investment and profit.Since inception, Islamic banking business of Prime Bank marked steady growth in all areas - deposit, investment and profit. The Islamic banking business of Prime Bank is growing at a competitive rate.

With only 5 branches, around 10% of Prime Bank’s business is conducted under Islamic banking modes with only 4% of manpower. Cost Effectiveness of Islamic banking products is better compared to overall business - Cost of Deposit 7.43%, Cost of Operation 0.98% and Cost of Fund 8.42%. In income matrix, Islamic banking business of Prime Bank also shows reasonable performance - Yield on Advance 12.72%, Spread 5.28% and Burden Coverage 84.16%.

In Islamic banking, employee productivity of Prime Bank is also in a better position compared to conventional banking – income per employee 7.70 million Taka, expenditure per employee 1.40 million Taka, profit per employee 6.30 million Taka and employee expenses to operating profit 13.63%.

Activities – Year 2014As per decision of the management, ‘Hajj Deposit Campaign 2014’ was conducted with a view to provide different services to the Hajj Pilgrims and mobilize low-no cost deposit in the process. For the purpose, a team of officials worked under the supervision of Islamic Banking Division to provide marketing and sales effort. The performance of the team was excellent – targeted number of agent accounts was opened and fees of thousands of pilgrims were mobilized. SIM card for pilgrims (Mobily, KSA) and other gifts were given to 5,000+ pilgrims. We also participated in the 7th Hajj and Umrah Fair and set up booth at Ashkona Hajj Camp.

PBL Islamic Banking (Hasanah)

Deposit Investment

Al-Wadiah Mudarabah Bai Ijara Share Scheme

Savings Term Scheme

AWCA

MSAMSND MTDR

MCSSMESS MHSS

MMBDS

Bai-MurabahaBai-MuajjalBai-Salam

LeasingHigher

Purchase

MusharakaMudaraba

ManjeelBurakAsbabShifa

H P S M

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Five special workshops were conducted on Islamic banking for the officials of Islamic Banking Branches (IBBs) and concerned officials of Head Office at Dhaka, Chittagong and Sylhet by HRTDC in association with Islamic Banking Division where 135 officials took part.

As per decision of the Management, sales effort was exerted and contacts were made with different business concerns to sign MOU under which discount/privileges would be given to Hasanah Cardholders (Islamic Credit Card) for consumption of their products and services.

Three Iftar Mahfils and discussion programs were held at Dhaka, Chittagong and Sylhet centrally with all the branches of the cities where a Paper was presented on “Shari’ah Banking – Bangladesh Perspective” by renowned Islamic scholars before huge gatherings. The programs were widely publicized through print and electronic media.

Three meetings of Prime Bank Shari’ah Supervisory Committee were arranged where different operational issues were reviewed and the Muraqibs of Shari’ah Supervisory Committee conducted Shari’ah audit and inspection at the Islamic banking branches and submitted reports thereon. Besides, Medical Camp at Bishwa Ijtema was arranged where thousands of devotees were given primary medical services for the consecutive sixth year.

The Islamic banking branches (IBB) have made considerable progress in achieving business targets competing with the conventional branches of the Bank during the Year 2014. It is expected that Islamic branches would also perform better and achieve targets this year under the guidance and prudent leadership of the Management of Prime Bank, In Sha Allah.

ALTERnATIVE DELIVERy ChAnnELSEvolution of ADC

Online banking is an electronic payment system that enables customers of a financial institution to conduct financial transactions on a website or ATM operated by the institution, such as a virtual bank, credit union, retail bank or building society. Online banking is also referred to as Internet banking, e-banking or virtual banking, where customers are served exclusively through electronic channels other than traditional branch banking.

Prime Bank started its ATM acquiring business and issuing Propitiatory ATM cards in the year 2008 with the following objectives:

1. To ensure 24/7 services to the customers of the Bank.

2. To decentralize the customers for providing spontaneous and prompt services as required.

3. To reduce the pressure & risk of Cash Counter at branches end.

4. To increase low Cost/no Cost deposit of the bank.

From April 16, 2009 this wing has immersed as a separate division under the name of Alternative Delivery Channels (ADC) Division by the approval of the 317th Board Meeting where customers are served exclusively through electronic channels other than traditional branch banking.

SL. Name of Service\Product at ADC Started from Status As on 31.12.2014

1 ATM Machine January 2008 160

2 a. ATM Card - Proprietary April 2008 1,91,000

b. Debit Card - MasterCard January 2011 1,85,000

3 Prepaid Card (Dhaka Club) November 2008 905

4 Internet Banking (Altitude) December 2009 Handed over

to ADC (12/10/2014) 31,000 users

5 SMS banking July 2010 25,000 users

6 Phone Banking May 2011 3,500

7 Information Kiosk May 2011 04

8 Prime Cash (Biometric Smart Card) May 2012 71,000

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Brief narration on ADC Products:

1. ATM Booths Prime Bank Ltd. entered into the digital banking arena by launching ATM services in January 2008. At the end of 2014, there are 160 live ATMs across the country. We accept MasterCard, Visa Card, JCB Card, Prime Cash and PBL Proprietary Debit Card under NPSB network bank’s card.

2. ATM Card / Debit Card

ATM Card service of PBL was started from March, 2008 and by the end of 2014 the number of ATM Cards (proprietary) is 191,000.

MasterCard Debit Card was launched in January 2011 and the number of MasterCard Debit Card reached to 185,000 at the end of December 2014. PBL joined NPSB network in the year 2014 under the supervision of Bangladesh Bank. Also PBL Debit Cardholders can enjoy the cash withdrawal facility from our 160 live ATMs as well as other ATMs under NPSB Network. At the end of 2014 the bank’s total number of Debit Card is 376,000.

3. Prepaid Card (Dhaka Club)

DCL Prepaid card is a value added service for the Member of Dhaka Club. We have issued a total number of 905 cards.

4. Internet Banking (ALTITUDE)

We have launched Internet Banking Service, ALTITUDE in the year 2012 as one of the pioneers Bank. ALTITUDE is becoming popular among the Customers of PBL for its unique inter-intra Bank Financial Services. Moreover, using ALTITUDE, customers can view the account details; pay utility bill, credit card bill of PBL and other Banks from anywhere, anytime. To meet and exceed the expectation of its customers, ALTITUDE is getting diversified with more and unique features which will attract more customers in the coming days and will improve the service experience of the existing customers. At the end of the year 2014, the total number of customers of ALTITUDE was around 31,000.

5. SMSBanking

As a modernized bank we introduced SMS Banking services to its valued customers since July 2010. Number of users is about 25,000 and increasing day by day. SMS Banking comprises SMS PUSH-PULL, Bulk SMS and Alert SMS Service. By PUSH-PULL services registered customer may receive their account balance, mini statement, and currency exchange rate information at anytime from anywhere using their mobile handset. Through Bulk Push SMS we acknowledge our customers regarding services and different promotional activities. By SMS alert our customer will get alert message instantly for the transaction that took place in their account.

6. Prime Cash (Biometric Smart Card)

As a part of inclusion banking, Prime bank introduced “Prime Cash” service on May 20, 2012. It’s easy to use, unique and it’s the first ever in the country. Based on Biometric Smart Card, the service is highly secure and authenticates transaction matching cardholder thumb impression only.

Prime bank issued around 71,000 number of “Prime Cash” card through its 1,174 agents including 138 branched network (PBL branch) in different location of the country including urban and rural area. In this service our main customers are students, farmers, garments worker, rickshaw puller, fisher man, driver, labor etc. Prime Cash cardholders can enjoy different banking service like Deposits, Withdrawal, Fund transfer, ATM, Mobile top-up and Salary disbursement using Prime Cash Card. We also receive huge foreign remittance by Prime Cash card amounting to Tk. 2 crore in the year 2014 from major ten countries around the world. Through Prime Cash service, card holder receives their foreign remittance from different countries sent by their relatives.

7. Information KIOSK

Prime Bank Limited installed KIOSK on June, 2011 for its debit card holders. Through KIOSK system a customer can avail of services, such as, (a) Balance enquiry (b) Mini-statement (c) Utility bill payment of Grameen Phone, Airtel, ROBI, Banglalink mobile operator (d) PIN change etc. Prime Bank Ltd. has 4 KIOSK systems.

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8. Phone Banking

Four our valued customers to easily access some availing facilities 24/7 from home or outside of the bank, Prime Bank Limited launched Phone Banking Service in May 2011. PBL Phone Banking Service provide various services to the customers, such as, balance enquiry, activation/block debit card, available limit enquiry/total outstanding/minimum payable amount/last date of payment of Credit Card through IVR (Interactive Voice Response) system. Moreover, Phone Banking Service has been popular day by day. At the end of December 2014, there are around 3,500 users is enjoying this service.

9. Bank POS Service

As a part of continues development of ADC Services, a new service has been introduced as Bank POS to expedite cash withdrawal through Debit Card facilities from the branches when there is no cheque book with the customer. There are 20 bank POS in various branches of PBL.

10. Cash Back Service

This is another value added service for our valued customers. Cash Back service allows PBL Debit Cardholders to meet the instant requirement of Cash through POS terminals of selected merchant points at the time of shopping in exchange of prescribe charges. We have started this service from Jan 16, 2014. At present we have 20 outlets under this service.

11. JCB Debit Card

We have the privilege to launch this new Brand of Debit Card in Bangladesh for the 1st time as no other Bank has officially issued this card as yet. We are already acquiring this Card at our ATM/POS terminals and very soon we are going to issue the Debit Card.

With the help of this newly branded card PBL Debit Cardholders can enjoy the cash withdrawal facility from our 160 live ATMs as well as other ATMs under NPSB Network in exchange of a prescribed charge.

12. Dual Currency Platinum Debit Card- MONARCH

Indeed, this is a matter of profound pleasure to announce that Prime Bank Limited is launching Monarch-a Premium Banking Service on October 27, 2014 to provide hassle free services to its esteemed customers. It’s an exclusive service that is embarked for a privileged few who maintain an average given balance above a certain threshold limit in their account. This card can be used in any MasterCard Location worldwide. Two accounts can be tagged with a single card; one is BDT another is USD (RFCD) only.

13. Easy Cash (Mobile Banking)

Prime Bank Limited performed the soft launching of Mobile Banking Service on March 25, 2012. But the commercial launch is delayed due to some technical issues. However, for providing quality service and to fulfill the goal of financial inclusion, Prime Bank Limited is working to launch the Mobile Banking Service in a more convenient and effective way. Considering the current market practices and vulnerabilities, PBL is on its way to prepare itself to provide the best quality Mobile Financial Service to the customers in terms of Security, Service Quality and Convenience. We hope that we will be able to launch the Mobile Banking Service shortly once the required service quality is ensured.

14. Cash Deposit Machine (CDM)

We have the privilege to launch Cash Deposit Machine (CDM) as per Management desire. By using this service a customer can deposit their money by 24/7. The installation of the CDM Machine is under process.

CEnTRALIzED CLEARInG CELL (CCC) To ensure a modern payment and settlement system infrastructure for the country, Bangladesh Automated Clearing House (BACH), the first ever electronic clearing

house, with its two components: Bangladesh Automated Cheque Processing System (BACPS) and Bangladesh Electronic Fund transfer network (BEFTN) a state of the art technology went on live on October 07, 2010 and February 24, 2011 respectively.

Prime Bank Limited is providing services through Centralized Clearing Cell to its valuable customers. Total number and amount of instruments in the automated clearing (BACPS & BEFTN) are increasing day by day as customers are being highly benefited.

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0

2000000

4000000

6000000

8000000

10000000

12000000

No. of Cheuqes(Outward)

No. of Cheuqes(Inward)

No. of Cheques (Outward & Inward) in 2012 and 20132012 2013

0

200000

400000

600000

800000

1000000

1200000

No. of Cheuqes(Outward)

No. of Cheuqes(Inward)

No. of Cheques (Outward & Inward) in 2013 and 2014 2013 2014

No. o f cheques cl eared No. of EFT cleared

Benefits of BACH: BACH minimizes risk, fraud and forgery, reduces cheque carrying & clearing cost, elimination of lost and stole instruments, reduces payment processing

time dramatically; ensure faster and secured payment and settles payment for all Instruments of the whole country under a single umbrella of the Bangladesh Bank.

IT InfRASTRuCTuRE & PLAnnInGInformation Technology Division

Information Technology (IT) Division of PBL was established at the beginning of its banking operation. The division is well equipped not only with technology, but also with a dedicated professional workforce which has been built-up for support as well as development of new satellite applications. Information technology of PBL enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. Technological development of the bank tremendously increases its customer service as

well as trust worthiness of the stakeholders towards the bank.

Information Technology Infrastructure

The banking sector requires a secure and reliable communication infrastructure to ensure operational efficiency. PBL has a robust network infrastructure with scalable, secure, redundant and load balanced architecture to support its customers regarding the on-line transactions with the highest level of security. PBL uses world renowned Active Devices in its network infrastructure. Connectivity to and from PBL networks and external networks are carefully planned and controlled. PBL IT staffs are strictly ensuing security policies when designing new or upgrading existing networks, taking into consideration for managing users, dividing networks into segments and restricting access to information based on different business and security policies.

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Groups of information services, users and information systems are segregated on networks. To mitigate the risk of unauthorized access to network devices the following guidance is in place:

Production, staging and development zones are established and physically and/or logically separated using firewalls; � Network zones are implemented and managed in

a way that segregation of environments are there;

� Firewalls are used to provide granular access control between the various network zones and only required communication ports, protocols, devices and servers are permitted;

� Users are only being granted access to those areas of the network and systems for which they are authorized.

Strict policies are in place for maintaining different network segregation to manage the network infrastructure like internet, intranet and extranet.

Datacenter is connected with the head office and different branches all over the country through this network. All the branches are connected with the core router at the datacenter using fiber optic, radio link or VSAT.

Redundancy: As per the business continuity plan of the bank, redundancy has been kept for all the devices installed in the Datacenter, Disaster Recovery Site as well as the branches. Link level redundancy as well as device level redundancy has been maintained for all branches to ensure maximum uptime and better services to the customers. Link and device level redundancy has been maintained in datacenter for different network devices like Core Router, Core Switch, Core Firewall and Distribution Switch.

Load balancing

Application control engine (NLB) has been used to provide load balancing facilities for different banking application servers like core banking, mobile banking, switching, and e-commerce gateway.

Security

Network security remains essential to protecting data and privacy. Many services/devices have been installed to secure PBL network such as firewalls, encryption, intrusion prevention and intrusion detection. By combining a few key security features and procedures, PBL maintains the privacy of data, ensuring the safety and security of network, and preventing access

to malicious hackers and non-authorized users by adopting latest technologies. The objectives of the Network Security procedure are:

� To provide an overview of the risks associated with connectivity to external networks.

� To define the security and control requirements to protect the firm in relation to the protection of the network perimeter.

� To provide security guidance to system administrators to ensure the continued secure management of network perimeter infrastructure as per our central bank’s security policy.

The security controls are properly applied to reduce the risks associated with connectivity to external/internal networks. The implementation of connectivity with external/internal networks is properly authorized, authenticated, monitored, encrypted and managed by IT staffs that are properly trained in networking technologies.

Monitoring: NMS system with a dedicated NOC team is in place for monitoring the PBL network. PBL has the technology to monitor and manage the network infrastructure.

Access Control System: PBL can monitor and control the door access and for visitor management and perimeter monitoring. PBL is equipped with a 32-bit Windows based GUI point-and-click interface. This security interface animates whenever activity occurs on the security system, be it a door opening or a person entering the datacenter.

CCTV System

PBL is using CCTV systems to monitor the building premises. Cameras and software are being used to monitor and record all type of activities.

During 2014, PBL replaced old hardware and systems for its existing core banking system. This upgrade has enabled PBL to provide better banking services, both at its branches as well as through electronic banking channels (e.g. ATM, POS, KIOSK, Internet Banking, Mobile Banking, Phone Banking, etc.).

ATM and Transactional Switching Network

The Bank has successfully completed the integration with Japan Credit Bureau (JCB). Under the network of PBL’s renowned switching system IST, the bank has currently deployed 161 ATMs and 1,500 POS terminals and there is a plan to deploy more in the near future. The

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bank has also successfully completed the integration with NPS (National Payment Switch) with 30 Banks. Moreover, using our robust switching system IST, the bank has been using highly secured electronic payment system Prime Cash which enrich the customer services of Alternative Delivery Channel.

Relevant hardware, software and networking gears are in place to support the bank’s ADC operations like Phone Banking, Utility Bills Pay Service, SMS Banking, Prime Cash, ATM, etc. To ensure uninterrupted and smooth customer service in all transactional media, IT division continuously work on performance tuning for database and application, networking and server hardware on regular basis.

Video Conferencing System

PBL has implemented Video Conferencing System to connect with remote branches for strengthening relationship between Head Office and branches. By using the system, Management can save time and money by avoiding long distance travel in order to attend meetings. Currently, the system has been implemented in few branches. The bank has a plan to cover all the branches under the system by the first quarter of this year.

IT Service Desk

IT Service Desk application is an initiative of IT Infrastructure & Planning Division to provide effective and efficient IT support services to the users of the Bank. Users do not need to call to the IT support staff for IT services. They have access to the self-service user interface of IT Service Desk to log their IT services like incidents, problems, etc.

The IT Support Staff, who are integral to the IT Service Desk function, offering different levels of IT support service, are called Service Desk Agents. These Agents, Supervisors and Service Delivery Managers use IT Service Desk extensively for managing day to day IT Support Operations.

IT Service Desk Agents work on requests for IT service and support from the users of IT services. They are also responsible for ensuring that all requests for IT Support or Services are logged appropriately, with all essential information being recorded in the ticket. They move the ticket along according to the workflow, to ensure that the request is appropriately handled and the issue is resolved. IT Service Desk application serves as a tool to record all requests received and to guide the Service Desk Agents towards request fulfillment.

CREDIT RISk MAnAGEMEnT (CRM)Risk is inherent in all types of business. However, for Banks and financial institutions credit risk is considered to be the toughest. Credit risk is most simply defined as the potential that a borrower or counter-party will fail to meet its obligations in accordance with the agreed terms and conditions. Credit risk management needs to be a robust process that enables a Bank to pro-actively manage its loan portfolio in order to minimize losses and earns an acceptable level of return for stakeholders. Since its formation, Credit Risk Management (CRM) Division of Prime Bank is working to maintain a sound credit portfolio.

In Prime Bank, CRM Division is playing among others the following major activities:

� Assessing risks inherent in the credit proposal with due diligence i.e.:

- Identification of credit risk

- Ways out of risk mitigation

- Assessment of credit requirement

- Evaluate proposed facility pricing

� Monitoring of credit portfolio through review to ensure sound asset quality.

� Communicating the decision of the competent authority of the Bank regarding credit proposals and issuing Sanction Advice.

� Complying with internal & external regulatory authorities

� Identifying problematic borrowers through periodical review of different types of credits, maintain effective follow-up and supervision and take all possible measures in time to save from classification in light of: Structuring, Adequacy of security, Pricing and profitability, Financial analysis, Performance, Turnover, Repayment

� To update Bank’s Credit Policy/Lending Guidelines

� To guide/assist Business wings regarding both the business issues as well as the compliance issues

� Maintain Limit Sanction Register.

In 2014, CRM Division has emphasized on obtaining credit rating of its borrower by the External Credit Rating Institutions (ECAIs) to get relief in capital cushion as

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well as to ensure sound credit portfolio in exchange of the scope to award less pricing benefit to the superior borrowers. So far under direct persuasion total 394 numbers of borrowers credit rating process has been completed.

In terms of ensuring compliance, as a division, CRM has satisfactory complied with the Bangladesh Banks audit findings and related guidelines in 2014 which will have direct impact on CAMELS rating.

Last year as per directives of the Board, CRM Division has started to formulate and modified various policies like RMG Policy, Scrap Iron Financing Policy, Lease Finance Policy, Large Loan Financing Policy, Work Order Financing Policy and HBL Financing Policies which will be placed to the competent authority for approval in 2015 to bring the dynamism in bank’s financing strategies.

CRM Division is continuously monitoring the credit portfolio of the Bank. To make it more effective and faster, the Division has started issuing monitoring the account position of borrowers based on T24 System besides branch provided statement vigorously.

Hopefully, this will help more effectively to maintain sound credit portfolio of the Bank and to reduce non performing loan ratio.

CRM division is assisting the Management with generating ideas for new products. For example, jointly with Business Teams it has adopted ‘Time Loan” to meet financial requirement of valuable borrowers. However, in the last year, CRM has brought several modifications in ‘Delegation of Business Power (DBP)’ of the Bank to make the approval process smooth and business friendly. Finally, it is expected that as a part of continuous up gradation, CRM Division will actively and pro-actively act to up hold the position of the Bank complying with the rules and regulations.

CREDIT ADMInISTRATIOn DIVISIOnThe functions of Credit Administration Division (CAD) are basically focused on the post approval activities and CAD always ensures that proper documentation and approval are in place prior to disbursement of loan facilities. Centralized CAD is established with a view to safeguarding

of Bank’s assets and to maximize “stability in assets quality” by reducing the “Risk” to an optimal level.

During 2014, CAD has completed a number of initiatives which are listed below:

� Completion of Disbursement Centrally: The task of disbursement of all loans and advances centrally for all the branches (140 branches) has been completed in 2014.Presently, all the credit operation (Disbursement, Adjustment, Closure, Modification, Restructuring and Rescheduling) through T24 are done centrally. The Outcome of Central Disbursement from CAD are:

� Error Free Transaction

� Control Over Unauthorized Disbursement

� Almost zero Operational Risk

� Better Credit Discipline

� Completion of eDoc implementation: As a part of commitment towards ensuring proper documentation and monitoring, CAD has already established eDoc in all the branches of the bank. eDocis the automation process of security documentation and monitoring as it allows the electronic archiving of security documents along with reminder clock for better monitoring and control.

� Completion of Re-arrangement of CAD Structure: To ensure the proper documentation, central disbursement, better monitoring and control over the assets, the rearrangement process of CAD structure took place in 2013 which was successfully completed in 2014. In 2014, Sanction Advice Unit was established along with 5other units namely Disbursement Unit, Documentation Unit, Limit Loading Unit, MIS, Monitoring & BB Returns Unit and CIB Unit. This rearrangement is treated as a milestone towards the centralization of CAD.

� Regularization of the Documentation Lapses found during Re-vetting: To ensure the strength of our asset portfolio, during 2013 CAD successfully completed there-vetting of security documents of the borrower whose total credit exposure is BDT 10 crore and above. During 2014, strong monitoring was conducted for regularization of the inadequacies/lapses found during the re-vetting process and almost 80% of the lapses have been regularized.

� External Audit: To detect the documentation lapses and operational faults,an external audit was conducted (by A. Qasem & Co., Rahman & Rahman Huq and ACNABIN) in 2013 throughout the branches regarding the customers having exposure of BDT.50 crore

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and above. Here CAD was entrusted with the responsibility of coordination of the audit and in 2014 CAD was engaged in close monitoring and maintaining liaison with the branches for regularization of the inadequacies/lapses found during the audit.

� Training on eDoc, Documentation, Legal Issues and CIB: In 2014, CAD completed eDoc training for all the branches and some divisions of Prime Bank Limited. In addition, CAD arranged the training covering the documentation, legal issues and CIB for almost 100 Credit Officers of Dhaka, Sylhet and Rajshahi Zone.

InTERnAL COnTROL & COMPLIAnCE DIVISIOnIdentifying, measuring, controlling & monitoring of various types of risks are vital for ensuring good health of a bank as well as its whole financial system. For managing risks, Prime Bank Limited uses different risk management tools, including Internal Control and Compliances. Internal Control & Compliance is a management process formulated to achieve effectiveness and efficiency of operations, reliable financial reporting as well as compliance with the existing laws and regulations of Bangladesh Bank and other regulatory bodies to supervise and control the risks or business activities of the Bank.

As per Basel–II accord, operational risk and supervisory review is clearly focused in the Pillar- 1 & Pillar- 2. At the same time considerable importance has also been given on internal control & compliance, supervision and monitoring. As prescribed in the Bangladesh Bank core risk guidelines on Internal Control and Compliance, Management Committee (MANCOM) of Prime Bank Ltd reviews the overall effectiveness of Internal Control Systems.

To comply with the changes brought in the Bank Companies Act 1991 and the Bangladesh Bank Circular No. 11 dated October 27, 2013, ICCD has been restructured and started its functions with three departments named as a) Monitoring Department; b) Compliance Department and c) Integrity Management

& Vigilance Department. Since its inception, ICCD has been fulfilling its responsibilities successfully such as:

� Constantly reviewing the internal control structure and mechanism, with the emphasis being placed on regulatory requirements, Bangladesh Bank risk guidelines, processes, systems and specific controls to ensure that high risk areas are regularly reviewed and monitored.

� Spot checking of the Branch activities through surprise audit to find out major lapses and irregularities.

� Monitor the operational performance of the branches especially through DCFCL and Quarterly Operations Report (QOP) at prescribed frequencies i.e. daily, weekly, monthly and quarterly and to regularise the detected lapses/irregularities. Update the control points in DCFCL in accordance with Bangladesh Bank guidelines, laws and regulations, Risk assessment matrix etc.

� Compiled information on Internal Control and Compliances, General Banking & Operations, Loans & Advances and ICT, preparation of “Self –Assessment of Anti Fraud Internal Control Report” and duly submit it to Bangladesh Bank on a quarterly basis.

� Co-ordinate with Bangladesh Bank and the customers to solve the complaints raised by the customers directly and through Bangladesh Bank and reporting to Bangladesh Bank.

� Undertake measures to control irregularities in policy, procedures and guidelines through MIS such as parking & internal accounts, Asset liability mismatch, suspicious expenditures and errors in transfers & postings both manually and automatically.

� Ensure full compliances of regulatory requirements and Bangladesh Bank as well as Internal Audit annotations. Compiling all relevant circulars & guidelines and maintaining strong liaison with regulatory authorities.

� Follow up of the decisions taken in the MANCOM, Board Meetings, EC Meetings, Audit Committee Meetings, Risk Management Committee Meeting and IT Steering Committee Meetings.

� Conduct surprise visit to the Branches and head Office randomly to identify the lapses/irregularities as well as perform emergency investigation as per instructions of the Management.

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AnTI-MOnEy LAunDERInG DEPARTMEnTBangladesh Bank through BRPD Circular No. 17 dated October 07, 2003 among others advised all scheduled commercial Banks operating in the country to put in place effective risk management system which includes Money Laundering Risk Management. Money laundering, a criminal act recognized all over the world has very severe consequences in the economy and security of the society.

PBL has updated Anti Money Laundering Guidelines immediately after enactment of Money Laundering Prevention Act-2012, which includes Senior Management commitment to the anti-money laundering program. The Management has evolved such a culture for the Bank so that all the employees strictly adhere to each and every provision of Money Laundering Prevention Act 2012 and Anti-Terrorism Act-2009 with amendment in 2012. Later a Circular was issued for compliance of the Anti-Terrorist (Amended) Act-2013. All employees of the Bank, irrespective of the position they hold, are accountable to the Top Management and regulatory body for their activities which might directly or indirectly relate to money laundering.

Activities of Anti-Money Laundering Department during the year 2014 included:

� A message sent from the desk of Managing Director on January 06, 2014 to all employee of the Bank for ensuring compliance in AML issues

� Submitted Reports to Managing Director on quarterly basis regarding AML activities

� Use of Uniform A/C opening Form as prescribed by Bangladesh Bank

� Declaration of Transaction Profile has been obtained for all accounts

� Reporting of Cash Transaction Report through CD media & goAML software as per instruction of Bangladesh Bank

� Reporting of Suspicious Transaction Report to Bangladesh Bank was regular

� Reporting of Unusual Transaction to Central Task-Force was regular

� Collected and reviewed the Self Assessment Report from the Branches and take corrective actions when needed

� Solution of the problems/issues as and when received from BFIU of Bangladesh Bank

� Compliance of Bangladesh Bank requirements from time to time and attending all bi-monthly meetings of Central Task Force arranged by BFIU of Bangladesh Bank

� AML Department has arranged four training programs in Chittagong, Sylhet, Jessore and Bogra where total 206 participants received training on prevention of money laundering and terrorist financing

� As per requirement of AML Department, HRTDC arranged total seven Training Programs on AML for the Officers who didn’t received any AML Training within last two years. Total 302 participants from different branches received the training

� AML Department and HRTDC jointly arranged total three workshops on FATCA where Operation Managers from all our Branches attended

� Internal Audit & Inspection Teams have conducted AML inspection on our branches to find out the lapses in anti-money laundering issues

� Surprise visit have also been paid by AML Department on our 64 branches to detect & rectify the weakness in AML activities and to build up awareness among the employees

� Follow-up and monitoring of Audit Report (related to anti-money laundering) as and when received from Bank’s Internal Audit Division and External Auditors of the Bank

� Conducting warm-up session round the year for updating knowledge of the new Money Laundering Prevention Act-2012 and Anti-Terrorism Act-2009 (with Amendment in 2013).

fInAnCEFinance Division covers a wide range of activities from the basic record keeping for providing information to assisting managers in making strategic decisions. Finance department is responsible for all the day to day transactional accounting for the bank. This includes tracking of all transactions, informing management of any irregularities and ensuring proper regulatory reporting on a timely basis.

Finance department prepares the bank’s budgets and forecast, and reports back on the progress to management through the year. This information can be

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used to plan for important decisions regarding deposit, loans and advances, staffing levels, asset purchases, expansions, cash needs etc. before they become necessary.

Management accounting information is provided to managers so they can use it to monitor the operations and decide where further attention is required. Management information will include some non-financial information as well and is communicated to branch managers in a way that is easy to understand.

Management of capital adequacy ratio (CAR) and reporting on a quarterly basis to Bangladesh Bank is another important area of the finance division. Also, arrangement of funds through different sources and advising management the most cost effective way in raising such capital are other significant activities of the Financial Administration Division (FAD).

Corporate Tax/VAT administration and arrangement of getting the assessment done in proper time is a major role of the division. Deferred tax calculations are being done very precisely to ensure that PBL is saving on income tax whenever the opportunity arises. FAD is now more compliant with regulatory guidelines which gives PBL additional comfort of avoiding any future risks of complications and ensures utmost tax savings.

Finance Department is often call upon to provide information to assist management in making key strategic decisions, such as which markets or projects to pursue or the payback periods for capital planning and investment. The MIS wing of FAD is very active in providing analysis of loans and advances and deposits to management on a timely basis and also closely monitoring costs of all branches in PBL and giving reports about each branch on a timely basis to the competent authority.

huMAn RESOuRCESDEVELOPMEnTHuman Capital

Prime Bank Limited has a favourable image as an employer of choice. The Bank has positioned itself with a performance-driven rewarding work culture; where employees are treated with respect and receive widened opportunities to realize their diverse

potentials fully as well as benefit the organization by demonstrating value creating behaviours. A group of motivated and engaged employees with diverse talents are one of the strengths of Prime Bank.

Prime Bank has a special focus on converting the human resources into the human capital, i.e., ‘knowledge, competency, attitude and behaviour embedded in employees’.

Recruitment and selection process

The recruitment and selection of Prime Bank follows the ‘best fit’ approach. As per Bank’s requirement, Human Resources Division ensures that the potential candidates are properly assessed, selected and placed on-time as per required competencies (KSA – Knowledge, Skill & Attributes) and experience. Prime Bank has a recruitment policy that clearly states the criteria and procedures to recruit fresh and lateral entrants.

The Bank has a Management Trainee Program which is aimed to recruit outstanding fresh graduates and develop them as the future leaders of Prime Bank Ltd.

In 2014, the Bank selected a total of 176 fresh candidates as Management Trainees from a pool of 28,567 applicants after multiple written tests and interviews.

Balanced workforce diversity

Prime Bank believes that diverse, heterogeneous teams generate greater creativity, innovation and business development. Prime Bank is aware of the fact that an inclusive culture maintains and drives workforce diversity by fostering the exchange of ideas and collaboration among individuals and across groups. To speak simply, the constant success of PBL depends in part on maintaining a plurality of perspectives.

Besides, the ration of male and female employees has been increasing over the time. Currently, approximately 602 of the employees are female.

Gender diversity among employees:

Gender No. of Members Percentage

Male 2265 79.0%

Female 602 21.0%

Total 2867 100.0%

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Increasing percentage of Female over the years:

Year % of Female Employees

2011 18.59%

2012 19.77%

2013 20.52%

2014 21.00%

Learning & development opportunities

Prime Bank continuously thrives to transform Human Resources to Human Capital through appropriate learning and development initiatives in every aspects of work area. HR Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment.

The ‘Management Trainee Development Program’ of Prime Bank is designed for newly recruited Management Trainees (MTs) who receive job rotation across the country and different functions in a structured process. This effectively designed program provides ample opportunities to acquire necessary knowledge, skills and on-the-job-experience. All the MTs who were recruited in 2014 are going through the development program.

In 2014, Prime Bank’s internal HR Training and Development Centre arranged training on 62 different topics for 4,370 enthusiastic participants. Besides, a total of 644 employees were sent to participate in various training programs/conferences in home and abroad. In total, the number of participants who participated in trainings/conferences has increased by 48% over the last year.

The whole capacity building efforts is pivoted on the unique understanding of banking sector as well as required behavioural skills to create a group of

competent professionals with strong leadership skill. The banking sector is complex and diverse with evolving nature of threats and the risks. So, the training module is updated time to time for employees of the Bank in the changing context of financial market.

Competitive compensation & benefits package

Prime Bank has a flexible compensation and benefits system that helps to ensure pay equity, is linked with performance that is understood by employees, and keeps in touch with employee desires and what’s coveted in the market, while maintaining a balance with the business affordability. The compensation and benefits are regularly reviewed through market and peer group study. The well-crafted total rewards help the Bank to attract, motivate and retain talent that produces desired business results.


Other than monthly competitive base pay and a good number of allowances, Prime Bank has variety of market-competitive benefits schemes. The various cash and non-cash benefits include: Company car for Top Level Executives, Car maintenance allowance, Leave fair assistance allowance, Medical treatment allowance, Maternity benefits, Car loan facility, House loan facility, Staff loan at discounted interest rate, House furnishing allowance, Travel allowance, Festival bonus, Annual leave etc.

PBL also provides long-term as well as retirement benefits to employees, like: Leave encashment, Provident fund, Gratuity benefit, Retirement benefit, Partial and full disability benefit, Death benefit to family members etc.

Career growth with Succession planning

PBL always plans for employees so that they can advance their career goals. This includes advancement into more responsible positions. The company supports career opportunities internally so that talented employees are placed in upgraded positions and thereby enables them to deliver their greatest value to the organization.

In addition to vertical career growth, employees may also grow horizontally. Whenever possible, Human Resources Division mobilizes employees across different functions and branches; thus assisting them to progress with varied skills and experience.

2011 2012 2013 2014

% of Female Employees


18.59%

19.77%

20.52%

21.00%

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Besides encouraging individual employee growth and development, the Bank also gives effort to identify and retain the human resources who can potentially be the successors of mission critical roles. Prime Bank acknowledges that Succession Planning & Management is vital to the continued success of the Bank. So, the Bank continuously assesses organisational, divisional and team capability gaps to identify, develop and retain the successors in a timely manner to meet the demands of the future.

Comprehensive performance management program

Prime Bank has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. The performance evaluation is a step by step by process where an employee first rates himself/herself. Then she/he is rated by the first level supervisor and then finally by the second level supervisor. To ensure a proper performance evaluation and rate the employees based on their comparative performance, the line Management is guided by the Human Resources Division. This performance appraisal system is considered as crucial for the Bank as this is a very important tool to identify and distinguish the performers and non-performers. Prime Bank believes that a well-executed performance appraisal system can help to reward the deserving employees, as well as help to ensure further development program for the rest.

The comprehensive performance management also includes an assessment of employees’ functional and leadership competencies. This appraisal process helps to identify the competency gap and training needs of employees. All permanent employees of PBL undergo annual performance appraisal process.

Reward & recognition program

The Bank has a well-designed Reward & Recognition program that gives special attention to employees’ actions, efforts, behaviour and performance. It meets the intrinsic psychological need for appreciation of employees’ efforts and supports business strategy by reinforcing certain behaviours (e.g., extraordinary accomplishments) that contribute to Bank’s success. Followings are the different cash and non-cash awards given to employees for their exemplary works:

� The Chairman’s Star of the Stars Award (CSS)

� CEO’s Banker with Exceptional Service Traits Award (BEST)

� Outstanding Recovery Initiative Award (ORI)

� Commendable Branch Performance Award (CBPA)

� Trainees with Outstanding Performance Award (TOP)

� Around the Year Appreciation Award (AAA) etc.

Ethics and compliance

Prime Bank is always committed to establish the highest level of business compliance and ethical standard.

The Bank has an ‘Employee Code of Ethics and Business Conduct’ – a framework of ethical behaviour for all the employees of the organization.

Prime Bank maintains its reputation as a law-abiding organization and a good corporate citizen. It complies with all the prevailing laws and regulations of the country. Employees are trained and guided to conduct business in compliant manner. The policy and procedures regarding Prime Bank’s business process are prepared in adherence to the laws and regulations.

All employees are properly inducted to comply with Code of Ethics and conform to the relevant laws and regulations. HR Division makes sure that during joining employees read, understand the ‘Code of Ethics and Business Conduct’ and acknowledge the same by signing.

The Board of Directors of Prime Bank approved the ‘Employee Code of Ethics and Business Compliance’ with a commitment to set the high ethical standards so that customers’ expectations and interests are protected in a compliant manner.

Employees are encouraged to report any wrong-doing within the Bank. The Head of Internal Control and Compliance and Human Resources Divisions are the primary channel to report any incident.

Openness in communication to foster the exchange of knowledge and ideas

Prime Bank promotes, recognizes and executes great ideas. This is possible because the Bank encourages knowledge sharing, open house discussions, employee-management meets, etc. Employee communications and consultation are the lifeblood of any business. Proper exchange of information and instructions help the Bank

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to function efficiently and provides the opportunity to develop greater trust in discussing issues of mutual interest. To ensure effective employee communications, management takes a positive lead.

In addition to day to day regular communication, Prime Bank arranges Regional Town Hall Conference, Managers’ Conference etc. to allow employees with the opportunity to interact with the Management and Board of Directors. This helps to build an improved management-employee relation.

Achievements of 2014 and Future Plan

The relentless pursuit of HR Division continues throughout the year. Furthermore, it aims to ensure excellence in all HR policies and practices in line with the mission and vision of the Bank. Followings are some of the mentionable activities done in the year 2014:

� Phase wise implementation of HR Plans and Programs

� Prepared a comprehensive MT development program and completed its implementation

� Developed several automation projects including Performance Appraisal System to enhance employee efficiency

� Initiated and developed Broad banding pay structure policy for employees to attract, motivate and retain performers

Prime Bank is moving forward with the transformational initiatives in order to grow up with the challenge of tapping opportunities to meet both organizational and employee needs. The transformational phase started with introducing HR as “Strategic Business Partner” which already generated value in people & process management. Prime Bank is working to ensure an employee centric work culture with automated HR services & delivery and with focused skill development for employees. In coming days HR will pursue solid contemporary thoughts and action plans to draw results in many fronts as the Change Agent for Employee & Business Development. Followings are some of the future priorities of HR Division:

� Improve the overall performance management process and ensure a performance based work culture

� Review, Update, Document & Rollout Job Description,Key Performance Indicator (KPI) for employees

� Review HR Policies & Procedures and communicate to employees

� Talent Management Program

� Skill Gap Assessment and develop Performance Improvement Plan (PIP) for the employees

� Work on Employer Branding & Employee Relations Initiatives

� Under development phase: TA/DA policy, employee Code of Ethics and Anti-Harassment Policy, MAT Policy, Review of Leave Policy, Service Rule Book Update etc.

Human Resources Accounting

To understand and draw an inference on how well the Human Resources are yielding on the investment made, Prime Bank tracks the profit and related HR costs. In this process, the costs of recruitment, training, compensation other direct cost related to employees are measured to estimate the overall investment. The costs are then compared with several parameters. This analysis helps the Bank to have an outlook and make prudent decisions on future HR investment. Valuing the human resources and measuring the direct impact of the cost spent for employees is difficult as there is no specific or widely adopted method. Human Resources accounting is the process of valuing human resources as assets. Presently, this is not accounted in the conventional accounting practices. The period of existence of a set of human resources in an organization cannot be predicted; hence treating and valuing them as assets in strict sense is not plausible. However, Followings are some of the parameters which are tracked year on year.

(Tk. in Million)


Salary cost per emp. 1.15 1.08

Operating cost per emp. 2.01 1.99

Operating income per emp. 4.15 4.75

Profit before provision per emp.

2.15 2.76

Profit before tax per emp. 1.14 1.27

Salary cost as percentage of operating cost

57.19 54.55

Salary cost as percentage of operating income

27.62 22.90

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MARkETInGThe banking sector is becoming increasingly competitive around the world. Now banks are striving hard to grab customers’ share of mind. Optimum brand visibility is very essential to be on top of the minds of potential customers. Developing long-term relationships with the key customers is an effective way for banks to be differentiated from its competitors. Consequently, marketing efforts by banks are more focused and market driven now. Some of the marketing initiatives of Prime Bank in 2014 are highlighted below:

Golf Tournament: Prime Bank has been sponsoring Golf Tournament at Kurmitola Golf Club (KGC) since 2001 and it has become an annual event in the Golfing Calendar of KGC. The members of the Club are mostly dignitaries, high officials, diplomats and business tycoons of the country. Therefore, participating in the tournament allows the bank an opportunity to promote its brand along with various products targeted to the leading group of the society such as Platinum Card, Premium Banking etc.

Celebration of Bengali New Year: Prime Bank family celebrated Bengali New Year through a social gathering among the employees, management and the honorable Board of Directors of the Bank. The honorable Board of Directors interacts with the Management and employees of the Bank in this cultural event. This is how the corporate culture of the Bank helps to inspire the employees.

My First Account Campaign and School Banking Conference: Prime Bank believes children should be nurtured and inspired to achieve their aims as they are the eventual representatives of the nation. Prime Bank encourages the children to carry out the saving tendency from childhood by introducing a school banking account ‘My First Account’. The rationale for launching the school banking account is to convert My First Account holders to loyal valued clients in the future. A school banking campaign was launched to promote My First Account at 100 Schools in Dhaka and it was turned to a great success as well. Moreover, the bank participated in school banking conference organized by Bangladesh Bank and won the first prize for stall design at Sylhet on May 03, 2014.

Children’s Art Competition: Prime Bank organized a Children Art Competition among the employees’ children of the Bank. Children are the creators of their own dreams and they paint those in colorful canvases. The Bank inspired the children to express their imaginations

Tee Off in Golf Tournament on February 22, 2014

Prime Bank Family Celebrated the Bengali New Year on April 14, 2014

My First AccountCampaign on May 03, 2014

Prime Bank Stall Design in School Banking Conference

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on ‘my first savings’ and ‘my dream country’ in the art competition. Prime Bank believes children should be encouraged to achieve their ambitions as they are the prospective spokesperson of the nation. This is why the Bank has prepared the calendar of 2014 with the colorful arts of the children to motivate them to move forward with their talents.

JCB Card Launching Ceremony: Prime Bank introduces JCB International Cards, the 1st Japanese global payment brand in Bangladesh. JCB International Cards were launched through a spectacular event at the Radisson Blu Water Garden Hotel in Dhaka. The influential community of the society was present to grace the gala event. Being the pioneer, Prime Bank represented Bangladesh to Japanese through an amazing cultural program.

Retail Asset Tournament-2014: Prime Bank Limited launched a sales campaign titled ‘Retail Asset Tournament 2014’ for its employees across the country. The campaign was kicked off on the eve of World Cup Football Tournament-2014 to achieve yearly retail asset target. The full process of contest of the campaign was

done following the rules of the football tournament. The retail sales team scored in the tournament by selling retail asset products and thus the seller with the highest score became the champion. The champion sales team was awarded by Dhaka- Katmandu-Dhaka air tickets.

Hajj Deposit Campaign: Prime Bank initiated Hajj Deposit Campaign installing a stall at 7th Hajj and Umrah Fair in 2014. Now hajj pilgrims are able to deposit their hajj fee in all the branches of Prime Bank easily. Prime Bank distributed 6,000pcs mobile SIM cards to hajj pilgrims for easy communication from Saudi Arabia to Bangladesh.

Launching of Monarch: Prime Bank launched ‘Monarch’, a premium banking service in Bangladesh, through an event at one of the Premium Lounges of Monarch. The Bank introduced Monarch with a new vision to manage the wealth of the premium clients and enrich their lifestyle with a complete range of financial services tailored to their needs. The launching campaign was comprised of diversified marketing activities. Moreover, all the official stationeries were re-branded in line with the theme of Monarch. A separate website ‘www.monarch.com.bd’ is maintained for the premium clients with full of information on exclusive privileges and high value services offered to the Monarch.

Prime Bank Organized Art Competition among Employees’ Kids on May 17, 2014

The Cultural Program in JCB Card Launching Ceremonyon June 04, 2014

Press Advertisement on ‘Retail Asset Tournament 2014’ Campaign

Mobile SIM Cards Distribution to Hajj Pilgrims

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Prime Bank Eye Camp: Being one of the major contributors in economic development of Bangladesh, Prime Bank has its social development responsibilities as well. With that vision, Prime Bank established Prime Bank Eye Hospital in 2012 which is running successfully under the supervision of Prime Bank Foundation. Since avoidable blindness is one of the major health care problems in Bangladesh, Prime Bank organized 24 eye camps in the remote areas all over Bangladesh in 2014 to give free eye treatment to the under privileged people of the society. Prime Bank also utilized this opportunity to promote the biometric smart card ‘Prime Cash’ to the rural and marginal communities of the country which eventually help the Bank to achieve its goal of inclusion banking. Moreover the products of SME Banking and Retail Banking were also promoted in the eye camps.

PERfORMAnCE Of RESEARCh AnD DEVELOPMEnT (R&D) DIVISIOnA keen understanding of environmental analysis and the industry’s dynamics play a crucial role in formulating strategies for growth and operation. Data, information and insight gathered through systematic process help the business to take the right decision. Besides, opportunities

of business avenues can also be explored and existing business can be also given new dimension to increase the business volume and sustainable growth. Most importantly, what the customer/stakeholders think about the organization and its peer organization, determine competitive advantage. To gather the insight, there is no alternative to qualitative and quantitative studies.

R&D division of the Bank undertakes research studies to provide reliable, accurate, valid information on economy, market, customer and contemporary issues. Considering the business trend, present scenario and forecast- R&D designs and re-engineers products and services, gathers consumer insight, proposes prospective location for banking business,analyses sectors, disseminates knowledge through economic publication and undertakes ad-hoc research.

Major activities performed by the R&D Division in 2014 are highlighted below:

Market Research

Product Development � New Product Development: R&D Division

designed some new asset products for SME Division as per refinance program of Bangladesh Bank. ‘SrijonRin’ was introduced for Publishers of Knowledge based books &

Prime Bank Launched ‘Monarch’ on October 27, 2014

Free Eye Treatment in Prime Bank Eye Camp at Kulaura,Sylhet on December 15, 2014

EconomyMarket

ConsumerBanking

R&D’s Priority Areas

R & D Division’s Focus

Market Research

OperationsResearch

Business and Economic

Policy Research

Sector Research

New Product Development

Product Reengineering

Consumer Insight

Branch Expansion

Program (BEP)ATM

Expansion Program

Monthly Newsletter”In-Focus”

Weekly e-Newsletter

Miscellaneous Functions

CommodityBusiness Priority Sectors

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creative writings and Green Financing Product Development with GBC.

� Product Re-engineering: The division also modified features of existing deposit products and services as per market demand to attain & retain market share. Products are such as - Double Benefit Deposit Scheme (DBDS), Monthly Benefit Deposit Scheme (MBDS), Contributory Savings Scheme (CSS), Account 150% , Prime Millionaire Scheme, LaksmaPuron Deposit Scheme, Brighter Tomorrow Deposit Scheme and Nobagoto deposit scheme (Conventional and Islamic) responded to changes in the macro economy. Revision of interest rate, tenure and all the applicable installment sizes for the mentioned scheme products had been done following suggestions of the Bank’s ALCO.

Research and Development (R & D) Division

� To improve level of customer satisfaction through differentiated services or to reduce their dissatisfaction is a continuous process of an organization. In this regard, “Ensuring Service Quality Project” was approved by the Board and Management of Prime Bank Limited (PBL) to ensure and improve customer satisfaction. Besides, the Bank has also approved to conduct comprehensive ‘Customer Satisfaction Survey (CSS)’ at our branch level covering all divisions of Bangladesh in 2014. This is also to comply with Bangladesh Bank’s Financial Sustainability Report, to improve banker-customer relationship as part of the Financial Integrity and Customer Services Department (FICSD) and to ensure reporting to the Bangladesh Bank’s Off-site Supervision Statement CAMELS.

� Exploratory study on Prime Campus

� Provide strategic input into different marketing projects such as documentary preparation and branding

� Conducted studies on physically challenged people in order to design new loan products under Cottage, Micro and Small Enterprises segment for availing refinance scheme from Bangladesh Bank

� Conducted studies on feature analysis on 11 Deposit products of the Bank & its peer banks and submitted to the ALCO for understanding market trend

� Conducted studies on customer perception, business prospects & performance of gold –backed loan product based on primary as well as secondary data.

Sector Research on Local Industry

R&D Division provides up-to-date information on the industry/sector as per instruction of the Board of Directors of the Bank. In addition, it is also a requirement of CRM of the Bank and different business unit of the Bank. In this regard, R&D Division has already prepared and submitted a number of reports to Corporate Banking Division, Structured Finance Department, and CRM as part of Board and EC requirement:

1. Rice Bran Oil Industry in Bangladesh

2. Steel Structure and Pre-Engineered Buildings (PEB) in Bangladesh

3. Plastic Industry of Bangladesh

4. Commodity Market-Watch Report on six commodities-Rice, Wheat, Sugar, Cotton, Edible Oil and Maize

5. Study on Inland Water Transport Sector

6. These reports have provided market information focusing on size of market, total supply, production capacity/utilization, top market players, future outlook/prospect of the respective industry based on secondary as well as available primary data.

Operations Research

Feasibility Studies for Branch Expansion Program (BEP) & ATM: The Business Feasibility Study is one of the crucial and frequent studies undertaken by R&D for serving the bank in setting up any Branch

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or ATM Booth at recommended and prospective areas throughout Bangladesh. To explore potential geographic locations where the bank can extend its services to contribute to the socio-economic development of the area, Feasibility Studies have been conducted on around thirty (30) locations all over the country for new branch and ATM expansion and business growth. To carry out the study, data on geographical, demographic, business, financial and economic data are analysed in a holistic manner. The feasible areas are proposed in such strategic places which are also convenient for residential as well as business customers.

Business and Economic Policy Research

� After launching the much acclaimed publication ‘In-Focus’ with new concept, layout and design along with its online version in an interactive manner,the In-Focus has carried its journey by delving on contemporary issues that are critical to global and domestic economy as well as financial markets and institutions.

� Besides, a weekly e-newsletter is being disseminated to provide financial insights to valued readers on a weekly basis.

Miscellaneous Functions

� Study on the Risk Management Framework of other Banks to support RMD for incorporation in their proposed framework.

� Assessment of Perception regarding Vision and Mission of the Bank

� Data collected from Bureau of Manpower and Training Center and Bangladesh Bank for preparation of Report on Division Wise Remittance Inflow to Bangladesh for strategic move of the Bank

� Analysis of Green banking practices in the Industry

� Guidelines for Green Uddogta Award

� Supplying Socio-economic data to Management as and when required

R&D will come up with innovative and insightful research to support the Bank’s vision in being the best commercial bank.

PROjECT MAnAGEMEnT OffICEIt was a visionary decision of management to establish the Project Management Office (PMO) in the Bank. PMO has been successfully aligned with the strategic goal of PBL through its involvement in organizational projects for achieving strategic objectives. In fact, PMO is working as a strategic entity of PBL management. Although it has not been a long time PMO has started working in its full capacity, it has already accomplished several projects effectively.

“Developing IT & IS Policies& Procedures” and “Business SOP Reengineering” are the two of its major finished projects in 2014. These projects are related to PBL strategic objectives of Organization Development & Service Excellence with huge functional importance. These IT & IS policy and procedures has been developed based on international leading practices including CobiT, ITIL, BS15000 and ISO 27001 standards. In addition, these IT & IS policies and procedures positively affects PBL’s IT governance and management system and helps increase information security.“Business SOP re-engineering” aims at continuing development and deployment of controlled operation systems for enhancing operational excellence and reducing business risk.

PMO’s main focus is on

� Establishing a formal project management methodology based on a platform of standardized practices. It then implements key performance indicators to measure progress and outcomes to achieve project goals.

� Measuring and ensuring not only project schedule and budget, but also tracking team activities whether they are meeting project objectives.

� Creating metrics and tracking all project data that will give executives a holistic view of the projects. This transparency will help the senior management connect project success to organizational success.

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InfORMATIOn SECuRITy DEPARTMEnTInformation security Department plays an important role in protecting the assets of an organization. As no single formula can guarantee complete security, there is a need for a set of benchmarks or standards to help ensure an adequate level of security is attained, resources are used efficiently, and the best security practices are adopted.

Since we are living in the era of Information technology and like other organizations, banks in our country are emerging with new ideas and technologies to provide a user friendly and flexible banking service to customers. With emerged information technologies, new and unknown treat and risk are also moving into the industry. At this point, the Information Security Department approaches with a notion of protecting information and

information systems from unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording or destruction.

PBL is one of the pioneer bank in Bangladesh to realize the need of information security in today’s technology dependent banking service. Understanding the importance of Information Security, PBL formed an Information Security Department on December, 2013 with a vision of providing information security services and expert security guidance to all employees of Prime Bank Limited (PBL) to ensure confidentiality, integrity, and availability of the information assets and resources according to PBL’s Information Security Policy and Bangladesh Bank’s regulations and guidelines.

To fulfill the vision, ISD (Information Security Department) is following globally accepted management system standard ‘ISO 27001’ to manage Information Security. The department is also working toward ensuring the security of Payment cards (Debit/ Credit cards) by following Payment Card Industry Data Security Standard (PCI DSS).PBL has also adopted globally accepted IT/IS Risk Management framework to manage the information security risk.

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Report on Risk Management by Chief Risk Officer

Identifying, measuring, monitoring and controlling various type of risks are vital for ensuring the health of a Bank as well as the whole financial systems. In addition to the traditional risks faced by the Banks in credit and market risks, various operation risks are created due to following reasons: � Increasing use of automated technology � Growing importance of IT integration and shared

services across financial institutions and entities � Necessity of reducing earnings volatility and

achieving cost efficiencies � Shifting from vanilla type products to technology

based products which are creating more complexity in product and product development

� Increasing customer needs � Evolving outsourcing arrangements and increasing

dependency � Increasing focus by regulators on legal, fraud, and

compliance issues

This has necessitated development of enterprise wise risk management framework for the Banks. Prime Bank Limited (PBL) is increasingly focusing on development of appropriate risk management framework for managing risks of the Bank. Risk Management Division has been set up which shall monitor and report various type of risks and develop appropriate risk culture within the Bank. The Division has been working on identifying the gaps in the risk management procedure of the Bank, placing those issues to Risk Management Unit comprising of members from all key business / risk areas and following up for rectification. Major activities of RMD include preparing Risk Management Paper, performing stress testing, vetting of different Product Program Guidelines, process manuals, developing various risk models and acting as an operation layer for Internal Capital Adequacy Assessment.

Credit Risk Management

Increased focus has been given in managing Credit Risk Management. Total Credit Administration Process has been centralized which have mitigated various risks arising from human error in branch banking. Similarly, 98% of Branches came under the umbrella of centralized Trade Service process during the year 2014. To reduce

the residual risks the security related documents were revalidated by legal firms and also cross examined by the independent audit firms. Corrective measures have been taken as per the audit report issued. Periodical Stock verification and insurance coverage has been made mandatory before sanctioning or renewing any credit proposals. Since the Bank has significant exposure in RMG sector, a separate Merchandiser Team has been formed with people having adequate experience in RMG operation. This has enhanced the Bank’s capability to identify risks and mitigate them on time. In order to shift to risk adjusted return on capital (RAROC), borrower’s rating is considered while considering any price adjustment. This is encouraging the borrowers to come under rating procedure of rating agencies.

Operational Risk Management

Internal Control and Compliance Division is responsible for monitoring the transactions of the branches as per guidelines to develop a compliance culture. The division has adequate manpower to monitor the operational risks in banking transactions. They are being monitored based on both offsite and onsite supervision.

Information Technology Risk

PBL has an IT audit team, which has been formed as per the Central Bank’s guideline. The team conducts IT Audit in each branch on a periodic basis and provides suggestions to higher management. Moreover, independent IT Security Department has been formed to assess the IT related risks faced by the Bank and suggest appropriate measures to mitigate risk.

Market Risk

Market risk is actively monitored by the Treasury Division of the Bank. As per stress testing, the Bank is unlikely to face any major risks in liquidity, interest rates and foreign exchange. A system based Value at Risk (VaR) Model is being used by the Bank to assess the risk related to the Foreign Exchange position. Treasury Mid office monitors risk limits including position limits and stop loss limits for the trading book and reviews periodically. Interest rate risk is monitored through the use of re-pricing gap analysis and duration analysis.

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Environmental & Social Risk

PBL has incorporated ERM policy in the CRM policy manual and made Environmental Risk Rating (EnvRR) and Environmental Due Diligence (EDD) mandatory in the credit proposals. PBL have already made some Direct Green Finance in HHK projects, ETP installation projects, Bio-Gas plants etc. The Bank has already installed solar panels at 21 branches as well as 12 ATM booths and SME unit offices as part of its commitment to the usage of renewable energy resources. Training & Development Center of the Bank arranged 12 Green Banking training Programs for 403 employees during 2014 to familiarize with the Green Banking aspects. The Bank arranged a customer awareness program in Jessore on March 19, 2014 to create awareness among 120 participants to protect the environment from different pollution and hazards. Yet our effort will continue for making our business sustainable which will ultimately improve the quality of “life” in the long run.

Pillar 1 Risk Management

PBL has been maintaining capital above the minimum capital requirement as against Credit, Market and Operational risk. The Bank has proper credit risk mitigation process in place. Moreover, PBL is consistently trying to rate its corporate borrowers not only to have expert opinion on the borrowers but also to have capital relief. PBL has 66.32 percent of total eligible corporate borrowers of the Bank rated through External Credit Assessment Institutions (ECAIs). Through borrower rating, PBL achieved capital relief of 6971.10 million during 2014 compared to capital relief of 5796.40 million during 2013. Proper organizational structure and procedures are also in place to ensure mitigation of operational risk and market risk. PBL was well ahead of minimum capital requirement of 10 percent in all the four quarters of 2014. Capital Adequacy Ratio of the Bank was 12.26% at the end of March, 11.57% at the end of June, 11.72% at the end of September and 12.64% at the end of the December.

Pillar 2 Risk Management

The key principle of the Supervisory Review Process (SRP), the second Pillar of Basel-II is that “Banks have a process for assessing overall capital adequacy in relation

to their risk profile and a strategy for maintaining their capital at an adequate level”. SRP covers additional risks like Residual Risk, Concentration Risk, Liquidity Risk, Reputation Risk, Strategic Risk, Settlement Risk etc. PBL assessed its additional capital requirement under Pillar 2 and submitted the statements on Internal Capital Adequacy Assessment Process (ICAAP) to Bangladesh Bank. PBL has been conducting stress testing on its financials on quarterly basis and reporting the outcomes to Bangladesh Bank, as a part of Pillar 2 risk management.

Pillar 3: Market Discipline

PBL always delivers the appropriate disclosures not only to meet the regulatory requirements but also as per international best practices. Disclosures on the position of PBL’s risk profile, capital adequacy, and risk management system has been included in this Annual Report also. As per the Bank Companies Act 1991 (Amended up to 2013), and as guided by the Bangladesh Bank BRPD Circular no. 11 dated October 27, 2013 the Risk Management Committee (RMC) of the Board has been formed to look after the risk management issues of the Bank.

Revised Regulatory Capital Framework for banks in line with Basel III

Bangladesh Bank vide BRPD Circular No – 18 dated December 21, 2014 issued “Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III)” with effect from January 01, 2015. The new guidelines aimed to strengthen the quality and quantity of the regulatory capital base and enhance the risk coverage of the capital framework. PBL is well poised for implementing Basel III phase by phase during the period 2015-2019. It is mentionable that, PBL is maintaining much higher Common Equity Tier-1 (CET-1) capital ratio than the prescribed minimum ratio of 4.5% by Bangladesh Bank. Last of all but not the least, PBL always had the reputation of being one step ahead and committed to continue the same in the coming days.

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Risk Management Report

Risk is the probability that an investment’s actual return will be different than expected which includes the possibility of losing partial or full of the original investment. As such the enterprises through coordinated steps manage the risk to keep the loss at a tolerable limit. The steps also include control and monitoring.

The objective of risk management is to identify and analyze risks and manage their consequences. Basel II Accord, the standards of Risk Management as guided by the Bank for International Settlements (BIS) and particularly Basel Committee on Banking Supervision (BCBS), has been applied by bank regulators across the world. Bangladesh Bank also issued guidelines which forms the basis of risk management of the banks in Bangladesh. The guidelines require that the banks adopt enhanced policies and procedures of risk management. PBL’s risk management strategy is based on a clear understanding of various risks, disciplined risk assessment, measurement procedures and continuous monitoring. PBL continues to focus on improving its risk management systems not only to ensure compliance with regulatory requirements but also to ensure better risk-adjusted return and optimal capital utilization keeping in mind of the business objectives. For sound risk management, PBL manages risk in strategic layer, managerial layer, and operational layer.

The risk management process of the bank operates under following structure: � The Board approves overall risk management

policies of the Bank in line with the regulatory guidelines;

� Executive Committee (EC) of the Board is responsible for all sort of decision making as set by the Board. All decision taken by EC is ratified by the Board afterward;

� Audit Committee (AC) of the Board reviews the internal audit reports of the bank and operational risk and assesses whether internal control of the Bank is proper or not;

� Risk Management Committee (RMC) of the Board oversees the overall Risk Management of the Bank. The committee also reviews risk management policies & guidelines, loan approval limit and submit to the Board for necessary revision each year;

� For managing risk, PBL established Credit Risk

Management Division (CRM), Credit Administration Division (CAD), Recovery Division, Legal Division, Internal Control and Compliance Division (ICCD), Internal Audit and Inspection Division and Risk Management Division (RMD). For managing money laundering risk, Branch Anti Money Laundering Compliance Officer (BAMLCO) for every Branch under dedicated Chief Anti Money Laundering Compliance Officer (CAMLCO) has been placed;

� PBL also formed various risk management committees like Head Office Credit Review Committee (HOCRC), Asset Liability Committee (ALCO), Management Committee (MANCOM), Central Compliance Committee, Management Reporting System Committee (MRS) and Risk Management Unit (RMU) for managing and monitoring of risk throughout the organization

Risk Management Committee of the Board:To oversee the risk management of the Bank, the Board has formed a Risk Management Committee as per the guidelines of Bangladesh Bank. The Committee supervises various risks arise from credit, foreign exchange, internal control and compliance, money laundering, information technology, operation, interest rate, liquidity etc. Presently five (05) members of the Board of Directors are representing in the Risk Management Committee. During 2014 Four (04) RMC meeting were held and twenty three (23) memos were placed before the RMC. The agendas discussed in the RMC meeting are as below:

Sl Name of the MemoNumber

of Memos

1 Risk Management Paper of the Bank 04

2 Stress Testing Report of the Bank 04

3 Standard of Risk Governance 01

4 Status of Borrower Rating of the Bank 02

5Revised Green Banking Policy of the Bank

01

6Regulatory & Internal Circulars related to ABP/IDBP payment

01

7Submission of statements on ICAAP under SRP for the year 2013 for SRP-SREP dialogue

01

141

8Summary of SREP Inspection on Statements of ICAAP for the year 2013

01

9Risk Management Framework of the Bank

01

10Risk Based Pricing for corporate borrowers

01

11Comprehensive Risk Management Rating by Bangladesh Bank

01

12E-learning System for Information Security Risk related awareness

01

13Compliance with Payment Card Industry Data Security Standard (PCIDSS)

01

14Information Security Departmental Activities

01

15 Various Legal Risk related issues 02

Risk Management ProcessRisk management is to balance the trade-off between risk and return and ensure optimum risk-adjusted return on capital. The risk management function of PBL strives to proactively anticipate vulnerabilities at the transaction as well as at the portfolio level, through quantitative or qualitative examination of the embedded risks. Risk is managed through a framework of policies and principles approved by the Board of Directors which ensures that the Bank operates within its risk appetite. The policies and procedures established for this purpose are continuously benchmarked with international best practices. Further, the Internal Capital Adequacy Assessment Process (ICAAP) of the Bank assesses all the significant risks other than the risks under Pillar-1 of Basel II and calculates the additional capital requirement.

Identification: A Bank’s risks have to be identified before they can be measured and managed. Typically PBL distinguishes Credit risk, Market risk, Liquidity risk, Operational risk, Islamic banking risk and Information and Communication Technology (ICT) risk. Besides these, concentration risk, strategic risk, residual risk,

reputation risk etc are covered under Internal Capital Adequacy Assessment Process (ICAAP).

Measurement:The consistent assessment of the above mentioned types of risks is an essential prerequisite for successful risk management. For example, in order to assess credit risk associated with any corporate financing proposal, PBL carries out various risk assessment like financial spreadsheet analysis, credit risk grading and other risk like concentration related to the borrower and the relevant industry.

Aggregation: PBL closely monitors aggregate risk in order to minimize its exposure to adverse financial developments- such as a credit crunch or even insolvency- arising from a counterparty or client. While aggregating risks, it is important to take into account correlation effects which cause a Bank’s overall risk differing from the sum of the individual risks. This applies to risks both within a risk category as well as across different risk categories.

Planning & Controlling: PBL takes into consideration the business strategy while planning and setting control for mitigating risk. As risk management is the trade-off between risk and return PBL always tries to manage the risk without hampering the business growth and stakeholders return. Internal Capital Adequacy Assessment Process (ICAAP) is one of the biggest part of planning and controlling of risk.

Monitoring: Risk monitoring is the most challenging task in the whole risk management cycle as monitoring helps the Bank to identify earlier any probable risk that may take in place in many cases. Risk monitoring also helps to track whether the risks actually incurred lie within the prescribed limits, thus ensuring an institution’s capacity to bear those risks.

The above process of risk management is being undertaken by PBL which implies that if any risk(s) remains un-attended, that will be addressed though the repetition of the process which started with identification of those factors and the process continues.

Credit Risk Management

Management of Credit Risk in PBL While financial institutions have faced difficulties over the years for a multitude of reasons, the major cause of serious banking problems continues to be directly related to lax credit standards for borrowers and counterparties, poor portfolio risk management, or a lack of attention to changes in economic or other circumstances that can lead to a deterioration in the credit standing of a

Identification

MeasurementMonitoring

AggregationPlanning & Controlling

142


Bank’s counterparties. Credit risk is most simply defined as the potential that a Bank’s borrower or counterparty will fail to meet its obligations in accordance with agreed terms. The goal of credit risk management is to maximize a Bank’s risk adjusted rate of return by maintaining credit risk exposure within acceptable parameters. The effective management of credit risk is a critical component of a comprehensive approach to risk management and essential to the long-term success of any banking organization. That is why a risk based asset review framework has also been put in place wherein the frequency of asset review would be higher for high exposure cases and/or poor credit rating.

The sound practices set out in this document specifically address the following areas:

� Establishing an appropriate credit risk environment;

� Operating under a sound credit granting process;

� Maintaining an appropriate credit administration measurement and monitoring process;

� Ensuring adequate controls over credit risk

The following sets of principles are used for the sustainable risk management culture:

Balancing Risk and Return: Risk is taken considering the interest of Bank’s stakeholders, in line with Bank’s strategy and within its risk appetite.

Responsibility: All employees ensure that risk-taking is disciplined and focused.

Accountability: Risk is taken only by delegated authorities and where there is appropriate infrastructure and resources. PBL maintains a clear and transparent process for all risk-taking decisions.

Anticipation: PBL seeks to anticipate future risks and ensures awareness of all known risks.

Competitive advantage: The bank seeks to achieve competitive advantage through efficient and effective risk management and control. The credit risk management policy of PBL operates under the following broad principles:

A. Establishing an appropriate Credit Risk envi-ronment

The Board of Directors is responsible for approving and reviewing the credit risk strategies and policies of the bank periodically. The strategy reflects Bank’s tolerance for risk and the level of profitability the bank expects to achieve for incurring various credit loss.

Senior management is responsible for implementing the credit risk strategy approved by the Board and for developing standard policies and procedures for identifying, measuring, monitoring and controlling any type of risk associated with the strategy. Such policies and procedures address credit risk of the Bank’s activities and at both the individual credit and portfolio level.

PBL ensures that the risks inherent in products and activities which are apparently new to the bank are subject to adequate procedures and controls before being introduced or undertaken, and approved in advance by the Board of Directors or its appropriate committee. In order to streamline risk control features in a more effective manner, PBL has put in place Standard Operating Procedure (SOP) in line with internationally accepted best practices.

B. Operating under a sound credit granting process

PBL follows sound, well defined credit-granting criteria. These criteria include a thorough assessment of the borrower or the counterparty, as well as the purpose and structure of the credit, and its source of repayment.

� Credit facilities are allowed in a manner so that asset growth can be maintained ensuring optimum asset quality and without compromising the Bank’s standard of excellence;

� PBL carefully avoids name lending. Credit facility is being allowed absolutely on business consideration with absolute due diligence;

� Risks inherent in a credit proposal are being identified and appropriate mitigating steps are taken accordingly;

� Collateral offered against a credit facility is properly valued and verified by the concerned Relationship Officer or Relationship Manager periodically. In addition, the same collateral is valued and verified by an enlisted surveyor of the bank which is now applicable for all customers irrespective of any amount;

� Risk grading of the accounts is being done as per the Bangladesh Bank’s guidelines. Any credit approval/ sanction are subject to the banking regulations in force or imposed by the regulatory body from time to time and subject to changes of the Bank’s policy. Data collection check list and limit utilization format are prepared for regular assessment. Internal Audit & Inspection Division independently reviews the risk assessment at the time of conducting internal audit.

143

The bank has established overall credit limit at every level for groups of legally connected borrowers including individual borrowers and counterparties that aggregate in comparable and meaningful manner for different types of exposures, both in the banking and trading book and on and off balance sheet.

PBL always complies with the prevailing banking regulations regarding Single Borrower Exposure Limit set by the Bangladesh Bank from time to time. Credit facility to a single customer (Individual, Enterprise, Company, Corporate, Organization, and Group) shall be treated as Large Loan if total limit amount exceeds 10 percent of the total capital of the Bank. As per BRPD Master Circular no. 05 dated April 09, 2005 on Single Borrower Exposure Limit, PBL has always maintained the percentage ceiling of Large Loan Portfolio exposure.

The bank has a clearly-established process in place for approving new credits as well as the extension of existing credits. A thorough credit risk assessment is done before granting loans. The Credit Risk Assessment includes borrower risk analysis, industry risk analysis, historical financial analysis, projected financial performance, the conduct of the account, and security against the proposed loan.

The assessment originates from relationship manager/ account officer and is reviewed by Head Office Credit Review Committee. The Credit analyst or executive duly delegated by proper authority approves the credit proposals. Executive Committee of the Board approves the proposals beyond the delegated authority limit of the Management. The Board of Directors reviews the proposals approved by the Executive Committee.

All credit extensions are made on an arm’s length basis. In particular, credits to related companies and individuals monitored with particular care and other appropriate steps taken to control or mitigate the risks of connected lending. Credit granting process at PBL operates within the defined risk limit so that the bank can achieve growth target and superior return on capital.

C. Maintaining an appropriate credit administration, measurement and monitoring process

A system has been put in place by the bank for ongoing administration of various credit risk-bearing portfolios. Dedicated independent risk management units are developed for these purposes. Dedicated committees at management level have been set up to monitor risk. PBL segregated the total credit process into Relationship Management/Marketing, Credit Approval/Risk Management, Credit Administration to improve the knowledge levels and expertise in each department and to impose controls over the disbursement of authorized loan facilities and obtain an objective and independent judgment of credit proposals. Credit Administration Division completes security documentation after getting approval from Credit Risk Management Division and ensures adherence to approved terms and other requirements before limit creation and disbursement. To minimize credit losses, monitoring procedures and systems is in place that provides an early indication of the deteriorating financial health of a borrower.

An Early Alert Account is one that has risks or potential weaknesses of a material nature requiring monitoring, supervision, or close attention of the management. If such weaknesses are left uncorrected, they may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date with a likelihood of being downgraded. Early identification, prompt reporting and proactive management of Early Alert Accounts are prime responsibilities of all Relationship Managers / Officers and the whole process is a continuous one. An Early Alert Report is completed by the Relationship Manager and sent to the approving authority in Credit Risk Management Division for any account that is showing signs of deterioration. The Risk Grade is then changed and referred to Credit Risk Management Division for assistance in recovery. The bank has also put a system in place for monitoring the condition of individual credits including determining the adequacy of provisions and reserves. For NPL Provisioning and Write-off, the guidelines established

Sales Risk Analysis Processing

Acquisition/Credit-specificCustomer

Collect and Review data Credit Review Collateral and

Risk assessment Approval Documentation Implementation

Credit approval process in PBL sub-divided into a large number of individual process steps

144


by the Bangladesh Bank for Credit Information Bureau (CIB) reporting, provisioning and write-off of bad and doubtful debts and suspension of interest are followed in all cases. Provision is maintained for any shortfall in the Forced Sale Value (FSV) to cover total loan outstanding once an account is classified.

PBL has information systems and analytical techniques that enable the management to measure the credit risk inherent in all on- and off-balance sheet activities. PBL has taken initiative to make management information system more robust and sophisticated for monitoring the asset quality of the Bank. All credit approvals are given complying with the requirements of Bank’s Memorandum and Articles of Association, the Bank Company Act, 2013 as amended from time to time, the Bangladesh Bank’s instruction circulars, guidelines and other applicable laws, rules and regulations, Bank’s Credit Risk Management Policy, Credit Operational Manual and all relevant circulars in force. Any deviations from the internal policy of the bank are well documented. The portfolio is well diversified with respect to sector and industry. Concentration of credit is carefully avoided to minimize risk.

PBL takes into consideration of potential future changes in economic conditions while assessing individual credits and credit portfolios. An important element of sound credit risk management involves discussing what could potentially go wrong with individual credits and within the various credit portfolios, and factoring this information into the analysis of the adequacy of capital and provisions.

D. Ensuring adequate controls over credit risk

PBL has established a system of independent, ongoing credit review and the results of such reviews are communicated directly to the Board of Directors and senior management. PBL ensures that the credit-granting function is being properly managed and that credit exposures are within levels, consistent with prudential standards and internal limits. The bank has established and enforced internal controls and other practices to ensure that exceptions to policies, procedures and limits are reported in a timely manner to the appropriate level of management.

Prime Bank Limited has taken initiative to introduce Risk Based Pricing Model and the model has already been developed and placed before Risk Management Committee of the Board. After getting approval from the Board of Directors, the Risk Based Pricing Model will be in place for pricing corporate loans. Benefits of

Risk Based Pricing are: � Enhance shareholders value by ensuring that

credit risk associated with the transaction is appropriately measured and priced

� Enable the Bank to know well ahead of time, what kind of price will satisfy its risk/return preferences

� Enhance the achievement of credit portfolio goals and objectives.

PBL also has a system in place for managing problem credits and various other workout situations. All NPLs are assigned to Account Manager(s) within the Recovery Division, who is responsible for coordinating and administering the action plan / recovery of the account and serve as the primary customer contact after the account is downgraded to substandard.

Environmental Risk Management

Environmental risk may be defined as an actual or potential threat of adverse effects on living organisms and environment by effluents, emissions, wastes, resource depletion, etc., arising out of an organization’s activities. These affects increase risks as they bring an element of uncertainty or possibility of loss in the context of a financing transaction.

Environmental Risk Management is the process of identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable environmental risks. An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy (or combination of strategies) in proper management of future events having impact on the environment.

Environmental risk is one of the several risks that the Bank must take into account while assessing financing opportunities as it affects credit risk to a great extent. As environmental risk is a facilitating element of credit risk, the Bank has integrated Environmental Risk Management with Credit Risk Management in all aspects.

As instructed by the Bangladesh Bank, PBL has incorporated Environmental Risk Management guidelines into Credit Risk Management Policy. PBL use Environmental Risk Rating (EnvRR) for both financing for new, green field projects as well as those pertaining to existing facilities.

� If the EnvRR is high, then the proposal for financing will have to be approved by the Board or its Executive Committee.

� If the EnvRR is low or moderate, then the financing

145

decision can be undertaken on the basis of the usual credit risk management guidelines.

� If the EnvRR is unclear, then it is required for the Bank to collect more information from the borrower so as to gain an understanding of the inherent risks and arrive at a high/moderate/low decision. If a risk factor is not applicable, it may be excluded from the total number of questions used in calculating.

Wherever the EnvRR is “High”, the credit risk management function will ensure that additional conditions / covenants are included.

Liquidity Risk Management

Liquidity risk is the failure to meet obligations leading to an inability to support normal business activity and to meet liquidity regulatory requirements. Liquidity risk can arise due to market liquidity or funding liquidity. Market liquidity risk is the risk of the inability to sell assets due to lack of liquidity in the market. Funding liquidity risk is the risk of the inability to meet liabilities when they fall due or can only be met at abnormal high price.

To manage liquidity risk, PBL maintains diversified and stable funding base comprising of core retail, corporate and institutional deposits. The principle responsibility of the liquidity risk management of the bank rests with Treasury Division which maintains liquidity based on historical requirements, current liquidity position, anticipated future funding requirement, sources of fund, options for reducing funding needs, present and anticipated asset quality, present and future earning capacity, present and planned capital position. ALCO manages the liquidity risk by:

� Setting tolerance limit for cumulative cash flow mismatches,

� Setting limit on loan to deposit ratio and

� Setting limits on dependence on institutional deposits which are volatile in nature.

From the liquidity statement it can be seen that out of total deposit liabilities of Tk 204,837 million, contractual maturity of liability within 1 year is Tk 117,731 million. In the liquidity statement it is apparent that there is minimal negative gap till 1-3 months bucket, huge positive gap in over 3 months to 12 months bucket, and moderate positive gap in 1year to 5 year and over 5 years maturity bucket which conforms that pressure from liquidity is minimal. In reality, above 90 percent of fixed term deposits are renewed on maturity. As such, the negative gap actually converts into positive gap.

Market Risk Management

Market risk is defined as the risk of losses in on and off-balance sheet positions arising from adverse movements in market prices which may impact the Bank’s earnings and capital. The purpose of market risk management framework is to minimize the risk of loss and maximize profit in trading portfolio. The risk may pertain to interest rate related instruments (interest rate risk), equities (equity price risk) and foreign exchange rate risk (currency risk). Besides, the Bank is also exposed to liquidity or funding risk.

Market Risk management is guided by well laid policies, guidelines, processes and systems for the identification, measurement, monitoring and reporting of exposures against various risk limits. The Asset Liability Management Committee (ALCO) meets periodically and reviews the positions of trading groups, interest rate sensitivity, sets deposit and benchmark lending rates and determines the asset liability management strategy, as deemed fit, in light of the current and expected business environment.

MarketRisk

Interest RateRisk Equity Risk

ForeignExchange

Risk

CommodityRisk

Fixed Deposit

8,781.52

Othe

r Dep

osits

unde

rSc

hem

e, 4,6

40.55

Saving Deposit,

2,510.58

Short Notice Deposit(SND), 1,401.33

Sundry Deposit,1,242.42

Current Deposit,1,130.86 O

thers,790.01

Deposit Mix (Figures in Crore)

7.69

%7.85

%

8.17

%

8.41

%

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Cost of Deposit

146


Treasury Front office has developed MAT policy to manage stressed liquidity. Treasury mid office has been formed which is responsible to monitor measure and analyze the risks inherent in treasury operations of the Bank. Treasury back office before formation of Mid office used to monitor risk limits including position limits and stop loss limits for the trading book and reviews periodically. For managing and monitoring foreign exchange risk PBL has started calculation of Value at Risk (VaR). Interest rate risk is monitored through the use of re-pricing gap analysis and duration analysis. Interest rate risk is further monitored through the ALCO.

PBL uses various tools for measuring of liquidity risk like structural liquidity profile, stress testing etc. PBL maintains diversified sources to facilitate the bank to meet funding requirements.

Interest Rate Risk

Interest rate risk is the risk of losing profit by an interest-bearing asset, such as a loan or a treasury bond etc due to variability of interest rates. In general, as rates rise, the price of a fixed rate bond will fall, and vice versa.

PBL monitors interest rate risk through duration gap analysis, sensitivity analysis, and Daily Earning At Risk (DEAR) analysis. The short term impact of changes in interest rates is on the bank’s Net Interest Income (NII). In a longer term, changes in interest rates impact the cash flows on the assets, liabilities and off-balance sheet items, which raise the risk of losing the net worth arising out of all re-pricing mismatches and other interest rate sensitive position.

1.08

1.10

1.18

1.09

March, 2014 June, 2014 September, 2014 December, 2014

Duration Gap

Duration Gap

Maturity grouping of rate sensitive assets and liabilities of the Bank (see table on Interest Rate Risk Analysis) shows moderate negative gap in the first three quarters and positive gap in the last quarter. If interest rate increases by 1 percent, the Bank will enjoy a positive earning of Tk. 2.7 million during 1 year period and vice versa. The impact is very insignificant compared to total revenue of the Bank and also within the acceptable limit as stipulated by the Bangladesh Bank. The statement also shows that there will be 0.58% impact on quarterly net profit which is also within the stipulated limit of 10 percent.

Moreover interest rate risk is also monitored through DEAR or Daily Earnings at Risk. DEAR is defined as the estimated potential loss of a portfolio’s value over a one-day period as a result of adverse moves in market conditions, such as changes in interest rates, foreign exchange rates or market volatility.

Foreign Exchange Risk Management

It is the risk that the bank may suffer losses as a result of adverse exchange rate movements during a period in which it has an open position in an individual foreign currency. In addition, the bank is also exposed to interest rate risk and settlement risk on account of its foreign exchange business.

Foreign exchange risks are measured and monitored by Mid office under CRM Division. To evaluate the extent of foreign exchange risk, a Liquidity Gap Report is prepared for each currency. Gap or mismatch of maturities can arise due to a customer transaction resulting in a long or a short position for the bank. The Net Open position Limit (NOP) of the Bank is ± USD 51.20 million which is equivalent to ± BDT 3,991.01 million on overnight basis as fixed by Bangladesh Bank. The actual Net Open Position (NOP) of the Bank as on December 31, 2014 was Tk. 471.10 million which is equivalent to USD 6.04 million. The overall exposure does not exceed the stipulated limit.

Furthermore Foreign Exchange Risk is also measured and monitored through Value at Risk (VaR) under variance – covariance method. The Value-at-Risk is the maximum loss that the Bank is likely to face within a given time period with (usually) a 95% (high) & 99% (really high) probability.

Equity Risk Management

Equity risk is defined as losses due to changes in market price of equity held by the bank. To measure and identify the risk, mark to market valuations of the share investment portfolios are done. Mark to market valuation is done against a predetermined limit.

7,341.98

4,817.55 4,078.79 4,358.82


Value at Risk (VaR) (at 99% confidence level) Amount in USD

Value at Risk (VaR) (at 99% confidence level) amount in USD

147

Equity Risk of the Bank is also monitored through analyze of own investment on shares by subsidiaries, margin loan against investment in share by subsidiaries and loan statement against shares.

Operational Risk Management

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Operational risks vary in their components. Some are very high occurrence with low value risk and some are low occurrence with high value risks. Third consultative paper of Basel-II recommended following event based classification of operational risks: � Internal fraud;

� External fraud;

� Employment practices and workplace safety;

� Client, products and business practices;

� Damage to physical assets;

� Business disruption and system failure;

� Execution, delivery and process management.

In PBL, operational risks are identified and measured in the following manner: � Risks are identified with reference to the relevant

policy manuals, processes, procedures and practices;

� Accounts are evaluated as per Departmental Control Function Check List (DCFCL);

� Incident reporting and analysis of causes and actions taken on losses from both internal & external fraud and control lapses;

� Review of safety and control measures of premises

Risk control and measurement in PBL are as under:

� Manuals and Standard Operating Procedures are in place and implementation of those are regularly monitored;

� As per KPMG’s guideline and based on feedback of respective branches and divisions a policy on Access Control Management of the Bank’s Core Banking Software T24 has been developed & approved by the top management of the Bank;

� Regular review of system and network by Management Committee (MANCOM) and Management Reporting System Committee (MRSC)

� Internal Audit & Inspection and Internal Control and Compliance Division of the bank undertake periodical, comprehensive and special audit of branches and departments at Head Office for review of the operation and compliance of statutory requirement respectively. The Audit Committee of the Board subsequently reviews the reports of the Internal Control and Compliance Division.

� Self-Assessment of Anti-Fraud Internal Control are being carried out with due diligence under the purview of best practices in the banking industry.

� Risk Based Internal Audit (RBIA) is being carried out by Internal Audit & Inspection Division.

� Independent Anti Money Laundering (AML) Inspection is being conducted at branch level by Internal Audit & Inspection Division.

� Segregation of duties and multi-tier approval procedure are in place.

� IT Audit is being carried out on regular basis

� Establishing a Data Center for backup of data and information

� Regular testing of system’s back-up procedure and contingency plan

Prevention of Money Laundering

Money Laundering means properties acquired or earned directly or indirectly through illegal means or illegal transfer or use of legally earned money, conversion and concealment of ownership and source of fund. Bangladesh Bank through BRPD Circular No. 17 dated October 07, 2003 advised the scheduled commercial banks operating in the country to put in place effective risk management system which includes Money Laundering Risk Management among others.

PBL has updated Anti Money Laundering Guidelines in 2012, which includes Senior Management commitment to the anti-money laundering program. The Management has developed such a culture for the Bank so that all the employees strictly adhere to each and every provision of Money Laundering Prevention Act 2012 and Anti-

Loan to own

Brokerage

380

Equity Investment

in Merchant Banks

371.25

Share 34

Capital Market Exposure

Loan to Stock Dealer

1

Total capital Market Exposure

856.97

Loan to other

Brokerage70.72

148


Terrorism Act-2009 with amendment of 2012. Later Circular was issued for compliance of the Anti-Terrorist (Amended) Act-2013. All employees of the Bank, irrespective of the position they hold, are accountable to the Top Management and regulatory bodies for their activities which might directly or indirectly relate to money laundering. Details of Anti Money Laundering activities are included in the ‘Corporate Governance’ chapter of this Annual Report.

For mitigating the risks, the management of the Bank has formed Anti Money Laundering Department. The Bank has also nominated CAMLCO, Deputy CAMLCO centrally and BAMLCO at branches for monitoring compliance issues related to Anti Money Laundering. The regulatory requirements are being complied with the guidelines.

The CAMLCO of the Bank has been participating in the CAMLCO Conference organized by Bangladesh Bank every year. The Central Bank has been arranging district level AML related training for employees of all schedule Banks operating in the district(s).

Internal Control and Compliance

Internal Audit & Inspection Division conducts internal audit in all the Branches of our Bank to identify lapses/irregularities related to account opening, preparation and update of KYC and other related issues, preparation of accurate Transaction Profile (TP) and to build up the knowledge about AML issues/matters.

Internal Control and Compliance is a management process designed to achieve effectiveness and efficiency of operations, reliable financial reporting and compliance with laws and regulations.

Pillar 1 and Pillar 2 of Basel–II Accord also focused on operational risk and supervisory review respectively attaching considerable importance to internal control & compliance and on supervision & monitoring. As prescribed in the Bangladesh Bank core risk guideline on Internal Control & Compliance, Management Committee (MANCOM) of PBL reviews the overall effectiveness of internal control system.

The chapter on ‘Corporate Governance’ of this Annual Report contains detail discussion on internal control & compliance measures of the Bank.

Islamic Banking Risk Management

Islamic banking is becoming a popular mode of banking because of its Shari’ah complied principles. In many countries, there are separate Islamic banking banks and also banks which are operating under both conventional and Islamic mode of banking. In addition to the credit risk, market risk, liquidity risk and operational risk there are other risks in Islamic banking operation.

� Shari’ah Non-Compliance Risk arises from the failure of the banks to comply with Shari’ah rules and regulations. As more and more banks are operating under both conventional and Islamic banking, it is becoming increasingly important to comply with Shari’ah rules and regulations for the sustainability of Islamic banking. Based on historical reviews, the potential areas of Shari’ah non-compliance is assessing potential profits that cannot be recognized as eligible profits under Shari’ah Principle.

� Fiduciary risk is the risk that arises from Bank’s failure to perform in accordance with explicit and implicit standards applicable to their fiduciary responsibilities. As a result of losses in investments, banks may become insolvent and therefore unable to (i) meet the demands of current account holders for repayment of their funds and (ii) safeguard the interests of their PLS (Profit Loss Sharing) deposit holders. Banks may fail to act with due care when managing investments resulting in the risk of possible forgone profits to PLS deposit holders. In order to reduce Shari’ah non-compliance risk, the Muraqibs regularly conducted Shari’ah audit. Fiduciary risk is controlled through Bank’s risk management process.

Information and Communication Technology Risk Management

We are living in an era of information and communication technology and the banks have become more technology driven these days. Use of computer, internet has become a common practice in the banking industry. There are certain risks involved in the use of information and communication technology. This risk may arise from malfunction of system, failure of network, lack of knowledge about the use of technology, virus attack, hacking etc.

PBL has adopted world class Core Banking Software “TEMENOS T24”. PBL has also implemented Disaster Recovery (DR) site. One DR site located in Uttara and the other is in Gulshan to make sure that the bank operates smoothly under unavoidable circumstances. PBL has an IT audit team also, formed as per the Central Bank’s guideline.

The team conducts IT Audit in each branch on a periodic basis and provides suggestions to higher management. IT Division is also managing IT related training programs to make sure that employees are aware of IT risk related issues. The chapter on ‘Corporate Governance’ in this Annual Report contains details of IT audit.

With a vision to provide secure and safer banking service,

149

Information Security Department has been formed. At the very beginning, Information Security department is following globally accepted management system standard ‘ISO 27001’ to manage Information Security.

Internal Capital Adequacy Assessment Process (ICAAP)

The Bank conducts ICAAP process every year as stipulated by the Bangladesh Bank. ICAAP is aimed at ensuring that the bank maintains an amount of capital commensurate to its risk profile and improves upon its risk management systems and framework. It involves realistic assessment of the level of risks inherent in the business operations of the bank and setting aside adequate capital to cover all such risks like Residual Risk, Concentration Risk, Liquidity Risk, Reputation Risk, Strategic Risk, Settlement Risk etc. The assessment is done considering the operational presence, activities, and processes etc. Monitoring all the material risks also forms part of ICAAP. In short, ICAAP is integrated into the management and decision making process and is reflected in the processes and business operations of the Bank.

Risk Management Paper

As per Bangladesh Bank (BB) requirement, Risk Management Division (RMD) prepares Risk Management Paper which is presented in the meeting of Risk Management Unit (RMU) on monthly basis. At the end of each quarter, Risk Management Paper along with the minutes is submitted to Bangladesh Bank by Risk Management Division. Risk Management Paper is a comprehensive document related to risk issues which is being placed in the Risk Management Unit’s monthly meeting. It also allows identification and mitigation of risk under necessary guidance of the Senior Management of the Bank.

In addition to the prescribed format of Bangladesh Bank, PBL has incorporated various analyses on Credit

Risk, Market Risk, Liquidity Risk, Operational Risk as well as Strategic Risk.Risk Management Paper is also being submitted to the Risk Management Committee of the Board and the decisions are being communicated with relevant divisions of the bank for necessary action.

Borrowers’ Rating

As prescribed by Bangladesh Bank (BB), all banks in Bangladesh assessing credit risk under the Standardized Approach of the Risk Based Capital Adequacy framework (Basel II), where External Credit Assessment Institutions (ECAIs) duly recognized by BB performs borrower rating against which risk weight mapped with the credit rating category and risk weighted assets (RWA) is determined for calculating the capital requirement of banks against credit risk.

Basel-II, in respect of capital measurement and capital standards, aligns capital of a bank more closely with the underlying risk. With a view to smooth implementation of Basel II Accord, The management of PBL decided to conduct Credit Rating for Corporate Borrowers through External Credit Rating Assessment Institutions (ECAIs).

Percentage of Total Rated Corporate Borrowers

BB G

rade

119

.90%

BB Grade 2

33.25%

BB Grade 4

7.85%

BB Grade 3

37.70%

BB Grade 5 1.31%

Bangladesh Bank Rating GradeNo. of Rated Borrowers of PBL Percentage of Total Rated Borrowers

Corporate SME Corporate SME

BB Grade 1 76 - 19.90% -

BB Grade 2 127 - 33.25% -

BB Grade 3 144 2 37.70% 16.67%

BB Grade 4 30 9 7.85% 75.00%

BB Grade 5 5 1 1.31% 8.33%** The risk weight for unrated exposure is 125 percent.

150


Capital Management is one of the key strategic issues these days in the banking business. Borrower rating not only plays an important role in improving capital adequacy of the bank through capital relief but also helps the bank to understand the risk associated with the borrowers. In this regard, RMD calculates capital relief on the basis of rated customers quarterly. Through borrower rating, PBL achieved capital relief of 6971.10 million during 2014 compared to capital relief of 5796.40 million during 2013.

As a result of vigorous effort and continuous persuasion, out of total 576 nos. of eligible corporate borrowers of PBL having exposures of BDT 100 million and above, rating of 382 nos. of borrowers (66.32 percent of eligible corporate borrowers) has been completed till December 31, 2014. Moreover, rating of 12 no. of SME borrowers has been completed till December 31, 2014. The rating distribution of the 394 Corporate & SME borrowers of PBL is as follows:

Stress Testing

A stress test, in financial terminology, is an analysis or simulation designed to test the ability of a given financial institution to deal during forecasted economic crisis. Instead of doing financial projection on a “best estimate” basis, a bank or its regulators do stress testing where it looks at how robust institutions is in certain crashes, a kind of “What-If” scenario analysis.

This type of analysis has become increasingly widespread, and has been taken up by various governmental bodies as a regulatory requirement on certain financial institutions to ensure adequate capital allocation to cover potential losses incurred during extreme, but plausible, events.

Stress testing framework as provided by Bangladesh Bank assesses the impact on CAR due to minor, moderate and major level of shock in terms of credit risk, exchange rate risk, liquidity risk, equity price risk and interest rate risk. Stress testing for credit risk assesses the impact of increase in the level of Non-Performing Loans (NPLs) of the banks.

Performing loan directly downgraded to B/L- Sectoral Concentration 1

It is a measure of the concentration risk where the bank has the highest investment. It assumes that 3 percent, 9 percent and 15 percent of the performing loan will be directly downgraded to B/L category in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.62 percent, 12.59 percent

and 12.56 percent in minor, moderate and major levels of shock respectively when considering individual shock.

Performing loan directly downgraded to B/L- Sectoral Concentration 2

It is a measure of the concentration risk where the bank has the second highest investment. It assumes that 3 percent, 9 percent and 15 percent of the performing loan will be directly downgraded to B/L category in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.64 percent, 12.65 percent and 12.65 percent in minor, moderate and major levels of shock respectively when considering individual shock.

Increase in NPLs due to default of top large loan borrowers

It represents the scenario of the bank when top large borrowers default. It is assumed that top 3, 7 and 10 borrowers of the bank will default in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 11.00 percent, 9.15 percent and 8.18 percent in minor, moderate and major levels of shock respectively when considering individual shock. PBL is reducing the exposure of large loan borrower and focusing on diversification of credit portfolio. However, the bank is continuously monitoring the performance of large loan borrowers. Besides, a good amount of

Performing Loan Directly Downgraded to B/L: RMG

CA

R

Minor Moderate Major

0

10.50

11.00

11.50

12.00

12.50

13.00


Performing Loan Directly Downgraded to B/L: Textile

CA

R


0

10.00

10.50

11.00

11.50

12.00

12.50

13.00


151

security coverage is also maintained against those large loans.

Negative shift in NPLs categories

It represents the shift of a loan from one NPL category

to the next NPL category. It is based on the assumption

of 5 percent, 10 percent and 15 percent downward shift

in the NPLs categories in minor, moderate and major

levels of shock respectively. Capital Adequacy Ratio

(CAR) of PBL will be 12.21 percent, 10.58 percent and

10.10 percent in minor, moderate and major levels of

shock respectively when considering individual shock.

Decrease in the Forced Sale Value (FSV) of the collateral

It represents the Bank’s condition when FSV of collateral

decreases sharply. It is based on the assumption that

FSV of collateral will fall by 10 percent, 20 percent and

40 percent in minor, moderate and major levels of shock

respectively. Capital Adequacy Ratio (CAR) of PBL will be

12.42 percent, 12.21 percent and 11.77 percent in minor,

moderate and major levels of shock respectively when

considering individual shock.

Interest rate shock

It represents the condition of the bank when interest rate changes significantly. It is based on the assumption that interest rate will change by 1 percent, 2 percent and 3 percent in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 11.89 percent, 11.13 percent and 10.38 percent in minor, moderate and major levels of shock respectively when considering individual shock.

Foreign exchange shock

It represents the condition of the bank when exchange rate changes significantly. It is based on the assumption that exchange rate will change by 5 percent, 10 percent and 15 percent in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.63 percent, 12.62 percent and 12.61 percent in minor, moderate and major levels of shock respectively when considering individual shock.

Equity shock

It represents the Bank’s condition when market value of share falls sharply. It is based on the assumption that share price will change by 10 percent, 20 percent and 40 percent in minor, moderate and major levels of shock respectively. Capital Adequacy Ratio (CAR) of PBL will be 12.38 percent, 12.12 percent and 11.59 percent in

CA

R


0

2.00

4.00

6.00

8.00

10.00

12.00


Interest rate Shock

Negative Shift in NPL Categories

CA

R


0

2.00

4.00

6.00

8.00

10.00

12.00

14.00


CA

R


0

10.00

10.50

11.00

11.50

12.00

12.50


Decrease in the FSV of Collateral

CA

R


0

2.00

4.00

6.00

8.00

10.00


Foreign Exchange Shock

CA

R


0

2.00

4.00

6.00

8.00

10.00

12.00


Increase in NPL due to Default of Top Large Loan Borrowers

152


minor, moderate and major levels of shock respectively when considering individual shock.When all the shocks are considered together, Capital Adequacy Ratio (CAR) of PBL will be 10.46 percent, 6.55 percent and 2.93 percent in minor, moderate and major levels of shock respectively. So, the Bank can absorb minor level of shock only when all the shocks are considered together. However, for absorbing other levels of shock which is very unlikely in the industry, the bank may require additional capital and reserve.

For absorbing different shocks under Stress Testing, PBL took the following measures: � Exposure on large loan customers are being

monitored closely � Emphasize on enhancing collateral coverage

against large loan exposure;

� Encouraging focus on SME lending; � Regular loans are being monitored closely in order

to avoid classification; � Persuading unrated Corporate and SME customers

to bring them under the umbrella of ECAI’s credit

rating.

Equity Shock

CA

RMinor Moderate Major

0

2.00

4.00

6.00

8.00

10.00

12.00

14.00


153

Interest Rate Risk Analysis for 1 percent change in the market rate of interestas on 31.12.2014

Particular 1- 90 daysOver 3 month to

up to 6 monthOver 6 month to

up to 9 monthOver 9 month to

up to 1 year

Rate Sensitive Assets 64,865,294,285.08 25,678,818,513.16 23,762,282,078.51 8,103,773,719.10

Rate Sensitive Liabilities 75,932,500,571.14 17,876,024,082.85 9,307,705,521.96 7,910,197,923.34

Gap (11,067,206,286.06) 7,802,794,430.32 14,454,576,556.56 193,575,795.76

Cumulative GAP (11,067,206,286.06) (3,264,411,855.75) 11,190,164,700.81 11,383,740,496.57

Adjusted Interest Rate Change (IRC) 1.00% 1.00% 1.00% 1.00%

Quarterly earnings impact (Cum.Gap*IRC) (27,289,001.80) (8,049,234.71) 27,592,186.93 28,069,497.11

Accumulated earning impact to date (27,289,001.80) (35,338,236.51) (7,746,049.58) 20,323,447.53

Earning Impact / Avg. Quarterly Net Profit -5.97% -7.73% -1.69% 4.44%

Bank’s Exposure to Foreign Exchange Risk as on 31.12.2014Amount in BDT

Currency

Short Term Foreign Currency HoldingsLong Term Foreign Currency

Holdings

Assets in FCY

Liabilities in FCY

Short Term Net Position

Assets in FCY

Liabilities in FCY

Long Term Net Position

Overall Net

Position

Overall Net Position /

Core Capital1 2 3=1-2 4 5 6=4-5 7=3+6 8

USD 177,119,917 171,952,173 5,167,744 - - - 40.28EUR 2,820,835 2,746,084 74,751 - - - 0.71GBP 229,417 19,006 210,411 - - - 2.54JPY 11,822,069 - 11,822,069 - - - 0.76CHF 16,753 - 16,753 - - - 0.13CAD 82,714 - 82,714 - - - 0.55AUD 44,596 - 44,596 - - - 0.28SGD 399,445 130,000 269,445 - - - 1.59SAR 107,881 - 107,881 - - - 0.22SEK 29,525 - 29,525 - - - 0.03

TOTAL 192,673,152 174,847,263 17,825,889 - - - 47.11 1.72%

154


1. Scope of ApplicationQualitative disclosure

a)The name of the top corporate entity in the group to which this guidelines applies.

Prime Bank Limited

b)

An outline of differences in the basis of consolidation for accounting and regulatory purposes, with a brief description of the entities within the group (a) that are fully consolidated; (b) that are given a deduction treatment; and (c) that are neither consolidated nor deducted (e.g. where the investment is risk-weighted).

Prime Bank Limited has 5 (Five) subsidiaries viz. (i) Prime Bank Investment limited, (ii) Prime Bank Securities Limited, (iii) Prime Exchange Co. (Pte.) Limited, Singapore, (iv) PBL Exchange (UK) Limited and (v) PBL Finance (Hong Kong) Limited.

A brief description of the Bank and its subsidiaries are given below:

Prime Bank Limited:The Prime Bank Limited (“the Bank”) was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch from April 17, 1995 under the license issued by Bangladesh Bank. Presently the Bank has 140 (One Hundred and Forty) branches including 18 (Eighteen) SME Centers/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong Port, Chittagong. Out of the above 140 branches, 05 (five) branches are designated as Islamic Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5 (Five) subsidiary Companies (3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering in 1999 and its shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share.The principal activities of the Bank are to provide all kinds of commercial banking services to its customers through its branches.

Subsidiaries of PBL:

i) Prime Bank Investment Limited:Prime Bank Investment Limited (PBIL) is a subsidiary company of Prime Bank Limited incorporated as a public limited company on April 27, 2010 with the registrar of Joint Stock Companies, vide certificate of incorporation no. C-84266/2 dated 28 April 2010 which has commenced its business on the same date.

The main objectives of the company are to carry out the business of full-fledged merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services etc.

ii) Prime Bank Securities Limited:Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies Act 1994. The main objectives of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company. The company commenced its operation from May 2011.

Market DisciplineDisclosures on Risk Based Capital (Basel-II)

155

iv) PBL Exchange (UK) Limited:PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and Wales under registration no. 7081093 dated 19 November 2009. The company is a wholly owned subsidiary of Prime Bank Limited. The company commenced its operation on 02 August 2010 with three Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF.

v) PBL Finance (Hong Kong) Limited:PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong) Limited was incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business Registration no. 58197431 both dated April 7, 2011). PBL Finance (Hong Kong) Limited obtained Money Lending Licenses # 307/2011 issued by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011 with one branch located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong.

c)

Any restrictions, or other major impediments, on transfer of funds or regulatory capital within the group.

Not applicable

Quantitative disclosure

d)

The aggregate amount of capital deficiencies in all subsidiaries not included in the consolidation that are deducted and the name(s) of such subsidiaries.

Not applicable

2. Capital Structure

Qualitative disclosure

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 in Tier 2.

As per the guidelines of Bangladesh Bank, Tier-1 Capital of PBL consists of (i) Fully Paid-up Capital, (ii) Non-repayable Share Premium Account, (iii) Statutory Reserve, (iv) Retained Earnings and (v) Minority Interest in Subsidiaries.

Tier-2 Capital consists of (i) General Provision against unclassified Loans/Investments, Off-balance sheet exposure & Off-shore banking Units), 50% of Asset revaluation reserve, 50% of Revaluation gain/loss on investment (HFT), 10% of Revaluation reserve for equity instruments, PBL unsecured nonconvertible subordinated bond as approved by Bangladesh Bank and Exchange equalization fund etc.


b) The amount of Tier-1 capital with separate disclosure of:Solo Consolidated

Taka in CroreI. Fully Paid up capital 1,029.35 1,029.35II. Non repayable share premium account 224.12 224.12III. Statutory reserve 818.46 818.46IV. General reserve - 2.80V. Retained earnings 179.13 186.40VI. Minority interest in subsidiaries 0.00 0.00VII. Non-cumulative irredeemable preference shares - -VIII. Dividend equalization account - -Sub-Total (A) 2,251.06 2,261.14

156


c) The total amount of Tier 2 and Tier 3 capital (B) 480.21 481.23

d) Other deductions from capital - -e) Total eligible capital (A+B) 2,731.28 2,742.37

3. Capital Adequacy:

Qualitative disclosure a)

A summary discussion of the bank’s approach to assessing the adequacy of its capital to support current and future activities.

The Bank has adopted Standardized Approach (SA) for computation of capital charge for credit risk and market risk, and Basic Indicator Approach (BIA) for operational risk. Assessment of capital adequacy is carried out in conjunction with the capital adequacy reporting to the Bangladesh Bank.The Bank has maintained capital adequacy ratio on the basis of “Consolidated” and “Solo” are 12.68% & 12.71% respectively as against the minimum regulatory requirement of 10%. Tier-I capital adequacy ratio for “Consolidated” is 10.45% as well as “Solo” is 10.48% against the minimum regulatory requirement of 5%. The Bank’s policy is to manage and maintain its capital with the objective of maintaining strong capital ratio and high rating. The Bank maintains capital levels that are sufficient to absorb all material risks. The Bank also ensures that the capital levels comply with regulatory requirements and satisfy the external rating agencies and other stakeholders including depositors. The main objective of the capital management process in the Bank is to ensure that Bank has adequate capital to meet up its all sorts of obligations any time.


Solo ConsolidatedParticulars Taka in Crore

b) Capital requirement for credit risk 1,867.35 1,858.03

c) Capital requirement for market risk 76.54 90.53d) Capital requirement for operational risk 205.03 214.68e) Total and Tier 1 capital ratio:

• For the consolidated group; and • For stand alone

-82.42%

82.45%-

Minimum capital requirement 2,148.92 2,163.24Total Risk Weighted Assets (RWA) 21,489.18 21,632.42

Total and Tier-1 Capital Ratio:

Total CAR 12.71% 12.68%

Tier-1 CAR 10.48% 10.45%

Tier-2 CAR 2.23% 2.22%

157

4. Credit Risk:


a) The general qualitative disclosure requirement with respect to credit risk, including:

i) Definitions of past due and impaired loans (for accounting purpose);

With a view to strengthening credit discipline and bring classification and provisioning regulation in line with international standard, a phase-wise program for classification and provisioning was undertaken by the Bank as per Bangladesh Bank circulars issued from time to time. In this regard, all the loans and advances/investments are grouped into four categories for the purpose of classification, namely (i) Continuous Loan, (ii) Demand Loan, (iii) Fixed Term Loan and (iv) Short-term Agricultural and Micro Credit. They are classified as follow:

Continuous & Demand Loan are classified as:

� Sub-standard- if it is past due/overdue for 03(three) months or beyond but less than 06 (six) months;

� Doubtful- if it is past due/overdue for 06 (six) months or beyond but less than 09 (nine) months;

� Bad/Loss- if it is past due/overdue for 09 (nine) months or beyond.

In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting up to Taka 1 million is not repaid within the due date, the amount of unpaid installment(s) are treated as “past due or overdue installment”. Such types of Fixed Term Loans are classified as under:

� Sub-standard- if the amount of past due installment is equal to or more than the amount of installment(s) due within 06 (six) months, the entire loans are classified as “Sub-standard”.

� Doubtful- if the amount of past due installment is equal to or more than the amount of installment(s) due within 09 (nine) months, the entire loans are classified as “Doubtful.

� Bad/Loss- if the amount of past due installment is equal to or more than the amount of installment(s) due within 12(twelve) months, the entire loans are classified as “Bad/Loss”.

In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting more than Taka 1 million is not repaid within the due date, the amount of unpaid installment(s) are treated as “past due or overdue installment”. Such types of Fixed Term Loans are classified as under:

� Sub-standard- if the amount of past due installment is equal to or more than the amount of installment(s) due within 03 (three) months, the entire loans are classified as “Sub-standard”.

� Doubtful- if the amount of past due installment is equal to or more than the amount of installment(s) due within 06 (six) months, the entire loans are classified as “Doubtful”.

� Bad/Loss- if the amount of past due installment is equal to or more than the amount of installment(s) due within 09 (nine) months, the entire loans are classified as “Bad/Loss”.

158


ii) Description of approaches followed for specific and general provisions and statistical methods;

Short-term Agricultural and Micro Credit will be considered irregular if it is not repaid within the due date as stipulated in the loans agreement and will be classified as under:

� Sub-standard- if the irregular status continues after a period of 12 (twelve) months, the credits are classified as “Sub-standard”.

� Doubtful- if the irregular status continue after a period of 36 (thirty six) months, the credits are classified as “Doubtful”.

� Bad/Loss- if the irregular status continue after a period of 60 (sixty) months, the credits are classified as “Bad/Loss”.

A Continuous loan, Demand loan or a Term Loan which remained overdue for a period of 02 (two) months or more, is treated as “Special Mention Account (SMA)”.

The Bank is required to maintain the following general and specific provision in respect of classified and unclassified loans and advances / investments on the basis of Bangladesh Bank guidelines issued from time to time:

Particulars RateGeneral provision on unclassified Small and Medium Enterprise (SME) financing.

0.25%

General provision on unclassified loans and advances/investments other than Consumer Financing, Loans to Brokerage House, Merchant Banks, Stock Dealers etc., SMA as well as SME Financing).

1%

General provision on interest receivable on loans / investments.

1%

General provision on off-balance sheet exposures (Provision has been made on the total exposure and amount of cash margin & value of eligible collateral were not deducted while computing off-balance sheet exposure).

1%

General provision on unclassified loans and advances/investments for housing finance, loans for professionals to set-up business under consumer financing scheme.

2%

General provision on the unclassified loans to Brokerage House, Merchant Banks, Stock Dealers, etc. 2%

General provision on unclassified amount for Consumer Financing. 5%

General provision on outstanding amount of loans kept in Special Mention Account (SMA) will be at the same respective rate as stated above (0.25% to 5%) as per BRPD Circular No. 05 dated 29.05.2013.Specific provision on Sub-Standard loans and advances / investments.

20%

Specific provision on Doubtful loans and advances / investments.

50%

Specific provision on bad / loss loans and advances / invests. 100%


b)Total gross credit risk exposures broken down by major types of credit exposure.

Total gross credit risk exposures broken down by major types of credit exposure of the Bank:Particulars Taka in CroreSecured Ov erdraft/Quard A gainst T DR 3,673.74Cash Credit/Mudaraba 1,821.15

Loan (General) 3,565.07House Building Loan 360.35Loan Against Trust Receipts (LTR) 741.59

159

Payment Against Documents (PAD) 12.42Retail Loan 1,255.28Lease Finance/Izara 488.17Credit Card 113.17SME Loan 75.91Hire Purchase 616.60Other Loans & Advances 1,554.55Bill purchased/discounted-Inland 305.88Bill purchased/discounted-Foreign 152.78

Total 14,736.67

c)

Geographical distribution of exposures, broken down in significant areas by major types of credit exposure.

Geographical distribution of exposures, broken down in significant areas by major types of credit exposure of the Bank:Particulars Taka in CroreUrban:Dhaka Zone 10,809.50Chittagong Zone 2,326.81Khulna Zone 588.01Rajshahi Zone 414.12Barishal Zone 11.16Sylhet Zone 155.15Rangpur Zone 83.67Sub-Total 14,388.43Rural:Dhaka Zone 172.25Chittagong Zone 78.54Khulna Zone 6.49Rajshahi Zone 58.77Sylhet Zone 32.20Sub-Total 348.24

Grand Total (Urban + Rural) 14,736.67

d)

Industry or counterparty type distribution of exposures, broken down by major types of credit exposure.

Industry or counterparty type distribution of exposures, broken down by major types of credit exposure of the Bank:

Particulars Taka in Crore

Commercial Lending 3,161.88Export Financing 752.27House Building Loan 360.35Retail Loan 1,255.28Small & Medium Enterprises (SME) 2,005.48

Special Program Loan 133.05Staff Loan 0.90Other Loans & Advances (SOD) 251.55Loans, Advances & Lease/Investments to Managing Director / CEO and other senior executives

185.47

Industrial Loans/Investments (Details are given below)

6,630.43

Total 14,736.67

Industrial Loans/InvestmentsParticulars Taka in CroreAgriculture 199.41Textile Industries 607.07Food and allied industries 435.63Pharmaceutical Industries 76.16Leather , Chemical, Cosmetics, etc. 70.75Tobacco Industries 74.89Cement and Ceramic Industries 362.50Service Industries 1,561.20Transport & Communication Industries 513.98

160


Other Industries including bills purchased and discounted

2,728.84

Total 6,630.43

e)

Residual contractual maturity breakdown of the whole portfolio, broken down by major types of credit exposure.

Residual contractual maturity break down of the whole portfolios, broken down by major types of credit exposure of the Bank:Particulars Taka in CroreRepayable on Demand -Up to 1 month 3,092.58Over 1 month but not more than 3 months 2,480.36Over 3 months but not more than 1 year 5,291.00Over 1 year but not more than 5 years 3,600.94Over 5 years 271.79

Total 14,736.67

f)

By major industry or counterparty type:

i) Amount of impaired loans and if available, past due loans, provided separately;

The amount of classified loans and advances/investments of the Bank are given below as per Bangladesh Bank guidelines.

Particulars Taka in Crore

Continuous Loans & Advances 180.59

Demand Loans & Advances 199.95

Term Loans & Advances 740.34

Short Term Agro Credit and Micro Credit 0.59

Total 1,121.46

ii) Specific and general provisions; and

Specific and general provisions were made on the amount of classified and unclassified loans and advances/investments, off-balance sheet exposures and off-shore banking units, interest on receivable, diminution in value of investment and other assets-suspense of the Bank according to the Bangladesh Bank guidelines.Particulars Taka in Crore Provision on classified loans/investments 416.53

Provision on unclassified loans/investments 166.36Provision on Off-balance sheet exposures 108.85Provision for Off-shore Banking Units 49.85Provision for interest receivable on loans & advances/investments

0.95

Provision for other assets 9.45Provision for diminution in value of investments.

6.13

Total 758.13

iii) Charges for specific allowances and charge-offs during the period.

During the year the specific and general provisions were made on the amount of classified and unclassified loans and advances/investments, off-balance sheet exposure, off-shore banking units, interest on receivable, diminution in value of investment and other assets-suspense of the Bank as per Bangladesh Bank guidelines.

Particulars Taka in CroreProvision on classified loans/investments 264.35Provision on unclassified loans/investments 11.40Provision on Off-balance sheet exposures (0.15)Provision for Off-shore Banking Units 7.60Provision for interest receivable on loans & advances/investments

-

Provision for other assets 0.62Provision for diminution in value of investments

(0.70)

Provision for impairment loss for investment in subsidiaries

4.54

Total 287.66

161

g)

Gross Non Performing Assets (NPAs).Non Performing Assets (NPAs) to Outstanding loans and advances.

Movement of Non Performing Assets (NPAs).

Particulars Taka in CroreOpening balance 781.45Addition/adjustment during the year 340.01Closing balance 1,121.46

Movement of specific provisions for NPAs.

Particulars Taka in CroreOpening balance 334.20Provisions made during the period 264.35Transferred from unclassified loan & advances including OBU

10.00

Write-off (212.29)Write-back of excess provisions 20.27Closing Balance 416.53

5. Equities: Disclosures for Banking Book Positions


a)

The general qualitative disclosure requirement with respect to equity risk, including:

Differentiation between holdings on which capital gains are expected and those taken under other objectives including for relationship and strategic reasons; and

Investment in equity securities are broadly categorized into two parts:i. Quoted Securities (Common or Preference

Shares & Mutual Fund) that are traded in the secondary market (Trading Book Assets).

ii. Unquoted securities include shares of Central Depository Bangladesh Limited (CDBL), investment in SWIFT and Market Stabilization Fund (MSF).

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.

The primary aim is to investment in these equity securities for the purpose of capital gain by selling them in future or held for dividend income. Dividends received from these equity securities are accounted for as and when received. Both Quoted and Un-Quoted equity securities are valued at cost and necessary provisions are maintained if the prices fall below the cost price.


Solo Consolidated

Taka in Crore

At costAt market

valueAt cost

At market value

b)

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.

29.96 23.83 149.01 93.77

c)The cumulative realized gains (losses) arising from sales and liquidations in the reporting period. 1.76

4.75

d)

� Total unrealized gains (losses) (6.13) (55.24)

� Total latent revaluation gains (losses) - -

� Any amounts of the above included in

Tier-2 capital.- -

e)Capital requirements broken down by appropriate equity groupings, consistent with the bank’s methodology, as well as the aggregate amounts and the type of equity investments subject to any supervisory provisions regarding regulatory capital requirements (10% on market value).

• Specific Market Risk 2.38 9.38

• General Market Risk 2.38 9.38

162


6. Interest Rate Risk in the Banking Book (IRRBB)


(a)

The general qualitative disclosure requirement including the nature of IRRBB and key assumptions, including assumptions regarding loan prepayments and behavior of non-maturity deposits, and frequency of IRRBB measurement.

Interest rate risk is the risk where changes in market interest rates might adversely affect a bank's financial condition. Changes in interest rates affect both the current earnings (earnings perspective) as well as the net worth of the bank (economic value perspective). To evaluate the impact of interest rate risk on the net interest margin, Prime Bank monitors the size of the gap between rate sensitive assets and rate sensitive liabilities in terms of the remaining period to repricing. Repricing refers to the point in time when adjustments of interest rates on assets and liabilities occur owing to new contracts, renewal of expiring contracts or that a contract specifies a floating rate that adjusts at fixed time intervals.

A maturity mismatch approach is used to measure Prime Bank’s exposure to interest rate risk. A positive mismatch means that more assets than liabilities are repriced in a given period. With a positive mismatch, a rise in market interest rates will have a positive effect on the bank's earnings. On the other hand, a negative mismatch, where more liabilities are repriced than assets in a given period, means a drop in earnings if interest rates had increased.

The table presented below showing the Interest Rate Risk Analysis of Prime Bank Limited. The analysis shows that Bank may suffer a negative earnings impact (loss) of Taka 2.73 crore in the first quarter and Taka 0.80 crore in the second quarter, for a total year-to-date negative earnings impact of Taka 3.53 crore. In the third quarter, the total year-to-date accumulated earnings impact continues to be negative, even though there is a positive gap of Taka 2.76 crore. Here, it is observed that accumulated earnings for the year 2014 owing to a 1% increase in interest rate is a gain of Taka 2.03 crore.

The rule of thumb suggests that quarterly gaps causing an earnings impact of 10% of the Bank’s average quarterly net profit for each 1% change in interest rates should be carefully handled by the Bank’s Management. The last row of the following table reveals that earnings impact on Prime Bank’s average quarterly net profit is very insignificant and remains within the acceptable limit as prescribed by Bangladesh Bank.

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Interest Rate Risk Analysis (for 1% change in the market rate of interest)


(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).

Particulars1 to 90

days

Over 3 months

to up to 6 months

Over 6 months to

up to 9 months

Over 9 months to

up to 1 year

Taka in Crore

Rate Sensitive Assets 6,486.53 2,567.88 2,376.23 810.37

Rate Sensitive Liabilities 7,593.25 1,787.60 930.77 791.02

GAP (1,106.72) 780.28 1,445.46 19.35

Cumulative GAP (1,106.72) (326.44) 1,119.02 1,138.37

Adjusted Interest Rate Changes (IRC)

1.00% 1.00% 1.00% 1.00%

Quarterly earnings impact (Cum. GAP * IRC)

(2.73) (.80) 2.76 2.81

Accumulated earning impact to date

(2.73) (3.53) (0.77) 2.03

Earning impact/Avg. quarterly net profit

-5.97% -7.73% -1.69% 4.44%

7. Market Risk:


a)

i) Views of Board of Directors (BOD) on trading/ investment activities.

Market risk is the possibility of losses of assets in balance sheet and off-balance sheet positions arising out of volatility in market variables i.e., interest rate, exchange rate and price. Allocation of capital is required in respect of the exposure to risks deriving from changes in interest rates and equity prices in the bank’s trading book, in respect of exposure to risks deriving from changes in foreign exchange rates and commodity price in the overall banking activity. The total capital requirement for banks against their market risk shall be the sum of capital charges against:

� Interest rate risk

� Equity position risk

� Foreign exchange (including gold) position risk throughout the bank’s balance sheet and

� Commodity risk.

ii) Methods used to measure Market risk.

Measurement Methodology:As banks in Bangladesh are now in a stage of developing risk management models, Bangladesh Bank has suggested the banks for using Standardized Approach for credit risk capital requirement for banking book and Standardized (rule based) Approach for market risk capital charge in their trading book.

Maturity Method has been prescribed by Bangladesh Bank in determining capital against market risk. In the maturity method, long or short positions in debt securities and other sources of interest rate exposures, including derivative instruments, are slotted into a maturity ladder comprising 13 time-bands (or 15 time-bands in case of low coupon instruments). Fixed-rate instruments are allocated according to the residual term to maturity and floating-rate instruments according to the residual term to the next re-pricing date.In Standardized (rule based) Approach the capital requirement for various market risks (interest rate risk, price, and foreign exchange risk) are determined separately.

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The total capital requirement in respect of market risk is the sum of capital requirement calculated for each of these market risk sub-categories, e.g.:

� Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk;

� Capital Charge for Equity Position Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk;

� Capital Charge for Foreign Exchange Risk = Capital Charge for General Market Risk;

� Capital Charge for Commodity Position Risk = Capital charge for general market risk.

iii) Market Risk Management System.

Treasury Division manages the market risk and ALCO monitors the activities of Treasury Division in managing such risk.

iv) Policies and processes for mitigating market risk.

To mitigate the several market risks the bank formed Asset Liability Management Committee (ALCO) who monitors the Treasury Division’s activities to minimize the market risk. ALCO is primarily responsible for establishing the market risk management and asset liability management of the Bank, procedures thereof, implementing core risk management framework issued by the regulator, best risk management practices followed by globally and ensuring that internal parameters, procedures, practices/polices and risk management prudential limits have been set up and followed.

The Treasury Division are taking following measures to minimize the several market risks:

i) Foreign exchange risk management: it is the risk that the bank may suffer losses as a result of adverse exchange rate movement during a period in which it has an open position in an individual foreign currency. This risk is measured and monitored by the Treasury Division. To evaluate the extent of foreign exchange risk, a liquidity Gap report is prepared for each currency.

ii) Equity Risk: Equity risk is defined as losses due to changes in market price of the equity held. To measure and identify the risk, mark to market valuation of the investment portfolios of share is being done. Mark to market valuation is done against a predetermined limit. At the time of investment, following factors are taken into consideration:

a. Security of Investment

b. Fundamentals of securities

c. Liquidity of securities

d. Reliability of securities

e. Capital appreciation

f. Risk factors and

g. Implication of taxes etc.


b)

The capital requirements for: Solo ConsolidatedTaka in Crore

� Interest rate risk 67.06 67.06 � Equity position risk 4.77 18.75 � Foreign exchange risk and 4.71 4.71 � Commodity risk - -

Total Capital Requirement 76.54 90.53

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8. Operational Risk:

Q u a l i t a t i v e disclosure

a)i) Views of BOD on system to reduce Operational Risk

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk but excludes strategic and reputation risk. It is inherent in every business organization and covers a wide spectrum of issues. The Board of Directors (BOD) of the Bank and its Management firmly believe that an effective internal control systems has been established within the Bank to ensure adequacy of the risk management framework and compliance with a documented set of internal policies concerning the risk management system which mainly include,

# Top-level reviews of the Bank's progress towards the stated objectives;# Checking for compliance with management controls;# Policies, processes and procedures concerning the review, treatment and resolution of non-compliance issues; and# A system of documented approvals and authorizations to ensure accountability to the appropriate level of management.

Bank has ensured some other internal practices to be in place as appropriate to control operational risk. Examples of these include:

# Close monitoring of adherence to assigned risk limits or thresholds;# Maintaining safeguards for access to, and use of, bank’s assets and records;# Ensuring that staffs have appropriate expertise and training;# Regular verification and reconciliation of transactions and accounts.

The BOD has modified Bank’s operational risk management process by issuing a high level standard like SOP, supplemented by more detailed formal guidance. This explains how the bank manages operational risk by identifying, assessing, monitoring, controlling and mitigating the risk, rectifying operational risk events, and implementing any additional procedures required for compliance with local regulatory requirements.

The Bank maintains and tests contingency facilities to support operations in the event of disasters. Additional reviews and tests are conducted in the event that any branch of the bank is affected by a business disruption event, to incorporate lessons learned in the operational recovery from those circumstances. Plans have been prepared for the continued operation of the bank’s business, with reduced staffing levels.

ii) Performance gap of executives and staffs.

Human Resources

People: The Prime Assets! Prime Bank Limited has a favourable image as an employer of choice. The Bank has positioned itself with a performance-driven rewarding work culture; where employees are treated with respect and receive widened opportunities to realize their diverse potentials fully as well as benefit the organization by demonstrating value creating behaviours. A group of motivated and engaged employees with diverse talents are one of the strengths of Prime Bank.

Prime Bank has a special focus on converting the human resources into the human capital, i.e., ‘knowledge, competency, attitude and behaviour embedded in employees’.

Manpower Planning and RecruitmentThe recruitment and selection of Prime Bank follows the ‘best fit’ approach. As per Bank’s requirement, Human Resources Division ensures that the potential candidates are properly assessed, selected and placed on-time as per required competencies (KSA – Knowledge, Skill & Attributes) and experience.

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Prime Bank has a recruitment policy that clearly states the criteria and procedures to recruit fresh and lateral entrants.

The Bank has a Management Trainee Program which is aimed to recruit outstanding fresh graduates and develop them as the future leaders of Prime Bank Ltd.

In 2014, the Bank selected a total of 176 fresh candidates as Management Trainees from a pool of 28,567 applicants after multiple written tests and interviews.

Diversity in WorkplacePrime Bank believes that diverse, heterogeneous teams generate greater creativity, innovation and business development. Prime Bank is aware of the fact that an inclusive culture maintains and drives workforce diversity by fostering the exchange of ideas and collaboration among individuals and across groups. To speak simply, the constant success of PBL depends in part on maintaining a plurality of perspectives.

No. of employees by age group and gender:

Age group No. of Emp. Percentage Gender No. of Emp.

Below 30 yrs 605 21.10%Male 431 Female 174

30 - 40 yrs 1,668 58.18%Male 1,305 Female 363

40 - 50 yrs 466 16.25%Male 409 Female 57

50 years and above 128 4.46%Male 120 Female 8

2,867 100% Total 2,867

PBL practices equal employment opportunity for competent candidates regardless of their gender, age, locality or ethnicity. While recruiting fresh graduates, PBL source the pool from different recognized public and private universities; with a view to creating a diverse work force.

Besides, the ration of male and female employees has been increasing over the time. Currently, approximately 21.00% of employees are female.

Gender diversity among employees:

Gender No. of Members PercentageMale 2,265 79.00%Female 602 21.00%Total 2,867 100%

Increasing ratio of Female over the years:

Year Female Ratio2011 18.59%2012 19.77%2013 20.48%2014 21.00%

The ration of male and female employees has been increasing over the time. Currently, approximately 602 of the employees are female. PBL is gradually encouraging the women to take up leadership opportunity which will ensure a more balanced work force.

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Learning & DevelopmentPrime Bank continuously thrives to transform Human Resources to Human Capital through appropriate learning and development initiatives in every aspects of work area. HR Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment. The ‘Management Trainee Development Program’ of Prime Bank is designed for newly recruited Management Trainees (MTs) who receive job rotation across the country and different functions in a structured process. This effectively designed program provides ample opportunities to acquire necessary knowledge, skills and on-the-job-experience. All the MTs who were recruited in 2014 are going through the development program.

In 2014, Prime Bank’s internal HR Training and Development Centre arranged training on 62 different topics for 4,370 enthusiastic participants. Besides, a total of 644 employees were sent to participate in various training programs/conferences in home and abroad. In total, the number of participants who participated in trainings/conferences has increased by 48% over the last year. The whole capacity building efforts is pivoted on the unique understanding of banking sector as well as required behavioural skills to create a group of competent professionals with strong leadership skill. The banking sector is complex and diverse with evolving nature of threats and the risks. So, the training module is updated time to time for employees of the Bank in the changing context of financial market.

Compensation & BenefitsPrime Bank has a flexible compensation and benefits system that helps to ensure pay equity, is linked with performance that is understood by employees, and keeps in touch with employee desires and what’s coveted in the market, while maintaining a balance with the business affordability. The compensation and benefits are regularly reviewed through market and peer group study. The well-crafted total rewards help the Bank to attract, motivate and retain talent that produces desired business results.


Other than monthly competitive base pay and a good number of allowances, Prime Bank has variety of market-competitive benefits schemes. The various cash and non-cash benefits include: Company car for Top Level Executives, Car maintenance allowance, Leave fair assistance allowance, Medical treatment allowance, Maternity benefits, Car loan facility, House loan facility, Staff loan at discounted interest rate, House furnishing allowance, Travel allowance, Festival bonus, Annual leave etc.

PBL also provides long-term as well as retirement benefits to employees, like: Leave encashment, Provident fund, Gratuity benefit, Retirement benefit, Partial and full disability benefit, Death benefit to family members etc.

Career Progression & Succession PlanningPBL always plans for employees so that they can advance their career goals. This includes advancement into more responsible positions. The company supports career opportunities internally so that talented employees are placed in upgraded positions and thereby enables them to deliver their greatest value to the organization.

In addition to vertical career growth, employees may also grow horizontally. Whenever possible, Human Resources Division mobilizes employees across different functions and branches; thus assisting them to progress with varied skills and experience.

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Besides encouraging individual employee growth and development, the Bank also gives effort to identify and retain the human resources who can potentially be the successors of mission critical roles. Prime Bank acknowledges that Succession Planning & Management is vital to the continued success of the Bank. So, the Bank continuously assesses organizational, divisional and team capability gaps to identify, develop and retain the successors in a timely manner to meet the demands of the future.

Performance Management Program Prime Bank has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. The performance evaluation is a step by step by process where an employee first rates himself/herself. Then s/he is rated by the first level supervisor and then finally by the second level supervisor. To ensure a proper performance evaluation and rate the employees based on their comparative performance, the line Management is guided by the Human Resources Division. This performance appraisal system is considered as crucial for the Bank as this is a very important tool to identify and distinguish the performers and non-performers. Prime Bank believes that a well-executed performance appraisal system can help to reward the deserving employees, as well as help to ensure further development program for the rest. The comprehensive performance management also includes an assessment of employees’ functional and leadership competencies. This appraisal process helps to identify the competency gap and training needs of employees. All permanent employees of PBL undergo annual performance appraisal process.

Reward & Recognition ProgramThe Bank has a well-designed Reward & Recognition program that gives special attention to employees’ actions, efforts, behaviour and performance. It meets the intrinsic psychological need for appreciation of employees’ efforts and supports business strategy by reinforcing certain behaviours (e.g., extraordinary accomplishments) that contribute to Bank’s success.

Followings are the different cash and non-cash awards given to employees for their exemplary works:

� The Chairman’s Star of the Stars Award (CSS)

� CEO’s Banker with Exceptional Service Traits Award (BEST)

� Outstanding Recovery Initiative Award (ORI)

� Commendable Branch Performance Award (CBPA)

� Trainees with Outstanding Performance Award (TOP)

� Around the Year Appreciation Award (AAA) etc.Decent WorkplacePBL believes that the business can grow favorably if the organization enables employees through creating and maintaining a decent workplace. In PBL, there is a decent work environment where employees can work with dignity, have the freedom to express opinions, can participate in the decision making process that affect their lives, and receive equal treatment and opportunity. PBL ensures security in the workplace and social protection for employees’ families, better prospects for their personal development and social integration.

Code of Ethics and Business ConductPrime Bank is always committed to establish the highest level of business compliance and ethical standard. The Bank has an ‘Employee Code of Ethics and Business Conduct’ – a framework of ethical behaviour for all the employees of the organization.

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Prime Bank maintains its reputation as a law-abiding organization and a good corporate citizen. It complies with all the prevailing laws and regulations of the country. Employees are trained and guided to conduct business in compliant manner. The policy and procedures regarding Prime Bank’s business process are prepared in adherence to the laws and regulations.

All employees are properly inducted to comply with Code of Ethics and conform to the relevant laws and regulations. HR Division makes sure that during joining employees read, understand the ‘Code of Ethics and Business Conduct’ and acknowledge the same by signing.

The Board of Directors of Prime Bank approved the ‘Employee Code of Ethics and Business Compliance’ with a commitment to set the high ethical standards so that customers’ expectations and interests are protected in a compliant manner. Employees are encouraged to report any wrong-doing within the Bank. The Head of Internal Control and Compliance and Human Resources Divisions are the primary channel to report any incident.

Openness in communication to foster the exchange of knowledge and ideasPrime Bank promotes, recognizes and executes great ideas. This is possible because the Bank encourages knowledge sharing, open house discussions, employee-management meets, etc. Employee communications and consultation are the lifeblood of any business. Proper exchange of information and instructions help the Bank to function efficiently and provides the opportunity to develop greater trust in discussing issues of mutual interest. To ensure effective employee communications, management takes a positive lead. In addition to day to day regular communication, Prime Bank arranges Regional Town Hall Conference, Managers’ Conference etc. to allow employees with the opportunity to interact with the Management and Board of Directors. This helps to build an improved management-employee relation.

Achievements of 2014The relentless pursuit of HR Division continues throughout the year. Furthermore, it aims to ensure excellence in all HR policies and practices in line with the mission and vision of the Bank. Followings are some of the mentionable activities done in the year 2014:

� Phase wise implementation of HR Plans and Programs

� Prepared a comprehensive MT development program and completed its implementation

� Developed several automation projects including Performance Appraisal System to enhance employee efficiency

� Initiated and developed Broad banding pay structure policy for employees to attract, motivate and retain performers

Prime Bank is moving forward with the transformational initiatives in order to grow up with the challenge of tapping opportunities to meet both organizational and employee needs. The transformational phase started with introducing HR as “Strategic Business Partner” which already generated value in people & process management. Prime Bank is working to ensure an employee centric work culture with automated HR services & delivery and with focused skill development for employees. In coming days HR will pursue solid contemporary thoughts and action plans to draw results in many fronts as the Change Agent for Employee & Business Development. Followings are some of the future priorities of HR Division:

� Improve the overall performance management process and ensure a performance based work culture

� Review, Update, Document & Rollout Job Description, Key Performance Indicator (KPI) for employees

� Review HR Policies & Procedures and communicate to employees

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� Talent Management Program

� Skill Gap Assessment and develop Performance Improvement Plan (PIP) for the employees

� Work on Employer Branding & Employee Relations Initiatives

� Under development phase: TA/DA policy, employee Code of Ethics and Anti-Harassment Policy, MAT Policy, Review of Leave Policy, Service Rule Book Update etc.

Human Resources Accounting in PBL: To understand and draw an inference on how well the Human Resources are yielding on the investment made, Prime Bank tracks the profit and related HR costs. In this process, the costs of recruitment, training, compensation other direct cost related to employees are measured to estimate the overall investment. The costs are then compared with several parameters. This analysis helps the Bank to have an outlook and make prudent decisions on future HR investment. Valuing the human resources and measuring the direct impact of the cost spent for employees is difficult as there is no specific or widely adopted method. Human Resources accounting is the process of valuing human resources as assets. Presently, this is not accounted in the conventional accounting practices. The period of existence of a set of human resources in an organization cannot be predicted; hence treating and valuing them as assets in strict sense is not plausible. However, Followings are some of the parameters which are tracked year on year.

(Taka in Million)

Particulars 2014 2013Salary cost per employee 1.15 1.08Operating cost per employee 2.01 1.99Operating income per employee 4.18 4.75Profit before provision per employee 2.17 2.76Profit before tax per employee 1.27 1.27Salary cost as percentage of operating cost 57.09 54.55Salary cost as percentage of operating income 27.48 22.90

iii) Potential external events

Risk factors/Potential external events:It is needless to say that there are certain risk factors which are external in nature and can affect the business of the Bank. The factors discussed below can significantly affect the business:

� General business and political condition

Performance of Prime Bank greatly depends on the general economic conditions of the country. The effect of ongoing political unrest is decrease in bank’s loan exposures. Many factors like blockade, violence and seasonal effects are responsible for fall in credit. Political stability is the main precondition to attract private sector investment which directly linked with the credit growth of commercial banks.

� Changes in credit quality of borrowers

Risk of deterioration of credit quality of borrowers is inherent in banking business. This could result due to global economic crisis and supply side distortion. The changes in the import prices affected the commodity sectors and ship breaking industry. Deterioration in credit quality requires provisioning.

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� Changes in policies and practices of regulatory bodies to revise practices, pricing and responsibilities of the financial institutions

PBL is subject to regulations and compliance of regulation is must. Changes in policies with regard to interest rates, pricing have significant effect on the performance of the Bank. Bangladesh Bank is expected to continue its persuasion to reduce the spread and charges further which is likely to affect the performance. Changes in provisioning requirement will also affect the performance of the bank.

� Implementation of Basel-III in Bangladesh

After finding numerous weaknesses in the global regulatory framework and in banks’ risk management practices, the regulatory authorities have focused on streamlining the global capital and liquidity rules (Basel III) with a view to improving and strengthening the banking sector’s ability to absorb shocks arising from financial and economic stress. People directly or indirectly involved in the financial services industry need to be aware about the changes in the Capital and Liquidity Adequacy Requirements published in December 2010 and later in March 2013 as a supplement. The Basel Committee on Banking Supervision (BCBS) termed the new framework as Basel III: A global regulatory framework for more resilient banks and banking systems. The two new liquidity ratios - the short-term Liquidity Coverage Ratio (LCR) and the longer-term Net Stable Funding Ratio (NSFR)-speak of the need for banks to increase their high-quality liquid assets and obtain more stable sources of funding while requiring them to adhere to sound principles of liquidity risk management.

� Volatility in equity market

The Bangladesh Securities and Exchange Commission and the stock exchanges improved their supervisory role but the equity market is still volatile. The ongoing political unrest has also added to the volatility. If volatility continues it is likely to affect the performance of the Bank.

� Changes in market conditions

Changes in market conditions particularly interest rates on deposits and volatility in Foreign Exchange market is likely to affect the performance of the Bank. Depositors are becoming increasingly price sensitive and any unilateral upward change by a bank will exert pressure on interest rate structure of the banking sector. It is feared that wage earners remittances may decline due to fall in job opportunity in international market. Unless offset by export performances, there may be pressure in the Foreign Exchange market.

� The risk of litigation

In the ordinary course of business, legal actions, claims by and against the bank may arise. The outcome of such litigation may affect the financial performance of the Bank.

� Success of strategies

PBL is proceeding with its strategic plan and its successful implementation is very important for its financial performance. Major deviation due to external and internal factors will affect the performance of the Bank.

iv) Policies and processes for mitigating operational risk.

Prime Bank limited (PBL) has formed a separate ‘Risk Management Division’ under Chief Risk Officer to ensure following things:

� Designing of organizational structure by clearly defining roles and responsibilities of individuals involved in risk taking as well as managing it;


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� Formulation of overall risk assessment and management policies, methodologies, guidelines and procedures for risk identification, risk measurement, risk monitoring, defining an acceptable level of risk, mitigation of all the core risks in line with their respective guidelines provided by Bangladesh Bank;

� Reviewing and updating all risks on systematic basis as necessary at least annually, preferably twice a year, ensuring that adequate controls exist and that the related returns reflect these risks and the capital allocated to support them. The main risk areas will be (i) Balance sheet Risk Management, (ii) Credit Risk, (iii) Foreign Exchange Risk, (iv) Internal Control and Compliance Risk, (v) Money Laundering Risk and (vi) IT Risk. The following risks are also being reviewed:

� Operational Risk

� Market Risk

� Liquidity Risk

� Reputation risk

� Insurance Risk

� Sustainability Risk

� Setting the portfolio objectives and tolerance limits/parameters for each of the risks;

� Formulation of strategies and different models in consistency with risk management policy based on IT Policy and in house IT support which can measure, monitor and maintain acceptable risk levels of the Bank;

� Development of information systems/MIS inflow and data management capabilities to support the risk management functions of the Bank.

� Ensure compliance with the core risks management guidelines at the department level, and at the desk level;

� The unit will work under bank’s organizational structure and suggest to the CEO to take appropriate measures to overcome any existing and potential financial crisis;

� Analysis of self resilience capability of the Bank;

� Initiation to measure different market conditions, vulnerability in investing in different sectors;

� The unit will also work for substantiality of capital to absorb the associated risk in banking operation.

Activities undertaken by “Risk Management Division” since inception and recent approaches

� Risk Management in Prime Bank as it is now, is comparatively new. Risk Management Division (RMD) started its journey in September 2012. There is also a Risk Management Unit (RMU) consisting of related Divisional Heads. Risk Management Committee (RMC) of the Board also formed in year 2013;

� The primary objective of RMD is to develop and execute plans that protect people, assets, earnings, reputation, resiliency and market share, to support the strategic and operational objectives of the organization, to minimize long-term cost of risk while doing all of those wonderful things.

� Risk Management Division of PBL is currently arranging monthly meeting on various issues to determine strategies in consistency with risk management policy, which can measure, monitor, and maintain acceptable risk level of the bank. Minutes of each meeting is submitted to Bangladesh Bank on quarterly basis;

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� RMD looks after Capital Management, Credit Risk, Market Risk (Foreign Exchange Risk, Interest Rate Risk, and Equity Risk), Liquidity Risk, Operational Risk (Internal Control & Compliance Risk, Reputation Risk, and Money Laundering Risk), and Strategic Risk. In addition, as a part of Internal Capital Adequacy Assessment Process (ICAAP), RMD also looks after Residual Risk, Concentration Risk, Settlement Risk, and Environmental & Climate Change Risk.

� RMD analyzes the overall portfolio of the Bank through Risk Management Paper, Stress Testing and ICAAP. RMD is also engaged in preparation of efficient Management Information System (MIS) report for the higher management and for the Risk Management Committee of the Board. RMD also prepares quarterly Stress Testing report, Capital Relief calculation and monitors yearly capital adequacy through ICAAP report.

Stress Testing in PBL:Stress testing framework as provided by Bangladesh Bank assesses the impact on CAR due to minor, moderate and major level of shock in terms of credit risk, exchange rate risk, liquidity risk, equity price risk and interest rate risk. Stress testing for credit risk assesses the impact of increase in the level of Non-Performing Loans (NPLs) of the banks for the following scenario - � Performing loan directly downgraded to B/L- Sectoral Concentration 1

� Performing loan directly downgraded to B/L- Sectoral Concentration 2

� Increase in NPLs due to default of top large loan borrowers

� Negative shift in NPLs categories

� Decrease in the Forced Sale Value (FSV) of the collateral

The stress testing based on the financial performance of the Bank as on December 31, 2014 has also been completed which shows that the bank has adequate capital to absorb minor level of shocks for combined shock. However, for absorbing moderate and major levels of shock which is very unlikely in the industry, the bank may require additional capital.

v) Approach for calculating capital charge for operational risk.

The Banks operating in Bangladesh shall compute the capital requirements for operational risk under the Basic Indicator Approach (BIA). Under BIA, the capital charge for operational risk is a fixed percentage, denoted by ‘α (alpha)’ of average positive annual gross income of the bank over the past three years. Figures for any year in which annual gross income is negative or zero, should be excluded from both the numerator and denominator when calculating the average. The capital charge may be expressed as follows:

K = [(GI 1 + GI2 + GI3) a]/nWhere-K = the capital charge under the Basic Indicator ApproachGI = only positive annual gross income over the previous three years (i.e., negative or zero gross income if any shall be excluded)a = 15 percentn = number of the previous three years for which gross income is positive.Gross income: Gross Income (GI) is defined as “Net Interest Income” plus “Net non-Interest Income”. It is intended that this measure should:i) be gross of any provisions;ii) be gross of operating expenses, including fees paid to outsourcing service providers;iii) exclude realized profits/losses from the sale of securities held to maturity in the banking book;iv) exclude extraordinary or irregular items;v) exclude income derived from insurance.


ParticularsSolo Basis Consolidated

Taka in Crore

b) The capital requirement for operational risk 205.03 214.68

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O T H E R I N F O R M A T I O N

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Awards andRecognition

ICAB National Awards for Best Published Accounts and Reports

2002 – Diamond (Financial Sector)

Financial News Services (FNS) Award 2005 – Best Performing

Local Bank

8th ICAB National Awards for Best Published Accounts and

Reports 2007 – 1st Prize in Financial Sector: Banking

ICAB National Awards 2003 for Best Published Accounts and

Reports– 2nd Prize in Financial Sector (Banking)

Financial Institution Award - 10 years of Service

SAFA Best Presented Accounts Awards 2007 – Bronze Award

(Banking Sector)

6th ICAB National Awards 2005 for Best Published Accounts and

Reports– 1st Prize in Financial Sector (Banking)


Reports 2006 – 1st Prize in Financial Sector (Banking)

ICMAB National Best Corporate Award 2007 – 2nd Position in

Local Banks

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Reports 2008 – 1st Prize in Financial Sector- Banking


Reports 2009- First (Category: Banking Sector)

ICMAB Best Corporate Performance Award 2009 – 1st

Position (Jointly)

SAFA Best Presented Accounts Awards 2008 – Joint Winner

(Under Banking Financial Sector)

SAFA Best Presented Accounts Award 2009 – Overall Winner


Reports 2010 – 1st Prize in Financial Sector: Banking

10th ICAB National Awards for Best Published Accounts and Reports 2009- Winner

(Category: Corporate Governance Disclosures)

SAFA Best Presented Accounts and Corporate Governance

Disclosures Awards 2009 –Winner in Banking Sector

Subject to Prudential Supervision

SAFA Best Presented Accounts Awards 2010 – Winner - Joint

(Banking Sector)

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ICMAB Best Corporate Award 2010 – 1st Prize

SAFA Best Presented Annual Report Awards and SAARC

Anniversary Award for Corporate Governance Disclosures 2011 –

Overall 1st Runner Up

13th ICAB National Awards for Best Presented Annual Report

2012 – 2nd Prize in Private Sector Banks (including Co-

operative Banks)

Bangladesh Business Awards 2011 – DHL – The Daily Star

12th ICAB National Awards for Best Published Accounts and Reports 2011 – 1st Position in

Private Sector Banks


2012 – 3rd Prize in SAARC Anniversary Award for Corporate

Governance


Anniversary Awards for Corporate Governance

Disclosures 2011 – Winner in Private Sector Banks (including

Co-operative Banks)

International Star for Leader in Quality (ISLQ) Award, France

ICMAB Best Corporate Award 2012 – 1st Position in Private

Commercial Banks (Traditional Operation)

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The Industry 2012 – Best Rated Bank Award

International Platinum Star for Quality Award 2012

SAFA SAARC Anniversary Awards for Corporate

Governance Disclosures 2013 – Winner

Industry Best Rated Bank Award 2012 – Awarded as Strongest

Bank


Anniversary Awards for Corporate Governance Disclosures 2012 –

Runner-Up in Private Sector Banks (including Co-operative Banks)


2013 – 3rd Prize Corporate Governance Disclosure

The Bizz 2012 – Inspirational Company Award


Anniversary Award for Corporate Governance Disclosures 2012 –

Certificate of Merit for Corporate Governance


2013 – 1st Prize in Private Sector Banks (including Co-operative

Banks)

179

Best Bank of Bangladesh by Global Survey (Best Emerging

Market Bank in Asia) – 2013

SAFA Best Presented Accounts Award – 3rd Position


Anniversary Awards for Corporate Governance

Disclosures 2013 – 2nd Runner up in Private Sector Banks

(including Co-operative Banks)

ICMAB Best Corporate Award 2013 – 1st Position in Private

Commercial Banks (Traditional Operation)

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Mediahighlights

182


Product andServices

Local Currency Deposit Accounts

Current DepositSavings Deposit

Short Term DepositMy First Account

Female Account ‘Sukonna’Prime Payroll Account

Security Deposit ReceiptDeposit under Scheme:

Double Benefit Deposit SchemeMonthly Benefit Deposit SchemeHouse Building Deposit Scheme

Education Savings SchemeLakhopati Deposit SchemePrime Millionaire Scheme

Contributory Savings SchemeLaksmapuron Savings SchemeAccount 150% Deposit Scheme

Nobagoto AccountBrighter Tomorrow

Premium Banking “Monarch”

Al-Wadeeah Current Account (AWCA)Mudaraba Savings Account (MSA)

Mudaraba Special Notice Deposit (MSND)Mudaraba Term Deposit Receipt (MTDR)

MudarabaSukonna Deposit AccountMudaraba My First Account

Mudaraba Special Saving Scheme Deposit:Mudaraba Double Benefit Deposit Scheme (MDBDS)

Mudaraba Contributory Savings Scheme (MCSS)Mudaraba Education Savings Scheme (MESS)

Mudaraba Hajj Savings Scheme (MHSS)Mudaraba Monthly Benefit Deposit Scheme (MMBDS)

MudarabaLakhpati Deposit Scheme (MLDS)Mudaraba Millionaire Deposit Scheme (MMDS)

Mudaraba House Building Deposit Scheme (MHBDS)MudarabaLaksmaPuron Savings Scheme (MLPSS)

Mudaraba 150% Deposit SchemeMudaraba Cash waqf Deposit Scheme

Mudaraba Brighter Tomorrow Deposit Scheme

Conventional Banking Islamic Banking

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NRB Banking

ATM/Proprietary/Prepaid Cards:

Value Added Services

Treasury

Fund Transfer

Other Services

Foreign RemittanceWeb-based Instant Cash Remittance

TT RemittanceWire Transfer Remittance (SWIFT)

DD RemittanceInvestment Bond for NRBs

Wage Earner’s Development BondUS Dollar Investment Bond

US Dollar Premium BondAccount Facilities for NRBs:

Foreign Currency AccountNon-Resident Foreign Currency Deposit Account

Non-Resident Taka AccountNon-Resident Investors Taka Account

Prime NFCD Account

Proprietary Debit CardDebit MasterCard

Prime Cash (Bio-Metric Smart Card)Prepaid Card Service

JCB Debit Card (Up Coming)Monarch Dual Currency Debit Card (Up Coming)

Locker ServicesSenior Citizen Scheme

Insurance Coverage Deposit Scheme

Forex & Fund Management:SPOT, Forward & SWAPSImport/Export Financing

Call Money, Term Lending & BorrowingInvestment in Corporate Debenture and Bonds

Primary Dealer:Treasury Bill

Treasury BondsREPOs

Reverse REPOs

Inter-Branch Money TransferSWIFT

Issuing and Encashing Foreign DraftsElectronic Fund Transfer (BEFTN)

Bangladesh Automated Cheque Processing System (BACPS)

ALTITUDE Internet BankingSMS Banking

Phone BankingInformation Kiosk

Utility Bills Pay ServiceCash Back Service

Prime PMI (Pay in monthly installment) Facility

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Loans and Advances

Corporate Banking

Agriculture Banking

Retail Banking

Islamic Banking

Cash CreditLoan GeneralLease FinanceHire Purchase

House Building Loan – Commercial/ResidentialOD (General)

Letters of CreditLetter of Credit – SightLetter of Credit – Deferred

Back to Back L/CStand-by letter of credit (SBLC)

UPAS L/CPayment Against Document (PAD)/Packing

Credit(PC)/Export Cash Credit (ECC)Foreign Document Bill Purchase (FDBP)

Inland Documentary Bills Purchased (IDBP)EDF Loan

Loan Against Imported Merchandize (LIM)Letter of Trust Receipt (LTR)

Payment Against Documents (PAD)Secured Overdraft (SOD)

Time LoanLetters of Guarantee

Advance Payments GuaranteeBid Bond

Performance BondPayment Bond

Custom GuaranteeRetention Money Guarantee

Shipping GuaranteeGuarantee – Others

Abad (Crop Loan)Khamar (Farm/Non-Crop

Loan)Nabanno (for any Agri-

purpose Loan)

SwapnaNeer Home LoanSwapnaShaj Home Loan

SwapnaPuron Home LoanAbash Home Loan

Car LoanAny Purpose Loan

CNG Conversion LoanDoctor’s LoanMarriage Loan

Travel LoanHousehold Durables Loan

Education LoanHospitalization LoanLoan against Salary

Carnival Loan

Bai-MurabahaBai-MuajjalBai-Salam

IzarahHire Purchase under ShirkatulMelk

MusharakaMudarabaSchemes

Hasanah Medical Investment (Shifa)Hasanah Home Investment (Manjeel)

Hasanah Auto Investment (Burak)Hasanah Household Durables Investment (Asbab)

SME Banking

SahajRin (Easy Loan)SampadRin (Capital Loan)

ChaltiRin (Working Capital Loan)MoushamiRin (Seasonal Loan)

DigunRin (Double Loan)Anchol (Women Entrepreneur’s Loan)

Prodip LoanSrijon Loan

Prime Subidha

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Credit Cards

Credit Cards:Platinum Dual Credit Card (MasterCard & VISA)

Gold Dual Credit Card (MasterCard & VISA)Silver/Classic Local/Int’l Credit Card ((MasterCard & VISA)

Travel Quota International Credit Card (MasterCard & VISA)RFCD International Credit Card (MasterCard & VISA)ERQ International Credit Card (MasterCard & VISA)FC International Credit Card (MasterCard & VISA)Hasanah Credit Card (VISA Platinum & VISA Gold)

Hajj Prepaid Card (MasterCard)Reward Card (MasterCard)

JCB Credit Card (Gold & Classic)

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S U S T A I N A B I L I T Y R E P O R T 2 0 1 4

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ORGANIZATIONAL PROFILE G4-5

Prime Bank Limited was incorporated as a public company in Bangladesh under Companies Act 1994 with the registered office of the company at 119-120, Adamjee Court Annex-2, Motijheel C/A, Dhaka-1000. The Bank currently operates in 4 countries, and they are Bangladesh, Singapore, Hong Kong and the United Kingdom.

The following facts are for the year 2014:

Total Number of employees

2,867

Total Number of operations

Operations are in 4 countries

Net Revenue 11,906 million BDTAny significant variations in employment number

No significant variation in the year 2014.

Percentage of employees covered by collective bargaining agreements

No employees are covered by collective bargaining, as it does not exist in the banking industry.

The precautionary principle is not applied directly or openly throughout the organization; instead PBL assesses loans regarding their impact on the environment or other social factors. The bank has a lot of Corporate Social Responsibility (CSR) events throughout the year, and always tries to help preserve the environment and enhance communities throughout the entire country. Hence, Prime Bank Limited takes into environmental and social factors and not only economic factors when it does business with clients. In its business activity, Prime Bank cooperates with numerous entities as the buyer of products and services from many market segments. The Bank’s Facility Management Division formalizes the procurement procedure,including the selection of suppliers, who are nominated in tenders.The measures for choosing suppliers in the tender process include: good ratio of quality to cost of the services or products and the terms of delivery and payment. The bidder’s functional capabilities and financial dependability are also taken into account. In necessary cases, the Bank also includes environmental and social factors among the features that affect its selection of suppliers. The execution of agreements of significance for the Bank is supervised. The quality and timeliness of services and goods and financial positioning of the suppliers are also evaluated.

List of Memberships1. Bangladesh Association of Banks

2. Metropolitan Chamber of Commerce and Industry

3. Bangladesh Institute of Bank Management

4. Central Shariah Board for Islamic Banks of Bangladesh

5. Canada Bangladesh Chamber of Commerce and Industry

6. The Institute of Bankers, Bangladesh(IBB)

7. International Chamber of Commerce-Bangladesh

8. Association of Bankers, Bangladesh Limited(ABB)

9. Bangladesh Foreign Exchange Dealers Association (BAFEDA)

10. Bangladesh Association of Publicly Listed Company

11. Primary Dealers Bangladesh Limited (PDBL)

12. Dhaka Stock Exchange Ltd.

13. Chittagong Stock Exchange Ltd.

14. American Chamber of Commerce in Bangladesh

15. Islamic Banks Consultative Forum IBCF

16. Japan Bangladesh Chamber of Commerce and Industry

17. Central Depository Bangladesh Limited

18. Gulshan Club

19. Dhaka Club

20. Kurmitola Golf Club

IDENTIFIED MATERIAL ASPECTS AND BOUNDA-RIESPrime Bank Limited has reported on GRI 3.1 last year, and in 2014 is taking a step forward and is reporting on GRI G4. With regards to this year’s Sustainability Report, the report describes all activities of the Bank in Bangladesh, and does not address its subsidiaries (both locally and internationally). Also, the Sustainability Report mostly focuses on the operations of the head office and sometimes in its branches as well. When the report is only mentioned for head office, it is clearly stated in the report.

WHY IS SUSTAINABILITY REPORTING IMPOR-TANT TO US?Sustainability rests in the heart of PBL’s business, and we trust in being a good corporate citizen in the communities we operate in. To attain this objective, we take a long-term strategic view of our business and markets. Our strategy propels our sustainability framework, which aids us to concentrate on the core areas to administer a sustainable business and fulfil our obligations towards our stakeholders. We understand that to be a truly sustainable company, business strategy must emphasis, not just on attaining sustained financial growth and operational excellence, but also on constructing a

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strong corporate governance and financial controls environment. In addition, we believe that we must assist our customers and communities with passion and commitment, whilst safeguarding the environment for future generations and supporting communities that makes us who we are. We are persistently concentrated on inspiring people, facilitating success and improving lives of our customers and those in the broader community. As part of achieving our responsibilities to all our stakeholders, we believe that we can make a contribution to protecting the future generation to come by building our communities and environment a sustainable place to live.

AT PRIME BANK LIMITED, WE INSPIRE PEOPLE, FACILITATE SUCCESS, AND IMPROVE LIVES

At PBL, our activities revolve around our goal of “Inspiring People, Facilitating Success, and Improving Lives”. This report details the efforts undertaken by PBL on social, economic and environmental fronts towards protecting the future of our stakeholders. At PBL, we believe in being the leaders in what we do and meeting the highest standards. In line with this philosophy, we have prepared this report based on the G4 Sustainability Reporting Guidelines and Implementation Manual. Our self-assessment against the G4 guidelines is provided towards the end of the report. No external assurance has been taken for preparing this report.

Entities included in the annual report and sustainability reportG4-17

The entities that have been included in the annual

report are Prime Bank Limited and all its subsidiaries. For the context of the sustainability report, Prime Bank’s branches and Head Office have been considered in most cases, exceptions have been stated otherwise. The reasons for omission of its subsidiaries are the fact that they are very small in operation and do not materially affect the bank’s activities anyhow. So in regard to this report, only Prime Bank (Branches and Head Office) are taken into consideration.

Scope and framework of the reportThe report contains the social, economic and environmental initiatives. The various aspects mentioned in the G4 guidelines and sector specific guidelines were evaluated and considered material based on their significance to our business operations and to our stakeholders in accordance with the G4 Reporting Guidelines and Implementation Manual issued by GRI.

Defining Report Content and the Aspect BoundariesG4-18

An external analysis was taken out to categorize general matters of the most interest. Relevant information available from the internet was used and an initial priority was ascertained based on a comparative study of the sector. Subsequently, the consequences that the selected topics have for the various stakeholders were clarified.An internal analysis was then executed to distinguish the importance that PBL placed on each of the above issues. In this connection, the Bank’s strategic lines were reviewed together with relevant internal information and internal dialogues were held with the various divisions involved in the development of the identified issues.

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1. Promotion of financial independence for customers (Supplying information, products and tools, independently tailored service and consulting, and financial education)

2. Customer diversity and promotion of sectors within the Bangladesh economy

(Advancement of small and medium-sized organizations)

3. Attaining financial freedom in a multichannel world

(Banking services via Internet, mobile, and telephone, offering customers’ better access and increased control over financial management)

4. Serving a diverse range of clients

(Encouraging a perception of excellence in service to every customer segment)

5. Availability

(Making the buildings and branches of the bank as well as banking services reachable to people with disabilities)

6. Evolving products and services to encourage environmental sustainability

(Funding for ventures that encourage environmental causes)

7. Analysing environmental risks in financing (Supervision of environmental risks when giving finance)

11. Encouraging a culture of conversation and openness with employees

(Arrangement of channels for intra-organizational dialogue with employees)

12. Promoting diversity, equal opportunities, and clarity

(Promotion of gender and sector equality, prevention of discrimination, and promotion of diverse employment)

13. Personal development and training

(Arrangement of training and learning at the bank)

14. Supporting an appropriate work environment

(Policies on human capital, remuneration and benefits, and well-being and caring for employees in several aspects of the work environment and of their lives)

15. Power consumption management and energy efficiency

(Management of activities intended at lowering the bank’s consumption of energy)

16. Controlling of paper resources

(The bank’s determination to reduce the consumption of paper in its operations)

17. Decreasing environmental impacts

(Environmental management of the bank and reduction of its environmental effect)

18. Corporate governance and ethics

(Presentation of the composition and activity of the board of directors, and assimilating ethics at the bank)

19. Prevention of corruption and money laundering

(The bank’s assurance to the prevention of corruption, and presentation of the activity of the bank’s compliance unit)

8. Responsible supply chain management (Incorporating CSR and sustainability factors into procuring activities)

9. Growing our area of influence (Direct and indirect economic and social effects on the Bangladeshi economy and society)

10. Community action

(Spending in the community, as well as funding of community activities and donations)

LIST OF MATERIAL ASPECTS FOR SUSTAINABILITY REPORTING AT PRIME BANK LIMITEDG4-19

With regards to PBL, the material aspects represent four content areas (the best interests of the customer, empowering society and the community, employees’ quality of life and well being, and inhabiting with the environment), which describe impacts on all of the bank’s stakeholders. The material aspects for the sustainability report are listed below:

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Presentation of Material Aspects for the Report in Terms of Social, Economic, and Environmental ImpactsG4 20, 21

The following diagram presents all of the material aspects reported by Prime Bank based on two points of view: � Impact Zone – Internal or External- does this aspect

affect external stakeholders, internal stakeholders, or both (the external circle versus the internal circle in the diagram)

� Impact Zone – Social, Economic and Environmental- does this aspect affect create economic, social or environmental value, or a combined value.

Customers1. Promotion of financial independence for customers 2. Customer diversity and promotion of sectors within

the Bangladesh economy 3. Attaining financial freedom in a multichannel world 4. Serving a diverse range of clients5. Availability 6. Evolving products and services to encourage

environmental sustainability 7. Analysing environmental risks in financing

Community8. Responsible supply chain management 9. Growing our area of influence 10. Community action

Employees11. Encouraging a culture of conversation and

openness with employees 12. Promoting diversity, equal opportunities, and clarity13. Personal development and training 14. Supporting an appropriate work environment

Environment15. Power consumption management and energy

efficiency 16. Controlling of paper resources 17. Decreasing environmental impacts

Ethics18. Corporate governance and ethics 19. Prevention of corruption and money laundering

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STAKEHOLDERS ENGAGEMENT

ENGAGING OUR STAKEHOLDERSWe intend to form tangible relations with our stakeholders. This is why our reporting perception has transitioned from an operation-oriented approach to a stakeholder-focused one. Such a focus is one of the purposes why we have mapped the possible effect that we have on various stakeholder groups before conclusions are made.

We engage with our stakeholders in many ways and at many levels, from the queries that reach us via our website to face-to-face meetings with government officials and regulators, customers, employees, community groups and others. Whilst focus on certain issues such as access to finance and customer satisfaction have increased over the years, most of the topics that stakeholders view as significant have remained consistent.

Moving forward, we expect to have better coordinated discussions with our stakeholders. While the concerns of our various stakeholder groups do not always overlap with each other or with the business objectives of the company, dealing with such dilemmas is an everyday part of doing business.

STAKEHOLDER OVERVIEWG4-24

Stakeholder Group Their Concern Our Responsibilities

Shareholders and Analysts

� Dividends and share value � Performance and integrity of

the Board and management � Public goodwill and reputation

of the Bank

� Generate profits and ensure optimal return on investment

� Proper oversight and control of the Board and management

� Bank’s Code of Conduct, management oversight and response

� Public affairs management

Bangladesh Bank and other regulators

� Good corporate governance and business ethics

� Legal compliance � Support for government policy

� Develop and communicate a framework that promotes good governance and ethical behaviour at all levels

� Ensure compliance at all times � Providing timely and accurate information � Immediate response to queries made by authorities � Comply with rules and regulations

Customers

� Dealing with PBL is a positive experience

� Information provided by the Bank is accurate and reliable

� Customers’ privacy is assured � Promises to customers are kept

� Protect the privacy of our customers, including data protection and confidentiality

� Provide a positive customer experience � Comply with company values and Code of Conduct

Employees � Health, safety and well being

� Ensure that we properly safeguard those who work for us and those who may be affected by our operations

� Promoting and maintaining an amicable relationship with all employees

� Shape future leaders � Recognize exceptional performers � Ensuring all employees have a proper work life

balance � Investment on Human Resource Information

Systems

Society � Social Investment

� Do our part to improve the quality of life for all members of society

� Investment on citizens � Investing in entrepreneurs � Addressing rural youth � Empowering women � Encourage people for saving

Suppliers � Supply chain functions well � Supply chain is sustainable

� Work with suppliers to address issues in the supply chain

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FREQUENCY OF DIALOUGE WITH STAKEHOLDERSG4-26

Stakeholder Communication channels Frequency of dialogue

Shareholders and Analysts

General Meeting of ShareholdersConferencesMeetingsStock exchange and press releasesContact through Internet, e-mail and phone

Once a yearSeveral times a yearSeveral times a yearOngoingOngoing


Periodic MeetingsRegular ReportsE-MailPhone CallsWebsite

Several times a yearSeveral times a yearOngoingOngoingOngoing

Customers

BranchesWebsiteInformation on statementSatisfaction Surveys

On a daily basisOngoingSeveral times a yearMonthly/quarterly/yearly and ad hoc

Employees

IntranetWebsiteInternal MeetingsCorporate EventsE-mail

OngoingOngoingSeveral times a yearQuarterly/AnnuallyOngoing

Society

WebsiteCompetition and trainingConferences and seminarMeetings

OngoingAt least a dozen a yearAt least a dozen a yearSeveral times a year

Media

WebsitePress ConferencePress ReleaseTelephoneE-mail

OngoingSeveral times a yearSeveral times a yearOngoingOngoing

SuppliersPeriodic MeetingsPhone calls and emails

Several times a yearOngoing

STAKEHOLDERS ISSUES RAISED AND ACTIONS TAKENG4-27

Stakeholders Issues Raised Action Taken by PBL

ShareholdersTransparent activity, instant and effortless access to information concerning the Bank.

PBL ensures that the annual reports have been reported in the most transparent way possible. The bank ensures that there is efficient exchange of information through communication with shareholders.


Proper compliance with guidelines set by authorities.

Submitting reports on a timely basis according to guidelines.

VAT and tax calculations submitted accurately and timely

PBL thoroughly conform to all associated laws and regulations in all of its activities. PBL follows forums, conferences, and press news to ensure that the bank is up to date with all regulations. The bank closely observes developments related to the banking industry and present its opinions on legislation amendments to related authorities. PBL has always ensured all reports are submitted on a timely basis with utmost compliance.

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Employees

Steadiness of employment and professional growth opportunities, fair salary and bonuses and responding to requests submitted by employees.

PBL has an officially approved human resource policy with assessable goals that are observed regularly. The bank takes initiatives to research on employee needs, motivation and satisfaction. The HRD department also safeguards that various channels of contact exists among employees and management.

Customers

High quality of products and services offered,fair consumer practices,safety of deposited fund and ease of communication with the Bank.

PBL always tries to offer competitively priced products and superior quality services that are in line with the clients’ requirements. The bank uses techniques that ensure fair and secure management of client funds and also makes sure that there are frequent contacts with customers.

Suppliers

Unbiased rules for selecting and co-operating with suppliers.

Ensuring that payments are made on a timely basis.

PBL uses impartial procedures for selecting vendors. It also ensures timely performance of agreements from vendors. PBL has a formal procedure to make sure payments are made on a timely basis and also keeps constant contact with suppliers.

Society Supporting social projects.PBL provides financial funding for social projects with emphasis on co-operation with universities. PBL encourages employees to take part in social campaigns.

EnvironmentReducing the negative impact on the environment.

PBL continually monitors its impact on the environment and takes all measures to reduce the impact on the environment as much as possible.

MAPPING OF STAKEHOLDERS OF PRIME BANK LIMITEDG4-25

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COMMUNICATION CHANNEL AMONG STAKEHOLDERS OF PRIME BANK LIMITED

CORPORATE GOVERNANCEPrime Bank Limited has quite a few committees that help it to function accordingly. A few of the committees that are mentioned for the report are as follows:

Board of DirectorsPrime Bank obeyed with appropriate guidelines of Bangladesh Bank and Bangladesh Securities and Exchange Commission while establishing its board of directors. The numbers of Board members are 20 out of whom one is an Independent Director and two members are from the Depositors. All members of the Board of Directors are of high competency, with vast academic knowledge and professional experience in the field of business. The Board approves the Bank’s budget and business plans and evaluates those on a monthly basis as to give direction as per changing economic and market environment. The Board also appraises the strategies and manuals of several segments of businesses in order to establish effective risk management in credit and other key areas of operations.

Executive CommitteeAt PBL, the Board has an Executive Committee which consists of 7 members. The Executive Committee assesses policies and guidelines issued by Bangladesh Bank concerning credit and further operations of the banking industry. It ensures the implementation of the policies and guidelines through management. The Executive Committee accepts the credit proposals as per the accepted policies of the Board.

Audit CommitteeIn compliance with the guidelines of Bank Companies Act & BSEC directives, the Audit Committee has been functioning as a sub-committee of the Board of Directors with 5 members. The Audit Committee has been supporting the Board in safeguarding that the financial statements reflect a true and fair view of the state of concerns of the bank. It also carries out the oversight responsibilities for implementation and compliance of different policies formulated by the Board and the Regulators.

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Risk Management CommitteeDuties and Responsibilities � Recognizing different risks and execute proper

strategies to control those risks, assess existing risk management principles & procedures and take corrective measures if necessary

� Ensure proper organizational structure for risk management

� Form separate committees at Management level for compliance of instructions under risk related guidelines and supervision of their activities

� Review risk management policies and guidelines, review loan approval limit and submission to the Board for necessary revision each year.

� Examine and approve the preservation of data and reporting implemented by the management. Ensure implementation of approved systems.

� Inform the Board of Directors about the summary of minutes of meetings of the committee.

� Submit decisions/recommendations of the Committee to the Board on quarterly basis. If sought by the committee, internal and external auditors will submit evaluation report to the committee.

Shari’ah Supervisory CommitteeOperations of Islamic banking branches of PBL are supervised by Prime Bank Shari’ah Supervisory Committee, comprising of a pool of Shari’ah experts and renowned economists of the country. The basic functions of the committee are to offer views on matters related to Islamic banking operation of the bank from time to time and to assist the Board of Directors by advising them on matters relating to Shari’ah. Their recommendation of Shari’ah Principles is strictly respected by the Board to run Islamic banking operation of the bank.

Asset Liability Committee (ALCO)The Asset-Liability Committee (ALCO) is chaired by the Managing Director and is responsible for the daily liquidity and cash management. The ALCO reviews reports on liquidity risk, market risk and capital management and takes decisions accordingly. It is also responsible for deposit-pricing strategy for the local market and appraises liquidity contingency plans for the Bank.

Management Committee (MANCOM)The Management Committee is (MANCOM) responsible for the global management of PBL’s operations. MANCOM consists of the Managing Director, Deputy Managing Directors and Head of Divisions. MANCOM appraises the Bank’s financial data, position in the

sector, profitability of business units, and new business developments. Based on the Credit Committees analysis and observation, the proposal will be forwarded to the Managing Director, Executive Committee or Board of Directors according to delegation.

Credit CommitteeThe Credit Committee is made up of knowledgeable individuals that that examines loan offers in terms of compliance with legal regulations, banking principles, the Bank’s goals and loan policies. The committee will accept or decline the credit application and will put observations accordingly.

Green Banking CellThe Green Banking Cell (GBC) of the Bank has been formed with the task of developing policies, planning and overseeing the overall green banking activities of the bank. Moreover, the Risk Management Committee (RMC) of the Board has been appointed as the High Powered Committee for reviewing environmental policies, strategies and program for governing the overall green banking activities of the Bank. In this connection, on 30th September, 2013 the Bank established an independent Green Finance Cell (GFC) to dedicatedly look after the Green Financing Issues. The GFC comprises of the representatives from General Credit Unit, Export Finance Unit, Structured Finance Unit, SME Banking and Agri-Culture Support Division.

Roles and Responsibilities of Green Finance Cell are as follows: � To set annual budget for the Bank for Direct Green

Finance Products as prescribed by Bangladesh Bank.

� Act as one Focal point of the Bank to make necessary correspondence with external bodies regarding Green Financing issues.

� Ensuring that the projects/enterprises are in compliance with the Bank’s environment requirements.

� Introducing green finance for eco-friendly business activities and energy efficient industries.

ETHICS AND INTEGRITYPrime Bank has a framework of ethical behaviour namely the ‘Employee Code of Ethics and Business Conduct’. It has a special focus to establish organization-wide ‘Uncompromising integrity’. This Code of Ethics and Business Conduct guides employees to set the highest ethical standards so that customers’ expectations and interests are protected in a compliant manner. For more detail please see the annual report (corporate governance part).

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Name of the FundsAmount in BDT

as on 31.12.2014

Prime Bank Limited Employees’ Provident Fund 1,661,163,554

Prime Bank Limited Employees’ Gratuity Fund 1,257,675,652

Prime Bank Limited Employees’ Welfare Fund 141,704,062

Employees’ Benevolent Fund 12,201,336

Donations for the year 2014

Sl No. Purpose Amount in BDT

1 Eye Camp under banks CSR programs by Prime Bank Foundation 883,000

2 Blanket Distribution 1,991,600



5 LakhoKanthe Sonar Bangla Fund 10,000,000

6Additional budget of cataract surgeries in the eye camps of PBL as part of CSR activities

2,397,400

7Six outreach eye camps under banks CSR Programs by Prime Bank Foundation

1,439,400

8 Donation to Prime Minister's Relief Fund for flood affected people 5,000,000

Economic Value Created

ECOnOMIC VALuE Amount in BDT Million


Direct economic value generated: revenues 11,906.31 12,883.08

Direct economic value distributed: operating costs 2,290.87 2,287.07

Direct economic value distributed: employee wages and benefits 3,288.41 2,950.61

Direct economic value distributed: payment to providers of capital 1,286.69 935.77

Direct economic value distributed: payments to government 4,465.83 5,121.11

Direct economic value distributed: community investment 170.34 171.25

Economic Value retained 6,156.69 7,474.15

ECONOMIC ASPECT

Benefit plans for PBL employeesPrime Bank provides the following benefit plans for its employees upon retirement according to individual’s entitlement, which are: 1) Provident Fund 2) Welfare Fund 3) Benevolent Fund and 4) Gratuity. These funds are controlled by a Trustee Board, and decisions regarding investing and encashment of these funds are based on the Board’s judgment. The Trustee Board

works to ensure that employees on retirement will get full coverage of their portion of the fund. Provident Fund contributions are made by employees (10% of basic salary per employee) and employer (Same amount as paid by the employee). Welfare and Benevolent Funds are deducted from salary based on designation of the employee. The fund position as of December 31st, 2014 was as follows:

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Foreword

Everyone has some form of impact on their natural environment-- in an industrialized world, this is an unavoidable reality. However, the extent to which people negatively impact their environment can absolutely be mitigated through a number of means. Whether it’s making large efforts or simple ones, there are many ways that everyone can do their part to help preserve the health of the environment. We belief on sustainable development and we are looking forward to put our steps in this regard.

Through Green Financing, bank can ensure less carbon emission, less use of fossil fuel, less use of harmful chemical fertilizer and pesticide. Moreover, like other banks, Prime Bank has also taken initiative to use less energy, water and paper, which will help to protect environment for the future generation. When we will be able to protect our nature and civilization, our finance will be protected as well as we will be able to achieve sustainable development through this process.

Agriculture and rural credit

Agriculture is the key driving force of the economy of Bangladesh. The overall economic development of the country is closely interlinked with the development of the agricultural sector. As food security, improvement of living standard and generation of employment opportunities of the huge population of the country are directly linked to the agriculture sector, it is imperative for greater institutional and policy supports for the sector. There have been continued efforts by the

Government for the overall development of this sector to fulfill the food and nutritional demand of the growing population of the country and to ensure sustainable and dependable food security. Special emphasis has been laid on building up a modern agriculture system based on appropriate technologies.

Agriculture as a sector depends more on credit than any other sector because of the seasonal variations in farmers’ return and a changing trend from subsistence to commercial farming. In the absence of necessary working capital for buying water, fertilizer and pesticides, coupled with it the lack of the knowledge for their balanced application, farmers often fail to reap a better harvest from modern technology-led crops.

Prime Bank Limited also believe that if the nation’s agriculture and rural base economy walk through a techno-based eco-friendly process, all the targeted goals will be achieved in a sustainable way. With the same vision, Bangladesh Bank (BB) announced a farmer-friendly agriculture and rural credit policy for the fiscal year 2014-15. The target for disbursement of agricultural credit has been set at Taka 155.50 billion, which makes an increase of 6.54 percent over that of the last fiscal year.

The Central Bank of Bangladesh declared that disbursement of agriculture and rural loan would be considered an integral part of assessing the performance of the country’s banks as agriculture loan ensures financial stability. Considering priority sector, Bangladesh Bank (BB) cut the rate of interest against agriculture and rural credit by 2 per cent to 11 percent.

ENVIRONMENTAL ASPECT

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It is expected that the farmer friendly credit disbursement policy of the central bank would help diversify crops, lead to increased production and consolidate the success in food production. Bangladesh for the first time exportedrice to Sri Lanka. After Sri Lanka, Bangladesh

now wants to export rice to neighboring India from its bulging stock. The Bank has been involved in disbursing quite a large portfolio of agriculture loans during the year, which are listed below.

Taka in Million

Sl. no. Purpose2014

Disbursement Outstanding

1 Crops / Vegetables cultivation 332.74 368.81

2 Fisheries 103.50 148.33

3 Livestock 726.29 450.64

4 Irrigation equipment 2.40 9.30

5 Farm Machineries 46.90 71.99

6 Crop storage & Marketing and Others 24.60 34.26

7 Poverty Alleviation 0.00 34.41

Total 1,236.43 1,117.74

Table: Agriculture Loan by purpose

Cultivation of Maize, Spice and Oil seed Bangladesh is endowed with a favorable climate and soil conditions for the production of a variety of crops all the year round. The major crops cultivated in the country are rice, wheat, maize, sugarcane, potato, jute, pulses, oilseeds, spices and vegetables.

For climate change, there is a growing need to change the cropping pattern in the country. Water efficient high value crops (such as maize, spices, oilseeds and pulses) should be promoted in the drought prone region of the country through distribution of high quality seeds and saplings at subsidized price along with provision for agricultural credit at rebate / low interest rate.

The Central Bank has advised to all banks that Credit facilities shall be allowed at rebate rate (4%) under interest loss compensation scheme of Government for cultivation of pulse, oil seeds and spices to reduce dependency on import and to save huge amount of foreign exchange incurred for importing the items. Bank may receive 6% interest loss compensation from Government through Central Bank after realizing the loan from borrower in full.

Prime Bank Limited has positive intention to contribute in flourishing the crop diversification in the country with a view to attain multifarious output in production, saving foreign exchange, substituting rice and other conventional crops.

In line with this the Bank has financed a substantial amount in cultivation of Maize and spices. Credit facilities are allowed at rebate rate (4 percent) for cultivation of

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species and maize to reduce dependency on import and save huge amount of foreign exchange incurred for importing the items under interest loss compensation from Government. During the year of 2014, PBL has

disbursed Tk.1.82 million among 30 farmers at rebate rate (4 percent) for cultivation of species and maize.

BDT in million

SL CropLoan Disbursed @ 4% interest

(January 2014 to Dec. 2014)No. of clients

01 Spices 1.12 16

02 Maize 0.70 14

Total 1.82 30

Green FinanceBangladesh Bank has introduced 47 Green products under re-finance scheme and Prime Bank Limited has taken initiative to finance under the products, but major focus already made under the following.

Bio-gasSmall dairy farm of 4 (four) cows and one bio-digester is very effective in the context of the rural family environment of Bangladesh and may be considered as a commercially profitable model. This may result in self-employment in rural areas side by side employment of many poor men and women. Almost 17 liters of milk (for rearing cow), 100 kg organic fertilizer and 100 cubic feet bio-gas may be produced by this model every day. In order to make this model (cow rearing and beef fattening) popular, Prime Bank Limited has been financing to set up Bio-gas plant in the residence or small dairy farm.

Bio-gas Plant in existing dairy/poultry farm: To establish a bio-gas plant in the existing dairy/poultry farm for production of bio-gas for using the same in resident or to sell the gas to others commercially. Production capacity will be Min. 1.2 m3 to Max. 4.8 m3.

Combined Cow Rearing and Bio-gas Plant: To purchase 4 (four) cows and establish one bio-digester to produce bio-gas for using the same at their resident or to sell the same to others commercially. Production capacity will be 4.8 m3 / bio-digester.

Medium size Bio-gas plant:To establish a Bio-gas plant in the exiting poultry / dairy farm for production of bio gas commercially. Production capacity will be 220 m3 / bio-digester. Produced bio-gas will be used as raw material for producing Electricity through generator.

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Vermi-compost

Vermi-compost is the product or process of composting using various worms, usually red wigglers, white worms, and other earthworms to create a heterogeneous mixture of decomposing vegetable or food waste, bedding materials, and vermicast. Vermicast, also called worm castings, worm humus or worm manure, is the end-product of the breakdown of organic matter by an earthworm.These castings have been shown to contain reduced levels of contaminants and a higher saturation of nutrients than do organic materials before vermicomposting.

Containing water-soluble nutrients, vermicompost is an excellent, nutrient-rich organic fertilizer and soil conditioner. This process of producing vermicompost is called vermicomposting.

In Jhenaidah (kaligonj), Jessore, Magura, Meherpur, Mymensingh District of Bangladesh, farmers started

vermi-composting with cow dung and successfully producing compost since last couple of years.

For reducing dependency on chemical fertilizer as well as improver fertility of the land, which help to meet the increasing demand of crop/food, Prime Bank Limited visited Vermi-compost plant and plan to disburse loan for Vermi-compost production.

Effluent Treatment Plant (ETP)

The state of environment in Bangladesh is rapidly deteriorating. The key areas of environmental degradation cover air pollution, water pollution and scarcity, encroachment of rivers, improper disposal of industrial medical and house-hold waste, deforestation, loss of open space and loss of biodiversity. In addition, Bangladesh is one of the most climate change vulnerable countries. In line with global development and response to the environmental degradation, financial sector in Bangladesh should play important roles as one of the key stake holders.

Commercial Banks are now required to ensure necessary measures to protect environmental pollution while financing a new project or providing working capital to the existing enterprises.

Industries produce waste water, otherwise known as effluent, as a bi-product of their production. The effluent contains several pollutions, which can be removed with the help of an effluent treatment plant (ETP). The

“clean” water can then be safely discharged into the environment.

Effluent can be treated in a number of different ways depending on the level of treatment required. These levels are known as preliminary, primary, secondary and tertiary (or advanced). The mechanism for treatment can be divided into three board categories: physical, chemical and biological, which all include a number of different processes.

Physical unit operation include among other processes screening, flow equalization, sedimentation, clarification and aeration.

Chemical unit processes are always used with physical operations and may also be used with biological treatment processes, although it is possible to have a purely physico-chemical plant with no biological treatment. Chemical processes use the addition of chemicals to the waste water to bring about changes in its quality. They include pH control, coagulation, chemical precipitation and oxidation.

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Biological treatment is an important and integral part of any waste water treatment plant that treats waste water from either municipality or industry having soluble organic impurities. The obvious economic advantage, both in terms of capital investment and operating costs, of biological treatment over other treatment processes like chemical oxidation; thermal oxidation etc. has cemented its place in any integrated waste water treatment plant. The objective of biological treatment of industrial wastewater is to remove or reduce the concentration of organic and inorganic compounds. Biological treatment process can take many forms but all are based around micro-organisms, mainly bacteria.

No development work would be sustainable by damaging the environment. The Government of Bangladesh also instructed the respective authorities to ensure that central effluent treatment plants (CETP)

are set up in industrial areas to prevent river water from being contaminated by chemical-mixed waste and water.

Prime Bank Limited has already started screening in financing those businesses that may deteriorate the environment. During 2014, the bank has extended finance of BDT 6,757.46 million in 24 projects having ETP.

Everyone should come forward to prevent water contamination and save the environment for healthy life.

Financing Environment Friendly Brick Kiln

The emission of toxic elements from 7,500 traditional brick kilns is causing serious health hazards of the country. The brick kilns spew poisonous and contaminated vapor containing suspended particulate matters rich in carbon particles and high concentration of carbon monoxides and oxides of sulfur that are harmful to eyes, lungs and throats.

These air pollutants inhibit the mental and physical growth of children. The growing number of brick fields not only affect mental and physical health but also the toxic exhaust of brick fields affects crops and plants in the areas adjacent to brick fields.

The Department of Environment has found that the brick kilns in the country burn nearly 20 lakh or 2.0 million tonnes of coal and another 2.0 million tonnes of wood every year. The government recently ordered the brick kiln owners to raise their chimneys to a height of 120 feet in a move to limit the kilns’ emissions. Bangladesh Bank introduced Green products related to brick kiln [Hybrid Hoffman / Tunnel Kiln] and extended refinance to reduce carbon emission. For new projects bank can approve up-to BDT 50.00 million and for improvement of existing is BDT 5.00 million vide GBCSRD Circular no. 02 dated 01-07-2013, where the rate of interest will not more than 9.00%. Prime Bank Limited also financed in improved zig-zag project under refinance scheme.

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Bio Pesticides

Now a day’s various types of pesticides are being used in our country largely to control insects and infection of crops. This massive usage of pesticides is harmful for health and environment simultaneously. In this context, to get rid from the dependency of pesticides and to produce environment friendly, economically viable & simple usage insecticides, Integrated Pest Management (IPM) is being used in our country.

Integrated pest management (IPM) is a broad-based approach that integrates practices for economic control of pests. IPM aims to suppress pest populations below the economic injury level. The UN’s Food and Agriculture Organization defines IPM as “the careful consideration of all available pest control techniques and subsequent integration of appropriate measures that discourage the development of pest populations and keep pesticides and other interventions to the level that are economically justified and reduce or minimize risks to human health and the environment. IPM emphasizes the growth of a healthy crop with the least possible disruption to agro-ecosystems and encourages natural pest control mechanisms.”

M.M. Ispahani Limited is an ISO 9001 certified company, which was established in 1820. The Company has its corporate offices in Chittagong, Dhaka and Khulna. Through its Tea, Foods, Textile, Jute, Match, Real Estate, Poultry and Shipping Units; the group employs approximately 5,000 people. Today after 192 years of business in the sub- continent, the house of Ispahani is still dedicated to the cause of excellence in providing high quality goods and services. Ispahani Agro Limited (IAL), a sister concern of M. M. Ispahani Ltd. has been operating its agro business with three wings “Ispahani Seeds”, “Ispahani Biotech” and “Ispahani Agro Processing” since 2007.

IAL is an integrated approach of supplying agro input to ensure Safe Food Security. In this backdrop IAL has started its venture with quality seeds with the motto of “Farmer’s progress for country’s prosperity” under the finance of Prime Bank Limited. Being a sister concern of a renowned business conglomerate, IAL feels to

develop a complete agro business unit which will contribute not only to the farmers’ progress but also to the harmony of nature and well-being of human being. And consequently IAL set the goal as “Safe food for better life”

In the name of “Ispahani-Biotech” (IBT), Ispahani has taken an initiative to disseminate the bio-pesticide technologies among the farmers. Ispahani Biotech, with the “commitment to maintain the balance of nature”, focuses on research & development of bio-pesticides and relevant technologies for vegetable, rice, tea and sugarcane. Starting its journey with different types of pheromones and bio- control agents, Ispahani Biotech is also striving to enrich its product line with environment friendly solution of pest and disease management approaches.

In the year 2013, we have established business relationship with this group and have approved a credit limit of Tk. 1790.00 million, favoring two concerns of this group namely M. M. Ispahani Limited and Ispahani Agro Limited. In January 2009, Ispahani Group joined with the government to fulfill the mission of reducing the use of chemical products as pesticides. Since then, the researchers have been striving to develop Integrated Pest Management (IPM) which is cost effective, environment friendly and harmless to consumers’ health. Under the IPM system, the insects in fruits and vegetable fields are controlled naturally without using any chemical. They use the friendly insects to control the harmful insects.

The parasites of friendly insects are spread in the field to control the harmful insects. First, they procure/ import chemicals and produce the pheromone bait. The production procedure is completed within a day. Ispahani Agro Limited can produce 2000-2500 bait in a day. For production of beneficial insects, harmful insects are used. The harmful insects are collected from local sources. It takes 15 days to complete the entire production process. Ispahani Ago Limited produces 300 jars at a time. But, the insects are produced on requirement basis as they are living things and cannot be store for long. Prime Bank has financed Tk. 19.00 crore favoring Ispahani Agro Limited (IAL) for their environment friendly business, and plan to expand it in the upcoming year.

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Organic Cotton

Conventionally grown cotton uses more insecticides than any crop in the world. It is estimated that each year cotton producers use as much as 25 percent of the world’s insecticides and more than 10 percent of the world’s pesticides; an incredible amount for just one crop. Organic cotton is grown without the use of toxic pesticides or fertilizers. It is grown using method and materials that have a low impact on the environment. Organic production systems replenish and maintain soil fertility, reduce the use of toxic and persistent pesticides and fertilizers, and build biologically diverse agriculture.

Companies around the world are developing programs that earlier use 100 percent organically grown cotton, or blend small percentages of organic cotton with conventional cotton in their products. There are a

number of companies driving the expanded use of domestic and international organic cotton. In addition, organic cotton seed is used for animal feed, and organic cotton seed oil is used in a variety of food products, including cookies and chips.

Carbon Foot Print

An individual’s nation’s or organization’s carbon footprint can be measured by undertaking a GHG (Green House Gas) emissions assessment or other calculative activities denoted as carbon accounting. Once the size of a carbon footprint is known, a strategy can be devised to reduce it. e.g. by using more solar energy, using less paper in the office, consumption strategies in the Bank, and other.

The mitigations of carbon footprints thought the development of alternative projects, such as solar or wind energy or reforestation, represents one way of reducing a carbon footprint and is often known as Carbon offsetting. The main influences on carbon footprints include population, economic output, and energy and carbon intensity of the economy. These factors are the main targets of individuals and businesses in order to decrease carbon footprints.

Scholars suggest the most effective way to decrease a carbon footprint is to either decrease the amount of energy needed for production or to decrease the dependence on carbon emitting fuels. As a believer of “Green and Safe Universe” theme, PBL also considers

an extensive focus on Carbon Offsetting and started its journey in financing in eco-friendly industries. The following information was collected with regards to the consumption of energy at the Head Office of the Bank:

Source Consumption Mega Joules CO2 Emission

Electricity 2,210,847 kwh 7,959,049 2,321.39 tonnes

Octane 98,275 Liters 3,144,826 242.73 tonnes

Diesel 6,065 Liters 234,109 17.59 tonnes

Source: CO2 conversion: www.carbonfootprint.com/calculator.aspxMega Joules conversion: www.convertworld.com

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Financing Environment Compliance Ship Breaking Industry

Until the 1960s, ship breaking was considered a highly mechanized operation, concentrated in industrialized countries - mainly in the United States, United Kingdom, Germany and Italy. From early 1980s to maximize profits ship owners sent their vessels to the scrap yards of India, China, Pakistan, Bangladesh, the Philippines and Vietnam where pay, health and safety standards are minimal and workers are desperate to work. It is estimated that over 100,000 workers are employed at ship breaking yards worldwide. Of the approximate 45,000 ocean-going ships in the world about 700 are taken out of service every year. At the end of their sailing life, ships are sold so that the valuable steel - about 95% of ships mass can be reused.

In Bangladesh, the ship breaking industry started its operations in 1960s when a Greek ship ‘MD Alpine’ was stranded on the shores of Sitakunda, Chittagong after a severe cyclone. The ship remained there for a long time before the Chittagong Steel House brought the vessel and scrapped it.

During the Liberation War in 1971, a Pakistani ship ‘Al Abbas’ was damaged by bombing. It was later salvaged and brought to the Fauzdarhat seashore. In 1974, Karnafully Metal Works Ltd bought it as scrap, introducing commercial ship breaking in Bangladesh. The industry flourished during the 1980s. Today it has become large and profitable industry for Bangladesh.

These two incidences are considered to be the beginning of the ship breaking industry in Bangladesh. The ship breaking industry gradually grew since then, and by the mid-80s Bangladesh had become one of the major ship breaking nations in the world.

Bangladesh was the top ship recycling nation from 2004-2009. Bangladesh became the second in 2012,

scrapping around 270 ships. Bangladesh dismantling 210 ships in 2013 became the third largest ship breaking nation in the world.

� Key information about the industry (based on discussion with the key industry players) as follows:

� Number of yards: 140 (according to industry experts only 60% yards are operative)

� Number of Workers: 40,000 approximately

� Industry Size : Around USD 1.5 Billion annually

� Growth rate: On average 7-10%

� Annual local market scrap demand : 2.40 million MTPA

� Annual local market raw materials demand for Rod manufacturing: 4.00 million MTPA

Ship breaking is a challenging process, due to the structural complexity of the ships and the environmental, safety and health issues involved. Due to cheaper labor costs and fewer health and safety regulations that have to be followed, the developing world hosts the vast majority of ship breaking efforts.

The International Maritime Organization’s (IMO) Hong Kong Convention for the Safe and Environmentally Friendly Recycling of Ships (2009) set out a roadmap for increased worker safety and environmental protection but has yet to be fully ratified.

The Government of Bangladesh has recently introduced new national policies and legislation to improve the environmental and occupational health and safety standards in the ship breaking yards. But there is a long way to go.

Generally following compliances are related to the ship breaking:

1. NOR (Notice of Readiness).

2. Port Clearance Certificate (No Objection Certificate);

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3. Rummaging Certificate that ensures due rummaging of the vessel;

4. A copy of import general manifest accepted by the Chittagong Customs confirming the Vessel is for scraping;

5. Original TRIM and stability Book;

6. Gas free Certificate for human entry; (Certificate stating that the vessel is free from any Gas harmful for human entry)

7. Light dues payment receipt issued by Customs; and

8. Naval Clearance in favor of the importer.

9. Compliance of Clearance Certificate from Environment Department (Certificate already obtained).

10. Permission from Directorate General, Shipping of Bangladesh.

11. Compliance of High Court Division Observation.

12. Proposed importing ship is not included in the blacklist of Greenpeace.

13. All other required permission related to ship breaking industry.

Ship breaking generates a lot of jobs, and it is estimated that some 30,000 to 50,000 people are directly employed in the ship breaking industry in Bangladesh. Additionally, another 1, 00,000 are indirectly involved in the business. Most of the laborers are hired by the ship

yards through local contractors on a ship by ship basis. A labor earns around 1-3 dollars per day depending on the type of work. Some 300-500 people are typically employed on a temporary basis for dismantling a ship, and many more are employed in downstream activities for recycling of all kind of materials from the ships.

Ship breaking is therefore a lucrative business with few risks for the yard owners, investors and money lenders. The ship breaking industry in Bangladesh is estimated worth an annual turnover of around 1.5 billion dollars.

Considering the cumulative demand of steel and potential threat to environment, Prime Bank Limited is concentrating on financing environment compliance ship braking industry. The bank has financed this sector after doing due diligence on Environmental Risks for each customer and the bank only financed to those customers, who have obtained membership license from Bangladesh Ship Breakers Association and completed all ancillary works, e.g. they also have obtained Environmental Clearance Certificate from Environment Department, Chittagong Division. The customers should have Effluent treatment plane (ETP), workers recreation center, labor barrack in their yards as per instruction of Environment Department.

In the year 2014, our Bank financed a substantial amount in this sector which is around Tk.117.75 crore.

Green Banking at Prime Bank Limited

Prime Bank Limited always believes growing in a responsible manner maintaining eco-friendly environment which is essential for our survival. As a Bank, we play an intermediary role between economic development and conservation of the environment. Our Green Banking activities are on multidimensional areas which include both in-house green activities and green financing activities to support Green Economy. Prime Bank Limited as one of the leading commercial banks of the country is committed to ensure proactive and prudent management for the environmental degradation arising from our business activities.

Major Green Banking Initiatives taken by Prime Bank Ltd

♦ Green Banking PolicyPrime Bank Ltd. has outlined a comprehensive Green Banking Policy for implementing Green Banking activities in line with the Bangladesh Bank’s BRPD Circular No.02 dated February 27, 2011. During the year 2014, a revised Green Banking Policy was approved by the RMC of the Board.

♦ Green Office GuideThe Bank has already developed Green Office Guide and circulated it to all employees for creating awareness on green banking activities & providing instructions on efficient use of energy, water, saving paper, etc. However it is mentionable that, PBL is in process of introducing an advanced Green Office Guide.

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♦ E&S PolicyPrime Bank Ltd. also engaged FI Konsult s.r.o, a Czech Republic based consulting company to develop Environment & Social (E&S) Management policy for Prime Bank Ltd. which may be implemented at the end of 2015.

♦ Green FinancingThe “Green Finance Cell” of Prime Bank Limited is in operation since 2013 to exclusively look after the Bangladesh Bank enlisted green financing products. During 2014, the bank has extended finance of BDT 6757.46 million in 24 projects having ETP. The bank has further strengthened its green banking initiatives by financing environment-friendly Hoffman Kiln and Zigzag based automated brick fields, which contribute towards a greener climate. Prime bank disbursed 32.00 million to set up 4 Hybrid Hoffman Kiln (HHK) projects.

♦ Alternate Delivery Channels Prime Bank Limited has established various alternate delivery channels i.e. Online Banking, Internet Banking facilities, Automated Teller Machine (ATM), SMS Banking facilities, Biometric Smart Card based alternate banking service, Cash Back Service etc. These are the platform that gives our customers the convenience of banking anytime anywhere and ultimately reducing the carbon footprint of the customers by ensuring they do not have to resort to physical travel to Bank’s service outlets.

♦ Paper Consumption Management � Arranging paperless Credit Review Committee

meeting (both SME & Corporate) by arranging presentation with Projector.

� Use of e-mails instead of letter for internal communication;

� Digital circular archiving solution for archiving regulatory and internal circulars;

� Introduced E-DOC system for Credit Administration Division, which allows electronic archiving of security documents along with reminder system for better monitoring and control;

� “Agenda and Compliance Management Software” was introduced, which eliminated the process of presenting paper based memo during the meeting of the Executive Committee of the Board;

� Human Resource Division has successfully launched online ACR (Annual Confidential Report);

� Requisition for printing & stationery, office stationery, printing of MICR cheque and pool car are done by online requisition software.

� Trade Service Department has been centralized, which ultimately reduces paper consumption.

� Duplexing (two-sided printing) when possible as well as limiting printed materials/e-mails/memos to only what is necessary:

♦ Conserving Energy � Encouraging turning off and/or unplugging all

lights and electronic equipment (computers, monitors, photocopiers, cell phone chargers, printers, radios, etc.) when not in use, and fully utilizing power-saving settings when in us.

� Replacing incandescent bulbs with CFLs when they need to be replaced, internally and externally.

� A circular has been issued by the Human Resource Division (HRD) for all employees to encourage staffs for adopting car sharing with colleagues in order to reduce carbon emission.

� The Bank currently has nine (9) branches, which are well equipped to arrange video conference which ultimately reduces official travels.

♦ Renewable Energy Usage

The Bank has installed solar panels at 21 branches as well as 12 ATM booths and SME unit offices as part of its commitment to the usage of renewable energy resources.

♦ Training and EducationHuman Resource Training & Development Center of PBL arranged 12 Green Banking training Programs for 403 employees during 2014 to familiarize with the Green Banking aspects. Besides that, officials of the Bank attended Training programs/workshop/seminars on Green Banking issues arranged by Bangladesh Bank Training Academy.

♦ Customer Awareness Program to educate clientsThe Bank arranged a customer awareness program on March 19, 2014 to create awareness among 120 participants to protect the environment from different pollution and hazards.

♦ Disclosure and Reporting of Green Banking ActivitiesPBL has been regularly reporting its Green Banking Activities to Bangladesh Bank on quarterly basis

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since 2011. In view of highlighting our Green Banking activities and creating awareness amongst the stakeholders, a separate section has been incorporated in our Annual Report and Bank’s official website for disclosing our Green Banking activities.

Commitment to the environmentPrime Bank Limited has made some future planning to make 2015 a productive year for Green Financing, which are presented below:

� The Bank is committed to lessen consumption of electricity, water, paper, fuel in the upcoming year and will take necessary actions pro-actively.

� The Bank has allocated a significant amount for Direct Green Financing for the coming year.

� The Bank has allocated a significant amount for extending support for the economic activities

of the flood, cyclone and drought prone areas at the regular interest rate without charging additional risk premium.

� The Bank has allocated a significant amount for climate risk fund for the coming year.

� The Bank’s distance meetings shall be conducted through Video Conference rather than physical visit.

� Already solar panels have been installed in some of our branches, ATM booths & SME Unit Offices and we are expecting to expand the number of branches having solar panels.

� The Bank is arranging Training/Workshop related to Green Banking for our employees and committed to continue the same in the coming year.

� The Bank has planned to arrange more seminars to make the clients conscious regarding Green Banking as well as to avail Green Products.

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“Prime Bank has a glorious culture of winning together! From previous experience the Bank is cognizant that if employees are properly empowered, they become more engaged and go extra miles to fulfil organization’s ambition. Engaged employees are likely to take more responsibility and embrace accountability which helps to achieve the sustainability strategies.”

LABOR, SOCIETY AND HUMAN RIGHTS ASPECT

Motivated and engaged employees

Prime Bank has a diverse group of motivated and engaged employees. From experience it knows that if employees are properly empowered, they become more engaged and go extra miles to fulfil organization’s ambition. Engaged employees are likely to take more responsibility and embrace accountability which helps to achieve the sustainability strategies. The Bank has positioned itself with a performance-driven rewarding work culture; where employees are treated with respect and receive plenty of development opportunities. Prime Bank has a special focus on:

� Ensuring a balanced diversity

� Promoting human capital development

� Providing competitive compensation and benefits

� Promoting a performance centric culture

� Protecting human rights

� Ensuring workplace health and safety

� Ensuring equal opportunity

All the people related issues in Prime Bank are governed by the well-defined policies and procedures which are duly reviewed by the Management time to time.

Diversity in WorkplacePrime Bank believes that diverse, heterogeneous teams generate greater creativity, innovation and business development. An inclusive culture maintains and drives workforce diversity by fostering the exchange of ideas and collaboration among individuals and across groups. To speak simply, our constant success depends in part on maintaining a plurality of perspectives.

Employees by age group and gender:

Age group Grand Total PercentageLess than 30 years 605 21.1%30 to 50 years 2,134 74.4%Over 50 years 128 4.5%Grand Total 2,867 100%

We practice equal employment opportunity; for competent candidates regardless of their gender, age,

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locality or ethnicity. While recruiting fresh graduates, the Bank sources the pool from different recognized public and private universities; with a view to creating a diverse work force.

Employees by religion:Religion No. of Emp. Percentage

Islam 2,662 92.8%Hindu 196 6.8%Buddhist 9 0.3%Total 2,867 100%

Besides, our ration of male and female employees has been increasing over the time. Currently, approximately 21.00% of total employees are female. On the other hand, 25% of the Board of Directors represents females.

Gender diversity among employees:Gender No. of Employees Percentage

Male 602 21%Female 2,265 79%Total 2,867 100%

Increasing percentage of Female over the years: Year % of Female Employees2011 18.59%2012 19.77%2013 20.52%2014 21.00%

Gender diversity among Board members:Gender No. of Members Percentage

Male 15 75%Female 5 25%Total 20 100%

New recruitment by gender and age:

GenderNo. of

EmployeesPercentage

Male 259 80.9%Female 61 19.1%Total 320 100%

Age group Grand Total PercentageLess than 30 years

246 76.9%

30 to 50 years 72 22.5%Over 50 years 2 0.6%Grand Total 320 100%

Employee turnover by gender and age:

GenderNo. of

EmployeesPercentage

Male 142 91%Female 14 9%Total 156 100%

Age group Grand Total PercentageLess than 30 years 50 32.1%30 to 50 years 99 63.5%Over 50 years 7 4.5%Grand Total 156 100%

For the year 2014, the turnover rate is 5.57%.

Learning & DevelopmentIn Prime Bank, Human Resources (HR) Division regularly undertakes effectively designed training programs targeting the right group of employees through proper training need assessment. Prime Bank believes that continuous efforts should be given so that employees acquire and develop the right set of skills required to face the challenge of ever changing market.

In Prime Bank, the employee development plan is based on proper training need assessment. In 2014, Bank’s internal HR Training and Development Centre arranged training on different topics for 4,370 enthusiastic participants. Besides, a total of 644 employees were sent to participate in various training programs/conferences in home and abroad. In total, the number of participants who participated in trainings / conferences has increased by 48% over the last year. Average number of hours of training per year per participant is approximately 32.5 hours.

The banking sector is complex and diverse with evolving nature of threats and the risks. So, the training module is updated time to time for employees of the Bank in the changing context of financial market.

Compensation & BenefitsTo maintain the market competitiveness, the compensation and benefits of Prime Bank are regularly reviewed through market and peer group study. The well-crafted total rewards help the Bank to attract, motivate and retain talent.

2011 2012 2013 2014



18.59%

19.77%

20.52%

21.00%

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In PBL, the Board of Directors is not eligible for any compensation. They are paid honorarium for attending meetings only. On the other hand, all employees are paid competitive remuneration package. The remuneration policy of the Bank does not allow any discrimination between male and female employees. In addition, employees are paid bonus based on yearly business performance.

In addition to monthly competitive base pay and a good number of allowances (e.g., House Rent allowance, Medical allowance, Conveyance allowance etc.), Prime Bank has variety of market-competitive Benefits schemes designed to motivate the employees. The various cash and non-cash benefits include:

� Company provided car for top level Executive employees

� Car allowance for all Executive level employees

� Leave fair assistance allowance

� Medical treatment allowance

� Maternity benefits

� Car loan facility

� House loan facility

� Staff loan at reduced interest rate

� Hard furnishing allowance

� Mobile phone allowance

� Travel allowance

� Technical allowance

� Festival bonus

� Allowance for employees’ meritorious students

� Annual leave

� Maternity leave

� Study leave etc.

The Bank also provides long-term as well as retirement benefits to employees:

� Leave encashment

� Provident fund

� Gratuity benefit

� Retirement benefit

� Partial and full disability benefit

� Death benefit to family members etc.

The total compensation and benefits system of Prime Bank tracks costs and is linked with performance, while maintaining a balance with the business affordability.

Performance Management Program Prime Bank has a comprehensive performance management program that evaluates employees’ yearly performance against business targets at the year-end. In addition, their functional and leadership competencies are also rated by the line management. This appraisal process also identifies the competency gap and training needs of employees. All employees (except employees under probation or training) of the Bank undergo annual performance appraisal process. The process ensures that clear feedback on improvement points (performance and professional capabilities) is provided to employees by their Managers to promote employees’ long-term career development and improved contribution to organizational performance. All regular employees undergo the annual performance and career development review.

Work-life BalancePrime Bank wants it employees to balance the work and personal life and has organization-wide practices and policies that actively support employees to achieve success at both work and home. Management is also open and shows flexibility in regard to a balanced work-life.

In Prime Bank, employees are entitled to sufficient annual leave and sick leave with pay. To enjoy vacation with family, Bank provides Leave Fare Assistance Allowance to employees. All female employees are eligible for Maternity Leave (Parental Leave) with pay for a period of six months. In 2014, a total of 54 female employees availed Maternity leave. After completion of the leave, they returned to work and are still continuing with the organization.

CultureCulture plays a vital role to create a high performance environment that supports sustainability strategy implementation. Prime Bank carefully develop, shape and impact organizational culture by: practicing values appropriate for the bank; defining working relationship and communication pattern between superior and subordinates; governing rules and regulations which control employees’ behaviour; promoting a strong employer brand through which employees identify with the organization; maintaining effective reward system that affects employees loyalty and empowering employees to demonstrate their innovativeness not only to be competitive in the market but also to achieve a sustainable growth.

Healthy and Safe Work EnvironmentIn Prime Bank, the physical, mental and social well-being of the employees always get priority. Healthy, productive

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and motivated employees are the foundation of a successful organization. Prime Bank helps employees to assume responsibility for their own personal behaviour in health-related matters, and support health-promoting general conditions within the Company. We continuously focus on improving health and safety of employees that includes proper work place design and decoration of head office and branches, maintaining the cleanliness at work space, holding awareness session related to physical and psychosocial well-being, email communication on various health and safety related topics, sending alerts to employees on emergency situations, arranging fire drill sessions, financial support for medical care etc. Because of the nature of operations, Bank employees are not usually exposed to work-related injury, occupational diseases or fatality. Yet, the Bank remains cautious so as not to create any hazardous work condition.

Decent WorkplacePrime Bank has a decent work environment where employees can work with dignity, have the freedom to express opinions, can participate in the decision making process that affect their lives, and receive equal treatment and opportunity. The Bank is committed to ensure the best practices in compliance with the labour code of the country. Bank Management believes that the business can grow favourably if the organization enables employees through creating and maintaining a decent workplace.

In Prime Bank, employees have the right to exercise freedom of association or collective bargaining following the legal procedure of country laws. However, employees have never formed or wanted to form any collective bargaining agency.

The Bank follows non-discriminatory approach in all HR policies and practices. The salary of an employee is determined based on his/her competency, experience and performance.

During the period of 2014, neither any incident regarding discrimination nor any grievance related to labour practices nor human right has been reported.

The Bank neither employs child labour nor has any provision for forced labour. Employees have the right to resign from their employment serving proper notice period and following the internal procedures.

Ensuring a decent workplace also encompass Bank’s

investment decisions as well as agreements with the suppliers and contractors. For instance, human right, as appropriate, is covered as an integral part of decision making for major financial investments. Among all the significant investments, garments and manufacturing industry contain major stakes where issues related to human rights are more relevant and critical. Hence, any such investment agreement is subject to screening of human right issues along with other criteria.

On the other hand, all the agreements of Prime Bank with suppliers or contractors undergo due assessment process which requires complying with Labour Code and other applicable laws of the country. Moreover, the procurement decisions are also subject to conformity with International Labour Conventions. The team involved in procurement visits suppliers and contractors’ premises on need basis to monitor working conditions and other relevant issues like labour practices, human right etc.

The security personnel employed by the Bank are formally trained and aware of policies and procedures regarding human right issues. The training requirement also applies to third party organizations that provide security personnel to the Bank.

Openness in communication for a better employee-management relationEmployee communications and consultation are the lifeblood of any business. Proper exchange of information and instructions helps the Bank to function more efficiently and provides the opportunity to build greater trust among employees and management in discussing issues of mutual interest. To ensure effective employee communications, management takes a positive lead.

In addition to day to day regular communication, Prime Bank arranges Regional Town Hall Conference, Managers’ Conference etc. to allow employees with the opportunity to interact with the Management and Board of Directors. This helps to build an improved management-employee relation.

Any operational changes are properly planned and managed. Management follows a participative approach during any major transformation followed by prior communication to the employees. Since there is no trade union or employee association, no notice period regarding operational change is stipulated by any collective agreement.

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About this Report

Effect of any restatements of information provided in previous reportsG4-23

Prime Bank would like to state that there have been no significant restatement of any information. All information is relevant for the year 2014, and there have been no significant restatements. If there are any restatements, it is because the matter is still material as it was in 2013. But there have been no significant restatements overall throughout the report.

Significant changes from previous reporting periods in the Scope and Aspect BoundariesG4-22

There have been no significant changes in the reporting period in the Scope and Aspect Boundaries for this year. This year we are issuing the Sustainability Report based on GRI G4 and are trying to improve our reporting standards. But there have been no significant changes from the previous period regarding Scope and Aspect boundaries, and throughout the report it can been seen that many of our material aspects are still similar as the previous year.

Information related to the Sustainability Report 2014G4-28, 29,30,31,32, 33

Prime Bank would like to clearly mention that the Sustainability Report refers to the year 2014 only (meaning from January 1, 2014 to December 31, 2014).

PRODUCT RESPONSIBILITY ASPECTPrime Bank ensures that all products are compliant as per Bangladesh Bank, the central bank, product program guideline. The divisions that are jointly responsible for ensuring that all products are properly developed and compliant are: Business Divisions (Retail Banking, Corporate Banking, SME Banking, Cards Division, Islamic Banking Divisions, Alternate Delivery Channels Divisions, and Centralized Clearing Cell), Research & Development Division Marketing Division and Operations Division. The Marketing Division has a draft brand guideline which they follow to ensure all marketing communications are adherent to all the relevant laws and regulations.

However, no matter how much innovative a bank’s products are, quality customer service defines the forefront in building and maintaining profitable banking relationship. As competition in the banking industry is intense, there is no alternative in providing differentiated customer service. Providing differentiated and superior customer service requires continuous tracking of service of an organization. In this regard, Prime Bank Ltd. one of the largest private commercial banks of Bangladesh, has conducted a comprehensive ‘Customer Satisfaction Survey’ at our branch level covering all divisions of Bangladesh in 2014.

The objectives of the study wereto assess customer satisfaction and perception of our banking service personnel,to identify customer satisfaction and perception of our bank’s products and services, to determine customer’s satisfaction and perception on fees, charges and rates of products/services compared to other competitor Banks’ offerings, to determine customer satisfaction and perception on preferred channels (Branch, ATM, Online/Internet banking, mobile banking etc.).The Overall Satisfaction Score was derivedfrom performances on (a) Customer Service

(b) Products and services (c) Pricing and (d) Preferred Channels.

Quantitative approach has been followed to conduct the structured questionnaire survey. Stratified random sampling has been followed covering all geographic regions with sample size of 800. It has been observed that customers priority factors are in order of preference are ATM Booth availability, Customer Care, Convenient Branch Location, Goodwill and Security of Money from a Bank while deciding to open an account. Prime Bank has done well mostly in Customer Care segment achieving rating points around 5.8-6.1 out of 7, while in Banking Fees & Charges it has scored points of 5.1-5.3 out of 7. In general, Prime Bank’s image is also acceptable as they achieved rating points of 5.7-5.8 on an average. Prime Bank’s customer satisfaction and recommendation are also on an acceptable level as in both cases Prime Bank achieved rating points of 6 out of 7.The data collection and analyses were conducted by a third party research agency so that authentic, unbiased findings could be derived from the survey. R&D division of the bank monitored the overall data collection by the third party agency.

After the survey, findings were submitted to the top management. The management then recommends remedial actions required to increase the level of satisfaction of the customers. Major problems and complaints are dealt by specifically communicating with the Head of Branch/Branch Manager. Thus corrective actions are taken and customer satisfaction at all points is ensured. Prime Bank would also like to state that there have been no issues of non-compliance with regulatory bodies in 2014. There were no reported incidents or there have been no significant payment of fines to regulatory bodies during the year.

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The Sustainability Report for 2013 was reported under the GRI G3.1 basis and successfully went through the Application Level B check, and this year we have tried our out most to report on the GRI G4 standards. The Reporting cycle for all our sustainability reports are on a yearly basis. Any questions regarding this report can be reached to Mr. Shahjahan Majumder, FCA, Head of Financial Administration Division.

Prime Bank would like to clearly state that we have

reported on the GRI G4 – Core Option for the Sustainability Report 2014. No external assurance was given for the Sustainability Report 2014. Assurance providers are not available in Bangladesh, hence there was no way to get assurance for this report.

The Global Reporting Initiative has verified the integration of information relative to relevant aspects and scope, as well as stakeholder implication “Materiality Disclosures Service”

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GENERAL STANDARD DISCLOSURES

General Standard Disclosures Standard Disclosure Title Page Number External

AssuranceSTRATEGY AND ANALYSIS

G4-1 Statement from the most senior decision-maker of the organisation

Managing Director's Statement, Annual Report page no. 34 No

ORGANIZATIONAL PROFILEG4-3 Name of the organisation Prime Bank Limited No

G4-4 Primary brands, products, and services Products and Services, Annual Report page no. 182 No

G4-5 Location of the organisation Organization Profile No

G4-6 No. of countries where the organisation operates Organization Profile No

G4-7 Nature of ownership and legal form Prime Bank has been operating as a public listed company since its inception. No

G4-8 Markets served

Prime Bank serves the Bangladesh, Hong Kong, Singapore and UK markets through its branches and subsidiaries. Other markets are served by liaisons, but not directly through Prime Bank.

No

G4-9 Scale of the organisation Organization Profile NoG4-10 Workforce Organization Profile, No

G4-11 Percentage of total employees covered by collective bargaining agreement Organization Profile No

G4-12 Supply chain Organization Profile No

G4-13 Significant changes during the reporting period

There have been no significant changes in the reporting period No

G4-14 Precautionary approach Organization Profile NoG4-15 External charters, principles or other initiatives PBL does not subscribe to any of these charters NoG4-16 List of Membership of Associations Organization Profile NoIDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-17 Entities included in the organisation’s consolidated performance pg. 188 No

G4-18 Process for defining report content and aspect boundaries pg. 188 No

G4-19 Material aspects pg. 189 NoG4-20 Aspect boundaries within the organisation pg. 190 NoG4-21 Aspect boundaries outside the organisation pg. 190 NoG4-22 Effects of any restatement pg. 212 No

G4-23 Significant changes during the reporting period pg. 212 No

STAKEHOLDER ENGAGEMENT

G4-24 Stakeholder groups engaged by the organisation pg. 191 No

G4-25 Basis for identification pg. 193 NoG4-26 Approach to stakeholder engagement pg. 192 No

G4-27 Key topics and concerns raised by stakeholder pg. 192 No

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AssuranceREPORT PROFILEG4-28 Reporting period pg. 212 NoG4-29 Date of the most recent previous report pg. 212 NoG4-30 Reporting cycle pg. 212 NoG4-31 Contact point for questions regarding report pg. 212 NoG4-32 In accordance option chosen pg. 212 NoG4-33 Assurance No, pg. 212 NoGOVERNANCEG4-34 Governance structure of the organisation Corporate Governance NoETHICS AND INTEGRITY

G4-56 Organisations value principles and norms of behaviour

Ethics and Integrity, Corporate Governance Annual Report page no. No

SPECIFIC STANDARD DISCLOSURESDMA and Indicators Standard Disclosure Title Page Number

CATEGORY: ECONOMICMATERIAL ASPECT: ECONOMIC PERFORMANCE

G4-DMA Generic Disclosures on Management Approach No

G4-EC1 Direct economic value generated and distributed Economic Aspect No

G4-EC2Financial implications and other risks and opportunities for the organization's activities due to climate change

No

G4-EC3 Coverage of the organization's defined benefit plan obligations Economic Aspect No

G4-EC4 Financial assistance received from government

No financial assistance received from government No

MATERIAL ASPECT: MARKET PRESENCE


G4-EC5Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation

Not applicable for Banks. No

G4-EC6Proportion of senior management hired from the local community at significant locations of operation

All senior management are from Bangladesh. No

MATERIAL ASPECT: INDIRECT ECONOMIC IMPACTS


G4-EC7 Development and impact of infrastructure investments and services supported No

G4-EC8 Significant indirect economic impacts, including the extent of impacts No

MATERIAL ASPECT: PROCUREMENT PRACTICES


G4-EC9 Proportion of spending on local suppliers at significant locations of operation

All suppliers are local suppliers, no suppliers are from other countries. No

CATEGORY: ENVIRONMENTALMATERIAL ASPECT: MATERIALS

G4-DMA Generic Disclosures on Management Approach Environmental Aspect No

G4-EN1 Materials used by weight or volume No

G4-EN2 Percentage of materials used that are recycled input materials No

MATERIAL ASPECT: ENERGY


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AssuranceG4-EN3 Energy consumption within the organization Environmental Aspect No

G4-EN4 Energy consumption outside of the organization No

G4-EN5 Energy intensity NoG4-EN6 Reduction of energy consumption No

G4-EN7 Reductions in energy requirements of products and services No

MATERIAL ASPECT: WATER


G4-EN8 Total water withdrawal by source No

G4-EN9 Water sources significantly affected by withdrawal of water No

G4-EN10 Percentage and total volume of water recycled and reused No

MATERIAL ASPECT: BIODIVERSITY


G4-EN11Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas

No

G4-EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas

No

G4-EN13 Habitats protected or restored No

G4-EN14

Total number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

No

MATERIAL ASPECT: EMISSIONS


G4-EN15 Direct greenhouse gas (GHG) emissions No

G4-EN16 Energy indirect greenhouse gas (GHG) emissions No

G4-EN17 Other indirect greenhouse gas (GHG) emissions No

G4-EN18 Greenhouse gas (GHG) emissions intensity No

G4-EN19 Reduction of greenhouse gas (GHG) emissions No

G4-EN20 Emissions of ozone-depleting substances (ODS) No

G4-EN21 NOX, SOX, and other significant air emissions NoMATERIAL ASPECT: EFFLUENTS AND WASTE


G4-EN22 Total water discharge by quality and destination No

G4-EN23 Total weight of waste by type and disposal method No

G4-EN24 Total number and volume of significant spills No significant spills have happened due to the Bank's finance in 2014. No

G4-EN25

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally

No

G4-EN26

Identity, size, protected status, and biodiversity value of water bodies and related habitats signifcantly affected by the organization's discharges of water and runoff

No

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AssuranceMATERIAL ASPECT: PRODUCTS AND SERVICES


G4-EN27 Extent of impact mitigation of environmental impacts of products and services No

G4-EN28Percentage of products sold and their packaging materials that are reclaimed by category

No

MATERIAL ASPECT: COMPLIANCE


G4-EN29

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

No

MATERIAL ASPECT: TRANSPORT


G4-EN30

Significant environmental impacts of transporting products and other goods and materials for the organization's operations, and transporting members of the workforce

No

MATERIAL ASPECT: OVERALL


G4-EN31 Total environmental protection expenditures and investments by type No

MATERIAL ASPECT: SUPPLIER ENVIRONMENTAL ASSESSMENT


G4-EN32 Percentage of new suppliers that were screened using environmental criteria No

G4-EN33Significant actual and potential negative environmental impacts in the supply chain and actions taken

No

MATERIAL ASPECT: ENVIRONMENTAL GRIEVANCE MECHANISMS


G4-EN34Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

No grievances have been found in 2014. No

CATEGORY: SOCIALSUB-CATEGORY: LABOR PRACTICES AND DECENT WORK

MATERIAL ASPECT: EMPLOYMENT

G4-DMA Generic Disclosures on Management Approach Human Resource Aspect No

G4-LA1Total number and rates of new employee hires and employee turnover by age group, gender and region

Human Resource Aspect No

G4-LA2

Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation


G4-LA3 Return to work and retention rates after parental leave, by gender Human Resource Aspect No

MATERIAL ASPECT: LABOR/MANAGEMENT RELATIONS


G4-LA4Minimum notice periods regarding operational changes, including whether these are specified in collective agreements


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AssuranceMATERIAL ASPECT: OCCUPATIONAL HEALTH AND SAFETY


G4-LA5

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs

Not Reported No

G4-LA6

Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender


G4-LA7 Workers with high incidence or high risk of diseases related to their occupation Human Resource Aspect No

G4-LA8 Health and safety topics covered in formal agreements with trade unions Not Applicable No

MATERIAL ASPECT: TRAINING AND EDUCATION


G4-LA9Average hours of training per year per employee by gender, and by employee category

The participants are selected based on training need; regardless of gender No

G4-LA10

Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings


G4-LA11Percentage of employees receiving regular performance and career development reviews, by gender and by employee category


MATERIAL ASPECT: DIVERSITY AND EQUAL OPPORTUNITY


G4-LA12

Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity


MATERIAL ASPECT: EQUAL REMUNERATION FOR WOMEN AND MEN


G4-LA13Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation


MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR LABOR PRACTICES


G4-LA14 Percentage of new suppliers that were screened using labor practices criteria Human Resource Aspect No

G4-LA15Significant actual and potential negative impacts for labor practices in the supply chain and actions taken


MATERIAL ASPECT: LABOR PRACTICES GRIEVANCE MECHANISMS


G4-LA16Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms


SUB-CATEGORY: HUMAN RIGHTSMATERIAL ASPECT: INVESTMENT


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Assurance

G4-HR1

Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening


G4-HR2

Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Not Applicable No

MATERIAL ASPECT: NON-DISCRIMINATION


G4-HR3 Total number of incidents of discrimination and corrective actions taken Human Resource Aspect No

MATERIAL ASPECT: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING


G4-HR4

Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights


MATERIAL ASPECT: CHILD LABOR


G4-HR5

Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition of child labor


MATERIAL ASPECT: FORCED OR COMPULSORY LABOR


G4-HR6

Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor


MATERIAL ASPECT: SECURITY PRACTICES


G4-HR7Percentage of security personnel trained in the organization's human rights policies or procedures that are relevant to operations


MATERIAL ASPECT: INDIGENOUS RIGHTS

G4-DMA Generic Disclosures on Management Approach Not Applicable No

G4-HR8Total number of incidents of violations involving rights of indigenous peoples and actions taken

Not Applicable No

MATERIAL ASPECT: ASSESSMENT

G4-DMA Generic Disclosures on Management Approach Not Applicable No

G4-HR9Total number and percentage of operations that have been subject to human rights reviews or impact assessments

Not Applicable No

MATERIAL ASPECT: SUPPLIER HUMAN RIGHTS ASSESSMENT


G4-HR10 Percentage of new suppliers that were screened using human rights criteria Human Resource Aspect No

G4-HR11Significant actual and potential negative human rights impacts in the supply chain and actions taken


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AssuranceMATERIAL ASPECT: HUMAN RIGHTS GRIEVANCE MECHANISMS


G4-HR12Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms


SUB-CATEGORY: SOCIETYMATERIAL ASPECT: LOCAL COMMUNITIES


G4-SO1Percentage of operations with implemented local community engagement, impact assessments, and development programs

No

G4-SO2 Operations with significant actual and potential negative impacts on local communities No

MATERIAL ASPECT: ANTI-CORRUPTION


G4-SO3Total number and percentage of operations asessed for risks related to corruption and the significant risks identified

No

G4-SO4 Communication and training on anti-corruption policies and procedures No

G4-SO5 Confirmed incidents of corruption and actions taken No

MATERIAL ASPECT: PUBLIC POLICY


G4-SO6 Total value of political contributions by country and recipient/beneficiary

No political contributions have been made by PBL in 2014. No

MATERIAL ASPECT: ANTI-COMPETITIVE BEHAVIOR


G4-SO7Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes

No legal actions have been filed regarding this issue. No



G4-SO8Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

No fines or sanctions have been filed in 2014. No

MATERIAL ASPECT: SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY


G4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society No

G4-SO10Significant actual and potential negative impacts on society in the supply chain and actions taken

No

MATERIAL ASPECT: GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY


G4-SO11Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms

No grievances have been found in 2014. No

SUB-CATEGORY: PRODUCT RESPONSIBILITYMATERIAL ASPECT: CUSTOMER HEALTH AND SAFETY


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Assurance

G4-PR1Percentage of significant product and service categories for which health and safety impacts are assessed for improvement

No

G4-PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes

Not Applicable for Financial Institutions. No

MATERIAL ASPECT: PRODUCT AND SERVICE LABELING


G4-PR3

Type of product and service information required by the organization's procedures for product and service information and labeling, and percentage of significant product and service categories subject to such information requirements

No

G4-PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes

No such incident has occurred in 2014. No

G4-PR5 Results of surveys measuring customer satisfaction Product Responsibility No

MATERIAL ASPECT: MARKETING COMMUNICATIONS


G4-PR6 Sale of banned or disputed products No

G4-PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes

No such incident has occurred in 2014. No

MATERIAL ASPECT: CUSTOMER PRIVACY


G4-PR8Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

There have been no complaints regarding customer privacy and losses of customer data in 2014.

No



G4-PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

No fines regarding products and services have been filed in 2014. No

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OUR ACHIEVEMENT FOR THE SUSTAINABILITY REPORT 2013

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Every moment, everything in the universe changes, whether we are aware of it or not is the most important aspect in the world. Especially living beings like us change mentally, physically, intellectually, etc. Change makes life go forward. What is there in a life where there is no change? But we should ensure that whatever change takes place, it should be for the better, not otherwise.

Precious few of us imagine that we may change the world through our jobs. We may be good at what we do but not many of us have the opportunity to be involved in a work which makes a positive impact in the lives of others. There is now a growing realisation that what we do at work - and what our business does in its day to day pursuit of prosperity - makes a real impact on society.

At the Prime Bank Foundation, we are focusing on where we can make the greatest difference. PBF gives our beneficiary a positive boost to begin their journey with us, launching them into the time of feeling good and having a safe journey with PBF with enthusiasm for the opportunities they know are out there. In the journey with PBF, they start experiencing the feeling of motivational inspiration needed to refresh their goal

Prime Bankfoundation

CEO’s NotePrime Bank Foundation (PBF), together with its partnering organisations, works to develop unique programmes that deliver tangible and lasting results in the communities we work in.

Corporate Social Responsibility (CSR) is a long-term approach to business that addresses the needs of communities, people and their employers. CSR provides frameworks for successful enterprises that are harmonious with their surroundings. CSR also provides an opportunity to generate honest, authentic good-news stories that a business and its community can be proud of. We believe that CSR must be sustainable and be a fundamental part of our business regardless of changing fortunes. Through health and education programmes we help the Foundation connect with local communities in a way that no one else can.

When it comes to CSR, there are no easy answers on what to do or how to do it. A company’s interactions and interdependencies with society are many and complex. However, it is clear that approaching CSR as a feel-good or quick-fix exercise runs the risk of missing huge opportunities for both the business and society. Taking a step-by-step approach offers us a way to identify and drive mutual value creation. It requires greater focus, work, and long-term commitment than do many standard CSR pet projects, philanthropic activities, and propaganda campaigns, but the rewards are potentially much greater for both sides.

PBF’s undying commitment to incubating innovative approaches to address some of Bangladesh’s seemingly intractable problems has endured the test of time and created measurable impact for thousands of Bangladeshis. Throughout our journey, we have continually adapted our approach – from venture philanthropy to effective programme and service delivery– through partnership, knowledge sharing, and skill development. Our programme approach has enabled PBF to evolve a path of growth and gracefully handle transitions while maintaining a razor-sharp focus on our mission to catalyse impactful social and economic in Bangladesh.

Dr. Iqbal AnwarCEO, Prime Bank Foundation

225

in life and to check their “To Do” list and as such, they are on their way, with direction, focus, purpose and enthusiasm to make a difference in life. This is how our life changing programme support for our beneficiary gets them off to a flying start. They realise that their lives have transformed from a black and white sketch into a full color painting– not because it changed, but because their awareness and daily living skills changed.They notice so much more of this incredible life they are having; this experience of being alive is now fully available to them, in rich, vibrant colours and high fidelity sound. This is a time for reflection on their lives, and celebration of their successes and achievements.

It is an opportunity to make a huge contribution to the lives of our priority target groups who are experiencing educational under-achievements, a high level of deprivation and whose futures are genuinely at risk.

We continue to work toward our goal of providing significant funding for the purpose of advancing eye care in our community through assisting and supporting Prime Bank Eye Hospital patients, purchasing facilities and technology at our eye hospital, and providing eye health education for our staff and community. I am very proud of our Foundation Management Committee which is becoming more and more adept at leveraging our capacity and strategising successful and impactful initiatives. We are making immense strides, and our potential for growth is enormous!

We are ambitious about the future, we have a vision, we look for the unexpected, we inspire and we push boundaries to make things happen. We are a team of professionals inspired to do more and determined to succeed.

Philanthropy and charitable gifts are becoming more and more important to non-profit organisations everywhere, and Prime Bank Foundation is no exception. Revenue from care and service provided does not allow a margin to cover the costs of uncompensated care, equipment and technology purchases, and the necessities and improvements that are vital to the provision of quality care. Serving as CEO of the Prime Bank Foundation has been my privilege and an honour. The generosity of Prime Bank Limited, the major contributor of funds to PBF has allowed us to continue our support for our health, education and other programmes including sports in 2014. I am continually impressed with the quality and scope of care available in our health and education programmes for our priority target groups.

The Foundation will continue to work hard at spreading the word about what a fantastic service delivery we

have in our long term supply side financing health and education projects, namely: Prime Bank Eye Hospital, Prime Bank English Medium School and Prime Bank Nursing Institute. Please take a look at our report and find out what we have been able to accomplish this year. So many lives have been touched by the terrific projects we have been proud to implement. We are committed to expanding our efforts to touch even more lives in the years to come.

To be writing the CEO’s Report on the CSR component for the 2014 Annual Report of Prime Bank Limited is a privilege personally and professionally, since it provides the opportunity to reflect on the significant responsibility that the Foundation carries.

As I reflect on PBF’s accomplishments for 2014, I want to share a favourite analogy of mine. I want you to picture a watch with the hands pointing to the time. When you look at those hands, there is so much more to think of than just what time it is. The hands are simply the visible components that everyone sees, out front telling the story. But without all the gears and key components in the back working in perfect synergy, there would be no story to tell. So, instead of my normal “state of the Foundation” comments, I want to simply thank the many people who are behind the scenes shaping PBF’s story!

As you review our 2014 Annual Report, you will read about many of the programmes and services we provide. While this work is extremely important, it simply cannot be accomplished without the people who make it happen. I am personally very grateful to each person who has helped the Foundation with its outreach programmes. You are the ones who made our story happen. And it’s all thanks to you-our CSR projects implementing teams, partners and FMC for caring about others!

Before I conclude, I extend my kind thanks to you all for taking the time to review our activities this year and for sharing with us a sense of optimism for what we make possible. As this report reveals, we hope to continue to make important and exciting changes and look forward to updating you on further progress in the years to come.

Sincerely yours,

Dr. Iqbal AnwarChief Executive OfficerPrime Bank Foundation

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Over the past eight years, PBF has relentlessly pursued a range of activities with the sole purpose of benefitting its target people. The foundation has invested its resources in initiatives which will the future of many. It has opened new doorways to better health and education-opportunities which were only dreams for countless people.

Education Support Programme (ESP)Countless underprivileged, yet meritorious students fail to pursue higher studies due to poverty, the ESP project is designed to support such students through a long term renewable scholarship programme. Over the last few years, the number of students who have become established and employed due to the ESP has been overwhelming.

Prime Bank English Medium School (PBEMS)This English medium school provides quality English education at a minimum cost as well as a holistic syllabus which equips the students to tackle and comprehend the world. The school’s popularity and demand has led to the existence of a total of two branches in Dhaka city.

Prime Bank Nursing Institute (PBNI)Considering the dire need of a large number of qualified nurses, PBNI began its journey in affiliation with a leading nursing institute of Philippines. The modern equipments, IT facilities and qualified teachers all follow international standards which prepare the students to pursue a noble career. The institute aims not only to increase employment but also to contribute to the health sector of the country.

Prime Bank Eye Hospital (PBEH)Ophthalmic health is often ignored, but is integral for overall wellbeing. PBEH has a highly trained team of consultants and staff, and international standard equipments and operation theatres to provide excellent eye-care services at a minimum cost. PBEH also carries out screening camps, and free eye camps throughout the country, especially in remote areas to reach out to eye patients. The hospital has also adopted several awareness-raising campaigns to promote health-seeking behaviour.

Prime Bank Cricket Club (PBCC)The PBCC is a platform for young athletes to gain professional experience through the game as well as from the seasoned players who are also part of the team. PBCC provides excellent logistical support, a professional and systematic approach and best practices which set it apart and highlights its exceptional standards.

Other ActivitiesAlong with the ongoing projects, Prime Bank Foundation is actively involved in countless activities which are undertaken to support emergency needs of the country.

PBF Projects in BriefPrime Bank Foundation (PBF) is a staunch believer of empowerment rather than aid. That is why the foundation has undertaken a variety of projects in education, health and other sectors of the country with the objective of removing access barriers which the marginalised sectors of the society face. We are proud to say that our programmes have made a phenomenal difference in the lives that they have touched. PBF hopes to expand its sphere of influence and provide more opportunities of better health and education in order to ensure equal opportunities for the less privileged people of our society.

ESP

PBEMS

PBNI

PBEH

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both immediate needs as well as a longer term, more widespread development vision.

As we enter yet another year, we can look back and reflect on the considerable and improvement that PBF has made in the lives of many marginalised families. Educational, health, and socio-cultural development are the main areas of focus of PBF. Since its inception, the Foundation has been undertaking innovative programmes to promote development in these areas and reach out to those unable to afford such services. Some of PBF’s core ongoing programmes include the Education Support Programme (ESP), designed to support higher education, the Prime Bank English Medium School (PBEMS) initiative, for the development of a new model for primary & secondary education, the Prime Bank Eye Hospital (PBEH), intended to provide direct healthcare at minimal cost and the Prime Bank Nursing Institute (PBNI) which offers Diploma in Nursing and Midwifery at a comparatively affordable rate. As the next few pages will show, PBF is focused on real and measurable results, and always maintains a pragmatic stance. The Foundation’s activities have produced compelling results, turning out many inspiring stories of success and overcoming adversity. The outcomes of these activities have been shared as well. PBF is an agent of positive which illuminates the way for countless people whose lives were darkened by unfavourable circumstances. As always, PBF will continue broadening the scope of its impact through its groundbreaking social programmes. It is continuously exploring methods of extending the reach and effectiveness of its endeavours in order to fulfill its long term vision of a better and more equitable Bangladesh.

Prime Bankfoundation’s CSR

Prime Bank Foundation (PBF) has been working relentlessly since 2007 in the Corporate Social Responsibility (CSR) sector as a responsible corporate citizen. While providing support to the disadvantaged people of the country is a core focus, the larger goal of the Foundation is to push forward a broader process of change in order to ensure meaningful and lasting progress. PBF envisions a country where no one is deprived of their basic needs and rights, where everyone can live with dignity and has the opportunity to fulfill their potential. In order to realise this vision, the Foundation has taken initiatives to remove barriers to accessing essential services, as well as to foster an enabling environment for the marginalised to support their capacity to uplift themselves and their lives for the better.

On March 04, 2014 Prime Bank Foundation was awarded the prestigious ‘Asia Responsible Entrepreneurship Awards (AREA)’ 2014 for its exemplary contribution in corporate social responsibility under the category of ‘Health Promotion’. Dr. Iqbal Anwar, Chief Executive Officer, Prime Bank Foundation was invited to the official awards ceremony at JW Marriott, New Delhi, India to receive the award.

Enterprise Asia’s ‘Asia Responsible Entrepreneurship Awards (AREA)’ recognises and honours Asian businesses for championing sustainable and responsible entrepreneurship in the following categories: Green Leadership, Investment in People, Health Promotion, Social Empowerment, SME, CSR and Responsible Business Leadership. The awardees must demonstrate their commitment, advocacy, integrity and leadership in incorporating responsible and ethical values in their businesses. This award itself speaks volumes about the considerable role that PBF is playing in the CSR sector of the country. Gaining international recognition for its commendable eye-care initiative in the form of the Prime Bank Eye Hospital has established the fact that PBF is truly a maker and is committed to sustainable and responsible practices. In a developing country like Bangladesh where there is great potential but enormous deprivation, millions of people live below the poverty line and lack access to fundamental services. PBF recognises the talents, capabilities and potential of those it serves, and believes that the underprivileged can be the agents of their own advancement. Based on this conviction, the Foundation emphasises empowerment more than aid, and designs all its activities to address

Dr. Iqbal Anwar, CEO, PBF (right) receiving “AREA” award

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Without education, an entire nation can become paralysed. Education is an essential component for human development and empowerment – this is the core belief behind Prime Bank Foundation’s (PBF) Education Support Programme (ESP).

The youth of Bangladesh can reach great heights if they are equipped with essential academic qualifications. This has been proved year after year through the professional and academic success achieved by the recipients of the scholarship under ESP. That is why Prime Bank Foundation vigorously pursues its ESP which provides a ray of hope to thousands of underprivileged yet meritorious students to their plight. The ESP allows

deserving students to pursue higher studies (graduation and post-graduation) by ensuring a much needed, long term but renewable scholarship programme.

This unique programme was launched in 2007 to remove the access barriers faced by many deserving yet destitute students. 2014 marks the 8th year of the programme where another 401 underprivileged but

Dr. Atiur Rahman, Governor, Bangladesh Bank giving a speech as the Chief Guest

Education

Education Support Programme (ESP)

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dvD‡Ûkb wkÿve„wË cÖ`vb K‡i‡Q

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meritorious students were awarded stipends. This figure represents the highest number of recipients in one year since ESP’s inception.

This year, like every year, the selected students attended an award giving ceremony where renowned personalities like Prof. Abdullah Abu Sayeed, Prof. Jamilur Reza Choudhury, Father Benjamin Costa and Barrister Rafique-ul Huq as well as others were present. The ceremony was held on September 21, 2014 at LGED Auditorium (Level-2), LGED Bhaban, Agargaon, Sher-E–Bangla Nagar, Dhaka-1207. To encourage and congratulate these brilliant students from all over the country, Prof. Abu Sayeed made a speech in which he stated the importance of pursuing one’s dreams despite adversities. He also emphasised that if someone remains sincere about achieving their target, they will definitely succeed.

The highlight of the ceremony was the handing over of the first installment of the scholarship to each of the selected student through an electronic medium. This was the first time that students received their first installment through the Automation method. It took only one click to disburse the first installment simultaneously to all the bank accounts of the students selected in 2014. Dr. Atiur Rahman, the Chief Guest and Honourable Governor of Bangladesh Bank, initiated the Automation process.

The selected students will be provided with a monthly stipend of Tk. 2,400 for completing their graduation and post graduation level studies in the country’s public universities, medical colleges/engineering and agriculture universities. Thus, the ESP ensures a reliable financial support for students who feared that they might have to sacrifice their education due to economic hardships.

With the inclusion of these students, the total number of poor but meritorious students who are the recipients of Prime Bank Foundation stipends now stands at 2,072.For awarding stipends in 2014, the same process of the previous years was followed: applications were invited from extremely poor but meritorious students through advertisements in the country’s leading national dailies and potential candidates were selected by the Foundation’s Advisory Committee.

The Foundation continues without fail, to acknowledge the contributions made by its Advisory Committee, which was constituted in 2007 for selecting awardees. The Advisory Committee consists of three distinguished personalities of Bangladesh, namely Prof. M. Q. K. Talukder, Chairman, Centre for Women and Child

Health and Chairperson, Bangladesh Breast Feeding Foundation (Chairperson of the Advisory Committee), Prof. Jamilur Reza Choudhury, Educationalist (member of the Advisory Committee) and Father Benjamin Costa, Educationalist (member of the Advisory Committee).

PBF maintains a database which has been constructed to preserve all relevant information of the applications based on which the compilation sheet is generated which is then provided to the Advisory Committee of PBF for its ESP. The Advisory Committee then develops a set of criteria for the selection and recommendation of the most deserving students. After the Advisory Committee set the minimum combined CGPA marks which will make the stipend candidate eligible, the PBF Officers individually conduct a one-to-one Validation Exercise (VE) on the primarily selected applicants. Through this process PBF Officers validate their infromation, academic papers, economic hardship and how derserving each student is, including other sources of income along with the applicants’ dire necessity.

The ESP follows strict guidelines where gender equality is concerned; the female to male ratio of 3:7 must be maintained to ensure that a sufficient number of both genders receive assistance.

Considering the huge number of applicants, one of the major challenges of the whole process is to select the most deserving students. Yet PBF has been pursuing, its target of providing helpless students the chance to their misfortune and shape their future in a steadfast manner.

In keeping with this year’s theme, the next portions of the report will portray to what extent this unique initiative of PBF has changed young lives.

Many of the recipients of the PBF stipend have completed their education and are now established doctors, engineers, teachers of universities/colleges, employed in the BCS, bankers or involved in the non-governmental sector. They have improved not only their own lives, but also their families’ lifestyle and status. They are contributing to the benefit of the society and are examples of what hard work and dedication can achieve. Many of these established individuals have expressed their gratitude to Prime Bank Foundation for the significant role it played in helping them to fulfill their dreams when they had lost all hope. Prime Bank/PBF’s contribution towards the betterment of thousands of financially challenged students’ lives as well as their families’ future is and will always be regarded as a highly commendable activity.

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Following are some stories of such individuals whose lives have completely changed because of Prime Bank Foundation’s stipends:

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Rashida Sultana: The small house in Balyani, Pabna was the only asset of Rashida Sultana and her family of five, which included her parents and two brothers. Her father was a fourth class employee at Narsingdi’s USC Jute Mills. Simply fulfilling his family’s daily needs seemed impossible at times, it is needless to say that supporting his children’s education was clearly a massive challenge!!

Rashida Sultana’s Life Now:Rashida Sultana was selected for the PBF stipend in 2007, laying the foundation for a brighter future. She expressed her gratitude to PBF thus: ‘Not only did PBF’s scholarship help me tremendously, I earnestly believe PBF was a guide as well as a guardian. A status report regarding the academic performance must be sent every 3 months-this encouraged me to maintain good grades. I believe this process helps the recipients to maintain good results as well as provide a steady economic support. This stipend has made the struggle to pursue higher studies bearable for many desperate students like me. Today I am a Medical Officer at Birol Upazilla’s Health Complex, my profession has brought a massive improvement in my family. The crucial role that PBF played in my life will never be forgotten. My prayers and best wishes will always be with the people involved with PBF.

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Golam Sarowar:Golam Sarowar’s father was an ordinary sharecropper for whom even managing the daily costs was a burden. Golam Sarowar did not even have a good set of clothes after managing to gain admission at the prestigious University of Dhaka. As a student, there were days when arranging even two square meals a day had been impossible for him.

‘Studying in a university is only a distant dream for students who come from families like mine. Considering the difficulty my father was facing to support our family, my decision to study in the university was similar to committing suicide. There was simply no way my family could help me bear the costs of studying in the University of Dhaka. I have no idea what my fate would have been if I hadn’t been selected for the stipend from PBF that year, but I am quite certain that my dream of having a job like this would have remained just a dream!’

After Employment:Today, my family no longer suffers from crippling poverty, the days of hardship are now over and we have gradually risen in the eyes of our society. Our status has improved, people of different classes now consult with my father regarding their problems. The man who was once regarded as a destitute person is now respected among all the levels of society in our area. These changes began when I started receiving the stipend, that is why I am forever grateful to PBF. Prime Bank has undertaken a highly commendable initiative which will help not only extremely needy students but their helpless families as well.

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Najma Jabin:Every single recipient of PBF’s scholarship is extremely meritorious and in dire need of financial assistance. PBF tries to make the rocky road of higher education slightly bearable for such students; Najma Jabin was one such student.

Najma Jabin became a recipient of the PBF stipend from 2008 and completed her graduation & post-graduation in English Literature with distinction marks from the University of Dhaka. ‘I have no hesitancy in saying that PBF has assisted me considerably in reaching the position that I am in now,’ said Najma Jabin, now a proud BCS Customs Officer. ‘I consider PBF as one of my best guardians. My frustration and tension began decreasing ever since I received the stipend and my result also significantly improved from there on. I became a self-confident person who had received the opportunity to pursue her dream. Even today I mention PBF’s unique programme to everyone and the immense role it has played in my life. I will truly be grateful if I ever have the chance to be of any assistance to PBF.’

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Despite Countless Obstacles, Zulfikar Could Not be Held Back:

Zulfikar Ali Nawab hails from the village of Bakunda in Thakurgaon. His family consists of three sisters and his parents. Apart from a small piece of land and a small hut, they have no other belongings. Despite being uneducated, his family was well aware of the importance of education; yet supporting Zulfikar was a painstaking ordeal for them. His father Md. Mujibur Rahman is affected by paralysis and age-related complications, but still continues to limp and toil away daily in order to support his family.

The small piece of land they owned had to be sold to cover the expenses of his two elder sisters’ marriages. Since both his sisters are also struggling to make ends meet, they cannot share the family’s financial burden. Zulfikar’s younger sister gives private tuition to students of the area to help pay some of Zulfikar’s expenses.

Since Zulfikar was a meritorious student, the villagers would help him occasionally by giving him zakat or fitra. Despite his hardships, nothing could prevent Zulfikar from steadfastly pursuing his studies; consequently he achieved Golden A+ in both his SSC and HSC and managed to be selected in Rajshahi Medical College. In order to pay the admission fees, he had to sell the two cows his mother was raising. Breaking down into tears, his mother recalled all the backbreaking labour she had to do for her son’s education. She had to resort to digging, breaking bricks, thrashing rice and any other odd jobs which would give her some money, however trivial. She has been depending on the rags that people would give her to wear and cannot recall the last time she wore new clothes. This is a family which was not fortunate enough to eat meat or fish even once a year. They had to rely on the edible vegetations/weeds growing on roadsides which were the only thing they could get for free. Despite severe gastric pain, Zulfikar’s mother never bought a medicine worth Tk. 10 for fear of wasting money.

Ever since Zulfikar gained admission in Rajshahi Medical College, her new fear was how to cope with the high education costs

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There are many students who are not fortunate enough to have a proper meal or a good set of clothes, yet they fight and overcome such obstacles in their desperation for better education. Following are the stories of some such students.

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Wherever I See a Signboard of Prime Bank, I Regard it With Immense Respect

Omor Ali lived in the char village of Putimari Kajaldanga in Chilmari, Kurigram with his family. His family owns a small shack and he used to support his family by working as a day-labourer. However, after Omor Ali’s death in 2005 a painful struggle began for his already struggling family, especially his meritorious son, Jobaidul Islam.

Even on the day before his SSC exam, when all other students were busy with last minute revisions, Jobaidul Islam worked as a day-labourer. He has also had to work as a saw mill labourer, helper of mason and a road constructor to support his family. Despite his hardships, he managed to receive Golden A+ in his SSC. With the fund raised by his school teachers he got admitted for his HSC; however, fearing that he would not be able to cope with the studies of the Science division, considering the fact that he had to work as a day-labourer in his free time to support his family, he shifted to the Humanities Group.

Jobaidul’s father passed away on the day before his HSC exam. Despite such an emotional blow, he succeeded in getting a Golden A+ in his HSC as well. He fulfilled his dream of studying in a university and gained admission in the Social Science department of Rajshahi University.

Although a classmate somehow helped him with his expenditures after joining university, he had to go back to his village in search of some source of income. He started working as a day labourer on alternate months and attended classes in between. This , however, led to a drastic decrease in his class attendance which was very alarming.

That is when he learned about PBF’s ESP advertisement from a friend. After being selected as a recipient of the stipend the uncertainty in Jobaidul’s life significantly decreased, so have his hardships. That is why every time he comes across a signboard of Prime Bank, he regards it with immense respect for the significant role it has played in his life.

†hLv‡bB cÖvBg e¨vsK Gi mvBb‡evW© †`wL, Mfxi kÖ×vq ZvwK‡q _vwK!

KzwoMÖvg †Rjvi wPjgvix Dc‡Rjvi cywUgvix KvRjWv½v MÖvg| b`xi cv‡o †R‡M DVv P‡ii g‡a¨ GKwU Szcwo Ni, el©v G‡jB †ewo euv‡a AvkÖq †bq Zviv| GB P‡iB w`b gRyix w`‡q Pj‡Zv Igi Avjxi cwievi| nVvr K‡i 2005 mv‡j †m P‡j hvq bv †divi †`‡k| ïay †eu‡P _vKvi Rb¨ wbišÍi †Póvq msMÖvg K‡i hv‡”Q Igi Avjxi †Q‡j †Rvevq`yj Bmjvg, GmGmwm cixÿvi Av‡Mi w`bI †Rvevq`yj w`bgRyix †L‡U‡Q, mÕwg‡ji †jevi, ivRwg¯¿xi †njcvi, iv¯Ívi gvwU KvUvmn Ggb A‡bK KvRB K‡i‡Q ‡Rvevq`yj Bmjvg| ZviciI GmGmwm†Z †Mv‡ìb-G cøvm cvq †Rvevq`yj Bmjvg| Gevi Zvi nvB ‹z‡ji wkÿKiv Puv`v Zz‡j Zv‡K fwZ© Kivq GBPGmwm‡Z| †mLv‡b weÁvb wefv‡M covi Pvc ‡ekx Ges gv‡V KvR Ki‡Z cvi‡e bv †`‡L weÁvb wefvM cwieZ©b K‡i P‡j Av‡m gvbweK wefv‡M| K¬v‡ki duv‡K duv‡K w`bgRyixi KvRI Pvwj‡q †M‡Q| GBPGmwm cixÿv ïiæi c~‡e©i w`b gviv hvq Zvi Rb¥`vZv wcZv| ZviciI G cøvm †c‡q DËxY© nq †m| ¯^cœ Zvi GKUvB wek¦we`¨vj‡q cov, Ae‡k‡l eû AvKvw•LZ wek¦we`¨vj‡q covi mva Zvi c~iY nq|

fwZ© hy‡×I `wi`ªZv nvigv‡b Zvi Kv‡Q| RvqMv K‡i †bq ivRkvnx wek¦we`¨vj‡q mgvR weÁvb wefv‡M| fwZ©i ci GK mncvwVi mv‡_ †KvbiK‡g K‡qKw`b KvUv‡bvi ci Avevi A‡_©i mÜv‡b KvR Ki‡Z P‡j hvq MÖv‡g| Gfv‡e GK gvm w`bgRyix Avevi GK gvm wek¦we`¨vj‡q K¬vm Kiv, K‡qK gvm Gfv‡e hvIqvi ci K¬v‡m Dcw¯’wZi msL¨v K‡g hvIqvq KwVb msK‡U c‡o hvq ‡Rvevq`yj Bmjvg| BwZg‡a¨ Zvi wWcvU©‡g›U Gi K‡qKRb mncvwV Zvi `yie¯’vi K_v Rvb‡Z cv‡i| Zv‡`iB GKRb cwÎKvq †`‡L Rvb‡Z

kZ evav wWw½‡q †Rvevq`yj Bmjvg, GLb ivRkvnx wek¦we`¨vj‡qi QvÎ

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5of studying in the city. Tension and anxiety has made her weak and ill; desperate to support her son’s education, she borrowed money from whoever was willing to lend some and somehow managed the costs for a few months. Yet the future had become dreary since borrowing until the completion of Zulfikar’s studies was not a feasible option.

However, after Zulfikar started recieving the PBF stipend, his mother has had some relief. Without this financial support, she might have had to ultimately sell the small hut they own. Every time she prays, she thanks Almighty Allah for this immense blessing and begged the authorities to continue the stipend which has been a life-saver for her son.

cv‡i cÖvBg e¨vsK dvD‡Ûkb Gi wkÿve„wËi weÁwß| GK eÜz †gvevBj †dv‡b †Rvevq`y‡ji Qwe Zz‡j e,wËi Rb¨ Av‡e`b Ki‡Z e‡j Zv‡K| Ae‡k‡l e„wËwU †cj †Rvevq`yj Bmjvg| Gid‡j Zvi Rxe‡bi Pig AwbðqZv †K‡U hvq| †m e‡j Avwg †hLv‡bB cÖvBg e¨vsK Gi mvBb‡evW© †`wL Mfxi kÖ×vq ZvwK‡q _vwK, †Pv‡L Rj G‡m hvq|

234


This Scholarship has Been a Turning Point in My Life

At one point, begging on the streets had become an impending possibility for Mosammet Naznin Nahar and her family. Naznin belongs to a poverty-stricken family of Nilphamari. After her father passed away due to a heart attack in 2005, their financial situation went from bad to worse. Their only belonging was the ramshackle hut made of mud, wood and bits of tin. After her father’s death her mother started working in a rice mill where her grandmother and aunts also worked. None of her relatives were in a position to provide any kind of financial help to her family since everyone faced the same hardships.

Naznin Nahar’s younger sister works as a maid in someone’s house and her younger brother can no longer go to school as he has only torn rags to wear and a uniform is beyond their means.

Arranging sufficient food for her family is a daily challenge since her mother’s salary from the rice mill is meager compared to their needs. Having a proper meal with fish or any other protein is only a dream for this family which sometimes survives on nothing.

Despite all these hurdles, Naznin Nahar managed to secure Golden A+ in her SSC and become the centre of discussion in her area.

Even though she wanted to, she did not dare to apply to any college located in the town for admission. With the help of her school teacher she got admitted in Syedpur Local Kamar Pukur College and achieved a Golden A+ in her HSC as well.

Due to her excellent result and keen desire to pursue her studies, her mother sold her cow, their only other asset to meet the costs of admission to Rangpur Carmichael College. Fearing the costs, she did not apply anywhere better.

At one point, meeting the expenditures of Rangpur Carmichael College was becoming impossible. Unable to move forward due to financial constraints, Naznin was seriously considering stopping her studies. That is when a life changing event occurred - she was selected as a recipient of the PBF scholarship.

Naznin now dreams of studying in a university, she has been selected at Haji Mohammad Danesh Science and Technology University. She has even restarted her younger brother’s school.

Naznin’s mother expressed her heartfelt gratitude to PBF for helping her daughter to continue her studies. Their situation had become so dire that she had been thinking she might have to send Naznin to work in a garments factory to help support the family. But that is no longer an option, thanks to PBF.

GB e„wËUv Avgvi Rxe‡bi †gvo Nywi‡q w`‡q‡Q :

wbjdvgvix †Rjvi GK AwZ wi`ª cwiev‡ii mšÍvb †gvmv¤§r bvRbxb bvnvi| evev 2005 mv‡j ü` †iv‡M g„Zz¨ eiY K‡ib| Zvici †_‡K Avgv‡ì Ae¯’v GZB KiæY wQj ZLb g‡b nw”Qj †h wfÿv Qvov †Kvb Dcvq †bB Avgv‡ì, e‡jb bvRbxb| K…wl Rwg‡Zv `~‡ii K_v _vKvi NiUzKz 3 kZvsk Rwgi Dci, Kv`vgvwU euvk Avi cyivZb wUb w`‡q ˆZwi GB NiwU Avgv‡ì GKgvÎ mnvq m¤^j| evevi g„Zzï ci bvRbxb bvnvi Gi bvwb Zvi gv‡K wb‡q GKwU av‡bi PvZv‡j KvR †`q| bvwb LvjvivI GKB PvZv‡j w`bgRyix Ki‡Qb| Zv‡ì Ae¯’vI GZUvB bvRyK †h, mnvqZv Kivi gZ †Kvb my‡hvM †bB| bvRbxb bvnvi Gi †QvU †evb A‡bï evwo‡Z wS Gi KvR K‡i| Afv‡ei Zvobvq GK gvÎ †QvU fvBwUI ¯‹z‡j †h‡Z cvi‡Q bv| wKfv‡e hv‡e! ¯‹z‡j hvIqvi gZ †Kvb RvgvKvcoI ‡h †bB Zvi! †Rv‡Uwb wVKg‡Zv `yB †ejv LveviI| av‡bi PvZv‡j gRyix w`‡q †h Pvj cvq Zv‡Z A‡bK K‡ó eQi cvi Ki‡Z nq Zv‡ì| gvQ, ZwiZiKvix †Kbv Zv‡ì Rb¨ †KejB ¯^cœ| GK bvMv‡i K_v¸‡jv e‡j hvb bvRbxb bvnvi|

G‡Zv Afv‡ei ciI †_‡g _v‡Kwb bvRbx‡bi †jLvcov| GmGmwm‡Z †Mv‡ìb-G cøvm †c‡q Av‡jvPbvi †K›`ªwe›`y‡Z P‡j Av‡m bvRbxb bvnvi|

¯^cœ _vK‡jI kn‡ii †Kvb K‡j‡R fwZ© nIqvi `ytmvnm †`Lvqwb bvRbxb| ¯‹z‡j wkÿK‡ì mnvqZvq fwZ© nq ˆmq`cy‡ii ¯’vbxq Kvgvi cyKzi K‡j‡R| GBPGmwm‡Z I G-cøvm †c‡q DËxY© nq †m| bvRbxb e‡jb Òfvj †iRvë Avi covi cÖwZ cÖej AvMÖn I B”Qvi Kvi‡YB Zvi gv GKwU Miæ wewµ K‡i fwZ©i UvKv †`b, †mB UvKv w`‡q fwZ© nB iscyi KvigvB‡Kj K‡j‡R| A‡_©i Afv‡e Ab¨ †Kv_vI †_‡K fwZ© dig wb‡Z cvwiwb, GKch©v‡q KvigvB‡Kj K‡j‡RI cov Pvwj‡q hvIqv AwbwðZ n‡q c‡owQj Avgvi| Pig A_© msK‡U Avi G¸‡Z cviwQjvg bv, Pvwiw`K AÜKvi n‡q AvmwQj| ÿzavi hš¿Yvq †f‡e cvw”Qjvg bv wK Ki‡ev, Ggb mgq cÖvBg e¨vsK dvD‡Ûkb Gi e„wË †c‡q Avgvi Rxe‡bi †gvo Ny‡i hvq|Ó

Gevi wek¦we`¨vj‡q fwZ©i ¯^cœ †`L‡Q bvRbxb| cÖej AvZ¥wek¦vmx bvRbxb wVKB RvqMv K‡i †bq nvRx †gvnv¤§` `v‡bk weÁvb I cÖhyw³ wek¦we`¨vj‡q| ïay ZvB bv GB e„wËi fimvq bvRbxb Gevi †QvU fvB‡KI ¯‹z‡j fwZ© K‡i w`‡q‡Q|

bvRbxb Gi gv Rvbvq Avcbv‡ì GB mn‡hvwMZvUv bv †c‡j Avgvi †g‡qi †jLv cov eÜ n‡q †h‡Zv| bvRbx‡bi evevi g„Zyï ci Avgv‡ì Afve-AbUb Avi K‡ói K_v e‡j eySv‡Z cviebv, DcvqšÍ bv †`‡L bvRbxb‡K Mv‡g©›Um G PvKzix †Ìqvi c_ LyuRwQjvg| Avgvi †g‡q‡K mvnvh¨ K‡i KZ eo DcKvi †h K‡i‡Qb Zv e‡j †kl Ki‡Z cvi‡ev bv| Avcbv‡ì Rb¨ AvRxeb †`vqv K‡i hv‡ev Avwg|

nvRx `v‡bk weÁvb I cÖhyw³ wek¦we`¨vj‡qi QvwÎ bvRbxb bvnvi bvRbxb bvnv‡ii gv, ¯’vbxq GKwU av‡bi K‡ji kÖwgKv

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6

235

Why ESP of PBF is Unique : � Every year in the month of April we publish advertisements in two of the highly circulated daily

newspapers in the country. � Prerequisites for eligibility are mentioned in the advertisement like GPA, necessary papers, parents’

income, place and date of submission, etc. � Application forms, newspaper advertisements and the list of preliminary and finally selected awardees

are uploaded in the foundation’s website. � The applicant gets one month’s time to submit applications, then all applications are checked manually

to detect any error against the prerequisites after which the data entry of valid applications begins. � A strong database is being used which helps to sort out applications according to division/district/

upazilla/gender/science/humanities/commerce/any special group/CGPA/parents income etc. � In the database a lot of personal information such as the student’s name, parents’ name, address,

account number and branch, how many students passed out, completed graduation, dropped out, current awardees, academic status, outstanding performance, subject, institution, etc. are preserved

� Any wrong information can also be checked through the database. � PBF conducts one to one Validation Exercise as per the guidelines set by the Advisory Committee. � The Validation Exercise is a process to identify the most deserving and appropriate applicants by on site

and off site interviews of the primarily selected candidates in the branch of PBL nearest their residence and at their institutions.

� Through this (VE) process project officers validate their information, academic papers, economical hardships, other sources of income and appetite for the stipend of applicants.

� Annual service charge of bank account (not ATM) of the awardees is waived � After successful completion of their higher studies PBF helps the awardees to avail internships and

apply for jobs in PBL and PBF

The mother and grandmother of scholarship recipient, Md. Najmul Islam cry as they describe their daily hardships

This aged man works as a ‘bidi’ maker, he is the father of a student of Bangladesh Agriculture University

The father of a student of Rangpur Medical College works as a labourer

Fahima Mili’s father continues to support his family by working in a tea stall

Following are Depictions of the Daily Ordeals that the families of Some Recipients of the PBF Sti-

pend Face:

236


Avwg †R‡b AZ¨šÍ Avbw›`Z †h cÖvBg e¨vsK †`‡ki `wi`ª †gavex wkÿv_x©‡ì Rb¨ gvwmK e„wË cÖ`v‡bi Kg©m~wP MÖnY K‡i‡Q| GBwU gvbweK Ges mvgvwRK D‡`¨vM| Avwg Gi AKzÉ cÖksmv KiwQ Ges GB Kg©m~wP Ae¨nZ ivLvi Rb¨ Aby‡iva KiwQ| RvwZi †mevq cÖvBg e¨vs‡Ki GB Ae`vb wbðq BwZnv‡m wjwLZ _vK‡e

cÖvBg e¨vsK wjwg‡UW weMZ K‡qK eQi a‡i †h mKj KvRKg© cwiPvjbv K‡i Avm‡Q Zv cÖksmvi `vwe K‡i| Gi mydj AbvMZ evsjv‡`k †fvM Ki‡e| †eMg †iv‡Kqv wek¦we`¨vj‡qi wkÿv_x©‡ì Rb¨ †h mKj e„wË BwZc~‡e© †`qv n‡q‡Q, Zvi Rb¨ cÖvBg e¨vsK wjwg‡UW KZ…©cÿ‡K abëv` RvbvB Ges Avkv Kwi fwel¨‡Z GB e„wËi cwimi AviI evo‡e|

D”P wkÿvi c‡_ cÖk¯’ Kivi GB D‡`¨vM‡K Avwg AvšÍwiKfv‡e mvayev` Rvbvw”Q| cÖvBg e¨vsK dvD‡Ûk‡bi GB mvgvwRK Kg©m~wPi mdjZv Kvgbv KiwQ|

cÖvBg e¨vsK KZ…©K cÖ`Ë wkÿve„wË Mixe I †gavex QvÎ-QvÎx‡ì D”P wkÿvi c_‡K cÖmvwiZ Ki‡e| Avwg GB D‡`¨vM‡K mvayev` RvbvB| wkÿve„wËi Kg©m~wP fwel¨‡ZI Ae¨vnZ _vK‡e e‡j AvkvKwi|

wcweGd Gi e„wË m¤ú‡K© K‡qKRb wkÿv cÖwZôvb/wefvMxq cÖav‡bi D×…wZ:

237

PBEMS Prepares Pupils for Lifelong Learning

Being the new principal of Prime Bank English Medium School (PBEMS), we started the school-year in August 2014 with a series of training-workshops for the teachers on the Methods of Teaching. Having studied education and being a licensed teacher in the Philippines, it is my desire to enhance our teachers’ skills by making them understand the basic concepts and practices of education since most of our teachers have studied in different fields.

I am glad to mention that a huge number of students have enrolled in our two branches (in Mirpur and Uttara) and more are expected to be admitted in the upcoming year. In the Mirpur campus, the student population has doubled, while in Uttara, enrolment has increased by thirty percent (30%). PBEMS will be glad to serve more and more students in the future, that is why we are planning to introduce morning and day shifts at the Uttara campus to facilitate the increasing number of students.

This year, a monthly general faculty meeting was held regularly apart from the class level cluster monthly meetings. Doing so will ensure that the needs and issues of each student will be addressed and the teachers will have a forum to raise issues of concern.

Flag-raising ceremony and singing of the national anthem also commenced this school year. One of the school’s aims is to develop each student to become a good citizen of the country; singing the national anthem is a simple yet important endeavour to develop the students’ respect and love for their country.

Aside from field trips, classes went on educational exposure trips. Class 6, for instance, visited the Pan Pacific Sonargaon Hotel for the US Trade Fair and a tour of the hotel. This trip was related to their Geography and History classes. It was also intended to develop their social skills. When Class 5’s Science lesson was about the parts of the human body, they visited the anatomy laboratory of Prime Bank Nursing Institute (PBNI). Class 4 also visited PBNI’s nutrition laboratory when they tackled nutrition in Science class. Such learning experiences deepened the understanding of the topics because they became more meaningful to the students.

Teachers were also encouraged to attend educational trips. We provided them with a schedule of activities in the city such as exhibits, concerts, literary fairs, etc.

The more the teachers are exposed to such activities, the more their horizons will widen. The more they are inspired, the more interactive and engaged their lessons will become.

As PBEMS is concerned about the safety and protection of students, teachers, and staff, we held fire and earthquake drills during the first semester. Despite the difficulty in organising this event, courage and determination won over, and the drills were finally staged on October 13, 2014 to commemorate the International Day for Disaster Reduction in collaboration with the Fire Service and Civil Defense Ministry. The activity aimed to prepare everyone on what to do when unforeseen disasters such as fires and earthquakes arise.

We also celebrated Universal Children’s Day for the first time this year on November 20 through a presentation of the students’ talents, a debate for Classes 5 and 6, and a movie date for parents and children. Before the movies, the parents were advised on how to select appropriate shows for children and to screen cartoon shows before letting their children watch. Parents were made to understand that many children learn violent acts through watching cartoons with violent and offensive scenes. After the show, the parents were encouraged to discuss the movie with their children, particularly the values depicted there and how the children can apply them.

A health programme was introduced this school year. Students from Prime Bank Nursing Institute taught our students the proper ways to take care of the body and how to live a healthy life.

Mr. Blas Ofelie S. Descallar, Principal, PBEMS

Prime Bank English Medium School (PBEMS)

238


An official from Fire Service & Civil Defence staged a Drill for Fire & Earthquake at PBEMS premises

Counseling not only to students but to teachers and parents is also underway from this year. Guidance and counseling is an integral part of every school in most parts of the world so we are integrating it as we are striving hard to set international standards.

To inspire our teachers in their profession, we also arranged a one-day retreat at a serene location in Gazipur District. The first activity that day was a self-reflection on their motives and purpose for teaching. Here, they discovered why they want to teach and their decision to teach was reinforced. They also reflected on how they can improve as teachers. After the individual reflections and small group sharing, the teachers watched an inspirational Chinese movie entitled “Not One Less.”

We also organised a training-workshop for our support staff to help enhance their ability to care for our students.

I am hoping that all the pupils will benefit to the fullest from all the endeavours that the school is undertaking this year and in the coming years.

Recently I attended the Cambridge Schools’ Conference in Colombo, Sri Lanka with more than 300

participants from 32 countries. The conference theme was “Inspiring Teaching, Inspiring Learning.” Discussions were focused on the attributes of a Cambridge teacher: being confident, reflective, responsible, innovative, and engaged. While listening to the keynote speeches and workshop discussions, I realised that what Cambridge is espousing is actually not new to PBEMS. Our school has long been working hard to inculcate and develop these attributes in our teachers, and in various activities of the school.

In one of the series of training sessions I conducted for the school teachers, one teacher asked me which method of learning would be of great help in preparing students for the “O” and “A” level examinations. During that time, we were discussing the differences between two types of learning: the traditional and the progressive (interactive methods). Prime Bank English Medium School adopted the later while most, if not all, schools in the country used the traditional method.

All the class activities are done in an interactive way, which have been adopted by PBEMS since its inception in 2008. This prepares the pupils adequately for the “O” and “A” level exams. The recent additional activities and practices have made PBEMS more in tune with Cambridge’s goal of developing teachers who are confident, reflective, responsible, innovative, and engaged. Despite the challenges and limitations faced by PBEMS in employing a high and international standard of education, PBEMS is determined to strive in preparing pupils not only for the “O” and “A” level exams but most importantly, for lifelong learning so that they excel wherever they may be and in whatever profession they will take up in the future.

Blas Ofelie S. DescallarPrincipal

Prime Bank English Medium School (PBEMS) is an ideal institution to form a child into a shape which is fit for serving the nation in the future. It is an institution, where we encourage a child to be an architect of his own life, to serve the country properly in the future and to be a responsible adult. The school follows the Interactive Learning Method which includes the process of interacting, where the students act and learn very

spontaneously, not according to a fixed syllabus. All the students have the opportunities to act freely, they have the room to show their talent and flourish. The school follows a holistic approach-it means we make the students work physically, mentally, emotionally and spiritually; such an approach engages and develops the whole person.

Prime Bank English Medium School - We care

239

A child has conscious and unconscious aspects and rational and irrational aspects. We support a child and try to develop their unconscious aspects in a caring way. We support our students to use all of their intelligence and insight rationally, logically, creatively and in a harmonious manner.

PBEMS focuses on individual development. We involve each child in various activities like the annual sports day where every student participates. Such activities help to develop the students’ confidence level. Whenever the students perform something and are appreciated and rewarded, it motivates them in a positive way. It raises their courage and adds positive thinking in their minds.

PBEMS is different from other schools because we discourage our students to memorise and recommend reading more. Students do not take their books home for further studies, instead, they are assigned some project work, creative writing or some activities related to their lessons. They are obliged to go through many books or other resource materials to complete the project. This allows them to widen their area of knowledge, enrich their vocabularies, and gather information. This process also helps to reduce the pressure of studies which is a common phenomenon in Bangladesh.

Nowadays, coaching centres have become part and parcel of many children’s daily routine; most of such centres add an extra burden of studies on the students as well as on the budget of parents. The students eventually become exhausted by the end of the day and dependent on the coaching centres. A valuable portion of their childhood is spent memorising notes supplied by coaching centres. PBEMS offers students the opportunity to enjoy their childhood completely, and gain a wholesome education in the process. As our school campus has space limitations, we take our

students to the nearby field twice or thrice a month for sports and games. They get the chance to enjoy the natural view as well as have some physical exercise.

PBEMS promotes group work, collecting study materials, creative writing and presentation skills. Group work helps them to learn sharing, to care about each other and develop a sense of purpose; thus they are groomed to be good citizens and responsible individuals.

PBEMS focuses on social development and community services. The students are involved in a campaign called “Give Love This Winter” which distributes winter clothes and blankets to the poor and destitute. Such involvements help to make a child aware of the plight of poor people who are in dire need of basic necessities.

We engage our students in recycling things. The school’s recent programme “A Second Look at Garbage” educates students on how to take care of the environment by disposing garbage properly. The programme teaches the students how to keep their community clean, they also learn to use things properly. Our duty is to make your child a responsible, sensible and honest citizen of the country. If they love themselves, they will also love their country. If they take care of their own things, they will cultivate the love and care for others as well.

PBEMS is an institution which offers quality education at an affordable price; many families dream of sending their kids to an English Medium School but fail to do so only because of high tuition fees. Taking this into consideration, PBEMS offers quality education at a price which caters to the masses. This unique school strives to provide education to those who once thought that an English Medium Education was beyond their reach.

An educated nation has a rich history and culture, which is why PBEMS places great emphasis on cultivating knowledge on both these sectors. Through performing arts, a child flourishes and develops interest in areas other than just studies. Historically and culturally significant days are commemorated with enthusiasm and ardour not only because of their importance but also to develop a sense of awareness and understanding amongst the young learners.

PBEMS hopes to touch many other young lives and shape the future of many leaders. As teachers, we can only hope to guide them and serve a greater good.

Ismat Zerin, Teacher, PBEMS

Teacher Ismat Zerin Khan with Class Six Students of PBEMS

240


My child’s early childhood education: My daughter,

Aparajita Parin studied from Play Group to KG in a

renowned English Medium School at Mirpur for 3

years. There she had to face various problems. She

often got homework which she was not prepared for.

Punishments such as caning was a common practice

among the teachers in that school. The behaviour of

some teachers was beyond tolerable. Attempts to

make changes failed as teachers and administrators

were reluctant to sit for dialogue and plan for

improvement.

Discovering PBEMS: Hearing about PEBMS from a

relative, I became interested and admitted her in Class

1 in July 2013. She was able to cope with her class

immediately as the environment was friendly. She

enjoyed the field trips, music, art and computer classes

and the teachers and management were open and

friendly, enabling us to share our feelings with them.

Deciding for an English version school: But after

six months I and my wife suddenly decided to

transfer our daughter to a newly opened English

version school which is closer to our residence at

Mirpur Cantonment. She was admitted in Class 1 in

January 2014. We and our daughter were happy at

the beginning because the school was under the

management of the Defence Ministry. The school’s

playground and canteen were big and the building

was good. However, day by day, we got negative

feedbacks about the school and observed those

feedbacks personally. One example is the use of slang

language by the teachers to the students. Punishing

students by letting them stand on the table while

holding their ears was another concern. There was

also discrimination towards civilian students, home

works were not checked, sister/aya’s behaviour was

improper, girls could not play on the playground and

students could not go to the library. Moreover, the

age difference was too high in Class 1, which ranges

from 6 to 10 year olds. My daughter had reached the

point of not coping with that kind of environment

anymore. She cried almost every day and lost her

interest in going to school. My wife and I reflected on

the situation and decided to bring our daughter back

to PBEMS.

Returning to PBEMS: In July 2014, we sought

readmission of my daughter at PBEMS. Now, she is in

Class 2 and always excited to go school. She always

shares what happened in class every day with lots

of excitement . Thanks to Prime Bank Foundation for

taking the initiative to establish a school which uses an

interactive and child-centered methodology under the

Cambridge Curriculum.

Kazi Rajibul Haque

Father of Aparajita Parin

Student of Class-2

PBEMS-Mirpur

Aparajita Parin with her father

A school that truly cares and child-centered

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A school that provides quality education to all

Thoughts on beginnings: In July 2008, as I was driving around Sector 6 in Uttara passing through Road 13, an attractive neon sign on a building attracted my attention. I stopped to check the information posted. Upon entering the building, I saw a lady sitting on a wooden chair. I asked the woman who the office belonged to and for what. She humbly welcomed me and briefed me about Prime Campus which is presently known as Prime Bank English Medium School (PBEMS). In her briefing, some special features attracted me. First, the school was founded by Prime Bank Foundation. Secondly, the Principal Dr. William C. Engels, was an American educator. Thirdly, the cost is surprisingly affordable since English medium schools which are sprouting like mushrooms in the city have skyrocketing school fees. My son’s future: At that time, I thought of my dear son Nafiu Zahid Tanjim. In my heart, I wondered whether my son could get the opportunity to be admitted in the school since he is physically challenged. Due to a lot of challenges, many children are deprived of their basic right to education. I bore the heavy load of my son’s denial of admission in many schools. I was desperately waiting for the day when I could put my son in the mainstream society. I could not find an alternative education for Nafiu so I dared to seek his admission at PBEMS.

Finding a ray of hope: After some time, the lady took me to the Principal’s office. That time, along with the Principal, there were two other elderly American ladies sitting in the room. They all welcomed me and gave me more information in details about the school. I told them that my son can’t walk as he is physically challenged. I asked them whether he could be admitted in the school. To my surprise, they all assured me that he could join the school. I knew right there and then that this school was right for my son.

Nafiu’s admission: After learning all the details about Prime Campus, I registered my son and he was admitted in Nursery class. During the first parents’ meeting, the Principal explained the goals of the school which are actually similar to what I envisioned for my son. Now, I see my expectations being realised. I see that the school is heading to its ultimate destination. I’m extremely grateful to the school authorities for giving my son a chance to attend school.

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Prime Bank English Medium School (PBEMS)K

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My feelings about Nafiu’s studies: I am grateful and very pleased about my son’s admission at PBEMS and in seeing his learning progress. He has acquired good English speaking skills. When my foreign business colleagues visit our residence, they speak in English with my son and spend most of their time with him. My heart overflows with joy when I see my son’s confidence in speaking with foreigners. My son was admitted in this school in 2008 and he is walking together with his physically-able classmates in the path of learning and is now studying in Class-V. I am hoping that each year he will complete a new level successfully and finally move on to appear for O and A level examinations.

My confidence in PBEMS: Personally, I hope that the authorities of Prime Bank Foundation are experimenting PBEMS in Uttara as a pilot school and will replicate this noble project in other places. I am delighted to know that a campus in Mirpur has been running for three years. I wish that more and more PBEMS will sprout like mushrooms not only in the capital but throughout the entire country. I also hope that more and more dedicated teachers and staff members will work tirelessly to ensure that students of PBEMSs will become responsible and good citizens of Bangladesh. Teachers at PBEMS have taken the initiative in moulding the children’s attitude and behaviour by making them courteous, morally strong and advocates of culture and heritage. All the endeavours being initiated make this school unique and better than any other modern English Medium Schools in the country.

Parents of physically challenged students need to be more aware about their child’s rights. A disability doesn’t mean that children don’t have a future. Rather, we need to give psychological and social support to these children and have a positive attitude. Our physically challenged children can live a normal and functional life if we get a support system such as PBEMS. My son is not the only physically challenged student at PBEMS. I am very grateful that this school welcomes and cares for every child who knocks at its door.

Conclusion:For six years, I have been facing a lot of questions from parents/guardians of students who do not understand the different set up and methods use in PBEMS. I tried my best to make them understand the unique nature of the school as it is really different from most of the traditional schools in the country. The administrators of Prime Bank English Medium School are seasoned educators whose desire is to mould each child not only to be academically sound but also to be morally upright and better citizens of the country. Nowadays, I notice that the questions are disappearing. A unique opportunity awaits each child in PBEMS.

Students Name: Nafiu Zahid TanjimClass V, ID No. 00002Father’s Name: Md. Zahidul AlamPrime Bank English Medium School, Uttara, Dhaka

Prime Bank English Medium School (PBEMS)

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Prime Bank Nursing Institute (PBNI) is a commendable initiative of Prime Bank Foundation, a concern of Prime Bank Limited. This international standard nursing education centre was inaugurated on 13 April 2013 with an aim to prepare knowledge based skilled nurses who will provide high standard medical services to all classes of people of the society. Bangladesh, as well as the whole world faces a huge shortage of skilled nurses and in this period of crisis, PBNI as stepped in to this social problem. By placing equal emphasis on technical knowledge, skills, and the development of character and values, PBNI seeks not only to produce competent nurses, but to raise the standards of and expectations from health workers across the country. The institute currently provides a three-year diploma training to students at a comparatively low cost, thereby providing students an opportunity to their and others’ lives through a noble profession.

PBNI’s journey started in 2013 with 40 students of Diploma in Nursing Science and Midwifery. Every year a large number of meritorious students seek admission in this institute, especially those who cannot spend a huge sum for their higher education. Prime Bank Foundation has extended a helping hand to the general people by providing an excellent opportunity for technical learning; scholarships are also available for deserving students in each batch.

As a result of its quality education, the Ministry of Health and Family Welfare, Government of Bangladesh has approved the plan to upgrade this institute into Prime Bank College of Nursing and offer B.Sc. in Nursing (4 years basic and 2 years Post-Basic) courses. Courses will be offered as soon as the affiliation with the University of Dhaka is complete. Plans for introducing M.Sc. in Nursing as well as short Nursing Certificate courses for different professionals are also being contemplated.

In order to produce highly qualified nurses it is extremely necessary to provide high quality faculties, a well disciplined administration, modern lab facilities and clinical practice in specialised hospitals for practical experience and hands-on training.

Technical Assistance:

Professor Ratna Prakash, Ph.D. (Consultant) is the Principal, Pal College of Nursing & Medical Sciences, Haldawani, Uttarkhand State, India. She is also adjunct Professor of School of Nursing, Minnesota University,

USA. She was assigned as a consultant for a Project named –‘Establishing Prime Bank College of Nursing as the Nursing Education Centre of Choice for the Potential Nursing Students of the Country and Beyond’. She made a deliberate analysis of the institutional practices and presented elaborate recommendations. The purpose of the project was to establish and run a high standard nursing training institute for the development of highly skilled nurses needed to meet the increasingly high demand of qualified nurses by different health care service providers in the country and beyond. PBNI is trying its best to properly implement the recommendations given by the consultant in order to improve the quality of education of the institute.

A MoU has also been signed with the Cebu Normal University of Philippines to ensure high-quality technical assistance to sustain the persistent effort to upgrade and improve the institute.

Lab Facilities:

All the facilities of modern teaching and accommodation are available for students such as a well-furnished female students’ hostel, well equipped classrooms with multi-media and projector, fully air conditioned, modern library, well equipped medical laboratory, modern English language lab, large computer lab with full internet access, etc.

Clinical Practice:

Nurses must have sufficient practical experience of hospitals before they begin their career. For this purpose, PBNI has arranged clinical practice visits to a variety of hospitals for its students. Such visits allow students to actively participate in clinical procedures and learn through observation. Along with textbook knowledge, PBNI places great importance on clinical practices. That is why PBNI has made an arrangement with Kurmitola General Hospital (KGH) which is the first of its kind. KGH is a service- oriented project of the civil-military partnership financed by the Health Ministry, supervised by the Defence Ministry, PBNI is the first nursing institute to gain access for clinical practice at this renowned hospital. This in itself is a great achievement for PBNI.

Prime Bank Nursing Institute (PBNI)

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A Teacher is showing the student the appropriate technique of drawing blood at kurmitola General Hospital (KGH), Dhaka.

A student is giving nasogastric tube feeding to a patient at Dhaka Shishu Hospital

A student is giving oxygen inhalion of a patient dur-ing clinical practice A student is giving oxygen inhalation to a patient at Dhaka Shishu Hospital

Students are preparing medicine for patients with the assistance of Senior Staff Nurses at Kurmitola General Hospital (KGH).

A student is observing the Infusion set in the child ward at Kurmitola General Hospital (KGH)

Students directly asses the patient’s condition at Kurmitola General Hospital (KGH)

Visits by PBNI Students for Clinical Practice to Different Specialised Hospitals:

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Anannya Modak is a second year student of Prime Bank Nursing Institute, without PBNI, Anannya would have sacrificed her dream to become a nurse. Family hardships and unfavourable circumstances were making higher studies seem like an impossible option for her. Yet now, her dreams are about to be realised after being enrolled at the prestigious Prime Bank Nursing Institute.

She pointed out that Prime Bank Nursing Institute provides students with exceptional learning facilities, modern technology and a conducive learning environment. She also mentioned the state of the art facilities, which include different nursing education related labs like: simulation, anatomy, nutrition, microbiology and midwifery. In addition, there is also a well-equipped computer lab and an English language lab which facilitates her with language skills to keep pace with global standards.

Anannya highly appreciates the accommodation provided to her by the Prime Bank Nursing Institute. To her, PBNI’s hostel for the female students is like a second home. The accommodations are fully furnished with

round-the-clock security and are designed to provide a safe and homely environment. The skilled lecturers who are led by the Principal and Vice Principal of the institute have been most supportive and helpful; to Anannya they are not only teachers but guardians who have brought forth an enormous in her life. The teaching methodology that the institution employs engages students in the learning process and creates inquisitiveness. The faculty also closely supervise the students’ progress and provide necessary guidance. Anannya added that all these facilities are providing her with an effective learning and understanding of nursing.

Anannya believes that the nursing profession has the power to make a huge difference in today’s health care system. Nursing advocates for the individual and focuses not only on the treatment component, but also on prevention and health promotion. After joining this institution Anannya is learning the complexity of the profession and how nursing is a key component of the health care system. PBNI has opened up a new opportunity for Anannya, she can now pursue a noble career and be an independent woman.

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PBNI - a Beacon of Hope and a Pathway to a Brighter Future:

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Prime Bank Eye Hospital (PBEH)

Low vision and blindness can have negative impacts on individuals, families, and communities. Impacts may range from a decrease in the quality of life and increased mortality to large-scale economic consequences. From the cultural perspective, blindness is often stigmatised, further alienating the afflicted from their communities. The social disadvantages which occur due to blindness or low vision are also significant because it leads to a loss of social standing and decision-making authority; a large proportion of blind women note a loss of authority within their families. It is needless to say that the impact of blindness and poor vision on quality of life is quite alarming for those living in poverty. It is often the impoverished people who are more likely to become blind due to lack of access to health services. Due to the lack of awareness regarding eye health, they also tend to be more susceptible to eye infections and diseases.

Considering these aspects and the dire situation of eye-health in Bangladesh, Prime Bank Foundation took the noble step of opening the Prime Bank Eye Hospital (PBEH) which started its journey from January 21, 2012 with a view to provide eye care services to all at an affordable cost. To strengthen its service, PBEH has signed a MoU with Aravind Eye Care System (AECS), a centre of excellence in eye care, as “Technical Assistance Partner” for receiving necessary guidance. Under their guidance, PBEH is equipped with the most modern ophthalmic equipment, staffed with a renowned group of clinical and non-clinical personnel and is located in the heart of the city at House # 82, Road # 8A, Satmasjid Road, Dhanmondi, Dhaka-1209.

Among its many unique characteristics are PBEH’s experienced and caring team of eye specialists and para-professionals; a one-stop approach to provide a wide range of eye care services; its latest modern ophthalmic equipments; its accessibility to all, with a provision of safety-net for those who cannot afford the treatment; the hospital is “tailored to needs” and is set up to cater to people belonging to different socio-economic strata; the pricing is at a sliding scale for sustainability and cross-subsidisation if needed; 90% of the surgeries are done on day care basis; VIP Cabins, shared cabins and separate wards for both male and female exist and there is also a medicine shop, optic shop and a cafeteria. Without doubt, PBEH provides the

services that any renowned eye hospital may have.Prime Bank Foundation was awarded the prestigious ‘Asia Responsible Entrepreneurship Awards (AREA)’ 2014 for its exemplary contribution in corporate social responsibility under the category of Health Promotion. It is because of PBEH’s activities and performance that the Foundation gained international recognition through this award. Enterprise Asia’s ‘Asia Responsible Entrepreneurship Awards (AREA)’ recognises and honours Asian businesses for championing sustainable and responsible entrepreneurship; it is indeed a great achievement for a considerably new hospital like PBEH to come into the international limelight because of its commendable contribution to healthcare and responsible practices.

Seeing the highly visible impact made in the society through the outreach eye camps, which supplement the base hospital, Prime Bank Limited (PBL) has been assisting PBEH since 2013. Under the leadership of the Head of Branch of the corresponding area, this support continued in the year 2014 too. This year, PBL financed 24 outreach eye camps, the number of patients examined and selected for free surgery was significantly high compared to the year 2013. As a result, many more patients were seen and huge numbers of patients received surgery at PBEH with the financial support of PBL. To reach more people, PBEH conducted a significant number of screening programmes in schools and industries in 2014. The screening programmes help to reach out to more patients, cover different locations of the city and promote the hospital as well. Outreach camps and screening programmes have been a new strategic shift which substantiate the activities of the hospital.

A session with Muslim religious leaders

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Recently, PBEH purchased a 3D OCT (Optical Coherence Tomography) with the aim of expanding its services; the OCT assists in providing full confirmation of Glucoma. In order to make the hospital personnel more capable, PBEH sent two of its Consultants to Singapore to receive

training on the OCT so as to provide its patients with international standard services.

This year, the Administrative Officer of PBEH was also sent to AECS, India, to receive training on “Management Training and System Development for Hospital Administrators”. This course equips hospital administrators with the knowledge and skills necessary to effectively manage an eye hospital both in its day to day operations and to develop a hospital according to the needs of the community it serves. Such trainings help the employees of PBEH to provide better services to the patients and be more competent administrators. PBEH clearly leaves no stone unturned when it comes to providing better care, equipment or services to its patients.

A recent promotional strategy of PBEH has been to create awareness about eye care and eye diseases among different religious leaders of the society. The religious leaders were invited to PBEH to attend a presentation by the hospital’s doctors where curable diseases of the eye were highlighted. By sensitising different religious leaders and representatives of the community, Prime Bank Eye Hospital hopes to raise awareness regarding common eye diseases which are easily curable but remain undetected. Open discussions were held between the leaders and the facilitators of the programme to clear any misconceptions on common eye diseases.

Prime Bank Foundation’s activities in the area of healthcare, and ophthalmic health in particular, extend beyond providing reactionary treatment to those already suffering from eye diseases. Aiming to meet

A session with Hindu, Christian & Buddist religious leaders

the goals defined by the Vision 2020 initiative of the World Health Organisation, PBEH is actively involved in raising awareness of and generating demand for eye health in order to promote the prevention and control of avoidable blindness in the country. To implement its mission to promote health seeking behaviour and early detection and prevention, PBEH regularly runs outreach and screening camps across the country. This is in recognition of the fact that lack of awareness regarding eye health is one of greatest causes for widespread eye diseases, but also to address the practical issue of physical accessibility for those unable to come to the capital to benefit from PBEH’s services.

Reaching More People for Eye Services

Eye problems in Bangladesh are increasing rapidly, as a result, the country’s development rate and socio-economic wellbeing is being hindered. The statistics given below will help shed a clearer light on the present condition:

Sl. Particulars (in Bangladesh) Information

1 Visually impaired 15,00,000 (1.1%)

2 Visually impaired (children) 40,000

3 Children visually impaired due to cataract

12,000

4 Incidence rate (every year) 1,50,000

5 Visually impaired aged over 30 years

7,50,000 (1.53%)

6 Sufferig from Cataracts 6,50,000

7 Having Refractive Error (people) 33,00,000

8 Having Refractive Error (children)

13,00,000

9 Annual Cataract Surgery Rate 1100 per 1 million

People having eye problems are not very interested in availing eye care treatment from any nearby eye care centre/hospital. The common reasons behind their hesitancy are:

� fear of surgery

� the wrong assumption that eye problems are an age related matter and is natural

� inability to bear the treatment costs

� no accompanying person

� bad transport facilities

� the closest eye service centre is very far

� fatalistic attitude (eye defects are “Allah’s will”, and that they will survive “somehow” even with acute eye problems)

� tension about obeying post-operative recommendations properly

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The reason why people are reluctant to seek eye care treatment varies with geographical and cultural settings. From our experience, we believe there is a huge demand for eye care treatment in and around the country but the supply side facilities are not sufficient. Lack of awareness of available eye care treatment and lack of understanding of eye services are some of the root causes for which people are not availing eye services.

To address the above causes, Prime Bank Eye Hospital (PBEH) has taken different steps to eliminate the doubts and confusions usually seen in eye patients. Initiatives of PBEH include:

� Top class eye care services through Prime Bank Eye Hospital (base hospital)

� Outreach Eye Camps (throughout the country)

� School Screening Camps (in and around Dhaka)

� Industry Screening Camps (within 30 km radius of the base hospital)

Outreach Eye Camp of PBEH:PBEH itself and with the financial support of Prime Bank Limited (PBL), has been providing eye care services among poor people through outreach eye camps

A patient with cataract

Dr. Anthony Albert, Consultant & Project Director performing surgeryin the Operation Theatre (OT), PBEH

throughout the country. About 60,000 (sixty thousand) patients have been examined by these camps and almost 3,000 cataract patients have undergone operations at Prime Bank Eye Hospital.

This great humanitarian role makes PBEH/PBF a “Gateway” for eye patients to obtain necessary eye care. PBEH has gained significant popularity within the short span of time it has been functioning because of its ethical approach, humanitarian goals and unconventional facilities which are available at minimum cost.

From our brief experience as a new hospital it is clear that people having eye problems need to be motivated to seek eye care treatment. When viewed in context, many of the reasons given above start to make sense. That is why we are actively pursuing industrial and school screening campaigns throughout the country, these are elaborated below:

School Vision Screening Programme of PBEH:Childhood blindness is a severe problem in our country. A research study has revealed that about 40,000 children are blind of which 12,000 are due to congenital cataract. The other causes of childhood blindness are vitamin-A deficiency, glaucoma, retinal disease, amblyopic, low vision etc. Besides this, about 9,925 children in every 1 million are suffering from refractive error which could easily be corrected with glasses.

Myopia is one of the most common eye problem faced by children/students. About 59% of child blindness in Bangladesh is preventable, treatable and curable. Child cataract is treatable by timely intervention. The purpose of a school vision screening programme is to identify students with possible visual impairments. Visual problems can and do affect the physical, intellectual, social, and emotional development of students. The key to successful treatment is early identification and intervention which may prevent educational problems and permanent vision impairments. Even mild vision impairments may be educationally and medically significant. Therefore, vision screening programmes should be an integral part of the total school health programme.

Since PBEH has significant experience in eye care with the technical support of Aravind Eye Care System of India, it has enough opportunity to conduct eye screening of students for all schools (Pre-primary, Primary and Secondary) in Dhaka City. On the day of the school screening, a team from our hospital visits the school with eye screening kits in order to indentify visual acuity problems for the students. After preliminary

249

screening by a trained Optometrist, those who are identified with eye defects are counseled and advised by the PBEH team to seek further treatment at our base hospital.

PBEH adopted the School Vision Screening programme since its inception and the performance of the last two years is given below:

YearSchools

ScreenedStudents Screened

ProblemService

received from PBEH

2012 02 141 50 04

2013 10 3,632 417 73

2014 13 3,399 279 90

Total 25 7,172 746 167

Plan of operation for School Vision Screening:

Teachers Orientation: Optometrists, nurses and Field Coordinator/Organiser visits the schools to train all teachers about common eye diseases and vision testing. Eye screening kits, including standard Snellen and illiterate eye charts are provided to teachers for vision screening.

Explanation to Students: It is important that students understand the purpose of vision screening, and their role in the activity. School health personnel should plan time to review the purpose of periodic vision screening, and demonstrate screening procedures prior to the screening for early elementary students.

Preliminary Vision Screening by Trained Teachers: Teachers will screen their classes for refractive errors and ocular diseases, and keep a record of such students.

Vision Screening by Eye Health Team: An eye health team visits the schools and conducts additional exams of pre-screened children to confirm the diagnosis while those requiring further investigation will be referred to the PBEH eye hospital.

Parent/Guardian Notification for Referral of the Identified Students: The success of the programme depends on the implementation of a systematic follow-up procedure including notification to parents/guardians in writing.

School health personnel may precede this with a telephone call, and/or through a parents’ conference regarding screening results requiring a professional vision examination. The aim is to refer the student to an eye care professional and avoid making any

recommendation to a specific individual, or a specific class of practitioner (ophthalmologist or optometrist.).

Treatment and Spectacles Prescribed to the Referral Students: Glasses will be prescribed to children and provided at a subsidised rate at PBEH. Other students (except those with refractive error) will be treated by Consultants as per PBEH policy.

Reference to Other Hospitals (if needed): Low Vision, Childhood Cataract and other complicated students (if needed) will be referred to other service centres where the required services are available.

Preliminary Screening of New and Defective Students by Teachers: Following the initial training, teachers will screen new and defective students every year and normal students on alternating years. Reports will be provided to the PBEH for screening by the eye health team. It is our belief that training of the class teachers to conduct eye screenings will reduce undetected ocular defects in school children and increase the likelihood of students adhering to follow-up requests at eye hospitals. This initiative has the potential to greatly reduce needless visual disparities among Dhaka City school children.

Industry Eye Screening Programme of PBEH

WHO estimates that 153 million people worldwide and 3.3 million people in Bangladesh live with visual impairments due to uncorrected refractive errors. Refractive errors cannot be prevented, but they can be diagnosed by eye examination and treated with corrective glasses, contact lenses or refractive surgery.

The purpose of vision screening in industries is to identify employees in need of ophthalmic services. By having the employees referred to the proper practitioners helps reduce employee fatigue, increases quality control and reduces the risk of accidents. In this context, it is necessary to mention that there are many workers who are not even aware of the problem in their eye sight and continue to suffer from easily curable problems.

PBEH started the eye screening camp for industry workers from January of 2014. Three industrial screenings were held this year where 379 workers were screened. A total of 181 workers were identified with Refractive Error, spectacles were prascribed to 174, 67 spectacles were dispansed and 25 workers were advised for referral.

250


School Vision Screening Programme

Counseling Teachers about School Vision Screening

Preliminary Vision Testing by Teachers

School Children who have Refractive Error (RE) are at PBEH to received further treatment

Counseling Teachers/Students

Vision testing by the PBEH team

PBEH Optometrist identifying Refractive Error of a student

251

PBEH Industry Screening Programme

Vision testing to identify visual problems

Eye examination by a Doctor

Spectacles are prescribed by an Optometrist

Vision testing with a Snellen chart

Doctor speaking with a patient

Spectacles are being dispensed

252


Service Delivery

Direct treatment costs have been a major concern for service users and their families, especially for those belonging to the lower socio-economic classes. Thus, PBEH follows the model of cost plus at a very reasonable price. As a result, patient flow at the base hospital (PBEH) is increasing remarkably day by day. PBEH is well equipped with the most sophisticated ophthalmic equipment. Recently, PBEH has introduced 3D Optical Coherence Tomography (OCT) service at the base hospital in order to provide high class service to patients who have Glaucoma. In order to prepare more accurate medical reports on OCT, two senior Ophthalmologists from PBEH were sent to Singapore for advanced training. PBEH sincerely pursues any avenue which will enhance the performance of its staff and the overall hospital since it aims to provide international standard services to all its patients, regardless of their financial status.

Conclusion:

Prime Bank Eye Hospital aims to raise awareness about the low use of cataract services, and adopt strategies that will promote equality in eye service delivery, access

and use. Our target people are those who do not use or have access to basic eye services. Despite the hurdles, Prime Bank Eye Hospital has performed very efficiently and is committed to continue its eye service as long as there is a demand for it. The main objective of PBEH continues to be a desire to provide international standard services to all.

A patient is being examined by OCT

253

Prime Bank Cricket Club (PBCC)

Sports &Culture

The exuberant team after winning the Dhaka Premier League

Prime Bank Foundation believes that sports is not only a source of entertainment but is also connected with the mental and physical health, and the character development of the nation. As a

whole, Prime Bank has long been a patron of culture in Bangladesh, having sponsored several sporting events over many years. Cricket, no doubt, is a passion of the entire nation.

To offer players a chance to experience the life of professional cricket and to improve their skills, the Prime Bank Cricket Club (PBCC) was formed in 2011. PBCC involves world class players in its team as well as gives an opportunity to local young players a chance to experience the international flavour.

Subsequent plans involve the development of an integrated cricket development programme that has created a pathway for continued athletic progress for promising talents. In addition, PBF was also involved in the general promotion and popularisation of cricket all over the country through participation in various other cricket events/tournaments.

The highlights of the achievements made by PBCC in the 2014 are briefly outlined below:

� In 2014 the Prime Bank South Zone defeated the BCB North Zone by 213 runs in the final round of the tournament and became the champion of Bangladesh Cricket League which is considered

the 2nd highest event in the field of 1st class Cricket Tournament. In this tournament Cricketer ‘Imrul Kayes’ of Prime Bank South Zone was selected as the ‘Man of the Match’.

� Dhaka Premier League is the country’s oldest and premium most club cricket competition. The Cricket Committee of Dhaka Metropolis (CCDM) organises the competition annually and since its inception, DPL is considered as the lifeline of Bangladesh’s domestic cricket. Major sports clubs participate in the battle every year for the prestigious trophy of DPL; DPL has been the nucleus for emerging stars that have later graced the field for Bangladesh. PBCC became the unrivalled champions of the Dhaka Premier League (DPL) 2014-2015 season after winning 13 out of a total of 16 matches and gaining 26 points. The team has been led by Mr. Mahmudullah Riyadh, one of the most promising players of national cricket team. Such an achievement must be attributed to the proper leadership of the team’s coach, Mr. Khaled Mahmud Sujan, ex national player and captain of Bangladesh

254


The exceptional players of Prime Bank Cricket Club (PBCC)

Cricket Team. Organisational professionalism and excellent logistical support were very much instrumental for boosting the motivation of the players in order to be victorious.

� Prime Bank Cricketers Taskin Ahmed, Soumya Sarkar, Mahmudullah Riyad and Taijul Islam have been selected to represent Bangladesh in the Cricket World Cup 2015. This clearly indicates the high quality and skills of the players of PBCC.

� PBCC has a unique blend of players which includes both seasoned performers and budding new talents-this enforces the Foundation’s belief

that young and promising players must be given a chance to excel as well as learn from veteran players. PBCC provides excellent logistical support, a professional and systematic approach and best practices which set it apart and highlights its exceptional standards.

� By becoming the DPL champions, PBCC has proved that its management and coaching methods are truly on par with international standards. A lot is yet to be achieved, but PBCC is slowly but steadily moving towards recognition and fame.

255

Executives of Prime Bank Foundation

Sports � Donation to Fahad Rahman, youngest FIDE Master

of the world for attending 2 tournaments in India in May and June, 2014

� Sponsorship of Ghatail Golf Cup Tournament

� Sponsorship of Indoor University Cricket Tournament 2014

Arts & Culture � Sponsorship of an International Seminar on History

and Tradition organised by ‘Itihas Academy’

� Sponsorship of Pitha Utshab organised by Baridhara Society

� Co-sponsorship of live programme of Borsho Boron & Borsho Biday organised by Channel-i

� Sponsorship of Police Week 2014 organised by Bangladesh Police

� Sponsorship of Sadhinata Utshob organised by BD Communication

� Sponsorship of Beach Football Tournament organised by Impress Telefilm

Disaster Management � Distribution of 35,000 blankets among poor people

Others � Sponsorship of month long Autism Awareness

Programme in April organised by Positive Thinking, an organisation for children with special needs

� Sponsorship of 3rd Leadership Summit organised by Brand Forum

� Sponsorship of International Seminar on Sustainable SME Development in Bangladesh organised by SME Consultant, Bangladesh Bank

� Donation to Government of Bangladesh for organising Lakho Kontha Sonar Bangla

� Sponsorship of National Science Olympiad-2014

CSR Contribution Conducted Directly by Prime Bank Limited (PBL) During the Period Jan-Dec, 2014

256


GO

AL

1

Three Strategic Goals

Make education more accessible

to the target population we

work for

• Made education more accessible to the target population we work for, both access and quality in education have been given attention, as education programmes continued to be implemented.

• Sizeable increases of our programme reached all sixty four districts of the country including the very hard-to-reach areas through ESP, a programme to respond to the needs of the grad/post-grad level, under privileged but meritorious students of the country.

• Availability of low cost quality education to a much larger number of children through Prime Bank English Medium School, Uttara & Mirpur.

• Signing of an MoU with Cebu Normal University, one of the centres of excellence for nursing education in the Philippines to have them as a technical assistance partner for Prime Bank Nursing Institute, a new initiative of Prime Bank Foundation which began year and aims to develop highly skilled nurses at an affordable price needed to meet the increasingly high demand of nurses by different healthcare service providers in the country and beyond.

• Availability of high quality nursing education at an affordable cost through enrolment of the first batch of students at Prime Bank Nursing Institute after its formal launching from the beginning of 2013.

GO

AL

3

Build a strong and dynamic organisation, capable of facilitating effective education,

eye and other components of health

programme

• Build a strong and dynamic organisation, capable of facilitating effective education, and other components of health programme. Creating positive impact on public opinion, policies and practices.

• Our capacity development endeavour, is envisioned to institutionalise learning processes and systematically organise sharing of information, experiences, best practices and lessons learned with our project level people and the organisation we work with. We aim to institutionalise the core values of responsible corporate citizenship into the way of doing business, to mould future business and to professionalise the practice of CSR.

• Monitor, measure and report on the impact of the work that we do.

• Implemented information sharing and communication sharing and communication systems to lead our people and programmes.

• Increased efficiency in managing organisational resources.

• Continued building capacity of project staff and systems to support our target people.

GO

AL

2

Make health more accessible to the target population

we work for

• Make health more accessible to the target population we work for.

• Completed the set up of Prime Bank Eye Hospital in Dhaka, a well equipped eye hospital staffed with a skilled workforce with the technical assistance from Aravind Eye Care System of India to provide a wide range of eye care services to all.

• Where cost is an issue, eye care is not out of reach, Prime Bank Eye Hospital, an initiative of Prime Bank Foundation, from the beginning of 2012 has started providing high quality eye care services as part of its Corporate Social Responsibility.

257

S T A K E H O L D E R S ’ I N F O R M A T I O N

04

258


Stakeholders’ Information

Distribution of Shareholdings in 2014

TypesNumber of Shares % of Shares

2014 2013 2014 2013Sponsors 417,229,033 416,508,783 40.53% 40.46%

Financial Institutions 225,681,418 188,617,995 21.92% 18.32%

Foreign Investors 14,055,207 51,108,455 1.37% 4.97%

Non- Resident Bangladeshi 3,991,569 3,752,285 0.39% 0.36%

General Public 368,391,389 369,361,098 35.79% 35.89%

Total 1,029,348,616 1,029,348,616 100.00% 100.00%

Sponsors,

40.53%

Fina

ncia

lIn

stitu

tions

,21

.92%

ForeignInvestors,

1.37%

Non-residentBangladeshi,

0.39%

General Public,35.79%

Sponsors

Financial Institutions

Foreign Investors

Non-resident Bangladeshi

General Public

Types of Shareholding

Shares Held by Directors in 2014

Sl Name of the directors Status Opening position

Closing position Change

1 Mr. Azam J Chowdhury(Representative of East Coast Shipping Lines Ltd.) Chairman 20,601,158 20,601,158 0.00%

2 Mr. Khandker Mohammad Khaled Vice Chairman 28,570,378 28,570,378 0.00%3 Mr. M. A. Khaleque Vice Chairman 21,846,820 21,846,820 0.00%4 Quazi Sirazul Islam Director 20,616,158 20,616,158 0.00%5 Mr. Md. Nader Khan Director 38,019,361 38,019,361 0.00%6 Mr. Md. Shirajul Islam Mollah Director 20,644,922 20,644,922 0.00%7 Mr. Mafiz Ahmed Bhuiyan Director 20,591,099 20,591,099 0.00%8 Mr. Md. Shahadat Hossain Director 27,811,583 27,811,583 0.00%

9 Mr. Mizanur Rahman Bhuiyan(Representative of Uniglory Cycle Industries Ltd.) Director - 20,760,250 100.00%

10 Mrs. Marina Yasmin Chowdhury Director 20,882,328 20,882,328 0.00%11 Mrs. Nazma Haque Director 20,678,053 20,678,053 0.00%12 Mrs. Nasim Anwar Hossain Director 23,365,749 23,365,749 0.00%13 Mrs. Salma Huq Director 32,254,341 32,254,341 0.00%14 Mrs. Muslima Shirin Director 20,587,749 20,587,749 0.00%15 Mr. Nafis Sikder Director 25,826,178 25,826,178 0.00%16 Mr. Imran Khan Director 20,588,337 20,588,337 0.00%17 Prof. Ainun Nishat Independent Director - - - 18 Mr. Manzur Murshed Independent Director 29,277 29,277 0.00%19 Prof. Dr. Mohammed Aslam Bhuiyan Independent Director - - - 20 Mr. Ahmed Kamal Khan Chowdhury Managing Director - - -

Total 362,913,491 383,673,741 5.72%

259

Redressal of Investors’ Complaint

Prime Bank Limited is strongly committed to equitable treatment of every shareholder, whether they are major or minority shareholders, institutional investors, or foreign shareholders. To ensure equal treatment of all shareholders the bank created various mechanisms, such as:

Shareholders who are unable to attend the shareholders’ meeting, the bank provides proxy forms which allow shareholders to specify their vote on each agenda. The proxy forms, which are in accordance with the standard format, are sent along with the annual report.

The shareholders’ meetings proceed according to the order of the agenda, without adding new and uniformed agenda, in order to give the opportunity to shareholders to study the information on the given agenda before making a decision. Moreover, there are no changes to the important information in the shareholders’ meeting.

The bank sees the importance of the consideration of transactions which may have conflict of interest or may be connected or related transactions, and abides by good corporate governance principles, including the rules and regulations of the Bangladesh Securities and Exchange Commission and the Dhaka Stock Exchange and the Chittagong Stock Exchange transactions, Directors, management and those who are related persons do not participate in the consideration to approve such transactions.

The bank provides a channel for minority shareholders to propose issues deemed important and appropriate to include in the agenda of the bank’s annual general meeting of shareholders and to nominate candidates with appropriate knowledge, abilities and qualifications to be considered for the position of Director.

Complaint redressal is supported by a review mechanism, to minimize the recurrence of similar issues in future.

PBL follows the following principles: � Investors must be treated fairly at all times;

� Complaints raised by investors must be dealt with courtesy and in a timely manner;

� Investors are informed of avenues to raise their complaints within the organization;

� Complaints are treated efficiently and fairly;

� PBL employees work in good faith and without prejudice, towards the interests of the investors.

� Way of Redress Investor Complaints

� Investor can complain through email [email protected];

� An Investor can make a written complaint through letter;

� The Company maintains investor grievance file in which full detail of every written complaint shall enter;

� We have 3 designated person look after the investor grievances in due time;

� The full detail of the written complaint must be passed to the concerned department and inform the compliance officer of the Company as soon as it is received;

� A letter or email must be written to all the investor who have submitted written complaints by the designated person or Compliance Officer acknowledging receipt of the complaint and informing them it will be dealt with;

� Audit & Compliance Department will obtain all information available on the complaint which is considered necessary for a proper investigation, look into all the necessary information and resolve these soon as possible;

The bank continues to have regular communication with the shareholders through periodic updates of performance and at any other time when it believes it to be in the best interest of shareholders generally.

Investors’ inquiries / ComplaintAny queries relating to shareholdings for example transfer of shares, changes of name and address, and payment of dividend should be sent to the following address:

Share Department Sarker Mansion (8th Floor) 29, Rajuk Avenue, Dhaka – 1000Phone: 9567265/261

260


Financial Highlights - Group & PBL

Performance during the year

Prime Bank Limited Group2014 2013 Change 2014 2013 Change

Taka in million

Taka in million

% Taka in millionTaka in million

%

Interest income 18,446 22,011 -16.20 18,468 22,036 -16.19

Profit before provision and tax 6,157 7,474 -17.63 6,228 7,732 -19.46

Provision for loans and assets 2,877 4,029 -28.60 3,075 4,030 -23.69

Profit after provision before tax 3,280 3,445 -4.80 3,152 3,702 -14.85

Tax including deferred tax 887 1,616 -45.10 907 1,664 -45.50

Profit after tax 2,393 1,829 30.80 2,246 2,038 10.17

At the year endTotal shareholders' equity 24,461 23,030 6.21 24,582 23,359 5.24Deposits 204,838 201,907 1.45 204,804 201,811 1.48Loans and advances 147,367 153,589 -4.05 152,719 159,010 -3.96Investments 72,642 56,940 27.58 74,496 58,751 26.80Property, plant and equipment 6,613 6,407 3.21 6,649 6,457 2.97Total assets 254,912 243,869 4.53 256,349 245,507 4.41

Statutory Ratios (%)Cash reserve ratio 6.71 6.97 -0.26 6.71 6.97 -0.26Statutory liquidity ratio 29.83 38.39 -8.56 29.83 38.39 -8.56Capital adequacy ratio 12.71 12.04 0.67 12.68 12.03 0.65

Share InformationEarnings per share (Taka) 2.32 1.78 30.34 2.18 1.98 10.10Dividend (%) 15.00 12.50 2.50 15.00 12.50 2.50Net assets value per share (Taka) 23.76 22.37 6.21 23.88 22.69 5.24

Ratios (%)Non performing loans 7.61 5.09 2.52 7.34 4.91 2.43Return on average shareholders' fund 10.08 8.35 1.73 9.37 9.20 0.17Return on average assets 0.96 0.76 0.20 0.89 0.84 0.05

57.81%

28.50%

2.59%

7.47% 3.63%

Constituents of Assets of PBL

Loans & Advances Investments Fixed Assets Liquid Assets Other Assets

Paid-up Capital Reserves & Surplus Deposit Borrowings Other Liabilities

4.02%

5.57%

79.89%

3.15%

7.37%

Constituents of Liabilities & Capital of Group

Constituents of Liabilities & Capital of PBL

4.04%

5.56%

80.35%

3.01%

7.04%

Paid-up Capital Reserves & Surplus Deposit Borrowings Other Liabilities

Loans & Advances Investments Fixed Assets Liquid Assets Other Assets

59.57%

29.06%

2.59% 7.48% 1.30%

Constituents of Assets of Group

261

Taka in million


Gross revenue 27,480 30,561 Operating income 11,906 12,883 Profit after tax 2,393 1,829 Total capital 27,313 26,495 Total deposits 204,838 201,907 Total loans & advances 147,367 153,589 Total assets 254,912 243,869 No. of deposits accounts 1,208,249 1,083,793 No. of loans & advances accounts 48,044 49,594 Return on assets (%) 0.96 0.76 Return on equity (%) 10.08 8.35 Statutory liquidity ratio (%) 29.83 38.39 Capital adequacy ratio (%) 12.71 12.04

No. of employees 2,867 2,710

No. of branches 122 117

No. of SME branches/centers 18 17

Rating (CRISL)

Long -term "AA" "AA"

Short-term ST-2 ST-2

Rating (CRAB)

Long -term "AA2" "AA2"

Short-term ST-2 ST-2

2013 2014

Gross Revenue

0

5000

10000

15000

20000

25000

30000

35000(Taka in million)

30,5

61

27,4

800

1,000

2,000

3,000

4,000

5,000

2013 2014

Profit Before Tax(Taka in million)

3,44

5

3,28

0

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

2013 2014

Total Capital Fund(Taka in million)

26,4

95

27,3

13

Financial Highlights - PBL

262


Graphical Presentation - PBL5.

69

4.70

2.88

1.78 2.

32

2010 2011 2012 2013 2014

Earnings per Share(Taka)

2010

29.2

7

24.5

4

22.2

1

22.3

7

23.7

6

2011 2012 2013 2014

Net Asset Value per Share(Taka)

2010 2011 2012 2013 2014

Shareholders' Equity(Taka in million)

16,9

08 19,0

95

20,7

87 23,0

30 24,4

61

2010 2011 2012 2013 2014

Non-Interest Income(Taka in million)

5,47

3

7,49

8

8,0

81

8,55

1

9,0

34

Operating Profit(Taka in million)

2010 2011 2012 2013 2014

6,17

6

7,42

7

8,55

1

7,47

4

6,15

7

3,10

1

3,63

4

2,69

9

1,829

2,39

3

2010 2011 2012 2013 2014

Profit after Tax(Taka in million)

2.22

2.0

5

1.24

0.7

6

0.9

6

2010 2011 2012 2013 2014

Return on Assets (%)

21.6

5

20.19

13.5

3

8.35 10

.08

2010 2011 2012 2013 2014

Return on Equity (%)

263

108 11

9 130 134 14

0

2010 2011 2012 2013 2014

Branch Network

36.9

4

35.7

5

36.6

2 41.9

8 48.2

9

2010 2011 2012 2013 2014

Cost-Income Ratio (%)

124,

574 15

9,81

6

182,

053

201,9

07

204,

838

116,

057

138,

848

160

,890

153,

589

147,

367

2010 2011 2012 2013 2014

Deposit & Advance(Taka in million) Deposits

Loans & Advances

2010 2011 2012 2013 2014

Fee based Income(Taka in million)

2,84

0

2,96

83,44

7

3,34

1

2,84

12,

632

4,15

7

4,63

3 5,58

3

6,19

4

2010 2011 2012 2013 2014

Investment Income(Taka in million)

2010 2011 2012 2013 2014

Non-Performing Loans(Taka in million)

1,368 1,9

08

6,16

8 7,81

5

11,2

15

43

81

134 151 160

2010 2011 2012 2013 2014

Number of ATM

2010 2011 2012 2013 2014

Savings Deposit as % of Total Deposit

12.2

8

11.2

3

10.5

4

10.4

6

12.2

6

264


8.34

16.6

0

9.47

12.8

5 14.5

7

8.43

2009 2010 2011 2012 2013 2014

Price Earning Ratio (Times)

Stock Performance - Market Price Information

The reported high and low prices and volume of shares of Prime Bank Limited traded during the year 2014 on Dhaka Stock Exchange and Chittagong Stock Exchange are given below:

MonthDSE CSE

Total Volume on DSE & CSE

High Taka

Low Taka

VolumeHigh Taka

Low Taka

Volume

January 27.90 23.80 5,352,529 28.00 22.00 129,479 5,482,008February 27.50 24.10 20,524,583 27.50 23.50 122,313 20,646,896March 26.00 22.50 3,864,720 25.20 20.00 180,239 4,044,959April 24.70 20.00 19,675,302 25.00 19.20 117,690 19,792,992May 24.80 22.20 15,900,993 25.00 19.20 388,614 16,289,607June 24.90 22.40 16,014,580 25.00 20.50 141,170 16,155,750July 24.50 23.10 4,536,459 24.00 21.60 75,718 4,612,177August 24.00 19.00 27,165,224 23.10 18.20 165,204 27,330,428September 22.00 19.10 7,423,096 21.80 17.20 147,366 7,570,462October 22.70 19.50 13,899,134 22.50 18.50 120,348 14,019,482November 24.50 18.60 5,883,613 21.00 17.20 140,341 60,23,954December 20.50 18.00 6,104,124 20.80 18.00 167,816 6,271,940

2010 2011 2012 2013 2014

Market Capitalization(Taka in million)

54,572

34,70234,624

26,660

20,175

94.4

5

44.5

0

37.0

0

25.9

0 19.6

0

2010 2011 2012 2013 2014

Market Price per Share(Taka)

265

Segment Analysis

PBL

Group

Conventional Banking Islamic Banking O�-shore Banking

89.83%

6.51%

3.66%

Assets Employed


O�-shore Banking Local Subsidiaries (PBIL, PBSL)

86.02%

6.23%3.51%

3.29%

0.95%

Assets Employed


91.85% 6.84%

1.31%

Operating Revenue

Operating Revenue



89.54% 6.67%

1.27%0.63%

1.89%


75.69%

20.27%

4.04%

Profit before Tax



Profit before Tax

78.76%

21.09%

4.20%

-6.60%

2.55%

266


Horizontal/Vertical Analysis - Key Financial Data & Key Business Ratios - PBL

Taka in million

Particulars 2010 2011 2012 2013 2014

Operating Performance (Income Statement)

Interest income 12,147 16,709 22,822 22,011 18,446

Interest expenses 7,824 12,648 17,410 17,678 15,574

Net interest income 4,323 4,061 5,411 4,332 2,872

Investment income 2,632 4,157 4,633 5,583 6,194

Commission, exchange and brokerage 2,262 2,689 2,429 2,155 2,033

Other Operating Income 579 652 1,018 813 806

Operating Income 9,795 11,559 13,492 12,883 11,906

Operating expenses 3,618 4,132 4,941 5,409 5,750

Earning before interest, depreciation and tax 13,643 19,666 23,024 21,422 19,187

Profit before provision and tax 6,177 7,427 8,551 7,474 6,157

Provision for loans and assets 540 661 3,216 4,029 2,877

Profit after provision before tax 5,637 6,766 5,335 3,445 3,280

Tax including deferred tax 2,535 3,132 2,636 1,616 887

Profit after tax 3,102 3,634 2,699 1,829 2,393

Balance Sheet (Financial Position)

Authorized capital 10,000 10,000 25,000 25,000 25,000

Paid-up capital 5,776 7,798 9,358 10,293 10,293

Total shareholders' equity 16,908 19,095 20,787 23,030 24,461

Deposits 124,574 159,816 182,053 201,907 204,838

Long-term liabilities 47,918 63,379 84,827 91,424 104,040

Loans and advances 116,057 138,848 160,890 153,589 147,367

Investments 20,484 39,172 45,862 56,940 72,642

Property, plant and equipment 1,695 3,975 4,363 6,407 6,613

Earning assets 137,577 179,537 212,204 211,399 221,521

Net current assets 7,349 2,262 2,735 15,023 21,064

Total assets 154,342 199,950 236,833 243,869 254,912

Total liabilities 137,434 180,856 216,046 220,839 230,451

Current ratio 1.09 1.02 1.02 1.12 1.17

Gearing ratio 76.98 77.88 80.97 80.67 81.42

Quick ratio 1.09 1.01 1.01 1.12 1.17

Cash reserve ratio 6.70 6.22 6.06 6.97 6.71

Statutory liquidity ratio 26.00 32.96 34.02 38.39 29.83

Equity debt ratio (%) 12.30 10.56 9.62 10.43 10.61

Other Business

Import 147,704 174,384 168,532 133,219 126,571

Export 106,943 133,396 143,612 127,091 110,096

Remittance 28,433 36,890 42,443 32,628 39,484

Guarantee business 29,000 27,844 29,391 31,170 30,155

267

Taka in million

Particulars 2010 2011 2012 2013 2014

Capital Measures (Consolidated)

Total risk weighted assets 183,747 194,380 205,103 222,791 216,324 Core capital (Tier-I) 15,791 18,744 20,664 21,708 22,611 Supplementary capital (Tier-II) 5,692 5,485 5,252 5,104 4,812 Total capital 21,483 24,229 25,916 26,812 27,424Tier-I capital ratio 8.60 9.64 10.08 9.74 10.45Tier-II capital ratio 3.09 2.82 2.56 2.29 2.23Total capital ratio 11.69 12.46 12.64 12.03 12.68

Credit Quality

Non-performing loans (NPLs) 1,368 1,908 6,168 7,815 11,215 NPLs to total loans and advances (%) 1.18 1.37 3.83 5.09 7.61 Provision for unclassified loans 1,463 1,725 2,025 1,691 1,741 Provision for classified loans 642 778 1,949 3,733 4,586

Share Information

Market price per share (Taka) 94.45 44.50 37.00 25.90 19.60No. of shares outstanding (Million) 577.64 779.81 935.77 1029.35 1029.35No. of shareholders (actual) 19,748 26,030 23,964 25,632 23,102Earnings per share (Taka) 5.69 4.70 2.88 1.78 2.32Dividend: 40% 30% 20% 12.50% 15.00% Cash 5% 10% 10% 12.50% 15.00% Bonus 35% 20% 10% - - Effective dividend ratio (%) 49.52 40.21 21.82 13.10 15.00 Dividend cover ratio (times) 1.42 1.57 1.44 1.42 1.55 Dividend yield (%) 4.23 6.74 5.41 4.83 7.65 Market capitalization 54,572 34,702 34,624 26,660 20,175 Net asset value per share (Taka) 29.27 24.49 22.21 22.37 23.76 Price earning ratio (times) 16.60 9.47 12.85 14.57 8.43

Operating Performance Ratio (%)

Net interest margin (NIM) 4.21 3.19 3.61 2.75 1.91 Net non-interest margin on average earning assets 1.50 2.12 1.60 1.48 1.52 Earning base in assets (average) 88.66 89.51 89.69 88.12 86.80 Gross profit ratio 55.60 47.75 43.66 42.15 43.33 Net interest income as a percentage of working funds 3.10 2.29 2.48 1.80 1.15 Profit per employee 2.89 3.24 3.36 2.76 2.15Operating profit as a percentage of working funds 4.43 4.19 3.92 3.11 2.47 Cost-income ratio 36.94 35.75 36.62 41.98 48.29Credit-deposit ratio 93.16 86.88 88.38 76.07 71.94Cost of funds on average deposits 6.39 8.15 8.75 8.80 7.36 Yield on average advance 11.76 13.09 15.17 13.85 12.09 Return on average assets 2.22 2.05 1.24 0.76 0.96 Return on average equity 21.65 20.19 13.53 8.35 10.08Return on capital employed 9.53 9.01 8.10 6.53 4.79No. of branches 94 102 113 117 122No. of SME branches/centers 14 17 17 17 18Number of ATM 43 81 134 151 160No. of employees 2,139 2,292 2,544 2,710 2,867No. of foreign correspondents 621 644 660 661 638Average earning assets 123,741 158,557 195,871 211,802 216,460 Average total assets 139,574 177,146 218,392 240,351 249,391 Average deposits 115,765 142,195 170,934 191,980 203,372

Average loans & advances 102,654 127,452 149,869 157,239 150,478

Average equity 14,327 18,002 19,941 21,908 23,745

268


Statement of Value Added and its DistributionTaka in million


Income from banking services 27,480 30,561

Less: Cost of services & supplies (17,701) (19,838)

Value added by banking service 9,779 10,723

Non-banking income - -

Provision for loans & off-balance sheet exposure (2,877) (4,029)

6,902 6,695

Distribution of value addition

To employees as salaries & allowances 3,288 2,951

To providers of capital as dividend & reserve 2,200 1,976

To Government as income tax 1,180 1,616

To expansion and growth

Retained profit by the entity 193 (146)

Depreciation 333 298

Deferred taxation (293) -

233 152

Total 6,902 6,695

44.08%

29.51%

24.14%

-2.19%

4.46%

0%

Distribution of value addition-2013

To employees as salaries& allowances

To providers of capital as dividend & reserve

To Government asincome tax

Retained profit

Depreciation

Deferred taxation

47.64%31.88%

17.10%

2.79%4.83%

-4.24%

Distribution of value addition-2014

To Government as income tax

Retained profit by the entity

Depreciation

Deferred taxation

To employees as salaries& allowances

To providers of capital asdividend & reserve

269

A n n uA L R E P O R T 2 0 1 4

Economic Value Added Statement Economic value added is a measure of profitability which takes into consideration the cost of total invested equity. Shareholders / equity providers are always conscious about their return on capital invested. As a commercial banking company, we are deeply concerned for delivery of value to all of our shareholders / equity providers.

Taka in million2014 2013 2012

Shareholders' equity 24,461 23,030 20,787 Add: Cumulative provision for loans / investments, off-balance sheet exposure and Off-shore Banking Units 7,416 6,514 4,082

31,877 29,543 24,869

Average shareholders' equity 30,710 27,206 23,734

EarningsProfit after taxation 2,393 1,829 2,699 Add: Provision for loans / investments, off-balance sheet exposure and Off-shore Banking Units 2,877 4,029 3,216

Less: written-off during the year (2,123) (2,541) (404) 3,147 3,318 5,511

Average cost of equity (based on weighted average rate of Shanchay Patra issued by the Government of Bangladesh) plus 2% risk premium. 12.90% 12.90% 13.46%

Cost of average equity 3,961 3,509 3,194

Economic value added (814) (192) 2,316

Growth over last year -325.27% -108.27% 87.33%

Maturity analysisTaka in million

Below 1 year 1-5 years Above 5 years Total

Interest earning assets 139,637 50,770 31,115 221,521

Non-interest earning assets 7,704 4,500 21,187 33,391

Total assets 147,341 55,269 52,302 254,912

Interest bearing liabilities 117,882 53,825 37,856 209,564

Non-interest bearing liabilities 8,394 1,290 11,203 20,888

Total liabilities 126,276 55,116 49,059 230,451

Maturity Gap 21,064 153 3,243 24,461

Cumulative Gap 21,064 21,218 24,461

24,4

61

20,17

5

Book Value Market Value Value Addition

Market Value Addition(Taka in million)

1,237

2,316

-192

-814

-1,200

-200

800

1,800

2,800

2011 2012 2013 2014

Economic Value Addition(Taka in million)

270


Economic impact report The bank’s overall mission is to deliver optimum value to its customers, employees, shareholders and the nation and the business strategy is geared towards achieving this. This section covers the value the bank delivers to its shareholders and the nation at large. The bank’s policy has been to deliver optimum value in a manner that is consistent with the highest levels of fairness and transparency. For the bank, it has not been a case of building financial value and enhancing the bottom line at any cost, but rather participating in a process of creating value through fair and ethical means. Building sustainable value of all stakeholders is an important corporate goal.

Some of the measures taken to create, sustain and deliver optimum value are as follows:

Maintaining capital adequacy

Capital adequacy symbolizes the financial strength and stability of a bank. It limits the extent up to which banks can expand their business in terms of risk weighted assets. Like all commercial institutions, banks too constantly look at ways of expanding their operations by acquiring property, plant and equipment, opening branches, in addition to mobilizing deposits, providing loans and investing in other assets. Regulatory capital requirements are therefore necessary to prevent banks from expanding beyond their ability to manage (over trading), to improve the quality of bank’s assets, to control the ability of the banks to leverage their growth and to lead to higher earnings on assets, leading to peace of mind of all the stakeholders. The bank keeps a careful check on its capital adequacy ratios.

11.6

9 12.4

6

12.6

4

12.0

3

12.6

8

2010 2011 2012 2013 2014

Capital Adequacy Ratio (%)

Core Capital and Supplementary Capital - 2014

4,812

Supplementary

Capital

22,611Core Capital

Taka in million

271

The capital adequacy computation on consolidated basis as at December 31, 2014 is given below:

Details of Capital FundTaka in million

2014 2013

Tier-I: Core capital

Paid-up capital 10,293 10,293

Share premium 2,241 2,241

General Reserve 28 28

Minority interest in subsidiaries 0 0

Statutory reserve 8,185 7,529

Surplus in consolidated profit and loss account / Retained earnings 1,864 1,616

Total Tier-I capital 22,611 21,708

Tier-II: Supplementary capital

General provision maintained against unclassified loans / investments 1,664 1,659

General provision maintained against off-balance sheet exposure 1,088 1,090

General provision maintained against Off-shore Banking Units 78 32

Revaluation gain / loss on investment (50% of total) 231 68

Revaluation reserve for equity instruments (10% of unrealized market gain) - -

Revaluation reserve for fixed assets (50% of total) 752 756

Subordinated bond 1,000 1,500

Exchange equalization account - -

Total Tier-II capital 4,812 5,104

Total capital 27,424 26,812

Total risk-weighted assets 216,320 222,791

Core capital ratio (%) 10.45 9.74

Supplementary capital ratio (%) 2.23 2.29

Total capital adequacy ratio (%) 12.68 12.03

Maintaining liquidity

The liquidity policy of the bank has always been to carry a positive mismatch in the interest earning assets and interest bearing liabilities in the 1 to 30 days category. Our liquidity remained at optimum levels during the year. The liquid assets ratio stood at 29.83% (required 13% of total demand & time deposits) in December 2014. The assets and liabilities committee (ALCO) of the bank monitors the situation and maintains a satisfactory trade-off between liquidity and profitability.

272


540

35

30

25

20

15

10

5

02010 2011 2013 2013 2014

50

35

5

10

10

1012.5

1520

Stock Dividend (%) Cash Dividend (%)

Payment of dividends The dividend policy of bank has always been to pay a decent dividend to its shareholders while ploughing back sufficient profits to fund growth and capital adequacy requirements. As a result of this prudent dividend policy, the bank has been able to build up its shareholders’ fund base to satisfactory levels.

Considering the performance of the bank over the past year, the Board has recommended cash dividend of 15% for the year 2014.

2,34

3,14

7

4,17

0,6

47

5,0

06,

825

5,80

6,96

5

6,58

8,51

6

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2010 2011 1012 2013 2014

Industry - Deposit

3,105,453

3,782,471

4,386,156

4,761,510

5,451,495

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2010 2011 2012 2013 2014

Industry - Loans and AdvancesTaka in million

124,

574 15

9,81

6

182,

053

201,9

07

204,

838

0

50,000

100,000

150,000

200,000

250,000

2010 2011 1012 2013 2014

Prime Bank-DepositTaka in million

116,

057

138,

848 16

0,8

90

153,

589

147,

367

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2010 2011 2012 2013 2014

Prime Bank-Loans and AdvancesTaka in million

Market share information of the Bank’s Product/ Services

273

Disclosure for Non-Performing AssetsMovements of NPA

ParticularsAmount in Taka (Million)

2014 2013

Opening Balance 7,814.50 6,168.50

Add: Addition NPA during the period 11,939.86 14,768.88

Less: NPA recovered during the period (2,209.31) (1,824.96)

Less: NPA declassified/regularized as performing during the period (3,648.76) (8,542.39)

Less: NPA written-off during the period (2,681.65) (2,755.53)

Closing Balance (NPA) 11,214.64 7,814.50

Sector-wise Break up of NPA

ParticularsAmount in Taka (Million)

2014 2013

Corporate 6,014.47 5,257.70

Retail 1,453.83 1,144.36

SME 3,637.60 1,322.90

Credit Card 108.73 89.54

Total NPA 11,214.64 7,814.50

No. of rescheduled loans during the year (incl. Retail Banking Div. & SME Banking Div.)

238 96

Movement of Provisions made against NPAOpening Balance 1,949.08 Add: addition during the year 4,318.50 Less: Adjustment during the year (2,534.53)Closing Balance 3,733.05

96 Accounts was rescheduled during the year

Statement of Value Added and its DistributionGovernment as TaxesTax 1,862.25 TDS 2,796.31 VAT 462.55 Total 5,121.11

Shareholders as Dividend 935.77 Employees as bonus/remuneration 2,950.61 Retained by the entity - Market Share information of the Company's product/ services - Economic value added -

274


Financial Calendar 2014

Quarterly ResultsAudited consolidated results for the 4th quarter ended 31 December 2013 Announced on 4th March 2014Unaudited consolidated results for the 1st quarter ended 31 March 2014 Announced on 14th May 2014Unaudited consolidated results for the 2nd quarter and half-year ended 30 June 2014

Announced on 23rd July 2014

Unaudited consolidated results for the 3rd quarter ended 30 September 2014 Announced on 29th October 2014

DividendsDistribution of cash dividend of 12.50% in respect of financial year ended 31 December 2013 1st April 2014Notice of Annual General Meeting 4th March 2014 Annual General Meeting 30th March 2014

Stock DetailsParticulars DSE CSEStock Symbol PRIMEBANK PBBANKCompany Code 11116 22013Listing year 2000 1999Market category A AElectronic share Yes YesMarket lot 1 1Total number of securities 1,029,348,616 1,029,348,616

Availability of information about PBLAnnual Report 2014 and other information about PBL may be viewed on PBL’s website www.primebank.com.bd PBL provides copies of Annual Reports to the Bangladesh Securities and Exchange Commission, Bangladesh Bank, Dhaka Stock Exchange and Chittagong Stock Exchange for their reference. Investors may read them at their public reference room or library.

Market Value Added StatementMarket Value Added (MVA) statement is the difference between the total market value and the total book value of shares of a bank. A high MVA indicates that the bank has created substantial wealth for the shareholders. MVA is equivalent to the present value of all future expected economic value added. The share market value of bank’s shares stood at Tk. 20,175 million whereas the book value of the shares stood at Tk 24,461 million, resulting a Market Value reduce of Tk. 4,286 million as of December 31, 2014. The calculation of Market Value Added is given below:

Particulars No. of shares Value in Taka Taka in million

Market value 1,029,348,616 19.60 20,175

Book value 1,029,348,616 23.76 24,461

Market value added (4,286)

275

Glimpses of19th AGM

276


277

F I N A N C I A L S T A T E M E N T S

05

278


Independent Auditors’ Reportto the shareholders of Prime Bank Limited

Report on the Financial StatementsWe have audited the accompanying consolidated financial statements of Prime Bank Limited and its subsidiaries (the “Group”) as well as the separate financial statements of Prime Bank Limited (the “Bank”), which comprise the consolidated and separate balance sheets as at 31 December 2014, 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 ControlsManagement 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 stated in note # 2.18 and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 and the Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.

Auditors’ 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, the auditor considers 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.

OpinionIn 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 2014, 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 stated in note # 2.18.

Report on Other Legal and Regulatory RequirementsIn accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act, 1991 and the rules and regulations issued by Bangladesh Bank, we also report the following:

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

279

b. to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the separate financial statements of the Bank and considering the reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial Statements and Internal Controls:

i. internal audit, internal control and risk management arrangements of the Group and the Bank, as disclosed in note # 2.11 & 2.19 (i & ii) of the financial statements, appears to be adequate except for the effects of the immaterial control deficiencies as identified by us and being submitted to the management of the Bank via management report;

ii. nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Bank and its related entities other than matters disclosed in note # 2.19 (iii) of these financial statements;

c. financial statements of two subsidiary companies namely, Prime Bank Investment Limited and Prime Bank Securities Limited have been audited by Howlader Yunus and Co. Chartered Accountants and another three subsidiary companies namely, Prime Exchange Co. (Pte) Limited, Singapore, PBL Exchange (UK) Limited and PBL Finance (Hong Kong) Limited have been audited by C.C Yang & Co., Chartered Accountants, Reddy Siddique & Kabani, Chartered Accountants, and T.O. YIP & Co. Limited, Chartered Accountants respectively 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 Bangladesh Financial Reporting Standards as explained in note 2.18 as well as with related guidance, circulars issued by Bangladesh Bank and decision taken in tripartite meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the Management, Prime Bank Limited held on 25 February 2015.

h. adequate provisions have been made for advances which are, in our opinion, doubtful of recovery;

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

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

k. we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 6,850 person hours for the audit of the books and accounts of the Bank.

ACNABIN Syful Shamsul Alam & CoChartered Accountants Chartered Accountants

Dhaka, 26 February 2015

280


Consolidated Balance Sheetas at

Particulars NotesAmount in Taka

31.12.2014 31.12.2013 01.01.2013

PROPERTY AND ASSETSCash 3 In hand (including foreign currencies) 2,365,051,461 2,705,924,415 2,069,226,315 Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) 15,194,723,820 14,958,779,761 14,117,939,937

17,559,775,281 17,664,704,176 16,187,166,252 Balance with other banks and financial institutions 4 In Bangladesh 272,467,219 370,140,473 239,695,022 Outside Bangladesh 1,331,769,386 709,510,273 1,466,724,570

1,604,236,605 1,079,650,746 1,706,419,592

Money at call and short notice 5 -

-

-

Investments 6 Government 70,928,312,066 56,147,165,851 44,936,697,967 Others 3,567,999,947 2,603,960,634 3,065,827,910

74,496,312,013 58,751,126,485 48,002,525,877 Loans, advances and lease /investments Loans, cash credits, overdrafts etc./ investments 7 145,825,411,559 150,378,169,432 156,374,907,982 Bills purchased and discounted 8 6,893,824,341 8,631,546,764 8,667,419,387

152,719,235,900 159,009,716,196 165,042,327,369 Fixed assets including premises, furniture and fixtures 9 6,648,653,116 6,456,759,073 4,419,804,836 Other assets 10 3,144,775,578 2,545,075,883 2,790,186,731 Non - banking assets 11 176,340,640 - - Total assets 256,349,329,133 245,507,032,559 238,148,430,657

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents 12 8,083,203,317 4,273,597,629 21,149,348,118 Deposits and other accounts 13 Current / Al-wadeeah current deposits 27,556,891,987 26,525,056,611 27,294,074,815 Bills payable 2,942,889,234 2,081,417,055 3,421,438,111 Savings bank / Mudaraba savings deposits 25,106,122,963 21,125,908,174 19,188,831,632 Term deposits / Mudaraba term deposits 149,197,612,596 152,078,311,714 132,046,235,924 Bearer certificate of deposit - - - Other deposits - - -

204,803,516,780 201,810,693,554 181,950,580,482

Other liabilities 14 18,881,002,879 16,064,222,050 14,086,694,880 Total liabilities 231,767,722,976 222,148,513,233 217,186,623,480 Capital / Shareholders' equityPaid -up capital 15.2 10,293,486,160 10,293,486,160 9,357,714,690 Share premium 15.8 2,241,230,396 2,241,230,396 2,241,230,396 Minority Interest 15.9 60 65 67 Statutory reserve 16 8,184,646,579 7,528,626,614 6,839,527,566 Revaluation gain / loss on investments 17 461,794,800 135,671,362 42,034,865 Revaluation reserve 18 1,503,518,556 1,511,486,306 251,603,567 Foreign currency translation gain 19 4,892,900 3,646,693 4,510,188 General reserve 28,002,888 28,002,888 - Surplus in profit and loss account / Retained earnings 20 1,864,033,818 1,616,368,842 2,225,185,837 Total Shareholders' equity 24,581,606,157 23,358,519,326 20,961,807,176 Total liabilities and Shareholders' equity 256,349,329,133 245,507,032,559 238,148,430,657

281


31.12.2014 31.12.2013 01.01.2013

OFF - BALANCE SHEET EXPOSURES Contingent liabilities 21Acceptances and endorsements 21.1 26,742,389,739 30,869,304,940 33,064,522,464 Letters of guarantee 21.2 61,408,149,593 55,438,139,259 44,031,123,130 Irrevocable letters of credit 21.3 20,698,448,178 20,885,957,458 30,602,172,770 Bills for collection 21.4 9,262,180,366 9,221,494,133 10,094,765,189 Other contingent liabilities - - -

118,111,167,876 116,414,895,790 117,792,583,553 Other commitmentsDocumentary credits and short term trade -related transactions - - -

Forward assets purchased and forward deposits placed - - - Undrawn note issuance and revolving underwriting facilities - - - Undrawn formal standby facilities , credit lines and other commitments - - -

Liabilities against forward purchase and sale - - - - - -

Total Off-Balance Sheet exposures including contingent liabilities 118,111,167,876 116,414,895,790 117,792,583,553

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Consolidated Balance Sheetas at


Chairman DirectorDirector Managing Director

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

Syful Shamsul Alam & CoChartered Accountants

ACNABINChartered Accountants

282


Consolidated Profit and Loss Accountfor the year ended 31 December 2014


2014 2013

Interest income / profit on investments 23 18,467,920,602 22,035,603,937

Interest / profit paid on deposits, borrowings, etc. 24 (15,629,158,843) (17,738,761,514)

Net interest / net profit on investments 2,838,761,759 4,296,842,423

Investment income 25 6,258,530,291 5,863,198,678

Commission, exchange and brokerage 26 2,233,954,643 2,332,258,137

Other operating income 27 882,869,884 880,802,275

Total operating income (A) 12,214,116,577 13,373,101,513

Salaries and allowances 28 3,394,371,944 3,050,300,291

Rent, taxes, insurance, electricity, etc. 29 627,590,438 595,222,912

Legal expenses 30 39,566,713 40,451,700

Postage, stamp, telecommunication, etc. 31 120,248,747 141,707,735

Stationery, printing, advertisements, etc. 32 216,460,016 231,679,549

Managing Director's salary and fees 33 8,674,785 11,590,000

Directors' fees 34 4,082,879 4,443,241

Auditors' fees 35 2,097,114 1,631,427

Charges on loan losses 36 - -

Depreciation and repair of Bank's assets 37 417,210,587 365,272,233

Other expenses 38 1,156,252,723 1,198,735,007

Total operating expenses (B) 5,986,555,946 5,641,034,094

Profit / (loss) before provision (C=A-B) 6,227,560,631 7,732,067,419

Provision for loans / investments 39

Specific provision 2,643,500,000 2,980,000,000

General provision 114,000,000 642,000,000

Provision for Off-Shore Banking Units 76,000,000 362,000,000

Provision for off-balance sheet exposures (1,510,000) 10,000,000

2,831,990,000 3,994,000,000

Provision for diminution in value of investments (57,065,592) 24,475,240

Provision for impairment of client margin loan 248,810,195 1,354,126

Other provisions 51,598,089 10,135,000

Total provision (D) 3,075,332,692 4,029,964,366

Total profit / (loss) before taxes (C-D) 3,152,227,939 3,702,103,053

Provision for taxation:

Current tax 40 1,200,938,014 1,664,898,350

Deferred tax (294,247,041) (1,105,233)

906,690,973 1,663,793,117

Net profit after taxation 2,245,536,966 2,038,309,936

Retained earnings brought forward from previous year 20.1 274,516,818 295,160,847

2,520,053,784 2,333,470,783

283

Consolidated Profit and Loss Accountfor the year ended 31 December 2014


2014 2013

Appropriations

Statutory reserve 656,019,965 689,099,048

Minority interest 0.28 5

General reserve - 28,002,888

656,019,966 717,101,941

Retained surplus 20 1,864,033,818 1,616,368,842

Earnings per share (EPS) 45 2.18 1.98







284


Consolidated Cash Flow Statementfor the year ended 31 December 2014


2014 2013

A) Cash flows from operating activities

Interest receipts in cash 23,664,151,487 27,624,433,535

Interest payments (16,816,635,431) (17,972,431,422)

Dividend receipts 79,659,231 89,885,351

Fees and commission receipts in cash 2,233,954,643 2,332,258,137

Recoveries of loans previously written off 26,343,014 6,064,168

Cash payments to employees (3,470,154,157) (3,031,288,851)

Cash payments to suppliers (774,889,053) (812,060,773)

Income taxes paid (1,247,770,954) (1,862,253,078)

Receipts from other operating activities 41 2,010,032,909 1,912,401,737

Payments for other operating activities 42 (1,622,403,717) (1,578,552,527)

Cash generated from operating activities before

changes in operating assets and liabilities 4,082,287,972 6,708,456,274

Increase / (decrease) in operating assets and liabilities

Statutory deposits - -

Purchase of trading securities (Treasury bills) (11,634,112,033) (3,274,763,630)

Loans and advances to other banks - -

Loans and advances to customers 4,158,023,522 3,543,714,833

Other assets 43 (4,019,982,179) (7,837,890,184)

Deposits from other banks / borrowings 3,866,183,305 (16,896,544,183)

Deposits from customers 2,727,186,380 20,905,176,176

Other liabilities account of customers 861,472,179 (1,340,021,056)

Trading liabilities - -

Other liabilities 44 2,276,255,420 655,531,219

(1,764,973,406) (4,244,796,824)

Net cash from operating activities 2,317,314,566 2,463,659,451

B) Cash flows from investing activities

Debentures 5,000,000 5,000,000

Payments for purchases of securities (17,833,595) 293,682,203

Purchase of property, plant and equipment (543,794,029) (918,179,822)

Payment against lease obligation (3,624,186) (6,126,544)

Proceeds from sale of property, plant and equipment 1,646,486 2,079,350

Net cash used in investing activities (558,605,324) (623,544,813)

285

Consolidated Cash Flow Statementfor the year ended 31 December 2014


2014 2013

C) Cash flows from financing activities

Receipts from issue of sub-ordinated bond - -

Receipts from issue of ordinary share including premium net off Tax - -

Dividend paid (1,342,610,131) (992,804,143)

Net cash used in financing activities (1,342,610,131) (992,804,143)

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 416,099,111 847,310,494

E) Effects of exchange rate changes on cash and cash equivalents 3,471,253 (7,211,283)

F) Cash and cash equivalents at beginning of the year 18,750,630,322 17,910,531,111

G) Cash and cash equivalents at end of the year (D+E+F) 19,170,200,686 18,750,630,322

Cash and cash equivalents at end of the year

Cash in hand (including foreign currencies) 2,365,051,461 2,705,924,415

Balance with Bangladesh Bank and its agent bank (s)

(including foreign currencies) 15,194,723,820 14,958,779,761

Balance with other banks and financial institutions 1,604,236,605 1,079,650,746

Money at call and short notice - -

Reverse repo - -

Prize bonds (note-6a) 6,188,800 6,275,400

19,170,200,686 18,750,630,322




286


Con

solid

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Sta

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f Cha

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for t

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31 D

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Tota

l

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Bala

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t 1 Ja

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28,0

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6

5 1,5

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1

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1,616

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23

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Cha

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Rest

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10,2

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6

5 1,5

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23

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Surp

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pro

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- -

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Adju

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- -

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(290

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- -

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616,

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832

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616,

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Cur

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- -

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- -

- -

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461,7

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1

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Net

pro

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yea

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- -

- -

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- 2,

245,

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- -

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h di

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- -

- -

- -

-

(1,34

2,610

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(1,34

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Min

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inte

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-

-

-

-

(5)

-

-

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(5)

Issu

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- -

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656,

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(656

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10,2

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2 23

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Thes

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287

Balance Sheetas at 31 December 2014


2014 2013

PROPERTY AND ASSETSCash 3a In hand (including foreign currencies) 2,340,059,101 2,683,867,027 Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) 15,194,723,820 14,958,779,761

17,534,782,921 17,642,646,788 Balance with other banks and financial institutions 4a In Bangladesh 258,877,340 244,165,129 Outside Bangladesh 1,253,809,238 626,533,772

1,512,686,578 870,698,901 Money at call and short notice 5 - - Investments 6a Government 70,928,312,066 56,147,165,851 Others 1,713,515,478 792,350,658

72,641,827,544 56,939,516,509 Loans, advances and lease / investments Loans, cash credits, overdrafts, etc./ investments 7a 142,780,100,320 147,380,881,952 Bills purchased and discounted 8a 4,586,552,073 6,207,878,277

147,366,652,393 153,588,760,229 Fixed assets including premises, furniture and fixtures 9a 6,612,686,818 6,406,719,662 Other assets 10a 9,067,223,175 8,420,462,735 Non - banking assets 11 176,340,640 - Total assets 254,912,200,069 243,868,804,824

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents 12a 7,668,875,959 3,858,260,882 Deposits and other accounts 13a.1.c Current / Al-wadeeah current deposits 27,586,626,484 26,612,333,767 Bills payable 2,942,889,234 2,081,417,055 Savings bank / Mudaraba savings deposits 25,106,122,963 21,125,908,174 Term deposits / Mudaraba term deposits 149,202,091,888 152,087,482,186 Bearer certificate of deposit - - Other deposits - -

204,837,730,569 201,907,141,182

Other liabilities 14a 17,944,881,561 15,073,785,652 Total liabilities 230,451,488,089 220,839,187,716 Capital / Shareholders' equityPaid up capital 15 .2 10,293,486,160 10,293,486,160 Share premium 15.8 2,241,230,396 2,241,230,396 Statutory reserve 16 8,184,646,579 7,528,626,614 Revaluation gain / (loss) on investments 17a 441,469,626 109,193,803 Revaluation reserve 18 1,503,518,556 1,511,486,306 Foreign currency translation gain 19a 5,086,036 4,513,294 Other reserve - - Surplus in profit and loss account / Retained earnings 20a 1,791,274,627 1,341,080,535 Total Shareholders' equity 24,460,711,980 23,029,617,108 Total liabilities and Shareholders' equity 254,912,200,069 243,868,804,824

288



2014 2013

OFF - BALANCE SHEET EXPOSURESContingent liabilities 21aAcceptances and endorsements 21a.1 26,742,389,739 30,869,304,940 Letters of guarantee 21a.2 61,408,149,593 55,438,139,259 Irrevocable letters of credit 21a.3 20,698,448,178 20,885,957,458 Bills for collection 21a.4 9,262,180,366 9,221,494,133 Other contingent liabilities - -

118,111,167,876 116,414,895,790 Other commitmentsDocumentary credits and short term trade -related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities , credit lines and other commitments - - Liabilities against forward purchase and sale - -

- - Total Off-Balance Sheet exposures including contingent liabilities 118,111,167,876 116,414,895,790







Balance Sheetas at 31 December 2014

289

Profit and Loss Accountfor the year ended 31 December 2014


2014 2013

Interest income / profit on investments 23a 18,445,885,369 22,010,657,745

Interest / profit paid on deposits, borrowings, etc. 24a (15,573,523,588) (17,678,359,259)

Net interest / net profit on investments 2,872,361,781 4,332,298,486

Investment income 25a 6,194,358,289 5,582,706,055

Commission, exchange and brokerage 26a 2,033,125,238 2,155,485,165

Other operating income 27a 806,468,141 812,592,003

Total operating income (A) 11,906,313,449 12,883,081,709

Salaries and allowances 28a 3,279,735,275 2,939,016,912

Rent, taxes, insurance, electricity, etc. 29a 582,596,952 550,258,309

Legal expenses 30a 35,854,242 37,756,195

Postage, stamp, telecommunication, etc. 31a 112,446,490 134,001,255

Stationery, printing, advertisements, etc. 32a 210,809,010 227,285,212

Managing Director's salary and fees 33 8,674,785 11,590,000

Directors' fees 34a 3,799,929 4,364,816

Auditors' fees 35a 1,150,000 690,000

Charges on loan losses 36 - -

Depreciation and repair of Bank's assets 37a 400,253,143 348,115,280

Other expenses 38a 1,114,305,707 1,155,846,289

Total operating expenses (B) 5,749,625,533 5,408,924,268

Profit / (loss) before provision (C=A-B) 6,156,687,916 7,474,157,441

Provision for loans / investments 39a

Specific provision 2,643,500,000 2,980,000,000

General provision 114,000,000 642,000,000

Provision for Off-Shore Banking Units 76,000,000 362,000,000

Provision for off-balance sheet exposures (1,510,000) 10,000,000

2,831,990,000 3,994,000,000


Other provisions 51,598,089 10,135,000

Total provision (D) 2,876,588,089 4,028,662,202

Total profit / (loss) before taxes (C-D) 3,280,099,827 3,445,495,239

Provision for taxation

Current tax 40a 1,180,000,000 1,616,000,000

Deferred tax (292,800,000) -

887,200,000 1,616,000,000

Net profit after taxation 2,392,899,827 1,829,495,239

Retained earnings brought forward from previous years 20.1a 54,394,765 200,684,344

2,447,294,592 2,030,179,583

290



2014 2013

Appropriations

Statutory reserve 656,019,965 689,099,048

General reserve - -

656,019,965 689,099,048

Retained surplus 20a 1,791,274,627 1,341,080,535

Earnings per share (EPS) 45a 2.32 1.78







Profit and Loss Accountfor the year ended 31 December 2014

291

Cash Flow Statementfor the year ended 31 December 2014


2014 2013


Interest receipts in cash 23,176,223,192 27,019,442,414

Interest payments (16,338,208,336) (17,374,446,980)

Dividend receipts 79,659,231 89,885,351

Fees and commission receipts in cash 2,033,125,238 2,155,485,165

Recoveries of loans previously written off 26,343,014 6,064,168

Cash payments to employees (3,356,517,489) (2,921,049,473)

Cash payments to suppliers (650,305,772) (806,734,400)

Income taxes paid (1,247,770,954) (1,862,253,078)

Receipts from other operating activities 41a 1,866,257,765 1,558,097,238

Payments for other operating activities 42a (1,482,600,260) (1,429,170,216)

Cash generated from operating activities before

changes in operating assets and liabilities 4,106,205,631 6,435,320,188


Statutory deposits - -

Purchase of trading securities (Treasury bills) (11,634,112,033) (3,274,763,630)

Loans and advances to other banks - -

Loans and advances to customers 4,089,651,062 4,760,494,847

Other assets 43a (4,074,433,703) (8,849,257,530)

Deposits from other banks / borrowings 3,859,709,442 (16,835,943,667)

Deposits from customers 2,784,707,590 20,902,604,991

Other liabilities account of customers 861,472,179 (1,340,021,056)

Trading liabilities - -

Other liabilities 44a 2,338,428,624 729,880,009

(1,774,576,839) (3,907,006,036)

Net cash from operating activities 2,331,628,792 2,528,314,152

B) Cash flows from investing activities

Debentures 5,000,000 5,000,000

Proceeds from sale of securities - -

Payments for purchases of securities 25,040,898 (35,329,490)

Purchase of property, plant and equipment (541,008,697) (859,824,544)

Payment against lease obligation (3,624,186) (6,126,544)

Proceeds from sale of property, plant and equipment 1,646,486 2,079,350

Net cash used in investing activities (512,945,499) (894,201,228)

292



2014 2013

C) Cash flows from financing activities

Receipts from issue of sub-ordinated bond - -

Receipts from issue of ordinary share including premium net off Tax - -

Dividend paid (1,286,685,770) (935,771,469)

Net cash used in financing activities (1,286,685,770) (935,771,469)

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 531,997,523 698,341,455

E) Effects of exchange rate changes on cash and cash equivalents 2,039,687 (5,400,826)

F) Cash and cash equivalents at beginning of the year 18,519,621,089 17,826,680,460

G) Cash and cash equivalents at end of the year (D+E+F) 19,053,658,299 18,519,621,089


Cash in hand (including foreign currencies) 2,340,059,101 2,683,867,027


(including foreign currencies) 15,194,723,820 14,958,779,761

Balance with other banks and financial institutions 1,512,686,578 870,698,901

Money at call and short notice - -

Reverse repo - -

Prize bonds (note-6a) 6,188,800 6,275,400

19,053,658,299 18,519,621,089




Cash Flow Statementfor the year ended 31 December 2014

293

Part

icul

ars

Paid

-up

Cap

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Shar

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gain

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10,2

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Cha

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- -

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10,2

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7,52

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(7,9

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on

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- -

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(290

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- -

- 6

22,8

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622

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- -

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572

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- 4

41,4

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- -

- -

- 2

,392

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2

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- -

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- -

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- (1

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(1,2

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8,55

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1,79

1,274

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10,2

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Stat

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1.1 Prime Bank Limited

The Prime Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under Companies Act, 1994 with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one branch from April 17, 1995 under the license issued by Bangladesh Bank. Presently, the Bank has 140 (One Hundred Forty) branches including 18 (Eighteen) SME Centre/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong Port, Chittagong. Out of the above 140 branches, 05 (five) branches are designated as Islamic Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5 (Five) subsidiaries Companies (3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering (IPO) in 1999 and its shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly traded company for its general classes of share.

1.1.1 Principal activities

The principal activities of the Bank are to provide all kinds of commercial banking services to customers through its branches and SME centres/ branches in Bangladesh. The Bank also provides off-shore banking services through its 3 (Three) Off-shore Banking Units (OBU).

1.1.2 Off-shore Banking Units

The Bank obtained permission of Off-shore Banking Units vide letter no. BRPD(P)744(84)/2001-868 dated March 19, 2001. The Bank commenced operation of its one unit from March 15, 2007. Presently the Bank has 3 (Three) Off-shore Banking Units (OBU) located at Dhaka EPZ, Chittagong EPZ and Adamjee EPZ. The Off-shore Banking Units are governed under the rules and guidelines of Bangladesh Bank. Separate financial statements of Off -shore Banking Units are shown in Annexure-K.

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

1.2.1 Prime Bank Investment Limited

Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited incorporated as a public limited company on April 27, 2010 with the registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no. C-84266/10, dated April 28, 2010 which has commenced its business on the same date. Total of 299,999,994 shares (out of 300,000,000 shares) of Prime Bank Investment Limited are held by Prime Bank Limited and only 6 shares are held by 6 Senior Executives of Prime Bank Limited and Prime Bank Investment Limited. The main objectives of the company for which it was established are to carry out the business of full-fledged merchant banking activities like issue management, portfolio management, underwriting, corporate advisory services etc. Securities and Exchange Commission (SEC) thereafter issued a full fledged merchant banking license in favor of Prime Bank Investment Limited, vide letter no. SEC/Reg/MB/SUB/2010/03/208, dated June 02, 2010 with effect from June 01, 2010. Financial Statements of the company are shown in Annexure-L.

1.2.2 Prime Bank Securities Limited

Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies Act 1994 vide certificate of incorporation no. C-84302 /10. Prime Bank Securities Limited became member of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited for brokerage transaction vide Security Exchange Commission certificate no. 3.1/DSE-219/2010/429, dated September 16, 2010 and 3.2/CSE-141/2010/239, dated August 31, 2010 respectively. Prime Bank Securities Limited commenced its operation from May 2011. The main objectives of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other services as mentioned in the Memorandum and Articles of Association of the Company. Prime Bank Limited and Prime Bank Investment Limited hold 95% and 5% share of Prime Bank Securities Limited respectively. Financial Statements of the company are shown in Annexure-M.

1.2.3 Prime Exchange Co. (Pte) Limited, Singapore

Prime Exchange Co. (Pte) Ltd., a fully owned subsidiary company of Prime Bank Limited was incorporated in Singapore on January 06, 2006 and commenced its remittance business from July 08, 2006 under the remittance license issued by the Monetary Authority of Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act (Chapter 187) with 1 (One) branch located at 2A Desker Road, (2nd floor), Singapore 209549. In 2011, the Company has also opened another Branch located at Jurong East Branch, Block: 134 #01-305 Jurong Gateway Road, Singapore 600134. The principal activities of the company are to carry on the remittance business and to undertake and participate in transactions, activities and operations commonly carried on or undertaken by remittance and exchange house. Financial Statements of the company are shown in Annexure-N.

1.2.4 PBL Exchange (UK) Limited

PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and Wales under registration no. 7081093 dated November 19, 2009. The company is a wholly owned subsidiary of Prime Bank Limited. The company commenced its operation on August 02, 2010 with 3 (three) Branches located at Brick Lane of London, Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1 6RF. Financial Statements of the company are shown in Annexure-O.

Notes to the Financial Statementsfor the year ended 31 December 2014

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1.2.5 PBL Finance (Hong Kong) Limited

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

2.00 Significant accounting policies and basis of preparation of financial statements

2.1 Basis of accounting

2.1.1 Statement of compliance

The financial statements of the Bank and its subsidiaries (the "Group") have been made for the year ended on December 31, 2014 and are prepared under the historical cost basis, except for certain investments which are stated at fair/market value and freehold land which are measured at revalued amount, in accordance with the First Schedule (Sec-38) of the Bank Companies Act 1991 (as Ammended up to 2013), BRPD Circular # 14 dated June 25, 2003 and DFIM Circular # 11, dated December 23, 2009, other Bangladesh Bank Circulars, Bangladesh Accounting Standards ("BAS") and Bangladesh Financial Reporting Standards ("BFRS") adopted by the Institute of Chartered Accountants of Bangladesh ("ICAB"), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges' listing regulations and other laws & rules applicable in Bangladesh. In cases where the requirements of Bangladesh Bank differ with those of BAS/BFRS, the requirements of Bangladesh Bank have been applied.

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

2.1.2 Basis of consolidation

The consolidated financial statements include the financial statements of Prime Bank Limited and its subsidiaries, i.e. Prime Bank Investment Limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte) Limited, Singapore, PBL Exchange (UK) Limited and PBL Finance (Hong Kong) Limited prepared at the end of the financial year.

The consolidated financial statements have been prepared in accordance with Bangladesh Accounting Standard (BAS)-27, "Separate Financial Statements" and Bangladesh Financial Reporting Standard (BFRS)- 10, "Consolidated Financial Statements". The consolidated financial statements are prepared for the same financial year ended on December 31, 2014.

Subsidiary

Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements from the date that control effectively commences until the date that the control effectively ceases. Subsidiary companies are consolidated using the purchase method of accounting. The overseas subsidiary companies i.e. Prime Exchange Co. (Pte) Limited, Singapore, Prime Exchange (UK) Limited and PBL Finance (Hong Kong) Limited has a common financial year ending December 31, 2014. The conversion policy of subsidiary companies is given below:

Particulars Price Prime Exchange Co.(Pte) Ltd., Singapore

PBL Exchange(UK) Ltd.

PBL Finance (Hong Kong) Ltd.

For assets & liabilities Closing price 58.88310 120.91510 10.04684

For income & expenses Average price 60.06865 124.49635 10.03687

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss resulting from transactions between Group are also eliminated on consolidation.


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2.1.3 Use of estimates and judgments

In preparation of the financial statements management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

The most significant areas where estimates and judgments have been applied are to calculate provision for loans, advances and investments as per Bangladesh Bank guidline.

2.1.4 Foreign currency transaction

a) Foreign currency

Items included in the financial statements of each entity in the group are measured using the currency of the primary economic environment in which the entity operates, i e. the functional currency. The financial statements of the group and the Bank are presented in BDT which is the Bank's functional and presentation currency.

b) Foreign currency translation

Foreign currency transactions are converted into equivalent BDT using the prevailing 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 BDT 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 equivalent BDT.

Assets and liabilities & income and expenses of Off-shore Banking Units have been converted into BDT currency @ US$1 = Taka 77.9494 (closing rate as at 31st December 2014) and Tk.77.6135 (average rate which represents the year end).

c) Commitments

Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated at rates mentioned in contracts. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in BDT terms at the rates of exchange prevailing on the balance sheet date.

d) Translation gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the translation of net investment in foreign subsidiary.

e) Foreign operations

The results and financial position of the Group’s operations whose functional currency is not Bangladeshi Taka are translated into Bangladeshi Taka as follows:

i. Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date.

ii. Income and expenses in the income statement are translated at an average rate approximating the exchange rates at the year end;

iii. Resulting exchange differences are recognized as a separate component of equity.

iv. As per BAS 21, “Foreign Currency Transactions”, foreign currency denominated non-monetary items of the OBUs are translated at historical rate, as the OBUs are considered as an integral part of the Bank’s operation not a foreign operation due to specific regulations governing the OBU and its unique nature.

f) Consolidation of Financial Statements of foreign operations

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

2.1.5 Statement of cash flows

Statement of cash flows have been prepared in accordance with the BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.


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2.1.6 Liquidity statement

The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as per the following basis [Annexure-I & I (1)]:i. Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis of their

maturity term;ii. Investments are on the basis of their respective maturity;iii. Loans and advances / investments are on the basis of their repayment schedule;iv. Fixed assets are on the basis of their useful lives;v. Other assets are on the basis of their realization / amortization;vi. Borrowing from other Banks, financial institutions and agents, etc. are as per their maturity / repayment terms;vii. Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors;viii. Provisions and other liabilities are on the basis of their payment / adjustments schedule.

2.1.7 Reporting period

These financial statements cover one calendar year from 1st January to 31st December 2014.

2.1.8 Offsetting

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously (note-9a, 14a.1, 25a, 26a.1).

2.2 Assets and basis of their valuation

2.2.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank management for its short-term commitments.

2.2.2 Loans, advances and lease / investments

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

b. Interest / profit is calculated on a daily product basis but charged and accounted for on accrual basis. Interest / profit on classified loans and advances / investments is kept in suspense account as per Bangladesh Bank instructions and such interest / profit is not accounted for as income until realised from borrowers [note - 7a.9 (x)]. Interest / profit is not charged on bad and loss loans / investments as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts.

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

d. Provision for loans and advances / investments is made on the basis of year-end review by the management following instructions contained in Bangladesh Bank BCD Circular no. 34, dated November 16, 1989, BCD Circular no. 20, dated December 27, 1994, BCD Circular no. 12, dated September 4, 1995, BRPD Circular no. 16, dated December 6, 1998, BRPD Circular no. 9, dated May 14, 2001, BRPD Circular no.02, February 2005, BRPD Circular no. 09, August 2005, BRPD Circular no. 17, dated December 06, 2005, BRPD circular no.32, dated October 27, 2010, BRPD Circular no.14, dated September 23, 2012, BRPD Circular no19, dated December 27, 2012, BRPD Circular no 05, dated May 29, 2013 and BRPD Circular no 16, dated November 18, 2014 . The rates of provision for loans and advances / investments are given below:

Particulars Rate

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

General provision on unclassified small enterprise financing 0.25%

General provision on interest receivable on loans / investments 1%

General provision on unclassified loans / investments for housing finance, loans for professionals to set-up business and loans to share business 2%

General provision on unclassified consumer financing other than housing finance, loan for professionals and loans for BGs/MBs/SDs 5%

General provision on Special Mention Account (SMA) except Short Term Agriculture Loans 0.25%-5%

Specific provision on substandard loans and advances / investments 20%

Specific provision on doubtful loans and advances / investments 50%

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


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

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

2.2.3 Investments

All investment securities are initially recognised at cost, being fair value of the consideration given, including acquisition charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield method and are taken to discount income. The valuation method of investments used are:

Held to maturity (HTM)

Investments which have ‘fixed or determinable payments’, and are intended to be ‘held to maturity’, other than those that meet the definition of ‘held at amortized cost-others’ are classified as held to maturity. Investment (HTM)-BHBFC is shown in the financial statements at cost price.

Held for trading (HFT)

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

Value of investments has been enumerated as follows :

Items Applicable accounting valueGovernment treasury bills-HTM Amortized valueGovernment treasury bills-HFT Market valueGovernment treasury bonds-HTM Amortized valueGovernment treasury bonds-HFT Market valuePrize bond At costBHBFCs-debenture At cost

Investment in listed securities

These securities are bought and held primarily for the purpose of selling them in future or hold for dividend income. These are reported at cost. Unrealized gains are not recognized in the profit and loss account. But provision for diminution in value of investment is provided in the financial statements where market price is below the cost price of investments as per Bangladesh Bank guideline (note-14a).

Investment in unquoted securities

Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of book value over cost for determining the carrying amount of investment in unlisted securities.

Investments in subsidiary

Investment in subsidiaries is accounted for under the cost method of accounting in the Bank's financial statements in accordance with the BFRS-10. Accordingly, investments in subsidiaries are stated in the Bank's balance sheet at cost, less impairment losses (if any).

2.2.4 Property, plant and equipment

Property, plant & equipment are recognized if it is probable that future economic benefits associated with the assets will flow to the Bank and the cost of the assets can be reliably measured.

a. All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

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


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c. Revaluation of Land and Building: As per Bangladesh Accounting Standard (BAS-16) revaluation should be made with sufficient regulatory compliance to ensure that the carrying amount does not differ materially from that which would be determined using the fair value at the end of reporting period. The fair value of Land and Buildings is usually determined from market based evidence by an appraisal that is normally undertaken by professionally qualified Valuers. Therefore, any upward increases of the assets have positive impact on the capital adequacy of the Bank (50% of the asset revaluation is considered as Tier-2 “Supplementary Capital”). With a view to qualify for higher capital adequacy, the bank revalued its Land and Buildings upon complying with all regulatory requirements.

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

Category of fixed assets RateLand Nil Buildings 2.50%Furniture and fixtures 10%Office equipments 20%Library books 20%Vehicles 20%

Category of fixed assets (ATM Assets) RateFurniture and fixtures 10%Office equipment 20%

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

f. On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule and gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book value of the assets and net sale proceeds.

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

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

2.2.5 Intangible assets

a. An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset will flow to the entity and the cost of the assets can be measured reliably.

b. Software represents the value of computer application software licensed for use of the Bank, other than software applied to the operation software system of computers. Intangible assets are carried at its cost, less accumulated amortization and any impairment losses.

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

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

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

2.2.6 Impairment of Assets:

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

The Bank assesses at the end of each reporting period or more frequently if events or changes in circumstances indicate that the carrying value of an asset may be impaired, whether there is any indication that an asset may be impaired. If any such indication exits, or when an annual impairment testing for an asset is required, the bank makes an estimate of the asset's recoverable amount. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered as impaired and is written down to its recoverable amount by debiting to profit & loss account.

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


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2.2.7 Other assets

Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity and such accounts may be quite insignificant in the overall financial condition of the Bank.

2.2.8 Securities purchased under re-sale agreement

Securities purchased under re-sale agreements are treated as collateralized lending and recorded at the consideration paid and interest accrued thereon. The amount lent is shown as an asset either as loans and advances to customers or loans to other banks.The difference between purchase price and re-sale price is treated as interest received and accrued evenly over the life of Repo agreement.

2.2.9 Receivables

Receivables are recognised when there is a contractual right to receive cash or another financial asset from another entity.

2.2.10 Inventories

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

2.2.11 Leasing

Leases are classified as finance leases whenever the 'terms of the lease' transfer substantially all the risks and rewards of ownership to the lessee as per BAS-17 " Leases". All other leases are classified as operating leases as per BAS-17 "Leases".

The Bank as lessor

Amount due from lessees under finance leases are recorded as receivables at the amount of the Bank's net investment in the leases (note-7a.2). Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the bank's net investment outstanding in respect of the leases.

The Bank as lessee

Assets held under finance leases are recognised as assets of the Bank at their fair value at the date of acquisition or, if lower, at the present value of the minimum lease payments (note-9a). The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation (note-14a.9). Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

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

2.2.12 Non-banking assets:

Non-banking assets are acquired on account of the failure of a borrower to repay the loan on time after receiving the decree from the Court regarding the right and title of the mortgage property. The Bank has awarded ownership of the mortgage properties according to the verdict of the Honorable Court in accordance with the section 33 (7) of “Artharin Adalat-2003”. The value of Non-Banking Assets has been determined and reported in the financial statements on the basis of valuation report of an Independent valuer named "M/S MSK Inspection Company Ltd." details of which is presented in (note-11).

2.2.13 Reconciliation of inter-bank and inter-branch account

Accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material differences which may affect the financial statements significantly. Un- reconciled entries / balances in the case of inter-branch transactions as on the reporting date are not material.

2.3 Share Capital

Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

2.3.1 Authorised Capital

Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of Association. Details are shown in note 15.1.

2.3.2 Paid up Capital

Paid up capital represents total amount of shareholders' 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 15.2.


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2.4 Statutory reserve

As per Bank Companies Act, the Bank requires to transfer 20% of its current year's profit before tax to statutory reserve until such reserve equals to its paid up capital and we comply with this requirement.

2.5 Revaluation reserve

When an asset's carrying amount is increased as a result of revaluation, the increase amount should be credited directly to equity under the head of revaluation surplus / reserve as per BAS-16: "Property, Plant and Equipment". The Bank revalued its land and buildings during the year 2008 & 2013 which are absolutely owned by the Bank and the increased amount was transferred to revaluation reserve account accordingly. The tax effects on revaluation gain are measured and recognised in the financial statements as per BAS-12: Income Taxes.

2.5.1 Minority interest in subsidiaries

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

2.5.2 Prime bank subordinated bond

Prime Bank issued unsecured non-convertible subordinated bond on 07 February 2010 after obtained approval from Bangladesh Bank and Securities and Exchange Commission vide their letter # BRPD (BIC) 661 / 14B (P) /2009-319, dated 31 December 2009 and SEC / CI / CPLC-205 / 09 / 282, dated December 23, 2009 respectively. The Subordinated Bond is counted towards Tier- II capital of the Bank. The bond shall bear interest @ Tk.11.50% per annum, payable semi annually in arrear on 07 August and 07 February of each year.

2.5.3 Share premium

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

2.6 Contingent liabilities

A contingent liability is -

A 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

A present obligation that arises from past events but is not recognised because:

a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) 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.

2.7 Deposits and other accountsDeposits by customers and banks are recognised when the Bank enters into contractual provisions of the arrangements with the counter-parties, which is generally on trade date, and initially measured at the consideration received.

2.8 Borrowings from other banks, financial institutions and agentsBorrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from banks, financial institutions and agents. These are stated in the balance sheet at amounts payable. Interest paid / payable on these borrowings is charged to the profit & loss account.Disclosures of borrowings against Repo are shown in notes- 6a.9 to 6a.10 and 47


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2.9 Basis for valuation of liabilities and provisions

2.9.1 Provision for current taxationProvision for current income tax has been made as per prescribed rate in the Finance Act, 2014 on the accounting profit made by the Bank after considering some of the add backs to income and dis-allowances of expenditure as per income tax laws in compliance with BAS-12 " Income Taxes".

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

2.9.3 Benefits to the employeesThe retirement benefits accrued for the employees of the Bank as on reporting date have been accounted for in accordance with the provisions of Bangladesh Accounting Standard-19, "Employee Benefit". Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below:

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

b) Gratuity fundThe Bank operates a funded gratuity scheme on "Continuing Fund Basis", in respect of which provision is made annually according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved the Prime Bank Limited Employees' Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.035.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management) of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employees Benefit".

c) Welfare fundPrime Bank's employees' welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to the Fund in accordance with Bank Service Rules. The Fund has been established to provide medical support and coverage in the event of accidental death or permanent disabilities of the employees. Disbursement of loan from the fund is done as per rules for employees' welfare fund. Retirement benefit are also provided from this fund.

d) Incentive bonus10% of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is being distributed among the employees based on their performance. The bonus amount is paid annually, normally in first quarter of every following year and the costs are accounted for in the period to which it relates.

2.9.4 Other liabilitiesOther liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest payable, interest suspense, accrued expenses, obligation under finance lease etc. Other liabilities are recognised in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance 1984 and internal policy of the Bank.

2.9.5 Provision for liabilitiesA provision is recognised in the balance sheet when the Bank has legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 "Provisions, Contingent Liabilities and Contingent Assets".


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2.9.6 Provision for Off-balance sheet exposuresOff-balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh Bank guidelines. As per BRPD Circular # 14, dated September 23, 2012, banks are advised to maintain provision @1% against off-balance sheet exposures (L/C and Guarantee) in addition to the existing provisioning arrangement.

2.9.7 Provision for nostro accountsAs per instructions contained in the circular letter no. FEPD (FEMO) / 01 / 2005-677 dated 13 September 2005 issued by Foreign Exchange Policy Department of Bangladesh Bank, provision is to be maintained on the un-reconciled debit balance of nostro account for more than 3 months as on the reporting date in these financials. Since there is no unreconciled entries which are outstanding more than 3 months no provision has been kept in this regard.

2.10 Revenue recognition

2.10.1 Interest income (Conventional Banking)In terms of the provisions of the BAS-18 "Revenue", the interest income is recognised on accrual basis. Interest on loans and advances ceases to be taken into income when such advances are classified. It is then kept in interest suspense. After the loans / investments is classified as bad, interest / profit ceases to apply and recorded in a memorandum account. Interest/Profit on classified advances/investment is accounted for on a cash receipt basis.

2.10.2 Profit on investment (Islamic Banking Branches)Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge / compensation on classified investments is transferred to profit suspense account instead of income account.

2.10.3 Investment incomeInterest income on investments is recognised on accrual basis. Capital gain on investments in shares is also included in investment income. Capital gain is recognised when it is realised.

2.10.4 Fees and commission incomeFees and commission income arising on services provided by the Bank are recognised when those are realized. Commission charged to customers on letters of credit and letters of guarantee is credited to income at the time of transactions being recorded in the books of accounts.

2.10.5 Dividend income on sharesDividend income on shares is recognised during the period when right to receive is established.

2.10.6 Interest paid and other expenses (Conventional Banking Branches)In terms of the provisions of BAS-1 "Presentation of Financial Statements" interest and other expenses are recognised on accrual basis.

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

2.10.8 Dividend paymentsInterim dividend is recognised when they are paid to shareholders. Final dividend is recognized when it is approved by the shareholders in AGM.

The proposed dividend for the year 2014 has not been recognized as a liability in the balance sheet in accordance with the BAS-10 : Events After the Reporting Period.

Dividend payable to the Bank's shareholders is recognized as a liability and deducted from the shareholders' equity in the period in which the shareholders' right to receive payment is established.

2.11 Risk managementRisk is inherent to the banking business and Bank adds shareholders’ value by converting opportunities into profit. The Bank evaluates its opportunities in terms of risk-reward relationship. The risks that are taking by the Bank are reasonable, controlled, within its financial resources and credit competence.

In Prime Bank, risk is managed through a clear organizational structure, risk management and monitoring process that are closely aligned with the activities of the Bank’s risk management policy and process as well as in line with the guidelines provided by the country’s central bank, Bangladesh Bank.

The Bank’s risk management policy and process is composed with all the structure, policies, process and strategies within the Bank so that it does not conflict with other risk management policies.

The essential elements of an effective risk management framework are:

1. Clearly defined roles and responsibilities to avoid conflict of interest between business lines.

2. Developing a risk culture where everyone will understand the impact of risk before taking any business decision.

3. Robust risk management and governance by the board for understanding the risks taken by the Bank for safety and protection of the assets.


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The risk management of the Bank covers following six core risk areas:

a. Credit Risk

b. Foreign Exchange Risk

c. Asset Liability Management

d. Money Laundering Risk

e. Internal Control & Compliance Risk; and

f. Information and communication technology

2.11.1 Credit riskIt arises mainly from lending, trade finance, leasing and treasury businesses. This can be described as potential loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from unwillingness of the counter party or decline in his / her financial condition. Therefore, the Bank’s credit risk management activities have been designed to address all these issues.The Bank has segregated duties of the officers / executives involved in credit related activities. A separate Corporate Division has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with the customers, marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval, administration, monitoring and recovery functions have been segregated. For this purpose, three separate units have been formed within the credit division. These are (a) Credit Risk Management Unit (b) Credit Administration Unit and (c) Credit Monitoring and Recovery Unit. Credit Risk Management Unit is entrusted with the duties of maintaining asset quality, assessing risk in lending to a particular customer, sanctioning credit, formulating policy / strategy for lending operation, etc. Adequate provision has been made on classified loans / investments is shown in note-14a.3.A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the proposed credit facility, etc. The assessment process at Head Office starts at Corporate Division by the Relationship Manager / Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority. Credit approval authority has been delegated to the individual executives. Proposals beyond their delegation are approved / declined by the Executive Committee and / or the Management of the Bank. Concentration of credit risk is shown in note -7a. 4. In determining Single borrower / Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory polices. Loans are classified as per Bangladesh Bank’s guidelines. Concentration of single borrower / large loan limit is shown in note-7a.8.

2.11.2 Foreign Exchange RiskForeign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates. The risk is that adverse fluctuations in exchange rates may result in a loss in earnings. As per the guidelines of Bangladesh Bank, Prime Bank Limited has developed a detailed Foreign Exchange Risk Management policies to minimize different types of risks associated with foreign exchange transactions. The Bank has also developed different strategies to handle foreign exchange risk by setting different types of limits and risk parameters to measure and monitor foreign exchange risk exposure of the Bank.The foreign exchange desk of treasury division is involved in foreign exchange dealing activities with different counterparts; the treasury back office is engaged in transfer of funds and passing of the transaction entries in the books of accounts, and the mid office is responsible for verification of the deals. All foreign exchange transactions are revalued at market rate as per the directive of Bangladesh Bank. All Nostro Accounts are reconciled on a monthly basis and outstanding entries beyond 30 days are reviewed by the management for its settlement.

2.11.3 Asset Liability ManagementBanks are exposed to the several risks such as Liquidity Risk, Interest Rate Risk, Foreign Exchange Risk, Credit Risk and Operational Risk etc. Monitoring and controlling of these risks is vital to the survival of a financial institution. Asset-Liability Management is a tool to oversee whether different balance sheet risks are properly identified, appropriate policies and procedures are well established to control and limit these risks.Asset-Liability Committee (ALCO) reviews country’s overall economic position, the Bank’s liquidity position, key performance ratios, interest rate risk, deposit and advance growth, cost of deposit & yield on advances, deposit & lending pricing strategy and different forecasted balance sheet risks of the Bank.

2.11.4 Money Laundering RiskMoney laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. If money laundering is done successfully, it allows the criminals to maintain control over their proceeds and ultimately to provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions of the drug trafficker, the terrorist, the organized criminal, the insider dealer, the tax evader as well as the many others who need to avoid the attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.


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Prime Bank Ltd (PBL) has implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably designed to comply with applicable laws and regulations. It is the policy of PBL to take all reasonable and appropriate steps to prevent persons engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or terrorist operations, from utilizing PBL products and services. PBL makes every effort to remain in full compliance with all applicable AML and CFT laws, rules and standards in the jurisdictions in which it does business.In order to facilitate compliance with AML and CFT requirements, PBL has appointed one of its Senior Executives as the CAMLCO (Chief Anti-Money Laundering Compliance Officer) and a team of employees with experience on AML and CFT requirements under law, as well as money laundering detection and prevention, to oversee PBL AML and CFT program. PBL has developed and implemented written AML and CFT policies, procedures, internal controls and systems, which include (but are not limited) a customer identification program and procedures; procedures to collect and refresh, as appropriate, customer due diligence information; processes to assess risk; processes and systems to monitor customer transactions and activity; processes and systems to identify and report suspicious activity; and, processes to keep required records. PBL educates its all employees on AML and CFT requirements and activities and also subjects its AML and CFT program to regular independent testing. PBL cooperates fully with law enforcement and regulatory investigations and inquiries in identifying the criminals involve in Money Laundering and Terrorist Activities/Financing.

2.11.5 Internal Control & Compliance RiskInternal control is fundamental to the successful operation and day-to-day running of a business and it assists the bank in achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and management processes, covering the bank’s entire range of activities and operations, and not just those directly related to financial operations and reporting. Its scope is not confined to those aspects of a business that could broadly be defined as compliance matters, but extends also to the performance aspects of a business.Prime Bank Ltd has established a System of Internal Control, which is designed to manage all the risks of failure to a reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable assurance of effective & efficient operations covering all controls including financial & operational controls, reliability of the financial information, compliance with applicable laws & regulations, adherence to management policies, safeguarding of Bank’s Assets, prevention & detection of fraud & errors, and accuracy & completeness of the accounting records.The Board of Directors of Prime Bank Ltd regularly reviews the effectiveness of internal control process through its Audit Committee and Executive Committee and the Audit Committee plays an effective role amongst the Board of Directors, Management, Shareholders, Depositors and develops an efficient, powerful and a safe Banking System. The committee also performs a very important role for publishing Bank’s financial statements, developing an appropriate internal control system and maintains an effective communication with internal and external Auditors. It significantly contributes in controlling and monitoring various risks factors that arise from the business activities of the Bank. Board Audit Committee reviews the actions taken on internal control issues identified in the reports prepared by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities.

2.11.6 Information and communication technologyThe rapid development of information and communication technologies (ICTs) has effectively facilitated in reorganizing business processes and streamlining the provision of its products and services in today’s dynamic business environment. Such adoption helps the bank to develop and maintain competitive advantage for ensuring bank’s profitability and survivability in the market place. The competitive advantage often brings bank numerous benefits including fast business transactions, increasing automation of business processes, improved customer service, and provision of effective decision support in a timely manner. However, the adoption of ICT applications has also brought organizations risks related to ICT such as strategic risk, financial risk, operational risk and technological risk. Risk management plays a critical role in protecting the bank’s information assets. An effective risk management process is an important component of a successful IT security program. ICT risk management is referred to as the essential process to aid enterprise achieving “the new business changes, future investment in information technology system, an increasing ICT threats and an increasing dependence on delivering information in system”.In order to minimize and control these risks successfully, The Bank has developed and implemented ICT risk management policies and strategies, strengthened ICT security infrastructure, acquired centralized real time security monitoring system, implemented centralized hardware system with high availability facility and implemented Disaster Recover Site (DRS), developed Business Continuity Plan (BCP) and human resource backup plan with segregation of duties for different ICT tasks.

2.11.7 Liquidity riskThe object of liquidity risk management is to ensure that all foreseeable funding commitments and deposit withdrawals can be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core retail and corporate deposits and institutional balance (note - 13a). Management of liquidity and funding is carried out by Treasury Department under approved policy guidelines. Treasury front office is supported by a very structured Mid office and Back office. The Liquidity management is monitored by Asset Liability Committee (ALCO) on a regular basis. A written contingency plan is in place to manage extreme situation.

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

Foreign exchange riskForeign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments and other remittance requirements. No foreign exchange dealing on Bank's account was conducted during the year.Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-to-Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly basis and outstanding entry beyond 30 days is reviewed by the management for its settlement. The position maintained by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank.

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

Equity riskEquity risk arises from movement in market value of equities held. The risks are monitored by Investment Committee under a well designed policy framework. The market value of equities held was, however, lower than the cost price at the balance sheet date (Annexure-B).

2.11.9 Reputation risk arising from money laundering incidencesMoney laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head Office and Compliance Officers at branches, who independently review the transactions of the accounts to verify suspicious transactions. Manuals for prevention of money laundering have been established and transaction profile has been introduced. Training is continuously given to all category of Officers and Executives for developing awareness and skill for identifying suspicious activities / transactions.

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

2.11.11 Audit Committee DisclosuresThe Audit Committee of the Board was duly formed by the Board of Directors of the Bank in accordance with the BRPD Circular no. 11 dated October 27, 2013 of Bangladesh Bank.Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 07, 2012 on Corporate Governance, the current Committee is constituted with the following 5 (Five) members of the Board and the Bank hereby has been compliant with the BRPD Circular no. 11, dated October 27, 2013.

Sl No. Name Status with Bank Status with Committeei) Prof. Ainun Nishat Independent Director Chairmanii) Mr. M. A. Khaleque Director Memberiii) Mr. Khandker Mohammad Khaled Director Memberiv) Mr. Manzur Murshed Independent Director Memberv) Prof. Dr. Mohammed Aslam Bhuiyan Independent Director Member

During the year 2014, the Audit Committee of the Board conducted 10 (Ten) meetings in which the important issues were discussed / reviewed are presented in note no. 48.

2.11.12 Risk Management Committee DisclosuresThe Board of Directors constituted with the following 5 (Five) members Risk Management Committee of the Board, the third Committee of the Board besides the Executive Committee and the Audit Committee in consistence with Bank Company (Amendment) Act 2013 and the Bank hereby has been compliant with the BRPD Circular no. 11, dated October 27, 2013.

Sl No. Name Status with Bank Status with Committeei) Mrs. Nasim Anwar Hossain Director Chairmanii) Mr. Khandker Mohammad Khaled Director Memberiii) Mr. Mafiz Ahmed Bhuiyan Director Memberiv) Mrs. Salma Huq Director Memberv) Mrs. Muslima Shirin Director Member

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The Risk Management Committee of the Board has formed soon after the Central Bank’s instruction issued in October 27, 2013. The Committee conducted 4 (Four) meeting during the year where the following important issues were discussed / reviewed:i) Determine risk management framework, policy formulation, supervision techniques and above all continuous training;

ii) Drawing appropriate TOR for the Committee in conformity with the Bank Company Act and Central Bank guidelines, considering the objectives of the Committee, experience and professional personnel with proper job description to be assigned the responsibilities;

iii) Constituted the Management Committee on core Risk Management. The Management Committee will use check list/ Questionnaires to ascertain the effectiveness of the mitigation of tools and gaps thereof and they will update the check list / questionnaires and taking appropriate actions as and when required;

iv) Review the Stress Testing Report of the Bank

v) Recovery drives to be strengthened for negative shift of NPL categories. Management should also take appropriate steps to bring the NPL ratio below 5% as suggested by Central Bank;

vi) ALCO should monitor the liquidity and FX risks to keep the shock at bare minimum;

vii) Management should get the rating done by the borrowers as per decision taken by the Board and quarterly report should be submitted regarding the progress of rating to the Risk Management Committee of the Board;

vii) Review the Standard of Risk Governance.

ix) The Management Committee advised to incorporate of appropriate clause / provision in the relevant sanction advice to the effect that Bank’s auditors / internal audit team would periodically visit for review of the operation of business under its financing.

x) Review the Green Banking Policy of the bank

xi) Review the Regulatory & Internal Circulars related to ABP/IDBP payment.

xii) Submission of statements on ICAAP under SRP for the year 2013 for SRP-SREP dialogue.

xiii) Review the Risk based pricing for corporate borrowers

xiv) Compliance with payment card industry data security standard (PCIDSS)

xv) Review the information security departmental activities.

2.12 Earnings per share

Basic earnings per share

Basic earnings per share has been calculated in accordance with BAS 33 “Earnings per Share” which has been shown on the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share

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

2.13 Events after the reporting period

Where necessary, all the material events after the reporting period have been considered and appropriate adjustment / disclosures have been made in the financial statements.

2.14 Memorandum items

Memorandum items are maintained to have control over all items of importance and for such transactions where the Bank has only a business responsibility and no legal commitment. Bills for collection, Stock of travellers cheques, savings certificates, wage earners bonds and other fall under the memorandum items. However, Bills for Collection is shown under contingent liabilities as per Bangladesh Bank’s format of reporting.

2.15 Related party transaction

Related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether a price is charged. Detail of related parties transaction are given in note-49.

2.16 Information about business and geographical segments

Segmental information is presented in respect of the Group’s business and of Prime Bank Limited.

Business segments

Business segments report consists of products and services whose risks and returns are different from those of other business segments. These segments comprise Conventional Banking including Off-shore Banking Units, Islamic Banking, Prime Bank Investment Limited and Prime Bank Securities Limited. Business segments report are shown in Annexure-H.

Geographical segments

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

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Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the management. Income, expenses, assets and liabilities are specifically identified with individual segments. Based on such allocation, segmental balance sheet as on 31 December 2014 and segmental profit and loss account for the year ended 31 December 2014 have been prepared.

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

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

Name of the BAS BAS no Status

Presentation of Financial Statements 1 Applied *

Inventories 2 Applied

Statement of Cash Flows 7 Applied

Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied

Events after the reporting period 10 Applied

Construction Contracts 11 N/A

Income Taxes 12 Applied

Property, Plant and Equipment 16 Applied

Leases 17 Applied

Revenue 18 Applied

Employee Benefits 19 Applied

Accounting for Government Grants and Disclosure of Government Assistance 20 N/A

The Effects of Changes in Foreign Exchange Rates 21 Applied

Borrowing Costs 23 Applied

Related Party Disclosures 24 Applied

Accounting and Reporting by Retirement Benefit Plans 26 N/A **

Separate Financial Statements 27 Applied

Interests in Joint Ventures 31 N/A

Financial Instruments: Presentation 32 Applied *

Earnings per share 33 Applied

Interim Financial Reporting 34 Applied ***

Impairment of Assets 36 Applied

Provisions, Contingent Liabilities and Contingent Assets 37 Applied

Intangible Assets 38 Applied

Financial Instruments: Recognition and Measurement 39 Applied *

Investment Property 40 N/A

Agriculture 41 N/A

Name of the BFRS BFRS no Status

First time adoption of Bangladesh Financial Reporting Standards 1 N/A

Share Based Payment 2 N/A

Business Combinations 3 N/A

Insurance Contract 4 N/A

Non-current Assets Held for Sale and Discontinued Operations 5 N/A

Exploration for and Evaluation of Mineral Resources 6 N/A

Financial Instruments: Disclosure 7 Applied

Operating Segments 8 Applied

Consolidated Financial Statements 10 Applied

Joint Arrangement 11 N/A

Disclosure of Interest in other entities 12 N/A

Fair Value Masurement 13 Applied

N/A=Not Applicable


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* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are different to BAS/BFRS, some of the requirements specified in these BAS/BFRSs are not applied. Refer below (note-2.18) for such recognition and measurement differences that are most relevant and material to the Bank and the Group.

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

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

New and amended standards adopted by the Bank and the Group

There are no new standards, amendments to standards and interpretations that are effective for the first time for the financial year ended 31 December 2014 that have a significant impact on the Group and the Bank.

New and amended standards and interpretations not yet adopted by the Bank and the Group

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning from 1 January 2014 or later, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group and the Bank. Although International Accounting Standards Board (IASB) has issued a new standard (IFRS 9) along with related amendments to existing standards (IAS/BAS 32, 39) but none of these have been adopted and/or endorsed locally as BAS/BFRS and as such any possible impact has not been determined.

2.18 Departures from BAS/BFRS

The consolidated financial statements of the Group and the financial statements of the Bank as at and for the period ended 31 December 2014 have been prepared under the historical cost convention except investments and in accordance with the “First Schedule” (section 38) of the Bank Companies Act 1991, as amended by Bangladesh Bank (the Central Bank of Bangladesh) through BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank Circulars, Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong Stock Exchange’s listing regulations. In case, any requirement of provisions and circulars issued by Bangladesh Bank differs with those of other regulatory authorities, the provisions and circulars issued by Bangladesh Bank shall prevail.

As such the Group and the Bank have departed from those contradictory requirements of BFRSs in order to comply with the rules and regulations of Bangladesh Bank which are disclosed below:

i) Investment in shares and Securities

BAS: As per requirements of BAS 39, investment in shares and securities generally falls either under “at fair value through profit and loss account” or under “available for sale” where any change in the fair value (as measured in accordance with BFRS 13) at the period-end is taken to profit and loss account or revaluation reserve respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and 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; otherwise investments are recognized at costs.

ii) Revaluation gain/loss on Government securities

BAS: As per requirement of BAS 39, where securities T-bills and T-bonds will fall under the category of “held for trading”, any change in the fair value of held for trading assets is recognized through profit and loss account.

Securities T-bills designated as held to maturity are measured at amortized cost method and interest income is recognized through the profit & loss account.

Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at period end any gains on revaluation of securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortisation of discount are recognised in the profit and loss account. HTM securities which have not matured as at the balance sheet date are amortised at the period end and gains or losses on amortisation are recognised in other reserve as a part of equity.

iii) Provision on loans and advances

BAS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012 and BRPD circular no. 05 dated 29 May 2013 a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard loan, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on the duration of overdue. Again as per BRPD circular no. 10 dated 18 September 2007, a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39.


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iv) Recognition of interest in suspense

BAS: Loans and advances to customers are generally classified as ‘loans and receivables’ as per BAS 39 and interest income is recognised through effective interest rate method over the term of the loan. Once a loan is impaired, interest income is recognised in profit and loss account on the same basis based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet.

v) Other comprehensive income

BAS: As per BAS 1 Other Comprehensive Income is a component of financial statements or the elements of Other Comprehensive Income are to be included in a Single Comprehensive Income (OCI) Statement.

Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to include in a Single Comprehensive Income (OCI) Statement. As such the company does not prepare the other comprehensive income statement. However elements of OCI, if any, are shown in the statements of changes in equity.

vi) Financial instruments – presentation and disclosure

In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 cannot be made in the accounts.

vii) Repo transactions

BAS: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a deposit, and the underlying asset continues to be recognized in the entity’s financial statements. This transaction will be treated as loan and the difference between selling price and repurchase price will be treated as interest expense.

Bangladesh Bank: As per BRPD guidelines, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a normal sales transactions and the financial assets are de-recognized in the seller’s book and recognized in the buyer’s book.

viii) Financial guarantees

BAS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortized amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14, financial guarantees such as L/C, L/G will be treated as Off-Balance Sheet items. No liability is recognized for the guarantee except the cash margin.

ix) Cash and cash equivalent

BAS: Cash and cash equivalent items should be reported as cash item as per BAS 7.

Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, Treasury bills, Prize bond are not shown as cash and cash equivalent. Money at call and on short notice presented on the face of the balance sheet, and Treasury bills, Prize bonds are shown in Investments.

x) Non-banking asset

BAS: No indication of Non-banking asset is found in any BFRS.

Bangladesh Bank: As per BRPD 14, there must exist a face item named Non-banking asset.

xi) Cash flow statement

BAS: Cash flow statement can be prepared using either in direct method or in indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently.

Bangladesh Bank: As per BRPD 14, cash flow is the mixture of direct and indirect method.

xii) Balance with Bangladesh Bank: (CRR)

BAS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per BAS 7.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

xiii) Presentation of intangible asset

BAS: Intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38.

Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14.


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xiv) Off-balance sheet items

BAS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement of disclosure of off-balance sheet items on the face of the balance sheet.

Bangladesh Bank: As per BRPD 14, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately in face of balance sheet.

xv) Disclosure of appropriation of profit

BAS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.

Bangladesh Bank: As per BRPD 14, an appropriation of profit should be disclosed in the face of profit and loss account.

xvi) Loans and advance net of provision

BAS: Loans and advances should be presented net of provisions.

Bangladesh Bank: As per BRPD 14, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances.

xvii) Recovery of written off loans

BAS: As per BAS 1 an entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an BFRS. Again recovery of written off loans should be charged to profit & loss account as per BAS 18.

Bangladesh Bank: As per BRPD 14, recoveries of amount previously written off should be adjusted with the specific provision for loans and advances.

The financial statements of the Islamic banking branches have also been prepared as per Bank Companies Act 1991, BFRSs and other prevailing laws and regulations applicable in Bangladesh.

xviii) Uniform accounting policy

BAS: As per para 19 of BFRS 10 a company shall prepare consolidated financial statements using uniform accounting policies for like transactions and other event in similar circumstances.

The Bank made provision as per the Press release # BSEC/Mukhopatro/2011/1733 dated 31 December 2014 of Bangladesh Securities and Exchange Commission, 20% provision has been made by Prime Bank Securities Limited while Prime Bank Investment Limited made 50.00% provision on diminution in value of investments and 42.18% provision made on impairment of client margin loan.

2.19 The Bank’s compliance with related pronouncements by Bangladesh Bank:

i) Internal Control

The objective of internal control is to ensure that management has reasonable assurance that (i) operations are effective, efficient and aligned with strategy, (ii) financial reporting and management information is reliable, complete and timely accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical values including sustainability, and (iv) assets of the company are safeguarded and frauds & errors are prevented or detected.

Prime Bank Limited has established an effective internal control system whose primary aim is to ensure the overall control of risks and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high level risk culture among the personnel of the Bank, establish efficient and qualified operating model of the Bank, ensure reliability of internal and external information including accounting and financial information, secure the Bank’s operations and assets, and comply with laws, regulatory requirements and internal policies.

The Board of Directors of Prime Bank, through its Audit Committee, periodically reviews the effectiveness of Bank’s internal control system covering all the material controls, including financial, operational and compliance controls, risk management systems, the adequacy of resources, qualifications and experience of staff of the accounting and financial reporting function, training programs, budget, etc. Board Audit Committee reviews the actions taken on internal control issues identified by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and frequency of the internal audit activities.

ii) Internal Audit

Internal Audit is the continuous and systematic process of examining and reporting on the activities of an organization undertaken by the specially assigned staff(s). Internal Auditor works as the Eyes & Ears of the management. It may therefore be used to bridge the gap between management & shop floor. It can assure the management that the Internal Controls are adequate and in operations, the policies and systems laid down are being adhered to and accounting records provided by the lower level are correct.

Internal Audit Mechanism is used as an important element to ensure good governance of PBL. Internal Audit Activity of PBL is effective and it provides senior management with a number of important services. These include detecting and preventing fraud, testing internal control, and monitoring compliance with own policies & procedures, applicable rules & regulations, instructions/ guidelines of regulatory authority etc.

During the period 2014, ICCD conducted inspection on many of the Branches/ Divisions of Head Office of the Bank and submitted reports presenting the findings of the audits/ inspections. Necessary control measures and corrective actions have been taken on the suggestions or observations made in these reports. The reports or key points of the Reports have also been discussed in the meetings of the Audit Committee of the Board and necessary steps have been taken according to the decision of the said Committee for correct functioning of Internal Controls & Compliance.


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iii) Fraud and Forgeries

The increasing wave of fraud and forgery cases in the banking sector in recent time calls for concerted steps in identifying ways for reducing or preventing frauds and forgeries by analyzing the causes and effect of frauds and forgeries, and prescribing effective control strategies for salvaging frauds in the banking sector. Prime Bank does always pay due attention on anti-fraud internal controls for prevention of fraud and forgery. The Bank has already implemented some strategies like Financial Control Strategy, Personnel Control Strategy, Accounting Control Strategy, Credit Control Strategy, Cost Control Strategy, Administrative Control strategy, Process Control Strategy etc. in order to strengthening the control system further. Although it is not possible to eliminate all frauds because of the inherent limitations of Internal Control System, the Board of Directors and Management have taken all the measures to keep the operational risk in a very minimum level. Internal Control and Compliance Division (ICCD) assesses and evaluates the effectiveness of Bank’s anti-fraud internal control measures, recommends for further improvement in implementation of aforesaid strategies and reports to the Bangladesh Bank on effectiveness of controls at the end of each quarter following their prescribed format. During the year 2014, 5 (five) instances of frauds were identified and reported to Bangladesh Bank. Total amount related to those frauds is Taka 27.98 lakh (approx) against which adequate provision has been maintained in the books of accounts. Management is exerting their all-out efforts to recover the aforesaid amount.

2.20 Restatement

In order to comply with the para 21 of Bangladesh Financial Reporting Standard (BFRS-10) “Consolidated Financial Statements” and Bangladesh Accounting Standards (BAS-8) “Accounting Policies, Changes in Accounting Estimates and Errors”, it requires to restate the following items:



31.12.2014 31.12.2013 01.01.2013

Balance with other banks and financial institutions 4In BangladeshPrevious balance 272,467,219 378,707,076 251,534,389 Add/(Less): Inter-company transaction - (8,566,603) (11,839,367)Restated balance: - 370,140,473 239,695,022 Outside Bangladesh 1,331,769,386 709,510,273 1,466,724,570

1,331,769,385 1,079,650,746 1,706,419,592

Other assets 10Previous balance 3,144,775,578 2,552,122,357 2,798,965,983 Add/(Less): Inter-company transaction - (7,046,474) (8,779,252)Restated balance: 3,144,775,578 2,545,075,883 2,790,186,731

Deposits and other accounts 13

Current / Al-wadeeah current deposits

Previous balance 27,556,891,987 26,525,056,611 27,294,077,412

Add/(Less): Inter-company transaction - - (2,597)

Restated balance: 27,556,891,987 26,525,056,611 27,294,074,815

Bills payable 2,942,889,234 2,081,417,055 3,421,438,111

Savings bank / Mudaraba savings deposits 25,106,122,963 21,125,908,174 19,188,831,632

Term deposits / Mudaraba term deposits

Previous balance 149,197,612,596 152,086,878,317 132,058,072,695

Add/(Less): Inter-company transaction - (8,566,603) (11,836,771)

Restated balance: 149,197,612,596 152,078,311,714 132,046,235,924

204,803,516,780 201,810,693,554 181,950,580,482

Other liabilities 14 Previous balance 18,881,002,879 16,071,268,524 14,095,474,132Add/(Less): Inter-company transaction - (7,046,474) (8,779,252) Restated balance: 18,881,002,879 16,064,222,050 14,086,694,880

Off-balance Sheet exposures 21 & 21a

Acceptances and endorsements Previous balance 26,742,389,739 25,014,184,593 26,979,335,910 Add: Margin - 5,855,120,347 6,085,186,554 Restated balance: 26,742,389,739 30,869,304,940 33,064,522,464

313



31.12.2014 31.12.2013 01.01.2013

Letters of guarantee Previous balance 61,408,149,593 54,276,988,409 42,846,572,774 Add: Margin - 1,161,150,850 1,184,550,356 Restated balance: 61,408,149,593 55,438,139,259 44,031,123,130

Irrevocable letters of credit Previous balance 20,698,448,178 19,359,031,049 28,353,752,325 Add: Margin - 1,526,926,409 2,248,420,445 Restated balance: 20,698,448,178 20,885,957,458 30,602,172,770

Bills for collection Previous balance 9,262,180,366 9,104,975,230 10,007,661,530 Add: Margin - 116,518,903 87,103,659 Restated balance: 9,262,180,366 9,221,494,133 10,094,765,189Other contingent liabilities - - -

118,111,167,876 116,414,895,790 117,792,583,553


2014 2013

Consolidated interest income / profit on investment 23

Prime Bank Limited 18,445,885,369 22,010,657,745

Prime Bank Investment Limited 391,826,475 455,964,116

Prime Bank Securities Limited 11,667,012 67,578,007

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

PBL Exchange (UK) Ltd. - -

PBL Finance (Hong Kong) Limited 84,434,808 81,448,997

18,933,813,664 22,615,648,865

Less: Inter-company transactions

Previous balance - -

Additional balance 465,893,062 580,044,928

Restated balance 465,893,062 580,044,928

18,467,920,602 22,035,603,937

Consolidated interest / profit paid on deposits, borrowings, etc. 24

Prime Bank Limited 15,573,523,588 17,678,359,259






16,098,253,305 18,324,408,047





15,629,158,843 17,738,761,514

314


2.21 The financial statements were approved by the Board of Directors on 26 February 2015.2.22 General

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

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

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


2014 2013

Consolidated other operating income 27

Prime Bank Limited 806,468,141 812,592,003


Prime Bank Securities Limited 971,313 569,922

Prime Exchange Co. Pte. Ltd., Singapore 979,239 1,027,803



886,071,283 886,403,880





882,869,884 880,802,275

315


Amount in Taka2014 2013

3 Consolidated cashi Cash in hand

Prime Bank Limited (note-3a.1) 2,340,059,101 2,683,867,027

Prime Bank Investment Limited 9,228 21,223


Prime Exchange Co. Pte. Ltd., Singapore 24,958,132 22,029,154


PBL Finance (Hong Kong) Limited - -

2,365,051,461 2,705,924,415

ii Balance with Bangladesh Bank and its agent bank(s)


Prime Bank Investment Limited - -

Prime Bank Securities Limited - -




15,194,723,820 14,958,779,761

17,559,775,281 17,664,704,176

3a Cash of the Bank

3a.1 Cash in hand

In local currency 2,284,671,278 2,632,476,975

In foreign currency 55,387,823 51,390,052

2,340,059,101 2,683,867,027

3a.2 Balance with Bangladesh Bank and its agent bank(s)

In local currency 13,528,018,067 13,797,228,087

In foreign currency 1,284,357,478 773,672,374

14,812,375,545 14,570,900,461

Sonali Bank as agent of Bangladesh Bank (Local currency) 382,348,275 387,879,300

15,194,723,820 14,958,779,761

17,534,782,921 17,642,646,788

Reconciliation statements regarding Bangladesh Bank balance are given Annexure-A-1

3a.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)

Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Bank Companies Act, 1991 and MPD circular nos.01 & 02, dated June 23, 2014 and December 10, 2013 & DOS circular no.1 dated 19 January 2014.The Cash Reserve Requirement on the Bank’s time and demand liabilities at the rate of 6.5% has been calculated and maintained with Bangladesh Bank and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory Liquidity Ratio for Islamic banking , excluding CRR, on the same liabilities has also been maintained in the form of treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both the reserves maintained by the Bank are in excess of the statutory requirements, as shown below:

316




a) Cash Reserve Requirement Required reserve 13,100,234,670 11,873,385,700 Actual reserve maintained (note-3a.2) 13,528,018,067 13,797,228,087

Surplus / (deficit) 427,783,397 1,923,842,387

b) Statutory Liquidity RatioRequired reserve 25,077,954,010 36,528,669,420 Actual reserve maintained (note-3a.5) 74,077,853,175 73,799,812,639

Surplus / (deficit) 48,999,899,165 37,271,143,219

Total required reserve 38,178,188,680 36,528,669,420 Actual reserve held 87,605,871,241 73,799,812,639 Total surplus 49,427,682,561 37,271,143,219

Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained for the year 2013 in accordance with section 33 of Bank Companies Act, 1991 and MPD circular nos. 05 dated December 01, 2010.

3a.4 Maturity grouping of cashPayable on demand Up to 1 month 4,434,548,251 5,769,261,088 Over 1 month but not more than 3 months - - Over 3 months but not more than 6 months - - Over 6 months but not more than 1 year - - Over 1 year but not more than 5 years - - Over 5 years 13,100,234,670 11,873,385,700

17,534,782,921 17,642,646,788

3a.5 Held for Statutory Liquidity RatioCash in hand (note -3a.1) 2,340,059,101 2,683,867,027 Balance with Bangladesh Bank and its agent bank(s) (note-3a.2) 1,666,705,753 14,958,779,761 Government securities (note-6a.ii net off security used in ALS) 17,013,171,209 5,246,989,603 Government bonds (note-6a.ii) 53,052,917,111 48,905,409,848 Bangladesh Bank bills (note-6a.ii) - 1,994,766,400 Debenture of HBFC (note-6a.ii) 5,000,000 10,000,000

74,077,853,175 73,799,812,639

4 Consolidated balance with other banks and financial institutions

In Bangladesh Prime Bank Limited (note-4a.1) 258,877,340 244,165,129 Prime Bank Investment Limited 32,854,585 87,665,728 Prime Bank Securities Limited 14,949,084 134,757,244 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

306,681,009 466,588,101 Less: Inter-company transaction (restated) 34,213,790 96,447,627

272,467,219 370,140,473

317

Outside Bangladesh Prime Bank Limited (note-4a.2) 1,253,809,238 626,533,772 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore 42,420,563 31,552,651 PBL Exchange (UK) Ltd. 27,004,332 36,333,566 PBL Finance (Hong Kong) Limited 8,535,253 15,090,284

1,331,769,386 709,510,273 1,604,236,605 1,079,650,746

4a Balance with other banks and financial institutions of the Bank

In Bangladesh (note-4a.1) 258,877,340 244,165,129

Outside Bangladesh (note-4a.2) 1,253,809,238 626,533,772

1,512,686,578 870,698,901

4a.1 In Bangladesh

Current accountAgrani Bank Ltd., Principal Branch, Dhaka 451,555 470,903 Agrani Bank Ltd., Purana Paltan Branch, Dhaka 91,859 93,129 Agrani Bank Ltd., Bhairab Bazar, Kishoregonj 6,000,000 2,500,000 Agrani Bank Ltd., Mirzapur Branch, Mirzapur 421,522 11,394,974 Agrani Bank Ltd., Takerhat Branch 2,077 - AB Bank Ltd. Principal Branch, Dhaka 2,997,108 2,997,108 The City Bank Ltd, Dhaka 273,329 274,369 Dutch-Bangla Bank Ltd., Mirzapur Branch, Tangail 5,558,530 499,000 Exim Bank Ltd., Motijheel Branch, Dhaka 1,701,991 1,694,141 Islami Bank BD Ltd., Local Office, Dhaka 7,294,929 7,306,518 Islami Bank BD Ltd., Jhikorgacha 195 483 Janata Bank Ltd., Local Office, Dhaka 63,395,674 93,554,383 Janata Bank Ltd., Ishwardi Branch 335,461 75,014 Janata Bank Ltd., Corporate Branch, Bogra 717 1,292 National Bank Ltd., Rangpur Branch 45,665 45,665 Pubali Bank Ltd., Dhaka Stadium Branch, Dhaka 1,192,109 1,194,719 Rupali Bank Ltd. ,Motijheel Branch, Dhaka 3,117,664 3,123,755 Sonali Bank Ltd., Rangpur Branch 6,062,379 59,884 Sonali Bank Ltd., Sunamganj Branch - - Sonali Bank Ltd., Local Office, Dhaka 7,091,261 7,130,137 Sonali Bank Ltd., Narayanganj 729,105 688,232 Sonali Bank Ltd., Fakirapool Branch, Dhaka 521,853 543,353 Sonali Bank Ltd., Faridpur Branch, Faridpur 34,548,014 32,824,908 Sonali Bank Ltd., Narsingdi Branch 2,415,682 3,515,663 Sonali Bank Ltd., Satkhira 472,015 3,294,338 Standard Chartered Bank, Bangladesh - - United Commercial Bank Ltd., Principal Branch, Dhaka 7,444,042 7,446,192 Off-shore Banking Units 288,300,173 347,658,546 Uttara Bank Ltd., Local Office, Dhaka 173,341 174,841

440,638,250 528,561,547

Less: Off-shore Banking Units 288,300,173 347,658,546

152,338,077 180,903,001



318


Special notice deposit accountsAgrani Bank Ltd., Principal Branch, Dhaka 320,555 307,870 Agrani Bank Ltd., Takerhat Branch - 3,227 ICB Islamic Bank Ltd., Principal Office, Motijheel, Dhaka 14,334 14,334 ICB Islamic Bank Ltd., Sylhet 17,016 17,016 Dutch-Bangla Bank Ltd., Local Office 467,809 41,996,514 Janata Bank Ltd., Local Office, Dhaka 5,532,288 5,267,539 National Bank Ltd., Narayanganj Branch, Dhaka 4,856 15,473,223 Sonali Bank Ltd., Bhairab Bazar, Kishoregonj 950 950 Social Islami Bank Ltd., Principal Branch, Dhaka 12,603 12,603

6,370,411 63,093,276

Savings accountsAl Arafah Islami Bank Ltd., Dhaka 64,622 64,622 Bank Al Falah Ltd., Dhaka 36,595 36,595 Social Islami Bank Ltd., Principal Branch, Dhaka 67,635 67,635

168,851 168,852

Fixed deposits 100,000,000 - 100,000,000 -

258,877,340 244,165,129

4a.2 Outside Bangladesh (NOSTRO Accounts)Current accountAB Bank Ltd., Mumbai, India 75,324,652 319,322 Banca Nazionale, del Lavoro, Rome, Italy - - Bank of Bhutan Phuentsholing, Bhutan 5,480,696 2,180,840 The Bank of Tokyo Mitsubishi Ltd., Japan 4,370,045 3,235,755 SMBC, Tokyo, Japan 3,265,829 3,216,184 Citibank N.A., Mumbai, India 67,065 584,056 Citibank N.A., London , UK 36,487,520 4,527,980 Citibank N.A., New York, USA 87,228,607 8,797,334 Citibank N.A., New York, USA (Off-shore Banking) - - Commerz Bank AG, Frankfurt , Germany (EURO) 183,578,934 159,786,208 Commerz Bank AG, Frankfurt , Germany (US$) 5,222,540 8,110,938 Commonwealth Bank of Australia, Australia 2,826,530 3,147,975 Credit Suisse (First Boston), Switzerland - - Deutsche Bank Trust Company Americas 22,210,205 8,602,136 Habib American Bank, New York, USA 15,683,490 9,335,805 Habib Metropolitan Bank Ltd, Karachi 32,423,765 30,785,285 Habib Bank Ltd, Karachi 15,622,827 17,697,455 HDFC Bank Limited, Kolkata, India 84,540,590 32,091,018 HSBC Bank USA, New York, USA 250,802,434 14,632,726 HSBC Bank Middle East Ltd., Karachi, Pakistan - - HSBC PLC, London, UK - 14,736,883 HANA Bank, Seoul 672,653 570,635 ICICI Bank Ltd, Mumbai, India 29,956,770 24,531,556 Intesa Sanpaolo SPA, Milano, Italy 546,234 828,466 J. P. Morgan Chase Bank, New York 32,633,551 4,723,254 Korea Exchange Bank Seoul 6,194,466 3,311,468 Mashreq Bank PSC, New York, USA 25,668,495 6,989,715



319

Outside Bangladesh (NOSTRO Accounts)Current accountMashreq Bank PSC, Mumbai, India 33,718,293 19,477,075 National Westminister Bank, London, UK 24,303,332 26,878,103 The National Commercial Bank, Jeddah 2,240,494 2,306,917 Nepal Bangladesh Bank Ltd., Kathmandu, Nepal 2,265,228 6,553,566 People's Bank, Colombo, Sri Lanka 20,835,713 21,846,696 Skandinaviska Enskilda Banken, Sweden 292,499 469,724 Sonali Bank, Kolkata, India 25,592,031 3,547,477 Standard Chartered Bank, Kolkata, India 72,954,547 25,255,331 Standard Chartered Bank, New York, USA 43,058,439 15,925,386 Standard Chartered Bank, Singapore 23,520,569 51,956,036 Standard Chartered Bank, Frankfurt, Germany 14,638,739 5,315,001 State Bank of India, Kolkata - - The Bank of Nova Scotia, Toronto, Canada 5,536,254 4,849,610 Unicredito Italiano SPA, Milano, Italy 6,669,508 55,245,752 Wells Fargo Bank N. A. Newyork 56,056,726 18,581,484 Zuercher Kantonal Bank, Zurich 1,318,969 5,582,619 (Annexure -A) 1,253,809,238 626,533,772

4a.3 Maturity grouping of balance with other banks and financial institutionsPayable on demand 1,412,671,381 807,436,773 Up to 1 month 15,197 16,885 Over 1 month but not more than 3 months 100,000,000 63,093,276 Over 3 months but not more than 6 months - - Over 6 months but not more than 1 year - 151,967 Over 1 year but not more than 5 years - - Over 5 years - -

1,512,686,578 870,698,901

5 Money at call and short notice - -



6 Consolidated investmentsGovernmentPrime Bank Limited (note-6a) 70,928,312,066 56,147,165,851 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

70,928,312,066 56,147,165,851

OthersPrime Bank Limited (note-6a) 1,713,515,478 792,350,658 Prime Bank Investment Limited 1,102,855,608 1,066,059,442 Prime Bank Securities Limited 751,628,861 745,550,534 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

3,567,999,947 2,603,960,634 74,496,312,013 58,751,126,485

320




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

Held for trading (HFT) 37,415,148,103 18,428,655,503 Held to maturity (HTM) 33,511,975,163 37,722,234,948 Other securities 1,714,704,278 788,626,058

72,641,827,544 56,939,516,509 ii) Investment classified as per nature:a) Government securities:28 days treasury bills - - 91 days treasury bills 1,215,262,051 1,883,343,497 182 days treasury bills 6,396,833,170 502,226,451 364 days treasury bills 10,263,299,733 2,861,419,655 5 years treasury bills - -

17,875,394,955 5,246,989,603 30 days Bangladesh Bank bills - 1,994,766,400 Government bonds:Prize bonds 6,188,800 6,275,400 Government bonds (note-6a.2) 53,046,728,311 48,899,134,448

53,052,917,111 48,905,409,848 70,928,312,066 56,147,165,851

Treasury Bill amounting to Tk 862,223,745.84 was placed as lien against ALS from Bangladesh Bank on 31.12.2014

b) Other investments:Debentures of HBFC-bearing interest rate @ 5.5% (note-6a.3) 5,000,000 10,000,000 Dhaka Bank Subordinated Bond interest rate @ 11.65% (note-6a.4) 171,430,361 171,430,361 National Bank Subordinated Bond interest rate @ 11.50% (note-6a.5) 129,063,111 161,328,889

Lanka Bangla Finance Zero coupon bond interest rate @ 11.50% (note-6a.6) 83,073,414 - Orascom bond interest rate @ 13.50% (note-6a.7) - 100,075,000 Shares (note-6a.8) 324,475,510 349,516,408 Reverse Repo 1,000,473,081 -

1,713,515,478 792,350,658 72,641,827,544 56,939,516,509

6a.1 Maturity grouping of investments

On demand - - Up to 1 month 3,097,836,950 1,867,566,359 Over 1 month but not more than 3 months 17,270,237,935 12,748,348,547 Over 3 months but not more than 6 months 4,804,452,330 1,883,343,497 Over 6 months but not more than 1 year 4,311,998,542 2,065,293,139 Over 1 year but not more than 5 years 14,760,391,175 43,604,902 Over 5 years 28,396,910,612 38,331,360,065

72,641,827,544 56,939,516,509

321

6a.2 Government bonds

Name of the bonds

HTM3 years T & T bonds - - 2 years Bangladesh Government Islami Investment Bonds 850,000,000 850,000,000 5 years Bangladesh Government treasury bonds (7.81%-9.66%) 2,977,110,892 6,660,776,280 10 years Bangladesh Government treasury bonds (8.50%-11.80%) 18,668,730,600 20,241,917,363 15 years Bangladesh Government treasury bonds (8.69%-14.00%) 6,308,387,732 6,258,925,458 20 years Bangladesh Government treasury bonds (9.10%-13.29%) 4,702,745,940 3,700,615,847

33,506,975,163 37,712,234,948

HFT3 years T & T bonds - - 2 years Bangladesh Government treasury bonds (8.59%-10.98%) 3,047,335,016 4,500,615,831 5 years Bangladesh Government treasury bonds (7.86%-11.25%) 3,813,506,882 3,542,031,729 10 years Bangladesh Government treasury bonds (8.50%-12.22%) 5,094,520,690 1,974,301,041 15 years Bangladesh Government treasury bonds (11.70%-12.42%) 3,721,355,996 591,279,128 20 years Bangladesh Government treasury bonds (11.98%-12.48%) 3,863,034,563 578,671,771

19,539,753,148 11,186,899,500 53,046,728,311 48,899,134,448

6a.3 Debentures of Bangladesh House Building Finance Corporation - at redeemable valuePrincipal 100,000,000 100,000,000 Add: Accrued Interest - - Less: Redeemed up to 31 December 2014 (95,000,000) (90,000,000)Redeemable value 5,000,000 10,000,000

6a.4 Dhaka Bank Ltd. Subordinated BondOpening balance 171,430,361 171,430,361 Add: Interest accrued during the year 19,805,000 19,805,000 Less: Principal redemption during the year - - Less: Interest received during the year (19,805,000) (19,805,000)Redeemable value 171,430,361 171,430,361

6a.5 National Bank Ltd. Subordinated BondOpening balance 161,328,889 201,661,111 Add: Interest accrued during the year 18,134,222 22,667,778 Less: Principal redemption during the year (32,000,000) (40,000,000)Less: Interest received during the year (18,400,000) (23,000,000)Redeemable value 129,063,111 161,328,889

6a.6 Lanka Bangla Finance Zerocoupon BondOpening balance - - Add: Addition/purchase during the year 82,599,807 -Add: Interest accrued during the year 473,607 - Less: Principal redemption during the year - - Less: Interest received during the year - - Redeemable value 83,073,414 -



322


6a.7 Orascom BondPrincipal 100,075,000 150,112,500 Add: Interest accrued during the year 5,025,000 17,062,500 Less: Principal redemption during the year (100,000,000) (50,000,000)Less: Interest received during the year (5,100,000) (17,100,000)Redeemable value - 100,075,000

6a.8 Investment in sharesQuotedAB Bank Ltd. 47,632,736 39,201,794 Bank Asia Ltd. 24,429,908 24,429,908 BRAC Bank Ltd. - 21,243,239 The City Bank Ltd. 29,538,943 29,538,943 DESCO 19,569,239 19,397,475 Dhaka Bank Ltd. 28,551,258 28,551,258 Eastern Bank Ltd. 37,410,456 37,410,456 Federal Insurance Company Bangladesh Ltd. 20,380 20,380 Jamuna Bank Ltd. 18,370,447 14,338,010 Lanka Bangla Finance Ltd. - 23,395,426 Mutual Trust Bank Ltd. 6,962,625 - National Bank Ltd. 27,970,098 27,970,098 One Bank Ltd. 22,130,581 22,130,581 Uttara Bank Ltd. 37,009,980 37,009,980

299,596,650 324,637,548

Unquoted as on 31 December 2014Central Depository Bangladesh Limited (CDBL) 15,694,430 15,694,430 Investment in SWIFT 4,184,430 4,184,430 MSF 5,000,000 5,000,000

24,878,860 24,878,860 (Annexure -B) 324,475,510 349,516,408

6a.9 (i) Disclosure regarding outstanding Repo

Counterparty name Agreement date Reversal date Amount

Bangladesh Bank 30.12.2014 01.01.2015 743,665,000 -

Total 743,665,000

6a.9 (ii) Disclosure regarding outstanding Reverse Repo

Counterparty name Agreement date Reversal date Amount

Jamuna Bank Limited 29.12.2014 01.01.2015 1,000,473,081 Total 1,000,473,081



323

6a.10 Disclosure regarding Overall transaction of Repo and Reverse Repo

Counterparty nameMinimum

Outstanding during the year

Maximum outstanding

during the year

Daily average outstanding

during the year

Securities sold under RepoWith Bangladesh Bank 183,770,000 7,905,000,000 442,907,438 With other Banks & FIS 1,576,648,070 1,576,648,070 4,319,584

Securities purchased under Reverse RepoFrom Bangladesh Bank 200,000,000 2,750,000,000 118,767,123 From other Banks & FIS 204,521,374 9,663,489,403 1,350,131,545

7 Consolidated loans, advances and lease / Investments

Prime Bank Limited (note-7a) 142,780,100,320 147,380,881,952

Prime Bank Investment Limited 6,008,332,073 6,310,122,858





149,170,062,193 154,089,777,718

Less: Inter-company transactions 3,344,650,634 3,711,608,286

145,825,411,559 150,378,169,432

Consolidated bills purchased and discounted (note-8) 6,893,824,341 8,631,546,764

152,719,235,900 159,009,716,196

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

i) Loans, cash credits, overdrafts, etc.

Inside Bangladesh

Secured overdraft / Quard against TDR 36,737,396,813 33,752,101,030

Cash credit / Murabaha 18,211,516,645 22,698,310,397

Loans (General) 35,650,698,225 33,237,874,555

House building loans 3,603,454,341 3,806,849,550

Loans against trust receipt 7,415,940,130 11,147,870,482

Payment against document 124,216,527 265,174,901

Retail loan 12,552,789,720 12,138,261,922

Lease finance / Izara (note - 7a.2) 4,881,673,072 5,888,494,557

Credit card 1,131,739,750 1,042,299,553

SME loan 759,121,216 614,841,924

Hire purchase 6,166,006,210 7,950,577,640

Other loans and advances 15,545,547,671 14,838,225,441

142,780,100,320 147,380,881,952

Outside Bangladesh - -

142,780,100,320 147,380,881,952



324


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

Payable Inside Bangladesh

Inland bills purchased 3,058,777,247 4,376,377,482

Payable Outside Bangladesh

Foreign bills purchased and discounted 1,527,774,826 1,831,500,795

4,586,552,073 6,207,878,277

Please see note-14a.6 147,366,652,393 153,588,760,229

7a.1 Residual maturity grouping of loans, advances and lease / investments

including bills purchased and discounted

Repayable on demand - -

Up to 1 month 30,925,806,865 34,355,437,436

Over 1 month but not more than 3 months 24,803,590,283 33,818,860,912

Over 3 months but not more than 1 year 52,909,983,172 46,707,588,279

Over 1 year but not more than 5 years 36,009,389,193 29,030,155,201

Over 5 years 2,717,882,879 9,676,718,401

147,366,652,393 153,588,760,229

7a.2 Lease finance / Izara

Lease rental receivable within 1 year 336,799,649 527,936,859

Lease rental receivable within 5 years 4,299,112,110 8,682,621,264

Lease rental receivable after 5 years 1,063,047,630 391,065,600

Total lease / Izara rental receivable 5,698,959,388 9,601,623,723

Less: Unearned interest receivable 817,286,316 3,713,129,166

Net lease / Izara finance 4,881,673,072 5,888,494,557

7a.3 Loans, advances and lease / investments under the following broad categories

Loans 87,831,186,862 90,930,470,525

Cash credits 18,211,516,645 22,698,310,397

Overdrafts 36,737,396,813 33,752,101,030

142,780,100,320 147,380,881,952

Bills purchased and discounted (note-8) 4,586,552,073 6,207,878,277

147,366,652,393 153,588,760,229



325

7a.4 Loans, advances and lease / investments on the basis of significant concentration including bills purchased and discounted.a) Loans, advances and lease / investments to Directors of the Bank - - b) Loans, advances and lease / investments to Chief Executive and

other senior executives 1,854,730,519 1,865,934,020

c) Loans, advances and lease / investments to customer groups: i) Commercial lending 31,618,811,445 11,908,593,920 ii) Export financing 7,522,730,824 3,732,411,949 iii) House building loan 3,603,454,341 3,806,849,550 iv) Retail loan 12,552,789,720 12,138,261,922 v) Small and medium enterprises 20,054,785,565 19,532,373,794 vi) Special program loan 1,330,547,279 - vii) Staff loan 8,962,095 7,509,737 viii) Industrial loans / investments detail (note-7a.4 d) 66,304,300,432 84,023,601,882 ix) Other loans and advances (SOD) 2,515,540,173 16,573,223,455

145,511,921,874 151,722,826,209 147,366,652,393 153,588,760,229

d) Details of Industrial loans / investments i) Agricultural industries 1,994,050,047 1,691,360,795 ii) Textile industries 6,070,725,733 7,477,767,779 iii) Food and allied industries 4,356,321,717 5,819,255,353 iv) Pharmaceutical industries 761,551,074 2,303,534,065 v) Leather, chemical, cosmetics, etc. 707,533,596 1,310,169,543 vi) Tobacco industries 748,929,479 750,806,206 vii) Cement and ceramic industries 3,624,965,032 4,702,298,898 viii) Service Industries 15,611,991,380 4,910,682,968 ix) Transport and communication industries 5,139,792,413 7,757,516,825 x) Other industries including bills purchase and discounted 27,288,439,961 47,300,209,450

66,304,300,432 84,023,601,882

7a.5 Loans, advances and leases / investments -geographical location-wise

Inside BangladeshUrbanDhaka Division 108,095,013,290 109,175,984,414 Chittagong Division 23,268,148,497 27,743,849,035 Khulna Division 5,880,071,007 6,422,469,216 Rajshahi Division 4,141,205,976 4,604,585,904 Barisal Division 111,647,769 142,885,592 Sylhet Division 1,551,503,515 1,743,916,954 Rangpur Division 836,669,471 517,279,364

143,884,259,526 150,350,970,479 RuralDhaka Division 1,722,496,792 1,712,691,772 Chittagong Division 785,355,167 689,955,890 Khulna Division 64,859,403 143,815,669 Rajshahi Division 587,730,942 462,949,214 Sylhet Division 321,950,563 228,377,205

3,482,392,867 3,237,789,750 Outside Bangladesh - -

147,366,652,393 153,588,760,229



326




7a.6 Sector-wise loans, advances and lease / investments including bills purchased and discounted

Public sector 59,912,330 7,960,394 Co-operative sector - - Private sector 147,306,740,063 153,580,799,835

147,366,652,393 153,588,760,229

7a.7 Details of pledged collaterals with the Bank

Collateral of movable / immovable assets 119,143,801,725 132,454,115,539 Local banks and financial institutions guarantee 311,203,980 2,118,339,891 Government guarantee - - Foreign banks guarantee 15,864,992 - Export documents 2,681,663,312 3,636,471,239 Fixed deposit receipts 3,245,988,405 4,683,447,951 FDR of other banks 118,678,100 238,650,747 Government bonds 372 24,166,735 Personal guarantee 8,577,141,544 5,883,313,924 Other securities 13,272,309,962 4,550,254,203

147,366,652,393 153,588,760,229 7a.8 Details of large loans, advances and lease / investments

Number of clients with outstanding amount and classified loans / investments exceeding 10% of total capital of the Bank. Total capital of the Bank was Taka 27,312.77 million as at 31 December 2014 (Tk. 26,495.44 million in 2013).

Number of clients 25 30Amount of outstanding advances / investments 61,404,100,000 63,403,731,000 Amount of classified advances / investments 202,696,000 NilMeasures taken for recovery Negotiation

under in Process Not Applicable

Name of clients Outstanding(Tk. in million) Total

(Tk. in million)Total

(Tk. in million)Funded Non-funded

Abdul Monem Group - - - 1,594.85 Ananta Garments Group - - - 1,862.61 Ananta Apparel Group 450.20 1,607.00 2,057.20 2,286.01 Abul Khair Group 1,400.50 534.40 1,934.90 - Babylon Group - - - 1,087.15 Bangladesh Rural Advancement Committee 1,330.50 1,894.60 3,225.10 2,419.59

Bulk Trade Group - 978.20 978.20 438.65 City Group 531.10 1,533.70 2,064.80 2,585.39 Corolla Corp (BD) Ltd. - - - 2,337.24 Confidence Group 809.60 1,182.30 1,991.90 1,780.73 ENA Group - - - 2,788.38 Energypac Group 141.10 318.70 459.80 569.15 J.K.Group - - - 1,580.67 Hameem Group 409.20 657.70 1,066.90 - Kabir Group 2,208.80 1,243.60 3,452.40 1,886.78 KDS Group 780.10 577.00 1,357.10 - MAX Group 443.60 1,887.00 2,330.60 2,451.93 Meghna Group 1,360.20 4,588.80 5,949.00 6,209.44 Mir Group 1,057.30 301.10 1,358.40 1,109.57 Molla Group 690.90 561.00 1,251.90 1,347.10

327



Details of large loans, advances and lease / investmentsNasir Group 2,157.20 291.90 2,449.10 2,054.09 Noman Group 1,962.70 616.70 2,579.40 2,094.08 Prime Bank Investment Ltd 2,973.60 - 2,973.60 3,373.60 Project Builders Ltd. 2,399.20 975.90 3,375.10 4,034.22 Pakiza Group 1,301.80 562.80 1,864.60 - RAK Group 2,161.90 250.70 2,412.60 2,463.72 Saad Musa Group 1,349.00 438.90 1,787.90 2,830.39 Square Group 287.60 957.60 1,245.20 1,316.43 Standard Group 338.30 2,324.30 2,662.60 1,991.73 Summit Group 3,642.20 3,972.70 7,614.90 1,260.54 Tamishna Group - - - 1,972.20 TK Group 413.80 2,547.10 2,960.90 1,947.77 Toma Group - - - 2,119.42 Unique Group - - - 1,610.29

30,600.40 30,803.70 61,404.10 63,403.73

The bank complies with the requirement of the section 26 (b) of the banking companies Act 1991 as amendment in 2013 in connection to the general limitations of credit line.The information related to large loan is presented according to the BRPD circular 14 dated June 25, 2003 and rearrange the comparative information

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

i) Loans / investments considered good in respect of which the Bank is fully secured 138,441,662,321 116,535,874,451 ii) Loans / investments considered good against which the Bank holds no

security other than the debtors' personal guarantee 2,697,014,628 7,798,673,512

iii) Loans / investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors 6,227,975,444 29,254,212,265

iv) Loans / investments adversely classified; provision not maintained there against - - 147,366,652,393 153,588,760,229

v) Loans / investments due by directors or officers of the banking company or any of them either separately or jointly with any other persons (note-7a.4b+7a.4c.vii) 1,863,692,614 1,873,443,756

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

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

1,863,692,614

1,873,443,756

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

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

a) Classified loans and advances / investments on which interest has not been charged (note-7a.10) 11,214,642,962 7,814,501,727b) Provision on classified loans and advances / investments (for details see note-14a.3 & 14a.5) 4,586,296,479

3,733,047,125

c) Provision kept against loans / investments classified as bad debts 3,796,912,946 3,184,620,754 d) Interest credited to Interest Suspense Account (note-14a.6) 2,722,214,058 1,913,098,167

xi) Cumulative amount of written off loans / investmentsOpening Balance 5,519,757,834 2,979,164,346 Amount written off during the year 2,122,934,300 2,540,593,488

7,642,692,134 5,519,757,834 Amount realised against loans / investments previously written off 202,683,654 6,064,168 The amount of written off / classified loans / investments for which law suits have been filed (note-7a.13) 17,739,148,578 12,702,465,814

328




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

Unclassified

Standard including staff loan 130,535,948,803 141,281,895,324

Special mention account (SMA) 5,616,060,628 4,492,363,178

136,152,009,431 145,774,258,502

Classified

Sub-standard 1,852,281,599 874,419,377

Doubtful 1,268,158,259 1,054,568,739

Bad / Loss 8,094,203,104 5,885,513,611

11,214,642,962 7,814,501,727

147,366,652,393 153,588,760,229

7a.11 Particulars of required provision for loans, advances and lease / investments

Status Basefor provision

Rate(%)

General ProvisionLoans/investments (Including SMA) 136,152,009,431 *Various 1,739,048,000 1,687,252,207 Interest receivable on loans/investments 641,454,035 1 6,414,540 5,237,694

1,745,462,540 1,692,489,901

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

Status Basefor provision

Rate(%)

Specific provisionSub-standard 1,053,890,162 20 210,778,032 86,980,444 Doubtful 1,120,063,435 50 560,031,717 458,927,698 Bad / Loss 3,796,912,946 100 3,796,912,946 3,184,620,754

4,567,722,695 3,730,528,896 Required provision for loans, advances and lease / investments 6,313,185,236 5,423,018,797 Total provision maintained (note - 14, 14a3 & 14a.5) 6,336,963,297 5,433,236,415 Excess / (short) provision at 31 December 2014 23,778,061 10,217,618

7a.12 Particulars of required provision on Off-balance Sheet Exposures

Basefor provision

Rate1%

Acceptances and endorsements 26,742,389,739 267,423,897 308,693,049 Letter of guarantee 61,408,149,593 614,081,496 554,381,393 Letter of credit 20,698,448,178 206,984,482 208,859,575 Required provision on Off-balance Sheet Exposures 1,088,489,875 1,071,934,017 Total provision maintained (note - 14a.4) 1,088,490,000 1,090,000,000 Excess / (short) provision at 31 December 2014 125 18,065,983

329



7a.13 Suits filed by the Bank (Branch wise details)Agrabad Branch 197,535,420 181,091,420 Adamjee EPZ Branch 1,286,331 1,286,331 Asad Gate Branch 17,477,895 21,699,401 Ashulia Branch 7,028,374 10,944,530 Banani Branch 29,808,789 27,297,839 Bangshal Branch 31,309,540 26,595,540 Barisal Branch 545,085 545,085 Bashundhara Branch 7,290,747 7,412,477 Bhairab Bazar Branch 2,157,714 570,714 Biswanath Bracnh 319,700 - Bogra Branch 5,105,996 736,361,692 Head Office, FMD & Card 33,324,152 24,302,502 Chaumuhani Branch 13,248,317 153,779 Court Road Branch 507,721 507,721 Cox's Bazar Branch 1,719,330 1,894,530 Dinajpur Branch 1,782,297 1,179,786 Elephant Road Branch 2,529,054,520 1,702,826,470 Fatickchari Branch 1,150,000 -Faridpur Branch 187,000 187,000 Feni Branch 226,081 1,028,601 Foreign Exchange Branch 176,209,687 171,871,396 Ganakbari Branch 800,000 800,000 Garib-e-Newaz Branch 326,495 326,495 Gulshan Branch 111,393,494 93,893,494 Hajigonj Branch 277,365 277,365 Halishahar Branch 1,075,000 716,034 Hathazari Branch 9,439,029 8,973,879 IBB, Amberkhana Branch 19,633,392 9,632,100 IBB, Dilkusha Branch 26,740,776 26,740,776 IBB, Mirpur Branch 76,854,347 60,434,498 IBB, O.R. Nizam Road Branch 83,114,851 82,621,251 IBB, Pahartali Branch 15,499,110 15,499,110 Jamalpur Branch - 311,000 Jatrabari Branch 1,918,013 1,130,421 Jessore Branch 912,410,130 6,046,580 Joypara 2,293,964 2,293,964 Joydevpur Chowrasta Branch - 1,696,973 Jubilee Road Branch 1,773,411,000 933,174,863 Kawran Bazar Branch 102,899,915 133,348,985 Khatunganj Branch 795,319,047 795,152,047 Khulna Branch 2,363,516,165 119,979,665 Kishoreganj 84,755 - Kustia Branch 4,257,716 2,100,403 Laldighi East Branch 1,021,859,621 412,745,500 Madhabdi Branch 2,937,003 2,937,003 Mirpur-1 Branch 12,028,175 7,987,830 Motijheel Branch 6,165,056,254 6,113,652,133 Mohakhali Branch 2,012,365 2,012,365 Mouchak Branch 153,102,393 124,884,081 Moulvibazar Branch, Dhaka 91,239,263 95,627,284

330




Suits filed by the Bank (Branch wise details)Mymensingh Branch 8,482,743 8,482,743 Naogaon Branch 63,273,369 60,233,982 Narayanganj Branch 41,247,381 41,284,660 New Eskaton Branch 1,392,076 1,392,076 Oxygen More Branch 3,092,696 2,582,696 Pabna Branch 8,280,882 8,280,882 Pallabi Branch 4,448,836 3,290,751 Panthapath Branch 6,628,535 3,731,725 Pragati Sarani Branch 13,139,851 6,339,826 Prabortak More Branch 3,258,862 2,053,082 Rajshahi Branch 314,953,333 314,731,333 Rangpur Branch 2,377,017 2,737,017 Retail Banking Division 8,392,261 - Ring Road Branch 61,580,105 50,477,613 Sat Masjid Road Branch 51,744,782 49,638,430 Savar Branch 46,139,940 - SBC Tower Branch 84,760,405 4,966,853 Simrail Branch 5,465,265 5,465,265 SME Banking, Dhaka 57,202,183 43,796,199 Sremangal Branch 40,011,512 42,497,866 Sylhet Branch 25,395,848 20,537,350 Subidbazar Branch, Sylhet 32,078,626 31,151,126 Tangail Branch 857,583 857,583 Tajpur Branch 2,128,421 - Tongi Branch 2,432,493 2,432,493 Uposhahar Branch, Sylhet 1,841,723 1,550,500 Uttara Branch 41,767,517 21,200,849

17,739,148,578 12,702,465,814

8 Consolidated bills purchased and discounted

Prime Bank Limited (note-8a) 4,586,552,073 6,207,878,277 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 2,307,272,268 2,423,668,487

6,893,824,341 8,631,546,764

8a Bills purchased and discounted

Payable in Bangladesh 3,058,777,247 4,376,377,482 Payable outside Bangladesh 1,527,774,826 1,831,500,795

4,586,552,073 6,207,878,277

8a.1 Maturity grouping of bills purchased and discounted

Payable within one month 1,690,324,909 2,172,817,434 Over one month but less than three months 1,812,860,923 2,895,891,748 Over three months but less than six months 1,050,338,299 1,116,986,582 Six months or more 33,027,942 22,182,513

4,586,552,073 6,207,878,277

331



9 Consolidated fixed assets including premises, furniture and fixtures

Prime Bank Limited (note-9a) 6,612,686,818 6,406,719,662 Prime Bank Investment Limited 12,804,672 17,924,016 Prime Bank Securities Limited 2,628,471 6,155,630 Prime Exchange Co. Pte. Ltd., Singapore 3,649,221 6,145,266 PBL Exchange (UK) Ltd. 14,596,992 16,945,051 PBL Finance (Hong Kong) Limited 2,286,942 2,869,448

6,648,653,116 6,456,759,073

9a Fixed assets including premises, furniture and fixtures of the Bank

Property, Plant & EquipmentLand 3,702,444,788 3,543,593,939 Building 1,649,581,248 1,474,637,827 Furniture and fixtures 818,405,134 768,205,298 Office equipment and machinery 1,440,363,793 1,306,112,866 Vehicles 321,433,375 319,950,486 Library books 1,805,129 1,746,017

7,934,033,467 7,414,246,433

Leased property:Leased vehicles 31,690,384 31,690,384

AtmHardware & equipment 249,631,775 233,788,335 Furniture & fixtures 43,528,537 42,426,440

293,160,312 276,214,775

Off-shore Banking Units

Furniture and fixtures 2,991,998 2,978,790

Office equipment and machinery 1,742,930 1,637,587

Vehicles 1,410,371 1,410,371

6,145,299 6,026,748 8,265,029,462 7,728,178,340

Less: Accumulated depreciation 1,756,221,695 1,463,175,057

6,508,807,767 6,265,003,283

Intangibles assets

Software-core banking 244,443,757 244,091,071

Software-ATM 43,212,614 43,212,614

Cost of intangibles assets 287,656,371 287,303,685

Less: Accumulated amortization 183,777,321 145,587,306

103,879,050 141,716,379

Net book value at the end of the year (See annexure-C for detail) 6,612,686,818 6,406,719,662

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

332




10 Consolidated other assets


Less: Investment in Prime Bank Investment Limited (note-10a.5) (2,999,999,940) (2,999,999,940)

Less: Investment in Prime Bank Securities Limited (note-10a.5) (712,500,000) (712,500,000)

Less: PBIL investment in Prime Bank Securities Ltd.(below) (37,500,000) (37,500,000)

Less: Investment in PBL Exchange (UK) Ltd. (note-10a.5) (56,352,624) (56,352,624)

Less: Investment in Prime Exchange Co. Pte. Ltd., Singapore (note-10a.5) (10,993,235) (10,993,235)

Less: Investment in PBL Finance (Hong Kong) Limited (note-10a.5) (34,365,722) (34,365,722)

Less: Dividend of Prime Bank Investment Limited (note-10a) - -

Less: Interest receivable from PBL Finance (Hong Kong) Limited (restated) - (7,046,474)

Less: Due from Investment in PBL Finance (Hong Kong) Limited (note-10a) (2,191,547,381) (2,323,714,250)

3,023,964,273 2,237,990,490

Prime Bank Investment Limited (investment in PBSL) 37,500,000 37,500,000






120,811,305 307,085,393

3,144,775,578 2,545,075,883

10a Other assets of the Bank

Stationery and stamps 24,722,480 23,087,731 Exchange adjustment account 2,305,667 - Investment in subsidiary (note-10a.5) 3,814,211,521 3,814,211,521 Loan to Off-shore Banking Units 4,351,658,435 5,008,368,379 Due from Off-shore Banking Units 132,911,416 111,353,884 Loan to PBL Finance (Hong Kong) Limited 2,191,547,381 2,323,714,250

Prepaid expenses 17,926,965 15,018,391

Interest / profit receivable on loan (note-10a.1) 641,454,035 523,769,388 Interest receivable on Govt. securities 1,381,562,486 1,174,675,523 Advance deposits and advance rent 274,085,598 164,348,546 Prepaid expenses against house furnishing 8,202,887 7,072,019 Branch adjustments account 18,533,017 23,675,936 Migration account - 1 Suspense account (note -10a.2) 384,161,142 204,781,969 Encashment of PSP / BSP 136,623,524 35,151,558 ATM 10,395,688 1,407,446 Credit card 115,268,108 92,196,123 Sundry assets ( note -10a.3) 46,222,676 17,352,333

13,551,793,026 13,540,184,998 Less: Off-shore Banking Units 4,484,569,851 5,119,722,263

9,067,223,175 8,420,462,735

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

333



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

10a.3 Sundry assetsProtested Bills 18,304,367 29,931,566 Less: Write off during the year - (14,526,624)Others 27,918,309 1,947,391

46,222,676 17,352,333

10a.4 Particulars of required provision for other assetsRate

Purchase of credit card bills 71,000,000 100% 71,000,000 71,000,000 Protested bills 18,304,367 100% 18,304,367 15,404,942 Advance deposits and advance rent - 100% - 1,212,244 Legal Expenses 1,874,748 50% 937,374 Others 4,268,575 100% 4,268,575 - Required provision for other assets 94,510,317 87,617,186 Total provision maintained (note - 14a.8) 94,538,648 88,338,648 Excess / (short) provision at 31 December 2014 28,332 721,462

10a.5 Investment in subsidiaries

Prime Bank Investment Limited 2,999,999,940 2,999,999,940 Prime Bank Securities Limited 712,500,000 712,500,000 Prime Exchange Co. Pte. Ltd., Singapore 10,993,235 10,993,235 PBL Exchange (UK) Ltd. 56,352,624 56,352,624 PBL Finance (Hong Kong) Limited 34,365,722 34,365,722

3,814,211,521 3,814,211,521

As per the provision of the Exchange Demutualization Act-2013 and in accordance with the Bangladesh Security Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE) alloted total 72,15,106 ordinary shares at a face value of Tk 10.00 each and Chittagong Stock Exchange Ltd. (CSE) alloted total 42,87,330 ordinary Shares at face value of Tk 10.00 each against the Membership of DSE and CSE respectively. Out of the above DSE transferred 2,886,042 shares and CSE transferred 1,714,932 shares directly to the credit of the Beneficiary Owner's account of the company. The remaining shares were credited to blocked accounts as per provisions of the Exchange Demutualization Act, 2013. As there is no active market for shares of DSE and CSE, we have shown the value at original cost as investment.

11 Non-Banking Assets

Name of Parties Possession dateM/s Rima Flour Mills 18.03.2014 124,438,400 - M/s Ripon Motors 18.03.2014 51,902,240 -

176,340,640 -

The Bank has been awarded ownership of the mortgage properties of M/S Rima Flour Mills and M/S Ripon Motors according to the verdict of the Honorable Court in accordance with the section 33(7) of “Artharin Adalat-2003”. An amount of Tk.176,340,640/- is reported in the financial statements as Non -Banking assets. The value of Non-Banking Assets has been determined on the basis of valuation report of an Independent valuer named “M/S MSK Inspection Company Ltd.”

12 Consolidated borrowings from other banks, financial institutions and agents

Prime Bank Limited (note-12a) 7,668,875,959 3,858,260,882 Prime Bank Investment Limited 3,387,911,205 3,788,934,831 Prime Bank Securities Limited 371,066,787 338,010,202 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

11,427,853,951 7,985,205,915 Less: Inter-company transactions 3,344,650,634 3,711,608,286

8,083,203,317 4,273,597,629

334




12a Borrowings from other banks, financial institutions and agents of the Bank

In Bangladesh (note-12a.1) 3,381,658,959 2,692,010,882 Outside Bangladesh (note-12a.2) 4,287,217,000 1,166,250,000

7,668,875,959 3,858,260,882

12a.1 In BangladeshCall deposits - - PBL bond 2,500,000,000 2,500,000,000 Standard Chartered Bank, Bangladesh 4,354,922 1,968,953 NPSB Settlement 7,061,595 - Repo of Treasury Bills 743,665,000 - Refinance against SME loan from Bangladesh Bank 126,577,443 190,041,929

3,381,658,959 2,692,010,882

12a.2 Outside BangladeshThe Bank of Maskat, OMAN - - FMO, Netherlands 1,948,735,000 - BANCA UBAE SPA, Italy - 388,750,000 Commercial Bank of Qatar 779,494,000 777,500,000 International Finance Corporation 1,558,988,000 -

4,287,217,000 1,166,250,000

12a.3 Security against borrowings from other banks, financial institutions and agents

Secured (Treasury bills) 743,665,000 - Unsecured 6,925,210,959 3,858,260,882

7,668,875,959 3,858,260,882

12a.4 Maturity grouping of borrowings from other banks, financial institutions and agents

Payable on demand - - Up to 1 month 755,081,517 1,968,953 Over 1 month but within 3 months - - Over 3 months but within 1 year 2,338,482,000 1,166,250,000 Over 1 year but within 5 years 4,575,312,443 2,690,041,929 Over 5 years - -

7,668,875,959 3,858,260,882

13 Consolidated deposits and other accounts

Current deposits and other accountsPrime Bank Limited (note-13a.1.c) 27,586,626,484 26,612,333,767 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

27,586,626,484 26,612,333,767 Less: Inter-company transactions 29,734,497 87,277,156

27,556,891,987 26,525,056,611

335



Bills payable Prime Bank Limited (note-13a.1.c) 2,942,889,234 2,081,417,055 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

2,942,889,234 2,081,417,055 Savings bank / Mudaraba savings depositsPrime Bank Limited (note-13a.1.c) 25,106,122,963 21,125,908,174 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

25,106,122,963 21,125,908,174 Term / Fixed depositsPrime Bank Limited (note-13a.1.c) 149,202,091,888 152,087,482,186 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

149,202,091,888 152,087,482,186 Less: Inter-company transactions (restated) 4,479,293 9,170,471

149,197,612,596 152,078,311,714 204,803,516,780 201,810,693,554

13a Deposits and other accounts of the Bank

Deposits from banks (note -13a.1.a) 3,269,109,409 3,220,015,044 Deposits from customers (note-13a.1.b) 201,568,621,160 198,687,126,138

204,837,730,569 201,907,141,182

13a.1 a) Deposits from Banks

Current deposits and other accounts 21,869,581 55,157,539 Savings bank / Mudaraba savings deposits 27,249,372 33,178,088 Special notice deposits 719,990,457 3,131,679,417 Fixed deposits 2,500,000,000 -

3,269,109,409 3,220,015,044 b) Customer Deposits

i) Current deposits and other accountsCurrent / Al-wadeeah current deposits 11,346,101,277 9,611,746,856 Foreign currency deposits 4,060,096,974 3,757,493,442 Security deposits 9,104,416 10,240,925 Sundry deposits (note - 13a.2) 12,437,754,408 13,525,353,551

27,853,057,075 26,904,834,774 Less: Off-shore Banking Units 288,300,173 347,658,546

27,564,756,903 26,557,176,228

336




ii) Bills payable Pay orders issued 2,901,951,106 2,034,158,732 Pay slips issued 3,950,619 4,228,790 Demand draft payable 36,668,259 42,595,454 Foreign demand draft 313,592 313,592 T. T. payable 4,720 119,720 Bill Pay ATM 938 767

2,942,889,234 2,081,417,055

iii) Savings bank / Mudaraba savings deposits 25,078,873,591 21,092,730,086

iv) Term / Fixed depositsFixed deposits / Mudaraba fixed deposits 85,381,031,529 90,251,742,484 Special notice deposits 13,293,344,787 11,965,259,585 Non resident Taka deposits 902,232,979 793,839,134 Scheme deposits 46,405,492,137 45,944,961,566

145,982,101,432 148,955,802,769 201,568,621,160 198,687,126,138

204,837,730,569 201,907,141,182 c) Deposits and other accountsCurrent deposits and other accountsDeposits from banks (note -13a.1.a) 21,869,581 55,157,539 Deposits from customers (note-13a.1.b.i) 27,564,756,903 26,557,176,228

27,586,626,484 26,612,333,767 Bills payableDeposits from banks (note -13a.1.a) - - Deposits from customers (note-13a.1.b.ii) 2,942,889,234 2,081,417,055

2,942,889,234 2,081,417,055 Savings bank / mudaraba savings depositsDeposits from banks (note -13a.1.a) 27,249,372 33,178,088 Deposits from customers (note-13a.1.b.iii) 25,078,873,591 21,092,730,086

25,106,122,963 21,125,908,174 Term / Fixed depositsDeposits from banks (note -13a.1.a) 3,219,990,457 3,131,679,417 Deposits from customers (note-13a.1.b.iv) 145,982,101,432 148,955,802,769

149,202,091,888 152,087,482,186 204,837,730,569 201,907,141,182

13a.2 Sundry deposits

F.C. held against back to back L/C 5,539,717,082 5,855,120,347 Sundry creditors 144,790,129 59,271,224 Risk fund and service charges (CCS and lease finance) 55,008,833 40,444,902 Sale proceeds of PSP / BSP 39,390,000 72,885,000 Margin on letters of guarantee 1,207,823,431 1,161,150,850 Margin on letters of credit 1,351,138,286 1,526,926,409 Margin on FDBP / IDBP, export bills, etc 79,490,309 116,518,903 Lease deposits 114,199,921 116,593,055 Interest / profit payable on deposits 2,077,841,359 2,842,526,106 Withholding VAT/Tax /Excise duty payable to Government Authority 416,764,704 619,900,109 Others 1,411,590,355 1,114,016,646

12,437,754,408 13,525,353,551

337



13a.3 Payable on demand and time depositsa) Demand depositsCurrent deposits 11,367,970,858 9,666,904,396 Savings deposits (9%) 2,259,551,067 1,901,331,736 Foreign currency deposits (Non interest bearing) 3,771,796,801 3,409,834,896 Security deposits 9,104,416 10,240,925 Sundry deposits 12,437,754,408 13,525,353,551 Bills payable 2,942,889,234 2,081,417,055

32,789,066,784 30,595,082,558

b) Time depositsSavings deposits (91%) 22,846,571,896 19,224,576,438 Fixed deposits 87,881,031,529 90,251,742,484 Special notice deposits 14,013,335,244 15,096,939,002 Deposits under schemes 46,405,492,137 45,944,961,566 Non resident Taka deposits 902,232,979 793,839,134

172,048,663,784 171,312,058,624 204,837,730,569 201,907,141,182

13a.4 Sector-wise break-up of deposits and other accounts

Government 2,022,588,387 2,789,570,000 Deposit money banks 3,269,109,409 3,220,015,044 Other public 8,344,684,894 6,369,399,824 Foreign currency 3,771,796,801 3,409,834,896 Private 187,429,551,077 186,118,321,418

204,837,730,569 201,907,141,182

13a.5 Unclaimed deposits and valuables

Current deposits - 117,090 Savings deposits - 268,276 Demand Draft - 278,310 SDR 35,780 1,015,432 Pay order 710,933 5,034,420 Sundry Deposit 17,343 -

764,057 6,713,528

13a.6 Maturity analysis of deposits

a) Maturity analysis of deposits from BanksPayable on demand - - Up to 1 month 21,869,581 55,157,539 Over 1 month but within 3 months 92,048,513 346,346,029 Over 3 months but within 1 year 2,500,000,000 - Over 1 year but within 5 years 655,191,315 2,818,511,476 Over 5 years but within 10 years - - Over 10 years - -

3,269,109,409 3,220,015,044

b) Maturity analysis of customer deposits excluding bills payablePayable on demand - - Up to 1 month 30,818,341,049 31,263,902,485 Over 1 month but within 3 months 52,232,350,268 58,915,442,556 Over 3 months but within 1 year 29,123,967,930 32,818,144,014 Over 1 year but within 5 years 48,594,967,734 22,402,309,920 Over 5 years but within 10 years 37,855,340,887 51,199,196,580 Over 10 years 764,057 6,713,528

198,625,731,926 196,605,709,083

338




c) Maturity analysis of bills payablePayable on demand 2,942,889,234 2,081,417,055 Up to 1 month - - Over 1 month but within 3 months - - Over 3 months but within 1 year - - Over 1 year but within 5 years - - Over 5 years but within 10 years - - Over 10 years - -

2,942,889,234 2,081,417,055 204,837,730,569 201,907,141,182

14 Consolidated other liabilitiesPrime Bank Limited (note-14a) 17,944,881,561 15,073,785,652 Prime Bank Investment Limited 787,857,453 720,748,302 Prime Bank Securities Limited 63,792,922 192,845,418 Prime Exchange Co. Pte. Ltd., Singapore 26,777,326 23,343,179 PBL Exchange (UK) Ltd. 29,721,778 38,735,149 PBL Finance (Hong Kong) Limited 27,971,839 21,810,824

18,881,002,879 16,071,268,524 Less: Inter-company transactions (restated) - 7,046,474

18,881,002,879 16,064,222,050

14a Other liabilities of the Bank

Foreign currency held against EDF loan 3,560,736,089 2,019,648,273 Exchange equalization account (note - 14a.7) - - Exchange adjustment account - 795,021 Expenditure and other payables 114,717,427 78,636,660 Provision for bonus 240,797,211 202,107,180 Obligation under finance lease (note-14a.9) - 3,624,186 Provision for income tax (note - 14a.1) 2,416,474,933 2,484,245,887 Deferred tax liability (note-14a.2) 1,034,821,220 1,319,653,470 Unearned commission on bank guarantee 90,117,676 120,567,836 Credit card - 700 Provision for gratuity - 106,797,460 Provision for off-balance sheet exposures (note-14a.4) 1,088,490,000 1,090,000,000 Provision for Off-shore Banking Units (note-14a.5) 498,500,000 422,500,000 Fund for employee welfare fund (EWF) 6,560,200 6,891,000 Fund for Prime Bank Foundation (PBF) 131,203,993 137,820,000 Provision for loans and advances / investments (note - 14a.3) 5,828,945,997 5,001,219,115 Provision for Interest receivable on loans and advances / investments 9,517,300 9,517,300 Provision for diminution in value of investments 61,324,749 68,324,749 Interest suspense account (note - 14a.6) 2,722,214,058 1,913,098,167 Provision for Impairement loss for investment in subsidiaries (note-39a) 45,398,089 - Other liabilities 523,970 - Other provision (note - 14a.8) 94,538,648 88,338,648

17,944,881,561 15,073,785,652

339



14a.1 Provision for income tax

Advance taxBalance of advance income tax on 1 January 13,058,306,084 11,196,053,006 Paid during the year 1,247,770,954 1,862,253,078 Settlement of previous year's tax liability - -

14,306,077,038 13,058,306,084

ProvisionBalance of provision on 1 January 15,542,551,971 13,926,551,971 Provision of previous year - - Provision made during the year (note-40a) 1,180,000,000 1,616,000,000

16,722,551,971 15,542,551,971 Net balance at 31 December 2,416,474,933 2,484,245,887

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

14a.2 Deferred tax liability

Deferred tax liabilityBalance as on 1 January 1,319,653,470 1,052,920,593 Add: Provision for revaluation of land and building (note-18) 7,967,750 266,732,877 Add: Addition / Adjustment during the year (note-40a) (292,800,000) - Balance as on 31 December 1,034,821,220 1,319,653,470

14a.3 Provision for loans, advances and lease / investments

Movement in specific provision on classified loans / investments:Provision held as on 1 January 3,342,047,125 1,949,076,445 Less: Fully provided debts written off during the year (2,122,934,300) (2,540,593,488)Add: Recoveries of amounts previously written off 202,683,654 6,064,168 Add: Specific provision made during the year for other accounts 9,522,472 - Add: Transferred from General Provision 100,000,000 947,500,000 Less: Provision no longer required (9,522,472) - Add: Net charge to profit and loss account (note-39a) 2,643,500,000 2,980,000,000 Provision held as on 31 December 4,165,296,479 3,342,047,125

Movement in general provision on unclassified loans / investments

Provision held as on 1 January 1,659,171,990 1,964,671,990 Add: Amount transferred to classified provision (109,522,472) (947,500,000)Add: General provision made during the year (note-39a) 114,000,000 642,000,000 Provision held as on 31 December 1,663,649,518 1,659,171,990

5,828,945,997 5,001,219,115

14a.4 Provision for off-balance sheet exposures

Provision held as on 1 January 1,090,000,000 1,080,000,000 Add: Amount transferred from classified provision - - Add: Provision made during the year (note-39a) (1,510,000) 10,000,000 Provision held as on 31 December 1,088,490,000 1,090,000,000

340




14a.5 Provision for Off-shore Banking Units

Movement in specific provision on classified loans / investments:Provision held as on 1 January 391,000,000 - Add: Transferred from Unclassified Provision of OBU - 41,000,000 Add: Net charge to profit and loss account (note-39a) 30,000,000 350,000,000 Provision held as on 31 December 421,000,000 391,000,000

Movement in general provision on unclassified loans / investments

Provision held as on 1 January 31,500,000 60,500,000 Add: Amount transferred to classified provision of OBU - (41,000,000)Add: General provision made during the year (note-39a) 46,000,000 12,000,000 Provision held as on 31 December 77,500,000 31,500,000

498,500,000 422,500,000 14a.6 Interest suspense account

Balance as on 1 January 1,913,098,167 620,359,575 Add: Amount transferred to “interest suspense” account during the year 2,932,771,293 1,853,144,443 Less: Amount recovered from “interest suspense” account during the year (1,248,876,000) (347,292,000)Less: Amount written-off during the year (874,779,402) (213,113,851)Balance as on 31 December 2,722,214,058 1,913,098,167

As per BRPD circular no. 14 dated September 23, 2012 as soon as any loan or advance is classified as 'Bad/Loss', charging of interest in the same account will be ceased. But the existing banking software is consistently charging interest on the classified loan accounts marked as ‘bad and loss’. Such interest against classified loans has been adjusted to loans and advances and interest suspense account during the current year but the comparative figure could not be adjusted due to impracticability of calculation of such accrued interest amount. However, we feel that the accrued interest amount is not material in the context of financial position.

14a.7 Exchange equalization account Balance as on 1 January - - Less: Transfer during the year - - Balance as on 31 December - -

14a.8 Other provision for classified assets Balance as on 1 January 88,338,648 247,111,936 Add: Addition during the year (note-39a) 6,200,000 10,135,000 Less: Adjustment during the year - (168,908,288)Balance as on 31 December 94,538,648 88,338,648

14a.9 Obligation under finance leaseMinimum lease rental payable Within 1 year - 3,721,693 Above 1 year but within 5 years - -

- 3,721,693 Less: Finance charge payable - 97,507

- 3,624,186

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15 Share capital

15.1 Authorized capital

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

15.2 Issued, subscribed and fully paid up capital30,000,000 ordinary shares of Taka 10 each issued for cash 300,000,000 300,000,000

883,821,276 ordinary shares of Taka 10 each issued as bonus shares 8,838,212,760

8,838,212,760

115,527,340 ordinary shares of Taka 10 each issued as right shares 1,155,273,400 1,155,273,400 10,293,486,160 10,293,486,160

15.2 Issued, subscribed and fully paid up capital30,000,000 ordinary shares of Taka 10 each issued for cash 300,000,000 300,000,000 883,821,276 ordinary shares of Taka 10 each issued as bonus shares 8,838,212,760 8,838,212,760 115,527,340 ordinary shares of Taka 10 each issued as right shares 1,155,273,400 1,155,273,400

10,293,486,160 10,293,486,160

15.3 History of paid-up capital

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

Accounting year Declaration No of share Value in capital Cumulative 1995 Opening capital 10,000,000 100,000,000 100,000,000 1996 60% Bonus share 6,000,000 60,000,000 160,000,000 1997 25% Bonus share 4,000,000 40,000,000 200,000,000 1999 Initial Public Offer (IPO) 20,000,000 200,000,000 400,000,000 2000 25% Bonus share 10,000,000 100,000,000 500,000,000 2001 20% Bonus share 10,000,000 100,000,000 600,000,000 2002 16.67% Bonus share 10,000,000 100,000,000 700,000,000 2003 42.86% Bonus share 30,000,000 300,000,000 1,000,000,000 2004 40% Bonus share 40,000,000 400,000,000 1,400,000,000 2005 25% Bonus share 35,000,000 350,000,000 1,750,000,000 2006 30% Bonus share 52,500,000 525,000,000 2,275,000,000 2007 25% Bonus share 56,875,000 568,750,000 2,843,750,000 2008 25% Bonus share 71,093,750 710,937,500 3,554,687,500 2009 30% Bonus share 106,640,620 1,066,406,200 4,621,093,700

25% right share 115,527,340 1,155,273,400 5,776,367,100 2010 35% Bonus share 202,172,848 2,021,728,480 7,798,095,580 2011 20% Bonus share 155,961,911 1,559,619,110 9,357,714,690 2012 10% Bonus share 93,577,147 935,771,470 10,293,486,160

1,029,348,616 10,293,486,160

342




15.4 Group capital adequacy ratio (Consolidated)In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no. 35 dated December 29, 2010, required capital of the Bank (Consolidated) at the close of business on 31 December 2014 was Taka 21,632,425,376 as against available core capital of Taka 22,611,399,901 and supplementary capital of Taka 4,812,296,196 making a total capital of Taka 27,423,696,097 thereby showing a surplus capital / equity of Taka 5,791,270,720 at that date. Details are shown below:Core capital (Tier-I)Paid-up capital (note-15.2) 10,293,486,160 10,293,486,160 Share premium (note-15.8) 2,241,230,396 2,241,230,396 Minority interest(note-15.9) 60 65 Statutory reserve (note-16) 8,184,646,579 7,528,626,614 General reserve 28,002,888 28,002,888 Surplus in consolidated profit and loss account / Retained earnings (note-20) 1,864,033,818 1,616,368,842

22,611,399,901 21,707,714,965 Supplementary capital (Tier-II)General provision maintained against unclassified loan / investments (note-14a.3) 1,663,649,518 1,659,171,990 General provision on off-balance sheet exposures (note-14a.4) 1,088,490,000 1,090,000,000 General provision on off-shore Banking Units (note-14a.5) 77,500,000 31,500,000 Revaluation gain / loss on investments-50% of total (note-17) 230,897,400 67,835,681 Revaluation reserve for equity instruments-10% of market gain - - Revaluation reserve-50% of total (note-18) 751,759,278 755,743,153 Prime Bank Sub-ordinated Bond 1,000,000,000 1,500,000,000 Exchange equalization account (note-14a.7) - -

4,812,296,196 5,104,250,824 A) Total capital 27,423,696,097 26,811,965,789 Total assets including off-balance sheet exposures 374,460,497,009 361,921,928,348 B) Total risk weighted assets 216,324,253,765 222,791,428,514 C) Required capital based on risk weighted assets (10% on B) 21,632,425,376 22,279,142,851 D) Surplus (A-C) 5,791,270,720 4,532,822,938 Capital adequacy ratio 12.68% 12.03%

Capital requirement Required Held Required HeldTier - I 5% 10.45% 5% 9.74%Tier - II 5% 2.23% 5% 2.29%Total 10.00% 12.68% 10.00% 12.03%

Capital adequacy ratio (Solo Basis)

Core capital (Tier-I)Paid-up capital (note-15.2) 10,293,486,160 10,293,486,160 Share premium (note-15.8) 2,241,230,396 2,241,230,396 Statutory reserve (note-16) 8,184,646,579 7,528,626,614 Surplus in consolidated profit and loss account / Retained earnings (note-20a) 1,791,274,627 1,341,080,535

22,510,637,762 21,404,423,705

Supplementary capital (Tier-II)General provision maintained against unclassified loan / investments (note-14a.3) 1,663,649,518 1,659,171,990 General provision on off-balance sheet exposures (note-14a.4) 1,088,490,000 1,090,000,000 General provision on off-shore Banking Units (note-14a.5) 77,500,000 31,500,000 Revaluation gain / loss on investments-50% of total (note-17a) 220,734,813 54,596,901 Revaluation reserve-50% of total (note-18) 751,759,278 755,743,153 Prime Bank Sub-ordinated Bond 1,000,000,000 1,500,000,000 Exchange equalization account (note-14a.7) - -

4,802,133,609 5,091,012,044 A) Total capital 27,312,771,370 26,495,435,749

Total assets including off-balance sheet exposures 373,023,367,945 360,283,700,614 B) Total risk weighted assets 214,891,840,014 220,020,078,032 C) Required capital based on risk weighted assets (10% on B) 21,489,184,001 22,002,007,803 D) Surplus (A-C) 5,823,587,369 4,493,427,946 Capital adequacy ratio 12.71% 12.04%

Capital requirement Required Held Required HeldTier - I 5% 10.48% 5% 9.73%Tier - II 5% 2.23% 5% 2.31%Total 10.00% 12.71% 10.00% 12.04%

343



15.5 Percentage of shareholdings at the closing date

Particulars2014 2013 2014 2013Taka Taka % %

Sponsors 4,172,290,330 4,165,087,830 40.53% 40.46%Financial Institutions 2,256,814,180 1,886,179,950 21.92% 18.32%Foreign Investors 140,552,070 511,084,550 1.37% 4.97%Non- resident Bangladeshi 39,915,690 37,522,850 0.39% 0.36%General Public 3,683,913,890 3,693,610,980 35.79% 35.88%

10,293,486,160 10,293,486,160 100.00% 100.00%

15.6 Shareholding range on the basis of shareholdings as at 31 December 2014

Shareholding range Number of share holders

TakaShares Percentage

Less than 500 11,410 1,922,053 0.19%500- 5,000 8,865 15,260,431 1.48%5,001 - 10,000 1,245 8,859,553 0.86%10,001 - 20,000 701 10,064,830 0.98%20,001 - 30,000 190 4,683,706 0.45%30,001 - 40,000 97 3,368,941 0.33%40,001 - 50,000 75 3,382,970 0.33%50,001 - 100,000 177 12,321,318 1.20%100,001 - 1,000,000 213 62,026,495 6.02%Over 1,000,000 129 907,458,319 88.16%

23,102 1,029,348,616 100.00%

15.7 Name of the Directors and their shareholdings as at 31 December 2014

Sl Name of the directors Status Opening position

Closing position

% of shares as at

31.12.2014

1 Mr. Azam J Chowdhury(Representative of East Coast Shipping Lines Ltd.) Chairman 20,601,158 20,601,158

2.00 (Share holding of

East Cost Shipping Lines Ltd.)

2 Mr. Khandker Mohammad Khaled Vice Chairman 28,570,378 28,570,378 2.78 3 Mr. M. A. Khaleque Vice Chairman 21,846,820 21,846,820 2.12 4 Quazi Sirazul Islam Director 20,616,158 20,616,158 2.00 5 Mr. Md. Nader Khan Director 38,019,361 38,019,361 3.69 6 Mr. Md. Shirajul Islam Mollah Director 20,644,922 20,644,922 2.01 7 Mr. Mafiz Ahmed Bhuiyan Director 20,591,099 20,591,099 2.00 8 Mr. Md. Shahadat Hossain Director 27,811,583 27,811,583 2.70

9 Mr. Mizanur Rahman Bhuiyan(Representative of Uniglory Cycle Industries Ltd.) Director 20,760,250

2.02 (Share holding

of Uniglory Cycle Industries Ltd.)

10 Mrs. Marina Yasmin Chowdhury Director 20,882,328 20,882,328 2.03 11 Mrs. Nazma Haque Director 20,678,053 20,678,053 2.01 12 Mrs. Nasim Anwar Hossain Director 23,365,749 23,365,749 2.27 13 Mrs. Salma Huq Director 32,254,341 32,254,341 3.13 14 Mrs. Muslima Shirin Director 20,587,749 20,587,749 2.00 15 Mr. Nafis Sikder Director 25,826,178 25,826,178 2.51 16 Mr. Imran Khan Director 20,588,337 20,588,337 2.00

17 Prof. Ainun Nishat Independent Director - - -

18 Mr. Manzur Murshed Independent Director 29,277 29,277 0.003

19 Prof. Dr. Mohammed Aslam Bhuiyan Independent Director - - -

20 Mr. Ahmed Kamal Khan Chowdhury Managing Director - - -

362,913,491 383,673,741

Directors of the Bank complies with the requirements at SEC notification no-SEC/CMRRCD/2009-193/119/Admin/34 dated 21/11/2011 regarding holding of shares which states that “each Director other than Independent Directors of any listed company shall hold minimum 2% (Two percent) share of the Paid-up Capital otherwise there shall be a casual vacancy of Directors”.

344




15.8 Share premium11,552,734 ordinary shares of Taka 200 each per share 2,310,546,800 2,310,546,800 Less: Income tax deduction at source @ 3% on total premium 69,316,404 69,316,404

2,241,230,396 2,241,230,396 15.9 Minority interest

Share capital 60 60 Retained earnings 0.28 5

60 65 16 Statutory reserve

Balance on 1 January 7,528,626,614 6,839,527,566 Addition during the year ( 20% of pre-tax profit) 656,019,965 689,099,048 Balance at 31 December 2014 8,184,646,579 7,528,626,614

17 Consolidated revaluation gain / loss on investments Prime Bank Limited (note-17a) 441,469,626 109,193,803 Gain on revaluation of Investment at Prime Exchange Co. Pte. Ltd., Singapore 3,727,540 4,320,315 Gain on revaluation of Investment at Prime Exchange (UK) Ltd. 4,104,926 7,686,176 Gain on revaluation of Investment at PBL Finance (Hong Kong) Limited 12,492,708 14,471,068

461,794,800 135,671,362

17(a) Revaluation gain / loss on investments of the BankOpening balance on 1 January 109,193,803 19,719,692 Add: Amortized/Revaluation Gain 622,833,216 318,478,771 Less: Adjustment of amortization/revaluation gain against sale/maturity (290,552,049) (229,101,567)Add: Adjustment of revaluation gain/(loss) of OBU fixed assets (5,346) 96,907 Less: Adjustment of Revaluation loss - -

441,469,626 109,193,803

18 Revaluation reserveBalance on 1 January 1,778,219,183 296,004,196 Addition during the year - 1,482,214,987 Balance at 31 December 2014 1,778,219,183 1,778,219,183 Less: Provision for deferred tax (274,700,627) (266,732,877)

1,503,518,556 1,511,486,306 The Bank revalued the assets of Land and Buildings details described in note 2.5

19 Consolidated foreign currency translation gain/ (loss)

Prime Bank Limited (note-19a) 5,086,036 4,513,294 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore (302,730) (187,889)PBL Exchange (UK) Ltd. 54,804 17,248 PBL Finance (Hong Kong) Limited 54,790 (695,960)

4,892,900 3,646,693

19a Foreign currency translation gain/ (loss)

Balance on 1 January 4,513,294 5,015,711 Addition during the year 572,743 (502,417)Balance at 31 December 2014 5,086,036 4,513,294

345



20 Consolidated retained earnings / movement of profit and loss accountPrime Bank Limited (note-20a) 1,791,847,369 1,340,578,118 Prime Bank Investment Limited 14,117,109 226,502,745 Prime Bank Securities Limited 17,484,332 49,055,787 Prime Exchange Co. Pte. Ltd., Singapore 40,234,150 35,121,487 PBL Exchange (UK) Ltd. (48,578,004) (49,495,332)PBL Finance (Hong Kong) Limited 105,232,830 98,272,587

1,920,337,787 1,700,035,392 Less: Minority Interest (0.28) (5)Less: Transfer to statutory reserve - (28,002,888)Less: Dividend of Prime Bank Investment Limited - - Less: Profit Remitted by Prime Exchange Co. Pte. Ltd., Singapore (5,904,302) (9,270,867)Less: Profit Remitted by PBL Finance (Hong Kong) Limited (50,020,059) (47,761,808)Less: Foreign currency translation gains (379,607) 1,369,018

1,864,033,818 1,616,368,842

20a Retained earnings / movement of profit and loss account of the BankBalance on 1 January 1,341,080,535 2,072,227,283 Addition during the year 2,392,899,827 1,829,495,239 Transfer to statutory reserve (656,019,965) (689,099,048)Cash dividend (1,286,685,770) (935,771,469)Issue of bonus shares - (935,771,470)Balance at 31 December 2014 1,791,274,627 1,341,080,535 Add: Foreign currency translation gain/ (loss) 572,743 (502,417)

1,791,847,369 1,340,578,118 20.1 Consolidated retained earnings brought forward from previous year

Prime Bank Limited (note-20.1 a) 54,394,765 200,684,345 Prime Bank Investment Ltd. 198,499,857 86,488,306 Prime Bank Securities Ltd. 49,055,787 33,096,718 Prime Exchange Co. Pte. Ltd., Singapore 19,946,318 21,375,947 PBL Exchange (UK) Ltd. (49,495,332) (45,540,613)PBL Finance (Hong Kong) Limited 490,720 -

272,892,115 296,104,702 Foreign currency translation gain on 1 January 1,624,702 (943,855)

274,516,818 295,160,847 20.1.a Retained earnings brought forward from previous year of the Bank

Balance on 1 January 1,341,080,535 2,072,227,283 Bonus shares issued - (935,771,470)Cash dividend paid (1,286,685,770) (935,771,469)Balance at 31 December 2014 54,394,765 200,684,344 Foreign currency translation gain on 1 January - -

54,394,765 200,684,344

21 Consolidated contingent liabilities (restated)

21.1 Acceptances and endorsementsPrime Bank Limited (note-21a.1) 26,742,389,739 30,869,304,940 Prime Bank Investment Limited - - Prime Bank Securities Limited - - Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

26,742,389,739 30,869,304,940

346




21.2 Letters of guarantee







61,408,149,593 55,438,139,259

21.3 Irrevocable Letters of Credit







20,698,448,178 20,885,957,458

21.4 Bills for collection







9,262,180,366 9,221,494,133

118,111,167,875 116,414,895,789

21a Contingent liabilities of the Bank (restated)

21a.1 Acceptances and endorsements

Back to back bills (Foreign) 21,774,217,291 23,256,635,325

Back to back bills (Local) 4,509,657,895 7,032,011,863

Back to back bills (EPZ) 458,514,552 580,657,752

26,742,389,739 30,869,304,940

Less: Margin (5,539,717,082) (5,855,120,347)

21,202,672,657 25,014,184,593

21a.2 Letters of guarantee

Letters of guarantee (Local) 19,812,783,078 20,458,081,297

Letters of guarantee (Foreign) 41,595,366,515 34,980,057,962

Foreign counter guarantees - -

61,408,149,593 55,438,139,259

Less: Margin (1,207,823,431) (1,161,150,850)

60,200,326,162 54,276,988,409

347



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

Directors or officers - -

Government 20,344,060 413,930,380

Banks and other financial institutions 1,909,382,141 16,877,442,202

Others 59,478,423,392 38,146,766,677

61,408,149,593 55,438,139,259

Less: Margin (1,207,823,431) (1,161,150,850)

60,200,326,162 54,276,988,409

21a.3 Irrevocable Letters of Credit

Letters of credit (Sight) 5,037,481,634 6,042,369,612

Letters of credit (Deferred) 10,264,457,760 7,067,578,263

Back to back L/C 5,396,508,785 7,776,009,583

20,698,448,178 20,885,957,458

Less: Margin (1,351,138,286) (1,526,926,409)

19,347,309,892 19,359,031,049

21a.4 Bills for collection

Outward bills for collection 9,262,180,366 9,221,494,133

9,262,180,366 9,221,494,133

Less: Margin (79,490,309) (116,518,903)

9,182,690,056 9,104,975,230

348




22 Income statement

Income:

Interest, discount and similar income (note-22.1) 24,560,584,428 27,503,478,449

Dividend income (note-25a) 79,659,231 89,885,351

Fees, commission and brokerage (note-22.2) 1,156,719,912 1,225,042,868

Gains less losses arising from dealing in securities - -

Gains less losses arising from investment securities - -

Gains less losses arising from dealing in foreign currencies (note-26a.1) 876,405,326 930,442,297

Income from non-banking assets - -

Other operating income (note-27a) 806,468,141 812,592,003

Profit less losses on interest rate changes - -

27,479,837,038 30,561,440,968

Expenses:

Interest / profit paid on deposits, borrowings, etc. (note-24a) 15,573,523,588 17,678,359,259

Losses on loans, advances and lease/ investments - -

Administrative expenses (note-22.3) 4,302,204,792 3,954,616,434

Other operating expenses (note-38a) 1,114,305,707 1,155,846,289

Depreciation on banking assets (note-37a) 333,115,035 298,461,545

21,323,149,122 23,087,283,527

6,156,687,916 7,474,157,441

22.1 Interest, discount and similar income

Interest income / Profit on investments (note-23a) 18,445,885,369 22,010,657,745

Interest income on treasury bills / reverse repo / bonds (note-25a) 4,998,194,457 4,650,707,200

Gain on Discounted bond / bills (note-25a) 1,029,558,633 672,169,796

Gain on sale of shares (note-25a) 17,605,179 2,640,608

Gain on Govt. security trading (note-25a) 255,904,955 152,252,408

Interest on debentures (note-25a) 56,714,976 96,608,268

24,803,863,571 27,585,036,025

Less: Loss on revaluation of security trading (note-25a) 243,279,143 81,557,576

24,560,584,428 27,503,478,449

22.2 Fees, commission and brokerage

Commission (note-26a) 1,156,719,912 1,225,042,868 Settlement fee-PBIL (note-26a) - -

1,156,719,912 1,225,042,868

22.3 Administrative expenses

Salary and allowances (note-28a) 3,279,735,275 2,939,016,912

Rent, taxes, insurance, electricity, etc. (note-29a) 582,596,952 550,258,309

Legal expenses (note-30a) 35,854,242 37,756,195

Postage, stamp, telecommunication, etc. (note-31a) 112,446,490 134,001,255

Stationery, printing, advertisement, etc. (note-32a) 210,809,010 227,285,212

Managing Director's salary and fees (note-33) 8,674,785 11,590,000

Directors' fees (note-34a) 3,799,929 4,364,816

Auditors' fees (note-35a) 1,150,000 690,000

Repair of Bank's assets (note-37a) 67,138,108 49,653,735

4,302,204,792 3,954,616,434

349



23 Consolidated interest income / profit on investment

Prime Bank Limited (note-23a) 18,445,885,369 22,010,657,745 Prime Bank Investment Limited 391,826,475 455,964,116 Prime Bank Securities Limited 11,667,012 67,578,007 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 84,434,808 81,448,997


18,467,920,602 22,035,603,937

23a Interest income / profit on investment of the BankLoans (General) / Musharaka 3,541,296,853 4,204,486,951 Loans against imported merchandise / Murabaha 8,800,379 12,223,477 Loans against trust receipts 1,160,197,662 1,924,614,565 Packing credit 52,004,730 55,195,298 House building loan 534,957,359 586,329,448 Lease finance / Izara 719,886,856 1,033,922,835 Hire purchase 901,394,752 1,138,828,562 Payment against documents 20,866,736 72,769,763 Cash credit / Bai-Muajjal 2,510,348,691 2,929,270,357 Secured overdraft 3,637,595,881 4,778,544,332 Consumer credit scheme 2,025,943,938 1,915,282,906 Staff loan 121,324,259 128,528,443 Small and Medium Enterprise (SME) 773,839,769 734,951,041 Agricultural Loan 159,705,030 153,033,197 Forced loan 44,346,278 169,788,729 Documentary bills purchased 462,666,395 751,465,294 Interest income from credit card 238,602,584 210,085,335 Other loans and advances / Investments 1,281,442,730 976,034,520 Total interest / profit on loans and advances / investments 18,195,220,882 21,775,355,053 Interest / profit on balance with other banks and financial institutions 1,892,083 899,852 Interest on call loans 83,109,736 91,891,431 Interest / profit received from foreign banks 165,662,668 142,511,409

18,445,885,369 22,010,657,745

24 Consolidated interest / profit paid on deposits, borrowings, etc.Prime Bank Limited (note-24a) 15,573,523,588 17,678,359,259 Prime Bank Investment Limited 452,709,342 568,950,077 Prime Bank Securities Limited 46,302,622 48,064,346 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 25,717,753 29,034,365


15,629,158,843 17,738,761,514

350


24a Interest / profit paid on deposits, borrowings, etc. of the Bank

i. Interest / profit paid on deposits:

Savings bank / Mudaraba savings deposits 920,693,312 831,075,984

Special notice deposits 769,330,607 945,532,299

Term deposits / Mudaraba term deposits 8,237,080,877 10,253,581,970

Deposits under scheme 4,992,418,311 4,824,217,055

Foreign currency deposits (note-24a.1) 15,409,740 9,127,196

Others 37,002,013 26,942,930

14,971,934,861 16,890,477,434

ii. Interest / Profit paid for borrowings:

Call deposits 37,265,181 240,430,291

Repurchase agreement (repo) 32,348,366 116,560,703

Bangladesh Bank-refinance 7,495,873 5,820,034

Local bank accounts 127,279,499 114,608,821

Foreign bank accounts 109,699,808 19,748,881

PBL bond 287,500,000 290,713,095

601,588,727 787,881,825

15,573,523,588 17,678,359,259

24a.1 Foreign currency deposits

Interest / profit paid on F.C 11,816,544 4,781,773

Interest / profit paid on N.F.C.D 3,593,196 4,317,525

Interest / profit paid on R. F.C.D - 27,898

15,409,740 9,127,196

25 Consolidated investment income







6,258,530,291 5,863,198,678

Less: Inter-company transactions - -

6,258,530,291 5,863,198,678

25a Investment income of the bank

Interest on treasury bills / Reverse repo / bonds 4,998,194,457 4,650,707,200 Interest on debentures / bonds 56,714,976 96,608,268 Gain on discounted bond / bills 1,029,558,633 672,169,796 Gain on sale of shares 17,605,179 2,640,608 Gain on Govt. security trading 255,904,955 152,252,408 Dividend on shares 79,659,231 89,885,351

6,437,637,432 5,664,263,631 Less: Loss on revaluation of security trading 243,279,143 81,557,576

6,194,358,289 5,582,706,055



351



26 Consolidated commission, exchange and brokerage

Prime Bank Limited (note-26a) 2,033,125,238 2,155,485,165 Prime Bank Investment Limited 53,751,361 45,483,899 Prime Bank Securities Limited 30,121,613 31,572,380 Prime Exchange Co. Pte. Ltd., Singapore 72,320,132 57,171,845 PBL Exchange (UK) Ltd. 44,636,299 42,544,848 PBL Finance (Hong Kong) Limited - -

2,233,954,643 2,332,258,137

26a Commission, exchange and brokerage of the Bank

Commission on L/Cs 237,368,368 258,410,469 Commission on L/Cs-back to back 407,349,243 489,047,307 Commission on L/Gs 377,763,760 363,327,092 Commission on remittance 74,493,576 75,011,914 Commission for services rendered to issue of shares - 51,059 Merchant Commission 1,501,206 3,571,842 Underwriting Commission regarding Treasury bill/ Bond 46,569,530 21,710,905 Commission from sale of BSP /PSP 11,674,229 13,912,280

1,156,719,912 1,225,042,868 Exchange gain (note - 26a.1) - including gain from FC dealings 876,405,326 930,442,297 Settlement fees / Brokerage - -

2,033,125,238 2,155,485,165

26a.1 Exchange gain

Exchange gain 876,433,792 930,532,464 Exchange gain-credit card - - Less: Exchange loss (28,466) (90,167)

876,405,326 930,442,297

27 Consolidated other operating income

Prime Bank Limited (note-27a) 806,468,141 812,592,003 Prime Bank Investment Limited 23,193,276 26,901,295 Prime Bank Securities Limited 971,313 569,922 Prime Exchange Co. Pte. Ltd., Singapore 979,239 1,027,803 PBL Exchange (UK) Ltd. - -PBL Finance (Hong Kong) Limited 54,459,314 45,312,857

886,071,283 886,403,880 Less: Inter-company transactions (restated) 3,201,399 5,601,605

882,869,884 880,802,275

27a Other operating income of the Bank

Rent recovered 8,323,697 7,618,374 Service and other charges 72,669,789 21,555,536 Retail Income 212,931,338 221,870,549 Income from ATM service 112,559,700 115,967,133 Credit card income (note-27a.2) 45,111,771 38,914,256 Postage / telex / SWIFT/ fax recoveries 172,324,387 160,888,059 Incidental charges 100 86 Rebate from foreign Bank outside Bangladesh 77,611,186 102,710,778 Profit on sale of fixed assets 1,363 2,014,878 Miscellaneous earnings (note-27a.1) 104,934,811 141,052,354

806,468,141 812,592,003

27a.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank, notice fee and sale proceeds of various items, etc.

352




27a.2 Credit card income

Annual fees 22,082,937 19,826,512

Inter-change fees 21,791,785 18,868,098

Others 1,237,049 219,646

45,111,771 38,914,256

28 Consolidated salaries and allowances

Prime Bank Limited (note-28a) 3,279,735,275 2,939,016,912 Prime Bank Investment Limited 28,775,522 31,576,176 Prime Bank Securities Limited 12,735,339 14,696,693 Prime Exchange Co. Pte. Ltd., Singapore 21,618,106 21,604,663 PBL Exchange (UK) Ltd. 21,652,530 19,979,329 PBL Finance (Hong Kong) Limited 29,855,172 23,426,518

3,394,371,944 3,050,300,291

28a Salaries and allowances of the Bank

Basic pay 1,356,779,270 1,218,404,871

Allowances 958,027,048 893,857,770

Bonus 455,631,477 379,634,025

Bank's contribution to provident fund 123,886,019 113,361,176

Retirement benefits 4,258,494 1,961,610

Gratuity 381,152,966 331,797,460

3,279,735,275 2,939,016,912

29 Consolidated rent, taxes, insurance, electricity, etc.

Prime Bank Limited (note-29a) 582,596,952 550,258,309




PBL Exchange (UK) Ltd. 11,729,050 13,509,608


627,590,438 595,222,912

29a Rent, taxes, insurance, electricity, etc. of the Bank

Rent, rates and taxes 319,980,722 284,692,653 Lease rent 88,281 4,550,878 Insurance 143,111,343 156,419,900 Power and electricity 119,416,606 104,594,878

582,596,952 550,258,309

30 Consolidated legal expenses


Prime Bank Investment Limited 238,050 125,525


Prime Exchange Co. Pte. Ltd., Singapore 1,327,337 969,617


PBL Finance (Hong Kong) Limited 132,035 367,568

39,566,713 40,451,700

353



30a Legal expenses of the Bank

Legal expenses 16,529,650 17,272,917

Other professional charges 19,324,592 20,483,278

35,854,242 37,756,195

31 Consolidated postage, stamp, telecommunication, etc.


Prime Bank Investment Limited 995,916 1,512,472

Prime Bank Securities Limited 409,428 1,080,521


PBL Exchange (UK) Ltd. 1,021,368 978,437


120,248,747 141,707,735

31a Postage, stamp, telecommunication, etc. of the Bank

Postage & Courier 15,590,175 15,922,767 Telegram, telex, fax and internet 44,983,403 49,144,504 Data communication 24,748,451 45,727,139 Telephone - office 26,149,647 22,117,929 Telephone - residence 974,814 1,088,916

112,446,490 134,001,255

32 Consolidated stationery, printing and advertisements, etc.


Prime Bank Investment Limited 1,308,710 932,710




PBL Finance (Hong Kong) Limited 313,893 242,569

216,460,016 231,679,549

32a Stationery, printing and advertisements, etc. of the Bank

Office and security stationery 69,559,376 73,816,577

Computer consumable stationery 53,785,419 71,334,861

Publicity and advertisement * 87,464,216 82,133,774

210,809,010 227,285,212

* Previously, sponsorship expenses was included under the head of "Publicity and advertisement". Now the same is presented under the head of "Other expenses" (note-38a)

33 Managing Director's salary and fees

Basic salary 4,481,323 5,940,000

Bonus 1,495,000 1,990,000

House rent allowance 989,398 1,320,000

Utility allowance 457,686 624,000

House maintenance allowance 700,559 960,000

Others 550,819 756,000

8,674,785 11,590,000

354



34 Consolidated Directors' feesPrime Bank Limited (note-34a) 3,799,929 4,364,816 Prime Bank Investment Limited 239,250 59,450 Prime Bank Securities Limited 43,700 18,975 Prime Exchange Co. Pte. Ltd., Singapore - - PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited - -

4,082,879 4,443,241

34a Directors' fees of the BankMeeting fees 1,875,000 2,255,000 Other benefits 1,924,929 2,109,816

3,799,929 4,364,816 Each Director is paid Tk.5,000/- per meeting per attendance.

35 Consolidated Auditors' feesPrime Bank Limited (note-35a) 1,150,000 690,000 Prime Bank Investment Limited 115,000 115,000 Prime Bank Securities Limited 69,000 69,000 Prime Exchange Co. Pte. Ltd., Singapore 271,210 252,982 PBL Exchange (UK) Ltd. 311,241 321,474 PBL Finance (Hong Kong) Limited 180,664 182,971

2,097,114 1,631,427

35a Auditors' fees of the BankExternal Audit fee 1,150,000 690,000

1,150,000 690,000

36 Charges on loan losses Loan -written off - - Interest waived - -

- -

37 Consolidated depreciation and repair of Bank's assets

Prime Bank Limited (note-37a) 400,253,143 348,115,280 Prime Bank Investment Limited 6,428,119 6,263,540 Prime Bank Securities Limited 2,654,663 2,618,427 Prime Exchange Co. Pte. Ltd., Singapore 3,602,317 4,298,544 PBL Exchange (UK) Ltd. 2,292,974 2,915,251 PBL Finance (Hong Kong) Limited 1,979,371 1,061,191

417,210,587 365,272,233

37a Depreciation and repair of Bank's assetsDepreciation - (see annexure-C for detail)

Fixed assets 291,131,795 249,858,500 Leased assets 3,793,227 5,073,230

294,925,021 254,931,730 Amortization -(see annexure-C for detail)Software-core banking 34,433,167 38,847,401 Software-ATM 3,756,847 4,682,414

38,190,014 43,529,815 RepairsBuilding 4,523,282 3,021,075 Furniture and fixtures 10,882,447 3,918,573 Office equipment 32,717,379 29,483,968 Bank's vehicles 9,357,054 7,921,793 Maintenance 9,657,946 5,308,326

67,138,108 49,653,735 400,253,143 348,115,280


355



38 Consolidated other expenses



Prime Bank Securities Limited* 5,863,524 7,410,881




1,156,252,723 1,198,735,007

*Previously, interest expenses was included under the head of "Consolidated other expenses". Now it is presented under the head of "Consolidated interest expenses" (note-24).

38a Other expenses of the Bank

Security and cleaning 162,915,686 165,790,496

Entertainment 40,994,187 47,687,861

Car expenses 165,854,269 148,941,549

ATM expenses 155,814,918 150,585,538

Retail expenses 87,845,530 64,324,900

Books, magazines and newspapers, etc. 1,772,786 1,750,362

Liveries and uniforms 821,726 664,020

Medical expenses 137,934 165,729

Bank charges and commission paid 4,834,775 8,006,432

Loss on sale of fixed assets 281,382 143,122

Finance charge for lease assets 97,507 1,767,809

House furnishing expenses 2,476,934 2,627,195

Subscription to institutions 10,068,894 9,201,312

Donations 39,140,323 33,425,556

Sponsorship 69,593,888 164,961,164

Traveling expenses 31,403,376 26,147,659

Expenses for merchant banking 5,112 3,319,093

Local conveyance, labor, etc. 17,595,136 22,873,227

Business development 36,135,564 19,909,911

Training and internship 21,257,378 14,657,059

Remittance charges 9,457,108 9,398,083

Cash reward to branches 2,235,000 1,155,000

Laundry, cleaning and photographs, etc. 5,786,304 6,423,219

Credit card expenses 38,057,189 32,238,509

Consolidated salary (staff) 26,808,753 35,276,010

Annual General Meeting 2,423,555 713,905

Exgratia 15,805,148 13,511,843

Welfare fund 6,560,200 6,891,000

Prime Bank Foundation 131,203,993 137,820,000

Miscellaneous expenses 26,921,153 25,468,725

1,114,305,707 1,155,846,289

356




39 Consolidated provision for loans, investments, off balance sheet exposure & other assets

Provision for bad and doubtful loans and advances / investments-PBL (note-39a) 2,643,500,000 2,980,000,000 Provision for unclassified loans and advances / investments-PBL (note-39a) 114,000,000 642,000,000 Provision for bad and doubtful loans and advances (OBU) (note-39a) 30,000,000 350,000,000 Provision for unclassified loans and advances / investments (OBU) (note-39a) 46,000,000 12,000,000 Provision for off-balance sheet exposure-PBL (note-39a) (1,510,000) 10,000,000 Provision for diminution in value of investments-PBL (note-39a) (7,000,000) 24,527,202 Provision for diminution in value of investments-PBIL (49,637,089) - Provision for impairment of client margin loan-PBIL 245,135,052 - Provision for diminution in value of investments-PBSL (428,503) (51,962)Provision for impairment of client margin loan-PBSL 3,675,143 1,354,126 Provision for impairement loss for investment in subsidiaries (note-39a) 45,398,089 - Provision for other assets (note-39a) 6,200,000 10,135,000

3,075,332,692 4,029,964,366

As per the Press release # BSEC/Mukhopatro/2011/1733 dated 31 December 2014 of Bangladesh Securities and Exchange Commission, 20% provision has been made by Prime Bank Securities Limited while Prime Bank Investment Limited made 50.00% provision on diminution in value of investments and 42.18% provision made on impairment of client margin loan.

39a Provision for loans, investments, off balance sheet exposure & other assets of the Bank

Provision for bad and doubtful loans and advances / investments 2,643,500,000 2,980,000,000

Provision for unclassified loans and advances / investments 114,000,000 642,000,000

Provision for bad and doubtful loans and advances (OBU) 30,000,000 350,000,000

Provision for unclassified loans and advances / investments (OBU) 46,000,000 12,000,000

Provision for off-balance sheet exposure (1,510,000) 10,000,000


Provision for impairement loss for investment in subsidiaries 45,398,089 -

Provision for other assets 6,200,000 10,135,000

2,876,588,089 4,028,662,202

40 Consolidated tax expenses

Current tax



Prime Bank Securities Limited 490,088 9,337,871

Prime Exchange Co. Pte. Ltd., Singapore 1,044,414 344,056



1,200,938,014 1,664,898,350

Deferred tax

Prime Bank Limited (note-40a) (292,800,000) -

Prime Bank Investment Limited (857,621) (690,162)

Prime Bank Securities Limited (391,254) (415,071)

Prime Exchange Co. Pte. Ltd., Singapore (198,166) -



(294,247,041) (1,105,233)906,690,973 1,663,793,117

357



40a Tax expenses of the Bank

Current tax 1,180,000,000 1,616,000,000 Deferred tax (292,800,000) -

887,200,000 1,616,000,000

41 Consolidated receipts from other operating activities

Prime Bank Limited (note-41a) 1,866,257,765 1,558,097,238 Prime Bank Investment Limited 84,721,407 303,094,919 Prime Bank Securities Limited 3,615,184 4,868,921 Prime Exchange Co. Pte. Ltd., Singapore 979,239 1,027,803 PBL Exchange (UK) Ltd. - - PBL Finance (Hong Kong) Limited 54,459,314 45,312,857

2,010,032,909 1,912,401,737

41a Receipts from other operating activities of the Bank

Rent recovered 8,323,697 7,618,374 Service and other charges 72,669,789 21,555,536 Credit card income 45,111,771 38,914,255 Retail Income 212,931,338 221,870,549 Income from ATM services 112,559,700 115,967,133 Postage / Telex / Fax / SWIFT charge recoveries 172,324,387 160,888,059 Incidental charges 100 86 Rebate from foreign Bank outside Bangladesh 77,611,186 102,710,778 Gain from sale of treasury bond / shares 1,059,789,624 745,505,236 Miscellaneous earnings 104,936,174 143,067,232

1,866,257,765 1,558,097,238

42 Consolidated payments for other operating activitiesPrime Bank Limited (note-42a) 1,482,600,260 1,429,170,216 Prime Bank Investment Limited 21,815,910 29,210,370 Prime Bank Securities Limited 57,539,985 60,291,380 Prime Exchange Co. Pte. Ltd., Singapore 28,571,653 24,322,701 PBL Exchange (UK) Ltd. 21,117,569 23,792,906 PBL Finance (Hong Kong) Limited 10,758,340 11,764,953

1,622,403,717 1,578,552,527

42a Payments for other operating activities of the Bank

Rent, rates and taxes 582,596,952 550,258,310 Legal expenses 35,854,242 37,756,196 Postage and communication charges, etc. 112,446,490 134,001,254 Directors' fees 3,799,929 4,364,816 Other expenses 747,902,647 702,789,641

1,482,600,260 1,429,170,216

43 (Increase) / decrease of consolidated other assets

Prime Bank Limited (note-43a) (4,074,433,703) (8,849,257,530)Inter-company capital - 5,680,537 Prime Bank Investment Limited 193,704,428 (175,046,740)Prime Bank Securities Limited (6,814,745) (16,512,699)Prime Exchange Co. Pte. Ltd., Singapore (19,755) 1,139,897 PBL Exchange (UK) Ltd. - 1,936,520 PBL Finance (Hong Kong) Limited (132,418,404) 1,194,169,831

(4,019,982,179) (7,837,890,184)

358



43a (Increase)/ decrease of other assets of the Bank

T & T bonds 53,430,295,197 49,331,968,698 Stationery and stamps 24,722,480 23,087,731 Advance deposits and advance rent 274,085,598 164,348,546 Branch adjustment account 18,533,017 23,675,936 Suspense account 384,161,142 204,781,970 Encashment of PSP / BSP 136,623,524 35,151,558 Credit card 115,268,108 92,196,123 Sundry assets 7,567,549,637 8,001,594,436

61,951,238,701 57,876,804,999 (4,074,433,703) (8,849,257,530)

44 Increase / (decrease) of consolidated other liabilities

Prime Bank Limited (note-44a) 2,338,428,624 729,880,009 Prime Bank Investment Limited 66,278,159 (251,293,689)Prime Bank Securities Limited (129,033,153) 150,305,281 Prime Exchange Co. Pte. Ltd., Singapore 3,434,146 12,096,811 PBL Exchange (UK) Ltd. (9,013,371) 12,596,912 PBL Finance (Hong Kong) Limited 6,161,015 1,945,895

2,276,255,420 655,531,219

44a Increase / (decrease) of other liabilities of the Bank

F.C. held against EDF L/C 3,560,736,089 2,019,648,273 Exchange equalization fund - - Expenditure and other payables 114,717,427 78,636,660 Provision for bonus 1,697,211 18,307,180 Unearned commission on bank guarantee 90,117,676 120,567,836 Other provision - 795,721 Interest suspense account 2,722,214,058 1,913,098,167

6,489,482,461 4,151,053,837 2,338,428,624 729,880,009

45 Consolidated earnings per share (CEPS)

Net profit after tax (Numerator) 2,245,536,966 2,038,309,936 Number of Ordinary shares outstanding (Denominator) 1,029,348,616 1,029,348,616 Consolidated earnings per share (CEPS) 2.18 1.98

Earnings per share has been calculated in accordance with BAS - 33: "Earnings Per Share (EPS)". Previous year's figures have been adjusted for the issue of bonus shares during the year.

45a Earnings per share (EPS) of the Bank

Net profit after tax (Numerator) 2,392,899,827 1,829,495,239 Number of Ordinary shares outstanding (Denominator) 1,029,348,616 1,029,348,616 Earnings per share (EPS) 2.32 1.78

Earnings per share has been calculated in accordance with BAS - 33: "Earnings Per Share (EPS)". Previous year's figures have been adjusted for the issue of bonus shares during the year.

46 Number of employees of the Bank

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 2,867.

47 Assets pledged as security for liabilities of the Bank

Treasury bills & bonds to Bangladesh Bank for Repo 743,665,000 -


359

48 Disclosure on Audit Committee of the Bank

a) Particulars of Audit Committee

The audit committee of the Board was duly constituted by the Board of Directors of the Bank in accordance with the BRPD Circular no.11 dated October 27,2013 of Bangladesh Bank.

Pursuant to the BSEC notification no. SEC/CMRRCD/2006-158/129/Admin/44 dated August 7, 2012 on Corporate Governance, the current Committee is Constituted with the following 5 (Five) members of the Board and it is also comply with the BRPD Circular No. 11 dated 27.10.2013.

Name Status with bank

Status with committee Educational Qualification

Prof. Ainun Nishat IndependentDirector Chairman

M.Sc. Engineer (Civil), Bangladesh University of Engineering and Technology (BUET), Ph.D. in Civil Engineering from University of Strathclyde, Glasgow, U.K.

Mr. M. A. Khaleque Director Member M. Com. CA (CC) ICAB Khandker Mohammad Khaled Director Member B.Sc. Engineer (Mechanical), Bangladesh University of Engineering

and Technology (BUET).

Mr. Manzur Murshed IndependentDirector Member B.Sc. Engineer (Electrical), University of Dhaka, M.A. (Public

Admin.), American University of Bairut.Prof. Dr. Mohammed Aslam Bhuiyan

IndependentDirector Member B.A. (Hons.), M.A. University of Dhaka, MS in Sociology on Rural

Development, Moscow University, Ph.D. from Bombay University.

b) Meetings held by the Audit Committee during the year by date:

Meeting No Held on 93rd 04.03.201494th 25.03.201495th 20.04.201496th 12.05.201497th 12.07.201498th 12.08.201499th 09.09.2014

100th 28.10.2014101st 25.11.2014

102nd 24.12.2014

c) Review by the Audit Committee and Recommended thereof:

i) Reviewed & approved the Audit Plan-2014 of Internal Audit & Inspection Department including IT Audit.

ii) Reviewed Management Letter issued by Bangladesh Bank & other External Auditors and Management response thereto as part of compliance activities.

iii) Reviewed expressed interest of 17 Audit Firms and upon scrutinizing recommended for appointment.

iv) On the Risk Management issues, the committee directed updating all existing questionnaire/check list in light of the BCA -2013 to ensure mitigation of the risks inherent with the banking business.

v) The committee reviewed statements on ICAP (Internal Capital Adequacy Assessment Process) under SRP (Supervisory Review Process) for the year 2012 & 2013 as per guidelines of Bangladesh Bank and advised maintaining required preparedness for the periodical dialogue/reviews on the subject with the Bangladesh Bank.vi) Conducting inspections of the wholly owned subsidiaries abroad.

vii) Brought Shariah Audit & inspection Report under the scrutiny of the committee to maintain uniformity in the oversight responsibilities as per BCA.

d) Steps taken for implementation of an effective internal control procedure of the Bank :

i) Recommended for opening Islamic Desk at all branches of the bank to respond customer’s popular demand of Shariah based Banking services across the country.

ii) Recommended for IT Test Area & Lab facilities to build up technical expertise through practical exercises.

iii) Directed Management to arrange special training program to acquaint all the employees about the range & use of T-24 System for controlling lapses in banking system T24.

iv) Advised formation of Task force for resolving non compliance issues upon segregation of the audit objections nature & merit-wise and setting time schedule for completion accordingly.


360


49 Related Party Disclosures of the Bank

i) Names of the Directors together with a list of entities in which they have Interest Annexure-E

ii) Significant contracts where Bank is a party and wherein Directors have interest during the year 2014

(Figure in Taka)Name of party Relationship Nature of transaction Amount

- - - Nil

iii) Shares issued to Directors and Executives without consideration or exercisable at a discount Nil

iv) Related party transactions

Nature of party/ contract Relationship AmountBangla Trac Ltd. Common Director 6,011,500 Radiant Alliance Common Director 1,246,819 Prime Insurance Company Ltd Common Director 13,226,395 Lease agreement Common Director 1,628,400 Lease agreement Common Director 280,800 Lease agreement Common Director 642,000 Lease agreement Common Director 10,800,000

v) Lending policies in respect of related party

a. Amount of transaction regarding loans and advances, deposits, guarantees and commitment as on 31.12.2014 Nil

b. Amount of transactions regarding principal items of deposits, expenses and commission Nil

c. Amount of provision against loans and advances given to related party Nil d. Amount of guarantees and commitments arising from other off-balance sheet

exposures Nil

vi) Disclosure of transaction regarding Directors and their related concerns Nil

vii) Business other than banking business with any relation concern to the Directors as per Section 18(2) of the Bank Companies Act, 1991.

a) Lease agreement made with the Sponsor Director & Independent Director

Nature of contract Branch Name Name of Director and related by Remarks

Lease agreement Jubilee Road Branch

Mr. Md. Nader KhanDirector & owner of the

premises

Lease period: 01.08.2012 to 31.07.2015

Lease agreementATM Booth

Jubilee Road Branch

Mr. Md. Nader Khan Director & owner of the

premisesLease period: 12.10.2011 to 11.10.2021

Lease agreement Kulaura BranchMrs. Marina Yasmin Chowdhury

Director & owner of the premises

Lease period: 01.08.2013 to 31.07.2019

Lease agreement Gulshan Branch Prof. Ainun Nishat(Independent Director)

Prof. Ainun Nishat was not a Director of the Bank when the lease agreement was executed in 2002. However, Mr. Ainun Nishat became a Independent Director on 19 March 2009. He is one of the co-sharer of the lease premises. Lease period: 01.09.2014 to 31.08.2017


361


b) Service receiving companies where the Directors interest subsisted during the year

Name of party Relationship Nature of transaction AmountBangla Trac Ltd Common Director Procurement of Generators 6,011,500

Radiant Alliance Ltd Common Director Procurement of Solar Energy System 1,246,819

Prime Insurance Company Ltd Common Director Insurance Coverage 13,226,395

viii) Investment in the Securities of Directors and their related concern Nil

ix) Business with subsidiary

Name of party Relationship Nature of transaction Outstanding Amount

Prime Bank Investment Limited Subsidiary Company OD Facilities 2,973,583,847 Prime Bank Securities Limited Subsidiary Company OD Facilities 371,066,787 Prime Bank Securities Limited Subsidiary Company Bank Guarantee 500,000,000 Prime Bank Securities Limited Subsidiary Company Share Trading 299,596,650 PBL Finance (Hong Kong) Ltd Subsidiary Company Term Placement 2,191,547,381

50 Workers Participation Fund and Welfare Fund

SRO-336-AIN/2010 dated 5-10-2010 issued by the ‘Ministry of Labor and Employment’ and published in Bangladesh gazettee on 7-10-2010 declares the status of business of certain institutions and companies like mobile operating companies, mobile network service providing company, all Govt. and Non-govt. money lending companies, all insurance companies etc. as “Industrial Undertakings” for the purposes of Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) which deals with the workers’ participation in company’s profit by way of ‘Workers Participation Fund’ and ‘Welfare Fund’. The Bangladesh Labour Act, 2006 (as amended up to 2013) requires the “Industrial Undertakings” to maintain provision for workers’ profit participation fund @ 5% on net profit. Since this requirement contradicts with the Section 11 of the ‘Bank Companies Act 1991 (as amended up to 2013)’, we wrote a letter to the ‘Association of Bankers Bangladesh Limited (ABB)’ seeking advice on the same. Subsequently, ABB has provided us with a legal opinion on this matter wherein it is said that the provisions of the two statutes shall be subject to challenge and shall vitiate the purpose of such legislation. Therefore, no provision in this regard has been made in the Financial Statements during the year under audit.

51 Events after the Reporting Period

i) Bangladesh Bank vide their letter ref no. BRPD (BFIS)/661/14B(P)/2014-8043 and BRPD (BFIS) 661/14B (P)/2015-1177 dated December 18,2014 and February 10, 2015 respectively approved issuance of BDT 2,500,000,000/- as Sub-Ordinated bond by Prime Bank Limited for inclusion as Tier II capital to increase Capital Adequacy requirement. If the deal was closed/completed by 31 Dec. 2014, Capital adequacy of the Bank could have been reached up to 13.83% (consolidated) and 13.87% (solo).

ii) The Board of Directors in its 430th meeting decided to recommend payment of 15% (fifteen percent) cash dividend for the year 2014. The total amount of dividend is Tk. 1,544,022,924 (One hundred fifty four crore forty lac twenty two thousand nine hundred twenty four) only.


362


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sa S

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54

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7

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06.

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n C

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k, N

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ork

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chan

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ank

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lC

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Mas

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k PS

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ew Y

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209,

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iona

l Com

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cial

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k, Je

ddah

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nce

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oth

er b

anks

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side

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glad

esh

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tro

Acc

ount

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e Ba

nk L

imite

d as

at

31 D

ecem

ber 2

014

Ann

exur

e-A

Con

tinue

d

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e of

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Bank

Acc

ount

type

2014

2013

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y FC

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hang

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hang

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peam

ount

rate

T

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te

Tak

a Pe

ople

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nk, C

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ri La

nka

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argo

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k N

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T

otal

1,

253,

809,

238

626

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364


1) Balance with Bangladesh Bank-Taka account of the Bank

Detail Total

Balance as per Bank ledger 13,528,018,067

Unresponded debit entries in

Bangladesh Bank statement 22,168,897

Prime Bank's ledger 1,412,956 23,581,852

13,504,436,215

Unresponded credit entries in



Balance as per Bangladesh Bank statement 13,510,092,503

2) Balance with Bangladesh Bank-Foreign currency of the Bank

Balance as per Bank ledger 1,284,357,478

Unresponded debit entries in



1,165,654,495

Unresponded credit entries in



Balance as per Bangladesh Bank statement 2,154,142,299

Reconciliation statement of Balance with Bangladesh Bankas at 31st December 2014

Annexure-A-1

365

SL. No. Name of the Company Face

Value No of sharesCost / present

value of holdings

Average cost

Quoted rate per share as on 31.12.14

Total market value as at

31.12.14Quoted:

1 AB Bank Ltd. 10 1,487,500 47,632,736 32.02 29.90 44,476,250

2 Bank Asia Ltd. 10 1,210,000 24,429,908 20.19 16.70 20,207,000

3 The City Bank Ltd. 10 1,320,000 29,538,943 22.38 21.80 28,776,000

4 DESCO 10 319,000 19,569,239 61.35 69.50 22,170,500

5 Dhaka Bank Ltd. 10 1,218,000 28,551,258 23.44 18.30 22,289,400

6 Eastern Bank Ltd. 10 1,000,000 37,410,456 37.41 27.20 27,200,000

7 Federal Insurance Company Bangladesh Ltd. 10 2,784 20,380 7.32 16.80 46,771

8 Jamuna Bank Ltd. 10 1,000,000 18,370,447 18.37 12.30 12,300,000

9 Mutual Trust Bank Ltd. 10 364,000 6,962,625 19.13 19.80 7,207,200

10 National Bank Ltd. 10 1,100,000 27,970,098 25.43 11.40 12,540,000

11 One Bank Ltd. 10 1,012,000 22,130,581 21.87 15.80 15,989,600

12 Uttara Bank Ltd. 10 968,000 37,009,980 38.23 25.90 25,071,200

Sub Total 299,596,650 238,273,921

Unquoted:

1 Central Depository Bangladesh Ltd. 10 4,569,443 15,694,430 3.43 - 15,694,430

2 Investment in SWIFT 4,184,430 - - 4,184,430

3 Market Stabilization Fund 5,000,000 5,000,000

Sub Total 24,878,860 24,878,860

Grand Total 324,475,510 263,152,781

According to the Bangladesh Bank Circular ref. DOS circular no.02 & 07 dated 16 September 2013 and 02 February 2014 respectively. Investment in capital market limit should be within the 25% for Solo and 50% for Consolidation of total prescribed capital component. As on 31 December 2014 Bank has invested in capital market 38.07% on Solo and 35.76% on consolidated.

Investment in shares of the Bankas at 31st December 2014

Annexure-B

366


Sche

dule

of f

ixed

ass

ets

of th

e Ba

nkas

at 3

1 Dec

embe

r 20

14

Ann

exur

e-C

Part

icul

ars

CO

STD

EPRE

CIA

TIO

N N

et b

ook

valu

e as

at 3

1.12.

14

Ope

ning

ba

lanc

e as

on

01.0

1.14

Add

ition

s du

ring

the

year

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posa

ls/

adju

stm

ents

du

ring

the

year

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l bal

ance

as

at 3

1.12.

14

Ope

ning

ba

lanc

e as

on

01.0

1.14

Cha

rge

for t

he

year

Dis

posa

ls/

adju

stm

ents

du

ring

the

year

Tota

l bal

ance

as

at 3

1.12.

14

Taka

Taka

Taka

Taka

Taka

Tak

a Ta

kaTa

ka T

aka

Land

3,

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ce e

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at 3

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war

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are-

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4

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2,61

4 16

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3 3,

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l

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287

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at 3

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3

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at 3

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r 20

13 5

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3 6,

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662

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Stat

emen

t of t

ax p

ositi

on o

f the

Ban

kas

at 3

1 Dec

embe

r 20

14

Ann

exur

e-D

Acc

ount

ing

year

Ass

essm

ent

year

Tax

pro

visi

on a

s pe

r acc

ount

sTa

x as

per

as

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men

t ord

erTa

x pa

idEx

cess

/(s

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ss/

(sho

rtag

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paid

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ent s

tatu

s

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Taka

Taka

Taka

Taka

1995

to 2

00

0

-

41

1,652

411,6

52

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sses

smen

t ye

ar 1

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0 i

s fin

al b

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it to

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plet

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plet

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004

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34

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plet

ed

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plet

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(61,9

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)C

ompl

eted

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20

09-

2010

1

,012

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627,4

71

-

- A

ppea

led

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nst

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e di

sallo

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ces

mad

e by

the

DC

T be

fore

the

App

ella

te T

ribun

al.

200

9 2

010

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1,7

35,0

00,

00

0

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- A

ppea

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nst

som

e di

sallo

wan

ces

mad

e by

the

DC

T be

fore

the

App

ella

te T

ribun

al.

2010

20

11-2

012

2

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,00

0,0

00

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033

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-

-

App

eale

d ag

ains

t so

me

disa

llow

ance

s m

ade

by t

he D

CT

befo

re th

e A

ppel

late

Trib

unal

.

2011

20

12-2

013

2

,866

,50

2,25

5

-

2,

193,

417,7

98

-

(10

2,31

3,14

8)Re

turn

file

d bu

t th

e as

sess

men

t is

yet

to

com

plet

e Ex

cess

pa

ymen

t of

Tk.

10

2,31

3,14

8 in

ear

lier

year

s w

ill b

e ad

just

ed

agai

nst t

he ta

x pr

ovis

ion

of 2

011

.

2012

20

13-2

014

2

,449

,80

0,0

00

-

1,0

00,

00

0,0

00

(259

,877

,589

)

-

Ret

urn

filed

but

the

asse

ssm

ent i

s ye

t to

com

plet

ed.

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20

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015

1

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,00

0,0

00

-

1,3

54,2

21,9

54

-

- R

etur

n fil

ed b

ut th

e as

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men

t is

yet t

o co

mpl

eted

.

2014

20

15-2

016

1

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00

0,0

00

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bmis

sion

of t

ax re

turn

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et n

ot d

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l 1

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198,

449,

090

368


Sl no. Name of Directors Status with PBL Entities where they have interest %

of Interest

1Mr. Azam J Chowdhury(Representative of East Coast Shipping Lines Ltd.)

Chairman

East Coast Shipping Lines Ltd. 25.00 EC Distribution Ltd. 40.00 PFI Securities Limited (Corporate Interest) 5.13 East Coast Trading (Pvt.) Ltd. 20.00 EC Securities Ltd. 89.20 EC Bulk Carriers Ltd. 20.00 MJL Bangladesh Ltd. (Corporate Interest) 52.07 Bangladesh Trade Syndicate Ltd. 65.00 Green Delta Insurance Co. Ltd. 0.83 Omera Fuels Ltd. (Corporate Interest) 75.00 Nordic Woods Ltd. (Corporate Interest) 45.00 ASP Omera Crew Management Ltd. (Corporate Interest) 50.00 Prime Finance & Investment Ltd. (Corporate Interest) 8.94

2 Khandker Mohammad Khaled Vice Chairman

Greenland Engineers & Tractors Company Limited 42.00Machinery & Equipment Trading Company Limited 42.00GETCO Limited 37.50GETCO Trading Limited 51.00GETCO Agro Vision Limited 27.50GETCO Telecommunications Limited 60.00GETCO Online Limited 48.00GETCO Business Solutions Limited 34.00GETCO Agri-Technologies Limited 50.00Khaled Textile Mills Limited 55.00Fareast Stocks & Bonds Limited 10.00Fareast Islami Life Insurance Co. Ltd. 1.01Fareast Finance & Investment Limited 4.90

3 Mr. M. A. Khaleque Vice Chairman

Fareast Finance & Investment Limited 1.77Fareast Stocks & Bonds Limited 7.24Maksons Bangladesh Limited 50.00Maksons Associates Limited 50.00Prime Property Holdings Limited 20.00PFI Properties Limited 10.00Prime Prudential Fund Limited 10.00Prime Financial Securities Limited 20.00GETCO Limited 37.50GETCO Agro Vision Limited 27.50GETCO Fibers Limited 37.50GETCO Power Limited 27.00GETCO Elevator Company Limited 30.00GETCO Agri Technologies 40.00GETCO Online Limited 40.00HRC Technologies Limited 40.00

4 Mr. Md. Nader Khan Director

Pragati Corporation 100.00Pedrollo NK Limited 40.00PNL Water Management Limited 35.00Polyexprint Limited 30.00PNL Holding Limited 20.00Halda Valley Tea Company Limited 15.00Pedrollo Dairy & Horticulture Limited 2.35Polyexlaminate Limited 2.00Polytape Limited 1.43Hill Plantation Ltd. 0.67Cider Education Services Ltd. 19.21Halda Fisheries Ltd. 5.00

Name of Directors and theirinterest in different entities of the Bank

Annexure-E

369

Sl no. Name of Directors Status with PBL Entities where they have interest %

of Interest

5 Mrs. Nasim Anwar Hossain DirectorPrime Cement Ltd. 2.86Lubricants Asia Ltd. 14.00Bengal Tiger Cement Industries Ltd. 2.36

6 Mr. Mafiz Ahmed Bhuiyan DirectorShepherd World Trade Limited 50.00Shepherd Consultant & Management Ltd 15.00Techno Resources Development Ltd 5.00

7 Mr. Imran Khan Director

Prima Enterprise 100.00PNL Holdings Limited 20.00Polyexprint Limited 15.00Halda Valley Tea Co. Limited 15.00PNL Water Management Limited 15.00Pedrollo NK Limited 10.00Pedrollo Dairy & Horticulture Limited 2.35Polyexlaminate Limited 2.00Hill Plantation Ltd. 6.67Halda Fisheries Ltd. 5.00Polytape Limited 1.43

8 Quazi Sirazul Islam Director

Amin Jewelers Limited 50.00City Hospital Limited 30.00Bangla Gold (Pvt.) Limited 15.00Ducaty Apparels Limited 33.00

9Mr. Mizanur Rahman Bhuiyan(Representative of Uniglory Cycle Industries Ltd.)

Director

Meghna Bangladesh Ltd. 75.00Meghna Wheels Ltd. 66.67Meghna Light Industrial Products Limited 80.00Uniglory Packaging Industries Limited 10.00Meghna Automobiles Ltd. 40.00Meghna Innova Rubber Co. Ltd. 70.00Trans-world Bi-cycle Co. Ltd. 64.00Tach-Star Packaging Limited 30.00Executive Motors Ltd. 33.33Uniglory Cycle Components Ltd. 27.00Uniglory Wheels Ltd. 80.00Uniglory Steel Products Ltd. 65.00Uniglory Cycle Industries Limited 50.00Meghna Rubber Industries Limited 93.34Cycle Life Limited 75.00Abrar Steel Industries Limited 40.00Meghna Holdings Limited 10.00Meghna Tyres Limited 25.00Meghna Mainetti Limited 80.00Uniglory Paper & Packaging Limited 7.50Hola Limited 10.00Uniglory Accessories Limited 50.00

10 Mr. Md. Shirajul Islam Mollah Director

China - Bangla Ceramic Industries Ltd. 43.44Bengal Tiger Cement Industries Ltd. 12.00Bajnabo Textiles Mills Ltd. 50.00Trustee Securities Ltd. 22.00United Shipping Lines Ltd. 40.00SR Telecom Ltd 40.00Dhaka-Foshan Mould Company Ltd. 15.00


Annexure-E

370



Annexure-ESl

no. Name of Directors Status with PBL Entities where they have interest %of Interest

11 Mr. Md. Shahadat Hossain Director VIP Shahadat Cold Storage 50.00 VIP Shahadat Poultry & Hatchery 50.00

12 Mrs. Marina Yasmin Chowdhury Director

Parkensine Products Ltd. 40.00East Coast Trading (Pvt.) Ltd. 20.00EC Securities Ltd. 3.60EC Bulk Carriers Ltd. 20.00East Coast Shipping Lines Ltd. 20.00EC Distribution Ltd 40.00

13 Mrs. Nazma Haque Director

Asian Gate Ltd 30.00Acorn Limited 25.00THANE Technology 25.00Anirban Enterprise Ltd. 50.00

14 Mrs. Salma Huq Director

GQ Ball Pen Industries Limited 9.92PP Woven Bag Industry 33.40Mosquito Coil Industry 0.13GQ Foods Limited 26.66GQ Enterprise Limited 68.81

15 Mrs. Muslima Shirin Director Mawsons Limited 19.23

16 Mr. Nafis Sikder Director

Marina Apparels Ltd. 99.00 Nafa Apparels Ltd. 99.00 Ayesha Clothing Co. Ltd. 99.00 Ayesha Washing Limited 99.00 Ayesha Fashion Limited 99.00 Safaa Sweaters Ltd 99.00 Aswad Composite Mills Limited 95.00 Cortz Apparels Limited 99.00 K.M. Apparels (Pvt.) Ltd. 99.00 Hamza Clothing Ltd. 99.00 Hamza Trims Ltd. 99.00 Modern Needlecraft Ltd. 99.00 Palmal Garments Ltd. 43.75 Palmal Garments Hosiery Ltd. 43.75 Palmal Logistics 51.00 Palmal Packaging Ltd. 10.00

17 Mr. Manzur Murshed Independent Director N/A N/A

18 Prof. Ainun Nishat Independent Director N/A N/A

19 Prof. Dr. Mohammed Aslam Bhuiyan

Independent Director N/A N/A

371

Prime Bank Limited is operating 05 (five) Islamic Banking branches based on Islamic Shariah, which absolutely prohibits receipts and payments of interest in any form. The operation of these 05 (five) branches are totally different from other conventional banking branches as they operate on the basis of profit sharing arrangement.

Fixation of final profit rate for the year 2014

Provisional profit are applied to the different types of depositors at the rates to be decided by the Bank from time to time taking into consideration of the industry trend and that of the rates of other Islamic Banks in Bangladesh. Final rates of profit are declared annually as at 31 December in every year on the basis of income earned from different investments and other business by individual branches and distributed as per weightage of the different deposit products.

For the year ended 31 December 2014, 70% of total investment income shall be distributed to the different types of Mudaraba depositors (except no cost fund) according to the weightage. The remaining 30% of the investment income will be retained by the Bank as Management fee (25%) and Investment loss Off-setting Reserve (5%).

Final Profit rate for the year 2014 is given below:

Deposit types Weightage Final rate of profit for the year 2014(%)

Mudaraba Saving Deposits 0.75 5.84

Mudaraba Short Notice Deposits 0.52 4.05

Mudaraba Term Deposits

36 Months 1.00 7.78

24 Months 0.98 7.63

12 Months 0.96 7.47

06 Months 0.92 7.16

03 Months 0.88 6.85

01 Month 0.88 6.85

Mudaraba Education Savings Scheme 1.20 9.34

Mudaraba Monthly Contributory Savings Scheme 1.05 8.17

Mudaraba Monthly Benefit Deposit Scheme 1.02 7.94

Mudaraba Double Benefit Scheme 1.02 7.94

Mudaraba Hajj Savings Scheme 1.20 9.34

Mudaraba Lakhpoti Deposit Scheme 1.05 8.17

Mudaraba Lakhpoti Deposit Scheme >3 1.05 8.17

Mudaraba Millionaire Deposit Scheme 1.05 8.17

Mudaraba House Building Deposit Scheme 1.05 8.17

Mudaraba My First Account 0.75 5.84

Mudaraba Sukonna Deposit 0.75 5.84

Mudaraba Nobagoto Deposit 1.05 8.17

Mudaraba 150% Deposit Scheme 1.01 7.86

Mudaraba Laksma Puran Saving Scheme 1.05 8.17

Mudaraba Brighter Tomorrow 0.96 7.47

Mudaraba Cash Waqf (Fixed) 1.20 9.34

Mudaraba Waqf (Installment) 1.20 9.34

Distribution of profit underIslamic Banking operation

Annexure-F

372


Annexure-G

Prime Bank Limited-Islamic BranchesBalance Sheet as at 31 December 2014


2014 2013

PROPERTY AND ASSETS

Cash in hand 1

Cash in hand (including foreign currencies) 53,954,854 84,027,018


(including foreign currencies) - -

53,954,854 84,027,018

Balance with other banks and financial institutions 2

In Bangladesh 212,804 212,804

Outside Bangladesh - -

212,804 212,804

Placement with banks & other financial institutions 3 - -

Investments in share & securities 4

Government - -

Others - -

- -

Investments

General investments etc 5 10,728,159,623 12,321,696,556

Bills purchased and discounted 6 173,641,364 289,896,022

10,901,800,988 12,611,592,577

Fixed assets including premises 7 26,177,402 29,330,353

Other assets 8 4,997,176,910 3,413,895,473

Non - banking assets - -

Total assets 15,979,322,958 16,139,058,226

LIABILITIES AND CAPITAL

Liabilities

Placements from other banks, financial institutions and agents 9 - -

Deposits and other accounts 10

Mudaraba savings deposits 1,659,771,304 1,469,555,319

Mudaraba term deposits 11,562,059,375 12,324,949,496

Other mudaraba deposits - -

Al-wadeeah current deposits and other deposits accounts 2,003,415,525 2,088,343,898

Bills payable 67,278,669 62,570,057

15,292,524,873 15,945,418,769

Other liabilities 11 686,798,086 193,639,457

Total liabilities 15,979,322,958 16,139,058,226

Capital / Shareholders' equity

Paid up capital - -

Statutory reserve - -

Revaluation gain / (loss) on investments - -

Revaluation reserve - -

Other reserve - -

Surplus in profit and loss account / Retained earnings - -

Total Shareholders' equity - -

Total liabilities and Shareholders' equity 15,979,322,958 16,139,058,226

373


2014 2013

OFF- BALANCE SHEET EXPOSURE

Contingent liabilities 12

Acceptances and endorsements 12.1 2,989,218,036 3,153,072,594

Letters of guarantee 12.2 732,937,880 1,045,110,938

Irrevocable letters of credit 12.3 1,962,011,752 1,550,741,407

Bills for collection 12.4 128,821,639 201,602,649

Other contingent liabilities - -

5,812,989,307 5,950,527,588

Other commitments

Documentary credits and short term trade -related transactions - -

Forward assets purchased and forward deposits placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities , credit lines and other commitments - -

Other commitments - -

- -

Total Off-Balance Sheet exposure including contingent liabilities 5,812,989,307 5,950,527,588

Prime Bank Limited-Islamic BranchesBalance Sheet as at 31 December 2014

374


Annexure-G(I)

Prime Bank Limited-Islamic BranchesProfit and Loss Account for the year ended 31 December 2014


2014 2013

Investment income 13 1,831,292,356 2,784,445,882

Profit paid on deposits 14 (1,142,806,401) (1,579,947,869)

Net investment income 688,485,955 1,204,498,013

Income from investment in shares / securities - -

Commission, exchange and brokerage 15 87,939,439 91,091,483

Other operating income 16 38,622,161 42,332,914

Total operating income (A) 815,047,554 1,337,922,410

Salaries and allowances 17 99,872,777 102,897,944

Rent, taxes, insurance, electricity, etc. 18 13,898,766 13,899,916

Legal expenses 19 672,768 731,628

Postage, stamp, telecommunication, etc. 20 5,542,033 7,832,437

Stationery, printing, advertisements, etc. 21 4,780,498 4,932,443

Chief Executive's salary and fees - -

Directors' fees & expenses - -

Shariah supervisory committee's fees and expenses - -

Auditors' fees - -

Charges on investment losses 22 - -

Depreciation and repair of Bank's assets 23 8,011,888 7,838,369

Zakat expenses - -

Other expenses 24 17,343,909 18,527,960

Total operating expenses (B) 150,122,640 156,660,696

Profit / (loss) before provision (C=A-B) 664,924,915 1,181,261,714

Provision for investments 25

Specific provision - -

General provision - -

Provision for off-balance sheet exposures - -

- -

Provision for diminution in value of investments - -

Other provisions - -

Total provision (D) - -

Total profit / (loss) before taxes (C-D) 664,924,915 1,181,261,714

375

Prime Bank Limited-Islamic BranchesCash Flow Statement for the year ended 31 December 2014

ParticularsAmount in Taka

2014 2013


Investment income receipts in cash 1,469,081,309 2,523,624,527 Profit paid on deposits (1,213,317,191) (1,572,272,330)Dividend receipts - - Fees and commission receipts in cash 87,939,439 91,091,483 Recoveries of investments previously written off - - Cash payments to employees (99,872,777) (102,897,944)Cash payments to suppliers (4,780,498) (4,932,443)Income taxes paid - - Receipts from other operating activities 38,622,161 42,332,914 Payments for other operating activities (40,053,106) (43,450,386)Cash generated from operating activities before changesin operating assets and liabilities 237,619,336 933,495,821

Increase / (decrease) in operating assets and liabilitiesStatutory deposits - - Purchase of trading securities (Treasury bills) - - Investment to other banks - - Investment to customers 1,709,791,590 1,058,017,164 Other assets (1,815,484,515) (1,818,416,454)Deposits from other banks (941,758,315) (214,050,964)Deposits from customers 288,864,420 (86,586,690)Other liabilities account of customers - - Trading liabilities - - Other liabilities 493,158,629 144,054,015

(265,428,192) (916,982,929)Net cash from operating activities (27,808,856) 16,512,892

B) Cash flows from investing activitiesDebentures - - Proceeds from sale of securities - - Payments for purchases of securities - - Purchase of property, plant and equipment (2,263,307) 5,092,915 Payment against lease obligation - - Proceeds from sale of property, plant and equipment - - Net cash used in investing activities (2,263,307) 5,092,915

C) Cash flows from financing activitiesDividend paid - - Net Cash from financing activities - -

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) (30,072,164) 21,605,807 E) Effects of exchange rate changes on cash and cash equivalents - - F) Cash and cash equivalents at beginning of the year 84,239,822 62,634,015 G) Cash and cash equivalents at end of the year (D+E+F) 54,167,658 84,239,822

Cash and cash equivalents at end of the yearCash in hand (including foreign currencies) 53,954,854 84,027,018 Balance with Bangladesh Bank and its agent bank (s)(including foreign currencies) - - Balance with other banks and financial institutions 212,804 212,804 Placement with banks & other financial institutions - - Prize bonds - -

54,167,658 84,239,822

376


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377

Prime Bank Limited-Islamic BranchesNotes to the Financial Statements for the year ended 31 December 2014 Please see PBL notes 1-2


1 Cash in handi) In local currency 53,288,075 82,487,257 ii) In foreign currency 666,779 1,539,761 Sub-total (a) 53,954,854 84,027,018

Cash with Bangladesh Bank and its agents

Balance with Bangladesh Bank - - Balance with Sonali Bank (as agent of Bangladesh Bank) - - Sub-total (b) - - Grand total (a+b) 53,954,854 84,027,018 Required CRR and SLR of Islamic Branches are maintained at Head Office

2 Balance with other banks and financial institutions

In Bangladesh (note-2.1) 212,804 212,804 Outside Bangladesh (note-2.2) - -

212,804 212,804 2.1 In Bangladesh

Short-term deposit accounts

ICB Islamic Bank Ltd., Motijheel, Dhaka 14,334 14,334 ICB Islamic Bank Ltd, Sylhet 17,016 17,016 Social Islami Investment Bank Ltd. Dhaka 12,603 12,603

43,953 43,953 Savings accounts

Al Arafah Islami Bank Ltd. Dhaka 64,622 64,622 Bank Al Falah Ltd. Dhaka 36,595 36,595 Social Islami Investment Bank Ltd. Dhaka 67,635 67,635

168,851 168,851 2.2 Outside Bangladesh (NOSTRO Accounts) - -

212,804 212,804

3 Placement with banks & other financial institutions - -

4 Investment in share & securities - -

5 Investmentsa) In Bangladesh

Quard against TDR 1,257,444,178 1,918,612,116 Bai-Murabaha (cc pledge) 3,414,628,256 3,645,849,351 Bai-Muajjal (cc hypo) 2,954,267,553 2,737,353,624 Retail investment 506,105,518 648,495,741 Izara (note-5.2) 313,017,705 491,240,293 Bai-Salam (packing credit) 68,957,789 34,258,761 Staff investment 128,669,231 141,596,189 Hire purchase 2,085,069,394 2,704,290,480

10,728,159,623 12,321,696,556 b) Outside Bangladesh - -

10,728,159,623 12,321,696,556 Payable Inside BangladeshInland bills purchased 169,042,792 269,918,641 Payable Outside Bangladesh Foreign bills purchased and discounted 4,598,573 19,977,381

173,641,364 289,896,022 10,901,800,988 12,611,592,577

378


Prime Bank Limited-Islamic BranchesNotes to the Financial Statements for the year ended 31 December 2014


5.1 Investments under the following broad categories

Investments 3,101,819,637 4,019,881,464 Bai-Murabaha / Bai-Muajjal 6,368,895,809 6,383,202,976 Quard against TDR 1,257,444,178 1,918,612,116

10,728,159,623 12,321,696,556 Bills purchased and discounted (note-6) 173,641,364 289,896,022

10,901,800,988 12,611,592,577 5.2 Izara

Lease rental receivable within 1 year 27,776,150 101,580,600 Lease rental receivable within 5 years 336,660,750 1,082,792,736 Lease rental receivable after 5 years - - Total lease / Izara rental receivable 364,436,900 1,184,373,336 Less: Unearned interest receivable 51,419,195 693,133,043 Net lease / Izara finance 313,017,705 491,240,293

5.3 Investments on the basis of significant concentration including bills purchased and discounted.a) Investments to Directors of the Bank - - b) Investments to Chief Executive and other executives & officers 128,618,050 141,528,771 c) Investments to customer groups:

i) Commercial investment 4,672,712,172 915,930,190 ii) Export financing 743,163,292 38,274,261 iii) House building investment - 935,753,322 iv) Retail investment 506,105,518 648,495,741 v) Small and medium enterprises 1,085,452,359 1,121,587,678 vi) Special program investment - - vii) Staff investment 51,181 67,418 viii) Industrial investments 2,619,380,129 7,814,679,327 ix) Other investment 1,146,318,287 995,275,870

10,773,182,937 12,470,063,806 10,901,800,988 12,611,592,576

d) Details of Industrial investmentsi) Agricultural industries 184,432,093 194,372,071 ii) Textile industries 400,873,335 874,104,981 iii) Food and allied industries 269,415,071 433,559,027 iv) Pharmaceutical industries 45,534,933 75,679,162 v) Leather, chemical, cosmetics, etc. - 60,308,781 vi) Tobacco industries - - vii) Cement and ceramic industries 463,648,282 823,091,709 viii) Service Industries 266,052,291 120,059,319 ix) Transport and communication industries 70,161,287 260,732,118 x) Other industries including bills purchase and discounted 919,262,838 4,972,772,160

2,619,380,129 7,814,679,327 5.4 Investments -geographical location-wise

Inside BangladeshUrbanDhaka Division 8,426,190,842 9,541,802,748 Chittagong Division 2,277,525,423 2,882,890,221 Khulna Division - - Rajshahi Division - - Barisal Division - - Sylhet Division 198,084,723 186,899,608

10,901,800,988 12,611,592,577 RuralDhaka Division - - Chittagong Division - - Sylhet Division - -

- - Outside Bangladesh - -

10,901,800,988 12,611,592,577

379


5.5 Details of pledged collaterals

Collateral of movable / immovable assets 9,928,152,430 9,424,546,296

Local banks and financial institutions guarantee - 1,398,779,310

Export documents 21,325,745 44,813,875

Fixed deposit receipts 173,523,432 582,074,989

FDR of other banks - -

Personal guarantee 169,372,616 949,280,184

Other securities 609,426,764 212,097,923

10,901,800,988 12,611,592,577

5.6 Particulars of investments

i) Investments considered good in respect of which the Bank is fully secured 10,209,504,628 11,400,050,545

ii) Investments considered good against which the Bank holds no security other than the debtors’ personal guarantee 522,923,744 316,661,147

iii) Investments considered good secured by the personal undertaking of one or more parties in addition to the personal guarantee of the debtors 169,372,616 894,880,886

iv) Investments adversely classified; provision not maintained there against - - 10,901,800,988 12,611,592,577

v) Investments due by directors or officers of the banking company or any of them either separately or jointly with any other persons 128,669,231 141,596,189

vi) Investments due from companies or firms in which the directors of the Bank have interest as directors, partners or managing agents or in case of private companies, as members.

- -

vii) Maximum total amount of investments, including temporary investment made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with any other person.

128,669,231 141,596,189

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

- -

ix) Due from banking companies - -

x) Classified investments

a) Classified investments on which profit has not been charged (note-5.7) 1,087,321,314 235,056,108

b) Provision on classified investments (note-5.8) 277,275,672 70,039,007

c) Provision kept against investments classified as bad debts 240,016,189 60,036,704

d) Profit Suspense Account (note-11) 245,406,044 104,487,600

xi) Cumulative amount of written off investments

Opening Balance - -

Amount written off during the year - -

- -

Amount realised against investments previously written off - -

The amount of written off investments for which law suits have been filed - -


380



5.7 Classification of investmentsUnclassified

Standard including staff investment 9,478,542,574 12,137,830,784 Special mention account (SMA) 335,937,100 238,705,685

9,814,479,674 12,376,536,469

Classified

Sub-standard 438,693,506 33,986,865Doubtful 13,734,139 41,323,916 Bad / Loss 634,893,669 159,745,328

1,087,321,314 235,056,108 10,901,800,988 12,611,592,577

5.8 Particulars of required provision for investments

Base Rate

Status for provision (%)

General Provision

Investments (Including SMA) 9,814,479,674 *Various 103,364,374 177,799,853

103,364,374 177,799,853

*General provision is kept @ 1% on general investments and 2% on small enterprise financing and 5% on consumer financing.

Specific provision

Sub-standard 163,251,918 20 32,650,384 2,764,000

Doubtful 9,218,198 50 4,609,099 7,238,303

Bad / Loss 240,016,189 100 240,016,189 60,036,704

277,275,672 70,039,007

Required provision for investments 380,640,046 247,838,860

Provision maintained by Head Office 380,640,046 247,838,860

Excess / (short) provision at 31 December 2014 - -

5.9 Particulars of required provision for Off-balance Sheet Exposures

Base Rate

for provision 1%

Acceptances and endorsements 2,989,218,036 29,892,180 31,530,726

Letter of guarantee 732,937,880 7,329,379 10,451,109

Letter of credit 1,962,011,752 19,620,118 15,507,414

Required provision on Off-balance Sheet Exposures 56,841,677 57,489,249

Provision maintained by Head Office 56,841,677 57,489,249

Excess / (short) provision at 31 December 2014 - -

6 Bills purchased and discounted

Payable in Bangladesh 169,042,792 269,918,641

Payable outside Bangladesh 4,598,573 19,977,381

173,641,364 289,896,022

Amount in Taka

2014 2013

381

Amount in Taka

2014 2013

7 Fixed assets including premises, furniture and fixtures

Property, Plant & EquipmentLand - - Building - - Furniture and fixtures 12,225,463 13,414,066 Office equipment and machinery 12,130,788 11,242,163 Vehicles 1,490,445 3,682,075 Leased vehicles 329,340 990,340 Library books 1,367 1,709

26,177,402 29,330,353 ATMHardware & equipment - - Furniture & fixture - - Interior decoration - -

- - 26,177,402 29,330,353

Less: Accumulated depreciation - - 26,177,402 29,330,353

Intangibles assetsSoftware-core banking - - Software-ATM - - Cost of intangibles assets - - Less: Accumulated amortization - -

- - Net book value at the end of the year 26,177,402 29,330,353

8 Other assets

Stationery and stamps 661,031 258,819 Profit receivable 362,211,047 260,821,355 Advance income tax 107,825 - Advance deposits and advance rent 427,484 1,354,436 Branch adjustments account 4,633,362,681 3,135,936,450 Migration account - - Suspense account 406,842 589,226 Islamic transit account - 408,564 Sundry assets - 14,526,624

4,997,176,910 3,413,895,473

9 Borrowings from other banks, financial institutions and agents

In Bangladesh - - Outside Bangladesh - -

- -

10 Deposits and other accounts

Deposits from banks (note -10.1.a) 655,614,256 1,597,372,571 Deposits from customers (note-10.1.b) 14,636,910,616 14,348,046,197

15,292,524,873 15,945,418,768 10.1 a) Deposits from Banks

Al-wadeeah current deposits - - Bills payable - - Mudaraba savings deposits 27,249,372 33,178,088 Mudaraba special notice deposits 628,364,885 1,564,194,484 Mudaraba fixed deposits - -

655,614,256 1,597,372,571


382


Amount in Taka

2014 2013

Sl No Name of Bank Type of Account

1 Al Arafah Islami Bank Ltd MSB 18,022,182 14,728,547 2 Bank Al-Falah MSB 268,818 6,345 3 Social Islami Bank Ltd MSB 2,512,403 12,167,806 4 Islami Bank Bangladesh Ltd MSB 6,445,969 6,275,390

Sub Total 27,249,372 33,178,088

5 Exim Bank Ltd MSND 67,033,845 24,809,713 6 ICB Islamic Bank Ltd MSND 2,194,509 2,120,793 7 Social Islami Bank Ltd MSND 6,659 6,659 8 Shahjalal Islami Bank Ltd MSND 534,472,965 1,508,450,115 9 Modhumoti Bank Ltd MSND 28,387 5,592,532

10 Islami Bank Bangladesh Limited MSND 24,376,852 23,214,672 11 Grameen Bank MSND 251,668 -

Sub Total 628,364,885 1,564,194,484

Grand Total 655,614,256 1,597,372,572

b) Customer Deposits

i) Al wadeeah current deposits and other accounts

Al-wadeeah current deposits 595,937,800 480,917,949

Foreign currency deposits 426,891,705 133,233,832

Security deposits 242,619 440,619

Sundry deposits 980,343,401 1,473,751,498

2,003,415,525 2,088,343,897

ii) Bills payable

Pay orders issued 66,031,502 61,069,249

Pay slips issued 70,594 70,594

Demand draft payable 1,176,573 1,430,214

Foreign demand draft - -

T. T. payable - -

67,278,669 62,570,057

iii) Mudaraba savings deposits 1,632,521,932 1,436,377,231

iv) Mudaraba term deposits

Mudaraba fixed deposits 6,730,206,248 7,013,593,729

Mudaraba special notice deposits 1,297,235,007 817,285,777

Non resident Taka deposits - -

Mudaraba special scheme deposits 2,906,253,234 2,929,875,506

10,933,694,490 10,760,755,012

14,636,910,616 14,348,046,197

15,292,524,873 15,945,418,768


383


Amount in Taka

2014 2013

c) Deposits and other accountsCurrent deposits and other accountsDeposits from banks (note -10.1.a) - - Deposits from customers (note-10.1.b.i) 2,003,415,525 2,088,343,897

2,003,415,525 2,088,343,898 Bills payableDeposits from banks (note -10.1.a) - - Deposits from customers (note-10.1.b.ii) 67,278,669 62,570,057

67,278,669 62,570,057 Savings bank / mudaraba savings depositsDeposits from banks (note -10.1.a) 27,249,372 33,178,088 Deposits from customers (note-10.1.b.iii) 1,632,521,932 1,436,377,231

1,659,771,304 1,469,555,319

Term / Fixed depositsDeposits from banks (note -10.1.a) 628,364,885 1,564,194,484 Deposits from customers (note-10.1.b.iv) 10,933,694,490 10,760,755,012

11,562,059,375 12,324,949,496 15,292,524,873 15,945,418,769

11 Other liabilities

Expenditure and other payables 3,638,087 3,294,653 Foreign currency held against EDF loan 437,753,955 85,857,204 Obligation under finance lease - - Provision for unclassified investments - - Provision for classified investment - - Provision for off-balance sheet exposure - - Interest suspense account 245,406,044 104,487,600

686,798,086 193,639,457

12 Contingent liabilities

12.1 Acceptances and endorsementsBack to back bills (Foreign) 2,568,947,919 2,459,259,236 Back to back bills (Local) 392,473,050 652,101,031 Back to back bills (EPZ) 27,797,068 41,712,327

2,989,218,036 3,153,072,594 Less: Margin (474,974,398) (717,626,079)

2,514,243,638 2,435,446,515

12.2 Letters of guarantee

Letters of guarantee (Local) 245,087,592 285,838,261 Letters of guarantee (Foreign) 487,850,287 759,272,677 Foreign counter guarantees - -

732,937,880 1,045,110,938 Less: Margin (25,095,372) (24,914,313)

707,842,508 1,020,196,625

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

Directors or officers - - Government 2,948,968 54,130,155 Banks and other financial institutions 487,850,287 779,238,926 Others 242,138,624 211,741,857

732,937,880 1,045,110,938 Less: Margin (25,095,372) (24,914,313)

707,842,508 1,020,196,625

384



Amount in Taka

2014 2013

12.3 Irrevocable Letters of Credit

Letters of credit (Sight) 454,824,637 293,211,731 Letters of credit (Deferred) 1,034,315,904 455,761,331 Back to back L/C 472,871,211 801,768,345 Bank's liabilities PAD - -

1,962,011,752 1,550,741,407 Less: Margin (226,951,596) (409,040,927)

1,735,060,155 1,141,700,480

12.4 Bills for collection

Outward bills for collection 128,821,639 201,602,649 Inward local bills for collection - - Inward foreign bills for collection - -

128,821,639 201,602,649 Less: Margin - (213,050)

128,821,639 201,389,599

13 Investment income

i) Income from general investmentQuard against TDR 19,104,773 103,973,188 Bai-Murabaha (cc pledge) 555,673,087 638,886,325 Bai-Muajjal (cc hypo) 329,868,555 459,781,751 Retail investment loan 85,207,611 110,515,252 Izara 43,528,827 95,234,116 Bai-Salam (packing credit) 8,391,376 (973,580)Staff loan 6,706,321 7,701,644 Hire purchase 288,905,960 414,688,278 Other investments 458,920,816 886,115,704 Inland bills purchased 34,985,030 68,519,667 Sub-total (i) 1,831,292,356 2,784,442,345 ii) Profit on deposits with other Islamic banksIn Bangladesh - 3,537 Out side Bangladesh - - Sub-total (ii) - 3,537 Grand total (i+ii) 1,831,292,356 2,784,445,882

14 Profit paid on deposits

a) Profit paid on deposits: Mudaraba savings deposits 67,193,263 131,447,430 Mudaraba special notice deposits 87,327,014 267,011,921 Mudaraba term deposits 653,435,120 854,344,000 Mudaraba special scheme deposits 326,800,190 323,903,776 Foreign currency deposits - - Others 8,050,814 3,240,742

1,142,806,401 1,579,947,869 b) Interest / Profit paid for borrowings: Bangladesh Bank/ Other Bank/ FI/Agents bank - - Islamic Bond Fund - -

- - 1,142,806,401 1,579,947,869

385

Amount in Taka

2014 2013

15 Commission, exchange and brokerage

Commission on L/Cs-sight 13,922,444 11,913,223 Commission on L/Cs-deferred 12,432,629 8,450,202 Commission on L/Cs-back to back 29,800,863 38,729,498 Commission on L/Gs 8,056,672 6,796,222 Commission on remittance 2,277,295 2,291,493 Other commission 68,477 34,877

66,558,380 68,215,515 Exchange gain (note - 15.1) - including gain from FC dealings 21,381,059 22,875,968 Settlement fees / Brokerage - -

87,939,439 91,091,483

15.1 Exchange gain

Exchange gain 21,381,059 22,880,312 Less: Exchange loss - (4,344)

21,381,059 22,875,968

16 Other operating income

Rent recovered 554,038 529,500 Service and other charges 3,713,143 4,024,657 Retail Income 10,712,432 16,153,308 Income from ATM Service 3,370,950 3,501,870 Postage / telex / SWIFT/ fax recoveries 7,187,553 6,239,601 Gain on sale of assets - - Incidental charges - - Rebate from foreign Bank 3,363,740 3,368,389 Foreign correspondent charges - - Miscellaneous earnings (note-16.1) 9,720,305 8,515,589

38,622,161 42,332,914

16.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank and sale proceeds of various items, etc.

17 Salaries and allowances

Basic pay 50,304,090 51,707,020

Allowances 36,803,933 38,007,916

Bonus 7,948,200 8,246,000

Bank's contribution to provident fund 4,816,554 4,937,008

99,872,777 102,897,944

18 Rent, taxes, insurance, electricity, etc.

Rent, rate and taxes 9,314,099 9,324,931

Lease rent - -

Insurance 705,852 772,645

Power and electricity 3,878,815 3,802,340 13,898,766 13,899,916

19 Legal expenses

Legal expenses 672,768 731,628

Other professional charges - -

672,768 731,628


386



Amount in Taka

2014 2013

20 Postage, stamp, telecommunication, etc.

Postage 1,744,177 1,256,865 Telegram, telex, fax and e-mail 1,727,157 2,315,566 Data communication 1,380,046 3,553,105 Telephone - office 615,795 638,434 Telephone - residence 74,858 68,468

5,542,033 7,832,437 21 Stationery, printing and advertisements, etc.

Office and security stationery 1,827,095 2,224,512 Computer consumable stationery 2,905,531 2,663,063 Publicity and advertisement 47,872 44,868

4,780,498 4,932,443 22 Charges on loan losses

Loan -written off - - Interest waived - -

- -

23 Depreciation and repair of Bank's assetsDepreciationFixed assets 5,416,258 5,379,922 Leased assets - -

5,416,258 5,379,922 RepairsBuilding 30,755 115,090 Furniture and fixtures 554,240 159,830 Office equipment 1,257,230 1,428,754 Bank's vehicles 604,380 485,323 Maintenance 149,025 269,450

2,595,630 2,458,447 8,011,888 7,838,369

24 Other expensesSecurity and cleaning 6,171,642 6,449,277 Entertainment 1,636,534 1,974,788 Car expenses 4,594,857 5,349,881 Books, magazines and newspapers, etc. 36,428 28,261 Medical expenses - - Bank charges and commission paid - 1,400 Loss on sale of assets - - Finance charge for lease assets - - Retail Expenses 1,377,300 768,103 Traveling expenses 792,450 864,670 Local conveyance, labor, etc. 599,056 714,447 Business development 12,048 - Training and internship 295,650 254,050 Remittance charges 561,658 683,650 Laundry, cleaning and photographs, etc. 279,880 349,478 Exgratia 399,000 430,500 Miscellaneous expenses 587,407 659,453

17,343,909 18,527,960 25 Provision for investments & off -balance sheet exposure

Provision for bad and doubtful investments - - Provision for unclassified investments - - Provision for off-balance sheet exposure - - Provision for other assets - -

- -

387

Fina

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1

55,5

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(898

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7

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12,

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: Int

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11,7

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77

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1 (8

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13)

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299,

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44,6

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3,17

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1

1,750

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1

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7

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27,16

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3,14

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2

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1,827

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9,98

3,17

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9,38

9,19

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14

7,366

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Fixe

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incl

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56,

642,

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128,

842,

350

179

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1

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308,

119

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59

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9

1,804

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2,60

2,98

1,707

210

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3

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2

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23,17

6

Non

ban

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-

-

-

-

176

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17

6,34

0,64

0

Tota

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(A):

40

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44,

905,

652,

275

62,

415,

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02

55,

269,

362,

172

52,

302,

108,

890

2

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2,3

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4

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-

7,6

68,8

75,9

59

Dep

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30,8

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10,6

30

52,

324,

398,

780

31

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49

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37

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944

201,8

94,8

41,3

35

Oth

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(not

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2,9

42,8

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34

-

-

-

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2,9

42,8

89,2

34

Prov

isio

n an

d ot

her l

iabi

litie

s

8

9,27

5,35

5

5

1,338

,023

5

,310

,728

,935

1

,290

,414

,068

11

,20

3,12

5,18

0

17,9

44,8

81,5

61

Tota

l lia

bilit

ies

(B):

34

,627

,456

,736

52,

375,

736,

803

39,

273,

178,

865

55,

115,

885,

561

49,

059

,230

,124

230

,451

,488

,089

Net

liqu

idity

gap

(A-B

):

5,3

91,8

68,9

93

(7

,470

,084

,528

) 2

3,14

2,57

2,13

7

1

53,4

76,6

11

3

,242

,878

,767

24,

460,

711,9

80

Cha

irman

Dire

ctor

Dire

ctor

Man

agin

g D

irect

or

389

Ann

exur

e-I (

1)

Con

solid

ated

Liq

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ty S

tate

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of m

atur

ity o

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ets

and

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31 D

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014

Part

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Up

to 1

mon

th

1-3

mon

ths

3-1

2 m

onth

s 1-

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Abo

ve 5

yea

rs

Tot

al

Ass

ets:

Cas

h in

han

d 4

,459

,540

,611

13

,100,

234,

670

17

,559

,775

,281

Bala

nce

with

oth

er b

anks

and

fina

ncia

l ins

titut

ions

1,50

4,23

6,60

5 10

0,0

00,

00

0

- -

- 1,

604,

236,

605

Mon

ey a

t cal

l and

sho

rt n

otic

e

- -

- -

- -

Inve

stm

ents

3,5

74,0

30,7

38

17,9

84,5

28,6

16

9,11

6,45

0,87

2 14

,760

,391

,175

29,

060

,910

,612

7

4,49

6,31

2,0

13

Loan

s an

d ad

vanc

es /

inve

stm

ents

32,

710,

088,

393

26,

135,

640,

853

53,

371,2

26,5

59

37,7

44,2

84,7

65

2,7

57,9

95,3

30

152,

719,

235,

900

Fixe

d as

sets

incl

udin

g pr

emis

es, f

urni

ture

and

fixt

ures

56,

951,0

72

129,

543,

122

180,

210,

658

1,16

0,58

6,38

3 5

,121,3

61,8

81

6,6

48,6

53,11

6

Oth

er a

sset

s 3

2,18

1,138

9

02,

690,

595

72,

854,

253

2,13

4,17

8,58

2 2

,871

,010

3

,144,

775,

578

Non

ban

king

ass

ets

- -

- -

176,

340,

640

17

6,34

0,64

0

Tota

l ass

ets

(A):

42,

337,

028

,557

4

5,25

2,40

3,18

6 6

2,74

0,74

2,34

2 5

5,79

9,44

0,90

5 5

0,21

9,71

4,14

2 2

56,3

49,3

29,13

3

Liab

ilitie

s:

Borr

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gs fr

om B

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h Ba

nk, o

ther

ban

ks, f

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cial

inst

itutio

ns

and

agen

ts79

5,87

6,40

4

-

2,46

4,82

3,47

14,

822,

503,

443

-

8,0

83,2

03,

317

Dep

osits

3

0,83

4,91

7,191

5

2,31

9,34

0,36

4 3

1,620

,399

,791

4

9,23

7,982

,774

3

7,847

,987

,426

2

01,8

60,6

27,5

46

Oth

er a

ccou

nts

2,9

42,8

89,2

34

- -

- -

2,9

42,8

89,2

34

Prov

isio

n an

d ot

her l

iabi

litie

s 9

3,79

9,32

5 5

3,93

9,54

4 6

,228

,724

,763

1,

290,

414,

068

11

,214

,125,

179

18,8

81,0

02,

879

Tota

l lia

bilit

ies

(B):

34,

667,

482,

153

52,

373,

279,

908

40,

313,

948,

025

5

5,35

0,90

0,28

5 4

9,0

62,11

2,60

5 2

31,7

67,7

22,9

76

Net

liqu

idity

gap

(A-B

): 7

,669

,546

,40

3 (7

,120,

876,

722)

22,

426,

794,

317

448

,540

,620

1,

157,

601,

537

24,

581,6

06,

157

390


Highlights of The Bank

Annexure-J(Taka in million)

Sl. # Particulars 2014 2013

1 Paid-up capital 10,293.49 10,293.49

2 Total capital (Consolidated) 27,423.70 26,811.97

3 Total capital (Solo Basis) 27,312.77 26,495.44

4 Capital surplus / (deficit) (Consolidated) 5,791.27 4,532.82

5 Capital surplus / (deficit) (Solo Basis) 5,823.59 4,493.43

6 Total assets 254,912.20 243,868.80

7 Total deposits 204,837.73 201,907.14

8 Total loans and advances / investments 147,366.65 153,588.76

9 Total contingent liabilities and commitments 118,111.17 116,414.90

10 Credit deposit ratio 71.94% 76.07%

11 Percentage of classified loans / investments against total loans and advances / investments 7.61% 5.09%

12 Profit after tax and provision 2,392.90 1,829.50

13 Amount of classified loans / investments during the year 11,214.64 7,814.50

14 Provisions kept against classified loans / investments 4,165.30 3,342.05

15 Provision surplus / (deficit) against classified loans / investments 23.78 10.22

16 Cost of fund 7.36% 8.80%

17 Interest earning assets 221,521.17 211,398.98

18 Non-interest earning assets 33,391.03 32,469.83

19 Return on investment (ROI) 9.56% 10.86%

20 Return on assets (ROA) 0.96% 0.76%

21 Income from investment 6,194.36 5,582.71

22 Earnings per share (Taka) 2.32 1.78

23 Net income per share (Taka) 2.32 1.78

24 Price earning ratio (times) 8.43 14.57

391

FINANCIAL STATEMENTS(ANNEXURE-K)

OFF-SHORE BANKING UNITS

392


Off-shore Banking UnitsBalance Sheet as at 31 December 2014

Particulars Notes2014 2013

USD Taka TakaPROPERTY AND ASSETSCash In hand (including foreign currencies) - - - Balance with Bangladesh Bank and its agent bank (s) - - - (including foreign currencies) - - -

- - - Balance with other banks and financial institutions In Bangladesh 3 3,698,555 288,300,173 347,658,546 Outside Bangladesh - - -

3,698,555 288,300,173 347,658,546 Loans and advances Loans, cash credits, overdrafts, etc. 4 77,029,695 6,004,418,487 3,592,242,835 Bills purchased and discounted 5 33,711,251 2,627,771,777 2,457,608,207

110,740,946 8,632,190,264 6,049,851,042 Fixed assets including premises, furniture and fixtures 6 33,593 2,618,535 3,091,918 Other assets 7 935,103 72,890,705 5,618,574 Non - banking assets - - - Total assets 115,408,197 8,995,999,676 6,406,220,080

LIABILITIES AND CAPITALLiabilitiesBorrowings from other banks, financial institutions and agents 8 110,826,709 8,638,875,435 6,174,618,379 Deposits and other accounts Current deposits 9 2,105,781 164,144,402 93,753,151 Bills payable - - - Savings bank deposits - - - Term deposits - - - Bearer certificate of deposit - - -

2,105,781 164,144,402 93,753,151

Other liabilities 10 2,475,707 192,979,839 137,848,550 Total liabilities 115,408,197 8,995,999,676 6,406,220,080 Capital / Shareholders' equityPaid up capital - - - Statutory reserve - - - Foreign currency gain - - - Other reserve - - - Deficit in profit and loss account / Retained earnings - - - Total Shareholders' equity - - -

Total liabilities and Shareholders' equity 115,408,197 8,995,999,676 6,406,220,080

OFF- BALANCE SHEET EXPOSURES

Contingent liabilities 11Acceptances and endorsements - - - Letters of guarantee 227,296 17,717,568 17,672,245 Irrevocable letters of credit 5,681,742 442,888,358 499,139,380 Bills for collection 9,667,692 753,590,824 779,617,066 Other contingent liabilities - - -

15,576,730 1,214,196,750 1,296,428,691 Other commitmentsDocumentary credits and short term trade -related transactions - - - Forward assets purchased and forward deposits placed - - - Undrawn note issuance and revolving underwriting facilities - - - Undrawn formal standby facilities , credit lines and other commitments - - - Liabilities against forward purchase and sale - - - Other commitments - - -

- - - Total Off-Balance Sheet exposures including contingent liabilities 15,576,730 1,214,196,750 1,296,428,691

393

Off-shore Banking UnitsProfit and Loss Account for the year ended 31 December 2014

Particulars Notes2014 2013

USD Taka Taka

Interest income 12 4,595,965 356,708,919 237,699,454

Interest paid on deposits, borrowings, etc. 13 (2,964,386) (230,076,343) (134,334,236)

Net interest 1,631,579 126,632,576 103,365,218

Commission, exchange, brokerage, etc. 14 234,922 18,233,143 16,732,483

Other operating income 15 137,462 10,668,874 7,689,346

Total operating income (A) 2,003,963 155,534,593 127,787,047

Salaries and allowances 16 132,575 10,289,648 10,985,512

Rent, taxes, insurance, electricity, etc. 17 10,626 824,702 855,636

Legal expenses 379 29,406 40,662

Postage, stamp, telecommunication, etc. 18 1,545 119,938 195,127

Stationery, printing, advertisements, etc. 19 3,166 245,759 285,516

Auditors' fees - - -

Depreciation and repair of Bank's assets 20 8,326 646,173 658,226

Other expenses 21 142,247 11,040,294 2,910,067

Total operating expenses (B) 298,865 23,195,920 15,930,746

Profit / (loss) before provision (C=A-B) 1,705,099 132,338,673 111,856,301

Provision for loans and advances / investments

Specific provision - - -

General provision - - -

- - -

Provision for diminution in value of investments - - -

Other provision - - -

Total provision (D) - - -

Total profit / (loss) before taxes (C-D) 1,705,099 132,338,673 111,856,301

Provision for taxation

Current tax - - -

Deferred tax - - -

- - -

Net profit / (loss) after taxation 1,705,099 132,338,673 111,856,301

394


Off-shore Banking UnitsCash Flow Statement for the year ended 31 December 2014

Particulars2014 2013

USD Taka Taka


Interest receipts in cash 4,595,965 356,708,919 237,699,454

Interest payments (2,964,386) (230,076,343) (134,334,236)

Fees and commission receipts in cash 234,922 18,233,143 16,732,483

Cash payments to employees (132,575) (10,289,648) (10,985,512)

Cash payments to suppliers (19,697) (1,528,790) (1,679,870)

Receipts from other operating activities 137,462 10,668,874 7,689,346

Payments for other operating activities (138,896) (10,780,204) (2,628,704)Cash generated from operating activities before changes in operating assets and liabilities

1,712,794 132,935,951 112,492,961


Loans and advances to other banks - - -

Loans and advances to customers (32,929,357) (2,566,823,592) (1,283,481,494)

Other assets (862,838) (67,257,721) (5,502,433)

Deposits from other banks / borrowings - - -

Deposits from customers 899,953 70,150,809 (56,661,099)

Other liabilities (1,002,364) (78,133,658) (118,196,586)

(33,894,605) (2,642,064,161) (1,463,841,612)Net cash used in operating activities (32,181,811) (2,509,128,210) (1,351,348,651)

B) Cash flows from investing activitiesPurchase / sale of property, plant and equipment (1,521) (118,551) (31,807)

Proceeds from sale of property, plant and equipment - - -

Net cash used in investing activities (1,521) (118,551) (31,807)

C) Cash flows from financing activitiesBorrowing from Prime Bank Limited, Other Bank and Bangladesh Bank

31,410,395 2,448,421,444 1,536,886,081

Net cash from financing activities 31,410,395 2,448,421,444 1,536,886,081

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) (772,937) (60,825,317) 185,505,623

E) Effects of exchange rate changes on cash and cash equivalents - 1,466,944 (4,898,407)

F) Cash and cash equivalents at beginning of the year 4,471,493 347,658,546 167,051,330

G) Cash and cash equivalents at end of the year (D+E+F) 3,698,555 288,300,173 347,658,546


Cash in hand (including foreign currencies) - - -

Balance with Bangladesh Bank and its agent bank (s) - - -

(including foreign currencies)

Balance with other banks and financial institutions 3,698,555 288,300,173 347,658,546

3,698,555 288,300,173 347,658,546

395

1.1 Status of the unitsOff-shore Banking Units of Prime Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank obtained the Off-shore Banking Unit permission vide letter no. BRPD (P) 744 (84)/2001-868 dated 19 March 2001. The Bank commenced the operation of its Off-shore Banking Unit from March 15, 2007. Presently the Bank has 3 (Three) units in Dhaka, Adamjee EPZ and Chittagong.

1.1.1 Principal activitiesThe principal activities of the units are to provide all kinds of commercial banking services to its customers through its Off-shore Banking Units in Bangladesh.

1.2 Significant accounting policies and basis of preparation of financial statements

1.2.1 Basis of accounting The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the Bank Companies Act 1991, Bangladesh Accounting Standards and other applicable directives issued by Bangladesh Bank.

1.2.2 Use of estimates and judgmentsThe preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

1.2.3 Foreign currency transactiona) Foreign currencies translationForeign 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) CommitmentsCommitments 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 lossesThe 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.

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

1.2.5 Reporting periodThese financial statements cover from January 01 to December 31, 2014.

1.3 Assets and basis of their valuation

1.3.1 Cash and cash equivalentsCash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit management for its short-term commitments.

1.3.2 Loans and advances / investmentsa) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis.b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept in separate memorandum accounts.

1.3.3 Fixed assets and depreciation

a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets.

Notes to the Financial Statements for the year ended 31 December 2014

396


Category of fixed assets RateFurniture and fixtures 10%Office equipment 20%

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

1.4 Basis for valuation of liabilities and provisions

1.4.1 Benefits to the employees

The retirement benefits accrued for the employees of the units as on reporting date have been accounted for in accordance with the provisions of Bangladesh Accounting Standard-19, "Employee Benefit". Bases of enumerating the retirement benefit schemes operated by the Bank are outlined below:

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

b) Gratuity fundThe Bank operates a funded gratuity scheme on "Continuing Fund Basis", in respect of which provision is made annually according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved the Prime Bank Limited Employees' Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.035.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management) of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employees Benefit".

c) Welfare fundPrime Bank's employees' welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental death or permanent disabilities of the employees. Disbursement from the fund is done as per rules for employees' welfare fund. Welfare fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited.

d) Incentive bonusPrime Bank started a incentive bonus scheme for its employees. 10% of net profit after tax is given by the Board of directors in every year for its employees. These bonus amount distributed among the employees as per performance. The bonus amount are paid annually, normally first quarter of every following year and the cost are accounted for the period to which it relates. Provision for incentive bonus for Off-shore Banking Units is kept with Head Office, Prime Bank Limited.

1.4.2 Provision for liabilitiesA provision is recognised in the balance sheet when the unit has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS 37 "Provisions, Contingent Liabilities and Contingent Assets".

1.5 Revenue recognition

1.5.1 Interest incomeIn terms of the provisions of the BAS-18 "Revenue", the interest income is recognized on accrual basis.

1.5.2 Fees and commission incomeFees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the transactions.

1.5.3 Interest paid and other expensesIn terms of the provisions of the BAS - 1 "Presentation of Financial Statements" interest and other expenses are recognized on accrual basis.

2 Generala) These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.b) Assets and liabilities & income and expenses have been converted into Taka currency @ US$1 = Taka 77.9494 (closing rate as at 31st December 2014) and Tk.77.6135 (average rate which represents the year end).


397

2014 2013TakaUSD Taka

3 Balance with other banks and financial institutions

In Bangladesh (note-3.1) 3,698,555 288,300,173 347,658,546

Outside Bangladesh (note-3.2) - - -

3,698,555 288,300,173 347,658,546

3.1 In Bangladesh 3,698,555 288,300,173 347,658,546

3.2 Outside Bangladesh (Nostro accounts)

Current account

Citibank N.A., New York, USA - - -

4 Loans and advances

i) Loans, cash credits, overdrafts, etc.

Loan (General) 57,044,185 4,446,560,011 1,760,328,910

Hire purchase 6,516,199 507,933,785 742,662,715

Lease finance - - -

Over Draft 1,238,184 96,515,708 96,268,814

T.R Loan 12,231,127 953,408,983 992,982,397

77,029,695 6,004,418,487 3,592,242,835

ii) Bills purchased and discounted (note-5)

Payable Inside Bangladesh

Inland bills purchased 20,964,720 1,634,187,335 1,409,272,204

Payable Outside Bangladesh

Foreign bills purchased and discounted 12,746,531 993,584,442 1,048,336,003

33,711,251 2,627,771,777 2,457,608,207

110,740,946 8,632,190,264 6,049,851,042

5 Bills purchased and discounted

Payable in Bangladesh 20,964,720 1,634,187,335 1,409,272,204

Payable outside Bangladesh 12,746,531 993,584,442 1,048,336,003

33,711,251 2,627,771,777 2,457,608,207

6 Fixed assets including premises, furniture and fixtures

Cost

Furniture and fixtures 21,718 1,692,925 1,880,845

Office equipment and machinery 7,280 567,449 585,892

Vehicle 4,595 358,161 625,181

33,593 2,618,535 3,091,918

7 Other assets

Advance deposits and advance rent 1,339 104,377 104,110

Stationery A/c & Stamp in hand 437 34,078 40,792

Suspense 553,526 43,147,019 5,473,673

Due from Head Office 379,801 29,605,231 -

935,103 72,890,705 5,618,574


398



8 Borrowings from other banks, financial institutions and agents

Bangladesh Bank - - - Prime Bank Limited 55,826,709 4,351,658,435 5,008,368,379 Other Bank & Financial Institutes 55,000,000 4,287,217,000 1,166,250,000

110,826,709 8,638,875,435 6,174,618,379

OBU has been enjoying foreign currency loan of US$ 20,000,000 from International Finance Corporation bearing interest @ 3.25% with 3 months LIBOR & USD $ 25,000,000 from FMO, Netherland bearing interest @ 3.80% with 6 months LIBOR and USD $ 10,000,000 from Commercial Bank of Qatar bearing interest @ 3.40% on quarterly basis.

9 Deposits and other accountsBank deposits - - - Customer deposits and other accounts (note-9.1) 2,105,781 164,144,402 93,753,151

2,105,781 164,144,402 93,753,151

9.1 Customer deposits and other accountsCurrent deposits 761,458 59,355,218 56,442,058 Foreign currency deposits 181,317 14,133,526 14,097,371 Fixed Deposit 845,000 65,867,243 Security deposits receipts - - - Sundry deposits 318,006 24,788,415 23,213,722

2,105,781 164,144,402 93,753,151

10 Other liabilities

Interest on bills discount - - - Interest on borrowing 32,578 2,539,430 - Provision for Expenses/adjusting A/C credit 477,862 37,249,073 6,470,680 Interest Suspense A/c 260,168 20,279,920 20,023,985 Due to Head Office 1,705,099 132,911,416 111,353,884

2,475,707 192,979,839 137,848,550

11 Contingent liabilities

11.1 Acceptance & endorsementBack to Back bills - - -

- - - Less: Margin - - -

- - -

11.2 Letters of guaranteeLetters of guarantee (Local) 227,296 17,717,568 17,672,245 Letters of guarantee (Foreign) - - - Foreign counter guarantees - - -

227,296 17,717,568 17,672,245 Less: Margin - - -

227,296 17,717,568 17,672,245

11.3 Irrevocable Letters of creditsLetters of credits 5,681,742 442,888,358 499,139,380 Back to Back letter of credit - - -

5,681,742 442,888,358 499,139,380 Less: Margin - - -

5,681,742 442,888,358 499,139,380


399


11.4 Bills for collectionOutward local bills for collection - - - Outward foreign bills for collection 9,667,692 753,590,824 779,617,066 Inward local bills for collection - - -Inward foreign bills for collection - - -

9,667,692 753,590,824 779,617,066 Less: Margin - - -

9,667,692 753,590,824 779,617,066

12 Interest income

Loan (general) 2,526,686 196,104,937 30,966,367

SOD - - 1,121,445

LTR loan 148,605 11,533,784 19,918,659

Lease finance - - -

Hire purchase 564,267 43,794,718 59,722,734

Payment against documents - - -

Documentary bills purchased 1,353,034 105,013,695 125,116,889

Others - - -

Interest on loans and advances 4,592,592 356,447,134 236,846,093

Interest on balance with other banks and financial institutions - - -

Interest received from FC account 3,373 261,785 853,361

3,373 261,785 853,361

Total Interest income 4,595,965 356,708,919 237,699,454

13 Interest on deposits, borrowings, etc.

a) Interest paid on deposits 1,538 119,331 -

b) Interest paid on local bank accounts 1,639,914 127,279,499 114,608,821

c) Interest paid on foreign bank accounts 1,322,934 102,677,512 19,725,415

d) Interest paid on Bangladesh Bank - - -

2,964,386 230,076,343 134,334,236

14 Commission, exchange and brokerage

Commission on L/Cs 120,213 9,330,134 6,928,998

Commission on L/Gs 2,928 227,244 -

Commission on export bills 37,881 2,940,106 3,567,123

Commission on bills purchased - - -

Commission on accepted bills 40,536 3,146,116 3,766,777

Commission on OBC, IBC, etc. - - 781

Commission on PO, DD, TT, TC, etc. 1,305 101,286 36,707

Commission for services rendered to issue of shares - - -

Other commission 32,060 2,488,258 2,432,098

234,922 18,233,143 16,732,483

Exchange gain including gain from FC dealings - - -

Brokerage - - -

234,922 18,233,143 16,732,483


400



15 Other operating income

Postage charge recovery 2,587 200,786 194,783 Service & other charge - - - SWIFT charge recovery 10,725 832,378 1,022,430 Miscellaneous earnings 124,150 9,635,711 6,472,133

137,462 10,668,874 7,689,346

16 Salaries and allowances

Basic pay 61,593 4,780,486 5,117,143 Allowances 54,413 4,223,165 4,536,307 Bonus 10,586 821,627 834,875 Unit's contribution to provident fund 5,983 464,369 497,187 Retirement benefits and gratuity - - -

132,575 10,289,648 10,985,512

17 Rent, taxes, insurance, electricity, etc.

Rent, rate and taxes 7,881 611,695 621,867 Insurance 211 16,381 55,291 Power and electricity 2,533 196,626 178,478

10,626 824,702 855,636 18 Postage, stamp, telecommunication, etc.

Postage 717 55,664 81,735 Telegram, telex, fax and e-mail 612 47,527 92,409 Telephone - office 216 16,747 20,983 Telephone - residence - - -

1,545 119,938 195,127

19 Stationery, printing and advertisements, etc.

Office and security stationery 1,171 90,890 85,047 Computer consumable stationery 1,928 149,621 145,036 Publicity and advertisement 68 5,248 55,433

3,166 245,759 285,516

20 Depreciation and repair of Bank's assetsDepreciation Fixed assets 7,696 597,279 636,661 Leased assets - - -

7,696 597,279 636,661 RepairsFurniture and fixtures 102 7,893 - Office equipment 335 25,980 8,510 Vehicle - - - Maintenance 194 15,021 13,055

630 48,894 21,565 8,326 646,173 658,226

21 Other expenses

Security and cleaning 10,796 837,889 957,078 Entertainment 996 77,322 100,565 Bank charge & Commission - - 720,428 Car expenses 3,969 308,071 333,167 Books, magazines and newspapers, etc. 69 5,351 5,658 Travel expenses 1,385 107,469 59,186 Local conveyance, labor, etc. 723 56,136 72,476 Training & internship - - - Other Professional Charges - - - Exgratia 770 59,748 3,543 Miscellaneous expenses 123,539 9,588,307 657,965

142,247 11,040,294 2,910,067


FINANCIAL STATEMENTS(ANNEXURE-L)

PRIME BANK INVESTMENT LIMITED

401

FINANCIAL STATEMENTS(ANNEXURE-L)

PRIME BANK INVESTMENT LIMITED

402


Auditors’ Report To The Shareholdersof Prime Bank Investment Limited

IntroductionWe have audited the accompanying financial statements of Prime Bank Investment Limited, which comprise the Statement of Financial Position as at December 31, 2014 and the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the period then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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


OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank Investment Limited as at December 31, 2014 and its financial performance and its cash flows for the period then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities and Exchange Rules 1987.

We also report that:a) we have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit and made due verification thereof;b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared

from our examination of those books;c) the Statement of Financial Position and the Statement of Comprehensive Income dealt with the report are in

agreement with the books of accounts and returns;d) the expenditure incurred and payments made were for the purpose of the Company’s business for the period;

Dated: February 25, 2015Chartered Accountants Dhaka

403

Prime Bank Investment LimitedStatement of Financial Position As at 31 December 2014

Amount in Taka

31.12.2014 31.12.2013

ASSETS

Non-Current Assets

Property, plant and equipment 12,804,672 17,924,016

Investment in Prime Bank Securities Ltd 37,500,000 37,500,000

Preliminary and pre-operational expenses 2,614,571 3,137,486

Deferred tax asset 344,306 -

Total non-current assets 53,263,549 58,561,502

Current Assets

Advances, deposits and prepayments 6,016,517,292 6,503,380,927

Investment in shares 1,102,855,608 1,066,059,442

Dividend Receivable 4,018,805 4,468,239

Prepaid expenses 765,968 56,168

Advance corporate income tax 7,603,618 15,972,649

Cash and bank balances 32,863,813 87,686,951

Total current assets 7,164,625,104 7,677,624,376

Total Assets 7,217,888,653 7,736,185,876

EQUITY AND LIABILITIESCapital and Reserve

Share capital 3,000,000,000 3,000,000,000

General Reserve 28,002,888 28,002,888

Retained earnings 15,117,108 198,499,857

Total Equity 3,043,119,996 3,226,502,745

Non-current Liabilities

Deferred tax liabilities - 513,315

Total non-current liabilities - 513,315

Current Liabilities

Loan facilities 3,387,911,205 3,788,934,831

Liability for withholding taxes 95,625 79,303

Security deposit receipt 44,100 44,100

Provision for expenses 4,161,269 7,972,785

Provision for investment and margin loan 700,000,000 504,502,037

Corporate income tax payable 8,534,689 29,139,720

Accounts payable 673,694 601,331

Dividend payable 10 10

Other payables 74,348,064 177,895,701

Total current liabilities 4,175,768,656 4,509,169,818

Total Equity and Liabilities 7,217,888,653 7,736,185,878

Chief Executive Officer

Chartered Accountants Dated: 25 February 2015Dhaka

Director Vice Chairperson

404


Prime Bank Investment LimitedStatement of Comprehensive Income for the year ended 31 December 2014

Amount in Taka

Jan-Dec’14 Jan-Dec’13INCOME

Interest income 391,826,475 455,964,116

Settlement fee 53,211,749 45,258,899

Management fee 19,872,877 21,232,690

Gain on sale of shares 29,691,761 252,033,568

Dividend on shares 31,836,370 24,160,056

Underwriting commission 539,612 225,000

Issue management fee 100,000 50,000

Bank interest on STD accounts 3,201,399 5,601,605

Documentation fees 19,000 17,000

530,299,243 804,542,934

EXPENDITURE

Interest expenses 452,709,342 568,950,077

Settlement and other fees 6,565,430 6,260,808

Salary and allowances 28,775,522 31,576,176

Rent, Taxes, Insurance and Electricity 7,993,200 7,649,825

Legal & Professional expenses 238,050 125,525

Postage, Stamp and Telecommunication 995,916 1,512,472

Stationery, Printing and Advertisement 1,308,710 932,710

Directors remuneration 239,250 59,450

Auditor's fee 115,000 115,000

Depreciation, Amortisation and Repair of assets 6,428,119 6,263,540

Entertainment, Travelling & Conveyance 1,261,030 1,895,940

Security expense 2,021,006 1,991,839

Other expenses 1,559,232 1,475,824

Interest waiver to affected small investors 1,299,153 7,218,567

510,508,960 636,027,753

Profit before provision and tax 18,790,283 168,515,181

Less: Provision for investment and margin loan 195,497,963 -

Profit before tax (176,707,681) 168,515,181

Less: Tax expenses 7,675,068 28,500,742

Current Tax expense 8,532,689 29,190,904

Deferred Tax expense/(income) (857,621) (690,162)

Profit after tax (184,382,749) 140,014,439

Earnings per share (0.61) 0.47


Chartered Accountants Dated: 25 February 2015Dhaka


405

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Prime Bank Investment LimitedStatement of Cash Flows for the year ended 31 December 2014

Amount in Taka

2014 2013

Cash Flows from Operating Activities:

Cash generated from operations (46,500,419) 414,413,028

Advance Income Tax (630,000) (11,000,000)

Payment for withholding taxes (2,413,975) (2,403,750)

Advance deposit (200,000) (117,588)

Income tax paid (13,370,988) (136,261,037)

Net cash used operating activities (63,115,382) 264,630,653

Cash Flows from Investing Activities:

Purchase of property, plant and equipment (261,300) (472,560)

Sale of shares during the year 303,379,894 403,555,453

Purchase of shares during the year (128,424,862) (70,270)

Margin Loan recovered 198,243,148 214,625,214

Net cash from investing activities 372,936,880 617,637,837

Cash Flows from Financing Activities:

Proceeds/(Repayments) of loan facilities (364,644,636) (645,000,000)

Dividend paid - (239,999,996)

Net cash used in financing activities (364,644,636) (884,999,996)

Net Cash Inflow/(Outflow) for the Year (54,823,138) (2,731,507)

Opening cash and bank balances 87,686,951 90,418,458

Closing cash and bank balances 32,863,813 87,686,951


Dated: 25 February 2015Dhaka


FINANCIAL STATEMENTS(ANNEXURE-M)

PRIME BANK SECURITIES LIMITED

407

FINANCIAL STATEMENTS(ANNEXURE-M)

PRIME BANK SECURITIES LIMITED

408


Auditors’ Report To The ShareholdersPrime Bank Securities Limited

IntroductionWe have audited the accompanying financial statements of Prime Bank Securities Limited, which comprise the Statement of Financial Position as at December 31, 2014 and the Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Financial Statements for the period then ended, and a summary of significant accounting policies and other explanatory information.

Managements’ responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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


OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of Prime Bank Securities Limited as at December 31, 2014 and its financial performance and its cash flows for the period then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs), the Companies Act 1994 and Securities and Exchange Rules 1987.

We also report that:a) we have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit and made due verification thereof;b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared

from our examination of those books;c) the Statement of Financial Position and the Statement of Comprehensive Income dealt with the report are in

agreement with the books of accounts and returns;d) the expenditure incurred and payments made were for the purpose of the Company’s business for the period;

Dated: February 22, 2015Chartered Accountants Dhaka

409

Prime Bank Securities LimitedStatement of Financial Position as at 31 December 2014

Amount in Taka

31.12.2014 31.12.2013

ASSETS

Non-Current Assets 666,785,887 670,155,631

Property, plant and equipment 2,021,974 5,243,558

Intangible assets 606,497 912,072

Deferred tax 157,415 -

Investment in DSE and CSE Shares 664,000,000 664,000,000

Current Assets 535,558,155 659,755,776

Advances, deposits and prepayments 38,975,388 31,514,980

Investment in Securities 87,628,861 81,550,534

Accounts receivable 12,350,022 13,137,599

Cash and Bank balances 14,974,084 134,764,255

Loan to Customers 381,629,800 398,772,908

Other assests - 15,500

Total Assets 1,202,344,042 1,329,911,407

EQUITY AND LIABILITIES

Shareholder’s Equity 767,484,333 799,055,787

Share capital 750,000,000 750,000,000


Non-current Liabilities - 233,839

Deferred tax - 233,839

Current Liabilities 434,859,709 530,621,780

Security deposit 112,820 265,370

Accounts payable 17,750,107 150,475,274

Loan from bank 371,066,787 338,010,202

Other Liabilities & Provisions 45,929,995 41,870,934

Total Equity and Liabilities 1,202,344,042 1,329,911,407


Chartered Accountants Dated: February 22, 2015Dhaka

Director Chairman

410


Prime Bank Securities LimitedStatement of Comprehensive Income for the year ended 31 December 2014

Amount in Taka 31.12.2014 31.12.2013

INCOME

Commission income 30,121,613 31,572,380 Interest income 11,667,012 67,578,007 Gain on sale of shares 386,861 2,868,559 Dividend income 2,257,010 1,430,440 Other income 971,313 569,922

45,403,809 104,019,308 EXPENDITURES

Operating Expenses 22,992,826 24,731,443 Financial Expenses 46,349,449 48,648,446 Direct Expenses 4,287,514 4,455,387

73,629,789 77,835,276

Profit before provision and tax (28,225,980) 26,184,032 Less: Provisions 3,246,640 1,302,164 Provision for diminution in value of investment in shares (428,503) (51,962) Provision for investment and clients' margin loan 3,675,143 1,354,126

Profit before tax (31,472,620) 24,881,868 Less: Tax Expenses 98,834 8,922,800 Current Tax 490,088 9,337,871 Deferred Tax (391,254) (415,071)Profit after tax (31,571,454) 15,959,069

Earning per share (0.42) 0.21


Chartered Accountants Dated: February 22, 2015Dhaka

Director Chairman

411

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Prime Bank Securities LimitedStatement of Cash Flows for the year ended 31 December 2014


Cash flow from operating activities

Net profit during the year (31,571,454) 15,959,069

Add: Amount considered as non-cash itemsDepreciation & amortization charged 2,633,263 2,607,827 Write off of preliminary expenses 15,500 614,121 Dividend receipts (1,782,450) (969,400)Provision for diminution in value of investment (428,503) (51,962)Provision for negative equity under margin loan 3,675,143 1,354,126

4,112,953 3,554,712 Changes in working capital

(Increase)/decrease in advances, deposits and prepayments (20,000) 82,500 (Increase)/decrease in advance income tax (7,440,408) (31,283,680)(Increase)/decrease in investments in securities (6,078,327) (4,498,684)(Increase)/decrease in accounts receivable 787,577 (5,478,679)(Increase)/decrease in loans to customers 17,143,108 5,256,792 (Increase)/decrease in deferred tax (391,254) (415,071)Increase/(decrease) in current tax 490,088 9,337,871 Increase/(decrease) in provision for expenses 322,333 50,405 Increase/(decrease) in accounts payable (132,877,717) 135,807,449 Increase/(decrease) in secured overdraft 33,056,585 (14,268,227)(Increase)/decrease in other assets - (15,500)

(95,008,016) 114,143,715

Net cash flows from operating activities (122,466,517) 133,657,495

Cash flow from investing activitiesFixed assets acquisition 893,896 (53,380)Net cash flows from investing activities 893,896 (53,380)

Cash flows from financing activitiesDividend receipts 1,782,450 969,400 Net cash from financing activities 1,782,450 969,400

Net cash increase / (decrease) (119,790,171) 134,573,515 Cash and cash equivalents at the beginning of the year 134,764,255 190,740 Cash and cash equivalents at the end of the year 14,974,084 134,764,255

Cash in hand 25,000 7,011 Cash at Bank 14,949,084 134,757,244

14,974,084 134,764,255


Dated: February 22, 2015Dhaka

Director Chairman

413

FINANCIAL STATEMENTS(ANNEXURE-N)

PRIME EXCHANGE CO. PTE. LTD.,SINGAPORE

414


Independent Auditor’s Reportto the Member of Prime Exchange Co. Pte. Ltd.

Report on the Financial StatementsWe have audited the accompanying financial statements of Prime Exchange Co. Pte. Ltd. (the “Company”), which comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and balance sheet and to maintain accountability of assets.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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


OpinionIn our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company as at 31 December 2014 and of the results, changes in equity and cash flows of the Company for the financial year ended on that date.

Report on Other Legal and Regulatory RequirementsIn our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act

C. C. YANG & CO.PUBLIC ACCOUNTANTS AND CHARTERED ACCOUNTANTS

SINGAPORE11 February 2015

415

Prime Exchange Co. Pte. Ltd.Statement of Comprehensive Income for the year ended 31 December 2014

(Expressed in Singapore Dollars)

2014 2013

$ $

Revenue

Commission Income 628,295 627,720

Other Items of Income

Other Income 16,302 16,251

Foreign Currency Gains 575,663 276,247

Other Items of Expense

Employee Benefits Expense (359,890) (341,600)

Depreciation (52,711) (59,440)

Other Expenses (538,221) (419,383)

Profit Before Tax from Continuing Operations 269,438 99,795

Income Tax Expense ( 14,088) (5,440)

Profit from Continuing Operations, Net of Tax 255,350 94,355

Other Comprehensive Income

Other Comprehensive Income, Net of Tax - -

Total Comprehensive Income $ 255,350 $ 94,355

416


Prime Exchange Co. Pte. Ltd. Statement of Financial Position as at 31 December 2014


2014 2013

$ $

ASSETS

Non-Current Assets

Property, Plant and Equipment 61,974 100,324

Total Non-Current Assets 61,974 100,324

Current Assets

Other Receivables 69,990 69,990

Prepayments 11,528 8,050

Cash and Bank Balances 1,144,279 874,745

Total Current Assets 1,225,797 952,785

Total Assets $ 1,287,771 $ 1,053,109

EQUITY AND LIABILITIES

Equity

Share Capital 250,000 250,000

Retained Earnings 583,017 422,022

Total Equity 833,017 672,022

Non-Current Liabilities

Deferred Tax Liabilities 6,429 9,728

Total Non-Current Liabilities 6,429 9,728

Current Liabilities

Trade and Other Payables 431,277 367,066

Tax Payable 17,048 4,293

Total Current Liabilities 448,325 371,359

Total Liabilities 454,754 381,087

Total Equity and Liabilities $ 1,287,771 $ 1,053,109

417

Prime Exchange Co. Pte. Ltd. Statement of Changes in Equity for the year ended 31 December 2014


Total Share Capital

Retained Earnings

$ $ $

Balance at 1.1.2014 672,022 250,000 422,022

Distributions to Owner

Dividends (94,355) (94,355)

Total Distributions to Owner (94,355) (94,355)

Total Comprehensive

Income for the Year - 2014 255,350 255,350

Balance at 31.12.2014 $ 833,017 $ 250,000 $ 583,017

Balance at 1.1.2013 719,778 250,000 469,778

Distributions to Owner

Dividends (142,111) - (142,111)

Total Distributions to Owner (142,111) - (142,111)

Total Comprehensive Income for the Year - 2013 94,355 - 94,355

Balance at 31.12.2013 $ 672,022 $ 250,000 $ 422,022

418


Prime Exchange Co. (Pte.) Ltd.Statement of Cash Flows for the year ended 31 December 2014


2014 2013

$ $

Cash Flows From Operating Activities

Profit Before Income Tax 269,438 99,795

Total Adjustments 52,711 59,440

Depreciation 52,711 59,440

Operating Profit Before Working Capital Changes 322,149 159,235

Increase in Other Receivables - (232)

Prepayments (3,478) (735)

Increase in Trade and Other Payables 64,211 210,754

Cash Flows Generated From Operations 382,882 369,022

Income Tax Paid (4,632) (7,500)

Net Cash Flows From Operating Activities 378,250 361,522

Cash Flows From Investing Activities

Purchase of Property, Plant and Equipment (14,361) (81,660)

Decrease in Amount Due From Holding Company - 13,676

Net Cash Flows Used In Investing Activities (14,361) (67,984)

Cash Flows From Financing Activities

Dividends Paid on Ordinary Shares (94,355) (142,111)

Net Cash Flows Used In Financing Activities (94,355) (142,111)

Net Increase in Cash and Cash Equivalents 269,534 151,427

Cash and Cash Equivalents at Beginning of Year 874,745 723,318

Cash and Cash Equivalents at End of Year $ 1,144,279 $ 874,745

FINANCIAL STATEMENTS(ANNEXURE-O)

PBL EXCHANGE (UK) LTD.

419

FINANCIAL STATEMENTS(ANNEXURE-O)

PBL EXCHANGE (UK) LTD.

420


PBL Exchange (UK) LimitedIndependent Auditor’s Reportto the Members of PBL Exchange (UK) LimitedWe have audited the financial statements of PBL EXCHANGE (UK) LIMITED for the year ended 31 December 2014 set out on pages 5 to 11. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditorsAs explained more fully in the Directors’ Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.

Opinion on financial statementsIn our opinion the financial statements: � give a true and fair view of the state of the company’s affairs as at 31 December 2014 and of its loss for the year then

ended; � have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and � have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: � adequate accounting records have not been kept, or returns adequate for our audit have not been received from

branches not visited by us; or � the financial statements are not in agreement with the accounting records and returns; or � certain disclosures of directors’ remuneration specified by law are not made; or � we have not received all the information and explanations we require for our audit; or � the directors were not entitled to prepare the financial statements and the directors’ report in accordance with

the small companies regime.

Mrs. Seema Siddiqui (Senior Statutory Auditor)for and on behalf of Reddy Siddiqui & Kabani Chartered Accountants Statutory Auditor

15 February 2015

Park View

183-189 The Vale Acton

London

W3 7RW

421

PBL Exchange (UK) LimitedProfit and Loss Account for the year ended 31 December 2014

Period ended31 December

2014

Year ended31 December

2013

£ £

Turnover 358,535 330,858

Administrative expenses (373,832) (364,551)

Operating loss (15,297) (33,693)

Interest payable and similar charges (6) (4)

Loss on ordinary activities before taxation (15,303) (33,697)

Tax on loss on ordinary activities - -

Loss for the year (15,303) (33,697)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

There are no recognised gains and losses other than those passing through the profit and loss account.

422


PBL Exchange (UK) LimitedBalance Sheet

as at 31 December 2014

2014 2013

£ £ £ £

Fixed assets

Tangible assets 120,721 132,303

Current assets

Cash at bank and in hand 223,333 283,684

Creditors: amounts falling due within one year (245,807) (302,435)

Net current liabilities (22,474) (18,751)

Total assets less current liabilities 98,247 113,552

Capital and reserves

Called up share capital 500,000 500,000

Profit and loss account (401,753) (386,448)

Shareholders' funds 98,247 113,552

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

Approved by the Board and authorised for issue on 15 February 2015

Prof. Ainun NishatDirector Md Shirajul Islam Mollah

Director

423

PBL Exchange (UK) LimitedCash Flow Statement for the year ended 31 December 2014

Period ended31 December

2014

Year ended31 December

2013

£ £ £ £

Net cash inflow/(outflow) from operating activities 50,102 (255,807)

Returns on investments and servicing of finance

Interest paid (6) (4)

Net cash outflow for returns on investments and servicing of finance (6) (4)

Capital expenditure

Payments to acquire tangible assets (1,731) -

Net cash outflow for capital expenditure (1,731) -

Net cash inflow/(outflow) before management of liquid resources and financing 48,365 (255,811)

Increase/(decrease) in cash in the year 48,365 (255,811)

424

A n n uA l R e p o R t 2 0 1 4A n n uA l R e p o R t 2 0 1 4

424

425

FINANCIAL STATEMENTS(ANNEXURE-P)

PBL FINANCE (HONG KONG) LTD.

426


Independent Auditor’s Reportto the Shareholders of PBL Finance (Hong Kong) Limited(Incorporated in Hong Kong with limited liability)

We have audited the financial statements of PBL Finance (Hong Kong) Limited (“the Company “ ) set out on pages 5 to 16, which comprise the statement of financial position as at 31st December, 2014, and statement of income and retained earnings and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Financial StatementsThe directors are responsible for the preparation of financial statements that give a true and fair view in accordance with the Hong Kong Financial Reporting Standard for Private Entities issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Our report is made solely to you, as a body, in accordance with Section 80 of Schedule 11 to the new Hong Kong Companies Ordinance (Cap. 622), and for no other purpose. We do not assume responsibility toward or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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


OpinionIn our opinion, the financial statements give a true and fair view of the state of the Company’s affairs as at 31st December, 2014, and of its profit and cash flows for the year then ended in accordance with the Hong Kong Financial Reporting Standard for Private Entities and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

T. 0. Yip & Co. LimitedCertified Public Accountants (Practising) Hong Kong

Yip Tak On, GeorgePractising Certificate Number : P00301

Date : 07 February 2015

427

PBL Finance (Hong Kong) LimitedStatement of Income and Retained Earningsfor the year ended 31st December, 2014

2014 2013

HK$ HK$

Interest income 8,412,464 8,012,647

Interest expenses (2,562,328) (2,879,048)

Net interest income 5,850,136 5,133,599

Other operating income 5,425,926 4,457,709

Total operating income 11,276,062 9,591,308

Staff costs (2,974,550) (2,304,613)

Depreciation (197,210) (104,396)

Other operating expenses (1,525,677) (1,158,499)

Total operating expenses (4,697,437) (3,567,508)

Profit before taxation 6,578,625 6,023,800

Income tax expense (1,083,089) (986,273)

Profit for the year 5,495,536 5,037,527

Retained earnings at start of year 5,037,527 4,635,624

Dividends (5,037,527) (4,635,624)

Retained earnings at end of year 5,495,536 5,037,527

428


PBL Finance (Hong Kong) LimitedStatement of Financial Positionas at 31st December, 2014

2014 2013

HK$ HK$

Non-current assets

Property, plant and equipment 227,628 286,175

Current assets

Discounted bills receivable 229,651,539 241,716,631

Deposits, prepayments and other receivables 347,966 323,572

Cash and bank balances 849.546 1,504,980

230,849,051 243,545,183

Current liabilities

Accrued liabilities and other payables 2,699,327 2,012,001

Amount due to ultimate holding company 219,297,000 233,118,600

Income tax payable 84.816 163.230

222,081,143 235,293,831

Net current assets 8,767,908 8,251,352

8,995,536 8,537,527

Equity

Share capital 3,500,000 3,500,000


8,995,536 8,537,527

The financial statements were approved and authorised for issue by The Board of Directors on 07 February 2015

Director DirectorDirector Director

429

PBL Finance (Hong Kong) LimitedNotes to Statement of Cash Flows for the year ended 31st December, 2014

2014 2013

HK$ HK$

Operating activities

Profit before taxation 6,578,625 6,023,800

Adjustments for :

Property, plant and equipment written off - 4,012

Depreciation 197,210 104,396

Operating profit before changes in working capital 6,775,835 6,132,208

Decrease/(Increase) in discounted bills receivable 12,065,092 (123,474,085)

Increase in deposits, prepayments and other receivables (24,394) (154,737)

Increase in accrued liabilities and other payables 687,326 989,049

(Decrease)/Increase in amount due to ultimate holding company (13,821,600) 122,928,000

Net cash generated from operation 5,682,259 6,420,435

Tax paid (1,161,503) (1,728,124)

Net cash generated from operating activities 4,520,756 4,692,311

Investing activities

Purchase of property, plant and equipment (138,663) (300,963)

Net cash used in investing activities (138,663) (300,963)

Financing activities

Issue of shares - 568,000

Dividend paid to equity shareholders of the Company (5,037,527) (4,635,624)

Cash used in from financing activities (5,037,527) (4,067,624)

Net (decrease)/increase in cash and cash equivalents (655,434) 323,724

Cash and cash equivalents at start of year 1,504,980 1,181,256

Cash and cash equivalents at end of year 849,546 1,504,980

Analysis of cash and cash equivalents

Cash and bank balances 849,546 1,504,980

430


Some PBL Activities During 2014

Agreement signing with IFC for $ 70 Million Short Term Finance

Signing of Agreement with FMO

Launching of “Anchol” an Women Entrepreneurs’ Loan Product under SME Loans

Winners of Prime Bank Art Competition

19th Anniversary Celebration

Launching of Low Interest Loans under the Refinancing Scheme

Signing of MoU with Bangkok Hospital

Appointment of Mr. Fahad, youngest FIDE Master as PBL Brand Ambassador

431

Distribution of Winter Clothing

Inauguration of Prime Bank Cup Golf Tournament

Agreement signing with NOVOAIR

Prime Bank officials paying homage to war heroes on Victory day.

Annual Managers’ Conference

Prime Bank’s Medical Camp at Biswa Ijtema Premises

Closing ceremony of the 73rd Foundation Training Course for the MTs

Signing of MoU with Hotel Agrabad

432


Opening of Heyako Bazar Branch, Fatikchhari

Opening of Magura Branch

Opening of Sherpur Branch

Prime Bank Gets ICMAB Best Bank Award in the Private Commercial Bank (Traditional Operation) Category

Prime Bank Receives Remittance Award

Opening of Patuatuli Branch, Dhaka.

Gallery of some Significant Events in 2014

433

Bashabo BranchShapnil (2nd & 3rd Floor), 60-61 South Bashabo, DhakaPhone: (02) 7219201, Direct: (02) 7219206Fax: (02) 7219205 Bashundhara BranchBaitulAman Tower (1st Floor), Boshundhara Project, Block-B, Plot# 236, P.S-Cantonment, DhakaPhone: PABX: (02) 8845214, 8845213, Direct: (02) 8845215Fax: (02) 8845214 Bhairab Branch181, Tin Potty Road, BhairabPaw-rashava, Bhairab, KishoregonjPhone: PABX: 02-9470723, 9470771Fax: 02-9471755 Bijoy Nagar BranchAkram Tower (1st floor), 15/5, Bijoy Nagar (SayedNazrul Islam Saroni), Dhaka-1000Phone: (02) 9335762, 9335732, 9334123Fax: 02-9332639 Boalmari BranchAzahar Tower, Holding 503, Station Road, Ward # 03, Boalmari, FaridpurPhone: 06324-56132, 06324-56130Fax: 06324-56139 Damudya BranchHolding # 264 (1st & 2nd floor), Ward # 8, Sonali Bank Road, Damudya, ShariatpurPhone: (06023) 56396Fax: (06023) 56390 Dhanmondi BranchMomtaz Plaza (1st floor), House No # 7, Road No # 4, Dhanmondi R/A, DhakaPhone: (02) 8622304, 9662704Fax: (02) 9662705

Elephant Road BranchAnanta Plaza, 136, Elephant Road, Dhaka-1205

Phone: (02) 9662776-7, 9673783Fax: 88-02-8622591Swift: PRBLBDDH011

Faridpur BranchKMA Arcadia (1st floor), Holding # 60/116(A), Moirapotty, FaridpurPhone: (0631) 65133Fax: (0631) 65128

Foreign Exchange BranchAl-Haj Mansion, 82, Motijheel C/A, Dhaka -1000, Phone: (02) 9551682, Direct: (02) 7161146Fax: 88-02-9553078Swift: PRBLBDDH019

Ganakbari BranchSomsher Plaza (1st Floor), Balibhadra Bazar Bus Stand, Dhamsona, Ganak-bari, Savar, Dhaka-1340Phone: (02) 7789379, 7788100Fax: 02-7789378Swift: PRBLBDDH014

Gareb-E-Newaz Avenue BranchGareb-E-Newaz Branch Holding # 1, Gareb-E-Newaz Avenue Sector # 11, Uttara R/A, DhakaPhone: (02) 8950997, 8991781Fax: (02) 8931687

Gulshan BranchPlot # 01, Block # CEN (H), Road # 109, Gulshan Avenue, Dhaka-1212Phone: (02) 9886171, 8815885Fax: 02-9884977Swift: PRBLBDDH016

Hemayetpur BranchMadhuBhaban, Singair Road, Hemayetpur, Savar, Dhaka.Phone: (02) 7742096, 01730781154 (HOB), Fax: (02) 7742096 IBB Dilkusha Branch19, Dilkusha C/A, Dhaka -1000.Phone: (02) 9587494, 9577582, 9576414Fax: 02-9567228Swift: PRBLBDDH005

Dhaka Division

Adamjee EPZ BranchAdamjeeEPZ, Holding # 4Siddirganj, NarayanganjPhone: (02) 7692025-26, 7692024Fax: (02) 7692027Swift: PRBLBDDHAEZ

Asad Gate BranchFamily World Tower, 2/6, Sir Sayed Road, Ward # 42, Mohammadpur (Mirpur Road), DhakaPhone: (02) 9125400, 8142106, 8142134, Fax: (02) 9122640

Ashulia BranchSherif Mansion (1st floor), Diakhali, Jamgora Bazar, Ashulia, Savar, DhakaPhone: (02) 7788290, 7788326, 7788325,Fax: (02) 7788291

Banani BranchHouse # 62, Block # E, Kemal Ataturk Avenue, Banani, Dhaka-1213Phone: (02) 8815754, 9889868Fax: 02-8853616Swift: PRBLBDDH020

Banasree BranchArcadia (Ground Floor and 1st Floor), Plot No.-14, Block No.-C, Main Road, Banasree, Dhaka.Phone: (02) 8399548, 8399591Fax: (02) 8399547

Bangshal Branch43/44 Malitola, North South Road, Bangshal, Dhaka-1100Phone: (02) 9561501, 7123480, 7113310,Fax: 7175185Swift: PRBLBDDH026

Baridhara BranchConcord I-K Tower (1st Floor)Plot# 02, Block# CEN(A) NorthAvenue, Gulshan-2 Dhaka-1212Phone: (02) 9850376, (02) 9850392, 01730781181 (HOB)Fax: (02) 9850384

Branchnetwork

434


IBB Mirpur BranchMamoni Tower, 1244, East Monipur, Begum RokeyaSarani, Mirpur, Dhaka-1216Phone: (02) 8057681-2, 8058371Fax: 88-02-8075441 Ibrahimpur BranchSumonaSahadat Center, 80, Ibrahimpur, Kafrul, Dhaka-1206Phone: Direct: 02-8872557, PABX: 02-8872503, 8872423Fax: 02-8872501

Jamalpur BranchJibon Mansion,Station Road, Jamalpur.Phone: (0981) 65360, (0981) 65 361Fax: (0981) 65362 Jatrabari BranchNur Tower, 76/Ga, BibirBagicha, North Jatrabari, Dhaka-1204Phone: (02) 7552158, (02) 7552178Fax: (02) 7552169

JoydevpurChowrasta BranchShapla Mansion (1st Floor), Joydev-purChowrasta, Chandana Dha-ka-Tangail Road, GazipurPhone: (02) 9264135, 9264103Fax: 88-02-9264097 Joypara BranchAzahar Ali Mozahar Ali Shopping Complex (1st floor) Joypara,LotakholaDohar, Dhaka.Phone: 02-7768055, 02-7768053, 02-7768054Fax: 02-7768052 Kawran Bazar Branch54, Kawran Bazar C/A, Dhaka-1215Phone: (02) 8157288, 9124296-7Fax: 88-02-9129004Swift: PRBLBDDH010 Kishoregonj BranchShamsuddinBhuiyan Plaza, Teripotty, KishoregonjPhone: (0941) 62590,Direct: (0941) 62592Fax: (0941) 62591 Madhabdi BranchPlot # 17, Madhabdi Bazar, Narsingdi-1604Phone: (06251) 56682Fax: 88-06257-56683

Mirpur-1 BranchRabiul Plaza (1st Floor), Plot # Shee-1/Kha, Section -1, Mirpur, Dhaka-1216Phone: (02) 8034126, 8034590Fax: (02) 8034591 Mirzapur BranchRashid BiponiBhaban, 706, College Road, Mirzapur, Tangail.Phone: (09229) 56591, Direct: (09229) 56592Fax: (09229) 56593 Modhukhali BranchModhuban Shopping Mall (1st Floor) Modhukhali, FaridpurPhone: 0632656017 (Direct), 0632656018 (PABX)Fax: 0632656019 Mohakhali Branch69, Mohakhali C/A, Dhaka-1212Phone: (02) 9850302, 9882291Fax: 88-02-9886052Swift: PRBLBDDH007 Motijheel BranchAdamjee Court Annex Building -2, 119-120, Motijheel C/A, Dhaka-1000Phone: (02) 7175491-2, 9567225, 9562982Fax: 88-02-9567223Swift: PRBLBDDH001 Mouchak BranchManhattan Tower (1st Floor), 83, Siddheswari Circular Road, Malibagh, Dhaka-1217Phone: (02)8352831, 9347757Fax: 88-02-9338883Swift: PRBLBDDH013 Moulvi Bazar Branch77/4, Moulvi Bazar, Dhaka-1100Phone: (02) 7313407, 7311017Fax: 88-02-7318305Swift: PRBLBDDH003 Mymensingh Branch10, Swadeshi Bazar, MymensinghPhone: PABX: (091) 52390, Direct: (091) 52391Fax: (091) 52391 Narayanganj BranchModern Model Complex, 56, S.M. Maleh Road, Narayanganj-1400Phone: (02) 764689, 7630150Fax: 02-7630140Swift: PRBLBDDH012

New Eskaton Branch133, New Eskaton Road, Dhaka - 1000Phone: (02) 9354044, 9354738, 9359683Fax: 88-02-9354826 Pallabi BranchSetarasDream (1st Floor), Holding No: 1/11 & 1/12, Pallabi, Mirpur, DhakaPhone: PABX: (02) 9000559, 9001913, Direct: (02) 9013629Fax: (02) 9001813 Panthapath BranchFiroz Tower, 152/3-B, Green Road, Panthapath, Dhaka-1205Phone: (02) 9142879, 8128100, 8152852Fax: 02-9137887 Patuatuly BranchBishal Hafiz Market, Holding # 10(1st & 2nd Floor) Wise Ghat Road, Patuatuly, Dhaka-1100Phone: (02) 7343474, 01766675393, 01766675384 PragatiSarani BranchFacilities Tower, Kha-199/2, MaddhyaBadda, DhakaPhone: (02) 9840689, 8816938, 9840685Fax: 02-8837531 Ring Road BranchBaitulAman Tower (1st Floor), Holding No: 840-841, Uttar Adabor, DhakaPhone: PABX: (02) 8158866, Direct: (02) 9129093Fax: (02) 8117010 Satmasjid Road BranchHouse # 99, Road # 11/A, Dhanmondi R/A, Dhaka-1209Phone: (02) 9122374, 8124258, 8153556Fax: (02) 8121652Swift: PRBLBDDH023 Savar BranchKK Plaza (1st floor), Holding # A-91, Word # 5, Savar Bazar Road, Savar, DhakaPhone: (02) 7744862, Direct: (02) 7744861Fax: (02) 7744863

435

SBC Tower BranchSadharanBima Tower (Ground Floor) 37/A, Dilkusha C/A, DhakaPhone: (02) 9561221, 9559943Fax: 88-02-9564189Swift: PRBLBDDH024 Serajdikhan BranchHaji Mostafa Plaza (1st floor),Dag # 284, Bazar Road,Serajdikhan, Munshigonj.Phone: 02-7628320, 7628330Fax: 02-7744863

Shibpur BranchKhan Tower (Ist Floor),Shibpur Bazar, NarsingdiPhone: 06256-75130, 06256-75131Fax: 06256-75134 Shimrail BranchHazi A Rahman Super Market & Shopping Tower (1st Floor), Holding # 96, ShimrailMorr, Chit-tagong Road Chowrastha, Shanar-par, Siddirgonj, NarayangonjPhone: (02) 7691670, 7692912Fax: (02) 7691671

Sreenagar BranchRahman ComplexSreenagar Bazar MunshigonjPhone: 01730781191 (HOB) Tangail BranchHolding No: 414-417,Main Road, TangailPhone: PABX: (0921) 61248, 61271, Direct: (0921) 61330Fax: (0921) 61322

Tejgaon BranchShanta Western Tower,Level-02, 186, BirUttam Mir ShawkatSarak, Dhaka-1208Phone: 02-8879157-8, 02-8879160Fax: 02-8879156 Tongi BranchSenaKalyan Commercial Complex (1st Floor), Plot # 9, Block #F, Tongi, GazipurPhone: (02) 9813811, 9813874Fax: (02) 9813835

Uttara BranchSiaam Tower (1st Floor), Plot # 15, Sector # 03, Dhaka Mymensingh Road, Uttara Model Town, DhakaPhone: (02) 8916233, 8950341-2,

Direct: (02) 8950016Fax: (02) 8924248Swift: PRBLBDDH021 Wari BranchTanin Roseate (1st floor), 43 Ranking Street, Wari, Dhaka.Phone: (02) 9512085, 7118311, 7118169Fax: (02)9512084

Chittagong Division

Agrabad BranchB.M Height (1st Floor) 318, Sheikh Mujib Road Agrabad, Badamtoli Chittagong.Phone: (031) 716724-5, 7207018Fax: 88-031-718971Swift: PRBLBDDH015 Ashugonj BranchSeriyaSayed Tower, Post office Road, Ashugonj Bazar, Ashugonj, BrahmanbariaPhone: 08528-74596, 74595Fax: (08528)74594 Banshkhali BranchG.S. Plaza (1st floor), Chittagong-Banshkhali Highway, BanshkhaliPaw-rashava, Banshkhali, ChittagongPhone: (0303) 756222Fax: (0303) 756223 Bhatiary BranchKhalek Tower (1st & 2nd Floor)Bhatiary (Uttar Bazar), Sitakunda, Chittagong.Phone: 031-2781261, 2781263Fax: 031-2781262 Brahmanbaria Branch1st Floor, K. Das BhabanK. Das Square, BrahmanbariaPhone: 0851-61698, 0851-61699Fax: 0851-58849 Chauddagram BranchAbdul Goni Shopping Complex(1st floor), Chowddgram Bazar, ComillaPhone: (08020) 56364Fax: (08020) 56362 Chaumuhani BranchHolding # 180-182 (1st floor), Feni Road, Chowmuhani, Begumganj, Noakhali.Phone: (0321) 54096Fax: (0321) 56096

Comilla BranchHolding No: 10/8, Ward#12, Chatpatty (Gangagonj), Kotowali, ComillaPhone: (081) 72611, 72612, 72610Fax: (081) 72646 Cox’s Bazar BranchHajera Shopping Center, Holding # 256, Main Road, Cox’s BazarPhone: (0341) 51085Fax: (0341) 51084 Dagonbhuiyan BranchR.B Plaza, 391 FazilerGhat,Dagonbhuiyan, FeniPhone: (03323) 79248, 79249Fax: (03323) 79250 Fatickchari BranchHaji Hossain Plaza (1st Floor), College Road, Bibirhat, Dhurang Union, Fatickchari, ChittagongPhone: (03022) 56006Fax: (03022) 56006 Feni BranchKazi Center, Holding No: 106, S.S.K. Road, FeniPhone: (0331) 63091, 63093, 63092Fax: (0331) 63092 Hajigonj BranchAnanda Complex, Holding # 191, Hajiganj Bazar, Hajiganj,ChandpurPhone: (08424) 75110, 75111Fax: (08424) 75111 Halishahar BranchNandita House (1st & 2nd Floor), Plot No. # 5/A, Lane # 2, Road # 2, Block # G, Halishahar Housing Estate, Double Mooring, ChittagongPhone: (031) 2512039, 2512064Fax: (031) 2512054 Hathazari BranchN. Zahur Shopping Center (1st Floor) Kachari Road, Hathazari, ChittagongPhone: (031) 2601524, 2601525Fax: 88-031-2601526 IBB O. R. Nizam Road BranchO.R. Nizam Road, Hazrat Garibullah City Corporation Bhaban (Ist Floor), 739/804 CDA Avenue, Bagmoniram, ChittagongPhone: (031) 639855, 2861437Fax: 031-2861434Swift: PRBLBDDH027

436


IBB Pahartali BranchB S Plaza, Plot # 305/1390, Abdul Ali Hat, Sorai Para, AlankerMorr, Pahartali, ChittagongPhone: (031) 753143, 2771752Fax: (031) 753144 Jubilee Road BranchPedrollo Plaza, 5, Jubilee Road,Chittagong -4000Phone: (031) 613939, 2850319Fax: 031-618689Swift: PRBLBDDH017

Karnaphuli EPZ BranchKarnaphuli Export Processing Zone, North Patenga, ChittagongPhone: (031) 2502382, 2502381Fax: (031) 2502383 Keranihat BranchHaziUlamia Market Keranihat, Satkania, ChittagongPhone: 03036-56134, 03036-56133Fax: 03036-56135

Khatungonj Branch142, Chand Mia Lane, Khatungonj, Chittagong-4000Phone: (031) 623213-14, 627297Fax: 031-610848Swift: PRBLBDDH002 Laldighi East Branch8, Laldighi East, ChittagongPhone: (031) 2850771, 2850773Fax: (031) 2850772Swift: PRBLBDDH025

Muradpur BranchShah Alam Plaza, 129, CDA Avenue, Muradpur, ChittagongPhone: 031-2557826, 2557824Fax: 031-2557825 Oxygen More Branch405 Sekander Center, Chittagong Cantonment, Oxygen More, ChittagongPhone: (031) 2583181, 2583180Fax: (031) 2583180

Prabartak More Branch12/12 O.R. Nizam Road, Prabartak More, Panchlish, ChittagongPhone: (031) 2553593, 2553591-2Fax: (031) 2553594

Raojan BranchFazal Tower (1st Floor), Raojan Bus Stand, MaderMohal, ChittagongPhone: (03026) 56214, 56168Fax: (03026) 56215RajshahiDivision

Baneswar BranchBaneswar Bazar, Puthia, RajshahiPhone: 01755534922 Bogra Branch331/364, Rangpur Road,Borogola, Bogra-5800Phone: (051) 78203, 67172Fax: 051-61142Swift: PRBLBDDH022 ChapaiNawabganj BranchHolding No.29 ( First Floor),Islampur, Daudpur Road, BaraIndira Moor, ChapaiNawabganjPhone: (0781) 51125, 51126Fax: (0781) 51127 Ishwardi BranchHolding # 1335/982, (1st Floor)Station Road, IshwardiPawrashava, Word # 7, Ishwardi, PabnaPhone: (07326) 64435, 64650Fax: 07326-64436 Joypurhat BranchTahera Complex,306 Main Road, JoypurhatPhone: (0571) 51156, 51157Fax: (0571) 51158 Mohadebpur BranchCharmathaBoker More,Bridge Road, Mohadebpur, Naogaon.Phone: (07426) 75041, 75088Fax: 07426-75044 Naogaon BranchJagannathBhaban (2nd & 3rd Floor) Ward # 4, Holding # 320, Main Road Bridge-er-More, NaogaonPhone: (0741) 62150, 62151Fax: 0741-62152 Natore BranchHolding # 1052 (1st floor), Dhaka-Rajshahi Highway, NatorePhone: (0771) 67001Fax: (0771) 67002 Pabna Branch423/1, Sonapotti Road, PabnaPhone: (0731) 66426, 66425Fax: (0731) 66399

Rajshahi Branch138/144, Shaheb Bazar, Rajshahi-6100Phone: (0721) 773981, 774582, 771874Fax: 0721-773980Swift: PRBLBDDH009 Sherpur BranchAzhar Complex (1st Floor)Sherpur Bus Stand, Sherpur, BograPhone: 05029-77228;PABX: 05029-77229Fax: 05029-77225

Sylhet Division

Barolekha BranchHazi Abdul Ali Trade Center, 842, Barolekha, MoulvibazarPhone: PABX: (08622) 56519,Direct: (08622) 56520Fax: (08622) 56522 Beanibazar BranchZaman Plaza (1st Floor), Beanibazar, SylhetPhone: (08223) 56139, 56140Fax: (08223) 56141 Biswanath BranchAl-Burak Shopping Center (1st Floor), Biswanath Bazar, Biswanath, SylhetPhone: (08244)56017Fax: (08224) 56004 Court Road BranchCourt Road, Moulvi Bazar -3200Phone: (0861) 53877, 53878Fax: 0861-53878Swift: PRBLBDDH014 Dhaka Dakshin BranchBakul Mansion (1st floor), College Road, Golapganj, SylhetPhone: (08227) 56180, (08227) 56187Fax: (08227) 56308 Fenchugonj BranchAkul Shah Shopping City (1st Floor), Thana Road Point, Fenchugonj Bazar, Fenchugonj, SylhetPhone: 08226-56414 (Direct),08226-56415 (PABX)Fax: 08226-56416 Habigonj BranchHolding # 3794 (1st floor), Commer-cial Area, Habiganj, HabiganjPhone: (0831) 62814, 62813Fax: (0831) 62815

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IBB Amberkhana BranchNabiba Complex, Amberkhana Airport Road, Sylhet-3100Phone: (0821) 717332, 728944Fax: (0821)-717337

Islampur BranchCentury Park. Plot # 1052, Islampur, Sylhet.Phone: (0821)761174, 761157Fax: 0821-761115 Kadamtali BranchMotin Complex, Fenchuganj, South Surma (beside Shahzalal Market), SylhetPhone: (0821)728910, 841319Fax: 0821-728630

Kulaura Branch232, Marina Square, Dakkhin Bazar, Kulaura, Moulvibazar.Phone: (08624)57081, 57082Fax: 08624-57080 Nabigonj BranchAnwaraBipan (1st Floor) Holding # 322, Osmani Road, Nabigonj, HabigonjPhone: (08328) 56025, 56029Fax: (08328) 56015

Sreemangal BranchSaptadinga Complex (1st Floor) Ward # 9, Holding No # 145 Moulviba-zar Road, Sreemangal, MoulvibazarPhone: (08626) 71181, 71183Fax: 08626-71182 Subid Bazar BranchCorner View (1st floor, west side), Plot No: 488(SA),2155(RS), SylhetPhone: (0821) 727688, 727629Fax: (0821) 2830942

Sunamganj BranchSubakth Raja Complex, 414 OldStation Road, SunamganjPhone: (0871) 62516, 62515Fax: (0871) 62514 Sylhet BranchLaldighirpar, Sylhet-3100Phone: (0821) 721127, 710208Fax: 0821-710673Swift: PRBLBDDH006

Tajpur BranchMaya View Super Market (1st Floor), Tajpur, Osmaninagar,Balaganj, SylhetPhone: (08242) 56211, 56210Fax: (08242) 56212 Upashahar BranchAlif Center (1st Floor - Front Portion), Subhanighat, Upashahar, SylhetPhone: (0821) 811366, 723524Fax: (0821) 710094

KhulnaDivision

Daulatpur BranchAkankha Tower 454, Khan-A-Sabur Road, Daulatpur, KhulnaPhone: 041-2850877, 2850876Fax: 041-2850875 Jessore Branch47, NetajiSubhas Chandra Road, Jessore town, Jessore-7400Phone: (0421) 68815, 68814Fax: 0421-68816Swift: PRBLBDDH018 Khulna Branch7, Old Jessore Road, Khulna -9100Phone: (041) 720071, 725100Fax: 041-731195Swift: PRBLBDDH004 Kushtia BranchBangabandhu Super Market 2,N S Road, KushtiaPhone: (071) 72431, 72432Fax: (071) 72430

Magura Branch219, Monowara Complex (1st Floor) Syed Ator Ali Road,MaguraPhone: 0488-51105 (Direct),0488-51055 (PABX)Fax: 0488-51200

Satkhira BranchIslam Plaza,AbulKashem Road, Satkhira.Phone: (0471) 62450, 63007Fax: 0471-63001

Barisal Division

Barisal Branch37, Hemayet Uddin Road,

Barisal - 8200Phone: (0431) 64011, 64012Fax: 0431-63712Swift: PRBLBDDH008

Rangpur Division

Dinajpur BranchMazeda Plaza ( 1st Floor), 518/473 Ganashtala, Jail Road, DinajpurPhone: (0531) 51289, 51291Fax: (0531) 51296 Rangpur BranchShah-Amanat Super Market (1st Floor), 268 Station Road,JahajCompanier More, Rangpur.Phone: (0521) 64119, 64120Fax: (0521) 64118 SME Branches

Aganagar SME BranchGolden Plaza (2nd Floor),PurboAganagar, Keranigonj, DhakaMobile: (02) 7763273Email: [email protected]: 88-02-7763273 Bhujpur SME BranchMacca Shopping Center (1st Floor), Bhujpur, Fatickchari, ChittagongMobile: 01713-255771Email: [email protected] Chatkhil SME/Agri BranchMomota Shopping Center, C&B Road, Chatkhil ,NoakhaliMobile: (03222) 75113Email: [email protected]: 03222- 75119 Companygonj SME BranchMother Shoping Complex, 5, West NabipurNabinagar Road, Muradnagar, Companygonj, ComillaMobile: (0265) 9090Email: [email protected]: (0265) 9090 Heyako Bazar SME BranchChowdhury Building,Heyako Bazar, Bhujpur, Fatikchari, ChittagongMobile: 01730794626

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Jhikorgacha SME/Agri BranchZaman Market (ist floor), Holding No. 522, Jhikorgacha, Jessore.Mobile: (04225) 71780Email: [email protected]: 04225-71788

Khawjanagar SME /Agri BranchSubarna Rice Mill,Khawjanagar, KushtiaMobile: 01730-373919Email: [email protected] Madhabpur SME BranchKatiara, Madhabpur, HabiginjMobile: (08327) 56327Email: [email protected]: 08327-56343

Madunaghat SME/Agri BranchMabia Emporium, Madunaghat Bazar, Hathazari, ChittagongMobile: (031)2573206Email: [email protected]: 031-2573205 Narsingdi SME BranchB.S. Plaza (1st Floor), 9, North KandaparaBazir More, NarsinghdiMobile: (02) 9463343Email: [email protected]: 02-9463343

Nawabpur SME Service Centre243-244 Nawabpur Road Mollik Plaza (2nd floor) Ward # 35, Thana- Bangshal Dhaka-1100.Mobile: 02-9571896Fax: 02-9512179 Posta SME BranchHolding#90, Ward#62, Water Works Road, Posta, Lalbag, DhakaMobile: (02) 9571896Email: [email protected]: (02) 9571896

Raipur SME/Agri BranchQueen Complex, Holding #514/15, Main Road, Raipur, LaxmipurMobile: (03822) 56396Email: [email protected]: 03822-56397 Sherpur SME Branch819, Municipal Road, Habib Mansion (1st Floor), Narayanpur, Sadar, SherpurMobile: (0931) 62176Email: [email protected]: 0931-62175

Sonargaon SME BranchMadina Tower (1st Floor), Habibpur, Sonargaon, NarayangonjMobile: (02) 7656359Email: [email protected]: 02-7656362

Syedpur SME BranchRadish Complex, Sayedpur, Jagnnathpur, SunamganjMobile: 01713-255776Email: [email protected]

Takerhat SME BranchNasirpur, Rajoir, MadaripurMobile: 01713-255772Email: [email protected] Thakurgaon SME BranchChowdhury Complex (1st Floor), Nishchintapur, Sadar, ThakurgaonMobile: (0561) 52295Email: [email protected]: 0561-52538Subsidiary CompaniesPrime Exchange Company (Pte) Limited, Singapore Main Branch2A Desker Road, (2nd floor)Singapore 209549Tel: (+65) 6392 4996,(+65) 6392 4829Fax: (+65) 6392 4838

Jurong East BranchBlock: 134 #01-305 Jurong Gateway Road, Singapore 600134Tel: (65) 68994647Fax: (65) 65617559Email: [email protected]

PBL Exchange (UK) LtdEmail: [email protected]: www.pblexchange.co.uk

London Branch16 Brick Lane LondonE1 6RFTel: 0207 650 0005Mob: 0793 922 7610

Oldham Branch,Manchester104 Featherstall RoadNorth OldhamOL9 6BXTel: 0161 652 2444Fax: 0161 620 6303

Birmingham Branch493 Coventry RoadBirmingham, B10 0JSTel: 01217735553Cell: 07916252007 PBL Finance (Hong Kong) LimitedSuite 1407, 14/F Admiralty CentreTower One18 Harcourt Road, Hong KongTel.: +852 25292710, +852 25292719Cell: +852 62742996; +852 63135258; +852 54191413Fax: +852 25296009SWIFT: PRBL HK HHEmail: [email protected], [email protected], [email protected]

Prime Bank Investment Ltd.Peoples Insurance Bhaban (11th Floor)36 Dilkusha C/ADhaka – 1000Phone: +88 02 9555674, +88 02 9557688Fax: +88 02 9559257Email: [email protected], [email protected]

Prime Bank Securities Limited29 Rajuk Avenue (3rd Floor)Motijheel C/A, Dhaka-1000Phone: +880-2-9513396-7Fax: +880-2-9566912Email: [email protected]: www.pbsl.com.bd

Prime Bank FoundationHouse No. # 08 (2nd Floor)Road No. # 19/A, Block - EBanani, Dhaka - 1213.PABX: 8813788, 8813800Direct Phone: 8828900Fax: 9883982Web: www.primebankfoundation.org

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Glossary

AD Authorized DealerALCO Asset Liability CommitteeATM Automated Teller MachineBB Bangladesh Bank (Central Bank of Bangladesh)B/L Bad/LossBA Bangladesh Accounting StandardBIBM Bangladesh Institute of Bank ManagementCRR Cash Reserve RequirementCRG Credit Risk GradingCSR Corporate Social ResponsiblyCPI Consumer Price IndexCDBL Central Depository Bangladesh LimitedCBS Core Banking SoftwareCRISL Credit Rating and Information Services Ltd.DCFCL Departmental Control Function Check ListDEPZ Dhaka Export Processing ZoneDP Depository ParticipantsEPS Earning Per ShareEPZ Export Processing ZoneFY Fiscal Year (July to June)GDP Gross Domestic ProductGRI Global Reporting Initiative HOB Head of BranchICAB Institute of Chartered Accountants of BangladeshIT Information TechnologyIMF International Monetary FundIAS International Accounting StandardIPO Initial Public OfferingLC Letter of CreditMBID Merchant Banking and Investment DivisionMTMF Medium Term Macro Economic FrameworkMANCOM Management CommitteeNII Net Interest IncomeNPL Non Performing LoanNCBs Nationalized Commercial BanksOBU Offshore Banking UnitPCBs Private Commercial BanksPBL Prime Bank LimitedPECL Prime Exchange Co. Pte.Ltd.PBIL Prime Bank Investment Ltd.PBSL Prime Bank Securities Ltd.POS Point of SalePV Present ValueRWA Risk Weighted AssetsRMG Readymade GarmentsROA Return on Assets (excluding contingent items)ROE Return on EquityR&D Research and DevelopmentROD Rights Share Offer DocumentSAFA South Asian Federation of AccountantsSME Small and Medium EnterpriseSOP Standard Operating ProcedureSLR Statutory Liquidity Requirement

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